<PAGE> 1
_____________________________________________________________________
______
_____________________________________________________________________
______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
______________
Date of Report (Date of earliest event reported) April 13, 1995
J.P. MORGAN & CO. INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 1-5885 13-2625764
(State or other juris- (Commission (IRS Employer
diction of File Number) Identification No.)
incorporation)
60 WALL STREET, NEW YORK, NEW YORK 10260-
0060
(Address of principal executive offices) (Zip
Code)
Registrant's telephone number, including area code (212) 483-2323
_________________________________________________________________
(Former name or former address, if changed since last report)
_____________________________________________________________________
______
_____________________________________________________________________
______
<PAGE> 2
ITEM 5. OTHER EVENTS
On April 13, 1995, the Registrant issued a press release
announcing
its earnings for the three-month period ended March 31, 1995. A copy
of such press release is filed herein as Exhibit 99.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(a) Financial Statements
NONE. The financial statements included in this report
are not
required to be filed as part of this report.
(b) Pro Forma Financial Information
NONE.
(c) Exhibits
99. Copy of press release of J.P. Morgan & Co.
Incorporated
dated April 13, 1995.
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the
registrant has duly caused this report to be signed on its behalf by
the
undersigned hereunto duly authorized.
J.P. MORGAN & CO. INCORPORATED
______________________________
(REGISTRANT)
/s/ PATRICIA A. JONES
____________________________
NAME: PATRICIA A. JONES
TITLE: MANAGING DIRECTOR
DATE: April 13, 1995
<PAGE> 1
April 13, 1995
J.P. MORGAN REPORTS 1995 FIRST QUARTER RESULTS
J.P. Morgan & Co. Incorporated reported net income of $255 million in
the first quarter of 1995, 26% lower than in the first quarter of
1994 and up 32% from the fourth quarter. Earnings per share were
$1.27 in the first quarter compared with $1.69 a year earlier. The
1995 first quarter earnings reflected a previously announced special
charge of $55 million ($33 million after tax), or $0.17 per share,
related primarily to severance.
Douglas A. Warner III, chairman, said: "Results improved from the
fourth quarter, and the flow of business from clients was good.
Trading revenues were up, demonstrating the benefits of
diversification. Our focus for 1995 is clear: expand our business
with clients and build in a disciplined way for the future."
<TABLE>
FIRST QUARTER RESULTS AT A GLANCE
<CAPTION>
Fourth
(in millions of dollars, First quarter quarter
except per share data) 1995 1994 1994
_____________________________________________________________________
_____________
<S> <C> <C> <C>
Revenues $1,388 $1,391 $1,228
Operating expenses (1,002) (852) (963)
Income taxes (131) (194) (72)
___________________________________
_______________________________________________
Net income $ 255 $ 345 $ 193
Net income per share $1.27 $1.69 $0.96
_____________________________________________________________________
_____________
Dividends declared per share $0.75 $0.68 $0.75
_____________________________________________________________________
_____________
</TABLE>
REVENUES were approximately even with the first quarter of 1994
and 13% higher than in the fourth quarter:
-Trading revenue declined 15% from a year earlier but
nearly doubled from the fourth quarter on strong results
in debt instruments, foreign exchange, and equities and
commodities.
-Net interest revenue rose 26% to $500 million from a year
earlier. The rise was mostly attributable to improved
results from asset and liability management.
-Investment management fees, operational service fees, and
corporate finance revenue were in line with levels of a
year ago, while credit-related fees were lower.
OPERATING EXPENSES, excluding the special charge, increased 11%
from a year earlier and were essentially unchanged from the
fourth quarter. The special charge related to an expense
management program initiated during the first quarter to
moderate the growth of expenses.
The remainder of this release contains information on specific areas
of results, a financial summary, and the consolidated financial
statements.
<PAGE> 2
REVENUES
Revenues totaled $1.388 billion in the first quarter of 1995, about
the same as a year earlier.
