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Last Update: 13-Jan-12 10:21 ET
JP Morgan Down 4% Following This Morning's Earnings Results
Earlier this morning, the JP Morgan (JPM $35.36 -1.49) reported fourth quarter GAAP earnings of $0.90 per share, vs. the GAAP Capital IQ Consensus Estimate of $0.92 and the non-GAAP consensus of $0.90.
Revenues fell 9.6% year/year to $21.47 billion versus the $22.68 billion consensus. Net Income was $3.7 bln compared to consensus of $3.54 bln. Q4 results included the following significant items: $567 million pretax ($0.09 per share after-tax reduction in earnings) loss from debit valuation adjustments in the Investment Bank $528 million pretax ($0.08 per share after-tax reduction in earnings) expense for additional litigation reserves, predominantly for mortgage-related matters, in Corporate $730 million pretax ($0.11 per share after-tax increase in earnings) benefit from reduced loan loss reserves, primarily related to credit card. Full-year 2011 net income was a record $19.0 billion, compared with $17.4 billion for the prior year. Earnings per share were $4.48 for 2011, compared with $3.96 for 2010.
Fortress balance sheet maintained Basel I Tier 1 Common of $123 billion, or 10.0%, and estimated Basel III Tier 1 Common of 7.9%; Credit reserves at $28.3 billion, with loan loss coverage ratio at 3.35% of total loans; Total deposits of $1.1 trillion, up 21% from prior year.
Commenting on financial results, Dimon said: "The Firm's returns on tangible common equity for the fourth quarter of 2011 and the full year 2011 were 11% and 15%, respectively. We believe these returns were reasonable given the environment, although the return for the fourth quarter was modestly disappointing... Firmwide, net charge-offs were $2.9 billion in the fourth quarter, down 43% compared with the prior year, and nonperforming assets declined by 33%. Mortgage net charge-offs and delinquencies modestly improved, but both remained at elevated levels. With respect to our credit card portfolio, the net charge-off rate improved to 3.93%, down from 4.34% in the prior quarter and 7.08% in the prior year. Wholesale credit performance remained stable."
Commenting on the balance sheet, Dimon said "We maintained our fortress balance sheet, ending the year with a strong Basel I Tier 1 Common ratio of 10.0%. Our capital position allowed us to repurchase $9 billion of common stock during 2011, including $950 million during the fourth quarter. We estimate that our Basel III Tier 1 Common1 ratio was approximately 7.9% at the end of the fourth quarter. Our total firmwide credit reserves were $28.3 billion, resulting in a firmwide coverage ratio of 3.35% of total loans1. The Firm's total deposits increased to $1.1 trillion, up 21% compared with the prior year."
JPM provided $252 billion of credit to consumers in 2011.
Revenues fell 9.6% year/year to $21.47 billion versus the $22.68 billion consensus. Net Income was $3.7 bln compared to consensus of $3.54 bln. Q4 results included the following significant items: $567 million pretax ($0.09 per share after-tax reduction in earnings) loss from debit valuation adjustments in the Investment Bank $528 million pretax ($0.08 per share after-tax reduction in earnings) expense for additional litigation reserves, predominantly for mortgage-related matters, in Corporate $730 million pretax ($0.11 per share after-tax increase in earnings) benefit from reduced loan loss reserves, primarily related to credit card. Full-year 2011 net income was a record $19.0 billion, compared with $17.4 billion for the prior year. Earnings per share were $4.48 for 2011, compared with $3.96 for 2010.
Fortress balance sheet maintained Basel I Tier 1 Common of $123 billion, or 10.0%, and estimated Basel III Tier 1 Common of 7.9%; Credit reserves at $28.3 billion, with loan loss coverage ratio at 3.35% of total loans; Total deposits of $1.1 trillion, up 21% from prior year.
Commenting on financial results, Dimon said: "The Firm's returns on tangible common equity for the fourth quarter of 2011 and the full year 2011 were 11% and 15%, respectively. We believe these returns were reasonable given the environment, although the return for the fourth quarter was modestly disappointing... Firmwide, net charge-offs were $2.9 billion in the fourth quarter, down 43% compared with the prior year, and nonperforming assets declined by 33%. Mortgage net charge-offs and delinquencies modestly improved, but both remained at elevated levels. With respect to our credit card portfolio, the net charge-off rate improved to 3.93%, down from 4.34% in the prior quarter and 7.08% in the prior year. Wholesale credit performance remained stable."
Commenting on the balance sheet, Dimon said "We maintained our fortress balance sheet, ending the year with a strong Basel I Tier 1 Common ratio of 10.0%. Our capital position allowed us to repurchase $9 billion of common stock during 2011, including $950 million during the fourth quarter. We estimate that our Basel III Tier 1 Common1 ratio was approximately 7.9% at the end of the fourth quarter. Our total firmwide credit reserves were $28.3 billion, resulting in a firmwide coverage ratio of 3.35% of total loans1. The Firm's total deposits increased to $1.1 trillion, up 21% compared with the prior year."
JPM provided $252 billion of credit to consumers in 2011.
