JPMorgan Chase (JPM) Q2 2023 Earnings Call Transcript

JPMorgan Chase (JPM 0.06%)
Q2 2023 Earnings Call
Jul 14, 2023, 8:30 a.m. ET

Contents:

• 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 -- Chief Financial Officer

Thanks, operator. Good morning, everyone. Presentation is available on our website and please refer to the disclaimer in 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, a credit reserve build for the First Republic lending portfolio of 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 No. 1 in IB fee wallet share. Before giving you more detail on the financials, let me give you a brief update on the status of the First Republic integration on Page 2. The settlement process with the FDIC is on schedule.

The number of key milestones being recently completed. Systems integration is also proceeding apace, and we are targeting being substantially complete by mid-2024. First Republic employees have formally joined us as of July 2nd, 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 that client retention is strong, with about $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 firmwide 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 1st, so the First Republic numbers only represent two months of results. You'll see in the line of business results that we are showing First Republic revenue as allowance in CCB, CB, and AWM.

And for the purposes of this quarter's results, all of the deposits are in CCB and, substantially, all of the expenses are in corporate. As the integration continues, some of those items will get allocated across the segments. Now, turning back to firmwide results, excluding First Republic. Revenue of 38.4 billion was up 6.7 billion or 21% year on year.

NII, ex markets, was up 7.8 billion, or 57%, driven by higher rates. NIR, ex markets, was down 293 million, largely driven by the net investment securities losses I mentioned earlier, partially offset by a number of less notable items, primarily in the prior year. And markets revenue was down 772 million or 10% year on year. Expenses of 20.2 billion were up 1.5 billion, or 8% year on year, primarily driven by higher compensation expense, including wage inflation and higher legal expense.

And credit costs of 1.7 billion included net charge-offs of 1.4 billion, predominantly in card. The net reserve build included a 389 million build in the commercial bank, a $200 million build in card, and a 243 million release in corporate, all of which I will cover in more detail later. Onto balance sheet and capital on Page 4. We ended the quarter with a CET1 ratio of 13.8%, flat versus the prior quarter, as the benefit of net income less distributions was offset by the impact of First Republic.

And as you can see in the two charts on the page, we've given you some information about the impact of the transaction on both RWA and CET1 ratio. And as you know, we completed CCAR a couple of weeks ago. Our new indicative SCB is 2.9%, versus our current requirement of 4%, and it goes into effect in 4Q '23. The new SCB also reflects the board's intention to increase the dividend to $1.05 per share in the third quarter.

On liquidity, our bank LCR for the second quarter ended at 129%, in line with what we anticipated at Investor Day. About half of the reduction is associated with the First Republic transaction. And while we're on the balance sheet, as we previewed in the 10-K, we will be updating our earnings-at-risk model to incorporate the impact of deposit repricing lags. So, when we release this quarter's 10-Q, you will see the up 100-basis-point parallel shift scenario will be about positive 2.5 billion.

Whereas, in the absence of the change, it would have been about negative 1.5 billion. Now, let's go to our businesses, starting with CCB on Page 5. Both U.S. consumers and small businesses remain resilient, and we haven't observed any meaningful changes to the trends in our data we discussed at Investor Day.

Turning now to the financial results, which I will speak to excluding the impact of First Republic for CCB, CB, and AWM. CCB reported net income of $5 billion on revenue of 16.4 billion, which was up 31% year on year. In banking and wealth management, revenue was up 59% year on year, driven by higher NII on higher rates. End-of-period deposits were down 4% quarter on quarter as customers continue to spend down their cash buffers, including for seasonal tax payments, and seek higher-yielding products.

Client investment assets were up 18% year on year, driven by market performance and strong net inflows across our advisor and digital channels. In home lending, revenue was down 23% year on year, driven by lower NII from tighter loan spreads and lower servicing and production revenue. Originations were up quarter on quarter, driven by seasonality, although still down 54% year on year. Moving to card services and auto.

Revenue was up 5%, largely driven by higher card services NII on higher revolving balances, partially offset by lower auto lease income. Card outstandings were up 18% year on year, which was the result of revolver normalization and strong new account growth. And in auto, originations were up 12 billion, up 71% year on year, as competitors pulled back and inventories continue to slowly recover. Expenses of 8.3 billion were up 8% year on year, driven by compensation, predominantly due to wage inflation and headcount growth as we continue to invest in our front office and technology staffing, as well as marketing.

In terms of credit performance this quarter, credit costs were 1.5 billion, reflecting a reserve build of 203 million, driven by loan growth in card services. Net charge-offs were 1.3 billion, up 640 million year on year, predominantly driven by card as 30-day-plus delinquencies have returned to pre-pandemic levels, in line with our expectations. Next, the CIB on Page 6. CIB reported net income of 4.1 billion on revenue of $12.5 billion.

Investment banking revenue of 1.5 billion was up 11% year on year, or down 7% excluding bridge book markdowns in the prior year. IB fees were down 6% year on year, and we ranked at No. 1 with a year-to-date wallet share of 8.4%. In advisory, fees were down 19%.

Underwriting fees were down 6% for debt and up 30% for equity, with more positive momentum in the last month of the quarter. In terms of the second half outlook, we have seen encouraging signs of activity in capital markets, and July should be a good indicator for the remainder of the year. However, year-to-date announced M&A is down significantly, which will be a headwind. Moving to markets.

Total revenue was 7 billion, down 10% year on year. Fixed income was down 3%. As expected, the macro franchise substantially normalized from last year's elevated levels of volatility and client flows. This was largely offset by improved performance in the securitized products group and credit.

Equity markets was down 20% against a very strong prior-year quarter, particularly in derivatives. Payments revenue was 2.5 billion, up 61% year on year. Excluding equity investments, it was up 32%, predominantly driven by higher rates, partially offset by lower deposit balances. Securities services revenue of 1.2 billion was up 6% year on year, driven by higher rates, partially offset by lower fees.

Expenses of 6.9 billion were up 1% year on year, driven by higher noncompensation expense, as well as wage inflation and headcount growth, largely offset by lower revenue-related compensation. Moving to the commercial bank on Page 7. Commercial banking reported net income of $1.5 billion. Revenue of 3.8 billion was up 42% year on year, driven by higher deposit margins.

