JPMorgan Chase Prices Auto-Callable Notes Linked to IBM Stock With 13.15% Contingent Interest Rate

Structure and Pricing Terms of the Contingent Interest Notes

JPMorgan Chase Financial Company LLC, a wholly owned subsidiary of JPMorgan Chase & Co., issued the Auto Callable Contingent Interest Notes on July 16, 2026, with settlement expected around July 21, 2026. The notes carry a total principal amount of $756,000 at a price of $1,000 per note, with minimum denominations of $1,000 and integral multiples thereof. J.P. Morgan Securities LLC acted as the distribution agent, collecting $27.50 per $1,000 principal amount in fees and commissions from other affiliated or unaffiliated dealers. The issuer received net proceeds of $735,210 after deducting distribution fees of $20,790, according to the pricing disclosure.

The notes are unsecured and unsubordinated obligations of JPMorgan Chase Financial Company LLC, with payment fully and unconditionally guaranteed by JPMorgan Chase & Co. The disclosure states that any payment obligation is subject to the credit risk of both the issuer and the guarantor. The estimated value of the notes at pricing was $951.20 per $1,000 principal amount, representing a valuation discount of approximately $48.80 per note from the public offering price. The CUSIP number assigned to the notes is 46661CSJ6, enabling investors to identify and trade the instruments in secondary markets.

Contingent Interest Payment Mechanism and IBM Stock Barrier

The notes generate contingent interest payments of $32.875 per $1,000 principal amount if IBM stock meets specific performance criteria on designated quarterly review dates. This equates to a contingent interest rate of 13.15% per annum, paid quarterly at 3.2875% per quarter. The interest barrier is set at 50% of the initial value, calculated as $109.525 based on IBM's closing share price of $219.05 on the pricing date of July 16, 2026. The disclosure specifies that contingent interest is paid only if the stock price on a review date is greater than or equal to this interest barrier level.

The structure includes thirteen scheduled review dates beginning October 16, 2026, and concluding July 16, 2029, with corresponding interest payment dates typically five business days after each review. If IBM's closing price falls below the interest barrier on any review date, no contingent interest payment is made for that period. Investors receive no fixed coupon or dividend; instead, they accept the risk of forgoing regular payments in exchange for the opportunity to receive the higher contingent interest amount when IBM's stock performs above the threshold. The disclosure emphasizes that investors should be willing to accept that contingent interest payments may not be made with respect to some or all review dates if IBM stock underperforms relative to the barrier level.

Automatic Call Trigger and Early Redemption Provisions

The notes incorporate an automatic call feature that becomes operative on review dates beginning January 19, 2027, the second scheduled review date. If IBM's stock closing price reaches or exceeds the initial value of $219.05 on any review date other than the first and final dates, the notes are automatically called and redeemed. Upon automatic call, investors receive $1,000 principal per note plus the applicable contingent interest payment for that review date, with settlement on the following interest payment date designated as the call settlement date. The earliest possible automatic call date is January 19, 2027, slightly more than six months after pricing.

This automatic call mechanism means investors' notes may be terminated and repaid before maturity if IBM stock appreciates to its initial pricing level, capping upside potential. The disclosure explicitly states that no further payments will be made on called notes. This feature limits the maximum gain an investor can realize, as any appreciation of IBM beyond the initial value level triggers immediate redemption at par plus the accumulated contingent interest. Investors who purchase these notes must accept that strong IBM stock performance, rather than benefiting from further capital appreciation, results in early termination of their investment.

Maturity Payoff Scenarios and Principal Risk Assessment

If the notes remain uncalled through the final review date of July 16, 2029, payment at maturity depends on IBM's final closing price relative to the trigger value of $109.525. If the final value equals or exceeds the trigger value (50% of initial price), investors receive $1,000 principal plus the final contingent interest payment. However, if final value falls below the trigger value, investors face significant principal loss calculated as $1,000 plus the stock return multiplied by $1,000. The stock return is calculated as (final value minus initial value) divided by initial value.

The disclosure emphasizes that if the final value is less than the trigger value, investors lose more than 50% of principal and could lose all principal at maturity. For example, if IBM stock declines to $100 per share from the initial $219.05 price, the stock return would be negative 54.3%, resulting in a payment of approximately $456 per $1,000 principal amount. This represents a capital loss exceeding 54%. The notes carry extreme downside risk; if IBM stock falls below approximately $109.53 at maturity, investors will realize losses of more than 50% of their principal investment. The filing clearly states investors must be willing to accept the risk of losing a significant portion or all of their principal.

Guarantee Structure and Issuer Credit Risk

JPMorgan Chase & Co. provides an unconditional and irrevocable guarantee of all obligations under the notes issued by its subsidiary, JPMorgan Chase Financial Company LLC. This guarantee structure means that if the issuer defaults, investors may seek recovery from JPMorgan Chase & Co. directly. However, the disclosure clarifies that any payment remains subject to the credit risk of both the issuer and the guarantor. This indicates that if JPMorgan Chase & Co. experiences financial distress or default, investors face potential loss even with the guarantee in place.

