JPMORGAN CHASE & CO (JPM) FY 2024 MD&A

Management’s discussion and analysis

The following is Management’s discussion and analysis of the financial condition and results of operations (“MD&A”) of JPMorganChase for the year ended December 31, 2024. The MD&A is included in both JPMorganChase’s Annual Report for the year ended December 31, 2024 (“Annual Report”) and its Annual Report on Form 10-K for the year ended December 31, 2024 (“2024 Form 10-K” or “Form 10-K”) filed with the Securities and Exchange Commission (“SEC”). Refer to the Glossary of terms and acronyms on pages 327–333 for definitions of terms and acronyms used throughout the Annual Report and the 2024 Form 10-K.

This Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the current beliefs and expectations of JPMorganChase’s management, speak only as of the date of this Form 10-K and are subject to significant risks and uncertainties. Refer to Forward-looking Statements on page 167 and Part 1, Item 1A: Risk Factors in this Form 10-K on pages 10-37 for a discussion of certain of those risks and uncertainties and the factors that could cause JPMorganChase’s actual results to differ materially because of those risks and uncertainties. There is no assurance that actual results will be in line with any outlook information set forth herein, and the Firm does not undertake to update any forward-looking statements.

INTRODUCTION

JPMorgan Chase & Co. (NYSE: JPM), a financial holding company incorporated under Delaware law in 1968, is a leading financial services firm based in the United States of America (“U.S.”), with operations worldwide. JPMorganChase had $4.0 trillion in assets and $344.8 billion in stockholders’ equity as of December 31, 2024. 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.

JPMorganChase’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. JPMorganChase’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 JPMorganChase 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.

Business segments & Corporate: Effective in the second quarter of 2024, the Firm reorganized its reportable business segments by combining the former Corporate & Investment Bank and Commercial Banking business segments to form one reportable segment, the Commercial & Investment Bank. As a result of the reorganization, the Firm has three reportable business segments – Consumer & Community Banking (“CCB”), Commercial & Investment Bank (“CIB”) and Asset & Wealth Management (“AWM”) – with the remaining activities in Corporate. The Firm’s consumer business segment is CCB, and the Firm’s wholesale business segments are CIB and AWM.

A description of each of the Firm’s reportable business segments, and the products and services that they provide to their respective client bases, as well as a description of Corporate activities, is provided in the Management’s discussion and analysis of financial condition and results of operations section of this Form 10-K (“Management’s discussion and analysis” or “MD&A”) under the heading “Business Segment & Corporate Results,” which begins on page 70, and in Note 32.

First Republic: On May 1, 2023, JPMorganChase acquired certain assets and assumed certain liabilities of First Republic Bank (the “First Republic acquisition”) from the Federal Deposit Insurance Corporation (“FDIC”). References in this Form 10-K to “associated with First Republic,” “impact of First Republic” or similar expressions refer to the relevant effects of the First Republic acquisition, as well as subsequent related business and activities, as applicable. Refer to Note 34 for additional information.

The Firm’s website is www.jpmorganchase.com. JPMorganChase 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. JPMorganChase makes new and important information about the Firm available on its website at https://www.jpmorganchase.com, including on the Investor Relations section of its website at https://www.jpmorganchase.com/ir. Information on the Firm's website, including documents on the website that are referenced in this Form 10-K, is not incorporated by reference into this 2024 Form 10-K or the Firm’s other filings with the SEC.

EXECUTIVE OVERVIEW

This executive overview of the MD&A highlights selected information and does not contain all of the information that is important to readers of the Firm’s 2024 Form 10-K. For a complete description of the trends and uncertainties, as well as the risks and critical accounting estimates affecting the Firm, the 2024 Form 10-K should be read in its entirety.

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

(b)    Reflects the Firm’s ratios under the Basel III Standardized approach. Refer to Capital Risk Management on pages 97–107 for additional information.

(c)    NII and NIR refer to net interest income and noninterest revenue, respectively. Markets consists of CIB's Fixed Income Markets and Equity Markets businesses.

Visa shares: On April 8, 2024, Visa Inc. commenced an initial exchange offer for its Class B-1 common shares. On May 6, 2024, the Firm announced that Visa had accepted the Firm’s tender of its 37.2 million Visa Class B-1 common shares in exchange for a combination of Visa Class B-2 common shares and Visa Class C common shares (“Visa C shares”), resulting in a $7.9 billion net gain related to Visa shares recorded in the second quarter of 2024. As of September 30, 2024, the Firm had disposed of all of its Visa C shares through sales and through a contribution to the Firm’s Foundation. Refer to Market Risk Management on pages 141–149, and Notes 2 and 6 for additional information.

First Republic: JPMorganChase acquired certain assets and assumed certain liabilities of First Republic Bank from the FDIC on May 1, 2023. As a result, the year-to-date results include the twelve-month impact of First Republic compared with eight months in the prior-year period. Where meaningful to the results, this is referred to in this Form 10-K as the "timing impact" of First Republic. Refer to Notes 6 and 34 for additional information.

Comparisons noted in the sections below are for the full year of 2024 versus the full year of 2023, unless otherwise specified.

Firmwide overview

JPMorganChase reported net income of $58.5 billion for 2024, up 18%, earnings per share of $19.75, ROE of 18% and ROTCE of 22%.

•Total net revenue was $177.6 billion, up 12%, reflecting:

–Net interest income (“NII”) of $92.6 billion, up 4%, driven by the impact of balance sheet actions, primarily reinvestments in the investment securities portfolio, higher revolving balances in Card Services, the timing impact of First Republic, higher wholesale deposit balances, and higher Markets net interest income, largely offset by deposit margin compression across the lines of business and lower average deposit balances in CCB. NII excluding Markets was $92.4 billion, up 3%.

–Noninterest revenue (“NIR”) was $85.0 billion, up 23%, predominantly driven by a $7.9 billion net gain related to Visa shares recorded in the second quarter of 2024, higher asset management fees in AWM and CCB, higher investment banking fees, and lower net investment securities losses in Treasury and CIO.

The prior year included the estimated bargain purchase gain of $2.8 billion associated with First Republic.

•Noninterest expense was $91.8 billion, up 5%, driven by higher compensation expense, including higher revenue-related compensation and growth in the number of employees, as well as a $1.0 billion contribution of Visa shares to the JPMorgan Chase Foundation recorded in the second quarter of 2024, partially offset by lower FDIC-related expense, reflecting a $2.9 billion special assessment recognized in the fourth quarter of 2023, compared with a $725 million increase to the FDIC special assessment recognized in the first quarter of 2024.

