Jpm at the Bofa Securities Future Of

JPM AT THE BOFA SECURITIES FUTU R E OF FINANCIALS VIRTUA L CONFERENCE 2020

TRANSCRIPT November 9, 2020

MANAGEMENT DISCUSSION SECTION

Erika Najarian Analyst, BofA Securities, Inc. Hey. Good morning, everybody. It's Erika Najarian again, and welcome to our third session of the day. There's no doubt you'll recognize our next guest, not only is she the most influential – one of the most influential women in the banking industry but also one of the most influential people in the banking industry. From JPMorgan, we welcome Marianne Lake. Formerly the CFO for the company, Marianne was named Chief Executive Officer for Consumer Lending in April 2019. Marianne, thank you so much for joining us today...... Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. And thank you for having me, Erika. Hello, everyone.

QUESTION AND ANSWER SECTION

Erika Najarian Analyst, BofA Securities, Inc. Q So, I thought I'd start off. And you have such a great vantage point at JPMorgan. You see about 10 billion credit transactions a year, credit card transactions per year, coupled with the fact that most macroeconomic data points are reported on a lagging basis. Can you provide an update on the health of the consumer? ...... Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. A Yeah, sure. Happy to do that. So, as we sit here now in what you might call the sort of third wave of the virus, I think I would say that the consumer here in the US is relatively stable and, honestly, somewhat relatively better than we might have feared back in the height of the pandemic in the second quarter of 2020. And that's not in small part as a result of the pretty extraordinary amount of government stimulus that's been in the system since then, but also as a result of sort of pretty broad, industry-wide, across-asset-class payment relief programs. And so, the consumer is in a decent spot right now. To be fair, the consumer came into this crisis in a pretty strong position in terms of household balance sheets and household liquidity and debt service burdens. And so, it's a little different from the previous crisis in that respect. And, likewise, our portfolios in consumer lending came into this crisis, honestly, night and day, differently situated in comparison to the sort of previous crisis. So, as we sit here right now, the economy is doing okay. We're not seeing any decisive signs of softening. Spend trends which is a key part of what I look at, and you mentioned in your question in terms of data, are still grinding higher. And so, we've seen a pretty solid recovery from the lows back in the second quarter. Durable spend is a bright spot. And we see durable spend – consumer spending up 14% year-on-year. And so, the consumers' willingness to carry on spending is a pretty positive sign for a sort of broader economic recovery. So, really, the uncertain points are obvious, and that is, what is the path of the virus from here? What is the path of vaccines? And we saw some news on that today, obviously. And what will a second wave of stimulus look like? We think it's likely that there will be one at some point in January, February timeframe. But what will that look like? How big will it be? And so, all of those will sort of define the sort of outlook going forward, but the consumer is in pretty good shape right now. If you look at the folks who benefited from stimulus, we did see cash buffers go up. And while they are starting to deteriorate, as we come towards the end of the year, they're still elevated relative to pre-COVID levels. So, I think there's enough juice to get people to year-end. And then, there's line of sight, hopefully, to something in the form of stimulus at the beginning of the year next year. And so, I think the consumer should fare relatively well considering the macro environment...... Erika Najarian Analyst, BofA Securities, Inc. Q Given the amount of cash that the consumer is holding and expectations for stimulus, how are you then handling the second wave of deferrals or in the consumer? And if you could break down Card, Home Lending and Auto separately, please......

Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. A Yeah. So, what's interesting – so, let's take Card and Auto together because the sort of relief programs, while different, are more similar they are shorter-duration assets. And as a consequence, the relief programs, the majority of people who asked for help back in the April, May, June time frames have come out of the relief programs at this point. And the majority, the vast majority of them are current today. So taking Card, some 95% of people are out of relief so far, of the people who entered during the pandemic and 85% of those folks are current. So it's not to say there won't be people who will experience stress. And it's a similar pattern true in Auto. We're not seeing a second wave of deferral requests at this point. We are not – what we saw was the request for payment assistance in all three of the asset classes come steadily down and quite dramatically down from April, May, and continue to come down in October versus September and in September versus August. So, we are still getting customers ask for help for the first time. Customers who were able to get through the first six or eight months and are now experiencing hardships but at levels that are much, much lower and still declining. So we're yet to see a second wave. In Home Lending, as you know, the relief program is different. It's different because of the CARES Act but also because of the nature of the payment. 40% of people who ask for help are still in payment relief because that is a 12-month opportunity for them. And so, they're taking advantage of that. We have been able to contact many of them. And so, we do have a decent understanding of how they'll disposition at the end of relief. And again, not to say there won't be people who need ongoing assistance and payment plans and modifications, the vast majority of people we think will end up in the deferment mode. So, no second wave yet. Our relief programs are open. So, we're ready should that be something that we see. As I said at the beginning, this feels like it's not the second but the third wave of the virus. And so far, the economy is holding up quite well, and the consumer is holding up quite well. That isn't to say that we may not see wobbles, but we'll obviously be ready if we do start to see a second wave of requests...... Erika Najarian Analyst, BofA Securities, Inc. Q So, Marianne, just taking a step back, it sounds like a good update on the consumer so far. And as you think about the effectiveness of the government's support programs, do you think that they've been able to redefine what net charge-offs would have been for the consumer lower or have we just sort of delayed the recognition of losses? ...... Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. A Yeah. So, it's the sixty-four-thousand-dollar question or a bigger number than that, for sure. I think we're only really going to know when we get the chance to look back because I think it's going to to a degree depend on what comes from here. I would say that the stimulus that the government put in place pretty quickly and the very, very significant amount of it has been incredibly important. We talk about it in an analogy, it's a bridge. Is the bridge strong enough and is it long enough? And there's no doubt that, so far, the bridge has been strong enough to give people some time to try and get to the other side of their hardship and get back on solid footing and help them get back to a more robust financial position. The real question is, will it be long enough? And as we sit here today, I would say that there will be a need for a second stimulus package. It feels like that is necessary. It also feels like it's likely. And so, I would suspect that when the final analysis is done and the reckoning is done that it will be a bit of both. But right now, given that there is no actual package out there and that a lot of the assistance programs will sort of effectively come to an end, whether its eligibility will reduce or payments will reduce, or cash buffers will deteriorate. Right now, we're assuming it's more of a deferral than it is an absolute reset down. If you look at back in the second quarter, most people who were unemployed were identifying as being temporarily unemployed. So, in the very high-70s in terms of percentage of people saying that they thought that that situation was temporary. That compared to 15% in the prior crisis. And it's now in the 30s. So more and more people are coming to the realization that their income disruption and their employment status might be more permanently impacted. And for those people, it may be that no bridge will be long enough. So, we're recognizing that. We expect that the more traditional relationship between labor market statistics and credit metrics that are optically outperforming right now will probably start coming together in the first half or 2021...... Erika Najarian Analyst, BofA Securities, Inc. Q Got it. So switching topics here a little bit. So prior to the pandemic, most banks agreed that branches remain a critical aspect of banking and lending, especially when it comes to the consumer. Following the stay-at-home orders, how is management rethinking the bank's physical distribution and omni-channel strategy? And what lessons have you learned so far as the head of Consumer Lending in terms of what can be gleaned into this experience with regards to where the branch is still useful and what transactions consumers were able to quickly transfer to digital? ......

Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. A Yeah. So, it won't surprise you for me to say that we still firmly believe in an omni-channel strategy, distribution strategy, which incorporates having the best branches in the best locations, more points of convenience, but also best-in-class digital channels. And that hasn't changed. We still believe that people, our customers – and by the way, 90%-plus of our branches are open today servicing customers, and people are increasingly wanting to come in for advice, and I don't see that changing over the long term. But there are a few things that we're obviously paying attention to evolving customer trends and we'll feed those back into our plans. So, we're opening branches. We've opened more than 120 branches year-to-date (sic) [to-date]. We're going to continue to open them through the end of the year. As you know, we're entering new markets. We had approval from the OCC for 10 new markets which will allow us to be in the Lower 48 states by the middle of 2021. So, we continue to build new branches where our customers want them to be. They're also incredibly important to the vibrancy of our communities. And so, we, as you know, announced the $30 billion commitment to invest in underserved communities, and the branch is the heart of that investment. So, that said, we have seen an acceleration of the secular trend towards digital transactions. We'll see some of that normalize, no doubt, but we are hoping and working on trying to keep that as sticky as possible. That's not just in banking with digital account opening and deposits and QuickPay, but in lending across the ecosystem, too. We saw a dramatic acceleration in digital adoption. And so, you have to build the capabilities to be able to see that scale, we built them. This pandemic obviously was a factor. And the job for us now is to make them so compelling and easy and seamless that people choose them first. So, it's both for us. That was our strategy coming into the pandemic. It will be our strategy coming out. And we're going to work hard on making some of the digital adoption that we saw stick...... Erika Najarian Analyst, BofA Securities, Inc. Q At this year's Investor Day which now seems like a lifetime ago, you discussed...... Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. A It was a lifetime ago...... Erika Najarian Analyst, BofA Securities, Inc. Q ...you discussed how the consumer lending franchise is very instrumental to the bank's client acquisition strategy. And you noted that these relationships contributed more than 50% of the bank's net deposit growths last year. We recognize clearly the impact of government stimulus and the Fed, but could you discuss what you think is driving faster deposit growth at JPMorgan versus peers. And how sticky ultimately are these customers and these deposits if we have a normalization of the rate outlook? ...... Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. A Yeah. So, obviously, we saw very significant – I mean, the whole industry but, no exception here, very significant deposit growth year-over- year, 30% up year-over-year. And as you mentioned, there are a number of factors at play there. But it is also true that we have led the industry in deposit growth for six years. So, while it's true this year, it's been true pretty consistently through time. And we hit number one retail deposit market share this year. And so, it's not a new thing. It's a sort of realization of our ongoing strategy. And at its heart, the core strategy that we think drives that outperformance is investing in primary bank relationships and 75% of all of our customers identify as having their primary bank relationship with Chase. And when you have that relationship, which, by the way, you get through omni-channel distribution, more points of convenience, better digital tools, a brand that is associated with trust and confidence, marketing expertise; it's products, services, customer experience, all those things drive people to treat you as their primary bank. And when they do, that's when you see the outsized deposit growth. And so, if you look at the growth in deposits year-over-year, it's true that a large chunk is pandemic related, meaning lower spend, higher savings rates, higher tax refunds and the like...... Erika Najarian Analyst, BofA Securities, Inc. Q Yes.

...... Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. A It's true that a large chunk is stimulus related. But in both of those cases, the deposits came to us because we had the primary bank relationship. And then, there is a large chunk that is organic growth and we continue to invest in all the capabilities that drive that. So, at the end of the day, the secret sauce is being the primary bank, having deep relationships, Consumer Lending is a critical part of that. When we have multiproduct relationships, all good things happen. And as you said, while we disclosed at Investor Day that relationships, that households that have consumer lending relationships do account for a large part of the net deposit growth, that's still true today, and we expect it to be true going forward, too...... Erika Najarian Analyst, BofA Securities, Inc. Q Got it. I thought I would switch the topic a little bit and maybe ask a few questions here on Card. In previous recessions, JPMorgan has posted peak credit card losses annually between, let's call it, 9% to 10%. So, how is this recession shaping up in terms of where you see that peak loss rate trending? And also, can you please remind us of the different ways you evolved in terms of client selection in Card versus entering previous recessions...... Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. A Yeah. So, I mean, I'll start with Card because that's the question that you asked. But the comments that I'll make are sort of generically true across Consumer Lending which is, we did, as you say, spend the last 5 to 10 years repositioning our portfolios so that they are differently situated. A large part of that is the manifestation of our risk appetite in client selection, as you say. So, taking Card specifically, just in compare/contrast to the prior prices, yes, our average FICO score is higher and average income is higher. Our portfolio is much more spend centric. We've talked about that. It's 4.5 times sales to outstanding at this point; was less than 2 times in the previous crisis. We have an 80% reduction in balance transfer balances that were very stress volatile and are generally quite stress volatile. So, we still do balance transfers and it's an important part of our lending product suite. But it was an excessive part of the loss story in the previous crisis. And then lower high-risk and runoff balances. So, all in all, the portfolio is very, very different. I think at the beginning of the financial crisis, we had about $160 billion in loans. We have about $170 billion coming into this year. But the mix is completely different. And so when we – now, the other thing that's different is that the macro environment is different. The outlook is different. The reserving philosophy today is different. So it's very, very hard to look apples to apples at what we would be expecting. But we would expect our peak loss rates to be meaningfully lower on an apples-to-apples basis. We're expecting to see our peak losses likely in the second half of 2021, again, with all the caveats about what might transpire over the course of the winter and into the spring, both virus, stimulus and vaccine related. So, if we have 12.8% reserve coverage, lifetime reserve methodology biased to reserving with a potential downside view, and so it's in our reserves right now also. So, it is not possible to give you an equivalent number because everything has changed...... Erika Najarian Analyst, BofA Securities, Inc. Q Right...... Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. A But lower because the portfolio is materially higher quality...... Erika Najarian Analyst, BofA Securities, Inc. Q Got it...... Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. A

And the same is – by the way, the same is true in Home Lending......

