![](https://capedge.com/proxy/8-K/0000019617-14-000025/y91856y9185600a02.gif)
EARNINGS RELEASE FINANCIAL SUPPLEMENT
FOURTH QUARTER 2013
JPMORGAN CHASE & CO. | ![]() | ||||||||||
TABLE OF CONTENTS | |||||||||||
Page(s) | |||||||||||
Consolidated Results | |||||||||||
Consolidated Financial Highlights | 2-3 | ||||||||||
Consolidated Statements of Income | 4 | ||||||||||
Consolidated Balance Sheets | 5 | ||||||||||
Condensed Average Balance Sheets and Annualized Yields | 6 | ||||||||||
Core Net Interest Income | 7 | ||||||||||
Reconciliation from Reported to Managed Summary | 8 | ||||||||||
Business Detail | |||||||||||
Line of Business Financial Highlights - Managed Basis | 9 | ||||||||||
Consumer & Community Banking | 10-11 | ||||||||||
Consumer & Business Banking | 12 | ||||||||||
Mortgage Banking | 13-16 | ||||||||||
Card, Merchant Services & Auto | 17-18 | ||||||||||
Corporate & Investment Bank | 19-22 | ||||||||||
Commercial Banking | 23-24 | ||||||||||
Asset Management | 25-29 | ||||||||||
Corporate/Private Equity | 30-31 | ||||||||||
Credit-Related Information | 32-37 | ||||||||||
Market Risk-Related Information | 38 | ||||||||||
Supplemental Detail | |||||||||||
Capital and Other Selected Balance Sheet Items | 39 | ||||||||||
Mortgage Repurchase Liability | 40 | ||||||||||
Per Share-Related Information | 41 | ||||||||||
Non-GAAP Financial Measures | 42 | ||||||||||
Glossary of Terms | 43-47 | ||||||||||
Page 1
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||||||||||||||||||
(in millions, except per share and ratio data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
SELECTED INCOME STATEMENT DATA | 4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | ||||||||||||||||||||||||||||
Reported Basis | ||||||||||||||||||||||||||||||||||||||
Total net revenue | $ | 23,156 | $ | 23,117 | $ | 25,211 | $ | 25,122 | $ | 23,653 | - | % | (2 | ) | % | $ | 96,606 | $ | 97,031 | - | % | |||||||||||||||||
Total noninterest expense | 15,552 | 23,626 | 15,866 | 15,423 | 16,047 | (34 | ) | (3 | ) | 70,467 | 64,729 | 9 | ||||||||||||||||||||||||||
Pre-provision profit/(loss) | 7,604 | (509 | ) | 9,345 | 9,699 | 7,606 | NM | - | 26,139 | 32,302 | (19 | ) | ||||||||||||||||||||||||||
Provision for credit losses | 104 | (543 | ) | 47 | 617 | 656 | NM | (84 | ) | 225 | 3,385 | (93 | ) | |||||||||||||||||||||||||
NET INCOME/(LOSS) | 5,278 | (380 | ) | 6,496 | 6,529 | 5,692 | NM | (7 | ) | 17,923 | 21,284 | (16 | ) | |||||||||||||||||||||||||
Managed Basis (a) | ||||||||||||||||||||||||||||||||||||||
Total net revenue | 24,112 | 23,880 | 25,958 | 25,848 | 24,378 | 1 | (1 | ) | 99,798 | 99,890 | - | |||||||||||||||||||||||||||
Total noninterest expense | 15,552 | 23,626 | 15,866 | 15,423 | 16,047 | (34 | ) | (3 | ) | 70,467 | 64,729 | 9 | ||||||||||||||||||||||||||
Pre-provision profit | 8,560 | 254 | 10,092 | 10,425 | 8,331 | NM | 3 | 29,331 | 35,161 | (17 | ) | |||||||||||||||||||||||||||
Provision for credit losses | 104 | (543 | ) | 47 | 617 | 656 | NM | (84 | ) | 225 | 3,385 | (93 | ) | |||||||||||||||||||||||||
NET INCOME/(LOSS) | 5,278 | (380 | ) | 6,496 | 6,529 | 5,692 | NM | (7 | ) | 17,923 | 21,284 | (16 | ) | |||||||||||||||||||||||||
PER COMMON SHARE DATA | ||||||||||||||||||||||||||||||||||||||
Net income/(loss): Basic | 1.31 | (0.17 | ) | 1.61 | 1.61 | 1.40 | NM | (6 | ) | 4.39 | 5.22 | (16 | ) | |||||||||||||||||||||||||
Diluted | 1.30 | (0.17 | ) | 1.60 | 1.59 | 1.39 | NM | (6 | ) | 4.35 | 5.20 | (16 | ) | |||||||||||||||||||||||||
Cash dividends declared | 0.38 | 0.38 | 0.38 | (h) | 0.30 | 0.30 | - | 27 | 1.44 | (h) | 1.20 | 20 | ||||||||||||||||||||||||||
Book value | 53.25 | 52.01 | 52.48 | 52.02 | 51.27 | 2 | 4 | 53.25 | 51.27 | 4 | ||||||||||||||||||||||||||||
Tangible book value (b) | 40.81 | 39.51 | 39.97 | 39.54 | 38.75 | 3 | 5 | 40.81 | 38.75 | 5 | ||||||||||||||||||||||||||||
COMMON SHARES OUTSTANDING | ||||||||||||||||||||||||||||||||||||||
Average: Basic | 3,762.1 | 3,767.0 | 3,782.4 | 3,818.2 | 3,806.7 | - | (1 | ) | 3,782.4 | 3,809.4 | (1 | ) | ||||||||||||||||||||||||||
Diluted | 3,797.1 | 3,767.0 | 3,814.3 | 3,847.0 | 3,820.9 | 1 | (1 | ) | 3,814.9 | 3,822.2 | - | |||||||||||||||||||||||||||
Common shares at period-end | 3,756.1 | 3,759.2 | 3,769.0 | 3,789.8 | 3,804.0 | - | (1 | ) | 3,756.1 | 3,804.0 | (1 | ) | ||||||||||||||||||||||||||
Closing share price (c) | $ | 58.48 | $ | 51.69 | $ | 52.79 | $ | 47.46 | $ | 43.97 | 13 | 33 | $ | 58.48 | $ | 43.97 | 33 | |||||||||||||||||||||
Market capitalization | 219,657 | 194,312 | 198,966 | 179,863 | 167,260 | 13 | 31 | 219,657 | 167,260 | 31 | ||||||||||||||||||||||||||||
FINANCIAL RATIOS (d) | ||||||||||||||||||||||||||||||||||||||
Return on common equity ("ROE") | 10 | % | (1 | ) | % | 13 | % | 13 | % | 11 | % | 9 | % | 11 | % | |||||||||||||||||||||||
Return on tangible common equity ("ROTCE") (b) | 14 | (2 | ) | 17 | 17 | 15 | 11 | 15 | ||||||||||||||||||||||||||||||
Return on assets | 0.87 | (0.06 | ) | 1.09 | 1.14 | 0.98 | 0.75 | 0.94 | ||||||||||||||||||||||||||||||
Return on risk-weighted assets (e)(f) | 1.51 | (i) | (0.11 | ) | 1.85 | 1.88 | 1.76 | 1.28 | (i) | 1.65 | ||||||||||||||||||||||||||||
CAPITAL RATIOS (f) | ||||||||||||||||||||||||||||||||||||||
Tier 1 capital ratio | 11.9 | (i) | 11.7 | 11.6 | 11.6 | 12.6 | 11.9 | (i) | 12.6 | |||||||||||||||||||||||||||||
Total capital ratio | 14.3 | (i) | 14.3 | 14.1 | 14.1 | 15.3 | 14.3 | (i) | 15.3 | |||||||||||||||||||||||||||||
Tier 1 common capital ratio (g) | 10.7 | (i) | 10.5 | 10.4 | 10.2 | 11.0 | 10.7 | (i) | 11.0 | |||||||||||||||||||||||||||||
(a) | For a further discussion of managed basis, see Reconciliation from Reported to Managed Summary on page 8. |
(b) | Tangible book value per share and ROTCE are non-GAAP financial measures. Tangible book value per share represents tangible common equity divided by period-end common shares. ROTCE measures the Firm's annualized earnings as a percentage of tangible common equity. For further discussion of these measures, see page 42. |
(c) | Share price shown is from the New York Stock Exchange. The 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) | Return on Basel I risk-weighted assets is annualized earnings divided by average risk-weighted assets. |
(f) | Basel 2.5 rules became effective on January 1, 2013. The implementation of these rules in the first quarter of 2013 resulted in an increase of approximately $150 billion in risk-weighted assets compared with the Basel I rules. The implementation of these rules also resulted in decreases of Tier 1 capital, Total capital and Tier 1 common capital ratios by 140 basis points, 160 basis points and 120 basis points, respectively, at March 31, 2013. For further discussion of Basel 2.5, see Regulatory capital on pages 61-65 of the 3Q13 Form 10-Q. |
(g) | Basel I Tier 1 common capital ratio (“Tier 1 common ratio”) is Tier 1 common capital (“Tier 1 common”) 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 the Tier 1 common capital ratio, see page 42. |
(h) | On May 21, 2013, the Board of Directors increased the quarterly common stock dividend from $0.30 to $0.38 per share. |
(i) | Estimated. |
Page 2
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio and headcount data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (period-end) | ||||||||||||||||||||||||||||||||||||||
Total assets | $ | 2,415,689 | $ | 2,463,309 | $ | 2,439,494 | $ | 2,389,349 | $ | 2,359,141 | (2 | ) | % | 2 | % | $ | 2,415,689 | $ | 2,359,141 | 2 | % | |||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||
Consumer, excluding credit card loans | 289,063 | 288,350 | 288,096 | 290,082 | 292,620 | - | (1 | ) | 289,063 | 292,620 | (1 | ) | ||||||||||||||||||||||||||
Credit card loans | 127,791 | 123,982 | 124,288 | 121,865 | 127,993 | 3 | - | 127,791 | 127,993 | - | ||||||||||||||||||||||||||||
Wholesale loans | 321,564 | 316,347 | 313,202 | 316,939 | 313,183 | 2 | 3 | 321,564 | 313,183 | 3 | ||||||||||||||||||||||||||||
Total Loans | 738,418 | 728,679 | 725,586 | 728,886 | 733,796 | 1 | 1 | 738,418 | 733,796 | 1 | ||||||||||||||||||||||||||||
Deposits | 1,287,765 | 1,281,102 | 1,202,950 | 1,202,507 | 1,193,593 | 1 | 8 | 1,287,765 | 1,193,593 | 8 | ||||||||||||||||||||||||||||
Long-term debt (a) | 267,889 | 263,372 | 266,212 | 268,361 | 249,024 | 2 | 8 | 267,889 | 249,024 | 8 | ||||||||||||||||||||||||||||
Common stockholders' equity | 200,020 | 195,512 | 197,781 | 197,128 | 195,011 | 2 | 3 | 200,020 | 195,011 | 3 | ||||||||||||||||||||||||||||
Total stockholders' equity | 211,178 | 206,670 | 209,239 | 207,086 | 204,069 | 2 | 3 | 211,178 | 204,069 | 3 | ||||||||||||||||||||||||||||
Loans-to-deposits ratio | 57 | % | 57 | % | 60 | % | 61 | % | 61 | % | 57 | % | 61 | % | ||||||||||||||||||||||||
Headcount (b) | 251,196 | 255,041 | 254,063 | 255,898 | 258,753 | (2 | ) | (3 | ) | 251,196 | 258,753 | (3 | ) | |||||||||||||||||||||||||
LINE OF BUSINESS NET INCOME/(LOSS) (c) | ||||||||||||||||||||||||||||||||||||||
Consumer & Community Banking | $ | 2,372 | $ | 2,702 | $ | 3,089 | $ | 2,586 | $ | 1,989 | (12 | ) | 19 | $ | 10,749 | $ | 10,551 | 2 | ||||||||||||||||||||
Corporate & Investment Bank | 858 | 2,240 | 2,838 | 2,610 | 2,005 | (62 | ) | (57 | ) | 8,546 | 8,406 | 2 | ||||||||||||||||||||||||||
Commercial Banking | 693 | 665 | 621 | 596 | 692 | 4 | - | 2,575 | 2,646 | (3 | ) | |||||||||||||||||||||||||||
Asset Management | 568 | 476 | 500 | 487 | 483 | 19 | 18 | 2,031 | 1,703 | 19 | ||||||||||||||||||||||||||||
Corporate/Private Equity | 787 | (6,463 | ) | (552 | ) | 250 | 523 | NM | 50 | (5,978 | ) | (2,022 | ) | (196 | ) | |||||||||||||||||||||||
NET INCOME/(LOSS) | $ | 5,278 | $ | (380 | ) | $ | 6,496 | $ | 6,529 | $ | 5,692 | NM | (7 | ) | $ | 17,923 | $ | 21,284 | (16 | ) | ||||||||||||||||||
(a) | Included unsecured long-term debt of $199.4 billion, $199.2 billion, $199.1 billion, $206.1 billion and $200.6 billion for the periods ended December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively. |
(b) | Effective January 1, 2013, interns are excluded from the firmwide and business segment headcount metrics reported on this page and throughout this Financial Supplement. Prior periods were revised to conform with this presentation. |
(c) | In the second quarter of 2013, the 2012 net income/(loss) data of Consumer & Community Banking ("CCB") and Corporate/Private Equity were revised to reflect the transfer of certain technology and operations, as well as real estate-related functions and staff, from Corporate/Private Equity to CCB, effective January 1, 2013. For further information on this transfer, see CCB on page 10, Consumer & Business Banking on page 12 and Corporate/Private Equity on page 30. |
Page 3
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||||||||||||||||||
(in millions, except per share and ratio data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
REVENUE | 4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | ||||||||||||||||||||||||||||
Investment banking fees | $ | 1,685 | $ | 1,507 | $ | 1,717 | $ | 1,445 | $ | 1,727 | 12 | % | (2 | ) | % | $ | 6,354 | $ | 5,808 | 9 | % | |||||||||||||||||
Principal transactions (a) | (42 | ) | 2,662 | 3,760 | 3,761 | 1,194 | NM | NM | 10,141 | 5,536 | 83 | |||||||||||||||||||||||||||
Lending- and deposit-related fees | 1,469 | 1,519 | 1,489 | 1,468 | 1,571 | (3 | ) | (6 | ) | 5,945 | 6,196 | (4 | ) | |||||||||||||||||||||||||
Asset management, administration and commissions | 3,975 | 3,667 | 3,865 | 3,599 | 3,679 | 8 | 8 | 15,106 | 13,868 | 9 | ||||||||||||||||||||||||||||
Securities gains | 8 | 26 | 124 | 509 | 102 | (69 | ) | (92 | ) | 667 | 2,110 | (68 | ) | |||||||||||||||||||||||||
Mortgage fees and related income | 1,089 | 841 | 1,823 | 1,452 | 2,035 | 29 | (46 | ) | 5,205 | 8,687 | (40 | ) | ||||||||||||||||||||||||||
Card income | 1,582 | 1,518 | 1,503 | 1,419 | 1,502 | 4 | 5 | 6,022 | 5,658 | 6 | ||||||||||||||||||||||||||||
Other income | 2,483 | 602 | 226 | 536 | 721 | 312 | 244 | 3,847 | 4,258 | (10 | ) | |||||||||||||||||||||||||||
Noninterest revenue | 12,249 | 12,342 | 14,507 | 14,189 | 12,531 | (1 | ) | (2 | ) | 53,287 | 52,121 | 2 | ||||||||||||||||||||||||||
Interest income | 13,262 | 13,162 | 13,145 | 13,427 | 13,634 | 1 | (3 | ) | 52,996 | 56,063 | (5 | ) | ||||||||||||||||||||||||||
Interest expense | 2,355 | 2,387 | 2,441 | 2,494 | 2,512 | (1 | ) | (6 | ) | 9,677 | 11,153 | (13 | ) | |||||||||||||||||||||||||
Net interest income | 10,907 | 10,775 | 10,704 | 10,933 | 11,122 | 1 | (2 | ) | 43,319 | 44,910 | (4 | ) | ||||||||||||||||||||||||||
TOTAL NET REVENUE | 23,156 | 23,117 | 25,211 | 25,122 | 23,653 | - | (2 | ) | 96,606 | 97,031 | - | |||||||||||||||||||||||||||
Provision for credit losses | 104 | (543 | ) | 47 | 617 | 656 | NM | (84 | ) | 225 | 3,385 | (93 | ) | |||||||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||||
Compensation expense | 7,052 | 7,325 | 8,019 | 8,414 | 7,042 | (4 | ) | - | 30,810 | 30,585 | 1 | |||||||||||||||||||||||||||
Occupancy expense | 941 | 947 | 904 | 901 | 911 | (1 | ) | 3 | 3,693 | 3,925 | (6 | ) | ||||||||||||||||||||||||||
Technology, communications and equipment expense | 1,376 | 1,356 | 1,361 | 1,332 | 1,359 | 1 | 1 | 5,425 | 5,224 | 4 | ||||||||||||||||||||||||||||
Professional and outside services | 2,109 | 1,897 | 1,901 | 1,734 | 2,018 | 11 | 5 | 7,641 | 7,429 | 3 | ||||||||||||||||||||||||||||
Marketing | 745 | 588 | 578 | 589 | 648 | 27 | 15 | 2,500 | 2,577 | (3 | ) | |||||||||||||||||||||||||||
Other expense (b) | 3,136 | 11,373 | 2,951 | 2,301 | 3,678 | (72 | ) | (15 | ) | 19,761 | 14,032 | 41 | ||||||||||||||||||||||||||
Amortization of intangibles | 193 | 140 | 152 | 152 | 391 | 38 | (51 | ) | 637 | 957 | (33 | ) | ||||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE | 15,552 | 23,626 | 15,866 | 15,423 | 16,047 | (34 | ) | (3 | ) | 70,467 | 64,729 | 9 | ||||||||||||||||||||||||||
Income before income tax expense | 7,500 | 34 | 9,298 | 9,082 | 6,950 | NM | 8 | 25,914 | 28,917 | (10 | ) | |||||||||||||||||||||||||||
Income tax expense | 2,222 | 414 | 2,802 | 2,553 | 1,258 | 437 | 77 | 7,991 | 7,633 | 5 | ||||||||||||||||||||||||||||
NET INCOME/(LOSS) | $ | 5,278 | $ | (380 | ) | $ | 6,496 | $ | 6,529 | $ | 5,692 | NM | (7 | ) | $ | 17,923 | $ | 21,284 | (16 | ) | ||||||||||||||||||
PER COMMON SHARE DATA | ||||||||||||||||||||||||||||||||||||||
Basic earnings | $ | 1.31 | $ | (0.17 | ) | $ | 1.61 | $ | 1.61 | $ | 1.40 | NM | (6 | ) | $ | 4.39 | $ | 5.22 | (16 | ) | ||||||||||||||||||
Diluted earnings | 1.30 | (0.17 | ) | 1.60 | 1.59 | 1.39 | NM | (6 | ) | 4.35 | 5.20 | (16 | ) | |||||||||||||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||||||||||||||||||||
Return on common equity (c) | 10 | % | (1 | ) | % | 13 | % | 13 | % | 11 | % | 9 | % | 11 | % | |||||||||||||||||||||||
Return on tangible common equity (c)(d) | 14 | (2 | ) | 17 | 17 | 15 | 11 | 15 | ||||||||||||||||||||||||||||||
Return on assets (c) | 0.87 | (0.06 | ) | 1.09 | 1.14 | 0.98 | 0.75 | 0.94 | ||||||||||||||||||||||||||||||
Return on risk-weighted assets (c)(d)(e) | 1.51 | (f) | (0.11 | ) | 1.85 | 1.88 | 1.76 | 1.28 | (f) | 1.65 | ||||||||||||||||||||||||||||
Effective income tax rate | 30 | NM | 30 | 28 | 18 | 31 | 26 | |||||||||||||||||||||||||||||||
Overhead ratio | 67 | 102 | 63 | 61 | 68 | 73 | 67 | |||||||||||||||||||||||||||||||
(a) | Included a $(1.5) billion loss in the fourth quarter of 2013 as a result of implementing a funding valuation adjustment ("FVA") framework for OTC derivatives and structured notes. |
(b) | Included Firmwide legal expense of $0.8 billion, $9.3 billion, $0.7 billion, $0.3 billion and $1.2 billion for the three months ended December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively, and $11.1 billion and $5.0 billion for full year 2013 and 2012, respectively. |
(c) | Ratios are based upon annualized amounts. |
(d) | For further discussion of ROTCE and return on Basel I risk-weighted assets, see pages 2 and 42. |
(e) | In the first quarter of 2013, Basel 2.5 was implemented. For further information, see footnote (f) on page 2. |
(f) | Estimated. |
Page 4
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Dec 31, 2013 | ||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||
Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Dec 31, | ||||||||||||||||||||
2013 | 2013 | 2013 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||
Cash and due from banks | $ | 39,771 | $ | 30,664 | $ | 29,214 | $ | 45,524 | $ | 53,723 | 30 | % | (26 | ) | % | |||||||||||
Deposits with banks | 316,051 | 371,445 | 311,318 | 257,635 | 121,814 | (15 | ) | 159 | ||||||||||||||||||
Federal funds sold and securities purchased under | ||||||||||||||||||||||||||
resale agreements | 248,116 | 235,916 | 252,507 | 218,343 | 296,296 | 5 | (16 | ) | ||||||||||||||||||
Securities borrowed | 111,465 | 122,438 | 117,158 | 114,058 | 119,017 | (9 | ) | (6 | ) | |||||||||||||||||
Trading assets: | ||||||||||||||||||||||||||
Debt and equity instruments | 308,905 | 316,560 | 327,719 | 360,382 | 375,045 | (2 | ) | (18 | ) | |||||||||||||||||
Derivative receivables | 65,759 | 66,788 | 73,751 | 70,609 | 74,983 | (2 | ) | (12 | ) | |||||||||||||||||
Securities | 354,003 | 356,556 | 354,725 | 365,744 | 371,152 | (1 | ) | (5 | ) | |||||||||||||||||
Loans | 738,418 | 728,679 | 725,586 | 728,886 | 733,796 | 1 | 1 | |||||||||||||||||||
Less: Allowance for loan losses | 16,264 | 17,571 | 19,384 | 20,780 | 21,936 | (7 | ) | (26 | ) | |||||||||||||||||
Loans, net of allowance for loan losses | 722,154 | 711,108 | 706,202 | 708,106 | 711,860 | 2 | 1 | |||||||||||||||||||
Accrued interest and accounts receivable | 65,160 | 66,269 | 81,562 | 74,208 | 60,933 | (2 | ) | 7 | ||||||||||||||||||
Premises and equipment | 14,891 | 14,876 | 14,574 | 14,541 | 14,519 | - | 3 | |||||||||||||||||||
Goodwill | 48,081 | 48,100 | 48,057 | 48,067 | 48,175 | - | - | |||||||||||||||||||
Mortgage servicing rights | 9,614 | 9,490 | 9,335 | 7,949 | 7,614 | 1 | 26 | |||||||||||||||||||
Other intangible assets | 1,618 | 1,817 | 1,951 | 2,082 | 2,235 | (11 | ) | (28 | ) | |||||||||||||||||
Other assets | 110,101 | 111,282 | 111,421 | 102,101 | 101,775 | (1 | ) | 8 | ||||||||||||||||||
TOTAL ASSETS | $ | 2,415,689 | $ | 2,463,309 | $ | 2,439,494 | $ | 2,389,349 | $ | 2,359,141 | (2 | ) | 2 | |||||||||||||
LIABILITIES | ||||||||||||||||||||||||||
Deposits | $ | 1,287,765 | $ | 1,281,102 | $ | 1,202,950 | $ | 1,202,507 | $ | 1,193,593 | 1 | 8 | ||||||||||||||
Federal funds purchased and securities loaned or sold | ||||||||||||||||||||||||||
under repurchase agreements | 181,163 | 218,728 | 258,962 | 248,245 | 240,103 | (17 | ) | (25 | ) | |||||||||||||||||
Commercial paper | 57,848 | 53,741 | 56,631 | 58,835 | 55,367 | 8 | 4 | |||||||||||||||||||
Other borrowed funds | 27,994 | 30,436 | 30,385 | 27,200 | 26,636 | (8 | ) | 5 | ||||||||||||||||||
Trading liabilities: | ||||||||||||||||||||||||||
Debt and equity instruments | 80,430 | 87,334 | 84,208 | 63,737 | 61,262 | (8 | ) | 31 | ||||||||||||||||||
Derivative payables | 57,314 | 60,785 | 64,385 | 61,989 | 70,656 | (6 | ) | (19 | ) | |||||||||||||||||
Accounts payable and other liabilities | 194,491 | 212,283 | 211,432 | 193,089 | 195,240 | (8 | ) | - | ||||||||||||||||||
Beneficial interests issued by consolidated VIEs | 49,617 | 48,858 | 55,090 | 58,300 | 63,191 | 2 | (21 | ) | ||||||||||||||||||
Long-term debt | 267,889 | 263,372 | 266,212 | 268,361 | 249,024 | 2 | 8 | |||||||||||||||||||
TOTAL LIABILITIES | 2,204,511 | 2,256,639 | 2,230,255 | 2,182,263 | 2,155,072 | (2 | ) | 2 | ||||||||||||||||||
STOCKHOLDERS' EQUITY | ||||||||||||||||||||||||||
Preferred stock | 11,158 | 11,158 | 11,458 | 9,958 | 9,058 | - | 23 | |||||||||||||||||||
Common stock | 4,105 | 4,105 | 4,105 | 4,105 | 4,105 | - | - | |||||||||||||||||||
Capital surplus | 93,828 | 93,555 | 93,416 | 93,161 | 94,604 | - | (1 | ) | ||||||||||||||||||
Retained earnings | 115,756 | 112,135 | 114,216 | 109,402 | 104,223 | 3 | 11 | |||||||||||||||||||
Accumulated other comprehensive income | 1,199 | 390 | 136 | 3,491 | 4,102 | 207 | (71 | ) | ||||||||||||||||||
Shares held in RSU Trust, at cost | (21 | ) | (21 | ) | (21 | ) | (21 | ) | (21 | ) | - | - | ||||||||||||||
Treasury stock, at cost | (14,847 | ) | (14,652 | ) | (14,071 | ) | (13,010 | ) | (12,002 | ) | (1 | ) | (24 | ) | ||||||||||||
TOTAL STOCKHOLDERS' EQUITY | 211,178 | 206,670 | 209,239 | 207,086 | 204,069 | 2 | 3 | |||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 2,415,689 | $ | 2,463,309 | $ | 2,439,494 | $ | 2,389,349 | $ | 2,359,141 | (2 | ) | 2 | |||||||||||||
Page 5
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
CONDENSED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS | ||||||||||||||||||||||||||||||||||||||
(in millions, except rates) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
AVERAGE BALANCES | 4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | ||||||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||||||||||
Deposits with banks | $ | 329,322 | $ | 321,271 | $ | 265,821 | $ | 156,988 | $ | 124,832 | 3 | % | 164 | % | $ | 268,968 | $ | 118,463 | 127 | % | ||||||||||||||||||
Federal funds sold and securities purchased under | ||||||||||||||||||||||||||||||||||||||
resale agreements | 233,149 | 229,730 | 231,972 | 231,421 | 252,529 | 1 | (8 | ) | 231,567 | 239,703 | (3 | ) | ||||||||||||||||||||||||||
Securities borrowed | 117,730 | 119,950 | 115,194 | 120,337 | 128,329 | (2 | ) | (8 | ) | 118,300 | 131,446 | (10 | ) | |||||||||||||||||||||||||
Trading assets - debt instruments | 208,032 | 212,228 | 240,952 | 250,502 | 244,346 | (2 | ) | (15 | ) | 227,769 | 234,224 | (3 | ) | |||||||||||||||||||||||||
Securities | 348,223 | 351,648 | 359,108 | 368,673 | 365,883 | (1 | ) | (5 | ) | 356,843 | 363,230 | (2 | ) | |||||||||||||||||||||||||
Loans | 729,621 | 723,538 | 727,499 | 725,124 | 725,610 | 1 | 1 | 726,450 | 722,384 | 1 | ||||||||||||||||||||||||||||
Other assets (a) | 39,384 | 39,048 | 39,920 | 43,039 | 33,004 | 1 | 19 | 40,334 | 32,967 | 22 | ||||||||||||||||||||||||||||
Total interest-earning assets | 2,005,461 | 1,997,413 | 1,980,466 | 1,896,084 | 1,874,533 | - | 7 | 1,970,231 | 1,842,417 | 7 | ||||||||||||||||||||||||||||
Trading assets - equity instruments | 111,051 | 103,347 | 116,333 | 120,192 | 119,598 | 7 | (7 | ) | 112,680 | 115,113 | (2 | ) | ||||||||||||||||||||||||||
Trading assets - derivative receivables | 68,709 | 71,657 | 75,310 | 74,918 | 77,974 | (4 | ) | (12 | ) | 72,629 | 85,744 | (15 | ) | |||||||||||||||||||||||||
All other noninterest-earning assets | 222,380 | 217,352 | 227,861 | 230,836 | 238,684 | 2 | (7 | ) | 224,564 | 228,707 | (2 | ) | ||||||||||||||||||||||||||
TOTAL ASSETS | $ | 2,407,601 | $ | 2,389,769 | $ | 2,399,970 | $ | 2,322,030 | $ | 2,310,789 | 1 | 4 | $ | 2,380,104 | $ | 2,271,981 | 5 | |||||||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits | $ | 860,067 | $ | 832,192 | $ | 810,096 | $ | 787,870 | $ | 758,645 | 3 | 13 | $ | 822,781 | $ | 751,098 | 10 | |||||||||||||||||||||
Federal funds purchased and securities loaned or | ||||||||||||||||||||||||||||||||||||||
sold under repurchase agreements | 207,747 | 231,938 | 264,240 | 250,827 | 260,415 | (10 | ) | (20 | ) | 238,551 | 248,561 | (4 | ) | |||||||||||||||||||||||||
Commercial paper | 54,098 | 53,287 | 54,391 | 53,084 | 53,401 | 2 | 1 | 53,717 | 50,780 | 6 | ||||||||||||||||||||||||||||
Trading liabilities - debt, short-term and other liabilities (b) | 211,414 | 213,261 | 201,668 | 184,824 | 181,089 | (1 | ) | 17 | 202,894 | 193,459 | 5 | |||||||||||||||||||||||||||
Beneficial interests issued by consolidated VIEs | 49,866 | 52,522 | 56,742 | 60,341 | 58,973 | (5 | ) | (15 | ) | 54,832 | 60,234 | (9 | ) | |||||||||||||||||||||||||
Long-term debt | 265,676 | 265,396 | 270,796 | 254,326 | 245,343 | - | 8 | 264,083 | 245,662 | 7 | ||||||||||||||||||||||||||||
Total interest-bearing liabilities | 1,648,868 | 1,648,596 | 1,657,933 | 1,591,272 | 1,557,866 | - | 6 | 1,636,858 | 1,549,794 | 6 | ||||||||||||||||||||||||||||
Noninterest-bearing deposits | 381,242 | 364,495 | 363,537 | 355,913 | 374,893 | 5 | 2 | 366,361 | 354,785 | 3 | ||||||||||||||||||||||||||||
Trading liabilities - equity instruments | 15,209 | 14,696 | 13,737 | 13,203 | 14,264 | 3 | 7 | 14,218 | 14,172 | - | ||||||||||||||||||||||||||||
Trading liabilities - derivative payables | 60,011 | 63,378 | 66,246 | 68,683 | 72,049 | (5 | ) | (17 | ) | 64,553 | 76,162 | (15 | ) | |||||||||||||||||||||||||
All other noninterest-bearing liabilities | 94,753 | 89,419 | 90,139 | 88,618 | 90,684 | 6 | 4 | 90,745 | 84,480 | 7 | ||||||||||||||||||||||||||||
TOTAL LIABILITIES | 2,200,083 | 2,180,584 | 2,191,592 | 2,117,689 | 2,109,756 | 1 | 4 | 2,172,735 | 2,079,393 | 4 | ||||||||||||||||||||||||||||
Preferred stock | 11,158 | 11,953 | 11,095 | 9,608 | 9,058 | (7 | ) | 23 | 10,960 | 8,236 | 33 | |||||||||||||||||||||||||||
Common stockholders' equity | 196,360 | 197,232 | 197,283 | 194,733 | 191,975 | - | 2 | 196,409 | 184,352 | 7 | ||||||||||||||||||||||||||||
TOTAL STOCKHOLDERS' EQUITY | 207,518 | 209,185 | 208,378 | 204,341 | 201,033 | (1 | ) | 3 | 207,369 | 192,588 | 8 | |||||||||||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 2,407,601 | $ | 2,389,769 | $ | 2,399,970 | $ | 2,322,030 | $ | 2,310,789 | 1 | 4 | $ | 2,380,104 | $ | 2,271,981 | 5 | |||||||||||||||||||||
AVERAGE RATES (c) | ||||||||||||||||||||||||||||||||||||||
INTEREST-EARNING ASSETS | ||||||||||||||||||||||||||||||||||||||
Deposits with banks | 0.32 | % | 0.33 | % | 0.34 | % | 0.42 | % | 0.43 | % | 0.34 | % | 0.47 | % | ||||||||||||||||||||||||
Federal funds sold and securities purchased under | ||||||||||||||||||||||||||||||||||||||
resale agreements | 0.77 | 0.84 | 0.85 | 0.90 | 0.91 | 0.84 | 1.02 | |||||||||||||||||||||||||||||||
Securities borrowed (d) | (0.19 | ) | (0.12 | ) | (0.11 | ) | (0.02 | ) | (0.03 | ) | (0.11 | ) | — | |||||||||||||||||||||||||
Trading assets - debt instruments | 3.78 | 3.78 | 3.69 | 3.72 | 3.81 | 3.74 | 3.96 | |||||||||||||||||||||||||||||||
Securities | 2.61 | 2.40 | 2.10 | 2.19 | 2.04 | 2.32 | 2.29 | |||||||||||||||||||||||||||||||
Loans | 4.54 | 4.57 | 4.62 | 4.78 | 4.83 | 4.63 | 4.98 | |||||||||||||||||||||||||||||||
Other assets (a)(e) | 1.62 | 1.54 | 1.48 | 0.75 | 1.01 | 1.33 | 0.79 | |||||||||||||||||||||||||||||||
Total interest-earning assets | 2.66 | 2.65 | 2.70 | 2.91 | 2.93 | 2.73 | 3.08 | |||||||||||||||||||||||||||||||
INTEREST-BEARING LIABILITIES | ||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits | 0.22 | 0.25 | 0.27 | 0.28 | 0.30 | 0.25 | 0.35 | |||||||||||||||||||||||||||||||
Federal funds purchased and securities loaned or | ||||||||||||||||||||||||||||||||||||||
sold under repurchase agreements | 0.28 | 0.19 | 0.24 | 0.27 | 0.22 | 0.24 | 0.22 | |||||||||||||||||||||||||||||||
Commercial paper | 0.21 | 0.21 | 0.21 | 0.20 | 0.19 | 0.21 | 0.18 | |||||||||||||||||||||||||||||||
Trading liabilities - debt, short-term and other liabilities (b)(d) | 0.74 | 0.72 | 0.65 | 0.72 | 0.63 | 0.70 | 0.60 | |||||||||||||||||||||||||||||||
Beneficial interests issued by consolidated VIEs | 0.84 | 0.85 | 0.89 | 0.90 | 0.98 | 0.87 | 1.08 | |||||||||||||||||||||||||||||||
Long-term debt | 1.81 | 1.85 | 1.87 | 2.06 | 2.17 | 1.90 | 2.47 | |||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 0.57 | 0.57 | 0.59 | 0.64 | 0.64 | 0.59 | 0.72 | |||||||||||||||||||||||||||||||
INTEREST RATE SPREAD | 2.09 | % | 2.08 | % | 2.11 | % | 2.27 | % | 2.29 | % | 2.14 | % | 2.36 | % | ||||||||||||||||||||||||
NET YIELD ON INTEREST-EARNING ASSETS | 2.20 | % | 2.18 | % | 2.20 | % | 2.37 | % | 2.40 | % | 2.23 | % | 2.48 | % | ||||||||||||||||||||||||
(a) | Includes margin loans. |
(b) | Includes brokerage customer payables. |
(c) | Interest includes the effect of related hedging derivatives. Taxable-equivalent amounts are used where applicable. |
(d) | Negative yield is the result of increased client-driven demand for certain securities combined with the impact of low interest rates; the offset of this matched book activity is reflected as lower net interest expense reported within trading liabilities - debt, short-term and other liabilities. |
(e) | Effective April 1, 2013, the net results previously recorded in net interest income for hedges of investments in non-U.S. subsidiaries have been reclassified to other income. The effect of this reclassification on the total interest-earning assets rate and net yield on interest-earning assets was not material; and therefore, prior period amounts have not been revised. |
Page 6
JPMORGAN CHASE & CO. | ![]() | ||||||||||||
CORE NET INTEREST INCOME | |||||||||||||
(in millions, except rates) |
In addition to reviewing net interest income on a managed basis, management also reviews core net interest income to assess the performance of its core lending, investing (including asset-liability management) and deposit-raising activities (which excludes the impact of Corporate & Investment Bank's ("CIB") market-based activities). The core data presented below are non-GAAP financial measures due to the exclusion of CIB's market-based net interest income and the related assets. Management believes this exclusion provides investors and analysts a more meaningful measure by which to analyze the non-market-related business trends of the Firm and provides a comparable measure to other financial institutions that are primarily focused on core lending, investing and deposit-raising activities. For a further discussion of these measures, see Explanation and Reconciliation of the Firm's Use of Non-GAAP Financial Measures on pages 76-77 of the Annual Report on Form 10-K for the year ended December 31, 2012 (the "2012 Annual Report").
