JPMORGAN CHASE & CO

This executive overview of the MD&A highlights selected information and does not contain all of the information that is important to readers of this Form 10-Q. For a complete description of the trends and uncertainties, as well as the risks and critical accounting estimates affecting the Firm, this Form 10-Q and the 2023 Form 10-K should be read together and in their entirety.

(a)The ratios reflect the CECL capital transition provisions. Refer to Note 21 of this Form 10-Q and Note 27 of JPMorgan Chase’s 2023 Form 10-K for additional information.

(b)Reflects the Firm’s ratios under the Basel III Standardized approach. Refer to Capital Risk Management on pages 45-50 for additional information.

(c)NII and NIR refer to net interest income and noninterest revenue, respectively. Markets consists of CIB's Fixed Income Markets and Equity Markets businesses.

First Republic: JPMorgan Chase acquired certain assets and assumed certain liabilities of First Republic Bank from the FDIC on May 1, 2023. As a result, the current-quarter and year-to-date results include the three- and six-month impact of First Republic, respectively, compared with two months in the prior-year periods. Where meaningful to the results, this is referred to in this Form 10-Q as the "timing impact" of First Republic.

Visa shares: On April 8, 2024, Visa Inc. commenced an initial exchange offer for Visa Class B-1 common shares. On May 6, 2024, the Firm announced that Visa had accepted the Firm’s tender of its 37.2 million Visa Class B-1 common shares in exchange for a combination of Visa Class B-2 common shares and Visa Class C common shares (“Visa C shares”), resulting in a $7.9 billion net gain for the period ended June 30, 2024.

In addition, the Firm contributed $1.0 billion of Visa shares to the JPMorgan Chase Foundation. Refer to Principal Investment Risk and Market Risk Management on page 78 and pages 79-84, respectively, and Notes 2 and 5 for additional information.

Comparisons noted in the sections below are for the second quarter of 2024 versus the second quarter of 2023, unless otherwise specified.

Firmwide overview

For the second quarter of 2024, JPMorgan Chase reported net income of $18.1 billion, up 25%, earnings per share of $6.12, ROE of 23% and ROTCE of 28%. The Firm's results included the following in Corporate: a $7.9 billion net gain related to Visa shares, a $1.0 billion contribution of Visa shares to the JPMorgan Chase Foundation, and $546 million of net investment securities losses.

•Total net revenue was $50.2 billion, up 22%, reflecting:

–Net interest income ("NII") of $22.7 billion, up 4%, driven by the impact of balance sheet mix and higher rates; higher revolving balances in Card Services; the timing impact of First Republic; and higher Markets net interest income, largely offset by deposit margin compression across the LOBs and lower average deposit balances in CCB. NII excluding Markets was $22.9 billion, up 3%.

–Noninterest revenue ("NIR") was $27.5 billion, up 41%, driven by the $7.9 billion net gain related to Visa shares, higher investment banking fees, higher asset management fees, lower net investment securities losses in Treasury and CIO, and higher Markets noninterest revenue. The prior year included the preliminary estimated bargain purchase gain of $2.7 billion associated with First Republic.

•Noninterest expense was $23.7 billion, up 14%, predominantly driven by higher compensation expense, including higher revenue-related compensation and growth in employees, as well as the $1.0 billion contribution of Visa shares to the JPMorgan Chase Foundation.

•Theprovision for credit losses was $3.1 billion, reflecting $2.2 billion of net charge-offs and a net addition to the allowance for credit losses of $821 million. Net charge-offs increased by $820 million, predominantly driven by the seasoning of newer vintages and continued credit normalization in Card Services. The net addition to the allowance for credit losses included $609 million in consumer, primarily in Card Services, and $189 million inwholesale.

The provision in the prior year was $2.9 billion, reflecting a $1.5 billion net addition to the allowance for credit losses, including$1.2 billion to establish the allowance for the First Republic loans and lending-related commitments, and$1.4 billion of net charge-offs.

•The total allowance for credit losses was $25.5 billion at June 30, 2024. The Firm had an allowance for loan losses to retained loans coverage ratio of 1.81%, compared with 1.75% in the prior year.

•The Firm’snonperforming assets totaled $8.4 billion at June 30, 2024, up 7%, driven by wholesale nonaccrual loans, which reflect downgrades in Real Estate, concentrated in Office, partially offset by net sales of consumer nonaccrual loans. Refer to Wholesale Credit Portfolio and Consumer Credit Portfolio on pages 65-74 and pages 61-64, respectively, for additional information.

•Firmwide average loans of $1.3 trillion were up 6%, predominantly driven by higher loans in CCB and CIB, including the timing impact of First Republic.

