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) |
Exhibit Number | Description of Exhibit | |
12.1
|
JPMorgan Chase & Co. Computation of Ratio of Earnings to Fixed Charges | |
12.2
|
JPMorgan Chase & Co. Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividend Requirements | |
99.1
|
JPMorgan Chase & Co. Earnings Release Third Quarter 2011 Results | |
99.2
|
JPMorgan Chase & Co. Earnings Release Financial Supplement Third Quarter 2011 |
2
JPMORGAN CHASE & CO. (Registrant) |
||||
By: | /s/ Shannon S. Warren | |||
Shannon S. Warren |
||||
Managing Director and Corporate Controller [Principal Accounting Officer] |
||||
3
Exhibit Number | Description of Exhibit | |
12.1
|
JPMorgan Chase & Co. Computation of Ratio of Earnings to Fixed Charges | |
12.2
|
JPMorgan Chase & Co. Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividend Requirements | |
99.1
|
JPMorgan Chase & Co. Earnings Release Third Quarter 2011 Results | |
99.2
|
JPMorgan Chase & Co. Earnings Release Financial Supplement Third Quarter 2011 |
4
Nine months ended September 30, (in millions, except ratios) | 2011 | |||
Excluding interest on deposits |
||||
Income before income tax expense |
$ | 22,002 | ||
Fixed charges: |
||||
Interest expense |
7,643 | |||
One-third of rents, net of income from subleases (a) |
421 | |||
Total fixed charges |
8,064 | |||
Less: Equity in undistributed income of affiliates |
(29 | ) | ||
Income before income tax expense and fixed charges, excluding capitalized interest |
$ | 30,037 | ||
Fixed charges, as above |
$ | 8,064 | ||
Ratio of earnings to fixed charges |
3.72 | |||
Including interest on deposits |
||||
Fixed charges, as above |
$ | 8,064 | ||
Add: Interest on deposits |
3,038 | |||
Total fixed charges and interest on deposits |
$ | 11,102 | ||
Income before income tax expense and fixed charges, excluding capitalized interest, as above |
$ | 30,037 | ||
Add: Interest on deposits |
3,038 | |||
Total income before income tax expense, fixed charges and interest on deposits |
$ | 33,075 | ||
Ratio of earnings to fixed charges |
2.98 | |||
(a) | The proportion deemed representative of the interest factor. |
Nine months ended September 30, (in millions, except ratios) | 2011 | |||
Excluding interest on deposits |
||||
Income before income tax expense |
$ | 22,002 | ||
Fixed charges: |
||||
Interest expense |
7,643 | |||
One-third of rents, net of income from subleases (a) |
421 | |||
Total fixed charges |
8,064 | |||
Less: Equity in undistributed income of affiliates |
(29 | ) | ||
Income before income tax expense and fixed charges, excluding capitalized interest |
$ | 30,037 | ||
Fixed charges, as above |
$ | 8,064 | ||
Preferred stock dividends (pre-tax) |
684 | |||
Fixed charges including preferred stock dividends |
$ | 8,748 | ||
Ratio of earnings to fixed charges and preferred stock dividend requirements |
3.43 | |||
Including interest on deposits |
||||
Fixed charges including preferred stock dividends, as above |
$ | 8,748 | ||
Add: Interest on deposits |
3,038 | |||
Total fixed charges including preferred stock dividends and interest on deposits |
$ | 11,786 | ||
Income before income tax expense and fixed charges, excluding capitalized interest, as above |
$ | 30,037 | ||
Add: Interest on deposits |
3,038 | |||
Total income before income tax expense, fixed charges and interest on deposits |
$ | 33,075 | ||
Ratio of earnings to fixed charges and preferred stock dividend requirements |
2.81 | |||
(a) | The proportion deemed representative of the interest factor. |
JPMorgan Chase & Co. 270 Park Avenue, New York, NY 10017-2070 NYSE symbol: JPM www.jpmorganchase.com |
| Challenging investment banking and capital markets environment; Firm maintained its #1 ranking for Global Investment Banking Fees year-to-date | |
| Consumer & Business Banking reported solid revenue, up 6% compared with prior year, and deposits up 7%; added 60 new branches during the quarter | |
| Credit Card sales volume2 up 10%; net charge-offs declined as expected | |
| Commercial Banking reported solid revenue, with strong loan growth, up 9%, and record deposit2 balances, up 31% | |
| Treasury & Securities Services reported strong growth in deposit2 balances, up 41% | |
| Third-quarter results included the following significant items:(*) |
- | $1.9 billion pretax ($0.29 per share after-tax) benefit from debit valuation adjustment (DVA) gains in the Investment Bank, resulting from widening of the Firms credit spreads | ||
- | $542 million pretax ($0.09 per share after-tax) Private Equity loss | ||
- | $1.0 billion pretax ($0.15 per share after-tax) additional litigation expense, predominantly for mortgage-related matters, in Corporate |
| Fortress balance sheet maintained: |
- | Basel I Tier 1 Common1 of $120 billion, ratio of 9.9%; estimated Basel III Tier 1 Common1 ratio of 7.7% | ||
- | Repurchased $4.4 billion of common stock2 during the third quarter | ||
- | Credit reserves at $29.0 billion; loan loss coverage ratio 3.74% of total loans1 |
| Over $1.3 trillion in new and renewed credit provided to and capital raised for consumers, corporations, small businesses, municipalities and not-for-profits year-to-date: |
- | Small business loan originations of $12.6 billion, up 71% compared with prior year-to-date and 133% compared with the same period in 2009 | ||
- | Middle-market loans of $41.5 billion, up 18% compared with prior year | ||
- | Trade finance loans of $30.1 billion, up 69% compared with prior year |
| Increased U.S. employee headcount year-to-date by more than 13,200; over 2,200 military veteran hires year-to-date |
Investor Contact: Lauren Tyler (212) 270-7325 | Media Contact: Joe Evangelisti (212) 270-7438 |
1 | Presented on a managed basis. For notes on managed basis and other non-GAAP measures, see page 13. | |
2 | For additional notes on financial measures, see pages 13 and 14. | |
(*) | The Firm also recognized a $691 million pretax net loss ($0.11 per share after-tax), including hedges, from credit valuation adjustments (CVA) on derivative assets, due to the widening of credit spreads for the Firms counterparties. The Firm actively manages its exposure to CVA. |
(*) | The Firm also recognized a $691 million pretax net loss ($0.11 per share after-tax), including hedges, from credit valuation adjustments (CVA) on derivative assets, due to the widening of credit spreads for the Firms counterparties. The Firm actively manages its exposure to CVA. |
2
Results for IB | 2Q11 | 3Q10 | ||||||||||||||||||||||||||
($ millions) | 3Q11 | 2Q11 | 3Q10 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | |||||||||||||||||||||
Net Revenue |
$ | 6,369 | $ | 7,314 | $ | 5,353 | ($945 | ) | (13 | )% | $ | 1,016 | 19 | % | ||||||||||||||
Provision for Credit Losses |
54 | (183 | ) | (142 | ) | 237 | NM | 196 | NM | |||||||||||||||||||
Noninterest Expense |
3,799 | 4,332 | 3,704 | (533 | ) | (12 | ) | 95 | 3 | |||||||||||||||||||
Net Income |
$ | 1,636 | $ | 2,057 | $ | 1,286 | ($421 | ) | (20 | )% | $ | 350 | 27 | % |
3
| Ranked #1 in Global Investment Banking Fees for the nine months ended September 30, 2011. | ||
| Ranked #1 in Global Debt, Equity and Equity-related; #1 in Global Syndicated Loans; #2 in Global Announced M&A; #1 in Global Long-Term Debt; and #4 in Global Equity and Equity-related, based on volume, for the nine months ended September 30, 2011. | ||
| Return on equity was 16% on $40.0 billion of average allocated capital. | ||
| End-of-period total loans were $60.5 billion, up 13% from the prior year and 2% from the prior quarter. |
Results for RFS | 2Q11 | 3Q10 | ||||||||||||||||||||||||||
($ millions) | 3Q11 | 2Q11 | 3Q10 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | |||||||||||||||||||||
Net Revenue |
$ | 7,535 | $ | 7,142 | $ | 6,814 | $ | 393 | 6 | % | $ | 721 | 11 | % | ||||||||||||||
Provision for Credit Losses |
1,027 | 994 | 1,397 | 33 | 3 | (370 | ) | (26 | ) | |||||||||||||||||||
Noninterest Expense |
4,565 | 5,271 | 4,170 | (706 | ) | (13 | ) | 395 | 9 | |||||||||||||||||||
Net Income |
$ | 1,161 | $ | 383 | $ | 716 | $ | 778 | 203 | % | $ | 445 | 62 | % |
4
| Checking accounts totaled 26.5 million, down 2% compared with the prior year, driven by the attrition of converted WaMu Free Checking accounts, and up 1% from the prior quarter. | ||
| Average total deposits were $362.2 billion, up 7% from the prior year and flat compared with the prior quarter. | ||
| Deposit margin was 2.82%, compared with 3.04% in the prior year and 2.83% in the prior quarter. | ||
| End-of-period Business Banking loans were $17.3 billion, up 4% from the prior year and 1% compared with the prior quarter; originations were $1.4 billion, up 28% from the prior year and down 8% from the prior quarter. | ||
| Branch sales of credit cards were down 20% from the prior year and 10% from the prior quarter. | ||
| Branch sales of investment products decreased 12% from the prior year and 19% from the prior quarter. | ||
| Client investment assets, excluding loans and deposits, increased 4% from the prior year and decreased 6% from the prior quarter. | ||
| Number of mobile customers increased 58% compared with the prior year and 10% compared with the prior quarter. | ||
| Number of branches was 5,396, up 4% from the prior year and 1% from the prior quarter. |
5
| Mortgage loan originations were $36.8 billion, down 10% from the prior year and up 8% from the prior quarter. Retail originations (branch and direct to consumer) were $22.4 billion, up 17% from the prior year and 8% from the prior quarter, and the Retail distribution channel reported record revenue for the quarter. | ||
| Total third-party mortgage loans serviced were $924.5 billion, down 9% from the prior year and 2% from the prior quarter. |
| Average mortgage loans were $101.2 billion, down by $13.8 billion. | ||
| Average home equity loans were $104.9 billion, down by $13.6 billion. |
6
Results for Card | 2Q11 | 3Q10 | ||||||||||||||||||||||||||
($ millions) | 3Q11 | 2Q11 | 3Q10 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | |||||||||||||||||||||
Net Revenue |
$ | 4,775 | $ | 4,761 | $ | 5,085 | $ | 14 | | % | ($310 | ) | (6 | )% | ||||||||||||||
Provision for Credit Losses |
1,264 | 944 | 1,784 | 320 | 34 | (520 | ) | (29 | ) | |||||||||||||||||||
Noninterest Expense |
2,115 | 1,988 | 1,792 | 127 | 6 | 323 | 18 | |||||||||||||||||||||
Net Income |
$ | 849 | $ | 1,110 | $ | 926 | ($261 | ) | (24 | )% | ($77 | ) | (8 | )% |
| Return on equity was 21% on $16.0 billion of average allocated capital. | ||
| Excluding the Washington Mutual and Commercial Card portfolios, Card Services net revenue as a percentage of average loans was 11.68%, compared with 11.33% in the prior year and 11.95% in the prior quarter. | ||
| Credit Card average loans were $126.5 billion, a decrease of $13.5 billion, or 10%, from the prior year and an increase of $1.5 billion, or 1%, from the prior quarter. | ||
| Credit Card new accounts of 2.0 million were opened. |
7
| Excluding the Washington Mutual and Commercial Card portfolios, Credit Card sales volume2 was $84.8 billion, up 10% compared with the prior year and 2% compared with the prior quarter; excluding also the impact of the Kohls portfolio sale, sales volume was up 14% compared with prior year. | ||
| Merchant processing volume was $138.1 billion, up 18% from the prior year and 1% from the prior quarter; 6.1 billion total transactions processed, up 17% from the prior year and 3% from the prior quarter. | ||
| Average auto loans were $46.5 billion, down 2% from the prior year and 1% from the prior quarter. | ||
| Auto originations were $5.9 billion, down 3% from the prior year and up 9% from the prior quarter. |
Results for CB | 2Q11 | 3Q10 | ||||||||||||||||||||||||||
($ millions) | 3Q11 | 2Q11 | 3Q10 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | |||||||||||||||||||||
Net Revenue |
$ | 1,588 | $ | 1,627 | $ | 1,527 | ($39 | ) | (2 | )% | $ | 61 | 4 | % | ||||||||||||||
Provision for Credit Losses |
67 | 54 | 166 | 13 | 24 | (99 | ) | (60 | ) | |||||||||||||||||||
Noninterest Expense |
573 | 563 | 560 | 10 | 2 | 13 | 2 | |||||||||||||||||||||
Net Income |
$ | 571 | $ | 607 | $ | 471 | ($36 | ) | (6 | )% | $ | 100 | 21 | % |
8
| Return on equity was 28% on $8.0 billion of average allocated capital. | ||
| Overhead ratio was 36%, down from 37%. | ||
| Gross investment banking revenue (which is shared with the Investment Bank) was $320 million, down by $24 million, or 7%. | ||
| Average loan balances were $105.3 billion, up by $8.3 billion, or 9%, from the prior year and $3.5 billion, or 3%, from the prior quarter. | ||
| End-of-period loan balances were $107.4 billion, up by $9.3 billion, or 9%, from the prior year and $4.7 billion, or 5%, from the prior quarter. | ||
| Average liability balances were a record $180.3 billion, up by $42.4 billion, or 31%, from the prior year and $17.5 billion, or 11%, from the prior quarter. |
Results for TSS | 2Q11 | 3Q10 | ||||||||||||||||||||||||||
($ millions) | 3Q11 | 2Q11 | 3Q10 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | |||||||||||||||||||||
Net Revenue |
$ | 1,908 | $ | 1,932 | $ | 1,831 | ($24 | ) | (1 | )% | $ | 77 | 4 | % | ||||||||||||||
Provision for Credit Losses |
(20 | ) | (2 | ) | (2 | ) | (18 | ) | NM | (18 | ) | NM | ||||||||||||||||
Noninterest Expense |
1,470 | 1,453 | 1,410 | 17 | 1 | 60 | 4 | |||||||||||||||||||||
Net Income |
$ | 305 | $ | 333 | $ | 251 | ($28 | ) | (8 | )% | $ | 54 | 22 | % |
9
| Pretax margin2 was 24%, compared with 21% in the prior year and 27% in the prior quarter. | ||
| Return on equity was 17% on $7.0 billion of average allocated capital. | ||
| Average liability balances were $341.1 billion, up 41%. | ||
| Assets under custody were $16.3 trillion, up 2%. | ||
| End-of-period trade loans were $30.1 billion, up 69%. |
Results for AM | 2Q11 | 3Q10 | ||||||||||||||||||||||||||
($ millions) | 3Q11 | 2Q11 | 3Q10 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | |||||||||||||||||||||
Net Revenue |
$ | 2,316 | $ | 2,537 | $ | 2,172 | ($221 | ) | (9 | )% | $ | 144 | 7 | % | ||||||||||||||
Provision for Credit Losses |
26 | 12 | 23 | 14 | 117 | 3 | 13 | |||||||||||||||||||||
Noninterest Expense |
1,796 | 1,794 | 1,488 | 2 | | 308 | 21 | |||||||||||||||||||||
Net Income |
$ | 385 | $ | 439 | $ | 420 | ($54 | ) | (12 | )% | ($35 | ) | (8 | )% |
| Pretax margin2 was 21%, down from 30%. |
10
| Assets under management reflected net inflows of $11 billion for the 12 months ended September 30, 2011. For the quarter, net outflows were $8 billion; this included $10 billion of outflows from liquidity products, partially offset by net inflows of $2 billion to long-term products. | ||
| Assets under management ranked in the top two quartiles for investment performance were 77% over 5 years, 73% over 3 years and 49% over 1 year. | ||
| Customer assets in 4 and 5 Starrated funds were 47% of all rated mutual fund assets. | ||
| Average loans were $52.7 billion, up 34% from the prior year and 8% from the prior quarter. | ||
| End-of-period loans were $54.2 billion, up 31% from the prior year and 5% from the prior quarter. | ||
| Average deposits were $111.1 billion, up 26% from the prior year and 14% from the prior quarter. |
Results for Corporate/Private | 2Q11 | 3Q10 | ||||||||||||||||||||||||||
Equity ($ millions) | 3Q11 | 2Q11 | 3Q10 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | |||||||||||||||||||||
Net Revenue |
($132 | ) | $ | 2,065 | $ | 1,584 | ($2,197 | ) | NM | ($1,716 | ) | NM | ||||||||||||||||
Provision for Credit Losses |
(7 | ) | (9 | ) | (3 | ) | 2 | 22 | (4 | ) | (133 | ) | ||||||||||||||||
Noninterest Expense |
1,216 | 1,441 | 1,274 | (225 | ) | (16 | ) | (58 | ) | (5 | ) | |||||||||||||||||
Net
Income/(Loss) |
($645 | ) | $ | 502 | $ | 348 | ($1,147 | ) | NM | ($993 | ) | NM |
Results for JPM | 2Q11 | 3Q10 | ||||||||||||||||||||||||||
($ millions) | 3Q11 | 2Q11 | 3Q10 | $ O/(U) | O/(U) % | $ O/(U) | O/(U) % | |||||||||||||||||||||
Net Revenue |
$ | 24,368 | $ | 27,410 | $ | 24,335 | ($3,042 | ) | (11 | )% | $ | 33 | | % | ||||||||||||||
Provision for
Credit Losses |
2,411 | 1,810 | 3,223 | 601 | 33 | (812 | ) | (25 | ) | |||||||||||||||||||
Noninterest Expense |
15,534 | 16,842 | 14,398 | (1,308 | ) | (8 | ) | 1,136 | 8 | |||||||||||||||||||
Net Income |
$ | 4,262 | $ | 5,431 | $ | 4,418 | ($1,169 | ) | (22 | )% | ($156 | ) | (4 | )% |
(*) | Presented on a managed basis. See notes on page 13 for further explanation of managed basis. Net revenue on a U.S. GAAP basis totaled $23,763 million, $26,779 million, and $23,824 million for the third quarter of 2011, second quarter of 2011 and third quarter of 2010, respectively. |
11
| Basel I Tier 1 Common ratio1 was 9.9% at September 30, 2011, compared with 10.1% at June 30, 2011, and 9.5% at September 30, 2010. | ||
| Headcount was 256,663, an increase of 19,853, or 8%. |
12
1. | Notes on non-GAAP financial measures: |
a. | In addition to analyzing the Firms results on a reported basis, management reviews the Firms results and the results of the lines of business on a managed basis, which is a non-GAAP financial measure. The Firms definition of managed basis starts with the reported U.S. GAAP results and includes certain reclassifications to present total net revenue for the Firm (and each of the business segments) on a fully taxable-equivalent (FTE) basis. Accordingly, revenue from tax-exempt securities and investments that receive tax credits is presented in the managed results on a basis comparable to taxable securities and investments. This non-GAAP financial measure allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The corresponding income tax impact related to tax-exempt items is recorded within income tax expense. These adjustments have no impact on net income as reported by the Firm as a whole or by the lines of business. |
b. | The ratio of the allowance for loan losses to end-of-period loans excludes the following: loans accounted for at fair value and loans held-for-sale; purchased credit-impaired (PCI) loans; and the allowance for loan losses related to PCI loans. Additionally, Real Estate Portfolios net charge-off rates exclude the impact of PCI loans. The allowance for loan losses related to the purchased credit-impaired portfolio totaled $4.9 billion, $4.9 billion and $2.8 billion at September 30, 2011, June 30, 2011, and September 30, 2010, respectively. |
c. | Tangible common equity (TCE), a non-GAAP financial measure, represents common stockholders equity (i.e., total stockholders equity less preferred stock) less goodwill and identifiable intangible assets (other than MSRs), net of related deferred tax liabilities. ROTCE, a non-GAAP financial ratio, measures the Firms earnings as a percentage of TCE. In managements view, these measures are meaningful to the Firm, as well as analysts and investors in assessing the Firms use of equity, and in facilitating comparisons with competitors. |
d. | The Basel I Tier 1 common ratio is Tier 1 common divided by risk-weighted assets. Tier 1 common is defined as Tier 1 capital less elements of Tier 1 capital not in the form of common equity, such as perpetual preferred stock, noncontrolling interests in subsidiaries and trust preferred capital debt securities. Tier 1 common, a non-GAAP financial measure, is used by banking regulators, investors and analysts to assess and compare the quality and composition of the Firms capital with the capital of other financial services companies. The Firm uses Tier 1 common along with other capital measures to assess and monitor its capital position. On December 16, 2010, the Basel Committee issued the final version of the Basel Capital Accord, commonly referred to as Basel III. The Firms estimate of its Tier 1 common ratio under Basel III is a non-GAAP financial measure and reflects the Firms current understanding of the Basel III rules and the application of such rules to its businesses as currently conducted. The Firms estimates of its Basel III Tier 1 common ratio will evolve over time as the Firms businesses change, and as a result of further rule-making on Basel III implementation by U.S. federal banking agencies. Management considers this estimate as a key measure to assess the Firms capital position in conjunction with its capital ratios under Basel I requirements, in order to enable management, investors and analysts to compare the Firms capital under the Basel III capital standards with similar estimates provided by other financial services companies. |
e. | For Card Services, supplemental information is provided for Chase, excluding the Washington Mutual and Commercial Card portfolios, to provide more meaningful measures that enable comparability with prior periods. The net charge-off and delinquency rates include loans held-for-sale. |
2. | Additional notes on financial measures: |
a. | Headcount-related expense includes salary and benefits (excluding performance-based incentives), and other noncompensation costs related to employees. |
b. | Treasury & Securities Services firmwide metrics include certain TSS product revenue and liability balances reported in other lines of business related to customers who are also customers of those other lines of business. In order to capture the firmwide impact of TSS products and revenue, management reviews firmwide metrics such as liability balances, revenue and overhead ratios in assessing financial performance for TSS. Firmwide metrics are necessary, in managements view, in order to understand the aggregate TSS business. |
c. | Pretax margin represents income before income tax expense divided by total net revenue, which is, in managements view, a comprehensive measure of pretax performance derived by measuring earnings after all costs are taken into consideration. It is, therefore, another basis that management uses to evaluate the performance of TSS and AM against the performance of their respective competitors. |
d. | Credit Card sales volume presented excluding Commercial Card, which was transferred to Card Services & Auto in the first quarter of 2011. |
13
e. | Average deposit balances for Commercial Banking and Treasury & Securities Services include deposits, as well as deposits that are swept to on-balance-sheet liabilities (e.g., commercial paper, federal funds purchased, time deposits, and securities loaned or sold under repurchase agreements) as part of customer cash management programs. |
f. | Common stock repurchases also include repurchases of warrants to purchase common stock. |
3. | Revised financial disclosure: |
a. | Auto and Student Lending transferred from the Retail Financial Services (RFS) reportable/operating segment and is reported with Card Services & Auto (Card) in a single reportable/operating segment. |
b. | Retail Financial Services continues as a reportable/operating segment, organized in two components: Consumer & Business Banking (formerly Retail Banking) and Mortgage Banking (including Mortgage Production and Servicing, and Real Estate Portfolios). |
14
15
JPMORGAN CHASE & CO. CONSOLIDATED FINANCIAL HIGHLIGHTS (in millions, except per share, ratio and headcount data) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||
3Q11 Change | 2Q11 Change | |||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||
SELECTED INCOME STATEMENT DATA |
||||||||||||||||||||||||||||||||
Reported Basis |
||||||||||||||||||||||||||||||||
Total net revenue |
$ | 23,763 | $ | 26,779 | $ | 23,824 | (11 | )% | | % | $ | 75,763 | $ | 76,596 | (1 | )% | ||||||||||||||||
Total noninterest expense |
15,534 | 16,842 | 14,398 | (8 | ) | 8 | 48,371 | 45,153 | 7 | |||||||||||||||||||||||
Pre-provision profit |
8,229 | 9,937 | 9,426 | (17 | ) | (13 | ) | 27,392 | 31,443 | (13 | ) | |||||||||||||||||||||
Provision for credit losses |
2,411 | 1,810 | 3,223 | 33 | (25 | ) | 5,390 | 13,596 | (60 | ) | ||||||||||||||||||||||
NET INCOME |
4,262 | 5,431 | 4,418 | (22 | ) | (4 | ) | 15,248 | 12,539 | 22 | ||||||||||||||||||||||
Managed Basis (a) |
||||||||||||||||||||||||||||||||
Total net revenue |
24,368 | 27,410 | 24,335 | (11 | ) | | 77,569 | 78,120 | (1 | ) | ||||||||||||||||||||||
Total noninterest expense |
15,534 | 16,842 | 14,398 | (8 | ) | 8 | 48,371 | 45,153 | 7 | |||||||||||||||||||||||
Pre-provision profit |
8,834 | 10,568 | 9,937 | (16 | ) | (11 | ) | 29,198 | 32,967 | (11 | ) | |||||||||||||||||||||
Provision for credit losses |
2,411 | 1,810 | 3,223 | 33 | (25 | ) | 5,390 | 13,596 | (60 | ) | ||||||||||||||||||||||
NET INCOME |
4,262 | 5,431 | 4,418 | (22 | ) | (4 | ) | 15,248 | 12,539 | 22 | ||||||||||||||||||||||
PER COMMON SHARE DATA |
||||||||||||||||||||||||||||||||
Basic earnings |
1.02 | 1.28 | 1.02 | (20 | ) | | 3.60 | 2.86 | 26 | |||||||||||||||||||||||
Diluted earnings |
1.02 | 1.27 | 1.01 | (20 | ) | 1 | 3.57 | 2.84 | 26 | |||||||||||||||||||||||
Cash dividends declared (b) |
0.25 | 0.25 | 0.05 | | 400 | 0.75 | 0.15 | 400 | ||||||||||||||||||||||||
Book value |
45.93 | 44.77 | 42.29 | 3 | 9 | 45.93 | 42.29 | 9 | ||||||||||||||||||||||||
Closing share price (c) |
30.12 | 40.94 | 38.06 | (26 | ) | (21 | ) | 30.12 | 38.06 | (21 | ) | |||||||||||||||||||||
Market capitalization |
114,422 | 160,083 | 149,418 | (29 | ) | (23 | ) | 114,422 | 149,418 | (23 | ) | |||||||||||||||||||||
COMMON SHARES OUTSTANDING |
||||||||||||||||||||||||||||||||
Average: Basic |
3,859.6 | 3,958.4 | 3,954.3 | (2 | ) | (2 | ) | 3,933.2 | 3,969.4 | (1 | ) | |||||||||||||||||||||
Diluted |
3,872.2 | 3,983.2 | 3,971.9 | (3 | ) | (3 | ) | 3,956.5 | 3,990.7 | (1 | ) | |||||||||||||||||||||
Common shares at period-end |
3,798.9 | 3,910.2 | 3,925.8 | (3 | ) | (3 | ) | 3,798.9 | 3,925.8 | (3 | ) | |||||||||||||||||||||
FINANCIAL RATIOS (d) |
||||||||||||||||||||||||||||||||
Return on common equity (ROE) |
9 | % | 12 | % | 10 | % | 11 | % | 10 | % | ||||||||||||||||||||||
Return on tangible common equity (ROTCE) (e) |
13 | 17 | 15 | 16 | 15 | |||||||||||||||||||||||||||
Return on assets (ROA) |
0.76 | 0.99 | 0.86 | 0.94 | 0.82 | |||||||||||||||||||||||||||
CAPITAL RATIOS |
||||||||||||||||||||||||||||||||
Tier 1 capital ratio |
12.1 | (g) | 12.4 | 11.9 | ||||||||||||||||||||||||||||
Total capital ratio |
15.3 | (g) | 15.7 | 15.4 | ||||||||||||||||||||||||||||
Tier 1 common capital ratio (f) |
9.9 | (g) | 10.1 | 9.5 | ||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (Period-end) |
||||||||||||||||||||||||||||||||
Total assets |
$ | 2,289,240 | $ | 2,246,764 | $ | 2,141,595 | 2 | 7 | $ | 2,289,240 | $ | 2,141,595 | 7 | |||||||||||||||||||
Wholesale loans |
259,483 | 248,823 | 220,597 | 4 | 18 | 259,483 | 220,597 | 18 | ||||||||||||||||||||||||
Consumer, excluding credit card loans |
310,235 | 315,390 | 333,498 | (2 | ) | (7 | ) | 310,235 | 333,498 | (7 | ) | |||||||||||||||||||||
Credit card loans |
127,135 | 125,523 | 136,436 | 1 | (7 | ) | 127,135 | 136,436 | (7 | ) | ||||||||||||||||||||||
Deposits |
1,092,708 | 1,048,685 | 903,138 | 4 | 21 | 1,092,708 | 903,138 | 21 | ||||||||||||||||||||||||
Common stockholders equity |
174,487 | 175,079 | 166,030 | | 5 | 174,487 | 166,030 | 5 | ||||||||||||||||||||||||
Total stockholders equity |
182,287 | 182,879 | 173,830 | | 5 | 182,287 | 173,830 | 5 | ||||||||||||||||||||||||
Deposits-to-loans ratio |
157 | % | 152 | % | 131 | % | 157 | % | 131 | % | ||||||||||||||||||||||
Headcount |
256,663 | 250,095 | 236,810 | 3 | 8 | 256,663 | 236,810 | 8 | ||||||||||||||||||||||||
LINE OF BUSINESS NET INCOME/(LOSS) |
||||||||||||||||||||||||||||||||
Investment Bank |
$ | 1,636 | $ | 2,057 | $ | 1,286 | (20 | ) | 27 | $ | 6,063 | $ | 5,138 | 18 | ||||||||||||||||||
Retail Financial Services |
1,161 | 383 | 716 | 203 | 62 | 1,145 | 1,269 | (10 | ) | |||||||||||||||||||||||
Card Services & Auto |
849 | 1,110 | 926 | (24 | ) | (8 | ) | 3,493 | 1,324 | 164 | ||||||||||||||||||||||
Commercial Banking |
571 | 607 | 471 | (6 | ) | 21 | 1,724 | 1,554 | 11 | |||||||||||||||||||||||
Treasury & Securities Services |
305 | 333 | 251 | (8 | ) | 22 | 954 | 822 | 16 | |||||||||||||||||||||||
Asset Management |
385 | 439 | 420 | (12 | ) | (8 | ) | 1,290 | 1,203 | 7 | ||||||||||||||||||||||
Corporate/Private Equity |
(645 | ) | 502 | 348 | NM | NM | 579 | 1,229 | (53 | ) | ||||||||||||||||||||||
NET INCOME |
$ | 4,262 | $ | 5,431 | $ | 4,418 | (22 | ) | (4 | ) | $ | 15,248 | $ | 12,539 | 22 | |||||||||||||||||
(a) | For further discussion of managed basis, see Note (a) on page 13. | |
(b) | On March 18, 2011, the Board of Directors increased the Firms quarterly common stock dividend from $0.05 to $0.25 per share. | |
(c) | Share prices shown for JPMorgan Chases common stock are from the New York Stock Exchange. JPMorgan Chases common stock is also listed and traded on the London Stock Exchange and the Tokyo Stock Exchange. | |
(d) | Ratios are based upon annualized amounts. | |
(e) | ROTCE, a non-GAAP financial ratio, measures the Firms earnings as a percentage of tangible common equity. In managements view, this measure is meaningful to the Firm, as well as analysts and investors in assessing the Firms use of equity and in facilitating comparisons with competitors. For further discussion, see page 44 of the Earnings Release Financial Supplement. | |
(f) | Tier 1 common capital ratio is Tier 1 common capital divided by risk-weighted assets. The Firm uses Tier 1 common capital along with the other capital measures to assess and monitor its capital position. For further discussion of Tier 1 common capital ratio, see page 44 of the Earnings Release Financial Supplement. | |
(g) | Estimated. |
16
JPMORGAN CHASE & CO. TABLE OF CONTENTS |
Page(s) | ||
Consolidated Results |
||
Consolidated Financial Highlights |
2-3 | |
Statements of Income |
4 | |
Consolidated Balance Sheets |
5 | |
Condensed Average Balance Sheets and Annualized Yields |
6 | |
Reconciliation from Reported to Managed Summary |
7 | |
Business Detail |
||
Line of Business Financial Highlights Managed Basis |
8 | |
Investment Bank |
9-12 | |
Retail Financial Services |
13-19 | |
Card Services & Auto |
20-22 | |
Commercial Banking |
23-24 | |
Treasury & Securities Services |
25-26 | |
Asset Management |
27-31 | |
Corporate/Private Equity |
32-33 | |
Credit-Related Information |
