JPMorgan Chase : JPMC&Co. 3Q 2023 Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended	Commission file
September 30, 2023	number 1-5805

JPMorgan Chase & Co.

(Exact name of registrant as specified in its charter)

Delaware	13-2624428
(State or other jurisdiction of	(I.R.S. employer
incorporation or organization)	identification no.)
383 Madison Avenue,
New York, New York	10179
(Address of principal executive offices)	(Zip Code)
Registrant's telephone number, including area code: [phone]
Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which
		registered
Common stock	JPM	The New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 5.75% Non-Cumulative	JPM PR D	The New York Stock Exchange
Preferred Stock, Series DD
Depositary Shares, each representing a one-four hundredth interest in a share of 6.00% Non-Cumulative	JPM PR C	The New York Stock Exchange
Preferred Stock, Series EE
Depositary Shares, each representing a one-four hundredth interest in a share of 4.75% Non-Cumulative	JPM PR J	The New York Stock Exchange
Preferred Stock, Series GG
Depositary Shares, each representing a one-four hundredth interest in a share of 4.55% Non-Cumulative	JPM PR K	The New York Stock Exchange
Preferred Stock, Series JJ
Depositary Shares, each representing a one-four hundredth interest in a share of 4.625% Non-Cumulative	JPM PR L	The New York Stock Exchange
Preferred Stock, Series LL
Depositary Shares, each representing a one-four hundredth interest in a share of 4.20% Non-Cumulative	JPM PR M	The New York Stock Exchange
Preferred Stock, Series MM
Alerian MLP Index ETNs due May 24, 2024	AMJ	NYSE Arca, Inc.
Guarantee of Callable Fixed Rate Notes due June 10, 2032 of JPMorgan Chase Financial Company LLC	JPM/32	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Number of shares of common stock outstanding as of September 30, 2023: 2,891,008,341

FORM 10-Q

TABLE OF CONTENTS

Part I - Financial information	Page
Item 1.	Financial Statements.
	Consolidated Financial Statements - JPMorgan Chase & Co.:
	Consolidated statements of income (unaudited) for the three and nine months ended September 30, 2023 and 2022	96
	Consolidated statements of comprehensive income (unaudited) for the three andnine months ended September 30, 2023 and	97
	2022
	Consolidated balance sheets (unaudited) at September 30, 2023 and December 31, 2022	98
	Consolidated statements of changes in stockholders' equity (unaudited) for the three andnine months ended September 30, 2023	99
	and 2022
	Consolidated statements of cash flows (unaudited) for thenine months ended September 30, 2023 and 2022	100
	Notes to Consolidated Financial Statements (unaudited)	101
	Report of Independent Registered Public Accounting Firm	197
	Consolidated Average Balance Sheets, Interest and Rates (unaudited) for the threeand nine months ended September 30, 2023 and	198
	2022
	Glossary of Terms and Acronyms and Line of Business Metrics	200
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.
	Consolidated Financial Highlights	3
	Introduction	4
	Executive Overview	5
	Consolidated Results of Operations	10
	Consolidated Balance Sheets and Cash Flows Analysis	16
	Explanation and Reconciliation of the Firm's Use of Non-GAAP Financial Measures	19
	Business Segment Results	21
	Firmwide Risk Management	47
	Capital Risk Management	48
	Liquidity Risk Management	54
	Consumer Credit Portfolio	65
	Wholesale Credit Portfolio	70
	Investment Portfolio Risk Management	83
	Market Risk Management	84
	Country Risk Management	90
	Critical Accounting Estimates Used by the Firm	91
	Accounting and Reporting Developments	94
	Forward-Looking Statements	95
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	209
Item 4.	Controls and Procedures.	209
Part II - Other information
Item 1.	Legal Proceedings.	209
Item 1A.	Risk Factors.	209
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	209
Item 3.	Defaults Upon Senior Securities.	210
Item 4.	Mine Safety Disclosures.	210
Item 5.	Other Information.	210
Item 6.	Exhibits.	212

2

JPMorgan Chase & Co.

