The following is management's discussion and analysis ("MD&A") of the financial condition and results of operations of JPMorgan Chase & Co. ("JPMorgan Chase" or the "Firm") for the first quarter of 2018.

This Form 10-Q should be read in conjunction with JPMorgan Chase's Annual Report on Form 10-K for the year ended December 31, 2017, filed with the U.S. Securities and Exchange Commission (" 2017 Annual Report" or " 2017 Form 10-K"), to which reference is hereby made, and which is referred to throughout this document. See the Glossary of terms and acronyms on pages 156–163 for definitions of terms and acronyms used throughout this Form 10-Q.

The MD&A included in this Form 10-Q contains statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of JPMorgan Chase's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. For a further discussion of certain of those risks and uncertainties and the factors that could cause JPMorgan Chase's actual results to differ materially because of those risks and uncertainties, see Forward-looking Statements on page 73 of this Form 10-Q and Part I, Item 1A, Risk Factors, on pages 8–26 of JPMorgan Chase's 2017 Annual Report.

JPMorgan Chase & Co., a financial holding company incorporated under Delaware law in 1968, is a leading global financial services firm and one of the largest banking institutions in the United States of America ( " U.S. " ), with operations worldwide; the Firm had $2.6 trillion in assets and $256.2 billion in stockholders' equity as of March 31, 2018 . The Firm is a leader in investment banking, financial

services for consumers and small businesses, commercial banking, financial transaction processing and asset management. Under the J.P. Morgan and Chase brands, the Firm serves millions of customers in the U.S. and many of the world's most prominent corporate, institutional and government clients.

JPMorgan Chase's principal bank subsidiaries are JPMorgan Chase Bank, National Association ( " JPMorgan Chase Bank, N.A. " ), a national banking association with U.S. branches in 23 states, and Chase Bank USA, National Association ( " Chase Bank USA, N.A. " ), a national banking association that is the Firm's principal credit card-issuing bank. JPMorgan Chase's principal nonbank subsidiary is J.P. Morgan Securities LLC ( " JPMorgan Securities " ), a U.S. broker-dealer. The bank and non-bank subsidiaries of JPMorgan Chase operate nationally as well as through overseas branches and subsidiaries, representative offices and subsidiary foreign banks. The Firm's principal operating subsidiary in the United Kingdom ( " U.K . " ) is J.P. Morgan Securities plc, a subsidiary of JPMorgan Chase Bank, N.A.

For management reporting purposes, the Firm's activities are organized into four major reportable business segments, as well as a Corporate segment. The Firm's consumer business is the Consumer & Community Banking ( " CCB " ) segment. The Firm's wholesale business segments are Corporate & Investment Bank ( " CIB " ), Commercial Banking ( " CB " ), and Asset & Wealth Management ( " AWM " ). For a description of the Firm's business segments, and the products and services they provide to their respective

client bases, refer to Note 31 of JPMorgan Chase's 2017 Form 10-K.

This executive overview of the MD&A highlights selected information and may not contain all of the information that is important to readers of this Form 10-Q. For a complete description of the trends and uncertainties, as well as the risks and critical accounting estimates affecting the Firm and its various lines of business, this Form 10-Q and incorporated documents should be read in their entirety.

Effective January 1, 2018, the Firm adopted several new accounting standards, of which the most significant to the Firm are the guidance related to revenue recognition, and recognition and measurement of financial assets. The revenue recognition guidance requires gross presentation of certain costs that were previously offset against revenue. This change was adopted retrospectively and, accordingly, prior period amounts were revised, resulting in both total net revenue and total noninterest expense increasing with no impact to net income. The adoption of the recognition and measurement guidance in the first quarter of 2018 resulted in fair value gains, which were recorded in total net revenue, on certain equity investments that were previously held at cost. For additional information, see Note 1.

Comparisons noted in the sections below are calculated for the first quarter of 2018 versus the first quarter of 2017, unless otherwise specified.

Firmwide overview

JPMorgan Chase reported strong results in the first quarter of 2018 with record net income of $8.7 billion, or $2.37 per share, on net revenue of $27.9 billion. Excluding the benefit of tax reform, net income was still a record for the quarter. The Firm reported ROE of 15% and ROTCE of 19%.

Selected capital-related metrics

up 4%.