34-39 | |
Market Risk-Related Information |
40 | |
Supplemental Detail |
||
Capital and Other Selected Balance Sheet Items |
41 | |
Mortgage Loan Repurchase Liability |
42 | |
Per Share-Related Information |
43 | |
Non-GAAP Financial Measures |
44 | |
Glossary of Terms |
45-48 | |
Memo: Business Segment Reorganization Summary |
49 |
Page 1
JPMORGAN CHASE & CO. CONSOLIDATED FINANCIAL HIGHLIGHTS (in millions, except per share and ratio data) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
SELECTED INCOME STATEMENT DATA |
||||||||||||||||||||||||||||||||||||||||
Reported Basis |
||||||||||||||||||||||||||||||||||||||||
Total net revenue |
$ | 23,763 | $ | 26,779 | $ | 25,221 | $ | 26,098 | $ | 23,824 | (11 | )% | | % | $ | 75,763 | $ | 76,596 | (1) | % | ||||||||||||||||||||
Total noninterest expense |
15,534 | 16,842 | 15,995 | 16,043 | 14,398 | (8 | ) | 8 | 48,371 | 45,153 | 7 | |||||||||||||||||||||||||||||
Pre-provision profit |
8,229 | 9,937 | 9,226 | 10,055 | 9,426 | (17 | ) | (13 | ) | 27,392 | 31,443 | (13 | ) | |||||||||||||||||||||||||||
Provision for credit losses |
2,411 | 1,810 | 1,169 | 3,043 | 3,223 | 33 | (25 | ) | 5,390 | 13,596 | (60 | ) | ||||||||||||||||||||||||||||
NET INCOME |
4,262 | 5,431 | 5,555 | 4,831 | 4,418 | (22 | ) | (4 | ) | 15,248 | 12,539 | 22 | ||||||||||||||||||||||||||||
Managed Basis (a) |
||||||||||||||||||||||||||||||||||||||||
Total net revenue |
24,368 | 27,410 | 25,791 | 26,722 | 24,335 | (11 | ) | | 77,569 | 78,120 | (1 | ) | ||||||||||||||||||||||||||||
Total noninterest expense |
15,534 | 16,842 | 15,995 | 16,043 | 14,398 | (8 | ) | 8 | 48,371 | 45,153 | 7 | |||||||||||||||||||||||||||||
Pre-provision profit |
8,834 | 10,568 | 9,796 | 10,679 | 9,937 | (16 | ) | (11 | ) | 29,198 | 32,967 | (11 | ) | |||||||||||||||||||||||||||
Provision for credit losses |
2,411 | 1,810 | 1,169 | 3,043 | 3,223 | 33 | (25 | ) | 5,390 | 13,596 | (60 | ) | ||||||||||||||||||||||||||||
NET INCOME |
4,262 | 5,431 | 5,555 | 4,831 | 4,418 | (22 | ) | (4 | ) | 15,248 | 12,539 | 22 | ||||||||||||||||||||||||||||
PER COMMON SHARE DATA |
||||||||||||||||||||||||||||||||||||||||
Basic earnings |
1.02 | 1.28 | 1.29 | 1.13 | 1.02 | (20 | ) | | 3.60 | 2.86 | 26 | |||||||||||||||||||||||||||||
Diluted earnings |
1.02 | 1.27 | 1.28 | 1.12 | 1.01 | (20 | ) | 1 | 3.57 | 2.84 | 26 | |||||||||||||||||||||||||||||
Cash dividends declared (b) |
0.25 | 0.25 | 0.25 | 0.05 | 0.05 | | 400 | 0.75 | 0.15 | 400 | ||||||||||||||||||||||||||||||
Book value |
45.93 | 44.77 | 43.34 | 43.04 | 42.29 | 3 | 9 | 45.93 | 42.29 | 9 | ||||||||||||||||||||||||||||||
Closing share price (c) |
30.12 | 40.94 | 46.10 | 42.42 | 38.06 | (26 | ) | (21 | ) | 30.12 | 38.06 | (21 | ) | |||||||||||||||||||||||||||
Market capitalization |
114,422 | 160,083 | 183,783 | 165,875 | 149,418 | (29 | ) | (23 | ) | 114,422 | 149,418 | (23 | ) | |||||||||||||||||||||||||||
COMMON SHARES OUTSTANDING |
||||||||||||||||||||||||||||||||||||||||
Average: Basic |
3,859.6 | 3,958.4 | 3,981.6 | 3,917.0 | 3,954.3 | (2 | ) | (2 | ) | 3,933.2 | 3,969.4 | (1 | ) | |||||||||||||||||||||||||||
Diluted |
3,872.2 | 3,983.2 | 4,014.1 | 3,935.2 | 3,971.9 | (3 | ) | (3 | ) | 3,956.5 | 3,990.7 | (1 | ) | |||||||||||||||||||||||||||
Common shares at period-end |
3,798.9 | 3,910.2 | 3,986.6 | 3,910.3 | 3,925.8 | (3 | ) | (3 | ) | 3,798.9 | 3,925.8 | (3 | ) | |||||||||||||||||||||||||||
FINANCIAL RATIOS (d) |
||||||||||||||||||||||||||||||||||||||||
Return on common equity (ROE) |
9 | % | 12 | % | 13 | % | 11 | % | 10 | % | 11 | % | 10 | % | ||||||||||||||||||||||||||
Return on tangible common equity (ROTCE) (e) |
13 | 17 | 18 | 16 | 15 | 16 | 15 | |||||||||||||||||||||||||||||||||
Return on assets (ROA) |
0.76 | 0.99 | 1.07 | 0.92 | 0.86 | 0.94 | 0.82 | |||||||||||||||||||||||||||||||||
CAPITAL RATIOS |
||||||||||||||||||||||||||||||||||||||||
Tier 1 capital ratio |
12.1 | (g) | 12.4 | 12.3 | 12.1 | 11.9 | ||||||||||||||||||||||||||||||||||
Total capital ratio |
15.3 | (g) | 15.7 | 15.6 | 15.5 | 15.4 | ||||||||||||||||||||||||||||||||||
Tier 1 common capital ratio (f) |
9.9 | (g) | 10.1 | 10.0 | 9.8 | 9.5 |
(a) | For further discussion of managed basis, see Reconciliation from Reported to Managed Summary on page 7. | |
(b) | On March 18, 2011, the Board of Directors increased the Firms quarterly common stock dividend from $0.05 to $0.25 per share. | |
(c) | Share prices shown for JPMorgan Chases common stock are from the New York Stock Exchange. JPMorgan Chases common stock is also listed and traded on the London Stock Exchange and the Tokyo Stock Exchange. | |
(d) | Ratios are based upon annualized amounts. | |
(e) | ROTCE, a non-GAAP financial ratio, measures the Firms earnings as a percentage of tangible common equity. In managements view, this measure is meaningful to the Firm, as well as analysts and investors in assessing the Firms use of equity and in facilitating comparisons with competitors. For further discussion, see page 44. | |
(f) | Tier 1 common capital ratio is Tier 1 common capital divided by risk-weighted assets. The Firm uses Tier 1 common capital along with the other capital measures to assess and monitor its capital position. For further discussion of Tier 1 common capital ratio, see page 44. | |
(g) | Estimated. |
Page 2
JPMORGAN CHASE & CO. CONSOLIDATED FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio and headcount data) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | ||||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | ||||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | ||||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (Period-end) |
|||||||||||||||||||||||||||||||||||||||||
Total assets |
$ | 2,289,240 | $ | 2,246,764 | $ | 2,198,161 | $ | 2,117,605 | $ | 2,141,595 | 2 | % | 7 | % | $ | 2,289,240 | $ | 2,141,595 | 7 | % | |||||||||||||||||||||
Wholesale loans |
259,483 | 248,823 | 236,007 | 227,633 | 220,597 | 4 | 18 | 259,483 | 220,597 | 18 | |||||||||||||||||||||||||||||||
Consumer, excluding credit card loans |
310,235 | 315,390 | 321,186 | 327,618 | 333,498 | (2 | ) | (7 | ) | 310,235 | 333,498 | (7 | ) | ||||||||||||||||||||||||||||
Credit card loans |
127,135 | 125,523 | 128,803 | 137,676 | 136,436 | 1 | (7 | ) | 127,135 | 136,436 | (7 | ) | |||||||||||||||||||||||||||||
Deposits |
1,092,708 | 1,048,685 | 995,829 | 930,369 | 903,138 | 4 | 21 | 1,092,708 | 903,138 | 21 | |||||||||||||||||||||||||||||||
Common stockholders equity |
174,487 | 175,079 | 172,798 | 168,306 | 166,030 | | 5 | 174,487 | 166,030 | 5 | |||||||||||||||||||||||||||||||
Total stockholders equity |
182,287 | 182,879 | 180,598 | 176,106 | 173,830 | | 5 | 182,287 | 173,830 | 5 | |||||||||||||||||||||||||||||||
Deposits-to-loans ratio |
157 | % | 152 | % | 145 | % | 134 | % | 131 | % | 157 | % | 131 | % | |||||||||||||||||||||||||||
Headcount |
256,663 | 250,095 | 242,929 | 239,831 | 236,810 | 3 | 8 | 256,663 | 236,810 | 8 | |||||||||||||||||||||||||||||||
LINE OF BUSINESS NET INCOME/(LOSS) |
|||||||||||||||||||||||||||||||||||||||||
Investment Bank |
$ | 1,636 | $ | 2,057 | $ | 2,370 | $ | 1,501 | $ | 1,286 | (20 | ) | 27 | $ | 6,063 | $ | 5,138 | 18 | |||||||||||||||||||||||
Retail Financial Services |
1,161 | 383 | (399 | ) | 459 | 716 | 203 | 62 | 1,145 | 1,269 | (10 | ) | |||||||||||||||||||||||||||||
Card Services & Auto |
849 | 1,110 | 1,534 | 1,548 | 926 | (24 | ) | (8 | ) | 3,493 | 1,324 | 164 | |||||||||||||||||||||||||||||
Commercial Banking |
571 | 607 | 546 | 530 | 471 | (6 | ) | 21 | 1,724 | 1,554 | 11 | ||||||||||||||||||||||||||||||
Treasury & Securities Services |
305 | 333 | 316 | 257 | 251 | (8 | ) | 22 | 954 | 822 | 16 | ||||||||||||||||||||||||||||||
Asset Management |
385 | 439 | 466 | 507 | 420 | (12 | ) | (8 | ) | 1,290 | 1,203 | 7 | |||||||||||||||||||||||||||||
Corporate/Private Equity |
(645 | ) | 502 | 722 | 29 | 348 | NM | NM | 579 | 1,229 | (53 | ) | |||||||||||||||||||||||||||||
NET INCOME |
$ | 4,262 | $ | 5,431 | $ | 5,555 | $ | 4,831 | $ | 4,418 | (22 | ) | (4 | ) | $ | 15,248 | $ | 12,539 | 22 | ||||||||||||||||||||||
Page 3
JPMORGAN CHASE & CO. STATEMENTS OF INCOME (in millions, except per share and ratio data) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||||||||||||||
Investment banking fees |
$ | 1,052 | $ | 1,933 | $ | 1,793 | $ | 1,832 | $ | 1,476 | (46) | % | (29 | )% | $ | 4,778 | $ | 4,358 | 10 | % | ||||||||||||||||||||
Principal transactions |
1,370 | 3,140 | 4,745 | 1,915 | 2,341 | (56 | ) | (41 | ) | 9,255 | 8,979 | 3 | ||||||||||||||||||||||||||||
Lending- and deposit-related fees |
1,643 | 1,649 | 1,546 | 1,545 | 1,563 | | 5 | 4,838 | 4,795 | 1 | ||||||||||||||||||||||||||||||
Asset management, administration and commissions |
3,448 | 3,703 | 3,606 | 3,697 | 3,188 | (7 | ) | 8 | 10,757 | 9,802 | 10 | |||||||||||||||||||||||||||||
Securities gains |
607 | 837 | 102 | 1,253 | 102 | (27 | ) | 495 | 1,546 | 1,712 | (10 | ) | ||||||||||||||||||||||||||||
Mortgage fees and related income |
1,380 | 1,103 | (487 | ) | 1,617 | 707 | 25 | 95 | 1,996 | 2,253 | (11 | ) | ||||||||||||||||||||||||||||
Credit card income |
1,666 | 1,696 | 1,437 | 1,558 | 1,477 | (2 | ) | 13 | 4,799 | 4,333 | 11 | |||||||||||||||||||||||||||||
Other income |
780 | 882 | 574 | 579 | 468 | (12 | ) | 67 | 2,236 | 1,465 | 53 | |||||||||||||||||||||||||||||
Noninterest revenue |
11,946 | 14,943 | 13,316 | 13,996 | 11,322 | (20 | ) | 6 | 40,205 | 37,697 | 7 | |||||||||||||||||||||||||||||
Interest income |
15,160 | 15,632 | 15,447 | 15,612 | 15,606 | (3 | ) | (3 | ) | 46,239 | 48,170 | (4 | ) | |||||||||||||||||||||||||||
Interest expense |
3,343 | 3,796 | 3,542 | 3,510 | 3,104 | (12 | ) | 8 | 10,681 | 9,271 | 15 | |||||||||||||||||||||||||||||
Net interest income |
11,817 | 11,836 | 11,905 | 12,102 | 12,502 | | (5 | ) | 35,558 | 38,899 | (9 | ) | ||||||||||||||||||||||||||||
TOTAL NET REVENUE |
23,763 | 26,779 | 25,221 | 26,098 | 23,824 | (11 | ) | | 75,763 | 76,596 | (1 | ) | ||||||||||||||||||||||||||||
Provision for credit losses |
2,411 | 1,810 | 1,169 | 3,043 | 3,223 | 33 | (25 | ) | 5,390 | 13,596 | (60 | ) | ||||||||||||||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||||||||||||||
Compensation expense |
6,908 | 7,569 | 8,263 | 6,571 | 6,661 | (9 | ) | 4 | 22,740 | 21,553 | 6 | |||||||||||||||||||||||||||||
Occupancy expense |
935 | 935 | 978 | 1,045 | 884 | | 6 | 2,848 | 2,636 | 8 | ||||||||||||||||||||||||||||||
Technology, communications and equipment expense |
1,248 | 1,217 | 1,200 | 1,198 | 1,184 | 3 | 5 | 3,665 | 3,486 | 5 | ||||||||||||||||||||||||||||||
Professional and outside services |
1,860 | 1,866 | 1,735 | 1,789 | 1,718 | | 8 | 5,461 | 4,978 | 10 | ||||||||||||||||||||||||||||||
Marketing |
926 | 744 | 659 | 584 | 651 | 24 | 42 | 2,329 | 1,862 | 25 | ||||||||||||||||||||||||||||||
Other expense |
3,445 | 4,299 | 2,943 | 4,616 | 3,082 | (20 | ) | 12 | 10,687 | 9,942 | 7 | |||||||||||||||||||||||||||||
Amortization of intangibles |
212 | 212 | 217 | 240 | 218 | | (3 | ) | 641 | 696 | (8 | ) | ||||||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE |
15,534 | 16,842 | 15,995 | 16,043 | 14,398 | (8 | ) | 8 | 48,371 | 45,153 | 7 | |||||||||||||||||||||||||||||
Income before income tax expense |
5,818 | 8,127 | 8,057 | 7,012 | 6,203 | (28 | ) | (6 | ) | 22,002 | 17,847 | 23 | ||||||||||||||||||||||||||||
Income tax expense |
1,556 | 2,696 | 2,502 | 2,181 | 1,785 | (42 | ) | (13 | ) | 6,754 | 5,308 | 27 | ||||||||||||||||||||||||||||
NET INCOME |
$ | 4,262 | $ | 5,431 | $ | 5,555 | $ | 4,831 | $ | 4,418 | (22 | ) | (4 | ) | $ | 15,248 | $ | 12,539 | 22 | |||||||||||||||||||||
PER COMMON SHARE DATA |
||||||||||||||||||||||||||||||||||||||||
Basic earnings |
$ | 1.02 | $ | 1.28 | $ | 1.29 | $ | 1.13 | $ | 1.02 | (20 | ) | | $ | 3.60 | $ | 2.86 | 26 | ||||||||||||||||||||||
Diluted earnings |
1.02 | 1.27 | 1.28 | 1.12 | 1.01 | (20 | ) | 1 | 3.57 | 2.84 | 26 | |||||||||||||||||||||||||||||
FINANCIAL RATIOS |
||||||||||||||||||||||||||||||||||||||||
Return on equity (a) |
9 | % | 12 | % | 13 | % | 11 | % | 10 | % | 11 | % | 10 | % | ||||||||||||||||||||||||||
Return on tangible common equity (a)(b) |
13 | 17 | 18 | 16 | 15 | 16 | 15 | |||||||||||||||||||||||||||||||||
Return on assets (a) |
0.76 | 0.99 | 1.07 | 0.92 | 0.86 | 0.94 | 0.82 | |||||||||||||||||||||||||||||||||
Effective income tax rate |
27 | (c) | 33 | 31 | 31 | 29 | 31 | 30 | ||||||||||||||||||||||||||||||||
Overhead ratio |
65 | 63 | 63 | 61 | 60 | 64 | 59 |
(a) | Ratios are based upon annualized amounts. | |
(b) | ROTCE, a non-GAAP financial ratio, measures the Firms earnings as a percentage of tangible common equity. In managements view, this measure is meaningful to the Firm, as well as analysts and investors in assessing the Firms use of equity and in facilitating comparisons with competitors. For further discussion, see page 44. | |
(c) | The decrease in the effective tax rate in the third quarter of 2011 was primarily the result of lower reported pretax book income, as well as changes in the proportion of income subject to U.S. federal and state and local taxes. |
Page 4
JPMORGAN CHASE & CO. | ||
CONSOLIDATED BALANCE SHEETS | ||
(in millions) |
September 30, 2011 | ||||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||||
Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Sep 30 | ||||||||||||||||||||||
2011 | 2011 | 2011 | 2010 | 2010 | 2011 | 2010 | ||||||||||||||||||||||
ASSETS |
||||||||||||||||||||||||||||
Cash and due from banks |
$ | 56,766 | $ | 30,466 | $ | 23,469 | $ | 27,567 | $ | 23,960 | 86 | % | 137 | % | ||||||||||||||
Deposits with banks |
128,877 | 169,880 | 80,842 | 21,673 | 31,077 | (24 | ) | 315 | ||||||||||||||||||||
Federal funds sold and securities purchased under
resale agreements |
248,042 | 213,362 | 217,356 | 222,554 | 235,390 | 16 | 5 | |||||||||||||||||||||
Securities borrowed |
131,561 | 121,493 | 119,000 | 123,587 | 127,365 | 8 | 3 | |||||||||||||||||||||
Trading assets: |
||||||||||||||||||||||||||||
Debt and equity instruments |
352,678 | 381,339 | 422,404 | 409,411 | 378,222 | (8 | ) | (7 | ) | |||||||||||||||||||
Derivative receivables |
108,853 | 77,383 | 78,744 | 80,481 | 97,293 | 41 | 12 | |||||||||||||||||||||
Securities |
339,349 | 324,741 | 334,800 | 316,336 | 340,168 | 4 | | |||||||||||||||||||||
Loans |
696,853 | 689,736 | 685,996 | 692,927 | 690,531 | 1 | 1 | |||||||||||||||||||||
Less: Allowance for loan losses |
28,350 | 28,520 | 29,750 | 32,266 | 34,161 | (1 | ) | (17 | ) | |||||||||||||||||||
Loans, net of allowance for loan losses |
668,503 | 661,216 | 656,246 | 660,661 | 656,370 | 1 | 2 | |||||||||||||||||||||
Accrued interest and accounts receivable |
72,080 | 80,292 | 79,236 | 70,147 | 63,224 | (10 | ) | 14 | ||||||||||||||||||||
Premises and equipment |
13,812 | 13,679 | 13,422 | 13,355 | 11,316 | 1 | 22 | |||||||||||||||||||||
Goodwill |
48,180 | 48,882 | 48,856 | 48,854 | 48,736 | (1 | ) | (1 | ) | |||||||||||||||||||
Mortgage servicing rights |
7,833 | 12,243 | 13,093 | 13,649 | 10,305 | (36 | ) | (24 | ) | |||||||||||||||||||
Other intangible assets |
3,396 | 3,679 | 3,857 | 4,039 | 3,982 | (8 | ) | (15 | ) | |||||||||||||||||||
Other assets |
109,310 | 108,109 | 106,836 | 105,291 | 114,187 | 1 | (4 | ) | ||||||||||||||||||||
TOTAL ASSETS |
$ | 2,289,240 | $ | 2,246,764 | $ | 2,198,161 | $ | 2,117,605 | $ | 2,141,595 | 2 | 7 | ||||||||||||||||
LIABILITIES |
||||||||||||||||||||||||||||
Deposits |
$ | 1,092,708 | $ | 1,048,685 | $ | 995,829 | $ | 930,369 | $ | 903,138 | 4 | 21 | ||||||||||||||||
Federal funds purchased and securities loaned or sold
under repurchase agreements |
238,585 | 254,124 | 285,444 | 276,644 | 314,161 | (6 | ) | (24 | ) | |||||||||||||||||||
Commercial paper |
51,073 | 51,160 | 46,022 | 35,363 | 38,611 | | 32 | |||||||||||||||||||||
Other borrowed funds (a) |
29,318 | 30,208 | 36,704 | 34,325 | 35,736 | (3 | ) | (18 | ) | |||||||||||||||||||
Trading liabilities: |
||||||||||||||||||||||||||||
Debt and equity instruments |
76,592 | 84,865 | 80,031 | 76,947 | 82,919 | (10 | ) | (8 | ) | |||||||||||||||||||
Derivative payables |
79,249 | 63,668 | 61,362 | 69,219 | 74,902 | 24 | 6 | |||||||||||||||||||||
Accounts payable and other liabilities |
199,769 | 184,490 | 171,638 | 170,330 | 169,365 | 8 | 18 | |||||||||||||||||||||
Beneficial interests issued by consolidated VIEs |
65,971 | 67,457 | 70,917 | 77,649 | 77,438 | (2 | ) | (15 | ) | |||||||||||||||||||
Long-term debt (a) |
273,688 | 279,228 | 269,616 | 270,653 | 271,495 | (2 | ) | 1 | ||||||||||||||||||||
TOTAL LIABILITIES |
2,106,953 | 2,063,885 | 2,017,563 | 1,941,499 | 1,967,765 | 2 | 7 | |||||||||||||||||||||
STOCKHOLDERS EQUITY |
||||||||||||||||||||||||||||
Preferred stock |
7,800 | 7,800 | 7,800 | 7,800 | 7,800 | | | |||||||||||||||||||||
Common stock |
4,105 | 4,105 | 4,105 | 4,105 | 4,105 | | | |||||||||||||||||||||
Capital surplus |
95,078 | 95,061 | 94,660 | 97,415 | 96,938 | | (2 | ) | ||||||||||||||||||||
Retained earnings |
85,726 | 82,612 | 78,342 | 73,998 | 69,531 | 4 | 23 | |||||||||||||||||||||
Accumulated other comprehensive income |
1,964 | 1,638 | 712 | 1,001 | 3,096 | 20 | (37 | ) | ||||||||||||||||||||
Shares held in RSU Trust, at cost |
(53 | ) | (53 | ) | (53 | ) | (53 | ) | (68 | ) | | 22 | ||||||||||||||||
Treasury stock, at cost |
(12,333 | ) | (8,284 | ) | (4,968 | ) | (8,160 | ) | (7,572 | ) | (49 | ) | (63 | ) | ||||||||||||||
TOTAL STOCKHOLDERS EQUITY |
182,287 | 182,879 | 180,598 | 176,106 | 173,830 | | 5 | |||||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |
$ | 2,289,240 | $ | 2,246,764 | $ | 2,198,161 | $ | 2,117,605 | $ | 2,141,595 | 2 | 7 | ||||||||||||||||
(a) | Effective January 1, 2011, the long-term portion of advances from Federal Home Loan Banks (FHLBs) was reclassified from other borrowed funds to long-term debt. Prior periods have been revised to conform with the current presentation. |
Page 5
JPMORGAN CHASE & CO. | ||
CONDENSED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS | ||
(in millions, except rates) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | ||||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | ||||||||||||||||||||||||||||||||||||||||
AVERAGE BALANCES | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
ASSETS |
|||||||||||||||||||||||||||||||||||||||||
Deposits with banks |
$ | 116,062 | $ | 75,801 | $ | 37,155 | $ | 29,213 | $ | 38,747 | 53 | % | 200 | % | $ | 76,628 | $ | 53,811 | 42 | % | |||||||||||||||||||||
Federal funds sold and securities purchased under
resale agreements |
211,884 | 202,036 | 202,481 | 201,489 | 192,099 | 5 | 10 | 205,501 | 183,983 | 12 | |||||||||||||||||||||||||||||||
Securities borrowed |
131,615 | 124,806 | 114,589 | 119,973 | 121,302 | 5 | 9 | 123,732 | 116,554 | 6 | |||||||||||||||||||||||||||||||
Trading assets debt instruments |
257,950 | 285,104 | 275,512 | 273,929 | 251,790 | (10 | ) | 2 | 272,791 | 248,484 | 10 | ||||||||||||||||||||||||||||||
Securities |
331,330 | 342,248 | 318,936 | 328,126 | 327,798 | (3 | ) | 1 | 330,884 | 330,853 | | ||||||||||||||||||||||||||||||
Loans |
692,794 | 686,111 | 688,133 | 690,529 | 693,791 | 1 | | 689,030 | 707,924 | (3 | ) | ||||||||||||||||||||||||||||||
Other assets (a) |
42,760 | 48,716 | 49,887 | 42,583 | 36,912 | (12 | ) | 16 | 47,095 | 33,108 | 42 | ||||||||||||||||||||||||||||||
Total interest-earning assets |
1,784,395 | 1,764,822 | 1,686,693 | 1,685,842 | 1,662,439 | 1 | 7 | 1,745,661 | 1,674,717 | 4 | |||||||||||||||||||||||||||||||
Trading assets equity instruments |
119,890 | 137,611 | 141,951 | 122,827 | 96,200 | (13 | ) | 25 | 133,070 | 91,697 | 45 | ||||||||||||||||||||||||||||||
Trading assets derivative receivables |
96,612 | 82,860 | 85,437 | 87,569 | 92,857 | 17 | 4 | 88,344 | 83,702 | 6 | |||||||||||||||||||||||||||||||
All other noninterest-earning assets |
229,650 | 207,250 | 190,371 | 192,906 | 189,617 | 11 | 21 | 209,234 | 191,040 | 10 | |||||||||||||||||||||||||||||||
TOTAL ASSETS |
$ | 2,230,547 | $ | 2,192,543 | $ | 2,104,452 | $ | 2,089,144 | $ | 2,041,113 | 2 | 9 | $ | 2,176,309 | $ | 2,041,156 | 7 | ||||||||||||||||||||||||
LIABILITIES |
|||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits |
$ | 740,901 | $ | 732,766 | $ | 700,921 | $ | 669,346 | $ | 659,027 | 1 | 12 | $ | 725,009 | $ | 668,403 | 8 | ||||||||||||||||||||||||
Federal funds purchased and securities loaned or
sold under repurchase agreements |
235,438 | 281,843 | 278,250 | 287,493 | 281,171 | (16 | ) | (16 | ) | 265,020 | 275,607 | (4 | ) | ||||||||||||||||||||||||||||
Commercial paper |
47,027 | 41,682 | 36,838 | 34,507 | 34,523 | 13 | 36 | 41,886 | 36,503 | 15 | |||||||||||||||||||||||||||||||
Trading liabilities debt, short-term and other liabilities (b)(c) |
215,064 | 212,878 | 193,814 | 196,840 | 188,010 | 1 | 14 | 207,330 | 182,424 | 14 | |||||||||||||||||||||||||||||||
Beneficial interests issued by consolidated VIEs |
66,545 | 69,399 | 72,932 | 78,114 | 83,928 | (4 | ) | (21 | ) | 69,602 | 90,654 | (23 | ) | ||||||||||||||||||||||||||||
Long-term debt (c) |
279,235 | 273,934 | 269,156 | 273,066 | 267,556 | 2 | 4 | 274,145 | 273,077 | | |||||||||||||||||||||||||||||||
Total interest-bearing liabilities |
1,584,210 | 1,612,502 | 1,551,911 | 1,539,366 | 1,514,215 | (2 | ) | 5 | 1,582,992 | 1,526,668 | 4 | ||||||||||||||||||||||||||||||
Noninterest-bearing deposits |
297,610 | 247,137 | 229,461 | 225,966 | 213,700 | 20 | 39 | 258,319 | 207,846 | 24 | |||||||||||||||||||||||||||||||
Trading liabilities equity instruments |
1,948 | 3,289 | 7,872 | 7,166 | 6,560 | (41 | ) | (70 | ) | 4,348 | 5,838 | (26 | ) | ||||||||||||||||||||||||||||
Trading liabilities derivative payables |
75,828 | 66,009 | 71,288 | 71,727 | 69,350 | 15 | 9 | 71,058 | 63,688 | 12 | |||||||||||||||||||||||||||||||
All other noninterest-bearing liabilities |
88,697 | 81,729 | 66,705 | 70,307 | 65,335 | 9 | 36 | 79,125 | 69,281 | 14 | |||||||||||||||||||||||||||||||
TOTAL LIABILITIES |
2,048,293 | 2,010,666 | 1,927,237 | 1,914,532 | 1,869,160 | 2 | 10 | 1,995,842 | 1,873,321 | 7 | |||||||||||||||||||||||||||||||
Preferred stock |
7,800 | 7,800 | 7,800 | 7,800 | 7,991 | | (2 | ) | 7,800 | 8,098 | (4 | ) | |||||||||||||||||||||||||||||
Common stockholders equity |
174,454 | 174,077 | 169,415 | 166,812 | 163,962 | | 6 | 172,667 | 159,737 | 8 | |||||||||||||||||||||||||||||||
TOTAL STOCKHOLDERS EQUITY |
182,254 | 181,877 | 177,215 | 174,612 | 171,953 | | 6 | 180,467 | 167,835 | 8 | |||||||||||||||||||||||||||||||
TOTAL LIABILITIES AND |
|||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS EQUITY |
$ | 2,230,547 | $ | 2,192,543 | $ | 2,104,452 | $ | 2,089,144 | $ | 2,041,113 | 2 | 9 | $ | 2,176,309 | $ | 2,041,156 | 7 | ||||||||||||||||||||||||
AVERAGE
RATES |
|||||||||||||||||||||||||||||||||||||||||
INTEREST-EARNING ASSETS |
|||||||||||||||||||||||||||||||||||||||||
Deposits with banks |
0.63 | % | 0.76 | % | 1.11 | % | 1.02 | % | 0.85 | % | 0.75 | % | 0.67 | % | |||||||||||||||||||||||||||
Federal funds sold and securities purchased under
resale agreements |
1.28 | 1.20 | 1.09 | 1.05 | 0.92 | 1.19 | 0.91 | ||||||||||||||||||||||||||||||||||
Securities borrowed |
0.05 | 0.10 | 0.17 | 0.16 | 0.22 | 0.10 | 0.15 | ||||||||||||||||||||||||||||||||||
Trading assets debt instruments |
4.32 | 4.23 | 4.31 | 4.29 | 4.37 | 4.28 | 4.39 | ||||||||||||||||||||||||||||||||||
Securities |
2.66 | 3.10 | 2.89 | 2.44 | 2.67 | 2.88 | 3.12 | ||||||||||||||||||||||||||||||||||
Loans |
5.28 | 5.36 | 5.62 | 5.71 | 5.71 | 5.42 | 5.77 | ||||||||||||||||||||||||||||||||||
Other assets (a) |
1.47 | 1.30 | 1.20 | 1.54 | 1.57 | 1.32 | 1.52 | ||||||||||||||||||||||||||||||||||
Total interest-earning assets |
3.40 | 3.58 | 3.74 | 3.70 | 3.75 | 3.57 | 3.87 | ||||||||||||||||||||||||||||||||||
INTEREST
BEARING LIABILITIES |
|||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits |
0.53 | 0.61 | 0.53 | 0.50 | 0.51 | 0.56 | 0.51 | ||||||||||||||||||||||||||||||||||
Federal funds purchased and securities loaned or
sold under repurchase agreements |
0.18 | 0.29 | 0.17 | 0.12 | (0.28 | ) (d) | 0.22 | (0.14 | )(d) | ||||||||||||||||||||||||||||||||
Commercial paper |
0.16 | 0.19 | 0.21 | 0.21 | 0.20 | 0.19 | 0.19 | ||||||||||||||||||||||||||||||||||
Trading liabilities debt, short-term and other liabilities (b)(c) |
1.05 | 1.26 | 1.43 | 1.57 | 1.27 | 1.24 | 1.25 | ||||||||||||||||||||||||||||||||||
Beneficial interests issued by consolidated VIEs |
1.05 | 1.17 | 1.19 | 1.13 | 1.36 | 1.14 | 1.36 | ||||||||||||||||||||||||||||||||||
Long-term debt (c) |
2.10 | 2.31 | 2.39 | 2.25 | 2.30 | 2.27 | 2.10 | ||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities |
0.84 | 0.94 | 0.93 | 0.90 | 0.81 | 0.90 | 0.81 | ||||||||||||||||||||||||||||||||||
INTEREST RATE SPREAD |
2.56 | % | 2.64 | % | 2.81 | % | 2.80 | % | 2.94 | % | 2.67 | % | 3.06 | % | |||||||||||||||||||||||||||
NET YIELD
ON INTEREST EARNING ASSETS |
2.66 | % | 2.72 | % | 2.89 | % | 2.88 | % | 3.01 | % | 2.75 | % | 3.13 | % |
(a) | Includes margin loans. | |
(b) | Includes brokerage customer payables. | |
(c) | Effective January 1, 2011, the long-term portion of the advances from FHLBs was reclassified from other borrowed funds, which is included in short-term and other liabilities, to long-term debt. Prior periods have been revised to conform with the current presentation. | |
(d) | Reflects a benefit from the favorable market environments for dollar-roll financings. |
Page 6
JPMORGAN CHASE & CO. | ||
RECONCILIATION FROM REPORTED TO MANAGED SUMMARY | ||
(in millions) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
OTHER INCOME |
||||||||||||||||||||||||||||||||||||||||
Other income reported |
$ | 780 | $ | 882 | $ | 574 | $ | 579 | $ | 468 | (12 | )% | 67 | % | $ | 2,236 | $ | 1,465 | 53 | % | ||||||||||||||||||||
Fully tax-equivalent adjustments |
472 | 510 | 451 | 503 | 415 | (7 | ) | 14 | 1,433 | 1,242 | 15 | |||||||||||||||||||||||||||||
Other income managed |
$ | 1,252 | $ | 1,392 | $ | 1,025 | $ | 1,082 | $ | 883 | (10 | ) | 42 | $ | 3,669 | $ | 2,707 | 36 | ||||||||||||||||||||||
TOTAL NONINTEREST REVENUE |
||||||||||||||||||||||||||||||||||||||||
Total noninterest revenue reported |
$ | 11,946 | $ | 14,943 | $ | 13,316 | $ | 13,996 | $ | 11,322 | (20 | ) | 6 | $ | 40,205 | $ | 37,697 | 7 | ||||||||||||||||||||||
Fully tax-equivalent adjustments |
472 | 510 | 451 | 503 | 415 | (7 | ) | 14 | 1,433 | 1,242 | 15 | |||||||||||||||||||||||||||||
Total noninterest revenue managed |
$ | 12,418 | $ | 15,453 | $ | 13,767 | $ | 14,499 | $ | 11,737 | (20 | ) | 6 | $ | 41,638 | $ | 38,939 | 7 | ||||||||||||||||||||||
NET INTEREST INCOME |
||||||||||||||||||||||||||||||||||||||||
Net interest income reported |
$ | 11,817 | $ | 11,836 | $ | 11,905 | $ | 12,102 | $ | 12,502 | | (5 | ) | $ | 35,558 | $ | 38,899 | (9 | ) | |||||||||||||||||||||
Fully tax-equivalent adjustments |
133 | 121 | 119 | 121 | 96 | 10 | 39 | 373 | 282 | 32 | ||||||||||||||||||||||||||||||
Net interest income managed |
$ | 11,950 | $ | 11,957 | $ | 12,024 | $ | 12,223 | $ | 12,598 | | (5 | ) | $ | 35,931 | $ | 39,181 | (8 | ) | |||||||||||||||||||||
TOTAL NET REVENUE |
||||||||||||||||||||||||||||||||||||||||
Total net revenue reported |
$ | 23,763 | $ | 26,779 | $ | 25,221 | $ | 26,098 | $ | 23,824 | (11 | ) | | $ | 75,763 | $ | 76,596 | (1 | ) | |||||||||||||||||||||
Fully tax-equivalent adjustments |
605 | 631 | 570 | 624 | 511 | (4 | ) | 18 | 1,806 | 1,524 | 19 | |||||||||||||||||||||||||||||
Total net revenue managed |
$ | 24,368 | $ | 27,410 | $ | 25,791 | $ | 26,722 | $ | 24,335 | (11 | ) | | $ | 77,569 | $ | 78,120 | (1 | ) | |||||||||||||||||||||
PRE-PROVISION PROFIT |
||||||||||||||||||||||||||||||||||||||||
Total pre-provision profit reported |
$ | 8,229 | $ | 9,937 | $ | 9,226 | $ | 10,055 | $ | 9,426 | (17 | ) | (13 | ) | $ | 27,392 | $ | 31,443 | (13 | ) | ||||||||||||||||||||
Fully tax-equivalent adjustments |
605 | 631 | 570 | 624 | 511 | (4 | ) | 18 | 1,806 | 1,524 | 19 | |||||||||||||||||||||||||||||
Total pre-provision profit managed |
$ | 8,834 | $ | 10,568 | $ | 9,796 | $ | 10,679 | $ | 9,937 | (16 | ) | (11 | ) | $ | 29,198 | $ | 32,967 | (11 | ) | ||||||||||||||||||||
INCOME TAX EXPENSE |
||||||||||||||||||||||||||||||||||||||||
Income tax expense reported |
$ | 1,556 | $ | 2,696 | $ | 2,502 | $ | 2,181 | $ | 1,785 | (42 | ) | (13 | ) | $ | 6,754 | $ | 5,308 | 27 | |||||||||||||||||||||
Fully tax-equivalent adjustments |
605 | 631 | 570 | 624 | 511 | (4 | ) | 18 | 1,806 | 1,524 | 19 | |||||||||||||||||||||||||||||
Income tax expense managed |
$ | 2,161 | $ | 3,327 | $ | 3,072 | $ | 2,805 | $ | 2,296 | (35 | ) | (6 | ) | $ | 8,560 | $ | 6,832 | 25 | |||||||||||||||||||||
Page 7
JPMORGAN CHASE & CO. | ||
LINE OF BUSINESS FINANCIAL HIGHLIGHTS MANAGED BASIS (a) | ||
(in millions, except ratio data) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
TOTAL NET REVENUE (FTE) |
||||||||||||||||||||||||||||||||||||||||
Investment Bank (b) |
$ | 6,369 | $ | 7,314 | $ | 8,233 | $ | 6,213 | $ | 5,353 | (13) | % | 19 | % | $ | 21,916 | $ | 20,004 | 10 | % | ||||||||||||||||||||
Retail Financial Services |
7,535 | 7,142 | 5,466 | 7,699 | 6,814 | 6 | 11 | 20,143 | 20,748 | (3 | ) | |||||||||||||||||||||||||||||
Card Services & Auto |
4,775 | 4,761 | 4,791 | 5,072 | 5,085 | | (6 | ) | 14,327 | 15,400 | (7 | ) | ||||||||||||||||||||||||||||
Commercial Banking |
1,588 | 1,627 | 1,516 | 1,611 | 1,527 | (2 | ) | 4 | 4,731 | 4,429 | 7 | |||||||||||||||||||||||||||||
Treasury & Securities Services |
1,908 | 1,932 | 1,840 | 1,913 | 1,831 | (1 | ) | 4 | 5,680 | 5,468 | 4 | |||||||||||||||||||||||||||||
Asset Management |
2,316 | 2,537 | 2,406 | 2,613 | 2,172 | (9 | ) | 7 | 7,259 | 6,371 | 14 | |||||||||||||||||||||||||||||
Corporate/Private Equity (b) |
(123 | ) | 2,097 | 1,539 | 1,601 | 1,553 | NM | NM | 3,513 | 5,700 | (38 | ) | ||||||||||||||||||||||||||||
TOTAL NET REVENUE |
$ | 24,368 | $ | 27,410 | $ | 25,791 | $ | 26,722 | $ | 24,335 | (11 | ) | | $ | 77,569 | $ | 78,120 | (1 | ) | |||||||||||||||||||||
TOTAL PRE-PROVISION PROFIT |
||||||||||||||||||||||||||||||||||||||||
Investment Bank (b) |
$ | 2,570 | $ | 2,982 | $ | 3,217 | $ | 2,012 | $ | 1,649 | (14 | ) | 56 | $ | 8,769 | $ | 6,940 | 26 | ||||||||||||||||||||||
Retail Financial Services |
