JPM JPMorgan Chase & Co. · Q1 2025 Earnings Call

April 11, 2025

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Operator: Good morning, ladies and gentlemen. Welcome to JPMorganChase's First-Quarter 2025 Earnings Call. This call is being recorded.

Your line will be muted for the duration of the call. We will now go live to the presentation. The presentation is available on JPMorganChase's

website. Please refer to the disclaimer in the back concerning forward-looking statements. Please stand by.

At this time, I would like to turn the call over to JPMorganChase's Chairman and CEO, Jamie Dimon, and the Chief Financial Officer, Jeremy

Barnum. Mr. Barnum, please go ahead.

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Thank you and good morning, everyone. Starting on page 1, the Firm reported net income of $14.6 billion, EPS of $5.07 on revenue of $46

billion, with an ROTCE of 21%. These results included a First Republic-related gain of $588 million, which was previously disclosed in the 10-K.

On page 2, we have more on our first-quarter results. The Firm reported revenue of $46 billion, up $3.5 billion, or 8% year-on-year. NII ex.

Markets was down $430 million, or 2%, driven by the impact of lower rates and deposit margin compression, as well as lower deposit balances

in CCB. This was predominantly offset by higher Card revolving balances, the impact of securities activity, including from prior quarters, as well

as higher wholesale deposits. NIR ex. Markets was up $2.2 billion, or 20%, and excluding the significant item I just mentioned, was up 14%,

largely on higher asset management fees, lower net investment securities losses and higher investment banking fees. And Markets revenue

was up $1.7 billion, or 21%.

Expenses of $23.6 billion were up $840 million, or 4%, largely driven by compensation, including growth in employees across the front office

and technology, higher brokerage and distribution fees, as well as marketing and legal expense.

The quarter also reflected a $323 million release of the FDIC special assessment accrual compared with a $725 million increase in the prior

quarter. Credit costs were $3.3 billion, with net charge-offs of $2.3 billion and a net reserve build of $973 million. We have more details on the

reserve build on page 3. With this quarter's reserve build, the Firm’s total allowance for credit losses is $27.6 billion.

Let's take a second to add a little bit of context to our thinking surrounding this number in light of the unique environment of the last several

weeks. Our first quarter allowance is anchored on the relatively benign central case economic outlook, which was in effect at the end of the

quarter. But, in light of the significantly elevated risks and uncertainties at the time, we increased the probability weightings associated with

the downside scenarios in our CECL framework. As a result, the weighted-average unemployment rate embedded in our allowance is 5.8%, up

from 5.5% last quarter, driving the $973 million increase in the allowance.

So with that in mind, the consumer build of $441 million was driven by changes in the weighted-average macroeconomic outlook. The

wholesale build of $549 million was predominantly driven by credit quality changes on certain exposures and net lending activity, as well as

changes in the outlook. In addition, it's important to note that the increase in the allowance is not, to any meaningful degree, driven by

deterioration in the actual credit performance in the portfolio, which remains largely in line with expectations.

With that, let's go to the balance sheet and capital on page 4. We ended the quarter with a CET1 ratio of 15.4%, down 30 basis points versus the

prior quarter as net income and OCI gains were more than offset by capital distributions and higher RWA. This quarter, the Firm distributed $11

billion of capital to shareholders, which reflects $7.1 billion of net common share repurchases and the payment of our common dividend, which

has been increased to $1.40 per share. This quarter's higher RWA is primarily driven by overall business growth in Markets and some seasonal

effects.

Now let's go to our businesses, starting with CCB on page 5. Consumers and small businesses remain financially healthy. Despite the recent

downtrends in consumer and small business sentiment, based on our data, spend, cash buffers, payment to income ratios, and credit

utilization are all in line with our expectations.

Moving to the financial results, CCB reported net income of $4.4 billion on revenue of $18.3 billion, which was up 4% year-on-year. In Banking &

Wealth Management, revenue was down 1% year-on-year, driven by lower deposit NII, predominantly offset by growth in Wealth Management

revenue. Average deposits were down 2% year-on-year and flat sequentially, while end of period deposits were up 2% quarter-on-quarter.

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Client investment assets were up 7% year-on-year, predominantly driven by market performance, and we continue to see strong flows into

managed products.

In Home Lending, revenue was up 2% year-on-year and originations were up 42% year-on-year, off a small base in a slowly growing market.

Turning to Card Services & Auto, revenue was up 12% year-on-year, predominantly driven by Card NII on higher revolving balances as well as

higher operating lease income in Auto. Card outstandings were up 10%, due to strong account acquisition. And in Auto, originations were $10.7

billion, up 20%, driven by higher lease volume.

Expenses of $9.9 billion were up 6% year-on-year, predominantly driven by growth in marketing and technology, higher field compensation, as

well as higher auto lease depreciation. Credit costs were $2.6 billion, reflecting net charge-offs of $2.2 billion, up $275 million year-on-year,

predominantly driven by the seasoning of recent vintages in Card with delinquencies and losses in line with expectations. The net reserve build

was $475 million, of which $400 million was in Card.

Next, the Commercial & Investment Bank on page 6. CIB reported net income of $6.9 billion on revenue of $19.7 billion, which was up 12% year-

on-year. IB fees were up 12% year-on-year, and we ranked number one with wallet share of 9%. In Advisory, fees were up 16%, benefiting from

the closing of deals announced in 2024. Net underwriting fees were up 16%, primarily driven by elevated refinancing activity, particularly in

Leveraged Finance. In Equity underwriting, fees were down 9% year-on-year, reflecting challenging market conditions.

In light of market conditions, we are adopting a cautious stance on the Investment Banking outlook. While client engagement and dialog is

quite elevated, both the conversion of the existing pipeline and origination of new activity will require a reduction in the current levels of

uncertainty.

Payments revenue was up 3% year-on-year excluding equity investments, driven by higher deposit balances and fee growth, predominantly

offset by deposit margin compression. Lending revenue was up 11% year-on-year, driven by lower losses on hedges, partially offset by lower

balances.

