Exhibit 99.2
EARNINGS RELEASE FINANCIAL SUPPLEMENT
FOURTH QUARTER 2011
JPMORGAN CHASE & CO. TABLE OF CONTENTS |
Page(s) | ||
Consolidated Results | ||
Consolidated Financial Highlights | 2-3 | |
Statements of Income | 4 | |
Consolidated Balance Sheets | 5 | |
Condensed Average Balance Sheets and Annualized Yields | 6 | |
Reconciliation from Reported to Managed Summary | 7 | |
Business Detail | ||
Line of Business Financial Highlights — Managed Basis | 8 | |
Investment Bank | 9-12 | |
Retail Financial Services | 13-19 | |
Card Services & Auto | 20-22 | |
Commercial Banking | 23-24 | |
Treasury & Securities Services | 25-27 | |
Asset Management | 28-32 | |
Corporate/Private Equity | 33-34 | |
Credit-Related Information | 35-40 | |
Market Risk-Related Information | 41 | |
Supplemental Detail | ||
Capital and Other Selected Balance Sheet Items | 42 | |
Mortgage Loan Repurchase Liability | 43 | |
Per Share-Related Information | 44 | |
Non-GAAP Financial Measures | 45 | |
Glossary of Terms | 46-50 |
Page 1
JPMORGAN CHASE & CO. CONSOLIDATED FINANCIAL HIGHLIGHTS (in millions, except per share and ratio data) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
SELECTED INCOME STATEMENT DATA | ||||||||||||||||||||||||||||||||||||||||
Reported Basis | ||||||||||||||||||||||||||||||||||||||||
Total net revenue | $ | 21,471 | $ | 23,763 | $ | 26,779 | $ | 25,221 | $ | 26,098 | (10)% | (18)% | $ | 97,234 | $ | 102,694 | (5)% | |||||||||||||||||||||||
Total noninterest expense | 14,540 | 15,534 | 16,842 | 15,995 | 16,043 | (6) | (9) | 62,911 | 61,196 | 3 | ||||||||||||||||||||||||||||||
Pre-provision profit | 6,931 | 8,229 | 9,937 | 9,226 | 10,055 | (16) | (31) | 34,323 | 41,498 | (17) | ||||||||||||||||||||||||||||||
Provision for credit losses | 2,184 | 2,411 | 1,810 | 1,169 | 3,043 | (9) | (28) | 7,574 | 16,639 | (54) | ||||||||||||||||||||||||||||||
NET INCOME | 3,728 | 4,262 | 5,431 | 5,555 | 4,831 | (13) | (23) | 18,976 | 17,370 | 9 | ||||||||||||||||||||||||||||||
Managed Basis (a) | ||||||||||||||||||||||||||||||||||||||||
Total net revenue | 22,198 | 24,368 | 27,410 | 25,791 | 26,722 | (9) | (17) | 99,767 | 104,842 | (5) | ||||||||||||||||||||||||||||||
Total noninterest expense | 14,540 | 15,534 | 16,842 | 15,995 | 16,043 | (6) | (9) | 62,911 | 61,196 | 3 | ||||||||||||||||||||||||||||||
Pre-provision profit | 7,658 | 8,834 | 10,568 | 9,796 | 10,679 | (13) | (28) | 36,856 | 43,646 | (16) | ||||||||||||||||||||||||||||||
Provision for credit losses | 2,184 | 2,411 | 1,810 | 1,169 | 3,043 | (9) | (28) | 7,574 | 16,639 | (54) | ||||||||||||||||||||||||||||||
NET INCOME | 3,728 | 4,262 | 5,431 | 5,555 | 4,831 | (13) | (23) | 18,976 | 17,370 | 9 | ||||||||||||||||||||||||||||||
PER COMMON SHARE DATA | ||||||||||||||||||||||||||||||||||||||||
Basic earnings | 0.90 | 1.02 | 1.28 | 1.29 | 1.13 | (12) | (20) | 4.50 | 3.98 | 13 | ||||||||||||||||||||||||||||||
Diluted earnings | 0.90 | 1.02 | 1.27 | 1.28 | 1.12 | (12) | (20) | 4.48 | 3.96 | 13 | ||||||||||||||||||||||||||||||
Cash dividends declared (b) | 0.25 | 0.25 | 0.25 | 0.25 | 0.05 | — | 400 | 1.00 | 0.20 | 400 | ||||||||||||||||||||||||||||||
Book value | 46.59 | 45.93 | 44.77 | 43.34 | 43.04 | 1 | 8 | 46.59 | 43.04 | 8 | ||||||||||||||||||||||||||||||
Closing share price (c) | 33.25 | 30.12 | 40.94 | 46.10 | 42.42 | 10 | (22) | 33.25 | 42.42 | (22) | ||||||||||||||||||||||||||||||
Market capitalization | 125,442 | 114,422 | 160,083 | 183,783 | 165,875 | 10 | (24) | 125,442 | 165,875 | (24) | ||||||||||||||||||||||||||||||
COMMON SHARES OUTSTANDING | ||||||||||||||||||||||||||||||||||||||||
Average: Basic | 3,801.9 | 3,859.6 | 3,958.4 | 3,981.6 | 3,917.0 | (1) | (3) | 3,900.4 | 3,956.3 | (1) | ||||||||||||||||||||||||||||||
Diluted | 3,811.7 | 3,872.2 | 3,983.2 | 4,014.1 | 3,935.2 | (2) | (3) | 3,920.3 | 3,976.9 | (1) | ||||||||||||||||||||||||||||||
Common shares at period-end | 3,772.7 | 3,798.9 | 3,910.2 | 3,986.6 | 3,910.3 | (1) | (4) | 3,772.7 | 3,910.3 | (4) | ||||||||||||||||||||||||||||||
FINANCIAL RATIOS (d) | ||||||||||||||||||||||||||||||||||||||||
Return on common equity (“ROE”) | 8% | 9% | 12% | 13% | 11% | 11% | 10% | |||||||||||||||||||||||||||||||||
Return on tangible common equity (“ROTCE”) (e) | 11 | 13 | 17 | 18 | 16 | 15 | 15 | |||||||||||||||||||||||||||||||||
Return on assets (“ROA”) | 0.65 | 0.76 | 0.99 | 1.07 | 0.92 | 0.86 | 0.85 | |||||||||||||||||||||||||||||||||
CAPITAL RATIOS | ||||||||||||||||||||||||||||||||||||||||
Tier 1 capital ratio | 12.3(g) | 12.1 | 12.4 | 12.3 | 12.1 | |||||||||||||||||||||||||||||||||||
Total capital ratio | 15.4(g) | 15.3 | 15.7 | 15.6 | 15.5 | |||||||||||||||||||||||||||||||||||
Tier 1 common capital ratio (f) | 10.0(g) | 9.9 | 10.1 | 10.0 | 9.8 |
(a) | For further discussion of managed basis, see Reconciliation from Reported to Managed Summary on page 7. |
(b) | On March 18, 2011, the Board of Directors increased the Firm’s quarterly common stock dividend from $0.05 to $0.25 per share. |
(c) | Share prices shown for JPMorgan Chase’s common stock are from the New York Stock Exchange. JPMorgan Chase’s common stock is also listed and traded on the London Stock Exchange and the Tokyo Stock Exchange. |
(d) | Quarterly ratios are based upon annualized amounts. |
(e) | ROTCE, a non-GAAP financial ratio, measures the Firm’s earnings as a percentage of tangible common equity. In management’s view, this measure is meaningful to the Firm, as well as analysts and investors in assessing the Firm’s use of equity and in facilitating comparisons with competitors. For further discussion, see page 45. |
(f) | Tier 1 common capital ratio is Tier 1 common capital divided by risk-weighted assets. The Firm uses Tier 1 common capital along with the other capital measures to assess and monitor its capital position. For further discussion of Tier 1 common capital ratio, see page 45. |
(g) | Estimated. |
Page 2
JPMORGAN CHASE & CO. CONSOLIDATED FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio and headcount data) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (Period-end) | ||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 2,265,792 | $ | 2,289,240 | $ | 2,246,764 | $ | 2,198,161 | $ | 2,117,605 | (1 | )% | 7 | % | $ | 2,265,792 | $ | 2,117,605 | 7 | % | ||||||||||||||||||||
Wholesale loans | 283,016 | 259,483 | 248,823 | 236,007 | 227,633 | 9 | 24 | 283,016 | 227,633 | 24 | ||||||||||||||||||||||||||||||
Consumer, excluding credit card loans | 308,427 | 310,235 | 315,390 | 321,186 | 327,618 | (1 | ) | (6 | ) | 308,427 | 327,618 | (6 | ) | |||||||||||||||||||||||||||
Credit card loans | 132,277 | 127,135 | 125,523 | 128,803 | 137,676 | 4 | (4 | ) | 132,277 | 137,676 | (4 | ) | ||||||||||||||||||||||||||||
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Total Loans | 723,720 | 696,853 | 689,736 | 685,996 | 692,927 | 4 | 4 | 723,720 | 692,927 | 4 | ||||||||||||||||||||||||||||||
Deposits | 1,127,806 | 1,092,708 | 1,048,685 | 995,829 | 930,369 | 3 | 21 | 1,127,806 | 930,369 | 21 | ||||||||||||||||||||||||||||||
Common stockholders’ equity | 175,773 | 174,487 | 175,079 | 172,798 | 168,306 | 1 | 4 | 175,773 | 168,306 | 4 | ||||||||||||||||||||||||||||||
Total stockholders’ equity | 183,573 | 182,287 | 182,879 | 180,598 | 176,106 | 1 | 4 | 183,573 | 176,106 | 4 | ||||||||||||||||||||||||||||||
Deposits-to-loans ratio | 156 | % | 157 | % | 152 | % | 145 | % | 134 | % | 156 | % | 134 | % | ||||||||||||||||||||||||||
Headcount | 260,157 | 256,663 | 250,095 | 242,929 | 239,831 | 1 | 8 | 260,157 | 239,831 | 8 | ||||||||||||||||||||||||||||||
LINE OF BUSINESS NET INCOME/(LOSS) | ||||||||||||||||||||||||||||||||||||||||
Investment Bank | $ | 726 | $ | 1,636 | $ | 2,057 | $ | 2,370 | $ | 1,501 | (56 | ) | (52 | ) | $ | 6,789 | $ | 6,639 | 2 | |||||||||||||||||||||
Retail Financial Services | 533 | 1,161 | 383 | (399 | ) | 459 | (54 | ) | 16 | 1,678 | 1,728 | (3 | ) | |||||||||||||||||||||||||||
Card Services & Auto | 1,051 | 849 | 1,110 | 1,534 | 1,548 | 24 | (32 | ) | 4,544 | 2,872 | 58 | |||||||||||||||||||||||||||||
Commercial Banking | 643 | 571 | 607 | 546 | 530 | 13 | 21 | 2,367 | 2,084 | 14 | ||||||||||||||||||||||||||||||
Treasury & Securities Services | 250 | 305 | 333 | 316 | 257 | (18 | ) | (3 | ) | 1,204 | 1,079 | 12 | ||||||||||||||||||||||||||||
Asset Management | 302 | 385 | 439 | 466 | 507 | (22 | ) | (40 | ) | 1,592 | 1,710 | (7 | ) | |||||||||||||||||||||||||||
Corporate/Private Equity | 223 | (645 | ) | 502 | 722 | 29 | NM | NM | 802 | 1,258 | (36 | ) | ||||||||||||||||||||||||||||
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NET INCOME | $ | 3,728 | $ | 4,262 | $ | 5,431 | $ | 5,555 | $ | 4,831 | (13 | ) | (23 | ) | $ | 18,976 | $ | 17,370 | 9 | |||||||||||||||||||||
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Page 3
JPMORGAN CHASE & CO. STATEMENTS OF INCOME (in millions, except per share and ratio data) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||||||||||||||
Investment banking fees | $ | 1,133 | $ | 1,052 | $ | 1,933 | $ | 1,793 | $ | 1,832 | 8 | % | (38 | )% | $ | 5,911 | $ | 6,190 | (5 | )% | ||||||||||||||||||||
Principal transactions | 750 | 1,370 | 3,140 | 4,745 | 1,915 | (45 | ) | (61 | ) | 10,005 | 10,894 | (8 | ) | |||||||||||||||||||||||||||
Lending- and deposit-related fees | 1,620 | 1,643 | 1,649 | 1,546 | 1,545 | (1 | ) | 5 | 6,458 | 6,340 | 2 | |||||||||||||||||||||||||||||
Asset management, administration and commissions | 3,337 | 3,448 | 3,703 | 3,606 | 3,697 | (3 | ) | (10 | ) | 14,094 | 13,499 | 4 | ||||||||||||||||||||||||||||
Securities gains | 47 | 607 | 837 | 102 | 1,253 | (92 | ) | (96 | ) | 1,593 | 2,965 | (46 | ) | |||||||||||||||||||||||||||
Mortgage fees and related income | 725 | 1,380 | 1,103 | (487 | ) | 1,617 | (47 | ) | (55 | ) | 2,721 | 3,870 | (30 | ) | ||||||||||||||||||||||||||
Credit card income | 1,359 | 1,666 | 1,696 | 1,437 | 1,558 | (18 | ) | (13 | ) | 6,158 | 5,891 | 5 | ||||||||||||||||||||||||||||
Other income | 369 | 780 | 882 | 574 | 579 | (53 | ) | (36 | ) | 2,605 | 2,044 | 27 | ||||||||||||||||||||||||||||
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Noninterest revenue | 9,340 | 11,946 | 14,943 | 13,316 | 13,996 | (22 | ) | (33 | ) | 49,545 | 51,693 | (4 | ) | |||||||||||||||||||||||||||
Interest income | 15,054 | 15,160 | 15,632 | 15,447 | 15,612 | (1 | ) | (4 | ) | 61,293 | 63,782 | (4 | ) | |||||||||||||||||||||||||||
Interest expense | 2,923 | 3,343 | 3,796 | 3,542 | 3,510 | (13 | ) | (17 | ) | 13,604 | 12,781 | 6 | ||||||||||||||||||||||||||||
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Net interest income | 12,131 | 11,817 | 11,836 | 11,905 | 12,102 | 3 | — | 47,689 | 51,001 | (6 | ) | |||||||||||||||||||||||||||||
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TOTAL NET REVENUE | 21,471 | 23,763 | 26,779 | 25,221 | 26,098 | (10 | ) | (18 | ) | 97,234 | 102,694 | (5 | ) | |||||||||||||||||||||||||||
Provision for credit losses | 2,184 | 2,411 | 1,810 | 1,169 | 3,043 | (9 | ) | (28 | ) | 7,574 | 16,639 | (54 | ) | |||||||||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||||||
Compensation expense | 6,297 | 6,908 | 7,569 | 8,263 | 6,571 | (9 | ) | (4 | ) | 29,037 | 28,124 | 3 | ||||||||||||||||||||||||||||
Occupancy expense | 1,047 | 935 | 935 | 978 | 1,045 | 12 | — | 3,895 | 3,681 | 6 | ||||||||||||||||||||||||||||||
Technology, communications and equipment expense | 1,282 | 1,248 | 1,217 | 1,200 | 1,198 | 3 | 7 | 4,947 | 4,684 | 6 | ||||||||||||||||||||||||||||||
Professional and outside services | 2,021 | 1,860 | 1,866 | 1,735 | 1,789 | 9 | 13 | 7,482 | 6,767 | 11 | ||||||||||||||||||||||||||||||
Marketing | 814 | 926 | 744 | 659 | 584 | (12 | ) | 39 | 3,143 | 2,446 | 28 | |||||||||||||||||||||||||||||
Other expense | 2,872 | 3,445 | 4,299 | 2,943 | 4,616 | (17 | ) | (38 | ) | 13,559 | 14,558 | (7 | ) | |||||||||||||||||||||||||||
Amortization of intangibles | 207 | 212 | 212 | 217 | 240 | (2 | ) | (14 | ) | 848 | 936 | (9 | ) | |||||||||||||||||||||||||||
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TOTAL NONINTEREST EXPENSE | 14,540 | 15,534 | 16,842 | 15,995 | 16,043 | (6 | ) | (9 | ) | 62,911 | 61,196 | 3 | ||||||||||||||||||||||||||||
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Income before income tax expense | 4,747 | 5,818 | 8,127 | 8,057 | 7,012 | (18 | ) | (32 | ) | 26,749 | 24,859 | 8 | ||||||||||||||||||||||||||||
Income tax expense | 1,019 | 1,556 | 2,696 | 2,502 | 2,181 | (35 | ) | (53 | ) | 7,773 | 7,489 | 4 | ||||||||||||||||||||||||||||
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NET INCOME | $ | 3,728 | $ | 4,262 | $ | 5,431 | $ | 5,555 | $ | 4,831 | (13 | ) | (23 | ) | $ | 18,976 | $ | 17,370 | 9 | |||||||||||||||||||||
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PER COMMON SHARE DATA | ||||||||||||||||||||||||||||||||||||||||
Basic earnings | $ | 0.90 | $ | 1.02 | $ | 1.28 | $ | 1.29 | $ | 1.13 | (12 | ) | (20 | ) | $ | 4.50 | $ | 3.98 | 13 | |||||||||||||||||||||
Diluted earnings | 0.90 | 1.02 | 1.27 | 1.28 | 1.12 | (12 | ) | (20 | ) | 4.48 | 3.96 | 13 | ||||||||||||||||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||||||||||||||||||||||
Return on equity (a) | 8 | % | 9 | % | 12 | % | 13 | % | 11 | % | 11 | % | 10 | % | ||||||||||||||||||||||||||
Return on tangible common equity (a)(b) | 11 | 13 | 17 | 18 | 16 | 15 | 15 | |||||||||||||||||||||||||||||||||
Return on assets (a) | 0.65 | 0.76 | 0.99 | 1.07 | 0.92 | 0.86 | 0.85 | |||||||||||||||||||||||||||||||||
Effective income tax rate | 21 | (c) | 27 | (c) | 33 | 31 | 31 | 29 | 30 | |||||||||||||||||||||||||||||||
Overhead ratio | 68 | 65 | 63 | 63 | 61 | 65 | 60 |
(a) | Quarterly ratios are based upon annualized amounts. |
(b) | ROTCE, a non-GAAP financial ratio, measures the Firm’s earnings as a percentage of tangible common equity. In management’s view, this measure is meaningful to the Firm, as well as analysts and investors in assessing the Firm’s use of equity and in facilitating comparisons with competitors. For further discussion, see page 45. |
(c) | Reflects lower reported pretax income and changes in the proportion of income subject to U.S. federal and state and local taxes, as well as tax benefits associated with state and local income taxes. |
Page 4
JPMORGAN CHASE & CO. CONSOLIDATED BALANCE SHEETS (in millions) |
December 31, 2011 Change | ||||||||||||||||||||||||||||
Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | Dec 31, 2010 | Sep 30, 2011 | Dec 31, 2010 | ||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||
Cash and due from banks | $ | 59,602 | $ | 56,766 | $ | 30,466 | $ | 23,469 | $ | 27,567 | 5 | % | 116 | % | ||||||||||||||
Deposits with banks | 85,279 | 128,877 | 169,880 | 80,842 | 21,673 | (34 | ) | 293 | ||||||||||||||||||||
Federal funds sold and securities purchased under resale agreements | 235,314 | 248,042 | 213,362 | 217,356 | 222,554 | (5 | ) | 6 | ||||||||||||||||||||
Securities borrowed | 142,462 | 131,561 | 121,493 | 119,000 | 123,587 | 8 | 15 | |||||||||||||||||||||
Trading assets: | ||||||||||||||||||||||||||||
Debt and equity instruments | 351,486 | 352,678 | 381,339 | 422,404 | 409,411 | — | (14 | ) | ||||||||||||||||||||
Derivative receivables | 92,477 | 108,853 | 77,383 | 78,744 | 80,481 | (15 | ) | 15 | ||||||||||||||||||||
Securities | 364,793 | 339,349 | 324,741 | 334,800 | 316,336 | 7 | 15 | |||||||||||||||||||||
Loans | 723,720 | 696,853 | 689,736 | 685,996 | 692,927 | 4 | 4 | |||||||||||||||||||||
Less: Allowance for loan losses | 27,609 | 28,350 | 28,520 | 29,750 | 32,266 | (3 | ) | (14 | ) | |||||||||||||||||||
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Loans, net of allowance for loan losses | 696,111 | 668,503 | 661,216 | 656,246 | �� | 660,661 | 4 | 5 | ||||||||||||||||||||
Accrued interest and accounts receivable | 61,478 | 72,080 | 80,292 | 79,236 | 70,147 | (15 | ) | (12 | ) | |||||||||||||||||||
Premises and equipment | 14,041 | 13,812 | 13,679 | 13,422 | 13,355 | 2 | 5 | |||||||||||||||||||||
Goodwill | 48,188 | 48,180 | 48,882 | 48,856 | 48,854 | — | (1 | ) | ||||||||||||||||||||
Mortgage servicing rights | 7,223 | 7,833 | 12,243 | 13,093 | 13,649 | (8 | ) | (47 | ) | |||||||||||||||||||
Other intangible assets | 3,207 | 3,396 | 3,679 | 3,857 | 4,039 | (6 | ) | (21 | ) | |||||||||||||||||||
Other assets | 104,131 | 109,310 | 108,109 | 106,836 | 105,291 | (5 | ) | (1 | ) | |||||||||||||||||||
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TOTAL ASSETS | $ | 2,265,792 | $ | 2,289,240 | $ | 2,246,764 | $ | 2,198,161 | $ | 2,117,605 | (1 | ) | 7 | |||||||||||||||
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LIABILITIES | ||||||||||||||||||||||||||||
Deposits | $ | 1,127,806 | $ | 1,092,708 | $ | 1,048,685 | $ | 995,829 | $ | 930,369 | 3 | 21 | ||||||||||||||||
Federal funds purchased and securities loaned or sold under repurchase agreements | 213,532 | 238,585 | 254,124 | 285,444 | 276,644 | (11 | ) | (23 | ) | |||||||||||||||||||
Commercial paper | 51,631 | 51,073 | 51,160 | 46,022 | 35,363 | 1 | 46 | |||||||||||||||||||||
Other borrowed funds (a) | 21,908 | 29,318 | 30,208 | 36,704 | 34,325 | (25 | ) | (36 | ) | |||||||||||||||||||
Trading liabilities: | ||||||||||||||||||||||||||||
Debt and equity instruments | 66,718 | 76,592 | 84,865 | 80,031 | 76,947 | (13 | ) | (13 | ) | |||||||||||||||||||
Derivative payables | 74,977 | 79,249 | 63,668 | 61,362 | 69,219 | (5 | ) | 8 | ||||||||||||||||||||
Accounts payable and other liabilities | 202,895 | 199,769 | 184,490 | 171,638 | 170,330 | 2 | 19 | |||||||||||||||||||||
Beneficial interests issued by consolidated VIEs | 65,977 | 65,971 | 67,457 | 70,917 | 77,649 | — | (15 | ) | ||||||||||||||||||||
Long-term debt (a) | 256,775 | 273,688 | 279,228 | 269,616 | 270,653 | (6 | ) | (5 | ) | |||||||||||||||||||
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TOTAL LIABILITIES | 2,082,219 | 2,106,953 | 2,063,885 | 2,017,563 | 1,941,499 | (1 | ) | 7 | ||||||||||||||||||||
STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||||||
Preferred stock | 7,800 | 7,800 | 7,800 | 7,800 | 7,800 | — | — | |||||||||||||||||||||
Common stock | 4,105 | 4,105 | 4,105 | 4,105 | 4,105 | — | — | |||||||||||||||||||||
Capital surplus | 95,602 | 95,078 | 95,061 | 94,660 | 97,415 | 1 | (2 | ) | ||||||||||||||||||||
Retained earnings | 88,315 | 85,726 | 82,612 | 78,342 | 73,998 | 3 | 19 | |||||||||||||||||||||
Accumulated other comprehensive income | 944 | 1,964 | 1,638 | 712 | 1,001 | (52 | ) | (6 | ) | |||||||||||||||||||
Shares held in RSU Trust, at cost | (38 | ) | (53 | ) | (53 | ) | (53 | ) | (53 | ) | 28 | 28 | ||||||||||||||||
Treasury stock, at cost | (13,155 | ) | (12,333 | ) | (8,284 | ) | (4,968 | ) | (8,160 | ) | (7 | ) | (61 | ) | ||||||||||||||
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TOTAL STOCKHOLDERS’ EQUITY | 183,573 | 182,287 | 182,879 | 180,598 | 176,106 | 1 | 4 | |||||||||||||||||||||
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 2,265,792 | $ | 2,289,240 | $ | 2,246,764 | $ | 2,198,161 | $ | 2,117,605 | (1 | ) | 7 | |||||||||||||||
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(a) | Effective January 1, 2011, the long-term portion of advances from Federal Home Loan Banks (“FHLBs”) was reclassified from other borrowed funds to long-term debt. Prior periods have been revised to conform with the current presentation. |
Page 5
JPMORGAN CHASE & CO. CONDENSED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS (in millions, except rates) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
AVERAGE BALANCES | ||||||||||||||||||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||||||||||||
Deposits with banks | $ | 89,145 | $ | 116,062 | $ | 75,801 | $ | 37,155 | $ | 29,213 | (23 | )% | 205 | % | $ | 79,783 | $ | 47,611 | 68 | % | ||||||||||||||||||||
Federal funds sold and securities purchased under resale agreements | 230,494 | 211,884 | 202,036 | 202,481 | 201,489 | 9 | 14 | 211,800 | 188,394 | 12 | ||||||||||||||||||||||||||||||
Securities borrowed | 143,745 | 131,615 | 124,806 | 114,589 | 119,973 | 9 | 20 | 128,777 | 117,416 | 10 | ||||||||||||||||||||||||||||||
Trading assets — debt instruments | 241,645 | 257,950 | 285,104 | 275,512 | 273,929 | (6 | ) | (12 | ) | 264,941 | 254,898 | 4 | ||||||||||||||||||||||||||||
Securities | 358,698 | 331,330 | 342,248 | 318,936 | 328,126 | 8 | 9 | 337,894 | 330,166 | 2 | ||||||||||||||||||||||||||||||
Loans | 706,856 | 692,794 | 686,111 | 688,133 | 690,529 | 2 | 2 | 693,523 | 703,540 | (1 | ) | |||||||||||||||||||||||||||||
Other assets (a) | 37,343 | 42,760 | 48,716 | 49,887 | 42,583 | (13 | ) | (12 | ) | 44,637 | 35,496 | 26 | ||||||||||||||||||||||||||||
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Total interest-earning assets | 1,807,926 | 1,784,395 | 1,764,822 | 1,686,693 | 1,685,842 | 1 | 7 | 1,761,355 | 1,677,521 | 5 | ||||||||||||||||||||||||||||||
Trading assets — equity instruments | 116,720 | 119,890 | 137,611 | 141,951 | 122,827 | (3 | ) | (5 | ) | 128,949 | 99,543 | 30 | ||||||||||||||||||||||||||||
Trading assets — derivative receivables | 94,925 | 96,612 | 82,860 | 85,437 | 87,569 | (2 | ) | 8 | 90,003 | 84,676 | 6 | |||||||||||||||||||||||||||||
All other noninterest-earning assets | 243,578 | 229,650 | 207,250 | 190,371 | 192,906 | 6 | 26 | 217,891 | 191,511 | 14 | ||||||||||||||||||||||||||||||
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TOTAL ASSETS | $ | 2,263,149 | $ | 2,230,547 | $ | 2,192,543 | $ | 2,104,452 | $ | 2,089,144 | 1 | 8 | $ | 2,198,198 | $ | 2,053,251 | 7 | |||||||||||||||||||||||
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LIABILITIES | ||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits | $ | 759,422 | $ | 740,901 | $ | 732,766 | $ | 700,921 | $ | 669,346 | 2 | 13 | $ | 733,683 | $ | 668,640 | 10 | |||||||||||||||||||||||
Federal funds purchased and securities loaned or sold under repurchase agreements | 230,355 | 235,438 | 281,843 | 278,250 | 287,493 | (2 | ) | (20 | ) | 256,283 | 278,603 | (8 | ) | |||||||||||||||||||||||||||
Commercial paper | 44,930 | 47,027 | 41,682 | 36,838 | 34,507 | (4 | ) | 30 | 42,653 | 36,000 | 18 | |||||||||||||||||||||||||||||
Trading liabilities — debt, short-term and other liabilities (b)(c) | 204,161 | 215,064 | 212,878 | 193,814 | 196,840 | (5 | ) | 4 | 206,531 | 186,059 | 11 | |||||||||||||||||||||||||||||
Beneficial interests issued by consolidated VIEs | 65,322 | 66,545 | 69,399 | 72,932 | 78,114 | (2 | ) | (16 | ) | 68,523 | 87,493 | (22 | ) | |||||||||||||||||||||||||||
Long-term debt (c) | 269,542 | 279,235 | 273,934 | 269,156 | 273,066 | (3 | ) | (1 | ) | 272,985 | 273,074 | — | ||||||||||||||||||||||||||||
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Total interest-bearing liabilities | 1,573,732 | 1,584,210 | 1,612,502 | 1,551,911 | 1,539,366 | (1 | ) | 2 | 1,580,658 | 1,529,869 | 3 | |||||||||||||||||||||||||||||
Noninterest-bearing deposits | 337,618 | 297,610 | 247,137 | 229,461 | 225,966 | 13 | 49 | 278,307 | 212,414 | 31 | ||||||||||||||||||||||||||||||
Trading liabilities — equity instruments | 8,188 | 1,948 | 3,289 | 7,872 | 7,166 | 320 | 14 | 5,316 | 6,172 | (14 | ) | |||||||||||||||||||||||||||||
Trading liabilities — derivative payables | 72,965 | 75,828 | 66,009 | 71,288 | 71,727 | (4 | ) | 2 | 71,539 | 65,714 | 9 | |||||||||||||||||||||||||||||
All other noninterest-bearing liabilities | 87,804 | 88,697 | 81,729 | 66,705 | 70,307 | (1 | ) | 25 | 81,312 | 69,539 | 17 | |||||||||||||||||||||||||||||
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TOTAL LIABILITIES | 2,080,307 | 2,048,293 | 2,010,666 | 1,927,237 | 1,914,532 | 2 | 9 | 2,017,132 | 1,883,708 | 7 | ||||||||||||||||||||||||||||||
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Preferred stock | 7,800 | 7,800 | 7,800 | 7,800 | 7,800 | — | — | 7,800 | 8,023 | (3 | ) | |||||||||||||||||||||||||||||
Common stockholders’ equity | 175,042 | 174,454 | 174,077 | 169,415 | 166,812 | — | 5 | 173,266 | 161,520 | 7 | ||||||||||||||||||||||||||||||
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TOTAL STOCKHOLDERS’ EQUITY | 182,842 | 182,254 | 181,877 | 177,215 | 174,612 | — | 5 | 181,066 | 169,543 | 7 | ||||||||||||||||||||||||||||||
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 2,263,149 | $ | 2,230,547 | $ | 2,192,543 | $ | 2,104,452 | $ | 2,089,144 | 1 | 8 | $ | 2,198,198 | $ | 2,053,251 | 7 | |||||||||||||||||||||||
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AVERAGE RATES | ||||||||||||||||||||||||||||||||||||||||
INTEREST-EARNING ASSETS | ||||||||||||||||||||||||||||||||||||||||
Deposits with banks | 0.75 | % | 0.63 | % | 0.76 | % | 1.11 | % | 1.02 | % | 0.75 | % | 0.72 | % | ||||||||||||||||||||||||||
Federal funds sold and securities purchased under resale agreements | 1.19 | 1.28 | 1.20 | 1.09 | 1.05 | 1.19 | 0.95 | |||||||||||||||||||||||||||||||||
Securities borrowed | 0.04 | 0.05 | 0.10 | 0.17 | 0.16 | 0.09 | 0.15 | |||||||||||||||||||||||||||||||||
Trading assets — debt instruments | 4.22 | 4.32 | 4.23 | 4.31 | 4.29 | 4.27 | 4.37 | |||||||||||||||||||||||||||||||||
Securities | 2.57 | 2.66 | 3.10 | 2.89 | 2.44 | 2.80 | 2.95 | |||||||||||||||||||||||||||||||||
Loans | 5.22 | 5.28 | 5.36 | 5.62 | 5.71 | 5.37 | 5.75 | |||||||||||||||||||||||||||||||||
Other assets (a) | 1.51 | 1.47 | 1.30 | 1.20 | 1.54 | 1.36 | 1.52 | |||||||||||||||||||||||||||||||||
Total interest-earning assets | 3.34 | 3.40 | 3.58 | 3.74 | 3.70 | 3.51 | 3.83 | |||||||||||||||||||||||||||||||||
INTEREST-BEARING LIABILITIES | ||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits | 0.43 | 0.53 | 0.61 | 0.53 | 0.50 | 0.53 | 0.51 | |||||||||||||||||||||||||||||||||
Federal funds purchased and securities loaned or sold under repurchase agreements | 0.18 | 0.18 | 0.29 | 0.17 | 0.12 | 0.21 | (0.07 | )(d) | ||||||||||||||||||||||||||||||||
Commercial paper | 0.13 | 0.16 | 0.19 | 0.21 | 0.21 | 0.17 | 0.20 | |||||||||||||||||||||||||||||||||
Trading liabilities — debt, short-term and other liabilities (b)(c) | 0.67 | 1.05 | 1.26 | 1.43 | 1.57 | 1.10 | 1.34 | |||||||||||||||||||||||||||||||||
Beneficial interests issued by consolidated VIEs | 1.06 | 1.05 | 1.17 | 1.19 | 1.13 | 1.12 | 1.31 | |||||||||||||||||||||||||||||||||
Long-term debt (c) | 2.15 | 2.10 | 2.31 | 2.39 | 2.25 | 2.24 | 2.14 | |||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 0.74 | 0.84 | 0.94 | 0.93 | 0.90 | 0.86 | 0.84 | |||||||||||||||||||||||||||||||||
INTEREST RATE SPREAD | 2.60 | % | 2.56 | % | 2.64 | % | 2.81 | % | 2.80 | % | 2.65 | % | 2.99 | % | ||||||||||||||||||||||||||
NET YIELD ON INTEREST-EARNING ASSETS | 2.70 | % | 2.66 | % | 2.72 | % | 2.89 | % | 2.88 | % | 2.74 | % | 3.06 | % |
(a) | Includes margin loans. |
(b) | Includes brokerage customer payables. |
(c) | Effective January 1, 2011, the long-term portion of advances from FHLBs was reclassified from other borrowed funds, which is included in short-term and other liabilities, to long-term debt. Prior periods have been revised to conform with the current presentation. |
(d) | Reflects a benefit from the favorable market environments for dollar-roll financings. |
Page 6
JPMORGAN CHASE & CO. RECONCILIATION FROM REPORTED TO MANAGED SUMMARY (in millions) |
The Firm prepares its Consolidated Financial Statements using accounting principles generally accepted in the U.S. (“U.S. GAAP”). That presentation, which is referred to as “reported” basis, provides the reader with an understanding of the Firm’s results that can be tracked consistently from year to year and enables a comparison of the Firm’s performance with other companies’ U.S. GAAP financial statements. In addition to analyzing the Firm’s results on a reported basis, management reviews the Firm’s results and the results of the lines of business on a “managed” basis, which is a non-GAAP financial measure. For additional information on managed basis, refer to the notes on Non-GAAP Financial Measures on page 45.
The following summary table provides a reconciliation from the Firm’s reported U.S. GAAP results to managed basis.