2,970 | 1,871 | 566 | 3,228 | 2,644 | 59 | 12 | 5,407 | 8,736 | (38 | ) | |||||||||||||||||||||||||||||
Card Services & Auto |
2,660 | 2,773 | 2,874 | 3,205 | 3,293 | (4 | ) | (19 | ) | 8,307 | 10,089 | (18 | ) | |||||||||||||||||||||||||||
Commercial Banking |
1,015 | 1,064 | 953 | 1,053 | 967 | (5 | ) | 5 | 3,032 | 2,788 | 9 | |||||||||||||||||||||||||||||
Treasury & Securities Services |
438 | 479 | 463 | 443 | 421 | (9 | ) | 4 | 1,380 | 1,334 | 3 | |||||||||||||||||||||||||||||
Asset Management |
520 | 743 | 746 | 836 | 684 | (30 | ) | (24 | ) | 2,009 | 2,036 | (1 | ) | |||||||||||||||||||||||||||
Corporate/Private Equity (b) |
(1,339 | ) | 656 | 977 | (98 | ) | 279 | NM | NM | 294 | 1,044 | (72 | ) | |||||||||||||||||||||||||||
TOTAL PRE-PROVISION PROFIT |
$ | 8,834 | $ | 10,568 | $ | 9,796 | $ | 10,679 | $ | 9,937 | (16 | ) | (11 | ) | $ | 29,198 | $ | 32,967 | (11 | ) | ||||||||||||||||||||
NET INCOME/(LOSS) |
||||||||||||||||||||||||||||||||||||||||
Investment Bank |
$ | 1,636 | $ | 2,057 | $ | 2,370 | $ | 1,501 | $ | 1,286 | (20 | ) | 27 | $ | 6,063 | $ | 5,138 | 18 | ||||||||||||||||||||||
Retail Financial Services |
1,161 | 383 | (399 | ) | 459 | 716 | 203 | 62 | 1,145 | 1,269 | (10 | ) | ||||||||||||||||||||||||||||
Card Services & Auto |
849 | 1,110 | 1,534 | 1,548 | 926 | (24 | ) | (8 | ) | 3,493 | 1,324 | 164 | ||||||||||||||||||||||||||||
Commercial Banking |
571 | 607 | 546 | 530 | 471 | (6 | ) | 21 | 1,724 | 1,554 | 11 | |||||||||||||||||||||||||||||
Treasury & Securities Services |
305 | 333 | 316 | 257 | 251 | (8 | ) | 22 | 954 | 822 | 16 | |||||||||||||||||||||||||||||
Asset Management |
385 | 439 | 466 | 507 | 420 | (12 | ) | (8 | ) | 1,290 | 1,203 | 7 | ||||||||||||||||||||||||||||
Corporate/Private Equity |
(645 | ) | 502 | 722 | 29 | 348 | NM | NM | 579 | 1,229 | (53 | ) | ||||||||||||||||||||||||||||
TOTAL NET INCOME |
$ | 4,262 | $ | 5,431 | $ | 5,555 | $ | 4,831 | $ | 4,418 | (22 | ) | (4 | ) | $ | 15,248 | $ | 12,539 | 22 | |||||||||||||||||||||
AVERAGE EQUITY (c) |
||||||||||||||||||||||||||||||||||||||||
Investment Bank |
$ | 40,000 | $ | 40,000 | $ | 40,000 | $ | 40,000 | $ | 40,000 | | | $ | 40,000 | $ | 40,000 | | |||||||||||||||||||||||
Retail Financial Services |
25,000 | 25,000 | 25,000 | 24,600 | 24,600 | | 2 | 25,000 | 24,600 | 2 | ||||||||||||||||||||||||||||||
Card Services & Auto |
16,000 | 16,000 | 16,000 | 18,400 | 18,400 | | (13 | ) | 16,000 | 18,400 | (13 | ) | ||||||||||||||||||||||||||||
Commercial Banking |
8,000 | 8,000 | 8,000 | 8,000 | 8,000 | | | 8,000 | 8,000 | | ||||||||||||||||||||||||||||||
Treasury & Securities Services |
7,000 | 7,000 | 7,000 | 6,500 | 6,500 | | 8 | 7,000 | 6,500 | 8 | ||||||||||||||||||||||||||||||
Asset Management |
6,500 | 6,500 | 6,500 | 6,500 | 6,500 | | | 6,500 | 6,500 | | ||||||||||||||||||||||||||||||
Corporate/Private Equity |
71,954 | 71,577 | 66,915 | 62,812 | 59,962 | 1 | 20 | 70,167 | 55,737 | 26 | ||||||||||||||||||||||||||||||
TOTAL AVERAGE EQUITY |
$ | 174,454 | $ | 174,077 | $ | 169,415 | $ | 166,812 | $ | 163,962 | | 6 | $ | 172,667 | $ | 159,737 | 8 | |||||||||||||||||||||||
RETURN ON EQUITY (c) |
||||||||||||||||||||||||||||||||||||||||
Investment Bank |
16 | % | 21 | % | 24 | % | 15 | % | 13 | % | 20 | % | 17 | % | ||||||||||||||||||||||||||
Retail Financial Services |
18 | 6 | (6 | ) | 7 | 12 | 6 | 7 | ||||||||||||||||||||||||||||||||
Card Services & Auto |
21 | 28 | 39 | 33 | 20 | 29 | 10 | |||||||||||||||||||||||||||||||||
Commercial Banking |
28 | 30 | 28 | 26 | 23 | 29 | 26 | |||||||||||||||||||||||||||||||||
Treasury & Securities Services |
17 | 19 | 18 | 16 | 15 | 18 | 17 | |||||||||||||||||||||||||||||||||
Asset Management |
24 | 27 | 29 | 31 | 26 | 27 | 25 | |||||||||||||||||||||||||||||||||
JPMORGAN CHASE |
9 | 12 | 13 | 11 | 10 | 11 | 10 |
(a) | Commencing July 1, 2011, the Firms business segments have been reorganized as follows: (1) Auto and Student Lending transferred from the current Retail Financial Services (RFS) reportable/operating segment and is now reported with Card Services & Auto (Card) in a single reportable/operating segment, and (2) RFS continues as a reportable/operating segment, organized in two components: Consumer & Business Banking (formerly Retail Banking) and Mortgage Banking (including Mortgage Production and Servicing, and Real Estate Portfolios). All prior period disclosures have been revised to conform with the current period presentation. For further details on the reorganization, see page 49. | |
(b) | Corporate/Private Equity includes an adjustment to offset Investment Banks (IB) inclusion of a credit allocation income/(expense) to Treasury & Securities Services (TSS) in total net revenue; TSS reports the credit allocation as a separate line on its income statement (not within total net revenue). | |
(c) | Equity for a line of business represents the amount the Firm believes the business would require if it were operating independently, incorporating sufficient capital to address regulatory capital requirements (including Basel III Tier 1 common capital requirements), economic risk measures, and capital levels for similarly rated peers. Capital is also allocated to each line of business for, among other things, goodwill and other intangibles associated with acquisitions effected by the line of business. ROE is measured and internal targets for expected returns are established as key measures of a business segments performance. Effective January 1, 2011, capital allocated to Card was reduced by $2.4 billion, to $16.0 billion, largely reflecting portfolio runoff and the improving risk profile of the business; capital allocated to TSS was increased by $500 million, to $7.0 billion, reflecting growth in the underlying business. The Firm continues to assess the level of capital required for each line of business, as well as the assumptions and methodologies used to allocate capital to the business segments, and further refinements may be implemented in future periods. |
Page 8
JPMORGAN CHASE & CO. | ||
INVESTMENT BANK | ||
FINANCIAL HIGHLIGHTS | ||
(in millions, except ratio data) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
INCOME STATEMENT |
||||||||||||||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||||||||||||||
Investment banking fees |
$ | 1,039 | $ | 1,922 | $ | 1,779 | $ | 1,833 | $ | 1,502 | (46) | % | (31) | % | $ | 4,740 | $ | 4,353 | 9 | % | ||||||||||||||||||||
Principal transactions |
2,253 | 2,309 | 3,398 | 1,289 | 1,129 | (2 | ) | 100 | 7,960 | 7,165 | 11 | |||||||||||||||||||||||||||||
Lending- and deposit-related fees |
210 | 218 | 214 | 209 | 205 | (4 | ) | 2 | 642 | 610 | 5 | |||||||||||||||||||||||||||||
Asset management, administration and commissions |
563 | 548 | 619 | 652 | 565 | 3 | | 1,730 | 1,761 | (2 | ) | |||||||||||||||||||||||||||||
All other income (a) |
228 | 236 | 166 | 185 | 61 | (3 | ) | 274 | 630 | 196 | 221 | |||||||||||||||||||||||||||||
Noninterest revenue |
4,293 | 5,233 | 6,176 | 4,168 | 3,462 | (18 | ) | 24 | 15,702 | 14,085 | 11 | |||||||||||||||||||||||||||||
Net interest income |
2,076 | 2,081 | 2,057 | 2,045 | 1,891 | | 10 | 6,214 | 5,919 | 5 | ||||||||||||||||||||||||||||||
TOTAL NET REVENUE (b) |
6,369 | 7,314 | 8,233 | 6,213 | 5,353 | (13 | ) | 19 | 21,916 | 20,004 | 10 | |||||||||||||||||||||||||||||
Provision for credit losses |
54 | (183 | ) | (429 | ) | (271 | ) | (142 | ) | NM | NM | (558 | ) | (929 | ) | 40 | ||||||||||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||||||||||||||
Compensation expense |
1,850 | 2,564 | 3,294 | 1,845 | 2,031 | (28 | ) | (9 | ) | 7,708 | 7,882 | (2 | ) | |||||||||||||||||||||||||||
Noncompensation expense |
1,949 | 1,768 | 1,722 | 2,356 | 1,673 | 10 | 16 | 5,439 | 5,182 | 5 | ||||||||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE |
3,799 | 4,332 | 5,016 | 4,201 | 3,704 | (12 | ) | 3 | 13,147 | 13,064 | 1 | |||||||||||||||||||||||||||||
Income before income tax expense |
2,516 | 3,165 | 3,646 | 2,283 | 1,791 | (21 | ) | 40 | 9,327 | 7,869 | 19 | |||||||||||||||||||||||||||||
Income tax expense |
880 | 1,108 | 1,276 | 782 | 505 | (21 | ) | 74 | 3,264 | 2,731 | 20 | |||||||||||||||||||||||||||||
NET INCOME |
$ | 1,636 | $ | 2,057 | $ | 2,370 | $ | 1,501 | $ | 1,286 | (20 | ) | 27 | $ | 6,063 | $ | 5,138 | 18 | ||||||||||||||||||||||
FINANCIAL RATIOS |
||||||||||||||||||||||||||||||||||||||||
ROE |
16 | % | 21 | % | 24 | % | 15 | % | 13 | % | 20 | % | 17 | % | ||||||||||||||||||||||||||
ROA |
0.81 | 0.98 | 1.18 | 0.75 | 0.68 | 0.99 | 0.97 | |||||||||||||||||||||||||||||||||
Overhead ratio |
60 | 59 | 61 | 68 | 69 | 60 | 65 | |||||||||||||||||||||||||||||||||
Compensation expense as a percent of total net revenue |
29 | 35 | 40 | 30 | 38 | 35 | 39 | (f) | ||||||||||||||||||||||||||||||||
REVENUE BY BUSINESS |
||||||||||||||||||||||||||||||||||||||||
Investment banking fees: |
||||||||||||||||||||||||||||||||||||||||
Advisory |
$ | 365 | $ | 601 | $ | 429 | $ | 424 | $ | 385 | (39 | ) | (5 | ) | $ | 1,395 | $ | 1,045 | 33 | |||||||||||||||||||||
Equity underwriting |
178 | 455 | 379 | 489 | 333 | (61 | ) | (47 | ) | 1,012 | 1,100 | (8 | ) | |||||||||||||||||||||||||||
Debt underwriting |
496 | 866 | 971 | 920 | 784 | (43 | ) | (37 | ) | 2,333 | 2,208 | 6 | ||||||||||||||||||||||||||||
Total investment banking fees |
1,039 | 1,922 | 1,779 | 1,833 | 1,502 | (46 | ) | (31 | ) | 4,740 | 4,353 | 9 | ||||||||||||||||||||||||||||
Fixed income markets (c) |
3,328 | 4,280 | 5,238 | 2,875 | 3,123 | (22 | ) | 7 | 12,846 | 12,150 | 6 | |||||||||||||||||||||||||||||
Equity markets (d) |
1,424 | 1,223 | 1,406 | 1,128 | 1,135 | 16 | 25 | 4,053 | 3,635 | 11 | ||||||||||||||||||||||||||||||
Credit portfolio (a)(e) |
578 | (111 | ) | (190 | ) | 377 | (407 | ) | NM | NM | 277 | (134 | ) | NM | ||||||||||||||||||||||||||
Total net revenue |
$ | 6,369 | $ | 7,314 | $ | 8,233 | $ | 6,213 | $ | 5,353 | (13 | ) | 19 | $ | 21,916 | $ | 20,004 | 10 | ||||||||||||||||||||||
(a) | IB manages traditional credit exposures related to Global Corporate Bank (GCB) on behalf of IB and TSS. Effective January 1, 2011, IB and TSS share the economics related to the Firms GCB clients. IB recognizes this sharing agreement within all other income. The prior-year periods reflected the reimbursement from TSS for a portion of the total costs of managing the credit portfolio on behalf of TSS. | |
(b) | Total net revenue included tax-equivalent adjustments, predominantly due to income tax credits related to affordable housing and alternative energy investments, as well as tax-exempt income from municipal bond investments of $440 million, $493 million, $438 million, $475 million and $390 million for the three months ended September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively, and $1.4 billion and $1.2 billion for the nine months ended September 30, 2011 and 2010, respectively. | |
(c) | Fixed income markets primarily include revenue related to market-making across global fixed income markets, including foreign exchange, interest rate, credit and commodities markets. | |
(d) | Equities markets primarily include revenue related to market-making across global equity products, including cash instruments, derivatives, convertibles and Prime Services. | |
(e) | Credit portfolio revenue includes net interest income, fees and loan sale activity, as well as gains or losses on securities received as part of a loan restructuring, for IBs credit portfolio. Credit portfolio revenue also includes the results of risk management related to the Firms lending and derivative activities. | |
(f) | The compensation expense as a percentage of total net revenue ratio for the nine months ended September 30, 2010, excluding the payroll tax expense related to the U.K. Bank Payroll Tax on certain compensation awarded from December 9, 2009 to April 5, 2010 to relevant banking employees, which is a non-GAAP financial measure, was 37%. IB excludes this tax from the ratio because it enables comparability between periods. |
Page 9
JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except headcount and ratio data) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | ||||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | ||||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | ||||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (period-end) |
|||||||||||||||||||||||||||||||||||||||||
Loans: |
|||||||||||||||||||||||||||||||||||||||||
Loans retained (a) |
$ | 58,163 | $ | 56,107 | $ | 52,712 | $ | 53,145 | $ | 51,299 | 4 | % | 13 | % | $ | 58,163 | $ | 51,299 | 13 | % | |||||||||||||||||||||
Loans held-for-sale and loans at fair value |
2,311 | 3,466 | 5,070 | 3,746 | 2,252 | (33 | ) | 3 | 2,311 | 2,252 | 3 | ||||||||||||||||||||||||||||||
Total loans |
60,474 | 59,573 | 57,782 | 56,891 | 53,551 | 2 | 13 | 60,474 | 53,551 | 13 | |||||||||||||||||||||||||||||||
Equity |
40,000 | 40,000 | 40,000 | 40,000 | 40,000 | | | 40,000 | 40,000 | | |||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (average) |
|||||||||||||||||||||||||||||||||||||||||
Total assets |
$ | 803,667 | $ | 841,355 | $ | 815,828 | $ | 792,703 | $ | 746,926 | (4 | ) | 8 | $ | 820,239 | $ | 711,277 | 15 | |||||||||||||||||||||||
Trading assets debt and equity instruments |
329,984 | 374,694 | 368,956 | 346,990 | 300,517 | (12 | ) | 10 | 357,735 | 293,605 | 22 | ||||||||||||||||||||||||||||||
Trading assets derivative receivables |
79,044 | 69,346 | 67,462 | 72,491 | 76,530 | 14 | 3 | 71,993 | 69,547 | 4 | |||||||||||||||||||||||||||||||
Loans: |
|||||||||||||||||||||||||||||||||||||||||
Loans retained (a) |
57,265 | 54,590 | 53,370 | 52,502 | 53,331 | 5 | 7 | 55,089 | 55,042 | | |||||||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value |
2,431 | 4,154 | 3,835 | 3,504 | 2,678 | (41 | ) | (9 | ) | 3,468 | 3,118 | 11 | |||||||||||||||||||||||||||||
Total loans |
59,696 | 58,744 | 57,205 | 56,006 | 56,009 | 2 | 7 | 58,557 | 58,160 | 1 | |||||||||||||||||||||||||||||||
Adjusted assets (b) |
597,513 | 628,475 | 611,038 | 587,307 | 539,459 | (5 | ) | 11 | 612,292 | 524,658 | 17 | ||||||||||||||||||||||||||||||
Equity |
40,000 | 40,000 | 40,000 | 40,000 | 40,000 | | | 40,000 | 40,000 | | |||||||||||||||||||||||||||||||
Headcount |
26,615 | 27,716 | 26,494 | 26,314 | 26,373 | (4 | ) | 1 | 26,615 | 26,373 | 1 | ||||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS |
|||||||||||||||||||||||||||||||||||||||||
Net charge-offs/(recoveries) |
$ | (168 | ) | $ | 7 | $ | 123 | $ | (23 | ) | $ | 33 | NM | NM | $ | (38 | ) | $ | 758 | NM | |||||||||||||||||||||
Nonperforming assets: |
|||||||||||||||||||||||||||||||||||||||||
Nonaccrual loans: |
|||||||||||||||||||||||||||||||||||||||||
Nonaccrual loans retained (a)(c) |
1,274 | 1,494 | 2,388 | 3,159 | 2,025 | (15 | ) | (37 | ) | 1,274 | 2,025 | (37 | ) | ||||||||||||||||||||||||||||
Nonaccrual loans held-for-sale and loans
at fair value |
150 | 193 | 259 | 460 | 361 | (22 | ) | (58 | ) | 150 | 361 | (58 | ) | ||||||||||||||||||||||||||||
Total nonaccrual loans |
1,424 | 1,687 | 2,647 | 3,619 | 2,386 | (16 | ) | (40 | ) | 1,424 | 2,386 | (40 | ) | ||||||||||||||||||||||||||||
Derivative receivables |
7 | 18 | 21 | 34 | 255 | (61 | ) | (97 | ) | 7 | 255 | (97 | ) | ||||||||||||||||||||||||||||
Assets acquired in loan satisfactions |
77 | 83 | 73 | 117 | 148 | (7 | ) | (48 | ) | 77 | 148 | (48 | ) | ||||||||||||||||||||||||||||
Total nonperforming assets |
1,508 | 1,788 | 2,741 | 3,770 | 2,789 | (16 | ) | (46 | ) | 1,508 | 2,789 | (46 | ) | ||||||||||||||||||||||||||||
Allowance for credit losses: |
|||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses |
1,337 | 1,178 | 1,330 | 1,863 | 1,976 | 13 | (32 | ) | 1,337 | 1,976 | (32 | ) | |||||||||||||||||||||||||||||
Allowance for lending-related commitments |
444 | 383 | 424 | 447 | 570 | 16 | (22 | ) | 444 | 570 | (22 | ) | |||||||||||||||||||||||||||||
Total allowance for credit losses |
1,781 | 1,561 | 1,754 | 2,310 | 2,546 | 14 | (30 | ) | 1,781 | 2,546 | (30 | ) | |||||||||||||||||||||||||||||
Net charge-off/(recovery) rate (a)(d) |
(1.16) | % | 0.05 | % | 0.93 | % | (0.17 | )% | 0.25 | % | (0.09) | % | 1.84 | % | |||||||||||||||||||||||||||
Allow. for loan losses to period-end loans retained (a)(d) |
2.30 | 2.10 | 2.52 | 3.51 | 3.85 | 2.30 | 3.85 | ||||||||||||||||||||||||||||||||||
Allow. for loan losses to nonaccrual loans retained (a)(c)(d) |
105 | 79 | 56 | 59 | 98 | 105 | 98 | ||||||||||||||||||||||||||||||||||
Nonaccrual loans to total period-end loans |
2.35 | 2.83 | 4.58 | 6.36 | 4.46 | 2.35 | 4.46 |
(a) | Loans retained included credit portfolio loans, leveraged leases and other accrual loans, and excluded loans held-for-sale and loans at fair value. | |
(b) | Adjusted assets, a non-GAAP financial measure, is presented to assist the reader in comparing IBs asset and capital levels with those of other investment banks in the securities industry. For further discussion of adjusted assets, see page 44. | |
(c) | Allowance for loan losses of $320 million, $377 million, $567 million, $1.1 billion and $603 million were held against these nonaccrual loans at September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively. | |
(d) | Loans held-for-sale and loans at fair value were excluded when calculating the allowance coverage ratio and net charge-off/(recovery) rate. |
Page 10
JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio and rankings data) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
MARKET RISK AVERAGE TRADING AND CREDIT |
||||||||||||||||||||||||||||||||||||||||
PORTFOLIO VAR - 95% CONFIDENCE LEVEL |
||||||||||||||||||||||||||||||||||||||||
Trading activities: |
||||||||||||||||||||||||||||||||||||||||
Fixed income |
$ | 48 | $ | 45 | $ | 49 | $ | 53 | $ | 72 | 7 | % | (33) | % | $ | 47 | $ | 68 | (31) | % | ||||||||||||||||||||
Foreign exchange |
10 | 9 | 11 | 10 | 9 | 11 | 11 | 10 | 11 | (9 | ) | |||||||||||||||||||||||||||||
Equities |
19 | 25 | 29 | 23 | 21 | (24 | ) | (10 | ) | 24 | 22 | 9 | ||||||||||||||||||||||||||||
Commodities and other |
15 | 16 | 13 | 14 | 13 | (6 | ) | 15 | 15 | 16 | (6 | ) | ||||||||||||||||||||||||||||
Diversification (a) |
(39 | ) | (37 | ) | (38 | ) | (38 | ) | (38 | ) | (5 | ) | (3 | ) | (38 | ) | (43 | ) | 12 | |||||||||||||||||||||
Total trading VaR (b) |
53 | 58 | 64 | 62 | 77 | (9 | ) | (31 | ) | 58 | 74 | (22 | ) | |||||||||||||||||||||||||||
Credit portfolio VaR (c) |
38 | 27 | 26 | 26 | 30 | 41 | 27 | 30 | 25 | 20 | ||||||||||||||||||||||||||||||
Diversification (a) |
(21 | ) | (8 | ) | (7 | ) | (10 | ) | (8 | ) | (163 | ) | (163 | ) | (11 | ) | (9 | ) | (22 | ) | ||||||||||||||||||||
Total trading and credit portfolio VaR |
$ | 70 | $ | 77 | $ | 83 | $ | 78 | $ | 99 | (9 | ) | (29 | ) | $ | 77 | $ | 90 | (14 | ) | ||||||||||||||||||||
NINE MONTHS ENDED SEPTEMBER 30, 2011 |
FULL YEAR 2010 | |||||||||||||||
MARKET SHARES AND RANKINGS (d) | Market Share | Rankings | Market Share | Rankings | ||||||||||||
Global investment banking fees (e) |
8.4 | % | #1 | 7.6 | % | #1 | ||||||||||
Debt, equity and equity-related |
||||||||||||||||
Global |
6.8 | 1 | 7.2 | 1 | ||||||||||||
U.S. |
11.2 | 1 | 11.1 | 1 | ||||||||||||
Syndicated loans |
||||||||||||||||
Global |
11.3 | 1 | 8.5 | 2 | ||||||||||||
U.S. |
21.6 | 1 | 19.1 | 2 | ||||||||||||
Long-term debt (f) |
||||||||||||||||
Global |
6.8 | 1 | 7.2 | 2 | ||||||||||||
U.S. |
11.2 | 1 | 10.9 | 2 | ||||||||||||
Equity and equity-related |
||||||||||||||||
Global (g) |
7.0 | 4 | 7.3 | 3 | ||||||||||||
U.S. |
12.3 | 1 | 13.1 | 2 | ||||||||||||
Announced M&A (h) |
||||||||||||||||
Global |
22.4 | 2 | 16.2 | 4 | ||||||||||||
U.S. |
34.0 | 1 | 22.2 | 3 |
(a) | Average value-at-risk ( VaR) was less than the sum of the VaR of the components described above, which is due to portfolio diversification. The diversification effect reflects the fact that the risks were not perfectly correlated. The risk of a portfolio of positions is therefore usually less than the sum of the risks of the positions themselves. | |
(b) | Trading VaR includes substantially all trading activities in IB, including the credit spread sensitivities of certain mortgage products and syndicated lending facilities that the Firm intends to distribute; however, particular risk parameters of certain products are not fully captured, for example, correlation risk. Trading VaR does not include the debit valuation adjustments (DVA) taken on derivative and structured liabilities to reflect the credit quality of the Firm. | |
(c) | Credit portfolio VaR includes the derivative credit valuation adjustments (CVA), hedges of the CVA and mark-to-market (MTM) hedges of the retained loan portfolio, which are all reported in principal transactions revenue. This VaR does not include the retained loan portfolio, which is not MTM. | |
(d) | Source: Dealogic. Global Investment Banking fees reflects the ranking of fees and market share. Remainder of rankings reflects transaction volume rank and market share. | |
(e) | Global IB fees exclude money market, short-term debt and shelf deals. | |
(f) | Long-term debt tables include investment-grade, high-yield, supranationals, sovereigns, agencies, covered bonds, asset-backed securities and mortgage-backed securities; and exclude money market, short-term debt, and U.S. municipal securities. | |
(g) | Equity and equity-related rankings include rights offerings and Chinese A-Shares. | |
(h) | Global announced M&A is based on transaction value at announcement; all other rankings are based on transaction proceeds, with full credit to each book manager/equal if joint. Because of joint assignments, market share of all participants will add up to more than 100%. M&A for the nine months ended September 30, 2011 and full year 2010 reflects the removal of any withdrawn transactions. U.S. announced M&A represents any U.S. involvement ranking. |
Page 11
JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS, CONTINUED (in millions) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
INTERNATIONAL METRICS |
||||||||||||||||||||||||||||||||||||||||
Total net revenue: (a) |
||||||||||||||||||||||||||||||||||||||||
Asia/Pacific |
$ | 948 | $ | 762 | $ | 1,122 | $ | 927 | $ | 993 | 24 | % | (5 | )% | $ | 2,832 | $ | 2,882 | (2 | )% | ||||||||||||||||||||
Latin America/Caribbean |
175 | 337 | 327 | 172 | 167 | (48 | ) | 5 | 839 | 725 | 16 | |||||||||||||||||||||||||||||
Europe/Middle East/Africa |
1,995 | 2,478 | 2,592 | 1,423 | 1,538 | (19 | ) | 30 | 7,065 | 5,957 | 19 | |||||||||||||||||||||||||||||
North America |
3,251 | 3,737 | 4,192 | 3,691 | 2,655 | (13 | ) | 22 | 11,180 | 10,440 | 7 | |||||||||||||||||||||||||||||
Total net revenue |
$ | 6,369 | $ | 7,314 | $ | 8,233 | $ | 6,213 | $ | 5,353 | (13 | ) | 19 | $ | 21,916 | $ | 20,004 | 10 | ||||||||||||||||||||||
Loans (period-end): (b) |
||||||||||||||||||||||||||||||||||||||||
Asia/Pacific |
$ | 6,892 | $ | 6,211 | $ | 5,472 | $ | 5,924 | $ | 5,595 | 11 | 23 | $ | 6,892 | $ | 5,595 | 23 | |||||||||||||||||||||||
Latin America/Caribbean |
3,222 | 2,633 | 2,190 | 2,200 | 1,545 | 22 | 109 | 3,222 | 1,545 | 109 | ||||||||||||||||||||||||||||||
Europe/Middle East/Africa |
15,361 | 15,370 | 14,059 | 13,961 | 12,781 | | 20 | 15,361 | 12,781 | 20 | ||||||||||||||||||||||||||||||
North America |
32,688 | 31,893 | 30,991 | 31,060 | 31,378 | 2 | 4 | 32,688 | 31,378 | 4 | ||||||||||||||||||||||||||||||
Total loans |
$ | 58,163 | $ | 56,107 | $ | 52,712 | $ | 53,145 | $ | 51,299 | 4 | 13 | $ | 58,163 | $ | 51,299 | 13 |
(a) | Regional revenues are based primarily on the domicile of the client and/or location of the trading desk. | |
(b) | Includes retained loans based on the domicile of the customer. Excludes loans held-for-sale and loans at fair value. |
Page 12
JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS (in millions, except ratio and headcount data) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
INCOME STATEMENT |
||||||||||||||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||||||||||||||
Lending- and deposit-related fees |
$ | 833 | $ | 813 | $ | 736 | $ | 728 | $ | 743 | 2 | % | 12 | % | $ | 2,382 | $ | 2,333 | 2 | % | ||||||||||||||||||||
Asset management, administration and commissions |
513 | 499 | 485 | 454 | 441 | 3 | 16 | 1,497 | 1,322 | 13 | ||||||||||||||||||||||||||||||
Mortgage fees and related income |
1,380 | 1,100 | (489 | ) | 1,609 | 705 | 25 | 96 | 1,991 | 2,246 | (11 | ) | ||||||||||||||||||||||||||||
Credit card income |
611 | 572 | 537 | 524 | 502 | 7 | 22 | 1,720 | 1,431 | 20 | ||||||||||||||||||||||||||||||
Other income |
136 | 131 | 111 | 128 | 143 | 4 | (5 | ) | 378 | 452 | (16 | ) | ||||||||||||||||||||||||||||
Noninterest revenue |
3,473 | 3,115 | 1,380 | 3,443 | 2,534 | 11 | 37 | 7,968 | 7,784 | 2 | ||||||||||||||||||||||||||||||
Net interest income |
4,062 | 4,027 | 4,086 | 4,256 | 4,280 | 1 | (5 | ) | 12,175 | 12,964 | (6 | ) | ||||||||||||||||||||||||||||
TOTAL NET REVENUE (a) |
7,535 | 7,142 | 5,466 | 7,699 | 6,814 | 6 | 11 | 20,143 | 20,748 | (3 | ) | |||||||||||||||||||||||||||||
Provision for credit losses |
1,027 | 994 | 1,199 | 2,418 | 1,397 | 3 | (26 | ) | 3,220 | 6,501 | (50 | ) | ||||||||||||||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||||||||||||||
Compensation expense |
2,101 | 1,937 | 1,876 | 1,816 | 1,825 | 8 | 15 | 5,914 | 5,256 | 13 | ||||||||||||||||||||||||||||||
Noncompensation expense |
2,404 | 3,274 | 2,964 | 2,587 | 2,276 | (27 | ) | 6 | 8,642 | 6,548 | 32 | |||||||||||||||||||||||||||||
Amortization of intangibles |
60 | 60 | 60 | 68 | 69 | | (13 | ) | 180 | 208 | (13 | ) | ||||||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE |
4,565 | 5,271 | 4,900 | 4,471 | 4,170 | (13 | ) | 9 | 14,736 | 12,012 | 23 | |||||||||||||||||||||||||||||
Income/(loss) before income tax expense/(benefit) |
1,943 | 877 | (633 | ) | 810 | 1,247 | 122 | 56 | 2,187 | 2,235 | (2 | ) | ||||||||||||||||||||||||||||
Income tax expense/(benefit) |
782 | 494 | (234 | ) | 351 | 531 | 58 | 47 | 1,042 | 966 | 8 | |||||||||||||||||||||||||||||
NET INCOME/(LOSS) |
$ | 1,161 | $ | 383 | $ | (399 | ) | $ | 459 | $ | 716 | 203 | 62 | $ | 1,145 | $ | 1,269 | (10 | ) | |||||||||||||||||||||
FINANCIAL RATIOS |
||||||||||||||||||||||||||||||||||||||||
ROE |
18 | % | 6 | % | (6) | % | 7 | % | 12 | % | 6 | % | 7 | % | ||||||||||||||||||||||||||
Overhead ratio |
61 | 74 | 90 | 58 | 61 | 73 | 58 | |||||||||||||||||||||||||||||||||
Overhead ratio excluding core deposit intangibles (b) |
60 | 73 | 89 | 57 | 60 | 72 | 57 | |||||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (period-end) |
||||||||||||||||||||||||||||||||||||||||
Assets |
$ | 276,799 | $ | 283,753 | $ | 289,336 | $ | 299,950 | $ | 300,913 | (2 | ) | (8 | ) | $ | 276,799 | $ | 300,913 | (8 | ) | ||||||||||||||||||||
Loans: |
||||||||||||||||||||||||||||||||||||||||
Loans retained |
235,572 | 241,127 | 247,128 | 253,904 | 260,647 | (2 | ) | (10 | ) | 235,572 | 260,647 | (10 | ) | |||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value (c) |
13,153 | 13,558 | 12,234 | 14,863 | 13,032 | (3 | ) | 1 | 13,153 | 13,032 | 1 | |||||||||||||||||||||||||||||
Total loans |
248,725 | 254,685 | 259,362 | 268,767 | 273,679 | (2 | ) | (9 | ) | 248,725 | 273,679 | (9 | ) | |||||||||||||||||||||||||||
Deposits |
388,735 | 378,371 | 379,605 | 369,925 | 363,295 | 3 | 7 | 388,735 | 363,295 | 7 | ||||||||||||||||||||||||||||||
Equity |
25,000 | 25,000 | 25,000 | 24,600 | 24,600 | | 2 | 25,000 | 24,600 | 2 | ||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (average) |
||||||||||||||||||||||||||||||||||||||||
Assets |
283,443 | 287,235 | 297,938 | 307,040 | 309,523 | (1 | ) | (8 | ) | 289,486 | 316,407 | (9 | ) | |||||||||||||||||||||||||||
Loans: |
||||||||||||||||||||||||||||||||||||||||
Loans retained |
238,273 | 244,030 | 250,443 | 257,500 | 264,467 | (2 | ) | (10 | ) | 244,204 | 272,744 | (10 | ) | |||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value (c) |
16,608 | 14,613 | 17,519 | 18,877 | 15,571 | 14 | 7 | 16,243 | 14,222 | 14 | ||||||||||||||||||||||||||||||
Total loans |
254,881 | 258,643 | 267,962 | 276,377 | 280,038 | (1 | ) | (9 | ) | 260,447 | 286,966 | (9 | ) | |||||||||||||||||||||||||||
Deposits |
382,202 | 378,932 | 371,787 | 367,032 | 361,668 | 1 | 6 | 377,678 | 359,669 | 5 | ||||||||||||||||||||||||||||||
Equity |
25,000 | 25,000 | 25,000 | 24,600 | 24,600 | | 2 | 25,000 | 24,600 | 2 | ||||||||||||||||||||||||||||||
Headcount |
128,992 | 122,728 | 118,547 | 116,882 | 114,440 | 5 | 13 | 128,992 | 114,440 | 13 |
(a) | Total net revenue included tax-equivalent adjustments associated with tax-exempt loans to municipalities and other qualified entities of $2 million, $1 million, $2 million, zero and $2 million for the three months ended September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively, and $5 million and $8 million for the nine months ended September 30, 2011 and 2010, respectively. | |
(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 would result in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this method would therefore result in an improving overhead ratio over time, all things remaining equal. This non-GAAP ratio excludes Consumer & Business Bankings CDI amortization expense related to prior business combination transactions of $60 million, $60 million, $60 million, $68 million and $69 million for the three months ended September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively, and $180 million and $208 million for the nine months ended September 30, 2011 and 2010, respectively. | |
(c) | Loans at fair value consist of prime mortgages originated with the intent to sell that are accounted for at fair value and classified as trading assets on the Consolidated Balance Sheets. These loans totaled $13.0 billion, $13.3 billion, $12.0 billion, $14.7 billion and $12.6 billion at September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively. Average balances of these loans totaled $16.5 billion, $14.5 billion, $17.4 billion, $18.7 billion and $15.3 billion for the three months ended September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively, and $16.1 billion and $14.0 billion for the nine months ended September 30, 2011 and 2010, respectively. |
Page 13
JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS |
||||||||||||||||||||||||||||||||||||||||
Net charge-offs |
$ | 1,027 | $ | 1,069 | $ | 1,199 | $ | 1,970 | $ | 1,397 | (4) | % | (26) | % | $ | 3,295 | $ | 5,251 | (37) | % | ||||||||||||||||||||
Nonaccrual loans: |
||||||||||||||||||||||||||||||||||||||||
Nonaccrual loans retained |
7,579 | 8,088 | 8,278 | 8,568 | 9,601 | (6 | ) | (21 | ) | 7,579 | 9,601 | (21 | ) | |||||||||||||||||||||||||||
Nonaccrual loans held-for-sale and loans
at fair value |
132 | 142 | 150 | 145 | 166 | (7 | ) | (20 | ) | 132 | 166 | (20 | ) | |||||||||||||||||||||||||||
Total nonaccrual loans (a)(b)(c) |
7,711 | 8,230 | 8,428 | 8,713 | 9,767 | (6 | ) | (21 | ) | 7,711 | 9,767 | (21 | ) | |||||||||||||||||||||||||||
Nonperforming assets (a)(b)(c) |
8,576 | 9,175 | 9,632 | 9,999 | 11,155 | (7 | ) | (23 | ) | 8,576 | 11,155 | (23 | ) | |||||||||||||||||||||||||||
Allowance for loan losses |
15,479 | 15,479 | 15,554 | 15,554 | 15,106 | | 2 | 15,479 | 15,106 | 2 | ||||||||||||||||||||||||||||||
Net charge-off rate (d) |
1.71 | % | 1.76 | % | 1.94 | % | 3.04 | % | 2.10 | % | 1.80 | % | 2.57 | % | ||||||||||||||||||||||||||
Net charge-off rate excluding purchased credit-impaired |
||||||||||||||||||||||||||||||||||||||||
(PCI) loans (d)(e) |
2.39 | 2.46 | 2.72 | 4.25 | 2.94 | 2.53 | 3.61 | |||||||||||||||||||||||||||||||||
Allowance for loan losses to ending loans retained (d) |
6.57 | 6.42 | 6.29 | 6.13 | 5.80 | 6.57 | 5.80 | |||||||||||||||||||||||||||||||||
Allowance
for loan losses to ending loans retained excluding PCI loans (d)(e) |
6.26 | 6.12 | 6.02 | 5.86 | 6.61 | 6.26 | 6.61 | |||||||||||||||||||||||||||||||||
Allowance
for loan losses to nonaccrual loans retained (a)(d)(e) |
139 | 130 | 128 | 124 | 128 | 139 | 128 | |||||||||||||||||||||||||||||||||
Nonaccrual loans to total loans |
3.10 | 3.23 | 3.25 | 3.24 | 3.57 | 3.10 | 3.57 | |||||||||||||||||||||||||||||||||
Nonaccrual loans to total loans
excluding PCI loans (a) |
4.25 | 4.43 | 4.47 | 4.45 | 4.91 | 4.25 | 4.91 |
(a) | Excludes PCI loans that were acquired as part of the Washington Mutual transaction, which are accounted for on a pool basis. Since each pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, the past-due status of the pools, or that of the individual loans within the pools, is not meaningful. Because the Firm is recognizing interest income on each pool of loans, they are all considered to be performing. | |
(b) | Certain of these loans are classified as trading assets on the Consolidated Balance Sheets. | |
(c) | At September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, nonperforming assets excluded: (1) mortgage loans insured by U.S. government agencies of $9.5 billion, $9.1 billion, $8.8 billion, $9.4 billion and $9.2 billion, respectively, that are 90 or more days past due; and (2) real estate owned insured by U.S. government agencies of $2.4 billion, $2.4 billion, $2.3 billion, $1.9 billion and $1.7 billion, respectively. These amounts are excluded as reimbursement of insured amounts is proceeding normally. | |
(d) | Loans held-for-sale and loans accounted for at fair value were excluded when calculating the allowance coverage ratio and the net charge-off rate. | |
(e) | Excludes the impact of PCI loans that were acquired as part of the Washington Mutual transaction. These loans were accounted for at fair value on the acquisition date, which incorporated managements estimate, as of that date, of credit losses over the remaining life of the portfolio. An allowance for loan losses of $4.9 billion, $4.9 billion, $4.9 billion, $4.9 billion and $2.8 billion was recorded for these loans at September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively, which was also excluded from the applicable ratios. To date, no charge-offs have been recorded for these loans. |
Page 14
JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
CONSUMER & BUSINESS BANKING |
||||||||||||||||||||||||||||||||||||||||
Noninterest revenue |
$ | 1,952 | $ | 1,889 | $ | 1,757 | $ | 1,716 | $ | 1,692 | 3 | % | 15 | % | $ | 5,598 | $ | 5,128 | 9 | % | ||||||||||||||||||||
Net interest income |
2,730 | 2,706 | 2,659 | 2,693 | 2,744 | 1 | (1 | ) | 8,095 | 8,191 | (1 | ) | ||||||||||||||||||||||||||||
Total net revenue |
4,682 | 4,595 | 4,416 | 4,409 | 4,436 | 2 | 6 | 13,693 | 13,319 | 3 | ||||||||||||||||||||||||||||||
Provision for credit losses |
126 | 42 | 119 | 69 | 173 | 200 | (27 | ) | 287 | 561 | (49 | ) | ||||||||||||||||||||||||||||
Noninterest expense |
2,842 | 2,713 | 2,799 | 2,676 | 2,798 | 5 | 2 | 8,354 | 8,041 | 4 | ||||||||||||||||||||||||||||||
Income before income tax expense |
1,714 | 1,840 | 1,498 | 1,664 | 1,465 | (7 | ) | 17 | 5,052 | 4,717 | 7 | |||||||||||||||||||||||||||||
Net income |
$ | 1,023 | $ | 1,098 | $ | 893 | $ | 952 | $ | 839 | (7 | ) | 22 | $ | 3,014 | $ | 2,700 | 12 | ||||||||||||||||||||||
Overhead ratio |
61 | % | 59 | % | 63 | % | 61 | % | 63 | % | 61 | % | 60 | % | ||||||||||||||||||||||||||
Overhead
ratio excluding core deposit
intangibles (a) |
59 | 58 | 62 | 59 | 62 | 60 | 59 | |||||||||||||||||||||||||||||||||
BUSINESS METRICS
(in billions, except where otherwise noted) |
||||||||||||||||||||||||||||||||||||||||
Business banking origination volume (in millions) |
$ | 1,440 | $ | 1,573 | $ | 1,425 | $ | 1,435 | $ | 1,126 | (8 | ) | 28 | $ | 4,438 | $ | 3,253 | 36 | ||||||||||||||||||||||
End-of-period loans |
17.3 | 17.1 | 17.0 | 16.8 | 16.6 | 1 | 4 | 17.3 | 16.6 | 4 | ||||||||||||||||||||||||||||||
End-of-period deposits: |
||||||||||||||||||||||||||||||||||||||||
Checking |
142.1 | 136.3 | 137.5 | 131.7 | 124.2 | 4 | 14 | 142.1 | 124.2 | 14 | ||||||||||||||||||||||||||||||
Savings |
186.7 | 182.1 | 180.3 | 170.6 | 166.4 | 3 | 12 | 186.7 | 166.4 | 12 | ||||||||||||||||||||||||||||||
Time and other |
39.0 | 42.0 | 44.0 | 46.0 | 48.9 | (7 | ) | (20 | ) | 39.0 | 48.9 | (20 | ) | |||||||||||||||||||||||||||
Total end-of-period deposits |
367.8 | 360.4 | 361.8 | 348.3 | 339.5 | 2 | 8 | 367.8 | 339.5 | 8 | ||||||||||||||||||||||||||||||
Average loans |
17.2 | 17.1 | 16.9 | 16.6 | 16.6 | 1 | 4 | 17.0 | 17.0 | | ||||||||||||||||||||||||||||||
Average deposits: |
||||||||||||||||||||||||||||||||||||||||
Checking |
137.0 | 136.6 | 132.0 | 126.6 | 123.5 | | 11 | 135.2 | 122.4 | 10 | ||||||||||||||||||||||||||||||
Savings |
184.6 | 180.9 | 175.1 | 168.7 | 166.2 | 2 | 11 | 180.2 | 165.3 | 9 | ||||||||||||||||||||||||||||||
Time and other |
40.6 | 43.0 | 45.0 | 47.5 | 49.9 | (6 | ) | (19 | ) | 42.9 | 52.4 | (18 | ) | |||||||||||||||||||||||||||
Total average deposits |
362.2 | 360.5 | 352.1 | 342.8 | 339.6 | | 7 | 358.3 | 340.1 | 5 | ||||||||||||||||||||||||||||||
Deposit margin |
2.82 | % | 2.83 | % | 2.88 | % | 2.96 | % | 3.04 | % | 2.85 | % | 3.01 | % | ||||||||||||||||||||||||||
Average assets |
$ | 30.1 | $ | 29.0 | $ | 29.4 | $ | 29.1 | $ | 28.5 | 4 | 6 | $ | 29.5 | $ | 29.4 | | |||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS |
||||||||||||||||||||||||||||||||||||||||
Net charge-offs |
126 | 117 | 119 | 169 | 173 | 8 | (27 | ) | 362 | 561 | (35 | ) | ||||||||||||||||||||||||||||
Net charge-off rate |
2.91 | % | 2.74 | % | 2.86 | % | 4.04 | % | 4.13 | % | 2.85 | % | 4.41 | % | ||||||||||||||||||||||||||
Nonperforming assets |
$ | 773 | $ | 784 | $ | 822 | $ | 846 | $ | 913 | (1 | ) | (15 | ) | $ | 773 | $ | 913 | (15 | ) | ||||||||||||||||||||
RETAIL BRANCH BUSINESS METRICS |
||||||||||||||||||||||||||||||||||||||||
Investment sales volume |
5,102 | 6,334 | 6,584 | 6,069 | 5,798 | (19 | ) | (12 | ) | 18,020 | 17,510 | 3 | ||||||||||||||||||||||||||||
Client investment assets |
132,255 | 140,285 | 138,150 | 133,114 | 127,743 | (6 | ) | 4 | 132,255 | 127,743 | 4 | |||||||||||||||||||||||||||||
% managed accounts |
23 | % | 23 | % | 22 | % | 20 | % | 18 | % | 23 | % | 18 | % | ||||||||||||||||||||||||||
Number of: |
||||||||||||||||||||||||||||||||||||||||
Branches |
5,396 | 5,340 | 5,292 | 5,268 | 5,192 | 1 | 4 | 5,396 | 5,192 | 4 | ||||||||||||||||||||||||||||||
Chase Private Client branch locations |
139 | 16 | 16 | 16 | 16 | NM | NM | 139 | 16 | NM | ||||||||||||||||||||||||||||||
ATMs |
16,708 | 16,443 | 16,265 | 16,145 | 15,815 | 2 | 6 | 16,708 | 15,815 | 6 | ||||||||||||||||||||||||||||||
Personal bankers |
24,205 | 23,308 | 21,875 | 21,715 | 21,438 | 4 | 13 | 24,205 | 21,438 | 13 | ||||||||||||||||||||||||||||||
Sales specialists |
7,891 | 7,630 | 7,336 | 7,196 | 7,123 | 3 | 11 | 7,891 | 7,123 | 11 | ||||||||||||||||||||||||||||||
Active online customers (in thousands) |
18,372 | 18,085 | 18,318 | 17,744 | 17,167 | 2 | 7 | 18,372 | 17,167 | 7 | ||||||||||||||||||||||||||||||
Active mobile customers (in thousands) |
7,266 | 6,608 | 6,048 | 5,354 | 4,600 | 10 | 58 | 7,266 | 4,600 | 58 | ||||||||||||||||||||||||||||||
Chase Private Clients |
11,711 | 5,807 | 4,829 | 4,242 | 3,890 | 102 | 201 | 11,711 | 3,890 | 201 | ||||||||||||||||||||||||||||||
Checking accounts (in thousands) |
26,541 | 26,266 | 26,622 | 27,252 | 27,014 | 1 | (2 | ) | 26,541 | 27,014 | (2 | ) |
(a) | Consumer & Business Banking uses the overhead ratio (excluding the amortization of CDI), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in the overhead ratio calculation would result in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this method would therefore result in an improving overhead ratio over time, all things remaining equal. This non-GAAP ratio excludes Consumer & Business Bankings CDI amortization expense related to prior business combination transactions of $60 million, $60 million, $60 million, $68 million and $69 million for the three months ended September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively, and $180 million and $208 million for the nine months ended September 30, 2011 and 2010, respectively. |
Page 15
JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, |
|||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
MORTGAGE PRODUCTION AND SERVICING |
||||||||||||||||||||||||||||||||||||||||
Mortgage fees and related income |
$ | 1,380 | $ | 1,100 | $ | (489 | ) | $ | 1,609 | $ | 705 | 25 | % | 96 | % | $ | 1,991 | $ | 2,246 | (11) | % | |||||||||||||||||||
Other noninterest revenue |
118 | 106 | 104 | 108 | 116 | 11 | 2 | 328 | 305 | 8 | ||||||||||||||||||||||||||||||
Net interest income |
204 | 124 | 271 | 244 | 232 | 65 | (12 | ) | 599 | 660 | (9 | ) | ||||||||||||||||||||||||||||
Total net revenue |
1,702 | 1,330 | (114 | ) | 1,961 | 1,053 | 28 | 62 | 2,918 | 3,211 | (9 | ) | ||||||||||||||||||||||||||||
Provision for credit losses |
2 | (2 | ) | 4 | 12 | 27 | NM | (93 | ) | 4 | 46 | (91 | ) | |||||||||||||||||||||||||||
Noninterest expense |
1,360 | 2,187 | 1,746 | 1,382 | 982 | (38 | ) | 38 | 5,293 | 2,757 | 92 | |||||||||||||||||||||||||||||
Income/(loss) before income tax expense/(benefit) |
340 | (855 | ) | (1,864 | ) | 567 | 44 | NM | NM | (2,379 | ) | 408 | NM | |||||||||||||||||||||||||||
Net income/(loss) |
$ | 205 | $ | (649 | ) | $ | (1,130 | ) | $ | 330 | $ | 25 | NM | NM | $ | (1,574 | ) | $ | 239 | NM | ||||||||||||||||||||
Overhead ratio |
80 | % | 164 | % | NM | % | 70 | % | 93 | % | 181 | % | 86 | % | ||||||||||||||||||||||||||
FUNCTIONAL RESULTS |
||||||||||||||||||||||||||||||||||||||||
Production |
||||||||||||||||||||||||||||||||||||||||
Production-related revenue, excl. repurchase losses |
$ | 1,304 | $ | 966 | $ | 897 | $ | 1,338 | $ | 1,448 | 35 | (10 | ) | $ | 3,167 | $ | 2,971 | 7 | ||||||||||||||||||||||
Production expense |
497 | 457 | 424 | 436 | 434 | 9 | 15 | 1,378 | 1,177 | 17 | ||||||||||||||||||||||||||||||
Income, excluding repurchase losses |
807 | 509 | 473 | 902 | 1,014 | 59 | (20 | ) | 1,789 | 1,794 | | |||||||||||||||||||||||||||||
Repurchase losses |
(314 | ) | (223 | ) | (420 | ) | (349 | ) | (1,464 | ) | (41 | ) | 79 | (957 | ) | (2,563 | ) | 63 | ||||||||||||||||||||||
Income/(loss) before income tax expense/(benefit) |
493 | 286 | 53 | 553 | (450 | ) | 72 | NM | 832 | (769 | ) | NM | ||||||||||||||||||||||||||||
Servicing |
||||||||||||||||||||||||||||||||||||||||
Servicing-related revenue |
1,154 | 1,040 | 1,208 | 1,237 | 1,282 | 11 | (10 | ) | 3,402 | 3,771 | (10 | ) | ||||||||||||||||||||||||||||
MSR asset amortization |
(457 | ) | (478 | ) | (563 | ) | (555 | ) | (604 | ) | 4 | 24 | (1,498 | ) | (1,829 | ) | 18 | |||||||||||||||||||||||
Servicing expense |
866 | 1,728 | 1,326 | 958 | 574 | (50 | ) | 51 | 3,920 | 1,626 | ||||||||||||||||||||||||||||||
Income/(loss), excluding MSR risk management |
(169 | ) | (1,166 | ) | (681 | ) | (276 | ) | 104 | 86 | NM | (2,016 | ) | 316 | NM | |||||||||||||||||||||||||
MSR risk management (a) |
16 | 25 | (1,236 | ) | 290 | 390 | (36 | ) | (96 | ) | (1,195 | ) | 861 | NM | ||||||||||||||||||||||||||
Income/(loss) before income tax expense/(benefit) |
(153 | ) | (1,141 | ) | (1,917 | ) | 14 | 494 | 87 | NM | (3,211 | ) | 1,177 | NM | ||||||||||||||||||||||||||
Net Income/(loss) |
$ | 205 | $ | (649 | ) | $ | (1,130 | ) | $ | 330 | $ | 25 | NM | NM | $ | (1,574 | ) | $ | 239 | NM | ||||||||||||||||||||
SELECTED BALANCE SHEET DATA (in billions) |
||||||||||||||||||||||||||||||||||||||||
End-of-period loans: |
||||||||||||||||||||||||||||||||||||||||
Prime mortgage, including option ARMs (b)(c) |
$ | 14.8 | $ | 14.3 | $ | 14.1 | $ | 14.2 | $ | 13.8 | 3 | 7 | $ | 14.8 | $ | 13.8 | 7 | |||||||||||||||||||||||
Loans held-for-sale and loans at fair value (d) |
13.2 | 13.6 | 12.2 | 14.9 | 13.0 | (3 | ) | 2 | 13.2 | 13.0 | 2 | |||||||||||||||||||||||||||||
Average loans: |
||||||||||||||||||||||||||||||||||||||||
Prime mortgage, including option ARMs (b)(e) |
14.4 | 14.1 | 14.0 | 13.9 | 13.6 | 2 | 6 | 14.2 | 13.3 | 7 | ||||||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value (d) |
16.6 | 14.6 | 17.5 | 18.9 | 15.6 | 14 | 6 | 16.2 | 14.2 | 14 | ||||||||||||||||||||||||||||||
Average assets |
59.7 | 58.1 | 61.4 | 62.7 | 58.5 | 3 | 2 | 59.7 | 56.1 | 6 | ||||||||||||||||||||||||||||||
Repurchase reserve (ending) |
3.2 | 3.2 | 3.2 | 3.0 | 3.0 | | 7 | 3.2 | 3.0 | 7 | ||||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS |
||||||||||||||||||||||||||||||||||||||||
Net charge-offs/(recoveries): |
||||||||||||||||||||||||||||||||||||||||
Prime mortgage, including option ARMs |
2 | (2 | ) | 4 | 12 | 10 | NM | (80 | ) | 4 | 29 | (86 | ) | |||||||||||||||||||||||||||
Net charge-off/(recovery) rate: |
||||||||||||||||||||||||||||||||||||||||
Prime mortgage, including option ARMs (e) |
0.06 | % | (0.06) | % | 0.12 | % | 0.35 | % | 0.30 | % | 0.04 | % | 0.30 | % | ||||||||||||||||||||||||||
30+ day delinquency rate (c)(f) |
3.35 | 3.30 | 3.21 | 3.44 | 3.40 | 3.35 | 3.40 | |||||||||||||||||||||||||||||||||
Nonperforming assets (g) |
$ | 691 | $ | 662 | $ | 658 | $ | 729 | $ | 786 | 4 | (12 | ) | $ | 691 | $ | 786 | (12 | ) |
(a) | MSR risk management predominantly includes (a) changes in the MSR asset fair value due to changes in market interest rates and other modeled inputs and assumptions, and (b) changes in the value of the derivatives used to hedge the MSR asset. For the nine months ended September 30, 2011, the Firm recognized a loss of $6.3 billion due to a decrease in the fair value of the MSR asset, which included $1.1 billion related to revised cost to service assumptions incorporated in the MSR valuation in the first quarter of 2011. The remaining loss of $5.2 billion is predominantly the result of a decrease in interest rates. Offsetting this loss, the Firm recognized a $5.1 billion gain on the derivatives used to hedge the MSR asset during the nine months ended September 30, 2011. | |
(b) | Predominantly represents prime loans repurchased from Government National Mortgage Association (Ginnie Mae) pools, which are insured by U.S. government agencies. | |
(c) | End-of-period loans owned includes loans held-for-sale of $131 million, $221 million, $188 million, $154 million and $428 million at September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively. No allowance for loan losses was recorded for these loans. These amounts are excluded when calculating the 30+ day delinquency rate. | |
(d) | Loans at fair value consist of prime mortgages originated with the intent to sell that are accounted for at fair value and classified as trading assets on the Consolidated Balance Sheets. These loans totaled $13.0 billion, $13.3 billion, $12.0 billion, $14.7 billion and $12.6 billion at September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively. Average balances of these loans totaled $16.5 billion, $14.5 billion, $17.4 billion, $18.7 billion and $15.3 billion for the three months ended September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively, and $16.1 billion and $14.0 billion for the nine months ended September 30, 2011 and 2010, respectively. | |
(e) | Average loans owned includes loans held-for-sale of $108 million, $76 million, $133 million, $185 million and $226 million for the three months ended September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively, and $105 million and $210 million for the nine months ended September 30, 2011 and 2010. No allowance for loan losses was recorded for these loans. These amounts are excluded when calculating the net charge-off rate. | |
(f) | Excludes mortgage loans insured by U.S. government agencies of $10.5 billion, $10.1 billion, $9.5 billion, $10.3 billion and $10.2 billion at September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively, that are 30 or more days past due. These amounts are excluded as reimbursement of insured amounts is proceeding normally. | |
(g) | At September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, nonperforming assets excluded: (1) mortgage loans insured by U.S. government agencies of $9.5 billion, $9.1 billion, $8.8 billion, $9.4 billion and $9.2 billion, respectively, that are 90 or more days past due; and (2) real estate owned insured by U.S. government agencies of $2.4 billion, $2.4 billion, $2.3 billion, $1.9 billion and $1.7 billion, respectively. These amounts are excluded as reimbursement of insured amounts is proceeding normally. |
Page 16
JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in billions, except ratio data) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, |
|||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
MORTGAGE PRODUCTION AND SERVICING
(continued) |
||||||||||||||||||||||||||||||||||||||||
BUSINESS METRICS |
||||||||||||||||||||||||||||||||||||||||
Origination volume by channel |
||||||||||||||||||||||||||||||||||||||||
Retail |
$ | 22.4 | $ | 20.7 | $ | 21.0 | $ | 22.9 | $ | 19.2 | 8 | % | 17 | % | $ | 64.1 | $ | 45.9 | 40 | % | ||||||||||||||||||||
Wholesale (a) |
0.1 | 0.1 | 0.2 | 0.3 | 0.2 | | (50 | ) | 0.4 | 1.0 | (60 | ) | ||||||||||||||||||||||||||||
Correspondent (a) |
13.4 | 10.3 | 13.5 | 25.5 | 19.1 | 30 | (30 | ) | 37.2 | 49.8 | (25 | ) | ||||||||||||||||||||||||||||
CNT (negotiated transactions) |
0.9 | 2.9 | 1.5 | 2.1 | 2.4 | (69 | ) | (63 | ) | 5.3 | 8.1 | (35 | ) | |||||||||||||||||||||||||||
Total origination volume |
36.8 | 34.0 | 36.2 | 50.8 | 40.9 | 8 | (10 | ) | 107.0 | 104.8 | 2 | |||||||||||||||||||||||||||||
Application volume by channel |
||||||||||||||||||||||||||||||||||||||||
Retail |
37.7 | 33.6 | 31.3 | 32.4 | 34.6 | 12 | 9 | 102.6 | 82.7 | 24 | ||||||||||||||||||||||||||||||
Wholesale (a) |
0.2 | 0.3 | 0.3 | 0.4 | 0.6 | (33 | ) | (67 | ) | 0.8 | 2.0 | (60 | ) | |||||||||||||||||||||||||||
Correspondent (a) |
20.2 | 14.9 | 13.6 | 24.9 | 30.7 | 36 | (34 | ) | 48.7 | 72.4 | (33 | ) | ||||||||||||||||||||||||||||
Total application volume |
58.1 | 48.8 | 45.2 | 57.7 | 65.9 | 19 | (12 | ) | 152.1 | 157.1 | (3 | ) | ||||||||||||||||||||||||||||
Third-party mortgage loans serviced (ending) |
924.5 | 940.8 | 955.0 | 967.5 | 1,012.7 | (2 | ) | (9 | ) | 924.5 | 1,012.7 | (9 | ) | |||||||||||||||||||||||||||
Third-party mortgage loans serviced (average) |
931.4 | 947.0 | 958.7 | 981.7 | 1,028.6 | (2 | ) | (9 | ) | 945.7 | 1,056.3 | (10 | ) | |||||||||||||||||||||||||||
MSR net carrying value (ending) (b) |
7.8 | 12.2 | 13.1 | 13.6 | 10.3 | (36 | ) | (24 | ) | 7.8 | 10.3 | (24 | ) | |||||||||||||||||||||||||||
Ratio of MSR net carrying value (ending) to third-party
mortgage loans serviced (ending) |
0.84 | % | 1.30 | % | 1.37 | % | 1.41 | % | 1.02 | % | 0.84 | % | 1.02 | % | ||||||||||||||||||||||||||
Ratio of annualized loan servicing revenue to third-party
mortgage loans serviced (average) |
0.44 | 0.43 | 0.45 | 0.46 | 0.44 | 0.44 | 0.44 | |||||||||||||||||||||||||||||||||
MSR revenue multiple (c) |
1.91x | 3.02x | 3.04x | 3.07x | 2.32x | 1.91x | 2.32x |
(a) | Includes rural housing loans sourced through brokers and correspondents, which are underwritten under Rural Housing Authority. | |
(b) | The fair value of the MSR asset decreased $5.8 billion during the nine months ended September 30, 2011, which included $1.1 billion related to revised cost to service assumptions incorporated in the MSR valuation in the first quarter of 2011. The remaining $4.7 billion decline in the MSR fair value represents a $5.2 billion loss, predominantly due to a decrease in interest rates, partially offset by new capitalization, net of amortization. The $5.2 billion loss was offset by $5.1 billion of gains on the derivatives used to hedge the MSR asset; these derivatives are recorded separately from the MSR asset. | |
(c) | Represents the ratio of MSR net carrying value (ending) to third-party mortgage loans serviced (ending) divided by the ratio of annualized loan servicing revenue to third-party mortgage loans serviced (average). |
Page 17
JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) |
QUARTERLY TRENDS | NINE
MONTHS ENDED SEPTEMBER 30, |
||||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | ||||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | ||||||||||||||||||||||||||||||||
REAL ESTATE PORTFOLIOS |
|||||||||||||||||||||||||||||||||||||||||
Noninterest revenue |
$ | 23 | $ | 20 | $ | 8 | $ | 10 | $ | 21 | 15 | % | 10 | % | $ | 51 | $ | 105 | (51) | % | |||||||||||||||||||||
Net interest income |
1,128 | 1,197 | 1,156 | 1,319 | 1,304 | (6 | ) | (13 | ) | 3,481 | 4,113 | (15 | ) | ||||||||||||||||||||||||||||
Total net revenue |
1,151 | 1,217 | 1,164 | 1,329 | 1,325 | (5 | ) | (13 | ) | 3,532 | 4,218 | (16 | ) | ||||||||||||||||||||||||||||
Provision for credit losses |
899 | 954 | 1,076 | 2,337 | 1,197 | (6 | ) | (25 | ) | 2,929 | 5,894 | (50 | ) | ||||||||||||||||||||||||||||
Noninterest expense |
363 | 371 | 355 | 413 | 390 | (2 | ) | (7 | ) | 1,089 | 1,214 | (10 | ) | ||||||||||||||||||||||||||||
Income/(loss) before income tax expense/(benefit) |
(111 | ) | (108 | ) | (267 | ) | (1,421 | ) | (262 | ) | (3 | ) | 58 | (486 | ) | (2,890 | ) | 83 | |||||||||||||||||||||||
Net income/(loss) |
$ | (67 | ) | $ | (66 | ) | $ | (162 | ) | $ | (823 | ) | $ | (148 | ) | (2 | ) | 55 | $ | (295 | ) | $ | (1,670 | ) | 82 | ||||||||||||||||
Overhead ratio |
32 | % | 30 | % | 30 | % | 31 | % | 29 | % | 31 | % | 29 | % | |||||||||||||||||||||||||||
BUSINESS METRICS (in billions) |
|||||||||||||||||||||||||||||||||||||||||
LOANS EXCLUDING PCI LOANS (a) |
|||||||||||||||||||||||||||||||||||||||||
End-of-period loans owned: |
|||||||||||||||||||||||||||||||||||||||||
Home equity |
$ | 80.3 | $ | 82.7 | $ | 85.3 | $ | 88.4 | $ | 91.7 | (3 | ) | (12 | ) | $ | 80.3 | $ | 91.7 | (12 | ) | |||||||||||||||||||||
Prime mortgage, including option ARMs |
45.5 | 47.0 | 48.5 | 49.8 | 51.3 | (3 | ) | (11 | ) | 45.5 | 51.3 | (11 | ) | ||||||||||||||||||||||||||||
Subprime mortgage |
10.0 | 10.4 | 10.8 | 11.3 | 12.0 | (4 | ) | (17 | ) | 10.0 | 12.0 | (17 | ) | ||||||||||||||||||||||||||||
Other |
0.7 | 0.8 | 0.8 | 0.8 | 0.9 | (13 | ) | (22 | ) | 0.7 | 0.9 | (22 | ) | ||||||||||||||||||||||||||||
Total end-of-period loans owned |
$ | 136.5 | $ | 140.9 | $ | 145.4 | $ | 150.3 | $ | 155.9 | (3 | ) | (12 | ) | $ | 136.5 | $ | 155.9 | (12 | ) | |||||||||||||||||||||
Average loans owned: |
|||||||||||||||||||||||||||||||||||||||||
Home equity |
$ | 81.6 | $ | 84.0 | $ | 86.9 | $ | 90.2 | $ | 93.3 | (3 | ) | (13 | ) | $ | 84.1 | $ | 96.4 | (13 | ) | |||||||||||||||||||||
Prime mortgage, including option ARMs |
46.2 | 47.6 | 49.3 | 50.7 | 52.2 | (3 | ) | (11 | ) | 47.7 | 54.3 | (12 | ) | ||||||||||||||||||||||||||||
Subprime mortgage |
10.3 | 10.7 | 11.1 | 11.8 | 12.3 | (4 | ) | (16 | ) | 10.7 | 13.0 | (18 | ) | ||||||||||||||||||||||||||||
Other |
0.7 | 0.8 | 0.8 | 0.9 | 1.0 | (13 | ) | (30 | ) | 0.8 | 1.0 | (20 | ) | ||||||||||||||||||||||||||||
Total average loans owned |
$ | 138.8 | $ | 143.1 | $ | 148.1 | $ | 153.6 | $ | 158.8 | (3 | ) | (13 | ) | $ | 143.3 | $ | 164.7 | (13 | ) | |||||||||||||||||||||
PCI LOANS (a) |
|||||||||||||||||||||||||||||||||||||||||
End-of-period loans owned: |
|||||||||||||||||||||||||||||||||||||||||
Home equity |
$ | 23.1 | $ | 23.5 | $ | 24.0 | $ | 24.5 | $ | 25.0 | (2 | ) | (8 | ) | $ | 23.1 | $ | 25.0 | (8 | ) | |||||||||||||||||||||
Prime mortgage |
15.6 | 16.2 | 16.7 | 17.3 | 17.9 | (4 | ) | (13 | ) | 15.6 | 17.9 | (13 | ) | ||||||||||||||||||||||||||||
Subprime mortgage |
5.1 | 5.2 | 5.3 | 5.4 | 5.5 | (2 | ) | (7 | ) | 5.1 | 5.5 | (7 | ) | ||||||||||||||||||||||||||||
Option ARMs |
23.3 | 24.1 | 24.8 | 25.6 | 26.4 | (3 | ) | (12 | ) | 23.3 | 26.4 | (12 | ) | ||||||||||||||||||||||||||||
Total end-of-period loans owned |
$ | 67.1 | $ | 69.0 | $ | 70.8 | $ | 72.8 | $ | 74.8 | (3 | ) | (10 | ) | $ | 67.1 | $ | 74.8 | (10 | ) | |||||||||||||||||||||
Average loans owned: |
|||||||||||||||||||||||||||||||||||||||||
Home equity |
$ | 23.3 | $ | 23.7 | $ | 24.2 | $ | 24.7 | $ | 25.2 | (2 | ) | (8 | ) | $ | 23.7 | $ | 25.7 | (8 | ) | |||||||||||||||||||||
Prime mortgage |
15.9 | 16.5 | 17.0 | 17.6 | 18.2 | (4 | ) | (13 | ) | 16.5 | 18.8 | (12 | ) | ||||||||||||||||||||||||||||
Subprime mortgage |
5.1 | 5.2 | 5.3 | 5.4 | 5.6 | (2 | ) | (9 | ) | 5.2 | 5.8 | (10 | ) | ||||||||||||||||||||||||||||
Option ARMs |
23.7 | 24.4 | 25.1 | 25.9 | 26.7 | (3 | ) | (11 | ) | 24.4 | 27.7 | (12 | ) | ||||||||||||||||||||||||||||
Total average loans owned |
$ | 68.0 | $ | 69.8 | $ | 71.6 | $ | 73.6 | $ | 75.7 | (3 | ) | (10 | ) | $ | 69.8 | $ | 78.0 | (11 | ) | |||||||||||||||||||||
TOTAL REAL ESTATE PORTFOLIOS |
|||||||||||||||||||||||||||||||||||||||||
End-of-period loans owned: |
|||||||||||||||||||||||||||||||||||||||||
Home equity |
$ | 103.4 | $ | 106.2 | $ | 109.3 | $ | 112.9 | $ | 116.7 | (3 | ) | (11 | ) | $ | 103.4 | $ | 116.7 | (11 | ) | |||||||||||||||||||||
Prime mortgage, including option ARMs |
84.4 | 87.3 | 90.0 | 92.7 | 95.6 | (3 | ) | (12 | ) | 84.4 | 95.6 | (12 | ) | ||||||||||||||||||||||||||||
Subprime mortgage |
15.1 | 15.6 | 16.1 | 16.7 | 17.5 | (3 | ) | (14 | ) | 15.1 | 17.5 | (14 | ) | ||||||||||||||||||||||||||||
Other |
0.7 | 0.8 | 0.8 | 0.8 | 0.9 | (13 | ) | (22 | ) | 0.7 | 0.9 | (22 | ) | ||||||||||||||||||||||||||||
Total end-of-period loans owned |
$ | 203.6 | $ | 209.9 | $ | 216.2 | $ | 223.1 | $ | 230.7 | (3 | ) | (12 | ) | $ | 203.6 | $ | 230.7 | (12 | ) | |||||||||||||||||||||
Average loans owned: |
|||||||||||||||||||||||||||||||||||||||||
Home equity |
$ | 104.9 | $ | 107.7 | $ | 111.1 | $ | 114.9 | $ | 118.5 | (3 | ) | (11 | ) | $ | 107.8 | $ | 122.1 | (12 | ) | |||||||||||||||||||||
Prime mortgage, including option ARMs |
85.8 | 88.5 | 91.4 | 94.2 | 97.1 | (3 | ) | (12 | ) | 88.6 | 100.8 | (12 | ) | ||||||||||||||||||||||||||||
Subprime mortgage |
15.4 | 15.9 | 16.4 | 17.2 | 17.9 | (3 | ) | (14 | ) | 15.9 | 18.8 | (15 | ) | ||||||||||||||||||||||||||||
Other |
0.7 | 0.8 | 0.8 | 0.9 | 1.0 | (13 | ) | (30 | ) | 0.8 | 1.0 | (20 | ) | ||||||||||||||||||||||||||||
Total average loans owned |
$ | 206.8 | $ | 212.9 | $ | 219.7 | $ | 227.2 | $ | 234.5 | (3 | ) | (12 | ) | $ | 213.1 | $ | 242.7 | (12 | ) | |||||||||||||||||||||
Average assets |
193.7 | 200.1 | 207.2 | 215.3 | 222.5 | (3 | ) | (13 | ) | 200.3 | 230.9 | (13 | ) | ||||||||||||||||||||||||||||
Home equity origination volume |
0.3 | 0.3 | 0.2 | 0.3 | 0.3 | | | 0.8 | 0.9 | (11 | ) |
(a) | PCI loans represent loans acquired in the Washington Mutual transaction for which a deterioration in credit quality occurred between the origination date and JPMorgan Chases acquisition date. These loans were initially recorded at fair value and accrete interest income over the estimated lives of the loans as long as cash flows are reasonably estimable, even if the underlying loans are contractually past due. |
Page 18
JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
REAL ESTATE PORTFOLIOS (continued) |
||||||||||||||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS |
||||||||||||||||||||||||||||||||||||||||
Net charge-offs excluding PCI loans (a)(b) |
||||||||||||||||||||||||||||||||||||||||
Home equity |
$ | 581 | $ | 592 | $ | 720 | $ | 792 | $ | 730 | (2 | )% | (20 | )% | $ | 1,893 | $ | 2,652 | (29) | % | ||||||||||||||||||||
Prime mortgage, including option ARMs |
172 | 198 | 161 | 558 | 266 | (13 | ) | (35 | ) | 531 | 1,015 | (48 | ) | |||||||||||||||||||||||||||
Subprime mortgage |
141 | 156 | 186 | 429 | 206 | (10 | ) | (32 | ) | 483 | 945 | (49 | ) | |||||||||||||||||||||||||||
Other |
5 | 8 | 9 | 10 | 12 | (38 | ) | (58 | ) | 22 | 49 | (55 | ) | |||||||||||||||||||||||||||
Total net charge-offs |
$ | 899 | $ | 954 | $ | 1,076 | $ | 1,789 | $ | 1,214 | (6 | ) | (26 | ) | $ | 2,929 | $ | 4,661 | (37 | ) | ||||||||||||||||||||
Net charge-off rate excluding PCI loans (a)(b) |
||||||||||||||||||||||||||||||||||||||||
Home equity |
2.82 | % | 2.83 | % | 3.36 | % | 3.48 | % | 3.10 | % | 3.01 | % | 3.68 | % | ||||||||||||||||||||||||||
Prime mortgage, including option ARMs |
1.48 | 1.67 | 1.32 | 4.37 | 2.02 | 1.49 | 2.50 | |||||||||||||||||||||||||||||||||
Subprime mortgage |
5.43 | 5.85 | 6.80 | 14.42 | 6.64 | 6.04 | 9.72 | |||||||||||||||||||||||||||||||||
Other |
2.83 | 4.01 | 4.56 | 4.41 | 4.76 | 3.68 | 6.55 | |||||||||||||||||||||||||||||||||
Total net charge-off rate excluding PCI loans |
2.57 | 2.67 | 2.95 | 4.62 | 3.03 | 2.73 | 3.78 | |||||||||||||||||||||||||||||||||
Net charge-off rate reported |
||||||||||||||||||||||||||||||||||||||||
Home equity |
2.20 | % | 2.20 | % | 2.63 | % | 2.73 | % | 2.44 | % | 2.35 | % | 2.90 | % | ||||||||||||||||||||||||||