Erika Najarian Analyst, BofA Securities, Inc. Q Yes...... Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. A The average – the portfolio LTV is 30 percentage points better. Home equity is a much smaller percentage. Service portfolio, Ginnie Mae loans are a much smaller percentage. The same is true in auto, subprime layered risk. The same is true across the board...... Erika Najarian Analyst, BofA Securities, Inc. Q Got it. You’ve remained the number one card issuer in both spend and outstandings. And obviously, that you have a large target on your back in terms of competitors. How do you see the pace of investments evolving over the future, balancing obviously a lot of investors are expecting the rate environments will remain difficult for banks? ...... Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. A Yeah. So, it's a bit like the conversation about deposit growth leading the industry consistently because of our focus on primary bank relationships. And the same is true if you took at Card, it's a decade of investments in new products, product refreshes, rational value for customers, innovation, digital capabilities. The cross Chase ecosystem investments we've been making, that's what gave us our number one market share in sales and outstandings. It's given us the scale we have and the industry-leading efficiency ratio that we have. And so, as a sort of general matter, we see the investment opportunity to continue to drive profitable growth going forward to be pretty consistent with the past. And this is a business that can go stale very quickly. People's, customer preferences, like this is a moment in time that highlights that, that customers' utilization of cards and their perception of the importance of different parts of the value chain can change over time, do change over time. And you need to refresh your products. You need to innovate to be able to keep pace with that. And so, having a compelling set of products across continuum, having those make sense and choices for everyone, including some of the best co-brand partners that are out there. That is because we've been investing. So, I would say we would continue to invest with a similar philosophy. This is a growing profitable business through time, and so that's the lens that we'll invest through...... Erika Najarian Analyst, BofA Securities, Inc. Q And a related question but maybe more specifically worded, this is one that we've been getting a lot from investors. Clearly, you have best-in- class in terms of your rewards offering with the Ultimate Rewards and, of course, Chase Sapphire Reserve rewards are well known and well loved. But if we're in an environment where the recovery is slow, when the recovery and spend is also slow, are you willing to sacrifice medium-term ROA in a slow recovery to continue to offer best-in-class rewards? ...... Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. A Yeah. So, I mean, the really, really big answer to the question, well, hopefully, many people are carrying our cards in their wallets and are already aware of the ways in which that we have changed our value propositions on our whole complex of cards, investing in meeting our customers where they're spending today everyday categories. So, with new categories accelerated for groceries and home improvement and gas and streaming services, also accelerated redemption categories for, you talked about Sapphire in similar categories, innovations in terms of Pay Yourself Back. So, hopefully, those of you who are either carrying our cards or paying attention to the blogosphere will note that we have already done that. We've invested heavily in doing that as have our co-brand partners because we are building this business for the long term, and the customers that we have, we want to have for decades. We do not want to lose them and need to reapply them in the future. We want for people carrying our Chase-branded or co-branded cards for them to feel like the card has great utility and great value. And so, notwithstanding this morning's news, this is a situation that's likely to transcend through 2021 at some level, and we intend to make sure that we are putting great value in the pockets of our customers, and that is an investment that we're willing to make.