Consolidated financial highlights (unaudited)

As of or for the period ended, (in millions, except per share,												Nine months ended Sept 30,
ratio, headcount data and where otherwise noted)		3Q23		2Q23		1Q23		4Q22		3Q22		2023		2022
Selected income statement data
Total net revenue	$	39,874	$	41,307	$	38,349	$	34,547	$	32,716	$	119,530	$	94,148
Total noninterest expense		21,757		20,822		20,107		19,022		19,178		62,686		57,118
Pre-provision profit(a)		18,117		20,485		18,242		15,525		13,538		56,844		37,030
Provision for credit losses		1,384		2,899		2,275		2,288		1,537		6,558		4,101
Income before income tax expense		16,733		17,586		15,967		13,237		12,001		50,286		32,929
Income tax expense		3,582		3,114		3,345		2,229		2,264		10,041		6,261
Net income	$	13,151	$	14,472	$	12,622	$	11,008	$	9,737	$	40,245	$	26,668
Earnings per share data
Net income: Basic	$	4.33	$	4.76	$	4.11	$	3.58	$	3.13	$	13.20	$	8.53
Diluted		4.33		4.75		4.10		3.57		3.12		13.18		8.51
Average shares: Basic		2,927.5		2,943.8		2,968.5		2,962.9		2,961.2		2,946.6		2,966.8
Diluted		2,932.1		2,948.3		2,972.7		2,967.1		2,965.4		2,951.0		2,970.9
Market and per common share data
Market capitalization		419,254		422,661		380,803		393,484		306,520		419,254		306,520
Common shares at period-end		2,891.0		2,906.1		2,922.3		2,934.3		2,933.2		2,891.0		2,933.2
Book value per share		100.30		98.11		94.34		90.29		87.00		100.30		87.00
Tangible book value per share ("TBVPS")(a)		82.04		79.90		76.69		73.12		69.90		82.04		69.90
Cash dividends declared per share		1.05		1.00		1.00		1.00		1.00		3.05		3.00
Selected ratios and metrics
Return on common equity ("ROE")(b)		18 %		20 %		18 %		16 %		15 %		19 %		14 %
Return on tangible common equity ("ROTCE")(a)(b)		22		25		23		20		18		23		17
Return on assets(b)		1.36		1.51		1.38		1.16		1.01		1.42		0.92
Overhead ratio		55		50		52		55		59		52		61
Loans-to-deposits ratio		55		54		47		49		46		55		46
Firm Liquidity coverage ratio ("LCR") (average) (c)		112		112		114		112		113		112		113
JPMorgan Chase Bank, N.A. LCR (average) (c)		123		129		140		151		165		123		165
Common equity Tier 1 ("CET1") capital ratio (d)		14.3		13.8		13.8		13.2		12.5		14.3		12.5
Tier 1 capital ratio(d)		15.9		15.4		15.4		14.9		14.1		15.9		14.1
Total capital ratio(d)		17.8		17.3		17.4		16.8		16.0		17.8		16.0
Tier 1 leverage ratio(c)(d)		7.1		6.9		6.9		6.6		6.2		7.1		6.2
Supplementary leverage ratio ("SLR")(c)(d)		6.0		5.8		5.9		5.6		5.3		6.0		5.3
Selected balance sheet data (period-end)
Trading assets	$	601,993	$	636,996	$	578,892	$	453,799	$	506,487	$	601,993	$	506,487
Investment securities, net of allowance for credit losses		585,380		612,203		610,075		631,162		618,246		585,380		618,246
Loans		1,310,059		1,300,069		1,128,896		1,135,647		1,112,633		1,310,059		1,112,633
Total assets		3,898,333		3,868,240		3,744,305		3,665,743		3,773,884		3,898,333		3,773,884
Deposits		2,379,526		2,398,962		2,377,253		2,340,179		2,408,615		2,379,526		2,408,615
Long-term debt		362,793		364,078		295,489		295,865		287,473		362,793		287,473
Common stockholders' equity		289,967		285,112		275,678		264,928		255,180		289,967		255,180
Total stockholders' equity		317,371		312,516		303,082		292,332		288,018		317,371		288,018
Headcount		308,669	(e)	300,066		296,877		293,723		288,474		308,669	(e)	288,474
Credit quality metrics
Allowances for credit losses	$	24,155	$	24,288	$	22,774	$	22,204	$	20,797	$	24,155	$	20,797
Allowance for loan losses to total retained loans		1.73 %		1.75 %		1.85 %		1.81 %		1.70 %		1.73 %		1.70 %
Nonperforming assets	$	8,131	$	7,838	$	7,418	$	7,247	$	7,243	$	8,131	$	7,243
Net charge-offs		1,497		1,411		1,137		887		727		4,045		1,966
Net charge-off rate		0.47 %		0.47 %		0.43 %		0.33 %		0.27 %		0.46 %		0.25 %

