Delaware (State or Other Jurisdiction of Incorporation) |
1-5805 (Commission File Number) |
13-2624428 (IRS Employer Identification No.) |
270 Park Avenue, New York, NY (Address of Principal Executive Offices) |
10017 (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition | ||||||||
Item 9.01 Financial Statements and Exhibits | ||||||||
SIGNATURE | ||||||||
EXHIBIT INDEX | ||||||||
EX-12.1 | ||||||||
EX-12.2 | ||||||||
EX-99.1 | ||||||||
EX-99.2 |
Exhibit Number | Description of Exhibit | |
12.1
|
JPMorgan Chase & Co. Computation of Ratio of Earnings to Fixed Charges | |
12.2
|
JPMorgan Chase & Co. Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividend Requirements | |
99.1
|
JPMorgan Chase & Co. Earnings Release Second Quarter 2010 Results | |
99.2
|
JPMorgan Chase & Co. Earnings Release Financial Supplement Second Quarter 2010 |
2
JPMORGAN CHASE & CO. | ||||||
(Registrant) | ||||||
By: | /s/ Louis Rauchenberger
|
|||||
Managing Director and Controller | ||||||
[Principal Accounting Officer] |
3
Exhibit Number | Description of Exhibit | |
12.1
|
JPMorgan Chase & Co. Computation of Ratio of Earnings to Fixed Charges | |
12.2
|
JPMorgan Chase & Co. Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividend Requirements | |
99.1
|
JPMorgan Chase & Co. Earnings Release Second Quarter 2010 Results | |
99.2
|
JPMorgan Chase & Co. Earnings Release Financial Supplement Second Quarter 2010 |
4
Six months ended June 30, (in millions, except ratios) | 2010 | |||
Excluding interest on deposits |
||||
Income before income tax expense |
$ | 11,644 | ||
Fixed charges: |
||||
Interest expense |
4,440 | |||
One-third of rents, net of income from subleases (a) |
291 | |||
Total fixed charges |
4,731 | |||
Add: Equity in undistributed loss of affiliates |
94 | |||
Income before income tax expense and fixed charges,
excluding capitalized interest |
$ | 16,469 | ||
Fixed charges, as above |
$ | 4,731 | ||
Ratio of earnings to fixed charges |
3.48 | |||
Including interest on deposits |
||||
Fixed charges, as above |
$ | 4,731 | ||
Add: Interest on deposits |
1,727 | |||
Total fixed charges and interest on deposits |
$ | 6,458 | ||
Income before income tax expense and fixed charges,
excluding capitalized interest, as above |
$ | 16,469 | ||
Add: Interest on deposits |
1,727 | |||
Total income before income tax expense,
fixed charges and interest on deposits |
$ | 18,196 | ||
Ratio of earnings to fixed charges |
2.82 | |||
(a) | The proportion deemed representative of the interest factor. |
Six months ended June 30, (in millions, except ratios) | 2010 | |||
Excluding interest on deposits |
||||
Income before income tax expense |
$ | 11,644 | ||
Fixed charges: |
||||
Interest expense |
4,440 | |||
One-third of rents, net of income from subleases (a) |
291 | |||
Total fixed charges |
4,731 | |||
Add: Equity in undistributed loss of affiliates |
94 | |||
Income before income tax expense and fixed charges,
excluding capitalized interest |
$ | 16,469 | ||
Fixed charges, as above |
$ | 4,731 | ||
Preferred stock dividends (pre-tax) |
466 | |||
Fixed charges including preferred stock dividends |
$ | 5,197 | ||
Ratio of earnings to fixed charges and preferred stock dividend requirements |
3.17 | |||
Including interest on deposits |
||||
Fixed charges including preferred stock dividends, as above |
$ | 5,197 | ||
Add: Interest on deposits |
1,727 | |||
Total fixed charges including preferred stock dividends and interest on deposits |
$ | 6,924 | ||
Income before income tax expense and fixed charges,
excluding capitalized interest, as above |
$ | 16,469 | ||
Add: Interest on deposits |
1,727 | |||
Total income before income tax expense,
fixed charges and interest on deposits |
$ | 18,196 | ||
Ratio of earnings to fixed charges and preferred stock dividend requirements |
2.63 | |||
(a) | The proportion deemed representative of the interest factor. |
JPMorgan Chase & Co. 270 Park Avenue, New York, NY 10017-2070 NYSE symbol: JPM www.jpmorganchase.com |
| Quarterly profits up from prior year and prior quarter: |
- | Solid performance across most businesses combined with reduced credit costs |
- | Retail Financial Services and Card Services net charge-offs and delinquencies improved from the prior quarter |
- | Strong balance sheet: Tier 1 Common1 at $108.2 billion, or 9.6%; credit reserves at $36.7 billion; loan loss coverage ratio at 5.3% of total loans1 |
| Continued support for economic recovery through assisting customers, sound lending and efforts to prevent foreclosure: |
- | Nearly $700 billion in new and renewed credit provided to and capital raised for consumers, corporations, small businesses, municipalities and non-profits during the first half of the year |
- | Small-business originations up 37% during the first half of the year |
- | 880,000 modifications offered and 245,000 approved since the beginning of 2009 |
Investor Contact: Lauren Tyler (212) 270-7325 | Media Contact: Joe Evangelisti (212) 270-7438 |
1 | Revenue on a managed basis, credit reserves, credit ratios and capital ratios reflect the impact of the January 1, 2010, adoption of new accounting guidance that amended the accounting for transfers of financial assets and consolidation of VIEs. For notes on managed basis and other non-GAAP measures, see page 13. |
2
Results for IB | 1Q10 | 2Q09 | ||||||||||||||||||||||||||
($ millions) | 2Q10 | 1Q10 | 2Q09 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | |||||||||||||||||||||
Net Revenue |
$ | 6,332 | $ | 8,319 | $ | 7,301 | $ | (1,987 | ) | (24 | %) | $ | (969 | ) | (13 | %) | ||||||||||||
Provision for
Credit Losses |
(325 | ) | (462 | ) | 871 | 137 | 30 | (1,196 | ) | NM | ||||||||||||||||||
Noninterest Expense |
4,522 | 4,838 | 4,067 | (316 | ) | (7 | ) | 455 | 11 | |||||||||||||||||||
Net Income |
$ | 1,381 | $ | 2,471 | $ | 1,471 | $ | (1,090 | ) | (44 | %) | $ | (90 | ) | (6 | %) |
§ | Ranked #1 in Global IB Fees for the six months ended June 30, 2010. | ||
§ | Ranked #1 in Global Debt, Equity and Equity-related; #1 in Global Equity and Equity-related; #2 in Global Long-Term Debt; #1 in Global Syndicated Loans; and #4 in Global Announced M&A, based on volume, for the six months ended June 30, 2010. | ||
§ | Return on equity was 14% on $40.0 billion of average allocated capital. | ||
§ | Completed acquisition of RBS Sempra Commodities global oil, global metals (including Henry Bath), global coal and European power, gas, and non-U.S. emissions assets on July 1, 2010. | ||
§ | End-of-period loans retained were $54.0 billion, down 16% from the prior year and up 2% from the prior quarter. End-of-period fair-value and held-for-sale loans were $3.2 billion, down 53% from the prior year and 10% from the prior quarter. |
3
Results for RFS | 1Q10 | 2Q09 | ||||||||||||||||||||||||||
($ millions) | 2Q10 | 1Q10 | 2Q09 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | |||||||||||||||||||||
Net Revenue |
$ | 7,809 | $ | 7,776 | $ | 7,970 | $ | 33 | | % | $ | (161 | ) | (2 | )% | |||||||||||||
Provision for Credit Losses |
1,715 | 3,733 | 3,846 | (2,018 | ) | (54 | ) | (2,131 | ) | (55 | ) | |||||||||||||||||
Noninterest Expense |
4,281 | 4,242 | 4,079 | 39 | 1 | % | 202 | 5 | % | |||||||||||||||||||
Net Income/(Loss) |
$ | 1,042 | $ | (131 | ) | $ | 15 | $ | 1,173 | NM | $ | 1,027 | NM |
4
§ | Checking accounts totaled 26.4 million, up 4% from the prior year and 2% from the prior quarter. | ||
§ | Average total deposits were $337.8 billion, down 3% from the prior year, due to the maturity of time deposits acquired in the Washington Mutual transaction, and up 1% from the prior quarter. | ||
§ | Deposit margin was 3.05%, compared with 2.92% in the prior year and 3.02% in the prior quarter. | ||
§ | End-of-period Business Banking loans were $16.6 billion, down 7% from the prior year and 1% from the prior quarter; originations were $1.2 billion, up 100% from the prior year and 33% from the prior quarter. | ||
§ | Branch sales of credit cards decreased 8% from the prior year and increased 12% from the prior quarter. | ||
§ | Branch sales of investment products increased 9% from the prior year and decreased 3% from the prior quarter. | ||
§ | Overhead ratio (excluding amortization of core deposit intangibles) was 58%, compared with 55% in the prior year and 58% in the prior quarter. | ||
§ | Number of branches was 5,159, down 1% from the prior year, due to planned closures of overlap branches, and flat compared with the prior quarter. |
5
§ | Mortgage loan originations were $32.2 billion, down 22% from the prior year and up 2% from the prior quarter. | ||
§ | Total third-party mortgage loans serviced were $1.1 trillion, down 6% from the prior year and 2% from the prior quarter. | ||
§ | Average auto loans were $47.5 billion, up 10%; originations were $5.8 billion, up 9% from the prior year and down 8% from the prior quarter. |
§ | Average mortgage loans were $119.7 billion, down by $17.1 billion. | ||
§ | Average home equity loans were $122.0 billion, down by $16.1 billion. |
Results for CS | 1Q10 | 2Q09 | ||||||||||||||||||||||||||
($ millions) | 2Q10 | 1Q10 | 2Q09 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | |||||||||||||||||||||
Net Revenue |
$ | 4,217 | $ | 4,447 | $ | 4,868 | $ | (230 | ) | (5 | )% | $ | (651 | ) | (13 | )% | ||||||||||||
Provision for Credit Losses |
2,221 | 3,512 | 4,603 | (1,291 | ) | (37 | ) | (2,382 | ) | (52 | ) | |||||||||||||||||
Noninterest Expense |
1,436 | 1,402 | 1,333 | 34 | 2 | % | 103 | 8 | % | |||||||||||||||||||
Net Income / (Loss) |
$ | 343 | $ | (303 | ) | $ | (672 | ) | $ | 646 | NM | $ | 1,015 | NM |
(*) | Presented on a managed basis. Effective January 1, 2010, JPMorgan Chase adopted new accounting guidance that required the Firm to consolidate its Firm-sponsored credit card securitization trusts. As a result, reported and managed basis are equivalent for periods beginning after January 1, 2010. See notes on page 13 for further explanation of managed basis. |
6
§ | Return on equity was 9% on $15.0 billion of average allocated capital. | ||
§ | Pretax income to average loans (ROO) was 1.54%, compared with negative 2.46% in the prior year and negative 1.22% in the prior quarter. | ||
§ | Net interest income as a percentage of average loans was 9.20%, down from 9.93% in the prior year and 9.60% in the prior quarter. Excluding the Washington Mutual portfolio, the ratio was 8.47%. | ||
§ | New accounts of 2.7 million were opened. | ||
§ | Sales volume was $78.1 billion, an increase of $4.1 billion, or 6%. Excluding the Washington Mutual portfolio, sales volume was $75.4 billion, an increase of $5.6 billion, or 8%. | ||
§ | Merchant processing volume was $117.1 billion on 5.0 billion total transactions processed. |
7
Results for CB | 1Q10 | 2Q09 | ||||||||||||||||||||||||||
($ millions) | 2Q10 | 1Q10 | 2Q09 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | |||||||||||||||||||||
Net Revenue |
$ | 1,486 | $ | 1,416 | $ | 1,453 | $ | 70 | 5 | % | $ | 33 | 2 | % | ||||||||||||||
Provision for Credit Losses |
(235 | ) | 214 | 312 | (449 | ) | NM | (547 | ) | NM | ||||||||||||||||||
Noninterest Expense |
542 | 539 | 535 | 3 | 1 | 7 | 1 | |||||||||||||||||||||
Net Income |
$ | 693 | $ | 390 | $ | 368 | $ | 303 | 78 | % | $ | 325 | 88 | % |
§ | Overhead ratio was 36%, compared with 37%. | ||
§ | Gross investment banking revenue (which is shared with the Investment Bank) was $333 million, up by $5 million, or 2%. | ||
§ | Average loan balances were $95.9 billion, down by $13.1 billion, or 12%, from the prior year, and $702 million, or 1%, from the prior quarter. | ||
§ | End-of-period loan balances were $95.5 billion, down by $10.3 billion, or 10%, from the prior year, and flat compared with the prior quarter. |
8
§ | Average liability balances were $136.8 billion, up by $30.9 billion, or 29%, from the prior year and $3.6 billion, or 3%, from the prior quarter. |
Results for TSS | 1Q10 | 2Q09 | ||||||||||||||||||||||||||
($ millions) | 2Q10 | 1Q10 | 2Q09 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | |||||||||||||||||||||
Net Revenue |
$ | 1,881 | $ | 1,756 | $ | 1,900 | $ | 125 | 7 | % | $ | (19 | ) | (1 | )% | |||||||||||||
Provision for Credit Losses |
(16 | ) | (39 | ) | (5 | ) | 23 | 59 | (11 | ) | (220 | ) | ||||||||||||||||
Noninterest Expense |
1,399 | 1,325 | 1,288 | 74 | 6 | 111 | 9 | |||||||||||||||||||||
Net Income |
$ | 292 | $ | 279 | $ | 379 | $ | 13 | 5 | % | $ | (87 | ) | (23 | )% |
§ | Pretax margin1 was 25%, down from 31% in the prior year and flat compared with the prior quarter. | ||
§ | Return on equity was 18% on $6.5 billion of average allocated capital. | ||
§ | Average liability balances were $246.7 billion, up 5%. | ||
§ | Assets under custody were $14.9 trillion, up 8%. |
9
Results for AM | 1Q10 | 2Q09 | ||||||||||||||||||||||||||
($ millions) | 2Q10 | 1Q10 | 2Q09 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | |||||||||||||||||||||
Net Revenue |
$ | 2,068 | $ | 2,131 | $ | 1,982 | $ | (63 | ) | (3 | )% | $ | 86 | 4 | % | |||||||||||||
Provision for Credit Losses |
5 | 35 | 59 | (30 | ) | (86 | ) | (54 | ) | (92 | ) | |||||||||||||||||
Noninterest Expense |
1,405 | 1,442 | 1,354 | (37 | ) | (3 | ) | 51 | 4 | |||||||||||||||||||
Net Income |
$ | 391 | $ | 392 | $ | 352 | $ | (1 | ) | | % | $ | 39 | 11 | % |
§ | Pretax margin1 was 32%, up from 29%. | ||
§ | Assets under management reflected net outflows of $16 billion for the quarter and $46 billion for the 12 months ended June 30, 2010. For the quarter, net outflows of liquidity products were $29 billion; net inflows of long-term products were $13 billion. | ||
§ | Assets under management ranked in the top two quartiles for investment performance were 78% over 5-years, 67% over 3-years and 58% over 1-year. | ||
§ | Customer assets in 4 and 5 Starrated funds were 43%. | ||
§ | Average loans were $37.4 billion, up 9% from the prior year and 2% from the prior quarter. |
10
§ | End-of-period loans were $38.7 billion, up 9% from the prior year and 4% from the prior quarter. | ||
§ | Average deposits were $86.5 billion, up 15% from the prior year and 7% from the prior quarter. |
Results for | ||||||||||||||||||||||||||||
Corporate/Private Equity | 1Q10 | 2Q09 | ||||||||||||||||||||||||||
($ millions) | 2Q10 | 1Q10 | 2Q09 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | |||||||||||||||||||||
Net Revenue |
$ | 1,850 | $ | 2,357 | $ | 2,265 | $ | (507 | ) | (22 | )% | $ | (415 | ) | (18 | )% | ||||||||||||
Provision for Credit Losses |
(2 | ) | 17 | 9 | (19 | ) | NM | (11 | ) | NM | ||||||||||||||||||
Noninterest Expense |
1,046 | 2,336 | 864 | (1,290 | ) | (55 | ) | 182 | 21 | |||||||||||||||||||
Net Income |
$ | 653 | $ | 228 | $ | 808 | $ | 425 | 186 | % | $ | (155 | ) | (19 | )% |
(*) | This segment includes the results of the Private Equity and Corporate business segments, as well as merger-related items. |
Results for JPM | 1Q10 | 2Q09 | ||||||||||||||||||||||||||
($ millions) | 2Q10 | 1Q10 | 2Q09 | $ O/(U) | O/(U) % | $O/(U) | O/(U) % | |||||||||||||||||||||
Net Revenue |
$ | 25,613 | $ | 28,172 | $ | 27,709 | $ | (2,559 | ) | (9 | )% | $ | (2,096 | ) | (8 | )% | ||||||||||||
Provision for
Credit Losses |
3,363 | 7,010 | 9,695 | (3,647 | ) | (52 | ) | (6,332 | ) | (65 | ) | |||||||||||||||||
Noninterest Expense |
14,631 | 16,124 | 13,520 | (1,493 | ) | (9 | ) | 1,111 | 8 | |||||||||||||||||||
Net Income |
$ | 4,795 | $ | 3,326 | $ | 2,721 | $ | 1,469 | 44 | % | $ | 2,074 | 76 | % |
(*) | Presented on a managed basis. Effective January 1, 2010, the JPMorgan Chase adopted new accounting guidance that required the Firm to consolidate its Firm-sponsored credit card securitization trusts. As a result, reported and managed basis are equivalent for periods beginning after January 1, 2010. See notes on page 13 for further explanation of managed basis. Net revenue on a U.S. GAAP basis was $25,101 million, $27,671 million and $25,623 million for the second quarter of 2010, first quarter of 2010 and second quarter of 2009, respectively. |
11
§ | Tier 1 Capital ratios were 12.1% at June 30, 2010 (estimated), 11.5% at March 31, 2010, and 9.7% at June 30, 2009. | ||
§ | Tier 1 Common ratios were 9.6% at June 30, 2010 (estimated), 9.1% at March 31, 2010, and 7.7% at June 30, 2009. | ||
§ | Headcount was 232,939, an increase of 12,684, or 6%. |
12
1. | Notes on non-GAAP financial measures: |
13
14
JPMORGAN CHASE & CO. | ||
CONSOLIDATED FINANCIAL HIGHLIGHTS | ||
(in millions, except per share, ratio and headcount data) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||
SELECTED INCOME STATEMENT DATA: |
||||||||||||||||||||||||||||||||
Reported Basis |
||||||||||||||||||||||||||||||||
Total net revenue |
$ | 25,101 | $ | 27,671 | $ | 25,623 | (9 | ) | %(2 | ) % | $ | 52,772 | $ | 50,648 | 4 | % | ||||||||||||||||
Total noninterest expense |
14,631 | 16,124 | 13,520 | (9 | ) | 8 | 30,755 | 26,893 | 14 | |||||||||||||||||||||||
Pre-provision profit |
10,470 | 11,547 | 12,103 | (9 | ) | (13 | ) | 22,017 | 23,755 | (7 | ) | |||||||||||||||||||||
Provision for credit losses |
3,363 | 7,010 | 8,031 | (52 | ) | (58 | ) | 10,373 | 16,627 | (38 | ) | |||||||||||||||||||||
NET INCOME |
4,795 | 3,326 | 2,721 | 44 | 76 | 8,121 | 4,862 | 67 | ||||||||||||||||||||||||
Managed Basis (a) |
||||||||||||||||||||||||||||||||
Total net revenue |
$ | 25,613 | $ | 28,172 | $ | 27,709 | (9 | ) | (8 | ) | $ | 53,785 | $ | 54,631 | (2 | ) | ||||||||||||||||
Total noninterest expense |
14,631 | 16,124 | 13,520 | (9 | ) | 8 | 30,755 | 26,893 | 14 | |||||||||||||||||||||||
Pre-provision profit |
10,982 | 12,048 | 14,189 | (9 | ) | (23 | ) | 23,030 | 27,738 | (17 | ) | |||||||||||||||||||||
Provision for credit losses |
3,363 | 7,010 | 9,695 | (52 | ) | (65 | ) | 10,373 | 19,755 | (47 | ) | |||||||||||||||||||||
NET INCOME |
4,795 | 3,326 | 2,721 | 44 | 76 | 8,121 | 4,862 | 67 | ||||||||||||||||||||||||
PER COMMON SHARE DATA: |
||||||||||||||||||||||||||||||||
Basic Earnings |
||||||||||||||||||||||||||||||||
Net income |
1.10 | 0.75 | 0.28 | 47 | 293 | 1.84 | 0.68 | 171 | ||||||||||||||||||||||||
Diluted Earnings (b) |
||||||||||||||||||||||||||||||||
Net income |
1.09 | 0.74 | 0.28 | 47 | 289 | 1.83 | 0.68 | 169 | ||||||||||||||||||||||||
Cash dividends declared |
0.05 | 0.05 | 0.05 | | | 0.10 | 0.10 | | ||||||||||||||||||||||||
Book value |
40.99 | 39.38 | 37.36 | 4 | 10 | 40.99 | 37.36 | 10 | ||||||||||||||||||||||||
Closing share price |
36.61 | 44.75 | 34.11 | (18 | ) | 7 | 36.61 | 34.11 | 7 | |||||||||||||||||||||||
Market capitalization |
145,554 | 177,897 | 133,852 | (18 | ) | 9 | 145,554 | 133,852 | 9 | |||||||||||||||||||||||
COMMON SHARES OUTSTANDING: |
||||||||||||||||||||||||||||||||
Weighted-average diluted shares |
4,005.6 | 3,994.7 | 3,824.1 | | 5 | 4,000.2 | 3,791.4 | 6 | ||||||||||||||||||||||||
Common shares at period-end |
3,975.8 | 3,975.4 | 3,924.1 | | 1 | 3,975.8 | 3,924.1 | 1 | ||||||||||||||||||||||||
FINANCIAL RATIOS: (c) |
||||||||||||||||||||||||||||||||
Net income: |
||||||||||||||||||||||||||||||||
Return on equity (ROE) (b) |
12 | % | 8 | % | 3 | % | 10 | % | 4 | % | ||||||||||||||||||||||
Return on tangible common equity (ROTCE) (b)(d) |
17 | 12 | 5 | 15 | 6 | |||||||||||||||||||||||||||
Return on assets (ROA) |
0.94 | 0.66 | 0.54 | 0.80 | 0.48 | |||||||||||||||||||||||||||
CAPITAL RATIOS: |
||||||||||||||||||||||||||||||||
Tier 1 capital ratio |
12.1 | (g) | 11.5 | 9.7 | ||||||||||||||||||||||||||||
Total capital ratio |
15.8 | (g) | 15.1 | 13.3 | ||||||||||||||||||||||||||||
Tier 1 common capital ratio (e) |
9.6 | (g) | 9.1 | 7.7 | ||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (Period-end) (f) |
||||||||||||||||||||||||||||||||
Total assets |
$ | 2,014,019 | $ | 2,135,796 | $ | 2,026,642 | (6 | ) | (1 | ) | $ | 2,014,019 | $ | 2,026,642 | (1 | ) | ||||||||||||||||
Wholesale loans |
216,826 | 214,290 | 231,625 | 1 | (6 | ) | 216,826 | 231,625 | (6 | ) | ||||||||||||||||||||||
Consumer loans |
482,657 | 499,509 | 448,976 | (3 | ) | 8 | 482,657 | 448,976 | 8 | |||||||||||||||||||||||
Deposits |
887,805 | 925,303 | 866,477 | (4 | ) | 2 | 887,805 | 866,477 | 2 | |||||||||||||||||||||||
Common stockholders equity |
162,968 | 156,569 | 146,614 | 4 | 11 | 162,968 | 146,614 | 11 | ||||||||||||||||||||||||
Total stockholders equity |
171,120 | 164,721 | 154,766 | 4 | 11 | 171,120 | 154,766 | 11 | ||||||||||||||||||||||||
Headcount |
232,939 | 226,623 | 220,255 | 3 | 6 | 232,939 | 220,255 | 6 | ||||||||||||||||||||||||
LINE OF BUSINESS NET INCOME/(LOSS) |
||||||||||||||||||||||||||||||||
Investment Bank |
$ | 1,381 | $ | 2,471 | $ | 1,471 | (44 | ) | (6 | ) | $ | 3,852 | $ | 3,077 | 25 | |||||||||||||||||
Retail Financial Services |
1,042 | (131 | ) | 15 | NM | NM | 911 | 489 | 86 | |||||||||||||||||||||||
Card Services |
343 | (303 | ) | (672 | ) | NM | NM | 40 | (1,219 | ) | NM | |||||||||||||||||||||
Commercial Banking |
693 | 390 | 368 | 78 | 88 | 1,083 | 706 | 53 | ||||||||||||||||||||||||
Treasury & Securities Services |
292 | 279 | 379 | 5 | (23 | ) | 571 | 687 | (17 | ) | ||||||||||||||||||||||
Asset Management |
391 | 392 | 352 | | 11 | 783 | 576 | 36 | ||||||||||||||||||||||||
Corporate/Private Equity |
653 | 228 | 808 | 186 | (19 | ) | 881 | 546 | 61 | |||||||||||||||||||||||
NET INCOME |
$ | 4,795 | $ | 3,326 | $ | 2,721 | 44 | 76 | $ | 8,121 | $ | 4,862 | 67 | |||||||||||||||||||
(a) | For further discussion of managed basis, see Note a. on page 13. | |
(b) | The calculation of the second quarter 2009 earnings per share and net income applicable to common equity includes a one-time, noncash reduction of $1.1 billion, or $0.27 per share, resulting from repayment of Troubled Asset Relief Program (TARP) preferred capital. Excluding this reduction, the adjusted ROE and ROTCE for the second quarter 2009 would have been 6% and 10%, respectively. The Firm views the adjusted ROE and ROTCE, both non-GAAP financial measures, as meaningful because they enable the comparability to prior periods. | |
(c) | Ratios are based upon annualized amounts. | |
(d) | The Firm uses return on tangible common equity, a non-GAAP financial measure, to evaluate the Firms use of equity and to facilitate comparisons with competitors. For further discussion of ROTCE, see page 42 of the Earnings Release Financial Supplement. | |
(e) | Tier 1 common capital ratio is Tier 1 common capital divided by risk-weighted assets. The Firm uses Tier 1 common capital along with the other capital measures to assess and monitor its capital position. For further discussion of Tier 1 common capital ratio, see page 42 of the Earnings Release Financial Supplement. | |
(f) | Effective January 1, 2010, the Firm adopted new guidance that amended the accounting for the transfer of financial assets and the consolidation of variable interest entities (VIEs). Upon adoption of the new guidance, the Firm consolidated its Firm-sponsored credit card securitization trusts, Firm-administered multi-seller conduits and certain other consumer loan securitization entities, primarily mortgage-related, adding $87.7 billion and $92.2 billion of assets and liabilities, respectively, and decreasing stockholders equity and the Tier I capital ratio by $4.5 billion and 34 basis points, respectively. The reduction to stockholders equity was driven by the establishment of an allowance for loan losses of $7.5 billion (pretax) primarily related to receivables held in credit card securitization trusts that were consolidated at the adoption date. For further details regarding the Firms application and impact of the new accounting guidance, see Note 14 on pages 130-131, Note 15 on pages 131-142 and Note 22 on pages 149-152 of JPMorgan Chases March 31, 2010, Form 10-Q. | |
(g) | Estimated. |
JPMORGAN CHASE & CO. TABLE OF CONTENTS |
Page(s) | ||
Consolidated Results |
||
Consolidated Financial Highlights |
2-3 | |
Statements of Income |
4 | |
Consolidated Balance Sheets |
5 | |
Condensed Average Balance Sheets and Annualized Yields |
6 | |
Reconciliation from Reported to Managed Summary |
7 | |
Business Detail |
||
Line of Business Financial Highlights Managed Basis |
8 | |
Investment Bank |
9-11 | |
Retail Financial Services |
12-18 | |
Card Services Managed Basis |
19-21 | |
Commercial Banking |
22-23 | |
Treasury & Securities Services |
24-25 | |
Asset Management |
26-29 | |
Corporate/Private Equity |
30-31 | |
Credit-Related Information |
32-38 | |
Market Risk-Related Information |
39 | |
Supplemental Detail |
||
Capital and Other Selected Balance Sheet Items |
40 | |
Per Share-Related Information |
41 | |
Non-GAAP Financial Measures |
42 | |
Glossary of Terms |
43-46 | |
Disclosure
Change Summary |
47 |
Page 1
JPMORGAN CHASE & CO. CONSOLIDATED FINANCIAL HIGHLIGHTS (in millions, except per share, ratio and headcount data) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
SELECTED INCOME STATEMENT DATA: |
||||||||||||||||||||||||||||||||||||||||
Reported Basis |
||||||||||||||||||||||||||||||||||||||||
Total net revenue |
$ | 25,101 | $ | 27,671 | $ | 23,164 | $ | 26,622 | $ | 25,623 | (9 | )% | (2 | )% | $ | 52,772 | $ | 50,648 | 4 | % | ||||||||||||||||||||
Total noninterest expense |
14,631 | 16,124 | 12,004 | 13,455 | 13,520 | (9 | ) | 8 | 30,755 | 26,893 | 14 | |||||||||||||||||||||||||||||
Pre-provision profit |
10,470 | 11,547 | 11,160 | 13,167 | 12,103 | (9 | ) | (13 | ) | 22,017 | 23,755 | (7 | ) | |||||||||||||||||||||||||||
Provision for credit losses |
3,363 | 7,010 | 7,284 | 8,104 | 8,031 | (52 | ) | (58 | ) | 10,373 | 16,627 | (38 | ) | |||||||||||||||||||||||||||
Income before extraordinary gain |
4,795 | 3,326 | 3,278 | 3,512 | 2,721 | 44 | 76 | 8,121 | 4,862 | 67 | ||||||||||||||||||||||||||||||
Extraordinary gain (a) |
| | | 76 | | | | | | | ||||||||||||||||||||||||||||||
NET INCOME |
4,795 | 3,326 | 3,278 | 3,588 | 2,721 | 44 | 76 | 8,121 | 4,862 | 67 | ||||||||||||||||||||||||||||||
Managed Basis (b) |
||||||||||||||||||||||||||||||||||||||||
Total net revenue |
$ | 25,613 | $ | 28,172 | $ | 25,236 | $ | 28,780 | $ | 27,709 | (9 | ) | (8 | ) | $ | 53,785 | $ | 54,631 | (2 | ) | ||||||||||||||||||||
Total noninterest expense |
14,631 | 16,124 | 12,004 | 13,455 | 13,520 | (9 | ) | 8 | 30,755 | 26,893 | 14 | |||||||||||||||||||||||||||||
Pre-provision profit |
10,982 | 12,048 | 13,232 | 15,325 | 14,189 | (9 | ) | (23 | ) | 23,030 | 27,738 | (17 | ) | |||||||||||||||||||||||||||
Provision for credit losses |
3,363 | 7,010 | 8,901 | 9,802 | 9,695 | (52 | ) | (65 | ) | 10,373 | 19,755 | (47 | ) | |||||||||||||||||||||||||||
Income before extraordinary gain |
4,795 | 3,326 | 3,278 | 3,512 | 2,721 | 44 | 76 | 8,121 | 4,862 | 67 | ||||||||||||||||||||||||||||||
Extraordinary gain (a) |
| | | 76 | | | | | | | ||||||||||||||||||||||||||||||
NET INCOME |
4,795 | 3,326 | 3,278 | 3,588 | 2,721 | 44 | 76 | 8,121 | 4,862 | 67 | ||||||||||||||||||||||||||||||
PER COMMON SHARE DATA: |
||||||||||||||||||||||||||||||||||||||||
Basic Earnings |
||||||||||||||||||||||||||||||||||||||||
Income before extraordinary gain |
1.10 | 0.75 | 0.75 | 0.80 | 0.28 | 47 | 293 | 1.84 | 0.68 | 171 | ||||||||||||||||||||||||||||||
Net income |
1.10 | 0.75 | 0.75 | 0.82 | 0.28 | 47 | 293 | 1.84 | 0.68 | 171 | ||||||||||||||||||||||||||||||
Diluted Earnings (c) |
||||||||||||||||||||||||||||||||||||||||
Income before extraordinary gain |
1.09 | 0.74 | 0.74 | 0.80 | 0.28 | 47 | 289 | 1.83 | 0.68 | 169 | ||||||||||||||||||||||||||||||
Net income |
1.09 | 0.74 | 0.74 | 0.82 | 0.28 | 47 | 289 | 1.83 | 0.68 | 169 | ||||||||||||||||||||||||||||||
Cash dividends declared |
0.05 | 0.05 | 0.05 | 0.05 | 0.05 | | | 0.10 | 0.10 | | ||||||||||||||||||||||||||||||
Book value |
40.99 | 39.38 | 39.88 | 39.12 | 37.36 | 4 | 10 | 40.99 | 37.36 | 10 | ||||||||||||||||||||||||||||||
Closing share price |
36.61 | 44.75 | 41.67 | 43.82 | 34.11 | (18 | ) | 7 | 36.61 | 34.11 | 7 | |||||||||||||||||||||||||||||
Market capitalization |
145,554 | 177,897 | 164,261 | 172,596 | 133,852 | (18 | ) | 9 | 145,554 | 133,852 | 9 | |||||||||||||||||||||||||||||
COMMON SHARES OUTSTANDING: |
||||||||||||||||||||||||||||||||||||||||
Weighted-average diluted shares |
4,005.6 | 3,994.7 | 3,974.1 | 3,962.0 | 3,824.1 | | 5 | 4,000.2 | 3,791.4 | 6 | ||||||||||||||||||||||||||||||
Common shares at period-end |
3,975.8 | 3,975.4 | 3,942.0 | 3,938.7 | 3,924.1 | | 1 | 3,975.8 | 3,924.1 | 1 | ||||||||||||||||||||||||||||||
FINANCIAL RATIOS: (d) |
||||||||||||||||||||||||||||||||||||||||
Net income: |
||||||||||||||||||||||||||||||||||||||||
Return on equity (ROE) (c) |
12 | % | 8 | % | 8 | % | 9 | %(a) | 3 | % | 10 | % | 4 | % | ||||||||||||||||||||||||||
Return on
tangible common equity (ROTCE) (c)(e) |
17 | 12 | 12 | 14 | (a) | 5 | 15 | 6 | ||||||||||||||||||||||||||||||||
Return on assets (ROA) |
0.94 | 0.66 | 0.65 | 0.71 | (a) | 0.54 | 0.80 | 0.48 | ||||||||||||||||||||||||||||||||
CAPITAL RATIOS: |
||||||||||||||||||||||||||||||||||||||||
Tier 1 capital ratio |
12.1 | (g) | 11.5 | 11.1 | 10.2 | 9.7 | ||||||||||||||||||||||||||||||||||
Total capital ratio |
15.8 | (g) | 15.1 | 14.8 | 13.9 | 13.3 | ||||||||||||||||||||||||||||||||||
Tier 1 common capital ratio (f) |
9.6 | (g) | 9.1 | 8.8 | 8.2 | 7.7 |
(a) | On September 25, 2008, JPMorgan Chase acquired the banking operations of Washington Mutual. The acquisition resulted in negative goodwill, and accordingly, the Firm recognized an extraordinary gain. A preliminary gain of $1.9 billion was recognized at December 31, 2008. The final total extraordinary gain that resulted from the Washington Mutual transaction was $2.0 billion. For the third quarter of 2009, and based on income before extraordinary gain, return on equity remained at 9%, return on tangible common equity was 13% and return on assets was 0.70%. | |
