Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Q2 2007 Earnings Presentation
15 slides from Jp Morgan Chase &'s earnings presentation, Jul 19, 2007
Slide 1: Financial Results Second Quarter 2007
F I N A N C I A L R E S U L T S Second Quarter 2007 J U L Y 1 8, 2 0 0 7
Slide 2: 2Q07 Managed Results
2Q07 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 $64mm in 2Q07, $62mm in 1Q07 and $86mm in 2Q06 3 On October
Slide 3: Investment Bank
$ in millions 1 Actual numbers for all periods, not over/under 2 Ratio is calculated excluding effect of SFAS 123R 3 Average Trading and Credit Portfolio VAR 4 Source: Thomson Financial YTD June 30, 2007 Investment Bank Net income of $1.2B on revenue of $5.8B ROE of 23% Record IB fees of $1.9B up 39
Slide 4: Key Statistics; Retail Financial Services - Drivers
Key Statistics1 ($ 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 4
Slide 5: Retail Financial Services
Retail Financial Services $ in millions 1 As a result of the adoption of SFAS 159 ("Fair Value Option") in the first quarter of 2007 certain loan origination costs have been reclassified to expense (previously netted against revenue) 2 Actual numbers for all periods, not over/under Net income of $78
Slide 6: Home Equity
Home Equity Line 1 Line 2 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 0.0128 2/1/2005 0.0126 3/1/2005 0.0115 4/1/2005 0.0111 5/1/2005 0.0108 6/1/2005 0.0111 7/1/2005 0.0116 8/1/2005 0.0112 9/1/2005 0.0115 10/1/2005 0.012 11/1/2005
Slide 7: Subprime Mortgage
Subprime Mortgage JPMC 30-day delinquency trend1 Key statistics 1 Delinquency rates exclude government guaranteed mortgages. Includes loans transferred to Corporate in January 2007 Comments on subprime mortgage portfolio Portfolio performance is consistent with 1Q07 expectations Majority of current
Slide 8: Card Services (Managed)
$ in millions Card Services (Managed) 1 Includes the elimination of certain over-limit fees and the two-cycle billing method for calculating finance charges 2 Actual numbers for all periods, not over/under Net income of $759mm down 13% YoY ROE of 22% Avg outstandings of $147B up 7% YoY and down 1% Q
Slide 9: Commercial Banking
$ in millions 1 Actual numbers for all periods, not over/under 2 Includes deposits and deposits swept to on-balance sheet liabilities Commercial Banking Net income of $284mm flat YoY as higher net revenue was offset by higher provision for credit losses Liability balances up 16% YoY and loans up 14%
Slide 10: Treasury & Securities Services
$ in millions 1 Actual numbers for all periods, not over/under 2 Reflects increase in allocated capital from $2.2B to $3.0B in 1Q07 3 Includes deposits and deposits swept to on-balance sheet liabilities Treasury & Securities Services Record net income of $352mm up 11% YoY Pretax margin of 32% Liabil
Slide 11: Asset Management
$ in millions 1 Actual numbers for all periods, not over/under 2 $5.3B of prime mortgage loans were transferred to Corporate on 1/1/07 Asset Management Record net income of $493mm up 44% YoY Pretax margin of 37% Record revenue of $2.1B up 32% YoY with growth across all client segments Expense up 25%
Slide 12: Corporate
1 Discontinued operations relate to the sale of select corporate trust businesses, with net income of $56mm in 2Q06 2 Actual numbers for all periods, not over/under Corporate Total Corporate ($ in millions) Private Equity ($ in millions) Treasury and Other Corporate ($ in millions) Treasury and Othe
Slide 13: Capital Management
Capital Management 1 See note 1 on slide 14 Repurchased 36.7mm shares for $1.9B in 2Q07 $ in billions
Slide 14: 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 13 (line 1) is defined as common stockholders' equity less identifiable intangible a
Slide 15: Forward-looking statements
Forward-looking statements 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 unc