JP Morgan Chase & Co. Investment Notes - Redfield, Blonsky & Co.

JP Morgan Chase & Co.
Investment Notes
Please read Disclaimer at bottom of these notes!
“JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.1
trillion and operations in more than 60 countries. The firm is a leader in investment banking,
financial services for consumers, small business and commercial banking, financial transaction
processing, asset management and private equity. A component of the Dow Jones Industrial Average,
JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world’s
most prominent corporate, institutional and government clients under its J.P. Morgan and Chase
brands.” 2010 Annual Report
"We are a buyer in size around tangible book value..." Jamie Dimon CEO JPMorgan Chase 4/13/12
(speaking about JPM buying back stock.)
April 24, 2012 (43.11) Thesis
One of the world’s largest and most respected Financial Services organizations. Jamie Dimon CEO,
respected a great deal, and seems to “tell it like it is.” The Price to Book value and P/E are low relative
to their historic averages. JPM traded at 2-3-times tangible book before the financial crisis. JPM
should benefit when there is an economic, jobs and/or housing recovery. Most ratings agencies and
investment houses rate their financial strength as ‘A’ or better. JPM is focused on growth and risk.
Tier 1 ratio has been consistently over 12. ROE metric has been in excess of 10%. Price to Book is
primary reason for owning.
As reported in earnings supplement March 31, 2012
3/31/12 12/31/11 6/30/11 3/31/11
Total Common $181,928 $175,773 $175,079 $172,798
Equity
Tangible Equity $133,410 $127,107 $124,123 $119,236
Common 3822 3772.7 3910.2 3986.6
Shares end of
Period
Book Value Per $47.60 $46.59 $44.77 $43.34
Share
Tangible Book
Value Per Share
$34.91 $33.69 $31.74 $29.91
1

Tier 1 Capital 12.6 12.3 12.4 12.3
Ratio
Price Per Share $45.98 $33.25 $40.94 $46.10
Close
P/BV 0.97X 0.7136 0.9145 1.064
P/TBV 1.32X 0.987 1.29 1.54
Net Income per $1.31 $0.90 $1.27 $1.28
Share
ROE 12% 8% 12% 13%
I project earnings for 2012 of $4.50 - $5.00 per share. Based on current price, P/E would be in range
of 9.6X – 8.6X. I would not think of selling this below 1.5X Book Value or ~$71.50, or P/E of 15,
which would indicate a price of ~$71.25.
April 27, 2011 (45.08) Thesis
One of the worlds largest and most respected Financial Services organization. Jamie Dimon CEO,
respected a great deal, and seems to “tell it like it is.” Great shareholder letters. Price to Book value
and P/E low per average of past. Should benefit in economic, jobs and housing recovery. Most
agencies and investment houses rate their financial strength as ‘A’ or better. Focused on growth and
risk. Fortress balance sheet. ROE metric at 10%. Price to Book is primary reason for owning. Has
often been priced in the past at 1.5X Book Value.
November 14, 2011 (32.55) Review of VL 11/18/11
1. Projecting F2011 and F2012 earnings of $4.50 to $4.70 respectively. Previous was $4.90
and $5.20, respectively.
2. Dividend of $1.00 is 3.07%.
3. Book Value F2011 of $46.65 intangibles of $15.64, for TBV of $31.01.
4. ROE projected at 10.5% for F2011 and 9.5% for F2012.
5. “Conservative investors may want to stay on sidelines.”
August 24, 2011 (35.29) Review of VL 8/19/11
1. Projecting F2011 and F2012 earnings of $4.90 to $5.20 respectively. Previous was $5.00 and
$5.50, respectively.
2. Dividend of $1.00 is a yield of 2.7%.
3. Book Value F2011 of $46.70 intangibles of $16.57, for TBV of $30.13.
4. ROE projected at 11% for F2011 and 10.5% for F2012.
5. Net of hedging, VL expects worst case Europe scenario to be $3B. This is consistent with what
Jamie Dimon has recently discussed.
June 20, 2011 (40.76) Notes to Morningstar Report 6/8/11 – Nothing to add.
2

May 25, 2011 (42.69) Review of VL 5/20/11
1. Projecting F2011 and F2012 earnings of $5.00 and $5.50, respectively.
2. Dividend of $1.00 is a yield of 2.2%.
3. Book Value F2011 of $47.30, intangibles of $16.51, for TBV of $30.79.
4. ROE projected at 11% for F2011 and F2012
April 27, 2011 (45.08)
Fundamental Analysis
Company Name
Symbol
Date Worked On
Base Year
JP Morgan
Chase
JPM
27-Apr-11
3-Jul-05
Price $45.52
Shares Outstanding 4,014
Market Capitalization $182,722
Cash and CE $104,311
Long Term Debt $269,616
Minority Interests $0
Goodwill $48,856
Intangibles $3,857
Other Intangibles $13,093
Enterprise Value $348,027
Short Term Debt $0
Stockholders Equity $180,598
Depreciation and Amortization $5,000
CapEx $0
3

Revenues $100,000
Total Assets $2,117,605
Net Income $19,600
Dividend $1.00
Interest Expense $12,781
Net Income Before Taxes $24,859
Enterprise Value Per Share $86.70
Price To Enterprise Value 52.50%
Total Debt $269,616
Total Debt / Net Income 1375.59%
Total Debt Per Share $67.17
Tangible Book Value $114,792
Book Value Per Share $44.99
Tangible Book Value Per Share $28.60
Price / Book Value 101.18%
Price / Tangible Book Value 159.18%
Price / Earnings Ratio 9.32
Enterprise Value / Earnings
Ratio 17.76
Earnings Yield 10.73%
Price To Sales Ratio 182.72%
Net Income / Total Assets 0.93%
Total Assets / (Revenues/365) 7729.26
Enterprise Value / Revenues 348.03%
Goodwill / Total Assets 2.31%
Goodwill / Stockholders Equity 27.05%
4

Debt / Equity 149.29%
Average P/E Last 10 Years 0.0
Cash Flow $24,600
Cash Flow Per Share 6.13
Cash Flow Yield 13.46%
Price / Cash Flow 7.43
Revenues Per Share $24.91
Net Income Per Share $4.88
Return on Equity 10.85%
Bond Rating (S&P)
Growth Rate 5.00%
Dividend Yield 2.20%
Dividend / Net Income 20.48%
Dividend / Cash Flow 16.32%
Interest Coverage Ratio 2.94
Insider Activity
Buy-Backs
Dilution
Management Compensation
Neutral to
Positive.
claims will happen
No
Fair for sure
Price to buy more $45.00
Price to sell or consider
reducing $60.00
Action (Buy, Hold or Sell)
Buy
Portfolio Allocation Suggestion 5%
5