Payments revenue of 2.2 billion was up 79% year on year, driven by higher rates. Gross investment banking and markets revenue of 767 million was down 3% year on year, primarily driven by fewer large M&A deals. Expenses of 1.3 billion were up 12% year on year, predominantly driven by higher compensation expense, including front office hiring and technology investments, as well as higher volume-related expense. Average deposits were up 3% quarter on quarter, driven by inflows related to new client acquisition, partially offset by continued attrition in non-operating deposits.

Loans were up 2% quarter on quarter. C&I loans were up 2%, reflecting stabilization in new loan demand and revolver utilization in the current economic environment, as well as pockets of growth in areas where we are investing. CRE loans were also up 1%, reflecting funding on prior-year originations for construction loans and real estate banking, as well as increased affordable housing activity. Finally, credit costs were 489 million.

Net charge-offs were 100 million, including 82 million in the office real estate portfolio. And then net reserve build of 389 million was driven by updates to certain assumptions related to the office real estate market, as well as net downgrade activity in middle market banking. Then, to complete our lines of business, AWM on Page 8. Asset and wealth management reported a net income of 1.1 billion, with pre-tax margin of 32%.

Revenue of 4.6 billion was up 8% year on year, driven by higher deposit margins on lower balances and higher management fees on strong net inflows. Expenses of 3.2 billion were up 8% year on year, driven by higher compensation, including growth in our private banking advisory teams, higher revenue-related compensation, and the impact of Global Shares and J.P. Morgan Asset Management China, both of which closed within the last year. For the quarter, record net long-term inflows were 61 billion, positive across all channels, regions, and asset classes, led by fixed income and equities.

And in liquidity, we saw net inflows of 60 billion. AUM of 3.2 trillion was up 16% year on year. And overall client assets of 4.6 trillion were up 20% year on year, driven by continued net inflows, higher market levels, and the impact of the acquisition of Global Shares. And finally, loans were down 1% quarter on quarter, driven by lower securities-based lending, and deposits were down 6%.

Turning to corporate on Page 9. As I noted upfront, we are reporting the First Republic bargain purchase gain and substantially all of the expenses in corporate. Excluding those items, corporate reported net income of 339 million. Revenue was 985 million, up 905 million compared to last year.

NII was 1.8 billion, up 1.4 billion year on year, due to the impact of higher rates. NIR was a net loss of 782 million and included the net investment securities losses I mentioned upfront. Expenses of 590 million were up 384 million year on year, largely driven by higher legal expense. And credit costs were a net benefit of 243 million, reflecting a reserve release as the deposit placed with First Republic in the first quarter was eliminated as part of [Technical difficulty] Next, the outlook on Page 10.

We now expect 2023 NII and NII ex markets to be approximately 87 billion. The increase is driven by higher rates, coupled with slower deposit reprice than previously assumed across both consumer and wholesale. And I should take the opportunity to remind you once again that significant sources of uncertainty remain, and we do expect the NII run rate to be substantially below this quarter's run rate at some point in the future as competition for deposits plays out. Our expense outlook for 2023 remains approximately 84.5 billion.

And on credit, we continue to expect the 2023 card net charge-off rate to be approximately 2.6%. So, to wrap up, we are proud of the exceptionally strong operating results this quarter. As we look forward, we remain focused on the significant uncertainties relating to the economic outlook, competition for deposits, and the impact on capital from the pending finalization of the Basel III rules. Nonetheless, despite the likely headwinds ahead, we remain optimistic about the company's ability to continue delivering excellent performance through a range of scenarios.

With that, operator, please open the line for Q&A.

Questions & Answers:

Operator

Please stand by. The first question is coming from the line of Jim Mitchell from Seaport Global Securities. You may proceed.

Jim Mitchell -- Seaport Global Securities -- Analyst

Oh, thanks. Good morning. Hey, Jeremy, you talked about NII guidance up. Clearly, Fed funds futures are up.

So, it makes some sense. But maybe I guess, first, could you kind of discuss -- I guess, comment on deposit behavior broadly around betas and mix? And what you're seeing there so far seems to be coming in a little better expected. And then secondly and probably more importantly, can you help us think about the implications of higher for longer rates on the outlook for NII next year and beyond? You know, I guess the intermediate term outlook that you guys have talked about.

Jeremy Barnum -- Chief Financial Officer

Yeah. Sure. Thanks, Jim. So, yeah.

So, when we talk about the drivers of the upward revision, as I said, it's, you know, higher rates, coupled with lower deposit reprice. Hard to untangle the two drivers. And specifically, I think when you look at consumer, the combination of the passage of time, you know, and the positive feedback we're getting from the field on the CD offerings, in particular, has meant that -- you know, it's quite a kind of stable environment from that perspective. And similarly, in wholesale, we're just seeing slower internal migrations.

You know, you asked about mix. I think that, obviously, we're seeing the CD mix increase, and we would continue to expect -- we would continue to -- we would expect that to continue to take place probably even past the peak of the rate cycle into next year as we continue to capture money in motion. But as you say, the most important point is the fact that, as I said earlier, we don't consider this level of NII generation to be sustainable. And we talked previously about a sort of medium-term run rate in the mid-70s.

That was before First Republic. And, you know, we could argue that maybe that number should be a little higher. But whatever it is, it's a lot lower than the current number. We don't know when that's going to happen.

You know, we're not going to predict the exact moment. That's going to be a function of competitive dynamics in the marketplace. But we want to be clear that we do expect it at some point.

Jim Mitchell -- Seaport Global Securities -- Analyst

OK. But I guess just one follow-up on that, just if we don't get rate huts -- rate hike -- rate cuts, sorry, till middle of next year or later, does that sort of give some confidence to the outlook for next year or are you still worried about significant reprice?

Jeremy Barnum -- Chief Financial Officer

I wouldn't necessarily assume that the evolution from the current run rate into that mid-70s number is that sensitive to the rate outlook, in particular. When we put that number out there, we looked at a range of different types of rate environments and the reprice that we think would be associated with that. It was really meant to capture more of what we consider to be a through-the-cycle sustainable number. So, I wouldn't think of it as being particularly rate-dependent.

Jim Mitchell -- Seaport Global Securities -- Analyst

OK. Great. Thanks.

Operator

Next, we'll go to the line of Erika Najarian from UBS. You may proceed.

Erika Najarian -- UBS -- Analyst

Hi. Good morning. Jeremy, I'm just laughing to myself because I said to you on Investor Day, do you have any more NII rabbits to pull out of the hat? And I guess you do. So, I guess I want to ask a broader question really here.

