Form 8-K JPMORGAN CHASE & CO For: Apr 14
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): April 14, 2015
JPMorgan Chase & Co.
(Exact name of registrant as specified in its charter)
Delaware | 1-5805 | 13-2624428 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. employer identification no.) |
270 Park Avenue, New York, New York | 10017 | |
(Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code: (212) 270-6000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Item 7.01 Regulation FD Disclosure
On April 14, 2015, JPMorgan Chase & Co. (“JPMorgan Chase” or the “Firm”) held an investor presentation to review first quarter 2015 earnings.
Exhibit 99.1 is a copy of slides furnished for, and posted on the Firm’s website in connection with, the presentation. The slides are being furnished pursuant to Item 7.01, and the information contained therein shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities under that Section. Furthermore, the information contained in Exhibit 99.1 shall not be deemed to be incorporated by reference into the filings of the Firm under the Securities Act of 1933.
This Current Report on Form 8-K (including the Exhibit hereto) 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 and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Factors that could cause JPMorgan Chase and Co.’s actual results to differ materially from those described in the forward-looking statements can be found in JPMorgan Chase & Co.’s Annual Report on Form 10-K for the year ended December 31, 2014, which has been filed with the Securities and Exchange Commission and is available on JPMorgan Chase’s website (http://investor.shareholder.com/jpmorganchase) and on the Securities and Exchange Commission’s website (www.sec.gov). JPMorgan Chase & Co. does not undertake to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit No. | Description of Exhibit | |
99.1 | JPMorgan Chase & Co. Earnings Presentation Slides – Financial Results – 1Q15 | |
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
JPMorgan Chase & Co. |
(Registrant) |
By: | /s/ Mark W. O’Donovan |
Mark W. O’Donovan | |
Managing Director and Corporate Controller | |
(Principal Accounting Officer) | |
Dated: | April 14, 2015 |
3
INDEX TO EXHIBITS
Exhibit No. | Description of Exhibit | |
99.1 | JPMorgan Chase & Co. Earnings Presentation Slides – Financial Results – 1Q15 | |
4
April 14, 2015 F I N A N C I A L R E S U L T S 1Q15
F I N A N C I A L R E S U L T S 1Q15 Financial highlights 1 See note 2 on slide 19 2 Represents the estimated common equity Tier 1 (“CET1”) capital and ratio under the Basel III Advanced Fully Phased-in capital rules to which the Firm will be subject to as of January 1, 2019. See note 3 on slide 19 3 See note 1 on slide 19 4 Last twelve months (“LTM”). Net of employee issuances 5 See note 4 on slide 19 6 See note 9 on slide 19 7 Net of employee issuance 8 The repurchase amount is presented on a settlement-date basis 9 Subject to the Board’s approval at the customary times those dividends are declared 10 Assumes a tax rate of 38% for items that are tax deductible 1Q15 net income of $5.9B and EPS of $1.45 Revenue of $24.8B3 Adjusted expense of $14.2B5 and adjusted overhead ratio of 57%5 Fortress balance sheet Basel III Advanced CET1 capital2 of $167B Core loans6 up 10% YoY and 2% QoQ Delivered strong capital return ~$3.1B7 of net capital returned to shareholders in 1Q15, including $1.6B of net repurchases8 CCAR non-objection received March 2015 Board intends to increase common dividend to $0.44, effective 2Q159 $6.4B gross repurchase authorization 2Q15 – 2Q16 Significant items ($mm, excluding EPS) Pretax Net income10 EPS10 Firmwide Legal Expense ($687) ($487) ($0.13) Net payout ratio LTM4 53% ROTCE1 14% Overhead ratio3 60% CET1 ratio2 10.6% 1
F I N A N C I A L R E S U L T S $ O/(U) 1Q15 4Q14 1Q14 Revenue (FTE)1 $24,820 $1,271 $967 Expense 14,883 (526) 247 Credit costs 959 119 109 Reported net income $5,914 $983 $645 Net income applicable to common stockholders $5,452 $964 $559 Reported EPS $1.45 $0.26 $0.17 ROE2 11% 9% 10% ROTCE2,3 14 11 13 Overhead ratio1,2 60 65 61 Memo: Adjusted expense 4 $14,196 ($99) ($402) Memo: Adjusted overhead ratio 1,4 57% 61% 61% 1Q15 Financial results1 Note: Certain prior period amounts have been revised; for further discussion, see page 2 of the Earnings Release Financial Supplement 1 See note 1 on slide 19 2 Actual numbers for all periods, not over/(under) 3 See note 2 on slide 19 4 See note 4 on slide 19 $mm, excluding EPS 1Q15 ROE O/H ratio CCB 17% 58% CIB 16% 59% CB 17% 41% AM 22% 72% 2