Valuation Analysis
Company
JP Morgan Chase
As of Date March 31, 2011
EV Analysis
April 27, 2011
Share Outstanding 4,014.10
Share Price $60.00
Market Capitalization $240,846.00
Less: Cash and Short Term
Investments $0.00
Add: Long Term Debt $0.00
Minority Interest $0.00
Enterprise Value $240,846.00
EV per share $60.00
Stockholders' Equity $180,598.00
Adjustments:
Goodwill ($48,854.00)
Mortgage Servicing Rights ($13,649.00)
Other Intangibles ($4,039.00)
Net Stockholders' Equity $114,056.00
Adjusted Book Value per Share $28.41
Quick Projections 2011 April 27, 2011
Revenue $100,000.00
Net Margin % before tax 28.00%
Net Margin before taxes $28,000.00
Tax Rate 30.00%
Corporate Taxes $8,400.00
6

Net Income after Taxes $19,600.00
Net Margin % 19.60%
Shares Outstanding 4,014.10
eps $4.88
FV of current equity and future earnings
27-Apr-11
Adjusted Stockholder's Equity $114,056.00
Net Income after Taxes $19,600.00
Growth Rate of Net Profit for 10N 5.00%
Growth Rate of Net Profit after 10N through 15N 5.00%
FV of Net Profit in 10N $31,926.33
FV of Net Profit in 15N $40,746.99
FV of tangible book value plus Net Profits for 10N $432,311.90
FV of tangible book value plus Net Profits for years 11 - 15N $728,164.86
Current Enterprise Value $240,846.00
FV of tangible book value plus Net Profits for 10N ($432,311.90)
Years 10
ROI on tangible book value plus Net Profits for 10N 6.02%
FV of tangible book value plus Net Profits for 10N $432,311.90
FV of tangible book value multiplier 1.20
FV of Tangible Book Value using BV multiplier in year 10 $518,774.28
Current Enterprise Value $240,846.00
FV of tangible book value plus Net Profits for years 11 - 15N ($728,164.86)
Years 15
ROI on tangible book value plus Net Profits for 15N 7.65%
FV of tangible book value plus Net Profits for 15N $728,164.86
FV of tangible book value multiplier 1.2
FV of Tangible Book Value using BV multiplier in year 15 $873,797.83
Potential Future EV using BV multiplier above
Current Enterprise Value $240,846.00
FV of Tangible Book Value using BV multiplier in year 10 ($518,774.28)
Years 10
ROI on FV of Tangible Book Value using BV multiplier in year 10 7.98%
7

Current Enterprise Value $240,846.00
FV of Tangible Book Value using BV multiplier in year 15 ($873,797.83)
Years 15
ROI on FV of Tangible Book Value using BV multiplier in year 15 8.97%
Sanity Checks:
P/E in future
FV of Net Profit in 15N $40,747
P/E estimate 13.00
Market Cap on above -$529,711
Years 15
Current Enterprise Value $240,846
ROI in 15N using above 5.39%
Potential Revenue Growth
Current Revenues $100,000
Growth Rate of Revenues for 10N 5.00%
Growth Rate of Revenues after 10N through 15N 5.00%
FV of Revenues in 10N ($162,889)
FV of Revenues in 15N $207,893
FV of Revenues in 15N $207,893
Revenue Multiplier based on Al Meyer Rule of Thumb net margins 4
Possible Market Cap year 15 ($831,571)
Years 15
Current Enterprise Value $240,846
ROI in 15N using above 9%
Intrinsic Value Analysis
Company
JP Morgan
Report Date
27-Apr-11
Price 45.57
Growth Rate 5.00%
Price/Sales 1.82
Price/ Net Cash Flow 7.43
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Price/ Net Book Value 1.59
P/E Ratio Current 9.40
P/E Ratio Year 2 8.14
Current Ratio
#DIV/0!
Quick Ratio
#DIV/0!
LT Debt / Shr. Equity 140.64%
LT Debt / Current Assets #DIV/0!
Return on Shr. Equity 10.85%
PEG Ratio (Current) 1.88
PEG Ratio Year 2 1.63
PEGY Ratio (Current) 1.31
PEGY Ratio Year 2 1.13
Graham Ratio (current) 14.97
Graham Ratio Year 2 12.97
Growth Flow Ratio
( 10 % ) 24.52%
Flow Ratio (s/b < 1.25 ) #DIV/0!
Intrinsic Value (current) 71.78
Intrinsic Value Year 2 82.88
Intrinsic Value Year 3 87.02
Intrinsic Value Year 4 91.38
Intrinsic Value Year 5 95.94
Intrinsic Value / Price
(current) 57.52%
Intrinsic Value / Price Year 2 81.87%
Intrinsic Value / Price Year 3 90.97%
Intrinsic Value / Price Year 4 100.52%
Intrinsic Value / Price Year 5 110.54%
Review of Value Line 2/18/11
1. “Investors reacted favorably after banking giant JPMorgan Chase posted better-than-expected
March-quarter earnings of $1.28 a share. Reported results both exceeded our estimate of $1.00 and
pulled well ahead of earnings of $0.74 in the year-earlier quarter.
A $2 billion reduction in the loan loss reserve in the bank's credit card division contributed $0.29 a
share to earnings in the period, but this was mostly offset by $0.16 negative adjustment for
anticipated higher mortgage servicing costs and $0.10 of expenses related to mortgage foreclosure
delays.
9

For the company, as a whole, revenue declined 9% and expenses were flattish, but the provision for
loan losses fell by $6 billion, reflecting reductions in the retail financial services and credit card
businesses. In the investment banking division, debt underwriting fees were strong. The commercial
banking, treasury, and asset management businesses also turned in decent performances, offsetting a
$200 million loss in retail financial services caused by the aforementioned higher mortgage costs.
For the balance of 2011, management looks for further improvement in the card division's credit costs
and expects card outstanding, which have been declining, to stabilize. Although releases of credit card
loan loss reserves in the next several periods may not be as large as in the March quarter and
mortgage costs may stay high, we are raising our share-net estimate for 2011 by $0.50, to $5.00, and
we are introducing a 2012 projection of $5.80.
With earnings still on the recovery track, JPMorgan shares look attractive for the long haul. And the
recent increase in the annual per-share dividend rate, from $0.20 to $1.00, enhances the stock's total
return potential.” Value Line released this after earnings were released by JPM
2. Company Financial Strength is ‘A.’
3. EPS growth rates of 16.0%, Book Value growth at 8.5%.
4. Book Value $43.04 F2010, and $47.65 estimate for F2011. Intangibles listed of $17.02.
5. Projected 5 year Price range of ~$60 - $95.
Credit Suisse 4/12/11
1. “Reiterate Outperform rating. We continue to recommend JPM shares due to the strong
balance sheet and competitive positioning.”
2. “Valuation. Our $58 price target equates to 1.8x forward tangible book value and 11x 2012
earnings.”
3.
10

