2 q08erf supplement

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2 q08erf supplement

  1. 1. EARNINGS RELEASE FINANCIAL SUPPLEMENT SECOND QUARTER 2008
  2. 2. JPMORGAN CHASE & CO. TABLE OF CONTENTS Page Consolidated Results Consolidated Financial Highlights Statements of Income Consolidated Balance Sheets Condensed Average Balance Sheets and Annualized Yields Reconciliation from Reported to Managed Summary 2 3 4 5 6 Business Detail Line of Business Financial Highlights - Managed Basis Investment Bank Retail Financial Services Card Services - Managed Basis Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity 7 8 11 16 19 21 23 26 Credit-Related Information 28 Supplemental Detail Capital, Intangible Assets and Deposits 33 Glossary of Terms 34 Page 1
  3. 3. JPMORGAN CHASE & CO. CONSOLIDATED FINANCIAL HIGHLIGHTS (in millions, except per share, ratio and headcount data) QUARTERLY TRENDS 2Q08 SELECTED INCOME STATEMENT DATA Total net revenue Provision for credit losses Total noninterest expense Net income $ PER COMMON SHARE: Net income per share - basic Net income per share - diluted 1Q08 18,399 3,455 12,177 2,003 $ 4Q07 16,890 4,424 8,931 2,373 $ YEAR-TO-DATE 3Q07 17,384 2,542 10,720 2,971 $ 2Q08 Change 1Q08 2Q07 2Q07 16,112 1,785 9,327 3,373 $ 18,908 1,529 11,028 4,234 2008 9 % (22) 36 (16) (3) % 126 10 (53) $ 2008 Change 2007 2007 35,289 7,879 21,108 4,376 $ 37,876 2,537 21,656 9,021 (7) % 211 (3) (51) 0.56 0.54 0.70 0.68 0.88 0.86 1.00 0.97 1.24 1.20 (20) (21) (55) (55) 1.26 1.22 2.63 2.55 (52) (52) Cash dividends declared Book value Closing share price Market capitalization 0.38 37.02 34.31 117,881 0.38 36.94 42.95 146,066 0.38 36.59 43.65 146,986 0.38 35.72 45.82 153,901 0.38 35.08 48.45 164,659 (20) (19) 6 (29) (28) 0.76 37.02 34.31 117,881 0.72 35.08 48.45 164,659 6 6 (29) (28) COMMON SHARES OUTSTANDING: Weighted-average diluted shares outstanding Common shares outstanding at period-end 3,531.0 3,435.7 3,494.7 3,400.8 3,471.8 3,367.4 3,477.7 3,358.8 3,521.6 3,398.5 1 1 1 3,512.9 3,435.7 3,540.5 3,398.5 (1) 1 FINANCIAL RATIOS: (a) Net income: ROE ROE-GW (b) ROA 6 10 0.48 % 8 12 0.61 CAPITAL RATIOS: Tier 1 capital ratio Total capital ratio 9.1 13.5 (d) (d) 8.3 12.5 8.4 12.6 8.4 12.5 8.4 12.0 $ 1,775,670 229,359 308,670 722,905 127,176 $ 1,642,862 231,297 305,759 761,626 125,627 $ 1,562,147 213,076 306,298 740,728 123,221 $ 1,479,575 197,728 288,592 678,091 119,978 $ 1,458,042 181,968 283,069 651,370 119,211 195,594 182,166 180,667 179,847 179,664 SELECTED BALANCE SHEET DATA (Period-end) Total assets Wholesale loans Consumer loans Deposits Common stockholders' equity Headcount LINE OF BUSINESS NET INCOME Investment Bank Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity (c) Net income $ $ 394 606 250 355 425 395 (422) 2,003 $ $ (87) (227) 609 292 403 356 1,027 2,373 % 10 15 0.77 $ $ 124 752 609 288 422 527 249 2,971 % 11 18 0.91 $ $ 296 639 786 258 360 521 513 3,373 % 14 23 1.19 $ $ 1,179 785 759 284 352 493 382 4,234 % 7 11 0.54 % 16 25 1.29 % 8 (1) 1 (5) 1 22 26 9 11 7 $ 1,775,670 229,359 308,670 722,905 127,176 $ 1,458,042 181,968 283,069 651,370 119,211 22 26 9 11 7 7 9 195,594 179,664 9 NM NM (59) 22 5 11 NM (16) (67) (23) (67) 25 21 (20) NM (53) $ $ 307 379 859 647 828 751 605 4,376 $ $ 2,719 1,644 1,524 588 615 918 1,013 9,021 (89) (77) (44) 10 35 (18) (40) (51) (a) Ratios are based upon annualized amounts. (b) Net income applicable to common stock divided by total average common equity (net of goodwill). The Firm uses return on equity less goodwill, a non-GAAP financial measure, to evaluate the operating performance of the Firm. The Firm also utilizes this measure to facilitate comparisons to competitors. (c) Included the after-tax impact of material litigation actions, equity earnings related to Bear Stearns and merger costs. See Corporate/Private Equity Financial Highlights for additional details. (d) Estimated. Page 2
  4. 4. JPMORGAN CHASE & CO. STATEMENTS OF INCOME (in millions, except per share and ratio data) QUARTERLY TRENDS 2Q08 REVENUE Investment banking fees Principal transactions Lending & deposit-related fees Asset management, administration and commissions Securities gains (losses) Mortgage fees and related income Credit card income Other income Noninterest revenue $ Interest income Interest expense Net interest income 1Q08 1,612 752 1,105 3,628 647 696 1,803 (138) 10,105 $ 4Q07 1,216 (803) 1,039 3,596 33 525 1,796 1,829 9,231 $ YEAR-TO-DATE 3Q07 1,662 165 1,066 3,896 148 898 1,857 469 10,161 $ 2Q08 Change 1Q08 2Q07 2Q07 1,336 650 1,026 3,663 237 221 1,777 289 9,199 $ 1,898 3,713 951 3,611 (223) 523 1,714 553 12,740 33 NM 6 1 NM 33 NM 9 % 2008 (15) % (80) 16 NM 33 5 NM (21) $ 2008 Change 2007 2007 2,828 (51) 2,144 7,224 680 1,221 3,599 1,691 19,336 $ 3,637 8,200 1,846 6,797 (221) 999 3,277 1,071 25,606 (22) % NM 16 6 NM 22 10 58 (24) 16,529 8,235 8,294 17,532 9,873 7,659 18,619 11,396 7,223 18,806 11,893 6,913 17,342 11,174 6,168 (6) (17) 8 (5) (26) 34 34,061 18,108 15,953 33,962 21,692 12,270 (17) 30 TOTAL NET REVENUE 18,399 16,890 17,384 16,112 18,908 9 (3) 35,289 37,876 (7) Provision for credit losses 3,455 4,424 2,542 1,785 1,529 (22) 126 7,879 2,537 211 6,913 669 1,028 1,450 413 1,233 316 155 12,177 4,951 648 968 1,333 546 169 316 8,931 5,469 659 986 1,421 570 1,254 339 22 10,720 4,677 657 950 1,260 561 812 349 61 9,327 6,309 652 921 1,259 457 1,013 353 64 11,028 40 3 6 9 (24) NM NM 36 10 3 12 15 (10) 22 (10) 142 10 11,864 1,317 1,996 2,783 959 1,402 632 155 21,108 12,543 1,292 1,843 2,459 939 1,748 706 126 21,656 (5) 2 8 13 2 (20) (10) 23 (3) 6,351 2,117 4,234 (22) (34) (16) (56) (64) (53) 13,683 4,662 9,021 (54) (59) (51) 1.20 (21) (55) 2.55 (52) NONINTEREST EXPENSE Compensation expense Occupancy expense Technology, communications and equipment expense Professional & outside services Marketing Other expense Amortization of intangibles Merger costs TOTAL NONINTEREST EXPENSE Income before income tax expense Income tax expense NET INCOME $ 2,767 764 2,003 DILUTED EARNINGES PER SHARE 0.54 FINANCIAL RATIOS Net income: ROE ROE-GW ROA Effective income tax rate Overhead ratio 6 10 0.48 28 66 $ EXCLUDING IMPACT OF MERGER COSTS (a) Net income Less merger costs (after-tax) Net income excluding merger costs Diluted Per Share: Net income Less merger costs (after-tax) Net income excluding merger costs $ $ $ $ 3,535 1,162 2,373 $ 0.68 % 8 12 0.61 33 53 2,003 96 2,099 $ 0.54 0.03 0.57 $ $ $ 4,122 1,151 2,971 $ 0.86 % 10 15 0.77 28 62 2,373 2,373 $ 0.68 0.68 $ $ $ 5,000 1,627 3,373 $ 0.97 % 11 18 0.91 33 58 2,971 14 2,985 $ 0.86 0.86 $ $ $ % 14 23 1.19 33 58 3,373 38 3,411 $ 0.97 0.01 0.98 $ $ $ $ 6,302 1,926 4,376 $ 1.22 % 7 11 0.54 31 60 4,234 40 4,274 (16) NM (12) (53) 140 (51) $ 1.20 0.01 1.21 (21) NM (16) (55) 200 (53) $ $ $ % 16 25 1.29 34 57 4,376 96 4,472 $ 1.22 0.03 1.25 $ $ $ % 9,021 78 9,099 (51) 23 (51) 2.55 0.02 2.57 (52) 50 (51) (a) Net income excluding merger costs, a non-GAAP financial measure, is used by the Firm to facilitate comparison of results against the Firm's ongoing operations and with other companies' U.S. GAAP financial statements. Page 3
  5. 5. JPMORGAN CHASE & CO. CONSOLIDATED BALANCE SHEETS (in millions) Jun 30, 2008 Change Jun 30 2008 ASSETS Cash and due from banks Deposits with banks Federal funds sold and securities purchased under resale agreements Securities borrowed Trading assets: Debt and equity instruments Derivative receivables Securities Loans (net of allowance for loan losses) Accrued interest and accounts receivable (a) Premises and equipment Goodwill Other intangible assets: Mortgage servicing rights Purchased credit card relationships All other intangibles Other assets TOTAL ASSETS LIABILITIES Deposits Federal funds purchased and securities sold under repurchase agreements Commercial paper Other borrowed funds Trading liabilities: Debt and equity instruments Derivative payables Accounts payable, accrued expenses and other liabilities (including the allowance for lending-related commitments) (b) Beneficial interests issued by consolidated VIEs Long-term debt Junior subordinated deferrable interest debentures held by trusts that issued guaranteed capital debt securities TOTAL LIABILITIES STOCKHOLDERS' EQUITY Preferred stock Common stock Capital surplus Retained earnings Accumulated other comprehensive income (loss) Shares held in RSU trust Treasury stock, at cost TOTAL STOCKHOLDERS' EQUITY TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 32,255 17,150 176,287 142,854 Mar 31 2008 $ 46,888 12,414 203,176 81,014 Dec 31 2007 $ 40,144 11,466 170,897 84,184 Sep 30 2007 $ 32,766 26,714 135,589 84,697 Jun 30 2007 $ 35,449 41,736 125,930 88,360 409,608 122,389 119,173 524,783 64,294 11,843 45,993 $ $ 386,170 99,110 101,647 525,310 50,989 9,457 45,695 414,273 77,136 85,450 510,140 24,823 9,319 45,270 389,119 64,592 97,706 478,207 26,401 8,892 45,335 391,508 59,038 95,984 457,404 26,716 9,044 45,254 11,617 1,984 3,675 91,765 1,775,670 8,419 2,140 3,815 66,618 1,642,862 8,632 2,303 3,796 74,314 1,562,147 9,114 2,427 3,959 74,057 1,479,575 722,905 194,724 50,151 22,594 $ $ 761,626 192,633 50,602 28,430 $ $ 740,728 154,398 49,596 28,835 $ $ 678,091 178,767 33,978 31,154 $ $ Mar 31 2008 Jun 30 2007 (31) % 38 (13) 76 (9) % (59) 40 62 6 23 17 26 25 1 5 107 24 15 141 31 2 9,499 2,591 4,103 65,426 1,458,042 38 (7) (4) 38 8 22 (23) (10) 40 22 651,370 205,961 25,116 29,263 (5) 1 (1) (21) 11 (5) 100 (23) (7) 56 87,841 95,749 89,162 68,705 80,748 68,426 93,969 61,396 11 21 171,004 20,071 260,192 106,088 14,524 189,995 94,476 14,016 183,862 86,524 13,283 173,696 84,785 14,808 159,493 61 38 37 102 36 63 17,263 1,642,494 $ 78,982 78,983 15,372 1,517,235 15,148 1,438,926 14,930 1,359,597 12,670 1,338,831 12 8 36 23 6,000 3,658 78,870 56,313 (1,566) (269) (9,830) 133,176 1,775,670 3,658 78,072 55,762 (512) (11,353) 125,627 1,642,862 3,658 78,597 54,715 (917) (12,832) 123,221 1,562,147 3,658 78,295 53,064 (1,830) (13,209) 119,978 1,479,575 3,658 78,020 51,011 (2,080) (11,398) 119,211 1,458,042 NM 1 1 (206) NM 13 6 8 NM 1 10 25 NM 14 12 22 $ $ $ $ (a) Includes margin loans; receivables from brokers, dealers and clearing organizations; and securities fails. (b) Includes brokerage customer payables; payables to brokers, dealers and clearing organizations; and securities fails. Page 4