•The provision for credit losses was $10.7 billion, reflecting $8.6 billion of net charge-offs and a net addition to the allowance for credit losses of $2.0 billion. Net charge-offs increased by $2.4 billion, driven by Card Services, reflecting the seasoning of vintages originated in recent years, credit normalization, and balance growth. The net addition to the allowance for credit losses included a net addition of $2.1 billion in consumer, driven by Card Services, and a net reduction of $19 million in wholesale.

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

•The total allowance for credit losses was $26.9 billion at December 31, 2024. The Firm had an allowance for loan losses to retained loans coverage ratio of 1.87%, compared with 1.75% in the prior year.

•The Firm’s nonperforming assets totaled $9.3 billion at December 31, 2024, up 22%, driven by higher wholesale nonaccrual loans, which reflected downgrades in Real Estate, concentrated in Office, partially offset by lower consumer nonaccrual loans, which included loan sales. Refer to Wholesale Credit Portfolio and Consumer Credit Portfolio on pages 126–136 and pages 120–125, respectively, for additional information.

•Firmwide average loans of $1.3 trillion were up 6%, driven by higher loans across the lines of business.

•Firmwide average deposits of $2.4 trillion were up 1%, reflecting:

–net inflows in Payments and net issuances of structured notes in Markets,

–the timing impact of First Republic, and

–growth in balances in new and existing client accounts in AWM,

predominantly offset by

–a decline in CCB primarily driven by a decrease in balances in existing accounts due to increased customer spending.

Refer to Liquidity Risk Management on pages 108–115 for additional information.

Selected capital and other metrics

•CET1 capital was $275.5 billion, and the Standardized and Advanced CET1 ratios were 15.7% and 15.8%, respectively.

•SLR was 6.1%.

•TBVPS grew 13.0%, ending 2024 at $97.30.

•As of December 31, 2024, the Firm had eligible end-of-period High Quality Liquid Assets (“HQLA”) of approximately $834 billion and unencumbered marketable securities with a fair value of approximately $594 billion, resulting in approximately $1.4 trillion of liquidity sources. Refer to Liquidity Risk Management on pages 108–115 for additional information.

Refer to Consolidated Results of Operations and Consolidated Balance Sheets Analysis on pages 59–62 and pages 63–65, respectively, for a further discussion of the Firm's results, including the provision for credit losses, and Note 34 for additional information on the First Republic acquisition.

Pre-provision profit, ROTCE, TCE, TBVPS, NII and NIR excluding Markets, and total net revenue on a managed basis are non-GAAP financial measures. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 67–69 for a further discussion of each of these measures.

Business segment highlights

Selected business metrics for each of the Firm’s lines of business (“LOB”) are presented below for the full year of 2024.

(a) Excludes Commercial Card.

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

(c) Reflects the reorganization of the Firm's business segments. Refer to Business Segment & Corporate Results on pages 70–90 for additional information.

(d) Represents client deposits and other third-party liabilities pertaining to the Payments and Securities Services businesses.

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

Refer to the Business Segment & Corporate Results on pages 70–90 for a detailed discussion of results by business segment.

Credit provided and capital raised

JPMorganChase 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 2024, consisting of approximately:

(a)    Includes Individuals and Individual Entities primarily consisting of Global Private Bank clients within AWM.

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

Recent events

•On January 14, 2025, JPMorganChase announced new responsibilities for several of its senior executives:

–Daniel Pinto, President and Chief Operating Officer (“COO”), will retire at the end of 2026. Mr. Pinto will relinquish his responsibilities as President and COO as of June 30, 2025. He will continue to serve the Firm as Vice Chairman through the end of 2026.

–Jennifer Piepszak, Co-Chief Executive Officer of the Commercial & Investment Bank (“CIB”), was named a COO of the Firm, effective January 14, 2025.

–Doug Petno, Co-head of Global Banking, succeeded Ms. Piepszak as Co-Chief Executive Officer of CIB.

•On December 12, 2024, the Firm announced that Michele G. Buck, 63, had been elected as a director of the Firm, effective March 17, 2025. Ms. Buck is Chairman of the Board, President and CEO of The Hershey Company.

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 JPMorganChase’s management, speak only as of the date of this Form 10-K, and are subject to significant risks and uncertainties. Refer to Forward-Looking Statements on page 167 and Part I, Item 1A: Risk Factors on pages 10-37 of this Form 10-K for a further discussion of certain of those risks and uncertainties and the other factors that could cause JPMorganChase’s actual results to differ materially because of those risks and uncertainties. There is no assurance that actual results in 2025 will be in line with the outlook information set forth below, and the Firm does not undertake to update any forward-looking statements.

JPMorganChase’s current outlook for full-year 2025 should be viewed against the backdrop of the global and U.S. economies, financial markets activity, the geopolitical environment, the competitive environment, client and customer activity levels, and regulatory and legislative developments in the U.S. and other countries where the Firm does business. Each of these factors will affect the performance of the Firm. The Firm will continue to make appropriate adjustments to its businesses and operations in response to ongoing developments in the business, economic, regulatory and legal environments in which it operates.

Full-year 2025

•Management expects net interest income to be approximately $94.0 billion and net interest income excluding Markets to be approximately $90.0 billion, market dependent.

•Management expects adjusted expense to be approximately $95.0 billion, market dependent.

•Management expects the net charge-off rate in Card Services to be approximately 3.60%.

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 67–69.

Business Developments

First Republic acquisition

On May 1, 2023, JPMorganChase acquired certain assets and assumed certain liabilities of First Republic Bank (the "First Republic acquisition") from the Federal Deposit Insurance Corporation (“FDIC”), as receiver.

As of December 31, 2024, the Firm had substantially completed the conversion of operations, and the integration of clients, products and services, associated with the First Republic acquisition to align with the Firm’s businesses and operations.

Refer to Note 34 for additional information on First Republic.

CONSOLIDATED RESULTS OF OPERATIONS
This section provides a comparative discussion of JPMorganChase’s Consolidated Results of Operations on a reported basis for the two-year period ended December 31, 2024, unless otherwise specified. Refer to Consolidated Results of Operations on pages 54-57 of the Firm’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”) for a discussion of the 2023 versus 2022 results. Factors that relate primarily to a single business segment or Corporate are discussed in more detail in the results of that segment or Corporate. Refer to pages 161–164 for a discussion of the Critical Accounting Estimates Used by the Firm that affect the Consolidated Results of Operations.

(a)Included operating lease income of $2.8 billion, $2.8 billion and $3.7 billion for the years ended December 31, 2024, 2023 and 2022, respectively. Refer to Note 6 for additional information.

(b)Effective January 1, 2024, as a result of adopting updates to the Accounting for Investments in Tax Credit Structures guidance, the amortization of certain of the Firm’s alternative energy tax-oriented investments that was previously recognized in other income is now recognized in income tax expense. Refer to Notes 1, 6, 14 and 25 for additional information.

