JPMORGAN CHASE & CO Quarterly Report for Q2 Ended Jun 30, 2010

Summary

JPMorgan Chase & Co. reported strong financial results for the second quarter of 2010, with net income of $4.8 billion, or $1.09 per diluted share, a significant increase from $2.7 billion, or $0.28 per diluted share, in the same period last year. This improvement was primarily driven by a substantially lower provision for credit losses, which decreased by 58% year-over-year to $3.4 billion. Total net revenue for the quarter was $25.1 billion, a slight decrease of 2% from the prior year, impacted by lower trading results and investment banking fees. For the first six months of 2010, net income was $8.1 billion, or $1.83 per diluted share, up from $4.9 billion, or $0.68 per diluted share, in the first half of 2009. The company's capital position remains robust, with a Tier 1 common ratio of 9.6%. Despite some pressures in consumer lending businesses, overall credit trends continued to improve, and the firm demonstrated strong liquidity. The company also noted the enactment of the Dodd-Frank Act, which is expected to introduce significant regulatory changes with uncertain impacts. Investors should note the improvement in profitability driven by reduced credit provisions, alongside a solid capital and liquidity position. While total revenue saw a slight year-over-year dip, the underlying performance of various segments, particularly the recovery in Card Services from a net loss to a net income, and the significant improvement in the provision for credit losses, signal a positive trend. The company also resumed share repurchases in the second quarter.

Key Highlights

• 1Net income of $4.8 billion for Q2 2010, a significant increase from $2.7 billion in Q2 2009, driven by lower provision for credit losses.
• 2Diluted EPS of $1.09 for Q2 2010, up from $0.28 in Q2 2009.
• 3Total net revenue of $25.1 billion for Q2 2010, a 2% decrease from $25.6 billion in Q2 2009, impacted by lower trading and investment banking fees.
• 4Provision for credit losses decreased by 58% to $3.4 billion in Q2 2010 compared to $8.0 billion in Q2 2009.
• 5Tier 1 common capital ratio of 9.6% at June 30, 2010, indicating a strong capital position.
• 6Card Services segment returned to profitability with a net income of $343 million in Q2 2010, compared to a net loss of $672 million in Q2 2009.
• 7Resumed share repurchases of common stock in Q2 2010, intending to offset share count increases from employee equity awards.

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