10-QPeriod: Q1 FY2022

JPMORGAN CHASE & CO Quarterly Report for Q1 Ended Mar 31, 2022

Filed May 3, 2022For Securities:JPMJPM-PCJPM-PDJPM-PKJPM-PLJPM-PMJPM-PJAMJBVYLD

Summary

JPMorgan Chase & Co. reported a net income of $8.3 billion, or $2.63 per diluted share, for the first quarter of 2022. Total net revenue decreased by 5% year-over-year to $30.7 billion, primarily driven by a 13% decline in noninterest revenue, which was impacted by lower investment banking fees and losses in Credit Adjustments & Other within the Corporate & Investment Bank (CIB). Conversely, net interest income rose 8% to $13.9 billion, benefiting from balance sheet growth and higher interest rates. The firm saw a significant increase in the provision for credit losses to $1.5 billion, a reversal from the prior year's net benefit of $4.2 billion. This was largely due to a $902 million addition to the allowance for credit losses, reflecting an increased weighting of adverse economic scenarios given inflation, monetary policy shifts, and geopolitical risks, including the war in Ukraine. Despite lower revenues, the firm maintained strong capital ratios, with a CET1 capital ratio of 11.9%. The Consumer & Community Banking segment demonstrated resilience with a 23% return on equity, driven by strong deposit growth and card sales volume.

Financial Highlights

32 data points
Beta

Net Income

$8.28B

EPS (Diluted)

$2.63

Total Assets

$3.95T

Cash & Equivalents

$754.53B

Free Cash Flow

-$41.92B

Financial Statements
Beta
Interest Expense$1.62B
Net Income$8.28B
EPS (Basic)$2.64
EPS (Diluted)$2.63
Shares Outstanding (Basic)2.98B
Shares Outstanding (Diluted)2.98B

Key Highlights

  • 1Net income declined 42% year-over-year to $8.3 billion, or $2.63 per diluted share.
  • 2Total net revenue decreased 5% to $30.7 billion, with noninterest revenue down 13% and net interest income up 8%.
  • 3Provision for credit losses increased significantly to $1.5 billion, compared to a net benefit of $4.2 billion in the prior year, reflecting an increased allowance for credit losses.
  • 4Consumer & Community Banking (CCB) reported a 57% decrease in net income to $2.9 billion, impacted by higher credit loss provisions.
  • 5Corporate & Investment Bank (CIB) saw a 26% decrease in net income to $4.4 billion, primarily due to lower investment banking fees and principal transactions revenue.
  • 6Common equity Tier 1 (CET1) capital ratio remained strong at 11.9%, though down from 13.1% in the prior quarter.
  • 7Tangible book value per share grew 5% year-over-year to $69.58.

Frequently Asked Questions

The decrease in noninterest revenue was primarily driven by lower investment banking fees (down 32%), lower net production revenue in Home Lending, losses on legacy equity investments compared to gains in the prior year, and a loss of $524 million in Credit Adjustments & Other in the Corporate & Investment Bank (CIB).

The provision for credit losses increased to $1.5 billion from a net benefit of $4.2 billion in the prior year. This was due to a net addition of $902 million to the allowance for credit losses, reflecting an increased weighting of adverse economic scenarios due to inflation, monetary policy changes, and geopolitical risks, as well as client-specific downgrades related to Russia.

JPMorgan Chase's capital position remained strong. The CET1 capital ratio was 11.9% as of March 31, 2022, down from 13.1% at December 31, 2021, but still well above regulatory requirements. The firm also grew its tangible book value per share by 5% year-over-year to $69.58.

The Consumer & Community Banking (CCB) segment saw a 57% decrease in net income, while the Corporate & Investment Bank (CIB) segment experienced a 26% decrease. The Asset & Wealth Management (AWM) segment saw a 20% decrease in net income. The Commercial Banking (CB) segment's net income decreased by 28%. The Corporate segment's net loss remained stable year-over-year.