Annual Statements Open main menu

JPMORGAN CHASE & CO - Quarter Report: 2023 September (Form 10-Q)



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period endedCommission file
September 30, 2023number1-5805
JPMorgan Chase & Co.
(Exact name of registrant as specified in its charter)
Delaware13-2624428
(State or other jurisdiction of
incorporation or organization)
(I.R.S. employer
identification no.)
383 Madison Avenue,
New York,New York10179
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (212) 270-6000
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stockJPMThe New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 5.75% Non-Cumulative Preferred Stock, Series DD
JPM PR DThe New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 6.00% Non-Cumulative Preferred Stock, Series EE
JPM PR CThe New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 4.75% Non-Cumulative Preferred Stock, Series GG
JPM PR JThe New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 4.55% Non-Cumulative Preferred Stock, Series JJJPM PR KThe New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 4.625% Non-Cumulative Preferred Stock, Series LL
JPM PR L
The New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 4.20% Non-Cumulative Preferred Stock, Series MMJPM PR MThe New York Stock Exchange
Alerian MLP Index ETNs due May 24, 2024AMJNYSE Arca, Inc.
Guarantee of Callable Fixed Rate Notes due June 10, 2032 of JPMorgan Chase Financial Company LLC
JPM/32The New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
Number of shares of common stock outstanding as of September 30, 2023: 2,891,008,341



FORM 10-Q
TABLE OF CONTENTS
Page
Item 1.
Item 2.
Consolidated Balance Sheets and Cash Flows Analysis
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
2


JPMorgan Chase & Co.
Consolidated financial highlights (unaudited)
As of or for the period ended, (in millions, except per share, ratio, headcount data and where otherwise noted)Nine months ended Sept 30,
3Q232Q231Q234Q223Q2220232022
Selected income statement data
Total net revenue$39,874 $41,307 $38,349 $34,547 $32,716 $119,530 $94,148 
Total noninterest expense21,757 20,822 20,107 19,022 19,178 62,686 57,118 
Pre-provision profit(a)
18,117 20,485 18,242 15,525 13,538 56,844 37,030 
Provision for credit losses1,384 2,899 2,275 2,288 1,537 6,558 4,101 
Income before income tax expense16,733 17,586 15,967 13,237 12,001 50,286 32,929 
Income tax expense3,582 3,114 3,345 2,229 2,264 10,041 6,261 
Net income
$13,151 $14,472 $12,622 $11,008 $9,737 $40,245 $26,668 
Earnings per share data
Net income:     Basic
$4.33 $4.76 $4.11 $3.58 $3.13 $13.20 $8.53 
         Diluted4.33 4.75 4.10 3.57 3.12 13.18 8.51 
Average shares: Basic2,927.5 2,943.8 2,968.5 2,962.9 2,961.2 2,946.6 2,966.8 
         Diluted2,932.1 2,948.3 2,972.7 2,967.1 2,965.4 2,951.0 2,970.9 
Market and per common share data
Market capitalization419,254 422,661 380,803 393,484 306,520 419,254 306,520 
Common shares at period-end2,891.0 2,906.1 2,922.3 2,934.3 2,933.2 2,891.0 2,933.2 
Book value per share100.30 98.11 94.34 90.29 87.00 100.30 87.00 
Tangible book value per share (“TBVPS”)(a)
82.04 79.90 76.69 73.12 69.90 82.04 69.90 
Cash dividends declared per share1.05 1.00 1.00 1.00 1.00 3.05 3.00 
Selected ratios and metrics
Return on common equity (“ROE”)(b)
18 %20 %18 %16 %15 %19 %14 %
Return on tangible common equity (“ROTCE”)(a)(b)
22 25 23 20 18 23 17 
Return on assets(b)
1.36 1.51 1.38 1.16 1.01 1.42 0.92 
Overhead ratio55 50 52 55 59 52 61 
Loans-to-deposits ratio55 54 47 49 46 55 46 
Firm Liquidity coverage ratio (“LCR”) (average)(c)
112 112 114 112 113 112 113 
JPMorgan Chase Bank, N.A. LCR (average)(c)
123 129 140 151 165 123 165 
Common equity Tier 1 (“CET1”) capital ratio(d)
14.3 13.8 13.8 13.2 12.5 14.3 12.5 
Tier 1 capital ratio(d)
15.9 15.4 15.4 14.9 14.1 15.9 14.1 
Total capital ratio(d)
17.8 17.3 17.4 16.8 16.0 17.8 16.0 
Tier 1 leverage ratio(c)(d)
7.1 6.9 6.9 6.6 6.2 7.1 6.2 
Supplementary leverage ratio (“SLR”)(c)(d)
6.0 5.8 5.9 5.6 5.3 6.0 5.3 
Selected balance sheet data (period-end)
Trading assets$601,993 $636,996 $578,892 $453,799 $506,487 $601,993 $506,487 
Investment securities, net of allowance for credit losses585,380 612,203 610,075 631,162 618,246 585,380 618,246 
Loans1,310,059 1,300,069 1,128,896 1,135,647 1,112,633 1,310,059 1,112,633 
Total assets3,898,333 3,868,240 3,744,305 3,665,743 3,773,884 3,898,333 3,773,884 
Deposits2,379,526 2,398,962 2,377,253 2,340,179 2,408,615 2,379,526 2,408,615 
Long-term debt362,793 364,078 295,489 295,865 287,473 362,793 287,473 
Common stockholders’ equity289,967 285,112 275,678 264,928 255,180 289,967 255,180 
Total stockholders’ equity317,371 312,516 303,082 292,332 288,018 317,371 288,018 
Headcount308,669 
(e)
300,066 296,877 293,723 288,474 308,669 
(e)
288,474 
Credit quality metrics
Allowances for credit losses$24,155 $24,288 $22,774 $22,204 $20,797 $24,155 $20,797 
Allowance for loan losses to total retained loans1.73 %1.75 %1.85 %1.81 %1.70 %1.73 %1.70 %
Nonperforming assets$8,131 $7,838 $7,418 $7,247 $7,243 $8,131 $7,243 
Net charge-offs1,497 1,411 1,137 887 727 4,045 1,966 
Net charge-off rate0.47 %0.47 %0.43 %0.33 %0.27 %0.46 %0.25 %
As of and for the period ended September 30, 2023, the results of the Firm include the impact of First Republic. Refer to Business Segment Results on page 23 and Note 28 for additional information.
(a)Pre-provision profit, TBVPS and ROTCE are each non-GAAP financial measures. Tangible common equity (“TCE”) is also a non-GAAP financial measure. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 19-20 for a further discussion of these measures.
(b)Ratios are based upon annualized amounts.
(c)For the nine months ended September 30, 2023 and 2022, the percentage represents average ratios for the three months ended September 30, 2023 and 2022.
(d)The ratios reflect the Current Expected Credit Losses (“CECL”) capital transition provisions. Refer to Capital Risk Management on pages 48-53 of this Form 10-Q and pages 86-96 of JPMorgan Chase’s 2022 Form 10-K for additional information.
(e)Includes 4,774 individuals associated with First Republic who became employees effective July 2, 2023.
3


INTRODUCTION
The following is Management’s discussion and analysis of the financial condition and results of operations (“MD&A”) of JPMorgan Chase & Co. (“JPMorgan Chase” or the “Firm”) for the third quarter of 2023.
This Quarterly Report on Form 10-Q for the third quarter of 2023 (“Form 10-Q”) should be read together with JPMorgan Chase’s Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 Form 10-K”). Refer to the Glossary of terms and acronyms and line of business metrics on pages 200-208 for definitions of terms and acronyms used throughout this Form 10-Q.
This Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the current beliefs and expectations of JPMorgan Chase’s management, speak only as of the date of this Form 10-Q and are subject to significant risks and uncertainties. Refer to Forward-looking Statements on page 95 of this Form 10-Q; Part I, Item 1A, Risk Factors on pages 9-32 of the 2022 Form 10-K; and Part II, Item 1A, Risk Factors on page 209 of this Form 10-Q for a discussion of certain of those risks and uncertainties and the factors that could cause JPMorgan Chase’s actual results to differ materially because of those risks and uncertainties. There is no assurance that actual results will be in line with any outlook information set forth herein, and the Firm does not undertake to update any forward-looking statements.
JPMorgan Chase & Co. (NYSE: JPM), a financial holding company incorporated under Delaware law in 1968, is a leading financial services firm based in the United States of America (“U.S.”), with operations worldwide. JPMorgan Chase had $3.9 trillion in assets and $317.4 billion in stockholders’ equity as of September 30, 2023. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. Under the J.P. Morgan and Chase brands, the Firm serves millions of customers, predominantly in the U.S., and many of the world’s most prominent corporate, institutional and government clients globally.
JPMorgan Chase’s principal bank subsidiary is JPMorgan Chase Bank, National Association (“JPMorgan Chase Bank, N.A.”), a national banking association with U.S. branches in 48 states and Washington, D.C. JPMorgan Chase’s principal non-bank subsidiary is J.P. Morgan Securities LLC (“J.P. Morgan Securities”), a U.S. broker-dealer. The bank and non-bank subsidiaries of JPMorgan Chase operate nationally as well as through overseas branches and subsidiaries, representative offices and subsidiary foreign banks. The Firm’s principal operating subsidiaries outside the U.S. are J.P. Morgan Securities plc and J.P. Morgan SE (“JPMSE”), which are subsidiaries of JPMorgan Chase Bank, N.A. and are based in the United Kingdom (“U.K.”) and Germany, respectively.
For management reporting purposes, the Firm’s activities are organized into four major reportable business segments, as well as a Corporate segment. The Firm’s consumer business segment is Consumer & Community Banking (“CCB”). The Firm’s wholesale business segments are the Corporate & Investment Bank (“CIB”), Commercial Banking (“CB”), and Asset & Wealth Management (“AWM”). Refer to Business Segment Results on pages 21-46 and Note 27 of this Form 10-Q, and Note 32 of JPMorgan Chase’s 2022 Form 10-K, for a description of the Firm’s business segments and the products and services they provide to their respective client bases. On May 1, 2023, JPMorgan Chase acquired certain assets and assumed certain liabilities of First Republic Bank (the “First Republic acquisition”) from the Federal Deposit Insurance Corporation (“FDIC”). Refer to Note 28 for additional information.
The Firm's website is www.jpmorganchase.com. JPMorgan Chase makes available on its website, free of charge, annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after it electronically files or furnishes such material to the U.S. Securities and Exchange Commission (the “SEC”) at www.sec.gov. JPMorgan Chase makes new and important information about the Firm available on its website at https://www.jpmorganchase.com, including on the Investor Relations section of its website at https://www.jpmorganchase.com/ir. Information on the Firm's website is not incorporated by reference into this Form 10-Q or the Firm’s other filings with the SEC.
4