And maybe, Jamie, I'd like to get your thoughts. So, you earned 23% ROTCE on 13.8% CET1, and we hear you loud and clear that your more normalized NII generation is not 87 billion. You know, that being said and fully taking into account the potential haircut from Basel III end game, is it possible that your natural ROTCE is maybe above that 17% through-the-cycle rate when rates aren't zero? Because when you first introduced that ROTCE target, we were in a different world from a rate scenario, and everybody's talking about even if the Fed cuts, the natural sort of bottom in Fed funds is not going to be zero. So, any input on that would be great.

Jeremy Barnum -- Chief Financial Officer

Yeah. Thanks, Erika. I mean, it's a good question. There's a lot in there, obviously.

I guess I would start by saying that, you know, when we've talked about the 17% through-the-cycle ROTCE, even though we may have introduced that in a moment where we're at the lower zero bound, it was always premised on a sort of normalized rate environment. And at some level, that remains true today. Furthermore, you know, you didn't ask this explicitly, but in the context of the proposed Basel III end game, you know, one relevant question might be if you have a lot more capital in the denominator, what happens to that target? So, I think, as I said in my prepared remarks, we feel very confident about the company's ability to produce excellent returns through the cycle. There's a lot of moving parts right now in that.

Some of them could be good. Some of them could be bad. Narrowly, on the Capital One, the one thing to point out is that the straight up math of simply diluting down the ROTCE by expanding the denominator misses the possibility of reprice, repricing of products and services, which, of course, goes back to our point that these capital increases do have impacts on the real economy. So, we're not suggesting that we can price our way out of it, but we obviously need to get the right returns on products and services, and where we have pricing power, we will adjust to the higher capital.

So, a lot of moving parts in there. But I think the important point is that through a range of scenarios, we feel good about our ability to deliver good results, and we'll see how the mix of all the various factors plays out, especially after we see the Basel III proposal and it goes through the comment period.

Jamie Dimon -- Chairman and Chief Executive Officer

Hey, Erika. I'd just add one thing. Due to we have a mix of businesses that earn from like 0% ROTCE to a 100, we have some which are very capital-intensive, so we look at kind of all of them. And I think 17 is a good number and a good target.

The other thing we're always earning on is credit. You know, we've been over-earning credit for a substantial amount of time now. We're quite constant about it. We know that it's going to tick up.

Just as it's normalized, it'd be consuming more than that now. Like, you know, we would consider credit card normalized to be close to 3.5%. 

Erika Najarian -- UBS -- Analyst

And so, my follow-up question there, maybe Jeremy, could you remind us what unemployment rate is embedded in your ACL ratio as of the second quarter?

Jeremy Barnum -- Chief Financial Officer

Yeah. It's still 5.8.

Erika Najarian -- UBS -- Analyst

Thank you.

Operator

We'll go to the line of John McDonald from Autonomous Research. You may proceed.

John McDonald -- Autonomous Research -- Analyst

Hi. Good morning. Jeremy, wanted to ask about capital. In the wake of the Barr speech, we don't have the details yet, but just kind of want to ask about options that you have and strategies for mitigation, both on RWA and potentially on the GSIB front as well as you contemplate what you heard recently?

Jeremy Barnum -- Chief Financial Officer

Yeah. Thanks, John. So, obviously, we're thinking about that a lot. On the other hand, as much as there have been a lot of very detailed rumors out there that might lead you to start to try to do some planning, it does seem like this time it's real and we are actually going to get a proposal sometime this month or something.

So, soon enough, we'll get to see something actually on paper, and we can stop kind of the guesswork. Having said that, indulging in a little bit of guesswork, it does seem like the biggest single driver of the increase that people are talking about, including Chair Powell's 20% number or Vice Chair's Barr -- Vice Chair Barr's 2% of RWA, which winds up being roughly the same, is just the way operational risk is getting introduced into the standardized pillar. And that is a little bit of a straight-up across-the-board tax on everything. It's kind of hard to optimize your way out of that, with the exception, obviously, of the fact that you can simply increase price assuming you have pricing power.

But that's obviously not what we want, and that's what we sort of mean by impacts on the real economy. So, there are details. There's a lot of the FRTB stuff. You know, we can get way into the weeds there within the markets business, and we do have a good track record of adjusting and optimizing.

But this time around, it may be a more fundamental set of questions around business mix as opposed to, you know, the ability to sort of optimize in a very technical way.

John McDonald -- Autonomous Research -- Analyst

OK. That's helpful. And with a number of years for this to phase-in and you generating capital at a high level, even if the ROTCE comes down a bit, how should we think about your pace of building capital for these new changes versus doing your everyday course of investing and buybacks and things like that over the next couple of years?

Jeremy Barnum -- Chief Financial Officer

Yeah. I mean, I guess I'm sort of tempted to give you our standard capital hierarchy here. I mean, we're not going to select investments, right? That won't come as a surprise to you. Generally speaking, we're always going to try to comply with new requirements early.

So, when we know the requirements and when we have visibility, obviously, given how much organic capital we're generating right now, whatever the answer winds up being, it'll be pretty easy to comply, narrowly speaking. But that's not the same as saying that there won't be consequences to returns or to pricing. And, you know, if, for whatever reason, things aren't exactly as we're anticipating, I don't see us sacrificing investments that we see as strategically critical in order to comply with higher capital requirements ahead of the formal timing or whatever.

John McDonald -- Autonomous Research -- Analyst

OK. And there's some room for buybacks?

Jeremy Barnum -- Chief Financial Officer

Unlikely [Inaudible] That would be an unlikely outcome.

John McDonald -- Autonomous Research -- Analyst

OK. Thank you.

Jeremy Barnum -- Chief Financial Officer

Sorry, John, go ahead. Did you have a follow-up?

John McDonald -- Autonomous Research -- Analyst

Yeah, no, just do buybacks play a role in the next couple of years strategically, just episodically buybacks.

Jeremy Barnum -- Chief Financial Officer

I mean, you know, capital hierarchy again, right? In the end, you know, when we have nothing else to do with the money, we'll do buybacks. And, you know, we talked about the $12 billion for this year. Obviously, a lot of new moving parts there. Although, all else equal, given what we've done so far, that's still probably a reasonable number for the full year.

