JP MORGAN CHASE(JPM) - 2025 Q1 - Quarterly Report

Financial Highlights & Overview Consolidated Financial Highlights JPMorgan Chase reported Q1 2025 net income of $14.6 billion, up 9% YoY, on $45.3 billion total net revenue, with strong profitability and capital ratios including an 18% ROE and 15.4% CET1 ratio Selected Financial Data (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total net revenue | $45,310 million | $41,934 million | | Provision for credit losses | $3,305 million | $1,884 million | | Net income | $14,643 million | $13,419 million | | Diluted EPS | $5.07 | $4.44 | | ROE | 18% | 17% | | ROTCE | 21% | 21% | | CET1 capital ratio | 15.4% | 15.0% | - Total assets at the end of Q1 2025 were $4.36 trillion, with total stockholders' equity at $351.4 billion[8] Executive Overview The firm's Q1 2025 results were strong, bolstered by a $588 million gain from the First Republic acquisition, despite a significant increase in provision for credit losses to $3.3 billion due to macroeconomic outlook changes - The firm's results included a $588 million pre-tax gain related to an agreement with the FDIC concerning the First Republic acquisition[23][25] - Net interest income (NII) rose 1% to $23.3 billion, while NII excluding the Markets business fell 2% to $22.6 billion, reflecting deposit margin compression[27] - Noninterest revenue grew 17% to $22.0 billion, driven by higher Markets revenue, the First Republic gain, and increased asset management fees[27] - The provision for credit losses increased 75% YoY to $3.3 billion, including $2.3 billion in net charge-offs and a net allowance build of $973 million[27][28] - The firm maintained a strong capital position with a CET1 ratio of 15.4% and grew Tangible Book Value Per Share (TBVPS) by 13% to $100.36[33] Full-Year 2025 Outlook JPMorgan Chase projects full-year 2025 net interest income of approximately $94.5 billion, adjusted expenses around $95.0 billion, and a Card Services net charge-off rate of approximately 3.60% Full-Year 2025 Outlook | Metric | Expected Value | | :--- | :--- | | Net interest income | ~$94.5 billion | | Net interest income excluding Markets | ~$90.0 billion | | Adjusted expense | ~$95.0 billion | | Card Services net charge-off rate | ~3.60% | Consolidated Financial Performance Consolidated Results of Operations Q1 2025 total net revenue increased 8% to $45.3 billion, driven by noninterest revenue growth, while provision for credit losses rose 75% to $3.3 billion, contributing to a 9% net income increase Revenue Breakdown (Q1 2025 vs Q1 2024) | Revenue Component | Q1 2025 (Millions) | Q1 2024 (Millions) | Change | | :--- | :--- | :--- | :--- | | Investment banking fees | $2,178 | $1,954 | 11% | | Principal transactions | $7,614 | $6,790 | 12% | | Asset management fees | $4,700 | $4,146 | 13% | | Other income | $1,923 | $1,128 | 70% | | Noninterest revenue | $22,037 | $18,852 | 17% | | Net interest income | $23,273 | $23,082 | 1% | | Total net revenue | $45,310 | $41,934 | 8% | - The provision for credit losses was $3.3 billion, consisting of $2.3 billion in net charge-offs and a $973 million net addition to the allowance for credit losses, mainly due to changes in the macroeconomic outlook[59][60] - Noninterest expense increased 4% YoY, driven by higher compensation (up 7%), marketing, and technology costs, partially offset by a favorable swing in FDIC-related expenses[64][65][68] - The effective tax rate decreased to 20.5% from 22.4% in the prior year, primarily due to higher benefits from employee share-based awards[66][67] Consolidated Balance Sheets and Cash Flows Analysis Total assets increased 9% to $4.4 trillion by Q1 2025, driven by trading assets and securities financing, with deposits growing 4% to $2.5 trillion, and stockholders' equity rising 2% to $351.4 billion Balance Sheet Changes (Q1 2025 vs. YE 2024) | Balance Sheet Item | Mar 31, 2025 (Millions) | Dec 31, 2024 (Millions) | Change | | :--- | :--- | :--- | :--- | | Total Assets | $4,357,856 | $4,002,814 | 9% | | Trading Assets | $875,203 | $637,784 | 37% | | Loans, net | $1,330,487 | $1,323,643 | 1% | | Deposits | $2,495,877 | $2,406,032 | 4% | | Total Liabilities | $4,006,436 | $3,658,056 | 10% | | Total Stockholders' Equity | $351,420 | $344,758 | 2% | - The increase in assets was driven by a 46% rise in Federal funds sold and securities purchased under resale agreements and a 37% increase in Trading assets, reflecting higher client-driven market-making activities[70][71][72] - The allowance for loan losses increased by $863 million, driven by changes in the