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
CORE NET INTEREST INCOME DATA (a) | ||||||||||||||||||||||||||||||||||||||
Net interest income - managed basis (b)(c) | $ | 11,096 | $ | 10,956 | $ | 10,869 | $ | 11,095 | $ | 11,299 | 1 | % | (2 | ) | % | $ | 44,016 | $ | 45,653 | (4 | ) | % | ||||||||||||||||
Less: Market-based net interest income | 1,093 | 1,109 | 1,345 | 1,432 | 1,487 | (1 | ) | (26 | ) | 4,979 | 5,787 | (14 | ) | |||||||||||||||||||||||||
Core net interest income (b) | $ | 10,003 | $ | 9,847 | $ | 9,524 | $ | 9,663 | $ | 9,812 | 2 | 2 | $ | 39,037 | $ | 39,866 | (2 | ) | ||||||||||||||||||||
Average interest-earning assets | $ | 2,005,461 | $ | 1,997,413 | $ | 1,980,466 | $ | 1,896,084 | $ | 1,874,533 | - | 7 | $ | 1,970,231 | $ | 1,842,417 | 7 | |||||||||||||||||||||
Less: Average market-based earning assets | 501,716 | 493,780 | 512,631 | 508,941 | 503,825 | 2 | - | 504,218 | 499,339 | 1 | ||||||||||||||||||||||||||||
Core average interest-earning assets | $ | 1,503,745 | $ | 1,503,633 | $ | 1,467,835 | $ | 1,387,143 | $ | 1,370,708 | - | 10 | $ | 1,466,013 | $ | 1,343,078 | 9 | |||||||||||||||||||||
Net interest yield on interest-earning assets - | ||||||||||||||||||||||||||||||||||||||
managed basis | 2.20 | % | 2.18 | % | 2.20 | % | 2.37 | % | 2.40 | % | 2.23 | % | 2.48 | % | ||||||||||||||||||||||||
Net interest yield on market-based activities | 0.86 | 0.89 | 1.05 | 1.14 | 1.17 | 0.99 | 1.16 | |||||||||||||||||||||||||||||||
Core net interest yield on core average interest-earning assets | 2.64 | 2.60 | 2.60 | 2.83 | 2.85 | 2.66 | 2.97 | |||||||||||||||||||||||||||||||
(a) | Includes core lending, investing and deposit-raising activities on a managed basis across each of the business segments and Corporate/Private Equity; excludes the market-based activities within the CIB. |
(b) | Interest includes the effect of related hedging derivatives. Taxable-equivalent amounts are used where applicable. |
(c) | For a reconciliation of net interest income on a reported and managed basis, see Reconciliation from Reported to Managed Summary on page 8. |
Page 7
JPMORGAN CHASE & CO. | ![]() | ||||||||
RECONCILIATION FROM REPORTED TO MANAGED SUMMARY | |||||||||
(in millions, except ratios) |
The Firm prepares its consolidated financial statements using accounting principles generally accepted in the U.S. ("U.S. GAAP"). That presentation, which is referred to as "reported” basis, provides the reader with an understanding of the Firm's results that can be tracked consistently from year to year and enables a comparison of the Firm's performance with other companies' U.S. GAAP financial statements. In addition to analyzing the Firm's results on a reported basis, management reviews the Firm's results and the results of the lines of business on a “managed” basis, which is a non-GAAP financial measure. For additional information on managed basis, refer to the notes on Non-GAAP Financial Measures on page 42.
The following summary table provides a reconciliation from reported U.S. GAAP results to managed basis.
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
OTHER INCOME | ||||||||||||||||||||||||||||||||||||||
Other income - reported | $ | 2,483 | $ | 602 | $ | 226 | $ | 536 | $ | 721 | 312 | % | 244 | % | $ | 3,847 | $ | 4,258 | (10 | ) | % | |||||||||||||||||
Fully taxable-equivalent adjustments (a) | 767 | 582 | 582 | 564 | 548 | 32 | 40 | 2,495 | 2,116 | 18 | ||||||||||||||||||||||||||||
Other income - managed | $ | 3,250 | $ | 1,184 | $ | 808 | $ | 1,100 | $ | 1,269 | 174 | 156 | $ | 6,342 | $ | 6,374 | (1 | ) | ||||||||||||||||||||
TOTAL NONINTEREST REVENUE | ||||||||||||||||||||||||||||||||||||||
Total noninterest revenue - reported | $ | 12,249 | $ | 12,342 | $ | 14,507 | $ | 14,189 | $ | 12,531 | (1 | ) | (2 | ) | $ | 53,287 | $ | 52,121 | 2 | |||||||||||||||||||
Fully taxable-equivalent adjustments (a) | 767 | 582 | 582 | 564 | 548 | 32 | 40 | 2,495 | 2,116 | 18 | ||||||||||||||||||||||||||||
Total noninterest revenue - managed | $ | 13,016 | $ | 12,924 | $ | 15,089 | $ | 14,753 | $ | 13,079 | 1 | - | $ | 55,782 | $ | 54,237 | 3 | |||||||||||||||||||||
NET INTEREST INCOME | ||||||||||||||||||||||||||||||||||||||
Net interest income - reported | $ | 10,907 | $ | 10,775 | $ | 10,704 | $ | 10,933 | $ | 11,122 | 1 | (2 | ) | $ | 43,319 | $ | 44,910 | (4 | ) | |||||||||||||||||||
Fully taxable-equivalent adjustments (a) | 189 | 181 | 165 | 162 | 177 | 4 | 7 | 697 | 743 | (6 | ) | |||||||||||||||||||||||||||
Net interest income - managed | $ | 11,096 | $ | 10,956 | $ | 10,869 | $ | 11,095 | $ | 11,299 | 1 | (2 | ) | $ | 44,016 | $ | 45,653 | (4 | ) | |||||||||||||||||||
TOTAL NET REVENUE | ||||||||||||||||||||||||||||||||||||||
Total net revenue - reported | $ | 23,156 | $ | 23,117 | $ | 25,211 | $ | 25,122 | $ | 23,653 | - | (2 | ) | $ | 96,606 | $ | 97,031 | - | ||||||||||||||||||||
Fully taxable-equivalent adjustments (a) | 956 | 763 | 747 | 726 | 725 | 25 | 32 | 3,192 | 2,859 | 12 | ||||||||||||||||||||||||||||
Total net revenue - managed | $ | 24,112 | $ | 23,880 | $ | 25,958 | $ | 25,848 | $ | 24,378 | 1 | (1 | ) | $ | 99,798 | $ | 99,890 | - | ||||||||||||||||||||
PRE-PROVISION PROFIT/(LOSS) | ||||||||||||||||||||||||||||||||||||||
Pre-provision profit - reported | $ | 7,604 | $ | (509 | ) | $ | 9,345 | $ | 9,699 | $ | 7,606 | NM | - | $ | 26,139 | $ | 32,302 | (19 | ) | |||||||||||||||||||
Fully taxable-equivalent adjustments (a) | 956 | 763 | 747 | 726 | 725 | 25 | 32 | 3,192 | 2,859 | 12 | ||||||||||||||||||||||||||||
Pre-provision profit - managed | $ | 8,560 | $ | 254 | $ | 10,092 | $ | 10,425 | $ | 8,331 | NM | 3 | $ | 29,331 | $ | 35,161 | (17 | ) | ||||||||||||||||||||
INCOME BEFORE INCOME TAX EXPENSE | ||||||||||||||||||||||||||||||||||||||
Income before income tax expense - reported | $ | 7,500 | $ | 34 | $ | 9,298 | $ | 9,082 | $ | 6,950 | NM | 8 | $ | 25,914 | $ | 28,917 | (10 | ) | ||||||||||||||||||||
Fully taxable-equivalent adjustments (a) | 956 | 763 | 747 | 726 | 725 | 25 | 32 | 3,192 | 2,859 | 12 | ||||||||||||||||||||||||||||
Income before income tax expense - managed | $ | 8,456 | $ | 797 | $ | 10,045 | $ | 9,808 | $ | 7,675 | NM | 10 | $ | 29,106 | $ | 31,776 | (8 | ) | ||||||||||||||||||||
INCOME TAX EXPENSE | ||||||||||||||||||||||||||||||||||||||
Income tax expense - reported | $ | 2,222 | $ | 414 | $ | 2,802 | $ | 2,553 | $ | 1,258 | 437 | 77 | $ | 7,991 | $ | 7,633 | 5 | |||||||||||||||||||||
Fully taxable-equivalent adjustments (a) | 956 | 763 | 747 | 726 | 725 | 25 | 32 | 3,192 | 2,859 | 12 | ||||||||||||||||||||||||||||
Income tax expense - managed | $ | 3,178 | $ | 1,177 | $ | 3,549 | $ | 3,279 | $ | 1,983 | 170 | 60 | $ | 11,183 | $ | 10,492 | 7 | |||||||||||||||||||||
OVERHEAD RATIO | ||||||||||||||||||||||||||||||||||||||
Overhead ratio - reported | 67 | % | 102 | % | 63 | % | 61 | % | 68 | % | 73 | % | 67 | % | ||||||||||||||||||||||||
Overhead ratio - managed | 64 | 99 | 61 | 60 | 66 | 71 | 65 | |||||||||||||||||||||||||||||||
(a) | Predominantly recognized in the Corporate & Investment Bank and Commercial Banking business segments and Corporate/Private Equity. |
Page 8
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
LINE OF BUSINESS FINANCIAL HIGHLIGHTS - MANAGED BASIS | ||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
TOTAL NET REVENUE (fully taxable-equivalent ("FTE")) (a) | ||||||||||||||||||||||||||||||||||||||
Consumer & Community Banking | $ | 11,314 | $ | 11,082 | $ | 12,015 | $ | 11,615 | $ | 12,362 | 2 | % | (8 | ) | % | $ | 46,026 | $ | 49,884 | (8 | ) | % | ||||||||||||||||
Corporate & Investment Bank | 6,020 | 8,189 | 9,876 | 10,140 | 7,642 | (26 | ) | (21 | ) | 34,225 | 34,326 | - | ||||||||||||||||||||||||||
Commercial Banking | 1,847 | 1,725 | 1,728 | 1,673 | 1,745 | 7 | 6 | 6,973 | 6,825 | 2 | ||||||||||||||||||||||||||||
Asset Management | 3,179 | 2,763 | 2,725 | 2,653 | 2,753 | 15 | 15 | 11,320 | 9,946 | 14 | ||||||||||||||||||||||||||||
Corporate/Private Equity | 1,752 | 121 | (386 | ) | (233 | ) | (124 | ) | NM | NM | 1,254 | (1,091 | ) | NM | ||||||||||||||||||||||||
TOTAL NET REVENUE | $ | 24,112 | $ | 23,880 | $ | 25,958 | $ | 25,848 | $ | 24,378 | 1 | (1 | ) | $ | 99,798 | $ | 99,890 | - | ||||||||||||||||||||
TOTAL NONINTEREST EXPENSE (a) | ||||||||||||||||||||||||||||||||||||||
Consumer & Community Banking | $ | 7,321 | $ | 6,867 | $ | 6,864 | $ | 6,790 | $ | 7,989 | 7 | (8 | ) | $ | 27,842 | $ | 28,827 | (3 | ) | |||||||||||||||||||
Corporate & Investment Bank | 4,892 | 4,999 | 5,742 | 6,111 | 4,996 | (2 | ) | (2 | ) | 21,744 | 21,850 | - | ||||||||||||||||||||||||||
Commercial Banking | 653 | 661 | 652 | 644 | 599 | (1 | ) | 9 | 2,610 | 2,389 | 9 | |||||||||||||||||||||||||||
Asset Management | 2,245 | 2,003 | 1,892 | 1,876 | 1,943 | 12 | 16 | 8,016 | 7,104 | 13 | ||||||||||||||||||||||||||||
Corporate/Private Equity | 441 | 9,096 | 716 | 2 | 520 | (95 | ) | (15 | ) | 10,255 | 4,559 | 125 | ||||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE | $ | 15,552 | $ | 23,626 | $ | 15,866 | $ | 15,423 | $ | 16,047 | (34 | ) | (3 | ) | $ | 70,467 | $ | 64,729 | 9 | |||||||||||||||||||
PRE-PROVISION PROFIT/(LOSS) (a) | ||||||||||||||||||||||||||||||||||||||
Consumer & Community Banking | $ | 3,993 | $ | 4,215 | $ | 5,151 | $ | 4,825 | $ | 4,373 | (5 | ) | (9 | ) | $ | 18,184 | $ | 21,057 | (14 | ) | ||||||||||||||||||
Corporate & Investment Bank | 1,128 | 3,190 | 4,134 | 4,029 | 2,646 | (65 | ) | (57 | ) | 12,481 | 12,476 | - | ||||||||||||||||||||||||||
Commercial Banking | 1,194 | 1,064 | 1,076 | 1,029 | 1,146 | 12 | 4 | 4,363 | 4,436 | (2 | ) | |||||||||||||||||||||||||||
Asset Management | 934 | 760 | 833 | 777 | 810 | 23 | 15 | 3,304 | 2,842 | 16 | ||||||||||||||||||||||||||||
Corporate/Private Equity | 1,311 | (8,975 | ) | (1,102 | ) | (235 | ) | (644 | ) | NM | NM | (9,001 | ) | (5,650 | ) | (59 | ) | |||||||||||||||||||||
PRE-PROVISION PROFIT | $ | 8,560 | $ | 254 | $ | 10,092 | $ | 10,425 | $ | 8,331 | NM | 3 | $ | 29,331 | $ | 35,161 | (17 | ) | ||||||||||||||||||||
PROVISION FOR CREDIT LOSSES | ||||||||||||||||||||||||||||||||||||||
Consumer & Community Banking | $ | 72 | $ | (267 | ) | $ | (19 | ) | $ | 549 | $ | 1,091 | NM | (93 | ) | $ | 335 | $ | 3,774 | (91 | ) | |||||||||||||||||
Corporate & Investment Bank | (19 | ) | (218 | ) | (6 | ) | 11 | (445 | ) | 91 | 96 | (232 | ) | (479 | ) | 52 | ||||||||||||||||||||||
Commercial Banking | 43 | (41 | ) | 44 | 39 | (3 | ) | NM | NM | 85 | 41 | 107 | ||||||||||||||||||||||||||
Asset Management | 21 | — | 23 | 21 | 19 | NM | 11 | 65 | 86 | (24 | ) | |||||||||||||||||||||||||||
Corporate/Private Equity | (13 | ) | (17 | ) | 5 | (3 | ) | (6 | ) | 24 | (117 | ) | (28 | ) | (37 | ) | 24 | |||||||||||||||||||||
PROVISION FOR CREDIT LOSSES | $ | 104 | $ | (543 | ) | $ | 47 | $ | 617 | $ | 656 | NM | (84 | ) | $ | 225 | $ | 3,385 | (93 | ) | ||||||||||||||||||
NET INCOME/(LOSS) (a) | ||||||||||||||||||||||||||||||||||||||
Consumer & Community Banking | $ | 2,372 | $ | 2,702 | $ | 3,089 | $ | 2,586 | $ | 1,989 | (12 | ) | 19 | $ | 10,749 | $ | 10,551 | 2 | ||||||||||||||||||||
Corporate & Investment Bank | 858 | 2,240 | 2,838 | 2,610 | 2,005 | (62 | ) | (57 | ) | 8,546 | 8,406 | 2 | ||||||||||||||||||||||||||
Commercial Banking | 693 | 665 | 621 | 596 | 692 | 4 | - | 2,575 | 2,646 | (3 | ) | |||||||||||||||||||||||||||
Asset Management | 568 | 476 | 500 | 487 | 483 | 19 | 18 | 2,031 | 1,703 | 19 | ||||||||||||||||||||||||||||
Corporate/Private Equity | 787 | (6,463 | ) | (552 | ) | 250 | 523 | NM | 50 | (5,978 | ) | (2,022 | ) | (196 | ) | |||||||||||||||||||||||
TOTAL NET INCOME/(LOSS) | $ | 5,278 | $ | (380 | ) | $ | 6,496 | $ | 6,529 | $ | 5,692 | NM | (7 | ) | $ | 17,923 | $ | 21,284 | (16 | ) | ||||||||||||||||||
(a) | In the second quarter of 2013, the 2012 data for certain income statement line items were revised to reflect the transfer of certain functions and staff from Corporate/Private Equity to CCB, effective January 1, 2013. For further information on this transfer, see CCB on page 10, Consumer & Business Banking on page 12 and Corporate/Private Equity on page 30. |
Page 9
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
CONSUMER & COMMUNITY BANKING | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio and headcount data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
INCOME STATEMENT (a) | ||||||||||||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||||||||||||
Lending- and deposit-related fees | $ | 753 | $ | 780 | $ | 727 | $ | 723 | $ | 789 | (3 | ) | % | (5 | ) | % | $ | 2,983 | $ | 3,121 | (4 | ) | % | |||||||||||||||
Asset management, administration and commissions | 507 | 515 | 561 | 533 | 495 | (2 | ) | 2 | 2,116 | 2,093 | 1 | |||||||||||||||||||||||||||
Mortgage fees and related income | 1,087 | 839 | 1,819 | 1,450 | 2,031 | 30 | (46 | ) | 5,195 | 8,680 | (40 | ) | ||||||||||||||||||||||||||
Card income | 1,518 | 1,460 | 1,445 | 1,362 | 1,448 | 4 | 5 | 5,785 | 5,446 | 6 | ||||||||||||||||||||||||||||
All other income | 399 | 367 | 369 | 338 | 350 | 9 | 14 | 1,473 | 1,473 | - | ||||||||||||||||||||||||||||
Noninterest revenue | 4,264 | 3,961 | 4,921 | 4,406 | 5,113 | 8 | (17 | ) | 17,552 | 20,813 | (16 | ) | ||||||||||||||||||||||||||
Net interest income | 7,050 | 7,121 | 7,094 | 7,209 | 7,249 | (1 | ) | (3 | ) | 28,474 | 29,071 | (2 | ) | |||||||||||||||||||||||||
TOTAL NET REVENUE | 11,314 | 11,082 | 12,015 | 11,615 | 12,362 | 2 | (8 | ) | 46,026 | 49,884 | (8 | ) | ||||||||||||||||||||||||||
Provision for credit losses | 72 | (267 | ) | (19 | ) | 549 | 1,091 | NM | (93 | ) | 335 | 3,774 | (91 | ) | ||||||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||||
Compensation expense | 2,765 | 2,949 | 2,966 | 3,006 | 2,852 | (6 | ) | (3 | ) | 11,686 | 11,632 | - | ||||||||||||||||||||||||||
Noncompensation expense | 4,458 | 3,817 | 3,789 | 3,676 | 4,790 | 17 | (7 | ) | 15,740 | 16,420 | (4 | ) | ||||||||||||||||||||||||||
Amortization of intangibles | 98 | 101 | 109 | 108 | 347 | (3 | ) | (72 | ) | 416 | 775 | (46 | ) | |||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE | 7,321 | 6,867 | 6,864 | 6,790 | 7,989 | 7 | (8 | ) | 27,842 | 28,827 | (3 | ) | ||||||||||||||||||||||||||
Income before income tax expense | 3,921 | 4,482 | 5,170 | 4,276 | 3,282 | (13 | ) | 19 | 17,849 | 17,283 | 3 | |||||||||||||||||||||||||||
Income tax expense | 1,549 | 1,780 | 2,081 | 1,690 | 1,293 | (13 | ) | 20 | 7,100 | 6,732 | 5 | |||||||||||||||||||||||||||
NET INCOME | $ | 2,372 | $ | 2,702 | $ | 3,089 | $ | 2,586 | $ | 1,989 | (12 | ) | 19 | $ | 10,749 | $ | 10,551 | 2 | ||||||||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||||||||||||||||||||
ROE | 20 | % | 23 | % | 27 | % | 23 | % | 18 | % | 23 | % | 25 | % | ||||||||||||||||||||||||
Overhead ratio | 65 | 62 | 57 | 58 | 65 | 60 | 58 | |||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (period-end) (a) | ||||||||||||||||||||||||||||||||||||||
Total assets | $ | 452,929 | $ | 451,166 | $ | 460,642 | $ | 458,902 | $ | 467,282 | - | (3 | ) | $ | 452,929 | $ | 467,282 | (3 | ) | |||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||
Loans retained | 393,351 | 390,345 | 392,067 | 393,575 | 402,963 | 1 | (2 | ) | 393,351 | 402,963 | (2 | ) | ||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value (b) | 7,772 | 10,758 | 15,274 | 16,277 | 18,801 | (28 | ) | (59 | ) | 7,772 | 18,801 | (59 | ) | |||||||||||||||||||||||||
Total loans | 401,123 | 401,103 | 407,341 | 409,852 | 421,764 | - | (5 | ) | 401,123 | 421,764 | (5 | ) | ||||||||||||||||||||||||||
Deposits | 464,412 | 458,867 | 456,814 | 457,176 | 438,517 | 1 | 6 | 464,412 | 438,517 | 6 | ||||||||||||||||||||||||||||
Equity | 46,000 | 46,000 | 46,000 | 46,000 | 43,000 | - | 7 | 46,000 | 43,000 | 7 | ||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (average) (a) | ||||||||||||||||||||||||||||||||||||||
Total assets | $ | 450,987 | $ | 453,881 | $ | 457,644 | $ | 463,527 | $ | 462,690 | (1 | ) | (3 | ) | $ | 456,468 | $ | 467,641 | (2 | ) | ||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||
Loans retained | 390,368 | 390,865 | 392,935 | 397,118 | 400,798 | - | (3 | ) | 392,797 | 408,559 | (4 | ) | ||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value (b) | 9,882 | 14,127 | 18,199 | 21,181 | 19,104 | (30 | ) | (48 | ) | 15,812 | 18,006 | (12 | ) | |||||||||||||||||||||||||
Total loans | 400,250 | 404,992 | 411,134 | 418,299 | 419,902 | (1 | ) | (5 | ) | 408,609 | 426,565 | (4 | ) | |||||||||||||||||||||||||
Deposits | 461,097 | 456,940 | 453,586 | 441,335 | 426,038 | 1 | 8 | 453,304 | 413,948 | 10 | ||||||||||||||||||||||||||||
Equity | 46,000 | 46,000 | 46,000 | 46,000 | 43,000 | - | 7 | 46,000 | 43,000 | 7 | ||||||||||||||||||||||||||||
Headcount (a) | 151,333 | 156,064 | 157,886 | 161,123 | 164,391 | (3 | ) | (8 | ) | 151,333 | 164,391 | (8 | ) | |||||||||||||||||||||||||
(a) | In the second quarter of 2013, the 2012 data for certain income statement (predominantly net interest income, compensation and noncompensation expense) and balance sheet (predominantly total assets) line items, as well as headcount were revised to reflect the transfer of certain technology and operations, as well as real estate-related functions and staff, from Corporate/Private Equity to CCB, effective January 1, 2013. |
(b) | Predominantly consists 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 and Condensed Average Balance Sheets. |
Page 10
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
CONSUMER & COMMUNITY BANKING | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio data and where otherwise noted) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||||||||||||
Net charge-offs (a) | $ | 1,316 | $ | 1,330 | $ | 1,481 | $ | 1,699 | $ | 1,791 | (1 | ) | % | (27 | ) | % | $ | 5,826 | $ | 9,280 | (g) | (37 | ) | % | ||||||||||||||
Nonaccrual loans: | ||||||||||||||||||||||||||||||||||||||
Nonaccrual loans retained | 7,455 | 8,029 | 8,540 | 8,996 | 9,114 | (7 | ) | (18 | ) | 7,455 | 9,114 | (18 | ) | |||||||||||||||||||||||||
Nonaccrual loans held-for-sale and loans | ||||||||||||||||||||||||||||||||||||||
at fair value | 40 | 40 | 41 | 42 | 39 | - | 3 | 40 | 39 | 3 | ||||||||||||||||||||||||||||
Total nonaccrual loans (b)(c)(d) | 7,495 | 8,069 | 8,581 | 9,038 | 9,153 | (7 | ) | (18 | ) | 7,495 | 9,153 | (18 | ) | |||||||||||||||||||||||||
Nonperforming assets (b)(c)(d) | 8,149 | 8,713 | 9,212 | 9,708 | 9,830 | (6 | ) | (17 | ) | 8,149 | 9,830 | (17 | ) | |||||||||||||||||||||||||
Allowance for loan losses (a) | 12,201 | 13,500 | 15,095 | 16,599 | 17,752 | (10 | ) | (31 | ) | 12,201 | 17,752 | (31 | ) | |||||||||||||||||||||||||
Net charge-off rate (a)(e) | 1.34 | % | 1.35 | % | 1.51 | % | 1.74 | % | 1.78 | % | 1.48 | % | 2.27 | %(g) | ||||||||||||||||||||||||
Net charge-off rate, excluding purchased credit-impaired | ||||||||||||||||||||||||||||||||||||||
("PCI") loans (e) | 1.55 | 1.57 | 1.77 | 2.04 | 2.09 | 1.73 | 2.68 | (g) | ||||||||||||||||||||||||||||||
Allowance for loan losses to period-end loans retained | 3.10 | 3.46 | 3.85 | 4.22 | 4.41 | 3.10 | 4.41 | |||||||||||||||||||||||||||||||
Allowance for loan losses to period-end loans retained, | ||||||||||||||||||||||||||||||||||||||
excluding PCI loans (f) | 2.36 | 2.54 | 2.80 | 3.25 | 3.51 | 2.36 | 3.51 | |||||||||||||||||||||||||||||||
Allowance for loan losses to nonaccrual loans | ||||||||||||||||||||||||||||||||||||||
retained, excluding credit card (b)(f) | 57 | 55 | 58 | 65 | 72 | 57 | 72 | |||||||||||||||||||||||||||||||
Nonaccrual loans to total period-end loans, excluding | ||||||||||||||||||||||||||||||||||||||
credit card | 2.74 | 2.91 | 3.03 | 3.14 | 3.12 | 2.74 | 3.12 | |||||||||||||||||||||||||||||||
Nonaccrual loans to total period-end loans, excluding | ||||||||||||||||||||||||||||||||||||||
credit card and PCI loans (b) | 3.40 | 3.63 | 3.79 | 3.94 | 3.91 | 3.40 | 3.91 | |||||||||||||||||||||||||||||||
BUSINESS METRICS | ||||||||||||||||||||||||||||||||||||||
Number of: | ||||||||||||||||||||||||||||||||||||||
Branches | 5,630 | 5,652 | 5,657 | 5,632 | 5,614 | - | - | 5,630 | 5,614 | - | ||||||||||||||||||||||||||||
ATMs | 19,211 | 19,171 | 19,075 | 18,830 | 18,699 | - | 3 | 19,211 | 18,699 | 3 | ||||||||||||||||||||||||||||
Active online customers (in thousands) | 33,742 | 32,916 | 32,245 | 32,281 | 31,114 | 3 | 8 | 33,742 | 31,114 | 8 | ||||||||||||||||||||||||||||
Active mobile customers (in thousands) | 15,629 | 14,993 | 14,013 | 13,263 | 12,359 | 4 | 26 | 15,629 | 12,359 | 26 | ||||||||||||||||||||||||||||
(a) | Net charge-offs and the net charge-off rates for the three months ended December 31, 2013 and full year 2013 excluded $53 million of write-offs in the PCI portfolio. These write-offs decreased the allowance for loan losses for PCI loans. |
(b) | Excludes PCI loans. The Firm is recognizing interest income on each pool of PCI loans as they are all performing. |
(c) | Certain mortgage loans originated with the intent to sell are classified as trading assets on the Consolidated Balance Sheets and Condensed Average Balance Sheets. |
(d) | At December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, nonperforming assets excluded: (1) mortgage loans insured by U.S. government agencies of $8.4 billion, $8.9 billion, $10.1 billion, $10.9 billion and $10.6 billion, respectively, that are 90 or more days past due; (2) real estate owned insured by U.S. government agencies of $2.0 billion, $1.9 billion, $1.8 billion, $1.7 billion and $1.6 billion, respectively; and (3) student loans insured by U.S. government agencies under the Federal Family Education Loan Program (“FFELP”) of $428 million, $456 million, $488 million, $523 million and $525 million, respectively, that are 90 or more days past due. These amounts were excluded from nonaccrual loans as reimbursement of insured amounts is proceeding normally. |
(e) | Loans held-for-sale and loans accounted for at fair value were excluded when calculating the net charge-off rate. |
(f) | The allowance for loan losses for PCI loans was $4.2 billion at December 31, 2013, $5.0 billion at September 30, 2013,and $5.7 billion at June 30, 2013, March 31, 2013 and December 31, 2012; these amounts were also excluded from the applicable ratios. |
(g) | Net charge-offs and the net charge-off rate for full year 2012 included $800 million of charge-offs, recorded in accordance with regulatory guidance requiring loans discharged under Chapter 7 bankruptcy and not reaffirmed by the borrower (“Chapter 7 loans”) to be charged off to the net realizable value of the collateral and to be considered nonaccrual, regardless of their delinquency status. Excluding these charge-offs, net charge-offs for the full year 2012 would have been $8.5 billion, and excluding these charge-offs and PCI loans for the same period, the net charge-off rate would have been 2.45%. For further information, see Consumer Credit Portfolio on pages 140-142 of the 2012 Annual Report. |
Page 11
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
CONSUMER & COMMUNITY BANKING | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio data and where otherwise noted) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
CONSUMER & BUSINESS BANKING (a) | ||||||||||||||||||||||||||||||||||||||
Lending- and deposit-related fees | $ | 744 | $ | 770 | $ | 717 | $ | 711 | $ | 771 | (3 | ) | % | (4 | ) | % | $ | 2,942 | $ | 3,068 | (4 | ) | % | |||||||||||||||
Asset management, administration and commissions | 470 | 465 | 454 | 426 | 404 | 1 | 16 | 1,815 | 1,638 | 11 | ||||||||||||||||||||||||||||
Card income | 384 | 384 | 378 | 349 | 351 | - | 9 | 1,495 | 1,353 | 10 | ||||||||||||||||||||||||||||
All other income | 122 | 127 | 124 | 119 | 123 | (4 | ) | (1 | ) | 492 | 498 | (1 | ) | |||||||||||||||||||||||||
Noninterest revenue | 1,720 | 1,746 | 1,673 | 1,605 | 1,649 | (1 | ) | 4 | 6,744 | 6,557 | 3 | |||||||||||||||||||||||||||
Net interest income | 2,696 | 2,684 | 2,614 | 2,572 | 2,615 | - | 3 | 10,566 | 10,594 | - | ||||||||||||||||||||||||||||
Total net revenue | 4,416 | 4,430 | 4,287 | 4,177 | 4,264 | - | 4 | 17,310 | 17,151 | 1 | ||||||||||||||||||||||||||||
Provision for credit losses | 108 | 104 | 74 | 61 | 110 | 4 | (2 | ) | 347 | 311 | 12 | |||||||||||||||||||||||||||
Noninterest expense | 3,029 | 3,050 | 3,042 | 3,041 | 2,947 | (1 | ) | 3 | 12,162 | 11,490 | 6 | |||||||||||||||||||||||||||
Income before income tax expense | 1,279 | 1,276 | 1,171 | 1,075 | 1,207 | - | 6 | 4,801 | 5,350 | (10 | ) | |||||||||||||||||||||||||||
Net income | $ | 780 | $ | 762 | $ | 698 | $ | 641 | $ | 731 | 2 | 7 | $ | 2,881 | $ | 3,203 | (10 | ) | ||||||||||||||||||||
ROE | 28 | % | 27 | % | 25 | % | 24 | % | 32 | % | 26 | % | 36 | % | ||||||||||||||||||||||||
Overhead ratio | 69 | 69 | 71 | 73 | 69 | 70 | 67 | |||||||||||||||||||||||||||||||
Overhead ratio, excluding core deposit intangibles (b) | 68 | 68 | 70 | 72 | 68 | 69 | 66 | |||||||||||||||||||||||||||||||
Equity (period-end and average) | $ | 11,000 | $ | 11,000 | $ | 11,000 | $ | 11,000 | $ | 9,000 | - | 22 | $ | 11,000 | $ | 9,000 | 22 | |||||||||||||||||||||
BUSINESS METRICS | ||||||||||||||||||||||||||||||||||||||
Business banking origination volume | $ | 1,298 | $ | 1,299 | $ | 1,317 | $ | 1,234 | $ | 1,530 | - | (15 | ) | $ | 5,148 | $ | 6,542 | (21 | ) | |||||||||||||||||||
Period-end loans | 19,416 | 19,029 | 18,950 | 18,739 | 18,883 | 2 | 3 | 19,416 | 18,883 | 3 | ||||||||||||||||||||||||||||
Period-end deposits: (a) | ||||||||||||||||||||||||||||||||||||||
Checking | 187,182 | 180,858 | 179,801 | 180,326 | 170,354 | 3 | 10 | 187,182 | 170,354 | 10 | ||||||||||||||||||||||||||||
Savings | 238,223 | 234,315 | 228,879 | 227,162 | 216,422 | 2 | 10 | 238,223 | 216,422 | 10 | ||||||||||||||||||||||||||||
Time and other | 26,022 | 28,277 | 29,255 | 30,431 | 31,753 | (8 | ) | (18 | ) | 26,022 | 31,753 | (18 | ) | |||||||||||||||||||||||||
Total period-end deposits | 451,427 | 443,450 | 437,935 | 437,919 | 418,529 | 2 | 8 | 451,427 | 418,529 | 8 | ||||||||||||||||||||||||||||
Average loans | 19,021 | 18,884 | 18,758 | 18,711 | 18,525 | 1 | 3 | 18,844 | 18,104 | 4 | ||||||||||||||||||||||||||||
Average deposits: (a) | ||||||||||||||||||||||||||||||||||||||
Checking | 182,272 | 177,392 | 175,496 | 168,697 | 160,332 | 3 | 14 | 176,005 | 153,422 | 15 | ||||||||||||||||||||||||||||
Savings | 236,343 | 231,982 | 227,453 | 221,394 | 211,515 | 2 | 12 | 229,341 | 204,449 | 12 | ||||||||||||||||||||||||||||
Time and other | 27,354 | 28,728 | 29,840 | 31,029 | 32,232 | (5 | ) | (15 | ) | 29,227 | 34,224 | (15 | ) | |||||||||||||||||||||||||
Total average deposits | 445,969 | 438,102 | 432,789 | 421,120 | 404,079 | 2 | 10 | 434,573 | 392,095 | 11 | ||||||||||||||||||||||||||||
Deposit margin | 2.29 | % | 2.32 | % | 2.31 | % | 2.36 | % | 2.44 | % | 2.32 | % | 2.57 | % | ||||||||||||||||||||||||
Average assets (a) | $ | 37,818 | $ | 37,308 | $ | 37,250 | $ | 36,302 | $ | 35,530 | 1 | 6 | $ | 37,174 | $ | 34,431 | 8 | |||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||||||||||||
Net charge-offs | $ | 102 | $ | 100 | $ | 74 | $ | 61 | $ | 110 | 2 | (7 | ) | $ | 337 | $ | 411 | (18 | ) | |||||||||||||||||||
Net charge-off rate | 2.13 | % | 2.10 | % | 1.58 | % | 1.32 | % | 2.36 | % | 1.79 | % | 2.27 | % | ||||||||||||||||||||||||
Allowance for loan losses | $ | 707 | $ | 701 | $ | 697 | $ | 698 | $ | 698 | 1 | 1 | $ | 707 | $ | 698 | 1 | |||||||||||||||||||||
Nonperforming assets | 391 | 419 | 461 | 465 | 488 | (7 | ) | (20 | ) | 391 | 488 | (20 | ) | |||||||||||||||||||||||||
RETAIL BRANCH BUSINESS METRICS | ||||||||||||||||||||||||||||||||||||||
Investment sales volume | $ | 8,195 | $ | 8,172 | $ | 9,463 | $ | 9,220 | $ | 6,987 | - | 17 | $ | 35,050 | $ | 26,036 | 35 | |||||||||||||||||||||
Client investment assets | 188,840 | 178,989 | 171,925 | 168,527 | 158,502 | 6 | 19 | 188,840 | 158,502 | 19 | ||||||||||||||||||||||||||||
% managed accounts | 36 | % | 34 | % | 33 | % | 31 | % | 29 | % | 36 | % | 29 | % | ||||||||||||||||||||||||
Number of: | ||||||||||||||||||||||||||||||||||||||
Chase Private Client locations | 2,149 | 1,948 | 1,691 | 1,392 | 1,218 | 10 | 76 | 2,149 | 1,218 | 76 | ||||||||||||||||||||||||||||