ROTCE and TBVPS are each non-GAAP financial measures. Core loans and each of the Fully Phased-In capital and certain leverage measures are all considered key performance measures. For a further discussion of each of these measures, see Explanation and Reconciliation of the Firm's Use of Non-GAAP Financial Measures and Key Performance Measures on pages 14–15 , and Capital Risk Management on pages 32-37 .

Lines of business highlights

Selected business metrics for each of the Firm's four lines of business are presented below for the first quarter of 2018.

For a detailed discussion of results by line of business, refer to the Business Segment Results on pages 16-29 .

Credit provided and capital raised

JPMorgan Chase continues to support consumers, businesses and communities around the globe. The Firm provided credit and raised capital of $617 billion for wholesale and consumer clients during the first three months of 2018 :

2018 outlook

These current expectations are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on the current beliefs and expectations of JPMorgan Chase's management and are subject to significant risks and uncertainties. These risks and uncertainties could cause the Firm's actual results to differ materially from those set forth in such forward-looking statements. See Forward-Looking Statements on page 73 of this Form 10-Q and Risk Factors on pages 8–26 of JPMorgan Chase's 2017 Annual Report. There is no assurance that actual results for the full year of 2018 will be in line with the outlook set forth below, and the Firm does not undertake to update any forward-looking statements.

JPMorgan Chase's outlook for the remainder of 2018 should be viewed against the backdrop of the global and U.S. economies, financial markets activity, the geopolitical environment, the competitive environment, client and customer activity levels, and regulatory and legislative developments in the U.S. and other countries where the Firm does business. Each of these interrelated factors will affect the performance of the Firm and its lines of business. The Firm expects that it will continue to make appropriate adjustments to its businesses and operations in response to ongoing developments in the legal, regulatory, business and economic environments in which it operates.

Firmwide

CCB

Effective January 1, 2018, the Firm adopted several new accounting standards. Certain of the new accounting standards were applied retrospectively and, accordingly, prior period amounts were revised. For additional information, see Note 1 .

Investment banking fees decreased reflecting lower debt and equity underwriting fees, partially offset by higher advisory fees in CIB. The decrease in debt underwriting fees was primarily driven by declines in industry-wide fee levels and a lower share in leveraged finance. The decrease in equity underwriting fees was also driven by declines in industry-wide fee levels as well as a lower share of large transactions. The increase in advisory fees was driven by a higher number of large completed transactions. For additional information, see CIB segment results on pages 20-24 and Note 5 .

Principal transactions revenue increased primarily reflecting:

partially offset by

For additional information, see CIB and Corporate segment results on pages 20-24 and page 29 , respectively, and

Note 5 .

For information on lending- and deposit-related fees, see the segment results for CCB on pages 17-19 , CIB on pages 20-24 , CB on pages 25-26 and Note 5 .

Asset management, administration and commissions revenue increased as a result of:

For additional information, see AWM, CCB and CIB segment results on pages 27-28 , pages 17-19 and pages 20-24 , respectively, and Note 5 .

Investment securities losses increased primarily due to sales related to the repositioning of the investment securities portfolio. For further information, see the Corporate segment discussion on page 29 .

Mortgage fees and related income increased driven by higher MSR risk management results and servicing revenue, partially offset by lower net production revenue reflecting lower margins. For further information, see CCB segment results on pages 17-19 and Note 14 .

Card income increased driven by:

For further information, see CCB segment results on pages 17-19 and Note 5 .

Other income increased primarily due to:

For further information, see Note 5 .

Net interest income increased primarily driven by the net impact of higher rates and loan growth across the businesses, partially offset by declines in Markets net interest income in CIB. The Firm's average interest-earning assets were $2.2 trillion, up $43 billion from the prior year, and the net interest yield on these assets, on a fully taxable

equivalent ("FTE") basis, was 2.48%, an increase of 15 basis points from the prior year.

The provision for credit losses decreased as a result of:

For a more detailed discussion of the credit portfolio and the allowance for credit losses, see the segment discussions of CCB on pages 17-19 , CIB on pages 20-24 , CB on pages 25-26 , the Allowance for Credit Losses on pages 57–59 and

Note 12 .

Compensation expense increased driven by investments in headcount across the businesses, including bankers and business-related support staff; and higher performance-based compensation expense predominantly in CIB.

Noncompensation expense increased as a result of:

partially offset by

The effective tax rate decreased due to the reduction of the U.S. federal statutory income tax rate as a result of the TCJA. The decrease was partially offset by changes in the mix of income and expense subject to U.S. federal, state and local taxes, as well as to certain tax reserves.

