JPMorgan Chase : SUPPLEMENTAL FINANCIAL INFORMATION FIVE QUARTER TREND THROUGH 1Q24 AND FULL YEAR 2023 & 2022 - Form 8-K
May 15, 2024 at 04:46 pm EDT
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SUPPLEMENTAL FINANCIAL INFORMATION
(Related to the Reportable Business Segment Reorganization)
FIVE QUARTER TREND THROUGH 1Q24
AND FULL YEAR 2023 & 2022
JPMORGAN CHASE & CO.
TABLE OF CONTENTS
Page(s)
Summary of the Reportable Business Segment Reorganization
2
Business Segment Results - Managed Basis (a)
Commercial & Investment Bank ("CIB")
3-6
Non-GAAP Financial Measures
7
(a) Refer to page 7 for a further discussion of managed basis.
JPMORGAN CHASE & CO.
SUMMARY OF THE REPORTABLE BUSINESS SEGMENT REORGANIZATION
JPMorgan Chase & Co. ("JPMorgan Chase" or the "Firm") is furnishing this supplemental financial information reflecting the reorganization of the Firm's reportable business segments that became effective in the second quarter of 2024, resulting in:
•The combination of the Corporate & Investment Bank and Commercial Banking business segments to form one segment called Commercial & Investment Bank ("CIB"); and
•No impact to the Firm's other segments.
The following table provides a summary of the Firm's impacted business segments prior to and after the reorganization.
The pages that follow provide supplemental financial information in order to assist investors in understanding how the Firm's business segment results would have been presented in previously-filed reports had the Firm's activities been organized for management reporting purposes in the manner in which the Firm's business segments are being managed commencing in the second quarter of 2024. Only the financial information of the newly combined CIB is included in this document as the other segments were not impacted.
Page 2
JPMORGAN CHASE & CO.
COMMERCIAL & INVESTMENT BANK
FINANCIAL HIGHLIGHTS
(in millions, except ratio data)
QUARTERLY TRENDS
FULL YEAR
1Q24 Change
2023 Change
1Q24
4Q23
3Q23
2Q23
1Q23
4Q23
1Q23
2023
2022
2022
INCOME STATEMENT
REVENUE
Investment banking fees
$
2,014
$
1,667
$
1,729
$
1,569
$
1,666
21
%
21
%
$
6,631
$
6,977
(5)
%
Principal transactions
6,634
3,649
5,971
6,742
7,432
82
(11)
23,794
19,792
20
Lending- and deposit-related fees
973
909
966
782
766
7
27
3,423
3,662
(7)
Commissions and other fees
1,272
1,208
1,184
1,238
1,249
5
2
4,879
5,113
(5)
Card income
525
552
572
601
488
(5)
8
2,213
1,934
14
All other income
743
1,041
420
705
703
(29)
6
2,869
2,060
39
Noninterest revenue
12,161
9,026
10,842
11,637
12,304
35
(1)
43,809
39,538
11
Net interest income
5,423
5,948
4,919
4,870
4,807
(9)
13
20,544
20,097
2
TOTAL NET REVENUE (a)
17,584
14,974
15,761
16,507
17,111
17
3
64,353
59,635
8
Provision for credit losses
1
576
(95)
1,135
475
(100)
(100)
2,091
2,426
(14)
NONINTEREST EXPENSE
Compensation expense
4,896
4,107
4,155
4,117
4,726
19
4
17,105
16,214
5
Noncompensation expense
3,828
4,062
4,663
4,077
4,065
(6)
(6)
16,867
15,855
6
TOTAL NONINTEREST EXPENSE
8,724
8,169
8,818
8,194
8,791
7
(1)
33,972
32,069
6
Income before income tax expense
8,859
6,229
7,038
7,178
7,845
42
13
28,290
25,140
13
Income tax expense
2,237
2,052
2,011
1,878
2,077
9
8
8,018
6,002
34
NET INCOME
$
6,622
$
4,177
$
5,027
$
5,300
$
5,768
59
15
$
20,272
$
19,138
6
FINANCIAL RATIOS
ROE
20
%
11
%
14
%
15
%
17
%
14
%
14
%
Overhead ratio
50
55
56
50
51
53
54
Compensation expense as percentage of total net revenue