Moving to Markets, total revenue was up 21% year-on-year, reflecting record performance in Equities. Fixed Income was up 8% with better

performance in Rates and Commodities against a relatively weak prior-year quarter. Equities was up 48% as the business performed well

during a period of elevated volatility, supported by higher client activity and strong monetization of flows, particularly in Derivatives.

Securities Services revenue was up 7% year-on-year, driven by fee growth and higher deposit balances, partially offset by deposit margin

compression.

Expenses of $9.8 billion were up 13% year-on-year, predominantly driven by higher compensation, legal and brokerage expense. Average

Banking & Payments loans were down 3% year-on-year and down 1% sequentially as we continued to observe payoff activity and limited

demand for new loans across client segments. Average client deposits were up 11% year-on-year and up 2% sequentially, reflecting increased

activity across Payments and Securities Services. Finally, credit costs were $705 million, largely driven by the net reserve build.

Then to complete our lines of business, Asset & Wealth Management on page 7. AWM reported net income of $1.6 billion with pre-tax margin

of 35%. Revenue of $5.7 billion was up 12% year-on-year, predominantly driven by growth in management fees on strong net inflows and higher

average market levels, as well as higher brokerage activity and higher deposit balances.

Expenses of $3.7 billion were up 7% year-on-year, largely driven by higher compensation, including revenue-related compensation and

continued growth in our private banking advisor teams, as well as higher distribution fees. Long-term net inflows were $54 billion for the

quarter, primarily driven by Equity and Fixed Income. In liquidity, we saw net inflows of $36 billion.

AUM of $4.1 trillion and client assets of $6 trillion were both up 15% year-on-year, driven by continued net inflows and higher market levels. And

finally, loans were up 5% year-on-year and flat quarter-on-quarter, and deposits were up 7% year-on-year and down 2% sequentially.

Turning to Corporate on page 8. Corporate reported net income of $1.7 billion. Revenue of $2.3 billion was up $102 million year-on-year. NII of

$1.7 billion was down $826 million year-on-year. NIR was a net gain of $653 million compared with a net loss of $275 million in the prior year.

The current quarter included the significant item I mentioned upfront, while the prior-year quarter included net securities losses of $336 (sic)

[$366] million.

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Expenses of $185 million were down $1.1 billion year-on-year, driven by the changes to the FDIC special assessment accruals I mentioned

upfront.

To finish up, let's turn to the full year outlook on page 9. We continue to expect NII ex. Markets to be approximately $90 billion. The Firmwide

NII outlook has increased to about $94.5 billion, reflecting an increase in Markets NII, which you should think of as being primarily offset in NIR.

Our adjusted expense outlook continues to be about $95 billion. And on credit, we expect the Card net charge-off rate to be in line with our

previous guidance of approximately 3.6%.

So to wrap up, we're pleased with another quarter of strong operating performance – but of course, the focus right now is on the future, which

is obviously unusually uncertain. But no matter what outcomes eventually materialize, we are eager to do our part to continue to support our

clients, the markets and the broader economy, and we believe the banking system will be a source of strength in this dynamic environment.

Good morning, Jeremy. Wondering if you could start by just kind of amplifying just the macro commentary that you started off on. And given

the uncertainty in the world that you referenced, just how are you seeing the activity change across the customer base from consumers to

wholesale? And can you just talk through how that's also just informing any changes in your – some of your growth and reserving

expectations? Thanks.

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Sure, Ken. So I mean, at a high level, I would say that obviously, some of the salient news flow is quite recent. So, we've done some soundings

and some checking both on the consumer side and on the wholesale side. I think on the consumer side, the thing to check is the spending data.

And to be honest, the main thing that we see there, what would appear to be a certain amount of frontloading of spending ahead of people

expecting price increases from tariffs. So ironically, that's actually somewhat supportive, all else equal. But I think what it sort of highlights is

that during this transitional period and this elevated uncertainty, you might see some distortions in the data that make it hard to draw larger

conclusions.

In terms of our corporate clients, obviously, they've been reacting to the changes in tariff policy. And at the margin, that shifts their focus away

from more strategic priorities with obvious implications for the Investment Banking pipeline outlook towards more short-term work, optimizing

supply chains and trying to figure out how they're going to respond to the current environment. So as a result, I think we would characterize

what we're hearing from our corporate clients as a little bit of a wait-and-see attitude.

I do think you see obvious differences across sectors. Some sectors are going to be much more exposed than others and have more

complicated problems to solve. And also across the size of the clients, I think smaller clients, small business and smaller corporates are

probably a little bit more challenged. I think the larger corporates have a bit more experience dealing with these things and more resources to

manage. So that's a little bit our read of the situation right now. But certainly, a bit of a wait-and-see attitude. It's hard to make long-term

decisions right now, and so we'll see how that plays out.

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Yeah. And just one question on the NII ex. Markets holding at $90 billion. Can you just walk us through the puts and takes of just what's the new

curve you're using, which also is subject to change every day and what might have been some of the positive offsets to if you put in more

expected cuts than you had before? Thanks.

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Yeah, that's a good question, Ken. You're right. So if you remember, last quarter we said that we had one cut in the curve. I think latest curve has

something like three cuts. And so, we've talked a lot, obviously, about how we are asset sensitive. You now see our EaR disclosed in the

supplement, and probably our empirical EaR is a little bit higher than our modeled EaR as a result of the relatively low – lower than modeled

rates paid in Consumer. So when you put that together, all else equal, the drop in the weighted-average IORB, which is about 22 basis points,

should produce a notable headwind in our NII ex. Markets.

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Chairman & Chief Executive Officer, JPMorganChase

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Chairman & Chief Executive Officer, JPMorganChase

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So that's mechanically just flowing through the curve. So yeah, your question is that given that, why are you not revising down? And the answer

to that is that across all the puts and takes actually, our number is a tiny bit lower. It's just not enough to warrant a change in the outlook. But we

do have some offsets. So we have some balance effects that are favorable. You will have noted that I talked about higher wholesale deposit

balances, for example. We see beta outperforming in a couple of different places in CDs and in wholesale.

The other thing is that you'll recall, we talked before about having a placeholder in our NII outlook for the potential impact of the Card late fee

rule. We've now removed that. So that's a little bit of an offset as well. So that's kind of how you get to unchanged, even though clearly, all else

equal, the lower expected front-end rates are a headwind.

