JPMorganChase reported $21.2 billion of net income for the second quarter of 2026, up 41% — the largest quarterly profit in the firm's history, with revenue at a record in every line of business. But roughly $4.3 billion of that came from two items the bank will not repeat. A $4.6 billion net gain on a Visa share exchange and $1.0 billion of marks on equity investments together added $5.6 billion before tax. Strip them out and earnings grew closer to 12%, with the efficiency ratio essentially unchanged from a year ago. The more durable signal sits in the margin line: net interest income rose 10%, yet the net yield on earning assets fell, meaning the growth came from a bigger balance sheet rather than better pricing.
1. Consolidated Balance Sheet
The balance sheet crossed $5 trillion, expanding 13% in just six months. That is unusually fast for a bank of this size, and the composition explains why.
1-1. Selected assets
| Item | Dec 31, 2025 ($M) | Jun 30, 2026 ($M) | Change % |
|---|---|---|---|
| Cash and due from banks | 21,742 | 24,720 | +13.7 |
| Deposits with banks | 321,596 | 285,091 | -11.4 |
| Fed funds sold & resale agreements | 336,426 | 446,143 | +32.6 |
| Securities borrowed | 286,191 | 362,487 | +26.7 |
| Trading assets | 802,873 | 1,062,072 | +32.3 |
| Investment securities, net | 777,332 | 804,522 | +3.5 |
| Loans, net of allowance | 1,467,664 | 1,516,310 | +3.3 |
| Accrued interest & accounts receivable | 111,599 | 179,939 | +61.2 |
| Goodwill, MSRs & other intangibles | 64,458 | 64,304 | -0.2 |
| Total assets | 4,424,900 | 5,015,069 | +13.3 |
About three-quarters of the growth is trading and securities financing, not lending. Trading assets, resale agreements and securities borrowed together added roughly $445 billion. The filing attributes this to client-driven market-making in the Commercial & Investment Bank, plus a comparison against seasonally low year-end levels. Accrued interest and receivables jumped 61% for the same reason — prime brokerage activity.
Lending grew a far more modest 3.3%, led by securities-based lending in Asset & Wealth Management and wholesale demand in CIB. So the headline 13% asset expansion overstates any credit-risk buildup. Much of it is collateralized, short-duration and matched by offsetting liabilities.
Stockholders' equity rose only 3.4% to $374.6 billion. Because assets grew 13.3%, equity as a share of assets fell from 8.19% to 7.47%. The filing explains the gap directly: net income was largely offset by buybacks and dividends.
1-2. Liability structure
| Item | Dec 31, 2025 ($M) | Jun 30, 2026 ($M) | Change % |
|---|---|---|---|
| Deposits | 2,559,320 | 2,713,700 | +6.0 |
| Fed funds purchased & repos | 442,396 | 704,918 | +59.3 |
| Short-term borrowings | 64,776 | 72,430 | +11.8 |
| Trading liabilities | 216,019 | 275,136 | +27.4 |
| Accounts payable & other | 316,794 | 384,290 | +21.3 |
| Long-term debt | 435,206 | 460,523 | +5.8 |
| Total liabilities | 4,062,462 | 4,640,471 | +14.2 |
Repo funding grew 59%, mirroring the asset side. This is market-making plumbing rather than a change in funding strategy. Deposits grew 6% to $2.71 trillion, with inflows across Payments, Securities Services, and the firm's international consumer initiatives.
Loans equal 56% of deposits, down from 57% at year-end. A ratio that low means the bank funds its lending book comfortably and holds a large liquidity surplus.
1-3. Capital
Common equity Tier 1 capital — the highest-quality loss-absorbing capital — stood at $303 billion. The CET1 ratio was 14.2% on both the Standardized and Advanced approaches, down from 15.1% a year earlier. That 0.9 percentage point decline has two causes visible in the filing: the balance sheet grew, which raises risk-weighted assets, and the firm returned capital aggressively. The supplementary leverage ratio was 5.5%.
Book value per share reached $133.01, up 9%. Tangible book value per share was $113.35, up 10% — outpacing book value growth of 9% because intangibles stayed flat, so the same dollar increase in equity lands on a smaller tangible base.
2. Income Statement
2-1. Headline results
| Item | Q2 2025 ($M) | Q2 2026 ($M) | Change % | H1 2025 ($M) | H1 2026 ($M) | Change % |
|---|---|---|---|---|---|---|
| Noninterest revenue | 21,703 | 31,836 | +46.7 | 43,740 | 56,306 | +28.7 |
| Net interest income | 23,209 | 25,511 | +9.9 | 46,482 | 50,877 | +9.5 |
| Total net revenue | 44,912 | 57,347 | +27.7 | 90,222 | 107,183 | +18.8 |
| Noninterest expense | 23,779 | 27,316 | +14.9 | 47,376 | 54,166 | +14.3 |
| Pre-provision profit | 21,133 | 30,031 | +42.1 | 42,846 | 53,017 | +23.7 |
| Provision for credit losses | 2,849 | 2,515 | -11.7 | 6,154 | 5,022 | -18.4 |
| Net income | 14,987 | 21,155 | +41.2 | 29,630 | 37,649 | +27.1 |
| Diluted EPS ($) | 5.24 | 7.70 | +46.9 | 10.31 | 13.63 | +32.2 |
This is a 10-Q, so the filing carries only current and prior-year comparatives. A three-year growth rate cannot be calculated from this document and is not presented here.
Separating one-time from recurring. The quarter contained $4.6 billion from the Visa Class B-2 share exchange completed on May 11, 2026, and $1.0 billion of gains on equity investments ($763 million in Corporate, $263 million in CIB). Applying the reported 23.1% effective tax rate, that $5.6 billion is worth roughly $4.3 billion after tax, or about $1.57 per diluted share. On that basis underlying net income was $16.8 billion, up about 12%, and underlying EPS $6.14 against $5.24 — the figures the firm itself disclosed on this adjusted basis in its July 14, 2026 earnings release.
