JPMorgan Chase & Co. JPM

Key data

The business

JPMorgan earns money four ways: a consumer bank taking deposits and making card, auto and home loans; a corporate and investment bank that trades and underwrites; asset and wealth management; and a commercial bank. The engine underneath all of it is deposits, $2.71 trillion of them, and the cheapest, stickiest slice is the $597 billion that pays no interest at all. That is the moat. It lets JPMorgan fund loans at a loan-to-deposit ratio of just 57%, so it lends from a position of surplus while smaller banks stretch. The customer sees a Chase branch on the corner and a Sapphire card in the wallet; the bank sees a funding base that reprices slower than rates fall.

The numbers

Five quarters show the shape. Revenue and profit stepped up hard into Q2 2026, and that last quarter carries a one-time gain.

That $7.70 is not the run-rate. Noninterest income leapt to $31.8 billion from $24.5 billion the quarter before, a large one-time gain, and reported ROTCE hit 29%. Full-year consensus of $24.83 against first-half earnings of $13.64 implies roughly $5.60 a quarter in the back half, so about $1.70 of that Q2 print was a one-timer. Strip it and normalized ROTCE sits in the low-20s. Still elite, just not 29%.

The five-year record is a genuine compounder, not a rebound.

Tangible book per share grew to $113.35 from $103.40 a year earlier, up 9.6%, and the $6 annual dividend adds another five points. Low-20s ROTCE funds mid-teens compounding of tangible book plus dividend, which is the whole reason to own it. The question is what you pay for that: 3.2x tangible book is the top of a twelve-year band that usually ran 1.6x to 2.1x, and peers sit near 1.9x.

Credit, the thing that ends bank stories, is behaving. Firmwide Q2 2026: net charge-off rate 0.66%, nonperforming assets $9.8 billion, allowance-to-loans 1.79%. Card 30-plus delinquencies ran 1.91% versus 2.06% a year ago, and 90-plus stood at 1.00% versus 1.07%. Charge-offs in card services ran 3.34%, down from 3.40% in Q1 and from 3.49% a year prior. The trend is benign: losses peaked mid-2025 and have eased since. The watch-item from earlier, that a full price would become a peak price the quarter credit turned, has not fired: credit improved rather than cracked. The one place to keep eyes is card, where the charge-off rate remains elevated at 3.34%, because card is where the losses always show first. My read the market does not share: normalized ROTCE is low-20s, not 29%, so the record multiple is pricing peak quality with little cushion. The print that settles it is Q3 2026 ROTCE excluding one-time gains.

Management

The record is the argument here. Jamie Dimon has compounded tangible book while buying stock back, and buybacks accelerated to $31.6 billion in 2025 from $18.8 billion in 2024, with $8.3 billion more in Q1 2026. That pace ran straight into the highest multiple in twelve years, which is the one uncomfortable line: repurchasing at 3.2x tangible book destroys some value even when the earnings are real. Insiders sold, not bought, $113 million over the last year across 33 sales and zero purchases; Dimon himself sold $40 million in April and $6.8 million in February. Plan status is not disclosed in the filings pulled, so read the sales as a full valuation, not as a signal either way.

How it fails or surprises you

Card credit turns. Card carries a 3.34% charge-off rate against a firmwide 0.66%, so it leads any downturn. Today delinquencies are falling, 30-plus at 1.91% versus 2.06%. If unemployment rises, this reverses first. The print: card 30-plus delinquency and the firmwide charge-off rate through Q3 2026, either ticking back up.

Apple Card and falling rates (right tail). On January 7, 2026, Chase announced it would become the Apple Card issuer, following a December 30, 2025 forward purchase commitment for the portfolio. The addition of those balances and spend comes as rates fall, and that $597 billion of free deposits reprices slower than loans, lifting net interest income. The print: card balances and NII trajectory in the next two quarters.

Normalized earnings are lower than the headline. Q2's $21.2 billion and 29% ROTCE flatter the picture; strip the one-timer and it is low-20s. If the market has anchored to the headline, the re-rate is down, not up. The print: Q3 2026 ROTCE excluding one-time gains landing near 21% to 23%.

Closing thoughts

The market already prices the quality. At 3.2x tangible book and a record multiple, JPMorgan's edge over peers is fully visible and fully paid for, so the return from here is mostly the mid-teens compounding of tangible book plus dividend, not a re-rating. The person selling you the premium calls it peak, and on credit and the one-time gain they have a point; my read is the franchise earns the premium but hands you almost no margin for error. The fatter tail is the flat one, a good bank marking time at a full price, with the left tail a credit turn in card and the right tail Apple plus falling-rate NII, and neither is priced today.

The bet is still that JPMorgan stays the bank every other bank is measured against and keeps that edge as it absorbs the Apple credit card portfolio, without those loans going bad. What breaks it is card credit rolling over while the multiple sits at a twelve-year high. The one pair to watch is the card charge-off rate against normalized ROTCE; if the first climbs while the second slips under 21%, the premium is pricing a peak.