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1 q2010 supplement

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    1 q2010 supplement 1 q2010 supplement Presentation Transcript

    • EARNINGS RELEASE FINANCIAL SUPPLEMENT FIRST QUARTER 2010
    • 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 18 21 23 25 28 Credit-Related Information 30 Market Risk-Related Information 35 Supplemental Detail Capital, Intangible Assets and Deposits Per Share-Related Information 36 37 Non-GAAP Financial Measures 38 Glossary of Terms 39 Page 1
    • JPMORGAN CHASE & CO. CONSOLIDATED FINANCIAL HIGHLIGHTS (in millions, except per share, ratio and headcount data) QUARTERLY TRENDS 1Q10 Change SELECTED INCOME STATEMENT DATA: Reported Basis Total net revenue Total noninterest expense Preprovision profit (a) Provision for credit losses Income before extraordinary gain Extraordinary gain NET INCOME Managed Basis (b) Total net revenue Total noninterest expense Preprovision profit (a) Provision for credit losses Income before extraordinary gain Extraordinary gain NET INCOME 1Q10 (d) (c) (e) (f) (g) (h) 1Q09 4Q09 1Q09 $ 23,164 12,004 11,160 7,284 3,278 3,278 $ 26,622 13,455 13,167 8,104 3,512 76 3,588 $ 25,623 13,520 12,103 8,031 2,721 2,721 $ 25,025 13,373 11,652 8,596 2,141 2,141 19 34 3 (4) 1 1 $ 28,172 16,124 12,048 7,010 3,326 3,326 $ 25,236 12,004 13,232 8,901 3,278 3,278 $ 28,780 13,455 15,325 9,802 3,512 76 3,588 $ 27,709 13,520 14,189 9,695 2,721 2,721 $ 26,922 13,373 13,549 10,060 2,141 2,141 12 34 (9) (21) 1 1 0.75 0.75 0.75 0.75 0.80 0.82 0.28 0.28 0.40 0.40 0.74 0.74 0.05 39.38 44.75 177,897 0.74 0.74 0.05 39.88 41.67 164,261 0.80 0.82 0.05 39.12 43.82 172,596 0.28 0.28 0.05 37.36 34.11 133,852 3,994.7 3,975.4 3,974.1 3,942.0 3,962.0 3,938.7 3,824.1 3,924.1 8 12 0.66 % 8 12 0.65 8 12 0.66 11.5 15.1 9.1 $ Headcount (a) (b) (c) 2Q09 27,671 16,124 11,547 7,010 3,326 3,326 FINANCIAL RATIOS: (d) Income before extraordinary gain: Return on common equity ("ROE") (c) Return on tangible common equity ("ROTCE") (c)(e) Return on assets ("ROA") Net income: ROE (c) ROTCE (c)(e) ROA CAPITAL RATIOS: Tier 1 capital ratio Total capital ratio Tier 1 common capital ratio (f) 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 3Q09 $ PER COMMON SHARE: Basic Earnings Income before extraordinary gain Net income Diluted Earnings (c) Income before extraordinary gain Net income Cash dividends declared Book value Closing share price Market capitalization COMMON SHARES OUTSTANDING: Weighted-average diluted shares outstanding Common shares outstanding at period-end SELECTED BALANCE SHEET DATA (Period-end) Total assets Wholesale loans Consumer loans Deposits Common stockholders' equity Total stockholders' equity 4Q09 2,135,796 214,290 499,509 925,303 156,569 164,721 $ 2,471 (131) (303) 390 279 392 228 3,326 9 13 0.70 % 3 5 0.54 (h) $ (h) (h) (h) (h) (1) 7 8 85 85 7 68 78 3,758.7 3,757.7 1 1 6 6 5 5 16 (1) - 3 (12) 7 2 13 (3) 2 3 5 8 0.42 9 14 0.71 3 5 0.54 10.2 13.9 8.2 9.7 13.3 7.7 $ % 5 8 0.42 11.4 15.2 7.3 2,031,989 204,175 429,283 938,367 157,213 165,365 $ 222,316 $ 5 21 (11) (30) 55 55 0.40 0.40 0.05 36.78 26.58 99,881 % % 88 88 11.1 14.8 8.8 (g) (g) (g) 11 21 (1) (18) 55 55 - 8 12 0.65 226,623 $ % % 1,901 (399) (306) 224 237 424 1,197 3,278 2,041,009 218,953 434,191 867,977 154,101 162,253 $ 220,861 $ $ 1,921 7 (700) 341 302 430 1,287 3,588 2,026,642 231,625 448,976 866,477 146,614 154,766 $ 220,255 $ $ 1,471 15 (672) 368 379 352 808 2,721 2,079,188 242,284 465,959 906,969 138,201 170,194 219,569 $ $ 1,606 474 (547) 338 308 224 (262) 2,141 30 67 1 74 18 (8) (81) 1 54 NM 45 15 (9) 75 NM 55 Preprovision profit is total net revenue less noninterest expense. The Firm believes that this financial measure is useful in assessing the ability of a lending institution to generate income in excess of its provision for credit losses. For further discussion of managed basis, see Reconciliation from reported to managed summary on page 6. The calculation of the second quarter 2009 earnings per share and net income applicable to common equity includes a one-time, noncash reduction of $1.1 billion, or $0.27 per share, resulting from repayment of Troubled Asset Relief Program (“TARP”) preferred capital. Excluding this reduction, the adjusted ROE and ROTCE for the second quarter 2009 would have been 6% and 10%, respectively. The Firm views the adjusted ROE and ROTCE, both non-GAAP financial measures, as meaningful because they enable the comparability to prior periods. Quarterly ratios of second quarter 2009 earnings per share includes a one-time, non-cash reduction of $1.1 billion, or $0.27 per share, resulting from repayment of TARP preferred capital. The calculationare based upon annualized amounts. Net income applicable to common equity divided by total average 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. The Firm uses return on tangible common equity, a non-GAAP financial measure, to evaluate the Firm's use of equity and to facilitate comparisons with competitors. The Tier 1 common ratio is Tier 1 common capital divided by risk-weighted assets. Tier 1 common capital (“Tier 1 Common”) is defined as Tier 1 capital less elements of capital not in the form of common equity – such as perpetual preferred stock, noncontrolling interest in subsidiaries and trust preferred capital debt securities. Tier 1 common capital, a non-GAAP financial measure, is used by banking regulators, investors and analysts to assess and compare the quality and composition of the Firm’s capital with the capital of other financial services companies. The Firm uses Tier 1 common capital along with the other capital measures to assess and monitor its capital position. Estimated. Effective January 1, 2010, the Firm adopted new FASB guidance which amended the accounting for the transfer of financial assets and the consolidation of VIEs. Upon adoption of the new guidance, the Firm consolidated its Firm-sponsored credit card securitization trusts, Firm-administered multi-seller conduits and certain other consumer loan securitization entities, primarily mortgage-related, adding $87.6 billion and $92.1 billion of assets and liabilities, respectively, and decreasing stockholders' equity by $4.5 billion. Page 2
    • JPMORGAN CHASE & CO. STATEMENTS OF INCOME (in millions, except per share and ratio data) QUARTERLY TRENDS 1Q10 Change REVENUE Investment banking fees Principal transactions Lending- and 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 TOTAL NET REVENUE Provision for credit losses NONINTEREST EXPENSE Compensation expense Occupancy expense Technology, communications and equipment expense Professional and outside services Marketing Other expense (a) Amortization of intangibles Merger costs TOTAL NONINTEREST EXPENSE Income before income tax expense and extraordinary gain Income tax expense (b) Income before extraordinary gain Extraordinary gain (c) NET INCOME DILUTED EARNINGS PER SHARE Income before extraordinary gain (d) Extraordinary gain NET INCOME (d) FINANCIAL RATIOS Income before extraordinary gain: ROE (d) ROTCE (d) ROA Net income: ROE (d) ROTCE (d) ROA Effective income tax rate Overhead ratio EXCLUDING IMPACT OF MERGER COSTS (e) Income before extraordinary gain Merger costs (after-tax) Income before extra. gain excl. merger costs Diluted Per Share: Income before extraordinary gain (d) Merger costs (after-tax) Income before extra. gain excl. merger costs (d) (a) (b) (c) (d) (e) $ 1Q10 1,461 4,548 1,646 3,265 610 658 1,361 412 13,961 16,845 3,135 13,710 27,671 7,010 $ 4Q09 1,916 838 1,765 3,361 381 450 1,844 231 10,786 15,615 3,237 12,378 23,164 7,284 $ 3Q09 1,679 3,860 1,826 3,158 184 843 1,710 625 13,885 16,260 3,523 12,737 26,622 8,104 $ 2Q09 2,106 3,097 1,766 3,124 347 784 1,719 10 12,953 16,549 3,879 12,670 25,623 8,031 $ 1Q09 1,386 2,001 1,688 2,897 198 1,601 1,837 50 11,658 17,926 4,559 13,367 25,025 8,596 4Q09 1Q09 (24) % 443 (7) (3) 60 46 (26) 78 29 8 (3) 11 19 (4) 5 % 127 (2) 13 208 (59) (26) NM 20 (6) (31) 3 11 (18) 7,276 869 1,137 1,575 583 4,441 243 16,124 $ $ $ 5,112 944 1,182 1,682 536 2,262 256 30 12,004 7,311 923 1,140 1,517 440 1,767 254 103 13,455 6,917 914 1,156 1,518 417 2,190 265 143 13,520 7,588 885 1,146 1,515 384 1,375 275 205 13,373 42 (8) (4) (6) 9 96 (5) NM 34 (4) (2) (1) 4 52 223 (12) NM 21 4,537 1,211 3,326 3,326 3,876 598 3,278 3,278 5,063 1,551 3,512 76 3,588 4,072 1,351 2,721 2,721 3,056 915 2,141 2,141 17 103 1 1 48 32 55 55 0.40 0.40 - 85 85 2,141 127 2,268 1 NM 1 55 NM 47 0.40 0.03 0.43 NM (1) 85 NM 72 $ 0.74 0.74 8 12 0.66 $ $ % $ $ $ $ 3,326 3,326 0.74 0.74 0.74 0.74 8 12 0.65 8 12 0.66 27 58 $ $ $ % $ $ $ $ 3,278 18 3,296 0.74 0.01 0.75 0.80 0.02 0.82 9 13 0.70 8 12 0.65 15 52 $ $ $ % $ $ $ $ 3,512 64 3,576 0.80 0.02 0.82 0.28 0.28 3 5 0.54 9 14 0.71 31 51 $ $ $ % 5 % 8 0.42 3 5 0.54 33 53 $ $ $ $ 2,721 89 2,810 0.28 0.02 0.30 5 8 0.42 30 53 $ $ $ $ The second quarter of 2009 included a $675 million FDIC special assessment. The income tax expense in the first quarter of 2010 and fourth quarter of 2009 includes tax benefits recognized upon the resolution of tax audits. On September 25, 2008, JPMorgan Chase acquired the banking operations of Washington Mutual. The acquisition resulted in negative goodwill, and accordingly, the Firm recognized an extraordinary gain. A preliminary gain of $1.9 billion was recognized at December 31, 2008. The final total extraordinary gain that resulted from the Washington Mutual transaction was $2.0 billion. The calculation of the second quarter 2009 earnings per share and net income applicable to common equity includes a one-time, noncash reduction of $1.1 billion, or $0.27 per share, resulting from repayment of TARP preferred capital. Excluding this reduction, the adjusted ROE and ROTCE for the second quarter of 2009 would have been 6% and 10%, respectively. The Firm views the adjusted ROE and ROTCE, both non-GAAP financial measures, as meaningful because they enable the comparability to prior periods. Page 3 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.
    • JPMORGAN CHASE & CO. CONSOLIDATED BALANCE SHEETS (in millions) Mar 31 2010 ASSETS (a) 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 Less: Allowance for loan losses Loans, net of allowance for loan losses Accrued interest and accounts receivable Premises and equipment Goodwill Mortgage servicing rights Other intangible assets Other assets TOTAL ASSETS LIABILITIES (a) Deposits Federal funds purchased and securities loaned or sold under repurchase agreements Commercial paper Other borrowed funds Trading liabilities: Debt and equity instruments Derivative payables Accounts payable and other liabilities (incl. the allowance for lending-related commitments) Beneficial interests issued by consolidated VIEs Long-term debt TOTAL LIABILITIES $ $ 26,206 63,230 Sep 30 2009 $ 21,068 59,623 Jun 30 2009 $ 25,133 61,882 Mar 31 2009 $ 26,681 89,865 230,123 126,741 195,404 119,630 171,007 128,059 159,170 129,263 157,237 127,928 $ 346,712 79,416 344,376 713,799 38,186 675,613 53,991 11,123 48,359 15,531 4,383 108,992 2,135,796 $ 330,918 80,210 360,390 633,458 31,602 601,856 67,427 11,118 48,357 15,531 4,621 107,091 2,031,989 $ 330,370 94,065 372,867 653,144 30,633 622,511 59,948 10,675 48,334 13,663 4,862 103,957 2,041,009 $ 298,135 97,491 345,563 680,601 29,072 651,529 61,302 10,668 48,288 14,600 5,082 118,536 2,026,642 $ 925,303 $ 938,367 $ 867,977 $ 866,477 STOCKHOLDERS' EQUITY (a) 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 $ (a) 31,422 59,014 Dec 31 2009 March 31, 2010 Change Dec 31 Mar 31 2009 2009 20 % (7) 18 % (34) 18 6 46 (1) $ 298,453 131,247 333,861 708,243 27,381 680,862 52,168 10,336 48,201 10,634 5,349 106,366 2,079,188 5 (1) (4) 13 21 12 (20) (5) 2 5 16 (39) 3 1 39 (1) 3 8 46 (18) 2 3 $ 906,969 (1) 2 295,171 50,554 48,981 261,413 41,794 55,740 310,219 53,920 50,824 300,931 42,713 73,968 279,837 33,085 112,257 13 21 (12) 5 53 (56) 78,228 62,741 64,946 60,125 65,233 69,214 56,021 67,197 53,786 86,020 20 4 45 (27) 154,185 93,055 262,857 1,971,075 162,696 15,225 266,318 1,866,624 171,386 17,859 272,124 1,878,756 171,685 20,945 271,939 1,871,876 165,521 9,674 261,845 1,908,994 (5) NM (1) 6 (7) NM 3 8,152 4,105 96,450 61,043 761 (68) (5,722) 164,721 2,135,796 8,152 4,105 97,982 62,481 (91) (68) (7,196) 165,365 2,031,989 8,152 4,105 97,564 59,573 283 (86) (7,338) 162,253 2,041,009 8,152 4,105 97,662 56,355 (3,438) (86) (7,984) 154,766 2,026,642 31,993 3,942 91,469 55,487 (4,490) (86) (8,121) 170,194 2,079,188 (2) (2) NM 20 5 (75) 4 5 10 NM 21 30 (3) 3 $ $ $ $ Effective January 1, 2010, the Firm adopted new FASB guidance which amended the accounting for the transfer of financial assets and the consolidation of VIEs. Upon adoption of the new guidance, the Firm consolidated its credit card securitization trusts, Firm-administered multi-seller conduits and certain mortgage and other consumer loan securitization entities; adding $87.6 billion and $92.1 billion of assets and liabilities, respectively, and decreasing stockholders' equity by $4.5 billion, driven predominantly by the establishment of an allowance for loan losses of $7.4 billion (pre-tax) related to the receivables held in the credit card securitization trusts that were consolidated at the adoption date. Page 4
    • JPMORGAN CHASE & CO. CONDENSED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS (in millions, except rates) QUARTERLY TRENDS 1Q10 Change AVERAGE BALANCES (a) ASSETS Deposits with banks Federal funds sold and securities purchased under resale agreements Securities borrowed Trading assets - debt instruments Securities Loans Other assets (b) Total interest-earning assets Trading assets - equity instruments Trading assets - derivative receivables Goodwill 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 (c) Beneficial interests issued by consolidated VIEs Long-term debt Total interest-bearing liabilities Trading liabilities - derivative payables All other noninterest-bearing liabilities TOTAL LIABILITIES Preferred stock Common stockholders' equity TOTAL STOCKHOLDERS' EQUITY TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 1Q10 4Q09 $ 64,229 $ 49,705 $ $ 170,036 114,636 248,089 337,441 725,136 27,885 1,687,452 83,674 78,683 48,542 19,462 120,867 2,038,680 $ 677,431 $ 62,248 156,848 125,453 256,414 374,327 642,406 29,868 1,635,021 74,936 86,415 48,341 18,509 130,003 1,993,225 $ 667,269 271,934 37,461 188,475 98,104 262,503 1,535,908 59,053 279,473 1,874,434 8,152 156,094 164,246 $ $ (0.05) (d) 0.19 1.54 1.36 1.95 0.83 INTEREST RATE SPREAD NET YIELD ON INTEREST-EARNING ASSETS NET YIELD ON INTEREST-EARNING ASSETS ADJUSTED FOR SECURITIZATIONS (a) % 68,001 $ 151,705 129,301 250,148 359,451 665,386 24,155 1,642,394 66,790 99,807 48,328 19,368 122,489 1,999,176 $ 660,998 $ % 88,587 $ 142,226 122,235 245,444 354,216 697,908 36,638 1,666,668 63,507 114,096 48,273 17,474 128,354 2,038,372 $ 160,986 120,752 252,098 281,420 726,959 27,411 1,658,213 62,748 142,243 48,071 16,584 139,260 2,067,119 $ 672,350 $ 736,460 $ % 2,038,372 1.45 1Q09 29 8 (9) (3) (10) 13 (7) 3 12 (9) 5 (7) 2 % (27) % 6 (5) (2) 20 2 2 33 (45) 1 17 (13) (1) $ % 2 (8) 226,110 33,694 236,673 9,757 258,732 1,501,426 94,944 302,299 1,898,669 31,957 136,493 168,450 289,971 37,371 207,489 14,493 274,323 1,495,997 78,155 295,017 1,869,169 28,338 140,865 169,203 1,999,176 0.83 4Q09 $ 303,175 42,728 178,985 19,351 271,281 1,476,518 75,458 289,580 1,841,556 8,152 149,468 157,620 1,993,225 0.95 1Q09 $ 283,263 42,290 182,422 16,002 268,476 1,459,722 63,423 305,403 1,828,548 8,152 156,525 164,677 2,038,680 0.60 2Q09 $ 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 (b) 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 (c) Beneficial interests issued by consolidated VIEs Long-term debt Total interest-bearing liabilities (a) (b) (c) (d) 3Q09 (4) (11) 3 NM (2) 5 (7) (8) 3 - 20 11 (20) NM 1 2 (38) (8) (1) (74) 14 (2) 2,067,119 2 (1) 2.03 0.97 0.10 4.56 3.54 5.91 1.36 4.07 0.92 0.14 4.63 3.32 5.51 1.42 3.80 0.96 (0.09) 4.78 3.62 5.64 2.18 3.95 1.04 (0.32) 4.91 3.64 5.65 0.80 4.00 0.51 0.53 0.65 0.70 0.93 0.08 0.20 1.87 1.32 2.01 0.88 0.20 0.23 1.70 1.43 2.09 0.95 0.23 0.24 1.32 1.59 2.60 1.04 0.36 0.47 1.46 1.57 2.73 1.23 3.24% 2.92% 3.00% 2.96% 3.18% 3.32% 3.02% 3.10% 3.07% 3.29% 3.32% 3.33% 3.40% 3.37% % 1.64 0.29 5.27 4.16 5.87 2.44 4.41 3.60% Effective January 1, 2010, the Firm adopted new FASB guidance which amended the accounting for the transfer of financial assets and the consolidation of VIEs. For additional information on the effect of the adoption, see page 4, footnote (a). Includes margin loans and the Firm's investment in asset-backed commercial paper under the Federal Reserve Bank of Boston's AML facility, which declined to zero during the third quarter of 2009. Includes securities sold but not yet purchased, brokerage customer payables and advances from Federal Home Loan Banks. Reflects a benefit from the favorable market environment for dollar-roll financings in the first quarter of 2010 and the fourth quarter of 2009. Page 5