But, yeah, that's always going to be at the end of the list. But yeah.

John McDonald -- Autonomous Research -- Analyst

Got it. OK. Thank you.

Operator

Next, we'll go to the line of Ken Usdin from Jefferies. You may proceed.

Ken Usdin -- Jefferies -- Analyst

Thanks. Good morning. I just wanted to ask a little bit about how you're feeling about the trade-off between like the commercial economy and what might come through in terms of future loan growth versus the kind of green shoots that people are talking about in the investment banking pipeline and just how it feels in terms of like reopening of markets and the trade-off between, you know, getting some more of those fees in and versus what's happening on the loan demand side? Thanks.

Jeremy Barnum -- Chief Financial Officer

Sure. Good question, Ken. So, I think in terms of investment banking and markets, yeah, some -- you know, it's better than expected. Last month, a lot of talk about green shoots, especially in capital markets generally.

Still definitely some headwinds in M&A. You know, lower announced activity, some regulatory headwinds there. So, we'll see. I think it's a little too early to call a trend there based on recent results, but we'll see.

In terms of the broader economy and loan growth expectations, generally, we do still expect reasonably robust card loan growth. But away from that, for a variety of different reasons and different products, whether it be mortgage or C&I after revolver normalization, you know, and especially if we see a little bit of a cooling off of the economy, I would expect loan demand to be relatively modest there. So, we're not really expecting meaningful growth away from card. But of course, you know, we're there for the right deals, right products, right terms.

You know we lend through the cycle. So, I see that as more of a demand-driven narrative, which will be a function of the economy rather than a -- any tightening on our side.

Ken Usdin -- Jefferies -- Analyst

That makes sense. And as a follow-up to that, on the consumer side, you mentioned that consumers continue to spend, albeit a little more slowly, and you mentioned that consumers are also using their excess deposits a little bit more as well. Can you just elaborate a little bit more on just your feeling about the state of the consumer and is that card growth continued to be driven by people needing to revolve as opposed to, you know, wanting to have more in their deposits? Just kind of what the trade-off on that side, too?

Jeremy Barnum -- Chief Financial Officer

Yeah. I mean, to us, I think we still see this as a normalization, not a deterioration story when we talk about consumer credit. Actually, revolve per account has still not gotten to pre-pandemic levels actually. So, I would definitely say that it's a wanting rather than needing, at least for our portfolio at this point.

And yeah, you know, I think the consumer continues to surprise on the upside here.

Ken Usdin -- Jefferies -- Analyst

Got it. OK. Thank you.

Operator

Next, we'll go to the line of Gerard Cassidy from RBC Capital Markets. Please go ahead.

Gerard Cassidy -- RBC Capital Markets -- Analyst

Good morning, Jeremy. Good morning, Jamie. Jeremy, can you give us your view on how you're measuring the Treasury functions and the asset liability of your balance sheet as we go forward versus the way you guys were positioning and managing it a year ago in view of the fact that it looks like maybe we're approaching the terminal rate on Fed funds rates?

Jeremy Barnum -- Chief Financial Officer

Yeah. Gerard, I would say, honestly, not much change there actually. You know, we've been pretty consistently concerned about the risk of higher rates. Of course, we always try to position things to produce reasonable outcomes across a broad range of scenarios.

But at the margin, we've been biased toward higher rates, and that may be a little less true at these levels than it was before, although a lot of that is just the consequence of positive convexity playing out in the modeling. But in any case, you know, all else equal, I think we are going to continue to focus on making sure we're fine in a higher rate scenario while staying balanced across a range of scenarios. So, not really a lot of change in our positioning. And that's obviously including the fact that we took on First Republic, which, you know, even net of some of the liabilities, had a long structural interest rate position.

And we did not actually want to get longer as part of the deal. And so, as a result, we took actions to ensure that net-net, we are still about the same as we were last quarter.

Gerard Cassidy -- RBC Capital Markets -- Analyst

Very good. And then as a follow-up, you mentioned in giving us the read-through on the commercial banking segment of the business that you had some reserve building tied to some office real estate and also some downgrades in the middle market area. Can you go a little deeper? What are you guys seeing in this area of both commercial real estate, but also the C&I loans, what's happening in that segment as well?

Jeremy Barnum -- Chief Financial Officer

Yeah. So, I would caution you from drawing too broad a conclusion from this. I mean, I think that when we talk about office, for example, you know, our portfolio, as you know, is quite small and our exposure to sort of so-called urban dense office is even smaller. The vast majority of our overall portfolio is multifamily lending.

And so, as a result, like our sample size of observed valuations on office properties is quite small. But, you know, we'd like to be sort of ahead of the cycle. And based on everything that we saw this quarter, it just felt reasonable to build a little bit there to get to what felt like a comfortable coverage ratio. Across the rest of the middle market segment, we saw downgrades and excessive upgrades.

But I don't see that as sort of necessarily indicative of anything terribly significant in the broader rate across.

Gerard Cassidy -- RBC Capital Markets -- Analyst

Thank you.

Operator

Next, we'll go to the line of Steve Chubak from Wolfe Research. Please go ahead.

Jeremy Barnum -- Chief Financial Officer

Steve, are you there?

Operator

It looks like his line dropped. So, next, we'll go to the line of Ebrahim Poonawala from Bank of America. You may proceed.

Ebrahim Poonawala -- Bank of America Merrill Lynch -- Analyst

Good morning. I guess just first question, following up on the outlook for the economy. Like we've all been worried about a recession for a year, and there's a debate about the lagged effects of the Fed rate hike cycle. When you think about -- Jeremy, I think you mentioned your unemployment outlook relatively similar today versus a quarter ago.

How worried should we be in terms of the credit cycle six to 12 months from now or are you leaning toward concluding that maybe U.S. businesses, consumers have absorbed the rate cycle a lot better than we expected a year ago?

Jeremy Barnum -- Chief Financial Officer

Yeah. So, I mean, I'm sure Jamie has some views here, but in my view, I would just caution against jumping to too many super-positive conclusions based on a couple of recent trends. And I think, generally, our point is less about trying to predict a particular outcome and more about trying to make sure that we don't get too much euphoria that over concentrates people on one particular prediction when we know that there's a range of outcomes out there. So, obviously, people are talking a lot about the potential for soft lending right now.