Net interest revenue rose 26% to $500 million from the first quarter
of 1994, due mostly to improved results from asset and liability
management, principally in the United States, and to an increase in
trading-related net interest revenue. The 1994 quarter included $20
million of past-due interest payments related to Brazilian and
Argentine assets.
Trading revenue declined 15% to $303 million from the first quarter
of 1994. Reported trading revenue does not include net interest
revenue associated with trading activities, which was $61 million in
the first quarter of 1995 and $45 million in the first quarter of
1994.
Combined trading and related net interest revenue declined 9% to $364
million from a year earlier. (For details, see the table of combined
trading and related net interest revenue by principal markets on page
9.) Combined revenue for swaps and other interest rate contracts
declined to $83 million from the strong $275 million in the first
quarter of 1994. While total swap volumes were comparable, revenues
from structured transactions were below the high level of last year's
first quarter, and losses were recorded on positions arising from
some client-related transactions. Combined revenue from debt
instrument trading rose to $162 million from $93 million a year
earlier, mostly from activities in Europe and Asia. Foreign exchange
trading produced combined revenue of $69 million, up from $5 million
a year ago, primarily from increased market-making. Trading in
equities and commodities recorded combined revenue of $50 million, an
increase from $28 million in the year-earlier quarter.
Corporate finance revenue was $114 million in the first quarter, in
line with the year-earlier quarter. Underwriting revenue declined
51% to $22 million from 1994's corresponding quarter. Advisory and
syndication fees rose 28% to $92 million from the 1994 first quarter.
Credit-related fees were $43 million in the first quarter, 23% lower
than in the first quarter of 1994, primarily due to lower securities
lending revenue.
Investment management fees were $130 million in the first quarter, up
slightly from a year ago as a result of an increase in assets under
management, partially offset by lower performance fees.
Operational service fees in the first quarter totaled $140 million,
slightly lower than in the 1994 first quarter, due to a decline in
custody and securities clearing fees.
Net investment securities gains were $9 million in the first quarter,
compared with gains of $91 million in the first quarter of 1994. The
gains in the first quarter of 1994 were mostly attributable to the
sale of European government securities.
Other revenue was $149 million in the first quarter, compared with
$103 million in the 1994 first quarter. The 1995 first quarter
reflected net equity investment securities gains of $163 million,
versus $97 million a year ago. Also included in the first quarter of
1995 was $40 million of costs associated with hedging anticipated
foreign currency revenues and expenses.
<PAGE> 3
OPERATING EXPENSES
Operating expenses were $1.002 billion in the first quarter of 1995,
up 18% from a year earlier. Excluding the $55 million special
charge, operating expenses were up 11% from the first quarter of
1994. Employee compensation and benefit expenses, excluding the
special charge, rose 4% to $571 million, reflecting growth in staff
from a year ago. Technology and communications expenses were higher
than in the year-earlier quarter, primarily due to expenditures on
systems support and development. The weakening in the dollar's value
accounted for 3 percentage points of the increase in operating
expenses from the year-earlier quarter.
The firm initiated an expense management program during the first
quarter. While the emphasis was on lowering overall expense growth,
staff was reduced 4% to 16,443 employees at March 31, 1995, from
17,055 employees at December 31, 1994. Technology and communications
expenses were also down from fourth quarter levels as the firm
focused on high-priority projects. Incentive compensation accruals
were higher than in the fourth quarter.
Income tax expense of $131 million in the first quarter is based on
an effective tax rate of 34%, down from an effective tax rate of 36%
in the first quarter of 1994.
ASSETS
Total assets were $167 billion at March 31, 1995, compared with $155
billion at December 31, 1994. Nonperforming assets decreased by $3
million to $217 million during the first quarter as new
classifications were more than offset by repayments and charge-offs.
No provision for credit losses was deemed necessary in the 1995 first
quarter. The allowance for credit losses was $1.132 billion at March
31, 1995. (For details, see asset quality tables on page 10.)