    • 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 analyzes the Firm’s results and the results of the lines of business on a managed basis, which is a non-GAAP financial measure. For additional information about managed basis, refer to the notes on Non-GAAP Financial Measures on page 38. QUARTERLY TRENDS 1Q10 Change 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 PREPROVISION PROFIT Total preprovision profit - reported Impact of: Credit card securitizations Tax-equivalent adjustments Total preprovision 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 - reported Impact of: Tax-equivalent adjustments Income tax expense - managed $ 1Q10 1,361 4Q09 1,844 $ $ N/A 1,361 $ (375) 1,469 $ (285) 1,425 $ $ 412 $ 231 $ 625 $ 10 $ $ 411 823 $ 397 628 $ 371 996 $ 335 345 $ 13,961 $ 10,786 $ 13,885 $ 12,953 $ N/A 411 14,372 $ (375) 397 10,808 $ (285) 371 13,971 $ 13,710 $ 12,378 $ 12,737 $ N/A 90 13,800 $ 1,992 58 14,428 $ 27,671 $ 23,164 $ N/A 501 28,172 $ 11,547 $ 3Q09 1,710 $ 2Q09 1,719 4Q09 1Q09 (26) % (26) % NM (7) NM 5 50 78 NM $ 337 387 4 31 22 113 $ 11,658 29 20 $ (294) 335 12,994 $ (540) 337 11,455 NM 4 33 NM 22 25 $ 12,670 $ 13,367 11 3 $ 1,983 89 14,809 $ 1,958 87 14,715 $ 2,004 96 15,467 NM 55 (4) NM (6) (11) $ 26,622 $ 25,623 $ 25,025 19 11 $ 1,617 455 25,236 $ 1,698 460 28,780 $ 1,664 422 27,709 $ 1,464 433 26,922 NM 10 12 NM 16 5 $ 11,160 $ 13,167 $ 12,103 $ 11,652 3 (1) $ N/A 501 12,048 $ 1,617 455 13,232 $ 1,698 460 15,325 $ 1,664 422 14,189 $ 1,464 433 13,549 NM 10 (9) NM 16 (11) $ 7,010 $ 7,284 $ 8,104 $ 8,031 $ 8,596 (4) (18) $ N/A 7,010 $ 1,617 8,901 $ 1,698 9,802 $ 1,664 9,695 $ 1,464 10,060 NM (21) NM (30) $ 1,211 $ 598 $ 1,551 $ 1,351 $ 915 103 32 $ 501 1,712 $ 455 1,053 $ 460 2,011 $ 422 1,773 $ 433 1,348 10 63 16 27 (294) 1,425 $ 1Q09 1,837 $ (540) 1,297 N/A: Not applicable. Page 6
    • JPMORGAN CHASE & CO. LINE OF BUSINESS FINANCIAL HIGHLIGHTS - MANAGED BASIS (in millions, except ratio data) QUARTERLY TRENDS 1Q10 Change 1Q10 TOTAL NET REVENUE (FTE) Investment Bank (a) Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity (a) TOTAL NET REVENUE TOTAL PREPROVISION PROFIT Investment Bank (a) Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity (a) TOTAL PREPROVISION 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 (b) Investment Bank Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity TOTAL AVERAGE EQUITY RETURN ON EQUITY (b) Investment Bank Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management (a) (b) $ $ $ $ $ $ $ $ 4Q09 8,319 7,776 4,447 1,416 1,756 2,131 2,327 28,172 $ 3,481 3,534 3,045 877 431 689 (9) 12,048 $ 2,471 (131) (303) 390 279 392 228 3,326 $ 40,000 28,000 15,000 8,000 6,500 6,500 52,094 156,094 25 % (2) (8) 20 17 24 $ $ $ $ $ 3Q09 4,929 7,669 5,148 1,406 1,835 2,195 2,054 25,236 $ 2,643 3,367 3,752 863 444 725 1,438 13,232 $ 1,901 (399) (306) 224 237 424 1,197 3,278 33,000 25,000 15,000 8,000 5,000 7,000 63,525 156,525 23 % (6) (8) 11 19 24 $ $ $ $ $ $ 2Q09 7,508 8,218 5,159 1,459 1,788 2,085 2,563 28,780 $ 3,234 4,022 3,853 914 508 734 2,060 15,325 $ 1,921 7 (700) 341 302 430 1,287 3,588 33,000 25,000 15,000 8,000 5,000 7,000 56,468 149,468 23 % (19) 17 24 24 $ $ $ $ $ $ 1Q09 7,301 7,970 4,868 1,453 1,900 1,982 2,235 27,709 $ 3,234 3,891 3,535 918 612 628 1,371 14,189 $ 1,471 15 (672) 368 379 352 808 2,721 33,000 25,000 15,000 8,000 5,000 7,000 47,865 140,865 18 % (18) 18 30 20 $ $ $ $ $ $ 4Q09 1Q09 8,371 8,835 5,129 1,402 1,821 1,703 (339) 26,922 69 % 1 (14) 1 (4) (3) 13 12 (1) % (12) (13) 1 (4) 25 NM 5 3,597 4,664 3,783 849 502 405 (251) 13,549 32 5 (19) 2 (3) (5) NM (9) (3) (24) (20) 3 (14) 70 96 (11) 1,606 474 (547) 338 308 224 (262) 2,141 30 67 1 74 18 (8) (81) 1 54 NM 45 15 (9) 75 NM 55 21 12 30 (7) (18) - 21 12 30 (7) 20 14 33,000 25,000 15,000 8,000 5,000 7,000 43,493 136,493 20 % 8 (15) 17 25 13 In the second quarter of 2009, Investment Bank ("IB") began reporting credit reimbursement from TSS as a component of total net revenue, whereas TSS continued to report its credit reimbursement to IB as a separate line item on its income statement (not part of total net revenue). Corporate/Private Equity includes an adjustment to offset IB's inclusion of the credit reimbursement in total net revenue. Prior periods have been revised for IB and Corporate/Private Equity to reflect this presentation. 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. Effective January 1, 2010, the Firm enhanced its line of business equity framework to better align equity assigned to each line of business with the anticipated changes in the business, as well as changes in the competitive and regulatory landscape. Page 7
    • JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS (in millions, except ratio data) QUARTERLY TRENDS 1Q10 Change 1Q10 INCOME STATEMENT REVENUE Investment banking fees Principal transactions Lending- and deposit-related fees Asset management, administration and commissions All other income (a) Noninterest revenue Net interest income TOTAL NET REVENUE (b) $ Provision for credit losses 4Q09 1,446 3,931 202 563 49 6,191 2,128 8,319 $ (462) 3Q09 1,892 84 174 608 (14) 2,744 2,185 4,929 $ (181) 2Q09 1,658 2,714 185 633 63 5,253 2,255 7,508 $ 1Q09 2,239 1,841 167 717 (108) 4,856 2,445 7,301 $ 4Q09 1,380 3,515 138 692 (56) 5,669 2,702 8,371 1Q09 (24) % NM 16 (7) NM 126 (3) 69 5 % 12 46 (19) NM 9 (21) (1) 379 871 1,210 (155) NM NONINTEREST EXPENSE Compensation expense Noncompensation expense TOTAL NONINTEREST EXPENSE 2,928 1,910 4,838 549 1,737 2,286 2,778 1,496 4,274 2,677 1,390 4,067 3,330 1,444 4,774 433 10 112 (12) 32 1 Income before income tax expense Income tax expense NET INCOME 3,943 1,472 2,471 2,824 923 1,901 2,855 934 1,921 2,363 892 1,471 2,387 781 1,606 40 59 30 65 88 54 479 308 593 1,380 4,889 1,773 329 8,371 (50) (25) (1) (24) 100 51 92 69 (36) 34 23 5 12 (18) NM (1) 4,316 3,073 982 8,371 59 87 70 69 6 (8) (4) (1) $ FINANCIAL RATIOS ROE ROA Overhead ratio Compensation expense as a percent 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 (a) Total net revenue REVENUE BY REGION (a) Americas Europe/Middle East/Africa Asia/Pacific Total net revenue (a) (b) $ 25 % 1.48 58 35 $ $ $ $ $ 23 % 1.12 46 11 305 413 728 1,446 5,464 1,462 (53) 8,319 $ 4,562 2,814 943 8,319 $ $ $ $ 23 % 1.12 57 37 611 549 732 1,892 2,735 971 (669) 4,929 $ 2,872 1,502 555 4,929 $ $ $ $ 18 % 0.83 56 37 384 681 593 1,658 5,011 941 (102) 7,508 $ 3,850 2,912 746 7,508 $ $ $ 20 % 0.89 57 40 393 1,103 743 2,239 4,929 708 (575) 7,301 $ 4,118 2,303 880 7,301 $ $ $ Treasury & Securities Services ("TSS") was charged a credit reimbursement related to certain exposures managed within the Investment Bank (“IB”) credit portfolio on behalf of clients shared with TSS. IB recognizes this credit reimbursement in its credit portfolio business in all other income. Total net revenue included tax-equivalent adjustments, predominantly due to income tax credits related to affordable housing and alternative energy investments, as well as tax-exempt income from municipal bond investments of $403 million, $357 million, $371 million, $334 million, and $365 million for the quarters ended March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009, and March 31, 2009, respectively. Page 8
    • JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except headcount and ratio data) QUARTERLY TRENDS 1Q10 Change 1Q10 SELECTED BALANCE SHEET DATA (Period-end) Loans (a): Loans retained (b) Loans held-for-sale & loans at fair value Total loans Equity SELECTED BALANCE SHEET DATA (Average) Total assets Trading assets - debt and equity instruments Trading assets - derivative receivables Loans (a): Loans retained (b) Loans held-for-sale & loans at fair value Total loans Adjusted assets (c) Equity 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 Net charge-off rate (b) Allow. for loan losses to period-end loans retained (b) Allow. for loan losses to average loans retained (b) Allow. for loan losses to nonperforming loans retained (d) Nonperforming loans to total period-end loans Nonperforming loans to total average loans (a) (b) (c) (d) 3Q09 2Q09 1Q09 4Q09 $ 53,010 3,594 56,604 40,000 $ 45,544 3,567 49,111 33,000 $ 55,703 4,582 60,285 33,000 $ 64,500 6,814 71,314 33,000 $ 66,506 10,993 77,499 33,000 $ 676,122 284,085 66,151 $ 674,241 285,363 72,640 $ 678,796 270,695 86,651 $ 710,825 265,336 100,536 $ 1Q09 16 % 1 15 21 (20) % (67) (27) 21 733,166 272,998 125,021 (9) (8) 4 (47) 58,501 3,150 61,651 506,635 40,000 $ 51,573 4,158 55,731 519,403 33,000 61,269 4,981 66,250 515,718 33,000 68,224 8,934 77,158 531,632 33,000 70,041 12,402 82,443 589,163 33,000 13 (24) 11 (2) 21 (16) (75) (25) (14) 21 24,977 Headcount CREDIT DATA AND QUALITY STATISTICS Net charge-offs Nonperforming assets: Nonperforming loans: Nonperforming loans retained (b) Nonperforming loans held-for-sale and loans at fair value Total nonperforming loans 4Q09 24,654 24,828 25,783 26,142 1 (4) 36 2 NM 697 $ 685 $ 750 $ 433 $ 2,459 3,196 4,782 3,407 1,738 (23) 41 282 2,741 308 3,504 128 4,910 112 3,519 57 1,795 (8) (22) 395 53 363 185 3,289 529 203 4,236 624 248 5,782 704 311 4,534 1,010 236 3,041 (31) (9) (22) (64) (22) 8 2,601 482 3,083 3,756 485 4,241 4,703 401 5,104 5,101 351 5,452 4,682 295 4,977 (31) (1) (27) (44) 63 (38) 4.83 % 4.91 4.45 106 4.84 4.45 5.27 % 8.25 7.28 118 7.13 6.29 4.86 % 8.44 7.68 98 8.14 7.41 2.55 % 7.91 7.48 150 4.93 4.56 0.21 % 7.04 6.68 269 2.32 2.18 Effective January 1, 2010, the Firm adopted new FASB guidance which amended the accounting for the transfer of financial assets and the consolidation of VIEs. Upon adoption of the new guidance, the Firm consolidated its Firm-administered multi-seller conduits. As a result, $15.1 billion of loans were recorded on the Consolidated Balance Sheet. 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. 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"); (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 AssetBacked Commercial Paper Money Market Mutual Fund Liquidity Facility. The amount of adjusted assets is presented to assist the reader in comparing IB’s 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. Nonperforming loans excluded distressed loans held-for-sale that were purchased as part of IB's proprietary activities. Page 9
    • JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio and rankings data) QUARTERLY TRENDS 1Q10 Change 1Q10 MARKET RISK - AVERAGE TRADING AND CREDIT PORTFOLIO VAR - 95% CONFIDENCE LEVEL Trading activities: Fixed income Foreign exchange Equities Commodities and other Diversification (a) Total trading VaR (b) Credit portfolio VaR (c) Diversification (a) Total trading and credit portfolio VaR $ $ 4Q09 69 13 24 15 (49) 72 19 (9) 82 $ 3Q09 121 14 21 17 (62) 111 24 (11) 124 $ YTD March 31, 2010 MARKET SHARES AND RANKINGS (d) Global Investment Banking Fees (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) (a) (b) (c) (d) (e) (f) (g) (h) Market Share 8% 7% 9% 7% 9% 18% 12% 21% 11% 20% 29% Rankings #1 #1 #1 #3 #1 #5 #2 #1 #2 #1 #3 $ $ 2Q09 182 19 19 23 (97) 146 29 (32) 143 $ 1Q09 179 16 50 22 (97) 170 68 (60) 178 $ $ $ 4Q09 158 23 97 20 (108) 190 86 (63) 213 1Q09 (43) % (7) 14 (12) 21 (35) (56) % (43) (75) (25) 55 (62) (21) 18 (34) (78) 86 (62) Full Year 2009 Market Share 9% 9% 8% 8% 12% 25% 15% 22% 14% 16% 37% Rankings #1 #1 #1 #1 #1 #3 #1 #1 #1 #2 #2 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. IB Trading VaR includes predominantly all trading activities in IB, as well as syndicated lending facilities that the Firm intends to distribute; however, particular risk parameters of certain products are not fully captured, such as correlation risk. IB Trading VaR does not include the debit valuation adjustments ("DVA") taken on derivative and structured liabilities to reflect the credit quality of the Firm. Credit portfolio VaR includes the 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. Source: Dealogic. Global Investment Banking fees reflects fee rank and share. Remainder of rankings reflect volume rank and share. Global IB fees exclude money market, short term debt and shelf deals. Long-term debt tables include investment grade, high yield, supranationals, sovereigns, agencies, covered bonds, asset-backed securities and mortgage-backed securities; exclude money market, short term debt, and U.S.municipal securities. Equity and equity-related rankings include rights offerings and Chinese A-Shares. Global announced M&A is based upon value at announcement; 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%. M&A 1Q10 and 2009 reflects the removal of any withdrawn transactions. U.S. announced M&A represents any U.S. involvement ranking. Page 10
    • JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS (in millions, except ratio and headcount data) QUARTERLY TRENDS 1Q10 Change 1Q10 INCOME STATEMENT REVENUE Lending- and deposit-related fees Asset management, administration and commissions Mortgage fees and related income Credit card income Other income Noninterest revenue Net interest income TOTAL NET REVENUE $ 4Q09 841 452 655 450 354 2,752 5,024 7,776 $ 3Q09 972 406 481 441 299 2,599 5,070 7,669 $ 2Q09 1,046 408 873 416 321 3,064 5,154 8,218 $ 1Q09 1,003 425 807 411 294 2,940 5,030 7,970 $ 4Q09 1Q09 948 435 1,633 367 214 3,597 5,238 8,835 (13) % 11 36 2 18 6 (1) 1 (11) % 4 (60) 23 65 (23) (4) (12) Provision for credit losses 3,733 4,229 3,988 3,846 3,877 (12) (4) NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE 1,770 2,402 70 4,242 1,722 2,499 81 4,302 1,728 2,385 83 4,196 1,631 2,365 83 4,079 1,631 2,457 83 4,171 3 (4) (14) (1) 9 (2) (16) 2 34 27 7 45 30 15 787 313 474 77 85 67 NM NM NM 412,505 (1) (7) 364,220 12,529 376,749 380,140 25,000 (23) (1) 1 12 (7) (10) (7) (5) 12 423,472 - (7) Income/(loss) before income tax expense (benefit) 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 and loans at fair value (b) Total loans Deposits Equity SELECTED BALANCE SHEET DATA (Average) Assets Loans: Loans retained Loans held-for-sale and loans at fair value (b) Total loans Deposits Equity Headcount (a) (b) (199) (68) (131) $ (2) % 55 54 $ 382,475 393,867 $ (6) % 56 55 $ 339,002 11,296 350,298 362,470 28,000 $ (862) (463) (399) 387,269 % 51 50 $ 340,332 14,612 354,944 357,463 25,000 $ 395,045 $ 397,673 % 51 50 $ 346,765 14,303 361,068 361,046 25,000 $ 401,620 $ 399,916 8 % 47 46 $ 353,934 13,192 367,126 371,241 25,000 $ 410,228 $ 342,997 17,055 360,052 356,934 28,000 343,411 17,670 361,081 356,464 25,000 349,762 19,025 368,787 366,944 25,000 359,372 19,043 378,415 377,259 25,000 366,925 16,526 383,451 370,278 25,000 (3) 12 (7) 3 (6) (4) 12 112,616 108,971 106,951 103,733 100,677 3 12 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 would result in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this method would therefore result in an improving overhead ratio over time, all things remaining equal. The non-GAAP ratio excludes Retail Banking's CDI amortization expense related to prior business combination transactions of $70 million, $80 million, $83 million, $82 million and $83 million for the quarters ended March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively. Loans at fair value consist of prime mortgages originated with the intent to sell that are accounted for at fair value and classified as trading assets on the Consolidated Balance Sheets. These loans totaled $8.4 billion, $12.5 billion, $12.8 billion, $11.3 billion and $8.9 billion at March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively. Average balances of these loans totaled $14.2 billion, $16.0 billion, $17.7 billion, $16.2 billion and $13.4 billion for the quarters ended March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively. Page 11
    • JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data) QUARTERLY TRENDS 1Q10 Change 1Q10 CREDIT DATA AND QUALITY STATISTICS Net charge-offs Nonperforming loans: Nonperforming loans retained Nonperforming loans held-for-sale and loans at fair value Total nonperforming loans (a) (b) (c) Nonperforming assets (a) (b) (c) Allowance for loan losses Net charge-off rate (e) Net charge-off rate excluding purchased credit-impaired loans (d) (e) Allowance for loan losses to ending loans retained (e) Allowance for loan losses to ending loans retained excluding purchased credit-impaired loans (d) (e) Allowance for loan losses to nonperforming loans retained (a) (d) (e) Nonperforming loans to total loans Nonperforming loans to total loans excluding purchased credit-impaired loans (a) (a) (b) (c) (d) (e) $ 4Q09 2,438 $ 3Q09 2,738 $ 2Q09 2,550 $ 1Q09 2,649 $ 4Q09 2,176 1Q09 (11) % 12 % 10,769 10,611 10,091 8,792 7,714 1 40 217 10,986 12,191 16,200 234 10,845 12,098 14,776 242 10,333 11,883 13,286 203 8,995 10,554 11,832 264 7,978 9,846 10,619 (7) 1 1 10 (18) 38 24 53 2.88 % 3.16 % 2.89 % 2.96 % 2.41 % 3.76 4.78 4.16 4.34 3.81 3.83 3.89 3.34 3.16 2.92 5.16 5.09 4.63 4.41 3.84 124 3.14 124 3.06 121 2.86 135 2.45 138 2.12 4.05 3.96 3.72 3.19 2.76 Excludes purchased credit-impaired loans 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. Certain of these loans are classified as trading assets on the Consolidated Balance Sheets. Nonperforming loans and assets exclude: (1) mortgage loans insured by U.S. government agencies of $10.5 billion, $9.0 billion, $7.0 billion, $4.2 billion and $4.2 billion at March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively; (2) real estate owned insured by U.S. government agencies of $707 million, $579 million, $579 million, $508 million and $433 million at March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively; and (3) 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 $660 million, $542 million, $511 million, $473 million and $433 million at March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively. These amounts are excluded as reimbursement is proceeding normally. Excludes the impact of purchased credit-impaired loans 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 that date, of credit losses over the remaining life of the portfolio. An allowance for loan losses of $2.8 billion, $1.6 billion and $1.1 billion was recorded for these loans at March 31, 2010, December 31, 2009 and September 30, 2009, respectively, which has also been excluded from applicable ratios. No allowance for loan losses was recorded at June 30, 2009 and March 31, 2009. To date, no charge-offs have been recorded for these loans. Loans held-for-sale and loans accounted for at fair value were excluded when calculating the allowance coverage ratio and net charge-off rate. Page 12
    • JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) QUARTERLY TRENDS 1Q10 Change 1Q10 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) (a) 4Q09 1,702 2,635 4,337 191 2,577 1,569 898 $ $ 59 % 58 3Q09 1,804 2,716 4,520 248 2,574 1,698 1,027 $ $ 57 % 55 2Q09 1,844 2,732 4,576 208 2,646 1,722 1,043 $ $ 58 % 56 1Q09 1,803 2,719 4,522 361 2,557 1,604 970 $ $ 57 % 55 4Q09 1,718 2,614 4,332 325 2,580 1,427 863 1Q09 (6) % (3) (4) (23) (8) (13) (1) % 1 (41) 10 4 60 % 58 $ 0.9 16.8 $ 0.7 17.0 $ 0.5 17.4 $ 0.6 17.8 $ 0.5 18.2 35 (1) 96 (8) $ 123.8 163.4 53.2 340.4 16.9 $ 121.9 153.4 58.0 333.3 17.2 $ 115.5 151.6 66.6 333.7 17.7 $ 114.1 150.4 78.9 343.4 18.0 $ 113.9 152.4 86.5 352.8 18.4 2 7 (8) 2 (2) 9 7 (38) (4) (8) $ $ $ $ $ $ $ $ $ $ 119.7 $ 158.6 55.6 333.9 3.02 % 28.9 $ 116.4 $ 153.1 60.3 329.8 3.06 % 28.2 $ 114.0 $ 151.2 74.4 339.6 2.99 % 28.1 $ 114.2 $ 151.2 82.7 348.1 2.92 % 29.1 $ 109.4 148.2 88.2 345.8 2.85 % 30.2 3 4 (8) 1 9 7 (37) (3) 2 (4) 191 $ 4.58 % 872 $ 248 $ 5.72 % 839 $ 208 $ 4.66 % 816 $ 211 $ 4.70 % 686 $ 175 3.86 % 579 (23) 9 4 51 4,398 2 35 5,186 14,159 15,544 5,454 12,882 24,984 1 6 7 5 - (1) 10 22 16 26 3 5,956 5,155 15,549 19,003 6,315 16,208 25,830 $ 5,851 5,154 15,406 17,991 5,912 15,424 25,712 $ 6,243 5,126 15,038 16,941 5,530 13,852 25,546 $ 5,292 5,203 14,144 15,959 5,485 13,930 25,252 $ Retail Banking uses the overhead ratio (excluding the amortization of CDI), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in the overhead ratio calculation would result in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this method would therefore result in an improving overhead ratio over time, all things remaining equal. The non-GAAP ratio excludes Retail Banking's CDI amortization expense related to prior business combination transactions of $70 million, $80 million, $83 million, $82 million and $83 million for the quarters ended March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively. Page 13
    • JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) QUARTERLY TRENDS 1Q10 Change 1Q10 MORTGAGE BANKING & OTHER CONSUMER LENDING $ Noninterest revenue (a) Net interest income Total net revenue Provision for credit losses Noninterest expense Income before income tax expense Net income (a) $ Overhead ratio BUSINESS METRICS (in billions) End-of-period loans owned: Auto loans Mortgage (b) Student loans and other Total end-of-period loans owned Average loans owned: Auto loans Mortgage (b) Student loans and other Total average loans owned (c) CREDIT DATA AND QUALITY STATISTICS Net charge-offs: Auto loans Mortgage Student loans and other Total net charge-offs (a) (b) (c) (d) (e) (f) 1,018 893 1,911 217 1,246 448 257 $ $ 65 % 3Q09 801 802 1,603 242 1,163 198 266 $ $ 73 % 2Q09 1,201 834 2,035 222 1,139 674 412 $ $ 56 % 1Q09 1,134 721 1,855 366 1,105 384 235 $ $ 60 % 4Q09 1,921 808 2,729 405 1,137 1,187 730 1Q09 27 % 11 19 (10) 7 126 (3) (47) % 11 (30) (46) 10 (62) (65) 42 % $ 47.4 13.7 17.4 78.5 $ 46.0 11.9 15.8 73.7 $ 44.3 10.1 15.6 70.0 $ 42.9 8.9 15.7 67.5 $ 43.1 8.8 17.4 69.3 3 15 10 7 10 56 13 $ 46.9 12.5 18.4 77.8 $ 45.3 10.6 15.6 71.5 $ 43.3 8.9 15.3 67.5 $ 43.1 8.4 16.8 68.3 $ 42.5 7.4 17.6 67.5 4 18 18 9 10 69 5 15 $ 102 6 64 172 $ 148 92 240 $ 159 7 60 226 $ 146 2 101 249 $ 174 5 34 213 (31) NM (30) (28) (41) 20 88 (19) 10 21 $ Net charge-off rate: Auto loans Mortgage Student loans and other Total net charge-off rate (c) 30+ day delinquency rate (d) (e) Nonperforming assets (f) 4Q09 $ 0.88 % 0.20 1.64 0.93 $ 1.47 % 1,006 $ $ $ $ 1.30 % 2.59 1.36 1.46 % 0.32 1.66 1.35 1.36 % 0.10 2.79 1.52 1.66 % 0.29 0.92 1.34 1.75 % 912 $ 1.76 % 872 $ 1.80 % 783 $ 1.56 % 830 Losses related to the repurchase of previously-sold loans are recorded as a reduction of production revenue. These losses totaled $432 million, $672 million, $465 million, $255 million and $220 million for the quarters ended March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively. The losses resulted in a negative impact on net income of $252 million, $413 million, $286 million, $157 million and $135 million for the quarters ended March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively. Predominantly represents loans repurchased from Government National Mortgage Association (“GNMA”) pools, which are insured by U.S. government agencies. Total average loans owned includes loans held-for-sale of $2.9 billion, $1.7 billion, $1.3 billion, $2.8 billion and $3.1 billion for the quarters ended March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively. These amounts are excluded when calculating the net charge-off rate. Excludes mortgage loans that are insured by U.S. government agencies of $11.2 billion, $9.7 billion, $7.7 billion, $5.1 billion and $4.9 billion at March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively. These amounts are excluded as reimbursement is proceeding normally. Excludes 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 $1.0 billion, $942 million, $903 million, $854 million and $770 million at March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively. These amounts are excluded as reimbursement is proceeding normally. Nonperforming loans and assets excludes: (1) mortgage loans insured by U.S. government agencies of $10.5 billion, $9.0 billion, $7.0 billion, $4.2 billion and $4.2 billion at March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively; (2) real estate owned insured by U.S. government agencies of $707 million, $579 million, $579 million, $508 million and $433 million at March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively; and (3) 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 $660 million, $542 million, $511 million, $473 million and $433 million at March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively. These amounts are excluded as reimbursement is proceeding normally. Page 14
    • JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in billions, except ratio data where otherwise noted) QUARTERLY TRENDS 1Q10 Change 1Q10 MORTGAGE BANKING & OTHER CONSUMER LENDING (continued) Origination volume: Mortgage origination volume by channel Retail Wholesale (a) Correspondent (a) CNT (negotiated transactions) Total mortgage origination volume Student loans Auto Application volume: Mortgage application volume by channel Retail Wholesale (a) Correspondent (a) Total mortgage application volume Ratio of annualized loan servicing revenue to third-party mortgage loans serviced (average) MSR revenue multiple (c) (a) (b) (c) 3Q09 2Q09 1Q09 4Q09 1Q09 $ 11.4 0.4 16.0 3.9 31.7 1.6 6.3 $ 12.3 0.6 20.0 1.9 34.8 0.6 5.9 $ 13.3 0.7 21.1 2.0 37.1 1.5 6.9 $ 14.7 0.7 21.9 3.8 41.1 0.4 5.3 $ 13.6 1.6 18.0 4.5 37.7 1.7 5.6 (7) % (33) (20) 105 (9) 167 7 (16) % (75) (11) (13) (16) (6) 13 $ 20.3 0.8 18.2 39.3 $ 17.4 0.7 25.3 43.4 $ 17.8 1.1 26.6 45.5 $ 23.0 1.3 29.7 54.0 $ 32.7 1.8 29.2 63.7 17 14 (28) (9) (38) (56) (38) (38) 14.0 113.4 1,148.8 1,155.0 10.6 (10) 4 (1) (1) - 4 10 (6) (7) 46 NM (100) Average mortgage loans held-for-sale and loans at fair value (b) Average assets Third-party mortgage loans serviced (ending) Third-party mortgage loans serviced (average) MSR net carrying value (ending) Ratio of MSR net carrying value (ending) to third-party mortgage loans serviced (ending) SUPPLEMENTAL MORTGAGE FEES AND RELATED INCOME DETAILS (in millions) Production revenue Net mortgage servicing revenue: Operating revenue: Loan servicing revenue Other changes in MSR asset fair value Total operating revenue Risk management: Changes in MSR asset fair value due to inputs or assumptions in model Derivative valuation adjustments and other Total risk management Total net mortgage servicing revenue Mortgage fees and related income 4Q09 14.5 124.8 1,075.0 1,076.4 15.5 16.2 119.5 1,082.1 1,088.8 15.5 1.44 % $ 1 18.0 115.2 1,098.9 1,104.4 13.6 1.43 % $ (192) 16.7 111.6 1,117.5 1,128.1 14.6 1.24 % $ (70) 1.31 % $ 284 0.92 % $ 481 1,107 (605) 502 1,221 (657) 564 1,220 (712) 508 1,279 (837) 442 1,222 (1,073) 149 (9) 8 (11) (9) 44 237 (96) 248 152 654 655 1,762 (1,653) 109 673 481 (1,099) 1,534 435 943 873 3,831 (3,750) 81 523 807 1,310 (307) 1,003 1,152 1,633 NM NM 39 (3) 36 NM NM (85) (43) (60) 0.42 % 3.43x 0.44 % 3.25x 0.44 % 2.82x 0.45 % 2.91x 0.43 % 2.14x Includes rural housing loans sourced through brokers and correspondents, which are underwritten under U.S. Department of Agriculture guidelines. Prior period amounts have been revised to conform with the current period presentation. Loans at fair value consist of prime mortgages originated with the intent to sell that are accounted for at fair value and classified as trading assets on the Consolidated Balance Sheets. Average balances of these loans totaled $14.2 billion, $16.0 billion, $17.7 billion, $16.2 billion and $13.4 billion for the quarters ended March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively. Represents the ratio of MSR net carrying value (ending) to third-party mortgage loans serviced (ending) divided by the ratio of annualized loan servicing revenue to third-party mortgage loans serviced (average). Page 15
    • JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) QUARTERLY TRENDS 1Q10 Change 1Q10 REAL ESTATE PORTFOLIOS Noninterest revenue Net interest income Total net revenue Provision for credit losses Noninterest expense Income/(loss) before income tax expense/(benefit) Net income/(loss) $ $ Overhead ratio BUSINESS METRICS (in billions) LOANS EXCLUDING PURCHASED CREDIT-IMPAIRED LOANS (a) End-of-period loans owned: Home equity Prime mortgage Subprime mortgage Option ARMs Other Total end-of-period loans owned Average loans owned: Home equity Prime mortgage Subprime mortgage Option ARMs Other Total average loans owned PURCHASED CREDIT-IMPAIRED LOANS (a) End-of-period loans owned: Home equity Prime mortgage Subprime mortgage Option ARMs Total end-of-period loans owned Average loans owned: Home equity Prime mortgage Subprime mortgage Option ARMs Total average loans owned TOTAL REAL ESTATE PORTFOLIOS End-of-period loans owned: Home equity Prime mortgage Subprime mortgage Option ARMs Other Total end-of-period loans owned Average loans owned: Home equity Prime mortgage Subprime mortgage Option ARMs Other Total average loans owned Average assets Home equity origination volume (a) 4Q09 32 1,496 1,528 3,325 419 (2,216) (1,286) 27 $ $ % 3Q09 (6) 1,552 1,546 3,739 565 (2,758) (1,692) 37 $ $ % 2Q09 19 1,588 1,607 3,558 411 (2,362) (1,448) 26 $ $ % 1Q09 3 1,590 1,593 3,119 417 (1,943) (1,190) 26 $ $ % 4Q09 (42) 1,816 1,774 3,147 454 (1,827) (1,119) 26 1Q09 NM % (4) (1) (11) (26) 20 24 NM % (18) (14) 6 (8) (21) (15) % $ 97.7 46.8 13.2 8.6 1.0 167.3 $ 101.4 47.5 12.5 8.5 0.7 170.6 $ 104.8 50.0 13.3 8.9 0.7 177.7 $ 108.2 53.2 13.8 9.0 0.9 185.1 $ 111.7 56.6 14.6 9.0 0.9 192.8 (4) (1) 6 1 43 (2) (13) (17) (10) (4) 11 (13) $ 99.5 47.9 13.8 8.7 1.1 171.0 $ 103.3 48.8 12.8 8.7 0.7 174.3 $ 106.6 51.7 13.6 8.9 0.8 181.6 $ 110.1 54.9 14.3 9.1 0.9 189.3 $ 113.4 58.0 14.9 8.8 0.9 196.0 (4) (2) 8 57 (2) (12) (17) (7) (1) 22 (13) $ 26.0 19.2 5.8 28.3 79.3 $ 26.5 19.7 6.0 29.0 81.2 $ 27.1 20.2 6.1 29.8 83.2 $ 27.7 20.8 6.4 30.5 85.4 $ 28.4 21.4 6.6 31.2 87.6 (2) (3) (3) (2) (2) (8) (10) (12) (9) (9) $ 26.2 19.5 5.9 28.6 80.2 $ 26.7 20.0 6.1 29.3 82.1 $ 27.4 20.5 6.2 30.2 84.3 $ 28.0 21.0 6.5 31.0 86.5 $ 28.4 21.6 6.7 31.4 88.1 (2) (3) (3) (2) (2) (8) (10) (12) (9) (9) $ 123.7 66.0 19.0 36.9 1.0 246.6 $ 127.9 67.2 18.5 37.5 0.7 251.8 $ 131.9 70.2 19.4 38.7 0.7 260.9 $ 135.9 74.0 20.2 39.5 0.9 270.5 $ 140.1 78.0 21.2 40.2 0.9 280.4 (3) (2) 3 (2) 43 (2) (12) (15) (10) (8) 11 (12) $ 125.7 67.4 19.7 37.3 1.1 251.2 240.2 0.3 $ 130.0 68.8 18.9 38.0 0.7 256.4 247.3 0.4 $ 134.0 72.2 19.8 39.1 0.8 265.9 258.3 0.5 $ 138.1 75.9 20.8 40.1 0.9 275.8 269.5 0.6 $ 141.8 79.6 21.6 40.2 0.9 284.1 279.9 0.9 (3) (2) 4 (2) 57 (2) (3) (25) (11) (15) (9) (7) 22 (12) (14) (67) 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. These loans were initially recorded at fair value and accrete interest income over the estimated lives of the loans as long as cash flows are reasonably estimable, even if the underlying loans are contractually past due. Page 16
    • JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data) QUARTERLY TRENDS 1Q10 Change 1Q10 REAL ESTATE PORTFOLIOS (continued) CREDIT DATA AND QUALITY STATISTICS Net charge-offs excluding purchased credit-impaired loans (a) Home equity Prime mortgage Subprime mortgage Option ARMs Other Total net charge-offs Net charge-off rate excluding purchased credit-impaired loans (a) Home equity Prime mortgage Subprime mortgage Option ARMs Other Total net charge-off rate excluding purchased credit-impaired loans Net charge-off rate - reported Home equity Prime mortgage Subprime mortgage Option ARMs Other Total net charge-off rate - reported 30+ day delinquency rate excluding purchased credit-impaired loans (b) Allowance for loan losses Nonperforming assets (c) Allowance for loan losses to ending loans retained Allowance for loan losses to ending loans retained excluding purchased credit-impaired loans (a) (a) (b) (c) $ 4Q09 1,126 453 457 23 16 2,075 $ 4.59 % 3.84 13.43 1.07 5.90 3Q09 1,177 568 452 29 24 2,250 $ 4.52 % 4.62 14.01 1.32 13.60 2Q09 1,142 518 422 15 19 2,116 $ 4.25 % 3.98 12.31 0.67 9.42 1Q09 1,265 479 410 15 20 2,189 $ 4.61 % 3.50 11.50 0.66 8.91 4Q09 1,098 307 364 4 15 1,788 (4) % (20) 1 (21) (33) (8) 3 % 48 26 475 7 16 3.93 % 2.15 9.91 0.18 6.76 4.92 5.12 4.62 4.64 3.70 3.63 2.73 9.41 0.25 5.90 3.35 $ 1Q09 3.59 3.28 9.49 0.30 13.60 3.48 3.38 2.85 8.46 0.15 9.42 3.16 3.67 2.53 7.91 0.15 8.91 3.18 3.14 1.56 6.83 0.04 6.76 2.55 7.28 14,127 $ 10,313 5.73 % 6.76 7.73 12,752 $ 10,347 5.06 % 6.55 7.46 11,261 $ 10,196 4.32 % 5.72 6.46 9,821 $ 9,085 3.63 % 5.31 5.87 8,870 8,437 3.16 % 11 - 59 22 4.60 Excludes the impact of purchased credit-impaired loans 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 that date, of credit losses over the remaining life of the portfolio. An allowance for loan losses of $2.8 billion, $1.6 billion and $1.1 billion was recorded for these loans at March 31, 2010, December 31, 2009 and September 30, 2009, respectively, which has also been excluded from applicable ratios. No allowance for losses was recorded at June 30, 2009 and March 31, 2009. To date, no charge-offs have been recorded for these loans. The delinquency rate for purchased credit-impaired loans was 28.49%, 27.79%, 25.56%, 23.37% and 21.36% at March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively. Excludes purchased credit-impaired loans 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. Page 17
