Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Q1 2009 Earnings Presentation
22 slides from Jp Morgan Chase &'s earnings presentation, Apr 17, 2009
Slide 1: 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 by 62% a
Slide 2: 1Q09 Managed results
1Q09 Managed results1 $ $ 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) Reported EPS $0.40 $0.34
Slide 3: Investment Bank
Investment Bank $ in 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 1,380 7 174 Record
Slide 4: IB league tables
IB league tables League table results Thomson Reuters Continue to rank #1 in two capital raising 1Q09 20081 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 & Equity-related US M&A Announce
Slide 5: IB key risk exposures: Leveraged lending
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 $ 11.5B
Slide 6: IB key risk exposures: Mortgage-related
IB key risk exposures Mortgage-related $ in 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) $12.7 1Q09 redu
Slide 7: Retail Financial Services—Drivers
Retail Financial Services—Drivers Retail Banking — $ in 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 accounts up 126% YoY and 2% or ~485K Dep
Slide 8: Retail Financial Services
Retail Financial Services $ in millions Total Retail Financial Services net income of $474mm $ O/(U) 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 Net income $474 ($1
Slide 9: Home Equity
Home Equity Excluding credit-impaired loans 30-day Delinquency trend Key statistics 1Q09 4Q08 1Q08 3.25% Excluding credit-impaired1 EOP owned portfolio ($B) $111.7 $114.3 $95.0 2.75% Net charge-offs ($mm) $1,098 $770 $447 2.25% Net charge-off rate 3.93% 2.67% 1.89% Nonperforming loans ($mm) $1,591 $
Slide 10: Prime Mortgage
Prime Mortgage Excluding credit-impaired loans 30-day Delinquency trend Key statistics 1Q09 4Q08 1Q08 7% 6% Excluding credit-impaired1 5% EOP balances ($B) $65.4 $65.2 $38.2 4% Net charge-offs ($mm) $312 $195 $50 3% Net charge-off rate 1.95% 1.20% 0.56% 2% Nonperforming loans ($mm) $2,691 $1,876 $86
Slide 11: Subprime Mortgage
Subprime Mortgage Excluding credit-impaired loans 30-day Delinquency trend Key statistics 28% 1Q09 4Q08 1Q08 Excluding credit-impaired1 24% EOP owned portfolio ($B) $14.6 $15.3 $15.8 20% Net charge-offs ($mm) $364 $319 $149 Net charge-off rate 9.91% 8.08% 3.82% 16% Nonperforming loans ($mm) $2,545 $
Slide 12: 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 system
Slide 13: Card Services (Managed)
Card Services (Managed) $ in 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 weakening credit Expense
Slide 14: Commercial Banking
Commercial Banking $ in millions Net income of $338mm up $46mm or 16% YoY $ O/(U) 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 Lending 228 (15) 228 Mi
Slide 15: Treasury & Securities Services
Treasury & Securities Services $ in 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 deposit activity resulting f
Slide 16: Asset Management
Asset Management $ in 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) Net AUM inflows of $15B f
Slide 17: Corporate/Private Equity
Corporate/Private Equity $ in 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 Merger-related items
Slide 18: Capital Management
Capital Management $ in billions 1Q09 4Q08 1Q08 Tier 1 Capital1 $137 $136 $90 Tier 1 Capital1 ex. TARP $112 $111 $90 Tangible Common Equity2 $87 $84 $76 Risk-Weighted Assets1 $1,214 $1,245 $1,076 Total Assets $2,079 $2,175 $1,643 Tier 1 Capital Ratio1 11.3% 10.9% 8.3% Tier 1 Capital Ratio1 ex. TARP
Slide 19: Substantially increased loan loss reserves, maintaining strong coverage ratios
Substantially increased loan loss reserves, maintaining strong coverage ratios $ in millions Loan Loss Reserve/Total Loans Loan Loss Reserve Loan Loss Reserve/NPLs 45000 5.0% Nonperforming Loans 500% 5% 36000 4.0% 400% 4% 27,381 27000 3.0% 300% 3% 18000 2.0% 200% 2% 23,164 13,246 19,052 9000 11,746
Slide 20: Outlook
Outlook Investment Bank Treasury & Securities 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 Retail Financial Services Asset Management Home lend
Slide 21: 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 22: Reconciliation of GAAP to Non-GAAP Results
Reconciliation of GAAP to Non-GAAP Results $ in 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 Revenue $27,062 $19