Prime mortgage, including option ARMs |
0.80 | 0.90 | 0.71 | 2.35 | 1.09 | 0.80 | 1.35 | |||||||||||||||||||||||||||||||||
Subprime mortgage |
3.63 | 3.94 | 4.60 | 9.90 | 4.57 | 4.06 | 6.72 | |||||||||||||||||||||||||||||||||
Other |
2.83 | 4.01 | 4.56 | 4.41 | 4.76 | 3.68 | 6.55 | |||||||||||||||||||||||||||||||||
Total net charge-off rate reported |
1.72 | 1.80 | 1.99 | 3.12 | 2.05 | 1.84 | 2.57 | |||||||||||||||||||||||||||||||||
30+ day delinquency rate excluding PCI loans (c) |
5.80 | % | 5.98 | % | 6.22 | % | 6.45 | % | 6.77 | % | 5.80 | % | 6.77 | % | ||||||||||||||||||||||||||
Allowance for loan losses |
$ | 14,659 | $ | 14,659 | $ | 14,659 | $ | 14,659 | $ | 14,111 | | 4 | $ | 14,659 | $ | 14,111 | 4 | |||||||||||||||||||||||
Nonperforming assets (d) |
7,112 | 7,729 | 8,152 | 8,424 | 9,456 | (8 | ) | (25 | ) | 7,112 | 9,456 | (25 | ) | |||||||||||||||||||||||||||
Allowance for loan losses to ending loans retained |
7.20 | % | 6.98 | % | 6.78 | % | 6.57 | % | 6.12 | % | 7.20 | % | 6.12 | % | ||||||||||||||||||||||||||
Allowance for loan losses to ending loans retained
excluding PCI loans (a) |
7.12 | 6.90 | 6.68 | 6.47 | 7.25 | 7.12 | 7.25 |
(a) | Excludes the impact of PCI loans that were acquired as part of the Washington Mutual transaction. These loans were accounted for at fair value on the acquisition date, which incorporated managements estimate, as of that date, of credit losses over the remaining life of the portfolio. An allowance for loan losses of $4.9 billion, $4.9 billion, $4.9 billion, $4.9 billion and $2.8 billion was recorded for these loans at September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively, which was also excluded from the applicable ratios. To date, no charge-offs have been recorded for these loans. | |
(b) | Net charge-offs and net charge-off rates for the fourth quarter of 2010 include the effect of $632 million of charge-offs related to an adjustment of the estimated net realizable value of the collateral underlying delinquent residential home loans. Excluding this adjustment, net charge-offs for the fourth quarter of 2010 were $725 million, $240 million and $182 million for the home equity, prime mortgage including option ARMs and subprime mortgage portfolios, respectively. Net charge-off rates excluding this adjustment and excluding PCI loans were 3.19%, 1.88% and 6.12% for the home equity, prime mortgage including option ARMs and subprime mortgage portfolios, respectively. | |
(c) | The delinquency rate for PCI loans was 24.44%, 26.20%, 27.36%, 28.20% and 28.07% at September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively. | |
(d) | Excludes PCI loans that were acquired as part of the Washington Mutual transaction, which are accounted for on a pool basis. Since each pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, the past-due status of the pools, or that of the individual loans within the pools, is not meaningful. Because the Firm is recognizing interest income on each pool of loans, they are all considered to be performing. |
Page 19
JPMORGAN CHASE & CO. CARD SERVICES & AUTO FINANCIAL HIGHLIGHTS (in millions, except ratio data and headcount) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
INCOME STATEMENT (a) |
||||||||||||||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||||||||||||||
Credit card income |
$ | 1,053 | $ | 1,123 | $ | 898 | $ | 928 | $ | 864 | (6 | )% | 22 | % | $ | 3,074 | $ | 2,586 | 19 | % | ||||||||||||||||||||
All other income |
201 | 183 | 149 | 177 | 196 | 10 | 3 | 533 | 587 | (9 | ) | |||||||||||||||||||||||||||||
Noninterest revenue (b) |
1,254 | 1,306 | 1,047 | 1,105 | 1,060 | (4 | ) | 18 | 3,607 | 3,173 | 14 | |||||||||||||||||||||||||||||
Net interest income |
3,521 | 3,455 | 3,744 | 3,967 | 4,025 | 2 | (13 | ) | 10,720 | 12,227 | (12 | ) | ||||||||||||||||||||||||||||
TOTAL NET REVENUE (c) |
4,775 | 4,761 | 4,791 | 5,072 | 5,085 | | (6 | ) | 14,327 | 15,400 | (7 | ) | ||||||||||||||||||||||||||||
Provision for credit losses |
1,264 | 944 | 353 | 709 | 1,784 | 34 | (29 | ) | 2,561 | 7,861 | (67 | ) | ||||||||||||||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||||||||||||||
Compensation expense |
459 | 448 | 459 | 407 | 406 | 2 | 13 | 1,366 | 1,244 | 10 | ||||||||||||||||||||||||||||||
Noncompensation expense |
1,560 | 1,436 | 1,352 | 1,346 | 1,280 | 9 | 22 | 4,348 | 3,714 | 17 | ||||||||||||||||||||||||||||||
Amortization of intangibles |
96 | 104 | 106 | 114 | 106 | (8 | ) | (9 | ) | 306 | 353 | (13 | ) | |||||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE (d) |
2,115 | 1,988 | 1,917 | 1,867 | 1,792 | 6 | 18 | 6,020 | 5,311 | 13 | ||||||||||||||||||||||||||||||
Income before income tax expense |
1,396 | 1,829 | 2,521 | 2,496 | 1,509 | (24 | ) | (7 | ) | 5,746 | 2,228 | 158 | ||||||||||||||||||||||||||||
Income tax expense |
547 | 719 | 987 | 948 | 583 | (24 | ) | (6 | ) | 2,253 | 904 | 149 | ||||||||||||||||||||||||||||
NET INCOME |
$ | 849 | $ | 1,110 | $ | 1,534 | $ | 1,548 | $ | 926 | (24 | ) | (8 | ) | $ | 3,493 | $ | 1,324 | 164 | |||||||||||||||||||||
FINANCIAL RATIOS (a) |
||||||||||||||||||||||||||||||||||||||||
ROE |
21 | % | 28 | % | 39 | % | 33 | % | 20 | % | 29 | % | 10 | % | ||||||||||||||||||||||||||
Overhead ratio |
44 | 42 | 40 | 37 | 35 | 42 | 34 | |||||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (period-end) (a) |
||||||||||||||||||||||||||||||||||||||||
Loans: |
||||||||||||||||||||||||||||||||||||||||
Credit Card |
$ | 127,135 | $ | 125,523 | $ | 128,803 | $ | 137,676 | $ | 136,436 | 1 | (7 | ) | $ | 127,135 | $ | 136,436 | (7 | ) | |||||||||||||||||||||
Auto |
46,659 | 46,796 | 47,411 | 48,367 | 48,186 | | (3 | ) | 46,659 | 48,186 | (3 | ) | ||||||||||||||||||||||||||||
Student |
13,751 | 14,003 | 14,288 | 14,454 | 14,687 | (2 | ) | (6 | ) | 13,751 | 14,687 | (6 | ) | |||||||||||||||||||||||||||
Total loans (e) |
187,545 | 186,322 | 190,502 | 200,497 | 199,309 | 1 | (6 | ) | 187,545 | 199,309 | (6 | ) | ||||||||||||||||||||||||||||
Equity |
16,000 | 16,000 | 16,000 | 18,400 | 18,400 | | (13 | ) | 16,000 | 18,400 | (13 | ) | ||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (average) (a) |
||||||||||||||||||||||||||||||||||||||||
Total assets |
$ | 199,974 | $ | 198,044 | $ | 204,441 | $ | 205,286 | $ | 207,474 | 1 | (4 | ) | $ | 200,803 | $ | 215,653 | (7 | ) | |||||||||||||||||||||
Loans: |
||||||||||||||||||||||||||||||||||||||||
Credit Card |
126,536 | 125,038 | 132,537 | 135,585 | 140,059 | 1 | (10 | ) | 128,015 | 147,326 | (13 | ) | ||||||||||||||||||||||||||||
Auto |
46,549 | 46,966 | 47,690 | 48,347 | 47,726 | (1 | ) | (2 | ) | 47,064 | 47,353 | (1 | ) | |||||||||||||||||||||||||||
Student |
13,865 | 14,135 | 14,410 | 14,566 | 14,824 | (2 | ) | (6 | ) | 14,135 | 16,410 | (14 | ) | |||||||||||||||||||||||||||
Total loans (f) |
186,950 | 186,139 | 194,637 | 198,498 | 202,609 | | (8 | ) | 189,214 | 211,089 | (10 | ) | ||||||||||||||||||||||||||||
Equity |
16,000 | 16,000 | 16,000 | 18,400 | 18,400 | | (13 | ) | 16,000 | 18,400 | (13 | ) | ||||||||||||||||||||||||||||
Headcount (g) |
27,554 | 26,874 | 26,777 | 25,733 | 26,382 | 3 | 4 | 27,554 | 26,382 | 4 |
(a) | Effective January 1, 2011, the commercial card business that was previously in TSS was transferred to Card. There is no material impact on the financial data; prior-year periods were not revised. | |
(b) | Includes commercial card noninterest revenue of $76 million, $75 million and $72 million for the three months ended September 30, 2011, June 30, 2011 and March 31, 2011, respectively, and $223 million for the nine months ended September 30, 2011. | |
(c) | Total net revenue included tax-equivalent adjustments associated with tax-exempt loans to certain qualified entities of $1 million, $1 million, $1 million and $2 million for the three months ended June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively, and $2 million and $6 million for the nine months ended September 30, 2011 and 2010, respectively. | |
(d) | Includes commercial card noninterest expense of $76 million, $69 million and $75 million for the three months ended September 30, 2011, June 30, 2011 and March 31, 2011, respectively, and $220 million for the nine months ended September 30, 2011. | |
(e) | Total period-end loans include loans held-for-sale of $94 million, $4.0 billion, $2.2 billion and $39 million at September 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively. | |
(f) | Total average loans include loans held-for-sale of $1 million, $276 million, $3.0 billion, $593 million and $112 million for the three months ended September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively, and $1.1 billion and $1.5 billion for the nine months ended September 30, 2011 and 2010, respectively. | |
(g) | Headcount includes 1,274 employees related to the transfer of the commercial card business from TSS to Card in the first quarter of 2011. |
Page 20
JPMORGAN CHASE & CO. CARD SERVICES & AUTO FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS (a) |
||||||||||||||||||||||||||||||||||||||||
Net charge-offs: |
||||||||||||||||||||||||||||||||||||||||
Credit Card |
$ | 1,499 | $ | 1,810 | $ | 2,226 | $ | 2,671 | $ | 3,133 | (17 | )% | (52 | )% | $ | 5,535 | $ | 11,366 | (51 | )% | ||||||||||||||||||||
Auto |
42 | 19 | 47 | 71 | 67 | 121 | (37 | ) | 108 | 227 | (52 | ) | ||||||||||||||||||||||||||||
Student |
93 | 135 | 80 | 118 | 84 | (31 | ) | 11 | 308 | 269 | 14 | |||||||||||||||||||||||||||||
Total net charge-offs |
1,634 | 1,964 | 2,353 | 2,860 | 3,284 | (17 | ) | (50 | ) | 5,951 | 11,862 | (50 | ) | |||||||||||||||||||||||||||
Net charge-off rate: |
||||||||||||||||||||||||||||||||||||||||
Credit Card (b) |
4.70 | % | 5.82 | % | 6.97 | % | 7.85 | % | 8.87 | % | 5.83 | % | 10.31 | % | ||||||||||||||||||||||||||
Auto |
0.36 | 0.16 | 0.40 | 0.58 | 0.56 | 0.31 | 0.64 | |||||||||||||||||||||||||||||||||
Student (c) |
2.66 | 3.83 | 2.25 | 3.22 | 2.27 | 2.91 | 2.41 | |||||||||||||||||||||||||||||||||
Total net charge-off rate |
3.47 | 4.24 | 4.98 | 5.73 | 6.43 | 4.23 | 7.57 | |||||||||||||||||||||||||||||||||
Delinquency rates |
||||||||||||||||||||||||||||||||||||||||
30+ day delinquency rate: |
||||||||||||||||||||||||||||||||||||||||
Credit Card (d) |
2.90 | 2.98 | 3.57 | 4.14 | 4.57 | 2.90 | 4.57 | |||||||||||||||||||||||||||||||||
Auto |
1.01 | 0.98 | 0.97 | 1.22 | 0.97 | 1.01 | 0.97 | |||||||||||||||||||||||||||||||||
Student (e)(f) |
1.93 | 1.70 | 2.01 | 1.53 | 1.77 | 1.93 | 1.77 | |||||||||||||||||||||||||||||||||
Total 30+ day delinquency rate |
2.36 | 2.38 | 2.79 | 3.23 | 3.49 | 2.36 | 3.49 | |||||||||||||||||||||||||||||||||
90+ day delinquency rate Credit Card (d) |
1.43 | 1.55 | 1.93 | 2.25 | 2.41 | 1.43 | 2.41 | |||||||||||||||||||||||||||||||||
Nonperforming assets (g) |
$ | 232 | $ | 233 | $ | 275 | $ | 269 | $ | 268 | | (13 | ) | $ | 232 | $ | 268 | (13 | ) | |||||||||||||||||||||
Allowance for loan losses: |
||||||||||||||||||||||||||||||||||||||||
Credit Card |
7,528 | 8,042 | 9,041 | 11,034 | 13,029 | (6 | ) | (42 | ) | 7,528 | 13,029 | (42 | ) | |||||||||||||||||||||||||||
Auto and Student |
1,009 | 879 | 899 | 899 | 1,048 | 15 | (4 | ) | 1,009 | 1,048 | (4 | ) | ||||||||||||||||||||||||||||
Total allowance for loan losses |
8,537 | 8,921 | 9,940 | 11,933 | 14,077 | (4 | ) | (39 | ) | 8,537 | 14,077 | (39 | ) | |||||||||||||||||||||||||||
Allowance for loan losses to period-end loans: |
||||||||||||||||||||||||||||||||||||||||
Credit Card (d) |
5.93 | % | 6.41 | % | 7.24 | % | 8.14 | % | 9.55 | % | 5.93 | % | 9.55 | % | ||||||||||||||||||||||||||
Auto and Student (e) |
1.67 | 1.45 | 1.46 | 1.43 | 1.67 | 1.67 | 1.67 | |||||||||||||||||||||||||||||||||
Total allowance for loan losses
to period-end loans |
4.55 | 4.79 | 5.33 | 6.02 | 7.06 | 4.55 | 7.06 | |||||||||||||||||||||||||||||||||
BUSINESS METRICS |
||||||||||||||||||||||||||||||||||||||||
Credit Card, excluding Commercial Card (a) |
||||||||||||||||||||||||||||||||||||||||
Sales volume (in billions) |
$ | 87.3 | $ | 85.5 | $ | 77.5 | $ | 85.9 | $ | 79.6 | 2 | 10 | $ | 250.3 | $ | 227.1 | 10 | |||||||||||||||||||||||
New accounts opened |
2.0 | 2.0 | 2.6 | 3.4 | 2.7 | | (26 | ) | 6.6 | 7.9 | (16 | ) | ||||||||||||||||||||||||||||
Open accounts |
64.3 | 65.4 | (h) | 91.9 | 90.7 | 89.0 | (2 | ) | (28 | ) | 64.3 | 89.0 | (28 | ) | ||||||||||||||||||||||||||
Merchant Services |
||||||||||||||||||||||||||||||||||||||||
Bank card volume (in billions) |
$ | 138.1 | $ | 137.3 | $ | 125.7 | $ | 127.2 | $ | 117.0 | 1 | 18 | $ | 401.1 | $ | 342.1 | 17 | |||||||||||||||||||||||
Total transactions (in billions) |
6.1 | 5.9 | 5.6 | 5.6 | 5.2 | 3 | 17 | 17.6 | 14.9 | 18 | ||||||||||||||||||||||||||||||
Auto and Student |
||||||||||||||||||||||||||||||||||||||||
Origination volume (in billions) |
||||||||||||||||||||||||||||||||||||||||
Auto |
$ | 5.9 | $ | 5.4 | $ | 4.8 | $ | 4.8 | $ | 6.1 | 9 | (3 | ) | $ | 16.1 | $ | 18.2 | (12 | ) | |||||||||||||||||||||
Student |
0.1 | | 0.1 | | 0.2 | NM | (50 | ) | 0.2 | 1.9 | (89 | ) |
(a) | Effective January 1, 2011, the commercial card business that was previously in TSS was transferred to Card. There is no material impact on the financial data; prior-year periods were not revised. The commercial card portfolio is excluded from business metrics and supplemental information where noted. | |
(b) | Average loans include loans held-for-sale of $1 million, $276 million, $3.0 billion and $586 million for the three months ended September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively, and $1.1 billion for the nine months ended September 30, 2011. These amounts are excluded when calculating the net charge-off rate. | |
(c) | Average loans included loans held-for-sale of $7 million and $112 million for the three months ended December 31, 2010 and September 30, 2010, respectively, and $1.5 billion for the nine months ended September 30, 2010. These amounts are excluded when calculating the net charge-off rate. | |
(d) | Period-end loans include loans held-for-sale of $94 million, $4.0 billion and $2.2 billion at September 30, 2011, March 31, 2011 and December 31, 2010, respectively. No allowance for loan losses was recorded for these loans. Loans held-for-sale are excluded when calculating the allowance for loan losses to period-end loans and delinquency rates. | |
(e) | Period-end loans included loans held-for-sale of $39 million at September 30, 2010. This amount is excluded when calculating the allowance for loan losses to period-end loans and the 30+ day delinquency rate. | |
(f) | Excludes student loans insured by U.S. government agencies under the Federal Family Education Loan Program (FFELP) of $995 million, $968 million, $1.0 billion, $1.1 billion and $1.0 billion at September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively, that are 30 or more days past due. These amounts are excluded as reimbursement of insured amounts is proceeding normally. | |
(g) | Nonperforming assets exclude student loans insured by U.S. government agencies under the FFELP of $567 million, $558 million, $615 million, $625 million and $572 million at September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively, that are 90 or more days past due. These amounts are excluded as reimbursement of insured amounts is proceeding normally. | |
(h) | Reflects the impact of portfolio sales in the second quarter of 2011. |
Page 21
JPMORGAN CHASE & CO. CARD SERVICES & AUTO FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION (a)(b) |
||||||||||||||||||||||||||||||||||||||||
Card Services, excluding Washington
Mutual portfolio |
||||||||||||||||||||||||||||||||||||||||
Loans (period-end) |
$ | 115,766 | $ | 113,766 | $ | 116,395 | $ | 123,943 | $ | 121,932 | 2 | % | (5 | )% | $ | 115,766 | $ | 121,932 | (5 | )% | ||||||||||||||||||||
Average loans |
114,940 | 112,984 | 119,411 | 121,493 | 124,933 | 2 | (8 | ) | 115,762 | 130,610 | (11 | ) | ||||||||||||||||||||||||||||
Net interest income (c) |
8.61 | % | 8.60 | % | 9.09 | % | 9.16 | % | 8.98 | % | 8.77 | % | 8.77 | % | ||||||||||||||||||||||||||
Net revenue (c) |
11.73 | 12.01 | 11.57 | 11.78 | 11.33 | 11.77 | 11.04 | |||||||||||||||||||||||||||||||||
Risk adjusted margin (c)(d) |
8.93 | 8.71 | 10.28 | 10.26 | 6.76 | 9.32 | 4.41 | |||||||||||||||||||||||||||||||||
Net charge-off rate (e) |
4.29 | 5.22 | 6.13 | 7.08 | 8.06 | 5.22 | 9.24 | |||||||||||||||||||||||||||||||||
30+ day delinquency rate (f) |
2.62 | 2.71 | 3.22 | 3.66 | 4.13 | 2.62 | 4.13 | |||||||||||||||||||||||||||||||||
90+ day delinquency rate (f) |
1.28 | 1.41 | 1.71 | 1.98 | 2.16 | 1.28 | 2.16 | |||||||||||||||||||||||||||||||||
Card Services, excluding Washington
Mutual and commercial card portfolios |
||||||||||||||||||||||||||||||||||||||||
Loans (period-end) |
$ | 114,207 | $ | 112,366 | $ | 115,016 | $ | 123,943 | $ | 121,932 | 2 | (6 | ) | $ | 114,207 | $ | 121,932 | (6 | ) | |||||||||||||||||||||
Average loans |
113,541 | 111,641 | 118,145 | 121,493 | 124,933 | 2 | (9 | ) | 114,425 | 130,610 | (12 | ) | ||||||||||||||||||||||||||||
Net interest income (c) |
8.79 | % | 8.77 | % | 9.25 | % | 9.16 | % | 8.98 | % | 8.94 | % | 8.77 | % | ||||||||||||||||||||||||||
Net revenue (c) |
11.68 | 11.95 | 11.51 | 11.78 | 11.33 | 11.71 | 11.04 | |||||||||||||||||||||||||||||||||
Risk adjusted margin (c)(d) |
8.84 | 8.61 | 10.21 | 10.26 | 6.76 | 9.23 | 4.41 | |||||||||||||||||||||||||||||||||
Net charge-off rate (e) |
4.34 | 5.28 | 6.20 | 7.08 | 8.06 | 5.28 | 9.24 | |||||||||||||||||||||||||||||||||
30+ day delinquency rate (f) |
2.64 | 2.73 | 3.25 | 3.66 | 4.13 | 2.64 | 4.13 | |||||||||||||||||||||||||||||||||
90+ day delinquency rate (f) |
1.30 | 1.42 | 1.73 | 1.98 | 2.16 | 1.30 | 2.16 |
(a) | Effective January 1, 2011, the commercial card business that was previously in TSS was transferred to Card. There is no material impact on the financial data; prior-year periods were not revised. The commercial card portfolio is excluded from business metrics and supplemental information where noted. | |
(b) | Supplemental information is provided for Card Services, excluding Washington Mutual and commercial card portfolios and including loans held-for-sale, which are non-GAAP financial measures, to provide more meaningful measures that enable comparability with prior periods. | |
(c) | As a percentage of average loans. | |
(d) | Represents total net revenue less provision for credit losses. | |
(e) | Average loans include loans held-for-sale of $1 million, $276 million, $3.0 billion and $586 million for the three months ended September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively, and $1.1 billion for the nine months ended September 30, 2011. These amounts are included when calculating the net charge-off rate. | |
(f) | Period-end loans include loans held-for-sale of $94 million, $4.0 billion and $2.2 billion at September 30, 2011, March 31, 2011 and December 31, 2010, respectively. These amounts are included when calculating the delinquency rates. |
Page 22
JPMORGAN CHASE & CO. COMMERCIAL BANKING FINANCIAL HIGHLIGHTS (in millions, except ratio data) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
INCOME STATEMENT |
||||||||||||||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||||||||||||||
Lending- and deposit-related fees |
$ | 269 | $ | 281 | $ | 264 | $ | 273 | $ | 269 | (4) | % | | % | $ | 814 | $ | 826 | (1) | % | ||||||||||||||||||||
Asset management, administration and commissions |
35 | 34 | 35 | 35 | 36 | 3 | (3 | ) | 104 | 109 | (5 | ) | ||||||||||||||||||||||||||||
All other income (a) |
220 | 283 | 203 | 299 | 242 | (22 | ) | (9 | ) | 706 | 658 | 7 | ||||||||||||||||||||||||||||
Noninterest revenue |
524 | 598 | 502 | 607 | 547 | (12 | ) | (4 | ) | 1,624 | 1,593 | 2 | ||||||||||||||||||||||||||||
Net interest income |
1,064 | 1,029 | 1,014 | 1,004 | 980 | 3 | 9 | 3,107 | 2,836 | 10 | ||||||||||||||||||||||||||||||
TOTAL NET REVENUE (b) |
1,588 | 1,627 | 1,516 | 1,611 | 1,527 | (2 | ) | 4 | 4,731 | 4,429 | 7 | |||||||||||||||||||||||||||||
Provision for credit losses |
67 | 54 | 47 | 152 | 166 | 24 | (60 | ) | 168 | 145 | 16 | |||||||||||||||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||||||||||||||
Compensation expense |
229 | 219 | 223 | 208 | 210 | 5 | 9 | 671 | 612 | 10 | ||||||||||||||||||||||||||||||
Noncompensation expense |
337 | 336 | 332 | 342 | 341 | | (1 | ) | 1,005 | 1,002 | | |||||||||||||||||||||||||||||
Amortization of intangibles |
7 | 8 | 8 | 8 | 9 | (13 | ) | (22 | ) | 23 | 27 | (15 | ) | |||||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE |
573 | 563 | 563 | 558 | 560 | 2 | 2 | 1,699 | 1,641 | 4 | ||||||||||||||||||||||||||||||
Income before income tax expense |
948 | 1,010 | 906 | 901 | 801 | (6 | ) | 18 | 2,864 | 2,643 | 8 | |||||||||||||||||||||||||||||
Income tax expense |
377 | 403 | 360 | 371 | 330 | (6 | ) | 14 | 1,140 | 1,089 | 5 | |||||||||||||||||||||||||||||
NET INCOME |
$ | 571 | $ | 607 | $ | 546 | $ | 530 | $ | 471 | (6 | ) | 21 | $ | 1,724 | $ | 1,554 | 11 | ||||||||||||||||||||||
Revenue by product: |
||||||||||||||||||||||||||||||||||||||||
Lending (c) |
$ | 857 | $ | 880 | $ | 837 | $ | 749 | $ | 693 | (3 | ) | 24 | $ | 2,574 | $ | 2,000 | 29 | ||||||||||||||||||||||
Treasury services (c) |
572 | 556 | 542 | 659 | 670 | 3 | (15 | ) | 1,670 | 1,973 | (15 | ) | ||||||||||||||||||||||||||||
Investment banking |
116 | 152 | 110 | 126 | 120 | (24 | ) | (3 | ) | 378 | 340 | 11 | ||||||||||||||||||||||||||||
Other |
43 | 39 | 27 | 77 | 44 | 10 | (2 | ) | 109 | 116 | (6 | ) | ||||||||||||||||||||||||||||
Total Commercial Banking revenue |
$ | 1,588 | $ | 1,627 | $ | 1,516 | $ | 1,611 | $ | 1,527 | (2 | ) | 4 | $ | 4,731 | $ | 4,429 | 7 | ||||||||||||||||||||||
IB revenue, gross (d) |
$ | 320 | $ | 442 | $ | 309 | $ | 347 | $ | 344 | (28 | ) | (7 | ) | $ | 1,071 | $ | 988 | 8 | |||||||||||||||||||||
Revenue by client segment: |
||||||||||||||||||||||||||||||||||||||||
Middle Market Banking |
$ | 791 | $ | 789 | $ | 755 | $ | 781 | $ | 766 | | 3 | $ | 2,335 | $ | 2,279 | 2 | |||||||||||||||||||||||
Commercial Term Lending |
297 | 286 | 286 | 301 | 256 | 4 | 16 | 869 | 722 | 20 | ||||||||||||||||||||||||||||||
Corporate Client Banking (e) |
306 | 339 | 290 | 302 | 304 | (10 | ) | 1 | 935 | 852 | 10 | |||||||||||||||||||||||||||||
Real Estate Banking |
104 | 109 | 88 | 117 | 118 | (5 | ) | (12 | ) | 301 | 343 | (12 | ) | |||||||||||||||||||||||||||
Other |
90 | 104 | 97 | 110 | 83 | (13 | ) | 8 | 291 | 233 | 25 | |||||||||||||||||||||||||||||
Total Commercial Banking revenue |
$ | 1,588 | $ | 1,627 | $ | 1,516 | $ | 1,611 | $ | 1,527 | (2 | ) | 4 | $ | 4,731 | $ | 4,429 | 7 | ||||||||||||||||||||||
FINANCIAL RATIOS |
||||||||||||||||||||||||||||||||||||||||
ROE |
28 | % | 30 | % | 28 | % | 26 | % | 23 | % | 29 | % | 26 | % | ||||||||||||||||||||||||||
Overhead ratio |
36 | 35 | 37 | 35 | 37 | 36 | 37 |
(a) | Commercial Banking (CB) client revenue from investment banking products and commercial card transactions is included in all other income. | |
(b) | Total net revenue included tax-equivalent adjustments from income tax credits related to equity investments in designated community development entities that provide loans to qualified businesses in low-income communities as well as tax-exempt income from municipal bond activity of $90 million, $67 million, $65 million, $85 million and $59 million for the three months ended September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively, and $222 million and $153 million for the nine months ended September 30, 2011 and 2010, respectively. | |
(c) | Effective January 1, 2011, product revenue from commercial card and standby letters of credit transactions is included in lending. For the quarters ending September 30, 2011, June 30, 2011 and March 31, 2011, the impact of the change was $109 million, $114 million and $107 million, respectively, and $330 million for the nine months ended September 30, 2011. In prior-year quarters, it was reported in treasury services. | |
(d) | Represents the total revenue related to investment banking products sold to CB clients. | |
(e) | Corporate Client Banking was known as Mid-Corporate Banking prior to January 1, 2011. |
Page 23
JPMORGAN CHASE & CO. COMMERCIAL BANKING FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except headcount and ratio data) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (period-end) |
||||||||||||||||||||||||||||||||||||||||
Loans: |
||||||||||||||||||||||||||||||||||||||||
Loans retained |
$ | 106,834 | $ | 102,122 | $ | 99,334 | $ | 97,900 | $ | 97,738 | 5 | % | 9 | % | $ | 106,834 | $ | 97,738 | 9 | % | ||||||||||||||||||||
Loans held-for-sale and loans at fair value |
584 | 557 | 835 | 1,018 | 399 | 5 | 46 | 584 | 399 | 46 | ||||||||||||||||||||||||||||||
Total loans |
107,418 | 102,679 | 100,169 | 98,918 | 98,137 | 5 | 9 | 107,418 | 98,137 | 9 | ||||||||||||||||||||||||||||||
Equity |
8,000 | 8,000 | 8,000 | 8,000 | 8,000 | | | 8,000 | 8,000 | | ||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (average) |
||||||||||||||||||||||||||||||||||||||||
Total assets |
$ | 145,195 | $ | 143,560 | $ | 140,400 | $ | 138,041 | $ | 130,237 | 1 | 11 | $ | 143,069 | $ | 132,176 | 8 | |||||||||||||||||||||||
Loans: |
||||||||||||||||||||||||||||||||||||||||
Loans retained |
104,705 | 100,857 | 98,829 | 97,823 | 96,657 | 4 | 8 | 101,485 | 96,166 | 6 | ||||||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value |
632 | 1,015 | 756 | 612 | 384 | (38 | ) | 65 | 801 | 358 | 124 | |||||||||||||||||||||||||||||
Total loans |
105,337 | 101,872 | 99,585 | 98,435 | 97,041 | 3 | 9 | 102,286 | 96,524 | 6 | ||||||||||||||||||||||||||||||
Liability balances |
180,275 | 162,769 | 156,200 | 147,534 | 137,853 | 11 | 31 | 166,503 | 135,939 | 22 | ||||||||||||||||||||||||||||||
Equity |
8,000 | 8,000 | 8,000 | 8,000 | 8,000 | | | 8,000 | 8,000 | | ||||||||||||||||||||||||||||||
Average loans by client segment: |
||||||||||||||||||||||||||||||||||||||||
Middle Market Banking |
$ | 41,540 | $ | 40,012 | $ | 38,207 | $ | 36,561 | $ | 35,299 | 4 | 18 | $ | 39,932 | 34,552 | 16 | ||||||||||||||||||||||||
Commercial Term Lending |
38,198 | 37,729 | 37,810 | 38,358 | 37,509 | 1 | 2 | 37,914 | 36,513 | 4 | ||||||||||||||||||||||||||||||
Corporate Client Banking (a) |
14,373 | 13,062 | 12,374 | 11,771 | 11,807 | 10 | 22 | 13,277 | 11,978 | 11 | ||||||||||||||||||||||||||||||
Real Estate Banking |
7,465 | 7,467 | 7,607 | 8,169 | 8,983 | | (17 | ) | 7,512 | 9,740 | (23 | ) | ||||||||||||||||||||||||||||
Other |
3,761 | 3,602 | 3,587 | 3,576 | 3,443 | 4 | 9 | 3,651 | 3,741 | (2 | ) | |||||||||||||||||||||||||||||
Total Commercial Banking loans |
$ | 105,337 | $ | 101,872 | $ | 99,585 | $ | 98,435 | $ | 97,041 | 3 | 9 | $ | 102,286 | $ | 96,524 | 6 | |||||||||||||||||||||||
Headcount |
5,417 | 5,140 | 4,941 | 4,881 | 4,805 | 5 | 13 | 5,417 | 4,805 | 13 | ||||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS |
||||||||||||||||||||||||||||||||||||||||
Net charge-offs |
$ | 17 | $ | 40 | $ | 31 | $ | 286 | $ | 218 | (58 | ) | (92 | ) | $ | 88 | $ | 623 | (86 | ) | ||||||||||||||||||||
Nonperforming assets: |
||||||||||||||||||||||||||||||||||||||||
Nonaccrual loans: |
||||||||||||||||||||||||||||||||||||||||
Nonaccrual loans retained (b) |
1,417 | 1,613 | 1,925 | 1,964 | 2,898 | (12 | ) | (51 | ) | 1,417 | 2,898 | (51 | ) | |||||||||||||||||||||||||||
Nonaccrual loans held-for-sale and loans at fair value |
26 | 21 | 30 | 36 | 48 | 24 | (46 | ) | 26 | 48 | (46 | ) | ||||||||||||||||||||||||||||
Total nonaccrual loans |
1,443 | 1,634 | 1,955 | 2,000 | 2,946 | (12 | ) | (51 | ) | 1,443 | 2,946 | (51 | ) | |||||||||||||||||||||||||||
Assets acquired in loan satisfactions |
168 | 197 | 179 | 197 | 281 | (15 | ) | (40 | ) | 168 | 281 | (40 | ) | |||||||||||||||||||||||||||
Total nonperforming assets |
1,611 | 1,831 | 2,134 | 2,197 | 3,227 | (12 | ) | (50 | ) | 1,611 | 3,227 | (50 | ) | |||||||||||||||||||||||||||
Allowance for credit losses: |
||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses |
2,671 | 2,614 | 2,577 | 2,552 | 2,661 | 2 | | 2,671 | 2,661 | | ||||||||||||||||||||||||||||||
Allowance for lending-related commitments |
181 | 187 | 206 | 209 | 241 | (3 | ) | (25 | ) | 181 | 241 | (25 | ) | |||||||||||||||||||||||||||
Total allowance for credit losses |
2,852 | 2,801 | 2,783 | 2,761 | 2,902 | 2 | (2 | ) | 2,852 | 2,902 | (2 | ) | ||||||||||||||||||||||||||||
Net charge-off rate (c) |
0.06 | % | 0.16 | % | 0.13 | % | 1.16 | % | 0.89 | % | 0.12 | % | 0.87 | % | ||||||||||||||||||||||||||
Allowance for loan losses to period-end loans retained (c) |
2.50 | 2.56 | 2.59 | 2.61 | 2.72 | 2.50 | 2.72 | |||||||||||||||||||||||||||||||||
Allowance for loan losses to nonaccrual loans retained (b)(c) |
188 | 162 | 134 | 130 | 92 | 188 | 92 | |||||||||||||||||||||||||||||||||
Nonaccrual loans to total period-end loans |
1.34 | 1.59 | 1.95 | 2.02 | 3.00 | 1.34 | 3.00 |
(a) | Corporate Client Banking was known as Mid-Corporate Banking prior to January 1, 2011. | |
(b) | Allowance for loan losses of $257 million, $289 million, $360 million, $340 million and $535 million was held against nonaccrual loans retained at September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively. | |
(c) | Loans held-for-sale and loans at fair value were excluded when calculating the allowance coverage ratios and net charge-off rate. |
Page 24
JPMORGAN CHASE & CO. TREASURY & SECURITIES SERVICES FINANCIAL HIGHLIGHTS (in millions, except ratio and headcount data) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
INCOME STATEMENT |
||||||||||||||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||||||||||||||
Lending- and deposit-related fees |
$ | 310 | $ | 314 | $ | 303 | $ | 314 | $ | 318 | (1) | % | (3) | % | $ | 927 | $ | 942 | (2 | )% | ||||||||||||||||||||
Asset management, administration and commissions |
656 | 726 | 695 | 689 | 644 | (10 | ) | 2 | 2,077 | 2,008 | 3 | |||||||||||||||||||||||||||||
All other income |
141 | 143 | 139 | 209 | 210 | (1 | ) | (33 | ) | 423 | 595 | (29 | ) | |||||||||||||||||||||||||||
Noninterest revenue |
1,107 | 1,183 | 1,137 | 1,212 | 1,172 | (6 | ) | (6 | ) | 3,427 | 3,545 | (3 | ) | |||||||||||||||||||||||||||
Net interest income |
