JPMORGAN CHASE & CO (JPM) FY 2023 MD&A

Management’s discussion and analysis

The following is Management’s discussion and analysis of the financial condition and results of operations (“MD&A”) of JPMorgan Chase for the year ended December 31, 2023. The MD&A is included in both JPMorgan Chase’s Annual Report for the year ended December 31, 2023 (“Annual Report”) and its Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K” or “Form 10-K”) filed with the Securities and Exchange Commission (“SEC”). Refer to the Glossary of terms and acronyms on pages 315-321 for definitions of terms and acronyms used throughout the Annual Report and the 2023 Form 10-K.

This Form 10-K 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-K and are subject to significant risks and uncertainties. Refer to Forward-looking Statements on page 161 and Part 1, Item 1A: Risk factors in this Form 10-K on pages 9-33 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.

INTRODUCTION

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 $327.9 billion in stockholders’ equity as of December 31, 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 is the Consumer & Community Banking (“CCB”) segment. The Firm’s wholesale businesses are the Corporate & Investment Bank (“CIB”), Commercial Banking (“CB”), and Asset & Wealth Management (“AWM”) segments. Refer to Business Segment Results on pages 65–85, and Note 32 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”). All references in this Form 10-K to “excluding First Republic,” “including First Republic,” “associated with First Republic” or “attributable to First Republic” refer to excluding or including the relevant effects of the First Republic acquisition, as well as subsequent related business and activities, as applicable. Refer to Note 34 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, including documents on the website that are referenced in this Form 10-K, is not incorporated by reference into this 2023 Form 10-K or the Firm’s other filings with the SEC.

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 the Firm’s 2023 Form 10-K. For a complete description of the trends and uncertainties, as well as the risks and critical accounting estimates affecting the Firm, the 2023 Form 10-K should be read in its entirety.

As of and for the year ended December 31, 2023, the results of the Firm include the impact of First Republic. Refer to page 67 and Note 34 for additional information.

(a)    The ratios reflect the CECL capital transition provisions. Refer to Note 27 for additional information.

(b)    Reflects the Firm’s ratios under the Basel III Standardized approach. Refer to Capital Risk Management on pages 91-101 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.

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

Firmwide overview

JPMorgan Chase reported net income of $49.6 billion for 2023, up 32%, earnings per share of $16.23, ROE of 17% and ROTCE of 21%.

•Total net revenue was $158.1 billion, up 23%, reflecting:

–Net interest income (“NII”) of $89.3 billion, up 34%, driven by higher rates, the impact of First Republic, and higher revolving balances in Card Services, partially offset by lower Markets net interest income and lower average deposit balances. NII excluding Markets was $90.0 billion, up 44%.

–Noninterest revenue (“NIR”) was $68.8 billion, up 11%, driven by the impact of First Republic, including the $2.8 billion estimated bargain purchase gain, higher Markets noninterest revenue, and higher asset management fees, partially offset by the absence of the gain on the sale of Visa B shares in the prior year, higher net securities losses in Treasury and CIO, and lower auto operating lease income.

•Noninterest expense was $87.2 billion, up 14%, predominantly driven by higher compensation expense, reflecting an increase in employees, primarily in technology and front office, as well as wage inflation. The increase in expense also includes the $2.9 billion FDIC special assessment and costs associated with the First Republic acquisition.

•The provision for credit losses was $9.3 billion, reflecting $6.2 billion of net charge-offs and a net addition to the allowance for credit losses of $3.1 billion. Net charge-offs increased $3.3 billion, predominantly driven by Card Services, and to a lesser extent single name exposures in wholesale. The net addition to the allowance for credit losses included:

–a net addition of $1.3 billion in consumer, predominantly driven by CCB, reflecting $1.4 billion in Card Services driven by loan growth, including an increase in revolving balances, partially offset by a net reduction of $200 million in Home Lending, and

–a net addition of $657 million in wholesale, driven by net downgrade activity and a deterioration in the outlook for commercial real estate in CB.

The net addition also included $1.2 billion to establish the allowance for First Republic loans and lending-related commitments in the second quarter of 2023.

The provision in the prior year included a $3.5 billion net addition to the allowance for credit losses and net charge-offs of $2.9 billion.

•The total allowance for credit losses was $24.8 billion at December 31, 2023. The Firm had an allowance for loan losses to retained loans coverage ratio of 1.75%, compared with 1.81% in the prior year.

•The Firm’s nonperforming assets totaled $7.6 billion at December 31, 2023, up 5%, predominantly driven by wholesale nonaccrual loans, which reflected the impact of downgrades. Refer to Wholesale Credit Portfolio and Consumer Credit Portfolio on pages 120–130 and pages 114–119, respectively, for additional information.

•Firmwide average loans of $1.2 trillion were up 13%, 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 into higher-yielding investments in AWM, the impact of higher customer spending in CCB, continued deposit attrition in CB, and a net decline in CIB, which included actions taken to reduce certain deposits,

partially offset by

–the increase in deposits associated with First Republic, and growth related to the Firm’s international consumer initiatives in Corporate.

Refer to Liquidity Risk Management on pages 102–109 for additional information.

Selected capital and other metrics

•CET1 capital was $251 billion, and the Standardized and Advanced CET1 ratios were both 15.0%.

•SLR was 6.1%.

•TBVPS grew 18%, ending 2023 at $86.08.

•As of December 31, 2023, the Firm had eligible end-of-period High Quality Liquid Assets (“HQLA”) of approximately $798 billion and unencumbered marketable securities with a fair value of approximately $649 billion, resulting in approximately $1.4 trillion of liquidity sources. Refer to Liquidity Risk Management on pages 102–109 for additional information.

Refer to Consolidated Results of Operations and Consolidated Balance Sheets Analysis on pages 54–57 and pages 58–60, respectively, for a further discussion of the Firm's results, including the provision for credit losses; and Business Segment Results on page 67 and Note 34 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 62–64 for a further discussion of each of these measures.

Business segment highlights

Selected business metrics for each of the Firm’s four lines of business (“LOB”) are presented below for the full year of 2023, and include the impact of First Republic, unless otherwise specified.

(a)    Excludes Commercial Card.

(b)    Users of all mobile platforms who have logged in within the past 90 days. As of December 31, 2023, excludes First Republic.

Refer to the Business Segment Results on pages 65–85 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 2023, consisting of:

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

Recent events

•On February 6, 2024, JPMorgan Chase announced that it plans to open more than 500 new branches, renovate approximately 1,700 locations and hire 3,500 employees over the next three years.

•On January 25, 2024, JPMorgan Chase announced new responsibilities for several key executives:

–Jennifer Piepszak, formerly the Co-Chief Executive Officer (“CEO”) of CCB, and Troy Rohrbaugh, formerly the Co-head of Markets and Securities Services, became Co-CEOs of the expanded Commercial & Investment Bank, which brings together the Firm’s major wholesale businesses consisting of Global Investment Banking, Commercial Banking and Corporate Banking, as well as Markets, Securities Services and Global Payments.

–Marianne Lake, the former Co-CEO of CCB, became the sole CEO of that business.

–James Dimon, Chairman and CEO, and Daniel Pinto, President and Chief Operating Officer, will continue to jointly manage the company, with Mr. Pinto focusing on the execution of the Firm’s LOB priorities.