  6. 6. JPMORGAN CHASE & CO. CONDENSED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS (in millions, except rates) QUARTERLY TRENDS 2Q08 AVERAGE BALANCES ASSETS Deposits with banks Federal funds sold and securities purchased under resale agreements Securities borrowed Trading assets - debt instruments Securities Loans Other assets (a) Total interest-earning assets Trading assets - equity instruments Goodwill Other intangible assets: Mortgage servicing rights All other intangible assets All other noninterest-earning assets TOTAL ASSETS LIABILITIES Interest-bearing deposits Federal funds purchased and securities sold under repurchase agreements Commercial paper Other borrowings (b) Other liabilities (c) Beneficial interests issued by consolidated VIEs Long-term debt Total interest-bearing liabilities Noninterest-bearing liabilities TOTAL LIABILITIES TOTAL STOCKHOLDERS' EQUITY TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY AVERAGE RATES INTEREST-EARNING ASSETS Deposits with banks Federal funds sold and securities purchased under resale agreements Securities borrowed Trading assets - debt instruments Securities Loans Other assets (a) Total interest-earning assets INTEREST-BEARING LIABILITIES Interest-bearing deposits Federal funds purchased and securities sold under repurchase agreements Commercial paper Other borrowings (b) Other liabilities (c) Beneficial interests issued by consolidated VIEs Long-term debt Total interest-bearing liabilities INTEREST RATE SPREAD NET YIELD ON INTEREST-EARNING ASSETS NET YIELD ON INTEREST-EARNING ASSETS ADJUSTED FOR SECURITIZATIONS $ 1Q08 38,813 $ 4Q07 31,975 $ YEAR-TO-DATE 3Q07 41,363 $ 2Q08 Change 1Q08 2Q07 2Q07 39,906 $ 18,153 21 2008 17,193 106 155,664 100,322 302,053 109,834 537,964 15,629 1,260,279 99,525 45,781 153,864 83,490 322,986 89,757 526,598 1,208,670 78,810 45,699 140,622 86,649 308,175 93,236 508,172 1,178,217 93,453 45,321 133,780 87,955 310,445 95,694 476,912 1,144,692 86,177 45,276 132,768 90,810 294,931 96,921 465,763 1,099,346 85,830 45,181 1 20 (6) 22 2 NM 4 26 - 17 10 2 13 16 NM 15 16 1 154,764 91,906 312,519 99,796 532,281 7,815 1,234,475 89,168 45,740 134,127 84,822 276,109 96,128 466,604 1,074,983 87,302 45,153 15 8 13 4 14 NM 15 2 1 $ 9,947 5,823 247,344 1,668,699 $ 8,273 6,202 222,143 1,569,797 $ 8,795 6,220 198,031 1,530,037 $ 9,290 6,532 185,367 1,477,334 $ 8,371 6,854 186,404 1,431,986 20 (6) 11 6 19 (15) 33 17 $ 9,110 6,012 234,743 1,619,248 $ 8,079 6,996 183,084 1,405,597 13 (14) 28 15 $ 612,305 $ 600,132 $ 587,297 $ 540,937 $ 513,451 2 19 $ 606,218 $ 506,125 203,348 47,323 92,309 19,168 17,990 229,336 1,221,779 315,965 1,537,744 130,955 $ 179,897 47,584 107,552 14,082 200,354 1,149,601 295,616 1,445,217 124,580 1,668,699 3.87 $ % 171,450 48,821 99,259 14,183 191,797 1,112,807 295,670 1,408,477 121,560 1,569,797 4.22 $ % 206,174 26,511 104,995 14,454 177,851 1,070,922 287,436 1,358,358 118,976 1,530,037 4.95 $ % 209,323 25,282 100,715 13,641 162,465 1,024,877 289,058 1,313,935 118,051 1,477,334 5.06 $ % 13 (1) (14) NM 28 14 6 7 6 5 1,431,986 4.56 6 % % 114 % $ 2008 Change 2007 2007 (3) 87 (8) NM 32 41 19 9 17 11 17 35,394 $ 191,622 47,453 99,931 9,584 16,036 214,846 1,185,690 305,790 1,491,480 127,768 $ 1,619,248 4.03 20 204,316 23,819 98,202 14,811 155,345 1,002,618 285,826 1,288,444 117,153 $ % (6) 99 2 NM 8 38 18 7 16 9 1,405,597 15 4.61 3.84 2.29 5.59 5.27 6.36 3.97 5.34 3.80 3.56 5.75 5.47 7.10 5.88 4.41 4.77 5.84 5.58 7.60 6.30 4.83 5.60 6.09 5.69 7.80 6.55 4.99 5.31 5.65 5.68 7.65 6.37 3.82 2.87 5.67 5.36 6.72 3.97 5.60 2.36 3.09 3.84 4.13 4.17 2.72 4.12 2.73 2.17 4.28 1.32 2.24 3.27 2.71 3.31 3.41 5.03 3.78 3.82 3.45 4.35 4.40 5.02 4.36 3.90 4.06 5.18 4.68 4.90 4.52 3.99 4.41 5.19 4.92 4.69 3.22 3.77 4.37 3.00 2.79 4.68 1.32 2.92 3.52 3.07 5.14 4.91 4.87 3.54 3.81 4.36 2.63% 2.71% 2.43% 2.59% 2.24% 2.46% 2.14% 2.43% 2.00% 2.30% 2.53% 2.65% 2.05% 2.34% 3.06% 2.95% 2.80% 2.75% 2.63% 3.00% % 4.97 5.36 5.79 5.68 7.59 6.41 2.68% (a) Predominantly margin loans. (b) Includes securities sold but not yet purchased. (c) Includes brokerage customer payables. Page 5 %
  7. 7. JPMORGAN CHASE & CO. RECONCILIATION FROM REPORTED TO MANAGED SUMMARY (in millions) The Firm prepares its Consolidated financial statements using accounting principles generally accepted in the United States of America ("U.S. GAAP"). That presentation, which is referred to as "reported basis," provides the reader with an understanding of the Firm's results that can be tracked consistently from year to year and enables a comparison of the Firm's performance with other companies' U.S. GAAP financial statements. In addition to analyzing the Firm's results on a reported basis, management reviews the Firm's and the lines' of business results on a "managed" basis, which is a non-GAAP financial measure. The Firm's definition of managed basis starts with the reported U.S. GAAP results and includes certain reclassifications that assume credit card loans securitized by Card Services remain on the balance sheet and presents revenue on a fully taxable-equivalent ("FTE") basis. These adjustments do not have any impact on net income as reported by the lines of business or by the Firm as a whole. The impact of these adjustments are summarized below. For additional information about managed basis, please refer to the Glossary of Terms on page 34. QUARTERLY TRENDS 2Q08 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 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 $ 1,803 1Q08 $ $ (843) 960 $ $ (138) $ $ 247 109 $ 10,105 1,796 (937) 859 4Q07 $ 1,857 YEAR-TO-DATE 3Q07 $ 1,777 2Q07 $ 1,714 2Q08 Change 1Q08 2Q07 - % 2008 5 (7) 4 % 2007 2008 Change 2007 $ 3,599 $ 3,277 10 $ (1,780) 1,819 $ (1,534) 1,743 (16) 4 $ (885) 972 $ (836) 941 $ (788) 926 10 12 1,829 $ 469 $ 289 $ 553 NM NM $ 1,691 $ 1,071 58 $ 203 2,032 $ 182 651 $ 192 481 $ 199 752 22 (95) 24 (86) $ 450 2,141 $ 309 1,380 46 55 $ 9,231 $ 10,161 $ 9,199 $ 12,740 9 (21) $ 19,336 $ 25,606 (24) $ (843) 247 9,509 $ (937) 203 8,497 $ (885) 182 9,458 $ (836) 192 8,555 $ (788) 199 12,151 10 22 12 (7) 24 (22) $ (1,780) 450 18,006 $ (1,534) 309 24,381 (16) 46 (26) $ 8,294 $ 7,659 $ 7,223 $ 6,913 $ 6,168 8 34 $ 15,953 $ 12,270 30 $ 1,673 202 10,169 $ 1,618 124 9,401 $ 1,504 90 8,817 $ 1,414 95 8,422 $ 1,378 122 7,668 3 63 8 21 66 33 $ 3,291 326 19,570 $ 2,717 192 15,179 21 70 29 $ 18,399 $ 16,890 $ 17,384 $ 16,112 $ 18,908 9 (3) $ 35,289 $ 37,876 (7) $ 830 449 19,678 $ 681 327 17,898 $ 619 272 18,275 $ 578 287 16,977 $ 590 321 19,819 22 37 10 41 40 (1) $ 1,511 776 37,576 $ 1,183 501 39,560 28 55 (5) $ 3,455 $ 4,424 $ 2,542 $ 1,785 $ 1,529 (22) 126 $ 7,879 $ 2,537 211 $ 830 4,285 $ 681 5,105 $ 619 3,161 $ 578 2,363 $ 590 2,119 22 (16) 41 102 $ 1,511 9,390 $ 1,183 3,720 28 152 $ 764 $ 1,162 $ 1,151 $ 1,627 $ 2,117 (34) (64) $ 1,926 $ 4,662 (59) $ 449 1,213 $ 327 1,489 $ 272 1,423 $ 287 1,914 $ 321 2,438 37 (19) 40 (50) $ 776 2,702 $ 501 5,163 55 (48) Page 6 %
  8. 8. JPMORGAN CHASE & CO. LINE OF BUSINESS FINANCIAL HIGHLIGHTS - MANAGED BASIS (in millions, except ratio data) QUARTERLY TRENDS 2Q08 TOTAL NET REVENUE (FTE) Investment Bank Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity TOTAL NET REVENUE NET INCOME Investment Bank Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity (a) 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 $ $ $ $ $ $ 1Q08 5,470 5,015 3,775 1,106 2,019 2,064 229 19,678 $ $ 394 606 250 355 425 395 (422) 2,003 $ $ 23,319 17,000 14,100 7,000 3,500 5,066 60,970 130,955 7 14 7 20 49 31 4Q07 3,011 4,702 3,904 1,067 1,913 1,901 1,400 17,898 (87) (227) 609 292 403 356 1,027 2,373 $ 22,000 17,000 14,100 7,000 3,500 5,000 55,980 $ 124,580 % (2) % (5) 17 17 46 29 $ $ $ $ $ $ YEAR-TO-DATE 3Q07 3,172 4,815 3,971 1,084 1,930 2,389 914 18,275 $ $ 124 752 609 288 422 527 249 2,971 $ $ 21,000 16,000 14,100 6,700 3,000 4,000 56,760 121,560 2 19 17 17 56 52 $ $ % 2Q08 Change 1Q08 2Q07 2Q07 2,946 4,201 3,867 1,009 1,748 2,205 1,001 16,977 $ $ 296 639 786 258 360 521 513 3,373 $ $ 21,000 16,000 14,100 6,700 3,000 4,000 54,176 118,976 6 16 22 15 48 52 $ $ % 5,798 4,357 3,717 1,007 1,741 2,137 1,062 19,819 82 % 7 (3) 4 6 9 (84) 10 21,000 16,000 14,100 6,300 3,000 3,750 53,901 118,051 (6) % 15 2 10 16 (3) (78) (1) NM NM (59) 22 5 11 NM (16) 1,179 785 759 284 352 493 382 4,234 23 20 22 18 47 53 2008 (67) (23) (67) 25 21 (20) NM (53) 6 1 9 5 % 11 6 11 17 35 13 11 $ $ $ $ $ $ 2008 Change 2007 2007 8,481 9,717 7,679 2,173 3,932 3,965 1,629 37,576 $ $ 307 379 859 647 828 751 605 4,376 $ $ $ (30) % 15 4 8 20 (2) (30) (5) 2,719 1,644 1,524 588 615 918 1,013 9,021 $ 22,659 17,000 14,100 7,000 3,500 5,033 58,476 127,768 3 4 12 19 48 30 12,052 8,463 7,397 2,010 3,267 4,041 2,330 39,560 (89) (77) (44) 10 35 (18) (40) (51) 21,000 16,000 14,100 6,300 3,000 3,750 53,003 117,153 % 26 21 22 19 41 49 8 6 11 17 34 10 9 % (a) Included the after-tax impact of material litigation actions, equity earnings related to Bear Stearns and merger costs. See Corporate/Private Equity Financial Highlights for additional details. (b) Each business segment is allocated capital by taking into consideration stand-alone peer comparisons, economic risk measures and regulatory capital requirements. The amount of capital assigned to each business is referred to as equity. Page 7
  9. 9. JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS (in millions, except ratio data) QUARTERLY TRENDS 2Q08 INCOME STATEMENT REVENUE Investment banking fees Principal transactions Lending & deposit-related fees Asset management, administration and commissions All other income Noninterest revenue Net interest income TOTAL NET REVENUE (a) $ Provision for credit losses Credit reimbursement from TSS (b) REVENUE BY REGION Americas Europe/Middle East/Africa Asia/Pacific Total net revenue $ 1,206 (798) 102 744 (66) 1,188 1,823 3,011 $ 3Q07 1,657 (623) 142 705 (166) 1,715 1,457 3,172 $ 2Q07 1,330 (435) 118 712 (76) 1,649 1,297 2,946 $ 1,900 2,325 93 643 122 5,083 715 5,798 $ 618 30 200 30 227 31 1,241 1,312 2,553 1,561 1,450 3,011 1,178 1,200 2,378 372 76 296 368 (26) 394 7 0.19 87 57 $ $ $ $ 44 % NM 3 (5) (242) 166 27 82 164 30 3,132 1,602 4,734 FINANCIAL RATIOS ROE ROA Overhead ratio Compensation expense as a % of total net revenue REVENUE BY BUSINESS Investment banking fees: Advisory Equity underwriting Debt underwriting Total investment banking fees Fixed income markets Equity markets Credit portfolio Total net revenue 1,735 838 105 709 (226) 3,161 2,309 5,470 4Q07 398 30 NONINTEREST EXPENSE Compensation expense Noncompensation expense TOTAL NONINTEREST EXPENSE Income (loss) before income tax expense Income tax expense (benefit) NET INCOME (LOSS) 1Q08 YEAR-TO-DATE 2Q08 Change 1Q08 2Q07 $ % (130) (43) (87) $ (2) % (0.05) 85 41 370 542 823 1,735 2,347 1,079 309 5,470 $ 3,165 1,512 793 5,470 $ $ $ (9) (133) 124 2 0.07 95 49 483 359 364 1,206 466 976 363 3,011 $ 536 1,641 834 3,011 $ $ $ $ % 6 0.17 81 40 646 544 467 1,657 615 578 322 3,172 $ 1,128 1,334 710 3,172 $ $ $ 2008 (9) % (64) 13 10 NM (38) 223 (6) $ 2008 Change 2007 2007 2,941 40 207 1,453 (292) 4,349 4,132 8,481 $ 3,629 5,467 186 1,284 164 10,730 1,322 12,052 (19) % (99) 11 13 NM (59) 213 (30) % 143 - 1,016 60 227 60 2,589 1,265 3,854 $ (36) 152 22 85 21 27 23 4,373 2,914 7,287 5,226 2,459 7,685 (16) 19 (5) 1,810 631 1,179 NM 40 NM (80) NM (67) 4,200 1,481 2,719 (94) NM (89) 23 0.68 66 45 595 267 468 1,330 687 537 392 2,946 $ 1,016 1,389 541 2,946 $ $ $ $ % 238 (69) 307 3 0.08 86 52 560 509 831 1,900 2,445 1,249 204 5,798 (23) 51 126 44 404 11 (15) 82 (34) 6 (1) (9) (4) (14) 51 (6) $ 2,655 2,327 816 5,798 490 (8) (5) 82 19 (35) (3) (6) $ $ $ $ % 26 0.81 64 43 853 901 1,187 2,941 2,813 2,055 672 8,481 $ 3,701 3,153 1,627 8,481 $ $ $ 348 - % 1,032 902 1,695 3,629 5,037 2,788 598 12,052 (17) (30) (19) (44) (26) 12 (30) 6,021 4,578 1,453 12,052 (39) (31) 12 (30) (a) Total net revenue included tax-equivalent adjustments, predominantly due to tax-exempt income from municipal bond investments and income tax credits related to affordable housing investments, of $404 million, $289 million, $230 million, $255 million and $290 million for the quarters ended June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007 and June 30, 2007, respectively, and $693 million and $442 million for year-to-date 2008 and 2007, respectively. (b) Treasury & Securities Services ("TSS") was charged a credit reimbursement related to certain exposures managed within the Investment Bank credit portfolio on behalf of clients shared with TSS. Page 8
