Table of Contents
Exhibit 99.2
![(JPMORGANCHASE LOGO)](https://capedge.com/proxy/8-K/0000950123-07-005573/y33468y3346801.gif)
EARNINGS RELEASE FINANCIAL SUPPLEMENT
FIRST QUARTER 2007
JPMORGAN CHASE & CO. TABLE OF CONTENTS | ![]() |
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Consolidated Results | ||||
2 | ||||
3 | ||||
4 | ||||
5 | ||||
6 | ||||
Business Detail | ||||
7 | ||||
8 | ||||
10 | ||||
14 | ||||
17 | ||||
19 | ||||
21 | ||||
24 | ||||
26 | ||||
Supplemental Detail | ||||
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32 |
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Table of Contents
JPMORGAN CHASE & CO. CONSOLIDATED FINANCIAL HIGHLIGHTS (in millions, except per share, ratio and headcount data) | ![]() |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
SELECTED INCOME STATEMENT DATA | ||||||||||||||||||||||||||||
Total Net Revenue (a) | $ | 18,968 | $ | 16,193 | $ | 15,545 | $ | 15,086 | $ | 15,175 | 17 | % | 25 | % | ||||||||||||||
Provision for Credit Losses | 1,008 | 1,134 | 812 | 493 | 831 | (11 | ) | 21 | ||||||||||||||||||||
Total Noninterest Expense | 10,628 | 9,885 | 9,796 | 9,382 | 9,780 | 8 | 9 | |||||||||||||||||||||
Income from Continuing Operations (after-tax) | 4,787 | 3,906 | 3,232 | 3,484 | 3,027 | 23 | 58 | |||||||||||||||||||||
Income from Discontinued Operations (after-tax) (b) | - | 620 | 65 | 56 | 54 | NM | NM | |||||||||||||||||||||
Net Income | 4,787 | 4,526 | 3,297 | 3,540 | 3,081 | 6 | 55 | |||||||||||||||||||||
PER COMMON SHARE: | ||||||||||||||||||||||||||||
Basic Earnings | ||||||||||||||||||||||||||||
Income from Continuing Operations | $ | 1.38 | $ | 1.13 | $ | 0.93 | $ | 1.00 | $ | 0.87 | 22 | 59 | ||||||||||||||||
Net Income | 1.38 | 1.31 | 0.95 | 1.02 | 0.89 | 5 | 55 | |||||||||||||||||||||
Diluted Earnings | ||||||||||||||||||||||||||||
Income from Continuing Operations | $ | 1.34 | $ | 1.09 | $ | 0.90 | $ | 0.98 | $ | 0.85 | 23 | 58 | ||||||||||||||||
Net Income | 1.34 | 1.26 | 0.92 | 0.99 | 0.86 | 6 | 56 | |||||||||||||||||||||
Cash Dividends Declared | 0.34 | 0.34 | 0.34 | 0.34 | 0.34 | - | - | |||||||||||||||||||||
Book Value | 34.45 | 33.45 | 32.75 | 31.89 | 31.19 | 3 | 10 | |||||||||||||||||||||
Closing Share Price | 48.38 | 48.30 | 46.96 | 42.00 | 41.64 | - | 16 | |||||||||||||||||||||
Market Capitalization | 165,280 | 167,199 | 162,835 | 145,764 | 144,614 | (1 | ) | 14 | ||||||||||||||||||||
COMMON SHARES OUTSTANDING: | ||||||||||||||||||||||||||||
Weighted-Average Diluted Shares Outstanding | 3,559.5 | 3,578.6 | 3,574.0 | 3,572.2 | 3,570.8 | (1 | ) | - | ||||||||||||||||||||
Common Shares Outstanding at Period-end | 3,416.3 | 3,461.7 | 3,467.5 | 3,470.6 | 3,473.0 | (1 | ) | (2 | ) | |||||||||||||||||||
FINANCIAL RATIOS: (c) | ||||||||||||||||||||||||||||
Income from Continuing Operations: | ||||||||||||||||||||||||||||
Return on Common Equity (“ROE”) | 17 | % | 14 | % | 11 | % | 13 | % | 11 | % | ||||||||||||||||||
Return on Equity-Goodwill (“ROE-GW”) (d) | 27 | 22 | 19 | 21 | 19 | |||||||||||||||||||||||
Return on Assets (“ROA”) (e) | 1.41 | 1.14 | 0.98 | 1.05 | 0.98 | |||||||||||||||||||||||
Net Income: | ||||||||||||||||||||||||||||
ROE | 17 | 16 | 12 | 13 | 12 | |||||||||||||||||||||||
ROE-GW (d) | 27 | 26 | 19 | 22 | 20 | |||||||||||||||||||||||
ROA (f) | 1.41 | 1.32 | 1.00 | 1.06 | 1.00 | |||||||||||||||||||||||
CAPITAL RATIOS: | ||||||||||||||||||||||||||||
Tier 1 Capital Ratio | 8.5 | (h) | 8.7 | 8.6 | 8.5 | 8.5 | ||||||||||||||||||||||
Total Capital Ratio | 11.8 | (h) | 12.3 | 12.1 | 12.0 | 12.1 | ||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (Period-end) | ||||||||||||||||||||||||||||
Total Assets | $ | 1,408,918 | $ | 1,351,520 | $ | 1,338,029 | $ | 1,328,001 | $ | 1,273,282 | 4 | 11 | ||||||||||||||||
Wholesale Loans | 168,194 | 183,742 | 179,403 | 178,215 | 164,799 | (8 | ) | 2 | ||||||||||||||||||||
Consumer Loans | 281,571 | 299,385 | 284,141 | 276,889 | 267,282 | (6 | ) | 5 | ||||||||||||||||||||
Deposits | 630,184 | 638,788 | 582,115 | 593,716 | 584,465 | (1 | ) | 8 | ||||||||||||||||||||
Common Stockholders’ Equity | 117,704 | 115,790 | 113,561 | 110,684 | 108,337 | 2 | 9 | |||||||||||||||||||||
Headcount | 176,314 | 174,360 | 171,589 | 172,423 | 170,787 | 1 | 3 | |||||||||||||||||||||
LINE OF BUSINESS EARNINGS | ||||||||||||||||||||||||||||
Investment Bank | $ | 1,540 | $ | 1,009 | $ | 976 | $ | 839 | $ | 850 | 53 | 81 | ||||||||||||||||
Retail Financial Services | 859 | 718 | 746 | 868 | 881 | 20 | (2 | ) | ||||||||||||||||||||
Card Services | 765 | 719 | 711 | 875 | 901 | 6 | (15 | ) | ||||||||||||||||||||
Commercial Banking | 304 | 256 | 231 | 283 | 240 | 19 | 27 | |||||||||||||||||||||
Treasury & Securities Services | 263 | 256 | 256 | 316 | 262 | 3 | - | |||||||||||||||||||||
Asset Management | 425 | 407 | 346 | 343 | 313 | 4 | 36 | |||||||||||||||||||||
Corporate (g) | 631 | 1,161 | 31 | 16 | (366 | ) | (46 | ) | NM | |||||||||||||||||||
Net Income | $ | 4,787 | $ | 4,526 | $ | 3,297 | $ | 3,540 | $ | 3,081 | 6 | 55 | ||||||||||||||||
(a) | As a result of the adoption on January 1, 2007, of SFAS 157, the Firm recognized a benefit, in the current quarter, of $166 million related to the incorporation of an adjustment to the valuation of the Firm’s derivative liabilities and other liabilities measured at fair value that reflects the credit quality of the Firm and a benefit of $464 million related to valuation adjustments on nonpublic private equity investments. | |
(b) | On October 1, 2006, the Firm completed the exchange of selected corporate trust businesses including trustee, paying agent, loan agency and document management services for the consumer, business banking and middle-market banking businesses of The Bank of New York. The results of operations of these corporate trust businesses are being reported as discontinued operations for each of the periods presented. | |
(c) | Quarterly ratios are based upon annualized amounts. | |
(d) | Income from continuing operations and Net income applicable to common stock divided by Total average common equity (net of goodwill). The Firm uses Return on equity less goodwill, a non-GAAP financial measure, to evaluate the operating performance of the Firm. The Firm also utilizes this measure to facilitate comparisons to competitors. | |
(e) | Income from continuing operations divided by Total average assets less average Assets of discontinued operations held-for-sale. | |
(f) | Net income divided by Total average assets. | |
(g) | Includes the after-tax impact of discontinued operations, recoveries related to material litigation actions, tax audit benefits and Merger costs. See Corporate for additional details. | |
(h) | Estimated. |
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JPMORGAN CHASE & CO. STATEMENTS OF INCOME (in millions, except per share, and ratio data) | ![]() |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||
Investment Banking Fees | $ | 1,739 | $ | 1,565 | $ | 1,416 | $ | 1,370 | $ | 1,169 | 11 | % | 49 | % | ||||||||||||||
Principal Transactions (a) (b) | 4,471 | 2,591 | 2,737 | 2,741 | 2,709 | 73 | 65 | |||||||||||||||||||||
Lending & Deposit Related Fees | 895 | 895 | 867 | 865 | 841 | - | 6 | |||||||||||||||||||||
Asset Management, Administration and Commissions (b) | 3,186 | 3,173 | 2,842 | 2,966 | 2,874 | - | 11 | |||||||||||||||||||||
Securities Gains (Losses) | 2 | 35 | 40 | (502 | ) | (116 | ) | (94 | ) | NM | ||||||||||||||||||
Mortgage Fees and Related Income | 476 | 75 | 62 | 213 | 241 | NM | 98 | |||||||||||||||||||||
Credit Card Income | 1,563 | 1,645 | 1,567 | 1,791 | 1,910 | (5 | ) | (18 | ) | |||||||||||||||||||
Other Income | 518 | 522 | 635 | 464 | 554 | (1 | ) | (6 | ) | |||||||||||||||||||
Noninterest Revenue | 12,850 | 10,501 | 10,166 | 9,908 | 10,182 | 22 | 26 | |||||||||||||||||||||
Interest Income | 16,636 | 16,097 | 15,157 | 14,617 | 13,236 | 3 | 26 | |||||||||||||||||||||
Interest Expense | 10,518 | 10,405 | 9,778 | 9,439 | 8,243 | 1 | 28 | |||||||||||||||||||||
Net Interest Income | 6,118 | 5,692 | 5,379 | 5,178 | 4,993 | 7 | 23 | |||||||||||||||||||||
TOTAL NET REVENUE | 18,968 | 16,193 | 15,545 | 15,086 | 15,175 | 17 | 25 | |||||||||||||||||||||
Provision for Credit Losses | 1,008 | 1,134 | 812 | 493 | 831 | (11 | ) | 21 | ||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||
Compensation Expense | 6,234 | 4,985 | 5,390 | 5,268 | 5,548 | 25 | 12 | |||||||||||||||||||||
Occupancy Expense | 640 | 625 | 563 | 553 | 594 | 2 | 8 | |||||||||||||||||||||
Technology, Communications and Equipment Expense | 922 | 997 | 911 | 876 | 869 | (8 | ) | 6 | ||||||||||||||||||||
Professional & Outside Services (b) | 1,200 | 1,246 | 1,111 | 1,085 | 1,008 | (4 | ) | 19 | ||||||||||||||||||||
Marketing | 482 | 614 | 550 | 526 | 519 | (21 | ) | (7 | ) | |||||||||||||||||||
Other Expense (c) | 735 | 948 | 877 | 631 | 816 | (22 | ) | (10 | ) | |||||||||||||||||||
Amortization of Intangibles | 353 | 370 | 346 | 357 | 355 | (5 | ) | (1 | ) | |||||||||||||||||||
Merger Costs | 62 | 100 | 48 | 86 | 71 | (38 | ) | (13 | ) | |||||||||||||||||||
TOTAL NONINTEREST EXPENSE | 10,628 | 9,885 | 9,796 | 9,382 | 9,780 | 8 | 9 | |||||||||||||||||||||
Income from Continuing Operations before Income Tax Expense | 7,332 | 5,174 | 4,937 | 5,211 | 4,564 | 42 | 61 | |||||||||||||||||||||
Income Tax Expense | 2,545 | 1,268 | 1,705 | 1,727 | 1,537 | 101 | 66 | |||||||||||||||||||||
Income from Continuing Operations (after-tax) | 4,787 | 3,906 | 3,232 | 3,484 | 3,027 | 23 | 58 | |||||||||||||||||||||
Income from Discontinued Operations (after-tax) (d) | - | 620 | 65 | 56 | 54 | NM | NM | |||||||||||||||||||||
NET INCOME | $ | 4,787 | $ | 4,526 | $ | 3,297 | $ | 3,540 | $ | 3,081 | 6 | 55 | ||||||||||||||||
DILUTED EARNINGS PER SHARE | ||||||||||||||||||||||||||||
Income from Continuing Operations (after-tax) | $ | 1.34 | $ | 1.09 | $ | 0.90 | $ | 0.98 | $ | 0.85 | 23 | 58 | ||||||||||||||||
Income from Discontinued Operations (after-tax) (d) | - | 0.17 | 0.02 | 0.01 | 0.01 | NM | NM | |||||||||||||||||||||
Net Income | $ | 1.34 | $ | 1.26 | $ | 0.92 | $ | 0.99 | $ | 0.86 | 6 | 56 | ||||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||||||||||
Income from Continuing Operations: | ||||||||||||||||||||||||||||
ROE | 17 | % | 14 | % | 11 | % | 13 | % | 11 | % | ||||||||||||||||||
ROE-GW | 27 | 22 | 19 | 21 | 19 | |||||||||||||||||||||||
ROA | 1.41 | 1.14 | 0.98 | 1.05 | 0.98 | |||||||||||||||||||||||
Net Income: | ||||||||||||||||||||||||||||
ROE | 17 | 16 | 12 | 13 | 12 | |||||||||||||||||||||||
ROE-GW | 27 | 26 | 19 | 22 | 20 | |||||||||||||||||||||||
ROA | 1.41 | 1.32 | 1.00 | 1.06 | 1.00 | |||||||||||||||||||||||
Effective Income Tax Rate (e) | 35 | 25 | 35 | 33 | 34 | |||||||||||||||||||||||
Overhead Ratio | 56 | 61 | 63 | 62 | 64 | |||||||||||||||||||||||
EXCLUDING IMPACT OF MERGER COSTS (f) | ||||||||||||||||||||||||||||
Income from Continuing Operations | $ | 4,787 | $ | 3,906 | $ | 3,232 | $ | 3,484 | $ | 3,027 | 23 | 58 | ||||||||||||||||
Less Merger Costs (after-tax) | 38 | 62 | 30 | 53 | 44 | (39 | ) | (14 | ) | |||||||||||||||||||
Income from Continuing Operations Excluding Merger Costs | $ | 4,825 | $ | 3,968 | $ | 3,262 | $ | 3,537 | $ | 3,071 | 22 | 57 | ||||||||||||||||
Diluted Per Share: | ||||||||||||||||||||||||||||
Income from Continuing Operations | $ | 1.34 | $ | 1.09 | $ | 0.90 | $ | 0.98 | $ | 0.85 | 23 | 58 | ||||||||||||||||
Less Merger Costs (after-tax) | 0.01 | 0.02 | 0.01 | 0.01 | 0.01 | (50 | ) | - | ||||||||||||||||||||
Income from Continuing Operations Excluding Merger Costs | $ | 1.35 | $ | 1.11 | $ | 0.91 | $ | 0.99 | $ | 0.86 | 22 | 57 | ||||||||||||||||
(a) | As a result of the adoption on January 1, 2007, of SFAS 157, the Firm recognized a benefit, in the current quarter, of $166 million related to the incorporation of an adjustment to the valuation of the Firm’s derivative liabilities and other liabilities measured at fair value that reflects the credit quality of the Firm and a benefit of $464 million related to valuation adjustments on nonpublic private equity investments. | |
(b) | Certain transaction costs that were previously reported in Revenue have been reclassified to Noninterest expense. Revenue and Noninterest expense have been reclassified for all periods presented. | |
(c) | Insurance recoveries related to settlement of the Enron and WorldCom class action litigations and for certain other material legal proceedings were $137 million, $17 million, $260 million and $98 million for the quarters ended December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. | |
(d) | On October 1, 2006, the Firm completed the exchange of selected corporate trust businesses including trustee, paying agent, loan agency and document management services for the consumer, business banking and middle-market banking businesses of The Bank of New York. The results of operations of these corporate trust businesses are being reported as discontinued operations for each of the periods presented. | |
(e) | Based on Income from continuing operations. | |
(f) | Income from continuing operations excluding Merger costs, a non-GAAP financial measure, is used by the Firm to facilitate comparison of results against the Firm’s ongoing operations and with other companies’ U.S. GAAP financial statements. |
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JPMORGAN CHASE & CO. CONSOLIDATED BALANCE SHEETS | ![]() |
(in millions)
Mar 31, 2007 | ||||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||||
Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Mar 31 | ||||||||||||||||||||||
2007 | 2006 | 2006 | 2006 | 2006 | 2006 | 2006 | ||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||
Cash and Due from Banks | $ | 31,836 | $ | 40,412 | $ | 36,279 | $ | 38,390 | $ | 36,903 | (21 | )% | (14 | )% | ||||||||||||||
Deposits with Banks | 30,973 | 13,547 | 17,130 | 14,437 | 10,545 | 129 | 194 | |||||||||||||||||||||
Federal Funds Sold and Securities Purchased under Resale Agreements (a) | 144,306 | 140,524 | 156,194 | 157,438 | 153,755 | 3 | (6 | ) | ||||||||||||||||||||
Securities Borrowed | 84,800 | 73,688 | 89,222 | 87,377 | 93,280 | 15 | (9 | ) | ||||||||||||||||||||
Trading Assets: | ||||||||||||||||||||||||||||
Debt and Equity Instruments | 373,684 | 310,137 | 289,891 | 295,604 | 259,275 | 20 | 44 | |||||||||||||||||||||
Derivative Receivables | 49,647 | 55,601 | 58,265 | 54,075 | 52,750 | (11 | ) | (6 | ) | |||||||||||||||||||
Securities | 97,029 | 91,975 | 86,548 | 78,022 | 67,126 | 5 | 45 | |||||||||||||||||||||
Interests in Purchased Receivables (b) | - | - | - | - | 29,029 | NM | NM | |||||||||||||||||||||
Loans (Net of Allowance for Loan Losses) (a) | 442,465 | 475,848 | 456,488 | 448,028 | 424,806 | (7 | ) | 4 | ||||||||||||||||||||
Private Equity Investments | 6,788 | 6,359 | 5,905 | 5,974 | 6,499 | 7 | 4 | |||||||||||||||||||||
Accrued Interest and Accounts Receivable | 23,663 | 22,891 | 21,178 | 24,418 | 21,657 | 3 | 9 | |||||||||||||||||||||
Premises and Equipment | 8,728 | 8,735 | 8,553 | 8,910 | 8,985 | - | (3 | ) | ||||||||||||||||||||
Goodwill | 45,063 | 45,186 | 43,372 | 43,498 | 43,899 | - | 3 | |||||||||||||||||||||
Other Intangible Assets: | ||||||||||||||||||||||||||||
Mortgage Servicing Rights | 7,937 | 7,546 | 7,378 | 8,247 | 7,539 | 5 | 5 | |||||||||||||||||||||
Purchased Credit Card Relationships | 2,758 | 2,935 | 2,982 | 3,138 | 3,243 | (6 | ) | (15 | ) | |||||||||||||||||||
All Other Intangibles | 4,205 | 4,371 | 4,078 | 4,231 | 4,832 | (4 | ) | (13 | ) | |||||||||||||||||||
Other Assets (a) | 55,036 | 51,765 | 53,181 | 54,981 | 49,159 | 6 | 12 | |||||||||||||||||||||
Assets of discontinued operations held-for-sale (c) | - | - | 1,385 | 1,233 | - | NM | NM | |||||||||||||||||||||
TOTAL ASSETS | $ | 1,408,918 | $ | 1,351,520 | $ | 1,338,029 | $ | 1,328,001 | $ | 1,273,282 | 4 | 11 | ||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||||
U.S. Offices: | ||||||||||||||||||||||||||||
Noninterest-Bearing | $ | 123,942 | $ | 132,781 | $ | 117,197 | $ | 127,311 | $ | 128,982 | (7 | ) | (4 | ) | ||||||||||||||
Interest-Bearing (a) | 342,368 | 337,812 | 310,401 | 312,517 | 309,779 | 1 | 11 | |||||||||||||||||||||
Non-U.S. Offices: | ||||||||||||||||||||||||||||
Noninterest-Bearing | 8,104 | 7,662 | 3,761 | 6,442 | 6,591 | 6 | 23 | |||||||||||||||||||||
Interest-Bearing (a) | 155,770 | 160,533 | 150,756 | 147,446 | 139,113 | (3 | ) | 12 | ||||||||||||||||||||
Total Deposits | 630,184 | 638,788 | 582,115 | 593,716 | 584,465 | (1 | ) | 8 | ||||||||||||||||||||
Federal Funds Purchased and Securities Sold under Repurchase Agreements (a) | 218,917 | 162,173 | 188,395 | 175,055 | 151,006 | 35 | 45 | |||||||||||||||||||||
Commercial Paper | 25,354 | 18,849 | 18,135 | 18,554 | 15,933 | 35 | 59 | |||||||||||||||||||||
Other Borrowed Funds (a) | 17,215 | 18,053 | 16,252 | 10,921 | 14,400 | (5 | ) | 20 | ||||||||||||||||||||
Trading Liabilities: | ||||||||||||||||||||||||||||
Debt and Equity Instruments | 96,606 | 90,488 | 106,784 | 105,445 | 104,160 | 7 | (7 | ) | ||||||||||||||||||||
Derivative Payables | 50,316 | 57,469 | 58,462 | 52,630 | 55,938 | (12 | ) | (10 | ) | |||||||||||||||||||
Accounts Payable, Accrued Expenses and Other Liabilities (including the Allowance for Lending-Related Commitments) | 87,603 | 88,096 | 73,585 | 82,569 | 73,693 | (1 | ) | 19 | ||||||||||||||||||||
Beneficial Interests Issued by Consolidated VIEs (a) | 13,109 | 16,184 | 16,254 | 15,432 | 42,237 | (19 | ) | (69 | ) | |||||||||||||||||||
Long-Term Debt (a) | 139,877 | 133,421 | 126,619 | 125,280 | 112,133 | 5 | 25 | |||||||||||||||||||||
Junior Subordinated Deferrable Interest Debentures Held by Trusts that Issued Guaranteed Capital Debt Securities | 12,033 | 12,209 | 13,309 | 10,827 | 10,980 | (1 | ) | 10 | ||||||||||||||||||||
Liabilities of discontinued operations held-for-sale (c) | - | - | 24,558 | 26,888 | - | NM | NM | |||||||||||||||||||||
TOTAL LIABILITIES | 1,291,214 | 1,235,730 | 1,224,468 | 1,217,317 | 1,164,945 | 4 | 11 | |||||||||||||||||||||
STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||||||
Common Stock | 3,658 | 3,658 | 3,658 | 3,658 | 3,645 | - | - | |||||||||||||||||||||
Capital Surplus | 77,760 | 77,807 | 77,457 | 77,098 | 76,153 | - | 2 | |||||||||||||||||||||