As of and for the period ended September 30, 2023, the results of the Firm include the impact of First Republic. Refer to Business Segment Results on page 23 and Note 28 for additional information.

1. Pre-provisionprofit, TBVPS and ROTCE are each non-GAAP financial measures. Tangible common equity ("TCE") is also a non-GAAP financial measure. Refer to Explanation and Reconciliation of the Firm's Use of Non-GAAP Financial Measures on pages 19-20 for a further discussion of these measures.
2. Ratios are based upon annualized amounts.
3. For the nine months ended September 30, 2023 and 2022, the percentage represents average ratios for the three months ended September 30, 2023 and 2022.
4. The ratios reflect the Current Expected Credit Losses ("CECL") capital transition provisions. Refer to Capital Risk Management on pages 48-53 of this Form 10-Q and pages 86-96 of JPMorgan Chase's 2022 Form 10-K for additional information.
5. Includes 4,774 individuals associated with First Republic who became employees effective July 2, 2023.

3

INTRODUCTION

The following is Management's discussion and analysis of the financial condition and results of operations ("MD&A") of JPMorgan Chase & Co. ("JPMorgan Chase" or the "Firm") for the third quarter of 2023.

This Quarterly Report on Form 10-Q for the third quarter of 2023 ("Form 10-Q") should be read together with JPMorgan Chase's Annual Report on Form 10-K for the year ended December 31, 2022 ("2022 Form 10- K"). Refer to the Glossary of terms and acronyms and line of business metrics on pages 200-208 for definitions of terms and acronyms used throughout this Form 10-Q.

This Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These 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 95 of this Form 10-Q; Part I, Item 1A, Risk Factors on pages 9-32 of the 2022 Form 10-K; and Part II, Item 1A, Risk Factors on page 209 of this Form 10-Q for a discussion of certain of those risks and uncertainties and the 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 will be in line with any outlook information set forth herein, and the Firm does not undertake to update any forward-looking statements.

JPMorgan Chase & Co. (NYSE: JPM), a financial holding company incorporated under Delaware law in 1968, is a leading financial services firm based in the United States of America ("U.S."), with operations worldwide. JPMorgan Chase had $3.9 trillion in assets and $317.4 billion in stockholders' equity as of September 30, 2023. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. Under the J.P. Morgan and Chase brands, the Firm serves millions of customers, predominantly in the U.S., and many of the world's most prominent corporate, institutional and government clients globally.

JPMorgan Chase's principal bank subsidiary is JPMorgan Chase Bank, National Association ("JPMorgan Chase Bank, N.A."), a national banking association with U.S. branches in 48 states and Washington, D.C. JPMorgan Chase's principal non-bank subsidiary is J.P. Morgan Securities LLC ("J.P. Morgan Securities"), a U.S. broker-dealer. The bank and non-bank subsidiaries of JPMorgan Chase operate nationally as well as through overseas branches and subsidiaries, representative offices and subsidiary foreign banks. The Firm's principal operating subsidiaries outside the U.S. are J.P. Morgan Securities plc and J.P. Morgan SE ("JPMSE"), which are subsidiaries of JPMorgan Chase Bank, N.A. and are based in the United Kingdom ("U.K.") and Germany, respectively.