And so, because we've been doing it since the beginning of the pandemic, a lot of that incremental investment, you would say, is in our run rate. We will continue doing that as necessary through 2021. Clearly, we get the benefit of lower redemption in other categories, so there are offsets. But we'll continue to do that. And we want our customers to stay with us, and retention is looking really good...... Erika Najarian Analyst, BofA Securities, Inc. Q That's great. Over the last two years, JPMorgan has launched a new card product every two months. Which products have been the most successful and the least successful as it relates to your customer acquisition strategy? And are there trends among spending habits in terms of related to these different card launches that are beginning to take shape that you're willing to share with us? ...... Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. A Yeah. So, the first thing that I can't do is call one of my children more beautiful than the other. Again, so, I'm not going to call out any one card as having been more or less successful. They're all relative to their own business case and, like, targeted towards a customer segment that would find them very valuable. I would say that generically and generally across the complex, as we've been launching and refreshing cards, they've generally performed in line with or better than our model expectations. So, in that sense, they've all done quite well. You talked about the 15 that we refreshed or launched in 2018/2019. We've actually done five so far this year, and we have a pipeline of new news coming in the product space throughout 2021 throughout the product range. You will have seen that we refreshed Freedom Unlimited and launched a new Freedom Flex card in September. So, even the really sort of bread and butter mainstay product suite that we have requires refreshing periodically. And so, we're super excited about that, and that's been really well received. But we also have issued three new cards in the low-frequency traveler space across our co-brand space this year, so more to come in 2021. Trends that we're seeing in spend, we're seeing a blurring, as I said, which is natural right now between T&E and cashback cards because everybody is spending in the same sorts of categories. And so we're seeing, our cashback complex add some travel-related benefits. We're certainly seeing our T&E cards add everyday spend categories. And so, not only do I see that surviving in 2021, but I think that kind of blurring, that people want to see a broad range of utility in their card, that might be something that persists a little longer. So, we're obviously focused on that. And then we are seeing, although spend trends, you're all familiar with, so still down year-over-year, recovered quite nicely; debit's a bit higher because of the mix of spend and all of that; certain categories still somewhat challenged, airlines, hotels, in-restaurant dining, it is true that millennials and Gen Z, customers are spending more strongly. We did see them transition more what was traditionally in-person spend to online spend more strongly. So they're up year-on-year. And the baby boomers were all down year-on-year. So there's a little bit of separation, but the trends are generally consistent with everything you've heard to date which is we're on a steady upward trend of spend. And as I've said earlier, I think, spend is a barometer of the health of customer and the health of the economy. We're not seeing any sort of decisive softening there despite the fact that we're seeing a rise in cases pretty broadly across the country...... Erika Najarian Analyst, BofA Securities, Inc. Q That's great. And maybe I could just – before moving on to Home Lending, tell us a little bit more about My Chase Loan and My Chase Plan, and any early successes and learnings from there...... Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. A Yeah. So, I mean, innovation is a large part of how we make sure that we keep giving our customers choices about how to use their cards in ways that they've expressed in terms of their preferences. And we saw the sort of point of sale, installment lending, buy-now-pay-later trend is something that our customers want. And so, we're working on that. My Chase Plan and My Chase Loan are still quite new. My Chase Loan was live at the end of last year, and My Chase Plan has only gone nationally available in recent weeks. And so, I would say scaling up nicely. Customer feedback is very good. It's early, so we're still in learning mode. And the job now in 2021 is to scale up the offerings across channels and continue to integrate those services at the point of sale with our online and co-brand partners. And so, it's really exciting and very well received but small and new, and so we're excited, but it's not a big driver of outcomes for us financially at this point. There's good incrementality in it, though. A lot of people ask about cannibalization and, of course, you have to be willing to cannibalize yourself. And if you provide these options, and does it come at the cost of some of your revolve? Possibly. But we're also seeing decent incrementality from customers who want this capability who otherwise were either not revolving or revolving less......