(b) | For further discussion of managed basis, see Reconciliation from Reported to Managed Summary on page 7. | |
c) | The calculation of the second quarter 2009 earnings per share and net income applicable to common equity includes a one-time, noncash reduction of $1.1 billion, or $0.27 per share, resulting from repayment of Troubled Asset Relief Program (TARP) preferred capital. Excluding this reduction, the adjusted ROE and ROTCE for the second quarter 2009 would have been 6% and 10%, respectively. The Firm views the adjusted ROE and ROTCE, both non-GAAP financial measures, as meaningful because they enable the comparability to prior periods. | |
(d) | Ratios are based upon annualized amounts. | |
(e) | The Firm uses return on tangible common equity, a non-GAAP financial measure, to evaluate the Firms use of equity and to facilitate comparisons with competitors. For further discussion of ROTCE, see page 42. | |
(f) | Tier 1 common capital ratio is Tier 1 common capital divided by risk-weighted assets. The Firm uses Tier 1 common capital along with the other capital measures to assess and monitor its capital position. For further discussion of Tier 1 common capital ratio, see page 42. | |
(g) | Estimated. |
Page 2
JPMORGAN CHASE & CO. CONSOLIDATED FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except per share, ratio and headcount data) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (Period-end) (a) |
||||||||||||||||||||||||||||||||||||||||
Total assets |
$ | 2,014,019 | $ | 2,135,796 | $ | 2,031,989 | $ | 2,041,009 | $ | 2,026,642 | (6 | )% | (1 | )% | $ | 2,014,019 | $ | 2,026,642 | (1 | )% | ||||||||||||||||||||
Wholesale loans |
216,826 | 214,290 | 204,175 | 218,953 | 231,625 | 1 | (6 | ) | 216,826 | 231,625 | (6 | ) | ||||||||||||||||||||||||||||
Consumer loans |
482,657 | 499,509 | 429,283 | 434,191 | 448,976 | (3 | ) | 8 | 482,657 | 448,976 | 8 | |||||||||||||||||||||||||||||
Deposits |
887,805 | 925,303 | 938,367 | 867,977 | 866,477 | (4 | ) | 2 | 887,805 | 866,477 | 2 | |||||||||||||||||||||||||||||
Common stockholders equity |
162,968 | 156,569 | 157,213 | 154,101 | 146,614 | 4 | 11 | 162,968 | 146,614 | 11 | ||||||||||||||||||||||||||||||
Total stockholders equity |
171,120 | 164,721 | 165,365 | 162,253 | 154,766 | 4 | 11 | 171,120 | 154,766 | 11 | ||||||||||||||||||||||||||||||
Headcount |
232,939 | 226,623 | 222,316 | 220,861 | 220,255 | 3 | 6 | 232,939 | 220,255 | 6 | ||||||||||||||||||||||||||||||
LINE OF BUSINESS NET INCOME/(LOSS) |
||||||||||||||||||||||||||||||||||||||||
Investment Bank |
$ | 1,381 | $ | 2,471 | $ | 1,901 | $ | 1,921 | $ | 1,471 | (44 | ) | (6 | ) | $ | 3,852 | $ | 3,077 | 25 | |||||||||||||||||||||
Retail Financial Services |
1,042 | (131 | ) | (399 | ) | 7 | 15 | NM | NM | 911 | 489 | 86 | ||||||||||||||||||||||||||||
Card Services |
343 | (303 | ) | (306 | ) | (700 | ) | (672 | ) | NM | NM | 40 | (1,219 | ) | NM | |||||||||||||||||||||||||
Commercial Banking |
693 | 390 | 224 | 341 | 368 | 78 | 88 | 1,083 | 706 | 53 | ||||||||||||||||||||||||||||||
Treasury & Securities Services |
292 | 279 | 237 | 302 | 379 | 5 | (23 | ) | 571 | 687 | (17 | ) | ||||||||||||||||||||||||||||
Asset Management |
391 | 392 | 424 | 430 | 352 | | 11 | 783 | 576 | 36 | ||||||||||||||||||||||||||||||
Corporate/Private Equity |
653 | 228 | 1,197 | 1,287 | 808 | 186 | (19 | ) | 881 | 546 | 61 | |||||||||||||||||||||||||||||
NET INCOME |
$ | 4,795 | $ | 3,326 | $ | 3,278 | $ | 3,588 | $ | 2,721 | 44 | 76 | $ | 8,121 | $ | 4,862 | 67 | |||||||||||||||||||||||
(a) | Effective January 1, 2010, the Firm adopted new guidance that amended the accounting for the transfer of financial assets and the consolidation of variable interest entities (VIEs). Upon adoption of the new guidance, the Firm consolidated its Firm-sponsored credit card securitization trusts, Firm-administered multi-seller conduits and certain other consumer loan securitization entities, primarily mortgage-related, adding $87.7 billion and $92.2 billion of assets and liabilities, respectively, and decreasing stockholders equity and the Tier I capital ratio by $4.5 billion and 34 basis points, respectively. The reduction to stockholders equity was driven by the establishment of an allowance for loan losses of $7.5 billion (pretax) primarily related to receivables held in credit card securitization trusts that were consolidated at the adoption date. For further details regarding the Firms application and impact of the new accounting guidance, see Note 14 on pages 130-131, Note 15 on pages 131-142 and Note 22 on pages 149-152 of JPMorgan Chases March 31, 2010, Form 10-Q. |
Page 3
JPMORGAN CHASE & CO. STATEMENTS OF INCOME (in millions, except per share and ratio data) |
QUARTERLY TRENDS | YEAR TO DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||||||||||||||
Investment banking fees |
$ | 1,421 | $ | 1,461 | $ | 1,916 | $ | 1,679 | $ | 2,106 | (3 | )% | (33 | )% | $ | 2,882 | $ | 3,492 | (17 | )% | ||||||||||||||||||||
Principal transactions |
2,090 | 4,548 | 838 | 3,860 | 3,097 | (54 | ) | (33 | ) | 6,638 | 5,098 | 30 | ||||||||||||||||||||||||||||
Lending- and deposit-related fees |
1,586 | 1,646 | 1,765 | 1,826 | 1,766 | (4 | ) | (10 | ) | 3,232 | 3,454 | (6 | ) | |||||||||||||||||||||||||||
Asset management, administration and commissions |
3,349 | 3,265 | 3,361 | 3,158 | 3,124 | 3 | 7 | 6,614 | 6,021 | 10 | ||||||||||||||||||||||||||||||
Securities gains |
1,000 | 610 | 381 | 184 | 347 | 64 | 188 | 1,610 | 545 | 195 | ||||||||||||||||||||||||||||||
Mortgage fees and related income |
888 | 658 | 450 | 843 | 784 | 35 | 13 | 1,546 | 2,385 | (35 | ) | |||||||||||||||||||||||||||||
Credit card income |
1,495 | 1,361 | 1,844 | 1,710 | 1,719 | 10 | (13 | ) | 2,856 | 3,556 | (20 | ) | ||||||||||||||||||||||||||||
Other income |
585 | 412 | 231 | 625 | 10 | 42 | NM | 997 | 60 | NM | ||||||||||||||||||||||||||||||
Noninterest revenue |
12,414 | 13,961 | 10,786 | 13,885 | 12,953 | (11 | ) | (4 | ) | 26,375 | 24,611 | 7 | ||||||||||||||||||||||||||||
Interest income |
15,719 | 16,845 | 15,615 | 16,260 | 16,549 | (7 | ) | (5 | ) | 32,564 | 34,475 | (6 | ) | |||||||||||||||||||||||||||
Interest expense |
3,032 | 3,135 | 3,237 | 3,523 | 3,879 | (3 | ) | (22 | ) | 6,167 | 8,438 | (27 | ) | |||||||||||||||||||||||||||
Net interest income |
12,687 | 13,710 | 12,378 | 12,737 | 12,670 | (7 | ) | | 26,397 | 26,037 | 1 | |||||||||||||||||||||||||||||
TOTAL NET REVENUE |
25,101 | 27,671 | 23,164 | 26,622 | 25,623 | (9 | ) | (2 | ) | 52,772 | 50,648 | 4 | ||||||||||||||||||||||||||||
Provision for credit losses |
3,363 | 7,010 | 7,284 | 8,104 | 8,031 | (52 | ) | (58 | ) | 10,373 | 16,627 | (38 | ) | |||||||||||||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||||||||||||||
Compensation expense |
7,616 | 7,276 | 5,112 | 7,311 | 6,917 | 5 | 10 | 14,892 | 14,505 | 3 | ||||||||||||||||||||||||||||||
Occupancy expense |
883 | 869 | 944 | 923 | 914 | 2 | (3 | ) | 1,752 | 1,799 | (3 | ) | ||||||||||||||||||||||||||||
Technology, communications and equipment expense |
1,165 | 1,137 | 1,182 | 1,140 | 1,156 | 2 | 1 | 2,302 | 2,302 | | ||||||||||||||||||||||||||||||
Professional and outside services |
1,685 | 1,575 | 1,682 | 1,517 | 1,518 | 7 | 11 | 3,260 | 3,033 | 7 | ||||||||||||||||||||||||||||||
Marketing |
628 | 583 | 536 | 440 | 417 | 8 | 51 | 1,211 | 801 | 51 | ||||||||||||||||||||||||||||||
Other expense |
2,419 | 4,441 | 2,262 | 1,767 | 2,190 | (46 | ) | 10 | 6,860 | 3,565 | 92 | |||||||||||||||||||||||||||||
Amortization of intangibles |
235 | 243 | 256 | 254 | 265 | (3 | ) | (11 | ) | 478 | 540 | (11 | ) | |||||||||||||||||||||||||||
Merger costs |
| | 30 | 103 | 143 | | NM | | 348 | NM | ||||||||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE |
14,631 | 16,124 | 12,004 | 13,455 | 13,520 | (9 | ) | 8 | 30,755 | 26,893 | 14 | |||||||||||||||||||||||||||||
Income before income tax expense and extraordinary gain |
7,107 | 4,537 | 3,876 | 5,063 | 4,072 | 57 | 75 | 11,644 | 7,128 | 63 | ||||||||||||||||||||||||||||||
Income tax expense (a) |
2,312 | 1,211 | 598 | 1,551 | 1,351 | 91 | 71 | 3,523 | 2,266 | 55 | ||||||||||||||||||||||||||||||
Income before extraordinary gain |
4,795 | 3,326 | 3,278 | 3,512 | 2,721 | 44 | 76 | 8,121 | 4,862 | 67 | ||||||||||||||||||||||||||||||
Extraordinary gain (b) |
| | | 76 | | | | | | | ||||||||||||||||||||||||||||||
NET INCOME |
$ | 4,795 | $ | 3,326 | $ | 3,278 | $ | 3,588 | $ | 2,721 | 44 | 76 | $ | 8,121 | $ | 4,862 | 67 | |||||||||||||||||||||||
DILUTED EARNINGS PER SHARE |
||||||||||||||||||||||||||||||||||||||||
Income before extraordinary gain (c) |
$ | 1.09 | $ | 0.74 | $ | 0.74 | $ | 0.80 | $ | 0.28 | 47 | 289 | $ | 1.83 | $ | 0.68 | 169 | |||||||||||||||||||||||
Extraordinary gain |
| | | 0.02 | | | | | | | ||||||||||||||||||||||||||||||
NET INCOME (c) |
$ | 1.09 | $ | 0.74 | $ | 0.74 | $ | 0.82 | $ | 0.28 | 47 | 289 | $ | 1.83 | $ | 0.68 | 169 | |||||||||||||||||||||||
FINANCIAL RATIOS |
||||||||||||||||||||||||||||||||||||||||
Net income: |
||||||||||||||||||||||||||||||||||||||||
Return on equity (c) |
12 | % | 8 | % | 8 | % | 9 | %(b) | 3 | % | 10 | % | 4 | % | ||||||||||||||||||||||||||
Return on tangible common equity (c)(d) |
17 | 12 | 12 | 14 | (b) | 5 | 15 | 6 | ||||||||||||||||||||||||||||||||
Return on assets |
0.94 | 0.66 | 0.65 | 0.71 | (b) | 0.54 | 0.80 | 0.48 | ||||||||||||||||||||||||||||||||
Effective income tax rate (a) |
33 | 27 | 15 | 31 | 33 | 30 | 32 | |||||||||||||||||||||||||||||||||
Overhead ratio |
58 | 58 | 52 | 51 | 53 | 58 | 53 | |||||||||||||||||||||||||||||||||
EXCLUDING IMPACT OF MERGER COSTS (e) |
||||||||||||||||||||||||||||||||||||||||
Income before extraordinary gain |
$ | 4,795 | $ | 3,326 | $ | 3,278 | $ | 3,512 | $ | 2,721 | 44 | 76 | $ | 8,121 | $ | 4,862 | 67 | |||||||||||||||||||||||
Merger costs (after-tax) |
| | 18 | 64 | 89 | | NM | | 216 | NM | ||||||||||||||||||||||||||||||
Income before extraordinary gain excl. merger costs |
$ | 4,795 | $ | 3,326 | $ | 3,296 | $ | 3,576 | $ | 2,810 | 44 | 71 | $ | 8,121 | $ | 5,078 | 60 | |||||||||||||||||||||||
Diluted Earnings Per Share: |
||||||||||||||||||||||||||||||||||||||||
Income before extraordinary gain (c) |
$ | 1.09 | $ | 0.74 | $ | 0.74 | $ | 0.80 | $ | 0.28 | 47 | 289 | $ | 1.83 | $ | 0.68 | 169 | |||||||||||||||||||||||
Merger costs (after-tax) |
| | 0.01 | 0.02 | 0.02 | | NM | | 0.05 | NM | ||||||||||||||||||||||||||||||
Income before extraordinary gain excl. merger costs (c) |
$ | 1.09 | $ | 0.74 | $ | 0.75 | $ | 0.82 | $ | 0.30 | 47 | 263 | $ | 1.83 | $ | 0.73 | 151 | |||||||||||||||||||||||
(a) | The income tax expense in the first quarter of 2010 and fourth quarter of 2009 includes tax benefits recognized upon the resolution of tax audits. | |
(b) | On September 25, 2008, JPMorgan Chase acquired the banking operations of Washington Mutual. The acquisition resulted in negative goodwill, and accordingly, the Firm recognized an extraordinary gain. A preliminary gain of $1.9 billion was recognized at December 31, 2008. The final total extraordinary gain that resulted from the Washington Mutual transaction was $2.0 billion. For the third quarter of 2009, and based on income before extraordinary gain, return on equity remained at 9%, return on tangible common equity was 13% and return on assets was 0.70%. | |
(c) | The calculation of the second quarter 2009 earnings per share and net income applicable to common equity includes a one-time, noncash reduction of $1.1 billion, or $0.27 per share, resulting from repayment of TARP preferred capital. For additional information on the reduction, see page 2, footnote (c). | |
(d) | The Firm uses return on tangible common equity, a non-GAAP financial measure, to evaluate the Firms use of equity and to facilitate comparisons with competitors. For further discussion of ROTCE, see page 42. | |
(e) | Net income excluding merger costs, a non-GAAP financial measure, is used by the Firm to facilitate comparison of results against the Firms ongoing operations and with other companies U.S. GAAP financial statements. |
Page 4
JPMORGAN CHASE & CO. CONSOLIDATED BALANCE SHEETS (in millions) |
June 30, 2010 | ||||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||||
Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Jun 30 | ||||||||||||||||||||||
2010 | 2010 | 2009 | 2009 | 2009 | 2010 | 2009 | ||||||||||||||||||||||
ASSETS (a) |
||||||||||||||||||||||||||||
Cash and due from banks |
$ | 32,806 | $ | 31,422 | $ | 26,206 | $ | 21,068 | $ | 25,133 | 4 | % | 31 | % | ||||||||||||||
Deposits with banks |
39,430 | 59,014 | 63,230 | 59,623 | 61,882 | (33 | ) | (36 | ) | |||||||||||||||||||
Federal funds sold and securities purchased under
resale agreements |
199,024 | 230,123 | 195,404 | 171,007 | 159,170 | (14 | ) | 25 | ||||||||||||||||||||
Securities borrowed |
122,289 | 126,741 | 119,630 | 128,059 | 129,263 | (4 | ) | (5 | ) | |||||||||||||||||||
Trading assets: |
||||||||||||||||||||||||||||
Debt and equity instruments |
317,293 | 346,712 | 330,918 | 330,370 | 298,135 | (8 | ) | 6 | ||||||||||||||||||||
Derivative receivables |
80,215 | 79,416 | 80,210 | 94,065 | 97,491 | 1 | (18 | ) | ||||||||||||||||||||
Securities |
312,013 | 344,376 | 360,390 | 372,867 | 345,563 | (9 | ) | (10 | ) | |||||||||||||||||||
Loans |
699,483 | 713,799 | 633,458 | 653,144 | 680,601 | (2 | ) | 3 | ||||||||||||||||||||
Less: Allowance for loan losses |
35,836 | 38,186 | 31,602 | 30,633 | 29,072 | (6 | ) | 23 | ||||||||||||||||||||
Loans, net of allowance for loan losses |
663,647 | 675,613 | 601,856 | 622,511 | 651,529 | (2 | ) | 2 | ||||||||||||||||||||
Accrued interest and accounts receivable |
61,295 | 53,991 | 67,427 | 59,948 | 61,302 | 14 | | |||||||||||||||||||||
Premises and equipment |
11,267 | 11,123 | 11,118 | 10,675 | 10,668 | 1 | 6 | |||||||||||||||||||||
Goodwill |
48,320 | 48,359 | 48,357 | 48,334 | 48,288 | | | |||||||||||||||||||||
Mortgage servicing rights |
11,853 | 15,531 | 15,531 | 13,663 | 14,600 | (24 | ) | (19 | ) | |||||||||||||||||||
Other intangible assets |
4,178 | 4,383 | 4,621 | 4,862 | 5,082 | (5 | ) | (18 | ) | |||||||||||||||||||
Other assets |
110,389 | 108,992 | 107,091 | 103,957 | 118,536 | 1 | (7 | ) | ||||||||||||||||||||
TOTAL ASSETS |
$ | 2,014,019 | $ | 2,135,796 | $ | 2,031,989 | $ | 2,041,009 | $ | 2,026,642 | (6 | ) | (1 | ) | ||||||||||||||
LIABILITIES (a) |
||||||||||||||||||||||||||||
Deposits |
$ | 887,805 | $ | 925,303 | $ | 938,367 | $ | 867,977 | $ | 866,477 | (4 | ) | 2 | |||||||||||||||
Federal funds purchased and securities loaned or sold
under repurchase agreements |
237,455 | 295,171 | 261,413 | 310,219 | 300,931 | (20 | ) | (21 | ) | |||||||||||||||||||
Commercial paper |
41,082 | 50,554 | 41,794 | 53,920 | 42,713 | (19 | ) | (4 | ) | |||||||||||||||||||
Other borrowed funds |
44,431 | 48,981 | 55,740 | 50,824 | 73,968 | (9 | ) | (40 | ) | |||||||||||||||||||
Trading liabilities: |
||||||||||||||||||||||||||||
Debt and equity instruments |
74,745 | 78,228 | 64,946 | 65,233 | 56,021 | (4 | ) | 33 | ||||||||||||||||||||
Derivative payables |
60,137 | 62,741 | 60,125 | 69,214 | 67,197 | (4 | ) | (11 | ) | |||||||||||||||||||
Accounts payable and other liabilities |
160,478 | 154,185 | 162,696 | 171,386 | 171,685 | 4 | (7 | ) | ||||||||||||||||||||
Beneficial interests issued by consolidated VIEs |
88,148 | 93,055 | 15,225 | 17,859 | 20,945 | (5 | ) | 321 | ||||||||||||||||||||
Long-term debt |
248,618 | 262,857 | 266,318 | 272,124 | 271,939 | (5 | ) | (9 | ) | |||||||||||||||||||
TOTAL LIABILITIES |
1,842,899 | 1,971,075 | 1,866,624 | 1,878,756 | 1,871,876 | (7 | ) | (2 | ) | |||||||||||||||||||
STOCKHOLDERS EQUITY (a) |
||||||||||||||||||||||||||||
Preferred stock |
8,152 | 8,152 | 8,152 | 8,152 | 8,152 | | | |||||||||||||||||||||
Common stock |
4,105 | 4,105 | 4,105 | 4,105 | 4,105 | | | |||||||||||||||||||||
Capital surplus |
96,745 | 96,450 | 97,982 | 97,564 | 97,662 | | (1 | ) | ||||||||||||||||||||
Retained earnings |
65,465 | 61,043 | 62,481 | 59,573 | 56,355 | 7 | 16 | |||||||||||||||||||||
Accumulated other comprehensive income/(loss) |
2,404 | 761 | (91 | ) | 283 | (3,438 | ) | 216 | NM | |||||||||||||||||||
Shares held in RSU trust, at cost |
(68 | ) | (68 | ) | (68 | ) | (86 | ) | (86 | ) | | 21 | ||||||||||||||||
Treasury stock, at cost |
(5,683 | ) | (5,722 | ) | (7,196 | ) | (7,338 | ) | (7,984 | ) | 1 | 29 | ||||||||||||||||
TOTAL STOCKHOLDERS EQUITY |
171,120 | 164,721 | 165,365 | 162,253 | 154,766 | 4 | 11 | |||||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |
$ | 2,014,019 | $ | 2,135,796 | $ | 2,031,989 | $ | 2,041,009 | $ | 2,026,642 | (6 | ) | (1 | ) | ||||||||||||||
(a) | Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. For further details regarding the Firms application and impact of the new guidance, see footnote (a) on page 3. |
Page 5
JPMORGAN CHASE & CO. CONDENSED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS (in millions, except rates) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
AVERAGE BALANCES (a) |
||||||||||||||||||||||||||||||||||||||||
ASSETS |
||||||||||||||||||||||||||||||||||||||||
Deposits with banks |
$ | 58,737 | $ | 64,229 | $ | 49,705 | $ | 62,248 | $ | 68,001 | (9 | )% | (14 | )% | $ | 61,468 | $ | 78,237 | (21 | )% | ||||||||||||||||||||
Federal funds sold and securities purchased under
resale agreements |
189,573 | 170,036 | 156,848 | 151,705 | 142,226 | 11 | 33 | 179,858 | 151,554 | 19 | ||||||||||||||||||||||||||||||
Securities borrowed |
113,650 | 114,636 | 125,453 | 129,301 | 122,235 | (1 | ) | (7 | ) | 114,140 | 121,498 | (6 | ) | |||||||||||||||||||||||||||
Trading assets debt instruments |
245,532 | 248,089 | 256,414 | 250,148 | 245,444 | (1 | ) | | 246,804 | 248,753 | (1 | ) | ||||||||||||||||||||||||||||
Securities |
327,425 | 337,441 | 374,327 | 359,451 | 354,216 | (3 | ) | (8 | ) | 332,405 | 318,019 | 5 | ||||||||||||||||||||||||||||
Loans |
705,189 | 725,136 | 642,406 | 665,386 | 697,908 | (3 | ) | 1 | 715,108 | 712,353 | | |||||||||||||||||||||||||||||
Other assets (b) |
34,429 | 27,885 | 29,868 | 24,155 | 36,638 | 23 | (6 | ) | 31,175 | 32,050 | (3 | ) | ||||||||||||||||||||||||||||
Total interest-earning assets |
1,674,535 | 1,687,452 | 1,635,021 | 1,642,394 | 1,666,668 | (1 | ) | | 1,680,958 | 1,662,464 | 1 | |||||||||||||||||||||||||||||
Trading assets equity instruments |
95,080 | 83,674 | 74,936 | 66,790 | 63,507 | 14 | 50 | 89,408 | 63,130 | 42 | ||||||||||||||||||||||||||||||
Trading assets derivative receivables |
79,409 | 78,683 | 86,415 | 99,807 | 114,096 | 1 | (30 | ) | 79,048 | 128,092 | (38 | ) | ||||||||||||||||||||||||||||
All other noninterest-earning assets |
194,623 | 188,871 | 196,853 | 190,185 | 194,101 | 3 | | 191,763 | 198,980 | (4 | ) | |||||||||||||||||||||||||||||
TOTAL ASSETS |
$ | 2,043,647 | $ | 2,038,680 | $ | 1,993,225 | $ | 1,999,176 | $ | 2,038,372 | | | $ | 2,041,177 | $ | 2,052,666 | (1 | ) | ||||||||||||||||||||||
LIABILITIES |
||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits |
$ | 668,953 | $ | 677,431 | $ | 667,269 | $ | 660,998 | $ | 672,350 | (1 | ) | (1 | ) | $ | 673,169 | $ | 704,228 | (4 | ) | ||||||||||||||||||||
Federal
funds purchased and securities loaned or sold under repurchase agreements |
273,614 | 271,934 | 283,263 | 303,175 | 289,971 | 1 | (6 | ) | 272,779 | 258,217 | 6 | |||||||||||||||||||||||||||||
Commercial paper |
37,557 | 37,461 | 42,290 | 42,728 | 37,371 | | | 37,509 | 35,543 | 6 | ||||||||||||||||||||||||||||||
Trading liabilities debt instruments |
72,276 | 65,154 | 63,048 | 47,467 | 43,150 | 11 | 67 | 68,735 | 41,690 | 65 | ||||||||||||||||||||||||||||||
Other borrowings and liabilities (c) |
131,546 | 123,321 | 119,374 | 131,518 | 164,339 | 7 | (20 | ) | 127,455 | 180,309 | (29 | ) | ||||||||||||||||||||||||||||
Beneficial interests issued by consolidated VIEs |
90,085 | 98,104 | 16,002 | 19,351 | 14,493 | (8 | ) | NM | 94,072 | 12,138 | NM | |||||||||||||||||||||||||||||
Long-term debt |
256,089 | 262,503 | 268,476 | 271,281 | 274,323 | (2 | ) | (7 | ) | 259,279 | 266,571 | (3 | ) | |||||||||||||||||||||||||||
Total interest-bearing liabilities |
1,530,120 | 1,535,908 | 1,459,722 | 1,476,518 | 1,495,997 | | 2 | 1,532,998 | 1,498,696 | 2 | ||||||||||||||||||||||||||||||
Noninterest-bearing deposits |
209,615 | 200,075 | 203,092 | 191,821 | 199,221 | 5 | 5 | 204,871 | 198,531 | 3 | ||||||||||||||||||||||||||||||
Trading liabilities equity instruments |
5,216 | 5,728 | 8,372 | 12,376 | 11,437 | (9 | ) | (54 | ) | 5,470 | 13,036 | (58 | ) | |||||||||||||||||||||||||||
Trading liabilities derivative payables |
62,547 | 59,053 | 63,423 | 75,458 | 78,155 | 6 | (20 | ) | 60,809 | 86,503 | (30 | ) | ||||||||||||||||||||||||||||
All other noninterest-bearing liabilities |
68,928 | 73,670 | 93,939 | 85,383 | 84,359 | (6 | ) | (18 | ) | 71,287 | 87,071 | (18 | ) | |||||||||||||||||||||||||||
TOTAL LIABILITIES |
1,876,426 | 1,874,434 | 1,828,548 | 1,841,556 | 1,869,169 | | | 1,875,435 | 1,883,837 | | ||||||||||||||||||||||||||||||
Preferred stock |
8,152 | 8,152 | 8,152 | 8,152 | 28,338 | | (71 | ) | 8,152 | 30,138 | (73 | ) | ||||||||||||||||||||||||||||
Common stockholders equity |
159,069 | 156,094 | 156,525 | 149,468 | 140,865 | 2 | 13 | 157,590 | 138,691 | 14 | ||||||||||||||||||||||||||||||
TOTAL STOCKHOLDERS EQUITY |
167,221 | 164,246 | 164,677 | 157,620 | 169,203 | 2 | (1 | ) | 165,742 | 168,829 | (2 | ) | ||||||||||||||||||||||||||||
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY |
$ | 2,043,647 | $ | 2,038,680 | $ | 1,993,225 | $ | 1,999,176 | $ | 2,038,372 | | | $ | 2,041,177 | $ | 2,052,666 | (1 | ) | ||||||||||||||||||||||
AVERAGE RATES (a) |
||||||||||||||||||||||||||||||||||||||||
INTEREST-EARNING ASSETS |
||||||||||||||||||||||||||||||||||||||||
Deposits with banks |
0.63 | % | 0.60 | % | 0.95 | % | 0.83 | % | 1.45 | % | 0.61 | % | 1.78 | % | ||||||||||||||||||||||||||
Federal
funds sold and securities purchased under resale agreements |
0.84 | 0.97 | 0.92 | 0.96 | 1.04 | 0.90 | 1.35 | |||||||||||||||||||||||||||||||||
Securities borrowed |
0.11 | 0.10 | 0.14 | (0.09 | ) | (0.32 | ) | 0.11 | (0.02 | ) | ||||||||||||||||||||||||||||||
Trading assets debt instruments |
4.25 | 4.56 | 4.63 | 4.78 | 4.91 | 4.41 | 5.09 | |||||||||||||||||||||||||||||||||
Securities |
3.14 | 3.54 | 3.32 | 3.62 | 3.64 | 3.34 | 3.87 | |||||||||||||||||||||||||||||||||
Loans |
5.68 | 5.91 | 5.51 | 5.64 | 5.65 | 5.80 | 5.76 | |||||||||||||||||||||||||||||||||
Other assets (b) |
1.60 | 1.36 | 1.42 | 2.18 | 0.80 | 1.49 | 1.50 | |||||||||||||||||||||||||||||||||
Total interest-earning assets |
3.79 | 4.07 | 3.80 | 3.95 | 4.00 | 3.93 | 4.20 | |||||||||||||||||||||||||||||||||
INTEREST-BEARING LIABILITIES |
||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits |
0.53 | 0.51 | 0.53 | 0.65 | 0.70 | 0.52 | 0.82 | |||||||||||||||||||||||||||||||||
Federal funds purchased and securities loaned or
sold under repurchase agreements |
(0.07 | ) (d) | (0.05 | ) (d) | 0.08 | 0.20 | 0.23 | (0.06 | ) | 0.29 | ||||||||||||||||||||||||||||||
Commercial paper |
0.19 | 0.19 | 0.20 | 0.23 | 0.24 | 0.19 | 0.35 | |||||||||||||||||||||||||||||||||
Trading liabilities debt instruments |
2.49 | 3.39 | 3.85 | 4.50 | 3.76 | 2.91 | 3.71 | |||||||||||||||||||||||||||||||||
Other borrowings and liabilities (c) |
0.50 | 0.56 | 0.83 | 0.69 | 0.69 | 0.53 | 0.86 | |||||||||||||||||||||||||||||||||
Beneficial interests issued by consolidated VIEs |
1.36 | 1.36 | 1.32 | 1.43 | 1.59 | 1.36 | 1.58 | |||||||||||||||||||||||||||||||||
Long-term debt |
1.97 | 1.95 | 2.01 | 2.09 | 2.60 | 1.96 | 2.67 | |||||||||||||||||||||||||||||||||
Total interest-bearing liabilities |
0.79 | 0.83 | 0.88 | 0.95 | 1.04 | 0.81 | 1.14 | |||||||||||||||||||||||||||||||||
INTEREST RATE SPREAD |
3.00 | % | 3.24 | % | 2.92 | % | 3.00 | % | 2.96 | % | 3.12 | % | 3.06 | % | ||||||||||||||||||||||||||
NET YIELD ON INTEREST-EARNING ASSETS |
3.06 | % | 3.32 | % | 3.02 | % | 3.10 | % | 3.07 | % | 3.19 | % | 3.18 | % | ||||||||||||||||||||||||||
NET YIELD ON INTEREST-EARNING ASSETS
ADJUSTED FOR SECURITIZATIONS |
3.06 | % | 3.32 | % | 3.33 | % | 3.40 | % | 3.37 | % | 3.19 | % | 3.48 | % | ||||||||||||||||||||||||||
(a) | Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. For further details regarding the Firms application and impact of the new guidance, see footnote (a) on page 3. | |
(b) | Includes margin loans and the Firms investment in asset-backed commercial paper under the Federal Reserve Bank of Bostons AML facility, which declined to zero during the third quarter of 2009. | |
(c) | Includes securities sold but not yet purchased, brokerage customer payables and advances from Federal Home Loan Banks. | |
(d) | Reflects a benefit from the favorable market environment for dollar-roll financings. |
Page 6
JPMORGAN CHASE & CO. RECONCILIATION FROM REPORTED TO MANAGED SUMMARY (in millions) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
CREDIT CARD INCOME |
||||||||||||||||||||||||||||||||||||||||
Credit card income reported |
$ | 1,495 | $ | 1,361 | $ | 1,844 | $ | 1,710 | $ | 1,719 | 10 | % | (13 | )% | $ | 2,856 | $ | 3,556 | (20 | )% | ||||||||||||||||||||
Impact of: |
||||||||||||||||||||||||||||||||||||||||
Credit card securitizations |
N/A | N/A | (375 | ) | (285 | ) | (294 | ) | NM | NM | N/A | (834 | ) | NM | ||||||||||||||||||||||||||
Credit card income managed |
$ | 1,495 | $ | 1,361 | $ | 1,469 | $ | 1,425 | $ | 1,425 | 10 | 5 | $ | 2,856 | $ | 2,722 | 5 | |||||||||||||||||||||||
OTHER INCOME |
||||||||||||||||||||||||||||||||||||||||
Other income reported |
$ | 585 | $ | 412 | $ | 231 | $ | 625 | $ | 10 | 42 | NM | $ | 997 | $ | 60 | NM | |||||||||||||||||||||||
Impact of: |
||||||||||||||||||||||||||||||||||||||||
Tax-equivalent adjustments |
416 | 411 | 397 | 371 | 335 | 1 | 24 | 827 | 672 | 23 | ||||||||||||||||||||||||||||||
Other income managed |
$ | 1,001 | $ | 823 | $ | 628 | $ | 996 | $ | 345 | 22 | 190 | $ | 1,824 | $ | 732 | 149 | |||||||||||||||||||||||
TOTAL NONINTEREST REVENUE |
||||||||||||||||||||||||||||||||||||||||
Total noninterest revenue reported |
$ | 12,414 | $ | 13,961 | $ | 10,786 | $ | 13,885 | $ | 12,953 | (11 | ) | (4 | ) | $ | 26,375 | $ | 24,611 | 7 | |||||||||||||||||||||
Impact of: |
||||||||||||||||||||||||||||||||||||||||
Credit card securitizations |
N/A | N/A | (375 | ) | (285 | ) | (294 | ) | NM | NM | N/A | (834 | ) | NM | ||||||||||||||||||||||||||
Tax-equivalent adjustments |
416 | 411 | 397 | 371 | 335 | 1 | 24 | 827 | 672 | 23 | ||||||||||||||||||||||||||||||
Total noninterest revenue managed |
$ | 12,830 | $ | 14,372 | $ | 10,808 | $ | 13,971 | $ | 12,994 | (11 | ) | (1 | ) | $ | 27,202 | $ | 24,449 | 11 | |||||||||||||||||||||
NET INTEREST INCOME |
||||||||||||||||||||||||||||||||||||||||
Net interest income reported |
$ | 12,687 | $ | 13,710 | $ | 12,378 | $ | 12,737 | $ | 12,670 | (7 | ) | | $ | 26,397 | $ | 26,037 | 1 | ||||||||||||||||||||||
Impact of: |
||||||||||||||||||||||||||||||||||||||||
Credit card securitizations |
N/A | N/A | 1,992 | 1,983 | 1,958 | NM | NM | N/A | 3,962 | NM | ||||||||||||||||||||||||||||||
Tax-equivalent adjustments |
96 | 90 | 58 | 89 | 87 | 7 | 10 | 186 | 183 | 2 | ||||||||||||||||||||||||||||||
Net interest income managed |
$ | 12,783 | $ | 13,800 | $ | 14,428 | $ | 14,809 | $ | 14,715 | (7 | ) | (13 | ) | $ | 26,583 | $ | 30,182 | (12 | ) | ||||||||||||||||||||
TOTAL NET REVENUE |
||||||||||||||||||||||||||||||||||||||||
Total net revenue reported |
$ | 25,101 | $ | 27,671 | $ | 23,164 | $ | 26,622 | $ | 25,623 | (9 | ) | (2 | ) | $ | 52,772 | $ | 50,648 | 4 | |||||||||||||||||||||
Impact of: |
||||||||||||||||||||||||||||||||||||||||
Credit card securitizations |
N/A | N/A | 1,617 | 1,698 | 1,664 | NM | NM | N/A | 3,128 | NM | ||||||||||||||||||||||||||||||
Tax-equivalent adjustments |
512 | 501 | 455 | 460 | 422 | 2 | 21 | 1,013 | 855 | 18 | ||||||||||||||||||||||||||||||
Total net revenue managed |
$ | 25,613 | $ | 28,172 | $ | 25,236 | $ | 28,780 | $ | 27,709 | (9 | ) | (8 | ) | $ | 53,785 | $ | 54,631 | (2 | ) | ||||||||||||||||||||
PRE-PROVISION PROFIT |
||||||||||||||||||||||||||||||||||||||||
Total pre-provision profit reported |
$ | 10,470 | $ | 11,547 | $ | 11,160 | $ | 13,167 | $ | 12,103 | (9 | ) | (13 | ) | $ | 22,017 | $ | 23,755 | (7 | ) | ||||||||||||||||||||
Impact of: |
||||||||||||||||||||||||||||||||||||||||
Credit card securitizations |
N/A | N/A | 1,617 | 1,698 | 1,664 | NM | NM | N/A | 3,128 | NM | ||||||||||||||||||||||||||||||
Tax-equivalent adjustments |
512 | 501 | 455 | 460 | 422 | 2 | 21 | 1,013 | 855 | 18 | ||||||||||||||||||||||||||||||
Total pre-provision profit managed |
$ | 10,982 | $ | 12,048 | $ | 13,232 | $ | 15,325 | $ | 14,189 | (9 | ) | (23 | ) | $ | 23,030 | $ | 27,738 | (17 | ) | ||||||||||||||||||||
PROVISION FOR CREDIT LOSSES |
||||||||||||||||||||||||||||||||||||||||
Provision for credit losses reported |
$ | 3,363 | $ | 7,010 | $ | 7,284 | $ | 8,104 | $ | 8,031 | (52 | ) | (58 | ) | $ | 10,373 | $ | 16,627 | (38 | ) | ||||||||||||||||||||
Impact of: |
||||||||||||||||||||||||||||||||||||||||
Credit card securitizations |
N/A | N/A | 1,617 | 1,698 | 1,664 | NM | NM | N/A | 3,128 | NM | ||||||||||||||||||||||||||||||
Provision for credit losses managed |
$ | 3,363 | $ | 7,010 | $ | 8,901 | $ | 9,802 | $ | 9,695 | (52 | ) | (65 | ) | $ | 10,373 | $ | 19,755 | (47 | ) | ||||||||||||||||||||
INCOME TAX EXPENSE |
||||||||||||||||||||||||||||||||||||||||
Income tax expense reported |
$ | 2,312 | $ | 1,211 | $ | 598 | $ | 1,551 | $ | 1,351 | 91 | 71 | $ | 3,523 | $ | 2,266 | 55 | |||||||||||||||||||||||