The notes are explicitly identified in the disclosure as unsecured and unsubordinated obligations, meaning they are not backed by specific collateral and rank equally with other unsecured debt claims against the issuer. Unlike bank deposits, the notes are not insured by the Federal Deposit Insurance Corporation or any other governmental agency, and they are not obligations of or guaranteed by a bank. Investors depend entirely on JPMorgan Chase's credit quality and capacity to fulfill payment obligations. The disclosure states that neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the notes or passed upon the accuracy of the pricing materials.

IBM Stock Performance Tracking and Adjustment Mechanisms

The notes track the closing price of one share of International Business Machines Corporation stock, identified by Bloomberg ticker IBM, with a par value of $0.20 per share. The initial value was fixed at $219.05 based on IBM's closing price on July 16, 2026, the pricing date. All payment determinations depend on precise closing prices on thirteen scheduled review dates through July 16, 2029. The disclosure specifies that the stock adjustment factor, set at 1.0 on the pricing date, is subject to adjustment upon the occurrence of certain corporate events affecting IBM stock.

The product supplement referenced in the disclosure provides detailed information regarding anti-dilution adjustments and reorganization events that may modify how IBM's stock price is measured for payment purposes. Such adjustments might occur in response to stock splits, dividend distributions, mergers, or other significant corporate restructurings. Investors must recognize that the final calculation of payments depends not only on IBM's actual stock price but also on any adjustment factors applied by the note administrator in response to IBM corporate events. The filing indicates that full details of these adjustment mechanisms are contained in the accompanying product supplement dated April 17, 2026.

Risk Profile and Investor Suitability Considerations

The disclosure explicitly identifies that investing in the notes involves significant risks documented in the risk factors section of the accompanying prospectus supplement and product supplement. The notes are particularly risky for investors with limited tolerance for downside exposure, as the structure provides no principal protection and no floor on returns. Investors must be willing to accept the risk of losing a significant portion or all of their principal and to forgo fixed interest and dividend payments in exchange for contingent interest opportunities.

The automatic call feature creates additional complexity by capping upside potential while maintaining unlimited downside exposure. An investor who correctly anticipates IBM stock will appreciate receives early redemption at par plus interest, rather than further participation in the gain. Conversely, an investor who incorrectly predicts IBM stock direction may realize substantial losses. The disclosure emphasizes these characteristics repeatedly, indicating that the notes are structured for sophisticated investors with specific views on IBM's intermediate-term price trajectory and volatility expectations. Investors should carefully evaluate whether the contingent interest opportunity justifies the principal loss risk and automatic call limitations.

Distribution and Secondary Market Trading Information

J.P. Morgan Securities LLC, acting as agent for JPMorgan Chase Financial Company LLC, distributed the notes and will direct selling commissions of $27.50 per $1,000 principal amount to other affiliated or unaffiliated dealers participating in the distribution. This commission structure, detailed in the plan of distribution section of the accompanying product supplement, represents approximately 2.75% of the offering price per note. The pricing supplement identifies potential conflicts of interest inherent in JPMorgan Chase entities serving as both structurer and distributor of the notes.

The notes carry a CUSIP identification number 46661CSJ6 enabling secondary market trading through standard financial market infrastructure. However, secondary market liquidity and bid-ask spreads for structured notes are typically wider than exchange-traded securities, and pricing may not reflect the estimated value at issuance. Investors seeking to sell these notes prior to maturity or automatic call should anticipate potential difficulty in finding buyers and may face significant execution costs. The notes mature on July 19, 2029, providing a defined holding period of approximately three years from settlement, though automatic call could terminate the investment substantially earlier if IBM stock appreciates.

Schedule of Review and Payment Dates Through Maturity

The notes incorporate a precisely defined calendar of thirteen review dates and corresponding interest payment dates spanning from October 16, 2026, through July 16, 2029. Review dates occur approximately quarterly, on October 16, January 19 or 18, April 16 or 17, and July 16 or 17 of each year, with the final review and maturity date set for July 19, 2029. Interest payment dates follow each review date by approximately five business days, with the final interest payment coinciding with the maturity date.

The disclosure notes that all scheduled dates are subject to postponement in the event of market disruption events as described in the product supplement, and that early acceleration may occur if an acceleration event is triggered. This flexibility in the payment schedule reflects standard market conventions for structured notes but introduces uncertainty regarding the precise timing of cash flows. Investors should review the acceleration event provisions in the accompanying product supplement to understand circumstances under which the note terms might be modified or accelerated. The filing provides the specific calendar dates enabling investors to track quarterly review points and anticipate contingent interest payment amounts or automatic call possibilities.

Valuation and Pricing Disclosures at Issuance

The pricing supplement indicates that the estimated value of the notes at the time terms were set was $951.20 per $1,000 principal amount note, while the price to public was established at $1,000 per note. This $48.80 per note differential, representing approximately 4.88% of the offering price, reflects the embedded value attributable to the contingent interest feature and other structural characteristics. The prospectus supplement accompanying this pricing provides detailed information about the components of the price to public and the methodology used to calculate estimated value.

The differential between estimated value and offering price represents compensation to JPMorgan Chase for structuring, hedging, and distributing the notes, as well as embedded costs within the note structure. Investors should recognize that the offer price exceeds the fair value estimate by this amount, reducing the economic value received at issuance relative to the amount invested. The filing states that information about supplemental use of proceeds and pricing components is available in the pricing supplement, directing investors to examine these disclosures to understand the complete economic arrangement underlying their investment.