JPMorgan Chase & Co. (JPM) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

July 14, 2023 8:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, ladies and gentlemen. Welcome to JPMorgan Chase's Second Quarter 2023 Earnings Call. This call is being recorded. Your line will be muted for the duration of the call. We will now go to the live presentation. 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.

Jeremy Barnum

Thanks, operator. Good morning, everyone. Presentation is available on our website and please refer to the disclaimer on the back.

Starting on Page 1, the firm reported net income of $14.5 billion, EPS of $4.75 on revenue of $42.4 billion and delivered an ROTCE of 25%. These results included the First Republic bargain purchase gain of $2.7 billion and credit reserve build for the First Republic lending portfolio $1.2 billion as well as $900 million of net investment securities losses in Corporate. Touching on a few highlights, CCB Client investment assets were up 18% year-on-year, we had record long-term inflows in AWM and we ranked Number One in IB Fee wallet share.

Before giving you more detail on financials, let me give you a brief updates on the status of the First Republic integration on Page 2. The settlement process with the FDIC is on schedule, the number of key milestone being recently completed. Systems integration is also proceeding at pace and we are targeting being substantially complete by mid-2024.

First Republic employees have formally joined us as of July 2, and we're pleased to have had very-high acceptance rates on our offers. And although it's still early days, as we get the sales force back in the market, we are happy to see the client retention is strong with about a $6 billion of net deposit inflows since the acquisition.

Now, turning back to this quarter's results on Page 3. You'll see that in various parts of the presentation, we have specifically called out the impact of First Republic where relevant. To make things easier. I'm going to start by discussing the overall impact of First Republic on this quarter's results at the firm-wide level. Then, for the rest of the presentation, I will generally exclude the impact of First Republic, in order to improve comparability with prior periods.

With that in mind, in this quarter, First Republic contributed $4 billion of revenue, $599 million of expense and $2.4 billion of net income. As noted on the first page, this includes $2.7 billion of bargain purchase gain, which is reflected in NIR in the Corporate segment as well as $1.2 billion of allowance build. And remember that the deal happened on May 1, so the First Republic numbers only represent two months of results.