Impact of: |
||||||||||||||||||||||||||||||||||||||||
Tax-equivalent adjustments |
512 | 501 | 455 | 460 | 422 | 2 | 21 | 1,013 | 855 | 18 | ||||||||||||||||||||||||||||||
Income tax expense managed |
$ | 2,824 | $ | 1,712 | $ | 1,053 | $ | 2,011 | $ | 1,773 | 65 | 59 | $ | 4,536 | $ | 3,121 | 45 | |||||||||||||||||||||||
N/A: | Not applicable. |
Page 7
JPMORGAN CHASE & CO. LINE OF BUSINESS FINANCIAL HIGHLIGHTS MANAGED BASIS (in millions, except ratio data) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
TOTAL NET REVENUE (FTE) |
||||||||||||||||||||||||||||||||||||||||
Investment Bank (a) |
$ | 6,332 | $ | 8,319 | $ | 4,929 | $ | 7,508 | $ | 7,301 | (24 | )% | (13 | )% | $ | 14,651 | $ | 15,672 | (7 | )% | ||||||||||||||||||||
Retail Financial Services |
7,809 | 7,776 | 7,669 | 8,218 | 7,970 | | (2 | ) | 15,585 | 16,805 | (7 | ) | ||||||||||||||||||||||||||||
Card Services |
4,217 | 4,447 | 5,148 | 5,159 | 4,868 | (5 | ) | (13 | ) | 8,664 | 9,997 | (13 | ) | |||||||||||||||||||||||||||
Commercial Banking |
1,486 | 1,416 | 1,406 | 1,459 | 1,453 | 5 | 2 | 2,902 | 2,855 | 2 | ||||||||||||||||||||||||||||||
Treasury & Securities Services |
1,881 | 1,756 | 1,835 | 1,788 | 1,900 | 7 | (1 | ) | 3,637 | 3,721 | (2 | ) | ||||||||||||||||||||||||||||
Asset Management |
2,068 | 2,131 | 2,195 | 2,085 | 1,982 | (3 | ) | 4 | 4,199 | 3,685 | 14 | |||||||||||||||||||||||||||||
Corporate/Private Equity (a) |
1,820 | 2,327 | 2,054 | 2,563 | 2,235 | (22 | ) | (19 | ) | 4,147 | 1,896 | 119 | ||||||||||||||||||||||||||||
TOTAL NET REVENUE |
$ | 25,613 | $ | 28,172 | $ | 25,236 | $ | 28,780 | $ | 27,709 | (9 | ) | (8 | ) | $ | 53,785 | $ | 54,631 | (2 | ) | ||||||||||||||||||||
TOTAL PRE-PROVISION PROFIT |
||||||||||||||||||||||||||||||||||||||||
Investment Bank (a) |
$ | 1,810 | $ | 3,481 | $ | 2,643 | $ | 3,234 | $ | 3,234 | (48 | ) | (44 | ) | $ | 5,291 | $ | 6,831 | (23 | ) | ||||||||||||||||||||
Retail Financial Services |
3,528 | 3,534 | 3,367 | 4,022 | 3,891 | | (9 | ) | 7,062 | 8,555 | (17 | ) | ||||||||||||||||||||||||||||
Card Services |
2,781 | 3,045 | 3,752 | 3,853 | 3,535 | (9 | ) | (21 | ) | 5,826 | 7,318 | (20 | ) | |||||||||||||||||||||||||||
Commercial Banking |
944 | 877 | 863 | 914 | 918 | 8 | 3 | 1,821 | 1,767 | 3 | ||||||||||||||||||||||||||||||
Treasury & Securities Services |
482 | 431 | 444 | 508 | 612 | 12 | (21 | ) | 913 | 1,114 | (18 | ) | ||||||||||||||||||||||||||||
Asset Management |
663 | 689 | 725 | 734 | 628 | (4 | ) | 6 | 1,352 | 1,033 | 31 | |||||||||||||||||||||||||||||
Corporate/Private Equity (a) |
774 | (9 | ) | 1,438 | 2,060 | 1,371 | NM | (44 | ) | 765 | 1,120 | (32 | ) | |||||||||||||||||||||||||||
TOTAL PRE-PROVISION PROFIT |
$ | 10,982 | $ | 12,048 | $ | 13,232 | $ | 15,325 | $ | 14,189 | (9 | ) | (23 | ) | $ | 23,030 | $ | 27,738 | (17 | ) | ||||||||||||||||||||
NET INCOME/(LOSS) |
||||||||||||||||||||||||||||||||||||||||
Investment Bank |
$ | 1,381 | $ | 2,471 | $ | 1,901 | $ | 1,921 | $ | 1,471 | (44 | ) | (6 | ) | $ | 3,852 | $ | 3,077 | 25 | |||||||||||||||||||||
Retail Financial Services |
1,042 | (131 | ) | (399 | ) | 7 | 15 | NM | NM | 911 | 489 | 86 | ||||||||||||||||||||||||||||
Card Services |
343 | (303 | ) | (306 | ) | (700 | ) | (672 | ) | NM | NM | 40 | (1,219 | ) | NM | |||||||||||||||||||||||||
Commercial Banking |
693 | 390 | 224 | 341 | 368 | 78 | 88 | 1,083 | 706 | 53 | ||||||||||||||||||||||||||||||
Treasury & Securities Services |
292 | 279 | 237 | 302 | 379 | 5 | (23 | ) | 571 | 687 | (17 | ) | ||||||||||||||||||||||||||||
Asset Management |
391 | 392 | 424 | 430 | 352 | | 11 | 783 | 576 | 36 | ||||||||||||||||||||||||||||||
Corporate/Private Equity |
653 | 228 | 1,197 | 1,287 | 808 | 186 | (19 | ) | 881 | 546 | 61 | |||||||||||||||||||||||||||||
TOTAL NET INCOME |
$ | 4,795 | $ | 3,326 | $ | 3,278 | $ | 3,588 | $ | 2,721 | 44 | 76 | $ | 8,121 | $ | 4,862 | 67 | |||||||||||||||||||||||
AVERAGE EQUITY (b) |
||||||||||||||||||||||||||||||||||||||||
Investment Bank |
$ | 40,000 | $ | 40,000 | $ | 33,000 | $ | 33,000 | $ | 33,000 | | 21 | $ | 40,000 | $ | 33,000 | 21 | |||||||||||||||||||||||
Retail Financial Services |
28,000 | 28,000 | 25,000 | 25,000 | 25,000 | | 12 | 28,000 | 25,000 | 12 | ||||||||||||||||||||||||||||||
Card Services |
15,000 | 15,000 | 15,000 | 15,000 | 15,000 | | | 15,000 | 15,000 | | ||||||||||||||||||||||||||||||
Commercial Banking |
8,000 | 8,000 | 8,000 | 8,000 | 8,000 | | | 8,000 | 8,000 | | ||||||||||||||||||||||||||||||
Treasury & Securities Services |
6,500 | 6,500 | 5,000 | 5,000 | 5,000 | | 30 | 6,500 | 5,000 | 30 | ||||||||||||||||||||||||||||||
Asset Management |
6,500 | 6,500 | 7,000 | 7,000 | 7,000 | | (7 | ) | 6,500 | 7,000 | (7 | ) | ||||||||||||||||||||||||||||
Corporate/Private Equity |
55,069 | 52,094 | 63,525 | 56,468 | 47,865 | 6 | 15 | 53,590 | 45,691 | 17 | ||||||||||||||||||||||||||||||
TOTAL AVERAGE EQUITY |
$ | 159,069 | $ | 156,094 | $ | 156,525 | $ | 149,468 | $ | 140,865 | 2 | 13 | $ | 157,590 | $ | 138,691 | 14 | |||||||||||||||||||||||
RETURN ON EQUITY (b) |
||||||||||||||||||||||||||||||||||||||||
Investment Bank |
14 | % | 25 | % | 23 | % | 23 | % | 18 | % | 19 | % | 19 | % | ||||||||||||||||||||||||||
Retail Financial Services |
15 | (2 | ) | (6 | ) | | | 7 | 4 | |||||||||||||||||||||||||||||||
Card Services |
9 | (8 | ) | (8 | ) | (19 | ) | (18 | ) | 1 | (16 | ) | ||||||||||||||||||||||||||||
Commercial Banking |
35 | 20 | 11 | 17 | 18 | 27 | 18 | |||||||||||||||||||||||||||||||||
Treasury & Securities Services |
18 | 17 | 19 | 24 | 30 | 18 | 28 | |||||||||||||||||||||||||||||||||
Asset Management |
24 | 24 | 24 | 24 | 20 | 24 | 17 |
(a) | Corporate/Private Equity includes an adjustment to offset IBs inclusion of the credit reimbursement from TSS in total net revenue; TSS reports the reimbursement to IB as a separate line on its income statement (not part of total revenue). | |
(b) | Equity for a line of business represents the amount the Firm believes the business would require if it were operating independently, incorporating sufficient capital to address economic risk measures, regulatory capital requirements and capital levels for similarly rated peers. Capital is also allocated to each line of business for, among other things, goodwill and other intangibles associated with acquisitions effected by the line of business. Return on common equity is measured and internal targets for expected returns are established as a key measure of a business segments performance. Effective January 1, 2010, the Firm enhanced its line of business equity framework to better align equity assigned to each line of business with the changes anticipated to occur in that line of business, as well as changes in the competitive and regulatory landscape. The lines of business are now capitalized based on the Tier 1 common standard, rather than the Tier 1 capital standard. |
Page 8
JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS (in millions, except ratio data) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
INCOME STATEMENT |
||||||||||||||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||||||||||||||
Investment banking fees |
$ | 1,405 | $ | 1,446 | $ | 1,892 | $ | 1,658 | $ | 2,239 | (3 | )% | (37 | )% | $ | 2,851 | $ | 3,619 | (21 | )% | ||||||||||||||||||||
Principal transactions |
2,105 | 3,931 | 84 | 2,714 | 1,841 | (46 | ) | 14 | 6,036 | 5,356 | 13 | |||||||||||||||||||||||||||||
Lending- and deposit-related fees |
203 | 202 | 174 | 185 | 167 | | 22 | 405 | 305 | 33 | ||||||||||||||||||||||||||||||
Asset management, administration and commissions |
633 | 563 | 608 | 633 | 717 | 12 | (12 | ) | 1,196 | 1,409 | (15 | ) | ||||||||||||||||||||||||||||
All other income (a) |
86 | 49 | (14 | ) | 63 | (108 | ) | 76 | NM | 135 | (164 | ) | NM | |||||||||||||||||||||||||||
Noninterest revenue |
4,432 | 6,191 | 2,744 | 5,253 | 4,856 | (28 | ) | (9 | ) | 10,623 | 10,525 | 1 | ||||||||||||||||||||||||||||
Net interest income |
1,900 | 2,128 | 2,185 | 2,255 | 2,445 | (11 | ) | (22 | ) | 4,028 | 5,147 | (22 | ) | |||||||||||||||||||||||||||
TOTAL NET REVENUE (b) |
6,332 | 8,319 | 4,929 | 7,508 | 7,301 | (24 | ) | (13 | ) | 14,651 | 15,672 | (7 | ) | |||||||||||||||||||||||||||
Provision for credit losses |
(325 | ) | (462 | ) | (181 | ) | 379 | 871 | 30 | NM | (787 | ) | 2,081 | NM | ||||||||||||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||||||||||||||
Compensation expense (c) |
2,923 | 2,928 | 549 | 2,778 | 2,677 | | 9 | 5,851 | 6,007 | (3 | ) | |||||||||||||||||||||||||||||
Noncompensation expense |
1,599 | 1,910 | 1,737 | 1,496 | 1,390 | (16 | ) | 15 | 3,509 | 2,834 | 24 | |||||||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE |
4,522 | 4,838 | 2,286 | 4,274 | 4,067 | (7 | ) | 11 | 9,360 | 8,841 | 6 | |||||||||||||||||||||||||||||
Income before income tax expense |
2,135 | 3,943 | 2,824 | 2,855 | 2,363 | (46 | ) | (10 | ) | 6,078 | 4,750 | 28 | ||||||||||||||||||||||||||||
Income tax expense |
754 | 1,472 | 923 | 934 | 892 | (49 | ) | (15 | ) | 2,226 | 1,673 | 33 | ||||||||||||||||||||||||||||
NET INCOME |
$ | 1,381 | $ | 2,471 | $ | 1,901 | $ | 1,921 | $ | 1,471 | (44 | ) | (6 | ) | $ | 3,852 | $ | 3,077 | 25 | |||||||||||||||||||||
FINANCIAL RATIOS |
||||||||||||||||||||||||||||||||||||||||
ROE |
14 | % | 25 | % | 23 | % | 23 | % | 18 | % | 19 | % | 19 | % | ||||||||||||||||||||||||||
ROA |
0.78 | 1.48 | 1.12 | 1.12 | 0.83 | 1.12 | 0.86 | |||||||||||||||||||||||||||||||||
Overhead ratio |
71 | 58 | 46 | 57 | 56 | 64 | 56 | |||||||||||||||||||||||||||||||||
Compensation expense as a percent of total net revenue (c) |
37 | 35 | 11 | 37 | 37 | 36 | 38 | |||||||||||||||||||||||||||||||||
REVENUE BY BUSINESS |
||||||||||||||||||||||||||||||||||||||||
Investment banking fees: |
||||||||||||||||||||||||||||||||||||||||
Advisory |
$ | 355 | $ | 305 | $ | 611 | $ | 384 | $ | 393 | 16 | (10 | ) | $ | 660 | $ | 872 | (24 | ) | |||||||||||||||||||||
Equity underwriting |
354 | 413 | 549 | 681 | 1,103 | (14 | ) | (68 | ) | 767 | 1,411 | (46 | ) | |||||||||||||||||||||||||||
Debt underwriting |
696 | 728 | 732 | 593 | 743 | (4 | ) | (6 | ) | 1,424 | 1,336 | 7 | ||||||||||||||||||||||||||||
Total investment banking fees |
1,405 | 1,446 | 1,892 | 1,658 | 2,239 | (3 | ) | (37 | ) | 2,851 | 3,619 | (21 | ) | |||||||||||||||||||||||||||
Fixed income markets |
3,563 | 5,464 | 2,735 | 5,011 | 4,929 | (35 | ) | (28 | ) | 9,027 | 9,818 | (8 | ) | |||||||||||||||||||||||||||
Equity markets |
1,038 | 1,462 | 971 | 941 | 708 | (29 | ) | 47 | 2,500 | 2,481 | 1 | |||||||||||||||||||||||||||||
Credit portfolio (a) |
326 | (53 | ) | (669 | ) | (102 | ) | (575 | ) | NM | NM | 273 | (246 | ) | NM | |||||||||||||||||||||||||
Total net revenue |
$ | 6,332 | $ | 8,319 | $ | 4,929 | $ | 7,508 | $ | 7,301 | (24 | ) | (13 | ) | $ | 14,651 | $ | 15,672 | (7 | ) | ||||||||||||||||||||
REVENUE BY REGION (a) |
||||||||||||||||||||||||||||||||||||||||
Americas |
$ | 3,935 | $ | 4,562 | $ | 2,872 | $ | 3,850 | $ | 4,118 | (14 | ) | (4 | ) | $ | 8,497 | $ | 8,434 | 1 | |||||||||||||||||||||
Europe/Middle East/Africa |
1,537 | 2,814 | 1,502 | 2,912 | 2,303 | (45 | ) | (33 | ) | 4,351 | 5,376 | (19 | ) | |||||||||||||||||||||||||||
Asia/Pacific |
860 | 943 | 555 | 746 | 880 | (9 | ) | (2 | ) | 1,803 | 1,862 | (3 | ) | |||||||||||||||||||||||||||
Total net revenue |
$ | 6,332 | $ | 8,319 | $ | 4,929 | $ | 7,508 | $ | 7,301 | (24 | ) | (13 | ) | $ | 14,651 | $ | 15,672 | (7 | ) | ||||||||||||||||||||
(a) | Treasury & Securities Services (TSS) was charged a credit reimbursement related to certain exposures managed within the Investment Bank (IB) credit portfolio on behalf of clients shared with TSS. IB recognizes this credit reimbursement in its credit portfolio business in all other income. | |
(b) | Total net revenue included tax-equivalent adjustments, predominantly due to income tax credits related to affordable housing and alternative energy investments, as well as tax-exempt income from municipal bond investments of $401 million, $403 million, $357 million, $371 million and $334 million for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and $804 million and $699 million for year-to-date 2010 and 2009, respectively. | |
(c) | The second quarter and year-to-date of 2010 excludes a payroll tax expense related to the United Kingdom Bonus Payroll Tax on certain performance bonuses awarded between December 9, 2009, and April 5, 2010, to employees operating in the U.K. |
Page 9
JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except headcount and ratio data) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (Period-end) |
||||||||||||||||||||||||||||||||||||||||
Loans (a): |
||||||||||||||||||||||||||||||||||||||||
Loans retained (b) |
$ | 54,049 | $ | 53,010 | $ | 45,544 | $ | 55,703 | $ | 64,500 | 2 | % | (16 | )% | $ | 54,049 | $ | 64,500 | (16 | )% | ||||||||||||||||||||
Loans held-for-sale & loans at fair value |
3,221 | 3,594 | 3,567 | 4,582 | 6,814 | (10 | ) | (53 | ) | 3,221 | 6,814 | (53 | ) | |||||||||||||||||||||||||||
Total loans |
57,270 | 56,604 | 49,111 | 60,285 | 71,314 | 1 | (20 | ) | 57,270 | 71,314 | (20 | ) | ||||||||||||||||||||||||||||
Equity |
40,000 | 40,000 | 33,000 | 33,000 | 33,000 | | 21 | 40,000 | 33,000 | 21 | ||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (Average) |
||||||||||||||||||||||||||||||||||||||||
Total assets |
$ | 710,005 | $ | 676,122 | $ | 674,241 | $ | 678,796 | $ | 710,825 | 5 | | $ | 693,157 | $ | 721,934 | (4 | ) | ||||||||||||||||||||||
Trading assets debt and equity instruments |
296,031 | 284,085 | 285,363 | 270,695 | 265,336 | 4 | 12 | 290,091 | 269,146 | 8 | ||||||||||||||||||||||||||||||
Trading assets derivative receivables |
65,847 | 66,151 | 72,640 | 86,651 | 100,536 | | (35 | ) | 65,998 | 112,711 | (41 | ) | ||||||||||||||||||||||||||||
Loans (a): |
||||||||||||||||||||||||||||||||||||||||
Loans retained (b) |
53,351 | 58,501 | 51,573 | 61,269 | 68,224 | (9 | ) | (22 | ) | 55,912 | 69,128 | (19 | ) | |||||||||||||||||||||||||||
Loans held-for-sale & loans at fair value |
3,530 | 3,150 | 4,158 | 4,981 | 8,934 | 12 | (60 | ) | 3,341 | 10,658 | (69 | ) | ||||||||||||||||||||||||||||
Total loans |
56,881 | 61,651 | 55,731 | 66,250 | 77,158 | (8 | ) | (26 | ) | 59,253 | 79,786 | (26 | ) | |||||||||||||||||||||||||||
Adjusted assets (c) |
527,520 | 506,635 | 519,403 | 515,718 | 531,632 | 4 | (1 | ) | 517,135 | 560,239 | (8 | ) | ||||||||||||||||||||||||||||
Equity |
40,000 | 40,000 | 33,000 | 33,000 | 33,000 | | 21 | 40,000 | 33,000 | 21 | ||||||||||||||||||||||||||||||
Headcount |
26,279 | 24,977 | 24,654 | 24,828 | 25,783 | 5 | 2 | 26,279 | 25,783 | 2 | ||||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS |
||||||||||||||||||||||||||||||||||||||||
Net charge-offs |
$ | 28 | $ | 697 | $ | 685 | $ | 750 | $ | 433 | (96 | ) | (94 | ) | $ | 725 | $ | 469 | 55 | |||||||||||||||||||||
Nonperforming assets: |
||||||||||||||||||||||||||||||||||||||||
Nonperforming loans: |
||||||||||||||||||||||||||||||||||||||||
Nonperforming loans retained (b)(d) |
1,926 | 2,459 | 3,196 | 4,782 | 3,407 | (22 | ) | (43 | ) | 1,926 | 3,407 | (43 | ) | |||||||||||||||||||||||||||
Nonperforming loans held-for-sale and loans
at fair value |
334 | 282 | 308 | 128 | 112 | 18 | 198 | 334 | 112 | 198 | ||||||||||||||||||||||||||||||
Total nonperforming loans |
2,260 | 2,741 | 3,504 | 4,910 | 3,519 | (18 | ) | (36 | ) | 2,260 | 3,519 | (36 | ) | |||||||||||||||||||||||||||
Derivative receivables |
315 | 363 | 529 | 624 | 704 | (13 | ) | (55 | ) | 315 | 704 | (55 | ) | |||||||||||||||||||||||||||
Assets acquired in loan satisfactions |
151 | 185 | 203 | 248 | 311 | (18 | ) | (51 | ) | 151 | 311 | (51 | ) | |||||||||||||||||||||||||||
Total nonperforming assets |
2,726 | 3,289 | 4,236 | 5,782 | 4,534 | (17 | ) | (40 | ) | 2,726 | 4,534 | (40 | ) | |||||||||||||||||||||||||||
Allowance for credit losses: |
||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses |
2,149 | 2,601 | 3,756 | 4,703 | 5,101 | (17 | ) | (58 | ) | 2,149 | 5,101 | (58 | ) | |||||||||||||||||||||||||||
Allowance for lending-related commitments |
564 | 482 | 485 | 401 | 351 | 17 | 61 | 564 | 351 | 61 | ||||||||||||||||||||||||||||||
Total allowance for credit losses |
2,713 | 3,083 | 4,241 | 5,104 | 5,452 | (12 | ) | (50 | ) | 2,713 | 5,452 | (50 | ) | |||||||||||||||||||||||||||
Net charge-off rate (b)(e) |
0.21 | % | 4.83 | % | 5.27 | % | 4.86 | % | 2.55 | % | 2.61 | % | 1.37 | % | ||||||||||||||||||||||||||
Allow. for loan losses to period-end loans retained (b)(e) |
3.98 | 4.91 | 8.25 | 8.44 | 7.91 | 3.98 | 7.91 | |||||||||||||||||||||||||||||||||
Allow. for loan losses to average loans retained (b)(e) |
4.03 | 4.45 | 7.28 | 7.68 | 7.48 | 3.84 | 7.38 | |||||||||||||||||||||||||||||||||
Allow. for loan losses to nonperforming loans retained (b)(d)(e) |
112 | 106 | 118 | 98 | 150 | 112 | 150 | |||||||||||||||||||||||||||||||||
Nonperforming loans to total period-end loans |
3.95 | 4.84 | 7.13 | 8.14 | 4.93 | 3.95 | 4.93 | |||||||||||||||||||||||||||||||||
Nonperforming loans to total average loans |
3.97 | 4.45 | 6.29 | 7.41 | 4.56 | 3.81 | 4.41 |
(a) | Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. For further details regarding the Firms application and impact of the new guidance, see footnote (a) on page 3. | |
(b) | Loans retained included credit portfolio loans, leveraged leases and other accrual loans, and excluded loans held-for-sale and loans accounted for at fair value. | |
(c) | Adjusted assets, a non-GAAP financial measure, is presented to assist the reader in comparing IBs asset and capital levels to other investment banks in the securities industry. For further discussion of adjusted assets, see page 42. | |
(d) | Allowance for loan losses of $617 million, $811 million, $1.3 billion, $1.8 billion and $1.6 billion were held against these non-performing loans at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively. | |
(e) | Loans held-for-sale and loans at fair value were excluded when calculating the allowance coverage and net charge-off rate. |
Page 10
JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio and rankings data) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
MARKET RISK AVERAGE TRADING AND CREDIT |
||||||||||||||||||||||||||||||||||||||||
PORTFOLIO VAR - 95% CONFIDENCE LEVEL |
||||||||||||||||||||||||||||||||||||||||
Trading activities: |
||||||||||||||||||||||||||||||||||||||||
Fixed income |
$ | 64 | $ | 69 | $ | 121 | $ | 182 | $ | 179 | (7 | )% | (64 | )% | $ | 66 | $ | 168 | (61 | ) % | ||||||||||||||||||||
Foreign exchange |
10 | 13 | 14 | 19 | 16 | (23 | ) | (38 | ) | 12 | 19 | (37 | ) | |||||||||||||||||||||||||||
Equities |
20 | 24 | 21 | 19 | 50 | (17 | ) | (60 | ) | 22 | 73 | (70 | ) | |||||||||||||||||||||||||||
Commodities and other |
20 | 15 | 17 | 23 | 22 | 33 | (9 | ) | 18 | 21 | (14 | ) | ||||||||||||||||||||||||||||
Diversification (a) |
(42 | ) | (49 | ) | (62 | ) | (97 | ) | (97 | ) | 14 | 57 | (46 | ) | (101 | ) | 54 | |||||||||||||||||||||||
Total trading VaR (b) |
72 | 72 | 111 | 146 | 170 | | (58 | ) | 72 | 180 | (60 | ) | ||||||||||||||||||||||||||||
Credit portfolio VaR (c) |
27 | 19 | 24 | 29 | 68 | 42 | (60 | ) | 23 | 77 | (70 | ) | ||||||||||||||||||||||||||||
Diversification (a) |
(9 | ) | (9 | ) | (11 | ) | (32 | ) | (60 | ) | | 85 | (9 | ) | (62 | ) | 85 | |||||||||||||||||||||||
Total trading and credit portfolio VaR |
$ | 90 | $ | 82 | $ | 124 | $ | 143 | $ | 178 | 10 | (49 | ) | $ | 86 | $ | 195 | (56 | ) | |||||||||||||||||||||
June 30, 2010 YTD | Full Year 2009 | |||||||||||||||
Market | Market | |||||||||||||||
Share | Rankings | Share | Rankings | |||||||||||||
MARKET SHARES AND RANKINGS (d) |
||||||||||||||||
Global Investment Banking Fees (e) |
8 | % | #1 | 9 | % | #1 | ||||||||||
Global debt, equity and equity-related |
7 | % | #1 | 9 | % | #1 | ||||||||||
Global syndicated loans |
10 | % | #1 | 8 | % | #1 | ||||||||||
Global long-term debt (f) |
7 | % | #2 | 8 | % | #1 | ||||||||||
Global equity and equity-related (g) |
8 | % | #1 | 12 | % | #1 | ||||||||||
Global announced M&A (h) |
14 | % | #4 | 24 | % | #3 | ||||||||||
U.S. debt, equity and equity-related |
12 | % | #1 | 15 | % | #1 | ||||||||||
U.S. syndicated loans |
21 | % | #2 | 22 | % | #1 | ||||||||||
U.S. long-term debt (f) |
11 | % | #2 | 14 | % | #1 | ||||||||||
U.S. equity and equity-related |
16 | % | #1 | 16 | % | #2 | ||||||||||
U.S. announced M&A (h) |
22 | % | #3 | 36 | % | #2 |
(a) | Average VaRs were less than the sum of the VaRs of their market risk components, which was due to risk offsets resulting from portfolio diversification. The diversification effect reflected the fact that the risks were not perfectly correlated. The risk of a portfolio of positions is usually less than the sum of the risks of the positions themselves. | |
(b) | IB Trading VaR includes predominantly all trading activities in IB, as well as syndicated lending facilities that the Firm intends to distribute; however, particular risk parameters of certain products are not fully captured, such as correlation risk. IB Trading VaR does not include the debit valuation adjustments (DVA) taken on derivative and structured liabilities to reflect the credit quality of the Firm. | |
(c) | Credit portfolio VaR includes the derivative credit valuation adjustments (CVA), hedges of the CVA and mark-to-market (MTM) hedges of the retained loan portfolio, which are all reported in principal transactions revenue. This VaR does not include the retained loan portfolio. | |
(d) | Source: Dealogic. Global Investment Banking fees reflects the ranking of fees and market share. The remaining rankings reflect transaction volume and market share. | |
(e) | Global IB fees exclude money market, short term debt and shelf deals. | |
(f) | Long-term debt tables include investment-grade, high-yield, supranationals, sovereigns, agencies, covered bonds, asset-backed securities and mortgage-backed securities, and excludes money market, short-term debt, and U.S.municipal securities. | |
(g) | Equity and equity-related rankings include rights offerings and Chinese A-Shares. | |
(h) | Global announced M&A is based upon transaction value at announcement; all other rankings are based upon transaction proceeds, with full credit to each book manager/equal if joint. Because of joint assignments, market share of all participants will add up to more than 100%. M&A for year-to-date 2010 and full-year 2009 reflects the removal of any withdrawn transactions. U.S. announced M&A represents any U.S. involvement ranking. |
Page 11
JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS (in millions, except ratio and headcount data) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
INCOME STATEMENT |
||||||||||||||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||||||||||||||
Lending- and deposit-related fees |
$ | 780 | $ | 841 | $ | 972 | $ | 1,046 | $ | 1,003 | (7 | ) % | (22 | ) % | $ | 1,621 | $ | 1,951 | (17 | ) % | ||||||||||||||||||||
Asset management, administration and commissions |
433 | 452 | 406 | 408 | 425 | (4 | ) | 2 | 885 | 860 | 3 | |||||||||||||||||||||||||||||
Mortgage fees and related income |
886 | 655 | 481 | 873 | 807 | 35 | 10 | 1,541 | 2,440 | (37 | ) | |||||||||||||||||||||||||||||
Credit card income |
480 | 450 | 441 | 416 | 411 | 7 | 17 | 930 | 778 | 20 | ||||||||||||||||||||||||||||||
Other income |
413 | 354 | 299 | 321 | 294 | 17 | 40 | 767 | 508 | 51 | ||||||||||||||||||||||||||||||
Noninterest revenue |
2,992 | 2,752 | 2,599 | 3,064 | 2,940 | 9 | 2 | 5,744 | 6,537 | (12 | ) | |||||||||||||||||||||||||||||
Net interest income |
4,817 | 5,024 | 5,070 | 5,154 | 5,030 | (4 | ) | (4 | ) | 9,841 | 10,268 | (4 | ) | |||||||||||||||||||||||||||
TOTAL NET REVENUE |
7,809 | 7,776 | 7,669 | 8,218 | 7,970 | | (2 | ) | 15,585 | 16,805 | (7 | ) | ||||||||||||||||||||||||||||
Provision for credit losses |
1,715 | 3,733 | 4,229 | 3,988 | 3,846 | (54 | ) | (55 | ) | 5,448 | 7,723 | (29 | ) | |||||||||||||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||||||||||||||
Compensation expense |
1,842 | 1,770 | 1,722 | 1,728 | 1,631 | 4 | 13 | 3,612 | 3,262 | 11 | ||||||||||||||||||||||||||||||
Noncompensation expense |
2,369 | 2,402 | 2,499 | 2,385 | 2,365 | (1 | ) | | 4,771 | 4,822 | (1 | ) | ||||||||||||||||||||||||||||
Amortization of intangibles |
70 | 70 | 81 | 83 | 83 | | (16 | ) | 140 | 166 | (16 | ) | ||||||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE |
4,281 | 4,242 | 4,302 | 4,196 | 4,079 | 1 | 5 | 8,523 | 8,250 | 3 | ||||||||||||||||||||||||||||||
Income/(loss) before income tax expense (benefit) |
1,813 | (199 | ) | (862 | ) | 34 | 45 | NM | NM | 1,614 | 832 | 94 | ||||||||||||||||||||||||||||
Income tax expense/(benefit) |
771 | (68 | ) | (463 | ) | 27 | 30 | NM | NM | 703 | 343 | 105 | ||||||||||||||||||||||||||||
NET INCOME/(LOSS) |
$ | 1,042 | $ | (131 | ) | $ | (399 | ) | $ | 7 | $ | 15 | NM | NM | $ | 911 | $ | 489 | 86 | |||||||||||||||||||||
FINANCIAL RATIOS |
||||||||||||||||||||||||||||||||||||||||
ROE |
15 | % | (2 | ) % | (6 | ) % | | % | | % | 7 | % | 4 | % | ||||||||||||||||||||||||||
Overhead ratio |
55 | 55 | 56 | 51 | 51 | 55 | 49 | |||||||||||||||||||||||||||||||||
Overhead ratio excluding core deposit intangibles (a) |
54 | 54 | 55 | 50 | 50 | 54 | 48 | |||||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (Period-end) |
||||||||||||||||||||||||||||||||||||||||
Assets |
$ | 375,329 | $ | 382,475 | $ | 387,269 | $ | 397,673 | $ | 399,916 | (2 | ) | (6 | ) | $ | 375,329 | $ | 399,916 | (6 | ) | ||||||||||||||||||||
Loans: |
||||||||||||||||||||||||||||||||||||||||
Loans retained |
330,329 | 339,002 | 340,332 | 346,765 | 353,934 | (3 | ) | (7 | ) | 330,329 | 353,934 | (7 | ) | |||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value (b) |
12,599 | 11,296 | 14,612 | 14,303 | 13,192 | 12 | (4 | ) | 12,599 | 13,192 | (4 | ) | ||||||||||||||||||||||||||||
Total loans |
342,928 | 350,298 | 354,944 | 361,068 | 367,126 | (2 | ) | (7 | ) | 342,928 | 367,126 | (7 | ) | |||||||||||||||||||||||||||
Deposits |
359,974 | 362,470 | 357,463 | 361,046 | 371,241 | (1 | ) | (3 | ) | 359,974 | 371,241 | (3 | ) | |||||||||||||||||||||||||||
Equity |
28,000 | 28,000 | 25,000 | 25,000 | 25,000 | | 12 | 28,000 | 25,000 | 12 | ||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (Average) |
||||||||||||||||||||||||||||||||||||||||
Assets |
381,906 | 393,867 | 395,045 | 401,620 | 410,228 | (3 | ) | (7 | ) | 387,854 | 416,813 | (7 | ) | |||||||||||||||||||||||||||
Loans: |
||||||||||||||||||||||||||||||||||||||||
Loans retained |
335,308 | 342,997 | 343,411 | 349,762 | 359,372 | (2 | ) | (7 | ) | 339,131 | 363,127 | (7 | ) | |||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value (b) |
14,426 | 17,055 | 17,670 | 19,025 | 19,043 | (15 | ) | (24 | ) | 15,734 | 17,792 | (12 | ) | |||||||||||||||||||||||||||
Total loans |
349,734 | 360,052 | 361,081 | 368,787 | 378,415 | (3 | ) | (8 | ) | 354,865 | 380,919 | (7 | ) | |||||||||||||||||||||||||||
Deposits |
362,010 | 356,934 | 356,464 | 366,944 | 377,259 | 1 | (4 | ) | 359,486 | 373,788 | (4 | ) | ||||||||||||||||||||||||||||
Equity |
28,000 | 28,000 | 25,000 | 25,000 | 25,000 | | 12 | 28,000 | 25,000 | 12 | ||||||||||||||||||||||||||||||
Headcount |
116,879 | 112,616 | 108,971 | 106,951 | 103,733 | 4 | 13 | 116,879 | 103,733 | 13 |
(a) | Retail Financial Services uses the overhead ratio (excluding the amortization of core deposit intangibles (CDI)), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in the overhead ratio calculation would result in a higher overhead ratio in the earlier years and a lower overhead ratio in later years. This method would therefore result in an improving overhead ratio over time, all things remaining equal. The non-GAAP ratio excludes Retail Bankings CDI amortization expense related to prior business combination transactions of $69 million, $70 million, $80 million, $83 million and $82 million for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and $139 million and $165 million for year-to-date 2010 and 2009, respectively. | |
(b) | Loans at fair value consist of prime mortgages originated with the intent to sell that are accounted for at fair value and classified as trading assets on the Consolidated Balance Sheets. These loans totaled $12.2 billion, $8.4 billion, $12.5 billion, $12.8 billion and $11.3 billion at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively. Average balances of these loans totaled $12.5 billion, $14.2 billion, $16.0 billion, $17.7 billion and $16.2 billion for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and $13.3 billion and $14.9 billion for year-to-date 2010 and 2009, respectively. |
Page 12
JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS |
||||||||||||||||||||||||||||||||||||||||
Net charge-offs |
$ | 1,761 | $ | 2,438 | $ | 2,738 | $ | 2,550 | $ | 2,649 | (28 | ) % | (34 | ) % | $ | 4,199 | $ | 4,825 | (13 | ) % | ||||||||||||||||||||
Nonperforming loans: |
||||||||||||||||||||||||||||||||||||||||
Nonperforming loans retained |
10,457 | 10,769 | 10,611 | 10,091 | 8,792 | (3 | ) | 19 | 10,457 | 8,792 | 19 | |||||||||||||||||||||||||||||
Nonperforming loans held-for-sale and loans
at fair value |
176 | 217 | 234 | 242 | 203 | (19 | ) | (13 | ) | 176 | 203 | (13 | ) | |||||||||||||||||||||||||||
Total nonperforming loans (a) (b) (c) |
10,633 | 10,986 | 10,845 | 10,333 | 8,995 | (3 | ) | 18 | 10,633 | 8,995 | 18 | |||||||||||||||||||||||||||||
Nonperforming assets (a) (b) (c) |
11,907 | 12,191 | 12,098 | 11,883 | 10,554 | (2 | ) | 13 | 11,907 | 10,554 | 13 | |||||||||||||||||||||||||||||