Argus 4/15/11
1. “Reiterating HOLD; expense growth concerns us.”
2. “JPM recently increased it dividend by 400% to yield about 2% or still well below the 4% levels
that prevailed pre-crisis. Still, CEO Jamie Dimon said on the 1Q11 conference call that investors
should not expect further dividend increases over the next few quarters.” (Ron’s note - Recall in 2010
Annual Report where Dimon spoke of dividend of $1.00, and if he had it his way, he would reinvest in
the business, and would not pay a dividend. Yet, he states, since investors seem to desire a dividend,
he will pay one.
3. “We do not recommend the purchase of JPM shares at this time, though we believe that the
stock should remain a core holding in diversified portfolios.”
4. “JPM's above-average capital ratios also position the company well for share buybacks.”
5. “J P Morgan Chase is arguably the best managed of the major banks so its lackluster first
quarter results do not bode well for the group.”
6.
7. “Our financial strength rating for JPMorgan Chase is High. In the past, management has
referred to its desire to build a 'fortress balance sheet' to protect the firm from unforeseen shocks.
JPM's Basel 1 Tier 1 common equity ratio was 10% at March 31, 2011 (JPM estimate), up from 6.8% in
11

2008, and easily the highest among the major banks. The ratio is 7.3% under Basel III rules, already
slightly exceeding with the minimum required ratio. “
1. 12 Month price target of $52.
2.
Standard & Poors 3/28/11
3.
12

Zacks 4/14/11
1. “The shares of JPMorgan currently trade at 9.5x our earnings estimate for 2011, a 31% discount
to the industry average of 13.8x. On a price-to-book basis, the shares trade at 1.1x, at par with the
industry average. The valuation on a price-to-book basis looks attractive, given a trailing 12-month
ROE that is 36% higher than the industry average.”
2. “Our six-month target price of $49.00 per share equates to about 10.0x our earnings estimate
for 2011. Combined with a quarterly dividend of $0.25 per share, this target price implies an
expected total return of about 7.0% over that period, which is consistent with our Neutral
recommendation on the shares.”
3.
13

4. “JPMorgan maintained a strong capital position with an estimated Tier 1 common ratio of
10.0% as of March 31, 2011, up from 9.8% as of December 31, 2010, and 9.1% as of March 31, 2010.
Book value per common share was $43.34 as of March 31, 2011, compared with $43.04 as of
December 31, 2010, and $39.38 as of March 31, 2010."
Merrill Lynch 4/14/11
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Morningstar 4/14/11
1. “J.P. Morgan Chase has received--and earned--high praise throughout the credit crisis. While
the company deserves kudos for its accomplishments during the crisis, as well as for the mistakes it
didn't make in the preceding years, we are more excited about its future opportunities. We believe
much of its success is attributable to well-known CEO Jamie Dimon and his tight grip on the risks the
company takes as a whole. Now, with a stronger-than-ever franchise, J.P. Morgan must show that it
15

can execute and meet its return targets. We believe management has laid out a clear path for each of
its divisions and must now prove that its glowing reputation is well deserved.”
2. “We are maintaining our $61 fair value estimate. The Basel III standards confirm our
expectations that banks will hold substantially more capital after the crisis, reducing long-term
returns on equity for shareholders. We currently believe J.P. Morgan can achieve a decent 13% ROE
in the long run. If the company could bump that up to a 14.6% long-run ROE, our fair value would be
$70. We believe consumer credit is stabilizing, but lingering problems and high unemployment will
force charge-offs to remain elevated in 2011, with total charge-offs running around 2.1%. We believe
noninterest income will decline slightly in 2011 as the loss in overdraft fees, debit card interchange
fees, and slightly lower trading income offset improvements in other business lines. However, over
the long run, we expect fee income to grow at a nearly 7% clip--showing the strength of the credit
card, asset management, and investment banking businesses.”
3.
Review of 1Q11 Earnings release
16

Conference Call Notes 4/13/11
1. “A normalized charge-off ratio will eventually be 4.5%, that's through-the-cycle, to be obviously
lower than that or higher than that.” Jamie Dimon CEO discussing Credit Card reserves.
2. “We can only buy back $8 billion of stock according to the guidelines from the Fed. We are
going to buy back, regardless of price, $3 billion which is what we issue -- or approximately what we
issue every year for stock-related compensation. And the other part is discretionary, we're not going
to automatically do it. It will be price-sensitive and if we build up excess capital so be it.” Jamie
Dimon CEO discussing stock buy-backs.
Review of 2010 Annual Report
21

October 27, 2010 (37.52) J
S&P (10/19/10; price $37.71) rates a 5 star strong buy with a $47 price target. Strong 3 rd quarter
revenue and credit results have been overshoadowed by industry-wide issue of possibly erroneous
foreclosures. The $47 price target is based on 1.65 times estimated year-end tangible book (a
premium to peers) and 11.2 times their 2011 estimated eps of $4.21.
October 15, 2010 (37.58) J
Analyst notes on 3Q earnings:
Morgan Stanley (10/14/10; price $39.84) rated as overweight with a price target of $59. They
raised eps estimates by $0.17 for 2010 to $3.85. EPS estimates for 2011 and 2012 are $4.32 and
$5.09, respectively. They think the stock “looks cheap at 6.2x P/E multiple on 2013 normalized
earnings.” Their target price “implies a 9.1x 2013 P/E.” They have a “bull” case price target of $68
and a “bear” case price target of $33. In their bear case, the value is based on tangible book value.
They cite the probability of dividend hikes, improving charge-offs, and consumer loan efficiencies as
potential catalysts for the share price.
Credit Suisse (10/13/10; price $40.42) rates as outperform with a price target of $56. Their price
target is based on 10 times 2012 earnings of $5.50 and 1.6 times tangible book. Revenues in the
quarter were better than they anticipated and view as indicative of stronger prospective earnings
power. They think JPM will return to normalized earnings ahead of peers.
Book value $42.29
Tangible book value $29.54
Shares o/s 3,979
Foreclosure moratorium update: JPM is currently reviewing approx. 115,000 loan files that are in
foreclosure process and will re-file where appropriate. New processes are being put in place to ensure
that the company is in compliance with legal requirements.
27

