Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (date of earliest event reported): April 13, 2011
JPMORGAN CHASE & CO.
(Exact name of registrant as specified in its charter)
| Delaware | 1-5805 | 13-2624428 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
||
| 270 Park Avenue, New York, NY | 10017 | |||
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (212) 270-6000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
| 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)) |
TABLE OF CONTENTS
| Item 7.01 Regulation FD Disclosure | ||||||||
| Item 9.01 Financial Statements and Exhibits | ||||||||
| SIGNATURE | ||||||||
| EXHIBIT INDEX | ||||||||
| EX-99.1 | ||||||||
Table of Contents
Item 7.01 Regulation FD Disclosure
On April 13, 2011, JPMorgan Chase & Co. (“JPMorgan Chase” or the “Firm”) held an investor
presentation to review first quarter 2011 earnings.
Exhibit 99.1 is a copy of slides furnished at, and posted on the Firm’s website in connection with,
the presentation. The slides are being furnished pursuant to Item 7.01, and the information
contained therein shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange
Act of 1934, or otherwise subject to the liabilities under that Section. Furthermore, the
information contained in Exhibit 99.1 shall not be deemed to be incorporated by reference into the
filings of the Firm under the Securities Act of 1933.
This current report on Form 8-K (including the Exhibits hereto) contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are
based upon the current beliefs and expectations of JPMorgan Chase & Co.’s management and are subject to
significant risks and uncertainties. Actual results may differ from those set forth in the
forward-looking statements. Factors that could cause JPMorgan Chase & Co.’s actual results to differ
materially from those described in the forward-looking statements can be found in JPMorgan Chase & Co.’s Annual
Report on Form 10-K for the year ended December 31, 2010, which has been filed with the U.S. Securities
and Exchange Commission and is available on JPMorgan Chase & Co.’s website
(www.jpmorganchase.com) and on the Securities and Exchange Commission’s website
(www.sec.gov). JPMorgan Chase & Co. does not undertake to update the forward-looking statements
to reflect the impact of circumstances or events that may arise after the date of the
forward-looking statements.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit Number | Description of Exhibit | ||
99.1
|
JPMorgan Chase & Co. Analyst Presentation Slides — Financial Results — 1Q11 |
2
Table of Contents
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
JPMORGAN CHASE & CO. (Registrant) |
||||
| By: | /s/ Louis Rauchenberger | |||
| Louis Rauchenberger |
||||
| Managing Director and Controller
[Principal Accounting Officer] |
||||
Dated: April 13, 2011
3
Table of Contents
EXHIBIT INDEX
| Exhibit Number | Description of Exhibit | |
99.1
|
JPMorgan Chase & Co. Analyst Presentation Slides — Financial Results — 1Q11 |
4
Exhibit 99.1
| Exhibit99.11Q11April13,2011 |