For management reporting purposes, the Firm's activities are organized into four major reportable business segments, as well as a Corporate segment. The Firm's consumer business segment is Consumer & Community Banking ("CCB"). The Firm's wholesale business segments are the Corporate & Investment Bank ("CIB"), Commercial Banking ("CB"), and Asset & Wealth Management ("AWM"). Refer to Business Segment Results on pages 21-46 and Note 27 of this Form 10-Q, and Note 32 of JPMorgan Chase's 2022 Form 10-K, for a description of the Firm's business segments and the products and services they provide to their respective client bases. On May 1, 2023, JPMorgan Chase acquired certain assets and assumed certain liabilities of First Republic Bank (the "First Republic acquisition") from the Federal Deposit Insurance Corporation ("FDIC"). Refer to Note 28 for additional information.

The Firm's website is www.jpmorganchase.com. JPMorgan Chase makes available on its website, free of charge, annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after it electronically files or furnishes such material to the U.S. Securities and Exchange Commission (the "SEC") at www.sec.gov. JPMorgan Chase makes new and important information about the Firm available on its website at https://www.jpmorganchase.com, including on the Investor Relations section of its website at https://www.jpmorganchase.com/ir. Information on the Firm's website is not incorporated by reference into this Form 10- Q or the Firm's other filings with the SEC.

4

EXECUTIVE OVERVIEW

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 2022 Form 10-K should be read together and in their entirety.

Financial performance of JPMorgan Chase

(unaudited)		Three months ended September 30,					Nine months ended September 30,
As of or for the period ended,
(in millions, except per share data and ratios)		2023		2022		Change			2023		2022		Change
Selected income statement data	$	17,148						$	54,314
Noninterest revenue	$	15,198		13	%	$	47,630		14	%
Net interest income		22,726		17,518		30				65,216		46,518		40
Total net revenue		39,874		32,716		22				119,530		94,148		27
Total noninterest expense		21,757		19,178		13				62,686		57,118		10
Pre-provision profit		18,117		13,538		34				56,844		37,030		54
Provision for credit losses		1,384		1,537		(10)				6,558		4,101		60
Net income		13,151		9,737		35				40,245		26,668		51
Diluted earnings per share		4.33		3.12		39				13.18		8.51		55
Selected ratios and metrics		18 %								19 %
Return on common equity			15 %							14 %
Return on tangible common equity		22		18						23		17
Book value per share	$	100.30	$	87.00		15		$	100.30	$	87.00		15
Tangible book value per share		82.04		69.90		17				82.04		69.90		17
Capital ratios(a)		14.3 %								14.3 %
CET1 capital			12.5 %							12.5 %
Tier 1 capital		15.9		14.1						15.9		14.1
Total capital		17.8		16.0						17.8		16.0
Memo:	$	23,173						$	66,479
NII excluding Markets(b)	$	16,923		37		$	42,357		57
NIR excluding Markets(b)		10,932		9,797		12				33,963		31,040		9
Markets(b)		6,581		6,771		(3)				21,981		23,314		(6)
Total net revenue - managed basis	$	40,686	$	33,491		21			$	122,423	$	96,711		27

As of and for the period ended September 30, 2023, the results of the Firm include the impact of First Republic. Refer to page 23 and Note 28 for additional information.

1. The ratios reflect the CECL capital transition provisions. Refer to Capital Risk Management on pages 48-53 of this Form 10-Q and pages 86-96 of JPMorgan Chase's 2022 Form 10-K for additional information.
2. NII and NIR refer to net interest income and noninterest revenue, respectively. Markets consists of CIB's Fixed Income Markets and Equity Markets businesses.

Comparisons noted in the sections below are for the third quarter of 2023 versus the third quarter of 2022, unless otherwise specified.