Morningstar (10/13/10) rates 4 stars with fair value of $61 and says to consider selling at $122.
Noted good results in investment banking and a decline in credit card losses. Total loan losses remain
very high and expenses are being pressured by cyclical items – “including the mortgage foreclosure
scandal currently rocking the bank.” Both of those items are considered temporary. Repurchases of
shares continued in the quarter and the long anticipated dividend increase may occur in the first
quarter.
John notes:
This continues (in my opinion) to be an investment that is based on book value due to the difficulty in
projecting earnings. Prior to the foreclosure moratorium, there was uncertainty with still to be written
financial regulations. Although they beat eps estimates, the beat was due to a reversal of previous loss
reserves. We will need to see if that continues. I think this is still the premier bank and as long as the
system is sound, it will be a leader.
August 18, 2010 (38.12) J
Review of Value Line 8/20/10:
- Release of loan loss reserves added $0.36/share to 2Q eps; the U.K. bonus tax reduced eps by
$0.14.
- Revenues fell in investment banking, cards, and principal transactions
- Retail and card units were profitable after several quarters of losses
- 2010 and 2011 will be challenging
- Fin reg will reduce annual income by $700M - $750M
- Raising 2010 eps to $3.70 and think there is decent recovery potential in shares
John notes – I think this investment is based entirely on its book value. It is virtually impossible to
estimate earnings and the potential impact of financial regulation will not be known in the near
future. We are left hoping that reported book value is correct.
In ‘The Big Short”, one of the real-life characters is Vincent Daniel, and he offers up his experience as
a CPA auditing Salomon Brothers: “there was no way for an accountant assigned to audit a giant Wall
Street firm to figure out whether it was making or losing money. They were giant black boxes, whose
hidden gears were constantly in motion.”
July 21, 2010 (39.08) J
Book value per share is $40.99 at 6/30/09.
July 15, 2010 (40.25) R Some 2Q10 CC Quotes
"We buy back stock when we think it's a great deal for the ongoing shareholders." Jamie Dimon
JPM Conf Call 7/15/10
"If the stock goes down, we could buy back a lot more. If stock goes up, we may not buy back any."
Jamie Dimon JPM Conf Call 7/15/10
"When we start the dividend we want it to be permanent." Jamie Dimon JPM Conf Call 7/15/10 (He
mentioned maybe late this year or early 2011
28