Personal bankers | 23,588 | 22,961 | 22,825 | 23,130 | 23,674 | 3 | - | 23,588 | 23,674 | - | ||||||||||||||||||||||||||||
Sales specialists | 5,740 | 6,269 | 6,326 | 6,102 | 6,076 | (8 | ) | (6 | ) | 5,740 | 6,076 | (6 | ) | |||||||||||||||||||||||||
Client advisors | 3,044 | 3,028 | 3,024 | 2,998 | 2,963 | 1 | 3 | 3,044 | 2,963 | 3 | ||||||||||||||||||||||||||||
Chase Private Clients | 215,888 | 192,358 | 165,331 | 134,206 | 105,700 | 12 | 104 | 215,888 | 105,700 | 104 | ||||||||||||||||||||||||||||
Accounts (in thousands) (c) | 29,437 | 29,301 | 28,937 | 28,530 | 28,073 | - | 5 | 29,437 | 28,073 | 5 | ||||||||||||||||||||||||||||
(a) | In the second quarter of 2013, the 2012 data for certain income statement and balance sheet line items were revised to reflect the transfer of certain functions and staff, as well as headcount, from Corporate/Private Equity to CCB, effective January 1, 2013. For further information on this transfer, see CCB on page 10. |
(b) | Consumer & Business Banking (“CBB”) 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 excluded CBB's CDI amortization expense related to prior business combination transactions of $40 million, $41 million, $41 million, $41 million and $48 million for the three months ended December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively, and $163 million and $200 million for full year 2013 and 2012, respectively. |
(c) | Includes checking accounts and Chase LiquidSM cards. |
Page 12
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
CONSUMER & COMMUNITY BANKING | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
MORTGAGE BANKING | ||||||||||||||||||||||||||||||||||||||
Mortgage fees and related income | $ | 1,087 | $ | 839 | $ | 1,819 | $ | 1,450 | $ | 2,031 | 30 | % | (46 | ) | % | $ | 5,195 | $ | 8,680 | (40 | ) | % | ||||||||||||||||
All other income | 51 | 38 | 101 | 93 | 109 | 34 | (53 | ) | 283 | 475 | (40 | ) | ||||||||||||||||||||||||||
Noninterest revenue | 1,138 | 877 | 1,920 | 1,543 | 2,140 | 30 | (47 | ) | 5,478 | 9,155 | (40 | ) | ||||||||||||||||||||||||||
Net interest income | 1,092 | 1,143 | 1,138 | 1,175 | 1,150 | (4 | ) | (5 | ) | 4,548 | 4,808 | (5 | ) | |||||||||||||||||||||||||
Total net revenue | 2,230 | 2,020 | 3,058 | 2,718 | 3,290 | 10 | (32 | ) | 10,026 | 13,963 | (28 | ) | ||||||||||||||||||||||||||
Provision for credit losses | (782 | ) | (1,044 | ) | (657 | ) | (198 | ) | (269 | ) | 25 | (191 | ) | (2,681 | ) | (490 | ) | (447 | ) | |||||||||||||||||||
Noninterest expense | 2,062 | 1,900 | 1,834 | 1,806 | 2,871 | 9 | (28 | ) | 7,602 | 9,121 | (17 | ) | ||||||||||||||||||||||||||
Income before income tax expense | 950 | 1,164 | 1,881 | 1,110 | 688 | (18 | ) | 38 | 5,105 | 5,332 | (4 | ) | ||||||||||||||||||||||||||
Net income | $ | 562 | $ | 705 | $ | 1,142 | $ | 673 | $ | 418 | (20 | ) | 34 | $ | 3,082 | $ | 3,341 | (8 | ) | |||||||||||||||||||
ROE | 11 | % | 14 | % | 23 | % | 14 | % | 10 | % | 16 | % | 19 | % | ||||||||||||||||||||||||
Overhead ratio | 92 | 94 | 60 | 66 | 87 | 76 | 65 | |||||||||||||||||||||||||||||||
Equity (period-end and average) | $ | 19,500 | $ | 19,500 | $ | 19,500 | $ | 19,500 | $ | 17,500 | - | 11 | $ | 19,500 | $ | 17,500 | 11 | |||||||||||||||||||||
FUNCTIONAL RESULTS | ||||||||||||||||||||||||||||||||||||||
Mortgage Production | ||||||||||||||||||||||||||||||||||||||
Production revenue | $ | 303 | $ | 311 | $ | 1,064 | $ | 995 | $ | 1,407 | (3 | ) | (78 | ) | $ | 2,673 | $ | 5,783 | (54 | ) | ||||||||||||||||||
Production-related net interest & other income | 191 | 273 | 222 | 223 | 205 | (30 | ) | (7 | ) | 909 | 787 | 16 | ||||||||||||||||||||||||||
Production-related revenue, excluding repurchase (losses)/ | ||||||||||||||||||||||||||||||||||||||
benefits | 494 | 584 | 1,286 | 1,218 | 1,612 | (15 | ) | (69 | ) | 3,582 | 6,570 | (45 | ) | |||||||||||||||||||||||||
Production expense (a) | 989 | 669 | 720 | 710 | 876 | 48 | 13 | 3,088 | 2,747 | 12 | ||||||||||||||||||||||||||||
Income, excluding repurchase (losses)/benefits | (495 | ) | (85 | ) | 566 | 508 | 736 | (482 | ) | NM | 494 | 3,823 | (87 | ) | ||||||||||||||||||||||||
Repurchase (losses)/benefits | 221 | 175 | 16 | (81 | ) | 53 | 26 | 317 | 331 | (272 | ) | NM | ||||||||||||||||||||||||||
Income/(loss) before income tax expense/(benefit) | (274 | ) | 90 | 582 | 427 | 789 | NM | NM | 825 | 3,551 | (77 | ) | ||||||||||||||||||||||||||
Mortgage Servicing | ||||||||||||||||||||||||||||||||||||||
Loan servicing revenue | $ | 854 | $ | 817 | $ | 945 | $ | 936 | $ | 783 | 5 | 9 | $ | 3,552 | $ | 3,772 | (6 | ) | ||||||||||||||||||||
Servicing-related net interest & other income | 102 | 99 | 110 | 100 | 89 | 3 | 15 | 411 | 407 | 1 | ||||||||||||||||||||||||||||
Servicing-related revenue | 956 | 916 | 1,055 | 1,036 | 872 | 4 | 10 | 3,963 | 4,179 | (5 | ) | |||||||||||||||||||||||||||
Changes in MSR asset fair value due to collection/realization | ||||||||||||||||||||||||||||||||||||||
of expected cash flows | (267 | ) | (284 | ) | (285 | ) | (258 | ) | (254 | ) | 6 | (5 | ) | (1,094 | ) | (1,222 | ) | 10 | ||||||||||||||||||||
Default servicing expense | 474 | 623 | 475 | 497 | 1,293 | (24 | ) | (63 | ) | 2,069 | 3,707 | (44 | ) | |||||||||||||||||||||||||
Core servicing expense | 189 | 235 | 240 | 240 | 280 | (20 | ) | (33 | ) | 904 | 1,033 | (12 | ) | |||||||||||||||||||||||||
Income/(loss), excluding MSR risk management | 26 | (226 | ) | 55 | 41 | (955 | ) | NM | NM | (104 | ) | (1,783 | ) | 94 | ||||||||||||||||||||||||
MSR risk management, including related net interest | ||||||||||||||||||||||||||||||||||||||
income/(expense) | (24 | ) | (180 | ) | 78 | (142 | ) | 42 | 87 | NM | (268 | ) | 616 | NM | ||||||||||||||||||||||||
Income/(loss) before income tax expense/(benefit) | 2 | (406 | ) | 133 | (101 | ) | (913 | ) | NM | NM | (372 | ) | (1,167 | ) | 68 | |||||||||||||||||||||||
Real Estate Portfolios | ||||||||||||||||||||||||||||||||||||||
Noninterest revenue | $ | (45 | ) | $ | (113 | ) | $ | (34 | ) | $ | (17 | ) | $ | 13 | 60 | NM | $ | (209 | ) | $ | 43 | NM | ||||||||||||||||
Net interest income | 895 | 922 | 942 | 962 | 952 | (3 | ) | (6 | ) | 3,721 | 4,049 | (8 | ) | |||||||||||||||||||||||||
Total net revenue | 850 | 809 | 908 | 945 | 965 | 5 | (12 | ) | 3,512 | 4,092 | (14 | ) | ||||||||||||||||||||||||||
Provision for credit losses | (783 | ) | (1,046 | ) | (662 | ) | (202 | ) | (283 | ) | 25 | (177 | ) | (2,693 | ) | (509 | ) | (429 | ) | |||||||||||||||||||
Noninterest expense | 411 | 375 | 404 | 363 | 436 | 10 | (6 | ) | 1,553 | 1,653 | (6 | ) | ||||||||||||||||||||||||||
Income before income tax expense | 1,222 | 1,480 | 1,166 | 784 | 812 | (17 | ) | 50 | 4,652 | 2,948 | 58 | |||||||||||||||||||||||||||
Mortgage Banking income before income tax | ||||||||||||||||||||||||||||||||||||||
expense | $ | 950 | $ | 1,164 | $ | 1,881 | $ | 1,110 | $ | 688 | (18 | ) | 38 | $ | 5,105 | $ | 5,332 | (4 | ) | |||||||||||||||||||
Mortgage Banking net income | $ | 562 | $ | 705 | $ | 1,142 | $ | 673 | $ | 418 | (20 | ) | 34 | $ | 3,082 | $ | 3,341 | (8 | ) | |||||||||||||||||||
Overhead ratios | ||||||||||||||||||||||||||||||||||||||
Mortgage Production | 138 | % | 88 | % | 55 | % | 62 | % | 52 | % | 79 | % | 43 | % | ||||||||||||||||||||||||
Mortgage Servicing | 100 | 190 | 84 | 116 | 238 | 114 | 133 | |||||||||||||||||||||||||||||||
Real Estate Portfolios | 48 | 46 | 44 | 38 | 45 | 44 | 40 | |||||||||||||||||||||||||||||||
(a) | Includes provision for credit losses associated with Mortgage Production. |
Page 13
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
CONSUMER & COMMUNITY BANKING | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio data and where otherwise noted) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
MORTGAGE BANKING (continued) | ||||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL MORTGAGE FEES AND RELATED | ||||||||||||||||||||||||||||||||||||||
INCOME DETAILS | ||||||||||||||||||||||||||||||||||||||
Net production revenue: | ||||||||||||||||||||||||||||||||||||||
Production revenue | $ | 303 | $ | 311 | $ | 1,064 | $ | 995 | $ | 1,407 | (3 | ) | % | (78 | ) | % | $ | 2,673 | $ | 5,783 | (54 | ) | % | |||||||||||||||
Repurchase (losses)/benefits | 221 | 175 | 16 | (81 | ) | 53 | 26 | 317 | 331 | (272 | ) | NM | ||||||||||||||||||||||||||
Net production revenue | 524 | 486 | 1,080 | 914 | 1,460 | 8 | (64 | ) | 3,004 | 5,511 | (45 | ) | ||||||||||||||||||||||||||
Net mortgage servicing revenue: | ||||||||||||||||||||||||||||||||||||||
Operating revenue: | ||||||||||||||||||||||||||||||||||||||
Loan servicing revenue | 854 | 817 | 945 | 936 | 783 | 5 | 9 | 3,552 | 3,772 | (6 | ) | |||||||||||||||||||||||||||
Changes in MSR asset fair value due to collection/ | ||||||||||||||||||||||||||||||||||||||
realization of expected cash flows | (267 | ) | (284 | ) | (285 | ) | (258 | ) | (254 | ) | 6 | (5 | ) | (1,094 | ) | (1,222 | ) | 10 | ||||||||||||||||||||
Total operating revenue | 587 | 533 | 660 | 678 | 529 | 10 | 11 | 2,458 | 2,550 | (4 | ) | |||||||||||||||||||||||||||
Risk management: | ||||||||||||||||||||||||||||||||||||||
Changes in MSR asset fair value due to market interest | ||||||||||||||||||||||||||||||||||||||
rates and other (a) | 421 | 80 | 1,072 | 546 | 285 | 426 | 48 | 2,119 | (587 | ) | NM | |||||||||||||||||||||||||||
Other changes in MSR asset fair value due to other inputs | ||||||||||||||||||||||||||||||||||||||
and assumptions in model (b) | (65 | ) | (173 | ) | (36 | ) | (237 | ) | (69 | ) | 62 | 6 | (511 | ) | (46 | ) | NM | |||||||||||||||||||||
Changes in derivative fair value and other | (380 | ) | (87 | ) | (957 | ) | (451 | ) | (174 | ) | (337 | ) | (118 | ) | (1,875 | ) | 1,252 | NM | ||||||||||||||||||||
Total risk management | (24 | ) | (180 | ) | 79 | (142 | ) | 42 | 87 | NM | (267 | ) | 619 | NM | ||||||||||||||||||||||||
Total net mortgage servicing revenue | 563 | 353 | 739 | 536 | 571 | 59 | (1 | ) | 2,191 | 3,169 | (31 | ) | ||||||||||||||||||||||||||
Mortgage fees and related income | $ | 1,087 | $ | 839 | $ | 1,819 | $ | 1,450 | $ | 2,031 | 30 | (46 | ) | $ | 5,195 | $ | 8,680 | (40 | ) | |||||||||||||||||||
MORTGAGE PRODUCTION AND MORTGAGE SERVICING | ||||||||||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA | ||||||||||||||||||||||||||||||||||||||
Period-end loans: | ||||||||||||||||||||||||||||||||||||||
Prime mortgage, including option ARMs (c) | $ | 15,136 | $ | 15,571 | $ | 15,567 | $ | 17,257 | $ | 17,290 | (3 | ) | (12 | ) | $ | 15,136 | $ | 17,290 | (12 | ) | ||||||||||||||||||
Loans held-for-sale and loans at fair value (d) | 7,446 | 10,447 | 15,274 | 16,277 | 18,801 | (29 | ) | (60 | ) | 7,446 | 18,801 | (60 | ) | |||||||||||||||||||||||||
Average loans: | ||||||||||||||||||||||||||||||||||||||
Prime mortgage, including option ARMs (c) | 15,641 | 15,878 | 16,933 | 17,554 | 17,243 | (1 | ) | (9 | ) | 16,495 | 17,335 | (5 | ) | |||||||||||||||||||||||||
Loans held-for-sale and loans at fair value (d) | 9,571 | 14,060 | 18,199 | 21,181 | 19,076 | (32 | ) | (50 | ) | 15,717 | 17,573 | (11 | ) | |||||||||||||||||||||||||
Average assets | 49,742 | 54,870 | 59,880 | 64,218 | 60,179 | (9 | ) | (17 | ) | 57,131 | 59,837 | (5 | ) | |||||||||||||||||||||||||
Repurchase liability (period-end) (e) | 651 | 1,945 | 2,245 | 2,430 | 2,530 | (67 | ) | (74 | ) | 651 | 2,530 | (74 | ) | |||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||||||||||||
Net charge-offs: | ||||||||||||||||||||||||||||||||||||||
Prime mortgage, including option ARMs | $ | 1 | $ | 2 | $ | 5 | $ | 4 | $ | 14 | (50 | ) | (93 | ) | $ | 12 | $ | 19 | (37 | ) | ||||||||||||||||||
Net charge-off rate: | ||||||||||||||||||||||||||||||||||||||
Prime mortgage, including option ARMs | 0.03 | % | 0.05 | % | 0.12 | % | 0.09 | % | 0.32 | % | 0.07 | % | 0.11 | % | ||||||||||||||||||||||||
30+ day delinquency rate (f) | 2.75 | 3.16 | 3.46 | 3.04 | 3.05 | 2.75 | 3.05 | |||||||||||||||||||||||||||||||
Nonperforming assets (g) | $ | 559 | $ | 670 | $ | 707 | $ | 643 | $ | 638 | (17 | ) | (12 | ) | $ | 559 | $ | 638 | (12 | ) | ||||||||||||||||||
BUSINESS METRICS (in billions) | ||||||||||||||||||||||||||||||||||||||
Mortgage origination volume by channel | ||||||||||||||||||||||||||||||||||||||
Retail | $ | 9.8 | $ | 17.7 | $ | 23.3 | $ | 26.2 | $ | 26.4 | (45 | ) | (63 | ) | $ | 77.0 | $ | 101.4 | (24 | ) | ||||||||||||||||||
Wholesale (h) | — | — | 0.1 | 0.1 | 0.1 | - | NM | 0.2 | 0.3 | (33 | ) | |||||||||||||||||||||||||||
Correspondent (h) | 13.5 | 22.8 | 25.6 | 26.4 | 24.7 | (41 | ) | (45 | ) | 88.3 | 79.1 | 12 | ||||||||||||||||||||||||||
Total mortgage origination volume (i) | $ | 23.3 | $ | 40.5 | $ | 49.0 | $ | 52.7 | $ | 51.2 | (42 | ) | (54 | ) | $ | 165.5 | $ | 180.8 | (8 | ) | ||||||||||||||||||
Mortgage application volume by channel | ||||||||||||||||||||||||||||||||||||||
Retail | $ | 15.8 | $ | 20.7 | $ | 36.8 | $ | 34.7 | $ | 36.7 | (24 | ) | (57 | ) | $ | 108.0 | $ | 164.5 | (34 | ) | ||||||||||||||||||
Wholesale (h) | — | — | — | 0.2 | 0.2 | - | NM | 0.2 | 0.7 | (71 | ) | |||||||||||||||||||||||||||
Correspondent (h) | 15.5 | 19.7 | 28.2 | 25.6 | 28.8 | (21 | ) | (46 | ) | 89.0 | 100.5 | (11 | ) | |||||||||||||||||||||||||
Total mortgage application volume | $ | 31.3 | $ | 40.4 | $ | 65.0 | $ | 60.5 | $ | 65.7 | (23 | ) | (52 | ) | $ | 197.2 | $ | 265.7 | (26 | ) | ||||||||||||||||||
(a) | Represents both the impact of changes in estimated future prepayments due to changes in market interest rates, and the difference between actual and expected prepayments. |
(b) | Represents the aggregate impact of changes in model inputs and assumptions such as projected cash flows (e.g., cost to service), discount rates and changes in prepayments other than those attributable to changes in market interest rates (e.g., changes in prepayments due to changes in home prices). |
(c) | Predominantly represents prime mortgage loans repurchased from Government National Mortgage Association (“Ginnie Mae”) pools, which are insured by U.S. government agencies. |
(d) | Predominantly consists 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 and Condensed Average Balance Sheets. |
(e) | For more information on the Firm's mortgage repurchase liability, see page 40. |
(f) | At December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, excluded mortgage loans insured by U.S. government agencies of $9.6 billion, $10.0 billion,$11.2 billion, $11.9 billion and $11.8 billion, respectively, that are 30 or more days past due. These amounts were excluded as reimbursement of insured amounts is proceeding normally. |
(g) | At December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, nonperforming assets excluded: (1) mortgage loans insured by U.S. government agencies of $8.4 billion, $8.9 billion, $10.1 billion, $10.9 billion and $10.6 billion, respectively, that are 90 or more days past due; and (2) real estate owned insured by U.S. government agencies of $2.0 billion, $1.9 billion, $1.8 billion, $1.7 billion and $1.6 billion, respectively. These amounts were excluded from nonaccrual loans as reimbursement of insured amounts is proceeding normally. |
(h) | Includes rural housing loans sourced through brokers and correspondents, which are underwritten and closed with pre-funding loan approval from the U.S. Department of Agriculture Rural Development, which acts as the guarantor in the transaction. |
(i) | Firmwide mortgage origination volume was $25.1 billion, $44.2 billion, $52.0 billion, $55.1 billion and $53.7 billion for the three months ended December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively, and $176.4 billion and $189.8 billion for full year 2013 and 2012, respectively. |
Page 14
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
CONSUMER & COMMUNITY BANKING | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio data and where otherwise noted) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
MORTGAGE BANKING (continued) | ||||||||||||||||||||||||||||||||||||||
MORTGAGE PRODUCTION AND MORTGAGE SERVICING | ||||||||||||||||||||||||||||||||||||||
(continued) | ||||||||||||||||||||||||||||||||||||||
BUSINESS METRICS (in billions)(continued) | ||||||||||||||||||||||||||||||||||||||
Third-party mortgage loans serviced (period-end) | $ | 815.5 | $ | 831.1 | $ | 832.0 | $ | 849.2 | $ | 859.4 | (2 | ) | % | (5 | ) | % | $ | 815.5 | $ | 859.4 | (5 | ) | % | |||||||||||||||
Third-party mortgage loans serviced (average) | 823.3 | 831.5 | 840.6 | 854.3 | 803.8 | (1 | ) | 2 | 837.3 | 847.0 | (1 | ) | ||||||||||||||||||||||||||
MSR carrying value (period-end) | 9.6 | 9.5 | 9.3 | 7.9 | 7.6 | 1 | 26 | 9.6 | 7.6 | 26 | ||||||||||||||||||||||||||||
Ratio of MSR carrying value (period-end) to third-party mortgage | ||||||||||||||||||||||||||||||||||||||
loans serviced (period-end) | 1.18 | % | 1.14 | % | 1.12 | % | 0.93 | % | 0.88 | % | 1.18 | % | 0.88 | % | ||||||||||||||||||||||||
Ratio of annualized loan servicing-related revenue to third-party | ||||||||||||||||||||||||||||||||||||||
mortgage loans serviced (average) | 0.38 | 0.38 | 0.41 | 0.42 | 0.45 | 0.40 | 0.46 | |||||||||||||||||||||||||||||||
MSR revenue multiple (a) | 3.11 | x | 3.00 | x | 2.73 | x | 2.21 | x | 1.96 | x | 2.95 | x | 1.91 | x | ||||||||||||||||||||||||
REAL ESTATE PORTFOLIOS | ||||||||||||||||||||||||||||||||||||||
BUSINESS METRICS | ||||||||||||||||||||||||||||||||||||||
Loans, excluding PCI loans | ||||||||||||||||||||||||||||||||||||||
Period-end loans owned: | ||||||||||||||||||||||||||||||||||||||
Home equity | $ | 57,863 | $ | 59,825 | $ | 62,326 | $ | 64,798 | $ | 67,385 | (3 | ) | (14 | ) | $ | 57,863 | $ | 67,385 | (14 | ) | ||||||||||||||||||
Prime mortgage, including option ARMs | 49,463 | 47,958 | 44,003 | 41,997 | 41,316 | 3 | 20 | 49,463 | 41,316 | 20 | ||||||||||||||||||||||||||||
Subprime mortgage | 7,104 | 7,376 | 7,703 | 8,003 | 8,255 | (4 | ) | (14 | ) | 7,104 | 8,255 | (14 | ) | |||||||||||||||||||||||||
Other | 551 | 568 | 589 | 604 | 633 | (3 | ) | (13 | ) | 551 | 633 | (13 | ) | |||||||||||||||||||||||||
Total period-end loans owned | $ | 114,981 | $ | 115,727 | $ | 114,621 | $ | 115,402 | $ | 117,589 | (1 | ) | (2 | ) | $ | 114,981 | $ | 117,589 | (2 | ) | ||||||||||||||||||
Average loans owned: | ||||||||||||||||||||||||||||||||||||||
Home equity | $ | 58,838 | $ | 61,005 | $ | 63,593 | $ | 66,133 | $ | 68,466 | (4 | ) | (14 | ) | $ | 62,369 | $ | 72,674 | (14 | ) | ||||||||||||||||||
Prime mortgage, including option ARMs | 48,875 | 46,177 | 43,007 | 41,808 | 41,393 | 6 | 18 | 44,988 | 42,311 | 6 | ||||||||||||||||||||||||||||
Subprime mortgage | 7,248 | 7,529 | 7,840 | 8,140 | 8,413 | (4 | ) | (14 | ) | 7,687 | 8,947 | (14 | ) | |||||||||||||||||||||||||
Other | 560 | 579 | 597 | 619 | 643 | (3 | ) | (13 | ) | 588 | 675 | (13 | ) | |||||||||||||||||||||||||
Total average loans owned | $ | 115,521 | $ | 115,290 | $ | 115,037 | $ | 116,700 | $ | 118,915 | - | (3 | ) | $ | 115,632 | $ | 124,607 | (7 | ) | |||||||||||||||||||
PCI loans | ||||||||||||||||||||||||||||||||||||||
Period-end loans owned: | ||||||||||||||||||||||||||||||||||||||
Home equity | $ | 18,927 | $ | 19,411 | $ | 19,992 | $ | 20,525 | $ | 20,971 | (2 | ) | (10 | ) | $ | 18,927 | $ | 20,971 | (10 | ) | ||||||||||||||||||
Prime mortgage | 12,038 | 12,487 | 12,976 | 13,366 | 13,674 | (4 | ) | (12 | ) | 12,038 | 13,674 | (12 | ) | |||||||||||||||||||||||||
Subprime mortgage | 4,175 | 4,297 | 4,448 | 4,561 | 4,626 | (3 | ) | (10 | ) | 4,175 | 4,626 | (10 | ) | |||||||||||||||||||||||||
Option ARMs | 17,915 | 18,564 | 19,320 | 19,985 | 20,466 | (3 | ) | (12 | ) | 17,915 | 20,466 | (12 | ) | |||||||||||||||||||||||||
Total period-end loans owned | $ | 53,055 | $ | 54,759 | $ | 56,736 | $ | 58,437 | $ | 59,737 | (3 | ) | (11 | ) | $ | 53,055 | $ | 59,737 | (11 | ) | ||||||||||||||||||
Average loans owned: | ||||||||||||||||||||||||||||||||||||||
Home equity | $ | 19,152 | $ | 19,677 | $ | 20,245 | $ | 20,745 | $ | 21,184 | (3 | ) | (10 | ) | $ | 19,950 | $ | 21,840 | (9 | ) | ||||||||||||||||||
Prime mortgage | 12,273 | 12,705 | 13,152 | 13,524 | 13,860 | (3 | ) | (11 | ) | 12,909 | 14,400 | (10 | ) | |||||||||||||||||||||||||
Subprime mortgage | 4,234 | 4,357 | 4,488 | 4,589 | 4,654 | (3 | ) | (9 | ) | 4,416 | 4,777 | (8 | ) | |||||||||||||||||||||||||
Option ARMs | 18,234 | 18,890 | 19,618 | 20,227 | 20,738 | (3 | ) | (12 | ) | 19,236 | 21,545 | (11 | ) | |||||||||||||||||||||||||
Total average loans owned | $ | 53,893 | $ | 55,629 | $ | 57,503 | $ | 59,085 | $ | 60,436 | (3 | ) | (11 | ) | $ | 56,511 | $ | 62,562 | (10 | ) | ||||||||||||||||||
Total Real Estate Portfolios | ||||||||||||||||||||||||||||||||||||||
Period-end loans owned: | ||||||||||||||||||||||||||||||||||||||
Home equity | $ | 76,790 | $ | 79,236 | $ | 82,318 | $ | 85,323 | $ | 88,356 | (3 | ) | (13 | ) | $ | 76,790 | $ | 88,356 | (13 | ) | ||||||||||||||||||
Prime mortgage, including option ARMs | 79,416 | 79,009 | 76,299 | 75,348 | 75,456 | 1 | 5 | 79,416 | 75,456 | 5 | ||||||||||||||||||||||||||||
Subprime mortgage | 11,279 | 11,673 | 12,151 | 12,564 | 12,881 | (3 | ) | (12 | ) | 11,279 | 12,881 | (12 | ) | |||||||||||||||||||||||||
Other | 551 | 568 | 589 | 604 | 633 | (3 | ) | (13 | ) | 551 | 633 | (13 | ) | |||||||||||||||||||||||||
Total period-end loans owned | $ | 168,036 | $ | 170,486 | $ | 171,357 | $ | 173,839 | $ | 177,326 | (1 | ) | (5 | ) | $ | 168,036 | $ | 177,326 | (5 | ) | ||||||||||||||||||
Average loans owned: | ||||||||||||||||||||||||||||||||||||||
Home equity | $ | 77,990 | $ | 80,682 | $ | 83,838 | $ | 86,878 | $ | 89,650 | (3 | ) | (13 | ) | $ | 82,319 | $ | 94,514 | (13 | ) | ||||||||||||||||||
Prime mortgage, including option ARMs | 79,382 | 77,772 | 75,777 | 75,559 | 75,991 | 2 | 4 | 77,133 | 78,256 | (1 | ) | |||||||||||||||||||||||||||
Subprime mortgage | 11,482 | 11,886 | 12,328 | 12,729 | 13,067 | (3 | ) | (12 | ) | 12,103 | 13,724 | (12 | ) | |||||||||||||||||||||||||
Other | 560 | 579 | 597 | 619 | 643 | (3 | ) | (13 | ) | 588 | 675 | (13 | ) | |||||||||||||||||||||||||
Total average loans owned | $ | 169,414 | $ | 170,919 | $ | 172,540 | $ | 175,785 | $ | 179,351 | (1 | ) | (6 | ) | $ | 172,143 | $ | 187,169 | (8 | ) | ||||||||||||||||||
Average assets | 162,674 | 163,001 | 163,593 | 166,373 | 169,375 | - | (4 | ) | 163,898 | 175,712 | (7 | ) | ||||||||||||||||||||||||||
Home equity origination volume | 643 | 580 | 499 | 402 | 373 | 11 | 72 | 2,124 | 1,420 | 50 | ||||||||||||||||||||||||||||
(a) | Represents the ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end) divided by the ratio of annualized loan servicing-related revenue to third-party mortgage loans serviced (average). |
Page 15
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
CONSUMER & COMMUNITY BANKING | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
MORTGAGE BANKING (continued) | ||||||||||||||||||||||||||||||||||||||
REAL ESTATE PORTFOLIOS (continued) | ||||||||||||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||||||||||||
Net charge-offs/(recoveries), excluding PCI loans (a) | ||||||||||||||||||||||||||||||||||||||
Home equity | $ | 179 | $ | 218 | $ | 236 | $ | 333 | $ | 257 | (18 | ) | % | (30 | ) | % | $ | 966 | $ | 2,385 | (d) | (59 | ) | % | ||||||||||||||
Prime mortgage, including option ARMs | (8 | ) | (11 | ) | 16 | 44 | 66 | 27 | NM | 41 | 454 | (d) | (91 | ) | ||||||||||||||||||||||||
Subprime mortgage | (6 | ) | (4 | ) | 33 | 67 | 92 | (50 | ) | NM | 90 | 486 | (d) | (81 | ) | |||||||||||||||||||||||
Other | 2 | 1 | 3 | 4 | 2 | 100 | - | 10 | 16 | (38 | ) | |||||||||||||||||||||||||||
Total net charge-offs/(recoveries), excluding PCI loans | $ | 167 | $ | 204 | $ | 288 | $ | 448 | $ | 417 | (18 | ) | (60 | ) | $ | 1,107 | $ | 3,341 | (67 | ) | ||||||||||||||||||
Net charge-off/(recovery) rate, excluding PCI loans | ||||||||||||||||||||||||||||||||||||||
Home equity | 1.21 | % | 1.42 | % | 1.49 | % | 2.04 | % | 1.49 | % | 1.55 | % | 3.28 | %(d) | ||||||||||||||||||||||||
Prime mortgage, including option ARMs | (0.06 | ) | (0.09 | ) | 0.15 | 0.43 | 0.63 | 0.09 | 1.07 | (d) | ||||||||||||||||||||||||||||
Subprime mortgage | (0.33 | ) | (0.21 | ) | 1.69 | 3.34 | 4.35 | 1.17 | 5.43 | (d) | ||||||||||||||||||||||||||||
Other | 1.42 | 0.69 | 2.02 | 2.62 | 1.24 | 1.70 | 2.37 | |||||||||||||||||||||||||||||||
Total net charge-off/(recovery) rate, excluding PCI loans | 0.57 | 0.70 | 1.00 | 1.56 | 1.40 | 0.96 | 2.68 | |||||||||||||||||||||||||||||||
Net charge-off/(recovery) rate - reported (a) | ||||||||||||||||||||||||||||||||||||||
Home equity | 0.91 | % | 1.07 | % | 1.13 | % | 1.55 | % | 1.14 | % | 1.17 | % | 2.52 | %(d) | ||||||||||||||||||||||||
Prime mortgage, including option ARMs | (0.04 | ) | (0.06 | ) | 0.08 | 0.24 | 0.35 | 0.05 | 0.58 | (d) | ||||||||||||||||||||||||||||
Subprime mortgage | (0.21 | ) | (0.13 | ) | 1.07 | 2.13 | 2.80 | 0.74 | 3.54 | (d) | ||||||||||||||||||||||||||||
Other | 1.42 | 0.69 | 2.02 | 2.62 | 1.24 | 1.70 | 2.37 | |||||||||||||||||||||||||||||||
Total net charge-off/(recovery) rate - reported | 0.39 | 0.47 | 0.67 | 1.03 | 0.92 | 0.64 | 1.79 | |||||||||||||||||||||||||||||||
30+ day delinquency rate, excluding PCI loans (b) | 3.66 | % | 3.81 | % | 4.17 | % | 4.61 | % | 5.03 | % | 3.66 | % | 5.03 | % | ||||||||||||||||||||||||
Allowance for loan losses, excluding PCI loans | $ | 2,568 | $ | 2,768 | $ | 3,268 | $ | 4,218 | $ | 4,868 | (7 | ) | (47 | ) | $ | 2,568 | $ | 4,868 | (47 | ) | ||||||||||||||||||
Allowance for PCI loans (a) | 4,158 | 4,961 | 5,711 | 5,711 | 5,711 | (16 | ) | (27 | ) | 4,158 | 5,711 | (27 | ) | |||||||||||||||||||||||||
Allowance for loan losses | $ | 6,726 | $ | 7,729 | $ | 8,979 | $ | 9,929 | $ | 10,579 | (13 | ) | (36 | ) | $ | 6,726 | $ | 10,579 | (36 | ) | ||||||||||||||||||
Nonperforming assets (c) | 6,919 | 7,385 | 7,801 | 8,349 | 8,439 | (6 | ) | (18 | ) | 6,919 | 8,439 | (18 | ) | |||||||||||||||||||||||||
Allowance for loan losses to period-end loans retained | 4.00 | % | 4.53 | % | 5.24 | % | 5.71 | % | 5.97 | % | 4.00 | % | 5.97 | % | ||||||||||||||||||||||||
Allowance for loan losses to period-end loans retained, | ||||||||||||||||||||||||||||||||||||||
excluding PCI loans | 2.23 | 2.39 | 2.85 | 3.66 | 4.14 | 2.23 | 4.14 | |||||||||||||||||||||||||||||||
(a) | Net charge-offs and the net charge-off rates for the three months ended December 31, 2013 and full year 2013 excluded $53 million of write-offs in the PCI portfolio. These write-offs decreased the allowance for loan losses for PCI loans. |
(b) | The 30+ day delinquency rate for PCI loans was 15.31%, 16.19%, 17.92%, 19.26% and 20.14% at December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively. |
(c) | Excludes PCI loans. The Firm is recognizing interest income on each pool of PCI loans as they are all performing. |
(d) | Net charge-offs and net charge-off rates for full year 2012 included $744 million of charge-offs of Chapter 7 loans. Excluding these charges-offs, net charge-offs for the full year 2012 would have been $1.8 billion, $410 million and $416 million for the home equity, prime mortgage, including option ARMs, and subprime mortgage portfolios, respectively. Net charge-off rates for the same period, excluding these charge-offs and PCI loans, would have been 2.41%, 0.97% and 4.65% for the home equity, prime mortgage, including option ARMs, and subprime mortgage portfolios, respectively. For further information, see Consumer Credit Portfolio on pages 140-142 of the 2012 Annual Report. |
Page 16
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
CONSUMER & COMMUNITY BANKING | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio data and where otherwise noted) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
CARD, MERCHANT SERVICES & AUTO | ||||||||||||||||||||||||||||||||||||||
Card income | $ | 1,134 | $ | 1,075 | $ | 1,067 | $ | 1,013 | $ | 1,097 | 5 | % | 3 | % | $ | 4,289 | $ | 4,092 | 5 | % | ||||||||||||||||||
All other income | 272 | 263 | 261 | 245 | 227 | 3 | 20 | 1,041 | 1,009 | 3 | ||||||||||||||||||||||||||||
Noninterest revenue | 1,406 | 1,338 | 1,328 | 1,258 | 1,324 | 5 | 6 | 5,330 | 5,101 | 4 | ||||||||||||||||||||||||||||