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Operator: Thank you. Our next question comes from Erika Najarian with UBS. You may proceed.

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Yes. Good morning. This question is for Jamie. Jamie, you were on the media today talking about potential economic turbulence. But Jeremy

also mentioned that banking should be – the banking system should be a source of strength in this turbulence. The equity market always

seems to think about the banks as weaker players given how they trade the stocks more on sentiment and fear rather than the math of – the

ability of banks to absorb provisions going forward, if we do fall into a slower economic downturn.

So, I guess, just the question here is, can you double-click on how you think this is going to impact the economy going forward and maybe

double-click on Jeremy's statement that the banking system should be a source of strength?

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I just – before Jamie answers that, Erika, I just want to make one brief comment, which is the banking system being a source of strength means

what it says. In other words, banks doing their job to support the economy. That's not a statement about bank equity performance and the

extent to which banks are cyclical or not. Like obviously, a recessionary environment, as I've frequently said, all else equal, is bad for banks

from an equity performance perspective. We're talking about the financial strength of banks' balance sheets and our ability to support our

clients in a difficult moment.

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Chairman & Chief Executive Officer, JPMorganChase

Everyone trades stocks in a different way, so sentiment – but banks are a cork in the ocean when it comes to the economy. If the economy gets

worse, credit losses will go up, volumes can change, deal curves can change. And we're not predicting all of that. What I would say is our

excellent economist, Michael Feroli, I called him this morning, specifically to ask him, how they're looking at their forecast today, they think it's

about 50-50 for a recession. So I'll just refer to that. Obviously, if there's a recession, credit losses will go up and other factors will change, too.

And I think the one thing I'll add to what Jeremy said is – and I don't usually pay that much attention to anecdotes, but this time I am. And I think

you're going to see a lot of companies – you guys – not you, but the analyst community has already reduced its earnings estimates for the S&P

by 5%. So it's – now it's up 5% as opposed to up 10%. My guess is that will be zero and negative 5%, probably in the next month.

And then you're going to hear 1,000 companies report, and they're going to tell you what their guidance is. My guess is a lot will remove it.

They're going to tell you what they think it might do to their customers, their base, their earnings, their cost, their tariffs. It's different for every

company. But I assume you'll see that. And anecdotally, a lot of people are not doing things because of this. They're going to wait and see. And

that's M&A, that's M&A with middle market companies, that's people's hiring plans and stuff like that. So people have to adjust to this new

environment. And I think we'll see what it is.

I just also want to point out, just to – so you can round it up. This is to make you feel comfortable, not uncomfortable. When COVID hit,

unemployment went from like 4% to 15% in a couple of months, and we had to add to reserves in a two-month period of $15 billion. And then to

show you how stupid CECL is, in the three month – three quarter period, we took down the $15 billion. So, just – that just sizes up a bad

recession. If it's a mild recession, it will be less than that. If it's a really bad recession, it will be more than that. Either way, we can handle it and

serve our clients. Earnings won't be great and the stocks will go down, which I look at as an opportunity to buy back more stock.

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Got it. And a second follow-up question. And I don't disagree with you guys on equity market performance of bank stocks. It's just that the

mindset of portfolio managers is they always go back to sort of the lowest common denominator of fundamental performance versus thinking

about resilience.

And to that point, the second question is on the reserve. Jeremy, you mentioned a weighted-average unemployment rate of 5.8%. I think that's

above where economists are thinking we could peak even in a recession scenario. How should we think about any incremental builds from

here? And what you are going – obviously, deterioration in the outlook, but what more do you need to see in terms of how you make decisions

about further builds from here?

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Yeah, Erika, it's a good question. But the truth is there's just a little bit too much uncertainty right now for me to sort of give an outlook for

reserves, which is generally not a thing that we do anyway. As I mentioned in my prepared remarks, the [indiscernible] forecast at the end of

the quarter was the sort of bog standard, no landing, barely any increase in unemployment. Given that we knew at the time that there was –

there were some big pending announcements, and there was quite a bit of elevated uncertainty around that, it felt like the forecasts were kind

of lagging because people were just waiting to actually get the information and so it felt appropriate to add a little bit of downside skew to our

probability assessment, which is what led to the increase and what led to the build.

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We use this weighted-average unemployment thing as a useful way to help explain what's going on inside the reserve. But obviously, the actual

mechanisms are quite complex, the depth in any financial recession, the timing of it, distribution of outcomes, which sectors have hits,

idiosyncratic stuff in wholesale. There's a lot.

I think on consumer, as Jamie mentioned, it is worth remembering that by far the most important variable is unemployment. So if the labor

market remains very strong, consumer credit will probably be fine. If it doesn't, then you're going to see it play through the way it always does.

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Operator: Thank you. Our next question…

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Operator: I apologize. Our next question comes from John McDonald with Truist Securities. You may proceed.

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Hi, good morning. Jeremy, on that same topic, no change to the full year credit Card net charge-off forecast. How do we square that with the

rising recession risk? Is it because you already have a couple of months of delinquencies kind of baked in the cake and this is more an issue for

next year, or just too early to call?

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Chairman & Chief Executive Officer, JPMorganChase

We should have not given you that forecast. We don't know what the number is going to be. That's a...

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Chairman & Chief Executive Officer, JPMorganChase

I would say that's a short-term number, and based on what's happening today, there's a wide range of potential outcomes.

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Yeah. Okay. Okay, yeah, that's what we were kind of thinking. And then...

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But, mechanically, John, though, as you alluded to, there are some mechanical elements to the way Card charge-off works that means that it's

pretty baked pretty far ahead of time.

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Chairman & Chief Executive Officer, JPMorganChase

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So, sort of echoing Jamie's point, it just doesn't necessarily tell you that much about what might actually happen through the end of the year.

Even if unemployment were to increase significantly, it probably wouldn't flow through the charge-offs until later.

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Okay. Got it. And then just on capital, how does this type of macro uncertainty impact your thinking around conserving capital as opposed to

deploying it through your investment agenda and buybacks as the stock gets cheaper? Or just, are you still looking to arrest the increase or

does this kind of change it?