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
OTHER INCOME | ||||||||||||||||||||||||||||||||||||||||
Other income — reported | $ | 369 | $ | 780 | $ | 882 | $ | 574 | $ | 579 | (53 | )% | (36 | )% | $ | 2,605 | $ | 2,044 | 27 | % | ||||||||||||||||||||
Fully taxable-equivalent adjustments | 570 | 472 | 510 | 451 | 503 | 21 | 13 | 2,003 | 1,745 | 15 | ||||||||||||||||||||||||||||||
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Other income — managed | $ | 939 | $ | 1,252 | $ | 1,392 | $ | 1,025 | $ | 1,082 | (25 | ) | (13 | ) | $ | 4,608 | $ | 3,789 | 22 | |||||||||||||||||||||
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TOTAL NONINTEREST REVENUE | ||||||||||||||||||||||||||||||||||||||||
Total noninterest revenue — reported | $ | 9,340 | $ | 11,946 | $ | 14,943 | $ | 13,316 | $ | 13,996 | (22 | ) | (33 | ) | $ | 49,545 | $ | 51,693 | (4 | ) | ||||||||||||||||||||
Fully taxable-equivalent adjustments | 570 | 472 | 510 | 451 | 503 | 21 | 13 | 2,003 | 1,745 | 15 | ||||||||||||||||||||||||||||||
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Total noninterest revenue — managed | $ | 9,910 | $ | 12,418 | $ | 15,453 | $ | 13,767 | $ | 14,499 | (20 | ) | (32 | ) | $ | 51,548 | $ | 53,438 | (4 | ) | ||||||||||||||||||||
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NET INTEREST INCOME | ||||||||||||||||||||||||||||||||||||||||
Net interest income — reported | $ | 12,131 | $ | 11,817 | $ | 11,836 | $ | 11,905 | $ | 12,102 | 3 | — | $ | 47,689 | $ | 51,001 | (6 | ) | ||||||||||||||||||||||
Fully taxable-equivalent adjustments | 157 | 133 | 121 | 119 | 121 | 18 | 30 | 530 | 403 | 32 | ||||||||||||||||||||||||||||||
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Net interest income — managed | $ | 12,288 | $ | 11,950 | $ | 11,957 | $ | 12,024 | $ | 12,223 | 3 | 1 | $ | 48,219 | $ | 51,404 | (6 | ) | ||||||||||||||||||||||
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TOTAL NET REVENUE | ||||||||||||||||||||||||||||||||||||||||
Total net revenue — reported | $ | 21,471 | �� | $ | 23,763 | $ | 26,779 | $ | 25,221 | $ | 26,098 | (10 | ) | (18 | ) | $ | 97,234 | $ | 102,694 | (5 | ) | |||||||||||||||||||
Fully taxable-equivalent adjustments | 727 | 605 | 631 | 570 | 624 | 20 | 17 | 2,533 | 2,148 | 18 | ||||||||||||||||||||||||||||||
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Total net revenue — managed | $ | 22,198 | $ | 24,368 | $ | 27,410 | $ | 25,791 | $ | 26,722 | (9 | ) | (17 | ) | $ | 99,767 | $ | 104,842 | (5 | ) | ||||||||||||||||||||
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PRE-PROVISION PROFIT | ||||||||||||||||||||||||||||||||||||||||
Total pre-provision profit — reported | $ | 6,931 | $ | 8,229 | $ | 9,937 | $ | 9,226 | $ | 10,055 | (16 | ) | (31 | ) | $ | 34,323 | $ | 41,498 | (17 | ) | ||||||||||||||||||||
Fully taxable-equivalent adjustments | 727 | 605 | 631 | 570 | 624 | 20 | 17 | 2,533 | 2,148 | 18 | ||||||||||||||||||||||||||||||
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Total pre-provision profit — managed | $ | 7,658 | $ | 8,834 | $ | 10,568 | $ | 9,796 | $ | 10,679 | (13 | ) | (28 | ) | $ | 36,856 | $ | 43,646 | (16 | ) | ||||||||||||||||||||
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INCOME TAX EXPENSE | ||||||||||||||||||||||||||||||||||||||||
Income tax expense — reported | $ | 1,019 | $ | 1,556 | $ | 2,696 | $ | 2,502 | $ | 2,181 | (35 | ) | (53 | ) | $ | 7,773 | $ | 7,489 | 4 | |||||||||||||||||||||
Fully taxable-equivalent adjustments | 727 | 605 | 631 | 570 | 624 | 20 | 17 | 2,533 | 2,148 | 18 | ||||||||||||||||||||||||||||||
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Income tax expense — managed | $ | 1,746 | $ | 2,161 | $ | 3,327 | $ | 3,072 | $ | 2,805 | (19 | ) | (38 | ) | $ | 10,306 | $ | 9,637 | 7 | |||||||||||||||||||||
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Page 7
JPMORGAN CHASE & CO. LINE OF BUSINESS FINANCIAL HIGHLIGHTS — MANAGED BASIS (a) (in millions, except ratio data) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
TOTAL NET REVENUE (FTE) | ||||||||||||||||||||||||||||||||||||||||
Investment Bank (b) | $ | 4,358 | $ | 6,369 | $ | 7,314 | $ | 8,233 | $ | 6,213 | (32 | )% | (30 | )% | $ | 26,274 | $ | 26,217 | — | % | ||||||||||||||||||||
Retail Financial Services | 6,395 | 7,535 | 7,142 | 5,466 | 7,699 | (15 | ) | (17 | ) | 26,538 | 28,447 | (7 | ) | |||||||||||||||||||||||||||
Card Services & Auto | 4,814 | 4,775 | 4,761 | 4,791 | 5,072 | 1 | (5 | ) | 19,141 | 20,472 | (7 | ) | ||||||||||||||||||||||||||||
Commercial Banking | 1,687 | 1,588 | 1,627 | 1,516 | 1,611 | 6 | 5 | 6,418 | 6,040 | 6 | ||||||||||||||||||||||||||||||
Treasury & Securities Services | 2,022 | 1,908 | 1,932 | 1,840 | 1,913 | 6 | 6 | 7,702 | 7,381 | 4 | ||||||||||||||||||||||||||||||
Asset Management | 2,284 | 2,316 | 2,537 | 2,406 | 2,613 | (1 | ) | (13 | ) | 9,543 | 8,984 | 6 | ||||||||||||||||||||||||||||
Corporate/Private Equity (b) | 638 | (123 | ) | 2,097 | 1,539 | 1,601 | NM | (60 | ) | 4,151 | 7,301 | (43 | ) | |||||||||||||||||||||||||||
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TOTAL NET REVENUE | $ | 22,198 | $ | 24,368 | $ | 27,410 | $ | 25,791 | $ | 26,722 | (9 | ) | (17 | ) | $ | 99,767 | $ | 104,842 | (5 | ) | ||||||||||||||||||||
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TOTAL PRE-PROVISION PROFIT | ||||||||||||||||||||||||||||||||||||||||
Investment Bank (b) | $ | 1,389 | $ | 2,570 | $ | 2,982 | $ | 3,217 | $ | 2,012 | (46 | ) | (31 | ) | $ | 10,158 | $ | 8,952 | 13 | |||||||||||||||||||||
Retail Financial Services | 1,673 | 2,970 | 1,871 | 566 | 3,228 | (44 | ) | (48 | ) | 7,080 | 11,964 | (41 | ) | |||||||||||||||||||||||||||
Card Services & Auto | 2,789 | 2,660 | 2,773 | 2,874 | 3,205 | 5 | (13 | ) | 11,096 | 13,294 | (17 | ) | ||||||||||||||||||||||||||||
Commercial Banking | 1,108 | 1,015 | 1,064 | 953 | 1,053 | 9 | 5 | 4,140 | 3,841 | 8 | ||||||||||||||||||||||||||||||
Treasury & Securities Services | 459 | 438 | 479 | 463 | 443 | 5 | 4 | 1,839 | 1,777 | 3 | ||||||||||||||||||||||||||||||
Asset Management | 532 | 520 | 743 | 746 | 836 | 2 | (36 | ) | 2,541 | 2,872 | (12 | ) | ||||||||||||||||||||||||||||
Corporate/Private Equity (b) | (292 | ) | (1,339 | ) | 656 | 977 | (98 | ) | 78 | (198 | ) | 2 | 946 | (100 | ) | |||||||||||||||||||||||||
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TOTAL PRE-PROVISION PROFIT | $ | 7,658 | $ | 8,834 | $ | 10,568 | $ | 9,796 | $ | 10,679 | (13 | ) | (28 | ) | $ | 36,856 | $ | 43,646 | (16 | ) | ||||||||||||||||||||
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NET INCOME/(LOSS) | ||||||||||||||||||||||||||||||||||||||||
Investment Bank | $ | 726 | $ | 1,636 | $ | 2,057 | $ | 2,370 | $ | 1,501 | (56 | ) | (52 | ) | $ | 6,789 | $ | 6,639 | 2 | |||||||||||||||||||||
Retail Financial Services | 533 | 1,161 | 383 | (399 | ) | 459 | (54 | ) | 16 | 1,678 | 1,728 | (3 | ) | |||||||||||||||||||||||||||
Card Services & Auto | 1,051 | 849 | 1,110 | 1,534 | 1,548 | 24 | (32 | ) | 4,544 | 2,872 | 58 | |||||||||||||||||||||||||||||
Commercial Banking | 643 | 571 | 607 | 546 | 530 | 13 | 21 | 2,367 | 2,084 | 14 | ||||||||||||||||||||||||||||||
Treasury & Securities Services | 250 | 305 | 333 | 316 | 257 | (18 | ) | (3 | ) | 1,204 | 1,079 | 12 | ||||||||||||||||||||||||||||
Asset Management | 302 | 385 | 439 | 466 | 507 | (22 | ) | (40 | ) | 1,592 | 1,710 | (7 | ) | |||||||||||||||||||||||||||
Corporate/Private Equity | 223 | (645 | ) | 502 | 722 | 29 | NM | NM | 802 | 1,258 | (36 | ) | ||||||||||||||||||||||||||||
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TOTAL NET INCOME | $ | 3,728 | $ | 4,262 | $ | 5,431 | $ | 5,555 | $ | 4,831 | (13 | ) | (23 | ) | $ | 18,976 | $ | 17,370 | 9 | |||||||||||||||||||||
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AVERAGE EQUITY (c) | ||||||||||||||||||||||||||||||||||||||||
Investment Bank | $ | 40,000 | $ | 40,000 | $ | 40,000 | $ | 40,000 | $ | 40,000 | — | — | $ | 40,000 | $ | 40,000 | — | |||||||||||||||||||||||
Retail Financial Services | 25,000 | 25,000 | 25,000 | 25,000 | 24,600 | — | 2 | 25,000 | 24,600 | 2 | ||||||||||||||||||||||||||||||
Card Services & Auto | 16,000 | 16,000 | 16,000 | 16,000 | 18,400 | — | (13 | ) | 16,000 | 18,400 | (13 | ) | ||||||||||||||||||||||||||||
Commercial Banking | 8,000 | 8,000 | 8,000 | 8,000 | 8,000 | — | — | 8,000 | 8,000 | — | ||||||||||||||||||||||||||||||
Treasury & Securities Services | 7,000 | 7,000 | 7,000 | 7,000 | 6,500 | — | 8 | 7,000 | 6,500 | 8 | ||||||||||||||||||||||||||||||
Asset Management | 6,500 | 6,500 | 6,500 | 6,500 | 6,500 | — | — | 6,500 | 6,500 | — | ||||||||||||||||||||||||||||||
Corporate/Private Equity | 72,542 | 71,954 | 71,577 | 66,915 | 62,812 | 1 | 15 | 70,766 | 57,520 | 23 | ||||||||||||||||||||||||||||||
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TOTAL AVERAGE EQUITY | $ | 175,042 | $ | 174,454 | $ | 174,077 | $ | 169,415 | $ | 166,812 | — | 5 | $ | 173,266 | $ | 161,520 | 7 | |||||||||||||||||||||||
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RETURN ON EQUITY (c) | ||||||||||||||||||||||||||||||||||||||||
Investment Bank | 7 | % | 16 | % | 21 | % | 24 | % | 15 | % | 17 | % | 17 | % | ||||||||||||||||||||||||||
Retail Financial Services | 8 | 18 | 6 | (6 | ) | 7 | 7 | 7 | ||||||||||||||||||||||||||||||||
Card Services & Auto | 26 | 21 | 28 | 39 | 33 | 28 | 16 | |||||||||||||||||||||||||||||||||
Commercial Banking | 32 | 28 | 30 | 28 | 26 | 30 | 26 | |||||||||||||||||||||||||||||||||
Treasury & Securities Services | 14 | 17 | 19 | 18 | 16 | 17 | 17 | |||||||||||||||||||||||||||||||||
Asset Management | 18 | 24 | 27 | 29 | 31 | 25 | 26 | |||||||||||||||||||||||||||||||||
JPMORGAN CHASE | 8 | 9 | 12 | 13 | 11 | 11 | 10 |
(a) | Commencing July 1, 2011, the Firm’s business segments have been reorganized as follows: (1) Auto and Student Lending transferred from the Retail Financial Services (“RFS”) segment and are reported with Card Services & Auto (“Card”) in a single segment, and (2) RFS continues as a segment, organized in two components: Consumer & Business Banking (formerly Retail Banking) and Mortgage Banking (including Mortgage Production and Servicing, and Real Estate Portfolios). The business segment information associated with RFS and Card has been revised to reflect the business reorganization retroactive to January 1, 2010. |
(b) | Corporate/Private Equity includes an adjustment to offset Investment Bank’s (“IB”) inclusion of a credit allocation income/(expense) to Treasury & Securities Services (“TSS”) in total net revenue; TSS reports the credit allocation as a separate line on its income statement (not within total net revenue). |
(c) | Equity for a line of business represents the amount the Firm believes the business would require if it were operating independently, incorporating sufficient capital to address regulatory capital requirements (including Basel III Tier 1 common capital requirements), economic risk measures, and capital levels for similarly rated peers. Capital is also allocated to each line of business for, among other things, goodwill and other intangibles associated with acquisitions effected by the line of business. ROE is measured and internal targets for expected returns are established as key measures of a business segment’s performance. Effective January 1, 2011, capital allocated to Card was reduced by $2.4 billion, to $16.0 billion, largely reflecting portfolio runoff and the improving risk profile of the business; capital allocated to TSS was increased by $500 million, to $7.0 billion, reflecting growth in the underlying business. The Firm continues to assess the level of capital required for each line of business, as well as the assumptions and methodologies used to allocate capital to the business segments, and further refinements may be implemented in future periods. |
Page 8
JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS (in millions, except ratio data) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
INCOME STATEMENT | ||||||||||||||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||||||||||||||
Investment banking fees | $ | 1,119 | $ | 1,039 | $ | 1,922 | $ | 1,779 | $ | 1,833 | 8 | % | (39 | )% | $ | 5,859 | $ | 6,186 | (5 | )% | ||||||||||||||||||||
Principal transactions (a) | 364 | 2,253 | 2,309 | 3,398 | 1,289 | (84 | ) | (72 | ) | 8,324 | 8,454 | (2 | ) | |||||||||||||||||||||||||||
Lending- and deposit-related fees | 216 | 210 | 218 | 214 | 209 | 3 | 3 | 858 | 819 | 5 | ||||||||||||||||||||||||||||||
Asset management, administration and commissions | 477 | 563 | 548 | 619 | 652 | (15 | ) | (27 | ) | 2,207 | 2,413 | (9 | ) | |||||||||||||||||||||||||||
All other income (b) | 93 | 228 | 236 | 166 | 185 | (59 | ) | (50 | ) | 723 | 381 | 90 | ||||||||||||||||||||||||||||
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Noninterest revenue | 2,269 | 4,293 | 5,233 | 6,176 | 4,168 | (47 | ) | (46 | ) | 17,971 | 18,253 | (2 | ) | |||||||||||||||||||||||||||
Net interest income | 2,089 | 2,076 | 2,081 | 2,057 | 2,045 | 1 | 2 | 8,303 | 7,964 | 4 | ||||||||||||||||||||||||||||||
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TOTAL NET REVENUE (c) | 4,358 | 6,369 | 7,314 | 8,233 | 6,213 | (32 | ) | (30 | ) | 26,274 | 26,217 | — | ||||||||||||||||||||||||||||
Provision for credit losses | 272 | 54 | (183 | ) | (429 | ) | (271 | ) | 404 | NM | (286 | ) | (1,200 | ) | 76 | |||||||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||||||
Compensation expense | 1,172 | 1,850 | 2,564 | 3,294 | 1,845 | (37 | ) | (36 | ) | 8,880 | 9,727 | (9 | ) | |||||||||||||||||||||||||||
Noncompensation expense | 1,797 | 1,949 | 1,768 | 1,722 | 2,356 | (8 | ) | (24 | ) | 7,236 | 7,538 | (4 | ) | |||||||||||||||||||||||||||
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TOTAL NONINTEREST EXPENSE | 2,969 | 3,799 | 4,332 | 5,016 | 4,201 | (22 | ) | (29 | ) | 16,116 | 17,265 | (7 | ) | |||||||||||||||||||||||||||
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Income before income tax expense | 1,117 | 2,516 | 3,165 | 3,646 | 2,283 | (56 | ) | (51 | ) | 10,444 | 10,152 | 3 | ||||||||||||||||||||||||||||
Income tax expense | 391 | 880 | 1,108 | 1,276 | 782 | (56 | ) | (50 | ) | 3,655 | 3,513 | 4 | ||||||||||||||||||||||||||||
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NET INCOME | $ | 726 | $ | 1,636 | $ | 2,057 | $ | 2,370 | $ | 1,501 | (56 | ) | (52 | ) | $ | 6,789 | $ | 6,639 | 2 | |||||||||||||||||||||
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FINANCIAL RATIOS | ||||||||||||||||||||||||||||||||||||||||
ROE | 7 | % | 16 | % | 21 | % | 24 | % | 15 | % | 17 | % | 17 | % | ||||||||||||||||||||||||||
ROA | 0.36 | 0.81 | 0.98 | 1.18 | 0.75 | 0.84 | 0.91 | |||||||||||||||||||||||||||||||||
Overhead ratio | 68 | 60 | 59 | 61 | 68 | 61 | 66 | |||||||||||||||||||||||||||||||||
Compensation expense as a percent of total net revenue | 27 | 29 | 35 | 40 | 30 | 34 | 37 | (g) | ||||||||||||||||||||||||||||||||
REVENUE BY BUSINESS | ||||||||||||||||||||||||||||||||||||||||
Investment banking fees: | ||||||||||||||||||||||||||||||||||||||||
Advisory | $ | 397 | $ | 365 | $ | 601 | $ | 429 | $ | 424 | 9 | (6 | ) | $ | 1,792 | $ | 1,469 | 22 | ||||||||||||||||||||||
Equity underwriting | 169 | 178 | 455 | 379 | 489 | (5 | ) | (65 | ) | 1,181 | 1,589 | (26 | ) | |||||||||||||||||||||||||||
Debt underwriting | 553 | 496 | 866 | 971 | 920 | 11 | (40 | ) | 2,886 | 3,128 | (8 | ) | ||||||||||||||||||||||||||||
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Total investment banking fees | 1,119 | 1,039 | 1,922 | 1,779 | 1,833 | 8 | (39 | ) | 5,859 | 6,186 | (5 | ) | ||||||||||||||||||||||||||||
Fixed income markets (d) | 2,491 | 3,328 | 4,280 | 5,238 | 2,875 | (25 | ) | (13 | ) | 15,337 | 15,025 | 2 | ||||||||||||||||||||||||||||
Equity markets (e) | 779 | 1,424 | 1,223 | 1,406 | 1,128 | (45 | ) | (31 | ) | 4,832 | 4,763 | 1 | ||||||||||||||||||||||||||||
Credit portfolio (b)(f) | (31 | ) | 578 | (111 | ) | (190 | ) | 377 | NM | NM | 246 | 243 | 1 | |||||||||||||||||||||||||||
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Total net revenue | $ | 4,358 | $ | 6,369 | $ | 7,314 | $ | 8,233 | $ | 6,213 | (32 | ) | (30 | ) | $ | 26,274 | $ | 26,217 | — | |||||||||||||||||||||
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(a) | Principal transactions included debit valuation adjustments (“DVA”) related to derivatives and structured liabilities measured at fair value. DVA gains/(losses) were ($567) million, $1.9 billion, $165 million, ($46) million and $15 million for the three months ended December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively. |
(b) | IB manages traditional credit exposures related to Global Corporate Bank (“GCB”) on behalf of IB and TSS. Effective January 1, 2011, IB and TSS share the economics related to the Firm’s GCB clients. IB recognizes this sharing agreement within all other income. The prior-year periods reflected the reimbursement from TSS for a portion of the total costs of managing the credit portfolio on behalf of TSS. |
(c) | Total net revenue included tax-equivalent adjustments, predominantly due to income tax credits related to affordable housing and alternative energy investments, as well as tax-exempt income from municipal bond investments of $510 million, $440 million, $493 million, $438 million and $475 million for the three months ended December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively, and $1.9 billion and $1.7 billion for full year 2011 and 2010, respectively. |
(d) | Fixed income markets primarily include revenue related to market-making across global fixed income markets, including foreign exchange, interest rate, credit and commodities markets. Includes DVA gains/(losses) of ($135) million, $529 million, $64 million, $95 million and ($20) million for the three months ended December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively. |
(e) | Equity markets primarily include revenue related to market-making across global equity products, including cash instruments, derivatives, convertibles and Prime Services. Includes DVA gains/(losses) of ($27) million, $377 million, $78 million, ($72) million and $39 million for the three months ended December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively. |
(f) | Credit portfolio revenue includes net interest income, fees and loan sales activity, as well as gains or losses on securities received as part of a loan restructuring, for IB’s credit portfolio. Credit portfolio revenue also includes the results of risk management related to the Firm’s lending and derivative activities. Includes DVA gains/(losses) of ($405) million, $979 million, $23 million, ($69) million and ($4) million for the three months ended December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively. |
(g) | The compensation expense as a percentage of total net revenue ratio for full year 2010, excluding the payroll tax expense related to the U.K. Bank Payroll Tax on certain compensation awarded from December 9, 2009 to April 5, 2010 to relevant banking employees, which is a non-GAAP financial measure, was 35%. IB excludes this tax from the ratio because it enables comparability between periods. |
Page 9
JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except headcount and ratio data) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (period-end) | ||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 776,430 | $ | 824,733 | $ | 809,630 | $ | 853,452 | $ | 825,150 | (6 | )% | (6 | )% | $ | 776,430 | $ | 825,150 | (6 | )% | ||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||||
Loans retained (a) | 68,208 | 58,163 | 56,107 | 52,712 | 53,145 | 17 | 28 | 68,208 | 53,145 | 28 | ||||||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value | 2,915 | 2,311 | 3,466 | 5,070 | 3,746 | 26 | (22 | ) | 2,915 | 3,746 | (22 | ) | ||||||||||||||||||||||||||||
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Total loans | 71,123 | 60,474 | 59,573 | 57,782 | 56,891 | 18 | 25 | 71,123 | 56,891 | 25 | ||||||||||||||||||||||||||||||
Equity | 40,000 | 40,000 | 40,000 | 40,000 | 40,000 | — | — | 40,000 | 40,000 | — | ||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (average) | ||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 790,644 | $ | 803,667 | $ | 841,355 | $ | 815,828 | $ | 792,703 | (2 | ) | — | $ | 812,779 | $ | 731,801 | 11 | ||||||||||||||||||||||
Trading assets — debt and equity instruments | 313,005 | 329,984 | 374,694 | 368,956 | 346,990 | (5 | ) | (10 | ) | 346,461 | 307,061 | 13 | ||||||||||||||||||||||||||||
Trading assets — derivative receivables | 76,786 | 79,044 | 69,346 | 67,462 | 72,491 | (3 | ) | 6 | 73,201 | 70,289 | 4 | |||||||||||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||||
Loans retained (a) | 62,698 | 57,265 | 54,590 | 53,370 | 52,502 | 9 | 19 | 57,007 | 54,402 | 5 | ||||||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value | 2,082 | 2,431 | 4,154 | 3,835 | 3,504 | (14 | ) | (41 | ) | 3,119 | 3,215 | (3 | ) | |||||||||||||||||||||||||||
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Total loans | 64,780 | 59,696 | 58,744 | 57,205 | 56,006 | 9 | 16 | 60,126 | 57,617 | 4 | ||||||||||||||||||||||||||||||
Adjusted assets (b) | 564,158 | 597,513 | 628,475 | 611,038 | 587,307 | (6 | ) | (4 | ) | 600,160 | 540,449 | 11 | ||||||||||||||||||||||||||||
Equity | 40,000 | 40,000 | 40,000 | 40,000 | 40,000 | — | — | 40,000 | 40,000 | — | ||||||||||||||||||||||||||||||
Headcount | 25,999 | 26,615 | 27,716 | 26,494 | 26,314 | (2 | ) | (1 | ) | 25,999 | 26,314 | (1 | ) | |||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||||||||||||||
Net charge-offs/(recoveries) | $ | 199 | $ | (168 | ) | $ | 7 | $ | 123 | $ | (23 | ) | NM | NM | $ | 161 | $ | 735 | (78 | ) | ||||||||||||||||||||
Nonperforming assets: | ||||||||||||||||||||||||||||||||||||||||
Nonaccrual loans: | ||||||||||||||||||||||||||||||||||||||||
Nonaccrual loans retained (a)(c) | 1,035 | 1,274 | 1,494 | 2,388 | 3,159 | (19 | ) | (67 | ) | 1,035 | 3,159 | (67 | ) | |||||||||||||||||||||||||||
Nonaccrual loans held-for-sale and loans at fair value | 166 | 150 | 193 | 259 | 460 | 11 | (64 | ) | 166 | 460 | (64 | ) | ||||||||||||||||||||||||||||
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Total nonaccrual loans | 1,201 | 1,424 | 1,687 | 2,647 | 3,619 | (16 | ) | (67 | ) | 1,201 | 3,619 | (67 | ) | |||||||||||||||||||||||||||
Derivative receivables | 14 | 7 | 18 | 21 | 34 | 100 | (59 | ) | 14 | 34 | (59 | ) | ||||||||||||||||||||||||||||
Assets acquired in loan satisfactions | 79 | 77 | 83 | 73 | 117 | 3 | (32 | ) | 79 | 117 | (32 | ) | ||||||||||||||||||||||||||||
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Total nonperforming assets | 1,294 | 1,508 | 1,788 | 2,741 | 3,770 | (14 | ) | (66 | ) | 1,294 | 3,770 | (66 | ) | |||||||||||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses | 1,436 | 1,337 | 1,178 | 1,330 | 1,863 | 7 | (23 | ) | 1,436 | 1,863 | (23 | ) | ||||||||||||||||||||||||||||
Allowance for lending-related commitments | 418 | 444 | 383 | 424 | 447 | (6 | ) | (6 | ) | 418 | 447 | (6 | ) | |||||||||||||||||||||||||||
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Total allowance for credit losses | 1,854 | 1,781 | 1,561 | 1,754 | 2,310 | 4 | (20 | ) | 1,854 | 2,310 | (20 | ) | ||||||||||||||||||||||||||||
Net charge-off/(recovery) rate (a)(d) | 1.26 | % | (1.16 | )% | 0.05 | % | 0.93 | % | (0.17 | )% | 0.28 | % | 1.35 | % | ||||||||||||||||||||||||||
Allow. for loan losses to period-end loans retained (a)(d) | 2.11 | 2.30 | 2.10 | 2.52 | 3.51 | 2.11 | 3.51 | |||||||||||||||||||||||||||||||||
Allow. for loan losses to nonaccrual loans retained (a)(c)(d) | 139 | 105 | 79 | 56 | 59 | 139 | 59 | |||||||||||||||||||||||||||||||||
Nonaccrual loans to total period-end loans | 1.69 | 2.35 | 2.83 | 4.58 | 6.36 | 1.69 | 6.36 |
(a) | Loans retained included credit portfolio loans, leveraged leases and other accrual loans, and excluded loans held-for-sale and loans at fair value. |
(b) | Adjusted assets, a non-GAAP financial measure, is presented to assist the reader in comparing IB’s asset and capital levels with those of other investment banks in the securities industry. For further discussion of adjusted assets, see page 45. |
(c) | Allowance for loan losses of $263 million, $320 million, $377 million, $567 million and $1.1 billion were held against these nonaccrual loans at December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively. |
(d) | Loans held-for-sale and loans at fair value were excluded when calculating the allowance coverage ratio and net charge-off/(recovery) rate. |
Page 10
JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio and rankings data) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
MARKET RISK — AVERAGE TRADING AND CREDIT PORTFOLIO VAR - 95% CONFIDENCE LEVEL | ||||||||||||||||||||||||||||||||||||||||
Trading activities: | ||||||||||||||||||||||||||||||||||||||||
Fixed income | $ | 56 | $ | 48 | $ | 45 | $ | 49 | $ | 53 | 17 | % | 6 | % | $ | 50 | $ | 65 | (23 | )% | ||||||||||||||||||||
Foreign exchange | 12 | 10 | 9 | 11 | 10 | 20 | 20 | 11 | 11 | — | ||||||||||||||||||||||||||||||
Equities | 19 | 19 | 25 | 29 | 23 | — | (17 | ) | 23 | 22 | 5 | |||||||||||||||||||||||||||||
Commodities and other | 20 | 15 | 16 | 13 | 14 | 33 | 43 | 16 | 16 | — | ||||||||||||||||||||||||||||||
Diversification (a) | (50 | ) | (39 | ) | (37 | ) | (38 | ) | (38 | ) | (28 | ) | (32 | ) | (42 | ) | (43 | ) | 2 | |||||||||||||||||||||
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Total trading VaR (b) | 57 | 53 | 58 | 64 | 62 | 8 | (8 | ) | 58 | 71 | (18 | ) | ||||||||||||||||||||||||||||
Credit portfolio VaR (c) | 39 | 38 | 27 | 26 | 26 | 3 | 50 | 33 | 26 | 27 | ||||||||||||||||||||||||||||||
Diversification (a) | (21 | ) | (21 | ) | (8 | ) | (7 | ) | (10 | ) | — | (110 | ) | (15 | ) | (10 | ) | (50 | ) | |||||||||||||||||||||
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Total trading and credit portfolio VaR | $ | 75 | $ | 70 | $ | 77 | $ | 83 | $ | 78 | 7 | (4 | ) | $ | 76 | $ | 87 | (13 | ) | |||||||||||||||||||||
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FULL YEAR 2011 | FULL YEAR 2010 | |||||||
Market Share | Rankings | Market Share | Rankings | |||||
MARKET SHARES AND RANKINGS (d) | ||||||||
Global investment banking fees (e) | 8.1% | #1 | 7.6% | #1 | ||||
Debt, equity and equity-related | ||||||||
Global | 6.8 | 1 | 7.2 | 1 | ||||
U.S. | 11.1 | 1 | 11.1 | 1 | ||||
Syndicated loans | ||||||||
Global | 11.0 | 1 | 8.5 | 2 | ||||
U.S. | 21.4 | 1 | 19.1 | 2 | ||||
Long-term debt (f) | ||||||||
Global | 6.7 | 1 | 7.2 | 2 | ||||
U.S. | 11.2 | 1 | 10.9 | 2 | ||||
Equity and equity-related | ||||||||
Global (g) | 6.8 | 3 | 7.3 | 3 | ||||
U.S. | 12.5 | 1 | 13.1 | 2 | ||||
Announced M&A (h) | ||||||||
Global | 18.6 | 2 | 15.9 | 4 | ||||
U.S. | 27.5 | 2 | 21.9 | 3 |
(a) | Average value-at-risk (“ VaR”) was less than the sum of the VaR of the components described above, which is due to portfolio diversification. The diversification effect reflects the fact that the risks were not perfectly correlated. The risk of a portfolio of positions is therefore usually less than the sum of the risks of the positions themselves. |
(b) | Trading VaR includes substantially all trading activities in IB, including the credit spread sensitivities of certain mortgage products and syndicated lending facilities that the Firm intends to distribute; however, particular risk parameters of certain products are not fully captured, for example, correlation risk. Trading VaR does not include the debit valuation adjustments (“DVA”) taken on derivative and structured liabilities to reflect the credit quality of the Firm. |
(c) | Credit portfolio VaR includes the derivative credit valuation adjustments (“CVA”), hedges of the CVA and mark-to-market (“MTM”) hedges of the retained loan portfolio, which are all reported in principal transactions revenue. This VaR does not include the retained loan portfolio, which is not MTM. |
(d) | Source: Dealogic. Global Investment Banking fees reflects the ranking of fees and market share. Remainder of rankings reflects transaction volume rank and market share. |
(e) | Global IB fees exclude money market, short-term debt and shelf deals. |
(f) | Long-term debt tables include investment-grade, high-yield, supranationals, sovereigns, agencies, covered bonds, asset-backed securities and mortgage-backed securities; and exclude money market, short-term debt, and U.S. municipal securities. |
(g) | Equity and equity-related rankings include rights offerings and Chinese A-Shares. |
(h) | Global announced M&A is based on transaction value at announcement; all other rankings are based on transaction proceeds, with full credit to each book manager/equal if joint. Because of joint assignments, market share of all participants will add up to more than 100%. M&A for full year 2011 and 2010 reflects the removal of any withdrawn transactions. U.S. announced M&A represents any U.S. involvement ranking. |
Page 11
JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS, CONTINUED (in millions) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
INTERNATIONAL METRICS | ||||||||||||||||||||||||||||||||||||||||
Total net revenue: (a) | ||||||||||||||||||||||||||||||||||||||||
Europe/Middle East/Africa | $ | 1,353 | $ | 1,995 | $ | 2,478 | $ | 2,592 | $ | 1,423 | (32 | )% | (5 | )% | $ | 8,418 | $ | 7,380 | 14 | % | ||||||||||||||||||||
Asia/Pacific | 502 | 948 | 762 | 1,122 | 927 | (47 | ) | (46 | ) | 3,334 | 3,809 | (12 | ) | |||||||||||||||||||||||||||
Latin America/Caribbean | 240 | 175 | 337 | 327 | 172 | 37 | 40 | 1,079 | 897 | 20 | ||||||||||||||||||||||||||||||
North America | 2,263 | 3,251 | 3,737 | 4,192 | 3,691 | (30 | ) | (39 | ) | 13,443 | 14,131 | (5 | ) | |||||||||||||||||||||||||||
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Total net revenue | $ | 4,358 | $ | 6,369 | $ | 7,314 | $ | 8,233 | $ | 6,213 | (32 | ) | (30 | ) | $ | 26,274 | $ | 26,217 | — | |||||||||||||||||||||
Loans (period-end): (b) | ||||||||||||||||||||||||||||||||||||||||
Europe/Middle East/Africa | $ | 15,905 | $ | 15,361 | $ | 15,370 | $ | 14,059 | $ | 13,961 | 4 | 14 | $ | 15,905 | $ | 13,961 | 14 | |||||||||||||||||||||||
Asia/Pacific | 7,889 | 6,892 | 6,211 | 5,472 | 5,924 | 14 | 33 | 7,889 | 5,924 | 33 | ||||||||||||||||||||||||||||||
Latin America/Caribbean | 3,148 | 3,222 | 2,633 | 2,190 | 2,200 | (2 | ) | 43 | 3,148 | 2,200 | 43 | |||||||||||||||||||||||||||||
North America | 41,266 | 32,688 | 31,893 | 30,991 | 31,060 | 26 | 33 | 41,266 | 31,060 | 33 | ||||||||||||||||||||||||||||||
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Total loans | $ | 68,208 | $ | 58,163 | $ | 56,107 | $ | 52,712 | $ | 53,145 | 17 | 28 | $ | 68,208 | $ | 53,145 | 28 |
(a) | Regional revenue is based primarily on the domicile of the client and/or location of the trading desk. |
(b) | Includes retained loans based on the domicile of the client. Excludes loans held-for-sale and loans at fair value. |
Page 12
JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS (in millions, except ratio and headcount data) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
INCOME STATEMENT | ||||||||||||||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||||||||||||||
Lending- and deposit-related fees | $ | 808 | $ | 833 | $ | 813 | $ | 736 | $ | 728 | (3 | )% | 11 | % | $ | 3,190 | $ | 3,061 | 4 | % | ||||||||||||||||||||
Asset management, administration and commissions | 494 | 513 | 499 | 485 | 454 | (4 | ) | 9 | 1,991 | 1,776 | 12 | |||||||||||||||||||||||||||||
Mortgage fees and related income | 723 | 1,380 | 1,100 | (489 | ) | 1,609 | (48 | ) | (55 | ) | 2,714 | 3,855 | (30 | ) | ||||||||||||||||||||||||||
Credit card income | 305 | 611 | 572 | 537 | 524 | (50 | ) | (42 | ) | 2,025 | 1,955 | 4 | ||||||||||||||||||||||||||||
Other income | 107 | 136 | 131 | 111 | 128 | (21 | ) | (16 | ) | 485 | 580 | (16 | ) | |||||||||||||||||||||||||||
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Noninterest revenue | 2,437 | 3,473 | 3,115 | 1,380 | 3,443 | (30 | ) | (29 | ) | 10,405 | 11,227 | (7 | ) | |||||||||||||||||||||||||||