28
27
26
25
28
27
27
REVENUE BY BUSINESS
Investment Banking
$
2,216
$
1,783
$
1,818
$
1,687
$
1,788
24
24
$
7,076
$
7,205
(2)
Lending
1,724
1,763
1,934
1,749
1,450
(2)
19
6,896
5,882
17
Payments
4,466
4,456
4,217
4,714
4,431
-
1
17,818
13,490
32
Other
(3)
36
24
38
9
NM
NM
107
244
(56)
Total Banking & Payments
8,403
8,038
7,993
8,188
7,678
5
9
31,897
26,821
19
Fixed Income Markets
5,327
4,068
4,548
4,608
5,753
31
(7)
18,977
18,784
1
Equity Markets
2,686
1,779
2,069
2,454
2,685
51
-
8,987
10,378
(13)
Securities Services
1,183
1,191
1,212
1,221
1,148
(1)
3
4,772
4,488
6
Credit Adjustments & Other (b)
(15)
(102)
(61)
36
(153)
85
90
(280)
(836)
67
Total Markets & Securities Services
9,181
6,936
7,768
8,319
9,433
32
(3)
32,456
32,814
(1)
TOTAL NET REVENUE
$
17,584
$
14,974
$
15,761
$
16,507
$
17,111
17
3
$
64,353
$
59,635
8
Banking & Payments revenue by client coverage segment
Global Corporate Banking & Global Investment Banking (c)
$
5,820
$
5,415
$
5,469
$
5,452
$
5,364
7
%
9
%
$
21,700
$
19,325
12
%
Commercial Banking (d)
2,837
2,949
2,874
2,801
2,426
(4)
17
11,050
7,906
40
Middle Market Banking
1,927
2,010
1,949
1,996
1,785
(4)
8
$
7,740
$
5,443
42
Commercial Real Estate Banking
910
939
925
805
641
(3)
42
3,310
2,463
34
Other (e)
(254)
(326)
(350)
(65)
(112)
22
(127)
(853)
(410)
(108)
Total Banking & Payments revenue
$
8,403
$
8,038
$
7,993
$
8,188
$
7,678
5
9
$
31,897
$
26,821
19
(a)Included tax equivalent adjustments primarily from income tax credits from investments in alternative energy, affordable housing and new markets, income from tax-exempt securities and loans, as well as the related amortization and other tax benefits of the investments in alternative energy and affordable housing of $557 million, $1.3 billion, $746 million, $1.0 billion and $921 million for the three months ended March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023 and March 31, 2023, respectively, and $4.0 billion and $3.3 billion for the full year 2023 and 2022, respectively. Effective January 1, 2024, the Firm adopted updates to the Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method guidance, under the modified retrospective method. Refer to Notes 1, 5 and 13 of the Firm's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024, for further information.
(b)Consists primarily of centrally managed credit valuation adjustments ("CVA"), funding valuation adjustments ("FVA") on derivatives, other valuation adjustments, and certain components of fair value option elected liabilities, which are primarily reported in principal transactions revenue. Results are presented net of associated hedging activities and net of CVA and FVA amounts allocated to Fixed Income Markets and Equity Markets.
(c)Global Corporate Banking & Global Investment Banking provides banking products and services generally to large corporations, financial institutions and merchants.
(d)Commercial Banking provides banking products and services generally to middle market clients, including start-ups, small and midsized companies, local governments, municipalities, and nonprofits, as well as to commercial real estate clients.
(e)Other includes amounts related to credit protection purchased against certain retained loans and lending-related commitments in Lending, the impact of equity investments in Payments and balances not aligned with a primary client coverage segment.
