JPMORGAN CHASE & CO

This section provides a comparative discussion of JPMorganChase’s Consolidated Results of Operations on a reported basis for the two-year period ended December 31, 2024, unless otherwise specified. Refer to Consolidated Results of Operations on pages 54-57 of the Firm’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”) for a discussion of the 2023 versus 2022 results. Factors that relate primarily to a single business segment or Corporate are discussed in more detail in the results of that segment or Corporate. Refer to pages 161–164 for a discussion of the Critical Accounting Estimates Used by the Firm that affect the Consolidated Results of Operations.

(a)Included operating lease income of $2.8 billion, $2.8 billion and $3.7 billion for the years ended December 31, 2024, 2023 and 2022, respectively. Refer to Note 6 for additional information.

(b)Effective January 1, 2024, as a result of adopting updates to the Accounting for Investments in Tax Credit Structures guidance, the amortization of certain of the Firm’s alternative energy tax-oriented investments that was previously recognized in other income is now recognized in income tax expense. Refer to Notes 1, 6, 14 and 25 for additional information.

(c)Included the net gain related to Visa shares of $7.9 billion recorded in the second quarter of 2024. Refer to Notes 2 and 6 for additional information.

(d)Included the estimated bargain purchase gain of $2.8 billion for the year ended December 31, 2023 associated with the First Republic acquisition. Refer to Notes 6 and 34 for additional information.

Investment banking fees increased, reflecting in CIB the benefit of favorable market conditions, which resulted in:

•higher debt underwriting fees predominantly driven by higher industry-wide issuances in leveraged loans, and in high-grade and high-yield bonds,

•higher equity underwriting fees driven by higher industry-wide fees and wallet share gains in IPOs, and in follow-on and convertible securities offerings, and

•higher advisory fees driven by higher industry-wide mergers and acquisitions (“M&A”) activity and wallet share gains.

Refer to CIB segment results on pages 77–83 and Note 6 for additional information.

Principal transactions revenue increased driven by CIB, reflecting:

•higher Equity Markets revenue in Prime Finance and Equity Derivatives,

•lower Fixed Income Markets revenue, reflecting the net impact of declines in revenue across macro businesses and higher revenue in Securitized Products.

Principal transactions revenue in CIB generally has offsets across other revenue lines, including net interest income. The Firm assesses the performance of its Markets business on a total net revenue basis.

The increase in CIB was partially offset by a net decrease in Corporate, reflecting lower revenue in Treasury and CIO, and gains compared with a net loss on certain legacy private equity investments in the prior year.

Refer to CIB segment and Corporate results on pages 77–83 and pages 88–90, respectively, and Note 6 for additional information.

Lending- and deposit-related fees increased, reflecting, in CIB, higher deposit-related fees, including cash management fees in Payments, on higher volume; and higher lending-related fees, including loan commitment fees. These factors were largely offset by a decline in the amortization of the fair value discount on certain acquired lending-related commitments associated with First Republic, primarily in AWM, as certain of the commitments have expired.

Refer to CIB and AWM segment results on pages 77–83 and pages 84–87, respectively, and Note 6 for additional information.

Asset management fees increased, reflecting, in AWM and CCB, higher average market levels and net inflows, as well as higher performance fees in AWM; and in CCB, the timing impact of First Republic. Refer to CCB and AWM segment results on pages 73–76 and pages 84–87, respectively, and Note 6 for additional information.

Commissions and other fees increased, predominantly due to higher brokerage commissions and fees on higher volume, and higher custody fees, in both CIB and AWM, as well as higher annuity sales commissions in CCB. Refer to CCB, CIB and AWM segment results on pages 73–76, pages 77–83 and pages 84–87, respectively, and Note 6 for additional information.

Investment securities losses decreased, reflecting lower losses on sales of securities, primarily U.S. Treasuries and U.S. GSE and government agency MBS, associated with repositioning the investment securities portfolio in Treasury and CIO. Refer to Corporate results on pages 88–90 and Note 10 for additional information.

Mortgage fees and related income increased in Home Lending, reflecting higher production revenue, which included the timing impact of First Republic. Refer to CCB segment results on pages 73–76, and Note 6 and 15 for additional information.

Card income increased, reflecting higher net interchange on increased debit and credit card sales volume, as well as higher annual fees in CCB, partially offset by an increase in amortization related to new account origination costs. Refer to CCB segment results on pages 73–76 and Note 6 for additional information.

Other income increased, reflecting:

•in Corporate:

–the $7.9 billion net gain related to Visa shares recorded in the second quarter of 2024,

–the absence of the prior-year $2.8 billion estimated bargain purchase gain associated with the First Republic acquisition, and

•in CIB:

–the impact of the adoption of updates to the Accounting for Investments in Tax Credit Structures guidance effective January 1, 2024, resulting in the amortization of certain of the Firm's alternative energy tax-oriented investments previously recognized in other income which is now recognized in income tax expense.

Both periods included impairment losses related to certain equity investments.

