JPMorgan at The BancAnalysts Conference: Strategic Moves and Market Insights

On Thursday, 06 November 2025, JPMorgan Chase & Co (NYSE:JPM) participated in The BancAnalysts Association of Boston Conference. The company provided a strategic overview that highlighted both positive developments and areas of concern. While consumer health remains robust, challenges in deposit growth were noted, attributed to macroeconomic trends rather than competitive pressures.

Key Takeaways

• JPMorgan’s CFO reported strong consumer health and resilience, with no significant deterioration in financial positions.
• The company revised its net charge-off guidance for its card portfolio from 3.6% to 3.3% due to improved early delinquency performance.
• Deposit growth is expected to improve as macro trends like cash sorting moderate.
• Significant investment in AI is driving operational efficiencies and enhancing customer experience.
• The Sapphire Reserve card refresh led to a threefold increase in acquisition rates.

Financial Results

• Net Charge-Off Guidance:

- Initial guidance for the card portfolio was 3.6%, now revised to the 3.3% range.

• Card Loan Growth:

- Third-quarter loan growth was 8%, with a yearly expectation of 8% to over 8%.

• Deposit Growth:

- 10 million net new checking accounts were opened over the past five years, with annual growth of 1.5 million to 2 million new accounts.

• Expense Management:

- CCB headcount remains steady at 150,000 employees.

• Branch Expansion:

- Over 5,000 branches, with a slight increase anticipated.

Operational Updates

• Card Business:

- Over 10 million new accounts added in the past four years, with a successful refresh of the Sapphire Reserve card.

• Auto Business:

- Strong loan and lease originations with improving credit performance.

• Branch Expansion:

- Focus on the top 125 markets, entering over 75 new markets.

• AI Deployment:

- Efficiency gains in servicing, with agent productivity doubling this year.

Future Outlook

• Card Loan Growth:

- Growth is expected to decelerate slightly as revolved normalization diminishes.

• Deposit Growth:

- Anticipated improvement as macro trends stabilize, aiming for a 15% market share.

• Expense Management:

- Continued focus on operational efficiencies and controlled expense growth.

• Branch Expansion:

- Ongoing strategy to expand in 45 markets, aiming for a 10%-12% branch share.

Q&A Highlights

• Deposit Growth Concerns:

- Slow growth attributed to macro trends rather than local competition.

- Exploring the impact of the wealth management strategy on deposit growth.

• Competition:

- Local competition is not a dominant factor; macro trends and customer behaviors are more influential.

Readers are encouraged to refer to the full transcript for a detailed understanding.

Full transcript - The BancAnalysts Association of Boston Conference:

Unidentified speaker, Interviewer, JPMorgan: We’re going to get started here. Up next, we have JPMorgan. Joining me on the stage is Bory Cox. Bory is a 14-year veteran of JPMorgan, 10 years as a CFO in various businesses, and has been the CFO for the CCB for almost four years, I guess, and a CFO under both Mary Anne and Jen. That’s like ninja school, I would imagine, for CFOs. Welcome, Bory, and thank you for being here.

Bory Cox, CFO, CCB: Thank you for having me. Yes, I kind of call it finishing school, but yes.

Unidentified speaker, Interviewer, JPMorgan: OK, finishing school. All right, so let’s get started. Maybe we’ll jump in with a little conversation about the consumer and their health. They seem to be in good shape despite some softening signs in the labor markets. We got a data point on that today. Can you talk about what you’re seeing in your business and perhaps stratify your comments by income segments, if that’s relevant, or how you might think about it?

Bory Cox, CFO, CCB: Sure. Thank you. Yes, of course, given our data, we spend a lot of time really sort of disaggregating what do we see in consumer health based on our credit and debit spend data, in particular deposits data, and obviously across the credit portfolios that we have in CCB. I would say, as we’ve commented throughout the year, consumers remain generally healthy and resilient, and we do not yet see any material deterioration in their position, whether you’re looking at sort of cash buffers as a key metric we’re looking at, or whether you’re looking at delinquency trends, et cetera, and certainly spend. In fact, when we are looking at spend trends, after a relatively softer, although still pretty solid second quarter, we’ve seen strengthening both in confidence, and that reflected in a little bit of strengthening in spend into the third quarter. That does continue.