EXECUTIVE OVERVIEW
This executive overview of the MD&A highlights selected information and does not contain all of the information that is important to readers of this Form 10-Q. For a complete description of the trends and uncertainties, as well as the risks and critical accounting estimates affecting the Firm, this Form 10-Q and the 2022 Form 10-K should be read together and in their entirety.
Financial performance of JPMorgan Chase
(unaudited)
As of or for the period ended,
(in millions, except per share data and ratios)
Three months ended September 30,Nine months ended September 30,
20232022Change20232022Change
Selected income statement data
Noninterest revenue$17,148 $15,198 13 %$54,314 $47,630 14 %
Net interest income22,726 17,518 30 65,216 46,518 40 
Total net revenue39,874 32,716 22 119,530 94,148 27 
Total noninterest expense21,757 19,178 13 62,686 57,118 10 
Pre-provision profit18,117 13,538 34 56,844 37,030 54 
Provision for credit losses1,384 1,537 (10)6,558 4,101 60 
Net income13,151 9,737 35 40,245 26,668 51 
Diluted earnings per share4.33 3.12 39 13.18 8.51 55 
Selected ratios and metrics
Return on common equity18 %15 %19 %14 %
Return on tangible common equity
22 18 23 17 
Book value per share$100.30 $87.00 15 $100.30 $87.00 15 
Tangible book value per share82.04 69.90 17 82.04 69.90 17 
Capital ratios(a)
CET1 capital14.3 %12.5 %14.3 %12.5 %
Tier 1 capital15.9 14.1 15.9 14.1 
Total capital17.8 16.0 17.8 16.0 
Memo:
NII excluding Markets(b)
$23,173 $16,923 37 $66,479 $42,357 57 
NIR excluding Markets(b)
10,932 9,797 12 33,963 31,040 
Markets(b)
6,581 6,771 (3)21,981 23,314 (6)
Total net revenue - managed basis$40,686 $33,491 21 $122,423 $96,711 27 
As of and for the period ended September 30, 2023, the results of the Firm include the impact of First Republic. Refer to page 23 and Note 28 for additional information.
(a)The ratios reflect the CECL capital transition provisions. Refer to Capital Risk Management on pages 48-53 of this Form 10-Q and pages 86-96 of JPMorgan Chase’s 2022 Form 10-K for additional information.
(b)NII and NIR refer to net interest income and noninterest revenue, respectively. Markets consists of CIB's Fixed Income Markets and Equity Markets businesses.
Comparisons noted in the sections below are for the third quarter of 2023 versus the third quarter of 2022, unless otherwise specified.
Firmwide overview
For the third quarter of 2023, JPMorgan Chase reported net income of $13.2 billion, up 35%, earnings per share of $4.33, ROE of 18% and ROTCE of 22%. The Firm's results for the third quarter of 2023 included investment securities losses of $669 million in Treasury and CIO, and legal expense of $665 million, predominantly in CIB.
Total net revenue was $39.9 billion, up 22%, reflecting:
Net interest income ("NII") of $22.7 billion, up 30%, driven by higher rates, the impact of First Republic and higher revolving balances in Card Services, partially offset by lower average deposit balances and lower
Markets net interest income. NII excluding Markets was $23.2 billion, up 37%.
Noninterest revenue ("NIR") was $17.1 billion, up 13%, driven by higher Markets noninterest revenue, the impact of First Republic, higher asset management fees and lower net investment securities losses in Treasury and CIO, partially offset by impairment losses on equity investments in CIB.
Total Markets revenue declined reflecting lower Markets NII, predominantly offset by higher NIR.
Noninterest expense was $21.8 billion, up 13%, predominantly driven by the impact of First Republic, higher compensation expense, including growth in front office and technology headcount as well as wage inflation, and higher legal expense.
5


The provision for credit losses was $1.4 billion, reflecting $1.5 billion of net charge-offs and a net reduction in the allowance for credit losses of $113 million. The net reduction in the allowance for credit losses reflected:
$184 million in wholesale, predominantly driven by the impact of changes in the loan and lending-related commitment portfolios in CIB, partially offset by the net effect of changes in the Firm's macroeconomic scenarios,
partially offset by
a net addition of $58 million in consumer, primarily driven by CCB, comprised of $301 million in Card Services, predominantly offset by a $250 million net reduction in Home Lending.
Net charge-offs increased $770 million, predominantly driven by CCB, primarily Card Services.
The prior year included an $808 million net addition to the allowance for credit losses and net charge-offs of $727 million.
The total allowance for credit losses was $24.2 billion at September 30, 2023. The Firm had an allowance for loan losses to retained loans coverage ratio of 1.73%, compared with 1.70% in the prior year.
The Firm’s nonperforming assets totaled $8.1 billion at September 30, 2023, up 12%, driven by wholesale nonaccrual loans, which reflects the impact of downgrades. Refer to Wholesale Credit Portfolio and Consumer Credit Portfolio on pages 70-79 and pages 65-69, respectively, for additional information.
Firmwide average loans of $1.3 trillion were up 17%, predominantly driven by higher loans in CCB and CB, primarily as a result of First Republic.
Firmwide average deposits of $2.4 trillion were down 4%, driven by:
continued migration in AWM into higher-yielding investments; a net decline in CCB reflecting higher customer spending in existing accounts; and continued deposit attrition in CB,
partially offset by
increases in CCB associated with First Republic, in Corporate related to the Firm's international consumer initiatives, and in CIB due to net issuances of structured notes as a result of client demand.
Refer to Liquidity Risk Management on pages 54-61 for additional information.

Selected capital and other metrics
CET1 capital was $242 billion, and the Standardized and Advanced CET1 ratios were 14.3% and 14.5%, respectively.
SLR was 6.0%.
TBVPS grew 17%, ending the third quarter of 2023 at $82.04.
As of September 30, 2023, the Firm had eligible end-of-period High Quality Liquid Assets (“HQLA”) of approximately $796 billion and unencumbered marketable securities with a fair value of approximately $590 billion, resulting in approximately $1.4 trillion of liquidity sources. Refer to Liquidity Risk Management on pages 54-61 for additional information.
Refer to Consolidated Results of Operations and Consolidated Balance Sheets Analysis on pages 10-15 and pages 16-18, respectively, for a further discussion of the Firm's results; and Business Segment Results on page 23 and Note 28 for additional information on the First Republic acquisition.
Pre-provision profit, ROTCE, TCE, TBVPS, NII and NIR excluding Markets, and total net revenue on a managed basis are non-GAAP financial measures. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 19-20 for a further discussion of each of these measures.

6


Business segment highlights
Selected business metrics for each of the Firm’s four lines of business ("LOB"), including the impact of First Republic, are presented below for the third quarter of 2023.
CCB
ROE 41%
Average deposits down 3%; client investment assets up 43%
Average loans up 27% year-over-year ("YoY") and 9% quarter-over-quarter ("QoQ"); Card Services net charge-off rate of 2.49%
Debit and credit card sales volume(a) up 8%
Active mobile customers(b) up 9%
CIB
ROE 11%
#1 ranking for Global Investment Banking fees with 8.6% wallet share year-to-date
Total Markets revenue of $6.6 billion, down 3%, with Fixed Income Markets up 1% and Equity Markets down 10%
CB
ROE 25%
Gross Investment Banking and Markets revenue of $821 million, up 8%
Average loans up 24% YoY and 4% QoQ; average deposits down 7%
AWM
ROE 32%
Assets under management ("AUM") of $3.2 trillion, up 22%
Average loans up 3% YoY and 2% QoQ; average deposits down 20%
(a)Excludes Commercial Card.
(b)Users of all mobile platforms who have logged in within the past 90 days. As of September 30, 2023, excludes First Republic.
Refer to the Business Segment Results on pages 21-46 for a detailed discussion of results by business segment.

Credit provided and capital raised
JPMorgan Chase continues to support consumers, businesses and communities around the globe. The Firm provided new and renewed credit and raised capital for wholesale and consumer clients during the first nine months of 2023, consisting of:
$ 1.7 trillion
Total credit provided and capital raised (including loans and commitments)
$182
billion
Credit for consumers
$27
billion
Credit for U.S. small businesses
$775 billion
Credit for corporations
$709 billion
Capital for corporate clients and non-U.S. government entities
$37
 billion
Credit and capital for nonprofit and U.S. government entities(a)
(a)Includes states, municipalities, hospitals and universities.