    • JPMORGAN CHASE & CO. CARD SERVICES - MANAGED BASIS FINANCIAL HIGHLIGHTS (in millions, except ratio data and where otherwise noted) QUARTERLY TRENDS 1Q10 Change 1Q10 INCOME STATEMENT (a) REVENUE Credit card income All other income Noninterest revenue Net interest income TOTAL NET REVENUE $ 4Q09 813 (55) 758 3,689 4,447 $ 3Q09 931 (46) 885 4,263 5,148 $ 2Q09 916 (85) 831 4,328 5,159 $ 1Q09 921 (364) 557 4,311 4,868 $ 4Q09 1Q09 844 (197) 647 4,482 5,129 (13) % (20) (14) (13) (14) (4) % 72 17 (18) (13) Provision for credit losses 3,512 4,239 4,967 4,603 4,653 (17) (25) NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE 330 949 123 1,402 336 938 122 1,396 354 829 123 1,306 329 873 131 1,333 357 850 139 1,346 (2) 1 1 - (8) 12 (12) 4 $ (1,068) (396) (672) $ (870) (323) (547) 4 9 1 46 49 45 $ (268) $ (180) NM NM Income/(loss) before income tax expense/(benefit) Income tax expense/(benefit) NET INCOME/(LOSS) N/A $ Memo: Net securitization income/(loss) FINANCIAL RATIOS (a) ROE Overhead ratio Percentage of average outstandings: Net interest income Provision for credit losses Noninterest revenue Risk adjusted margin (b) Noninterest expense Pretax income/(loss) (ROO) (c) Net income/(loss) BUSINESS METRICS Sales volume (in billions) New accounts opened (in millions) Open accounts (in millions) Merchant acquiring business Bank card volume (in billions) Total transactions (in billions) (a) (b) (c) (467) (164) (303) $ (487) (181) (306) $ (1,114) (414) (700) $ 17 $ (43) (8) % 32 (8) % 27 9.60 9.14 1.97 2.43 3.65 (1.22) (0.79) (19) % 25 10.36 10.30 2.15 2.21 3.39 (1.18) (0.74) (18) % 27 10.15 11.65 1.95 0.45 3.06 (2.61) (1.64) (15) % 26 9.93 10.60 1.28 0.61 3.07 (2.46) (1.55) 9.91 10.29 1.43 1.05 2.98 (1.92) (1.21) $ 69.4 2.5 88.9 $ 78.8 3.2 93.3 $ 74.7 2.4 93.6 $ 74.0 2.4 100.3 $ 66.6 2.2 105.7 (12) (22) (5) 4 14 (16) $ 108.0 4.7 $ 110.4 4.9 $ 103.5 4.5 $ 101.4 4.5 $ 94.4 4.1 (2) (4) 14 15 Effective January 1, 2010, the Firm adopted new FASB guidance which amended the accounting for the transfer of financial assets and the consolidation of VIEs. Upon adoption of the new guidance, the Firm consolidated its Firm-sponsored credit card securitization trusts. As a result, $84.7 billion of loans and $7.4 billion of allowance for loan losses were recorded on the Consolidated Balance Sheet, while $16.7 billion of retained securitization interests reported at December 31, 2009 were eliminated upon consolidation. Financial information presented for periods ended after January 1, 2010 are comparable with those previously presented on a managed basis. For further discussion, see page 38 of this Financial Supplement. Represents total net revenue less provision for credit losses. Pretax return on average managed outstandings. N/A: Not applicable. Page 18
    • JPMORGAN CHASE & CO. CARD SERVICES - MANAGED BASIS FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except headcount and ratio data) QUARTERLY TRENDS 1Q10 Change 1Q10 SELECTED BALANCE SHEET DATA (Period-end) Loans: Loans on balance sheets Securitized and unconsolidated loans (a) Total loans $ Equity SELECTED BALANCE SHEET DATA (Average) Managed assets Loans: Loans on balance sheets Securitized and unconsolidated loans (a) Total average loans Equity $ $ 149,260 N/A 149,260 $ $ $ 15,000 $ $ 156,968 $ KEY STATS - WASHINGTON MUTUAL ONLY Loans Average loans Net interest income (e) Risk adjusted margin (e) (f) Net charge-off rate (g) 30+ day delinquency rate (g) 90+ day delinquency rate (g) KEY STATS - EXCLUDING WASHINGTON MUTUAL Loans Average loans Net interest income (e) Risk adjusted margin (e) (f) Net charge-off rate 30+ day delinquency rate 90+ day delinquency rate (a) (b) (c) (d) (e) (f) (g) 2Q09 $ $ 78,215 87,028 165,243 15,000 $ $ 184,535 $ $ 155,790 N/A 155,790 $ 15,000 $ 1Q09 $ $ 85,736 85,790 171,526 15,000 $ $ 192,141 $ $ 77,759 85,452 163,211 $ 15,000 22,478 Delinquency rates 30+ day (b) 90+ day (b) Allowance for loan losses (c) Allowance for loan losses to period-end loans (c) (d) 3Q09 78,786 84,626 163,412 Headcount CREDIT QUALITY STATISTICS (a) Net charge-offs Net charge-off rate (b) 4Q09 4,512 $ 11.75 % 5.62 % 3.15 4Q09 1Q09 $ 90,911 85,220 176,131 89 % NM (9) 64 % NM (15) 15,000 $ 15,000 - - $ 193,310 $ 201,200 (15) (22) $ $ 89,692 84,417 174,109 $ $ 83,146 86,017 169,163 $ 97,783 85,619 183,402 100 NM (5) 59 NM (15) $ 15,000 $ 15,000 $ 15,000 - - 23,759 (1) (5) 18 29 22,676 3,839 $ 9.33 % 6.28 % 3.59 22,850 4,392 $ 10.30 % 5.99 % 2.76 22,897 4,353 $ 10.03 % 5.86 % 3.25 3,493 7.72 % 6.16 % 3.22 $ 16,032 $ 10.74 % 9,672 $ 12.28 % 9,297 $ 11.89 % 8,839 $ 10.31 % 8,849 9.73 % 66 81 $ 17,204 $ 18,607 15.06 % 2.47 24.14 10.49 6.32 19,653 $ 20,377 17.12 % (0.66) 20.49 12.72 7.76 21,163 $ 22,287 17.04 % (4.45) 21.94 12.44 6.21 23,093 $ 24,418 17.90 % (3.89) 19.17 11.98 6.85 25,908 27,578 16.45 % 4.42 14.57 10.89 5.79 (12) (9) (34) (33) $ 132,056 $ 137,183 8.86 % 2.43 10.54 4.99 2.74 143,759 $ 142,834 9.40 % 2.62 8.64 5.52 3.13 144,080 $ 146,876 9.10 % 1.19 9.41 5.38 2.48 148,433 $ 149,691 8.63 % 1.34 8.97 5.27 2.90 150,223 155,824 8.75 % 0.46 6.86 5.34 2.78 (8) (4) (12) (12) Effective January 1, 2010, the Firm adopted new FASB guidance which amended the accounting for the transfer of financial assets and the consolidation of VIEs. Upon adoption of the new guidance, the Firm consolidated its Firmsponsored credit card securitization trusts. As a result, $84.7 billion of loans and $7.4 billion of allowance for loan losses were recorded on the Consolidated Balance Sheet, while $16.7 billion of retained securitization interests reported at December 31, 2009 were eliminated upon consolidation. Financial information presented for periods ended after January 1, 2010 are comparable with those previously presented on a managed basis. For further discussion, see page 38 of this Financial Supplement. Results reflect the impact of purchase accounting adjustments related to the Washington Mutual transaction and the consolidation of the Washington Mutual Master Trust. Delinquency rates for March 31, 2010 are not impacted. Based on loans on balance sheets. Includes $1.0 billion, $3.0 billion and $5.0 billion of loans at December 31, 2009, September 30, 2009 and June 30, 2009, respectively, held by the Washington Mutual Master Trust, which were consolidated onto the Card Services balance sheet at fair value during the second quarter of 2009. No allowance for loan losses was recorded for these loans as of December 31, 2009, September 30, 2009 and June 30, 2009. Excluding these loans, the allowance for loan losses to period-end loans would have been 12.43%, 12.36% and 10.95%, respectively. As a percentage of average managed outstandings. Represents total net revenue less provision for credit losses. Excludes the impact of purchase accounting adjustments related to the Washington Mutual transaction and the consolidation of the Washington Mutual Master Trust. Delinquency rates for March 31, 2010 are not impacted. N/A: Not applicable. Page 19
    • JPMORGAN CHASE & CO. CARD RECONCILIATION OF REPORTED AND MANAGED DATA (in millions, except ratio data) QUARTERLY TRENDS 1Q10 Change 1Q10 INCOME STATEMENT DATA Credit card income Reported Securitization adjustments (a) Managed credit card income Net interest income Reported Securitization adjustments (a) Managed net interest income Total net revenue Reported Securitization adjustments (a) Managed total net revenue Provision for credit losses Reported Securitization adjustments (a) Managed provision for credit losses $ $ $ $ $ $ $ $ BALANCE SHEETS - AVERAGE BALANCES Total average assets Reported Securitization adjustments (a) Managed average assets $ CREDIT QUALITY STATISTICS Net charge-offs Reported Securitization adjustments (a) Managed net charge-offs $ Net charge-off rates Reported Securitized and unconsolidated (a) Managed net charge-off rate (a) $ $ 4Q09 813 N/A 813 $ 3,689 N/A 3,689 $ 4,447 N/A 4,447 $ 3,512 N/A 3,512 $ 156,968 N/A 156,968 $ 4,512 N/A 4,512 $ 11.75 N/A 11.75 $ $ $ $ $ $ % 3Q09 1,306 (375) 931 $ 2,271 1,992 4,263 $ 3,531 1,617 5,148 $ 2,622 1,617 4,239 $ 102,748 81,787 184,535 $ 2,222 1,617 3,839 $ 11.34 7.51 9.33 $ $ $ $ $ $ % 2Q09 1,201 (285) 916 $ 2,345 1,983 4,328 $ 3,461 1,698 5,159 $ 3,269 1,698 4,967 $ 109,362 82,779 192,141 $ 2,694 1,698 4,392 $ 12.85 7.83 10.30 $ $ $ $ $ $ % 1Q09 1,215 (294) 921 $ 2,353 1,958 4,311 $ 3,204 1,664 4,868 $ 2,939 1,664 4,603 $ 111,722 81,588 193,310 $ 2,689 1,664 4,353 $ 12.03 7.91 10.03 $ $ $ $ $ $ % 4Q09 1Q09 1,384 (540) 844 (38) % NM (13) (41) % NM (4) 2,478 2,004 4,482 62 NM (13) 49 NM (18) 3,665 1,464 5,129 26 NM (14) 21 NM (13) 3,189 1,464 4,653 34 NM (17) 10 NM (25) 118,418 82,782 201,200 53 NM (15) 33 NM (22) 2,029 1,464 3,493 103 NM 18 122 NM 29 8.42 6.93 7.72 % Effective January 1, 2010, the Firm adopted new FASB guidance which amended the accounting for the transfer of financial assets and the consolidation of VIEs. Upon adoption of the new guidance, the Firm consolidated its Firm-sponsored credit card securitization trusts. As a result, reported and managed basis are comparable for periods ended after January 1, 2010. For further discussion, see page 38 of this Financial Supplement. N/A: Not applicable. Page 20
    • JPMORGAN CHASE & CO. COMMERCIAL BANKING FINANCIAL HIGHLIGHTS (in millions, except ratio data) QUARTERLY TRENDS 1Q10 Change 1Q10 INCOME STATEMENT REVENUE Lending- and deposit-related fees Asset management, administration and commissions All other income (a) Noninterest revenue Net interest income TOTAL NET REVENUE $ 4Q09 277 37 186 500 916 1,416 $ 3Q09 279 35 149 463 943 1,406 $ 2Q09 269 35 170 474 985 1,459 $ 1Q09 270 36 152 458 995 1,453 $ 4Q09 263 34 125 422 980 1,402 1Q09 (1) % 6 25 8 (3) 1 5 % 9 49 18 (7) 1 Provision for credit losses 214 494 355 312 293 (57) (27) NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE 206 324 9 539 183 351 9 543 196 339 10 545 197 327 11 535 200 342 11 553 13 (8) (1) 3 (5) (18) (3) Income before income tax expense Income tax expense NET INCOME 663 273 390 369 145 224 559 218 341 606 238 368 556 218 338 80 88 74 19 25 15 3 (1) (3) 7 1 (1) (1) 44 (17) 1 Revenue by product: Lending Treasury services Investment banking Other Total Commercial Banking revenue IB revenue, gross (b) Revenue by client segment: Middle Market Banking Commercial Term Lending Mid-Corporate Banking Real Estate Banking Other Total Commercial Banking revenue FINANCIAL RATIOS ROE Overhead ratio (a) (b) $ $ $ $ $ 658 638 105 15 1,416 $ $ $ $ $ $ 639 645 108 14 1,406 311 $ 746 229 263 100 78 1,416 $ 20 38 $ % $ $ $ 675 672 99 13 1,459 328 $ 760 191 277 100 78 1,406 $ 11 39 $ % $ $ $ 684 679 114 (24) 1,453 $ 665 646 73 18 1,402 301 $ 328 $ 206 (5) 51 771 232 278 121 57 1,459 $ 772 224 305 120 32 1,453 $ 752 228 242 120 60 1,402 (2) 20 (5) 1 (1) 9 (17) 30 1 17 37 $ % 18 37 $ % 17 39 % Revenue from investment banking products sold to Commercial Banking ("CB") clients and commercial card revenue is included in all other income. Represents the total revenue related to investment banking products sold to CB clients. Page 21
    • JPMORGAN CHASE & CO. COMMERCIAL BANKING FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio and headcount data) QUARTERLY TRENDS 1Q10 Change 1Q10 SELECTED BALANCE SHEET DATA (Period-end) Loans: Loans retained Loans held-for-sale and loans at fair value Total loans Equity SELECTED BALANCE SHEET DATA (Average) Total assets Loans: Loans retained Loans held-for-sale and loans at fair value Total loans Liability balances (a) Equity Average loans by client segment: Middle Market Banking Commercial Term Lending Mid-Corporate Banking Real Estate Banking Other Total Commercial Banking loans Net charge-off rate Allowance for loan losses to period-end loans retained Allowance for loan losses to average loans retained Allowance for loan losses to nonperforming loans retained Nonperforming loans to total period-end loans Nonperforming loans to total average loans (a) (b) 3Q09 2Q09 1Q09 4Q09 1Q09 $ 95,435 294 95,729 8,000 $ 97,108 324 97,432 8,000 $ 101,608 288 101,896 8,000 $ 105,556 296 105,852 8,000 $ 110,923 272 111,195 8,000 $ 133,013 $ 129,948 $ 130,316 $ 137,283 $ 144,298 2 (8) 113,568 297 113,865 114,975 8,000 (3) (23) (4) 9 - (15) (15) 16 - 40,728 36,814 18,416 13,264 4,643 113,865 (3) (1) (9) (6) (7) (4) (17) (2) (33) (21) (15) (15) 13 3 (53) 71 96,317 297 96,614 133,142 8,000 $ $ Headcount CREDIT DATA AND QUALITY STATISTICS Net charge-offs Nonperforming loans: Nonperforming loans retained (b) Nonperforming loans held-for-sale and loans at fair value Total nonperforming loans Nonperforming assets Allowance for credit losses: Allowance for loan losses Allowance for lending-related commitments Total allowance for credit losses 4Q09 99,794 386 100,180 122,471 8,000 33,919 36,057 12,258 10,438 3,942 96,614 $ $ 4,701 $ 103,752 297 104,049 109,293 8,000 34,794 36,507 13,510 11,133 4,236 100,180 $ $ 4,151 229 $ 108,750 288 109,038 105,829 8,000 36,200 36,943 14,933 11,547 4,426 104,049 $ $ 4,177 483 $ 38,193 36,963 17,012 12,347 4,523 109,038 $ $ 4,228 291 $ (2) % (9) (2) - 4,545 181 $ 134 (14) % 8 (14) - 2,947 49 2,996 3,186 2,764 37 2,801 2,989 2,284 18 2,302 2,461 2,090 21 2,111 2,255 1,531 1,531 1,651 7 32 7 7 92 NM 96 93 3,007 359 3,366 3,025 349 3,374 3,063 300 3,363 3,034 272 3,306 2,945 240 3,185 (1) 3 - 2 50 6 0.96 3.15 3.12 102 3.13 3.10 % 1.92 3.12 3.03 109 2.87 2.80 % 1.11 3.01 2.95 134 2.26 2.21 % 0.67 2.87 2.79 145 1.99 1.94 % 0.48 2.65 2.59 192 1.38 1.34 % 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. Allowance for loan losses of $612 million, $581 million, $496 million, $460 million, and $352 million were held against nonperforming loans retained for the periods ended March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009, and March 31, 2009, respectively. Page 22
    • JPMORGAN CHASE & CO. TREASURY & SECURITIES SERVICES FINANCIAL HIGHLIGHTS (in millions, except headcount and ratio data) QUARTERLY TRENDS 1Q10 Change 1Q10 INCOME STATEMENT REVENUE Lending- and 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) 4Q09 311 659 176 1,146 610 1,756 $ (39) (30) 3Q09 330 675 212 1,217 618 1,835 $ 53 (30) 2Q09 316 620 201 1,137 651 1,788 $ 13 (31) 1Q09 314 710 221 1,245 655 1,900 $ (5) (30) 4Q09 325 626 197 1,148 673 1,821 (6) (30) NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE 657 650 18 1,325 668 704 19 1,391 629 633 18 1,280 618 650 20 1,288 629 671 19 1,319 Income before income tax expense Income tax expense NET INCOME 440 161 279 361 124 237 464 162 302 587 208 379 478 170 308 REVENUE BY BUSINESS Treasury Services Worldwide Securities Services TOTAL NET REVENUE $ $ $ FINANCIAL RATIOS ROE Overhead ratio Pretax margin ratio (b) SELECTED BALANCE SHEET DATA (Period-end) Loans (c) Equity SELECTED BALANCE SHEET DATA (Average) Total assets Loans (c) Liability balances (d) Equity Headcount (a) (b) (c) (d) 882 874 1,756 $ $ $ 17 % 75 25 918 917 1,835 $ $ $ 19 % 76 20 919 869 1,788 $ $ $ 24 % 72 26 934 966 1,900 $ $ $ 30 % 68 31 931 890 1,821 1Q09 (6) % (2) (17) (6) (1) (4) (4) % 5 (11) (9) (4) NM - NM - (2) (8) (5) (5) 4 (3) (5) - 22 30 18 (8) (5) (9) (4) (5) (4) (5) (2) (4) 25 % 72 26 $ 24,066 6,500 $ 18,972 5,000 $ 19,693 5,000 $ 17,929 5,000 $ 18,529 5,000 27 30 30 30 $ 38,273 19,578 247,905 6,500 $ 36,589 18,888 250,695 5,000 $ 33,117 17,062 231,502 5,000 $ 35,520 17,524 234,163 5,000 $ 38,682 20,140 276,486 5,000 5 4 (1) 30 (1) (3) (10) 30 26,998 2 1 27,223 26,609 26,389 27,252 IB credit portfolio group manages certain exposures on behalf of clients shared with TSS. TSS reimburses IB for a portion of the total cost of managing the credit portfolio. IB recognizes this credit reimbursement as a component of noninterest revenue. 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. Loan balances include wholesale overdrafts, commercial card and trade finance loans. 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 23
