Good morning. Earnings season is underway. JPMorgan Chase reported fourth-quarter 2025 earnings on Tuesday, with investors looking past solid headline results to focus on higher expected costs and a one-time reserve tied to the Apple Card deal, sending shares modestly lower.
The bank posted net income of $13 billion, down 7% from a year earlier due to a $2.2 billion pre-tax credit reserve build related to its pending acquisition of the Apple Card portfolio from Goldman Sachs. Revenue rose 7% to $46.8 billion, while net interest income climbed 7% to $25.1 billion, driven by higher revolving credit card balances and improved deposit margins.
Morningstar Director Sean Dunlop wrote in a note on Tuesday that as the first bank to report results and the largest bank in the U.S., JPMorgan’s earnings serve as “a barometer of consumer, corporate, and financial system health.” He added that JPMorgan’s “broad-based revenue growth suggests all three remain in good shape, though management’s tone and excess reserves point to a cautious outlook beyond 2026.” Dunlop raised his fair value estimate for JPM shares to $289 from $259, while still viewing the stock as expensive.
CFO Jeremy Barnum said on the earnings call that consumers and small businesses remain resilient. JPMorgan projected 2026 expenses of about $105 billion, with Barnum describing the increase as a function of structural optimism and the need to invest to stay ahead. “More generally, the environment is only getting more competitive, and so it remains critical to ensure that we are making the necessary investments to secure our position against both traditional and non-traditional competitors,” he explained.
During the Q&A session, CEO Jamie Dimon said higher spending, including on technology and AI, is necessary to compete with fintechs such as Revolut and SoFi, as well as established financial firms like Charles Schwab.
“These are good players,” Dimon said to analysts on the call. “We analyze what they do and how they do it… We are going to stay out front — so help us God. We’re not going to try to meet some expense target and then 10 years from now you’d be asking us the question, ‘How did JPMorgan get left behind?’”
Barnum also warned that President Donald Trump’s proposal to cap credit card interest rates at 10% would likely reduce access to credit rather than help consumers, arguing that intense competition already compresses margins and that price controls would force broad lending cutbacks — especially for higher-risk borrowers.
Sheryl Estrada
sheryl.estrada@fortune.com