Retained Earnings (a) (d) | 48,105 | 43,600 | 40,283 | 38,208 | 35,892 | 10 | 34 | |||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | (1,482 | ) | (1,557 | ) | (526 | ) | (1,218 | ) | (1,017 | ) | 5 | (46 | ) | |||||||||||||||
Treasury Stock, at Cost | (10,337 | ) | (7,718 | ) | (7,311 | ) | (7,062 | ) | (6,336 | ) | (34 | ) | (63 | ) | ||||||||||||||
TOTAL STOCKHOLDERS’ EQUITY | 117,704 | 115,790 | 113,561 | 110,684 | 108,337 | 2 | 9 | |||||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,408,918 | $ | 1,351,520 | $ | 1,338,029 | $ | 1,328,001 | $ | 1,273,282 | 4 | 11 | ||||||||||||||||
(a) | Includes fair value amounts related to designated assets, liabilities or commitments for which the Firm has elected the fair value option of accounting. The Firm early adopted SFAS 157 and SFAS 159 effective January 1, 2007. | |
(b) | As a result of restructuring certain multi-seller conduits the Firm administers, during the second quarter of 2006, JPMorgan Chase deconsolidated $29 billion of Interests in Purchased Receivables, $3 billion of Loans and $1 billion of Securities, and recorded $33 billion of Lending-Related Commitments. | |
(c) | On October 1, 2006, the Firm completed the exchange of selected corporate trust businesses, including trustee, paying agent, loan agency and document management services, for the consumer, business banking and middle-market banking businesses of The Bank of New York. As a result of this transaction, assets and liabilities of this business were reclassified and reported as discontinued operations for the periods ended September 30, 2006 and June 30, 2006. JPMorgan Chase did not reclassify any Assets or Liabilities of discontinued operations held-for-sale at March 31, 2006. | |
(d) | The cumulative effect of changes in accounting principles increased Retained earnings as a result of implementing SFAS 157, SFAS 159 and FIN 48 was $922 million (after-tax) in the first quarter of 2007. |
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Table of Contents
JPMORGAN CHASE & CO. CONDENSED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS | ![]() |
(in millions, except rates)
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
AVERAGE BALANCES | ||||||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||
Deposits with Banks | $ | 16,224 | $ | 19,736 | $ | 31,291 | $ | 39,193 | $ | 20,672 | (18 | )% | (22 | )% | ||||||||||||||
Federal Funds Sold and Securities Purchased under Resale Agreements (a) | 135,499 | 144,744 | 125,618 | 128,740 | 129,268 | (6 | ) | 5 | ||||||||||||||||||||
Securities Borrowed | 78,768 | 82,184 | 82,216 | 86,742 | 84,220 | (4 | ) | (6 | ) | |||||||||||||||||||
Trading Assets - Debt Instruments | 257,079 | 218,188 | 213,164 | 204,551 | 185,679 | 18 | 38 | |||||||||||||||||||||
Securities | 95,326 | 89,962 | 78,029 | 82,845 | 60,216 | 6 | 58 | |||||||||||||||||||||
Interests in Purchased Receivables (b) | - | - | - | 26,221 | 30,028 | NM | NM | |||||||||||||||||||||
Loans (a) | 467,453 | 484,140 | 461,673 | 442,601 | 429,043 | (3 | ) | 9 | ||||||||||||||||||||
Total Interest-Earning Assets | 1,050,349 | 1,038,954 | 991,991 | 1,010,893 | 939,126 | 1 | 12 | |||||||||||||||||||||
Trading Assets - Equity Instruments | 88,791 | 81,985 | 75,366 | 70,045 | 70,762 | 8 | 25 | |||||||||||||||||||||
Goodwill | 37,341 | 37,868 | 35,338 | 35,586 | 36,759 | (1 | ) | 2 | ||||||||||||||||||||
Other Intangible Assets: | ||||||||||||||||||||||||||||
Mortgage Servicing Rights | 7,784 | 7,295 | 8,048 | 7,937 | 6,642 | 7 | 17 | |||||||||||||||||||||
All Other Intangible Assets | 14,923 | 14,773 | 15,250 | 15,456 | 14,127 | 1 | 6 | |||||||||||||||||||||
All Other Noninterest-Earning Assets (a) | 179,727 | 181,732 | 159,482 | 170,919 | 161,517 | (1 | ) | 11 | ||||||||||||||||||||
Assets of discontinued operations held-for-sale (c) | - | - | 23,664 | 23,033 | 19,424 | NM | NM | |||||||||||||||||||||
TOTAL ASSETS | $ | 1,378,915 | $ | 1,362,607 | $ | 1,309,139 | $ | 1,333,869 | $ | 1,248,357 | 1 | 10 | ||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||||||
Interest-Bearing Deposits (a) | $ | 498,717 | $ | 487,368 | $ | 451,509 | $ | 449,782 | $ | 419,903 | 2 | 19 | ||||||||||||||||
Federal Funds Purchased and Securities Sold under Repurchase Agreements | 199,252 | 198,166 | 192,674 | 184,943 | 158,818 | 1 | 25 | |||||||||||||||||||||
Commercial Paper | 22,339 | 18,787 | 19,207 | 17,484 | 15,310 | 19 | 46 | |||||||||||||||||||||
Other Borrowings (a) (d) | 95,664 | 96,499 | 101,366 | 103,150 | 107,702 | (1 | ) | (11 | ) | |||||||||||||||||||
Beneficial Interests Issued by Consolidated VIEs (a) | 15,993 | 15,769 | 13,630 | 43,470 | 42,192 | 1 | (62 | ) | ||||||||||||||||||||
Long-Term Debt (a) | 148,146 | 140,515 | 133,279 | 125,723 | 118,875 | 5 | 25 | |||||||||||||||||||||
Total Interest-Bearing Liabilities | 980,111 | 957,104 | 911,665 | 924,552 | 862,800 | 2 | 14 | |||||||||||||||||||||
Noninterest-Bearing Liabilities | 282,559 | 290,741 | 262,843 | 278,229 | 259,936 | (3 | ) | 9 | ||||||||||||||||||||
Liabilities of discontinued operations held-for-sale (c) | - | - | 22,825 | 22,131 | 18,317 | NM | NM | |||||||||||||||||||||
TOTAL LIABILITIES | 1,262,670 | 1,247,845 | 1,197,333 | 1,224,912 | 1,141,053 | 1 | 11 | |||||||||||||||||||||
Preferred Stock | - | - | - | - | 137 | NM | NM | |||||||||||||||||||||
Common Stockholders’ Equity (a) | 116,245 | 114,762 | 111,806 | 108,957 | 107,167 | 1 | 8 | |||||||||||||||||||||
TOTAL STOCKHOLDERS’ EQUITY | 116,245 | 114,762 | 111,806 | 108,957 | 107,304 | 1 | 8 | |||||||||||||||||||||
TOTAL LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ EQUITY | $ | 1,378,915 | $ | 1,362,607 | $ | 1,309,139 | $ | 1,333,869 | $ | 1,248,357 | 1 | 10 | ||||||||||||||||
AVERAGE RATES | ||||||||||||||||||||||||||||
INTEREST-EARNING ASSETS | ||||||||||||||||||||||||||||
Deposits with Banks | 4.65 | % | 5.18 | % | 4.46 | % | 4.43 | % | 4.31 | % | ||||||||||||||||||
Federal Funds Sold and Securities Purchased under Resale Agreements | 4.95 | 4.71 | 4.55 | 3.81 | 3.74 | |||||||||||||||||||||||
Securities Borrowed | 5.42 | 4.56 | 4.28 | 3.89 | 3.51 | |||||||||||||||||||||||
Trading Assets - Debt Instruments | 5.99 | 5.45 | 5.28 | 5.33 | 5.61 | |||||||||||||||||||||||
Securities | 5.68 | 5.57 | 5.70 | 5.45 | 5.34 | |||||||||||||||||||||||
Interests in Purchased Receivables | NM | NM | NM | 4.92 | 4.47 | |||||||||||||||||||||||
Loans | 7.53 | 7.35 | 7.37 | 7.25 | 7.06 | |||||||||||||||||||||||
Total Interest-Earning Assets | 6.45 | 6.17 | 6.08 | 5.82 | 5.75 | |||||||||||||||||||||||
INTEREST-BEARING LIABILITIES | ||||||||||||||||||||||||||||
Interest-Bearing Deposits | 4.06 | 3.99 | 3.93 | 3.67 | 3.43 | |||||||||||||||||||||||
Federal Funds Purchased and Securities Sold under Repurchase Agreements | 5.09 | 4.86 | 4.63 | 4.30 | 3.90 | |||||||||||||||||||||||
Commercial Paper | 4.89 | 4.76 | 4.78 | 4.31 | 3.97 | |||||||||||||||||||||||
Other Borrowings (d) | 5.07 | 4.75 | 5.13 | 4.93 | 5.16 | |||||||||||||||||||||||
Beneficial Interests Issued by Consolidated VIEs | 3.82 | 3.96 | 4.16 | 4.86 | 3.92 | |||||||||||||||||||||||
Long-Term Debt | 3.85 | 4.34 | 4.08 | 4.34 | 4.21 | |||||||||||||||||||||||
Total Interest-Bearing Liabilities | 4.35 | 4.31 | 4.26 | 4.09 | 3.87 | |||||||||||||||||||||||
INTEREST RATE SPREAD | 2.10 | % | 1.86 | % | 1.82 | % | 1.73 | % | 1.88 | % | ||||||||||||||||||
NET YIELD ON INTEREST-EARNING ASSETS | 2.39 | % | 2.19 | % | 2.17 | % | 2.07 | % | 2.19 | % | ||||||||||||||||||
NET YIELD ON INTEREST-EARNING ASSETS ADJUSTED FOR SECURITIZATIONS | 2.73 | % | 2.54 | % | 2.54 | % | 2.50 | % | 2.67 | % | ||||||||||||||||||
(a) | Includes fair value amounts related to designated assets, liabilities or commitments for which the Firm has elected the fair value option of accounting. The Firm early adopted SFAS 157 and SFAS 159 effective January 1, 2007. | |
(b) | As a result of restructuring certain multi-seller conduits the Firm administers, during the second quarter of 2006, JPMorgan Chase deconsolidated $29 billion of Interests in Purchased Receivables, $3 billion of Loans and $1 billion of Securities, and recorded $33 billion of Lending-Related Commitments. | |
(c) | As a result of the transaction with The Bank of New York, for purposes of the consolidated average balance sheet for assets and liabilities transferred to discontinued operations, JPMorgan Chase used Federal funds sold interest income as a reasonable estimate of the earnings on corporate trust deposits for the periods prior to the close of the transaction; therefore, JPMorgan Chase transferred to Assets of discontinued operations held-for-sale average Federal funds sold, along with the related interest income earned, and transferred to Liabilities of discontinued operations held-for-sale average corporate trust deposits. | |
(d) | Includes securities sold but not yet purchased. |
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JPMORGAN CHASE & CO. RECONCILIATION FROM REPORTED TO MANAGED SUMMARY | ![]() |
(in millions)
The Firm prepares its Consolidated financial statements using accounting principles generally accepted in the United States of America (“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 and the lines’ of business results on a “managed” basis, which is a non-GAAP financial measure. The Firm’s definition of managed basis starts with the reported U.S. GAAP results and includes certain reclassifications that assumes credit card loans securitized by Card Services remain on the balance sheet and presents revenue on a fully taxable-equivalent (“FTE”) basis. These adjustments do not have any impact on Net income as reported by the lines of business or by the Firm as a whole. The impact of these adjustments are summarized below. For additional information about managed basis, please refer to the Glossary of Terms on page 32.
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
CREDIT CARD INCOME | ||||||||||||||||||||||||||||
Credit Card Income - Reported | $ | 1,563 | $ | 1,645 | $ | 1,567 | $ | 1,791 | $ | 1,910 | (5 | )% | (18 | )% | ||||||||||||||
Impact of: | ||||||||||||||||||||||||||||
Credit Card Securitizations | (746 | ) | (726 | ) | (721 | ) | (937 | ) | (1,125 | ) | (3 | ) | 34 | |||||||||||||||
Credit Card Income - Managed | $ | 817 | $ | 919 | $ | 846 | $ | 854 | $ | 785 | (11 | ) | 4 | |||||||||||||||
OTHER INCOME | ||||||||||||||||||||||||||||
Other Income - Reported | $ | 518 | $ | 522 | $ | 635 | $ | 464 | $ | 554 | (1 | ) | (6 | ) | ||||||||||||||
Impact of: | ||||||||||||||||||||||||||||
Tax-Equivalent Adjustments | 110 | 195 | 165 | 170 | 146 | (44 | ) | (25 | ) | |||||||||||||||||||
Other Income - Managed | $ | 628 | $ | 717 | $ | 800 | $ | 634 | $ | 700 | (12 | ) | (10 | ) | ||||||||||||||
TOTAL NONINTEREST REVENUE | ||||||||||||||||||||||||||||
Total Noninterest Revenue - Reported | $ | 12,850 | $ | 10,501 | $ | 10,166 | $ | 9,908 | $ | 10,182 | 22 | 26 | ||||||||||||||||
Impact of: | ||||||||||||||||||||||||||||
Credit Card Securitizations | (746 | ) | (726 | ) | (721 | ) | (937 | ) | (1,125 | ) | (3 | ) | 34 | |||||||||||||||
Tax-Equivalent Adjustments | 110 | 195 | 165 | 170 | 146 | (44 | ) | (25 | ) | |||||||||||||||||||
Total Noninterest Revenue - Managed | $ | 12,214 | $ | 9,970 | $ | 9,610 | $ | 9,141 | $ | 9,203 | 23 | 33 | ||||||||||||||||
NET INTEREST INCOME | ||||||||||||||||||||||||||||
Net Interest Income - Reported | $ | 6,118 | $ | 5,692 | $ | 5,379 | $ | 5,178 | $ | 4,993 | 7 | 23 | ||||||||||||||||
Impact of: | ||||||||||||||||||||||||||||
Credit Card Securitizations | 1,339 | 1,319 | 1,328 | 1,498 | 1,574 | 2 | (15 | ) | ||||||||||||||||||||
Tax-Equivalent Adjustments | 70 | 53 | 57 | 47 | 71 | 32 | (1 | ) | ||||||||||||||||||||
Net Interest Income - Managed | $ | 7,527 | $ | 7,064 | $ | 6,764 | $ | 6,723 | $ | 6,638 | 7 | 13 | ||||||||||||||||
TOTAL NET REVENUE | ||||||||||||||||||||||||||||
Total Net Revenue - Reported | $ | 18,968 | $ | 16,193 | $ | 15,545 | $ | 15,086 | $ | 15,175 | 17 | 25 | ||||||||||||||||
Impact of: | ||||||||||||||||||||||||||||
Credit Card Securitizations | 593 | 593 | 607 | 561 | 449 | - | 32 | |||||||||||||||||||||
Tax-Equivalent Adjustments | 180 | 248 | 222 | 217 | 217 | (27 | ) | (17 | ) | |||||||||||||||||||
Total Net Revenue - Managed | $ | 19,741 | $ | 17,034 | $ | 16,374 | $ | 15,864 | $ | 15,841 | 16 | 25 | ||||||||||||||||
PROVISION FOR CREDIT LOSSES | ||||||||||||||||||||||||||||
Provision for Credit Losses - Reported | $ | 1,008 | $ | 1,134 | $ | 812 | $ | 493 | $ | 831 | (11 | ) | 21 | |||||||||||||||
Impact of: | ||||||||||||||||||||||||||||
Credit Card Securitizations | 593 | 593 | 607 | 561 | 449 | - | 32 | |||||||||||||||||||||
Provision for Credit Losses - Managed | $ | 1,601 | $ | 1,727 | $ | 1,419 | $ | 1,054 | $ | 1,280 | (7 | ) | 25 | |||||||||||||||
INCOME TAX EXPENSE | ||||||||||||||||||||||||||||
Income Tax Expense - Reported | $ | 2,545 | $ | 1,268 | $ | 1,705 | $ | 1,727 | $ | 1,537 | 101 | 66 | ||||||||||||||||
Impact of: | ||||||||||||||||||||||||||||
Tax-Equivalent Adjustments | 180 | 248 | 222 | 217 | 217 | (27 | ) | (17 | ) | |||||||||||||||||||
Income Tax Expense - Managed | $ | 2,725 | $ | 1,516 | $ | 1,927 | $ | 1,944 | $ | 1,754 | 80 | 55 | ||||||||||||||||
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JPMORGAN CHASE & CO. LINE OF BUSINESS FINANCIAL HIGHLIGHTS - MANAGED BASIS | ![]() |
(in millions, except ratio data)
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
TOTAL NET REVENUE (FTE) | ||||||||||||||||||||||||||||
Investment Bank | $ | 6,254 | $ | 4,860 | $ | 4,816 | $ | 4,329 | $ | 4,828 | 29 | % | 30 | % | ||||||||||||||
Retail Financial Services | 4,106 | 3,728 | 3,555 | 3,779 | 3,763 | 10 | 9 | |||||||||||||||||||||
Card Services | 3,680 | 3,750 | 3,646 | 3,664 | 3,685 | (2 | ) | - | ||||||||||||||||||||
Commercial Banking | 1,003 | 1,018 | 933 | 949 | 900 | (1 | ) | 11 | ||||||||||||||||||||
Treasury & Securities Services | 1,526 | 1,537 | 1,499 | 1,588 | 1,485 | (1 | ) | 3 | ||||||||||||||||||||
Asset Management | 1,904 | 1,947 | 1,636 | 1,620 | 1,584 | (2 | ) | 20 | ||||||||||||||||||||
Corporate | 1,268 | 194 | 289 | (65 | ) | (404 | ) | NM | NM | |||||||||||||||||||
TOTAL NET REVENUE | $ | 19,741 | $ | 17,034 | $ | 16,374 | $ | 15,864 | $ | 15,841 | 16 | 25 | ||||||||||||||||
NET INCOME (LOSS) | ||||||||||||||||||||||||||||
Investment Bank | $ | 1,540 | $ | 1,009 | $ | 976 | $ | 839 | $ | 850 | 53 | 81 | ||||||||||||||||
Retail Financial Services | 859 | 718 | 746 | 868 | 881 | 20 | (2 | ) | ||||||||||||||||||||
Card Services | 765 | 719 | 711 | 875 | 901 | 6 | (15 | ) | ||||||||||||||||||||
Commercial Banking | 304 | 256 | 231 | 283 | 240 | 19 | 27 | |||||||||||||||||||||
Treasury & Securities Services | 263 | 256 | 256 | 316 | 262 | 3 | - | |||||||||||||||||||||
Asset Management | 425 | 407 | 346 | 343 | 313 | 4 | 36 | |||||||||||||||||||||
Corporate (a) | 631 | 1,161 | 31 | 16 | (366 | ) | (46 | ) | NM | |||||||||||||||||||
TOTAL NET INCOME (b) | $ | 4,787 | $ | 4,526 | $ | 3,297 | $ | 3,540 | $ | 3,081 | 6 | 55 | ||||||||||||||||
AVERAGE EQUITY (c) | ||||||||||||||||||||||||||||
Investment Bank | $ | 21,000 | $ | 21,000 | $ | 21,000 | $ | 21,000 | $ | 20,000 | - | 5 | ||||||||||||||||
Retail Financial Services | 16,000 | 16,000 | 14,300 | 14,300 | 13,896 | - | 15 | |||||||||||||||||||||
Card Services | 14,100 | 14,100 | 14,100 | 14,100 | 14,100 | - | - | |||||||||||||||||||||
Commercial Banking | 6,300 | 6,300 | 5,500 | 5,500 | 5,500 | - | 15 | |||||||||||||||||||||
Treasury & Securities Services | 3,000 | 2,200 | 2,200 | 2,200 | 2,545 | 36 | 18 | |||||||||||||||||||||
Asset Management | 3,750 | 3,500 | 3,500 | 3,500 | 3,500 | 7 | 7 | |||||||||||||||||||||
Corporate | 52,095 | 51,662 | 51,206 | 48,357 | 47,626 | 1 | 9 | |||||||||||||||||||||
TOTAL AVERAGE EQUITY | $ | 116,245 | $ | 114,762 | $ | 111,806 | $ | 108,957 | $ | 107,167 | 1 | 8 | ||||||||||||||||
RETURN ON EQUITY (c) | ||||||||||||||||||||||||||||
Investment Bank | 30 | % | 19 | % | 18 | % | 16 | % | 17 | % | ||||||||||||||||||
Retail Financial Services | 22 | 18 | 21 | 24 | 26 | |||||||||||||||||||||||
Card Services | 22 | 20 | 20 | 25 | 26 | |||||||||||||||||||||||
Commercial Banking | 20 | 16 | 17 | 21 | 18 | |||||||||||||||||||||||
Treasury & Securities Services | 36 | 46 | 46 | 58 | 42 | |||||||||||||||||||||||
Asset Management | 46 | 46 | 39 | 39 | 36 |
(a) | Includes the after-tax impact of discontinued operations, insurance recoveries related to material litigation actions, tax audit benefits and Merger costs. See Corporate for additional details. | |
(b) | Net income includes Income from discontinued operations (after-tax) of $620 million, $65 million, $56 million and $54 million for the quarters ended December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. There was no Income from discontinued operations in the first quarter of 2007. | |
(c) | Each business segment is allocated capital by taking into consideration stand-alone peer comparisons, economic risk measures and regulatory capital requirements. The amount of capital assigned to each business is referred to as equity. Effective January 1, 2006, the Firm refined its methodology to allocate capital to the business segments to include any goodwill associated with line of business-directed acquisitions since the Merger. |
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JPMORGAN CHASE & CO. INVESTMENT BANK | ![]() | |
FINANCIAL HIGHLIGHTS (in millions, except ratio data) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
INCOME STATEMENT | ||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||
Investment Banking Fees | $ | 1,729 | $ | 1,580 | $ | 1,419 | $ | 1,368 | $ | 1,170 | 9 | % | 48 | % | ||||||||||||||
Principal Transactions (a) (b) | 3,126 | 2,327 | 2,548 | 2,157 | 2,480 | 34 | 26 | |||||||||||||||||||||
Lending & Deposit Related Fees | 93 | 119 | 127 | 134 | 137 | (22 | ) | (32 | ) | |||||||||||||||||||
Asset Management, Administration and Commissions (b) | 641 | 569 | 512 | 583 | 576 | 13 | 11 | |||||||||||||||||||||
All Other Income | 42 | 91 | 159 | 3 | 275 | (54 | ) | (85 | ) | |||||||||||||||||||
Noninterest Revenue | 5,631 | 4,686 | 4,765 | 4,245 | 4,638 | 20 | 21 | |||||||||||||||||||||
Net Interest Income | 623 | (f) | 174 | 51 | 84 | 190 | 258 | 228 | ||||||||||||||||||||
TOTAL NET REVENUE (c) | 6,254 | 4,860 | 4,816 | 4,329 | 4,828 | 29 | 30 | |||||||||||||||||||||
Provision for Credit Losses | 63 | 63 | 7 | (62 | ) | 183 | - | (66 | ) | |||||||||||||||||||