7


Outlook
These current expectations are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on the current beliefs and expectations of JPMorgan Chase’s management, speak only as of the date of this Form 10-Q, and are subject to significant risks and uncertainties. Refer to Forward-Looking Statements on page 95 of this Form 10-Q; Part I, Item 1A, Risk Factors on pages 9-32 of the 2022 Form 10-K; and Part II, Item 1A, Risk Factors on page 209 of this Form 10-Q for a further discussion of certain of those risks and uncertainties and the other factors that could cause JPMorgan Chase’s actual results to differ materially because of those risks and uncertainties. There is no assurance that actual results in 2023 will be in line with the outlook information set forth below, and the Firm does not undertake to update any forward-looking statements.
JPMorgan Chase’s current outlook for full-year 2023 should be viewed against the backdrop of the global and U.S. economies, financial markets activity, the geopolitical environment, the competitive environment, client and customer activity levels, and regulatory and legislative developments in the U.S. and other countries where the Firm does business. Each of these factors will affect the performance of the Firm. The Firm will continue to make appropriate adjustments to its businesses and operations in response to ongoing developments in the business, economic, regulatory and legal environments in which it operates.
In May 2023, the FDIC issued a notice of proposed rulemaking recommending a special assessment related to the systemic risk determination made on March 12, 2023, to recover losses to the Deposit Insurance Fund ("DIF") arising from the protection of uninsured depositors resulting from recent bank resolutions. In its current form, the rule would impose a special assessment at an annual rate of 12.5 basis points on certain banks’ estimated uninsured deposits reported as of December 31, 2022. If this rule remains as proposed, the Firm expects to recognize an estimated assessment expense of approximately $3 billion (pre-tax) when the rule is finalized.
Full-year 2023
Management expects net interest income to be approximately $88.5 billion and net interest income excluding Markets to be approximately $89 billion, market dependent.
Management expects adjusted expense to be approximately $84 billion, market dependent and excluding any FDIC special assessment.
Management expects the net charge-off rate in Card Services to be approximately 2.5%.
Net interest income excluding Markets and adjusted expense are non-GAAP financial measures. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 19-20.
8


Business Developments
First Republic acquisition
On May 1, 2023, JPMorgan Chase acquired certain assets and assumed certain liabilities of First Republic Bank (the "First Republic acquisition") from the Federal Deposit Insurance Corporation (“FDIC”), as receiver.
JPMorgan Chase’s Consolidated Financial Statements as of and for the period ended September 30, 2023 reflect the impact of First Republic. Where meaningful to the disclosure, the impact of the First Republic acquisition, as well as subsequent related business and activities, are disclosed in various sections of this Form 10-Q. The Firm continues to convert certain operations, and to integrate clients, products and services, associated with the First Republic acquisition to align with the Firm’s businesses and operations. The Firm also continues to evaluate to which segments certain clients, products and services, primarily deposits, should be allocated. Accordingly, reporting classifications and allocations may change in future periods, including across the Firm's segments.
Refer to Note 28 and page 23 for additional information related to First Republic.
Current market and economic conditions
Refer to Part I, Item 1A, Risk Factors on pages 9-32 of JPMorgan Chase's 2022 Form 10-K and Part II, Item 1A, Risk Factors on page 209 of this Form 10-Q for a discussion of material risk factors that could affect the Firm. These risk factors include potential impacts to the Firm associated with current market and economic conditions, including inflationary pressures, higher interest rates and ongoing geopolitical tensions and hostilities, any or all of which could result in additional market disruption, government actions (including with respect to monetary policies), continuing impacts to global supply chains, and other geopolitical risks.

9


CONSOLIDATED RESULTS OF OPERATIONS
This section provides a comparative discussion of JPMorgan Chase’s Consolidated Results of Operations on a reported basis for the three and nine months ended September 30, 2023 and 2022, unless otherwise specified. Factors that relate primarily to a single business segment are discussed in more detail within that business segment's results. Refer to pages 91-93 of this Form 10-Q and pages 149-152 of JPMorgan Chase’s 2022 Form 10-K for a discussion of the Critical Accounting Estimates Used by the Firm that affect the Consolidated Results of Operations.
Revenue
Three months ended September 30,Nine months ended September 30,
(in millions)20232022Change20232022Change
Investment banking fees$1,722 $1,674 %$4,884 $5,268 (7)%
Principal transactions6,210 5,383 15 20,735 15,478 34 
Lending- and deposit-related fees2,039 1,731 18 5,487 5,443 
Asset management fees3,904 3,495 12 11,143 10,664 
Commissions and other fees1,705 1,574 5,139 5,007 
Investment securities losses(669)(959)30 (2,437)(1,506)(62)
Mortgage fees and related income414 314 32 913 1,152 (21)
Card income1,209 1,086 11 3,537 3,194 11 
Other income(a)(b)(c)
614 900 (32)4,913 2,930 68 
Noninterest revenue17,148 15,198 13 54,314 47,630 14 
Net interest income22,726 17,518 30 65,216 46,518 40 
Total net revenue$39,874 $32,716 22 %$119,530 $94,148 27 %
(a)    Included operating lease income of $695 million and $870 million for the three months ended September 30, 2023 and 2022, respectively, and $2.2 billion and $2.9 billion for the nine months ended September 30, 2023 and 2022, respectively.
(b) Included measurement period adjustments of $100 million in the three months ended September, 2023, increasing the estimated bargain purchase gain to $2.8 billion in Corporate, for the nine months ended September 30, 2023, associated with the First Republic acquisition. Refer to Business Segment Results on page 23, and Notes 6 and 28 for additional information.
(c)    Includes losses on tax-oriented investments. Refer to Note 6 for additional information.
Quarterly results
Investment banking fees in CIB included:
higher debt underwriting fees driven by higher issuance activity in high-yield bonds and higher originations in leveraged loans reflecting wallet share gains, partially offset by lower issuance activity in high-grade bonds impacted by higher rates, and
lower advisory fees due to a lower number of completed transactions, reflecting the lower level of announced deals in prior periods amid a challenging environment.
Refer to Business Segment Results and CIB segment results on pages 21-46 and pages 29-35, respectively, and Note 6 for additional information.
Principal transactions revenue increased, reflecting in CIB:
higher principal transactions revenue in Equity Markets, primarily in Equity Derivatives and Prime Finance. The higher principal transactions revenue in Equities was more than offset by lower Equity Markets net interest income, primarily due to higher funding costs, and
in Fixed Income Markets, principal transactions revenue was relatively flat, primarily due to lower revenue in Rates and Currencies & Emerging Markets, offset by higher revenue in Securitized Products and Fixed Income Financing.
The increase in principal transactions revenue also included the impact of higher short-term cash deployment activities in Treasury and CIO as a result of the current interest rate environment.
Principal transactions revenue in CIB generally has offsets across other revenue lines, including net interest income. The Firm assesses the performance of its Markets business on a total net revenue basis.
Refer to CIB and Corporate segment results on pages 29-35 and pages 45-46, respectively, and Note 6 for additional information.
Lending- and deposit-related fees increased due to:
higher lending-related revenue driven by the amortization of the fair value discount on certain acquired lending-related commitments associated with First Republic, predominantly in AWM and CB,
partially offset by
lower cash management fees in CIB and CB driven by the higher level of credits earned by clients that reduce such fees.
Refer to CIB, CB and AWM segment results on pages 29-35, pages 36-39 and pages 40-44, respectively, and Note 6 and Note 28 for additional information on the First Republic acquisition.
10


Asset management fees increased driven by strong net inflows and higher average market levels in AWM and CCB, and the impact of First Republic in CCB.
Refer to CCB and AWM segment results on pages 24-28 and pages 40-44, respectively, and Note 6 for additional information; and Business Segment Results on page 23 for additional information on First Republic.
Commissions and other fees increased largely driven by higher commissions on brokerage activities and higher administration fees.
Refer to CIB and AWM segment results on pages 29-35 and pages 40-44, respectively, and Note 6 for additional information.
Investment securities losses reflected lower net losses on sales of U.S. Treasuries and U.S. GSE and government agency MBS, associated with repositioning the investment securities portfolio in Treasury and CIO. Refer to Corporate segment results on pages 45-46 and Note 10 for additional information.
Mortgage fees and related income increased in Home Lending, reflecting the impact of First Republic, higher production revenue, and higher net mortgage servicing revenue.
Refer to CCB segment results on pages 24-28 and Notes 6 and 15 for additional information.
Card income increased in CIB and CB, reflecting growth in merchant processing volume in J.P. Morgan Payments.
Card income increased in CCB, reflecting higher net interchange from the impact of an increase in debit and credit card sales volume, and higher annual fees, predominantly offset by higher amortization related to new account origination costs.
Refer to Business Segment Results, CCB, CIB and CB segment results on pages 21-46, pages 24-28, pages 29-35 and pages 36-39, respectively, Critical Accounting Estimates on pages 91-93, and Note 6 for additional information.
Other income decreased, reflecting:
lower auto operating lease income in CCB due to a decline in volume, and
the net impact of equity investments in CIB, including impairment losses in the current period,
largely offset by
measurement period adjustments of $100 million resulting in an increase to the estimated bargain purchase gain associated with the First Republic acquisition.
Refer to Business Segment Results on page 23 and Note 28 for additional information on the First Republic acquisition; and Note 5 for additional information on net investment hedges.
Net interest income increased driven by higher rates, the impact of First Republic, and higher revolving balances in Card Services, partially offset by lower average deposit balances and lower Markets net interest income.
The Firm’s average interest-earning assets were $3.3 trillion, down $13 billion, and the yield was 5.32%, up 227 basis points (“bps”). The net yield on these assets, on an FTE basis, was 2.72%, an increase of 63 bps. The net yield excluding Markets was 3.89%, up 108 bps.
Refer to the Consolidated average balance sheets, interest and rates schedule on page 198 for further information; and Business Segment Results on page 23 and Note 28 for additional information on the First Republic acquisition.
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 19-20 for a further discussion of Net yield excluding Markets.
Year-to-date results
Investment banking fees decreased, reflecting in CIB:
lower debt underwriting fees as challenging market conditions, primarily in the first half of the year, resulted in lower issuance activity across leveraged loans, high-grade bonds and investment-grade loans. This was partially offset by higher issuance activity in high-yield bonds driven by higher industry-wide issuance, and
lower advisory fees due to a lower number of completed transactions, reflecting the lower level of announced deals in prior periods amid a challenging environment.
Principal transactions revenue increased, reflecting in CIB:
higher Equity Markets net revenue in principal transactions, primarily in Prime Finance and Equity Derivatives,
higher Fixed Income Markets net revenue in principal transactions, primarily in Securitized Products and Fixed Income Financing, largely offset by lower revenue in Rates and Currencies & Emerging Markets,
the increase in Markets principal transactions revenue was more than offset by a decline in Markets net interest income, primarily due to higher funding costs
losses of $178 million in Credit Adjustments & Other, largely driven by losses on certain components of fair value option elected liabilities, compared with losses of $773 million in the prior year.
The increase in principal transactions revenue also included the impact of higher short-term cash deployment activities in Treasury and CIO as a result of the current interest rate environment.
Lending- and deposit-related fees was relatively flat, reflecting:
higher lending-related revenue driven by the amortization of the fair value discount on certain acquired lending-related commitments associated with First Republic, predominantly in AWM and CB,
predominantly offset by
lower cash management fees in CIB and CB driven by the higher level of credits earned by clients that reduce such fees.
11