(c)Included the net gain related to Visa shares of $7.9 billion recorded in the second quarter of 2024. Refer to Notes 2 and 6 for additional information.

(d)Included the estimated bargain purchase gain of $2.8 billion for the year ended December 31, 2023 associated with the First Republic acquisition. Refer to Notes 6 and 34 for additional information.

2024 compared with 2023

Investment banking fees increased, reflecting in CIB the benefit of favorable market conditions, which resulted in:

•higher debt underwriting fees predominantly driven by higher industry-wide issuances in leveraged loans, and in high-grade and high-yield bonds,

•higher equity underwriting fees driven by higher industry-wide fees and wallet share gains in IPOs, and in follow-on and convertible securities offerings, and

•higher advisory fees driven by higher industry-wide mergers and acquisitions (“M&A”) activity and wallet share gains.

Refer to CIB segment results on pages 77–83 and Note 6 for additional information.

Principal transactions revenue increased driven by CIB, reflecting:

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

predominantly offset by

•lower Fixed Income Markets revenue, reflecting the net impact of declines in revenue across macro businesses and higher revenue in Securitized Products.

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.

The increase in CIB was partially offset by a net decrease in Corporate, reflecting lower revenue in Treasury and CIO, and gains compared with a net loss on certain legacy private equity investments in the prior year.

Refer to CIB segment and Corporate results on pages 77–83 and pages 88–90, respectively, and Note 6 for additional information.

Lending- and deposit-related fees increased, reflecting, in CIB, higher deposit-related fees, including cash management fees in Payments, on higher volume; and higher lending-related fees, including loan commitment fees. These factors were largely offset by a decline in the amortization of the fair value discount on certain acquired lending-related commitments associated with First Republic, primarily in AWM, as certain of the commitments have expired.

Refer to CIB and AWM segment results on pages 77–83 and pages 84–87, respectively, and Note 6 for additional information.

Asset management fees increased, reflecting, in AWM and CCB, higher average market levels and net inflows, as well as higher performance fees in AWM; and in CCB, the timing impact of First Republic. Refer to CCB and AWM segment results on pages 73–76 and pages 84–87, respectively, and Note 6 for additional information.

Commissions and other fees increased, predominantly due to higher brokerage commissions and fees on higher volume, and higher custody fees, in both CIB and AWM, as well as higher annuity sales commissions in CCB. Refer to CCB, CIB and AWM segment results on pages 73–76, pages 77–83 and pages 84–87, respectively, and Note 6 for additional information.

Investment securities losses decreased, reflecting lower losses on sales of securities, primarily 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 results on pages 88–90 and Note 10 for additional information.

Mortgage fees and related income increased in Home Lending, reflecting higher production revenue, which included the timing impact of First Republic. Refer to CCB segment results on pages 73–76, and Note 6 and 15 for additional information.

Card income increased, reflecting higher net interchange on increased debit and credit card sales volume, as well as higher annual fees in CCB, partially offset by an increase in amortization related to new account origination costs. Refer to CCB segment results on pages 73–76 and Note 6 for additional information.

Other income increased, reflecting:

•in Corporate:

–the $7.9 billion net gain related to Visa shares recorded in the second quarter of 2024,

partially offset by

–the absence of the prior-year $2.8 billion estimated bargain purchase gain associated with the First Republic acquisition, and

•in CIB:

–the impact of the adoption of updates to the Accounting for Investments in Tax Credit Structures guidance effective January 1, 2024, resulting in the amortization of certain of the Firm's alternative energy tax-oriented investments previously recognized in other income which is now recognized in income tax expense.

Both periods included impairment losses related to certain equity investments.

The prior year included a gain of $339 million on the original minority interest in China International Fund Management ("CIFM"), partially offset by net investment valuation losses, both in AWM.

Refer to AWM segment results on pages 84–87 for additional information on CIFM; Notes 1, 6, 14 and 25 for additional information on the adoption of updates to the Accounting for Investments in Tax Credit Structures guidance; Notes 2 and 6 for additional information on Visa shares; and Notes 6 and 34 for additional information on the First Republic acquisition.

Net interest income increased driven by the impact of balance sheet actions, primarily reinvestments in the investment securities portfolio, higher revolving balances in Card Services, the timing impact of First Republic, higher wholesale deposit balances and higher Markets net interest income. These factors were largely offset by deposit margin compression across the lines of business and lower average deposit balances in CCB.

The Firm’s average interest-earning assets were $3.5 trillion, up $212 billion, and the yield was 5.50%, up 36 bps. The net yield on these assets, on an FTE basis, was 2.63%, a decrease of 7 bps. The net yield excluding Markets was 3.84%, relatively flat when compared to the prior year.

Refer to the Consolidated average balance sheets, interest and rates schedule on pages 322–326 for additional information. Net yield excluding Markets is a non-GAAP financial measure. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 67–69 for an additional discussion of net yield excluding Markets.

2024 compared with 2023

The provision for credit losses was $10.7 billion, reflecting $8.6 billion of net charge-offs and a $2.0 billion net addition to the allowance for credit losses.

Net charge-offs included $7.8 billion in consumer, predominantly driven by Card Services, reflecting the seasoning of vintages originated in recent years, credit normalization and balance growth, and $0.8 billion in wholesale, primarily in Real Estate, largely concentrated in Office.

The net addition to the allowance for credit losses consisted of:

•$2.1 billion in consumer, reflecting:

–a $2.2 billion net addition in Card Services, predominantly driven by loan growth, reflecting higher revolving balances, including the seasoning of vintages originated in recent years,

partially offset by

–a $125 million net reduction in Home Lending in the first quarter of 2024, and

•a net reduction of $19 million in wholesale, reflecting:

–changes in certain macroeconomic variables, an update to loss assumptions on certain loans in Markets, and a reduction due to charge-offs largely from collateral-dependent loans,

predominantly offset by

–net downgrade activity, primarily in Real Estate, and the impact of incorporating the First Republic portfolio into the Firm’s modeled credit loss estimates in the second quarter of 2024.

The provision in the prior year was $9.3 billion, reflecting net charge-offs of $6.2 billion and a $3.1 billion net addition to the allowance for credit losses, which included $1.2 billion to establish the allowance for the First Republic loans and lending-related commitments in the second quarter of 2023.

Refer to CCB, CIB and AWM segment and Corporate results on pages 73–76, pages 77–83, pages 84–87, and pages 88–90, respectively; Allowance for Credit Losses on pages 137–139; Critical Accounting Estimates Used by the Firm on pages 161–164; and Notes 12 and 13 for additional information on the credit portfolio and the allowance for credit losses.