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Chairman & Chief Executive Officer, JPMorganChase

The investment that we do in banks, branches, technology, AI is going to continue regardless of the environment. And then we have –

depending what happens to Basel III and CCAR and G-SIFI and all that, $30 billion to $60 billion of excess capital. And in the Chairman's letter, I

wrote about what we think of that. But based upon the environment, the turbulence issues, I like having excess capital. We are prepared for any

environment. And that's so we can serve clients. That's not for any other reason. So, we have plenty of capital and plenty of liquidity to get

through whatever the stormy seas are.

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Operator: Thank you. Our next question comes from Matt O'Connor with Deutsche Bank. Your line is open.

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Matt O’Connor Q

Good morning. Just wanted to drill down on the credit card spend. Any comments in terms of changing patterns on the consumer card spend?

There's been headlines in travel kind of going down. Just talk about some of the puts and takes in that up 7% year-over-year.

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Yeah, it's a good question and we're seeing that too. So let me talk about travel. I mean we obviously saw the airlines discuss what they are

seeing as headwinds for them, specifically in airline travel, and we're seeing that too through the card spend. It's not obvious to us that that's

necessarily an indicator for broader patterns. There are a variety of potential explanations for the narrow drop in airline spend.

And as I mentioned previously, another thing that we are seeing looking at the April data is what would appear to be a little bit of front-loading

of spending, specifically in items that might be – have prices go up as a function of tariffs. So you see people behaving rationally, and I have

noted even you hear anecdotes, and I've seen evidence of companies specifically advertising we have pre-tariff inventory and so on and so

forth. So it's not that surprising that you're seeing that a little bit in the spending data.

The other thing that people are kind of interested in this space is like what's happening by income band, because we have seen some of the

retailers and other folks talking about weaknesses in the lower income segment. And I think when we look at our Card data and also our cash

buffers and peoples' checking accounts, of course, it is true that it is relatively weaker in the lower income segment. But when you take a step

back and you ask, are we seeing signs of distress in the lower income segment? The answer is no. So, sure, the margin and cash buffers are

lower, and you see some rotation of spend and spending is a little bit weaker than it was in the peak spending moments. But actually, some of

the increases in spending that we're seeing in April are actually coming from the lower income segment. So no evidence of distress, I would

say.

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Matt O’Connor Q

Okay. That's helpful color. And then just separately, if we look at the delinquencies for the Home Lending, the increase both quarter-on-quarter

and year-over-year, is that just some of the noise from the First Republic deal as you take the marks upfront and then those portfolios

essentially re-season from an accounting point of view? Or is there something else going on there?

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Sorry, the – I actually didn't hear. Which fees?

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Chairman & Chief Executive Officer, JPMorganChase

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I didn't – interesting. I haven't looked at that. We'll have to get back to you on that

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Chairman & Chief Executive Officer, JPMorganChase

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Whatever it is, it wasn't important enough to get raised, so.

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Chairman & Chief Executive Officer, JPMorganChase

It could be the First Republic accounting, yes

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Yeah. Anything is possible. We'll get back to you on that.

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Matt O’Connor Q

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Operator: Thank you. Our next question comes from Steven Chubak with Wolfe Research. You may proceed.

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Hi. Good morning and thanks for taking my questions. Wanted to start off with one on the proposed SLR changes and just the impact of rate

volatility. The Treasury is committed to providing relief to the banks under the SLR just to help mitigate some of the volatility in the 10-year. But

given the geopolitical concerns, weakening global demand for treasuries, how does it inform your appetite just for purchasing U.S. Treasuries

if those reforms are implemented and just how you're managing rate risk maybe more holistically across the Firm, just in light of some the

recent volatility?

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Chairman & Chief Executive Officer, JPMorganChase

Yes. So SLR alone isn't going to change that much for us. It may change for other people. We really need reform across SLR, G-SIFI, CCAR,

Basel III and LCR, all of which have deep flaws in them to make a material change. And remember, it's not relief to the banks; it's relief to the

markets. JPMorgan will be fine with/without an SLR change. The reason to change some of these things is so banks – the big market makers

could intermediate more in the markets. If they don't – if they do, spreads will come in, there'll be more active traders. If they don't, the Fed will

have to intermediate, which I think is just a bad policy idea that every time there's a kerfuffle in the markets, the Fed has to come in and

intermediate. So they should make these changes.

The point – the reason why is when you have very – a lot of volatile markets and very wide spreads and low liquidity in treasuries, it affects all

other capital markets. That's the reason to do it; not as a favor to the banks themselves. And we don't take more interest rate exposure to this

in any way, shape or form. So it's not like we're going to change our position. We intermediate in the markets to help clients do what they have

to do. And if the banks could take bigger positions, they would have just larger dealer positions and take no – basically take not much more

interest rate exposure. I should say that our folks did a fabulous job trading this quarter.

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And Steve, all I would add to that is that it is, of course, true, and we all remember the moment a few years ago when intermediaries were, in

fact, bound by SLR as a result of the expansion of the deposit base, and extraordinary actions needed to be taken to address that. So we've

seen when it is binding, and it works not as designed, which is why we do very much agree that it should be fixed. I think our point is a little bit,

as Jamie said in his Chairman's letter, that it's not the only thing that needs to be fixed, and there are interactions among all these things. And

we, as a bank, are not particularly bound by it.

There is some interesting nuance too in terms of the potential TLAC issuance impact there, which is quite sensitive to which particular fix gets

put in. So that will be an interesting thing to watch.

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Thank you both for that perspective. And just for my follow-up, did want to ask on the Markets outlook. So, admittedly, less surprising to hear

some of the cautious IB commentary in light of the uncertainty. But was hoping you could just speak to the Markets businesses which have

been performing extraordinarily well of late and just given the combination of elevated volatility, but also some indications that clients are

taking down risk, how you expect that business to perform over the coming quarters.