The prior-year quarter had its own distortion: a $774 million tax benefit from resolved tax audits. Adjusting both sides, the underlying improvement is closer to 19%. Still strong — but less than half the reported 41%.
Operating leverage was roughly flat. Excluding the $5.6 billion of gains, revenue grew 15.2% while expenses grew 14.9%. The reported efficiency ratio improved from 52.9% to 47.6%, but that improvement is almost entirely the Visa gain sitting in the revenue denominator. Adjusted, it lands at about 52.8% — effectively unchanged.
The margin question. Net interest income rose 10%, which sounds like pricing power in a falling-rate environment. The firm's own reconciliation says otherwise:
| Item | Q2 2025 | Q2 2026 | Change |
|---|---|---|---|
| Net interest income, managed ($M) | 23,314 | 25,622 | +9.9% |
| Less: Markets NII ($M) | 561 | 1,945 | +246.7% |
| NII excluding Markets ($M) | 22,753 | 23,677 | +4.1% |
| Avg. earning assets ($M) | 3,845,982 | 4,287,954 | +11.5% |
| Net yield, managed | 2.43% | 2.40% | -0.03%p |
| Net yield excluding Markets | 3.71% | 3.65% | -0.06%p |
Markets net interest income more than tripled. That figure is largely an accounting artifact — revenue in trading books shifts between interest income and principal transactions revenue, which is why the firm evaluates Markets on total revenue instead. Excluding it, core NII grew 4.1% on roughly 5.8% growth in core earning assets, a figure implied by the firm's own NII-excluding-Markets and net-yield disclosures above. The core net yield fell 0.06 percentage points.
Put plainly: the bank is earning more interest because it is bigger, not because each dollar earns more. Asset yields fell 0.29 percentage points to 4.75%. Management guides full-year 2026 NII to roughly $105.5 billion and NII excluding Markets to roughly $96.5 billion.
2-2. Compensation versus non-compensation costs
| Item | Q2 2025 ($M) | Q2 2026 ($M) | Change % |
|---|---|---|---|
| Compensation | 13,710 | 15,159 | +10.6 |
| Occupancy | 1,264 | 1,482 | +17.2 |
| Technology, communications & equipment | 2,704 | 3,107 | +14.9 |
| Professional & outside services | 3,006 | 3,855 | +28.2 |
| Marketing | 1,279 | 1,670 | +30.6 |
| Other expense | 1,816 | 2,043 | +12.5 |
| Total noninterest expense | 23,779 | 27,316 | +14.9 |
Compensation flexes with revenue, because incentive pay is tied to results. It grew 10.6% on revenue-related pay, wage inflation and headcount growth in front-office roles. Non-compensation costs grew faster — from $10.1 billion to $12.2 billion, or 20.7%. Marketing up 31% and professional services up 28% are discretionary spending decisions, not fixed obligations — which means management retains the ability to slow them if revenue turns. Full-year adjusted expense guidance is roughly $107.5 billion.
3. Cash Flows
| Item (six months) | H1 2025 ($M) | H1 2026 ($M) |
|---|---|---|
| Operating activities | (222,292) | (237,044) |
| Investing activities | (291,136) | (211,376) |
| Financing activities | 440,863 | 419,479 |
| Effect of exchange rates | 23,575 | (4,586) |
| Net change in cash | (48,990) | (33,527) |
Free cash flow is not a meaningful measure for a bank, and the operating outflow here should not be read as distress. For a trading institution, purchases of trading assets and securities borrowed are classified as operating outflows. The $237 billion outflow is the mirror image of the trading-asset growth on the balance sheet — it reflects expansion, not cash burn.
The more useful lens is distributable capital. Over six months the firm returned $23.8 billion to shareholders — approximately 63% of first-half net income — split between common share repurchases and dividends. In the second quarter alone the split was $6.2 billion of net repurchases and $4.0 billion of common dividends. Buybacks were flat year over year, while dividends rose about 3% as the declared dividend per share increased to $1.50 a quarter from $1.40, or $3.00 from $2.80 across the half — the per-share increase was partly offset by a smaller share count.
Buybacks reduced the outstanding share count to approximately 2.694 billion from 2.794 billion a year earlier, down about 3.6%. That reduction in the denominator explains why EPS rose 47% while net income rose 41%.
4. Segment Results and Credit Quality
| Q2 2026 | Net revenue ($M) | Change | Net income ($M) | Change | ROE |
|---|---|---|---|---|---|
| Consumer & Community Banking | 20,272 | +8% | 5,311 | +3% | 34% |
| Commercial & Investment Bank | 24,853 | +27% | 9,678 | +46% | 22% |
| Asset & Wealth Management | 6,851 | +19% | 1,957 | +33% | 48% |
| Corporate | 6,046 | +293% | 4,209 | +148% | n/m |
| Total (managed) | 58,022 | +27% | 21,155 | +41% | 24% |
Corporate holds the Visa gain, which is why its net income more than doubled. Firmwide profit rose $6.2 billion year over year, and Corporate alone accounted for $2.5 billion of that — about 41% of the increase from a segment that is not a client-facing business.
Markets carried CIB. Total Markets revenue was $12.1 billion, up 35%. Equity Markets revenue rose 86% to $6.0 billion on strength across products and regions. Fixed Income rose 6% to $6.1 billion. Investment banking fees rose 30% to $3.3 billion — the highest level since 2021 — with equity underwriting up 78% to $829 million on large IPOs and convertible offerings. The firm ranked first in global investment banking fees for the six months, though for the second quarter alone Dealogic placed it second.