1 q09 financial-supplement

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1 q09 financial-supplement

  1. 1. EARNINGS RELEASE FINANCIAL SUPPLEMENT FIRST QUARTER 2009
  2. 2. JPMORGAN CHASE & CO. TABLE OF CONTENTS Page Consolidated Results Consolidated Financial Highlights Statements of Income Consolidated Balance Sheets Condensed Average Balance Sheets and Annualized Yields Reconciliation from Reported to Managed Summary 2 3 4 5 6 Business Detail Line of Business Financial Highlights - Managed Basis Investment Bank Retail Financial Services Card Services - Managed Basis Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity 7 8 11 17 20 22 24 27 Credit-Related Information 29 Market Risk-Related Information 34 Supplemental Detail Capital, Intangible Assets and Deposits Per Share-Related Information 35 36 Glossary of Terms 37 Page 1
  3. 3. JPMORGAN CHASE & CO. CONSOLIDATED FINANCIAL HIGHLIGHTS (in millions, except per share, ratio and headcount data) QUARTERLY TRENDS 1Q09 Change 1Q09 SELECTED INCOME STATEMENT DATA: Reported Basis Total net revenue Total noninterest expense Pretax pre-provision profit Provision for credit losses Income (loss) before extraordinary gain Extraordinary gain NET INCOME Managed Basis (a) Total net revenue Total noninterest expense Pretax pre-provision profit Provision for credit losses Income (loss) before extraordinary gain Extraordinary gain NET INCOME 4Q08 3Q08 2Q08 1Q08 4Q08 1Q08 $ 25,025 13,373 11,652 8,596 2,141 2,141 $ 17,226 11,255 5,971 7,313 (623) 1,325 702 $ 14,737 11,137 3,600 5,787 (54) 581 527 $ 18,399 12,177 6,222 3,455 2,003 2,003 $ 16,890 8,931 7,959 4,424 2,373 2,373 45 % 19 95 18 NM NM 205 48 % 50 46 94 (10) (10) $ 26,922 13,373 13,549 10,060 2,141 2,141 $ 19,108 11,255 7,853 8,541 (623) 1,325 702 $ 16,088 11,137 4,951 6,660 (54) 581 527 $ 19,678 12,177 7,501 4,285 2,003 2,003 $ 17,898 8,931 8,967 5,105 2,373 2,373 41 19 73 18 NM NM 205 50 50 51 97 (10) (10) PER COMMON SHARE: Basic Earnings (b) Income (loss) before extraordinary gain Net income 0.40 0.40 (0.29) 0.06 (0.08) 0.09 0.54 0.54 0.67 0.67 NM NM (40) (40) Diluted Earnings (b) Income (loss) before extraordinary gain Net income 0.40 0.40 (0.29) 0.06 (0.08) 0.09 0.53 0.53 0.67 0.67 NM NM (40) (40) Cash dividends declared Book value Closing share price Market capitalization 0.05 36.78 26.58 99,881 0.38 36.15 31.53 117,695 0.38 36.95 46.70 174,048 0.38 37.02 34.31 117,881 0.38 36.94 42.95 146,066 (87) 2 (16) (15) (87) (38) (32) COMMON SHARES OUTSTANDING: Weighted-average diluted shares outstanding (b) Common shares outstanding at period-end 3,758.7 3,757.7 3,737.5 3,732.8 3,444.6 3,726.9 3,453.1 3,435.7 3,423.3 3,400.8 1 1 10 10 1,642,862 231,297 305,759 761,626 125,627 76,285 (4) (8) (3) (10) 2 4 27 5 52 19 10 14 182,166 (2) 21 FINANCIAL RATIOS: (c) Income (loss) before extraordinary gain: Return on common equity ("ROE") Return on equity-goodwill ("ROE-GW") (d) Return on assets ("ROA") Net income: ROE ROE-GW (d) ROA 5 % 7 0.42 6 10 0.48 % 8 12 0.61 $ 1 1 0.13 1 2 0.12 6 10 0.48 10.9 14.8 8.9 12.6 9.2 13.4 8.3 12.5 2,079,188 242,284 465,959 906,969 138,201 87,232 $ 219,569 $ $ % 8 12 0.61 11.3 (f) 15.1 (f) Headcount LINE OF BUSINESS NET INCOME (LOSS) Investment Bank Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity Net income (1) % (1) (0.01) 5 7 0.42 CAPITAL RATIOS: Tier 1 capital ratio Total capital ratio SELECTED BALANCE SHEET DATA (Period-end) Total assets Wholesale loans Consumer loans Deposits Common stockholders' equity Tangible common equity (e) (3) % (5) (0.11) 1,606 474 (547) 338 308 224 (262) 2,141 2,175,052 262,044 482,854 1,009,277 134,945 84,054 $ 224,961 $ $ (2,364) 624 (371) 480 533 255 1,545 702 2,251,469 288,445 472,936 969,783 137,691 88,467 $ 228,452 $ $ 882 64 292 312 406 351 (1,780) 527 1,775,670 229,359 308,670 722,905 127,176 77,903 $ 195,594 $ $ 394 503 250 355 425 395 (319) 2,003 $ $ (87) (311) 609 292 403 356 1,111 2,373 NM (24) (47) (30) (42) (12) NM 205 NM NM NM 16 (24) (37) NM (10) (a) (b) (c) (d) For further discussion of managed basis, see Reconciliation from reported to managed summary on page 6. Effective January 1, 2009, the Firm adopted FSP EITF 03-6-1. Accordingly, prior period numbers have been revised as required. For further discussion of this FSP, see Per share-related information on page 36. Quarterly ratios are based upon annualized amounts. Net income applicable to common stock divided by total average common equity (net of goodwill). The Firm uses return on equity less goodwill, a non-GAAP financial measure, to evaluate the operating performance of the Firm. The Firm also utilizes this measure to facilitate comparisons to competitors. (e) Tangible common equity ("TCE") represents common stockholders' equity (i.e., total stockholders' equity less preferred stock) less identifiable intangible assets (other than MSRs) and goodwill, net of related deferred tax liabilities. For further discussion of TCE, see Capital, intangible assets and deposits on page 35. (f) Estimated. Page 2
  4. 4. JPMORGAN CHASE & CO. STATEMENTS OF INCOME (in millions, except per share and ratio data) QUARTERLY TRENDS 1Q09 Change 1Q09 REVENUE Investment banking fees Principal transactions Lending & deposit-related fees Asset management, administration and commissions Securities gains Mortgage fees and related income Credit card income Other income Noninterest revenue $ Interest income Interest expense Net interest income 4Q08 1,386 2,001 1,688 2,897 198 1,601 1,837 50 11,658 $ 3Q08 1,382 (7,885) 1,776 3,234 456 1,789 2,049 593 3,394 $ 2Q08 1,316 (2,763) 1,168 3,485 424 457 1,771 (115) 5,743 $ 1Q08 1,612 752 1,105 3,628 647 696 1,803 (138) 10,105 $ 4Q08 1,216 (803) 1,039 3,596 33 525 1,796 1,829 9,231 1Q08 - % NM (5) (10) (57) (11) (10) (92) 243 14 % NM 62 (19) 500 205 2 (97) 26 17,926 4,559 13,367 21,631 7,799 13,832 17,326 8,332 8,994 16,529 8,235 8,294 17,532 9,873 7,659 (17) (42) (3) 2 (54) 75 TOTAL NET REVENUE 25,025 17,226 14,737 18,399 16,890 45 48 Provision for credit losses 8,596 7,313 5,787 3,455 4,424 18 94 7,588 885 1,146 1,515 384 1,375 275 205 13,373 5,024 955 1,207 1,819 501 1,242 326 181 11,255 5,858 766 1,112 1,451 453 1,096 305 96 11,137 6,913 669 1,028 1,450 413 1,233 316 155 12,177 4,951 648 968 1,333 546 169 316 8,931 51 (7) (5) (17) (23) 11 (16) 13 19 53 37 18 14 (30) NM (13) NM 50 3,056 915 2,141 2,141 $ (1,342) (719) (623) 1,325 702 $ (2,187) (2,133) (54) 581 527 $ 2,767 764 2,003 2,003 $ 3,535 1,162 2,373 2,373 NM NM NM NM 205 (14) (21) (10) (10) 0.40 0.40 $ (0.29) 0.35 0.06 $ (0.08) 0.17 0.09 $ 0.53 0.53 $ 0.67 0.67 NM NM NM (40) (40) 2,373 2,373 NM 13 NM (10) NM (4) 0.67 0.67 NM NM (40) NM (36) NONINTEREST EXPENSE Compensation expense Occupancy expense Technology, communications and equipment expense Professional & outside services Marketing Other expense Amortization of intangibles Merger costs TOTAL NONINTEREST EXPENSE Income (loss) before income tax expense and extraordinary gain Income tax expense (benefit) (a) Income (loss) before extraordinary gain Extraordinary gain (b) NET INCOME $ DILUTED EARNINGS PER SHARE Income (loss) before extraordinary gain (c) Extraordinary gain NET INCOME (c) $ $ FINANCIAL RATIOS Income (loss) before extraordinary gain: ROE ROE-GW ROA Net income: ROE ROE-GW ROA Effective income tax rate (a) Overhead ratio EXCLUDING IMPACT OF MERGER COSTS (d) Income (loss) before extraordinary gain Merger costs (after-tax) Income (loss) before extraordinary gain excluding merger costs Diluted Per Share: Income (loss) before extraordinary gain (c) Merger costs (after-tax) Income (loss) before extraordinary gain excluding merger costs (c) 5 7 0.42 $ % (3) % (5) (0.11) 5 7 0.42 30 53 $ $ $ $ 2,141 127 2,268 0.40 0.03 0.43 $ (1) % (1) (0.01) 1 1 0.13 54 65 $ $ $ $ (623) 112 (511) (0.29) 0.03 (0.26) $ 6 10 0.48 1 2 0.12 98 76 $ $ $ $ $ % 8 12 0.61 6 10 0.48 28 66 (54) 60 6 $ (0.08) 0.02 (0.06) $ $ $ % 8 12 0.61 33 53 2,003 96 2,099 $ 0.53 0.03 0.56 $ $ $ (a) The income tax benefit in the third quarter of 2008 includes the realization of a benefit from the release of deferred tax liabilities associated with the undistributed earnings of certain non-U.S. subsidiaries that were deemed to be reinvested indefinitely. (b) On September 25, 2008, JPMorgan Chase acquired the banking operations of Washington Mutual Bank from the Federal Deposit Insurance Corporation for $1.9 billion. The fair value of the net assets acquired exceeded the purchase price which resulted in negative goodwill. In accordance with SFAS 141, noncurrent nonfinancial assets that are not held-for-sale were written down against that negative goodwill. The negative goodwill remaining of $581 million after writing down nonfinancial assets was recognized as an extraordinary gain in the third quarter of 2008. As a result of refining the purchase price allocation during the fourth quarter of 2008, an additional gain of $1.3 billion was recognized. (c) Effective January 1, 2009, the Firm adopted FSP EITF 03-6-1. Accordingly, prior period numbers have been revised as required. For further discussion of this FSP, see Per share-related information on page 36. (d) Net income excluding merger costs, a non-GAAP financial measure, is used by the Firm to facilitate comparison of results against the Firm's ongoing operations and with other companies' U.S. GAAP financial statements. Page 3
  5. 5. JPMORGAN CHASE & CO. CONSOLIDATED BALANCE SHEETS (in millions) Mar 31 2009 ASSETS Cash and due from banks Deposits with banks Federal funds sold and securities purchased under resale agreements Securities borrowed Trading assets: Debt and equity instruments Derivative receivables Securities Loans (net of allowance for loan losses) Accrued interest and accounts receivable Premises and equipment Goodwill Other intangible assets: Mortgage servicing rights Purchased credit card relationships All other intangibles Other assets (a) TOTAL ASSETS LIABILITIES Deposits Federal funds purchased and securities loaned or sold under repurchase agreements Commercial paper Other borrowed funds (a) Trading liabilities: Debt and equity instruments Derivative payables Accounts payable and other liabilities (including the allowance for lending-related commitments) Beneficial interests issued by consolidated VIEs Long-term debt Junior subordinated deferrable interest debentures held by trusts that issued guaranteed capital debt securities TOTAL LIABILITIES STOCKHOLDERS' EQUITY Preferred stock Common stock Capital surplus Retained earnings Accumulated other comprehensive income (loss) Shares held in RSU trust Treasury stock, at cost TOTAL STOCKHOLDERS' EQUITY TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 26,681 89,865 157,237 127,928 Dec 31 2008 $ 26,895 138,139 203,115 124,000 Sep 30 2008 $ 54,350 34,372 233,668 152,050 Jun 30 2008 $ 32,255 17,150 176,287 142,854 Mar 31 2008 $ Mar 31, 2009 Change Dec 31 Mar 31 2008 2008 46,888 12,414 203,176 81,014 (1) % (35) (23) 3 (43) % NM (23) 58 298,453 131,247 333,861 680,862 52,168 10,336 48,201 347,357 162,626 205,943 721,734 60,987 10,045 48,027 401,609 118,648 150,779 742,329 104,232 9,962 46,121 409,608 122,389 119,173 524,783 64,294 11,843 45,993 386,170 99,110 101,647 525,310 50,989 9,457 45,695 (14) (19) 62 (6) (14) 3 - (23) 32 228 30 2 9 5 $ 10,634 1,528 3,821 106,366 2,079,188 $ 9,403 1,649 3,932 111,200 2,175,052 $ 17,048 1,827 3,653 180,821 2,251,469 $ 11,617 1,984 3,675 91,765 1,775,670 $ 8,419 2,140 3,815 66,618 1,642,862 13 (7) (3) (4) (4) 26 (29) 60 27 $ 906,969 $ 1,009,277 $ 969,783 $ 722,905 $ 761,626 (10) 19 279,837 33,085 112,257 224,075 54,480 167,827 194,724 50,151 22,594 192,633 50,602 28,430 45 (13) (15) 45 (35) 295 53,786 86,020 45,274 121,604 76,213 85,816 87,841 95,749 78,982 78,983 19 (29) (32) 9 165,521 9,674 243,569 187,978 10,561 252,094 260,563 11,437 238,034 171,004 20,071 260,192 106,088 14,524 189,995 (12) (8) (3) 56 (33) 28 18,276 1,908,994 $ 192,546 37,845 132,400 18,589 2,008,168 17,398 2,105,626 17,263 1,642,494 15,372 1,517,235 (2) (5) 19 26 31,993 3,942 91,469 55,487 (4,490) (86) (8,121) 170,194 2,079,188 31,939 3,942 92,143 54,013 (5,687) (217) (9,249) 166,884 2,175,052 8,152 3,942 90,535 55,217 (2,227) (267) (9,509) 145,843 2,251,469 6,000 3,658 78,870 56,313 (1,566) (269) (9,830) 133,176 1,775,670 3,658 78,072 55,762 (512) (11,353) 125,627 1,642,862 (1) 3 21 60 12 2 (4) NM 8 17 NM NM 28 35 27 $ $ $ $ (a) On September 19, 2008, the Federal Reserve established a special lending facility, the AML Facility, to provide liquidity to eligible money market mutual funds. The Firm participated in the AML Facility and had ABCP investments totaling $6.0 billion, $11.2 billion, and $61.3 billion at March 31, 2009, December 31, 2008, and September 30, 2008, respectively. These ABCP investments were recorded in other assets with the corresponding nonrecourse liability to the Federal Reserve Bank of Boston for the same amounts recorded in other borrowed funds. Page 4