As a result of these organizational changes, the Firm will be reorganizing its business segments to reflect the manner in which the segments will be managed. The reorganization of the business segments is expected to be effective in the second quarter of 2024.

•On January 16, 2024, JPMorgan Chase announced that Mark Weinberger, 62, had been elected to its Board of Directors, effective immediately. He will also serve as a member of the Board’s Audit Committee. Mr. Weinberger served as the Global Chairman and Chief Executive Officer of Ernst & Young from 2013 to 2019.

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-K, and are subject to significant risks and uncertainties. Refer to Forward-Looking Statements on page 161 and Part I, Item 1A, Risk Factors section on pages 9-33 of this 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 to be approximately $90 billion, market dependent.

•Management expects net interest income excluding Markets to be approximately $88 billion, market dependent.

•Management expects adjusted expense to be approximately $90 billion, market dependent.

•Management expects the net charge-off rate in Card Services to be less than 3.50%.

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 62–64.

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 December 31, 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-K. 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.

Refer to Note 34 and page 67 for additional information related to First Republic.

Interbank Offered Rate (“IBOR”) transition

The publication of the remaining principal tenors of U.S. dollar LIBOR (i.e., overnight, one-month, three-month, six-month and 12-month LIBOR) ceased on June 30, 2023 (“LIBOR Cessation”). The one-month, three-month and six-month tenors of U.S. dollar LIBOR will continue to be published on a "synthetic" basis, which will allow market participants to use such rates for certain legacy LIBOR-linked contracts through September 30, 2024.

As part of the Firm’s overall transition efforts which culminated in the second quarter of 2023, the Firm successfully completed the conversion of predominantly all of its remaining cleared derivatives contracts linked to U.S. dollar LIBOR to the Secured Overnight Financing Rate (“SOFR”) as part of initiatives by the principal central counterparties (“CCPs”) to convert cleared derivatives prior to LIBOR Cessation. Nearly all of the Firm’s other U.S. dollar LIBOR-linked products that remained outstanding at LIBOR Cessation have been remediated through contractual fallback provisions or through the framework provided by the Adjustable Interest Rate (LIBOR) Act (“LIBOR Act”). The Firm expects that the limited number of contracts remaining that reference “synthetic” U.S. dollar LIBOR will be remediated by September 30, 2024.

CONSOLIDATED RESULTS OF OPERATIONS
This section provides a comparative discussion of JPMorgan Chase’s Consolidated Results of Operations on a reported basis for the two-year period ended December 31, 2023, unless otherwise specified. Refer to Consolidated Results of Operations on pages 51-54 of the Firm’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”) for a discussion of the 2022 versus 2021 results. Factors that relate primarily to a single business segment are discussed in more detail within that business segment’s results. Refer to pages 155–158 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, $3.7 billion and $4.9 billion for the years ended December 31, 2023, 2022 and 2021, respectively. Also includes losses on tax-oriented investments. Refer to Note 6 for additional information.

(b)Included the estimated bargain purchase gain of $2.8 billion for the year ended December 31, 2023, in Corporate associated with the First Republic acquisition. Refer to Business Segment Results on page 67, and Notes 6 and 34 for additional information.

2023 compared with 2022

Investment banking fees decreased, reflecting in CIB:

•lower advisory fees due to a lower number of completed transactions, reflecting the lower level of announced deals in the current and the prior year amid a challenging environment, and

•lower debt underwriting fees as challenging market conditions, primarily in the first half of the year, resulted in lower issuance activity across leveraged loans, investment-grade loans and high-grade bonds. This was largely offset by higher issuance activity in high-yield bonds driven by higher industry-wide issuance,

partially offset by

•higher equity underwriting fees driven by a higher level of follow-on offerings due to lower equity market volatility and a higher level of convertible securities offerings, which benefited from higher rates, partially offset by lower activity in private placements amid a challenging environment.

Refer to CIB segment results on pages 72–77 and Note 6 for additional information.

Principal transactions revenue increased, reflecting in CIB:

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

•higher Fixed Income Markets principal transactions revenue in Securitized Products and Fixed Income

Financing, largely offset by lower revenue in Rates and Currencies & Emerging Markets;

–the net increase in Markets principal transactions revenue was more than offset by a decline in Markets net interest income, primarily due to higher funding costs; and

•losses of $280 million in Credit Adjustments & Other compared with $836 million in the prior year.

The prior year included net markdowns on held-for-sale positions, primarily unfunded commitments, in the bridge financing portfolio in CIB and CB.

The increase in principal transactions revenue also included the impact of higher short-term cash deployment activities in Treasury and CIO, reflective 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 72–77 and pages 84–85, respectively, and Note 6 for additional information.

Lending- and deposit-related fees increased, reflecting:

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

predominantly offset by

•lower deposit-related fees in CB and CIB driven by the higher level of client credits that reduce such fees.

Refer to CIB, CB and AWM segment results on pages 72–77, pages 78–80 and pages 81–83, respectively, and Note 6 for additional information.

Asset management fees increased driven by strong net inflows and the removal of most money market fund fee waivers in the prior year in AWM, and in CCB the impact of First Republic, as well as higher average market levels and strong net inflows. Refer to CCB and AWM segment results on pages 68–71 and pages 81–83, respectively, and Note 6 for additional information.

Commissions and other fees increased due to higher commissions on annuity sales and travel-related services in CCB. Refer to CCB segment results on pages 68–71 and Note 6 for additional information.

Investment securities losses reflected higher net losses on higher sales of U.S. Treasuries and U.S. GSE and government agency MBS, associated with repositioning the investment securities portfolio in both periods in Treasury and CIO. Refer to Corporate segment results on pages 84–85 and Note 10 for additional information.

Mortgage fees and related income: refer to CCB segment results on pages 68–71, Note 6 and 15 for further information.

Card income increased in CIB and CB, reflecting growth in merchant processing volume and Commercial Card transactions in J.P. Morgan Payments; and in CCB, driven by higher net interchange income on increased debit and credit card sales volume. Refer to Business Segment Results, CCB, CIB and CB segment results on pages 65–85, pages 68–71, pages 72–77 and pages 78–80, respectively, and Note 6 for further information.

Other income increased, reflecting:

•the $2.8 billion estimated bargain purchase gain in Corporate associated with the First Republic acquisition,

•the impact of net investment hedges in Treasury and CIO, and

•a gain of $339 million recognized in the first quarter of 2023 in AWM on the original minority interest in China International Fund Management (“CIFM”) upon the Firm's acquisition of the remaining 51% interest in the entity,

partially offset by

•lower auto operating lease income in CCB due to a decline in volume,

•lower net gains related to certain other Corporate investments, and

•the net impact of equity investments in CIB, including impairment losses in the second half of 2023,

The prior year included:

•a gain of $914 million on the sale of Visa B shares and proceeds from an insurance settlement in Corporate, and

•a gain on an equity-method investment received in partial satisfaction of a loan in CB.

Refer to Business Segment Results on page 67 and Note 34 for additional information on the First Republic acquisition; Note 5 for additional information on net investment hedges; and Note 6 for further information.

Net interest income increased driven by higher rates, the impact of First Republic, and higher revolving balances in Card Services, partially offset by lower Markets net interest income and lower average deposit balances.

The Firm’s average interest-earning assets were $3.3 trillion, down $23 billion, and the yield was 5.14%, up 236 basis points (“bps”). The net yield on these assets, on an FTE basis, was 2.70%, an increase of 70 bps. The net yield excluding Markets was 3.85%, up 125 bps.