Credit Reimbursement from TSS (d) | 30 | 31 | 30 | 30 | 30 | (3 | ) | - | ||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||
Compensation Expense | 2,637 | 1,880 | 2,093 | 1,961 | 2,256 | 40 | 17 | |||||||||||||||||||||
Noncompensation Expense (b) | 1,194 | 1,325 | 1,151 | 1,130 | 1,064 | (10 | ) | 12 | ||||||||||||||||||||
TOTAL NONINTEREST EXPENSE | 3,831 | 3,205 | 3,244 | 3,091 | 3,320 | 20 | 15 | |||||||||||||||||||||
Income Before Income Tax Expense | 2,390 | 1,623 | 1,595 | 1,330 | 1,355 | 47 | 76 | |||||||||||||||||||||
Income Tax Expense | 850 | 614 | 619 | 491 | 505 | 38 | 68 | |||||||||||||||||||||
NET INCOME | $ | 1,540 | $ | 1,009 | $ | 976 | $ | 839 | $ | 850 | 53 | 81 | ||||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||||||||||
ROE | 30 | % | 19 | % | 18 | % | 16 | % | 17 | % | ||||||||||||||||||
ROA | 0.95 | 0.62 | 0.62 | 0.50 | 0.53 | |||||||||||||||||||||||
Overhead Ratio | 61 | 66 | 67 | 71 | 69 | |||||||||||||||||||||||
Compensation Expense as a % of Total Net Revenue (e) | 42 | 38 | 42 | 44 | 41 | |||||||||||||||||||||||
REVENUE BY BUSINESS | ||||||||||||||||||||||||||||
Investment Banking Fees: | ||||||||||||||||||||||||||||
Advisory | $ | 472 | $ | 482 | $ | 436 | $ | 352 | $ | 389 | (2 | ) | 21 | |||||||||||||||
Equity Underwriting | 393 | 327 | 275 | 364 | 212 | 20 | 85 | |||||||||||||||||||||
Debt Underwriting | 864 | 771 | 708 | 652 | 569 | 12 | 52 | |||||||||||||||||||||
Total Investment Banking Fees | 1,729 | 1,580 | 1,419 | 1,368 | 1,170 | 9 | 48 | |||||||||||||||||||||
Fixed Income Markets | 2,592 | 2,061 | 2,468 | 2,131 | 2,076 | 26 | 25 | |||||||||||||||||||||
Equity Markets | 1,539 | 958 | 658 | 580 | 1,262 | 61 | 22 | |||||||||||||||||||||
Credit Portfolio | 394 | 261 | 271 | 250 | 320 | 51 | 23 | |||||||||||||||||||||
Total Net Revenue | $ | 6,254 | $ | 4,860 | $ | 4,816 | $ | 4,329 | $ | 4,828 | 29 | 30 | ||||||||||||||||
REVENUE BY REGION | ||||||||||||||||||||||||||||
Americas | $ | 3,366 | $ | 2,535 | $ | 2,803 | $ | 2,110 | $ | 2,153 | 33 | 56 | ||||||||||||||||
Europe/Middle East/Africa | 2,251 | 1,886 | 1,714 | 1,796 | 2,025 | 19 | 11 | |||||||||||||||||||||
Asia/Pacific | 637 | 439 | 299 | 423 | 650 | 45 | (2 | ) | ||||||||||||||||||||
Total Net Revenue | $ | 6,254 | $ | 4,860 | $ | 4,816 | $ | 4,329 | $ | 4,828 | 29 | 30 | ||||||||||||||||
(a) | As a result of the adoption on January 1, 2007, of SFAS 157, the IB recognized a benefit, in the current quarter, of $166 million in Net revenue (primarily in Credit Portfolio, but with smaller impacts to Equity Markets and Fixed Income Markets) relating to the incorporation of an adjustment to the valuation of the Firm’s derivative liabilities and other liabilities measured at fair value that reflects the credit quality of the Firm. | |
(b) | Certain transaction costs, previously reported within Revenue, have been reclassified to Noninterest expense. Revenue and Noninterest expense have been reclassified for all periods presented. | |
(c) | Total net revenue includes tax-equivalent adjustments, primarily due to tax-exempt income from municipal bond investments and income tax credits related to affordable housing investments, of $152 million, $218 million, $197 million, $193 million and $194 million for the quarters ended March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006. | |
(d) | Treasury & Securities Services (“TSS”) is charged a credit reimbursement related to certain exposures managed within the Investment Bank (“IB”) credit portfolio on behalf of clients shared with TSS. | |
(e) | For the quarters ended December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, the Compensation expense to Total net revenue ratio is adjusted to present this ratio as if SFAS 123R had always been in effect. IB management believes that adjusting the Compensation expense to Total net revenue ratio for the incremental impact of adopting SFAS 123R provides a more meaningful measure of IB’s Compensation expense to Total net revenue ratio for 2006. | |
(f) | Net Interest Income for the quarter ended March 31, 2007 increased from the prior quarter primarily due to the adoption of SFAS 159. For certain IB structured notes elected, all components of earnings are reported in Principal Transactions, this caused a shift between Principal Transactions and Net Interest Income in the current quarter. |
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JPMORGAN CHASE & CO. INVESTMENT BANK | ![]() | |
FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except headcount, ratio and rankings data) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
SELECTED BALANCE SHEETS DATA (Average) | ||||||||||||||||||||||||||||
Total Assets | $ | 658,724 | $ | 645,993 | $ | 626,245 | $ | 672,056 | $ | 646,220 | 2 | % | 2 | % | ||||||||||||||
Trading Assets - Debt and Equity Instruments | 335,118 | 295,317 | 283,915 | 268,091 | 252,415 | 13 | 33 | |||||||||||||||||||||
Trading Assets - Derivative Receivables | 56,398 | 59,802 | 53,184 | 55,692 | 49,388 | (6 | ) | 14 | ||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||
Loans Retained (a) | 59,873 | 60,947 | 61,623 | 59,026 | 53,678 | (2 | ) | 12 | ||||||||||||||||||||
Loans Held-for-Sale (b) | 12,784 | 23,743 | 24,030 | 19,920 | 19,212 | (46 | ) | (33 | ) | |||||||||||||||||||
Total Loans | 72,657 | 84,690 | 85,653 | 78,946 | 72,890 | (14 | ) | - | ||||||||||||||||||||
Adjusted Assets (c) | 572,017 | 548,628 | 539,278 | 530,057 | 492,304 | 4 | 16 | |||||||||||||||||||||
Equity | 21,000 | 21,000 | 21,000 | 21,000 | 20,000 | - | 5 | |||||||||||||||||||||
Headcount | 23,892 | 23,729 | 23,447 | 22,914 | 21,705 | 1 | 10 | |||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||
Net Charge-offs (Recoveries) | $ | (6 | ) | $ | 10 | $ | (8 | ) | $ | (12 | ) | $ | (21 | ) | NM | 71 | ||||||||||||
Nonperforming Assets: | ||||||||||||||||||||||||||||
- Nonperforming Loans (d) | 92 | 231 | 420 | 488 | 434 | (60 | ) | (79 | ) | |||||||||||||||||||
- Other Nonperforming Assets | 36 | 38 | 36 | 37 | 50 | (5 | ) | (28 | ) | |||||||||||||||||||
Allowance for Loan Losses | 1,037 | 1,052 | 1,010 | 1,038 | 1,117 | (1 | ) | (7 | ) | |||||||||||||||||||
Allowance for Lending-Related Commitments | 310 | 305 | 292 | 249 | 220 | 2 | 41 | |||||||||||||||||||||
Net Charge-off (Recovery) Rate (a) (b) | (0.04 | )% | 0.07 | % | (0.05 | )% | (0.08 | )% | (0.16 | )% | ||||||||||||||||||
Allowance for Loan Losses to Average Loans (a) (b) | 1.76 | 1.73 | 1.64 | 1.76 | 2.08 | |||||||||||||||||||||||
Allowance for Loan Losses to Nonperforming Loans (d) | 1,178 | 461 | 253 | 248 | 305 | |||||||||||||||||||||||
Nonperforming Loans to Average Loans | 0.13 | 0.27 | 0.49 | 0.62 | 0.60 | |||||||||||||||||||||||
MARKET RISK - AVERAGE TRADING AND CREDIT PORTFOLIO VAR | ||||||||||||||||||||||||||||
Trading Activities: | ||||||||||||||||||||||||||||
Fixed Income | $ | 45 | $ | 51 | $ | 63 | $ | 52 | $ | 60 | (12 | ) | (25 | ) | ||||||||||||||
Foreign Exchange | 19 | 20 | 24 | 25 | 20 | (5 | ) | (5 | ) | |||||||||||||||||||
Equities | 42 | 35 | 32 | 24 | 32 | 20 | 31 | |||||||||||||||||||||
Commodities and Other | 34 | 35 | 46 | 52 | 47 | (3 | ) | (28 | ) | |||||||||||||||||||
Diversification (e) | (58 | ) | (58 | ) | (82 | ) | (74 | ) | (68 | ) | - | 15 | ||||||||||||||||
Total Trading VAR | 82 | 83 | 83 | 79 | 91 | (1 | ) | (10 | ) | |||||||||||||||||||
Credit Portfolio VAR (f) | 13 | 15 | 14 | 14 | 14 | (13 | ) | (7 | ) | |||||||||||||||||||
Diversification (e) | (12 | ) | (11 | ) | (8 | ) | (9 | ) | (11 | ) | (9 | ) | (9 | ) | ||||||||||||||
Total Trading and Credit Portfolio VAR | $ | 83 | $ | 87 | $ | 89 | $ | 84 | $ | 94 | (5 | ) | (12 | ) | ||||||||||||||
March 31, 2007 YTD | Full Year 2006 | |||||||||||||||
MARKET SHARES AND RANKINGS (g) | Market Share | Rankings | Market Share | Rankings | ||||||||||||
Global Debt, Equity and Equity-Related | 8 | % | # 2 | 7 | % | # 2 | ||||||||||
Global Syndicated Loans | 15 | % | # 1 | 14 | % | # 1 | ||||||||||
Global Long-Term Debt | 8 | % | # 2 | 6 | % | # 3 | ||||||||||
Global Equity and Equity-Related | 13 | % | # 1 | 7 | % | # 6 | ||||||||||
Global Announced M&A | 23 | % | # 2 | 22 | % | # 4 | ||||||||||
U.S. Debt, Equity and Equity-Related | 11 | % | # 2 | 9 | % | # 3 | ||||||||||
U.S. Syndicated Loans | 27 | % | # 1 | 26 | % | # 1 | ||||||||||
U.S. Long-Term Debt | 12 | % | # 2 | 12 | % | # 2 | ||||||||||
U.S. Equity and Equity-Related | 19 | % | # 1 | 8 | % | # 6 | ||||||||||
U.S. Announced M&A | 39 | % | # 2 | 28 | % | # 4 |
(a) | Loans retained include credit portfolio, conduit loans, leveraged leases, bridge loans for underwriting, other accrual loans and certain loans carried at fair value. Average loans carried at fair value were $900 million for the quarter ended March 31, 2007. This amount is excluded from Total loans for the allowance coverage ratio and Net charge-off rate. | |
(b) | Loans held-for-sale (which include loan syndications and warehouse loans held as part of the IB’s mortgage-backed, asset-backed and other securitization businesses) are excluded from the allowance coverage ratio and Net charge-off rate. Loans held-for-sale for the quarter ended March 31, 2007 reflect the impact of reclassifying approximately $12.0 billion of Loans held-for-sale to Trading assets as a result of the adoption of SFAS 159 effective January 1, 2007. | |
(c) | Adjusted assets, a non-GAAP financial measure, equals Total assets minus (1) Securities purchased under resale agreements and Securities borrowed less securities sold, not yet purchased; (2) assets of variable interest entities (VIEs) consolidated under FIN 46R; (3) cash and securities segregated and on deposit for regulatory and other purposes; and (4) goodwill and intangibles. The amount of adjusted assets is presented to assist the reader in comparing the IB’s asset and capital levels to other investment banks in the securities industry. Asset-to-equity leverage ratios are commonly used as one measure to assess a company’s capital adequacy. The IB believes an adjusted asset amount that excludes the assets discussed above, which are considered to have a low risk profile, provides a more meaningful measure of balance sheet leverage in the securities industry. | |
(d) | Nonperforming loans include Loans held-for-sale of $4 million, $3 million, $21 million, $70 million and $68 million at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively, which are excluded from the allowance coverage ratios. Nonperforming loans exclude distressed HFS loans purchased as part of IB’s proprietary activities (beginning January 1, 2007, fair value accounting was elected for this portfolio). | |
(e) | Average VARs are less than the sum of the VARs of its market risk components, which is due to risk offsets resulting from portfolio diversification. The diversification effect reflects the fact that the risks are not perfectly correlated. The risk of a portfolio of positions is therefore usually less than the sum of the risks of the positions themselves. | |
(f) | Includes VAR on derivative credit and debt valuation adjustments, hedges of the credit valuation adjustment and mark-to-market hedges of the retained loan portfolio, which are all reported in Principal Transactions. This VAR does not include the retained loan portfolio, which is not marked to market. | |
(g) | Source: Thomson Financial Securities data. Global announced M&A is based on rank value; all other rankings are based upon proceeds, with full credit to each book manager/equal if joint. Because of joint assignments, market share of all participants will add up to more than 100%. |
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JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS (in millions, except ratio and headcount data) | ![]() |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
INCOME STATEMENT | ||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||
Lending & Deposit Related Fees | $ | 423 | $ | 430 | $ | 406 | $ | 390 | $ | 371 | (2 | )% | 14 | % | ||||||||||||||
Asset Management, Administration and Commissions | 263 | 293 | 326 | 366 | 437 | (10 | ) | (40 | ) | |||||||||||||||||||
Securities Gains (Losses) | - | (5 | ) | (7 | ) | (39 | ) | (6 | ) | NM | NM | |||||||||||||||||
Mortgage Fees and Related Income (a) | 482 | 111 | 67 | 204 | 236 | 334 | 104 | |||||||||||||||||||||
Credit Card Income | 142 | 143 | 136 | 129 | 115 | (1 | ) | 23 | ||||||||||||||||||||
All Other Income | 179 | 176 | 170 | 163 | 48 | 2 | 273 | |||||||||||||||||||||
Noninterest Revenue | 1,489 | 1,148 | 1,098 | 1,213 | 1,201 | 30 | 24 | |||||||||||||||||||||
Net Interest Income | 2,617 | 2,580 | 2,457 | 2,566 | 2,562 | 1 | 2 | |||||||||||||||||||||
TOTAL NET REVENUE | 4,106 | 3,728 | 3,555 | 3,779 | 3,763 | 10 | 9 | |||||||||||||||||||||
Provision for Credit Losses | 292 | 262 | 114 | 100 | 85 | 11 | 244 | |||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||
Compensation Expense (a) | 1,065 | 950 | 886 | 901 | 920 | 12 | 16 | |||||||||||||||||||||
Noncompensation Expense (a) | 1,224 | 1,211 | 1,142 | 1,246 | 1,207 | 1 | 1 | |||||||||||||||||||||
Amortization of Intangibles | 118 | 130 | 111 | 112 | 111 | (9 | ) | 6 | ||||||||||||||||||||
TOTAL NONINTEREST EXPENSE | 2,407 | 2,291 | 2,139 | 2,259 | 2,238 | 5 | 8 | |||||||||||||||||||||
Income Before Income Tax Expense | 1,407 | 1,175 | 1,302 | 1,420 | 1,440 | 20 | (2 | ) | ||||||||||||||||||||
Income Tax Expense | 548 | 457 | 556 | 552 | 559 | 20 | (2 | ) | ||||||||||||||||||||
NET INCOME | $ | 859 | $ | 718 | $ | 746 | $ | 868 | $ | 881 | 20 | (2 | ) | |||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||||||||||
ROE | 22 | % | 18 | % | 21 | % | 24 | % | 26 | % | ||||||||||||||||||
Overhead Ratio | 59 | 61 | 60 | 60 | 59 | |||||||||||||||||||||||
Overhead Ratio Excluding Core Deposit Intangibles (b) | 56 | 58 | 57 | 57 | 57 | |||||||||||||||||||||||
SELECTED BALANCE SHEETS (Ending) | ||||||||||||||||||||||||||||
Assets | $ | 212,997 | $ | 237,887 | $ | 227,056 | $ | 233,748 | $ | 235,127 | (10 | ) | (9 | ) | ||||||||||||||
Loans, including Trading Loans (c) (d) | 188,468 | 213,504 | 205,554 | 203,928 | 202,591 | (12 | ) | (7 | ) | |||||||||||||||||||
Deposits | 221,840 | 214,081 | 198,260 | 198,273 | 200,154 | 4 | 11 | |||||||||||||||||||||
SELECTED BALANCE SHEETS (Average) | ||||||||||||||||||||||||||||
Assets | $ | 217,135 | $ | 235,301 | $ | 225,307 | $ | 234,097 | $ | 231,587 | (8 | ) | (6 | ) | ||||||||||||||
Loans, including Trading Loans (e) (f) | 190,979 | 211,654 | 203,307 | 201,635 | 198,797 | (10 | ) | (4 | ) | |||||||||||||||||||
Deposits | 216,933 | 211,915 | 198,967 | 199,075 | 194,382 | 2 | 12 | |||||||||||||||||||||
Equity | 16,000 | 16,000 | 14,300 | 14,300 | 13,896 | - | 15 | |||||||||||||||||||||
Headcount | 67,247 | 65,570 | 61,915 | 62,450 | 62,472 | 3 | 8 | |||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||
Net Charge-offs | $ | 185 | $ | 214 | $ | 128 | $ | 113 | $ | 121 | (14 | ) | 53 | |||||||||||||||
Nonperforming Loans (g) | 1,655 | 1,677 | 1,404 | 1,339 | 1,349 | (1 | ) | 23 | ||||||||||||||||||||
Nonperforming Assets | 1,910 | 1,902 | 1,595 | 1,520 | 1,537 | - | 24 | |||||||||||||||||||||
Allowance for Loan Losses | 1,453 | 1,392 | 1,306 | 1,321 | 1,333 | 4 | 9 | |||||||||||||||||||||
Net Charge-off Rate (e) (f) | 0.46 | % | 0.45 | % | 0.27 | % | 0.24 | % | 0.27 | % | ||||||||||||||||||
Allowance for Loan Losses to Ending Loans (c) (d) | 0.89 | 0.77 | 0.69 | 0.69 | 0.71 | |||||||||||||||||||||||
Allowance for Loan Losses to Nonperforming Loans (g) | 94 | 89 | 95 | 99 | 100 | |||||||||||||||||||||||
Nonperforming Loans to Total Loans | 0.88 | 0.79 | 0.68 | 0.66 | 0.67 |
(a) | As a result of the adoption of SFAS 159, certain loan origination costs have been reclassified to Expense (previously netted against Revenue) in the quarter ended March 31, 2007. | |
(b) | Retail Financial Services uses the overhead ratio (excluding the amortization of core deposit intangibles (“CDI”)), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in the overhead ratio calculation results in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this would result in an improving overhead ratio over time, all things remaining equal. This non-GAAP ratio excludes Regional Banking’s core deposit intangible amortization expense related to the Bank of New York transaction and the Merger of $116 million, $130 million, $109 million, $110 million and $109 million for the quarters ending March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. | |
(c) | End-of-period Loans include prime mortgage loans accounted for at fair value under SFAS 159 of $11.6 billion at March 31, 2007. These loans are classified as Trading Assets on the Consolidated balance sheet and are not included in the allowance coverage ratio. | |
(d) | End-of-period Loans include Loans held-for-sale of $13.4 billion, $32.7 billion, $17.0 billion, $11.8 billion and $14.3 billion at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts are not included in the allowance coverage ratios. | |
(e) | Average loans include prime mortgage loans accounted for at fair value under SFAS 159 of $6.5 billion for the quarter ended March 31, 2007. These loans are classified as Trading Assets on the Consolidated balance sheet and are not included in the Net charge-off rate. | |
(f) | Average loans include Loans held-for-sale of $21.7 billion, $21.2 billion, $14.0 billion, $12.9 billion and $16.4 billion for the quarters ended March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts are not included in the Net charge-off rate. | |
(g) | Nonperforming loans include Loans held-for-sale of $112 million, $116 million, $24 million, $9 million and $16 million at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts are not included in the allowance coverage ratios. |
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JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) | ![]() |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
REGIONAL BANKING | ||||||||||||||||||||||||||||
Noninterest Revenue | $ | 793 | $ | 678 | $ | 855 | $ | 851 | $ | 820 | 17 | % | (3 | )% | ||||||||||||||
Net Interest Income | 2,299 | 2,229 | 2,107 | 2,212 | 2,220 | 3 | 4 | |||||||||||||||||||||
Total Net Revenue | 3,092 | 2,907 | 2,962 | 3,063 | 3,040 | 6 | 2 | |||||||||||||||||||||
Provision for Credit Losses | 233 | 165 | 53 | 70 | 66 | 41 | 253 | |||||||||||||||||||||
Noninterest Expense | 1,729 | 1,730 | 1,611 | 1,746 | 1,738 | - | (1 | ) | ||||||||||||||||||||
Income Before Income Tax Expense | 1,130 | 1,012 | 1,298 | 1,247 | 1,236 | 12 | (9 | ) | ||||||||||||||||||||
Net Income | 690 | 619 | 744 | 764 | 757 | 11 | (9 | ) | ||||||||||||||||||||
ROE | 24 | % | 21 | % | 29 | % | 30 | % | 31 | % | ||||||||||||||||||
Overhead Ratio | 56 | 60 | 54 | 57 | 57 | |||||||||||||||||||||||
Overhead Ratio Excluding Core Deposit Intangibles (a) | 52 | 55 | 51 | 53 | 54 | |||||||||||||||||||||||
BUSINESS METRICS (in billions) | ||||||||||||||||||||||||||||
Home Equity Origination Volume | $ | 12.7 | $ | 12.9 | $ | 13.3 | $ | 14.0 | $ | 11.7 | (2 | ) | 9 | |||||||||||||||
End of Period Loans Owned: | ||||||||||||||||||||||||||||
Home Equity | $ | 87.7 | $ | 85.7 | $ | 80.4 | $ | 77.8 | $ | 75.3 | 2 | 16 | ||||||||||||||||
Mortgage (b) | 9.2 | 30.1 | 46.6 | 48.6 | 47.0 | (69 | ) | (80 | ) | |||||||||||||||||||
Business Banking | 14.3 | 14.1 | 13.1 | 13.0 | 12.8 | 1 | 12 | |||||||||||||||||||||
Education | 11.1 | 10.3 | 9.4 | 8.3 | 9.5 | 8 | 17 | |||||||||||||||||||||
Other Loans (c) | 2.7 | 2.7 | 2.2 | 2.6 | 2.7 | - | - | |||||||||||||||||||||
Total End of Period Loans | 125.0 | 142.9 | 151.7 | 150.3 | 147.3 | (13 | ) | (15 | ) | |||||||||||||||||||
End of Period Deposits: | ||||||||||||||||||||||||||||
Checking | $ | 69.3 | $ | 68.7 | $ | 59.8 | $ | 62.3 | $ | 64.9 | 1 | 7 | ||||||||||||||||
Savings | 100.1 | 92.4 | 86.9 | 89.1 | 91.0 | 8 | 10 | |||||||||||||||||||||
Time and Other | 42.2 | 43.3 | 41.5 | 36.5 | 34.2 | (3 | ) | 23 | ||||||||||||||||||||
Total End of Period Deposits | 211.6 | 204.4 | 188.2 | 187.9 | 190.1 | 4 | 11 | |||||||||||||||||||||
Average Loans Owned: | ||||||||||||||||||||||||||||
Home Equity | $ | 86.3 | $ | 84.2 | $ | 78.8 | $ | 76.2 | $ | 74.1 | 2 | 16 | ||||||||||||||||
Mortgage Loans (b) | 8.9 | 40.8 | 47.8 | 47.1 | 44.6 | (78 | ) | (80 | ) | |||||||||||||||||||
Business Banking | 14.3 | 14.0 | 13.0 | 13.0 | 12.8 | 2 | 12 | |||||||||||||||||||||
Education | 11.0 | 9.9 | 8.9 | 8.7 | 5.4 | 11 | 104 | |||||||||||||||||||||
Other Loans (c) | 3.0 | 2.7 | 2.2 | 2.6 | 3.0 | 11 | - | |||||||||||||||||||||
Total Average Loans (d) | 123.5 | 151.6 | 150.7 | 147.6 | 139.9 | (19 | ) | (12 | ) | |||||||||||||||||||
Average Deposits: | ||||||||||||||||||||||||||||
Checking | $ | 67.3 | $ | 65.5 | $ | 60.3 | $ | 62.6 | $ | 63.0 | 3 | 7 | ||||||||||||||||
Savings | 96.7 | 92.2 | 88.1 | 89.8 | 89.3 | 5 | 8 | |||||||||||||||||||||
Time and Other | 42.5 | 43.0 | 39.0 | 35.4 | 32.4 | (1 | ) | 31 | ||||||||||||||||||||
Total Average Deposits | 206.5 | 200.7 | 187.4 | 187.8 | 184.7 | 3 | 12 | |||||||||||||||||||||
Average Assets | 135.9 | 162.5 | 159.1 | 164.6 | 157.1 | (16 | ) | (13 | ) | |||||||||||||||||||
Average Equity | 11.8 | 11.9 | 10.2 | 10.2 | 9.8 | (1 | ) | 20 |
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JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) | ![]() |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
REGIONAL BANKING (continued) | ||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||
30+ Day Delinquency Rate (e) (f) | 1.93 | % | 2.02 | % | 1.57 | % | 1.48 | % | 1.36 | % | ||||||||||||||||||
Net Charge-offs | ||||||||||||||||||||||||||||
Home Equity | $ | 68 | $ | 51 | $ | 29 | $ | 30 | $ | 33 | 33 | % | 106 | % | ||||||||||||||
Mortgage | 20 | 21 | 14 | 9 | 12 | (5 | ) | 67 | ||||||||||||||||||||
Business Banking | 25 | 38 | 19 | 16 | 18 | (34 | ) | 39 | ||||||||||||||||||||
Other Loans | 13 | 27 | 1 | 13 | 7 | (52 | ) | 86 | ||||||||||||||||||||
Total Net Charge-offs | 126 | 137 | 63 | 68 | 70 | (8 | ) | 80 | ||||||||||||||||||||
Net Charge-off Rate | ||||||||||||||||||||||||||||
Home Equity | 0.32 | % | 0.24 | % | 0.15 | % | 0.16 | % | 0.18 | % | ||||||||||||||||||
Mortgage | 0.91 | 0.20 | 0.12 | 0.08 | 0.11 | |||||||||||||||||||||||
Business Banking | 0.71 | 1.08 | 0.58 | 0.49 | 0.57 | |||||||||||||||||||||||
Other Loans (d) | 0.55 | 1.15 | 0.05 | 0.55 | 0.56 | |||||||||||||||||||||||
Total Net Charge-off Rate (d) (g) | 0.43 | 0.37 | 0.17 | 0.19 | 0.21 | |||||||||||||||||||||||
Nonperforming Assets (g) (h) (i) | $ | 1,770 | $ | 1,725 | $ | 1,421 | $ | 1,349 | $ | 1,339 | 3 | 32 | ||||||||||||||||
RETAIL BRANCH BUSINESS METRICS | ||||||||||||||||||||||||||||
Investment Sales Volume | $ | 4,783 | $ | 4,101 | $ | 3,536 | $ | 3,692 | $ | 3,553 | 17 | 35 | ||||||||||||||||
Number of: | ||||||||||||||||||||||||||||
Branches | 3,071 | 3,079 | 2,677 | 2,660 | 2,638 | (8) | # | 433 | # | |||||||||||||||||||
ATMs | 8,560 | 8,506 | 7,825 | 7,753 | 7,400 | 54 | 1,160 | |||||||||||||||||||||
Personal Bankers (j) | 7,846 | 7,573 | 7,484 | 7,260 | 7,019 | 273 | 827 | |||||||||||||||||||||
Sales Specialists (j) | 3,712 | 3,614 | 3,471 | 3,376 | 3,318 | 98 | 394 | |||||||||||||||||||||
Active Online Customers (in thousands) (k) | 6,172 | 5,715 | 5,340 | 5,072 | 5,030 | 457 | 1,142 | |||||||||||||||||||||
Checking Accounts (in thousands) | 10,136 | 9,995 | 9,270 | 9,072 | 8,936 | 141 | 1,200 | |||||||||||||||||||||
MORTGAGE BANKING | ||||||||||||||||||||||||||||
Production Revenue (l) | $ | 400 | $ | 215 | $ | 197 | $ | 202 | $ | 219 | 86 | % | 83 | % | ||||||||||||||
Net Mortgage Servicing Revenue: | ||||||||||||||||||||||||||||
Loan Servicing Revenue | 601 | 598 | 579 | 563 | 560 | 1 | 7 | |||||||||||||||||||||
Changes in MSR Asset Fair Value: | ||||||||||||||||||||||||||||
Due to Inputs or Assumptions in Model (m) | 108 | 38 | (1,075 | ) | 491 | 711 | 184 | (85 | ) | |||||||||||||||||||
Other Changes in Fair Value (n) | (378 | ) | (372 | ) | (327 | ) | (392 | ) | (349 | ) | (2 | ) | (8 | ) | ||||||||||||||
Derivative Valuation Adjustments and Other | (127 | ) | (69 | ) | 824 | (546 | ) | (753 | ) | (84 | ) | 83 | ||||||||||||||||
Total Net Mortgage Servicing Revenue | 204 | 195 | 1 | 116 | 169 | 5 | 21 | |||||||||||||||||||||
Total Net Revenue | 604 | 410 | 198 | 318 | 388 | 47 | 56 | |||||||||||||||||||||
Noninterest Expense (l) | 468 | 354 | 334 | 329 | 324 | 32 | 44 | |||||||||||||||||||||
Income (Loss) Before Income Tax Expense | 136 | 56 | (136 | ) | (11 | ) | 64 | 143 | 113 | |||||||||||||||||||
Net Income (Loss) | 84 | 34 | (83 | ) | (7 | ) | 39 | 147 | 115 | |||||||||||||||||||
ROE | 17 | % | 8 | % | NM | NM | 9 | % | ||||||||||||||||||||
Business Metrics (in billions) | ||||||||||||||||||||||||||||
Third Party Mortgage Loans Serviced (Ending) | $ | 546.1 | $ | 526.7 | $ | 510.7 | $ | 497.4 | $ | 484.1 | 4 | 13 | ||||||||||||||||
MSR Net Carrying Value (Ending) | 7.9 | 7.5 | 7.4 | 8.2 | 7.5 | 5 | 5 | |||||||||||||||||||||
Avg Mortgage Trading Loans and Loans Held-for-Sale (o) | 23.8 | 17.9 | 10.5 | 9.8 | 13.0 | 33 | 83 | |||||||||||||||||||||
Average Assets | 38.0 | 29.8 | 22.4 | 23.9 | 27.1 | 28 | 40 | |||||||||||||||||||||
Average Equity | 2.0 | 1.7 | 1.7 | 1.7 | 1.7 | 18 | 18 | |||||||||||||||||||||
Mortgage Origination Volume by Channel (in billions) | ||||||||||||||||||||||||||||
Retail | $ | 10.9 | $ | 10.4 | $ | 10.1 | $ | 10.8 | $ | 9.1 | 5 | 20 | ||||||||||||||||
Wholesale | 10.0 | 9.0 | 7.7 | 8.7 | 7.4 | 11 | 35 | |||||||||||||||||||||
Correspondent (Including Negotiated Transactions) | 13.2 | 11.6 | 10.6 | 12.0 | 11.7 | 14 | 13 | |||||||||||||||||||||
Total | 34.1 | 31.0 | 28.4 | 31.5 | 28.2 | 10 | 21 |
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JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) | ![]() |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
AUTO FINANCE | ||||||||||||||||||||||||||||
Noninterest Revenue | $ | 131 | $ | 124 | $ | 110 | $ | 90 | $ | 44 | 6 | % | 198 | % | ||||||||||||||
Net Interest Income | 279 | 287 | 285 | 308 | 291 | (3 | ) | (4 | ) | |||||||||||||||||||
Total Net Revenue | 410 | 411 | 395 | 398 | 335 | - | 22 | |||||||||||||||||||||
Provision for Credit Losses | 59 | 97 | 61 | 30 | 19 | (39 | ) | 211 | ||||||||||||||||||||
Noninterest Expense | 210 | 207 | 194 | 184 | 176 | 1 | 19 | |||||||||||||||||||||
Income Before Income Tax Expense | 141 | 107 | 140 | 184 | 140 | 32 | 1 | |||||||||||||||||||||
Net Income | 85 | 65 | 85 | 111 | 85 | 31 | - | |||||||||||||||||||||
ROE | 16 | % | 11 | % | 14 | % | 19 | % | 14 | % | ||||||||||||||||||
ROA | 0.80 | 0.60 | 0.77 | 0.98 | 0.73 | |||||||||||||||||||||||
Business Metrics (in billions) | ||||||||||||||||||||||||||||
Auto Origination Volume | $ | 5.2 | $ | 5.0 | $ | 5.5 | $ | 4.5 | $ | 4.3 | 4 | 21 | ||||||||||||||||
End-of-Period Loans and Lease Related Assets | ||||||||||||||||||||||||||||
Loans Outstanding | $ | 39.7 | $ | 39.3 | $ | 38.1 | $ | 39.4 | $ | 41.0 | 1 | (3 | ) | |||||||||||||||
Lease Financing Receivables | 1.2 | 1.7 | 2.2 | 2.8 | 3.6 | (29 | ) | (67 | ) | |||||||||||||||||||
Operating Lease Assets | 1.7 | 1.6 | 1.5 | 1.3 | 1.1 | 6 | 55 | |||||||||||||||||||||
Total End-of-Period Loans and Lease Related Assets | 42.6 | 42.6 | 41.8 | 43.5 | 45.7 | - | (7 | ) | ||||||||||||||||||||
Average Loans and Lease Related Assets | ||||||||||||||||||||||||||||
Loans Outstanding (p) | $ | 39.4 | $ | 38.7 | $ | 38.9 | $ | 40.3 | $ | 41.2 | 2 | (4 | ) | |||||||||||||||
Lease Financing Receivables | 1.5 | 1.9 | 2.5 | 3.2 | 4.0 | (21 | ) | (63 | ) | |||||||||||||||||||
Operating Lease Assets | 1.6 | 1.5 | 1.4 | 1.2 | 1.0 | 7 | 60 | |||||||||||||||||||||
Total Average Loans and Lease Related Assets | 42.5 | 42.1 | 42.8 | 44.7 | 46.2 | 1 | (8 | ) | ||||||||||||||||||||
Average Assets | 43.2 | 43.1 | 43.8 | 45.6 | 47.3 | - | (9 | ) | ||||||||||||||||||||
Average Equity | 2.2 | 2.4 | 2.4 | 2.4 | 2.4 | (8 | ) | (8 | ) | |||||||||||||||||||
Credit Quality Statistics | ||||||||||||||||||||||||||||
30+ Day Delinquency Rate | 1.33 | % | 1.72 | % | 1.61 | % | 1.37 | % | 1.39 | % | ||||||||||||||||||
Net Charge-offs | ||||||||||||||||||||||||||||
Loans | $ | 58 | $ | 76 | $ | 63 | $ | 44 | $ | 48 | (24 | ) | 21 | |||||||||||||||
Lease Receivables | 1 | 1 | 2 | 1 | 3 | - | (67 | ) | ||||||||||||||||||||
Total Net Charge-offs | 59 | 77 | 65 | 45 | 51 | (23 | ) | 16 | ||||||||||||||||||||
Net Charge-off Rate | ||||||||||||||||||||||||||||
Loans (p) | 0.60 | % | 0.78 | % | 0.66 | % | 0.45 | % | 0.47 | % | ||||||||||||||||||
Lease Receivables | 0.27 | 0.21 | 0.32 | 0.13 | 0.30 | |||||||||||||||||||||||
Total Net Charge-off Rate (p) | 0.59 | 0.75 | 0.64 | 0.43 | 0.46 | |||||||||||||||||||||||
Nonperforming Assets | $ | 140 | $ | 177 | $ | 174 | $ | 171 | $ | 198 | (21 | ) | (29 | ) |
(a) | Regional Banking uses the overhead ratio (excluding the amortization of core deposit intangibles (“CDI”)), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in the overhead ratio calculation results in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this would result in an improving overhead ratio over time, all things remaining equal. This non-GAAP ratio excludes Regional Banking’s core deposit intangible amortization expense related to the Bank of New York transaction and the Merger of $116 million, $130 million, $109 million, $110 million and $109 million for the quarters ended March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. | |
(b) | As of January 1, 2007, $19.4 billion of held-for-investment prime mortgage loans were transferred from Retail Financial Services (“RFS”) to Treasury within the Corporate segment for risk management and reporting purposes. Although the loans, together with the responsibility for the investment management of the portfolio, were transferred to Treasury, the transfer has no impact on the financial results of Regional Banking. The balances reported at and for the quarter ended March 31, 2007, reflect primarily subprime mortgage loans owned. | |
(c) | Includes commercial loans derived from community development activities and, prior to July 1, 2006, insurance policy loans. | |
(d) | Average loans include Loans held-for-sale of $4.4 billion, $3.3 billion, $2.5 billion, $1.9 billion and $3.3 billion for the quarters ended March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts are not included in the Net charge-off rate. | |
(e) | Excludes delinquencies related to loans eligible for repurchase as well as loans repurchased from GNMA pools that are insured by government agencies of $975 million, $960 million, $880 million, $828 million and $942 million at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts are excluded as reimbursement is proceeding normally. | |
(f) | Excludes loans that are 30 days past due and still accruing, which are insured by government agencies under the Federal Family Education Loan Program of $519 million, $464 million, $462 million, $416 million and $370 million at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts are excluded as reimbursement is proceeding normally. | |
(g) | Excludes loans that are 90 days past due and still accruing, which are insured by government agencies under the Federal Family Education Loan Program of $178 million, $219 million, $189 million, $163 million and $156 million for the quarters ended March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts are excluded as reimbursement is proceeding normally. | |
(h) | Excludes Nonperforming assets related to loans eligible for repurchase as well as loans repurchased from GNMA pools that are insured by government agencies of $1.3 billion, $1.2 billion, $1.1 billion, $1.1 billion and $1.1 billion at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts are excluded as reimbursement is proceeding normally. | |
(i) | Includes Nonperforming loans held-for-sale related to mortgage banking activities of $79 million, $11 million, $3 million, $9 million and $16 million at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. | |
(j) | Excludes employees acquired as part of The Bank of New York transaction. Mapping of the existing Bank of New York acquired employee base into Chase employment categories is expected to be completed over the next year. | |
(k) | Includes Mortgage Banking and Auto Finance online customers. | |
(l) | As a result of the adoption of SFAS 159, certain loan origination costs have been reclassified to Expense (previously netted against Revenue) in the quarter ended March 31, 2007. | |
(m) | Represents MSR asset fair value adjustments due to changes in inputs, such as interest rates and volatility, as well as updates to assumptions used in the valuation model. | |
(n) | Includes changes in the MSR value due to servicing portfolio runoff (or time decay). | |
(o) | Includes $6.5 billion of prime mortgage loans for which the fair value option was elected under SFAS 159. These loans are classified as Trading Assets on the Consolidated balance sheets for the quarter ended March 31, 2007. | |
(p) | Average loans include Loans held-for-sale of $943 million, and $1.2 billion for the quarters ended September 30, 2006 and June 30, 2006, respectively. Average loans held-for-sale for the quarters ended March 31, 2007, December 31, 2006 and March 31, 2006 were insignificant. These amounts are not included in the Net charge-off rate. |
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JPMORGAN CHASE & CO. CARD SERVICES - MANAGED BASIS FINANCIAL HIGHLIGHTS (in millions, except ratio data and where otherwise noted) | ![]() |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
INCOME STATEMENT | ||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||
Credit Card Income | $ | 599 | $ | 697 | $ | 636 | $ | 653 | $ | 601 | (14 | )% | - | % | ||||||||||||||
All Other Income | 92 | 111 | 126 | 49 | 71 | (17 | ) | 30 | ||||||||||||||||||||
Noninterest Revenue | 691 | 808 | 762 | 702 | 672 | (14 | ) | 3 | ||||||||||||||||||||
Net Interest Income | 2,989 | 2,942 | 2,884 | 2,962 | 3,013 | 2 | (1 | ) | ||||||||||||||||||||
TOTAL NET REVENUE | 3,680 | 3,750 | 3,646 | 3,664 | 3,685 | (2 | ) | - | ||||||||||||||||||||
Provision for Credit Losses (a) | 1,229 | 1,281 | 1,270 | 1,031 | 1,016 | (4 | ) | 21 | ||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||
Compensation Expense | 254 | 242 | 251 | 251 | 259 | 5 | (2 | ) | ||||||||||||||||||||
Noncompensation Expense | 803 | 915 | 823 | 810 | 796 | (12 | ) | 1 | ||||||||||||||||||||
Amortization of Intangibles | 184 | 184 | 179 | 188 | 188 | - | (2 | ) | ||||||||||||||||||||
TOTAL NONINTEREST EXPENSE | 1,241 | 1,341 | 1,253 | 1,249 | 1,243 | (7 | ) | - | ||||||||||||||||||||
Income Before Income Tax Expense | 1,210 | 1,128 | 1,123 | 1,384 | 1,426 | 7 | (15 | ) | ||||||||||||||||||||
Income Tax Expense | 445 | 409 | 412 | 509 | 525 | 9 | (15 | ) | ||||||||||||||||||||
NET INCOME | $ | 765 | $ | 719 | $ | 711 | $ | 875 | $ | 901 | 6 | (15 | ) | |||||||||||||||
Memo: Net Securitization Gains (Amortization) | $ | 23 | $ | 32 | $ | 48 | $ | (6 | ) | $ | 8 | (28 | ) | 188 | ||||||||||||||
FINANCIAL METRICS | ||||||||||||||||||||||||||||
ROE | 22 | % | 20 | % | 20 | % | 25 | % | 26 | % | ||||||||||||||||||
Overhead Ratio | 34 | 36 | 34 | 34 | 34 | |||||||||||||||||||||||
% of Average Managed Outstandings: | ||||||||||||||||||||||||||||
Net Interest Income | 8.11 | 7.92 | 8.07 | 8.66 | 8.85 | |||||||||||||||||||||||
Provision for Credit Losses | 3.34 | 3.45 | 3.56 | 3.01 | 2.99 | |||||||||||||||||||||||
Noninterest Revenue | 1.88 | 2.17 | 2.13 | 2.05 | 1.97 | |||||||||||||||||||||||
Risk Adjusted Margin (b) | 6.65 | 6.65 | 6.65 | 7.70 | 7.84 | |||||||||||||||||||||||
Noninterest Expense | 3.37 | 3.61 | 3.51 | 3.65 | 3.65 | |||||||||||||||||||||||
Pretax Income (ROO) | 3.28 | 3.04 | 3.14 | 4.05 | 4.19 | |||||||||||||||||||||||
Net Income | 2.08 | 1.94 | 1.99 | 2.56 | 2.65 | |||||||||||||||||||||||
BUSINESS METRICS | ||||||||||||||||||||||||||||
Charge Volume (in billions) | $ | 81.3 | $ | 93.4 | $ | 87.5 | $ | 84.4 | $ | 74.3 | (13 | ) | 9 | |||||||||||||||
Net Accounts Opened (in thousands) (c) | 3,439 | 14,392 | 4,186 | 24,573 | 2,718 | (76 | ) | 27 | ||||||||||||||||||||
Credit Cards Issued (in thousands) | 152,097 | 154,424 | 139,513 | 136,685 | 112,446 | (2 | ) | 35 | ||||||||||||||||||||
Number of Registered Internet Customers (in millions) | 24.3 | 22.5 | 20.4 | 19.1 | 15.9 | 8 | 53 | |||||||||||||||||||||
Merchant Acquiring Business (d) | ||||||||||||||||||||||||||||
Bank Card Volume (in billions) | $ | 163.6 | $ | 177.9 | $ | 168.7 | $ | 166.3 | $ | 147.7 | (8 | ) | 11 | |||||||||||||||
Total Transactions (in millions) | 4,465 | 4,968 | 4,597 | 4,476 | 4,130 | (10 | ) | 8 |