Net interest income | 3,262 | 3,294 | 3,342 | 3,462 | 3,484 | (1 | ) | (6 | ) | 13,360 | 13,669 | (2 | ) | |||||||||||||||||||||||||
Total net revenue | 4,668 | 4,632 | 4,670 | 4,720 | 4,808 | 1 | (3 | ) | 18,690 | 18,770 | - | |||||||||||||||||||||||||||
Provision for credit losses | 746 | 673 | 564 | 686 | 1,250 | 11 | (40 | ) | 2,669 | 3,953 | (32 | ) | ||||||||||||||||||||||||||
Noninterest expense | 2,230 | 1,917 | 1,988 | 1,943 | 2,171 | 16 | 3 | 8,078 | 8,216 | (2 | ) | |||||||||||||||||||||||||||
Income before income tax expense | 1,692 | 2,042 | 2,118 | 2,091 | 1,387 | (17 | ) | 22 | 7,943 | 6,601 | 20 | |||||||||||||||||||||||||||
Net income | $ | 1,030 | $ | 1,235 | $ | 1,249 | $ | 1,272 | $ | 840 | (17 | ) | 23 | $ | 4,786 | $ | 4,007 | 19 | ||||||||||||||||||||
ROE | 26 | % | 32 | % | 32 | % | 33 | % | 20 | % | 31 | % | 24 | % | ||||||||||||||||||||||||
Overhead ratio | 48 | 41 | 43 | 41 | 45 | 43 | 44 | |||||||||||||||||||||||||||||||
Equity (period-end and average) | $ | 15,500 | $ | 15,500 | $ | 15,500 | $ | 15,500 | $ | 16,500 | - | (6 | ) | $ | 15,500 | $ | 16,500 | (6 | ) | |||||||||||||||||||
SELECTED BALANCE SHEET DATA (period-end) | ||||||||||||||||||||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||
Credit Card | $ | 127,791 | $ | 123,982 | $ | 124,288 | $ | 121,865 | $ | 127,993 | 3 | - | $ | 127,791 | $ | 127,993 | - | |||||||||||||||||||||
Auto | 52,757 | 50,810 | 50,865 | 50,552 | 49,913 | 4 | 6 | 52,757 | 49,913 | 6 | ||||||||||||||||||||||||||||
Student | 10,541 | 10,777 | 11,040 | 11,323 | 11,558 | (2 | ) | (9 | ) | 10,541 | 11,558 | (9 | ) | |||||||||||||||||||||||||
Total loans | $ | 191,089 | $ | 185,569 | $ | 186,193 | $ | 183,740 | $ | 189,464 | 3 | 1 | $ | 191,089 | $ | 189,464 | 1 | |||||||||||||||||||||
SELECTED BALANCE SHEET DATA (average) | ||||||||||||||||||||||||||||||||||||||
Total assets | $ | 200,753 | $ | 198,702 | $ | 196,921 | $ | 196,634 | $ | 197,606 | 1 | 2 | $ | 198,265 | $ | 197,661 | - | |||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||
Credit Card | 124,111 | 123,912 | 122,855 | 123,564 | 124,729 | - | - | 123,613 | 125,464 | (1 | ) | |||||||||||||||||||||||||||
Auto | 51,824 | 50,432 | 50,677 | 50,045 | 49,268 | 3 | 5 | 50,748 | 48,413 | 5 | ||||||||||||||||||||||||||||
Student | 10,668 | 10,907 | 11,172 | 11,459 | 11,710 | (2 | ) | (9 | ) | 11,049 | 12,507 | (12 | ) | |||||||||||||||||||||||||
Total loans | $ | 186,603 | $ | 185,251 | $ | 184,704 | $ | 185,068 | $ | 185,707 | 1 | - | $ | 185,410 | $ | 186,384 | (1 | ) | ||||||||||||||||||||
BUSINESS METRICS | ||||||||||||||||||||||||||||||||||||||
Credit Card, excluding Commercial Card | ||||||||||||||||||||||||||||||||||||||
Sales volume (in billions) | $ | 112.6 | $ | 107.0 | $ | 105.2 | $ | 94.7 | $ | 101.6 | 5 | 11 | $ | 419.5 | $ | 381.1 | 10 | |||||||||||||||||||||
New accounts opened | 2.4 | 1.7 | 1.5 | 1.7 | 1.8 | 41 | 33 | 7.3 | 6.7 | 9 | ||||||||||||||||||||||||||||
Open accounts | 65.3 | 65.0 | 64.8 | 64.7 | 64.5 | - | 1 | 65.3 | 64.5 | 1 | ||||||||||||||||||||||||||||
Accounts with sales activity | 32.3 | 30.0 | 30.0 | 29.4 | 30.6 | 8 | 6 | 32.3 | 30.6 | 6 | ||||||||||||||||||||||||||||
% of accounts acquired online | 59 | % | 53 | % | 53 | % | 52 | % | 58 | % | 55 | % | 51 | % | ||||||||||||||||||||||||
Merchant Services (Chase Paymentech Solutions) | ||||||||||||||||||||||||||||||||||||||
Merchant processing volume (in billions) | $ | 203.4 | $ | 185.9 | $ | 185.0 | $ | 175.8 | $ | 178.6 | 9 | 14 | $ | 750.1 | $ | 655.2 | 14 | |||||||||||||||||||||
Total transactions (in billions) | 9.6 | 8.9 | 8.8 | 8.3 | 8.2 | 8 | 17 | 35.6 | 29.5 | 21 | ||||||||||||||||||||||||||||
Auto & Student | ||||||||||||||||||||||||||||||||||||||
Origination volume (in billions) | ||||||||||||||||||||||||||||||||||||||
Auto | $ | 6.4 | $ | 6.4 | $ | 6.8 | $ | 6.5 | $ | 5.5 | - | 16 | $ | 26.1 | $ | 23.4 | 12 | |||||||||||||||||||||
Student | — | — | — | 0.1 | — | - | - | 0.1 | 0.2 | (50 | ) | |||||||||||||||||||||||||||
Page 17
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
CONSUMER & COMMUNITY BANKING | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
CARD, MERCHANT SERVICES & AUTO (continued) | ||||||||||||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||||||||||||
Net charge-offs: | ||||||||||||||||||||||||||||||||||||||
Credit Card | $ | 891 | $ | 892 | $ | 1,014 | $ | 1,082 | $ | 1,097 | - | % | (19 | ) | % | $ | 3,879 | $ | 4,944 | (22 | ) | % | ||||||||||||||||
Auto | 51 | 44 | 23 | 40 | 44 | 16 | 16 | 158 | 188 | (e) | (16 | ) | ||||||||||||||||||||||||||
Student | 104 | 88 | 77 | 64 | 109 | 18 | (5 | ) | 333 | 377 | (12 | ) | ||||||||||||||||||||||||||
Total net charge-offs | 1,046 | 1,024 | 1,114 | 1,186 | 1,250 | 2 | (16 | ) | 4,370 | 5,509 | (21 | ) | ||||||||||||||||||||||||||
Net charge-off rate: | ||||||||||||||||||||||||||||||||||||||
Credit Card (a) | 2.86 | % | 2.86 | % | 3.31 | % | 3.55 | % | 3.50 | % | 3.14 | % | 3.95 | % | ||||||||||||||||||||||||
Auto | 0.39 | 0.35 | 0.18 | 0.32 | 0.36 | 0.31 | 0.39 | (e) | ||||||||||||||||||||||||||||||
Student | 3.87 | 3.20 | 2.76 | 2.27 | 3.70 | 3.01 | 3.01 | |||||||||||||||||||||||||||||||
Total net charge-off rate | 2.23 | 2.19 | 2.42 | 2.60 | 2.68 | 2.36 | 2.96 | |||||||||||||||||||||||||||||||
Delinquency rates | ||||||||||||||||||||||||||||||||||||||
30+ day delinquency rate: | ||||||||||||||||||||||||||||||||||||||
Credit Card (b) | 1.67 | 1.69 | 1.69 | 1.94 | 2.10 | 1.67 | 2.10 | |||||||||||||||||||||||||||||||
Auto | 1.15 | 0.93 | 0.95 | 0.92 | 1.25 | 1.15 | 1.25 | |||||||||||||||||||||||||||||||
Student (c) | 2.56 | 2.60 | 2.23 | 2.06 | 2.13 | 2.56 | 2.13 | |||||||||||||||||||||||||||||||
Total 30+ day delinquency rate | 1.58 | 1.53 | 1.52 | 1.67 | 1.87 | 1.58 | 1.87 | |||||||||||||||||||||||||||||||
90+ day delinquency rate - Credit Card (b) | 0.80 | 0.79 | 0.82 | 0.97 | 1.02 | 0.80 | 1.02 | |||||||||||||||||||||||||||||||
Nonperforming assets (d) | $ | 280 | $ | 239 | $ | 243 | $ | 251 | $ | 265 | 17 | 6 | $ | 280 | $ | 265 | 6 | |||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||||||||
Credit Card | 3,795 | 4,097 | 4,445 | 4,998 | 5,501 | (7 | ) | (31 | ) | 3,795 | 5,501 | (31 | ) | |||||||||||||||||||||||||
Auto & Student | 953 | 953 | 954 | 954 | 954 | - | - | 953 | 954 | - | ||||||||||||||||||||||||||||
Total allowance for loan losses | 4,748 | 5,050 | 5,399 | 5,952 | 6,455 | (6 | ) | (26 | ) | 4,748 | 6,455 | (26 | ) | |||||||||||||||||||||||||
Allowance for loan losses to period-end loans: | ||||||||||||||||||||||||||||||||||||||
Credit Card (b) | 2.98 | % | 3.31 | % | 3.58 | % | 4.10 | % | 4.30 | % | 2.98 | % | 4.30 | % | ||||||||||||||||||||||||
Auto & Student | 1.51 | 1.55 | 1.54 | 1.54 | 1.55 | 1.51 | 1.55 | |||||||||||||||||||||||||||||||
Total allowance for loan losses to period-end loans | 2.49 | 2.73 | 2.90 | 3.24 | 3.41 | 2.49 | 3.41 | |||||||||||||||||||||||||||||||
CARD SERVICES SUPPLEMENTAL INFORMATION | ||||||||||||||||||||||||||||||||||||||
Noninterest revenue | $ | 1,051 | $ | 994 | $ | 994 | $ | 938 | $ | 1,014 | 6 | 4 | $ | 3,977 | $ | 3,887 | 2 | |||||||||||||||||||||
Net interest income | 2,809 | 2,824 | 2,863 | 2,970 | 3,005 | (1 | ) | (7 | ) | 11,466 | 11,611 | (1 | ) | |||||||||||||||||||||||||
Total net revenue | 3,860 | 3,818 | 3,857 | 3,908 | 4,019 | 1 | (4 | ) | 15,443 | 15,498 | - | |||||||||||||||||||||||||||
Provision for credit losses | 591 | 542 | 464 | 582 | 1,097 | 9 | (46 | ) | 2,179 | 3,444 | (37 | ) | ||||||||||||||||||||||||||
Noninterest expense | 1,749 | 1,458 | 1,537 | 1,501 | 1,710 | 20 | 2 | 6,245 | 6,566 | (5 | ) | |||||||||||||||||||||||||||
Income before income tax expense | 1,520 | 1,818 | 1,856 | 1,825 | 1,212 | (16 | ) | 25 | 7,019 | 5,488 | 28 | |||||||||||||||||||||||||||
Net income | $ | 927 | $ | 1,102 | $ | 1,093 | $ | 1,113 | $ | 736 | (16 | ) | 26 | $ | 4,235 | $ | 3,344 | 27 | ||||||||||||||||||||
Percentage of average loans: | ||||||||||||||||||||||||||||||||||||||
Noninterest revenue | 3.36 | % | 3.18 | % | 3.25 | % | 3.08 | % | 3.23 | % | 3.22 | % | 3.10 | % | ||||||||||||||||||||||||
Net interest income | 8.98 | 9.04 | 9.35 | 9.75 | 9.58 | 9.28 | 9.25 | |||||||||||||||||||||||||||||||
Total net revenue | 12.34 | 12.22 | 12.59 | 12.83 | 12.82 | 12.49 | 12.35 | |||||||||||||||||||||||||||||||
(a) | Average credit card loans included loans held-for-sale of $311 million, $67 million and $28 million for the three months ended December 31, 2013, September 30, 2013 and December 31, 2012, respectively, and $95 million and $433 million for full year 2013 and 2012, respectively. These amounts are excluded when calculating the net charge-off rate. There were no loans held-for-sale for the three months ended June 30, 2013 and March 31, 2013. |
(b) | Period-end credit card loans included loans held-for-sale of $326 million and $310 million at December 31, 2013 and September 30, 2013, respectively. These amounts are excluded when calculating delinquency rates and the allowance for loan losses to period-end loans. There were no loans held-for-sale at June 30, 2013, March 31, 2013 and December 31, 2012. |
(c) | Excluded student loans insured by U.S. government agencies under the FFELP of $737 million, $769 million, $812 million, $881 million and $894 million at December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively, that are 30 or more days past due. These amounts are excluded as reimbursement of insured amounts is proceeding normally. |
(d) | Nonperforming assets excluded student loans insured by U.S. government agencies under the FFELP of $428 million, $456 million, $488 million, $523 million and $525 million at December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively, that are 90 or more days past due. These amounts are excluded as reimbursement of insured amounts is proceeding normally. |
(e) | Net charge-offs and the net charge-off rate for full year 2012 included $53 million of charge-offs of Chapter 7 loans. Excluding these incremental charge-offs, net charge-offs for full year 2012 would have been $135 million, and the net charge-off rate for the same period would have been 0.28%. |
Page 18
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
CORPORATE & INVESTMENT BANK | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS | �� | |||||||||||||||||||||||||||||||||||||
(in millions, except ratio data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
INCOME STATEMENT | ||||||||||||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||||||||||||
Investment banking fees | $ | 1,671 | $ | 1,510 | $ | 1,717 | $ | 1,433 | $ | 1,720 | 11 | % | (3 | ) | % | $ | 6,331 | $ | 5,769 | 10 | % | |||||||||||||||||
Principal transactions (a) | (162 | ) | 2,202 | 3,288 | 3,961 | 966 | NM | NM | 9,289 | 9,510 | (2 | ) | ||||||||||||||||||||||||||
Lending- and deposit-related fees | 454 | 471 | 486 | 473 | 499 | (4 | ) | (9 | ) | 1,884 | 1,948 | (3 | ) | |||||||||||||||||||||||||
Asset management, administration and commissions | 1,129 | 1,128 | 1,289 | 1,167 | 1,163 | - | (3 | ) | 4,713 | 4,693 | - | |||||||||||||||||||||||||||
All other income | 487 | 392 | 391 | 323 | 435 | 24 | 12 | 1,593 | 1,184 | 35 | ||||||||||||||||||||||||||||
Noninterest revenue | 3,579 | 5,703 | 7,171 | 7,357 | 4,783 | (37 | ) | (25 | ) | 23,810 | 23,104 | 3 | ||||||||||||||||||||||||||
Net interest income | 2,441 | 2,486 | 2,705 | 2,783 | 2,859 | (2 | ) | (15 | ) | 10,415 | 11,222 | (7 | ) | |||||||||||||||||||||||||
TOTAL NET REVENUE (b) | 6,020 | 8,189 | 9,876 | 10,140 | 7,642 | (26 | ) | (21 | ) | 34,225 | 34,326 | - | ||||||||||||||||||||||||||
Provision for credit losses | (19 | ) | (218 | ) | (6 | ) | 11 | (445 | ) | 91 | 96 | (232 | ) | (479 | ) | 52 | ||||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||||
Compensation expense | 2,141 | 2,330 | 2,988 | 3,376 | 2,217 | (8 | ) | (3 | ) | 10,835 | 11,313 | (4 | ) | |||||||||||||||||||||||||
Noncompensation expense | 2,751 | 2,669 | 2,754 | 2,735 | 2,779 | 3 | (1 | ) | 10,909 | 10,537 | 4 | |||||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE | 4,892 | 4,999 | 5,742 | 6,111 | 4,996 | (2 | ) | (2 | ) | 21,744 | 21,850 | - | ||||||||||||||||||||||||||
Income before income tax expense | 1,147 | 3,408 | 4,140 | 4,018 | 3,091 | (66 | ) | (63 | ) | 12,713 | 12,955 | (2 | ) | |||||||||||||||||||||||||
Income tax expense | 289 | 1,168 | 1,302 | 1,408 | 1,086 | (75 | ) | (73 | ) | 4,167 | 4,549 | (8 | ) | |||||||||||||||||||||||||
NET INCOME | $ | 858 | $ | 2,240 | $ | 2,838 | $ | 2,610 | $ | 2,005 | (62 | ) | (57 | ) | $ | 8,546 | $ | 8,406 | 2 | |||||||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||||||||||||||||||||
ROE (c) | 6 | % | 16 | % | 20 | % | 19 | % | 17 | % | 15 | % | 18 | % | ||||||||||||||||||||||||
Overhead ratio (d) | 81 | 61 | 58 | 60 | 65 | 64 | 64 | |||||||||||||||||||||||||||||||
Compensation expense as a percent of total net revenue (e) | 36 | 28 | 30 | 33 | 29 | 32 | 33 | |||||||||||||||||||||||||||||||
REVENUE BY BUSINESS | ||||||||||||||||||||||||||||||||||||||
Advisory | $ | 434 | $ | 322 | $ | 304 | $ | 255 | $ | 465 | 35 | (7 | ) | $ | 1,315 | $ | 1,491 | (12 | ) | |||||||||||||||||||
Equity underwriting | 436 | 333 | 457 | 273 | 265 | 31 | 65 | 1,499 | 1,026 | 46 | ||||||||||||||||||||||||||||
Debt underwriting | 801 | 855 | 956 | 905 | 990 | (6 | ) | (19 | ) | 3,517 | 3,252 | 8 | ||||||||||||||||||||||||||
Total investment banking fees | 1,671 | 1,510 | 1,717 | 1,433 | 1,720 | 11 | (3 | ) | 6,331 | 5,769 | 10 | |||||||||||||||||||||||||||
Treasury Services | 987 | 1,053 | 1,051 | 1,044 | 1,059 | (6 | ) | (7 | ) | 4,135 | 4,249 | (3 | ) | |||||||||||||||||||||||||
Lending | 373 | 351 | 373 | 498 | 382 | 6 | (2 | ) | 1,595 | 1,331 | 20 | |||||||||||||||||||||||||||
Total Banking | 3,031 | 2,914 | 3,141 | 2,975 | 3,161 | 4 | (4 | ) | 12,061 | 11,349 | 6 | |||||||||||||||||||||||||||
Fixed Income Markets (f) | 3,199 | 3,439 | 4,078 | 4,752 | 3,177 | (7 | ) | 1 | 15,468 | 15,412 | - | |||||||||||||||||||||||||||
Equity Markets | 873 | 1,249 | 1,296 | 1,340 | 895 | (30 | ) | (2 | ) | 4,758 | 4,406 | 8 | ||||||||||||||||||||||||||
Securities Services | 1,025 | 996 | 1,087 | 974 | 995 | 3 | 3 | 4,082 | 4,000 | 2 | ||||||||||||||||||||||||||||
Credit Adjustments & Other (a)(g) | (2,108 | ) | (409 | ) | 274 | 99 | (586 | ) | (415 | ) | (260 | ) | (2,144 | ) | (841 | ) | (155 | ) | ||||||||||||||||||||
Total Markets & Investor Services | 2,989 | 5,275 | 6,735 | 7,165 | 4,481 | (43 | ) | (33 | ) | 22,164 | 22,977 | (4 | ) | |||||||||||||||||||||||||
TOTAL NET REVENUE | $ | 6,020 | $ | 8,189 | $ | 9,876 | $ | 10,140 | $ | 7,642 | (26 | ) | (21 | ) | $ | 34,225 | $ | 34,326 | - | |||||||||||||||||||
(a) | Included a $(1.5) billion loss in the fourth quarter of 2013 as a result of implementing a funding valuation adjustment ("FVA") framework for OTC derivatives and structured notes. Also included debit valuation adjustments ("DVA") on structured notes and derivative liabilities measured at fair value. DVA gains/(losses) were $(536) million, $(397) million, $355 million, $126 million and $(567) million for the three months ended December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively, and $(452) million and $(930) million for full year 2013 and 2012, respectively. |
(b) | 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 $681 million, $537 million, $550 million, $529 million and $533 million for the three months ended December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively, and $2.3 billion and $2.0 billion for full year 2013 and 2012, respectively. |
(c) | Return on equity excluding FVA and DVA, a non-GAAP financial measure, was 15%, 17%, 19%, 18% and 20% for the three months ended December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively, and 17% and 19% for full year 2013 and 2012, respectively. For additional information on this measure, see non-GAAP financial measures on page 42. |
(d) | Overhead ratio excluding FVA and DVA, a non-GAAP financial measure, was 61%, 58%, 60%, 61% and 61% for the three months ended December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively, and 60% and 62% for full year 2013 and 2012, respectively. For additional information on this measure, see non-GAAP financial measures on page 42. |
(e) | Compensation expense as a percentage of total net revenue excluding FVA and DVA, a non-GAAP financial measure, was 27%, 27%, 31%, 34% and 27% for the three months ended December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively, and 30% and 32% for full year 2013 and 2012, respectively. For additional information on this measure, see non-GAAP financial measures on page 42. |
(f) | Includes results of the synthetic credit portfolio that was transferred from the Chief Investment Office ("CIO") effective July 2, 2012. |
(g) | Primarily credit portfolio credit valuation adjustments (“CVA”) net of associated hedging activities; DVA on structured notes and derivative liabilities; FVA on OTC derivatives and structured notes; and nonperforming derivative receivable results. |
Page 19
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
CORPORATE & INVESTMENT BANK | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio and headcount data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (period-end) | ||||||||||||||||||||||||||||||||||||||
Assets | $ | 843,577 | $ | 867,474 | $ | 873,527 | $ | 872,259 | $ | 876,107 | (3 | ) | % | (4 | ) | % | $ | 843,577 | $ | 876,107 | (4 | ) | % | |||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||
Loans retained (a) | 95,627 | 104,269 | 106,248 | 112,005 | 109,501 | (8 | ) | (13 | ) | 95,627 | 109,501 | (13 | ) | |||||||||||||||||||||||||
Loans held-for-sale and loans at fair value | 11,913 | 3,687 | 4,564 | 5,506 | 5,749 | 223 | 107 | 11,913 | 5,749 | 107 | ||||||||||||||||||||||||||||
Total loans | 107,540 | 107,956 | 110,812 | 117,511 | 115,250 | - | (7 | ) | 107,540 | 115,250 | (7 | ) | ||||||||||||||||||||||||||
Equity | 56,500 | 56,500 | 56,500 | 56,500 | 47,500 | - | 19 | 56,500 | 47,500 | 19 | ||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (average) | ||||||||||||||||||||||||||||||||||||||
Assets | $ | 849,320 | $ | 838,158 | $ | 878,801 | $ | 870,467 | $ | 863,890 | 1 | (2 | ) | $ | 859,071 | $ | 854,670 | 1 | ||||||||||||||||||||
Trading assets - debt and equity instruments | 308,374 | 300,135 | 336,118 | 342,323 | 333,764 | 3 | (8 | ) | 321,585 | 312,944 | 3 | |||||||||||||||||||||||||||
Trading assets - derivative receivables | 67,487 | 70,814 | 72,036 | 71,111 | 73,519 | (5 | ) | (8 | ) | 70,353 | 74,874 | (6 | ) | |||||||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||
Loans retained (a) | 101,901 | 103,179 | 107,654 | 106,793 | 109,037 | (1 | ) | (7 | ) | 104,864 | 110,100 | (5 | ) | |||||||||||||||||||||||||
Loans held-for-sale and loans at fair value | 4,326 | 5,113 | 5,950 | 5,254 | 5,065 | (15 | ) | (15 | ) | 5,158 | 3,502 | 47 | ||||||||||||||||||||||||||
Total loans | 106,227 | 108,292 | 113,604 | 112,047 | 114,102 | (2 | ) | (7 | ) | 110,022 | 113,602 | (3 | ) | |||||||||||||||||||||||||
Equity | 56,500 | 56,500 | 56,500 | 56,500 | 47,500 | - | 19 | 56,500 | 47,500 | 19 | ||||||||||||||||||||||||||||
Headcount | 52,250 | 52,445 | 51,771 | 51,634 | 52,022 | - | - | 52,250 | 52,022 | - | ||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||||||||||||
Net charge-offs/(recoveries) | $ | (11 | ) | $ | (4 | ) | $ | (82 | ) | $ | 19 | $ | (217 | ) | (175 | ) | 95 | $ | (78 | ) | $ | (284 | ) | 73 | ||||||||||||||
Nonperforming assets: | ||||||||||||||||||||||||||||||||||||||
Nonaccrual loans: | ||||||||||||||||||||||||||||||||||||||
Nonaccrual loans retained (a)(b) | 163 | 176 | 227 | 340 | 535 | (7 | ) | (70 | ) | 163 | 535 | (70 | ) | |||||||||||||||||||||||||
Nonaccrual loans held-for-sale and loans at fair value (c) | 180 | 210 | 293 | 259 | 254 | (14 | ) | (29 | ) | 180 | 254 | (29 | ) | |||||||||||||||||||||||||
Total nonaccrual loans | 343 | 386 | 520 | 599 | 789 | (11 | ) | (57 | ) | 343 | 789 | (57 | ) | |||||||||||||||||||||||||
Derivative receivables | 415 | 431 | 448 | 412 | 239 | (4 | ) | 74 | 415 | 239 | 74 | |||||||||||||||||||||||||||
Assets acquired in loan satisfactions | 80 | 38 | 46 | 55 | 64 | 111 | 25 | 80 | 64 | 25 | ||||||||||||||||||||||||||||
Total nonperforming assets | 838 | 855 | 1,014 | 1,066 | 1,092 | (2 | ) | (23 | ) | 838 | 1,092 | (23 | ) | |||||||||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||||||||||||||||||||
Allowance for loan losses | 1,096 | 1,138 | 1,287 | 1,246 | 1,300 | (4 | ) | (16 | ) | 1,096 | 1,300 | (16 | ) | |||||||||||||||||||||||||
Allowance for lending-related commitments | 525 | 490 | 556 | 521 | 473 | 7 | 11 | 525 | 473 | 11 | ||||||||||||||||||||||||||||
Total allowance for credit losses | 1,621 | 1,628 | 1,843 | 1,767 | 1,773 | - | (9 | ) | 1,621 | 1,773 | (9 | ) | ||||||||||||||||||||||||||
Net charge-off/(recovery) rate (a) | (0.04 | ) | % | (0.02 | ) | % | (0.31 | ) | % | 0.07 | % | (0.79 | ) | % | (0.07 | ) | % | (0.26 | ) | % | ||||||||||||||||||
Allowance for loan losses to period-end loans retained (a) | 1.15 | 1.09 | 1.21 | 1.11 | 1.19 | 1.15 | 1.19 | |||||||||||||||||||||||||||||||
Allowance for loan losses to period-end loans retained, | ||||||||||||||||||||||||||||||||||||||
excluding trade finance and conduits (d) | 2.02 | 2.01 | 2.35 | 2.17 | 2.52 | 2.02 | 2.52 | |||||||||||||||||||||||||||||||
Allowance for loan losses to nonaccrual loans retained (a)(b) | 672 | 647 | 567 | 366 | 243 | 672 | 243 | |||||||||||||||||||||||||||||||
Nonaccrual loans to total period-end loans (c) | 0.32 | 0.36 | 0.47 | 0.51 | 0.68 | 0.32 | 0.68 | |||||||||||||||||||||||||||||||
(a) | Loans retained includes credit portfolio loans, trade finance loans, other held-for-investment loans and overdrafts. |
(b) | Allowance for loan losses of $51 million, $56 million, $70 million, $73 million and $153 million were held against these nonaccrual loans at December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively. |
(c) | In the fourth quarter of 2013, certain loans that resulted from restructurings that were previously classified as performing were reclassified as nonperforming loans. Prior periods were revised to conform with the current presentation. |
(d) | Management uses allowance for loan losses to period-end loans retained, excluding trade finance and conduits, a non-GAAP financial measure, to provide a more meaningful assessment of CIB's allowance coverage ratio. |
Page 20
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
CORPORATE & INVESTMENT BANK | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except rankings data and where otherwise noted) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
BUSINESS METRICS | ||||||||||||||||||||||||||||||||||||||
Assets under custody ("AUC") by asset class (period-end) | ||||||||||||||||||||||||||||||||||||||
(in billions): | ||||||||||||||||||||||||||||||||||||||
Fixed Income | $ | 11,903 | $ | 11,691 | $ | 11,421 | $ | 11,730 | $ | 11,745 | 2 | % | 1 | % | $ | 11,903 | $ | 11,745 | 1 | % | ||||||||||||||||||
Equity | 6,913 | 6,473 | 5,961 | 6,007 | 5,637 | 7 | 23 | 6,913 | 5,637 | 23 | ||||||||||||||||||||||||||||
Other (a) | 1,669 | 1,572 | 1,547 | 1,557 | 1,453 | 6 | 15 | 1,669 | 1,453 | 15 | ||||||||||||||||||||||||||||
Total AUC | $ | 20,485 | $ | 19,736 | $ | 18,929 | $ | 19,294 | $ | 18,835 | 4 | 9 | $ | 20,485 | $ | 18,835 | 9 | |||||||||||||||||||||
Client deposits and other third-party liabilities (average) | 421,615 | 385,952 | 369,108 | 357,262 | 366,544 | 9 | 15 | 383,667 | 355,766 | 8 | ||||||||||||||||||||||||||||
Trade finance loans (period-end) | 30,752 | 34,356 | 36,375 | 38,985 | 35,783 | (10 | ) | (14 | ) | 30,752 | 35,783 | (14 | ) | |||||||||||||||||||||||||
FULL YEAR 2013 | FULL YEAR 2012 | |||||||||||||||||||||||||||||||||||||
MARKET SHARES AND RANKINGS (b) | Market Share | Rankings | Market Share | Rankings | ||||||||||||||||||||||||||||||||||
Global investment banking fees (c) | 8.6 | % | #1 | 7.5 | % | #1 | ||||||||||||||||||||||||||||||||
Debt, equity and equity-related | ||||||||||||||||||||||||||||||||||||||
Global | 7.3 | 1 | 7.2 | 1 | ||||||||||||||||||||||||||||||||||
U.S. | 11.8 | 1 | 11.5 | 1 | ||||||||||||||||||||||||||||||||||
Syndicated loans | ||||||||||||||||||||||||||||||||||||||
Global | 10.0 | 1 | 9.5 | 1 | ||||||||||||||||||||||||||||||||||
U.S. | 17.5 | 1 | 17.6 | 1 | ||||||||||||||||||||||||||||||||||
Long-term debt (d) | ||||||||||||||||||||||||||||||||||||||
Global | 7.2 | 1 | 7.1 | 1 | ||||||||||||||||||||||||||||||||||
U.S. | 11.7 | 1 | 11.6 | 1 | ||||||||||||||||||||||||||||||||||
Equity and equity-related | ||||||||||||||||||||||||||||||||||||||
Global (e) | 8.2 | 2 | 7.8 | 4 | ||||||||||||||||||||||||||||||||||
U.S. | 12.1 | 2 | 10.4 | 5 | ||||||||||||||||||||||||||||||||||
Announced M&A (f) | ||||||||||||||||||||||||||||||||||||||
Global | 23.0 | 2 | 19.9 | 2 | ||||||||||||||||||||||||||||||||||
U.S. | 36.1 | 1 | 24.3 | 2 | ||||||||||||||||||||||||||||||||||
�� |
(a) | Consists of mutual funds, unit investment trusts, currencies, annuities, insurance contracts, options and other contracts. |
(b) | Source: Dealogic. Global investment banking fees reflects the ranking of fees and market share. The remaining rankings reflects transaction volume and market share. Global announced M&A is based on transaction value at announcement; because of joint M&A assignments, M&A market share of all participants will add up to more than 100%. All other transaction volume-based rankings are based on proceeds, with full credit to each book manager/equal if joint. |
(c) | Global investment banking fees rankings exclude money market, short-term debt and shelf deals. |
(d) | Long-term debt rankings 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. |
(e) | Global equity and equity-related ranking includes rights offerings and Chinese A-Shares. |
(f) | Announced M&A reflects the removal of any withdrawn transactions. U.S. announced M&A represents any U.S. involvement ranking. |
Page 21
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
CORPORATE & INVESTMENT BANK | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except where otherwise noted) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
INTERNATIONAL METRICS | 4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | ||||||||||||||||||||||||||||
Total net revenue (a) | ||||||||||||||||||||||||||||||||||||||
Europe/Middle East/Africa | $ | 1,621 | $ | 2,550 | $ | 2,955 | $ | 3,383 | $ | 2,261 | (36 | ) | % | (28 | ) | % | $ | 10,509 | $ | 10,639 | (1 | ) | % | |||||||||||||||
Asia/Pacific | 835 | 1,295 | 1,403 | 1,165 | 939 | (36 | ) | (11 | ) | 4,698 | 4,100 | 15 | ||||||||||||||||||||||||||
Latin America/Caribbean | 268 | 264 | 397 | 400 | 337 | 2 | (20 | ) | 1,329 | 1,524 | (13 | ) | ||||||||||||||||||||||||||
Total international net revenue | 2,724 | 4,109 | 4,755 | 4,948 | 3,537 | (34 | ) | (23 | ) | 16,536 | 16,263 | 2 | ||||||||||||||||||||||||||
North America | 3,296 | 4,080 | 5,121 | 5,192 | 4,105 | (19 | ) | (20 | ) | 17,689 | 18,063 | (2 | ) | |||||||||||||||||||||||||
Total net revenue | $ | 6,020 | $ | 8,189 | $ | 9,876 | $ | 10,140 | $ | 7,642 | (26 | ) | (21 | ) | $ | 34,225 | $ | 34,326 | - | |||||||||||||||||||
Loans (period-end) (a) | ||||||||||||||||||||||||||||||||||||||
Europe/Middle East/Africa | $ | 29,392 | $ | 30,495 | $ | 32,685 | $ | 33,674 | $ | 30,266 | (4 | ) | (3 | ) | $ | 29,392 | $ | 30,266 | (3 | ) | ||||||||||||||||||
Asia/Pacific | 22,151 | 26,653 | 26,616 | 29,908 | 27,193 | (17 | ) | (19 | ) | 22,151 | 27,193 | (19 | ) | |||||||||||||||||||||||||
Latin America/Caribbean | 8,362 | 9,172 | 10,434 | 10,308 | 10,220 | (9 | ) | (18 | ) | 8,362 | 10,220 | (18 | ) | |||||||||||||||||||||||||
Total international loans | 59,905 | 66,320 | 69,735 | 73,890 | 67,679 | (10 | ) | (11 | ) | 59,905 | 67,679 | (11 | ) | |||||||||||||||||||||||||
North America | 35,722 | 37,949 | 36,513 | 38,115 | 41,822 | (6 | ) | (15 | ) | 35,722 | 41,822 | (15 | ) | |||||||||||||||||||||||||
Total loans | $ | 95,627 | $ | 104,269 | $ | 106,248 | $ | 112,005 | $ | 109,501 | (8 | ) | (13 | ) | $ | 95,627 | $ | 109,501 | (13 | ) | ||||||||||||||||||
