JPMorgan Chase & Co (NYSE:JPM) Q4 2014 Earnings Conference Call - Final Transcript

Jan 14, 2015 • 08:30 am ET


JPMorgan Chase & Co (NYSE:JPM) Q4 2014 Earnings Conference Call - Final Transcript


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Good morning, ladies and gentlemen. And welcome to the JPMorgan Chase's Fourth Quarter 2014 Earnings Call. This call is being recorded. Your line will be muted for the duration of the call. We will now go live to the presentation. Please standby.

At this time, I would like to turn the call over to JPMorgan Chase's Chairman and CEO, Jamie Dimon; and Chief Financial Officer, Marianne Lake. Ms. Lake, please go ahead.

Marianne Lake

Thank you, operator. Good morning everyone.

I am going to take you through the earnings presentation, which is available on our website. Please refer to the disclaimer regarding forward-looking statements which is at the back of the presentation.

Starting on Page 1. The Firm reported net income of $4.9 billion and EPS of $1.19, and the return on tangible common equity of 11%, on $23.6 billion of revenue for the quarter. Included in our results with total legal expense of $1.1 billion or approximately $1 billion after tax, in large part an incremental amount for FX.

As we go through the presentation, I'll call out other notable items. For your reference, we've included the EPS impact of those here in the front page. In total, they contributed a net positive $0.12 to EPS. So adjusting for legal expenses as well as these items, give net income of $5.5 billion, and an EPS of $1.33 reflecting solid co performance.

I am going to skip over Page 2, and I am going to go straight to the full year result on Page 3.

The Firm reported record net income of nearly $23 billion and record EPS of $5.29, and return on tangible common equity of 13% on nearly $98 billion of revenue. Excluding legal expense which remains elevated, net income for the year were $24 billion and return on tangible common equity 14%. You can see on the page of the bottom that adjusted expense was $58.4 billion in line with guidance, and down $650 million from the prior year despite the impact of incremental cost of control, as well as continuing to invest in our businesses.

A final couple of points for the year. Core loan growth was strong at 8% year-on-year, and net capital distribution for the year was approximately $10 billion including record dividend of $6 billion.

Turning to Page 4.

The Firm's fully phased in as on CET1 ratio was 10.1% flat to last quarter. With earnings and portfolio run off offset by capital distribution, and an increase in risk-weighted asset, predominantly driven by high account party credit risk. In terms of 2015 outlook, we expect to add 50 basis points or more to this ratio.

Similarly, the Firm's fully phased in standardized ratio not on the page also remained flat at 10.5%. The Firm's SLR was 5.6% and the bank's SLR improved to 5.9%. And given the recent FSB proposal which added our best estimate of TLAC at approximately 15% excluding Basel which will be refined as the rules are finalized.

Moving on to Page5.