Allowance for loan losses |
16,152 | 16,200 | 14,776 | 13,286 | 11,832 | | 37 | 16,152 | 11,832 | 37 | ||||||||||||||||||||||||||||||
Net charge-off rate (d) |
2.11 | % | 2.88 | % | 3.16 | % | 2.89 | % | 2.96 | % | 2.50 | % | 2.68 | % | ||||||||||||||||||||||||||
Net charge-off rate excluding purchased credit-impaired
loans (d) (e) |
2.75 | 3.76 | 4.16 | 3.81 | 3.89 | 3.26 | 3.53 | |||||||||||||||||||||||||||||||||
Allowance for loan losses to ending loans retained (d) |
4.89 | 4.78 | 4.34 | 3.83 | 3.34 | 4.89 | 3.34 | |||||||||||||||||||||||||||||||||
Allowance for loan losses to ending loans retained
excluding purchased credit-impaired loans (d) (e) |
5.26 | 5.16 | 5.09 | 4.63 | 4.41 | 5.26 | 4.41 | |||||||||||||||||||||||||||||||||
Allowance for loan losses to nonperforming loans
retained (a) (d) (e) |
128 | 124 | 124 | 121 | 135 | 128 | 135 | |||||||||||||||||||||||||||||||||
Nonperforming loans to total loans |
3.10 | 3.14 | 3.06 | 2.86 | 2.45 | 3.10 | 2.45 | |||||||||||||||||||||||||||||||||
Nonperforming loans to total loans excluding purchased
credit-impaired loans (a) |
4.00 | 4.05 | 3.96 | 3.72 | 3.19 | 4.00 | 3.19 |
(a) | Excludes purchased credit-impaired loans that were acquired as part of the Washington Mutual transaction. These loans are accounted for on a pool basis and the pools are considered to be performing. | |
(b) | Certain of these loans are classified as trading assets on the Consolidated Balance Sheets. | |
(c) | Nonperforming loans and assets exclude: (1) nonaccruing mortgage loans insured by U.S. government agencies of $10.1 billion, $10.5 billion, $9.0 billion, $7.0 billion and $4.2 billion at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively; (2) real estate owned insured by U.S. government agencies of $1.4 billion, $707 million, $579 million, $579 million and $508 million at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively; and (3) student loans that are 90 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program, of $447 million, $581 million, $542 million, $511 million and $473 million at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively. These amounts are excluded as reimbursement is proceeding normally. | |
(d) | Loans held-for-sale and loans accounted for at fair value were excluded when calculating the allowance coverage ratio and the net charge-off rate. | |
(e) | Excludes the impact of purchased credit-impaired loans that were acquired as part of the Washington Mutual transaction. These loans were accounted for at fair value on the acquisition date, which incorporated managements estimate, as of that date, of credit losses over the remaining life of the portfolio. An allowance for loan losses of $2.8 billion, $2.8 billion, $1.6 billion and $1.1 billion was recorded for these loans at June 30, 2010, March 31, 2010, December 31, 2009 and September 30, 2009, respectively, which has also been excluded from applicable ratios. No allowance for loan losses was recorded at June 30, 2009. To date, no charge-offs have been recorded for these loans. |
Page 13
JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
RETAIL BANKING |
||||||||||||||||||||||||||||||||||||||||
Noninterest revenue |
$ | 1,684 | $ | 1,702 | $ | 1,804 | $ | 1,844 | $ | 1,803 | (1 | ) % | (7 | ) % | $ | 3,386 | $ | 3,521 | (4 | ) % | ||||||||||||||||||||
Net interest income |
2,712 | 2,635 | 2,716 | 2,732 | 2,719 | 3 | | 5,347 | 5,333 | | ||||||||||||||||||||||||||||||
Total net revenue |
4,396 | 4,337 | 4,520 | 4,576 | 4,522 | 1 | (3 | ) | 8,733 | 8,854 | (1 | ) | ||||||||||||||||||||||||||||
Provision for credit losses |
168 | 191 | 248 | 208 | 361 | (12 | ) | (53 | ) | 359 | 686 | (48 | ) | |||||||||||||||||||||||||||
Noninterest expense |
2,633 | 2,577 | 2,574 | 2,646 | 2,557 | 2 | 3 | 5,210 | 5,137 | 1 | ||||||||||||||||||||||||||||||
Income before income tax expense |
1,595 | 1,569 | 1,698 | 1,722 | 1,604 | 2 | (1 | ) | 3,164 | 3,031 | 4 | |||||||||||||||||||||||||||||
Net income |
$ | 914 | $ | 898 | $ | 1,027 | $ | 1,043 | $ | 970 | 2 | (6 | ) | $ | 1,812 | $ | 1,833 | (1 | ) | |||||||||||||||||||||
Overhead ratio |
60 | % | 59 | % | 57 | % | 58 | % | 57 | % | 60 | % | 58 | % | ||||||||||||||||||||||||||
Overhead ratio excluding core deposit intangibles (a) |
58 | 58 | 55 | 56 | 55 | 58 | 56 | |||||||||||||||||||||||||||||||||
BUSINESS METRICS (in billions) |
||||||||||||||||||||||||||||||||||||||||
Business banking origination volume |
$ | 1.2 | $ | 0.9 | $ | 0.7 | $ | 0.5 | $ | 0.6 | 33 | 100 | $ | 2.1 | $ | 1.1 | 91 | |||||||||||||||||||||||
End-of-period loans owned |
16.6 | 16.8 | 17.0 | 17.4 | 17.8 | (1 | ) | (7 | ) | 16.6 | 17.8 | (7 | ) | |||||||||||||||||||||||||||
End-of-period deposits: |
||||||||||||||||||||||||||||||||||||||||
Checking |
123.5 | 123.8 | 121.9 | 115.5 | 114.1 | | 8 | 123.5 | 114.1 | 8 | ||||||||||||||||||||||||||||||
Savings |
161.8 | 163.4 | 153.4 | 151.6 | 150.4 | (1 | ) | 8 | 161.8 | 150.4 | 8 | |||||||||||||||||||||||||||||
Time and other |
50.5 | 53.2 | 58.0 | 66.6 | 78.9 | (5 | ) | (36 | ) | 50.5 | 78.9 | (36 | ) | |||||||||||||||||||||||||||
Total end-of-period deposits |
335.8 | 340.4 | 333.3 | 333.7 | 343.4 | (1 | ) | (2 | ) | 335.8 | 343.4 | (2 | ) | |||||||||||||||||||||||||||
Average loans owned |
16.7 | 16.9 | 17.2 | 17.7 | 18.0 | (1 | ) | (7 | ) | 16.8 | 18.2 | (8 | ) | |||||||||||||||||||||||||||
Average deposits: |
||||||||||||||||||||||||||||||||||||||||
Checking |
123.6 | 119.7 | 116.4 | 114.0 | 114.2 | 3 | 8 | 121.7 | 111.8 | 9 | ||||||||||||||||||||||||||||||
Savings |
162.8 | 158.6 | 153.1 | 151.2 | 151.2 | 3 | 8 | 160.7 | 149.6 | 7 | ||||||||||||||||||||||||||||||
Time and other |
51.4 | 55.6 | 60.3 | 74.4 | 82.7 | (8 | ) | (38 | ) | 53.5 | 85.6 | (38 | ) | |||||||||||||||||||||||||||
Total average deposits |
337.8 | 333.9 | 329.8 | 339.6 | 348.1 | 1 | (3 | ) | 335.9 | 347.0 | (3 | ) | ||||||||||||||||||||||||||||
Deposit margin |
3.05 | % | 3.02 | % | 3.06 | % | 2.99 | % | 2.92 | % | 3.03 | % | 2.89 | % | ||||||||||||||||||||||||||
Average assets |
$ | 28.4 | $ | 28.9 | $ | 28.2 | $ | 28.1 | $ | 29.1 | (2 | ) | (2 | ) | $ | 28.7 | $ | 29.6 | (3 | ) | ||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS |
||||||||||||||||||||||||||||||||||||||||
Net charge-offs |
168 | 191 | 248 | 208 | 211 | (12 | ) | (20 | ) | 359 | 386 | (7 | ) | |||||||||||||||||||||||||||
Net charge-off rate |
4.04 | % | 4.58 | % | 5.72 | % | 4.66 | % | 4.70 | % | 4.31 | % | 4.28 | % | ||||||||||||||||||||||||||
Nonperforming assets |
$ | 920 | $ | 872 | $ | 839 | $ | 816 | $ | 686 | 6 | 34 | $ | 920 | $ | 686 | 34 | |||||||||||||||||||||||
RETAIL BRANCH BUSINESS METRICS |
||||||||||||||||||||||||||||||||||||||||
Investment sales volume |
5,756 | 5,956 | 5,851 | 6,243 | 5,292 | (3 | ) | 9 | 11,712 | 9,690 | 21 | |||||||||||||||||||||||||||||
Number of: |
||||||||||||||||||||||||||||||||||||||||
Branches |
5,159 | 5,155 | 5,154 | 5,126 | 5,203 | | (1 | ) | 5,159 | 5,203 | (1 | ) | ||||||||||||||||||||||||||||
ATMs |
15,654 | 15,549 | 15,406 | 15,038 | 14,144 | 1 | 11 | 15,654 | 14,144 | 11 | ||||||||||||||||||||||||||||||
Personal bankers |
20,170 | 19,003 | 17,991 | 16,941 | 15,959 | 6 | 26 | 20,170 | 15,959 | 26 | ||||||||||||||||||||||||||||||
Sales specialists |
6,785 | 6,315 | 5,912 | 5,530 | 5,485 | 7 | 24 | 6,785 | 5,485 | 24 | ||||||||||||||||||||||||||||||
Active online customers (in thousands) |
16,584 | 16,208 | 15,424 | 13,852 | 13,930 | 2 | 19 | 16,584 | 13,930 | 19 | ||||||||||||||||||||||||||||||
Checking accounts (in thousands) |
26,351 | 25,830 | 25,712 | 25,546 | 25,252 | 2 | 4 | 26,351 | 25,252 | 4 |
(a) | Retail Banking uses the overhead ratio (excluding the amortization of CDI), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in the overhead ratio calculation would result in a higher overhead ratio in the earlier years and a lower overhead ratio in later years. This method would therefore result in an improving overhead ratio over time, all things remaining equal. The non-GAAP ratio excludes Retail Bankings CDI amortization expense related to prior business combination transactions of $69 million, $70 million, $80 million, $83 million and $82 million for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and $139 million and $165 million for year-to-date 2010 and 2009, respectively. |
Page 14
JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
MORTGAGE BANKING & OTHER CONSUMER LENDING |
||||||||||||||||||||||||||||||||||||||||
Noninterest revenue (a) |
$ | 1,256 | $ | 1,018 | $ | 801 | $ | 1,201 | $ | 1,134 | 23 | % | 11 | % | $ | 2,274 | $ | 3,055 | (26 | )% | ||||||||||||||||||||
Net interest income |
792 | 893 | 802 | 834 | 721 | (11 | ) | 10 | 1,685 | 1,529 | 10 | |||||||||||||||||||||||||||||
Total net revenue |
2,048 | 1,911 | 1,603 | 2,035 | 1,855 | 7 | 10 | 3,959 | 4,584 | (14 | ) | |||||||||||||||||||||||||||||
Provision for credit losses |
175 | 217 | 242 | 222 | 366 | (19 | ) | (52 | ) | 392 | 771 | (49 | ) | |||||||||||||||||||||||||||
Noninterest expense |
1,243 | 1,246 | 1,163 | 1,139 | 1,105 | | 12 | 2,489 | 2,242 | 11 | ||||||||||||||||||||||||||||||
Income before income tax expense |
630 | 448 | 198 | 674 | 384 | 41 | 64 | 1,078 | 1,571 | (31 | ) | |||||||||||||||||||||||||||||
Net income (a) |
$ | 364 | $ | 257 | $ | 266 | $ | 412 | $ | 235 | 42 | 55 | $ | 621 | $ | 965 | (36 | ) | ||||||||||||||||||||||
Overhead ratio |
61 | % | 65 | % | 73 | % | 56 | % | 60 | % | 63 | % | 49 | % | ||||||||||||||||||||||||||
BUSINESS METRICS (in billions) |
||||||||||||||||||||||||||||||||||||||||
End-of-period loans owned: |
||||||||||||||||||||||||||||||||||||||||
Auto loans |
$ | 47.5 | $ | 47.4 | $ | 46.0 | $ | 44.3 | $ | 42.9 | | 11 | $ | 47.5 | $ | 42.9 | 11 | |||||||||||||||||||||||
Mortgage (b) |
13.2 | 13.7 | 11.9 | 10.1 | 8.9 | (4 | ) | 48 | 13.2 | 8.9 | 48 | |||||||||||||||||||||||||||||
Student loans and other |
15.1 | 17.4 | 15.8 | 15.6 | 15.7 | (13 | ) | (4 | ) | 15.1 | 15.7 | (4 | ) | |||||||||||||||||||||||||||
Total end-of-period loans owned |
75.8 | 78.5 | 73.7 | 70.0 | 67.5 | (3 | ) | 12 | 75.8 | 67.5 | 12 | |||||||||||||||||||||||||||||
Average loans owned: |
||||||||||||||||||||||||||||||||||||||||
Auto loans |
47.5 | 46.9 | 45.3 | 43.3 | 43.1 | 1 | 10 | 47.2 | 42.8 | 10 | ||||||||||||||||||||||||||||||
Mortgage (b) |
13.6 | 12.5 | 10.6 | 8.9 | 8.4 | 9 | 62 | 13.0 | 8.0 | 63 | ||||||||||||||||||||||||||||||
Student loans and other |
16.7 | 18.4 | 15.6 | 15.3 | 16.8 | (9 | ) | (1 | ) | 17.6 | 17.2 | 2 | ||||||||||||||||||||||||||||
Total average loans owned (c) |
77.8 | 77.8 | 71.5 | 67.5 | 68.3 | | 14 | 77.8 | 68.0 | 14 | ||||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS |
||||||||||||||||||||||||||||||||||||||||
Net charge-offs: |
||||||||||||||||||||||||||||||||||||||||
Auto loans |
58 | 102 | 148 | 159 | 146 | (43 | ) | (60 | ) | 160 | 320 | (50 | ) | |||||||||||||||||||||||||||
Mortgage |
13 | 6 | | 7 | 2 | 117 | NM | 19 | 7 | 171 | ||||||||||||||||||||||||||||||
Student loans and other |
150 | 64 | 92 | 60 | 101 | 134 | 49 | 214 | 135 | 59 | ||||||||||||||||||||||||||||||
Total net charge-offs |
221 | 172 | 240 | 226 | 249 | 28 | (11 | ) | 393 | 462 | (15 | ) | ||||||||||||||||||||||||||||
Net charge-off rate: |
||||||||||||||||||||||||||||||||||||||||
Auto loans |
0.49 | % | 0.88 | % | 1.30 | % | 1.46 | % | 1.36 | % | 0.68 | % | 1.51 | % | ||||||||||||||||||||||||||
Mortgage |
0.39 | 0.20 | | 0.32 | 0.10 | 0.30 | 0.19 | |||||||||||||||||||||||||||||||||
Student loans and other |
4.04 | 1.64 | 2.59 | 1.66 | 2.79 | 2.84 | 1.84 | |||||||||||||||||||||||||||||||||
Total net charge-off rate (c) |
1.17 | 0.93 | 1.36 | 1.35 | 1.52 | 1.05 | 1.43 | |||||||||||||||||||||||||||||||||
30+ day delinquency rate (d) (e) |
1.42 | 1.47 | 1.75 | 1.76 | 1.80 | 1.42 | 1.80 | |||||||||||||||||||||||||||||||||
Nonperforming assets (f) |
$ | 866 | $ | 1,006 | $ | 912 | $ | 872 | $ | 783 | (14 | ) | 11 | $ | 866 | $ | 783 | 11 |
(a) | Losses related to the repurchase of previously-sold loans are recorded as a reduction of production revenue. These losses totaled $667 million, $432 million, $672 million, $465 million and $255 million for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and $1.1 billion and $475 million for year-to-date 2010 and 2009, respectively. The losses resulted in a negative impact on net income of $388 million, $252 million, $413 million, $286 million and $157 million for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and $640 million and $292 million for year-to-date 2010 and 2009, respectively. | |
(b) | Predominantly represents prime loans repurchased from Government National Mortgage Association (Ginnie Mae) pools, which are insured by U.S. government agencies. | |
(c) | Total average loans owned includes loans held-for-sale of $1.9 billion, $2.9 billion, $1.7 billion, $1.3 billion and $2.8 billion for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and $2.6 billion and $2.9 billion for year-to-date 2010 and 2009, respectively. These amounts are excluded when calculating the net charge-off rate. | |
(d) | Excludes mortgage loans that are insured by U.S. government agencies of $10.9 billion, $11.2 billion, $9.7 billion, $7.7 billion and $5.1 billion at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively. These amounts are excluded as reimbursement is proceeding normally. | |
(e) | Excludes loans that are 30 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program, of $988 million, $965 million, $942 million, $903 million and $854 million at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively. These amounts are excluded as reimbursement is proceeding normally. | |
(f) | Nonperforming loans and assets exclude: (1) nonaccruing mortgage loans insured by U.S. government agencies of $10.1 billion, $10.5 billion, $9.0 billion, $7.0 billion and $4.2 billion at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively; (2) real estate owned insured by U.S. government agencies of $1.4 billion, $707 million, $579 million, $579 million and $508 million at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively; and (3) student loans that are 90 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program, of $447 million, $581 million, $542 million, $511 million and $473 million at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively. These amounts are excluded as reimbursement is proceeding normally. |
Page 15
JPMORGAN CHASE & CO. | ||
RETAIL FINANCIAL SERVICES | ||
FINANCIAL HIGHLIGHTS, CONTINUED | ||
(in billions, except ratio data and where otherwise noted) |
QUARTERLY TRENDS | YEAR-TO-DATE | ||||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | ||||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | ||||||||||||||||||||||||||||||||
MORTGAGE BANKING & OTHER CONSUMER
LENDING (continued) |
|||||||||||||||||||||||||||||||||||||||||
Origination volume: |
|||||||||||||||||||||||||||||||||||||||||
Mortgage origination volume by channel |
|||||||||||||||||||||||||||||||||||||||||
Retail |
$ | 15.3 | $ | 11.4 | $ | 12.3 | $ | 13.3 | $ | 14.7 | 34 | % | 4 | % | $ | 26.7 | $ | 28.3 | (6 | )% | |||||||||||||||||||||
Wholesale (a) |
0.4 | 0.4 | 0.6 | 0.7 | 0.7 | | (43 | ) | 0.8 | 2.3 | (65 | ) | |||||||||||||||||||||||||||||
Correspondent (a) |
14.7 | 16.0 | 20.0 | 21.1 | 21.9 | (8 | ) | (33 | ) | 30.7 | 39.9 | (23 | ) | ||||||||||||||||||||||||||||
CNT (negotiated transactions) |
1.8 | 3.9 | 1.9 | 2.0 | 3.8 | (54 | ) | (53 | ) | 5.7 | 8.3 | (31 | ) | ||||||||||||||||||||||||||||
Total mortgage origination volume |
32.2 | 31.7 | 34.8 | 37.1 | 41.1 | 2 | (22 | ) | 63.9 | 78.8 | (19 | ) | |||||||||||||||||||||||||||||
Student loans |
0.1 | 1.6 | 0.6 | 1.5 | 0.4 | (94 | ) | (75 | ) | 1.7 | 2.1 | (19 | ) | ||||||||||||||||||||||||||||
Auto |
5.8 | 6.3 | 5.9 | 6.9 | 5.3 | (8 | ) | 9 | 12.1 | 10.9 | 11 | ||||||||||||||||||||||||||||||
Application volume: |
|||||||||||||||||||||||||||||||||||||||||
Mortgage application volume by channel |
|||||||||||||||||||||||||||||||||||||||||
Retail |
27.8 | 20.3 | 17.4 | 17.8 | 23.0 | 37 | 21 | 48.1 | 55.7 | (14 | ) | ||||||||||||||||||||||||||||||
Wholesale (a) |
0.6 | 0.8 | 0.7 | 1.1 | 1.3 | (25 | ) | (54 | ) | 1.4 | 3.1 | (55 | ) | ||||||||||||||||||||||||||||
Correspondent (a) |
23.5 | 18.2 | 25.3 | 26.6 | 29.7 | 29 | (21 | ) | 41.7 | 58.9 | (29 | ) | |||||||||||||||||||||||||||||
Total mortgage application volume |
51.9 | 39.3 | 43.4 | 45.5 | 54.0 | 32 | (4 | ) | 91.2 | 117.7 | (23 | ) | |||||||||||||||||||||||||||||
Average mortgage loans held-for-sale and loans
at fair value (b) |
12.6 | 14.5 | 16.2 | 18.0 | 16.7 | (13 | ) | (25 | ) | 13.5 | 15.3 | (12 | ) | ||||||||||||||||||||||||||||
Average assets |
123.2 | 124.8 | 119.5 | 115.2 | 111.6 | (1 | ) | 10 | 124.0 | 112.5 | 10 | ||||||||||||||||||||||||||||||
Third-party mortgage loans serviced (ending) |
1,055.2 | 1,075.0 | 1,082.1 | 1,098.9 | 1,117.5 | (2 | ) | (6 | ) | 1,055.2 | 1,117.5 | (6 | ) | ||||||||||||||||||||||||||||
Third-party mortgage loans serviced (average) |
1,063.7 | 1,076.4 | 1,088.8 | 1,104.4 | 1,128.1 | (1 | ) | (6 | ) | 1,070.1 | 1,141.6 | (6 | ) | ||||||||||||||||||||||||||||
MSR net carrying value (ending) |
11.8 | 15.5 | 15.5 | 13.6 | 14.6 | (24 | ) | (19 | ) | 11.8 | 14.6 | (19 | ) | ||||||||||||||||||||||||||||
Ratio of MSR net carrying value (ending) to third-party
mortgage loans serviced (ending) |
1.12 | % | 1.44 | % | 1.43 | % | 1.24 | % | 1.31 | % | 1.12 | % | 1.31 | % | |||||||||||||||||||||||||||
SUPPLEMENTAL MORTGAGE FEES AND
RELATED INCOME DETAILS (in millions) |
|||||||||||||||||||||||||||||||||||||||||
Production revenue |
$ | 9 | $ | 1 | $ | (192 | ) | $ | (70 | ) | $ | 284 | NM | (97 | ) | $ | 10 | $ | 765 | (99 | ) | ||||||||||||||||||||
Net mortgage servicing revenue: |
|||||||||||||||||||||||||||||||||||||||||
Operating revenue: |
|||||||||||||||||||||||||||||||||||||||||
Loan servicing revenue |
1,186 | 1,107 | 1,221 | 1,220 | 1,279 | 7 | (7 | ) | 2,293 | 2,501 | (8 | ) | |||||||||||||||||||||||||||||
Other changes in MSR asset fair value |
(620 | ) | (605 | ) | (657 | ) | (712 | ) | (837 | ) | (2 | ) | 26 | (1,225 | ) | (1,910 | ) | 36 | |||||||||||||||||||||||
Total operating revenue |
566 | 502 | 564 | 508 | 442 | 13 | 28 | 1,068 | 591 | 81 | |||||||||||||||||||||||||||||||
Risk management: |
|||||||||||||||||||||||||||||||||||||||||
Changes in MSR asset fair value due to inputs or
assumptions in model |
(3,584 | ) | (96 | ) | 1,762 | (1,099 | ) | 3,831 | NM | NM | (3,680 | ) | 5,141 | NM | |||||||||||||||||||||||||||
Derivative valuation adjustments and other |
3,895 | 248 | (1,653 | ) | 1,534 | (3,750 | ) | NM | NM | 4,143 | (4,057 | ) | NM | ||||||||||||||||||||||||||||
Total risk management |
311 | 152 | 109 | 435 | 81 | 105 | 284 | 463 | 1,084 | (57 | ) | ||||||||||||||||||||||||||||||
Total net mortgage servicing revenue |
877 | 654 | 673 | 943 | 523 | 34 | 68 | 1,531 | 1,675 | (9 | ) | ||||||||||||||||||||||||||||||
Mortgage fees and related income |
$ | 886 | $ | 655 | $ | 481 | $ | 873 | $ | 807 | 35 | 10 | $ | 1,541 | $ | 2,440 | (37 | ) | |||||||||||||||||||||||
Ratio of annualized loan servicing revenue to third-party
mortgage loans serviced (average) |
0.45 | % | 0.42 | % | 0.44 | % | 0.44 | % | 0.45 | % | 0.43 | % | 0.44 | % | |||||||||||||||||||||||||||
MSR revenue multiple (c) |
2.49 | x | 3.43 | x | 3.25 | x | 2.82 | x | 2.91 | x | 2.60 | x | 2.98 | x |
(a) | Includes rural housing loans sourced through brokers and correspondents, which are underwritten under U.S. Department of Agriculture guidelines. Prior period amounts have been revised to conform with the current period presentation. | |
(b) | Loans at fair value consist of prime mortgages originated with the intent to sell that are accounted for at fair value and classified as trading assets on the Consolidated Balance Sheets. Average balances of these loans totaled $12.5 billion, $14.2 billion, $16.0 billion, $17.7 billion and $16.2 billion for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and $13.3 billion and $14.9 billion for year-to-date 2010 and 2009, respectively. | |
(c) | Represents the ratio of MSR net carrying value (ending) to third-party mortgage loans serviced (ending) divided by the ratio of annualized loan servicing revenue to third-party mortgage loans serviced (average). |
Page 16
JPMORGAN CHASE & CO. | ||
RETAIL FINANCIAL SERVICES | ||
FINANCIAL HIGHLIGHTS, CONTINUED | ||
(in millions, except ratio data and where otherwise noted) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
REAL ESTATE PORTFOLIOS |
||||||||||||||||||||||||||||||||||||||||
Noninterest revenue |
$ | 52 | $ | 32 | $ | (6 | ) | $ | 19 | $ | 3 | 63 | % | NM | % | $ | 84 | $ | (39 | ) | NM | % | ||||||||||||||||||
Net interest income |
1,313 | 1,496 | 1,552 | 1,588 | 1,590 | (12 | ) | (17 | ) | 2,809 | 3,406 | (18 | ) | |||||||||||||||||||||||||||
Total net revenue |
1,365 | 1,528 | 1,546 | 1,607 | 1,593 | (11 | ) | (14 | ) | 2,893 | 3,367 | (14 | ) | |||||||||||||||||||||||||||
Provision for credit losses |
1,372 | 3,325 | 3,739 | 3,558 | 3,119 | (59 | ) | (56 | ) | 4,697 | 6,266 | (25 | ) | |||||||||||||||||||||||||||
Noninterest expense |
405 | 419 | 565 | 411 | 417 | (3 | ) | (3 | ) | 824 | 871 | (5 | ) | |||||||||||||||||||||||||||
Income/(loss) before income tax expense/(benefit) |
(412 | ) | (2,216 | ) | (2,758 | ) | (2,362 | ) | (1,943 | ) | 81 | 79 | (2,628 | ) | (3,770 | ) | 30 | |||||||||||||||||||||||
Net income/(loss) |
$ | (236 | ) | $ | (1,286 | ) | $ | (1,692 | ) | $ | (1,448 | ) | $ | (1,190 | ) | 82 | 80 | $ | (1,522 | ) | $ | (2,309 | ) | 34 | ||||||||||||||||
Overhead ratio |
30 | % | 27 | % | 37 | % | 26 | % | 26 | % | 28 | % | 26 | % | ||||||||||||||||||||||||||
BUSINESS METRICS (in billions) |
||||||||||||||||||||||||||||||||||||||||
LOANS EXCLUDING PURCHASED CREDIT-IMPAIRED
LOANS (a) |
||||||||||||||||||||||||||||||||||||||||
End-of-period loans owned: |
||||||||||||||||||||||||||||||||||||||||
Home equity |
$ | 94.8 | $ | 97.7 | $ | 101.4 | $ | 104.8 | $ | 108.2 | (3 | ) | (12 | ) | $ | 94.8 | $ | 108.2 | (12 | ) | ||||||||||||||||||||
Prime mortgage |
44.6 | 46.8 | 47.5 | 50.0 | 53.2 | (5 | ) | (16 | ) | 44.6 | 53.2 | (16 | ) | |||||||||||||||||||||||||||
Subprime mortgage |
12.6 | 13.2 | 12.5 | 13.3 | 13.8 | (5 | ) | (9 | ) | 12.6 | 13.8 | (9 | ) | |||||||||||||||||||||||||||
Option ARMs |
8.5 | 8.6 | 8.5 | 8.9 | 9.0 | (1 | ) | (6 | ) | 8.5 | 9.0 | (6 | ) | |||||||||||||||||||||||||||
Other |
1.0 | 1.0 | 0.7 | 0.7 | 0.9 | | 11 | 1.0 | 0.9 | 11 | ||||||||||||||||||||||||||||||
Total end-of-period loans owned |
161.5 | 167.3 | 170.6 | 177.7 | 185.1 | (3 | ) | (13 | ) | 161.5 | 185.1 | (13 | ) | |||||||||||||||||||||||||||
Average loans owned: |
||||||||||||||||||||||||||||||||||||||||
Home equity |
96.3 | 99.5 | 103.3 | 106.6 | 110.1 | (3 | ) | (13 | ) | 97.9 | 111.7 | (12 | ) | |||||||||||||||||||||||||||
Prime mortgage |
45.7 | 47.9 | 48.8 | 51.7 | 54.9 | (5 | ) | (17 | ) | 46.8 | 56.4 | (17 | ) | |||||||||||||||||||||||||||
Subprime mortgage |
13.1 | 13.8 | 12.8 | 13.6 | 14.3 | (5 | ) | (8 | ) | 13.4 | 14.6 | (8 | ) | |||||||||||||||||||||||||||
Option ARMs |
8.6 | 8.7 | 8.7 | 8.9 | 9.1 | (1 | ) | (5 | ) | 8.7 | 9.0 | (3 | ) | |||||||||||||||||||||||||||
Other |
1.0 | 1.1 | 0.7 | 0.8 | 0.9 | (9 | ) | 11 | 1.0 | 0.9 | 11 | |||||||||||||||||||||||||||||
Total average loans owned |
164.7 | 171.0 | 174.3 | 181.6 | 189.3 | (4 | ) | (13 | ) | 167.8 | 192.6 | (13 | ) | |||||||||||||||||||||||||||
PURCHASED CREDIT-IMPAIRED LOANS (a) |
||||||||||||||||||||||||||||||||||||||||
End-of-period loans owned: |
||||||||||||||||||||||||||||||||||||||||
Home equity |
25.5 | 26.0 | 26.5 | 27.1 | 27.7 | (2 | ) | (8 | ) | 25.5 | 27.7 | (8 | ) | |||||||||||||||||||||||||||
Prime mortgage |
18.5 | 19.2 | 19.7 | 20.2 | 20.8 | (4 | ) | (11 | ) | 18.5 | 20.8 | (11 | ) | |||||||||||||||||||||||||||
Subprime mortgage |
5.6 | 5.8 | 6.0 | 6.1 | 6.4 | (3 | ) | (13 | ) | 5.6 | 6.4 | (13 | ) | |||||||||||||||||||||||||||
Option ARMs |
27.3 | 28.3 | 29.0 | 29.8 | 30.5 | (4 | ) | (10 | ) | 27.3 | 30.5 | (10 | ) | |||||||||||||||||||||||||||
Total end-of-period loans owned |
76.9 | 79.3 | 81.2 | 83.2 | 85.4 | (3 | ) | (10 | ) | 76.9 | 85.4 | (10 | ) | |||||||||||||||||||||||||||
Average loans owned: |
||||||||||||||||||||||||||||||||||||||||
Home equity |
25.7 | 26.2 | 26.7 | 27.4 | 28.0 | (2 | ) | (8 | ) | 26.0 | 28.2 | (8 | ) | |||||||||||||||||||||||||||
Prime mortgage |
18.8 | 19.5 | 20.0 | 20.5 | 21.0 | (4 | ) | (10 | ) | 19.1 | 21.3 | (10 | ) | |||||||||||||||||||||||||||
Subprime mortgage |
5.8 | 5.9 | 6.1 | 6.2 | 6.5 | (2 | ) | (11 | ) | 5.8 | 6.6 | (12 | ) | |||||||||||||||||||||||||||
Option ARMs |
27.7 | 28.6 | 29.3 | 30.2 | 31.0 | (3 | ) | (11 | ) | 28.2 | 31.2 | (10 | ) | |||||||||||||||||||||||||||
Total average loans owned |
78.0 | 80.2 | 82.1 | 84.3 | 86.5 | (3 | ) | (10 | ) | 79.1 | 87.3 | (9 | ) | |||||||||||||||||||||||||||
TOTAL REAL ESTATE PORTFOLIOS |
||||||||||||||||||||||||||||||||||||||||
End-of-period loans owned: |
||||||||||||||||||||||||||||||||||||||||
Home equity |
120.3 | 123.7 | 127.9 | 131.9 | 135.9 | (3 | ) | (11 | ) | 120.3 | 135.9 | (11 | ) | |||||||||||||||||||||||||||
Prime mortgage |
63.1 | 66.0 | 67.2 | 70.2 | 74.0 | (4 | ) | (15 | ) | 63.1 | 74.0 | (15 | ) | |||||||||||||||||||||||||||
Subprime mortgage |
18.2 | 19.0 | 18.5 | 19.4 | 20.2 | (4 | ) | (10 | ) | 18.2 | 20.2 | (10 | ) | |||||||||||||||||||||||||||
Option ARMs |
35.8 | 36.9 | 37.5 | 38.7 | 39.5 | (3 | ) | (9 | ) | 35.8 | 39.5 | (9 | ) | |||||||||||||||||||||||||||
Other |
1.0 | 1.0 | 0.7 | 0.7 | 0.9 | | 11 | 1.0 | 0.9 | 11 | ||||||||||||||||||||||||||||||
Total end-of-period loans owned |
238.4 | 246.6 | 251.8 | 260.9 | 270.5 | (3 | ) | (12 | ) | 238.4 | 270.5 | (12 | ) | |||||||||||||||||||||||||||
Average loans owned: |
||||||||||||||||||||||||||||||||||||||||
Home equity |
122.0 | 125.7 | 130.0 | 134.0 | 138.1 | (3 | ) | (12 | ) | 123.9 | 139.9 | (11 | ) | |||||||||||||||||||||||||||
Prime mortgage |
64.5 | 67.4 | 68.8 | 72.2 | 75.9 | (4 | ) | (15 | ) | 65.9 | 77.7 | (15 | ) | |||||||||||||||||||||||||||
Subprime mortgage |
18.9 | 19.7 | 18.9 | 19.8 | 20.8 | (4 | ) | (9 | ) | 19.2 | 21.2 | (9 | ) | |||||||||||||||||||||||||||
Option ARMs |
36.3 | 37.3 | 38.0 | 39.1 | 40.1 | (3 | ) | (9 | ) | 36.9 | 40.2 | (8 | ) | |||||||||||||||||||||||||||
Other |
1.0 | 1.1 | 0.7 | 0.8 | 0.9 | (9 | ) | 11 | 1.0 | 0.9 | 11 | |||||||||||||||||||||||||||||
Total average loans owned |
242.7 | 251.2 | 256.4 | 265.9 | 275.8 | (3 | ) | (12 | ) | 246.9 | 279.9 | (12 | ) | |||||||||||||||||||||||||||
Average assets |
230.3 | 240.2 | 247.3 | 258.3 | 269.5 | (4 | ) | (15 | ) | 235.2 | 274.7 | (14 | ) | |||||||||||||||||||||||||||
Home equity origination volume |
0.3 | 0.3 | 0.4 | 0.5 | 0.6 | | (50 | ) | 0.6 | 1.5 | (60 | ) |
(a) | Purchased credit-impaired loans represent loans acquired in the Washington Mutual transaction for which a deterioration in credit quality occurred between the origination date and JPMorgan Chases acquisition date. These loans were initially recorded at fair value and accrete interest income over the estimated lives of the loans as long as cash flows are reasonably estimable, even if the underlying loans are contractually past due. |
Page 17
JPMORGAN CHASE & CO. | ||
RETAIL FINANCIAL SERVICES | ||
FINANCIAL HIGHLIGHTS, CONTINUED | ||
(in millions, except ratio data) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
REAL ESTATE PORTFOLIOS (continued) |
||||||||||||||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS |
||||||||||||||||||||||||||||||||||||||||
Net charge-offs excluding purchased credit-impaired
loans (a) |
||||||||||||||||||||||||||||||||||||||||
Home equity |
$ | 796 | $ | 1,126 | $ | 1,177 | $ | 1,142 | $ | 1,265 | (29 | )% | (37 | )% | $ | 1,922 | $ | 2,363 | (19 | )% | ||||||||||||||||||||
Prime mortgage |
251 | 453 | 568 | 518 | 479 | (45 | ) | (48 | ) | 704 | 786 | (10 | ) | |||||||||||||||||||||||||||
Subprime mortgage |
282 | 457 | 452 | 422 | 410 | (38 | ) | (31 | ) | 739 | 774 | (5 | ) | |||||||||||||||||||||||||||
Option ARMs |
22 | 23 | 29 | 15 | 15 | (4 | ) | 47 | 45 | 19 | 137 | |||||||||||||||||||||||||||||
Other |
21 | 16 | 24 | 19 | 20 | 31 | 5 | 37 | 35 | 6 | ||||||||||||||||||||||||||||||
Total net charge-offs |
1,372 | 2,075 | 2,250 | 2,116 | 2,189 | (34 | ) | (37 | ) | 3,447 | 3,977 | (13 | ) | |||||||||||||||||||||||||||
Net charge-off rate excluding purchased credit-impaired
loans (a) |
||||||||||||||||||||||||||||||||||||||||
Home equity |
3.32 | % | 4.59 | % | 4.52 | % | 4.25 | % | 4.61 | % | 3.96 | % | 4.27 | % | ||||||||||||||||||||||||||
Prime mortgage |
2.20 | 3.84 | 4.62 | 3.98 | 3.50 | 3.03 | 2.81 | |||||||||||||||||||||||||||||||||
Subprime mortgage |
8.63 | 13.43 | 14.01 | 12.31 | 11.50 | 11.12 | 10.69 | |||||||||||||||||||||||||||||||||
Option ARMs |
1.03 | 1.07 | 1.32 | 0.67 | 0.66 | 1.04 | 0.43 | |||||||||||||||||||||||||||||||||
Other |
8.42 | 5.90 | 13.60 | 9.42 | 8.91 | 7.46 | 7.84 | |||||||||||||||||||||||||||||||||
Total net charge-off rate excluding purchased credit-impaired loans |
3.34 | 4.92 | 5.12 | 4.62 | 4.64 | 4.14 | 4.16 | |||||||||||||||||||||||||||||||||
Net charge-off rate reported |
||||||||||||||||||||||||||||||||||||||||
Home equity |
2.62 | 3.63 | 3.59 | 3.38 | 3.67 | 3.13 | 3.41 | |||||||||||||||||||||||||||||||||
Prime mortgage |
1.56 | 2.73 | 3.28 | 2.85 | 2.53 | 2.15 | 2.04 | |||||||||||||||||||||||||||||||||
Subprime mortgage |
5.98 | 9.41 | 9.49 | 8.46 | 7.91 | 7.76 | 7.36 | |||||||||||||||||||||||||||||||||
Option ARMs |
0.24 | 0.25 | 0.30 | 0.15 | 0.15 | 0.25 | 0.10 | |||||||||||||||||||||||||||||||||
Other |
