Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Q1 2009 Earnings Presentation
23 slides from Jp Morgan Chase &'s earnings presentation, Apr 16, 2009
Slide 1: Financial Results 1Q09
APRIL 16, 2009 FINANCIAL RESULTS 1Q09
Slide 2: 1Q09 Financial highlights
1Q09 Financial highlights Net income of $2.1B; EPS of $0.40 Generated record firmwide revenue of $26.9B and pretax, pre-provision profit of $13.5B (on a managed basis1): Record revenue and net income in the Investment Bank WaMu integration on track, driving Retail Banking growth in deposits
Slide 3: 1Q09 Managed results
1Q09 Managed results1 $ $ in in millions millions $ O/(U) 1Q09 4Q08 1Q08 Results excl. Merger-related items2 Revenue (FTE)1 $27,062 $7,740 $9,164 Credit Costs1 10,060 1,477 4,955 Expense 13,136 2,129 4,205 Merger-related items2 (after-tax) (234) (1,298) (234) Reported Net Income $2,141 $1,439 ($232)
Slide 4: Investment Bank
Investment Bank $ $ in in millions millions Record net income of $1.6B on record revenue of $8.3B $ O/(U) IB fees of $1.4B up 14% YoY reflecting strong debt 1Q09 4Q08 1Q08 underwriting Revenue $8,341 $8,643 $5,330 Record Fixed Income Markets revenue of $4.9B reflecting: Investment Banking Fees
Slide 5: IB league tables
IB league tables League League table table results results Thomson Reuters Continue to rank #1 in two capital raising 1Q09 2008 1 league tables for 1Q09 YTD per Thomson Rank Share Rank Share Reuters Global Debt, Equity & Equity-related Global M&A Announced2 #2 42.9% #2 26.5% Global Equity & Eq
Slide 6: IB key risk exposures
IB key risk exposures Leveraged lending Markdowns of $711mm, net of hedges, on the remaining legacy commitments $11.5B of legacy commitments with gross markdowns of $6.0B, or 52%; market value at 3/31/09 of $5.5B $12.6B of legacy commitments at 12/31/08 ($1.1B) reduction, or 9% of exposure
Slide 7: IB key risk exposures
IB key risk exposures Mortgage-related $ $ in in billions billions Exposure as of Exposure Exposure as of 12/31/2008 reduction 03/31/2009 Prime $1.8 ($0.3) $1.5 Alt-A 4.3 ($0.3) 4.0 Subprime 0.9 (0.2) 0.7 Subtotal Residential $7.0 ($0.8) $6.2 Commercial 7.7 (1.2) 6.5 Mortgage Exposure $14.7 ($2.0) $
Slide 8: Retail Financial Services—Drivers
Retail Financial Services—Drivers Retail Retail Banking Banking -- $ $ in in billions billions Average deposits up 62% YoY and 2% QoQ, while deposit NII is up 69% YoY and down 3% QoQ 1Q09 4Q08 1Q08 Key Statistics Branch production statistics: Average Deposits $345.8 $339.8 $214.1 Checking acco
Slide 9: Retail Financial Services
Retail Financial Services $ $ in in millions millions $ O/(U) Total Retail Financial Services net income of $474mm compared to net loss of $311mm in the prior year 1Q09 4Q08 1Q08 Retail Banking net income of $863mm, up 58% YoY: Retail Financial Services Total revenue of $4.3B increased 73% YoY
Slide 10: Home Equity
Home Equity Excluding credit-impaired loans 30-day 30-day Delinquency Delinquency trend trend Key Key statistics statistics 3.25% 1Q09 4Q08 1Q08 1 Excluding credit-impaired 2.75% EOP owned portfolio ($B) $111.7 $114.3 $95.0 Net charge-offs ($mm) $1,098 $770 $447 2.25% Net charge-off rate 3.93% 2.67%
Slide 11: Prime Mortgage
Prime Mortgage Excluding credit-impaired loans 30-day Delinquency 30-day Delinquency trend trend Key Key statistics statistics 7% 1Q09 4Q08 1Q08 1 6% Excluding credit-impaired 5% EOP balances ($B) $65.4 $65.2 $38.2 4% Net charge-offs ($mm) $312 $195 $50 3% Net charge-off rate 1.95% 1.20% 0.56% 2% No
Slide 12: Subprime Mortgage
Subprime Mortgage Excluding credit-impaired loans 30-day 30-day Delinquency Delinquency trend trend Key Key statistics statistics 28% 1Q09 4Q08 1Q08 1 Excluding credit-impaired 24% EOP owned portfolio ($B) $14.6 $15.3 $15.8 20% Net charge-offs ($mm) $364 $319 $149 Net charge-off rate 9.91% 8.08% 3.8