CAPITAL
At March 31, 1995, J.P. Morgan's estimated Tier 1 and total risk-
based capital ratios were 8.8% and 13.1%, respectively, compared with
Tier 1 and total risk-based capital ratios of 9.6% and 14.2%,
respectively, at December 31, 1994. The March 31, 1995, leverage
ratio was 5.9%, versus 6.5% at December 31, 1994. The decreases in
the first quarter in the risk-based capital and leverage ratios
related primarily to the increase in total assets. J.P. Morgan's
risk-based capital and leverage ratios remain well above the minimum
standards set by the Federal Reserve Board.
At March 31, 1995, stockholders' equity included approximately $449
million of net unrealized appreciation on debt investment and
marketable equity investment securities, net the related deferred tax
liability of $276 million. This compares with $456 million of net
unrealized appreciation at December 31, 1994. The unrealized
appreciation on debt investment securities was $227 million and $154
million at March 31, 1995, and December 31, 1994, respectively. The
unrealized appreciation on marketable equity investment securities
was $498 million and $576 million at March 31, 1995, and December 31,
1994, respectively.
# # #
<PAGE> 4
J.P. Morgan is a leading global financial intermediary that has built
its business, over 150 years, on a commitment to serve the long-term
interests of clients with complex financial needs. Corporations,
governments, financial institutions, private firms, nonprofit
institutions, and a limited number of individuals throughout the
world are our clients. We advise on corporate financial structure;
arrange financing in capital and credit markets; underwrite, trade,
and invest in an array of currencies and the full range of securities
and derivative instruments; serve as investment advisor; and provide
selected trust, agency, and operational services.
Attached are the financial summary, the financial statements, the
combined trading and related net interest revenue table, and the
asset quality tables.
<PAGE> 5
<TABLE>
FINANCIAL SUMMARY
J.P. Morgan & Co. Incorporated
_____________________________________________________________________
_____________
<CAPTION>
Dollars in millions,
except per share data First Quarter Fourth
_______________________ Quarter
____
1995 1994 1994
____________________________________
______
<S> <C> <C> <C>
Net income $255 $345 $193
PER COMMON SHARE (a)
Net income $ 1.27 $ 1.69 $ 0.96
Dividends declared 0.75 0.68 0.75
Book value (b) 47.19 47.14 46.73
_____________________________________________________________________
_____________
Weighted average number of
common and 196,905,106 201,291,982 196,197,704
common equivalent shares
outstanding
_____________________________________________________________________
_____________
Dividends declared on common $141 $131 $140
stock
Dividends declared on preferred 6 5 5
stock
SELECTED RATIOS
Annualized rate of return on
average 11.1 % 14.7 % 8.1 %
common stockholders' equity
(c)
As % of period-end total assets:
Common equity 5.5 5.6 5.9
Total equity 5.8 5.8 6.2
Regulatory capital ratios (d)
Tier 1 risk-based capital 8.8 8.9 9.6
ratio (e)
Total risk-based capital ratio 13.1 13.1 14.2
(e)
Leverage ratio 5.9 6.2 6.5
_____________________________________________________________________
_____________
AVERAGE BALANCES
Total interest-earning assets $135,310 $136,925 $137,281
Total assets 175,694 175,769 170,739
Total interest-bearing 129,279 129,631 132,049
liabilities
Total liabilities 166,128 165,923 161,093
Common stockholders' equity 9,072 9,352 9,152
Total stockholders' equity 9,566 9,846 9,646
Net interest earnings (fully
taxable 529 426 549
basis)
Net yield on interest-earning 1.59 % 1.26 % 1.59 %
assets
_____________________________________________________________________
_____________
Employees at period-end 16,443 15,386 17,055
_____________________________________________________________________
_____________
<FN>
(a) Earnings per share amounts represent both primary and fully
diluted earnings per share.
(b) Excluding the impact of SFAS No. 115, book value per common share
would have been $44.87, $42.14 and $44.39 for the three months ended
March 31, 1995, March 31, 1994, and December 31, 1994 respectively.