    • 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, Retail 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 1Q10 Change 1Q10 TSS FIRMWIDE DISCLOSURES TS revenue - reported TS revenue reported in CB TS revenue reported in other lines of business TS firmwide revenue (a) Worldwide Securities Services revenue TSS firmwide revenue (a) TS firmwide liability balances (average) (b) TSS firmwide liability balances (average) (b) $ $ $ TSS FIRMWIDE FINANCIAL RATIOS TS firmwide overhead ratio (c) TSS firmwide overhead ratio (c) FIRMWIDE BUSINESS METRICS Assets under custody (in billions) Net charge-offs rate Allowance for loan losses to period-end loans Allowance for loan losses to average loans Allowance for loan losses to nonperforming loans Nonperforming loans to period-end loans Nonperforming loans to average loans (a) (b) (c) (d) (e) 882 638 56 1,576 874 2,450 $ 305,105 381,047 $ 55 65 $ Number of: US$ ACH transactions originated (in millions) Total US$ clearing volume (in thousands) International electronic funds transfer volume (in thousands) (d) Wholesale check volume (in millions) Wholesale cards issued (in thousands) (e) CREDIT DATA AND QUALITY STATISTICS Net charge-offs Nonperforming loans Allowance for credit losses: Allowance for loan losses Allowance for lending-related commitments Total allowance for credit losses 4Q09 $ % 15,283 3Q09 918 645 57 1,620 917 2,537 $ 289,024 373,166 $ 54 66 $ $ % 14,885 2Q09 919 672 63 1,654 869 2,523 $ 261,059 340,795 $ 52 62 $ $ % 14,887 1Q09 934 679 63 1,676 966 2,642 $ 258,312 339,992 $ 51 59 $ $ % 13,748 4Q09 931 646 62 1,639 890 2,529 (4) % (1) (2) (3) (5) (3) 289,645 391,461 (5) % (1) (10) (4) (2) (3) 6 2 5 (3) 13,532 3 13 53 63 $ 1Q09 % 949 28,669 965 28,604 978 28,193 978 27,186 (3) (3) (3) 5 55,754 478 27,352 $ 975 29,493 53,354 514 27,138 48,533 530 26,977 47,096 572 25,501 44,365 568 23,757 4 (7) 1 26 (16) 15 2 30 - NM (53) 51 77 128 (35) (10) (23) 12 (1) 4 14 $ 57 76 133 0.24 0.29 407 0.06 0.07 14 $ 88 84 172 % 0.46 0.47 NM 0.07 0.07 14 $ 15 104 119 % 0.08 0.09 107 0.07 0.08 17 14 $ 15 92 107 % 0.39 0.08 0.09 107 0.08 0.08 % 0.04 0.28 0.25 170 0.16 0.15 % TSS firmwide revenue includes FX revenue recorded in TSS and FX revenue associated with TSS customers who are FX customers of IB. However, some of the FX revenue associated with TSS customers who are FX customers of IB is not included in TS and TSS firmwide revenue. These amounts were $137 million, $162 million, $154 million, $191 million, and $154 million for the quarters ended March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009, and March 31, 2009, respectively. Firmwide liability balances include liability balances recorded in Commercial Banking. Overhead ratios have been calculated based on firmwide revenue and TSS and TS expense, respectively, including those allocated to certain other lines of business. FX revenue and expense recorded in IB for TSS-related FX activity are not included in this ratio. International electronic funds transfer includes non-U.S. dollar ACH and clearing volume. Wholesale cards issued and outstanding include domestic commercial, stored value, prepaid and government electronic benefit card products. Page 24
    • JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS (in millions, except ratio, ranking and headcount data) QUARTERLY TRENDS 1Q10 Change INCOME STATEMENT REVENUE Asset management, administration and commissions All other income Noninterest revenue Net interest income TOTAL NET REVENUE Provision for credit losses NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE Income before income tax expense Income tax expense NET INCOME REVENUE BY CLIENT SEGMENT Private Bank Institutional Retail Private Wealth Management JPMorgan Securities (a) Total net revenue FINANCIAL RATIOS ROE Overhead ratio Pretax margin ratio (b) BUSINESS METRICS Number of: Client advisors Retirement planning services participants (in thousands) JPMorgan Securities brokers (a) % of customer assets in 4 & 5 Star Funds (c) % of AUM in 1st and 2nd quartiles: (d) 1 year 3 years 5 years SELECTED BALANCE SHEET DATA (Period-end) Loans Equity SELECTED BALANCE SHEET DATA (Average) Total assets Loans Deposits Equity Headcount CREDIT DATA AND QUALITY STATISTICS Net charge-offs Nonperforming loans Allowance for credit losses: Allowance for loan losses Allowance for lending-related commitments Total allowance for credit losses Net charge-off rate Allowance for loan losses to period-end loans Allowance for loan losses to average loans Allowance for loan losses to nonperforming loans Nonperforming loans to period-end loans Nonperforming loans to average loans (a) (b) (c) (d) 1Q10 $ $ $ $ 4Q09 1,508 266 1,774 357 2,131 35 $ 910 514 18 1,442 654 262 392 $ 698 566 415 343 109 2,131 24 68 31 1,987 1,651 390 43 55 67 77 $ $ % 3Q09 1,632 191 1,823 372 2,195 58 $ 907 543 20 1,470 667 243 424 $ 723 584 445 331 112 2,195 24 67 30 % 1,934 1,628 376 42 % % % 57 62 74 $ $ % 2Q09 1,443 238 1,681 404 2,085 38 $ 858 474 19 1,351 696 266 430 $ 639 534 471 339 102 2,085 24 65 33 % 1,891 1,620 365 39 % % % 60 70 74 $ $ % 1Q09 1,315 253 1,568 414 1,982 59 $ 810 525 19 1,354 569 217 352 $ 640 487 411 334 110 1,982 20 68 29 % 1,838 1,595 362 45 % % % 62 69 80 $ $ % 4Q09 1Q09 1,231 69 1,300 403 1,703 33 (8) % 39 (3) (4) (3) (40) 800 479 19 1,298 372 148 224 (5) (10) (2) (2) 8 (8) 14 7 (5) 11 76 77 75 583 460 253 312 95 1,703 (3) (3) (7) 4 (3) (3) 20 23 64 10 15 25 6 1 9 2 13 76 22 23 % 286 36 (11) 25 6 % % 1,872 1,628 359 42 % 3 1 4 2 % % % 54 62 66 % % % (4) 8 4 2 8 17 $ 37,088 6,500 $ 37,755 7,000 $ 35,925 7,000 $ 35,474 7,000 $ 33,944 7,000 (2) (7) 9 (7) $ 62,525 36,602 80,662 6,500 15,321 $ 63,036 36,137 77,352 7,000 15,136 $ 60,345 34,822 73,649 7,000 14,919 $ 59,334 34,292 75,355 7,000 14,840 $ 58,227 34,585 81,749 7,000 15,109 (1) 1 4 (7) 1 7 6 (1) (7) 1 $ 28 475 $ 35 580 $ 17 409 $ 46 313 $ 19 301 (20) (18) 47 58 215 4 219 0.22 0.63 0.62 71 0.89 0.87 (3) 44 (1) 21 225 25 261 13 274 0.31 0.70 0.71 55 1.28 1.30 % 269 9 278 0.38 0.71 0.74 46 1.54 1.61 % 251 5 256 0.19 0.70 0.72 61 1.14 1.17 % 226 4 230 0.54 0.64 0.66 72 0.88 0.91 % % JPMorgan Sec urities was for merly known as Bear St earns Privat e Client Ser vices prior to Januar y 1, 2010. Pretax margin represents inc ome bef ore inc ome t ax expense di vided by total net r evenue, which is a measure of pret ax performanc e and anot her basis by which management evaluates its perf ormance and t hat of its competitors. Derived from Morni ngstar for t he U nited St ates , t he U nited Kingdom, Luxembourg, Franc e, Hong Kong and Tai wan; and Nomura for Japan. Quartile ranking sourced from Lipper f or the Unit ed States and Tai wan; Morni ngstar for t he United Kingdom, Luxembourg, Franc e and Hong Kong; and Nomura for Japan. Page 25
    • JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS, CONTINUED (in billions) ASSETS UNDER SUPERVISION (a) Assets by asset class Liquidity Fixed income Equities and multi-asset Alternatives TOTAL ASSETS UNDER MANAGEMENT Custody / brokerage / administration / deposits TOTAL ASSETS UNDER SUPERVISION Assets by client segment Institutional Private Bank Retail Private Wealth Management JPMorgan Securities (b) TOTAL ASSETS UNDER MANAGEMENT Institutional Private Bank Retail Private Wealth Management JPMorgan Securities (b) 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 Alternatives TOTAL MUTUAL FUND ASSETS (a) (b) Mar 31 2010 $ $ $ $ $ $ $ $ $ $ $ $ Dec 31 2009 521 246 355 97 1,219 488 1,707 $ 669 184 282 70 14 1,219 $ 670 476 371 133 57 1,707 $ 815 404 1,219 $ 1,189 518 1,707 $ 470 76 150 9 705 $ $ $ $ $ $ $ Sep 30 2009 591 226 339 93 1,249 452 1,701 $ 709 187 270 69 14 1,249 $ 710 452 355 129 55 1,701 $ 837 412 1,249 $ 1,182 519 1,701 $ 539 67 143 9 758 $ $ $ $ $ $ $ Jun 30 2009 634 215 316 94 1,259 411 1,670 $ 737 180 256 71 15 1,259 $ 737 414 339 131 49 1,670 $ 862 397 1,259 $ 1,179 491 1,670 $ 576 57 133 10 776 $ $ $ $ $ $ $ March 31, 2010 Change Dec 31 Mar 31 2009 2009 Mar 31 2009 617 194 264 96 1,171 372 1,543 $ 697 179 216 67 12 1,171 $ 697 390 289 123 44 1,543 $ 814 357 1,171 $ 1,103 440 1,543 $ 569 48 111 9 737 $ $ $ $ $ $ $ 625 180 215 95 1,115 349 1,464 (12) % 9 5 4 (2) 8 - (17) % 37 65 2 9 40 17 668 181 184 68 14 1,115 (6) (2) 4 1 (2) 2 53 3 9 669 375 250 120 50 1,464 (6) 5 5 3 4 - 27 48 11 14 17 789 326 1,115 (3) (2) (2) 3 24 9 1,066 398 1,464 1 - 12 30 17 570 42 85 8 705 (13) 13 5 (7) (18) 81 76 13 - Excludes assets under management of American Century Companies, Inc. in which the Firm has had a 42% ownership in all the periods presented. JPMorgan Securities was formerly known as Bear Stearns Private Client Services prior to January 1, 2010. Page 26
    • JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS, CONTINUED (in billions) QUARTERLY TRENDS 1Q10 ASSETS UNDER SUPERVISION (continued) Assets under management rollforward Beginning balance Net asset flows: Liquidity Fixed income Equities, multi-asset and alternatives Market / performance / other impacts TOTAL ASSETS UNDER MANAGEMENT Assets under supervision rollforward Beginning balance Net asset flows Market / performance / other impacts TOTAL ASSETS UNDER SUPERVISION $ 1,249 $ (62) 16 6 10 1,219 $ $ 1,701 (10) 16 1,707 4Q09 $ 1,259 $ (44) 12 8 14 1,249 $ $ 1,670 (11) 42 1,701 3Q09 $ 1,171 $ 9 13 12 54 1,259 $ $ 1,543 45 82 1,670 2Q09 $ 1,115 $ (7) 8 2 53 1,171 $ $ 1,464 (9) 88 1,543 1Q09 $ 1,133 $ 19 1 (5) (33) 1,115 $ $ 1,496 25 (57) 1,464 Page 27
    • JPMORGAN CHASE & CO. CORPORATE/PRIVATE EQUITY FINANCIAL HIGHLIGHTS (in millions, except headcount data) QUARTERLY TRENDS 1Q10 Change 1Q10 INCOME STATEMENT REVENUE Principal transactions Securities gains All other income Noninterest revenue Net interest income TOTAL NET REVENUE $ Provision for credit losses NET INCOME/(LOSS) Private equity Corporate (d) TOTAL NET INCOME/(LOSS) Headcount (a) (b) (c) (d) $ $ $ $ $ $ $ 1,109 181 273 1,563 1,031 2,594 $ 62 1Q09 1,243 366 (209) 1,400 865 2,265 $ 9 4Q09 (1,493) 214 (19) (1,298) 989 (309) 1Q09 (23) % 61 NM 16 10 13 NM % 185 NM NM 9 NM - 89 NM 641 345 205 1,191 (1,279) (88) (36) 187 NM 92 3 279 (26) NM NM 195 8 NM $ $ 55 173 228 $ $ $ 768 875 103 1,746 (1,243) 503 655 1,319 143 2,117 (1,253) 864 1,459 115 2,242 2,357 19,307 715 378 13 1,106 978 2,084 2Q09 747 1,058 30 1,835 (1,219) 616 4 (224) 228 228 3Q09 9 475 3,041 3,516 (1,180) 2,336 Income/(loss) before income tax expense (benefit) and extraordinary gain MEMO: TOTAL NET REVENUE Private equity Corporate TOTAL NET REVENUE 547 610 124 1,281 1,076 2,357 17 NONINTEREST EXPENSE Compensation expense Noncompensation expense (a) Merger costs Subtotal Net expense allocated to other businesses TOTAL NONINTEREST EXPENSE Income tax expense/(benefit) (b) Income/(loss) before extraordinary gain Extraordinary gain (c) NET INCOME/(LOSS) 4Q09 2,029 1,392 (221) (100) NM 262 1,197 1,197 818 1,211 76 1,287 584 808 808 41 (262) (262) NM (81) (81) NM NM NM (449) 140 (309) (61) 25 13 NM NM NM (280) 18 (262) (61) (84) (81) NM NM NM (4) (14) $ 296 1,788 2,084 $ 141 1,056 1,197 $ 20,119 $ $ $ 172 2,422 2,594 $ 88 1,199 1,287 $ 20,747 $ $ $ (1) 2,266 2,265 $ (27) 835 808 $ 21,522 $ $ 22,339 The first quarter of 2010 includes a $2.3 billion increase reflecting increased litigation reserves, including those for mortgage-related matters. The second quarter of 2009 included a $675 million FDIC special assessment. The income tax expense in the first quarter of 2010 and fourth quarter of 2009 includes tax benefits recognized upon the resolution of tax audits. On September 25, 2008, JPMorgan Chase acquired the banking operations of Washington Mutual. The acquisition resulted in negative goodwill, and accordingly, the Firm recognized an extraordinary gain. A preliminary gain of $1.9 billion was recognized at December 31, 2008. The final total extraordinary gain that resulted from the Washington Mutual transaction was $2.0 billion. The 2009 periods included merger costs and extraordinary gain related to the Washington Mutual transaction, as well as items related to the Bear Stearns merger, including merger costs, asset management liquidation costs and Bear Stearns Private Client Services (which was renamed to JPMorgan Securities effective January 2010) broker retention expense. Page 28
    • JPMORGAN CHASE & CO. CORPORATE/PRIVATE EQUITY FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data) QUARTERLY TRENDS 1Q10 Change 1Q10 4Q09 3Q09 2Q09 1Q09 4Q09 1Q09 SUPPLEMENTAL TREASURY and CIO Securities gains (a) Investment securities portfolio (average) Investment securities portfolio (ending) Mortgage loans (average) Mortgage loans (ending) PRIVATE EQUITY Private equity gains/(losses) Direct investments Realized gains Unrealized gains/(losses) (b) Total direct investments Third-party fund investments Total private equity gains/(losses) (c) 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 (d) Carrying value Cost $ $ $ $ 610 330,584 337,442 8,162 8,368 113 (75) 38 98 136 910 813 982 $ 378 353,224 340,163 7,794 8,023 $ 181 339,745 351,823 7,469 7,665 $ $ 12 224 236 37 273 $ 57 88 145 10 155 $ $ $ 762 743 791 $ $ 674 751 720 $ $ 374 336,263 326,414 7,228 7,368 25 16 41 (61) (20) 431 778 477 $ $ $ $ 214 265,785 316,498 7,210 7,162 61 % (6) (1) 5 4 15 (409) (394) (68) (462) NM NM (84) 165 (50) 305 778 346 19 9 24 185 % 24 7 13 17 NM 82 NM NM NM 198 4 184 4,762 5,775 5,104 5,959 4,722 5,823 4,709 5,627 4,708 5,519 (7) (3) 1 5 1,603 2,134 1,459 2,079 1,440 2,068 1,420 2,055 1,537 2,082 10 3 4 2 Total private equity portfolio - Carrying value $ 7,275 $ 7,325 $ 6,836 $ 6,560 $ 6,550 (1) 11 Total private equity portfolio - Cost $ 8,722 $ 8,781 $ 8,642 $ 8,460 $ 8,379 (1) 4 (a) (b) (c) (d) All periods reflect repositioning of the Corporate investment securities portfolio, and exclude gains/losses on securities used to manage risk associated with MSRs. Unrealized gains (losses) contain reversals of unrealized gains and losses that were recognized in prior periods and have now been realized. Included in principal transactions revenue in the Consolidated Statements of Income. Unfunded commitments to third-party private equity funds were $1.4 billion, $1.5 billion, $1.4 billion, $1.5 billion and $1.5 billion at March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively. Page 29
    • JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION (in millions) March 31, 2010 Change CREDIT EXPOSURE WHOLESALE (a) Loans retained (b) Loans held-for-sale and loans at fair value TOTAL WHOLESALE LOANS - REPORTED CONSUMER (c) Home loan portfolio - excluding purchased credit-impaired loans: Home equity Prime mortgage (b) Subprime mortgage (b) Option ARMs (b) Total home loan portfolio - excl. 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 (b) Credit card - reported: Loans excluding those held by the WaMu Master Trust (b) Loans held by the WaMu Master Trust (e) Total credit card - reported Other loans (b) Loans retained Loans held-for-sale (f) TOTAL CONSUMER LOANS - REPORTED TOTAL LOANS - REPORTED Credit card - securitized and unconsolidated (b) TOTAL MANAGED LOANS (b) Derivative receivables Receivables from customers Interests in purchased receivables (b) TOTAL CREDIT-RELATED ASSETS Wholesale lending-related commitments (b) TOTAL Memo: Total by category Total wholesale exposure (g) Total consumer loans (b) (h) Total Risk profile of wholesale credit exposure: Investment-grade Noninvestment-grade: Noncriticized Criticized performing Criticized nonperforming Total noninvestment-grade Loans held-for-sale and loans at fair value Receivables from customers Interests in purchased receivables (b) Total wholesale exposure (a) (b) (c) (d) (e) (f) (g) (h) Mar 31 2010 $ Dec 31 2009 210,211 4,079 214,290 $ 200,077 4,098 204,175 Sep 30 2009 $ 213,718 5,235 218,953 Jun 30 2009 $ Mar 31 2009 224,080 7,545 231,625 $ Dec 31 2009 Mar 31 2009 230,534 11,750 242,284 5 % - 5 (9) % (65) (12) 97,642 68,210 13,219 8,644 187,715 108,229 68,878 13,825 9,034 199,966 111,781 71,731 14,594 8,940 207,046 (4) 2 6 1 (1) (13) (5) (9) (3) (9) 26,520 19,693 5,993 29,039 81,245 27,088 20,229 6,135 29,750 83,202 27,729 20,807 6,341 30,529 85,406 28,366 21,398 6,565 31,243 87,572 (2) (2) (2) (3) (2) (8) (10) (11) (10) (9) 47,381 46,031 44,309 42,887 43,065 3 10 149,260 149,260 32,951 496,630 2,879 499,509 $ 104,795 67,597 13,270 8,852 194,514 26,012 19,203 5,848 28,260 79,323 $ 101,425 66,892 12,526 8,536 189,379 77,784 1,002 78,786 31,700 427,141 2,142 429,283 75,207 3,008 78,215 32,405 432,645 1,546 434,191 80,722 5,014 85,736 33,041 447,036 1,940 448,976 90,911 90,911 33,700 462,294 3,665 465,959 92 NM 89 4 16 34 16 64 64 (2) 7 (21) 7 713,799 N/A 713,799 79,416 16,314 2,579 812,108 326,921 1,139,029 633,458 84,626 718,084 80,210 15,745 2,927 816,966 347,155 1,164,121 653,144 87,028 740,172 94,065 13,148 2,329 849,714 343,135 1,192,849 680,601 85,790 766,391 97,491 12,977 2,972 879,831 343,991 1,223,822 708,243 85,220 793,463 131,247 14,504 939,214 363,013 1,302,227 13 NM (1) (1) 4 (12) (1) (6) (2) 1 NM (10) (39) 12 NM (14) (10) (13) (2) (3) (2) (15) (9) (13) $ $ $ 639,520 499,509 1,139,029 $ 457,471 $ $ $ 650,212 513,909 1,164,121 $ 460,702 $ $ $ 671,630 521,219 1,192,849 $ 474,005 $ $ $ 689,056 534,766 1,223,822 $ 751,048 551,179 1,302,227 $ 491,168 $ 546,968 (1) (16) 129,368 23,451 6,258 159,077 $ 133,557 26,095 7,088 166,740 141,578 27,217 8,118 176,913 141,408 26,453 6,533 174,394 147,891 25,320 4,615 177,826 (3) (10) (12) (5) (13) (7) 36 (11) 4,079 16,314 2,579 639,520 4,098 15,745 2,927 650,212 5,235 13,148 2,329 671,630 7,545 12,977 2,972 689,056 11,750 14,504 751,048 4 (12) (2) (65) 12 NM (15) $ $ $ $ Includes Investment Bank, Commercial Banking, Treasury & Securities Services and Asset Management. Effective January 1, 2010, the Firm adopted new FASB guidance which amended the accounting for the transfer of financial assets and the consolidation of VIEs. Upon adoption of the new guidance, the Firm consolidated: $84.7 billion of loans associated with Firm-sponsored credit card securitization trusts; $17.7 billion of assets associated with Firm-administered multi-seller conduits, of which $2.5 billion related to interests in purchased receivables and $15.1 billion related to wholesale loans; and $4.8 billion of loans associated with certain other consumer loan securitization entities, primarily mortgage-related. Furthermore, $17.2 billion of net lending-related commitments associated with the conduits were eliminated upon consolidation. As a result of the consolidation of the credit card securitization trusts, reported and managed basis are equivalent for periods beginning after January 1, 2010. For further discussion, see page 38 of this Financial Supplement. 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. These loans were initially recorded at fair value and accrete interest income over the estimated lives of the loans as long as cash flows are reasonably estimable, even if the underlying loans are contractually past due. Represents the remaining balance of loans measured at fair value within the Washington Mutual Master Trust that were consolidated onto the Firm's balance sheet during the second quarter of 2009. No allowance for loan losses was recorded for these loans as of December 31, 2009, September 30, 2009 and June 30, 2009. Included loans for prime mortgage of $558 million, $450 million, $187 million, $589 million and $825 million at March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively, and other (largely student loans) of $2.3 billion, $1.7 billion, $1.4 billion, $1.4 billion and $2.8 billion at March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively, Primarily represents total wholesale loans, derivative receivables, wholesale lending-related commitments and receivables from customers. Represents total consumer loans and excludes consumer lending-related commitments. 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. N/A: Not Applicable. Page 30
    • JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions, except ratio data) Mar 31 2010 NONPERFORMING ASSETS AND RATIOS WHOLESALE LOANS Loans retained Loans held-for-sale and loans at fair value TOTAL WHOLESALE LOANS $ Dec 31 2009 5,895 331 6,226 $ Sep 30 2009 6,559 345 6,904 $ Jun 30 2009 7,494 146 7,640 $ March 31, 2010 Change Dec 31 Mar 31 2009 2009 Mar 31 2009 5,829 133 5,962 $ 3,605 57 3,662 (10) % (4) (10) 64 481 70 CONSUMER LOANS (a) Home loan portfolio (includes RFS and Corporate/Private Equity): Home equity Prime mortgage Subprime mortgage Option ARMs Total home loan portfolio Auto loans Credit card - reported Other loans TOTAL CONSUMER LOANS (b) (c) 1,427 4,579 3,331 348 9,685 174 3 962 10,824 1,665 4,355 3,248 312 9,580 177 3 900 10,660 1,598 4,007 3,233 244 9,082 179 3 863 10,127 1,487 3,501 2,773 182 7,943 154 4 722 8,823 1,591 2,712 2,545 97 6,945 165 4 625 7,739 (14) 5 3 12 1 (2) 7 2 (10) 69 31 259 39 5 (25) 54 40 TOTAL NONPERFORMING LOANS REPORTED 17,050 17,564 17,767 14,785 11,401 (3) 50 Derivative receivables Assets acquired in loan satisfactions TOTAL NONPERFORMING ASSETS (b) 363 1,606 19,019 529 1,648 19,741 624 1,971 20,362 704 2,028 17,517 1,010 2,243 14,654 (31) (3) (4) (64) (28) 30 (22) 1 7 (14) 4 (4) % 8 25 (25) 93 (53) 56 104 30 $ TOTAL NONPERFORMING LOANS TO TOTAL LOANS REPORTED (d) NONPERFORMING ASSETS BY LOB Investment Bank Retail Financial Services (c) Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity (e) TOTAL (a) (b) (c) (d) (e) 2.39 $ $ 3,289 11,974 3 3,186 14 498 55 19,019 $ % 2.77 $ $ 4,236 11,864 3 2,989 14 582 53 19,741 $ % 2.72 $ $ 5,782 11,641 3 2,461 14 422 39 20,362 $ % 2.17 $ $ 4,534 10,351 4 2,255 14 326 33 17,517 $ % 1.61 $ $ 3,041 9,582 4 1,651 30 319 27 14,654 % There were no nonperforming loans held-for-sale for any of the periods presented. Nonperforming assets exclude: (1) mortgage loans insured by U.S. government agencies of $10.5 billion, $9.0 billion, $7.0 billion, $4.2 billion and $4.2 billion at March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively; (2) real estate owned insured by U.S. government agencies of $707 million, $579 million, $579 million, $508 million and $433 million at March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively; and (3) 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 $660 million, $542 million, $511 million, $473 million and $433 million at March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively. These amounts are excluded, as reimbursement is proceeding normally. In addition, the Firm's policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance. Under guidance issued by the Federal Financial Institutions Examination Council, credit card loans are charged off by the end of the month in which the account becomes 180 days past due or within 60 days from receiving notification about a specified event (e.g., bankruptcy of the borrower), whichever is earlier. Excludes home lending purchased credit-impaired loans 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. Also excludes loans held-for-sale and loans at fair value. Effective January 1, 2010, the Firm adopted new FASB guidance which amended the accounting for the transfer of financial assets and the consolidation of VIEs. Upon adoption of the new guidance, the Firm consolidated its Firm-sponsored credit card securitization trusts, its Firm-administered multi-seller conduits and certain other consumer loan securitization entities, primarily mortgage-related; overall, $104.6 billion of related loans were recorded on-balance sheet. For further discussion, see page 38 of this Financial Supplement. Predominantly relates to held-for-investment prime mortgage. Page 31
    • JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions, except ratio data) QUARTERLY TRENDS 1Q10 Change 1Q10 GROSS CHARGE-OFFS (a) Wholesale loans Consumer loans (includes RFS and Corporate/Private Equity) Credit card loans - reported Total loans - reported Credit card loans - securitized and unconsolidated Total loans - managed $ (a) (b) $ 1,230 $ 2Q09 1,093 $ 1Q09 697 $ 4Q09 206 1Q09 (18) % 392 % (10) 103 31 NM 3 14 123 82 NM 36 2,634 2,894 6,621 1,810 8,431 2,718 2,883 6,298 1,776 8,074 2,244 2,189 4,639 1,579 6,218 26 35 18 15 112 267 116 370 541 N/A 541 74 183 283 116 399 13 200 248 112 360 67 194 279 112 391 68 160 243 115 358 57 102 91 NM 36 71 131 123 NM 51 959 $ 2,825 2,405 6,460 1,733 8,193 55 NET CHARGE-OFF RATES (a) Wholesale retained loans Consumer retained loans Total retained loans - reported Consumer loans - managed Total loans - managed Consumer loans - managed excluding purchased credit-impaired loans (b) Total loans - managed excluding purchased credit-impaired loans (b) Memo: Average Retained Loans (a) Wholesale loans - reported Consumer loans - reported Total loans - reported Consumer loans - managed Total loans - managed 1,014 3Q09 2,555 4,882 8,451 N/A 8,451 RECOVERIES (a) Wholesale loans Consumer loans (includes RFS and Corporate/Private Equity) Credit card loans - reported Total loans - reported Credit card loans - securitized and unconsolidated Total loans - managed NET CHARGE-OFFS (a) Wholesale loans Consumer loans (including RFS and Corporate/ Private Equity) Credit card loans - reported Total loans - reported Credit card loans - securitized and unconsolidated Total loans - managed 4Q09 1,204 1,058 679 191 (20) 402 2,439 4,512 7,910 N/A 7,910 2,751 2,222 6,177 1,617 7,794 2,621 2,694 6,373 1,698 8,071 2,651 2,689 6,019 1,664 7,683 2,176 2,029 4,396 1,464 5,860 (11) 103 28 NM 1 12 122 80 NM 35 1.84 5.56 4.46 5.56 4.46 $ % 2.31 4.60 3.85 5.08 4.29 $ % 1.93 4.79 3.84 5.29 4.30 $ % 1.19 4.69 3.52 5.20 4.00 $ % 0.32 3.61 2.51 4.12 2.98 6.61 6.29 6.18 4.90 5.03 $ 6.05 4.84 4.85 4.51 % 3.36 211,599 506,949 718,548 506,949 718,548 $ 206,846 428,964 635,810 514,416 721,262 $ 217,952 440,376 658,328 526,393 744,345 $ 229,105 456,292 685,397 540,709 769,814 $ 238,689 471,918 710,607 557,537 796,226 Effective January 1, 2010, the Firm adopted new FASB guidance which amended the accounting for the transfer of financial assets and the consolidation of VIEs. Upon adoption of the new guidance, the Firm consolidated its Firm-sponsored credit card securitization trusts, its Firm-administered multi-seller conduits and certain other consumer loan securitization entities, primarily mortgage-related; overall, $104.6 billion of related loans were recorded on-balance sheet. As a result of the consolidation of the credit card securitization trusts, reported and managed basis are equivalent for periods beginning after January 1, 2010. For further discussion, see page 38 of this Financial Supplement. Excludes the impact of purchased credit-impaired loans 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 that date, of credit losses over the remaining life of the portfolio. To date, no charge-offs have been recorded for these loans. N/A: Not Applicable. Page 32
    • JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions, except ratio data) QUARTERLY TRENDS 1Q10 Change 1Q10 SUMMARY OF CHANGES IN THE ALLOWANCE FOR LOAN LOSSES Beginning balance at January 1, $ Cumulative effect of change in accounting principles (a) Beginning balance at January 1, adjusted $ Net charge-offs (a) Provision for loan losses (a) Other (b) Ending balance $ SUMMARY OF CHANGES IN THE ALLOWANCE FOR LENDING-RELATED COMMITMENTS Beginning balance at January 1, Cumulative effect of change in accounting principles (a) Beginning balance at January 1, adjusted Provision for lending-related commitments Ending balance ALLOWANCE COMPONENTS AND RATIOS ALLOWANCE FOR LOAN LOSSES Wholesale Asset specific (a) Formula - based Total wholesale Consumer Asset specific (c) Formula - based (a) (d) (e) Purchased credit-impaired (e) Total consumer Total allowance for loan losses Allowance for lending-related commitments Total allowance for credit losses $ $ $ $ $ REPORTED RATIOS Wholesale allowance to total wholesale retained loans Consumer allowance to total consumer retained loans Allowance to total retained loans Consumer allowance to retained nonperforming loans (f) (g) Consumer allowance to retained nonperforming loans excluding credit card MANAGED RATIOS (a) Consumer allowance to total consumer retained loans excl. purchased credit-impaired loans and loans held by the WaMu Master Trust (h) (i) Allowance to loans excluding purchased credit-impaired loans and loans held by the Washington Mutual Master Trust (h) (i) Allowance to total retained nonperforming loans excluding purchased credit-impaired loans (f) (h) (j) ALLOWANCE FOR LOAN LOSSES BY LOB Investment Bank (a) $ Retail Financial Services (a) Card Services (a) Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity Total $ (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) 4Q09 31,602 7,494 39,096 7,910 6,991 9 38,186 $ $ $ 939 (18) 921 19 940 $ $ $ 1,557 4,385 5,942 $ 1,010 28,423 2,811 32,244 38,186 940 39,126 2.83 6.49 5.40 298 $ % 3Q09 30,633 30,633 6,177 7,166 (20) 31,602 $ $ $ 821 821 118 939 $ 2,046 5,099 7,145 $ $ $ 996 21,880 1,581 24,457 31,602 939 32,541 3.57 5.73 5.04 229 $ % 2Q09 29,072 29,072 6,373 8,029 (95) 30,633 $ $ $ 746 746 75 821 $ 2,410 5,631 8,041 $ $ $ 1,009 20,493 1,090 22,592 30,633 821 31,454 3.76 5.22 4.74 223 $ % 1Q09 27,381 27,381 6,019 7,923 (213) 29,072 $ $ $ 638 638 108 746 $ 2,108 6,284 8,392 $ $ $ 801 19,879 20,680 29,072 746 29,818 3.75 4.63 4.33 234 $ % 4Q09 23,164 23,164 4,396 8,617 (4) 27,381 1Q09 3 % NM 28 28 (2) NM 21 36 % NM 69 80 (19) NM 39 14 NM 12 (84) - 42 NM 40 NM 47 1,213 6,691 7,904 (24) (14) (17) 28 (34) (25) 546 18,931 19,477 27,381 638 28,019 1 30 78 32 21 20 85 50 NM 66 39 47 40 (31) 10 66 (1) (35) (3) 75 21 (44) 53 81 2 12 21 40 39 659 659 (21) 638 3.43 4.21 3.95 252 150 139 131 134 6.63 6.21 5.80 5.20 5.64 5.51 5.28 5.01 % 137 7.05 - 4.53 212 2,601 16,200 16,032 3,007 57 261 28 38,186 174 $ $ 3,756 14,776 9,672 3,025 88 269 16 31,602 168 $ $ 4,703 13,286 9,297 3,063 15 251 18 30,633 198 $ $ 5,101 11,832 8,839 3,034 15 226 25 29,072 241 $ $ 4,682 10,619 8,849 2,945 51 215 20 27,381 Effective January 1, 2010, the Firm adopted new FASB guidance which amended the accounting for the transfer of financial assets and the consolidation of VIEs. Upon adoption of the new guidance, the Firm consolidated its Firm-sponsored credit card securitization trusts, its Firmadministered multi-seller conduits and certain other consumer loan securitization entities, primarily mortgage-related. As a result $7.4 billion, $14 million and $127 million of allowance for loan losses were recorded on-balance sheet associated with the Firm-sponsored credit card securitization trusts, Firm-administered multi-seller conduits, and certain other consumer loan securitization entities, primarily mortgage-related, respectively. As a result of the consolidation of the credit card securitization trusts, reported and managed basis are comparable for periods beginning after January 1, 2010. For further discussion, see page 38 of this Financial Supplement. Activity for the third and second quarters of 2009 predominantly included a reclassification related to the issuance and retention of securities from the Chase Issuance Trust. The asset-specific consumer allowance for loan losses includes residential real estate troubled debt restructuring reserves of $754 million, $754 million, $756 million, $603 million and $380 million at March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively. Prior period amounts have been reclassified from formula-based to conform with the current period presentation. Includes all of the Firm’s allowance for loan losses on credit card loans, including those for which the Firm has modified the terms of the loans for borrowers who are experiencing financial difficulty. Prior period amounts have been reclassified from formula-based to conform with the current period presentation. The Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance. Under guidance issued by the Federal Financial Institutions Examination Council, credit card loans are charged off by the end of the month in which the account becomes 180 days past due or within 60 days from receiving notification about a specified event (e.g., bankruptcy of the borrower), whichever is earlier. Excluding consumer purchased credit-impaired loans and the related allowance, the consumer allowance to retained nonperforming loans ratios would have been 272%, 215%, 212%, 234% and 252% at March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively. Excludes the impact of purchased credit-impaired loans 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 that date, of credit losses over the remaining life of the portfolio. To date, no charge-offs have been recorded for these loans. Excludes loans held by the Washington Mutual Master Trust, which were consolidated onto the Firm's balance sheet at fair value during the second quarter of 2009. No allowance for loan losses was recorded for these loans as of December 31, 2009, September 30, 2009, and June 30, 2009. Excludes consumer purchased credit-impaired loans 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. Page 33
    • JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions) QUARTERLY TRENDS 1Q10 Change 1Q10 PROVISION FOR CREDIT LOSSES LOANS Investment Bank (a) Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity Total wholesale Retail Financial Services (a) Card Services - reported (a) Corporate/Private Equity Total consumer Total provision for loan losses LENDING-RELATED COMMITMENTS Investment Bank (a) Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity Total wholesale Retail Financial Services Card Services - reported Corporate/Private Equity Total consumer Total provision for lending-related commitments TOTAL PROVISION FOR CREDIT LOSSES Investment Bank (a) Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity Total wholesale Retail Financial Services (a) Card Services - reported (a) Corporate/Private Equity Total consumer Total provision for credit losses Credit card loans - securitized and unconsolidated (a) Managed provision for credit losses (a) (a) $ $ $ $ $ $ 4Q09 (477) 204 (31) 31 16 (257) 3,735 3,512 1 7,248 6,991 $ 15 10 (8) 4 21 (2) (2) 19 $ (462) 214 (39) 35 16 (236) 3,733 3,512 1 7,246 7,010 $ N/A 7,010 $ $ $ 3Q09 (265) 445 73 53 (2) 304 4,228 2,622 12 6,862 7,166 $ 84 49 (20) 5 (1) 117 1 1 118 $ (181) 494 53 58 (3) 421 4,229 2,622 12 6,863 7,284 $ 1,617 8,901 $ $ $ 2Q09 330 326 1 37 (6) 688 4,004 3,269 68 7,341 8,029 $ 49 29 12 1 91 (16) (16) 75 $ 379 355 13 38 (6) 779 3,988 3,269 68 7,325 8,104 $ 1,698 9,802 $ $ $ 1Q09 815 280 (20) 59 7 1,141 3,841 2,939 2 6,782 7,923 $ 56 32 15 103 5 5 108 $ 871 312 (5) 59 7 1,244 3,846 2,939 2 6,787 8,031 $ 1,664 9,695 $ $ $ 4Q09 1,274 263 (20) 34 1,551 3,877 3,189 7,066 8,617 1Q09 (80) % (54) NM (42) NM NM (12) 34 (92) 6 (2) NM % (22) (55) (9) NM NM (4) 10 NM 3 (19) (64) 30 14 (1) (21) (21) (82) (80) 60 (20) NM (82) NM NM (84) NM (67) NM NM NM NM NM NM 1,210 293 (6) 33 1,530 3,877 3,189 7,066 8,596 (155) (57) NM (40) NM NM (12) 34 (92) 6 (4) NM (27) NM 6 NM NM (4) 10 NM 3 (18) NM (21) NM (30) 1,464 10,060 Effective January 1, 2010, the Firm adopted new FASB guidance which amended the accounting for the transfer of financial assets and the consolidation of VIEs. Upon adoption of the new guidance, the Firm consolidated its Firm-sponsored credit card securitization trusts, Firm-administered multi-seller conduits and certain other consumer loan securitization entities, primarily mortgage-related. As a result of the consolidation of the credit card securitization trusts, reported and managed basis are comparable for periods beginning after January 1, 2010. For further discussion, see page 38 of this Financial Supplement. N/A: Not Applicable. Page 34