Client deposits and other third-party liabilities (average) (a) | ||||||||||||||||||||||||||||||||||||||
Europe/Middle East/Africa | $ | 154,153 | $ | 146,685 | $ | 139,801 | $ | 134,339 | $ | 128,620 | 5 | 20 | $ | 143,807 | $ | 127,326 | 13 | |||||||||||||||||||||
Asia/Pacific | 62,074 | 51,895 | 51,666 | 51,996 | 53,309 | 20 | 16 | 54,428 | 51,180 | 6 | ||||||||||||||||||||||||||||
Latin America/Caribbean | 18,180 | 15,760 | 15,012 | 12,180 | 11,766 | 15 | 55 | 15,301 | 11,052 | 38 | ||||||||||||||||||||||||||||
Total international | 234,407 | 214,340 | 206,479 | 198,515 | 193,695 | 9 | 21 | 213,536 | 189,558 | 13 | ||||||||||||||||||||||||||||
North America | 187,208 | 171,612 | 162,629 | 158,747 | 172,849 | 9 | 8 | 170,131 | 166,208 | 2 | ||||||||||||||||||||||||||||
Total client deposits and other third-party liabilities | $ | 421,615 | $ | 385,952 | $ | 369,108 | $ | 357,262 | $ | 366,544 | 9 | 15 | $ | 383,667 | $ | 355,766 | 8 | |||||||||||||||||||||
AUC (period-end) (in billions) (a) | ||||||||||||||||||||||||||||||||||||||
North America | $ | 11,299 | $ | 10,939 | $ | 10,672 | $ | 10,788 | $ | 10,504 | 3 | 8 | $ | 11,299 | $ | 10,504 | 8 | |||||||||||||||||||||
All other regions | 9,186 | 8,797 | 8,257 | 8,506 | 8,331 | 4 | 10 | 9,186 | 8,331 | 10 | ||||||||||||||||||||||||||||
Total AUC | $ | 20,485 | $ | 19,736 | $ | 18,929 | $ | 19,294 | $ | 18,835 | 4 | 9 | $ | 20,485 | $ | 18,835 | 9 | |||||||||||||||||||||
(a) | Total net revenue is based predominantly on the domicile of the client or location of the trading desk, as applicable. Loans outstanding (excluding loans held-for-sale and loans at fair value), client deposits and other third-party liabilities, and AUC are based predominantly on the domicile of the client. |
Page 22
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
COMMERCIAL BANKING | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
INCOME STATEMENT | ||||||||||||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||||||||||||
Lending- and deposit-related fees | $ | 253 | $ | 256 | $ | 265 | $ | 259 | $ | 269 | (1 | ) | % | (6 | ) | % | $ | 1,033 | $ | 1,072 | (4 | ) | % | |||||||||||||||
Asset management, administration and commissions | 26 | 28 | 30 | 32 | 30 | (7 | ) | (13 | ) | 116 | 130 | (11 | ) | |||||||||||||||||||||||||
All other income (a) | 345 | 304 | 256 | 244 | 279 | 13 | 24 | 1,149 | 1,081 | 6 | ||||||||||||||||||||||||||||
Noninterest revenue | 624 | 588 | 551 | 535 | 578 | 6 | 8 | 2,298 | 2,283 | 1 | ||||||||||||||||||||||||||||
Net interest income (b) | 1,223 | 1,137 | 1,177 | 1,138 | 1,167 | 8 | 5 | 4,675 | 4,542 | 3 | ||||||||||||||||||||||||||||
TOTAL NET REVENUE (c) | 1,847 | 1,725 | 1,728 | 1,673 | 1,745 | 7 | 6 | 6,973 | 6,825 | 2 | ||||||||||||||||||||||||||||
Provision for credit losses | 43 | (41 | ) | 44 | 39 | (3 | ) | NM | NM | 85 | 41 | 107 | ||||||||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||||
Compensation expense | 252 | 288 | 286 | 289 | 250 | (13 | ) | 1 | 1,115 | 1,014 | 10 | |||||||||||||||||||||||||||
Noncompensation expense | 396 | 367 | 361 | 348 | 342 | 8 | 16 | 1,472 | 1,348 | 9 | ||||||||||||||||||||||||||||
Amortization of intangibles | 5 | 6 | 5 | 7 | 7 | (17 | ) | (29 | ) | 23 | 27 | (15 | ) | |||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE | 653 | 661 | 652 | 644 | 599 | (1 | ) | 9 | 2,610 | 2,389 | 9 | |||||||||||||||||||||||||||
Income before income tax expense | 1,151 | 1,105 | 1,032 | 990 | 1,149 | 4 | - | 4,278 | 4,395 | (3 | ) | |||||||||||||||||||||||||||
Income tax expense | 458 | 440 | 411 | 394 | 457 | 4 | - | 1,703 | 1,749 | (3 | ) | |||||||||||||||||||||||||||
NET INCOME | $ | 693 | $ | 665 | $ | 621 | $ | 596 | $ | 692 | 4 | - | $ | 2,575 | $ | 2,646 | (3 | ) | ||||||||||||||||||||
Revenue by product: | ||||||||||||||||||||||||||||||||||||||
Lending (b) | $ | 1,009 | $ | 922 | $ | 971 | $ | 924 | $ | 947 | 9 | 7 | $ | 3,826 | $ | 3,675 | 4 | |||||||||||||||||||||
Treasury services | 612 | 605 | 607 | 605 | 614 | 1 | - | 2,429 | 2,428 | - | ||||||||||||||||||||||||||||
Investment banking | 170 | 155 | 132 | 118 | 157 | 10 | 8 | 575 | 545 | 6 | ||||||||||||||||||||||||||||
Other (d) | 56 | 43 | 18 | 26 | 27 | 30 | 107 | 143 | 177 | (19 | ) | |||||||||||||||||||||||||||
Total Commercial Banking revenue | $ | 1,847 | $ | 1,725 | $ | 1,728 | $ | 1,673 | $ | 1,745 | 7 | 6 | $ | 6,973 | $ | 6,825 | 2 | |||||||||||||||||||||
Investment banking revenue, gross (e) | $ | 502 | $ | 448 | $ | 385 | $ | 341 | $ | 443 | 12 | 13 | $ | 1,676 | $ | 1,597 | 5 | |||||||||||||||||||||
Revenue by client segment: | ||||||||||||||||||||||||||||||||||||||
Middle Market Banking (f) | $ | 744 | $ | 745 | $ | 777 | $ | 753 | $ | 752 | - | (1 | ) | $ | 3,019 | $ | 2,971 | 2 | ||||||||||||||||||||
Corporate Client Banking (f) | 488 | 459 | 444 | 433 | 492 | 6 | (1 | ) | 1,824 | 1,819 | - | |||||||||||||||||||||||||||
Commercial Term Lending | 298 | 311 | 315 | 291 | 312 | (4 | ) | (4 | ) | 1,215 | 1,194 | 2 | ||||||||||||||||||||||||||
Real Estate Banking (b) | 206 | 118 | 113 | 112 | 113 | 75 | 82 | 549 | 438 | 25 | ||||||||||||||||||||||||||||
Other | 111 | 92 | 79 | 84 | 76 | 21 | 46 | 366 | 403 | (9 | ) | |||||||||||||||||||||||||||
Total Commercial Banking revenue | $ | 1,847 | $ | 1,725 | $ | 1,728 | $ | 1,673 | $ | 1,745 | 7 | 6 | $ | 6,973 | $ | 6,825 | 2 | |||||||||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||||||||||||||||||||
ROE | 20 | % | 20 | % | 18 | % | 18 | % | 29 | % | 19 | % | 28 | % | ||||||||||||||||||||||||
Overhead ratio | 35 | 38 | 38 | 38 | 34 | 37 | 35 | |||||||||||||||||||||||||||||||
(a) | Includes revenue from investment banking products and commercial card transactions. |
(b) | The fourth quarter of 2013 included one-time proceeds of $98 million from a lending-related workout. |
(c) | 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 $129 million, $95 million, $90 million, $93 million and $73 million for the three months ended December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively, and $407 million and $381 million for full year 2013 and 2012, respectively. |
(d) | Other revenue in the fourth quarter of 2012 included a $49 million year-to-date reclassification of tax equivalent revenue to Corporate/Private Equity. |
(e) | Represents the total revenue from investment banking products sold to CB clients. |
(f) | Effective January 1, 2013, the financial results of financial institution clients were transferred to Corporate Client Banking from Middle Market Banking. Prior periods were revised to conform with this presentation. |
Page 23
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
COMMERCIAL BANKING | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except headcount and ratio data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (period-end) | ||||||||||||||||||||||||||||||||||||||
Total assets | $ | 190,782 | $ | 192,194 | $ | 184,124 | $ | 184,689 | $ | 181,502 | (1 | ) | % | 5 | % | $ | 190,782 | $ | 181,502 | 5 | % | |||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||
Loans retained (a) | 135,750 | 133,090 | 130,487 | 129,534 | 126,996 | 2 | 7 | 135,750 | 126,996 | 7 | ||||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value | 1,388 | 2,071 | 430 | 851 | 1,212 | (33 | ) | 15 | 1,388 | 1,212 | 15 | |||||||||||||||||||||||||||
Total loans | $ | 137,138 | $ | 135,161 | $ | 130,917 | $ | 130,385 | $ | 128,208 | 1 | 7 | $ | 137,138 | $ | 128,208 | 7 | |||||||||||||||||||||
Equity | 13,500 | 13,500 | 13,500 | 13,500 | 9,500 | - | 42 | 13,500 | 9,500 | 42 | ||||||||||||||||||||||||||||
Period-end loans by client segment: | ||||||||||||||||||||||||||||||||||||||
Middle Market Banking (b) | $ | 52,289 | $ | 52,214 | $ | 52,053 | $ | 52,296 | $ | 50,552 | - | 3 | $ | 52,289 | $ | 50,552 | 3 | |||||||||||||||||||||
Corporate Client Banking (b) | 20,925 | 21,425 | 19,933 | 20,962 | 21,707 | (2 | ) | (4 | ) | 20,925 | 21,707 | (4 | ) | |||||||||||||||||||||||||
Commercial Term Lending | 48,925 | 47,612 | 45,865 | 44,374 | 43,512 | 3 | 12 | 48,925 | 43,512 | 12 | ||||||||||||||||||||||||||||
Real Estate Banking | 11,024 | 10,057 | 9,395 | 9,003 | 8,552 | 10 | 29 | 11,024 | 8,552 | 29 | ||||||||||||||||||||||||||||
Other | 3,975 | 3,853 | 3,671 | 3,750 | 3,885 | 3 | 2 | 3,975 | 3,885 | 2 | ||||||||||||||||||||||||||||
Total Commercial Banking loans | $ | 137,138 | $ | 135,161 | $ | 130,917 | $ | 130,385 | $ | 128,208 | 1 | 7 | $ | 137,138 | $ | 128,208 | 7 | |||||||||||||||||||||
SELECTED BALANCE SHEET DATA (average) | ||||||||||||||||||||||||||||||||||||||
Total assets | $ | 189,710 | $ | 185,744 | $ | 184,951 | $ | 182,620 | $ | 171,184 | 2 | 11 | $ | 185,776 | $ | 165,111 | 13 | |||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||
Loans retained (a) | 134,490 | 131,019 | 130,338 | 128,490 | 124,507 | 3 | 8 | 131,100 | 119,218 | 10 | ||||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value | 1,070 | 599 | 1,251 | 800 | 1,491 | 79 | (28 | ) | 930 | 882 | 5 | |||||||||||||||||||||||||||
Total loans | $ | 135,560 | $ | 131,618 | $ | 131,589 | $ | 129,290 | $ | 125,998 | 3 | 8 | $ | 132,030 | $ | 120,100 | 10 | |||||||||||||||||||||
Client deposits and other third-party liabilities | 205,335 | 196,802 | 195,232 | 195,968 | 199,297 | 4 | 3 | 198,356 | 195,912 | 1 | ||||||||||||||||||||||||||||
Equity | 13,500 | 13,500 | 13,500 | 13,500 | 9,500 | - | 42 | 13,500 | 9,500 | 42 | ||||||||||||||||||||||||||||
Average loans by client segment: | ||||||||||||||||||||||||||||||||||||||
Middle Market Banking (b) | $ | 51,730 | $ | 51,379 | $ | 52,205 | $ | 52,013 | $ | 48,953 | 1 | 6 | $ | 51,830 | $ | 47,009 | 10 | |||||||||||||||||||||
Corporate Client Banking (b) | 21,012 | 20,261 | 21,344 | 21,061 | 21,755 | 4 | (3 | ) | 20,918 | 19,572 | 7 | |||||||||||||||||||||||||||
Commercial Term Lending | 48,313 | 46,656 | 45,087 | 43,845 | 42,890 | 4 | 13 | 45,989 | 40,872 | 13 | ||||||||||||||||||||||||||||
Real Estate Banking | 10,675 | 9,675 | 9,277 | 8,677 | 8,450 | 10 | 26 | 9,582 | 8,562 | 12 | ||||||||||||||||||||||||||||
Other | 3,830 | 3,647 | 3,676 | 3,694 | 3,950 | 5 | (3 | ) | 3,711 | 4,085 | (9 | ) | ||||||||||||||||||||||||||
Total Commercial Banking loans | $ | 135,560 | $ | 131,618 | $ | 131,589 | $ | 129,290 | $ | 125,998 | 3 | 8 | $ | 132,030 | $ | 120,100 | 10 | |||||||||||||||||||||
Headcount (c) | 6,848 | 6,761 | 6,660 | 6,511 | 6,117 | 1 | 12 | 6,848 | 6,117 | 12 | ||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||||||||||||
Net charge-offs/(recoveries) | $ | 25 | $ | 16 | $ | 9 | $ | (7 | ) | $ | 50 | 56 | (50 | ) | $ | 43 | $ | 35 | 23 | |||||||||||||||||||
Nonperforming assets: | ||||||||||||||||||||||||||||||||||||||
Nonaccrual loans: | ||||||||||||||||||||||||||||||||||||||
Nonaccrual loans retained (d) | 471 | 558 | 505 | 643 | 644 | (16 | ) | (27 | ) | 471 | 644 | (27 | ) | |||||||||||||||||||||||||
Nonaccrual loans held-for-sale and loans | ||||||||||||||||||||||||||||||||||||||
at fair value | 43 | 8 | 8 | 26 | 29 | 438 | 48 | 43 | 29 | 48 | ||||||||||||||||||||||||||||
Total nonaccrual loans | 514 | 566 | 513 | 669 | 673 | (9 | ) | (24 | ) | 514 | 673 | (24 | ) | |||||||||||||||||||||||||
Assets acquired in loan satisfactions | 15 | 19 | 30 | 12 | 14 | (21 | ) | 7 | 15 | 14 | 7 | |||||||||||||||||||||||||||
Total nonperforming assets | 529 | 585 | 543 | 681 | 687 | (10 | ) | (23 | ) | 529 | 687 | (23 | ) | |||||||||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||||||||||||||||||||
Allowance for loan losses | 2,669 | 2,647 | 2,691 | 2,656 | 2,610 | 1 | 2 | 2,669 | 2,610 | 2 | ||||||||||||||||||||||||||||
Allowance for lending-related commitments | 142 | 171 | 183 | 183 | 183 | (17 | ) | (22 | ) | 142 | 183 | (22 | ) | |||||||||||||||||||||||||
Total allowance for credit losses | 2,811 | 2,818 | 2,874 | 2,839 | 2,793 | - | 1 | 2,811 | 2,793 | 1 | ||||||||||||||||||||||||||||
Net charge-off/(recovery) rate (e) | 0.07 | % | 0.05 | % | 0.03 | % | (0.02 | ) | % | 0.16 | % | 0.03 | % | 0.03 | % | |||||||||||||||||||||||
Allowance for loan losses to period-end loans retained | 1.97 | 1.99 | 2.06 | 2.05 | 2.06 | 1.97 | 2.06 | |||||||||||||||||||||||||||||||
Allowance for loan losses to nonaccrual loans retained (d) | 567 | 474 | 533 | 413 | 405 | 567 | 405 | |||||||||||||||||||||||||||||||
Nonaccrual loans to total period-end loans | 0.37 | 0.42 | 0.39 | 0.51 | 0.52 | 0.37 | 0.52 | |||||||||||||||||||||||||||||||
(a) | Effective January 1, 2013, whole loan financing agreements, previously reported as other assets, were reclassified as loans. For the three months ended December 31, 2013, September 30, 2013, June 30, 2013 and March 31, 2013, the impact on period-end loans was $1.6 billion, $1.6 billion, $2.1 billion and $1.7 billion, respectively, and the impact on average loans was $1.3 billion, $1.7 billion, $1.8 billion and $1.6 billion, respectively. |
(b) | Effective January 1, 2013, the financial results of financial institution clients were transferred to Corporate Client Banking from Middle Market Banking. Prior periods were revised to conform with this presentation. |
(c) | Effective January 1, 2013, headcount includes transfers from other business segments largely related to operations, technology and other support staff. |
(d) | Allowance for loan losses of $81 million, $102 million, $79 million, $99 million and $107 million was held against nonaccrual loans retained at December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively. |
(e) | Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate. |
Page 24
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
ASSET MANAGEMENT | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio and headcount data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
INCOME STATEMENT | ||||||||||||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||||||||||||
Asset management, administration and commissions | $ | 2,314 | $ | 2,017 | $ | 2,018 | $ | 1,883 | $ | 2,011 | 15 | % | 15 | % | $ | 8,232 | $ | 7,041 | 17 | % | ||||||||||||||||||
All other income | 280 | 168 | 138 | 211 | 190 | 67 | 47 | 797 | 806 | (1 | ) | |||||||||||||||||||||||||||
Noninterest revenue | 2,594 | 2,185 | 2,156 | 2,094 | 2,201 | 19 | 18 | 9,029 | 7,847 | 15 | ||||||||||||||||||||||||||||
Net interest income | 585 | 578 | 569 | 559 | 552 | 1 | 6 | 2,291 | 2,099 | 9 | ||||||||||||||||||||||||||||
TOTAL NET REVENUE | 3,179 | 2,763 | 2,725 | 2,653 | 2,753 | 15 | 15 | 11,320 | 9,946 | 14 | ||||||||||||||||||||||||||||
Provision for credit losses | 21 | — | 23 | 21 | 19 | NM | 11 | 65 | 86 | (24 | ) | |||||||||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||||
Compensation expense | 1,343 | 1,207 | 1,155 | 1,170 | 1,178 | 11 | 14 | 4,875 | 4,405 | 11 | ||||||||||||||||||||||||||||
Noncompensation expense | 828 | 774 | 716 | 684 | 742 | 7 | 12 | 3,002 | 2,608 | 15 | ||||||||||||||||||||||||||||
Amortization of intangibles | 74 | 22 | 21 | 22 | 23 | 236 | 222 | 139 | 91 | 53 | ||||||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE | 2,245 | 2,003 | 1,892 | 1,876 | 1,943 | 12 | 16 | 8,016 | 7,104 | 13 | ||||||||||||||||||||||||||||
Income before income tax expense | 913 | 760 | 810 | 756 | 791 | 20 | 15 | 3,239 | 2,756 | 18 | ||||||||||||||||||||||||||||
Income tax expense | 345 | 284 | 310 | 269 | 308 | 21 | 12 | 1,208 | 1,053 | 15 | ||||||||||||||||||||||||||||
NET INCOME | $ | 568 | $ | 476 | $ | 500 | $ | 487 | $ | 483 | 19 | 18 | $ | 2,031 | $ | 1,703 | 19 | |||||||||||||||||||||
REVENUE BY CLIENT SEGMENT | ||||||||||||||||||||||||||||||||||||||
Private Banking | $ | 1,603 | $ | 1,488 | $ | 1,483 | $ | 1,446 | $ | 1,441 | 8 | 11 | $ | 6,020 | $ | 5,426 | 11 | |||||||||||||||||||||
Institutional | 806 | 553 | 588 | 589 | 729 | 46 | 11 | 2,536 | 2,386 | 6 | ||||||||||||||||||||||||||||
Retail | 770 | 722 | 654 | 618 | 583 | 7 | 32 | 2,764 | 2,134 | 30 | ||||||||||||||||||||||||||||
TOTAL NET REVENUE | $ | 3,179 | $ | 2,763 | $ | 2,725 | $ | 2,653 | $ | 2,753 | 15 | 15 | $ | 11,320 | $ | 9,946 | 14 | |||||||||||||||||||||
d | ||||||||||||||||||||||||||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||||||||||||||||||||
ROE | 25 | % | 21 | % | 22 | % | 22 | % | 27 | % | 23 | % | 24 | % | ||||||||||||||||||||||||
Overhead ratio | 71 | 72 | 69 | 71 | 71 | 71 | 71 | |||||||||||||||||||||||||||||||
Pretax margin ratio | 29 | 28 | 30 | 29 | 29 | 29 | 28 | |||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (period-end) | ||||||||||||||||||||||||||||||||||||||
Total assets | $ | 122,414 | $ | 117,475 | $ | 115,157 | $ | 109,734 | $ | 108,999 | 4 | 12 | $ | 122,414 | $ | 108,999 | 12 | |||||||||||||||||||||
Loans (a) | 95,445 | 90,538 | 86,043 | 81,403 | 80,216 | 5 | 19 | 95,445 | 80,216 | 19 | ||||||||||||||||||||||||||||
Deposits | 146,183 | 139,553 | 137,289 | 139,679 | 144,579 | 5 | 1 | 146,183 | 144,579 | 1 | ||||||||||||||||||||||||||||
Equity | 9,000 | 9,000 | 9,000 | 9,000 | 7,000 | - | 29 | 9,000 | 7,000 | 29 | ||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (average) | ||||||||||||||||||||||||||||||||||||||
Total assets | $ | 119,041 | $ | 114,275 | $ | 111,431 | $ | 107,911 | $ | 104,232 | 4 | 14 | $ | 113,198 | $ | 97,447 | 16 | |||||||||||||||||||||
Loans | 92,712 | 87,770 | 83,621 | 80,002 | 76,528 | 6 | 21 | 86,066 | 68,719 | 25 | ||||||||||||||||||||||||||||
Deposits | 144,027 | 138,742 | 136,577 | 139,441 | 133,693 | 4 | 8 | 139,707 | 129,208 | 8 | ||||||||||||||||||||||||||||
Equity | 9,000 | 9,000 | 9,000 | 9,000 | 7,000 | - | 29 | 9,000 | 7,000 | 29 | ||||||||||||||||||||||||||||
Headcount | 20,048 | 19,928 | 19,026 | 18,604 | 18,465 | 1 | 9 | 20,048 | 18,465 | 9 | ||||||||||||||||||||||||||||
(a) | Included $18.9 billion, $17.5 billion, $14.8 billion, $12.7 billion and $10.9 billion of prime mortgage loans reported in the Consumer, excluding credit card, loan portfolio, at December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively. For the same periods, excluded $3.7 billion, $4.0 billion, $4.8 billion, $5.6 billion and $6.7 billion of prime mortgage loans reported in the CIO portfolio within the Corporate/Private Equity segment, respectively. |
Page 25
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
ASSET MANAGEMENT | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio data and where otherwise noted) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
BUSINESS METRICS | ||||||||||||||||||||||||||||||||||||||
Number of client advisors | 2,962 | 2,995 | 2,804 | 2,797 | 2,821 | (1 | ) | % | 5 | % | 2,962 | 2,821 | 5 | % | ||||||||||||||||||||||||
% of customer assets in 4 & 5 Star Funds (a) | 49 | % | 55 | % | 52 | % | 51 | % | 47 | % | 49 | % | 47 | % | ||||||||||||||||||||||||
% of AUM in 1st and 2nd quartiles: (b) | ||||||||||||||||||||||||||||||||||||||
1 year | 68 | 73 | 73 | 70 | 67 | 68 | 67 | |||||||||||||||||||||||||||||||
3 years | 68 | 74 | 77 | 74 | 74 | 68 | 74 | |||||||||||||||||||||||||||||||
5 years | 69 | 74 | 76 | 75 | 76 | 69 | 76 | |||||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||||||||||||
Net charge-offs | $ | 4 | $ | 9 | $ | 4 | $ | 23 | $ | 3 | (56 | ) | 33 | $ | 40 | $ | 64 | (38 | ) | |||||||||||||||||||
Nonaccrual loans | 167 | 202 | 244 | 259 | 250 | (17 | ) | (33 | ) | 167 | 250 | (33 | ) | |||||||||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||||||||||||||||||||
Allowance for loan losses | 278 | 260 | 270 | 249 | 248 | 7 | 12 | 278 | 248 | 12 | ||||||||||||||||||||||||||||
Allowance for lending-related commitments | 5 | 7 | 6 | 5 | 5 | (29 | ) | - | 5 | 5 | - | |||||||||||||||||||||||||||
Total allowance for credit losses | 283 | 267 | 276 | 254 | 253 | 6 | 12 | 283 | 253 | 12 | ||||||||||||||||||||||||||||
Net charge-off rate | 0.02 | % | 0.04 | % | 0.02 | % | 0.12 | % | 0.02 | % | 0.05 | % | 0.09 | % | ||||||||||||||||||||||||
Allowance for loan losses to period-end loans | 0.29 | 0.29 | 0.31 | 0.31 | 0.31 | 0.29 | 0.31 | |||||||||||||||||||||||||||||||
Allowance for loan losses to nonaccrual loans | 166 | 129 | 111 | 96 | 99 | 166 | 99 | |||||||||||||||||||||||||||||||
Nonaccrual loans to period-end loans | 0.17 | 0.22 | 0.28 | 0.32 | 0.31 | 0.17 | 0.31 | |||||||||||||||||||||||||||||||
AM FIRMWIDE DISCLOSURES (c) | ||||||||||||||||||||||||||||||||||||||
Total net revenue | $ | 3,753 | $ | 3,300 | $ | 3,226 | $ | 3,112 | $ | 3,164 | 14 | 19 | $ | 13,391 | $ | 11,443 | 17 | |||||||||||||||||||||
Client assets (in billions) (d) | 2,534 | 2,423 | 2,323 | 2,332 | 2,244 | 5 | 13 | 2,534 | 2,244 | 13 | ||||||||||||||||||||||||||||
Number of client advisors | 6,006 | 6,023 | 5,828 | 5,795 | 5,784 | - | 4 | 6,006 | 5,784 | 4 | ||||||||||||||||||||||||||||
(a) | Derived from Morningstar for the U.S., the U.K., Luxembourg, France, Hong Kong and Taiwan; and Nomura for Japan. |
(b) | 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. |
(c) | Includes Chase Wealth Management ("CWM"), which is a unit of Consumer & Business Banking. The firmwide metrics are presented in order to capture AM's partnership with CWM. Management reviews firmwide metrics in assessing the financial performance of AM's client asset management business. |
(d) | Excludes CWM client assets that are managed by AM. |
Page 26
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||
ASSET MANAGEMENT | ||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||
(in billions) | ||||||||||||||||||||||||||
Dec 31, 2013 | ||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||
Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Dec 31, | ||||||||||||||||||||
CLIENT ASSETS | 2013 | 2013 | 2013 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Assets by asset class | ||||||||||||||||||||||||||
Liquidity | $ | 451 | $ | 446 | $ | 431 | $ | 454 | $ | 458 | 1 | % | (2 | ) | % | |||||||||||
Fixed income | 330 | 328 | 325 | 331 | 330 | 1 | - | |||||||||||||||||||
Equity | 370 | 346 | 316 | 312 | 277 | 7 | 34 | |||||||||||||||||||
Multi-asset and alternatives | 447 | 420 | 398 | 386 | 361 | 6 | 24 | |||||||||||||||||||
TOTAL ASSETS UNDER MANAGEMENT | 1,598 | 1,540 | 1,470 | 1,483 | 1,426 | 4 | 12 | |||||||||||||||||||
Custody/brokerage/administration/deposits | 745 | 706 | 687 | 688 | 669 | 6 | 11 | |||||||||||||||||||
TOTAL CLIENT ASSETS | $ | 2,343 | $ | 2,246 | $ | 2,157 | $ | 2,171 | $ | 2,095 | 4 | 12 | ||||||||||||||
MEMO: | ||||||||||||||||||||||||||
Alternatives client assets (a) | $ | 158 | $ | 151 | $ | 147 | $ | 144 | $ | 142 | 5 | 11 | ||||||||||||||
Assets by client segment | ||||||||||||||||||||||||||
Private Banking | $ | 361 | $ | 352 | $ | 340 | $ | 339 | $ | 318 | 3 | 14 | ||||||||||||||
Institutional | 777 | 752 | 723 | 749 | 741 | 3 | 5 | |||||||||||||||||||
Retail | 460 | 436 | 407 | 395 | 367 | 6 | 25 | |||||||||||||||||||
TOTAL ASSETS UNDER MANAGEMENT | $ | 1,598 | $ | 1,540 | $ | 1,470 | $ | 1,483 | $ | 1,426 | 4 | 12 | ||||||||||||||
Private Banking | $ | 977 | $ | 935 | $ | 910 | $ | 909 | $ | 877 | 4 | 11 | ||||||||||||||
Institutional | 777 | 752 | 723 | 749 | 741 | 3 | 5 | |||||||||||||||||||
Retail | 589 | 559 | 524 | 513 | 477 | 5 | 23 | |||||||||||||||||||
TOTAL CLIENT ASSETS | $ | 2,343 | $ | 2,246 | $ | 2,157 | $ | 2,171 | $ | 2,095 | 4 | 12 | ||||||||||||||
Mutual fund assets by asset class | ||||||||||||||||||||||||||
Liquidity | $ | 392 | $ | 396 | $ | 379 | $ | 400 | $ | 410 | (1 | ) | (4 | ) | ||||||||||||
Fixed income | 137 | 140 | 139 | 142 | 136 | (2 | ) | 1 | ||||||||||||||||||
Equity | 198 | 183 | 164 | 159 | 139 | 8 | 42 | |||||||||||||||||||
Multi-asset and alternatives | 77 | 68 | 60 | 53 | 46 | 13 | 67 | |||||||||||||||||||
TOTAL MUTUAL FUND ASSETS | $ | 804 | $ | 787 | $ | 742 | $ | 754 | $ | 731 | 2 | 10 | ||||||||||||||
(a) | Represents assets under management, as well as client balances in brokerage accounts. |
Page 27
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||
ASSET MANAGEMENT | ||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||
(in billions) | ||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 2013 | 2012 | ||||||||||||||||||||||||||||
CLIENT ASSETS (continued) | ||||||||||||||||||||||||||||||||||
Assets under management rollforward | ||||||||||||||||||||||||||||||||||
Beginning balance | $ | 1,540 | $ | 1,470 | $ | 1,483 | $ | 1,426 | $ | 1,381 | $ | 1,426 | $ | 1,336 | ||||||||||||||||||||
Net asset flows: | ||||||||||||||||||||||||||||||||||
Liquidity | 7 | 13 | (22 | ) | (2 | ) | 22 | (4 | ) | (41 | ) | |||||||||||||||||||||||
Fixed income | 1 | 1 | 4 | 2 | — | 8 | 27 | |||||||||||||||||||||||||||
Equity | 5 | 7 | 7 | 15 | 4 | 34 | 8 | |||||||||||||||||||||||||||
Multi-asset and alternatives | 10 | 11 | 14 | 13 | 6 | 48 | 23 | |||||||||||||||||||||||||||
Market/performance/other impacts | 35 | 38 | (16 | ) | 29 | 13 | 86 | 73 | ||||||||||||||||||||||||||
Ending balance | $ | 1,598 | $ | 1,540 | $ | 1,470 | $ | 1,483 | $ | 1,426 | $ | 1,598 | $ | 1,426 | ||||||||||||||||||||
Client assets rollforward | ||||||||||||||||||||||||||||||||||
Beginning balance | $ | 2,246 | $ | 2,157 | $ | 2,171 | $ | 2,095 | $ | 2,031 | $ | 2,095 | $ | 1,921 | ||||||||||||||||||||
Net asset flows | 25 | 39 | (4 | ) | 20 | 48 | 80 | 60 | ||||||||||||||||||||||||||
Market/performance/other impacts | 72 | 50 | (10 | ) | 56 | 16 | 168 | 114 | ||||||||||||||||||||||||||
Ending balance | $ | 2,343 | $ | 2,246 | $ | 2,157 | $ | 2,171 | $ | 2,095 | $ | 2,343 | $ | 2,095 | ||||||||||||||||||||
Page 28
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
ASSET MANAGEMENT | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in billions, except where otherwise noted) | ||||||||||||||||||||||||||||||||||||||
�� | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
INTERNATIONAL METRICS | 4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | ||||||||||||||||||||||||||||
Total net revenue: (in millions) (a) | ||||||||||||||||||||||||||||||||||||||
Europe/Middle East/Africa | $ | 515 | $ | 465 | $ | 435 | $ | 437 | $ | 471 | 11 | % | 9 | % | $ | 1,852 | $ | 1,641 | 13 | % | ||||||||||||||||||
Asia/Pacific | 312 | 295 | 291 | 277 | 256 | 6 | 22 | 1,175 | 967 | 22 | ||||||||||||||||||||||||||||
Latin America/Caribbean | 229 | 202 | 230 | 206 | 240 | 13 | (5 | ) | 867 | 772 | 12 | |||||||||||||||||||||||||||
North America | 2,123 | 1,801 | 1,769 | 1,733 | 1,786 | 18 | 19 | 7,426 | 6,566 | 13 | ||||||||||||||||||||||||||||
Total net revenue | $ | 3,179 | $ | 2,763 | $ | 2,725 | $ | 2,653 | $ | 2,753 | 15 | 15 | $ | 11,320 | $ | 9,946 | 14 | |||||||||||||||||||||
Assets under management: | ||||||||||||||||||||||||||||||||||||||
Europe/Middle East/Africa | $ | 305 | $ | 271 | $ | 261 | $ | 270 | $ | 258 | 13 | 18 | $ | 305 | $ | 258 | 18 | |||||||||||||||||||||
Asia/Pacific | 132 | 132 | 124 | 123 | 114 | - | 16 | 132 | 114 | 16 | ||||||||||||||||||||||||||||
Latin America/Caribbean | 47 | 42 | 40 | 39 | 45 | 12 | 4 | 47 | 45 | 4 | ||||||||||||||||||||||||||||
North America | 1,114 | 1,095 | 1,045 | 1,051 | 1,009 | 2 | 10 | 1,114 | 1,009 | 10 | ||||||||||||||||||||||||||||
Total assets under management | $ | 1,598 | $ | 1,540 | $ | 1,470 | $ | 1,483 | $ | 1,426 | 4 | 12 | $ | 1,598 | $ | 1,426 | 12 | |||||||||||||||||||||
Client assets: | ||||||||||||||||||||||||||||||||||||||
Europe/Middle East/Africa | $ | 367 | $ | 330 | $ | 317 | $ | 328 | $ | 317 | 11 | 16 | $ | 367 | $ | 317 | 16 | |||||||||||||||||||||
Asia/Pacific | 180 | 179 | 171 | 170 | 160 | 1 | 13 | 180 | 160 | 13 | ||||||||||||||||||||||||||||
Latin America/Caribbean | 117 | 109 | 105 | 106 | 110 | 7 | 6 | 117 | 110 | 6 | ||||||||||||||||||||||||||||
North America | 1,679 | 1,628 | 1,564 | 1,567 | 1,508 | 3 | 11 | 1,679 | 1,508 | 11 | ||||||||||||||||||||||||||||
Total client assets | $ | 2,343 | $ | 2,246 | $ | 2,157 | $ | 2,171 | $ | 2,095 | 4 | 12 | $ | 2,343 | $ | 2,095 | 12 | |||||||||||||||||||||
(a) | Regional revenue is based on the domicile of the client. |
Page 29
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CORPORATE/PRIVATE EQUITY | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||||||||||||||||||
(in millions, except headcount data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
INCOME STATEMENT (a) | ||||||||||||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||||||||||||
Principal transactions | $ | 54 | $ | 378 | $ | 393 | $ | (262 | ) | $ | 159 | (86 | ) | % | (66 | ) | % | $ | 563 | $ | (4,268 | ) | (e)(g) | NM | % | |||||||||||||