Firmwide overview

For the third quarter of 2023, JPMorgan Chase reported net income of $13.2 billion, up 35%, earnings per share of $4.33, ROE of 18% and ROTCE of 22%. The Firm's results for the third quarter of 2023 included investment securities losses of $669 million in Treasury and CIO, and legal expense of $665 million, predominantly in CIB.

• Total net revenue was $39.9 billion, up 22%, reflecting:
• • Net interest income ("NII") of $22.7 billion, up 30%, driven by higher rates, the impact of First Republic and higher revolving balances in Card Services, partially offset by lower average deposit balances and lower

Markets net interest income. NII excluding Markets was $23.2 billion, up 37%.

• • Noninterest revenue ("NIR") was $17.1 billion, up 13%, driven by higher Markets noninterest revenue, the impact of First Republic, higher asset management fees and lower net investment securities losses in Treasury and CIO, partially offset by impairment losses on equity investments in CIB.
  • Total Markets revenue declined reflecting lower Markets NII, predominantly offset by higher NIR.
• Noninterest expense was $21.8 billion, up 13%, predominantly driven by the impact of First Republic, higher compensation expense, including growth in front office and technology headcount as well as wage inflation, and higher legal expense.

5

• The provision for credit losses was $1.4 billion, reflecting $1.5 billion of net charge-offs and a net reduction in the allowance for credit losses of $113 million. The net reduction in the allowance for credit losses reflected:
• • $184 million in wholesale, predominantly driven by the impact of changes in the loan and lending-related commitment portfolios in CIB, partially offset by the net effect of changes in the Firm's macroeconomic scenarios,

partially offset by

• a net addition of $58 million in consumer, primarily driven by CCB, comprised of $301 million in Card Services, predominantly offset by a $250 million net reduction in Home Lending.

Net charge-offs increased $770 million, predominantly driven by CCB, primarily Card Services.

The prior year included an $808 million net addition to the allowance for credit losses and net charge-offs of $727 million.

• The total allowance for credit losses was $24.2 billion at September 30, 2023. The Firm had an allowance for loan losses to retained loans coverage ratio of 1.73%, compared with 1.70% in the prior year.
• The Firm's nonperforming assets totaled $8.1 billion at September 30, 2023, up 12%, driven by wholesale nonaccrual loans, which reflects the impact of downgrades. Refer to Wholesale Credit Portfolio and Consumer Credit Portfolio on pages 70-79 and pages 65-69, respectively, for additional information.
• Firmwide average loans of $1.3 trillion were up 17%, predominantly driven by higher loans in CCB and CB, primarily as a result of First Republic.
• Firmwide average deposits of $2.4 trillion were down 4%, driven by:
• • continued migration in AWM into higher-yielding investments; a net decline in CCB reflecting higher customer spending in existing accounts; and continued deposit attrition in CB,

partially offset by

• increases in CCB associated with First Republic, in Corporate related to the Firm's international consumer initiatives, and in CIB due to net issuances of structured notes as a result of client demand.

Refer to Liquidity Risk Management on pages 54-61 for additional information.

Selected capital and other metrics

• CET1 capital was $242 billion, and the Standardized and Advanced CET1 ratios were 14.3% and 14.5%, respectively.
• SLR was 6.0%.
• TBVPS grew 17%, ending the third quarter of 2023 at $82.04.
• As of September 30, 2023, the Firm had eligible end-of-periodHigh Quality Liquid Assets ("HQLA") of approximately $796 billion and unencumbered marketable securities with a fair value of approximately $590 billion, resulting in approximately $1.4 trillion of liquidity sources. Refer to Liquidity Risk Management on pages 54-61 for additional information.

Refer to Consolidated Results of Operations and Consolidated Balance Sheets Analysis on pages 10-15 and pages 16-18, respectively, for a further discussion of the Firm's results; and Business Segment Results on page 23 and Note 28 for additional information on the First Republic acquisition.

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 19-20 for a further discussion of each of these measures.

6

Business segment highlights

Selected business metrics for each of the Firm's four lines of business ("LOB"), including the impact of First Republic, are presented below for the third quarter of 2023.