Cash and due from banks and deposits with banks decreased primarily reflecting a shift in the deployment of excess cash from deposits with banks and investment securities into securities purchased under resale agreements. The Firm's excess cash is largely placed with various central banks, predominantly Federal Reserve Banks.

Federal funds sold and securities purchased under resale agreements increased primarily due to the shift in the deployment of excess cash from deposits with banks and investment securities into securities purchased under resale agreements, and higher client activity in CIB. For additional information on the Firm's Liquidity Risk Management, see pages 38–42 .

Securities borrowed increased driven by higher demand for securities to cover short positions related to client-driven market-making activities in CIB.

Trading assets-debt and equity instruments increased predominantly as a result of client-driven market-making activities in CIB, primarily equity instruments in Prime Services, and debt instruments in Fixed Income Markets, driven by higher client demand. For additional information, see Notes 2 and 4 .

Investment securities decreased primarily reflecting net sales, paydowns and maturities of U.S. government agency mortgage-backed securities ("MBS"), obligations of U.S. states and municipalities, and commercial MBS. For additional information on Investment securities, see Corporate segment results on page 29 , Investment Portfolio Risk Management on page 60 , and Notes 2 and 9 .

Loans were relatively flat reflecting:

offset by

The allowance for loan losses decreased reflecting:

For a detailed discussion of loans and the allowance for loan losses, refer to Credit Risk Management on pages 43–60 , and Notes 2 , 3 , 11 and 12 .

Accrued interest and accounts receivable increased primarily reflecting higher client receivables related to client-driven activities in CIB.

Other assets increased partly reflecting higher cash collateral pledged for derivative contracts in CIB and higher auto operating lease assets from growth in business volume in CCB.

For information on Goodwill and MSRs, see Note 14 .

Deposits increased due to:

in CB.

For more information, refer to the Liquidity Risk Management discussion on pages 38–42 ; and Notes 2

and 15 .

Federal funds purchased and securities loaned or sold under repurchase agreements increased reflecting higher secured financing of trading assets-debt and equity instruments, partially offset by a change in the mix of funding to short-term borrowings in CIB.

Short-term borrowings increased driven by a change in

the mix of funding for CIB activities from federal funds

sold under repurchase agreements to other borrowed funds, and the net issuance of commercial paper. For additional information, see Liquidity Risk Management on pages 38–42 .

Trading liabilities–debt and equity instruments increased predominantly related to client-driven market-making activities in CIB Markets, driven by higher levels of short positions in both debt and equity instruments. For additional information, refer to Derivative contracts on pages 55–56 , and Notes 2 and 4 .

Beneficial interests issued by consolidated VIEs decreased due to maturities of credit card securitizations. For further information on Firm-sponsored VIEs and loan securitization trusts, see Off-Balance Sheet Arrangements on page 13 and Notes 13 and 20 .

Long-term debt decreased primarily driven by net maturities of senior debt and lower Federal Home Loan Bank ("FHLB") advances. For additional information on the Firm's long-term debt activities, see Liquidity Risk Management on pages 38–42 .

For information on changes in stockholders' equity, see page 77 , and on the Firm's capital actions, see Capital actions on page 32 .

Operating activities

Investing activities

Financing activities

For a further discussion of the activities affecting the Firm's cash flows, see Consolidated Balance Sheets Analysis on pages 10–12 , Capital Risk Management on pages 32-37 , and Liquidity Risk Management on pages 38–42 of this Form 10-Q, and pages 92–97 of JPMorgan Chase's 2017 Annual Report.

The Firm prepares its Consolidated Financial Statements using U.S. GAAP; these financial statements appear on pages 74-78 . That presentation, which is referred to as "reported" basis, provides the reader with an understanding of the Firm's results that can be tracked consistently from year-to-year and enables a comparison of the Firm's performance with other companies' U.S. GAAP financial statements.