    • JPMORGAN CHASE & CO. MARKET RISK-RELATED INFORMATION (in millions) QUARTERLY TRENDS 1Q10 Change 1Q10 AVERAGE IB TRADING VAR, CREDIT PORTFOLIO VAR AND OTHER VAR - 95% CONFIDENCE LEVEL IB VaR by risk type: Fixed income Foreign exchange Equities Commodities and other Diversification benefit to IB trading VaR (a) IB Trading VaR (b) $ Credit portfolio VaR (c) Diversification benefit to IB trading and credit portfolio VaR (a) Total IB trading and credit portfolio VaR (a) (b) (c) (d) (e) (f) 69 13 24 15 (49) 72 $ 3Q09 121 14 21 17 (62) 111 $ 2Q09 182 19 19 23 (97) 146 $ 1Q09 179 16 50 22 (97) 170 $ 4Q09 158 23 97 20 (108) 190 1Q09 (43) % (7) 14 (12) 21 (35) (56) % (43) (75) (25) 55 (62) 19 29 68 86 (21) (78) (11) 124 (32) 143 (60) 178 (63) 213 18 (34) 86 (62) 25 70 (13) 82 $ 24 (9) 82 Consumer Lending VaR (d) Chief Investment Office (CIO) VaR (e) Diversification benefit to total other VaR (a) Total other VaR Diversification benefit to total IB and other VaR (a) Total IB and other VaR (f) 4Q09 29 78 (19) 88 49 99 (31) 117 43 111 (29) 125 108 121 (61) 168 (14) (10) 32 (7) (77) (42) 79 (51) (93) 288 1 (32) 29 (66) (66) 98 $ (67) 145 $ (82) 178 $ (89) 214 $ Average VaRs were less than the sum of the VaRs of their market risk components, which is 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 therefore usually less than the sum of the risks of the positions themselves. IB Trading VaR includes predominantly all trading activities in IB, as well as syndicated lending facilities that the Firm intends to distribute; however, particular risk parameters of certain products are not fully captured, such as correlation risk. IB Trading VaR does not include the debit valuation adjustments ("DVA") taken on derivative and structured liabilities to reflect the credit quality of the Firm. Credit Portfolio VaR includes the 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. Consumer Lending VaR includes the Firm’s mortgage pipeline and warehouse, MSR and all related hedges. Chief Investment Office (CIO) VaR includes positions, primarily in debt securities and credit products, used to manage structural risk and other risks, including interest rate, and credit risks arising from the Firm’s ongoing business activities. Total IB and other VaR excludes certain nontrading activity, such as Private Equity, principal investing (e.g., mezzanine financing, tax-oriented investments, etc.), balance sheet and capital management positions and longer-term corporate investments managed by the CIO. Page 35
    • JPMORGAN CHASE & CO. CAPITAL, INTANGIBLE ASSETS AND DEPOSITS (in millions, except ratio data) Mar 31 2010 CAPITAL RATIOS (a) Tier 1 capital Total capital Tier 1 common capital (b) Risk-weighted assets Adjusted average assets Tier 1 capital ratio Total capital ratio Tier 1 common capital ratio (b) Tier 1 leverage ratio TANGIBLE COMMON EQUITY (PERIOD-END) (c) Common stockholders' equity Less: Goodwill Less: Other intangible assets Add: Deferred tax liabilities (d) Total tangible common equity TANGIBLE COMMON EQUITY (AVERAGE) (c) Common stockholders' equity Less: Goodwill Less: Other intangible assets Add: Deferred tax liabilities (d) Total tangible common equity INTANGIBLE ASSETS (PERIOD-END) Goodwill Mortgage servicing rights Purchased credit card relationships All other intangibles Total intangibles DEPOSITS (PERIOD-END) U.S. offices: Noninterest-bearing Interest-bearing Non-U.S. offices: Noninterest-bearing Interest-bearing Total deposits (a) (b) (c) (d) (e) $ $ $ $ $ $ $ $ $ Dec 31 2009 131,402 (e) $ 173,417 (e) 103,960 (e) 1,147,483 (e) 1,981,060 (e) 11.5 % (e) 15.1 (e) 9.1 (e) 6.6 (e) 156,569 48,359 4,383 2,544 106,371 $ 156,094 48,542 4,307 2,541 105,786 $ 48,359 15,531 1,153 3,230 68,273 $ 210,982 436,914 $ 10,062 267,345 925,303 $ $ $ $ Sep 30 2009 132,971 $ 177,073 105,284 1,198,006 1,933,767 11.1 % 14.8 8.8 6.9 157,213 48,357 4,621 2,538 106,773 $ 156,525 48,341 4,741 2,533 105,976 $ 48,357 15,531 1,246 3,375 68,509 $ 204,003 439,104 $ 8,082 287,178 938,367 $ $ $ $ Jun 30 2009 126,541 $ 171,804 101,420 1,237,760 1,940,689 10.2 % 13.9 8.2 6.5 154,101 48,334 4,862 2,527 103,432 $ 149,468 48,328 4,984 2,531 98,687 $ 48,334 13,663 1,342 3,520 66,859 $ 195,561 415,122 $ 9,390 247,904 867,977 $ $ $ $ Mar 31 2009 122,174 $ 167,767 96,850 1,260,237 1,969,339 9.7 % 13.3 7.7 6.2 146,614 48,288 5,082 2,535 95,779 $ 140,865 48,273 5,218 2,518 89,892 $ 48,288 14,600 1,431 3,651 67,970 $ 192,247 433,862 $ 8,291 232,077 866,477 $ $ $ $ 137,144 183,109 87,878 1,207,490 1,923,186 11.4 % 15.2 7.3 7.1 March 31, 2010 Change Dec 31 Mar 31 2009 2009 (1) % (2) (1) (4) 2 (4) % (5) 18 (5) 3 138,201 48,201 5,349 2,502 87,153 (5) - 13 (18) 2 22 136,493 48,071 5,443 2,609 85,588 (9) - 14 1 (21) (3) 24 48,201 10,634 1,528 3,821 64,184 (7) (4) - 46 (25) (15) 6 197,027 463,913 3 - 7 (6) 7,073 238,956 906,969 24 (7) (1) 42 12 2 The Federal Reserve granted the Firm, for a period of 18 months following the merger with Bear Stearns, relief up to a certain specified amount and subject to certain conditions, from the Federal Reserve's risk-based capital and leverage requirements, with respect to the Bear Stearns' risk-weighted assets and other exposures acquired. The relief would have ended, by its terms, on September 30, 2009. Commencing in the second quarter of 2009, the Firm no longer adjusted its risk-based capital ratios to take into account the relief in the calculation of its risk-based capital ratios as of June 30, 2009. The Tier 1 common ratio is Tier 1 common capital divided by risk-weighted assets. Tier 1 common capital (“Tier 1 Common”) is defined as Tier 1 capital less elements of capital not in the form of common equity – such as perpetual preferred stock, noncontrolling interest in subsidiaries and trust preferred capital debt securities. Tier 1 common capital, a non-GAAP financial measure, is used by banking regulators, investors and analysts to assess and compare the quality and composition of the Firm’s capital with the capital of other financial services companies. The Firm uses Tier 1 common capital along with the other capital measures to assess and monitor its capital position. 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. The Firm views TCE, a non-GAAP financial measure, as a meaningful measure of capital quality. Represents deferred tax liabilities related to tax-deductible goodwill and to identifiable intangibles created in non-taxable transactions, which are netted against goodwill and other intangibles when calculating TCE. Estimated. Page 36
    • JPMORGAN CHASE & CO. PER SHARE-RELATED INFORMATION (in millions, except per share and ratio data) QUARTERLY TRENDS 1Q10 Change 1Q10 EARNINGS PER SHARE DATA Basic earnings per share: Income before extraordinary gain Extraordinary gain Net income Less: Preferred stock dividends Less: Accelerated amortization from redemption of preferred stock issued to the U.S. Treasury (a) Net income applicable to common equity Less: Dividends and undistributed earnings allocated to participating securities Net income applicable to common stockholders $ $ COMMON SHARES OUTSTANDING Common shares outstanding - at period end (d) Cash dividends declared per share Book value per share Dividend payout SHARE PRICE High Low Close Market capitalization STOCK REPURCHASE PROGRAM Common shares repurchased (a) (b) (c) (d) $ 190 2,974 $ $ $ $ $ 2,974 $ $ $ $ 164 2,952 $ $ $ 2,952 $ $ 185 3,240 $ $ $ 3,240 $ $ 64 1,072 4Q09 1 % 1 - 1,612 2 16 1 104 96 1 6 $ $ $ 1,072 $ 1,519 - $ $ 1 96 1 (14) 1 6 NM 6 0.40 0.40 - 85 85 6 7 3,975.4 0.05 $ 39.38 7 % 3,942.0 0.05 $ 39.88 7 % 3,938.7 0.05 $ 39.12 6 % 3,924.1 0.05 $ 37.36 14 % 3,757.7 0.05 36.78 15 % 1 (1) 46.05 37.03 44.75 177,897 47.47 40.04 41.67 164,261 46.50 31.59 43.82 172,596 38.94 25.29 34.11 133,852 31.64 14.96 26.58 99,881 (3) (8) 7 8 - $ - $ - $ - 88 88 3,755.7 3.0 3,758.7 3,811.5 12.6 3,824.1 $ 96 93 1,519 0.40 0.40 0.28 0.28 55 % 55 (69) 3,755.7 $ $ $ 1Q09 2,141 2,141 529 0.28 0.28 3,937.9 24.1 3,962.0 0.80 0.02 0.82 2,721 2,721 473 3,811.5 $ $ 1Q09 1,112 1,136 0.80 0.02 0.82 3,946.1 28.0 3,974.1 0.74 0.74 3,512 76 3,588 163 3,937.9 $ $ 2Q09 3,425 0.75 0.75 3,970.5 24.2 3,994.7 0.74 0.74 3,278 3,278 162 3,946.1 0.75 0.75 $ 3Q09 3,116 3,970.5 Total weighted-average basic shares outstanding Add: Employee stock options and SARs (b) Total weighted-average diluted shares outstanding (c) Income before extraordinary gain per share (a) Extraordinary gain per share Net income per share (a) 3,326 3,326 162 3,164 Total weighted-average basic shares outstanding Income before extraordinary gain per share (a) Extraordinary gain per share Net income per share (a) Diluted earnings per share: Net income applicable to common stockholders 4Q09 $ - - 46 148 68 78 - The calculation of second quarter 2009 earnings per share includes a one-time non-cash reduction of $1.1 billion, or $0.27 per share, resulting from the redemption of Series K preferred stock issued to the U.S. Treasury. Excluded from the computation of diluted EPS (due to the antidilutive effect) were options issued under employee benefit plans and warrants originally issued under the U.S. Treasury’s Capital Purchase Program to purchase shares of the Firm’s common stock totaling 239 million, 147 million, 241 million, 315 million, and 363 million, for the quarters ended March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009, and March 31, 2009, respectively. Participating securities were included in the calculation of diluted EPS using the two-class method, as this computation was more dilutive than the calculation using the treasury stock method. On June 5, 2009, the Firm issued $5.8 billion, or 163 million shares, of its common stock at $35.25 per share. Page 37
    • JPMORGAN CHASE & CO. Non-GAAP Financial Measures The following are several of the non-GAAP measures that the Firm uses for various reasons, including: (i) to allow management to assess the comparability of revenue arising from both taxable and tax-exempt sources, (ii) to assess and compare the quality and composition of the Firm’s capital with the capital of other financial services companies, and (iii) more generally, to provide a more meaningful measure of certain metrics that enables comparability with prior periods, as well as with competitors. (a) In addition to analyzing the Firm’s results on a reported basis, management analyzes the Firm’s results and the results of the lines of business on a managed basis, which is a non-GAAP financial measure. For 2010 and 2009, the Firm’s definition of managed basis starts with the reported U.S. GAAP results and includes certain reclassifications to present total net revenue and net interest income for the Firm (and each of the business segments) on a tax-equivalent basis. Accordingly, revenue from tax-exempt securities and investments that receive tax credits is presented in the managed results on a basis equivalent to taxable securities and investments. This non-GAAP financial measure allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The corresponding income tax impact related to these items is recorded within income tax expense. These adjustments have no impact on net income as reported by the Firm as a whole or by the lines of business. (c) Tier 1 common capital (“Tier 1 Common”) is defined as Tier 1 capital less elements of capital not in the form of common equity – such as perpetual preferred stock, noncontrolling interest in subsidiaries and trust preferred capital debt securities. Tier 1 common capital, a non-GAAP financial measure, is used by banking regulators, investors and analysts to assess and compare the quality and composition of the Firm’s capital with the capital of other financial services companies. The Firm uses Tier 1 common capital along with the other capital measures to assess and monitor its capital position. (d) TSS Firmwide revenue includes certain TSS product revenue and liability balances reported in other lines of business, mainly CB, RFS and AM, related to customers who are also customers of those lines of business. (e) Pretax margin represents income before income tax expense divided by total net revenue, which is, in management’s view, a comprehensive measure of pretax performance derived by measuring earnings after all costs are taken into consideration. It is, therefore, another basis that management uses to evaluate the performance of TSS and AM against the performance of their respective competitors. (f) Effective January 1, 2010, the Firm adopted new FASB guidance that required the Firm to consolidate its Firm-sponsored credit card securitization trusts. The income, expense and credit costs associated with these securitization activities are now recorded in the 2010 Consolidated Statements of Income in the same classifications as for credit card loans that were not securitized. As a result of the consolidation of the securitization trusts, reported and managed basis are equivalent for periods beginning after January 1, 2010. Prior to January 1, 2010, the Firm’s managed basis presentation also included certain reclassification adjustments that assumed credit card loans securitized by Card Services remained on the Consolidated Balance Sheet. JPMorgan Chase previously used this concept of managed basis to evaluate the credit performance and overall financial performance of the entire managed credit card portfolio. Operations were funded and decisions were made about allocating resources, such as employees and capital, based on managed financial information. In addition, the same underwriting standards and ongoing risk monitoring are used for both loans on the Consolidated Balance Sheet and securitized loans. Although securitizations result in the sale of credit card receivables to a trust, JPMorgan Chase retained the ongoing customer relationships, as the customers may continue to use their credit cards; accordingly, the customer’s credit performance affects both the securitized loans and the loans retained on the Consolidated Balance Sheet. JPMorgan Chase believed that this managed basis information was useful to investors, as it enabled them to understand both the credit risks associated with the loans reported on the Consolidated Balance Sheet and the Firm’s retained interests in securitized loans. (b) The allowance for loan losses to end-of-period loans excludes purchased creditimpaired loans and loans from the Washington Mutual Master Trust, which were consolidated on the Firm’s balance sheet at fair value during the second quarter of 2009. Additionally, Real Estate Portfolios’ net charge-off rates exclude the impact of purchased credit-impaired loans. The allowance for loan losses applicable to these loans was $2.8 billion at March 31, 2010. 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 would result in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this method would therefore result in an improving overhead ratio over time, all things remaining equal. The non-GAAP ratio excludes Retail Banking's CDI amortization expense related to prior business combination transactions. (g) The calculation of the second quarter 2009 earnings per share and net income applicable to common equity includes a one-time, noncash reduction of $1.1 billion, or $0.27 per share, resulting from repayment of TARP preferred capital. Excluding this reduction, the adjusted ROE and ROTCE for the second quarter of 2009 would have been 6% and 10%, respectively. The Firm views the adjusted ROE and ROTCE, both non-GAAP financial measures, as meaningful because they enable the comparability to prior periods. (h) 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"); (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 IB’s 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. Page 38