F I N A N C I A L R E S U L T S 1Q15 4Q14 1Q14 Basel III Advanced Fully Phased-In2 CET1 $167 $165 $156 CET1 ratio 10.6% 10.2% 9.5% Tier 1 capital $189 $185 $171 Tier 1 capital ratio 12.0% 11.4% 10.4% Total capital $210 $206 $192 Total capital ratio 13.4% 12.7% 11.7% Risk-weighted assets $1,574 $1,619 $1,637 Firm SLR3 5.7% 5.6% 5.1% Bank SLR3 6.0 5.8 5.3 HQLA4 $614 $600 $538 Total assets (EOP) $2,577 $2,573 $2,477 Tangible common equity $169 $166 $158 Tangible book value per share5 $45.45 $44.60 $41.65 $B, except where noted Fortress balance sheet and returns1 Note: Certain prior period amounts have been revised; for further discussion, see page 2 of the Earnings Release Financial Supplement 1 See notes on non-GAAP financial measures on slide 19 2 Estimated for 1Q15. Represents the capital rules the Firm will be subject to as of January 1, 2019. See note 3 on slide 19 3 Estimated for 1Q15. See note 3 on slide 19. 1Q14 reflects the U.S. Final Leverage Ratio NPR issued on April 8, 2014 4 High quality liquid assets (“HQLA”) is the estimated amount of assets that qualify for inclusion in the U.S. liquidity coverage ratio (“LCR”) for 1Q15 and 4Q14; and for 1Q14 represents amount that qualified under Basel III LCR 5 See note 2 on slide 19 6 Estimated for 1Q15. Based on the U.S. LCR rules, which became effective January 1, 2015 7 Estimate as of 4Q14 8 See note 5 on slide 19 1Q15 Basel III Standardized Fully Phased-in of 10.8%2 Firm is compliant with U.S. LCR6 and Basel final NSFR7 Preferred stock issuance: $1.4B Firmwide total credit reserves of $14.7B; non- performing loan loss coverage ratio (ex. credit card) of 106%8 3
F I N A N C I A L R E S U L T S Balance sheet and NII/NIM – QoQ change Assets: Average and EOP ($B) Average EOP Deposits: Average and EOP ($B) Average EOP Average balance sheet ~$46B higher QoQ and flat on a spot basis Growth in cash balances largely driven by higher deposits EOP deposit balances flat QoQ, with mix shift into more stable deposits Increase of ~$28B in CCB deposits Decline of ~$24B in other LOB deposits – predominantly non- operating deposits $4B $46B $5B $28 ($24) ∆ $17 ∆ ($13) $14 $23 ∆ $66 ∆ ($20) Note: Numbers may not sum due to rounding 1 Includes cash and due from banks and deposits with banks 2 Managed basis. See note 1 on slide 19 Higher cash balances primary driver of Firm NIM compression of 7 bps QoQ to 2.07% Firm NII decrease of $374mm QoQ primarily driven by day count and lower balances in investment securities and trading assets Non-cash assets $2,072 Non-cash assets $2,052 Non-cash assets $2,061 Non-cash assets $2,048 Cash¹ $439 Cash¹ $505 Cash¹ $512 Cash¹ $529 $2,511 $2,557 $2,573 $2,577 4Q14 1Q15 4Q14 1Q15 Non-cash assets $2,072 Non-cash assets $2,052 Non-cash assets $2,061 Non-cash assets $2,048 Cash¹ $439 Cash¹ $505 Cash¹ $512 Cash¹ $529 $2,511 $2,557 $2,573 $2,577 4Q14 1Q15 4Q14 1Q15 $38B Balance sheet commentary NII/NIM2 commentary CCB $498 CCB $512 CCB $503 CCB $531 Deposits ex. CCB $801 Deposits ex. CCB $824 Deposits ex. CCB $861 Deposits ex. CCB $837 $1,299 $1,337 $1,363 $1,368 4Q14 1Q15 4Q14 1Q15 CCB $498 CCB $512 CCB $503 CCB $531 Deposits ex. CCB $801 Deposits ex. CCB $824 Deposits ex. CCB $861 Deposits ex. CCB $837 $1,299 $1,337 $1,363 $1,368 4Q14 1Q15 4Q14 1Q15 CCB $498 CCB $512 CCB $503 CCB $531 Deposits ex. CCB $801 Deposits ex. CCB $824 Deposits ex. CCB $861 Deposits ex. CCB $837 $1,299 $1,337 $1,363 $1,368 4Q14 1Q15 4Q14 1Q15 CCB $498 CCB $512 CCB $503 CCB $531 Deposits ex. CCB $801 Deposits ex. CCB $824 Deposits ex. CCB $861 Deposits ex. CCB $837 $1,299 $1,337 $1,363 $1,368 4Q14 1Q15 4Q14 1Q15 4