You know, no lending, you know, immaculate disinflation or whatever. And, you know, whether our own views on that have changed meaningfully, I don't know. But the broader point is that we continue to be quite focused on Jamie's prior comments that, you know, loss rates still have time to -- have room to normalize even post-pandemic, so we're probably over-earning on credit a little bit. Obviously, we've talked about the expectation that the NII is going to come down quite a bit.

So, even forgetting about whether you got some surprisingly negative outcomes on the economy from where we stand today, even in the central case, you just need to recognize that there should be some significant normalization.

Jamie Dimon -- Chairman and Chief Executive Officer

Yeah. And I would just add, the 5.8% is not our prediction. That is the average of the unemployment under multiple scenarios that we have to use, which are hypothetical for CECL. So, asset prediction is going to all look something different, and we don't know the outcome.

We're trying to be really clear here. The consumer is in good shape. They're spending down their excess cash. That's all tailwinds.

If even we're going to recession, they're going in with rather good condition with low borrowings and, you know, good house price value still. But the headwinds are substantial and somewhat unprecedented. This war in Ukraine, oil and gas, quantitative tightening, unprecedented fiscal needs of governments, QT, which we've never experienced before. And I just think people should take a deep breath in that.

And though -- we don't know if those things could put us in a soft lending, a mild recession, or a hard recession. And obviously, we should all hope for the best.

Ebrahim Poonawala -- Bank of America Merrill Lynch -- Analyst

Got it. And just to follow up on the upcoming Basel reforms, two questions. You've talked about the impact to the U.S. economy.

Like others have said the same. At this point, is that falling on deaf ears? And secondly, maybe, Jeremy, if you can touch upon just structural changes that you expect to make in the capital markets business because of FRTB? Thank you.

Jeremy Barnum -- Chief Financial Officer

Yeah. So, on your first point, I mean, you know, I think you can just read Vice Chair Barr's speech, right? He addressed that point fairly directly. He clearly doesn't agree, as is his right. So, we'll see what happens.

We continue to feel that, all else equal, higher capital requirements definitely are going to increase the cost of credit, which is bad for the economy. So, we'll see what happens on that. On FRTB, it's really very nuanced. It's probably like too much detail for this call, to be honest.

But just to give you like one immaterial and insignificant but useful example, you know, one product under FRTB is yield curve spread options. And, you know, if the FRTB proposal goes through as currently written, that product just becomes not viable. So, obviously, if we need to stop doing that product, no one really cares. But it's just one example of the way sometimes when you're really disciplined about allocating capital thoroughly all the way down to individual products and responding accordingly, you can wind up having to change your business mix.

There are obviously more significant products that matter much more for the real economy like mortgage, where, you know, the layering on of the operational risk in the way it's being proposed, especially if some of the other beneficial elements of the proposal don't come through, you know, you're once again making that product even harder to offer to homeowners. So, we'll see what happens.

Jamie Dimon -- Chairman and Chief Executive Officer

And I would just add to that. So, the product -- even if your product doesn't make money, you might do it for clients who are great clients. You're going to manage by product, by client, and by, effectively, business mix. And those are the adjustments.

Roughly, loans don't make sense to put into your balance sheet as a whole. Almost any loan. And, you know, that's just people have to recognize that. And, you know -- so we just have to manage through all the various complications here and figure what we're supposed to do.

Ebrahim Poonawala -- Bank of America Merrill Lynch -- Analyst

Thank you.

Operator

Next, we'll go to the line of Mike Mayo from Wells Fargo Securities. You may proceed.

Mike Mayo -- Wells Fargo Securities -- Analyst

Hi. I had another question on Vice Chair Barr's speech from this week. To the extent that capital ratios do go up 20% for you and perhaps others, to what degree would you think about changing your business model in terms of remixing where you do business repricing or simply removing activities that you used to do? It's Kind of ironic or maybe it's not ironic that Apollo hits an all-time stock price high the same week as the speech. So, does that -- how much business leaves JPMorgan or the industry if capital ratios do go up as much as potentially proposed?

Jeremy Barnum -- Chief Financial Officer

Yeah. Mike --

Jamie Dimon -- Chairman and Chief Executive Officer

Before -- wait, before Jeremy answer your question, I just want to say this is great news for hedge funds, private equity, private credit, Apollo, Blackstone, you know, and they're dancing in the streets.

Jeremy Barnum -- Chief Financial Officer

Yeah. Exactly. And I was going to say, Mike, yes to everything. So, meaning, repricing, yes, definitely, to the extent that we have pricing power.

And the higher capital requirements mean that we're not generating the right returns for shareholders, we will try to reprice, and we'll see how that sticks and how that flows into the economy and how that affects demand for products. And if the repricing is not successful, then, in some cases, we will have to remix, and that means getting out of certain products and services. And as Jamie points out, that probably means that those products and services leave the regulated perimeter and go into, you know, elsewhere. And that's fine.

As Jamie points out, those people are clients. And I think that point was addressed also in Vice Chair Barr's speech. So -- but, you know, traditionally, having risky activities leave the regulated perimeter has had some negative consequences. So, these are all important things to consider.

Mike Mayo -- Wells Fargo Securities -- Analyst

All right. And a separate question. I appreciate the Investor Day. It gives a little bit more color on the degree that your investment may or may not pan out.

We are still all watching that closely. Having said that, you just increased revenue guidance by 10 billion for NII between this quarter and the first quarter without changing expense guidance by even $1. Aren't you tempted to spend a little bit more? Why not spend more if you're gaining share? And I'm not saying that you should. I'm just wondering like aren't you tempted to do so? You have $10 billion more revenues, and you're not spending $1 more on expenses.

Like why not?

Jeremy Barnum -- Chief Financial Officer

Mike, let me get this right. You're actually complaining that our expenses aren't high enough. Is that right?

Mike Mayo -- Wells Fargo Securities -- Analyst

Well, I -- wait, just to just be clear, I'm just -- it's just the flip side of the question I asked for two years, you know, going back [Inaudible]

Jeremy Barnum -- Chief Financial Officer

Fair enough. I appreciate the balance. Now, in all seriousness, we've always been pretty clear, right, that our spending is through-the-cycle spending, based on through-the-cycle investment, through-the-cycle spending based on our through-the-cycle view of the earnings-generating power of the company and the goal to produce the right returns. So, broadly speaking, NII tends to flow straight through to the bottom line, both when it's going up and, by the way, when it's going down, too.