Asset management fees increased driven by the impact of First Republic, higher average market levels and strong net inflows in CCB, and in AWM strong net inflows as well as the removal of most money market fund fee waivers.
Commissions and other fees increased driven by higher commissions on travel-related services and annuity sales in CCB.
Investment securities losses reflected higher net losses on 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.
Mortgage fees and related income decreased in Home Lending, reflecting:
lower production revenue due to a decline in volume, and
lower net mortgage servicing revenue due to lower net gains in MSR risk management and lower operating revenue.
Card income increased in CIB and CB, reflecting growth in merchant processing volume and Commercial Card transactions in J.P. Morgan Payments.
Card income increased in CCB, reflecting
higher net interchange from the impact of an increase in debit and credit card sales volume, and a reduction in rewards costs and partner payments in the first quarter of 2023 related to a periodic tax refund on airline miles redeemed, largely offset by an increase to the rewards liability due to adjustments to certain reward program terms in the second quarter of 2023, and
lower other card income driven by higher amortization related to new account origination costs, predominantly offset by higher annual fees.
Other income increased, reflecting:
the $2.8 billion estimated bargain purchase gain associated with the First Republic acquisition in Corporate,
the impact of net investment hedges, primarily in the first half of 2023, 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 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,
the net impact of equity investments in CIB, including impairment losses in the third quarter of 2023,
the absence of proceeds from an insurance settlement in the prior year,
the absence of a gain in the prior year on an equity-method investment received in partial satisfaction of a loan in CB, and
lower net gains related to certain other Corporate investments.
Net interest income increased driven by higher rates, higher revolving balances in Card Services, and the impact of First Republic, 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 $80 billion, and the yield was 5.01%, up 263 bps. The net yield on these assets, on an FTE basis, was 2.66%, an increase of 81 bps. The net yield excluding Markets was 3.84%, up 150 bps.
12


Provision for credit losses
Three months ended September 30,Nine months ended September 30,
(in millions)20232022Change20232022Change
Consumer, excluding credit card$(75)$(69)(9)%$728 $166 339 %
Credit card1,527 592 158 %4,073 1,828 123 
Total consumer1,452 523 178 4,801 1,994 141 
Wholesale(81)1,000 NM1,730 2,088 (17)
Investment securities13 14 (7)27 19 42 
Total provision for credit losses$1,384 $1,537 (10)%$6,558 $4,101 60 %
Quarterly results
The provision for credit losses was $1.4 billion, reflecting $1.5 billion of net charge-offs and a $113 million net reduction in the allowance for credit losses.
Net charge-offs increased $770 million, predominantly driven by Card Services in CCB, as the portfolio continues to normalize to pre-pandemic levels.
The net reduction in the allowance for credit losses of $113 million consisted of:
$184 million in wholesale, predominantly driven by the impact of changes in the loan and lending-related commitment portfolios in CIB, partially offset by the net effect of changes in the Firm's macroeconomic scenarios,
partially offset by
a net addition of $58 million in consumer, primarily driven by CCB, comprised of $301 million in Card Services, predominantly offset by a $250 million net reduction in Home Lending. The net addition in Card Services was driven by loan growth, including an increase in revolving balances, largely offset by changes in the Firm's macroeconomic outlook including a lower forecasted unemployment rate, and reduced borrower uncertainty. The net reduction in Home Lending was driven by improvements in the outlook for home prices.
The prior year included an $808 million net addition to the allowance for credit losses and net charge-offs of $727 million.
Refer to CCB segment results on pages 24-28, CIB on pages 29-35, CB on pages 36-39, AWM on pages 40-44, Corporate on pages 45-46; Allowance for Credit Losses on pages 80-82; Notes 10 and 13 for additional information on the credit portfolio and the allowance for credit losses; and Business Segment Results on page 23 for additional information on First Republic.
Year-to-date results
The provision for credit losses was $6.6 billion, reflecting $4.0 billion of net charge-offs and a $2.5 billion net addition to the allowance for credit losses.
Net charge-offs increased $2.1 billion, primarily driven by Card Services in CCB, as the portfolio continues to normalize to pre-pandemic levels.
The net addition to the allowance for credit losses consisted of:
$707 million in consumer, predominantly driven by CCB, comprised of $801 million in Card Services, partially offset by a $200 million net reduction 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 and the net effect of changes in the Firm's weighted average macroeconomic outlook. The net reduction in Home Lending was largely driven by improvements in the outlook for home prices, and
$616 million in wholesale, driven by net downgrade activity, the net effect of changes in the Firm's weighted average macroeconomic outlook, including 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 in CIB in the third quarter of 2023.
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 prior year included a $2.1 billion net addition to the allowance for credit losses and net charge-offs of $2.0 billion.



13


Noninterest expense
(in millions)Three months ended September 30,Nine months ended September 30,
20232022Change20232022Change
Compensation expense(a)
$11,726 $10,539 11 %$34,618 $31,627 %
Noncompensation expense:
Occupancy1,197 1,162 3,382 3,425 (1)
Technology, communications and equipment(b)
2,386 2,366 6,837 7,102 (4)
Professional and outside services2,620 2,481 7,629 7,522 
Marketing1,126 1,017 11 3,293 2,818 17 
Other expense(c)
2,702 1,613 68 6,927 4,624 50 
Total noncompensation expense(d)
10,031 8,639 16 28,068 25,491 10 
Total noninterest expense
$21,757 $19,178 13 %$62,686 $57,118 10 %
(a)Includes the impact of 4,774 individuals associated with First Republic who became employees on July 2, 2023.
(b)Includes depreciation expense associated with auto operating lease assets.
(c)Included Firmwide legal expense of $665 million and $47 million for the three months ended September 30, 2023 and 2022, respectively, and $1.3 billion and $239 million for the nine months ended September 30, 2023 and 2022, respectively; as well as FDIC-related expense of $342 million and $209 million for the three months ended September 30, 2023 and 2022, respectively, and $997 million and $623 million for the nine months ended September 30, 2023 and 2022, respectively. Refer to Note 6 for additional information.
(d)Included the impact of First Republic of $424 million and $1.0 billion for the three and nine months ended September 30, 2023, respectively. The nine months ended September 30, 2023, included expenses recorded in the second quarter of 2023 associated with the First Republic individuals who were not employees of the Firm until July 2, 2023. Refer to Business Segment Results on page 23 for additional information.
Quarterly results
Compensation expense increased driven by:
additional headcount, primarily in front office and technology, as well as the impact of wage inflation, and
the impact of First Republic, largely in CCB.
Noncompensation expense increased as a result of:
the impact of First Republic in CCB and Corporate,
higher legal expense, predominantly in CIB,
higher investments in the businesses, including technology and marketing, and
higher other expense, including higher indirect tax expense in CIB and the increase in the FDIC assessment that was announced in October 2022,
partially offset by
lower depreciation expense on lower Auto lease assets.
Refer to Business Segment Results on page 23 for additional information on First Republic.
Year-to-date results
Compensation expense increased driven by:
additional headcount, primarily in front office and technology, as well as the impact of wage inflation,
the impact of First Republic in the third quarter of 2023, largely in CCB, and
higher revenue-related compensation in AWM and CCB, partially offset by a decline in CIB.
Noncompensation expense increased as a result of:
the impact of First Republic in Corporate and CCB,
higher investments in the business, including marketing and technology,
higher legal expense, predominantly in CIB and Corporate, and
higher other expense, including the increase in the FDIC assessment that was announced in October 2022, 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.
14


Income tax expense
(in millions)Three months ended September 30,Nine months ended September 30,
20232022Change20232022Change
Income before income tax expense$16,733 $12,001 39 %$50,286 $32,929 53 %
Income tax expense3,582 2,264 58 10,041 6,261 60 
Effective tax rate21.4 %18.9 %20.0 %19.0 %

Quarterly results
The effective tax rate increased predominantly driven by lower benefits associated with tax audit settlements and changes in the level and mix of income and expenses subject to U.S. federal and state and local taxes.
Year-to-date results
The effective tax rate increased driven by:
the higher level of pre-tax income and changes in the mix of income and expenses subject to U.S. federal and state and local taxes and lower benefits associated with tax audit settlements and vesting of employee stock based awards,
partially 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.