  10. 10. JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except headcount and ratio data) QUARTERLY TRENDS 2Q08 SELECTED BALANCE SHEETS DATA (Average) Total assets Trading assets - debt and equity instruments Trading assets - derivative receivables Loans: Loans retained (a) Loans held-for-sale & loans at fair value Total loans Adjusted assets (b) Equity $ Net charge-off (recovery) rate (a) (d) Allowance for loan losses to average loans (a) (d) Allowance for loan losses to nonperforming loans (c) Nonperforming loans to average loans 814,860 367,184 99,395 $ 4Q07 755,828 369,456 90,234 $ 3Q07 735,685 371,842 74,659 $ 2Q07 710,665 372,212 63,017 $ 696,230 359,387 58,520 8 % (1) 10 2008 17 2 70 % $ 2008 Change 2007 2007 785,344 368,320 94,814 $ 677,581 347,320 57,465 16 6 65 76,239 20,440 96,679 676,777 23,319 $ 74,106 19,612 93,718 662,419 22,000 68,928 24,977 93,905 644,573 21,000 61,919 17,315 79,234 625,619 21,000 59,065 14,794 73,859 603,839 21,000 3 4 3 2 6 29 38 31 12 11 75,173 20,026 95,199 669,598 22,659 59,019 14,242 73,261 588,016 21,000 27 41 30 14 8 37,057 Headcount CREDIT DATA AND QUALITY STATISTICS Net charge-offs (recoveries) Nonperforming assets: Nonperforming loans (c) Other nonperforming assets Allowance for credit losses: Allowance for loan losses Allowance for lending-related commitments Total allowance for credit losses 1Q08 YEAR-TO-DATE 2Q08 Change 1Q08 2Q07 25,780 25,543 25,691 25,356 44 46 37,057 25,356 46 NM 50 (8) $ 13 $ (9) $ 67 $ (16) 313 177 321 118 353 100 265 60 72 47 (2) 50 335 277 2,429 469 2,898 1,891 607 2,498 1,329 560 1,889 1,112 568 1,680 1,037 487 1,524 28 (23) 16 134 (4) 90 (0.04) % 3.19 (e) 843 0.32 0.07 2.55 683 0.34 % (e) (0.05) % 1.93 439 0.38 0.43 1.80 585 0.33 % (0.11) % 1.76 2,206 0.10 $ 5 (22) NM 313 177 72 47 335 277 2,429 469 2,898 1,037 487 1,524 0.01 3.23 843 0.33 $ % (e) 134 (4) 90 (0.08) % 1.76 2,206 0.10 (a) Loans retained included credit portfolio loans, leveraged leases and other accrual loans, and excluded loans at fair value. (b) Adjusted assets, a non-GAAP financial measure, equals total assets minus (1) securities purchased under resale agreements and securities borrowed less securities sold, not yet purchased; (2) assets of variable interest entities ("VIEs") consolidated under FIN 46R; (3) cash and securities segregated and on deposit for regulatory and other purposes; and (4) goodwill and intangibles. The amount of adjusted assets is presented to assist the reader in comparing the Investment Bank's ("IB") asset and capital levels to other investment banks in the securities industry. Asset-to-equity leverage ratios are commonly used as one measure to assess a company’s capital adequacy. The IB believes an adjusted asset amount that excludes the assets discussed above, which are considered to have a low risk profile, provides a more meaningful measure of balance sheet leverage in the securities industry. (c) Nonperforming loans included loans held-for-sale and loans at fair value of $25 million, $44 million, $50 million, $75 million and $25 million at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007 and June 30, 2007, respectively, which were excluded from the allowance coverage ratios. Nonperforming loans excluded distressed loans held-for-sale that were purchased as part of IB's proprietary activities. (d) Loans held-for-sale & loans at fair value were excluded when calculating the allowance coverage ratio and net charge-off (recovery) rate. (e) Excluding the impact of a loan originated in March, 2008 to Bear Stearns, the adjusted ratio would be 3.46%, 2.61% and 3.40% for the quarters ended June 30, 2008 and March 31, 2008, and the six months ended June 30, 2008, respectively. The average balance of the loan extended to Bear Stearns was $6.0 billion, $1.7 billion and $3.8 billion for the quarters ended June 30, 2008 and March 31, 2008, and the six months ended June 30, 2008, respectively. Page 9 %
  11. 11. JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio and rankings data) QUARTERLY TRENDS 2Q08 MARKET RISK - AVERAGE TRADING AND CREDIT PORTFOLIO VAR (a) Trading activities: Fixed income $ Foreign exchange Equities Commodities and other Diversification (b) Total trading VAR (c) 148 26 30 31 (92) 143 Credit portfolio VAR (d) Diversification (b) Total trading and credit portfolio VAR 35 (36) 142 MARKET SHARES AND RANKINGS (e) Global debt, equity and equity-related Global syndicated loans Global long-term debt (f) Global equity and equity-related (g) Global announced M&A (h) U.S. debt, equity and equity-related U.S. syndicated loans U.S. long-term debt (f) U.S. equity and equity-related (g) U.S. announced M&A (h) $ 1Q08 $ $ 120 35 31 28 (92) 122 30 (30) 122 June 30, 2008 YTD Market Share Rankings 9% #1 13% #1 9% #1 11% #1 27% #3 15% #1 30% #1 15% #1 13% #3 41% #3 4Q07 $ $ 103 31 63 29 (102) 124 26 (27) 123 YEAR-TO-DATE 3Q07 $ $ 98 23 35 28 (72) 112 17 (22) 107 2Q07 $ $ 2Q08 Change 1Q08 2Q07 74 20 51 40 (73) 112 23 % (26) (3) 11 17 12 (14) 110 17 (20) 16 100 % 30 (41) (23) (26) 28 192 (157) 29 2008 $ $ 2007 134 30 31 29 (91) 133 60 19 46 37 (65) 97 33 (34) 132 12 (12) 97 2008 Change 2007 123 % 58 (33) (22) (40) 37 175 (183) 36 Full Year 2007 Market Share Rankings 8% #2 13% #1 7% #3 9% #2 27% #4 10% #2 24% #1 10% #2 11% #5 28% #3 (a) Results for second quarter 2008 include one month of the combined Firm's results and two months of heritage JPMorgan Chase results. All prior periods reflect heritage JPMorgan Chase results. (b) Average VARs were less than the sum of the VARs of their market risk components, which was due to risk offsets resulting from portfolio diversification. The diversification effect reflected the fact that the risks were not perfectly correlated. The risk of a portfolio of positions is usually less than the sum of the risks of the positions themselves. (c) Trading VAR includes predominantly all trading activities in IB; however, particular risk parameters of certain products are not fully captured, for example, correlation risk or the credit spread sensitivity of certain mortgage products. Trading VAR does not include VAR related to held-for-sale funded loans and unfunded commitments, nor the debit valuation adjustments ("DVA") taken on derivative and structured liabilities to reflect the credit quality of the Firm. Trading VAR also does not include the MSR portfolio or VAR related to other corporate functions, such as Corporate/Private Equity. (d) Includes VAR on derivative credit valuation adjustments, hedges of the credit valuation adjustment and mark-to-market hedges of the retained loan portfolio, which are all reported in principal transactions revenue. This VAR does not include the retained loan portfolio. (e) Source: Thomson Reuters Securities data. June 30, 2008 YTD results are pro forma for the acquisition of Bear Stearns. Full year 2007 results represent heritage-JPMorgan Chase only. (f) Includes asset-backed securities, mortgage-backed securities and municipal securities. (g) Includes rights offerings; U.S. domiciled equity and equity-related transactions. (h) Global announced M&A is based upon rank value; all other rankings were based upon proceeds, with full credit to each book manager/equal if joint. Because of joint assignments, market share of all participants will add up to more than 100%. Global and U.S. announced M&A market share and ranking for 2007 include transactions withdrawn since December 31, 2007. U.S. announced M&A represents any U.S. involvement ranking. Page 10
  12. 12. JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS (in millions, except ratio and headcount data) QUARTERLY TRENDS 2Q08 INCOME STATEMENT REVENUE Lending & deposit-related fees Asset management, administration and commissions Securities gains (losses) Mortgage fees and related income Credit card income All other income Noninterest revenue Net interest income TOTAL NET REVENUE $ 1Q08 497 375 696 194 198 1,960 3,055 5,015 $ 4Q07 461 377 525 174 154 1,691 3,011 4,702 $ YEAR-TO-DATE 3Q07 496 332 1 888 174 219 2,110 2,705 4,815 $ 2Q08 Change 1Q08 2Q07 2Q07 492 336 229 167 296 1,520 2,681 4,201 $ 470 344 495 163 212 1,684 2,673 4,357 Provision for credit losses 1,332 2,492 1,051 680 587 NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE 1,184 1,386 100 2,670 1,160 1,310 100 2,570 1,113 1,313 114 2,540 1,087 1,265 117 2,469 Income (loss) before income tax expense Income tax expense (benefit) NET INCOME (LOSS) 1,013 407 606 1,224 472 752 1,052 413 639 8 % (1) 33 11 29 16 1 7 $ FINANCIAL RATIOS ROE Overhead ratio Overhead ratio excluding core deposit intangibles (a) SELECTED BALANCE SHEETS (Ending) Assets Loans: Loans retained Loans held-for-sale & loans at fair value (b) Total loans Deposits SELECTED BALANCE SHEETS (Average) Assets Loans: Loans retained Loans held-for-sale & loans at fair value (b) Total loans Deposits Equity Headcount 14 53 51 $ 230,695 $ % 232,725 $ (5) % 55 53 $ 187,595 16,282 203,877 223,121 $ (360) (133) (227) 227,916 19 53 50 $ 184,211 18,000 202,211 230,854 $ 227,560 225,908 $ % 16 59 56 $ 181,016 16,541 197,557 221,129 $ 221,557 216,754 214,852 6 % 9 41 19 (7) 16 14 15 $ 2008 Change 2007 2007 958 752 1,221 368 352 3,651 6,066 9,717 $ 893 607 977 305 391 3,173 5,290 8,463 7 % 24 25 21 (10) 15 15 15 335 $ % (47) 127 3,824 879 1,104 1,264 116 2,484 2 6 4 7 10 (14) 7 2,344 2,696 200 5,240 2,169 2,488 234 4,891 8 8 (15) 7 1,286 501 785 NM NM NM (21) (19) (23) 653 274 379 2,693 1,049 1,644 (76) (74) (77) 20 57 54 $ $ $ % 4 54 52 217,421 1 6 166,992 23,501 190,493 217,689 172,498 18,274 190,772 216,135 $ 2008 2 (10) 1 (3) 12 (31) 7 2 216,692 2 7 $ 230,695 $ % 21 58 55 $ 230,143 $ 217,421 6 166,992 23,501 190,493 217,689 187,595 16,282 203,877 223,121 $ % 12 (31) 7 2 216,912 6 185,993 20,492 206,485 226,487 17,000 182,220 17,841 200,061 225,555 17,000 176,140 17,538 193,678 219,226 16,000 168,495 19,560 188,055 216,904 16,000 165,136 25,166 190,302 219,171 16,000 2 15 3 - 13 (19) 9 3 6 184,106 19,167 203,273 226,021 17,000 163,946 26,692 190,638 218,058 16,000 12 (28) 7 4 6 69,550 70,095 69,465 68,528 68,254 (1) 2 69,550 68,254 2 (a) Retail Financial Services uses the overhead ratio (excluding the amortization of core deposit intangibles ("CDI")), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in the overhead ratio calculation results in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this method would result in an improving overhead ratio over time, all things remaining equal. This non-GAAP ratio excludes Regional Banking's core deposit intangible amortization expense related to The Bank of New York transaction and the Bank One merger of $99 million, $99 million, $113 million, $116 million and $115 million for the quarters ending June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively, and $198 million and $231 million for year-to-date 2008 and 2007, respectively. (b) Loans included prime mortgage loans originated with the intent to sell, which were accounted for at fair value. These loans, classified as trading assets on the Consolidated balance sheets, totaled $14.1 billion, $13.5 billion, $12.6 billion, $14.4 billion and $15.2 billion at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively. Average loans included prime mortgage loans, classified as trading assets on the Consolidated balance sheets, of $16.9 billion, $13.4 billion, $13.5 billion, $14.1 billion and $13.5 billion for the quarters ended June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively, and $15.2 billion and $10.0 billion for the year-to-date 2008 and 2007, respectively. Page 11