We’re still early into the fourth quarter, but we continue to see those trends in the fourth quarter as well. When you unpack that, it’s really also in discretionary categories, whether it’s retail or travel and dining. Absent a bigger shock in the labor market, which of course is the key to consumer health in our businesses, as of right now, we don’t yet see any material deterioration. In fact, they continue to remain very resilient. When you unpack it by income bands, and we look at it across four different income categories, the trends are actually quite similar. We’ve looked, but there is no material divergence. There really isn’t any divergence in the trends, whether you’re looking at the level of cash buffers that each income category has. It’s stable. It’s about back to pre-pandemic levels. It’s slightly still a little better.

If you’re looking at delinquency trends, same story. They’re actually slightly lower this year than last year. As hard as we look as of right now, again, absent any deterioration, we do look at payroll disruptions and how those are trending both in our small business population as well as by income segment. Again, they continue to remain quite steady. Continue to look for it, but it’s a resilient consumer as of right now.

Unidentified speaker, Interviewer, JPMorgan: You recently lowered on the 3Q call the net charge-off guidance in the card business for the year. Could you maybe unpack your drivers for that improvement? Could we get you to comment on what that might mean for 2026?

Bory Cox, CFO, CCB: Yeah, so let me just take a step back for those of you who may be a little less familiar or deep into our metrics. On our credit card portfolio, the guidance we had given through Investor Day and then second quarter was a 3.6% net charge-off rate for our card portfolio. At Investor Day, it was not so much a one single point projection, but more a range of sensitivities and scenarios for next year’s charge-offs. We had presented that under various scenarios, soft landing, mild recession, in the 3.6%-3.9% range. In terms of our current year and performance in the current year, we lowered our guidance from 3.6% to the 3.3% range on the third quarter earnings call. As Jeremy mentioned, there were really a few factors behind that. There were some early signs, I would say, in the second quarter that.

Very early delinquencies and roll rates from current to second bucket were starting to trend better than our original forecast models. However, there was a lot of uncertainty at the time. We were looking at various scenarios of unemployment rate rising somewhere to the 4.5%-4.7% range, depending on the rate at which you get there. Obviously, many of my peers also in the industry have talked about this concept of delayed charge-offs. When you were looking at the more recent vintages that were originated post-pandemic, they were not quite getting to the same expected vintage losses that our prior vintages had gotten to. There was a little bit of uncertainty of when that catch-up would happen. That was a big source of uncertainty in terms of how we thought about our charge-off forecast for the rest of the year.

As the year continued to progress, our early delinquency performance continued to be stronger. Our recoveries continued to be stronger. As we sit right now, that 3.3% feels pretty much where we will land. Some of those drivers, of course, when we think about the next year, may continue to play out. If we were to reforecast those scenarios that we had at Investor Day, you would potentially expect that a similar trend will ultimately lead to slightly lower guidance for next year. We are working through that. We are working through the budget process. We will have an official guidance for next year soon. I do expect that as we are working through the budget to come down slightly from there. Again, all of it very much dependent on what you believe the unemployment rate to trend at next year.

As you know, our economists have revised their forecast down a little bit. We are right now looking at a 4.5% peak unemployment in the second quarter. It really depends on what you believe about where that peaks.

Unidentified speaker, Interviewer, JPMorgan: Great. Maybe we could map that conversation into the auto business. There have been, we’ve seen some uptick in subprime auto delinquencies. Could you maybe talk a little bit about what you’re seeing in your business? What read do you get from that, if at all?

