JPMorgan Chase & Co. · NYSE:JPM
JPMorgan Chase & — Q1 2007 Earnings Presentation
17 slides from JPMorgan Chase &'s earnings presentation, Apr 19, 2007
Slide 1: Financial Results First Quarter 2007
F I N A N C I A L R E S U L T S First Quarter 2007 A P R I L 1 8, 2 0 0 7
Slide 2: 1Q07 Managed Results
1Q07 Managed Results1 $ in millions 1 Managed basis presents revenue and credit costs without the effect of credit card securitizations. All references to credit costs refer to managed provision for credit losses 2 Includes merger costs of $62mm in 1Q07, $100mm in 4Q06 and $71mm in 1Q06 3 Includes i
Slide 3: Capital Management
Capital Management 1 For dividend payable on July 31, 2007. Previously declared dividend of $0.34 per share to be paid on April 30, 2007 2 The new authorization commences April 19, 2007 and replaces the firm's previous $8B repurchase program authorized on March 21, 2006. As of the close of business
Slide 4: Bank of New York Conversion Statistics
Converted 1.2 million active deposit accounts, with a total balance of $14.5B Converted over 119K active loan accounts, with a total loan balance of $4B Over 1 million customers converted Approximately 4,000 work stations installed Over 400 ATMs converted 100,000 hours of training of approximately 4
Slide 5: Investment Bank
Record net income of $1.5B on record revenue of $6.3B ROE of 30% Record IB fees of $1.7B up 48% YoY driven by record debt and equity underwriting and strong advisory fees #1 in Global Equity and Equity-Related6 #1 in Global Syndicated Loans6 #2 in Global Announced M&A6 #2 in Global Long Term Debt6 R
Slide 6: Retail Financial Services - Key Statistics and Drivers
Key Statistics1 ($ in billions) Retail Financial Services - Drivers 1 Actual numbers for all periods, not over/under 2 Does not include held-for-sale loans 3 Reflects primarily subprime mortgage loans owned. $19.4B of prime mortgage loans were transferred to Corporate on 1/1/07 Average deposits up 6
Slide 7: Retail Financial Services
Retail Financial Services Net income of $859mm, down 2% YoY and up 20% QoQ 1Q06 results included Insurance but not BNY, and a $50mm mark-to-market loss on Auto loans transferred to held-for-sale 4Q06 included loss on portfolio repositioning and additional BNY allowance Excluding the above items, YoY
Slide 8: Subprime mortgage
Subprime mortgage Sub-prime Prime Line 3 Line 4 Line 5 Line 6 Line 7 Line 8 Line 9 Line 10 Line 11 Line 12 Line 13 Line 14 Line 15 Line 16 1/1/2005 0.0209 0.0087 2/1/2005 0.0245 0.0088 3/1/2005 0.0228 0.0081 4/1/2005 0.022 0.0077 5/1/2005 0.0211 0.0076 6/1/2005 0.0215 0.0076 7/1/2005 0.0242 0.0062 8
Slide 9: Card Services (Managed)
$ in millions Net income of $765mm down 15% YoY ROE of 22%; ROO of 3.28% Prior year included benefit related to new bankruptcy legislation Avg outstandings of $149B up 8% YoY and 1% QoQ Revenue flat YoY driven by: Higher loan balances and a 9% increase in charge volume Offset by higher revenue rever
Slide 10: Commercial Banking
$ in millions 1 Actual numbers for all periods, not over/under 2 Includes deposits and deposits swept to on-balance sheet liabilities Record net income of $304mm up 27% YoY Loans up 13% YoY due to organic growth and BNY; Liability balances up 16% YoY Revenue of $1B up 11% YoY due to increased liabil
Slide 11: Treasury & Securities Services
$ in millions Net income of $263mm flat YoY Pre-tax margin of 27% Liability balances up 18% YoY; Assets under custody up 31% YoY Revenue up 3% YoY driven by new business, increased product usage by existing clients, higher liability balances and market appreciation, partially offset by price compres
Slide 12: Asset Management
$ in millions 1 Actual numbers for all periods, not over/under 2 $5.3B of held-for-investment prime mortgage loans were transferred to Corporate on January 1, 2007 Record net income of $425mm up 36% YoY Pre-tax margin of 36% Revenue of $1.9B up 20% YoY with double-digit growth across Private Bank, I
Slide 13: Corporate and Private Equity
1 Discontinued operations relate to the sale of select corporate trust businesses, with net income of $620mm in 4Q06 and $54mm in 1Q06 2 Reflects reclassification of certain private equity carried interest from revenue to compensation expense beginning in 1Q07 3 Actual numbers for all periods, not o
Slide 14: Appendix
APPENDIX “ JPMorganChase ©
Slide 15: 1Q07 Accounting items
SFAS 157 - Fair value measurements EITF 02-3 nullification Firm's nonperformance risk (IB) Private equity (Corporate) Accounting developments FIN 48 - Uncertainty in income taxes SFAS 159 - Fair value option 1Q07 Accounting items P&L impact Equity impact $287mm after-tax $166mm pre-tax $464mm pre-ta
Slide 16: Notes on non-GAAP financial measures
Notes on non-GAAP financial measures This presentation includes non-GAAP financial measures. TCE as used on slide 2 for purposes of a return on tangible common equity and presented as Tangible Common Equity on slide 3 (line 1) is defined as common stockholders' equity less identifiable intangible as
Slide 17: Disclaimer
Disclaimer This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of JPMorgan Chase's management and are subject to significant risks and uncertainties. Actu