Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Q1 2008 Earnings Presentation
20 slides from Jp Morgan Chase &'s earnings presentation, Apr 17, 2008
Slide 1: April 16, 2008 Financial Results 1Q08
APRIL 16, 2008 FINANCIAL RESULTS 1Q08
Slide 2: 1Q08 Managed Results
1Q08 Managed Results1 FINANCIAL RESULTS 1Q08 4Q07 1Q07 4Q07 1Q07 Revenue (FTE)1 $17,898 ($377) ($1,843) (2)% (9)% Credit Costs1 5,105 1,944 3,504 61% 219% Expense2 8,931 (1,789) (1,697) (17)% (16)% Reported Net Income $2,373 ($598) ($2,414) (20)% (50)% Reported EPS $0.68 ($0.18) ($0.66) (21)% (49)%
Slide 3: Investment Bank
Investment Bank $ in millions 1Q08 4Q07 1Q07 $ O/(U) Revenue Investment Banking Fees Fixed Income Markets Equity Markets Credit Portfolio Credit Costs Expense Net Income Key Statistics1 Overhead Ratio Comp/Revenue ($87) Allowance for loan losses to average loans ROE VAR ($mm)2 FINANCIAL RESULTS 1 Ac
Slide 4: Leveraged Lending
Leveraged Lending . Net additional markdown of $1.1B for the quarter on the remaining funded and unfunded commitments of $22.5Bzx . $22.5B of funded and unfunded commitments with gross markdowns in excess of 11% at 3/31/2008 . $26.4B of funded and unfunded commitments at 12/31/2007 . ($2.3B) closed,
Slide 5: Other Investment Bank Risk Topics
FINANCIAL RESULTS Other Investment Bank Risk Topics Mortgage Relatedzx . Prime / Alt-A exposure of $12.8B -markdowns of $1.1B . Prime -securities of $5.6B, mostly AAA-rated and $1.5B of first lien mortgages . Alt-A -securities of $3.5B, mostly AAA-rated and $2.2B of first lien mortgageszx . Subprime
Slide 6: Retail Financial Services - Drivers
Retail Financial Services -Drivers FINANCIAL RESULTS Key Statistics 1 ($ in billions) . Average deposits up 4% YoYzx . Branch production statistics YoY: 1Q08 4Q07 1Q07 Regional Banking $214.3 11.1 Average Deposits $208.5 $206.5 . Checking accounts up 9% Checking Accts (mm) 10.8 10.2zx . Credit card
Slide 7: Retail Financial Services
Retail Financial Services $ in millions 1Q08 4Q07 1Q07$ O/(U) Net Interest Income Noninterest Revenue Total Revenue Credit Costs Expense Net Income Regional Banking Consumer and Business Banking Loan Portfolio/Other Mortgage Banking Auto Finance 4,702 2,492 2,570 ($227) Key Statistics1 Overhead (exc
Slide 8: Home Equity
Home Equity FINANCIAL RESULTS Key statisticsJPM 30-day delinquency trend 2.25% 1Q08 4Q07 1Q07 $95.0 $94.8 $87.7 EOP owned portfolio ($B) 2.00% $248 $68 Net charge-offs ($mm) $447 1.75% 1.89% 1.05% 0.32% Net charge-off rate 1.50% 1.25% 1.00% Sep-Dec-Mar-Jun-Sep-Dec-Mar-Jun-Sep-Dec-Mar0505 06 060606 0
Slide 9: Subprime Mortgage
Subprime Mortgage Subprime mortgage key statistics JPM 30-day delinquency trend 18% EOP owned portfolio ($B)1 $15.8 $15.5 $9.0 1Q08 4Q07 1Q07 15% 12% EOP held-for-sale ($B) —$3.7 9% Net charge-offs ($mm) $149 $71 $20 6% Net charge-off rate 3.82% 2.08% 0.92% 3% 1 Excludes mortgage loans held in the C
Slide 10: Prime Mortgage
Prime Mortgage JPM 30-day delinquency trend Prime mortgage portfolio key statistics 1Q08 4Q07 1Q07 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% Prime EOP balances in Corporate ($B) $41.1 $36.9 $26.5 EOP balances in RFS ($B) 4.0 3.6 7.4 Total $45.1 $40.5 $33.9 Net charge-offs ($mm) $50 $17 $3 Net
Slide 11: Card Services (Managed)