(c) Excluding the impact of SFAS No. 115, the rate of return on
average common stockholders' equity would have been 11.7%, 16.9% and
8.6% for the three months ended March 31, 1995, March 31, 1994, and
December 31, 1994 respectively.
(d) In accordance with Federal Reserve Board guidelines, these ratios
exclude the
equity, assets and off-balance-sheet exposures of J.P. Morgan
Securities, Inc. and the effect of SFAS No. 115.
(e) Ratios for March 31, 1995, are estimates. Effective December 31,
1994, the risk-based capital ratios reflect Federal Reserve Board
amendments to recognize risk-reducing benefits of bilateral netting
arrangements.
</TABLE>
<PAGE> 6
<TABLE>
CONSOLIDATED STATEMENT OF INCOME
J.P. Morgan & Co. Incorporated
_____________________________________________________________________
_____________
<CAPTION>
In millions,
except per share data Three months ended
______________________________________________
__________
March March Increase December Increase
31 31 / 31 /
1995 1994 (Decreas 1994 (Decreas
e) e)
______________________________
_________________________
<S> <C> <C> <C> <C> <C>
NET INTEREST REVENUE
Interest revenue $2,470 $1,837 $633 $2,369 $101
Interest expense 1,970 1,440 530 1,851 119
_____________________________________________________________________
_____________
Net interest revenue 500 397 103 518 (18)
NONINTEREST REVENUE
Trading revenue 303 356 (53) 153 150
Corporate finance 114 117 (3) 122 (8)
revenue
Credit-related fees 43 56 (13) 44 (1)
Investment management
fees 130 127 3 130 -
Operational service 140 144 (4) 127 13
fees
Net investment
securities 9 91 (82) 23 (14)
gains
Other revenue 149 103 46 111 38
_____________________________________________________________________
_____________
Total noninterest 888 994 (106) 710 178
revenue
Total revenue 1,388 1,391 (3) 1,228 160
OPERATING EXPENSES
Employee compensation
and 626 548 78 501 125
benefits
Net occupancy 80 64 16 74 6
Technology and
communications 172 129 43 209 (37)
Other expenses 124 111 13 179 (55)
_____________________________________________________________________
_____________
Total operating 1,002 852 150 963 39
expenses
Income before income
taxes 386 539 (153) 265 121
Income taxes 131 194 (63) 72 59
_____________________________________________________________________
_____________
Net income 255 345 (90) 193 62
PER COMMON SHARE (a)
Net income $1.27 $1.69 ($0.42) $0.96 $0.31
Dividends declared 0.75 0.68 0.07 0.75 -
_____________________________________________________________________
_____________
(a) Earnings per share amounts represent both primary and fully
diluted earnings per share.