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Yeah. It's a good question. As you know, Steve, we're obviously not going to give Markets guidance. Your guess is as good as ours at some

level. But the ingredients are the right ingredients. I mean, we've often discussed about how this business, all else equal, benefits from a volatile

environment if markets are operating relatively normally, which they more or less have been. Of course, it's not guaranteed. We need to do a

good job managing the risk. And yeah, there are states of the world where if our clients are struggling or deleveraging or taking down risk, that

could be a headwind for us. So we're going to just do what we always do and try to manage the risk well and serve our clients, but we were

certainly happy to see the performance this quarter.

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That's great. Thank you both for taking my questions.

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Operator: Thank you. Our next question comes from Gerard Cassidy with RBC Capital Markets. You may proceed.

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Thank you. Hi, Jeremy and Jamie. Can you guys share with us – if you take a look at the non-traditional lenders, private credit lenders, they've

been very active in grabbing market share from the traditional commercial banks over the last two or three years, particularly since the initial

Basel III Endgame proposal came out in July of 2023, which is no longer applicable. But are you guys seeing any opportunities where

customers may re-intermediate back into the banks like your bank because of this volatility?

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I mean that's hard to tell, Gerard. I think it's too early to tell. But what I would say is that it kind of – your question aligns with what we've been

saying about this space for some time, which is we want to be product agnostic here and give our clients the best option that makes sense for

them in the moment. Whether that's a traditional syndicated lending facility or something that looks more like a unitranche, direct lending type

structure, we're open for business for all of it.

And I would say that when we talk about the financial system being a source – the banking system being a source of strength in this

environment, part of what we're talking about is our commitment and willingness to lend through cycles, as we've always done in the past and

that we have the underwriting capability and the capital and the liquidity and the experience to be reliable lenders in serving our clients no

matter what type of environment we're in. So, if that means that we have an opportunity to compete incrementally even more effectively in this

environment, that will be great.

........................................................................................................................................................................................................................................................................................

Very good. Thank you. And then as a follow-up, you both just talked about the potential changes to the different regulatory outcomes for you

and your peers, whether it's SLR or the G-SIB buffer, et cetera. Can you opine for us your views? Are you more confident with the new

administration, the new personnel, whether it's Treasury Secretary Bessent or others, the nominees for different regulatory heads that there

will be a better chance of real regulatory reform, they see it the way you guys do versus the prior administration?

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Yeah, I mean, Gerard, we always say this, and it's true, which is that we work with all administrations and every administration as constructively

as possible to express our opinions and advocate for the things that we think are right for the banking system and for the economy as a whole,

and that was true before, and it's true now with this administration as well.

Clearly, the administration has been quite vocal about wanting more pro-growth policies at the margin and for wanting to make it easier for

banks to participate more constructively in the economy. And as we see the various folks and the various agencies go through the

confirmation process, it will be helpful to have people in seats and get to work on some of the things that we want to get done. So let's see how

that plays out, but we're looking forward to continuing to engage constructively.

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Chairman & Chief Executive Officer, JPMorganChase

Yeah. I think there's a deep recognition of the flaws in the system, and there should be, and fortunately, they're going to take a good look at it.

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Operator: Thank you. Our next question comes from Ebrahim Poonawala with Bank of America. You may proceed.

........................................................................................................................................................................................................................................................................................

Thank you. Good morning. I guess just wanted to follow up on the macro uncertainty. I think when you talk to investors, we've gone from

enthusiasm for a pro-business administration to a lot of headwinds. And I think Jamie mentioned you'll have companies take down guidance, et

cetera, potentially over the coming weeks. I'm just wondering what is it you think we need to see before this uncertainty abates, or the 90-day

pause that we saw with some of the other countries on tariffs. Is that enough? Or I'm just wondering when you talk to clients, corporate CEOs,

what are they looking for from the administration that would inject confidence to get back anywhere close to where we were maybe 60 or 90

days ago?

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Chairman & Chief Executive Officer, JPMorganChase

First of all, some of all the issues that are raised existed before the new administration, like the geopolitical situation, the excess fiscal deficits,

poorly done regulations and all that. Obviously, pro-growth is good, pro-business is good, pro-dereg is good. I think the best thing to do is to

allow the Secretary of Treasury and the folks working with him and the administration to finish as quick as possible the agreements that they

need to make with – around tariffs and with our trading partners. And I think there'll be agreements in principle. They're not going to be – trade

agreements themselves would be 5,000 or 10,000 pages long. And that's the best way to go about it right now. That does not mean you won't

have some of the effects take place anyway.

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Got it. I guess as a follow up, I think there's a lot of concern also in the treasury markets. We've seen the 10-year move from 3.99% to 4.50% in a

matter of a week. Just your comfort level on terms of the functioning of the treasury market. Do you see the Fed stepping in, pausing QT,

maybe even initiating some treasury purchases? Just any color would be great.

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Chairman & Chief Executive Officer, JPMorganChase

Yeah. But again, I mean, we have sticky inflation. We had that before. I personally have told you all, I don't think that's going to go away, and that

relates to that. Obviously, the U.S. dollar still is the reserve currency, and that isn't going to change, though some people may feel slightly

differently about it. And the Fed – we've been inconsistent. There will be a kerfuffle of the treasury markets because of all the rules and

regulations. I've told you that consistently. It happened in COVID, it happened before, it happened. That will happen. And then when that

happens, the Fed will step in. That's what happens. And they're not going to do it now because you don't have all those issues yet. They'll do it

when they start to panic a little bit, and we don't know if and when that's going to happen, and we'll see.

But the notion that the 10-year Treasury has to go down is a false notion. If we look at history in prior times, when we have huge global deficits.

Back in the '70s, in the '60s, the guns and butter. And tariffs, at least our economists think will be inflationary to 0.5% or something like that. So

we'll have to wait and see and deal with it.

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Chairman & Chief Executive Officer, JPMorganChase

For most – mostly haven't dealt with this stuff before, and you're going to see a lot of stuff taking place shortly in the next couple of months, and

then we'll know.

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Operator: Thank you. Our next question comes from Jim Mitchell with Seaport Global Securities. You may proceed.

........................................................................................................................................................................................................................................................................................

Hey, good morning. Jeremy, just on – with four – three to four cuts sort of mostly in the back half, June to December, how do you think about

the trajectory of NII this year? Is there a little more pressure towards the end of the year into 2026? Just trying to think of that around that

trajectory and jumping off point into next year.