In addition to analyzing the Firm's results on a reported basis, management reviews Firmwide results, including the overhead ratio, on a "managed" basis; these Firmwide managed basis results are non-GAAP financial measures. The Firm also reviews the results of the lines of business on a managed basis. The Firm's definition of managed basis starts , in each case, with the reported U.S. GAAP results and includes certain reclassifications to present total net revenue for the Firm (and each of the reportable business segments) on an FTE basis. Accordingly, revenue from investments that receive tax credits and tax-exempt securities is presented in the managed results on a basis comparable to taxable investments and securities. These financial measures allow management to assess the comparability of revenue from year-to-year arising from both taxable and tax-exempt sources. The corresponding

income tax impact related to tax-exempt items is recorded within income tax expense. These adjustments have no impact on net income as reported by the Firm as a whole or by the lines of business.

Management also uses certain non-GAAP financial measures at the Firm and business-segment level, because these other non-GAAP financial measures provide information to investors about the underlying operational performance and trends of the Firm or of the particular business segment, as the case may be, and, therefore, facilitate a comparison of the Firm or the business segment with the performance of its relevant competitors. For additional information on these non-GAAP measures, see Business Segment Results on pages 16-29 .

Additionally, certain credit metrics and ratios disclosed by the Firm exclude PCI loans, and are therefore non-GAAP measures. For additional information on these non-GAAP measures, see Credit and Investment Risk Management on pages 43–60 .

Non-GAAP financial measures used by the Firm may not be comparable to similarly named non-GAAP financial measures used by other companies.

In addition to reviewing net interest income on a managed basis, management also reviews net interest income excluding net interest income arising from CIB's Markets businesses to assess the performance of the Firm's lending, investing (including asset-liability management) and deposit-raising activities. This net interest income is referred to as non-markets related net interest income. CIB's Markets businesses are Fixed Income Markets and

Equity Markets. Management believes that disclosure of non-markets related net interest income provides investors and analysts with another measure by which to analyze the non-markets-related business trends of the Firm and provides a comparable measure to other financial institutions that are primarily focused on lending, investing and deposit-raising activities.

Tangible common equity, ROTCE and TBVPS

Tangible common equity ("TCE"), ROTCE and TBVPS are each non-GAAP financial measures. TCE represents the Firm's common stockholders' equity (i.e., total stockholders' equity less preferred stock) less goodwill and identifiable intangible assets (other than MSRs), net of related deferred tax liabilities. ROTCE measures the Firm's net income applicable to common equity as a percentage of average TCE. TBVPS represents the Firm's TCE at period-end divided by common shares at period-end. TCE, ROTCE, and TBVPS are utilized by the Firm, as well as investors and analysts, in assessing the Firm's use of equity.

The Firm considers the following to be key regulatory capital measures:

The Firm, as well as banking regulators, investors and analysts use these measures to assess the Firm's regulatory capital position and to compare the Firm's regulatory capital to that of other financial services companies.

For additional information on these measures, see Capital Risk Management on pages 32-37 .

Core loans are also considered a key performance measure. Core loans represent loans considered central to the Firm's ongoing businesses; and exclude loans classified as trading assets, runoff portfolios, discontinued portfolios and portfolios the Firm has an intent to exit. Core loans is a measure utilized by the Firm and its investors and analysts in assessing actual growth in the loan portfolio.

The Firm is managed on a line of business basis. There are four major reportable business segments – Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking and Asset & Wealth Management. In addition, there is a Corporate segment.

The business segments are determined based on the products and services provided, or the type of customer served, and they reflect the manner in which financial information is currently evaluated by management. Results of these lines of business are presented on a managed basis. For a definition of managed basis, see Explanation and Reconciliation of the Firm's use of Non-GAAP Financial Measures and Key Performance Measures on pages 14–15 .

Description of business segment reporting methodology

Results of the business segments are intended to reflect each segment as if it were a stand-alone business. The management reporting process that derives business segment results includes the allocation of certain income and expense items. For further information about line of business capital, see Line of business equity on page 35 .

The Firm periodically assesses the assumptions, methodologies and reporting classifications used for segment reporting, and further refinements may be implemented in future periods.

Business segment capital allocation

The amount of capital assigned to each business is referred to as equity. On at least an annual basis, the Firm assesses the level of capital required for each line of business as well as the assumptions and methodologies used to allocate capital. For additional information on business segment capital allocation, see Line of business equity on page 88 of JPMorgan Chase's 2017 Annual Report.

For a further discussion of those methodologies, see Business Segment Results – Description of business segment reporting methodology on pages 55–56 of JPMorgan Chase's 2017 Annual Report.

For a discussion of the business profile of CCB, see pages 57-61 of JPMorgan Chase's 2017 Annual Report and Line of Business Metrics on page 161 .