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JPMorgan Chase Reports Fourth-Quarter 2012 Net Income Of $5.7 Billion, Or $1.39 Per Share, On Revenue1 Of $24.4 Billion

Stocks in this article: JPM

Revenue from Middle Market Banking was $838 million, an increase of $28 million, or 3%, from the prior year. Revenue from Commercial Term Lending was $312 million, an increase of $13 million, or 4%, compared with the prior year. Revenue from Corporate Client Banking was $406 million, an increase of $80 million, or 25%, from the prior year. Revenue from Real Estate Banking was $113 million, a decrease of $2 million, or 2%, from the prior year.

The provision for credit losses was a benefit of $3 million compared with a $40 million expense in the prior year. Net charge-offs were $50 million in the current quarter (0.16% net charge-off rate), compared with net charge-offs of $99 million (0.36% net charge-off rate) in the prior year and net recoveries of $18 million (0.06% net recovery rate) in the prior quarter. The allowance for loan losses to period-end loans retained was 2.06%, down from 2.34% in the prior year and 2.15% in the prior quarter. Nonaccrual loans were $673 million, down by $380 million, or 36%, from the prior year due to repayments and loan sales, and down by $203 million, or 23%, from the prior quarter due to repayments and charge-offs.

Noninterest expense was $599 million, an increase of $20 million, or 3%, from the prior year, reflecting higher headcount-related 2 expense.

Key Metrics and Business Updates: (All comparisons refer to the prior-year quarter except as noted)

  • Return on equity was 29% on $9.5 billion of average allocated capital.
  • Overhead ratio was 34%, unchanged from the prior year.
  • Gross investment banking revenue (which is shared with the Corporate & Investment Bank) was $443 million, up $93 million, or 27%, from the prior year and up $12 million, or 3%, from the prior quarter.
  • Record average loan balances were $126.0 billion, up $16.1 billion, or 15%, from the prior year and $3.9 billion, or 3%, from the prior quarter.
  • Record end-of-period loan balances were $128.2 billion, up $16.2 billion, or 14%, from the prior year and up $4.5 billion, or 4%, from the prior quarter.
  • Average client deposits and other third-party liabilities were $199.3 billion, flat compared with the prior year and up $8.4 billion, or 4%, from the prior quarter.

ASSET MANAGEMENT (AM)

 
Results for AM($ millions)         3Q12   4Q11
  4Q12   3Q12   4Q11   $ O/(U)   O/(U) %   $ O/(U)   O/(U) %
Net Revenue   $2,753   $2,459   $2,284   $294   12%   $469   21%
Provision for Credit Losses   19   14   24   5   36   (5)   (21)
Noninterest Expense   1,943   1,731   1,752   212   12   191   11
Net Income   $483   $443   $302   $40   9%   $181   60%

Discussion of Results:

Net income was $483 million, an increase of $181 million, or 60%, from the prior year. These results reflected higher net revenue, partially offset by higher noninterest expense.

Net revenue was a record $2.8 billion, an increase of $469 million, or 21%, from the prior year. Noninterest revenue was $2.2 billion, up $363 million, or 20%, from the prior year due to higher performance fees, the effect of higher market levels and net client inflows. Net interest income was $552 million, up by $106 million, or 24%, due to higher loan and deposit balances.

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