801 | 749 | 703 | 701 | 659 | 7 | 22 | 2,253 | 1,923 | 17 | ||||||||||||||||||||||||||||||
TOTAL NET REVENUE |
1,908 | 1,932 | 1,840 | 1,913 | 1,831 | (1 | ) | 4 | 5,680 | 5,468 | 4 | |||||||||||||||||||||||||||||
Provision for credit losses |
(20 | ) | (2 | ) | 4 | 10 | (2 | ) | NM | NM | (18 | ) | (57 | ) | 68 | |||||||||||||||||||||||||
Credit allocation income/(expense) (a) |
9 | 32 | 27 | (30 | ) | (31 | ) | (72 | ) | NM | 68 | (91 | ) | NM | ||||||||||||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||||||||||||||
Compensation expense |
718 | 719 | 715 | 679 | 701 | | 2 | 2,152 | 2,055 | 5 | ||||||||||||||||||||||||||||||
Noncompensation expense |
728 | 719 | 647 | 763 | 693 | 1 | 5 | 2,094 | 2,027 | 3 | ||||||||||||||||||||||||||||||
Amortization of intangibles |
24 | 15 | 15 | 28 | 16 | 60 | 50 | 54 | 52 | 4 | ||||||||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE |
1,470 | 1,453 | 1,377 | 1,470 | 1,410 | 1 | 4 | 4,300 | 4,134 | 4 | ||||||||||||||||||||||||||||||
Income before income tax expense |
467 | 513 | 486 | 403 | 392 | (9 | ) | 19 | 1,466 | 1,300 | 13 | |||||||||||||||||||||||||||||
Income tax expense |
162 | 180 | 170 | 146 | 141 | (10 | ) | 15 | 512 | 478 | 7 | |||||||||||||||||||||||||||||
NET INCOME |
$ | 305 | $ | 333 | $ | 316 | $ | 257 | $ | 251 | (8 | ) | 22 | $ | 954 | $ | 822 | 16 | ||||||||||||||||||||||
REVENUE BY BUSINESS |
||||||||||||||||||||||||||||||||||||||||
Treasury Services |
$ | 969 | $ | 930 | $ | 891 | $ | 953 | $ | 937 | 4 | 3 | $ | 2,790 | $ | 2,745 | 2 | |||||||||||||||||||||||
Worldwide Securities Services |
939 | 1,002 | 949 | 960 | 894 | (6 | ) | 5 | 2,890 | 2,723 | 6 | |||||||||||||||||||||||||||||
TOTAL NET REVENUE |
$ | 1,908 | $ | 1,932 | $ | 1,840 | $ | 1,913 | $ | 1,831 | (1 | ) | 4 | $ | 5,680 | $ | 5,468 | 4 | ||||||||||||||||||||||
REVENUE BY GEOGRAPHIC REGION (b) |
||||||||||||||||||||||||||||||||||||||||
Asia/Pacific |
$ | 321 | $ | 299 | $ | 276 | $ | 270 | $ | 256 | 7 | 25 | $ | 896 | $ | 708 | 27 | |||||||||||||||||||||||
Latin America/Caribbean |
61 | 80 | 76 | 91 | 50 | (24 | ) | 22 | 217 | 166 | 31 | |||||||||||||||||||||||||||||
Europe/Middle East/Africa |
648 | 691 | 630 | 624 | 579 | (6 | ) | 12 | 1,969 | 1,765 | 12 | |||||||||||||||||||||||||||||
North America |
878 | 862 | 858 | 928 | 946 | 2 | (7 | ) | 2,598 | 2,829 | (8 | ) | ||||||||||||||||||||||||||||
TOTAL NET REVENUE |
$ | 1,908 | $ | 1,932 | $ | 1,840 | $ | 1,913 | $ | 1,831 | (1 | ) | 4 | $ | 5,680 | $ | 5,468 | 4 | ||||||||||||||||||||||
FINANCIAL RATIOS |
||||||||||||||||||||||||||||||||||||||||
ROE |
17 | % | 19 | % | 18 | % | 16 | % | 15 | % | 18 | % | 17 | % | ||||||||||||||||||||||||||
Overhead ratio |
77 | 75 | 75 | 77 | 77 | 76 | 76 | |||||||||||||||||||||||||||||||||
Pretax margin ratio |
24 | 27 | 26 | 21 | 21 | 26 | 24 | |||||||||||||||||||||||||||||||||
SELECTED
BALANCE SHEET DATA (period-end) |
||||||||||||||||||||||||||||||||||||||||
Loans (c) |
$ | 36,389 | $ | 34,034 | $ | 31,020 | $ | 27,168 | $ | 26,899 | 7 | 35 | $ | 36,389 | $ | 26,899 | 35 | |||||||||||||||||||||||
Equity |
7,000 | 7,000 | 7,000 | 6,500 | 6,500 | | 8 | 7,000 | 6,500 | 8 | ||||||||||||||||||||||||||||||
TRADE
FINANCE LOANS BY
GEOGRAPHIC REGION (period-end) (b) |
||||||||||||||||||||||||||||||||||||||||
Asia/Pacific |
$ | 16,918 | $ | 15,736 | $ | 14,607 | $ | 11,834 | $ | 10,238 | 8 | 65 | $ | 16,918 | $ | 10,238 | 65 | |||||||||||||||||||||||
Latin America/Caribbean |
5,228 | 4,553 | 4,014 | 3,628 | 3,357 | 15 | 56 | 5,228 | 3,357 | 56 | ||||||||||||||||||||||||||||||
Europe/Middle East/Africa |
6,853 | 6,184 | 5,794 | 4,874 | 3,391 | 11 | 102 | 6,853 | 3,391 | 102 | ||||||||||||||||||||||||||||||
North America |
1,105 | 1,000 | 1,084 | 820 | 820 | 11 | 35 | 1,105 | 820 | 35 | ||||||||||||||||||||||||||||||
TOTAL TRADE FINANCE LOANS |
$ | 30,104 | $ | 27,473 | $ | 25,499 | $ | 21,156 | $ | 17,806 | 10 | 69 | $ | 30,104 | $ | 17,806 | 69 | |||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (average) |
||||||||||||||||||||||||||||||||||||||||
Total assets |
$ | 60,141 | $ | 52,688 | $ | 47,873 | $ | 46,301 | $ | 42,445 | 14 | 42 | $ | 53,612 | $ | 41,211 | 30 | |||||||||||||||||||||||
Loans (c) |
35,303 | 33,069 | 29,290 | 26,941 | 24,337 | 7 | 45 | 32,576 | 22,035 | 48 | ||||||||||||||||||||||||||||||
Liability balances |
341,107 | 302,858 | 265,720 | 256,661 | 242,517 | 13 | 41 | 303,504 | 245,684 | 24 | ||||||||||||||||||||||||||||||
Equity |
7,000 | 7,000 | 7,000 | 6,500 | 6,500 | | 8 | 7,000 | 6,500 | 8 | ||||||||||||||||||||||||||||||
Headcount |
28,157 | 28,230 | 28,040 | 29,073 | 28,544 | | (1 | ) | 28,157 | 28,544 | (1 | ) |
(a) | IB manages traditional credit exposures related to GCB on behalf of IB and TSS. Effective January 1, 2011, IB and TSS share the economics related to the Firms GCB clients. Included within this allocation are net revenues, provision for credit losses, as well as expenses. The prior-year periods reflected a reimbursement to IB for a portion of the total costs of managing the credit portfolio. IB recognizes this credit allocation as a component of all other income. | |
(b) | Revenue and trade finance loans are based on TSS managements view of the domicile of clients. | |
(c) | Loan balances include trade finance loans, wholesale overdrafts and commercial card. Effective January 1, 2011, the commercial card loan business (of approximately $1.2 billion) that was previously in TSS was transferred to Card. There is no material impact on the financial data; prior-year periods were not revised. |
Page 25
JPMORGAN CHASE & CO. TREASURY & SECURITIES SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | ||||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | ||||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | ||||||||||||||||||||||||||||||||
TSS FIRMWIDE DISCLOSURES |
|||||||||||||||||||||||||||||||||||||||||
TS revenue reported |
$ | 969 | $ | 930 | $ | 891 | $ | 953 | $ | 937 | 4 | % | 3 | % | $ | 2,790 | $ | 2,745 | 2 | % | |||||||||||||||||||||
TS revenue reported in CB (a) |
572 | 556 | 542 | 659 | 670 | 3 | (15 | ) | 1,670 | 1,973 | (15 | ) | |||||||||||||||||||||||||||||
TS revenue reported in other lines of business |
68 | 65 | 63 | 65 | 64 | 5 | 6 | 196 | 182 | 8 | |||||||||||||||||||||||||||||||
TS firmwide revenue (b) |
1,609 | 1,551 | 1,496 | 1,677 | 1,671 | 4 | (4 | ) | 4,656 | 4,900 | (5 | ) | |||||||||||||||||||||||||||||
Worldwide Securities Services revenue |
939 | 1,002 | 949 | 960 | 894 | (6 | ) | 5 | 2,890 | 2,723 | 6 | ||||||||||||||||||||||||||||||
TSS firmwide revenue (b) |
$ | 2,548 | $ | 2,553 | $ | 2,445 | $ | 2,637 | $ | 2,565 | | (1 | ) | $ | 7,546 | $ | 7,623 | (1 | ) | ||||||||||||||||||||||
TS firmwide liability balances (average) (c) |
$ | 414,485 | $ | 375,432 | $ | 339,240 | $ | 320,745 | $ | 302,921 | 10 | 37 | $ | 376,661 | $ | 303,742 | 24 | ||||||||||||||||||||||||
TSS firmwide liability balances (average) (c) |
521,383 | 465,627 | 421,920 | 404,195 | 380,370 | 12 | 37 | 470,008 | 381,623 | 23 | |||||||||||||||||||||||||||||||
TSS FIRMWIDE FINANCIAL RATIOS |
|||||||||||||||||||||||||||||||||||||||||
TS firmwide overhead ratio (a)(d) |
56 | % | 59 | % | 56 | % | 54 | % | 55 | % | 57 | % | 55 | % | |||||||||||||||||||||||||||
TSS firmwide overhead ratio (a)(d) |
67 | 67 | 67 | 66 | 65 | 67 | 65 | ||||||||||||||||||||||||||||||||||
FIRMWIDE BUSINESS METRICS |
|||||||||||||||||||||||||||||||||||||||||
Assets under custody (in billions) |
$ | 16,250 | $ | 16,945 | $ | 16,619 | $ | 16,120 | $ | 15,863 | (4 | ) | 2 | $ | 16,250 | $ | 15,863 | 2 | |||||||||||||||||||||||
Number of: |
|||||||||||||||||||||||||||||||||||||||||
U.S.$ ACH transactions originated |
972 | 959 | 992 | 995 | 978 | 1 | (1 | ) | 2,923 | 2,897 | 1 | ||||||||||||||||||||||||||||||
Total U.S.$ clearing volume (in thousands) |
33,117 | 32,274 | 30,971 | 32,144 | 30,779 | 3 | 8 | 96,362 | 89,979 | 7 | |||||||||||||||||||||||||||||||
International electronic funds transfer volume
(in thousands) (e) |
62,718 | 63,208 | 60,942 | 60,882 | 57,333 | (1 | ) | 9 | 186,868 | 171,571 | 9 | ||||||||||||||||||||||||||||||
Wholesale check volume |
601 | 608 | 532 | 525 | 531 | (1 | ) | 13 | 1,741 | 1,535 | 13 | ||||||||||||||||||||||||||||||
Wholesale cards issued (in thousands) (f) |
24,288 | 23,746 | 23,170 | 29,785 | 28,404 | 2 | (14 | ) | 24,288 | 28,404 | (14 | ) | |||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS |
|||||||||||||||||||||||||||||||||||||||||
Net charge-offs |
$ | | $ | | $ | | $ | | $ | 1 | | NM | $ | | $ | 1 | NM | ||||||||||||||||||||||||
Nonaccrual loans |
3 | 3 | 11 | 12 | 14 | | (79 | ) | 3 | 14 | (79 | ) | |||||||||||||||||||||||||||||
Allowance for credit losses: |
|||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses |
49 | 74 | 69 | 65 | 54 | (34 | ) | (9 | ) | 49 | 54 | (9 | ) | ||||||||||||||||||||||||||||
Allowance for lending-related commitments |
46 | 41 | 48 | 51 | 52 | 12 | (12 | ) | 46 | 52 | (12 | ) | |||||||||||||||||||||||||||||
Total allowance for credit losses |
95 | 115 | 117 | 116 | 106 | (17 | ) | (10 | ) | 95 | 106 | (10 | ) | ||||||||||||||||||||||||||||
Net charge-off rate |
| % | | % | | % | | % | 0.02 | % | | % | 0.01 | % | |||||||||||||||||||||||||||
Allowance for loan losses to period-end loans |
0.14 | 0.22 | 0.22 | 0.24 | 0.20 | 0.14 | 0.20 | ||||||||||||||||||||||||||||||||||
Allowance for loan losses to nonaccrual loans |
NM | NM | NM | NM | 386 | NM | 386 | ||||||||||||||||||||||||||||||||||
Nonaccrual loans to period-end loans |
0.01 | 0.01 | 0.04 | 0.04 | 0.05 | 0.01 | 0.05 |
(a) | Effective January 1, 2011, certain CB revenues were excluded in the TS firmwide metrics; they are instead directly captured within CBs lending revenue by product. For the three months ended September 30, 2011, June 30, 2011 and March 31, 2011, the impact of this change was $109 million, $114 million and $107 million, respectively, and $330 million for the nine months ended September 30, 2011. In prior-year periods, these revenues were included in CBs treasury services revenue by product. | |
(b) | TSS firmwide revenue includes foreign exchange (FX) revenue recorded in TSS and FX revenue associated with TSS customers who are FX customers of IB. However, some of the FX revenue associated with TSS customers who are FX customers of IB is not included in TS and TSS firmwide revenue. The total FX revenue generated was $179 million, $165 million, $160 million, $181 million and $143 million for the three months ended September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively, and $504 million and $455 million for the nine months ended September 30, 2011 and 2010, respectively. | |
(c) | Firmwide liability balances include liability balances recorded in CB. | |
(d) | Overhead ratios have been calculated based on firmwide revenue and TSS and TS expense, respectively, including those allocated to certain other lines of business. FX revenue and expense recorded in IB for TSS-related FX activity are not included in this ratio. | |
(e) | International electronic funds transfer includes non-U.S. dollar Automated Clearing House (ACH) and clearing volume. | |
(f) | Wholesale cards issued and outstanding include U.S. domestic commercial, stored value, prepaid and government electronic benefit card products. Effective January 1, 2011, the commercial card portfolio was transferred from TSS to Card. |
Page 26
JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS (in millions, except ratio and headcount data) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
INCOME STATEMENT |
||||||||||||||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||||||||||||||
Asset management, administration and commissions |
$ | 1,617 | $ | 1,818 | $ | 1,707 | $ | 1,846 | $ | 1,498 | (11) | % | 8 | % | $ | 5,142 | $ | 4,528 | 14 | % | ||||||||||||||||||||
All other income |
281 | 321 | 313 | 386 | 282 | (12 | ) | | 915 | 725 | 26 | |||||||||||||||||||||||||||||
Noninterest revenue |
1,898 | 2,139 | 2,020 | 2,232 | 1,780 | (11 | ) | 7 | 6,057 | 5,253 | 15 | |||||||||||||||||||||||||||||
Net interest income |
418 | 398 | 386 | 381 | 392 | 5 | 7 | 1,202 | 1,118 | 8 | ||||||||||||||||||||||||||||||
TOTAL NET REVENUE |
2,316 | 2,537 | 2,406 | 2,613 | 2,172 | (9 | ) | 7 | 7,259 | 6,371 | 14 | |||||||||||||||||||||||||||||
Provision for credit losses |
26 | 12 | 5 | 23 | 23 | 117 | 13 | 43 | 63 | (32 | ) | |||||||||||||||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||||||||||||||
Compensation expense |
999 | 1,068 | 1,039 | 1,078 | 914 | (6 | ) | 9 | 3,106 | 2,685 | 16 | |||||||||||||||||||||||||||||
Noncompensation expense |
775 | 704 | 599 | 679 | 557 | 10 | 39 | 2,078 | 1,598 | 30 | ||||||||||||||||||||||||||||||
Amortization of intangibles |
22 | 22 | 22 | 20 | 17 | | 29 | 66 | 52 | 27 | ||||||||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE |
1,796 | 1,794 | 1,660 | 1,777 | 1,488 | | 21 | 5,250 | 4,335 | 21 | ||||||||||||||||||||||||||||||
Income before income tax expense |
494 | 731 | 741 | 813 | 661 | (32 | ) | (25 | ) | 1,966 | 1,973 | | ||||||||||||||||||||||||||||
Income tax expense |
109 | 292 | 275 | 306 | 241 | (63 | ) | (55 | ) | 676 | 770 | (12 | ) | |||||||||||||||||||||||||||
NET INCOME |
$ | 385 | $ | 439 | $ | 466 | $ | 507 | $ | 420 | (12 | ) | (8 | ) | $ | 1,290 | $ | 1,203 | 7 | |||||||||||||||||||||
REVENUE BY CLIENT SEGMENT |
||||||||||||||||||||||||||||||||||||||||
Private Banking |
$ | 1,298 | $ | 1,289 | $ | 1,317 | $ | 1,376 | $ | 1,181 | 1 | 10 | $ | 3,904 | $ | 3,484 | 12 | |||||||||||||||||||||||
Institutional |
455 | 704 | 549 | 675 | 506 | (35 | ) | (10 | ) | 1,708 | 1,505 | 13 | ||||||||||||||||||||||||||||
Retail |
563 | 544 | 540 | 562 | 485 | 3 | 16 | 1,647 | 1,382 | 19 | ||||||||||||||||||||||||||||||
TOTAL NET REVENUE |
$ | 2,316 | $ | 2,537 | $ | 2,406 | $ | 2,613 | $ | 2,172 | (9 | ) | 7 | $ | 7,259 | $ | 6,371 | 14 | ||||||||||||||||||||||
FINANCIAL RATIOS |
||||||||||||||||||||||||||||||||||||||||
ROE |
24 | % | 27 | % | 29 | % | 31 | % | 26 | % | 27 | % | 25 | % | ||||||||||||||||||||||||||
Overhead ratio |
78 | 71 | 69 | 68 | 69 | 72 | 68 | |||||||||||||||||||||||||||||||||
Pretax margin ratio |
21 | 29 | 31 | 31 | 30 | 27 | 31 | |||||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (period-end) |
||||||||||||||||||||||||||||||||||||||||
Loans |
$ | 54,178 | $ | 51,747 | $ | 46,454 | $ | 44,084 | $ | 41,408 | 5 | 31 | $ | 54,178 | $ | 41,408 | 31 | |||||||||||||||||||||||
Equity |
6,500 | 6,500 | 6,500 | 6,500 | 6,500 | | | 6,500 | 6,500 | | ||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (average) |
||||||||||||||||||||||||||||||||||||||||
Total assets |
$ | 78,669 | $ | 74,206 | $ | 68,918 | $ | 69,290 | $ | 64,911 | 6 | 21 | $ | 73,967 | $ | 63,629 | 16 | |||||||||||||||||||||||
Loans |
52,652 | 48,837 | 44,948 | 42,296 | 39,417 | 8 | 34 | 48,840 | 37,819 | 29 | ||||||||||||||||||||||||||||||
Deposits |
111,090 | 97,509 | 95,250 | 89,314 | 87,841 | 14 | 26 | 101,341 | 85,012 | 19 | ||||||||||||||||||||||||||||||
Equity |
6,500 | 6,500 | 6,500 | 6,500 | 6,500 | | | 6,500 | 6,500 | | ||||||||||||||||||||||||||||||
Headcount |
18,084 | 17,963 | 17,203 | 16,918 | 16,510 | 1 | 10 | 18,084 | 16,510 | 10 |
Page 27
JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
BUSINESS METRICS |
||||||||||||||||||||||||||||||||||||||||
Number of: |
||||||||||||||||||||||||||||||||||||||||
Client advisors (a) |
2,418 | 2,282 | 2,288 | 2,281 | 2,244 | 6 | % | 8 | % | 2,418 | 2,244 | 8 | % | |||||||||||||||||||||||||||
Retirement planning services participants (in thousands) |
1,755 | 1,613 | 1,604 | 1,580 | 1,665 | 9 | 5 | 1,755 | 1,665 | 5 | ||||||||||||||||||||||||||||||
JPMorgan Securities brokers (a) |
446 | 437 | 431 | 415 | 419 | 2 | 6 | 446 | 419 | 6 | ||||||||||||||||||||||||||||||
% of customer assets in 4 & 5 Star Funds (b) |
47 | % | 50 | % | 46 | % | 49 | % | 42 | % | (6 | ) | 12 | 47 | % | 42 | % | 12 | ||||||||||||||||||||||
% of AUM in 1st and 2nd quartiles: (c) |
||||||||||||||||||||||||||||||||||||||||
1 year |
49 | 56 | 57 | 67 | 67 | (13 | ) | (27 | ) | 49 | 67 | (27 | ) | |||||||||||||||||||||||||||
3 years |
73 | 71 | 70 | 72 | 65 | 3 | 12 | 73 | 65 | 12 | ||||||||||||||||||||||||||||||
5 years |
77 | 76 | 77 | 80 | 74 | 1 | 4 | 77 | 74 | 4 | ||||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS |
||||||||||||||||||||||||||||||||||||||||
Net charge-offs |
$ | | $ | 33 | $ | 11 | $ | 8 | $ | 13 | NM | NM | $ | 44 | $ | 68 | (35 | ) | ||||||||||||||||||||||
Nonaccrual loans |
311 | 252 | 254 | 375 | 294 | 23 | 6 | 311 | 294 | 6 | ||||||||||||||||||||||||||||||
Allowance for credit losses: |
||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses |
240 | 222 | 257 | 267 | 257 | 8 | (7 | ) | 240 | 257 | (7 | ) | ||||||||||||||||||||||||||||
Allowance for lending-related commitments |
9 | 9 | 4 | 4 | 3 | | 200 | 9 | 3 | 200 | ||||||||||||||||||||||||||||||
Total allowance for credit losses |
249 | 231 | 261 | 271 | 260 | 8 | (4 | ) | 249 | 260 | (4 | ) | ||||||||||||||||||||||||||||
Net charge-off rate |
| % | 0.27 | % | 0.10 | % | 0.08 | % | 0.13 | % | 0.12 | % | 0.24 | % | ||||||||||||||||||||||||||
Allowance for loan losses to period-end loans |
0.44 | 0.43 | 0.55 | 0.61 | 0.62 | 0.44 | 0.62 | |||||||||||||||||||||||||||||||||
Allowance for loan losses to nonaccrual loans |
77 | 88 | 101 | 71 | 87 | 77 | 87 | |||||||||||||||||||||||||||||||||
Nonaccrual loans to period-end loans |
0.57 | 0.49 | 0.55 | 0.85 | 0.71 | 0.57 | 0.71 |
(a) | Effective January 1, 2011, the methodology used to determine client advisors was revised, and the prior-year periods have been revised. | |
(b) | Derived from Morningstar for the U.S., the U.K., Luxembourg, France, Hong Kong and Taiwan; and Nomura for Japan. | |
(c) | Quartile ranking sourced from: Lipper for the U.S. and Taiwan; Morningstar for the U.K., Luxembourg, France and Hong Kong; and Nomura for Japan. |
Page 28
JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS, CONTINUED (in billions) |
September 30, 2011 | ||||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||||
Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Sep 30 | ||||||||||||||||||||||
2011 | 2011 | 2011 | 2010 | 2010 | 2011 | 2010 | ||||||||||||||||||||||
ASSETS UNDER SUPERVISION (a) |
||||||||||||||||||||||||||||
Assets by asset class |
||||||||||||||||||||||||||||
Liquidity |
$ | 464 | $ | 476 | $ | 490 | $ | 497 | $ | 521 | (3) | % | (11 | )% | ||||||||||||||
Fixed income |
321 | 319 | 305 | 289 | 277 | 1 | 16 | |||||||||||||||||||||
Equities and multi-asset |
356 | 430 | 421 | 404 | 362 | (17 | ) | (2 | ) | |||||||||||||||||||
Alternatives |
113 | 117 | 114 | 108 | 97 | (3 | ) | 16 | ||||||||||||||||||||
TOTAL ASSETS UNDER MANAGEMENT |
1,254 | 1,342 | 1,330 | 1,298 | 1,257 | (7 | ) | | ||||||||||||||||||||
Custody/brokerage/administration/deposits |
552 | 582 | 578 | 542 | 513 | (5 | ) | 8 | ||||||||||||||||||||
TOTAL ASSETS UNDER SUPERVISION |
$ | 1,806 | $ | 1,924 | $ | 1,908 | $ | 1,840 | $ | 1,770 | (6 | ) | 2 | |||||||||||||||
Assets by client segment |
||||||||||||||||||||||||||||
Private Banking |
$ | 276 | $ | 291 | $ | 293 | $ | 284 | $ | 276 | (5 | ) | | |||||||||||||||
Institutional (b) |
673 | 708 | 711 | 703 | 696 | (5 | ) | (3 | ) | |||||||||||||||||||
Retail (b) |
305 | 343 | 326 | 311 | 285 | (11 | ) | 7 | ||||||||||||||||||||
TOTAL ASSETS UNDER MANAGEMENT |
$ | 1,254 | $ | 1,342 | $ | 1,330 | $ | 1,298 | $ | 1,257 | (7 | ) | | |||||||||||||||
Private Banking |
$ | 738 | $ | 776 | $ | 773 | $ | 731 | $ | 698 | (5 | ) | 6 | |||||||||||||||
Institutional (b) |
674 | 709 | 713 | 703 | 697 | (5 | ) | (3 | ) | |||||||||||||||||||
Retail (b) |
394 | 439 | 422 | 406 | 375 | (10 | ) | 5 | ||||||||||||||||||||
TOTAL ASSETS UNDER SUPERVISION |
$ | 1,806 | $ | 1,924 | $ | 1,908 | $ | 1,840 | $ | 1,770 | (6 | ) | 2 | |||||||||||||||
Mutual fund assets by asset class |
||||||||||||||||||||||||||||
Liquidity |
$ | 409 | $ | 421 | $ | 436 | $ | 446 | $ | 466 | (3 | ) | (12 | ) | ||||||||||||||
Fixed income |
101 | 105 | 99 | 92 | 88 | (4 | ) | 15 | ||||||||||||||||||||
Equities and multi-asset |
139 | 176 | 173 | 169 | 151 | (21 | ) | (8 | ) | |||||||||||||||||||
Alternatives |
8 | 9 | 8 | 7 | 7 | (11 | ) | 14 | ||||||||||||||||||||
TOTAL MUTUAL FUND ASSETS |
$ | 657 | $ | 711 | $ | 716 | $ | 714 | $ | 712 | (8 | ) | (8 | ) | ||||||||||||||
(a) | Excludes assets under management of American Century Companies, Inc. in which the Firm sold its ownership interest on August 31, 2011. The Firm previously had an ownership interest of 40% at June 30, 2011 and March 31, 2011 and 41% at December 31, 2010 and September 30, 2010. | |
(b) | In the second quarter of 2011, the client hierarchy used to determine asset classification was revised, and the prior-year periods have been revised. |
Page 29
JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS, CONTINUED (in billions) |
NINE MONTHS ENDED | ||||||||||||||||||||||||||||
SEPTEMBER 30, | ||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2011 | 2010 | ||||||||||||||||||||||
ASSETS UNDER SUPERVISION (continued) |
||||||||||||||||||||||||||||
Assets under management rollforward |
||||||||||||||||||||||||||||
Beginning balance |
$ | 1,342 | $ | 1,330 | $ | 1,298 | $ | 1,257 | $ | 1,161 | $ | 1,298 | $ | 1,249 | ||||||||||||||
Net asset flows: |
||||||||||||||||||||||||||||
Liquidity |
(10 | ) | (16 | ) | (9 | ) | (25 | ) | 27 | (35 | ) | (64 | ) | |||||||||||||||
Fixed income |
3 | 12 | 16 | 10 | 12 | 31 | 40 | |||||||||||||||||||||
Equities, multi-asset and alternatives |
(1 | ) | 7 | 11 | 13 | (1 | ) | 17 | 6 | |||||||||||||||||||
Market/performance/other impacts |
(80 | ) | 9 | 14 | 43 | 58 | (57 | ) | 26 | |||||||||||||||||||
Ending balance |
$ | 1,254 | $ | 1,342 | $ | 1,330 | $ | 1,298 | $ | 1,257 | $ | 1,254 | $ | 1,257 | ||||||||||||||
Assets under supervision rollforward |
||||||||||||||||||||||||||||
Beginning balance |
$ | 1,924 | $ | 1,908 | $ | 1,840 | $ | 1,770 | $ | 1,640 | $ | 1,840 | $ | 1,701 | ||||||||||||||
Net asset flows |
11 | 12 | 31 | 1 | 41 | 54 | 27 | |||||||||||||||||||||
Market/performance/other impacts |
(129 | ) | 4 | 37 | 69 | 89 | (88 | ) | 42 | |||||||||||||||||||
Ending balance |
$ | 1,806 | $ | 1,924 | $ | 1,908 | $ | 1,840 | $ | 1,770 | $ | 1,806 | $ | 1,770 | ||||||||||||||
Page 30
JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS, CONTINUED (in billions, except where otherwise noted) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
INTERNATIONAL METRICS |
||||||||||||||||||||||||||||||||||||||||
Total net revenue: (in millions) (a) |
||||||||||||||||||||||||||||||||||||||||
Asia/Pacific |
$ | 248 | $ | 257 | $ | 246 | $ | 263 | $ | 226 | (4) | % | 10 | % | $ | 751 | $ | 662 | 13 | % | ||||||||||||||||||||
Latin America/Caribbean |
168 | 251 | 165 | 168 | 125 | (33 | ) | 34 | 584 | 373 | 57 | |||||||||||||||||||||||||||||
Europe/Middle East/Africa |
395 | 478 | 439 | 481 | 395 | (17 | ) | | 1,312 | 1,161 | 13 | |||||||||||||||||||||||||||||
North America |
1,505 | 1,551 | 1,556 | 1,701 | 1,426 | (3 | ) | 6 | 4,612 | 4,175 | 10 | |||||||||||||||||||||||||||||
Total net revenue |
$ | 2,316 | $ | 2,537 | $ | 2,406 | $ | 2,613 | $ | 2,172 | (9 | ) | 7 | $ | 7,259 | $ | 6,371 | 14 | ||||||||||||||||||||||
Assets under management: |
||||||||||||||||||||||||||||||||||||||||
Asia/Pacific |
$ | 104 | $ | 119 | $ | 115 | $ | 111 | $ | 107 | (13 | ) | (3 | ) | $ | 104 | $ | 107 | (3 | ) | ||||||||||||||||||||
Latin America/Caribbean |
32 | 37 | 35 | 35 | 27 | (14 | ) | 19 | 32 | 27 | 19 | |||||||||||||||||||||||||||||
Europe/Middle East/Africa |
255 | 298 | 300 | 282 | 258 | (14 | ) | (1 | ) | 255 | 258 | (1 | ) | |||||||||||||||||||||||||||
North America |
863 | 888 | 880 | 870 | 865 | (3 | ) | | 863 | 865 | | |||||||||||||||||||||||||||||
Total assets under management |
$ | 1,254 | $ | 1,342 | $ | 1,330 | $ | 1,298 | $ | 1,257 | (7 | ) | | $ | 1,254 | $ | 1,257 | | ||||||||||||||||||||||
Assets under supervision: |
||||||||||||||||||||||||||||||||||||||||
Asia/Pacific |
$ | 140 | $ | 161 | $ | 155 | $ | 147 | $ | 139 | (13 | ) | 1 | $ | 140 | $ | 139 | 1 | ||||||||||||||||||||||
Latin America/Caribbean |
87 | 94 | 88 | 84 | 74 | (7 | ) | 18 | 87 | 74 | 18 | |||||||||||||||||||||||||||||
Europe/Middle East/Africa |
306 | 353 | 353 | 331 | 307 | (13 | ) | | 306 | 307 | | |||||||||||||||||||||||||||||
North America |
1,273 | 1,316 | 1,312 | 1,278 | 1,250 | (3 | ) | 2 | 1,273 | 1,250 | 2 | |||||||||||||||||||||||||||||
Total assets under supervision |
$ | 1,806 | $ | 1,924 | $ | 1,908 | $ | 1,840 | $ | 1,770 | (6 | ) | 2 | $ | 1,806 | $ | 1,770 | 2 |
(a) | Regional revenue is based on the domicile of clients. |
Page 31
JPMORGAN CHASE & CO. CORPORATE/PRIVATE EQUITY FINANCIAL HIGHLIGHTS (in millions, except headcount data) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
INCOME STATEMENT |
||||||||||||||||||||||||||||||||||||||||
REVENUE |
||||||||||||||||||||||||||||||||||||||||
Principal transactions |
$ | (933 | ) | $ | 745 | $ | 1,298 | $ | 587 | $ | 1,143 | NM | % | NM | % | $ | 1,110 | $ | 1,621 | (32 | )% | |||||||||||||||||||
Securities gains |
607 | 837 | 102 | 1,199 | 99 | (27 | ) | NM | 1,546 | 1,699 | (9 | ) | ||||||||||||||||||||||||||||
All other income |
186 | 265 | 78 | (24 | ) | (29 | ) | (30 | ) | NM | 529 | 277 | 91 | |||||||||||||||||||||||||||
Noninterest revenue |
(140 | ) | 1,847 | 1,478 | 1,762 | 1,213 | NM | NM | 3,185 | 3,597 | (11 | ) | ||||||||||||||||||||||||||||
Net interest income |
8 | 218 | 34 | (131 | ) | 371 | (96 | ) | (98 | ) | 260 | 2,194 | (88 | ) | ||||||||||||||||||||||||||
TOTAL NET REVENUE (a) |
(132 | ) | 2,065 | 1,512 | 1,631 | 1,584 | NM | NM | 3,445 | 5,791 | (41 | ) | ||||||||||||||||||||||||||||
Provision for credit losses |
(7 | ) | (9 | ) | (10 | ) | 2 | (3 | ) | 22 | (133 | ) | (26 | ) | 12 | NM | ||||||||||||||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||||||||||||||||||||||||||
Compensation expense |
552 | 614 | 657 | 538 | 574 | (10 | ) | (4 | ) | 1,823 | 1,819 | | ||||||||||||||||||||||||||||
Noncompensation expense (b) |
1,995 | 2,097 | 1,143 | 2,352 | 1,927 | (5 | ) | 4 | 5,235 | 6,436 | (19 | ) | ||||||||||||||||||||||||||||
Subtotal |
2,547 | 2,711 | 1,800 | 2,890 | 2,501 | (6 | ) | 2 | 7,058 | 8,255 | (15 | ) | ||||||||||||||||||||||||||||
Net expense allocated to other businesses |
(1,331 | ) | (1,270 | ) | (1,238 | ) | (1,191 | ) | (1,227 | ) | (5 | ) | (8 | ) | (3,839 | ) | (3,599 | ) | (7 | ) | ||||||||||||||||||||
TOTAL NONINTEREST EXPENSE |
1,216 | 1,441 | 562 | 1,699 | 1,274 | (16 | ) | (5 | ) | 3,219 | 4,656 | (31 | ) | |||||||||||||||||||||||||||
Income/(loss) before income tax expense/(benefit) |
(1,341 | ) | 633 | 960 | (70 | ) | 313 | NM | NM | 252 | 1,123 | (78 | ) | |||||||||||||||||||||||||||
Income tax expense/(benefit) (c) |
(696 | ) | 131 | 238 | (99 | ) | (35 | ) | NM | NM | (327 | ) | (106 | ) | (208 | ) | ||||||||||||||||||||||||
NET INCOME/(LOSS) |
$ | (645 | ) | $ | 502 | $ | 722 | $ | 29 | $ | 348 | NM | NM | $ | 579 | $ | 1,229 | (53 | ) | |||||||||||||||||||||
MEMO: |
||||||||||||||||||||||||||||||||||||||||
TOTAL NET REVENUE |
||||||||||||||||||||||||||||||||||||||||
Private equity |
$ | (546 | ) | $ | 796 | $ | 699 | $ | 355 | $ | 721 | NM | NM | $ | 949 | $ | 884 | 7 | ||||||||||||||||||||||
Corporate |
414 | 1,269 | 813 | 1,276 | 863 | (67 | ) | (52 | ) | 2,496 | 4,907 | (49 | ) | |||||||||||||||||||||||||||
TOTAL NET REVENUE |
$ | (132 | ) | $ | 2,065 | $ | 1,512 | $ | 1,631 | $ | 1,584 | NM | NM | $ | 3,445 | $ | 5,791 | (41 | ) | |||||||||||||||||||||
NET INCOME/(LOSS) |
||||||||||||||||||||||||||||||||||||||||
Private equity |
$ | (347 | ) | $ | 444 | $ | 383 | $ | 178 | $ | 344 | NM | NM | $ | 480 | $ | 410 | 17 | ||||||||||||||||||||||
Corporate |
(298 | ) | 58 | 339 | (149 | ) | 4 | NM | NM | 99 | 819 | (88 | ) | |||||||||||||||||||||||||||
TOTAL NET INCOME/(LOSS) |
$ | (645 | ) | $ | 502 | $ | 722 | $ | 29 | $ | 348 | NM | NM | $ | 579 | $ | 1,229 | (53 | ) | |||||||||||||||||||||
Headcount |
21,844 | 21,444 | 20,927 | 20,030 | 19,756 | 2 | 11 | 21,844 | 19,756 | 11 |
(a) | Total net revenue included tax-equivalent adjustments, predominantly due to tax-exempt income from municipal bond investments of $73 million, $69 million, $64 million, $63 million and $58 million for the three months ended September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively, and $206 million and $163 million for the nine months ended September 30, 2011 and 2010, respectively, | |
(b) | Includes litigation expense of $1.0 billion, $1.3 billion, $0.4 billion, $1.5 billion and $1.3 billion for the three months ended September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively, and $2.6 billion and $4.3 billion for the nine months ended September 30, 2011 and 2010, respectively. | |
(c) | Income tax expense/(benefit) in the third quarter of 2010 includes tax benefits recognized upon the resolution of tax audits. |
Page 32
JPMORGAN CHASE & CO. CORPORATE/PRIVATE EQUITY FINANCIAL HIGHLIGHTS, CONTINUED (in millions) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION |
||||||||||||||||||||||||||||||||||||||||
TREASURY and CHIEF INVESTMENT OFFICE (CIO) |
||||||||||||||||||||||||||||||||||||||||
Securities gains (a) |
$ | 459 | $ | 837 | $ | 102 | $ | 1,199 | $ | 99 | (45) | % | 364 | % | $ | 1,398 | $ | 1,698 | (18) | % | ||||||||||||||||||||
Investment securities portfolio (average) |
324,596 | 335,543 | 313,319 | 322,218 | 321,428 | (3 | ) | 1 | 324,527 | 324,163 | | |||||||||||||||||||||||||||||
Investment securities portfolio (ending) |
330,800 | 318,237 | 328,013 | 310,801 | 334,140 | 4 | (1 | ) | 330,800 | 334,140 | (1 | ) | ||||||||||||||||||||||||||||
Mortgage loans (average) |
13,748 | 12,731 | 11,418 | 10,117 | 9,174 | 8 | 50 | 12,641 | 8,629 | 46 | ||||||||||||||||||||||||||||||
Mortgage loans (ending) |
14,226 | 13,243 | 12,171 | 10,739 | 9,550 | 7 | 49 | 14,226 | 9,550 | 49 | ||||||||||||||||||||||||||||||
PRIVATE EQUITY |
||||||||||||||||||||||||||||||||||||||||
Private equity gains/(losses) |
||||||||||||||||||||||||||||||||||||||||
Direct investments |
||||||||||||||||||||||||||||||||||||||||
Realized gains |
