Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Q3 2012 Earnings Presentation
25 slides from Jp Morgan Chase &'s earnings presentation, Oct 12, 2012
Slide 1: Financial Results 3Q12
October 12, 2012 F I N A N C I A L R E S U L T S 3Q12
Slide 2: 3Q12 Financial highlights
3Q12 record net income of $5.7B; record EPS of $1.40; revenue of $25.9B1 Strong performance across all businesses 3Q12 results included the following significant items $mm, excluding EPS 1 See note 1 on slide 23 2 Assumes a tax rate of 38% 3 See slide 8, “Charge-offs of post-bankruptcy consume
Slide 3: 3Q12 Financial results
3Q12 Financial results1 1 See note 1 on slide 23 2 Actual numbers for all periods, not over/under 3 See note 3 on slide 23 $mm, excluding EPS 3Q12 2Q12 3Q11 Revenue (FTE)1 $25,863 $2,971 $1,495 Credit costs 1,789 1,575 (622) Expense 15,371 405 (163) Reported net income $5,708 $748 $1,446 Net income
Slide 4: Investment Bank
3Q12 2Q12 3Q11 Revenue $6,277 ($489) ($92) Investment banking fees 1,429 184 390 Fixed income markets 3,685 (49) 357 Equity markets 1,073 (170) (351) Credit portfolio 90 (454) (488) Credit costs ($48) ($69) ($102) Expense 3,907 105 108 Net income $1,572 ($341) ($64) Key statistics ($B)2 EOP loans $7
Slide 5: Retail Financial Services
$ O/(U) 3Q12 2Q12 3Q11 Net interest income $3,872 ($29) ($190) Noninterest revenue 4,141 107 668 Revenue $8,013 $78 $478 Expense 5,039 313 474 Pre-provision profit $2,974 ($235) $4 Credit costs 631 1,186 (396) Net income $1,408 ($859) $247 ROE2,3 21% 34% 18% EOP equity ($B)2 $26.5 $26.5 $25.0 Memo:
Slide 6: Retail Financial Services: Consumer & Business Banking
$ O/(U) 3Q12 2Q12 3Q11 Net interest income $2,685 $5 ($45) Noninterest revenue 1,653 7 (299) Revenue $4,338 $12 ($344) Expense 2,916 174 74 Pre-provision profit $1,422 ($162) ($418) Credit costs 107 109 (19) Net income $785 ($161) ($238) Key drivers1 ($B) Average total deposits $393.8 $389.5 $362.2
Slide 7: Retail Financial Services: Mortgage Production and Servicing
$ O/(U) 3Q12 2Q12 3Q11 Production Production-related revenue excl. repurchase losses $1,778 $217 $475 Production expense 678 58 182 Income excl. repurchase losses $1,100 $159 $293 Repurchase losses (13) (3) 301 Income before income tax expense $1,087 $156 $594 Servicing Servicing-related revenue $1,
Slide 8: Retail Financial Services: Real Estate Portfolios
3Q12 2Q12 3Q11 Revenue $1,006 ($34) ($145) Expense 386 (26) 23 Pre-provision profit $620 ($8) ($168) Net charge-offs 1,420 724 521 Change in allowance (900) 350 (900) Credit costs 520 1,074 (379) Net income $60 ($657) $127 Key statistics1 ($B) Average home equity loans owned2 $93.2 $96.1 $104.9 Aver
Slide 9: Charge-offs of post-bankruptcy consumer loans
Charge-offs of post-bankruptcy consumer loans Regulatory guidance affecting JPM and the industry Firms required to charge off current and early stage delinquency (i.e., <60 DPD) post-Chapter 7 bankruptcy loans to the value of underlying collateral $2.8B of Mortgage UPB, largely home equity A
Slide 10: Card Services & Auto
3Q12 2Q12 3Q11 Revenue $4,723 $198 ($52) Credit costs2,3 1,231 497 (33) Expense 1,920 (176) (195) Net income $954 ($76) $105 ROE4,5 23% 25% 21% EOP Equity ($B)5 $16.5 $16.5 $16.0 Card Services — Key drivers5 ($B) Avg outstandings $124.3 $125.2 $126.5 Sales volume6 96.6 96.0 87.3 New accts opened (mm
Slide 11: Commercial Banking
3Q12 2Q12 3Q11 Revenue $1,732 $41 $144 Middle Market Banking 838 5 47 Corporate Client Banking 370 27 64 Commercial Term Lending 298 7 1 Real Estate Banking 106 (8) 2 Other 120 10 30 Credit costs ($16) $1 ($83) Expense 601 10 28 Net income $690 $17 $119 Key statistics ($B)2 Average loans and leases
Slide 12: Treasury & Securities Services
3Q12 2Q12 3Q11 Revenue $2,029 ($123) $121 Treasury Services 1,064 (10) 95 Worldwide Securities Services 965 (113) 26 Expense 1,443 (48) (27) Credit costs (12) (20) 8 Credit allocation income/(expense)2 54 (14) 45 Net income $420 ($43) $115 Key statistics3 Average liability balances ($B)4 $351.4 $348