Bory Cox, CFO, CCB: Sure. First of all, just on auto more broadly. The business is doing really well this year. We have had very strong originations, both on the loan and lease side of the business. When we look at the credit performance, as you probably have followed, our early delinquency as well as charge-off rate is improving in that business and continues to very much remain within our risk appetite. We are not a big player in subprime. I know Mike was up here earlier as well. True subprime under 620 accounts for a very, very small portion of our originations. As we disclose sort of subprime and near prime, under 660 is in the mid-single digits, 4%-5% or so of our originations and portfolio. We are not kind of the utmost early sign of credit stress in the auto business.

More specifically, when we looked at our charge-offs and our performance. Earlier 2022, 2023 vintages, those are the ones that we did have slightly elevated charge-offs. As many players in the industry, it was a very unique point and a very different circumstance in the auto business, just given very elevated used car prices. We did have a couple of vintages with slightly elevated credit losses. We adjusted to those very fast, in fact, much faster than many others in the industry. We very much see those vintages going through and coming down. Outside of that, early delinquencies look very much as expected.

Unidentified speaker, Interviewer, JPMorgan: Great. OK, let’s talk about deposits in the banking and wealth management sort of area. I think that we’re expecting that those might inflect, but that would be later than what was the original expectation. Looking back to the Investor Day, kind of what’s going on there, what are some of the drivers of maybe what was putting that growth on pause and why that might be less so the case?

Bory Cox, CFO, CCB: Sure.

Unidentified speaker, Interviewer, JPMorgan: Of maybe what was putting that growth on pause and why that might be less so the case?

Bory Cox, CFO, CCB: Sure. Many of you probably were at our Investor Day. There is a famous, very much often quoted chart that we had in our Investor Day presentation that Mary Anne walked through, various scenarios for our deposit growth. In terms of what goes into those deposit forecasts, as those of you who may have worked on deposit models over your careers, they are complex. They are very much macroeconomic-driven models. Some of the most challenging things to forecast with your macro-driven models is the actual inflection point. In terms of what goes into those models and how we think about forecasting them, obviously, new account production is a big input in that from our end. The main drivers are really the interest rate environment, short end, long end, national income, nominal income, as well as the personal savings rate.

As we were looking to forecast under various different scenarios, our models were suggesting that that inflection point would be happening in the second half of this year. Partly driven by a slight increase in the personal savings rate, partly driven by rate cuts. The rate cuts are happening slightly delayed relative to what we were projecting at the time. That clearly pushes it out a little bit. On the personal savings rate, debatable whether it is higher or lower than what we were expecting, but certainly in the models themselves, they were projecting to inflect at this time. As I just mentioned, consumers remain financially healthy. Spend continues to be quite resilient. The stock market, which is not currently a direct input into our deposit models, has performed extraordinarily strongly.

There is definitely a little bit of sort of yield-seeking and cash sorting activity that our models are probably not picking up at this moment in time. All of that said, when we take a step back in terms of what is happening, we continue to remain very confident that what determines long-term deposit growth, all of those underlying drivers continue to remain very strong in our business. We continue to see very strong customer growth, checking account growth across both consumer and small business. The two of them, as we have talked about, we have had net 10 million new checking accounts across consumer and small business over the last five years, pretty steadily anywhere between 1.5 million-2 million every year.

That’s really solid underlying customer growth, which we see very clearly when we look at our checking balances and how those are already growing at a very steady clip in the sort of low to mid-single digit range. The checking account balance growth is very much what’s underlying our long-term projections. Where we are waiting for that inflection point is sort of the higher-end, more affluent customers saving CD balances and how those are stabilizing and eventually expected to grow. May have missed that by a couple of quarters. In terms of all of the underlying drivers and what we are expecting to play through, we continue to remain confident that that will start to come through in our deposit growth. Certainly in terms of predicting the exact quarter has been a bit of a challenge across the industry.