Refer to the Consolidated average balance sheets, interest and rates schedule on pages 310-314 for further 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 62–64 for a further discussion of Net yield excluding Markets.

2023 compared with 2022

The provision for credit losses was $9.3 billion, reflecting $6.2 billion of net charge-offs and a net addition of $3.1 billion to the allowance for credit losses.

Net charge-offs increased $3.3 billion, consisting of $2.6 billion in consumer, predominantly driven by Card Services, as the portfolio continued to normalize to pre-pandemic levels, and $698 million in wholesale.

The net addition to the allowance for credit losses included $1.9 billion, consisting of:

•$1.3 billion in consumer, predominantly driven by CCB, reflecting a $1.4 billion net addition in Card Services, partially offset by a net reduction of $200 million in Home Lending. The net addition in Card Services was driven by loan growth, including an increase in revolving balances, partially offset by reduced borrower uncertainty. The net reduction in Home Lending was driven by improvements in the outlook for home prices; and

•$657 million in wholesale, driven by net downgrade activity and the net effect of changes in the Firm's weighted average macroeconomic outlook, including a deterioration in the outlook for commercial real estate in CB, partially offset by the impact of changes in the loan and lending-related commitment portfolios.

The net addition also included $1.2 billion to establish the allowance for the First Republic loans and lending-related commitments in the second quarter of 2023.

The provision in the prior year included a $3.5 billion net addition to the allowance for credit losses, consisting of $2.3 billion in wholesale and $1.2 billion in consumer, driven by loan growth and deterioration in the Firm’s macroeconomic outlook, partially offset by a reduction in the allowance related to a decrease in uncertainty associated with borrower behavior as the effects of the pandemic gradually receded, and net charge-offs of $2.9 billion.

Refer to the segment discussions of CCB on pages 68–71, CIB on pages 72–77, CB on pages 78–80, AWM on pages 81–83, the Allowance for Credit Losses on pages 131–133, and Notes 1, 10 and 13 for further discussion of the credit portfolio and the allowance for credit losses.

(a)Includes depreciation expense associated with auto operating lease assets.

(b)Included Firmwide legal expense of $1.4 billion, $266 million and $426 million, as well as FDIC-related expense of $4.2 billion, $860 million and $730 million for the years ended December 31, 2023, 2022 and 2021, respectively. Refer to Note 6 for additional information.

(c)Reflected the impact of First Republic of $1.5 billion, which included expenses recorded in the second quarter of 2023 with respect to individuals associated with First Republic who did not become employees of the Firm until July 2, 2023. Refer to Business Segment Results on page 67 for additional information.

2023 compared with 2022

Compensation expense increased driven by:

•an increase in employees, primarily in technology and front office, as well as wage inflation,

•the impact of First Republic in the second half of 2023, predominantly in CCB and Corporate, and

•higher volume- and revenue-related compensation predominantly in AWM and CCB.

Noncompensation expense increased as a result of:

•higher FDIC-related expense, which included the $2.9 billion special assessment recognized in Corporate,

•the impact of First Republic in Corporate and CCB,

•higher legal expense in CIB, Corporate and CCB,

•higher investments in the business, including marketing and technology, and

•higher other expenses, including higher indirect tax expense in CIB, and higher travel and entertainment expense across the segments,

partially offset by

•lower depreciation expense on lower auto lease assets.

Refer to Business Segment Results on page 67 and Note 34 for additional information on the First Republic acquisition; Note 6 for further information;

2023 compared with 2022

The effective tax rate increased predominantly driven by:

•the higher level of pre-tax income and changes in the mix of income and expenses subject to U.S. federal, state and local taxes,

•lower benefits associated with tax audit settlements, and

• vesting of employee stock based awards,

largely offset by

•the impact of the income tax expense associated with the First Republic acquisition that was reflected in the estimated bargain purchase gain, which resulted in a reduction in the Firm’s effective tax rate, and

•an income tax benefit related to the finalization of certain income tax regulations.

Refer to Note 25 for further information.

CONSOLIDATED BALANCE SHEETS AND CASH FLOWS ANALYSIS

Consolidated balance sheets analysis

The following is a discussion of the significant changes between December 31, 2023 and 2022. Refer to pages 155–158 for a discussion of the Critical Accounting Estimates Used by the Firm that affect the Consolidated Balance Sheets.

Cash and due from banks and deposits with banks increased reflecting the higher level of excess cash placed with the Federal Reserve Banks. The Firm’s excess cash primarily resulted from:

•the net issuance of long-term debt, and

•the impact of maturities and paydowns of investment securities in Treasury and CIO,

partially offset by

•the impacts associated with the First Republic acquisition in the first half of 2023.

Federal funds sold and securities purchased under resale agreements decreased, reflecting a reduction in client-driven market-making activities, partially offset by higher cash deployment in Treasury and CIO.

Securities borrowed increased driven by Markets, reflecting a higher demand for securities to cover short positions and client-driven activities.

Refer to Note 11 for additional information on securities purchased under resale agreements and securities borrowed.

Trading assets increased, reflecting in Markets higher debt and equity instruments on client-driven market-making activities, partially offset by lower derivative receivables, primarily as a result of market movements. Refer to Notes 2 and 5 for additional information.

Investment securities decreased due to:

•lower available-for-sale ("AFS") securities driven by maturities and paydowns, predominantly offset by the impact of First Republic, net purchases, and the transfer of securities from held-to-maturity (“HTM”) in the first

quarter of 2023, and

•lower HTM securities driven by maturities and paydowns, and the transfer of securities to AFS.

Refer to Corporate segment results on pages 84–85, Investment Portfolio Risk Management on page 134 and Notes 2 and 10 for additional information on investment securities.

Loans increased, reflecting:

•$146 billion of loans associated with First Republic,

•growth in new accounts in Card Services, as well as higher revolving balances, which continued to normalize to pre-pandemic levels, and

•growth in Auto loans due to net originations.

The allowance for loan losses increased, reflecting:

•a net addition to the allowance for loan losses of $2.2 billion, consisting of:

–$1.3 billion in consumer, predominantly driven by CCB, reflecting $1.4 billion in Card Services driven by loan growth, including an increase in revolving balances, partially offset by a net reduction of $176 million in Home Lending, and

–$930 million in wholesale, driven by net downgrade activity and the net effect of changes in the Firm's weighted average macroeconomic outlook, and

•$1.1 billion to establish the allowance for the First Republic loans in the second quarter of 2023.

The allowance for loan losses also reflected a reduction of $587 million, on January 1, 2023, as a result of the adoption of the Financial Instruments - Credit Losses: Troubled Debt Restructurings accounting guidance.

References in this Form 10-K to "changes to the TDR accounting guidance" pertain to the Firm's adoption of this guidance.

There was also a $408 million net reduction in the allowance for lending-related commitments recognized in other liabilities on the Consolidated balance sheets.

Refer to Consolidated Results of Operations and Credit and Investment Risk Management on pages 54–57 and pages 111–134, respectively, and Notes 2, 3, 12 and 13 for additional information on loans and the total allowance for credit losses; and Business Segment Results on page 67 and Note 34 for additional information on the First Republic acquisition.

Accrued interest and accounts receivable decreased due to lower client receivables related to client-driven activities in Markets.