  6. 6. JPMORGAN CHASE & CO. CONDENSED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS (in millions, except rates) QUARTERLY TRENDS 1Q09 Change 1Q09 AVERAGE BALANCES ASSETS Deposits with banks Federal funds sold and securities purchased under resale agreements Securities borrowed Trading assets - debt instruments Securities Loans Other assets (a) Total interest-earning assets Trading assets - equity instruments Goodwill Other intangible assets: Mortgage servicing rights All other intangible assets All other noninterest-earning assets TOTAL ASSETS LIABILITIES Interest-bearing deposits Federal funds purchased and securities loaned or sold under repurchase agreements Commercial paper Other borrowings and liabilities (b) Beneficial interests issued by consolidated VIEs Long-term debt Total interest-bearing liabilities Noninterest-bearing liabilities TOTAL LIABILITIES Preferred stock Common stockholders' equity TOTAL STOCKHOLDERS' EQUITY TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4Q08 88,587 $ 3Q08 (17) % 177 % 155,664 100,322 302,053 109,834 537,964 15,629 1,260,279 99,525 45,781 153,864 83,490 322,986 89,757 526,598 1,208,670 78,810 45,699 (22) (2) (6) 61 (3) (51) (2) (14) 3 5 45 (22) 214 38 NM 37 (20) 5 $ 11,141 5,443 281,503 2,067,119 $ 14,837 5,586 339,887 2,167,865 $ 11,811 5,512 267,525 1,756,359 $ 9,947 5,823 247,344 1,668,699 $ 8,273 6,202 222,143 1,569,797 (25) (3) (17) (5) 35 (12) 27 32 $ 736,460 $ 777,604 $ 589,348 $ 612,305 $ 600,132 (5) 23 179,897 47,584 107,552 14,082 200,354 1,149,601 295,616 1,445,217 124,580 124,580 11 (17) (10) 3 4 (3) (14) (5) 29 (2) 3 26 (29) 120 (31) 29 31 34 31 NM 10 35 1,569,797 (5) 32 2,067,119 $ $ 200,032 47,579 161,821 11,431 261,385 1,271,596 351,023 1,622,619 7,100 126,640 133,740 2,167,865 $ 38,813 $ 203,348 47,323 111,477 17,990 229,336 1,221,779 315,965 1,537,744 4,549 126,406 130,955 1,756,359 $ 1,668,699 $ 31,975 1Q08 164,980 134,651 298,760 119,443 536,890 37,237 1,333,264 92,300 45,947 203,568 40,486 264,236 9,440 248,125 1,543,459 460,894 2,004,353 24,755 138,757 163,512 41,303 4Q08 205,182 123,523 269,576 174,652 752,524 56,322 1,687,935 72,782 46,838 $ $ 1Q08 160,986 120,752 252,098 281,420 726,959 27,411 1,658,213 62,748 48,071 226,110 33,694 236,673 9,757 258,732 1,501,426 397,243 1,898,669 31,957 136,493 168,450 106,156 2Q08 AVERAGE RATES INTEREST-EARNING ASSETS Deposits with banks Federal funds sold and securities purchased under resale agreements Securities borrowed Trading assets - debt instruments Securities Loans Other assets (a) Total interest-earning assets INTEREST-BEARING LIABILITIES Interest-bearing deposits Federal funds purchased and securities sold under repurchase agreements Commercial paper Other borrowings and liabilities (b) Beneficial interests issued by consolidated VIEs Long-term debt Total interest-bearing liabilities INTEREST RATE SPREAD NET YIELD ON INTEREST-EARNING ASSETS NET YIELD ON INTEREST-EARNING ASSETS ADJUSTED FOR SECURITIZATIONS 2.03 % 3.34 % 3.04 % 3.87 % 4.22 1.64 0.29 5.27 4.16 5.87 2.44 4.41 2.88 0.92 6.18 5.14 6.44 3.06 5.12 3.76 2.07 6.06 5.09 6.31 3.29 5.22 3.84 2.29 5.59 5.27 6.36 3.97 5.34 3.80 3.56 5.75 5.47 7.10 5.88 0.93 1.53 2.26 2.36 3.09 0.36 0.47 1.46 1.57 2.73 1.23 0.95 1.17 2.56 3.79 3.87 2.01 2.63 2.05 2.84 2.87 3.31 2.61 2.73 2.17 3.77 2.24 3.27 2.71 3.31 3.41 5.03 3.78 3.82 3.45 3.18% 3.29% 3.11% 3.28% 2.61% 2.73% 2.63% 2.71% 2.43% 2.59% 3.60% 3.55% 3.06% 3.06% % 2.95% (a) Includes margin loans and the Firm's investment in asset-backed commercial paper under the Federal Reserve Bank of Boston's AML facility. (b) Includes securities sold but not yet purchased, brokerage customer payables and advances from Federal Home Loan Banks. Page 5
  7. 7. JPMORGAN CHASE & CO. RECONCILIATION FROM REPORTED TO MANAGED SUMMARY (in millions) The Firm prepares its consolidated financial statements using accounting principles generally accepted in the United States of America ("U.S. GAAP"). That presentation, which is referred to as "reported basis," provides the reader with an understanding of the Firm's results that can be tracked consistently from year to year and enables a comparison of the Firm's performance with other companies' U.S. GAAP financial statements. In addition to analyzing the Firm's results on a reported basis, management reviews the Firm's results and the results of lines of business on a "managed" basis, which is a non-GAAP financial measure. The Firm's definition of managed basis starts with the reported U.S. GAAP results and includes certain reclassifications that assume credit card loans securitized by Card Services remain on the balance sheet and presents revenue on a fully taxable-equivalent ("FTE") basis. These adjustments do not have any impact on net income as reported by the lines of business or by the Firm as a whole. The impact of these adjustments are summarized below. For additional information about managed basis, please refer to the Glossary of Terms on page 37. QUARTERLY TRENDS 1Q09 Change 1Q09 CREDIT CARD INCOME Credit card income - reported Impact of: Credit card securitizations Credit card income - managed OTHER INCOME Other income - reported Impact of: Tax-equivalent adjustments Other income - managed TOTAL NONINTEREST REVENUE Total noninterest revenue - reported Impact of: Credit card securitizations Tax-equivalent adjustments Total noninterest revenue - managed NET INTEREST INCOME Net interest income - reported Impact of: Credit card securitizations Tax-equivalent adjustments Net interest income - managed TOTAL NET REVENUE Total net revenue - reported Impact of: Credit card securitizations Tax-equivalent adjustments Total net revenue - managed PRETAX PRE-PROVISION PROFIT Total pretax pre-provision profit - reported Impact of: Credit card securitizations Tax-equivalent adjustments Total pretax pre-provision profit - managed PROVISION FOR CREDIT LOSSES Provision for credit losses - reported Impact of: Credit card securitizations Provision for credit losses - managed INCOME TAX EXPENSE Income tax expense (benefit) - reported Impact of: Tax-equivalent adjustments Income tax expense (benefit) - managed 4Q08 3Q08 2Q08 1,771 $ 1Q08 $ 1,837 $ 2,049 $ 1,803 $ $ (540) 1,297 $ (710) 1,339 $ (843) 928 $ (843) 960 $ 1,796 (937) 859 4Q08 1Q08 (10) % 2 % 24 (3) 42 51 $ 50 $ 593 $ (115) $ (138) $ 1,829 (92) (97) $ 337 387 $ 556 1,149 $ 323 208 $ 247 109 $ 203 2,032 (39) (66) 66 (81) $ 11,658 $ 3,394 $ 5,743 $ 10,105 $ 9,231 243 26 $ (540) 337 11,455 $ (710) 556 3,240 $ (843) 323 5,223 $ (843) 247 9,509 $ (937) 203 8,497 24 (39) 254 42 66 35 $ 13,367 $ 13,832 $ 8,994 $ 8,294 $ 7,659 (3) 75 $ 2,004 96 15,467 $ 1,938 98 15,868 $ 1,716 155 10,865 $ 1,673 202 10,169 $ 1,618 124 9,401 3 (2) (3) 24 (23) 65 $ 25,025 $ 17,226 $ 14,737 $ 18,399 $ 16,890 45 48 $ 1,464 433 26,922 $ 1,228 654 19,108 $ 873 478 16,088 $ 830 449 19,678 $ 681 327 17,898 19 (34) 41 115 32 50 $ 11,652 $ 5,971 $ 3,600 $ 6,222 $ 7,959 95 46 $ 1,464 433 13,549 $ 1,228 654 7,853 $ 873 478 4,951 $ 830 449 7,501 $ 681 327 8,967 19 (34) 73 115 32 51 $ 8,596 $ 7,313 $ 5,787 $ 3,455 $ 4,424 18 94 $ 1,464 10,060 $ 1,228 8,541 $ 873 6,660 $ 830 4,285 $ 681 5,105 19 18 115 97 $ 915 $ (719) $ (2,133) $ 764 $ 1,162 NM (21) $ 433 1,348 $ 654 (65) $ 478 (1,655) $ 449 1,213 $ 327 1,489 (34) NM 32 (9) Page 6
  8. 8. JPMORGAN CHASE & CO. LINE OF BUSINESS FINANCIAL HIGHLIGHTS - MANAGED BASIS (in millions, except ratio data) QUARTERLY TRENDS 1Q09 Change 1Q09 TOTAL NET REVENUE (FTE) Investment Bank Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity TOTAL NET REVENUE TOTAL PRETAX PRE-PROVISION PROFIT Investment Bank Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity TOTAL PRETAX PRE-PROVISION PROFIT NET INCOME (LOSS) Investment Bank Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity TOTAL NET INCOME AVERAGE EQUITY (a) Investment Bank Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity TOTAL AVERAGE EQUITY RETURN ON EQUITY (a) Investment Bank Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management $ $ $ $ $ $ $ $ 4Q08 8,341 8,835 5,129 1,402 1,821 1,703 (309) 26,922 $ $ 3,567 4,664 3,783 849 502 405 (221) 13,549 $ 1,606 474 (547) 338 308 224 (262) 2,141 $ 33,000 25,000 15,000 8,000 5,000 7,000 43,493 136,493 20 % 8 (15) 17 25 13 $ $ $ $ 3Q08 (302) 8,684 4,908 1,479 2,249 1,658 432 19,108 $ $ (3,043) 4,638 3,419 980 910 445 504 7,853 $ (2,364) 624 (371) 480 533 255 1,545 702 $ 33,000 25,000 15,000 8,000 4,500 7,000 46,257 138,757 (28) % 10 (10) 24 47 14 $ $ $ $ 2Q08 4,035 4,963 3,887 1,125 1,953 1,961 (1,836) 16,088 $ $ 219 2,184 2,693 639 614 599 (1,997) 4,951 $ 882 64 292 312 406 351 (1,780) 527 $ $ $ 26,000 17,000 14,100 7,000 3,500 5,500 53,540 126,640 13 1 8 18 46 25 $ $ % 1Q08 5,470 5,110 3,775 1,106 2,019 2,064 134 19,678 $ $ 736 2,430 2,590 630 702 664 (251) 7,501 $ 394 503 250 355 425 395 (319) 2,003 $ $ $ 23,319 17,000 14,100 7,000 3,500 5,066 56,421 126,406 7 12 7 20 49 31 $ $ % 4Q08 3,011 4,763 3,904 1,067 1,913 1,901 1,339 17,898 1Q08 NM % 2 5 (5) (19) 3 NM 41 177 % 85 31 31 (5) (10) NM 50 458 2,191 2,632 582 685 578 1,841 8,967 NM 1 11 (13) (45) (9) NM 73 NM 113 44 46 (27) (30) NM 51 (87) (311) 609 292 403 356 1,111 2,373 NM (24) (47) (30) (42) (12) NM 205 NM NM NM 16 (24) (37) NM (10) 11 (6) (2) 50 47 6 14 43 40 (22) 10 22,000 17,000 14,100 7,000 3,500 5,000 55,980 124,580 (2) % (7) 17 17 46 29 (a) Each business segment is allocated capital by taking into consideration stand-alone peer comparisons, economic risk measures and regulatory capital requirements. The amount of capital assigned to each business is referred to as equity. Page 7