"I'm not sitting here terrified over deflation, to tell you the truth." Jamie Dimon JPM Conf Call
7/15/10
"I think it's significant that we started to buy back some stock, which means we are a value
investor." Jamie Dimon JPM Conf Call 7/15/10
May 24, 2010 (39.17) R Review of 5/21/10 Value Line
1. Retail banking and credit card business remain unprofitable.
2. “Company faces a number of near-term headwinds.” “Nonetheless, due to the positive
March-quarter comparison, and in anticipation of further declines in credit costs, we have
raised our share-net estimates for 2010, from $2.75 to $3.50.
3. VL thinks that actual losses on various products may turn out to be less than originally
anticipated.
4. “Another sizable earnings advance is possible in 2011, supported by a more meaningful
decline in credit costs, etc.”
5. Book Value is $39.88. Yet intangibles are $17.38 per share. Hence, TBV is $22.50 per
share.
6. ROE’s have been in mid single digits. As high as 14.6% in 2003, and between 2.2% (2008)
and 12.5% (2007). Projects 8.5% in 2010, and 10.0% in 2011.
7. Book Value for 2010 projected at $43.50, and $26.12 w/out intangibles. This has been
increased slightly since 2/19/10 mention below.
5/19/10 JP Morgan (JPM) (39.33) J
Current year eps estimate of 3.46, PE 11.4; next year eps estimate of 4.93, PE of 7.9. Dividend is
currently .20 per year but could be raised. This is probably the best run and cheapest financial
institution. Risks include financial regulation legislation and they have the WAMU portfolio with its
crap and 2 nd mortgages.
February 22, 2010 (41.00) (R) Review of 2/19/10 Value Line
1. Strong investment banking offset weakness in consumer business in 4Q09.
2. Housing loans could slash $1B from Net Interest Income.
3. Credit costs expected to stay high. Loan loss reserves expected to stay high. Possible
deterioration in CRE portfolio. Loan loss reserves are strong, but more reserves may be
needed if economic recovery slows down.
4. VL remains cautious on JPM. Lowered eps expectations from $3.00 to $2.75in F2010.
5. Dividend projected at $0.25. It is now $0.20 (.05 per ¼). Either way, less than 1%.
6. Book Value for 2010 projected at $42.65, and $25.30 w/out intangibles.
August 12, 2009 (42.14) (J)
This is probably the best big bank in the country at this point. (I do not consider Government Sachs to
be a bank.) They repaid the $25B TARP funds. The warrants that were issued have not been
repurchased, as Chase has been unwilling to pay the government’s price.
They have also led the pack in mortgage modifications-ranking at the top of government statistics.
Wells Fargo has been the laggard.
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Tier 1 capital of 9.7% at the end of 2Q09. Book value of $37.36/share and tangible book per share of
$23.76.
We have been looking at a multiple of book value when valuing bank stocks. JPM may be close to
reporting normal earnings that can be evaluated. I would not be shocked to see them raise the
dividend later this year. At this price, I’d continue to hold and perhaps trim if someone was
overweight the position. Yet long-term this stock will most likely be the leader of this industry.
Others:
Keefe, Bruyette & Woods (7/17/09; price of $36.13) noted the solid 2Q results. Raised their
estimates and put a target price of $47/share.
Credit Suisse (7/28/09; price 38.13) rated at outperform with a price target of $42 based on a
multiple of 1.6-1.7 times projected year end tangible book. Management still somewhat cautious. 2H
investment will not be as strong as first half. Management is committed to reducing the risk profile
and maintaining returns rather than maximizing the upside.
April 1, 2009 (Ron) (27.50)
Notes to 2008 Shareholder Letter
"With great hesitation, I would like to point out that mistakes also were made by the regulatory
system. That said, I do not blame the regulators for what happened. In each and every
circumstance, the responsibility for a company’s actions rests with us, the CEO and the company’s
management. Just because regulators let you do something, it does not mean you should do it. But
regulators have a responsibility, too. And if we are ever to get this right, it is important to examine
what the regulators could have done better. In many instances, good regulation could have
prevented some of the problems. And had some of these problems not happened, perhaps things
would not have gotten this bad."
1. They were determined to be prepared for downturn. Yet, they claim what transpired was
unprecedented and inconceivable.
2. Financial results marred by increasing credit costs for consumer and mortgage loans, as
well as Investment Bank Write-Downs of > $10B, mostly from leveraged lending and
mortgage exposure.
3. “Fortress balance sheet.”
4. Tier 1 ratio even without $25B TARP would have been 8.9%.
5. “Although we did not anticipate all of the extraordinary events of the year, our strong
balance sheet, general conservatism and constant focus on risk management served us
well and enabled us to weather this terrible environment.”
6. "We also know that the investment banking business, in many ways, will never be the
same. Leverage will be lower, and certain structured financial products will likely cease to
exist. But the fundamental business will remain the same: advising corporations and
investors, raising capital, executing trades, providing research, making markets, and
giving our clients the best ideas and the financing to make those plans a reality."
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7. Current charge-off expectations could range from $1.8B to $2.4B. This is an annualized
loss rate of 3.5% to 5%. Dimon calls that rate “extremely high.” If I recall properly, long
time historic rates are in the 1% range.
8. Believes JPM has corrected underwriting lending mistakes of the past, and are now lending
in a more “old-fashioned” manner. Claims a max of 80% LTV with full documentation.
9. 30% of legacy mortgage loans were originated through the broken and now terminated
broker channel.
10. Expects branch based Retail Banking to generate 30% ROE’s over time. Consumer Lending
expectations at 15% to 20%.
11. Largest credit card issuer in nation, since the WAMU acquisition.
12. Expects CC losses to track unemployment rate. Looking closely at risk management.
Reducing the riskier lines of credit. Increasing reserves to $8B and intensifying credit
collection efforts. Expects to lose money in this division in 2009. The reason the losses are
expected to track the unemployment rate is because of accompanied housing price decline.
Previously losses would be in area of ~78% of unemployment rate.
13. Commercial Banking will have a tough year in 2009. Expects industry problems in
Commercial Construction. Yet claims to have “limited exposure and strong reserves.”
14. Expects Treasury and Securities Services (TSS), to continue to grow and be an important
part of their future. ROE in 2008 was 47%.
15. Asset Management Business has been weak, expects weakness in 2009, but remains patient
and expects 20% ROE over time.
16. “One important and critical point to highlight is that each of our businesses now ranks as one of th
top three players in its respective industry. As ever, our goal is to be the best, not necessarily the
biggest. That said, we know that size matters in businesses where economies of scale – in areas su
as systems, operations, innovation, branding and risk diversification – can be critical to success.
The only reason to get bigger and gain economies of scale is when doing so enables you to do a
better job for your clients; i.e., by giving them more, better and faster at a lower cost. Ultimately,
this is also the only real reason to do a merger – the client gets something better.”
17. Managed Net Revenue By Line of Business
Retail Financial Services $23,520 32%
Card Services $16,474 23%
Investment Bank $12,214 17%
TSS $ 8,134 11%
Asset Management $ 7,584 10%
Commercial Banking $ 4,777 7%
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Bear Stearns Purchase
18. Integration and cost integration of Bear Stearns has been completed. By normal terms,
Dimon considered the price low. Because conditions were not normal, they had to build in
a risk price and a “huge margin of error.” “We were not buying a house, we were buying a
house on fire.” All of Bears equity was used up in the integration. This ran through the
income statement in the 2 nd half of 2008. JPM had hoped for retained equity, but that did
not occur. Yet, Dimon wrote, “"Despite these additional costs, we still believe that Bear
Stearns has added significantly to our franchise. In particular, it completed our franchise