15


CONSOLIDATED BALANCE SHEETS AND CASH FLOWS ANALYSIS
Consolidated balance sheets analysis
The following is a discussion of the significant changes between September 30, 2023 and December 31, 2022.
Selected Consolidated balance sheets data
(in millions)September 30,
2023
December 31,
2022
Change
Assets
Cash and due from banks$24,921 $27,697 (10)%
Deposits with banks486,448 539,537 (10)
Federal funds sold and securities purchased under resale agreements350,059 315,592 11 
Securities borrowed188,279 185,369 
Trading assets601,993 453,799 33 
Available-for-sale securities197,119 205,857 (4)
Held-to-maturity securities388,261 425,305 (9)
Investment securities, net of allowance for credit losses585,380 631,162 (7)
Loans1,310,059 1,135,647 15 
Allowance for loan losses(21,946)(19,726)11 
Loans, net of allowance for loan losses1,288,113 1,115,921 15 
Accrued interest and accounts receivable127,752 125,189 
Premises and equipment29,677 27,734 
Goodwill, MSRs and other intangible assets64,910 60,859 
Other assets150,801 182,884 (18)
Total assets$3,898,333 $3,665,743 %
Cash and due from banks and deposits with banks decreased primarily as a result of First Republic, which included the impact of the repayment of deposits provided to First Republic Bank in March 2023 by the consortium of large U.S. banks and amounts paid to the FDIC, as well as loan growth. Deposits with banks reflect the Firm’s placement of its excess cash with various central banks, including the Federal Reserve Banks.
Federal funds sold and securities purchased under resale agreements increased driven by Markets, reflecting higher demand for securities to cover short positions and higher collateral requirements, partially offset by a decrease in client-driven market-making activities, net of the lower level of netting.
Refer to Note 11 for additional information on securities purchased under resale agreements and securities borrowed.
Trading assets increased predominantly driven by CIB due to higher levels of debt and equity instruments in Markets, in response to demand from client-driven market-making activities, and when compared with the seasonally lower levels at year-end. The increase was also attributable to the impact of higher short-term cash deployment activities in Treasury and CIO as a result of the current interest rate environment. 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, partially offset by net purchases, the impact of First Republic, 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 45-46,
Investment Portfolio Risk Management on page 83, and Notes 2 and 10 for additional information.
Loans increased, reflecting:
$147 billion of loans associated with First Republic, primarily reflected in CCB, CB and AWM.
The increase also included:
growth in new accounts and revolving balances in Card Services, as the portfolio continues to normalize to pre-pandemic levels,
higher revolver utilization and originations in CB, and
growth in Auto loans.
The allowance for loan losses increased, reflecting:
a net addition to the allowance for loan losses of $1.7 billion, consisting of:
$1.0 billion in wholesale, driven by net downgrade activity and the net effect of changes in the Firm's weighted average macroeconomic outlook, including deterioration in the outlook for commercial real estate in CB, partially offset by the impact of changes in the loan portfolio in CIB in the third quarter of 2023, and
$725 million in consumer, predominantly driven by CCB, comprised of $801 million in Card Services, partially offset by a $200 million net reduction 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 and the net effect of changes in the Firm's weighted average macroeconomic outlook. The net reduction in Home Lending was largely driven by improvements in the outlook for home prices, 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
16


$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-Q to "changes to the TDR accounting guidance" pertain to the Firm's adoption of this guidance.
There was also a $308 million net reduction in the allowance for lending-related commitments recognized in other liabilities on the Consolidated balance sheets.
Refer to Credit and Investment Risk Management on pages 62-83, 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 23 and Note 28 for additional information on the First Republic acquisition.
Accrued interest and accounts receivable increased as a result of receivables associated with U.S. Treasuries that matured in Treasury and CIO, and higher receivables related
to unsettled trades, predominantly offset by lower client receivables related to client-driven activities in Markets.
Goodwill, MSRs and other intangible assets increased predominantly due to:
the other intangibles and goodwill related to the Firm's 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 28 for additional information.
Other assets decreased reflecting the impact of the change in the type of collateral placed with central counterparties ("CCPs") from cash to securities.
Selected Consolidated balance sheets data (continued)
(in millions)September 30,
2023
December 31,
2022
Change
Liabilities
Deposits$2,379,526 $2,340,179 %
Federal funds purchased and securities loaned or sold under repurchase agreements268,750 202,613 33 
Short-term borrowings45,470 44,027 
Trading liabilities207,457 177,976 17 
Accounts payable and other liabilities292,070 300,141 (3)
Beneficial interests issued by consolidated variable interest entities (“VIEs”)24,896 12,610 97 
Long-term debt362,793 295,865 23 
Total liabilities3,580,962 3,373,411 
Stockholders’ equity317,371 292,332 
Total liabilities and stockholders’ equity$3,898,333 $3,665,743 %
Deposits increased, reflecting:
• net issuances of structured notes in CIB as a result of client demand, as well as deposit inflows related to client-driven activities in Securities Services and Payments,
• an increase in Corporate related to the Firm's international consumer initiatives,
• a net increase in CCB due to $64 billion of deposits associated with First Republic, predominantly offset by a net reduction reflecting higher customer spending in existing accounts,
•     a net decrease in AWM from continued migration into higher-yielding investments as a result of the rising interest rate environment, partially offset by growth from new and existing customers resulting from new offerings, and
•     continued deposit attrition in CB driven by higher rates and seasonal outflows, partially offset by the retention of inflows associated with disruptions in the market in the first quarter of 2023.
Federal funds purchased and securities loaned or sold under repurchase agreements increased due to higher secured financing of trading assets and the impact of a lower level of netting on client-driven market-making activities in Markets.
Refer to Liquidity Risk Management on pages 54-61 for additional information on deposits, federal funds purchased and securities loaned or sold under repurchase agreements, and short-term borrowings; Notes 2 and 16 for deposits and Note 11 for federal funds purchased and securities loaned or
sold under repurchase agreements; Business Segment Results on page 23 and Note 28 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.
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 54-61 and Notes 14 and 24 for additional information, specifically 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, as well as FHLB advances, partially offset by maturities and redemptions in Treasury and CIO. Refer to Liquidity Risk Management on pages 54-61; and Note 28 for additional information on the First Republic acquisition.
Stockholders’ equity: refer to Consolidated statements of changes in stockholders’ equity on page 99, Capital Actions on page 52, and Note 21 for additional information.
17


Consolidated cash flows analysis
The following is a discussion of cash flow activities during the nine months ended September 30, 2023 and 2022.
(in millions)Nine months ended September 30,
20232022
Net cash provided by/(used in)
Operating activities$(47,257)$5,897 
Investing activities(12,239)(86,289)
Financing activities
10,326 16,087 
Effect of exchange rate changes on cash(6,695)(32,342)
Net decrease in cash and due from banks and deposits with banks
$(55,865)$(96,647)
Operating activities
In 2023, cash used resulted from higher trading assets and lower accounts payable and other liabilities, partially offset by lower other assets and higher trading liabilities.
In 2022, cash provided reflected higher accounts payable and other liabilities, trading liabilities, and net proceeds from loans held-for-sale, predominantly offset by higher trading assets.
Investing activities
In 2023, cash used resulted from higher securities purchased under resale agreements, higher net loan originations, and net cash used in the First Republic acquisition, predominantly offset by proceeds from paydowns and maturities of investment securities and from sales and securitizations of loans held-for-investment.
In 2022, cash used resulted from net loan originations and higher securities purchased under resale agreements, partially offset by net proceeds of investment securities.
Financing activities
In 2023, cash provided reflected higher securities loaned or sold under repurchase agreements and higher beneficial interests issued by consolidated VIEs, largely offset by net outflows in 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.
In 2022, cash provided reflected higher securities loaned or sold under repurchase agreements and net proceeds from long- and short-term borrowings, largely offset by lower deposits.
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 16-18, Capital Risk Management on pages 48-53, and Liquidity Risk Management on pages 54-61, and the Consolidated Statements of Cash Flows on page 100 of this Form 10-Q, and pages 97-104 of JPMorgan Chase’s 2022 Form 10-K for a further discussion of the activities affecting the Firm’s cash flows.

18


EXPLANATION AND RECONCILIATION OF THE FIRM’S USE OF NON-GAAP FINANCIAL MEASURES
The Firm prepares its Consolidated Financial Statements in accordance with U.S. GAAP and this presentation is referred to as “reported” basis; these financial statements appear on pages 96-100.
In addition to analyzing the Firm’s results on a reported basis, the Firm also reviews and uses certain non-GAAP financial measures at the Firmwide and segment level. These non-GAAP measures include:
Firmwide “managed” basis results, including the overhead ratio, which include certain reclassifications to present total net revenue from investments that receive tax credits and tax-exempt securities on a basis comparable to taxable investments and securities (“FTE” basis);