Net interest income | 3,958 | 4,062 | 4,027 | 4,086 | 4,256 | (3 | ) | (7 | ) | 16,133 | 17,220 | (6 | ) | |||||||||||||||||||||||||||
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TOTAL NET REVENUE (a) | 6,395 | 7,535 | 7,142 | 5,466 | 7,699 | (15 | ) | (17 | ) | 26,538 | 28,447 | (7 | ) | |||||||||||||||||||||||||||
Provision for credit losses | 779 | 1,027 | 994 | 1,199 | 2,418 | (24 | ) | (68 | ) | 3,999 | 8,919 | (55 | ) | |||||||||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||||||
Compensation expense | 2,130 | 2,101 | 1,937 | 1,876 | 1,816 | 1 | 17 | 8,044 | 7,072 | 14 | ||||||||||||||||||||||||||||||
Noncompensation expense | 2,534 | 2,404 | 3,274 | 2,964 | 2,587 | 5 | (2 | ) | 11,176 | 9,135 | 22 | |||||||||||||||||||||||||||||
Amortization of intangibles | 58 | 60 | 60 | 60 | 68 | (3 | ) | (15 | ) | 238 | 276 | (14 | ) | |||||||||||||||||||||||||||
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TOTAL NONINTEREST EXPENSE | 4,722 | 4,565 | 5,271 | 4,900 | 4,471 | 3 | 6 | 19,458 | 16,483 | 18 | ||||||||||||||||||||||||||||||
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Income/(loss) before income tax expense/(benefit) | 894 | 1,943 | 877 | (633 | ) | 810 | (54 | ) | 10 | 3,081 | 3,045 | 1 | ||||||||||||||||||||||||||||
Income tax expense/(benefit) | 361 | 782 | 494 | (234 | ) | 351 | (54 | ) | 3 | 1,403 | 1,317 | 7 | ||||||||||||||||||||||||||||
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NET INCOME/(LOSS) | $ | 533 | $ | 1,161 | $ | 383 | $ | (399 | ) | $ | 459 | (54 | ) | 16 | $ | 1,678 | $ | 1,728 | (3 | ) | ||||||||||||||||||||
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FINANCIAL RATIOS | ||||||||||||||||||||||||||||||||||||||||
ROE | 8 | % | 18 | % | 6 | % | (6 | )% | 7 | % | 7 | % | 7 | % | ||||||||||||||||||||||||||
Overhead ratio | 74 | 61 | 74 | 90 | 58 | 73 | 58 | |||||||||||||||||||||||||||||||||
Overhead ratio excluding core deposit intangibles (b) | 73 | 60 | 73 | 89 | 57 | 72 | 57 | |||||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (period-end) | ||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 274,795 | $ | 276,799 | $ | 283,753 | $ | 289,336 | $ | 299,950 | (1 | ) | (8 | ) | $ | 274,795 | $ | 299,950 | (8 | ) | ||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||||
Loans retained | 232,555 | 235,572 | 241,127 | 247,128 | 253,904 | (1 | ) | (8 | ) | 232,555 | 253,904 | (8 | ) | |||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value (c) | 12,694 | 13,153 | 13,558 | 12,234 | 14,863 | (3 | ) | (15 | ) | 12,694 | 14,863 | (15 | ) | |||||||||||||||||||||||||||
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Total loans | 245,249 | 248,725 | 254,685 | 259,362 | 268,767 | (1 | ) | (9 | ) | 245,249 | 268,767 | (9 | ) | |||||||||||||||||||||||||||
Deposits | 395,797 | 388,735 | 378,371 | 379,605 | 369,925 | 2 | 7 | 395,797 | 369,925 | 7 | ||||||||||||||||||||||||||||||
Equity | 25,000 | 25,000 | 25,000 | 25,000 | 24,600 | — | 2 | 25,000 | 24,600 | 2 | ||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (average) | ||||||||||||||||||||||||||||||||||||||||
Total assets | 278,497 | 283,443 | 287,235 | 297,938 | 307,040 | (2 | ) | (9 | ) | 286,716 | 314,046 | (9 | ) | |||||||||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||||
Loans retained | 233,958 | 238,273 | 244,030 | 250,443 | 257,500 | (2 | ) | (9 | ) | 241,621 | 268,902 | (10 | ) | |||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value (c) | 16,680 | 16,608 | 14,613 | 17,519 | 18,877 | — | (12 | ) | 16,354 | 15,395 | 6 | |||||||||||||||||||||||||||||
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Total loans | 250,638 | 254,881 | 258,643 | 267,962 | 276,377 | (2 | ) | (9 | ) | 257,975 | 284,297 | (9 | ) | |||||||||||||||||||||||||||
Deposits | 389,519 | 382,202 | 378,932 | 371,787 | 367,032 | 2 | 6 | 380,663 | 361,525 | 5 | ||||||||||||||||||||||||||||||
Equity | 25,000 | 25,000 | 25,000 | 25,000 | 24,600 | — | 2 | 25,000 | 24,600 | 2 | ||||||||||||||||||||||||||||||
Headcount | 133,075 | 128,992 | 122,728 | 118,547 | 116,882 | 3 | 14 | 133,075 | 116,882 | 14 |
(a) | Total net revenue included tax-equivalent adjustments associated with tax-exempt loans to municipalities and other qualified entities of $2 million, $2 million, $1 million, $2 million and zero for the three months ended December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively, and $7 million and $8 million for full year 2011 and 2010, respectively. |
(b) | Retail Financial Services uses the overhead ratio (excluding the amortization of core deposit intangibles (“CDI”)), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in the overhead ratio calculation would result in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this method would therefore result in an improving overhead ratio over time, all things remaining equal. This non-GAAP ratio excludes Consumer & Business Banking’s CDI amortization expense related to prior business combination transactions of $58 million, $60 million, $60 million, $60 million and $68 million for the three months ended December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively, and $238 million and $276 million for full year 2011 and 2010, respectively. |
(c) | Loans at fair value consist of prime mortgages originated with the intent to sell that are accounted for at fair value and classified as trading assets on the Consolidated Balance Sheets. These loans totaled $12.7 billion, $13.0 billion, $13.3 billion, $12.0 billion and $14.7 billion at December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively. Average balances of these loans totaled $16.6 billion, $16.5 billion, $14.5 billion, $17.4 billion and $18.7 billion for the three months ended December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively, and $16.3 billion and $15.2 billion for full year 2011 and 2010, respectively. |
Page 13
JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||||||||||||||
Net charge-offs | $ | 1,009 | $ | 1,027 | $ | 1,069 | $ | 1,199 | $ | 1,970 | (2 | )% | (49 | )% | $ | 4,304 | $ | 7,221 | (40 | )% | ||||||||||||||||||||
Nonaccrual loans: | ||||||||||||||||||||||||||||||||||||||||
Nonaccrual loans retained | 7,170 | 7,579 | 8,088 | 8,278 | 8,568 | (5 | ) | (16 | ) | 7,170 | 8,568 | (16 | ) | |||||||||||||||||||||||||||
Nonaccrual loans held-for-sale and loans at fair value | 103 | 132 | 142 | 150 | 145 | (22 | ) | (29 | ) | 103 | 145 | (29 | ) | |||||||||||||||||||||||||||
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Total nonaccrual loans (a)(b)(c) | 7,273 | 7,711 | 8,230 | 8,428 | 8,713 | (6 | ) | (17 | ) | 7,273 | 8,713 | (17 | ) | |||||||||||||||||||||||||||
Nonperforming assets (a)(b)(c) | 8,064 | 8,576 | 9,175 | 9,632 | 9,999 | (6 | ) | (19 | ) | 8,064 | 9,999 | (19 | ) | |||||||||||||||||||||||||||
Allowance for loan losses | 15,247 | 15,479 | 15,479 | 15,554 | 15,554 | (1 | ) | (2 | ) | 15,247 | 15,554 | (2 | ) | |||||||||||||||||||||||||||
Net charge-off rate (d) | 1.71 | % | 1.71 | % | 1.76 | % | 1.94 | % | 3.04 | % | 1.78 | % | 2.69 | % | ||||||||||||||||||||||||||
Net charge-off rate excluding purchased credit-impaired (“PCI”) loans (d)(e) | 2.39 | 2.39 | 2.46 | 2.72 | 4.25 | 2.49 | 3.76 | |||||||||||||||||||||||||||||||||
Allowance for loan losses to ending loans retained (d) | 6.56 | 6.57 | 6.42 | 6.29 | 6.13 | 6.56 | 6.13 | |||||||||||||||||||||||||||||||||
Allowance for loan losses to ending loans retained excluding PCI loans (d)(e) | 5.71 | 6.26 | 6.12 | 6.02 | 5.86 | 5.71 | 5.86 | |||||||||||||||||||||||||||||||||
Allowance for loan losses to nonaccrual loans retained (a)(d)(e) | 133 | 139 | 130 | 128 | 124 | 133 | 124 | |||||||||||||||||||||||||||||||||
Nonaccrual loans to total loans | 2.97 | 3.10 | 3.23 | 3.25 | 3.24 | 2.97 | 3.24 | |||||||||||||||||||||||||||||||||
Nonaccrual loans to total loans excluding PCI loans (a) | 4.05 | 4.25 | 4.43 | 4.47 | 4.45 | 4.05 | 4.45 |
(a) | Excludes PCI loans that were acquired as part of the Washington Mutual transaction, which are accounted for on a pool basis. Since each pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, the past-due status of the pools, or that of the individual loans within the pools, is not meaningful. Because the Firm is recognizing interest income on each pool of loans, they are all considered to be performing. |
(b) | Certain of these loans are classified as trading assets on the Consolidated Balance Sheets. |
(c) | At December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, nonperforming assets excluded: (1) mortgage loans insured by U.S. government agencies of $11.5 billion, $9.5 billion, $9.1 billion, $8.8 billion and $9.4 billion, respectively, that are 90 or more days past due; and (2) real estate owned insured by U.S. government agencies of $1.0 billion, $2.4 billion, $2.4 billion, $2.3 billion and $1.9 billion, respectively. These amounts are excluded as reimbursement of insured amounts is proceeding normally. |
(d) | Loans held-for-sale and loans accounted for at fair value were excluded when calculating the allowance coverage ratio and the net charge-off rate. |
(e) | Excludes the impact of PCI loans that were acquired as part of the Washington Mutual transaction. These loans were accounted for at fair value on the acquisition date, which incorporated management’s estimate, as of that date, of credit losses over the remaining life of the portfolio. An allowance for loan losses of $5.7 billion at December 31, 2011 and $4.9 billion at September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010 was recorded for these loans; these amounts were also excluded from the applicable ratios. To date, no charge-offs have been recorded for these loans. |
Page 14
JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
CONSUMER & BUSINESS BANKING | ||||||||||||||||||||||||||||||||||||||||
Noninterest revenue | $ | 1,603 | $ | 1,952 | $ | 1,889 | $ | 1,757 | $ | 1,716 | (18 | )% | (7 | )% | $ | 7,201 | $ | 6,844 | 5 | % | ||||||||||||||||||||
Net interest income | 2,714 | 2,730 | 2,706 | 2,659 | 2,693 | (1 | ) | 1 | 10,809 | 10,884 | (1 | ) | ||||||||||||||||||||||||||||
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Total net revenue | 4,317 | 4,682 | 4,595 | 4,416 | 4,409 | (8 | ) | (2 | ) | 18,010 | 17,728 | 2 | ||||||||||||||||||||||||||||
Provision for credit losses | 132 | 126 | 42 | 119 | 69 | 5 | 91 | 419 | 630 | (33 | ) | |||||||||||||||||||||||||||||
Noninterest expense | 2,848 | 2,842 | 2,713 | 2,799 | 2,676 | — | 6 | 11,202 | 10,717 | 5 | ||||||||||||||||||||||||||||||
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Income before income tax expense | 1,337 | 1,714 | 1,840 | 1,498 | 1,664 | (22 | ) | (20 | ) | 6,389 | 6,381 | — | ||||||||||||||||||||||||||||
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Net income | $ | 802 | $ | 1,023 | $ | 1,098 | $ | 893 | $ | 952 | (22 | ) | (16 | ) | $ | 3,816 | $ | 3,652 | 4 | |||||||||||||||||||||
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Overhead ratio | 66 | % | 61 | % | 59 | % | 63 | % | 61 | % | 62 | % | 60 | % | ||||||||||||||||||||||||||
Overhead ratio excluding core deposit intangibles (a) | 65 | 59 | 58 | 62 | 59 | 61 | 59 | |||||||||||||||||||||||||||||||||
BUSINESS METRICS | ||||||||||||||||||||||||||||||||||||||||
Business banking origination volume | $ | 1,389 | $ | 1,440 | $ | 1,573 | $ | 1,425 | $ | 1,435 | (4 | ) | (3 | ) | $ | 5,827 | $ | 4,688 | 24 | |||||||||||||||||||||
End-of-period loans | 17,652 | 17,272 | 17,141 | 16,957 | 16,812 | 2 | 5 | 17,652 | 16,812 | 5 | ||||||||||||||||||||||||||||||
End-of-period deposits: | ||||||||||||||||||||||||||||||||||||||||
Checking | 147,779 | 142,064 | 136,297 | 137,463 | 131,702 | 4 | 12 | 147,779 | 131,702 | 12 | ||||||||||||||||||||||||||||||
Savings | 191,891 | 186,733 | 182,127 | 180,345 | 170,604 | 3 | 12 | 191,891 | 170,604 | 12 | ||||||||||||||||||||||||||||||
Time and other | 36,743 | 39,017 | 41,948 | 44,001 | 45,967 | (6 | ) | (20 | ) | 36,743 | 45,967 | (20 | ) | |||||||||||||||||||||||||||
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Total end-of-period deposits | 376,413 | 367,814 | 360,372 | 361,809 | 348,273 | 2 | 8 | 376,413 | 348,273 | 8 | ||||||||||||||||||||||||||||||
Average loans | 17,363 | 17,172 | 17,057 | 16,886 | 16,584 | 1 | 5 | 17,121 | 16,863 | 2 | ||||||||||||||||||||||||||||||
Average deposits: | ||||||||||||||||||||||||||||||||||||||||
Checking | 140,672 | 137,033 | 136,558 | 131,954 | 126,604 | 3 | 11 | 136,579 | 123,490 | 11 | ||||||||||||||||||||||||||||||
Savings | 189,553 | 184,590 | 180,892 | 175,133 | 168,746 | 3 | 12 | 182,587 | 166,112 | 10 | ||||||||||||||||||||||||||||||
Time and other | 37,708 | 40,588 | 43,053 | 45,035 | 47,436 | (7 | ) | (21 | ) | 41,574 | 51,149 | (19 | ) | |||||||||||||||||||||||||||
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Total average deposits | 367,933 | 362,211 | 360,503 | 352,122 | 342,786 | 2 | 7 | 360,740 | 340,751 | 6 | ||||||||||||||||||||||||||||||
Deposit margin | 2.76 | % | 2.82 | % | 2.83 | % | 2.88 | % | 2.96 | % | 2.82 | % | 3.00 | % | ||||||||||||||||||||||||||
Average assets | $ | 30,373 | $ | 30,074 | $ | 29,047 | $ | 29,409 | $ | 29,110 | 1 | 4 | $ | 29,729 | $ | 29,307 | 1 | |||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||||||||||||||
Net charge-offs | 132 | 126 | 117 | 119 | 169 | 5 | (22 | ) | 494 | 730 | (32 | ) | ||||||||||||||||||||||||||||
Net charge-off rate | 3.02 | % | 2.91 | % | 2.74 | % | 2.86 | % | 4.04 | % | 2.89 | % | 4.32 | % | ||||||||||||||||||||||||||
Nonperforming assets | $ | 710 | $ | 773 | $ | 784 | $ | 822 | $ | 846 | (8 | ) | (16 | ) | $ | 710 | $ | 846 | (16 | ) | ||||||||||||||||||||
RETAIL BRANCH BUSINESS METRICS | ||||||||||||||||||||||||||||||||||||||||
Investment sales volume | 4,696 | 5,102 | 6,334 | 6,584 | 6,069 | (8 | ) | (23 | ) | 22,716 | 23,579 | (4 | ) | |||||||||||||||||||||||||||
Client investment assets | 137,853 | 132,255 | 140,285 | 138,150 | 133,114 | 4 | 4 | 137,853 | 133,114 | 4 | ||||||||||||||||||||||||||||||
% managed accounts | 24 | % | 23 | % | 23 | % | 22 | % | 20 | % | 24 | % | 20 | % | ||||||||||||||||||||||||||
Number of: | ||||||||||||||||||||||||||||||||||||||||
Branches | 5,508 | 5,396 | 5,340 | 5,292 | 5,268 | 2 | 5 | 5,508 | 5,268 | 5 | ||||||||||||||||||||||||||||||
Chase Private Client branch locations | 262 | 139 | 16 | 16 | 16 | 88 | NM | 262 | 16 | NM | ||||||||||||||||||||||||||||||
ATMs | 17,235 | 16,708 | 16,443 | 16,265 | 16,145 | 3 | 7 | 17,235 | 16,145 | 7 | ||||||||||||||||||||||||||||||
Personal bankers (b) | 24,308 | 24,205 | 23,330 | 21,894 | 21,735 | — | 12 | 24,308 | 21,735 | 12 | ||||||||||||||||||||||||||||||
Sales specialists (b) | 6,017 | 5,639 | 5,289 | 5,039 | 4,876 | 7 | 23 | 6,017 | 4,876 | 23 | ||||||||||||||||||||||||||||||
Client advisors | 3,201 | 3,177 | 3,112 | 3,051 | 3,066 | 1 | 4 | 3,201 | 3,066 | 4 | ||||||||||||||||||||||||||||||
Active online customers (in thousands) (b) | 17,334 | 17,326 | 17,083 | 17,339 | 16,855 | — | 3 | 17,334 | 16,855 | 3 | ||||||||||||||||||||||||||||||
Active mobile customers (in thousands) (b) | 8,391 | 7,234 | 6,580 | 6,025 | 5,337 | 16 | 57 | 8,391 | 5,337 | 57 | ||||||||||||||||||||||||||||||
Chase Private Clients | 21,723 | 11,711 | 5,807 | 4,829 | 4,242 | 85 | 412 | 21,723 | 4,242 | 412 | ||||||||||||||||||||||||||||||
Checking accounts (in thousands) | 26,626 | 26,541 | 26,266 | 26,622 | 27,252 | — | (2 | ) | 26,626 | 27,252 | (2 | ) |
(a) | Consumer & Business Banking uses the overhead ratio (excluding the amortization of CDI), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in the overhead ratio calculation would result in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this method would therefore result in an improving overhead ratio over time, all things remaining equal. This non-GAAP ratio excludes Consumer & Business Banking’s CDI amortization expense related to prior business combination transactions of $58 million, $60 million, $60 million, $60 million and $68 million for the three months ended December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively, and $238 million and $276 million for full year 2011 and 2010, respectively. |
(b) | In the fourth quarter of 2011, the classification of personal bankers, sales specialists, and active online and mobile customers was refined, as such, prior periods have been revised to conform with the current presentation. For further discussion, see Glossary of Terms on page 48. |
Page 15
JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
MORTGAGE PRODUCTION AND SERVICING | ||||||||||||||||||||||||||||||||||||||||
Mortgage fees and related income | $ | 723 | $ | 1,380 | $ | 1,100 | $ | (489 | ) | $ | 1,609 | (48 | )% | (55 | )% | $ | 2,714 | $ | 3,855 | (30 | )% | |||||||||||||||||||
Other noninterest revenue | 124 | 118 | 106 | 104 | 108 | 5 | 15 | 452 | 413 | 9 | ||||||||||||||||||||||||||||||
Net interest income | 171 | 204 | 124 | 271 | 244 | (16 | ) | (30 | ) | 770 | 904 | (15 | ) | |||||||||||||||||||||||||||
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Total net revenue | 1,018 | 1,702 | 1,330 | (114 | ) | 1,961 | (40 | ) | (48 | ) | 3,936 | 5,172 | (24 | ) | ||||||||||||||||||||||||||
Provision for credit losses | 1 | 2 | (2 | ) | 4 | 12 | (50 | ) | (92 | ) | 5 | 58 | (91 | ) | ||||||||||||||||||||||||||
Noninterest expense | 1,442 | 1,360 | 2,187 | 1,746 | 1,382 | 6 | 4 | 6,735 | 4,139 | 63 | ||||||||||||||||||||||||||||||
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Income/(loss) before income tax expense/(benefit) | (425 | ) | 340 | (855 | ) | (1,864 | ) | 567 | NM | NM | (2,804 | ) | 975 | NM | ||||||||||||||||||||||||||
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Net income/(loss) | $ | (258 | ) | $ | 205 | $ | (649 | ) | $ | (1,130 | ) | $ | 330 | NM | NM | $ | (1,832 | ) | $ | 569 | NM | |||||||||||||||||||
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Overhead ratio | 142 | % | 80 | % | 164 | % | NM | % | 70 | % | 171 | % | 80 | % | ||||||||||||||||||||||||||
FUNCTIONAL RESULTS | ||||||||||||||||||||||||||||||||||||||||
Production | ||||||||||||||||||||||||||||||||||||||||
Production revenue | $ | 859 | $ | 1,090 | $ | 767 | $ | 679 | $ | 1,098 | (21 | ) | (22 | ) | $ | 3,395 | $ | 3,440 | (1 | ) | ||||||||||||||||||||
Production-related net interest & other income | 210 | 213 | 199 | 218 | 240 | (1 | ) | (13 | ) | 840 | 869 | (3 | ) | |||||||||||||||||||||||||||
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Production-related revenue, excl. repurchase losses | 1,069 | 1,303 | 966 | 897 | 1,338 | (18 | ) | (20 | ) | 4,235 | 4,309 | (2 | ) | |||||||||||||||||||||||||||
Production expense | 518 | 496 | 457 | 424 | 436 | 4 | 19 | 1,895 | 1,613 | 17 | ||||||||||||||||||||||||||||||
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Income, excluding repurchase losses | 551 | 807 | 509 | 473 | 902 | (32 | ) | (39 | ) | 2,340 | 2,696 | (13 | ) | |||||||||||||||||||||||||||
Repurchase losses | (390 | ) | (314 | ) | (223 | ) | (420 | ) | (349 | ) | (24 | ) | (12 | ) | (1,347 | ) | (2,912 | ) | 54 | |||||||||||||||||||||
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Income/(loss) before income tax expense/(benefit) | 161 | 493 | 286 | 53 | 553 | (67 | ) | (71 | ) | 993 | (216 | ) | NM | |||||||||||||||||||||||||||
Servicing | ||||||||||||||||||||||||||||||||||||||||
Loan servicing revenue | 1,032 | 1,039 | 1,011 | 1,052 | 1,129 | (1 | ) | (9 | ) | 4,134 | 4,575 | (10 | ) | |||||||||||||||||||||||||||
Servicing-related net interest & other income | 90 | 115 | 29 | 156 | 108 | (22 | ) | (17 | ) | 390 | 433 | (10 | ) | |||||||||||||||||||||||||||
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Servicing-related revenue | 1,122 | 1,154 | 1,040 | 1,208 | 1,237 | (3 | ) | (9 | ) | 4,524 | 5,008 | (10 | ) | |||||||||||||||||||||||||||
MSR asset amortization | (406 | ) | (457 | ) | (478 | ) | (563 | ) | (555 | ) | 11 | 27 | (1,904 | ) | (2,384 | ) | 20 | |||||||||||||||||||||||
Default servicing expense (a) | 702 | 585 | 1,449 | 1,078 | 720 | 20 | (3 | ) | 3,814 | 1,747 | 118 | |||||||||||||||||||||||||||||
Core servicing expense | 223 | 281 | 279 | 248 | 238 | (21 | ) | (6 | ) | 1,031 | 837 | 23 | ||||||||||||||||||||||||||||
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Income/(loss), excluding MSR risk management | (209 | ) | (169 | ) | (1,166 | ) | (681 | ) | (276 | ) | (24 | ) | 24 | (2,225 | ) | 40 | NM | |||||||||||||||||||||||
MSR risk management, incl. related net interest income/ (expense) (b) | (377 | ) | 16 | 25 | (1,236 | ) | 290 | NM | NM | (1,572 | ) | 1,151 | NM | |||||||||||||||||||||||||||
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Income/(loss) before income tax expense/(benefit) | (586 | ) | (153 | ) | (1,141 | ) | (1,917 | ) | 14 | (283 | ) | NM | (3,797 | ) | 1,191 | NM | ||||||||||||||||||||||||
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Net Income/(loss) | $ | (258 | ) | $ | 205 | $ | (649 | ) | $ | (1,130 | ) | $ | 330 | NM | NM | $ | (1,832 | ) | $ | 569 | NM | |||||||||||||||||||
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SUPPLEMENTAL MORTGAGE FEES AND RELATED INCOME DETAILS | ||||||||||||||||||||||||||||||||||||||||
Net production revenue: | ||||||||||||||||||||||||||||||||||||||||
Production revenue | $ | 859 | $ | 1,090 | $ | 767 | $ | 679 | $ | 1,098 | (21 | ) | (22 | ) | $ | 3,395 | $ | 3,440 | (1 | ) | ||||||||||||||||||||
Repurchase losses | (390 | ) | (314 | ) | (223 | ) | (420 | ) | (349 | ) | (24 | ) | (12 | ) | (1,347 | ) | (2,912 | ) | 54 | |||||||||||||||||||||
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Net production revenue | 469 | 776 | 544 | 259 | 749 | (40 | ) | (37 | ) | 2,048 | 528 | 288 | ||||||||||||||||||||||||||||
Net mortgage servicing revenue: | ||||||||||||||||||||||||||||||||||||||||
Operating revenue: | ||||||||||||||||||||||||||||||||||||||||
Loan servicing revenue | 1,032 | 1,039 | 1,011 | 1,052 | 1,129 | (1 | ) | (9 | ) | 4,134 | 4,575 | (10 | ) | |||||||||||||||||||||||||||
Changes in MSR asset fair value due to modeled servicing portfolio runoff (c) | (406 | ) | (457 | ) | (478 | ) | (563 | ) | (555 | ) | 11 | 27 | (1,904 | ) | (2,384 | ) | 20 | |||||||||||||||||||||||
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Total operating revenue | 626 | 582 | 533 | 489 | 574 | 8 | 9 | 2,230 | 2,191 | 2 | ||||||||||||||||||||||||||||||
Risk management: | ||||||||||||||||||||||||||||||||||||||||
Changes in MSR asset fair value due to inputs or assumptions in model | (832 | ) | (4,574 | ) | (960 | ) | (751 | ) | 2,909 | 82 | NM | (7,117 | ) | (2,268 | ) | (214 | ) | |||||||||||||||||||||||
Derivative valuation adjustments and other | 460 | 4,596 | 983 | (486 | ) | (2,623 | ) | (90 | ) | NM | 5,553 | 3,404 | 63 | |||||||||||||||||||||||||||
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Total risk management | (372 | )(d) | 22 | 23 | (1,237 | ) | 286 | NM | NM | (1,564 | )(e) | 1,136 | NM | |||||||||||||||||||||||||||
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Total net mortgage servicing revenue | 254 | 604 | 556 | (748 | ) | 860 | (58 | ) | (70 | ) | 666 | 3,327 | (80 | ) | ||||||||||||||||||||||||||
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Mortgage fees and related income | $ | 723 | $ | 1,380 | $ | 1,100 | $ | (489 | ) | $ | 1,609 | (48 | ) | (55 | ) | $ | 2,714 | $ | 3,855 | (30 | ) | |||||||||||||||||||
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(a) | Includes $1.7 billion estimated litigation and other costs of foreclosure-related matters for full year 2011. |
(b) | MSR risk management predominantly includes: (1) changes in the MSR asset fair value due to changes in market interest rates and other modeled inputs and assumptions, and (2) changes in the value of the derivatives used to hedge the MSR asset. |
(c) | Predominantly represents modeled MSR asset amortization. |
(d) | In the fourth quarter of 2011, the Firm recognized a loss of $832 million due to a decrease in the fair value of the MSR asset, which included the following: (1) $569 million of refinements to the valuation model and related inputs comprising updates to the prepayment model, including the impact of the Home Affordable Refinance Program (“HARP”) 2.0, revised fee and cost to service assumptions, and an increase in the option adjusted spread (“OAS”) to reflect higher return and capital requirements; and (2) $263 million of losses due to changes in market interest rates. Offsetting this loss, the Firm recognized a $460 million gain on the derivatives used to hedge the MSR asset. |
(e) | For full year 2011, the Firm recognized a loss of $7.1 billion due to a decrease in the fair value of the MSR asset, which included the following: (1) $1.7 billion of refinements to the valuation model and related inputs including the $569 million described in footnote (d) and $1.1 billion related to revised cost to service assumptions incorporated in the MSR valuation in the first quarter of 2011; and (2) a $5.4 billion loss due to changes in market interest rates. Offsetting this loss, the Firm recognized a $5.6 billion gain on the derivatives used to hedge the MSR asset for the full year 2011. |
Page 16
JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) | ||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
MORTGAGE PRODUCTION AND SERVICING (continued) | ||||||||||||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA | ||||||||||||||||||||||||||||||||||||||||
End-of-period loans: | ||||||||||||||||||||||||||||||||||||||||
Prime mortgage, including option ARMs (a)(b) | $ | 16,891 | $ | 14,800 | $ | 14,260 | $ | 14,147 | $ | 14,186 | 14 | % | 19 | % | $ | 16,891 | $ | 14,186 | 19 | % | ||||||||||||||||||||
Loans held-for-sale and loans at fair value (c) | 12,694 | 13,153 | 13,558 | 12,234 | 14,863 | (3 | ) | (15 | ) | 12,694 | 14,863 | (15 | ) | |||||||||||||||||||||||||||
Average loans: | ||||||||||||||||||||||||||||||||||||||||
Prime mortgage, including option ARMs (a)(d) | 15,733 | 14,451 | 14,083 | 14,037 | 13,916 | 9 | 13 | 14,580 | 13,422 | 9 | ||||||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value (c) | 16,680 | 16,608 | 14,613 | 17,519 | 18,877 | — | (12 | ) | 16,354 | 15,395 | 6 | |||||||||||||||||||||||||||||
Average assets | 60,473 | 59,677 | 58,072 | 61,354 | 62,693 | 1 | (4 | ) | 59,891 | 57,778 | 4 | |||||||||||||||||||||||||||||
Repurchase reserve (ending) | 3,213 | 3,213 | 3,213 | 3,205 | 3,000 | — | 7 | 3,213 | 3,000 | 7 | ||||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||||||||||||||
Net charge-offs/(recoveries): | ||||||||||||||||||||||||||||||||||||||||
Prime mortgage, including option ARMs | 1 | 2 | (2 | ) | 4 | 12 | (50 | ) | (92 | ) | 5 | 41 | (88 | ) | ||||||||||||||||||||||||||
Net charge-off/(recovery) rate: | ||||||||||||||||||||||||||||||||||||||||
Prime mortgage, including option ARMs (d) | 0.03 | % | 0.06 | % | (0.06 | )% | 0.12 | % | 0.35 | % | 0.03 | % | 0.31 | % | ||||||||||||||||||||||||||
30+ day delinquency rate (b)(e) | 3.15 | 3.35 | 3.30 | 3.21 | 3.44 | 3.15 | 3.44 | |||||||||||||||||||||||||||||||||
Nonperforming assets (f) | $ | 716 | $ | 691 | $ | 662 | $ | 658 | $ | 729 | 4 | (2 | ) | $ | 716 | $ | 729 | (2 | ) | |||||||||||||||||||||
BUSINESS METRICS (in billions) | ||||||||||||||||||||||||||||||||||||||||
Origination volume by channel | ||||||||||||||||||||||||||||||||||||||||
Retail | 23.1 | 22.4 | 20.7 | 21.0 | 22.9 | 3 | 1 | 87.2 | 68.8 | 27 | ||||||||||||||||||||||||||||||
Wholesale (g) | 0.1 | 0.1 | 0.1 | 0.2 | 0.3 | — | (67 | ) | 0.5 | 1.3 | (62 | ) | ||||||||||||||||||||||||||||
Correspondent (g) | 14.9 | 13.4 | 10.3 | 13.5 | 25.5 | 11 | (42 | ) | 52.1 | 75.3 | (31 | ) | ||||||||||||||||||||||||||||
CNT (negotiated transactions) | 0.5 | 0.9 | 2.9 | 1.5 | 2.1 | (44 | ) | (76 | ) | 5.8 | 10.2 | (43 | ) | |||||||||||||||||||||||||||
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Total origination volume | 38.6 | 36.8 | 34.0 | 36.2 | 50.8 | 5 | (24 | ) | 145.6 | 155.6 | (6 | ) | ||||||||||||||||||||||||||||
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Application volume by channel | ||||||||||||||||||||||||||||||||||||||||
Retail | 34.6 | 37.7 | 33.6 | 31.3 | 32.4 | (8 | ) | 7 | 137.2 | 115.1 | 19 | |||||||||||||||||||||||||||||
Wholesale (g) | 0.2 | 0.2 | 0.3 | 0.3 | 0.4 | — | (50 | ) | 1.0 | 2.4 | (58 | ) | ||||||||||||||||||||||||||||
Correspondent (g) | 17.8 | 20.2 | 14.9 | 13.6 | 24.9 | (12 | ) | (29 | ) | 66.5 | 97.3 | (32 | ) | |||||||||||||||||||||||||||
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Total application volume | 52.6 | 58.1 | 48.8 | 45.2 | 57.7 | (9 | ) | (9 | ) | 204.7 | 214.8 | (5 | ) | |||||||||||||||||||||||||||
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Third-party mortgage loans serviced (ending) | 902.2 | 924.5 | 940.8 | 955.0 | 967.5 | (2 | ) | (7 | ) | 902.2 | 967.5 | (7 | ) | |||||||||||||||||||||||||||
Third-party mortgage loans serviced (average) | 913.2 | 931.4 | 947.0 | 958.7 | 981.7 | (2 | ) | (7 | ) | 937.6 | 1,037.6 | (10 | ) | |||||||||||||||||||||||||||
MSR net carrying value (ending) | 7.2 | 7.8 | 12.2 | 13.1 | 13.6 | (8 | ) | (47 | ) | 7.2 | 13.6 | (47 | ) | |||||||||||||||||||||||||||
Ratio of MSR net carrying value (ending) to third-party mortgage loans serviced (ending) | 0.80 | % | 0.84 | % | 1.30 | % | 1.37 | % | 1.41 | % | 0.80 | % | 1.41 | % | ||||||||||||||||||||||||||
Ratio of annualized loan servicing revenue to third-party mortgage loans serviced (average) | 0.45 | 0.44 | 0.43 | 0.45 | 0.46 | 0.44 | 0.44 | |||||||||||||||||||||||||||||||||
MSR revenue multiple (h) | 1.78 | x | 1.91 | x | 3.02 | x | 3.04 | x | 3.07 | x | 1.82 | x | 3.20 | x |
(a) | Predominantly represents prime loans repurchased from Government National Mortgage Association (“Ginnie Mae”) pools, which are insured by U.S. government agencies. |
(b) | End-of-period loans owned includes loans held-for-sale of zero, $131 million, $221 million, $188 million and $154 million at December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively. No allowance for loan losses was recorded for these loans. These amounts are excluded when calculating the 30+ day delinquency rate. |
(c) | Loans at fair value consist of prime mortgages originated with the intent to sell that are accounted for at fair value and classified as trading assets on the Consolidated Balance Sheets. These loans totaled $12.7 billion, $13.0 billion, $13.3 billion, $12.0 billion and $14.7 billion at December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively. Average balances of these loans totaled $16.6 billion, $16.5 billion, $14.5 billion, $17.4 billion and $18.7 billion for the three months ended December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively, and $16.3 billion and $15.2 billion for full year 2011 and 2010, respectively. |
(d) | Average loans owned includes loans held-for-sale of $49 million, $108 million, $76 million, $133 million and $185 million for the three months ended December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively, and $91 million and $204 million for full year 2011 and 2010, respectively. No allowance for loan losses was recorded for these loans. These amounts are excluded when calculating the net charge-off rate. |
(e) | Excludes mortgage loans insured by U.S. government agencies of $12.6 billion, $10.5 billion, $10.1 billion, $9.5 billion and $10.3 billion at December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively, that are 30 or more days past due. These amounts are excluded as reimbursement of insured amounts is proceeding normally. |
(f) | At December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, nonperforming assets excluded: (1) mortgage loans insured by U.S. government agencies of $11.5 billion, $9.5 billion, $9.1 billion, $8.8 billion and $9.4 billion, respectively, that are 90 or more days past due; and (2) real estate owned insured by U.S. government agencies of $1.0 billion, $2.4 billion, $2.4 billion, $2.3 billion and $1.9 billion, respectively. These amounts are excluded as reimbursement of insured amounts is proceeding normally. |