Premises and equipment increased as a result of the construction-in-process associated with the Firm's headquarters, the First Republic acquisition, largely lease right-of-use assets, and higher capitalized software. Refer to Note 16 and 18 for additional information.

Goodwill, MSRs and other intangibles increased predominantly due to:

•other intangibles and goodwill related to the acquisition of the remaining 51% interest in CIFM,

•core deposit intangibles associated with the First Republic acquisition, and

•higher MSRs as a result of net additions primarily from purchases, and the impact of higher interest rates, partially offset by the realization of expected cash flows.

Refer to Note 15 and 34 for additional information.

Other assets decreased reflecting the impact of the change in the type of collateral placed with CCPs from cash to securities.

Deposits increased, reflecting the net impact of:

•higher balances in CIB due to net issuances of structured notes as a result of client demand, as well as deposit inflows from client-driven activities in Payments and Securities Services, partially offset by deposit attrition, including actions taken to reduce certain deposits,

•growth in Corporate related to the Firm's international consumer initiatives,

•lower balances in CCB reflecting higher customer spending,

•a decline in AWM due to continued migration into higher-yielding investments driven by the higher interest rate environment, predominantly offset by growth from new and existing customers as a result of new product offerings, and

•a decrease in CB due to continued deposit attrition as clients seek higher-yielding investments, predominantly offset by the retention of inflows associated with disruptions in the market in the first quarter of 2023.

The net increase also included $61 billion of deposits associated with First Republic, primarily reflected in CCB, AWM and CB.

Federal funds purchased and securities loaned or sold under repurchase agreements increased, reflecting the impact of a lower level of netting on reduced repurchase activity.

Refer to Liquidity Risk Management on pages 102–109 for additional information on deposits, federal funds purchased and securities loaned or sold under repurchase agreements, and short-term borrowings; Notes 2 and 17 for deposits and Note 11 for federal funds purchased and securities loaned or sold under repurchase agreements; Business Segment Results on page 67 and Note 34 for additional information on the First Republic acquisition.

Trading liabilities increased due to client-driven market-making activities in Fixed Income Markets, which resulted in higher levels of short positions in debt instruments, partially offset by lower derivative payables primarily as a result of market movements. Refer to Notes 2 and 5 for additional information.

Accounts payable and other liabilities decreased primarily due to lower client payables related to client-driven activities in Markets, partially offset by higher accounts payable and accrued liabilities, including the $2.9 billion payable related to the FDIC special assessment. Refer to Note 19 for additional information.

Beneficial interests issued by consolidated VIEs increased in CIB primarily driven by higher levels of Firm-administered multi-seller conduit commercial paper held by third parties, reflecting changes in the Firm’s short-term liquidity management. Refer to Liquidity Risk Management on pages 102–109; and Notes 14 and 28 for additional information on Firm-sponsored VIEs and loan securitization trusts.

Long-term debt increased, reflecting the impact of First Republic, which included the Purchase Money Note issued to the FDIC and additional FHLB advances, as well as net issuance consistent with the Firm’s long-term funding plans. The increase was also attributable to net issuances of structured notes in Markets due to client demand and an increase in fair value. Refer to Liquidity Risk Management on pages 102–109 and Note 34 for additional information on the First Republic acquisition.

Stockholders’ equity: refer to Consolidated Statements of changes in stockholders’ equity on page 169, Capital Actions on page 99, and Note 24 for additional information.

Consolidated cash flows analysis

The following is a discussion of cash flow activities during the years ended December 31, 2023 and 2022. Refer to Consolidated cash flows analysis on page 57 of the Firm’s 2022 Form 10-K for a discussion of the 2021 activities.

Operating activities

JPMorgan Chase’s operating assets and liabilities primarily support the Firm’s lending and capital markets activities. These assets and liabilities can vary significantly in the normal course of business due to the amount and timing of cash flows, which are affected by client-driven and risk management activities and market conditions. The Firm believes that cash flows from operations, available cash and other liquidity sources, and its capacity to generate cash through secured and unsecured sources, are sufficient to meet its operating liquidity needs.

•In 2023, cash provided primarily reflected net income, lower other assets, and accrued interest and accounts receivable, predominantly offset by higher trading assets, lower accounts payable and other liabilities, and higher securities borrowed.

•In 2022, cash provided resulted from higher accounts payable and other liabilities, lower securities borrowed, and net proceeds from sales, securitizations, and paydowns of loans held-for-sale, partially offset by higher trading assets.

Investing activities

The Firm’s investing activities predominantly include originating held-for-investment loans, investing in the investment securities portfolio and other short-term instruments.

•In 2023, cash provided resulted from net proceeds from investment securities, proceeds from sales and securitizations of loans held-for-investment and lower securities purchased under resale agreements, largely offset by net originations of loans and net cash used in the First Republic Bank acquisition.

•In 2022, cash used resulted from net originations of loans and higher securities purchased under resale agreements, partially offset by net proceeds from investment securities.

Financing activities

The Firm’s financing activities include acquiring customer deposits and issuing long-term debt and preferred stock.

•In 2023, cash used reflected lower deposits, which included the impact of the repayment of the deposits provided to First Republic Bank by the consortium of large U.S. banks that the Firm assumed as part of the First Republic acquisition, partially offset by higher securities loaned under repurchase agreements and net proceeds from long- and short-term borrowings.

•In 2022, cash used reflected lower deposits, partially offset by net proceeds from long- and short-term borrowings.

•For both periods, cash was used for repurchases of common stock and cash dividends on common and preferred stock.

* * *

Refer to Consolidated Balance Sheets Analysis on pages 58–60, Capital Risk Management on pages 91-101, and Liquidity Risk Management on pages 102–109, and the Consolidated Statements of Cash Flows on page 170 for a further discussion of the activities affecting the Firm’s cash flows.

EXPLANATION AND RECONCILIATION OF THE FIRM’S USE OF NON-GAAP FINANCIAL MEASURES

Non-GAAP financial measures

The Firm prepares its Consolidated Financial Statements in accordance with U.S. GAAP; these financial statements appear on pages 166–170. That presentation, which is referred to as “reported” basis, provides the reader with an understanding of the Firm’s results that can be tracked consistently from year-to-year and enables a comparison of the Firm’s performance with the U.S. GAAP financial statements of other companies.

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 LOBs 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 reportable business segments) on an FTE 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 the LOBs.

Management also uses certain non-GAAP financial measures at the Firm and business-segment level because these other non-GAAP financial measures provide information to investors about the underlying operational performance and trends of the Firm or of the particular business segment, as the case may be, and therefore facilitate a comparison of the Firm or the business segment with the performance of its relevant competitors. Refer to Business Segment Results on pages 65–85 for additional information on these non-GAAP measures. Non-GAAP financial measures used by the Firm may not be comparable to similarly named non-GAAP financial measures used by other companies.

The following summary table provides a reconciliation from the Firm’s reported U.S. GAAP results to managed basis.

(a)Predominantly recognized in CIB, CB and Corporate.

Net interest income, net yield, and noninterest revenue excluding Markets

In addition to reviewing net interest income, net yield, and noninterest revenue on a managed basis, management also reviews these metrics excluding Markets, as shown below. Markets consists of CIB’s Fixed Income Markets and Equity Markets. These metrics, which exclude Markets, 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. Management believes that these measures provide investors and analysts with alternative measures to analyze the revenue trends of the Firm.