  13. 13. JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data) QUARTERLY TRENDS 2Q08 CREDIT DATA AND QUALITY STATISTICS Net charge-offs Nonperforming loans (a) (b) Nonperforming assets (a) (b) Allowance for loan losses $ Net charge-off rate (c) (d) Allowance for loan losses to ending loans (c) Allowance for loan losses to nonperforming loans (c) Nonperforming loans to total loans 1Q08 941 3,873 4,481 4,475 1.99 2.39 121 1.90 $ % 4Q07 789 3,292 3,824 4,208 1.71 2.28 133 1.63 $ % YEAR-TO-DATE 3Q07 522 2,704 3,190 2,634 1.17 1.46 100 1.37 $ % 2Q08 Change 1Q08 2Q07 2Q07 350 1,991 2,404 2,105 0.82 1.22 107 1.04 $ % 270 1,760 2,099 1,772 0.66 1.06 115 0.92 19 18 17 6 % 249 120 113 153 2008 % $ % 2008 Change 2007 2007 1,730 3,873 4,481 4,475 1.85 2.39 121 1.90 $ % 455 1,760 2,099 1,772 0.56 1.06 115 0.92 280 120 113 153 % REGIONAL BANKING Noninterest revenue Net interest income Total net revenue Provision for credit losses Noninterest expense Income (loss) before income tax expense Net income (loss) ROE Overhead ratio Overhead ratio excluding core deposit intangibles (e) $ 1,022 2,571 3,593 1,213 1,778 602 354 11 49 47 $ % 878 2,543 3,421 2,324 1,794 (697) (433) (14) % 52 50 $ 940 2,363 3,303 915 1,785 603 371 12 54 51 $ % 1,013 2,325 3,338 574 1,760 1,004 611 21 53 49 $ % 977 2,296 3,273 494 1,749 1,030 629 21 53 50 16 1 5 (48) (1) NM NM % 5 12 10 146 2 (42) (44) $ 1,900 5,114 7,014 3,537 3,572 (95) (79) (1) % 51 48 $ 1,770 4,595 6,365 727 3,478 2,160 1,319 23 55 51 7 11 10 387 3 NM NM % (a) Nonperforming loans included loans held-for-sale and loans accounted for at fair value of $180 million, $129 million, $69 million, $17 million and $217 million at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively. Certain of these loans are classified as trading assets on the Consolidated balance sheets. (b) Nonperforming loans and assets excluded (1) loans eligible for repurchase as well as loans repurchased from Governmental National Mortgage Association ("GNMA") pools that are insured by U.S. government agencies of $1.9 billion, $1.8 billion, $1.5 billion, $1.3 billion and $1.2 billion at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively, and (2) education 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 $ 371 million, $252 million, $279 million, $241 million and $200 million at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively. These amounts for GNMA and education loans are excluded, as reimbursement is proceeding normally. (c) Loans held-for-sale and loans accounted for at fair value under SFAS 159 were excluded when calculating the allowance coverage ratio and the net charge-off rate. (d) The net charge-off rate for the quarters ended June 30, 2008, March 31, 2008 and December 31, 2007, excluded $19 million, $14 million and $2 million, respectively, and the six months ended June 30, 2008, excluded $33 million of charge-offs related to prime mortgage loans held by Corporate/Private Equity. (e) Regional Banking uses the overhead ratio (excluding the amortization of core deposit intangibles ("CDI")), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in the overhead ratio calculation results in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this inclusion would result in an improving overhead ratio over time, all things remaining equal. This non-GAAP ratio excludes Regional Banking's core deposit intangible amortization expense related to The Bank of New York transaction and the Bank One merger of $99 million, $99 million, $113 million, $116 million and $115 million for the quarters ended June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively, and $198 million and $231 million for year-to-date 2008 and 2007, respectively. Page 12 %
  14. 14. JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) QUARTERLY TRENDS 2Q08 1Q08 4Q07 YEAR-TO-DATE 3Q07 2Q08 Change 1Q08 2Q07 2Q07 2008 2008 Change 2007 2007 REGIONAL BANKING (continued) BUSINESS METRICS (in billions) Home equity origination volume End of period loans owned: Home equity Mortgage (a) Business banking Education Other loans (b) Total end of period loans End of period deposits: Checking Savings Time and other Total end of period deposits Average loans owned: Home equity Mortgage loans (a) Business banking Education (c) Other loans (b) Total average loans (c) Average deposits: Checking Savings Time and other Total average deposits Average assets Average equity CREDIT DATA AND QUALITY STATISTICS 30+ day delinquency rate (d) (e) Net charge-offs Home equity Mortgage Business banking Other loans Total net charge-offs Net charge-off rate Home equity Mortgage (f) Business banking Other loans Total net charge-off rate (c) (f) Nonperforming assets (g) $ 5.3 $ 6.7 $ 9.8 $ 11.2 $ 14.6 $ 95.1 14.9 16.4 13.0 1.1 140.5 $ 95.0 15.9 15.8 12.4 1.1 140.2 $ 94.8 15.7 15.4 11.0 2.3 139.2 $ 93.0 12.3 14.9 10.2 2.4 132.8 $ 91.0 8.8 14.6 10.2 2.5 127.1 $ 69.1 105.8 37.0 211.9 $ 69.1 105.4 44.6 219.1 $ 67.0 96.0 48.7 211.7 $ 64.5 95.7 46.5 206.7 $ $ 95.1 15.6 16.1 12.7 1.1 140.6 $ 95.0 15.8 15.6 12.0 1.5 139.9 $ 94.0 13.7 15.1 10.6 2.3 135.7 $ 91.8 9.9 14.8 9.8 2.4 128.7 $ 68.5 105.8 39.6 213.9 149.3 12.4 $ 66.3 100.3 47.7 214.3 149.9 12.4 $ 64.5 96.3 47.7 208.5 147.1 11.8 $ 64.9 97.1 43.3 205.3 140.6 11.8 3.61 $ 511 211 51 48 821 2.16 4.95 1.27 1.80 2.35 $ 3,865 3.23 % $ 447 163 40 21 671 1.89 3.79 1.03 0.89 1.94 % $ 3,348 3.03 % $ 248 73 38 28 387 1.05 2.06 1.00 1.21 1.16 % $ 2,879 2.39 % $ $ 2,206 $ 12.0 $ 27.3 (6) 4 5 - 5 69 12 27 (56) 11 $ 95.1 14.9 16.4 13.0 1.1 140.5 $ 91.0 8.8 14.6 10.2 2.5 127.1 5 69 12 27 (56) 11 67.3 97.7 41.9 206.9 (17) (3) 3 8 (12) 2 $ 69.1 105.8 37.0 211.9 $ 67.3 97.7 41.9 206.9 3 8 (12) 2 $ 89.2 8.8 14.5 10.5 2.4 125.4 (1) 3 6 (27) 1 7 77 11 21 (54) 12 $ 95.0 15.7 15.9 12.4 1.3 140.3 $ 87.8 8.8 14.4 10.8 2.7 124.5 8 78 10 15 (52) 13 $ 150 40 33 23 246 0.65 1.60 0.88 1.01 0.78 % (64) % 67.2 98.4 41.7 207.3 137.7 11.8 3 5 (17) - 2 8 (5) 3 8 5 $ 67.4 103.1 43.6 214.1 149.6 12.4 $ 67.3 97.6 42.1 207.0 136.8 11.8 6 4 3 9 5 1.88 % $ $ 1,751 3.61 % 98 26 30 52 206 0.44 1.19 0.83 2.32 0.68 % (21) % 14 29 28 129 22 421 NM 70 (8) 299 $ 958 374 91 69 1,492 2.03 4.37 1.15 1.37 2.15 % 15 121 $ 3,865 1.88 % $ $ % 166 46 55 65 332 0.38 1.05 0.77 1.39 0.56 % (56) % 477 NM 65 6 349 % 1,751 121 (a) Balance reported predominantly reflected subprime mortgage loans owned. (b) Included commercial loans derived from community development activities prior to March 31, 2008. (c) Average loans included loans held-for-sale of $3.1 billion, $4.0 billion, $3.7 billion, $3.2 billion and $3.9 billion for the quarters ended June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively, and $3.6 billion and $4.1 billion for year-to-date 2008 and 2007, respectively. These amounts were excluded when calculating the net charge-off rate. (d) Excluded loans eligible for repurchase as well as loans repurchased from GNMA pools that are insured by U.S. government agencies of $1.5 billion, $1.5 billion, $1.2 billion, $979 million and $879 million at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively. These amounts are excluded as reimbursement is proceeding normally. (e) Excluded loans that are 30 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program of $594 million, $534 million, $663 million, $590 million and $523 million at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively. These amounts are excluded as reimbursement is proceeding normally. (f) The mortgage and total net charge-off rate for the quarters ended June 30, 2008, March 31, 2008 and December 31, 2007, excluded $19 million, $14 million and $2 million, respectively, and for the six months ended June 30, 2008, excluded $33 million of charge-offs related to prime mortgage loans held by the Corporate/Private Equity sector. (g) Nonperforming assets excluded (1) loans eligible for repurchase as well as loans repurchased from Governmental National Mortgage Association ("GNMA") pools that are insured by U.S. government agencies of $1.9 billion, $1.8 billion, $1.5 billion, $1.3 billion and $1.2 billion at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively, and (2) education 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 $371 million, $252 million, $279 million, $241 million and $200 million at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively. These amounts for GNMA and education loans are excluded, as reimbursement is proceeding normally. Page 13
  15. 15. JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) QUARTERLY TRENDS 2Q08 1Q08 4Q07 YEAR-TO-DATE 3Q07 2Q08 Change 1Q08 2Q07 2Q07 2008 2008 Change 2007 2007 REGIONAL BANKING (continued) RETAIL BRANCH BUSINESS METRICS Investment sales volume $ Number of: Branches ATMs Personal bankers Sales specialists Active online customers (in thousands) Checking accounts (in thousands) 5,211 $ 3,157 9,310 9,995 4,116 7,180 11,336 4,084 $ 3,146 9,237 9,826 4,133 6,454 11,068 4,114 $ 3,152 9,186 9,650 4,105 5,918 10,839 4,346 $ 28 3,089 8,649 9,025 3,915 5,448 10,356 1 2 11 2 2 8 11 5 32 9 463 4 29 615 3,096 8,943 9,503 4,025 5,706 10,644 5,117 7 10 % 2 % $ 9,295 $ 3,157 9,310 9,995 4,116 7,180 11,336 9,900 (6) % 3,089 8,649 9,025 3,915 5,448 10,356 2 8 11 5 32 9 863 36 1,216 8 1,060 (761) 299 (1,141) 374 (16) (8) (77) 23 34 1,237 984 253 155 35 20 93 94 MORTGAGE BANKING Production revenue $ Net mortgage servicing revenue: Loan servicing revenue Changes in MSR asset fair value: Due to inputs or assumptions in model Other changes in fair value Total changes in MSR asset fair value Derivative valuation adjustments and other Total net mortgage servicing revenue $ 22 $ 66 $ (810) (377) (1,187) 788 230 1,059 518 541 332 % 176 629 (766) (393) (1,159) 1,232 738 751 536 215 132 % 321 665 (632) (425) (1,057) 598 175 922 649 273 169 28 576 634 1,519 (394) 1,125 (1,478) 325 ROE Mortgage origination volume by channel (in billions) Retail Wholesale Correspondent CNT (negotiated transactions) Total $ 678 Total net revenue Noninterest expense Income (loss) before income tax expense Net income (loss) Business metrics (in billions) Third-party mortgage loans serviced (ending) MSR net carrying value (ending) Avg mortgage loans held-for-sale & loans at fair value (a) Average assets Average equity 597 952 (383) 569 (1,014) 170 406 485 (79) (48) 14 1,173 $ 1,312 60 (3) 98 (46) 91 23 21 27 28 633 516 117 71 NM % NM 7 NM NM 86 $ 887 (819) 68 (880) 500 46 26 133 138 1,673 1,185 488 301 % 25 % 16 % $ 659.1 10.9 17.4 36.2 2.4 $ 627.1 8.4 13.8 32.2 2.4 $ 614.7 8.6 13.8 30.6 2.0 $ 600.0 9.1 16.4 31.4 2.0 $ 572.4 9.5 21.3 35.6 2.0 5 30 26 12 - 15 15 (18) 2 20 $ 659.1 10.9 15.6 34.2 2.4 $ 572.4 9.5 22.6 36.8 2.0 15 15 (31) (7) 20 $ 12.5 9.1 17.0 17.5 56.1 $ 12.6 10.6 12.0 11.9 47.1 $ 9.9 10.2 9.5 10.4 40.0 $ 11.1 9.8 7.2 11.1 39.2 $ 13.6 12.8 6.4 11.3 44.1 (1) (14) 42 47 19 (8) (29) 166 55 27 $ 25.1 19.7 29.0 29.4 103.2 $ 24.5 22.7 11.2 21.8 80.2 2 (13) 159 35 29 (a) Included $16.9 billion, $13.4 billion, $13.5 billion, $14.1 billion and $13.5 billion of prime mortgage loans at fair value for the quarters ended June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively, and $15.2 billion and $10.0 billion for year-to-date 2008 and 2007, respectively. These loans are classified as trading assets on the Consolidated balance sheets. Page 14