$ | 394 | $ | 1,219 | $ | 171 | $ | 1,039 | $ | 179 | (68 | ) | 120 | $ | 1,784 | $ | 370 | 382 | ||||||||||||||||||||||
Unrealized gains/(losses) (b) |
(827 | ) | (726 | ) | 370 | (781 | ) | 561 | (14 | ) | NM | (1,183 | ) | 479 | NM | |||||||||||||||||||||||||
Total direct investments |
(433 | ) | 493 | 541 | 258 | 740 | NM | NM | 601 | 849 | (29 | ) | ||||||||||||||||||||||||||||
Third-party fund investments |
(7 | ) | 323 | 186 | 129 | 10 | NM | NM | 502 | 112 | 348 | |||||||||||||||||||||||||||||
Total private equity gains/(losses) (c) |
$ | (440 | ) | $ | 816 | $ | 727 | $ | 387 | $ | 750 | NM | NM | $ | 1,103 | $ | 961 | 15 | ||||||||||||||||||||||
Private equity portfolio information |
||||||||||||||||||||||||||||||||||||||||
Direct investments |
||||||||||||||||||||||||||||||||||||||||
Publicly-held securities |
||||||||||||||||||||||||||||||||||||||||
Carrying value |
$ | 709 | $ | 670 | $ | 731 | $ | 875 | $ | 1,152 | 6 | (38 | ) | |||||||||||||||||||||||||||
Cost |
779 | 595 | 649 | 732 | 985 | 31 | (21 | ) | ||||||||||||||||||||||||||||||||
Quoted public value |
778 | 721 | 785 | 935 | 1,249 | 8 | (38 | ) | ||||||||||||||||||||||||||||||||
Privately-held direct securities |
||||||||||||||||||||||||||||||||||||||||
Carrying value |
4,322 | 5,680 | 7,212 | 5,882 | 6,388 | (24 | ) | (32 | ) | |||||||||||||||||||||||||||||||
Cost |
6,556 | 6,891 | 7,731 | 6,887 | 6,646 | (5 | ) | (1 | ) | |||||||||||||||||||||||||||||||
Third-party fund investments (d) |
||||||||||||||||||||||||||||||||||||||||
Carrying value |
2,399 | 2,481 | 2,179 | 1,980 | 1,814 | (3 | ) | 32 | ||||||||||||||||||||||||||||||||
Cost |
2,454 | 2,464 | 2,461 | 2,404 | 2,356 | | 4 | |||||||||||||||||||||||||||||||||
Total private equity portfolio |
||||||||||||||||||||||||||||||||||||||||
Carrying value |
$ | 7,430 | $ | 8,831 | $ | 10,122 | $ | 8,737 | $ | 9,354 | (16 | ) | (21 | ) | ||||||||||||||||||||||||||
Cost |
9,789 | 9,950 | 10,841 | 10,023 | 9,987 | (2 | ) | (2 | ) |
(a) | Reflects repositioning of the Corporate investment securities portfolio. | |
(b) | Unrealized gains/(losses) contain reversals of unrealized gains and losses that were recognized in prior periods and have now been realized. | |
(c) | Included in principal transactions revenue in the Consolidated Statements of Income. | |
(d) | Unfunded commitments to third-party private equity funds were $853 million, $876 million, $943 million, $1.0 billion and $1.1 billion at September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively. |
Page 33
JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION (in millions) |
September 30, 2011 | ||||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||||
Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Sep 30 | ||||||||||||||||||||||
2011 | 2011 | 2011 | 2010 | 2010 | 2011 | 2010 | ||||||||||||||||||||||
CREDIT EXPOSURE |
||||||||||||||||||||||||||||
Wholesale |
||||||||||||||||||||||||||||
Loans retained |
$ | 255,799 | $ | 244,224 | $ | 229,648 | $ | 222,510 | $ | 217,582 | 5 | % | 18 | % | ||||||||||||||
Loans held-for-sale and loans at fair value |
3,684 | 4,599 | 6,359 | 5,123 | 3,015 | (20 | ) | 22 | ||||||||||||||||||||
Total wholesale loans (a)(b) |
259,483 | 248,823 | 236,007 | 227,633 | 220,597 | 4 | 18 | |||||||||||||||||||||
Consumer, excluding credit card |
||||||||||||||||||||||||||||
Loans, excluding PCI loans and held-for sale loans |
||||||||||||||||||||||||||||
Home equity |
80,278 | 82,751 | 85,253 | 88,385 | 91,728 | (3 | ) | (12 | ) | |||||||||||||||||||
Prime mortgage, including option ARMs |
74,230 | 74,276 | 74,682 | 74,539 | 74,205 | | | |||||||||||||||||||||
Subprime mortgage |
10,045 | 10,441 | 10,841 | 11,287 | 12,009 | (4 | ) | (16 | ) | |||||||||||||||||||
Auto |
46,659 | 46,796 | 47,411 | 48,367 | 48,186 | | (3 | ) | ||||||||||||||||||||
Business banking |
17,272 | 17,141 | 16,957 | 16,812 | 16,568 | 1 | 4 | |||||||||||||||||||||
Student and other |
14,492 | 14,770 | 15,089 | 15,311 | 15,583 | (2 | ) | (7 | ) | |||||||||||||||||||
Total loans, excluding PCI loans and loans held-for-sale |
242,976 | 246,175 | 250,233 | 254,701 | 258,279 | (1 | ) | (6 | ) | |||||||||||||||||||
Loans PCI: (c) |
||||||||||||||||||||||||||||
Home equity |
23,105 | 23,535 | 23,973 | 24,459 | 24,982 | (2 | ) | (8 | ) | |||||||||||||||||||
Prime mortgage |
15,626 | 16,200 | 16,725 | 17,322 | 17,904 | (4 | ) | (13 | ) | |||||||||||||||||||
Subprime mortgage |
5,072 | 5,187 | 5,276 | 5,398 | 5,496 | (2 | ) | (8 | ) | |||||||||||||||||||
Option ARMs |
23,325 | 24,072 | 24,791 | 25,584 | 26,370 | (3 | ) | (12 | ) | |||||||||||||||||||
Total loans PCI |
67,128 | 68,994 | 70,765 | 72,763 | 74,752 | (3 | ) | (10 | ) | |||||||||||||||||||
Total loans retained |
310,104 | 315,169 | 320,998 | 327,464 | 333,031 | (2 | ) | (7 | ) | |||||||||||||||||||
Loans held-for-sale (d) |
131 | 221 | 188 | 154 | 467 | (41 | ) | (72 | ) | |||||||||||||||||||
Total consumer, excluding credit card loans |
310,235 | 315,390 | 321,186 | 327,618 | 333,498 | (2 | ) | (7 | ) | |||||||||||||||||||
Credit card |
||||||||||||||||||||||||||||
Loans retained |
127,041 | 125,523 | 124,791 | 135,524 | 136,436 | 1 | (7 | ) | ||||||||||||||||||||
Loans held-for-sale |
94 | | 4,012 | 2,152 | | NM | NM | |||||||||||||||||||||
Total credit card (b) |
127,135 | 125,523 | 128,803 | 137,676 | 136,436 | 1 | (7 | ) | ||||||||||||||||||||
Total consumer loans (e) |
437,370 | 440,913 | 449,989 | 465,294 | 469,934 | (1 | ) | (7 | ) | |||||||||||||||||||
Total loans |
696,853 | 689,736 | 685,996 | 692,927 | 690,531 | 1 | 1 | |||||||||||||||||||||
Derivative receivables |
108,853 | 77,383 | 78,744 | 80,481 | 97,293 | 41 | 12 | |||||||||||||||||||||
Receivables from customers and interests in
purchased receivables (f) |
25,719 | 32,678 | 38,230 | 32,932 | 26,025 | (21 | ) | (1 | ) | |||||||||||||||||||
Total credit-related assets |
134,572 | 110,061 | 116,974 | 113,413 | 123,318 | 22 | 9 | |||||||||||||||||||||
Wholesale lending-related commitments |
379,682 | 365,689 | 355,561 | 346,079 | 338,612 | 4 | 12 | |||||||||||||||||||||
Total |
$ | 1,211,107 | $ | 1,165,486 | $ | 1,158,531 | $ | 1,152,419 | $ | 1,152,461 | 4 | 5 | ||||||||||||||||
Memo: Total by category |
||||||||||||||||||||||||||||
Total wholesale exposure (g) |
$ | 773,633 | $ | 724,573 | $ | 708,542 | $ | 687,125 | $ | 682,527 | 7 | 13 | ||||||||||||||||
Total consumer loans (h) |
437,474 | 440,913 | 449,989 | 465,294 | 469,934 | (1 | ) | (7 | ) | |||||||||||||||||||
Total |
$ | 1,211,107 | $ | 1,165,486 | $ | 1,158,531 | $ | 1,152,419 | $ | 1,152,461 | 4 | 5 | ||||||||||||||||
(a) | Includes IB, CB, TSS, AM and Corporate/Private Equity. | |
(b) | Effective January 1, 2011, the commercial card business that was previously in TSS was transferred to Card. There is no material impact on the financial data; prior-year periods were not revised. | |
(c) | PCI loans represent loans acquired in the Washington Mutual transaction for which a deterioration in credit quality occurred between the origination date and JPMorgan Chases acquisition date. These loans were initially recorded at fair value and accrete interest income over the estimated lives of the underlying loans as long as cash flows are reasonably estimable, even if the underlying loans are contractually past due. | |
(d) | Included prime mortgages of $131 million, $221 million, $188 million, $154 million and $428 million at September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively, and student loans of $39 million at September 30, 2010. | |
(e) | Includes RFS, Card and residential real estate loans reported in Corporate/Private Equity. | |
(f) | Receivables from customers represent primarily margin loans to prime and retail brokerage customers, which are included in accrued interest and accounts receivable on the Consolidated Balance Sheets. | |
(g) | Primarily represents total wholesale loans, wholesale lending-related commitments, derivative receivables and receivables from customers. | |
(h) | Represents total consumer loans and excludes consumer lending-related commitments. |
Page 34
JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions, except ratio data) |
September 30, 2011 | ||||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||||
Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Sep 30 | ||||||||||||||||||||||
2011 | 2011 | 2011 | 2010 | 2010 | 2011 | 2010 | ||||||||||||||||||||||
NONPERFORMING ASSETS AND RATIOS |
||||||||||||||||||||||||||||
Wholesale |
||||||||||||||||||||||||||||
Loans retained |
$ | 3,011 | $ | 3,362 | $ | 4,578 | $ | 5,510 | $ | 5,231 | (10) | % | (42 | )% | ||||||||||||||
Loans held-for-sale and loans at fair value |
176 | 214 | 289 | 496 | 409 | (18 | ) | (57 | ) | |||||||||||||||||||
Total wholesale loans |
3,187 | 3,576 | 4,867 | 6,006 | 5,640 | (11 | ) | (43 | ) | |||||||||||||||||||
Consumer, excluding credit card |
||||||||||||||||||||||||||||
Home equity |
1,290 | 1,308 | 1,263 | 1,263 | 1,251 | (1 | ) | 3 | ||||||||||||||||||||
Prime mortgage, including option ARMs |
3,656 | 4,024 | 4,166 | 4,320 | 4,857 | (9 | ) | (25 | ) | |||||||||||||||||||
Subprime mortgage |
1,932 | 2,058 | 2,106 | 2,210 | 2,649 | (6 | ) | (27 | ) | |||||||||||||||||||
Auto |
114 | 111 | 120 | 141 | 145 | 3 | (21 | ) | ||||||||||||||||||||
Business banking |
756 | 770 | 810 | 832 | 895 | (2 | ) | (16 | ) | |||||||||||||||||||
Student and other |
68 | 79 | 107 | 67 | 64 | (14 | ) | 6 | ||||||||||||||||||||
Total consumer, excluding credit card |
7,816 | 8,350 | 8,572 | 8,833 | 9,861 | (6 | ) | (21 | ) | |||||||||||||||||||
Total credit card |
2 | 2 | 2 | 2 | 2 | | | |||||||||||||||||||||
Total consumer nonaccrual loans (a)(b) |
7,818 | 8,352 | 8,574 | 8,835 | 9,863 | (6 | ) | (21 | ) | |||||||||||||||||||
Total nonaccrual loans |
11,005 | 11,928 | 13,441 | 14,841 | 15,503 | (8 | ) | (29 | ) | |||||||||||||||||||
Derivative receivables |
11 | 22 | 21 | 34 | 255 | (50 | ) | (96 | ) | |||||||||||||||||||
Assets acquired in loan satisfactions |
1,178 | 1,290 | 1,524 | 1,682 | 1,898 | (9 | ) | (38 | ) | |||||||||||||||||||
Total nonperforming assets (a) |
12,194 | 13,240 | 14,986 | 16,557 | 17,656 | (8 | ) | (31 | ) | |||||||||||||||||||
Wholesale lending-related commitments (c) |
705 | 793 | 895 | 1,005 | 1,344 | (11 | ) | (48 | ) | |||||||||||||||||||
Total (a) |
$ | 12,899 | $ | 14,033 | $ | 15,881 | $ | 17,562 | $ | 19,000 | (8 | ) | (32 | ) | ||||||||||||||
Total nonaccrual loans to total loans |
1.58 | % | 1.73 | % | 1.96 | % | 2.14 | % | 2.25 | % | ||||||||||||||||||
Total wholesale nonaccrual loans to total wholesale loans |
1.23 | 1.44 | 2.06 | 2.64 | 2.56 | |||||||||||||||||||||||
Total consumer, excluding credit card nonaccrual loans to total consumer, excluding credit card loans |
2.52 | 2.65 | 2.67 | 2.70 | 2.96 | |||||||||||||||||||||||
NONPERFORMING ASSETS BY LOB |
||||||||||||||||||||||||||||
Investment Bank |
$ | 1,508 | $ | 1,788 | $ | 2,741 | $ | 3,770 | $ | 2,789 | (16 | ) | (46 | ) | ||||||||||||||
Retail Financial Services (b) |
8,444 | 9,033 | 9,482 | 9,854 | 10,989 | (7 | ) | (23 | ) | |||||||||||||||||||
Card Services & Auto |
232 | 233 | 275 | 269 | 268 | | (13 | ) | ||||||||||||||||||||
Commercial Banking |
1,611 | 1,831 | 2,134 | 2,197 | 3,227 | (12 | ) | (50 | ) | |||||||||||||||||||
Treasury & Securities Services |
3 | 3 | 11 | 12 | 14 | | (79 | ) | ||||||||||||||||||||
Asset Management |
322 | 264 | 263 | 382 | 299 | 22 | 8 | |||||||||||||||||||||
Corporate/Private Equity (d) |
74 | 88 | 80 | 73 | 70 | (16 | ) | 6 | ||||||||||||||||||||
TOTAL |
$ | 12,194 | $ | 13,240 | $ | 14,986 | $ | 16,557 | $ | 17,656 | (8 | ) | (31 | ) | ||||||||||||||
(a) | At September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, nonperforming assets excluded: (1) mortgage loans insured by U.S. government agencies of $9.5 billion, $9.1 billion, $8.8 billion, $9.4 billion and $9.2 billion, respectively, that are 90 or more days past due; (2) real estate owned insured by U.S. government agencies of $2.4 billion, $2.4 billion, $2.3 billion, $1.9 billion and $1.7 billion, respectively; and (3) student loans insured by U.S. government agencies under the FFELP of $567 million, $558 million, $615 million, $625 million and $572 million, respectively, that are 90 or more days past due. These amounts are excluded as reimbursement of insured amounts is proceeding normally. In addition, the Firms policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance issued by the Federal Financial Institutions Examination Council (FFIEC). Credit card loans are charged off by the end of the month in which the account becomes 180 days past due or within 60 days from receiving notification about a specified event (e.g., bankruptcy of the borrower), whichever is earlier. | |
(b) | Excludes PCI loans acquired as part of the Washington Mutual transaction, which are accounted for on a pool basis. Since each pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, the past-due status of the pools, or that of the individual loans within the pools, is not meaningful. Because the Firm is recognizing interest income on each pool of loans, they are all considered to be performing. Also excludes loans held-for-sale and loans at fair value. | |
(c) | The amounts in nonperforming represent unfunded commitments that are risk rated as nonaccrual. | |
(d) | Predominantly relates to retained prime mortgage loans. |
Page 35
JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions, except ratio data) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
GROSS CHARGE-OFFS |
||||||||||||||||||||||||||||||||||||||||
Wholesale loans |
$ | 98 | $ | 134 | $ | 253 | $ | 414 | $ | 297 | (27) | % | (67) | % | $ | 485 | $ | 1,575 | (69 | )% | ||||||||||||||||||||
Consumer loans, excluding credit card |
1,292 | 1,357 | 1,460 | 2,277 | 1,677 | (5 | ) | (23 | ) | 4,109 | 6,106 | (33 | ) | |||||||||||||||||||||||||||
Credit card loans |
1,765 | 2,131 | 2,631 | 2,980 | 3,485 | (17 | ) | (49 | ) | 6,527 | 12,430 | (47 | ) | |||||||||||||||||||||||||||
Total loans |
$ | 3,155 | $ | 3,622 | $ | 4,344 | $ | 5,671 | $ | 5,459 | (13 | ) | (42 | ) | $ | 11,121 | $ | 20,111 | (45 | ) | ||||||||||||||||||||
GROSS RECOVERIES |
||||||||||||||||||||||||||||||||||||||||
Wholesale loans |
$ | 249 | $ | 54 | $ | 88 | $ | 143 | $ | 31 | 361 | NM | $ | 391 | $ | 119 | 229 | |||||||||||||||||||||||
Consumer loans, excluding credit card |
133 | 144 | 131 | 115 | 131 | (8 | ) | 2 | 408 | 359 | 14 | |||||||||||||||||||||||||||||
Credit card loans |
266 | 321 | 405 | 309 | 352 | (17 | ) | (24 | ) | 992 | 1,064 | (7 | ) | |||||||||||||||||||||||||||
Total loans |
$ | 648 | $ | 519 | $ | 624 | $ | 567 | $ | 514 | 25 | 26 | $ | 1,791 | $ | 1,542 | 16 | |||||||||||||||||||||||
NET CHARGE-OFFS/(RECOVERIES) |
||||||||||||||||||||||||||||||||||||||||
Wholesale loans |
$ | (151 | ) | $ | 80 | $ | 165 | $ | 271 | $ | 266 | NM | NM | $ | 94 | $ | 1,456 | (94 | ) | |||||||||||||||||||||
Consumer loans, excluding credit card |
1,159 | 1,213 | 1,329 | 2,162 | (b) | 1,546 | (4 | ) | (25 | ) | 3,701 | 5,747 | (36 | ) | ||||||||||||||||||||||||||
Credit card loans |
1,499 | 1,810 | 2,226 | 2,671 | 3,133 | (17 | ) | (52 | ) | 5,535 | 11,366 | (51 | ) | |||||||||||||||||||||||||||
Total loans |
$ | 2,507 | $ | 3,103 | $ | 3,720 | $ | 5,104 | (b) | $ | 4,945 | (19 | ) | (49 | ) | $ | 9,330 | $ | 18,569 | (50 | ) | |||||||||||||||||||
NET CHARGE-OFF RATES |
||||||||||||||||||||||||||||||||||||||||
Wholesale retained loans |
(0.24) | % | 0.14 | % | 0.30 | % | 0.49 | % | 0.49 | % | 0.05 | % | 0.92 | % | ||||||||||||||||||||||||||
Consumer retained loans, excluding credit card |
1.47 | 1.53 | 1.66 | 2.60 | (b) | 1.83 | 1.56 | 2.24 | ||||||||||||||||||||||||||||||||
Credit card retained loans |
4.70 | 5.82 | 6.97 | 7.85 | 8.87 | 5.83 | 10.31 | |||||||||||||||||||||||||||||||||
Total retained loans |
1.44 | 1.83 | 2.22 | 2.95 | (b) | 2.84 | 1.83 | 3.53 | ||||||||||||||||||||||||||||||||
Consumer retained loans, excluding credit card and |
||||||||||||||||||||||||||||||||||||||||
PCI loans (a) |
1.88 | 1.96 | 2.14 | 3.34 | (b) | 2.36 | 1.99 | 2.89 | ||||||||||||||||||||||||||||||||
Consumer retained loans, excluding PCI loans (a) |
2.84 | 3.25 | 3.77 | 4.89 | 4.64 | 3.29 | 5.54 | |||||||||||||||||||||||||||||||||
Total retained loans, excluding PCI loans (a) |
1.60 | 2.04 | 2.48 | 3.31 | (b) | 3.19 | 2.03 | 3.98 | ||||||||||||||||||||||||||||||||
Memo: Average Retained Loans |
||||||||||||||||||||||||||||||||||||||||
Wholesale loans |
$ | 250,145 | $ | 237,511 | $ | 226,544 | $ | 219,750 | $ | 213,979 | 5 | 17 | $ | 238,153 | $ | 211,540 | 13 | |||||||||||||||||||||||
Consumer retained loans, excluding credit card |
312,341 | 317,862 | 323,961 | 330,524 | 336,078 | (2 | ) | (7 | ) | 318,012 | 343,639 | (7 | ) | |||||||||||||||||||||||||||
Credit card retained loans |
126,535 | 124,762 | 129,535 | 134,999 | 140,059 | 1 | (10 | ) | 126,933 | 147,326 | (14 | ) | ||||||||||||||||||||||||||||
Total average retained loans |
$ | 689,021 | $ | 680,135 | $ | 680,040 | $ | 685,273 | $ | 690,116 | 1 | | $ | 683,098 | $ | 702,505 | (3 | ) | ||||||||||||||||||||||
Consumer retained loans, excluding credit card and
PCI loans (a) |
$ | 244,337 | $ | 248,028 | $ | 252,403 | $ | 256,884 | $ | 260,394 | (1 | ) | (6 | ) | $ | 248,226 | $ | 265,678 | (7 | ) | ||||||||||||||||||||
Consumer retained loans, excluding PCI loans (a) |
370,872 | 372,790 | 381,938 | 391,883 | 400,453 | (1 | ) | (7 | ) | 375,159 | 413,004 | (9 | ) | |||||||||||||||||||||||||||
Total retained loans, excluding PCI loans (a) |
620,974 | 610,246 | 608,432 | 611,572 | 614,346 | 2 | 1 | 613,263 | 624,442 | (2 | ) |
(a) | Charge-offs are not recorded on PCI loans until actual losses exceed estimated losses that were recorded as purchase accounting adjustments at the time of acquisition. To date, no charge-offs have been recorded for these loans. | |
(b) | Net charge-offs and net charge-off rates for the fourth quarter of 2010 include the effect of $632 million of charge-offs related to an adjustment of the estimated net realizable value of the collateral underlying delinquent residential home loans. Excluding this adjustment, net charge-offs for the fourth quarter of 2010 were $1.5 billion for total consumer, excluding credit card loans, and $4.5 billion for total loans. Net charge-off rates excluding this adjustment were 1.84% for total consumer, excluding credit card, 2.59% for total retained loans, 2.36% for total consumer, excluding credit card and PCI loans, and 2.90% for total retained loans, excluding PCI loans. |
Page 36
JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
SUMMARY OF CHANGES IN THE ALLOWANCES
|
||||||||||||||||||||||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES |
||||||||||||||||||||||||||||||||||||||||
Beginning balance |
$ | 28,520 | $ | 29,750 | $ | 32,266 | $ | 34,161 | $ | 35,836 | (4) | % | (20) | % | $ | 32,266 | $ | 31,602 | 2 | % | ||||||||||||||||||||
Cumulative effect of change in accounting principles (a) |
| | | | | | | | 7,494 | NM | ||||||||||||||||||||||||||||||
Net charge-offs |
2,507 | 3,103 | 3,720 | 5,104 | 4,945 | (19 | ) | (49 | ) | 9,330 | 18,569 | (50 | ) | |||||||||||||||||||||||||||
Provision for loan losses |
2,351 | 1,872 | 1,196 | 3,207 | 3,244 | 26 | (28 | ) | 5,419 | 13,615 | (60 | ) | ||||||||||||||||||||||||||||
Other |
(14 | ) | 1 | 8 | 2 | 26 | NM | NM | (5 | ) | 19 | NM | ||||||||||||||||||||||||||||
Ending balance |
$ | 28,350 | $ | 28,520 | $ | 29,750 | $ | 32,266 | $ | 34,161 | (1 | ) | (17 | ) | $ | 28,350 | $ | 34,161 | (17 | ) | ||||||||||||||||||||
ALLOWANCE FOR LENDING-RELATED COMMITMENTS |
||||||||||||||||||||||||||||||||||||||||
Beginning balance |
$ | 626 | $ | 688 | $ | 717 | $ | 873 | $ | 912 | (9 | ) | (31 | ) | $ | 717 | $ | 939 | (24 | ) | ||||||||||||||||||||
Cumulative effect of change in accounting principles (a) |
| | | | | | | | (18 | ) | NM | |||||||||||||||||||||||||||||
Provision for lending-related commitments |
60 | (62 | ) | (27 | ) | (164 | ) | (21 | ) | NM | NM | (29 | ) | (19 | ) | (53 | ) | |||||||||||||||||||||||
Other |
| | (2 | ) | 8 | (18 | ) | | NM | (2 | ) | (29 | ) | 93 | ||||||||||||||||||||||||||
Ending balance |
$ | 686 | $ | 626 | $ | 688 | $ | 717 | $ | 873 | 10 | (21 | ) | $ | 686 | $ | 873 | (21 | ) | |||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES BY LOB |
||||||||||||||||||||||||||||||||||||||||
Investment Bank (a) |
$ | 1,337 | $ | 1,178 | $ | 1,330 | $ | 1,863 | $ | 1,976 | 13 | (32 | ) | |||||||||||||||||||||||||||
Retail Financial Services (a) |
15,479 | 15,479 | 15,554 | 15,554 | 15,106 | | 2 | |||||||||||||||||||||||||||||||||
Card Services & Auto (a) |
8,537 | 8,921 | 9,940 | 11,933 | 14,077 | (4 | ) | (39 | ) | |||||||||||||||||||||||||||||||
Commercial Banking |
2,671 | 2,614 | 2,577 | 2,552 | 2,661 | 2 | | |||||||||||||||||||||||||||||||||
Treasury & Securities Services |
49 | 74 | 69 | 65 | 54 | (34 | ) | (9 | ) | |||||||||||||||||||||||||||||||
Asset Management |
240 | 222 | 257 | 267 | 257 | 8 | (7 | ) | ||||||||||||||||||||||||||||||||
Corporate/Private Equity |
37 | 32 | 23 | 32 | 30 | 16 | 23 | |||||||||||||||||||||||||||||||||
Total |
$ | 28,350 | $ | 28,520 | $ | 29,750 | $ | 32,266 | $ | 34,161 | (1 | ) | (17 | ) | ||||||||||||||||||||||||||
(a) | Effective January 1, 2010, the Firm adopted accounting guidance related to VIEs. Upon the adoption of the guidance, the Firm consolidated its Firm-sponsored credit card securitization trusts, its Firm-administered multi-seller conduits and certain other consumer loan securitization entities, primarily mortgage-related. As a result of the consolidation, $7.5 billion of allowance for loan losses were recorded on balance sheet with the consolidation of these entities. |
Page 37
JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions, except ratio data) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
3Q11 Change | ||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | ||||||||||||||||||||||
ALLOWANCE COMPONENTS AND RATIOS
|
||||||||||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES
|
||||||||||||||||||||||||||||
Wholesale |
||||||||||||||||||||||||||||
Asset-specific |
$ | 670 | $ | 749 | $ | 1,030 | $ | 1,574 | $ | 1,246 | (11) | % | (46) | % | ||||||||||||||
Formula-based |
3,632 | 3,342 | 3,204 | 3,187 | 3,717 | 9 | (2 | ) | ||||||||||||||||||||
Total wholesale |
4,302 | 4,091 | 4,234 | 4,761 | 4,963 | 5 | (13 | ) | ||||||||||||||||||||
Consumer, excluding credit card |
||||||||||||||||||||||||||||
Asset-specific (a) |
1,016 | 1,049 | 1,067 | 1,075 | 1,088 | (3 | ) | (7 | ) | |||||||||||||||||||
Formula-based |
10,563 | 10,397 | 10,467 | 10,455 | 12,270 | 2 | (14 | ) | ||||||||||||||||||||
PCI |
4,941 | 4,941 | 4,941 | 4,941 | 2,811 | | 76 | |||||||||||||||||||||
Total consumer, excluding credit card |
16,520 | 16,387 | 16,475 | 16,471 | 16,169 | 1 | 2 | |||||||||||||||||||||
Credit card |
||||||||||||||||||||||||||||
Asset-specific (b) |
3,052 | 3,451 | 3,819 | 4,069 | 4,573 | (12 | ) | (33 | ) | |||||||||||||||||||
Formula-based (b) |
4,476 | 4,591 | 5,222 | 6,965 | 8,456 | (3 | ) | (47 | ) | |||||||||||||||||||
Total credit card |
7,528 | 8,042 | 9,041 | 11,034 | 13,029 | (6 | ) | (42 | ) | |||||||||||||||||||
Total consumer |
24,048 | 24,429 | 25,516 | 27,505 | 29,198 | (2 | ) | (18 | ) | |||||||||||||||||||
Total allowance for loan losses |
28,350 | 28,520 | 29,750 | 32,266 | 34,161 | (1 | ) | (17 | ) | |||||||||||||||||||
Allowance for lending-related commitments |
686 | 626 | 688 | 717 | 873 | 10 | (21 | ) | ||||||||||||||||||||
Total allowance for credit losses |
$ | 29,036 | $ | 29,146 | $ | 30,438 | $ | 32,983 | $ | 35,034 | | (17 | ) | |||||||||||||||
CREDIT RATIOS |
||||||||||||||||||||||||||||
Wholesale allowance to total wholesale retained loans |
1.68 | % | 1.68 | % | 1.84 | % | 2.14 | % | 2.28 | % | ||||||||||||||||||
Consumer, excluding credit card allowance, to total
consumer, excluding credit card retained loans |
5.33 | 5.20 | 5.13 | 5.03 | 4.86 | |||||||||||||||||||||||
Credit card allowance to total credit card retained loans |
5.93 | 6.41 | 7.24 | 8.14 | 9.55 | |||||||||||||||||||||||
Allowance to total retained loans |
4.09 | 4.16 | 4.40 | 4.71 | 4.97 | |||||||||||||||||||||||
Consumer, excluding credit card allowance, to consumer,
excluding credit card retained nonaccrual loans (c) |
211 | 196 | 192 | 186 | 164 | |||||||||||||||||||||||
Allowance, excluding credit card allowance, to retained non-
accrual loans, excluding credit card nonaccrual loans (c) |
192 | 175 | 157 | 148 | 140 | |||||||||||||||||||||||
Allowance to total retained nonaccrual loans |
262 | 243 | 226 | 225 | 226 | |||||||||||||||||||||||
CREDIT RATIOS, excluding PCI loans (d) |
||||||||||||||||||||||||||||
Consumer, excluding credit card allowance, to total
consumer, excluding credit card retained loans |
4.77 | 4.65 | 4.61 | 4.53 | 5.17 | |||||||||||||||||||||||
Allowance to total retained loans |
3.74 | 3.83 | 4.10 | 4.46 | 5.12 | |||||||||||||||||||||||
Consumer, excluding credit card allowance, to consumer,
excluding credit card retained nonaccrual loans (c) |
148 | 137 | 135 | 131 | 135 | |||||||||||||||||||||||
Allowance, excluding credit card allowance, to retained non-
accrual loans, excluding credit card nonaccrual loans (c) |
147 | 133 | 120 | 114 | 121 | |||||||||||||||||||||||
Allowance to total retained nonaccrual loans |
216 | 201 | 189 | 190 | 208 |
(a) | The asset-specific consumer, excluding credit card allowance for loan losses, includes troubled debt restructuring reserves of $930 million, $962 million, $970 million, $985 million and $980 million at September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively. | |
(b) | At December 31, 2010, the Firms allowance for loan losses on all impaired credit card loans was reclassified to the asset-specific allowance. This reclassification had no incremental impact on the Firms allowance for loan losses. Prior periods have been revised to reflect the current presentation. | |
(c) | The Firms policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance. Under guidance issued by the FFIEC, credit card loans are charged off by the end of the month in which the account becomes 180 days past due or within 60 days from receiving notification about a specified event (e.g., bankruptcy of the borrower), whichever is earlier. | |
(d) | Excludes the impact of PCI loans that were acquired as part of the Washington Mutual transaction. |
Page 38
JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED PROVISION FOR CREDIT LOSSES |
||
(in millions) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
BY LINE OF BUSINESS
|
||||||||||||||||||||||||||||||||||||||||
Provision for loan losses |
||||||||||||||||||||||||||||||||||||||||
Investment Bank |
$ | (7 | ) | $ | (142 | ) | $ | (409 | ) | $ | (140 | ) | $ | (158 | ) | 95 | % | 96 | % | $ | (558 | ) | $ | (1,053 | ) | 47 | % | |||||||||||||
Retail Financial Services |
1,027 | 994 | 1,199 | 2,418 | 1,397 | 3 | (26 | ) | 3,220 | 6,501 | (50 | ) | ||||||||||||||||||||||||||||
Card Services & Auto |
1,264 | 944 | 353 | 710 | 1,787 | 34 | (29 | ) | 2,561 | 7,866 | (67 | ) | ||||||||||||||||||||||||||||
Commercial Banking |
73 | 73 | 51 | 184 | 192 | | (62 | ) | 197 | 253 | (22 | ) | ||||||||||||||||||||||||||||
Treasury & Securities Services |
(25 | ) | 5 | 7 | 11 | 6 | NM | NM | (13 | ) | (33 | ) | 61 | |||||||||||||||||||||||||||
Asset Management |
26 | 7 | 5 | 22 | 23 | 271 | 13 | 38 | 69 | (45 | ) | |||||||||||||||||||||||||||||
Corporate/Private Equity |
(7 | ) | (9 | ) | (10 | ) | 2 | (3 | ) | 22 | (133 | ) | (26 | ) | 12 | NM | ||||||||||||||||||||||||
Total provision for loan losses |
$ | 2,351 | $ | 1,872 | $ | 1,196 | $ | 3,207 | $ | 3,244 | 26 | (28 | ) | $ | 5,419 | $ | 13,615 | (60 | ) | |||||||||||||||||||||
Provision for lending-related commitments |
||||||||||||||||||||||||||||||||||||||||
Investment Bank |
$ | 61 | $ | (41 | ) | $ | (20 | ) | $ | (131 | ) | $ | 16 | NM | 281 | $ | | $ | 124 | NM | ||||||||||||||||||||
Retail Financial Services |
| | | | | | | | | | ||||||||||||||||||||||||||||||
Card Services & Auto |
| | | (1 | ) | (3 | ) | | NM | | (5 | ) | NM | |||||||||||||||||||||||||||
Commercial Banking |
(6 | ) | (19 | ) | (4 | ) | (32 | ) | (26 | ) | 68 | 77 | (29 | ) | (108 | ) | 73 | |||||||||||||||||||||||
Treasury & Securities Services |
5 | (7 | ) | (3 | ) | (1 | ) | (8 | ) | NM | NM | (5 | ) | (24 | ) | 79 | ||||||||||||||||||||||||
Asset Management |
| 5 | | 1 | | NM | | 5 | (6 | ) | NM | |||||||||||||||||||||||||||||
Corporate/Private Equity |
| | | | | | | | | | ||||||||||||||||||||||||||||||
Total provision for lending-related commitments |
$ | 60 | $ | (62 | ) | $ | (27 | ) | $ | (164 | ) | $ | (21 | ) | NM | NM | $ | (29 | ) | $ | (19 | ) | (53 | ) | ||||||||||||||||
Provision for credit losses |
||||||||||||||||||||||||||||||||||||||||
Investment Bank |
$ | 54 | $ | (183 | ) | $ | (429 | ) | $ | (271 | ) | $ | (142 | ) | NM | NM | $ | (558 | ) | $ | (929 | ) | 40 | |||||||||||||||||
Retail Financial Services |
1,027 | 994 | 1,199 | 2,418 | 1,397 | 3 | (26 | ) | 3,220 | 6,501 | (50 | ) | ||||||||||||||||||||||||||||
Card Services & Auto |
1,264 | 944 | 353 | 709 | 1,784 | 34 | (29 | ) | 2,561 | 7,861 | (67 | ) | ||||||||||||||||||||||||||||
Commercial Banking |
67 | 54 | 47 | 152 | 166 | 24 | (60 | ) | 168 | 145 | 16 | |||||||||||||||||||||||||||||
Treasury & Securities Services |
(20 | ) | (2 | ) | 4 | 10 | (2 | ) | NM | NM | (18 | ) | (57 | ) | 68 | |||||||||||||||||||||||||
Asset Management |
26 | 12 | 5 | 23 | 23 | 117 | 13 | 43 | 63 | (32 | ) | |||||||||||||||||||||||||||||
Corporate/Private Equity |
(7 | ) | (9 | ) | (10 | ) | 2 | (3 | ) | 22 | (133 | ) | (26 | ) | 12 | NM | ||||||||||||||||||||||||
Total provision for credit losses |
$ | 2,411 | $ | 1,810 | $ | 1,169 | $ | 3,043 | $ | 3,223 | 33 | (25 | ) | $ | 5,390 | $ | 13,596 | (60 | ) | |||||||||||||||||||||
BY PORTFOLIO SEGMENT |
||||||||||||||||||||||||||||||||||||||||
Provision for loan losses |
||||||||||||||||||||||||||||||||||||||||
Wholesale |
$ | 67 | $ | (55 | ) | $ | (359 | ) | $ | 77 | $ | 62 | NM | 8 | $ | (347 | ) | $ | (750 | ) | 54 | |||||||||||||||||||
Consumer, excluding credit card |
