JPMorgan Chase reported first-quarter 2011 net income of $5.6 billion, compared with net income of $3.3 billion in the first quarter of 2010. Earnings per share were $1.28, compared with $0.74 in the first quarter of 2010.

Jamie Dimon, chairman and CEO, commented on the quarter: “The firm’s results reflected a strong quarter across the Investment Bank and solid performance from Card Services, Commercial Banking, Treasury & Securities Services, and Asset Management. These results partially benefited from improved credit trends in our credit card and wholesale businesses.”

Investment bank net income was $2.4 billion, down 4% from the prior-year record, reflecting higher non-interest expense, slightly lower net revenue and a lower benefit from the provision for credit losses. Net income was up 58% from the prior quarter, reflecting higher net revenue and a higher benefit from the provision for credit losses, partially offset by higher non-interest expense.

Net revenue was $8.2 billion, compared with $8.3 billion in the prior year and $6.2 billion in the prior quarter. Investment banking fees were $1.8 billion, up 23% from the prior year and down 3% from the prior quarter; these consisted of record debt underwriting fees of $971 million (up 33% from the prior year and up 6% from the prior quarter), equity underwriting fees of $379 million (down 8% from the prior year and down 22% from the prior quarter), and advisory fees of $429 million (up 41% from the prior year and flat compared with the prior quarter). Fixed Income and Equity Markets revenue was $6.6 billion, compared with $6.9 billion in the prior year and $4.0 billion in the prior quarter, reflecting strong client revenues. Credit Portfolio revenue was a loss of $190 million, primarily reflecting the negative net impact of credit valuation adjustments, largely offset by net interest income and fees on retained loans.

The provision for credit losses was a benefit of $429 million, compared with a benefit of $462 million in the prior year. The current-quarter benefit primarily reflected a reduction in the allowance for loan losses, primarily related to loan sales and net repayments. The ratio of the allowance for loan losses to end-of-period loans retained was 2.52%, compared with 4.91% in the prior year, driven by the improved quality of the loan portfolio. Net charge-offs were $123 million, compared with net charge-offs of $697 million in the prior year.’

Non-interest expense was $5.0 billion, up 4% from the prior year and 19% from the prior quarter. The increase from prior periods was driven by higher compensation expense, partially offset by lower non-compensation expense.

Commercial banking net income was $546 million, an increase of $156 million, or 40%, from the prior year. The increase was driven by a reduction in the provision for credit losses and higher net revenue.

Net revenue was $1.5 billion, up by $100 million, or 7%, from the prior year. Net interest income was $1 billion, up by $98 million, or 11%, driven by growth in liability balances, wider loan spreads, and growth in loan balances, partially offset by spread compression on liability products. Non-interest revenue was $502 million, flat compared with the prior year.

Revenue from Middle Market Banking was $755 million, an increase of $9 million, or 1%, from the prior year. Revenue from Commercial Term Lending was $286 million, an increase of $57 million, or 25%. Revenue from Corporate Client Banking (formerly Mid-Corporate Banking) was $290 million, an increase of $27 million, or 10%. Revenue from Real Estate Banking was $88 million, a decrease of $12 million, or 12%.

The provision for credit losses was $47 million, compared with $214 million in the prior year. Net charge-offs were $31 million (0.13% net charge-off rate) and were largely related to commercial real estate; this compared with net charge-offs of $229 million (0.96% net charge-off rate) in the prior year and $286 million (1.16% net charge-off rate) in the prior quarter. The allowance for loan losses to end-of-period loans retained was 2.59%, down from 3.15% in the prior year and 2.61% in the prior quarter. Non-accrual loans were $2.0 billion, down by $1.0 billion, or 35%, from the prior year, reflecting decreases in commercial real estate, and down $45 million, or 2%, from the prior quarter.

Non-interest expense was $563 million, an increase of $24 million, or 4%, from the prior year, primarily reflecting higher headcount-related expense.
Key Metrics and Business Updates:

Corporate/private equity net income was $722 million, compared with net income of $228 million in the prior year.

Private equity net income was $383 million, compared with $55 million in the prior year. Net revenue was $699 million, an increase of $584 million, driven by gains on sales and net increases in investment valuations. Non-interest expense was $113 million, an increase of $83 million from the prior year.

Corporate reported net income of $339 million, compared with net income of $173 million in the prior year. Net revenue was $813 million, including $102 million of securities gains. Non-interest expense was $449 million, a decrease of $1.9 billion from the prior year; the prior year included significant additions to litigation reserves.

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