  9. 9. JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS (in millions, except ratio data) QUARTERLY TRENDS 1Q09 Change 1Q09 INCOME STATEMENT REVENUE Investment banking fees Principal transactions Lending & deposit-related fees Asset management, administration and commissions All other income Noninterest revenue Net interest income TOTAL NET REVENUE (a) $ 4Q08 1,380 3,515 138 692 (86) 5,639 2,702 8,341 $ 3Q08 1,373 (6,160) 138 764 109 (3,776) 3,474 (302) $ 2Q08 1,593 (922) 118 847 (279) 1,357 2,678 4,035 $ 1Q08 1,735 838 105 709 (226) 3,161 2,309 5,470 $ 4Q08 1,206 (798) 102 744 (66) 1,188 1,823 3,011 1Q08 1 % NM (9) NM NM (22) NM Provision for credit losses Credit reimbursement from TSS (b) 1,210 30 765 30 234 31 398 30 618 30 58 - NONINTEREST EXPENSE Compensation expense Noncompensation expense TOTAL NONINTEREST EXPENSE 3,330 1,444 4,774 1,166 1,575 2,741 2,162 1,654 3,816 3,132 1,602 4,734 1,241 1,312 2,553 186 (8) 74 Income (loss) before income tax expense Income tax expense (benefit) (c) NET INCOME (LOSS) 2,387 781 1,606 (3,778) (1,414) (2,364) $ FINANCIAL RATIOS ROE ROA Overhead ratio Compensation expense as a % of total net revenue REVENUE BY BUSINESS Investment banking fees: Advisory Equity underwriting Debt underwriting Total investment banking fees Fixed income markets Equity markets Credit portfolio Total net revenue REVENUE BY REGION Americas Europe/Middle East/Africa Asia/Pacific Total net revenue $ 20 % 0.89 57 40 $ $ $ $ $ (28) % (1.08) NM NM 479 308 593 1,380 4,889 1,773 299 8,341 $ 4,780 2,588 973 8,341 $ $ $ 16 (866) 882 $ 13 % 0.39 95 54 579 330 464 1,373 (1,671) (94) 90 (302) $ (2,223) 2,019 (98) (302) $ $ $ 368 (26) 394 $ 7 % 0.19 87 57 576 518 499 1,593 815 1,650 (23) 4,035 $ 1,052 2,509 474 4,035 $ $ $ (130) (43) (87) 14 % NM 35 (7) (30) 375 48 177 96 168 10 87 NM NM NM NM NM NM 483 359 364 1,206 466 976 363 3,011 (17) (7) 28 1 NM NM 232 NM (1) (14) 63 14 NM 82 (18) 177 536 1,641 834 3,011 NM 28 NM NM NM 58 17 177 (2) % (0.05) 85 41 370 542 823 1,735 2,347 1,079 309 5,470 $ 3,165 1,512 793 5,470 $ $ $ (a) Total net revenue included tax-equivalent adjustments, predominantly due to income tax credits related to affordable housing investments and tax-exempt income from municipal bond investments, of $365 million, $583 million, $427 million, $404 million, and $289 million, for the quarters ended March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively. (b) Treasury & Securities Services ("TSS") was charged a credit reimbursement related to certain exposures managed within the Investment Bank credit portfolio on behalf of clients shared with TSS. (c) The income tax benefit in the third quarter of 2008 is predominantly the result of reduced deferred tax liabilities on overseas earnings. Page 8
  10. 10. JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except headcount and ratio data) QUARTERLY TRENDS 1Q09 Change 1Q09 SELECTED BALANCE SHEET DATA (Period-end) Equity SELECTED BALANCE SHEET DATA (Average) Total assets Trading assets - debt and equity instruments Trading assets - derivative receivables Loans: Loans retained (a) Loans held-for-sale & loans at fair value Total loans Adjusted assets (b) Equity Net charge-off (recovery) rate (a) (d) Allowance for loan losses to average loans (a) (d) (e) Allowance for loan losses to nonperforming loans (c) Nonperforming loans to average loans 3Q08 2Q08 1Q08 4Q08 1Q08 $ 33,000 $ 33,000 $ 33,000 $ 26,000 $ 22,000 $ 733,166 272,998 125,021 $ 869,159 306,168 153,875 $ 890,040 360,821 105,462 $ 814,860 367,184 99,395 $ 755,828 369,456 90,234 (16) (11) (19) (3) (26) 39 - % 50 % 70,041 12,402 82,443 589,163 33,000 $ 73,110 16,378 89,488 685,242 33,000 69,022 17,612 86,634 694,459 26,000 76,239 20,440 96,679 676,777 23,319 74,106 19,612 93,718 662,419 22,000 (4) (24) (8) (14) - (5) (37) (12) (11) 50 26,142 Headcount CREDIT DATA AND QUALITY STATISTICS Net charge-offs (recoveries) Nonperforming assets: Loans (c) Derivative receivables Assets acquired in loan satisfactions Total nonperforming assets Allowance for credit losses: Allowance for loan losses Allowance for lending-related commitments Total allowance for credit losses 4Q08 27,938 30,993 37,057 25,780 (6) 1 13 (59) 177 36 $ 87 $ 13 $ (8) $ 1,795 1,010 236 3,041 1,175 1,079 247 2,501 436 34 113 583 313 76 101 490 321 31 87 439 53 (6) (4) 22 459 NM 171 NM 4,682 295 4,977 3,444 360 3,804 2,654 463 3,117 2,429 469 2,898 1,891 607 2,498 36 (18) 31 148 (51) 99 0.21 % 6.68 269 2.18 0.47 % 4.71 301 1.31 0.07 % 3.85 657 0.50 (0.04) % 3.19 843 0.32 0.07 % 2.55 683 0.34 (a) Loans retained included credit portfolio loans, leveraged leases and other accrual loans, and excluded loans held-for-sale and loans accounted for at fair value. (b) Adjusted assets, a non-GAAP financial measure, equals total assets minus (1) securities purchased under resale agreements and securities borrowed less securities sold, not yet purchased; (2) assets of variable interest entities ("VIEs") consolidated under FIN 46R; (3) cash and securities segregated and on deposit for regulatory and other purposes; (4) goodwill and intangibles; (5) securities received as collateral; and (6) investments purchased under the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility. The amount of adjusted assets is presented to assist the reader in comparing the Investment Bank's ("IB") asset and capital levels to other investment banks in the securities industry. Asset-to-equity leverage ratios are commonly used as one measure to assess a company’s capital adequacy. IB believes an adjusted asset amount that excludes the assets discussed above, which were considered to have a low risk profile, provides a more meaningful measure of balance sheet leverage in the securities industry. (c) Nonperforming loans included loans held-for-sale and loans at fair value of $57 million, $32 million, $32 million, $25 million, and $44 million, at March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, March 31, 2008, respectively, which were excluded from the allowance coverage ratios. Nonperforming loans excluded distressed loans held-for-sale that were purchased as part of IB's proprietary activities. (d) Loans held-for-sale and loans at fair value were excluded when calculating the allowance coverage ratio and net charge-off (recovery) rate. (e) Excluding the impact of a loan originated in March 2008 to Bear Stearns, the adjusted ratio would be 3.46% and 2.61% for the quarters ended June 30, 2008, and March 31, 2008, respectively. The average balance of the loan extended to Bear Stearns was $6.0 billion and $1.7 billion for the quarters ended June 30, 2008, and March 31, 2008, respectively. The allowance for loan losses to period-end loans was 7.04%, 4.83%, 3.70% 3.35%, and 2.46% at March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively. Page 9
  11. 11. JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio and rankings data) QUARTERLY TRENDS 1Q09 Change 1Q09 4Q08 MARKET RISK - AVERAGE TRADING AND CREDIT PORTFOLIO VAR - 99% CONFIDENCE LEVEL (a) Trading activities: Fixed income $ Foreign exchange Equities Commodities and other Diversification (b) Total trading VaR (c) 218 40 162 28 (159) 289 Credit portfolio VaR (d) Diversification (b) Total trading and credit portfolio VaR 182 (135) 336 $ $ 3Q08 276 55 87 30 (146) 302 165 (140) 327 $ March 31, 2009 YTD MARKET SHARES AND RANKINGS (e) Global debt, equity and equity-related Global syndicated loans Global long-term debt (f) Global equity and equity-related (g) Global announced M&A (h) U.S. debt, equity and equity-related U.S. syndicated loans U.S. long-term debt (f) U.S. equity and equity-related (g) U.S. announced M&A (h) Market Share 11% 6% 9% 13% 43% 15% 17% 14% 21% 66% Rankings #1 #6 #2 #1 #2 #1 #3 #1 #1 #3 $ $ 2Q08 183 20 80 41 (104) 220 47 (49) 218 $ 1Q08 155 26 30 31 (92) 150 35 (36) 149 $ $ $ 4Q08 120 35 31 28 (92) 122 30 (30) 122 1Q08 (21) % (27) 86 (7) (9) (4) 10 4 3 82 % 14 423 (73) 137 NM (350) 175 Full Year 2008 Market Share 10% 11% 9% 10% 27% 15% 27% 15% 11% 34% Rankings #1 #1 #3 #1 #2 #2 #1 #2 #1 #2 (a) Results for second quarter 2008 include one month of the combined Firm's results and two months of heritage JPMorgan Chase & Co. results. First quarter of 2008 reflects heritage JPMorgan Chase & Co. results. (b) Average VaRs were less than the sum of the VaRs of their market risk components, which was due to risk offsets resulting from portfolio diversification. The diversification effect reflected the fact that the risks were not perfectly correlated. The risk of a portfolio of positions is usually less than the sum of the risks of the positions themselves. (c) Trading VaR includes predominantly all trading activities in IB; however, particular risk parameters of certain products are not fully captured, for example, correlation risk. Trading VaR does not include VaR related to held-for-sale funded loans and unfunded commitments, nor the debit valuation adjustments ("DVA") taken on derivative and structured liabilities to reflect the credit quality of the Firm. Trading VaR also does not include the MSR portfolio or VaR related to other corporate functions, such as Corporate/Private Equity. Beginning in the fourth quarter of 2008, trading VaR includes the estimated credit spread sensitivity of certain mortgage products. (d) Included VaR on derivative credit valuation adjustments ("CVA"), hedges of the CVA and mark-to-market hedges of the retained loan portfolio, which are all reported in principal transactions revenue. This VaR does not include the retained loan portfolio. (e) Source: Thomson Reuters. Full year 2008 results are pro forma for the Bear Stearns merger. (f) Includes asset-backed securities, mortgage-backed securities and municipal securities. (g) Includes rights offerings; U.S. domiciled equity and equity-related transactions. (h) Global announced M&A is based upon rank value; all other rankings are based upon proceeds, with full credit to each book manager/equal if joint. Because of joint assignments, market share of all participants will add up to more than 100%. Global and U.S. announced M&A market share and ranking for 2008 include transactions withdrawn since December 31, 2008. U.S. announced M&A represents any U.S. involvement ranking. Page 10
  12. 12. JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS (in millions, except ratio and headcount data) QUARTERLY TRENDS 1Q09 Change 1Q09 INCOME STATEMENT REVENUE Lending & deposit-related fees Asset management, administration and commissions Securities gains Mortgage fees and related income Credit card income Other income Noninterest revenue Net interest income TOTAL NET REVENUE $ 4Q08 948 435 1,633 367 214 3,597 5,238 8,835 $ 3Q08 1,050 412 1,962 367 183 3,974 4,710 8,684 $ 2Q08 538 346 438 204 206 1,732 3,231 4,963 $ 1Q08 497 375 696 194 198 1,960 3,150 5,110 $ 4Q08 461 377 525 174 152 1,689 3,074 4,763 1Q08 (10) % 6 (17) 17 (9) 11 2 106 % 15 211 111 41 113 70 85 Provision for credit losses 3,877 3,576 2,056 1,585 2,688 8 44 NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE 1,631 2,457 83 4,171 1,604 2,345 97 4,046 1,120 1,559 100 2,779 1,184 1,396 100 2,680 1,160 1,312 100 2,572 2 5 (14) 3 41 87 (17) 62 787 313 474 1,062 438 624 128 64 64 845 342 503 (26) (29) (24) NM NM NM 262,118 (2) 57 218,489 18,000 236,489 230,854 17,000 (1) 25 (1) 5 - 67 (30) 59 65 47 260,013 - Income (loss) before income tax expense Income tax expense (benefit) NET INCOME (LOSS) $ FINANCIAL RATIOS ROE Overhead ratio Overhead ratio excluding core deposit intangibles (a) SELECTED BALANCE SHEET DATA (Period-end) Assets Loans: Loans retained Loans held-for-sale & loans at fair value (b) Total loans Deposits Equity SELECTED BALANCE SHEET DATA (Average) Assets Loans: Loans retained Loans held-for-sale & loans at fair value (b) Total loans Deposits Equity Headcount $ 8 % 47 46 $ 412,505 10 % 47 45 $ 364,220 12,529 376,749 380,140 25,000 $ 423,472 $ 419,831 1 % 56 54 $ 368,786 9,996 378,782 360,451 25,000 $ 423,699 $ 426,435 12 % 52 51 $ 371,153 10,223 381,376 353,660 25,000 $ 265,367 $ 265,845 (7) % 54 52 $ 223,047 16,282 239,329 223,121 17,000 $ 267,808 (497) (186) (311) $ 63 366,925 16,526 383,451 370,278 25,000 369,172 13,848 383,020 358,523 25,000 222,640 16,037 238,677 222,180 17,000 221,132 20,492 241,624 226,487 17,000 214,586 17,841 232,427 225,555 17,000 (1) 19 3 - 71 (7) 65 64 47 100,677 102,007 101,826 69,550 70,095 (1) 44 (a) Retail Financial Services uses the overhead ratio (excluding the amortization of core deposit intangibles ("CDI")), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in the overhead ratio calculation results in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this method would result in an improving overhead ratio over time, all things remaining equal. This non-GAAP ratio excludes Retail Banking's core deposit intangible amortization expense related to the 2006 Bank of New York transaction and the 2004 Bank One merger of $83 million, $97 million, $99 million, $99 million, and $99 million, for the quarters ending March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively. (b) Prime mortgages originated with the intent to sell are accounted for at fair value and classified as trading assets on the Consolidated Balance Sheets. These loans totaled $8.9 billion, $8.0 billion, $8.6 billion, $14.1 billion, and $13.5 billion, at March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively. Average balances of these loans totaled $13.4 billion, $12.0 billion, $14.5 billion, $16.9 billion, and $13.4 billion for the quarters ended March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively. Page 11