Page 3
JPMORGAN CHASE & CO.
COMMERCIAL & INVESTMENT BANK
FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except ratio and employee data)
QUARTERLY TRENDS
FULL YEAR
1Q24 Change
2023 Change
1Q24
4Q23
3Q23
2Q23
1Q23
4Q23
1Q23
2023
2022
2022
SELECTED BALANCE SHEET DATA (period-end)
Total assets
$
1,898,251
$
1,638,493
$
1,746,598
$
1,737,334
$
1,697,418
16
%
12
%
$
1,638,493
$
1,591,402
3
%
Loans:
Loans retained
475,454
475,186
475,644
476,574
425,885
-
12
475,186
421,521
13
Loans held-for-sale and loans at fair value (a)
40,746
39,464
39,984
40,499
39,873
3
2
39,464
43,011
(8)
Total loans
516,200
514,650
515,628
517,073
465,758
-
11
514,650
464,532
11
Equity
132,000
138,000
138,000
138,000
136,500
(4)
(3)
138,000
128,000
8
Banking & Payments loans by client coverage segment (period-end) (b)
Global Corporate Banking & Global Investment Banking
$
129,179
$
128,097
$
130,133
$
133,535
$
132,646
1
(3)
$
128,097
$
128,165
-
Commercial Banking
223,474
221,550
222,368
222,782
181,911
1
23
221,550
180,624
23
Middle Market Banking
79,207
78,043
78,955
79,885
73,329
1
8
78,043
72,625
7
Commercial Real Estate Banking
144,267
143,507
143,413
142,897
108,582
1
33
143,507
107,999
33
Other
588
526
291
371
123
12
378
526
122
331
Total Banking & Payments loans
353,241
350,173
352,792
356,688
314,680
1
12
350,173
308,911
13
SELECTED BALANCE SHEET DATA (average)
Total assets
$
1,794,118
$
1,703,717
$
1,725,146
$
1,752,732
$
1,685,130
5
6
$
1,716,755
$
1,649,358
4
Trading assets - debt and equity instruments
580,899
490,268
522,843
533,092
488,796
18
19
508,792
405,948
25
Trading assets - derivative receivables
57,268
62,481
65,800
63,118
64,044
(8)
(11)
63,862
77,822
(18)
Loans:
Loans retained
471,187
473,879
475,285
459,244
422,380
(1)
12
457,886
395,015
16
Loans held-for-sale and loans at fair value (a)
43,537
40,415
40,605
38,858
43,724
8
-
40,891
48,196
(15)
Total loans
514,724
514,294
515,890
498,102
466,104
-
10
498,777
443,211
13
Deposits
1,045,788
1,032,226
988,765
998,014
965,529
1
8
996,295
1,033,880
(4)
Equity
132,000
138,000
138,000
137,505
136,500
(4)
(3)
137,507
128,000
7
Banking & Payments loans by client coverage segment (average) (b)
Global Corporate Banking & Global Investment Banking
$
127,403
$
130,287
$
132,394
$
131,852
$
130,375
(2)
(2)
$
131,230
$
122,174
7
Commercial Banking
222,323
222,057
221,729
211,431
181,173
-
23
209,244
173,289
21
Middle Market Banking
78,364
78,601
78,774
78,037
73,030
-
7
77,130
67,830
14
Commercial Real Estate Banking
143,959
143,456
142,955
133,394
108,143
-
33
132,114
105,459
25
Other
590
449
435
227
209
31
182
331
168
97
Total Banking & Payments loans
350,316
352,793
354,558
343,510
311,757
(1)
12
340,805
295,631
15
Employees
92,478
92,271
92,181
90,813
89,378
-
3
92,271
88,139
5
(a)Loans held-for-sale and loans at fair value primarily reflect lending-related positions originated and purchased in Markets, including loans held for securitization.
(b)Refer to page 3 for the definition of client coverage segments.
