JP Morgan Chase 2010 Annual Report Download - page 75

JPMorgan Chase & Co./2010 Annual Report
75
and $413 million of other noninterest revenue. Mortgage fees and
related revenue comprised $528 million of net production revenue,
$2.2 billion of servicing operating revenue and $1.1 billion of MSR
risk management revenue. Production revenue, excluding
repurchase losses, was $3.4 billion, an increase of $1.3 billion,
reflecting wider mortgage margins and higher origination volumes.
Total production revenue was reduced by $2.9 billion of repurchase
losses, compared with $1.6 billion in the prior year, and included a
$1.6 billion increase in the repurchase reserve during the current
year, reflecting higher estimated future repurchase demands.
Servicing operating revenue was $2.2 billion, an increase of $528
million, reflecting an improvement in other changes in the MSR
asset fair value driven by lower runoff of the MSR asset due to time
decay, partially offset by lower loan servicing revenue as a result of
lower third-party loans serviced. MSR risk management revenue
was $1.1 billion, a decrease of $492 million.
The provision for credit losses, predominantly related to the student
and auto loan portfolios, was $614 million, compared with
$1.2 billion in the prior year. The current-year provision reflected
lower net charge-offs and a reduction of $135 million to the
allowance for loan losses due to lower estimated losses, compared
with a $307 million addition to the allowance for loan losses in the
prior year. See page 130 of this Annual Report for the net charge-
off amounts and rates.
Noninterest expense was $5.6 billion, up by $1.0 billion, or 23%,
from the prior year, driven by an increase in default-related expense
for the serviced portfolio, including costs associated with
foreclosure affidavit-related suspensions.
2009 compared with 2008
Mortgage Banking, Auto & Other Consumer Lending
reported net income of $1.6 billion, an increase of $357 million,
or 28%, from the prior year.
Net revenue was $8.2 billion, up by $1.3 billion, or 18%, from the
prior year. Mortgage Banking net revenue was $5.2 billion, up by
$701 million. Other Consumer Lending net revenue, comprising
Auto and Student Lending, was $3.0 billion, up by $553 million,
largely as a result of wider loan spreads.
Mortgage Banking net revenue included $973 million of net
interest income, $3.8 billion of mortgage fees and related income,
and $442 million of other noninterest revenue. Mortgage fees and
related income comprised $503 million of net production revenue,
$1.7 billion of servicing operating revenue and $1.6 billion of MSR
risk management revenue. Production revenue, excluding
repurchase losses, was $2.1 billion, an increase of $965 million,
reflecting wider margins on new originations. Total production
revenue was reduced by $1.6 billion of repurchase losses,
compared with repurchase losses of $252 million in the prior year.
Servicing operating revenue was $1.7 billion, an increase of $457
million, reflecting growth in average third-party loans serviced as a
result of the Washington Mutual transaction. MSR risk
management revenue was $1.6 billion, an increase of $111 million,
reflecting the positive impact of a decrease in estimated future
prepayments during 2009.
The provision for credit losses, predominantly related to the student
and auto loan portfolios, was $1.2 billion, compared with $895
million in the prior year. The current- and prior-year provision
reflected an increase in the allowance for loan losses for student
and auto loans. See page 130 of this Annual Report for the net
charge-off amounts and rates.
Noninterest expense was $4.5 billion, up by $588 million, or 15%,
from the prior year, driven by higher servicing and default-related
expense and the impact of the Washington Mutual transaction.
Selected m
e
t
rics
As of or for the year ended
December 31, (in billions, except ratios
and where otherwise noted) 2010 2009 2008
Business metrics
End-of-period loans owned:
Auto
$
48.4
$ 46.0 $
42.6
Mortgage
(a)
14.2 11.9 6.5
Student and other
14.4
15.8 16.3
Total end
-
of
-
period loans owned
$
77.0
$ 73.7 $
65.4
Average loans owned:
Auto
$
47.6
$ 43.6 $
43.8
Mortgage
(a)
13.4 8.8 4.3
Student and other
16.2
16.3 13.8
Total average loans owned
(b)
$ 77.2 $ 68.7 $
61.9
Credit data and
quality statistics
(in millions)
Net charge-offs:
Auto
$
298
$ 627 $
568
Mortgage
41
14 5
Student and other
410
287 64
Total net charge
-
offs
$
749
$ 928 $
637
Net charge-off rate:
Auto
0.63
%
1.44%
1.30
%
Mortgage
0.31
0.17 0.13
Student and other
2.72
1.98 0.57
Total net charge-off rate
(b)
0.99 1.40
1.08
30+ day delinquency rate
(c)(d)
1.69 1.75 1.91
Nonperforming assets (in millions)
(e)
$ 996 $ 912 $ 866
Origination volume:
Mortgage origination volume by
channel:
Retail
$
68.8
$ 53.9 $ 41.1
Wholesale
(f)
1.3 3.6 26.7
Correspondent
(f)
75.3 81.0 58.2
CNT (negotiated transactions)
10.
2
12.2 43.0
Total
mortgage origination
volume $155.6 $ 150.7 $169.0
Student
1.9
4.2
6.9
Auto
23.0
23.7 19.4