8.42 | 5.90 | 13.60 | 9.42 | 8.91 | 7.46 | 7.84 | |||||||||||||||||||||||||||||||||
Total net charge-off rate reported |
2.27 | 3.35 | 3.48 | 3.16 | 3.18 | 2.82 | 2.87 | |||||||||||||||||||||||||||||||||
30+ day delinquency rate excluding purchased
credit-impaired loans (b) |
6.88 | 7.28 | 7.73 | 7.46 | 6.46 | 6.88 | 6.46 | |||||||||||||||||||||||||||||||||
Allowance for loan losses |
$ | 14,127 | $ | 14,127 | $ | 12,752 | $ | 11,261 | $ | 9,821 | | 44 | $ | 14,127 | $ | 9,821 | 44 | |||||||||||||||||||||||
Nonperforming assets (c) |
10,121 | 10,313 | 10,347 | 10,196 | 9,085 | (2 | ) | 11 | 10,121 | 9,085 | 11 | |||||||||||||||||||||||||||||
Allowance for loan losses to ending loans retained |
5.93 | % | 5.73 | % | 5.06 | % | 4.32 | % | 3.63 | % | 5.93 | % | 3.63 | % | ||||||||||||||||||||||||||
Allowance for loan losses to ending loans retained
excluding purchased credit-impaired loans (a) |
7.01 | 6.76 | 6.55 | 5.72 | 5.31 | 7.01 | 5.31 |
(a) | Excludes the impact of purchased credit-impaired loans that were acquired as part of the Washington Mutual transaction. These loans were accounted for at fair value on the acquisition date, which incorporated managements estimate, as of that date, of credit losses over the remaining life of the portfolio. An allowance for loan losses of $2.8 billion, $2.8 billion, $1.6 billion and $1.1 billion was recorded for these loans at June 30, 2010, March 31, 2010, December 31, 2009 and September 30, 2009, respectively, which has also been excluded from the applicable ratios. No allowance for loan losses was recorded at June 30, 2009. To date, no charge-offs have been recorded for these loans. | |
(b) | The delinquency rate for purchased credit-impaired loans was 27.91%, 28.49%, 27.79%, 25.56% and 23.37% at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively. | |
(c) | Excludes purchased credit-impaired loans that were acquired as part of the Washington Mutual transaction. These loans are accounted for on a pool basis, and the pools are considered to be performing. |
Page 18
JPMORGAN CHASE & CO. | ||
CARD SERVICES MANAGED BASIS | ||
FINANCIAL HIGHLIGHTS | ||
(in millions, except ratio data and where otherwise noted) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
INCOME STATEMENT (a) |
||||||||||||||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||||||||||||||
Credit card income |
$ | 908 | $ | 813 | $ | 931 | $ | 916 | $ | 921 | 12 | % | (1 | )% | $ | 1,721 | $ | 1,765 | (2 | )% | ||||||||||||||||||||
All other income |
(47 | ) | (55 | ) | (46 | ) | (85 | ) | (364 | ) | 15 | 87 | (102 | ) | (561 | ) | 82 | |||||||||||||||||||||||
Noninterest revenue |
861 | 758 | 885 | 831 | 557 | 14 | 55 | 1,619 | 1,204 | 34 | ||||||||||||||||||||||||||||||
Net interest income |
3,356 | 3,689 | 4,263 | 4,328 | 4,311 | (9 | ) | (22 | ) | 7,045 | 8,793 | (20 | ) | |||||||||||||||||||||||||||
TOTAL NET REVENUE |
4,217 | 4,447 | 5,148 | 5,159 | 4,868 | (5 | ) | (13 | ) | 8,664 | 9,997 | (13 | ) | |||||||||||||||||||||||||||
Provision for credit losses |
2,221 | 3,512 | 4,239 | 4,967 | 4,603 | (37 | ) | (52 | ) | 5,733 | 9,256 | (38 | ) | |||||||||||||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||||||||||||||
Compensation expense |
327 | 330 | 336 | 354 | 329 | (1 | ) | (1 | ) | 657 | 686 | (4 | ) | |||||||||||||||||||||||||||
Noncompensation expense |
986 | 949 | 938 | 829 | 873 | 4 | 13 | 1,935 | 1,723 | 12 | ||||||||||||||||||||||||||||||
Amortization of intangibles |
123 | 123 | 122 | 123 | 131 | | (6 | ) | 246 | 270 | (9 | ) | ||||||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE |
1,436 | 1,402 | 1,396 | 1,306 | 1,333 | 2 | 8 | 2,838 | 2,679 | 6 | ||||||||||||||||||||||||||||||
Income/(loss) before income tax expense/(benefit) |
560 | (467 | ) | (487 | ) | (1,114 | ) | (1,068 | ) | NM | NM | 93 | (1,938 | ) | NM | |||||||||||||||||||||||||
Income tax expense/(benefit) |
217 | (164 | ) | (181 | ) | (414 | ) | (396 | ) | NM | NM | 53 | (719 | ) | NM | |||||||||||||||||||||||||
NET INCOME/(LOSS) |
$ | 343 | $ | (303 | ) | $ | (306 | ) | $ | (700 | ) | $ | (672 | ) | NM | NM | $ | 40 | $ | (1,219 | ) | NM | ||||||||||||||||||
Memo: Net securitization income/(loss) |
N/A | N/A | $ | 17 | $ | (43 | ) | $ | (268 | ) | NM | NM | N/A | $ | (448 | ) | NM | |||||||||||||||||||||||
FINANCIAL RATIOS (a) |
||||||||||||||||||||||||||||||||||||||||
ROE |
9 | % | (8 | )% | (8 | )% | (19 | )% | (18 | )% | 1 | % | (16 | )% | ||||||||||||||||||||||||||
Overhead ratio |
34 | 32 | 27 | 25 | 27 | 33 | 27 | |||||||||||||||||||||||||||||||||
Percentage of average outstandings: |
||||||||||||||||||||||||||||||||||||||||
Net interest income |
9.20 | 9.60 | 10.36 | 10.15 | 9.93 | 9.41 | 9.92 | |||||||||||||||||||||||||||||||||
Provision for credit losses |
6.09 | 9.14 | 10.30 | 11.65 | 10.60 | 7.66 | 10.44 | |||||||||||||||||||||||||||||||||
Noninterest revenue |
2.36 | 1.97 | 2.15 | 1.95 | 1.28 | 2.16 | 1.36 | |||||||||||||||||||||||||||||||||
Risk adjusted margin (b) |
5.47 | 2.43 | 2.21 | 0.45 | 0.61 | 3.91 | 0.84 | |||||||||||||||||||||||||||||||||
Noninterest expense |
3.94 | 3.65 | 3.39 | 3.06 | 3.07 | 3.79 | 3.02 | |||||||||||||||||||||||||||||||||
Pretax income/(loss) (ROO) (c) |
1.54 | (1.22 | ) | (1.18 | ) | (2.61 | ) | (2.46 | ) | 0.12 | (2.19 | ) | ||||||||||||||||||||||||||||
Net income/(loss) |
0.94 | (0.79 | ) | (0.74 | ) | (1.64 | ) | (1.55 | ) | 0.05 | (1.38 | ) | ||||||||||||||||||||||||||||
BUSINESS METRICS |
||||||||||||||||||||||||||||||||||||||||
Sales volume (in billions) |
$ | 78.1 | $ | 69.4 | $ | 78.8 | $ | 74.7 | $ | 74.0 | 13 | 6 | $ | 147.5 | $ | 140.6 | 5 | |||||||||||||||||||||||
New accounts opened (in millions) |
2.7 | 2.5 | 3.2 | 2.4 | 2.4 | 8 | 13 | 5.2 | 4.6 | 13 | ||||||||||||||||||||||||||||||
Open accounts (in millions) |
88.9 | 88.9 | 93.3 | 93.6 | 100.3 | | (11 | ) | 88.9 | 100.3 | (11 | ) | ||||||||||||||||||||||||||||
Merchant acquiring business |
||||||||||||||||||||||||||||||||||||||||
Bank card volume (in billions) |
$ | 117.1 | $ | 108.0 | $ | 110.4 | $ | 103.5 | $ | 101.4 | 8 | 15 | $ | 225.1 | $ | 195.8 | 15 | |||||||||||||||||||||||
Total transactions (in billions) |
5.0 | 4.7 | 4.9 | 4.5 | 4.5 | 6 | 11 | 9.7 | 8.6 | 13 |
(a) | Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. For further details regarding the Firms application and impact of the new guidance, see footnote (a) on page 3. | |
(b) | Represents total net revenue less provision for credit losses. | |
(c) | Pretax return on average managed outstandings. | |
N/A: | Not applicable. |
Page 19
JPMORGAN CHASE & CO. | ||
CARD SERVICES MANAGED BASIS | ||
FINANCIAL HIGHLIGHTS, CONTINUED | ||
(in millions, except headcount and ratio data) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (Period-end) |
||||||||||||||||||||||||||||||||||||||||
Loans: |
||||||||||||||||||||||||||||||||||||||||
Loans on balance sheets |
$ | 142,994 | $ | 149,260 | $ | 78,786 | $ | 78,215 | $ | 85,736 | (4 | )% | 67 | % | $ | 142,994 | $ | 85,736 | 67 | % | ||||||||||||||||||||
Securitized loans (a) |
N/A | N/A | 84,626 | 87,028 | 85,790 | NM | NM | N/A | 85,790 | NM | ||||||||||||||||||||||||||||||
Total loans |
142,994 | 149,260 | 163,412 | 165,243 | 171,526 | (4 | ) | (17 | ) | 142,994 | 171,526 | (17 | ) | |||||||||||||||||||||||||||
Equity |
15,000 | 15,000 | 15,000 | 15,000 | 15,000 | | | 15,000 | 15,000 | | ||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (Average) |
||||||||||||||||||||||||||||||||||||||||
Managed assets |
146,816 | 156,968 | 184,535 | 192,141 | 193,310 | (6 | ) | (24 | ) | 151,864 | 197,234 | (23 | ) | |||||||||||||||||||||||||||
Loans: |
||||||||||||||||||||||||||||||||||||||||
Loans on balance sheets |
146,302 | 155,790 | 77,759 | 83,146 | 89,692 | (6 | ) | 63 | 151,020 | 93,715 | 61 | |||||||||||||||||||||||||||||
Securitized loans (a) |
N/A | N/A | 85,452 | 86,017 | 84,417 | NM | NM | N/A | 85,015 | NM | ||||||||||||||||||||||||||||||
Total average loans |
146,302 | 155,790 | 163,211 | 169,163 | 174,109 | (6 | ) | (16 | ) | 151,020 | 178,730 | (16 | ) | |||||||||||||||||||||||||||
Equity |
15,000 | 15,000 | 15,000 | 15,000 | 15,000 | | | 15,000 | 15,000 | | ||||||||||||||||||||||||||||||
Headcount |
21,529 | 22,478 | 22,676 | 22,850 | 22,897 | (4 | ) | (6 | ) | 21,529 | 22,897 | (6 | ) | |||||||||||||||||||||||||||
CREDIT QUALITY STATISTICS (a) |
||||||||||||||||||||||||||||||||||||||||
Net charge-offs |
$ | 3,721 | $ | 4,512 | $ | 3,839 | $ | 4,392 | $ | 4,353 | (18 | ) | (15 | ) | $ | 8,233 | $ | 7,846 | 5 | |||||||||||||||||||||
Net charge-off rate (b) |
10.20 | % | 11.75 | % | 9.33 | % | 10.30 | % | 10.03 | % | 10.99 | % | 8.85 | % | ||||||||||||||||||||||||||
Delinquency rates |
||||||||||||||||||||||||||||||||||||||||
30+ day (b) |
4.96 | % | 5.62 | % | 6.28 | % | 5.99 | % | 5.86 | % | 4.96 | % | 5.86 | % | ||||||||||||||||||||||||||
90+ day (b) |
2.76 | 3.15 | 3.59 | 2.76 | 3.25 | 2.76 | 3.25 | |||||||||||||||||||||||||||||||||
Allowance for loan losses (c) |
$ | 14,524 | $ | 16,032 | $ | 9,672 | $ | 9,297 | $ | 8,839 | (9 | ) | 64 | $ | 14,524 | $ | 8,839 | 64 | ||||||||||||||||||||||
Allowance for loan losses to period-end loans (c) (d) |
10.16 | % | 10.74 | % | 12.28 | % | 11.89 | % | 10.31 | % | 10.16 | % | 10.31 | % | ||||||||||||||||||||||||||
KEY STATS WASHINGTON MUTUAL ONLY |
||||||||||||||||||||||||||||||||||||||||
Loans |
$ | 15,615 | $ | 17,204 | $ | 19,653 | $ | 21,163 | $ | 23,093 | (9 | ) | (32 | ) | $ | 15,615 | $ | 23,093 | (32 | ) | ||||||||||||||||||||
Average loans |
16,455 | 18,607 | 20,377 | 22,287 | 24,418 | (12 | ) | (33 | ) | 17,525 | 25,990 | (33 | ) | |||||||||||||||||||||||||||
Net interest income (e) |
14.97 | % | 15.06 | % | 17.12 | % | 17.04 | % | 17.90 | % | 15.02 | % | 17.14 | % | ||||||||||||||||||||||||||
Risk adjusted margin (e) (f) |
15.43 | 2.47 | (0.66 | ) | (4.45 | ) | (3.89 | ) | 8.59 | 0.49 | ||||||||||||||||||||||||||||||
Net charge-off rate (g) |
19.53 | 24.14 | 20.49 | 21.94 | 19.17 | 21.97 | 16.75 | |||||||||||||||||||||||||||||||||
30+ day delinquency rate (g) |
8.86 | 10.49 | 12.72 | 12.44 | 11.98 | 8.86 | 11.98 | |||||||||||||||||||||||||||||||||
90+ day delinquency rate (g) |
5.17 | 6.32 | 7.76 | 6.21 | 6.85 | 5.17 | 6.85 | |||||||||||||||||||||||||||||||||
KEY STATS EXCLUDING WASHINGTON MUTUAL |
||||||||||||||||||||||||||||||||||||||||
Loans |
$ | 127,379 | $ | 132,056 | $ | 143,759 | $ | 144,080 | $ | 148,433 | (4 | ) | (14 | ) | $ | 127,379 | $ | 148,433 | (14 | ) | ||||||||||||||||||||
Average loans |
129,847 | 137,183 | 142,834 | 146,876 | 149,691 | (5 | ) | (13 | ) | 133,495 | 152,740 | (13 | ) | |||||||||||||||||||||||||||
Net interest income (e) |
8.47 | % | 8.86 | % | 9.40 | % | 9.10 | % | 8.63 | % | 8.67 | % | 8.69 | % | ||||||||||||||||||||||||||
Risk adjusted margin (e) (f) |
4.21 | 2.43 | 2.62 | 1.19 | 1.34 | 3.30 | 0.89 | |||||||||||||||||||||||||||||||||
Net charge-off rate |
9.02 | 10.54 | 8.64 | 9.41 | 8.97 | 9.80 | 7.90 | |||||||||||||||||||||||||||||||||
30+ day delinquency rate |
4.48 | 4.99 | 5.52 | 5.38 | 5.27 | 4.48 | 5.27 | |||||||||||||||||||||||||||||||||
90+ day delinquency rate |
2.47 | 2.74 | 3.13 | 2.48 | 2.90 | 2.47 | 2.90 |
(a) | Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. As a result of the consolidation of the credit card securitization trusts, reported and managed basis relating to credit card securitizations are equivalent for periods beginning after January 1, 2010. For further details regarding the Firms application and impact of the new guidance, see footnote (a) on page 3. | |
(b) | Results reflect the impact of purchase accounting adjustments related to the Washington Mutual transaction and the consolidation of the Washington Mutual Master Trust. Net charge-off rate is not impacted in the quarter ended June 30, 2010. Delinquency rates for June 30, 2010 and March 31, 2010 are not impacted. | |
(c) | Based on loans on the Consolidated Balance Sheets. | |
(d) | Includes $1.0 billion, $3.0 billion and $5.0 billion of loans at December 31, 2009, September 30, 2009 and June 30, 2009, respectively, held by the Washington Mutual Master Trust, which were consolidated onto the Card Services balance sheet at fair value during the second quarter of 2009. No allowance for loan losses was recorded for these loans as of December 31, 2009, September 30, 2009 and June 30, 2009. Excluding these loans, the allowance for loan losses to period-end loans would have been 12.43%, 12.36% and 10.95%, respectively. | |
(e) | As a percentage of average managed outstandings. | |
(f) | Represents total net revenue less provision for credit losses. | |
(g) | Excludes the impact of purchase accounting adjustments related to the Washington Mutual transaction and the consolidation of the Washington Mutual Master Trust. Net charge-off rate is not impacted in the quarter ended June 30, 2010. Delinquency rates for June 30, 2010 and March 31, 2010 are not impacted. | |
N/A: | Not applicable. |
Page 20
JPMORGAN CHASE & CO. | ||
CARD RECONCILIATION OF REPORTED AND MANAGED DATA | ||
(in millions, except ratio data) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
INCOME STATEMENT DATA |
||||||||||||||||||||||||||||||||||||||||
Credit card income |
||||||||||||||||||||||||||||||||||||||||
Reported |
$ | 908 | $ | 813 | $ | 1,306 | $ | 1,201 | $ | 1,215 | 12 | % | (25 | )% | $ | 1,721 | $ | 2,599 | (34 | )% | ||||||||||||||||||||
Securitization adjustments (a) |
N/A | N/A | (375 | ) | (285 | ) | (294 | ) | NM | NM | N/A | (834 | ) | NM | ||||||||||||||||||||||||||
Managed credit card income |
$ | 908 | $ | 813 | $ | 931 | $ | 916 | $ | 921 | 12 | (1 | ) | $ | 1,721 | $ | 1,765 | (2 | ) | |||||||||||||||||||||
Net interest income |
||||||||||||||||||||||||||||||||||||||||
Reported |
$ | 3,356 | $ | 3,689 | $ | 2,271 | $ | 2,345 | $ | 2,353 | (9 | ) | 43 | $ | 7,045 | $ | 4,831 | 46 | ||||||||||||||||||||||
Securitization adjustments (a) |
N/A | N/A | 1,992 | 1,983 | 1,958 | NM | NM | N/A | 3,962 | NM | ||||||||||||||||||||||||||||||
Managed net interest income |
$ | 3,356 | $ | 3,689 | $ | 4,263 | $ | 4,328 | $ | 4,311 | (9 | ) | (22 | ) | $ | 7,045 | $ | 8,793 | (20 | ) | ||||||||||||||||||||
Total net revenue |
||||||||||||||||||||||||||||||||||||||||
Reported |
$ | 4,217 | $ | 4,447 | $ | 3,531 | $ | 3,461 | $ | 3,204 | (5 | ) | 32 | $ | 8,664 | $ | 6,869 | 26 | ||||||||||||||||||||||
Securitization adjustments (a) |
N/A | N/A | 1,617 | 1,698 | 1,664 | NM | NM | N/A | 3,128 | NM | ||||||||||||||||||||||||||||||
Managed total net revenue |
$ | 4,217 | $ | 4,447 | $ | 5,148 | $ | 5,159 | $ | 4,868 | (5 | ) | (13 | ) | $ | 8,664 | $ | 9,997 | (13 | ) | ||||||||||||||||||||
Provision for credit losses |
||||||||||||||||||||||||||||||||||||||||
Reported |
$ | 2,221 | $ | 3,512 | $ | 2,622 | $ | 3,269 | $ | 2,939 | (37 | ) | (24 | ) | $ | 5,733 | $ | 6,128 | (6 | ) | ||||||||||||||||||||
Securitization adjustments (a) |
N/A | N/A | 1,617 | 1,698 | 1,664 | NM | NM | N/A | 3,128 | NM | ||||||||||||||||||||||||||||||
Managed provision for credit losses |
$ | 2,221 | $ | 3,512 | $ | 4,239 | $ | 4,967 | $ | 4,603 | (37 | ) | (52 | ) | $ | 5,733 | $ | 9,256 | (38 | ) | ||||||||||||||||||||
BALANCE SHEETS AVERAGE BALANCES |
||||||||||||||||||||||||||||||||||||||||
Total average assets |
||||||||||||||||||||||||||||||||||||||||
Reported |
$ | 146,816 | $ | 156,968 | $ | 102,748 | $ | 109,362 | $ | 111,722 | (6 | ) | 31 | $ | 151,864 | $ | 115,052 | 32 | ||||||||||||||||||||||
Securitization adjustments (a) |
N/A | N/A | 81,787 | 82,779 | 81,588 | NM | NM | N/A | 82,182 | NM | ||||||||||||||||||||||||||||||
Managed average assets |
$ | 146,816 | $ | 156,968 | $ | 184,535 | $ | 192,141 | $ | 193,310 | (6 | ) | (24 | ) | $ | 151,864 | $ | 197,234 | (23 | ) | ||||||||||||||||||||
CREDIT QUALITY STATISTICS |
||||||||||||||||||||||||||||||||||||||||
Net charge-offs |
||||||||||||||||||||||||||||||||||||||||
Reported |
$ | 3,721 | $ | 4,512 | $ | 2,222 | $ | 2,694 | $ | 2,689 | (18 | ) | 38 | $ | 8,233 | $ | 4,718 | 75 | ||||||||||||||||||||||
Securitization adjustments (a) |
N/A | N/A | 1,617 | 1,698 | 1,664 | NM | NM | N/A | 3,128 | NM | ||||||||||||||||||||||||||||||
Managed net charge-offs |
$ | 3,721 | $ | 4,512 | $ | 3,839 | $ | 4,392 | $ | 4,353 | (18 | ) | (15 | ) | $ | 8,233 | $ | 7,846 | 5 | |||||||||||||||||||||
Net charge-off rates |
||||||||||||||||||||||||||||||||||||||||
Reported |
10.20 | % | 11.75 | % | 11.34 | % | 12.85 | % | 12.03 | % | 10.99 | % | 10.15 | % | ||||||||||||||||||||||||||
Securitized (a) |
N/A | N/A | 7.51 | 7.83 | 7.91 | N/A | 7.42 | |||||||||||||||||||||||||||||||||
Managed net charge-off rate |
10.20 | 11.75 | 9.33 | 10.30 | 10.03 | 10.99 | 8.85 |
(a) | Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. As a result of the consolidation of the credit card securitization trusts, reported and managed basis relating to credit card securitizations are equivalent for periods beginning after January 1, 2010. For further details regarding the Firms application and impact of the new guidance, see footnote (a) on page 3. | |
N/A: | Not applicable. |
Page 21
JPMORGAN CHASE & CO. | ||
COMMERCIAL BANKING | ||
FINANCIAL HIGHLIGHTS | ||
(in millions, except ratio data) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
INCOME STATEMENT |
||||||||||||||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||||||||||||||
Lending- and deposit-related fees |
$ | 280 | $ | 277 | $ | 279 | $ | 269 | $ | 270 | 1 | % | 4 | % | $ | 557 | $ | 533 | 5 | % | ||||||||||||||||||||
Asset management, administration and commissions |
36 | 37 | 35 | 35 | 36 | (3 | ) | | 73 | 70 | 4 | |||||||||||||||||||||||||||||
All other income (a) |
230 | 186 | 149 | 170 | 152 | 24 | 51 | 416 | 277 | 50 | ||||||||||||||||||||||||||||||
Noninterest revenue |
546 | 500 | 463 | 474 | 458 | 9 | 19 | 1,046 | 880 | 19 | ||||||||||||||||||||||||||||||
Net interest income |
940 | 916 | 943 | 985 | 995 | 3 | (6 | ) | 1,856 | 1,975 | (6 | ) | ||||||||||||||||||||||||||||
TOTAL NET REVENUE (b) |
1,486 | 1,416 | 1,406 | 1,459 | 1,453 | 5 | 2 | 2,902 | 2,855 | 2 | ||||||||||||||||||||||||||||||
Provision for credit losses |
(235 | ) | 214 | 494 | 355 | 312 | NM | NM | (21 | ) | 605 | NM | ||||||||||||||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||||||||||||||
Compensation expense |
196 | 206 | 183 | 196 | 197 | (5 | ) | (1 | ) | 402 | 397 | 1 | ||||||||||||||||||||||||||||
Noncompensation expense |
337 | 324 | 351 | 339 | 327 | 4 | 3 | 661 | 669 | (1 | ) | |||||||||||||||||||||||||||||
Amortization of intangibles |
9 | 9 | 9 | 10 | 11 | | (18 | ) | 18 | 22 | (18 | ) | ||||||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE |
542 | 539 | 543 | 545 | 535 | 1 | 1 | 1,081 | 1,088 | (1 | ) | |||||||||||||||||||||||||||||
Income before income tax expense |
1,179 | 663 | 369 | 559 | 606 | 78 | 95 | 1,842 | 1,162 | 59 | ||||||||||||||||||||||||||||||
Income tax expense |
486 | 273 | 145 | 218 | 238 | 78 | 104 | 759 | 456 | 66 | ||||||||||||||||||||||||||||||
NET INCOME |
$ | 693 | $ | 390 | $ | 224 | $ | 341 | $ | 368 | 78 | 88 | $ | 1,083 | $ | 706 | 53 | |||||||||||||||||||||||
Revenue by product: |
||||||||||||||||||||||||||||||||||||||||
Lending |
$ | 649 | $ | 658 | $ | 639 | $ | 675 | $ | 684 | (1 | ) | (5 | ) | $ | 1,307 | $ | 1,349 | (3 | ) | ||||||||||||||||||||
Treasury services |
665 | 638 | 645 | 672 | 679 | 4 | (2 | ) | 1,303 | 1,325 | (2 | ) | ||||||||||||||||||||||||||||
Investment banking |
115 | 105 | 108 | 99 | 114 | 10 | 1 | 220 | 187 | 18 | ||||||||||||||||||||||||||||||
Other |
57 | 15 | 14 | 13 | (24 | ) | 280 | NM | 72 | (6 | ) | NM | ||||||||||||||||||||||||||||
Total Commercial Banking revenue |
$ | 1,486 | $ | 1,416 | $ | 1,406 | $ | 1,459 | $ | 1,453 | 5 | 2 | $ | 2,902 | $ | 2,855 | 2 | |||||||||||||||||||||||
IB revenue, gross (c) |
$ | 333 | $ | 311 | $ | 328 | $ | 301 | $ | 328 | 7 | 2 | $ | 644 | $ | 534 | 21 | |||||||||||||||||||||||
Revenue by client segment: |
||||||||||||||||||||||||||||||||||||||||
Middle Market Banking |
$ | 767 | $ | 746 | $ | 760 | $ | 771 | $ | 772 | 3 | (1 | ) | $ | 1,513 | $ | 1,524 | (1 | ) | |||||||||||||||||||||
Commercial Term Lending |
237 | 229 | 191 | 232 | 224 | 3 | 6 | 466 | 452 | 3 | ||||||||||||||||||||||||||||||
Mid-Corporate Banking |
285 | 263 | 277 | 278 | 305 | 8 | (7 | ) | 548 | 547 | | |||||||||||||||||||||||||||||
Real Estate Banking |
125 | 100 | 100 | 121 | 120 | 25 | 4 | 225 | 240 | (6 | ) | |||||||||||||||||||||||||||||
Other |
72 | 78 | 78 | 57 | 32 | (8 | ) | 125 | 150 | 92 | 63 | |||||||||||||||||||||||||||||
Total Commercial Banking revenue |
$ | 1,486 | $ | 1,416 | $ | 1,406 | $ | 1,459 | $ | 1,453 | 5 | 2 | $ | 2,902 | $ | 2,855 | 2 | |||||||||||||||||||||||
FINANCIAL RATIOS |
||||||||||||||||||||||||||||||||||||||||
ROE |
35 | % | 20 | % | 11 | % | 17 | % | 18 | % | 27 | % | 18 | % | ||||||||||||||||||||||||||
Overhead ratio |
36 | 38 | 39 | 37 | 37 | 37 | 38 |
(a) | Revenue from investment banking products sold to Commercial Banking (CB) clients and commercial card revenue is included in all other income. | |
(b) | Total net revenue included tax-equivalent adjustments from income tax credits related to equity investments in designated community development entities that provide loans to qualified businesses in low-income communities as well as tax-exempt income from municipal bond activity of $49 million, $45 million, $53 million, $43 million and $39 million for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and $94 million and $74 million for year-to-date 2010 and 2009, respectively. | |
(c) | Represents the total revenue related to investment banking products sold to CB clients. |
Page 22
JPMORGAN CHASE & CO. | ||
COMMERCIAL BANKING | ||
FINANCIAL HIGHLIGHTS, CONTINUED | ||
(in millions, except ratio and headcount data) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (Period-end) |
||||||||||||||||||||||||||||||||||||||||
Loans: |
||||||||||||||||||||||||||||||||||||||||
Loans retained |
$ | 95,090 | $ | 95,435 | $ | 97,108 | $ | 101,608 | $ | 105,556 | | % | (10 | )% | $ | 95,090 | $ | 105,556 | (10 | )% | ||||||||||||||||||||
Loans held-for-sale and loans at fair value |
446 | 294 | 324 | 288 | 296 | 52 | 51 | 446 | 296 | 51 | ||||||||||||||||||||||||||||||
Total loans |
95,536 | 95,729 | 97,432 | 101,896 | 105,852 | | (10 | ) | 95,536 | 105,852 | (10 | ) | ||||||||||||||||||||||||||||
Equity |
8,000 | 8,000 | 8,000 | 8,000 | 8,000 | | | 8,000 | 8,000 | | ||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (Average) |
||||||||||||||||||||||||||||||||||||||||
Total assets |
$ | 133,309 | $ | 133,013 | $ | 129,948 | $ | 130,316 | $ | 137,283 | | (3 | ) | $ | 133,162 | $ | 140,771 | (5 | ) | |||||||||||||||||||||
Loans: |
||||||||||||||||||||||||||||||||||||||||
Loans retained |
95,521 | 96,317 | 99,794 | 103,752 | 108,750 | (1 | ) | (12 | ) | 95,917 | 111,146 | (14 | ) | |||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value |
391 | 297 | 386 | 297 | 288 | 32 | 36 | 344 | 292 | 18 | ||||||||||||||||||||||||||||||
Total loans |
95,912 | 96,614 | 100,180 | 104,049 | 109,038 | (1 | ) | (12 | ) | 96,261 | 111,438 | (14 | ) | |||||||||||||||||||||||||||
Liability balances (a) |
136,770 | 133,142 | 122,471 | 109,293 | 105,829 | 3 | 29 | 134,966 | 110,377 | 22 | ||||||||||||||||||||||||||||||
Equity |
8,000 | 8,000 | 8,000 | 8,000 | 8,000 | | | 8,000 | 8,000 | | ||||||||||||||||||||||||||||||
Average loans by client segment: |
||||||||||||||||||||||||||||||||||||||||
Middle Market Banking |
$ | 34,424 | $ | 33,919 | $ | 34,794 | $ | 36,200 | $ | 38,193 | 1 | (10 | ) | $ | 34,173 | $ | 39,453 | (13 | ) | |||||||||||||||||||||
Commercial Term Lending |
35,956 | 36,057 | 36,507 | 36,943 | 36,963 | | (3 | ) | 36,006 | 36,889 | (2 | ) | ||||||||||||||||||||||||||||
Mid-Corporate Banking |
11,875 | 12,258 | 13,510 | 14,933 | 17,012 | (3 | ) | (30 | ) | 12,065 | 17,710 | (32 | ) | |||||||||||||||||||||||||||
Real Estate Banking |
9,814 | 10,438 | 11,133 | 11,547 | 12,347 | (6 | ) | (21 | ) | 10,124 | 12,803 | (21 | ) | |||||||||||||||||||||||||||
Other |
3,843 | 3,942 | 4,236 | 4,426 | 4,523 | (3 | ) | (15 | ) | 3,893 | 4,583 | (15 | ) | |||||||||||||||||||||||||||
Total Commercial Banking loans |
$ | 95,912 | $ | 96,614 | $ | 100,180 | $ | 104,049 | $ | 109,038 | (1 | ) | (12 | ) | $ | 96,261 | $ | 111,438 | (14 | ) | ||||||||||||||||||||
Headcount |
4,808 | 4,701 | 4,151 | 4,177 | 4,228 | 2 | 14 | 4,808 | 4,228 | 14 | ||||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS |
||||||||||||||||||||||||||||||||||||||||
Net charge-offs |
$ | 176 | $ | 229 | $ | 483 | $ | 291 | $ | 181 | (23 | ) | (3 | ) | $ | 405 | $ | 315 | 29 | |||||||||||||||||||||
Nonperforming loans: |
||||||||||||||||||||||||||||||||||||||||
Nonperforming loans retained (b) |
3,036 | 2,947 | 2,764 | 2,284 | 2,090 | 3 | 45 | 3,036 | 2,090 | 45 | ||||||||||||||||||||||||||||||
Nonperforming loans held-for-sale and loans at fair value |
41 | 49 | 37 | 18 | 21 | (16 | ) | 95 | 41 | 21 | 95 | |||||||||||||||||||||||||||||
Total nonperforming loans |
3,077 | 2,996 | 2,801 | 2,302 | 2,111 | 3 | 46 | 3,077 | 2,111 | 46 | ||||||||||||||||||||||||||||||
Nonperforming assets |
3,285 | 3,186 | 2,989 | 2,461 | 2,255 | 3 | 46 | 3,285 | 2,255 | 46 | ||||||||||||||||||||||||||||||
Allowance for credit losses: |
||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses |
2,686 | 3,007 | 3,025 | 3,063 | 3,034 | (11 | ) | (11 | ) | 2,686 | 3,034 | (11 | ) | |||||||||||||||||||||||||||
Allowance for lending-related commitments |
267 | 359 | 349 | 300 | 272 | (26 | ) | (2 | ) | 267 | 272 | (2 | ) | |||||||||||||||||||||||||||
Total allowance for credit losses |
2,953 | 3,366 | 3,374 | 3,363 | 3,306 | (12 | ) | (11 | ) | 2,953 | 3,306 | (11 | ) | |||||||||||||||||||||||||||
Net charge-off rate |
0.74 | % | 0.96 | % | 1.92 | % | 1.11 | % | 0.67 | % | 0.85 | % | 0.57 | % | ||||||||||||||||||||||||||
Allowance for loan losses to period-end loans retained |
2.82 | 3.15 | 3.12 | 3.01 | 2.87 | 2.82 | 2.87 | |||||||||||||||||||||||||||||||||
Allowance for loan losses to average loans retained |
2.81 | 3.12 | 3.03 | 2.95 | 2.79 | 2.80 | 2.73 | |||||||||||||||||||||||||||||||||
Allowance for loan losses to nonperforming loans retained |
88 | 102 | 109 | 134 | 145 | 88 | 145 | |||||||||||||||||||||||||||||||||
Nonperforming loans to total period-end loans |
3.22 | 3.13 | 2.87 | 2.26 | 1.99 | 3.22 | 1.99 | |||||||||||||||||||||||||||||||||
Nonperforming loans to total average loans |
3.21 | 3.10 | 2.80 | 2.21 | 1.94 | 3.20 | 1.89 |
(a) | Liability balances include deposits, as well as deposits that are swept to onbalance sheet liabilities (e.g., commercial paper, federal funds purchased, time deposits and securities loaned or sold under repurchase agreements) as part of customer cash management programs. | |
(b) | Allowance for loan losses of $586 million, $612 million, $581 million, $496 million and $460 million were held against nonperforming loans retained at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively. |
Page 23
JPMORGAN CHASE & CO. | ||
TREASURY & SECURITIES SERVICES | ||
FINANCIAL HIGHLIGHTS | ||
(in millions, except headcount and ratio data) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
INCOME STATEMENT |
||||||||||||||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||||||||||||||
Lending- and deposit-related fees |
$ | 313 | $ | 311 | $ | 330 | $ | 316 | $ | 314 | 1 | % | | % | $ | 624 | $ | 639 | (2 | )% | ||||||||||||||||||||
Asset management, administration and commissions |
705 | 659 | 675 | 620 | 710 | 7 | (1 | ) | 1,364 | 1,336 | 2 | |||||||||||||||||||||||||||||
All other income |
209 | 176 | 212 | 201 | 221 | 19 | (5 | ) | 385 | 418 | (8 | ) | ||||||||||||||||||||||||||||
Noninterest revenue |
1,227 | 1,146 | 1,217 | 1,137 | 1,245 | 7 | (1 | ) | 2,373 | 2,393 | (1 | ) | ||||||||||||||||||||||||||||
Net interest income |
654 | 610 | 618 | 651 | 655 | 7 | | 1,264 | 1,328 | (5 | ) | |||||||||||||||||||||||||||||
TOTAL NET REVENUE |
1,881 | 1,756 | 1,835 | 1,788 | 1,900 | 7 | (1 | ) | 3,637 | 3,721 | (2 | ) | ||||||||||||||||||||||||||||
Provision for credit losses |
(16 | ) | (39 | ) | 53 | 13 | (5 | ) | 59 | (220 | ) | (55 | ) | (11 | ) | (400 | ) | |||||||||||||||||||||||
Credit reimbursement to IB (a) |
(30 | ) | (30 | ) | (30 | ) | (31 | ) | (30 | ) | | | (60 | ) | (60 | ) | | |||||||||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||||||||||||||
Compensation expense |
697 | 657 | 668 | 629 | 618 | 6 | 13 | 1,354 | 1,247 | 9 | ||||||||||||||||||||||||||||||
Noncompensation expense |
684 | 650 | 704 | 633 | 650 | 5 | 5 | 1,334 | 1,321 | 1 | ||||||||||||||||||||||||||||||
Amortization of intangibles |
18 | 18 | 19 | 18 | 20 | | (10 | ) | 36 | 39 | (8 | ) | ||||||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE |
1,399 | 1,325 | 1,391 | 1,280 | 1,288 | 6 | 9 | 2,724 | 2,607 | 4 | ||||||||||||||||||||||||||||||
Income before income tax expense |
468 | 440 | 361 | 464 | 587 | 6 | (20 | ) | 908 | 1,065 | (15 | ) | ||||||||||||||||||||||||||||
Income tax expense |
176 | 161 | 124 | 162 | 208 | 9 | (15 | ) | 337 | 378 | (11 | ) | ||||||||||||||||||||||||||||
NET INCOME |
$ | 292 | $ | 279 | $ | 237 | $ | 302 | $ | 379 | 5 | (23 | ) | $ | 571 | $ | 687 | (17 | ) | |||||||||||||||||||||
REVENUE BY BUSINESS |
||||||||||||||||||||||||||||||||||||||||
Treasury Services |
$ | 926 | $ | 882 | $ | 918 | $ | 919 | $ | 934 | 5 | (1 | ) | $ | 1,808 | $ | 1,865 | (3 | ) | |||||||||||||||||||||
Worldwide Securities Services |
955 | 874 | 917 | 869 | 966 | 9 | (1 | ) | 1,829 | 1,856 | (1 | ) | ||||||||||||||||||||||||||||
TOTAL NET REVENUE |
