JPMorgan Chase & Co. reported third-quarter 2010 net income of $4.4 billion, an increase of 23% compared with $3.6 billion in the third quarter of 2009. Earnings per share were $1.01, compared with $0.82 in the third quarter of 2009.
Jamie Dimon, Chairman and Chief Executive Officer, commented: “Our third-quarter net income of $4.4 billion was the result of the good underlying performance of our businesses. The Investment Bank delivered solid earnings while maintaining its number one ranking in Global Investment Banking Fees. Retail Financial Services reported strong mortgage loan production. Card Services increased sales volume by 7% compared with the prior year, and positive credit trends assisted in delivering improved results. Commercial Banking reported record revenue, while Asset Management had strong net inflows of $38 billion this quarter.”
Dimon added: “We are pleased to report a continued overall decline in credit costs, although our mortgage and credit card portfolios continued to bear very high net charge-offs. Our mortgage delinquency trends remained relatively flat compared with the prior quarter, and we expect mortgage credit losses to remain at these high levels for the next several quarters. If economic conditions worsen, mortgage credit losses could trend higher. With respect to our credit card portfolio, delinquencies and net charge-offs continued to improve, and we reduced loan loss reserves by $1.5 billion this quarter as estimated losses declined. We expect credit card net charge-offs to continue to improve next quarter.”
Commenting on the Firm’s balance sheet, Dimon said: “Our fortress balance sheet continued to strengthen, ending the quarter with a strong Tier 1 Common ratio of 9.5%. We believe that the quality of our balance sheet will position us well for the eventual implementation of new capital standards being developed by bank regulators. Our total firmwide credit reserves declined to $35.0 billion, resulting in a firmwide coverage ratio of 5.1% of total loans1.”
Dimon further remarked: “We are firmly committed to doing all we can to support the ongoing economic recovery. We are providing capital, financing and liquidity to our clients in the U.S. and around the world. So far this year, we have loaned or raised capital for our clients of more than $1.0 trillion, and our small-business originations were up 37%. In addition, we are on track to hire over 10,000 people in the U.S. this year.”
“Regarding regulatory reform, we will work with our regulators as they proceed with the extensive rulemaking required to implement financial reforms. We will continue to devote substantial resources to ensure regulatory reforms are implemented in a way that preserves the value we deliver to our clients.”
Looking forward, Dimon concluded: “The Firm has excellent client franchises with leading positions in their respective markets, a strong balance sheet, and plenty of capital. With these fundamental strengths, we will continue to serve our clients and build our franchises for many years to come while providing good returns to our shareholders.”
In the discussion below of the business segments and of JPMorgan Chase as a Firm, information is presented on a managed basis. For more information about managed basis, as well as other non-GAAP financial measures used by management to evaluate the performance of each line of business, see page 13. The following discussion compares the third quarters of 2010 and 2009 unless otherwise noted.
D.C.