  16. 16. JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) QUARTERLY TRENDS 2Q08 1Q08 4Q07 YEAR-TO-DATE 3Q07 2Q08 Change 1Q08 2Q07 2Q07 2008 2008 Change 2007 2007 AUTO FINANCE Noninterest revenue Net interest income Total net revenue Provision for credit losses Noninterest expense Income before income tax expense Net income $ ROE ROA Business metrics (in billions) Auto origination volume End-of-period loans and lease related assets Loans outstanding Lease financing receivables Operating lease assets Total end-of-period loans and lease related assets Average loans and lease related assets Loans outstanding Lease financing receivables Operating lease assets Total average loans and lease related assets Average assets Average equity Credit quality statistics 30+ day delinquency rate Net charge-offs Loans Lease receivables Total net charge-offs Net charge-off rate Loans Lease receivables Total net charge-off rate Nonperforming assets 155 343 498 117 243 138 83 15 0.71 $ % 151 379 530 168 240 122 74 13 0.65 $ % 142 308 450 133 237 80 49 9 0.44 $ % 140 307 447 96 224 127 76 14 0.70 $ % 138 312 450 92 219 139 85 15 0.79 3 % (9) (6) (30) 1 13 12 12 % 10 11 27 11 (1) (2) $ % 306 722 1,028 285 483 260 157 14 0.68 $ % 269 591 860 151 429 280 170 16 0.79 14 % 22 20 89 13 (7) (8) % $ 5.6 $ 7.2 $ 5.6 $ 5.2 $ 5.3 (22) 6 $ 12.8 $ 10.5 22 $ 44.7 0.2 2.1 47.0 $ 44.4 0.3 2.0 46.7 $ 42.0 0.3 1.9 44.2 $ 40.3 0.6 1.8 42.7 $ 40.4 0.8 1.8 43.0 1 (33) 5 1 11 (75) 17 9 $ 44.7 0.2 2.1 47.0 $ 40.4 0.8 1.8 43.0 11 (75) 17 9 $ 44.7 0.2 2.1 47.0 47.3 2.3 $ 42.9 0.3 1.9 45.1 45.5 2.3 $ 41.1 0.5 1.9 43.5 43.8 2.2 $ 39.9 0.7 1.8 42.4 42.9 2.2 $ 40.1 1.0 1.7 42.8 43.4 2.2 4 (33) 11 4 4 - 11 (80) 24 10 9 5 $ 43.8 0.3 2.0 46.1 46.4 2.3 $ 39.8 1.2 1.7 42.7 43.3 2.2 10 (75) 18 8 7 5 1.57 $ $ % 118 1 119 1.06 2.01 1.07 164 1.44 $ % $ % 117 1 118 1.10 1.34 1.10 160 1.85 $ % $ % 132 1 133 1.27 0.79 1.27 188 1.65 $ % $ % 98 1 99 0.97 0.57 0.97 156 1.43 $ % $ % 62 1 63 0.62 0.40 0.61 131 1.57 1 1 90 89 $ % 2 25 $ % 235 2 237 1.08 1.34 1.08 164 1.43 $ % $ % 120 2 122 0.61 0.34 0.60 131 96 94 % 25 Page 15
  17. 17. JPMORGAN CHASE & CO. CARD SERVICES - MANAGED BASIS FINANCIAL HIGHLIGHTS (in millions, except ratio data and where otherwise noted) QUARTERLY TRENDS 2Q08 INCOME STATEMENT REVENUE Credit card income All other income Noninterest revenue Net interest income TOTAL NET REVENUE $ 1Q08 673 91 764 3,011 3,775 $ 4Q07 600 119 719 3,185 3,904 $ YEAR-TO-DATE 3Q07 712 122 834 3,137 3,971 $ 2Q08 Change 1Q08 2Q07 2Q07 692 67 759 3,108 3,867 $ 682 80 762 2,955 3,717 12 % (24) 6 (5) (3) 2008 (1) % 14 2 2 $ 2008 Change 2007 2007 1,273 210 1,483 6,196 7,679 $ 1,281 172 1,453 5,944 7,397 (1) % 22 2 4 4 Provision for credit losses 2,194 1,670 1,788 1,363 1,331 31 65 3,864 2,560 51 NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE 258 763 164 1,185 267 841 164 1,272 260 790 173 1,223 256 827 179 1,262 251 753 184 1,188 (3) (9) (7) 3 1 (11) - 525 1,604 328 2,457 505 1,556 368 2,429 4 3 (11) 1 Income before income tax expense Income tax expense NET INCOME $ 396 146 250 $ 962 353 609 $ 960 351 609 $ 1,242 456 786 $ 1,198 439 759 (59) (59) (59) (67) (67) (67) $ 1,358 499 859 $ 2,408 884 1,524 (44) (44) (44) Memo: Net securitization gains $ 36 $ 70 $ 28 $ - $ 16 (49) 125 $ 106 $ 39 FINANCIAL METRICS ROE Overhead ratio % of average managed outstandings: Net interest income Provision for credit losses Noninterest revenue Risk adjusted margin (a) Noninterest expense Pretax income (ROO) (b) Net income BUSINESS METRICS Charge volume (in billions) Net accounts opened (in millions) Credit cards issued (in millions) Number of registered internet customers (in millions) Merchant acquiring business (c) Bank card volume (in billions) Total transactions (in billions) 7 31 % 17 33 7.92 5.77 2.01 4.16 3.12 1.04 0.66 % 17 31 8.34 4.37 1.88 5.85 3.33 2.52 1.60 % 22 33 8.20 4.67 2.18 5.71 3.20 2.51 1.59 % 22 32 8.29 3.64 2.03 6.68 3.37 3.31 2.10 % 12 32 8.04 3.62 2.07 6.49 3.23 3.26 2.06 % 22 33 8.13 5.07 1.95 5.01 3.23 1.78 1.13 172 % 8.08 3.48 1.97 6.57 3.30 3.27 2.07 $ 93.6 3.6 157.6 28.0 $ 85.4 3.4 156.4 26.7 $ 95.5 5.3 155.0 28.3 $ 89.8 4.0 153.6 26.4 $ 88.0 3.7 150.9 24.6 10 6 1 5 6 (3) 4 14 $ 179.0 7.0 157.6 28.0 $ 169.3 7.1 150.9 24.6 6 (1) 4 14 $ 199.3 5.6 $ 182.4 5.2 $ 194.4 5.4 $ 181.4 5.0 $ 179.7 4.8 9 8 11 17 $ 381.7 10.8 $ 343.3 9.3 11 16 (a) Represents total net revenue less provision for credit losses. (b) Pretax return on average managed outstandings. (c) Represents 100% of the merchant acquiring business. Page 16
  18. 18. JPMORGAN CHASE & CO. CARD SERVICES - MANAGED BASIS FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except headcount and ratio data) QUARTERLY TRENDS 2Q08 SELECTED ENDING BALANCES Loans: Loans on balance sheets Securitized loans Managed loans 1Q08 $ 76,278 79,120 $ 155,398 $ $ 75,888 75,062 150,950 $ 161,601 $ $ $ 4Q07 $ 159,602 $ $ 75,630 77,195 $ 152,825 $ Equity $ $ Headcount MANAGED CREDIT QUALITY STATISTICS Net charge-offs Net charge-off rate 19,570 $ Managed delinquency ratios 30+ days 90+ days Allowance for loan losses (a) Allowance for loan losses to period-end loans (a) 1,894 4.98 3.46 1.76 $ 3,705 4.86 $ 158,183 $ 79,028 72,715 151,743 $ $ 14,100 14,100 18,931 $ % % 3.66 1.84 $ % 1,670 4.37 3,404 4.49 $ $ % % 1,488 3.89 3.48 1.65 $ 3,407 4.04 $ $ 5 $ 160,601 $ 155,333 3 (5) 4 - (4) 13 4 $ $ $ 77,537 75,652 153,189 $ 80,458 67,959 148,417 (4) 11 3 14,100 - - $ 14,100 $ 14,100 - 18,913 $ 3 3 18,913 3 13 42 $ 154,956 $ 154,406 1 $ $ 79,993 68,673 148,666 $ 79,000 68,428 147,428 $ 14,100 $ 18,887 $ % 3.25 1.50 $ % 1,363 3.64 3,107 3.91 $ % % 3.00 1.42 $ % 1,331 3.62 3,096 3.85 % (5) % 17 5 $ 2008 Change 2007 2007 80,495 67,506 148,001 1 5 3 % 2008 76,278 79,120 155,398 80,495 67,506 148,001 18,554 % 2Q07 79,409 69,643 149,052 $ 79,445 74,108 153,553 14,100 3Q07 84,352 72,701 157,053 SELECTED AVERAGE BALANCES Managed assets Loans: Loans on balance sheets Securitized loans Managed average loans $ YEAR-TO-DATE 2Q08 Change 1Q08 2Q07 19,570 $ % % 3,564 4.68 3.46 1.76 9 % 20 $ $ 3,705 4.86 $ % % 3.00 1.42 $ % 2,645 3.59 3,096 3.85 (5) % 17 5 35 % % 20 % (a) Loans on a reported basis. Page 17
  19. 19. JPMORGAN CHASE & CO. CARD RECONCILIATION OF REPORTED AND MANAGED DATA (in millions) QUARTERLY TRENDS 2Q08 INCOME STATEMENT DATA (a) Credit card income Reported Securitization adjustments Managed credit card income Net interest income Reported Securitization adjustments Managed net interest income Total net revenue Reported Securitization adjustments Managed total net revenue Provision for credit losses Reported Securitization adjustments Managed provision for credit losses BALANCE SHEETS - AVERAGE BALANCES (a) Total average assets Reported Securitization adjustments Managed average assets CREDIT QUALITY STATISTICS (a) Net charge-offs Reported Securitization adjustments Managed net charge-offs $ $ $ $ $ $ $ $ 1,516 (843) 673 1,338 1,673 3,011 2,945 830 3,775 1,364 830 2,194 $ 1Q08 $ $ $ $ $ $ $ $ 87,021 74,580 $ 161,601 $ $ $ $ 1,064 830 1,894 $ $ 1,537 (937) 600 1,567 1,618 3,185 3,223 681 3,904 989 681 1,670 88,013 71,589 159,602 989 681 1,670 4Q07 $ $ $ $ $ $ $ $ $ $ $ $ 1,597 (885) 712 1,633 1,504 3,137 3,352 619 3,971 1,169 619 1,788 88,244 69,939 158,183 869 619 1,488 YEAR-TO-DATE 3Q07 $ $ $ $ $ $ $ $ $ $ $ $ 1,528 (836) 692 1,694 1,414 3,108 3,289 578 3,867 785 578 1,363 88,856 66,100 154,956 785 578 1,363 2Q07 $ $ $ $ $ $ $ $ $ $ $ $ 1,470 (788) 682 2Q08 Change 1Q08 2Q07 (1) % 10 12 2008 3 % (7) (1) $ $ $ 8 % (16) (1) (15) 21 2 3,127 590 3,717 (9) 22 (3) (6) 41 2 741 590 1,331 38 22 31 84 41 65 (1) 4 1 (2) 13 5 87,517 73,084 $ 160,601 89,814 65,519 $ 155,333 (3) 12 3 8 22 13 44 41 42 $ $ 40 28 35 741 590 1,331 $ $ $ $ 6,168 1,511 7,679 2,353 1,511 3,864 $ $ 2,053 1,511 3,564 $ 2,815 (1,534) 1,281 (15) 3 (5) $ 2,905 3,291 6,196 $ 2008 Change 2007 1,577 1,378 2,955 88,486 65,920 154,406 $ 3,053 (1,780) 1,273 2007 $ $ $ $ $ 3,227 2,717 5,944 (10) 21 4 6,214 1,183 7,397 (1) 28 4 1,377 1,183 2,560 71 28 51 $ $ 1,462 1,183 2,645 (a) JPMorgan Chase uses the concept of “managed receivables” to evaluate the credit performance and overall performance of the underlying credit card loans, both sold and not sold; as the same borrower is continuing to use the credit card for ongoing charges, a borrower’s credit performance will affect both the receivables sold under SFAS 140 and those not sold. Thus, in its disclosures regarding managed receivables, JPMorgan Chase treats the sold receivables as if they were still on the balance sheet in order to disclose the credit performance (such as net charge-off rates) of the entire managed credit card portfolio. Managed results exclude the impact of credit card securitizations on total net revenue, the provision for credit losses, net charge-offs and loan receivables. Securitization does not change reported net income versus managed earnings; however, it does affect the classification of items on the Consolidated Statements of Income and Consolidated Balance Sheets. Page 18
  20. 20. JPMORGAN CHASE & CO. COMMERCIAL BANKING FINANCIAL HIGHLIGHTS (in millions, except ratio data) QUARTERLY TRENDS 2Q08 INCOME STATEMENT REVENUE Lending & deposit-related fees Asset management, administration and commissions All other income (a) Noninterest revenue Net interest income TOTAL NET REVENUE $ Provision for credit losses 1Q08 207 26 150 383 723 1,106 $ 4Q07 193 26 115 334 733 1,067 $ YEAR-TO-DATE 3Q07 172 24 130 326 758 1,084 $ 2Q08 Change 1Q08 2Q07 2Q07 159 24 107 290 719 1,009 $ 158 21 133 312 695 1,007 7 % 30 15 (1) 4 2008 31 24 13 23 4 10 % $ 2008 Change 2007 2007 400 52 265 717 1,456 2,173 $ 316 44 287 647 1,363 2,010 27 % 18 (8) 11 7 8 47 101 105 112 45 (53) 4 148 62 139 NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE 173 290 13 476 178 294 13 485 184 307 13 504 160 300 13 473 182 300 14 496 (3) (1) (2) (5) (3) (7) (4) 351 584 26 961 362 590 29 981 (3) (1) (10) (2) Income before income tax expense Income tax expense NET INCOME 583 228 355 481 189 292 475 187 288 424 166 258 466 182 284 21 21 22 25 25 25 1,064 417 647 967 379 588 10 10 10 (1) 2 34 125 4 8 11 11 13 10 $ 33 14 14 (3) 21 4 8 19 (14) 44 10 MEMO: Revenue by product: Lending Treasury services Investment banking Other Total Commercial Banking revenue IB revenue, gross (b) Revenue by business: Middle Market Banking Mid-Corporate Banking Real Estate Banking Other Total Commercial Banking revenue FINANCIAL RATIOS ROE Overhead ratio $ $ $ $ $ 376 630 91 9 1,106 $ 270 $ 708 235 94 69 1,106 $ 20 43 $ $ $ 379 616 68 4 1,067 $ 203 $ 706 207 97 57 1,067 $ % 17 45 $ $ $ 380 631 70 3 1,084 $ 227 $ 695 239 102 48 1,084 $ % 17 46 $ $ $ 343 594 64 8 1,009 $ 348 569 82 8 1,007 $ 194 $ 236 $ 680 167 108 54 1,009 $ 653 197 109 48 1,007 $ % 15 47 $ % 18 49 % $ $ $ $ 755 1,246 159 13 2,173 $ 696 1,125 158 31 2,010 $ 473 $ 467 $ 1,414 442 191 126 2,173 $ 1,314 409 211 76 2,010 $ 19 44 $ % 19 49 8 11 1 (58) 8 1 8 8 (9) 66 8 % (a) IB-related and commercial card revenue is included in all other income. (b) Represents the total revenue related to investment banking products sold to Commercial Banking ("CB") clients. Page 19