</TABLE>
<PAGE> 7
<TABLE>
CONSOLIDATED BALANCE SHEET
J.P. Morgan & Co. Incorporated
_____________________________________________________________________
_____________
<CAPTION>
Dollars in millions March December March
31 31 31
1995 1994 1994
____________________________
____
<S> <C> <C> <C>
ASSETS
Cash and due from banks $ $ 2,210 $
1,153 1,760
Interest-earning deposits with banks 1,650 1,362 2,037
Debt investment securities available-for-
sale 21,655 22,657 18,436
carried at fair value
Trading account assets 68,198 57,065 61,875
Securities purchased under agreements to
resell ($27,434 in March 1995, $21,170
in December 1994, and $30,231 in March 27,478 21,350 30,261
1994) and federal funds sold
Securities borrowed 11,073 12,127 10,285
Loans 24,434 22,080 25,388
Less: allowance for credit losses 1,132 1,131 1,143
_____________________________________________________________________
_____________
Net loans 23,302 20,949 24,245
Customers' acceptance liability 658 586 610
Accrued interest and accounts receivable 3,011 5,028 4,411
Premises and equipment 3,395 3,318 2,990
Less: accumulated depreciation 1,361 1,302 1,153
_____________________________________________________________________
_____________
Premises and equipment, net 2,034 2,016 1,837
Other assets 6,865 9,567 12,983
_____________________________________________________________________
_____________
Total assets 167,077 154,917 168,740
_____________________________________________________________________
_____________
LIABILITIES
Noninterest-bearing deposits:
In offices in the U.S. 2,889 3,693 4,288
In offices outside the U.S. 682 767 617
Interest-bearing deposits:
In offices in the U.S. 2,015 1,826 2,218
In offices outside the U.S. 41,238 36,799 36,435
_____________________________________________________________________
_____________
Total deposits 46,824 43,085 43,558
Trading account liabilities 45,210 36,407 36,576
Securities sold under agreements to
repurchase ($32,884 in March 1995,
$30,179 in December 1994, and $47,158 in
March 1994) and federal funds purchased 35,843 35,768 51,522
Commercial paper 2,309 3,507 4,539
Other liabilities for borrowed money 11,334 10,900 8,386
Accounts payable and accrued expenses 3,949 6,231 5,651
Liability on acceptances 658 586 617
Long-term debt not qualifying as risk-
based capital 5,009 3,605 2,563
Other liabilities 3,018 2,063 2,544
_____________________________________________________________________
_____________
154,154 142,152 155,956
Long-term debt qualifying as risk-based 3,283 3,197 2,933
capital
_____________________________________________________________________
_____________
Total liabilities 157,437 145,349 158,889
STOCKHOLDERS' EQUITY
Preferred stock (authorized shares:
10,000,000):
Adjustable rate cumulative preferred
stock 244 244 244
(issued and outstanding: 2,444,300)
Variable cumulative preferred stock
(issued and 250 250 250
outstanding: 250,000)
Common stock, $2.50 par value
(authorized shares:
500,000,000; issued: 200,672,173 in
March 1995, 502 502 501
200,668,373 in December 1994 and
200,279,108 in
March 1994)
Capital surplus 1,448 1,452 1,439
Retained earnings 7,149 7,044 6,595
Net unrealized gains on investment
securities, 449 456 993
net of taxes
Other 368 367 268
_____________________________________________________________________
_____________
10,410 10,315 10,290
Less: treasury stock (13,272,339 shares
in March 1995, 12,966,917 shares in
December 1994 and 8,019,142 shares in 770 747 439
March 1994) at cost
_____________________________________________________________________
_____________
Total stockholders' equity 9,640 9,568 9,851
_____________________________________________________________________
_____________
Total liabilities and stockholders' 167,077 154,917 168,740
equity
_____________________________________________________________________
_____________
</TABLE>
<PAGE> 8
<TABLE>
CONSOLIDATED STATEMENT OF CONDITION
Morgan Guaranty Trust Company of New
York
_____________________________________________________________________
_____________
<CAPTION>
Dollars in millions March 31 December
1995 31
1994
_____________________
____
<S> <C> <C>
ASSETS
Cash and due from banks $ 1,124 $ 2,182
Interest-earning deposits with banks 1,751 1,605
Debt investment securities available-for-
sale 20,370 21,292
carried at fair value
Trading account assets 54,201 45,386
Securities purchased under agreements to
resell 20,303 16,562
and federal funds sold
Loans 21,344 19,397
Less: allowance for credit losses 1,027 1,025
_____________________________________________________________________
_____________
Net loans 20,317 18,372
Customers' acceptance liability 628 556
Accrued interest and accounts receivable 2,968 3,594
Premises and equipment 3,031 2,967
Less: accumulated depreciation 1,197 1,149