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Yes. It's funny, Jim, because I was asked on the press call, how come we're not like suspending guidance or whatever? And my answer was

like...

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...well, whatever. We give guidance and we do our best, and it's contingent on a variety of external variables, and we always make our guidance

contingent on that. So in that context...

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Chairman & Chief Executive Officer, JPMorganChase

and the yield curve you're using...

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Yeah, yeah, yeah.

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Chairman & Chief Executive Officer, JPMorganChase

...which we know will not happen.

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Yeah. And the particular nuance, as you'll recall from last quarter, where we went into some detail about the various drivers of the NII outlook,

including a little bit of a suggestion about the quarterly trajectory is that it's both the timing of rates and the – our expected evolution of deposit

growth in the different businesses and how card revolve and how that was all going to interact, producing a potential trough in different

moments and then so on and so forth.

I think that given everything that's going on on that one, probably we'll wait for next quarter to give you any more color on that. Certainly, the

back-loaded cuts, all else equal, from a run-rate perspective, introduced a little bit of a headwind on an exit rate going into next year. We'll just

have to see how the balances play out through the next three quarters.

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Chairman & Chief Executive Officer, JPMorganChase

It will not happen that way, and we have a lot of options in what we want to do to change our exposure to interest rate.

........................................................................................................................................................................................................................................................................................

Right. And maybe just on that point on volumes and deposits, obviously, this kind of volatility tends to drive – as corporates and investors go to

cash, tends to drive higher deposits. Did you see that trend in March and particularly in April? What are the trends like in the deposit side of the

equation?

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It’s a little hard to tell, to be honest. It is true that wholesale deposits this quarter outperformed for us relative to our expectations. I don't think I

can say with any confidence that that's a result of the environment that we're in. So I think next quarter will probably be a better time to assess

that.

........................................................................................................................................................................................................................................................................................

Chairman & Chief Executive Officer, JPMorganChase

I'll just – I'll say it may not be deposits. It may be treasury bills or various other things. And what you've seen which is different, it's not the risk

off trade in the 10-year. That is fundamentally different this time.

........................................................................................................................................................................................................................................................................................

Right. Okay. Thanks for taking my questions.

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Operator: Thank you. Our next question comes from Betsy Graseck with Morgan Stanley. You may proceed.

........................................................................................................................................................................................................................................................................................

Thanks. Good morning, Jamie. Good morning, Jeremy. Two questions. One for Jamie, just to kick off.

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Chairman & Chief Executive Officer, JPMorganChase

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Jamie, you've been through many cycles. And I think we're all interested in understanding how you think this next cycle is likely to progress.

And I'm wondering, is there anything that you've seen in the past that looks like this, or that you would suggest if any slowdown coming

forward, is it more likely to be similar to what kind of prior cycle you've seen?

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Chairman & Chief Executive Officer, JPMorganChase

An almost impossible answer. We look at all the cycles. And you know we prepare for a full range of outcomes. We're not – I don't personally

like predicting what the future is going to hold. But I do – I've pointed out over and over, there's a lot of issues out there. I think some of those

issues, you are going to see them resolve, for better or for worse, in the next four months.

So maybe when we're doing this call next quarter, we won't have to be guessing. We'll actually know what the effect of some of these things was

with some predictability and stuff like that. But it's – the result in a bank is almost always the same, which is volatile markets, credit losses go

up, people get more conservative, investments go down, what looks like a recession. Is it mild or hard? I don't know and – but we are – I've been

quite cautious, and you can see in our capital, our liquidity, our position, our balance sheet. And so we're prepared. But we do all that so we can

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Chairman & Chief Executive Officer, JPMorganChase

serve our clients through thick or thin. We're not guessing about what the future is going to hold. Obviously, if you look at our numbers, we

have the margins and capability to get through just about anything.

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Excellent. Okay. No, thank you for that. And then...

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Chairman & Chief Executive Officer, JPMorganChase

But Betsy, this is different, okay? This is different. This is the global economy, and please read my Chairman's Letter. The most important thing

to me is the Western world stays together economically when we get through all this and militarily to keep the world safe and free for

democracy. That is the most important thing. I really almost don't care fundamentally about what the economy does in the next two quarters.

That isn't that important. We'll get through that. We've had recessions before and all that. It's the ultimate outcome. What's the goal? How can

we get there? And it's literally that. I mean – and the China issue is a major issue. I don't know how that's going to turn out. We obviously have to

follow the law of the land, but it's a significant change that we've never seen in our lives.

........................................................................................................................................................................................................................................................................................

Okay. Thank you so much for that. And yes, looking forward to the next four months and clarity coming. So then one for Jeremy. Question on

the wholesale loans. I'm going into this because I noticed your average loan growth, I think it was running at about 2% year-on-year. And then

end of period loans was up 5% and wholesale loans was up 7%. So I'm just wondering if there was some line drawdowns at quarter end. And it's

a broader question on just liquidity. Do you see your customers looking for more liquidity? Are they drawing down lines? And maybe if you

could speak to liquidity in the front end of the market, that would be helpful, too. Thank you.

........................................................................................................................................................................................................................................................................................

Yeah, it's a good question, Betsy. So a couple of things. One is in our soundings of our wholesale clients during sort of the moments of peak

uncertainty, we did hear them talking about wanting to focus on shoring up liquidity. Interestingly, I actually asked the question like a day ago,

whether we were seeing draws, meaningfully observable draws from clients. And the answer to that question was no, at least not yet. So, I don't

know what to make of that, but perhaps it suggests that we do not see that level of heightened anxiety that people are more just focusing on

addressing their supply chain issues right now. Yeah. So on wholesale loans.

Beyond that, I don't think there's that much of a story. Now we're seeing a bit more growth in sort of like Markets loans as opposed to traditional

C&I loans in the current moment, but that's neither here nor there. Did you have – yeah, you asked – what did you ask also, front end of the yield

curve, liquidity?

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Yes, just in...

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Was that your question?

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...money markets, Fed funds, the front end seemed to suggest...

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Yeah. What we've heard from our Markets colleagues is that that's actually functioning quite smoothly.