(a)Includes depreciation expense associated with auto operating lease assets. Refer to Note 18 for additional information.

(b)Refer to Note 6 for additional information.

(c)Included a $1.0 billion contribution of Visa shares to the JPMorgan Chase Foundation recorded in the second quarter of 2024. Refer to Notes 2 and 6 for additional information.

2024 compared with 2023

Compensation expense increased driven by:

•higher revenue-related compensation across the LOBs,

•growth in the number of employees across the LOBs and Corporate, primarily in front office and technology, and

•the impact of First Republic, predominantly in CCB, reflecting timing and the classification of the prior-year expense, which was recognized in other expense in Corporate in the second quarter of 2023 as the individuals associated with First Republic were not employees of the Firm until July 2023.

Noncompensation expense decreased as a result of:

•lower FDIC-related expense recognized in Corporate, which included the impact of a $2.9 billion special assessment recognized in the fourth quarter of 2023, compared with a $725 million increase to the FDIC special assessment recognized in the first quarter of 2024, and

•lower legal expense, reflecting the net impact of declines in CCB, CIB and Corporate, and an increase in AWM,

predominantly offset by

•a $1.0 billion contribution of Visa shares to the JPMorgan Chase Foundation recorded in the second quarter of 2024 in Corporate,

•higher investments in technology in the businesses, as well as marketing, predominantly in CCB,

•higher occupancy expense, which included the impact of net additions to the Firm's properties,

•higher distribution fees in AWM and brokerage expense in CIB, and

•the timing impact associated with First Republic, offset by the alignment of expense to compensation expense, as noted above.

Refer to Notes 2 and 6 for additional information on Visa shares; Note 6 for additional information on other expense; and Note 34 for additional information on the First Republic acquisition.

(a)Effective January 1, 2024, as a result of adopting updates to the Accounting for Investments in Tax Credit Structures guidance, the amortization of certain of the Firm’s alternative energy tax-oriented investments is now recognized in income tax expense. Refer to Notes 1, 6, 14 and 25 for additional information.

2024 compared with 2023

The effective tax rate increased predominantly driven by:

•the adoption of updates to the Accounting for Investments in Tax Credit Structures guidance on January 1, 2024, and

•a higher level of pretax income and changes in the mix of income and expenses subject to U.S. federal, state and local taxes, including the impact of the net gain on Visa shares and the contribution of Visa shares to the JPMorgan Chase Foundation recorded in the second quarter of 2024.

The prior year included the impact to income tax expense associated with the First Republic acquisition that was reflected in the estimated bargain purchase gain, and an income tax benefit related to the finalization of certain income tax regulations, both of which resulted in a reduction in the Firm's effective tax rate.

Refer to Note 25 for additional information.

CONSOLIDATED BALANCE SHEETS AND CASH FLOWS ANALYSIS

Consolidated balance sheets analysis

The following is a discussion of the significant changes between December 31, 2024 and 2023. Refer to pages 161–164 for a discussion of the Critical Accounting Estimates Used by the Firm that affect the Consolidated Balance Sheets.

Cash and due from banks and deposits with banks decreased driven by higher investment securities in Treasury and CIO, and Markets activities in CIB.

Federal funds sold and securities purchased under resale agreements increased driven by Markets, reflecting higher client-driven market-making activities.

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

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

Trading assets increased predominantly due to higher levels of debt and equity instruments in Markets related to client-driven market-making activities. Refer to Notes 2 and 5 for additional information.

Investment securities increased due to:

•higher available-for-sale ("AFS") securities, reflecting net purchases, primarily U.S. Treasuries and non-U.S. government debt securities, partially offset by maturities and paydowns, and

•lower held to-maturity (“HTM”) securities driven by maturities and paydowns.

Refer to Corporate results on pages 88–90,

Investment Portfolio Risk Management on page 140, and Notes 2 and 10 for additional information.

Loans increased, reflecting:

•higher outstanding balances in Card Services driven by growth in new accounts and normalization of revolving balances,

•higher wholesale loans in CIB, and

•higher securities-based lending in AWM due to higher client demand,

partially offset by

•a decline in Home Lending as paydowns and loan sales outpaced originations.

The allowance for loan losses increased, reflecting a net addition to the allowance for loan losses of $1.9 billion, consisting of:

•$2.1 billion net addition in consumer, primarily in Card Services, predominantly driven by loan growth, reflecting higher revolving balances, including the seasoning of vintages originated in recent years, partially offset by a net reduction in Home Lending in the first quarter of 2024, and

•a net reduction of $176 million in wholesale, reflecting:

–changes in certain macroeconomic variables, an update to loss assumptions on certain loans in

Markets, and a reduction due to charge-offs largely from collateral-dependent loans,

predominantly offset by

–net downgrade activity, primarily in Real Estate, and the impact of incorporating the First Republic portfolio into the Firm’s modeled credit loss estimates in the second quarter of 2024.

There was also a $128 million net addition to the allowance for lending-related commitments recognized in other liabilities on the Consolidated balance sheets.

Refer to Consolidated Results of Operations and Credit and Investment Risk Management on pages 59–62 and pages 117–140, respectively, Critical Accounting Estimates Used by the Firm on pages 161–164, and Notes 2, 3, 12 and 13 for additional information on loans and the total allowance for credit losses.

Accrued interest and accounts receivable decreased primarily driven by lower receivables in Payments related to the timing of processing payment activities, due to December 31, 2023 falling on a weekend, as well as lower client receivables related to client-driven activities in Markets.

Premises and equipment increased primarily as a result of the construction-in-process associated with the Firm's headquarters, and purchases of properties. Refer to Notes 16 and 18 for additional information.

Goodwill, MSRs and other intangibles: Refer to Note 15 for additional information.

Other assets increased primarily due to higher cash collateral placed with central counterparties ("CCP") in Markets, the impact of the adoption of updates to the Accounting for Investments in Tax Credit Structures guidance effective January 1, 2024, and higher auto operating lease assets in CCB. Refer to Notes 1, 6, 14 and 25 for additional information on updates to the accounting guidance.

Deposits increased, reflecting:

•an increase in CIB due to net inflows predominantly in Payments, largely offset by net maturities of structured notes in Markets,

•an increase in AWM as a result of growth in balances in new and existing client accounts, reflecting the impact of higher-yielding product offerings, largely offset by continued migration into other investments, and

•a decline in CCB primarily driven by a decrease in balances in existing accounts due to increased customer spending and migration into higher-yielding investments, predominantly offset by new accounts.

Federal funds purchased and securities loaned or sold under repurchase agreements increased driven by Markets, reflecting higher client-driven market-making activities and higher secured financing of trading assets.

