Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Q2 2009 Earnings Presentation
23 slides from Jp Morgan Chase &'s earnings presentation, Jul 16, 2009
Slide 1: Financial Results 2Q09
FINANCIAL RESULTS 2Q09 July 16, 2009
Slide 2: 2Q09 Financial highlights
2Q09 Financial highlights Net income of $2.7B; EPS of $0.28 Earnings per share reduced by TARP repayment ($0.27) and FDIC special assessment ($0.10) Record firmwide revenue of $27.7B, resulting in record revenue for the first half of 2009 (on a managed basis1): Reported record Investment Ban
Slide 3: 2Q09 Managed results
2Q09 Managed results1 $ $ in in millions millions $ O/(U) 2Q09 1Q09 2Q08 Results excl. Merger-related items2 Revenue (FTE)1 $27,791 $729 $7,693 Credit Costs1 9,695 (365) 5,420 Expense 13,346 210 1,350 Merger-related items2 (after-tax) (158) 76 382 Reported Net Income $2,721 $580 $718 Net Income Appl
Slide 4: Investment Bank
Investment Bank $ $ in in millions millions $ O/(U) Net income of $1.5B on revenue of $7.3B 2Q09 1Q09 2Q08 Record IB fees of $2.2B up 29% YoY, reflecting record equity underwriting Revenue $7,301 ($1,070) $1,801 Investment Banking Fees 2,239 859 504 Record Fixed Income Markets revenue of $4.9B
Slide 5: IB league tables
IB league tables League League table table results results 1 YTD June 09 2008 Ranked #1 in Global Fees for YTD June 2009, with Rank Share Rank Share 10.1% market share per Dealogic Based on fees (per Dealogic): Ranked #1 for YTD June 2009 per Thomson Global IB fees #1 10.1% #2 8.6% Reuters in: B
Slide 6: IB key risk exposures
IB key risk exposures Leveraged Leveraged lending lending Market value of $3.3B at 6/30/09 (gross markdowns of $4.6B, or 58%) Exposure reduced by 31% or $3.6B in 2Q09 Modestly positive gains in 2Q09, net of hedges, on remaining legacy commitments Mortgage-related Mortgage-related ($ ($ in in b
Slide 7: Retail Financial Services—drivers
Retail Financial Services—drivers Retail Retail Banking Banking ($ ($ in in billions) billions) Average deposits of $348B up 1% QoQ and checking accounts up by ~300K 2Q09 1Q09 2Q08 Margin expansion driven by a disciplined pricing Key Statistics strategy and a shift to wider spread deposit produc
Slide 8: Retail Financial Services
Retail Financial Services $ $ in in millions millions $ O/(U) Retail Financial Services net income of $15mm down 97% from the prior year 2Q09 1Q09 2Q08 Retail Banking net income of $970mm up 44% YoY: Retail Financial Services Total revenue of $4.5B increased 65% YoY reflecting the Net income $
Slide 9: Impact of foreclosure moratoriums and trial modifications on delinquencies
Impact of foreclosure moratoriums and trial modifications on delinquencies Foreclosure Foreclosure moratoriums moratoriums Trial Trial modifications modifications Two foreclosure moratoriums halted stages of the A customer must make three successful monthly trial foreclosure process while forecl
Slide 10: Home Equity
Home Equity Excluding credit-impaired loans 30+ 30+ day day delinquency delinquency trend trend Key Key statistics statistics 3.25% 2Q09 1Q09 2Q08 1 Excluding credit-impaired EOP owned portfolio ($B) $108.2 $111.7 $95.1 2.75% Net charge-offs ($mm) $1,265 $1,098 $511 Net charge-off rate 4.61% 3.93% 2
Slide 11: Prime Mortgage
Prime Mortgage Excluding credit-impaired loans 30+ day 30+ day delinquency delinquency trend trend Key Key statistics statistics 11% 2Q09 1Q09 2Q08 1 Excluding credit-impaired 9% EOP owned portfolio ($B)2 $62.1 $65.4 $40.1 7% Net charge-offs ($mm)3 $481 $312 $104 Net charge-off rate 3.07% 1.95% 1.08
Slide 12: Subprime Mortgage