$ | 1,881 | $ | 1,756 | $ | 1,835 | $ | 1,788 | $ | 1,900 | 7 | (1 | ) | $ | 3,637 | $ | 3,721 | (2 | ) | |||||||||||||||||||||
FINANCIAL RATIOS |
||||||||||||||||||||||||||||||||||||||||
ROE |
18 | % | 17 | % | 19 | % | 24 | % | 30 | % | 18 | % | 28 | % | ||||||||||||||||||||||||||
Overhead ratio |
74 | 75 | 76 | 72 | 68 | 75 | 70 | |||||||||||||||||||||||||||||||||
Pretax margin ratio (b) |
25 | 25 | 20 | 26 | 31 | 25 | 29 | |||||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (Period-end) |
||||||||||||||||||||||||||||||||||||||||
Loans (c) |
$ | 24,513 | $ | 24,066 | $ | 18,972 | $ | 19,693 | $ | 17,929 | 2 | 37 | $ | 24,513 | $ | 17,929 | 37 | |||||||||||||||||||||||
Equity |
6,500 | 6,500 | 5,000 | 5,000 | 5,000 | | 30 | 6,500 | 5,000 | 30 | ||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (Average) |
||||||||||||||||||||||||||||||||||||||||
Total assets |
$ | 42,868 | $ | 38,273 | $ | 36,589 | $ | 33,117 | $ | 35,520 | 12 | 21 | $ | 40,583 | $ | 37,092 | 9 | |||||||||||||||||||||||
Loans (c) |
22,137 | 19,578 | 18,888 | 17,062 | 17,524 | 13 | 26 | 20,865 | 18,825 | 11 | ||||||||||||||||||||||||||||||
Liability balances (d) |
246,690 | 247,905 | 250,695 | 231,502 | 234,163 | | 5 | 247,294 | 255,208 | (3 | ) | |||||||||||||||||||||||||||||
Equity |
6,500 | 6,500 | 5,000 | 5,000 | 5,000 | | 30 | 6,500 | 5,000 | 30 | ||||||||||||||||||||||||||||||
Headcount |
27,943 | 27,223 | 26,609 | 26,389 | 27,252 | 3 | 3 | 27,943 | 27,252 | 3 |
(a) | IB credit portfolio group manages certain exposures on behalf of clients shared with TSS. TSS reimburses IB for a portion of the total cost of managing the credit portfolio. IB recognizes this credit reimbursement as a component of noninterest revenue. | |
(b) | Pretax margin represents income before income tax expense divided by total net revenue, which is a measure of pretax performance and another basis by which management evaluates its performance and that of its competitors. | |
(c) | Loan balances include wholesale overdrafts, commercial card and trade finance loans. | |
(d) | Liability balances include deposits, as well as deposits that are swept to onbalance sheet liabilities (e.g., commercial paper, federal funds purchased, time deposits and securities loaned or sold under repurchase agreements) as part of customer cash management programs. |
Page 24
JPMORGAN CHASE & CO. | ||
TREASURY & SECURITIES SERVICES | ||
FINANCIAL HIGHLIGHTS, CONTINUED | ||
(in millions, except ratio data and where otherwise noted) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
TSS FIRMWIDE DISCLOSURES |
||||||||||||||||||||||||||||||||||||||||
TS revenue reported |
$ | 926 | $ | 882 | $ | 918 | $ | 919 | $ | 934 | 5 | % | (1 | )% | $ | 1,808 | $ | 1,865 | (3 | )% | ||||||||||||||||||||
TS revenue reported in CB |
665 | 638 | 645 | 672 | 679 | 4 | (2 | ) | 1,303 | 1,325 | (2 | ) | ||||||||||||||||||||||||||||
TS revenue reported in other lines of business |
62 | 56 | 57 | 63 | 63 | 11 | (2 | ) | 118 | 125 | (6 | ) | ||||||||||||||||||||||||||||
TS firmwide revenue (a) |
1,653 | 1,576 | 1,620 | 1,654 | 1,676 | 5 | (1 | ) | 3,229 | 3,315 | (3 | ) | ||||||||||||||||||||||||||||
Worldwide Securities Services revenue |
955 | 874 | 917 | 869 | 966 | 9 | (1 | ) | 1,829 | 1,856 | (1 | ) | ||||||||||||||||||||||||||||
TSS firmwide revenue (a) |
$ | 2,608 | $ | 2,450 | $ | 2,537 | $ | 2,523 | $ | 2,642 | 6 | (1 | ) | $ | 5,058 | $ | 5,171 | (2 | ) | |||||||||||||||||||||
TS firmwide liability balances (average) (b) |
$ | 303,224 | $ | 305,105 | $ | 289,024 | $ | 261,059 | $ | 258,312 | (1 | ) | 17 | $ | 304,159 | $ | 273,892 | 11 | ||||||||||||||||||||||
TSS firmwide liability balances (average) (b) |
383,460 | 381,047 | 373,166 | 340,795 | 339,992 | 1 | 13 | 382,260 | 365,584 | 5 | ||||||||||||||||||||||||||||||
TSS FIRMWIDE FINANCIAL RATIOS |
||||||||||||||||||||||||||||||||||||||||
TS firmwide overhead ratio (c) |
54 | % | 55 | % | 54 | % | 52 | % | 51 | % | 55 | % | 52 | % | ||||||||||||||||||||||||||
TSS firmwide overhead ratio (c) |
64 | 65 | 66 | 62 | 59 | 65 | 61 | |||||||||||||||||||||||||||||||||
FIRMWIDE BUSINESS METRICS |
||||||||||||||||||||||||||||||||||||||||
Assets under custody (in billions) |
$ | 14,857 | $ | 15,283 | $ | 14,885 | $ | 14,887 | $ | 13,748 | (3 | ) | 8 | $ | 14,857 | $ | 13,748 | 8 | ||||||||||||||||||||||
Number of: |
||||||||||||||||||||||||||||||||||||||||
US$ ACH transactions originated (in millions) |
970 | 949 | 975 | 965 | 978 | 2 | (1 | ) | 1,919 | 1,956 | (2 | ) | ||||||||||||||||||||||||||||
Total US$ clearing volume (in thousands) |
30,531 | 28,669 | 29,493 | 28,604 | 28,193 | 6 | 8 | 59,200 | 55,379 | 7 | ||||||||||||||||||||||||||||||
International electronic funds transfer volume
(in thousands) (d) |
58,484 | 55,754 | 53,354 | 48,533 | 47,096 | 5 | 24 | 114,238 | 91,461 | 25 | ||||||||||||||||||||||||||||||
Wholesale check volume (in millions) |
526 | 478 | 514 | 530 | 572 | 10 | (8 | ) | 1,004 | 1,140 | (12 | ) | ||||||||||||||||||||||||||||
Wholesale cards issued (in thousands) (e) |
28,066 | 27,352 | 27,138 | 26,977 | 25,501 | 3 | 10 | 28,066 | 25,501 | 10 | ||||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS |
||||||||||||||||||||||||||||||||||||||||
Net charge-offs |
$ | | $ | | $ | | $ | | $ | 17 | | NM | $ | | $ | 19 | NM | |||||||||||||||||||||||
Nonperforming loans |
14 | 14 | 14 | 14 | 14 | | | 14 | 14 | | ||||||||||||||||||||||||||||||
Allowance for credit losses: |
||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses |
48 | 57 | 88 | 15 | 15 | (16 | ) | 220 | 48 | 15 | 220 | |||||||||||||||||||||||||||||
Allowance for lending-related commitments |
68 | 76 | 84 | 104 | 92 | (11 | ) | (26 | ) | 68 | 92 | (26 | ) | |||||||||||||||||||||||||||
Total allowance for credit losses |
116 | 133 | 172 | 119 | 107 | (13 | ) | 8 | 116 | 107 | 8 | |||||||||||||||||||||||||||||
Net charge-offs rate |
| % | | % | | % | | % | 0.39 | % | | % | 0.20 | % | ||||||||||||||||||||||||||
Allowance for loan losses to period-end loans |
0.20 | 0.24 | 0.46 | 0.08 | 0.08 | 0.20 | 0.08 | |||||||||||||||||||||||||||||||||
Allowance for loan losses to average loans |
0.22 | 0.29 | 0.47 | 0.09 | 0.09 | 0.23 | 0.08 | |||||||||||||||||||||||||||||||||
Allowance for loan losses to nonperforming loans |
343 | 407 | NM | 107 | 107 | 343 | 107 | |||||||||||||||||||||||||||||||||
Nonperforming loans to period-end loans |
0.06 | 0.06 | 0.07 | 0.07 | 0.08 | 0.06 | 0.08 | |||||||||||||||||||||||||||||||||
Nonperforming loans to average loans |
0.06 | 0.07 | 0.07 | 0.08 | 0.08 | 0.07 | 0.07 |
(a) | TSS firmwide revenue includes foreign exchange (FX) revenue recorded in TSS and FX revenue associated with TSS customers who are FX customers of IB. However, some of the FX revenue associated with TSS customers who are FX customers of IB is not included in TS and TSS firmwide revenue. The total FX revenue generated was $175 million, $137 million, $162 million, $154 million and $191 million for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and $312 million and $345 million for year-to-date 2010 and 2009, respectively. | |
(b) | Firmwide liability balances include liability balances recorded in CB. | |
(c) | Overhead ratios have been calculated based on firmwide revenue and TSS and TS expense, respectively, including those allocated to certain other lines of business. FX revenue and expense recorded in IB for TSS-related FX activity are not included in this ratio. | |
(d) | International electronic funds transfer includes non-U.S. dollar Automated Clearing House (ACH) and clearing volume. | |
(e) | Wholesale cards issued and outstanding include U.S. domestic commercial, stored value, prepaid and government electronic benefit card products. |
Page 25
JPMORGAN CHASE & CO. | ||
ASSET MANAGEMENT | ||
FINANCIAL HIGHLIGHTS | ||
(in millions, except ratio, ranking and headcount data) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
INCOME STATEMENT |
||||||||||||||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||||||||||||||
Asset management, administration and commissions |
$ | 1,522 | $ | 1,508 | $ | 1,632 | $ | 1,443 | $ | 1,315 | 1 | % | 16 | % | $ | 3,030 | $ | 2,546 | 19 | % | ||||||||||||||||||||
All other income |
177 | 266 | 191 | 238 | 253 | (33 | ) | (30 | ) | 443 | 322 | 38 | ||||||||||||||||||||||||||||
Noninterest revenue |
1,699 | 1,774 | 1,823 | 1,681 | 1,568 | (4 | ) | 8 | 3,473 | 2,868 | 21 | |||||||||||||||||||||||||||||
Net interest income |
369 | 357 | 372 | 404 | 414 | 3 | (11 | ) | 726 | 817 | (11 | ) | ||||||||||||||||||||||||||||
TOTAL NET REVENUE |
2,068 | 2,131 | 2,195 | 2,085 | 1,982 | (3 | ) | 4 | 4,199 | 3,685 | 14 | |||||||||||||||||||||||||||||
Provision for credit losses |
5 | 35 | 58 | 38 | 59 | (86 | ) | (92 | ) | 40 | 92 | (57 | ) | |||||||||||||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||||||||||||||
Compensation expense |
861 | 910 | 907 | 858 | 810 | (5 | ) | 6 | 1,771 | 1,610 | 10 | |||||||||||||||||||||||||||||
Noncompensation expense |
527 | 514 | 543 | 474 | 525 | 3 | | 1,041 | 1,004 | 4 | ||||||||||||||||||||||||||||||
Amortization of intangibles |
17 | 18 | 20 | 19 | 19 | (6 | ) | (11 | ) | 35 | 38 | (8 | ) | |||||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE |
1,405 | 1,442 | 1,470 | 1,351 | 1,354 | (3 | ) | 4 | 2,847 | 2,652 | 7 | |||||||||||||||||||||||||||||
Income before income tax expense |
658 | 654 | 667 | 696 | 569 | 1 | 16 | 1,312 | 941 | 39 | ||||||||||||||||||||||||||||||
Income tax expense |
267 | 262 | 243 | 266 | 217 | 2 | 23 | 529 | 365 | 45 | ||||||||||||||||||||||||||||||
NET INCOME |
$ | 391 | $ | 392 | $ | 424 | $ | 430 | $ | 352 | | 11 | $ | 783 | $ | 576 | 36 | |||||||||||||||||||||||
REVENUE BY CLIENT SEGMENT |
||||||||||||||||||||||||||||||||||||||||
Private Bank |
$ | 695 | $ | 698 | $ | 723 | $ | 639 | $ | 640 | | 9 | $ | 1,393 | $ | 1,223 | 14 | |||||||||||||||||||||||
Retail |
482 | 415 | 445 | 471 | 411 | 16 | 17 | 897 | 664 | 35 | ||||||||||||||||||||||||||||||
Institutional |
433 | 566 | 584 | 534 | 487 | (23 | ) | (11 | ) | 999 | 947 | 5 | ||||||||||||||||||||||||||||
Private Wealth Management |
348 | 343 | 331 | 339 | 334 | 1 | 4 | 691 | 646 | 7 | ||||||||||||||||||||||||||||||
JPMorgan Securities (a) |
110 | 109 | 112 | 102 | 110 | 1 | | 219 | 205 | 7 | ||||||||||||||||||||||||||||||
TOTAL NET REVENUE |
$ | 2,068 | $ | 2,131 | $ | 2,195 | $ | 2,085 | $ | 1,982 | (3 | ) | 4 | $ | 4,199 | $ | 3,685 | 14 | ||||||||||||||||||||||
FINANCIAL RATIOS |
||||||||||||||||||||||||||||||||||||||||
ROE |
24 | % | 24 | % | 24 | % | 24 | % | 20 | % | 24 | % | 17 | % | ||||||||||||||||||||||||||
Overhead ratio |
68 | 68 | 67 | 65 | 68 | 68 | 72 | |||||||||||||||||||||||||||||||||
Pretax margin ratio (b) |
32 | 31 | 30 | 33 | 29 | 31 | 26 | |||||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (Period-end) |
||||||||||||||||||||||||||||||||||||||||
Loans |
$ | 38,744 | $ | 37,088 | $ | 37,755 | $ | 35,925 | $ | 35,474 | 4 | 9 | $ | 38,744 | $ | 35,474 | 9 | |||||||||||||||||||||||
Equity |
6,500 | 6,500 | 7,000 | 7,000 | 7,000 | | (7 | ) | 6,500 | 7,000 | (7 | ) | ||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (Average) |
||||||||||||||||||||||||||||||||||||||||
Total assets |
$ | 63,426 | $ | 62,525 | $ | 63,036 | $ | 60,345 | $ | 59,334 | 1 | 7 | $ | 62,978 | $ | 58,783 | 7 | |||||||||||||||||||||||
Loans |
37,407 | 36,602 | 36,137 | 34,822 | 34,292 | 2 | 9 | 37,007 | 34,438 | 7 | ||||||||||||||||||||||||||||||
Deposits |
86,453 | 80,662 | 77,352 | 73,649 | 75,355 | 7 | 15 | 83,573 | 78,534 | 6 | ||||||||||||||||||||||||||||||
Equity |
6,500 | 6,500 | 7,000 | 7,000 | 7,000 | | (7 | ) | 6,500 | 7,000 | (7 | ) | ||||||||||||||||||||||||||||
Headcount |
16,019 | 15,321 | 15,136 | 14,919 | 14,840 | 5 | 8 | 16,019 | 14,840 | 8 |
(a) | JPMorgan Securities was formerly known as Bear Stearns Private Client Services prior to January 1, 2010. | |
(b) | Pretax margin represents income before income tax expense divided by total net revenue, which is a measure of pretax performance and another basis by which management evaluates its performance and that of its competitors. |
Page 26
JPMORGAN CHASE & CO. | ||
ASSET MANAGEMENT | ||
FINANCIAL HIGHLIGHTS, CONTINUED | ||
(in millions, except ratio, ranking and headcount data) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
BUSINESS METRICS |
||||||||||||||||||||||||||||||||||||||||
Number of: |
||||||||||||||||||||||||||||||||||||||||
Client advisors |
2,055 | 1,987 | 1,934 | 1,891 | 1,838 | 3 | % | 12 | % | 2,055 | 1,838 | 12 | % | |||||||||||||||||||||||||||
Retirement planning services participants (in thousands) |
1,653 | 1,651 | 1,628 | 1,620 | 1,595 | | 4 | 1,653 | 1,595 | 4 | ||||||||||||||||||||||||||||||
JPMorgan Securities brokers (a) |
402 | 390 | 376 | 365 | 362 | 3 | 11 | 402 | 362 | 11 | ||||||||||||||||||||||||||||||
% of customer assets in 4 & 5 Star Funds (b) |
43 | % | 43 | % | 42 | % | 39 | % | 45 | % | | (4 | ) | 43 | % | 45 | % | (4 | ) | |||||||||||||||||||||
% of AUM in 1st and 2nd quartiles: (c) |
||||||||||||||||||||||||||||||||||||||||
1 year |
58 | % | 55 | % | 57 | % | 60 | % | 62 | % | 5 | (6 | ) | 58 | % | 62 | % | (6 | ) | |||||||||||||||||||||
3 years |
67 | % | 67 | % | 62 | % | 70 | % | 69 | % | | (3 | ) | 67 | % | 69 | % | (3 | ) | |||||||||||||||||||||
5 years |
78 | % | 77 | % | 74 | % | 74 | % | 80 | % | 1 | (3 | ) | 78 | % | 80 | % | (3 | ) | |||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS |
||||||||||||||||||||||||||||||||||||||||
Net charge-offs |
$ | 27 | $ | 28 | $ | 35 | $ | 17 | $ | 46 | (4 | ) | (41 | ) | $ | 55 | $ | 65 | (15 | ) | ||||||||||||||||||||
Nonperforming loans |
309 | 475 | 580 | 409 | 313 | (35 | ) | (1 | ) | 309 | 313 | (1 | ) | |||||||||||||||||||||||||||
Allowance for credit losses: |
||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses |
250 | 261 | 269 | 251 | 226 | (4 | ) | 11 | 250 | 226 | 11 | |||||||||||||||||||||||||||||
Allowance for lending-related commitments |
3 | 13 | 9 | 5 | 4 | (77 | ) | (25 | ) | 3 | 4 | (25 | ) | |||||||||||||||||||||||||||
Total allowance for credit losses |
253 | 274 | 278 | 256 | 230 | (8 | ) | 10 | 253 | 230 | 10 | |||||||||||||||||||||||||||||
Net charge-off rate |
0.29 | % | 0.31 | % | 0.38 | % | 0.19 | % | 0.54 | % | 0.30 | % | 0.38 | % | ||||||||||||||||||||||||||
Allowance for loan losses to period-end loans |
0.65 | 0.70 | 0.71 | 0.70 | 0.64 | 0.65 | 0.64 | |||||||||||||||||||||||||||||||||
Allowance for loan losses to average loans |
0.67 | 0.71 | 0.74 | 0.72 | 0.66 | 0.68 | 0.66 | |||||||||||||||||||||||||||||||||
Allowance for loan losses to nonperforming loans |
81 | 55 | 46 | 61 | 72 | 81 | 72 | |||||||||||||||||||||||||||||||||
Nonperforming loans to period-end loans |
0.80 | 1.28 | 1.54 | 1.14 | 0.88 | 0.80 | 0.88 | |||||||||||||||||||||||||||||||||
Nonperforming loans to average loans |
0.83 | 1.30 | 1.61 | 1.17 | 0.91 | 0.83 | 0.91 |
(a) | JPMorgan Securities was formerly known as Bear Stearns Private Client Services prior to January 1, 2010. | |
(b) | Derived from Morningstar for the United States, the United Kingdom, Luxembourg, France, Hong Kong and Taiwan; and Nomura for Japan. | |
(c) | Quartile ranking sourced from Lipper for the United States and Taiwan; Morningstar for the United Kingdom, Luxembourg, France and Hong Kong; and Nomura for Japan. |
Page 27
JPMORGAN CHASE & CO. | ||
ASSET MANAGEMENT | ||
FINANCIAL HIGHLIGHTS, CONTINUED | ||
(in billions) |
June 30, 2010 | ||||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||||
Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Jun 30 | ||||||||||||||||||||||
2010 | 2010 | 2009 | 2009 | 2009 | 2010 | 2009 | ||||||||||||||||||||||
ASSETS UNDER SUPERVISION (a) |
||||||||||||||||||||||||||||
Assets by asset class |
||||||||||||||||||||||||||||
Liquidity |
$ | 489 | $ | 521 | $ | 591 | $ | 634 | $ | 617 | (6 | )% | (21 | )% | ||||||||||||||
Fixed income |
259 | 246 | 226 | 215 | 194 | 5 | 34 | |||||||||||||||||||||
Equities and multi-asset |
322 | 355 | 339 | 316 | 264 | (9 | ) | 22 | ||||||||||||||||||||
Alternatives |
91 | 97 | 93 | 94 | 96 | (6 | ) | (5 | ) | |||||||||||||||||||
TOTAL ASSETS UNDER MANAGEMENT |
1,161 | 1,219 | 1,249 | 1,259 | 1,171 | (5 | ) | (1 | ) | |||||||||||||||||||
Custody / brokerage / administration / deposits |
479 | 488 | 452 | 411 | 372 | (2 | ) | 29 | ||||||||||||||||||||
TOTAL ASSETS UNDER SUPERVISION |
$ | 1,640 | $ | 1,707 | $ | 1,701 | $ | 1,670 | $ | 1,543 | (4 | ) | 6 | |||||||||||||||
Assets by client segment |
||||||||||||||||||||||||||||
Institutional |
$ | 634 | $ | 669 | $ | 709 | $ | 737 | $ | 697 | (5 | ) | (9 | ) | ||||||||||||||
Private Bank |
177 | 184 | 187 | 180 | 179 | (4 | ) | (1 | ) | |||||||||||||||||||
Retail |
269 | 282 | 270 | 256 | 216 | (5 | ) | 25 | ||||||||||||||||||||
Private Wealth Management |
66 | 70 | 69 | 71 | 67 | (6 | ) | (1 | ) | |||||||||||||||||||
JPMorgan Securities (b) |
15 | 14 | 14 | 15 | 12 | 7 | 25 | |||||||||||||||||||||
TOTAL ASSETS UNDER MANAGEMENT |
$ | 1,161 | $ | 1,219 | $ | 1,249 | $ | 1,259 | $ | 1,171 | (5 | ) | (1 | ) | ||||||||||||||
Institutional |
$ | 636 | $ | 670 | $ | 710 | $ | 737 | $ | 697 | (5 | ) | (9 | ) | ||||||||||||||
Private Bank |
469 | 476 | 452 | 414 | 390 | (1 | ) | 20 | ||||||||||||||||||||
Retail |
351 | 371 | 355 | 339 | 289 | (5 | ) | 21 | ||||||||||||||||||||
Private Wealth Management |
130 | 133 | 129 | 131 | 123 | (2 | ) | 6 | ||||||||||||||||||||
JPMorgan Securities (b) |
54 | 57 | 55 | 49 | 44 | (5 | ) | 23 | ||||||||||||||||||||
TOTAL ASSETS UNDER SUPERVISION |
$ | 1,640 | $ | 1,707 | $ | 1,701 | $ | 1,670 | $ | 1,543 | (4 | ) | 6 | |||||||||||||||
Assets by geographic region |
||||||||||||||||||||||||||||
U.S. / Canada |
$ | 791 | $ | 815 | $ | 837 | $ | 862 | $ | 814 | (3 | ) | (3 | ) | ||||||||||||||
International |
370 | 404 | 412 | 397 | 357 | (8 | ) | 4 | ||||||||||||||||||||
TOTAL ASSETS UNDER MANAGEMENT |
$ | 1,161 | $ | 1,219 | $ | 1,249 | $ | 1,259 | $ | 1,171 | (5 | ) | (1 | ) | ||||||||||||||
U.S. / Canada |
$ | 1,151 | $ | 1,189 | $ | 1,182 | $ | 1,179 | $ | 1,103 | (3 | ) | 4 | |||||||||||||||
International |
489 | 518 | 519 | 491 | 440 | (6 | ) | 11 | ||||||||||||||||||||
TOTAL ASSETS UNDER SUPERVISION |
$ | 1,640 | $ | 1,707 | $ | 1,701 | $ | 1,670 | $ | 1,543 | (4 | ) | 6 | |||||||||||||||
Mutual fund assets by asset class |
||||||||||||||||||||||||||||
Liquidity |
$ | 440 | $ | 470 | $ | 539 | $ | 576 | $ | 569 | (6 | ) | (23 | ) | ||||||||||||||
Fixed income |
79 | 76 | 67 | 57 | 48 | 4 | 65 | |||||||||||||||||||||
Equities and multi-asset |
133 | 150 | 143 | 133 | 111 | (11 | ) | 20 | ||||||||||||||||||||
Alternatives |
8 | 9 | 9 | 10 | 9 | (11 | ) | (11 | ) | |||||||||||||||||||
TOTAL MUTUAL FUND ASSETS |
$ | 660 | $ | 705 | $ | 758 | $ | 776 | $ | 737 | (6 | ) | (10 | ) | ||||||||||||||
(a) | Excludes assets under management of American Century Companies, Inc. in which the Firm has had a 42% ownership in all the periods presented. | |
(b) | JPMorgan Securities was formerly known as Bear Stearns Private Client Services prior to January 1, 2010. |
Page 28
JPMORGAN CHASE & CO. | ||
ASSET MANAGEMENT | ||
FINANCIAL HIGHLIGHTS, CONTINUED | ||
(in billions) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 2010 | 2009 | ||||||||||||||||||||||
ASSETS UNDER SUPERVISION (continued) |
||||||||||||||||||||||||||||
Assets under management rollforward |
||||||||||||||||||||||||||||
Beginning balance |
$ | 1,219 | $ | 1,249 | $ | 1,259 | $ | 1,171 | $ | 1,115 | $ | 1,249 | $ | 1,133 | ||||||||||||||
Net asset flows: |
||||||||||||||||||||||||||||
Liquidity |
(29 | ) | (62 | ) | (44 | ) | 9 | (7 | ) | (91 | ) | 12 | ||||||||||||||||
Fixed income |
12 | 16 | 12 | 13 | 8 | 28 | 9 | |||||||||||||||||||||
Equities, multi-asset and alternatives |
1 | 6 | 8 | 12 | 2 | 7 | (3 | ) | ||||||||||||||||||||
Market / performance / other impacts |
(42 | ) | 10 | 14 | 54 | 53 | (32 | ) | 20 | |||||||||||||||||||
TOTAL ASSETS UNDER MANAGEMENT |
$ | 1,161 | $ | 1,219 | $ | 1,249 | $ | 1,259 | $ | 1,171 | $ | 1,161 | $ | 1,171 | ||||||||||||||
Assets under supervision rollforward |
||||||||||||||||||||||||||||
Beginning balance |
$ | 1,707 | $ | 1,701 | $ | 1,670 | $ | 1,543 | $ | 1,464 | $ | 1,701 | $ | 1,496 | ||||||||||||||
Net asset flows |
(4 | ) | (10 | ) | (11 | ) | 45 | (9 | ) | (14 | ) | 16 | ||||||||||||||||
Market / performance / other impacts |
(63 | ) | 16 | 42 | 82 | 88 | (47 | ) | 31 | |||||||||||||||||||
TOTAL ASSETS UNDER SUPERVISION |
$ | 1,640 | $ | 1,707 | $ | 1,701 | $ | 1,670 | $ | 1,543 | $ | 1,640 | $ | 1,543 | ||||||||||||||
Page 29
JPMORGAN CHASE & CO. | ||
CORPORATE/PRIVATE EQUITY | ||
FINANCIAL HIGHLIGHTS | ||
(in millions, except headcount data) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
INCOME STATEMENT |
||||||||||||||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||||||||||||||
Principal transactions |
$ | (69 | ) | $ | 547 | $ | 715 | $ | 1,109 | $ | 1,243 | NM | % | NM | % | $ | 478 | $ | (250 | ) | NM | % | ||||||||||||||||||
Securities gains |
990 | 610 | 378 | 181 | 366 | 62 | 170 | 1,600 | 580 | 176 | ||||||||||||||||||||||||||||||
All other income |
182 | 124 | 13 | 273 | (209 | ) | 47 | NM | 306 | (228 | ) | NM | ||||||||||||||||||||||||||||
Noninterest revenue |
1,103 | 1,281 | 1,106 | 1,563 | 1,400 | (14 | ) | (21 | ) | 2,384 | 102 | NM | ||||||||||||||||||||||||||||
Net interest income |
747 | 1,076 | 978 | 1,031 | 865 | (31 | ) | (14 | ) | 1,823 | 1,854 | (2 | ) | |||||||||||||||||||||||||||
TOTAL NET REVENUE (a) |
1,850 | 2,357 | 2,084 | 2,594 | 2,265 | (22 | ) | (18 | ) | 4,207 | 1,956 | 115 | ||||||||||||||||||||||||||||
Provision for credit losses |
(2 | ) | 17 | 9 | 62 | 9 | NM | NM | 15 | 9 | 67 | |||||||||||||||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||||||||||||||
Compensation expense |
770 | 475 | 747 | 768 | 655 | 62 | 18 | 1,245 | 1,296 | (4 | ) | |||||||||||||||||||||||||||||
Noncompensation expense (b) |
1,468 | 3,041 | 1,058 | 875 | 1,319 | (52 | ) | 11 | 4,509 | 1,664 | 171 | |||||||||||||||||||||||||||||
Merger costs |
| | 30 | 103 | 143 | | NM | | 348 | NM | ||||||||||||||||||||||||||||||
Subtotal |
2,238 | 3,516 | 1,835 | 1,746 | 2,117 | (36 | ) | 6 | 5,754 | 3,308 | 74 | |||||||||||||||||||||||||||||
Net expense allocated to other businesses |
(1,192 | ) | (1,180 | ) | (1,219 | ) | (1,243 | ) | (1,253 | ) | (1 | ) | 5 | (2,372 | ) | (2,532 | ) | 6 | ||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE |
1,046 | 2,336 | 616 | 503 | 864 | (55 | ) | 21 | 3,382 | 776 | 336 | |||||||||||||||||||||||||||||
Income/(loss) before income tax expense (benefit)
and extraordinary gain |
806 | 4 | 1,459 | 2,029 | 1,392 | NM | (42 | ) | 810 | 1,171 | (31 | ) | ||||||||||||||||||||||||||||
Income tax expense/(benefit) (c) |
153 | (224 | ) | 262 | 818 | 584 | NM | (74 | ) | (71 | ) | 625 | NM | |||||||||||||||||||||||||||
Income/(loss) before extraordinary gain |
653 | 228 | 1,197 | 1,211 | 808 | 186 | (19 | ) | 881 | 546 | 61 | |||||||||||||||||||||||||||||
Extraordinary gain (d) |
| | | 76 | | | | | | | ||||||||||||||||||||||||||||||
NET INCOME/(LOSS) |
$ | 653 | $ | 228 | $ | 1,197 | $ | 1,287 | $ | 808 | 186 | (19 | ) | $ | 881 | $ | 546 | 61 | ||||||||||||||||||||||
MEMO: |
||||||||||||||||||||||||||||||||||||||||
TOTAL NET REVENUE |
||||||||||||||||||||||||||||||||||||||||
Private equity |
$ | 48 | $ | 115 | $ | 296 | $ | 172 | $ | (1 | ) | (58 | ) | NM | $ | 163 | $ | (450 | ) | NM | ||||||||||||||||||||
Corporate |
1,802 | 2,242 | 1,788 | 2,422 | 2,266 | (20 | ) | (20 | ) | 4,044 | 2,406 | 68 | ||||||||||||||||||||||||||||
TOTAL NET REVENUE |
$ | 1,850 | $ | 2,357 | $ | 2,084 | $ | 2,594 | $ | 2,265 | (22 | ) | (18 | ) | $ | 4,207 | $ | 1,956 | 115 | |||||||||||||||||||||
NET INCOME/(LOSS) |
||||||||||||||||||||||||||||||||||||||||
Private equity |
$ | 11 | $ | 55 | $ | 141 | $ | 88 | $ | (27 | ) | (80 | ) | NM | $ | 66 | $ | (307 | ) | NM | ||||||||||||||||||||
Corporate (e) |
642 | 173 | 1,056 | 1,199 | 835 | 271 | (23 | ) | 815 | 853 | (4 | ) | ||||||||||||||||||||||||||||
TOTAL NET INCOME/(LOSS) |
$ | 653 | $ | 228 | $ | 1,197 | $ | 1,287 | $ | 808 | 186 | (19 | ) | $ | 881 | $ | 546 | 61 | ||||||||||||||||||||||
Headcount |
19,482 | 19,307 | 20,119 | 20,747 | 21,522 | 1 | (9 | ) | 19,482 | 21,522 | (9 | ) |
(a) | Total net revenue included tax-equivalent adjustments, predominantly due to tax-exempt income from municipal bond investments of $57 million, $48 million, $41 million, $40 million and $44 million for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and $105 million and $70 million for year-to-date 2010 and 2009, respectively. | |
(b) | The first quarter of 2010 included a $2.3 billion increase reflecting increased litigation reserves, including those for mortgage-related matters. The second quarter of 2009 included a $675 million FDIC special assessment. | |
(c) | The income tax expense in the first quarter of 2010 and fourth quarter of 2009 includes tax benefits recognized upon the resolution of tax audits. | |
(d) | On September 25, 2008, JPMorgan Chase acquired the banking operations of Washington Mutual. The acquisition resulted in negative goodwill, and accordingly, the Firm recognized an extraordinary gain. A preliminary gain of $1.9 billion was recognized at December 31, 2008. The final total extraordinary gain that resulted from the Washington Mutual transaction was $2.0 billion. | |
(e) | The 2009 periods included merger costs and the extraordinary gain related to the Washington Mutual transaction, as well as items related to the Bear Stearns merger, including merger costs, asset management liquidation costs and Bear Stearns Private Client Services (which was renamed to JPMorgan Securities effective January 2010) broker retention expense. |
Page 30
JPMORGAN CHASE & CO. | ||
CORPORATE/PRIVATE EQUITY | ||
FINANCIAL HIGHLIGHTS, CONTINUED | ||
(in millions) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION |
||||||||||||||||||||||||||||||||||||||||
TREASURY and CIO |
||||||||||||||||||||||||||||||||||||||||
Securities gains (a) |
$ | 989 | $ | 610 | $ | 378 | $ | 181 | $ | 374 | 62 | % | 164 | % | $ | 1,599 | $ | 588 | 172 | % | ||||||||||||||||||||
Investment securities portfolio (average) |
320,578 | 330,584 | 353,224 | 339,745 | 336,263 | (3 | ) | (5 | ) | 325,553 | 301,219 | 8 | ||||||||||||||||||||||||||||
Investment securities portfolio (ending) |
305,288 | 337,442 | 340,163 | 351,823 | 326,414 | (10 | ) | (6 | ) | 305,288 | 326,414 | (6 | ) | |||||||||||||||||||||||||||
Mortgage loans (average) |
8,539 | 8,162 | 7,794 | 7,469 | 7,228 | 5 | 18 | 8,352 | 7,219 | 16 | ||||||||||||||||||||||||||||||
Mortgage loans (ending) |
8,900 | 8,368 | 8,023 | 7,665 | 7,368 | 6 | 21 | 8,900 | 7,368 | 21 | ||||||||||||||||||||||||||||||
PRIVATE EQUITY |
||||||||||||||||||||||||||||||||||||||||
Private equity gains/(losses) |
||||||||||||||||||||||||||||||||||||||||
Direct investments |
||||||||||||||||||||||||||||||||||||||||
Realized gains |
$ | 78 | $ | 113 | $ | 12 | $ | 57 | $ | 25 | (31 | ) | 212 | $ | 191 | $ | 40 | 378 | ||||||||||||||||||||||
Unrealized gains/(losses) (b) |
(7 | ) | (75 | ) | 224 | 88 | 16 | 91 | NM | (82 | ) | (393 | ) | 79 | ||||||||||||||||||||||||||
Total direct investments |
71 | 38 | 236 | 145 | 41 | 87 | 73 | 109 | (353 | ) | NM | |||||||||||||||||||||||||||||
Third-party fund investments |
4 | 98 | 37 | 10 | (61 | ) | (96 | ) | NM | 102 | (129 | ) | NM | |||||||||||||||||||||||||||
Total private equity gains/(losses) (c) |
$ | 75 | $ | 136 | $ | 273 | $ | 155 | $ | (20 | ) | (45 | ) | NM | $ | 211 | $ | (482 | ) | NM | ||||||||||||||||||||
Private equity portfolio information |
||||||||||||||||||||||||||||||||||||||||
Direct investments |
||||||||||||||||||||||||||||||||||||||||
Publicly-held securities |
||||||||||||||||||||||||||||||||||||||||
Carrying value |
$ | 873 | $ | 890 | $ | 762 | $ | 674 | $ | 431 | (2 | ) | 103 | |||||||||||||||||||||||||||
Cost |
901 | 793 | 743 | 751 | 778 | 14 | 16 | |||||||||||||||||||||||||||||||||
Quoted public value |
974 | 982 | 791 | 720 | 477 | (1 | ) | 104 | ||||||||||||||||||||||||||||||||
Privately-held direct securities |
||||||||||||||||||||||||||||||||||||||||
Carrying value |
5,464 | 4,782 | 5,104 | 4,722 | 4,709 | 14 | 16 | |||||||||||||||||||||||||||||||||
Cost |
6,507 | 5,795 | 5,959 | 5,823 | 5,627 | 12 | 16 | |||||||||||||||||||||||||||||||||
Third-party fund investments (d) |
||||||||||||||||||||||||||||||||||||||||
Carrying value |
1,782 | 1,603 | 1,459 | 1,440 | 1,420 | 11 | 25 | |||||||||||||||||||||||||||||||||
Cost |
2,315 | 2,134 | 2,079 | 2,068 | 2,055 | 8 | 13 | |||||||||||||||||||||||||||||||||
Total private equity portfolio Carrying value |
$ | 8,119 | $ | 7,275 | $ | 7,325 | $ | 6,836 | $ | 6,560 | 12 | 24 | ||||||||||||||||||||||||||||
Total private equity portfolio Cost |
$ | 9,723 | $ | 8,722 | $ | 8,781 | $ | 8,642 | $ | 8,460 | 11 | 15 | ||||||||||||||||||||||||||||
(a) | All periods reflect repositioning of the Corporate investment securities portfolio, and exclude gains/losses on securities used to manage risk associated with MSRs. | |
(b) | Unrealized gains/(losses) contain reversals of unrealized gains and losses that were recognized in prior periods and have now been realized. | |
(c) | Included in principal transactions revenue in the Consolidated Statements of Income. | |
(d) | Unfunded commitments to third-party private equity funds were $1.2 billion, $1.4 billion, $1.5 billion, $1.4 billion and $1.5 billion at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively. |
Page 31
JPMORGAN CHASE & CO. | ||
CREDIT-RELATED INFORMATION | ||
(in millions) |
June 30, 2010 | ||||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||||
Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Jun 30 | ||||||||||||||||||||||
2010 | 2010 | 2009 | 2009 | 2009 | 2010 | 2009 | ||||||||||||||||||||||
CREDIT EXPOSURE |
||||||||||||||||||||||||||||
WHOLESALE (a) |
||||||||||||||||||||||||||||
Loans retained (b) |
$ | 212,987 | $ | 210,211 | $ | 200,077 | $ | 213,718 | $ | 224,080 | 1 | % | (5 | )% | ||||||||||||||
Loans held-for-sale and loans at fair value |
3,839 | 4,079 | 4,098 | 5,235 | 7,545 | (6 | ) | (49 | ) | |||||||||||||||||||
TOTAL WHOLESALE LOANS REPORTED |
216,826 | 214,290 | 204,175 | 218,953 | 231,625 | 1 | (6 | ) | ||||||||||||||||||||
CONSUMER (c) |
||||||||||||||||||||||||||||
Home loan
portfolio excluding purchased credit-impaired loans: |
||||||||||||||||||||||||||||
Home equity |
94,761 | 97,642 | 101,425 | 104,795 | 108,229 | (3 | ) | (12 | ) | |||||||||||||||||||
Prime mortgage (b) |
66,429 | 68,210 | 66,892 | 67,597 | 68,878 | (3 | ) | (4 | ) | |||||||||||||||||||
Subprime mortgage (b) |
12,597 | 13,219 | 12,526 | 13,270 | 13,825 | (5 | ) | (9 | ) | |||||||||||||||||||
Option ARMs (b) |
8,594 | 8,644 | 8,536 | 8,852 | 9,034 | (1 | ) | (5 | ) | |||||||||||||||||||
Total home loan portfolio excluding
purchased credit-impaired loans |
182,381 | 187,715 | 189,379 | 194,514 | 199,966 | (3 | ) | (9 | ) | |||||||||||||||||||
Home loan portfolio purchased credit-impaired loans: (d) |
||||||||||||||||||||||||||||
Home equity |
25,471 | 26,012 | 26,520 | 27,088 | 27,729 | (2 | ) | (8 | ) | |||||||||||||||||||
Prime mortgage |
18,512 | 19,203 | 19,693 | 20,229 | 20,807 | (4 | ) | (11 | ) | |||||||||||||||||||
Subprime mortgage |
5,662 | 5,848 | 5,993 | 6,135 | 6,341 | (3 | ) | (11 | ) | |||||||||||||||||||
Option ARMs |
27,256 | 28,260 | 29,039 | 29,750 | 30,529 | (4 | ) | (11 | ) | |||||||||||||||||||
Total home loan portfolio purchased credit-impaired loans |
76,901 | 79,323 | 81,245 | 83,202 | 85,406 | (3 | ) | (10 | ) | |||||||||||||||||||
Other consumer: |
||||||||||||||||||||||||||||
Auto (b) |
47,548 | 47,381 | 46,031 | 44,309 | 42,887 | | 11 | |||||||||||||||||||||
Credit card reported: |
||||||||||||||||||||||||||||
Loans excluding those held by the WaMu Master Trust (b) |
142,994 | 149,260 | 77,784 | 75,207 | 80,722 | (4 | ) | 77 | ||||||||||||||||||||
Loans held by the WaMu Master Trust (e) |
| | 1,002 | 3,008 | 5,014 | | NM | |||||||||||||||||||||
Total credit card reported |
142,994 | 149,260 | 78,786 | 78,215 | 85,736 | (4 | ) | 67 | ||||||||||||||||||||
Other loans (b) |
32,399 | 32,951 | 31,700 | 32,405 | 33,041 | (2 | ) | (2 | ) | |||||||||||||||||||
Loans retained |
482,223 | 496,630 | 427,141 | 432,645 | 447,036 | (3 | ) | 8 | ||||||||||||||||||||
Loans held-for-sale (f) |
434 | 2,879 | 2,142 | 1,546 | 1,940 | (85 | ) | (78 | ) | |||||||||||||||||||
TOTAL CONSUMER LOANS REPORTED |
482,657 | 499,509 | 429,283 | 434,191 | 448,976 | (3 | ) | 8 | ||||||||||||||||||||
TOTAL LOANS REPORTED |
699,483 | 713,799 | 633,458 | 653,144 | 680,601 | (2 | ) | 3 | ||||||||||||||||||||
Credit card securitized (b) |
N/A | N/A | 84,626 | 87,028 | 85,790 | NM | NM | |||||||||||||||||||||
TOTAL MANAGED LOANS (b) |
699,483 | 713,799 | 718,084 | 740,172 | 766,391 | (2 | ) | (9 | ) | |||||||||||||||||||
Derivative receivables |
80,215 | 79,416 | 80,210 | 94,065 | 97,491 | 1 | (18 | ) | ||||||||||||||||||||
Receivables from customers |
22,966 | 16,314 | 15,745 | 13,148 | 12,977 | 41 | 77 | |||||||||||||||||||||
Interests in purchased receivables (b) |
1,836 | 2,579 | 2,927 | 2,329 | 2,972 | (29 | ) | (38 | ) | |||||||||||||||||||
TOTAL CREDIT-RELATED ASSETS |
804,500 | 812,108 | 816,966 | 849,714 | 879,831 | (1 | ) | (9 | ) | |||||||||||||||||||
Wholesale lending-related commitments (b) |
324,552 | 326,921 | 347,155 | 343,135 | 343,991 | (1 | ) | (6 | ) | |||||||||||||||||||
TOTAL |
$ | 1,129,052 | $ | 1,139,029 | $ | 1,164,121 | $ | 1,192,849 | $ | 1,223,822 | (1 | ) | (8 | ) | ||||||||||||||
Memo: Total by category |
||||||||||||||||||||||||||||
Total wholesale exposure (g) |
$ | 646,395 | $ | 639,520 | $ | 650,212 | $ | 671,630 | $ | 689,056 | 1 | (6 | ) | |||||||||||||||
Total consumer loans (h) |
482,657 | 499,509 | 513,909 | 521,219 | 534,766 | (3 | ) | (10 | ) | |||||||||||||||||||
Total |
$ | 1,129,052 | $ | 1,139,029 | $ | 1,164,121 | $ | 1,192,849 | $ | 1,223,822 | (1 | ) | (8 | ) | ||||||||||||||
(a) | Includes Investment Bank, Commercial Banking, Treasury & Securities Services and Asset Management. | |
(b) | Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. As a result of the consolidation of the credit card securitization trusts, reported and managed basis relating to credit card securitizations are equivalent for periods beginning after January 1, 2010. For further details regarding the Firms application and impact of the new guidance, see footnote (a) on page 3. | |
(c) | Includes Retail Financial Services, Card Services and residential mortgage loans reported in the Corporate/Private Equity segment to be risk managed by the Chief Investment Office. | |
(d) | Purchased credit-impaired loans represent loans acquired in the Washington Mutual transaction for which a deterioration in credit quality occurred between the origination date and JPMorgan Chases acquisition date. These loans were initially recorded at fair value and accrete interest income over the estimated lives of the loans as long as cash flows are reasonably estimable, even if the underlying loans are contractually past due. | |
(e) | Represents the remaining balance of loans measured at fair value within the Washington Mutual Master Trust that were consolidated onto the Firms balance sheet during the second quarter of 2009. No allowance for loan losses was recorded for these loans as of December 31, 2009, September 30, 2009 and June 30, 2009. | |
(f) | Included loans for prime mortgage of $185 million, $558 million, $450 million, $187 million and $589 million at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and other (largely student loans) of $249 million, $2.3 billion, $1.7 billion, $1.4 billion and $1.4 billion at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively. | |
(g) | Primarily represents total wholesale loans, derivative receivables, wholesale lending-related commitments and receivables from customers. | |
(h) | Represents total consumer loans and excludes consumer lending-related commitments. | |
N/A: Not Applicable. |
Page 32
JPMORGAN CHASE & CO. | ||
CREDIT-RELATED INFORMATION, CONTINUED | ||
(in millions) |
June 30, 2010 | ||||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||||
Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Jun 30 | ||||||||||||||||||||||
2010 | 2010 | 2009 | 2009 | 2009 | 2010 | 2009 | ||||||||||||||||||||||
CREDIT EXPOSURE (continued) |
||||||||||||||||||||||||||||
Risk profile of wholesale credit exposure: |
||||||||||||||||||||||||||||
Investment-grade |
$ | 463,223 | $ | 457,471 | $ | 460,702 | $ | 474,005 | $ | 491,168 | 1 | % | (6 | )% | ||||||||||||||
Noninvestment-grade: |
||||||||||||||||||||||||||||
Noncriticized |
128,020 | 129,368 | 133,557 | 141,578 | 141,408 | (1 | ) | (9 | ) | |||||||||||||||||||
Criticized performing |
20,911 | 23,451 | 26,095 | 27,217 | 26,453 | (11 | ) | (21 | ) | |||||||||||||||||||
Criticized nonperforming |
5,600 | 6,258 | 7,088 | 8,118 | 6,533 | (11 | ) | (14 | ) | |||||||||||||||||||
Total noninvestment-grade |
154,531 | 159,077 | 166,740 | 176,913 | 174,394 | (3 | ) | (11 | ) | |||||||||||||||||||
Loans held-for-sale and loans at fair value |
3,839 | 4,079 | 4,098 | 5,235 | 7,545 | (6 | ) | (49 | ) | |||||||||||||||||||
Receivables from customers |
22,966 | 16,314 | 15,745 | 13,148 | 12,977 | 41 | 77 | |||||||||||||||||||||
Interests in purchased receivables (a) |
1,836 | 2,579 | 2,927 | 2,329 | 2,972 | (29 | ) | (38 | ) | |||||||||||||||||||
Total wholesale exposure |
$ | 646,395 | $ | 639,520 | $ | 650,212 | $ | 671,630 | $ | 689,056 | 1 | (6 | ) | |||||||||||||||
(a) | Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. For further details regarding the Firms application and impact of the new guidance, see footnote (a) on page 3. | |
Note: The risk profile is based on JPMorgan Chases internal risk ratings. For further details on the Firms internal risk ratings, refer to Glossary of Terms on page 43. |
Page 33
JPMORGAN CHASE & CO. | ||
CREDIT-RELATED INFORMATION, CONTINUED | ||
(in millions, except ratio data) |
June 30, 2010 | ||||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||||
Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Jun 30 | ||||||||||||||||||||||
2010 | 2010 | 2009 | 2009 | 2009 | 2010 | 2009 | ||||||||||||||||||||||
NONPERFORMING ASSETS AND RATIOS |
||||||||||||||||||||||||||||
WHOLESALE LOANS |
||||||||||||||||||||||||||||
Loans retained |
$ | 5,285 | $ | 5,895 | $ | 6,559 | $ | 7,494 | $ | 5,829 | (10 | )% | (9 | )% | ||||||||||||||
Loans held-for-sale and loans at fair value |
375 | 331 | 345 | 146 | 133 | 13 | 182 | |||||||||||||||||||||
TOTAL WHOLESALE LOANS |
5,660 | 6,226 | 6,904 | 7,640 | 5,962 | (9 | ) | (5 | ) | |||||||||||||||||||
CONSUMER LOANS |
||||||||||||||||||||||||||||
Home loan portfolio: |
||||||||||||||||||||||||||||
Home equity |
1,211 | 1,427 | 1,665 | 1,598 | 1,487 | (15 | ) | (19 | ) | |||||||||||||||||||
Prime mortgage |
4,653 | 4,579 | 4,355 | 4,007 | 3,501 | 2 | 33 | |||||||||||||||||||||
Subprime mortgage |
3,115 | 3,331 | 3,248 | 3,233 | 2,773 | (6 | ) | 12 | ||||||||||||||||||||
Option ARMs |
409 | 348 | 312 | 244 | 182 | 18 | 125 | |||||||||||||||||||||
Total home loan portfolio |
9,388 | 9,685 | 9,580 | 9,082 | 7,943 | (3 | ) | 18 | ||||||||||||||||||||
Auto loans |
155 | 174 | 177 | 179 | 154 | (11 | ) | 1 | ||||||||||||||||||||
Credit card reported |
3 | 3 | 3 | 3 | 4 | | (25 | ) | ||||||||||||||||||||
Other loans |
973 | 962 | 900 | 863 | 722 | 1 | 35 | |||||||||||||||||||||
TOTAL CONSUMER LOANS (a)(b) |
10,519 | 10,824 | 10,660 | 10,127 | 8,823 | (3 | ) | 19 | ||||||||||||||||||||
TOTAL NONPERFORMING LOANS REPORTED (c) |
16,179 | 17,050 | 17,564 | 17,767 | 14,785 | (5 | ) | 9 | ||||||||||||||||||||
Derivative receivables |
315 | 363 | 529 | 624 | 704 | (13 | ) | (55 | ) | |||||||||||||||||||
Assets acquired in loan satisfactions |
1,662 | 1,606 | 1,648 | 1,971 | 2,028 | 3 | (18 | ) | ||||||||||||||||||||
TOTAL NONPERFORMING ASSETS (a) |
$ | 18,156 | $ | 19,019 | $ | 19,741 | $ | 20,362 | $ | 17,517 | (5 | ) | 4 | |||||||||||||||
TOTAL NONPERFORMING LOANS TO TOTAL
LOANS REPORTED |
2.31 | % | 2.39 | % | 2.77 | % | 2.72 | % | 2.17 | % | ||||||||||||||||||
NONPERFORMING ASSETS BY LOB |
||||||||||||||||||||||||||||
Investment Bank |
$ | 2,726 | $ | 3,289 | $ | 4,236 | $ | 5,782 | $ | 4,534 | (17 | ) | (40 | ) | ||||||||||||||
Retail Financial Services (b) |
11,731 | 11,974 | 11,864 | 11,641 | 10,351 | (2 | ) | 13 | ||||||||||||||||||||
Card Services |
3 | 3 | 3 | 3 | 4 | | (25 | ) | ||||||||||||||||||||
Commercial Banking |
3,285 | 3,186 | 2,989 | 2,461 | 2,255 | 3 | 46 | |||||||||||||||||||||
Treasury & Securities Services |
14 | 14 | 14 | 14 | 14 | | | |||||||||||||||||||||
Asset Management |
337 | 498 | 582 | 422 | 326 | (32 | ) | 3 | ||||||||||||||||||||
Corporate/Private Equity (d) |
60 | 55 | 53 | 39 | 33 | 9 | 82 | |||||||||||||||||||||
TOTAL |
$ | 18,156 | $ | 19,019 | $ | 19,741 | $ | 20,362 | $ | 17,517 | (5 | ) | 4 | |||||||||||||||
(a) | Nonperforming assets exclude: (1) nonaccruing mortgage loans insured by U.S. government agencies of $10.1 billion, $10.5 billion, $9.0 billion, $7.0 billion and $4.2 billion at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively; (2) real estate owned insured by U.S. government agencies of $1.4 billion, $707 million, $579 million, $579 million and $508 million at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively; and (3) student loans that are 90 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program, of $447 million, $581 million, $542 million, $511 million and $473 million at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively. These amounts are excluded as reimbursement is proceeding normally. In addition, the Firms policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance. Under guidance issued by the Federal Financial Institutions Examination Council, credit card loans are charged off by the end of the month in which the account becomes 180 days past due or within 60 days from receiving notification about a specified event (e.g., bankruptcy of the borrower), whichever is earlier. | |
(b) | Excludes home lending purchased credit-impaired loans that were acquired as part of the Washington Mutual transaction. These loans are accounted for on a pool basis, and the pools are considered to be performing. Also excludes loans held-for-sale and loans at fair value. | |
(c) | Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. For further details regarding the Firms application and impact of the new guidance, see footnote (a) on page 3. | |
(d) | Predominantly relates to held-for-investment prime mortgage loans. |
Page 34
JPMORGAN CHASE & CO. | ||
CREDIT-RELATED INFORMATION, CONTINUED | ||
(in millions, except ratio data) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
GROSS CHARGE-OFFS (a) |
||||||||||||||||||||||||||||||||||||||||
Wholesale loans |
$ | 264 | $ | 1,014 | $ | 1,230 | $ | 1,093 | $ | 697 | (74 | )% | (62 | )% | $ | 1,278 | $ | 903 | 42 | % | ||||||||||||||||||||
Consumer loans, excluding credit card |
1,874 | 2,555 | 2,825 | 2,634 | 2,718 | (27 | ) | (31 | ) | 4,429 | 4,962 | (11 | ) | |||||||||||||||||||||||||||
Credit card loans reported |
4,063 | 4,882 | 2,405 | 2,894 | 2,883 | (17 | ) | 41 | 8,945 | 5,072 | 76 | |||||||||||||||||||||||||||||
Total loans reported |
6,201 | 8,451 | 6,460 | 6,621 | 6,298 | (27 | ) | (2 | ) | 14,652 | 10,937 | 34 | ||||||||||||||||||||||||||||
Credit card loans securitized |
N/A | N/A | 1,733 | 1,810 | 1,776 | NM | NM | N/A | 3,355 | NM | ||||||||||||||||||||||||||||||
Total loans managed |
6,201 | 8,451 | 8,193 | 8,431 | 8,074 | (27 | ) | (23 | ) | 14,652 | 14,292 | 3 | ||||||||||||||||||||||||||||
RECOVERIES (a) |
||||||||||||||||||||||||||||||||||||||||
Wholesale loans |
33 | 55 | 26 | 35 | 18 | (40 | ) | 83 | 88 | 33 | 167 | |||||||||||||||||||||||||||||
Consumer loans, excluding credit card |
112 | 116 | 74 | 13 | 67 | (3 | ) | 67 | 228 | 135 | 69 | |||||||||||||||||||||||||||||
Credit card loans reported |
342 | 370 | 183 | 200 | 194 | (8 | ) | 76 | 712 | 354 | 101 | |||||||||||||||||||||||||||||
Total loans reported |
487 | 541 | 283 | 248 | 279 | (10 | ) | 75 | 1,028 | 522 | 97 | |||||||||||||||||||||||||||||
Credit card loans securitized |
N/A | N/A | 116 | 112 | 112 | NM | NM | N/A | 227 | NM | ||||||||||||||||||||||||||||||
Total loans managed |
487 | 541 | 399 | 360 | 391 | (10 | ) | 25 | 1,028 | 749 | 37 | |||||||||||||||||||||||||||||
NET CHARGE-OFFS (a) |
||||||||||||||||||||||||||||||||||||||||
Wholesale loans |
231 | 959 | 1,204 | 1,058 | 679 | (76 | ) | (66 | ) | 1,190 | 870 | 37 | ||||||||||||||||||||||||||||
Consumer loans, excluding credit card |
1,762 | 2,439 | 2,751 | 2,621 | 2,651 | (28 | ) | (34 | ) | 4,201 | 4,827 | (13 | ) | |||||||||||||||||||||||||||
Credit card loans reported |
3,721 | 4,512 | 2,222 | 2,694 | 2,689 | (18 | ) | 38 | 8,233 | 4,718 | 75 | |||||||||||||||||||||||||||||
Total loans reported |
5,714 | 7,910 | 6,177 | 6,373 | 6,019 | (28 | ) | (5 | ) | 13,624 | 10,415 | 31 | ||||||||||||||||||||||||||||
Credit card loans securitized |
N/A | N/A | 1,617 | 1,698 | 1,664 | NM | NM | N/A | 3,128 | NM | ||||||||||||||||||||||||||||||
Total loans managed |
$ | 5,714 | $ | 7,910 | $ | 7,794 | $ | 8,071 | $ | 7,683 | (28 | ) | (26 | ) | $ | 13,624 | $ | 13,543 | 1 | |||||||||||||||||||||
NET CHARGE-OFF RATES (a) |
||||||||||||||||||||||||||||||||||||||||
Wholesale retained loans |
0.44 | % | 1.84 | % | 2.31 | % | 1.93 | % | 1.19 | % | 1.14 | % | 0.75 | % | ||||||||||||||||||||||||||
Consumer retained loans |
4.49 | 5.56 | 4.60 | 4.79 | 4.69 | 5.03 | 4.15 | |||||||||||||||||||||||||||||||||
Total retained loans reported |
3.28 | 4.46 | 3.85 | 3.84 | 3.52 | 3.88 | 3.01 | |||||||||||||||||||||||||||||||||
Consumer loans managed |
4.49 | 5.56 | 5.08 | 5.29 | 5.20 | 5.03 | 4.65 | |||||||||||||||||||||||||||||||||
Total loans managed |
3.28 | 4.46 | 4.29 | 4.30 | 4.00 | 3.88 | 3.49 | |||||||||||||||||||||||||||||||||
Consumer loans managed excluding purchased
credit-impaired loans (b) |
5.34 | 6.61 | 6.05 | 6.29 | 6.18 | 5.98 | 5.53 | |||||||||||||||||||||||||||||||||
Total
loans managed excluding purchased credit-impaired loans (b) |
3.69 | 5.03 | 4.84 | 4.85 | 4.51 | 4.36 | 3.93 | |||||||||||||||||||||||||||||||||
Memo: Average Retained Loans (a) |
||||||||||||||||||||||||||||||||||||||||
Wholesale loans reported |
$ | 209,016 | $ | 211,599 | $ | 206,846 | $ | 217,952 | $ | 229,105 | $ | 210,300 | $ | 233,871 | ||||||||||||||||||||||||||
Consumer loans reported |
490,149 | 506,949 | 428,964 | 440,376 | 456,292 | 498,503 | 464,062 | |||||||||||||||||||||||||||||||||
Total loans reported |
699,165 | 718,548 | 635,810 | 658,328 | 685,397 | 708,803 | 697,932 | |||||||||||||||||||||||||||||||||
Consumer loans managed |
490,149 | 506,949 | 514,416 | 526,393 | 540,709 | 498,503 | 549,077 | |||||||||||||||||||||||||||||||||
Total loans managed |
699,165 | 718,548 | 721,262 | 744,345 | 769,814 | 708,803 | 782,947 |
(a) | Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. As a result of the consolidation of the credit card securitization trusts, reported and managed basis relating to credit card securitizations are equivalent for periods beginning after January 1, 2010. For further details regarding the Firms application and impact of the new guidance, see footnote (a) on page 3. | |
(b) | Excludes the impact of purchased credit-impaired loans that were acquired as part of the Washington Mutual transaction. These loans were accounted for at fair value on the acquisition date, which incorporated managements estimate, as of that date, of credit losses over the remaining life of the portfolio. To date, no charge-offs have been recorded for these loans. | |
N/A: Not Applicable. |
Page 35
JPMORGAN CHASE & CO. | ||
CREDIT-RELATED INFORMATION, CONTINUED | ||
(in millions) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||||||
SUMMARY OF CHANGES IN THE ALLOWANCES |
||||||||||||||||||||||||||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES |
||||||||||||||||||||||||||||||||||||||||||||
Beginning balance at January 1, |
$ | 38,186 | $ | 31,602 | $ | 30,633 | $ | 29,072 | $ | 27,381 | 21 | % | 39 | % | $ | 31,602 | $ | 23,164 | 36 | % | ||||||||||||||||||||||||
Cumulative effect of change in accounting principles (a) |
| 7,494 | | | | NM | | 7,494 | | NM | ||||||||||||||||||||||||||||||||||
Net charge-offs (a) |
5,714 | 7,910 | 6,177 | 6,373 | 6,019 | (28 | ) | (5 | ) | 13,624 | 10,415 | 31 | ||||||||||||||||||||||||||||||||
Provision for loan losses (a) |
3,380 | 6,991 | 7,166 | 8,029 | 7,923 | (52 | ) | (57 | ) | 10,371 | 16,540 | (37 | ) | |||||||||||||||||||||||||||||||
Other (b) |
(16 | ) | 9 | (20 | ) | (95 | ) | (213 | ) | NM | 92 | (7 | ) | (217 | ) | 97 | ||||||||||||||||||||||||||||
Ending balance |
$ | 35,836 | $ | 38,186 | $ | 31,602 | $ | 30,633 | $ | 29,072 | (6 | ) | 23 | $ | 35,836 | $ | 29,072 | 23 | ||||||||||||||||||||||||||
ALLOWANCE FOR LENDING-RELATED COMMITMENTS |
||||||||||||||||||||||||||||||||||||||||||||
Beginning balance at January 1, |
$ | 940 | $ | 939 | $ | 821 | $ | 746 | $ | 638 | | 47 | $ | 939 | $ | 659 | 42 | |||||||||||||||||||||||||||
Cumulative effect of change in accounting principles (a) |
| (18 | ) | | | | NM | | (18 | ) | | NM | ||||||||||||||||||||||||||||||||
Provision for lending-related commitments |
(17 | ) | 19 | 118 | 75 | 108 | NM | NM | 2 | 87 | (98 | ) | ||||||||||||||||||||||||||||||||
Other |
(11 | ) | | | | | NM | NM | (11 | ) | | NM | ||||||||||||||||||||||||||||||||
Ending balance |
$ | 912 | $ | 940 | $ | 939 | $ | 821 | $ | 746 | (3 | ) | 22 | $ | 912 | $ | 746 | 22 | ||||||||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES BY LOB |
||||||||||||||||||||||||||||||||||||||||||||
Investment Bank (a) |
$ | 2,149 | $ | 2,601 | $ | 3,756 | $ | 4,703 | $ | 5,101 | (17 | ) | (58 | ) | ||||||||||||||||||||||||||||||
Retail Financial Services (a) |
16,152 | 16,200 | 14,776 | 13,286 | 11,832 | | 37 | |||||||||||||||||||||||||||||||||||||
Card Services (a) |
14,524 | 16,032 | 9,672 | 9,297 | 8,839 | (9 | ) | 64 | ||||||||||||||||||||||||||||||||||||
Commercial Banking |
2,686 | 3,007 | 3,025 | 3,063 | 3,034 | (11 | ) | (11 | ) | |||||||||||||||||||||||||||||||||||
Treasury & Securities Services |
48 | 57 | 88 | 15 | 15 | (16 | ) | 220 | ||||||||||||||||||||||||||||||||||||
Asset Management |
250 | 261 | 269 | 251 | 226 | (4 | ) | 11 | ||||||||||||||||||||||||||||||||||||
Corporate/Private Equity |
27 | 28 | 16 | 18 | 25 | (4 | ) | 8 | ||||||||||||||||||||||||||||||||||||
Total |
$ | 35,836 | $ | 38,186 | $ | 31,602 | $ | 30,633 | $ | 29,072 | (6 | ) | 23 | |||||||||||||||||||||||||||||||
(a) | Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. For further details regarding the Firms application and impact of the new guidance, see footnote (a) on page 3. | |
(b) | Activity for the third and second quarters of 2009 predominantly included a reclassification related to the issuance and retention of securities from the Chase Issuance Trust. |
Page 36
JPMORGAN CHASE & CO. | ||
CREDIT-RELATED INFORMATION, CONTINUED | ||
(in millions, except ratio data) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
2Q10 Change | ||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | ||||||||||||||||||||||
ALLOWANCE COMPONENTS AND RATIOS |
||||||||||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES |
||||||||||||||||||||||||||||
Wholesale |
||||||||||||||||||||||||||||
Asset specific (a) |
$ | 1,324 | $ | 1,557 | $ | 2,046 | $ | 2,410 | $ | 2,108 | (15 | )% | (37 | )% | ||||||||||||||
Formula based |
3,824 | 4,385 | 5,099 | 5,631 | 6,284 | (13 | ) | (39 | ) | |||||||||||||||||||
Total wholesale |
5,148 | 5,942 | 7,145 | 8,041 | 8,392 | (13 | ) | (39 | ) | |||||||||||||||||||
Consumer |
||||||||||||||||||||||||||||
Asset specific (b) |
1,184 | 1,010 | 996 | 1,009 | 801 | 17 | 48 | |||||||||||||||||||||
Formula based (a)(c)(d) |
26,693 | 28,423 | 21,880 | 20,493 | 19,879 | (6 | ) | 34 | ||||||||||||||||||||
Purchased credit-impaired (d) |
2,811 | 2,811 | 1,581 | 1,090 | | | NM | |||||||||||||||||||||
Total consumer |
30,688 | 32,244 | 24,457 | 22,592 | 20,680 | (5 | ) | 48 | ||||||||||||||||||||
Total allowance for loan losses |
35,836 | 38,186 | 31,602 | 30,633 | 29,072 | (6 | ) | 23 | ||||||||||||||||||||
Allowance for lending-related commitments |
912 | 940 | 939 | 821 | 746 | (3 | ) | 22 | ||||||||||||||||||||
Total allowance for credit losses |
$ | 36,748 | $ | 39,126 | $ | 32,541 | $ | 31,454 | $ | 29,818 | (6 | ) | 23 | |||||||||||||||
CREDIT RATIOS |
||||||||||||||||||||||||||||
Wholesale allowance to total wholesale retained loans |
2.42 | % | 2.83 | % | 3.57 | % | 3.76 | % | 3.75 | % | ||||||||||||||||||
Consumer allowance to total consumer retained loans |
6.36 | 6.49 | 5.73 | 5.22 | 4.63 | |||||||||||||||||||||||
Allowance to total retained loans |
5.15 | 5.40 | 5.04 | 4.74 | 4.33 | |||||||||||||||||||||||
Consumer allowance to consumer retained nonperforming loans (e) |
292 | 298 | 229 | 223 | 234 | |||||||||||||||||||||||
Consumer allowance to consumer retained nonperforming loans
excluding credit card (e) |
154 | 150 | 139 | 131 | 134 | |||||||||||||||||||||||
CREDIT RATIOS excluding purchased credit-impaired loans (f) |
||||||||||||||||||||||||||||
Consumer allowance to total consumer retained loans (f)(g) |
6.88 | 7.05 | 6.63 | 6.21 | 5.80 | |||||||||||||||||||||||
Allowance to retained loans (f)(g) |
5.34 | 5.64 | 5.51 | 5.28 | 5.01 | |||||||||||||||||||||||
Consumer allowance to consumer retained nonperforming loans (e)(f)(g) |
265 | 272 | 215 | 212 | 234 | |||||||||||||||||||||||
Consumer allowance to consumer retained nonperforming
loans excluding credit card (e)(f) |
127 | 124 | 124 | 121 | 134 | |||||||||||||||||||||||
Allowance to total retained nonperforming loans (f)(g) |
209 | 212 | 174 | 168 | 198 |
(a) | Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. For further details regarding the Firms application and impact of the new guidance, see footnote (a) on page 3. | |
(b) | The asset-specific consumer allowance for loan losses includes troubled debt restructuring reserves of $946 million, $754 million, $754 million, $756 million and $603 million at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively. Prior period amounts have been reclassified from formula-based to conform with the current period presentation. | |
(c) | Includes all of the Firms allowance for loan losses on credit card loans, including those for which the Firm has modified the terms of the loans for borrowers who are experiencing financial difficulty. | |
(d) | Prior period amounts have been reclassified from formula-based to conform with the current period presentation. | |
(e) | The Firms policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance. Under guidance issued by the Federal Financial Institutions Examination Council, credit card loans are charged off by the end of the month in which the account becomes 180 days past due or within 60 days from receiving notification about a specified event (e.g., bankruptcy of the borrower), whichever is earlier. | |
(f) | Excludes the impact of purchased credit-impaired loans that were acquired as part of the Washington Mutual transaction, as well as the related allowance recorded on these loans. These loans were accounted for at fair value on the acquisition date, which incorporated managements estimate, as of that date, of credit losses over the remaining life of the portfolio. To date, no charge-offs have been recorded for these loans. | |
(g) | Excludes loans held by the Washington Mutual Master Trust, which were consolidated onto the Firms balance sheet at fair value during the second quarter of 2009. No allowance for loan losses was recorded for these loans as of December 31, 2009, September 30, 2009, and June 30, 2009. The balance of these loans held by the Washington Mutual Master Trust was zero at June 30, 2010 and March 31, 2010. |
Page 37
JPMORGAN CHASE & CO. | ||
CREDIT-RELATED INFORMATION, CONTINUED | ||
(in millions) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
PROVISION FOR CREDIT LOSSES |
||||||||||||||||||||||||||||||||||||||||
LOANS |
||||||||||||||||||||||||||||||||||||||||
Investment Bank (a) |
$ | (418 | ) | $ | (477 | ) | $ | (265 | ) | $ | 330 | $ | 815 | 12 | % | NM | % | $ | (895 | ) | $ | 2,089 | NM | % | ||||||||||||||||
Commercial Banking |
(143 | ) | 204 | 445 | 326 | 280 | NM | NM | 61 | 543 | (89 | ) | ||||||||||||||||||||||||||||
Treasury & Securities Services |
(8 | ) | (31 | ) | 73 | 1 | (20 | ) | 74 | 60 | (39 | ) | (40 | ) | 3 | |||||||||||||||||||||||||
Asset Management |
15 | 31 | 53 | 37 | 59 | (52 | ) | (75 | ) | 46 | 93 | (51 | ) | |||||||||||||||||||||||||||
Corporate/Private Equity |
(1 | ) | 16 | (2 | ) | (6 | ) | 7 | NM | NM | 15 | 7 | 114 | |||||||||||||||||||||||||||
Total wholesale |
(555 | ) | (257 | ) | 304 | 688 | 1,141 | (116 | ) | NM | (812 | ) | 2,692 | NM | ||||||||||||||||||||||||||
Retail Financial Services (a) |
1,715 | 3,735 | 4,228 | 4,004 | 3,841 | (54 | ) | (55 | ) | 5,450 | 7,718 | (29 | ) | |||||||||||||||||||||||||||
Card Services reported (a) |
2,221 | 3,512 | 2,622 | 3,269 | 2,939 | (37 | ) | (24 | ) | 5,733 | 6,128 | (6 | ) | |||||||||||||||||||||||||||
Corporate/Private Equity |
(1 | ) | 1 | 12 | 68 | 2 | NM | NM | | 2 | NM | |||||||||||||||||||||||||||||
Total consumer |
3,935 | 7,248 | 6,862 | 7,341 | 6,782 | (46 | ) | (42 | ) | 11,183 | 13,848 | (19 | ) | |||||||||||||||||||||||||||
Total provision for loan losses |
$ | 3,380 | $ | 6,991 | $ | 7,166 | $ | 8,029 | $ | 7,923 | (52 | ) | (57 | ) | $ | 10,371 | $ | 16,540 | (37 | ) | ||||||||||||||||||||
LENDING-RELATED COMMITMENTS |
||||||||||||||||||||||||||||||||||||||||
Investment Bank (a) |
$ | 93 | $ | 15 | $ | 84 | $ | 49 | $ | 56 | NM | 66 | $ | 108 | $ | (8 | ) | NM | ||||||||||||||||||||||
Commercial Banking |
(92 | ) | 10 | 49 | 29 | 32 | NM | NM | (82 | ) | 62 | NM | ||||||||||||||||||||||||||||
Treasury & Securities Services |
(8 | ) | (8 | ) | (20 | ) | 12 | 15 | | NM | (16 | ) | 29 | NM | ||||||||||||||||||||||||||
Asset Management |
(10 | ) | 4 | 5 | 1 | | NM | NM | (6 | ) | (1 | ) | (500 | ) | ||||||||||||||||||||||||||
Corporate/Private Equity |
| | (1 | ) | | | | | | | | |||||||||||||||||||||||||||||
Total wholesale |
(17 | ) | 21 | 117 | 91 | 103 | NM | NM | 4 | 82 | (95 | ) | ||||||||||||||||||||||||||||
Retail Financial Services |
| (2 | ) | 1 | (16 | ) | 5 | NM | NM | (2 | ) | 5 | NM | |||||||||||||||||||||||||||
Card Services reported |
| | | | | | | | | | ||||||||||||||||||||||||||||||
Corporate/Private Equity |
| | | | | | | | | | ||||||||||||||||||||||||||||||
Total consumer |
| (2 | ) | 1 | (16 | ) | 5 | NM | NM | (2 | ) | 5 | NM | |||||||||||||||||||||||||||
Total provision for lending-related commitments |
$ | (17 | ) | $ | 19 | $ | 118 | $ | 75 | $ | 108 | NM | NM | $ | 2 | $ | 87 | (98 | ) | |||||||||||||||||||||
TOTAL PROVISION FOR CREDIT LOSSES |
||||||||||||||||||||||||||||||||||||||||
Investment Bank (a) |
$ | (325 | ) | $ | (462 | ) | $ | (181 | ) | $ | 379 | $ | 871 | 30 | NM | $ | (787 | ) | $ | 2,081 | NM | |||||||||||||||||||
Commercial Banking |
(235 | ) | 214 | 494 | 355 | 312 | NM | NM | (21 | ) | 605 | NM | ||||||||||||||||||||||||||||