(a) | Second quarter of 2006 includes a $90 million release of a $100 million special provision, originally recorded in the third quarter of 2005, related to Hurricane Katrina. | |
(b) | Represents Total Net Revenue less Provision for Credit Losses. | |
(c) | Fourth quarter of 2006 includes approximately 9 million accounts from the acquisition of the BP and Pier 1 Imports, Inc. private label portfolios. Second quarter of 2006 includes approximately 21 million accounts from the acquisition of the Kohl’s private label portfolio. | |
(d) | Represents 100% of the merchant acquiring business. |
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JPMORGAN CHASE & CO. CARD SERVICES - MANAGED BASIS FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except headcount and ratio data) | ![]() |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
SELECTED ENDING BALANCES | ||||||||||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||
Loans on Balance Sheets | $ | 78,173 | $ | 85,881 | $ | 78,587 | $ | 72,961 | $ | 64,691 | (9 | )% | 21 | % | ||||||||||||||
Securitized Loans | 68,403 | 66,950 | 65,245 | 66,349 | 69,580 | 2 | (2 | ) | ||||||||||||||||||||
Managed Loans | $ | 146,576 | $ | 152,831 | $ | 143,832 | $ | 139,310 | $ | 134,271 | (4 | ) | 9 | |||||||||||||||
SELECTED AVERAGE BALANCES | ||||||||||||||||||||||||||||
Managed Assets | $ | 156,271 | $ | 153,973 | $ | 148,272 | $ | 144,284 | $ | 145,994 | 1 | 7 | ||||||||||||||||
Loans: | ||||||||||||||||||||||||||||
Loans on Balance Sheets | $ | 81,932 | $ | 81,489 | $ | 76,655 | $ | 68,185 | $ | 68,455 | 1 | 20 | ||||||||||||||||
Securitized Loans | 67,485 | 65,898 | 65,061 | 69,005 | 69,571 | 2 | (3 | ) | ||||||||||||||||||||
Managed Loans | $ | 149,417 | $ | 147,387 | $ | 141,716 | $ | 137,190 | $ | 138,026 | 1 | 8 | ||||||||||||||||
Equity | 14,100 | 14,100 | 14,100 | 14,100 | 14,100 | - | - | |||||||||||||||||||||
Headcount | 18,749 | 18,639 | 18,696 | 18,753 | 18,801 | 1 | - | |||||||||||||||||||||
MANAGED CREDIT QUALITY STATISTICS | ||||||||||||||||||||||||||||
Net Charge-offs | $ | 1,314 | $ | 1,281 | $ | 1,280 | $ | 1,121 | $ | 1,016 | 3 | 29 | ||||||||||||||||
Net Charge-off Rate | 3.57 | % | 3.45 | % | 3.58 | % | 3.28 | % | 2.99 | % | ||||||||||||||||||
Managed delinquency ratios | ||||||||||||||||||||||||||||
30+ days | 3.07 | % | 3.13 | % | 3.17 | % | 3.14 | % | 3.10 | % | ||||||||||||||||||
90+ days | 1.52 | 1.50 | 1.48 | 1.52 | 1.39 | |||||||||||||||||||||||
Allowance for Loan Losses | $ | 3,092 | $ | 3,176 | $ | 3,176 | $ | 3,186 | $ | 3,274 | (3 | ) | (6 | ) | ||||||||||||||
Allowance for Loan Losses to Period-end Loans | 3.96 | % | 3.70 | % | 4.04 | % | 4.37 | % | 5.06 | % |
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JPMORGAN CHASE & CO. CARD RECONCILIATION OF REPORTED AND MANAGED DATA (in millions) | ![]() |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
INCOME STATEMENT DATA (a) | ||||||||||||||||||||||||||||
Credit Card Income | ||||||||||||||||||||||||||||
Reported Basis for the Period | $ | 1,345 | $ | 1,423 | $ | 1,357 | $ | 1,590 | $ | 1,726 | (5 | )% | (22 | )% | ||||||||||||||
Securitization Adjustments | (746 | ) | (726 | ) | (721 | ) | (937 | ) | (1,125 | ) | (3 | ) | 34 | |||||||||||||||
Managed Credit Card Income | $ | 599 | $ | 697 | $ | 636 | $ | 653 | $ | 601 | (14 | ) | - | |||||||||||||||
Net Interest Income | ||||||||||||||||||||||||||||
Reported Basis for the Period | $ | 1,650 | $ | 1,623 | $ | 1,556 | $ | 1,464 | $ | 1,439 | 2 | 15 | ||||||||||||||||
Securitization Adjustments | 1,339 | 1,319 | 1,328 | 1,498 | 1,574 | 2 | (15 | ) | ||||||||||||||||||||
Managed Net Interest Income | $ | 2,989 | $ | 2,942 | $ | 2,884 | $ | 2,962 | $ | 3,013 | 2 | (1 | ) | |||||||||||||||
Total Net Revenue | ||||||||||||||||||||||||||||
Reported Basis for the Period | $ | 3,087 | $ | 3,157 | $ | 3,039 | $ | 3,103 | $ | 3,236 | (2 | ) | (5 | ) | ||||||||||||||
Securitization Adjustments | 593 | 593 | 607 | 561 | 449 | - | 32 | |||||||||||||||||||||
Managed Total Net Revenue | $ | 3,680 | $ | 3,750 | $ | 3,646 | $ | 3,664 | $ | 3,685 | (2 | ) | - | |||||||||||||||
Provision for Credit Losses | ||||||||||||||||||||||||||||
Reported Basis for the Period (b) | $ | 636 | $ | 688 | $ | 663 | $ | 470 | $ | 567 | (8 | ) | 12 | |||||||||||||||
Securitization Adjustments | 593 | 593 | 607 | 561 | 449 | - | 32 | |||||||||||||||||||||
Managed Provision for Credit Losses (b) | $ | 1,229 | $ | 1,281 | $ | 1,270 | $ | 1,031 | $ | 1,016 | (4 | ) | 21 | |||||||||||||||
BALANCE SHEETS - AVERAGE BALANCES (a) | ||||||||||||||||||||||||||||
Total Average Assets | ||||||||||||||||||||||||||||
Reported Basis for the Period | $ | 91,157 | $ | 90,283 | $ | 85,301 | $ | 77,371 | $ | 78,437 | 1 | 16 | ||||||||||||||||
Securitization Adjustments | 65,114 | 63,690 | 62,971 | 66,913 | 67,557 | 2 | (4 | ) | ||||||||||||||||||||
Managed Average Assets | $ | 156,271 | $ | 153,973 | $ | 148,272 | $ | 144,284 | $ | 145,994 | 1 | 7 | ||||||||||||||||
CREDIT QUALITY STATISTICS (a) | ||||||||||||||||||||||||||||
Net Charge-offs | ||||||||||||||||||||||||||||
Reported Net Charge-offs Data for the Period | $ | 721 | $ | 688 | $ | 673 | $ | 560 | $ | 567 | 5 | 27 | ||||||||||||||||
Securitization Adjustments | 593 | 593 | 607 | 561 | 449 | - | 32 | |||||||||||||||||||||
Managed Net Charge-offs | $ | 1,314 | $ | 1,281 | $ | 1,280 | $ | 1,121 | $ | 1,016 | 3 | 29 | ||||||||||||||||
(a) | JPMorgan Chase uses the concept of “managed receivables” to evaluate the credit performance and overall performance of the underlying credit card loans, both sold and not sold; as the same borrower is continuing to use the credit card for ongoing charges, a borrower’s credit performance will affect both the receivables sold under SFAS 140 and those not sold. Thus, in its disclosures regarding managed receivables, JPMorgan Chase treats the sold receivables as if they were still on the balance sheet in order to disclose the credit performance (such as net charge-off rates) of the entire managed credit card portfolio. Managed results exclude the impact of credit card securitizations on Total Net Revenue, the Provision for Credit Losses, Net Charge-Offs and Loan Receivables. Securitization does not change reported Net income versus managed earnings; however, it does affect the classification of items on the Consolidated Statements of Income and Consolidated Balance Sheets. | |
(b) | Second quarter of 2006 includes a $90 million release of a $100 million special provision, originally recorded in the third quarter of 2005, related to Hurricane Katrina. |
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JPMORGAN CHASE & CO. COMMERCIAL BANKING FINANCIAL HIGHLIGHTS (in millions, except ratio data) | ![]() |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
INCOME STATEMENT | ||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||
Lending & Deposit Related Fees | $ | 158 | $ | 155 | $ | 145 | $ | 147 | $ | 142 | 2 | % | 11 | % | ||||||||||||||
Asset Management, Administration and Commissions | 23 | 20 | 16 | 16 | 15 | 15 | 53 | |||||||||||||||||||||
All Other Income (a) | 154 | 135 | 95 | 111 | 76 | 14 | 103 | |||||||||||||||||||||
Noninterest Revenue | 335 | 310 | 256 | 274 | 233 | 8 | 44 | |||||||||||||||||||||
Net Interest Income | 668 | 708 | 677 | 675 | 667 | (6 | ) | - | ||||||||||||||||||||
TOTAL NET REVENUE | 1,003 | 1,018 | 933 | 949 | 900 | (1 | ) | 11 | ||||||||||||||||||||
Provision for Credit Losses | 17 | 111 | 54 | (12 | ) | 7 | (85 | ) | 143 | |||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||
Compensation Expense | 180 | 174 | 190 | 179 | 197 | 3 | (9 | ) | ||||||||||||||||||||
Noncompensation Expense | 290 | 296 | 296 | 302 | 285 | (2 | ) | 2 | ||||||||||||||||||||
Amortization of Intangibles | 15 | 15 | 14 | 15 | 16 | - | (6 | ) | ||||||||||||||||||||
TOTAL NONINTEREST EXPENSE | 485 | 485 | 500 | 496 | 498 | - | (3 | ) | ||||||||||||||||||||
Income Before Income Tax Expense | 501 | 422 | 379 | 465 | 395 | 19 | 27 | |||||||||||||||||||||
Income Tax Expense | 197 | 166 | 148 | 182 | 155 | 19 | 27 | |||||||||||||||||||||
NET INCOME | $ | 304 | $ | 256 | $ | 231 | $ | 283 | $ | 240 | 19 | 27 | ||||||||||||||||
MEMO: | ||||||||||||||||||||||||||||
Revenue by Product: | ||||||||||||||||||||||||||||
Lending | $ | 348 | $ | 359 | $ | 335 | $ | 331 | $ | 319 | (3 | ) | 9 | |||||||||||||||
Treasury Services | 556 | 576 | 551 | 566 | 550 | (3 | ) | 1 | ||||||||||||||||||||
Investment Banking | 76 | 87 | 60 | 66 | 40 | (13 | ) | 90 | ||||||||||||||||||||
Other | 23 | (4 | ) | (13 | ) | (14 | ) | (9 | ) | NM | NM | |||||||||||||||||
Total Commercial Banking Revenue | $ | 1,003 | $ | 1,018 | $ | 933 | $ | 949 | $ | 900 | (1 | ) | 11 | |||||||||||||||
IB Revenues, Gross (b) | $ | 231 | $ | 246 | $ | 170 | $ | 186 | $ | 114 | (6 | ) | 103 | |||||||||||||||
Revenue by Business: | ||||||||||||||||||||||||||||
Middle Market Banking | $ | 661 | $ | 661 | $ | 617 | $ | 634 | $ | 623 | - | 6 | ||||||||||||||||
Mid-Corporate Banking | 212 | 198 | 160 | 161 | 137 | 7 | 55 | |||||||||||||||||||||
Real Estate Banking | 102 | 120 | 119 | 114 | 105 | (15 | ) | (3 | ) | |||||||||||||||||||
Other | 28 | 39 | 37 | 40 | 35 | (28 | ) | (20 | ) | |||||||||||||||||||
Total Commercial Banking Revenue | $ | 1,003 | $ | 1,018 | $ | 933 | $ | 949 | $ | 900 | (1 | ) | 11 | |||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||||||||||
ROE | 20 | % | 16 | % | 17 | % | 21 | % | 18 | % | ||||||||||||||||||
Overhead Ratio | 48 | 48 | 54 | 52 | 55 |
(a) | IB-related and commercial card revenues are included in All Other Income. | |
(b) | Represents the total revenue related to Investment Banking products sold to Commercial Banking clients. |
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JPMORGAN CHASE & CO. COMMERCIAL BANKING FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio and headcount data) | ![]() |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
SELECTED BALANCE SHEETS DATA (Average) | ||||||||||||||||||||||||||||
Total Assets | $ | 82,545 | $ | 62,227 | $ | 57,378 | $ | 56,561 | $ | 54,771 | 33 | % | 51 | % | ||||||||||||||
Loans and Leases (a) | 57,660 | 57,657 | 53,404 | 52,413 | 50,836 | - | 13 | |||||||||||||||||||||
Liability Balances (b) | 81,752 | 79,050 | 72,009 | 72,556 | 70,763 | 3 | 16 | |||||||||||||||||||||
Equity | 6,300 | 6,300 | 5,500 | 5,500 | 5,500 | - | 15 | |||||||||||||||||||||
MEMO: | ||||||||||||||||||||||||||||
Loans by Business: | ||||||||||||||||||||||||||||
Middle Market Banking | $ | 36,317 | $ | 35,618 | $ | 32,890 | $ | 32,492 | $ | 31,861 | 2 | 14 | ||||||||||||||||
Mid-Corporate Banking | 10,669 | 9,898 | 8,756 | 8,269 | 7,577 | 8 | 41 | |||||||||||||||||||||
Real Estate Banking | 7,074 | 7,745 | 7,564 | 7,515 | 7,436 | (9 | ) | (5 | ) | |||||||||||||||||||
Other | 3,600 | 4,396 | 4,194 | 4,137 | 3,962 | (18 | ) | (9 | ) | |||||||||||||||||||
Total Commercial Banking Loans | $ | 57,660 | $ | 57,657 | $ | 53,404 | $ | 52,413 | $ | 50,836 | - | 13 | ||||||||||||||||
Headcount | 4,281 | 4,459 | 4,447 | 4,320 | 4,310 | (4 | ) | (1 | ) | |||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||
Net Charge-offs (Recoveries) | $ | (1 | ) | $ | 16 | $ | 21 | $ | (3 | ) | $ | (7 | ) | NM | 86 | |||||||||||||
Nonperforming Loans | 141 | 121 | 157 | 225 | 202 | 17 | (30 | ) | ||||||||||||||||||||
Allowance for Loan Losses | 1,531 | 1,519 | 1,431 | 1,394 | 1,415 | 1 | 8 | |||||||||||||||||||||
Allowance for Lending-Related Commitments | 187 | 187 | 156 | 157 | 145 | - | 29 | |||||||||||||||||||||
Net Charge-off (Recovery) Rate (a) | (0.01 | )% | 0.11 | % | 0.16 | % | (0.02 | )% | (0.06 | )% | ||||||||||||||||||
Allowance for Loan Losses to Average Loans (a) | 2.68 | 2.67 | 2.70 | 2.68 | 2.80 | |||||||||||||||||||||||
Allowance for Loan Losses to Nonperforming Loans | 1,086 | 1,255 | 911 | 620 | 700 | |||||||||||||||||||||||
Nonperforming Loans to Average Loans | 0.24 | 0.21 | 0.29 | 0.43 | 0.40 |
(a) | Average loans include Loans held-for-sale of $475 million, $804 million, $359 million, $334 million and $268 million for the quarters ended March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts are not included in the Net charge-off rate or allowance coverage ratios. | |
(b) | Liability balances include deposits and deposits that are swept to on-balance sheet liabilities. |
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JPMORGAN CHASE & CO. TREASURY & SECURITIES SERVICES FINANCIAL HIGHLIGHTS (in millions, except ratio data and where otherwise noted) | ![]() |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
INCOME STATEMENT | ||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||
Lending & Deposit Related Fees | $ | 213 | $ | 186 | $ | 183 | $ | 184 | $ | 182 | 15 | % | 17 | % | ||||||||||||||
Asset Management, Administration and Commissions | 686 | 717 | 642 | 683 | 650 | (4 | ) | 6 | ||||||||||||||||||||
All Other Income | 125 | 133 | 155 | 178 | 146 | (6 | ) | (14 | ) | |||||||||||||||||||
Noninterest Revenue | 1,024 | 1,036 | 980 | 1,045 | 978 | (1 | ) | 5 | ||||||||||||||||||||
Net Interest Income | 502 | 501 | 519 | 543 | 507 | - | (1 | ) | ||||||||||||||||||||
TOTAL NET REVENUE | 1,526 | 1,537 | 1,499 | 1,588 | 1,485 | (1 | ) | 3 | ||||||||||||||||||||
Provision for Credit Losses | 6 | (2 | ) | 1 | 4 | (4 | ) | NM | NM | |||||||||||||||||||
Credit Reimbursement to IB (a) | (30 | ) | (31 | ) | (30 | ) | (30 | ) | (30 | ) | 3 | - | ||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||
Compensation Expense | 558 | 555 | 557 | 537 | 549 | 1 | 2 | |||||||||||||||||||||
Noncompensation Expense | 502 | 533 | 489 | 493 | 480 | (6 | ) | 5 | ||||||||||||||||||||
Amortization of Intangibles | 15 | 16 | 18 | 20 | 19 | (6 | ) | (21 | ) | |||||||||||||||||||
TOTAL NONINTEREST EXPENSE | 1,075 | 1,104 | 1,064 | 1,050 | 1,048 | (3 | ) | 3 | ||||||||||||||||||||
Income before Income Tax Expense | 415 | 404 | 404 | 504 | 411 | 3 | 1 | |||||||||||||||||||||
Income Tax Expense | 152 | 148 | 148 | 188 | 149 | 3 | 2 | |||||||||||||||||||||
NET INCOME | $ | 263 | $ | 256 | $ | 256 | $ | 316 | $ | 262 | 3 | - | ||||||||||||||||
REVENUE BY BUSINESS | ||||||||||||||||||||||||||||
Treasury Services | $ | 689 | 700 | $ | 697 | $ | 702 | $ | 693 | (2 | ) | (1 | ) | |||||||||||||||
Worldwide Securities Services | 837 | 837 | 802 | 886 | 792 | - | 6 | |||||||||||||||||||||
TOTAL NET REVENUE | $ | 1,526 | $ | 1,537 | $ | 1,499 | $ | 1,588 | $ | 1,485 | (1 | ) | 3 | |||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||||||||||
ROE | 36 | % | 46 | % | 46 | % | 58 | % | 42 | % | ||||||||||||||||||
Overhead Ratio | 70 | 72 | 71 | 66 | 71 | |||||||||||||||||||||||
Pretax Margin Ratio (b) | 27 | 26 | 27 | 32 | 28 | |||||||||||||||||||||||
FIRMWIDE BUSINESS METRICS | ||||||||||||||||||||||||||||
Assets under Custody (in billions) | $ | 14,661 | $ | 13,903 | $ | 12,873 | $ | 11,536 | $ | 11,179 | 5 | 31 | ||||||||||||||||
Number of: | ||||||||||||||||||||||||||||
US$ ACH transactions originated (in millions) | 971 | 931 | 886 | 848 | 838 | 4 | 16 | |||||||||||||||||||||
Total US$ Clearing Volume (in thousands) | 26,840 | 26,906 | 26,252 | 26,506 | 25,182 | - | 7 | |||||||||||||||||||||
International Electronic Funds Transfer Volume (in thousands) (c) | 42,399 | 41,007 | 35,322 | 35,255 | 33,741 | 3 | 26 | |||||||||||||||||||||
Wholesale Check Volume (in millions) | 771 | 793 | 860 | 904 | 852 | (3 | ) | (10 | ) | |||||||||||||||||||
Wholesale Cards Issued (in thousands) (d) | 17,146 | 17,228 | 16,662 | 16,271 | 16,977 | - | 1 |
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JPMORGAN CHASE & CO. TREASURY & SECURITIES SERVICES (a) (FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except headcount and ratio data) | ![]() |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
SELECTED BALANCE SHEETS (Average) | ||||||||||||||||||||||||||||
Total Assets | $ | 46,005 | $ | 35,422 | $ | 30,558 | $ | 31,774 | $ | 29,230 | 30 | % | 57 | % | ||||||||||||||
Loans | 18,948 | 19,030 | 15,231 | 14,993 | 12,940 | - | 46 | |||||||||||||||||||||
Liability Balances (e) | 210,639 | 193,129 | 192,518 | 194,181 | 178,133 | 9 | 18 | |||||||||||||||||||||
Equity | 3,000 | 2,200 | 2,200 | 2,200 | 2,545 | 36 | 18 | |||||||||||||||||||||
Headcount | 24,875 | 25,423 | 24,575 | 24,100 | 23,598 | (2 | ) | 5 | ||||||||||||||||||||
TSS FIRMWIDE METRICS | ||||||||||||||||||||||||||||
Treasury Services Firmwide Revenue (f) | $ | 1,305 | $ | 1,333 | $ | 1,300 | $ | 1,318 | $ | 1,291 | (2 | ) | 1 | |||||||||||||||
Treasury & Securities Services Firmwide Revenue (f) | 2,142 | 2,170 | 2,102 | 2,204 | 2,083 | (1 | ) | 3 | ||||||||||||||||||||
Treasury Services Firmwide Overhead Ratio (g) | 59 | % | 56 | % | 57 | % | 56 | % | 56 | % | ||||||||||||||||||
Treasury & Securities Services Firmwide Overhead Ratio (g) | 63 | 63 | 63 | 59 | 62 | |||||||||||||||||||||||
Treasury Services Firmwide Liability Balances (Average) (h) | $ | 186,631 | $ | 168,321 | $ | 162,326 | $ | 161,866 | $ | 155,422 | 11 | 20 | ||||||||||||||||
Treasury & Securities Services Firmwide Liability Balances (Average)(h) | 292,391 | 272,178 | 264,527 | 265,398 | 248,328 | 7 | 18 |
FOOTNOTES | ||
(a) | TSS is charged a credit reimbursement related to certain exposures managed within the IB credit portfolio on behalf of clients shared with TSS. | |
(b) | Pretax margin represents Income before income tax expense divided by Total net revenue, which is a measure of pretax performance and another basis by which management evaluates its performance and that of its competitors. | |
(c) | International electronic funds transfer includes non-US$ ACH and clearing volume. | |
(d) | Wholesale cards issued include domestic commercial card, stored value card, prepaid card, and government electronic benefit card products. | |
(e) | Liability balances include Deposits and deposits swept to on-balance sheet liabilities. |
TSS FIRMWIDE METRICS
TSS firmwide metrics include certain TSS product revenues and liability balances reported in other lines of business for customers who are also customers of those lines of business. In order to capture the firmwide impact of Treasury Services (“TS”) and TSS products and revenues, management reviews firmwide metrics such as liability balances, revenues and overhead ratios in assessing financial performance for TSS. Firmwide metrics are necessary in order to understand the aggregate TSS business.