Pre-provision profit, which represents total net revenue less total noninterest expense;
Net interest income, net yield, and noninterest revenue excluding Markets;
TCE, ROTCE, and TBVPS;
Adjusted expense, which represents noninterest expense excluding Firmwide legal expense; and
Allowance for loan losses to period-end loans retained, excluding trade finance and conduits.
Refer to Explanation and Reconciliation of the Firm’s Use Of Non-GAAP Financial Measures and Key Performance Measures on pages 58-60 of JPMorgan Chase’s 2022 Form 10-K for a further discussion of management’s use of non-GAAP financial measures.
The following summary tables provide a reconciliation from the Firm’s reported U.S. GAAP results to managed basis.
Three months ended September 30,
20232022
(in millions, except ratios)Reported
Fully taxable-equivalent adjustments(a)
Managed
basis
Reported
Fully taxable-equivalent adjustments(a)
Managed
basis
Other income$614 $682 $1,296 $900 $663 $1,563 
Total noninterest revenue17,148 682 17,830 15,198 663 15,861 
Net interest income22,726 130 22,856 17,518 112 17,630 
Total net revenue39,874 812 40,686 32,716 775 33,491 
Total noninterest expense21,757 NA21,757 19,178 NA19,178 
Pre-provision profit18,117 812 18,929 13,538 775 14,313 
Provision for credit losses1,384 NA1,384 1,537 NA1,537 
Income before income tax expense16,733 812 17,545 12,001 775 12,776 
Income tax expense3,582 812 4,394 2,264 775 3,039 
Net income$13,151 NA$13,151 $9,737 NA$9,737 
Overhead ratio55 %NM53 %59 %NM57 %
Nine months ended September 30,
20232022
(in millions, except ratios)Reported
Fully taxable-equivalent adjustments(a)
Managed
basis
Reported
Fully taxable-equivalent adjustments(a)
Managed
basis
Other income$4,913 $2,539 $7,452 $2,930 $2,250 $5,180 
Total noninterest revenue54,314 2,539 56,853 47,630 2,250 49,880 
Net interest income65,216 354 65,570 46,518 313 46,831 
Total net revenue119,530 2,893 122,423 94,148 2,563 96,711 
Total noninterest expense62,686 NA62,686 57,118 NA57,118 
Pre-provision profit56,844 2,893 59,737 37,030 2,563 39,593 
Provision for credit losses6,558 NA6,558 4,101 NA4,101 
Income before income tax expense50,286 2,893 53,179 32,929 2,563 35,492 
Income tax expense10,041 2,893 12,934 6,261 2,563 8,824 
Net Income$40,245 NA$40,245 $26,668 NA$26,668 
Overhead ratio52 %NM51 %61 %NM59 %
(a)Predominantly recognized in CIB, CB and Corporate.



19


The following table provides information on net interest income, net yield, and noninterest revenue excluding Markets.

(in millions, except rates)
Three months ended September 30,Nine months ended September 30,
20232022Change20232022Change
Net interest income – reported $22,726 $17,518 30 %$65,216 $46,518 40 %
Fully taxable-equivalent adjustments
130 112 16 354 313 13 
Net interest income – managed basis(a)
$22,856 $17,630 30 $65,570 $46,831 40 
Less: Markets net interest income(b)
(317)707 NM(909)4,474 NM
Net interest income excluding Markets(a)
$23,173 $16,923 37 $66,479 $42,357 57 
Average interest-earning assets$3,331,728 $3,344,949 — $3,297,843 $3,377,390 (2)
Less: Average Markets interest-earning assets(b)
970,789 952,488 985,703 957,837 
Average interest-earning assets excluding Markets$2,360,939 $2,392,461 (1)$2,312,140 $2,419,553 (4)
Net yield on average interest-earning assets – managed basis2.72 %2.09 %2.66 %1.85 %
Net yield on average Markets interest-earning assets(b)
(0.13)0.29 (0.12)0.62 
Net yield on average interest-earning assets excluding Markets3.89 %2.81 %3.84 %2.34 %
Noninterest revenue – reported$17,148 $15,198 13 $54,314 $47,630 14 
Fully taxable-equivalent adjustments682 663 32,539 2,250 13 
Noninterest revenue – managed basis$17,830 $15,861 12$56,853 $49,880 14 
Less: Markets noninterest revenue(b)
6,898 6,064 1422,890 18,840 21 
Noninterest revenue excluding Markets$10,932 $9,797 12$33,963 $31,040 9
Memo: Total Markets net revenue(b)
$6,581 $6,771 (3)$21,981 $23,314 (6)
(a)Interest includes the effect of related hedges. Taxable-equivalent amounts are used where applicable.
(b)Refer to page 34 for further information on Markets.
The following summary table provides a reconciliation from the Firm’s common stockholders’ equity to TCE.
Period-endAverage
(in millions, except per share and ratio data)Sep 30,
2023
Dec 31,
2022
Three months ended September 30,Nine months ended September 30,
2023202220232022
Common stockholders’ equity
$289,967 $264,928 $284,798 $252,944 $278,010 $251,147 
Less: Goodwill52,492 51,662 52,427 51,323 52,164 50,739 
Less: Other intangible assets
3,309 1,224 3,511 1,208 2,342 1,076 
Add: Certain deferred tax liabilities(a)
3,025 2,510 3,080 2,512 2,846 2,504 
Tangible common equity$237,191 $214,552 $231,940 $202,925 $226,350 $201,836 
Return on tangible common equityNANA22 %18 %23 %17 %
Tangible book value per share$82.04 $73.12 NANANANA
(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.
20


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 currently 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 19-20 for a definition of managed basis.
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 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.
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 risk 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.

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 pages 84-89 for additional information.
Capital allocation
The amount of capital assigned to each business segment is referred to as equity. 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 51, and page 93 of JPMorgan Chase’s 2022 Form 10-K for additional information on capital allocation.
Refer to Business Segment Results – Description of business segment reporting methodology on pages 61-62 and Note 32 of JPMorgan Chase’s 2022 Form 10-K for a further discussion of those methodologies.

21


Segment results – managed basis
The following tables summarize the Firm’s results by segment for the periods indicated.
Three months ended September 30,Consumer & Community BankingCorporate & Investment BankCommercial Banking
(in millions, except ratios)20232022Change20232022Change20232022Change
Total net revenue$18,362 $14,281 
(a)
29 %$11,730 $11,925 
(a)
(2)%$4,031 $3,048 32 %
Total noninterest expense9,105 7,983 
(a)
147,443 6,682 
(a)
111,375 1,180 17
Pre-provision profit/(loss)9,257 6,298 474,287 5,243 (18)2,656 1,868 42
Provision for credit losses1,446 529 173(185)513 NM90 618 (85)
Net income/(loss)5,895 4,344 
(a)
363,092 3,522 
(a)
(12)1,935 946 105
Return on equity (“ROE”)41 %34 %

11 %13 %25 %14 %
Three months ended September 30,Asset & Wealth ManagementCorporateTotal
(in millions, except ratios)20232022Change20232022Change20232022Change
Total net revenue$5,005 $4,539 10 %$1,558$(302)NM$40,686 $33,491 21 %
Total noninterest expense3,138 3,028 469630512821,757 19,178 13
Pre-provision profit/(loss)1,867 1,511 24862(607)NM18,929 14,313 32
Provision for credit losses(13)(102)8746(21)NM1,384 1,537 (10)
Net income/(loss)1,417 1,219 16812(294)NM13,151 9,737 35
ROE32 %28 %NMNM18 %15 %
Nine months ended September 30,Consumer & Community BankingCorporate & Investment BankCommercial Banking
(in millions, except ratios)20232022Change20232022Change20232022Change
Total net revenue$52,051 $39,021 
(a)
33 %$37,849 $37,504 
(a)
%$11,530 $8,129 42 %
Total noninterest expense25,483 23,296 
(a)
21,820 20,855 
(a)
53,983 3,465 15 
Pre-provision profit/(loss)26,568 15,725 69 16,029 16,649 (4)7,547 4,664 62 
Provision for credit losses4,710 1,968 139 (89)1,017 NM1,604 984 63 
Net income/(loss)16,444 10,360 
(a)
59 11,605 11,611 
(a)
4,490 2,790 61 
ROE40 %27 %14 %14 %20 %14 %
Nine months ended September 30,Asset & Wealth ManagementCorporateTotal
(in millions, except ratios)20232022Change20232022Change20232022Change
Total net revenue$14,732 $13,160 12 %$6,261$(1,103)NM$122,423 $96,711 27 %
Total noninterest expense9,392 8,807 2,00869518962,686 57,118 10 
Pre-provision profit/(loss)5,340 4,353 23 4,253(1,798)NM59,737 39,593 51 
Provision for credit losses160 96 67 173363816,558 4,101 60 
Net income/(loss)4,010 3,231 24 3,696(1,324)NM40,245 26,668 51 
ROE32 %25 %NMNM19 %14 %
(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.
22


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
September 30,
2023
September 30,
2022
Client assets (in billions)(a)
$2,929 
(b)
$2,302 
Number of client advisors8,867 8,127 
(a)    Consists of Global Private Bank in AWM and client investment assets in J.P. Morgan Wealth Management in CCB.
(b)At September 30, 2023, included $140.6 billion of client investment assets associated with First Republic.

Selected metrics - J.P. Morgan Payments
(in millions, except where otherwise noted)Three months ended September 30,Nine months ended September 30,
2023202220232022
Total net revenue(a)
$4,504 $3,762 $13,691 $9,487 
Merchant processing volume
(in billions)
610.1 545.4 1,769.0 1,575.2 
Average deposits (in billions)702 748 710 794 
(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.
As of or for the three months ended September 30, 2023
(in millions)Consumer & Community BankingCommercial BankingAsset & Wealth ManagementCorporateTotal
Selected Income Statement Data
Revenue
Asset management fees$142 $ $ $ $142 
All other income191 144 203 81 
(a)
619 
Noninterest revenue333 144 203 81 761 
Net interest income1,022 222 233 (3)1,474 
Total net revenue1,355 366 436 78 2,235 
Provision for credit losses(2)26 (31) (7)
Noninterest expense583 18 17 240 858 
Net income589 245 342 (99)1,077 
Selected Balance Sheet Data (period-end)
Loans$94,333 $38,729 $12,026 $ $145,088 
(b)
Deposits63,945    63,945 
As of or for the nine months ended September 30, 2023
(in millions)Consumer & Community BankingCommercial BankingAsset & Wealth ManagementCorporateTotal
Selected Income Statement Data
Revenue
Asset management fees$249 $ $ $ $249 
All other income296 144 377 2,843 
(a)
3,660 
Noninterest revenue545 144 377 2,843 3,909 
Net interest income1,641 400 362 (32)2,371 
Total net revenue2,186 544 739 2,811 6,280 
Provision for credit losses406 634 115  1,155 
Noninterest expense620 18 17 802 1,457 
Net income882 (82)461 2,202 3,463 
Selected Balance Sheet Data (period-end)
Loans$94,333 $38,729 $12,026 $ $145,088 
(b)
Deposits63,945    63,945 
(a)Included the preliminary estimated bargain purchase gain of $2.7 billion recorded in other income. For the three months ended September 30, 2023, reflects measurement period adjustments of $100 million, increasing the estimated bargain purchase gain to $2.8 billion for the nine months ended September 30, 2023. Refer to Note 28 for additional information.
(b)Excluded $1.9 billion of loans transferred to the CIB as part of the First Republic acquisition.
The following sections provide a comparative discussion of the Firm’s results by segment as of or for the three and nine months ended September 30, 2023 and 2022, unless otherwise specified.
23