(g) | Includes rural housing loans sourced through brokers and correspondents, which are underwritten under Rural Housing Services. |
(h) | Represents the ratio of MSR net carrying value (ending) to third-party mortgage loans serviced (ending) divided by the ratio of annualized loan servicing revenue to third-party mortgage loans serviced (average). |
Page 17
JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
REAL ESTATE PORTFOLIOS | ||||||||||||||||||||||||||||||||||||||||
Noninterest revenue | $ | (13 | ) | $ | 23 | $ | 20 | $ | 8 | $ | 10 | NM | % | NM | % | $ | 38 | $ | 115 | (67 | )% | |||||||||||||||||||
Net interest income | 1,073 | 1,128 | 1,197 | 1,156 | 1,319 | (5 | ) | (19 | ) | 4,554 | 5,432 | (16 | ) | |||||||||||||||||||||||||||
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Total net revenue | 1,060 | 1,151 | 1,217 | 1,164 | 1,329 | (8 | ) | (20 | ) | 4,592 | 5,547 | (17 | ) | |||||||||||||||||||||||||||
Provision for credit losses | 646 | 899 | 954 | 1,076 | 2,337 | (28 | ) | (72 | ) | 3,575 | 8,231 | (57 | ) | |||||||||||||||||||||||||||
Noninterest expense | 432 | 363 | 371 | 355 | 413 | 19 | 5 | 1,521 | 1,627 | (7 | ) | |||||||||||||||||||||||||||||
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Income/(loss) before income tax expense/(benefit) | (18 | ) | (111 | ) | (108 | ) | (267 | ) | (1,421 | ) | 84 | 99 | (504 | ) | (4,311 | ) | 88 | |||||||||||||||||||||||
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Net income/(loss) | $ | (11 | ) | $ | (67 | ) | $ | (66 | ) | $ | (162 | ) | $ | (823 | ) | 84 | 99 | $ | (306 | ) | $ | (2,493 | ) | 88 | ||||||||||||||||
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Overhead ratio | 41 | % | 32 | % | 30 | % | 30 | % | 31 | % | 33 | % | 29 | % | ||||||||||||||||||||||||||
BUSINESS METRICS | ||||||||||||||||||||||||||||||||||||||||
LOANS EXCLUDING PCI LOANS (a) | ||||||||||||||||||||||||||||||||||||||||
End-of-period loans owned: | ||||||||||||||||||||||||||||||||||||||||
Home equity | $ | 77,800 | $ | 80,278 | $ | 82,751 | $ | 85,253 | $ | 88,385 | (3 | ) | (12 | ) | $ | 77,800 | $ | 88,385 | (12 | ) | ||||||||||||||||||||
Prime mortgage, including option ARMs | 44,284 | 45,439 | 46,994 | 48,552 | 49,768 | (3 | ) | (11 | ) | 44,284 | 49,768 | (11 | ) | |||||||||||||||||||||||||||
Subprime mortgage | 9,664 | 10,045 | 10,441 | 10,841 | 11,287 | (4 | ) | (14 | ) | 9,664 | 11,287 | (14 | ) | |||||||||||||||||||||||||||
Other | 718 | 741 | 767 | 801 | 857 | (3 | ) | (16 | ) | 718 | 857 | (16 | ) | |||||||||||||||||||||||||||
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Total end-of-period loans owned | $ | 132,466 | $ | 136,503 | $ | 140,953 | $ | 145,447 | $ | 150,297 | (3 | ) | (12 | ) | $ | 132,466 | $ | 150,297 | (12 | ) | ||||||||||||||||||||
Average loans owned: | ||||||||||||||||||||||||||||||||||||||||
Home equity | $ | 79,106 | $ | 81,568 | $ | 84,065 | $ | 86,907 | $ | 90,234 | (3 | ) | (12 | ) | $ | 82,886 | $ | 94,835 | (13 | ) | ||||||||||||||||||||
Prime mortgage, including option ARMs | 44,886 | 46,165 | 47,615 | 49,273 | 50,643 | (3 | ) | (11 | ) | 46,971 | 53,431 | (12 | ) | |||||||||||||||||||||||||||
Subprime mortgage | 9,880 | 10,268 | 10,667 | 11,086 | 11,789 | (4 | ) | (16 | ) | 10,471 | 12,729 | (18 | ) | |||||||||||||||||||||||||||
Other | 729 | 753 | 785 | 829 | 879 | (3 | ) | (17 | ) | 773 | 954 | (19 | ) | |||||||||||||||||||||||||||
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Total average loans owned | $ | 134,601 | $ | 138,754 | $ | 143,132 | $ | 148,095 | $ | 153,545 | (3 | ) | (12 | ) | $ | 141,101 | $ | 161,949 | (13 | ) | ||||||||||||||||||||
PCI LOANS (a) | ||||||||||||||||||||||||||||||||||||||||
End-of-period loans owned: | ||||||||||||||||||||||||||||||||||||||||
Home equity | $ | 22,697 | $ | 23,105 | $ | 23,535 | $ | 23,973 | $ | 24,459 | (2 | ) | (7 | ) | $ | 22,697 | $ | 24,459 | (7 | ) | ||||||||||||||||||||
Prime mortgage | 15,180 | 15,626 | 16,200 | 16,725 | 17,322 | (3 | ) | (12 | ) | 15,180 | 17,322 | (12 | ) | |||||||||||||||||||||||||||
Subprime mortgage | 4,976 | 5,072 | 5,187 | 5,276 | 5,398 | (2 | ) | (8 | ) | 4,976 | 5,398 | (8 | ) | |||||||||||||||||||||||||||
Option ARMs | 22,693 | 23,325 | 24,072 | 24,791 | 25,584 | (3 | ) | (11 | ) | 22,693 | 25,584 | (11 | ) | |||||||||||||||||||||||||||
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Total end-of-period loans owned | $ | 65,546 | $ | 67,128 | $ | 68,994 | $ | 70,765 | $ | 72,763 | (2 | ) | (10 | ) | $ | 65,546 | $ | 72,763 | (10 | ) | ||||||||||||||||||||
Average loans owned: | ||||||||||||||||||||||||||||||||||||||||
Home equity | $ | 22,872 | $ | 23,301 | $ | 23,727 | $ | 24,170 | $ | 24,685 | (2 | ) | (7 | ) | $ | 23,514 | $ | 25,455 | (8 | ) | ||||||||||||||||||||
Prime mortgage | 15,405 | 15,909 | 16,456 | 16,974 | 17,604 | (3 | ) | (12 | ) | 16,181 | 18,526 | (13 | ) | |||||||||||||||||||||||||||
Subprime mortgage | 5,024 | 5,128 | 5,231 | 5,301 | 5,439 | (2 | ) | (8 | ) | 5,170 | 5,671 | (9 | ) | |||||||||||||||||||||||||||
Option ARMs | 23,009 | 23,666 | 24,420 | 25,113 | 25,912 | (3 | ) | (11 | ) | 24,045 | 27,220 | (12 | ) | |||||||||||||||||||||||||||
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Total average loans owned | $ | 66,310 | $ | 68,004 | $ | 69,834 | $ | 71,558 | $ | 73,640 | (2 | ) | (10 | ) | $ | 68,910 | $ | 76,872 | (10 | ) | ||||||||||||||||||||
TOTAL REAL ESTATE PORTFOLIOS | ||||||||||||||||||||||||||||||||||||||||
End-of-period loans owned: | ||||||||||||||||||||||||||||||||||||||||
Home equity | $ | 100,497 | $ | 103,383 | $ | 106,286 | $ | 109,226 | $ | 112,844 | (3 | ) | (11 | ) | $ | 100,497 | $ | 112,844 | (11 | ) | ||||||||||||||||||||
Prime mortgage, including option ARMs | 82,157 | 84,390 | 87,266 | 90,068 | 92,674 | (3 | ) | (11 | ) | 82,157 | 92,674 | (11 | ) | |||||||||||||||||||||||||||
Subprime mortgage | 14,640 | 15,117 | 15,628 | 16,117 | 16,685 | (3 | ) | (12 | ) | 14,640 | 16,685 | (12 | ) | |||||||||||||||||||||||||||
Other | 718 | 741 | 767 | 801 | 857 | (3 | ) | (16 | ) | 718 | 857 | (16 | ) | |||||||||||||||||||||||||||
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Total end-of-period loans owned | $ | 198,012 | $ | 203,631 | $ | 209,947 | $ | 216,212 | $ | 223,060 | (3 | ) | (11 | ) | $ | 198,012 | $ | 223,060 | (11 | ) | ||||||||||||||||||||
Average loans owned: | ||||||||||||||||||||||||||||||||||||||||
Home equity | $ | 101,978 | $ | 104,869 | $ | 107,792 | $ | 111,077 | $ | 114,919 | (3 | ) | (11 | ) | $ | 106,400 | $ | 120,290 | (12 | ) | ||||||||||||||||||||
Prime mortgage, including option ARMs | 83,300 | 85,740 | 88,491 | 91,360 | 94,159 | (3 | ) | (12 | ) | 87,197 | 99,177 | (12 | ) | |||||||||||||||||||||||||||
Subprime mortgage | 14,904 | 15,396 | 15,898 | 16,387 | 17,228 | (3 | ) | (13 | ) | 15,641 | 18,400 | (15 | ) | |||||||||||||||||||||||||||
Other | 729 | 753 | 785 | 829 | 879 | (3 | ) | (17 | ) | 773 | 954 | (19 | ) | |||||||||||||||||||||||||||
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Total average loans owned | $ | 200,911 | $ | 206,758 | $ | 212,966 | $ | 219,653 | $ | 227,185 | (3 | ) | (12 | ) | $ | 210,011 | $ | 238,821 | (12 | ) | ||||||||||||||||||||
Average assets | 187,651 | 193,692 | 200,116 | 207,175 | 215,237 | (3 | ) | (13 | ) | 197,096 | 226,961 | (13 | ) | |||||||||||||||||||||||||||
Home equity origination volume | 277 | 294 | 307 | 249 | 280 | (6 | ) | (1 | ) | 1,127 | 1,203 | (6 | ) |
(a) | PCI loans represent loans acquired in the Washington Mutual transaction for which a deterioration in credit quality occurred between the origination date and JPMorgan Chase’s acquisition date. These loans were initially recorded at fair value and accrete interest income over the estimated lives of the loans as long as cash flows are reasonably estimable, even if the underlying loans are contractually past due. |
Page 18
JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
REAL ESTATE PORTFOLIOS (continued) | ||||||||||||||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||||||||||||||
Net charge-offs excluding PCI loans (a)(b) | ||||||||||||||||||||||||||||||||||||||||
Home equity | $ | 579 | $ | 581 | $ | 592 | $ | 720 | $ | 792 | — | % | (27 | )% | $ | 2,472 | $ | 3,444 | (28 | )% | ||||||||||||||||||||
Prime mortgage, including option ARMs | 151 | 172 | 198 | 161 | 558 | (12 | ) | (73 | ) | 682 | 1,573 | (57 | ) | |||||||||||||||||||||||||||
Subprime mortgage | 143 | 141 | 156 | 186 | 429 | 1 | (67 | ) | 626 | 1,374 | (54 | ) | ||||||||||||||||||||||||||||
Other | 3 | 5 | 8 | 9 | 10 | (40 | ) | (70 | ) | 25 | 59 | (58 | ) | |||||||||||||||||||||||||||
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Total net charge-offs | $ | 876 | $ | 899 | $ | 954 | $ | 1,076 | $ | 1,789 | (3 | ) | (51 | ) | $ | 3,805 | $ | 6,450 | (41 | ) | ||||||||||||||||||||
Net charge-off rate excluding PCI loans (a)(b) | ||||||||||||||||||||||||||||||||||||||||
Home equity | 2.90 | % | 2.82 | % | 2.83 | % | 3.36 | % | 3.48 | % | 2.98 | % | 3.63 | % | ||||||||||||||||||||||||||
Prime mortgage, including option ARMs | 1.33 | 1.48 | 1.67 | 1.32 | 4.37 | 1.45 | 2.95 | |||||||||||||||||||||||||||||||||
Subprime mortgage | 5.74 | 5.43 | 5.85 | 6.80 | 14.42 | 5.98 | 10.82 | |||||||||||||||||||||||||||||||||
Other | 1.63 | 2.83 | 4.01 | 4.56 | 4.41 | 3.23 | 5.90 | |||||||||||||||||||||||||||||||||
Total net charge-off rate excluding PCI loans | 2.58 | 2.57 | 2.67 | 2.95 | 4.62 | 2.70 | 3.98 | |||||||||||||||||||||||||||||||||
Net charge-off rate — reported | ||||||||||||||||||||||||||||||||||||||||
Home equity | 2.25 | % | 2.20 | % | 2.20 | % | 2.63 | % | 2.73 | % | 2.32 | % | 2.86 | % | ||||||||||||||||||||||||||
Prime mortgage, including option ARMs | 0.72 | 0.80 | 0.90 | 0.71 | 2.35 | 0.78 | 1.59 | |||||||||||||||||||||||||||||||||
Subprime mortgage | 3.81 | 3.63 | 3.94 | 4.60 | 9.90 | 4.00 | 7.47 | |||||||||||||||||||||||||||||||||
Other | 1.63 | 2.83 | 4.01 | 4.56 | 4.41 | 3.23 | 5.90 | |||||||||||||||||||||||||||||||||
Total net charge-off rate — reported | 1.73 | 1.72 | 1.80 | 1.99 | 3.12 | 1.81 | 2.70 | |||||||||||||||||||||||||||||||||
30+ day delinquency rate excluding PCI loans (c) | 5.69 | % | 5.80 | % | 5.98 | % | 6.22 | % | 6.45 | % | 5.69 | % | 6.45 | % | ||||||||||||||||||||||||||
Allowance for loan losses | $ | 14,429 | $ | 14,659 | $ | 14,659 | $ | 14,659 | $ | 14,659 | (2 | ) | (2 | ) | $ | 14,429 | $ | 14,659 | (2 | ) | ||||||||||||||||||||
Nonperforming assets (d) | 6,638 | 7,112 | 7,729 | 8,152 | 8,424 | (7 | ) | (21 | ) | 6,638 | 8,424 | (21 | ) | |||||||||||||||||||||||||||
Allowance for loan losses to ending loans retained | 7.29 | % | 7.20 | % | 6.98 | % | 6.78 | % | 6.57 | % | 7.29 | % | 6.57 | % | ||||||||||||||||||||||||||
Allowance for loan losses to ending loans retained excluding PCI loans (a) | 6.58 | 7.12 | 6.90 | 6.68 | 6.47 | 6.58 | 6.47 |
(a) | Excludes the impact of PCI loans that were acquired as part of the Washington Mutual transaction. These loans were accounted for at fair value on the acquisition date, which incorporated management’s estimate, as of that date, of credit losses over the remaining life of the portfolio. An allowance for loan losses of $5.7 billion at December 31, 2011 and $4.9 billion at September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010 was recorded for these loans; these amounts were also excluded from the applicable ratios. To date, no charge-offs have been recorded for these loans. |
(b) | Net charge-offs and net charge-off rates for the fourth quarter of 2010 include the effect of $632 million of charge-offs related to an adjustment of the estimated net realizable value of the collateral underlying delinquent residential home loans. Excluding this adjustment, net charge-offs for the fourth quarter of 2010 were $725 million, $240 million and $182 million for the home equity, prime mortgage including option ARMs and subprime mortgage portfolios, respectively. Net charge-off rates excluding this adjustment and excluding PCI loans were 3.19%, 1.88% and 6.12% for the home equity, prime mortgage including option ARMs and subprime mortgage portfolios, respectively. |
(c) | The delinquency rate for PCI loans was 23.30%, 24.44%, 26.20%, 27.36% and 28.20% at December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively. |
(d) | Excludes PCI loans that were acquired as part of the Washington Mutual transaction, which are accounted for on a pool basis. Since each pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, the past-due status of the pools, or that of the individual loans within the pools, is not meaningful. Because the Firm is recognizing interest income on each pool of loans, they are all considered to be performing. |
Page 19
JPMORGAN CHASE & CO. CARD SERVICES & AUTO FINANCIAL HIGHLIGHTS (in millions, except ratio data and headcount) | ||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
INCOME STATEMENT (a) | ||||||||||||||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||||||||||||||
Credit card income | $ | 1,053 | $ | 1,053 | $ | 1,123 | $ | 898 | $ | 928 | — | % | 13 | % | $ | 4,127 | $ | 3,514 | 17 | % | ||||||||||||||||||||
All other income | 232 | 201 | 183 | 149 | 177 | 15 | 31 | 765 | 764 | — | ||||||||||||||||||||||||||||||
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Noninterest revenue (b) | 1,285 | 1,254 | 1,306 | 1,047 | 1,105 | 2 | 16 | 4,892 | 4,278 | 14 | ||||||||||||||||||||||||||||||
Net interest income | 3,529 | 3,521 | 3,455 | 3,744 | 3,967 | — | (11 | ) | 14,249 | 16,194 | (12 | ) | ||||||||||||||||||||||||||||
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TOTAL NET REVENUE (c) | 4,814 | 4,775 | 4,761 | 4,791 | 5,072 | 1 | (5 | ) | 19,141 | 20,472 | (7 | ) | ||||||||||||||||||||||||||||
Provision for credit losses | 1,060 | 1,264 | 944 | 353 | 709 | (16 | ) | 50 | 3,621 | 8,570 | (58 | ) | ||||||||||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||||||
Compensation expense | 460 | 459 | 448 | 459 | 407 | — | 13 | 1,826 | 1,651 | 11 | ||||||||||||||||||||||||||||||
Noncompensation expense | 1,470 | 1,560 | 1,436 | 1,352 | 1,346 | (6 | ) | 9 | 5,818 | 5,060 | 15 | |||||||||||||||||||||||||||||
Amortization of intangibles | 95 | 96 | 104 | 106 | 114 | (1 | ) | (17 | ) | 401 | 467 | (14 | ) | |||||||||||||||||||||||||||
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TOTAL NONINTEREST EXPENSE (d) | 2,025 | 2,115 | 1,988 | 1,917 | 1,867 | (4 | ) | 8 | 8,045 | 7,178 | 12 | |||||||||||||||||||||||||||||
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Income before income tax expense | 1,729 | 1,396 | 1,829 | 2,521 | 2,496 | 24 | (31 | ) | 7,475 | 4,724 | 58 | |||||||||||||||||||||||||||||
Income tax expense | 678 | 547 | 719 | 987 | 948 | 24 | (28 | ) | 2,931 | 1,852 | 58 | |||||||||||||||||||||||||||||
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NET INCOME | $ | 1,051 | $ | 849 | $ | 1,110 | $ | 1,534 | $ | 1,548 | 24 | (32 | ) | $ | 4,544 | $ | 2,872 | 58 | ||||||||||||||||||||||
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FINANCIAL RATIOS (a) | ||||||||||||||||||||||||||||||||||||||||
ROE | 26 | % | 21 | % | 28 | % | 39 | % | 33 | % | 28 | % | 16 | % | ||||||||||||||||||||||||||
Overhead ratio | 42 | 44 | 42 | 40 | 37 | 42 | 35 | |||||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA | ||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 208,467 | $ | 199,473 | $ | 197,915 | $ | 201,179 | $ | 208,793 | 5 | — | $ | 208,467 | $ | 208,793 | — | |||||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||||
Credit Card | 132,277 | 127,135 | 125,523 | 128,803 | 137,676 | 4 | (4 | ) | 132,277 | 137,676 | (4 | ) | ||||||||||||||||||||||||||||
Auto | 47,426 | 46,659 | 46,796 | 47,411 | 48,367 | 2 | (2 | ) | 47,426 | 48,367 | (2 | ) | ||||||||||||||||||||||||||||
Student | 13,425 | 13,751 | 14,003 | 14,288 | 14,454 | (2 | ) | (7 | ) | 13,425 | 14,454 | (7 | ) | |||||||||||||||||||||||||||
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Total loans (e) | 193,128 | 187,545 | 186,322 | 190,502 | 200,497 | 3 | (4 | ) | 193,128 | 200,497 | (4 | ) | ||||||||||||||||||||||||||||
Equity | 16,000 | 16,000 | 16,000 | 16,000 | 18,400 | — | (13 | ) | 16,000 | 18,400 | (13 | ) | ||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA | ||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 202,226 | $ | 199,974 | $ | 198,044 | $ | 204,441 | $ | 205,286 | 1 | (1 | ) | $ | 201,162 | $ | 213,041 | (6 | ) | |||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||||
Credit Card | 128,619 | 126,536 | 125,038 | 132,537 | 135,585 | 2 | (5 | ) | 128,167 | 144,367 | (11 | ) | ||||||||||||||||||||||||||||
Auto | 46,947 | 46,549 | 46,966 | 47,690 | 48,347 | 1 | (3 | ) | 47,034 | 47,603 | (1 | ) | ||||||||||||||||||||||||||||
Student | 13,543 | 13,865 | 14,135 | 14,410 | 14,566 | (2 | ) | (7 | ) | 13,986 | 15,945 | (12 | ) | |||||||||||||||||||||||||||
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Total loans (f) | 189,109 | 186,950 | 186,139 | 194,637 | 198,498 | 1 | (5 | ) | 189,187 | 207,915 | (9 | ) | ||||||||||||||||||||||||||||
Equity | 16,000 | 16,000 | 16,000 | 16,000 | 18,400 | — | (13 | ) | 16,000 | 18,400 | (13 | ) | ||||||||||||||||||||||||||||
Headcount (g) | 27,585 | 27,554 | 26,874 | 26,777 | 25,733 | — | 7 | 27,585 | 25,733 | 7 |
(a) | Effective January 1, 2011, the commercial card business that was previously in TSS was transferred to Card. There is no material impact on the financial data; prior-year periods were not revised. |
(b) | Includes commercial card noninterest revenue of $67 million, $76 million, $75 million and $72 million for the three months ended December 31, 2011, September 30, 2011, June 30, 2011 and March 31, 2011, respectively, and $290 million for full year 2011. |
(c) | Total net revenue included tax-equivalent adjustments associated with tax-exempt loans to certain qualified entities of $1 million for each of the three months ended June 30, 2011, March 31, 2011 and December 31, 2010, respectively, and $2 million and $7 million for full year 2011 and 2010, respectively. |
(d) | Includes commercial card noninterest expense of $78 million, $76 million, $69 million and $75 million for the three months ended December 31, 2011, September 30, 2011, June 30, 2011 and March 31, 2011, respectively, and $298 million for full year 2011. |
(e) | Total period-end loans include loans held-for-sale of $102 million, $94 million, $4.0 billion and $2.2 billion at December 31, 2011, September 30, 2011, March 31, 2011 and December 31, 2010, respectively. |
(f) | Total average loans include loans held-for-sale of $97 million, $1 million, $276 million, $3.0 billion and $593 million for the three months ended December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively, and $833 million and $1.3 billion for full year 2011 and 2010, respectively. |
(g) | Headcount includes 1,274 employees related to the transfer of the commercial card business from TSS to Card in the first quarter of 2011. |
Page 20
JPMORGAN CHASE & CO. CARD SERVICES & AUTO FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS (a) | ||||||||||||||||||||||||||||||||||||||||
Net charge-offs: | ||||||||||||||||||||||||||||||||||||||||
Credit Card | $ | 1,390 | $ | 1,499 | $ | 1,810 | $ | 2,226 | $ | 2,671 | (7 | )% | (48 | )% | $ | 6,925 | $ | 14,037 | (51 | )% | ||||||||||||||||||||
Auto | 44 | 42 | 19 | 47 | 71 | 5 | (38 | ) | 152 | 298 | (49 | ) | ||||||||||||||||||||||||||||
Student | 126 | 93 | 135 | 80 | 118 | 35 | 7 | 434 | 387 | 12 | ||||||||||||||||||||||||||||||
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Total net charge-offs | 1,560 | 1,634 | 1,964 | 2,353 | 2,860 | (5 | ) | (45 | ) | 7,511 | 14,722 | (49 | ) | |||||||||||||||||||||||||||
Net charge-off rate: | ||||||||||||||||||||||||||||||||||||||||
Credit Card (b) | 4.29 | % | 4.70 | % | 5.82 | % | 6.97 | % | 7.85 | % | 5.44 | % | 9.73 | % | ||||||||||||||||||||||||||
Auto | 0.37 | 0.36 | 0.16 | 0.40 | 0.58 | 0.32 | 0.63 | |||||||||||||||||||||||||||||||||
Student (c) | 3.69 | 2.66 | 3.83 | 2.25 | 3.22 | 3.10 | 2.61 | |||||||||||||||||||||||||||||||||
Total net charge-off rate | 3.27 | 3.47 | 4.24 | 4.98 | 5.73 | 3.99 | 7.12 | |||||||||||||||||||||||||||||||||
Delinquency rates | ||||||||||||||||||||||||||||||||||||||||
30+ day delinquency rate: | ||||||||||||||||||||||||||||||||||||||||
Credit Card (d) | 2.81 | 2.90 | 2.98 | 3.57 | 4.14 | 2.81 | 4.14 | |||||||||||||||||||||||||||||||||
Auto | 1.13 | 1.01 | 0.98 | 0.97 | 1.22 | 1.13 | 1.22 | |||||||||||||||||||||||||||||||||
Student (e) | 1.78 | 1.93 | 1.70 | 2.01 | 1.53 | 1.78 | 1.53 | |||||||||||||||||||||||||||||||||
Total 30+ day delinquency rate | 2.32 | 2.36 | 2.38 | 2.79 | 3.23 | 2.32 | 3.23 | |||||||||||||||||||||||||||||||||
90+ day delinquency rate — Credit Card (d) | 1.44 | 1.43 | 1.55 | 1.93 | 2.25 | 1.44 | 2.25 | |||||||||||||||||||||||||||||||||
Nonperforming assets (f) | $ | 228 | $ | 232 | $ | 233 | $ | 275 | $ | 269 | (2 | ) | (15 | ) | $ | 228 | $ | 269 | (15 | ) | ||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||||||||||
Credit Card | 6,999 | 7,528 | 8,042 | 9,041 | 11,034 | (7 | ) | (37 | ) | 6,999 | 11,034 | (37 | ) | |||||||||||||||||||||||||||
Auto and Student | 1,010 | 1,009 | 879 | 899 | 899 | — | 12 | 1,010 | 899 | 12 | ||||||||||||||||||||||||||||||
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Total allowance for loan losses | 8,009 | 8,537 | 8,921 | 9,940 | 11,933 | (6 | ) | (33 | ) | 8,009 | 11,933 | (33 | ) | |||||||||||||||||||||||||||
Allowance for loan losses to period-end loans: | ||||||||||||||||||||||||||||||||||||||||
Credit Card (d) | 5.30 | % | 5.93 | % | 6.41 | % | 7.24 | % | 8.14 | % | 5.30 | % | 8.14 | % | ||||||||||||||||||||||||||
Auto and Student | 1.66 | 1.67 | 1.45 | 1.46 | 1.43 | 1.66 | 1.43 | |||||||||||||||||||||||||||||||||
Total allowance for loan losses to period-end loans | 4.15 | 4.55 | 4.79 | 5.33 | 6.02 | 4.15 | 6.02 | |||||||||||||||||||||||||||||||||
BUSINESS METRICS | ||||||||||||||||||||||||||||||||||||||||
Credit Card, excluding Commercial Card (a) | ||||||||||||||||||||||||||||||||||||||||
Sales volume (in billions) | $ | 93.4 | $ | 87.3 | $ | 85.5 | $ | 77.5 | $ | 85.9 | 7 | 9 | $ | 343.7 | $ | 313.0 | 10 | |||||||||||||||||||||||
New accounts opened | 2.2 | 2.0 | 2.0 | 2.6 | 3.4 | 10 | (35 | ) | 8.8 | 11.3 | (22 | ) | ||||||||||||||||||||||||||||
Open accounts (g) | 65.2 | 64.3 | 65.4 | 91.9 | 90.7 | 1 | (28 | ) | 65.2 | 90.7 | (28 | ) | ||||||||||||||||||||||||||||
Merchant Services | ||||||||||||||||||||||||||||||||||||||||
Bank card volume (in billions) | $ | 152.6 | $ | 138.1 | $ | 137.3 | $ | 125.7 | $ | 127.2 | 10 | 20 | $ | 553.7 | $ | 469.3 | 18 | |||||||||||||||||||||||
Total transactions (in billions) | 6.8 | 6.1 | 5.9 | 5.6 | 5.6 | 11 | 21 | 24.4 | 20.5 | 19 | ||||||||||||||||||||||||||||||
Auto and Student | ||||||||||||||||||||||||||||||||||||||||
Origination volume (in billions) | ||||||||||||||||||||||||||||||||||||||||
Auto | $ | 4.9 | $ | 5.9 | $ | 5.4 | $ | 4.8 | $ | 4.8 | (17 | ) | 2 | $ | 21.0 | $ | 23.0 | (9 | ) | |||||||||||||||||||||
Student | 0.1 | 0.1 | — | 0.1 | — | — | NM | 0.3 | 1.9 | (84 | ) |
(a) | Effective January 1, 2011, the commercial card business that was previously in TSS was transferred to Card. There is no material impact on the financial data; prior-year periods were not revised. The commercial card portfolio is excluded from business metrics and supplemental information where noted. |
(b) | Average loans include loans held-for-sale of $97 million, $1 million, $276 million, $3.0 billion and $586 million for the three months ended December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively, and $833 million and $148 million for full year 2011 and 2010, respectively. These amounts are excluded when calculating the net charge-off rate. |
(c) | Average loans included loans held-for-sale of $7 million for the three months ended December 31, 2010, and $1.1 billion for full year 2010. These amounts are excluded when calculating the net charge-off rate. |
(d) | Period-end loans include loans held-for-sale of $102 million, $94 million, $4.0 billion and $2.2 billion at December 31, 2011, September 30, 2011, March 31, 2011 and December 31, 2010, respectively. No allowance for loan losses was recorded for these loans. Loans held-for-sale are excluded when calculating the allowance for loan losses to period-end loans and delinquency rates. |
(e) | Excludes student loans insured by U.S. government agencies under the Federal Family Education Loan Program (“FFELP”) of $989 million, $995 million, $968 million, $1.0 billion and $1.1 billion at December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively, that are 30 or more days past due. These amounts are excluded as reimbursement of insured amounts is proceeding normally. |
(f) | Nonperforming assets exclude student loans insured by U.S. government agencies under the FFELP of $551 million, $567 million, $558 million, $615 million and $625 million at December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively, that are 90 or more days past due. These amounts are excluded as reimbursement of insured amounts is proceeding normally. |
(g) | Reflects the impact of portfolio sales in the second quarter of 2011. |
Page 21
JPMORGAN CHASE & CO. CARD SERVICES & AUTO FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data) | ||
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION (a)(b) | ||||||||||||||||||||||||||||||||||||||||
Card Services, excluding Washington Mutual portfolio | ||||||||||||||||||||||||||||||||||||||||
Loans (period-end) | $ | 121,224 | $ | 115,766 | $ | 113,766 | $ | 116,395 | $ | 123,943 | 5 | % | (2 | )% | $ | 121,224 | $ | 123,943 | (2 | )% | ||||||||||||||||||||
Average loans | 117,447 | 114,940 | 112,984 | 119,411 | 121,493 | 2 | (3 | ) | 116,186 | 128,312 | (9 | ) | ||||||||||||||||||||||||||||
Net interest income (c) | 8.51 | % | 8.61 | % | 8.60 | % | 9.09 | % | 9.16 | % | 8.70 | % | 8.86 | % | ||||||||||||||||||||||||||
Net revenue (c) | 11.67 | 11.73 | 12.01 | 11.57 | 11.78 | 11.74 | 11.22 | |||||||||||||||||||||||||||||||||
Risk adjusted margin (c)(d) | 9.61 | 8.93 | 8.71 | 10.28 | 10.26 | 9.39 | 5.81 | |||||||||||||||||||||||||||||||||
Net charge-off rate (e) | 3.88 | 4.29 | 5.22 | 6.13 | 7.08 | 4.88 | 8.72 | |||||||||||||||||||||||||||||||||
30+ day delinquency rate (f) | 2.53 | 2.62 | 2.71 | 3.22 | 3.66 | 2.53 | 3.66 | |||||||||||||||||||||||||||||||||
90+ day delinquency rate (f) | 1.29 | 1.28 | 1.41 | 1.71 | 1.98 | 1.29 | 1.98 | |||||||||||||||||||||||||||||||||
Card Services, excluding Washington Mutual and commercial card portfolios | ||||||||||||||||||||||||||||||||||||||||
Loans (period-end) | $ | 119,966 | $ | 114,207 | $ | 112,366 | $ | 115,016 | $ | 123,943 | 5 | (3 | ) | $ | 119,966 | $ | 123,943 | (3 | ) | |||||||||||||||||||||
Average loans | 116,027 | 113,541 | 111,641 | 118,145 | 121,493 | 2 | (4 | ) | 114,828 | 128,312 | (11 | ) | ||||||||||||||||||||||||||||
Net interest income (c) | 8.67 | % | 8.79 | % | 8.77 | % | 9.25 | % | 9.16 | % | 8.87 | % | 8.86 | % | ||||||||||||||||||||||||||
Net revenue (c) | 11.64 | 11.68 | 11.95 | 11.51 | 11.78 | 11.69 | 11.22 | |||||||||||||||||||||||||||||||||
Risk adjusted margin (c)(d) | 9.56 | 8.84 | 8.61 | 10.21 | 10.26 | 9.32 | 5.81 | |||||||||||||||||||||||||||||||||
Net charge-off rate (e) | 3.93 | 4.34 | 5.28 | 6.20 | 7.08 | 4.93 | 8.72 | |||||||||||||||||||||||||||||||||
30+ day delinquency rate (f) | 2.54 | 2.64 | 2.73 | 3.25 | 3.66 | 2.54 | 3.66 | |||||||||||||||||||||||||||||||||
90+ day delinquency rate (f) | 1.30 | 1.30 | 1.42 | 1.73 | 1.98 | 1.30 | 1.98 |
(a) | Effective January 1, 2011, the commercial card business that was previously in TSS was transferred to Card. There is no material impact on the financial data; prior-year periods were not revised. The commercial card portfolio is excluded from business metrics and supplemental information where noted. |
(b) | Supplemental information is provided for Card Services, excluding Washington Mutual and commercial card portfolios and including loans held-for-sale, which are non-GAAP financial measures, to provide more meaningful measures that enable comparability with prior periods. |
(c) | As a percentage of average loans. |
(d) | Represents total net revenue less provision for credit losses. |
(e) | Average loans include loans held-for-sale of $97 million, $1 million, $276 million, $3.0 billion and $586 million for the three months ended December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively, and $833 million and $148 million for full year 2011 and 2010, respectively. These amounts are included when calculating the net charge-off rate. |
(f) | Period-end loans include loans held-for-sale of $102 million, $94 million, $4.0 billion and $2.2 billion at December 31, 2011, September 30, 2011, March 31, 2011 and December 31, 2010, respectively. These amounts are included when calculating the delinquency rates. |
Page 22
JPMORGAN CHASE & CO. COMMERCIAL BANKING FINANCIAL HIGHLIGHTS (in millions, except ratio data) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
INCOME STATEMENT | ||||||||||||||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||||||||||||||
Lending- and deposit-related fees | $ | 267 | $ | 269 | $ | 281 | $ | 264 | $ | 273 | (1 | )% | (2 | )% | $ | 1,081 | $ | 1,099 | (2 | )% | ||||||||||||||||||||
Asset management, administration and commissions | 32 | 35 | 34 | 35 | 35 | (9 | ) | (9 | ) | 136 | 144 | (6 | ) | |||||||||||||||||||||||||||
All other income (a) | 272 | 220 | 283 | 203 | 299 | 24 | (9 | ) | 978 | 957 | 2 | |||||||||||||||||||||||||||||
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Noninterest revenue | 571 | 524 | 598 | 502 | 607 | 9 | (6 | ) | 2,195 | 2,200 | — | |||||||||||||||||||||||||||||
Net interest income | 1,116 | 1,064 | 1,029 | 1,014 | 1,004 | 5 | 11 | 4,223 | 3,840 | 10 | ||||||||||||||||||||||||||||||
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TOTAL NET REVENUE (b) | 1,687 | 1,588 | 1,627 | 1,516 | 1,611 | 6 | 5 | 6,418 | 6,040 | 6 | ||||||||||||||||||||||||||||||
Provision for credit losses | 40 | 67 | 54 | 47 | 152 | (40 | ) | (74 | ) | 208 | 297 | (30 | ) | |||||||||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||||||
Compensation expense | 215 | 229 | 219 | 223 | 208 | (6 | ) | 3 | 886 | 820 | 8 | |||||||||||||||||||||||||||||
Noncompensation expense | 356 | 337 | 336 | 332 | 342 | 6 | 4 | 1,361 | 1,344 | 1 | ||||||||||||||||||||||||||||||
Amortization of intangibles | 8 | 7 | 8 | 8 | 8 | 14 | — | 31 | 35 | (11 | ) | |||||||||||||||||||||||||||||
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TOTAL NONINTEREST EXPENSE | 579 | 573 | 563 | 563 | 558 | 1 | 4 | 2,278 | 2,199 | 4 | ||||||||||||||||||||||||||||||
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Income before income tax expense | 1,068 | 948 | 1,010 | 906 | 901 | 13 | 19 | 3,932 | 3,544 | 11 | ||||||||||||||||||||||||||||||
Income tax expense | 425 | 377 | 403 | 360 | 371 | 13 | 15 | 1,565 | 1,460 | 7 | ||||||||||||||||||||||||||||||
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NET INCOME | $ | 643 | $ | 571 | $ | 607 | $ | 546 | $ | 530 | 13 | 21 | $ | 2,367 | $ | 2,084 | 14 | |||||||||||||||||||||||
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Revenue by product: | ||||||||||||||||||||||||||||||||||||||||
Lending (c) | $ | 881 | $ | 857 | $ | 880 | $ | 837 | $ | 749 | 3 | 18 | $ | 3,455 | $ | 2,749 | 26 | |||||||||||||||||||||||
Treasury services (c) | 600 | 572 | 556 | 542 | 659 | 5 | (9 | ) | 2,270 | 2,632 | (14 | ) | ||||||||||||||||||||||||||||
Investment banking | 120 | 116 | 152 | 110 | 126 | 3 | (5 | ) | 498 | 466 | 7 | |||||||||||||||||||||||||||||
Other | 86 | 43 | 39 | 27 | 77 | 100 | 12 | 195 | 193 | 1 | ||||||||||||||||||||||||||||||
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Total Commercial Banking revenue | $ | 1,687 | $ | 1,588 | $ | 1,627 | $ | 1,516 | $ | 1,611 | 6 | 5 | $ | 6,418 | $ | 6,040 | 6 | |||||||||||||||||||||||
