JPMorgan Chase Q2 2014 Conference Call Highlights

JPMorgan Chase JPM released its Q2 2014 conference call Tuesday morning, which consisted of sales and guidance for the quarter. Shares traded recently at $58.47, up 3.8 percent

The bank reported EPS for the second quarter to be $1.59, much higher than consensus expectations of $1.29. Revenue passed analyst expectations at $24.45 billion, compared to consensus $23.76 billion.

Highlights From The Call:

• Repurchased $1.5 billion of common stock, nearly $3 billion of capital returned to shareholders in second quarter, common dividend up to $0.40 per share.
• Leverage ratio increased by 30 basis points.
• Core loans up four percent for the quarter, credit card sales up 12 percent in Q2.
• Consumer and Business Banking generated net income of $894 million, up 28 percent year-over-year, and 21 percent for the quarter.
• Average total deposits of $471.6 billion, up nine percent year-over-year and three percent for the quarter.
• Business Banking loans up 46 percent for the year.
• Mortgage banking of $700 million for the quarter with ROE of six percent.
• Reserve releases of $500 million to $1 billion in NCI expected in next year.
• Financial performance of net income of $840 million down 33 percent year-over-year.
• $50 million in student lending reserves.
• Acquired nearly two million new accounts in the quarter for the financials Card, Merchant Services and Auto segment.
• Equity revenue down 10 percent.
• Security services revenue of $1.1 billion.
• Non-compensation expense up 20 percent due to legal expenses incurred.
• Commercial Banking segment net income of $658 million, up six percent year-over-year and 14 percent for the quarter, revenue of $1.7 billion, down two percent year-over-year and up three percent for Q2, expense of $675 million, up four percent for the year, largely reflecting higher investment in controls.
• Asset management net income of $552 million, up 10 percent year-over-year and 25 percent for the quarter, revenue of $3 billion, up six percent for Q2, incurred expenses of $2.1 billion, down one percent for the quarter primarily due to continued investment in controls and growth.
• Average deposits increased by eight percent for the quarter.
• Private Equity segment declined by $1 billion, with net income of $7 million, Private Equity portfolio of $5.8 billion, and $57 billion in gross new investments.
• Corporate non interest expense includes legal expense of $227 million (pretax); includes over $200 million net income benefit from tax adjustments.
• Most significant revenue is the exit of the fiscal commodity business, expecting a decline of $1.2 billion dollars for 2014.

Guidance:

• Mortgage results for the third quarter expected similar to second quarter.
• Servicing revenue expected to decrease in third quarter by $600 million.
• Expecting expense for commercial baking of $700 million for Q3.
• If the Federal Reserve uses repo or purchases securities, will reduce deposits. Management believes repo's will be reduced over time by the federal government.