•Firmwide average deposits of $2.4 trillion were down 1%, reflecting:

–a decline in CCB in existing accounts primarily due to increased customer spending,

–net issuances of structured notes in CIB as a result of client demand in Markets, and net inflows in Payments,

–the timing impact of First Republic, and

–an increase in Corporate related to the Firm's international consumer initiatives.

Refer to Liquidity Risk Management on pages 51-58 for additional information.

Selected capital and other metrics

•CET1 capital was $267 billion, and the Standardized and Advanced CET1 ratios were 15.3% and 15.5%, respectively.

•SLR was 6.1%.

•TBVPS grew 16%, ending the second quarter of 2024 at $92.77.

•As of June 30, 2024, the Firm had eligible end-of-period High Quality Liquid Assets (“HQLA”) of approximately $841 billion and unencumbered marketable securities with a fair value of approximately $623 billion, resulting in approximately $1.5 trillion of liquidity sources. Refer to Liquidity Risk Management on pages 51-58 for additional information.

Refer to Consolidated Results of Operations and Consolidated Balance Sheets Analysis on pages 9-14 and pages 15-16, respectively, for a further discussion of the Firm's results, including the provision for credit losses; and Notes 5 and 26 for additional information on First Republic.

Pre-provision profit, ROTCE, TCE, TBVPS, NII and NIR excluding Markets, and total net revenue on a managed basis are non-GAAP financial measures. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 18-19 for a further discussion of each of these measures.

Business segment highlights

Selected business metrics for each of the Firm’s lines of business ("LOB") are presented below for the second quarter of 2024.

(a)Excludes Commercial Card.

(b)Users of all mobile platforms who have logged in within the past 90 days.

(c)Represents client deposits and other third-party liabilities pertaining to the Payments and Securities Services businesses.

Refer to the Business Segment Results on pages 20-43 for a detailed discussion of results by business segment.

Credit provided and capital raised

JPMorgan Chase continues to support consumers, businesses and communities around the globe. The Firm provided new and renewed credit and raised capital for wholesale and consumer clients during the first six months of 2024, consisting of approximately:

(a)Credit and capital for corporations and non-U.S. government entities include Individuals and Individual Entities primarily consisting of Global Private Bank clients within AWM.

(b)Includes states, municipalities, hospitals and universities.

Outlook

These current expectations are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on the current beliefs and expectations of JPMorgan Chase’s management, speak only as of the date of this Form 10-Q, and are subject to significant risks and uncertainties. Refer to Forward-Looking Statements on page 90 of this Form 10-Q and Part I, Item 1A, Risk Factors on pages 9-33 of the 2023 Form 10-K for a further discussion of certain of those risks and uncertainties and the other factors that could cause JPMorgan Chase’s actual results to differ materially because of those risks and uncertainties. There is no assurance that actual results in 2024 will be in line with the outlook information set forth below, and the Firm does not undertake to update any forward-looking statements.

JPMorgan Chase’s current outlook for full-year 2024 should be viewed against the backdrop of the global and U.S. economies, financial markets activity, the geopolitical environment, the competitive environment, client and customer activity levels, and regulatory and legislative developments in the U.S. and other countries where the Firm does business. Each of these factors will affect the performance of the Firm. The Firm will continue to make appropriate adjustments to its businesses and operations in response to ongoing developments in the business, economic, regulatory and legal environments in which it operates.

Full-year 2024

•Management expects net interest income, and net interest income excluding Markets, to be approximately $91 billion, market dependent.

•Management expects adjusted expense to be approximately $92 billion, market dependent.

•Management expects the net charge-off rate in Card Services to be approximately 3.40%.

Net interest income excluding Markets and adjusted expense are non-GAAP financial measures. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 18-19.

Business Developments

First Republic acquisition

On May 1, 2023, JPMorgan Chase acquired certain assets and assumed certain liabilities of First Republic Bank (the "First Republic acquisition") from the FDIC, as receiver.

The Firm continues to progress in the conversion of operations, and the integration of clients, products and services, associated with the First Republic acquisition to align with the Firm’s businesses and operations. The Firm expects that these actions will be substantially complete by the end of 2024.

Refer to Note 26 for additional information related to First Republic.

Regulatory developments

On June 21, 2024, the Federal Reserve and the FDIC announced joint determinations on the Firm’s 2023 resolution plan, which identified no deficiencies and one shortcoming that must be satisfactorily addressed in the Firm’s next resolution plan due on July 1, 2025.

Refer to Supervision and regulation on pages 4-8 of JPMorgan Chase’s 2023 Form 10-K for additional information on the Firm’s resolution plan.