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IB revenue, gross (d) | $ | 350 | $ | 320 | $ | 442 | $ | 309 | $ | 347 | 9 | 1 | $ | 1,421 | $ | 1,335 | 6 | |||||||||||||||||||||||
Revenue by client segment: | ||||||||||||||||||||||||||||||||||||||||
Middle Market Banking | $ | 810 | $ | 791 | $ | 789 | $ | 755 | $ | 781 | 2 | 4 | $ | 3,145 | $ | 3,060 | 3 | |||||||||||||||||||||||
Commercial Term Lending | 299 | 297 | 286 | 286 | 301 | 1 | (1 | ) | 1,168 | 1,023 | 14 | |||||||||||||||||||||||||||||
Corporate Client Banking (e) | 326 | 306 | 339 | 290 | 302 | 7 | 8 | 1,261 | 1,154 | 9 | ||||||||||||||||||||||||||||||
Real Estate Banking | 115 | 104 | 109 | 88 | 117 | 11 | (2 | ) | 416 | 460 | (10 | ) | ||||||||||||||||||||||||||||
Other | 137 | 90 | 104 | 97 | 110 | 52 | 25 | 428 | 343 | 25 | ||||||||||||||||||||||||||||||
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Total Commercial Banking revenue | $ | 1,687 | $ | 1,588 | $ | 1,627 | $ | 1,516 | $ | 1,611 | 6 | 5 | $ | 6,418 | $ | 6,040 | 6 | |||||||||||||||||||||||
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| |||||||||||||||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||||||||||||||||||||||
ROE | 32 | % | 28 | % | 30 | % | 28 | % | 26 | % | 30 | % | 26 | % | ||||||||||||||||||||||||||
Overhead ratio | 34 | 36 | 35 | 37 | 35 | 35 | 36 |
(a) | Commercial Banking (“CB”) client revenue from investment banking products and commercial card transactions is included in all other income. |
(b) | Total net revenue included tax-equivalent adjustments from income tax credits related to equity investments in designated community development entities that provide loans to qualified businesses in low-income communities as well as tax-exempt income from municipal bond activity of $123 million, $90 million, $67 million, $65 million and $85 million for the three months ended December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively, and $345 million and $238 million for full year 2011 and 2010, respectively. |
(c) | Effective January 1, 2011, product revenue from commercial card and standby letters of credit transactions was included in lending. For the three months ended December 31, 2011, September 30, 2011, June 30, 2011 and March 31, 2011, the impact of the change was $108 million, $109 million, $114 million and $107 million, respectively, and $438 million for full year 2011. In prior-year periods, it was reported in treasury services. |
(d) | Represents the total revenue related to investment banking products sold to CB clients. |
(e) | Corporate Client Banking was known as Mid-Corporate Banking prior to January 1, 2011. |
Page 23
JPMORGAN CHASE & CO. COMMERCIAL BANKING FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except headcount and ratio data) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (period-end) | ||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 158,040 | $ | 151,095 | $ | 148,662 | $ | 140,706 | $ | 142,646 | 5 | % | 11 | % | $ | 158,040 | $ | 142,646 | 11 | % | ||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||||
Loans retained | 111,162 | 106,834 | 102,122 | 99,334 | 97,900 | 4 | 14 | 111,162 | 97,900 | 14 | ||||||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value | 840 | 584 | 557 | 835 | 1,018 | 44 | (17 | ) | 840 | 1,018 | (17 | ) | ||||||||||||||||||||||||||||
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Total loans | 112,002 | 107,418 | 102,679 | 100,169 | 98,918 | 4 | 13 | 112,002 | 98,918 | 13 | ||||||||||||||||||||||||||||||
Equity | 8,000 | 8,000 | 8,000 | 8,000 | 8,000 | — | — | 8,000 | 8,000 | — | ||||||||||||||||||||||||||||||
Period-end loans by client segment: | ||||||||||||||||||||||||||||||||||||||||
Middle Market Banking | $ | 44,437 | $ | 42,365 | $ | 40,530 | $ | 38,618 | $ | 37,942 | 5 | 17 | $ | 44,437 | $ | 37,942 | 17 | |||||||||||||||||||||||
Commercial Term Lending | 38,583 | 38,539 | 38,012 | 37,677 | 37,928 | — | 2 | 38,583 | 37,928 | 2 | ||||||||||||||||||||||||||||||
Corporate Client Banking (a) | 16,747 | 15,100 | 13,097 | 12,705 | 11,678 | 11 | 43 | 16,747 | 11,678 | 43 | ||||||||||||||||||||||||||||||
Real Estate Banking | 8,211 | 7,470 | 7,409 | 7,535 | 7,591 | 10 | 8 | 8,211 | 7,591 | 8 | ||||||||||||||||||||||||||||||
Other | 4,024 | 3,944 | 3,631 | 3,634 | 3,779 | 2 | 6 | 4,024 | 3,779 | 6 | ||||||||||||||||||||||||||||||
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Total Commercial Banking loans | $ | 112,002 | $ | 107,418 | $ | 102,679 | $ | 100,169 | $ | 98,918 | 4 | 13 | $ | 112,002 | $ | 98,918 | 13 | |||||||||||||||||||||||
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SELECTED BALANCE SHEET DATA (average) | ||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 155,611 | $ | 145,195 | $ | 143,560 | $ | 140,400 | $ | 138,041 | 7 | 13 | $ | 146,230 | $ | 133,654 | 9 | |||||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||||
Loans retained | 109,328 | 104,705 | 100,857 | 98,829 | 97,823 | 4 | 12 | 103,462 | 96,584 | 7 | ||||||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value | 580 | 632 | 1,015 | 756 | 612 | (8 | ) | (5 | ) | 745 | 422 | 77 | ||||||||||||||||||||||||||||
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Total loans | 109,908 | 105,337 | 101,872 | 99,585 | 98,435 | 4 | 12 | 104,207 | 97,006 | 7 | ||||||||||||||||||||||||||||||
Liability balances | 199,138 | 180,275 | 162,769 | 156,200 | 147,534 | 10 | 35 | 174,729 | 138,862 | 26 | ||||||||||||||||||||||||||||||
Equity | 8,000 | 8,000 | 8,000 | 8,000 | 8,000 | — | — | 8,000 | 8,000 | — | ||||||||||||||||||||||||||||||
Average loans by client segment: | ||||||||||||||||||||||||||||||||||||||||
Middle Market Banking | $ | 43,215 | $ | 41,540 | $ | 40,012 | $ | 38,207 | $ | 36,561 | 4 | 18 | $ | 40,759 | $ | 35,059 | 16 | |||||||||||||||||||||||
Commercial Term Lending | 38,679 | 38,198 | 37,729 | 37,810 | 38,358 | 1 | 1 | 38,107 | 36,978 | 3 | ||||||||||||||||||||||||||||||
Corporate Client Banking (a) | 16,116 | 14,373 | 13,062 | 12,374 | 11,771 | 12 | 37 | 13,993 | 11,926 | 17 | ||||||||||||||||||||||||||||||
Real Estate Banking | 7,936 | 7,465 | 7,467 | 7,607 | 8,169 | 6 | (3 | ) | 7,619 | 9,344 | (18 | ) | ||||||||||||||||||||||||||||
Other | 3,962 | 3,761 | 3,602 | 3,587 | 3,576 | 5 | 11 | 3,729 | 3,699 | 1 | ||||||||||||||||||||||||||||||
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Total Commercial Banking loans | $ | 109,908 | $ | 105,337 | $ | 101,872 | $ | 99,585 | $ | 98,435 | 4 | 12 | $ | 104,207 | $ | 97,006 | 7 | |||||||||||||||||||||||
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Headcount | 5,520 | 5,417 | 5,140 | 4,941 | 4,881 | 2 | 13 | 5,520 | 4,881 | 13 | ||||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||||||||||||||
Net charge-offs | $ | 99 | $ | 17 | $ | 40 | $ | 31 | $ | 286 | 482 | (65 | ) | $ | 187 | $ | 909 | (79 | ) | |||||||||||||||||||||
Nonperforming assets: | ||||||||||||||||||||||||||||||||||||||||
Nonaccrual loans: | ||||||||||||||||||||||||||||||||||||||||
Nonaccrual loans retained (b) | 1,036 | 1,417 | 1,613 | 1,925 | 1,964 | (27 | ) | (47 | ) | 1,036 | 1,964 | (47 | ) | |||||||||||||||||||||||||||
Nonaccrual loans held-for-sale and loans at fair value | 17 | 26 | 21 | 30 | 36 | (35 | ) | (53 | ) | 17 | 36 | (53 | ) | |||||||||||||||||||||||||||
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Total nonaccrual loans | 1,053 | 1,443 | 1,634 | 1,955 | 2,000 | (27 | ) | (47 | ) | 1,053 | 2,000 | (47 | ) | |||||||||||||||||||||||||||
Assets acquired in loan satisfactions | 85 | 168 | 197 | 179 | 197 | (49 | ) | (57 | ) | 85 | 197 | (57 | ) | |||||||||||||||||||||||||||
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Total nonperforming assets | 1,138 | 1,611 | 1,831 | 2,134 | 2,197 | (29 | ) | (48 | ) | 1,138 | 2,197 | (48 | ) | |||||||||||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses | 2,603 | 2,671 | 2,614 | 2,577 | 2,552 | (3 | ) | 2 | 2,603 | 2,552 | 2 | |||||||||||||||||||||||||||||
Allowance for lending-related commitments | 189 | 181 | 187 | 206 | 209 | 4 | (10 | ) | 189 | 209 | (10 | ) | ||||||||||||||||||||||||||||
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Total allowance for credit losses | 2,792 | 2,852 | 2,801 | 2,783 | 2,761 | (2 | ) | 1 | 2,792 | 2,761 | 1 | |||||||||||||||||||||||||||||
Net charge-off rate (c) | 0.36 | % | 0.06 | % | 0.16 | % | 0.13 | % | 1.16 | % | 0.18 | % | 0.94 | % | ||||||||||||||||||||||||||
Allowance for loan losses to period-end loans retained (c) | 2.34 | 2.50 | 2.56 | 2.59 | 2.61 | 2.34 | 2.61 | |||||||||||||||||||||||||||||||||
Allowance for loan losses to nonaccrual loans retained (b)(c) | 251 | 188 | 162 | 134 | 130 | 251 | 130 | |||||||||||||||||||||||||||||||||
Nonaccrual loans to total period-end loans | 0.94 | 1.34 | 1.59 | 1.95 | 2.02 | 0.94 | 2.02 |
(a) | Corporate Client Banking was known as Mid-Corporate Banking prior to January 1, 2011. |
(b) | Allowance for loan losses of $176 million, $257 million, $289 million, $360 million and $340 million was held against nonaccrual loans retained at December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively. |
(c) | Loans held-for-sale and loans at fair value were excluded when calculating the allowance coverage ratios and net charge-off rate. |
Page 24
JPMORGAN CHASE & CO. TREASURY & SECURITIES SERVICES FINANCIAL HIGHLIGHTS (in millions, except ratio data) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
INCOME STATEMENT | ||||||||||||||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||||||||||||||
Lending- and deposit-related fees | $ | 313 | $ | 310 | $ | 314 | $ | 303 | $ | 314 | 1 | % | — | % | $ | 1,240 | $ | 1,256 | (1 | ) % | ||||||||||||||||||||
Asset management, administration and commissions | 671 | 656 | 726 | 695 | 689 | 2 | (3 | ) | 2,748 | 2,697 | 2 | |||||||||||||||||||||||||||||
All other income | 133 | 141 | 143 | 139 | 209 | (6 | ) | (36 | ) | 556 | 804 | (31 | ) | |||||||||||||||||||||||||||
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Noninterest revenue | 1,117 | 1,107 | 1,183 | 1,137 | 1,212 | 1 | (8 | ) | 4,544 | 4,757 | (4 | ) | ||||||||||||||||||||||||||||
Net interest income | 905 | 801 | 749 | 703 | 701 | 13 | 29 | 3,158 | 2,624 | 20 | ||||||||||||||||||||||||||||||
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TOTAL NET REVENUE | 2,022 | 1,908 | 1,932 | 1,840 | 1,913 | 6 | 6 | 7,702 | 7,381 | 4 | ||||||||||||||||||||||||||||||
Provision for credit losses | 19 | (20 | ) | (2 | ) | 4 | 10 | NM | 90 | 1 | (47 | ) | NM | |||||||||||||||||||||||||||
Credit allocation income/(expense) (a) | (60 | ) | 9 | 32 | 27 | (30 | ) | NM | (100 | ) | 8 | (121 | ) | NM | ||||||||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||||||
Compensation expense | 672 | 718 | 719 | 715 | 679 | (6 | ) | (1 | ) | 2,824 | 2,734 | 3 | ||||||||||||||||||||||||||||
Noncompensation expense | 877 | 728 | 719 | 647 | 763 | 20 | 15 | 2,971 | 2,790 | 6 | ||||||||||||||||||||||||||||||
Amortization of intangibles | 14 | 24 | 15 | 15 | 28 | (42 | ) | (50 | ) | 68 | 80 | (15 | ) | |||||||||||||||||||||||||||
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TOTAL NONINTEREST EXPENSE | 1,563 | 1,470 | 1,453 | 1,377 | 1,470 | 6 | 6 | 5,863 | 5,604 | 5 | ||||||||||||||||||||||||||||||
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Income before income tax expense | 380 | 467 | 513 | 486 | 403 | (19 | ) | (6 | ) | 1,846 | 1,703 | 8 | ||||||||||||||||||||||||||||
Income tax expense | 130 | 162 | 180 | 170 | 146 | (20 | ) | (11 | ) | 642 | 624 | 3 | ||||||||||||||||||||||||||||
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NET INCOME | $ | 250 | $ | 305 | $ | 333 | $ | 316 | $ | 257 | (18 | ) | (3 | ) | $ | 1,204 | $ | 1,079 | 12 | |||||||||||||||||||||
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FINANCIAL RATIOS | ||||||||||||||||||||||||||||||||||||||||
ROE | 14 | % | 17 | % | 19 | % | 18 | % | 16 | % | 17 | % | 17 | % | ||||||||||||||||||||||||||
Pretax margin ratio | 19 | 24 | 27 | 26 | 21 | 24 | 23 | |||||||||||||||||||||||||||||||||
Overhead ratio | 77 | 77 | 75 | 75 | 77 | 76 | 76 | |||||||||||||||||||||||||||||||||
Pre-provision profit ratio (b) | 23 | 23 | 25 | 25 | 23 | 24 | 24 | |||||||||||||||||||||||||||||||||
REVENUE BY BUSINESS | ||||||||||||||||||||||||||||||||||||||||
Worldwide Securities Services (“WSS”): | ||||||||||||||||||||||||||||||||||||||||
Investor Services | $ | 752 | $ | 740 | $ | 782 | $ | 745 | $ | 740 | 2 | 2 | $ | 3,019 | $ | 2,869 | 5 | |||||||||||||||||||||||
Clearance, Collateral Mgmt & Depositary Receipts | 219 | 199 | 220 | 204 | 220 | 10 | — | 842 | 814 | 3 | ||||||||||||||||||||||||||||||
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Total WSS Revenue | 971 | 939 | 1,002 | 949 | 960 | 3 | 1 | 3,861 | 3,683 | 5 | ||||||||||||||||||||||||||||||
Treasury Services (“TS”): | ||||||||||||||||||||||||||||||||||||||||
Transaction Services | $ | 874 | $ | 816 | $ | 785 | $ | 765 | $ | 831 | 7 | 5 | $ | 3,240 | $ | 3,233 | — | |||||||||||||||||||||||
Trade Finance | 177 | 153 | 145 | 126 | 122 | 16 | 45 | 601 | 465 | 29 | ||||||||||||||||||||||||||||||
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Total TS Revenue | 1,051 | 969 | 930 | 891 | 953 | 8 | 10 | 3,841 | 3,698 | 4 |
(a) | IB manages traditional credit exposures related to GCB on behalf of IB and TSS. Effective January 1, 2011, IB and TSS share the economics related to the Firm’s GCB clients. Included within this allocation are net revenue, provision for credit losses, as well as expenses. The prior-year periods reflected a reimbursement to IB for a portion of the total costs of managing the credit portfolio. IB recognizes this credit allocation as a component of all other income. |
(b) | For more information on this ratio, see Glossary of Terms on page 50. |
Page 25
JPMORGAN CHASE & CO. TREASURY & SECURITIES SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except headcount and ratio data, and where otherwise noted) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (period-end) | ||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 68,665 | $ | 62,364 | $ | 55,950 | $ | 50,614 | $ | 45,481 | 10 | % | 51 | % | $ | 68,665 | $ | 45,481 | 51 | % | ||||||||||||||||||||
Loans (a) | 42,992 | 36,389 | 34,034 | 31,020 | 27,168 | 18 | 58 | 42,992 | 27,168 | 58 | ||||||||||||||||||||||||||||||
Equity | 7,000 | 7,000 | 7,000 | 7,000 | 6,500 | — | 8 | 7,000 | 6,500 | 8 | ||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (average) | ||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 63,686 | $ | 60,141 | $ | 52,688 | $ | 47,873 | $ | 46,301 | 6 | 38 | $ | 56,151 | $ | 42,494 | 32 | |||||||||||||||||||||||
Loans (a) | 39,289 | 35,303 | 33,069 | 29,290 | 26,941 | 11 | 46 | 34,268 | 23,271 | 47 | ||||||||||||||||||||||||||||||
Liability balances | 364,196 | 341,107 | 302,858 | 265,720 | 256,661 | 7 | 42 | 318,802 | 248,451 | 28 | ||||||||||||||||||||||||||||||
Equity | 7,000 | 7,000 | 7,000 | 7,000 | 6,500 | — | 8 | 7,000 | 6,500 | 8 | ||||||||||||||||||||||||||||||
Headcount | 27,825 | 28,157 | 28,230 | 28,040 | 29,073 | (1 | ) | (4 | ) | 27,825 | 29,073 | (4 | ) | |||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||||||||||||||
Net charge-offs | $ | — | $ | — | $ | — | $ | — | $ | — | — | — | $ | — | $ | 1 | NM | |||||||||||||||||||||||
Nonaccrual loans | 4 | 3 | 3 | 11 | 12 | 33 | (67 | ) | 4 | 12 | (67 | ) | ||||||||||||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses | 65 | 49 | 74 | 69 | 65 | 33 | — | 65 | 65 | — | ||||||||||||||||||||||||||||||
Allowance for lending-related commitments | 49 | 46 | 41 | 48 | 51 | 7 | (4 | ) | 49 | 51 | (4 | ) | ||||||||||||||||||||||||||||
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Total allowance for credit losses | 114 | 95 | 115 | 117 | 116 | 20 | (2 | ) | 114 | 116 | (2 | ) | ||||||||||||||||||||||||||||
Net charge-off rate | — | % | — | % | — | % | — | % | — | % | — | % | — | % | ||||||||||||||||||||||||||
Allowance for loan losses to period-end loans | 0.15 | 0.14 | 0.22 | 0.22 | 0.24 | 0.15 | 0.24 | |||||||||||||||||||||||||||||||||
Allowance for loan losses to nonaccrual loans | NM | NM | NM | NM | NM | NM | NM | |||||||||||||||||||||||||||||||||
Nonaccrual loans to period-end loans | 0.01 | 0.01 | 0.01 | 0.04 | 0.04 | 0.01 | 0.04 | |||||||||||||||||||||||||||||||||
WSS BUSINESS METRICS | ||||||||||||||||||||||||||||||||||||||||
Assets under custody (“AUC”) by asset class (period-end) | ||||||||||||||||||||||||||||||||||||||||
(in billions): | ||||||||||||||||||||||||||||||||||||||||
Fixed Income | $ | 10,926 | $ | 10,871 | $ | 10,686 | $ | 10,437 | $ | 10,364 | 1 | 5 | $ | 10,926 | $ | 10,364 | 5 | |||||||||||||||||||||||
Equity | 4,878 | 4,401 | 5,267 | 5,238 | 4,850 | 11 | 1 | 4,878 | 4,850 | 1 | ||||||||||||||||||||||||||||||
Other (b) | 1,066 | 978 | 992 | 944 | 906 | 9 | 18 | 1,066 | 906 | 18 | ||||||||||||||||||||||||||||||
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Total AUC | $ | 16,870 | $ | 16,250 | $ | 16,945 | $ | 16,619 | $ | 16,120 | 4 | 5 | $ | 16,870 | $ | 16,120 | 5 | |||||||||||||||||||||||
Liability Balances (average) | 122,102 | 107,105 | 90,204 | 82,724 | 83,511 | 14 | 46 | 100,660 | 79,457 | 27 | ||||||||||||||||||||||||||||||
TS BUSINESS METRICS | ||||||||||||||||||||||||||||||||||||||||
Liability balances (average) | 242,094 | 234,002 | 212,654 | 182,996 | 173,150 | 3 | 40 | 218,142 | 168,994 | 29 | ||||||||||||||||||||||||||||||
Trade Finance Loans (period-end) | 36,696 | 30,104 | 27,473 | 25,499 | 21,156 | 22 | 73 | 36,696 | 21,156 | 73 |
(a) | Loan balances include trade finance loans, wholesale overdrafts and commercial card. Effective January 1, 2011, the commercial card loan business (of approximately $1.2 billion) that was previously in TSS was transferred to Card. There is no material impact on the financial data; the prior-year periods were not revised. |
(b) | Consists of mutual funds, unit investment trusts, currencies, annuities, insurance contracts, options and nonsecurities contracts. |
Page 26
JPMORGAN CHASE & CO. | ||
TREASURY & SECURITIES SERVICES | ||
FINANCIAL HIGHLIGHTS, CONTINUED | ||
(in millions, except where otherwise noted) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
INTERNATIONAL METRICS | ||||||||||||||||||||||||||||||||||||||||
Net revenue by geographic region (a) | ||||||||||||||||||||||||||||||||||||||||
Asia/Pacific | $ | 339 | $ | 321 | $ | 299 | $ | 276 | $ | 270 | 6 | % | 26 | % | $ | 1,235 | $ | 978 | 26 | % | ||||||||||||||||||||
Latin America/Caribbean | 112 | 61 | 80 | 76 | 91 | 84 | 23 | 329 | 257 | 28 | ||||||||||||||||||||||||||||||
Europe/Middle East/Africa | 689 | 648 | 691 | 630 | 624 | 6 | 10 | 2,658 | 2,389 | 11 | ||||||||||||||||||||||||||||||
North America | 882 | 878 | 862 | 858 | 928 | — | (5 | ) | 3,480 | 3,757 | (7 | ) | ||||||||||||||||||||||||||||
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Total net revenue | $ | 2,022 | $ | 1,908 | $ | 1,932 | $ | 1,840 | $ | 1,913 | 6 | 6 | $ | 7,702 | $ | 7,381 | 4 | |||||||||||||||||||||||
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Average liability balances (a) | ||||||||||||||||||||||||||||||||||||||||
Asia/Pacific | $ | 49,407 | $ | 42,987 | $ | 42,472 | $ | 39,123 | $ | 35,502 | 15 | 39 | $ | 43,524 | $ | 32,862 | 32 | |||||||||||||||||||||||
Latin America/Caribbean | 11,563 | 12,722 | 13,506 | 12,720 | 13,114 | (9 | ) | (12 | ) | 12,625 | 11,558 | 9 | ||||||||||||||||||||||||||||
Europe/Middle East/Africa | 130,862 | 129,608 | 125,911 | 108,997 | 100,878 | 1 | 30 | 123,920 | 102,014 | 21 | ||||||||||||||||||||||||||||||
North America | 172,364 | 155,790 | 120,969 | 104,880 | 107,167 | 11 | 61 | 138,733 | 102,017 | 36 | ||||||||||||||||||||||||||||||
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Total average liability balances | $ | 364,196 | $ | 341,107 | $ | 302,858 | $ | 265,720 | $ | 256,661 | 7 | 42 | $ | 318,802 | $ | 248,451 | 28 | |||||||||||||||||||||||
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Trade finance loans (period-end) (a) | ||||||||||||||||||||||||||||||||||||||||
Asia/Pacific | $ | 19,280 | $ | 16,918 | $ | 15,736 | $ | 14,607 | $ | 11,834 | 14 | 63 | $ | 19,280 | $ | 11,834 | 63 | |||||||||||||||||||||||
Latin America/Caribbean | 6,254 | 5,228 | 4,553 | 4,014 | 3,628 | 20 | 72 | 6,254 | 3,628 | 72 | ||||||||||||||||||||||||||||||
Europe/Middle East/Africa | 9,726 | 6,853 | 6,184 | 5,794 | 4,874 | 42 | 100 | 9,726 | 4,874 | 100 | ||||||||||||||||||||||||||||||
North America | 1,436 | 1,105 | 1,000 | 1,084 | 820 | 30 | 75 | 1,436 | 820 | 75 | ||||||||||||||||||||||||||||||
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Total trade finance loans | $ | 36,696 | $ | 30,104 | $ | 27,473 | $ | 25,499 | $ | 21,156 | 22 | 73 | $ | 36,696 | $ | 21,156 | 73 | |||||||||||||||||||||||
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AUC (period-end)( in billions) (a) | ||||||||||||||||||||||||||||||||||||||||
North America | $ | 9,735 | $ | 9,611 | $ | 9,976 | $ | 9,901 | $ | 9,836 | 1 | (1 | ) | $ | 9,735 | $ | 9,836 | (1 | ) | |||||||||||||||||||||
All other regions | 7,135 | 6,639 | 6,969 | 6,718 | 6,284 | 7 | 14 | 7,135 | 6,284 | 14 | ||||||||||||||||||||||||||||||
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Total AUC | $ | 16,870 | $ | 16,250 | $ | 16,945 | $ | 16,619 | $ | 16,120 | 4 | 5 | $ | 16,870 | $ | 16,120 | 5 | |||||||||||||||||||||||
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TSS FIRMWIDE DISCLOSURES (b) | ||||||||||||||||||||||||||||||||||||||||
TS revenue - reported | $ | 1,051 | $ | 969 | $ | 930 | $ | 891 | $ | 953 | 8 | 10 | $ | 3,841 | $ | 3,698 | 4 | |||||||||||||||||||||||
TS revenue reported in CB (c) | 600 | 572 | 556 | 542 | 659 | 5 | (9 | ) | 2,270 | 2,632 | (14 | ) | ||||||||||||||||||||||||||||
TS revenue reported in other lines of business | 69 | 68 | 65 | 63 | 65 | 1 | 6 | 265 | 247 | 7 | ||||||||||||||||||||||||||||||
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TS firmwide revenue (d) | 1,720 | 1,609 | 1,551 | 1,496 | 1,677 | 7 | 3 | 6,376 | 6,577 | (3 | ) | |||||||||||||||||||||||||||||
Worldwide Securities Services revenue | 971 | 939 | 1,002 | 949 | 960 | 3 | 1 | 3,861 | 3,683 | 5 | ||||||||||||||||||||||||||||||
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TSS firmwide revenue (d) | $ | 2,691 | $ | 2,548 | $ | 2,553 | $ | 2,445 | $ | 2,637 | 6 | 2 | $ | 10,237 | $ | 10,260 | — | |||||||||||||||||||||||
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TSS total foreign exchange (“FX”) revenue (d) | 154 | 179 | 165 | 160 | 181 | (14 | ) | (15 | ) | 658 | 636 | 3 | ||||||||||||||||||||||||||||
TS firmwide liability balances (average) (e) | $ | 441,572 | $ | 414,485 | $ | 375,432 | $ | 339,240 | $ | 320,745 | 7 | 38 | $ | 393,022 | $ | 308,028 | 28 | |||||||||||||||||||||||
TSS firmwide liability balances (average) (e) | 563,334 | 521,383 | 465,627 | 421,920 | 404,195 | 8 | 39 | 493,531 | 387,313 | 27 | ||||||||||||||||||||||||||||||
Number of: | ||||||||||||||||||||||||||||||||||||||||
U.S.$ ACH transactions originated | 983 | 972 | 959 | 992 | 995 | 1 | (1 | ) | 3,906 | 3,892 | — | |||||||||||||||||||||||||||||
Total U.S.$ clearing volume (in thousands) | 33,055 | 33,117 | 32,274 | 30,971 | 32,144 | — | 3 | 129,417 | 122,123 | 6 | ||||||||||||||||||||||||||||||
International electronic funds transfer volume (in thousands) (f) | 63,669 | 62,718 | 63,208 | 60,942 | 60,882 | 2 | 5 | 250,537 | 232,453 | 8 | ||||||||||||||||||||||||||||||
Wholesale check volume | 592 | 601 | 608 | 532 | 525 | (1 | ) | 13 | 2,333 | 2,060 | 13 | |||||||||||||||||||||||||||||
Wholesale cards issued (in thousands) (g) | 25,187 | 24,288 | 23,746 | 23,170 | 29,785 | 4 | (15 | ) | 25,187 | 29,785 | (15 | ) |
(a) | Total net revenue, average liability balances, trade finance loans and AUC are based on TSS management’s view of the domicile of clients. |
(b) | TSS firmwide metrics include revenue recorded in CB, Consumer & Business Banking and Asset Management (“AM”) lines of business and net TSS FX revenue (it excludes TSS FX revenue recorded in the IB). In order to capture the firmwide impact of Treasury Services (“TS”) and TSS products and revenue, management reviews firmwide metrics in assessing financial performance of TSS. Firmwide metrics are necessary in order to understand the aggregate TSS business. |
(c) | Effective January 1, 2011, certain CB revenues were excluded in the TS firmwide metrics; they are instead directly captured within CB’s lending revenue by product. For the three months ended December 31, 2011, September 30, 2011, June 30, 2011 and March 31, 2011, the impact of this change was $108 million, $109 million, $114 million and $107 million, respectively, and $438 million for full year 2011. In prior-year periods, these revenues were included in CB’s treasury services revenue by product. |
(d) | IB executes FX transactions on behalf of TSS customers under revenue sharing agreements. FX revenue generated by TSS customers is recorded in TSS and IB. TSS Total FX revenue reported above is the gross (pre-split) FX revenue generated by TSS customers. However, TSS firmwide revenue includes only the FX revenue booked in TSS, i.e., it does not include the portion of TSS FX revenue recorded in IB. |
(e) | Firmwide liability balances include liability balances recorded in CB. |
(f) | International electronic funds transfer includes non-U.S. dollar Automated Clearing House (“ACH”) and clearing volume. |
(g) | Wholesale cards issued and outstanding include commercial, stored value, prepaid and government electronic benefit card products. Effective January 1, 2011, the commercial card portfolio was transferred from TSS to Card. |
Page 27
JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS (in millions, except ratio and headcount data) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
INCOME STATEMENT | ||||||||||||||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||||||||||||||
Asset management, administration and commissions | $ | 1,606 | $ | 1,617 | $ | 1,818 | $ | 1,707 | $ | 1,846 | (1 | )% | (13 | )% | $ | 6,748 | $ | 6,374 | 6 | % | ||||||||||||||||||||
All other income | 232 | 281 | 321 | 313 | 386 | (17 | ) | (40 | ) | 1,147 | 1,111 | 3 | ||||||||||||||||||||||||||||
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Noninterest revenue | 1,838 | 1,898 | 2,139 | 2,020 | 2,232 | (3 | ) | (18 | ) | 7,895 | 7,485 | 5 | ||||||||||||||||||||||||||||
Net interest income | 446 | 418 | 398 | 386 | 381 | 7 | 17 | 1,648 | 1,499 | 10 | ||||||||||||||||||||||||||||||
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TOTAL NET REVENUE | 2,284 | 2,316 | 2,537 | 2,406 | 2,613 | (1 | ) | (13 | ) | 9,543 | 8,984 | 6 | ||||||||||||||||||||||||||||
Provision for credit losses | 24 | 26 | 12 | 5 | 23 | (8 | ) | 4 | 67 | 86 | �� | (22 | ) | |||||||||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||||||
Compensation expense | 1,046 | 999 | 1,068 | 1,039 | 1,078 | 5 | (3 | ) | 4,152 | 3,763 | 10 | |||||||||||||||||||||||||||||
Noncompensation expense | 674 | 775 | 704 | 599 | 679 | (13 | ) | (1 | ) | 2,752 | 2,277 | 21 | ||||||||||||||||||||||||||||
Amortization of intangibles | 32 | 22 | 22 | 22 | 20 | 45 | 60 | 98 | 72 | 36 | ||||||||||||||||||||||||||||||
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TOTAL NONINTEREST EXPENSE | 1,752 | 1,796 | 1,794 | 1,660 | 1,777 | (2 | ) | (1 | ) | 7,002 | 6,112 | 15 | ||||||||||||||||||||||||||||
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Income before income tax expense | 508 | 494 | 731 | 741 | 813 | 3 | (38 | ) | 2,474 | 2,786 | (11 | ) | ||||||||||||||||||||||||||||
Income tax expense | 206 | 109 | 292 | 275 | 306 | 89 | (33 | ) | 882 | 1,076 | (18 | ) | ||||||||||||||||||||||||||||
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NET INCOME | $ | 302 | $ | 385 | $ | 439 | $ | 466 | $ | 507 | (22 | ) | (40 | ) | $ | 1,592 | $ | 1,710 | (7 | ) | ||||||||||||||||||||
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REVENUE BY CLIENT SEGMENT | ||||||||||||||||||||||||||||||||||||||||
Private Banking | $ | 1,212 | $ | 1,298 | $ | 1,289 | $ | 1,317 | $ | 1,376 | (7 | ) | (12 | ) | $ | 5,116 | $ | 4,860 | 5 | |||||||||||||||||||||
Institutional (a) | 558 | 478 | 694 | 543 | 675 | 17 | (17 | ) | 2,273 | 2,180 | 4 | |||||||||||||||||||||||||||||
Retail (a) | 514 | 540 | 554 | 546 | 562 | (5 | ) | (9 | ) | 2,154 | 1,944 | 11 | ||||||||||||||||||||||||||||
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TOTAL NET REVENUE | $ | 2,284 | $ | 2,316 | $ | 2,537 | $ | 2,406 | $ | 2,613 | (1 | ) | (13 | ) | $ | 9,543 | $ | 8,984 | 6 | |||||||||||||||||||||
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FINANCIAL RATIOS | ||||||||||||||||||||||||||||||||||||||||
ROE | 18 | % | 24 | % | 27 | % | 29 | % | 31 | % | 25 | % | 26 | % | ||||||||||||||||||||||||||
Overhead ratio | 77 | 78 | 71 | 69 | 68 | 73 | 68 | |||||||||||||||||||||||||||||||||
Pretax margin ratio | 22 | 21 | 29 | 31 | 31 | 26 | 31 | |||||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (period-end) | ||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 86,242 | $ | 81,179 | $ | 78,199 | $ | 71,521 | $ | 68,997 | 6 | 25 | $ | 86,242 | $ | 68,997 | 25 | |||||||||||||||||||||||
Loans | 57,573 | 54,178 | 51,747 | 46,454 | 44,084 | 6 | 31 | 57,573 | 44,084 | 31 | ||||||||||||||||||||||||||||||
Equity | 6,500 | 6,500 | 6,500 | 6,500 | 6,500 | — | — | 6,500 | 6,500 | — | ||||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (average) | ||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 82,594 | $ | 78,669 | $ | 74,206 | $ | 68,918 | $ | 69,290 | 5 | 19 | $ | 76,141 | $ | 65,056 | 17 | |||||||||||||||||||||||
Loans | 54,691 | 52,652 | 48,837 | 44,948 | 42,296 | 4 | 29 | 50,315 | 38,948 | 29 | ||||||||||||||||||||||||||||||
Deposits | 121,493 | 111,090 | 97,509 | 95,250 | 89,314 | 9 | 36 | 106,421 | 86,096 | 24 | ||||||||||||||||||||||||||||||
Equity | 6,500 | 6,500 | 6,500 | 6,500 | 6,500 | — | — | 6,500 | 6,500 | — | ||||||||||||||||||||||||||||||
Headcount | 18,036 | 18,084 | 17,963 | 17,203 | 16,918 | — | 7 | 18,036 | 16,918 | 7 |
(a) | In the fourth quarter of 2011, the prior periods of 2011 Institutional and Retail client revenue data were revised as a result of enhancements to the revenue allocation model. |
Page 28
JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
BUSINESS METRICS | ||||||||||||||||||||||||||||||||||||||||
Number of: | ||||||||||||||||||||||||||||||||||||||||
Client advisors (a) | 2,444 | 2,418 | 2,282 | 2,288 | 2,281 | 1 | % | 7 | % | 2,444 | 2,281 | 7 | % | |||||||||||||||||||||||||||
Retirement Planning Services participants (in thousands) | 1,798 | 1,755 | 1,613 | 1,604 | 1,580 | 2 | 14 | 1,798 | 1,580 | 14 | ||||||||||||||||||||||||||||||
JPMorgan Securities brokers (a) | 439 | 446 | 437 | 431 | 415 | (2 | ) | 6 | 439 | 415 | 6 | |||||||||||||||||||||||||||||
% of customer assets in 4 & 5 Star Funds (b) | 43 | % | 47 | % | 50 | % | 46 | % | 49 | % | (9 | ) | (12 | ) | 43 | % | 49 | % | (12 | ) | ||||||||||||||||||||
% of AUM in 1stand 2nd quartiles: (c) | ||||||||||||||||||||||||||||||||||||||||
1 year | 48 | 49 | 56 | 57 | 67 | (2 | ) | (28 | ) | 48 | 67 | (28 | ) | |||||||||||||||||||||||||||
3 years | 72 | 73 | 71 | 70 | 72 | (1 | ) | — | 72 | 72 | — | |||||||||||||||||||||||||||||
5 years | 78 | 77 | 76 | 77 | 80 | 1 | (3 | ) | 78 | 80 | (3 | ) | ||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||||||||||||||
Net charge-offs | $ | 48 | $ | — | $ | 33 | $ | 11 | $ | 8 | NM | 500 | $ | 92 | $ | 76 | 21 | |||||||||||||||||||||||
Nonaccrual loans | 317 | 311 | 252 | 254 | 375 | 2 | (15 | ) | 317 | 375 | (15 | ) | ||||||||||||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses | 209 | 240 | 222 | 257 | 267 | (13 | ) | (22 | ) | 209 | 267 | (22 | ) | |||||||||||||||||||||||||||
Allowance for lending-related commitments | 10 | 9 | 9 | 4 | 4 | 11 | 150 | 10 | 4 | 150 | ||||||||||||||||||||||||||||||
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Total allowance for credit losses | 219 | 249 | 231 | 261 | 271 | (12 | ) | (19 | ) | 219 | 271 | (19 | ) | |||||||||||||||||||||||||||