Page 4
JPMORGAN CHASE & CO.
COMMERCIAL & INVESTMENT BANK
FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except ratio data)
QUARTERLY TRENDS
FULL YEAR
1Q24 Change
2023 Change
1Q24
4Q23
3Q23
2Q23
1Q23
4Q23
1Q23
2023
2022
2022
CREDIT DATA AND QUALITY STATISTICS
Net charge-offs/(recoveries)
$
69
$
247
$
98
$
156
$
87
(72)
(21)
$
588
$
166
254
Nonperforming assets:
Nonaccrual loans:
Nonaccrual loans retained (a)
2,146
1,675
1,867
1,992
1,750
28
23
1,675
1,484
13
Nonaccrual loans held-for-sale and loans at fair value (b)
1,093
828
825
818
808
32
35
828
848
(2)
Total nonaccrual loans
3,239
2,503
2,692
2,810
2,558
29
27
2,503
2,332
7
Derivative receivables
293
364
293
286
291
(20)
1
364
296
23
Assets acquired in loan satisfactions
159
169
173
133
86
(6)
85
169
87
94
Total nonperforming assets
3,691
3,036
3,158
3,229
2,935
22
26
3,036
2,715
12
Allowance for credit losses:
Allowance for loan losses
7,291
7,326
7,135
7,260
6,020
-
21
7,326
5,616
30
Allowance for lending-related commitments
1,785
1,849
1,940
2,008
2,267
(3)
(21)
1,849
2,278
(19)
Total allowance for credit losses
9,076
9,175
9,075
9,268
8,287
(1)
10
9,175
7,894
16
Net charge-off/(recovery) rate (c)
0.06
%
0.21
%
0.08
%
0.14
%
0.08
%
0.13
%
0.04
%
Allowance for loan losses to period-end loans retained
1.53
1.54
1.50
1.52
1.41
1.54
1.33
Allowance for loan losses to nonaccrual loans retained (a)
340
437
382
364
344
437
378
Nonaccrual loans to total period-end loans
0.63
0.49
0.52
0.54
0.55
0.49
0.50
(a)Allowance for loan losses of $375 million, $251 million, $346 million, $350 million and $323 million were held against these nonaccrual loans at March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023 and March 31, 2023, respectively, and $251 million and $257 million at December 31, 2023 and 2022, respectively.
(b)At March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023 and March 31, 2023, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $50 million, $59 million, $65 million, $76 million and $99 million, respectively, and $59 million and $115 million at December 31, 2023 and 2022, respectively. These amounts have been excluded based upon the government guarantee.
(c)Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.
Page 5
JPMORGAN CHASE & CO.
COMMERCIAL & INVESTMENT BANK
FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except where otherwise noted)
QUARTERLY TRENDS
FULL YEAR
1Q24 Change
2023 Change
1Q24
4Q23
3Q23
2Q23
1Q23
4Q23
1Q23
2023
2022
2022
BUSINESS METRICS
Advisory
$
598
$
751
$
767
$
540
$
756
(20)
%
(21)
%
$
2,814
$
3,051
(8)
%
Equity underwriting
355
324
274
318
235
10
51
1,151
1,034
11
Debt underwriting
1,061
592
688
711
675
79
57
2,666
2,892
(8)
Total investment banking fees
$
2,014
$
1,667
$
1,729
$
1,569
$
1,666
21
21
$
6,631
$
6,977
(5)
Client deposits and other third-party liabilities (average) (a)
931,603
928,561
900,292
922,702
899,700
-
4
912,859
981,653
(7)
Assets under custody ("AUC") (period-end) (in billions)
$
33,985
$
32,392
$
29,725
$
30,424
$
29,725
5
14
$
32,392
$
28,635
13
95% Confidence Level - Total CIB VaR (average) (b)
CIB trading VaR by risk type: (c)
Fixed income
$
35
$
35
$
49
$
57
$
56
-
(38)
Foreign exchange
13
10
17
12
10
30
30
Equities
6
5
7
8
7
20
(14)
Commodities and other
7
8
10
12
15
(13)
(53)
Diversification benefit to CIB trading VaR (d)
(29)
(29)
(48)
(48)
(44)
-
34
CIB trading VaR (c)
32
29
35
41
44
10
(27)
Credit Portfolio VaR (e)
24
16
15
14
11
50
118
Diversification benefit to CIB VaR (d)
(15)
(13)
(12)
(11)
(10)
(15)
(50)
CIB VaR
$
41
$
32
$
38
$
44
$
45
28
(9)
(a)Client deposits and other third-party liabilities pertain to the Payments and Securities Services businesses.