And we've been through those moments, as you well remember. So, whether or not there are opportunities to deploy some more dollars into marketing and stuff like that, we have actually looked at that recently. I don't see that being a meaningful item this year, which is part of why we have not revised the expense guidance so far. But this is about investing through the cycle and being honest and disciplined about which revenue items flow, carry expense loading, and which of them don't.

Mike Mayo -- Wells Fargo Securities -- Analyst

And then last quick follow-up. 

Jamie Dimon -- Chairman and Chief Executive Officer

[Inaudible] I think we're kind of running as fast as we can. So, we actually sat down directly with credit compliance, audit markets, bankers, recruiter, trainers to sustain this. Mike, this is it. You know, we're full effort right now, and we want to make sure we get things right and get things thoughtful and careful.

So, it's not just the money, it's the people and how many things can you change all at once and add to all at once.

Mike Mayo -- Wells Fargo Securities -- Analyst

And then one quick follow-up to that. Your efficiency ratio this quarter is the lowest we've seen in a long, long time. I guess you're saying don't extrapolate this efficiency ratio because NII will come down at some point. But when you just simply look at you benchmark yourself against the low-cost providers, where do you think you're there now and where can you still go because if you extrapolate this quarter, you're getting closer?

Jeremy Barnum -- Chief Financial Officer

Yeah. I mean, you said it yourself, right? You definitely can't extrapolate the current numbers. But I think more broadly, on venturing -- benchmarking ourselves to low-cost providers, it sort of speaks to an area that you've been interested in for a long time, which is all of the investment that we're doing in technology to improve generally scalability and get more of our cost base to be, you know, variable versus fixed in terms of how we respond to volumes, that's a big part of the reason that we're doing the investments that we're doing in modernization and cloud and AI and all the type of stuff that we talked about a lot. So, I think we feel really good about our efficiency as a company, but there definitely is room for improvement.

Mike Mayo -- Wells Fargo Securities -- Analyst

All right. Thank you.

Operator

Next, we'll go to the line of Steven Chubak from Wolfe Research. You may proceed.

Steven Chubak -- Wolfe Research -- Analyst

All right. Thanks for taking the question and apologies for the technical issues earlier. I wanted to ask on the deposit outlook, just with signs that recent liquidity drawdown has come predominantly out of our RRP versus industry deposits. Just want to get your thoughts on what expectations you have for deposit growth in the second half, both for you and even the broader industry, especially as Treasury issuance really begins to ramp in earnest?

Jeremy Barnum -- Chief Financial Officer

Yeah. Good question, Steve. So, let me say a couple of things about this. So, obviously, our deposit numbers have bounced around a little bit as a function of some of the turmoil that we saw in regional banks, as well as, obviously, the First Republic transaction.

But now, if you look at our kind of end-of-period deposits this quarter and you project forward, our core view is that we would expect a sort of modest downward trend to reassert itself from this higher starting point broadly as a function of QT playing to the system but noting that we do have some hope for offsets by taking share. Just to give a couple of examples, like in consumer, you know, we've got some of our branch expansion markets seasoning, and so there are shareholder committees there. And then wholesale, we obviously invested a lot in products and services. And so, we think we have compelling offerings that are helping us win mandates.

And so, there are potentially some share offsets there. But broadly, we -- our core view remains modest deposit declines across the franchise. Within that, you note the same thing we've noted that, you know, as we got through the debt ceiling and the TGA build has come into effect, and you've seen a lot of build issuance, you know, big question in the market about whether that was going to come out of reserves or come out of RRP. And so far, with most of the TGA build, I guess they're targeting 600, and they're up 550 or something, so they're almost done.

You know, more of it than some people feared has come out of RRP. So, as you say, I think that's a relatively good sign and highlights how the system works better when you've got, you know, ample supply of short-dated collateral in the front of the yield curve. So, that whole RRP TGA thing, you know, reserve dynamic is going to continue to be significant, but it is good to see RRP coming down a little bit.

Steven Chubak -- Wolfe Research -- Analyst

Helpful color. And just a follow-up on card income. You know, revenues were muted in the quarter. I was hoping you could unpack just the sources of pressure, maybe more specifically, how much of the drag is associated with FAS 91 versus some other factors?

Jeremy Barnum -- Chief Financial Officer

Yeah. So, actually, that card income number, Steve, is a little bit of a one-off thing. So, we had a reward liability adjustment this quarter, kind of a technical thing. So, that's just a temporary headwind.

And also, the sequential comparison is also getting hurt by a small positive one-off item in the prior period. So -- and obviously, I know you guys look at it, but card income isn't sort of a thing that we look at that much ourselves.

Steven Chubak -- Wolfe Research -- Analyst

Can you size the reward liability impact?

Jeremy Barnum -- Chief Financial Officer

Why don't you get Michael to give that to you? It's not that significant, but it's enough to just make the sequential number look a little bit wonky.

Steven Chubak -- Wolfe Research -- Analyst

Great. Thanks for taking my questions.

Operator

Next, we'll go to the line of Glenn Schorr from Evercore ISI. You may proceed.

Glenn Schorr -- Evercore ISI -- Analyst

Thank you. Just want to follow up on this pricing power conversation because you've been consistent over time that you have a limited ability to sustain pricing power due to competitive landscape. But I guess my question is, if not now, when? Meaning, a lot has changed on the institutional side, the European bank side, the regional bank side. And I would think that there would be certain businesses that you have a greater ability and willingness to push price on.

And then maybe you could tie that to your comments in the press release on what are the material -- what are the real world consequences for markets and end users that you're referring to when talking about material regulatory changes? Thanks a lot.

Jeremy Barnum -- Chief Financial Officer

Sure. So, look, on pricing power, you're right. It really depends on the product and it depends on the competitive landscape across different banks. And so, it's very granular.

It's very product-specific. And, you know, in some of the cases, we'll have more pricing power than in other cases. I think the overall point that we're trying to make in connection with Basel III end game is just that, you know, like we think the capital increases are excessive. It puts pressure on returns, all else equal.

That obviously puts pressure on us to increase price where we can. That is generally a bad thing for the real economy. And how all of that plays out in detail across different products and services remains to be seen, importantly, since we don't actually have the proposal yet. So, we need those details.

I'm sorry, Glenn, I forgot the second half of your question. What was it?