  21. 21. JPMORGAN CHASE & CO. COMMERCIAL BANKING FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio and headcount data) QUARTERLY TRENDS 2Q08 SELECTED BALANCE SHEETS DATA (Average) Total assets Loans: Loans retained Loans held-for-sale & loans at fair value Total loans (a) Liability balances (b) Equity MEMO: Loans by business: Middle Market Banking Mid-Corporate Banking Real Estate Banking Other Total Commercial Banking loans $ 103,469 Net charge-off (recovery) rate (a) Allowance for loan losses to average loans (a) Allowance for loan losses to nonperforming loans (c) Nonperforming loans to average loans $ 70,682 379 71,061 99,404 7,000 $ $ Headcount CREDIT DATA AND QUALITY STATISTICS Net charge-offs (recoveries) Nonperforming loans (c) Allowance for credit losses: Allowance for loan losses (d) Allowance for lending-related commitments Total allowance for credit losses 1Q08 42,879 15,357 7,500 5,325 71,061 $ $ $ $ 1,843 170 2,013 40,111 15,150 7,457 5,313 68,031 $ $ 81 446 0.48 2.65 426 0.66 94,550 $ $ 38,275 15,440 7,347 4,482 65,544 $ $ 33 146 0.21 2.66 1,161 0.22 86,652 $ $ $ $ 20 134 $ 0.13 2.67 1,211 0.22 84,687 1 5 (27) 4 - 20 (49) 19 18 11 37,099 11,692 6,894 4,127 59,812 7 1 1 4 16 31 9 29 19 4,295 37,617 12,076 7,144 4,435 61,272 1,623 236 1,859 % 2008 59,071 741 59,812 84,187 6,300 4,158 1,695 236 1,931 % 2Q07 60,839 433 61,272 88,081 6,700 4,125 1,790 200 1,990 % 3Q07 63,749 1,795 65,544 96,716 6,700 4,075 49 486 0.28 2.61 401 0.68 101,979 67,510 521 68,031 99,477 7,000 4,028 $ 4Q07 YEAR-TO-DATE 2Q08 Change 1Q08 2Q07 (1) (6) (8) 135 1,551 222 1,773 % % 22 (40) 9 NM 260 3 (15) 1 % 19 (23) 14 (0.05) % 2.63 1,149 0.23 $ 2007 102,724 $ $ $ $ 4,028 $ 130 486 $ 1,843 170 2,013 0.38 2.67 401 0.70 23 19 (26) 18 20 11 36,710 11,183 6,984 3,865 58,742 13 36 7 38 18 4,295 41,495 15,253 7,479 5,319 69,546 83,622 58,133 609 58,742 82,976 6,300 69,096 450 69,546 99,441 7,000 $ 2008 Change 2007 (6) (9) 135 1,551 222 1,773 % NM 260 19 (23) 14 (0.03) % 2.67 1,149 0.23 (a) Loans held-for-sale and loans accounted for at fair value were excluded when calculating the allowance coverage ratio and the net charge-off (recovery) rate. (b) Liability balances include deposits and deposits swept to on-balance sheet liabilities such as commercial paper, federal funds purchased and securities sold under repurchase agreements. (c) Nonperforming loans included loans held-for-sale and loans at fair value of $26 million at June 30, 2008, and March 31, 2008. These amounts were excluded when calculating the allowance coverage ratios. There were no nonperforming loans held-for-sale or held at fair value at December 31, 2007, September 30, 2007, and June 30, 2007, respectively. (d) The allowance for loan losses at June 30, 2008, included an amount transferred from Corporate/Private Equity related to loans acquired in the merger with Bear Stearns. Page 20 %
  22. 22. JPMORGAN CHASE & CO. TREASURY & SECURITIES SERVICES FINANCIAL HIGHLIGHTS (in millions, except headcount and ratio data) QUARTERLY TRENDS 2Q08 INCOME STATEMENT REVENUE Lending & deposit-related fees Asset management, administration and commissions All other income Noninterest revenue Net interest income TOTAL NET REVENUE $ Provision for credit losses Credit reimbursement to IB (a) 1Q08 283 846 228 1,357 662 2,019 $ 7 (30) 4Q07 269 820 200 1,289 624 1,913 $ 12 (30) YEAR-TO-DATE 3Q07 247 806 228 1,281 649 1,930 $ 4 (30) 2Q08 Change 1Q08 2Q07 2Q07 244 730 171 1,145 603 1,748 $ 9 (31) 219 828 184 1,231 510 1,741 5 3 14 5 6 6 (30) (42) - % 2008 29 2 24 10 30 16 % $ NM - 2008 Change 2007 2007 552 1,666 428 2,646 1,286 3,932 $ 432 1,514 309 2,255 1,012 3,267 19 (60) 28 10 39 17 27 20 6 (60) 217 - NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE 669 632 16 1,317 641 571 16 1,228 607 598 17 1,222 579 538 17 1,134 609 523 17 1,149 4 11 7 10 21 (6) 15 1,310 1,203 32 2,545 1,167 1,025 32 2,224 12 17 14 Income before income tax expense Income tax expense NET INCOME 665 240 425 643 240 403 674 252 422 574 214 360 562 210 352 3 5 18 14 21 1,308 480 828 977 362 615 34 33 35 720 1,021 1,741 5 6 6 18 14 16 1,409 1,858 3,267 18 22 20 REVENUE BY BUSINESS Treasury Services Worldwide Securities Services TOTAL NET REVENUE $ $ $ FINANCIAL RATIOS ROE Overhead ratio Pretax margin ratio (b) SELECTED AVERAGE BALANCES Total assets Loans (c) Liability balances (d) Equity Headcount 852 1,167 2,019 49 65 33 $ $ 56,192 23,822 268,293 3,500 27,232 $ $ % 813 1,100 1,913 46 64 34 $ $ 57,204 23,086 254,369 3,500 26,561 $ $ % 824 1,106 1,930 56 63 35 $ $ 60,830 23,489 250,645 3,000 25,669 $ $ % 780 968 1,748 48 65 33 $ $ 55,688 20,602 236,381 3,000 25,209 $ $ % 47 66 32 $ $ $ $ % 1,665 2,267 3,932 48 65 33 50,687 20,195 217,514 3,000 (2) 3 5 - 11 18 23 17 25,206 3 8 $ $ 56,698 23,454 261,331 3,500 $ $ % 41 68 30 $ % 48,359 19,575 214,095 3,000 17 20 22 17 25,206 8 27,232 Footnotes: (a) TSS is charged a credit reimbursement related to certain exposures managed within the IB credit portfolio on behalf of clients shared with TSS. (b) 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. (c) Loan balances include wholesale overdrafts, commercial card and trade finance loans. (d) Liability balances include deposits and deposits swept to on-balance sheet liabilities such as commercial paper, federal funds purchased and securities sold under repurchase agreements. Page 21 %
  23. 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, Regional Banking and Asset Management ("AM") lines of business and excludes FX revenue recorded in the IB for TSS-related FX activity. In order to capture the firmwide impact of Treasury Services ("TS") and TSS products and revenue, management reviews firmwide metrics such as liability balances, revenue and overhead ratios in assessing financial performance for TSS. Firmwide metrics are necessary in order to understand the aggregate TSS business. QUARTERLY TRENDS 2Q08 1Q08 TSS FIRMWIDE DISCLOSURES Treasury Services revenue - reported Treasury Services revenue reported in Commercial Banking Treasury Services revenue reported in other lines of business Treasury Services firmwide revenue (a) Worldwide Securities Services revenue Treasury & Securities Services firmwide revenue (a) $ Treasury Services firmwide liability balances (average) (b) Treasury & Securities Services firmwide liability balances (average) (b) $ 230,689 367,670 $ TSS FIRMWIDE FINANCIAL RATIOS Treasury Services firmwide overhead ratio (c) Treasury & Securities Services firmwide overhead ratio (c) FIRMWIDE BUSINESS METRICS Assets under custody (in billions) 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) 852 630 72 1,554 1,167 2,721 54 58 $ 15,476 993 29,063 41,432 618 19,917 $ $ $ % 4Q07 813 616 69 1,498 1,100 2,598 $ 221,716 353,845 55 58 $ $ 15,690 1,004 28,056 40,039 623 19,122 $ % 3Q07 824 631 75 1,530 1,106 2,636 $ $ 218,416 347,361 53 57 $ YEAR-TO-DATE 15,946 984 28,386 42,723 656 18,722 $ % 2Q07 780 594 70 1,444 968 2,412 $ $ 201,671 324,462 54 59 $ 2Q08 Change 1Q08 2Q07 15,614 943 28,031 41,415 731 18,108 $ % 720 569 65 1,354 1,021 2,375 5 2 4 4 6 5 189,214 301,701 4 4 59 60 $ % 2008 18 11 11 15 14 15 22 22 % $ $ $ % 1,665 1,246 141 3,052 2,267 5,319 (1) 2 972 27,779 42,068 767 17,535 (1) 4 3 (1) 4 2 5 (2) (19) 14 $ $ 15,476 1,997 57,119 81,471 1,241 19,917 1,409 1,125 125 2,659 1,858 4,517 18 11 13 15 22 18 $ 187,930 297,072 20 21 $ 226,203 360,758 54 58 15,203 2008 Change 2007 2007 % 59 61 $ % 15,203 2 1,943 54,619 84,467 1,538 17,535 3 5 (4) (19) 14 Footnotes: (a) TSS firmwide FX revenue, which includes FX revenue recorded in TSS and FX revenue associated with TSS customers who are FX customers of the IB, was $222 million, $191 million, $157 million, $144 million and $139 million for the quarters ended June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively, and $413 million and $251 million for year-to-date 2008 and 2007, respectively. This is not included in the TS and TSS firmwide revenue. (b) Firmwide liability balances include TS' liability balances recorded in the Commercial Bank line of business. (c) Overhead ratios have been calculated based upon firmwide revenue and TSS and TS expense, respectively, including those allocated to certain other lines of business. FX revenue and expense recorded in the IB for TSS-related FX activity are not included in this ratio. (d) International electronic funds transfer includes non-US$ ACH and clearing volume. (e) Wholesale cards issued include domestic commercial card, stored value card, prepaid card, and government electronic benefit card products. Page 22 %
  24. 24. JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS (in millions, except ratio, ranking and headcount data) QUARTERLY TRENDS 2Q08 INCOME STATEMENT REVENUE Asset management, administration and commissions All other income Noninterest revenue Net interest income TOTAL NET REVENUE $ Provision for credit losses REVENUE BY CLIENT SEGMENT Private Bank Retail Institutional Private Client Services Bear Stearns Brokerage Total net revenue 1,573 130 1,703 361 2,064 $ 4Q07 1,531 59 1,590 311 1,901 17 $ $ $ FINANCIAL RATIOS ROE Overhead ratio Pretax margin ratio (a) 825 477 21 1,323 647 252 395 $ 765 490 472 299 38 2,064 31 68 31 BUSINESS METRICS Number of: Client advisors Retirement planning services participants Bear Stearns brokers $ 16 886 494 20 1,400 NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE Income before income tax expense Income tax expense NET INCOME 1Q08 $ $ % 1,717 1,505,000 326 1,901 159 2,060 329 2,389 $ $ $ $ % 1,744 1,519,000 - 1,760 152 1,912 293 2,205 $ $ 713 640 754 282 2,389 $ $ % 1,729 1,501,000 - 3 120 7 16 9 6 $ 686 639 603 277 2,205 $ $ % 1,680 1,495,000 - (6) % (25) (8) 23 (3) $ 2008 Change 2007 2007 3,104 189 3,293 672 3,965 $ 3,160 343 3,503 538 4,041 (2) % (45) (6) 25 (2) 33 1 8 3 1,711 971 41 2,723 1,643 907 40 2,590 4 7 2 5 (18) (16) (20) 1,209 458 751 1,471 553 918 (18) (17) (18) 17 5 (4) 3 NM 9 646 602 617 272 2,137 NM 15 22 11 793 300 493 53 63 37 % 2008 7 4 (5) 6 879 456 20 1,355 836 315 521 52 62 38 1,671 173 1,844 293 2,137 (11) 848 498 20 1,366 831 304 527 52 65 35 2Q07 3 1,030 510 19 1,559 655 466 490 290 1,901 29 70 30 3Q07 (1) 562 206 356 YEAR-TO-DATE 2Q08 Change 1Q08 2Q07 18 (19) (24) 10 NM (3) 1,206 1,129 1,168 538 4,041 18 (15) (18) 9 NM (2) $ 1,420 956 962 589 38 3,965 % 1,582 1,477,000 - 30 69 30 (2) (1) NM 9 2 NM (20) $ % 49 64 36 1,717 1,505,000 326 NM % 1,582 1,477,000 - 9 2 NM % of customer assets in 4 & 5 Star Funds (b) 40 % 49 % 55 % 55 % 65 % (18) (38) 40 % 65 % (38) % of AUM in 1st and 2nd quartiles: (c) 1 year 3 years 5 years 51 70 76 % % % 52 73 75 % % % 57 75 76 % % % 47 73 76 % % % 65 77 76 % % % (2) (4) 1 (22) (9) - 51 70 76 % % % 65 77 76 % % % (22) (9) - 51,710 28,695 55,981 3,750 8 7 3 1 26 37 25 35 14,108 6 12 SELECTED BALANCE SHEETS DATA (Average) Total assets Loans (d) Deposits Equity $ Headcount CREDIT DATA AND QUALITY STATISTICS Net charge-offs (recoveries) Nonperforming loans Allowance for loan losses Allowance for lending-related commitments Net charge-off (recovery) rate Allowance for loan losses to average loans Allowance for loan losses to nonperforming loans Nonperforming loans to average loans 65,015 39,264 69,975 5,066 $ 15,840 $ $ 14,955 2 68 147 5 0.02 0.37 216 0.17 60,286 36,628 68,184 5,000 $ % (2) 11 130 6 (0.02) % 0.35 1,182 0.03 55,989 32,627 64,630 4,000 $ 14,799 $ $ 14,510 2 12 112 7 0.02 0.34 933 0.04 53,879 30,928 59,907 4,000 $ % (5) 28 115 6 (0.06) % 0.37 411 0.09 $ (5) 21 105 7 (0.07) % 0.37 500 0.07 NM NM 13 (17) NM 224 40 (29) $ 62,651 37,946 69,079 5,033 $ $ - $ 68 147 5 0.39 216 0.18 % 28 40 25 34 14,108 15,840 48,779 27,176 55,402 3,750 12 (5) 21 105 7 NM 224 40 (29) (0.04) % 0.39 500 0.08 (a) 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. (b) Derived from the following rating services: Morningstar for the United States; Micropal for the United Kingdom, Luxembourg, Hong Kong and Taiwan; and Nomura for Japan. (c) Derived from the following rating services: Lipper for the United States and Taiwan; Micropal for the United Kingdom, Luxembourg and Hong Kong; and Nomura for Japan. (d) Reflects the transfer in 2007 of held-for-investment prime mortgage loans from AM to Corporate within the Corporate/Private Equity segment. Page 23