Slide 13: Asset Management
3Q12 2Q12 3Q11 Revenue $2,459 $95 $143 Private Banking 1,365 24 67 Institutional 563 26 85 Retail 531 45 (9) Credit costs $14 ($20) ($12) Expense 1,731 30 (65) Net income $443 $52 $58 Key statistics ($B)2 Assets under management $1,381 $1,347 $1,254 Assets under supervision 2,031 1,968 1,806 Average
Slide 14: Corporate / Private Equity
Private Equity Private Equity net revenue was a loss of $135mm Private Equity portfolio of $8.1B (5.3% of stockholders’ equity less goodwill) Treasury and CIO Treasury and CIO net revenue of $713mm $888mm of extinguishment gains on redeemed TruPS Securities gains of $459mm Principal tran
Slide 15: Core net interest margin
Core net interest margin1 1 See note 1 on slide 23 2 The core and market-based NII presented for 2009 represent the quarterly average for 2009 (total for 2009 divided by 4); the yield for all periods represent the annualized yield Both Firmwide and Core NIM lower (4 bps and 8 bps, respectively) Qo
Slide 16: Fortress balance sheet and returns
Fortress balance sheet and returns Firmwide total credit reserves of $23.6B; loan loss coverage ratio of 2.61%4 Global Liquidity Reserve of $449B5 1 See note 4 on slide 23, and the Basel I Tier 1 capital and Tier 1 capital ratio on page 43 of the Firm’s third quarter 2012 earnings release financ
Slide 17: Outlook
Outlook Expect 2H12 operating expense comparable to 1H12 Continued modest pressure on NIM Firmwide guidance Corporate / Private Equity Expect Treasury and CIO quarterly net loss of approximately $300mm next quarter May vary by +/- $100mm Driven by implied yield curve and management decisio
Slide 18: Agenda: Appendix
Agenda Page 17 Appendix 17 F I N A N C I A L R E S U L T S
Slide 19: Peripheral European exposure
Peripheral European exposure1 Securities and trading Lending AFS securities Trading Derivative collateral Portfolio hedging Net exposure Spain $3.4 $0.4 $4.5 ($3.3) ($0.3) $4.7 Sovereign 0.0 0.4 0.6 0.0 0.0 1.0 Non-sovereign 3.4 0.0 3.9 (3.3) (0.3) 3.7 5 Italy $3.3 $0.1 $9.9 ($2.4) ($5.0) $5.9 Sover
Slide 20: Consumer credit - Delinquency trends
Note: Prime Mortgage excludes held-for-sale, Asset Management and Government Insured loans 1 Excluding purchased credit-impaired loans 2 See note 1 on slide 23 3 “Payment holiday” in 2Q09 impacted 30+ day and 30-89 day delinquency trends in 3Q09 Consumer credit – Delinquency trends1 $1,000 $2,650 $4
Slide 21: Real Estate Portfolios and Card Services - Coverage ratios
O/(U) Adjusted Adjusted 3Q121 2Q122 3Q11 3Q11 RFS Real Estate Portfolios (NCI): Net charge-offs ($) $595 $696 $899 ($304) NCO rate (%) 1.93% 2.21% 2.57% (64)bps Allowance for loan losses ($) $5,568 $6,468 $9,718 ($4,150) LLR/annualized NCOs3 234% 232% 270% Card Services Net charge-offs ($) $1,116 $1
Slide 22: Firmwide - Coverage ratios
15,503 14,841 13,441 11,928 11,005 9,993 10,605 10,068 11,370 34,161 32,266 29,750 28,520 28,350 27,609 25,871 23,791 22,824 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 0% 100% 200% 300% 400% 500% 600% 3Q12 2Q12 JPM 1 JPM 1 Peer avg. 3 Consumer LLR/Total lo
Slide 23: League table results
For YTD Sept. 2012, JPM ranked: #1 in Global IB fees #1 in Global Debt, Equity & Equity-related #1 in Global Long-term Debt #4 in Global Equity & Equity-related #2 in Global M&A Announced #1 in Global Loan Syndications League table results Source: Dealogic. Global Investment Banking fe
Slide 24: Notes on non-GAAP financial measures
Notes on non-GAAP financial measures 1. In addition to analyzing the Firm’s results on a reported basis, management reviews the Firm’s results and the results of the lines of business on a “managed” basis, which is a non-GAAP financial measure. The Firm’s definition of managed basis starts with the
Slide 25: Forward-looking statements
Forward-looking statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of JPMorgan Chase & Co.’s management and are subject to significant risks an