| 1Q11Financialhighlights 1Q11netincomeof$5.6B;EPSof$1.28;revenueof$25.8B1 1Q11resultsincludethefollowingsignificantitems:$inmillions,excludingEPSPretaxNetIncomeEPSCardService s-benefitfromreducedcreditcardloanlossreserves$2,000$1,240$0.29RetailFinancialServices-lossfromMSRas setadjustmentforincreasedcosts(1,100)(682)(0.16)RetailFinancialServices-expenseforestimatedcostsoffo reclosure-relatedmatters(650)(403)(0.10) Fortressbalancesheetstrengthened BaselITier1Common2of$120B,or10.0% EstimatedBaselIIITier1Commonof7.3% Creditreservesat$30.4B;loanlosscoverageratioat4.10%oftotalloans3RESULTS Solidperformanceacrossmostbusinesses1Seenote1onslide192Seenote6onslide19 3Seenote2onslide19FINANCIAL1 |
| 1Q11Financialresults1$inmillions,excludingEPS$O/(U)1Q114Q101Q10Revenue(FTE)1 $25,791($931)($2,381)CreditCosts1 1,169(1,874)(5,841)Expense15,995(48)(129)ReportedNetIncome$5,555$724$2,229NetIncomeApplicabletoCommo nStock$5,136$724$2,162ReportedEPS$1.28$0.16$0.54ROE213%11%8%ROTCE2,3 18%16%12%1Seenote1onslide192Actualnumbersforallperiods,notover/under 3Seenote7onslide19RESULTSFINANCIAL2 |
| Investment Bank1$ in millions 3 Net income of $2.4B on revenue of $8.2B $ O/(U) 3 ROE of 24%1Q11 4Q10 1Q10 3 IB fees of $1.8B up 23% YoY Revenue $8,233 $2,020 ($86)3 Ranked #1 YTD in Global Investment Investment Banking Fees 1,779 (54) 333Banking FeesFixed Income Markets 5,238 2,363 (226)Equity Markets 1,406 278 (56) 3 Fixed Income and Equity Markets revenue of Credit Portfolio (190) (567) (137)$6.6B reflecting strong client revenues, down Credit Costs (429) (158) 33slightly from record 1Q10 resultsExpense 5,016 815 178Net Income $2,370 $869 ($101) 3 Credit Portfolio loss of $190mm, primarily Key Statistics ($B)2 reflecting the negative net impact of credit Overhead Ratio 61% 68% 58% valuation adjustments, largely offset by NII and Comp/Revenue 40% 30% 35%fees on retained loansEOP Loans $57.8 $56.9 $56.6 Allowance for Loan Losses $1.3 $1.9 $2.6 3 Credit cost benefit of $429mm reflecting a NPLs $2.6 $3.6 $2.7 reduction in the allowance primarily related to Net Charge-off Rate3 0.93% (0.17)% 4.83% loan sales and net repayments ALL / Loans3 2.52% 3.51% 4.91%3 Expense of $5.0B up 4% YoY due to higher ROE4 24% 15% 25%VAR ($mm)5 $83 $78 $82 compensation expense partially offset by lower R E S U L T S EOP Equity $40.0 $40.0 $40.0 non-compensation expense1 See note 1 on slide 192 Actual numbers for all periods, not over/under3Loans held-for-sale and loans at fair value were excluded when calculating the loan loss coverage ratio and net charge-off rate4 Calculated based on average equity of $40B F I N A N C I A L 35 Average Trading and Credit Portfolio VAR at 95% confidence interval |
| RetailFinancialServices1 $inmillionsKeydrivers$O/(U)RetailBanking1Q114Q101Q10RetailFinancialServices Averagedepositsof$348.1Bup4%YoYand3%NetInterestIncome$4,630($199)($394)NoninterestRevenue1,645(2,051 )(1,107)QoQRevenue$6,275($2,250)($1,501)Expense5,2624381,020 Branchproductionstatistics:Pre-ProvisionPretax$1,013($2,688)($2,521) Checkingaccountsup3%YoYanddown2%CreditCosts1,326(1,130)(2,407)NetIncome($208)($916)($77)QoQEOPEquity ($B)2$28$28$28 Mortgageoriginationsup54%YoYanddownROE2,3 (3)%10%(2)%Memo:13%QoQRFSNetIncomeExcl.RealEstatePortfolios($46)($1,577)($1,201)ROEExcl.RealEstatePo rtfolios2,4(1)%33%26% BusinessBankingoriginationsup57%YoYandflatQoQRetailBanking—KeyDrivers2 ($inbillions)AverageDeposits$348.1$338.7$333.9DepositMargin2.92%3.00%3.02%MortgageBanking,Auto&Other ConsumerCheckingAccounts(mm)26.627.325.8#ofBranches5,2925,2685,155LendingBusinessBankingOriginations 1.41.40.9MortgageBanking,Auto&OtherConsumerLending—KeyDrivers2($inbillions) Totaloriginationsof$41.1B:MortgageLoanOriginations$36.2$50.8$31.7 Mortgageloanoriginationsup14%YoYand3rdPartyMtgLoansSvc’d(EOP)$955$968$1,075AutoOriginations$4.8$4.8$ 6.3down29%QoQAverageLoans$76.1$76.8$77.8RESULTS Autooriginationsdown24%YoYandflatQoQ1Seenote1onslide192 Actualnumbersforallperiods,notover/under3Calculatedbasedonaverageequityof$28B4 Calculatedbasedonaverageequity;averageequityfor1Q11,4Q10and1Q10was$17.5B,$18.3Band$18.3B,respectivel yFINANCIAL4 |
| RetailFinancialServicesRetailBankingandMortgageBanking,Auto&OtherConsumerLending$inmillions RetailBankingnetincomeof$891mmflatYoY: Totalrevenueof$4.4Bup2%YoYnetofthe$O/(U)impactoflowerdeposit-relatedfees1Q114Q101Q10RetailBanking Expenseup9%YoYresultingfrominvestmentsNetInterestIncome$2,659($34)$24insalesforceincreasesandnewbran chbuildsNoninterestIncome1,7564154Revenue$4,415$7$78 Creditcostsof$119mmdown38%YoYExpense2,802134225Pre-ProvisionPretax$1,613($127)($147) MortgageBanking,Auto&OtherConsumerCreditCosts11946(72)Lendingnetlossof$937mmcomparedwithnetNetIncome $891($63)($7)incomeof$257mmintheprioryear:MortgageBanking,Auto&OtherConsumerLending Totalrevenue,excludingMSRriskRevenue(excl.MSRRiskManagement)$1,933($569)$174MSRRiskManagement(1,237) (1,523)(1,389)managementresults,of$1.9Bup10%YoYRevenue696(2,092)(1,215)drivenbyhigheroriginationvolu mesandwiderMemo:RepurchaseLosses(Contra-Revenue)($420)($71)$12Expense2,105362859marginsPre-Provision Pretax($1,409)($2,454)($2,074)—Repurchaselossesof$420mm,down3%CreditCosts13185(86)YoYNetIncome($937 )($1,514)($1,194)—MSRriskmanagementlossesof$1.2B,includinga$1.1Bfairvalueadjustmentforincreasedserv icingcosts Expenseup21%QoQincluding$650mmforestimatedcostsofforeclosure-relatedmattersRESULTS Creditcostsof$131mmdown40%YoYFINANCIAL5 |
| RetailFinancialServicesRealEstatePortfolios$inmillions Netlossof$162mmcomparedwithanet$O/(U)lossof$1.3Bintheprioryear1Q114Q101Q10 Totalrevenueof$1.2Bdown24%YoYRealEstatePortfoliosRevenue$1,164($165)($364)drivenbyadeclineinnetinter estExpense355(58)(64)incomeasaresultofportfoliorunoffPre-ProvisionPretax$809($107)($300)NetCharge-Of fs1,076(713)(999)andnarrowerloanspreadsChangeinAllowance-(548)(1,250) Expensedown15%YoYreflectingaCreditCosts1,076(1,261)(2,249)NetIncome($162)$661$1,124decreaseinforeclo sedassetexpenseMemo:ALL/EOPLoans1,26.68%6.47%6.76% Creditcostsof$1.1Bdown68%YoY1KeyDrivers($inbillions)drivenbylowernetcharge-offsandtheTotalAverageLoa ns$219.7$227.2$251.2111.1114.9125.7absenceofadditionstotheallowanceAverageHomeEquityLoansOwned 3AverageMortgageLoansOwned3107.8111.4124.4forloanlossesinthecurrentquarter 1Actualnumbersforallperiods,notover/under2 Excludestheimpactofpurchasedcredit-impairedloansacquiredaspartoftheWaMutransaction.Anallowanceforloa nlossesof$4.9B,$4.9Band$2.8Bwasrecordedfortheseloansasof1Q11,4Q10and1Q10,respectively3 Includespurchasedcredit-impairedloansacquiredaspartoftheWaMutransactionRESULTSFINANCIAL6 |
| HomeLendingupdateKeystatistics1Overallcommentary4Q104Q101Q11AdjustedReported1Q10 Delinquenciesmodestlyimprovedin1Q11EOPownedportfolio($B)HomeEquity$85.3$88.4$97.7 HomeequityandsubprimemortgagenetPrimeMortgage,includingoptionARMs2 62.664.069.1SubprimeMortgage10.811.313.2charge-offsarerelativelyflat,whileprimeNetcharge-offs($mm)mo rtgagenetcharge-offsimprovedcomparedHomeEquity$720$725$792$1,126PrimeMortgage,includingoptionARMs3165252570482to4Q10adjustedSubprimeMortgage186182429457Total$1,071$1,159$1,791$2,065 NochangesintheallowanceforloanlossesNetcharge-offrate4 duringthequarterHomeEquity3.36%3.19%3.48%4.59%PrimeMortgage,includingoptionARMs1.06%1.55%3.51%2.84%S ubprimeMortgage6.80%6.12%14.42%13.43% NochangeinlossoutlookNonaccrualloans($mm)HomeEquity$1,263$1,263$1,427PrimeMortgage,includingoptionAR Ms34,0934,2554,875SubprimeMortgage2,1062,2103,3311 Excludes1Q11EOPhomeequity,primemortgage,subprimemortgageandoptionARMspurchasedcredit-impairedloansof $24.0B,$16.7B,$5.3Band$24.8Brespectively,acquiredaspartoftheWaMutransaction2 Endingbalancesincludeallnoncredit-impairedprimemortgagebalancesheldbyRetailFinancialServices,includi ng$13.0B,$12.9Band$12.2Bfor1Q11,4Q10and1Q10,respectively,ofloansinsuredbyU.S.governmentagencies.Thes eloansareincludedinMortgageBanking,Auto&OtherConsumerLending3 Netcharge-offsandnonaccrualloansexcludeloansinsuredbyU.S.governmentagencies4 Loanbalancesusedinthecalculationoftheadjustednetcharge-offratesreflecttheimpactofthe$632mmadjustment oftheestimatednetrealizablevalueofthecollateralunderlyingRESULTSdelinquentresidentialhomeloansFINANC IAL7 |
| CardServices$inmillions Netincomeof$1.3Bcomparedwithanetlossof$303mmintheprioryear$O/(U) Creditcostsof$226mmreflectlowernetcharge-offs1Q114Q101Q10andareductionof$2.0BtotheallowanceforloanRe venue$3,982($264)($465)losses,duetolowerestimatedlossesCreditCosts226(445)(3,286) Netcharge-offrate(excludingtheWaMuandExpense1,55541153CommercialCardportfolio)of6.20%downfromNetInco me$1,343$44$1,6467.08%in4Q10and10.54%in1Q10KeyStatisticsIncl.WaMuandCommercialCard($B)1 ROO(pretax)6.73%6.03%(1.22)% End-of-periodoutstandings(excludingtheWaMuandROE 2 42%34%(8)%CommercialCardportfolio)of$115.0Bdown13%YoYEOPEquity$13.0$15.0$15.0and7%QoQKeyStatisticsEx cl.WaMuandCommercialCard($B)1 Salesvolume(excludingtheWaMuandCommercialAvgOutstandings$118.1$121.5$137.2EOPOutstandings$115.0$123. 9$132.1Cardportfolio)of$75.2Bup12%YoYanddown10%SalesVolume$75.2$83.2$66.9QoQNewAcctsOpened(mm)2.63.4 2.5 Revenueof$4.0Bdown10%YoYand6%QoQNetInterestIncomeRate9.25%9.16%8.86% Revenue(excludingtheWaMuandCommercialNetCharge-OffRate3 6.20%7.08%10.54%Cardportfolio)down9%YoYand7%QoQ30+DayDelinquencyRate33.25%3.66%4.99% 1Actualnumbersforallperiods,notover/under.Statisticsincludeloansheldforsale Netinterestincomerate(excludingtheWaMuand2 Calculatedbasedonaverageequity;1Q11,4Q10and1Q10averageequitywas$13B,$15Band$15B,respectivelyCommerci alCardportfolio)of9.25%upfrom9.16%in3 Seenote3onslide19RESULTS4Q10and8.86%in1Q10FINANCIAL8 |
| CommercialBanking1$inmillions Netincomeof$546mmup40%YoY$O/(U) Averageloanbalancesup3%YoYand1%1Q114Q101Q10QoQRevenue$1,516($95)$100MiddleMarketBanking755(26)9 Averageliabilitybalancesof$156Bup17%YoYCorporateClientBanking290(12)27CommercialTermLending286(15)57 Revenueof$1.5Bup7%YoY RealEstateBanking88(29)(12)Other97(13)19 Creditcostsof$47mmCreditCosts47(105)(167)Expense563524 Netcharge-offsof$31mmdown86%YoYNetIncome$546$16$156and89%QoQKeyStatistics($B)2 AverageLoans&Leases$99.6$98.4$96.6EOPLoans&Leases$100.2$98.9$95.7 Expenseup4%YoY;overheadratioof37%AverageLiabilityBalances3 $156.2$147.5$133.1AllowanceforLoanLosses$2.6$2.6$3.0NPLs$2.0$2.0$3.0NetCharge-OffRate4 0.13%1.16%0.96%ALL/Loans42.59%2.61%3.15%ROE5 28%26%20%OverheadRatio37%35%38%EOPEquity$8.0$8.0$8.01Seenote1onslide192 Actualnumbersforallperiods,notover/under3 Includesdepositsanddepositsswepttoon-balancesheetliabilities4 Loansheld-for-saleandloansatfairvaluewereexcludedwhencalculatingtheloanlosscoverageratioandnetRESULT Scharge-offrate5Calculatedbasedonaverageequityof$8BFINANCIAL9 |
| Treasury&SecuritiesServices1$inmillions Netincomeof$316mmup13%YoYand23%QoQ$O/(U) Pretaxmarginof26%1Q114Q101Q10Revenue$1,840($73)$84 Liabilitybalancesup7%YoYWorldwideSecuritiesServices949(11)75TreasuryServices891(62)9 Recordassetsundercustodyof$16.6Tup9%Expense1,377(93)52YoYCreditAllocationIncome/(Expense) 2275757 Revenueof$1.8Bup5%YoYNetIncome$316$59$373 WSSrevenueof$949mmup9%YoYKeyStatisticsAverageLiabilityBalances($B)4 $265.7$256.7$247.9 TSrevenueof$891mmup1%YoYAssetsunderCustody($T)$16.6$16.1$15.3PretaxMargin26%21%25% Expenseup4%YoYdrivenbycontinuedROE5 18%16%17%investmentinnewproductplatforms,primarilyTSSFirmwideRevenue$2,445$2,637$2,450relatedtointer nationalexpansion,partiallyTSFirmwideRevenue$1,496$1,677$1,576offsetbythetransferoftheCommercialCard TSSFirmwideAverageLiabBal($B)4 $421.9$404.2$381.0businesstoCardServicesEOPEquity($B)$7.0$6.5$6.5 Creditallocationbenefitof$27mmrelatedto1Seenotes1and4onslide192 IBmanagescreditexposuresrelatedtotheGlobalCorporateBank(“GCB”)onbehalfofIBsharedcreditportfolioandTS S.EffectiveJanuary1,2011,IBandTSSwillsharetheeconomicsrelatedtotheFirm’sGCBclients.Includedwithinthi sallocationarenetrevenues,provisionforcreditlossesaswellasexpenses.Prior-yearperiodsreflectedareimbu rsementtotheIBforaRESULTSportionofthetotalcostsofmanagingthecreditportfolio3 Actualnumbersforallperiods,notover/under4 Includesdepositsanddepositsswepttoon-balancesheetliabilities5 Calculatedbasedonaverageequity;1Q11,4Q10,and1Q10averageequitywas$7.0B,$6.5B,and$6.5BrespectivelyFINA NCIAL10 |
| AssetManagement$inmillions Netincomeof$466mmup19%YoY$O/(U) Pretaxmarginof31%1Q114Q101Q10 Revenueof$2.4Bup13%YoYduetotheeffectRevenue$2,406($207)$275PrivateBanking1 1,317(59)167ofhighermarketlevels,netinflowstoproductsInstitutional549(126)5withhighermarginsandhighe rloanRetail540(22)103originations,partiallyoffsetbylowerCreditCosts5(18)(30)performancefeesExpense1, 660(117)218NetIncome$466($41)$74Assetsundermanagementof$ 1.3Tup9%KeyStatistics($B)2 YoY;Assetsundersupervisionof$1.9Tup12%AssetsunderManagement$1,330$1,298$1,219YoYAssetsunderSupervisi on$1,908$1,840$1,707AverageLoans$44.9$42.3$36.6 RecordAUMinflowstolong-termproductsofEOPLoans$46.5$44.1$37.1$27BforthequarterpartiallyoffsetbyAverag eDeposits$95.3$89.3$80.7outflowsinliquidityproductsof$9BPretaxMargin31%31%31%ROE3 29%31%24% GoodglobalinvestmentperformanceEOPEquity$6.5$6.5$6.577%ofmutualfundAUMrankedinthefirst 1 PrivateBankingisacombinationofthepreviouslydisclosedclientssegments:PrivateBank,PrivateWealthManagem entandJPMorganSecuritiesorsecondquartilesoverpastfiveyears;70%2 Actualnumbersforallperiods,notover/under3 Calculatedbasedonaverageequityof$6.5Bover3-yearsand57%over1-yearSTLUS Expenseup15%YoYlargelyresultingfromanERincreaseinheadcountLAICNANI11F |
| Corporate/PrivateEquityNetIncome($inmillions)PrivateEquity$O/(U) PrivateEquityportfolioof$10.1B(7.7%of1Q114Q101Q10stockholders’equitylessgoodwill)PrivateEquity$383$2 05$328CorporateCorporate339488166 Corporate,excludingPrivateEquity,quarterlynetincomeshouldbe$300mm+/-NetIncome$722$693$494RESULTSFINA NCIAL12 |
| Fortressbalancesheet$,2$120$115$104BaselIIITier1CommonCapital1,2,3 (Estimate)$116$112$96BaselIRisk-$1,194$1,175$1,147TotalAssets$2,198$2,118$2,1361,2BaselITier1CommonR atio10.0%9.8%9.1%BaselIIITier1CommonRatio1,2,3(Estimate)7.3%7.0%6.2% Firmwidetotalcreditreservesof$30.4B;loanlosscoverageratioof4.10%4 Globalliquidityreserve$316B1,5 Increasedannualdividendto$1.00pershareupfrom$0.20pershare Authorizedanew$15Bmulti-yearsharerepurchaseprogramS Upto$8Bmayberepurchasedin2011TLU1Estimatedfor1Q11S2Seenote6onslide19ER 3RepresentstheFirm’sbestestimate,basedonitscurrentunderstandingofproposedrules4 Seenote2onslide19LA5 TheGlobalLiquidityReserverepresentscashondepositatcentralbanks,andthecashproceedsexpectedtobereceive dinconnectionwithsecuredfinancingofhighlyliquid,Iunencumberedsecurities(suchassovereigns,FDICandgove rnmentguaranteed,agencyandagencyMBS).Inaddition,theGlobalLiquidityReserveincludestheFirm’sborrowingC capacityattheFederalReserveBankdiscountwindowandvariousothercentralbanksandfromvariousFederalHomeLoa nBanks,whichcapacityismaintainedbytheFirmhavingNApledgedcollateraltoallsuchbanks.Theseamountsreprese ntpreliminaryestimateswhichmayberevisedintheFirm’s10-QfortheperiodendingMarch31,2011NNote:FirmwideLe vel3assetsareestimatedtobe5%oftotalFirmassetsatMarch31,2011I13F |
| OutlookRetailFinancialServicesCorporate/PrivateEquity HomeLendinglossguidance: PrivateEquity Expecttotalquarterlynetcharge-offsof Resultswillbevolatile$1.2B+/- Corporate Repurchaseslossesof$1.2B+/-annualized Corporate,excludingPrivateEquity,run-rateforremainderof2011quarterlynetincomeshouldbe$300mm+/-CardSe rvices ChaseexcludingWaMuandCommercialCardcreditlossesexpectedtocontinuetoimprove Chaselossesexpectedtobeapproximately5.5%+/-in2Q11 Wecouldachievethrough-the-cyclelossrateforChaseof4.5%+/-inmid-2012 Outstandingsshouldstabilizein2H11RESULTS End-of-periodoutstandingsof$120BforChaseand$10BforWaMubyyear-end2011FINANCIAL14 |
| FINANCIALRESULTSAgendaAppendix1515Page |
| Consumercredit—delinquencytrends(Excl.purchasedcredit-impairedloansandWaMuandCommercialCardportfoli os)Note:DelinquenciespriortoSeptember2008areheritageChaseXPrimeMortgageexcludesloansheld-for-sale,As setManagementandU.S.Government-InsuredIDloansN1Seenote3onslide19E2 “Paymentholiday“in2Q09impacted30+dayand30-89daydelinquencytrendsin3Q09PP16A |
| Firmwidecoverageratiosremainstrong$inmillionsLoanLossReserveLoanLossReserve/NPLs1 LoanLossReserve/TotalLoans1 6.00%NonperformingLoans500%5.00%400%38,18634,16135,8364.00%32,266300%30,63331,60229,07229,7503.00%20 0%27,3812.00%100%17,76717,56417,05016,17915,50314,78514,84113,44111,4011.00%0%1Q092Q093Q094Q091Q102Q 103Q104Q101Q11Peercomparison $29.8Bofloanlossreservesin1Q11,down1Q114Q10~$8.4Bfrom$38.2BoneyearagoreflectingJPM1 JPM1PeerAvg.2 continuedimprovementinthecreditConsumerenvironment;loanlosscoverageratioofLLR/TotalLoans5.49%5.78%5. 51%LLR/NPLs240%255%194%4.10%1WholesaleLLR/TotalLoans1.84%2.14%2.33% $7.5B(pretax)additioninallowanceforLLR/NPLs92%86%59%loanlossesrelatedtotheconsolidationofFirmwidecre ditcardreceivablesin1Q10LLR/TotalLoans4.10%4.46%4.47%XILLR/NPLs189%190%137%DN1 Seenote2onslide19EP2 Peeraveragereflectsequivalentmetricsforkeycompetitors.PeersaredefinedasC,BACandPWFCA17 |
| IBleaguetablesLeaguetableresults ForYTDMarch31,2011,JPMranked:1Q20112010 #1inGlobalIBfeesRankShareRankShare #1inGlobalM&AAnnouncedBasedonfees: #1inGlobalLoanSyndicationsGlobalIBfees1#18.6%#17.6% #3inGlobalDebt,Equity&Equity-relatedBasedonvolumes: #3inGlobalLong-termDebtGlobalDebt,Equity&Equity-related#36.6%#17.2% #7inGlobalEquity&Equity-relatedUSDebt,Equity&Equity-related#111.8%#111.1%GlobalEquity&Equity-related 2#75.7%#37.3%USEquity&Equity-related#49.5%#212.6%GlobalLong-termDebt3 #36.7%#27.2%USLong-termDebt3#111.8%#210.9%GlobalM&AAnnounced4 #126.8%#316.3%USM&AAnnounced4,5 #144.5%#323.0%GlobalLoanSyndications#112.3%#18.5%USLoanSyndications#124.5%#219.3%Source:Dealogic1GlobalIBfeesexcludemoney-market,short-termdebtandshelfdeals2 Equity&Equity-relatedincluderightsofferingsandChineseA-Shares3 Long-termDebttablesincludeinvestment-grade,high-yield,ABS,MBS,coveredbonds,supranational,sovereignan dagencyissuance;excludemoneymarket,short-termdebtandU.S.municipalsecurities4 GlobalannouncedM&Aisbaseduponvalueatannouncement,withfullcredittoeachadvisor/equalifjoint;allotherra nkingsarebaseduponproceeds.Becauseofjointassignments,M&Amarketshareofallparticipantswilladduptomoret han100%.Rankingsreflecttheremovalofanywithdrawntransactions5 USM&ArepresentsanyUSinvolvementrankingAPPENDIX18 |
| Notesonnon-GAAPfinancialmeasures1.InadditiontoanalyzingtheFirm’sresultsonareportedbasis,managementre viewstheFirm’sresultsandtheresultsofthelinesofbusinessona“managed“basis,whichisanon-GAAPfinancialmea sure.TheFirm’sdefinitionofmanagedbasisstartswiththereportedU.S.GAAPresultsandincludescertainreclassi ficationstopresenttotalnetrevenuefortheFirm(andeachofthebusinesssegments)onaFTEbasis.Accordingly,rev enuefromtax-exemptsecuritiesandinvestmentsthatreceivetaxcreditsispresentedinthemanagedresultsonabasi scomparabletotaxablesecuritiesandinvestments.Thisnon-GAAPfinancialmeasureallowsmanagementtoassessthe comparabilityofrevenuearisingfrombothtaxableandtax-exemptsources.Thecorrespondingincometaximpactrela tedtotax-exemptitemsisrecordedwithinincometaxexpense.Theseadjustmentshavenoimpactonnetincomeasreport edbytheFirmasawholeorbythelinesofbusiness.2.Theratiooftheallowanceforloanlossestoend-of-periodloanse xcludesthefollowing:loansaccountedforatfairvalueandloansheld-for-sale;purchasedcredit-impaired(“PCI” )loans;andtheallowanceforloanlossesrelatedtoPCIloans.Additionally,RealEstatePortfoliosnetcharge-offs excludetheimpactofPCIloans.Theallowanceforloanlossesrelatedtothepurchasedcredit-impairedportfoliotot aled$4.9billion,$4.9billionand$2.8billionatMarch31,2011,December31,2010,andMarch31,2010,respectively .3.InCardServices,supplementalinformationisprovidedforChase,excludingWashingtonMutualandCommercialCa rdportfolios,toprovidemoremeaningfulmeasuresthatenablecomparabilitywithpriorperiods.4.Treasury&Secur itiesServicesfirmwidemetricsincludecertainTSSproductrevenueandliabilitybalancesreportedinotherlineso fbusinessrelatedtocustomerswhoarealsocustomersofthoseotherlinesofbusiness.Inordertocapturethefirmwid eimpactofTSSproductsandrevenue,managementreviewsfirmwidemetricssuchasliabilitybalances,revenueandove rheadratiosinassessingfinancialperformanceforTSS.Firmwidemetricsarenecessary,inmanagement’sview,inor dertounderstandtheaggregateTSSbusiness.5.Pretaxmarginrepresentsincomebeforeincometaxexpensedividedby totalnetrevenue,whichis,inmanagement’sview,acomprehensivemeasureofpretaxperformancederivedbymeasurin gearningsafterallcostsaretakenintoconsideration.Itis,therefore,anotherbasisthatmanagementusestoevalu atetheperformanceofTSSandAMagainsttheperformanceoftheirrespectivecompetitors.6.BaselITier1commonrati oandBaselIIITier1commonratioisTier1commondividedbyrisk-weightedassets.Tier1commonisdefinedasTier1cap itallesselementsofcapitalnotintheformofcommonequity—suchasperpetualpreferredstock,noncontrollingint erestsinsubsidiariesandtrustpreferredcapitaldebtsecurities.Tier1common,anon-GAAPfinancialmeasure,isu sedbybankingregulators,investorsandanalyststoassessandcomparethequalityandcompositionoftheFirm’scapi talwiththecapitalofotherfinancialservicescompanies.TheFirmusesTier1commonalongwiththeothercapitalmea surestoassessandmonitoritscapitalposition.7.Tangiblecommonequity(“TCE”)representscommonstockholders’ equity(i.e.,totalstockholders’equitylesspreferredstock)lessidentifiableintangibleassets(otherthanMSR s)andgoodwill,netofrelateddeferredtaxliabilities.Returnontangiblecommonequity(“ROTCE”),anon-GAAPfina ncialratio,measurestheFirm’searningsasapercentageofTCEandis,inmanagement’sview,ameaningfulmeasuretoa ssesstheFirm’suseofequity.8.Headcount-relatedexpenseincludessalaryandbenefits(excludingperformance-b asedincentives),andothernoncompensationcostsrelatedtoemployees.APPENDIX19 |
| Forward-lookingstatementsThispresentationcontainsforward-lookingstatementswithinthemeaningofthePriva teSecuritiesLitigationReformActof1995.SuchstatementsarebaseduponthecurrentbeliefsandexpectationsofJP MorganChase&Co.’smanagementandaresubjecttosignificantrisksanduncertainties.Actualresultsmaydifferfro mthosesetforthintheforward-lookingstatements.FactorsthatcouldcauseJPMorganChase&Co.’sactualresultsto differmateriallyfromthosedescribedintheforward-lookingstatementscanbefoundinJPMorganChase&Co.’sAnnua lReportonForm10-KfortheyearendedDecember31,2010,whichhasbeenfiledwiththeSecuritiesandExchangeCommiss ionandisavailableonJPMorganChase&Co.’swebsite(www.jpmorganchase.com)andontheSecuritiesandExchangeCom mission’swebsite(www.sec.gov).JPMorganChase&Co.doesnotundertaketoupdatetheforward-lookingstatementst oreflecttheimpactofcircumstancesoreventsthatmayariseafterthedateoftheforward-lookingstatements.APPEN DIX20 |