Net charge-off rate | 0.35 | % | — | % | 0.27 | % | 0.10 | % | 0.08 | % | 0.18 | % | 0.20 | % | ||||||||||||||||||||||||||
Allowance for loan losses to period-end loans | 0.36 | 0.44 | 0.43 | 0.55 | 0.61 | 0.36 | 0.61 | |||||||||||||||||||||||||||||||||
Allowance for loan losses to nonaccrual loans | 66 | 77 | 88 | 101 | 71 | 66 | 71 | |||||||||||||||||||||||||||||||||
Nonaccrual loans to period-end loans | 0.55 | 0.57 | 0.49 | 0.55 | 0.85 | 0.55 | 0.85 |
(a) | Effective January 1, 2011, the methodology used to determine client advisors was revised. Prior-year periods have been revised. |
(b) | Derived from Morningstar for the U.S., the U.K., Luxembourg, France, Hong Kong and Taiwan; and Nomura for Japan. |
(c) | Quartile ranking sourced from: Lipper for the U.S. and Taiwan; Morningstar for the U.K., Luxembourg, France and Hong Kong; and Nomura for Japan. |
Page 29
JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS, CONTINUED (in billions) |
December 31, 2011 Change | ||||||||||||||||||||||||||||
ASSETS UNDER SUPERVISION (a) | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | Dec 31, 2010 | Sep 30, 2011 | Dec 31, 2010 | |||||||||||||||||||||
Assets by asset class | ||||||||||||||||||||||||||||
Liquidity | $ | 515 | $ | 464 | $ | 476 | $ | 490 | $ | 497 | 11 | % | 4 | % | ||||||||||||||
Fixed income | 336 | 321 | 319 | 305 | 289 | 5 | 16 | |||||||||||||||||||||
Equity and multi-asset | 372 | 356 | 430 | 421 | 404 | 4 | (8 | ) | ||||||||||||||||||||
Alternatives | 113 | 113 | 117 | 114 | 108 | — | 5 | |||||||||||||||||||||
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TOTAL ASSETS UNDER MANAGEMENT | 1,336 | 1,254 | 1,342 | 1,330 | 1,298 | 7 | 3 | |||||||||||||||||||||
Custody/brokerage/administration/deposits | 585 | 552 | 582 | 578 | 542 | 6 | 8 | |||||||||||||||||||||
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TOTAL ASSETS UNDER SUPERVISION | $ | 1,921 | $ | 1,806 | $ | 1,924 | $ | 1,908 | $ | 1,840 | 6 | 4 | ||||||||||||||||
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Assets by client segment | ||||||||||||||||||||||||||||
Private Banking | $ | 291 | $ | 276 | $ | 291 | $ | 293 | $ | 284 | 5 | 2 | ||||||||||||||||
Institutional (b) | 722 | 673 | 708 | 711 | 703 | 7 | 3 | |||||||||||||||||||||
Retail (b) | 323 | 305 | 343 | 326 | 311 | 6 | 4 | |||||||||||||||||||||
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TOTAL ASSETS UNDER MANAGEMENT | $ | 1,336 | $ | 1,254 | $ | 1,342 | $ | 1,330 | $ | 1,298 | 7 | 3 | ||||||||||||||||
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Private Banking | $ | 781 | $ | 738 | $ | 776 | $ | 773 | $ | 731 | 6 | 7 | ||||||||||||||||
Institutional (b) | 723 | 674 | 709 | 713 | 703 | 7 | 3 | |||||||||||||||||||||
Retail (b) | 417 | 394 | 439 | 422 | 406 | 6 | 3 | |||||||||||||||||||||
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TOTAL ASSETS UNDER SUPERVISION | $ | 1,921 | $ | 1,806 | $ | 1,924 | $ | 1,908 | $ | 1,840 | 6 | 4 | ||||||||||||||||
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Mutual fund assets by asset class | ||||||||||||||||||||||||||||
Liquidity | $ | 458 | $ | 409 | $ | 421 | $ | 436 | $ | 446 | 12 | 3 | ||||||||||||||||
Fixed income | 107 | 101 | 105 | 99 | 92 | 6 | 16 | |||||||||||||||||||||
Equity and multi-asset | 147 | 139 | 176 | 173 | 169 | 6 | (13 | ) | ||||||||||||||||||||
Alternatives | 8 | 8 | 9 | 8 | 7 | — | 14 | |||||||||||||||||||||
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TOTAL MUTUAL FUND ASSETS | $ | 720 | $ | 657 | $ | 711 | $ | 716 | $ | 714 | 10 | 1 | ||||||||||||||||
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(a) | Excludes assets under management of American Century Companies, Inc. in which the Firm sold its ownership interest on August 31, 2011. The Firm previously had an ownership interest of 40% at June 30, 2011 and March 31, 2011, and 41% at December 31, 2010. |
(b) | In the second quarter of 2011, the hierarchy used to classify client assets was revised, and all prior periods have been revised. |
Page 30
JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS, CONTINUED (in billions) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 2011 | 2010 | ||||||||||||||||||||||
ASSETS UNDER SUPERVISION (continued) | ||||||||||||||||||||||||||||
Assets under management rollforward | ||||||||||||||||||||||||||||
Beginning balance | $ | 1,254 | $ | 1,342 | $ | 1,330 | $ | 1,298 | $ | 1,257 | $ | 1,298 | $ | 1,249 | ||||||||||||||
Net asset flows: | ||||||||||||||||||||||||||||
Liquidity | 53 | (10 | ) | (16 | ) | (9 | ) | (25 | ) | 18 | (89 | ) | ||||||||||||||||
Fixed income | 9 | 3 | 12 | 16 | 10 | 40 | 50 | |||||||||||||||||||||
Equities, multi-asset and alternatives | (4 | ) | (1 | ) | 7 | 11 | 13 | 13 | 19 | |||||||||||||||||||
Market/performance/other impacts | 24 | (80 | ) | 9 | 14 | 43 | (33 | ) | 69 | |||||||||||||||||||
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Ending balance | $ | 1,336 | $ | 1,254 | $ | 1,342 | $ | 1,330 | $ | 1,298 | $ | 1,336 | $ | 1,298 | ||||||||||||||
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Assets under supervision rollforward | ||||||||||||||||||||||||||||
Beginning balance | $ | 1,806 | $ | 1,924 | $ | 1,908 | $ | 1,840 | $ | 1,770 | $ | 1,840 | $ | 1,701 | ||||||||||||||
Net asset flows | 69 | 11 | 12 | 31 | 1 | 123 | 28 | |||||||||||||||||||||
Market/performance/other impacts | 46 | (129 | ) | 4 | 37 | 69 | (42 | ) | 111 | |||||||||||||||||||
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Ending balance | $ | 1,921 | $ | 1,806 | $ | 1,924 | $ | 1,908 | $ | 1,840 | $ | 1,921 | $ | 1,840 | ||||||||||||||
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Page 31
JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS, CONTINUED (in billions, except where otherwise noted) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
INTERNATIONAL METRICS | ||||||||||||||||||||||||||||||||||||||||
Total net revenue: (in millions) (a) | ||||||||||||||||||||||||||||||||||||||||
Europe/Middle East/Africa | $ | 392 | $ | 395 | $ | 478 | $ | 439 | $ | 481 | (1 | )% | (19 | )% | $ | 1,704 | $ | 1,642 | 4 | % | ||||||||||||||||||||
Asia/Pacific | 220 | 248 | 257 | 246 | 263 | (11 | ) | (16 | ) | 971 | 925 | 5 | ||||||||||||||||||||||||||||
Latin America/Caribbean | 224 | 168 | 251 | 165 | 168 | 33 | 33 | 808 | 541 | 49 | ||||||||||||||||||||||||||||||
North America | 1,448 | 1,505 | 1,551 | 1,556 | 1,701 | (4 | ) | (15 | ) | 6,060 | 5,876 | 3 | ||||||||||||||||||||||||||||
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Total net revenue | $ | 2,284 | $ | 2,316 | $ | 2,537 | $ | 2,406 | $ | 2,613 | (1 | ) | (13 | ) | $ | 9,543 | $ | 8,984 | 6 | |||||||||||||||||||||
Assets under management: | ||||||||||||||||||||||||||||||||||||||||
Europe/Middle East/Africa | $ | 278 | $ | 255 | $ | 298 | $ | 300 | $ | 282 | 9 | (1 | ) | $ | 278 | $ | 282 | (1 | ) | |||||||||||||||||||||
Asia/Pacific | 105 | 104 | 119 | 115 | 111 | 1 | (5 | ) | 105 | 111 | (5 | ) | ||||||||||||||||||||||||||||
Latin America/Caribbean | 34 | 32 | 37 | 35 | 35 | 6 | (3 | ) | 34 | 35 | (3 | ) | ||||||||||||||||||||||||||||
North America | 919 | 863 | 888 | 880 | 870 | 6 | 6 | 919 | 870 | 6 | ||||||||||||||||||||||||||||||
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Total assets under management | $ | 1,336 | $ | 1,254 | $ | 1,342 | $ | 1,330 | $ | 1,298 | 7 | 3 | $ | 1,336 | $ | 1,298 | 3 | |||||||||||||||||||||||
Assets under supervision: | ||||||||||||||||||||||||||||||||||||||||
Europe/Middle East/Africa | $ | 329 | $ | 306 | $ | 353 | $ | 353 | $ | 331 | 8 | (1 | ) | $ | 329 | $ | 331 | (1 | ) | |||||||||||||||||||||
Asia/Pacific | 139 | 140 | 161 | 155 | 147 | (1 | ) | (5 | ) | 139 | 147 | (5 | ) | |||||||||||||||||||||||||||
Latin America/Caribbean | 89 | 87 | 94 | 88 | 84 | 2 | 6 | 89 | 84 | 6 | ||||||||||||||||||||||||||||||
North America | 1,364 | 1,273 | 1,316 | 1,312 | 1,278 | 7 | 7 | 1,364 | 1,278 | 7 | ||||||||||||||||||||||||||||||
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Total assets under supervision | $ | 1,921 | $ | 1,806 | $ | 1,924 | $ | 1,908 | $ | 1,840 | 6 | 4 | $ | 1,921 | $ | 1,840 | 4 |
(a) | Regional revenue is based on the domicile of clients. |
Page 32
JPMORGAN CHASE & CO. CORPORATE/PRIVATE EQUITY FINANCIAL HIGHLIGHTS (in millions, except headcount data) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
INCOME STATEMENT | ||||||||||||||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||||||||||||||
Principal transactions | $ | 324 | $ | (933 | ) | $ | 745 | $ | 1,298 | $ | 587 | NM | % | (45 | )% | $ | 1,434 | $ | 2,208 | (35 | )% | |||||||||||||||||||
Securities gains | 54 | 607 | 837 | 102 | 1,199 | (91 | ) | (95 | ) | 1,600 | 2,898 | (45 | ) | |||||||||||||||||||||||||||
All other income | 75 | 186 | 265 | 78 | (24 | ) | (60 | ) | NM | 604 | 253 | 139 | ||||||||||||||||||||||||||||
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Noninterest revenue | 453 | (140 | ) | 1,847 | 1,478 | 1,762 | NM | (74 | ) | 3,638 | 5,359 | (32 | ) | |||||||||||||||||||||||||||
Net interest income | 245 | 8 | 218 | 34 | (131 | ) | NM | NM | 505 | 2,063 | (76 | ) | ||||||||||||||||||||||||||||
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TOTAL NET REVENUE (a) | 698 | (132 | ) | 2,065 | 1,512 | 1,631 | NM | (57 | ) | 4,143 | 7,422 | (44 | ) | |||||||||||||||||||||||||||
Provision for credit losses | (10 | ) | (7 | ) | (9 | ) | (10 | ) | 2 | (43 | ) | NM | (36 | ) | 14 | NM | ||||||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||||||
Compensation expense | 602 | 552 | 614 | 657 | 538 | 9 | 12 | 2,425 | 2,357 | 3 | ||||||||||||||||||||||||||||||
Noncompensation expense (b) | 1,649 | 1,995 | 2,097 | 1,143 | 2,352 | (17 | ) | (30 | ) | 6,884 | 8,788 | (22 | ) | |||||||||||||||||||||||||||
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Subtotal | 2,251 | 2,547 | 2,711 | 1,800 | 2,890 | (12 | ) | (22 | ) | 9,309 | 11,145 | (16 | ) | |||||||||||||||||||||||||||
Net expense allocated to other businesses | (1,321 | ) | (1,331 | ) | (1,270 | ) | (1,238 | ) | (1,191 | ) | 1 | (11 | ) | (5,160 | ) | (4,790 | ) | (8 | ) | |||||||||||||||||||||
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TOTAL NONINTEREST EXPENSE | 930 | 1,216 | 1,441 | 562 | 1,699 | (24 | ) | (45 | ) | 4,149 | 6,355 | (35 | ) | |||||||||||||||||||||||||||
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Income/(loss) before income tax expense/(benefit) | (222 | ) | (1,341 | ) | 633 | 960 | (70 | ) | 83 | (217 | ) | 30 | 1,053 | (97 | ) | |||||||||||||||||||||||||
Income tax expense/(benefit) | (445 | ) | (696 | ) | 131 | 238 | (99 | ) | 36 | (349 | ) | (772 | ) | (205 | ) | (277 | ) | |||||||||||||||||||||||
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NET INCOME/(LOSS) | $ | 223 | $ | (645 | ) | $ | 502 | $ | 722 | $ | 29 | NM | NM | $ | 802 | $ | 1,258 | (36 | ) | |||||||||||||||||||||
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MEMO: | ||||||||||||||||||||||||||||||||||||||||
TOTAL NET REVENUE | ||||||||||||||||||||||||||||||||||||||||
Private equity | $ | (113 | ) | $ | (546 | ) | $ | 796 | $ | 699 | $ | 355 | 79 | NM | $ | 836 | $ | 1,239 | (33 | ) | ||||||||||||||||||||
Corporate | 811 | 414 | 1,269 | 813 | 1,276 | 96 | (36 | ) | 3,307 | 6,183 | (47 | ) | ||||||||||||||||||||||||||||
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TOTAL NET REVENUE | $ | 698 | $ | (132 | ) | $ | 2,065 | $ | 1,512 | $ | 1,631 | NM | (57 | ) | $ | 4,143 | $ | 7,422 | (44 | ) | ||||||||||||||||||||
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NET INCOME/(LOSS) | ||||||||||||||||||||||||||||||||||||||||
Private equity | $ | (89 | ) | $ | (347 | ) | $ | 444 | $ | 383 | $ | 178 | 74 | NM | $ | 391 | $ | 588 | (34 | ) | ||||||||||||||||||||
Corporate | 312 | (298 | ) | 58 | 339 | (149 | ) | NM | NM | 411 | 670 | (39 | ) | |||||||||||||||||||||||||||
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TOTAL NET INCOME/(LOSS) | $ | 223 | $ | (645 | ) | $ | 502 | $ | 722 | $ | 29 | NM | NM | $ | 802 | $ | 1,258 | (36 | ) | |||||||||||||||||||||
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TOTAL ASSETS (period-end) | $ | 693,153 | $ | 693,597 | $ | 672,655 | $ | 591,353 | $ | 526,588 | — | 32 | $ | 693,153 | $ | 526,588 | 32 | |||||||||||||||||||||||
Headcount | 22,117 | 21,844 | 21,444 | 20,927 | 20,030 | 1 | 10 | 22,117 | 20,030 | 10 |
(a) | Total net revenue included tax-equivalent adjustments, predominantly due to tax-exempt income from municipal bond investments of $92 million, $73 million, $69 million, $64 million and $63 million for the three months ended December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively, and $298 million and $226 million for full year 2011 and 2010, respectively. |
(b) | Includes litigation expense of $0.5 billion, $1.0 billion, $1.3 billion, $0.4 billion and $1.5 billion for the three months ended December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively, and $3.2 billion and $5.7 billion for full year 2011 and 2010, respectively. |
Page 33
JPMORGAN CHASE & CO. CORPORATE/PRIVATE EQUITY FINANCIAL HIGHLIGHTS, CONTINUED (in millions) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION | ||||||||||||||||||||||||||||||||||||||||
TREASURY and CHIEF INVESTMENT OFFICE (“CIO”) | ||||||||||||||||||||||||||||||||||||||||
Securities gains (a) | $ | (13 | ) | $ | 459 | $ | 837 | $ | 102 | $ | 1,199 | NM | % | NM | % | $ | 1,385 | $ | 2,897 | (52 | )% | |||||||||||||||||||
Investment securities portfolio (average) | 349,750 | 324,596 | 335,543 | 313,319 | 322,218 | 8 | 9 | 330,885 | 323,673 | 2 | ||||||||||||||||||||||||||||||
Investment securities portfolio (ending) | 355,605 | 330,800 | 318,237 | 328,013 | 310,801 | 7 | 14 | 355,605 | 310,801 | 14 | ||||||||||||||||||||||||||||||
Mortgage loans (average) | 14,089 | 13,748 | 12,731 | 11,418 | 10,117 | 2 | 39 | 13,006 | 9,004 | 44 | ||||||||||||||||||||||||||||||
Mortgage loans (ending) | 13,375 | 14,226 | 13,243 | 12,171 | 10,739 | (6 | ) | 25 | 13,375 | 10,739 | 25 | |||||||||||||||||||||||||||||
PRIVATE EQUITY | ||||||||||||||||||||||||||||||||||||||||
Private equity gains/(losses) | ||||||||||||||||||||||||||||||||||||||||
Direct investments | ||||||||||||||||||||||||||||||||||||||||
Realized gains | $ | 58 | $ | 394 | $ | 1,219 | $ | 171 | $ | 1,039 | (85 | ) | (94 | ) | $ | 1,842 | $ | 1,409 | 31 | |||||||||||||||||||||
Unrealized gains/(losses) (b) | (122 | ) | (827 | ) | (726 | ) | 370 | (781 | ) | 85 | 84 | (1,305 | ) | (302 | ) | (332 | ) | |||||||||||||||||||||||
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Total direct investments | (64 | ) | (433 | ) | 493 | 541 | 258 | 85 | NM | 537 | 1,107 | (51 | ) | |||||||||||||||||||||||||||
Third-party fund investments | (85 | ) | (7 | ) | 323 | 186 | 129 | NM | NM | 417 | 241 | 73 | ||||||||||||||||||||||||||||
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Total private equity gains/(losses) (c) | $ | (149 | ) | $ | (440 | ) | $ | 816 | $ | 727 | $ | 387 | 66 | NM | $ | 954 | $ | 1,348 | (29 | ) | ||||||||||||||||||||
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Private equity portfolio information | ||||||||||||||||||||||||||||||||||||||||
Direct investments | ||||||||||||||||||||||||||||||||||||||||
Publicly-held securities | ||||||||||||||||||||||||||||||||||||||||
Carrying value | $ | 805 | $ | 709 | $ | 670 | $ | 731 | $ | 875 | 14 | (8 | ) | |||||||||||||||||||||||||||
Cost | 573 | 779 | 595 | 649 | 732 | (26 | ) | (22 | ) | |||||||||||||||||||||||||||||||
Quoted public value | 896 | 778 | 721 | 785 | 935 | 15 | (4 | ) | ||||||||||||||||||||||||||||||||
Privately-held direct securities | ||||||||||||||||||||||||||||||||||||||||
Carrying value | 4,597 | 4,322 | 5,680 | 7,212 | 5,882 | 6 | (22 | ) | ||||||||||||||||||||||||||||||||
Cost | 6,793 | 6,556 | 6,891 | 7,731 | 6,887 | 4 | (1 | ) | ||||||||||||||||||||||||||||||||
Third-party fund investments (d) | ||||||||||||||||||||||||||||||||||||||||
Carrying value | 2,283 | 2,399 | 2,481 | 2,179 | 1,980 | (5 | ) | 15 | ||||||||||||||||||||||||||||||||
Cost | 2,452 | 2,454 | 2,464 | 2,461 | 2,404 | — | 2 | |||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||
Total private equity portfolio | ||||||||||||||||||||||||||||||||||||||||
Carrying value | $ | 7,685 | $ | 7,430 | $ | 8,831 | $ | 10,122 | $ | 8,737 | 3 | (12 | ) | |||||||||||||||||||||||||||
Cost | 9,818 | 9,789 | 9,950 | 10,841 | 10,023 | — | (2 | ) |
(a) | Reflects repositioning of the Corporate investment securities portfolio. |
(b) | Unrealized gains/(losses) contain reversals of unrealized gains and losses that were recognized in prior periods and have now been realized. |
(c) | Included in principal transactions revenue in the Consolidated Statements of Income. |
(d) | Unfunded commitments to third-party private equity funds were $789 million, $853 million, $876 million, $943 million and $1.0 billion at December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively. |
Page 34
JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION (in millions) |
December 31, 2011 Change | ||||||||||||||||||||||||||||
Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | Dec 31, 2010 | Sep 30, 2011 | Dec 31, 2010 | ||||||||||||||||||||||
CREDIT EXPOSURE | ||||||||||||||||||||||||||||
Wholesale | ||||||||||||||||||||||||||||
Loans retained | $ | 278,395 | $ | 255,799 | $ | 244,224 | $ | 229,648 | $ | 222,510 | 9 | % | 25 | % | ||||||||||||||
Loans held-for-sale and loans at fair value | 4,621 | 3,684 | 4,599 | 6,359 | 5,123 | 25 | (10 | ) | ||||||||||||||||||||
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| |||||||||||||||||||
Total wholesale loans (a)(b) | 283,016 | 259,483 | 248,823 | 236,007 | 227,633 | 9 | 24 | |||||||||||||||||||||
Consumer, excluding credit card | ||||||||||||||||||||||||||||
Loans, excluding PCI loans and held-for | ||||||||||||||||||||||||||||
Home equity | 77,800 | 80,278 | 82,751 | 85,253 | 88,385 | (3 | ) | (12 | ) | |||||||||||||||||||
Prime mortgage, including option ARMs | 76,196 | 74,230 | 74,276 | 74,682 | 74,539 | 3 | 2 | |||||||||||||||||||||
Subprime mortgage | 9,664 | 10,045 | 10,441 | 10,841 | 11,287 | (4 | ) | (14 | ) | |||||||||||||||||||
Auto | 47,426 | 46,659 | 46,796 | 47,411 | 48,367 | 2 | (2 | ) | ||||||||||||||||||||
Business banking | 17,652 | 17,272 | 17,141 | 16,957 | 16,812 | 2 | 5 | |||||||||||||||||||||
Student and other | 14,143 | 14,492 | 14,770 | 15,089 | 15,311 | (2 | ) | (8 | ) | |||||||||||||||||||
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Total loans, excluding PCI loans and loans held-for-sale | 242,881 | 242,976 | 246,175 | 250,233 | 254,701 | — | (5 | ) | ||||||||||||||||||||
Loans — PCI (c) | ||||||||||||||||||||||||||||
Home equity | 22,697 | 23,105 | 23,535 | 23,973 | 24,459 | (2 | ) | (7 | ) | |||||||||||||||||||
Prime mortgage | 15,180 | 15,626 | 16,200 | 16,725 | 17,322 | (3 | ) | (12 | ) | |||||||||||||||||||
Subprime mortgage | 4,976 | 5,072 | 5,187 | 5,276 | 5,398 | (2 | ) | (8 | ) | |||||||||||||||||||
Option ARMs | 22,693 | 23,325 | 24,072 | 24,791 | 25,584 | (3 | ) | (11 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total loans — PCI | 65,546 | 67,128 | 68,994 | 70,765 | 72,763 | (2 | ) | (10 | ) | |||||||||||||||||||
Total loans — retained | 308,427 | 310,104 | 315,169 | 320,998 | 327,464 | (1 | ) | (6 | ) | |||||||||||||||||||
Loans held-for-sale (d) | — | 131 | 221 | 188 | 154 | NM | NM | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total consumer, excluding credit card loans | 308,427 | 310,235 | 315,390 | 321,186 | 327,618 | (1 | ) | (6 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Credit card | ||||||||||||||||||||||||||||
Loans retained | 132,175 | 127,041 | 125,523 | 124,791 | 135,524 | 4 | (2 | ) | ||||||||||||||||||||
Loans held-for-sale | 102 | 94 | — | 4,012 | 2,152 | 9 | (95 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total credit card (b) | 132,277 | 127,135 | 125,523 | 128,803 | 137,676 | 4 | (4 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total consumer loans (e) | 440,704 | 437,370 | 440,913 | 449,989 | 465,294 | 1 | (5 | ) | ||||||||||||||||||||
Total loans | 723,720 | 696,853 | 689,736 | 685,996 | 692,927 | 4 | 4 | |||||||||||||||||||||
Derivative receivables | 92,477 | 108,853 | 77,383 | 78,744 | 80,481 | (15 | ) | 15 | ||||||||||||||||||||
Receivables from customers and interests in | 17,561 | 25,719 | 32,678 | 38,230 | 32,932 | (32 | ) | (47 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total credit-related assets | 110,038 | 134,572 | 110,061 | 116,974 | 113,413 | (18 | ) | (3 | ) | |||||||||||||||||||
Wholesale lending-related commitments | 382,739 | 379,682 | 365,689 | 355,561 | 346,079 | 1 | 11 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total | $ | 1,216,497 | $ | 1,211,107 | $ | 1,165,486 | $ | 1,158,531 | $ | 1,152,419 | — | 6 | ||||||||||||||||
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|
|
|
|
|
|
|
| |||||||||||||||||||
Memo: Total by category | ||||||||||||||||||||||||||||
Total wholesale exposure (g) | $ | 775,693 | $ | 773,633 | $ | 724,573 | $ | 708,542 | $ | 687,125 | — | 13 | ||||||||||||||||
Total consumer loans (h) | 440,804 | 437,474 | 440,913 | 449,989 | 465,294 | 1 | (5 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total | $ | 1,216,497 | $ | 1,211,107 | $ | 1,165,486 | $ | 1,158,531 | $ | 1,152,419 | — | 6 | ||||||||||||||||
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|
|
|
|
|
|
|
|
|
(a) | Includes IB, CB, TSS, AM and Corporate/Private Equity. |
(b) | Effective January 1, 2011, the commercial card business that was previously in TSS was transferred to Card. There is no material impact on the financial data; prior-year periods were not revised. |
(c) | PCI loans represent loans acquired in the Washington Mutual transaction for which a deterioration in credit quality occurred between the origination date and JPMorgan Chase’s acquisition date. These loans were initially recorded at fair value and accrete interest income over the estimated lives of the underlying loans as long as cash flows are reasonably estimable, even if the underlying loans are contractually past due. |
(d) | Represents prime mortgages for all periods presented. |
(e) | Includes RFS, Card and residential real estate loans reported in the Corporate/Private Equity segment. |
(f) | Receivables from customers represent primarily margin loans to prime and retail brokerage customers, which are included in accrued interest and accounts receivable on the Consolidated Balance Sheets. |
(g) | Primarily represents total wholesale loans, wholesale lending-related commitments, derivative receivables and receivables from customers. |
(h) | Represents total consumer loans and excludes consumer lending-related commitments. |
Page 35
JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions, except ratio data) |
December 31, 2011 Change | ||||||||||||||||||||||||||||
Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | Dec 31, 2010 | Sep 30, 2011 | Dec 31, 2010 | ||||||||||||||||||||||
NONPERFORMING ASSETS AND RATIOS | ||||||||||||||||||||||||||||
Wholesale | ||||||||||||||||||||||||||||
Loans retained | $ | 2,398 | $ | 3,011 | $ | 3,362 | $ | 4,578 | $ | 5,510 | (20 | )% | (56 | )% | ||||||||||||||
Loans held-for-sale and loans at fair value | 183 | 176 | 214 | 289 | 496 | 4 | (63 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total wholesale loans | 2,581 | 3,187 | 3,576 | 4,867 | 6,006 | (19 | ) | (57 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Consumer, excluding credit card | ||||||||||||||||||||||||||||
Home equity | 1,287 | 1,290 | 1,308 | 1,263 | 1,263 | — | 2 | |||||||||||||||||||||
Prime mortgage, including option ARMs | 3,462 | 3,656 | 4,024 | 4,166 | 4,320 | (5 | ) | (20 | ) | |||||||||||||||||||
Subprime mortgage | 1,781 | 1,932 | 2,058 | 2,106 | 2,210 | (8 | ) | (19 | ) | |||||||||||||||||||
Auto | 118 | 114 | 111 | 120 | 141 | 4 | (16 | ) | ||||||||||||||||||||
Business banking | 694 | 756 | 770 | 810 | 832 | (8 | ) | (17 | ) | |||||||||||||||||||
Student and other | 69 | 68 | 79 | 107 | 67 | 1 | 3 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total consumer, excluding credit card | 7,411 | 7,816 | 8,350 | 8,572 | 8,833 | (5 | ) | (16 | ) | |||||||||||||||||||
Total credit card | 1 | 2 | 2 | 2 | 2 | (50 | ) | (50 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total consumer nonaccrual loans (a)(b) | 7,412 | 7,818 | 8,352 | 8,574 | 8,835 | (5 | ) | (16 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total nonaccrual loans | 9,993 | 11,005 | 11,928 | 13,441 | 14,841 | (9 | ) | (33 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Derivative receivables | 18 | 11 | 22 | 21 | 34 | 64 | (47 | ) | ||||||||||||||||||||
Assets acquired in loan satisfactions | 1,025 | 1,178 | 1,290 | 1,524 | 1,682 | (13 | ) | (39 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total nonperforming assets (a) | 11,036 | 12,194 | 13,240 | 14,986 | 16,557 | (9 | ) | (33 | ) | |||||||||||||||||||
Wholesale lending-related commitments (c) | 865 | 705 | 793 | 895 | 1,005 | 23 | (14 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total (a) | $ | 11,901 | $ | 12,899 | $ | 14,033 | $ | 15,881 | $ | 17,562 | (8 | ) | (32 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total nonaccrual loans to total loans | 1.38 | % | 1.58 | % | 1.73 | % | 1.96 | % | 2.14 | % | ||||||||||||||||||
Total wholesale nonaccrual loans to total wholesale loans | 0.91 | 1.23 | 1.44 | 2.06 | 2.64 | |||||||||||||||||||||||
Total consumer, excluding credit card nonaccrual | 2.40 | 2.52 | 2.65 | 2.67 | 2.70 | |||||||||||||||||||||||
NONPERFORMING ASSETS BY LOB | ||||||||||||||||||||||||||||
Investment Bank | $ | 1,294 | $ | 1,508 | $ | 1,788 | $ | 2,741 | $ | 3,770 | (14 | ) | (66 | ) | ||||||||||||||
Retail Financial Services (b) | 7,961 | 8,444 | 9,033 | 9,482 | 9,854 | (6 | ) | (19 | ) | |||||||||||||||||||
Card Services & Auto | 228 | 232 | 233 | 275 | 269 | (2 | ) | (15 | ) | |||||||||||||||||||
Commercial Banking | 1,138 | 1,611 | 1,831 | 2,134 | 2,197 | (29 | ) | (48 | ) | |||||||||||||||||||
Treasury & Securities Services | 4 | 3 | 3 | 11 | 12 | 33 | (67 | ) | ||||||||||||||||||||
Asset Management | 336 | 322 | 264 | 263 | 382 | 4 | (12 | ) | ||||||||||||||||||||
Corporate/Private Equity (d) | 75 | 74 | 88 | 80 | 73 | 1 | 3 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
TOTAL | $ | 11,036 | $ | 12,194 | $ | 13,240 | $ | 14,986 | $ | 16,557 | (9 | ) | (33 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) | At December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, nonperforming assets excluded: (1) mortgage loans insured by U.S. government agencies of $11.5 billion, $9.5 billion, $9.1 billion, $8.8 billion and $9.4 billion, respectively, that are 90 or more days past due; (2) real estate owned insured by U.S. government agencies of $1.0 billion, $2.4 billion, $2.4 billion, $2.3 billion and $1.9 billion, respectively; and (3) student loans insured by U.S. government agencies under the FFELP of $551 million, $567 million, $558 million, $615 million and $625 million, respectively, that are 90 or more days past due. These amounts are excluded as reimbursement of insured amounts is proceeding normally. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance issued by the Federal Financial Institutions Examination Council (“FFIEC”). Credit card loans are charged off by the end of the month in which the account becomes 180 days past due or within 60 days from receiving notification about a specified event (e.g., bankruptcy of the borrower), whichever is earlier. |
(b) | Excludes PCI loans acquired as part of the Washington Mutual transaction, which are accounted for on a pool basis. Since each pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, the past-due status of the pools, or that of the individual loans within the pools, is not meaningful. Because the Firm is recognizing interest income on each pool of loans, they are all considered to be performing. Also excludes loans held-for-sale and loans at fair value. |
(c) | Represent commitments that are risk rated as nonaccrual. |
(d) | Predominantly relates to retained prime mortgage loans. |
Page 36
JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions, except ratio data) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
GROSS CHARGE-OFFS | ||||||||||||||||||||||||||||||||||||||||
Wholesale loans | $ | 431 | $ | 98 | $ | 134 | $ | 253 | $ | 414 | 340 | % | 4 | % | $ | 916 | $ | 1,989 | (54 | )% | ||||||||||||||||||||
Consumer loans, excluding credit card | 1,310 | 1,292 | 1,357 | 1,460 | 2,277 | 1 | (42 | ) | 5,419 | 8,383 | (35 | ) | ||||||||||||||||||||||||||||
Credit card loans | 1,641 | 1,765 | 2,131 | 2,631 | 2,980 | (7 | ) | (45 | ) | 8,168 | 15,410 | (47 | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total consumer loans | 2,951 | 3,057 | 3,488 | 4,091 | 5,257 | (3 | ) | (44 | ) | 13,587 | 23,793 | (43 | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total loans | $ | 3,382 | $ | 3,155 | $ | 3,622 | $ | 4,344 | $ | 5,671 | 7 | (40 | ) | $ | 14,503 | $ | 25,782 | (44 | ) | |||||||||||||||||||||
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|
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|
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|
|
|
|
|
|
| |||||||||||||||||||||||||||
GROSS RECOVERIES | ||||||||||||||||||||||||||||||||||||||||
Wholesale loans | $ | 85 | $ | 249 | $ | 54 | $ | 88 | $ | 143 | (66 | ) | (41 | ) | $ | 476 | $ | 262 | 82 | |||||||||||||||||||||
Consumer loans, excluding credit card | 139 | 133 | 144 | 131 | 115 | 5 | 21 | 547 | 474 | 15 | ||||||||||||||||||||||||||||||
Credit card loans | 251 | 266 | 321 | 405 | 309 | (6 | ) | (19 | ) | 1,243 | 1,373 | (9 | ) | |||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total consumer loans | 390 | 399 | 465 | 536 | 424 | (2 | ) | (8 | ) | 1,790 | 1,847 | (3 | ) | |||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total loans | $ | 475 | $ | 648 | $ | 519 | $ | 624 | $ | 567 | (27 | ) | (16 | ) | $ | 2,266 | $ | 2,109 | 7 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
NET CHARGE-OFFS/(RECOVERIES) | ||||||||||||||||||||||||||||||||||||||||
Wholesale loans | $ | 346 | $ | (151 | ) | $ | 80 | $ | 165 | $ | 271 | NM | 28 | $ | 440 | $ | 1,727 | (75 | ) | |||||||||||||||||||||
Consumer loans, excluding credit card | 1,171 | 1,159 | 1,213 | 1,329 | 2,162 | (b) | 1 | (46 | ) | 4,872 | 7,909 | (38 | ) | |||||||||||||||||||||||||||
Credit card loans | 1,390 | 1,499 | 1,810 | 2,226 | 2,671 | (7 | ) | (48 | ) | 6,925 | 14,037 | (51 | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total consumer loans | 2,561 | 2,658 | 3,023 | 3,555 | 4,833 | (4 | ) | (47 | ) | 11,797 | 21,946 | (46 | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total loans | $ | 2,907 | $ | 2,507 | $ | 3,103 | $ | 3,720 | $ | 5,104 | (b) | 16 | (43 | ) | $ | 12,237 | $ | 23,673 | (48 | ) | ||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
NET CHARGE-OFF/(RECOVERY) RATES | ||||||||||||||||||||||||||||||||||||||||
Wholesale retained loans | 0.52 | % | (0.24 | ) % | 0.14 | % | 0.30 | % | 0.49 | % | 0.18 | % | 0.81 | % | ||||||||||||||||||||||||||
Consumer retained loans, excluding credit card | 1.50 | 1.47 | 1.53 | 1.66 | 2.60 | (b) | 1.54 | 2.32 | ||||||||||||||||||||||||||||||||
Credit card retained loans | 4.29 | 4.70 | 5.82 | 6.97 | 7.85 | 5.44 | 9.73 | |||||||||||||||||||||||||||||||||
Total retained loans | 1.64 | 1.44 | 1.83 | 2.22 | 2.95 | (b) | 1.78 | 3.39 | ||||||||||||||||||||||||||||||||
Consumer retained loans, excluding credit card and PCI loans (a) | 1.91 | 1.88 | 1.96 | 2.14 | 3.34 | (b) | 1.97 | 3.00 | ||||||||||||||||||||||||||||||||
Consumer retained loans, excluding PCI loans (a) | 2.74 | 2.84 | 3.25 | 3.77 | 4.89 | 3.15 | 5.38 | |||||||||||||||||||||||||||||||||
Total retained loans, excluding PCI loans (a) | 1.81 | 1.60 | 2.04 | 2.48 | 3.31 | (b) | 1.98 | 3.81 | ||||||||||||||||||||||||||||||||
Memo: Average retained loans | ||||||||||||||||||||||||||||||||||||||||
Wholesale loans | $ | 265,758 | $ | 250,145 | $ | 237,511 | $ | 226,544 | $ | 219,750 | 6 | 21 | $ | 245,111 | $ | 213,609 | 15 | |||||||||||||||||||||||