1,285 | 1,117 | 1,329 | 2,459 | 1,549 | 15 | (17 | ) | 3,731 | 6,999 | (47 | ) | ||||||||||||||||||||||||||||
Credit card |
999 | 810 | 226 | 671 | 1,633 | 23 | (39 | ) | 2,035 | 7,366 | (72 | ) | ||||||||||||||||||||||||||||
Total provision for loan losses |
$ | 2,351 | $ | 1,872 | $ | 1,196 | $ | 3,207 | $ | 3,244 | 26 | (28 | ) | $ | 5,419 | $ | 13,615 | (60 | ) | |||||||||||||||||||||
Provision for lending-related commitments |
||||||||||||||||||||||||||||||||||||||||
Wholesale |
$ | 60 | $ | (62 | ) | $ | (27 | ) | $ | (163 | ) | $ | (18 | ) | NM | NM | $ | (29 | ) | $ | (14 | ) | (107 | ) | ||||||||||||||||
Consumer, excluding credit card |
| | | (1 | ) | (3 | ) | | NM | | (5 | ) | NM | |||||||||||||||||||||||||||
Credit card |
| | | | | | | | | | ||||||||||||||||||||||||||||||
Total provision for lending-related commitments |
$ | 60 | $ | (62 | ) | $ | (27 | ) | $ | (164 | ) | $ | (21 | ) | NM | NM | $ | (29 | ) | $ | (19 | ) | (53 | ) | ||||||||||||||||
Provision for credit losses |
||||||||||||||||||||||||||||||||||||||||
Wholesale |
$ | 127 | $ | (117 | ) | $ | (386 | ) | $ | (86 | ) | $ | 44 | NM | 189 | $ | (376 | ) | $ | (764 | ) | 51 | ||||||||||||||||||
Consumer, excluding credit card |
1,285 | 1,117 | 1,329 | 2,458 | 1,546 | 15 | (17 | ) | 3,731 | 6,994 | (47 | ) | ||||||||||||||||||||||||||||
Credit card |
999 | 810 | 226 | 671 | 1,633 | 23 | (39 | ) | 2,035 | 7,366 | (72 | ) | ||||||||||||||||||||||||||||
Total provision for credit losses |
$ | 2,411 | $ | 1,810 | $ | 1,169 | $ | 3,043 | $ | 3,223 | 33 | (25 | ) | $ | 5,390 | $ | 13,596 | (60 | ) | |||||||||||||||||||||
Page 39
JPMORGAN CHASE & CO. MARKET RISK-RELATED INFORMATION (in millions) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
95% CONFIDENCE LEVEL- AVERAGE IB TRADING VAR,
CREDIT PORTFOLIO VAR AND OTHER VAR |
||||||||||||||||||||||||||||||||||||||||
IB VaR by risk type: |
||||||||||||||||||||||||||||||||||||||||
Fixed income |
$ | 48 | $ | 45 | $ | 49 | $ | 53 | $ | 72 | 7 | % | (33) | % | $ | 47 | $ | 68 | (31) | % | ||||||||||||||||||||
Foreign exchange |
10 | 9 | 11 | 10 | 9 | 11 | 11 | 10 | 11 | (9 | ) | |||||||||||||||||||||||||||||
Equities |
19 | 25 | 29 | 23 | 21 | (24 | ) | (10 | ) | 24 | 22 | 9 | ||||||||||||||||||||||||||||
Commodities and other |
15 | 16 | 13 | 14 | 13 | (6 | ) | 15 | 15 | 16 | (6 | ) | ||||||||||||||||||||||||||||
Diversification benefit to IB trading VaR (a) |
(39 | ) | (37 | ) | (38 | ) | (38 | ) | (38 | ) | (5 | ) | (3 | ) | (38 | ) | (43 | ) | 12 | |||||||||||||||||||||
IB trading VaR (b) |
53 | 58 | 64 | 62 | 77 | (9 | ) | (31 | ) | 58 | 74 | (22 | ) | |||||||||||||||||||||||||||
Credit portfolio VaR (c) |
38 | 27 | 26 | 26 | 30 | 41 | 27 | 30 | 25 | 20 | ||||||||||||||||||||||||||||||
Diversification benefit to IB trading and credit portfolio VaR (a) |
(21 | ) | (8 | ) | (7 | ) | (10 | ) | (8 | ) | (163 | ) | (163 | ) | (11 | ) | (9 | ) | (22 | ) | ||||||||||||||||||||
Total IB trading and credit portfolio VaR |
70 | 77 | 83 | 78 | 99 | (9 | ) | (29 | ) | 77 | 90 | (14 | ) | |||||||||||||||||||||||||||
Mortgage Production and Servicing VaR (d) |
40 | 20 | 16 | 17 | 24 | 100 | 67 | 25 | 24 | 4 | ||||||||||||||||||||||||||||||
Chief Investment Office VaR (e) |
48 | 51 | 60 | 49 | 53 | (6 | ) | (9 | ) | 53 | 65 | (18 | ) | |||||||||||||||||||||||||||
Diversification benefit to total other VaR (a) |
(15 | ) | (10 | ) | (14 | ) | (10 | ) | (15 | ) | (50 | ) | | (13 | ) | (14 | ) | 7 | ||||||||||||||||||||||
Total other VaR |
73 | 61 | 62 | 56 | 62 | 20 | 18 | 65 | 75 | (13 | ) | |||||||||||||||||||||||||||||
Diversification benefit to total IB and other VaR (a) |
(35 | ) | (44 | ) | (57 | ) | (39 | ) | (52 | ) | 20 | 33 | (45 | ) | (66 | ) | 32 | |||||||||||||||||||||||
Total IB and other VaR (f) |
$ | 108 | $ | 94 | $ | 88 | $ | 95 | $ | 109 | 15 | (1 | ) | $ | 97 | $ | 99 | (2 | ) | |||||||||||||||||||||
(a) | Average VaR was less than the sum of the VaR of the components described above, which is due to portfolio diversification. The diversification effect reflects the fact that the risks were not perfectly correlated. The risk of a portfolio of positions is therefore usually less than the sum of the risks of the positions themselves. | |
(b) | IB trading VaR includes substantially all trading activities in IB, including the credit spread sensitivity of certain mortgage products and syndicated lending facilities that the Firm intends to distribute; however, particular risk parameters of certain products are not fully captured, for example, correlation risk. IB trading VaR does not include the DVA taken on derivative and structured liabilities to reflect the credit quality of the Firm. | |
(c) | Credit portfolio VaR includes the derivative CVA, hedges of the CVA and MTM hedges of the retained loan portfolio, which are all reported in principal transactions revenue. This VaR does not include the retained loan portfolio, which is not MTM. | |
(d) | Mortgage Production and Servicing VaR includes the Firms mortgage pipeline and warehouse, MSR and all related hedges. | |
(e) | CIO VaR includes positions, primarily in debt securities and credit products, used to manage structural risk and other risks, including interest rate, credit and mortgage risks arising from the Firms ongoing business activities. | |
(f) | Total IB and other VaR excludes the retained credit portfolio, which is not marked to market (but it does include hedges of those positions), and certain nontrading activity, such as principal investing (e.g., mezzanine financing, tax-oriented investments, etc.), and certain securities and investments held by Corporate/Private Equity, including private equity investments, capital management positions and longer-term corporate investments managed by the CIO. |
Page 40
JPMORGAN CHASE & CO. CAPITAL AND OTHER SELECTED BALANCE SHEET ITEMS (in millions, except ratio data) |
September 30, 2011 | |||||||||||||||||||||||||||||||||||||||||
Change | NINE MONTHS ENDED SEPTEMBER 30, | ||||||||||||||||||||||||||||||||||||||||
Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Sep 30 | 2011 Change | ||||||||||||||||||||||||||||||||||
2011 | 2011 | 2011 | 2010 | 2010 | 2011 | 2010 | 2011 | 2010 | 2010 | ||||||||||||||||||||||||||||||||
CAPITAL |
|||||||||||||||||||||||||||||||||||||||||
Tier 1 capital |
$ | 147,823 | (e) | $ | 148,880 | $ | 147,234 | $ | 142,450 | $ | 139,381 | (1 | )% | 6 | % | ||||||||||||||||||||||||||
Total capital |
186,547 | (e) | 187,899 | 186,417 | 182,216 | 180,740 | (1 | ) | 3 | ||||||||||||||||||||||||||||||||
Tier 1 common capital (a) |
120,234 | (e) | 121,209 | 119,598 | 114,763 | 110,842 | (1 | ) | 8 | ||||||||||||||||||||||||||||||||
Risk-weighted assets |
1,220,554 | (e) | 1,198,711 | 1,192,536 | 1,174,978 | 1,170,158 | 2 | 4 | |||||||||||||||||||||||||||||||||
Adjusted average assets (b) |
2,168,678 | (e) | 2,129,510 | 2,041,153 | 2,024,515 | 1,975,479 | 2 | 10 | |||||||||||||||||||||||||||||||||
Tier 1 capital ratio |
12.1 | (e)% | 12.4 | % | 12.3 | % | 12.1 | % | 11.9 | % | |||||||||||||||||||||||||||||||
Total capital ratio |
15.3 | (e) | 15.7 | 15.6 | 15.5 | 15.4 | |||||||||||||||||||||||||||||||||||
Tier 1 common capital ratio (a) |
9.9 | (e) | 10.1 | 10.0 | 9.8 | 9.5 | |||||||||||||||||||||||||||||||||||
Tier 1 leverage ratio |
6.8 | (e) | 7.0 | 7.2 | 7.0 | 7.1 | |||||||||||||||||||||||||||||||||||
TANGIBLE COMMON EQUITY (period-end) (c) |
|||||||||||||||||||||||||||||||||||||||||
Common stockholders equity |
$ | 174,487 | $ | 175,079 | $ | 172,798 | $ | 168,306 | $ | 166,030 | | 5 | |||||||||||||||||||||||||||||
Less: Goodwill |
48,180 | 48,882 | 48,856 | 48,854 | 48,736 | (1 | ) | (1 | ) | ||||||||||||||||||||||||||||||||
Less: Other intangible assets |
3,396 | 3,679 | 3,857 | 4,039 | 3,982 | (8 | ) | (15 | ) | ||||||||||||||||||||||||||||||||
Add: Deferred tax liabilities (d) |
2,645 | 2,632 | 2,603 | 2,586 | 2,656 | | | ||||||||||||||||||||||||||||||||||
Total tangible common equity |
$ | 125,556 | $ | 125,150 | $ | 122,688 | $ | 117,999 | $ | 115,968 | | 8 | |||||||||||||||||||||||||||||
TANGIBLE COMMON EQUITY (average) (c) |
|||||||||||||||||||||||||||||||||||||||||
Common stockholders equity |
$ | 174,454 | $ | 174,077 | $ | 169,415 | $ | 166,812 | $ | 163,962 | | 6 | $ | 172,667 | $ | 159,737 | 8 | % | |||||||||||||||||||||||
Less: Goodwill |
48,631 | 48,834 | 48,846 | 48,831 | 48,745 | | | 48,770 | 48,546 | | |||||||||||||||||||||||||||||||
Less: Other intangible assets |
3,545 | 3,738 | 3,928 | 4,054 | 4,094 | (5 | ) | (13 | ) | 3,736 | 4,221 | (11 | ) | ||||||||||||||||||||||||||||
Add: Deferred tax liabilities (d) |
2,639 | 2,618 | 2,595 | 2,621 | 2,620 | 1 | 1 | 2,617 | 2,575 | 2 | |||||||||||||||||||||||||||||||
Total tangible common equity |
$ | 124,917 | $ | 124,123 | $ | 119,236 | $ | 116,548 | $ | 113,743 | 1 | 10 | $ | 122,778 | $ | 109,545 | 12 | ||||||||||||||||||||||||
INTANGIBLE ASSETS (period-end) |
|||||||||||||||||||||||||||||||||||||||||
Goodwill |
$ | 48,180 | $ | 48,882 | $ | 48,856 | $ | 48,854 | $ | 48,736 | (1 | ) | (1 | ) | |||||||||||||||||||||||||||
Mortgage servicing rights |
7,833 | 12,243 | 13,093 | 13,649 | 10,305 | (36 | ) | (24 | ) | ||||||||||||||||||||||||||||||||
Purchased credit card relationships |
668 | 744 | 820 | 897 | 974 | (10 | ) | (31 | ) | ||||||||||||||||||||||||||||||||
All other intangibles |
2,728 | 2,935 | 3,037 | 3,142 | 3,008 | (7 | ) | (9 | ) | ||||||||||||||||||||||||||||||||
Total intangibles |
$ | 59,409 | $ | 64,804 | $ | 65,806 | $ | 66,542 | $ | 63,023 | (8 | ) | (6 | ) | |||||||||||||||||||||||||||
DEPOSITS (period-end) |
|||||||||||||||||||||||||||||||||||||||||
U.S. offices: |
|||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing |
$ | 323,058 | $ | 287,654 | $ | 244,136 | $ | 228,555 | $ | 219,302 | 12 | 47 | |||||||||||||||||||||||||||||
Interest-bearing |
484,640 | 469,618 | 468,654 | 455,237 | 435,405 | 3 | 11 | ||||||||||||||||||||||||||||||||||
Non-U.S. offices: |
|||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing |
14,724 | 13,422 | 11,644 | 10,917 | 10,646 | 10 | 38 | ||||||||||||||||||||||||||||||||||
Interest-bearing |
270,286 | 277,991 | 271,395 | 235,660 | 237,785 | (3 | ) | 14 | |||||||||||||||||||||||||||||||||
Total deposits |
$ | 1,092,708 | $ | 1,048,685 | $ | 995,829 | $ | 930,369 | $ | 903,138 | 4 | 21 | |||||||||||||||||||||||||||||
(a) | The Firm uses Tier 1 common capital along with the other capital measures to assess and monitor its capital position. The Tier 1 common capital ratio, a non-GAAP financial measure, is Tier 1 common capital divided by risk-weighted assets. For further discussion of Tier 1 common capital ratio, see page 44. | |
(b) | Adjusted average assets, for purposes of calculating the leverage ratio, include total quarterly average assets adjusted for unrealized gains/(losses) on securities, less deductions for disallowed goodwill and other intangible assets, investments in certain subsidiaries, and the total adjusted carrying value of nonfinancial equity investments that are subject to deductions from Tier 1 capital. | |
(c) | ROTCE, a non-GAAP financial ratio, measures the Firms earnings as a percentage of tangible common equity. In managements view, these measures are meaningful to the Firm, as well as analysts and investors in assessing the Firms use of equity and in facilitating comparisons with competitors. For further discussion, see page 44. | |
(d) | Represents deferred tax liabilities related to tax-deductible goodwill and to identifiable intangibles created in non-taxable transactions, which are netted against goodwill and other intangibles when calculating TCE. | |
(e) | Estimated. |
Page 41
JPMORGAN CHASE & CO. MORTGAGE LOAN REPURCHASE LIABILITY (in millions) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
MORTGAGE
LOAN REPURCHASE LIABILITY (a) |
||||||||||||||||||||||||||||||||||||||||
Summary of changes in mortgage repurchase liability: |
||||||||||||||||||||||||||||||||||||||||
Repurchase liability at beginning of period |
$ | 3,631 | $ | 3,474 | $ | 3,285 | $ | 3,307 | $ | 2,332 | 5 | % | 56 | % | $ | 3,285 | $ | 1,705 | 93 | % | ||||||||||||||||||||
Realized losses (b) |
(329 | ) | (241 | ) | (231 | ) | (371 | ) | (489 | ) | (37 | ) | 33 | (801 | ) | (1,052 | ) | 24 | ||||||||||||||||||||||
Provision for repurchase losses |
314 | 398 | 420 | 349 | 1,464 | (21 | ) | (79 | ) | 1,132 | 2,654 | (57 | ) | |||||||||||||||||||||||||||
Repurchase liability at end of period |
$ | 3,616 | $ | 3,631 | $ | 3,474 | $ | 3,285 | $ | 3,307 | | 9 | $ | 3,616 | $ | 3,307 | 9 | |||||||||||||||||||||||
Outstanding repurchase demands and unresolved mortgage
insurance rescission notices by counterparty type: (c)(d) |
||||||||||||||||||||||||||||||||||||||||
GSEs and other |
$ | 2,133 | $ | 1,826 | $ | 1,321 | $ | 1,251 | $ | 1,333 | 17 | 60 | $ | 2,133 | $ | 1,333 | 60 | |||||||||||||||||||||||
Mortgage insurers |
1,112 | 1,093 | 1,240 | 1,121 | 1,007 | 2 | 10 | 1,112 | 1,007 | 10 | ||||||||||||||||||||||||||||||
Overlapping population (e) |
(155 | ) | (145 | ) | (127 | ) | (104 | ) | (109 | ) | (7 | ) | (42 | ) | (155 | ) | (109 | ) | (42 | ) | ||||||||||||||||||||
Total |
$ | 3,090 | $ | 2,774 | $ | 2,434 | $ | 2,268 | $ | 2,231 | 11 | 39 | $ | 3,090 | $ | 2,231 | 39 | |||||||||||||||||||||||
Quarterly mortgage repurchase demands received by loan
origination vintage: (c)(d) |
||||||||||||||||||||||||||||||||||||||||
Pre-2005 |
$ | 34 | $ | 32 | $ | 15 | $ | 39 | $ | 31 | 6 | 10 | $ | 81 | $ | 85 | (5 | ) | ||||||||||||||||||||||
2005 |
200 | 57 | 45 | 73 | 67 | 251 | 199 | 302 | 218 | 39 | ||||||||||||||||||||||||||||||
2006 |
232 | 363 | 158 | 198 | 213 | (36 | ) | 9 | 753 | 752 | | |||||||||||||||||||||||||||||
2007 |
602 | 510 | 381 | 539 | 537 | 18 | 12 | 1,493 | 1,506 | (1 | ) | |||||||||||||||||||||||||||||
2008 |
323 | 301 | 249 | 254 | 191 | 7 | 69 | 873 | 475 | 84 | ||||||||||||||||||||||||||||||
Post-2008 |
153 | 89 | 94 | 65 | 46 | 72 | 233 | 336 | 119 | 182 | ||||||||||||||||||||||||||||||
Total |
$ | 1,544 | $ | 1,352 | $ | 942 | $ | 1,168 | $ | 1,085 | 14 | 42 | $ | 3,838 | $ | 3,155 | 22 | |||||||||||||||||||||||
(a) | For further details regarding the Firms mortgage repurchase liability, see Mortgage repurchase liability on pages 53-56 and Note 21, on pages 167-170, of JPMorgan Chases second quarter Form 10-Q. | |
(b) | Includes principal losses and accrued interest on repurchased loans, make-whole settlements, settlements with claimants, and certain related expense. Make-whole settlements were $162 million, $126 million, $115 million, $152 million and $225 million for the three months ended September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively, and $403 million and $480 million for the nine months ended September 30, 2011 and 2010, respectively. | |
(c) | In the second quarter of 2011, prior periods were revised to include repurchase demands and mortgage insurance rescission notices related to certain loans sold or deposited into private-label securitizations. The Firms outstanding repurchase demands are predominantly from the GSEs. | |
(d) | Excludes amounts related to Washington Mutual. | |
(e) | Because the GSEs may make repurchase demands based on mortgage insurance rescission notices that remain unresolved, certain loans may be subject to both an unresolved mortgage insurance rescission notice and an unresolved repurchase demand. |
Page 42
JPMORGAN CHASE & CO. PER SHARE-RELATED INFORMATION (in millions, except per share and ratio data) |
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||||
3Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q11 | 3Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
EARNINGS PER SHARE DATA |
||||||||||||||||||||||||||||||||||||||||
Basic earnings per share: |
||||||||||||||||||||||||||||||||||||||||
Net income |
$ | 4,262 | $ | 5,431 | $ | 5,555 | $ | 4,831 | $ | 4,418 | (22) | % | (4) | % | $ | 15,248 | $ | 12,539 | 22 | % | ||||||||||||||||||||
Less: Preferred stock dividends |
157 | 158 | 157 | 157 | 160 | (1 | ) | (2 | ) | 472 | 485 | (3 | ) | |||||||||||||||||||||||||||
Net income applicable to common equity |
4,105 | 5,273 | 5,398 | 4,674 | 4,258 | (22 | ) | (4 | ) | 14,776 | 12,054 | 23 | ||||||||||||||||||||||||||||
Less: Dividends and undistributed earnings allocated to
participating securities |
169 | 206 | 262 | 262 | 239 | (18 | ) | (29 | ) | 635 | 701 | (9 | ) | |||||||||||||||||||||||||||
Net income applicable to common stockholders |
$ | 3,936 | $ | 5,067 | $ | 5,136 | $ | 4,412 | $ | 4,019 | (22 | ) | (2 | ) | $ | 14,141 | $ | 11,353 | 25 | |||||||||||||||||||||
Total weighted-average basic shares outstanding |
3,859.6 | 3,958.4 | 3,981.6 | 3,917.0 | 3,954.3 | (2 | ) | (2 | ) | 3,933.2 | 3,969.4 | (1 | ) | |||||||||||||||||||||||||||
Net income per share |
$ | 1.02 | $ | 1.28 | $ | 1.29 | $ | 1.13 | $ | 1.02 | (20 | ) | | $ | 3.60 | $ | 2.86 | 26 | ||||||||||||||||||||||
Diluted earnings per share: |
||||||||||||||||||||||||||||||||||||||||
Net income applicable to common stockholders |
$ | 3,936 | $ | 5,067 | $ | 5,136 | $ | 4,412 | $ | 4,019 | (22 | ) | (2 | ) | $ | 14,141 | $ | 11,353 | 25 | |||||||||||||||||||||
Total weighted-average basic shares outstanding |
3,859.6 | 3,958.4 | 3,981.6 | 3,917.0 | 3,954.3 | (2 | ) | (2 | ) | 3,933.2 | 3,969.4 | (1 | ) | |||||||||||||||||||||||||||
Add: Employee stock options, SARs and warrants (a) |
12.6 | 24.8 | 32.5 | 18.2 | 17.6 | (49 | ) | (28 | ) | 23.3 | 21.3 | 9 | ||||||||||||||||||||||||||||
Total weighted-average diluted shares outstanding (b) |
3,872.2 | 3,983.2 | 4,014.1 | 3,935.2 | 3,971.9 | (3 | ) | (3 | ) | 3,956.5 | 3,990.7 | (1 | ) | |||||||||||||||||||||||||||
Net income per share |
$ | 1.02 | $ | 1.27 | $ | 1.28 | $ | 1.12 | $ | 1.01 | (20 | ) | 1 | $ | 3.57 | $ | 2.84 | 26 | ||||||||||||||||||||||
COMMON SHARES OUTSTANDING |
||||||||||||||||||||||||||||||||||||||||
Common shares at period end |
3,798.9 | 3,910.2 | 3,986.6 | 3,910.3 | 3,925.8 | (3 | ) | (3 | ) | 3,798.9 | 3,925.8 | (3 | ) | |||||||||||||||||||||||||||
Cash dividends declared per share |
$ | 0.25 | $ | 0.25 | $ | 0.25 | (f) | $ | 0.05 | $ | 0.05 | | 400 | $ | 0.75 | $ | 0.15 | 400 | ||||||||||||||||||||||
Book value per share |
45.93 | 44.77 | 43.34 | 43.04 | 42.29 | 3 | 9 | 45.93 | 42.29 | 9 | ||||||||||||||||||||||||||||||
Dividend payout ratio |
24 | % | 19 | % | 20 | % | 4 | % | 5 | % | 21 | % | 5 | % | ||||||||||||||||||||||||||
SHARE PRICE (c) |
||||||||||||||||||||||||||||||||||||||||
High |
$ | 42.55 | $ | 47.80 | $ | 48.36 | $ | 43.12 | $ | 41.70 | (11 | ) | 2 | $ | 48.36 | $ | 48.20 | | ||||||||||||||||||||||
Low |
28.53 | 39.24 | 42.65 | 36.21 | 35.16 | (27 | ) | (19 | ) | 28.53 | 35.16 | (19 | ) | |||||||||||||||||||||||||||
Close |
30.12 | 40.94 | 46.10 | 42.42 | 38.06 | (26 | ) | (21 | ) | 30.12 | 38.06 | (21 | ) | |||||||||||||||||||||||||||
Market capitalization |
114,422 | 160,083 | 183,783 | 165,875 | 149,418 | (29 | ) | (23 | ) | 114,422 | 149,418 | (23 | ) | |||||||||||||||||||||||||||
COMMON EQUITY REPURCHASE PROGRAM (d) |
||||||||||||||||||||||||||||||||||||||||
Aggregate common equity repurchased |
$ | 4,424.9 | (e) | $ | 3,479.8 | $ | 95.0 | $ | 685.2 | $ | 2,178.1 | 27 | 103 | $ | 7,999.7 | (e) | $ | 2,313.4 | 246 | |||||||||||||||||||||
Common equity repurchased |
127.4 | (e) | 80.3 | 2.1 | 17.9 | 56.5 | 59 | 125 | 209.8 | (e) | 60.0 | 250 | ||||||||||||||||||||||||||||
Average purchase price |
$ | 34.72 | (e) | $ | 43.33 | $ | 45.66 | $ | 38.37 | $ | 38.52 | (20 | ) | (10 | ) | $ | 38.12 | (e) | $ | 38.53 | (1 | ) |
(a) | Excluded from the computation of diluted EPS (due to the antidilutive effect) were options issued under employee benefit plans and the warrants originally issued in 2008 under the U.S. Treasurys Capital Purchase Program to purchase shares of the Firms common stock. The aggregate number of shares issuable upon the exercise of such options and warrants was 197 million, 53 million, 85 million, 233 million and 236 million, for the three months ended September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively, and 112 million and 233 million for the nine months ended September 30, 2011 and 2010, respectively. | |
(b) | Participating securities were included in the calculation of diluted EPS using the two-class method, as this computation was more dilutive than the calculation using the treasury stock method. | |
(c) | Share prices shown for JPMorgan Chases common stock are from the New York Stock Exchange. JPMorgan Chases common stock is also listed and traded on the London Stock Exchange and the Tokyo Stock Exchange. | |
(d) | On March 18, 2011, the Board of Directors authorized the repurchase of up to $15.0 billion of the Firms common equity, of which up to $8.0 billion of common equity repurchases is approved for 2011. The authorization commenced on March 22, 2011, and replaced the Firms previous $10.0 billion repurchase program. Management and the Board will continue to assess and make decisions regarding alternatives for deploying capital, as appropriate, over the course of the year. Any planned future dividend increases over the current level, or planned use of the equity repurchase program over the repurchases authorized for 2011, will be reviewed by the Firm with the banking regulators before taking action. | |
(e) | Includes impact of aggregate repurchases of 10.2 million warrants during the three months ended September 30, 2011. | |
(f) | On March 18, 2011, the Board of Directors increased the Firms quarterly common stock dividend from $0.05 to $0.25 per share. |
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JPMORGAN CHASE & CO. NON-GAAP FINANCIAL MEASURES |
(a) | In addition to analyzing the Firms results on a reported basis, management reviews the Firms results and the results of the lines of business on a managed basis, which is a non-GAAP financial measure. The Firms definition of managed basis starts with the reported U.S. GAAP results and includes certain reclassifications to present total net revenue for the Firm (and each of the business segments) on a FTE basis. Accordingly, revenue from tax-exempt securities and investments that receive tax credits is presented in the managed results on a basis comparable to taxable securities and investments. This non-GAAP financial measure allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The corresponding income tax impact related to tax-exempt items is recorded within income tax expense. These adjustments have no impact on net income as reported by the Firm as a whole or by the lines of business. |
(b) | The ratio for the allowance for loan losses to end-of-period loans excludes the following: loans accounted for at fair value and loans held-for-sale; purchased credit-impaired (PCI) loans; and the allowance for loan losses related to PCI loans. Additionally, Real Estate Portfolios net charge-off rates exclude the impact of PCI loans. |
(c) | Tangible common equity (TCE), a non-GAAP financial measure, represents common stockholders equity (i.e., total stockholders equity less preferred stock) less goodwill and identifiable intangible assets (other than MSRs), net of related deferred tax liabilities. ROTCE, a non-GAAP financial ratio, measures the Firms earnings as a percentage of TCE. In managements view, these measures are meaningful to the Firm, as well as analysts and investors in assessing the Firms use of equity, and in facilitating comparisons with competitors. |
(d) | Tier 1 common capital ratio is Tier 1 common capital divided by risk-weighted assets. Tier 1 Common Capital (Tier 1 Common) is defined as Tier 1 capital less elements of capital not in the form of common equity such as perpetual preferred stock, noncontrolling interests in subsidiaries and trust preferred capital debt securities. Tier 1 Common, a non-GAAP financial measure, is used by banking regulators, investors and analysts to assess and compare the quality and composition of the Firms capital with the capital of other financial services companies. The Firm uses Tier 1 Common along with other capital measures to assess and monitor its capital position. |
(e) | TSS Firmwide revenue includes certain TSS product revenue and liability balances reported in other lines of business, mainly CB, RFS and AM, related to customers who are also customers of those lines of business. |
(f) | Retail Financial Services uses the overhead ratio (excluding the amortization of core deposit intangibles (CDI)), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in the overhead ratio calculation would result in a higher overhead ratio in the earlier years and a lower overhead ratio in later years. This method would therefore result in an improving overhead ratio over time, all things remaining equal. The non-GAAP ratio excludes Consumer & Business Bankings CDI amortization expense related to prior business combination transactions. |
(g) | 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 consolidated VIEs; (3) cash and securities segregated and on deposit for regulatory and other purposes; (4) goodwill and intangibles; and (5) securities received as collateral. The amount of adjusted assets is presented to assist the reader in comparing IBs asset and capital levels with those of other investment banks in the securities industry. Asset-to-equity leverage ratios are commonly used as one measure to assess a companys capital adequacy. IB believes an adjusted asset amount that excludes the assets discussed above, which were considered to have a low risk profile, provides a more meaningful measure of balance sheet leverage in the securities industry. |
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JPMORGAN CHASE & CO. GLOSSARY OF TERMS |
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JPMORGAN CHASE & CO. GLOSSARY OF TERMS |
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JPMORGAN CHASE & CO. GLOSSARY OF TERMS |
a) | Operating revenue comprises: |
| All gross income earned from servicing third-party mortgage loans, including stated service fees, excess service fees, late fees and other ancillary fees; and |
| Modeled servicing portfolio runoff (or time decay). |
(see next column for continuation) |
b) | Risk management comprises: |
| Changes in the fair value of the MSR asset due to market-based inputs, such as interest rates and volatility, as well as updates to assumptions used in the MSR valuation model; and |
| Derivative valuation adjustments and other, which represents changes in the fair value of derivative instruments used to offset the impact of changes in the market-based inputs to the MSR valuation model. |
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JPMORGAN CHASE & CO. GLOSSARY OF TERMS |
1. | Middle Market Banking covers corporate, municipal, financial institution and not-for-profit clients, with annual revenue generally ranging between $10 million and $500 million. |
2. | Corporate Client Banking covers clients with annual revenue generally ranging between $500 million and $2 billion and focuses on clients that have broader investment banking needs. |
3. | Commercial Term Lending primarily provides term financing to real estate investors/owners for multi-family properties as well as financing office, retail and industrial properties. |
4. | Real Estate Banking provides full-service banking to investors and developers of institutional-grade real estate properties. |
5. | Other primarily includes lending and investment activity within the Community Development Banking and Chase Capital segments. |
1. | Lending includes a variety of financing alternatives, which are primarily provided on a basis secured by receivables, inventory, equipment, real estate or other assets. Products include term loans, revolving lines of credit, bridge financing, asset-based structures, leases, commercial card products and standby letters of credit. |
2. | Treasury services includes a broad range of products and services enabling clients to transfer, invest and manage the receipt and disbursement of funds, while providing the related information reporting. These products and services include U.S. dollar and multi-currency clearing, ACH, lockbox, disbursement and reconciliation services, check deposits, other check and currency-related services, trade finance and logistics solutions, deposit products, sweeps and money market mutual funds. |
3. | Investment banking products provide clients with sophisticated capital-raising alternatives, as well as balance sheet and risk management tools through loan syndications, investment-grade debt, asset-backed securities, private placements, high-yield bonds, equity underwriting, advisory, interest rate derivatives, foreign exchange hedges and securities sales. |
4. | Other product revenue primarily includes tax-equivalent adjustments generated from Community Development Banking segment activity and certain income derived from principal transactions. |
1. | Liability balances include deposits, as well as deposits that are swept to on-balance sheet liabilities (e.g., commercial paper, federal funds purchased, time deposits and securities loaned or sold under repurchase agreements) as part of customer cash management programs. |
2. | IB revenue, gross represents total revenue related to investment banking products sold to CB clients. |
1. | Liability balances include deposits, as well as deposits that are swept to on-balance sheet liabilities (e.g., commercial paper, federal funds purchased, time deposits and securities loaned or sold under repurchase agreements) as part of customer cash management programs. |
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JPMORGAN CHASE & CO. Revised Financial Disclosure |
| Auto and Student Lending transferred from the current Retail Financial Services reportable/operating segment and is now reported with Card Services & Auto in a single reportable/operating segment. | ||
| Retail Financial Services continues as a reportable/operating segment, organized in two components: Consumer & Business Banking (formerly Retail Banking) and Mortgage Banking (including Mortgage Production and Servicing, and Real Estate Portfolios). |
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