The prior year included a gain of $339 million on the original minority interest in China International Fund Management ("CIFM"), partially offset by net investment valuation losses, both in AWM.

Refer to AWM segment results on pages 84–87 for additional information on CIFM; Notes 1, 6, 14 and 25 for additional information on the adoption of updates to the Accounting for Investments in Tax Credit Structures guidance; Notes 2 and 6 for additional information on Visa shares; and Notes 6 and 34 for additional information on the First Republic acquisition.

Net interest income increased driven by the impact of balance sheet actions, primarily reinvestments in the investment securities portfolio, higher revolving balances in Card Services, the timing impact of First Republic, higher wholesale deposit balances and higher Markets net interest income. These factors were largely offset by deposit margin compression across the lines of business and lower average deposit balances in CCB.

The Firm’s average interest-earning assets were $3.5 trillion, up $212 billion, and the yield was 5.50%, up 36 bps. The net yield on these assets, on an FTE basis, was 2.63%, a decrease of 7 bps. The net yield excluding Markets was 3.84%, relatively flat when compared to the prior year.

Refer to the Consolidated average balance sheets, interest and rates schedule on pages 322–326 for additional information. Net yield excluding Markets is a non-GAAP financial measure. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 67–69 for an additional discussion of net yield excluding Markets.

The provision for credit losses was $10.7 billion, reflecting $8.6 billion of net charge-offs and a $2.0 billion net addition to the allowance for credit losses.

Net charge-offs included $7.8 billion inconsumer, predominantly driven by Card Services, reflecting the seasoning of vintages originated in recent years, credit normalization and balance growth, and $0.8 billion inwholesale, primarily in Real Estate, largely concentrated in Office.

The net addition to the allowance for credit losses consisted of:

•a net reduction of $19 million inwholesale, reflecting:

The provision in the prior year was $9.3 billion, reflecting net charge-offs of $6.2 billion and a $3.1 billion net addition to the allowance for credit losses, which included $1.2 billion to establish the allowance for the First Republic loans and lending-related commitments in the second quarter of 2023.

Refer to CCB, CIB and AWM segment and Corporate results on pages 73–76, pages 77–83, pages 84–87, and pages 88–90, respectively; Allowance for Credit Losses on pages 137–139; Critical Accounting Estimates Used by the Firm on pages 161–164; and Notes 12 and 13 for additional information on the credit portfolio and the allowance for credit losses.

(a)Includes depreciation expense associated with auto operating lease assets. Refer to Note 18 for additional information.

(b)Refer to Note 6 for additional information.

(c)Included a $1.0 billion contribution of Visa shares to the JPMorgan Chase Foundation recorded in the second quarter of 2024. Refer to Notes 2 and 6 for additional information.

Compensation expense increased driven by:

•higher revenue-related compensation across the LOBs,

•growth in the number of employees across the LOBs and Corporate, primarily in front office and technology, and

•the impact of First Republic, predominantly in CCB, reflecting timing and the classification of the prior-year expense, which was recognized in other expense in Corporate in the second quarter of 2023 as the individuals associated with First Republic were not employees of the Firm until July 2023.

Noncompensation expense decreased as a result of:

•lower FDIC-related expense recognized in Corporate, which included the impact of a $2.9 billion special assessment recognized in the fourth quarter of 2023, compared with a $725 million increase to the FDIC special assessment recognized in the first quarter of 2024, and

•lower legal expense, reflecting the net impact of declines in CCB, CIB and Corporate, and an increase in AWM,

•a $1.0 billion contribution of Visa shares to the JPMorgan Chase Foundation recorded in the second quarter of 2024 in Corporate,

•higher investments in technology in the businesses, as well as marketing, predominantly in CCB,

•higher occupancy expense, which included the impact of net additions to the Firm's properties,

•higher distribution fees in AWM and brokerage expense in CIB, and

•the timing impact associated with First Republic, offset by the alignment of expense to compensation expense, as noted above.

Refer to Notes 2 and 6 for additional information on Visa shares; Note 6 for additional information on other expense; and Note 34 for additional information on the First Republic acquisition.

(a)Effective January 1, 2024, as a result of adopting updates to the Accounting for Investments in Tax Credit Structures guidance, the amortization of certain of the Firm’s alternative energy tax-oriented investments is now recognized in income tax expense. Refer to Notes 1, 6, 14 and 25 for additional information.

Theeffective tax rate increased predominantly driven by:

•the adoption of updates to the Accounting for Investments in Tax Credit Structures guidance on January 1, 2024, and

•a higher level of pretax income and changes in the mix of income and expenses subject to U.S. federal, state and local taxes, including the impact of the net gain on Visa shares and the contribution of Visa shares to the JPMorgan Chase Foundation recorded in the second quarter of 2024.

The prior year included the impact to income tax expense associated with the First Republic acquisition that was reflected in the estimated bargain purchase gain, and an income tax benefit related to the finalization of certain income tax regulations, both of which resulted in a reduction in the Firm's effective tax rate.

Refer to Note 25 for additional information.