Securities gains | 7 | 26 | 124 | 509 | 103 | (73 | ) | (93 | ) | 666 | 2,024 | (67 | ) | |||||||||||||||||||||||||
All other income | 1,894 | (d) | 83 | (227 | ) | 114 | 142 | NM | NM | 1,864 | 2,434 | (f)(h) | (23 | ) | ||||||||||||||||||||||||
Noninterest revenue | 1,955 | 487 | 290 | 361 | 404 | 301 | 384 | 3,093 | 190 | NM | ||||||||||||||||||||||||||||
Net interest income | (203 | ) | (366 | ) | (676 | ) | (594 | ) | (528 | ) | 45 | 62 | (1,839 | ) | (1,281 | ) | (44 | ) | ||||||||||||||||||||
TOTAL NET REVENUE (b) | 1,752 | 121 | (386 | ) | (233 | ) | (124 | ) | NM | NM | 1,254 | (1,091 | ) | NM | ||||||||||||||||||||||||
Provision for credit losses | (13 | ) | (17 | ) | 5 | (3 | ) | (6 | ) | 24 | (117 | ) | (28 | ) | (37 | ) | 24 | |||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||||
Compensation expense | 551 | 551 | 624 | 573 | 545 | - | 1 | 2,299 | 2,221 | 4 | ||||||||||||||||||||||||||||
Noncompensation expense (c) | 1,331 | 9,890 | 1,345 | 642 | 1,151 | (87 | ) | 16 | 13,208 | 6,972 | 89 | |||||||||||||||||||||||||||
Subtotal | 1,882 | 10,441 | 1,969 | 1,215 | 1,696 | (82 | ) | 11 | 15,507 | 9,193 | 69 | |||||||||||||||||||||||||||
Net expense allocated to other businesses | (1,441 | ) | (1,345 | ) | (1,253 | ) | (1,213 | ) | (1,176 | ) | (7 | ) | (23 | ) | (5,252 | ) | (4,634 | ) | (13 | ) | ||||||||||||||||||
TOTAL NONINTEREST EXPENSE | 441 | 9,096 | 716 | 2 | 520 | (95 | ) | (15 | ) | 10,255 | 4,559 | 125 | ||||||||||||||||||||||||||
Income/(loss) before income tax expense/(benefit) | 1,324 | (8,958 | ) | (1,107 | ) | (232 | ) | (638 | ) | NM | NM | (8,973 | ) | (5,613 | ) | (60 | ) | |||||||||||||||||||||
Income tax expense/(benefit) | 537 | (2,495 | ) | (555 | ) | (482 | ) | (1,161 | ) | NM | NM | (2,995 | ) | (3,591 | ) | 17 | ||||||||||||||||||||||
NET INCOME/(LOSS) | $ | 787 | $ | (6,463 | ) | $ | (552 | ) | $ | 250 | $ | 523 | NM | 50 | $ | (5,978 | ) | $ | (2,022 | ) | (196 | ) | ||||||||||||||||
MEMO: | ||||||||||||||||||||||||||||||||||||||
TOTAL NET REVENUE | ||||||||||||||||||||||||||||||||||||||
Private Equity | $ | 57 | $ | 398 | $ | 410 | $ | (276 | ) | $ | 72 | (86 | ) | (21 | ) | $ | 589 | $ | 601 | (2 | ) | |||||||||||||||||
Treasury and Chief Investment Office ("CIO") | (25 | ) | (232 | ) | (648 | ) | 113 | (110 | ) | 89 | 77 | (792 | ) | (3,064 | ) | 74 | ||||||||||||||||||||||
Other Corporate (a) | 1,720 | (45 | ) | (148 | ) | (70 | ) | (86 | ) | NM | NM | 1,457 | 1,372 | 6 | ||||||||||||||||||||||||
TOTAL NET REVENUE | $ | 1,752 | $ | 121 | $ | (386 | ) | $ | (233 | ) | $ | (124 | ) | NM | NM | $ | 1,254 | $ | (1,091 | ) | NM | |||||||||||||||||
NET INCOME/(LOSS) | ||||||||||||||||||||||||||||||||||||||
Private Equity | $ | 13 | $ | 242 | $ | 212 | $ | (182 | ) | $ | 50 | (95 | ) | (74 | ) | $ | 285 | $ | 292 | (2 | ) | |||||||||||||||||
Treasury and CIO | (78 | ) | (193 | ) | (429 | ) | 24 | (157 | ) | 60 | 50 | (676 | ) | (2,093 | ) | 68 | ||||||||||||||||||||||
Other Corporate (a) | 852 | (6,512 | ) | (335 | ) | 408 | 630 | NM | 35 | (5,587 | ) | (221 | ) | NM | ||||||||||||||||||||||||
TOTAL NET INCOME/(LOSS) | $ | 787 | $ | (6,463 | ) | $ | (552 | ) | $ | 250 | $ | 523 | NM | 50 | $ | (5,978 | ) | $ | (2,022 | ) | (196 | ) | ||||||||||||||||
TOTAL ASSETS (period-end) (a) | $ | 805,987 | $ | 835,000 | $ | 806,044 | $ | 763,765 | $ | 725,251 | (3 | ) | 11 | $ | 805,987 | $ | 725,251 | 11 | ||||||||||||||||||||
Headcount (a) | 20,717 | 19,843 | 18,720 | 18,026 | 17,758 | 4 | 17 | 20,717 | 17,758 | 17 | ||||||||||||||||||||||||||||
(a) | In the second quarter of 2013, the 2012 data for certain income statement (including net expense allocated to other businesses) and balance sheet line items, as well as headcount were revised to reflect the transfer of certain functions and staff from Corporate/Private Equity to CCB, effective January 1, 2013. For further information on this transfer, see CCB on page 10. |
(b) | Included tax-equivalent adjustments, predominantly due to tax-exempt income from municipal bond investments of $144 million, $128 million, $105 million, $103 million and $117 million for the three months ended December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively, and $480 million and $443 million for full year 2013 and 2012, respectively. |
(c) | Included legal expense of $0.4 billion, $9.2 billion, $0.6 billion and $0.2 billion for the three months ended December 31, 2013, September 30, 2013, June 30, 2013 and December 31, 2012, respectively (legal expense for the three months ended March 31, 2013 was not material), and $10.2 billion and $3.7 billion for full year 2013 and 2012, respectively. |
(d) | Included a $1.3 billion gain from the sale of Visa shares and a $493 million gain from the sale of One Chase Manhattan Plaza. |
(e) | During the third quarter of 2012, CIO effectively closed out the index credit derivative positions that were retained following the transfer of the synthetic credit portfolio to the CIB on July 2, 2012. Principal transactions revenue included losses in CIO on this portfolio of $449 million for the three months ended September 30, 2012. Also included losses in CIO of $4.4 billion and $1.4 billion on the synthetic credit portfolio for the three months ended June 30, 2012 and March 31, 2012, respectively. Results of the portfolio that was transferred to CIB are not included herein. |
(f) | Included an extinguishment gain of $888 million related to the redemption of trust preferred securities ("TruPS") in the third quarter of 2012; the gain related to adjustments applied to the cost basis of these securities during the period they were in a qualifying hedge accounting relationship. |
(g) | Included a gain of $545 million that was recorded in the second quarter of 2012, reflecting the recovery on a Bear Stearns-related subordinated loan. |
(h) | Included a $1.1 billion benefit that was recorded in the first quarter of 2012 from the Washington Mutual bankruptcy settlement. |
Page 30
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
CORPORATE/PRIVATE EQUITY | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION | ||||||||||||||||||||||||||||||||||||||
TREASURY and CHIEF INVESTMENT OFFICE ("CIO") | ||||||||||||||||||||||||||||||||||||||
Securities gains | $ | 7 | $ | 26 | $ | 123 | $ | 503 | $ | 103 | (73 | ) | % | (93 | ) | % | $ | 659 | $ | 2,028 | (68 | ) | % | |||||||||||||||
Investment securities portfolio (average) (a) | 344,949 | 348,622 | 355,920 | 365,639 | 362,867 | (1 | ) | (5 | ) | 353,712 | 358,029 | (1 | ) | |||||||||||||||||||||||||
Investment securities portfolio (period-end) (b) | 347,562 | 350,527 | 349,044 | 360,230 | 365,421 | (1 | ) | (5 | ) | 347,562 | 365,421 | (5 | ) | |||||||||||||||||||||||||
Mortgage loans (average) | 3,980 | 4,562 | 5,556 | 6,516 | 7,882 | (13 | ) | (50 | ) | 5,145 | 10,241 | (50 | ) | |||||||||||||||||||||||||
Mortgage loans (period-end) | 3,779 | 4,161 | 4,955 | 5,914 | 7,037 | (9 | ) | (46 | ) | 3,779 | 7,037 | (46 | ) | |||||||||||||||||||||||||
PRIVATE EQUITY | ||||||||||||||||||||||||||||||||||||||
Private equity gains/(losses) | ||||||||||||||||||||||||||||||||||||||
Direct investments | ||||||||||||||||||||||||||||||||||||||
Realized gains/(losses) | $ | (116 | ) | $ | (142 | ) | $ | 40 | $ | 48 | $ | (8 | ) | 18 | NM | $ | (170 | ) | $ | 17 | NM | |||||||||||||||||
Unrealized gains/(losses) (c) | 199 | 487 | 375 | (327 | ) | 11 | (59 | ) | NM | 734 | 639 | 15 | ||||||||||||||||||||||||||
Total direct investments | 83 | 345 | 415 | (279 | ) | 3 | (76 | ) | NM | 564 | 656 | (14 | ) | |||||||||||||||||||||||||
Third-party fund investments | 10 | 83 | 24 | 20 | 87 | (88 | ) | (89 | ) | 137 | 134 | 2 | ||||||||||||||||||||||||||
Total private equity gains/(losses) (d) | $ | 93 | $ | 428 | $ | 439 | $ | (259 | ) | $ | 90 | (78 | ) | 3 | $ | 701 | $ | 790 | (11 | ) | ||||||||||||||||||
Private equity portfolio information | ||||||||||||||||||||||||||||||||||||||
Direct investments | ||||||||||||||||||||||||||||||||||||||
Publicly-held securities | ||||||||||||||||||||||||||||||||||||||
Carrying value | $ | 1,035 | $ | 538 | $ | 550 | $ | 578 | $ | 578 | 92 | 79 | $ | 1,035 | $ | 578 | 79 | |||||||||||||||||||||
Cost | 672 | 345 | 346 | 350 | 350 | 95 | 92 | 672 | 350 | 92 | ||||||||||||||||||||||||||||
Quoted public value | 1,077 | 538 | 550 | 578 | 578 | 100 | 86 | 1,077 | 578 | 86 | ||||||||||||||||||||||||||||
Privately-held direct securities | ||||||||||||||||||||||||||||||||||||||
Carrying value | 5,065 | 6,266 | 5,448 | 5,088 | 5,379 | (19 | ) | (6 | ) | 5,065 | 5,379 | (6 | ) | |||||||||||||||||||||||||
Cost | 6,022 | 7,096 | 6,831 | 6,816 | 6,584 | (15 | ) | (9 | ) | 6,022 | 6,584 | (9 | ) | |||||||||||||||||||||||||
Third-party fund investments (e) | ||||||||||||||||||||||||||||||||||||||
Carrying value | 1,768 | 1,905 | 1,958 | 2,047 | 2,117 | (7 | ) | (16 | ) | 1,768 | 2,117 | (16 | ) | |||||||||||||||||||||||||
Cost | 1,797 | 1,910 | 1,968 | 1,967 | 1,963 | (6 | ) | (8 | ) | 1,797 | 1,963 | (8 | ) | |||||||||||||||||||||||||
Total private equity portfolio | ||||||||||||||||||||||||||||||||||||||
Carrying value | $ | 7,868 | $ | 8,709 | $ | 7,956 | $ | 7,713 | $ | 8,074 | (10 | ) | (3 | ) | $ | 7,868 | $ | 8,074 | (3 | ) | ||||||||||||||||||
Cost | 8,491 | 9,351 | 9,145 | 9,133 | 8,897 | (9 | ) | (5 | ) | 8,491 | 8,897 | (5 | ) | |||||||||||||||||||||||||
(a) | Average investment securities included held-to-maturity balances of $13.8 billion and $1.9 billion for the three months ended December 31, 2013 and September 30, 2013, respectively. Held-to-maturity balances for the other periods were not material. |
(b) | Period-end investment securities included held-to-maturity balances of $24.0 billion and $4.5 billion at December 31, 2013 and September 30, 2013, respectively. Held-to-maturity balances for the other periods were not material. |
(c) | Unrealized gains/(losses) contain reversals of unrealized gains and losses that were recognized in prior periods and have now been realized. |
(d) | Included in principal transactions revenue in the Consolidated Statements of Income. |
(e) | Unfunded commitments to third-party private equity funds were $215 million, $232 million, $251 million, $323 million and $370 million at December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively. |
Page 31
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||
CREDIT-RELATED INFORMATION | ||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Dec 31, 2013 | ||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||
Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Dec 31, | ||||||||||||||||||||
2013 | 2013 | 2013 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
CREDIT EXPOSURE | ||||||||||||||||||||||||||
Consumer, excluding credit card loans (a) | ||||||||||||||||||||||||||
Loans retained, excluding PCI loans | ||||||||||||||||||||||||||
Home equity | $ | 57,863 | $ | 59,825 | $ | 62,326 | $ | 64,798 | $ | 67,385 | (3 | ) | % | (14 | ) | % | ||||||||||
Prime mortgage, including option ARMs | 87,162 | 85,067 | 79,179 | 77,626 | 76,256 | 2 | 14 | |||||||||||||||||||
Subprime mortgage | 7,104 | 7,376 | 7,703 | 8,003 | 8,255 | (4 | ) | (14 | ) | |||||||||||||||||
Auto | 52,757 | 50,810 | 50,865 | 50,552 | 49,913 | 4 | 6 | |||||||||||||||||||
Business banking | 18,951 | 18,710 | 18,730 | 18,739 | 18,883 | 1 | - | |||||||||||||||||||
Student and other | 11,557 | 11,664 | 11,849 | 11,927 | 12,191 | (1 | ) | (5 | ) | |||||||||||||||||
Total loans retained, excluding PCI loans | 235,394 | 233,452 | 230,652 | 231,645 | 232,883 | 1 | 1 | |||||||||||||||||||
Loans - PCI | ||||||||||||||||||||||||||
Home equity | 18,927 | 19,411 | 19,992 | 20,525 | 20,971 | (2 | ) | (10 | ) | |||||||||||||||||
Prime mortgage | 12,038 | 12,487 | 12,976 | 13,366 | 13,674 | (4 | ) | (12 | ) | |||||||||||||||||
Subprime mortgage | 4,175 | 4,297 | 4,448 | 4,561 | 4,626 | (3 | ) | (10 | ) | |||||||||||||||||
Option ARMs | 17,915 | 18,564 | 19,320 | 19,985 | 20,466 | (3 | ) | (12 | ) | |||||||||||||||||
Total loans - PCI | 53,055 | 54,759 | 56,736 | 58,437 | 59,737 | (3 | ) | (11 | ) | |||||||||||||||||
Total loans retained | 288,449 | 288,211 | 287,388 | 290,082 | 292,620 | - | (1 | ) | ||||||||||||||||||
Loans held-for-sale | 614 | 139 | 708 | — | — | 342 | NM | |||||||||||||||||||
Total consumer, excluding credit card loans | 289,063 | 288,350 | 288,096 | 290,082 | 292,620 | - | (1 | ) | ||||||||||||||||||
Credit card loans | ||||||||||||||||||||||||||
Loans retained (b) | 127,465 | 123,672 | 124,288 | 121,865 | 127,993 | 3 | - | |||||||||||||||||||
Loans held-for-sale | 326 | 310 | — | — | — | 5 | NM | |||||||||||||||||||
Total credit card loans | 127,791 | 123,982 | 124,288 | 121,865 | 127,993 | 3 | - | |||||||||||||||||||
Total consumer loans | 416,854 | 412,332 | 412,384 | 411,947 | 420,613 | 1 | (1 | ) | ||||||||||||||||||
Wholesale loans (c) | ||||||||||||||||||||||||||
Loans retained | 308,263 | 310,588 | 308,208 | 310,582 | 306,222 | (1 | ) | 1 | ||||||||||||||||||
Loans held-for-sale and loans at fair value | 13,301 | 5,759 | 4,994 | 6,357 | 6,961 | 131 | 91 | |||||||||||||||||||
Total wholesale loans | 321,564 | 316,347 | 313,202 | 316,939 | 313,183 | 2 | 3 | |||||||||||||||||||
Total loans | 738,418 | 728,679 | 725,586 | 728,886 | 733,796 | 1 | 1 | |||||||||||||||||||
Derivative receivables | 65,759 | 66,788 | 73,751 | 70,609 | 74,983 | (2 | ) | (12 | ) | |||||||||||||||||
Receivables from customers and other (d) | 26,883 | 24,618 | 23,852 | 30,111 | 23,761 | 9 | 13 | |||||||||||||||||||
Total credit-related assets | 92,642 | 91,406 | 97,603 | 100,720 | 98,744 | 1 | (6 | ) | ||||||||||||||||||
Lending-related commitments | ||||||||||||||||||||||||||
Consumer, excluding credit card | 56,057 | 58,787 | 62,303 | 60,874 | 60,156 | (5 | ) | (7 | ) | |||||||||||||||||
Credit card | 529,383 | 532,251 | 532,359 | 537,455 | 533,018 | (1 | ) | (1 | ) | |||||||||||||||||
Wholesale | 446,232 | 449,067 | 445,472 | 435,281 | 434,814 | (1 | ) | 3 | ||||||||||||||||||
Total lending-related commitments | 1,031,672 | 1,040,105 | 1,040,134 | 1,033,610 | 1,027,988 | (1 | ) | - | ||||||||||||||||||
Total credit exposure | $ | 1,862,732 | $ | 1,860,190 | $ | 1,863,323 | $ | 1,863,216 | $ | 1,860,528 | - | - | ||||||||||||||
Memo: Total by category | ||||||||||||||||||||||||||
Consumer exposure (e) | $ | 1,002,433 | $ | 1,003,499 | $ | 1,007,175 | $ | 1,010,399 | $ | 1,013,900 | - | (1 | ) | |||||||||||||
Wholesale exposures (f) | 860,299 | 856,691 | 856,148 | 852,817 | 846,628 | - | 2 | |||||||||||||||||||
Total credit exposure | $ | 1,862,732 | $ | 1,860,190 | $ | 1,863,323 | $ | 1,863,216 | $ | 1,860,528 | - | - | ||||||||||||||
(a) | Includes loans reported in CCB, and prime mortgage loans reported in the AM business segment and in Corporate/Private Equity. |
(b) | Includes accrued interest and fees net of an allowance for the uncollectible portion of accrued interest and fee income. |
(c) | Includes loans reported in CIB, CB and AM business segments and Corporate/Private Equity. |
(d) | Predominantly includes receivables from customers, which represent margin loans to prime and retail brokerage customers; these are classified in accrued interest and accounts receivable on the Consolidated Balance Sheets. |
(e) | Represents total consumer loans and consumer lending-related commitments. |
(f) | Represents total wholesale loans, wholesale lending-related commitments, derivative receivables and receivables from customers. |
Page 32
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||
CREDIT-RELATED INFORMATION, CONTINUED | ||||||||||||||||||||||||||
(in millions, except ratio data) | ||||||||||||||||||||||||||
Dec 31, 2013 | ||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||
Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Dec 31, | ||||||||||||||||||||
2013 | 2013 | 2013 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
NONPERFORMING ASSETS (a) | ||||||||||||||||||||||||||
Consumer, excluding credit card loans | ||||||||||||||||||||||||||
Home equity | $ | 2,808 | $ | 2,848 | $ | 2,986 | $ | 3,104 | $ | 3,208 | (1 | ) | % | (12 | ) | % | ||||||||||
Prime mortgage, including option ARMs | 2,666 | 3,124 | 3,330 | 3,479 | 3,445 | (15 | ) | (23 | ) | |||||||||||||||||
Subprime mortgage | 1,390 | 1,485 | 1,594 | 1,792 | 1,807 | (6 | ) | (23 | ) | |||||||||||||||||
Auto | 161 | 125 | 126 | 135 | 163 | 29 | (1 | ) | ||||||||||||||||||
Business banking | 385 | 413 | 454 | 458 | 481 | (7 | ) | (20 | ) | |||||||||||||||||
Student and other | 86 | 81 | 86 | 80 | 70 | 6 | 23 | |||||||||||||||||||
Total consumer, excluding credit card loans | 7,496 | 8,076 | 8,576 | 9,048 | 9,174 | (7 | ) | (18 | ) | |||||||||||||||||
Total credit card loans | — | 1 | 1 | 1 | 1 | NM | NM | |||||||||||||||||||
Total consumer nonaccrual loans (b) | 7,496 | 8,077 | 8,577 | 9,049 | 9,175 | (7 | ) | (18 | ) | |||||||||||||||||
Wholesale loans | ||||||||||||||||||||||||||
Loans retained | 821 | 950 | 1,001 | 1,247 | 1,434 | (14 | ) | (43 | ) | |||||||||||||||||
Loans held-for-sale and loans at fair value (c) | 223 | 218 | 301 | 285 | 283 | 2 | (21 | ) | ||||||||||||||||||
Total wholesale loans | 1,044 | 1,168 | 1,302 | 1,532 | 1,717 | (11 | ) | (39 | ) | |||||||||||||||||
Total nonaccrual loans | 8,540 | 9,245 | 9,879 | 10,581 | 10,892 | (8 | ) | (22 | ) | |||||||||||||||||
Derivative receivables | 415 | 431 | 448 | 412 | 239 | (4 | ) | 74 | ||||||||||||||||||
Assets acquired in loan satisfactions | 751 | 704 | 714 | 746 | 775 | 7 | (3 | ) | ||||||||||||||||||
Total nonperforming assets | 9,706 | 10,380 | 11,041 | 11,739 | 11,906 | (6 | ) | (18 | ) | |||||||||||||||||
Wholesale lending-related commitments (d) | 206 | 244 | 283 | 244 | 355 | (16 | ) | (42 | ) | |||||||||||||||||
Total nonperforming exposure | $ | 9,912 | $ | 10,624 | $ | 11,324 | $ | 11,983 | $ | 12,261 | (7 | ) | (19 | ) | ||||||||||||
NONACCRUAL LOAN-RELATED RATIOS | ||||||||||||||||||||||||||
Total nonaccrual loans to total loans (c) | 1.16 | % | 1.27 | % | 1.36 | % | 1.45 | % | 1.48 | % | ||||||||||||||||
Total consumer, excluding credit card nonaccrual loans to | ||||||||||||||||||||||||||
total consumer, excluding credit card loans | 2.59 | 2.80 | 2.98 | 3.12 | 3.14 | |||||||||||||||||||||
Total wholesale nonaccrual loans to total | ||||||||||||||||||||||||||
wholesale loans (c) | 0.32 | 0.37 | 0.42 | 0.48 | 0.55 | |||||||||||||||||||||
NONPERFORMING ASSETS BY LINE OF BUSINESS | ||||||||||||||||||||||||||
Consumer & Community Banking (b) | $ | 8,109 | $ | 8,673 | $ | 9,171 | $ | 9,666 | $ | 9,791 | (7 | ) | (17 | ) | ||||||||||||
Corporate & Investment Bank (c) | 838 | 855 | 1,014 | 1,066 | 1,092 | (2 | ) | (23 | ) | |||||||||||||||||
Commercial Banking | 529 | 585 | 543 | 681 | 687 | (10 | ) | (23 | ) | |||||||||||||||||
Asset Management | 168 | 203 | 247 | 263 | 263 | (17 | ) | (36 | ) | |||||||||||||||||
Corporate/Private Equity (e) | 62 | 64 | 66 | 63 | 73 | (3 | ) | (15 | ) | |||||||||||||||||
TOTAL | $ | 9,706 | $ | 10,380 | $ | 11,041 | $ | 11,739 | $ | 11,906 | (6 | ) | (18 | ) | ||||||||||||
(a) | At December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, nonperforming assets excluded: (1) mortgage loans insured by U.S. government agencies of $8.4 billion, $8.9 billion, $10.1 billion, $10.9 billion and $10.6 billion, respectively, that are 90 or more days past due; (2) real estate owned insured by U.S. government agencies of $2.0 billion, $1.9 billion, $1.8 billion, $1.7 billion and $1.6 billion, respectively; and (3) student loans insured by U.S. government agencies under the FFELP of $428 million, $456 million, $488 million, $523 million and $525 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 Firm's 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”). Under this guidance, nonmodified credit card loans are charged off by the end of the month in which the account becomes 180 days past due, while modified credit card loans are charged off when the account becomes 120 days past due. Moreover, all credit card loans must be charged off within 60 days of receiving notification about certain specified events (e.g., bankruptcy of the borrower). |
(b) | Excludes PCI loans. The Firm is recognizing interest income on each pool of PCI loans as they are all performing. |
(c) | In the fourth quarter of 2013, certain loans that resulted from restructurings that were previously classified as performing were reclassified as nonperforming loans. Prior periods were revised to conform with the current presentation. |
(d) | Represents commitments that are risk rated as nonaccrual. |
(e) | Predominantly relates to retained prime mortgage loans. |
Page 33
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CREDIT-RELATED INFORMATION, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
GROSS CHARGE-OFFS | ||||||||||||||||||||||||||||||||||||||
Consumer, excluding credit card loans (a)(b) | $ | 625 | $ | 671 | $ | 666 | $ | 792 | $ | 804 | (7 | ) | % | (22 | ) | % | $ | 2,754 | $ | 4,805 | (c) | (43 | ) | % | ||||||||||||||
Credit card loans | 1,011 | 1,047 | 1,166 | 1,248 | 1,261 | (3 | ) | (20 | ) | 4,472 | 5,755 | (22 | ) | |||||||||||||||||||||||||
Total consumer loans | 1,636 | 1,718 | 1,832 | 2,040 | 2,065 | (5 | ) | (21 | ) | 7,226 | 10,560 | (32 | ) | |||||||||||||||||||||||||
Wholesale loans | 51 | 74 | 50 | 66 | 133 | (31 | ) | (62 | ) | 241 | 346 | (30 | ) | |||||||||||||||||||||||||
Total gross charge-offs | $ | 1,687 | $ | 1,792 | $ | 1,882 | $ | 2,106 | $ | 2,198 | (6 | ) | (23 | ) | $ | 7,467 | $ | 10,906 | (32 | ) | ||||||||||||||||||
GROSS RECOVERIES | ||||||||||||||||||||||||||||||||||||||
Consumer, excluding credit card loans (b) | $ | 210 | $ | 243 | $ | 210 | $ | 184 | $ | 115 | (14 | ) | 83 | $ | 847 | $ | 508 | 67 | ||||||||||||||||||||
Credit card loans | 120 | 155 | 152 | 166 | 164 | (23 | ) | (27 | ) | 593 | 811 | (27 | ) | |||||||||||||||||||||||||
Total consumer loans | 330 | 398 | 362 | 350 | 279 | (17 | ) | 18 | 1,440 | 1,319 | 9 | |||||||||||||||||||||||||||
Wholesale loans | 29 | 48 | 117 | 31 | 291 | (40 | ) | (90 | ) | 225 | 524 | (57 | ) | |||||||||||||||||||||||||
Total gross recoveries | $ | 359 | $ | 446 | $ | 479 | $ | 381 | $ | 570 | (20 | ) | (37 | ) | $ | 1,665 | $ | 1,843 | (10 | ) | ||||||||||||||||||
NET CHARGE-OFFS/(RECOVERIES) | ||||||||||||||||||||||||||||||||||||||
Consumer, excluding credit card loans (a) | $ | 415 | $ | 428 | $ | 456 | $ | 608 | $ | 689 | (3 | ) | (40 | ) | $ | 1,907 | $ | 4,297 | (c) | (56 | ) | |||||||||||||||||
Credit card loans | 891 | 892 | 1,014 | 1,082 | 1,097 | - | (19 | ) | 3,879 | 4,944 | (22 | ) | ||||||||||||||||||||||||||
Total consumer loans | 1,306 | 1,320 | 1,470 | 1,690 | 1,786 | (1 | ) | (27 | ) | 5,786 | 9,241 | (37 | ) | |||||||||||||||||||||||||
Wholesale loans | 22 | 26 | (67 | ) | 35 | (158 | ) | (15 | ) | NM | 16 | (178 | ) | NM | ||||||||||||||||||||||||
Total net charge-offs/(recoveries) | $ | 1,328 | $ | 1,346 | $ | 1,403 | $ | 1,725 | $ | 1,628 | (1 | ) | (18 | ) | $ | 5,802 | $ | 9,063 | (36 | ) | ||||||||||||||||||
NET CHARGE-OFF/(RECOVERY) RATES | ||||||||||||||||||||||||||||||||||||||
Consumer retained, excluding credit card loans (a) | 0.57 | % | 0.59 | % | 0.63 | % | 0.85 | % | 0.93 | % | 0.66 | % | 1.43 | %(c) | ||||||||||||||||||||||||
Credit card retained loans | 2.86 | 2.86 | 3.31 | 3.55 | 3.50 | 3.14 | 3.95 | |||||||||||||||||||||||||||||||
Total consumer retained loans | 1.26 | 1.27 | 1.43 | 1.65 | 1.70 | 1.40 | 2.17 | |||||||||||||||||||||||||||||||
Wholesale retained loans | 0.03 | 0.03 | (0.09 | ) | 0.05 | (0.21 | ) | 0.01 | (0.06 | ) | ||||||||||||||||||||||||||||
Total retained loans | 0.73 | 0.74 | 0.78 | 0.97 | 0.90 | 0.81 | 1.26 | |||||||||||||||||||||||||||||||
Consumer retained loans, excluding credit card and | ||||||||||||||||||||||||||||||||||||||
PCI loans | 0.70 | 0.73 | 0.79 | 1.06 | 1.18 | 0.82 | 1.81 | (c) | ||||||||||||||||||||||||||||||
Consumer retained loans, excluding PCI loans | 1.44 | 1.47 | 1.66 | 1.92 | 1.99 | 1.62 | 2.55 | (c) | ||||||||||||||||||||||||||||||
Total retained, excluding PCI loans | 0.79 | 0.81 | 0.85 | 1.06 | 0.98 | 0.87 | 1.38 | |||||||||||||||||||||||||||||||
Memo: Average retained loans | ||||||||||||||||||||||||||||||||||||||
Consumer retained, excluding credit card loans | $ | 288,751 | $ | 287,729 | $ | 289,158 | $ | 291,588 | $ | 293,544 | - | (2 | ) | $ | 289,294 | $ | 300,024 | (4 | ) | |||||||||||||||||||
Credit card retained loans | 123,800 | 123,845 | 122,855 | 123,564 | 124,701 | - | (1 | ) | 123,518 | 125,031 | (1 | ) | ||||||||||||||||||||||||||
Total average retained consumer loans | 412,551 | 411,574 | 412,013 | 415,152 | 418,245 | - | (1 | ) | 412,812 | 425,055 | (3 | ) | ||||||||||||||||||||||||||
Wholesale retained loans | 311,090 | 306,008 | 308,277 | 303,919 | 300,690 | 2 | 3 | 307,340 | 291,980 | 5 | ||||||||||||||||||||||||||||
Total average retained loans | $ | 723,641 | $ | 717,582 | $ | 720,290 | $ | 719,071 | $ | 718,935 | 1 | 1 | $ | 720,152 | $ | 717,035 | - | |||||||||||||||||||||
Consumer retained, excluding credit card and | ||||||||||||||||||||||||||||||||||||||
PCI loans | $ | 234,858 | $ | 232,100 | $ | 231,655 | $ | 232,503 | $ | 233,108 | 1 | 1 | $ | 232,784 | $ | 237,462 | (2 | ) | ||||||||||||||||||||
Consumer retained, excluding PCI loans | 358,658 | 355,945 | 354,510 | 356,067 | 357,809 | 1 | - | 356,301 | 362,494 | (2 | ) | |||||||||||||||||||||||||||
Total retained, excluding PCI loans | 669,738 | 661,941 | 662,776 | 659,972 | 658,479 | 1 | 2 | 663,629 | 654,454 | 1 | ||||||||||||||||||||||||||||
(a) | Gross charge-offs and the net charge-off rates for the three months ended December 31, 2013 and full year 2013 excluded $53 million of write-offs in the PCI portfolio. These write-offs decreased the allowance for loan losses for PCI loans. |
(b) | Prior periods have been revised. |
(c) | Net charge-offs and net charge-off rates included $747 million and $53 million of Chapter 7 loans related to residential real estate and auto loans, respectively, for the full year 2012. Excluding these charge-offs, consumer retained loans, excluding credit card, consumer retained loans, excluding credit card and PCI loans, and consumer retained loans, excluding PCI loans net charge-off rates would have been 1.17%, 1.47% and 2.33%, respectively, for the full year 2012. For further information, see Consumer Credit Portfolio on pages 138-149 of the 2012 Annual Report. |
Page 34
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
CREDIT-RELATED INFORMATION, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
SUMMARY OF CHANGES IN THE ALLOWANCES | ||||||||||||||||||||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES | ||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 17,571 | $ | 19,384 | $ | 20,780 | $ | 21,936 | $ | 22,824 | (9 | ) | % | (23 | ) | % | $ | 21,936 | $ | 27,609 | (21 | ) | % | |||||||||||||||
Net charge-offs | 1,328 | 1,346 | 1,403 | 1,725 | 1,628 | (1 | ) | (18 | ) | 5,802 | 9,063 | (36 | ) | |||||||||||||||||||||||||
Write-offs of PCI loans (a) | 53 | — | — | — | — | NM | NM | 53 | — | NM | ||||||||||||||||||||||||||||
Provision for loan losses | 76 | (467 | ) | 10 | 569 | 740 | NM | (90 | ) | 188 | 3,387 | (94 | ) | |||||||||||||||||||||||||
Other | (2 | ) | — | (3 | ) | — | — | NM | NM | (5 | ) | 3 | NM | |||||||||||||||||||||||||
Ending balance | $ | 16,264 | $ | 17,571 | $ | 19,384 | $ | 20,780 | $ | 21,936 | (7 | ) | (26 | ) | $ | 16,264 | $ | 21,936 | (26 | ) | ||||||||||||||||||
ALLOWANCE FOR LENDING-RELATED COMMITMENTS | ||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 677 | $ | 753 | $ | 716 | $ | 668 | $ | 752 | (10 | ) | (10 | ) | $ | 668 | $ | 673 | (1 | ) | ||||||||||||||||||
Provision for lending-related commitments | 28 | (76 | ) | 37 | 48 | (84 | ) | NM | NM | 37 | (2 | ) | NM | |||||||||||||||||||||||||
Other | — | — | — | — | — | - | - | — | (3 | ) | NM | |||||||||||||||||||||||||||
Ending balance | $ | 705 | $ | 677 | $ | 753 | $ | 716 | $ | 668 | 4 | 6 | $ | 705 | $ | 668 | 6 | |||||||||||||||||||||