Short-term borrowings increased driven by Markets, reflecting net issuance of structured notes due to client demand, and higher financing requirements.

Refer to Liquidity Risk Management on pages 108–115 for additional information on deposits, federal funds purchased and securities loaned or sold under repurchase agreements, and short-term borrowings; Notes 2 and 17 for deposits; and Note 11 for federal funds purchased and securities loaned or sold under repurchase agreements.

Trading liabilities increased due to client-driven market-making activities primarily in Fixed Income Markets, which resulted in higher levels of short positions in debt instruments. Refer to Notes 2 and 5 for additional information.

Accounts payable and other liabilities decreased primarily driven by lower payables in Payments related to the timing of processing payment activities, due to December 31, 2023 falling on a weekend, as well as lower client payables related to client-driven activities in Markets, partially offset by the impact of the adoption of updates to the Accounting for Investments in Tax Credit Structures guidance effective January 1, 2024. Refer to Note 19 for additional information on accounts payable; and Notes 1, 6, 14 and 25 for additional information on updates to the accounting guidance.

Beneficial interests issued by consolidated VIEs increased driven by the issuance of credit card securitizations in Treasury and CIO, and activity in municipal bond vehicles in CIB.

Refer to Liquidity Risk Management on pages 108–115; and Notes 14 and 28 for additional information on Firm-sponsored VIEs and loan securitization trusts.

Long-term debt increased, primarily driven by:

•net issuances of structured notes in Markets due to client demand,

partially offset by

•a decline in Treasury and CIO, reflecting the net impact of lower FHLB advances and higher long-term debt from net issuances.

Refer to Liquidity Risk Management on pages 108–115 and Note 34 for additional information on the First Republic acquisition.

Stockholders’ equity increased, reflecting:

•net income,

largely offset by

•the impact of capital actions, including repurchases of common shares, the declaration of common and preferred stock dividends, and net redemption of preferred stock, and

•net unrealized losses in AOCI, including the impact of higher interest rates on cash flow hedges in Treasury and CIO.

Refer to Consolidated Statements of changes in stockholders’ equity on page 175, Capital Actions on page 105, and Note 24 for additional information.

Consolidated cash flows analysis

The following is a discussion of cash flow activities during the years ended December 31, 2024 and 2023. Refer to Consolidated cash flows analysis on page 61 of the Firm’s 2023 Form 10-K for a discussion of the 2022 activities.

Operating activities

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

•In 2024, cash used resulted from higher trading assets and higher securities borrowed, largely offset by net income.

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

Investing activities

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

•In 2024, cash used resulted from net purchases of investment securities, net loan originations and higher securities purchased under resale agreements, partially offset by proceeds from sales and securitizations of loans held-for-investment.

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

Financing activities

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

•In 2024, cash provided primarily reflected higher securities loaned or sold under repurchase agreements and net proceeds from long- and short-term borrowings, partially offset by net redemption of preferred stock.

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

•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 63–65, Capital Risk Management on pages 97–107, and Liquidity Risk Management on pages 108–115, and the Consolidated Statements of Cash Flows on page 176 for a further discussion of the activities affecting the Firm’s cash flows.

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

Non-GAAP financial measures

The Firm prepares its Consolidated Financial Statements in accordance with U.S. GAAP; these financial statements appear on pages 172–176. That presentation, which is referred to as “reported” basis, provides the reader with an understanding of the Firm’s results that can be tracked consistently from year-to-year and enables a comparison of the Firm’s performance with the U.S. GAAP financial statements of other companies.

In addition to analyzing the Firm’s results on a reported basis, management reviews Firmwide results, including the overhead ratio, on a “managed” basis; these Firmwide managed basis results are non-GAAP financial measures. The Firm also reviews the results of the lines of business on a managed basis. The Firm’s definition of managed basis starts, in each case, with the reported U.S. GAAP results and includes certain reclassifications to present total net revenue for the Firm as a whole, and for each of the reportable business segments and Corporate, on an FTE basis. Accordingly, revenue from investments that receive tax credits and tax-exempt securities is presented in the managed results on a basis comparable to taxable investments and securities. These financial measures

allow management to assess the comparability of revenue from year-to-year arising from both taxable and tax-exempt sources. The corresponding income tax impact related to tax-exempt items is recorded within income tax expense. These adjustments have no impact on net income as reported by the Firm as a whole or by each of the lines of business and Corporate.

Management also uses certain non-GAAP financial measures at the Firm and business-segment levels because these other non-GAAP financial measures provide information to investors about the underlying operational performance and trends of the Firm or of the particular business segment, as the case may be, and therefore facilitate a comparison of the Firm or the business segment with the performance of its relevant competitors. Refer to Business Segment & Corporate Results on pages 70–90 for additional information on these non-GAAP measures. Non-GAAP financial measures used by the Firm may not be comparable to similarly named non-GAAP financial measures used by other companies.

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

(a)Effective January 1, 2024, the Firm adopted updates to the Accounting for Investments in Tax Credit Structures guidance, under the modified retrospective method. Refer to Notes 1, 6, 14 and 25 for additional information.

(b)Predominantly recognized in CIB and Corporate.

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

In addition to reviewing net interest income, net yield, and noninterest revenue on a managed basis, management also reviews these metrics excluding Markets, as shown below. Markets consists of CIB’s Fixed Income Markets and Equity Markets. These metrics, which exclude Markets, are non-GAAP financial measures. Management reviews these metrics to assess the performance of the Firm’s lending, investing (including asset-liability management) and deposit-raising activities, apart from any volatility associated with Markets activities. In addition, management also assesses Markets business performance on a total revenue basis as offsets may occur across revenue lines. Management believes that these measures provide investors and analysts with alternative measures to analyze the revenue trends of the Firm.

(a)Includes the effect of derivatives that qualify for hedge accounting. Taxable-equivalent amounts are used, also where applicable. Refer to Note 5 for additional information on hedge accounting.

(b)Refer to pages 81–82 for further information on Markets.

(c)Effective January 1, 2024, the Firm adopted updates to the Accounting for Investment in Tax Credit Stricture guidance, under the modified retrospective method. Refer to Notes 1, 6, 14 and 25 for additional information.

(d)Includes the market-related revenues of the former Commercial Banking business segment. Prior-period amounts have been revised to conform with the current presentation.

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

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

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

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

TCE, ROTCE and TBVPS

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

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

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

BUSINESS SEGMENT & CORPORATE RESULTS

The Firm is managed on an LOB basis. Effective in the second quarter of 2024, the Firm reorganized its reportable business segments by combining the former Corporate & Investment Bank and Commercial Banking business segments to form one reportable segment, the Commercial & Investment Bank (“CIB”). As a result of the reorganization, the Firm has three reportable business segments – Consumer & Community Banking, Commercial & Investment Bank, and Asset & Wealth Management – with the remaining activities in Corporate.