Glenn Schorr -- Evercore ISI -- Analyst

Actually, I think you hit on it, so I'll just do a follow-up on a related. So, the notion of private credit doing large traditional investment-grade lending activity is maybe part of the competitive landscape that limits the ability to push price. In Jamie's letter, you talked about the downsides -- or my question is what's the downside if more of the mortgage credit asset-backed intermediation business is pushed out of the banking system?

Jeremy Barnum -- Chief Financial Officer

I mean, I guess it depends on what you mean by downside, but I just think, you know, societally speaking, I think we've seen in recent history that, you know, when home lending is happening outside the regulated perimeter, you know, and things get bad, you know, when you have economic downturns, it produces bad outcomes for individuals and homeowners and society as a whole. So, I mean, Jamie has written about this extensively. Beyond that, you know, financially, we've talked about how mortgage lending -- I mean, the profitability swings obviously. It's reasonably cyclical.

And in the recent past, it's actually been very profitable, then it was less so. Like the corresponding channel right now is actually picking up a little bit. But it's a thin-margin business. It's challenging.

And when you increase the capital requirements, it makes it even harder. So, that just becomes one of the areas where you're in that tension between remixing versus pricing power that we talked about a second ago. And it might, in fact, mean that we do less credit available for homeowners and more regulatory risk as the activity moves outside the perimeter.

Glenn Schorr -- Evercore ISI -- Analyst

Appreciate that, Jeremy.

Operator

Next we'll go to the line of Betsy Graseck from Morgan Stanley. You may proceed.

Betsy Graseck -- Morgan Stanley -- Analyst

Hi. Good morning.

Jamie Dimon -- Chairman and Chief Executive Officer

Yeah, Betsy.

Betsy Graseck -- Morgan Stanley -- Analyst

I just wanted to unpack a little bit more the drivers of the change you outlined that's coming in the 10-Q, Jeremy, regarding the asset sensitivity going from liability-sensitive to asset-sensitive, at least that's the way I read it. I just wanted to understand what the drivers of that is.

Jeremy Barnum -- Chief Financial Officer

Yeah. Sure. No problem, Betsy. I mean, as you know, that's always been a challenging number.

You know, it's meant as a risk management measure of sorts, although it's also somewhat limited in that respect. And it has been an uneven usefulness in terms of the potential to be able to predict our NII trajectory when rates change. But, you know, as we've looked at that and try to improve it and spoken to all of you through this latest rate hiking cycle, we've come to the conclusion that would improve the usefulness of the disclosure if we include it in the modeling the effect of deposit repricing lags. And so, we've done that, and that just has the effect that I talked about.

It increases the EAR number by about 4 billion from minus 1.5, which is roughly what it was last quarter and what it would have been this quarter without the change, to something more like 2.5.

Betsy Graseck -- Morgan Stanley -- Analyst

But then --

Jeremy Barnum -- Chief Financial Officer

All the usual caveats apply, right? I mean, it's never -- the answer is going to always -- for any given change in rates, the change in our NII is always going to be, for one reason or another, different from what that disclosure shows. But we do our best to make it.

Betsy Graseck -- Morgan Stanley -- Analyst

OK. And so, is it fair for me to think about that change as a mark to market to where we are today? And when I think about your forward guide here, longer term, you're saying, look, deposit betas are accelerating. So, as I go through the 10-Qs over the next four or five quarters, I should expect that that 2.5 should come down because deposit betas you're anticipating are going to be accelerating from here. I'm just trying to put those two things together.

Jeremy Barnum -- Chief Financial Officer

Yeah. It's a good question. It's quite a technical issue. So, I think, in the past, the way this number was constructed was to assume through-the-cycle betas and all the deposits.

And so, your notion that like the number would include a deposit beta acceleration would not have been the case because it would have been using essentially terminal deposit betas for the scenario -- based on the forward curve and then based on a 100% shock to the forward curve. The nuance that we've introduced now is to recognize that given the shock, the reprice that the beta predicts will not be instantaneous. And so, you get sort of just the mathematical consequences of that. But I think translating that into a statement about our expectation for beta, you know, for the next 12 months relative to our NII guide might be a bridge too far.

I'm not sure you can actually draw that conclusion.

Betsy Graseck -- Morgan Stanley -- Analyst

Right. But the -- but you were saying earlier, deposit betas, you do anticipate are going to be accelerating from here and that's part of the outlook for NII longer term to normalize in the mid-70s. Is that right?

Jeremy Barnum -- Chief Financial Officer

Yes. But let me add precisely --

Jamie Dimon -- Chairman and Chief Executive Officer

Yeah.

Jeremy Barnum -- Chief Financial Officer

Go ahead, Jamie.

Jamie Dimon -- Chairman and Chief Executive Officer

Yeah. OK. Basically, yes, as you have -- if the next round is going to be -- the beta go from 30 to 40 to 50. I mean, whatever the product is, yeah, that's the lag, and the 2.5 will go down over time as that actually happens if rates actually go up.

If the rates don't actually go up, the 2.5 may be exactly 2.5 again.

Betsy Graseck -- Morgan Stanley -- Analyst

Got it.

Jeremy Barnum -- Chief Financial Officer

And what I was going to say, Betsy, is just that the projection of the 87 coming down to a significantly lower number contains both the element of internal migration, as well as the potential, which is by no means guaranteed, of product-level reprice. And furthermore, then obviously, the dynamics are a little bit different in the different business segments as you move from large corporate wholesale to consumer.

Betsy Graseck -- Morgan Stanley -- Analyst

OK. All right. Thank you. I appreciate it.

Jeremy Barnum -- Chief Financial Officer

Yup.

Operator

Next, we'll go to the line of Matt O'Connor from Deutsche Bank. You may proceed.

Matt O'Connor -- Deutsche Bank -- Analyst

Good morning. So, I'm in your camp that eventually consumers will want more deposit rate sensitivity here. But I guess, what would make you change your rates meaningfully? So, the top two banks have about 50% consumer market share. Loan-to-deposit ratios are low.

Your outlook for loan growth and I think others is fairly sluggish, at least outside of card. So, I get that it's common sense, and that's what we've seen historically. But there really is a kind of big divergence among big banks and everybody else where the big banks just don't need to pay that much for deposits for a slew of reasons. So, what would make you change that?

