JP Morgan Chase 2015 Annual Report Download - page 95

JPMorgan Chase & Co./2015 Annual Report 85
CONSUMER & COMMUNITY BANKING
Consumer & Community Banking serves consumers and
businesses through personal service at bank branches
and through ATMs, online, mobile and telephone
banking. CCB is organized into Consumer & Business
Banking (including Consumer Banking/Chase Wealth
Management and Business Banking), Mortgage Banking
(including Mortgage Production, Mortgage Servicing
and Real Estate Portfolios) and Card, Commerce
Solutions & Auto (“Card”). Consumer & Business
Banking offers deposit and investment products and
services to consumers, and lending, deposit, and cash
management and payment solutions to small
businesses. Mortgage Banking includes mortgage
origination and servicing activities, as well as
portfolios consisting of residential mortgages and
home equity loans. Card issues credit cards to
consumers and small businesses, offers payment
processing services to merchants, and provides auto
loans and leases and student loan services.
Selected income statement data
Year ended December 31,
(in millions, except ratios) 2015 2014 2013
Revenue
Lending- and deposit-related fees $ 3,137 $ 3,039 $ 2,983
Asset management,
administration and
commissions 2,172 2,096 2,116
Mortgage fees and related
income 2,511 3,560 5,195
Card income 5,491 5,779 5,785
All other income 2,281 1,463 1,473
Noninterest revenue 15,592 15,937 17,552
Net interest income 28,228 28,431 28,985
Total net revenue 43,820 44,368 46,537
Provision for credit losses 3,059 3,520 335
Noninterest expense
Compensation expense 9,770 10,538 11,686
Noncompensation expense 15,139 15,071 16,156
Total noninterest expense 24,909 25,609 27,842
Income before income tax
expense 15,852 15,239 18,360
Income tax expense 6,063 6,054 7,299
Net income $ 9,789 $ 9,185 $ 11,061
Financial ratios
Return on common equity 18% 18% 23%
Overhead ratio 57 58 60
Note: In the discussion and the tables which follow, CCB presents certain
financial measures which exclude the impact of PCI loans; these are non-GAAP
financial measures. For additional information, see Explanation and
Reconciliation of the Firm’s Use of Non-GAAP Financial Measures.
2015 compared with 2014
Consumer & Community Banking net income was $9.8
billion, an increase of 7% compared with the prior year,
driven by lower noninterest expense and lower provision for
credit losses, largely offset by lower net revenue.
Net revenue was $43.8 billion, a decrease of 1% compared
with the prior year. Net interest income was $28.2 billion,
down 1%, driven by spread compression, predominantly
offset by higher deposit and loan balances, and improved
credit quality including lower reversals of interest and fees
due to lower net charge-offs in Credit Card. Noninterest
revenue was $15.6 billion, down 2%, driven by lower
mortgage fees and related income, predominantly offset by
higher auto lease and card sales volume, and the impact of
non-core portfolio exits in Card in the prior year.
The provision for credit losses was $3.1 billion, a decrease
of 13% from the prior year, reflecting lower net charge-
offs, partially offset by a lower reduction in the allowance
for loan losses. The current-year provision reflected a $1.0
billion reduction in the allowance for loan losses, compared
with a $1.3 billion reduction in the prior year.
Noninterest expense was $24.9 billion, a decrease of 3%
from the prior year, driven by lower Mortgage Banking
expense.
2014 compared with 2013
Consumer & Community Banking net income was $9.2
billion, a decrease of 17% compared with the prior year,
due to higher provision for credit losses and lower net
revenue, partially offset by lower noninterest expense.
Net revenue was $44.4 billion, a decrease of 5% compared
with the prior year. Net interest income was $28.4 billion,
down 2%, driven by spread compression and lower
mortgage warehouse balances, largely offset by higher
deposit balances in Consumer & Business Banking and
higher loan balances in Credit Card. Noninterest revenue
was $16.0 billion, a decrease of 9%, driven by lower
mortgage fees and related income.
The provision for credit losses was $3.5 billion, compared
with $335 million in the prior year. The current-year
provision reflected a $1.3 billion reduction in the allowance
for loan losses and total net charge-offs of $4.8 billion. The
prior-year provision reflected a $5.5 billion reduction in the
allowance for loan losses and total net charge-offs of $5.8
billion.
Noninterest expense was $25.6 billion, a decrease of 8%
from the prior year, driven by lower Mortgage Banking
expense.