What drove the significant increase in net income compared to the prior year?

The substantial increase in net income was primarily driven by a 35% year-over-year rise, attributed to higher total net revenue (up 12%) and the favorable impact of the Tax Cuts and Jobs Act, which significantly lowered the U.S. federal statutory income tax rate. This was partially offset by an increase in noninterest expense.

How did the adoption of new accounting standards affect the financial results?

Effective January 1, 2018, JPMorgan Chase adopted new accounting standards for revenue recognition and the recognition and measurement of financial assets. The revenue recognition guidance required gross presentation of certain costs, increasing both total net revenue and total noninterest expense without impacting net income. The financial asset guidance resulted in $505 million of fair value gains recorded in 'Other income' for certain equity investments previously held at cost.

What is the outlook for loan growth and expenses for the full year 2018?

For the full year 2018, the firm expects Firmwide average core loan growth to be in the 6% to 7% range, excluding CIB loans. Management anticipates Firmwide noninterest revenue to be up approximately 7%, including a $1.2 billion impact from the new revenue recognition guidance. Regarding expenses, the firm expects Firmwide adjusted expense to be approximately $63 billion, including the $1.2 billion impact of the new revenue recognition guidance.

How is the credit quality of the loan portfolio, particularly in the credit card segment?

The provision for credit losses in the consumer segment decreased by 8%, with higher net charge-offs in the credit card portfolio due to the seasoning of newer vintages, which was in line with expectations. The net charge-off rate for credit cards was 3.32% in Q1 2018, up from 2.94% in Q1 2017. For the full year 2018, management expects the card net charge-off rate to be approximately 3.25%. Overall loan portfolio credit quality remained stable.

JPMORGAN CHASE & CO 10-Q Quarterly Report Q1 FY2018

Summary

JPMorgan Chase & Co. (JPM) reported a strong first quarter of 2018, with net income of $8.7 billion, or $2.37 per diluted share, up 35% and 44% respectively, year-over-year. This performance was driven by a 12% increase in total net revenue to $27.9 billion, bolstered by a 10% rise in net interest income and a 13% increase in noninterest revenue. The latter benefited from a new accounting standard for revenue recognition and fair value gains on certain equity investments. The company saw improved profitability across all business segments, with Consumer & Community Banking (CCB) and Asset & Wealth Management (AWM) delivering particularly strong returns on equity. The adoption of new accounting standards effective January 1, 2018, impacted reported revenues and expenses but did not affect net income. The firm also maintained robust capital ratios, with its Common Equity Tier 1 (CET1) capital ratio at 11.8% under the Standardized approach and 12.5% under the Advanced approach, well above regulatory minimums. Looking ahead, JPMorgan Chase anticipates continued loan growth and revenue expansion, supported by a disciplined approach to expense management. The company expects a full-year effective income tax rate of approximately 20% following the Tax Cuts and Jobs Act. Overall, the results demonstrate the company's resilience and operational strength in a favorable market environment.

Financial Highlights

32 data points

Beta

Net Income

$8.71B

EPS (Diluted)

$2.37

Total Assets

$2.61T

Cash & Equivalents

$414.81B

Free Cash Flow

-$35.11B

Financial Statements

Beta

Interest Expense	$4.38B
Net Income	$8.71B
EPS (Basic)	$2.38
EPS (Diluted)	$2.37
Shares Outstanding (Basic)	3.46B
Shares Outstanding (Diluted)	3.48B

Key Highlights

1Net income surged 35% year-over-year to $8.7 billion ($2.37 per diluted share), driven by higher revenue and the impact of lower income tax rates.
2Total net revenue increased 12% to $27.9 billion, with net interest income up 10% due to higher rates and loan growth, and noninterest revenue up 13% driven by CIB Markets, AWM fees, and new accounting standards.
3Provision for credit losses decreased 11% to $1.2 billion, with a benefit in wholesale reflecting a reduction in the allowance for the Oil & Gas portfolio.
4Noninterest expense rose 5% to $16.1 billion, primarily due to higher compensation and technology investments.
5Consumer & Community Banking (CCB) reported a 67% increase in net income to $3.3 billion, with a 25% rise in noninterest revenue.
6Corporate & Investment Bank (CIB) saw a 23% increase in net income to $4.0 billion, driven by strong performance in Markets revenue, particularly Equity Markets.
7Capital ratios remained strong, with the CET1 capital ratio at 11.8% (Standardized) and 12.5% (Advanced), exceeding regulatory requirements.
8Tangible book value per share (TBVPS) increased 4% year-over-year to $54.05.
9The firm provided $617 billion in credit and raised capital for clients in Q1 2018.

JPMORGAN CHASE & CO Quarterly Report for Q1 Ended Mar 31, 2018

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions