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) |
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit Number | Description of Exhibit | |
12.1 |
JPMorgan Chase & Co. Computation of Ratio of Earnings to Fixed Charges | |
99.1 |
JPMorgan Chase & Co. Earnings Release First Quarter 2007 Results | |
99.2 |
JPMorgan Chase & Co. Earnings Release Financial Supplement First Quarter 2007 |
2
JPMORGAN CHASE & CO. | |||||||
(Registrant) | |||||||
By: | /s/ Louis Rauchenberger | ||||||
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 | |
99.1
|
JPMorgan Chase & Co. Earnings Release First Quarter 2007 Results | |
99.2
|
JPMorgan Chase & Co. Earnings Release Financial Supplement First Quarter 2007 |
4
Three months ended March 31, (in millions, except ratios) | 2007 | |||
Excluding Interest on Deposits |
||||
Income from continuing operations before income taxes |
$ | 7,332 | ||
Fixed charges: |
||||
Interest expense |
5,523 | |||
One-third of rents, net of income from subleases (a) |
99 | |||
Total fixed charges |
5,622 | |||
Less: Equity in undistributed income of affiliates |
(33 | ) | ||
Income from continuing operations before income taxes and fixed charges,
excluding capitalized interest |
$ | 12,921 | ||
Fixed charges, as above |
$ | 5,622 | ||
Ratio of earnings to fixed charges |
2.30 | |||
Including Interest on Deposits |
||||
Fixed charges, as above |
$ | 5,622 | ||
Add: Interest on deposits |
4,995 | |||
Total fixed charges and interest on deposits |
$ | 10,617 | ||
Income from continuing operations before income taxes and fixed charges,
excluding capitalized interest, as above |
$ | 12,921 | ||
Add: Interest on deposits |
4,995 | |||
Total income from continuing operations before income taxes,
fixed charges and interest on deposits |
$ | 17,916 | ||
Ratio of earnings to fixed charges |
1.69 | |||
(a) | The proportion deemed representative of the interest factor. |
Exhibit 99.1 | ||
JPMorgan Chase & Co. 270 Park Avenue, New York, NY 10017-2070 NYSE symbol: JPM www.jpmorganchase.com |
||
| Investment Bank generates record earnings of $1.5 billion on record revenue of $6.3 billion; record fixed income and equity markets results and investment banking fees | ||
| Asset Management and Commercial Banking produce record earnings; Private Equity posts very strong results | ||
| Retail Financial Services successfully completed the systems conversion and rebranding for 339 former Bank of New York branches; branch sales volumes continue to grow |
| Declared a quarterly dividend of $0.38 per share on the corporations common stock, an increase of $0.04 per share, or 12%. The dividend is payable on July 31, 2007, to stockholders of record at the close of business on July 6, 2007. | |
| Authorized a new $10 billion common stock repurchase program, replacing the prior $8 billion program that had approximately $850 million of remaining authorization. |
1 | Comprising $103 million related to adjustments to the valuation of liabilities to incorporate the impact of the firms credit quality and $288 million related to the valuation of nonpublic private equity investments. |
Investor Contact: Julia Bates (212) 270-7318 | Media Contact: Joe Evangelisti (212) 270-7438 |
Results for IB | 4Q06 | 1Q06 | |||||||||||||||||||||||||||||||||||
($ millions) | 1Q07 | 4Q06 | 1Q06 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | ||||||||||||||||||||||||||||||
Net Revenue(a) (b) |
$ | 6,254 | $ | 4,860 | $ | 4,828 | $ | 1,394 | 29 | % | $ | 1,426 | 30 | % | |||||||||||||||||||||||
Provision for Credit Losses |
63 | 63 | 183 | | | (120 | ) | (66 | ) | ||||||||||||||||||||||||||||
Noninterest Expense(b) |
3,831 | 3,205 | 3,320 | 626 | 20 | 511 | 15 | ||||||||||||||||||||||||||||||
Net Income |
$ | 1,540 | $ | 1,009 | $ | 850 | $ | 531 | 53 | % | $ | 690 | 81 | % | |||||||||||||||||||||||
(a) | As a result of the adoption on January 1, 2007, of SFAS 157 (Fair Value Measurements), the IB recognized a benefit of $166 million in net revenue (primarily in Credit Portfolio, but with smaller impacts to Equity Markets and Fixed Income Markets) relating to the incorporation, commencing in the current quarter, of an adjustment to the valuation of the firms derivative liabilities and other liabilities measured at fair value that reflects the credit quality of the firm. | |
(b) | Certain transaction costs, previously reported within net revenue, have been reclassified to noninterest expense. Net revenue and noninterest expense have been reclassified for all periods presented. |
2
| Ranked #1 in both Global and U.S. Equity and Equity-Related for the first time ever; #1 in Global Syndicated Loans; #2 in Global Announced M&A; #2 in Global Debt, Equity and Equity-Related; and #2 in Global Long-Term Debt based upon volume, according to Thomson Financial for year-to-date March 31, 2007. |
| Total average loans of $72.7 billion were flat from the prior year and down by $12.0 billion, or 14%, from the prior quarter. |
| Average loans retained of $59.9 billion were up by $6.2 billion, or 12%, from the prior year and down by $1.1 billion, or 2%, from the prior quarter. | ||
| Average loans held-for-sale of $12.8 billion were down by $6.4 billion, or 33%, from the prior year and down by $11.0 billion, or 46%, from the prior quarter. | ||
| Approximately $12.0 billion of held-for-sale loans were reclassified to trading assets as a result of the adoption of SFAS 159 (Fair Value Option). |
| Allowance for loan losses to average loans was 1.76% for the current quarter, down from 2.08% in the prior year; nonperforming assets were $128 million, down 74% from the prior year and down 52% from the prior quarter. |
| Return on equity was 30% on $21 billion of allocated capital. |
3
Results for RFS | 4Q06 | 1Q06 | |||||||||||||||||||||||||||||||||||
($ millions) | 1Q07 | 4Q06 | 1Q06 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | ||||||||||||||||||||||||||||||
Net Revenue |
$ | 4,106 | $ | 3,728 | $ | 3,763 | $ | 378 | 10 | % | $ | 343 | 9 | % | |||||||||||||||||||||||
Provision for Credit Losses |
292 | 262 | 85 | 30 | 11 | 207 | 244 | ||||||||||||||||||||||||||||||
Noninterest Expense |
2,407 | 2,291 | 2,238 | 116 | 5 | 169 | 8 | ||||||||||||||||||||||||||||||
Net Income |
$ | 859 | $ | 718 | $ | 881 | $ | 141 | 20 | % | ($22 | ) | (2 | %) | |||||||||||||||||||||||
4
| Systems conversion and rebranding successfully completed for the 339 branches acquired from The Bank of New York, adding 1.2 million New York Tri-state deposit accounts to the Chase platform. | ||
| Checking accounts of 10.1 million were up by 1.2 million, or 13%, from the prior year (including approximately 615,000 accounts acquired from The Bank of New York on October 1, 2006), and up by 141,000, or 1%, from the prior quarter. | ||
| Average total deposits increased to $206.5 billion, up by $21.8 billion, or 12%, from the prior year (including approximately $11.5 billion of deposits acquired from The Bank of New York on October 1, 2006), and up 3% from the prior quarter. | ||
| Number of branches increased to 3,071, up by 433 from the prior year (including 339 acquired from The Bank of New York), and down by 8 from the prior quarter. | ||
| Branch sales of credit cards increased 17% from the prior year. | ||
| Branch sales of investment products increased 35% from the prior year and 17% from the prior quarter. | ||
| Business Banking loan originations of $1.7 billion were up 30% from the prior year and 8% from the prior quarter. | ||
| Overhead ratio (excluding amortization of core deposit intangibles) decreased to 52% from 54% in the prior year. | ||
| Average home equity loans of $86.3 billion were up by $12.2 billion from the prior year. | ||
| Prime mortgage loans of $19.4 billion were transferred to Treasury within the Corporate segment. Although the loans, together with the responsibility for the investment management of the portfolio, were transferred to Treasury, the transfer has no impact on the financial results of Regional Banking. |
5
| Mortgage loan originations of $34.1 billion were up 21% from the prior year and 10% from the prior quarter. | ||
| Total third-party mortgage loans serviced were $546.1 billion, an increase of $62.0 billion, or 13%, from the prior year. |
| Average loan receivables of $39.4 billion declined 4% from the prior year and increased 2% from the prior quarter. | ||
| Average lease-related assets of $3.1 billion declined 38% from the prior year and 9% from the prior quarter. | ||
| The net charge-off ratio increased to 0.59% from 0.46% in the prior year. |
Results for CS | 4Q06 | 1Q06 | |||||||||||||||||||||||||||||||||||
($ millions) | 1Q07 | 4Q06 | 1Q06 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | ||||||||||||||||||||||||||||||
Net Revenue |
$ | 3,680 | $ | 3,750 | $ | 3,685 | ($70 | ) | (2 | )% | ($5 | ) | | % | |||||||||||||||||||||||
Provision for Credit Losses |
1,229 | 1,281 | 1,016 | (52 | ) | (4 | ) | 213 | 21 | ||||||||||||||||||||||||||||
Noninterest Expense |
1,241 | 1,341 | 1,243 | (100 | ) | (7 | ) | (2 | ) | | |||||||||||||||||||||||||||
Net Income |
$ | 765 | $ | 719 | $ | 901 | $ | 46 | 6 | % | ($136 | ) | (15 | )% | |||||||||||||||||||||||
6
| Return on Equity was 22%, down from 26% in the prior year, but up from 20% in the prior quarter. | ||
| Pretax income to average managed loans (ROO) was 3.28%, down from 4.19% in the prior year, but up from 3.04% in the prior quarter. | ||
| Net interest income as a percentage of average managed loans was 8.11%, down from 8.85% in the prior year, but up from 7.92% in the prior quarter. | ||
| Net accounts opened during the quarter were 3.4 million. | ||
| Charge volume of $81.3 billion increased by $7.0 billion, or 9%, from the prior year. | ||
| Merchant processing volume of $163.6 billion increased by $15.9 billion, or 11%, and total transactions of 4.5 billion increased by 335 million, or 8%, from the prior year. | ||
| Several new partner relationships were signed, including Amtrak; and several partner relationships were renewed, including Buy.com and Speedway SuperAmerica. |
7
Results for CB | 4Q06 | 1Q06 | |||||||||||||||||||||||||||||||||||
($ millions) | 1Q07 | 4Q06 | 1Q06 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | ||||||||||||||||||||||||||||||
Net Revenue |
$ | 1,003 | $ | 1,018 | $ | 900 | ($15 | ) | (1 | %) | $ | 103 | 11 | % | |||||||||||||||||||||||
Provision for Credit Losses |
17 | 111 | 7 | (94 | ) | (85 | ) | 10 | 143 | ||||||||||||||||||||||||||||
Noninterest Expense |
485 | 485 | 498 | | | (13 | ) | (3 | ) | ||||||||||||||||||||||||||||
Net Income |
$ | 304 | $ | 256 | $ | 240 | $ | 48 | 19 | % | $ | 64 | 27 | % | |||||||||||||||||||||||
| Overhead ratio was 48%. | ||
| Gross investment banking revenue (which is shared with the Investment Bank) was $231 million, up by $117 million, or 103%, from the prior year and down $15 million, or 6%, from the prior quarter. | ||
| Average loan and lease balances of $57.7 billion were up by $6.8 billion, or 13%, from the prior year, including approximately $2.3 billion of loans acquired from The Bank of New York on October 1, 2006. Compared with the prior quarter, average loan and lease balances were flat. | ||
| Average liability balances of $81.8 billion were up by $11.0 billion, or 16%, from the prior year, including approximately $1.2 billion of liability balances acquired from The Bank of New York on October 1, 2006. Compared with the prior quarter, average liability balances were up by $2.7 billion, or 3%. | ||
| Nonperforming loans of $141 million decreased by $61 million, or 30%, from the prior year, and increased by $20 million, or 17%, from the prior quarter. The allowance for loan losses to average loans was 2.68% compared with 2.80% in the prior year and 2.67% in the prior quarter. |
8
Results for TSS | 4Q06 | 1Q06 | |||||||||||||||||||||||||||||||||||
($ millions) | 1Q07 | 4Q06 | 1Q06 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | ||||||||||||||||||||||||||||||
Net Revenue |
$ | 1,526 | $ | 1,537 | $ | 1,485 | $ | (11 | ) | (1 | )% | $ | 41 | 3 | % | ||||||||||||||||||||||
Provision for Credit Losses |
6 | (2 | ) | (4 | ) | 8 | NM | 10 | NM | ||||||||||||||||||||||||||||
Noninterest Expense |
1,075 | 1,104 | 1,048 | (29 | ) | (3 | ) | 27 | 3 | ||||||||||||||||||||||||||||
Net Income |
$ | 263 | $ | 256 | $ | 262 | $ | 7 | 3 | % | $ | 1 | | % | |||||||||||||||||||||||
| Pretax margin(2) was 27%, down from 28% in the prior year and up from 26% in the prior quarter. | ||
| Average liability balances were $211 billion, an increase of 18%. | ||
| Assets under custody increased to $14.7 trillion, up 31%. | ||
| U.S. dollar ACH transactions originated increased 16%. | ||
| New client relationships included: |
| Global payments and core cash management solution for Gap, Inc.; | ||
| Debit cards for unemployment insurance benefits for the Rhode Island Department of Labor and Training; | ||
| Asset servicing for Wellcome Trust, one of the largest charitable foundations in the world; and | ||
| Global Depositary Receipt (GDR) for Uttam Galva Steels Ltd., the first GDR listing on the Singapore Exchange. |
| Significant transactions included: |
| Completed the acquisition of FisaCure, Inc., a leading provider of data capture technology solutions to healthcare providers; and |
9
| Announced the acquisition of the U.S. transfer agency services business of Cincinnati-based Integrated Investment Services (IIS). |
Results for AM | 4Q06 | 1Q06 | |||||||||||||||||||||||||||||||||||
($ millions) | 1Q07 | 4Q06 | 1Q06 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | ||||||||||||||||||||||||||||||
Net Revenue |
$ | 1,904 | $ | 1,947 | $ | 1,584 | $ | (43 | ) | (2 | )% | $ | 320 | 20 | % | ||||||||||||||||||||||
Provision for Credit Losses |
(9 | ) | 14 | (7 | ) | (23 | ) | NM | (2 | ) | (29 | ) | |||||||||||||||||||||||||
Noninterest Expense |
1,235 | 1,284 | 1,098 | (49 | ) | (4 | ) | 137 | 12 | ||||||||||||||||||||||||||||
Net Income |
$ | 425 | $ | 407 | $ | 313 | $ | 18 | 4 | % | $ | 112 | 36 | % | |||||||||||||||||||||||
10
| Pretax margin(2) was 36%, up from 31% in the prior year. | ||
| Assets under Supervision were $1.4 trillion, up 17%, or $198 billion, from the prior year. | ||
| Assets under Management were $1.1 trillion, up 21%, or $180 billion, from the prior year, including growth of 47%, or $35 billion, in alternative assets. | ||
| Assets under Management net inflows were $19 billion for first-quarter 2007. | ||
| Assets under Management that were ranked in the top two quartiles for investment performance over the past three years were 76%, similar to the level at the end of the prior quarter. | ||
| Customer assets in 4 and 5 Star rated funds were 61%, up from 58% at the end of the prior quarter. | ||
| Average loans of $25.6 billion were up by $1.2 billion, or 5%, from the prior year. Loans in the current quarter reflected the transfer of $5.3 billion of prime mortgage loans to Treasury within the Corporate segment. Although the loans, together with the responsibility for the investment management of the portfolio, were transferred to Treasury, the transfer has no impact on the financial results of Asset Management. | ||
| Average deposits of $54.8 billion were up by $6.8 billion, or 14%, from the prior year. |
11
Results for Corporate | 4Q06 | 1Q06 | |||||||||||||||||||||||||||||||||||
($ millions) | 1Q07 | 4Q06 | 1Q06 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | ||||||||||||||||||||||||||||||
Net Revenue(a) |
$ | 1,268 | $ | 194 | ($404 | ) | $ | 1,074 | NM | $ | 1,672 | NM | |||||||||||||||||||||||||
Provision for Credit Losses |
3 | (2 | ) | | 5 | NM | 3 | NM | |||||||||||||||||||||||||||||
Noninterest Expense |
354 | 175 | 335 | 179 | 102 | % | 19 | 6 | % | ||||||||||||||||||||||||||||
Income (Loss) from
Continuing Operations |
631 | 541 | (420 | ) | 90 | 17 | 1,051 | NM | |||||||||||||||||||||||||||||
Income from Discontinued
Operations
(after-tax)(b) |
| 620 | 54 | (620 | ) | NM | (54 | ) | NM | ||||||||||||||||||||||||||||
Net Income/(Loss) |
$ | 631 | $ | 1,161 | ($366 | ) | ($530 | ) | (46 | )% | $ | 997 | NM | ||||||||||||||||||||||||
(a) | As a result of the adoption on January 1, 2007, of SFAS 157 (Fair Value Measurements), Corporate recognized a benefit of $464 million in net revenue in the current quarter relating to valuation adjustments on nonpublic private equity investments. | |
(b) | Discontinued operations include the related balance sheet and income statement activity of selected corporate trust businesses sold to The Bank of New York on October 1, 2006. Prior to the second quarter of 2006, these corporate trust businesses were reported in Treasury & Securities Services. |
| Private Equity portfolio was $6.4 billion, up from $6.3 billion in the prior year and up from $6.1 billion in the prior quarter. The portfolio represented 8.8% of stockholders equity less goodwill, down from 9.7% in the prior year and up from 8.6% in the prior quarter. |
12
Results for JPM | 4Q06 | 1Q06 | |||||||||||||||||||||||||||||||||||
($ millions) | 1Q07 | 4Q06 | 1Q06 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | ||||||||||||||||||||||||||||||
Net Revenue(a,b,c) |
$ | 19,741 | $ | 17,034 | $ | 15,841 | $ | 2,707 | 16 | % | $ | 3,900 | 25 | % | |||||||||||||||||||||||
Provision for Credit Losses(a) |
1,601 | 1,727 | 1,280 | (126 | ) | (7 | ) | 321 | 25 | ||||||||||||||||||||||||||||
Noninterest Expense(c) |
10,628 | 9,885 | 9,780 | 743 | 8 | 848 | 9 | ||||||||||||||||||||||||||||||
Income from Continuing Operations |
4,787 | 3,906 | 3,027 | 881 | 23 | 1,760 | 58 | ||||||||||||||||||||||||||||||
Income from Discontinued Operations
(after-tax)(d) |
| 620 | 54 | (620 | ) | NM | (54 | ) | NM | ||||||||||||||||||||||||||||
Net Income |
$ | 4,787 | $ | 4,526 | $ | 3,081 | $ | 261 | 6 | % | $ | 1,706 | 55 | % | |||||||||||||||||||||||
(a) | Presented on a managed basis; see Note 1 (Page 16) for further explanation of managed basis. Net revenue on a GAAP basis was $18,968 million, $16,193 million and $15,175 million for the first quarter of 2007, fourth quarter of 2006 and first quarter of 2006, respectively. | |
(b) | As a result of the adoption on January 1, 2007, of SFAS 157 (Fair Value Measurements), the firm recognized a benefit in the current quarter of $166 million related to the incorporation of an adjustment to the valuation of the firms derivative liabilities and other liabilities measured at fair value that reflects the credit quality of the firm and a benefit of $464 million related to valuation adjustments on nonpublic private equity investments. | |
(c) | Certain transaction costs, previously reported within net revenue, have been reclassified to noninterest expense. Net revenue and noninterest expense have been reclassified for all periods presented. | |
(d) | Discontinued operations include the related balance sheet and income statement activity of selected corporate trust businesses sold to The Bank of New York on October 1, 2006. Prior to the second quarter of 2006, these corporate trust businesses were reported in Treasury & Securities Services. |
13
| Tier 1 capital ratio was 8.5% at March 31, 2007 (estimated), 8.7% at December 31, 2006, and 8.5% at March 31, 2006. | ||
| During the quarter, $4.0 billion of common stock was repurchased, reflecting 80.9 million shares purchased at an average price of $49.45 per share. | ||
| Headcount of 176,314 increased by 1,954 since December 31, 2006. |
14
| Common stock dividend: The Board of Directors has declared a quarterly dividend of $0.38 per share on the outstanding shares of the corporations common stock, an increase of $0.04 per share, or 12%. The dividend is payable on July 31, 2007, to stockholders of record at the close of business on July 6, 2007. On April 30, 2007, the firm will pay its previously declared quarterly common stock dividend of $0.34 per share to shareholders of record as of April 5, 2007. | ||
| Common Stock Repurchase Program: The Board of Directors has authorized the repurchase of up to $10 billion of the firms common shares. The new authorization commences April 19, 2007, and replaces the firms previous $8 billion repurchase program authorized on March 21, 2006. As of the close of business on April 17, 2007, there was approximately $850 million remaining on the March 2006 authorization. The new authorization will be utilized at managements discretion, and the timing of purchases and the exact number of shares purchased will depend on market conditions and alternative investment opportunities. The new repurchase program does not include specific price targets or timetables; may be executed through open market purchases, privately negotiated transactions or utilizing Rule 10b5-1 programs; and may be suspended at any time. | ||
| Merger savings and cost related: For the quarter ended March 31, 2007, approximately $720 million of merger savings have been realized, which is an annualized rate of $2.9 billion, in line with managements target for the year. Management estimates that annualized savings will be approximately $3.0 billion by the end of 2007. Merger costs of $62 million were expensed during the first quarter of 2007, bringing the total amount incurred to $3.5 billion (including capitalized costs) since the beginning of 2004. Management currently expects total merger costs (including costs associated with The Bank of New York transaction) will be approximately $3.8 billion. The remaining merger costs are expected to be incurred by the end of 2007. | ||
| Accounting Developments: | ||
FASB Statement No. 157 (Fair Value Measurements): JPMorgan Chase chose early adoption for Statement of Financial Accounting Standards No. 157, Fair Value Measurements, effective January 1, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about assets and liabilities measured at fair value. SFAS 157 nullifies the guidance in EITF 02-3, which required deferral of profit at inception of a derivative transaction in the absence of observable data supporting the valuation technique. The standard also eliminates large position discounts for financial instruments quoted in active markets and requires consideration of the firms own credit quality when valuing liabilities. The adoption primarily affected the Investment Bank and Private Equity business within Corporate. | |||
FASB Statement No. 159 (Fair Value Option): JPMorgan Chase early adopted Statement of Financial Accounting Standards No. 159, Fair Value Option, effective January 1, 2007. SFAS 159 provides the option to elect fair value as an alternative measurement for selected financial assets, financial liabilities, unrecognized firm commitments and written loan commitments. Under SFAS 159, fair value is used for both the initial and subsequent measurement of the designated assets, liabilities and commitments, with the changes in value recognized in earnings. The primary elections related to structured notes and loans warehoused in the Investment Bank, and to prime mortgage loans held in warehouse in Retail Financial Services. | |||
FASB Interpretation No. 48 (Accounting for Uncertainty in Income Taxes): JPMorgan Chase chose early adoption for Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes, effective January 1, 2007. FIN 48 addresses the recognition and measurement of tax positions taken or expected to be taken, and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, and disclosure. The firm applied FIN 48 to all of its income tax positions as of January 1, 2007, under the transition provision of the Interpretation. |
15
1Q07 Accounting Items ($ millions) | Implementation impacts | ||||||||||||||||
Pretax | After-tax | After-tax | |||||||||||||||
Income | Income | Equity | |||||||||||||||
SFAS 157 Fair value measurements |
|||||||||||||||||
EITF 02-3 nullification |
$ | 287 | |||||||||||||||
Nonperformance risk (IB) |
$ | 166 | $ | 103 | |||||||||||||
Nonpublic private equity
(Corporate) |
$ | 464 | $ | 288 | |||||||||||||
SFAS 159 Fair value option |
$ | 199 | |||||||||||||||
FIN 48 Accounting for uncertainty
in income taxes |
$ | 436 | |||||||||||||||
Total implementation impact |
$ | 630 | $ | 391 | $ | 922 | |||||||||||
16
17
JPMORGAN
CHASE & CO. CONSOLIDATED FINANCIAL HIGHLIGHTS (in millions, except per share, ratio and
headcount data)
|
QUARTERLY TRENDS | ||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||
1Q07 | 4Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||
SELECTED INCOME STATEMENT DATA |
||||||||||||||||||||
Total Net Revenue (a) |
$ | 18,968 | $ | 16,193 | $ | 15,175 | 17 | % | 25 | % | ||||||||||
Provision for Credit Losses |
1,008 | 1,134 | 831 | (11 | ) | 21 | ||||||||||||||
Total Noninterest Expense |
10,628 | 9,885 | 9,780 | 8 | 9 | |||||||||||||||
Income from Continuing Operations
(after-tax) |
4,787 | 3,906 | 3,027 | 23 | 58 | |||||||||||||||
Income from Discontinued Operations
(after-tax) (b) |
- | 620 | 54 | NM | NM | |||||||||||||||
Net Income |
4,787 | 4,526 | 3,081 | 6 | 55 | |||||||||||||||
PER COMMON SHARE: |
||||||||||||||||||||
Basic Earnings |
||||||||||||||||||||
Income from Continuing Operations |
$ | 1.38 | $ | 1.13 | $ | 0.87 | 22 | 59 | ||||||||||||
Net Income |
1.38 | 1.31 | 0.89 | 5 | 55 | |||||||||||||||
Diluted Earnings |
||||||||||||||||||||
Income from Continuing Operations |
$ | 1.34 | $ | 1.09 | $ | 0.85 | 23 | 58 | ||||||||||||
Net Income |
1.34 | 1.26 | 0.86 | 6 | 56 | |||||||||||||||
Cash Dividends Declared |
0.34 | 0.34 | 0.34 | - | - | |||||||||||||||
Book Value |
34.45 | 33.45 | 31.19 | 3 | 10 | |||||||||||||||
Closing Share Price |
48.38 | 48.30 | 41.64 | - | 16 | |||||||||||||||
Market Capitalization |
165,280 | 167,199 | 144,614 | (1 | ) | 14 | ||||||||||||||
COMMON SHARES OUTSTANDING: |
||||||||||||||||||||
Weighted-Average Diluted Shares
Outstanding |
3,559.5 | 3,578.6 | 3,570.8 | (1 | ) | - | ||||||||||||||
Common Shares Outstanding at Period-end |
3,416.3 | 3,461.7 | 3,473.0 | (1 | ) | (2 | ) | |||||||||||||
FINANCIAL RATIOS : (c) |
||||||||||||||||||||
Income from Continuing Operations: |
||||||||||||||||||||
Return on Common Equity (ROE) |
17 | % | 14 | % | 11 | % | ||||||||||||||
Return on Equity-Goodwill (ROE-GW) (d) |
27 | 22 | 19 | |||||||||||||||||
Return on Assets (ROA) (e) |
1.41 | 1.14 | 0.98 | |||||||||||||||||
Net Income: |
||||||||||||||||||||
ROE |
17 | 16 | 12 | |||||||||||||||||
ROE-GW (d) |
27 | 26 | 20 | |||||||||||||||||
ROA (f) |
1.41 | 1.32 | 1.00 | |||||||||||||||||
CAPITAL RATIOS: |
||||||||||||||||||||
Tier 1 Capital Ratio |
8.5 | (h) | 8.7 | 8.5 | ||||||||||||||||
Total Capital Ratio |
11.8 | (h) | 12.3 | 12.1 | ||||||||||||||||
SELECTED BALANCE SHEET DATA (Period-end) |
||||||||||||||||||||
Total Assets |
$ | 1,408,918 | $ | 1,351,520 | $ | 1,273,282 | 4 | 11 | ||||||||||||
Wholesale Loans |
168,194 | 183,742 | 164,799 | (8 | ) | 2 | ||||||||||||||
Consumer Loans |
281,571 | 299,385 | 267,282 | (6 | ) | 5 | ||||||||||||||
Deposits |
630,184 | 638,788 | 584,465 | (1 | ) | 8 | ||||||||||||||
Common Stockholders Equity |
117,704 | 115,790 | 108,337 | 2 | 9 | |||||||||||||||
Headcount |
176,314 | 174,360 | 170,787 | 1 | 3 | |||||||||||||||
LINE OF BUSINESS EARNINGS |
||||||||||||||||||||
Investment Bank |
$ | 1,540 | $ | 1,009 | $ | 850 | 53 | 81 | ||||||||||||
Retail Financial Services |
859 | 718 | 881 | 20 | (2 | ) | ||||||||||||||
Card Services |
765 | 719 | 901 | 6 | (15 | ) | ||||||||||||||
Commercial Banking |
304 | 256 | 240 | 19 | 27 | |||||||||||||||
Treasury & Securities Services |
263 | 256 | 262 | 3 | - | |||||||||||||||
Asset Management |
425 | 407 | 313 | 4 | 36 | |||||||||||||||
Corporate (g) |
631 | 1,161 | (366 | ) | (46 | ) | NM | |||||||||||||
Net Income |
$ | 4,787 | $ | 4,526 | $ | 3,081 | 6 | 55 | ||||||||||||
(a) | As a result of the adoption on January 1, 2007, of SFAS 157, the Firm recognized a benefit, in the current quarter, of $166 million related to the incorporation of an adjustment to the valuation of the Firms derivative liabilities and other liabilities measured at fair value that reflects the credit quality of the Firm and a benefit of $464 million related to valuation adjustments on nonpublic private equity investments. | |
(b) | On October 1, 2006, the Firm completed the exchange of selected corporate trust businesses including trustee, paying agent, loan agency and document management services for the consumer, business banking and middle-market banking businesses of The Bank of New York. The results of operations of these corporate trust businesses are being reported as discontinued operations for each of the periods presented. | |
(c) | Quarterly ratios are based upon annualized amounts. | |
(d) | Income from continuing operations and Net income applicable to common stock divided by Total average common equity (net of goodwill). The Firm uses Return on equity less goodwill, a non-GAAP financial measure, to evaluate the operating performance of the Firm. The Firm also utilizes this measure to facilitate comparisons to competitors. | |
(e) | Income from continuing operations divided by Total average assets less average Assets of discontinued operations held-for-sale. | |
(f) | Net income divided by Total average assets. | |
(g) | Includes the after-tax impact of discontinued operations, recoveries related to material litigation actions, tax audit benefits and Merger costs. | |
(h) | Estimated. |
18
JPMORGAN CHASE & CO. TABLE OF CONTENTS |
Page | ||||
Consolidated Results |
||||
2 | ||||
3 | ||||
4 | ||||
5 | ||||
6 | ||||
Business Detail |
||||
7 | ||||
8 | ||||
10 | ||||
14 | ||||
17 | ||||
19 | ||||
21 | ||||
24 | ||||
26 | ||||
Supplemental Detail |
||||
31 | ||||
32 |
Page 1
JPMORGAN CHASE & CO. CONSOLIDATED FINANCIAL HIGHLIGHTS (in millions, except per share, ratio and headcount data)
|
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
SELECTED INCOME STATEMENT DATA |
||||||||||||||||||||||||||||
Total Net Revenue (a) |
$ | 18,968 | $ | 16,193 | $ | 15,545 | $ | 15,086 | $ | 15,175 | 17 | % | 25 | % | ||||||||||||||
Provision for Credit Losses |
1,008 | 1,134 | 812 | 493 | 831 | (11 | ) | 21 | ||||||||||||||||||||
Total Noninterest Expense |
10,628 | 9,885 | 9,796 | 9,382 | 9,780 | 8 | 9 | |||||||||||||||||||||
Income from Continuing Operations (after-tax) |
4,787 | 3,906 | 3,232 | 3,484 | 3,027 | 23 | 58 | |||||||||||||||||||||
Income from Discontinued Operations (after-tax) (b) |
- | 620 | 65 | 56 | 54 | NM | NM | |||||||||||||||||||||
Net Income |
4,787 | 4,526 | 3,297 | 3,540 | 3,081 | 6 | 55 | |||||||||||||||||||||
PER COMMON SHARE: |
||||||||||||||||||||||||||||
Basic Earnings |
||||||||||||||||||||||||||||
Income from Continuing Operations |
$ | 1.38 | $ | 1.13 | $ | 0.93 | $ | 1.00 | $ | 0.87 | 22 | 59 | ||||||||||||||||
Net Income |
1.38 | 1.31 | 0.95 | 1.02 | 0.89 | 5 | 55 | |||||||||||||||||||||
Diluted Earnings |
||||||||||||||||||||||||||||
Income from Continuing Operations |
$ | 1.34 | $ | 1.09 | $ | 0.90 | $ | 0.98 | $ | 0.85 | 23 | 58 | ||||||||||||||||
Net Income |
1.34 | 1.26 | 0.92 | 0.99 | 0.86 | 6 | 56 | |||||||||||||||||||||
Cash Dividends Declared |
0.34 | 0.34 | 0.34 | 0.34 | 0.34 | - | - | |||||||||||||||||||||
Book Value |
34.45 | 33.45 | 32.75 | 31.89 | 31.19 | 3 | 10 | |||||||||||||||||||||
Closing Share Price |
48.38 | 48.30 | 46.96 | 42.00 | 41.64 | - | 16 | |||||||||||||||||||||
Market Capitalization |
165,280 | 167,199 | 162,835 | 145,764 | 144,614 | (1 | ) | 14 | ||||||||||||||||||||
COMMON SHARES OUTSTANDING: |
||||||||||||||||||||||||||||
Weighted-Average Diluted Shares Outstanding |
3,559.5 | 3,578.6 | 3,574.0 | 3,572.2 | 3,570.8 | (1 | ) | - | ||||||||||||||||||||
Common Shares Outstanding at Period-end |
3,416.3 | 3,461.7 | 3,467.5 | 3,470.6 | 3,473.0 | (1 | ) | (2 | ) | |||||||||||||||||||
FINANCIAL RATIOS : (c) |
||||||||||||||||||||||||||||
Income from Continuing Operations: |
||||||||||||||||||||||||||||
Return on Common Equity (ROE) |
17 | % | 14 | % | 11 | % | 13 | % | 11 | % | ||||||||||||||||||
Return on Equity-Goodwill (ROE-GW) (d) |
27 | 22 | 19 | 21 | 19 | |||||||||||||||||||||||
Return on Assets (ROA) (e) |
1.41 | 1.14 | 0.98 | 1.05 | 0.98 | |||||||||||||||||||||||
Net Income: |
||||||||||||||||||||||||||||
ROE |
17 | 16 | 12 | 13 | 12 | |||||||||||||||||||||||
ROE-GW (d) |
27 | 26 | 19 | 22 | 20 | |||||||||||||||||||||||
ROA (f) |
1.41 | 1.32 | 1.00 | 1.06 | 1.00 | |||||||||||||||||||||||
CAPITAL RATIOS: |
||||||||||||||||||||||||||||
Tier 1 Capital Ratio |
8.5 | (h) | 8.7 | 8.6 | 8.5 | 8.5 | ||||||||||||||||||||||
Total Capital Ratio |
11.8 | (h) | 12.3 | 12.1 | 12.0 | 12.1 | ||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (Period-end) |
||||||||||||||||||||||||||||
Total Assets |
$ | 1,408,918 | $ | 1,351,520 | $ | 1,338,029 | $ | 1,328,001 | $ | 1,273,282 | 4 | 11 | ||||||||||||||||
Wholesale Loans |
168,194 | 183,742 | 179,403 | 178,215 | 164,799 | (8 | ) | 2 | ||||||||||||||||||||
Consumer Loans |
281,571 | 299,385 | 284,141 | 276,889 | 267,282 | (6 | ) | 5 | ||||||||||||||||||||
Deposits |
630,184 | 638,788 | 582,115 | 593,716 | 584,465 | (1 | ) | 8 | ||||||||||||||||||||
Common Stockholders Equity |
117,704 | 115,790 | 113,561 | 110,684 | 108,337 | 2 | 9 | |||||||||||||||||||||
Headcount |
176,314 | 174,360 | 171,589 | 172,423 | 170,787 | 1 | 3 | |||||||||||||||||||||
LINE OF BUSINESS EARNINGS |
||||||||||||||||||||||||||||
Investment Bank |
$ | 1,540 | $ | 1,009 | $ | 976 | $ | 839 | $ | 850 | 53 | 81 | ||||||||||||||||
Retail Financial Services |
859 | 718 | 746 | 868 | 881 | 20 | (2 | ) | ||||||||||||||||||||
Card Services |
765 | 719 | 711 | 875 | 901 | 6 | (15 | ) | ||||||||||||||||||||
Commercial Banking |
304 | 256 | 231 | 283 | 240 | 19 | 27 | |||||||||||||||||||||
Treasury & Securities Services |
263 | 256 | 256 | 316 | 262 | 3 | - | |||||||||||||||||||||
Asset Management |
425 | 407 | 346 | 343 | 313 | 4 | 36 | |||||||||||||||||||||
Corporate (g) |
631 | 1,161 | 31 | 16 | (366 | ) | (46 | ) | NM | |||||||||||||||||||
Net Income |
$ | 4,787 | $ | 4,526 | $ | 3,297 | $ | 3,540 | $ | 3,081 | 6 | 55 | ||||||||||||||||
(a) | As a result of the adoption on January 1, 2007, of SFAS 157, the Firm recognized a benefit, in the current quarter, of $166 million related to the incorporation of an adjustment to the valuation of the Firms derivative liabilities and other liabilities measured at fair value that reflects the credit quality of the Firm and a benefit of $464 million related to valuation adjustments on nonpublic private equity investments. | |
(b) | On October 1, 2006, the Firm completed the exchange of selected corporate trust businesses including trustee, paying agent, loan agency and document management services for the consumer, business banking and middle-market banking businesses of The Bank of New York. The results of operations of these corporate trust businesses are being reported as discontinued operations for each of the periods presented. | |
(c) | Quarterly ratios are based upon annualized amounts. | |
(d) | Income from continuing operations and Net income applicable to common stock divided by Total average common equity (net of goodwill). The Firm uses Return on equity less goodwill, a non-GAAP financial measure, to evaluate the operating performance of the Firm. The Firm also utilizes this measure to facilitate comparisons to competitors. | |
(e) | Income from continuing operations divided by Total average assets less average Assets of discontinued operations held-for-sale. | |
(f) | Net income divided by Total average assets. | |
(g) | Includes the after-tax impact of discontinued operations, recoveries related to material litigation actions, tax audit benefits and Merger costs. See Corporate for additional details. | |
(h) | Estimated. |
Page 2
JPMORGAN CHASE & CO. STATEMENTS OF INCOME (in millions, except per share, and ratio data)
|
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||
Investment Banking Fees |
$ | 1,739 | $ | 1,565 | $ | 1,416 | $ | 1,370 | $ | 1,169 | 11 | % | 49 | % | ||||||||||||||
Principal Transactions (a) (b) |
4,471 | 2,591 | 2,737 | 2,741 | 2,709 | 73 | 65 | |||||||||||||||||||||
Lending & Deposit Related Fees |
895 | 895 | 867 | 865 | 841 | - | 6 | |||||||||||||||||||||
Asset Management, Administration and Commissions (b) |
3,186 | 3,173 | 2,842 | 2,966 | 2,874 | - | 11 | |||||||||||||||||||||
Securities Gains (Losses) |
2 | 35 | 40 | (502 | ) | (116 | ) | (94 | ) | NM | ||||||||||||||||||
Mortgage Fees and Related Income |
476 | 75 | 62 | 213 | 241 | NM | 98 | |||||||||||||||||||||
Credit Card Income |
1,563 | 1,645 | 1,567 | 1,791 | 1,910 | (5 | ) | (18 | ) | |||||||||||||||||||
Other Income |
518 | 522 | 635 | 464 | 554 | (1 | ) | (6 | ) | |||||||||||||||||||
Noninterest Revenue |
12,850 | 10,501 | 10,166 | 9,908 | 10,182 | 22 | 26 | |||||||||||||||||||||
Interest Income |
16,636 | 16,097 | 15,157 | 14,617 | 13,236 | 3 | 26 | |||||||||||||||||||||
Interest Expense |
10,518 | 10,405 | 9,778 | 9,439 | 8,243 | 1 | 28 | |||||||||||||||||||||
Net Interest Income |
6,118 | 5,692 | 5,379 | 5,178 | 4,993 | 7 | 23 | |||||||||||||||||||||
TOTAL NET REVENUE |
18,968 | 16,193 | 15,545 | 15,086 | 15,175 | 17 | 25 | |||||||||||||||||||||
Provision for Credit Losses |
1,008 | 1,134 | 812 | 493 | 831 | (11 | ) | 21 | ||||||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||
Compensation Expense |
6,234 | 4,985 | 5,390 | 5,268 | 5,548 | 25 | 12 | |||||||||||||||||||||
Occupancy Expense |
640 | 625 | 563 | 553 | 594 | 2 | 8 | |||||||||||||||||||||
Technology, Communications and Equipment Expense |
922 | 997 | 911 | 876 | 869 | (8 | ) | 6 | ||||||||||||||||||||
Professional & Outside Services (b) |
1,200 | 1,246 | 1,111 | 1,085 | 1,008 | (4 | ) | 19 | ||||||||||||||||||||
Marketing |
482 | 614 | 550 | 526 | 519 | (21 | ) | (7 | ) | |||||||||||||||||||
Other Expense (c) |
735 | 948 | 877 | 631 | 816 | (22 | ) | (10 | ) | |||||||||||||||||||
Amortization of Intangibles |
353 | 370 | 346 | 357 | 355 | (5 | ) | (1 | ) | |||||||||||||||||||
Merger Costs |
62 | 100 | 48 | 86 | 71 | (38 | ) | (13 | ) | |||||||||||||||||||
TOTAL NONINTEREST EXPENSE |
10,628 | 9,885 | 9,796 | 9,382 | 9,780 | 8 | 9 | |||||||||||||||||||||
Income from Continuing Operations before Income Tax Expense |
7,332 | 5,174 | 4,937 | 5,211 | 4,564 | 42 | 61 | |||||||||||||||||||||
Income Tax Expense |
2,545 | 1,268 | 1,705 | 1,727 | 1,537 | 101 | 66 | |||||||||||||||||||||
Income from Continuing Operations (after-tax) |
4,787 | 3,906 | 3,232 | 3,484 | 3,027 | 23 | 58 | |||||||||||||||||||||
Income from Discontinued Operations (after-tax) (d) |
- | 620 | 65 | 56 | 54 | NM | NM | |||||||||||||||||||||
NET INCOME |
$ | 4,787 | $ | 4,526 | $ | 3,297 | $ | 3,540 | $ | 3,081 | 6 | 55 | ||||||||||||||||
DILUTED EARNINGS PER SHARE |
||||||||||||||||||||||||||||
Income from Continuing Operations (after-tax) |
$ | 1.34 | $ | 1.09 | $ | 0.90 | $ | 0.98 | $ | 0.85 | 23 | 58 | ||||||||||||||||
Income from Discontinued Operations (after-tax) (d) |
- | 0.17 | 0.02 | 0.01 | 0.01 | NM | NM | |||||||||||||||||||||
Net Income |
$ | 1.34 | $ | 1.26 | $ | 0.92 | $ | 0.99 | $ | 0.86 | 6 | 56 | ||||||||||||||||
FINANCIAL RATIOS |
||||||||||||||||||||||||||||
Income from Continuing Operations: |
||||||||||||||||||||||||||||
ROE |
17 | % | 14 | % | 11 | % | 13 | % | 11 | % | ||||||||||||||||||
ROE-GW |
27 | 22 | 19 | 21 | 19 | |||||||||||||||||||||||
ROA |
1.41 | 1.14 | 0.98 | 1.05 | 0.98 | |||||||||||||||||||||||
Net Income: |
||||||||||||||||||||||||||||
ROE |
17 | 16 | 12 | 13 | 12 | |||||||||||||||||||||||
ROE-GW |
27 | 26 | 19 | 22 | 20 | |||||||||||||||||||||||
ROA |
1.41 | 1.32 | 1.00 | 1.06 | 1.00 | |||||||||||||||||||||||
Effective Income Tax Rate (e) |
35 | 25 | 35 | 33 | 34 | |||||||||||||||||||||||
Overhead Ratio |
56 | 61 | 63 | 62 | 64 | |||||||||||||||||||||||
EXCLUDING IMPACT OF MERGER COSTS (f) |
||||||||||||||||||||||||||||
Income from Continuing Operations |
$ | 4,787 | $ | 3,906 | $ | 3,232 | $ | 3,484 | $ | 3,027 | 23 | 58 | ||||||||||||||||
Less Merger Costs (after-tax) |
38 | 62 | 30 | 53 | 44 | (39 | ) | (14 | ) | |||||||||||||||||||
Income from Continuing Operations Excluding Merger Costs |
$ | 4,825 | $ | 3,968 | $ | 3,262 | $ | 3,537 | $ | 3,071 | 22 | 57 | ||||||||||||||||
Diluted Per Share: |
||||||||||||||||||||||||||||
Income from Continuing Operations |
$ | 1.34 | $ | 1.09 | $ | 0.90 | $ | 0.98 | $ | 0.85 | 23 | 58 | ||||||||||||||||
Less Merger Costs (after-tax) |
0.01 | 0.02 | 0.01 | 0.01 | 0.01 | (50 | ) | - | ||||||||||||||||||||
Income from Continuing Operations Excluding Merger Costs |
$ | 1.35 | $ | 1.11 | $ | 0.91 | $ | 0.99 | $ | 0.86 | 22 | 57 | ||||||||||||||||
(a) | As a result of the adoption on January 1, 2007, of SFAS 157, the Firm recognized a benefit, in the current quarter, of $166 million related to the incorporation of an adjustment to the valuation of the Firms derivative liabilities and other liabilities measured at fair value that reflects the credit quality of the Firm and a benefit of $464 million related to valuation adjustments on nonpublic private equity investments. | |
(b) | Certain transaction costs that were previously reported in Revenue have been reclassified to Noninterest expense. Revenue and Noninterest expense have been reclassified for all periods presented. | |
(c) | Insurance recoveries related to settlement of the Enron and WorldCom class action litigations and for certain other material legal proceedings were $137 million, $17 million, $260 million and $98 million for the quarters ended December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. | |
(d) | On October 1, 2006, the Firm completed the exchange of selected corporate trust businesses including trustee, paying agent, loan agency and document management services for the consumer, business banking and middle-market banking businesses of The Bank of New York. The results of operations of these corporate trust businesses are being reported as discontinued operations for each of the periods presented. | |
(e) | Based on Income from continuing operations. | |
(f) | Income from continuing operations 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 3
JPMORGAN CHASE & CO. CONSOLIDATED BALANCE SHEETS |
Mar 31, 2007 | ||||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||||
Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Mar 31 | ||||||||||||||||||||||
2007 | 2006 | 2006 | 2006 | 2006 | 2006 | 2006 | ||||||||||||||||||||||
ASSETS |
||||||||||||||||||||||||||||
Cash and Due from Banks |
$ | 31,836 | $ | 40,412 | $ | 36,279 | $ | 38,390 | $ | 36,903 | (21 | )% | (14 | )% | ||||||||||||||
Deposits with Banks |
30,973 | 13,547 | 17,130 | 14,437 | 10,545 | 129 | 194 | |||||||||||||||||||||
Federal Funds Sold and Securities Purchased under Resale Agreements (a) |
144,306 | 140,524 | 156,194 | 157,438 | 153,755 | 3 | (6 | ) | ||||||||||||||||||||
Securities Borrowed |
84,800 | 73,688 | 89,222 | 87,377 | 93,280 | 15 | (9 | ) | ||||||||||||||||||||
Trading Assets: |
||||||||||||||||||||||||||||
Debt and Equity Instruments |
373,684 | 310,137 | 289,891 | 295,604 | 259,275 | 20 | 44 | |||||||||||||||||||||
Derivative Receivables |
49,647 | 55,601 | 58,265 | 54,075 | 52,750 | (11 | ) | (6 | ) | |||||||||||||||||||
Securities |
97,029 | 91,975 | 86,548 | 78,022 | 67,126 | 5 | 45 | |||||||||||||||||||||
Interests in Purchased Receivables (b) |
- | - | - | - | 29,029 | NM | NM | |||||||||||||||||||||
Loans (Net of Allowance for Loan Losses) (a) |
442,465 | 475,848 | 456,488 | 448,028 | 424,806 | (7 | ) | 4 | ||||||||||||||||||||
Private Equity Investments |
6,788 | 6,359 | 5,905 | 5,974 | 6,499 | 7 | 4 | |||||||||||||||||||||
Accrued Interest and Accounts Receivable |
23,663 | 22,891 | 21,178 | 24,418 | 21,657 | 3 | 9 | |||||||||||||||||||||
Premises and Equipment |
8,728 | 8,735 | 8,553 | 8,910 | 8,985 | - | (3 | ) | ||||||||||||||||||||
Goodwill |
45,063 | 45,186 | 43,372 | 43,498 | 43,899 | - | 3 | |||||||||||||||||||||
Other Intangible Assets: |
||||||||||||||||||||||||||||
Mortgage Servicing Rights |
7,937 | 7,546 | 7,378 | 8,247 | 7,539 | 5 | 5 | |||||||||||||||||||||
Purchased Credit Card Relationships |
2,758 | 2,935 | 2,982 | 3,138 | 3,243 | (6 | ) | (15 | ) | |||||||||||||||||||
All Other Intangibles |
4,205 | 4,371 | 4,078 | 4,231 | 4,832 | (4 | ) | (13 | ) | |||||||||||||||||||
Other Assets (a) |
55,036 | 51,765 | 53,181 | 54,981 | 49,159 | 6 | 12 | |||||||||||||||||||||
Assets of discontinued operations held-for-sale (c) |
- | - | 1,385 | 1,233 | - | NM | NM | |||||||||||||||||||||
TOTAL ASSETS |
$ | 1,408,918 | $ | 1,351,520 | $ | 1,338,029 | $ | 1,328,001 | $ | 1,273,282 | 4 | 11 | ||||||||||||||||
LIABILITIES |
||||||||||||||||||||||||||||
Deposits: |
||||||||||||||||||||||||||||
U.S. Offices: |
||||||||||||||||||||||||||||
Noninterest-Bearing |
$ | 123,942 | $ | 132,781 | $ | 117,197 | $ | 127,311 | $ | 128,982 | (7 | ) | (4 | ) | ||||||||||||||
Interest-Bearing (a) |
342,368 | 337,812 | 310,401 | 312,517 | 309,779 | 1 | 11 | |||||||||||||||||||||
Non-U.S. Offices: |
||||||||||||||||||||||||||||
Noninterest-Bearing |
8,104 | 7,662 | 3,761 | 6,442 | 6,591 | 6 | 23 | |||||||||||||||||||||
Interest-Bearing (a) |
155,770 | 160,533 | 150,756 | 147,446 | 139,113 | (3 | ) | 12 | ||||||||||||||||||||
Total Deposits |
630,184 | 638,788 | 582,115 | 593,716 | 584,465 | (1 | ) | 8 | ||||||||||||||||||||
Federal Funds Purchased and Securities Sold under Repurchase Agreements (a) |
218,917 | 162,173 | 188,395 | 175,055 | 151,006 | 35 | 45 | |||||||||||||||||||||
Commercial Paper |
25,354 | 18,849 | 18,135 | 18,554 | 15,933 | 35 | 59 | |||||||||||||||||||||
Other Borrowed Funds (a) |
17,215 | 18,053 | 16,252 | 10,921 | 14,400 | (5 | ) | 20 | ||||||||||||||||||||
Trading Liabilities: |
||||||||||||||||||||||||||||
Debt and Equity Instruments |
96,606 | 90,488 | 106,784 | 105,445 | 104,160 | 7 | (7 | ) | ||||||||||||||||||||
Derivative Payables |
50,316 | 57,469 | 58,462 | 52,630 | 55,938 | (12 | ) | (10 | ) | |||||||||||||||||||
Accounts Payable, Accrued Expenses and Other Liabilities
(including the Allowance for Lending-Related Commitments) |
87,603 | 88,096 | 73,585 | 82,569 | 73,693 | (1 | ) | 19 | ||||||||||||||||||||
Beneficial Interests Issued by Consolidated VIEs (a) |
13,109 | 16,184 | 16,254 | 15,432 | 42,237 | (19 | ) | (69 | ) | |||||||||||||||||||
Long-Term Debt (a) |
139,877 | 133,421 | 126,619 | 125,280 | 112,133 | 5 | 25 | |||||||||||||||||||||
Junior Subordinated Deferrable Interest Debentures Held by Trusts that Issued
Guaranteed Capital Debt Securities |
12,033 | 12,209 | 13,309 | 10,827 | 10,980 | (1 | ) | 10 | ||||||||||||||||||||
Liabilities of discontinued operations held-for-sale (c) |
- | - | 24,558 | 26,888 | - | NM | NM | |||||||||||||||||||||
TOTAL LIABILITIES |
1,291,214 | 1,235,730 | 1,224,468 | 1,217,317 | 1,164,945 | 4 | 11 | |||||||||||||||||||||
STOCKHOLDERS EQUITY |
||||||||||||||||||||||||||||
Common Stock |
3,658 | 3,658 | 3,658 | 3,658 | 3,645 | - | - | |||||||||||||||||||||
Capital Surplus |
77,760 | 77,807 | 77,457 | 77,098 | 76,153 | - | 2 | |||||||||||||||||||||
Retained Earnings (a) (d) |
48,105 | 43,600 | 40,283 | 38,208 | 35,892 | 10 | 34 | |||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) |
(1,482 | ) | (1,557 | ) | (526 | ) | (1,218 | ) | (1,017 | ) | 5 | (46 | ) | |||||||||||||||
Treasury Stock, at Cost |
(10,337 | ) | (7,718 | ) | (7,311 | ) | (7,062 | ) | (6,336 | ) | (34 | ) | (63 | ) | ||||||||||||||
TOTAL STOCKHOLDERS EQUITY |
117,704 | 115,790 | 113,561 | 110,684 | 108,337 | 2 | 9 | |||||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |
$ | 1,408,918 | $ | 1,351,520 | $ | 1,338,029 | $ | 1,328,001 | $ | 1,273,282 | 4 | 11 | ||||||||||||||||
(a) | Includes fair value amounts related to designated assets, liabilities or commitments for which the Firm has elected the fair value option of accounting. The Firm early adopted SFAS 157 and SFAS 159 effective January 1, 2007. | |
(b) | As a result of restructuring certain multi-seller conduits the Firm administers, during the second quarter of 2006, JPMorgan Chase deconsolidated $29 billion of Interests in Purchased Receivables, $3 billion of Loans and $1 billion of Securities, and recorded $33 billion of Lending-Related Commitments. | |
(c) | On October 1, 2006, the Firm completed the exchange of selected corporate trust businesses, including trustee, paying agent, loan agency and document management services, for the consumer, business banking and middle-market banking businesses of The Bank of New York. As a result of this transaction, assets and liabilities of this business were reclassified and reported as discontinued operations for the periods ended September 30, 2006 and June 30, 2006. JPMorgan Chase did not reclassify any Assets or Liabilities of discontinued operations held-for-sale at March 31, 2006. | |
(d) | The cumulative effect of changes in accounting principles increased Retained earnings as a result of implementing SFAS 157, SFAS 159 and FIN 48 was $922 million (after-tax) in the first quarter of 2007. |
Page 4
JPMORGAN CHASE & CO. CONDENSED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
AVERAGE BALANCES |
||||||||||||||||||||||||||||
ASSETS |
||||||||||||||||||||||||||||
Deposits with Banks |
$ | 16,224 | $ | 19,736 | $ | 31,291 | $ | 39,193 | $ | 20,672 | (18 | )% | (22 | )% | ||||||||||||||
Federal Funds Sold and Securities
Purchased
under Resale Agreements (a) |
135,499 | 144,744 | 125,618 | 128,740 | 129,268 | (6 | ) | 5 | ||||||||||||||||||||
Securities Borrowed |
78,768 | 82,184 | 82,216 | 86,742 | 84,220 | (4 | ) | (6 | ) | |||||||||||||||||||
Trading Assets - Debt Instruments |
257,079 | 218,188 | 213,164 | 204,551 | 185,679 | 18 | 38 | |||||||||||||||||||||
Securities |
95,326 | 89,962 | 78,029 | 82,845 | 60,216 | 6 | 58 | |||||||||||||||||||||
Interests in Purchased Receivables
(b) |
- | - | - | 26,221 | 30,028 | NM | NM | |||||||||||||||||||||
Loans (a) |
467,453 | 484,140 | 461,673 | 442,601 | 429,043 | (3 | ) | 9 | ||||||||||||||||||||
Total Interest-Earning Assets |
1,050,349 | 1,038,954 | 991,991 | 1,010,893 | 939,126 | 1 | 12 | |||||||||||||||||||||
Trading Assets - Equity Instruments |
88,791 | 81,985 | 75,366 | 70,045 | 70,762 | 8 | 25 | |||||||||||||||||||||
Goodwill |
37,341 | 37,868 | 35,338 | 35,586 | 36,759 | (1 | ) | 2 | ||||||||||||||||||||
Other Intangible Assets: |
||||||||||||||||||||||||||||
Mortgage Servicing Rights |
7,784 | 7,295 | 8,048 | 7,937 | 6,642 | 7 | 17 | |||||||||||||||||||||
All Other Intangible Assets |
14,923 | 14,773 | 15,250 | 15,456 | 14,127 | 1 | 6 | |||||||||||||||||||||
All Other Noninterest-Earning
Assets (a) |
179,727 | 181,732 | 159,482 | 170,919 | 161,517 | (1 | ) | 11 | ||||||||||||||||||||
Assets of discontinued operations
held-for-sale (c) |
- | - | 23,664 | 23,033 | 19,424 | NM | NM | |||||||||||||||||||||
TOTAL ASSETS |
$ | 1,378,915 | $ | 1,362,607 | $ | 1,309,139 | $ | 1,333,869 | $ | 1,248,357 | 1 | 10 | ||||||||||||||||
LIABILITIES |
||||||||||||||||||||||||||||
Interest-Bearing Deposits (a) |
$ | 498,717 | $ | 487,368 | $ | 451,509 | $ | 449,782 | $ | 419,903 | 2 | 19 | ||||||||||||||||
Federal Funds Purchased and
Securities Sold
under Repurchase Agreements |
199,252 | 198,166 | 192,674 | 184,943 | 158,818 | 1 | 25 | |||||||||||||||||||||
Commercial Paper |
22,339 | 18,787 | 19,207 | 17,484 | 15,310 | 19 | 46 | |||||||||||||||||||||
Other Borrowings (a) (d) |
95,664 | 96,499 | 101,366 | 103,150 | 107,702 | (1 | ) | (11 | ) | |||||||||||||||||||
Beneficial Interests Issued by Consolidated VIEs (a) |
15,993 | 15,769 | 13,630 | 43,470 | 42,192 | 1 | (62 | ) | ||||||||||||||||||||
Long-Term Debt (a) |
148,146 | 140,515 | 133,279 | 125,723 | 118,875 | 5 | 25 | |||||||||||||||||||||
Total Interest-Bearing Liabilities |
980,111 | 957,104 | 911,665 | 924,552 | 862,800 | 2 | 14 | |||||||||||||||||||||
Noninterest-Bearing Liabilities |
282,559 | 290,741 | 262,843 | 278,229 | 259,936 | (3 | ) | 9 | ||||||||||||||||||||
Liabilities of discontinued
operations held-for-sale (c) |
- | - | 22,825 | 22,131 | 18,317 | NM | NM | |||||||||||||||||||||
TOTAL LIABILITIES |
1,262,670 | 1,247,845 | 1,197,333 | 1,224,912 | 1,141,053 | 1 | 11 | |||||||||||||||||||||
Preferred Stock |
- | - | - | - | 137 | NM | NM | |||||||||||||||||||||
Common Stockholders Equity (a) |
116,245 | 114,762 | 111,806 | 108,957 | 107,167 | 1 | 8 | |||||||||||||||||||||
TOTAL STOCKHOLDERS EQUITY |
116,245 | 114,762 | 111,806 | 108,957 | 107,304 | 1 | 8 | |||||||||||||||||||||
TOTAL LIABILITIES, PREFERRED STOCK
AND STOCKHOLDERS EQUITY |
$ | 1,378,915 | $ | 1,362,607 | $ | 1,309,139 | $ | 1,333,869 | $ | 1,248,357 | 1 | 10 | ||||||||||||||||
AVERAGE RATES |
||||||||||||||||||||||||||||
INTEREST-EARNING ASSETS |
||||||||||||||||||||||||||||
Deposits with Banks |
4.65 | % | 5.18 | % | 4.46 | % | 4.43 | % | 4.31 | % | ||||||||||||||||||
Federal Funds Sold and Securities
Purchased
under Resale Agreements |
4.95 | 4.71 | 4.55 | 3.81 | 3.74 | |||||||||||||||||||||||
Securities Borrowed |
5.42 | 4.56 | 4.28 | 3.89 | 3.51 | |||||||||||||||||||||||
Trading Assets - Debt Instruments |
5.99 | 5.45 | 5.28 | 5.33 | 5.61 | |||||||||||||||||||||||
Securities |
5.68 | 5.57 | 5.70 | 5.45 | 5.34 | |||||||||||||||||||||||
Interests in Purchased Receivables |
NM | NM | NM | 4.92 | 4.47 | |||||||||||||||||||||||
Loans |
7.53 | 7.35 | 7.37 | 7.25 | 7.06 | |||||||||||||||||||||||
Total Interest-Earning Assets |
6.45 | 6.17 | 6.08 | 5.82 | 5.75 | |||||||||||||||||||||||
INTEREST-BEARING LIABILITIES |
||||||||||||||||||||||||||||
Interest-Bearing Deposits |
4.06 | 3.99 | 3.93 | 3.67 | 3.43 | |||||||||||||||||||||||
Federal Funds Purchased and
Securities Sold
under Repurchase Agreements |
5.09 | 4.86 | 4.63 | 4.30 | 3.90 | |||||||||||||||||||||||
Commercial Paper |
4.89 | 4.76 | 4.78 | 4.31 | 3.97 | |||||||||||||||||||||||
Other Borrowings (d) |
5.07 | 4.75 | 5.13 | 4.93 | 5.16 | |||||||||||||||||||||||
Beneficial
Interests Issued by Consolidated VIEs |
3.82 | 3.96 | 4.16 | 4.86 | 3.92 | |||||||||||||||||||||||
Long-Term Debt |
3.85 | 4.34 | 4.08 | 4.34 | 4.21 | |||||||||||||||||||||||
Total Interest-Bearing Liabilities |
4.35 | 4.31 | 4.26 | 4.09 | 3.87 | |||||||||||||||||||||||
INTEREST RATE SPREAD |
2.10 | % | 1.86 | % | 1.82 | % | 1.73 | % | 1.88 | % | ||||||||||||||||||
NET YIELD ON INTEREST-EARNING
ASSETS |
2.39 | % | 2.19 | % | 2.17 | % | 2.07 | % | 2.19 | % | ||||||||||||||||||
NET YIELD ON INTEREST-EARNING ASSETS
ADJUSTED FOR SECURITIZATIONS |
2.73 | % | 2.54 | % | 2.54 | % | 2.50 | % | 2.67 | % | ||||||||||||||||||
(a) | Includes fair value amounts related to designated assets, liabilities or commitments for which the Firm has elected the fair value option of accounting. The Firm early adopted SFAS 157 and SFAS 159 effective January 1, 2007. | |
(b) | As a result of restructuring certain multi-seller conduits the Firm administers, during the second quarter of 2006, JPMorgan Chase deconsolidated $29 billion of Interests in Purchased Receivables, $3 billion of Loans and $1 billion of Securities, and recorded $33 billion of Lending-Related Commitments. | |
(c) | As a result of the transaction with The Bank of New York, for purposes of the consolidated average balance sheet for assets and liabilities transferred to discontinued operations, JPMorgan Chase used Federal funds sold interest income as a reasonable estimate of the earnings on corporate trust deposits for the periods prior to the close of the transaction; therefore, JPMorgan Chase transferred to Assets of discontinued operations held-for-sale average Federal funds sold, along with the related interest income earned, and transferred to Liabilities of discontinued operations held-for-sale average corporate trust deposits. | |
(d) | Includes securities sold but not yet purchased. |
Page 5
JPMORGAN CHASE & CO. RECONCILIATION FROM REPORTED TO MANAGED SUMMARY |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
CREDIT CARD INCOME |
||||||||||||||||||||||||||||
Credit Card Income - Reported |
$ | 1,563 | $ | 1,645 | $ | 1,567 | $ | 1,791 | $ | 1,910 | (5 | )% | (18 | )% | ||||||||||||||
Impact of: |
||||||||||||||||||||||||||||
Credit Card Securitizations |
(746 | ) | (726 | ) | (721 | ) | (937 | ) | (1,125 | ) | (3 | ) | 34 | |||||||||||||||
Credit Card Income - Managed |
$ | 817 | $ | 919 | $ | 846 | $ | 854 | $ | 785 | (11 | ) | 4 | |||||||||||||||
OTHER INCOME |
||||||||||||||||||||||||||||
Other Income - Reported |
$ | 518 | $ | 522 | $ | 635 | $ | 464 | $ | 554 | (1 | ) | (6 | ) | ||||||||||||||
Impact of: |
||||||||||||||||||||||||||||
Tax-Equivalent Adjustments |
110 | 195 | 165 | 170 | 146 | (44 | ) | (25 | ) | |||||||||||||||||||
Other Income - Managed |
$ | 628 | $ | 717 | $ | 800 | $ | 634 | $ | 700 | (12 | ) | (10 | ) | ||||||||||||||
TOTAL NONINTEREST
REVENUE |
||||||||||||||||||||||||||||
Total Noninterest Revenue -
Reported |
$ | 12,850 | $ | 10,501 | $ | 10,166 | $ | 9,908 | $ | 10,182 | 22 | 26 | ||||||||||||||||
Impact of: |
||||||||||||||||||||||||||||
Credit Card Securitizations |
(746 | ) | (726 | ) | (721 | ) | (937 | ) | (1,125 | ) | (3 | ) | 34 | |||||||||||||||
Tax-Equivalent Adjustments |
110 | 195 | 165 | 170 | 146 | (44 | ) | (25 | ) | |||||||||||||||||||
Total Noninterest Revenue -
Managed |
$ | 12,214 | $ | 9,970 | $ | 9,610 | $ | 9,141 | $ | 9,203 | 23 | 33 | ||||||||||||||||
NET INTEREST INCOME |
||||||||||||||||||||||||||||
Net Interest Income - Reported |
$ | 6,118 | $ | 5,692 | $ | 5,379 | $ | 5,178 | $ | 4,993 | 7 | 23 | ||||||||||||||||
Impact of: |
||||||||||||||||||||||||||||
Credit Card Securitizations |
1,339 | 1,319 | 1,328 | 1,498 | 1,574 | 2 | (15 | ) | ||||||||||||||||||||
Tax-Equivalent Adjustments |
70 | 53 | 57 | 47 | 71 | 32 | (1 | ) | ||||||||||||||||||||
Net Interest Income - Managed |
$ | 7,527 | $ | 7,064 | $ | 6,764 | $ | 6,723 | $ | 6,638 | 7 | 13 | ||||||||||||||||
TOTAL NET REVENUE |
||||||||||||||||||||||||||||
Total Net Revenue - Reported |
$ | 18,968 | $ | 16,193 | $ | 15,545 | $ | 15,086 | $ | 15,175 | 17 | 25 | ||||||||||||||||
Impact of: |
||||||||||||||||||||||||||||
Credit Card Securitizations |
593 | 593 | 607 | 561 | 449 | - | 32 | |||||||||||||||||||||
Tax-Equivalent Adjustments |
180 | 248 | 222 | 217 | 217 | (27 | ) | (17 | ) | |||||||||||||||||||
Total Net Revenue - Managed |
$ | 19,741 | $ | 17,034 | $ | 16,374 | $ | 15,864 | $ | 15,841 | 16 | 25 | ||||||||||||||||
PROVISION FOR CREDIT
LOSSES |
||||||||||||||||||||||||||||
Provision for Credit Losses -
Reported |
$ | 1,008 | $ | 1,134 | $ | 812 | $ | 493 | $ | 831 | (11 | ) | 21 | |||||||||||||||
Impact of: |
||||||||||||||||||||||||||||
Credit Card Securitizations |
593 | 593 | 607 | 561 | 449 | - | 32 | |||||||||||||||||||||
Provision for Credit Losses -
Managed |
$ | 1,601 | $ | 1,727 | $ | 1,419 | $ | 1,054 | $ | 1,280 | (7 | ) | 25 | |||||||||||||||
INCOME TAX EXPENSE |
||||||||||||||||||||||||||||
Income Tax Expense - Reported |
$ | 2,545 | $ | 1,268 | $ | 1,705 | $ | 1,727 | $ | 1,537 | 101 | 66 | ||||||||||||||||
Impact of: |
||||||||||||||||||||||||||||
Tax-Equivalent Adjustments |
180 | 248 | 222 | 217 | 217 | (27 | ) | (17 | ) | |||||||||||||||||||
Income Tax Expense - Managed |
$ | 2,725 | $ | 1,516 | $ | 1,927 | $ | 1,944 | $ | 1,754 | 80 | 55 | ||||||||||||||||
Page 6
JPMORGAN CHASE & CO. LINE OF BUSINESS FINANCIAL HIGHLIGHTS - MANAGED BASIS |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
TOTAL NET REVENUE (FTE) |
||||||||||||||||||||||||||||
Investment Bank |
$ | 6,254 | $ | 4,860 | $ | 4,816 | $ | 4,329 | $ | 4,828 | 29 | % | 30 | % | ||||||||||||||
Retail Financial Services |
4,106 | 3,728 | 3,555 | 3,779 | 3,763 | 10 | 9 | |||||||||||||||||||||
Card Services |
3,680 | 3,750 | 3,646 | 3,664 | 3,685 | (2 | ) | - | ||||||||||||||||||||
Commercial Banking |
1,003 | 1,018 | 933 | 949 | 900 | (1 | ) | 11 | ||||||||||||||||||||
Treasury & Securities Services |
1,526 | 1,537 | 1,499 | 1,588 | 1,485 | (1 | ) | 3 | ||||||||||||||||||||
Asset Management |
1,904 | 1,947 | 1,636 | 1,620 | 1,584 | (2 | ) | 20 | ||||||||||||||||||||
Corporate |
1,268 | 194 | 289 | (65 | ) | (404 | ) | NM | NM | |||||||||||||||||||
TOTAL NET REVENUE |
$ | 19,741 | $ | 17,034 | $ | 16,374 | $ | 15,864 | $ | 15,841 | 16 | 25 | ||||||||||||||||
NET INCOME (LOSS) |
||||||||||||||||||||||||||||
Investment Bank |
$ | 1,540 | $ | 1,009 | $ | 976 | $ | 839 | $ | 850 | 53 | 81 | ||||||||||||||||
Retail Financial Services |
859 | 718 | 746 | 868 | 881 | 20 | (2 | ) | ||||||||||||||||||||
Card Services |
765 | 719 | 711 | 875 | 901 | 6 | (15 | ) | ||||||||||||||||||||
Commercial Banking |
304 | 256 | 231 | 283 | 240 | 19 | 27 | |||||||||||||||||||||
Treasury & Securities Services |
263 | 256 | 256 | 316 | 262 | 3 | - | |||||||||||||||||||||
Asset Management |
425 | 407 | 346 | 343 | 313 | 4 | 36 | |||||||||||||||||||||
Corporate (a) |
631 | 1,161 | 31 | 16 | (366 | ) | (46 | ) | NM | |||||||||||||||||||
TOTAL NET INCOME (b) |
$ | 4,787 | $ | 4,526 | $ | 3,297 | $ | 3,540 | $ | 3,081 | 6 | 55 | ||||||||||||||||
AVERAGE EQUITY (c) |
||||||||||||||||||||||||||||
Investment Bank |
$ | 21,000 | $ | 21,000 | $ | 21,000 | $ | 21,000 | $ | 20,000 | - | 5 | ||||||||||||||||
Retail Financial Services |
16,000 | 16,000 | 14,300 | 14,300 | 13,896 | - | 15 | |||||||||||||||||||||
Card Services |
14,100 | 14,100 | 14,100 | 14,100 | 14,100 | - | - | |||||||||||||||||||||
Commercial Banking |
6,300 | 6,300 | 5,500 | 5,500 | 5,500 | - | 15 | |||||||||||||||||||||
Treasury & Securities Services |
3,000 | 2,200 | 2,200 | 2,200 | 2,545 | 36 | 18 | |||||||||||||||||||||
Asset Management |
3,750 | 3,500 | 3,500 | 3,500 | 3,500 | 7 | 7 | |||||||||||||||||||||
Corporate |
52,095 | 51,662 | 51,206 | 48,357 | 47,626 | 1 | 9 | |||||||||||||||||||||
TOTAL AVERAGE EQUITY |
$ | 116,245 | $ | 114,762 | $ | 111,806 | $ | 108,957 | $ | 107,167 | 1 | 8 | ||||||||||||||||
RETURN ON EQUITY (c) |
||||||||||||||||||||||||||||
Investment Bank |
30 | % | 19 | % | 18 | % | 16 | % | 17 | % | ||||||||||||||||||
Retail Financial Services |
22 | 18 | 21 | 24 | 26 | |||||||||||||||||||||||
Card Services |
22 | 20 | 20 | 25 | 26 | |||||||||||||||||||||||
Commercial Banking |
20 | 16 | 17 | 21 | 18 | |||||||||||||||||||||||
Treasury & Securities Services |
36 | 46 | 46 | 58 | 42 | |||||||||||||||||||||||
Asset Management |
46 | 46 | 39 | 39 | 36 |
(a) | Includes the after-tax impact of discontinued operations, insurance recoveries related to material litigation actions, tax audit benefits and Merger costs. See Corporate for additional details. | |
(b) | Net income includes Income from discontinued operations (after-tax) of $620 million, $65 million, $56 million and $54 million for the quarters ended December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. There was no Income from discontinued operations in the first quarter of 2007. | |
(c) | Each business segment is allocated capital by taking into consideration stand-alone peer comparisons, economic risk measures and regulatory capital requirements. The amount of capital assigned to each business is referred to as equity. Effective January 1, 2006, the Firm refined its methodology to allocate capital to the business segments to include any goodwill associated with line of business-directed acquisitions since the Merger. |
Page 7
JPMORGAN CHASE & CO. INVESTMENT BANK |
||
FINANCIAL HIGHLIGHTS (in millions, except ratio data) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
INCOME STATEMENT |
||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||
Investment Banking Fees |
$ | 1,729 | $ | 1,580 | $ | 1,419 | $ | 1,368 | $ | 1,170 | 9 | % | 48 | % | ||||||||||||||
Principal Transactions (a) (b) |
3,126 | 2,327 | 2,548 | 2,157 | 2,480 | 34 | 26 | |||||||||||||||||||||
Lending & Deposit Related Fees |
93 | 119 | 127 | 134 | 137 | (22 | ) | (32 | ) | |||||||||||||||||||
Asset Management, Administration and Commissions (b) |
641 | 569 | 512 | 583 | 576 | 13 | 11 | |||||||||||||||||||||
All Other Income |
42 | 91 | 159 | 3 | 275 | (54 | ) | (85 | ) | |||||||||||||||||||
Noninterest Revenue |
5,631 | 4,686 | 4,765 | 4,245 | 4,638 | 20 | 21 | |||||||||||||||||||||
Net Interest Income |
623 | (f) | 174 | 51 | 84 | 190 | 258 | 228 | ||||||||||||||||||||
TOTAL NET REVENUE (c) |
6,254 | 4,860 | 4,816 | 4,329 | 4,828 | 29 | 30 | |||||||||||||||||||||
Provision for Credit Losses |
63 | 63 | 7 | (62 | ) | 183 | - | (66 | ) | |||||||||||||||||||
Credit Reimbursement from TSS (d) |
30 | 31 | 30 | 30 | 30 | (3 | ) | - | ||||||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||
Compensation Expense |
2,637 | 1,880 | 2,093 | 1,961 | 2,256 | 40 | 17 | |||||||||||||||||||||
Noncompensation Expense (b) |
1,194 | 1,325 | 1,151 | 1,130 | 1,064 | (10 | ) | 12 | ||||||||||||||||||||
TOTAL NONINTEREST EXPENSE |
3,831 | 3,205 | 3,244 | 3,091 | 3,320 | 20 | 15 | |||||||||||||||||||||
Income Before Income Tax Expense |
2,390 | 1,623 | 1,595 | 1,330 | 1,355 | 47 | 76 | |||||||||||||||||||||
Income Tax Expense |
850 | 614 | 619 | 491 | 505 | 38 | 68 | |||||||||||||||||||||
NET INCOME |
$ | 1,540 | $ | 1,009 | $ | 976 | $ | 839 | $ | 850 | 53 | 81 | ||||||||||||||||
FINANCIAL RATIOS |
||||||||||||||||||||||||||||
ROE |
30 | % | 19 | % | 18 | % | 16 | % | 17 | % | ||||||||||||||||||
ROA |
0.95 | 0.62 | 0.62 | 0.50 | 0.53 | |||||||||||||||||||||||
Overhead Ratio |
61 | 66 | 67 | 71 | 69 | |||||||||||||||||||||||
Compensation Expense as a % of Total Net Revenue (e) |
42 | 38 | 42 | 44 | 41 | |||||||||||||||||||||||
REVENUE BY BUSINESS |
||||||||||||||||||||||||||||
Investment Banking Fees: |
||||||||||||||||||||||||||||
Advisory |
$ | 472 | $ | 482 | $ | 436 | $ | 352 | $ | 389 | (2 | ) | 21 | |||||||||||||||
Equity Underwriting |
393 | 327 | 275 | 364 | 212 | 20 | 85 | |||||||||||||||||||||
Debt Underwriting |
864 | 771 | 708 | 652 | 569 | 12 | 52 | |||||||||||||||||||||
Total Investment Banking Fees |
1,729 | 1,580 | 1,419 | 1,368 | 1,170 | 9 | 48 | |||||||||||||||||||||
Fixed Income Markets |
2,592 | 2,061 | 2,468 | 2,131 | 2,076 | 26 | 25 | |||||||||||||||||||||
Equity Markets |
1,539 | 958 | 658 | 580 | 1,262 | 61 | 22 | |||||||||||||||||||||
Credit Portfolio |
394 | 261 | 271 | 250 | 320 | 51 | 23 | |||||||||||||||||||||
Total Net Revenue |
$ | 6,254 | $ | 4,860 | $ | 4,816 | $ | 4,329 | $ | 4,828 | 29 | 30 | ||||||||||||||||
REVENUE BY REGION |
||||||||||||||||||||||||||||
Americas |
$ | 3,366 | $ | 2,535 | $ | 2,803 | $ | 2,110 | $ | 2,153 | 33 | 56 | ||||||||||||||||
Europe/Middle East/Africa |
2,251 | 1,886 | 1,714 | 1,796 | 2,025 | 19 | 11 | |||||||||||||||||||||
Asia/Pacific |
637 | 439 | 299 | 423 | 650 | 45 | (2 | ) | ||||||||||||||||||||
Total Net Revenue |
$ | 6,254 | $ | 4,860 | $ | 4,816 | $ | 4,329 | $ | 4,828 | 29 | 30 | ||||||||||||||||
(a) | As a result of the adoption on January 1, 2007, of SFAS 157, the IB recognized a benefit, in the current quarter, of $166 million in Net revenue (primarily in Credit Portfolio, but with smaller impacts to Equity Markets and Fixed Income Markets) relating to the incorporation of an adjustment to the valuation of the Firms derivative liabilities and other liabilities measured at fair value that reflects the credit quality of the Firm. | |
(b) | Certain transaction costs, previously reported within Revenue, have been reclassified to Noninterest expense. Revenue and Noninterest expense have been reclassified for all periods presented. | |
(c) | Total net revenue includes tax-equivalent adjustments, primarily due to tax-exempt income from municipal bond investments and income tax credits related to affordable housing investments, of $152 million, $218 million, $197 million, $193 million and $194 million for the quarters ended March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006. | |
(d) | Treasury & Securities Services (TSS) is charged a credit reimbursement related to certain exposures managed within the Investment Bank (IB) credit portfolio on behalf of clients shared with TSS. | |
(e) | For the quarters ended December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, the Compensation expense to Total net revenue ratio is adjusted to present this ratio as if SFAS 123R had always been in effect. IB management believes that adjusting the Compensation expense to Total net revenue ratio for the incremental impact of adopting SFAS 123R provides a more meaningful measure of IBs Compensation expense to Total net revenue ratio for 2006. | |
(f) | Net Interest Income for the quarter ended March 31, 2007 increased from the prior quarter primarily due to the adoption of SFAS 159. For certain IB structured notes elected, all components of earnings are reported in Principal Transactions, this caused a shift between Principal Transactions and Net Interest Income in the current quarter. |
Page 8
JPMORGAN CHASE & CO. INVESTMENT BANK |
||
FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except headcount, ratio and rankings data) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
SELECTED BALANCE SHEETS DATA (Average) |
||||||||||||||||||||||||||||
Total Assets |
$ | 658,724 | $ | 645,993 | $ | 626,245 | $ | 672,056 | $ | 646,220 | 2 | % | 2 | % | ||||||||||||||
Trading Assets - Debt and Equity Instruments |
335,118 | 295,317 | 283,915 | 268,091 | 252,415 | 13 | 33 | |||||||||||||||||||||
Trading Assets - Derivative Receivables |
56,398 | 59,802 | 53,184 | 55,692 | 49,388 | (6 | ) | 14 | ||||||||||||||||||||
Loans: |
||||||||||||||||||||||||||||
Loans Retained (a) |
59,873 | 60,947 | 61,623 | 59,026 | 53,678 | (2 | ) | 12 | ||||||||||||||||||||
Loans Held-for-Sale (b) |
12,784 | 23,743 | 24,030 | 19,920 | 19,212 | (46 | ) | (33 | ) | |||||||||||||||||||
Total Loans |
72,657 | 84,690 | 85,653 | 78,946 | 72,890 | (14 | ) | - | ||||||||||||||||||||
Adjusted Assets (c) |
572,017 | 548,628 | 539,278 | 530,057 | 492,304 | 4 | 16 | |||||||||||||||||||||
Equity |
21,000 | 21,000 | 21,000 | 21,000 | 20,000 | - | 5 | |||||||||||||||||||||
Headcount |
23,892 | 23,729 | 23,447 | 22,914 | 21,705 | 1 | 10 | |||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS |
||||||||||||||||||||||||||||
Net Charge-offs (Recoveries) |
$ | (6 | ) | $ | 10 | $ | (8 | ) | $ | (12 | ) | $ | (21 | ) | NM | 71 | ||||||||||||
Nonperforming Assets: |
||||||||||||||||||||||||||||
- Nonperforming Loans (d) |
92 | 231 | 420 | 488 | 434 | (60 | ) | (79 | ) | |||||||||||||||||||
- Other Nonperforming Assets |
36 | 38 | 36 | 37 | 50 | (5 | ) | (28 | ) | |||||||||||||||||||
Allowance for Loan Losses |
1,037 | 1,052 | 1,010 | 1,038 | 1,117 | (1 | ) | (7 | ) | |||||||||||||||||||
Allowance for Lending-Related Commitments |
310 | 305 | 292 | 249 | 220 | 2 | 41 | |||||||||||||||||||||
Net Charge-off (Recovery) Rate (a) (b) |
(0.04 | )% | 0.07 | % | (0.05 | )% | (0.08 | )% | (0.16 | )% | ||||||||||||||||||
Allowance for Loan Losses to Average Loans
(a) (b) |
1.76 | 1.73 | 1.64 | 1.76 | 2.08 | |||||||||||||||||||||||
Allowance for Loan Losses to Nonperforming
Loans (d) |
1,178 | 461 | 253 | 248 | 305 | |||||||||||||||||||||||
Nonperforming Loans to Average Loans |
0.13 | 0.27 | 0.49 | 0.62 | 0.60 | |||||||||||||||||||||||
MARKET RISK - AVERAGE TRADING AND
CREDIT PORTFOLIO VAR |
||||||||||||||||||||||||||||
Trading Activities: |
||||||||||||||||||||||||||||
Fixed Income |
$ | 45 | $ | 51 | $ | 63 | $ | 52 | $ | 60 | (12 | ) | (25 | ) | ||||||||||||||
Foreign Exchange |
19 | 20 | 24 | 25 | 20 | (5 | ) | (5 | ) | |||||||||||||||||||
Equities |
42 | 35 | 32 | 24 | 32 | 20 | 31 | |||||||||||||||||||||
Commodities and Other |
34 | 35 | 46 | 52 | 47 | (3 | ) | (28 | ) | |||||||||||||||||||
Diversification (e) |
(58 | ) | (58 | ) | (82 | ) | (74 | ) | (68 | ) | - | 15 | ||||||||||||||||
Total Trading VAR |
82 | 83 | 83 | 79 | 91 | (1 | ) | (10 | ) | |||||||||||||||||||
Credit Portfolio VAR (f) |
13 | 15 | 14 | 14 | 14 | (13 | ) | (7 | ) | |||||||||||||||||||
Diversification (e) |
(12 | ) | (11 | ) | (8 | ) | (9 | ) | (11 | ) | (9 | ) | (9 | ) | ||||||||||||||
Total Trading and Credit Portfolio VAR |
$ | 83 | $ | 87 | $ | 89 | $ | 84 | $ | 94 | (5 | ) | (12 | ) | ||||||||||||||
March 31, 2007 YTD | Full Year 2006 | |||||||||||||||
MARKET SHARES AND RANKINGS (g) | Market Share | Rankings | Market Share | Rankings | ||||||||||||
Global Debt, Equity and Equity-Related |
8 | % | # 2 | 7 | % | # 2 | ||||||||||
Global Syndicated Loans |
15 | % | # 1 | 14 | % | # 1 | ||||||||||
Global Long-Term Debt |
8 | % | # 2 | 6 | % | # 3 | ||||||||||
Global Equity and Equity-Related |
13 | % | # 1 | 7 | % | # 6 | ||||||||||
Global Announced M&A |
23 | % | # 2 | 22 | % | # 4 | ||||||||||
U.S. Debt, Equity and Equity-Related |
11 | % | # 2 | 9 | % | # 3 | ||||||||||
U.S. Syndicated Loans |
27 | % | # 1 | 26 | % | # 1 | ||||||||||
U.S. Long-Term Debt |
12 | % | # 2 | 12 | % | # 2 | ||||||||||
U.S. Equity and Equity-Related |
19 | % | # 1 | 8 | % | # 6 | ||||||||||
U.S. Announced M&A |
39 | % | # 2 | 28 | % | # 4 |
(a) | Loans retained include credit portfolio, conduit loans, leveraged leases, bridge loans for underwriting, other accrual loans and certain loans carried at fair value. Average loans carried at fair value were $900 million for the quarter ended March 31, 2007. This amount is excluded from Total loans for the allowance coverage ratio and Net charge-off rate. | |
(b) | Loans held-for-sale (which include loan syndications and warehouse loans held as part of the IBs mortgage-backed, asset-backed and other securitization businesses) are excluded from the allowance coverage ratio and Net charge-off rate. Loans held-for-sale for the quarter ended March 31, 2007 reflect the impact of reclassifying approximately $12.0 billion of Loans held-for-sale to Trading assets as a result of the adoption of SFAS 159 effective January 1, 2007. | |
(c) | 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) consolidated under FIN 46R; (3) cash and securities segregated and on deposit for regulatory and other purposes; and (4) goodwill and intangibles. The amount of adjusted assets is presented to assist the reader in comparing the 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. The IB believes an adjusted asset amount that excludes the assets discussed above, which are considered to have a low risk profile, provides a more meaningful measure of balance sheet leverage in the securities industry. | |
(d) | Nonperforming loans include Loans held-for-sale of $4 million, $3 million, $21 million, $70 million and $68 million at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively, which are excluded from the allowance coverage ratios. Nonperforming loans exclude distressed HFS loans purchased as part of IBs proprietary activities (beginning January 1, 2007, fair value accounting was elected for this portfolio). | |
(e) | Average VARs are less than the sum of the VARs of its market risk components, which is due to risk offsets resulting from portfolio diversification. The diversification effect reflects the fact that the risks are not perfectly correlated. The risk of a portfolio of positions is therefore usually less than the sum of the risks of the positions themselves. | |
(f) | Includes VAR on derivative credit and debt valuation adjustments, hedges of the credit valuation adjustment and mark-to-market hedges of the retained loan portfolio, which are all reported in Principal Transactions. This VAR does not include the retained loan portfolio, which is not marked to market. | |
(g) | Source: Thomson Financial Securities data. Global announced M&A is based on rank value; all other rankings are based upon 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%. |
Page 9
JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS
(in millions, except ratio and headcount data) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
INCOME STATEMENT |
||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||
Lending & Deposit Related Fees |
$ | 423 | $ | 430 | $ | 406 | $ | 390 | $ | 371 | (2 | )% | 14 | % | ||||||||||||||
Asset Management, Administration and
Commissions |
263 | 293 | 326 | 366 | 437 | (10 | ) | (40 | ) | |||||||||||||||||||
Securities Gains (Losses) |
- | (5 | ) | (7 | ) | (39 | ) | (6 | ) | NM | NM | |||||||||||||||||
Mortgage Fees and Related Income (a) |
482 | 111 | 67 | 204 | 236 | 334 | 104 | |||||||||||||||||||||
Credit Card Income |
142 | 143 | 136 | 129 | 115 | (1 | ) | 23 | ||||||||||||||||||||
All Other Income |
179 | 176 | 170 | 163 | 48 | 2 | 273 | |||||||||||||||||||||
Noninterest Revenue |
1,489 | 1,148 | 1,098 | 1,213 | 1,201 | 30 | 24 | |||||||||||||||||||||
Net Interest Income |
2,617 | 2,580 | 2,457 | 2,566 | 2,562 | 1 | 2 | |||||||||||||||||||||
TOTAL NET REVENUE |
4,106 | 3,728 | 3,555 | 3,779 | 3,763 | 10 | 9 | |||||||||||||||||||||
Provision for Credit Losses |
292 | 262 | 114 | 100 | 85 | 11 | 244 | |||||||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||
Compensation Expense (a) |
1,065 | 950 | 886 | 901 | 920 | 12 | 16 | |||||||||||||||||||||
Noncompensation Expense (a) |
1,224 | 1,211 | 1,142 | 1,246 | 1,207 | 1 | 1 | |||||||||||||||||||||
Amortization of Intangibles |
118 | 130 | 111 | 112 | 111 | (9 | ) | 6 | ||||||||||||||||||||
TOTAL NONINTEREST EXPENSE |
2,407 | 2,291 | 2,139 | 2,259 | 2,238 | 5 | 8 | |||||||||||||||||||||
Income Before Income Tax Expense |
1,407 | 1,175 | 1,302 | 1,420 | 1,440 | 20 | (2 | ) | ||||||||||||||||||||
Income Tax Expense |
548 | 457 | 556 | 552 | 559 | 20 | (2 | ) | ||||||||||||||||||||
NET INCOME |
$ | 859 | $ | 718 | $ | 746 | $ | 868 | $ | 881 | 20 | (2 | ) | |||||||||||||||
FINANCIAL RATIOS |
||||||||||||||||||||||||||||
ROE |
22 | % | 18 | % | 21 | % | 24 | % | 26 | % | ||||||||||||||||||
Overhead Ratio |
59 | 61 | 60 | 60 | 59 | |||||||||||||||||||||||
Overhead Ratio Excluding Core Deposit
Intangibles (b) |
56 | 58 | 57 | 57 | 57 | |||||||||||||||||||||||
SELECTED BALANCE SHEETS (Ending) |
||||||||||||||||||||||||||||
Assets |
$ | 212,997 | $ | 237,887 | $ | 227,056 | $ | 233,748 | $ | 235,127 | (10 | ) | (9 | ) | ||||||||||||||
Loans, including Trading Loans (c) (d) |
188,468 | 213,504 | 205,554 | 203,928 | 202,591 | (12 | ) | (7 | ) | |||||||||||||||||||
Deposits |
221,840 | 214,081 | 198,260 | 198,273 | 200,154 | 4 | 11 | |||||||||||||||||||||
SELECTED BALANCE SHEETS
(Average) |
||||||||||||||||||||||||||||
Assets |
$ | 217,135 | $ | 235,301 | $ | 225,307 | $ | 234,097 | $ | 231,587 | (8 | ) | (6 | ) | ||||||||||||||
Loans, including Trading Loans (e) (f) |
190,979 | 211,654 | 203,307 | 201,635 | 198,797 | (10 | ) | (4 | ) | |||||||||||||||||||
Deposits |
216,933 | 211,915 | 198,967 | 199,075 | 194,382 | 2 | 12 | |||||||||||||||||||||
Equity |
16,000 | 16,000 | 14,300 | 14,300 | 13,896 | - | 15 | |||||||||||||||||||||
Headcount |
67,247 | 65,570 | 61,915 | 62,450 | 62,472 | 3 | 8 | |||||||||||||||||||||
CREDIT DATA AND QUALITY
STATISTICS |
||||||||||||||||||||||||||||
Net Charge-offs |
$ | 185 | $ | 214 | $ | 128 | $ | 113 | $ | 121 | (14 | ) | 53 | |||||||||||||||
Nonperforming Loans (g) |
1,655 | 1,677 | 1,404 | 1,339 | 1,349 | (1 | ) | 23 | ||||||||||||||||||||
Nonperforming Assets |
1,910 | 1,902 | 1,595 | 1,520 | 1,537 | - | 24 | |||||||||||||||||||||
Allowance for Loan Losses |
1,453 | 1,392 | 1,306 | 1,321 | 1,333 | 4 | 9 | |||||||||||||||||||||
Net Charge-off Rate (e) (f) |
0.46 | % | 0.45 | % | 0.27 | % | 0.24 | % | 0.27 | % | ||||||||||||||||||
Allowance for Loan Losses to Ending
Loans (c) (d) |
0.89 | 0.77 | 0.69 | 0.69 | 0.71 | |||||||||||||||||||||||
Allowance for Loan Losses to
Nonperforming Loans (g) |
94 | 89 | 95 | 99 | 100 | |||||||||||||||||||||||
Nonperforming Loans to Total Loans |
0.88 | 0.79 | 0.68 | 0.66 | 0.67 |
(a) | As a result of the adoption of SFAS 159, certain loan origination costs have been reclassified to Expense (previously netted against Revenue) in the quarter ended March 31, 2007. | |
(b) | 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 results in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this would result in an improving overhead ratio over time, all things remaining equal. This non-GAAP ratio excludes Regional Bankings core deposit intangible amortization expense related to the Bank of New York transaction and the Merger of $116 million, $130 million, $109 million, $110 million and $109 million for the quarters ending March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. | |
(c) | End-of-period Loans include prime mortgage loans accounted for at fair value under SFAS 159 of $11.6 billion at March 31, 2007. These loans are classified as Trading Assets on the Consolidated balance sheet and are not included in the allowance coverage ratio. | |
(d) | End-of-period Loans include Loans held-for-sale of $13.4 billion, $32.7 billion, $17.0 billion, $11.8 billion and $14.3 billion at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts are not included in the allowance coverage ratios. | |
(e) | Average loans include prime mortgage loans accounted for at fair value under SFAS 159 of $6.5 billion for the quarter ended March 31, 2007. These loans are classified as Trading Assets on the Consolidated balance sheet and are not included in the Net charge-off rate. | |
(f) | Average loans include Loans held-for-sale of $21.7 billion, $21.2 billion, $14.0 billion, $12.9 billion and $16.4 billion for the quarters ended March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts are not included in the Net charge-off rate. | |
(g) | Nonperforming loans include Loans held-for-sale of $112 million, $116 million, $24 million, $9 million and $16 million at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts are not included in the allowance coverage ratios. |
Page 10
JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except ratio data and where otherwise noted) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
REGIONAL BANKING |
||||||||||||||||||||||||||||
Noninterest Revenue |
$ | 793 | $ | 678 | $ | 855 | $ | 851 | $ | 820 | 17 | % | (3 | )% | ||||||||||||||
Net Interest Income |
2,299 | 2,229 | 2,107 | 2,212 | 2,220 | 3 | 4 | |||||||||||||||||||||
Total Net Revenue |
3,092 | 2,907 | 2,962 | 3,063 | 3,040 | 6 | 2 | |||||||||||||||||||||
Provision for Credit Losses |
233 | 165 | 53 | 70 | 66 | 41 | 253 | |||||||||||||||||||||
Noninterest Expense |
1,729 | 1,730 | 1,611 | 1,746 | 1,738 | - | (1 | ) | ||||||||||||||||||||
Income Before Income Tax Expense |
1,130 | 1,012 | 1,298 | 1,247 | 1,236 | 12 | (9 | ) | ||||||||||||||||||||
Net Income |
690 | 619 | 744 | 764 | 757 | 11 | (9 | ) | ||||||||||||||||||||
ROE |
24 | % | 21 | % | 29 | % | 30 | % | 31 | % | ||||||||||||||||||
Overhead Ratio |
56 | 60 | 54 | 57 | 57 | |||||||||||||||||||||||
Overhead Ratio Excluding Core Deposit Intangibles (a) |
52 | 55 | 51 | 53 | 54 | |||||||||||||||||||||||
BUSINESS METRICS (in billions) |
||||||||||||||||||||||||||||
Home Equity Origination Volume |
$ | 12.7 | $ | 12.9 | $ | 13.3 | $ | 14.0 | $ | 11.7 | (2 | ) | 9 | |||||||||||||||
End of Period Loans Owned: |
||||||||||||||||||||||||||||
Home Equity |
$ | 87.7 | $ | 85.7 | $ | 80.4 | $ | 77.8 | $ | 75.3 | 2 | 16 | ||||||||||||||||
Mortgage (b) |
9.2 | 30.1 | 46.6 | 48.6 | 47.0 | (69 | ) | (80 | ) | |||||||||||||||||||
Business Banking |
14.3 | 14.1 | 13.1 | 13.0 | 12.8 | 1 | 12 | |||||||||||||||||||||
Education |
11.1 | 10.3 | 9.4 | 8.3 | 9.5 | 8 | 17 | |||||||||||||||||||||
Other Loans (c) |
2.7 | 2.7 | 2.2 | 2.6 | 2.7 | - | - | |||||||||||||||||||||
Total End of Period Loans |
125.0 | 142.9 | 151.7 | 150.3 | 147.3 | (13 | ) | (15 | ) | |||||||||||||||||||
End of Period Deposits: |
||||||||||||||||||||||||||||
Checking |
$ | 69.3 | $ | 68.7 | $ | 59.8 | $ | 62.3 | $ | 64.9 | 1 | 7 | ||||||||||||||||
Savings |
100.1 | 92.4 | 86.9 | 89.1 | 91.0 | 8 | 10 | |||||||||||||||||||||
Time and Other |
42.2 | 43.3 | 41.5 | 36.5 | 34.2 | (3 | ) | 23 | ||||||||||||||||||||
Total End of Period Deposits |
211.6 | 204.4 | 188.2 | 187.9 | 190.1 | 4 | 11 | |||||||||||||||||||||
Average Loans Owned: |
||||||||||||||||||||||||||||
Home Equity |
$ | 86.3 | $ | 84.2 | $ | 78.8 | $ | 76.2 | $ | 74.1 | 2 | 16 | ||||||||||||||||
Mortgage Loans (b) |
8.9 | 40.8 | 47.8 | 47.1 | 44.6 | (78 | ) | (80 | ) | |||||||||||||||||||
Business Banking |
14.3 | 14.0 | 13.0 | 13.0 | 12.8 | 2 | 12 | |||||||||||||||||||||
Education |
11.0 | 9.9 | 8.9 | 8.7 | 5.4 | 11 | 104 | |||||||||||||||||||||
Other Loans (c) |
3.0 | 2.7 | 2.2 | 2.6 | 3.0 | 11 | - | |||||||||||||||||||||
Total Average Loans (d) |
123.5 | 151.6 | 150.7 | 147.6 | 139.9 | (19 | ) | (12 | ) | |||||||||||||||||||
Average Deposits: |
||||||||||||||||||||||||||||
Checking |
$ | 67.3 | $ | 65.5 | $ | 60.3 | $ | 62.6 | $ | 63.0 | 3 | 7 | ||||||||||||||||
Savings |
96.7 | 92.2 | 88.1 | 89.8 | 89.3 | 5 | 8 | |||||||||||||||||||||
Time and Other |
42.5 | 43.0 | 39.0 | 35.4 | 32.4 | (1 | ) | 31 | ||||||||||||||||||||
Total Average Deposits |
206.5 | 200.7 | 187.4 | 187.8 | 184.7 | 3 | 12 | |||||||||||||||||||||
Average Assets |
135.9 | 162.5 | 159.1 | 164.6 | 157.1 | (16 | ) | (13 | ) | |||||||||||||||||||
Average Equity |
11.8 | 11.9 | 10.2 | 10.2 | 9.8 | (1 | ) | 20 |
Page 11
JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except ratio data and where otherwise noted) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
REGIONAL BANKING (continued) |
||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS |
||||||||||||||||||||||||||||
30+ Day Delinquency Rate (e) (f) |
1.93 | % | 2.02 | % | 1.57 | % | 1.48 | % | 1.36 | % | ||||||||||||||||||
Net Charge-offs |
||||||||||||||||||||||||||||
Home Equity |
$ | 68 | $ | 51 | $ | 29 | $ | 30 | $ | 33 | 33 | % | 106 | % | ||||||||||||||
Mortgage |
20 | 21 | 14 | 9 | 12 | (5 | ) | 67 | ||||||||||||||||||||
Business Banking |
25 | 38 | 19 | 16 | 18 | (34 | ) | 39 | ||||||||||||||||||||
Other Loans |
13 | 27 | 1 | 13 | 7 | (52 | ) | 86 | ||||||||||||||||||||
Total Net Charge-offs |
126 | 137 | 63 | 68 | 70 | (8 | ) | 80 | ||||||||||||||||||||
Net Charge-off Rate |
||||||||||||||||||||||||||||
Home Equity |
0.32 | % | 0.24 | % | 0.15 | % | 0.16 | % | 0.18 | % | ||||||||||||||||||
Mortgage |
0.91 | 0.20 | 0.12 | 0.08 | 0.11 | |||||||||||||||||||||||
Business Banking |
0.71 | 1.08 | 0.58 | 0.49 | 0.57 | |||||||||||||||||||||||
Other Loans (d) |
0.55 | 1.15 | 0.05 | 0.55 | 0.56 | |||||||||||||||||||||||
Total Net Charge-off Rate (d) (g) |
0.43 | 0.37 | 0.17 | 0.19 | 0.21 | |||||||||||||||||||||||
Nonperforming Assets (g) (h) (i) |
$ | 1,770 | $ | 1,725 | $ | 1,421 | $ | 1,349 | $ | 1,339 | 3 | 32 | ||||||||||||||||
RETAIL BRANCH BUSINESS METRICS |
||||||||||||||||||||||||||||
Investment Sales Volume |
$ | 4,783 | $ | 4,101 | $ | 3,536 | $ | 3,692 | $ | 3,553 | 17 | 35 | ||||||||||||||||
Number of: |
||||||||||||||||||||||||||||
Branches |
3,071 | 3,079 | 2,677 | 2,660 | 2,638 | (8) | # | 433 | # | |||||||||||||||||||
ATMs |
8,560 | 8,506 | 7,825 | 7,753 | 7,400 | 54 | 1,160 | |||||||||||||||||||||
Personal Bankers (j) |
7,846 | 7,573 | 7,484 | 7,260 | 7,019 | 273 | 827 | |||||||||||||||||||||
Sales Specialists (j) |
3,712 | 3,614 | 3,471 | 3,376 | 3,318 | 98 | 394 | |||||||||||||||||||||
Active Online Customers (in thousands) (k) |
6,172 | 5,715 | 5,340 | 5,072 | 5,030 | 457 | 1,142 | |||||||||||||||||||||
Checking Accounts (in thousands) |
10,136 | 9,995 | 9,270 | 9,072 | 8,936 | 141 | 1,200 | |||||||||||||||||||||
MORTGAGE BANKING |
||||||||||||||||||||||||||||
Production Revenue (l) |
$ | 400 | $ | 215 | $ | 197 | $ | 202 | $ | 219 | 86 | % | 83 | % | ||||||||||||||
Net Mortgage Servicing Revenue: |
||||||||||||||||||||||||||||
Loan Servicing Revenue |
601 | 598 | 579 | 563 | 560 | 1 | 7 | |||||||||||||||||||||
Changes in MSR Asset Fair Value: |
||||||||||||||||||||||||||||
Due to Inputs or Assumptions in Model (m) |
108 | 38 | (1,075 | ) | 491 | 711 | 184 | (85 | ) | |||||||||||||||||||
Other Changes in Fair Value (n) |
(378 | ) | (372 | ) | (327 | ) | (392 | ) | (349 | ) | (2 | ) | (8 | ) | ||||||||||||||
Derivative Valuation Adjustments and Other |
(127 | ) | (69 | ) | 824 | (546 | ) | (753 | ) | (84 | ) | 83 | ||||||||||||||||
Total Net Mortgage Servicing Revenue |
204 | 195 | 1 | 116 | 169 | 5 | 21 | |||||||||||||||||||||
Total Net Revenue |
604 | 410 | 198 | 318 | 388 | 47 | 56 | |||||||||||||||||||||
Noninterest Expense (l) |
468 | 354 | 334 | 329 | 324 | 32 | 44 | |||||||||||||||||||||
Income (Loss) Before Income Tax Expense |
136 | 56 | (136 | ) | (11 | ) | 64 | 143 | 113 | |||||||||||||||||||
Net Income (Loss) |
84 | 34 | (83 | ) | (7 | ) | 39 | 147 | 115 | |||||||||||||||||||
ROE |
17 | % | 8 | % | NM | NM | 9 | % | ||||||||||||||||||||
Business Metrics (in billions) |
||||||||||||||||||||||||||||
Third Party Mortgage Loans Serviced (Ending) |
$ | 546.1 | $ | 526.7 | $ | 510.7 | $ | 497.4 | $ | 484.1 | 4 | 13 | ||||||||||||||||
MSR Net Carrying Value (Ending) |
7.9 | 7.5 | 7.4 | 8.2 | 7.5 | 5 | 5 | |||||||||||||||||||||
Avg Mortgage Trading Loans and Loans
Held-for-Sale (o) |
23.8 | 17.9 | 10.5 | 9.8 | 13.0 | 33 | 83 | |||||||||||||||||||||
Average Assets |
38.0 | 29.8 | 22.4 | 23.9 | 27.1 | 28 | 40 | |||||||||||||||||||||
Average Equity |
2.0 | 1.7 | 1.7 | 1.7 | 1.7 | 18 | 18 | |||||||||||||||||||||
Mortgage Origination Volume by Channel (in billions) |
||||||||||||||||||||||||||||
Retail |
$ | 10.9 | $ | 10.4 | $ | 10.1 | $ | 10.8 | $ | 9.1 | 5 | 20 | ||||||||||||||||
Wholesale |
10.0 | 9.0 | 7.7 | 8.7 | 7.4 | 11 | 35 | |||||||||||||||||||||
Correspondent (Including Negotiated Transactions) |
13.2 | 11.6 | 10.6 | 12.0 | 11.7 | 14 | 13 | |||||||||||||||||||||
Total |
34.1 | 31.0 | 28.4 | 31.5 | 28.2 | 10 | 21 |
Page 12
JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except ratio data and where otherwise noted) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
AUTO FINANCE |
||||||||||||||||||||||||||||
Noninterest Revenue |
$ | 131 | $ | 124 | $ | 110 | $ | 90 | $ | 44 | 6 | % | 198 | % | ||||||||||||||
Net Interest Income |
279 | 287 | 285 | 308 | 291 | (3 | ) | (4 | ) | |||||||||||||||||||
Total Net Revenue |
410 | 411 | 395 | 398 | 335 | - | 22 | |||||||||||||||||||||
Provision for Credit Losses |
59 | 97 | 61 | 30 | 19 | (39 | ) | 211 | ||||||||||||||||||||
Noninterest Expense |
210 | 207 | 194 | 184 | 176 | 1 | 19 | |||||||||||||||||||||
Income Before Income Tax Expense |
141 | 107 | 140 | 184 | 140 | 32 | 1 | |||||||||||||||||||||
Net Income |
85 | 65 | 85 | 111 | 85 | 31 | - | |||||||||||||||||||||
ROE |
16 | % | 11 | % | 14 | % | 19 | % | 14 | % | ||||||||||||||||||
ROA |
0.80 | 0.60 | 0.77 | 0.98 | 0.73 | |||||||||||||||||||||||
Business Metrics (in billions) |
||||||||||||||||||||||||||||
Auto Origination Volume |
$ | 5.2 | $ | 5.0 | $ | 5.5 | $ | 4.5 | $ | 4.3 | 4 | 21 | ||||||||||||||||
End-of-Period Loans and Lease Related Assets |
||||||||||||||||||||||||||||
Loans Outstanding |
$ | 39.7 | $ | 39.3 | $ | 38.1 | $ | 39.4 | $ | 41.0 | 1 | (3 | ) | |||||||||||||||
Lease Financing Receivables |
1.2 | 1.7 | 2.2 | 2.8 | 3.6 | (29 | ) | (67 | ) | |||||||||||||||||||
Operating Lease Assets |
1.7 | 1.6 | 1.5 | 1.3 | 1.1 | 6 | 55 | |||||||||||||||||||||
Total End-of-Period Loans and Lease Related Assets |
42.6 | 42.6 | 41.8 | 43.5 | 45.7 | - | (7 | ) | ||||||||||||||||||||
Average Loans and Lease Related Assets |
||||||||||||||||||||||||||||
Loans Outstanding (p) |
$ | 39.4 | $ | 38.7 | $ | 38.9 | $ | 40.3 | $ | 41.2 | 2 | (4 | ) | |||||||||||||||
Lease Financing Receivables |
1.5 | 1.9 | 2.5 | 3.2 | 4.0 | (21 | ) | (63 | ) | |||||||||||||||||||
Operating Lease Assets |
1.6 | 1.5 | 1.4 | 1.2 | 1.0 | 7 | 60 | |||||||||||||||||||||
Total Average Loans and Lease Related Assets |
42.5 | 42.1 | 42.8 | 44.7 | 46.2 | 1 | (8 | ) | ||||||||||||||||||||
Average Assets |
43.2 | 43.1 | 43.8 | 45.6 | 47.3 | - | (9 | ) | ||||||||||||||||||||
Average Equity |
2.2 | 2.4 | 2.4 | 2.4 | 2.4 | (8 | ) | (8 | ) | |||||||||||||||||||
Credit Quality Statistics |
||||||||||||||||||||||||||||
30+ Day Delinquency Rate |
1.33 | % | 1.72 | % | 1.61 | % | 1.37 | % | 1.39 | % | ||||||||||||||||||
Net Charge-offs |
||||||||||||||||||||||||||||
Loans |
$ | 58 | $ | 76 | $ | 63 | $ | 44 | $ | 48 | (24 | ) | 21 | |||||||||||||||
Lease Receivables |
1 | 1 | 2 | 1 | 3 | - | (67 | ) | ||||||||||||||||||||
Total Net Charge-offs |
59 | 77 | 65 | 45 | 51 | (23 | ) | 16 | ||||||||||||||||||||
Net Charge-off Rate |
||||||||||||||||||||||||||||
Loans (p) |
0.60 | % | 0.78 | % | 0.66 | % | 0.45 | % | 0.47 | % | ||||||||||||||||||
Lease Receivables |
0.27 | 0.21 | 0.32 | 0.13 | 0.30 | |||||||||||||||||||||||
Total Net Charge-off Rate (p) |
0.59 | 0.75 | 0.64 | 0.43 | 0.46 | |||||||||||||||||||||||
Nonperforming Assets |
$ | 140 | $ | 177 | $ | 174 | $ | 171 | $ | 198 | (21 | ) | (29 | ) |
(a) | Regional Banking 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 results in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this would result in an improving overhead ratio over time, all things remaining equal. This non-GAAP ratio excludes Regional Bankings core deposit intangible amortization expense related to the Bank of New York transaction and the Merger of $116 million, $130 million, $109 million, $110 million and $109 million for the quarters ended March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. | |
(b) | As of January 1, 2007, $19.4 billion of held-for-investment prime mortgage loans were transferred from Retail Financial Services (RFS) to Treasury within the Corporate segment for risk management and reporting purposes. Although the loans, together with the responsibility for the investment management of the portfolio, were transferred to Treasury, the transfer has no impact on the financial results of Regional Banking. The balances reported at and for the quarter ended March 31, 2007, reflect primarily subprime mortgage loans owned. | |
(c) | Includes commercial loans derived from community development activities and, prior to July 1, 2006, insurance policy loans. | |
(d) | Average loans include Loans held-for-sale of $4.4 billion, $3.3 billion, $2.5 billion, $1.9 billion and $3.3 billion for the quarters ended March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts are not included in the Net charge-off rate. | |
(e) | Excludes delinquencies related to loans eligible for repurchase as well as loans repurchased from GNMA pools that are insured by government agencies of $975 million, $960 million, $880 million, $828 million and $942 million at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts are excluded as reimbursement is proceeding normally. | |
(f) | Excludes loans that are 30 days past due and still accruing, which are insured by government agencies under the Federal Family Education Loan Program of $519 million, $464 million, $462 million, $416 million and $370 million at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts are excluded as reimbursement is proceeding normally. | |
(g) | Excludes loans that are 90 days past due and still accruing, which are insured by government agencies under the Federal Family Education Loan Program of $178 million, $219 million, $189 million, $163 million and $156 million for the quarters ended March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts are excluded as reimbursement is proceeding normally. | |
(h) | Excludes Nonperforming assets related to loans eligible for repurchase as well as loans repurchased from GNMA pools that are insured by government agencies of $1.3 billion, $1.2 billion, $1.1 billion, $1.1 billion and $1.1 billion at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts are excluded as reimbursement is proceeding normally. | |
(i) | Includes Nonperforming loans held-for-sale related to mortgage banking activities of $79 million, $11 million, $3 million, $9 million and $16 million at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. | |
(j) | Excludes employees acquired as part of The Bank of New York transaction. Mapping of the existing Bank of New York acquired employee base into Chase employment categories is expected to be completed over the next year. | |
(k) | Includes Mortgage Banking and Auto Finance online customers. | |
(l) | As a result of the adoption of SFAS 159, certain loan origination costs have been reclassified to Expense (previously netted against Revenue) in the quarter ended March 31, 2007. | |
(m) | Represents MSR asset fair value adjustments due to changes in inputs, such as interest rates and volatility, as well as updates to assumptions used in the valuation model. | |
(n) | Includes changes in the MSR value due to servicing portfolio runoff (or time decay). | |
(o) | Includes $6.5 billion of prime mortgage loans for which the fair value option was elected under SFAS 159. These loans are classified as Trading Assets on the Consolidated balance sheets for the quarter ended March 31, 2007. | |
(p) | Average loans include Loans held-for-sale of $943 million, and $1.2 billion for the quarters ended September 30, 2006 and June 30, 2006, respectively. Average loans held-for-sale for the quarters ended March 31, 2007, December 31, 2006 and March 31, 2006 were insignificant. These amounts are not included in the Net charge-off rate. |
Page 13
JPMORGAN CHASE & CO. CARD SERVICES - MANAGED BASIS FINANCIAL HIGHLIGHTS
(in millions, except ratio data and where otherwise noted) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
INCOME STATEMENT |
||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||
Credit Card Income |
$ | 599 | $ | 697 | $ | 636 | $ | 653 | $ | 601 | (14 | )% | - | % | ||||||||||||||
All Other Income |
92 | 111 | 126 | 49 | 71 | (17 | ) | 30 | ||||||||||||||||||||
Noninterest Revenue |
691 | 808 | 762 | 702 | 672 | (14 | ) | 3 | ||||||||||||||||||||
Net Interest Income |
2,989 | 2,942 | 2,884 | 2,962 | 3,013 | 2 | (1 | ) | ||||||||||||||||||||
TOTAL NET REVENUE |
3,680 | 3,750 | 3,646 | 3,664 | 3,685 | (2 | ) | - | ||||||||||||||||||||
Provision for Credit Losses (a) |
1,229 | 1,281 | 1,270 | 1,031 | 1,016 | (4 | ) | 21 | ||||||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||
Compensation Expense |
254 | 242 | 251 | 251 | 259 | 5 | (2 | ) | ||||||||||||||||||||
Noncompensation Expense |
803 | 915 | 823 | 810 | 796 | (12 | ) | 1 | ||||||||||||||||||||
Amortization of Intangibles |
184 | 184 | 179 | 188 | 188 | - | (2 | ) | ||||||||||||||||||||
TOTAL NONINTEREST EXPENSE |
1,241 | 1,341 | 1,253 | 1,249 | 1,243 | (7 | ) | - | ||||||||||||||||||||
Income Before Income Tax Expense |
1,210 | 1,128 | 1,123 | 1,384 | 1,426 | 7 | (15 | ) | ||||||||||||||||||||
Income Tax Expense |
445 | 409 | 412 | 509 | 525 | 9 | (15 | ) | ||||||||||||||||||||
NET INCOME |
$ | 765 | $ | 719 | $ | 711 | $ | 875 | $ | 901 | 6 | (15 | ) | |||||||||||||||
Memo: Net Securitization Gains (Amortization) |
$ | 23 | $ | 32 | $ | 48 | $ | (6 | ) | $ | 8 | (28 | ) | 188 | ||||||||||||||
FINANCIAL METRICS |
||||||||||||||||||||||||||||
ROE |
22 | % | 20 | % | 20 | % | 25 | % | 26 | % | ||||||||||||||||||
Overhead Ratio |
34 | 36 | 34 | 34 | 34 | |||||||||||||||||||||||
% of Average Managed Outstandings: |
||||||||||||||||||||||||||||
Net Interest Income |
8.11 | 7.92 | 8.07 | 8.66 | 8.85 | |||||||||||||||||||||||
Provision for Credit Losses |
3.34 | 3.45 | 3.56 | 3.01 | 2.99 | |||||||||||||||||||||||
Noninterest Revenue |
1.88 | 2.17 | 2.13 | 2.05 | 1.97 | |||||||||||||||||||||||
Risk Adjusted Margin (b) |
6.65 | 6.65 | 6.65 | 7.70 | 7.84 | |||||||||||||||||||||||
Noninterest Expense |
3.37 | 3.61 | 3.51 | 3.65 | 3.65 | |||||||||||||||||||||||
Pretax Income (ROO) |
3.28 | 3.04 | 3.14 | 4.05 | 4.19 | |||||||||||||||||||||||
Net Income |
2.08 | 1.94 | 1.99 | 2.56 | 2.65 | |||||||||||||||||||||||
BUSINESS METRICS |
||||||||||||||||||||||||||||
Charge
Volume (in billions) |
$ | 81.3 | $ | 93.4 | $ | 87.5 | $ | 84.4 | $ | 74.3 | (13 | ) | 9 | |||||||||||||||
Net Accounts
Opened (in thousands) (c) |
3,439 | 14,392 | 4,186 | 24,573 | 2,718 | (76 | ) | 27 | ||||||||||||||||||||
Credit Cards
Issued (in thousands) |
152,097 | 154,424 | 139,513 | 136,685 | 112,446 | (2 | ) | 35 | ||||||||||||||||||||
Number of
Registered Internet Customers (in millions) |
24.3 | 22.5 | 20.4 | 19.1 | 15.9 | 8 | 53 | |||||||||||||||||||||
Merchant Acquiring Business (d) |
||||||||||||||||||||||||||||
Bank Card
Volume (in billions) |
$ | 163.6 | $ | 177.9 | $ | 168.7 | $ | 166.3 | $ | 147.7 | (8 | ) | 11 | |||||||||||||||
Total
Transactions (in millions) |
4,465 | 4,968 | 4,597 | 4,476 | 4,130 | (10 | ) | 8 |
(a) | Second quarter of 2006 includes a $90 million release of a $100 million special provision, originally recorded in the third quarter of 2005, related to Hurricane Katrina. | |
(b) | Represents Total Net Revenue less Provision for Credit Losses. | |
(c) | Fourth quarter of 2006 includes approximately 9 million accounts from the acquisition of the BP and Pier 1 Imports, Inc. private label portfolios. Second quarter of 2006 includes approximately 21 million accounts from the acquisition of the Kohls private label portfolio. | |
(d) | Represents 100% of the merchant acquiring business. |
Page 14
JPMORGAN CHASE & CO. CARD SERVICES - MANAGED BASIS FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except headcount and ratio data) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
SELECTED ENDING BALANCES |
||||||||||||||||||||||||||||
Loans: |
||||||||||||||||||||||||||||
Loans on Balance Sheets |
$ | 78,173 | $ | 85,881 | $ | 78,587 | $ | 72,961 | $ | 64,691 | (9 | )% | 21 | % | ||||||||||||||
Securitized Loans |
68,403 | 66,950 | 65,245 | 66,349 | 69,580 | 2 | (2 | ) | ||||||||||||||||||||
Managed Loans |
$ | 146,576 | $ | 152,831 | $ | 143,832 | $ | 139,310 | $ | 134,271 | (4 | ) | 9 | |||||||||||||||
SELECTED AVERAGE BALANCES |
||||||||||||||||||||||||||||
Managed Assets |
$ | 156,271 | $ | 153,973 | $ | 148,272 | $ | 144,284 | $ | 145,994 | 1 | 7 | ||||||||||||||||
Loans: |
||||||||||||||||||||||||||||
Loans on Balance Sheets |
$ | 81,932 | $ | 81,489 | $ | 76,655 | $ | 68,185 | $ | 68,455 | 1 | 20 | ||||||||||||||||
Securitized Loans |
67,485 | 65,898 | 65,061 | 69,005 | 69,571 | 2 | (3 | ) | ||||||||||||||||||||
Managed Loans |
$ | 149,417 | $ | 147,387 | $ | 141,716 | $ | 137,190 | $ | 138,026 | 1 | 8 | ||||||||||||||||
Equity |
14,100 | 14,100 | 14,100 | 14,100 | 14,100 | - | - | |||||||||||||||||||||
Headcount |
18,749 | 18,639 | 18,696 | 18,753 | 18,801 | 1 | - | |||||||||||||||||||||
MANAGED CREDIT QUALITY STATISTICS |
||||||||||||||||||||||||||||
Net Charge-offs |
$ | 1,314 | $ | 1,281 | $ | 1,280 | $ | 1,121 | $ | 1,016 | 3 | 29 | ||||||||||||||||
Net Charge-off Rate |
3.57 | % | 3.45 | % | 3.58 | % | 3.28 | % | 2.99 | % | ||||||||||||||||||
Managed delinquency ratios |
||||||||||||||||||||||||||||
30+ days |
3.07 | % | 3.13 | % | 3.17 | % | 3.14 | % | 3.10 | % | ||||||||||||||||||
90+ days |
1.52 | 1.50 | 1.48 | 1.52 | 1.39 | |||||||||||||||||||||||
Allowance for Loan Losses |
$ | 3,092 | $ | 3,176 | $ | 3,176 | $ | 3,186 | $ | 3,274 | (3 | ) | (6 | ) | ||||||||||||||
Allowance for Loan Losses to Period-end Loans |
3.96 | % | 3.70 | % | 4.04 | % | 4.37 | % | 5.06 | % |
Page 15
JPMORGAN CHASE & CO. CARD RECONCILIATION OF REPORTED AND MANAGED DATA (in millions)
|
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
INCOME STATEMENT DATA (a) |
||||||||||||||||||||||||||||
Credit Card Income |
||||||||||||||||||||||||||||
Reported Basis for the Period |
$ | 1,345 | $ | 1,423 | $ | 1,357 | $ | 1,590 | $ | 1,726 | (5 | )% | (22 | )% | ||||||||||||||
Securitization Adjustments |
(746 | ) | (726 | ) | (721 | ) | (937 | ) | (1,125 | ) | (3 | ) | 34 | |||||||||||||||
Managed Credit Card Income |
$ | 599 | $ | 697 | $ | 636 | $ | 653 | $ | 601 | (14 | ) | - | |||||||||||||||
Net Interest Income |
||||||||||||||||||||||||||||
Reported Basis for the Period |
$ | 1,650 | $ | 1,623 | $ | 1,556 | $ | 1,464 | $ | 1,439 | 2 | 15 | ||||||||||||||||
Securitization Adjustments |
1,339 | 1,319 | 1,328 | 1,498 | 1,574 | 2 | (15 | ) | ||||||||||||||||||||
Managed Net Interest Income |
$ | 2,989 | $ | 2,942 | $ | 2,884 | $ | 2,962 | $ | 3,013 | 2 | (1 | ) | |||||||||||||||
Total Net Revenue |
||||||||||||||||||||||||||||
Reported Basis for the Period |
$ | 3,087 | $ | 3,157 | $ | 3,039 | $ | 3,103 | $ | 3,236 | (2 | ) | (5 | ) | ||||||||||||||
Securitization Adjustments |
593 | 593 | 607 | 561 | 449 | - | 32 | |||||||||||||||||||||
Managed Total Net Revenue |
$ | 3,680 | $ | 3,750 | $ | 3,646 | $ | 3,664 | $ | 3,685 | (2 | ) | - | |||||||||||||||
Provision for Credit Losses |
||||||||||||||||||||||||||||
Reported Basis for the Period (b) |
$ | 636 | $ | 688 | $ | 663 | $ | 470 | $ | 567 | (8 | ) | 12 | |||||||||||||||
Securitization Adjustments |
593 | 593 | 607 | 561 | 449 | - | 32 | |||||||||||||||||||||
Managed Provision for Credit Losses (b) |
$ | 1,229 | $ | 1,281 | $ | 1,270 | $ | 1,031 | $ | 1,016 | (4 | ) | 21 | |||||||||||||||
BALANCE SHEETS - AVERAGE BALANCES (a) |
||||||||||||||||||||||||||||
Total Average Assets |
||||||||||||||||||||||||||||
Reported Basis for the Period |
$ | 91,157 | $ | 90,283 | $ | 85,301 | $ | 77,371 | $ | 78,437 | 1 | 16 | ||||||||||||||||
Securitization Adjustments |
65,114 | 63,690 | 62,971 | 66,913 | 67,557 | 2 | (4 | ) | ||||||||||||||||||||
Managed Average Assets |
$ | 156,271 | $ | 153,973 | $ | 148,272 | $ | 144,284 | $ | 145,994 | 1 | 7 | ||||||||||||||||
CREDIT QUALITY STATISTICS (a) |
||||||||||||||||||||||||||||
Net Charge-offs |
||||||||||||||||||||||||||||
Reported Net Charge-offs Data for the Period |
$ | 721 | $ | 688 | $ | 673 | $ | 560 | $ | 567 | 5 | 27 | ||||||||||||||||
Securitization Adjustments |
593 | 593 | 607 | 561 | 449 | - | 32 | |||||||||||||||||||||
Managed Net Charge-offs |
$ | 1,314 | $ | 1,281 | $ | 1,280 | $ | 1,121 | $ | 1,016 | 3 | 29 | ||||||||||||||||
(a) | JPMorgan Chase uses the concept of managed receivables to evaluate the credit performance and overall performance of the underlying credit card loans, both sold and not sold; as the same borrower is continuing to use the credit card for ongoing charges, a borrowers credit performance will affect both the receivables sold under SFAS 140 and those not sold. Thus, in its disclosures regarding managed receivables, JPMorgan Chase treats the sold receivables as if they were still on the balance sheet in order to disclose the credit performance (such as net charge-off rates) of the entire managed credit card portfolio. Managed results exclude the impact of credit card securitizations on Total Net Revenue, the Provision for Credit Losses, Net Charge-Offs and Loan Receivables. Securitization does not change reported Net income versus managed earnings; however, it does affect the classification of items on the Consolidated Statements of Income and Consolidated Balance Sheets. | |
(b) | Second quarter of 2006 includes a $90 million release of a $100 million special provision, originally recorded in the third quarter of 2005, related to Hurricane Katrina. |
Page 16
JPMORGAN CHASE & CO. COMMERCIAL BANKING FINANCIAL HIGHLIGHTS
(in millions, except ratio data) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
INCOME STATEMENT |
||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||
Lending & Deposit Related Fees |
$ | 158 | $ | 155 | $ | 145 | $ | 147 | $ | 142 | 2 | % | 11 | % | ||||||||||||||
Asset Management, Administration and Commissions |
23 | 20 | 16 | 16 | 15 | 15 | 53 | |||||||||||||||||||||
All Other Income (a) |
154 | 135 | 95 | 111 | 76 | 14 | 103 | |||||||||||||||||||||
Noninterest Revenue |
335 | 310 | 256 | 274 | 233 | 8 | 44 | |||||||||||||||||||||
Net Interest Income |
668 | 708 | 677 | 675 | 667 | (6 | ) | - | ||||||||||||||||||||
TOTAL NET REVENUE |
1,003 | 1,018 | 933 | 949 | 900 | (1 | ) | 11 | ||||||||||||||||||||
Provision for Credit Losses |
17 | 111 | 54 | (12 | ) | 7 | (85 | ) | 143 | |||||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||
Compensation Expense |
180 | 174 | 190 | 179 | 197 | 3 | (9 | ) | ||||||||||||||||||||
Noncompensation Expense |
290 | 296 | 296 | 302 | 285 | (2 | ) | 2 | ||||||||||||||||||||
Amortization of Intangibles |
15 | 15 | 14 | 15 | 16 | - | (6 | ) | ||||||||||||||||||||
TOTAL NONINTEREST EXPENSE |
485 | 485 | 500 | 496 | 498 | - | (3 | ) | ||||||||||||||||||||
Income Before Income Tax Expense |
501 | 422 | 379 | 465 | 395 | 19 | 27 | |||||||||||||||||||||
Income Tax Expense |
197 | 166 | 148 | 182 | 155 | 19 | 27 | |||||||||||||||||||||
NET INCOME |
$ | 304 | $ | 256 | $ | 231 | $ | 283 | $ | 240 | 19 | 27 | ||||||||||||||||
MEMO: |
||||||||||||||||||||||||||||
Revenue by Product: |
||||||||||||||||||||||||||||
Lending |
$ | 348 | $ | 359 | $ | 335 | $ | 331 | $ | 319 | (3 | ) | 9 | |||||||||||||||
Treasury Services |
556 | 576 | 551 | 566 | 550 | (3 | ) | 1 | ||||||||||||||||||||
Investment Banking |
76 | 87 | 60 | 66 | 40 | (13 | ) | 90 | ||||||||||||||||||||
Other |
23 | (4 | ) | (13 | ) | (14 | ) | (9 | ) | NM | NM | |||||||||||||||||
Total Commercial Banking Revenue |
$ | 1,003 | $ | 1,018 | $ | 933 | $ | 949 | $ | 900 | (1 | ) | 11 | |||||||||||||||
IB Revenues, Gross (b) |
$ | 231 | $ | 246 | $ | 170 | $ | 186 | $ | 114 | (6 | ) | 103 | |||||||||||||||
Revenue by Business: |
||||||||||||||||||||||||||||
Middle Market Banking |
$ | 661 | $ | 661 | $ | 617 | $ | 634 | $ | 623 | - | 6 | ||||||||||||||||
Mid-Corporate Banking |
212 | 198 | 160 | 161 | 137 | 7 | 55 | |||||||||||||||||||||
Real Estate Banking |
102 | 120 | 119 | 114 | 105 | (15 | ) | (3 | ) | |||||||||||||||||||
Other |
28 | 39 | 37 | 40 | 35 | (28 | ) | (20 | ) | |||||||||||||||||||
Total Commercial Banking Revenue |
$ | 1,003 | $ | 1,018 | $ | 933 | $ | 949 | $ | 900 | (1 | ) | 11 | |||||||||||||||
FINANCIAL RATIOS |
||||||||||||||||||||||||||||
ROE |
20 | % | 16 | % | 17 | % | 21 | % | 18 | % | ||||||||||||||||||
Overhead Ratio |
48 | 48 | 54 | 52 | 55 |
(a) | IB-related and commercial card revenues are included in All Other Income. | |
(b) | Represents the total revenue related to Investment Banking products sold to Commercial Banking clients. |
Page 17
JPMORGAN CHASE & CO. COMMERCIAL BANKING FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except ratio and headcount data) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
SELECTED BALANCE SHEETS DATA (Average) |
||||||||||||||||||||||||||||
Total Assets |
$ | 82,545 | $ | 62,227 | $ | 57,378 | $ | 56,561 | $ | 54,771 | 33 | % | 51 | % | ||||||||||||||
Loans and Leases (a) |
57,660 | 57,657 | 53,404 | 52,413 | 50,836 | - | 13 | |||||||||||||||||||||
Liability Balances (b) |
81,752 | 79,050 | 72,009 | 72,556 | 70,763 | 3 | 16 | |||||||||||||||||||||
Equity |
6,300 | 6,300 | 5,500 | 5,500 | 5,500 | - | 15 | |||||||||||||||||||||
MEMO: |
||||||||||||||||||||||||||||
Loans by Business: |
||||||||||||||||||||||||||||
Middle Market Banking |
$ | 36,317 | $ | 35,618 | $ | 32,890 | $ | 32,492 | $ | 31,861 | 2 | 14 | ||||||||||||||||
Mid-Corporate Banking |
10,669 | 9,898 | 8,756 | 8,269 | 7,577 | 8 | 41 | |||||||||||||||||||||
Real Estate Banking |
7,074 | 7,745 | 7,564 | 7,515 | 7,436 | (9 | ) | (5 | ) | |||||||||||||||||||
Other |
3,600 | 4,396 | 4,194 | 4,137 | 3,962 | (18 | ) | (9 | ) | |||||||||||||||||||
Total Commercial Banking Loans |
$ | 57,660 | $ | 57,657 | $ | 53,404 | $ | 52,413 | $ | 50,836 | - | 13 | ||||||||||||||||
Headcount |
4,281 | 4,459 | 4,447 | 4,320 | 4,310 | (4 | ) | (1 | ) | |||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS |
||||||||||||||||||||||||||||
Net Charge-offs (Recoveries) |
$ | (1 | ) | $ | 16 | $ | 21 | $ | (3 | ) | $ | (7 | ) | NM | 86 | |||||||||||||
Nonperforming Loans |
141 | 121 | 157 | 225 | 202 | 17 | (30 | ) | ||||||||||||||||||||
Allowance for Loan Losses |
1,531 | 1,519 | 1,431 | 1,394 | 1,415 | 1 | 8 | |||||||||||||||||||||
Allowance for Lending-Related Commitments |
187 | 187 | 156 | 157 | 145 | - | 29 | |||||||||||||||||||||
Net Charge-off (Recovery) Rate (a) |
(0.01 | )% | 0.11 | % | 0.16 | % | (0.02 | )% | (0.06 | )% | ||||||||||||||||||
Allowance for Loan Losses to Average Loans (a) |
2.68 | 2.67 | 2.70 | 2.68 | 2.80 | |||||||||||||||||||||||
Allowance for Loan Losses to Nonperforming Loans |
1,086 | 1,255 | 911 | 620 | 700 | |||||||||||||||||||||||
Nonperforming Loans to Average Loans |
0.24 | 0.21 | 0.29 | 0.43 | 0.40 |
(a) | Average loans include Loans held-for-sale of $475 million, $804 million, $359 million, $334 million and $268 million for the quarters ended March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts are not included in the Net charge-off rate or allowance coverage ratios. | |
(b) | Liability balances include deposits and deposits that are swept to on-balance sheet liabilities. |
Page 18
JPMORGAN CHASE & CO. TREASURY & SECURITIES SERVICES FINANCIAL HIGHLIGHTS
(in millions, except ratio data and where otherwise noted) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
INCOME STATEMENT |
||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||
Lending & Deposit Related Fees |
$ | 213 | $ | 186 | $ | 183 | $ | 184 | $ | 182 | 15 | % | 17 | % | ||||||||||||||
Asset Management, Administration and Commissions |
686 | 717 | 642 | 683 | 650 | (4 | ) | 6 | ||||||||||||||||||||
All Other Income |
125 | 133 | 155 | 178 | 146 | (6 | ) | (14 | ) | |||||||||||||||||||
Noninterest Revenue |
1,024 | 1,036 | 980 | 1,045 | 978 | (1 | ) | 5 | ||||||||||||||||||||
Net Interest Income |
502 | 501 | 519 | 543 | 507 | - | (1 | ) | ||||||||||||||||||||
TOTAL NET REVENUE |
1,526 | 1,537 | 1,499 | 1,588 | 1,485 | (1 | ) | 3 | ||||||||||||||||||||
Provision for Credit Losses |
6 | (2 | ) | 1 | 4 | (4 | ) | NM | NM | |||||||||||||||||||
Credit Reimbursement to IB (a) |
(30 | ) | (31 | ) | (30 | ) | (30 | ) | (30 | ) | 3 | - | ||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||
Compensation Expense |
558 | 555 | 557 | 537 | 549 | 1 | 2 | |||||||||||||||||||||
Noncompensation Expense |
502 | 533 | 489 | 493 | 480 | (6 | ) | 5 | ||||||||||||||||||||
Amortization of Intangibles |
15 | 16 | 18 | 20 | 19 | (6 | ) | (21 | ) | |||||||||||||||||||
TOTAL NONINTEREST EXPENSE |
1,075 | 1,104 | 1,064 | 1,050 | 1,048 | (3 | ) | 3 | ||||||||||||||||||||
Income before Income Tax Expense |
415 | 404 | 404 | 504 | 411 | 3 | 1 | |||||||||||||||||||||
Income Tax Expense |
152 | 148 | 148 | 188 | 149 | 3 | 2 | |||||||||||||||||||||
NET INCOME |
$ | 263 | $ | 256 | $ | 256 | $ | 316 | $ | 262 | 3 | - | ||||||||||||||||
REVENUE BY BUSINESS |
||||||||||||||||||||||||||||
Treasury Services |
$ | 689 | 700 | $ | 697 | $ | 702 | $ | 693 | (2 | ) | (1 | ) | |||||||||||||||
Worldwide Securities Services |
837 | 837 | 802 | 886 | 792 | - | 6 | |||||||||||||||||||||
TOTAL NET REVENUE |
$ | 1,526 | $ | 1,537 | $ | 1,499 | $ | 1,588 | $ | 1,485 | (1 | ) | 3 | |||||||||||||||
FINANCIAL RATIOS |
||||||||||||||||||||||||||||
ROE |
36 | % | 46 | % | 46 | % | 58 | % | 42 | % | ||||||||||||||||||
Overhead Ratio |
70 | 72 | 71 | 66 | 71 | |||||||||||||||||||||||
Pretax Margin Ratio (b) |
27 | 26 | 27 | 32 | 28 | |||||||||||||||||||||||
FIRMWIDE BUSINESS METRICS |
||||||||||||||||||||||||||||
Assets under Custody (in billions) |
$ | 14,661 | $ | 13,903 | $ | 12,873 | $ | 11,536 | $ | 11,179 | 5 | 31 | ||||||||||||||||
Number of: |
||||||||||||||||||||||||||||
US$ ACH transactions originated (in millions) |
971 | 931 | 886 | 848 | 838 | 4 | 16 | |||||||||||||||||||||
Total US$ Clearing Volume (in thousands) |
26,840 | 26,906 | 26,252 | 26,506 | 25,182 | - | 7 | |||||||||||||||||||||
International Electronic Funds Transfer Volume (in thousands) (c) |
42,399 | 41,007 | 35,322 | 35,255 | 33,741 | 3 | 26 | |||||||||||||||||||||
Wholesale Check Volume (in millions) |
771 | 793 | 860 | 904 | 852 | (3 | ) | (10 | ) | |||||||||||||||||||
Wholesale Cards Issued (in thousands) (d) |
17,146 | 17,228 | 16,662 | 16,271 | 16,977 | - | 1 |
Page 19
JPMORGAN CHASE & CO. TREASURY & SECURITIES SERVICES (a) (FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except headcount and ratio data) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
SELECTED BALANCE SHEETS (Average) |
||||||||||||||||||||||||||||
Total Assets |
$ | 46,005 | $ | 35,422 | $ | 30,558 | $ | 31,774 | $ | 29,230 | 30 | % | 57 | % | ||||||||||||||
Loans |
18,948 | 19,030 | 15,231 | 14,993 | 12,940 | - | 46 | |||||||||||||||||||||
Liability Balances (e) |
210,639 | 193,129 | 192,518 | 194,181 | 178,133 | 9 | 18 | |||||||||||||||||||||
Equity |
3,000 | 2,200 | 2,200 | 2,200 | 2,545 | 36 | 18 | |||||||||||||||||||||
Headcount |
24,875 | 25,423 | 24,575 | 24,100 | 23,598 | (2 | ) | 5 | ||||||||||||||||||||
TSS FIRMWIDE METRICS |
||||||||||||||||||||||||||||
Treasury Services Firmwide Revenue (f) |
$ | 1,305 | $ | 1,333 | $ | 1,300 | $ | 1,318 | $ | 1,291 | (2 | ) | 1 | |||||||||||||||
Treasury & Securities Services Firmwide Revenue (f) |
2,142 | 2,170 | 2,102 | 2,204 | 2,083 | (1 | ) | 3 | ||||||||||||||||||||
Treasury Services Firmwide Overhead Ratio (g) |
59 | % | 56 | % | 57 | % | 56 | % | 56 | % | ||||||||||||||||||
Treasury & Securities Services Firmwide Overhead Ratio (g) |
63 | 63 | 63 | 59 | 62 | |||||||||||||||||||||||
Treasury Services Firmwide Liability Balances (Average) (h) |
$ | 186,631 | $ | 168,321 | $ | 162,326 | $ | 161,866 | $ | 155,422 | 11 | 20 | ||||||||||||||||
Treasury & Securities Services Firmwide Liability Balances (Average)(h) |
292,391 | 272,178 | 264,527 | 265,398 | 248,328 | 7 | 18 |
FOOTNOTES | ||
(a) | TSS is charged a credit reimbursement related to certain exposures managed within the IB credit portfolio on behalf of clients shared with TSS. | |
(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) | International electronic funds transfer includes non-US$ ACH and clearing volume. | |
(d) | Wholesale cards issued include domestic commercial card, stored value card, prepaid card, and government electronic benefit card products. | |
(e) | Liability balances include Deposits and deposits swept to on-balance sheet liabilities. |
(f) | Firmwide revenue includes TS revenue recorded in the Commercial Banking (CB), Regional Banking and Asset Management (AM) lines of business (see below) and excludes FX revenues recorded in the IB for TSS-related FX activity. |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
TS Revenue Reported in CB |
$ | 556 | $ | 576 | $ | 551 | $ | 566 | $ | 550 | (3 | )% | 1 | % | ||||||||||||||
TS Revenue Reported in Other Lines of Business |
60 | 57 | 52 | 50 | 48 | 5 | 25 |
TSS firmwide FX revenue, which includes FX revenue recorded in TSS and FX revenue associated with TSS customers who are FX customers of the IB, was $112 million for the quarter ended March 31, 2007. | ||
(g) | Overhead ratios have been calculated based on firmwide revenues and TSS and TS expenses, respectively, including those allocated to certain other lines of business. FX revenues and expenses recorded in the IB for TSS-related FX activity are not included in this ratio. | |
(h) | Firmwide liability balances include TS liability balances recorded in certain other lines of business. Liability balances associated with TS customers who are also customers of the CB line of business are not included in TS liability balances. |
Page 20
JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS
(in millions, except ratio, ranking and headcount data) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
INCOME STATEMENT |
||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||
Asset Management, Administration and Commissions |
$ | 1,489 | $ | 1,509 | $ | 1,285 | $ | 1,279 | $ | 1,222 | (1 | )% | 22 | % | ||||||||||||||
All Other Income |
170 | 192 | 120 | 93 | 116 | (11 | ) | 47 | ||||||||||||||||||||
Noninterest Revenue |
1,659 | 1,701 | 1,405 | 1,372 | 1,338 | (2 | ) | 24 | ||||||||||||||||||||
Net Interest Income |
245 | 246 | 231 | 248 | 246 | - | - | |||||||||||||||||||||
TOTAL NET REVENUE |
1,904 | 1,947 | 1,636 | 1,620 | 1,584 | (2 | ) | 20 | ||||||||||||||||||||
Provision for Credit Losses |
(9 | ) | 14 | (28 | ) | (7 | ) | (7 | ) | NM | (29 | ) | ||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||
Compensation Expense |
764 | 750 | 676 | 669 | 682 | 2 | 12 | |||||||||||||||||||||
Noncompensation Expense |
451 | 512 | 417 | 390 | 394 | (12 | ) | 14 | ||||||||||||||||||||
Amortization of Intangibles |
20 | 22 | 22 | 22 | 22 | (9 | ) | (9 | ) | |||||||||||||||||||
TOTAL NONINTEREST EXPENSE |
1,235 | 1,284 | 1,115 | 1,081 | 1,098 | (4 | ) | 12 | ||||||||||||||||||||
Income Before Income Tax Expense |
678 | 649 | 549 | 546 | 493 | 4 | 38 | |||||||||||||||||||||
Income Tax Expense |
253 | 242 | 203 | 203 | 180 | 5 | 41 | |||||||||||||||||||||
NET INCOME |
$ | 425 | $ | 407 | $ | 346 | $ | 343 | $ | 313 | 4 | 36 | ||||||||||||||||
REVENUE BY CLIENT SEGMENT |
||||||||||||||||||||||||||||
Private Bank |
$ | 560 | $ | 528 | $ | 469 | $ | 469 | $ | 441 | 6 | 27 | ||||||||||||||||
Institutional |
551 | 624 | 464 | 449 | 435 | (12 | ) | 27 | ||||||||||||||||||||
Retail |
527 | 541 | 456 | 446 | 442 | (3 | ) | 19 | ||||||||||||||||||||
Private Client Services |
266 | 254 | 247 | 256 | 266 | 5 | - | |||||||||||||||||||||
Total Net Revenue |
$ | 1,904 | $ | 1,947 | $ | 1,636 | $ | 1,620 | $ | 1,584 | (2 | ) | 20 | |||||||||||||||
FINANCIAL RATIOS |
||||||||||||||||||||||||||||
ROE |
46 | % | 46 | % | 39 | % | 39 | % | 36 | % | ||||||||||||||||||
Overhead Ratio |
65 | 66 | 68 | 67 | 69 | |||||||||||||||||||||||
Pretax Margin Ratio (a) |
36 | 33 | 34 | 34 | 31 | |||||||||||||||||||||||
BUSINESS METRICS |
||||||||||||||||||||||||||||
Number of: |
||||||||||||||||||||||||||||
Client Advisors |
1,533 | 1,506 | 1,489 | 1,486 | 1,499 | 2 | 2 | |||||||||||||||||||||
Retirement Planning Services Participants |
1,423,000 | 1,362,000 | 1,372,000 | 1,361,000 | 1,327,000 | 4 | 7 | |||||||||||||||||||||
% of Customer Assets in 4 & 5 Star Funds (b) |
61 | % | 58 | % | 58 | % | 56 | % | 54 | % | 5 | 13 | ||||||||||||||||
% of AUM in 1st and 2nd Quartiles: (c) |
||||||||||||||||||||||||||||
1 Year |
76 | % | 83 | % | 79 | % | 71 | % | 72 | % | (8 | ) | 6 | |||||||||||||||
3 Years |
76 | % | 77 | % | 75 | % | 75 | % | 75 | % | (1 | ) | 1 | |||||||||||||||
5 Years |
81 | % | 79 | % | 80 | % | 81 | % | 75 | % | 3 | 8 | ||||||||||||||||
SELECTED BALANCE SHEETS DATA (Average) |
||||||||||||||||||||||||||||
Total Assets |
$ | 45,816 | $ | 46,716 | $ | 43,524 | $ | 43,228 | $ | 41,012 | (2 | ) | 12 | |||||||||||||||
Loans (d) |
25,640 | 28,917 | 26,770 | 25,807 | 24,482 | (11 | ) | 5 | ||||||||||||||||||||
Deposits |
54,816 | 51,341 | 51,395 | 51,583 | 48,066 | 7 | 14 | |||||||||||||||||||||
Equity |
3,750 | 3,500 | 3,500 | 3,500 | 3,500 | 7 | 7 | |||||||||||||||||||||
Headcount |
13,568 | 13,298 | 12,761 | 12,786 | 12,511 | 2 | 8 | |||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS |
||||||||||||||||||||||||||||
Net Charge-offs (Recoveries) |
$ | - | $ | 2 | $ | (24 | ) | $ | (4 | ) | $ | 7 | NM | NM | ||||||||||||||
Nonperforming Loans |
34 | 39 | 57 | 76 | 79 | (13 | ) | (57 | ) | |||||||||||||||||||
Allowance for Loan Losses |
114 | 121 | 112 | 117 | 119 | (6 | ) | (4 | ) | |||||||||||||||||||
Allowance for Lending Related Commitments |
5 | 6 | 4 | 3 | 3 | (17 | ) | 67 | ||||||||||||||||||||
Net Charge-off (Recovery) Rate |
- | % | 0.03 | % | (0.36 | )% | (0.06 | )% | 0.12 | % | ||||||||||||||||||
Allowance for Loan Losses to Average Loans |
0.44 | 0.42 | 0.42 | 0.45 | 0.49 | |||||||||||||||||||||||
Allowance for Loan Losses to Nonperforming Loans |
335 | 310 | 196 | 154 | 151 | |||||||||||||||||||||||
Nonperforming Loans to Average Loans |
0.13 | 0.13 | 0.21 | 0.29 | 0.32 |
(a) | 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. | |
(b) | Derived from Morningstar for the United States; Micropal for the United Kingdom, Luxembourg, Hong Kong and Taiwan; and Nomura for Japan. | |
(c) | Quartile rankings sourced from Lipper for the United States and Taiwan; Micropal for the United Kingdom, Luxembourg, Hong Kong and Taiwan; and Nomura for Japan. | |
(d) | As of January 1, 2007, $5.3 billion of held-for-investment prime mortgage loans were transferred from AM to Treasury within the Corporate segment. Although the loans, together with the responsibility for the investment management of the portfolio, were transferred to Treasury, the transfer has no impact on the financial results of AM. |
Page 21
JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS, CONTINUED
(in billions) |
Mar 31, 2007 | ||||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||||
Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Mar 31 | ||||||||||||||||||||||
2007 | 2006 | 2006 | 2006 | 2006 | 2006 | 2006 | ||||||||||||||||||||||
Assets by Asset Class |
||||||||||||||||||||||||||||
Liquidity (a) |
$ | 318 | $ | 311 | $ | 281 | $ | 247 | $ | 236 | 2 | % | 35 | % | ||||||||||||||
Fixed Income |
180 | 175 | 171 | 172 | 166 | 3 | 8 | |||||||||||||||||||||
Equities & Balanced |
446 | 427 | 392 | 393 | 397 | 4 | 12 | |||||||||||||||||||||
Alternatives |
109 | 100 | 91 | 86 | 74 | 9 | 47 | |||||||||||||||||||||
TOTAL ASSETS UNDER MANAGEMENT |
1,053 | 1,013 | 935 | 898 | 873 | 4 | 21 | |||||||||||||||||||||
Custody / Brokerage / Administration / Deposits |
342 | 334 | 330 | 315 | 324 | 2 | 6 | |||||||||||||||||||||
TOTAL ASSETS UNDER SUPERVISION |
$ | 1,395 | $ | 1,347 | $ | 1,265 | $ | 1,213 | $ | 1,197 | 4 | 17 | ||||||||||||||||
Assets by Client Segment |
||||||||||||||||||||||||||||
Institutional |
$ | 550 | $ | 538 | $ | 503 | $ | 484 | $ | 468 | 2 | 18 | ||||||||||||||||
Private Bank |
170 | 159 | 150 | 143 | 137 | 7 | 24 | |||||||||||||||||||||
Retail |
274 | 259 | 228 | 219 | 214 | 6 | 28 | |||||||||||||||||||||
Private Client Services |
59 | 57 | 54 | 52 | 54 | 4 | 9 | |||||||||||||||||||||
TOTAL ASSETS UNDER MANAGEMENT |
$ | 1,053 | $ | 1,013 | $ | 935 | $ | 898 | $ | 873 | 4 | 21 | ||||||||||||||||
Institutional |
$ | 551 | $ | 539 | $ | 505 | $ | 486 | $ | 471 | 2 | 17 | ||||||||||||||||
Private Bank |
374 | 357 | 347 | 331 | 332 | 5 | 13 | |||||||||||||||||||||
Retail |
361 | 343 | 309 | 295 | 291 | 5 | 24 | |||||||||||||||||||||
Private Client Services |
109 | 108 | 104 | 101 | 103 | 1 | 6 | |||||||||||||||||||||
TOTAL ASSETS UNDER SUPERVISION |
$ | 1,395 | $ | 1,347 | $ | 1,265 | $ | 1,213 | $ | 1,197 | 4 | 17 | ||||||||||||||||
Assets by Geographic Region |
||||||||||||||||||||||||||||
U.S. / Canada |
$ | 664 | $ | 630 | $ | 596 | $ | 577 | $ | 564 | 5 | 18 | ||||||||||||||||
International |
389 | 383 | 339 | 321 | 309 | 2 | 26 | |||||||||||||||||||||
TOTAL ASSETS UNDER MANAGEMENT |
$ | 1,053 | $ | 1,013 | $ | 935 | $ | 898 | $ | 873 | 4 | 21 | ||||||||||||||||
U.S. / Canada |
$ | 929 | $ | 889 | $ | 855 | $ | 828 | $ | 822 | 4 | 13 | ||||||||||||||||
International |
466 | 458 | 410 | 385 | 375 | 2 | 24 | |||||||||||||||||||||
TOTAL ASSETS UNDER SUPERVISION |
$ | 1,395 | $ | 1,347 | $ | 1,265 | $ | 1,213 | $ | 1,197 | 4 | 17 | ||||||||||||||||
Mutual Funds Assets by Asset Class |
||||||||||||||||||||||||||||
Liquidity |
$ | 257 | $ | 255 | $ | 221 | $ | 178 | $ | 167 | 1 | 54 | ||||||||||||||||
Fixed Income |
48 | 46 | 45 | 47 | 48 | 4 | - | |||||||||||||||||||||
Equity |
219 | 206 | 184 | 194 | 189 | 6 | 16 | |||||||||||||||||||||
TOTAL MUTUAL FUND ASSETS |
$ | 524 | $ | 507 | $ | 450 | $ | 419 | $ | 404 | 3 | 30 | ||||||||||||||||
(a) | Third quarter 2006 data reflects the reclassification of $19 billion of assets under management into liquidity from other asset classes. Prior period data were not restated. |
Page 22
JPMORGAN CHASE & CO. | ||
ASSET MANAGEMENT | ||
FINANCIAL HIGHLIGHTS, CONTINUED | ||
(in billions) |
QUARTERLY TRENDS | ||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | ||||||||||||||||
ASSETS UNDER SUPERVISION (continued) |
||||||||||||||||||||
Assets Under Management Rollforward |
||||||||||||||||||||
Beginning Balance |
$ | 1,013 | $ | 935 | $ | 898 | $ | 873 | $ | 847 | ||||||||||
Flows: |
||||||||||||||||||||
Liquidity |
7 | 24 | 15 | 10 | (5 | ) | ||||||||||||||
Fixed Income |
2 | 1 | 4 | 6 | - | |||||||||||||||
Equities, Balanced & Alternatives |
10 | 5 | 3 | 13 | 13 | |||||||||||||||
Market / Performance / Other Impacts |
21 | 48 | 15 | (4 | ) | 18 | ||||||||||||||
TOTAL ASSETS UNDER MANAGEMENT |
$ | 1,053 | $ | 1,013 | $ | 935 | $ | 898 | $ | 873 | ||||||||||
Assets Under Supervision Rollforward |
||||||||||||||||||||
Beginning Balance |
$ | 1,347 | $ | 1,265 | $ | 1,213 | $ | 1,197 | $ | 1,149 | ||||||||||
Net Asset Flows |
27 | 31 | 26 | 33 | 12 | |||||||||||||||
Market / Performance / Other Impacts |
21 | 51 | 26 | (17 | ) | 36 | ||||||||||||||
TOTAL ASSETS UNDER SUPERVISION |
$ | 1,395 | $ | 1,347 | $ | 1,265 | $ | 1,213 | $ | 1,197 | ||||||||||
Page 23
JPMORGAN CHASE & CO. | ||
CORPORATE | ||
FINANCIAL HIGHLIGHTS | ||
(in millions, except headcount data) |
QUARTERLY TRENDS | |||||||||||||||||||||||||||||
1Q07 Change | |||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | |||||||||||||||||||||||
INCOME STATEMENT |
|||||||||||||||||||||||||||||
REVENUE |
|||||||||||||||||||||||||||||
Principal Transactions (a) (b) (c) |
$ | 1,325 | $ | 236 | $ | 195 | $ | 551 | $ | 199 | 461 | % | NM | ||||||||||||||||
Securities Gains (Losses) |
(8 | ) | 18 | 24 | (492 | ) | (158 | ) | NM | 95 | % | ||||||||||||||||||
All Other Income (d) |
68 | 27 | 125 | 231 | 102 | 152 | (33 | ) | |||||||||||||||||||||
Noninterest Revenue |
1,385 | 281 | 344 | 290 | 143 | 393 | NM | ||||||||||||||||||||||
Net Interest Income |
(117 | ) | (87 | ) | (55 | ) | (355 | ) | (547 | ) | (34 | ) | 79 | ||||||||||||||||
TOTAL NET REVENUE |
1,268 | 194 | 289 | (65 | ) | (404 | ) | NM | NM | ||||||||||||||||||||
Provision for Credit Losses |
3 | (2 | ) | 1 | - | - | NM | NM | |||||||||||||||||||||
NONINTEREST EXPENSE |
|||||||||||||||||||||||||||||
Compensation Expense (b) |
776 | 434 | 737 | 770 | 685 | 79 | 13 | ||||||||||||||||||||||
Noncompensation Expense (c) (e) |
556 | 678 | 731 | 336 | 612 | (18 | ) | (9 | ) | ||||||||||||||||||||
Merger Costs |
62 | 100 | 48 | 86 | 71 | (38 | ) | (13 | ) | ||||||||||||||||||||
Subtotal |
1,394 | 1,212 | 1,516 | 1,192 | 1,368 | 15 | 2 | ||||||||||||||||||||||
Net Expenses Allocated to Other Businesses |
(1,040 | ) | (1,037 | ) | (1,035 | ) | (1,036 | ) | (1,033 | ) | - | (1 | ) | ||||||||||||||||
TOTAL NONINTEREST EXPENSE |
354 | 175 | 481 | 156 | 335 | 102 | 6 | ||||||||||||||||||||||
Income (Loss) from continuing operations before
Income Tax Expense |
911 | 21 | (193 | ) | (221 | ) | (739 | ) | NM | NM | |||||||||||||||||||
Income Tax Expense (Benefit) (f) |
280 | (520 | ) | (159 | ) | (181 | ) | (319 | ) | NM | NM | ||||||||||||||||||
Income (Loss) from Continuing Operations |
$ | 631 | $ | 541 | $ | (34 | ) | $ | (40 | ) | $ | (420 | ) | 17 | NM | ||||||||||||||
Income from Discontinued Operations (after-tax) (g) |
- | 620 | 65 | 56 | 54 | NM | NM | ||||||||||||||||||||||
NET INCOME (LOSS) |
$ | 631 | $ | 1,161 | $ | 31 | $ | 16 | $ | (366 | ) | (46 | ) | NM | |||||||||||||||
MEMO: |
|||||||||||||||||||||||||||||
TOTAL NET REVENUE |
|||||||||||||||||||||||||||||
Private Equity (a) (b) |
$ | 1,253 | $ | 250 | $ | 188 | $ | 500 | $ | 204 | 401 | NM | |||||||||||||||||
Treasury and Other Corporate (c) (d) |
15 | (56 | ) | 101 | (565 | ) | (608 | ) | NM | NM | |||||||||||||||||||
TOTAL NET REVENUE |
$ | 1,268 | $ | 194 | $ | 289 | $ | (65 | ) | $ | (404 | ) | NM | NM | |||||||||||||||
NET INCOME (LOSS) |
|||||||||||||||||||||||||||||
Private Equity (a) (b) |
$ | 698 | $ | 136 | $ | 95 | $ | 293 | $ | 103 | 413 | NM | |||||||||||||||||
Treasury and Other Corporate (c) (d) (e) (f) |
(29 | ) | 467 | (99 | ) | (280 | ) | (479 | ) | NM | 94 | ||||||||||||||||||
Merger Costs |
(38 | ) | (62 | ) | (30 | ) | (53 | ) | (44 | ) | 39 | 14 | |||||||||||||||||
Income (Loss) from Continuing Operations |
$ | 631 | $ | 541 | $ | (34 | ) | $ | (40 | ) | $ | (420 | ) | 17 | NM | ||||||||||||||
Income from Discontinued Operations (after-tax) |
- | 620 | 65 | 56 | 54 | NM | NM | ||||||||||||||||||||||
TOTAL NET INCOME (LOSS) |
$ | 631 | $ | 1,161 | $ | 31 | $ | 16 | $ | (366 | ) | (46 | ) | NM | |||||||||||||||
Headcount |
23,702 | 23,242 | 25,748 | 27,100 | 27,390 | 2 | (13 | ) |
(a) | As a result of the adoption on January 1, 2007 of SFAS 157, Corporate recognized a benefit of $464 million in Net revenue, in the current quarter, relating to valuation adjustments on nonpublic private equity investments. | |
(b) | The first quarter of 2007 includes the reclassification of certain private equity carried interest from Net revenue to Compensation expense. | |
(c) | Certain transaction costs that were previously reported in Revenue have been reclassified to Noninterest expense. Revenue and Noninterest expense have been reclassified for all periods presented. | |
(d) | Includes a gain of $103 million in the second quarter of 2006 related to the initial public offering of MasterCard. | |
(e) | Includes insurance recoveries related to settlement of the Enron and WorldCom class action litigations and for certain other material legal proceedings of $137 million, $17 million, $260 million and $98 million for the quarters ended December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. | |
(f) | Includes tax benefit of $359 million related to audit resolutions in the fourth quarter of 2006. | |
(g) | On October 1, 2006, the Firm completed the exchange of selected corporate trust businesses, including trustee, paying agent, loan agency and document management services for the consumer, business banking and middle-market banking businesses of The Bank of New York. The results of operations of these corporate trust businesses are being reported as discontinued operations for each of the periods presented. Includes $622 million gain on sale in the fourth quarter of 2006. |
Page 24
JPMORGAN CHASE & CO. | ||
CORPORATE | ||
FINANCIAL HIGHLIGHTS, CONTINUED | ||
(in millions, except ratio data) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
SUPPLEMENTAL |
||||||||||||||||||||||||||||
TREASURY |
||||||||||||||||||||||||||||
Securities Gains (Losses) (a) |
$ | (8 | ) | $ | 7 | $ | 24 | $ | (492 | ) | $ | (158 | ) | NM | 95 | % | ||||||||||||
Investment Securities Portfolio (Average) |
86,436 | 80,616 | 68,619 | 63,714 | 39,989 | 7 | % | 116 | ||||||||||||||||||||
Investment Securities Portfolio (Ending) |
88,681 | 82,091 | 77,116 | 61,990 | 46,093 | 8 | 92 | |||||||||||||||||||||
Mortgage Loans (Average) (b) |
25,244 | - | - | - | - | NM | NM | |||||||||||||||||||||
Mortgage Loans (Ending) (b) |
26,499 | - | - | - | - | NM | NM | |||||||||||||||||||||
PRIVATE EQUITY |
||||||||||||||||||||||||||||
Private Equity Gains (Losses) |
||||||||||||||||||||||||||||
Direct Investments |
||||||||||||||||||||||||||||
Realized
Gains |
$ | 723 | $ | 254 | $ | 194 | $ | 568 | $ | 207 | 185 | 249 | ||||||||||||||||
Write-ups / (Write-downs) (c) |
648 | 12 | (21) | (74) | 10 | NM | NM | |||||||||||||||||||||
Mark-to-Market Gains (Losses) |
(127 | ) | (6 | ) | 25 | 49 | 4 | NM | NM | |||||||||||||||||||
Total Direct Investments |
1,244 | 260 | 198 | 543 | 221 | 378 | 463 | |||||||||||||||||||||
Third-Party Fund Investments |
34 | 27 | 28 | 6 | 16 | 26 | 113 | |||||||||||||||||||||
Total Private Equity Gains (d) |
$ | 1,278 | $ | 287 | $ | 226 | $ | 549 | $ | 237 | 345 | 439 | ||||||||||||||||
Private Equity Portfolio Information |
||||||||||||||||||||||||||||
Direct Investments |
||||||||||||||||||||||||||||
Publicly-Held Securities |
||||||||||||||||||||||||||||
Carrying Value |
$ | 389 | $ | 587 | $ | 696 | $ | 589 | $ | 501 | (34 | ) | (22 | ) | ||||||||||||||
Cost |
366 | 451 | 539 | 446 | 395 | (19 | ) | (7 | ) | |||||||||||||||||||
Quoted Public Value |
493 | 831 | 1,022 | 808 | 677 | (41 | ) | (27 | ) | |||||||||||||||||||
Privately-Held Direct Securities |
||||||||||||||||||||||||||||
Carrying Value |
5,294 | 4,692 | 4,241 | 4,321 | 5,077 | 13 | 4 | |||||||||||||||||||||
Cost |
5,574 | 5,795 | 5,482 | 5,647 | 6,501 | (4 | ) | (14 | ) | |||||||||||||||||||
Third-Party Fund Investments |
||||||||||||||||||||||||||||
Carrying Value |
744 | 802 | 682 | 642 | 675 | (7 | ) | 10 | ||||||||||||||||||||
Cost |
1,026 | 1,080 | 1,000 | 963 | 1,000 | (5 | ) | 3 | ||||||||||||||||||||
Total Private Equity Portfolio - Carrying Value |
$ | 6,427 | $ | 6,081 | $ | 5,619 | $ | 5,552 | $ | 6,253 | 6 | 3 | ||||||||||||||||
Total Private Equity Portfolio - Cost |
$ | 6,966 | $ | 7,326 | $ | 7,021 | $ | 7,056 | $ | 7,896 | (5 | ) | (12 | ) | ||||||||||||||
(a) | Losses reflect repositioning of the Treasury investment securities portfolio. Excludes gains/losses on securities used to manage risk associated with MSRs. | |
(b) | As of January 1, 2007, $19.4 billion and $5.3 billion of held-for-investment residential mortgage loans were transferred from RFS and AM, respectively, to the Corporate segment for risk management and reporting purposes. | |
(c) | Private equity gains in the first quarter of 2007 include a fair value adjustment of $464 million related to the adoption of SFAS 157. In addition, the first quarter of 2007 includes the reclassification of certain private equity carried interest from Net revenue to Compensation expense. | |
(d) | Included in Principal Transactions. |
Page 25
Mar 31, 2007 | ||||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||||
Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Mar 31 | ||||||||||||||||||||||
2007 | 2006 | 2006 | 2006 | 2006 | 2006 | 2006 | ||||||||||||||||||||||
CREDIT EXPOSURE |
||||||||||||||||||||||||||||
WHOLESALE (a) (b) |
||||||||||||||||||||||||||||
Loans - U.S. |
$ | 108,627 | $ | 118,686 | $ | 123,791 | $ | 125,870 | $ | 118,501 | (8 | )% | (8 | )% | ||||||||||||||
Loans - Non-U.S. |
59,567 | 65,056 | 55,612 | 52,345 | 46,298 | (8 | ) | 29 | ||||||||||||||||||||
TOTAL WHOLESALE LOANS - REPORTED |
168,194 | 183,742 | 179,403 | 178,215 | 164,799 | (8 | ) | 2 | ||||||||||||||||||||
CONSUMER (c) (d) |
||||||||||||||||||||||||||||
Home Equity |
87,741 | 85,730 | 80,399 | 77,826 | 75,241 | 2 | 17 | |||||||||||||||||||||
Mortgage (includes RFS and Corporate) |
46,574 | 59,668 | 60,075 | 60,014 | 57,690 | (22 | ) | (19 | ) | |||||||||||||||||||
Auto Loans and Leases |
40,937 | 41,009 | 40,310 | 42,184 | 44,600 | - | (8 | ) | ||||||||||||||||||||
Credit Card Receivables - Reported |
78,173 | 85,881 | 78,587 | 72,961 | 64,691 | (9 | ) | 21 | ||||||||||||||||||||
Other Loans |
28,146 | 27,097 | 24,770 | 23,904 | 25,060 | 4 | 12 | |||||||||||||||||||||
TOTAL CONSUMER LOANS - REPORTED |
281,571 | 299,385 | 284,141 | 276,889 | 267,282 | (6 | ) | 5 | ||||||||||||||||||||
TOTAL LOANS - REPORTED |
449,765 | 483,127 | 463,544 | 455,104 | 432,081 | (7 | ) | 4 | ||||||||||||||||||||
Credit Card Securitizations |
68,403 | 66,950 | 65,245 | 66,349 | 69,580 | 2 | (2 | ) | ||||||||||||||||||||
TOTAL LOANS - MANAGED |
518,168 | 550,077 | 528,789 | 521,453 | 501,661 | (6 | ) | 3 | ||||||||||||||||||||
Derivative Receivables |
49,647 | 55,601 | 58,265 | 54,075 | 52,750 | (11 | ) | (6 | ) | |||||||||||||||||||
Interests in Purchased Receivables (e) (f) |
- | - | - | - | 29,029 | NM | NM | |||||||||||||||||||||
TOTAL CREDIT-RELATED ASSETS |
567,815 | 605,678 | 587,054 | 575,528 | 583,440 | (6 | ) | (3 | ) | |||||||||||||||||||
Wholesale Lending-Related Commitments (f) |
412,382 | 391,424 | 374,417 | 366,914 | 322,575 | 5 | 28 | |||||||||||||||||||||
TOTAL |
$ | 980,197 | $ | 997,102 | $ | 961,471 | $ | 942,442 | $ | 906,015 | (2 | ) | 8 | |||||||||||||||
Memo: Total by Category |
||||||||||||||||||||||||||||
Total Wholesale Exposure (g) |
$ | 630,223 | $ | 630,767 | $ | 612,085 | $ | 599,204 | $ | 569,153 | - | 11 | ||||||||||||||||
Total Consumer Managed Loans (h) |
349,974 | 366,335 | 349,386 | 343,238 | 336,862 | (4 | ) | 4 | ||||||||||||||||||||
Total |
$ | 980,197 | $ | 997,102 | $ | 961,471 | $ | 942,442 | $ | 906,015 | (2 | ) | 8 | |||||||||||||||
Risk Profile of Wholesale Credit Exposure: |
||||||||||||||||||||||||||||
Investment-Grade (i) |
$ | 487,404 | $ | 490,185 | $ | 481,249 | $ | 464,982 | $ | 445,848 | (1 | ) | 9 | |||||||||||||||
Noninvestment-Grade: (i) |
||||||||||||||||||||||||||||
Noncriticized |
122,759 | 113,049 | 106,831 | 105,383 | 98,354 | 9 | 25 | |||||||||||||||||||||
Criticized Performing |
5,117 | 4,599 | 4,169 | 3,431 | 4,325 | 11 | 18 | |||||||||||||||||||||
Criticized Nonperforming |
263 | 427 | 674 | 783 | 731 | (38 | ) | (64 | ) | |||||||||||||||||||
Total Noninvestment-Grade |
128,139 | 118,075 | 111,674 | 109,597 | 103,410 | 9 | 24 | |||||||||||||||||||||
Held-for-Sale Wholesale Loans |
14,680 | 22,256 | 18,889 | 24,323 | 19,555 | (34 | ) | (25 | ) | |||||||||||||||||||
Purchased Nonperforming Held-for-Sale Wholesale Loans (j) |
- | 251 | 273 | 302 | 340 | NM | NM | |||||||||||||||||||||
Total Wholesale Exposure |
$ | 630,223 | $ | 630,767 | $ | 612,085 | $ | 599,204 | $ | 569,153 | - | 11 | ||||||||||||||||
(a) | Includes Investment Bank, Commercial Banking, Treasury & Securities Services and Asset Management. | |
(b) | Excludes approximately $12.0 billion of loans reclassified from held-for-sale to Trading assets as a result of the adoption of SFAS 159 effective January 1, 2007. | |
(c) | Includes Retail Financial Services, Card Services and residential mortgage loans reported in the Corporate segment. | |
(d) | Excludes $11.6 billion of consumer loans carried at fair value and classified as Trading Assets. | |
(e) | These represent undivided interests in pools of receivables and similar types of assets. | |
(f) | As a result of restructuring certain multi-seller conduits the Firm administers, during the second quarter of 2006, JPMorgan Chase deconsolidated $29 billion of Interests in Purchased Receivables, $3 billion of Loans and $1 billion of Securities, and recorded a related increase of $33 billion of Lending-Related Commitments. | |
(g) | Represents Total Wholesale Loans, Derivative Receivables, Interests in Purchased Receivables and Wholesale Lending-Related Commitments. | |
(h) | Represents Total Consumer Loans plus Credit Card Securitizations, excluding consumer Lending-related commitments. | |
(i) | Excludes HFS loans. | |
(j) | Represents distressed HFS wholesale loans purchased as part of IBs proprietary activities, which are excluded from Nonperforming assets. Beginning January 1, 2007, fair value accounting was elected for this portfolio and the loans were reclassified as Trading Assets. |
Note: | The risk profile is based on JPMorgan Chases internal risk ratings, which generally
correspond to the following ratings as defined by Standard & Poors / Moodys: Investment-Grade: AAA / Aaa to BBB- / Baa3 Noninvestment-Grade: BB+ / Ba1 and below |