• Average deposits down 3%; client investment assets

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 nine months of 2023, consisting of:

		up 43%
CCB	•	Average loans up 27% year-over-year ("YoY") and
	9% quarter-over-quarter ("QoQ"); Card Services net
ROE 41%		charge-off rate of 2.49%
	•	Debit and credit card sales volume (a) up 8%
	•	Active mobile customers(b) up 9%
	•	#1 ranking for Global Investment Banking fees with
CIB		8.6% wallet share year-to-date
•	Total Markets revenue of $6.6 billion, down 3%, with
ROE 11%
	Fixed Income Markets up 1% and Equity Markets
		down 10%
	•	Gross Investment Banking and Markets revenue of
CB		$821 million, up 8%

$ 1.7 trillion

$182 billion

$27 billion

$775 billion

$709 billion

$37 billion

Total credit provided and capital raised (including loans and commitments)

Credit for consumers

Credit for U.S. small businesses

Credit for corporations

Capital for corporate clients and non-U.S. government entities

Credit and capital for nonprofit and U.S. government entities(a)

ROE 25%	• Average loans up 24% YoY and 4% QoQ; average
	deposits down 7%
	• Assets under management ("AUM") of $3.2 trillion,
AWM	up 22%
• Average loans up 3% YoY and 2% QoQ; average
ROE 32%
	deposits down 20%

1. Excludes Commercial Card.
2. Users of all mobile platforms who have logged in within the past 90 days. As of September 30, 2023, excludes First Republic.

Refer to the Business Segment Results on pages 21-46 for a detailed discussion of results by business segment.

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

7

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 95 of this Form 10-Q; Part I, Item 1A, Risk Factors on pages 9-32 of the 2022 Form 10-K; and Part II, Item 1A, Risk Factors on page 209 of this Form 10-Q 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 2023 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 2023 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.

In May 2023, the FDIC issued a notice of proposed rulemaking recommending a special assessment related to the systemic risk determination made on March 12, 2023, to recover losses to the Deposit Insurance Fund ("DIF") arising from the protection of uninsured depositors resulting from recent bank resolutions. In its current form, the rule would impose a special assessment at an annual rate of 12.5 basis points on certain banks' estimated uninsured deposits reported as of December 31, 2022. If this rule remains as proposed, the Firm expects to recognize an estimated assessment expense of approximately $3 billion (pre-tax) when the rule is finalized.

Full-year 2023

• Management expects net interest income to be approximately $88.5 billion and net interest income excluding Markets to be approximately $89 billion, market dependent.
• Management expects adjusted expense to be approximately $84 billion, market dependent and excluding any FDIC special assessment.
• Management expects the net charge-off rate in Card Services to be approximately 2.5%.

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 19-20.

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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 Federal Deposit Insurance Corporation ("FDIC"), as receiver.

JPMorgan Chase's Consolidated Financial Statements as of and for the period ended September 30, 2023 reflect the impact of First Republic. Where meaningful to the disclosure, the impact of the First Republic acquisition, as well as subsequent related business and activities, are disclosed in various sections of this Form 10-Q. The Firm continues to convert certain operations, and to integrate clients, products and services, associated with the First Republic acquisition to align with the Firm's businesses and operations. The Firm also continues to evaluate to which segments certain clients, products and services, primarily deposits, should be allocated. Accordingly, reporting classifications and allocations may change in future periods, including across the Firm's segments.

Refer to Note 28 and page 23 for additional information related to First Republic.

Current market and economic conditions

Refer to Part I, Item 1A, Risk Factors on pages 9-32 of JPMorgan Chase's 2022 Form 10-K and Part II, Item 1A, Risk Factors on page 209 of this Form 10-Q for a discussion of material risk factors that could affect the Firm. These risk factors include potential impacts to the Firm associated with current market and economic conditions, including inflationary pressures, higher interest rates and ongoing geopolitical tensions and hostilities, any or all of which could result in additional market disruption, government actions (including with respect to monetary policies), continuing impacts to global supply chains, and other geopolitical risks.