The business segments are determined based on the products and services provided, or the type of customer served, and they reflect the manner in which financial information is evaluated by the Firm’s Operating Committee, whose members act collectively as the Firm’s chief operating decision maker. 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 67–69 for a definition of managed basis.

The following table depicts the Firm’s reportable business segments.

Description of business segment reporting methodology

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

Revenue sharing

When business segments or businesses within each segment join efforts to sell products and services to the Firm’s clients and customers, the participating businesses 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 segments or businesses involved in the transaction. The segment and business results reflect these revenue-sharing agreements.

Expense allocation

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

Funds transfer pricing

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

The funds transfer pricing process considers the interest rate and liquidity risk characteristics of assets and liabilities and off-balance sheet products. Periodically, the methodology and assumptions utilized in the FTP process are adjusted to reflect economic conditions and other factors, which may impact the allocation of net interest income to the segments. Effective in the fourth quarter of 2024, the Firm updated its FTP with respect to consumer deposits, which resulted in an increase in the funding benefit reflected within CCB’s net interest income that is fully offset in Corporate, with no effect on the Firm’s net interest income.

As a result of higher average interest rates, the cost of funds for assets and the FTP benefit earned for liabilities have generally increased in the current year, impacting the net interest income of the business segments. During the period ended December 31, 2024, this has resulted in a higher cost of funds for loans and Markets activities. In addition, rates paid to deposit holders increased more than the FTP benefit increase during the year, resulting in deposit margin compression.

Foreign exchange risk

Foreign exchange risk is transferred from the LOBs and Other Corporate to Treasury and CIO for certain revenues and expenses. Treasury and CIO manages these risks centrally and reports the impact of foreign exchange rate movements related to the transferred risk in its results. Refer to Market Risk Management on page 149 for additional information.

Debt expense and preferred stock dividend allocation

As part of the FTP process, almost all of the cost of the credit spread component of outstanding unsecured long-term debt and preferred stock dividends is allocated to the reportable business segments, while the balance of the cost is retained in Corporate. The methodology to allocate the cost of unsecured long-term debt and preferred stock dividends to the business segments is aligned with the relevant regulatory capital requirements and funding needs of the LOBs, as applicable. The allocated cost of unsecured long-term debt is included in a business segment’s net interest income, and net income is reduced by preferred stock dividends, to arrive at a business segment’s net income applicable to common equity. Refer to Capital Risk Management on pages 97–107 for additional information.

Capital allocation

The amount of capital assigned to each LOB and Corporate is referred to as equity. The Firm’s current equity allocation methodology incorporates Basel III Standardized risk-weighted assets (“RWA”) and the global systemically important banks (“GSIB”) surcharge, both under rules currently in effect, as well as a simulation of capital depletion in a severe stress environment. At least annually, the assumptions, judgments and methodologies used to allocate capital are reassessed and, as a result, the capital allocated to the LOBs and Corporate may change. Refer to Line of business and Corporate equity on page 104 for additional information on capital allocation.

Segment & Corporate Results – Managed Basis

The following tables summarize the Firm’s results by business segments and Corporate for the periods indicated.

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

(b)Included a $7.9 billion net gain related to Visa shares recorded in the second quarter of 2024. Refer to Notes 2 and 6 for additional information.

(c)Included a $1.0 billion contribution of Visa shares to the JPMorgan Chase Foundation recorded in the second quarter of 2024. Refer to Notes 2 and 6 for additional information.

Refer to Note 32 for further details on total net revenue and total noninterest expense.

The following sections provide a comparative discussion of the Firm’s results by business segments and Corporate as of or for the years ended December 31, 2024 and 2023, unless otherwise specified.

CONSUMER & COMMUNITY BANKING

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

(a)Primarily includes operating lease income and commissions and other fees. Operating lease income was $2.8 billion, $2.8 billion and $3.6 billion for the years ended December 31, 2024, 2023 and 2022, respectively.

(b)Included depreciation expense on leased assets of $1.7 billion, $1.7 billion and $2.4 billion for the years ended December 31, 2024, 2023 and 2022, respectively.

(c)Included MSR risk management results of $159 million, $131 million and $93 million for the years ended December 31, 2024, 2023 and 2022, respectively.

(d)In the second quarter of 2023, substantially all of the expense associated with First Republic was reported in Corporate. Commencing in the third quarter of 2023, the expense was aligned to the appropriate LOB.

2024 compared with 2023

Net income was $17.6 billion, down 17%.

Net revenue was $71.5 billion, up 2%.

Net interest income was $54.9 billion, flat when compared with the prior year, reflecting:

•lower NII in Banking & Wealth Management ("BWM"), predominantly driven by deposit margin compression and lower average deposits,

offset by

•higher Card Services NII, predominantly driven by higher revolving balances, and

•the timing impact of First Republic in Home Lending.

Noninterest revenue was $16.6 billion, up 10%, predominantly driven by:

•higher asset management fees reflecting higher average market levels, including the timing impact of First Republic and, to a lesser extent, net inflows, as well as higher commissions from annuity sales in BWM,

•higher card income, driven by higher net interchange reflecting increased debit and credit card sales volume, and higher annual fees, partially offset by an increase in amortization related to new account origination costs, as well as

•higher production revenue in Home Lending, including the timing impact of First Republic.

Refer to Note 6 for additional information on card income, asset management fees, and commissions and other fees; and Critical Accounting Estimates on pages 161–164 for additional information on the credit card rewards liability.

Refer to Executive Overview on page 54 and Note 34 for additional information on First Republic.

Noninterest expense was $38.0 billion, up 9%, reflecting First Republic-related expense that was aligned to CCB from Corporate starting in the third quarter of 2023, impacting both compensation and noncompensation expense.

The increase in expense also reflected:

•higher compensation expense, largely driven by higher revenue-related compensation predominantly for advisors and bankers, and an increase in the number of employees, including in technology, and

•higher noncompensation expense, largely driven by continued investments in technology and marketing, as well as higher operating losses, partially offset by lower legal expense.

The provision for credit losses was $10.0 billion, reflecting:

•net charge-offs of $7.9 billion, up $2.6 billion, including $2.4 billion in Card Services, reflecting the seasoning of vintages originated in recent years, credit normalization and balance growth, and

•a $2.0 billion net addition to the allowance for credit losses, consisting of:

–$2.2 billion in Card Services, predominantly driven by loan growth, reflecting higher revolving balances, including the seasoning of vintages originated in recent years,

partially offset by

–a $125 million net reduction in Home Lending, primarily due to improvements in the outlook for home prices in the first quarter of 2024.