Page 26
JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED
(in millions, except ratio data) |
Mar 31, 2007 | ||||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||||
Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Mar 31 | ||||||||||||||||||||||
2007 | 2006 | 2006 | 2006 | 2006 | 2006 | 2006 | ||||||||||||||||||||||
NONPERFORMING ASSETS AND RATIOS |
||||||||||||||||||||||||||||
WHOLESALE LOANS (a) |
||||||||||||||||||||||||||||
Loans - U.S. |
$ | 205 | $ | 309 | $ | 486 | $ | 663 | $ | 572 | (34 | )% | (64 | )% | ||||||||||||||
Loans - Non-U.S. |
62 | 82 | 170 | 148 | 165 | (24 | ) | (62 | ) | |||||||||||||||||||
TOTAL WHOLESALE LOANS-REPORTED (b) |
267 | 391 | 656 | 811 | 737 | (32 | ) | (64 | ) | |||||||||||||||||||
CONSUMER LOANS (c) |
||||||||||||||||||||||||||||
Home Equity |
459 | 454 | 400 | 403 | 451 | 1 | 2 | |||||||||||||||||||||
Mortgage (includes RFS and Corporate) |
960 | 769 | 588 | 503 | 451 | 25 | 113 | |||||||||||||||||||||
Auto Loans and Leases |
95 | 132 | 130 | 133 | 157 | (28 | ) | (39 | ) | |||||||||||||||||||
Credit Card Receivables - Reported |
9 | 9 | 10 | 11 | 12 | - | (25 | ) | ||||||||||||||||||||
Other Loans |
326 | 322 | 286 | 300 | 290 | 1 | 12 | |||||||||||||||||||||
TOTAL CONSUMER LOANS-REPORTED (d) |
1,849 | 1,686 | 1,414 | 1,350 | 1,361 | 10 | 36 | |||||||||||||||||||||
TOTAL LOANS REPORTED (b) |
2,116 | 2,077 | 2,070 | 2,161 | 2,098 | 2 | 1 | |||||||||||||||||||||
Derivative Receivables |
36 | 36 | 35 | 36 | 49 | - | (27 | ) | ||||||||||||||||||||
Assets Acquired in Loan Satisfactions |
269 | 228 | 195 | 187 | 201 | 18 | 34 | |||||||||||||||||||||
TOTAL NONPERFORMING ASSETS (b) |
$ | 2,421 | $ | 2,341 | $ | 2,300 | $ | 2,384 | $ | 2,348 | 3 | 3 | ||||||||||||||||
PURCHASED HELD-FOR-SALE WHOLESALE LOANS (e) |
$ | - | $ | 251 | $ | 273 | $ | 302 | $ | 340 | NM | NM | ||||||||||||||||
TOTAL NONPERFORMING LOANS TO TOTAL LOANS |
0.47 | % | 0.43 | % | 0.45 | % | 0.47 | % | 0.49 | % | ||||||||||||||||||
NONPERFORMING ASSETS BY LOB |
||||||||||||||||||||||||||||
Investment Bank |
$ | 128 | $ | 269 | $ | 456 | $ | 525 | $ | 484 | (52 | ) | (74 | ) | ||||||||||||||
Retail Financial Services |
1,910 | 1,902 | 1,595 | 1,520 | 1,537 | - | 24 | |||||||||||||||||||||
Card Services |
9 | 9 | 10 | 11 | 12 | - | (25 | ) | ||||||||||||||||||||
Commercial Banking |
142 | 122 | 160 | 230 | 214 | 16 | (34 | ) | ||||||||||||||||||||
Treasury & Securities Services |
- | - | 22 | 22 | 22 | NM | NM | |||||||||||||||||||||
Asset Management |
35 | 39 | 57 | 76 | 79 | (10 | ) | (56 | ) | |||||||||||||||||||
Corporate (f) |
197 | - | - | - | - - | NM | NM | |||||||||||||||||||||
TOTAL |
$ | 2,421 | $ | 2,341 | $ | 2,300 | $ | 2,384 | $ | 2,348 | 3 | 3 | ||||||||||||||||
(a) | Includes nonperforming HFS loans of $4 million, $4 million, $21 million, $70 million and $68 million at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. | |
(b) | Excludes purchased HFS wholesale loans. | |
(c) | Includes nonperforming HFS loans of $112 million, $116 million, $24 million, $9 million and $16 million at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. | |
(d) | Excludes Nonperforming assets related to (1) loans eligible for repurchase as well as loans repurchased from GNMA pools that are insured by U.S. government agencies and U.S. government- sponsored enterprises of $1.3 billion, $1.2 billion, $1.1 billion, $1.1 billion and $1.1 billion at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006, and March 31, 2006, respectively, and (2) education 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 $178 million, $219 million, $189 million, $163 million and $156 million for the quarters ended March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts for GNMA and education loans are excluded, as reimbursement is proceeding normally. | |
(e) | Represents distressed HFS wholesale loans purchased as part of IBs proprietary activities, which are excluded from Nonperforming assets. Beginning January 1, 2007, fair value accounting was elected for this portfolio and the loans were reclassified as Trading Assets. | |
(f) | Relates to held-for-investment prime mortgage loans transferred from RFS and AM to the Corporate segment. |
Page 27
JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED
(in millions, except ratio data) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
GROSS CHARGE-OFFS |
||||||||||||||||||||||||||||
Wholesale Loans |
$ | 17 | $ | 76 | $ | 48 | $ | 23 | $ | 39 | (78 | )% | (56 | )% | ||||||||||||||
Consumer (includes RFS and Corporate) |
241 | 266 | 186 | 172 | 178 | (9 | ) | 35 | ||||||||||||||||||||
Credit Card Receivables - Reported |
847 | 801 | 777 | 653 | 665 | 6 | 27 | |||||||||||||||||||||
Total Loans - Reported |
1,105 | 1,143 | 1,011 | 848 | 882 | (3 | ) | 25 | ||||||||||||||||||||
Credit Card Securitizations |
702 | 694 | 702 | 656 | 527 | 1 | 33 | |||||||||||||||||||||
Total Loans - Managed |
1,807 | 1,837 | 1,713 | 1,504 | 1,409 | (2 | ) | 28 | ||||||||||||||||||||
RECOVERIES |
||||||||||||||||||||||||||||
Wholesale Loans |
23 | 48 | 59 | 42 | 59 | (52 | ) | (61 | ) | |||||||||||||||||||
Consumer (includes RFS and Corporate) |
53 | 52 | 58 | 59 | 57 | 2 | (7 | ) | ||||||||||||||||||||
Credit Card Receivables - Reported |
126 | 113 | 104 | 93 | 98 | 12 | 29 | |||||||||||||||||||||
Total Loans - Reported |
202 | 213 | 221 | 194 | 214 | (5 | ) | (6 | ) | |||||||||||||||||||
Credit Card Securitizations |
109 | 101 | 95 | 95 | 78 | 8 | 40 | |||||||||||||||||||||
Total Loans - Managed |
311 | 314 | 316 | 289 | 292 | (1 | ) | 7 | ||||||||||||||||||||
NET CHARGE-OFFS |
||||||||||||||||||||||||||||
Wholesale Loans |
(6 | ) | 28 | (11 | ) | (19 | ) | (20 | ) | NM | 70 | |||||||||||||||||
Consumer (includes RFS and Corporate) |
188 | 214 | 128 | 113 | 121 | (12 | ) | 55 | ||||||||||||||||||||
Credit Card Receivables - Reported |
721 | 688 | 673 | 560 | 567 | 5 | 27 | |||||||||||||||||||||
Total Loans - Reported |
903 | 930 | 790 | 654 | 668 | (3 | ) | 35 | ||||||||||||||||||||
Credit Card Securitizations |
593 | 593 | 607 | 561 | 449 | - | 32 | |||||||||||||||||||||
Total Loans - Managed |
$ | 1,496 | $ | 1,523 | $ | 1,397 | $ | 1,215 | $ | 1,117 | (2 | ) | 34 | |||||||||||||||
NET CHARGE-OFF RATES - ANNUALIZED |
||||||||||||||||||||||||||||
Wholesale Loans (a) |
(0.02 | )% | 0.07 | % | (0.03 | )% | (0.05 | )% | (0.06 | )% | ||||||||||||||||||
Consumer (includes RFS and Corporate) (b) |
0.47 | 0.45 | 0.27 | 0.24 | 0.27 | |||||||||||||||||||||||
Credit Card Receivables - Reported |
3.57 | 3.35 | 3.48 | 3.29 | 3.36 | |||||||||||||||||||||||
Total Loans - Reported (a) (b) |
0.85 | 0.84 | 0.74 | 0.64 | 0.69 | |||||||||||||||||||||||
Credit Card Securitizations |
3.56 | 3.57 | 3.70 | 3.26 | 2.62 | |||||||||||||||||||||||
Total Loans - Managed (a) (b) |
1.22 | 1.20 | 1.13 | 1.02 | 0.98 | |||||||||||||||||||||||
Memo: Credit Card - Managed |
3.57 | 3.45 | 3.58 | 3.28 | 2.99 |
(a) | Average wholesale loans held-for-sale were $13.3 billion, $24.5 billion, $24.4 billion, $20.3 billion and $19.5 billion for the quarters ended March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. Average wholesale loans carried at fair value were $900 million for the quarter ended March 31, 2007. These amounts are not included in the net charge-off rates. | |
(b) | Average consumer loans (excluding Card) held-for-sale were $21.7 billion, $21.2 billion, $14.0 billion, $12.9 billion and $16.4 billion for the quarters ended March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts are not included in the net charge-off rates. |
Page 28
JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED
(in millions, except ratio data) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
SUMMARY OF CHANGES IN THE ALLOWANCE FOR LOAN LOSSES |
||||||||||||||||||||||||||||
Beginning Balance |
$ | 7,279 | $ | 7,056 | $ | 7,076 | $ | 7,275 | $ | 7,090 | 3 | % | 3 | % | ||||||||||||||
Net Charge-Offs |
(903 | ) | (930 | ) | (790 | ) | (654 | ) | (668 | ) | 3 | (35 | ) | |||||||||||||||
Provision for Loan Losses |
979 | 1,085 | 768 | 453 | 847 | (10 | ) | 16 | ||||||||||||||||||||
Other (a)(b) |
(55 | ) | 68 | 2 | 2 | 6 | (99 | ) | (83 | ) | ||||||||||||||||||
Ending Balance |
$ | 7,300 | $ | 7,279 | $ | 7,056 | $ | 7,076 | $ | 7,275 | - | - | ||||||||||||||||
SUMMARY OF CHANGES IN THE ALLOWANCE FOR
LENDING-RELATED COMMITMENTS |
||||||||||||||||||||||||||||
Beginning Balance |
$ | 524 | $ | 468 | $ | 424 | $ | 384 | $ | 400 | 12 | 31 | ||||||||||||||||
Provision for Lending-Related Commitments |
29 | 49 | 44 | 40 | (16 | ) | (41 | ) | NM | |||||||||||||||||||
Other (b) |
- | 7 | - | - | - | NM | NM | |||||||||||||||||||||
Ending Balance |
$ | 553 | $ | 524 | $ | 468 | $ | 424 | $ | 384 | 6 | 44 | ||||||||||||||||
ALLOWANCE COMPONENTS AND RATIOS |
||||||||||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES |
||||||||||||||||||||||||||||
Wholesale
|
||||||||||||||||||||||||||||
Asset Specific |
$ | 54 | $ | 51 | $ | 101 | $ | 160 | $ | 118 | 6 | (54 | ) | |||||||||||||||
Formula - Based |
2,639 | 2,660 | 2,473 | 2,409 | 2,550 | (1 | ) | 3 | ||||||||||||||||||||
Total Wholesale |
2,693 | 2,711 | 2,574 | 2,569 | 2,668 | (1 | ) | 1 | ||||||||||||||||||||
Consumer (c) |
||||||||||||||||||||||||||||
Formula - Based |
4,607 | 4,568 | 4,482 | 4,507 | 4,607 | 1 | - | |||||||||||||||||||||
Total Allowance for Loan Losses |
7,300 | 7,279 | 7,056 | 7,076 | 7,275 | - | - | |||||||||||||||||||||
Allowance for Lending-Related Commitments |
553 | 524 | 468 | 424 | 384 | 6 | 44 | |||||||||||||||||||||
Total Allowance for Credit Losses |
$ | 7,853 | $ | 7,803 | $ | 7,524 | $ | 7,500 | $ | 7,659 | 1 | 3 | ||||||||||||||||
Wholesale Allowance for Loan Losses to Total Wholesale Loans (d) |
1.76 | % | 1.68 | % | 1.61 | % | 1.67 | % | 1.84 | % | ||||||||||||||||||
Consumer Allowance for Loan Losses to Total Consumer Loans (e) |
1.72 | 1.71 | 1.68 | 1.70 | 1.82 | |||||||||||||||||||||||
Allowance for Loan Losses to Total Loans (d) (e) |
1.74 | 1.70 | 1.65 | 1.69 | 1.83 | |||||||||||||||||||||||
Allowance for Loan Losses to Total Nonperforming Loans (f) |
365 | 372 | 348 | 340 | 361 | |||||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES BY LOB |
||||||||||||||||||||||||||||
Investment Bank |
$ | 1,037 | $ | 1,052 | $ | 1,010 | $ | 1,038 | $ | 1,117 | (1 | ) | (7 | ) | ||||||||||||||
Retail Financial Services |
1,453 | 1,392 | 1,306 | 1,321 | 1,333 | 4 | 9 | |||||||||||||||||||||
Card Services |
3,092 | 3,176 | 3,176 | 3,186 | 3,274 | (3 | ) | (6 | ) | |||||||||||||||||||
Commercial Banking |
1,531 | 1,519 | 1,431 | 1,394 | 1,415 | 1 | 8 | |||||||||||||||||||||
Treasury & Securities Services |
11 | 7 | 9 | 9 | 6 | 57 | 83 | |||||||||||||||||||||
Asset Management |
114 | 121 | 112 | 117 | 119 | (6 | ) | (4 | ) | |||||||||||||||||||
Corporate (g) |
62 | 12 | 12 | 11 | 11 | 417 | 464 | |||||||||||||||||||||
Total |
$ | 7,300 | $ | 7,279 | $ | 7,056 | $ | 7,076 | $ | 7,275 | - | - | ||||||||||||||||
(a) | First quarter of 2007 primarily relates to the Firms adoption of SFAS 159 effective January 1, 2007. | |
(b) | Fourth quarter of 2006 reflects The Bank of New York transaction. | |
(c) | Includes RFS, CS and Corporate. | |
(d) | Wholesale loans held-for-sale were $14.7 billion, $22.5 billion, $19.2 billion, $24.6 billion and $19.9 billion at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. Wholesale loans carried at fair value were $900 million for the quarter ended March 31, 2007 These amounts are not included in the allowance coverage ratios. | |
(e) | Consumer loans held-for-sale were $13.4 billion, $32.7 billion, $17.0 billion, $11.8 billion and $14.3 billion at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts are not included in the allowance coverage ratios. | |
(f) | Nonperforming loans held-for-sale were $116 million, $120 million, $45 million, $79 million and $84 million at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, espectively. These amounts are not included in the allowance coverage ratios. | |
(g) | March 31, 2007 includes $50 million associated with held-for-investment prime mortgages transferred from RFS and AM to the Corporate segment and $12 million related to Hurricane Katrina. |
Page 29
JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED
(in millions) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
PROVISION
FOR CREDIT LOSSES |
||||||||||||||||||||||||||||
LOANS |
||||||||||||||||||||||||||||
Investment Bank |
$ | 35 | $ | 50 | $ | (36 | ) | $ | (91 | ) | $ | 189 | (30 | )% | (81 | )% | ||||||||||||
Commercial Banking |
17 | 86 | 55 | (24 | ) | 16 | (80 | ) | 6 | |||||||||||||||||||
Treasury & Securities Services |
4 | (2 | ) | 1 | 4 | (4 | ) | NM | NM | |||||||||||||||||||
Asset Management |
(8 | ) | 12 | (29 | ) | (7 | ) | (6 | ) | NM | (33 | ) | ||||||||||||||||
Corporate |
- | (2 | ) | 1 | - | - | NM | NM | ||||||||||||||||||||
Total Wholesale |
48 | 144 | (8 | ) | (118 | ) | 195 | (67 | ) | (75 | ) | |||||||||||||||||
Retail Financial Services |
292 | 253 | 113 | 101 | 85 | 15 | 244 | |||||||||||||||||||||
Card Services (a) |
636 | 688 | 663 | 470 | 567 | (8 | ) | 12 | ||||||||||||||||||||
Corporate (b) |
3 | - | - | - | - | NM | NM | |||||||||||||||||||||
Total Consumer |
931 | 941 | 776 | 571 | 652 | (1 | ) | 43 | ||||||||||||||||||||
Total Provision for Loan Losses |
979 | 1,085 | 768 | 453 | 847 | (10 | ) | 16 | ||||||||||||||||||||
LENDING-RELATED
COMMITMENTS |
||||||||||||||||||||||||||||
Investment Bank |
$ | 28 | $ | 13 | $ | 43 | $ | 29 | $ | (6 | ) | 115 | NM | |||||||||||||||
Commercial Banking |
- | 25 | (1 | ) | 12 | (9 | ) | NM | NM | |||||||||||||||||||
Treasury & Securities Services |
2 | - | - | - | - | NM | NM | |||||||||||||||||||||
Asset Management |
(1 | ) | 2 | 1 | - | (1 | ) | NM | - | |||||||||||||||||||
Total Wholesale |
29 | 40 | 43 | 41 | (16 | ) | (28 | ) | NM | |||||||||||||||||||
Retail Financial Services |
- | 9 | 1 | (1 | ) | - | NM | NM | ||||||||||||||||||||
Card Services |
- | - | - | - | - | NM | NM | |||||||||||||||||||||
Total Consumer |
- | 9 | 1 | (1 | ) | - | NM | NM | ||||||||||||||||||||
Total Provision for Lending-Related Commitments |
29 | 49 | 44 | 40 | (16 | ) | (41 | ) | NM | |||||||||||||||||||
TOTAL PROVISION FOR CREDIT LOSSES |
||||||||||||||||||||||||||||
Investment Bank |
$ | 63 | $ | 63 | $ | 7 | $ | (62 | ) | $ | 183 | - | (66 | ) | ||||||||||||||
Commercial Banking |
17 | 111 | 54 | (12 | ) | 7 | (85 | ) | 143 | |||||||||||||||||||
Treasury & Securities Services |
6 | (2 | ) | 1 | 4 | (4 | ) | NM | NM | |||||||||||||||||||
Asset Management |
(9 | ) | 14 | (28 | ) | (7 | ) | (7 | ) | NM | (29 | ) | ||||||||||||||||
Corporate |
- | (2 | ) | 1 | - | - | NM | NM | ||||||||||||||||||||
Total Wholesale |
77 | 184 | 35 | (77 | ) | 179 | (58 | ) | (57 | ) | ||||||||||||||||||
Retail Financial Services |
292 | 262 | 114 | 100 | 85 | 11 | 244 | |||||||||||||||||||||
Card Services (a) |
636 | 688 | 663 | 470 | 567 | (8 | ) | 12 | ||||||||||||||||||||
Corporate (b) |
3 | - | - | - | - | NM | NM | |||||||||||||||||||||
Total Consumer |
931 | 950 | 777 | 570 | 652 | (2 | ) | 43 | ||||||||||||||||||||
Total Provision for Credit Losses |
1,008 | 1,134 | 812 | 493 | 831 | (11 | ) | 21 | ||||||||||||||||||||
Securitized Credit Losses |
593 | 593 | 607 | 561 | 449 | - | 32 | |||||||||||||||||||||
Managed Provision for Credit Losses |
$ | 1,601 | $ | 1,727 | $ | 1,419 | $ | 1,054 | $ | 1,280 | (7 | ) | 25 | |||||||||||||||
(a) | Second quarter of 2006 includes a $90 million release of a $100 million special provision, originally recorded in the third quarter of 2005, related to Hurricane Katrina. | |
(b) | Includes amounts related to held-for-investment prime mortgages transferred from RFS and AM to the Corporate segment. |
Page 30
JPMORGAN CHASE & CO. CAPITAL
|
||
(in millions, except per share and ratio data) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
COMMON SHARES OUTSTANDING |
||||||||||||||||||||||||||||
Weighted - Average Basic Shares Outstanding |
3,456.4 | 3,465.3 | 3,468.6 | 3,473.8 | 3,472.7 | - | % | - | % | |||||||||||||||||||
Weighted - Average Diluted Shares Outstanding |
3,559.5 | 3,578.6 | 3,574.0 | 3,572.2 | 3,570.8 | (1 | ) | - | ||||||||||||||||||||
Common Shares Outstanding - at Period End |
3,416.3 | 3,461.7 | 3,467.5 | 3,470.6 | 3,473.0 | (1 | ) | (2 | ) | |||||||||||||||||||
Cash Dividends Declared per Share |
$ | 0.34 | $ | 0.34 | $ | 0.34 | $ | 0.34 | $ | 0.34 | - | - | ||||||||||||||||
Book Value per Share |
34.45 | 33.45 | 32.75 | 31.89 | 31.19 | 3 | 10 | |||||||||||||||||||||
Dividend Payout (a) |
25 | % | 27 | % | 37 | % | 35 | % | 39 | % | ||||||||||||||||||
NET INCOME |
$ | 4,787 | $ | 4,526 | $ | 3,297 | $ | 3,540 | $ | 3,081 | 6 | 55 | ||||||||||||||||
Preferred Dividends |
- | - | - | - | 4 | NM | NM | |||||||||||||||||||||
Net Income Applicable to Common Stock |
$ | 4,787 | $ | 4,526 | $ | 3,297 | $ | 3,540 | $ | 3,077 | 6 | 56 | ||||||||||||||||
INCOME PER SHARE |
||||||||||||||||||||||||||||
Basic Earnings per Share |
||||||||||||||||||||||||||||
Income from continuing operations |
$ | 1.38 | $ | 1.13 | $ | 0.93 | $ | 1.00 | $ | 0.87 | 22 | 59 | ||||||||||||||||
Net Income |
1.38 | 1.31 | 0.95 | 1.02 | 0.89 | 5 | 55 | |||||||||||||||||||||
Diluted Earnings per Share |
||||||||||||||||||||||||||||
Income from continuing operations |
$ | 1.34 | $ | 1.09 | $ | 0.90 | $ | 0.98 | $ | 0.85 | 23 | 58 | ||||||||||||||||
Net Income |
1.34 | 1.26 | 0.92 | 0.99 | 0.86 | 6 | 56 | |||||||||||||||||||||
SHARE
PRICE |
||||||||||||||||||||||||||||
High |
$ | 51.95 | $ | 49.00 | $ | 47.49 | $ | 46.80 | $ | 42.43 | 6 | 22 | ||||||||||||||||
Low |
45.91 | 45.51 | 40.40 | 39.33 | 37.88 | 1 | 21 | |||||||||||||||||||||
Close |
48.38 | 48.30 | 46.96 | 42.00 | 41.64 | - | 16 | |||||||||||||||||||||
Market Capitalization |
165,280 | 167,199 | 162,835 | 145,764 | 144,614 | (1 | ) | 14 | ||||||||||||||||||||
STOCK REPURCHASE PROGRAM (b) (c) |
||||||||||||||||||||||||||||
Aggregate Repurchases |
$ | 4,000.9 | $ | 1,000.3 | $ | 900.0 | $ | 745.5 | $ | 1,290.3 | 300 | 210 | ||||||||||||||||
Common Shares Repurchased |
80.9 | 21.1 | 20.0 | 17.7 | 31.8 | 283 | 154 | |||||||||||||||||||||
Average Purchase Price |
$ | 49.45 | $ | 47.33 | $ | 44.88 | $ | 42.24 | $ | 40.54 | 4 | 22 | ||||||||||||||||
CAPITAL RATIOS |
||||||||||||||||||||||||||||
Tier 1 Capital |
$ | 82,538 | (d) | $ | 81,055 | $ | 79,830 | $ | 74,983 | $ | 73,085 | 2 | 13 | |||||||||||||||
Total Capital |
115,258 | (d) | 115,265 | 111,670 | 106,283 | 103,800 | - | 11 | ||||||||||||||||||||
Risk - Weighted Assets |
974,530 | (d) | 935,909 | 926,455 | 884,228 | 858,080 | 4 | 14 | ||||||||||||||||||||
Adjusted Average Assets |
1,324,145 | (d) | 1,308,699 | 1,257,364 | 1,282,233 | 1,195,231 | 1 | 11 | ||||||||||||||||||||
Tier 1 Capital Ratio |
8.5 | %(d) | 8.7 | % | 8.6 | % | 8.5 | % | 8.5 | % | ||||||||||||||||||
Total Capital Ratio |
11.8 | (d) | 12.3 | 12.1 | 12.0 | 12.1 | ||||||||||||||||||||||
Tier 1 Leverage Ratio |
6.2 | (d) | 6.2 | 6.3 | 5.8 | 6.1 | ||||||||||||||||||||||
INTANGIBLE
ASSETS (PERIOD - END) |
||||||||||||||||||||||||||||
Goodwill |
$ | 45,063 | $ | 45,186 | $ | 43,372 | $ | 43,498 | $ | 43,899 | - | 3 | ||||||||||||||||
Mortgage Servicing Rights |
7,937 | 7,546 | 7,378 | 8,247 | 7,539 | 5 | 5 | |||||||||||||||||||||
Purchased Credit Card Relationships |
2,758 | 2,935 | 2,982 | 3,138 | 3,243 | (6 | ) | (15 | ) | |||||||||||||||||||
All Other Intangibles |
4,205 | 4,371 | 4,078 | 4,231 | 4,832 | (4 | ) | (13 | ) | |||||||||||||||||||
Total Intangibles |
$ | 59,963 | $ | 60,038 | $ | 57,810 | $ | 59,114 | $ | 59,513 | - | 1 | ||||||||||||||||
(a) | Based on Net income amounts. | |
(b) | The Board of Directors has authorized the repurchase of up to $10.0 billion of the Firms common shares. The new authorization commences April 19, 2007, and replaces the Firms previous $8.0 billion repurchase program authorized on March 21, 2006. As of the close of business on April 17, 2007, there was approximately $850 million remaining on the March 2006 authorization. | |
(c) | Excludes commission costs. | |
(d) | Estimated. |
Page 31
JPMORGAN CHASE & CO. Glossary of Terms
|
Page 32
JPMORGAN CHASE & CO. Line of Business Metrics
|
Page 33
JPMORGAN CHASE & CO. Line of Business Metrics
(continued)
|
Page 34