in two areas where we were weak, Prime Brokerage and Commodities, and it enhanced
our broader equity and fixed income businesses. Ultimately, we expect the businesses we
acquired to add approximately $1 billion of annual earnings to the company."
WAMU Purchase
19. JPM was only bank prepared to act on the FDIC takeover. Acquired 2200 branches, 5500
ATM’s and 12.6M checking accounts. Also savings accounts, credit cards and mortgages.
They did not buy any other assets, nor assume any unsecured or subordinated debt. This
will add $2B (or $0.50 per share) of earnings in 2009, and more thereafter.
20. Expected cost savings of $1.5B, but now expects $2.B
21. Unlike Bear deal, they came out with around $4B in “good common equity.” The WAMU
deal occurred on 9/25/08. JPM projected 10% forward decline in home prices. If home
prices go down 20%, all other things being equal, could cost another $5B to $10B. Even if
that occurred, JPM expects WAMU to have been a great deal.
22. I will forever remember this quote:
"In 2008, Bear Stearns collapsed; Lehman Brothers declared bankruptcy; Fannie
Mae and Freddie Mac were placed into government conservatorship; the
government assumed majority ownership of AIG; Merrill Lynch sold itself to Bank
of America; Wells Fargo took over a struggling Wachovia; IndyMac and WaMu
went into receivership by the Federal Deposit Insurance Corporation; Countrywide
and the U.S. mortgage business virtually collapsed; the two remaining major
investment banks, Goldman Sachs and Morgan Stanley, became bank holding
companies; around the globe, French, British, Swiss and German banks were
rescued by their governments; and the world entered the sharpest, most globalized
downturn since the Great Depression.
As for JPMorgan Chase, we had large credit and operational exposures in virtually
every situation mentioned above, affecting nearly every line of business. Our firm’s
management teams, credit officers, risk officers, and legal, finance, audit and
compliance teams worked tirelessly to protect the company. We believe it is a
considerable sign of strength that we could manage through such extraordinary
problems with minimal losses to the company."
23. JPM emphasized they stayed away from sponsoring SIV’s, didn’t write Option Arms,
cut back on sub prime mortgages early in the crisis, avoided structured finance (i.e.
CDO’s), did not unduly leverage capital, maintained high level of liquidity, avoided
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short term funding of illiquid assets and does not rely on wholesale funding. “Simply
put, we still follow the financial commandment: Do not borrow short to invest long.”
24. Did not ask for TARP infusion of $25B, but felt it was the right thing to do. Calls our
leaders “bold and brave.” Had a wonderful quote from Teddy Roosevelt. “It is not the
critic who counts; not the man who points out how the strong man stumbles, or
where the doer of deeds could have done them better. The credit belongs to the man
who is actually in the arena, whose face is marred by dust and sweat and blood; who
strives valiantly; who errs, who comes short again and again, because there is no
effort without error and shortcoming; but who does actually strive to do the deeds;
who knows great enthusiasms, the great devotions; who spends himself in a worthy
cause; who at the best knows in the end the triumph of high achievement, and who at
the worst, if he fails, at least fails while daring greatly, so that his place shall never
be with those cold and timid souls who neither know victory nor defeat.”
25. Thinks regulatory system is poorly organized and archaic.
26. Thinks Basel II allows for too much leverage.
On Derivatives
27. "Derivatives have become an essential and widely used risk management tool."
28. "As such, derivatives are a large business for JPMorgan Chase and for firms around
the world. It is important to note that derivatives in and of themselves did not cause
this crisis. In fact, derivatives have performed fairly well in this crisis environment.
However, it is clear that derivatives, at least in financial reporting, are hard to
understand, lack transparency and did contribute somewhat to the crisis. At
JPMorgan Chase, we believe derivatives, when used properly, play an important
role in managing risk, and we are trying to address the concerns about derivatives."
29. "Some of the concerns about derivatives have to do with the large notional amounts.
But those figures are reference measurements and do not reflect actual counterparty
credit risk. Actual risk is the mark to- market value of the contract after taking into
account netting of risk across all transactions with a counterparty, collateral and
hedging. Actual risk projections also take into account the potential future exposure
coming from market moves."
30. "Our counterparty exposures net of collateral and hedges are $133 billion, and the
company manages those exposures name by name – like a hawk. The figure is
large, but we get paid to take the risks, we reserve and account for them
conservatively, and we manage them in conjunction with all of our other credit
exposures."
31. JPM supports the development of clearing houses for derivatives. They think this will
reduce counterparty and systematic risk.
32. Claims AIG’s fall was due to poor risk management and not use of derivatives. AIG did
not give proper collateral and took concentrated risks through CDS.
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33. "With proper management, systemic risks created by derivatives can be
dramatically reduced without compromising the ability of companies to use them in
managing their exposures."
Fortress Balance Sheet
34. Focused on keeping fortress balance sheet intact. Recognizes obligation to pay
dividends as well. "extraordinary times require extraordinary measures." Discusses
need for abundance of caution in this uncertain environment. Fortress balance sheet
will give ability to seize opportunities.
35. Expects to pay out via dividends 30% – 40% of normalized earnings.
36. Expects to be able to withstand worse than expected economic scenarios, including
Government stress test of 10.4% unemployment and 48% peak to trough house price
declines.
Corporate Responsibility
37. "We believe we have a deep responsibility to you, our shareholders, and to our
creditors, our clients and all our employees. We work incredibly hard to uphold all
our obligations every day."
38. "We employ 225,000 people worldwide in 48 U.S. states and more than 60 countries.
Our 5,000 branches serve customers in 23 states. We provide health care coverage
for 400,000 people. On average, we pay more than $10 billion a year in taxes to the
U.S. government, as well as to state and local jurisdictions."
March 30, 2009 (25.34)
10K review notes.
1. Owns or leases 13.0M SF of commercial and retail office space.
2. Interesting tidbit - In 2008 JPM acquired a 999 year lease term in Canary Wharf.
3. Total Assets / Common Equity increased to 16.1X in F2008, from 10.99X in F2004. This
indicates greater leverage.
4. Total Level 3 assets are $113.4B, which is 6% of total assets.
5. Quick Look at Tangible Book Value. I only reduced by Goodwill and not MSR’s , purchased
credit card assets or Other Intangibles. If you were to include all of the above, TBV would
be $19.95.
Total Stockholders’ equity $166,884
Less:
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Preferred Stock (31,939)
Goodwill (48,087)
Tangible Book Value (TBV) $86,858
Average Diluted Shares 3605
TBV per share 24.09
JPM
3/30/2009
Shares outstanding
3605
(000,000)
Share price 3/30/09 25.78
Market cap 92936.9
Stockholders' equity
(000,000)
166,884
Less: Preferred stock 31,939
Common SE 134,945
Book value per share 37.43
Intangibles (000,000) 63,011
Tangible book
19.95
value/share
From the 2008 10-k
Goodwill 48,027
Other intangible assets:
Mortgage servicing rights 9,403
Purchased credit card relationships 1,649
All other intangibles 3,932
John’s work up with all intangibles listed
6. Tier 1 Capital ratio is 10.9% in F2008, compared to 8.4% in F2007.
Derivatives discussed at analyst day in February:
7. 8% of Total Revenues relate to derivatives. This equates to 33% of Investment Banking
(IB). According to MS, JPM does not have outsized exposure to derivatives and falls in
middle of peer group, and below both DB and GS. Total derivative receivable exposure is
$119B.
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Thesis:
1. Respected management. This includes apparent respect by US and world Governments.
2. Price to Book and Price to Tangible Book at historic lows. Earning power exists
3. Don't know when business will turn around, but future earning power is within reach.