Card Services (Managed) 1 Actual numbers for all periods, not over/under $ in millions FINANCI A L R ESU L TS 1Q08 4Q07 1Q07 Revenue $3,904 ($67) $224 Credit Costs 1,670 (118) 441 Expense 1,272 49 31 Net Income $609 -($156) Key Statistics ($B)1 Avg Outstandings $153.6 $151.7 $149.4 EOP Outstandings
Slide 12: Commercial Banking
Commercial Banking 1 Actual numbers for all periods, not over/under 2 Includes deposits and deposits swept to on-balance sheet liabilities $ in millions FINANCI A L R ESU L TS 1Q08 4Q07 1Q07 Revenue $1,067 ($17) $64 Middle Market Banking 706 11 45 Mid-Corporate Banking 207 (32) (5) Real Estate Banki
Slide 13: Treasury & Securities Services
Treasury & Securities Services $ in millions 1Q08 4Q07 1Q07 $ O/(U) Revenue $1,913 Treasury Services 813 Worldwide Securities Svcs 1,100 Expense 1,228 Net Income Key Statistics1 Avg Liability Balances ($B)2 Assets under Custody ($T) $254.4 $15.7 $403 Pretax Margin 34% ROE 46% TSS Firmwide Revenue $2
Slide 14: Asset Management
Asset Management $ in millions 1Q08 4Q07 1Q07 $ O/(U) Revenue $1,901 ($488) Private Bank Institutional Retail Private Client Services Credit Costs Expense 655 (58) 490 (264) 466 (174) 290 8 16 17 1,323 (236) ($3) 95(61) (61) 24 25 88 Net Income $356 ($171) ($69) FINANCIAL RESULTS Key Statistics ($B)
Slide 15: Corporate/Private Equity
Corporate/Private Equity FINANCIAL RESULTS $ in millions 1Q08 4Q07 1Q07 $ O/(U) Private Equity $57 ($299) ($641) Corporate ex. Visa 15 108 44 Visa 955 955 955 $1,027 $778 $396 Net Income1 1 Includes after-tax merger costs of $14mm in 4Q07 and $38mm in 1Q07 Private Equityzx . Private Equity gains of
Slide 16: Capital Management / Fortress Balance Sheet
Capital Management / Fortress Balance Sheet $ in billions 1Q08 4Q07 1Q07 Tangible Common Equity1 Common Shareholders’ Equity less Goodwill Tier 1 Capital2 Risk Weighted Assets2 Tier 1 Capital Ratio2 Total Capital Ratio2 Leverage Ratio2 TCE/Managed RWA1,2 $74.0 $71.9 $65.7 $78.0 $72.6 $88.7 $82.5 $1,
Slide 17: Bear Stearns Transaction Update
Bear Stearns Transaction Update . Expect closing by June 30, 2008zx . Increase in capital at closing of approximately $5B +/ . Estimated adjustments to book value include: — Bear Stearns results through closing — Cost of de-leveraging / de-risking the balance sheet — Purchase accounting, restructuri
Slide 18: Bear Stearns Merger Integration Update
Bear Stearns Merger Integration Update Execution People Risks FINANCI A L R ESU L TS . Firmwide Merger Integration Office established . Each business area and function represented . Day 1 Integration Plan / Milestones established . 90% complete with acquisition suite selectionzx . Named new IB Manag
Slide 19: 2008 Outlook
2008 Outlook Investment Bank CB . Good market share but lower IB feeszx . Reduced trading expectations for foreseeable futurezx . Strong credit reserves; credit losses are idiosyncratic Retail Financial Services . Solid underlying growthzx . Continued deterioration in home equity, subprime and prime
Slide 20: Notes on non-GAAP financial measures and forward-looking statements
Notes on non-GAAP financial measures and forward-looking statements FINANCIAL RESULTS This presentation includes non-GAAP financial measures. 1. TCE as used on slide 2 for purposes of a return on tangible common equity and presented as Tangible Common Equity on slide 16 (line 1) is defined as common