(b)The impact of the business segment reorganization was not material to Total CIB VaR. Prior periods have not been revised.
(c)CIB trading VaR includes substantially all market-making and client-driven activities, as well as certain risk management activities in CIB, including credit spread sensitivity to CVA. Refer to VaR measurement on pages 137-139 of the Firm's 2023 Form 10-K for further information.
(d)Diversification benefit represents the difference between the portfolio VaR and the sum of its individual components. This reflects the non-additive nature of VaR due to imperfect correlation across CIB risks.
(e)Credit Portfolio VaR includes the derivative CVA, hedges of the CVA and credit protection purchased against certain retained loans and lending-related commitments, which are reported in principal transactions revenue. This VaR does not include the retained loan portfolio, which is not reported at fair value. In line with the Firm's internal model governance, the credit risk component of CVA related to certain counterparties was removed from Credit Portfolio VaR due to the widening of the credit spreads for those counterparties to elevated levels. The related hedges were also removed to maintain consistency. This exposure is now reflected in other sensitivity-based measures.
Page 6
JPMORGAN CHASE & CO.
NON-GAAP FINANCIAL MEASURES
Non-GAAP Financial Measures
(a)In addition to analyzing the Firm's results on a reported basis, management reviews Firmwide results, including the overhead ratio, on a "managed" basis; these Firmwide managed basis results are non-GAAP financial measures. The Firm also reviews the results of the lines of business on a managed basis. The Firm's definition of managed basis starts, in each case, with the reported U.S. GAAP results and includes certain reclassifications to present total net revenue for the Firm and each of the segments on a fully taxable-equivalent basis. Accordingly, revenue from investments that receive tax credits and tax-exempt securities is presented in the managed results on a basis comparable to taxable investments and securities. These financial measures allow management to assess the comparability of revenue from year-to-year arising from both taxable and tax-exempt sources. The corresponding income tax impact related to tax-exempt items is recorded within income tax expense. These adjustments have no impact on net income as reported by the Firm as a whole or by its lines of business.
In addition to reviewing net interest income ("NII"), net yield, and noninterest revenue ("NIR") on a managed basis, management also reviews these metrics excluding Markets, which is composed of Fixed Income Markets and Equity Markets, as shown below. Markets revenue consists of principal transactions, fees, commissions and other income, as well as net interest income. These metrics, which excludeMarkets, are non-GAAP financial measures. Management reviews these metrics to assess the performance of the Firm's lending, investing (including asset-liability management) and deposit-raising activities, apart from any volatility associated with Markets activities. In addition, management also assesses Markets business performance on a total revenue basis as offsets may occur across revenue lines. For example, securities that generate net interest income may be risk-managed by derivatives that are reflected at fair value in principal transactions revenue. Management believes these measures provide investors and analysts with alternative measures to analyze the revenue trends of the Firm. For additional information on Markets revenue, refer to page 75 of the Firm's 2023 Form 10-K.