Unidentified speaker, Interviewer, JPMorgan: I certainly sympathize with that. Now, that slight delay, does that change in any way your aspirations or your confidence in being able to hit the 15% market share? Or is it just a timing thing?

Bory Cox, CFO, CCB: As Jeremy has said, the short answer is no, it does not change anything. I can give you the long answer. In terms of the 15% ambition, no, it does not really change anything about that. The reason for that is what I just mentioned, that at the end of the day, long-term, deposit growth through a full interest rate cycle, we feel very confident that we have all of those underlying drivers, including growth in very strong primary customer relationships. That underlying strong growth in customer relationships, we see it currently and consistently outpacing national growth in the customer in the population. We are gaining share in terms of share of primary banking customers. That will, over the longer rate cycle, carry through. It might change the timing. We have never put a specific timing on that 15%.

As a reminder, when you look at the 15% and how you would unpack the 15% deposit share, we have put up a chart at Investor Day that really breaks it down between the various markets. We truly do believe that deposits is very much a local business. You very much have to win that share at the local market level. When we think about how that 15% will build up over time, we have a full almost 40% of the deposit market where we still have less than 5% branch share. Not only do we have less than 5% branch share, we have built that branch share in the last five years. We have less than 1% deposit share in those markets. When you build that out over time, that is going to be a pretty significant tailwind. It is a tailwind that.

Is not for the faint of heart. It is for long-term investors with the fortitude to build out a network in 45 markets, one branch at a time, building up to 10% branch share in all of those markets, which, when you unpack sort of how that deposit share gain, or in this current year, a little bit of a setback, is evolving, we see it at the market level where even though nationally we’ve lost a slight bit of market share, in those markets where we have been building, we’ve actually added 20 basis points or so of deposit market share. That’s kind of what gives us the strength of conviction that we have plenty of room to grow in all of the markets where we are not yet at 15%. Those are really large, significant markets where our strategy is working.

Of course, right now, because in some of the very large, more than 15% markets, we are still going through this inflection point in deposits, you’re not yet seeing that carry through.

Unidentified speaker, Interviewer, JPMorgan: Great. Thank you. That was great. Deposits are obviously a core part of what drives the awesome economics of the business. Another driver of that is on the other side of the balance sheet, card loans, where you had 8% growth, I think, in the third quarter. Can you maybe give some color there on your expectations for growth going forward and perhaps other loan categories?

Bory Cox, CFO, CCB: Sure. Sure. Let me start with card. It’s definitely been a key driver of our loan growth over the last few years. Yes, the third quarter loan growth rate was 8%, down slightly from earlier in the year where it was 10%. We think we’ll probably average out for the year in that 8%-8% plus range. I think at Investor Day we had guided to about 9%. It’s very much in line, if maybe slightly lower than the Investor Day guidance. The key driver of loan growth there is our very strong card acquisition. We have consistently added over 10 million accounts for the last four years. We are still on track to add over 10 million new accounts this year. That consistent vintage acquisition over the last few years is really layering up nicely to that growth.

In terms of why growth is decelerating, and we’ve talked about this quite a bit, coming out of the pandemic. We had a real tailwind from revolved normalization. That revolved normalization had contributed to double-digit growth earlier over the last few quarters. That has now pretty much carried through and is largely behind us. As we look at customer behaviors, the payment rate has been pretty stable. At this point, we no longer expect revolved growth normalization being a significant tailwind. That is just driving sort of why we’re looking at 8%. Underneath all of that, of course, from a new account acquisition, et cetera, we have an amazing marketing machine that really contributes to that and a diversified card product portfolio, which we continue to refresh, as many of you are well aware. With that continuous refreshing, whether it’s across our rewards portfolios, our.

Cashback portfolios, and co-brand portfolios, we continue to see really strong momentum in our new account acquisition that we think will continue to be a tailwind for next year. I am not going to give you a specific loan forecast for next year. I think we will wait with that. In terms of all of the underlying trends, you would expect relatively similar to slightly decelerating growth, just depending on what we see from revolved normalization and new account acquisition.