4. A leader in most business sections they are in
Managed Net Revenue By Line of Business
Retail Financial Services $23,520 32%
Card Services $16,474 23%
Investment Bank $12,214 17%
TSS $ 8,134 11%
Asset Management $ 7,584 10%
Commercial Banking $ 4,777 7%
5. Forthcoming management - shareholder letters are must reads
6. Fortress balance sheet
7. shareholder and government friendly
8. Insider buying and ownership. Dimon owns 5M shares.
9. One day business will change.
10. WAMU and BSC could integrate well.
11. Access to capital at a low rate. For example, they floated $5.85b on 4/1/09 at rate that is
currently less than 1.50%.
Review of Morningstar Report 3/24/09
1. Fair Value $41, ***, Stewardship Grade A.
2. Buying assets cheap in turbulent times, and thinks will give shareholders excellent returns
in future. Not immune to economy though. Especially in Real Esate and Credit Cards.
3. In its “Bears Say” section mentions derivative book as an opaque area. Bears claim
unexpected losses could occur at any time. $88T of notional exposure. Impossible to get a
grasp even as much of the exposure is offsetting.
4. Calls it a “Universal Bank.”
5. On 1/30/09 they reduced moat from Wide to Narrow.
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Miscellaneous other Stuff
1. On February 19, 2009 Argus mentioned, “On the conference call announcing the Wamu
transaction last fall, CEO Jamie Dimon acknowledged that Wamu's mortgage portfolio
presents the biggest risk from this acquisition, despite the 18% markdown taken right off
the top. That $31 billion haircut assumed a 25% peak-to-trough decline in home prices
nationwide and that unemployment rises to 7%. JPM presented a 'severe recession'
scenario, which contemplates a 37% total home price decline and 8% unemployment.
Under that scenario, JPM projected an additional $18 billion in losses. JPM's current
market forecast calls for a decline of 31% in home prices, but the 8% unemployment peak of
the severe recession scenario is already looking too optimistic."
2. Each major franchise is in top 3 in its business.
3. Investment Banking should have growth with addition of Bear Stearns. This might be an
under appreciated asset, as losses occurred in 2008.
4. On analyst day in February 2009, JPM expected industry wide CRE losses of 20%. JPM
expects this to occur via 1.5-2% annually, because of portfolio and small size of the
construction and development portfolio ($13B of $110B book). Non Performing loans are
3.6% for C&D vs. 1% or less for rest of portfolio. C&D loans are 10% of loans.
5. All reports I have read indicate light exposure to CRE and construction lending (i.e. Merrill
and MS).
6. Merrill identifies a worst case scenario stress test, that encompasses unemployment at
10.4% and Home Price Declines of 41%. Using these alleged worst case scenarios, Merrill
could see a loss after preferred dividends to US Government. Yet , only a small likelihood of
dilution to raise equity. Claims the worst case scenario is in line with Government case. All
ratios stay within “safe zone.”
7. After Analyst Day in February, Morgan Stanley wrote, “JPM's analyst day is another
example of why you want to own this stock: they answer the tough investor questions,
discuss their mistakes, give analysis that matters even if competitors don't, have a strong
management team and have a good story in a tough environment. That coupled with an
industry facing accelerating nonperforming loan trends over the next several quarters keeps
JPM on the buy list.”
8. Credit Card assumptions are based on 9% unemployment by year end.
9. On 4/1/09 JPM floating $5.85B of paper at 3 year yield + 25bps. on other side of that,
DELL is floating paper at 425BPS. JPM cost of capital is extremely low. Low cost of
capital, will create higher Net Interest Margins (NIM), which banking is based on, yet lost
over last few years. times are changing. Heck, even AAA's are paying 175bps+ if they are
lucky. JPM gets great deal because their bonds are backed by FDIC in this case. JPMorgan
Chase sizes and launch a slight change - $5.850 bln launched at 2.25 bln 3 yr FXD ms+25
and 3.6 bln 3 yr FRN 3ML+25
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February 26, 2009 (21.73) Investor Day Notes.
“Best in class and stay in class.”
January 15, 2009 (25.91) Quick earnings release notes
1. Earnings per release for year was $1.37, Value Line on 11/21/08 (36.35) was expecting
$1.50. These earnings were after extraordinary benefits. Net Loss from Operations was
$2.4B for quarter. NIBT and before Extraordinary for 2008 was $2,773. This compares to
2007 of $22,805.
2. Tier 1 Capital ratio estimated at 10.8. That is healthier than previous 8.9.
3. Stockholders Equity 166,884. Common Shareholders Equity 134,945. Difference is
preferred stock of 31,939. I suspect much of the preferred stock is TARP. Book value
$36.16 . Intangibles include Goodwill $48,027, MSR’s $9,403, Purchased Credit Card
relationships $1,649 and Other Intangibles $$3,932. Tangible Book Value is 71,934.
Market cap at 26 per share is 97,175. Price to book is .72X. Price to Tangible Book value is
1.35X.
4. Interest rate spread has increased to 3.11%.
Egan Jones Update 1/15/09
1. Estimated Share Value $31.49. Debt $713.3B, Cash $54.4B.
2. “Best of the worst.” Domestic banking firms 9excluding processing firms) need US
Government help.
3. Concerns of future hits if economy weakens.
4. JPM might be forced to support weaker institutions.
5. Assigns an ‘A+’ rating, lowered from ‘AA-’ rating. S&P has A+ rating. (Yet, they could in
theory downgrade at same time.) A+ is upper end of medium grade, AA- is bottom tier of
high grade.
December 22, 2008 (29.92)
Reviewing Morgan Stanley report from September 26 , 2008:
They mention that they don’t expect a return to more normalized ROA/ROE until 2011 and they
expect accelerating nonperforming loan growth. Just something to keep in mind.
Last week, S&P cut the ratings on 11 national and international banks. They cited challenging
conditions ahead. Wow, talk about being late to the party.
At this point, I don’t think it is a question of survival as the gov’t has taken a stake in large banks.
Need to focus on economic conditions and how banks are involved. As I think about it, WAMU is a
great fit for its west coast footprint---if the loans aren’t totally worthless.
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12/15/08 report from Merrill Lynch cutting JPM to underperform:”JPM has emerged…as arguably
the best positioned US financial institution with broad deposit base, strong capital and an
increasingly dominant global investment bank. However, the credit loss picture continues to worsen
and there is an increasing possibility of sub 5% ROE…”
October 2008 Conference Call Quotes
1. “Bear Stearns, we still expect the Bear Stearns units -- they've almost been combined at this
point, by not all the systems, but the way we run the businesses. So it's really hard for us to
completely break it out. But we still expect Bear Stearns' businesses to add about $1 billion of
earnings to the Company. That's exactly the same.” “And BSC cost us more money than we
thought. If you asked me the question how much more, probably about $10 billion more. When we
announced the deal, we said that we expected to get $5 billion of equity with it; we basically got
nothing. So -- but it's mostly done.”
2. WAMU a good fit, integration going well. Deposits growing, key staff kept, immediately
accretive.
3. “Credit card losses, we told you. would be about 5% in the third and fourth quarter. We still
expect that 5% plus. We think it's a reasonable expectation that it will start next year at 6% and
end next year at 7% plus. So we don't know that for a fact, but if you build unemployment in
like we're looking in housing, that's a reasonable expectation. If unemployment goes much
higher than 7%, 7.5%, we would expect this number to go up too. Since we don't know what
unemployment is oing, you have to make your own estimates for what that is.”
4. “My own personal opinion is that in an environment that is stressed like this, you have to see
non-performers and charge-offs go up. There will be a lot of surprises coming out of the
woodwork, so we're prepared for that. And I should point out that while our charge-offs are
really low compared to the competition and the non-performers are low compared to the
competition, our loan loss reserves are not low compared to the competition. So we think we
are kind of prepared, but we are expecting this to deteriorate a little bit too.”
5. “Obviously, strong loan-loss reserves are an important part of what we call our fortress balance