(a)Interest includes the effect of related hedges. Taxable-equivalent amounts are used where applicable.

(b)Refer to pages 75-76 for further information on Markets.

In addition, the Firm reviews other non-GAAP measures such as:

•Adjusted expense, which represents noninterest expense excluding Firmwide legal expense, and

•Pre-provision profit, which represents total net revenue less total noninterest expense.

Management believes that these measures help investors understand the effect of these items on reported results and provide an alternative presentation of the Firm’s performance.

The Firm also reviews the allowance for loan losses to period-end loans retained excluding trade finance and conduits, a non-GAAP financial measure, to provide a more meaningful assessment of CIB’s allowance coverage ratio.

TCE, ROTCE and TBVPS

TCE, ROTCE and TBVPS are each non-GAAP financial measures. TCE represents the Firm’s common stockholders’ equity (i.e., total stockholders’ equity less preferred stock) less goodwill and identifiable intangible assets (other than MSRs), net of related deferred tax liabilities. ROTCE measures the Firm’s net income applicable to common equity as a percentage of average TCE. TBVPS represents the Firm’s TCE at period-end divided by common shares at period-end. TCE, ROTCE and TBVPS are utilized by the Firm, as well as investors and analysts, in assessing the Firm’s use of equity.

The following summary table provides a reconciliation from the Firm’s common stockholders’ equity to TCE.

(a)Represents deferred tax liabilities related to tax-deductible goodwill and to identifiable intangibles created in nontaxable transactions, which are netted against goodwill and other intangibles when calculating TCE.

BUSINESS SEGMENT RESULTS

The Firm is managed on an LOB basis. There are four major reportable business segments – Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking and Asset & Wealth Management. In addition, there is a Corporate segment.

The business segments are determined based on the products and services provided, or the type of customer served, and they reflect the manner in which financial information is evaluated by the Firm’s Operating Committee. Segment results are presented on a managed basis. Refer to Explanation and Reconciliation of the Firm’s use of Non-GAAP Financial Measures, on pages 62–64 for a definition of managed basis.

(a)As a result of the organizational changes that were announced on January 25, 2024, the Firm will be reorganizing its business segments to reflect the manner in which the segments will be managed. The reorganization of the business segments is expected to be effective in the second quarter of 2024. Refer to Recent events on page 52 for additional information.

Description of business segment reporting methodology

Results of the business segments are intended to present each segment as if it were a stand-alone business. The management reporting process that derives business segment results includes the allocation of certain income and expense items. The Firm periodically assesses the assumptions, methodologies and reporting classifications used for segment reporting, and therefore further refinements may be implemented in future periods. The Firm also assesses the level of capital required for each LOB on at least an annual basis. The Firm’s LOBs also provide various business metrics which are utilized by the Firm and its investors and analysts in assessing performance.

Revenue sharing

When business segments join efforts to sell products and services to the Firm’s clients and customers, the participating business segments may agree to share revenue from those transactions. Revenue is generally recognized in the segment responsible for the related product or service, with allocations to the other segment(s) involved in the transaction. The segment results reflect these revenue-sharing agreements.

Expense allocation

Where business segments use services provided by corporate support units, or another business segment, the costs of those services are allocated to the respective business segments. The expense is generally

allocated based on the actual cost and use of services provided. In contrast, certain costs and investments related to corporate support units, technology and operations that are not currently utilized by any LOB are not allocated to the business segments and are retained in Corporate. Expense retained in Corporate generally includes costs that would not be incurred if the segments were stand-alone businesses, and other items not solely aligned with a particular business segment.

Funds transfer pricing

Funds transfer pricing (“FTP”) is the process by which the Firm allocates interest income and expense to the LOBs and Other Corporate and transfers the primary interest rate risk and liquidity risk to Treasury and CIO.

The funds transfer pricing process considers the interest rate and liquidity risk characteristics of assets and liabilities and off-balance sheet products. Periodically, the methodology and assumptions utilized in the FTP process are adjusted to reflect economic conditions and other factors, which may impact the allocation of net interest income to the segments.

As a result of the higher interest rate environment, the cost of funds for assets and the credits earned for liabilities have generally increased, impacting the business segments’ net interest income. During the period ended December 31, 2023, this has resulted in higher cost of funds for loans and

Markets activities, and contributed to margin expansion on deposits.

Foreign exchange risk

Foreign exchange risk is transferred from the LOBs and Other Corporate to Treasury and CIO for certain revenues and expenses. Treasury and CIO manages these risks centrally and reports the impact of foreign exchange rate movements related to the transferred risk in its results. Refer to Market Risk Management on page 143 for additional information.

Debt expense and preferred stock dividend allocation

As part of the funds transfer pricing process, almost all of the cost of the credit spread component of outstanding unsecured long-term debt and preferred stock dividends is allocated to the reportable business segments, while the balance of the cost is retained in Corporate. The methodology to allocate the cost of unsecured long-term debt and preferred stock dividends to the business segments is aligned with the relevant regulatory capital requirements and funding needs of the LOBs, as applicable.

The allocated cost of unsecured long-term debt is included in a business segment’s net interest income, and net income is reduced by preferred stock dividends, to arrive at a business segment’s net income applicable to common equity.

Refer to Capital Risk Management on pages 91-101 for additional information.

Capital allocation

The amount of capital assigned to each business segment is referred to as equity. The Firm’s current allocation methodology incorporates Basel III Standardized risk-weighted assets (“RWA”) and the global systemically important banks (“GSIB”) surcharge, both under rules currently in effect, as well as a simulation of capital in a severe stress environment. At least annually, the assumptions, judgments and methodologies used to allocate capital are reassessed and, as a result, the capital allocated to the LOBs may change.

Refer to Line of business equity on page 98 for additional information on capital allocation.

Segment Results – Managed Basis

The following tables summarize the Firm’s results by segment for the periods indicated.

(a)In the first quarter of 2023, the allocations of revenue and expense to CCB associated with a Merchant Services revenue sharing agreement were discontinued and are now retained in Payments in CIB. Prior-period amounts have been revised to conform with the current presentation.

Selected Firmwide Metrics

The following tables present key metrics for Wealth Management, which consists of the Global Private Bank in AWM and J.P. Morgan Wealth Management in CCB; and total revenue and key metrics for J.P. Morgan Payments, which consists of payments activities in CIB and CB. This presentation is intended to provide investors with additional information concerning Wealth Management and J.P. Morgan Payments, each of which consists of similar business activities conducted across LOBs to serve different types of clients and customers.

Selected metrics - Wealth Management

(a) Consists of Global Private Bank in AWM and client investment assets in J.P. Morgan Wealth Management in CCB.

(b)At December 31, 2023, included $144.6 billion of client investment assets associated with First Republic.

Selected metrics - J.P. Morgan Payments

(a)Includes certain revenues that are reported as investment banking product revenue in CB, and excludes the net impact of equity investments.

Segment information related to First Republic

The following table presents selected impacts to CCB, CB, AWM and Corporate associated with First Republic from the acquisition date of May 1, 2023.

(a)In the fourth quarter of 2023, CCB transferred certain deposits associated with First Republic to AWM, CB and CIB.

(b)Included the preliminary estimated bargain purchase gain of $2.7 billion recorded in other income. For the year ended December 31, 2023, reflects measurement period adjustments of $63 million, resulting in an estimated bargain purchase gain of $2.8 billion for the year ended December 31, 2023. Refer to Note 34 for additional information.