Unidentified speaker, Interviewer, JPMorgan: Got it.

Bory Cox, CFO, CCB: In terms of other, you’ve asked about other categories. On the other loan portfolios, I would say, just touching on auto, I already mentioned that auto originations have been strong this year. That’s a business where we definitely had a liquidity optimization, balance sheet optimization strategy. We expect that portfolio to begin growing going forward as we continue to see pretty healthy originations in that business. In terms of mortgages and home lending, no secret that has been a headwind to our loan growth as we continue to see paydowns on our portfolios, including in the acquired First Republic portfolio. Even though we have a very strong jumbo origination business, the market has been quite attractive in terms of jumbo securitizations. We have been adding less of those jumbo originations to our balance sheet.

As a result, we expect to continue to see slow declines in our home lending portfolios. We do have other small portfolios in business banking as well as in wealth management. In terms of the main drivers, will continue to be card by and large, and then auto behind it. In wealth management, while a relatively small portfolio, as that business continues to grow, securities-based lending continues to be a pretty attractive proposition for customers.

Unidentified speaker, Interviewer, JPMorgan: Great. On the card side of things, I’m going to set a placeholder. I’m going to circle back on that and talk about the refresh, and the competitive dynamics and so forth. That is later in the show. I’d like to swing to expenses. I think coming out of Investor Day, the expense trajectory was going to be moderating as we went through this year. A lot of that was driven by the technology spend, kind of moderating as well, which was a really big factor in the period where expenses were growing higher. You were doing a lot of investing. Can you talk about the ability to continue to bend the cost curve going forward? How should we think about what is driving expense growth as we move forward from here?

Bory Cox, CFO, CCB: Absolutely. Yes. Obviously, in the middle of budget season, this is a great topic. In terms of expense growth and how we are, let me just start with how we’re performing this year. The guidance we gave at Investor Day, happy to report we’re actually going to come in within that. As we continue to look for optimizing efficiencies and continue to be very mindful of the direction we have given of living within our means. Just by way of reference, CCB, we have 150,000, call it, employees in the business. That number has been flat this year. Within that, of course, we have areas where we are very much growing and areas where we continue to find efficiency. While we are flat headcount, we continue to invest pretty significantly in all of our front office roles.

Whether it’s all of the bankers in the 160 new branches that we are building this year, adding there all of the business bankers, advisors, relationship managers. The front office and sort of coverage bankers are definitely increasing across the business. Offsetting that is we continue to have pretty significant efficiencies in operations. As we highlighted at Investor Day, and that’s really due to two things. It’s good old-fashioned expense management and efficiencies, but also early results of efficiencies from all of our AI efforts and AI implementations in operations. We are seeing pretty good offsets there. In terms of just bigger picture, I’ll switch to product and technology, which, as you mentioned, had been a big driver of our expense growth. We had doubled our investment capacity there over the last five years.

We, as we said, finally feel like we’re about right-sized in that capacity relative to the overall size of the business. This year, we’re flat-ish. We continue to look to bend the curve there. What we are very encouraged by in that area is, since we have grown very fast, we think we have a lot of embedded productivity gains that we are working hard to unlock in our product and tech space. Again, very focused on using all of the latest AI innovation to unlock some of that capacity in addition to really focusing on improving our operating model and making sure that we are as streamlined as possible in terms of moving with speed, which is really our main focus on product and tech this year. There will be areas where our expense growth may or may not be moderating going forward.

One of them I’ll just set aside, it’s kind of accounting treatment for auto leases that will not be moderating because we have had pretty good healthy growth in auto leases. From an expense growth perspective, we always kind of call that out separately because there is the corresponding gross up on revenues in the same period. When it comes to field and marketing, those are really the two other really big components of our expense base. As I just mentioned, when it comes to the field, we continue to invest. When we look ahead, there are both sort of headwinds and tailwinds on that one. In terms of headwinds, from our perspective, long-term, it’s a tailwind. In terms of the field, we have crossed the point of decreasing our branch count.