F I N A N C I A L R E S U L T S Consumer & Community Banking1 Leadership positions $mm Total headcount11 down ~1,900 YTD Reduced expense by $247mm or 4% YoY – overhead ratio of 58% Consumer & Business Banking #1 in deposit growth for the third consecutive year4 #1 in customer satisfaction among the largest U.S. banks for the third consecutive year, according to ACSI #1 in consumer retail banking nationally for the third consecutive year, according to TNS, and winner of four TNS Choice Awards in 2015 Mortgage Banking #2 in customer satisfaction for mortgage servicing by J.D. Power5 Card, Commerce Solutions & Auto #1 credit card issuer in the U.S. based on loans outstanding6 #1 U.S. co-brand credit card issuer7 #1 global Visa issuer8 #1 wholly-owned merchant acquirer9 with ~50% of U.S. eCommerce volume10 #1 in total U.S. credit and debit payments volume9 1 See note 1 on slide 19 2 Actual numbers for all periods, not over/(under) 3 2015 includes $5.0B of capital held at the CCB level related to legacy mortgage servicing matters; 2014 includes $3.0B 4 Based on FDIC 2014 Summary of Deposits survey per SNL Financial 5 Based on J.D. Power 2014 Mortgage Servicing Study 6 Based on disclosures by peers and internal estimates as of 4Q14 7 Based on Phoenix Credit Card Monitor for the period January 2014 to February 2015; based on card accounts and revolving balance dollars 8 Based on Visa data as of 4Q14 for consumer and business credit card sales volume 9 Based on Nilson data as of 2014 and internal estimates 10 Based on the Internet Retailer’s 2015 Leading Vendors to the Top 1000 report 11 Includes employees and contractors $ O/(U) 1Q15 4Q14 1Q14 Net interest income $6,968 ($160) ($132) Noninterest revenue 3,736 (85) 302 Revenue 10,704 (245) 170 Expense 6,190 (221) (247) Net charge-offs 1,054 (143) (212) Change in allowance (124) 123 326 Credit costs 930 (20) 114 Net income $2,219 $40 $238 Key drivers/statistics ($B)2 EOP Equity3 $51.0 $51.0 $51.0 ROE 17% 16% 15% Overhead ratio 58 59 61 Average loans $398.1 $394.2 $389.3 Average deposits 512.2 497.7 471.6 Client investmen assets (EOP) 219.2 213.5 195.7 Number of branches 5,570 5,602 5,632 Active mobile cust mers (000's) 19,962 19,084 16,405 CCB households ( m) 57.4 57.2 57.0 Headcount and operating leverage 5
F I N A N C I A L R E S U L T S Consumer & Community Banking Consumer & Business Banking 1 Actual numbers for all periods, not over/(under) Financial performance Key drivers $mm Net income of $828mm, up 10% YoY and down 4% QoQ Net revenue of $4.4B, down 1% YoY and 4% QoQ on spread compression, day count and seasonality Expense down 3% YoY and 2% QoQ on branch efficiencies Average total deposits of $497.6B, up 9% YoY and 3% QoQ Deposit margin of 1.99%, down 28 bps YoY and 12 bps QoQ Record client investment assets of $219.2B, up 12% YoY and 3% QoQ Business Banking loan originations up 2% YoY and 1% QoQ Average Business Banking loans up 6% YoY and 2% QoQ $ O/(U) 1Q15 4Q14 1Q14 Net interest income $2,609 ($124) ($117) Noninterest revenue 1,749 (77) 77 Revenue 4,358 (201) (40) Expense 2,958 (68) (107) Credit costs 60 (28) (16) Net income $828 ($33) $77 Key drivers/statistics ($B)1 EOP Equity $11.5 $11.0 $11.0 ROE 28% 31% 27% Average total deposits $497.6 $482.8 $458.5 Deposit margin 1.99% 2.11% 2.27% Client investment assets (EOP) $219.2 $213.5 $195.7 Net new investme t a sets 3.8 3.3 4.2 Business Banking l an originations 1.5 1.5 1.5 Business Banki g l an balances (Avg) 20.1 19.8 18.9 6
F I N A N C I A L R E S U L T S Consumer & Community Banking Mortgage Banking $mm 1 Excludes purchased credit-impaired (PCI) write-offs of $55mm, $337mm, and $61mm for 1Q15, 4Q14 and 1Q14, respectively. See note 5 on slide 19 2 Actual numbers for all periods, not over/(under) 3 Firmwide mortgage origination volume was $26.6B, $24.4B, and $18.2B, for 1Q15, 4Q14 and 1Q14, respectively. 4 Excludes the impact of PCI loans. The allowance for PCI loan losses was $3.3B at the end of both 1Q15 and 4Q14 and $4.1B at the end of 1Q14, respectively. See note 5 on slide 19 5 See note 6 on slide 19 Financial performance Key drivers Net income of $326mm Excluding loan loss reserve releases5, up $256mm YoY Revenue of $1.7B, up 9% YoY, driven by lower MSR losses, partially offset by lower servicing revenue; down 7% QoQ on lower repurchase benefit and lower servicing revenue Expenses of $1.2B, down 13% YoY and 6% QoQ on lower headcount Credit costs up $27mm YoY, driven by lower loan loss reserve releases, largely offset by lower net charge-offs Mortgage originations of $24.7B, up 45% YoY and 7% QoQ Net charge-off rate1 of 30bps, down 25bps YoY and 3bps QoQ Average NCI owned portfolio of $141.6B, up 8% YoY and 5% QoQ EOP total loans serviced of $924.3B, down 7% YoY and 3% QoQ $ O/(U) 1Q15 4Q14 1Q14 Net interest income $1,056 $26 ($31) Noninterest revenue 693 (152) 182 Revenue 1,749 (126) 151 Expense 1,219 (77) (184) Net charge-offs1 104 (9) (73) Change in allowance (100) – 100 Credit costs 4 (9) 27 Net income $326 ($12) $194 Key drivers/statistics ($B)2 EOP equity $16.0 $18.0 $18.0 ROE 7% 7% 3% Mortgage originations3 $24.7 $23.0 $17.0 Average NCI owned portfolio 141.6 135.3 131.0 EOP total loa s ser iced 924.3 948.8 998.1 ALL/nonacc u l loan retained4 38% 39% 36% Net charge-off rate1,4 0.30 0.33 0.55 7