Consumer retained loans, excluding credit card | 308,980 | 312,341 | 317,862 | 323,961 | 330,524 | (1 | ) | (7 | ) | 315,736 | 340,334 | (7 | ) | |||||||||||||||||||||||||||
Credit card retained loans | 128,522 | 126,535 | 124,762 | 129,535 | 134,999 | 2 | (5 | ) | 127,334 | 144,219 | (12 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total average retained consumer loans | 437,502 | 438,876 | 442,624 | 453,496 | 465,523 | — | (6 | ) | 443,070 | 484,553 | (9 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total average retained loans | $ | 703,260 | $ | 689,021 | $ | 680,135 | $ | 680,040 | $ | 685,273 | 2 | 3 | $ | 688,181 | $ | 698,162 | (1 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Consumer retained loans, excluding credit card and PCI loans (a) | $ | 242,670 | $ | 244,337 | $ | 248,028 | $ | 252,403 | $ | 256,884 | (1 | ) | (6 | ) | $ | 246,826 | $ | 263,462 | (6 | ) | ||||||||||||||||||||
Consumer retained loans, excluding PCI loans (a) | 371,192 | 370,872 | 372,790 | 381,938 | 391,883 | — | (5 | ) | 374,159 | 407,681 | (8 | ) | ||||||||||||||||||||||||||||
Total retained loans, excluding PCI loans (a) | 636,923 | 620,974 | 610,246 | 608,432 | 611,572 | 3 | 4 | 619,227 | 621,198 | — |
(a) | Charge-offs are not recorded on PCI loans until actual losses exceed estimated losses that were recorded as purchase accounting adjustments at the time of acquisition. To date, no charge-offs have been recorded for these loans. |
(b) | Net charge-offs and net charge-off rates for the fourth quarter of 2010 include the effect of $632 million of charge-offs related to an adjustment of the estimated net realizable value of the collateral underlying delinquent residential home loans. Excluding this adjustment, net charge-offs for the fourth quarter of 2010 were $1.5 billion for total consumer, excluding credit card loans, and $4.5 billion for total loans. Net charge-off rates excluding this adjustment were 1.84% for total consumer, excluding credit card, 2.59% for total retained loans, 2.36% for total consumer, excluding credit card and PCI loans, and 2.90% for total retained loans, excluding PCI loans. |
Page 37
JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
SUMMARY OF CHANGES IN THE ALLOWANCES | ||||||||||||||||||||||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES | ||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 28,350 | $ | 28,520 | $ | 29,750 | $ | 32,266 | $ | 34,161 | (1 | )% | (17 | )% | $ | 32,266 | $ | 31,602 | 2 | % | ||||||||||||||||||||
Cumulative effect of change in accounting principles (a) | — | — | — | — | — | — | — | — | 7,494 | NM | ||||||||||||||||||||||||||||||
Net charge-offs | 2,907 | 2,507 | 3,103 | 3,720 | 5,104 | 16 | (43 | ) | 12,237 | 23,673 | (48 | ) | ||||||||||||||||||||||||||||
Provision for loan losses | 2,193 | 2,351 | 1,872 | 1,196 | 3,207 | (7 | ) | (32 | ) | 7,612 | 16,822 | (55 | ) | |||||||||||||||||||||||||||
Other | (27 | ) | (14 | ) | 1 | 8 | 2 | (93 | ) | NM | (32 | ) | 21 | NM | ||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||
Ending balance | $ | 27,609 | $ | 28,350 | $ | 28,520 | $ | 29,750 | $ | 32,266 | (3 | ) | (14 | ) | $ | 27,609 | $ | 32,266 | (14 | ) | ||||||||||||||||||||
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|
| |||||||||||||||||||||||||||
ALLOWANCE FOR LENDING-RELATED COMMITMENTS | ||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 686 | $ | 626 | $ | 688 | $ | 717 | $ | 873 | 10 | (21 | ) | $ | 717 | $ | 939 | (24 | ) | |||||||||||||||||||||
Cumulative effect of change in accounting principles (a) | — | — | — | — | — | — | — | — | (18 | ) | NM | |||||||||||||||||||||||||||||
Provision for lending-related commitments | (9 | ) | 60 | (62 | ) | (27 | ) | (164 | ) | NM | 95 | (38 | ) | (183 | ) | 79 | ||||||||||||||||||||||||
Other | (4 | ) | — | — | (2 | ) | 8 | NM | NM | (6 | ) | (21 | ) | 71 | ||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||
Ending balance | $ | 673 | $ | 686 | $ | 626 | $ | 688 | $ | 717 | (2 | ) | (6 | ) | $ | 673 | $ | 717 | (6 | ) | ||||||||||||||||||||
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|
|
|
|
|
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|
|
|
|
|
|
| |||||||||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES BY LOB | ||||||||||||||||||||||||||||||||||||||||
Investment Bank (a) | $ | 1,436 | $ | 1,337 | $ | 1,178 | $ | 1,330 | $ | 1,863 | 7 | (23 | ) | |||||||||||||||||||||||||||
Retail Financial Services (a) | 15,247 | 15,479 | 15,479 | 15,554 | 15,554 | (1 | ) | (2 | ) | |||||||||||||||||||||||||||||||
Card Services & Auto (a) | 8,009 | 8,537 | 8,921 | 9,940 | 11,933 | (6 | ) | (33 | ) | |||||||||||||||||||||||||||||||
Commercial Banking | 2,603 | 2,671 | 2,614 | 2,577 | 2,552 | (3 | ) | 2 | ||||||||||||||||||||||||||||||||
Treasury & Securities Services | 65 | 49 | 74 | 69 | 65 | 33 | — | |||||||||||||||||||||||||||||||||
Asset Management | 209 | 240 | 222 | 257 | 267 | (13 | ) | (22 | ) | |||||||||||||||||||||||||||||||
Corporate/Private Equity | 40 | 37 | 32 | 23 | 32 | 8 | 25 | |||||||||||||||||||||||||||||||||
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|
|
|
|
|
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|
|
| |||||||||||||||||||||||||||||||
Total | $ | 27,609 | $ | 28,350 | $ | 28,520 | $ | 29,750 | $ | 32,266 | (3 | ) | (14 | ) | ||||||||||||||||||||||||||
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|
|
(a) | Effective January 1, 2010, the Firm adopted accounting guidance related to VIEs. Upon the adoption of the guidance, the Firm consolidated its Firm-sponsored credit card securitization trusts, its Firm-administered multi-seller conduits and certain other consumer loan securitization entities, primarily mortgage-related. As a result of the consolidation, $7.5 billion of allowance for loan losses were recorded on balance sheet with the consolidation of these entities. |
Page 38
JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions, except ratio data) |
December 31, 2011 Change | ||||||||||||||||||||||||||||
Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | Dec 31, 2010 | Sep 30, 2011 | Dec 31, 2010 | ||||||||||||||||||||||
ALLOWANCE COMPONENTS AND RATIOS | ||||||||||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES | ||||||||||||||||||||||||||||
Wholesale | ||||||||||||||||||||||||||||
Asset-specific | $ | 516 | $ | 670 | $ | 749 | $ | 1,030 | $ | 1,574 | (23 | )% | (67 | )% | ||||||||||||||
Formula-based | 3,800 | 3,632 | 3,342 | 3,204 | 3,187 | 5 | 19 | |||||||||||||||||||||
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| |||||||||||||||||||
Total wholesale | 4,316 | 4,302 | 4,091 | 4,234 | 4,761 | — | (9 | ) | ||||||||||||||||||||
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| |||||||||||||||||||
Consumer, excluding credit card | ||||||||||||||||||||||||||||
Asset-specific | 828 | 1,016 | 1,049 | 1,067 | 1,075 | (19 | ) | (23 | ) | |||||||||||||||||||
Formula-based | 9,755 | 10,563 | 10,397 | 10,467 | 10,455 | (8 | ) | (7 | ) | |||||||||||||||||||
PCI | 5,711 | 4,941 | 4,941 | 4,941 | 4,941 | 16 | 16 | |||||||||||||||||||||
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|
|
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| |||||||||||||||||||
Total consumer, excluding credit card | 16,294 | 16,520 | 16,387 | 16,475 | 16,471 | (1 | ) | (1 | ) | |||||||||||||||||||
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| |||||||||||||||||||
Credit card | ||||||||||||||||||||||||||||
Asset-specific | 2,727 | 3,052 | 3,451 | 3,819 | 4,069 | (11 | ) | (33 | ) | |||||||||||||||||||
Formula-based | 4,272 | 4,476 | 4,591 | 5,222 | 6,965 | (5 | ) | (39 | ) | |||||||||||||||||||
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| |||||||||||||||||||
Total credit card | 6,999 | 7,528 | 8,042 | 9,041 | 11,034 | (7 | ) | (37 | ) | |||||||||||||||||||
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| |||||||||||||||||||
Total consumer | 23,293 | 24,048 | 24,429 | 25,516 | 27,505 | (3 | ) | (15 | ) | |||||||||||||||||||
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|
|
|
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| |||||||||||||||||||
Total allowance for loan losses | 27,609 | 28,350 | 28,520 | 29,750 | 32,266 | (3 | ) | (14 | ) | |||||||||||||||||||
Allowance for lending-related commitments | 673 | 686 | 626 | 688 | 717 | (2 | ) | (6 | ) | |||||||||||||||||||
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|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total allowance for credit losses | $ | 28,282 | $ | 29,036 | $ | 29,146 | $ | 30,438 | $ | 32,983 | (3 | ) | (14 | ) | ||||||||||||||
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| |||||||||||||||||||
CREDIT RATIOS | ||||||||||||||||||||||||||||
Wholesale allowance to total wholesale retained loans | 1.55 | % | 1.68 | % | 1.68 | % | 1.84 | % | 2.14 | % | ||||||||||||||||||
Consumer, excluding credit card allowance, to total consumer, excluding credit card retained loans | 5.28 | 5.33 | 5.20 | 5.13 | 5.03 | |||||||||||||||||||||||
Credit card allowance to total credit card retained loans | 5.30 | 5.93 | 6.41 | 7.24 | 8.14 | |||||||||||||||||||||||
Total allowance to total retained loans | 3.84 | 4.09 | 4.16 | 4.40 | 4.71 | |||||||||||||||||||||||
Wholesale allowance to wholesale retained nonaccrual loans | 180 | 143 | 122 | 92 | 86 | |||||||||||||||||||||||
Consumer, excluding credit card allowance, to consumer, excluding credit card retained nonaccrual loans (a) | 220 | 211 | 196 | 192 | 186 | |||||||||||||||||||||||
Allowance, excluding credit card allowance, to retained non-accrual loans, excluding credit card nonaccrual loans (a) | 210 | 192 | 175 | 157 | 148 | |||||||||||||||||||||||
Total allowance to total retained nonaccrual loans | 281 | 262 | 243 | 226 | 225 | |||||||||||||||||||||||
CREDIT RATIOS, excluding PCI loans (b) | ||||||||||||||||||||||||||||
Consumer, excluding credit card allowance, to total consumer, excluding credit card retained loans | 4.36 | 4.77 | 4.65 | 4.61 | 4.53 | |||||||||||||||||||||||
Total allowance to total retained loans | 3.35 | 3.74 | 3.83 | 4.10 | 4.46 | |||||||||||||||||||||||
Consumer, excluding credit card allowance, to consumer, excluding credit card retained nonaccrual loans (a) | 143 | 148 | 137 | 135 | 131 | |||||||||||||||||||||||
Allowance, excluding credit card allowance, to retained non-accrual loans, excluding credit card nonaccrual loans (a) | 152 | 147 | 133 | 120 | 114 | |||||||||||||||||||||||
Total allowance to total retained nonaccrual loans | 223 | 216 | 201 | 189 | 190 |
(a) | The Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance. Under guidance issued by the FFIEC, credit card loans are charged off by the end of the month in which the account becomes 180 days past due or within 60 days from receiving notification about a specified event (e.g., bankruptcy of the borrower), whichever is earlier. |
(b) | Excludes the impact of PCI loans that were acquired as part of the Washington Mutual transaction. |
Page 39
JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
PROVISION FOR CREDIT LOSSES BY LINE OF BUSINESS | ||||||||||||||||||||||||||||||||||||||||
Provision for loan losses | ||||||||||||||||||||||||||||||||||||||||
Investment Bank | $ | 298 | $ | (7 | ) | $ | (142 | ) | $ | (409 | ) | $ | (140 | ) | NM | % | NM | % | $ | (260 | ) | $ | (1,193 | ) | 78 | % | ||||||||||||||
Retail Financial Services | 777 | 1,027 | 994 | 1,199 | 2,418 | (24 | ) | (68 | ) | 3,997 | 8,919 | (55 | ) | |||||||||||||||||||||||||||
Card Services & Auto | 1,061 | 1,264 | 944 | 353 | 710 | (16 | ) | 49 | 3,622 | 8,576 | (58 | ) | ||||||||||||||||||||||||||||
Commercial Banking | 29 | 73 | 73 | 51 | 184 | (60 | ) | (84 | ) | 226 | 437 | (48 | ) | |||||||||||||||||||||||||||
Treasury & Securities Services | 16 | (25 | ) | 5 | 7 | 11 | NM | 45 | 3 | (22 | ) | NM | ||||||||||||||||||||||||||||
Asset Management | 23 | 26 | 7 | 5 | 22 | (12 | ) | 5 | 61 | 91 | (33 | ) | ||||||||||||||||||||||||||||
Corporate/Private Equity | (11 | ) | (7 | ) | (9 | ) | (10 | ) | 2 | (57 | ) | NM | (37 | ) | 14 | NM | ||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total provision for loan losses | $ | 2,193 | $ | 2,351 | $ | 1,872 | $ | 1,196 | $ | 3,207 | (7 | ) | (32 | ) | $ | 7,612 | $ | 16,822 | (55 | ) | ||||||||||||||||||||
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|
|
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|
|
|
|
|
|
| |||||||||||||||||||||||||||
Provision for lending-related commitments | ||||||||||||||||||||||||||||||||||||||||
Investment Bank | $ | (26 | ) | $ | 61 | $ | (41 | ) | $ | (20 | ) | $ | (131 | ) | NM | 80 | $ | (26 | ) | $ | (7 | ) | (271 | ) | ||||||||||||||||
Retail Financial Services | 2 | — | — | — | — | NM | NM | 2 | — | NM | ||||||||||||||||||||||||||||||
Card Services & Auto | (1 | ) | — | — | — | (1 | ) | NM | — | (1 | ) | (6 | ) | 83 | ||||||||||||||||||||||||||
Commercial Banking | 11 | (6 | ) | (19 | ) | (4 | ) | (32 | ) | NM | NM | (18 | ) | (140 | ) | 87 | ||||||||||||||||||||||||
Treasury & Securities Services | 3 | 5 | (7 | ) | (3 | ) | (1 | ) | (40 | ) | NM | (2 | ) | (25 | ) | 92 | ||||||||||||||||||||||||
Asset Management | 1 | — | 5 | — | 1 | NM | — | 6 | (5 | ) | NM | |||||||||||||||||||||||||||||
Corporate/Private Equity | 1 | — | — | — | — | NM | NM | 1 | — | NM | ||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total provision for lending-related commitments | $ | (9 | ) | $ | 60 | $ | (62 | ) | $ | (27 | ) | $ | (164 | ) | NM | 95 | $ | (38 | ) | $ | (183 | ) | 79 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Provision for credit losses | ||||||||||||||||||||||||||||||||||||||||
Investment Bank | $ | 272 | $ | 54 | $ | (183 | ) | $ | (429 | ) | $ | (271 | ) | 404 | NM | $ | (286 | ) | $ | (1,200 | ) | 76 | ||||||||||||||||||
Retail Financial Services | 779 | 1,027 | 994 | 1,199 | 2,418 | (24 | ) | (68 | ) | 3,999 | 8,919 | (55 | ) | |||||||||||||||||||||||||||
Card Services & Auto | 1,060 | 1,264 | 944 | 353 | 709 | (16 | ) | 50 | 3,621 | 8,570 | (58 | ) | ||||||||||||||||||||||||||||
Commercial Banking | 40 | 67 | 54 | 47 | 152 | (40 | ) | (74 | ) | 208 | 297 | (30 | ) | |||||||||||||||||||||||||||
Treasury & Securities Services | 19 | (20 | ) | (2 | ) | 4 | 10 | NM | 90 | 1 | (47 | ) | NM | |||||||||||||||||||||||||||
Asset Management | 24 | 26 | 12 | 5 | 23 | (8 | ) | 4 | 67 | 86 | (22 | ) | ||||||||||||||||||||||||||||
Corporate/Private Equity | (10 | ) | (7 | ) | (9 | ) | (10 | ) | 2 | (43 | ) | NM | (36 | ) | 14 | NM | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total provision for credit losses | $ | 2,184 | $ | 2,411 | $ | 1,810 | $ | 1,169 | $ | 3,043 | (9 | ) | (28 | ) | $ | 7,574 | $ | 16,639 | (54 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||
PROVISION FOR CREDIT LOSSES BY PORTFOLIO SEGMENT | ||||||||||||||||||||||||||||||||||||||||
Provision for loan losses | ||||||||||||||||||||||||||||||||||||||||
Wholesale | $ | 364 | $ | 67 | $ | (55 | ) | $ | (359 | ) | $ | 77 | 443 | 373 | $ | 17 | $ | (673 | ) | NM | ||||||||||||||||||||
Consumer, excluding credit card | 939 | 1,285 | 1,117 | 1,329 | 2,459 | (27 | ) | (62 | ) | 4,670 | 9,458 | (51 | ) | |||||||||||||||||||||||||||
Credit card | 890 | 999 | 810 | 226 | 671 | (11 | ) | 33 | 2,925 | 8,037 | (64 | ) | ||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total consumer | 1,829 | 2,284 | 1,927 | 1,555 | 3,130 | (20 | ) | (42 | ) | 7,595 | 17,495 | (57 | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total provision for loan losses | $ | 2,193 | $ | 2,351 | $ | 1,872 | $ | 1,196 | $ | 3,207 | (7 | ) | (32 | ) | $ | 7,612 | $ | 16,822 | (55 | ) | ||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Provision for lending-related commitments | ||||||||||||||||||||||||||||||||||||||||
Wholesale | $ | (11 | ) | $ | 60 | $ | (62 | ) | $ | (27 | ) | $ | (163 | ) | NM | 93 | $ | (40 | ) | $ | (177 | ) | 77 | |||||||||||||||||
Consumer, excluding credit card | 2 | — | — | — | (1 | ) | NM | NM | 2 | (6 | ) | NM | ||||||||||||||||||||||||||||
Credit card | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total consumer | 2 | — | — | — | (1 | ) | NM | NM | 2 | (6 | ) | NM | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total provision for lending-related commitments | $ | (9 | ) | $ | 60 | $ | (62 | ) | $ | (27 | ) | $ | (164 | ) | NM | 95 | $ | (38 | ) | $ | (183 | ) | 79 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Provision for credit losses | ||||||||||||||||||||||||||||||||||||||||
Wholesale | $ | 353 | $ | 127 | $ | (117 | ) | $ | (386 | ) | $ | (86 | ) | 178 | NM | $ | (23 | ) | $ | (850 | ) | 97 | ||||||||||||||||||
Consumer, excluding credit card | 941 | 1,285 | 1,117 | 1,329 | 2,458 | (27 | ) | (62 | ) | 4,672 | 9,452 | (51 | ) | |||||||||||||||||||||||||||
Credit card | 890 | 999 | 810 | 226 | 671 | (11 | ) | 33 | 2,925 | 8,037 | (64 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total consumer | 1,831 | 2,284 | 1,927 | 1,555 | 3,129 | (20 | ) | (41 | ) | 7,597 | 17,489 | (57 | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total provision for credit losses | $ | 2,184 | $ | 2,411 | $ | 1,810 | $ | 1,169 | $ | 3,043 | (9 | ) | (28 | ) | $ | 7,574 | $ | 16,639 | (54 | ) | ||||||||||||||||||||
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Page 40
JPMORGAN CHASE & CO. MARKET RISK-RELATED INFORMATION (in millions) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
95% CONFIDENCE LEVEL- AVERAGE IB TRADING VAR,CREDIT PORTFOLIO VAR AND OTHER VAR | ||||||||||||||||||||||||||||||||||||||||
IB VaR by risk type: | ||||||||||||||||||||||||||||||||||||||||
Fixed income | $ | 56 | $ | 48 | $ | 45 | $ | 49 | $ | 53 | 17 | % | 6 | % | $ | 50 | $ | 65 | (23 | )% | ||||||||||||||||||||
Foreign exchange | 12 | 10 | 9 | 11 | 10 | 20 | 20 | 11 | 11 | — | ||||||||||||||||||||||||||||||
Equities | 19 | 19 | 25 | 29 | 23 | — | (17 | ) | 23 | 22 | 5 | |||||||||||||||||||||||||||||
Commodities and other | 20 | 15 | 16 | 13 | 14 | 33 | 43 | 16 | 16 | — | ||||||||||||||||||||||||||||||
Diversification benefit to IB trading VaR (a) | (50 | ) | (39 | ) | (37 | ) | (38 | ) | (38 | ) | (28 | ) | (32 | ) | (42 | ) | (43 | ) | 2 | |||||||||||||||||||||
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| |||||||||||||||||||||||||||
IB trading VaR (b) | 57 | 53 | 58 | 64 | 62 | 8 | (8 | ) | 58 | 71 | (18 | ) | ||||||||||||||||||||||||||||
Credit portfolio VaR (c) | 39 | 38 | 27 | 26 | 26 | 3 | 50 | 33 | 26 | 27 | ||||||||||||||||||||||||||||||
Diversification benefit to IB trading and credit portfolio VaR (a) | (21 | ) | (21 | ) | (8 | ) | (7 | ) | (10 | ) | — | (110 | ) | (15 | ) | (10 | ) | (50 | ) | |||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total IB trading and credit portfolio VaR | 75 | 70 | 77 | 83 | 78 | 7 | (4 | ) | 76 | 87 | (13 | ) | ||||||||||||||||||||||||||||
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|
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|
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| |||||||||||||||||||||||||||
Other VaR: | ||||||||||||||||||||||||||||||||||||||||
Mortgage Production and Servicing VaR (d) | 44 | 40 | 20 | 16 | 17 | 10 | 159 | 30 | 23 | 30 | ||||||||||||||||||||||||||||||
Chief Investment Office VaR (e) | 69 | 48 | 51 | 60 | 49 | 44 | 41 | 57 | 61 | (7 | ) | |||||||||||||||||||||||||||||
Diversification benefit to total other VaR (a) | (30 | ) | (15 | ) | (10 | ) | (14 | ) | (10 | ) | (100 | ) | (200 | ) | (17 | ) | (13 | ) | (31 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total other VaR | 83 | 73 | 61 | 62 | 56 | 14 | 48 | 70 | 71 | (1 | ) | |||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Diversification benefit to total IB and other VaR (a) | (45 | ) | (35 | ) | (44 | ) | (57 | ) | (39 | ) | (29 | ) | (15 | ) | (45 | ) | (59 | ) | 24 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total IB and other VaR (f) | $ | 113 | $ | 108 | $ | 94 | $ | 88 | $ | 95 | 5 | 19 | $ | 101 | $ | 99 | 2 | |||||||||||||||||||||||
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|
|
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|
|
|
(a) | Average VaR was less than the sum of the VaR of the components described above, which is due to portfolio diversification. The diversification effect reflects the fact that the risks were not perfectly correlated. The risk of a portfolio of positions is therefore usually less than the sum of the risks of the positions themselves. |
(b) | IB trading VaR includes substantially all trading activities in IB, including the credit spread sensitivity of certain mortgage products and syndicated lending facilities that the Firm intends to distribute; however, particular risk parameters of certain products are not fully captured, for example, correlation risk. IB trading VaR does not include the DVA taken on derivative and structured liabilities to reflect the credit quality of the Firm. |
(c) | Credit portfolio VaR includes the derivative CVA, hedges of the CVA and MTM hedges of the retained loan portfolio, which are all reported in principal transactions revenue. This VaR does not include the retained loan portfolio, which is not MTM. |
(d) | Mortgage Production and Servicing VaR includes the Firm’s mortgage pipeline and warehouse, MSR and all related hedges. |
(e) | CIO VaR includes positions, primarily in debt securities and credit products, used to manage structural risk and other risks, including interest rate, credit and mortgage risks arising from the Firm’s ongoing business activities. |
(f) | Total IB and other VaR excludes the retained credit portfolio, which is not marked to market (but it does include hedges of those positions), and certain nontrading activity, such as principal investing (e.g., mezzanine financing, tax-oriented investments, etc.), and certain securities and investments held by Corporate/Private Equity, including private equity investments, capital management positions and longer-term corporate investments managed by CIO. |
Page 41
JPMORGAN CHASE & CO. CAPITAL AND OTHER SELECTED BALANCE SHEET ITEMS (in millions, except ratio data) |
December 31, 2011 Change | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Dec 31, | 2011 Change | |||||||||||||||||||||||||||||||||
2011 | 2011 | 2011 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
CAPITAL | ||||||||||||||||||||||||||||||||||||||||
Tier 1 capital | $ | 150,384 | (e) | $ | 147,823 | $ | 148,880 | $ | 147,234 | $ | 142,450 | 2 | % | 6 | % | |||||||||||||||||||||||||
Total capital | 188,128 | (e) | 186,510 | 187,899 | 186,417 | 182,216 | 1 | 3 | ||||||||||||||||||||||||||||||||
Tier 1 common capital (a) | 122,915 | (e) | 120,234 | 121,209 | 119,598 | 114,763 | 2 | 7 | ||||||||||||||||||||||||||||||||
Risk-weighted assets | 1,224,390 | (e) | 1,217,548 | 1,198,711 | 1,192,536 | 1,174,978 | 1 | 4 | ||||||||||||||||||||||||||||||||
Adjusted average assets (b) | 2,202,087 | (e) | 2,168,678 | 2,129,510 | 2,041,153 | 2,024,515 | 2 | 9 | ||||||||||||||||||||||||||||||||
Tier 1 capital ratio | 12.3 | (e)% | 12.1 | % | 12.4 | % | 12.3 | % | 12.1 | % | ||||||||||||||||||||||||||||||
Total capital ratio | 15.4 | (e) | 15.3 | 15.7 | 15.6 | 15.5 | ||||||||||||||||||||||||||||||||||
Tier 1 common capital ratio (a) | 10.0 | (e) | 9.9 | 10.1 | 10.0 | 9.8 | ||||||||||||||||||||||||||||||||||
Tier 1 leverage ratio | 6.8 | (e) | 6.8 | 7.0 | 7.2 | 7.0 | ||||||||||||||||||||||||||||||||||
TANGIBLE COMMON EQUITY (period-end) (c) | ||||||||||||||||||||||||||||||||||||||||
Common stockholders’ equity | $ | 175,773 | $ | 174,487 | $ | 175,079 | $ | 172,798 | $ | 168,306 | 1 | 4 | ||||||||||||||||||||||||||||
Less: Goodwill | 48,188 | 48,180 | 48,882 | 48,856 | 48,854 | — | (1 | ) | ||||||||||||||||||||||||||||||||
Less: Other intangible assets | 3,207 | 3,396 | 3,679 | 3,857 | 4,039 | (6 | ) | (21 | ) | |||||||||||||||||||||||||||||||
Add: Deferred tax liabilities (d) | 2,729 | 2,645 | 2,632 | 2,603 | 2,586 | 3 | 6 | |||||||||||||||||||||||||||||||||
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Total tangible common equity | $ | 127,107 | $ | 125,556 | $ | 125,150 | $ | 122,688 | $ | 117,999 | 1 | 8 | ||||||||||||||||||||||||||||
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TANGIBLE COMMON EQUITY (average) (c) | ||||||||||||||||||||||||||||||||||||||||
Common stockholders’ equity | $ | 175,042 | $ | 174,454 | $ | 174,077 | $ | 169,415 | $ | 166,812 | — | 5 | $ | 173,266 | $ | 161,520 | 7 | % | ||||||||||||||||||||||
Less: Goodwill | 48,225 | 48,631 | 48,834 | 48,846 | 48,831 | (1 | ) | (1 | ) | 48,632 | 48,618 | — | ||||||||||||||||||||||||||||
Less: Other intangible assets | 3,326 | 3,545 | 3,738 | 3,928 | 4,054 | (6 | ) | (18 | ) | 3,632 | 4,178 | (13 | ) | |||||||||||||||||||||||||||
Add: Deferred tax liabilities (d) | 2,687 | 2,639 | 2,618 | 2,595 | 2,621 | 2 | 3 | 2,635 | 2,587 | 2 | ||||||||||||||||||||||||||||||
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Total tangible common equity | $ | 126,178 | $ | 124,917 | $ | 124,123 | $ | 119,236 | $ | 116,548 | 1 | 8 | $ | 123,637 | $ | 111,311 | 11 | |||||||||||||||||||||||
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INTANGIBLE ASSETS (period-end) | �� | |||||||||||||||||||||||||||||||||||||||
Goodwill | $ | 48,188 | $ | 48,180 | $ | 48,882 | $ | 48,856 | $ | 48,854 | — | (1 | ) | |||||||||||||||||||||||||||
Mortgage servicing rights | 7,223 | 7,833 | 12,243 | 13,093 | 13,649 | (8 | ) | (47 | ) | |||||||||||||||||||||||||||||||
Purchased credit card relationships | 602 | 668 | 744 | 820 | 897 | (10 | ) | (33 | ) | |||||||||||||||||||||||||||||||
All other intangibles | 2,605 | 2,728 | 2,935 | 3,037 | 3,142 | (5 | ) | (17 | ) | |||||||||||||||||||||||||||||||
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Total intangibles | $ | 58,618 | $ | 59,409 | $ | 64,804 | $ | 65,806 | $ | 66,542 | (1 | ) | (12 | ) | ||||||||||||||||||||||||||
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DEPOSITS (period-end) | ||||||||||||||||||||||||||||||||||||||||
U.S. offices: | ||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing | $ | 346,670 | $ | 323,058 | $ | 287,654 | $ | 244,136 | $ | 228,555 | 7 | 52 | ||||||||||||||||||||||||||||
Interest-bearing | 504,864 | 484,640 | 469,618 | 468,654 | 455,237 | 4 | 11 | |||||||||||||||||||||||||||||||||
Non-U.S. offices: | ||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing | 18,790 | 14,724 | 13,422 | 11,644 | 10,917 | 28 | 72 | |||||||||||||||||||||||||||||||||
Interest-bearing | 257,482 | 270,286 | 277,991 | 271,395 | 235,660 | (5 | ) | 9 | ||||||||||||||||||||||||||||||||
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Total deposits | $ | 1,127,806 | $ | 1,092,708 | $ | 1,048,685 | $ | 995,829 | $ | 930,369 | 3 | 21 | ||||||||||||||||||||||||||||
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(a) | The Firm uses Tier 1 common capital along with the other capital measures to assess and monitor its capital position. The Tier 1 common capital ratio, a non-GAAP financial measure, is Tier 1 common capital divided by risk-weighted assets. For further discussion of the Tier 1 common capital ratio, see page 45. |
(b) | Adjusted average assets, for purposes of calculating the leverage ratio, include total quarterly average assets adjusted for unrealized gains/(losses) on securities, less deductions for disallowed goodwill and other intangible assets, investments in certain subsidiaries, and the total adjusted carrying value of nonfinancial equity investments that are subject to deductions from Tier 1 capital. |
(c) | ROTCE, a non-GAAP financial ratio, measures the Firm’s earnings as a percentage of tangible common equity. In management’s view, these measures are meaningful to the Firm, as well as analysts and investors in assessing the Firm’s use of equity and in facilitating comparisons with competitors. For further discussion, see page 45. |
(d) | Represents deferred tax liabilities related to tax-deductible goodwill and to identifiable intangibles created in non-taxable transactions, which are netted against goodwill and other intangibles when calculating TCE. |
(e) | Estimated. |
Page 42
JPMORGAN CHASE & CO. MORTGAGE LOAN REPURCHASE LIABILITY (in millions) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
MORTGAGE LOAN REPURCHASE LIABILITY (a) | ||||||||||||||||||||||||||||||||||||||||
Summary of changes in mortgage repurchase liability: | ||||||||||||||||||||||||||||||||||||||||
Repurchase liability at beginning of period | $ | 3,616 | $ | 3,631 | $ | 3,474 | $ | 3,285 | $ | 3,307 | — | % | 9 | % | $ | 3,285 | $ | 1,705 | 93 | % | ||||||||||||||||||||
Realized losses (b) | (462 | ) | (329 | ) | (241 | ) | (231 | ) | (371 | ) | (40 | ) | (25 | ) | (1,263 | ) | (1,423 | ) | 11 | |||||||||||||||||||||
Provision for repurchase losses | 403 | 314 | 398 | 420 | 349 | 28 | 15 | 1,535 | 3,003 | (49 | ) | |||||||||||||||||||||||||||||
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Repurchase liability at end of period | $ | 3,557 | $ | 3,616 | $ | 3,631 | $ | 3,474 | $ | 3,285 | (2 | ) | 8 | $ | 3,557 | $ | 3,285 | 8 | ||||||||||||||||||||||
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Outstanding repurchase demands and unresolved mortgage insurance rescission notices by counterparty type: (c)(d) | ||||||||||||||||||||||||||||||||||||||||
GSEs and other | $ | 2,345 | $ | 2,133 | $ | 1,826 | $ | 1,321 | $ | 1,251 | 10 | 87 | $ | 2,345 | $ | 1,251 | 87 | |||||||||||||||||||||||
Mortgage insurers | 1,034 | 1,112 | 1,093 | 1,240 | 1,121 | (7 | ) | (8 | ) | 1,034 | 1,121 | (8 | ) | |||||||||||||||||||||||||||
Overlapping population (e) | (113 | ) | (155 | ) | (145 | ) | (127 | ) | (104 | ) | 27 | (9 | ) | (113 | ) | (104 | ) | (9 | ) | |||||||||||||||||||||
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Total | $ | 3,266 | $ | 3,090 | $ | 2,774 | $ | 2,434 | $ | 2,268 | 6 | 44 | $ | 3,266 | $ | 2,268 | 44 | |||||||||||||||||||||||
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Quarterly mortgage repurchase demands received by loan origination vintage: (c)(d) | ||||||||||||||||||||||||||||||||||||||||
Pre-2005 | $ | 39 | $ | 34 | $ | 32 | $ | 15 | $ | 39 | 15 | — | $ | 120 | $ | 124 | (3 | ) | ||||||||||||||||||||||
2005 | 55 | 200 | 57 | 45 | 73 | (73 | ) | (25 | ) | 357 | 291 | 23 | ||||||||||||||||||||||||||||
2006 | 315 | 232 | 363 | 158 | 198 | 36 | 59 | 1,068 | 950 | 12 | ||||||||||||||||||||||||||||||
2007 | 804 | 602 | 510 | 381 | 539 | 34 | 49 | 2,297 | 2,045 | 12 | ||||||||||||||||||||||||||||||
2008 | 291 | 323 | 301 | 249 | 254 | (10 | ) | 15 | 1,164 | 729 | 60 | |||||||||||||||||||||||||||||
Post-2008 | 81 | 153 | 89 | 94 | 65 | (47 | ) | 25 | 417 | 184 | 127 | |||||||||||||||||||||||||||||
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Total | $ | 1,585 | $ | 1,544 | $ | 1,352 | $ | 942 | $ | 1,168 | 3 | 36 | $ | 5,423 | $ | 4,323 | 25 | |||||||||||||||||||||||
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(a) | For further details regarding the Firm’s mortgage repurchase liability, see Mortgage repurchase liability on pages 53-56 and Note 21, on pages 176-180, of JPMorgan Chase’s third quarter Form 10-Q. |
(b) | Includes principal losses and accrued interest on repurchased loans, “make-whole” settlements, settlements with claimants, and certain related expense. Make-whole settlements were $237 million, $162 million, $126 million, $115 million and $152 million for the three months ended December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively, and $640 million and $632 million for full year 2011 and 2010, respectively. |
(c) | Periods prior to June 30, 2011 have been revised to include repurchase demands and mortgage insurance rescission notices related to certain loans sold or deposited into private-label securitizations. The Firm’s outstanding repurchase demands are predominantly from the GSEs. |
(d) | Excludes amounts related to Washington Mutual. |
(e) | Because the GSEs may make repurchase demands based on mortgage insurance rescission notices that remain unresolved, certain loans may be subject to both an unresolved mortgage insurance rescission notice and an unresolved repurchase demand. |