(c)Included $360 million of restructuring and integration costs.

(d)Excluded $1.9 billion of loans and $508 million of deposits allocated to CIB.

The following sections provide a comparative discussion of the Firm’s results by segment as of or for the years ended December 31, 2023 and 2022, unless otherwise specified.

CONSUMER & COMMUNITY BANKING

Consumer & Community Banking offers products and services to consumers and small businesses through bank branches, ATMs, digital (including mobile and online) and telephone banking. CCB is organized into Banking & Wealth Management (including Consumer Banking, J.P. Morgan Wealth Management and Business Banking), Home Lending (including Home Lending Production, Home Lending Servicing and Real Estate Portfolios) and Card Services & Auto. Banking & Wealth Management offers deposit, investment and lending products, cash management, payments and services. Home Lending includes mortgage origination and servicing activities, as well as portfolios consisting of residential mortgages and home equity loans. Card Services issues credit cards and offers travel services. Auto originates and services auto loans and leases.

(a)Primarily includes operating lease income and commissions and other fees. Operating lease income was $2.8 billion, $3.6 billion and $4.8 billion for the years ended December 31, 2023, 2022 and 2021, respectively.

(b)Included depreciation expense on leased assets of $1.7 billion, $2.4 billion and $3.3 billion for the years ended December 31, 2023, 2022 and 2021, respectively.

(c)Included MSR risk management results of $131 million, $93 million and $(525) million for the years ended December 31, 2023, 2022 and 2021, respectively.

(d)Includes First Republic. Refer to page 67 for additional information.

(e)Banking & Wealth Management and Home Lending included revenue associated with First Republic of $2.3 billion and $932 million, respectively, for the year ended December 31, 2023.

(f)In the first quarter of 2023, the allocations of revenue and expense to CCB associated with a Merchant Services revenue sharing agreement were discontinued and are now retained in Payments in CIB. Prior-period amounts have been revised to conform with the current presentation.

2023 compared with 2022

Net income was $21.2 billion, up 42%.

Net revenue was $70.1 billion, up 28%.

Net interest income was $55.0 billion, up 38%, driven by:

•deposit margin expansion on higher rates, partially offset by lower average deposits and the impact of lower PPP loan forgiveness in Banking & Wealth Management (“BWM”),

•higher Card Services NII, reflecting an increase in revolving balances, and

•the impact of First Republic in Home Lending.

Noninterest revenue was $15.1 billion, up 2%, driven by:

•higher asset management fees due to the impact of First Republic as well as higher market levels and strong net inflows, higher commissions on annuity sales in BWM and higher other service fees associated with First Republic,

•higher net interchange income on increased debit and credit card sales volume, and

–In Card Services, higher annual fees and the higher net interchange income were more than offset by an increase in amortization related to new account origination costs, reflecting continued growth. Net interchange income in Card Services also reflected the impact of a reduction in rewards costs and partner payments in the first quarter of 2023 related to a periodic tax refund on airline miles redeemed and an increase to the rewards liability due to adjustments to certain reward program terms in the second quarter of 2023;

•higher travel-related commissions in Card Services,

predominantly offset by

•lower auto operating lease income as a result of a decline in volume, and

•lower mortgage fees and related income in Home Lending.

Refer to Note 6 for additional information on card income,

asset management fees, and commissions and other fees; and Critical Accounting Estimates on pages 155–158 for credit card rewards liability.

Refer to Note 15 for further information regarding changes in the value of the MSR asset and related hedges, and mortgage fees and related income.

Refer to Note 34 for additional information on the First Republic acquisition.

Noninterest expense was $34.8 billion, up 12%, reflecting:

•higher compensation expense, driven by an increase in employees, including the impact of First Republic in the second half of 2023 and additions primarily in bankers, advisors and technology, wage inflation and higher revenue-related compensation, as well as

•higher noncompensation expense, driven by the impact of First Republic, investments in marketing and technology, the increase in the FDIC assessment announced in the prior year as well as higher legal expense, partially offset by lower auto lease depreciation on lower auto lease assets.

The provision for credit losses was $6.9 billion, reflecting:

•net charge-offs of $5.3 billion, up $2.6 billion, predominantly driven by Card Services, as the portfolio continued to normalize to pre-pandemic levels,

•a $1.2 billion net addition to the allowance for credit losses, which included $1.4 billion in Card Services, partially offset by a net reduction of $200 million in Home Lending. The net addition in Card Services was driven by loan growth, including an increase in revolving balances, partially offset by reduced borrower uncertainty. The net reduction in Home Lending was driven by improvements in the outlook for home prices; and

•$408 million to establish the allowance for the First Republic loans and lending-related commitments in the second quarter of 2023.

The provision in the prior year was $3.8 billion, driven by net charge-offs of $2.7 billion and a $1.1 billion net addition to the allowance for credit losses across CCB.

Refer to Credit and Investment Risk Management on pages 111–134 and Allowance for Credit Losses on pages 131–133 for a further discussion of the credit portfolios and the allowance for credit losses.

(a)At December 31, 2023, 2022 and 2021, included $94 million, $350 million and $5.4 billion of loans, respectively, in Business Banking under the PPP.

(b)At December 31, 2023, 2022 and 2021, Home Lending loans held-for-sale and loans at fair value were $3.4 billion, $3.0 billion and $14.9 billion, respectively.

(c)Average Home Lending loans held-for sale and loans at fair value were $4.8 billion, $7.3 billion and $15.4 billion for the years ended December 31, 2023, 2022 and 2021, respectively.

(d)At December 31, 2023, included $4.0 billion and $90.7 billion for Banking & Wealth Management and Home Lending, respectively, associated with First Republic.

(e)Includes First Republic. In the fourth quarter of 2023, CCB transferred certain deposits associated with First Republic to AWM, CB, and CIB. Refer to page 67 for additional information.

(f)Average Banking & Wealth Management and Home Lending loans associated with First Republic were $2.4 billion and $60.2 billion, respectively, for the year ended December 31, 2023.

(g)Included $39.4 billion associated with First Republic for the year ended December 31, 2023.

(a)At December 31, 2023, 2022 and 2021, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $123 million, $187 million and $342 million, respectively. These amounts have been excluded based upon the government guarantee. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance.

(b)At December 31, 2023, 2022 and 2021, generally excludes loans that were under payment deferral programs offered in response to the COVID-19 pandemic.

(c)At December 31, 2023, 2022 and 2021, included $94 million, $350 million and $5.4 billion of loans, respectively, in Business Banking under the PPP. The Firm does not expect to realize material credit losses on PPP loans because the loans are guaranteed by the SBA.

(d)At December 31, 2023, 2022 and 2021, the principal balance of loans under payment deferral programs offered in response to the COVID-19 pandemic was $29 million, $449 million and $1.1 billion in Home Lending, respectively. Loans that are performing according to their modified terms are generally not considered delinquent.

(e)At December 31, 2023, 2022 and 2021, excluded mortgage loans insured by U.S. government agencies of $176 million, $258 million and $405 million, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee.

(f)Includes First Republic.

(g)On January 1, 2023, the Firm adopted changes to the TDR accounting guidance. The adoption of this guidance resulted in a net decrease in the allowance for loan losses of $591 million, driven by residential real estate and credit card. Refer to Note 1 for further information.