F I N A N C I A L R E S U L T S Note: Commerce Solutions, formerly known as Merchant Services, includes Chase Paymentech, ChaseNet and Chase Offers businesses 1 Actual numbers for all periods, not over/(under) 2 Excludes Commercial Card 3 For adjusted net charge-off trend see slide 16 in appendix 4 See note 6 on slide 19 Consumer & Community Banking Card, Commerce Solutions & Auto $mm Key drivers Net income of $1.1B Excluding loan loss reserve releases4, up 11% YoY Revenue of $4.6B, up 1% YoY and 2% QoQ Noninterest expense of $2.0B, up 2% YoY from higher Auto lease depreciation and down 4% QoQ on lower marketing expense Credit costs up 13% YoY, driven by lower loan loss reserve releases, largely offset by lower net charge-offs Card Services Average loans of $125.0B, up 1% YoY and down seasonally 2% QoQ Sales volume2 of $112.8B, up 8% YoY and down seasonally 9% QoQ Net charge-off rate of 2.62%, down from 2.93% in the prior year and 2.69% in the prior quarter Commerce Solutions Merchant processing volume of $221.2B, up 13% YoY and down seasonally 4% QoQ Transaction volume of 9.8B, up 8% YoY and down seasonally 5% QoQ Auto Average loans up 4% YoY and 3% QoQ Originations up 9% YoY and 6% QoQ Financial performance 1Q15 4Q14 1Q14 Net interest income 3,303 (62) 16 Noninterest revenue 1,294 144 43 Revenue $4,597 $82 $59 Expense 2,013 (76) 44 Net charge-offs 891 (108) (122) Change in allowance (25) 125 225 Credit costs 866 17 103 Net income $1,065 $85 ($33) EOP equity ($B)1 $18.5 $19.0 $19.0 ROE1 22% 20% 23% Card Services – Key drivers/statistics ($B)1 Average loans $125.0 $127.4 $123.3 Sales volume2 112.8 123.6 104.5 Net revenue rate 12.19% 11.47% 12.29% Net charge-off rate3 2.62 2.69 2.93 30+ day delinquency rate 1.41 1.44 1.61 # of accounts with sales activity (mm)2 32.5 34.0 31.0 Commerce Solutions – Key drivers/statistics ($B)1 Merchant processing volume $221.2 $230.2 $195.4 # of total transactions (B) 9.8 10.3 9.1 Auto – Key rivers/st tistics ($B)1 Average loans $55.0 $53.6 $52.7 Originations 7.3 6.9 6.7 $ O/(U) 8
F I N A N C I A L R E S U L T S $ O/(U) 1Q15 4Q14 1Q14 Corporate & Investment Bank revenue $9,582 $2,199 $740 Investment banking fees 1,761 (50) 317 Treasury Services 1,012 (19) (20) Lending 353 89 28 Total Banking 3,126 20 325 Fixed Income Markets 4,065 1,535 176 Equity Markets 1,609 504 294 Securities Services 934 (160) (88) Credit Adjustments & Other (152) 300 33 Total Markets & Investor Services 6,456 2,179 415 Expense 5,657 81 53 Credit costs (31) 28 (80) Net income $2,537 $1,565 $412 Key drivers/statistics ($B)2 EOP equity $62.0 $61.0 $61.0 ROE 16% 5% 13% Overhead ratio 59 76 63 Comp/revenue 32 27 32 EOP loans $102.6 $102.0 $104.7 Average client deposits 444.2 433.8 412.6 Assets under custody ($T) 20.6 20.5 21.1 ALL/EOP loans ex-conduits and trade3,4 1.64% 1.82% 2.18% Net charge-off/(recovery) rate (0.05) (0.02) – Average VaR ($mm) $43 $40 $42 Corporate & Investment Bank1 $mm Financial performance Note: Certain prior period amounts have been revised; for further discussion, see page 2 of the Earnings Release Financial Supplement 1 See note 1 on slide 19 2 Actual numbers for all periods, not over/(under) 3 ALL/EOP loans as reported was 1.06%, 1.07%, and 1.23% for 1Q15, 4Q14, and 1Q14, respectively 4 See note 7 on slide 19 Net income of $2.5B on revenue of $9.6B ROE of 16% Banking revenue IB fees of $1.8B, up 22% YoY, with strength across products – Ranked #1 in Global IB fees for 1Q15 Treasury Services revenue of $1.0B, down 2% YoY Lending revenue of $353mm, up 9% YoY, largely reflecting higher gains on securities received from restructurings Markets & Investor Services revenue Markets revenue of $5.7B, up 9% YoY; ex-business simplification, up 20%4, primarily driven by: – Fixed Income Markets of $4.1B, up 5% YoY; ex-business simpli ication, up 20%4, primarily driven by higher revenues in Currencies & Emerging Markets and Rates – Equity Markets of $1.6B, up 22% YoY, showing strength across derivatives and cash Securities Services revenue of $934mm, down 9% YoY Credit Adjustments & Other loss of $152mm, primarily driven by valuation refinements as well as net FVA/DVA losses Expense of $5.7B, up 1% YoY, driven by higher legal expense and performance-based compensation, largely offset by business simplification 9