  13. 13. JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data) QUARTERLY TRENDS 1Q09 Change 1Q09 CREDIT DATA AND QUALITY STATISTICS Net charge-offs Nonperforming loans (a) (b) (c) (d) Nonperforming assets (a) (b) (c) (d) Allowance for loan losses Net charge-off rate (e) Net charge-off rate excluding purchased credit-impaired loans (e) (f) Allowance for loan losses to ending loans (e) Allowance for loan losses to ending loans excluding purchased credit-impaired loans (e) (f) Allowance for loan losses to nonperforming loans (a) (e) Nonperforming loans to total loans $ 4Q08 2,176 7,978 9,846 10,619 2.41 % 3.16 2.92 3.84 138 2.12 $ 3Q08 1,701 6,784 9,077 8,918 1.83 % 2.41 2.42 3.19 136 1.79 $ 2Q08 1,326 5,724 8,085 7,517 2.37 % 2.37 2.03 2.56 136 1.50 $ 1Q08 1,025 4,574 5,333 5,062 1.86 % 1.86 2.27 2.27 115 1.91 $ 4Q08 825 3,742 4,359 4,496 1Q08 28 % 18 8 19 164 % 113 126 136 1.55 % 1.55 2.06 2.06 124 1.58 (a) Excludes purchased credit-impaired loans accounted for under SOP 03-3 that were acquired as part of the Washington Mutual transaction. These loans are accounted for on a pool basis and the pools are considered to be performing under SOP 03-3. (b) Nonperforming loans and assets included loans held-for-sale and loans accounted for at fair value of $264 million, $236 million, $207 million, $180 million, and $129 million at March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively. Certain of these loans are classified as trading assets on the Consolidated Balance Sheets. (c) Nonperforming loans and assets excluded (1) loans eligible for repurchase as well as loans repurchased from Government National Mortgage Association ("GNMA") pools that are insured by U.S. government agencies of $4.6 billion, $3.3 billion, $1.8 billion, $1.9 billion, and $1.8 billion at March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively, and (2) student loans that are 90 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program of $433 million, $437 million, $405 million, $394 million, and $418 million, at March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively. These amounts for GNMA and student loans are excluded, as reimbursement is proceeding normally. (d) During the second quarter of 2008, the policy for classifying subprime mortgage and home equity loans as nonperforming was changed to conform to all other home lending products. Prior period nonperforming loans and assets have been revised to reflect this change. (e) Loans held-for-sale and loans accounted for at fair value were excluded when calculating the allowance coverage ratio and the net charge-off rate. (f) Excludes the impact of purchased credit-impaired loans accounted for under SOP 03-3 that were acquired as part of the Washington Mutual transaction. These loans were accounted for at fair value on the acquisition date, which incorporated management's estimate, as of the acquisition date, of credit losses over the remaining life of the portfolio. No allowance for loan losses has been recorded for these loans as of March 31, 2009, December 31, 2008, and September 30, 2008, respectively. Page 12
  14. 14. JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) QUARTERLY TRENDS 1Q09 Change 1Q09 4Q08 3Q08 2Q08 1Q08 4Q08 1Q08 RETAIL BANKING Noninterest revenue Net interest income Total net revenue Provision for credit losses Noninterest expense Income before income tax expense Net income $ $ Overhead ratio Overhead ratio excluding core deposit intangibles (a) BUSINESS METRICS (in billions) Business banking origination volume End-of-period loans owned End-of-period deposits: Checking Savings Time and other Total end-of-period deposits Average loans owned Average deposits: Checking Savings Time and other Total average deposits Deposit margin Average assets CREDIT DATA AND QUALITY STATISTICS Net charge-offs Net charge-off rate Nonperforming assets RETAIL BRANCH BUSINESS METRICS Investment sales volume Number of: Branches ATMs Personal bankers Sales specialists Active online customers (in thousands) Checking accounts (in thousands) 1,718 2,614 4,332 325 2,580 1,427 863 $ $ 1,834 2,687 4,521 268 2,533 1,720 1,040 $ $ 56 % 54 60 % 58 1,089 1,756 2,845 70 1,580 1,195 723 $ $ 56 % 52 1,062 1,671 2,733 62 1,557 1,114 674 $ $ 57 % 53 966 1,545 2,511 49 1,562 900 545 (6) % (3) (4) 21 2 (17) (17) 78 % 69 73 NM 65 59 58 62 % 58 $ 0.5 18.2 $ 0.8 18.4 $ 1.2 18.6 $ 1.7 16.5 $ 1.8 15.9 (38) (1) (72) 14 $ 113.9 152.4 86.5 352.8 18.4 $ 109.2 144.0 89.1 342.3 18.2 $ 106.7 146.4 85.8 338.9 16.6 $ 69.1 105.8 37.0 211.9 16.2 $ 69.0 105.4 44.6 219.0 15.8 4 6 (3) 3 1 65 45 94 61 16 $ $ $ $ $ $ $ $ $ $ 109.4 $ 148.2 88.2 345.8 2.85 % 30.2 $ 105.8 $ 145.3 88.7 339.8 2.94 % 28.7 $ 68.0 $ 105.4 36.7 210.1 3.06 % 25.6 $ 68.4 $ 105.9 39.6 213.9 2.88 % 25.7 $ 66.1 100.3 47.7 214.1 2.64 % 25.4 3 2 (1) 2 66 48 85 62 5 19 175 $ 3.86 % 579 $ 168 $ 3.67 % 424 $ 68 $ 1.63 % 380 $ 61 $ 1.51 % 337 $ 49 1.25 % 328 4 257 37 77 4,084 11 8 3,146 9,237 9,826 4,133 6,454 11,068 (5) (3) (2) (4) 10 2 4,398 5,186 14,159 15,544 5,454 12,882 24,984 $ 3,956 5,474 14,568 15,825 5,661 11,710 24,499 $ 4,389 5,423 14,389 15,491 5,899 11,682 24,490 $ 5,211 3,157 9,310 9,995 4,116 7,180 11,336 $ 65 53 58 32 100 126 (a) Retail Banking uses the overhead ratio (excluding the amortization of core deposit intangibles ("CDI")), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in the overhead ratio calculation results in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this method would result in an improving overhead ratio over time, all things remaining equal. This non-GAAP ratio excludes Retail Banking's core deposit intangible amortization expense related to the 2006 Bank of New York transaction and the 2004 Bank One merger of $83 million, $97 million, $99 million, $99 million, and $99 million, for the quarters ended March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively. Page 13
  15. 15. JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) QUARTERLY TRENDS 1Q09 Change 1Q09 4Q08 3Q08 2Q08 1Q08 4Q08 1Q08 CONSUMER LENDING Noninterest revenue Net interest income Total net revenue Provision for credit losses Noninterest expense Income (loss) before income tax expense Net income (loss) $ $ Overhead ratio BUSINESS METRICS (in billions) LOANS EXCLUDING PURCHASED CREDIT-IMPAIRED LOANS End-of-period loans owned: Home equity Prime mortgage Subprime mortgage Option ARMs Student loans Auto loans Other Total end-of-period loans Average loans owned: Home equity Prime mortgage Subprime mortgage Option ARMs Student loans Auto loans Other Total average loans PURCHASED CREDIT-IMPAIRED LOANS (a) End-of-period loans owned: Home equity Prime mortgage Subprime mortgage Option ARMs Total end-of-period loans Average loans owned: Home equity Prime mortgage Subprime mortgage Option ARMs Total average loans TOTAL CONSUMER LENDING PORTFOLIO End-of-period loans owned: Home equity Prime mortgage Subprime mortgage Option ARMs Student loans Auto loans Other Total end-of-period loans Average loans owned: Home equity Prime mortgage Subprime mortgage Option ARMs Student loans Auto loans Other Total average loans owned (b) 1,879 2,624 4,503 3,552 1,591 (640) (389) $ $ 35 % 2,140 2,023 4,163 3,308 1,513 (658) (416) $ $ 36 % 643 1,475 2,118 1,986 1,199 (1,067) (659) $ $ 57 % 898 1,479 2,377 1,523 1,123 (269) (171) $ $ 47 % 723 1,529 2,252 2,639 1,010 (1,397) (856) (12) % 30 8 7 5 3 6 160 % 72 100 35 58 54 55 45 % $ 111.7 65.4 14.6 9.0 17.3 43.1 1.0 262.1 $ 114.3 65.2 15.3 9.0 15.9 42.6 1.3 263.6 $ 116.8 63.0 18.1 19.0 15.3 43.3 1.0 276.5 $ 95.1 40.1 14.8 13.0 44.9 0.9 208.8 $ 95.0 38.2 15.8 12.4 44.7 1.0 207.1 (2) (5) 9 1 (23) (1) 18 71 (8) NM 40 (4) 27 $ 113.4 65.4 14.9 8.8 17.0 42.5 1.5 263.5 $ 114.6 65.0 15.7 9.0 15.6 42.9 1.5 264.3 $ 94.8 39.7 14.2 14.1 43.9 0.9 207.6 $ 95.1 39.3 15.5 12.7 44.9 1.0 208.5 $ 95.0 36.0 15.7 12.0 43.2 1.3 203.2 (1) 1 (5) (2) 9 (1) - 19 82 (5) NM 42 (2) 15 30 $ 28.4 21.4 6.6 31.2 87.6 $ 28.6 21.8 6.8 31.6 88.8 $ 26.5 24.7 3.9 22.6 77.7 $ - $ - (1) (2) (3) (1) (1) NM NM NM NM NM $ 28.4 21.6 6.7 31.4 88.1 $ 28.2 21.9 6.8 31.6 88.5 $ - $ - $ - 1 (1) (1) (1) - NM NM NM NM NM $ 140.1 86.8 21.2 40.2 17.3 43.1 1.0 349.7 $ 142.9 87.0 22.1 40.6 15.9 42.6 1.3 352.4 $ 143.3 87.7 22.0 41.6 15.3 43.3 1.0 354.2 $ 95.1 40.1 14.8 13.0 44.9 0.9 208.8 $ 95.0 38.2 15.8 12.4 44.7 1.0 207.1 (2) (4) (1) 9 1 (23) (1) 47 127 34 NM 40 (4) 69 $ 141.8 87.0 21.6 40.2 17.0 42.5 1.5 351.6 $ 142.8 86.9 22.5 40.6 15.6 42.9 1.5 352.8 $ 94.8 39.7 14.2 14.1 43.9 0.9 207.6 $ 95.1 39.3 15.5 12.7 44.9 1.0 208.5 $ 95.0 36.0 15.7 12.0 43.2 1.3 203.2 (1) (4) (1) 9 (1) - 49 142 38 NM 42 (2) 15 73 (a) Purchased credit-impaired loans represent loans acquired in the Washington Mutual transaction for which a deterioration in credit quality occurred between the origination date and JPMorgan Chase's acquisition date. Under SOP 03-3, these loans were initially recorded at fair value and accrete interest income over the estimated life of the loan when cash flows are reasonably estimable even if the underlying loans are contractually past due. (b) Total average loans includes loans held-for-sale of $3.1 billion, $1.8 billion, $1.5 billion, $3.6 billion, and $4.4 billion, for the quarters ended March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively. Page 14
