JP Morgan Chase & Co.

Good morning, ladies and gentlemen. Welcome to JPMorgan Chase's first quarter 2026 earnings call. This call is being recorded. Your line will be muted for the duration of the call. We will now go live to the presentation. The presentation is available on JPMorgan Chase's website. Please refer to the disclaimer in the back concerning forward-looking statements. Please stand by. At this time, I would like to turn the call over to JPMorgan Chase's Chairman and CEO, Jamie Dimon, and Chief Financial Officer, Jeremy Barnum. Mr. Barnum, please go ahead.

Thank you very much, and good morning, everyone. This quarter, the firm reported net income of $16.5 billion and EPS of $5.94, with an ROGCE of 23%. Revenue of $50.5 billion was up 10% year-on-year, primarily driven by higher markets revenue, higher asset management and investment banking fees, and higher NII driven by the impact of balance sheet growth, predominantly offset by the impact of lower rates. Expenses of $26.9 billion were up 14% year-on-year, largely driven by higher compensation, including higher revenue-related compensation and growth in promised employees, as well as higher brokerage expense and distribution fees. The increase also reflects the absence of an FDIC special accrual lease in the prior year. And credit costs of $2.5 billion with net charge-offs of $2.3 billion and a net reserve build of $191 million. And in terms of the balance sheet, we ended the quarter with a standardized CT1 ratio of 14.3% down 30 basis points versus the prior quarter, as net income was more than offset by capital distributions and higher RWA. This quarter's standardized RWA is up $60 billion, primarily driven by the market's business reflecting higher client activity, seasonal effects, and higher energy prices, which resulted in higher RWA across market risk and credit risk ex-lending. Now, let me spend a few minutes on the recently released Basel 3M game and G-SIB reproposals. I'll start by acknowledging that this has been a long journey and getting it done across multiple regulators and applied to the full set of U.S. banks is unquestionably a difficult task. With that said, we do have some concerns with elements of what's been put forward, primarily with the GSEP proposal. On the left-hand side, we show you our preliminary estimate of the impact on JPMorgan Chase next to what the Fed has disclosed for the Category 1 and 2 banks in aggregate. Our results are worse in each category. Estimated RWA is higher, GSIB is worse, and because our CCAR losses are below the floor, the Fed's reduction is not going to apply to us. The result is that under the proposed rules, our CET1 capital would increase around 4%, while the Fed's estimate for large banks is about a 5% reduction. Our longstanding position has been that the agencies should calculate each component of the capital requirements correctly without regard to what that may mean for any specific firm or for the broader industry. And to the extent regulators want to add conservatism, they should make that explicit rather than embedding it in methodological choices. Turning to G-SIB on the right, the surcharge on the re-proposed rule looks quite high when placed in the historical context. as the chart clearly illustrates. As many of you know, we have been on the record for the better part of this last decade advocating for averaging, smaller buckets, GDP scaling, and reweighting short-term wholesale funding to 20%. And we were glad to see many of those concepts in the NPR. However, While we have every reason to believe that the Fed's published estimate of a 3.8% reduction in capital associated with the G-SIP NPR is accurate when defined narrowly, it's important to understand that under the current rule, the surcharges for almost all of the G-SIP banks are scheduled to increase meaningfully over the next two years simply as a result of recent growth in the system, despite, in our view, no change in real-world systemic risk. In addition to that background increase, the proposed change in the short-term wholesale funding methodology adds about $22 billion of G-SIB-specific capital principally to the money center banks, of which we represent about $13 billion, while in the process making the methodology less risk-sensitive and less consistent with the Fed's original rationale for including it. This could have been addressed by better adjusting for growth in the system, but it wasn't enough. The net result is that we need to plan for 5.2% in 2028, a 70 basis point increase from the current 4.5% requirement, which when combined with the RWA increase from the Basel III endgame NPR results in a total increase of about $20 billion of GSEC capital based on our current balance sheet. This persistent miscalibration of the U.S. surcharge is obviously bad for international competitiveness. But more importantly, domestically, this means that the cost of credit from JPMorgan Chase to U.S. households and businesses is likely higher than it is from other domestic non-G-SIB banks. We recognize that we are larger and more systemically important than even large domestic peers. But in the end, the question is, how much more should the cost be? It is very hard to reconcile the principles articulated in the 2015 Fed G-SIB white paper with an outcome where JPMorgan Chase has $109 billion of G-SIB surcharge. Obviously, the rules aren't final yet, and this is what the comment process is for. As Jamie wrote in his chairman's letter, everyone wants to move on, so our comments will be very focused. but we feel strongly that the framework should be coherent and the system would therefore be better off with these outstanding points addressed. Now, moving to our businesses. CCB reported net income of $5 billion. Revenue of $19.6 billion was up 7% year-on-year, predominantly driven by higher card NII, largely on higher revolving balances and higher operating lease income and auto. A few points to highlight. Now, withstanding the recent volatility in market and gas prices, based on our data, consumers and small businesses remain resilient, with consumer spend growth continuing above last year's pace. Average deposits were up 2% year-on-year and quarter-on-quarter, driven by account growth and moderating yield-seeking flows. Buying investment assets were up 18% year-on-year, driven by market performance and healthy net inflows. And in home lending, originations of $13.7 billion increased 46% year-on-year, predominantly driven by REFI performance. Next, the CIV reported net income of $9 billion. Revenue of $23.4 billion was up 19% year-on-year, driven by higher revenues across the businesses. To give a bit more color, IBCs were up 28% year-on-year, driven by strong performance across M&A and equity underwriting, partially offset by lower debt underwriting. Looking ahead, line engagement and pipelines remain healthy, but of course, developments in the Middle East could have an impact on deal execution and timing. In markets, fixed income was up 21% year-on-year with strong performance across the businesses, partially offset by lower revenue and rates. Equities was up 17% from increased client activity. Turning to asset and wealth management, AWM reported net income of $1.8 billion with pre-tax margin of 35%. Revenue of $6.4 billion was up 11% year-on-year, predominantly driven by growth in management fees on strong net inflows and higher average market levels, as well as higher brokerage activity. Long-term net inflows were $54 billion with continued strength across fixed income, equity, and multi-asset. AUM of $4.8 trillion was up 16% year-on-year, The client assets of 7.1 trillion were up 18% year-on-year, driven by higher market levels and continued net inflows. And before turning to the outlook, corporate reported net income of $699 million on revenue of $1.2 billion. In terms of the full year of 2026 outlook, we continue to expect NAI X markets to be about $95 billion. We now expect total NII to be approximately $103 billion as a function of markets NII decreasing to about $8 billion, predominantly due to rates, which we expect will be primarily offset in NIR. The adjusted expense outlook continues to be about $105 billion, and the card net charge-off rate continues to be approximately 3.4%. With that, we're now happy to take your questions, so let's open the line for Q&A.

Thank you. Please stand by. If you would like to ask a question, please press star 1 to be entered into the queue. We kindly request that you ask one question and only one related follow-up. If you would like to ask an additional question, please press star 1 to be re-entered into the queue. Our first question comes from Steven Chupak with Wolf Research. Your line is open.