For those of you paying attention, we’re over 5,000 in branch count. We are, at this moment in time, actually expecting a slight increase in our total branch count. I’m pretty sure that’s unique in the industry. While the industry is decreasing branch count to the tune of 1.5%-2% every year, we are, at this moment, growing in our branch count simply because we are no longer finding as many consolidation opportunities as we used to have. We continue on our market expansion strategy. With that, as we add branches, as we add branch count, as we continue to refresh our branch network, we definitely have some expense growth that we are planning to have there. Of course, we obsess over the payback of that. We obsess over the productivity of those bankers. Those are the metrics we demonstrate at Investor Day.

That will certainly be an area of growth. Of course, there is always marketing. Marketing, as Marianne likes to say, is generally for us more of an outcome than an input, because it really reflects the demand that our customers have for our products, particularly in the card business, which I know you want to get to, but it is highly competitive. We will continue to invest to our return hurdles, and right now, we still see plenty of opportunity where we are continuing to pursue market share there.

Unidentified speaker, Interviewer, JPMorgan: Great. Let’s just drill down a little bit on the AI point that you made. Because I would say the company has been pretty vocal about it being an important transformative technology. As you deploy it into the CCB, where should we see the evidence? Is it just an expense efficiency thing, or is there a revenue case? However you want to go with that. Just stepping back, where will we see the magic?

Bory Cox, CFO, CCB: It will be a little bit of both. In fact, what we have highlighted is going forward, you may see it more on revenues than expenses. There are certainly areas where you will see it on expenses and where you’re already seeing it on expenses. The way we think about the main application is really sort of in three areas. There’s operational efficiency. We’ve been at it for a decade through traditional AI, traditional AI models, and making our operations much more efficient, whether it’s across underwriting, whether it’s back office processing, et cetera. You will definitely continue to see it there. Of course, you’re going to see it in customer experience. That’s a major unlock that.

AI provides for us in all of the various customer journeys where we have the capability to make it much more personalized, real-time, whether it’s on service or whether it’s on marketing, and will be a huge driver of customer experience and engagement and out of that, future revenue opportunities. The third component is really around sales and marketing productivity. Things that you can unlock, whether it’s on our advisor base, whether it’s on our marketing campaigns and making them much more targeted, much more efficient. With that, the ability to capture a larger MPV. We think about it across those three domains. We’ve been at it for a good period of time. We’ve talked about it at Investor Day in terms of operational efficiency. We’ve talked about it in core operations and have made real big headways in servicing in particular.

The capabilities are really moving into some of the more back office processing capabilities as well. We’re making big headway in home lending as a lot of the document processing capabilities are coming online. Lots of opportunities there, including, for example, in travel servicing, which we have at scale now as well. What we have highlighted at Investor Day, of course, is you’ll see that productivity in truly bending the curve on expenses. We always have to remind that we are a growth business. While you see pretty significant efficiency gains, a lot of that will be offset by volume. Net-net, in many areas, we’ll probably be flat headcount instead of growing headcount to keep up with volume. That’s really where you need to unpack it. We will continue to unpack it for you in terms of where we see those efficiencies.

Unidentified speaker, Interviewer, JPMorgan: Are we seeing it now in the business, would you say? Or is this a conversation that it’s really for a year from now?

Bory Cox, CFO, CCB: Yeah, we’re absolutely already seeing it. We’re already seeing it. We’ve been very much active, especially in our operations space, where we are definitely seeing it already in our servicing capabilities, our servicing agent efficiencies, which are doubled already this year in growth rate this year relative to prior years. We’re seeing very, very strong signs already in the business. As we remind everyone, it’s still very much early innings. We just have more conviction now in how fast those capabilities are coming online, how fast we’re able to deploy them. We’ll continue to hope to beat that productivity chart that we have put out at Investor Day. We’re gaining more confidence in it.