  16. 16. JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) QUARTERLY TRENDS 1Q09 Change 1Q09 4Q08 3Q08 2Q08 1Q08 4Q08 1Q08 CONSUMER LENDING (continued) CREDIT DATA AND QUALITY STATISTICS Net charge-offs excluding purchased credit-impaired loans: (a) Home equity Prime mortgage Subprime mortgage Option ARMs Auto loans Other Total net charge-offs Net charge-off rate excluding purchased credit-impaired loans: (a) Home equity Prime mortgage Subprime mortgage Option ARMs Auto loans Other Total net charge-off rate excluding purchased credit-impaired loans (b) Net charge-off rate - reported: Home equity Prime mortgage Subprime mortgage Option ARMs Auto loans Other Total net charge-off rate - reported (b) 30+ day delinquency rate excluding purchased credit-impaired loans (c) (d) (e) Nonperforming assets (f) (g) (h) Allowance for loan losses to ending loans Allowance for loan losses to ending loans excluding purchased credit-impaired loans (a) $ 1,098 312 364 4 174 49 2,001 $ 770 195 319 207 42 1,533 $ 663 177 273 124 21 1,258 $ 511 104 192 119 38 964 $ 447 50 149 118 12 776 3.93 % 1.95 9.91 0.18 1.66 1.25 3.12 2.78 % 1.79 7.65 1.12 0.60 2.43 2.16 % 1.08 4.98 1.07 1.44 1.89 2.15 0.89 5.64 1.92 1.08 1.74 2.78 1.79 7.65 1.12 0.60 2.43 2.16 1.08 4.98 1.07 1.44 1.89 146 % NM 144 NM 47 308 158 1.89 % 0.56 3.82 1.10 0.52 1.57 3.14 1.46 6.83 0.04 1.66 1.25 2.33 $ 2.67 % 1.20 8.08 1.92 1.08 2.32 43 % 60 14 NM (16) 17 31 1.89 0.56 3.82 1.10 0.52 1.57 4.73 9,267 $ 2.83 % 3.79 4.21 8,653 $ 2.36 % 3.16 3.16 7,705 $ 1.95 % 2.50 3.88 4,996 $ 2.33 % 2.33 3.33 4,031 2.10 % 2.10 7 130 (a) Excludes the impact of purchased credit-impaired loans accounted for under SOP 03-3 that were acquired as part of the Washington Mutual transaction. These loans were accounted for at fair value on the acquisition date, which incorporated management's estimate, as of the acquisition date, of credit losses over the remaining life of the portfolio. No allowance for loan losses and no charge-offs have been recorded for these loans as of March 31, 2009, December 31, 2008, and September 30, 2008, respectively. (b) Average loans held-for-sale of $3.1 billion, $1.8 billion, $1.5 billion, $3.6 billion, and $4.4 billion, for the quarters ended March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively, were excluded when calculating the net charge-off rate. (c) Excluded loans eligible for repurchase as well as loans repurchased from GNMA pools that are insured by U.S. government agencies of $4.5 billion, $3.2 billion, $2.0 billion, $1.5 billion, and $1.5 billion at March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively. These amounts are excluded as reimbursement is proceeding normally. (d) Excluded loans that are 30 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program of $770 million, $824 million, $787 million, $735 million, and $734 million, at March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively. These amounts are excluded as reimbursement is proceeding normally. (e) The delinquency rate for purchased credit-impaired loans accounted for under SOP 03-3 was 21.36%, 17.89%, and 13.21% at March 31, 2009, December 31, 2008, and September 30, 2008, respectively. There were no purchased credit-impaired loans at June 30, 2008, and March 31, 2008. (f) Nonperforming assets excluded (1) loans eligible for repurchase as well as loans repurchased from Governmental National Mortgage Association ("GNMA") pools that are insured by U.S. government agencies of $4.6 billion, $3.3 billion, $1.8 billion, $1.9 billion, and $1.8 billion, at March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively, and (2) student loans that are 90 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program of $433 million, $437 million, $405 million, $394 million, and $418 million, at March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively. These amounts for GNMA and student loans are excluded, as reimbursement is proceeding normally. (g) During the second quarter of 2008, the policy for classifying subprime mortgage and home equity loans as nonperforming was changed to conform to all other home lending products. Prior period nonperforming assets have been revised to reflect this change. (h) Excludes purchased credit-impaired loans accounted for under SOP 03-3 that were acquired as part of the Washington Mutual transaction. These loans are accounted for on a pool basis and the pools are considered to be performing under SOP 03-3. Page 15
  17. 17. JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in billions) QUARTERLY TRENDS 1Q09 Change 1Q09 4Q08 3Q08 2Q08 1Q08 4Q08 1Q08 CONSUMER LENDING (continued) Origination volume: Mortgage origination volume by channel Retail Wholesale Correspondent CNT (negotiated transactions) Total mortgage origination volume Home equity Student loans Auto loans $ Average mortgage loans held-for-sale & loans at fair value (a) Average assets Third-party mortgage loans serviced (ending) MSR net carrying value (ending) SUPPLEMENTAL MORTGAGE FEES AND RELATED INCOME DETAILS (in millions) Production revenue Net mortgage servicing revenue: Loan servicing revenue Changes in MSR asset fair value: Due to inputs or assumptions in model Other changes in fair value Total changes in MSR asset fair value Derivative valuation adjustments and other Total net mortgage servicing revenue Mortgage fees and related income 13.6 2.6 17.0 4.5 37.7 0.9 1.7 5.6 $ 14.0 393.3 1,148.8 10.6 $ 481 7.6 3.8 13.3 3.4 28.1 1.7 1.0 2.8 $ 12.2 395.0 1,172.6 9.3 $ 62 1,222 1,366 1,310 (1,073) 237 (6,950) (843) (7,793) (307) 1,152 1,633 8,327 1,900 1,962 8.4 5.9 13.2 10.2 37.7 2.6 2.6 3.8 $ 14.9 239.8 1,114.8 16.4 $ 66 654 (786) (390) (1,176) 894 372 438 12.5 9.1 17.0 17.5 56.1 5.3 1.3 5.6 $ 17.4 242.1 659.1 10.9 $ 394 645 1,519 (394) 1,125 (1,468) 302 696 12.6 10.6 12.0 11.9 47.1 6.7 2.0 7.2 79 % (32) 28 32 34 (47) 70 100 8 % (75) 42 (62) (20) (87) (15) (22) 13.8 234.6 627.1 8.4 $ 15 (2) 14 1 68 83 26 376 NM 28 593 (11) 106 NM (27) NM NM (152) NM NM (39) (17) NM NM 211 (632) (425) (1,057) 613 149 525 (a) Prime mortgages with the intent to sell are accounted for at fair value and classified as trading assets on the Consolidated Balance Sheets. Average balances of these loans totaled $13.4 billion, $12.0 billion, $14.5 billion, $16.9 billion, and $13.4 billion for the quarters ended March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively. Page 16
  18. 18. JPMORGAN CHASE & CO. CARD SERVICES - MANAGED BASIS FINANCIAL HIGHLIGHTS (in millions, except ratio data and where otherwise noted) QUARTERLY TRENDS 1Q09 Change 1Q09 INCOME STATEMENT REVENUE Credit card income All other income Noninterest revenue Net interest income TOTAL NET REVENUE $ 4Q08 844 (197) 647 4,482 5,129 $ 3Q08 862 (272) 590 4,318 4,908 $ 2Q08 633 13 646 3,241 3,887 $ 1Q08 673 91 764 3,011 3,775 $ 4Q08 1Q08 600 119 719 3,185 3,904 (2) % 28 10 4 5 41 % NM (10) 41 31 Provision for credit losses 4,653 3,966 2,229 2,194 1,670 17 179 NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE 357 850 139 1,346 335 979 175 1,489 267 773 154 1,194 258 763 164 1,185 267 841 164 1,272 7 (13) (21) (10) 34 1 (15) 6 $ 396 146 250 $ 962 353 609 (59) (84) (47) NM NM NM $ 36 $ 70 31 NM Income (loss) before income tax expense Income tax expense (benefit) NET INCOME (LOSS) Memo: Net securitization gains (amortization) $ (870) (323) (547) $ (180) FINANCIAL METRICS ROE Overhead ratio % of average managed outstandings: Net interest income Provision for credit losses Noninterest revenue Risk adjusted margin (a) Noninterest expense Pretax income (loss) (ROO) (b) Net income (loss) BUSINESS METRICS Charge volume (in billions) Net accounts opened (in millions) (c) Credit cards issued (in millions) Number of registered internet customers (in millions) Merchant acquiring business (d) Bank card volume (in billions) Total transactions (in billions) (a) (b) (c) (d) $ (547) (176) (371) $ 464 172 292 $ (261) $ (28) (15) % 26 (10) % 30 9.91 10.29 1.43 1.05 2.98 (1.92) (1.21) 8 % 31 9.17 8.42 1.25 2.00 3.16 (1.16) (0.79) 7 % 31 8.18 5.63 1.63 4.19 3.01 1.17 0.74 17 % 33 7.92 5.77 2.01 4.16 3.12 1.04 0.66 8.34 4.37 1.88 5.85 3.33 2.52 1.60 $ 76.0 2.2 159.0 33.8 $ 96.0 4.3 168.7 35.6 $ 93.9 16.6 171.9 34.3 $ 93.6 3.6 157.6 28.0 $ 85.4 3.4 156.4 26.7 (21) (49) (6) (5) (11) (35) 2 27 $ 94.4 4.1 $ 135.1 4.9 $ 197.1 5.7 $ 199.3 5.6 $ 182.4 5.2 (30) (16) (48) (21) Represents total net revenue less provision for credit losses. Pretax return on average managed outstandings. Third quarter of 2008 included approximately 13 million credit card accounts acquired by JPMorgan Chase & Co. in the Washington Mutual transaction. The Chase Paymentech Solutions joint venture was dissolved effective November 1, 2008. For the period January 1, 2008 through October 31, 2008, the data presented represents activity for the Chase Paymentech Solutions joint venture and beyond that date, the data presented represents activity for Chase Paymentech Solutions. Page 17
  19. 19. JPMORGAN CHASE & CO. CARD SERVICES - MANAGED BASIS FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except headcount and ratio data) QUARTERLY TRENDS 1Q09 Change 1Q09 SELECTED BALANCE SHEET DATA (Period-end) Loans: Loans on balance sheets Securitized loans Managed loans $ Equity SELECTED BALANCE SHEET DATA (Average) Managed assets Loans: Loans on balance sheets Securitized loans Managed average loans Equity $ $ 90,911 85,220 176,131 $ $ $ 15,000 $ $ 201,200 $ KEY STATS - WASHINGTON MUTUAL ONLY (c) Managed loans Managed average loans Net interest income (d) Risk adjusted margin (d) (e) Net charge-off rate (a) 30+ day delinquency rate (a) 90+ day delinquency rate (a) KEY STATS - EXCLUDING WASHINGTON MUTUAL Managed loans Managed average loans Net interest income (d) Risk adjusted margin (d) (e) Net charge-off rate 30+ day delinquency rate 90+ day delinquency rate (a) (b) (c) (d) (e) 2Q08 $ $ 92,881 93,664 186,545 15,000 $ $ 203,943 $ $ 97,783 85,619 183,402 $ 15,000 $ $ $ 15,000 $ $ 169,413 $ $ 98,790 88,505 187,295 $ 15,000 3,493 $ 7.72 % 6.16 % 3.22 4Q08 1Q08 20 % 14 17 $ 75,888 75,062 150,950 (13) % (7) 14,100 $ 14,100 - 6 $ 161,601 $ 159,602 (1) 26 $ $ 75,630 77,195 152,825 $ $ 79,183 78,371 157,554 $ 79,445 74,108 153,553 (1) (3) (2) 23 16 19 $ 14,100 $ 14,100 $ 14,100 - 6 18,931 (1) 26 34 109 15 160 24,025 2,616 $ 5.56 % 4.97 % 2.34 $ 8,849 $ 9.73 % 7,692 $ 7.34 % $ 25,908 $ 27,578 16.45 % 4.42 12.63 10.89 5.79 28,250 $ 27,703 14.87 % 4.18 7.11 8.50 3.75 150,223 $ 155,824 8.75 % 0.46 6.86 5.34 2.78 162,067 $ 159,592 8.18 % 1.62 5.29 4.36 2.09 $ 1Q08 76,278 79,120 155,398 23,759 Managed delinquency rates 30+ day (a) 90+ day (a) Allowance for loan losses (b) Allowance for loan losses to period-end loans (b) 3Q08 104,746 85,571 190,317 Headcount MANAGED CREDIT QUALITY STATISTICS Net charge-offs Net charge-off rate (a) 4Q08 22,283 1,979 $ 5.00 % 3.91 % 1.77 5,946 $ 6.40 % 19,570 1,894 $ 4.98 % 3.46 % 1.76 3,705 $ 4.86 % 1,670 4.37 % 3.66 % 1.84 3,404 4.49 % 27,235 (8) - NM NM (7) (2) 1 5.20 % 1.95 159,310 $ 157,554 8.18 % 4.19 5.00 3.69 1.74 155,398 $ 152,825 7.92 % 4.16 4.98 3.46 1.76 150,950 153,553 8.34 % 5.85 4.37 3.66 1.84 - Results for the quarters ending March 31, 2009, December 31, 2008, and September 30, 2008 reflect the impact of purchase accounting adjustments related to the Washington Mutual transaction. Based on loans on a reported basis. Statistics are only presented for periods after September 25, 2008, the date of the Washington Mutual transaction. As a percentage of average managed outstandings. Represents total net revenue less provision for credit losses. Page 18
  20. 20. JPMORGAN CHASE & CO. CARD RECONCILIATION OF REPORTED AND MANAGED DATA (in millions) QUARTERLY TRENDS 1Q09 Change 1Q09 INCOME STATEMENT DATA (a) Credit card income Reported Securitization adjustments Managed credit card income Net interest income Reported Securitization adjustments Managed net interest income Total net revenue Reported Securitization adjustments Managed total net revenue Provision for credit losses Reported Securitization adjustments Managed provision for credit losses $ $ $ $ $ $ $ $ BALANCE SHEETS - AVERAGE BALANCES (a) Total average assets Reported Securitization adjustments Managed average assets $ CREDIT QUALITY STATISTICS (a) Net charge-offs Reported Securitization adjustments Managed net charge-offs $ $ $ 4Q08 1,384 (540) 844 $ 2,478 2,004 4,482 $ 3,665 1,464 5,129 $ $ $ $ 3,189 1,464 4,653 $ 118,418 82,782 201,200 $ 2,029 1,464 3,493 $ $ $ $ 3Q08 1,553 (691) 862 $ 2,408 1,910 4,318 $ 3,689 1,219 4,908 $ $ $ $ 2,747 1,219 3,966 $ 118,290 85,653 203,943 $ 1,397 1,219 2,616 $ $ $ $ 2Q08 1,476 (843) 633 $ 1,525 1,716 3,241 $ 3,014 873 3,887 $ $ $ $ 1,356 873 2,229 $ 93,701 75,712 169,413 $ 1,106 873 1,979 $ $ $ $ 1Q08 1,516 (843) 673 $ 1,338 1,673 3,011 $ 2,945 830 3,775 $ $ $ $ 1,364 830 2,194 $ 87,021 74,580 161,601 $ 1,064 830 1,894 $ $ $ $ 1,537 (937) 600 4Q08 1Q08 (11) % 22 (2) (10) % 42 41 1,567 1,618 3,185 3 5 4 58 24 41 3,223 681 3,904 (1) 20 5 14 115 31 989 681 1,670 16 20 17 222 115 179 (3) (1) 35 16 26 45 20 34 105 115 109 88,013 71,589 159,602 989 681 1,670 (a) JPMorgan Chase & Co. uses the concept of “managed receivables” to evaluate the credit performance and overall performance of the underlying credit card loans, both sold and not sold; as the same borrower is continuing to use the credit card for ongoing charges, a borrower’s credit performance will affect both the receivables sold under SFAS 140 and those not sold. Thus, in its disclosures regarding managed receivables, JPMorgan Chase & Co. treats the sold receivables as if they were still on the balance sheet in order to disclose the credit performance (such as net charge-off rates) of the entire managed credit card portfolio. Managed results exclude the impact of credit card securitizations on total net revenue, the provision for credit losses, net charge-offs and loan receivables. Securitization does not change reported net income versus managed earnings; however, it does affect the classification of items on the Consolidated Statements of Income and Consolidated Balance Sheets. Page 19