Treasury & Securities Services |
(16 | ) | (39 | ) | 53 | 13 | (5 | ) | 59 | (220 | ) | (55 | ) | (11 | ) | (400 | ) | |||||||||||||||||||||||
Asset Management |
5 | 35 | 58 | 38 | 59 | (86 | ) | (92 | ) | 40 | 92 | (57 | ) | |||||||||||||||||||||||||||
Corporate/Private Equity |
(1 | ) | 16 | (3 | ) | (6 | ) | 7 | NM | NM | 15 | 7 | 114 | |||||||||||||||||||||||||||
Total wholesale |
(572 | ) | (236 | ) | 421 | 779 | 1,244 | (142 | ) | NM | (808 | ) | 2,774 | NM | ||||||||||||||||||||||||||
Retail Financial Services (a) |
1,715 | 3,733 | 4,229 | 3,988 | 3,846 | (54 | ) | (55 | ) | 5,448 | 7,723 | (29 | ) | |||||||||||||||||||||||||||
Card Services reported (a) |
2,221 | 3,512 | 2,622 | 3,269 | 2,939 | (37 | ) | (24 | ) | 5,733 | 6,128 | (6 | ) | |||||||||||||||||||||||||||
Corporate/Private Equity |
(1 | ) | 1 | 12 | 68 | 2 | NM | NM | | 2 | NM | |||||||||||||||||||||||||||||
Total consumer |
3,935 | 7,246 | 6,863 | 7,325 | 6,787 | (46 | ) | (42 | ) | 11,181 | 13,853 | (19 | ) | |||||||||||||||||||||||||||
Total provision for credit losses |
3,363 | 7,010 | 7,284 | 8,104 | 8,031 | (52 | ) | (58 | ) | 10,373 | 16,627 | (38 | ) | |||||||||||||||||||||||||||
Credit card loans securitized (a) |
N/A | N/A | 1,617 | 1,698 | 1,664 | NM | NM | N/A | 3,128 | NM | ||||||||||||||||||||||||||||||
Managed provision for credit losses (a) |
$ | 3,363 | $ | 7,010 | $ | 8,901 | $ | 9,802 | $ | 9,695 | (52 | ) | (65 | ) | $ | 10,373 | $ | 19,755 | (47 | ) | ||||||||||||||||||||
(a) | Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. As a result of the consolidation of the credit card securitization trusts, reported and managed basis relating to credit card securitizations are equivalent for periods beginning after January 1, 2010. For further details regarding the Firms application and impact of the new guidance, see footnote (a) on page 3. | |
N/A: Not Applicable. |
Page 38
JPMORGAN CHASE & CO. MARKET RISK-RELATED INFORMATION (in millions) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
AVERAGE IB TRADING VAR, CREDIT PORTFOLIO |
||||||||||||||||||||||||||||||||||||||||
VAR AND OTHER VAR - 95% CONFIDENCE LEVEL |
||||||||||||||||||||||||||||||||||||||||
IB VaR by risk type: |
||||||||||||||||||||||||||||||||||||||||
Fixed income |
$ | 64 | $ | 69 | $ | 121 | $ | 182 | $ | 179 | (7 | )% | (64 | )% | $ | 66 | $ | 168 | (61 | )% | ||||||||||||||||||||
Foreign exchange |
10 | 13 | 14 | 19 | 16 | (23 | ) | (38 | ) | 12 | 19 | (37 | ) | |||||||||||||||||||||||||||
Equities |
20 | 24 | 21 | 19 | 50 | (17 | ) | (60 | ) | 22 | 73 | (70 | ) | |||||||||||||||||||||||||||
Commodities and other |
20 | 15 | 17 | 23 | 22 | 33 | (9 | ) | 18 | 21 | (14 | ) | ||||||||||||||||||||||||||||
Diversification benefit to IB trading VaR (a) |
(42 | ) | (49 | ) | (62 | ) | (97 | ) | (97 | ) | 14 | 57 | (46 | ) | (101 | ) | 54 | |||||||||||||||||||||||
IB Trading VaR (b) |
72 | 72 | 111 | 146 | 170 | | (58 | ) | 72 | 180 | (60 | ) | ||||||||||||||||||||||||||||
Credit portfolio VaR (c) |
27 | 19 | 24 | 29 | 68 | 42 | (60 | ) | 23 | 77 | (70 | ) | ||||||||||||||||||||||||||||
Diversification benefit to IB trading and credit portfolio VaR (a) |
(9 | ) | (9 | ) | (11 | ) | (32 | ) | (60 | ) | | 85 | (9 | ) | (62 | ) | 85 | |||||||||||||||||||||||
Total IB trading and credit portfolio VaR |
90 | 82 | 124 | 143 | 178 | 10 | (49 | ) | 86 | 195 | (56 | ) | ||||||||||||||||||||||||||||
Consumer Lending VaR (d) |
24 | 25 | 29 | 49 | 43 | (4 | ) | (44 | ) | 25 | 75 | (67 | ) | |||||||||||||||||||||||||||
Chief Investment Office (CIO) VaR (e) |
72 | 70 | 78 | 99 | 111 | 3 | (35 | ) | 71 | 116 | (39 | ) | ||||||||||||||||||||||||||||
Diversification benefit to total other VaR (a) |
(14 | ) | (13 | ) | (19 | ) | (31 | ) | (29 | ) | (8 | ) | 52 | (14 | ) | (45 | ) | 69 | ||||||||||||||||||||||
Total other VaR |
82 | 82 | 88 | 117 | 125 | | (34 | ) | 82 | 146 | (44 | ) | ||||||||||||||||||||||||||||
Diversification benefit to total IB and other VaR (a) |
(79 | ) | (66 | ) | (67 | ) | (82 | ) | (89 | ) | (20 | ) | 11 | (73 | ) | (91 | ) | 20 | ||||||||||||||||||||||
Total IB and other VaR (f) |
$ | 93 | $ | 98 | $ | 145 | $ | 178 | $ | 214 | (5 | ) | (57 | ) | $ | 95 | $ | 250 | (62 | ) | ||||||||||||||||||||
(a) | Average VaRs were less than the sum of the VaRs of their market risk components, which is due to risk offsets resulting from portfolio diversification. The diversification effect reflected the fact that the risks were not perfectly correlated. The risk of a portfolio of positions is therefore usually less than the sum of the risks of the positions themselves. | |
(b) | IB Trading VaR includes predominantly all trading activities in IB, as well as syndicated lending facilities that the Firm intends to distribute; however, particular risk parameters of certain products are not fully captured, such as correlation risk. IB Trading VaR does not include the debit valuation adjustments (DVA) taken on derivative and structured liabilities to reflect the credit quality of the Firm. | |
(c) | Credit Portfolio VaR includes the derivative credit valuation adjustments (CVA), hedges of the CVA and mark-to-market hedges of the retained loan portfolio, which are all reported in principal transactions revenue. This VaR does not include the retained loan portfolio. | |
(d) | Consumer Lending VaR includes the Firms mortgage pipeline and warehouse, MSR and all related hedges. | |
(e) | Chief Investment Office (CIO) VaR includes positions, primarily in debt securities and credit products, used to manage structural risk and other risks, including interest rate, and credit risks arising from the Firms ongoing business activities. | |
(f) | Total IB and other VaR excludes certain nontrading activity, such as Private Equity, principal investing (e.g., mezzanine financing, tax-oriented investments, etc.), balance sheet and capital management positions and longer-term corporate investments managed by the CIO. |
Page 39
JPMORGAN CHASE & CO. CAPITAL AND OTHER SELECTED BALANCE SHEET ITEMS (in millions, except ratio data) |
June 30, 2010 | ||||||||||||||||||||||||||||||||||||||||
Change | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Jun 30 | 2010 Change | |||||||||||||||||||||||||||||||||
2010 | 2010 | 2009 | 2009 | 2009 | 2010 | 2009 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
CAPITAL RATIOS |
||||||||||||||||||||||||||||||||||||||||
Tier 1 capital |
$ | 137,077 | (d) | $ | 131,350 | $ | 132,971 | $ | 126,541 | $ | 122,174 | 4 | % | 12 | % | |||||||||||||||||||||||||
Total capital |
178,291 | (d) | 173,332 | 177,073 | 171,804 | 167,767 | 3 | 6 | ||||||||||||||||||||||||||||||||
Tier 1 common capital (a) |
108,175 | (d) | 103,908 | 105,284 | 101,420 | 96,850 | 4 | 12 | ||||||||||||||||||||||||||||||||
Risk-weighted assets |
1,130,890 | (d) | 1,147,008 | 1,198,006 | 1,237,760 | 1,260,237 | (1 | ) | (10 | ) | ||||||||||||||||||||||||||||||
Adjusted average assets |
1,983,839 | (d) | 1,981,060 | 1,933,767 | 1,940,689 | 1,969,339 | | 1 | ||||||||||||||||||||||||||||||||
Tier 1 capital ratio |
12.1 | % (d) | 11.5 | % | 11.1 | % | 10.2 | % | 9.7 | % | ||||||||||||||||||||||||||||||
Total capital ratio |
15.8 | (d) | 15.1 | 14.8 | 13.9 | 13.3 | ||||||||||||||||||||||||||||||||||
Tier 1 common capital ratio (a) |
9.6 | (d) | 9.1 | 8.8 | 8.2 | 7.7 | ||||||||||||||||||||||||||||||||||
Tier 1 leverage ratio |
6.9 | (d) | 6.6 | 6.9 | 6.5 | 6.2 | ||||||||||||||||||||||||||||||||||
TANGIBLE COMMON EQUITY (PERIOD-END) (b) |
||||||||||||||||||||||||||||||||||||||||
Common stockholders equity |
$ | 162,968 | $ | 156,569 | $ | 157,213 | $ | 154,101 | $ | 146,614 | 4 | 11 | ||||||||||||||||||||||||||||
Less: Goodwill |
48,320 | 48,359 | 48,357 | 48,334 | 48,288 | | | |||||||||||||||||||||||||||||||||
Less: Other intangible assets |
4,178 | 4,383 | 4,621 | 4,862 | 5,082 | (5 | ) | (18 | ) | |||||||||||||||||||||||||||||||
Add: Deferred tax liabilities (c) |
2,584 | 2,544 | 2,538 | 2,527 | 2,535 | 2 | 2 | |||||||||||||||||||||||||||||||||
Total tangible common equity |
113,054 | 106,371 | 106,773 | 103,432 | 95,779 | 6 | 18 | |||||||||||||||||||||||||||||||||
TANGIBLE COMMON EQUITY (AVERAGE) (b) |
||||||||||||||||||||||||||||||||||||||||
Common stockholders equity |
159,069 | 156,094 | 156,525 | 149,468 | 140,865 | 2 | 13 | $ | 157,590 | $ | 138,691 | 14 | % | |||||||||||||||||||||||||||
Less: Goodwill |
48,348 | 48,542 | 48,341 | 48,328 | 48,273 | | | 48,445 | 48,173 | 1 | ||||||||||||||||||||||||||||||
Less: Other intangible assets |
4,265 | 4,307 | 4,741 | 4,984 | 5,218 | (1 | ) | (18 | ) | 4,285 | 5,329 | (20 | ) | |||||||||||||||||||||||||||
Add: Deferred tax liabilities (c) |
2,564 | 2,541 | 2,533 | 2,531 | 2,518 | 1 | 2 | 2,553 | 2,562 | | ||||||||||||||||||||||||||||||
Total tangible common equity |
109,020 | 105,786 | 105,976 | 98,687 | 89,892 | 3 | 21 | 107,413 | 87,751 | 22 | ||||||||||||||||||||||||||||||
INTANGIBLE ASSETS (PERIOD-END) |
||||||||||||||||||||||||||||||||||||||||
Goodwill |
48,320 | 48,359 | 48,357 | 48,334 | 48,288 | | | |||||||||||||||||||||||||||||||||
Mortgage servicing rights |
11,853 | 15,531 | 15,531 | 13,663 | 14,600 | (24 | ) | (19 | ) | |||||||||||||||||||||||||||||||
Purchased credit card relationships |
1,051 | 1,153 | 1,246 | 1,342 | 1,431 | (9 | ) | (27 | ) | |||||||||||||||||||||||||||||||
All other intangibles |
3,127 | 3,230 | 3,375 | 3,520 | 3,651 | (3 | ) | (14 | ) | |||||||||||||||||||||||||||||||
Total intangibles |
64,351 | 68,273 | 68,509 | 66,859 | 67,970 | (6 | ) | (5 | ) | |||||||||||||||||||||||||||||||
DEPOSITS (PERIOD-END) |
||||||||||||||||||||||||||||||||||||||||
U.S. offices: |
||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing |
208,064 | 210,982 | 204,003 | 195,561 | 192,247 | (1 | ) | 8 | ||||||||||||||||||||||||||||||||
Interest-bearing |
433,764 | 436,914 | 439,104 | 415,122 | 433,862 | (1 | ) | | ||||||||||||||||||||||||||||||||
Non-U.S. offices: |
||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing |
9,094 | 10,062 | 8,082 | 9,390 | 8,291 | (10 | ) | 10 | ||||||||||||||||||||||||||||||||
Interest-bearing |
236,883 | 267,345 | 287,178 | 247,904 | 232,077 | (11 | ) | 2 | ||||||||||||||||||||||||||||||||
Total deposits |
887,805 | 925,303 | 938,367 | 867,977 | 866,477 | (4 | ) | 2 | ||||||||||||||||||||||||||||||||
(a) | The Firm uses Tier 1 common capital along with the other capital measures to assess and monitor its capital position. The Tier 1 common capital ratio is Tier 1 common capital divided by risk-weighted assets. For further discussion of Tier 1 common capital ratio, see page 42. | |
(b) | The Firm uses return on tangible common equity, a non-GAAP financial measure, to evaluate the Firms use of equity and to facilitate comparisons with competitors. For further discussion of ROTCE, see page 42. | |
(c) | Represents deferred tax liabilities related to tax-deductible goodwill and to identifiable intangibles created in non-taxable transactions, which are netted against goodwill and other intangibles when calculating TCE. | |
(d) | Estimated. |
Page 40
JPMORGAN CHASE & CO. PER SHARE-RELATED INFORMATION (in millions, except per share and ratio data) |
QUARTERLY TRENDS | YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||
2Q10 Change | 2010 Change | |||||||||||||||||||||||||||||||||||||||
2Q10 | 1Q10 | 4Q09 | 3Q09 | 2Q09 | 1Q10 | 2Q09 | 2010 | 2009 | 2009 | |||||||||||||||||||||||||||||||
EARNINGS PER SHARE DATA |
||||||||||||||||||||||||||||||||||||||||
Basic earnings per share: |
||||||||||||||||||||||||||||||||||||||||
Income before extraordinary gain |
$ | 4,795 | $ | 3,326 | $ | 3,278 | $ | 3,512 | $ | 2,721 | 44 | % | 76 | % | $ | 8,121 | $ | 4,862 | 67 | % | ||||||||||||||||||||
Extraordinary gain |
| | | 76 | | | | | | | ||||||||||||||||||||||||||||||
Net income |
4,795 | 3,326 | 3,278 | 3,588 | 2,721 | 44 | 76 | 8,121 | 4,862 | 67 | ||||||||||||||||||||||||||||||
Less: Preferred stock dividends |
163 | 162 | 162 | 163 | 473 | 1 | (66 | ) | 325 | 1,002 | (68 | ) | ||||||||||||||||||||||||||||
Less: Accelerated amortization from redemption of
preferred stock issued to the U.S. Treasury (a) |
| | | | 1,112 | | NM | | 1,112 | NM | ||||||||||||||||||||||||||||||
Net income applicable to common equity |
4,632 | 3,164 | 3,116 | 3,425 | 1,136 | 46 | 308 | 7,796 | 2,748 | 184 | ||||||||||||||||||||||||||||||
Less: Dividends and undistributed earnings allocated to
participating securities |
269 | 190 | 164 | 185 | 64 | 42 | 320 | 461 | 157 | 194 | ||||||||||||||||||||||||||||||
Net income applicable to common stockholders |
$ | 4,363 | $ | 2,974 | $ | 2,952 | $ | 3,240 | $ | 1,072 | 47 | 307 | $ | 7,335 | $ | 2,591 | 183 | |||||||||||||||||||||||
Total weighted-average basic shares outstanding |
3,983.5 | 3,970.5 | 3,946.1 | 3,937.9 | 3,811.5 | | 5 | 3,977.0 | 3,783.6 | 5 | ||||||||||||||||||||||||||||||
Income before extraordinary gain per share (a) |
$ | 1.10 | $ | 0.75 | $ | 0.75 | $ | 0.80 | $ | 0.28 | 47 | 293 | $ | 1.84 | $ | 0.68 | 171 | |||||||||||||||||||||||
Extraordinary gain per share |
| | | 0.02 | | | | | | | ||||||||||||||||||||||||||||||
Net income per share (a) |
$ | 1.10 | $ | 0.75 | $ | 0.75 | $ | 0.82 | $ | 0.28 | 47 | 293 | $ | 1.84 | $ | 0.68 | 171 | |||||||||||||||||||||||
Diluted earnings per share: |
||||||||||||||||||||||||||||||||||||||||
Net income applicable to common stockholders |
$ | 4,363 | $ | 2,974 | $ | 2,952 | $ | 3,240 | $ | 1,072 | 47 | 307 | $ | 7,335 | $ | 2,591 | 183 | |||||||||||||||||||||||
Total weighted-average basic shares outstanding |
3,983.5 | 3,970.5 | 3,946.1 | 3,937.9 | 3,811.5 | | 5 | 3,977.0 | 3,783.6 | 5 | ||||||||||||||||||||||||||||||
Add: Employee stock options and SARs (b) |
22.1 | 24.2 | 28.0 | 24.1 | 12.6 | (9 | ) | 75 | 23.2 | 7.8 | 197 | |||||||||||||||||||||||||||||
Total weighted-average diluted shares outstanding (c) |
4,005.6 | 3,994.7 | 3,974.1 | 3,962.0 | 3,824.1 | | 5 | 4,000.2 | 3,791.4 | 6 | ||||||||||||||||||||||||||||||
Income before extraordinary gain per share (a) |
$ | 1.09 | $ | 0.74 | $ | 0.74 | $ | 0.80 | $ | 0.28 | 47 | 289 | $ | 1.83 | $ | 0.68 | 169 | |||||||||||||||||||||||
Extraordinary gain per share |
| | | 0.02 | | | | | | | ||||||||||||||||||||||||||||||
Net income per share (a) |
$ | 1.09 | $ | 0.74 | $ | 0.74 | $ | 0.82 | $ | 0.28 | 47 | 289 | $ | 1.83 | $ | 0.68 | 169 | |||||||||||||||||||||||
COMMON SHARES OUTSTANDING |
||||||||||||||||||||||||||||||||||||||||
Common shares at period end (d) |
3,975.8 | 3,975.4 | 3,942.0 | 3,938.7 | 3,924.1 | | 1 | 3,975.8 | 3,924.1 | 1 | ||||||||||||||||||||||||||||||
Cash dividends declared per share |
$ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.05 | | | $ | 0.10 | $ | 0.10 | | |||||||||||||||||||||||
Book value per share |
40.99 | 39.38 | 39.88 | 39.12 | 37.36 | 4 | 10 | 40.99 | 37.36 | 10 | ||||||||||||||||||||||||||||||
Dividend payout ratio |
5 | % | 7 | % | 7 | % | 6 | % | 14 | % | 5 | % | 15 | % | ||||||||||||||||||||||||||
SHARE PRICE |
||||||||||||||||||||||||||||||||||||||||
High |
$ | 48.20 | $ | 46.05 | $ | 47.47 | $ | 46.50 | $ | 38.94 | 5 | 24 | $ | 48.20 | $ | 38.94 | 24 | |||||||||||||||||||||||
Low |
36.51 | 37.03 | 40.04 | 31.59 | 25.29 | (1 | ) | 44 | 36.51 | 14.96 | 144 | |||||||||||||||||||||||||||||
Close |
36.61 | 44.75 | 41.67 | 43.82 | 34.11 | (18 | ) | 7 | 36.61 | 34.11 | 7 | |||||||||||||||||||||||||||||
Market capitalization |
145,554 | 177,897 | 164,261 | 172,596 | 133,852 | (18 | ) | 9 | 145,554 | 133,852 | 9 | |||||||||||||||||||||||||||||
STOCK REPURCHASE PROGRAM |
||||||||||||||||||||||||||||||||||||||||
Aggregate repurchases |
$ | 135.3 | $ | | $ | | $ | | $ | | NM | NM | $ | 135.3 | $ | | NM | |||||||||||||||||||||||
Common shares repurchased |
3.5 | | | | | NM | NM | 3.5 | | NM | ||||||||||||||||||||||||||||||
Average purchase price |
$ | 38.73 | $ | | $ | | $ | | $ | | NM | NM | $ | 38.73 | $ | | NM |
(a) | The calculation of second quarter 2009 earnings per share includes a one-time non-cash reduction of $1.1 billion, or $0.27 per share, resulting from the redemption of Series K preferred stock issued to the U.S. Treasury. | |
(b) | Excluded from the computation of diluted EPS (due to the antidilutive effect) were options issued under employee benefit plans and warrants originally issued under the U.S. Treasurys Capital Purchase Program to purchase shares of the Firms common stock aggregating 224 million, 239 million, 147 million, 241 million and 315 million, for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively. | |
(c) | Participating securities were included in the calculation of diluted EPS using the two-class method, as this computation was more dilutive than the calculation using the treasury stock method. | |
(d) | On June 5, 2009, the Firm issued $5.8 billion, or 163 million shares, of its common stock at $35.25 per share. |
Page 41
JPMORGAN CHASE & CO. Non-GAAP Financial Measures |
(a) | In addition to analyzing the Firms results on a reported basis, management reviews the Firms results and the results of the lines of business on a managed basis, which is a non-GAAP financial measure. The Firms definition of managed basis starts with the reported U.S. GAAP results and includes certain reclassifications to present total net revenue for the Firm (and each of the business segments) on a FTE basis. Accordingly, revenue from tax-exempt securities and investments that receive tax credits is presented in the managed results on a basis comparable to taxable securities and investments. This non-GAAP financial measure allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The corresponding income tax impact related to these items is recorded within income tax expense. These adjustments have no impact on net income as reported by the Firm as a whole or by the lines of business. | |
Prior to January 1, 2010, the Firms managed-basis presentation also included certain reclassification adjustments that assumed credit card loans securitized by CS remained on the balance sheet. Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. Additionally, the new guidance required the Firm to consolidate its Firm-sponsored credit card securitizations trusts. The income, expense and credit costs associated with these securitization activities are now recorded in the 2010 Consolidated Statements of Income in the same classifications that were previously used to report such items on a managed basis. As a result of the consolidation of the credit card securitization trusts, reported and managed basis relating to credit card securitizations are comparable for periods beginning after January 1, 2010. | ||
The presentation in 2009 of CS results on a managed basis assumed that credit card loans that had been securitized and sold in accordance with U.S. GAAP remained on the Consolidated Balance Sheets, and that the earnings on the securitized loans were classified in the same manner as the earnings on retained loans recorded on the Consolidated Balance Sheets. JPMorgan Chase used the concept of managed basis to evaluate the credit performance and overall financial performance of the entire managed credit card portfolio. Operations were funded and decisions were made about allocating resources, such as employees and capital, based on managed financial information. In addition, the same underwriting standards and ongoing risk monitoring are used for both loans on the Consolidated Balance Sheets and securitized loans. Although securitizations result in the sale of credit card receivables to a trust, JPMorgan Chase retains the ongoing customer relationships, as the customers may continue to use their credit cards; accordingly, the customers credit performance affects both the securitized loans and the loans retained on the Consolidated Balance Sheets. JPMorgan Chase believed that this managed-basis information was useful to investors, as it enabled them to understand both the credit risks associated with the loans reported on the Consolidated Balance Sheets and the Firms retained interests in securitized loans | ||
(b) | The ratio for the allowance for loan losses to end-of-period loans excludes the following: loans accounted for at fair value and loans held-for-sale; purchased credit-impaired loans; the allowance for loan losses related to purchased credit-impaired loans; and loans from the Washington Mutual Master Trust, which were consolidated on the Firms balance sheet at fair value during the second quarter of 2009. Additionally, Real Estate Portfolios net charge-off rates exclude the impact of purchased credit-impaired loans. | |
(c) | Return on Tangible Common Equity is Net income applicable to common equity divided by total average common stockholders equity (i.e., total stockholders equity less preferred stock) less identifiable intangible assets (other than MSRs) and goodwill, net of related deferred tax liabilities. The Firm uses return on tangible common equity, a non-GAAP financial measure, to evaluate the Firms use of equity and to facilitate comparisons with competitors. | |
(d) | Tier 1 common capital ratio is Tier 1 common capital divided by risk-weighted assets. Tier 1 Common Capital (Tier 1 Common) is defined as Tier 1 capital less elements of capital not in the form of common equity such as qualifying perpetual preferred stock, qualifying noncontrolling interest in subsidiaries and qualifying trust preferred capital debt securities. Tier 1 Common, a non-GAAP financial measure, is used by banking regulators, investors and analysts to assess and compare the quality and composition of the Firms capital with the capital of other financial services companies. The Firm uses Tier 1 Common along with the other capital measures to assess and monitor its capital position. | |
(e) | TSS Firmwide revenue includes certain TSS product revenue and liability balances reported in other lines of business, mainly CB, RFS and AM, related to customers who are also customers of those lines of business. | |
(f) | Retail Financial Services uses the overhead ratio (excluding the amortization of core deposit intangibles (CDI)), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in the overhead ratio calculation would result in a higher overhead ratio in the earlier years and a lower overhead ratio in later years. This method would therefore result in an improving overhead ratio over time, all things remaining equal. The non-GAAP ratio excludes Retail Bankings CDI amortization expense related to prior business combination transactions. | |
(g) | The calculation of the second quarter 2009 earnings per share and net income applicable to common equity includes a one-time, noncash reduction of $1.1 billion, or $0.27 per share, resulting from repayment of TARP preferred capital. Excluding this reduction, the adjusted ROE and ROTCE for the second quarter of 2009 would have been 6% and 10%, respectively. The Firm views the adjusted ROE and ROTCE, both non-GAAP financial measures, as meaningful because they enable the comparability to prior periods. | |
(h) | Adjusted assets, a non-GAAP financial measure, equals total assets minus (1) securities purchased under resale agreements and securities borrowed less securities sold, not yet purchased; (2) assets of variable interest entities (VIEs); (3) cash and securities segregated and on deposit for regulatory and other purposes; (4) goodwill and intangibles; (5) securities received as collateral; and (6) investments purchased under the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility. The amount of adjusted assets is presented to assist the reader in comparing IBs asset and capital levels to other investment banks in the securities industry. Asset-to-equity leverage ratios are commonly used as one measure to assess a companys capital adequacy. IB believes an adjusted asset amount that excludes the assets discussed above, which were considered to have a low risk profile, provides a more meaningful measure of balance sheet leverage in the securities industry. |
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JPMORGAN CHASE & CO. Glossary of Terms |
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JPMORGAN CHASE & CO. Glossary of Terms |
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JPMORGAN CHASE & CO. Glossary of Terms |
IBs revenue comprises the following: |
Description of selected business metrics within Retail Banking: |
Mortgage banking revenue comprises the following: |
a) | Operating revenue comprises: |
| all gross income earned from servicing third-party mortgage loans, including stated service fees, excess service fees, late fees and other ancillary fees; and | ||
| modeled servicing portfolio runoff (or time decay). |
b) | Risk management comprises: |
| changes in MSR asset fair value due to market-based inputs, such as interest rates and volatility, as well as updates to assumptions used in the MSR valuation model; and | ||
| derivative valuation adjustments and other, which represents changes in the fair value of derivative instruments used to offset the impact of changes in the market-based inputs to the MSR valuation model. |
Mortgage origination channels comprise the following: |
Description of selected business metrics within CS: |
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JPMORGAN CHASE & CO. Glossary of Terms |
1. | Middle Market Banking covers corporate, municipal, financial institution and not-for-profit clients, with annual revenue generally ranging between $10 million and $500 million. | |
2. | Mid-Corporate Banking covers clients with annual revenue generally ranging between $500 million and $2 billion and focuses on clients that have broader investment banking needs. | |
3. | Commercial Term Lending primarily provides term financing to real estate investors/owners for multi-family properties as well as financing office, retail and industrial properties. | |
4. | Real Estate Banking provides full-service banking to investors and developers of institutional-grade real estate properties. |
1. | Lending includes a variety of financing alternatives, which are primarily provided on a basis secured by receivables, inventory, equipment, real estate or other assets. Products include term loans, revolving lines of credit, bridge financing, asset-based structures and leases. | |
2. | Treasury services includes a broad range of products and services enabling clients to transfer, invest and manage the receipt and disbursement of funds, while providing the related information reporting. These products and services include U.S. dollar and multi-currency clearing, ACH, lockbox, disbursement and reconciliation services, check deposits, other check and currency-related services, trade finance and logistics solutions, commercial card and deposit products, sweeps and money market mutual funds. | |
3. | Investment banking products provide clients with sophisticated capital-raising alternatives, as well as balance sheet and risk management tools through loan syndications, investment-grade debt, asset-backed securities, private placements, high-yield bonds, equity underwriting, advisory, interest rate derivatives, foreign exchange hedges and securities sales. |
1. | Liability balances include deposits, as well as deposits that are swept to onbalance sheet liabilities (e.g., commercial paper, federal funds purchased, time deposits and securities loaned or sold under repurchase agreements) as part of customer cash management programs. | |
2. | IB revenue, gross represents total revenue related to investment banking products sold to CB clients. |
1. | Liability balances include deposits, as well as deposits that are swept to onbalance sheet liabilities (e.g., commercial paper, federal funds purchased, time deposits and securities loaned or sold under repurchase agreements) as part of customer cash management programs. |
AMs client segments comprise the following: |
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JPMORGAN CHASE & CO. DISCLOSURE CHANGE SUMMARY |
Schedule Title | Page Reference | Brief Description of the Change | ||||
Consolidated Financial Highlights
|
2 | Split into two pages, with selected balance sheet, headcount and line of business net income/(loss) metrics moved to the next page | ||||
Statement of Income
|
4 | Financial ratios based on income before extraordinary gain moved to the footnote on the Washington Mutual transaction | ||||
Condensed Average Balance Sheet
|
6 | Combined goodwill and other intangibles with all other noninterest-earning assets; added trading liabilities debt instruments and its related yield to conform with the Form 10-Q/10-K format; added two new line disclosures, noninterest-bearing deposits and trading liabilities equity instruments, to conform with the Form 10-Q/10-K format | ||||
Asset Management Financial Highlights
|
26 | Split first page into two, with business metrics and credit data and quality statistics moved to the next page | ||||
Credit-Related Information
|
32 | Credit Exposure schedule split into two pages, with risk profile of wholesale credit exposure moved to the next page | ||||
36 | Allowance for Credit Losses schedule split into two pages, with allowance components and ratios moved to the next page; added two new line disclosures to conform with the Form 10-Q/10-K format (these are: consumer allowance to consumer retained nonperforming loans adjusted for credit-impaired loans; and consumer allowance to consumer retained nonperforming loans excluding credit card and adjusted for credit- impaired loans) | |||||
Per Share-Related Information
|
41 | Added a set of disclosures related to stock repurchases |
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