The provision in the prior year was $6.9 billion, reflecting net charge-offs of $5.3 billion, a $1.2 billion net addition to the allowance for credit losses, predominantly driven by Card Services, and a $408 million net addition to the allowance for credit losses to establish the allowance for the First Republic loans and lending-related commitments in the second quarter of 2023.

Refer to Credit and Investment Risk Management on pages 117–140 and Allowance for Credit Losses on pages 137–139 for a further discussion of the credit portfolios and the allowance for credit losses.

(a)At December 31, 2024, 2023 and 2022, Home Lending loans held-for-sale and loans at fair value were $8.1 billion, $3.4 billion and $3.0 billion, respectively.

(b)In the fourth quarter of 2023, CCB transferred approximately $18.8 billion of deposits associated with First Republic to AWM and CIB.

(c)Average Home Lending loans held-for-sale and loans at fair value were $7.1 billion, $4.8 billion and $7.3 billion for the years ended December 31, 2024, 2023 and 2022, respectively.

(a)Excludes mortgage loans past due and insured by U.S. government agencies, which are primarily 90 or more days past due. These loans have been excluded based upon the government guarantee. At December 31, 2024, 2023 and 2022, mortgage loans 90 or more days past due and insured by U.S. government agencies were $84 million, $123 million and $187 million, respectively. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance

(b)At December 31, 2024, 2023 and 2022, excluded mortgage loans insured by U.S. government agencies of $122 million, $176 million and $258 million, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee.

(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 84–87 for additional information.

(e)Firmwide mortgage origination volume was $47.4 billion, $41.4 billion and $81.8 billion for the years ended December 31, 2024, 2023 and 2022, respectively.

COMMERCIAL & INVESTMENT BANK(a)

The Commercial & Investment Bank is comprised of the Banking & Payments and Markets & Securities Services businesses. These businesses offer investment banking, lending, payments, market-making, financing, custody and securities products and services to a global base of corporate and institutional clients. Banking & Payments offers products and services in all major capital markets, including advising on corporate strategy and structure, capital-raising in equity and debt markets, and loan origination and syndication. Banking & Payments also provides services that enable clients to manage payments globally across liquidity and account solutions, commerce solutions, clearing, trade, and working capital. Markets & Securities Services includes Markets, which is a global market-maker across products, including cash and derivative instruments, and also offers sophisticated risk management solutions, lending, prime brokerage, clearing and research. Markets & Securities Services also includes Securities Services, a leading global custodian that provides custody, fund services, liquidity and trading services, and data solutions products.

(a)Reflects the reorganization of the Firm's business segments in the second quarter of 2024. Refer to Business Segment & Corporate Results on pages 70–90 for additional information.

(a)Included tax equivalent adjustments primarily from income tax credits from investments in alternative energy, affordable housing and new markets, income from tax-exempt securities and loans, and the related amortization and other tax benefits of the investments in alternative energy and affordable housing of $2.8 billion, $4.0 billion and $3.3 billion for the years ended December 31, 2024, 2023 and 2022, respectively. Effective January 1, 2024, the Firm adopted updates to the Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method guidance, under the modified retrospective method. Refer to Notes 1, 6, 14 and 25 for additional information.

(a)In the fourth quarter of 2024, certain net funding costs that were previously allocated to Fixed Income Markets were reclassified to Equity Markets. Prior-period amounts have been revised to conform with the current presentation.

(b)Consists primarily of centrally-managed credit valuation adjustments (“CVA”), funding valuation adjustments (“FVA”) on derivatives, other valuation adjustments, and certain components of fair value option elected liabilities, which are primarily reported in principal transactions revenue. Results are presented net of associated hedging activities and net of CVA and FVA amounts allocated to Fixed Income Markets and Equity Markets. Refer to Notes 2, 3 and 24 for additional information.

Banking & Payments Revenue by Client Coverage Segment: (a)Global Corporate Banking & Global Investment Banking provides banking products and services generally to large corporations, financial institutions and merchants. Commercial Banking provides banking products and services generally to middle market clients, including start-ups, small and mid-sized companies, local governments, municipalities, and nonprofits, as well as to commercial real estate clients. Other includes amounts related to credit protection purchased against certain retained loans and lending-related commitments in Lending, the impact of equity investments in Payments and revenues not aligned with a primary client coverage segment.(a)Global Banking is a client coverage view within the Banking & Payments business and is comprised of the Global Corporate Banking, Global Investment Banking and Commercial Banking client coverage segments.

2024 compared with 2023

Net income was $24.8 billion, up 23%.

Net revenue was $70.1 billion, up 9%.

Banking & Payments revenue was $35.3 billion, up 11%.

•Investment Banking revenue was $9.6 billion, up 36%. Investment Banking fees were up 37%, driven by higher fees across products. The Firm ranked #1 for Global Investment Banking fees, according to Dealogic.

–Debt underwriting fees were $4.1 billion, up 55%, predominantly driven by higher industry-wide issuances in leveraged loans, and in high-grade and high-yield bonds.

–Equity underwriting fees were $1.7 billion, up 47%, driven by increased industry-wide fees and wallet share gains in IPOs, and in follow-on and convertible securities offerings.

–Advisory fees were $3.3 billion, up 17%, driven by increased industry-wide M&A activity and wallet share gains.

•Payments revenue was $18.1 billion, up 1%, driven by fee growth on higher volumes as well as higher average deposits, predominantly offset by deposit margin compression, reflecting higher rates paid, and higher deposit-related client credits.

•Lending revenue was $7.5 billion, up 8%, predominantly driven by the impacts of higher rates and the First Republic acquisition.

Markets & Securities Services revenue was $34.8 billion, up 7%. Markets revenue was $30.0 billion, up 7%.

•Equity Markets revenue was $9.9 billion, up 13%, driven by higher revenue in Equity Derivatives and Prime Finance.

•Fixed Income Markets revenue was $20.1 billion, up 5%, driven by higher revenue in the Securitized Products Group, Currencies & Emerging Markets, and Credit, largely offset by lower revenue in Rates and Commodities.

•Securities Services revenue was $5.1 billion, up 7%, predominantly driven by fee growth on higher client activity and market levels.

•Credit Adjustments & Other was a loss of $244 million, compared with a loss of $280 million in the prior year.

Noninterest expense was $35.4 billion, up 4%, driven by higher compensation expense, including revenue-related compensation and an increase in the number of employees, as well as higher technology and brokerage expense partially offset by lower legal expense.