Unidentified speaker, Interviewer, JPMorgan: I also want to swing back and drill down on the branch expansion. I have two drill-down topics now. We have got the card refresh one and the branch expansion. Maybe we will start with branches. Earlier this year, you celebrated the 1,000th new branch opening since 2018. Clearly, you have an established playbook. You are swimming against the current on this, as you pointed out. Other people are net closers. Could you walk us through how long it takes once you open a branch to hit a meaningful presence and a market share target, some of the milestones along the way, and how long it takes to reach profitability? Where is the top of the curve in terms of that?

Bory Cox, CFO, CCB: Yes. So. And just by way of background in terms of how we do it and how we think about it, I was actually a Consumer Bank CFO back in 2018 when we started on this journey, 2018, 2019. So. Many of the branches that we have opened since have gone through sort of our business casing process. I would just say we are very, very rigorous in our branch opening approach. And we have a multidisciplinary organization working on it, very, very analytical. And every single branch goes through its own individualized business case that is put together in partnership between business and finance. In terms of how we look at it by market, so obviously, we have a top-down market prioritization framework. And we have been quite broad in that, certainly the broadest in the industry in how we think about it.

We’re focused primarily on the top 125 markets. That’s where industry deposits are concentrated. Now we are present in 122 of them, which very much wasn’t the case when we started on this journey. We’ve entered well over 50, I believe, something like 75 of those markets. That may not be quite right, but in terms of the scale of new markets that we have entered, it is unmatched. It also shows that all of those separate markets, we are basically building from zero. In some of those markets, we have reached now maybe 6.5% branch share. Very few of them are actually over 5% branch share. Boston is a great example. We’re over 5% branch share. We started in Boston with our first branch in September of 2018.

We would say, based on all of our analytics, that as the market still stands, you need to be at around 10% branch share, 10%-12%, depending on which market you are looking at and the density of the particular market. Where you truly get that power score, as we call it, of your deposit share being significantly higher than your branch share. We are very much still under that curve in most places. As I just mentioned, in most of these markets that we entered, we’re somewhere between the 3%-5% branch share. And we are somewhere between half a point of deposit share to like two points of deposit share. So very much still building that momentum. That’s why when we say one, it requires a lot of fortitude. Two, you’re doing it for the long term.

It will take time to get to those power scores. When we think about how we build out the markets, right, we generally map it out from the center to all of the suburbs. We have a real network modeling strategy to ensure that we take into account commuting patterns, spending patterns, and ensuring that over time we achieve the population coverage that we’re looking for in each market, which is about 50% of population within driving time. We have been very clear that most branches break even in less than four years. That’s still very true for all of our vintages. We monitor them, and some of them come well within that. Not every branch takes four years to break even, but on average, it’s still under that, and it’s true by vintage. Of course, it depends on the rate environment.

Of course, it depends on the overall market environment. One of the fascinating things over the last couple of years is that we are outperforming on our investment balances. When we build a branch, it’s not just about modeling the deposits you’re going to get in the branch, but also the investments you’re going to get from referrals to the advisors and, of course, card business and home lending business. Right now, our branches are significantly outperforming on the investment balances that we’re generating. That’s just a reflection of the current environment that we’re in.

Unidentified speaker, Interviewer, JPMorgan: That’s great. You’re probably losing money on some of the newest ones at this point. There’s a lot that are moving through the vintage curve.

Bory Cox, CFO, CCB: They’re all still, I mean, many of them are still on their break-even path. So cumulatively, it’s definitely not a significant contributor yet.

Unidentified speaker, Interviewer, JPMorgan: Fortitude part on those, yes.

Bory Cox, CFO, CCB: Yes.