Jeremy Barnum -- Chief Financial Officer

Yeah, In the end, Matt, it's just feedback from the field. It's competition and feedback from the field. You know, we project --

Jamie Dimon -- Chairman and Chief Executive Officer

I think every bank is in a different position about what they need. And so, you have a whole range of outcomes. But remember, we do this also by city. So, you have different competition in Arizona and Phoenix than you have in Chicago, Illinois, and we do have high-interest rate products.

So, it's a combination of all those things. I wouldn't call it a big bank versus small banks. And you're going to see when everyone reports who kind of paid a little bit more for things and who didn't and things like that. So, I -- look, I would take it as a given.

I think it's a mistake. There is very little pricing power in most of our business, and betas are going to go up. You take it as a given. There's no circumstance that we've ever seen in the history of banking where rates didn't get to a certain point that you had to have competing products.

And rates go up through migration or direct rates or move into CDs or money market funds, and we're going to have to compete for that. You already see it in parts of our business and not in other parts.

Jeremy Barnum -- Chief Financial Officer

OK. And I'll add there --

Matt O'Connor -- Deutsche Bank -- Analyst

Well, I 100% --

Jeremy Barnum -- Chief Financial Officer

Matt, is just that it's really just about primary bank relationships in the end. You know, that's the core of the strategy.

Matt O'Connor -- Deutsche Bank -- Analyst

Yeah. I mean, again, I 100% agree, but we've never seen kind of loan-to-deposit ratios for banks like yours this low. So, you could just let deposits run off at a modest amount for quite some time to make the decision not to pay up. I mean, I assume that's the trade-off that eventually you'll --

Jamie Dimon -- Chairman and Chief Executive Officer

That's a little more complicated because that -- you know, a lot of that loan-to-value ratio is lower because of regulatory stuff, LCR, capital ratios, etc.

Matt O'Connor -- Deutsche Bank -- Analyst

Got it. OK. All right. Thank you.

Jeremy Barnum -- Chief Financial Officer

Thanks.

Operator

And for our final question, we'll go to Charles Peabody from Portales Partners. You may proceed.

Charles Peabody -- Portales Partners -- Analyst

Good morning. Jeremy, on Page 4 of your presentation, you showed some liquidity metrics. And there's been a meaningful deterioration -- or I shouldn't say deterioration, depletion of some of that excess liquidity obviously for First Republic primarily. So, my question is how quickly do you want to rebuild that liquidity? Because as I look out toward '24, there's probably a half dozen variables that are going to make liquidity a premium event to have excess liquidity.

So, that's my first question, is what's your plans for replenishing that liquidity?

Jeremy Barnum -- Chief Financial Officer

Yeah, Charles. So, I know we talked about this a little bit at Investor Day, right? So, as I said in my prepared remarks, yeah, we think about half of the change in the bank LCR number is a consequence of First Republic. And the rest of it is just the expected, you know, decrease in systemwide deposits falling through into our HQLA balances in the bank LCR ratio. So, that's all entirely as expected.

And therefore, I think that the replenishing notion is not correct. In fact, obviously, we still have ample liquidity. Now, if you want to project trends forward, that's a different story. But, you know, that's sort of the business of banking.

We'll adjust accordingly in terms of our asset and liability mix across different products and to ensure compliance to the ratios and quarter's balance sheet principles as you would expect from us.

Jamie Dimon -- Chairman and Chief Executive Officer

And I would just add that just look at the number at the top of the page in the press release, 1.4 trillion of cash and marketable securities. Even if we get down to no excess, we're going to have like, I've got the exact number, 1.2 trillion. I think we have excess liquidity, and the liquidity ratios are slightly -- have slightly some differences. I think there's plenty of liquidity in the system.

And of course, we do multiple things to change this overnight if we wanted to.

Charles Peabody -- Portales Partners -- Analyst

Right. So, sort of wrapped into that as a follow-up, if you take your 87 billion forecast for NII this year, and, you know, that implies at least a one quarter of maybe 22 billion of NII, and you take your eventual forecast of mid-70, you know, billion of NII at some point in the future, that would imply at least one quarter of 18 billion of NII. So, that's about an 18% drop. And if you hold the balance sheet steady, you're talking about, you know, a 30-basis-point drop in your margin, your NIM, to get to that from 22 billion to 18 billion.

I mean, what is driving -- is it really the deposit or are you thinking in terms of interest reversals as credit deteriorates or is it rebuilding of liquidity? I'm just trying to get a better sense of what the big impact is.

Jeremy Barnum -- Chief Financial Officer

Yeah. Hey, Charlie. I would think of that as being really entirely a deposit story. It's just not that complicated, right? I think we did this, I think it was either in the fourth quarter or in the first quarter, but we put a little chart on a page.

Just in very simple terms, this shows like what the dollar consequences are of whatever, like a 10-basis-point change in deposit rate paid in terms of NII run rate. So, whether it's as a consequence of migration from lower yielding to higher yielding, going from 0% to a 4% CD is obviously a big impact on margin, or whether it's because, you know, savings reprice is relatively small changes in rate there are kind of a lot of money when you've got, you know, a couple of trillion dollars of deposits. So, it's really not any more complicated than that, and that's why we're being so forceful about reminding people about what we expect that trajectory to be.

Charles Peabody -- Portales Partners -- Analyst

Thank you.

Operator

And we have no further questions at this time.

Jeremy Barnum -- Chief Financial Officer

Thank you very much.

Jamie Dimon -- Chairman and Chief Executive Officer

Thank you, guys.

Operator

[Operator signoff]

Duration: 0 minutes

Call participants:

Jeremy Barnum -- Chief Financial Officer

Jim Mitchell -- Seaport Global Securities -- Analyst

Erika Najarian -- UBS -- Analyst

Jamie Dimon -- Chairman and Chief Executive Officer

John McDonald -- Autonomous Research -- Analyst

Ken Usdin -- Jefferies -- Analyst

Gerard Cassidy -- RBC Capital Markets -- Analyst

Ebrahim Poonawala -- Bank of America Merrill Lynch -- Analyst

Mike Mayo -- Wells Fargo Securities -- Analyst

Steven Chubak -- Wolfe Research -- Analyst

Glenn Schorr -- Evercore ISI -- Analyst

Betsy Graseck -- Morgan Stanley -- Analyst

Matt O'Connor -- Deutsche Bank -- Analyst

Charles Peabody -- Portales Partners -- Analyst

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