macroeconomic outlook[74] - Cash used in operating activities was $251.8 billion, primarily due to higher trading assets, while cash provided by financing activities was $318.1 billion, reflecting higher deposits and securities financing[86][91][92] Business Segment & Corporate Results Consumer & Community Banking (CCB) CCB's net income decreased 8% to $4.4 billion despite a 4% revenue increase to $18.3 billion, primarily due to a 37% rise in provision for credit losses driven by card loan seasoning CCB Financial Performance (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (Millions) | Q1 2024 (Millions) | Change | | :--- | :--- | :--- | :--- | | Total net revenue | $18,313 | $17,653 | 4% | | Provision for credit losses | $2,629 | $1,913 | 37% | | Net income | $4,425 | $4,831 | -8% | | ROE | 31% | 35% | | - Debit and credit card sales volume increased 7% YoY to $448.7 billion[131] - Average deposits decreased 2% YoY, while client investment assets grew 7% YoY[131] - The Card Services net charge-off rate increased to 3.58% from 3.32% in the prior year, reflecting the seasoning of recent loan vintages[129] Commercial & Investment Bank (CIB) CIB reported a strong quarter with net income up 5% to $6.9 billion and revenue up 12% to $19.7 billion, driven by significant growth in Markets and Investment Banking fees CIB Financial Performance (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (Millions) | Q1 2024 (Millions) | Change | | :--- | :--- | :--- | :--- | | Total net revenue | $19,666 | $17,584 | 12% | | Provision for credit losses | $705 | $1 | NM | | Net income | $6,942 | $6,622 | 5% | | ROE | 18% | 20% | | - Markets revenue increased 21% YoY, with Fixed Income Markets up 8% and Equity Markets up 48%, the latter driven by strong performance in Equity Derivatives[136][143] - Investment Banking fees grew 12% YoY, driven by higher debt underwriting (+16%) and advisory fees (+16%), while equity underwriting fees declined 9%[143][148] - The firm ranked 1 for Global Investment Banking fees with a 9.0% wallet share in Q1 2025[149] Asset & Wealth Management (AWM) AWM's net income surged 23% to $1.6 billion on 12% revenue growth to $5.7 billion, fueled by higher asset management fees and net interest income, with AUM reaching $4.1 trillion AWM Financial Performance (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (Millions) | Q1 2024 (Millions) | Change | | :--- | :--- | :--- | :--- | | Total net revenue | $5,731 | $5,109 | 12% | | Provision for credit losses | $(10) | $(57) | 82% | | Net income | $1,583 | $1,290 | 23% | | ROE | 39% | 33% | | - Assets under management (AUM) grew 15% YoY to $4.1 trillion, and total client assets grew 15% to $6.0 trillion, driven by net inflows and higher market levels[168][169] - The segment saw net asset inflows of $120 billion for the quarter[172] - Average loans were up 5% YoY and average deposits were up 7% YoY[166] Corporate The Corporate segment's net income soared to $1.7 billion, primarily due to a First Republic-related gain and a significant decrease in noninterest expense from an FDIC special assessment accrual release Corporate Financial Performance (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (Millions) | Q1 2024 (Millions) | Change | | :--- | :--- | :--- | :--- | | Total net revenue | $2,304 | $2,202 | 5% | | Noninterest expense | $185 | $1,276 | -86% | | Net income | $1,693 | $676 | 150% | - Results included a $588 million First Republic-related gain[181][183] - Noninterest revenue was $653 million, compared to a loss of $275 million YoY, driven by the First Republic gain and lower investment securities losses[181] - Noninterest expense fell sharply due to an FDIC special assessment accrual release of $323 million, versus an accrual increase of $725 million in the prior year[179][181][183] Firmwide Risk Management Capital Risk Management The firm maintained robust capital with a 15.4% Standardized CET1 ratio, exceeding regulatory requirements, and executed significant capital actions including $7.6 billion in share repurchases and a dividend increase Key Capital Ratios (as of March 31, 2025) | Ratio | Standardized | Advanced | Requirement (BHC) | | :--- | :--- | :--- | :--- | | CET1 Capital Ratio | 15.4% | 15.6% | 12.3% / 11.5% | | Tier 1 Capital Ratio | 16.5% | 16.6% | 13.8% / 13.0% | | Total Capital Ratio | 18.2% | 17.6% | 15.8% / 15.0% | | SLR | 6.0% | N/A | 5.0% | - The firm repurchased 30.0 million shares of common stock for an aggregate price of $7.6 billion in Q1 2025[227] - A quarterly common stock dividend of $1.40 per share was