Unidentified speaker, Interviewer, JPMorgan: OK, so before we open it up, could you just give us a quick feel for how the Sapphire Reserve card refresh is going in the context of Amex? Did their refresh on their Platinum card? City came out with a Premium card. I’m a brand new Sapphire Reserve card holder with the refresh. I’m enjoying the value proposition. I also have a Platinum card from Amex. If I have to choose, I don’t know. I don’t have to choose at this point. They’re both good.

Bory Cox, CFO, CCB: Excellent. Yeah, I mean, I’ll just say, and Jeremy mentioned this on the call. Sapphire has already had its best year ever as of the end of September, so exceeding prior year full year acquisitions. I am feeling very good about it. The Sapphire refresh itself has gone very well. By just way of comparison, when we look at where our acquisition run rate was before the refresh versus right after the refresh, to give you just a sense of comparison. In the first month after the refresh, our acquisition rate jumped three times. That was a really good early sign that customers received the value proposition really well. It has since then stabilized. Obviously, there is always an early pop, but it has stabilized to a two-times run rate since then. I am feeling very good about it, continue to look at the value proposition relative to competitors, of course.

We feel that the ratio of the value we’re providing to customers versus the annual fee increase is quite significant and very competitive. We also just had the conversion of the existing population since the refresh that has happened. We are watching very, very closely any potential customer attrition and early signs are very encouraging.

Unidentified speaker, Interviewer, JPMorgan: Great. I think we probably have room for a question or so. Your first question will come from Mike Mayo.

Bory Cox, CFO, CCB: Oh, of course.

Unidentified speaker, Interviewer, JPMorgan: You don’t need a Mike. Mike, you are a Mike.

Mike Mayo, Analyst: Back on the deposit conversation in the category of what have you done for me lately?

Bory Cox, CFO, CCB: Mm-hmm.

Mike Mayo, Analyst: Deposits have not grown much. I know Dick asked you about this. I think some of the reasons you’ve given have been around for a couple of years. I mean, cash sorting, yield-seeking behavior.

Bory Cox, CFO, CCB: Yep.

Mike Mayo, Analyst: Plus, you have a lot more competition. I’m not sure what large banks are not opening branches now. How confident are you that you’re going to get that deposit inflection in a couple of quarters? Maybe it’s just competition. Maybe you don’t have it as easy going ahead.

Bory Cox, CFO, CCB: Yeah, I mean, it’s a great question, Mike. Yes, of course, those trends have been going on for a couple of years, which is why we went from deposits down year on year in mid-single digit rates to now deposits being down 1%, 0%, 0%, 0%. We’re definitely in that moment. When you look at those drivers and we monitor all of our outflows, whether it’s outflows to online banks, whether it’s outflows to other brokerage competitors that may have high-yielding offerings, et cetera, those outflows have significantly moderated. It’s a continuation of a trend. There’s definitely been a shift and an inflection point in those trends when those are much, much slower than they used to be.

When it comes to competition, honestly, those at the ground level, as I just mentioned, it is not the dominant factor because it is so small at the local level that it’s really these macro trends and customers with higher average balances where the inflection point needs to happen. That is one of the reasons we are very confident that we have seen our flows among that customer base really slow. In fact, one of our internal debates that we’re having, if you wish, is we have been extremely successful with our wealth management strategy and wealth management business, which I know we haven’t talked much about. It is growing significantly. Our flows inside of Chase have been really accelerating this year. It is possible that we ourselves have been.

so successful with our wealth strategy that it may have dampened a little bit our deposit growth. We think that’s a good thing because it is deepening wallet share with customers. It’s strengthening those relationships. I wouldn’t say it’s definitive. We are having that internal debate on, are we almost too successful? Is that showing up in our deposit growth?

Unidentified speaker, Interviewer, JPMorgan: Great. I think with that, we’re going to call it a wrap. Thank you very much.

Bory Cox, CFO, CCB: Thank you very much.

Unidentified speaker, Interviewer, JPMorgan: Join me in.

Bory Cox, CFO, CCB: Thank you. Appreciate it.

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