Page 43
JPMORGAN CHASE & CO. PER SHARE-RELATED INFORMATION (in millions, except per share and ratio data) |
QUARTERLY TRENDS | FULL YEAR | |||||||||||||||||||||||||||||||||||||||
4Q11 Change | 2011 Change | |||||||||||||||||||||||||||||||||||||||
4Q11 | 3Q11 | 2Q11 | 1Q11 | 4Q10 | 3Q11 | 4Q10 | 2011 | 2010 | 2010 | |||||||||||||||||||||||||||||||
EARNINGS PER SHARE DATA | ||||||||||||||||||||||||||||||||||||||||
Basic earnings per share: | ||||||||||||||||||||||||||||||||||||||||
Net income | $ | 3,728 | $ | 4,262 | $ | 5,431 | $ | 5,555 | $ | 4,831 | (13 | ) % | (23 | ) % | $ | 18,976 | $ | 17,370 | 9 | % | ||||||||||||||||||||
Less: Preferred stock dividends | 157 | 157 | 158 | 157 | 157 | — | — | 629 | 642 | (2 | ) | |||||||||||||||||||||||||||||
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Net income applicable to common equity | 3,571 | 4,105 | 5,273 | 5,398 | 4,674 | (13 | ) | (24 | ) | 18,347 | 16,728 | 10 | ||||||||||||||||||||||||||||
Less: Dividends and undistributed earnings allocated to participating securities | 146 | 169 | 206 | 262 | 262 | (14 | ) | (44 | ) | 779 | 964 | (19 | ) | |||||||||||||||||||||||||||
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Net income applicable to common stockholders | $ | 3,425 | $ | 3,936 | $ | 5,067 | $ | 5,136 | $ | 4,412 | (13 | ) | (22 | ) | $ | 17,568 | $ | 15,764 | 11 | |||||||||||||||||||||
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Total weighted-average basic shares outstanding | 3,801.9 | 3,859.6 | 3,958.4 | 3,981.6 | 3,917.0 | (1 | ) | (3 | ) | 3,900.4 | 3,956.3 | (1 | ) | |||||||||||||||||||||||||||
Net income per share | $ | 0.90 | $ | 1.02 | $ | 1.28 | $ | 1.29 | $ | 1.13 | (12 | ) | (20 | ) | $ | 4.50 | $ | 3.98 | 13 | |||||||||||||||||||||
Diluted earnings per share: | ||||||||||||||||||||||||||||||||||||||||
Net income applicable to common stockholders | $ | 3,425 | $ | 3,936 | $ | 5,067 | $ | 5,136 | $ | 4,412 | (13 | ) | (22 | ) | $ | 17,568 | $ | 15,764 | 11 | |||||||||||||||||||||
Total weighted-average basic shares outstanding | 3,801.9 | 3,859.6 | 3,958.4 | 3,981.6 | 3,917.0 | (1 | ) | (3 | ) | 3,900.4 | 3,956.3 | (1 | ) | |||||||||||||||||||||||||||
Add: Employee stock options, SARs and warrants (a) | 9.8 | 12.6 | 24.8 | 32.5 | 18.2 | (22 | ) | (46 | ) | 19.9 | 20.6 | (3 | ) | |||||||||||||||||||||||||||
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Total weighted-average diluted shares outstanding (b) | 3,811.7 | 3,872.2 | 3,983.2 | 4,014.1 | 3,935.2 | (2 | ) | (3 | ) | 3,920.3 | 3,976.9 | (1 | ) | |||||||||||||||||||||||||||
Net income per share | $ | 0.90 | $ | 1.02 | $ | 1.27 | $ | 1.28 | $ | 1.12 | (12 | ) | (20 | ) | $ | 4.48 | $ | 3.96 | 13 | |||||||||||||||||||||
COMMON SHARES OUTSTANDING | ||||||||||||||||||||||||||||||||||||||||
Common shares — at period end | 3,772.7 | 3,798.9 | 3,910.2 | 3,986.6 | 3,910.3 | (1 | ) | (4 | ) | 3,772.7 | 3,910.3 | (4 | ) | |||||||||||||||||||||||||||
Cash dividends declared per share | $ | 0.25 | $ | 0.25 | $ | 0.25 | $ | 0.25 | (g) | $ | 0.05 | — | 400 | $ | 1.00 | (g) | $ | 0.20 | 400 | |||||||||||||||||||||
Book value per share | 46.59 | 45.93 | 44.77 | 43.34 | 43.04 | 1 | 8 | 46.59 | 43.04 | 8 | ||||||||||||||||||||||||||||||
Dividend payout ratio | 27 | % | 24 | % | 19 | % | 20 | % | 4 | % | 22 | % | 5 | % | ||||||||||||||||||||||||||
SHARE PRICE (c) | ||||||||||||||||||||||||||||||||||||||||
High | $ | 37.54 | $ | 42.55 | $ | 47.80 | $ | 48.36 | $ | 43.12 | (12 | ) | (13 | ) | $ | 48.36 | $ | 48.20 | — | |||||||||||||||||||||
Low | 27.85 | 28.53 | 39.24 | 42.65 | 36.21 | (2 | ) | (23 | ) | 27.85 | 35.16 | (21 | ) | |||||||||||||||||||||||||||
Close | 33.25 | 30.12 | 40.94 | 46.10 | 42.42 | 10 | (22 | ) | 33.25 | 42.42 | (22 | ) | ||||||||||||||||||||||||||||
Market capitalization | 125,442 | 114,422 | 160,083 | 183,783 | 165,875 | 10 | (24 | ) | 125,442 | 165,875 | (24 | ) | ||||||||||||||||||||||||||||
COMMON EQUITY REPURCHASE PROGRAM (d) | ||||||||||||||||||||||||||||||||||||||||
Aggregate common equity repurchased | $ | 863.8 | (e) | $ | 4,424.9 | (f) | $ | 3,479.8 | $ | 95.0 | $ | 685.2 | (80 | ) | 26 | $ | 8,863.5 | (e) (f) | $ | 2,998.6 | 196 | |||||||||||||||||||
Common equity repurchased | 27.2 | (e) | 127.4 | (f) | 80.3 | 2.1 | 17.9 | (79 | ) | 52 | 237.0 | (e) (f) | 77.9 | 204 | ||||||||||||||||||||||||||
Average purchase price | $ | 31.75 | (e) | $ | 34.72 | (f) | $ | 43.33 | $ | 45.66 | $ | 38.37 | (9 | ) | (17 | ) | $ | 37.39 | (e) (f) | $ | 38.49 | (3 | ) |
(a) | Excluded from the computation of diluted EPS (due to the antidilutive effect) were options issued under employee benefit plans and the warrants originally issued in 2008 under the U.S. Treasury’s Capital Purchase Program to purchase shares of the Firm’s common stock. The aggregate number of shares issuable upon the exercise of such options and warrants was 197 million, 197 million, 53 million, 85 million and 233 million for the three months ended December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively, and 133 million and 233 million for full year 2011 and 2010, respectively. |
(b) | Participating securities were included in the calculation of diluted EPS using the two-class method, as this computation was more dilutive than the calculation using the treasury stock method. |
(c) | Share prices shown for JPMorgan Chase’s common stock are from the New York Stock Exchange. JPMorgan Chase’s common stock is also listed and traded on the London Stock Exchange and the Tokyo Stock Exchange. |
(d) | On March 18, 2011, the Board of Directors approved a $15.0 billion common equity (i.e., common stock and warrants) repurchase program, of which $8.95 billion was authorized for repurchase in 2011. The $15.0 billion repurchase program supersedes a $10.0 billion repurchase program approved in 2007. Management and the Board will continue to assess and make decisions regarding alternatives for deploying capital, as appropriate, over the course of the year. Any planned use of the repurchase program beyond the repurchases approved for 2011 will be reviewed by the Firm with banking regulators before taking action. |
(e) | Excludes $86.2 million of repurchases in December 2011, which settled in early January 2012. |
(f) | Includes impact of aggregate repurchases of 10.2 million warrants during the three months ended September 30, 2011. |
(g) | On March 18, 2011, the Board of Directors increased the Firm’s quarterly common stock dividend from $0.05 to $0.25 per share. |
Page 44
JPMORGAN CHASE & CO. NON-GAAP FINANCIAL MEASURES | ||
The following are several of the non-GAAP measures that the Firm uses for various reasons, including: (i) to allow management to assess the comparability of revenue arising from both taxable and tax-exempt sources, (ii) to assess and compare the quality and composition of the Firm’s capital with the capital of other financial services companies, and (iii) more generally, to provide a more meaningful measure of certain metrics that enables comparability with prior periods, as well as with competitors.
(a) | In addition to analyzing the Firm’s results on a reported basis, management reviews the Firm’s results and the results of the lines of business on a“managed” basis. The Firm’s definition of managed basis starts with the reported U.S. GAAP results and includes certain reclassifications to present total net revenue for the Firm (and each of the business segments) on a FTE basis. Accordingly, revenue from tax-exempt securities and investments that receive tax credits is presented in the managed results on a basis comparable to taxable securities and investments. This non-GAAP financial measure allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The corresponding income tax impact related to tax-exempt items is recorded within income tax expense. These adjustments have no impact on net income as reported by the Firm as a whole or by the lines of business. |
(b) | The ratio for theallowance for loan losses to end-of-period loans excludes the following: loans accounted for at fair value and loans held-for-sale; purchased credit-impaired (“PCI”) loans; and the allowance for loan losses related to PCI loans. Additionally, Real Estate Portfolios net charge-off rates exclude the impact of PCI loans. |
(c) | Tangible common equity (“TCE”) represents common stockholders’ equity (i.e., total stockholders’ equity less preferred stock) less goodwill and identifiable intangible assets (other than MSRs), net of related deferred tax liabilities.ROTCE measures the Firm’s earnings as a percentage of TCE. In management’s view, these measures are meaningful to the Firm, as well as analysts and investors in assessing the Firm’s use of equity, and in facilitating comparisons with competitors. |
(d) | Tier 1 common capital ratiois Tier 1 common capital divided by risk-weighted assets. Tier 1 common capital (“Tier 1 common”) is defined as Tier 1 capital less elements of capital not in the form of common equity — such as perpetual preferred stock, noncontrolling interests in subsidiaries and trust preferred capital debt securities. Tier 1 common is used by banking regulators, investors and analysts to assess and compare the quality and composition of the Firm’s capital with the capital of other financial services companies. The Firm uses Tier 1 common along with other capital measures to assess and monitor its capital position. |
(e) | TSS Firmwide revenue includes certain TSS product revenue and liability balances reported in other lines of business, mainly CB, RFS and AM, related to customers who are also customers of those lines of business. |
(f) | Retail Financial Services uses theoverhead ratio (excluding the amortization of core deposit intangibles (“CDI”)) to evaluate the underlying expense trends of the business. Including CDI amortization expense in the overhead ratio calculation would result in a higher overhead ratio in the earlier years and a lower overhead ratio in later years. This method would therefore result in an improving overhead ratio over time, all things remaining equal. The non-GAAP ratio excludes Consumer & Business Banking’s CDI amortization expense related to prior business combination transactions. |
(g) | Adjusted assets equals total assets minus: (1) securities purchased under resale agreements and securities borrowed less securities sold, not yet purchased; (2) assets of consolidated VIEs; (3) cash and securities segregated and on deposit for regulatory and other purposes; (4) goodwill and intangibles; and (5) securities received as collateral. The amount of adjusted assets is presented to assist the reader in comparing IB’s asset and capital levels with those of other investment banks in the securities industry. Asset-to-equity leverage ratios are commonly used as one measure to assess a company’s capital adequacy. IB believes an adjusted asset amount that excludes the assets discussed above, which were considered to have a low risk profile, provides a more meaningful measure of balance sheet leverage in the securities industry. |
Page 45
JPMORGAN CHASE & CO. GLOSSARY OF TERMS |
ACH:Automated Clearing House.
Allowance for loan losses to total loans: Represents period-end allowance for loan losses divided by retained loans.
Beneficial interests issued by consolidated VIEs: Represents the interest of third-party holders of debt/equity securities, or other obligations, issued by VIEs that JPMorgan Chase consolidates. 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 about a specific event (e.g., bankruptcy of the borrower), whichever is earlier.
Corporate/Private Equity: Includes Private Equity, Treasury and Chief Investment Office, and Corporate Other, which includes other centrally managed expense and discontinued operations.
Global Corporate Bank: TSS and IB formed a joint venture to create the Firm’s Global Corporate Bank. With a team of bankers, the Global Corporate Bank serves multinational clients by providing them access to TSS products and services and certain IB products, including derivatives, foreign exchange and debt. The cost of this effort and the credit that the Firm extends to these clients is shared between TSS and IB.
Interests in purchased receivables: Represents an ownership interest in cash flows of an underlying pool of receivables transferred by a third-party seller into a bankruptcy-remote entity, generally a trust.
Managed basis: A non-GAAP presentation of financial results that includes reclassifications to present revenue on a fully taxable-equivalent basis. Management uses this non-GAAP financial measure at the segment level, because it believes this provides information to enable investors to understand the underlying operational performance and trends of the particular business segment and facilitates a comparison of the business segment with the performance of competitors.
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 MTM value is positive, it indicates the counterparty owes JPMorgan Chase and, therefore, creates credit risk for the Firm. When the MTM value is negative, JPMorgan Chase owes the counterparty; in this situation, the Firm has liquidity risk.
MSR risk management revenue: Includes changes in the fair value of the MSR asset due to market-based inputs, such as interest rates and volatility, as well as updates to assumptions used in the MSR valuation model; and derivative valuation adjustments and other, which represents changes in the fair value of derivative instruments used to offset the impact of changes in the market-based inputs to the MSR valuation model.
NA: Data is not applicable or available for the period presented.
Net charge-off rate: Represents net charge-offs (annualized) divided by average retained loans for the reporting period.
Net yield on interest-earning assets: The average rate for interest-earning assets less the average rate paid for all sources of funds.
NM: Not meaningful.
Overhead ratio: Noninterest expense as a percentage of total net revenue.
Participating securities: Represents unvested stock-based compensation awards containing nonforfeitable rights to dividends or dividend equivalents (collectively, “dividends”), which are included in the earnings per share calculation using the two-class method. JPMorgan Chase grants restricted stock and RSUs to certain employees under its stock-based compensation programs, which entitle the recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. These unvested awards meet the definition of participating securities. Under the two-class method, all earnings (distributed and undistributed) are allocated to each class of common stock and participating securities, based on their respective rights to receive dividends.
Pre-provision profit:Pre-provision profit is total net revenue less noninterest expense. The Firm believes that this financial measure is useful in assessing the ability of a lending institution to generate income in excess of its provision for credit losses.
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JPMORGAN CHASE & CO. GLOSSARY OF TERMS |
Pretax margin: Represents income before income tax expense divided by total net revenue, which is, in management’s view, a comprehensive measure of pretax performance derived by measuring earnings after all costs are taken into consideration. It is, therefore, another basis that management uses to evaluate the performance of TSS and AM against the performance of their respective competitors.
Principal transactions: Realized and unrealized gains and losses from trading activities (including physical commodities inventories that are accounted for at the lower of cost or fair value) and changes in fair value associated with financial instruments held predominantly by IB for which the fair value option was elected. Principal transactions revenue also includes private equity gains and losses.
Purchased credit-impaired (“PCI”) loans: Acquired loans deemed to be credit-impaired under the Financial Accounting Standards Board guidance for PCI loans. The guidance allows purchasers to aggregate credit-impaired loans acquired in the same fiscal quarter into one or more pools, provided that the loans have common risk characteristics (e.g., FICO score, geographic location). A pool is then accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows. Wholesale loans are determined to be credit-impaired if they meet the definition of an impaired loan under U.S. GAAP at the acquisition date. Consumer loans are determined to be credit-impaired based on specific risk characteristics of the loan, including product type, LTV ratios, FICO scores, and past due status.
Receivables from customers: Primarily represents margin loans to prime and retail brokerage customers which are included in accrued interest and accounts receivable on the Consolidated Balance Sheets for the wholesale lines of business.
Reported basis: Financial statements prepared under U.S. GAAP, which excludes the impact of taxable-equivalent adjustments.
Retained loans: Loans that are held-for-investment excluding loans held-for-sale and loans at fair value.
Risk-weighted assets (“RWA”): Risk-weighted assets consist of on- and off-balance sheet assets that are assigned to one of several broad risk categories and weighted by factors representing their risk and potential for default. On-balance sheet assets are risk-weighted based on the perceived credit risk associated with the obligor or counterparty, the nature of any collateral, and the guarantor, if any. Off-balance sheet assets such as lending-related commitments, guarantees, derivatives and other applicable off-balance sheet positions are risk-weighted by multiplying the contractual amount by the appropriate credit conversion factor to determine the on-balance sheet credit equivalent amount, which is then risk-weighted based on the same factors used for on-balance sheet assets. Risk-weighted assets also incorporate a measure for market risk related to applicable trading assets-debt and equity instruments, and foreign exchange and commodity derivatives. The resulting risk-weighted values for each of the risk categories are then aggregated to determine total risk-weighted assets.
Fully taxable-equivalent (“FTE”) basis: Total net revenue for each of the business segments and the Firm is presented on a fully taxable-equivalent basis. Accordingly, revenue from tax-exempt securities and investments that receive tax credits is presented in the managed results on a basis comparable to fully taxable securities and investments. This non-GAAP financial measure allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The corresponding income tax impact related to these items is recorded within income tax expense.
Troubled debt restructuring (“TDR”): Occurs when the Firm modifies the original terms of a loan agreement by granting a concession to a borrower that is experiencing financial difficulty.
U.S. GAAP: Accounting principles generally accepted in the United States of America.
Value-at-risk (“VaR”): A measure of the dollar amount of potential loss from adverse market moves in an ordinary market environment.
Washington Mutual transaction: On September 25, 2008, JPMorgan Chase acquired the banking operations of Washington Mutual Bank (“Washington Mutual”) from the FDIC. For additional information, see Note 2 on pages 166-170 of JPMorgan Chase’s 2010 Annual Report.
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JPMORGAN CHASE & CO. GLOSSARY OF TERMS |
INVESTMENT BANK (“IB”)
IB’s revenue comprises the following:
Investment banking fees include advisory, equity underwriting, bond underwriting and loan syndication fees.
Fixed income marketsprimarily include revenue related to market-making across global fixed income markets, including foreign exchange, interest rate, credit and commodities markets.
Equities marketsprimarily include revenue related to market-making across global equity products, including cash instruments, derivatives, convertibles and Prime Services.
Credit portfolio revenueincludes net interest income, fees and loan sale activity, as well as gains or losses on securities received as part of a loan restructuring, for IB’s credit portfolio. Credit portfolio revenue also includes the results of risk management related to the Firm’s lending and derivative activities.
RETAIL FINANCIAL SERVICES (“RFS”)
Description of selected business metrics within Consumer & Business Banking:
Client investment managed accounts– Assets actively managed by Chase Wealth Management on behalf of clients. The percentage of managed accounts is calculated by dividing managed account assets by total client investment assets.
Active mobile customers– Retail banking users of all mobile platforms, which include: SMS text, Mobile Browser, iPhone, iPad and Android, who have been active in the past 90 days.
Client advisors– Investment product specialists, including Private Client Advisors, Financial Advisors, Financial Advisor Associates, Senior Financial Advisors, Independent Financial Advisors and Financial Advisor Associate trainees, who advise clients on investment options, including annuities, mutual funds, stock trading services, etc., sold by the Firm or by third party vendors through retail branches, Chase Private Client branches and other channels.
Personal bankers – Retail branch office personnel who acquire, retain and expand new and existing customer relationships by assessing customer needs and recommending and selling appropriate banking products and services.
Sales specialists – Retail branch office and field personnel, including Business Bankers, Relationship Managers and Loan Officers, who specialize in marketing and sales of various business banking products (i.e., business loans, letters of credit, deposit accounts, Chase paymentec, etc.) and mortgage products to existing and new clients.
RFS (continued)
Mortgage Production and Servicing revenue comprises the following:
Net production revenue includes net gains or losses on originations and sales of prime and subprime mortgage loans, other production-related fees and losses related to the repurchase of previously-sold loans.
Net mortgage servicing revenueincludes the following components:
a) | Operating revenue comprises: |
• | All gross income earned from servicing third-party mortgage loans, including stated service fees, excess service fees, late fees and other ancillary fees; and |
• | Modeled servicing portfolio runoff (or time decay). |
b) | Risk management comprises: |
• | Changes in the fair value of the MSR asset due to market-based inputs, such as interest rates and volatility, as well as updates to assumptions used in the MSR valuation model; and |
• | Derivative valuation adjustments and other, which represents changes in the fair value of derivative instruments used to offset the impact of changes in the market-based inputs to the MSR valuation model. |
Mortgage origination channels comprise the following:
Retail – Borrowers who are buying or refinancing a home through direct contact with a mortgage banker employed by the Firm using a branch office, the Internet or by phone. Borrowers are frequently referred to a mortgage banker by a banker in a Chase branch, real estate brokers, home builders or other third parties.
Wholesale– A third-party mortgage broker refers loan application packages to the Firm. The Firm then underwrites and funds the loan. Brokers are independent loan originators that specialize in counseling applicants on available home financing options, but do not provide funding for loans. Chase materially eliminated broker-originated loans in 2008, with the exception of a small number of loans guaranteed by the USDA under their Section 502 Guaranteed Loan program that serves low-and-moderate income families in small rural communities.
Correspondent – Banks, thrifts, other mortgage banks and other financial institutions that sell closed loans to the Firm.
Correspondent negotiated transactions (“CNTs”) – These transactions occur when mid- to large-sized mortgage lenders, banks and bank-owned mortgage companies sell servicing to the Firm on an as-originated basis, and exclude purchased bulk servicing transactions. These transactions supplement traditional production channels and provide growth opportunities in the servicing portfolio in stable periods and periods of rising interest rates.
Deposit margin: Represents deposit-related net interest income expressed as a percentage of average deposits.
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JPMORGAN CHASE & CO. GLOSSARY OF TERMS |
CARD SERVICES & AUTO (“Card”)
Description of selected business metrics within Card:
Sales volume – Dollar amount of cardmember purchases, net of returns.
Open accounts – Cardmember accounts with charging privileges.
Merchant Services business – A business that processes bank card transactions for merchants.
Bank card volume – Dollar amount of transactions processed for merchants.
Total transactions – Number of transactions and authorizations processed for merchants.
Auto origination volume– Dollar amount of loans and leases originated.
Commercial Card provides a wide range of payment services to corporate and public sector clients worldwide through the commercial card products. Services include procurement, corporate travel and entertainment, expense management services, and business-to-business payment solutions.
COMMERCIAL BANKING (“CB”)
CB Client Segments:
1. | Middle Market Banking covers corporate, municipal, financial institution and not-for-profit clients, with annual revenue generally ranging between $10 million and $500 million. |
2. | Corporate Client Banking covers clients with annual revenue generally ranging between $500 million and $2 billion and focuses on clients that have broader investment banking needs. |
3. | Commercial Term Lending primarily provides term financing to real estate investors/owners for multi-family properties as well as financing office, retail and industrial properties. |
4. | Real Estate Banking provides full-service banking to investors and developers of institutional-grade real estate properties. |
5. | Other primarily includes lending and investment activity within the Community Development Banking and Chase Capital businesses. |
CB (continued)
CB Revenue:
1. | Lending includes a variety of financing alternatives, which are primarily provided on a basis secured by receivables, inventory, equipment, real estate or other assets. Products include term loans, revolving lines of credit, bridge financing, asset-based structures, leases, commercial card products and standby letters of credit. |
2. | Treasury services includes a broad range of products and services enabling clients to transfer, invest and manage the receipt and disbursement of funds, while providing the related information reporting. These products and services include U.S. dollar and multi-currency clearing, ACH, lockbox, disbursement and reconciliation services, check deposits, other check and currency-related services, trade finance and logistics solutions, deposit products, sweeps and money market mutual funds. |
3. | Investment banking products provide clients with sophisticated capital-raising alternatives, as well as balance sheet and risk management tools through loan syndications, investment-grade debt, asset-backed securities, private placements, high-yield bonds, equity underwriting, advisory, interest rate derivatives, foreign exchange hedges and securities sales. |
4. | Other product revenue primarily includes tax-equivalent adjustments generated from Community Development Banking activity and certain income derived from principal transactions. |
Description of selected business metrics within CB:
1. | Liability balances include deposits, as well as deposits that are swept to on-balance sheet liabilities (e.g., commercial paper, federal funds purchased, time deposits and securities loaned or sold under repurchase agreements) as part of customer cash management programs. |
2. | IB revenue, gross represents total revenue related to investment banking products sold to CB clients. |
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JPMORGAN CHASE & CO. GLOSSARY OF TERMS |
TREASURY & SECURITIES SERVICES (“TSS”)
Treasury & Securities Servicesfirmwide metrics include certain TSS product revenue and liability balances reported in other lines of business related to customers who are also customers of those other lines of business. In order to capture the firmwide impact of Treasury Services and TSS products and revenue, management reviews firmwide metrics such as liability balances, revenue and overhead ratios in assessing financial performance for TSS. Firmwide metrics are necessary, in management’s view, in order to understand the aggregate TSS business.
Description of a business metric within TSS:
1. | Liability balances include deposits, as well as deposits that are swept to on-balance sheet liabilities (e.g., commercial paper, federal funds purchased, time deposits and securities loaned or sold under repurchase agreements) as part of customer cash management programs. |
Description of selected products and services within TSS:
1. | Investor Services includes primarily custody, fund accounting and administration, and securities lending products sold principally to asset managers, insurance companies and public & private investment funds. |
2. | Clearance, Collateral Management & Depositary Receiptsprimarily includes broker-dealer clearing and custody services, including tri-party repo transactions, collateral management products, and depositary bank services for American and global depositary receipt programs. |
3. | Transaction Services includes a broad range of products and services that enable clients to manage payments and receipts, as well as invest and manage funds. Products include U.S. dollar and multi-currency clearing, ACH, lockbox, disbursement and reconciliation services, check deposits, and currency related services. |
4. | Trade Finance enables the management of cross-border trade for bank and corporate clients. Products include loans directly tied to goods crossing borders, export/import loans, commercial letters of credit, standby letters of credit, and supply chain finance. |
Pre-provision profit ratio represents total net revenue less total noninterest expense divided by total net revenue. This reflects the operating performance before the impact of credit, and is another measure of performance for TSS against the performance of competitors.
ASSET MANAGEMENT (“AM”)
Assets under management– Represent assets actively managed by AM on behalf of Private Banking, Institutional, and Retail clients. Includes “committed capital not called”, on which AM earns fees. Excludes assets managed by American Century Companies, Inc. in which the Firm sold its minority ownership interest on August 31, 2011.
Assets under supervision– Represents assets under management, as well as custody, brokerage, administration and deposit accounts.
Multi-asset – Any fund or account that allocates assets under management to more than one asset class (e.g., long-term fixed income, equity, cash, real assets, private equity or hedge funds).
Alternative assets – The following types of assets constitute alternative investments – hedge funds, currency, real estate and private equity.
AM’s client segments comprise the following:
Institutionalincludes 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.
Retail includes worldwide investment management services and retirement planning and administration through third-parties and direct distribution of a full range of investment vehicles.
Private Bankingincludes investment advice and wealth management services to high- and ultra-high-net-worth individuals, families, money managers, business owners and small corporations worldwide, including investment management, capital markets and risk management, tax and estate planning, banking, capital raising and specialty-wealth advisory services.
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