The provision for credit losses was $762 million, reflecting:

•net charge-offs of $617 million, primarily in Real Estate, largely concentrated in Office, and

•a $145 million net addition to the allowance for credit losses, driven by

–net downgrade activity, primarily in Real Estate, and the impact of incorporating the First Republic portfolio into the Firm's modeled credit loss estimates in the second quarter of 2024,

predominantly offset by

–changes in certain macroeconomic variables, an update to loss assumptions on certain loans in Markets, and a reduction due to charge-offs predominantly from collateral-dependent loans.

The provision in the prior year was $2.1 billion, reflecting a $1.5 billion net addition to the allowance for credit losses, which included $608 million to establish the allowance for the First Republic loans and lending-related commitments in the second quarter of 2023, and net charge-offs of $588 million.

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

(b)Refer to page 78 for a description of each of the client coverage segments.

(c)In the fourth quarter of 2023, certain deposits associated with First Republic were transferred to CIB from CCB.

(a)Allowance for loan losses of $435 million, $251 million and $257 million were held against these nonaccrual loans at December 31, 2024, 2023 and 2022, respectively.

(b)Excludes mortgage loans past due and insured by U.S. government agencies, which are primarily 90 or more days past due. These loans have been excluded based upon the government guarantee. At December 31, 2024, 2023 and 2022, mortgage loans 90 or more days past due and insured by U.S. government agencies were $37 million, $59 million and $115 million, respectively.

(c)Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.

(d)Includes $72 million related to a purchased credit deteriorated (“PCD”) loan that was charged off in the fourth quarter of 2024.

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

(a)Source: Dealogic as of January 2, 2025. Reflects the ranking of revenue wallet and market share.

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

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

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

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

Markets revenue

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

Principal transactions reflects revenue on financial instruments and commodities transactions that arise from client-driven market-making activity. Principal transactions revenue includes amounts recognized upon executing new transactions with market participants, as well as “inventory-related revenue,” which is revenue recognized from gains and losses on derivatives and other instruments that the Firm has been holding in anticipation of, or in response to, client demand, and changes in the fair value of instruments

used by the Firm to actively manage the risk exposure arising from such inventory. Principal transactions revenue recognized upon executing new transactions with market participants is affected by many factors including the level of client activity, the bid-offer spread (which is the difference between the price at which a market participant is willing and able to sell an instrument to the Firm and the price at which another market participant is willing and able to buy it from the Firm, and vice versa), market liquidity and volatility. These factors are interrelated and sensitive to the same factors that drive inventory-related revenue, which include general market conditions, such as interest rates, foreign exchange rates, credit spreads, and equity and commodity prices, as well as other macroeconomic conditions.

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

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

(b)Markets consists of Fixed Income Markets and Equity Markets. Loss days represent the number of days for which Markets recorded losses in total net revenue, which includes revenue related to both trading and non-trading positions. The loss days determined under this measure differ from the measure used to determine backtesting gains and losses. Daily backtesting gains and losses include positions in the Firm’s Risk Management value-at-risk ("VaR") measure and exclude certain components of total net revenue, which may more than offset backtesting gains or losses on a particular day. For more information on daily backtesting gains and losses, refer to the VaR discussion on pages 143–145.

(c)In the fourth quarter of 2024, certain net funding costs that were previously allocated to Fixed Income Markets were reclassified to Equity Markets. Prior-period amounts have been revised to conform with the current presentation.

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

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

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

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

ASSET & WEALTH MANAGEMENT

Asset & Wealth Management, with client assets of $5.9 trillion, is a global leader in investment and wealth management. Asset Management Offers multi-asset investment management solutions across equities, fixed income, alternatives and money market funds to institutional and retail investors providing for a broad range of clients’ investment needs.Global Private BankProvides retirement products and services, brokerage, custody, estate planning, lending, deposits and investment management to high net worth clients.The majority of AWM’s client assets are in actively managed portfolios.

(a)Includes the amortization of the fair value discount on certain acquired lending-related commitments associated with First Republic. The discount is deferred in other liabilities and recognized on a straight-line basis over the commitment period and was largely recognized in 2023 as the commitments were generally short term. Refer to Note 34 for additional information.

(b)Includes the gain on the original minority interest in CIFM upon the Firm’s acquisition of the remaining 51% interest in the entity.

2024 compared with 2023

Net income was $5.4 billion, up 4%.

Net revenue was $21.6 billion, up 9%. Net interest income was $6.6 billion, up 5%. Noninterest revenue was $15.0 billion, up 11%.

Revenue from Asset Management was $10.2 billion, up 11%, driven by:

•higher asset management fees, reflecting higher average market levels and strong net inflows, as well as

•higher performance fees.

The prior year included a gain of $339 million on the original minority interest in CIFM upon the Firm’s acquisition of the remaining 51% interest in the entity.

Revenue from Global Private Bank was $11.4 billion, up 7%, driven by:

•higher noninterest revenue, reflecting:

–higher management fees on strong net inflows and higher average market levels, as well as higher brokerage fees,

partially offset by

–a decline in the amortization of the fair value discount on certain acquired lending-related commitments associated with First Republic that have expired, and

•higher net interest income driven by:

–higher average deposits associated with First Republic, which were transferred to AWM from CCB in the fourth quarter of 2023, as well as wider spreads on loans and higher average loans,

largely offset by

–deposit margin compression reflecting higher rates paid.

The prior year included net investment valuation losses.

Noninterest expense was $14.4 billion, up 13%, predominantly driven by:

•higher compensation, including revenue-related compensation, and continued growth in private banking advisor teams, and

•higher distribution fees and legal expense,

The provision for credit losses was a net benefit of $68 million.

The provision in the prior year was $159 million, reflecting a $146 million addition to the allowance for credit losses to establish the allowance for the First Republic loans and lending-related commitments in the second quarter of 2023.

(a)Represents the Morningstar Rating for all domiciled funds except for Japan domiciled funds which use Nomura. Includes only Asset Management retail active open-ended mutual funds and active ETFs that have a rating. Excludes money market funds, Undiscovered Managers Fund, and Brazil domiciled funds.

(b)Quartile ranking sourced from Morningstar, Lipper and Nomura based on country of domicile. Includes only Asset Management retail active open-ended mutual funds and active ETFs that are ranked by the aforementioned sources. Excludes money market funds, Undiscovered Managers Fund, and Brazil domiciled funds.

(c)Loans, deposits and related credit data and quality statistics relate to the Global Private Bank business.

(d)In the fourth quarter of 2023, certain deposits associated with First Republic were transferred to AWM from CCB.

Client assets

2024 compared with 2023

Assets under management were $4.0 trillion and client assets were $5.9 trillion, each up 18%, driven by continued net inflows and higher market levels.

(a)Includes CCB client investment assets invested in managed accounts and J.P. Morgan mutual funds where AWM is the investment manager.