  21. 21. JPMORGAN CHASE & CO. COMMERCIAL BANKING FINANCIAL HIGHLIGHTS (in millions, except ratio data) QUARTERLY TRENDS 1Q09 Change 1Q09 INCOME STATEMENT REVENUE Lending & deposit-related fees Asset management, administration and commissions All other income (a) Noninterest revenue Net interest income TOTAL NET REVENUE $ 4Q08 263 34 125 422 980 1,402 $ 3Q08 242 32 102 376 1,103 1,479 $ 2Q08 212 29 147 388 737 1,125 $ 1Q08 207 26 150 383 723 1,106 $ 4Q08 193 26 115 334 733 1,067 1Q08 9 % 6 23 12 (11) (5) 36 % 31 9 26 34 31 Provision for credit losses 293 190 126 47 101 54 190 NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE 200 342 11 553 164 324 11 499 177 298 11 486 173 290 13 476 178 294 13 485 22 6 11 12 16 (15) 14 Income before income tax expense Income tax expense NET INCOME 556 218 338 790 310 480 513 201 312 583 228 355 481 189 292 (30) (30) (30) 16 15 16 9 (15) (17) (14) (5) 75 5 7 350 31 MEMO: Revenue by product: Lending Treasury services Investment banking Other Total Commercial Banking revenue IB revenue, gross (b) Revenue by business: Middle Market Banking Commercial Term Lending (c) Mid-Corporate Banking Real Estate Banking (c) Other (c) Total Commercial Banking revenue FINANCIAL RATIOS ROE Overhead ratio $ $ $ 665 646 73 18 1,402 $ $ $ $ $ 611 759 88 21 1,479 206 $ 752 228 242 120 60 1,402 $ 17 39 $ $ $ % $ 377 643 87 18 1,125 241 $ 796 243 243 131 66 1,479 $ 24 34 $ $ $ % $ 376 630 91 9 1,106 $ 379 616 68 4 1,067 252 $ 270 $ 203 (15) 1 729 236 91 69 1,125 $ 708 235 94 69 1,106 $ 706 207 97 57 1,067 (6) (6) (8) (9) (5) 7 NM 17 24 5 31 18 43 $ $ $ % 20 43 $ $ % 17 45 % (a) IB-related and commercial card revenue is included in all other income. (b) Represents the total revenue related to investment banking products sold to Commercial Banking ("CB") clients. (c) Includes total net revenue on net assets acquired in the Washington Mutual transaction starting in the period ending December 31, 2008. Page 20
  22. 22. JPMORGAN CHASE & CO. COMMERCIAL BANKING FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio and headcount data) QUARTERLY TRENDS 1Q09 Change 1Q09 SELECTED BALANCE SHEET DATA (Period-end) Equity SELECTED BALANCE SHEET DATA (Average) Total assets Loans: Loans retained Loans held-for-sale & loans at fair value Total loans Liability balances (a) Equity MEMO: Loans by business: Middle Market Banking Commercial Term Lending (b) Mid-Corporate Banking Real Estate Banking (b) Other (b) Total Commercial Banking loans Net charge-off rate (f) Allowance for loan losses to average loans (d) (f) Allowance for loan losses to nonperforming loans (c) (d) Nonperforming loans to average loans (d) 3Q08 2Q08 1Q08 4Q08 1Q08 $ 8,000 $ 8,000 $ 8,000 $ 7,000 $ 7,000 $ 144,298 $ 149,815 $ 101,681 $ 103,469 $ 101,979 (4) 41 67,510 521 68,031 99,477 7,000 (3) (10) (3) 1 - 68 (43) 67 16 14 40,111 15,150 7,457 5,313 68,031 (4) (1) 1 (2) (27) (3) 2 NM 22 78 (13) 67 4,075 (13) 12 81 446 453 14 49 45 65 243 264 1,790 200 1,990 4 17 5 65 20 60 113,568 297 113,865 114,975 8,000 $ $ Headcount CREDIT DATA AND QUALITY STATISTICS Net charge-offs Nonperforming loans (c) (d) Nonperforming assets Allowance for credit losses: Allowance for loan losses (e) Allowance for lending-related commitments Total allowance for credit losses 4Q08 117,351 329 117,680 114,113 8,000 40,728 36,814 18,416 13,264 4,643 113,865 $ $ 4,545 $ 42,613 37,039 18,169 13,529 6,330 117,680 $ $ 5,206 134 1,531 1,651 $ 2,945 240 3,185 0.48 2.59 192 1.34 71,901 397 72,298 99,410 7,000 118 1,026 1,142 0.40 2.41 275 0.87 $ $ 5,298 $ 2,826 206 3,032 % 43,155 16,491 7,513 5,139 72,298 70,682 379 71,061 99,404 7,000 40 844 923 2,698 191 2,889 % 0.22 % 2.32 (g) 320 0.72 (g) 42,879 15,357 7,500 5,325 71,061 $ $ 4,028 $ 49 486 510 1,843 170 2,013 0.28 % 2.61 401 0.68 $ -% 14 % 0.48 % 2.65 426 0.66 (a) Liability balances include deposits and deposits swept to on-balance sheet liabilities such as commercial paper, federal funds purchased and securities loaned or sold under repurchase agreements. (b) Includes loans acquired in the Washington Mutual transaction starting in the period ending December 31, 2008. (c) Nonperforming loans included loans held-for-sale and loans at fair value of $26 million at both June 30, 2008, and March 31, 2008. These amounts were excluded when calculating the allowance for loan losses to nonperforming loans ratio. There were no nonperforming loans held-for-sale or held at fair value at March 31, 2009, December 31, 2008, and September 30, 2008. (d) Wholesale purchased credit-impaired loans accounted for under SOP 03-3 that were acquired in the Washington Mutual transaction are considered nonperforming loans because the timing and amount of expected cash flows are not reasonably estimable. These nonperforming loans were included when calculating the allowance coverage ratio, the allowance for loan losses to nonperforming loans ratio, and the nonperforming loans to average loans ratio. The carrying amount of these purchased credit-impaired loans at March 31, 2009, December 31, 2008, and September 30, 2008, was $219 million, $224 million and $272 million, respectively. (e) The allowance for loan losses at September 30, 2008, and June 30, 2008, included amounts related to loans acquired in the Washington Mutual transaction and the merger with Bear Stearns, respectively. (f) Loans held-for-sale and loans accounted for at fair value were excluded when calculating the allowance coverage ratio and the net charge-off rate. (g) Average loans in the calculation of this ratio were adjusted to include $44.5 billion of loans acquired from Washington Mutual as if the transaction occurred on July 1, 2008. Excluding this adjustment, the unadjusted allowance for loan losses to average loans and nonperforming loans to average loans ratios would have been 3.75% and 1.17%, respectively. Page 21
  23. 23. JPMORGAN CHASE & CO. TREASURY & SECURITIES SERVICES FINANCIAL HIGHLIGHTS (in millions, except headcount and ratio data) QUARTERLY TRENDS 1Q09 Change 1Q09 INCOME STATEMENT REVENUE Lending & deposit-related fees Asset management, administration and commissions All other income Noninterest revenue Net interest income TOTAL NET REVENUE $ Provision for credit losses Credit reimbursement to IB (a) 4Q08 325 626 197 1,148 673 1,821 $ (6) (30) 3Q08 304 748 268 1,320 929 2,249 $ 45 (30) 2Q08 290 719 221 1,230 723 1,953 $ 18 (31) 1Q08 283 846 228 1,357 662 2,019 $ 7 (30) 4Q08 269 820 200 1,289 624 1,913 12 (30) 1Q08 7 % (16) (26) (13) (28) (19) 21 % (24) (2) (11) 8 (5) NM - NM - NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE 629 671 19 1,319 628 692 19 1,339 664 661 14 1,339 669 632 16 1,317 641 571 16 1,228 (3) (1) (2) 18 19 7 Income before income tax expense Income tax expense NET INCOME 478 170 308 835 302 533 565 159 406 665 240 425 643 240 403 (43) (44) (42) (26) (29) (24) 860 1,053 1,913 (13) (25) (19) 8 (15) (5) 11 43 (32) (13) 9 43 REVENUE BY BUSINESS Treasury Services (b) Worldwide Securities Services (b) TOTAL NET REVENUE $ $ $ FINANCIAL RATIOS ROE Overhead ratio Pretax margin ratio (c) SELECTED BALANCE SHEET DATA (Period-end) Equity SELECTED BALANCE SHEET DATA (Average) Total assets Loans (d) Liability balances (e) Equity Headcount 931 890 1,821 $ $ $ 25 % 72 26 1,068 1,181 2,249 $ $ $ 47 % 60 37 946 1,007 1,953 $ $ $ 46 % 69 29 905 1,114 2,019 $ $ $ 49 % 65 33 46 % 64 34 $ 5,000 $ 4,500 $ 4,500 $ 3,500 $ 3,500 $ 38,682 20,140 276,486 5,000 $ 55,515 31,283 336,277 4,500 $ 49,386 26,650 259,992 3,500 $ 56,192 23,822 268,293 3,500 $ 57,204 23,086 254,369 3,500 (30) (36) (18) 11 26,561 - 26,998 27,070 27,592 27,232 2 (a) TSS is charged a credit reimbursement related to certain exposures managed within IB credit portfolio on behalf of clients shared with TSS. (b) Reflects an internal reorganization for escrow products from Worldwide Securities Services to Treasury Services revenue of $45 million, $75 million, $49 million, $53 million, and $47 million, for the quarters ended March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively. (c) Pretax margin represents income before income tax expense divided by total net revenue, which is a measure of pretax performance and another basis by which management evaluates its performance and that of its competitors. (d) Loan balances include wholesale overdrafts, commercial card and trade finance loans. (e) Liability balances include deposits and deposits swept to on-balance sheet liabilities such as commercial paper, federal funds purchased and securities loaned or sold under repurchase agreements. Page 22
  24. 24. JPMORGAN CHASE & CO. TREASURY & SECURITIES SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) TSS firmwide metrics include revenue recorded in the CB, Regional Banking and Asset Management ("AM") lines of business and excludes FX revenue recorded in the IB for TSS-related FX activity. In order to capture the firmwide impact of Treasury Services ("TS") and TSS products and revenue, management reviews firmwide metrics such as liability balances, revenue and overhead ratios in assessing financial performance for TSS. Firmwide metrics are necessary in order to understand the aggregate TSS business. QUARTERLY TRENDS 1Q09 Change 1Q09 TSS FIRMWIDE DISCLOSURES Treasury Services revenue - reported (a) Treasury Services revenue reported in Commercial Banking Treasury Services revenue reported in other lines of business Treasury Services firmwide revenue (a) (b) Worldwide Securities Services revenue (a) Treasury & Securities Services firmwide revenue (b) Treasury Services firmwide liability balances (average) (c) (d) Treasury & Securities Services firmwide liability balances (average) (c) $ $ $ TSS FIRMWIDE FINANCIAL RATIOS Treasury Services firmwide overhead ratio (e) Treasury & Securities Services firmwide overhead ratio (e) FIRMWIDE BUSINESS METRICS Assets under custody (in billions) Net charge-off (recovery) rate Allowance for loan losses to average loans Allowance for loan losses to nonperforming loans Nonperforming loans to average loans 931 646 62 1,639 890 2,529 $ 289,645 391,461 $ 53 63 $ Number of: US$ ACH transactions originated (in millions) Total US$ clearing volume (in thousands) International electronic funds transfer volume (in thousands) (f) Wholesale check volume (in millions) Wholesale cards issued (in thousands) (g) CREDIT DATA AND QUALITY STATISTICS Net charge-offs (recoveries) Nonperforming loans Allowance for loan losses Allowance for lending-related commitments 4Q08 $ % 13,532 $ $ 312,559 450,390 $ $ % 13,205 $ % $ 946 643 76 1,665 1,007 2,672 $ 248,075 359,401 $ $ % 14,417 $ % 47 45 - % 0.18 NM - 1Q08 905 630 72 1,607 1,114 2,721 $ 252,625 367,670 $ 53 58 $ 997 29,277 41,831 595 21,858 30 74 63 0.24 247 0.10 2Q08 52 60 1,006 29,346 47,734 572 22,784 2 30 