F I N A N C I A L R E S U L T S 1Q15 4Q14 1Q14 Revenue $1,742 ($28) $64 Middle Market Banking2 677 (15) (23) Corporate Client Banking2 564 40 102 Commercial Term Lending 308 (5) (6) Real Estate Banking 116 (4) (3) Other 77 (44) (6) Expense 709 43 23 Credit costs 61 109 56 Net income $598 ($95) $4 Key drivers/statistics ($B)3 EOP equity $14.0 $14.0 $14.0 ROE 17% 19% 17% Overhead ratio 41 38 41 Gross IB Revenue ($mm) $753 $557 $447 Average loans 150.3 145.7 137.7 EOP loans 153.7 148.5 138.9 Average client deposits 210.0 208.4 202.9 Allowance for loan losses 2.5 2.5 2.7 Nonaccrual loans 0.3 0.3 0.5 Net charge-off/(recovery) rate4 0.03% 0.08% (0.04)% ALL/loans4 1.64 1.67 1.95 $ O/(U) Commercial Banking1 Net income of $598mm, up 1% YoY and down 14% QoQ Revenue of $1.7B, up 4% YoY and down 2% QoQ Record gross investment banking revenue of $753mm, up 68% YoY and 35% QoQ Expense of $709mm, up 3% YoY, largely reflecting higher investment in controls Credit costs of $61mm Net charge-off rate of 0.03%, 9th consecutive quarter of single digit NCO rate or net recoveries Reserves include build related to Oil & Gas portfolio EOP loan balances up 11% YoY and 3% QoQ C&I5 loans up 4% QoQ CRE6 loans up 3% QoQ Average client deposits of $210.0B, up 3% YoY and 1% QoQ $mm Financial performance 1 See note 1 on slide 19 2 Effective January 1, 2015, mortgage warehouse lending clients were transferred from Middle Market Banking to Corporate Client Banking. Prior period revenue, period-end loans, and average loans by client segment were revised to conform with current period presentation 3 Actual numbers for all periods, not over/(under) 4 Loans held-for-sale and loans at fair value were excluded when calculating the loan loss coverage ratio and net charge-off/(recovery) rate. See note 5 on slide 19 5 CB’s Commercial and Industrial (C&I) grouping is internally defined to include certain client segments (Middle Market, which includes Nonprofit Clients and Corporate Client Banking) and does not align with regulatory definitions 6 CB's Commercial Real Estate (CRE) grouping is internally defined to include certain client segments (Real Estate Banking, Commercial Term Lending and Community Development Banking) and does not align with regulatory definitions 10
F I N A N C I A L R E S U L T S 1Q15 4Q14 1Q14 Revenue $3,005 ($195) $205 Global Investment Management 1,533 (207) 115 Global Wealth Management 1,472 12 90 Expense 2,175 (145) 100 Credit costs 4 1 13 Net income $502 ($38) $48 Key drivers/statistics ($B)2 EOP equity $9.0 $9.0 $9.0 ROE 22% 23% 20% Pretax margin 27 27 26 Assets under management (AUM) $1,759 $1,744 $1,648 Client assets 2,405 2,387 2,394 Average loans 103.3 103.3 95.7 EOP loans 104.2 104.3 96.9 Average deposits 158.2 152.0 149.4 $ O/(U) Asset Management1 1 See note 1 on slide 19 2 Actual numbers for all periods, not over/(under) $mm Financial performance Net income of $502mm, up 11% YoY and down 7% QoQ Revenue of $3.0B, up 7% YoY and down 6% QoQ Record AUM of $1.8T, up 7% YoY and 1% QoQ AUM net inflows for the quarter of $15B, driven by net inflows of $16B to long-term products and net outflows of $1B from liquidity products Client assets of $2.4T, up 1% QoQ Expense of $2.2B, up 5% YoY, driven by investments in infrastructure and controls, and down 6% QoQ largely due to seasonal performance-based compensation Average loan balances of $103.3B, up 8% YoY and flat QoQ Average deposit balances of $158.2B, up 6% YoY and 4% QoQ Strong investment performance 79% of mutual fund AUM ranked in the 1st or 2nd quartiles over 5 years 11
