JP Morgan Chase 2010 Annual Report Download - page 213

JPMorgan Chase & Co./2010 Annual Report 213
Note 11 – Noninterest expense
The following table presents the components of noninterest expense.
Year ended December 31, (in millions)
20
10
2009 2008
Compensation expense
(
a
)
$ 28,124 $ 26,928 $ 22,746
Noncompensation expense:
Occupancy expense
3,681
3,666 3,038
Technology, communications and equipment expense
4,684
4,624 4,315
Professional and outside services
6,767
6,232 6,053
Marketing
2,44
6
1,777 1,913
Other expense
(
b
)(
c
)
(d)
14,558 7,594 3,740
Amortization of intangibles
936
1,050 1,263
Total noncompensation expense
3
3,072
24,943 20,322
Merger costs
—
481 432
Total noninterest expense
$
61,196
$ 52,352 $ 43,500
(a) 2010 includes a payroll tax expense related to the United Kingdom (“U.K.”) Bank Payroll Tax on certain compensation awarded from December 9, 2009, to April 5,
2010, to relevant banking employees.
(b) In 2010, 2009 and 2008, included litigation expense of $7.4 billion, $161 million and a net benefit of $781 million, respectively.
(c) Includes foreclosed property expense of $1.0 billion, $1.4 billion and $213 million in 2010, 2009 and 2008, respectively.
(d) Expense for 2009 included a $675 million FDIC special assessment.
Merger costs
Costs associated with the Bear Stearns merger and the Washington Mutual transaction in 2008 are reflected in the merger costs caption of the
Consolidated Statements of Income. For a further discussion of the Bear Stearns merger and the Washington Mutual transaction, see Note 2
on pages 166–170 of this Annual Report. A summary of merger-related costs is shown in the following table.
2009
2008
Year ended December 31,
(in millions)
Bear
Stearns
Washin
g
ton
Mutual Total
Bear
Stearns
Washin
g
ton
Mutual Total
Expense category
Compensation
$
(9)
$
256
$
247
$
181
$
113
$ 2
9
4
Occupancy
(3)
15
12
42
—
42
Technology and communic
a
tions and other
38
184
222
85
11
96
Total
(a)(b)
$ 26 $ 455 $ 481 $ 308 $ 124 $ 432
(a) With the exception of occupancy- and technology-related write-offs, all of the costs in the table required the expenditure of cash.
(b) There were no merger costs for 2010.
The table below shows changes in the merger reserve balance related to costs associated with the above transactions.
2010
2009 2008
Year ended December 31,
(in millions)
Bear
Stearns
Washin
g
ton
Mutual Total
Bear
Stearns
Washin
g
ton
Mutual Total
Bear
Stearns
Washin
g
ton
Mutual Total
Merger reserve balance, beginning
of period $ 32 $ 57 $ 89 $ 327 $ 441 $ 768 $ — $ — $ —
Recorded as merger costs
(a)
— — — 26 455 481 308 124 432
Recorded as goodwill
—
—
—
(5) — (5) 1,112 435 1,547
Utilization of merger reserve
(32)
(57)
(89)
(316) (839) (1,155) (1,093) (118) (1,211)
Merger reserve ba
l
an
ce, end
of period $ — $ — $ — $ 32 $ 57 $ 89 $ 327 $ 441 $ 768
(a) There were no merger costs for 2010.