    • Glossary of Terms ACH: Automated Clearing House. Allowance for loan losses to total loans: Represents period-end allowance for loan losses divided by retained loans. Average managed assets: Refers to total assets on the Firm's Consolidated Balance Sheets plus credit card receivables that have been securitized and removed from the Firm's Consolidated Balance Sheets, for periods ended prior to the January 1, 2010 adoption of new FASB guidance requiring the consolidation of the Firm-sponsored credit card securitization trusts. Beneficial interest issued by consolidated VIEs: Represents the interest of thirdparty holders of debt/equity securities, or other obligations, issued by VIEs that JPMorgan Chase consolidates. The underlying obligations of the VIEs consist of shortterm borrowings (including commercial paper) and long-term debt. The related assets consist of trading assets, available-for-sale securities, loans and other assets. Contractual credit card charge-off: In accordance with the Federal Financial Institutions Examination Council policy, credit card loans are charged off by the end of the month in which the account becomes 180 days past due or within 60 days from receiving notification about a specified event (e.g., bankruptcy of a borrower), whichever is earlier. Corporate/Private Equity: Includes Private Equity, Treasury and Chief Investment Office, and Corporate Other, which includes other centrally managed expense and discontinued operations. Credit card securitizations: For periods ended prior to the January 1, 2010 adoption of new FASB guidance requiring the consolidation of the Firm-sponsored credit card securitization trusts, Card Services' managed results exclude the impact of credit card securitization on total net revenue, the provision for credit losses, net charge-offs and loan receivables. Through securitization, the Firm transformed a portion of its credit card receivables into securities, which were sold to investors. The credit card receivables were removed from the Consolidated Balance Sheets through the transfer of the receivables to a trust and through the sale of undivided interests to investors that entitle the investors to specific cash flows generated from the credit card receivables. The Firm retained the remaining undivided interests as seller’s interests, which were recorded in loans on the Consolidated Balance Sheets. A gain or loss on the sale of credit card receivables to investors is recorded in other income. Securitization also affected the Firm’s Consolidated Statements of Income as the aggregate amount of interest income, certain fee revenue and recoveries that is in excess of the aggregate amount of interest paid to investors, gross credit losses and other trust expense related to the securitized receivables, were reclassified into credit card income in the Consolidated Statements of Income. Investment-grade: An indication of credit quality based upon JPMorgan Chase's internal risk assessment system. “Investment-grade” generally represents a risk profile similar to a rating of a "BBB-"/"Baa3" or better, as defined by independent rating agencies. Managed basis: For further discussion, see page 38 of this Financial Supplement. Managed credit card receivables: Refers to credit card receivables on the Firm's Consolidated Balance Sheets plus credit card receivables that have been securitized and removed from the Firm's Consolidated Balance Sheets, for periods ended prior to the January 1, 2010 adoption of new FASB guidance requiring the consolidation of the Firm-sponsored credit card securitization trusts. Mark-to-market exposure: A measure, at a point in time, of the value of a derivative or foreign exchange contract in the open market. When the mark-to-market value is positive, it indicates the counterparty owes JPMorgan Chase and, therefore, creates a repayment risk for the Firm. When the mark-to-market value is negative, JPMorgan Chase owes the counterparty. In this situation, the Firm does not have repayment risk. Merger costs: Reflects costs associated with the Washington Mutual and Bear Stearns mergers in 2008. MSR risk management revenue: Includes changes in MSR asset fair value due to inputs or assumptions in model and derivative valuation adjustments. Net charge-off ratio: Represents net charge-offs (annualized) divided by average retained loans for the reporting period. Net yield on interest-earning assets: The average rate for interest-earning assets less the average rate paid for all sources of funds. NM: Not meaningful. Overhead ratio: Noninterest expense as a percentage of total net revenue. FASB: Financial Accounting Standards Board. Interests in purchased receivables: Represents an ownership interest in cash flows of an underlying pool of receivables transferred by a third-party seller into a bankruptcyremote entity, generally a trust. Page 39
    • JPMORGAN CHASE & CO. Glossary of Terms Participating securities: Represent unvested stock-based compensation awards containing nonforfeitable rights to dividends or dividend equivalents (collectively, "dividends"), which are included in the EPS calculation using the two-class method. JPMorgan Chase grants restricted stock and RSUs to certain employees under its stock-based compensation programs, which entitle the recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. These unvested awards meet the definition of participating securities. Under the two-class method, all earnings (distributed and undistributed) are allocated to each class of common stock and participating securities, based on their respective rights to receive dividends. Preprovision profit: Total net revenue less noninterest expense. The Firm believes that this financial measure is useful in assessing the ability of a lending institution to generate income in excess of its provision for credit losses. Principal transactions: Realized and unrealized gains and losses from trading activities (including physical commodities inventories that are accounted for at the lower of cost or fair value) and changes in fair value associated with financial instruments held by the Investment Bank for which the fair value option was elected. Principal transactions revenue also includes private equity gains and losses. Retained loans: Loans that are held for investment excluding loans held-for-sale and loans at fair value. Taxable-equivalent basis: Total net revenue for each of the business segments and the Firm is presented on a tax-equivalent basis. Accordingly, revenue from tax-exempt securities and investments that receive tax credits is presented in the managed results on a basis comparable to fully taxable securities and investments. This non-GAAP financial measure allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The corresponding income tax impact related to these items is recorded within income tax expense. Unaudited: Financial statements and information that have not been subjected to auditing procedures sufficient to permit an independent certified public accountant to express an opinion. U.S. GAAP: Accounting principles generally accepted in the United States of America. Value-at-risk ("VaR"): A measure of the dollar amount of potential loss from adverse market moves in an ordinary market environment. Reported basis: Financial statements prepared under accounting principles generally accepted in the United States of America ("U.S. GAAP"), which excludes the impact of taxable-equivalent adjustments. For periods ended prior to the January 1, 2010 adoption of new FASB guidance requiring the consolidation of the Firm-sponsored credit card securitization trusts, the reported basis included the impact of credit card securitizations. Page 40
    • JPMORGAN CHASE & CO. Glossary of Terms INVESTMENT BANKING (IB) RFS (continued) IB Revenue: 1. Investment banking fees include advisory, equity underwriting, bond underwriting and loan syndication fees. 2. Fixed income markets include client and portfolio management revenue related to both market-making and proprietary risk-taking across global fixed income markets, including foreign exchange, interest rate, credit and commodities markets. 3. Equities markets include client and portfolio management revenue related to market-making and proprietary risk-taking across global equity products, including cash instruments, derivatives and convertibles. 4. Credit portfolio revenue includes net interest income, fees and loan sale activity, as well as gains or losses on securities received as part of a loan restructuring, for the IB’s credit portfolio. Credit portfolio revenue also includes the results of risk management related to the Firm's lending and derivative activities, and changes in the credit valuation adjustment, which is the component of the fair value of a derivative that reflects the credit quality of the counterparty. Mortgage Origination Channels: 1. Retail – Borrowers who are buying or refinancing a home through direct contact with a mortgage banker employed by the Firm using a branch office, the Internet or by phone. Borrowers are frequently referred to a mortgage banker by a banker in a Chase branch, real estate brokers, home builders or other third parties. 2. Wholesale – A third-party mortgage broker refers loan applications to a mortgage banker at the Firm. Brokers are independent loan originators that specialize in finding and counseling borrowers but do not provide funding for loans. The Firm exited the broker channel during 2008. 3. Correspondent – Banks, thrifts, other mortgage banks and other financial institutions that sell closed loans to the Firm. 4. Correspondent negotiated transactions ("CNT") – These transactions occur when mid- to large-sized mortgage lenders, banks and bank-owned mortgage companies sell servicing to the Firm on an as-originated basis, and exclude purchased bulk servicing transactions. These transactions supplement traditional production channels and provide growth opportunities in the servicing portfolio in stable and rising-rate periods. RETAIL FINANCIAL SERVICES (RFS) CARD SERVICES (CS) RFS Selected Business Metrics within Retail Banking: 1. Personal bankers – Retail branch office personnel who acquire, retain and expand new and existing customer relationships by assessing customer needs and recommending and selling appropriate banking products and services. 2. Sales specialists – Retail branch office personnel who specialize in the marketing of a single product, including mortgages, investments, and business banking, by partnering with the personal bankers. Components of Mortgage Fees and Related Income: 1. Production revenue includes net gains or losses on originations and sales of prime and subprime mortgage loans, other production-related fees and losses related to the repurchase of previously-sold loans. 2. Net mortgage servicing revenue a) Operating revenue comprises: all gross income earned from servicing thirdparty mortgage loans including stated service fees, excess service fees, late fees and other ancillary fees; and modeled servicing portfolio runoff (or time decay). b) Risk management comprises: changes in MSR asset fair value due to marketbased inputs such as interest rates and volatility, as well as updates to assumptions used in the MSR valuation model; and derivative valuation adjustments and other, which represents changes in the fair value of derivative instruments used to offset the impact of changes in the marketbased inputs to the MSR valuation model. CS Selected Business Metrics: 1. 2. 3. 4. 5. Sales volume – Dollar amount of cardmember purchases, net of returns. Open accounts – Accounts on file with charging privileges. Merchant acquiring business – A business that processes bank card transactions for merchants. Bank card volume – Dollar amount of transactions processed for merchants. Total transactions – Number of transactions and authorizations processed for merchants. Page 41
    • JPMORGAN CHASE & CO. Glossary of Terms COMMERCIAL BANKING (CB) TREASURY & SECURITIES SERVICES (TSS) CB Client Segments: 1. Middle Market Banking covers corporate, municipal, financial institution and not-forprofit clients, with annual revenue generally ranging between $10 million and $500 million. 2. Mid-Corporate Banking covers clients with annual revenue generally ranging between $500 million and $2 billion and focuses on clients that have broader investment banking needs. 3. Commercial Term Lending primarily provides term financing to real estate investors/owners for multi-family properties as well as financing office, retail and industrial properties. 4. Real Estate Banking provides full-service banking to investors and developers of institutional-grade real estate properties. TSS firmwide metrics include certain TSS product revenue and liability balances reported in other lines of business related to customers who are also customers of those other lines of business. In order to capture the firmwide impact of 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 management's view, in order to understand the aggregate TSS business. TSS Selected Business Metrics: 1. Liability balances include deposits and deposits that are swept to on-balance sheet liabilities such as commercial paper, federal funds purchased and securities loaned or sold under repurchase agreements. ASSET MANAGEMENT (AM) CB Revenue: 1. Lending includes a variety of financing alternatives, which are primarily provided on a basis secured by receivables, inventory, equipment, real estate or other assets. Products include term loans, revolving lines of credit, bridge financing, asset-based structures and leases. 2. Treasury services includes a broad range of products and services enabling clients to transfer, invest and manage the receipt and disbursement of funds, while providing the related information reporting. These products and services include U.S. dollar and multi-currency clearing, ACH, lockbox, disbursement and reconciliation services, check deposits, other check and currency-related services, trade finance and logistics solutions, commercial card, and deposit products, sweeps and money market mutual funds. 3. Investment banking products provide clients with sophisticated capital-raising alternatives, as well as balance sheet and risk management tools through loan syndications, investment-grade debt, asset-backed securities, private placements, high-yield bonds, equity underwriting, advisory, interest rate derivatives, foreign exchange hedges and securities sales. CB Selected Business Metrics: 1. Liability balances include deposits and deposits that are swept to on-balance sheet liabilities such as commercial paper, federal funds purchased and securities loaned or sold under repurchase agreements. 2. IB revenue, gross - Represents total revenue related to investment banking products sold to CB clients. Assets Under Management: Represent assets actively managed by Asset Management on behalf of Institutional, Retail, Private Banking, Private Wealth Management and JPMorgan Securities clients. Includes Committed Capital not Called, on which AM earns fees. Excludes assets managed by American Century Companies, Inc., in which the Firm has a 42% ownership interest at March 31, 2010. Assets Under Supervision: Represents assets under management as well as custody, brokerage, administration and deposit accounts. Alternative Assets: The following types of assets constitute alternative investments – hedge funds, currency, real estate and private equity. AM Client Segments: 1. Institutional brings comprehensive global investment services -- including asset management, pension analytics, asset/liability management and active risk budgeting strategies – to corporate and public institutions, endowments, foundations, not-forprofit organizations and governments worldwide. 2. Retail provides worldwide investment management services and retirement planning and administration through third-party and direct distribution of a full range of investment vehicles. 3. The Private Bank addresses every facet of wealth management for ultra-high-networth individuals and families worldwide, including investment management, capital markets and risk management, tax and estate planning, banking, capital raising and specialty-wealth advisory services. 4. Private Wealth Management offers high-net-worth individuals, families and business owners in the United States comprehensive wealth management solutions, including investment management, capital markets and risk management, tax and estate planning, banking, and specialty-wealth advisory services. 5. JPMorgan Securities provides investment advice and wealth management services to high-net-worth individuals, money managers, and small corporations. Page 42