F I N A N C I A L R E S U L T S Treasury and CIO Treasury and CIO net loss of $221mm, compared to a net loss of $205mm in 4Q14 Results include $173mm pretax loss associated with the amortization of cash flow hedges, primarily related to the exit of certain non-operational deposits Other Corporate2 Noninterest expense includes legal expense of $305mm (pretax) Includes $177mm net income benefit from tax adjustments 1 See note 1 on slide 19 2 Effective with the first quarter of 2015, the Firm began including the results of Private Equity in the Other Corporate line within the Corporate segment. Prior period amounts have been revised to conform with the current period presentation. The Corporate segment’s balance sheets and results of operations were not impacted by this reporting change $mm Corporate1 Financial performance 1Q15 4Q14 1Q14 Treasury and CIO ($221) ($16) $98 Other Corpor t 2 279 (473) (155) Net income/(loss) $58 ($489) ($57) $ O/(U) 12
F I N A N C I A L R E S U L T S Outlook Consumer & Community Banking Corporate & Investment Bank Asset Management Expect FY2015 pretax margin and ROE to be at the low end of TTC targets Firmwide Commercial Banking Expect expense to be relatively stable as compared to 1Q15 run-rate, as the build-out of the control environment is completed Expect FY2015 core loan growth of 10%+/- Expect FY2015 NCOs to remain low at $4B+ Expect FY2015 adjusted expense1 of $57B+/- Expect Basel III Fully Phased-in CET1 ratio of 11%+/- by year-end 2015 For 2Q15, expect business simplification to generate YoY negative variance in Markets revenue of ~$300mm, or 6%, with an associated ~$300mm reduction in expense Expect Securities Services revenue to be $950mm – $1B in each of the remaining quarters of 2015, depending on seasonality Expect Mortgage Banking noninterest revenue for FY2015 to be down ~$1B YoY on lower servicing revenue as well as lower repurchase benefits Expect Card Services revenue rate in 2015 to remain at the low end of the target range of 12-12.5% Expect Card Services FY2015 NCO rate to be slightly less than 2.5% 1 See note 4 on slide 19 13
Agenda Page F I N A N C I A L R E S U L T S 14 Appendix 14
A P P E N D I X $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 $0 $1,500 $3,000 $4,500 $6,000 $7,500 $9,000 $10,500 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 30+ day delinquencies 30-89 day delinquencies Consumer credit – Delinquency trends1 Note: Home equity and prime mortgages exclude Asset Management, Corporate and government-insured loans 1 Excluding purchased credit-impaired and held-for-sale loans Prime mortgage delinquency trend ($mm) Home equity delinquency trend ($mm) Subprime mortgage delinquency trend ($mm) 30 – 149 day delinquencies 150+ day delinquencies 30 – 149 day delinquencies 150+ day delinquencies 30 – 149 day delinquencies 150+ day delinquencies Credit card delinquency trend ($mm) 15
A P P E N D I X Mortgage Banking and Card Services credit data ($mm) O/(U) 1Q15 4Q14 1Q14 1Q14 Mortgage Banking (NCI) Net charge-offs $104 $113 $177 ($73) NCO rate 0.30% 0.33% 0.55% (25) bps Allowance for loan losses $2,088 $2,188 $2,388 ($300) ALL/annualized NCOs2 502% 484% 337% ALL/nonaccrual loans retained 38% 39% 36% Card Services7 Net charge-offs $789 $797 $888 ($99) NCO rate 2.62% 2.48% 2.93% (31) bps Allowance for loan losses $3,434 $3,439 $3,591 ($157) ALL/annualized NCOs2 109% 108% 101% Mortgage Banking and Card Services – Coverage ratios1 NCOs ($mm) 1 See note 8 on slide 19 2 Net charge-offs annualized (NCOs are multiplied by 4) 3 4Q10 adjusted net charge-offs for Mortgage Banking exclude a one-time $632mm adjustment related to the timing of when the Firm recognizes charge-offs on delinquent loans 4 2Q12 adjusted net charge-offs for Card Services were $1,254mm or 4.03%; excluding the effect of a change in charge-off policy for troubled debt restructurings, 2Q12 reported net charge-offs were $1,345mm or 4.32% 5 3Q12 adjusted net charge-offs for Mortgage Banking exclude the effect of an incremental $825mm of net charge-offs based on regulatory guidance 6 4Q12 adjusted net charge-offs for Mortgage Banking reflects a full quarter of normalized Chapter 7 Bankruptcy discharge activity, which exclude one-time adjustments related to the adoption of Chapter 7 Bankruptcy discharge regulatory guidance 7 4Q14 adjusted net charge-offs for Card Services were $797mm or 2.48% excluding losses from portfolio exits; 4Q14 reported net charge-offs were $858mm or 2.69% 2,081 1,385 1,224 1,169 1,080 952 901 877 808 697 599 534 452 293 206 168 177 112 81 113 104 4,512 3,721 3,133 2,671 2,226 1,810 1,499 1,390 1,386 1,254 1,116 1,097 1,082 1,014 892 891 888 885 798 797 789 $0 $1,000 $2,000 $3,000 $4,000 $5,000 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 Mortgage Banking Card Services 3 4 5 6 7 Reflects seasonality 16