_____________________________________________________________________
_____________
Premises and equipment, net 1,834 1,818
Other assets 5,931 7,360
_____________________________________________________________________
_____________
Total assets 129,427 118,727
_____________________________________________________________________
_____________
LIABILITIES
Noninterest-bearing deposits:
In offices in the U.S. 2,847 3,698
In offices outside the U.S. 732 770
Interest-bearing deposits:
In offices in the U.S. 1,726 1,480
In offices outside the U.S. 41,849 38,566
_____________________________________________________________________
_____________
Total deposits 47,154 44,514
Trading account liabilities 39,396 30,730
Securities sold under agreements to
repurchase 19,217 22,099
and federal funds purchased
Other liabilities for borrowed money 6,023 5,320
Accounts payable and accrued expenses 2,464 2,902
Liability on acceptances 628 556
Long-term debt not qualifying as risk-based 2,360 1,968
capital
Other liabilities 3,491 2,080
_____________________________________________________________________
_____________
120,733 110,169
Long-term debt qualifying as risk-based 1,233 1,249
capital
_____________________________________________________________________
_____________
Total liabilities 121,966 111,418
STOCKHOLDER'S EQUITY
Preferred stock, $100 par value
(authorized shares: 2,500,000) - -
Common stock, $25 par value
(authorized and outstanding shares: 250 250
10,000,000)
Surplus 2,670 2,670
Undivided profits 4,398 4,266
Net unrealized gains on investment
securities, net of 147 124
taxes
Foreign currency translation (4) (1)
_____________________________________________________________________
_____________
Total stockholder's equity 7,461 7,309
_____________________________________________________________________
_____________
Total liabilities and stockholder's equity 129,427 118,727
_____________________________________________________________________
_____________
<FN>
Member of the Federal Reserve System and the Federal Deposit
Insurance Corporation.
</TABLE>
<PAGE> 9
<TABLE>
COMBINED TRADING AND RELATED NET INTEREST REVENUE
J.P. Morgan & Co. Incorporated
_____________________________________________________________________
_____________
<CAPTION>
Dollars in millions
Foreign
Swaps and exchange
other spot and Equities
interest rate Debt option and
contractsinstruments contracts commoditiesTotal
___________________________________
_______________________________________________
<S> <C> <C> <C> <C> <C>
FIRST QUARTER 1995
Trading revenue $ 76 $ 94 $ 70 $ 63 $303
Net interest revenue* 7 68 (1) (13)
61
_____________________________________________________________________
_____________
Combined total 83 162 69 50 364
_____________________________________________________________________
_____________
_____________________________________________________________________
_____________
FIRST QUARTER 1994
Trading revenue 266 36 10 44 356
Net interest revenue 9 57 (5) (16) 45
_____________________________________________________________________
_____________
Combined total 275 93 5 28 401
_____________________________________________________________________
_____________
* Estimated
</TABLE>
<PAGE> 10
<TABLE>
ASSET QUALITY
J.P. Morgan & Co. Incorporated
_____________________________________________________________________
_____________
NONPERFORMING ASSETS
<CAPTION>
March 31 December 31 March 31
Dollars in millions 1995 1994 1994
_____________________________________________________________________
_____________
<S> <C> <C> <C>
Nonaccrual loans:
Commercial and industrial $148 $136 $143
Other 65 81 94
____________________________________
______________________________________________
213 217 237
Restructuring countries 3 2 8
_____________________________________________________________________
_____________
Total nonaccrual loans 216 219 245
Other nonperforming assets 1 1 2
_____________________________________________________________________
_____________
Total nonperforming assets 217 220 247
_____________________________________________________________________
_____________
ALLOWANCE FOR CREDIT LOSSES
<CAPTION>
March 31 December 31 March 31
Dollars in millions 1995 1994 1994
_____________________________________________________________________
_____________
<S> <C> <C> <C>
Allowance for credit losses $1,132 $1,131 $1,143
_____________________________________________________________________
_____________
<CAPTION>
First Quarter
_________________________
1995 1994___
_____________________________________________________________________
__________
<S> <C> <C>
Charge-offs:
Commercial and industrial ($6) ($21)
Restructuring countries - -
Other (2) (1)
Recoveries 9 8___
_____________________________________________________________________
__________
</TABLE>