declared, an increase from the prior dividend of $1.25 per share[225] - The firm's eligible Total Loss-Absorbing Capacity (TLAC) was 30.8% of RWA and 11.3% of total leverage exposure, comfortably exceeding regulatory requirements of 23.0% and 9.5%, respectively[237] Liquidity Risk Management The firm maintained strong liquidity with an average LCR of 113%, total liquidity sources of approximately $1.5 trillion, and a stable funding base from $2.4 trillion in average deposits Average LCR (Q1 2025) | Entity | Average LCR | | :--- | :--- | | JPMorgan Chase & Co. | 113% | | JPMorgan Chase Bank, N.A. | 124% | - Total available liquidity sources were approximately $1.5 trillion as of March 31, 2025, comprised of ~$881 billion in eligible HQLA and ~$635 billion in other unencumbered marketable securities[264][265] - Average deposits for Q1 2025 were $2.43 trillion, a 2% increase from Q1 2024, driven by inflows in CIB and AWM, which offset a decline in CCB[273][274] - The firm's credit ratings remained strong, with long-term issuer ratings of A1 from Moody's, A from S&P, and AA- from Fitch[301] Credit Risk Management The firm's total credit portfolio was $3.1 trillion, with the firmwide net charge-off rate increasing to 0.74%, and the allowance for credit losses rising by $1.0 billion to $27.8 billion due to a more cautious macroeconomic outlook Credit Portfolio Overview The firm's total credit portfolio was $3.1 trillion at Q1 2025, with total nonperforming assets at $9.1 billion, and the firmwide net charge-off rate increasing to 0.74% driven by the consumer portfolio Total Credit Portfolio (as of March 31, 2025) | Exposure Type | Amount (Millions) | | :--- | :--- | | Total loans | $1,355,695 | | Derivative receivables | $60,539 | | Lending-related commitments | $1,626,483 | | Total credit portfolio | $3,092,120 | - The firmwide net charge-off rate for Q1 2025 was 0.74%, compared to 0.62% for Q1 2024[312] Consumer Credit Portfolio The consumer credit portfolio exposure was $1.7 trillion, with the credit card net charge-off rate rising to 3.58% due to loan seasoning, while residential real estate nonaccrual loans decreased Consumer Net Charge-off Rates (Q1 2025 vs Q1 2024) | Loan Type | Q1 2025 Rate | Q1 2024 Rate | | :--- | :--- | :--- | | Residential real estate | (0.03)% | (0.01)% | | Auto and other | 1.15% | 1.08% | | Credit card | 3.58% | 3.32% | | Total Consumer | 1.45% | 1.26% | - Total credit card loans decreased to $223.4 billion from $232.9 billion at year-end 2024, reflecting seasonal paydowns[315][333] - Nonperforming assets in the consumer portfolio (excluding credit card) decreased to $3.9 billion from $4.0 billion at year-end 2024, driven by lower nonaccrual loans[330] Wholesale Credit Portfolio The wholesale credit portfolio exposure was $1.4 trillion, with stable nonperforming exposure at $6.0 billion and criticized exposure at $45.5 billion, primarily in Real Estate, with a net charge-off rate of 0.11% - Total wholesale credit exposure was $1.4 trillion, with 67% rated investment grade[339][342] - Total criticized exposure was $45.5 billion, of which $40.7 billion was performing[347] - Real Estate exposure was $208.8 billion, with criticized exposure decreasing slightly to $12.1 billion from $12.4 billion at year-end 2024[358] - Wholesale nonaccrual loans decreased slightly to $4.9 billion from year-end 2024[369] Allowance for Credit Losses The firm's allowance for credit losses increased by $1.0 billion to $27.8 billion, driven by net builds in both wholesale and consumer portfolios due to changes in the macroeconomic outlook Allowance for Credit Losses Rollforward (Q1 2025) | (in millions) | Beginning Balance (Jan 1) | Net Charge-offs | Provision | Ending Balance (Mar 31) | | :--- | :--- | :--- | :--- | :--- | | Allowance for Loan Losses | $24,345 | $(2,332) | $3,193 | $25,208 | | Allowance for Lending Commitments | $2,101 | - | $125 | $2,226 | - The total allowance for credit losses was $27.8 billion, with the allowance for loan losses representing 1.94% of retained loans[386][393] - The net build in the allowance was largely driven by changes in the weighted-average macroeconomic outlook, with additional weight placed on adverse scenarios[386] Market Risk Management The firm's market risk, measured by average total VaR, increased to $50 million due to client-driven equity positions and commodity volatility, while structural interest rate risk showed a potential $2.2 billion pre-tax gain from a +100 bps rate shift Average Risk Management VaR (in millions) | Period | Total VaR | CIB Trading VaR | | :--- | :--- | :--- | | Q1 2025 | $50 | $45 | | Q4 2024 | $40 | $33 | | Q1 2024 | $48 | $32 | - The increase in average total VaR quarter-over-quarter was due to a client-driven equity position (since matured) and increased commodity volatility[412][413] - The firm observed three VaR backtesting exceptions during Q1 2025[420] Earnings-at-Risk Sensitivity (as of March 31, 2025) | Rate Scenario | Pre-tax Impact (Billions) | | :--- | :--- | | +100 bps parallel shift | $2.2 | | -100 bps parallel shift | $(2.2) | Country Risk Management The firm's largest non-U.S. country exposures were Germany ($114.3 billion) and the United Kingdom ($80.1 billion), with Japan exposure significantly decreasing to $31.6 billion due to reduced central bank cash placements Top 5 Non-U.S. Country Exposures (in billions) | Country | Mar 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Germany | $114.3 | $103.9 | | United Kingdom | $80.1 | $76.1 | | Japan | $31.6 | $63.1 | | France | $20.0 | $18.0 | | Australia | $17.4 | $14.3 | - The decrease in Japan exposure was driven by a reduction in cash placed with its central bank resulting from client-driven market-making activities[446] Financial Statements and Notes Consolidated Financial Statements (Unaudited) This section presents the unaudited consolidated statements of income, comprehensive income, balance sheets, changes in stockholders' equity, and cash flows for Q1 2025, providing core financial data Consolidated Statement of Income (Q1 2025) | (in millions) | Amount | | :--- | :--- | | Total net revenue | $45,310 | | Provision for credit losses | $3,305 | | Total noninterest expense | $23,597 | | Net income | $14,643 | Consolidated Balance Sheet (as of March 31, 2025) | (in millions) | Amount | | :--- | :--- | | Total assets | $4,357,856 | | Total liabilities | $4,006,436 | | Total stockholders' equity | $351,420 | Notes to Consolidated Financial Statements The notes provide detailed disclosures on fair value measurements, derivative instruments, allowance for credit losses, and litigation, with estimated reasonably possible losses from $0 to approximately $1.1 billion beyond reserves - Note 2: Of the $1.8 trillion in assets measured at fair value, $24.9 billion were classified as Level 3[464] - Note 4: The total notional amount of derivative contracts was $56.3 trillion as of March 31, 2025[578] - Note 12: Provides a detailed rollforward of the allowance for credit losses, showing a net build of $973 million for loans and lending-related commitments[773] - Note 24: The firm estimates the aggregate range of reasonably possible losses for legal proceedings, in excess of reserves, is from $0 to approximately $1.1 billion[933] Part II – Other Information Legal Proceedings (Item 1) The firm is involved in numerous legal and regulatory matters, with estimated reasonably possible losses beyond reserves ranging from $0 to approximately $1.1 billion, including ongoing cases related to 1MDB, Amrapali, and LIBOR - The estimated aggregate range of reasonably possible losses for legal proceedings, in excess of established reserves, is from $0 to approximately $1.1 billion as of March 31, 2025[933] - Material legal proceedings include matters related to 1MDB, Amrapali, Foreign Exchange, Interchange fees, LIBOR, and Russian sanctions[935][937][939][941][944][947] - In the Zelle Network Litigation, a complaint filed by the CFPB in December 2024 was dismissed with prejudice in March 2025 at the request of the CFPB[951] Controls and Procedures (Item 4) The firm's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during Q1 2025 - The Chairman and CEO, and the CFO concluded that the firm's disclosure controls and procedures were effective as of the end of the period[1054] - No change in internal control over financial reporting occurred during Q1 2025 that has materially affected, or is reasonably likely to materially affect, the firm's internal control[1055] Issuer Purchases of Equity Securities (Item 2) JPMorgan Chase repurchased 30.0 million common shares for $7.6 billion in Q1 2025 under a $30 billion authorization, with $11.8 billion remaining available as of March 31, 2025 Share Repurchases (Q1 2025) | Month | Shares Repurchased (Millions) | Average Price Paid | Aggregate Price (Millions) | | :--- | :--- | :--- | :--- | | January | 12.1 | $251.91 | $3,037 | | February | 7.5 | $269.15 | $2,009 | | March | 10.4 | $241.28 | $2,517 | | Total | 30.0 | $252.50 | $7,563 | - As of March 31, 2025, $11.8 billion remained under the current $30 billion share repurchase authorization[1060][1061]