51 77 0.04 0.25 170 0.15 1,068 759 82 1,909 1,181 3,090 44 52 978 27,186 44,365 568 22,233 $ 3Q08 $ (2) 40 33 (0.03) % 0.17 NM - (13) % (15) (24) (14) (25) (18) 243,168 353,845 8 % 5 (10) 6 (15) (3) (7) (13) 19 11 15,690 2 (14) (3) (7) (7) (1) (2) (3) (3) 11 (9) 16 26 33 NM (31) 22 NM NM 96 133 54 58 $ 993 29,063 41,432 618 19,917 $ 860 616 69 1,545 1,053 2,598 1Q08 1,004 28,056 40,039 623 19,122 % 15,476 4Q08 $ % - % 0.11 NM - (a) Reflects an internal reorganization for escrow products from Worldwide Securities Services to Treasury Services revenue of $45 million, $75 million, $49 million, $53 million, and $47 million, for the quarters ended March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively. (b) TSS firmwide FX revenue includes FX revenue recorded in TSS and FX revenue associated with TSS customers who are FX customers of the IB. FX revenue associated with TSS customers who are FX customers of the IB was $154 million, $271 million, $196 million, $222 million, and $191 million, for the quarters ended March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively. These amounts are not included in TS and TSS firmwide revenue. (c) Firmwide liability balances include TS' liability balances recorded in the Commercial Banking line of business. (d) Reflects an internal reorganization for escrow products from Worldwide Securities Services to Treasury Services liability balances of $18.2 billion, $22.3 billion, $20.3 billion, $21.9 billion, and $21.5 billion, for the quarters ended March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively. (e) Overhead ratios have been calculated based upon firmwide revenue and TSS and TS expense, respectively, including those allocated to certain other lines of business. FX revenue and expense recorded in the IB for TSS-related FX activity are not included in this ratio. (f) International electronic funds transfer includes non-US$ ACH and clearing volume. (g) Wholesale cards issued include domestic commercial card, stored value card, prepaid card, and government electronic benefit card products. Page 23
  25. 25. JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS (in millions, except ratio, ranking and headcount data) QUARTERLY TRENDS 1Q09 Change 1Q09 INCOME STATEMENT REVENUE Asset management, administration and commissions All other income Noninterest revenue Net interest income TOTAL NET REVENUE $ Provision for credit losses 4Q08 1,231 69 1,300 403 1,703 $ 3Q08 1,362 (170) 1,192 466 1,658 $ 2Q08 1,538 43 1,581 380 1,961 $ 1Q08 1,573 130 1,703 361 2,064 $ 4Q08 1,531 59 1,590 311 1,901 33 32 20 17 16 NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE 800 479 19 1,298 689 504 20 1,213 816 525 21 1,362 886 494 20 1,400 Income before income tax expense Income tax expense NET INCOME 372 148 224 413 158 255 579 228 351 647 252 395 REVENUE BY CLIENT SEGMENT Private Bank (a) Institutional Private Wealth Management (a) Retail Bear Stearns Brokerage Total net revenue $ $ $ FINANCIAL RATIOS ROE Overhead ratio Pretax margin ratio (b) 583 460 312 253 95 1,703 $ $ $ 13 % 76 22 BUSINESS METRICS Number of: Client advisors Retirement planning services participants Bear Stearns brokers 630 327 330 265 106 1,658 $ $ $ 14 % 73 25 1,708 1,628,000 359 631 486 352 399 93 1,961 $ $ $ 25 % 69 30 1,705 1,531,000 324 708 472 356 490 38 2,064 (10) % NM 9 (14) 3 (20) % 17 (18) 30 (10) $ $ $ 3 106 825 477 21 1,323 31 % 68 31 1,684 1,492,000 323 1Q08 16 (5) (5) 7 (3) (10) (2) 562 206 356 (10) (6) (12) (34) (28) (37) 596 490 349 466 1,901 (7) 41 (5) (5) (10) 3 (2) (6) (11) (46) NM (10) 6 11 (2) 7 NM 29 % 70 30 1,717 1,505,000 326 1,744 1,519,000 - % of customer assets in 4 & 5 Star Funds (c) 42 % 42 % 39 % 40 % 49 % - (14) % of AUM in 1st and 2nd quartiles: (d) 1 year 3 years 5 years 54 % 62 % 66 % 54 % 65 % 76 % 49 % 67 % 77 % 51 % 70 % 76 % 52 % 73 % 75 % (5) (13) 4 (15) (12) SELECTED BALANCE SHEET DATA (Period-end) Equity SELECTED BALANCE SHEET DATA (Average) Total assets Loans Deposits Equity $ 7,000 $ 7,000 $ 7,000 $ 5,200 $ 5,000 - $ 58,227 34,585 81,749 7,000 $ 65,648 36,851 76,911 7,000 $ 71,189 39,750 65,621 5,500 $ 65,015 39,264 69,975 5,066 $ 60,286 36,628 68,184 5,000 (11) (6) 6 - (3) (6) 20 40 14,955 (1) 1 Headcount CREDIT DATA AND QUALITY STATISTICS Net charge-offs (recoveries) Nonperforming loans Allowance for loan losses Allowance for lending-related commitments Net charge-off (recovery) rate Allowance for loan losses to average loans Allowance for loan losses to nonperforming loans Nonperforming loans to average loans (a) (b) (c) (d) 15,109 $ 19 301 215 4 0.22 % 0.62 71 0.87 15,339 $ 12 147 191 5 0.13 % 0.52 130 0.40 15,493 $ (1) 121 170 5 (0.01) % 0.43 140 0.30 15,840 $ 2 68 147 5 0.02 % 0.37 216 0.17 $ (2) 11 130 6 58 105 13 (20) 40 NM NM 65 (33) (0.02) % 0.35 1,182 0.03 In the third quarter of 2008, certain clients were transferred from Private Bank to Private Wealth Management. Prior periods have been revised to conform with this change. Pretax margin represents income before income tax expense divided by total net revenue, which is a measure of pretax performance and another basis by which management evaluates its performance and that of its competitors. Derived from the following rating services: Morningstar for the United States; Micropal for the United Kingdom, Luxembourg, Hong Kong and Taiwan; and Nomura for Japan. Derived from the following rating services: Lipper for the United States and Taiwan; Micropal for the United Kingdom, Luxembourg and Hong Kong; and Nomura for Japan. Page 24
  26. 26. JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS, CONTINUED (in billions) Mar 31 2009 Assets by asset class Liquidity Fixed income Equities & balanced Alternatives TOTAL ASSETS UNDER MANAGEMENT Custody / brokerage / administration / deposits TOTAL ASSETS UNDER SUPERVISION Assets by client segment Institutional Private Bank (a) Retail Private Wealth Management (a) Bear Stearns Brokerage TOTAL ASSETS UNDER MANAGEMENT Institutional Private Bank (a) Retail Private Wealth Management (a) Bear Stearns Brokerage TOTAL ASSETS UNDER SUPERVISION Assets by geographic region U.S. / Canada International TOTAL ASSETS UNDER MANAGEMENT U.S. / Canada International TOTAL ASSETS UNDER SUPERVISION Mutual fund assets by asset class Liquidity Fixed income Equities TOTAL MUTUAL FUND ASSETS $ $ $ $ $ $ $ $ $ $ $ $ Dec 31 2008 625 180 215 95 1,115 349 1,464 $ 668 181 184 68 14 1,115 $ $ $ 669 375 250 120 50 1,464 $ 789 326 1,115 $ $ $ 1,066 398 1,464 $ 570 42 93 705 $ $ $ Sep 30 2008 613 180 240 100 1,133 363 1,496 $ 681 181 194 71 6 1,133 $ $ $ 682 378 262 124 50 1,496 $ 798 335 1,133 $ $ $ 1,084 412 1,496 $ 553 41 99 693 $ $ $ Jun 30 2008 524 189 308 132 1,153 409 1,562 $ 653 194 223 75 8 1,153 $ $ $ 653 417 303 134 55 1,562 $ 785 368 1,153 $ $ $ 1,100 462 1,562 $ 470 44 134 648 $ $ $ Mar 31, 2009 Change Dec 31 Mar 31 2008 2008 Mar 31 2008 478 199 378 130 1,185 426 1,611 $ 645 181 276 75 8 1,185 $ $ $ 646 415 357 133 60 1,611 $ 771 414 1,185 $ $ $ 1,093 518 1,611 $ 416 47 179 642 $ $ $ 471 200 390 126 1,187 382 1,569 2 % (10) (5) (2) (4) (2) 33 % (10) (45) (25) (6) (9) (7) 652 179 279 77 1,187 (2) (5) (4) 133 (2) 2 1 (34) (12) NM (6) 652 412 366 139 1,569 (2) (1) (5) (3) (2) 3 (9) (32) (14) NM (7) 773 414 1,187 (1) (3) (2) 2 (21) (6) 1,063 506 1,569 (2) (3) (2) (21) (7) 405 45 186 636 3 2 (6) 2 41 (7) (50) 11 (a) In the third quarter of 2008, certain clients were transferred from Private Bank to Private Wealth Management. Prior periods have been revised to conform with this change. Page 25
  27. 27. JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS, CONTINUED (in billions) QUARTERLY TRENDS 1Q09 ASSETS UNDER SUPERVISION (continued) Assets under management rollforward Beginning balance Net asset flows: Liquidity Fixed income Equities, balanced & alternative Market / performance / other impacts (a) TOTAL ASSETS UNDER MANAGEMENT Assets under supervision rollforward Beginning balance Net asset flows Market / performance / other impacts (a) TOTAL ASSETS UNDER SUPERVISION $ 1,133 $ 19 1 (5) (33) 1,115 $ $ 1,496 25 (57) 1,464 4Q08 $ 1,153 $ 86 (7) (18) (81) 1,133 $ $ 1,562 73 (139) 1,496 3Q08 $ 1,185 $ 55 (4) (5) (78) 1,153 $ $ 1,611 61 (110) 1,562 2Q08 $ 1,187 $ 1 (1) (3) 1 1,185 $ $ 1,569 (5) 47 1,611 1Q08 $ 1,193 $ 68 (21) (53) 1,187 $ $ 1,572 52 (55) 1,569 (a) Second quarter 2008 reflects $15 billion for assets under management and $68 billion for assets under supervision from the Bear Stearns merger on May 30, 2008. Page 26
  28. 28. JPMORGAN CHASE & CO. CORPORATE/PRIVATE EQUITY FINANCIAL HIGHLIGHTS (in millions, except headcount data) QUARTERLY TRENDS 1Q09 Change 1Q09 INCOME STATEMENT REVENUE Principal transactions Securities gains All other income (a) Noninterest revenue Net interest income (expense) TOTAL NET REVENUE $ Provision for credit losses (b) MEMO: TOTAL NET REVENUE Private equity Corporate TOTAL NET REVENUE NET INCOME (LOSS) Private equity Corporate Merger-related items (e) TOTAL NET INCOME (LOSS) Headcount (1,493) 214 (19) (1,298) 989 (309) $ - NONINTEREST EXPENSE Compensation expense Noncompensation expense (c) Merger costs Subtotal Net expense allocated to other businesses TOTAL NONINTEREST EXPENSE Income (loss) before income tax expense and extraordinary gain Income tax expense (benefit) Income (loss) before extraordinary gain Extraordinary gain (d) NET INCOME (LOSS) 4Q08 $ $ $ $ $ $ (1,876) 440 (275) (1,711) (125) (1,836) 2Q08 $ 1,977 1Q08 (97) 656 (378) 181 (47) 134 $ $ (280) 252 (234) (262) $ $ $ $ 652 563 96 1,311 (1,150) 161 (3,974) (1,613) (2,361) 581 (1,780) (288) 31 (319) (319) $ (1,107) 1,539 432 $ (682) 1,163 1,064 1,545 $ 23,376 $ $ $ (216) (1,620) (1,836) $ (164) (881) (735) (1,780) $ 24,967 $ $ $ 197 (63) 134 $ 99 122 (540) (319) $ 22,317 1Q08 $ $ 5 42 1,641 1,688 (349) 1,339 8 % (57) NM (198) 14 NM NM % 410 NM NM NM NM NM - 639 (84) 555 (1,057) (502) 611 689 155 1,455 (1,070) 385 537 317 220 1,325 1,545 4Q08 - 37 438 673 181 1,292 (1,364) (72) (449) 140 (309) 22,339 (1,620) 499 685 (436) 868 432 (33) 641 345 205 1,191 (1,279) (88) (221) 41 (262) (262) 3Q08 46 (49) 13 (8) 6 (22) 1,841 730 1,111 1,111 NM (87) NM NM NM NM NM 115 (21) 82 NM (94) NM NM 163 1,176 1,339 59 (91) NM NM (88) NM 57 1,054 1,111 59 (78) NM NM NM (76) NM NM 21,769 (4) 3 (a) Included the following significant items: a gain of $1.0 billion from the dissolution of the Chase Paymentech Solutions joint venture in the fourth quarter of 2008, a charge of $375 million for the repurchase of auction rate securities in the third quarter of 2008, $423 million representing the Firm's share of Bear Stearns' losses from April 8 to May 30, 2008, in the second quarter of 2008, and proceeds of $1.5 billion from the sale of Visa shares in its initial public offering in the first quarter of 2008. (b) The fourth and third quarters of 2008 included accounting conformity loan loss reserve provisions related to the acquisition of Washington Mutual Bank's banking operations. An analysis of loans acquired in the transaction was substantially completed during the fourth quarter. This resulted in an increase in the credit-impaired loan balances, a corresponding reduction in the non-credit-impaired portfolio and a reduction in the estimate of incurred losses related to the non-credit-impaired portfolio requiring a reduction in the accounting conformity provision for these loans. Also in the fourth quarter was a provision for credit losses related to the transfer of higher quality credit card loans from the legacy Chase portfolio to a securitization trust previously established by Washington Mutual. (c) Included a release of credit card litigation reserves in the first quarter of 2008. (d) On September 25, 2008, JPMorgan Chase acquired the banking operations of Washington Mutual Bank from the Federal Deposit Insurance Corporation for $1.9 billion. The fair value of the net assets acquired exceeded the purchase price which resulted in negative goodwill. In accordance with SFAS 141, noncurrent nonfinancial assets that are not held-for-sale were written down against that negative goodwill. The negative goodwill remaining of $581 million after writing down nonfinancial assets was recognized as an extraordinary gain in the third quarter of 2008. As a result of refining the purchase price allocation during the fourth quarter of 2008, an additional gain of $1.3 billion was recognized. (e) Included accounting conformity loan loss reserve provisions, extraordinary gains and merger costs related to the Washington Mutual transaction, as well as items related to the Bear Stearns merger, including Bear Stearns' losses, merger costs, Bear Stearns asset management liquidation costs and Bear Stearns private client services broker retention expense. Page 27