A P P E N D I X 10,296 9,578 9,027 8,317 8,123 7,634 7,241 7,017 6,921 20,780 19,384 17,571 16,264 15,847 15,326 14,889 14,185 14,065 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 0% 100% 200% 300% 400% 500% 1Q15 4Q14 1Q14 Consumer, ex. credit card LLR/Total loans 1.39% 1.50% 1.71% LLR/NPLs 58 58 55 Credit Card LLR/Total loans 2.84% 2.69% 2.96% Wholesale LLR/Total loans 1.13% 1.14% 1.32% LLR/NPLs 540 617 546 Firmwide LLR/Total loans 1.52% 1.55% 1.75% LLR/NPLs (ex. credit card) 106 106 100 LLR/NPLs 156 155 145 Firmwide – Coverage ratios1 $14.1B of loan loss reserves at March 31, 2015, down ~$1.8B from $15.8B in the prior year, reflecting improved portfolio credit quality Nonperforming loan loss coverage ratio (ex. credit card) of 106% 1 See note 5 on slide 19 $mm Comments JPM Credit Summary Loan loss reserve Nonperforming retained loans Loan loss reserve/Total loans Loan loss reserve/NPLs 17
A P P E N D I X IB League Tables League table results – volumes League table results – wallet share 1Q15 FY2014 Rank Share Rank Share Based on volumes 6 : Global Debt, Equity & Equity-related 1 7.2% 1 6.8% U.S. Debt, Equity & Equity-related 1 12.8% 1 11.8% Global Long-term Debt2 1 7.2% 1 6.7% U.S. Long-term Debt 1 11.6% 1 11.3% Global Equity & Equity-related3 2 7.7% 3 7.5% U.S. Equity & Equity-related 1 14.4% 2 11.0% Global M&A Announced4 2 23.2% 2 22.1% U.S. M&A Announced 1 34.6% 2 28.2% Global Loan Syndications 1 12.2% 1 12.3% U.S. Loan Syndications 1 17.8% 1 19.0% 1Q15 FY2014 Rank Share Rank Share Based on fees 1 : Global Debt, Equity & Equity-related 1 8.2% 1 7.6% U.S. Debt, Equity & Equity-related 1 12.9% 1 10.7% Global Long-term Debt2 1 8.4% 1 8.0% U.S. Long-term De t 1 12.4% 1 11.6% Global Equity & Equity-related3 1 7.9% 3 7.1% U.S. Equity & Equity-related 1 13.4% 2 9.6% Global M&A4 2 9.0% 2 8.1% U.S. M&A 2 10.8% 2 9.8% Global Loan Syndications 1 9.6% 1 9.2% U.S. Loan Syndications 1 11.5% 1 13.1% Global IB fees1,5 1 8.6% 1 8.1% Source: Wallet data from Dealogic Media Manager Cortex as of April 1, 2015 & Volume data from Dealogic Analytics as of March 31, 2015 1 Reflects ranking of revenue wallet and market share 2 Long-term debt rankings include investment-grade, high-yield, supranational, sovereigns, agencies, covered bonds, asset-backed securities (“ABS”) and mortgage-backed securities (“MBS”); and exclude money market, short-term debt and U.S. municipal securities 3 Global Equity and equity-related ranking includes rights offerings and Chinese A-Shares 4 M&A and Announced M&A reflects the removal of any withdrawn transactions. U.S. announced M&A volumes represent any U.S. involvement ranking. U.S. M&A revenue wallet represents wallet from client parents based in the U.S. 5 Global Investment Banking revenue wallet rankings exclude money market, short-term debt and shelf deals 6 Rankings reflect transaction volume rank and market share. Global announced M&A is based on transaction value at announcement; because of joint M&A assignments, M&A market share of all participants will add up to more than 100%. All other transaction volume-based rankings are based on proceeds, with full credit to each book manager/equal if joint 18