(f) | Firmwide revenue includes TS revenue recorded in the Commercial Banking (“CB”), Regional Banking and Asset Management (“AM”) lines of business (see below) and excludes FX revenues recorded in the IB for TSS-related FX activity. |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
TS Revenue Reported in CB | $ | 556 | $ | 576 | $ | 551 | $ | 566 | $ | 550 | (3 | )% | 1 | % | ||||||||||||||
TS Revenue Reported in Other Lines of Business | 60 | 57 | 52 | 50 | 48 | 5 | 25 |
TSS firmwide FX revenue, which includes FX revenue recorded in TSS and FX revenue associated with TSS customers who are FX customers of the IB, was $112 million for the quarter ended March 31, 2007. | ||
(g) | Overhead ratios have been calculated based on firmwide revenues and TSS and TS expenses, respectively, including those allocated to certain other lines of business. FX revenues and expenses recorded in the IB for TSS-related FX activity are not included in this ratio. | |
(h) | Firmwide liability balances include TS’ liability balances recorded in certain other lines of business. Liability balances associated with TS customers who are also customers of the CB line of business are not included in TS liability balances. |
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JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS (in millions, except ratio, ranking and headcount data) | ![]() |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
INCOME STATEMENT | ||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||
Asset Management, Administration and Commissions | $ | 1,489 | $ | 1,509 | $ | 1,285 | $ | 1,279 | $ | 1,222 | (1 | )% | 22 | % | ||||||||||||||
All Other Income | 170 | 192 | 120 | 93 | 116 | (11 | ) | 47 | ||||||||||||||||||||
Noninterest Revenue | 1,659 | 1,701 | 1,405 | 1,372 | 1,338 | (2 | ) | 24 | ||||||||||||||||||||
Net Interest Income | 245 | 246 | 231 | 248 | 246 | - | - | |||||||||||||||||||||
TOTAL NET REVENUE | 1,904 | 1,947 | 1,636 | 1,620 | 1,584 | (2 | ) | 20 | ||||||||||||||||||||
Provision for Credit Losses | (9 | ) | 14 | (28 | ) | (7 | ) | (7 | ) | NM | (29 | ) | ||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||
Compensation Expense | 764 | 750 | 676 | 669 | 682 | 2 | 12 | |||||||||||||||||||||
Noncompensation Expense | 451 | 512 | 417 | 390 | 394 | (12 | ) | 14 | ||||||||||||||||||||
Amortization of Intangibles | 20 | 22 | 22 | 22 | 22 | (9 | ) | (9 | ) | |||||||||||||||||||
TOTAL NONINTEREST EXPENSE | 1,235 | 1,284 | 1,115 | 1,081 | 1,098 | (4 | ) | 12 | ||||||||||||||||||||
Income Before Income Tax Expense | 678 | 649 | 549 | 546 | 493 | 4 | 38 | |||||||||||||||||||||
Income Tax Expense | 253 | 242 | 203 | 203 | 180 | 5 | 41 | |||||||||||||||||||||
NET INCOME | $ | 425 | $ | 407 | $ | 346 | $ | 343 | $ | 313 | 4 | 36 | ||||||||||||||||
REVENUE BY CLIENT SEGMENT | ||||||||||||||||||||||||||||
Private Bank | $ | 560 | $ | 528 | $ | 469 | $ | 469 | $ | 441 | 6 | 27 | ||||||||||||||||
Institutional | 551 | 624 | 464 | 449 | 435 | (12 | ) | 27 | ||||||||||||||||||||
Retail | 527 | 541 | 456 | 446 | 442 | (3 | ) | 19 | ||||||||||||||||||||
Private Client Services | 266 | 254 | 247 | 256 | 266 | 5 | - | |||||||||||||||||||||
Total Net Revenue | $ | 1,904 | $ | 1,947 | $ | 1,636 | $ | 1,620 | $ | 1,584 | (2 | ) | 20 | |||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||||||||||
ROE | 46 | % | 46 | % | 39 | % | 39 | % | 36 | % | ||||||||||||||||||
Overhead Ratio | 65 | 66 | 68 | 67 | 69 | |||||||||||||||||||||||
Pretax Margin Ratio (a) | 36 | 33 | 34 | 34 | 31 | |||||||||||||||||||||||
BUSINESS METRICS | ||||||||||||||||||||||||||||
Number of: | ||||||||||||||||||||||||||||
Client Advisors | 1,533 | 1,506 | 1,489 | 1,486 | 1,499 | 2 | 2 | |||||||||||||||||||||
Retirement Planning Services Participants | 1,423,000 | 1,362,000 | 1,372,000 | 1,361,000 | 1,327,000 | 4 | 7 | |||||||||||||||||||||
% of Customer Assets in 4 & 5 Star Funds (b) | 61 | % | 58 | % | 58 | % | 56 | % | 54 | % | 5 | 13 | ||||||||||||||||
% of AUM in 1st and 2nd Quartiles: (c) | ||||||||||||||||||||||||||||
1 Year | 76 | % | 83 | % | 79 | % | 71 | % | 72 | % | (8 | ) | 6 | |||||||||||||||
3 Years | 76 | % | 77 | % | 75 | % | 75 | % | 75 | % | (1 | ) | 1 | |||||||||||||||
5 Years | 81 | % | 79 | % | 80 | % | 81 | % | 75 | % | 3 | 8 | ||||||||||||||||
SELECTED BALANCE SHEETS DATA (Average) | ||||||||||||||||||||||||||||
Total Assets | $ | 45,816 | $ | 46,716 | $ | 43,524 | $ | 43,228 | $ | 41,012 | (2 | ) | 12 | |||||||||||||||
Loans (d) | 25,640 | 28,917 | 26,770 | 25,807 | 24,482 | (11 | ) | 5 | ||||||||||||||||||||
Deposits | 54,816 | 51,341 | 51,395 | 51,583 | 48,066 | 7 | 14 | |||||||||||||||||||||
Equity | 3,750 | 3,500 | 3,500 | 3,500 | 3,500 | 7 | 7 | |||||||||||||||||||||
Headcount | 13,568 | 13,298 | 12,761 | 12,786 | 12,511 | 2 | 8 | |||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||
Net Charge-offs (Recoveries) | $ | - | $ | 2 | $ | (24 | ) | $ | (4 | ) | $ | 7 | NM | NM | ||||||||||||||
Nonperforming Loans | 34 | 39 | 57 | 76 | 79 | (13 | ) | (57 | ) | |||||||||||||||||||
Allowance for Loan Losses | 114 | 121 | 112 | 117 | 119 | (6 | ) | (4 | ) | |||||||||||||||||||
Allowance for Lending Related Commitments | 5 | 6 | 4 | 3 | 3 | (17 | ) | 67 | ||||||||||||||||||||
Net Charge-off (Recovery) Rate | - | % | 0.03 | % | (0.36 | )% | (0.06 | )% | 0.12 | % | ||||||||||||||||||
Allowance for Loan Losses to Average Loans | 0.44 | 0.42 | 0.42 | 0.45 | 0.49 | |||||||||||||||||||||||
Allowance for Loan Losses to Nonperforming Loans | 335 | 310 | 196 | 154 | 151 | |||||||||||||||||||||||
Nonperforming Loans to Average Loans | 0.13 | 0.13 | 0.21 | 0.29 | 0.32 |
(a) | Pretax margin represents Income Before Income Tax Expense divided by Total Net Revenue, which is a measure of pretax performance and another basis by which management evaluates its performance and that of its competitors. | |
(b) | Derived from Morningstar for the United States; Micropal for the United Kingdom, Luxembourg, Hong Kong and Taiwan; and Nomura for Japan. | |
(c) | Quartile rankings sourced from Lipper for the United States and Taiwan; Micropal for the United Kingdom, Luxembourg, Hong Kong and Taiwan; and Nomura for Japan. | |
(d) | As of January 1, 2007, $5.3 billion of held-for-investment prime mortgage loans were transferred from AM to Treasury within the Corporate segment. Although the loans, together with the responsibility for the investment management of the portfolio, were transferred to Treasury, the transfer has no impact on the financial results of AM. |
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JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS, CONTINUED (in billions) | ![]() |
Mar 31, 2007 | ||||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||||
Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Mar 31 | ||||||||||||||||||||||
2007 | 2006 | 2006 | 2006 | 2006 | 2006 | 2006 | ||||||||||||||||||||||
Assets by Asset Class | ||||||||||||||||||||||||||||
Liquidity (a) | $ | 318 | $ | 311 | $ | 281 | $ | 247 | $ | 236 | 2 | % | 35 | % | ||||||||||||||
Fixed Income | 180 | 175 | 171 | 172 | 166 | 3 | 8 | |||||||||||||||||||||
Equities & Balanced | 446 | 427 | 392 | 393 | 397 | 4 | 12 | |||||||||||||||||||||
Alternatives | 109 | 100 | 91 | 86 | 74 | 9 | 47 | |||||||||||||||||||||
TOTAL ASSETS UNDER MANAGEMENT | 1,053 | 1,013 | 935 | 898 | 873 | 4 | 21 | |||||||||||||||||||||
Custody / Brokerage / Administration / Deposits | 342 | 334 | 330 | 315 | 324 | 2 | 6 | |||||||||||||||||||||
TOTAL ASSETS UNDER SUPERVISION | $ | 1,395 | $ | 1,347 | $ | 1,265 | $ | 1,213 | $ | 1,197 | 4 | 17 | ||||||||||||||||
Assets by Client Segment | ||||||||||||||||||||||||||||
Institutional | $ | 550 | $ | 538 | $ | 503 | $ | 484 | $ | 468 | 2 | 18 | ||||||||||||||||
Private Bank | 170 | 159 | 150 | 143 | 137 | 7 | 24 | |||||||||||||||||||||
Retail | 274 | 259 | 228 | 219 | 214 | 6 | 28 | |||||||||||||||||||||
Private Client Services | 59 | 57 | 54 | 52 | 54 | 4 | 9 | |||||||||||||||||||||
TOTAL ASSETS UNDER MANAGEMENT | $ | 1,053 | $ | 1,013 | $ | 935 | $ | 898 | $ | 873 | 4 | 21 | ||||||||||||||||
Institutional | $ | 551 | $ | 539 | $ | 505 | $ | 486 | $ | 471 | 2 | 17 | ||||||||||||||||
Private Bank | 374 | 357 | 347 | 331 | 332 | 5 | 13 | |||||||||||||||||||||
Retail | 361 | 343 | 309 | 295 | 291 | 5 | 24 | |||||||||||||||||||||
Private Client Services | 109 | 108 | 104 | 101 | 103 | 1 | 6 | |||||||||||||||||||||
TOTAL ASSETS UNDER SUPERVISION | $ | 1,395 | $ | 1,347 | $ | 1,265 | $ | 1,213 | $ | 1,197 | 4 | 17 | ||||||||||||||||
Assets by Geographic Region | ||||||||||||||||||||||||||||
U.S. / Canada | $ | 664 | $ | 630 | $ | 596 | $ | 577 | $ | 564 | 5 | 18 | ||||||||||||||||
International | 389 | 383 | 339 | 321 | 309 | 2 | 26 | |||||||||||||||||||||
TOTAL ASSETS UNDER MANAGEMENT | $ | 1,053 | $ | 1,013 | $ | 935 | $ | 898 | $ | 873 | 4 | 21 | ||||||||||||||||
U.S. / Canada | $ | 929 | $ | 889 | $ | 855 | $ | 828 | $ | 822 | 4 | 13 | ||||||||||||||||
International | 466 | 458 | 410 | 385 | 375 | 2 | 24 | |||||||||||||||||||||
TOTAL ASSETS UNDER SUPERVISION | $ | 1,395 | $ | 1,347 | $ | 1,265 | $ | 1,213 | $ | 1,197 | 4 | 17 | ||||||||||||||||
Mutual Funds Assets by Asset Class | ||||||||||||||||||||||||||||
Liquidity | $ | 257 | $ | 255 | $ | 221 | $ | 178 | $ | 167 | 1 | 54 | ||||||||||||||||
Fixed Income | 48 | 46 | 45 | 47 | 48 | 4 | - | |||||||||||||||||||||
Equity | 219 | 206 | 184 | 194 | 189 | 6 | 16 | |||||||||||||||||||||
TOTAL MUTUAL FUND ASSETS | $ | 524 | $ | 507 | $ | 450 | $ | 419 | $ | 404 | 3 | 30 | ||||||||||||||||
(a) | Third quarter 2006 data reflects the reclassification of $19 billion of assets under management into liquidity from other asset classes. Prior period data were not restated. |
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JPMORGAN CHASE & CO. | ![]() | |
ASSET MANAGEMENT | ||
FINANCIAL HIGHLIGHTS, CONTINUED | ||
(in billions) |
QUARTERLY TRENDS | ||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | ||||||||||||||||
ASSETS UNDER SUPERVISION (continued) | ||||||||||||||||||||
Assets Under Management Rollforward | ||||||||||||||||||||
Beginning Balance | $ | 1,013 | $ | 935 | $ | 898 | $ | 873 | $ | 847 | ||||||||||
Flows: | ||||||||||||||||||||
Liquidity | 7 | 24 | 15 | 10 | (5 | ) | ||||||||||||||
Fixed Income | 2 | 1 | 4 | 6 | - | |||||||||||||||
Equities, Balanced & Alternatives | 10 | 5 | 3 | 13 | 13 | |||||||||||||||
Market / Performance / Other Impacts | 21 | 48 | 15 | (4 | ) | 18 | ||||||||||||||
TOTAL ASSETS UNDER MANAGEMENT | $ | 1,053 | $ | 1,013 | $ | 935 | $ | 898 | $ | 873 | ||||||||||
Assets Under Supervision Rollforward | ||||||||||||||||||||
Beginning Balance | $ | 1,347 | $ | 1,265 | $ | 1,213 | $ | 1,197 | $ | 1,149 | ||||||||||
Net Asset Flows | 27 | 31 | 26 | 33 | 12 | |||||||||||||||
Market / Performance / Other Impacts | 21 | 51 | 26 | (17 | ) | 36 | ||||||||||||||
TOTAL ASSETS UNDER SUPERVISION | $ | 1,395 | $ | 1,347 | $ | 1,265 | $ | 1,213 | $ | 1,197 | ||||||||||
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JPMORGAN CHASE & CO. | ![]() | |
CORPORATE | ||
FINANCIAL HIGHLIGHTS | ||
(in millions, except headcount data) |
QUARTERLY TRENDS | |||||||||||||||||||||||||||||
1Q07 Change | |||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | |||||||||||||||||||||||
INCOME STATEMENT | |||||||||||||||||||||||||||||
REVENUE | |||||||||||||||||||||||||||||
Principal Transactions (a) (b) (c) | $ | 1,325 | $ | 236 | $ | 195 | $ | 551 | $ | 199 | 461 | % | NM | ||||||||||||||||
Securities Gains (Losses) | (8 | ) | 18 | 24 | (492 | ) | (158 | ) | NM | 95 | % | ||||||||||||||||||
All Other Income (d) | 68 | 27 | 125 | 231 | 102 | 152 | (33 | ) | |||||||||||||||||||||
Noninterest Revenue | 1,385 | 281 | 344 | 290 | 143 | 393 | NM | ||||||||||||||||||||||
Net Interest Income | (117 | ) | (87 | ) | (55 | ) | (355 | ) | (547 | ) | (34 | ) | 79 | ||||||||||||||||
TOTAL NET REVENUE | 1,268 | 194 | 289 | (65 | ) | (404 | ) | NM | NM | ||||||||||||||||||||
Provision for Credit Losses | 3 | (2 | ) | 1 | - | - | NM | NM | |||||||||||||||||||||
NONINTEREST EXPENSE | |||||||||||||||||||||||||||||
Compensation Expense (b) | 776 | 434 | 737 | 770 | 685 | 79 | 13 | ||||||||||||||||||||||
Noncompensation Expense (c) (e) | 556 | 678 | 731 | 336 | 612 | (18 | ) | (9 | ) | ||||||||||||||||||||
Merger Costs | 62 | 100 | 48 | 86 | 71 | (38 | ) | (13 | ) | ||||||||||||||||||||
Subtotal | 1,394 | 1,212 | 1,516 | 1,192 | 1,368 | 15 | 2 | ||||||||||||||||||||||
Net Expenses Allocated to Other Businesses | (1,040 | ) | (1,037 | ) | (1,035 | ) | (1,036 | ) | (1,033 | ) | - | (1 | ) | ||||||||||||||||
TOTAL NONINTEREST EXPENSE | 354 | 175 | 481 | 156 | 335 | 102 | 6 | ||||||||||||||||||||||
Income (Loss) from continuing operations before Income Tax Expense | 911 | 21 | (193 | ) | (221 | ) | (739 | ) | NM | NM | |||||||||||||||||||
Income Tax Expense (Benefit) (f) | 280 | (520 | ) | (159 | ) | (181 | ) | (319 | ) | NM | NM | ||||||||||||||||||
Income (Loss) from Continuing Operations | $ | 631 | $ | 541 | $ | (34 | ) | $ | (40 | ) | $ | (420 | ) | 17 | NM | ||||||||||||||
Income from Discontinued Operations (after-tax) (g) | - | 620 | 65 | 56 | 54 | NM | NM | ||||||||||||||||||||||
NET INCOME (LOSS) | $ | 631 | $ | 1,161 | $ | 31 | $ | 16 | $ | (366 | ) | (46 | ) | NM | |||||||||||||||
MEMO: | |||||||||||||||||||||||||||||
TOTAL NET REVENUE | |||||||||||||||||||||||||||||
Private Equity (a) (b) | $ | 1,253 | $ | 250 | $ | 188 | $ | 500 | $ | 204 | 401 | NM | |||||||||||||||||
Treasury and Other Corporate (c) (d) | 15 | (56 | ) | 101 | (565 | ) | (608 | ) | NM | NM | |||||||||||||||||||
TOTAL NET REVENUE | $ | 1,268 | $ | 194 | $ | 289 | $ | (65 | ) | $ | (404 | ) | NM | NM | |||||||||||||||
NET INCOME (LOSS) | |||||||||||||||||||||||||||||
Private Equity (a) (b) | $ | 698 | $ | 136 | $ | 95 | $ | 293 | $ | 103 | 413 | NM | |||||||||||||||||
Treasury and Other Corporate (c) (d) (e) (f) | (29 | ) | 467 | (99 | ) | (280 | ) | (479 | ) | NM | 94 | ||||||||||||||||||
Merger Costs | (38 | ) | (62 | ) | (30 | ) | (53 | ) | (44 | ) | 39 | 14 | |||||||||||||||||
Income (Loss) from Continuing Operations | $ | 631 | $ | 541 | $ | (34 | ) | $ | (40 | ) | $ | (420 | ) | 17 | NM | ||||||||||||||
Income from Discontinued Operations (after-tax) | - | 620 | 65 | 56 | 54 | NM | NM | ||||||||||||||||||||||
TOTAL NET INCOME (LOSS) | $ | 631 | $ | 1,161 | $ | 31 | $ | 16 | $ | (366 | ) | (46 | ) | NM | |||||||||||||||
Headcount | 23,702 | 23,242 | 25,748 | 27,100 | 27,390 | 2 | (13 | ) |
(a) | As a result of the adoption on January 1, 2007 of SFAS 157, Corporate recognized a benefit of $464 million in Net revenue, in the current quarter, relating to valuation adjustments on nonpublic private equity investments. | |
(b) | The first quarter of 2007 includes the reclassification of certain private equity carried interest from Net revenue to Compensation expense. | |
(c) | Certain transaction costs that were previously reported in Revenue have been reclassified to Noninterest expense. Revenue and Noninterest expense have been reclassified for all periods presented. | |
(d) | Includes a gain of $103 million in the second quarter of 2006 related to the initial public offering of MasterCard. | |
(e) | Includes insurance recoveries related to settlement of the Enron and WorldCom class action litigations and for certain other material legal proceedings of $137 million, $17 million, $260 million and $98 million for the quarters ended December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. | |
(f) | Includes tax benefit of $359 million related to audit resolutions in the fourth quarter of 2006. | |
(g) | On October 1, 2006, the Firm completed the exchange of selected corporate trust businesses, including trustee, paying agent, loan agency and document management services for the consumer, business banking and middle-market banking businesses of The Bank of New York. The results of operations of these corporate trust businesses are being reported as discontinued operations for each of the periods presented. Includes $622 million gain on sale in the fourth quarter of 2006. |
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JPMORGAN CHASE & CO. | ![]() | |
CORPORATE | ||
FINANCIAL HIGHLIGHTS, CONTINUED | ||
(in millions, except ratio data) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
SUPPLEMENTAL | ||||||||||||||||||||||||||||
TREASURY | ||||||||||||||||||||||||||||
Securities Gains (Losses) (a) | $ | (8 | ) | $ | 7 | $ | 24 | $ | (492 | ) | $ | (158 | ) | NM | 95 | % | ||||||||||||
Investment Securities Portfolio (Average) | 86,436 | 80,616 | 68,619 | 63,714 | 39,989 | 7 | % | 116 | ||||||||||||||||||||
Investment Securities Portfolio (Ending) | 88,681 | 82,091 | 77,116 | 61,990 | 46,093 | 8 | 92 | |||||||||||||||||||||
Mortgage Loans (Average) (b) | 25,244 | - | - | - | - | NM | NM | |||||||||||||||||||||
Mortgage Loans (Ending) (b) | 26,499 | - | - | - | - | NM | NM | |||||||||||||||||||||
PRIVATE EQUITY | ||||||||||||||||||||||||||||
Private Equity Gains (Losses) | ||||||||||||||||||||||||||||
Direct Investments | ||||||||||||||||||||||||||||
Realized Gains | $ | 723 | $ | 254 | $ | 194 | $ | 568 | $ | 207 | 185 | 249 | ||||||||||||||||
Write-ups / (Write-downs) (c) | 648 | 12 | (21) | (74) | 10 | NM | NM | |||||||||||||||||||||
Mark-to-Market Gains (Losses) | (127 | ) | (6 | ) | 25 | 49 | 4 | NM | NM | |||||||||||||||||||
Total Direct Investments | 1,244 | 260 | 198 | 543 | 221 | 378 | 463 | |||||||||||||||||||||
Third-Party Fund Investments | 34 | 27 | 28 | 6 | 16 | 26 | 113 | |||||||||||||||||||||
Total Private Equity Gains (d) | $ | 1,278 | $ | 287 | $ | 226 | $ | 549 | $ | 237 | 345 | 439 | ||||||||||||||||
Private Equity Portfolio Information | ||||||||||||||||||||||||||||
Direct Investments | ||||||||||||||||||||||||||||
Publicly-Held Securities | ||||||||||||||||||||||||||||
Carrying Value | $ | 389 | $ | 587 | $ | 696 | $ | 589 | $ | 501 | (34 | ) | (22 | ) | ||||||||||||||
Cost | 366 | 451 | 539 | 446 | 395 | (19 | ) | (7 | ) | |||||||||||||||||||
Quoted Public Value | 493 | 831 | 1,022 | 808 | 677 | (41 | ) | (27 | ) | |||||||||||||||||||
Privately-Held Direct Securities | ||||||||||||||||||||||||||||
Carrying Value | 5,294 | 4,692 | 4,241 | 4,321 | 5,077 | 13 | 4 | |||||||||||||||||||||
Cost | 5,574 | 5,795 | 5,482 | 5,647 | 6,501 | (4 | ) | (14 | ) | |||||||||||||||||||
Third-Party Fund Investments | ||||||||||||||||||||||||||||
Carrying Value | 744 | 802 | 682 | 642 | 675 | (7 | ) | 10 | ||||||||||||||||||||
Cost | 1,026 | 1,080 | 1,000 | 963 | 1,000 | (5 | ) | 3 | ||||||||||||||||||||
Total Private Equity Portfolio - Carrying Value | $ | 6,427 | $ | 6,081 | $ | 5,619 | $ | 5,552 | $ | 6,253 | 6 | 3 | ||||||||||||||||
Total Private Equity Portfolio - Cost | $ | 6,966 | $ | 7,326 | $ | 7,021 | $ | 7,056 | $ | 7,896 | (5 | ) | (12 | ) | ||||||||||||||
(a) | Losses reflect repositioning of the Treasury investment securities portfolio. Excludes gains/losses on securities used to manage risk associated with MSRs. | |
(b) | As of January 1, 2007, $19.4 billion and $5.3 billion of held-for-investment residential mortgage loans were transferred from RFS and AM, respectively, to the Corporate segment for risk management and reporting purposes. | |
(c) | Private equity gains in the first quarter of 2007 include a fair value adjustment of $464 million related to the adoption of SFAS 157. In addition, the first quarter of 2007 includes the reclassification of certain private equity carried interest from Net revenue to Compensation expense. | |
(d) | Included in Principal Transactions. |
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Mar 31, 2007 | ||||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||||
Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Mar 31 | ||||||||||||||||||||||
2007 | 2006 | 2006 | 2006 | 2006 | 2006 | 2006 | ||||||||||||||||||||||
CREDIT EXPOSURE | ||||||||||||||||||||||||||||
WHOLESALE (a) (b) | ||||||||||||||||||||||||||||
Loans - U.S. | $ | 108,627 | $ | 118,686 | $ | 123,791 | $ | 125,870 | $ | 118,501 | (8 | )% | (8 | )% | ||||||||||||||
Loans - Non-U.S. | 59,567 | 65,056 | 55,612 | 52,345 | 46,298 | (8 | ) | 29 | ||||||||||||||||||||
TOTAL WHOLESALE LOANS - REPORTED | 168,194 | 183,742 | 179,403 | 178,215 | 164,799 | (8 | ) | 2 | ||||||||||||||||||||