Total allowance for credit losses | $ | 16,969 | $ | 18,248 | $ | 20,137 | $ | 21,496 | $ | 22,604 | (7 | ) | (25 | ) | $ | 16,969 | $ | 22,604 | (25 | ) | ||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES BY LOB | ||||||||||||||||||||||||||||||||||||||
Consumer & Community Banking | $ | 12,201 | $ | 13,500 | $ | 15,095 | $ | 16,599 | $ | 17,752 | (10 | ) | (31 | ) | $ | 12,201 | $ | 17,752 | (31 | ) | ||||||||||||||||||
Corporate & Investment Bank | 1,096 | 1,138 | 1,287 | 1,246 | 1,300 | (4 | ) | (16 | ) | 1,096 | 1,300 | (16 | ) | |||||||||||||||||||||||||
Commercial Banking | 2,669 | 2,647 | 2,691 | 2,656 | 2,610 | 1 | 2 | 2,669 | 2,610 | 2 | ||||||||||||||||||||||||||||
Asset Management | 278 | 260 | 270 | 249 | 248 | 7 | 12 | 278 | 248 | 12 | ||||||||||||||||||||||||||||
Corporate/Private Equity | 20 | 26 | 41 | 30 | 26 | (23 | ) | (23 | ) | 20 | 26 | (23 | ) | |||||||||||||||||||||||||
Total | $ | 16,264 | $ | 17,571 | $ | 19,384 | $ | 20,780 | $ | 21,936 | (7 | ) | (26 | ) | $ | 16,264 | $ | 21,936 | (26 | ) | ||||||||||||||||||
(a) | Write-offs of PCI loans are recorded against the allowance for loan losses when actual losses for a pool exceed estimated losses that were recorded as purchase accounting adjustments at the time of acquisition. Any write-offs of PCI loans are recognized when the underlying loan is removed from a pool (e.g., upon liquidation). |
Page 35
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||
CREDIT-RELATED INFORMATION, CONTINUED | ||||||||||||||||||||||||||
(in millions, except ratio data) | ||||||||||||||||||||||||||
Dec 31, 2013 | ||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||
Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Dec 31, | ||||||||||||||||||||
2013 | 2013 | 2013 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
ALLOWANCE COMPONENTS AND RATIOS | ||||||||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES | ||||||||||||||||||||||||||
Consumer, excluding credit card | ||||||||||||||||||||||||||
Asset-specific (a) | $ | 601 | $ | 689 | $ | 713 | $ | 771 | $ | 729 | (13 | ) | % | (18 | ) | % | ||||||||||
Formula-based | 3,697 | 3,798 | 4,267 | 5,163 | 5,852 | (3 | ) | (37 | ) | |||||||||||||||||
PCI | 4,158 | 4,961 | 5,711 | 5,711 | 5,711 | (16 | ) | (27 | ) | |||||||||||||||||
Total consumer, excluding credit card | 8,456 | 9,448 | 10,691 | 11,645 | 12,292 | (10 | ) | (31 | ) | |||||||||||||||||
Credit card | ||||||||||||||||||||||||||
Asset-specific (a) | 971 | 1,080 | 1,227 | 1,434 | 1,681 | (10 | ) | (42 | ) | |||||||||||||||||
Formula-based | 2,824 | 3,017 | 3,218 | 3,564 | 3,820 | (6 | ) | (26 | ) | |||||||||||||||||
Total credit card | 3,795 | 4,097 | 4,445 | 4,998 | 5,501 | (7 | ) | (31 | ) | |||||||||||||||||
Total consumer | 12,251 | 13,545 | 15,136 | 16,643 | 17,793 | (10 | ) | (31 | ) | |||||||||||||||||
Wholesale | ||||||||||||||||||||||||||
Asset-specific (a) | 181 | 209 | 228 | 228 | 319 | (13 | ) | (43 | ) | |||||||||||||||||
Formula-based | 3,832 | 3,817 | 4,020 | 3,909 | 3,824 | - | - | |||||||||||||||||||
Total wholesale | 4,013 | 4,026 | 4,248 | 4,137 | 4,143 | - | (3 | ) | ||||||||||||||||||
Total allowance for loan losses | 16,264 | 17,571 | 19,384 | 20,780 | 21,936 | (7 | ) | (26 | ) | |||||||||||||||||
Allowance for lending-related commitments | 705 | 677 | 753 | 716 | 668 | 4 | 6 | |||||||||||||||||||
Total allowance for credit losses | $ | 16,969 | $ | 18,248 | $ | 20,137 | $ | 21,496 | $ | 22,604 | (7 | ) | (25 | ) | ||||||||||||
CREDIT RATIOS | ||||||||||||||||||||||||||
Consumer, excluding credit card allowance, to total | ||||||||||||||||||||||||||
consumer, excluding credit card retained loans | 2.93 | % | 3.28 | % | 3.72 | % | 4.01 | % | 4.20 | % | ||||||||||||||||
Credit card allowance to total credit card retained loans | 2.98 | 3.31 | 3.58 | 4.10 | 4.30 | |||||||||||||||||||||
Wholesale allowance to total wholesale retained loans | 1.30 | 1.30 | 1.38 | 1.33 | 1.35 | |||||||||||||||||||||
Wholesale allowance to total wholesale retained loans, | ||||||||||||||||||||||||||
excluding trade finance and conduits (b) | 1.50 | 1.52 | 1.65 | 1.61 | 1.66 | |||||||||||||||||||||
Total allowance to total retained loans | 2.25 | 2.43 | 2.69 | 2.88 | 3.02 | |||||||||||||||||||||
Consumer, excluding credit card allowance, to consumer, | ||||||||||||||||||||||||||
excluding credit card retained nonaccrual loans (c) | 113 | 117 | 125 | 129 | 134 | |||||||||||||||||||||
Total allowance, excluding credit card allowance, to retained | ||||||||||||||||||||||||||
nonaccrual loans, excluding credit card nonaccrual loans (c) | 150 | 149 | 156 | 153 | 155 | |||||||||||||||||||||
Wholesale allowance to wholesale retained nonaccrual loans | 489 | 424 | 424 | 332 | 289 | |||||||||||||||||||||
Total allowance to total retained nonaccrual loans | 196 | 195 | 202 | 202 | 207 | |||||||||||||||||||||
CREDIT RATIOS, excluding PCI loans | ||||||||||||||||||||||||||
Consumer, excluding credit card allowance, to total | ||||||||||||||||||||||||||
consumer, excluding credit card retained loans | 1.83 | 1.92 | 2.16 | 2.56 | 2.83 | |||||||||||||||||||||
Total allowance to total retained loans | 1.80 | 1.89 | 2.06 | 2.27 | 2.43 | |||||||||||||||||||||
Consumer, excluding credit card allowance, to consumer, | ||||||||||||||||||||||||||
excluding credit card retained nonaccrual loans (c) | 57 | 56 | 58 | 66 | 72 | |||||||||||||||||||||
Allowance, excluding credit card allowance, to retained non- | ||||||||||||||||||||||||||
accrual loans, excluding credit card nonaccrual loans (c) | 100 | 94 | 96 | 98 | 101 | |||||||||||||||||||||
Total allowance to total retained nonaccrual loans | 146 | 140 | 143 | 146 | 153 | |||||||||||||||||||||
(a) | Includes risk-rated loans that have been placed on nonaccrual status and loans that have been modified in a troubled debt restructuring (“TDR”). |
(b) | Management uses allowance for loan losses to period-end loans retained, excluding CIB's trade finance and conduits, a non-GAAP financial measure, to provide a more meaningful assessment of the wholesale allowance coverage ratio. |
(c) | For information on the Firm’s nonaccrual policy for credit card loans, see footnote (a) on page 33. |
Page 36
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
CREDIT-RELATED INFORMATION, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
PROVISION FOR CREDIT LOSSES BY LINE OF BUSINESS | ||||||||||||||||||||||||||||||||||||||
Provision for loan losses | ||||||||||||||||||||||||||||||||||||||
Consumer & Community Banking | $ | 72 | $ | (267 | ) | $ | (20 | ) | $ | 549 | $ | 1,091 | NM | % | (93 | ) | % | $ | 334 | $ | 3,774 | (91 | ) | % | ||||||||||||||
Corporate & Investment Bank | (54 | ) | (152 | ) | (41 | ) | (37 | ) | (373 | ) | 64 | 86 | (284 | ) | (485 | ) | 41 | |||||||||||||||||||||
Commercial Banking | 47 | (29 | ) | 43 | 40 | 10 | NM | 370 | 101 | 47 | 115 | |||||||||||||||||||||||||||
Asset Management | 23 | (1 | ) | 23 | 20 | 19 | NM | 21 | 65 | 88 | (26 | ) | ||||||||||||||||||||||||||
Corporate/Private Equity | (12 | ) | (18 | ) | 5 | (3 | ) | (7 | ) | 33 | (71 | ) | (28 | ) | (37 | ) | 24 | |||||||||||||||||||||
Total provision for loan losses | $ | 76 | $ | (467 | ) | $ | 10 | $ | 569 | $ | 740 | NM | (90 | ) | $ | 188 | $ | 3,387 | (94 | ) | ||||||||||||||||||
Provision for lending-related commitments | ||||||||||||||||||||||||||||||||||||||
Consumer & Community Banking | $ | — | $ | — | $ | 1 | $ | — | $ | — | - | - | $ | 1 | $ | — | NM | |||||||||||||||||||||
Corporate & Investment Bank | 35 | (66 | ) | 35 | 48 | (72 | ) | NM | NM | 52 | 6 | NM | ||||||||||||||||||||||||||
Commercial Banking | (4 | ) | (12 | ) | 1 | (1 | ) | (13 | ) | 67 | 69 | (16 | ) | (6 | ) | (167 | ) | |||||||||||||||||||||
Asset Management | (2 | ) | 1 | — | 1 | — | NM | NM | — | (2 | ) | NM | ||||||||||||||||||||||||||
Corporate/Private Equity | (1 | ) | 1 | — | — | 1 | NM | NM | — | — | - | |||||||||||||||||||||||||||
Total provision for lending-related commitments | $ | 28 | $ | (76 | ) | $ | 37 | $ | 48 | $ | (84 | ) | NM | NM | $ | 37 | $ | (2 | ) | NM | ||||||||||||||||||
Provision for credit losses | ||||||||||||||||||||||||||||||||||||||
Consumer & Community Banking | $ | 72 | $ | (267 | ) | $ | (19 | ) | $ | 549 | $ | 1,091 | NM | (93 | ) | $ | 335 | $ | 3,774 | (91 | ) | |||||||||||||||||
Corporate & Investment Bank | (19 | ) | (218 | ) | (6 | ) | 11 | (445 | ) | 91 | 96 | (232 | ) | (479 | ) | 52 | ||||||||||||||||||||||
Commercial Banking | 43 | (41 | ) | 44 | 39 | (3 | ) | NM | NM | 85 | 41 | 107 | ||||||||||||||||||||||||||
Asset Management | 21 | — | 23 | 21 | 19 | NM | 11 | 65 | 86 | (24 | ) | |||||||||||||||||||||||||||
Corporate/Private Equity | (13 | ) | (17 | ) | 5 | (3 | ) | (6 | ) | 24 | (117 | ) | (28 | ) | (37 | ) | 24 | |||||||||||||||||||||
Total provision for credit losses | $ | 104 | $ | (543 | ) | $ | 47 | $ | 617 | $ | 656 | NM | (84 | ) | $ | 225 | $ | 3,385 | (93 | ) | ||||||||||||||||||
PROVISION FOR CREDIT LOSSES BY PORTFOLIO SEGMENT | ||||||||||||||||||||||||||||||||||||||
Provision for loan losses | ||||||||||||||||||||||||||||||||||||||
Consumer, excluding credit card | $ | (526 | ) | $ | (815 | ) | $ | (494 | ) | $ | (37 | ) | $ | (12 | ) | 35 | NM | $ | (1,872 | ) | $ | 302 | NM | |||||||||||||||
Credit card | 591 | 542 | 464 | 582 | 1,097 | 9 | (46 | ) | 2,179 | 3,444 | (37 | ) | ||||||||||||||||||||||||||
Total consumer | 65 | (273 | ) | (30 | ) | 545 | 1,085 | NM | (94 | ) | 307 | 3,746 | (92 | ) | ||||||||||||||||||||||||
Wholesale | 11 | (194 | ) | 40 | 24 | (345 | ) | NM | NM | (119 | ) | (359 | ) | 67 | ||||||||||||||||||||||||
Total provision for loan losses | $ | 76 | $ | (467 | ) | $ | 10 | $ | 569 | $ | 740 | NM | (90 | ) | $ | 188 | $ | 3,387 | (94 | ) | ||||||||||||||||||
Provision for lending-related commitments | ||||||||||||||||||||||||||||||||||||||
Consumer, excluding credit card | $ | — | $ | — | $ | 1 | $ | — | $ | 1 | - | NM | $ | 1 | $ | — | NM | |||||||||||||||||||||
Credit card | — | — | — | — | — | - | - | — | — | - | ||||||||||||||||||||||||||||
Total consumer | — | — | 1 | — | 1 | - | NM | 1 | — | NM | ||||||||||||||||||||||||||||
Wholesale | 28 | (76 | ) | 36 | 48 | (85 | ) | NM | NM | 36 | (2 | ) | NM | |||||||||||||||||||||||||
Total provision for lending-related commitments | $ | 28 | $ | (76 | ) | $ | 37 | $ | 48 | $ | (84 | ) | NM | NM | $ | 37 | $ | (2 | ) | NM | ||||||||||||||||||
Provision for credit losses | ||||||||||||||||||||||||||||||||||||||
Consumer, excluding credit card | $ | (526 | ) | $ | (815 | ) | $ | (493 | ) | $ | (37 | ) | $ | (11 | ) | 35 | NM | $ | (1,871 | ) | $ | 302 | NM | |||||||||||||||
Credit card | 591 | 542 | 464 | 582 | 1,097 | 9 | (46 | ) | 2,179 | 3,444 | (37 | ) | ||||||||||||||||||||||||||
Total consumer | 65 | (273 | ) | (29 | ) | 545 | 1,086 | NM | (94 | ) | 308 | 3,746 | (92 | ) | ||||||||||||||||||||||||
Wholesale | 39 | (270 | ) | 76 | 72 | (430 | ) | NM | NM | (83 | ) | (361 | ) | 77 | ||||||||||||||||||||||||
Total provision for credit losses | $ | 104 | $ | (543 | ) | $ | 47 | $ | 617 | $ | 656 | NM | (84 | ) | $ | 225 | $ | 3,385 | (93 | ) | ||||||||||||||||||
Page 37
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
MARKET RISK-RELATED INFORMATION | ||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
95% Confidence Level - Total VaR (average) | ||||||||||||||||||||||||||||||||||||||
CIB trading VaR by risk type: (a) | ||||||||||||||||||||||||||||||||||||||
Fixed income (b) | $ | 39 | $ | 43 | $ | 35 | $ | 55 | $ | 86 | (9 | ) | % | (55 | ) | % | $ | 43 | $ | 83 | (48 | ) | % | |||||||||||||||
Foreign exchange | 7 | 7 | 7 | 7 | 8 | - | (13 | ) | 7 | 10 | (30 | ) | ||||||||||||||||||||||||||
Equities | 13 | 13 | 14 | 13 | 27 | - | (52 | ) | 13 | 21 | (38 | ) | ||||||||||||||||||||||||||
Commodities and other | 15 | 13 | 13 | 15 | 14 | 15 | 7 | 14 | 15 | (7 | ) | |||||||||||||||||||||||||||
Diversification benefit to CIB trading VaR (c) | (36 | ) | (34 | ) | (33 | ) | (34 | ) | (38 | ) | (6 | ) | 5 | (34 | ) | (45 | ) | 24 | ||||||||||||||||||||
CIB trading VaR (a) | 38 | 42 | 36 | 56 | 97 | (10 | ) | (61 | ) | 43 | 84 | (49 | ) | |||||||||||||||||||||||||
Credit portfolio VaR (d) | 11 | 12 | 13 | 15 | 19 | (8 | ) | (42 | ) | 13 | 25 | (48 | ) | |||||||||||||||||||||||||
Diversification benefit to CIB VaR (c) | (7 | ) | (9 | ) | (9 | ) | (9 | ) | (10 | ) | 22 | 30 | (9 | ) | (13 | ) | 31 | |||||||||||||||||||||
CIB VaR (a)(b) | 42 | 45 | 40 | 62 | 106 | (7 | ) | (60 | ) | 47 | 96 | (51 | ) | |||||||||||||||||||||||||
Mortgage Banking VaR (e) | 6 | 10 | 15 | 19 | 26 | (40 | ) | (77 | ) | 12 | 17 | (29 | ) | |||||||||||||||||||||||||
Treasury and CIO VaR (b)(f) | 4 | 5 | 5 | 11 | 6 | (20 | ) | (33 | ) | 6 | 92 | (i) | (93 | ) | ||||||||||||||||||||||||
Asset Management VaR (g) | 3 | 4 | 5 | 4 | 3 | (25 | ) | - | 4 | 2 | 100 | |||||||||||||||||||||||||||
Diversification benefit to other VaR (c) | (5 | ) | (8 | ) | (10 | ) | (13 | ) | (9 | ) | 38 | 44 | (8 | ) | (10 | ) | 20 | |||||||||||||||||||||
Other VaR | 8 | 11 | 15 | 21 | 26 | (27 | ) | (69 | ) | 14 | 101 | (86 | ) | |||||||||||||||||||||||||
Diversification benefit to CIB and other VaR (c) | (6 | ) | (9 | ) | (10 | ) | (10 | ) | (12 | ) | 33 | 50 | (9 | ) | (45 | ) | 80 | |||||||||||||||||||||
Total VaR (b)(h) | $ | 44 | $ | 47 | $ | 45 | $ | 73 | $ | 120 | (6 | ) | (63 | ) | $ | 52 | $ | 152 | (66 | ) | ||||||||||||||||||
(a) | CIB trading VaR includes substantially all market-making and client-driven activities, as well as certain risk management activities in CIB, including credit spread sensitivity to CVA. CIB trading VaR does not include DVA on structured notes and derivative liabilities. It also does not include the market risk impact of implementing FVA for OTC derivatives and structured notes in the fourth quarter of 2013. Given that the implementation of FVA was effective on December 31, 2013, the impact of FVA on CIB’s average VaR would have been minimal for the three months and twelve months ended December 31, 2013. Effective in the first quarter of 2014, the FVA market risk exposure and its associated hedges will be included in CIB’s average VaR. For further information, see VaR measurement on pages 97-100 of the 3Q13 Form 10-Q. Effective in the fourth quarter of 2012, CIB's VaR includes the VaR of the former reportable business segments, Investment Bank and Treasury & Securities Services (“TSS”), which were combined to form the CIB business segment. TSS VaR was not material and was previously classified within Other VaR. Prior period VaR disclosures were not revised as a result of the business segment reorganization. |
(b) | On July 2, 2012, CIO transferred its synthetic credit portfolio, other than a portion aggregating to approximately $12 billion notional, to the CIB; CIO's retained portfolio was effectively closed out during the three months ended September 30, 2012. During the third quarter of 2012, the Firm applied a new VaR model to calculate VaR for the synthetic credit portfolio that had been transferred to CIB. In the first quarter of 2013, in order to achieve consistency among like products within CIB and in conjunction with the implementation of Basel 2.5 requirements, the Firm moved the synthetic credit portfolio to an existing VaR model within the CIB. This change had an insignificant impact to the average fixed income VaR and average CIB VaR, and it had no impact to the average total VaR compared with the model used in the third and fourth quarters of 2012. For further information regarding these VaR Model impacts on prior periods, see Market Risk Management on pages 77-80, 95-99 and 97-100 of the Form 10-Q for the quarterly periods ended March 31, 2013, June 30, 2013 and September 30, 2013, respectively. |
(c) | Average portfolio 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. |
(d) | Credit portfolio VaR includes the derivative CVA, hedges of the CVA and hedges of the retained loan portfolio, which are reported in principal transactions revenue. This VaR does not include the retained loan portfolio, which is not reported at fair value. |
(e) | Mortgage Banking VaR includes the Firm's mortgage pipeline and warehouse loans, MSRs and all related hedges. |
(f) | Treasury and CIO VaR includes positions, primarily in securities and derivatives, which are measured at fair value through earnings. |
(g) | Asset Management VaR includes securities and derivatives, mainly used to hedge the Firm’s initial capital investments in products managed by Asset Management, such as mutual funds. |
(h) | Total VaR does not include (i) the retained Credit portfolio, which is not reported at fair value; however, it does include hedges of those positions, which are reported at fair value, (ii) DVA on structured notes and derivative liabilities and the market risk impact of implementing FVA for OTC derivatives and structured notes in the fourth quarter of 2013; for further information on the implementation of FVA, see footnote (a) above, and (iii) principal investments and longer-term securities investments managed by CIO that are classified as available-for-sale; for further information, see VaR measurement on pages 97-101 of the 3Q13 Form 10-Q. |
(i) | On August 9, 2012, the Firm restated its 2012 first quarter financial statements. See the Form 10-Q/A for the quarter ended March 31, 2012 for further information on the restatement. The CIO VaR amount for the first quarter of 2012 has not been recalculated to reflect the restatement. |
Page 38
JPMORGAN CHASE & CO. | ![]() | ||||||||||||||||||||||||||||||||||||||||
CAPITAL AND OTHER SELECTED BALANCE SHEET ITEMS | |||||||||||||||||||||||||||||||||||||||||
(in millions, except ratio data) | |||||||||||||||||||||||||||||||||||||||||
Dec 31, 2013 | |||||||||||||||||||||||||||||||||||||||||
Change | FULL YEAR | ||||||||||||||||||||||||||||||||||||||||
Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Dec 31, | 2013 Change | ||||||||||||||||||||||||||||||||||
2013 | 2013 | 2013 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2012 | ||||||||||||||||||||||||||||||||
CAPITAL (a) | |||||||||||||||||||||||||||||||||||||||||
Tier 1 capital | $ | 165,642 | (f)(g) | $ | 161,345 | $ | 164,027 | $ | 163,807 | $ | 160,002 | 3 | % | 4 | % | $ | 165,642 | (f)(g) | $ | 160,002 | 4 | % | |||||||||||||||||||
Total capital | 199,265 | (f) | 196,224 | 199,148 | 198,926 | 194,036 | 2 | 3 | 199,265 | (f) | 194,036 | 3 | |||||||||||||||||||||||||||||
Tier 1 common capital (b) | 148,866 | (f) | 144,584 | 146,957 | 143,255 | 140,342 | 3 | 6 | 148,866 | (f) | 140,342 | 6 | |||||||||||||||||||||||||||||
Risk-weighted assets | 1,390,854 | (f) | 1,374,039 | 1,410,081 | 1,406,948 | 1,270,378 | 1 | 9 | 1,390,854 | (f) | 1,270,378 | 9 | |||||||||||||||||||||||||||||
Adjusted average assets (c) | 2,343,448 | (f) | 2,327,427 | 2,333,416 | 2,255,697 | 2,243,242 | 1 | 4 | 2,343,448 | (f) | 2,243,242 | 4 | |||||||||||||||||||||||||||||
Tier 1 capital ratio | 11.9 | (f)(g) | % | 11.7 | % | 11.6 | % | 11.6 | % | 12.6 | % | 11.9 | (f)(g) | % | 12.6 | % | |||||||||||||||||||||||||
Total capital ratio | 14.3 | (f) | 14.3 | 14.1 | 14.1 | 15.3 | 14.3 | (f) | 15.3 | ||||||||||||||||||||||||||||||||
Tier 1 leverage ratio | 7.1 | (f) | 6.9 | 7.0 | 7.3 | 7.1 | 7.1 | (f) | 7.1 | ||||||||||||||||||||||||||||||||
Tier 1 common capital ratio (b) | 10.7 | (f) | 10.5 | 10.4 | 10.2 | 11.0 | 10.7 | (f) | 11.0 | ||||||||||||||||||||||||||||||||
TANGIBLE COMMON EQUITY (period-end) (d) | |||||||||||||||||||||||||||||||||||||||||
Common stockholders' equity | $ | 200,020 | $ | 195,512 | $ | 197,781 | $ | 197,128 | $ | 195,011 | 2 | 3 | $ | 200,020 | $ | 195,011 | 3 | ||||||||||||||||||||||||
Less: Goodwill | 48,081 | 48,100 | 48,057 | 48,067 | 48,175 | - | - | 48,081 | 48,175 | - | |||||||||||||||||||||||||||||||
Less: Other intangible assets | 1,618 | 1,817 | 1,951 | 2,082 | 2,235 | (11 | ) | (28 | ) | 1,618 | 2,235 | (28 | ) | ||||||||||||||||||||||||||||
Add: Deferred tax liabilities (e) | 2,953 | 2,921 | 2,886 | 2,852 | 2,803 | 1 | 5 | 2,953 | 2,803 | 5 | |||||||||||||||||||||||||||||||
Total tangible common equity | $ | 153,274 | $ | 148,516 | $ | 150,659 | $ | 149,831 | $ | 147,404 | 3 | 4 | $ | 153,274 | $ | 147,404 | 4 | ||||||||||||||||||||||||
TANGIBLE COMMON EQUITY (average) (d) | |||||||||||||||||||||||||||||||||||||||||
Common stockholders' equity | $ | 196,360 | $ | 197,232 | $ | 197,283 | $ | 194,733 | $ | 191,975 | - | 2 | $ | 196,409 | $ | 184,352 | 7 | ||||||||||||||||||||||||
Less: Goodwill | 48,088 | 48,073 | 48,078 | 48,168 | 48,172 | - | - | 48,102 | 48,176 | - | |||||||||||||||||||||||||||||||
Less: Other intangible assets | 1,741 | 1,878 | 2,026 | 2,162 | 2,547 | (7 | ) | (32 | ) | 1,950 | 2,833 | (31 | ) | ||||||||||||||||||||||||||||
Add: Deferred tax liabilities (e) | 2,937 | 2,904 | 2,869 | 2,828 | 2,792 | 1 | 5 | 2,885 | 2,754 | 5 | |||||||||||||||||||||||||||||||
Total tangible common equity | $ | 149,468 | $ | 150,185 | $ | 150,048 | $ | 147,231 | $ | 144,048 | - | 4 | $ | 149,242 | $ | 136,097 | 10 | ||||||||||||||||||||||||
INTANGIBLE ASSETS (period-end) | |||||||||||||||||||||||||||||||||||||||||
Goodwill | $ | 48,081 | $ | 48,100 | $ | 48,057 | $ | 48,067 | $ | 48,175 | - | - | $ | 48,081 | $ | 48,175 | - | ||||||||||||||||||||||||
Mortgage servicing rights | 9,614 | 9,490 | 9,335 | 7,949 | 7,614 | 1 | 26 | 9,614 | 7,614 | 26 | |||||||||||||||||||||||||||||||
Purchased credit card relationships | 131 | 176 | 221 | 242 | 295 | (26 | ) | (56 | ) | 131 | 295 | (56 | ) | ||||||||||||||||||||||||||||
All other intangibles | 1,487 | 1,641 | 1,730 | 1,840 | 1,940 | (9 | ) | (23 | ) | 1,487 | 1,940 | (23 | ) | ||||||||||||||||||||||||||||
Total intangible assets | $ | 59,313 | $ | 59,407 | $ | 59,343 | $ | 58,098 | $ | 58,024 | - | 2 | $ | 59,313 | $ | 58,024 | 2 | ||||||||||||||||||||||||
DEPOSITS (period-end) | |||||||||||||||||||||||||||||||||||||||||
U.S. offices: | |||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing | $ | 389,863 | $ | 399,658 | $ | 362,314 | $ | 363,780 | $ | 380,320 | (2 | ) | 3 | $ | 389,863 | $ | 380,320 | 3 | |||||||||||||||||||||||
Interest-bearing | 626,392 | 605,305 | 580,091 | 571,334 | 552,106 | 3 | 13 | 626,392 | 552,106 | 13 | |||||||||||||||||||||||||||||||
Non-U.S. offices: | |||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing | 17,611 | 20,964 | 19,515 | 19,979 | 17,845 | (16 | ) | (1 | ) | 17,611 | 17,845 | (1 | ) | ||||||||||||||||||||||||||||
Interest-bearing | 253,899 | 255,175 | 241,030 | 247,414 | 243,322 | (1 | ) | 4 | 253,899 | 243,322 | 4 | ||||||||||||||||||||||||||||||
Total deposits | $ | 1,287,765 | $ | 1,281,102 | $ | 1,202,950 | $ | 1,202,507 | $ | 1,193,593 | 1 | 8 | $ | 1,287,765 | $ | 1,193,593 | 8 | ||||||||||||||||||||||||
(a) | In the first quarter of 2013, Basel 2.5 was implemented. For further information, see footnote (f) on page 2. |
(b) | Management uses Tier 1 common capital along with the other capital measures to assess and monitor the 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 the Tier 1 common capital ratio, see page 42. |
(c) | Adjusted average assets, for purposes of calculating the leverage ratio, includes 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. |
(d) | For further discussion of TCE, see page 42. |
(e) | 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. |
(f) | Estimated. |
(g) | At December 31, 2013, TruPS included in Tier 1 capital were $5.3 billion. If these securities were excluded from the calculation at December 31, 2013, Tier 1 capital would have been $160.4 billion and the Tier 1 capital ratio would have been 11.5%. |
Page 39
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
MORTGAGE REPURCHASE LIABILITY | ||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
MORTGAGE REPURCHASE LIABILITY (a) | ||||||||||||||||||||||||||||||||||||||
Summary of changes in mortgage repurchase liability: | ||||||||||||||||||||||||||||||||||||||
Repurchase liability at beginning of period | $ | 2,182 | $ | 2,476 | $ | 2,674 | $ | 2,811 | $ | 3,099 | (12 | ) | % | (30 | ) | % | $ | 2,811 | $ | 3,557 | (21 | ) | % | |||||||||||||||
Net realized losses (b)(c) | (1,023 | ) | (135 | ) | (191 | ) | (212 | ) | (267 | ) | NM | (283 | ) | (1,561 | ) | (1,158 | ) | (35 | ) | |||||||||||||||||||
Reclassification to litigation reserve (d) | (179 | ) | — | — | — | — | NM | NM | (179 | ) | — | NM | ||||||||||||||||||||||||||
Provision for repurchase losses (e) | (299 | ) | (159 | ) | (7 | ) | 75 | (21 | ) | (88 | ) | NM | (390 | ) | 412 | NM | ||||||||||||||||||||||
Repurchase liability at end of period | $ | 681 | $ | 2,182 | $ | 2,476 | $ | 2,674 | $ | 2,811 | (69 | ) | (76 | ) | $ | 681 | $ | 2,811 | (76 | ) | ||||||||||||||||||
(a) | On November 15, 2013, the Firm announced that it had reached a $4.5 billion agreement with 21 major institutional investors to make a binding offer to the trustees of 330 residential mortgage-backed securities trusts issued by JPMorgan Chase and Bear Stearns (“RMBS Trust Settlement”). The RMBS Trust Settlement is fully accrued in the Firm’s litigation reserves. |
(b) | Presented net of third-party recoveries and include principal losses and accrued interest on repurchased loans, “make-whole” payments, settlements with claimants, and certain related expense. Make-whole payments were $43 million, $117 million, $133 million, $121 million and $137 million for the three months ended December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively, and $414 million and $524 million for the full year 2013 and 2012, respectively. |
(c) | On October 25, 2013, the Firm agreed with the Federal Housing Finance Agency ("FHFA") to resolve, for $1.1 billion, GSE repurchase demands for breaches of representations and warranties on loans sold to the GSEs from 2000 to 2008, except for certain limited types of exposures. The settlement does not release the Firm’s liability with respect to its servicing obligations on covered loans. |
(d) | Historically, in the absence of a repurchase demand by a party to the relevant contracts, the Firm's decision to repurchase loans from private label securitization trusts when it determined it had an obligation to do so was recognized in the mortgage repurchase liability. Pursuant to the terms of the RMBS Trust Settlement, all repurchase obligations relating to the subject private label securitization trusts, whether resulting from a demand or otherwise, are now recognized in the Firm's litigation reserves for this settlement. |
(e) | Included provision related to new loan sales of $2 million, $4 million, $6 million, $8 million and $27 million for the three months ended December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively, and $20 million and $112 million for full year 2013 and 2012, respectively. |
Page 40
JPMORGAN CHASE & CO. | ![]() | |||||||||||||||||||||||||||||||||||||
PER SHARE-RELATED INFORMATION | ||||||||||||||||||||||||||||||||||||||
(in millions, except per share and ratio data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||
4Q13 Change | 2013 Change | |||||||||||||||||||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | 3Q13 | 4Q12 | 2013 | 2012 | 2012 | |||||||||||||||||||||||||||||
EARNINGS PER SHARE DATA | ||||||||||||||||||||||||||||||||||||||
Basic earnings per share: | ||||||||||||||||||||||||||||||||||||||
Net income/(loss) | $ | 5,278 | $ | (380 | ) | $ | 6,496 | $ | 6,529 | $ | 5,692 | NM | % | (7 | ) | % | $ | 17,923 | $ | 21,284 | (16 | ) | % | |||||||||||||||
Less: Preferred stock dividends | 190 | 229 | 204 | 182 | 175 | (17 | ) | 9 | 805 | 653 | 23 | |||||||||||||||||||||||||||
Net income/(loss) applicable to common equity | 5,088 | (609 | ) | 6,292 | 6,347 | 5,517 | NM | (8 | ) | 17,118 | 20,631 | (17 | ) | |||||||||||||||||||||||||
Less: Dividends and undistributed earnings allocated to | ||||||||||||||||||||||||||||||||||||||
participating securities | 150 | 41 | (f) | 191 | 216 | 195 | 266 | (23 | ) | 525 | 754 | (30 | ) | |||||||||||||||||||||||||
Net income/(loss) applicable to common stockholders | $ | 4,938 | $ | (650 | ) | $ | 6,101 | $ | 6,131 | $ | 5,322 | NM | (7 | ) | $ | 16,593 | $ | 19,877 | (17 | ) | ||||||||||||||||||