sheet. So is strong capital. After the TARP program, we will have Basel I Tier 1 capital of about
10.8%. Before that, it was about 8.9%; so it was strong before that.”
6. “We feel our liquidity position is exceptional. I'm not going to take you through it. But if you
look at loans to deposits in any business, like in the Commercial Bank, it's $70 billion of loan,
$100 billion of deposits. And all of our businesses are very liquid and very well-funded, as is
the rest of the Company.”
7. “And remember, we also have to stand ready to serve clients who pull down revolvers. We have
$300 billion of un-drawn revolvers across all the lines of businesses on the wholesale side. And
we have to be prepared for that too. Obviously, the more stressed the environment gets, the
more we're going to be called on to do that. Then things like buying back the $4 billion of
auction rate obviously uses up some of that too.”
8. “But deposits, more deposits, more accounts, more checking, more credit cards, more loans,
more net assets -- well, assets under management down; we actually had net flows in. This is
the stuff which is going to drive our results for five or 10 years.”
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9. “There is a reason we have a steep yield curve and very high risk premiums, that people are
going to eventually move out that curve. Like I'll give you an example right now. I'm probably
not supposed to say this, but I just took a lot of my cash, which I was getting like 1% on, and
bought JPMorgan Preferreds at 11.5%. I think they're pretty good investments and I'd rather
get 11.5% than 1%.”
Yes, the question is when the government stop Fannie and Freddie from paying dividends on
preferred Yes, we know because lost -- we wrote those to [$0.05 on the dollar] and lost $1
billion too.
The regulators -- and I think what I'm about to say is accurate -- have always had the right to
force companies -- banks to stop paying on their Preferreds if they think that paying dividends
on Preferreds will create an unsound bank. And that's always been true. So I think our ability is
to pay dividends on our Preferred or Common will relate to us maintaining a safe and sound
bank. So I don't think we are going to stop paying dividends on our Preferred. But they've
always kind of had that right.”“
10. “So when Warren Buffett says when the tide goes out, you see who's swimming naked, there
were people swimming naked everywhere -- and they weren't just banks. There were banks.
There were investment banks. There were hedge funds. There were investors. There were
individuals. There were margin loans. And I think that it will get cleaned up.”
11. “Which is one of the reasons the dollar's strong, is it's still a haven. And you know, we're not
running this Company like we have a Great Depression. We don't think so. We just think we'll
have a tough year.”
September 26, 2008 (44.40)
Announcement last night that JPM was taking over the deposits, assets and certain liabilities of
Washington Mutual. WM had been taken over by the FDIC yesterday and a the purchase of the assets
was completed between the FDIC and JPM. WM had put itself up for sale in the last few weeks and
JPM had been looking at the assets and was familiar with WM’s assets prior to the takeover by the
FDIC. JPM will make a payment of $1.9B to the FDIC. JPM plans on issuing $8B of common equity.
September 24, 2008 (40.72)
7/31/08 common shares outstanding – 3,437 M
6/30/08 common stockholders’ equity – 127,176 M (BV 37.00/share and tangible BV of 18.59/share)
Price/Book of 1.10 and Price/Tangible book of 2.19
Quick comparisons to Buffett investments:
Wells Fargo has BV of 14.50/share and tangible BV of 4.53/share. Using 9/24/08 price of 34.29,
Price/Book is 2.36 and Price/Tangible Book is 7.57.
US Bancorp has BV of 12.54/share and tangible book of 6.12/share. Using 9/24/08 price of 34.42,
Price/Book is 2.74 and Price/Tangible book of 5.62.
Debt
Debt is rated AA- by S&P.
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JPM.LZ due 2/1/2011 with a coupon of 6.75% trading 9/24/08 at 101.66 for a yield of 5.975%. On
7/1/08 it traded 103.67 and yielded 5.2%
JPM.JPF due 1/15/2018 with a coupon of 6% trading 9/24/08 at 95.50 for a yield of 6.65%. 7/1/08
yield was about 6.5%.
Given the decline and uncertainty in the financial markets, especially with financial companies, the
fact that the debt is not significantly lower than July 1 is a positive.
June 23, 2008 (37.22)
Began purchasing in beginning of June 2008 with stock price in the $40 area. At that time, stock was
trading at about 1.15 times the 3/3/08 book value. Since then, the financial sector has come under
some pressure due to Lehman results, and concerns about consumer credit as we head into the
second half of the year with a still slowing economy. This morning Goldman Sachs downgraded the
entire financial sector, saying they made a mistake only last month when they said to overweight the
sector. This downgrade led to some serious selling pressure across the board.
JPM is a financial holding company consisting of six bsuiness segments as well as Corporate/Private
equity.
Investment Bank-clients are corporations, financial institutions, governments and institutional
investors.
Retail Financial services-includes regional banking, mortgage banking, auto finance. 3,100 bank
branches (4 th largest nationally), 9,200 atms (3 rd largest nationally). Branches are located in 17 states.
Consumers can also obtain loans through 14,300 auto dealerships and 5,200 schools and universities.
Card services-156 million cards in circulation and more than $150 billion in managed loans. $85
billion worth of spending in 1 st qtr 2008. Chase Paymentech Solutions is processor of MasterCard and
Visa payments. Handles in excess of 5 billion transactions during 1 st qtr.
Commercial banking- serves more than 30,000 clients with annual revenue from $10M to $2B.
Provides comprehensive solutions including lending, treasury, invest banking and asset management.
Treasury & Security Services-global leader in transaction investment and info services. One of
the world’s largest cash management providers and a leading global custodian. It provides cash
management services, trade, wholesale card and liquidity products and services. Some of TS revenue
is include in other segment revenue as it partners with commercial banking, retail and asset
management. Worldwide Security Services holds, values, clears and services securities, cash and
alternative investments for investors and broker-dealers.
Asset Management-global leader in investment and wealth management with assets under
supervision of $1.6 trillion. Clients include institutions, retail investors and high net worth individuals
around the world.
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Disclaimer
If you are a client of ours, and if you have questions regarding J P Morgan Chase & Co.
please call our office. If you are not a client of Redfield, Blonsky & Co. LLC Investment
Management Division and are reading these notes, we urge you to do your own research. We
will not be responsible for any person making an investment decision based on these notes.
These notes are a "by-product" of our research. We are not responsible for the accuracy of
these notes. We are not responsible for errors that may occur in these notes. Please do not
rely on us to monitor or update this or any other report we may issue. In theory, we could
come across some type of data or idea, which causes us to eliminate our long or short
position of J P Morgan Chase & Co. from our portfolios. We will not notify reader’s revisions
to these notes. We are not responsible to keep readers of these notes updated for changes or
material errors or for any reason whatsoever. We manage portfolios for clients, and those
clients are our greatest concern as it relates to investing. Certain clients of Redfield, Blonsky
& Co LLC may not have J P Morgan Chase & Co. in their portfolios. There could be various
reasons for this. Again, if you would like to discuss J P Morgan Chase & Co., please contact
Ronald R. Redfield, CPA, PFS (partner in charge of investment management division).
Information herein is believed to be reliable, but its accuracy and completeness cannot be
guaranteed. Opinions, estimates, and projections constitute our judgment and are subject to
change without notice. This publication is provided to you for information purposes only and
is not intended as an offer or solicitation. Redfield, Blonsky & Co. LLC and Ronald R Redfield,
CPA, PFS, may hold a position or act as an advisor on any investments mentioned in a report
or discussion.
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