CONSUMER (c) (d) | ||||||||||||||||||||||||||||
Home Equity | 87,741 | 85,730 | 80,399 | 77,826 | 75,241 | 2 | 17 | |||||||||||||||||||||
Mortgage (includes RFS and Corporate) | 46,574 | 59,668 | 60,075 | 60,014 | 57,690 | (22 | ) | (19 | ) | |||||||||||||||||||
Auto Loans and Leases | 40,937 | 41,009 | 40,310 | 42,184 | 44,600 | - | (8 | ) | ||||||||||||||||||||
Credit Card Receivables - Reported | 78,173 | 85,881 | 78,587 | 72,961 | 64,691 | (9 | ) | 21 | ||||||||||||||||||||
Other Loans | 28,146 | 27,097 | 24,770 | 23,904 | 25,060 | 4 | 12 | |||||||||||||||||||||
TOTAL CONSUMER LOANS - REPORTED | 281,571 | 299,385 | 284,141 | 276,889 | 267,282 | (6 | ) | 5 | ||||||||||||||||||||
TOTAL LOANS - REPORTED | 449,765 | 483,127 | 463,544 | 455,104 | 432,081 | (7 | ) | 4 | ||||||||||||||||||||
Credit Card Securitizations | 68,403 | 66,950 | 65,245 | 66,349 | 69,580 | 2 | (2 | ) | ||||||||||||||||||||
TOTAL LOANS - MANAGED | 518,168 | 550,077 | 528,789 | 521,453 | 501,661 | (6 | ) | 3 | ||||||||||||||||||||
Derivative Receivables | 49,647 | 55,601 | 58,265 | 54,075 | 52,750 | (11 | ) | (6 | ) | |||||||||||||||||||
Interests in Purchased Receivables (e) (f) | - | - | - | - | 29,029 | NM | NM | |||||||||||||||||||||
TOTAL CREDIT-RELATED ASSETS | 567,815 | 605,678 | 587,054 | 575,528 | 583,440 | (6 | ) | (3 | ) | |||||||||||||||||||
Wholesale Lending-Related Commitments (f) | 412,382 | 391,424 | 374,417 | 366,914 | 322,575 | 5 | 28 | |||||||||||||||||||||
TOTAL | $ | 980,197 | $ | 997,102 | $ | 961,471 | $ | 942,442 | $ | 906,015 | (2 | ) | 8 | |||||||||||||||
Memo: Total by Category | ||||||||||||||||||||||||||||
Total Wholesale Exposure (g) | $ | 630,223 | $ | 630,767 | $ | 612,085 | $ | 599,204 | $ | 569,153 | - | 11 | ||||||||||||||||
Total Consumer Managed Loans (h) | 349,974 | 366,335 | 349,386 | 343,238 | 336,862 | (4 | ) | 4 | ||||||||||||||||||||
Total | $ | 980,197 | $ | 997,102 | $ | 961,471 | $ | 942,442 | $ | 906,015 | (2 | ) | 8 | |||||||||||||||
Risk Profile of Wholesale Credit Exposure: | ||||||||||||||||||||||||||||
Investment-Grade (i) | $ | 487,404 | $ | 490,185 | $ | 481,249 | $ | 464,982 | $ | 445,848 | (1 | ) | 9 | |||||||||||||||
Noninvestment-Grade: (i) | ||||||||||||||||||||||||||||
Noncriticized | 122,759 | 113,049 | 106,831 | 105,383 | 98,354 | 9 | 25 | |||||||||||||||||||||
Criticized Performing | 5,117 | 4,599 | 4,169 | 3,431 | 4,325 | 11 | 18 | |||||||||||||||||||||
Criticized Nonperforming | 263 | 427 | 674 | 783 | 731 | (38 | ) | (64 | ) | |||||||||||||||||||
Total Noninvestment-Grade | 128,139 | 118,075 | 111,674 | 109,597 | 103,410 | 9 | 24 | |||||||||||||||||||||
Held-for-Sale Wholesale Loans | 14,680 | 22,256 | 18,889 | 24,323 | 19,555 | (34 | ) | (25 | ) | |||||||||||||||||||
Purchased Nonperforming Held-for-Sale Wholesale Loans (j) | - | 251 | 273 | 302 | 340 | NM | NM | |||||||||||||||||||||
Total Wholesale Exposure | $ | 630,223 | $ | 630,767 | $ | 612,085 | $ | 599,204 | $ | 569,153 | - | 11 | ||||||||||||||||
(a) | Includes Investment Bank, Commercial Banking, Treasury & Securities Services and Asset Management. | |
(b) | Excludes approximately $12.0 billion of loans reclassified from held-for-sale to Trading assets as a result of the adoption of SFAS 159 effective January 1, 2007. | |
(c) | Includes Retail Financial Services, Card Services and residential mortgage loans reported in the Corporate segment. | |
(d) | Excludes $11.6 billion of consumer loans carried at fair value and classified as Trading Assets. | |
(e) | These represent undivided interests in pools of receivables and similar types of assets. | |
(f) | As a result of restructuring certain multi-seller conduits the Firm administers, during the second quarter of 2006, JPMorgan Chase deconsolidated $29 billion of Interests in Purchased Receivables, $3 billion of Loans and $1 billion of Securities, and recorded a related increase of $33 billion of Lending-Related Commitments. | |
(g) | Represents Total Wholesale Loans, Derivative Receivables, Interests in Purchased Receivables and Wholesale Lending-Related Commitments. | |
(h) | Represents Total Consumer Loans plus Credit Card Securitizations, excluding consumer Lending-related commitments. | |
(i) | Excludes HFS loans. | |
(j) | Represents distressed HFS wholesale loans purchased as part of IB’s proprietary activities, which are excluded from Nonperforming assets. Beginning January 1, 2007, fair value accounting was elected for this portfolio and the loans were reclassified as Trading Assets. |
Note: | The risk profile is based on JPMorgan Chase’s internal risk ratings, which generally correspond to the following ratings as defined by Standard & Poor’s / Moody’s: Investment-Grade: AAA / Aaa to BBB- / Baa3 Noninvestment-Grade: BB+ / Ba1 and below |
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JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions, except ratio data) | ![]() |
Mar 31, 2007 | ||||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||||
Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Mar 31 | ||||||||||||||||||||||
2007 | 2006 | 2006 | 2006 | 2006 | 2006 | 2006 | ||||||||||||||||||||||
NONPERFORMING ASSETS AND RATIOS | ||||||||||||||||||||||||||||
WHOLESALE LOANS (a) | ||||||||||||||||||||||||||||
Loans - U.S. | $ | 205 | $ | 309 | $ | 486 | $ | 663 | $ | 572 | (34 | )% | (64 | )% | ||||||||||||||
Loans - Non-U.S. | 62 | 82 | 170 | 148 | 165 | (24 | ) | (62 | ) | |||||||||||||||||||
TOTAL WHOLESALE LOANS-REPORTED (b) | 267 | 391 | 656 | 811 | 737 | (32 | ) | (64 | ) | |||||||||||||||||||
CONSUMER LOANS (c) | ||||||||||||||||||||||||||||
Home Equity | 459 | 454 | 400 | 403 | 451 | 1 | 2 | |||||||||||||||||||||
Mortgage (includes RFS and Corporate) | 960 | 769 | 588 | 503 | 451 | 25 | 113 | |||||||||||||||||||||
Auto Loans and Leases | 95 | 132 | 130 | 133 | 157 | (28 | ) | (39 | ) | |||||||||||||||||||
Credit Card Receivables - Reported | 9 | 9 | 10 | 11 | 12 | - | (25 | ) | ||||||||||||||||||||
Other Loans | 326 | 322 | 286 | 300 | 290 | 1 | 12 | |||||||||||||||||||||
TOTAL CONSUMER LOANS-REPORTED (d) | 1,849 | 1,686 | 1,414 | 1,350 | 1,361 | 10 | 36 | |||||||||||||||||||||
TOTAL LOANS REPORTED (b) | 2,116 | 2,077 | 2,070 | 2,161 | 2,098 | 2 | 1 | |||||||||||||||||||||
Derivative Receivables | 36 | 36 | 35 | 36 | 49 | - | (27 | ) | ||||||||||||||||||||
Assets Acquired in Loan Satisfactions | 269 | 228 | 195 | 187 | 201 | 18 | 34 | |||||||||||||||||||||
TOTAL NONPERFORMING ASSETS (b) | $ | 2,421 | $ | 2,341 | $ | 2,300 | $ | 2,384 | $ | 2,348 | 3 | 3 | ||||||||||||||||
PURCHASED HELD-FOR-SALE WHOLESALE LOANS (e) | $ | - | $ | 251 | $ | 273 | $ | 302 | $ | 340 | NM | NM | ||||||||||||||||
TOTAL NONPERFORMING LOANS TO TOTAL LOANS | 0.47 | % | 0.43 | % | 0.45 | % | 0.47 | % | 0.49 | % | ||||||||||||||||||
NONPERFORMING ASSETS BY LOB | ||||||||||||||||||||||||||||
Investment Bank | $ | 128 | $ | 269 | $ | 456 | $ | 525 | $ | 484 | (52 | ) | (74 | ) | ||||||||||||||
Retail Financial Services | 1,910 | 1,902 | 1,595 | 1,520 | 1,537 | - | 24 | |||||||||||||||||||||
Card Services | 9 | 9 | 10 | 11 | 12 | - | (25 | ) | ||||||||||||||||||||
Commercial Banking | 142 | 122 | 160 | 230 | 214 | 16 | (34 | ) | ||||||||||||||||||||
Treasury & Securities Services | - | - | 22 | 22 | 22 | NM | NM | |||||||||||||||||||||
Asset Management | 35 | 39 | 57 | 76 | 79 | (10 | ) | (56 | ) | |||||||||||||||||||
Corporate (f) | 197 | - | - | - | - - | NM | NM | |||||||||||||||||||||
TOTAL | $ | 2,421 | $ | 2,341 | $ | 2,300 | $ | 2,384 | $ | 2,348 | 3 | 3 | ||||||||||||||||
(a) | Includes nonperforming HFS loans of $4 million, $4 million, $21 million, $70 million and $68 million at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. | |
(b) | Excludes purchased HFS wholesale loans. | |
(c) | Includes nonperforming HFS loans of $112 million, $116 million, $24 million, $9 million and $16 million at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. | |
(d) | Excludes Nonperforming assets related to (1) loans eligible for repurchase as well as loans repurchased from GNMA pools that are insured by U.S. government agencies and U.S. government- sponsored enterprises of $1.3 billion, $1.2 billion, $1.1 billion, $1.1 billion and $1.1 billion at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006, and March 31, 2006, respectively, and (2) education loans that are 90 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program of $178 million, $219 million, $189 million, $163 million and $156 million for the quarters ended March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts for GNMA and education loans are excluded, as reimbursement is proceeding normally. | |
(e) | Represents distressed HFS wholesale loans purchased as part of IB’s proprietary activities, which are excluded from Nonperforming assets. Beginning January 1, 2007, fair value accounting was elected for this portfolio and the loans were reclassified as Trading Assets. | |
(f) | Relates to held-for-investment prime mortgage loans transferred from RFS and AM to the Corporate segment. |
Page 27
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JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions, except ratio data) | ![]() |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
GROSS CHARGE-OFFS | ||||||||||||||||||||||||||||
Wholesale Loans | $ | 17 | $ | 76 | $ | 48 | $ | 23 | $ | 39 | (78 | )% | (56 | )% | ||||||||||||||
Consumer (includes RFS and Corporate) | 241 | 266 | 186 | 172 | 178 | (9 | ) | 35 | ||||||||||||||||||||
Credit Card Receivables - Reported | 847 | 801 | 777 | 653 | 665 | 6 | 27 | |||||||||||||||||||||
Total Loans - Reported | 1,105 | 1,143 | 1,011 | 848 | 882 | (3 | ) | 25 | ||||||||||||||||||||
Credit Card Securitizations | 702 | 694 | 702 | 656 | 527 | 1 | 33 | |||||||||||||||||||||
Total Loans - Managed | 1,807 | 1,837 | 1,713 | 1,504 | 1,409 | (2 | ) | 28 | ||||||||||||||||||||
RECOVERIES | ||||||||||||||||||||||||||||
Wholesale Loans | 23 | 48 | 59 | 42 | 59 | (52 | ) | (61 | ) | |||||||||||||||||||
Consumer (includes RFS and Corporate) | 53 | 52 | 58 | 59 | 57 | 2 | (7 | ) | ||||||||||||||||||||
Credit Card Receivables - Reported | 126 | 113 | 104 | 93 | 98 | 12 | 29 | |||||||||||||||||||||
Total Loans - Reported | 202 | 213 | 221 | 194 | 214 | (5 | ) | (6 | ) | |||||||||||||||||||
Credit Card Securitizations | 109 | 101 | 95 | 95 | 78 | 8 | 40 | |||||||||||||||||||||
Total Loans - Managed | 311 | 314 | 316 | 289 | 292 | (1 | ) | 7 | ||||||||||||||||||||
NET CHARGE-OFFS | ||||||||||||||||||||||||||||
Wholesale Loans | (6 | ) | 28 | (11 | ) | (19 | ) | (20 | ) | NM | 70 | |||||||||||||||||
Consumer (includes RFS and Corporate) | 188 | 214 | 128 | 113 | 121 | (12 | ) | 55 | ||||||||||||||||||||
Credit Card Receivables - Reported | 721 | 688 | 673 | 560 | 567 | 5 | 27 | |||||||||||||||||||||
Total Loans - Reported | 903 | 930 | 790 | 654 | 668 | (3 | ) | 35 | ||||||||||||||||||||
Credit Card Securitizations | 593 | 593 | 607 | 561 | 449 | - | 32 | |||||||||||||||||||||
Total Loans - Managed | $ | 1,496 | $ | 1,523 | $ | 1,397 | $ | 1,215 | $ | 1,117 | (2 | ) | 34 | |||||||||||||||
NET CHARGE-OFF RATES - ANNUALIZED | ||||||||||||||||||||||||||||
Wholesale Loans (a) | (0.02 | )% | 0.07 | % | (0.03 | )% | (0.05 | )% | (0.06 | )% | ||||||||||||||||||
Consumer (includes RFS and Corporate) (b) | 0.47 | 0.45 | 0.27 | 0.24 | 0.27 | |||||||||||||||||||||||
Credit Card Receivables - Reported | 3.57 | 3.35 | 3.48 | 3.29 | 3.36 | |||||||||||||||||||||||
Total Loans - Reported (a) (b) | 0.85 | 0.84 | 0.74 | 0.64 | 0.69 | |||||||||||||||||||||||
Credit Card Securitizations | 3.56 | 3.57 | 3.70 | 3.26 | 2.62 | |||||||||||||||||||||||
Total Loans - Managed (a) (b) | 1.22 | 1.20 | 1.13 | 1.02 | 0.98 | |||||||||||||||||||||||
Memo: Credit Card - Managed | 3.57 | 3.45 | 3.58 | 3.28 | 2.99 |
(a) | Average wholesale loans held-for-sale were $13.3 billion, $24.5 billion, $24.4 billion, $20.3 billion and $19.5 billion for the quarters ended March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. Average wholesale loans carried at fair value were $900 million for the quarter ended March 31, 2007. These amounts are not included in the net charge-off rates. | |
(b) | Average consumer loans (excluding Card) held-for-sale were $21.7 billion, $21.2 billion, $14.0 billion, $12.9 billion and $16.4 billion for the quarters ended March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts are not included in the net charge-off rates. |
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JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions, except ratio data) | ![]() |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
SUMMARY OF CHANGES IN THE ALLOWANCE FOR LOAN LOSSES | ||||||||||||||||||||||||||||
Beginning Balance | $ | 7,279 | $ | 7,056 | $ | 7,076 | $ | 7,275 | $ | 7,090 | 3 | % | 3 | % | ||||||||||||||
Net Charge-Offs | (903 | ) | (930 | ) | (790 | ) | (654 | ) | (668 | ) | 3 | (35 | ) | |||||||||||||||
Provision for Loan Losses | 979 | 1,085 | 768 | 453 | 847 | (10 | ) | 16 | ||||||||||||||||||||
Other (a)(b) | (55 | ) | 68 | 2 | 2 | 6 | (99 | ) | (83 | ) | ||||||||||||||||||
�� | ||||||||||||||||||||||||||||
Ending Balance | $ | 7,300 | $ | 7,279 | $ | 7,056 | $ | 7,076 | $ | 7,275 | - | - | ||||||||||||||||
SUMMARY OF CHANGES IN THE ALLOWANCE FOR LENDING-RELATED COMMITMENTS | ||||||||||||||||||||||||||||
Beginning Balance | $ | 524 | $ | 468 | $ | 424 | $ | 384 | $ | 400 | 12 | 31 | ||||||||||||||||
Provision for Lending-Related Commitments | 29 | 49 | 44 | 40 | (16 | ) | (41 | ) | NM | |||||||||||||||||||
Other (b) | - | 7 | - | - | - | NM | NM | |||||||||||||||||||||
Ending Balance | $ | 553 | $ | 524 | $ | 468 | $ | 424 | $ | 384 | 6 | 44 | ||||||||||||||||
ALLOWANCE COMPONENTS AND RATIOS | ||||||||||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES | ||||||||||||||||||||||||||||
Wholesale | ||||||||||||||||||||||||||||
Asset Specific | $ | 54 | $ | 51 | $ | 101 | $ | 160 | $ | 118 | 6 | (54 | ) | |||||||||||||||
Formula - Based | 2,639 | 2,660 | 2,473 | 2,409 | 2,550 | (1 | ) | 3 | ||||||||||||||||||||
Total Wholesale | 2,693 | 2,711 | 2,574 | 2,569 | 2,668 | (1 | ) | 1 | ||||||||||||||||||||
Consumer (c) | ||||||||||||||||||||||||||||
Formula - Based | 4,607 | 4,568 | 4,482 | 4,507 | 4,607 | 1 | - | |||||||||||||||||||||
Total Allowance for Loan Losses | 7,300 | 7,279 | 7,056 | 7,076 | 7,275 | - | - | |||||||||||||||||||||
Allowance for Lending-Related Commitments | 553 | 524 | 468 | 424 | 384 | 6 | 44 | |||||||||||||||||||||
Total Allowance for Credit Losses | $ | 7,853 | $ | 7,803 | $ | 7,524 | $ | 7,500 | $ | 7,659 | 1 | 3 | ||||||||||||||||
Wholesale Allowance for Loan Losses to Total Wholesale Loans (d) | 1.76 | % | 1.68 | % | 1.61 | % | 1.67 | % | 1.84 | % | ||||||||||||||||||
Consumer Allowance for Loan Losses to Total Consumer Loans (e) | 1.72 | 1.71 | 1.68 | 1.70 | 1.82 | |||||||||||||||||||||||
Allowance for Loan Losses to Total Loans (d) (e) | 1.74 | 1.70 | 1.65 | 1.69 | 1.83 | |||||||||||||||||||||||
Allowance for Loan Losses to Total Nonperforming Loans (f) | 365 | 372 | 348 | 340 | 361 | |||||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES BY LOB | ||||||||||||||||||||||||||||
Investment Bank | $ | 1,037 | $ | 1,052 | $ | 1,010 | $ | 1,038 | $ | 1,117 | (1 | ) | (7 | ) | ||||||||||||||
Retail Financial Services | 1,453 | 1,392 | 1,306 | 1,321 | 1,333 | 4 | 9 | |||||||||||||||||||||
Card Services | 3,092 | 3,176 | 3,176 | 3,186 | 3,274 | (3 | ) | (6 | ) | |||||||||||||||||||
Commercial Banking | 1,531 | 1,519 | 1,431 | 1,394 | 1,415 | 1 | 8 | |||||||||||||||||||||
Treasury & Securities Services | 11 | 7 | 9 | 9 | 6 | 57 | 83 | |||||||||||||||||||||
Asset Management | 114 | 121 | 112 | 117 | 119 | (6 | ) | (4 | ) | |||||||||||||||||||
Corporate (g) | 62 | 12 | 12 | 11 | 11 | 417 | 464 | |||||||||||||||||||||
Total | $ | 7,300 | $ | 7,279 | $ | 7,056 | $ | 7,076 | $ | 7,275 | - | - | ||||||||||||||||
(a) | First quarter of 2007 primarily relates to the Firm’s adoption of SFAS 159 effective January 1, 2007. | |
(b) | Fourth quarter of 2006 reflects The Bank of New York transaction. | |
(c) | Includes RFS, CS and Corporate. | |
(d) | Wholesale loans held-for-sale were $14.7 billion, $22.5 billion, $19.2 billion, $24.6 billion and $19.9 billion at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. Wholesale loans carried at fair value were $900 million for the quarter ended March 31, 2007 These amounts are not included in the allowance coverage ratios. | |
(e) | Consumer loans held-for-sale were $13.4 billion, $32.7 billion, $17.0 billion, $11.8 billion and $14.3 billion at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, respectively. These amounts are not included in the allowance coverage ratios. | |
(f) | Nonperforming loans held-for-sale were $116 million, $120 million, $45 million, $79 million and $84 million at March 31, 2007, December 31, 2006, September 30, 2006, June 30, 2006 and March 31, 2006, espectively. These amounts are not included in the allowance coverage ratios. | |
(g) | March 31, 2007 includes $50 million associated with held-for-investment prime mortgages transferred from RFS and AM to the Corporate segment and $12 million related to Hurricane Katrina. |
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JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions) | ![]() |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
PROVISION FOR CREDIT LOSSES | ||||||||||||||||||||||||||||
LOANS | ||||||||||||||||||||||||||||
Investment Bank | $ | 35 | $ | 50 | $ | (36 | ) | $ | (91 | ) | $ | 189 | (30 | )% | (81 | )% | ||||||||||||
Commercial Banking | 17 | 86 | 55 | (24 | ) | 16 | (80 | ) | 6 | |||||||||||||||||||
Treasury & Securities Services | 4 | (2 | ) | 1 | 4 | (4 | ) | NM | NM | |||||||||||||||||||
Asset Management | (8 | ) | 12 | (29 | ) | (7 | ) | (6 | ) | NM | (33 | ) | ||||||||||||||||
Corporate | - | (2 | ) | 1 | - | - | NM | NM | ||||||||||||||||||||
Total Wholesale | 48 | 144 | (8 | ) | (118 | ) | 195 | (67 | ) | (75 | ) | |||||||||||||||||
Retail Financial Services | 292 | 253 | 113 | 101 | 85 | 15 | 244 | |||||||||||||||||||||
Card Services (a) | 636 | 688 | 663 | 470 | 567 | (8 | ) | 12 | ||||||||||||||||||||
Corporate (b) | 3 | - | - | - | - | NM | NM | |||||||||||||||||||||
Total Consumer | 931 | 941 | 776 | 571 | 652 | (1 | ) | 43 | ||||||||||||||||||||
Total Provision for Loan Losses | 979 | 1,085 | 768 | 453 | 847 | (10 | ) | 16 | ||||||||||||||||||||
LENDING-RELATED COMMITMENTS | ||||||||||||||||||||||||||||
Investment Bank | $ | 28 | $ | 13 | $ | 43 | $ | 29 | $ | (6 | ) | 115 | NM | |||||||||||||||
Commercial Banking | - | 25 | (1 | ) | 12 | (9 | ) | NM | NM | |||||||||||||||||||
Treasury & Securities Services | 2 | - | - | - | - | NM | NM | |||||||||||||||||||||
Asset Management | (1 | ) | 2 | 1 | - | (1 | ) | NM | - | |||||||||||||||||||
Total Wholesale | 29 | 40 | 43 | 41 | (16 | ) | (28 | ) | NM | |||||||||||||||||||
Retail Financial Services | - | 9 | 1 | (1 | ) | - | NM | NM | ||||||||||||||||||||
Card Services | - | - | - | - | - | NM | NM | |||||||||||||||||||||
Total Consumer | - | 9 | 1 | (1 | ) | - | NM | NM | ||||||||||||||||||||
Total Provision for Lending-Related Commitments | 29 | 49 | 44 | 40 | (16 | ) | (41 | ) | NM | |||||||||||||||||||
TOTAL PROVISION FOR CREDIT LOSSES | ||||||||||||||||||||||||||||
Investment Bank | $ | 63 | $ | 63 | $ | 7 | $ | (62 | ) | $ | 183 | - | (66 | ) | ||||||||||||||
Commercial Banking | 17 | 111 | 54 | (12 | ) | 7 | (85 | ) | 143 | |||||||||||||||||||
Treasury & Securities Services | 6 | (2 | ) | 1 | 4 | (4 | ) | NM | NM | |||||||||||||||||||
Asset Management | (9 | ) | 14 | (28 | ) | (7 | ) | (7 | ) | NM | (29 | ) | ||||||||||||||||
Corporate | - | (2 | ) | 1 | - | - | NM | NM | ||||||||||||||||||||
Total Wholesale | 77 | 184 | 35 | (77 | ) | 179 | (58 | ) | (57 | ) | ||||||||||||||||||
Retail Financial Services | 292 | 262 | 114 | 100 | 85 | 11 | 244 | |||||||||||||||||||||
Card Services (a) | 636 | 688 | 663 | 470 | 567 | (8 | ) | 12 | ||||||||||||||||||||
Corporate (b) | 3 | - | - | - | - | NM | NM | |||||||||||||||||||||
Total Consumer | 931 | 950 | 777 | 570 | 652 | (2 | ) | 43 | ||||||||||||||||||||
Total Provision for Credit Losses | 1,008 | 1,134 | 812 | 493 | 831 | (11 | ) | 21 | ||||||||||||||||||||