  25. 25. JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS, CONTINUED (in billions) Jun 30 2008 Assets by asset class Liquidity Fixed income Equities & balanced Alternatives TOTAL ASSETS UNDER MANAGEMENT Custody / brokerage / administration / deposits TOTAL ASSETS UNDER SUPERVISION Assets by client segment Institutional Private Bank Retail Private Client Services Bear Stearns Brokerage TOTAL ASSETS UNDER MANAGEMENT Institutional Private Bank Retail Private Client Services Bear Stearns Brokerage TOTAL ASSETS UNDER SUPERVISION Assets by geographic region U.S. / Canada International TOTAL ASSETS UNDER MANAGEMENT U.S. / Canada International TOTAL ASSETS UNDER SUPERVISION Mutual fund assets by asset class Liquidity Fixed income Equities TOTAL MUTUAL FUND ASSETS $ $ $ $ $ $ $ $ $ $ $ $ 478 199 378 130 1,185 426 1,611 645 196 276 60 8 1,185 Mar 31 2008 $ $ $ $ 646 442 357 106 60 1,611 $ 771 414 1,185 $ 1,093 518 1,611 416 47 179 642 $ $ $ $ $ $ 471 200 390 126 1,187 382 1,569 652 196 279 60 1,187 Dec 31 2007 $ $ $ $ 652 441 366 110 1,569 $ 773 414 1,187 $ 1,063 506 1,569 405 45 186 636 $ $ $ $ $ $ 400 200 472 121 1,193 379 1,572 632 201 300 60 1,193 Sep 30 2007 $ $ $ $ 633 433 394 112 1,572 $ 760 433 1,193 $ 1,032 540 1,572 339 46 224 609 $ $ $ $ $ $ 368 195 481 119 1,163 376 1,539 603 196 304 60 1,163 604 423 399 113 1,539 745 418 1,163 1,022 517 1,539 308 46 235 589 Jun 30 2007 $ $ $ $ $ $ $ $ $ $ $ $ 333 190 467 119 1,109 363 1,472 Jun 30, 2008 Change Mar 31 Jun 30 2008 2007 1 % (1) (3) 3 12 3 44 % 5 (19) 9 7 17 9 565 185 300 59 1,109 (1) (1) NM - 14 6 (8) 2 NM 7 566 402 393 111 1,472 (1) (2) (4) NM 3 14 10 (9) (5) NM 9 700 409 1,109 - 10 1 7 971 501 1,472 3 2 3 13 3 9 3 4 (4) 1 55 (4) (24) 16 268 49 235 552 Page 24
  26. 26. JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS, CONTINUED (in billions) QUARTERLY TRENDS 2Q08 ASSETS UNDER SUPERVISION (continued) Assets under management rollforward Beginning balance Net asset flows: Liquidity Fixed income Equities, balanced & alternative Market / performance / other impacts (a) TOTAL ASSETS UNDER MANAGEMENT Assets under supervision rollforward Beginning balance Net asset flows Market / performance / other impacts (a) TOTAL ASSETS UNDER SUPERVISION $ 1,187 $ 1 (1) (3) 1 1,185 $ $ 1,569 (5) 47 1,611 1Q08 $ 1,193 $ 68 (21) (53) 1,187 $ $ 1,572 52 (55) 1,569 YEAR-TO-DATE 4Q07 $ 1,163 $ 26 3 4 (3) 1,193 $ $ 1,539 37 (4) 1,572 3Q07 $ 1,109 $ 33 (2) 2 21 1,163 $ $ 1,472 41 26 1,539 2Q07 $ 1,053 $ 12 6 12 26 1,109 $ $ 1,395 38 39 1,472 2008 $ 1,193 $ 69 (1) (24) (52) 1,185 $ $ 1,572 47 (8) 1,611 2007 $ 1,013 $ 19 8 22 47 1,109 $ $ 1,347 65 60 1,472 (a) Second quarter 2008 reflects $15 billion for assets under management and $68 billion for assets under supervision from the Bear Stearns acquisition on May 30, 2008. Page 25
  27. 27. JPMORGAN CHASE & CO. CORPORATE/PRIVATE EQUITY FINANCIAL HIGHLIGHTS (in millions, except headcount data) QUARTERLY TRENDS 2Q08 INCOME STATEMENT REVENUE Principal transactions Securities gains (losses) (a) All other income (b) Noninterest revenue Net interest income (expense) TOTAL NET REVENUE $ Provision for credit losses MEMO: TOTAL NET REVENUE Private equity Corporate TOTAL NET REVENUE NET INCOME (LOSS) Private equity Corporate Merger related items (d) TOTAL NET INCOME (LOSS) Headcount $ 290 NONINTEREST EXPENSE Compensation expense Noncompensation expense (c) Merger costs Subtotal Net expense allocated to other businesses TOTAL NONINTEREST EXPENSE Income (loss) before income tax expense Income tax expense (benefit) NET INCOME (LOSS) (97) 656 (378) 181 48 229 1Q08 $ $ $ $ (456) (34) (422) 197 32 229 99 19 (540) (422) 22,317 $ 196 611 699 155 1,465 (1,070) 395 $ 5 42 1,639 1,686 (286) 1,400 4Q07 $ $ $ $ $ 1,704 677 1,027 163 1,237 1,400 57 970 1,027 21,769 3Q07 773 146 213 1,132 (218) 914 $ 14 639 (82) 557 (1,057) (500) $ $ $ $ 239 (10) 249 688 226 914 356 (93) (14) 249 22,512 1,082 128 70 1,280 (279) 1,001 2Q07 $ (31) 714 982 22 1,718 (1,057) 661 $ YEAR-TO-DATE $ $ $ $ 787 274 513 733 268 1,001 409 142 (38) 513 22,864 1,372 (227) 90 1,235 (173) 1,062 3 569 674 61 1,304 (1,059) 245 $ 2Q08 Change 1Q08 2Q07 $ $ $ $ NM % NM NM (85) NM (78) 48 (4) NM NM 163 (1) NM (12) (15) 142 (7) (21) 557 175 382 NM NM NM NM NM NM 1,293 (231) 1,062 21 (97) (84) (85) NM (78) 702 (280) (40) 382 74 (98) NM NM (86) NM NM NM $ NM 695 818 64 1,577 (1,075) 502 $ NM % NM NM (89) NM (84) 2008 23,532 3 (5) (92) 698 1,261 1,867 (238) 1,629 $ 486 $ $ $ $ 1,248 643 605 360 1,269 1,629 156 989 (540) 605 22,317 2,697 (235) 158 2,620 (290) 2,330 6 1,250 617 155 2,022 (2,127) (105) $ 2008 Change 2007 2007 NM % NM NM (29) 18 (30) NM 1,471 1,374 126 2,971 (2,115) 856 $ $ $ $ $ (15) (55) 23 (32) (1) NM 1,468 455 1,013 (15) 41 (40) 2,546 (216) 2,330 (86) NM (30) 1,400 (309) (78) 1,013 (89) NM NM (40) 23,532 (5) (a) Included gain on sale of MasterCard shares in the second quarter of 2008. (b) Included proceeds from the sale of Visa shares in its initial public offering in the first quarter of 2008. (c) Included a release of credit card litigation reserves in the first quarter of 2008. (d) The second quarter of 2008 reflects items related to the Bear Stearns merger, which include the Bear Stearns equity earnings, merger costs, Bear Stearns asset management liquidation costs and Bear Stearns private client services broker retention expense. Prior periods represent costs related to the Bank One and Bank of New York transactions. Page 26
  28. 28. JPMORGAN CHASE & CO. CORPORATE/PRIVATE EQUITY FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data) QUARTERLY TRENDS 2Q08 1Q08 4Q07 YEAR-TO-DATE 3Q07 2Q07 2Q08 Change 1Q08 2Q07 2008 2007 2008 Change 2007 SUPPLEMENTAL TREASURY Securities gains (losses) (a) Investment securities portfolio (average) Investment securities portfolio (ending) Mortgage loans (average) (b) Mortgage loans (ending) (b) PRIVATE EQUITY Private equity gains (losses) Direct investments Realized gains Unrealized gains (losses) (c) Total direct investments Third-party fund investments Total private equity gains (d) Private equity portfolio information Direct investments Publicly-held securities Carrying value Cost Quoted public value Privately-held direct securities Carrying value Cost Third-party fund investments Carrying value Cost $ $ $ $ 656 97,223 103,751 42,143 42,602 540 (326) 214 6 220 615 665 732 $ $ $ $ 42 80,443 91,323 39,096 41,125 1,113 (881) 232 (43) 189 603 499 720 $ 146 82,445 76,200 34,436 36,942 $ 126 85,470 86,495 29,854 32,804 $ (227) 87,760 86,821 26,830 27,299 NM 21 14 8 4 $ 100 569 669 43 712 $ 504 227 731 35 766 $ 985 290 1,275 53 1,328 (51) 63 (8) NM 16 (45) NM (83) (89) (83) 465 367 600 2 33 2 32 81 22 $ $ 390 288 536 $ $ 409 291 560 $ $ % NM 11 19 57 56 6,270 6,113 5,191 4,973 5,914 4,867 5,336 5,003 5,247 5,228 21 23 811 1,064 849 1,076 839 1,078 812 1,067 3 3 $ 698 88,833 103,751 40,620 42,602 $ $ 1,653 (1,207) 446 (37) 409 $ (235) 87,102 86,821 26,041 27,299 NM 2 19 56 56 $ 1,708 811 2,519 87 2,606 (3) NM (82) NM (84) $ % 19 17 838 1,094 % 3 3 Total private equity portfolio - Carrying value $ 7,723 $ 6,605 $ 7,153 $ 6,584 $ 6,524 17 18 Total private equity portfolio - Cost $ 7,872 $ 6,536 $ 6,231 $ 6,372 $ 6,662 20 18 (a) The second quarter of 2008 included a gain on the sale of MasterCard shares. All periods reflect repositioning of the Corporate investment securities portfolio and exclude gains/losses on securities used to manage risk associated with MSRs. (b) Held-for-investment prime mortgage loans were transferred from RFS and AM to the Corporate/Private Equity segment for risk management and reporting purposes. The transfers had no material impact on the financial results of Corporate/Private Equity. (c) Unrealized gains (losses) contains reversals of unrealized gains and losses that were recognized in prior periods and have now been realized. (d) Included in principal transactions revenue in the Consolidated Statements of Income. Page 27
  29. 29. JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION (in millions) Jun 30 2008 CREDIT EXPOSURE WHOLESALE (a) Loans - U.S. Loans - Non-U.S. TOTAL WHOLESALE LOANS - REPORTED (b) $ CONSUMER (c) Home equity Mortgage (includes RFS and Corporate/Private Equity) Auto loans and leases Credit card - reported Other loans TOTAL CONSUMER LOANS - REPORTED TOTAL LOANS - REPORTED Credit card - securitized TOTAL LOANS - MANAGED Derivative receivables Receivables from customers (d) TOTAL CREDIT-RELATED ASSETS Wholesale lending-related commitments TOTAL Memo: Total by category Total wholesale exposure (e) Total consumer managed loans (f) Total 137,236 92,123 229,359 Mar 31 2008 $ 141,921 89,376 231,297 Dec 31 2007 $ 133,253 79,823 213,076 Sep 30 2007 $ 126,343 71,385 197,728 Jun 30 2007 $ Jun 30, 2008 Change Mar 31 Jun 30 2008 2007 111,082 70,886 181,968 95,129 61,977 44,867 76,278 30,419 308,670 94,968 60,855 44,714 75,888 29,334 305,759 94,832 56,031 42,350 84,352 28,733 306,298 93,026 47,730 40,871 79,409 27,556 288,592 90,989 43,114 41,231 80,495 27,240 283,069 538,029 79,120 617,149 122,389 26,572 766,110 430,028 $ 1,196,138 $ 537,056 75,062 612,118 99,110 711,228 438,392 1,149,620 519,374 72,701 592,075 77,136 669,211 446,652 1,115,863 486,320 69,643 555,963 64,592 620,555 468,145 1,088,700 465,037 67,506 532,543 59,038 591,581 435,718 1,027,299 $ $ (3) % 3 (1) 808,348 387,790 $ 1,196,138 $ $ 768,799 380,821 1,149,620 $ 590,439 $ $ $ 736,864 378,999 1,115,863 $ 571,394 $ $ $ 730,465 358,235 1,088,700 $ 548,663 $ $ 2 1 4 1 5 1 23 NM 8 (2) 4 24 30 26 % 5 44 9 (5) 12 9 16 17 16 107 NM 30 (1) 16 $ 676,724 350,575 1,027,299 5 2 4 19 11 16 $ 532,134 - 11 Risk profile of wholesale credit exposure: Investment-grade (g) 590,045 Noninvestment-grade: (g) Noncriticized Criticized performing Criticized nonperforming Total noninvestment-grade 159,216 11,607 903 171,726 147,771 9,570 742 158,083 134,983 6,267 571 141,821 155,172 5,605 414 161,191 127,818 4,964 252 133,034 8 21 22 9 25 134 258 29 Loans held-for-sale & loans at fair value Receivables from customers (d) Total wholesale exposure 20,005 26,572 808,348 20,277 768,799 23,649 736,864 20,611 730,465 11,556 676,724 (1) NM 5 73 NM 19 $ $ $ $ $ (a) Includes Investment Bank, Commercial Banking, Treasury & Securities Services and Asset Management. (b) Includes loans held-for-sale & loans at fair value. (c) 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. (d) Represents margin loans to brokerage customers included in accrued interest and accounts receivable on the Consolidated Balance Sheet. (e) Represents total wholesale loans, derivative receivables, wholesale lending-related commitments and receivables from customers. (f) Represents total consumer loans plus credit card securitizations, and excludes consumer lending-related commitments. (g) Excludes loans held-for-sale & loans at fair value. Note: The risk profile is based on JPMorgan Chase's internal risk ratings, which generally correspond to the following ratings as defined by Standard & Poor's / Moody's: Investment-Grade: AAA / Aaa to BBB- / Baa3 Noninvestment-Grade: BB+ / Ba1 and below Page 28