CONSUMER & COMMUNITY BANKING
Refer to pages 63-66 of JPMorgan Chase's 2022 Form 10-K and Line of Business Metrics on page 206 for a further discussion of the business profile of CCB.
Selected income statement data
Three months ended September 30,Nine months ended September 30,
(in millions, except ratios)
20232022Change20232022Change
Revenue
Lending- and deposit-related fees$836 $822 %$2,500 $2,482 %
Asset management fees891 
(d)
662 

352,383 
(d)
2,072 15
Mortgage fees and related income417 313 33914 1,146 (20)
Card income626 613 
(f)
1,848 1,775 
(f)
All other income(a)
1,212 
(d)
1,302 
(f)
(7)3,503 
(d)
3,942 
(f)
(11)
Noninterest revenue3,982 3,712 11,148 11,417 (2)
Net interest income14,380 
(d)
10,569 3640,903 
(d)
27,604 48 
Total net revenue18,362 14,281 2952,051 39,021 33 
Provision for credit losses1,446 
(d)
529 1734,710 
(d)
1,968 139 
Noninterest expense
Compensation expense3,975 3,345 1911,148 9,753 14 
Noncompensation expense(b)
5,130 4,638 
(f)
1114,335 13,543 
(f)
Total noninterest expense9,105 
(d)
7,983 1425,483 
(d)
23,296 
Income before income tax expense7,811 5,769 3521,858 13,757 59 
Income tax expense1,916 1,425 
(f)
345,414 3,397 
(f)
59 
Net income$5,895 $4,344 36$16,444 $10,360 59 
Revenue by line of business
Banking & Wealth Management$11,345 
(e)
$7,960 
(f)
43$32,322 
(e)
$20,477 
(f)
58 
Home Lending1,252 
(e)
920 362,979 
(e)
3,090 (4)
Card Services & Auto5,765 5,401 716,750 15,454 
Mortgage fees and related income details:
Production revenue162 93 74339 454 (25)
Net mortgage servicing revenue(c)
255 220 16575 692 (17)
Mortgage fees and related income
$417 $313 33%$914 $1,146 (20)%
Financial ratios
Return on equity41 %34 %
(f)
40 %27 %
Overhead ratio50 56 49 60 
(a)Primarily includes operating lease income and commissions and other fees. For the three months ended September 30, 2023 and 2022, operating lease income was $685 million and $854 million, respectively, and $2.1 billion and $2.8 billion for the nine months ended September 30, 2023 and 2022, respectively.
(b)Included depreciation expense on leased assets of $458 million and $605 million for the three months ended September 30, 2023 and 2022, respectively, and $1.3 billion and $2.0 billion for the nine months ended September 30, 2023 and 2022, respectively.
(c)Included MSR risk management results of $111 million and $54 million for the three months ended September 30, 2023 and 2022, respectively, and $124 million and $191 million for the nine months ended September 30, 2023 and 2022, respectively.
(d)Includes First Republic. Refer to page 23 for additional information.
(e)Banking & Wealth Management and Home Lending included revenue associated with First Republic of $1.0 billion and $351 million, respectively, for the three months ended September 30, 2023, and $1.6 billion and $586 million, respectively, for the nine months ended September 30, 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.
24


Quarterly results
Net income was $5.9 billion, up 36%.
Net revenue was $18.4 billion, up 29%.
Net interest income was $14.4 billion, up 36%, driven by:
deposit margin expansion on higher rates, partially offset by lower average deposits in Banking & Wealth Management ("BWM"), and
higher NII driven by increased revolving balances in Card Services, as well as the impact of First Republic in Home Lending.
Noninterest revenue was $4.0 billion, up 7%, driven by:
the impact of First Republic in BWM, largely asset management fees, and
higher mortgage fees and related income in Home Lending,
partially offset by
lower auto operating lease income as a result of a decline in volume.
Card income was up 2%, reflecting higher net interchange from the impact of an increase in debit and credit card sales volume, and higher annual fees, predominantly offset by higher amortization related to new account origination costs.
Refer to Note 6 for additional information on card income, asset management fees, and commissions and other fees; and Critical Accounting Estimates on pages 91-93 for card income.
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 28 for additional information on the First Republic acquisition.
Noninterest expense was $9.1 billion, up 14%, reflecting:
higher compensation expense, predominantly driven by an increase in headcount and wage inflation, including the impact of First Republic, and
higher noncompensation expense, largely driven by the impact of First Republic including technology spend and the amortization of intangibles. The increase in noncompensation expense also reflects additional investments in technology and marketing, as well as the FDIC assessment increase announced in the prior year, largely offset by lower auto lease depreciation on lower auto lease assets.
The provision for credit losses was $1.4 billion, reflecting:
net charge-offs of $1.4 billion, up $720 million, predominantly driven by Card Services, as the portfolio continues to normalize to pre-pandemic levels, and
a $47 million net addition to the allowance for credit losses driven by $301 million in Card Services, predominantly offset by a $250 million net reduction in Home Lending. The net addition in Card Services was driven by loan growth, including an increase in revolving balances, largely offset by changes in the Firm's
macroeconomic outlook including a lower forecasted unemployment rate and reduced borrower uncertainty. The net reduction in Home Lending was driven by improvements in the outlook for home prices.
The prior year included a $150 million reduction in the allowance for credit losses across CCB.
Refer to Credit and Investment Risk Management on pages 62-83 and Allowance for Credit Losses on pages 80-82 for a further discussion of the credit portfolios and the allowance for credit losses.
Year-to-date results
Net income was $16.4 billion, up 59%.
Net revenue was $52.1 billion, up 33%.
Net interest income was $40.9 billion, up 48%, driven by:
deposit margin expansion on higher rates, partially offset by lower average deposits and the impact of lower PPP loan forgiveness in BWM, and
higher NII driven by increased revolving balances in Card Services, as well as the impact of First Republic in Home Lending.
Noninterest revenue was $11.1 billion, down 2%, driven by:
lower auto operating lease income as a result of a decline in volume, and
in Home Lending, lower production revenue from a decline in volume and lower net mortgage servicing revenue driven by lower net gains on MSR risk management and lower operating revenue,
largely offset by
the impact of First Republic in BWM, largely asset management fees, and
higher travel-related commissions in Card Services.
Card income was up 4%, reflecting
higher net interchange from the impact of an increase in debit and credit card sales volume, and a reduction in rewards costs and partner payments in the first quarter of 2023 related to a periodic tax refund on airline miles redeemed, largely offset by an increase to the rewards liability due to adjustments to certain reward program terms in the second quarter of 2023, and
lower other card income driven by higher amortization related to new account origination costs, predominantly offset by higher annual fees.
Noninterest expense was $25.5 billion, up 9%, reflecting:
higher compensation expense, driven by an increase in headcount and wage inflation, including the impact of First Republic in the third quarter of 2023, and higher revenue-related compensation, and
higher noncompensation expense, driven by the impact of First Republic, investments in marketing and technology, as well as the FDIC assessment increase announced in the prior year, largely offset by lower auto lease depreciation on lower auto lease assets.
25


The provision for credit losses was $4.7 billion, reflecting:
net charge-offs of $3.7 billion, up $1.9 billion, predominantly driven by Card Services, as the portfolio continues to normalize to pre-pandemic levels, and
a $1.0 billion net addition to the allowance for credit losses, which included $801 million in Card Services, partially offset by a $200 million net reduction 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, and the net effect of changes in the Firm's weighted average macroeconomic outlook, including the updates to the
central scenario in the third quarter of 2023 and the impact of additional weight placed on the adverse scenarios in the first quarter of 2023. The net reduction in Home Lending was largely driven by improvements in the outlook for home prices.
The net addition also included $408 million to establish the allowance for the First Republic loans and lending-related commitments in the second quarter of 2023.
The prior year included a $125 million addition to the allowance for credit losses across CCB.
Selected metrics
As of or for the three months
ended September 30,
As of or for the nine months
ended September 30,
(in millions, except headcount)20232022Change20232022Change
Selected balance sheet data (period-end)
Total assets$626,196 $500,752 25 %$626,196 $500,752 25 %
Loans:
Banking & Wealth Management(a)
30,574 
(d)
30,230 30,574 
(d)
30,230 
Home Lending(b)
261,858 
(d)
174,618 50 261,858 
(d)
174,618 50 
Card Services196,955 170,462 16 196,955 170,462 16 
Auto 74,831 67,201 11 74,831 67,201 11 
Total loans564,218 442,511 28 564,218 442,511 28 
Deposits1,136,884 
(e)
1,173,241 (3)1,136,884 
(e)
1,173,241 (3)
Equity55,500 50,000 11 55,500 50,000 11 
Selected balance sheet data (average)
Total assets$622,760 $498,858 25$569,076 $494,704 15 
Loans:
Banking & Wealth Management30,686 
(f)
30,788 29,947 
(f)
32,264 (7)
Home Lending(c)
264,041 
(f)
176,852 49222,248 
(f)
176,891 26 
Card Services195,245 168,125 16187,629 158,721 18 
Auto 74,358 66,979 1171,416 68,258 
Total loans564,330 442,744 27511,240 436,134 17 
Deposits1,143,539 
(g)
1,174,227 (3)1,138,050 
(g)
1,169,474 (3)
Equity55,500 50,000 1153,962 50,000 8
Headcount141,125 133,803 %141,125 133,803 %
(a)At September 30, 2023 and 2022, included $129 million and $791 million of loans, respectively, in Business Banking under the PPP. Refer to Credit Portfolio on pages 108-109 of JPMorgan Chase's 2022 Form 10-K for a further discussion of the PPP.
(b)At both September 30, 2023 and 2022, Home Lending loans held-for-sale and loans at fair value were $4.1 billion.
(c)Average Home Lending loans held-for sale and loans at fair value were $5.7 billion and $5.9 billion for the three months ended September 30, 2023 and 2022, respectively, and $4.8 billion and $8.3 billion for the nine months ended September 30, 2023 and 2022, respectively.
(d)At September 30, 2023, included $3.1 billion and $91.2 billion for Banking & Wealth Management and Home Lending, respectively, associated with First Republic.
(e)Includes First Republic. Refer to page 23 for additional information.
(f)Average Banking & Wealth Management and Home Lending loans associated with First Republic were $3.2 billion and $91.1 billion, respectively, for the three months ended September 30, 2023, and $2.0 billion and $49.8 billion, respectively, for the nine months ended September 30, 2023.
(g)Included $66.7 billion and $38.2 billion associated with First Republic for the three and nine months ended September 30, 2023, respectively.