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CONSOLIDATED RESULTS OF OPERATIONS

This section provides a comparative discussion of JPMorgan Chase's Consolidated Results of Operations on a reported basis for the three and nine months ended September 30, 2023 and 2022, unless otherwise specified. Factors that relate primarily to a single business segment are discussed in more detail within that business segment's results. Refer to pages 91-93 of this Form 10-Q and pages 149-152 of JPMorgan Chase's 2022 Form 10-K for a discussion of the Critical Accounting Estimates Used by the Firm that affect the Consolidated Results of Operations.

Revenue

		Three months ended September 30,				Nine months ended September 30,
(in millions)		2023		2022	Change			2023		2022	Change
Investment banking fees	$	1,722	$	1,674	3	%	$	4,884	$	5,268	(7) %
Principal transactions		6,210		5,383	15				20,735		15,478	34
Lending- and deposit-related fees		2,039		1,731	18				5,487		5,443	1
Asset management fees		3,904		3,495	12				11,143		10,664	4
Commissions and other fees		1,705		1,574	8				5,139		5,007	3
Investment securities losses		(669)		(959)	30				(2,437)		(1,506)	(62)
Mortgage fees and related income		414		314	32				913		1,152	(21)
Card income		1,209		1,086	11				3,537		3,194	11
Other income(a)(b)(c)		614		900	(32)				4,913		2,930	68
Noninterest revenue		17,148		15,198	13				54,314		47,630	14
Net interest income		22,726		17,518	30				65,216		46,518	40
Total net revenue	$	39,874	$	32,716	22	%		$	119,530	$	94,148	27	%

1. Included operating lease income of $695 million and $870 million for the three months ended September 30, 2023 and 2022, respectively, and $2.2 billion and $2.9 billion for the nine months ended September 30, 2023 and 2022, respectively.
2. Included measurement period adjustments of $100 million in the three months ended September, 2023, increasing the estimated bargain purchase gain to $2.8 billion in Corporate, for the nine months ended September 30, 2023, associated with the First Republic acquisition. Refer to Business Segment Results on page 23, and Notes 6 and 28 for additional information.
3. Includes losses on tax-oriented investments. Refer to Note 6 for additional information.

Quarterly results

Investment banking fees in CIB included:

• higher debt underwriting fees driven by higher issuance activity in high-yield bonds and higher originations in leveraged loans reflecting wallet share gains, partially offset by lower issuance activity in high- grade bonds impacted by higher rates, and
• lower advisory fees due to a lower number of completed transactions, reflecting the lower level of announced deals in prior periods amid a challenging environment.

Refer to Business Segment Results and CIB segment results on pages 21-46 and pages 29-35, respectively, and Note 6 for additional information.

Principal transactions revenue increased, reflecting in CIB:

• higher principal transactions revenue in Equity Markets, primarily in Equity Derivatives and Prime Finance. The higher principal transactions revenue in Equities was more than offset by lower Equity Markets net interest income, primarily due to higher funding costs, and
• in Fixed Income Markets, principal transactions revenue was relatively flat, primarily due to lower revenue in Rates and Currencies & Emerging Markets, offset by higher revenue in Securitized Products and Fixed Income Financing.

The increase in principal transactions revenue also included the impact of higher short-term cash deployment activities in Treasury and CIO as a result of the current interest rate environment.

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.

Refer to CIB and Corporate segment results on pages 29-35 and pages 45-46, respectively, and Note 6 for additional information.

Lending- and deposit-related fees increased due to:

• higher lending-related revenue driven by the amortization of the fair value discount on certain acquired lending-related commitments associated with First Republic, predominantly in AWM and CB,

partially offset by

• lower cash management fees in CIB and CB driven by the higher level of credits earned by clients that reduce such fees.

Refer to CIB, CB and AWM segment results on pages 29-35, pages 36- 39 and pages 40-44, respectively, and Note 6 and Note 28 for additional information on the First Republic acquisition.

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