Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Q1 2006 Earnings Presentation
17 slides from Jp Morgan Chase &'s earnings presentation, Apr 19, 2006
Slide 1: Financial Results First Quarter 2006
F I N A N C I A L R E S U L T S A P R I L 1 9, 2 0 0 6 First Quarter 2006
Slide 2: 1Q06 Managed Results
1Q06 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 Actual numbers for all periods, not over/under
Slide 3: 1Q06 Significant Items
1Q06 Significant Items ($ in millions) 1 Management estimates the benefit in Card Services to be approximately $475mm in lower credit costs and $75mm in higher revenue related to the new bankruptcy legislation that became effective in 4Q05. 2 Incremental expense includes: 1) the additional expense f
Slide 4: Retail Financial Services
Retail Financial Services ($ in millions) 1 Includes $17mm related to adoption of SFAS 123R 2 Actual numbers for all periods, not over/under Net income of $881 million down 11% YoY driven by weak Mortgage Banking results Credit quality remains strong Announced acquisition of BK's consumer, small bus
Slide 5: Regional Banking
Regional Banking ($ in millions) 1 Includes Hybrid ARM mark-to-market of ($120)mm pre-tax in 4Q05 2 Actual numbers for all periods, not over/under Net income of $757mm down 4% YoY Branch production statistics YoY Deposits up 6% Checking accounts up 8% Branch sales of credit cards up 61% and mortgage
Slide 6: Mortgage Banking & Auto Finance
Continue to improve ROA on reduced originations Credit quality remains good Results include transfer of loans to held for sale Mortgage Banking & Auto Finance Auto Finance ($mm) 1 Actual numbers for all periods, not over/under Note: Results include the following pre-tax items: loss on transfer of au
Slide 7: Card Services (Managed)
Card Services (Managed) ($ in millions) 1 Actual numbers for all periods, not over/under 2 Includes $4mm related to adoption of SFAS 123R Net income of $901mm up 73% YoY ROO of 4.2%; management estimate of ROO ex. bankruptcy benefit of approximately 2.6% Bankruptcy legislation change positively impa
Slide 8: Commercial Banking
Commercial Banking ($ in millions) 1 Actual numbers for all periods, not over/under 2 Includes deposits and deposits swept to on-balance sheet liabilities 3 Includes $29mm related to adoption of SFAS 123R Net income of $240mm up 4% YoY Loans up 9% YoY due to growth across all segments Liability bala
Slide 9: Treasury & Securities Services
Treasury & Securities Services ($ in millions) Record net income of $312mm up 23% YoY and 2% QoQ Pre-tax margin of 29% Liability balances up 22% YoY; Assets under custody up 14% YoY5 Revenue up 12% YoY driven by wider spreads on higher liability balances, increased product volume, market appreciatio
Slide 10: Asset & Wealth Management
Asset & Wealth Management ($ in millions) 1 Actual numbers for all periods, not over/under 2 1Q06 does not include the loans and deposits of BrownCo, which were both $3bn at the time of sale on November 30, 2005 Net income of $313mm up 13% YoY Pre-tax margin of 31%; pre-tax margin ex. SFAS 123R of 3
Slide 11: Corporate
Corporate Total Corporate ($mm) Treasury ($mm) 2 Actual numbers for all periods, not over/under Private Equity ($mm) Other Corporate ($mm) 3 1Q05 included WorldCom settlement of $558mm after-tax 1 Includes $57mm in pre-tax expense related to adoption of SFAS 123R
Slide 12: Capital Strength
Capital Strength 1 Estimated for 1Q06 2 There is $7.8B remaining capacity from the $8B authorized by the Board in March 2006.
Slide 13: 1Q06 Summary Assessment
1Q06 Summary Assessment IB net income of $1 billion1 on record revenue Regional Banking - Good deposit and account growth Card managed net interest margin up QoQ and spend volumes up YoY Treasury & Securities Services, Asset & Wealth Management and Commercial Banking produced good returns on higher
Slide 14: Comments on Outlook
Comments on Outlook IB fee pipeline continues to be strong Card Services: Underlying credit appears to be better Credit costs expected to be higher in 2Q but still below pre-bankruptcy law change levels Minimum payment impact in 2H06 expected to be approximately $500mm (split evenly between revenue
Slide 15: Appendix
APPENDIX JPMorganChase ©
Slide 16: 1Q06 Impact - Retirement Eligible
1Q06 Impact of SFAS 123R - Retirement Eligible Note: JPMorgan Chase adopted Statement of Financial Accounting Standards No. 123 (Revised 2004), ("Share-Based Payment") as of January 1, 2006 under the modified prospective method. SFAS 123R requires that stock compensation granted to retirement-eligib
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