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Operator: Thank you. Our next question comes from Mike Mayo with Wells Fargo Securities. You may proceed.

........................................................................................................................................................................................................................................................................................

Hey, Jamie, you just said on this call, there's a "Deep recognition of flaws" by the new regulatory regime. And can you put – you or Jeremy, put

some meat on the bones as far as what's been an ideal scenario? You keep the safety and soundness of the system, but you rid all – as much

red tape and bureaucracy as possible. How much could expenses potentially decline? I assume you pass on some of that to customers and

you'd keep some of that, and the regulators would save money. So, some meat on the bones about the potential concrete savings from

deregulation.

But before that, the negative, which you highlight in the press release and the Chairman Letter about trade wars, Jamie, you went from trade

wars "Get over it" to this week say, "Do something." So just as far as the tariff journey, what were you initially expecting to what happened and

do you really think next earnings call we'll be through most of the uncertainty? Thanks.

........................................................................................................................................................................................................................................................................................

Chairman & Chief Executive Officer, JPMorganChase

Yeah. No, I don't think we'll necessarily be through all the uncertainty. I think you'll just know a lot more. And my quote was about, get over it. I

wish I hadn't said it. I was specifically referring to tariffs relating to protecting national security. National security is paramount. All things

should be subordinated to it. You may need tariffs to help fix some of the problems related to national security. National security is a small part

of trade, so – and it's rare earths, penicillin, medical ingredients, certain types of – obviously, you've heard about semiconductors. That was my

quote about, get over it. I did not change my view about it.

I would like to see the administration negotiate trade deals. I think they'll be good for everybody, and they want to do it too. They've said they

want to do it. They've said they're having conversations with 70, 80 different people. And so I do think if the regulators change regulations, it

will free up capital and liquidity to finance the system. And I don't – I wouldn't expect an expense drawdown that you're going to see. There will

be thousands – hundreds of people, maybe, but it's not going to be passed on. But it will reduce net-net the cost of liquidity and the cost of

loans and the cost of mortgages, if it's done right.

I specifically pointed out the mortgage issue in my Chairman's letter this year about if they do some of these reforms, the cost of mortgages

would come down 70 basis points. If I were them, I'd be focusing on that right now.

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No, and you also mentioned hundreds of billions of dollars of extra lending if you reduce the CET1 ratio, I guess, back down by one-fifth.

........................................................................................................................................................................................................................................................................................

Chairman & Chief Executive Officer, JPMorganChase

If you do all – you have to fix LCR, G-SIFI, CCAR, SLR, and I think would free up hundreds of billions of dollars for JPMorgan annually of various

types of lending to the system. Some would be markets, some would be middle market loans, et cetera. And I pointed out, if you wanted to look

at the big numbers, that loans to deposits are now 70% for the banking system writ large. That used to be 100%, and the reason for that isn't –

it's not just capital. It is also LCR, it is also G-SIFI, also – and the question you should ask because you are very smart, Mike, is could you have

the same – and I believe you have a safer system, lend more money, have more liquidity, eliminate bank runs, eliminate what happened to First

Republic and Silicon Valley, and you could accomplish all of that with completely rational and thoughtful regulations. That's what I would like to

see them do. I don't know what's going to happen. We're going to...

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Chairman & Chief Executive Officer, JPMorganChase

You can read our – I think our NPRs are public and stuff like that. And so they should do that. Just make a better system. Or you have the best in

the world. We've kind of started to cripple it slowly. If you don't – I'd say, you look at these rules and regulations. See Europe. If that's where we

want to go. Let's just go there.

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One short follow-up. Just first quarter, you mentioned good credit, good trading, good EPS beat. I'm not sure anyone cares. They're worried

more about the things we're talking about here. But in terms of the risk of being an international company, an international U.S. company

during trade wars. And I know JPMorgan is a firm that likes to partner with countries as well as communities and customers. So how do you

think about that risk? How should we think about that risk? And hopefully, your voice is being heard to speed things along to whatever can be

done, getting it done because you could be in the crosshairs at some point.

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Chairman & Chief Executive Officer, JPMorganChase

Yeah. I honestly add that to the list of worries. We will be in the crosshairs. That's what's going to happen. And it's okay. We're deeply

embedded in these other countries, people like us. But I do think some clients or some countries will feel differently about American banks, and

we'll just have to deal with that.

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Operator: Thank you. Our next question comes from Glenn Schorr with Evercore. Your line is open.

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Hi. Just one follow-up on this whole risk management/regulatory front. I see, I hear and I agree: flawed regulatory system, could be better.

We've had massive volatility. The market plumbing has held in okay so far and you and others have had borderline spectacular trading results.

So, has something changed? Are the systems better? Are they better able to handle your risk management, your people, the diversity of your

platform better? Or are there still environments where not all volatility is good? Just curious to get your big picture thoughts. Thanks.

........................................................................................................................................................................................................................................................................................

I mean, maybe I'll start with that one, Glenn. So, I guess, I think that your points aren't mutually exclusive. Meaning, I mean, we're always

continually improving the franchise. We've talked a lot about inward investment in all of our businesses, including Markets. And so we try to be

more complete and invest in technology and work more closely with our clients. So I'm sure we're kind of better at it than we were five years

ago, as I think probably everyone is at the margin. I'm not sure that you can associate that with the current performance. I think these just

happen to be very favorable conditions that we've managed very successfully.

And to your point, I think your specific question of like is there – are there still forms of volatility that can be bad for the Markets franchise? The

answer to that question is definitely yes. When you have gappy volatility with no trading volume, people paralyzed, clients unsure what to do,

active managers struggling, those environments are bad. So people make fun of the kind of good volatility, bad volatility story, but whether we

like it or not, it's real. And in the end, we just have to manage the risks and serve the clients. And as I said earlier, we're happy to see that...

........................................................................................................................................................................................................................................................................................

Chairman & Chief Executive Officer, JPMorganChase

Jeremy – I agree. Jeremy, I would add to that. Volatility leads to bigger bid-ask spreads, that, all things being equal, is better. And it leads

sometimes to higher volumes. So you've seen really high volumes in FX and interest rate swaps, a whole bunch of different things, treasuries.