(a)The Consumer and Small business customers metrics include unique individuals, and businesses and legal entities, respectively, that have financial ownership or decision-making power with respect to accounts; these metrics exclude customers under the age of 18. Where a customer uses the same unique identifier as both a Consumer and a Small business, the customer is included in both metrics. For information concerning the Households metric previously disclosed, refer to the Glossary of terms and acronyms on pages 315-321.

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

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

(d)Total payments transaction volume includes debit and credit card sales volume and gross outflows of ACH, ATM, teller, wires, BillPay, PayChase, Zelle, person-to-person and checks.

(e)Includes assets invested in managed accounts and J.P. Morgan mutual funds where AWM is the investment manager. Refer to AWM segment results on pages 81–83 for additional information. At December 31, 2023, included $144.6 billion of client investment assets associated with First Republic.

(f)Firmwide mortgage origination volume was $41.4 billion, $81.8 billion and $182.4 billion for the years ended December 31, 2023, 2022 and 2021, respectively.

(g)Excludes First Republic.

(h)Included $39.4 billion for the year ended December 31, 2023, associated with First Republic.

(i)Included $2.3 billion for the year ended December 31, 2023, associated with First Republic.

(j)Included origination volume under the PPP of $10.6 billion for the year ended December 31, 2021. The program ended on May 31, 2021 for new applications.

CORPORATE & INVESTMENT BANK

The Corporate & Investment Bank, which consists of Banking and Markets & Securities Services, offers a broad suite of investment banking, market-making, prime brokerage, lending, and treasury and securities products and services to a global client base of corporations, investors, financial institutions, merchants, government and municipal entities. Banking offers a full range of investment banking products and services in all major capital markets, including advising on corporate strategy and structure, capital-raising in equity and debt markets, as well as loan origination and syndication. Banking also includes Payments, which provides services, that enable clients to manage payments globally across liquidity and account solutions, commerce solutions, clearing, trade and working capital. Markets & Securities Services includes Markets, a global market-maker across products, including cash and derivative instruments, which also offers sophisticated risk management solutions, prime brokerage, clearing and research. Markets & Securities Services also includes Securities Services, a leading global custodian which provides custody, fund accounting and administration, and securities lending products principally for asset managers, insurance companies and public and private investment funds.

(a)Includes CB's share of revenue from investment banking products sold to CB clients through the CIB that is subject to a revenue sharing arrangement which is reported as a reduction in All other income.

(b)Includes tax-equivalent adjustments, predominantly due to income tax credits and other tax benefits related to alternative energy investments; income tax credits and amortization of the cost of investments in affordable housing projects; and tax-exempt income

from municipal bonds of $3.6 billion, $3.0 billion and $3.0 billion for the years ended December 31, 2023, 2022 and 2021, respectively.

(c)In the first quarter of 2023, the allocations of revenue and expense to CCB associated with a Merchant Services revenue sharing agreement were discontinued and are now retained in Payments in CIB. Prior-period amounts have been revised to conform with the current presentation.

(a)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. Refer to Notes 2, 3 and 24 for additional information.

(b)In the first quarter of 2023, the allocations of revenue and expense to CCB associated with a Merchant Services revenue sharing agreement were discontinued and are now retained in Payments in CIB. Prior-period amounts have been revised to conform with the current presentation.

2023 compared with 2022

Net income was $14.1 billion, down 5%.

Net revenue was $48.8 billion, up 1%.

Banking revenue was $16.5 billion, up 7%.

•Investment Banking revenue was $6.2 billion, down 4%. Excluding $257 million of markdowns on held-for-sale positions, primarily unfunded commitments, in the bridge financing portfolio recorded in the second quarter of 2022, Investment Banking revenue was down 8%. Investment Banking fees were down 5%, driven by lower advisory and debt underwriting fees, partially offset by higher equity underwriting fees. The Firm ranked #1 for Global Investment Banking fees, according to Dealogic.

–Advisory fees were $2.8 billion, down 8%, due to a lower number of completed transactions, reflecting the lower level of announced deals in the current and the prior year amid a challenging environment.

–Debt underwriting fees were $2.6 billion, down 8%, as challenging market conditions, primarily in the first half of the year, resulted in lower issuance activity across leveraged loans, investment-grade loans, and high-grade bonds. This was largely offset by higher issuance activity in high-yield bonds driven by higher industry-wide issuance.

–Equity underwriting fees were $1.2 billion, up 11%, driven by a higher level of follow-on offerings due to lower equity market volatility and a higher level of convertible securities offerings which benefited from higher rates, partially offset by lower activity in private placements amid a challenging environment.

•Payments revenue was $9.3 billion, up 22%, driven by deposit margin expansion on higher rates and fees, partially offset by the higher level of client credits that reduce such fees and lower average deposits. The net impact of equity investments was flat reflecting net markdowns in both periods, including the impact of an impairment in the current year.

•Lending revenue was $1.0 billion, down 27%, driven by $494 million of fair value losses on hedges of retained loans which included an increase in hedging activity, compared to $27 million of gains in the prior year, partially offset by higher net interest income.

Markets & Securities Services revenue was $32.3 billion, down 1%. Markets revenue was $27.8 billion, down 4%.

•Fixed Income Markets revenue was $18.8 billion, up 1%, driven by an increase in finance and trading activity in the Securitized Products Group and improved performance in Credit Trading, predominantly offset by lower revenue in Currencies & Emerging Markets as the business substantially normalized from the prior year’s elevated levels of volatility and client activity.

•Equity Markets revenue was $9.0 billion, down 13%, driven by lower revenue in Equity Derivatives and Cash Equities, compared with a stronger performance in the prior year.

•Securities Services revenue was $4.8 billion, up 6%, driven by deposit margin expansion on higher rates, largely offset by lower average deposits and fees.

•Credit Adjustments & Other was a loss of $280 million, compared with a loss of $836 million in the prior year.

Noninterest expense was $28.6 billion, up 5%, driven by higher legal expense, compensation expense, including the impact of wage inflation, and higher indirect tax expense.

The provision for credit losses was $121 million, driven by net charge-offs of $272 million, up $190 million, driven by single name exposures, largely offset by a $151 million net reduction in the allowance for credit losses.

The net reduction in the allowance was driven by the impact of changes in the loan and lending-related commitment portfolios and the net effect of changes in the Firm’s weighted average macroeconomic outlook, predominantly offset by an addition for certain accounts receivable and net downgrade activity.

The provision in the prior year was $1.2 billion, predominantly driven by a net addition to the allowance for credit losses.

(a)Loans retained includes credit portfolio loans, loans held by consolidated Firm-administered multi-seller conduits, trade finance loans, other held-for-investment loans and overdrafts.

(b)Loans held-for-sale and loans at fair value primarily reflect lending related positions originated and purchased in CIB Markets, including loans held for securitization.

(a)Allowance for loan losses of $95 million, $104 million and $58 million were held against these nonaccrual loans at December 31, 2023, 2022 and 2021, respectively.

(b)At December 31, 2023, 2022 and 2021, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $59 million, $115 million and $281 million, 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.

(d)Management uses allowance for loan losses to period-end loans retained, excluding trade finance and conduits, a non-GAAP financial measure, to provide a more meaningful assessment of CIB’s allowance coverage ratio. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 62–64.

(a)Represents long-term debt and loan syndications.

(a)Source: Dealogic as of January 2, 2024. Reflects the ranking of revenue wallet and market share.