QUARTERLY TRENDS
FULL YEAR
1Q24 Change
2023 Change
(in millions, except rates)
1Q24
4Q23
3Q23
2Q23
1Q23
4Q23
1Q23
2023
2022
2022
Net interest income - reported
$
23,082
$
24,051
$
22,726
$
21,779
$
20,711
(4)
%
11
%
$
89,267
$
66,710
34
%
Fully taxable-equivalent adjustments
121
126
130
104
120
(4)
1
480
434
11
Net interest income - managed basis (a)
$
23,203
$
24,177
$
22,856
$
21,883
$
20,831
(4)
11
$
89,747
$
67,144
34
Less: Markets net interest income
183
615
(317)
(487)
(105)
(70)
NM
(294)
4,789
NM
Net interest income excluding Markets (a)
$
23,020
$
23,562
$
23,173
$
22,370
$
20,936
(2)
10
$
90,041
$
62,355
44
Average interest-earning assets
$
3,445,515
$
3,408,395
$
3,331,728
$
3,343,780
$
3,216,757
1
7
$
3,325,708
$
3,349,079
(1)
Less: AverageMarkets interest-earning assets
1,031,075
985,997
970,789
1,003,877
982,572
5
5
985,777
953,195
3
Average interest-earning assets excluding Markets
$
2,414,440
$
2,422,398
$
2,360,939
$
2,339,903
$
2,234,185
-
8
$
2,339,931
$
2,395,884
(2)
Net yield on average interest-earning assets - managed basis
2.71
%
2.81
%
2.72
%
2.62
%
2.63
%
2.70
%
2.00
%
Net yield on averageMarkets interest-earning assets
0.07
0.25
(0.13)
(0.19)
(0.04)
(0.03)
0.50
Net yield on average interest-earning assets excluding Markets
3.83
3.86
3.89
3.83
3.80
3.85
2.60
Noninterest revenue - reported (b)
$
18,852
$
14,523
$
17,148
$
19,528
$
17,638
30
7
$
68,837
$
61,985
11
Fully taxable-equivalent adjustments (b)
493
1,243
682
990
867
(60)
(43)
3,782
3,148
20
Noninterest revenue - managed basis
$
19,345
$
15,766
$
17,830
$
20,518
$
18,505
23
5
$
72,619
$
65,133
11
Less: Markets noninterest revenue (c)
7,830
5,232
6,934
7,549
8,543
50
(8)
28,258
24,373
16
Noninterest revenue excluding Markets
$
11,515
$
10,534
$
10,896
$
12,969
$
9,962
9
16
$
44,361
$
40,760
9
Memo: Markets total net revenue
$
8,013
$
5,847
$
6,617
$
7,062
$
8,438
37
(5)
$
27,964
$
29,162
(4)
(a) Interest includes the effect of related hedges. Taxable-equivalent amounts are used where applicable.
(b) Effective January 1, 2024, the Firm adopted updates to the Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method guidance, under the modified retrospective method. Refer to Notes 1, 5 and 13 of the Firm's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024, for further information.
(c) Includes the markets-related revenues of the former Commercial Banking business segment.
Page 7
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JPMorgan Chase & Co. published this content on
15 May 2024 and is solely responsible for the information contained therein. Distributed by
Public, unedited and unaltered, on
15 May 2024 20:45:46 UTC.
JPMorgan Chase & Co. is one of the biggest banking groups in the world. Revenues (including intragroup) break down by activity as follows:
- investment and market banking (40.2%): consulting for mergers-acquisitions and restructuring, capital increases, investment capital, active on the stock, bond, and derived product markets, stock market brokerage, etc.;
- retail banking (38.9%): sale of standard and specialized financial services (real estate loans, automobile loans, insurance, etc.) through a network of more than 4,790 banking agencies. The group also develops credit cards sale activity;
- asset management (13.2%): USD 3,113 billion of assets under management at the end of 2021;
- commercial banking (7.7%).
At the end of 2021, the group was managing USD 2,462.3 billion in current deposits and USD 1,077.7 billion in current loans.
Income breaks down geographically as follows: the United States (76.2%), Europe/Middle East/Africa (13.6%), Asia/Pacific (7.9%), Latin America and Caribbean Islands (2.3%).