Subprime Mortgage Excluding credit-impaired loans 30+ 30+ day day delinquency delinquency trend trend Key Key statistics statistics 28% 2Q09 1Q09 2Q08 1 Excluding credit-impaired 24% EOP owned portfolio ($B) $13.8 $14.6 $14.8 Net charge-offs ($mm) $410 $364 $192 20% Net charge-off rate 11.50% 9.91%
Slide 13: Card Services (Managed)
Card Services (Managed) $ $ in in millions millions $ O/(U) Net loss of $672mm down $922mm YoY; decline in results driven by higher credit costs, partially offset by an increase 2Q09 1Q09 2Q08 in revenue Revenue $4,868 ($261) $1,093 Credit costs of $4.6B are due to higher net charge-offs, Credit
Slide 14: Commercial Banking
Commercial Banking $ $ in in millions millions $ O/(U) Net income of $368mm up 4% YoY 2Q09 1Q09 2Q08 Excluding the WaMu portfolio, average loan balances Revenue $1,453 $51 $347 were down 8% YoY, while average liability balances Middle Market Banking 772 20 64 were up 6% YoY Commercial Term Lendi
Slide 15: Treasury & Securities Services
Treasury & Securities Services $ $ in in millions millions $ O/(U) Net income of $379mm down 11% YoY and up 23% QoQ Results include seasonal activity in securities lending 2Q09 1Q09 2Q08 and depositary receipts Revenue $1,900 $79 ($119) Pretax margin of 31% Treasury Services 934 3 29 Liabili
Slide 16: Asset Management
Asset Management $ $ in in millions millions $ O/(U) Net income of $352mm down 11% YoY and up 57% QoQ: QoQ increase driven by higher valuations of seed 2Q09 1Q09 2Q08 capital investments, higher brokerage fees and the Revenue $1,982 $279 ($82) effect of improved market levels Private Bank 640 57
Slide 17: Corporate/Private Equity
Corporate/Private Equity Net Net Income Income ($ ($ in in millions) millions) $ O/(U) Private Equity 2Q09 1Q09 2Q08 Private Equity losses of $20mm in 2Q09 Private Equity ($27) $253 ($126) EOP Private Equity portfolio of $6.6B Represents 6.2% of shareholders’ equity less goodwill Corporate 993
Slide 18: Capital Management
Capital Management $ $ in in billions billions 2Q09 1Q09 2Q08 Tier 1 Capital1 $122 $112 $99 Tier 1 Common Capital1,2 $97 $88 $77 Risk-Weighted Assets 1 $1,264 $1,207 $1,079 Total Assets $2,027 $2,079 $1,776 Tier 1 Capital Ratio1 9.7% 9.3% 9.2% Tier 1 Common Ratio1,2 7.7% 7.3% 7.1% Impact of credit
Slide 19: 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 5.25% 5% 500% Nonperforming Loans 36000 4.20% 29,072 4% 400% 27,381 3.15% 27000 300% 3% 18000 2.10% 2% 200% 19,052 2
Slide 20: Outlook
Outlook Investment Investment Bank Bank Treasury Treasury & & Securities Securities Services Services Trading can be volatile 2Q09 results include benefit of dividend season Uncertain environment, risks still remain Performance will be affected by market levels and liability balance flows Re
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. Financial results are presented on a managed basis, as such basis is described in the firm’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009 and Annual Re
Slide 22: Reconciliation of GAAP to Non-GAAP Results
Reconciliation of GAAP to Non-GAAP Results $ $ in in millions millions 2Q09 1Q09 2Q08 Revenue Reported Revenue $25,623 $25,025 $18,399 Impact of Card Securitizations 1,664 1,464 830 Tax Equivalent Adjustments 422 433 449 Managed Revenue $27,709 $26,922 $19,678 Merger-related Items 82 140 420 Adjuste
Slide 23: Reconciliation of GAAP to Non-GAAP Results (cont'd.)
Reconciliation of GAAP to Non-GAAP Results (cont’d.) $ $ in in millions millions Reported 2Q09 1Q09 2Q08 Net Income $2,721 $2,141 $2,003 Less: One-time, non-cash negative adjustment of TARP repayment 1,112 - - Less: Preferred Dividend 473 529 90 Net Income applicable to common equity $1,136 $1,612 $