  29. 29. JPMORGAN CHASE & CO. CORPORATE/PRIVATE EQUITY FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data) QUARTERLY TRENDS 1Q09 Change 1Q09 4Q08 3Q08 2Q08 1Q08 4Q08 1Q08 SUPPLEMENTAL TREASURY Securities gains (a) Investment securities portfolio (average) (b) Investment securities portfolio (ending) (b) Mortgage loans (average) Mortgage loans (ending) PRIVATE EQUITY Private equity gains (losses) Direct investments Realized gains Unrealized gains (losses) (c) Total direct investments Third-party fund investments Total private equity gains (losses) (d) Private equity portfolio information Direct investments Publicly-held securities Carrying value Cost Quoted public value Privately-held direct securities Carrying value Cost Third-party fund investments Carrying value Cost $ $ $ $ 214 218,961 246,697 7,210 7,162 $ 15 (409) (394) (68) (462) $ 305 778 346 $ $ 512 143,160 166,662 7,277 7,292 24 (1,000) (976) (121) (1,097) 483 792 543 $ $ $ $ 442 105,984 115,703 7,221 7,297 $ 40 (273) (233) 27 (206) $ 600 705 657 $ $ 656 97,223 103,751 7,004 7,150 $ 540 (326) 214 6 220 $ 615 665 732 $ $ 42 80,443 91,323 6,730 6,847 (58) % 53 48 (1) (2) 410 % 172 170 7 5 1,113 (881) 232 (43) 189 (38) 59 60 44 58 (99) 54 NM (58) NM 603 499 720 (37) (2) (36) (49) 56 (52) 4,708 5,519 5,564 6,296 6,038 6,058 6,270 6,113 5,191 4,973 (15) (12) (9) 11 1,537 2,082 805 1,169 889 1,121 838 1,094 811 1,064 91 78 90 96 Total private equity portfolio - Carrying value $ 6,550 $ 6,852 $ 7,527 $ 7,723 $ 6,605 (4) (1) Total private equity portfolio - Cost $ 8,379 $ 8,257 $ 7,884 $ 7,872 $ 6,536 1 28 (a) Included a $668 million gain on the sale of MasterCard shares in the second quarter of 2008. All periods reflect repositioning of the Corporate investment securities portfolio and exclude gains/losses on securities used to manage risk associated with MSRs. (b) Includes Chief Investment Office investment securities only. (c) Unrealized gains (losses) contain reversals of unrealized gains and losses that were recognized in prior periods and have now been realized. (d) Included in principal transactions revenue in the Consolidated Statements of Income. Page 28
  30. 30. JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION (in millions) Mar 31, 2009 Change Mar 31 2009 CREDIT EXPOSURE WHOLESALE (a) Loans - U.S. Loans - Non-U.S. TOTAL WHOLESALE LOANS - REPORTED (b) $ CONSUMER (c) Home loan portfolio - excluding purchased credit-impaired loans: Home equity Prime mortgage Subprime mortgage Option ARMs Total home loan portfolio - excluding purchased credit-impaired loans Home loan portfolio - purchased credit-impaired loans: (d) Home equity Prime mortgage Subprime mortgage Option ARMs Total home loan portfolio - purchased credit-impaired loans Other consumer: Auto Credit card - reported Other loans Loans held-for-sale (e) TOTAL CONSUMER LOANS - REPORTED TOTAL LOANS - REPORTED Credit card - securitized TOTAL LOANS - MANAGED Derivative receivables Receivables from customers (f) TOTAL CREDIT-RELATED ASSETS Wholesale lending-related commitments TOTAL Memo: Total by category Total wholesale exposure (g) Total consumer managed loans (h) Total 176,282 66,002 242,284 Dec 31 2008 $ 186,776 75,268 262,044 Sep 30 2008 $ 202,170 86,275 288,445 Jun 30 2008 $ Mar 31 2008 137,236 92,123 229,359 111,781 71,731 14,594 8,940 207,046 28,555 21,855 6,760 31,643 88,813 26,507 24,672 3,863 22,653 77,695 43,065 90,911 33,700 3,665 465,959 $ 116,804 70,243 18,162 18,989 224,198 28,366 21,398 6,565 31,243 87,572 $ 114,335 72,266 15,330 9,018 210,949 42,603 104,746 33,715 2,028 482,854 43,306 92,881 33,252 1,604 472,936 44,867 76,278 29,187 2,196 308,670 708,243 85,220 793,463 131,247 14,504 939,214 363,013 1,302,227 744,898 85,571 830,469 162,626 16,141 1,009,236 379,871 1,389,107 761,381 93,664 855,045 118,648 25,422 999,115 407,823 1,406,938 538,029 79,120 617,149 122,389 26,572 766,110 430,028 1,196,138 $ $ $ 95,129 46,221 14,792 156,142 141,921 89,376 231,297 94,968 44,705 15,775 155,448 Mar 31 2008 (6) % (12) (8) 24 % (26) 5 (2) (1) (5) (1) (2) 18 60 (7) NM 33 (1) (2) (3) (1) (1) NM NM NM NM NM 44,714 75,888 25,175 4,534 305,759 - $ Dec 31 2008 1 (13) 81 (3) (4) 20 34 (19) 52 537,056 75,062 612,118 99,110 711,228 438,392 1,149,620 (5) (4) (19) (10) (7) (4) (6) 32 14 30 32 NM 32 (17) 13 - $ 751,048 551,179 1,302,227 $ $ 808,348 387,790 1,196,138 $ $ 840,338 566,600 1,406,938 $ $ 820,682 568,425 1,389,107 $ $ $ 768,799 380,821 1,149,620 (8) (3) (6) (2) 45 13 $ 546,968 $ 605,210 $ 620,524 $ 595,043 $ 590,439 (10) (7) 147,771 9,570 742 158,083 (7) 12 35 (4) 165 NM 12 20,277 768,799 (16) (10) (8) (42) NM (2) Risk profile of wholesale credit exposure: Investment-grade (i) Noninvestment-grade: (i) Noncriticized Criticized performing Criticized nonperforming Total noninvestment-grade Loans held-for-sale & loans at fair value Receivables from customers (f) Total wholesale exposure (a) (b) (c) (d) (e) (f) (g) (h) (i) 147,891 25,320 4,615 177,826 $ 11,750 14,504 751,048 159,379 22,568 3,429 185,376 $ 13,955 16,141 820,682 161,503 14,491 1,418 177,412 $ 16,980 25,422 840,338 154,218 11,611 899 166,728 $ 20,005 26,572 808,348 $ Includes Investment Bank, Commercial Banking, Treasury & Securities Services and Asset Management. Includes loans held-for-sale and loans at fair value. Includes Retail Financial Services, Card Services and residential mortgage loans reported in the Corporate/Private Equity segment to be risk managed by the Chief Investment Office. Purchased credit-impaired loans represent loans acquired in the Washington Mutual transaction for which a deterioration in credit quality occurred between the origination date and JPMorgan Chase's acquisition date. Under SOP 03-3, these loans were initially recorded at fair value and accrete interest income over the estimated life of the loan when cash flows are reasonably estimable even if the underlying loans are contractually past due. As of September 30, 2008, an analysis of the acquired portfolio was conducted in order to preliminarily identify loans meeting the SOP 03-3 impairment criteria. This analysis was completed during the fourth quarter of 2008, resulting in the reclassification of $12.4 billion of acquired loans from the non-credit-impaired loan balances into the credit-impaired loan balances. Includes loans for prime mortgage of $825 million, $206 million, $132 million, $964 million, and $375 million at March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively, and other (largely student loans) of $2.8 billion, $1.8 billion, $1.5 billion, $1.2 billion, and $4.2 billion at March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively. Represents margin loans to prime and retail brokerage customers, which are included in accrued interest and accounts receivable on the Consolidated Balance Sheets. Primarily represents total wholesale loans, derivative receivables, wholesale lending-related commitments and receivables from customers. Represents total consumer loans plus credit card securitizations, and excludes consumer lending-related commitments. Excludes loans held-for-sale and loans at fair value. Note: The risk profile is based on JPMorgan Chase's internal risk ratings, which generally correspond to the following ratings as defined by Standard & Poor's / Moody's: Investment-Grade: AAA / Aaa to BBB- / Baa3 Noninvestment-Grade: BB+ / Ba1 and below Page 29
  31. 31. JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions, except ratio data) Mar 31 2009 NONPERFORMING ASSETS AND RATIOS WHOLESALE LOANS (a) Loans - U.S. Loans - Non-U.S. TOTAL WHOLESALE LOANS $ CONSUMER LOANS (b) Home loan portfolio (includes RFS and Corporate/Private Equity): Home equity (c) Prime mortgage Subprime mortgage (c) Option ARMs Total home loan portfolio Auto loans Credit card - reported Other loans TOTAL CONSUMER LOANS (d) (e) 3,040 622 3,662 Dec 31 2008 $ Sep 30 2008 2,123 259 2,382 $ Jun 30 2008 1,185 220 1,405 $ Mar 31, 2009 Change Dec 31 Mar 31 2008 2008 Mar 31 2008 806 64 870 $ 761 20 781 43 % 140 54 299 % NM 369 1,591 2,712 2,545 97 6,945 165 4 625 7,739 1,394 1,895 2,690 10 5,989 148 4 430 6,571 1,142 1,496 2,384 5,022 119 5 382 5,528 1,008 1,232 1,715 3,955 102 6 340 4,403 924 860 1,401 3,185 94 6 335 3,620 14 43 (5) NM 16 11 45 18 72 215 82 NM 118 76 (33) 87 114 TOTAL NONPERFORMING LOANS REPORTED (c) 11,401 8,953 6,933 5,273 4,401 27 159 Derivative receivables Assets acquired in loan satisfactions TOTAL NONPERFORMING ASSETS 1,010 2,243 14,654 1,079 2,682 12,714 45 2,542 9,520 80 880 6,233 31 711 5,143 (6) (16) 15 NM 215 185 22 8 45 85 13 15 NM 127 (33) 264 NM NM NM 185 $ TOTAL NONPERFORMING LOANS TO TOTAL LOANS REPORTED NONPERFORMING ASSETS BY LOB Investment Bank Retail Financial Services (c) (e) Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity (f) TOTAL $ 1.61 % $ $ 3,041 9,582 4 1,651 30 319 27 14,654 1.20 $ $ 2,501 8,841 4 1,142 30 172 24 12,714 $ % 0.91 $ $ 583 7,878 5 923 121 10 9,520 $ % 0.98 $ $ 490 5,153 6 510 68 6 6,233 $ % 0.82 $ $ 439 4,230 6 453 11 4 5,143 % (a) Included nonperforming loans held-for-sale and loans at fair value of $57 million, $32 million, $32 million, $51 million, and $70 million at March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively. Excluded purchased held-for-sale wholesale loans. (b) There were no nonperforming loans held-for-sale at March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008. (c) During the second quarter of 2008, the policy for classifying subprime mortgage and home equity loans as nonperforming was changed to conform to all other home lending products. Prior period nonperforming loans and assets have been revised to reflect this change. (d) Nonperforming loans and assets excluded (1) loans eligible for repurchase as well as loans repurchased from GNMA pools that are insured by U.S. government agencies of $4.6 billion, $3.3 billion, $1.8 billion, $1.9 billion, and $1.8 billion, at March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively, and (2) student loans that are 90 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program of $433 million, $437 million, $405 million, $394 million, and $418 million, at March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008, and March 31, 2008, respectively. These amounts for GNMA and student loans are excluded, as reimbursement is proceeding normally. (e) Excludes purchased credit-impaired loans accounted for under SOP 03-3 that were acquired as part of the Washington Mutual transaction. These loans are accounted for on a pool basis and the pools are considered to be performing under SOP 03-3. (f) Predominantly relates to held-for-investment prime mortgage. Page 30

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