26


Selected metrics
As of or for the three months
ended September 30,
As of or for the nine months
ended September 30,
(in millions, except ratio data)20232022Change20232022Change
Credit data and quality statistics
Nonaccrual loans(a)(b)
$3,690 $3,936 (6)%$3,690 $3,936 (6)%
Net charge-offs/(recoveries)
Banking & Wealth Management88 105 (16)259 275 (6)
Home Lending(16)(59)73 (62)(196)68 
Card Services1,227 592 107 3,273 1,678 95 
Auto100 41 144 232 86 170 
Total net charge-offs/(recoveries)$1,399 $679 106 $3,702 $1,843 101 
Net charge-off/(recovery) rate
Banking & Wealth Management(c)
1.14 %1.35 %1.16 %1.14 %
Home Lending(0.02)(0.14)(0.04)(0.16)
Card Services2.49 1.40 2.33 1.41 
Auto0.53 0.24 0.43 0.17 
Total net charge-off/(recovery) rate0.99 %0.62 %0.98 %0.58 %
30+ day delinquency rate
Home Lending(d)(e)
0.59 %0.78 %0.59 %0.78 %
Card Services1.94 1.23 1.94 1.23 
Auto 1.13 0.75 1.13 0.75 
90+ day delinquency rate - Card Services0.94 %0.57 %0.94 %0.57 %
Allowance for loan losses
Banking & Wealth Management$686 $722 (5)$686 $722 (5)
Home Lending573 
(f)
667 (14)573 
(f)
667 (14)
Card Services11,901 10,400 14 11,901 10,400 14 
Auto 742 715 4742 715 4
Total allowance for loan losses$13,902 
(g)
$12,504 11 %$13,902 
(g)
$12,504 11 %
(a)At September 30, 2023 and 2022, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $123 million and $219 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 September 30, 2023 and 2022, generally excludes loans that were under payment deferral programs offered in response to the COVID-19 pandemic. Refer to Credit Portfolio on pages 108-109 of JPMorgan Chase's 2022 Form 10-K for further information on consumer assistance.
(c)At September 30, 2023 and 2022, included $129 million and $791 million 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. Refer to Credit Portfolio on pages 108-109 of JPMorgan Chase's 2022 Form 10-K for a further discussion of the PPP.
(d)At September 30, 2023 and 2022, the principal balance of loans under payment deferral programs offered in response to the COVID-19 pandemic was $89 million and $454 million in Home Lending, respectively. Loans that are performing according to their modified terms are generally not considered delinquent. Refer to Credit Portfolio on pages 108-109 of JPMorgan Chase's 2022 Form 10-K for further information on consumer assistance.
(e)At September 30, 2023 and 2022, excluded mortgage loans insured by U.S. government agencies of $175 million and $284 million, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee.
(f)At September 30, 2023, included $396 million allowance associated with 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.
27


Selected metrics
As of or for the three months
ended September 30,
As of or for the nine months
ended September 30,
(in billions, except ratios and where otherwise noted)
20232022Change20232022Change
Business Metrics
Number of branches4,863 4,802 1%4,863 4,802 1%
Active digital customers (in thousands)(a)
66,765 
(f)
61,985 866,765 
(f)
61,985 8
Active mobile customers (in thousands)(b)
53,221 
(f)
48,904 953,221 
(f)
48,904 9
Debit and credit card sales volume
$426.3 $395.8 8$1,237.6 $1,144.3 8
Total payments transaction volume (in trillions)(c)
1.5 
(f)
1.4 74.4 
(f)
4.2 5
Banking & Wealth Management
Average deposits
$1,127.8 
(g)
$1,156.9 (3)$1,123.1 
(g)
$1,152.2 (3)
Deposit margin
2.92 %1.83 %2.84 %1.46 %
Business Banking average loans$19.5 $21.3 (8)$19.7 $22.9 (14)
Business banking origination volume1.3 1.0 353.6 3.2 13
Client investment assets(d)
882.3 615.0 43882.3 615.0 43
Number of client advisors5,424 5,017 85,424 5,017 8
Home Lending
Mortgage origination volume by channel
Retail
$6.8 
(h)
$7.8 (13)$17.7 
(h)
$33.9 (48)
Correspondent
4.2 4.3 (2)10.2 24.8 (59)
Total mortgage origination volume(e)
$11.0 $12.1 (9)$27.9 $58.7 (52)
Third-party mortgage loans serviced (period-end)
$637.8 $586.7 9637.8 $586.7 9
MSR carrying value (period-end)
9.1 8.1 129.1 8.1 12
Card Services
Sales volume, excluding commercial card$296.2 $272.3 9$856.4 $779.9 10
Net revenue rate9.60 %9.92 %9.69 %9.79 %
Net yield on average loans9.54 9.81 9.58 9.76 
Auto
Loan and lease origination volume
$10.2 $7.5 36$31.4 $22.9 37
Average auto operating lease assets
10.7 13.5 (21)%11.1 14.9 (26)%
(a)Users of all web and/or mobile platforms who have logged in within the past 90 days.
(b)Users of all mobile platforms who have logged in within the past 90 days.
(c)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.
(d)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 40-44 for additional information. At September 30, 2023, included $140.6 billion of client investment assets associated with First Republic.
(e)Firmwide mortgage origination volume was $13.0 billion and $15.2 billion for the three months ended September 30, 2023 and 2022, respectively, and $32.8 billion and $73.3 billion for the nine months ended September 30, 2023 and 2022, respectively.
(f)Excludes First Republic.
(g)Included $66.7 billion and $38.2 billion for the three and nine months ended September 30, 2023, respectively, associated with First Republic.
(h)Included $730 million and $1.9 billion for the three and nine months ended September 30, 2023, respectively, associated with First Republic.
28


CORPORATE & INVESTMENT BANK
Refer to pages 67-72 of JPMorgan Chase’s 2022 Form 10-K and Line of Business Metrics on page 206 for a further discussion of the business profile of CIB.
Selected income statement data
Three months ended September 30,Nine months ended September 30,
(in millions, except ratios)20232022Change20232022Change
Revenue
Investment banking fees (a)
$1,717 $1,762 (3)%$4,928 $5,462 (10)%
Principal transactions5,918 5,258 1320,023 15,529 29
Lending- and deposit-related fees556 589 (6)1,628 1,871 (13)
Commissions and other fees1,174 1,198 (2)3,627 3,858 (6)
Card income374 293 
(c)
281,089 896 
(c)
22
All other income131 181 
(c)
(28)900 474 
(c)
90
Noninterest revenue9,870 9,281 632,195 28,090 15
Net interest income1,860 2,644 (30)5,654 9,414 (40)
Total net revenue(b)
11,730 11,925 (2)37,849 37,504 1
Provision for credit losses(185)513 NM(89)1,017 NM
Noninterest expense
Compensation expense3,425 3,311 310,971 10,827 1
Noncompensation expense4,018 3,371 
(c)
1910,849 10,028 
(c)
8
Total noninterest expense7,443 6,682 1121,820 20,855 5
Income before income tax expense
4,472 4,730 (5)16,118 15,632 3
Income tax expense1,380 1,208 
(c)
144,513 4,021 
(c)
12
Net income$3,092 $3,522 (12)%$11,605 $11,611 —%
Financial ratios
Return on equity11 %13 %14 %14 %
Overhead ratio63 56 58 56 
(c)
Compensation expense as percentage of total net revenue
29 28 29 29 
(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 $643 million and $626 million for the three months ended September 30, 2023 and 2022, respectively and $2.4 billion and $2.1 billion for the nine months ended September 30, 2023 and 2022, 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.
Selected income statement data
Three months ended September 30,Nine months ended September 30,
(in millions)20232022Change20232022Change
Revenue by business
Investment Banking
$1,613 $1,713 (6)%$4,667 $5,121 (9)%
Payments2,094 2,039 
(b)
6,941 5,459 
(b)
27 
Lending291 323 (10)857 1,054 (19)
Total Banking3,998 4,075 (2)12,465 11,634 
Fixed Income Markets4,514 4,469 14,780 14,878 (1)
Equity Markets2,067 2,302 (10)7,201