Securitized Credit Losses | 593 | 593 | 607 | 561 | 449 | - | 32 | |||||||||||||||||||||
Managed Provision for Credit Losses | $ | 1,601 | $ | 1,727 | $ | 1,419 | $ | 1,054 | $ | 1,280 | (7 | ) | 25 | |||||||||||||||
(a) | Second quarter of 2006 includes a $90 million release of a $100 million special provision, originally recorded in the third quarter of 2005, related to Hurricane Katrina. | |
(b) | Includes amounts related to held-for-investment prime mortgages transferred from RFS and AM to the Corporate segment. |
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JPMORGAN CHASE & CO. CAPITAL | ![]() | |
(in millions, except per share and ratio data) |
QUARTERLY TRENDS | ||||||||||||||||||||||||||||
1Q07 Change | ||||||||||||||||||||||||||||
1Q07 | 4Q06 | 3Q06 | 2Q06 | 1Q06 | 4Q06 | 1Q06 | ||||||||||||||||||||||
COMMON SHARES OUTSTANDING | ||||||||||||||||||||||||||||
Weighted - Average Basic Shares Outstanding | 3,456.4 | 3,465.3 | 3,468.6 | 3,473.8 | 3,472.7 | - | % | - | % | |||||||||||||||||||
Weighted - Average Diluted Shares Outstanding | 3,559.5 | 3,578.6 | 3,574.0 | 3,572.2 | 3,570.8 | (1 | ) | - | ||||||||||||||||||||
Common Shares Outstanding - at Period End | 3,416.3 | 3,461.7 | 3,467.5 | 3,470.6 | 3,473.0 | (1 | ) | (2 | ) | |||||||||||||||||||
Cash Dividends Declared per Share | $ | 0.34 | $ | 0.34 | $ | 0.34 | $ | 0.34 | $ | 0.34 | - | - | ||||||||||||||||
Book Value per Share | 34.45 | 33.45 | 32.75 | 31.89 | 31.19 | 3 | 10 | |||||||||||||||||||||
Dividend Payout (a) | 25 | % | 27 | % | 37 | % | 35 | % | 39 | % | ||||||||||||||||||
NET INCOME | $ | 4,787 | $ | 4,526 | $ | 3,297 | $ | 3,540 | $ | 3,081 | 6 | 55 | ||||||||||||||||
Preferred Dividends | - | - | - | - | 4 | NM | NM | |||||||||||||||||||||
Net Income Applicable to Common Stock | $ | 4,787 | $ | 4,526 | $ | 3,297 | $ | 3,540 | $ | 3,077 | 6 | 56 | ||||||||||||||||
INCOME PER SHARE | ||||||||||||||||||||||||||||
Basic Earnings per Share | ||||||||||||||||||||||||||||
Income from continuing operations | $ | 1.38 | $ | 1.13 | $ | 0.93 | $ | 1.00 | $ | 0.87 | 22 | 59 | ||||||||||||||||
Net Income | 1.38 | 1.31 | 0.95 | 1.02 | 0.89 | 5 | 55 | |||||||||||||||||||||
Diluted Earnings per Share | ||||||||||||||||||||||||||||
Income from continuing operations | $ | 1.34 | $ | 1.09 | $ | 0.90 | $ | 0.98 | $ | 0.85 | 23 | 58 | ||||||||||||||||
Net Income | 1.34 | 1.26 | 0.92 | 0.99 | 0.86 | 6 | 56 | |||||||||||||||||||||
SHARE PRICE | ||||||||||||||||||||||||||||
High | $ | 51.95 | $ | 49.00 | $ | 47.49 | $ | 46.80 | $ | 42.43 | 6 | 22 | ||||||||||||||||
Low | 45.91 | 45.51 | 40.40 | 39.33 | 37.88 | 1 | 21 | |||||||||||||||||||||
Close | 48.38 | 48.30 | 46.96 | 42.00 | 41.64 | - | 16 | |||||||||||||||||||||
Market Capitalization | 165,280 | 167,199 | 162,835 | 145,764 | 144,614 | (1 | ) | 14 | ||||||||||||||||||||
STOCK REPURCHASE PROGRAM (b) (c) | ||||||||||||||||||||||||||||
Aggregate Repurchases | $ | 4,000.9 | $ | 1,000.3 | $ | 900.0 | $ | 745.5 | $ | 1,290.3 | 300 | 210 | ||||||||||||||||
Common Shares Repurchased | 80.9 | 21.1 | 20.0 | 17.7 | 31.8 | 283 | 154 | |||||||||||||||||||||
Average Purchase Price | $ | 49.45 | $ | 47.33 | $ | 44.88 | $ | 42.24 | $ | 40.54 | 4 | 22 | ||||||||||||||||
CAPITAL RATIOS | ||||||||||||||||||||||||||||
Tier 1 Capital | $ | 82,538 | (d) | $ | 81,055 | $ | 79,830 | $ | 74,983 | $ | 73,085 | 2 | 13 | |||||||||||||||
Total Capital | 115,258 | (d) | 115,265 | 111,670 | 106,283 | 103,800 | - | 11 | ||||||||||||||||||||
Risk - Weighted Assets | 974,530 | (d) | 935,909 | 926,455 | 884,228 | 858,080 | 4 | 14 | ||||||||||||||||||||
Adjusted Average Assets | 1,324,145 | (d) | 1,308,699 | 1,257,364 | 1,282,233 | 1,195,231 | 1 | 11 | ||||||||||||||||||||
Tier 1 Capital Ratio | 8.5 | %(d) | 8.7 | % | 8.6 | % | 8.5 | % | 8.5 | % | ||||||||||||||||||
Total Capital Ratio | 11.8 | (d) | 12.3 | 12.1 | 12.0 | 12.1 | ||||||||||||||||||||||
Tier 1 Leverage Ratio | 6.2 | (d) | 6.2 | 6.3 | 5.8 | 6.1 | ||||||||||||||||||||||
INTANGIBLE ASSETS (PERIOD - END) | ||||||||||||||||||||||||||||
Goodwill | $ | 45,063 | $ | 45,186 | $ | 43,372 | $ | 43,498 | $ | 43,899 | - | 3 | ||||||||||||||||
Mortgage Servicing Rights | 7,937 | 7,546 | 7,378 | 8,247 | 7,539 | 5 | 5 | |||||||||||||||||||||
Purchased Credit Card Relationships | 2,758 | 2,935 | 2,982 | 3,138 | 3,243 | (6 | ) | (15 | ) | |||||||||||||||||||
All Other Intangibles | 4,205 | 4,371 | 4,078 | 4,231 | 4,832 | (4 | ) | (13 | ) | |||||||||||||||||||
Total Intangibles | $ | 59,963 | $ | 60,038 | $ | 57,810 | $ | 59,114 | $ | 59,513 | - | 1 | ||||||||||||||||
(a) | Based on Net income amounts. | |
(b) | The Board of Directors has authorized the repurchase of up to $10.0 billion of the Firm’s common shares. The new authorization commences April 19, 2007, and replaces the Firm’s previous $8.0 billion repurchase program authorized on March 21, 2006. As of the close of business on April 17, 2007, there was approximately $850 million remaining on the March 2006 authorization. | |
(c) | Excludes commission costs. | |
(d) | Estimated. |
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JPMORGAN CHASE & CO. Glossary of Terms | ![]() |
ACH:Automated Clearing House
Average Managed Assets:Refers to total assets on the Firm’s balance sheet plus credit card receivables that have been securitized.
Beneficial interest issued by consolidated VIEs:Represents the interest of third-party holders of debt/equity securities, or other obligations, issued by VIEs that JPMorgan Chase consolidates under FIN 46R. 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.
Contractual Credit Card Charge-off:In accordance with the Federal Financial Institutions Examination Council policy, credit card loans are charged off by the end of the month in which the account becomes 180 days past due or within 60 days from receiving notification of the filing of bankruptcy, whichever is earlier.
Corporate:Includes Private Equity, Treasury and Corporate Other, which includes other centrally managed expenses and discontinued operations.
Credit Card Securitizations:Card Services’ managed results excludes the impact of credit card securitizations on total net revenue, the provision for credit losses, net charge-offs and loan receivables. Through securitization, the Firm transforms a portion of its credit card receivables into securities, which are sold to investors. The credit card receivables are removed from the Consolidated balance sheets through the transfer of the receivables to a trust, and the sale of undivided interests to investors that entitle the investors to specific cash flows generated from the credit card receivables. The Firm retains the remaining undivided interests as seller’s interests, which are recorded in Loans on the Consolidated balance sheets. A gain or loss on the sale of credit card receivables to investors is recorded in Other Income. Securitization also affects the Firm’s Consolidated statements of income as the aggregate amount of interest income, certain fee revenue and recoveries that is in excess of the aggregate amount of interest paid to the investors, gross credit losses and other trust expenses related to the securitized receivables are reclassified into credit card income.
Discontinued operations:A component of an entity that is classified as held-for-sale or that has been disposed of from ongoing operations in its entirety or piecemeal, and for which the entity will not have any significant, continuing involvement. A discontinued operation may be a separate major business segment, a component of a major business segment or a geographical area of operations of the entity that can be separately distinguished operationally and for financial reporting purposes.
FIN 39:FASB Interpretation No. 39, “Offsetting of Amounts Related to Certain Contracts - an interpretation of APB Opinion No. 10 and FASB Statement No. 105.”
FIN 46R:FASB Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities - an interpretation of Accounting Research Bulletin No. 51.”
FIN 48:FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109.”
Interests in Purchased Receivables:Represent an ownership interest in a percentage in cash flows of an underlying pool of receivables transferred by a third-party seller into a bankruptcy remote entity, generally a trust.
Investment-grade:An indication of credit quality based upon JPMorgan Chase’s internal risk assessment system. “Investment-grade” generally represents a risk profile similar to a rating of a BBB-/Baa3 or better, as defined by independent rating agencies.
Managed Basis:A non-GAAP presentation of financial results that includes reclassifications related to credit card securitizations and taxable equivalents. Management uses this non-GAAP financial measure at the segment level because it believes this provides information to investors in understanding the underlying operational performance and trends of the particular business segment and facilitates a comparison of the business segment with the performance of competitors.
Managed Credit Card Receivables:Refers to credit card receivables on the Firm’s balance sheet plus credit card receivables that have been securitized.
Mark-to-market exposure:A measure, at a point in time, of the value of a derivative or foreign exchange contract in the open market. When the mark-to-market value is positive, it indicates the counterparty owes JPMorgan Chase and, therefore, creates a repayment risk for the Firm. When the mark-to-market value is negative, JPMorgan Chase owes the counterparty. In this situation, the Firm does not have repayment risk.
Master netting agreement:An agreement between two counterparties that have multiple derivative contracts with each other that provides for the net settlement of all contracts through a single payment, in a single currency, in the event of default on or termination of any one contract. See FIN 39.
Merger:The July 1, 2004, merger with Bank One Corporation.
MSR Risk Management Revenue:Includes changes in MSR asset fair value due to inputs or assumptions in model and derivative valuation adjustments.
NA:Data is not applicable or available for the period presented.
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.
Principal Transactions:Represents Trading revenue (which includes physical commodities carried at the lower of cost or fair value), primarily in the Investment Bank, plus Private equity gains (losses), primarily in the Private Equity business of Corporate.
Reported Basis:Financial statements prepared under accounting principles generally accepted in the United States of America (“U.S. GAAP”). The reported basis includes the impact of credit card securitizations, but excludes the impact of taxable-equivalent adjustments.
SFAS:Statement of Financial Accounting Standards.
SFAS 123R:“Share-Based Payment.”
SFAS 140:“Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities - a replacement of FASB Statement No. 125.”
SFAS 156:“Accounting for Servicing of Financial Assets - an amendment of FASB Statement No. 140.”
SFAS 157:“Fair Value Measurements.”
SFAS 159:“The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115.”
Tax-Equivalent Basis:Total net revenue for each of the business segments and the Firm is presented on a tax-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 taxable securities and investments. This non-GAAP financial measure allows management to assess the comparability of revenues arising from both taxable and tax-exempt sources. The corresponding income tax impact related to these items is recorded with income tax expense.
Unaudited:The financial statements and information included throughout this document are unaudited and have not been subjected to auditing procedures sufficient to permit an independent certified public accountant to express an opinion thereon.
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 moves in an ordinary market environment.
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Investment Banking
IB’S REVENUES COMPRISE THE FOLLOWING:
1. Investment banking feesincludes advisory, equity underwriting, bond underwriting and loan syndication fees.
2. Fixed income marketsincludes client and portfolio management revenue related to both market-making and proprietary risk-taking across global fixed income markets, including government and corporate debt, foreign exchange, interest rate and commodities markets.
3. Equities marketsincludes client and portfolio management revenue related to market-making and proprietary risk-taking across global equity products, including cash instruments, derivatives and convertibles.
4. Credit portfolio revenueincludes Net interest income, fees and loan sale activity for IB’s credit portfolio. Credit portfolio revenue also includes gains or losses on securities received as part of a loan restructuring, and changes in the credit valuation adjustment (“CVA”), which is the component of the fair value of a derivative that reflects the credit quality of the counterparty. Credit portfolio revenue also includes the results of risk management related to the Firm’s lending and derivative activities.
Retail Financial Services
DESCRIPTION OF SELECTED BUSINESS METRICS WITHIN REGIONAL BANKING:
1. 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.
2. Sales specialists - Retail branch product-specific experts who are licensed or specifically trained to assist in the sale of investments, mortgages, home equity lines and loans, and products tailored to small businesses.
NET MORTGAGE SERVICING REVENUE COMPRISES THE FOLLOWING:
1. Production income - Includes net gain or loss on sales of mortgage loans, and other production related fees.
2. Servicing revenue - Represents all revenues earned from servicing mortgage loans for third parties, including stated service fees, excess service fees, late fees, and other ancillary fees.
3. Changes in MSR asset fair value due to:
— inputs or assumptions in the model - Represents MSR asset fair value adjustments due to changes in market-based inputs, such as interest rates and volatility, as well as updates to valuation assumptions used in the valuation model.
— other changes - Includes changes in the MSR value due to servicing portfolio runoff (or time decay). Effective January 1, 2006, the Firm implemented SFAS 156, adopting fair value for the MSR assets. For the years ended December 31, 2005 and 2004, this amount represents MSR asset amortization expense calculated in accordance with SFAS 140.
4. Derivative valuation adjustments and other - Changes in the fair value of derivative instruments used to offset the impact of changes in market-based inputs to the MSR valuation model.
5. MSR risk management results - Includes “Changes in MSR asset fair value due to inputs or assumptions in model” and “Derivative valuation adjustments and other.”
Retail Financial Services (continued)
MORTGAGE BANKING’S ORIGINATION CHANNELS COMPRISE THE FOLLOWING:
1. Retail - Borrowers who are buying or refinancing a home work directly 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 real estate brokers, home builders or other third parties.
2. Wholesale - A third-party mortgage broker refers loan applications to a mortgage banker at the Firm. Brokers are independent loan originators that specialize in finding and counseling borrowers but do not provide funding for loans.
3. Correspondent- Banks, thrifts, other mortgage banks and other financial institutions sell closed loans to the Firm.
4. Correspondent negotiated transactions (“CNT”) - Mid- to large-sized mortgage lenders, banks and bank-owned mortgage companies sell servicing to the Firm on an as-originated basis. These transactions supplement traditional production channels and provide growth opportunities in the servicing portfolio in stable and rising rate periods.
Card Services
DESCRIPTION OF SELECTED BUSINESS METRICS WITHIN CARD SERVICES:
1. Charge volume - Represents the dollar amount of cardmember purchases, balance transfers and cash advance activity.
2. Net accounts opened - Includes originations, purchases and sales.
3. Merchant acquiring business - Represents an entity that processes payments for merchants. JPMorgan Chase is a partner in Chase Paymentech Solutions, LLC.
4. Bank card volume - Represents the dollar amount of transactions processed for merchants.
5. Total transactions - Represents the number of transactions and authorizations processed for merchants.
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Commercial Banking
COMMERCIAL BANKING REVENUES COMPRISE THE FOLLOWING:
1. Lendingincludes a variety of financing alternatives, which are often 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-backed structures, and leases.
2. Treasury servicesincludes a broad range of products and services enabling clients to transfer, invest and manage the receipt and disbursement of funds, while providing the related information reporting. These products and services include U.S. dollar and multi-currency clearing, ACH, lockbox, disbursement and reconciliation services, check deposits, other check and currency-related services, trade finance and logistics solutions, commercial card, and deposit products, sweeps and money market mutual funds.
3. Investment bankingproducts provide clients with sophisticated capital-raising alternatives, as well as balance sheet and risk management tools through advisory, equity underwriting, loan syndications, investment-grade debt, asset-backed securities, private placements, high-yield bonds, derivatives, foreign exchange hedges and securities sales.
DESCRIPTION OF SELECTED BUSINESS METRICS WITHIN COMMERCIAL BANKING:
1. Liability balancesinclude deposits and deposits that are swept to on-balance sheet liabilities (e.g., commercial paper, Fed funds purchased, and repurchase agreements).
2. IB revenues, gross- Represents the revenue related to investment banking products sold to CB clients.
Treasury & Securities Services
Treasury & Securities Servicesfirmwide metricsinclude certain TSS product revenues and liability balances reported in other lines of business for customers who are also customers of those lines of business. Management reviews firmwide metrics such as liability balances, revenues and overhead ratios in assessing financial performance for TSS as such firmwide metrics capture the firmwide impact of TS’ and TSS’ products and services. Management believes such firmwide metrics are necessary in order to understand the aggregate TSS business.
DESCRIPTION OF SELECTED BUSINESS METRICS WITHIN TREASURY & SECURITIES SERVICES:
Liability balancesinclude deposits and deposits that are swept to on-balance sheet liabilities (e.g., commercial paper, Fed funds purchased, and repurchase agreements).
Asset Management
Assets Under Management:Represent assets actively managed by Asset Management on behalf of institutional, private banking, private client services and retail clients. Excludes assets managed by American Century Companies, Inc., in which the Firm has a 44% ownership interest.
Assets Under Supervision:Represents assets under management as well as custody, brokerage, administration and deposit accounts.
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:
1. Institutionalbrings comprehensive global investment services — including asset management, pension analytics, asset-liability management and active risk budgeting strategies - to corporate and public institutions, endowments, foundations, not-for-profit organizations and governments worldwide.
2. Retailprovides worldwide investment management services and retirement planning and administration through third-party and direct distribution of a full range of investment vehicles.
3. ThePrivate Bankaddresses every facet of wealth management for ultra-high-net-worth individuals and families worldwide, including investment management, capital markets and risk management, tax and estate planning, banking, capital raising and specialty-wealth advisory services.
4. Private Client Servicesoffers high-net-worth individuals, families and business owners in the United States comprehensive wealth management solutions, including investment management, capital markets and risk management, tax and estate planning, banking, and specialty-wealth advisory services.
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