Erika Najarian Analyst, BofA Securities, Inc. Q Got it. Switching topics to Home Lending, I'm going to have to look at this quote. In 2019, Jamie said something along the lines of he thinks mortgage is an important product but very complicated in terms of operations. Looking at every aspect of mortgage and trying to find the right balance of solution to help improve returns and customer experience. You yourself, Marianne, noted recently that Chase's home lending relationships are even deeper versus other customer products. So, how have you struck the balance between efficiency and taking advantage of those deeper relationships? ...... Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. A Yeah. So, look, the Home Lending business is a business that there's, like, pretty deep inspection on a pretty regular basis. And there's no question that the last decade has been a quite challenging decade for home lending for the industry, and we're not an exception. I would say that a lot of that is in the rearview mirror. And so, I feel like we're more on the offensive than the defensive. We have a great strategy. We have really good momentum. And a reminder of our strategy is that we want to win with Chase customers. We want to do more business with our core customers, our core banking customers, our existing Home Lending customers, that is where we have key differentiated capabilities in the form of data and distribution that we can bring to bear for those customers, and it's a sort of self-fulfilling ecosystem. So, that is a core part of our strategy. It is also the case that the production side of the shop will always have volatility. We are experiencing the good side of the volatility coin right now, obviously. But we're very focused on making our originations and production side of the business more efficient and more scalable. So, if you look at field sales, we've reduced the head count by 30% over the last few years, and they're more productive today than they've been in an incredibly long time. And granted it's a good market but it's also because of the sales coverage models and the tools that we've been providing. The next part, we've talked a lot about, we can talk more about it if you want, but all things digital. So, this is a business that was ripe for automation and digitization and data, leveraging data through machine learning. We started on that journey a few years ago. As I said, we've seen the acceleration of those trends. It will be transformational not only in terms of the efficiency for the business, clearly, in reducing the cost, not only to originate loans but to service them, but also in the customer experience. And so, for customers that deal with us digitally, we see faster cycle times, higher customer satisfaction. We see lower touch points, which is a good thing, meaning we have to ask for things less often; we have to touch them less frequently. So really, it's a win-win in that sense. The final piece, which goes without saying because of where we are right now, is we've been de-risking our servicing business and our portfolio, we talked about that. And we will continue to pay attention to the mix of our servicing business, which I think is going to serve us very well as we go forward through 2021 and 2022 as the aftermath of this pandemic comes to a head...... Erika Najarian Analyst, BofA Securities, Inc. Q Got it. Before I ask this final question, I do want to remind investors that we are leaving time for your questions. There's many, many of you in the virtual room. So as a reminder, if you have any questions for Marianne, please, now would be a good time to submit it through the webcast portal. Marianne, last one for you. Have you seen any discernible changes in terms of trends in home purchases? And specifically, are millennials finally becoming a larger part of purchase activity? And if so, is this finally the beginning of a trend of more significant homeownership rates for the younger generation? ...... Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. A Yes. So, if you look at the purchase market in 2020, I think it's estimated to be about $1.3 trillion in a market that was overall more than $3 trillion big. And so, just to put that into context, in terms of the purchase market, that would be similar in size to the housing boom back in 2005 and 2006. And so, while interest rates being low is clearly fueling a lot of refinance activity, and no doubt that's true, it's also true that there is a healthy purchase market right now. And it's a combination not only of lower rates but also of a generally sort of solid economy. Homeownership rates are overall up, so up 4% year-on-year, up notably since the beginning of the year. So, it is a thing that has continued, if not arguably accelerated, in the pandemic, and so 4 percentage points in total. It's true that if you look at the younger cohort of customers, so think 35- to 44-year-old customers that it's notably even stronger instead of 4%, 5%. So, not double, not sort of multiples of, but definitely some strength there. And I think that if you also look at the other sort of watch item trend that is maybe true, and we'll watch it, is that we are seeing that that younger cohort of customers is possibly the customer that is looking to migrate away from the more dense urban centers to arguably less dense centers, particularly we're seeing that in Manhattan. I suspect we will see more of that. It's a bit of a watch item rather than a reality yet, but that's also something being led by that sort of younger cohort of customers. So, I think it's a little early to really see separation, but I do think it's notable.

...... Erika Najarian Analyst, BofA Securities, Inc. Q Great. And with that, I'm going to take our first question from the audience. Marianne, when does JPMorgan decide to really reopen the origination engine on the Card side? Are there signs that you're watching for? ...... Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. A Yeah. So I think – I mean, we're watching everything like a hawk as you can imagine. Look, given the nature of this pandemic, given that we saw such a dramatic change in the economic environment, such volatility in the outlook, and also the impact it had on people's lives, the ability for people to go to work, the ability for us to be in contact with our customers, what we did at the very beginning was take action quickly in response to a dramatically deteriorating and incredibly volatile environment. What we have been able to do since then is a couple of things. One is we've proven that we're able to operate safely in this environment with our folks working at home. We've been able to show that we're capable of meeting our customers' needs and being able to do that in a safe and sound way. And secondly, we've been able to get much more surgical. So even within our risk appetite, we've introduced new data sets, new models that have allowed us to swap in a lot of customers that might have otherwise been swapped out during the initial risk strategies because we've just got much more surgical and segmented about how we're doing it. And in the case of Home Lending in particular, we've walked back some of our constraints in a reflection of the fact that we've seen home prices continue to improve. So, the launch point is improving. The peak-to-trough expectations are improving. So, we have loosened some of our criteria there. That said, it is obviously the case as we sit here right now that there's still an enormous amount of uncertainty in the environment. And so, we're still watching very, very carefully. We do expect to get through the winter to continue to see above-pace, above-trend growth next year. We do expect a second round of stimulus. And if all those things happen and the economy continues to steadily recover, then you should see us responding kind in the early part of next year. But we don't have a perfect crystal ball. We're responding to the data as we see it. We do see some of it real time, and there's a significant amount of uncertainty still. So, we're balancing those things, obviously...... Erika Najarian Analyst, BofA Securities, Inc. Q Thank you. Here's another question that was also posed to Brian Moynihan earlier. How do you think about the threat of neobanks to consumer business, whether it's with lending or deposit taking? You mentioned buy now, pay later. How much of a threat do you think institutions like Afterpay would be to the card businesses for banks? ...... Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. A So, whether it's neobanks or fintechs or new entrants or even somewhat scaled but smaller competitors, we have something to learn from everyone. What those folks have done incredibly well is identify points of pain for customers and resolve them. And so, we are learning from all of that. I would say that we can partner with those folks, and we can compete effectively. We have a lot of assets and capabilities that none of those competitors have in terms of scale and distribution, the customer base we already have, the ability that we have to continue to invest through cycles, all of those things are the data assets that we already have. So, I like our hand, but we can't be complacent. And it's up to us to continue to make sure that we're showing our customers that we have the right products, that we're adding the right value, that we are resolving those customer points of pain just as effectively. We can innovate just as effectively, and we can partner, too. So, many of those folks that you talked about and many of the people that you're thinking about, they're also partners of ours. And so as they grow, we grow. And so, we compete and we'll, I think, do quite well. But we can partner, too, and we're doing that...... Erika Najarian Analyst, BofA Securities, Inc. Q And I think we have time for one more question. This is a – I'm anticipating a non-answer. But the question is, with a new administration coming, how do you expect the CFPB to change and how do you think about running your business in that context? ...... Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. A