(b)Global M&A excludes any withdrawn transactions. U.S. M&A revenue wallet represents wallet from client parents based in the U.S.

(c)Global equity and equity-related ranking includes rights offerings and Chinese A-Shares.

(d)Long-term debt rankings include investment-grade, high-yield, supranationals, sovereigns, agencies, covered bonds, asset-backed securities ("ABS") and mortgage-backed securities ("MBS"); and exclude money market, short-term debt, and U.S. municipal securities.

(e)Global investment banking fees exclude money market, short-term debt and shelf securities.

Markets revenue

The following table summarizes selected income statement data for the Markets businesses. Markets includes both Fixed Income Markets and Equity Markets. Markets revenue consists of principal transactions, fees, commissions and other income, as well as net interest income. The Firm assesses its Markets business performance on a total revenue basis, as offsets generally occur across revenue line items. For example, securities that generate net interest income may be risk-managed by derivatives that are reflected at fair value in principal transactions revenue. Refer to Notes 6 and 7 for a description of the composition of these income statement line items.

Principal transactions reflects revenue on financial instruments and commodities transactions that arise from client-driven market-making activity. Principal transactions revenue includes amounts recognized upon executing new transactions with market participants, as well as “inventory-related revenue”, which is revenue recognized from gains and losses on derivatives and other instruments that the Firm has been holding in anticipation of, or in response to, client demand, and changes in the fair value of instruments used by the Firm to actively manage the risk exposure arising from such inventory. Principal transactions revenue recognized upon executing new transactions with market participants is affected by many factors including the level of client activity, the bid-offer spread (which is the

difference between the price at which a market participant is willing and able to sell an instrument to the Firm and the price at which another market participant is willing and able to buy it from the Firm, and vice versa), market liquidity and volatility. These factors are interrelated and sensitive to the same factors that drive inventory-related revenue, which include general market conditions, such as interest rates, foreign exchange rates, credit spreads, and equity and commodity prices, as well as other macroeconomic conditions.

For the periods presented below, the primary source of principal transactions revenue was the amount recognized upon executing new transactions.

(a)The decline in Markets net interest income was driven by higher funding costs.

(b)Loss days represent the number of days for which Markets, which consists of Fixed Income Markets and Equity Markets, posted losses to total net revenue. The loss days determined under this measure differ from the measure used to determine backtesting gains and losses. Daily backtesting gains and losses include positions in the Firm’s Risk Management value-at-risk ("VaR") measure and exclude certain components of total net revenue, which may more than offset backtesting gains or losses on a particular day. For more information on daily backtesting gains and losses, refer to the VaR discussion on pages 137–139.

(a)Consists of mutual funds, unit investment trusts, currencies, annuities, insurance contracts, options and other contracts.

(b)Represents Firmwide merchant processing volume.

(c)Client deposits and other third-party liabilities pertain to the Payments and Securities Services businesses.

(a)Total net revenue and loans retained (excluding loans held-for-sale and loans at fair value) are based on the location of the trading desk, booking location, or domicile of the client, as applicable.

(b)Client deposits and other third-party liabilities pertaining to the Payments and Securities Services businesses, and AUC, are based on the domicile of the client.

(c)In the first quarter of 2023, the allocations of revenue and expense to CCB associated with a Merchant Services revenue sharing agreement were discontinued and are now retained in Payments in CIB. Prior-period amounts have been revised to conform with the current presentation.

COMMERCIAL BANKING

Commercial Banking provides comprehensive financial solutions, including lending, payments, investment banking and asset management products across three primary client segments: Middle Market Banking, Corporate Client Banking and Commercial Real Estate Banking. Other includes amounts not aligned with a primary client segment.Middle Market Banking covers small and midsized companies, local governments and nonprofit clients.Corporate Client Banking covers large corporations. Commercial Real Estate Banking covers investors, developers, and owners of multifamily, office, retail, industrial and affordable housing properties.

(a)Total net revenue included tax-equivalent adjustments from income tax credits related to equity investments in designated community development entities and in entities established for rehabilitation of historic properties, as well as tax-exempt income related to municipal financing activities of $382 million, $322 million and $330 million for the years ended December 31, 2023, 2022 and 2021, respectively.

(b)Includes First Republic. Refer to page 67 for additional information.

2023 compared with 2022

Net income was $6.1 billion, up 46%.

Net revenue was $15.5 billion, up 35%.

Net interest income was $12.1 billion, up 47%, driven by:

•deposit margin expansion on higher rates, partially offset by lower average deposits, and

•higher average loans, including the impact from First Republic.

Noninterest revenue was $3.5 billion, up 5%, driven by:

•higher lending-related revenue predominantly driven by the amortization of the purchase discount on certain acquired lending-related commitments associated with First Republic,

•net markups on held-for-sale positions, primarily unfunded commitments, in the bridge financing portfolio, compared with net markdowns in the prior year, and

•higher investment banking revenue and card income,

predominantly offset by

•lower deposit-related fees due to the higher level of client credits that reduce such fees, and

•the absence of a gain on an equity-method investment received in partial satisfaction of a loan.

Noninterest expense was $5.4 billion, up 14%, driven by higher compensation expense, reflecting an increase in employees including front office and technology, as well as higher volume-related expense, including the impact of new client acquisitions.

The provision for credit losses was $2.0 billion, reflecting:

•a $1.0 billion net addition to the allowance for credit losses, driven by the net effect of changes in the Firm’s weighted average macroeconomic outlook, including a deterioration in the outlook for commercial real estate and net downgrade activity, partially offset by the impact of changes in the loan and lending-related commitment portfolios,

•$608 million to establish the allowance for the First Republic loans and lending-related commitments in the second quarter of 2023; and

•net charge-offs of $316 million, up $232 million, primarily driven by Real Estate, predominantly concentrated in Office.

The provision in the prior year was $1.3 billion, reflecting a net addition to the allowance for credit losses.

CB product revenue consists of the following:Lending includes a variety of financing alternatives, which are primarily provided on a secured basis; collateral includes receivables, inventory, equipment, real estate or other assets. Products include term loans, revolving lines of credit, bridge financing, asset-based structures, leases, and standby letters of credit.Payments includes services that enable CB clients to manage payments globally across liquidity and account solutions, commerce solutions, clearing, trade and working capital.Investment banking includes revenue from a range of products providing CB clients with sophisticated capital-raising alternatives, as well as balance sheet and risk management tools through advisory, equity underwriting, and loan syndications. Revenue from fixed income and equity markets products used by CB clients is also included.Other revenue primarily includes tax-equivalent adjustments generated from Community Development Banking and activity derived from principal transactions.

(a)In the third quarter of 2023, certain revenue from CIB Markets products was reclassified from payments to investment banking. Prior-period amounts have been revised to conform with the current presentation.

(b)Includes CB’s share of revenue from Investment Banking and Markets' products sold to CB clients through the CIB which is reported in All other income.

(c)Includes gross revenues earned by the Firm that are subject to a revenue sharing arrangement between CB and the CIB for Investment Banking and Markets' products sold to CB clients. This includes revenues related to fixed income and equity markets products. Refer to Business Segment Results on page 65 for a discussion of revenue sharing.

(d)Includes First Republic. Refer to page 67 for additional information.

(e)Middle Market Banking and Commercial Real Estate Banking included $216 million and $687 million, respectively, for the year ended December 31, 2023, associated with First Republic.