That's better. But as Jeremy pointed out, sometimes that kind of volatility leads to very low volumes, like you see in DCM today when you don't

have these bond deals where you have less trading, when you have – so it will have lower volumes in certain markets and stuff like that. And

how it all filters through is almost impossible to tell. But our folks do a great job and we're here to help our clients. So we know that volumes can

go up or down and spreads can go up or down.

But the plumbing of the system, I would say the plumbing worked well during COVID too. I mean, it wasn't the plumbing that was a problem and

wasn't even a problem to go back to some of the real crises we've had, so – but you should always worry about that kind of thing, make sure it

stays true.

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And I do think that the fact that the revenue performance in this quarter is good shouldn't make us lose focus on the importance of the larger

fixes around financial resource deployment by regulated banks to supporting the capital markets ecosystem. Everything Jamie's been talking

about SLR, LCR, ILST, G-SIB, Basel III Endgame, RWA, the whole panoply of items, which interacts, as we've often talked about and is miss-

calibrated, it will, at the margin, make it harder for banks to serve a stabilizing function in a difficult moment. So that remains quite important as

a policy priority.

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That's a great point. Thanks for that. Appreciate it.

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Operator: Thank you. And our final question will go to the line of Saul Martinez with HSBC. You may proceed.

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Okay. Good morning. Thanks for taking my question. Most of my questions have been asked and answered, but I guess I'll ask about costs

since nobody has asked it. But I guess how should we think about the cost structure and any sort of cost optimization efforts, if you do see a

revenue slowdown, but not necessarily a severe downturn? I think you do have, in the $95 billion guidance, you do have a good amount of

growth penciled in for investing in bankers and branches and tech and marketing. And I guess, do you – does it make sense or under what

conditions would it make sense for you to maybe pull back on some of these investments? Or do you think that's just completely shortsighted

unless we see a real significant downturn in the economy.

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Yeah. So you've slightly answered your own question there, Saul, but it is nonetheless a good question. So let me unpack it a little bit. So the

way I think about it is there are some elements of the expense base which automatically reset as a function of the business environment. So we

talk about those as volume- and revenue-related expenses. So you will see those come down as a function of the environment. It's also true

that there are conceivably certain investment business cases, which depending on how the environment changes, could no longer make sense

analyzed in the same way that we analyze them originally, i.e., through the lens of their ability to generate long-term shareholder value through

a long investment cycle. And so if for whatever reason the environment changes in such a way as to make certain of those investments less

compelling, we would obviously adjust.

Of course, the thing that we're not going to do is stop investing in things that we still think are very compelling to our traditional long-term

investment lens, simply for the purposes of achieving a cosmetic reduction in expenses in an environment where you may or may not have a

reduction in revenues for unrelated reasons. As you well know, that's just not how we run the company.

This quarter, as it happens, a question you might have is how are you managing to keep your guidance the same with what you're saying about,

for example, the Investment Banking outlook? But it's worth noting that Investment Banking performance this quarter was actually fine. As you

know, Markets performance was very strong. And there are also some ups and downs in there, I should note, including the fact that there is

some sensitivity to the expense base to the strength of the dollar, or weakness in this case. And while some of that is offset in revenue, it's a

little noisy, so that's a factor as well. It's small, but I'm just highlighting that there's some slightly non-obvious things that are non-strategic,

obviously.

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Chairman & Chief Executive Officer, JPMorganChase

Can I just add a management thing that I think is very important. And I always talk about good expenses and bad expenses and the good

expenses of the bankers and branches that we think will pay off and – but there are also bad expenses, which I would put in the category of

bureaucracy, lack of efficiency, things you don't need to do.

And you can – if you go to – if you read my Chairman's letter, the last section is called Management Learnings. And if you look at companies

that over time fail, it's almost always bureaucracy, complacency, arrogance and lack of attention to detail. And so there is – we're making a – I

shouldn't say it, but I'm mad at myself for not doing it sooner to spend a little more time that after COVID – the buildup in headcount, the

buildup in rules and regulations, the people working or not working from home. After all of those things, we just think there's more efficiency

here.

And I think some of the – and Mike Mayo mentioned the bit about regulation. He is right. There will be reductions in cost because rules and

regulations will be modified a little bit. I mean we – I pointed out resolution/recovery, which is a complete waste of time, is 80,000 pages long.

Okay. It will never happen that way. CCAR, which is virtually a waste of time, is 20,000 pages long. Okay. We report 1 trillion – I think it's 1 trillion

bits of data every day or something like that to the – all the various regulators and stuff like that. There is this excessive cost built up that we –

that hopefully we can get rid of and will reduce the cost of the system and – but it's not the new branches, so.

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Chairman & Chief Executive Officer, JPMorganChase

And the folks here are working on, we call it, streamlining. Jenn Piepszak has got a war room going on it. We already have a significant amount

of saves and stuff like that, so – and we're having fun doing it. It's like – to me, it's like exercising and eating your spinach. It's what we should be

doing. We haven't done it for a while, so – and I apologize to my shareholders for not having done this a little bit sooner.

........................................................................................................................................................................................................................................................................................

Okay. That's very clear. Very helpful. Thank you.

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Chairman & Chief Executive Officer, JPMorganChase

Thank you. We'll talk to you next quarter.

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Operator: Thank you all for participating in today's conference. You may disconnect at this time and have a great rest of your day.

........................................................................................................................................................................................................................................................................................

This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These

statements are based on the current beliefs and expectations of JPMorgan Chase & Co.’s management and are subject to significant risks and

uncertainties. Actual results may differ from those set forth in the forward-looking statements. Factors that could cause JPMorgan Chase &

Co.’s actual results to differ materially from those described in the forward-looking statements can be found in JPMorgan Chase & Co.’s Annual

Report on Form 10-K for the year ended December 31, 2024, which has been filed with the Securities and Exchange Commission and is

available on JPMorgan Chase & Co.’s website (https://jpmorganchaseco.gcs-web.com/financial-information/sec-filings), and on the Securities

and Exchange Commission’s website (www.sec.gov). JPMorgan Chase & Co. does not undertake to update any forward-looking statements

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