Total weighted-average basic shares outstanding | 3,762.1 | 3,767.0 | 3,782.4 | 3,818.2 | 3,806.7 | - | (1 | ) | 3,782.4 | 3,809.4 | (1 | ) | ||||||||||||||||||||||||||
Net income/(loss) per share | $ | 1.31 | $ | (0.17 | ) | $ | 1.61 | $ | 1.61 | $ | 1.40 | NM | (6 | ) | $ | 4.39 | $ | 5.22 | (16 | ) | ||||||||||||||||||
Diluted earnings per share: | ||||||||||||||||||||||||||||||||||||||
Net income/(loss) applicable to common stockholders | $ | 4,938 | $ | (650 | ) | $ | 6,101 | $ | 6,131 | $ | 5,322 | NM | (7 | ) | $ | 16,593 | $ | 19,877 | (17 | ) | ||||||||||||||||||
Total weighted-average basic shares outstanding | 3,762.1 | 3,767.0 | 3,782.4 | 3,818.2 | 3,806.7 | - | (1 | ) | 3,782.4 | 3,809.4 | (1 | ) | ||||||||||||||||||||||||||
Add: Employee stock options, SARs and warrants (a) | 35.0 | — | (g) | 31.9 | 28.8 | 14.2 | NM | 146 | 32.5 | 12.8 | 154 | |||||||||||||||||||||||||||
Total weighted-average diluted shares outstanding (b) | 3,797.1 | 3,767.0 | (g) | 3,814.3 | 3,847.0 | 3,820.9 | 1 | (1 | ) | 3,814.9 | 3,822.2 | - | ||||||||||||||||||||||||||
Net income/(loss) per share | $ | 1.30 | $ | (0.17 | ) | $ | 1.60 | $ | 1.59 | $ | 1.39 | NM | (6 | ) | $ | 4.35 | $ | 5.20 | (16 | ) | ||||||||||||||||||
COMMON SHARES OUTSTANDING | ||||||||||||||||||||||||||||||||||||||
Common shares - at period end | 3,756.1 | 3,759.2 | 3,769.0 | 3,789.8 | 3,804.0 | - | (1 | ) | 3,756.1 | 3,804.0 | (1 | ) | ||||||||||||||||||||||||||
Cash dividends declared per share | $ | 0.38 | $ | 0.38 | $ | 0.38 | (h) | $ | 0.30 | $ | 0.30 | - | 27 | $ | 1.44 | (h) | $ | 1.20 | 20 | |||||||||||||||||||
Book value per share | 53.25 | 52.01 | 52.48 | 52.02 | 51.27 | 2 | 4 | 53.25 | 51.27 | 4 | ||||||||||||||||||||||||||||
Tangible book value per share (c) | 40.81 | 39.51 | 39.97 | 39.54 | 38.75 | 3 | 5 | 40.81 | 38.75 | 5 | ||||||||||||||||||||||||||||
Dividend payout ratio | 29 | % | NM | % | 23 | % | 19 | % | 21 | % | 33 | % | 23 | % | ||||||||||||||||||||||||
SHARE PRICE (d) | ||||||||||||||||||||||||||||||||||||||
High | $ | 58.55 | $ | 56.93 | $ | 55.90 | $ | 51.00 | $ | 44.54 | 3 | 31 | $ | 58.55 | $ | 46.49 | 26 | |||||||||||||||||||||
Low | 50.25 | 50.06 | 46.05 | 44.20 | 38.83 | - | 29 | 44.20 | 30.83 | 43 | ||||||||||||||||||||||||||||
Close | 58.48 | 51.69 | 52.79 | 47.46 | 43.97 | 13 | 33 | 58.48 | 43.97 | 33 | ||||||||||||||||||||||||||||
Market capitalization | 219,657 | 194,312 | 198,966 | 179,863 | 167,260 | 13 | 31 | 219,657 | 167,260 | 31 | ||||||||||||||||||||||||||||
COMMON EQUITY REPURCHASE PROGRAM (e) | ||||||||||||||||||||||||||||||||||||||
Aggregate common equity repurchased | $ | 298.7 | $ | 739.7 | $ | 1,171.9 | $ | 2,578.3 | $ | — | (60 | ) | NM | $ | 4,788.6 | $ | 1,653.5 | (i) | 190 | |||||||||||||||||||
Common equity repurchased | 5.5 | 13.6 | 23.5 | 53.5 | — | (60 | ) | NM | 96.1 | 52.0 | (i) | 85 | ||||||||||||||||||||||||||
Average purchase price | $ | 54.27 | $ | 54.30 | $ | 50.01 | $ | 48.16 | $ | — | - | NM | $ | 49.83 | $ | 31.79 | (i) | 57 | ||||||||||||||||||||
(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. Treasury's Capital Purchase Program to purchase shares of the Firm's common stock. The aggregate number of shares issuable upon the exercise of such options and warrants was 1 million, 8 million, 13 million and 117 million for the three months ended December 31, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively, and 6 million and 148 million for full year 2013 and 2012, 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) | Tangible book value per share is a non-GAAP financial measure. Tangible book value per share represents tangible common equity divided by period-end common shares. For further discussion of this measure, see page 42. |
(d) | For additional information on the listing and trading of common stock, see footnote (c) page 2. |
(e) | The Firm is authorized to repurchase common equity between April 1, 2013 and March 31, 2014, pursuant to the $15.0 billion common equity (i.e., common stock and warrants) repurchase program previously authorized by the Board of Directors on March 13, 2012. As of December 31, 2013, the Firm had repurchased, during that period, $2.2 billion of common equity under the Plan. |
(f) | Due to the net loss applicable to common equity during the three months ended September 30, 2013, dividends were only deemed to be distributed to participating security holders, and such security holders do not share in losses. Net losses were completely allocated to common stockholders. |
(g) | Due to the net loss applicable to common stockholders during the three months ended September 30, 2013, no common equivalent shares have been included in the computation of diluted earnings per share for the period as the effect would be antidilutive. |
(h) | On May 21, 2013, the Board of Directors increased the quarterly common stock dividend from $0.30 to $0.38 per share. |
(i) | Included the impact of aggregate repurchases of 18.5 million warrants during the three months ended June 30, 2012. |
Page 41
JPMORGAN CHASE & CO. | ![]() | |||||||||||||
NON-GAAP FINANCIAL MEASURES | ||||||||||||||
The following are several of the non-GAAP measures that the Firm uses for various reasons, including: (i) to allow management to assess the comparability of revenue arising from both taxable and tax-exempt sources, (ii) to assess and compare the quality and composition of the Firm's capital with the capital of other financial services companies, and (iii) more generally, to provide a more meaningful measure of certain metrics that enables comparability with prior periods, as well as with competitors.
(a) | In addition to analyzing the Firm's results on a reported basis, management reviews the Firm's consolidated results and the results of the lines of business on a “managed” basis. The definition of managed basis starts with the reported U.S. GAAP results and includes certain reclassifications to present total consolidated net revenue for the Firm (and total net revenue for each of the business segments) on a FTE basis. Accordingly, revenue from investments that receive tax credits and tax-exempt securities is presented in the managed results on a basis comparable to taxable investments and securities. 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 consolidated net income/(loss) as reported by the Firm or net income/(loss) as reported by the lines of business. |
(b) | The ratio of the allowance for loan losses to period-end 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-offs and net charge-off rates exclude the impact of PCI loans. The ratio of the wholesale allowance for loan losses to period-end loans retained, excluding trade finance and conduits, is calculated excluding loans accounted for at fair value, loans held-for-sale, CIB's trade finance loans and consolidated Firm-administered multi-seller conduits, as well as their related allowances, to provide a more meaningful assessment of the wholesale allowance coverage ratio. |
(c) | Tangible common equity (“TCE”), ROTCE, Tangible book value per share ("TBVS"), and Tier 1 common capital under Basel I rules. TCE 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 measures consolidated earnings as a percentage of average TCE. TBVS represents the Firm's tangible common equity divided by period-end common shares. Tier 1 common capital and the Tier 1 common ratio under Basel I rules, along with other capital measures, are used by management, bank regulators, investors and analysts to assess and monitor the Firm's capital position. TCE, ROTCE, and TBVS are meaningful to management, as well as investors and analysts, in assessing the use of equity. For additional information on Tier 1 common under Basel I and III, see Regulatory capital on pages 117-120 of the 2012 Annual Report and pages 61-65 of the third quarter 2013 Form 10-Q. All of the aforementioned measures are useful to the Firm, as well as analysts and investors, in facilitating comparisons of the Firm with competitors. |
(d) | Consumer & Business Banking (“CBB”) uses the overhead ratio (excluding the amortization of core deposit intangibles ("CDI")) 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 CBB's CDI amortization expense related to prior business combination transactions. |
(e) | Corporate & Investment Bank provides several non-GAAP financial measures which exclude the impact of FVA (effective 4Q13) and DVA on: net revenue, net income, compensation ratio, return on equity and overhead ratio. These measures are used by management to assess the underlying performance of the business and for comparability with peers. The ratio of the allowance for loan losses to period-end loans retained is calculated excluding the impact of trade finance loans and consolidated Firm-administered multi-seller conduits to provide a more meaningful assessment of CIB's allowance coverage ratio. |
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GLOSSARY OF TERMS | |||||||||||
Allowance for loan losses to total loans: Represents period-end allowance for loan losses divided by retained loans.
Beneficial interests issued by consolidated VIEs: Represents the interests of third-party holders of debt/equity securities, or other obligations, issued by VIEs that are consolidated. The underlying obligations of the VIEs consist of short-term borrowings, commercial paper and long-term debt. The related assets consist of trading assets, available-for-sale securities, loans and other assets.
bp(s): Basis point(s).
Corporate/Private Equity: Comprises Private Equity, Treasury, Chief Investment Office, and Other Corporate, which includes corporate staff units and expense that is centrally managed.
Fully taxable-equivalent (“FTE”) basis: Total consolidated net revenue and the total net revenue of each of the business segments are presented on a fully taxable-equivalent basis. Accordingly, revenue from tax-exempt securities and investments that receive tax credits is presented in the managed results on a basis comparable to fully taxable securities and investments. This non-GAAP financial measure allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The corresponding income tax impact related to these items is recorded within income tax expense.
GSEs: U.S. government-sponsored enterprise, such as Federal National Mortgage Association ("Fannie Mae") and Federal Home Loan Mortgage Corporation ("Freddie Mac").
Managed basis: A non-GAAP presentation of financial results that includes reclassifications to present revenue on a fully taxable-equivalent basis. Management uses this non-GAAP financial measure at the segment level, because it believes this provides information to enable investors to understand the underlying operational performance and trends of the particular business segment and facilitates a comparison of the business segment with the performance of competitors.
MSR risk management revenue: Includes 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.
Net charge-off/(recovery) rate: Represents net charge-offs/(recoveries) (annualized) divided by average retained loans for the reporting period.
Net yield on interest-earning assets: The average rate for interest-earning assets less the average rate paid for all sources of funds.
NM: Not meaningful.
Overhead ratio: Noninterest expense as a percentage of total net revenue.
Participating securities: Represents unvested stock-based compensation awards containing nonforfeitable rights to dividends or dividend equivalents (collectively, "dividends"), which are included in the earnings per share calculation using the two-class method. Restricted stock and RSUs are granted to certain employees under the stock-based compensation programs, which entitle the recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. These unvested awards meet the definition of participating securities. Under the two-class method, all earnings (distributed and undistributed) are allocated to each class of common stock and participating securities, based on their respective rights to receive dividends.
Pre-provision profit/(loss): Pre-provision profit/(loss) is total net revenue less noninterest expense. Management believes that this financial measure is useful in assessing the ability of a lending institution to generate income in excess of its provision for credit losses.
Principal transactions revenue: Principal transactions revenue includes realized and unrealized gains and losses recorded on derivatives, other financial instruments, private equity investments, and physical commodities used in market-making and client-driven activities. In addition, principal transactions revenue also includes certain realized and unrealized gains and losses related to hedge accounting and specified risk management activities including: (a) certain derivatives designated in qualifying hedge accounting relationships (primarily fair value hedges of commodity and foreign exchange risk), (b) certain derivatives used for specified risk management purposes, primarily to mitigate credit risk, foreign exchange risk and commodity risk, and (c) other derivatives, including the synthetic credit portfolio.
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GLOSSARY OF TERMS | |||||||||||||
Purchased credit-impaired (“PCI”) loans: Represents loans that were acquired in the Washington Mutual transaction and deemed to be credit-impaired on the acquisition date in accordance with the guidance of the Financial Accounting Standards Board ("FASB"). The guidance allows purchasers to aggregate credit-impaired loans acquired in the same fiscal quarter into one or more pools, provided that the loans have common risk characteristics (e.g., product type, LTV ratios, FICO scores, past-due status, geographic location). A pool is then accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows.
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. The Firm is recognizing interest income on each pool of loans as they are all performing.
Write-offs of PCI loans are recorded against the allowance for loan losses when actual losses for a pool exceed estimated losses that were recorded as purchase accounting adjustments at the time of acquisition. Any write-offs of PCI loans are recognized when the underlying loan is removed from a pool (e.g., upon liquidation). PCI loans, as well as the related write-offs and allowance for loan losses, are excluded from the calculations of certain net charge-off rates and allowance coverage ratios.
Receivables from customers: Predominantly represents margin loans to prime and retail brokerage customers which are included in accrued interest and accounts receivable on the Consolidated Balance Sheets.
Reported basis: Financial statements prepared under U.S. GAAP.
Retained loans: Loans that are held-for-investment, which excludes loans held-for-sale and loans at fair value.
Risk-weighted assets (“RWA”): Risk-weighted assets consist of on- and off-balance sheet assets that are assigned to one of several broad risk categories and weighted by factors representing their risk and potential for default. On-balance sheet assets are risk-weighted based on the perceived credit risk associated with the obligor or counterparty, the nature of any collateral, and the guarantor, if any. Off-balance sheet assets such as lending-related commitments, guarantees, derivatives and other applicable off-balance sheet positions are risk-weighted by multiplying the contractual amount by the appropriate credit conversion factor to determine the on-balance sheet credit equivalent amount, which is then risk-weighted based on the same factors used for on-balance sheet assets. Risk-weighted assets also incorporate a measure for market risk related to applicable trading assets-debt and equity instruments, and foreign exchange and commodity derivatives. The resulting risk-weighted values for each of the risk categories are then aggregated to determine total risk-weighted assets.
Troubled debt restructuring (“TDR”): Occurs when the original terms of a loan agreement are modified by granting a concession to a borrower that is experiencing financial difficulty.
U.S. GAAP: Accounting principles generally accepted in the United States of America.
Value-at-risk (“VaR”): A measure of the dollar amount of potential loss from adverse market movements in an ordinary market environment. For additional information, see Value-at-risk on pages 163-167 of the 2012 Annual Report and pages 97-100 of the third quarter Form 10-Q.
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GLOSSARY OF TERMS | |||||||||||||
CONSUMER & COMMUNITY BANKING (“CCB”)
Active online customers - Users of all internet browsers and mobile platforms who have been active in the past 90 days.
Active mobile customers - Users of all mobile platforms, which include: SMS, mobile smartphone and tablet, who have been active in the past 90 days.
Consumer & Business Banking (“CBB”)
Description of selected business metrics within CBB:
Client investment managed accounts - Assets actively managed by Chase Wealth Management on behalf of clients. The percentage of managed accounts is calculated by dividing managed account assets by total client investment assets.
Client advisors - Investment product specialists, including private client advisors, financial advisors, financial advisor associates, senior financial advisors, independent financial advisors and financial advisor associate trainees, who advise clients on investment options, including annuities, mutual funds, stock trading services, etc., sold by the Firm or by third-party vendors through retail branches, Chase Private Client locations and other channels.
Personal bankers - Retail branch office personnel who acquire, retain and expand new and existing customer relationships by assessing customer needs and recommending and selling appropriate banking products and services.
Sales specialists - Retail branch office and field personnel, including, relationship managers and loan officers, who specialize in marketing and sales of various business banking products (i.e., business loans, letters of credit, deposit accounts, Chase Paymentech, etc.) and mortgage products to existing and new clients.
Deposit margin/deposit spread: Represents net interest income expressed as a percentage of average deposits.
Chase LiquidSM cards - Refers to a prepaid, reloadable card product.
Mortgage Banking
Mortgage Production and Mortgage Servicing revenue comprise the following:
Net production revenue includes net gains or losses on originations and sales
of prime and subprime mortgage loans, other production-related fees and losses related to the repurchase of previously-sold loans.
Net mortgage servicing revenue includes the following components:
a) | Operating revenue predominantly represents the return on Mortgage Servicing's MSR asset and includes: |
• | Actual gross income earned from servicing third-party mortgage loans, such as contractually specified servicing fees and ancillary income; and |
• | The change in the fair value of the MSR asset due to the collection or realization of expected cash flows. |
b) | Risk management represents the components of Mortgage Servicing's MSR asset that are subject to ongoing risk management activities, together with derivatives and other instruments used in those risk management activities. |
Mortgage origination channels comprise the following:
Retail - Borrowers who buy or refinance a home through direct contact with a mortgage banker employed by the Firm using a branch office, the Internet or by phone. Borrowers are frequently referred to a mortgage banker by a banker in a branch, real estate brokers, home builders or other third parties.
Wholesale - Third-party mortgage brokers refer loan application packages to the Firm. The Firm then underwrites and funds the loan. Brokers are independent loan originators that specialize in counseling applicants on available home financing options, but do not provide funding for loans. The Firm materially eliminated broker-originated loans in 2008, with the exception of a small number of loans guaranteed by the U.S. Department of Agriculture under its Section 502 Guaranteed Loan program that serves low-and-moderate income families in small rural communities.
Correspondent - Banks, thrifts, other mortgage banks and other financial institutions that sell closed loans to the Firm.
Card, Merchant Services and Auto (“Card”)
Description of selected business metrics within Card:
Card Services includes the Credit Card and Merchant Services businesses.
Merchant Services is a business that primarily processes transactions for merchants.
Total transactions - Number of transactions and authorizations processed for merchants.
Commercial Card provides a wide range of payment services to corporate and public sector clients worldwide through the commercial card products. Services include procurement, corporate travel and entertainment, expense management services, and business-to-business payment solutions.
Sales volume - Dollar amount of cardmember purchases, net of returns.
Open accounts - Cardmember accounts with charging privileges.
Auto origination volume - Dollar amount of auto loans and leases originated.
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GLOSSARY OF TERMS | |||||||||||||
CORPORATE & INVESTMENT BANK (“CIB”)
Definition of selected CIB revenue:
Investment banking fees include advisory, equity and bond underwriting, and loan syndication fees.
Treasury Services includes both transaction services and trade finance. Transaction services offers a broad range of products and services that enable clients to manage payments and receipts, as well as invest and manage funds. Products include U.S. dollar and multi-currency clearing, ACH, lockbox, disbursement and reconciliation services, check deposits, and currency related services. Trade finance enables the management of cross-border trade for bank and corporate clients. Products include loans tied directly to goods crossing borders, export/import loans, commercial letters of credit, standby letters of credit, and supply chain finance.
Lending includes net interest income, fees, gains or losses on loan sales activities, gains or losses on securities received as part of loan restructurings, and the risk management results related to the credit portfolio (excluding trade finance).
Fixed Income Markets primarily include revenue related to market-making across global fixed income markets, including foreign exchange, interest rate, credit and commodities markets. The results of the synthetic credit portfolio that was transferred from the Chief Investment Office effective July 2, 2012 are reported in this caption.
Equity Markets primarily include revenue related to market-making across global equity products, including cash instruments, derivatives, convertibles and Prime Services.
Securities Services includes primarily custody, fund accounting and administration, and securities lending products sold principally to asset managers, insurance companies and public and private investment funds. Also includes clearance, collateral management and depositary receipts business which provides broker-dealer clearing and custody services, including tri-party repo transactions, collateral management products, and depositary bank services for American and global depositary receipt programs.
Credit Adjustments & Other primarily credit portfolio credit valuation adjustments (“CVA”) net of associated hedging activities; debit valuation adjustments (“DVA”) on structured notes and derivative liabilities; FVA on OTC derivatives and structured notes; and nonperforming derivative receivable results.
Description of certain business metrics:
Client deposits and other third-party liabilities pertain to the Treasury Services and Securities Services businesses, and include deposits, as well as deposits that are swept to on-balance sheet liabilities (e.g., commercial paper, federal funds purchased and securities loaned or sold under repurchase agreements) as part of the Firm's client cash management program.
Assets under custody (“AUC”) represents activities associated with the safekeeping and servicing of assets on which Securities Services earns fees.
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GLOSSARY OF TERMS | |||||||||||||
COMMERCIAL BANKING (“CB”)
CB Client Segments:
Middle Market Banking covers corporate, municipal and nonprofit clients, with annual revenue generally ranging between $20 million and $500 million.
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.
Commercial Term Lending primarily provides term financing to real estate investors/owners for multifamily properties as well as financing office, retail and industrial properties.
Real Estate Banking provides full-service banking to investors and developers of institutional-grade real estate properties.
Other primarily includes lending and investment activity within the Community Development Banking and Chase Capital businesses.
CB Revenue:
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.
Treasury services includes revenue from a broad range of products and services (as defined by Treasury Services revenue in the CIB description of revenue) that enable CB clients to manage payments and receipts, as well as invest and manage funds.
Investment banking includes revenue from a range of products providing CB clients with sophisticated capital-raising alternatives, as well as balance sheet and risk management tools through advisory, equity and bond underwriting, and loan syndications. Revenue from Fixed income and Equity market products (as defined by Fixed Income Markets and Equity Markets revenue in the CIB description of revenue) available to CB clients is also included. Investment banking revenue, gross, represents total revenue related to investment banking products sold to CB clients.
Other product revenue primarily includes tax-equivalent adjustments generated from Community Development Banking activity and certain income derived from principal transactions.
Description of selected business metrics within CB:
Client deposits and other third-party liabilities include deposits, as well as deposits that are swept to on-balance sheet liabilities (e.g., commercial paper, federal funds purchased and securities loaned or sold under repurchase agreements) as part of the Firm's client cash management program.
ASSET MANAGEMENT (“AM”)
Assets under management - Represent assets actively managed by AM on behalf of its Private Banking, Institutional and Retail clients. Includes “committed capital not called,” on which AM earns fees.
Client assets - Represent assets under management, as well as custody, brokerage, administration and deposit accounts.
Multi-asset - Any fund or account that allocates assets under management to more than one asset class (e.g., long-term fixed income, equity, cash, real assets, private equity or hedge funds).
Alternative assets - The following types of assets constitute alternative investments - hedge funds, currency, real estate and private equity.
AM's client segments comprise the following:
Private Banking offers investment advice and wealth management services to high- and ultra-high-net-worth individuals, families, money managers, business owners and small corporations worldwide, including investment management, capital markets and risk management, tax and estate planning, banking, capital raising and specialty-wealth advisory services.
Institutional brings comprehensive global investment services – including asset management, pension analytics, asset-liability management and active risk-budgeting strategies – to corporate and public institutions, endowments, foundations, nonprofit organizations and governments worldwide.
Retail provides worldwide investment management services and retirement planning and administration, through financial intermediaries and direct distribution of a full range of investment products.
Pretax margin: Represents income before income tax expense divided by total net revenue, which is, in management's 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 AM against the performance of their respective competitors.
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