Slide 13: WaMu integration update — on track
WaMu integration update — on track Completed rebrand of 708 branches and 1,900 ATMs, and opened 9 regional counseling centers for troubled homeowners in California Consolidated nearly 300 branches during the first quarter; an additional 92 consolidations expected for remainder of 2009 Deposit
Slide 14: Card Services (Managed)
Card Services (Managed) $ $ in in millions millions $ O/(U) Net loss of $547mm down $1.2B YoY 1Q09 4Q08 1Q08 Credit costs of $4.7B are due to higher net Revenue $5,129 $221 $1,225 charge-offs and a $1.2B addition to the allowance Credit Costs 4,653 687 2,983 for loan losses, reflecting a weakeni
Slide 15: Commercial Banking
Commercial Banking $ $ in in millions millions $ O/(U) Net income of $338mm up $46mm or 16% YoY 1Q09 4Q08 1Q08 Average loans and liability balances (excluding the Revenue $1,402 ($77) $335 WaMu portfolio) up 2% YoY and 15% YoY, Middle Market Banking 752 (44) 46 respectively Commercial Term Lendi
Slide 16: Treasury & Securities Services
Treasury & Securities Services $ $ in in millions millions $ O/(U) Net income of $308mm down 24% YoY Pretax margin of 26% 1Q09 4Q08 1Q08 Liability balances up 9% YoY and down 18% QoQ Revenue $1,821 ($428) ($92) Balances in 4Q08 reflected increased client Treasury Services 931 (137) 71 deposi
Slide 17: Asset Management
Asset Management $ $ in in millions millions $ O/(U) Net income of $224mm down 37% YoY 1Q09 4Q08 1Q08 Pretax margin of 22% Revenue $1,703 $45 ($198) Assets under management of $1.1T, down 6% YoY Private Bank 583 (47) (13) Market declines drove AUM down by $191B Institutional 460 133 (30) N
Slide 18: Corporate/Private Equity
Corporate/Private Equity $ $ in in millions millions $ O/(U) Private Equity 1Q09 4Q08 1Q08 Private Equity losses of $462mm in 1Q09 Private Equity ($280) $402 ($337) EOP Private Equity portfolio of $6.6B Represents 5.4% of shareholders’ Corporate 252 (911) (802) equity less goodwill Corporate M
Slide 19: Capital Management
Capital Management $ $ in in billions billions 1Q09 4Q08 1Q08 1 Tier 1 Capital $137 $136 $90 1 Tier 1 Capital ex. TARP $112 $111 $90 2 Tangible Common Equity $87 $84 $76 1 Risk-Weighted Assets $1,214 $1,245 $1,076 Total Assets $2,079 $2,175 $1,643 1 Tier 1 Capital Ratio 11.3% 10.9% 8.3% 1 Tier 1 Cap
Slide 20: Substantially increased loan loss reserves, maintaining strong coverage ratios
Substantially increased loan loss reserves, maintaining strong coverage ratios $ $ in in millions millions Loan Loss Reserve/Total Loans Loan Loss Reserve Loan Loss Reserve/NPLs 45000 5.0% Nonperforming Loans 5% 500% 36000 4.0% 4% 400% 27,381 27000 3.0% 3% 300% 18000 2.0% 200% 2% 23,164 13,246 19,05
Slide 21: Outlook
Outlook Investment Investment Bank Bank Treasury & Treasury & Securities Securities Services Services Trading can be volatile Revenue of $2.0B +/- for next couple of quarters driven by lower assets under custody and lower liability Uncertain environment, risks still remain balances and spreads
Slide 22: Notes on non-GAAP financial measures and forward-looking statements
Notes on non-GAAP financial measures and forward-looking statements This presentation includes non-GAAP financial measures. 1.Tangible Common Equity ("TCE") is calculated, for all purposes, as common stockholders equity (i.e., total stockholders' equity less preferred stock) less identifiable intang
Slide 23: Reconciliation of GAAP to Non-GAAP Results
Reconciliation of GAAP to Non-GAAP Results $ $ in in millions millions 1Q09 4Q08 1Q08 Revenue Reported Revenue 25,025 17,226 16,890 Impact of Card Securitizations 1,464 1,228 681 Tax Equivalent Adjustments 433 654 327 Managed Revenue 26,922 19,108 17,898 Merger-related Items 140 214 - Adjusted Reven