A P P E N D I X 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, including the overhead ratio, 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 reported U.S. GAAP results and includes certain reclassifications to present total net revenue for the Firm (and each of the business segments) on a fully taxable-equivalent (“FTE”) basis. Accordingly, revenue from investments that receive tax credits and tax exempt securities is presented in the managed results on a basis comparable to taxable securities and investments. This non- GAAP financial measure allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The corresponding income tax impact related to tax-exempt items is recorded within income tax expense. These adjustments have no impact on net income as reported by the Firm as a whole or by the lines of business. 2. Tangible common equity (“TCE”), return on tangible common equity (“ROTCE”) and tangible book value per share (“TBVPS”), are each non-GAAP financial measures. TCE represents the Firm’s common stockholders’ equity (i.e., total stockholders’ equity less preferred stock) less goodwill and identifiable intangible assets (other than MSRs), net of related deferred tax liabilities. ROTCE measures the Firm’s earnings as a percentage of TCE. TBVPS represents the Firm’s tangible common equity divided by period-end common shares. TCE, ROTCE, and TBVPS are meaningful to the Firm, as well as investors and analysts, in assessing the Firm’s use of equity. 3. Common equity Tier 1 (“CET1”) capital, Tier 1 capital, Total capital, risk-weighted assets (“RWA”) and the CET1, Tier 1 capital and total capital ratios and the supplementary leverage ratio (“SLR”) under the Basel III Fully Phased-In rules are each non-GAAP financial measures. These measures are used by management, bank regulators, investors and analysts to assess and monitor the Firm’s capital position. For additional information on these measures, see Regulatory capital on pages 146- 153 of JPMorgan Chase & Co.’s Annual Report on Form 10-K for the year ended December 31, 2014. 4. Adjusted expense and adjusted overhead ratio are each non-GAAP financial measures, and exclude Firmwide legal expense. Management believes this information helps investors understand the effect of these items on reported results and provides an alternate presentation of the Firm’s performance. 5. The ratios of the allowance for loan losses to end-of-period loans retained and allowance for loan losses to nonperforming loans exclude the following: loans accounted for at fair value and loans held-for-sale; purchased credit-impaired (“PCI”) loans; and the allowance for loan losses related to PCI loans. Additionally, net charge-offs and net charge-off rates exclude the impact of PCI loans. 6. Within Consumer & Community Banking, Mortgage Banking and Card, Commerce Solutions & Auto present the year-over-year change in net income excluding loan loss reserve releases (assuming a tax rate of 38%). This non-GAAP financial measure is used by management to facilitate more meaningful comparisons with prior periods. 7. The CIB provides certain non-GAAP financial measures, as such measures are used by management to assess the underlying performance of the business and for comparability with peers: The ratio of the allowance for loan losses to end-of-period loans is calculated excluding the impact of consolidated Firm-administered multi-seller conduits and trade finance loans, to provide a more meaningful assessment of CIB’s allowance coverage ratio. Within Markets & Investor Services revenue, the change in Markets revenue and Fixed Income Markets revenue excludes the decline related to business simplification. 8. Net charge-offs for Mortgage Banking and Card Services may be adjusted for significant items, as indicated. These adjusted charge-offs are non-GAAP financial measures used by management to facilitate comparisons with prior periods. Additional notes on financial measures 9. Core loans include loans considered central to the Firm’s ongoing businesses; core loans exclude runoff portfolios, discontinued portfolios and portfolios the Firm has an intent to exit. Notes 19
A P P E N D I X 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 and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Factors that could cause JPMorgan Chase & Co.’s actual results to differ materially from those described in the forward-looking statements can be found in JPMorgan Chase & Co.’s Annual Report on Form 10-K for the year ended December 31, 2014, which has been filed with the Securities and Exchange Commission and is available on JPMorgan Chase & Co.’s website (http://investor.shareholder.com/jpmorganchase), and on the Securities and Exchange Commission’s website (www.sec.gov). JPMorgan Chase & Co. does not undertake to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements. 20
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