Yeah. So, your prediction, like, will be quite valid. At the end of the day, when we think about running our business, we think about it transcending any moment in time, be it a moment in the economic cycle or be it a moment in the political cycle under whatever the administration is. So, I would say that we're going to continue running the company for the long term, and that's regardless of the outcome of this particular election. That said, the core mandate of the CFPB in terms of customer protection is one that we hold in high esteem. We know that it is the price of admission for our business to meet our regulators' expectations of us both qualitatively and quantitatively, and that won't change. And so, we're just going to continue to treat our customers well, do the right thing, be aware of what regulators' high expectations, as they should be, are of us and meet those through time. So, we'll see it evolve as you will see it evolve, and we'll adapt accordingly. And their core mandate, we share that vision...... Erika Najarian Analyst, BofA Securities, Inc. Q Great. And any final thoughts in terms of how would investors should most look forward to from the Consumer Lending business at JPMorgan, as we think about 2021 and, of course, the earnings recovery at banks in general? ...... Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. A Yeah. So, as I said, put aside the question marks about what's going to happen over the course of the next three to six months, but my personal point of view about the potential and the future for the Consumer Lending businesses remains just as bright as it was back in 2019. Obviously, the environment is super constructive for mortgage. It's also actually very constructive in the Auto space, and we're gaining a lot of share there. Clearly, it's a little bit differently situated, as you said, in the unsecured lending, in the Card space. But even there in the fourth quarter with the launch of new products and offers in the market and exciting new news that we do expect to return to growth in 2021, so super excited about the opportunity. And these are vibrant and profitable businesses. And so, we're just going to continue to invest and add new experiences and value for our customers. And that will show through in our growth and earnings potential. And that's true for the company as a whole. Yes, of course, we are not immune to the cycle, and we will have credit losses and the interest rate environment will be what it will be. But we will continue to focus on growing the underlying drivers that is like quality growth of the business for the long term...... Erika Najarian Analyst, BofA Securities, Inc. Q Marianne, I can't think of a better way to conclude this conversation. Thank you so much for joining us this morning...... Marianne Lake Chief Executive Officer of Consumer Lending, JPMorgan Chase & Co. A Thank you so much for having me...... Erika Najarian Analyst, BofA Securities, Inc. Q All right. Thanks, everybody.

Disclaimer This presentation contains forward-looking statements 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 & Co.’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Factors that could cause JPMorgan Chase & Co.’s actual results to differ materially from those described in the forward-looking statements can be found in JPMorgan Chase & Co.’s Annual Report on Form 10-K for the year ended December 31, 2019, which has been filed with the Securities and Exchange Commission and is available on JPMorgan Chase & Co.’s website (https://jpmorganchaseco.gcs-web.com/financial- information/sec-filings), and on the Securities and Exchange Commission’s website (www.sec.gov). JPMorgan Chase & Co. does not undertake to update any forward-looking statements.