  30. 30. JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions, except ratio data) Jun 30 2008 NONPERFORMING ASSETS AND RATIOS WHOLESALE LOANS (a) Loans - U.S. Loans - Non-U.S. TOTAL WHOLESALE LOANS-REPORTED $ Mar 31 2008 806 64 870 $ Dec 31 2007 761 20 781 $ Sep 30 2007 490 24 514 $ Jun 30, 2008 Change Mar 31 Jun 30 2008 2007 Jun 30 2007 401 26 427 $ 190 38 228 6 220 11 % 324 68 282 CONSUMER LOANS (b) Home equity Mortgage (includes RFS and Corporate/Private Equity) Auto loans and leases Credit card - reported Other loans TOTAL CONSUMER LOANS-REPORTED (c) 1,032 3,281 102 6 340 4,761 948 2,537 94 6 335 3,920 810 1,798 116 7 341 3,072 576 1,224 92 7 336 2,235 483 1,034 81 8 335 1,941 9 29 9 1 21 114 217 26 (25) 1 145 TOTAL LOANS REPORTED Derivative receivables Assets acquired in loan satisfactions TOTAL NONPERFORMING ASSETS 5,631 80 880 6,591 4,701 31 711 5,443 3,586 29 622 4,237 2,662 34 485 3,181 2,169 30 387 2,586 20 158 24 21 160 167 127 155 12 16 13 NM 45 21 % 312 105 (25) 272 224 496 155 $ TOTAL NONPERFORMING LOANS TO TOTAL LOANS NONPERFORMING ASSETS BY LOB Investment Bank Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity (d) TOTAL 1.05 $ $ 490 4,301 6 510 68 1,216 6,591 $ % 0.88 $ $ 439 3,695 6 453 11 839 5,443 $ % 0.69 $ $ 453 3,121 7 148 12 496 4,237 $ % 0.55 $ $ 325 2,387 7 136 28 298 3,181 $ % 0.47 $ $ 119 2,097 8 137 21 204 2,586 % (a) Included nonperforming loans held-for-sale and loans at fair value of $51 million, $70 million, $50 million, $75 million and $25 million at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively. Excluded purchased held-for-sale wholesale loans. (b) There were no nonperforming loans held-for-sale at June 30, 2008, March 31, 2008, December 31, 2007, and September 30, 2007, while there were $215 million at June 30, 2007. (c) Nonperforming loans and assets excluded (1) loans eligible for repurchase as well as loans repurchased from GNMA pools that are insured by U.S. government agencies of $1.9 billion, $1.8 billion, $1.5 billion, $1.3 billion and $1.2 billion at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively, and (2) education 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 $371 million, $252 million, $279 million, $241 million and $200 million at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively. These amounts for GNMA and education loans are excluded, as reimbursement is proceeding normally. (d) Predominantly relates to held-for-investment prime mortgage loans transferred from RFS and AM to the Corporate/Private Equity segment. Page 29
  31. 31. JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions, except ratio data) QUARTERLY TRENDS 2Q08 1Q08 4Q07 YEAR-TO-DATE 3Q07 2Q08 Change 1Q08 2Q07 2Q07 2008 2008 Change 2007 2007 GROSS CHARGE-OFFS Wholesale loans Consumer (includes RFS and Corporate/Private Equity) Credit card - reported Total loans - reported Credit card - securitized Total loans - managed $ 82 $ 130 $ 54 $ 101 $ 13 (37) % 1,079 1,209 2,370 949 3,319 880 1,144 2,154 791 2,945 582 1,000 1,636 716 2,352 403 911 1,415 679 2,094 321 877 1,211 704 1,915 23 6 10 20 13 41 38 29 19 42 8 54 145 240 119 359 55 155 248 110 358 47 131 207 97 304 49 126 194 101 295 48 136 226 114 340 41 92 25 82 (29) 1,025 1,064 2,130 830 2,960 825 989 1,906 681 2,587 535 869 1,429 619 2,048 354 785 1,221 578 1,799 NM % $ 236 38 96 35 73 212 $ 30 NM % 1,959 2,353 4,524 1,740 6,264 562 1,724 2,316 1,406 3,722 249 36 95 24 68 (2) 79 65 22 (2) (6) (3) 8 - 13 7 6 4 6 109 300 488 229 717 101 262 428 223 651 8 15 14 3 10 (55) NM 133 (35) NM 24 8 12 22 14 275 44 116 41 88 1,850 2,053 4,036 1,511 5,547 RECOVERIES Wholesale loans Consumer (includes RFS and Corporate/Private Equity) Credit card - reported Total loans - reported Credit card - securitized Total loans - managed NET CHARGE-OFFS Wholesale loans Consumer (includes RFS and Corporate/Private Equity) Credit card - reported Total loans - reported Credit card - securitized Total loans - managed $ $ $ $ $ 273 741 985 590 1,575 $ $ 461 1,462 1,888 1,183 3,071 NET CHARGE-OFF RATES - ANNUALIZED Wholesale loans (a) Consumer (includes RFS and Corporate/Private Equity) (b) Credit card - reported Total loans - reported (a) (b) Credit card - securitized Total loans - managed (a) (b) 1.81 5.66 1.67 4.32 2.02 1.50 5.01 1.53 3.70 1.81 1.01 4.36 1.19 3.38 1.48 0.70 3.89 1.07 3.34 1.37 0.57 3.76 0.90 3.46 1.25 1.66 5.32 1.60 4.02 1.91 0.49 3.66 0.88 3.51 1.23 Memo: Credit card - managed 4.98 4.37 3.89 3.64 3.62 4.68 301 40 114 28 81 3.59 0.08 % 0.18 % 0.05 % 0.19 % (0.07) % 0.13 % (0.04) % (a) Average wholesale loans held-for-sale and loans at fair value were $20.8 billion, $20.1 billion, $26.8 billion, $17.8 billion and $15.5 billion for the quarters ended June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively, and $20.5 billion and $14.9 billion for year-to-date 2008 and 2007, respectively. These amounts were excluded when calculating the net charge-off rates. (b) Average consumer (excluding card) loans held-for-sale and loans at fair value were $3.6 billion, $4.4 billion, $4.0 billion, $5.4 billion and $11.7 billion for the quarters ended June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively, and $4.0 billion and $16.7 billion for year-to-date 2008 and 2007, respectively. These amounts were excluded when calculating the net charge-off rates. Page 30
  32. 32. JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions, except ratio data) QUARTERLY TRENDS 2Q08 SUMMARY OF CHANGES IN THE ALLOWANCE FOR LOAN LOSSES Beginning balance Net charge-offs Provision for loan losses Other Ending balance SUMMARY OF CHANGES IN THE ALLOWANCE FOR LENDING-RELATED COMMITMENTS Beginning balance Provision for lending-related commitments Ending balance ALLOWANCE COMPONENTS AND RATIOS ALLOWANCE FOR LOAN LOSSES Wholesale Asset specific Formula - based Total wholesale $ $ $ $ $ Consumer Asset specific Formula - based Total consumer Total allowance for loan losses Allowance for lending-related commitments Total allowance for credit losses 11,746 (2,130) 3,624 6 13,246 $ 855 (169) 686 $ $ $ 174 4,295 4,469 $ 4Q07 9,234 (1,906) 4,419 (1) 11,746 $ $ 850 5 855 $ 146 3,691 3,837 $ $ 3Q07 8,113 (1,429) 2,550 9,234 $ 858 (8) 850 $ $ $ 108 3,046 3,154 $ 2Q07 7,633 (1,221) 1,693 8 8,113 $ $ 766 92 858 $ 53 2,810 2,863 $ $ 7,300 (985) 1,316 2 7,633 27 % (12) (18) NM 13 553 213 766 61 % (116) 175 200 74 1 NM (20) 55 NM (10) 52 2,650 2,702 19 16 16 $ 75 7,834 7,909 80 6,000 6,080 70 5,180 5,250 81 4,850 4,931 (19) 11 11 $ $ $ 13,246 686 13,932 11,746 855 12,601 9,234 850 10,084 8,113 858 8,971 7,633 766 8,399 13 (20) 11 9,234 (4,036) 8,043 5 13,246 $ 850 (164) 686 $ $ 2008 Change 2007 7,279 (1,888) 2,295 (53) 7,633 27 % (114) 250 NM 74 $ $ 524 242 766 62 NM (10) 74 (10) 66 28 6 9 3 54 13 104 13 $ 2007 (25) 80 78 134 153 20 19 344 40 NM 74 2.13 2.86 2.57 237 $ 2008 235 62 65 61 8,716 8,777 Wholesale allowance for loan losses to total wholesale loans (a) Consumer allowance for loan losses to total consumer loans (b) Allowance for loan losses to total loans (a) (b) Allowance for loan losses to total nonperforming loans (c) ALLOWANCE FOR LOAN LOSSES BY LOB Investment Bank Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity Total 1Q08 YEAR-TO-DATE 2Q08 Change 1Q08 2Q07 2,429 4,475 3,705 1,843 40 147 607 13,246 $ % 1.82 2.63 2.29 254 $ $ 1,891 4,208 3,404 1,790 26 130 297 11,746 $ % 1.67 2.01 1.88 261 $ $ 1,329 2,634 3,407 1,695 18 112 39 9,234 $ % 1.62 1.84 1.76 314 $ $ 1,112 2,105 3,107 1,623 13 115 38 8,113 $ % 1.59 1.79 1.71 396 $ $ 1,037 1,772 3,096 1,551 9 105 63 7,633 % (a) Wholesale loans held-for-sale and loans at fair value were $20.0 billion, $20.3 billion, $23.6 billion, $20.6 billion and $11.6 billion at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively. These amounts were excluded when calculating the allowance coverage ratios. (b) Consumer loans held-for-sale were $2.2 billion, $4.5 billion, $4.0 billion, $3.9 billion and $8.3 billion at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively. These amounts were excluded when calculating the allowance coverage ratios. (c) Nonperforming loans held-for-sale and loans at fair value were $51 million, $70 million, $50 million, $75 million and $240 million at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively. These amounts were excluded when calculating the allowance coverage ratios. Page 31
  33. 33. JPMORGAN CHASE & CO. CREDIT-RELATED INFORMATION, CONTINUED (in millions) QUARTERLY TRENDS 2Q08 PROVISION FOR CREDIT LOSSES LOANS Investment Bank Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity (a) Total wholesale Retail Financial Services Card Services - reported Corporate/Private Equity (b) Total consumer Total provision for loan losses LENDING-RELATED COMMITMENTS Investment Bank Commercial Banking Treasury & Securities Services Asset Management Total wholesale Retail Financial Services Card Services - reported Total consumer Total provision for lending-related commitments TOTAL PROVISION FOR CREDIT LOSSES Investment Bank Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity (a) Total wholesale Retail Financial Services Card Services - reported Corporate/Private Equity (b) Total consumer Total provision for credit losses Card Services - securitized Managed provision for credit losses $ $ $ $ $ $ 538 77 7 17 36 675 1,331 1,364 254 2,949 3,624 (140) (30) (170) 1 1 (169) 398 47 7 17 36 505 1,332 1,364 254 2,950 3,455 830 4,285 1Q08 $ $ $ $ $ $ 571 143 11 17 742 2,492 989 196 3,677 4,419 47 (42) 1 (1) 5 5 618 101 12 16 747 2,492 989 196 3,677 4,424 681 5,105 4Q07 $ $ 3Q07 208 105 5 (2) 316 1,051 1,169 14 2,234 2,550 $ (8) $ $ $ (1) 1 (8) $ (8) $ $ 200 105 4 (1) 308 1,051 1,169 14 2,234 2,542 619 3,161 $ $ YEAR-TO-DATE $ 146 98 3 4 251 688 785 (31) 1,442 1,693 81 14 6 (1) 100 (8) (8) 92 227 112 9 3 351 680 785 (31) 1,434 1,785 578 2,363 2Q07 $ $ $ $ $ $ (13) 10 (1) (13) (17) 589 741 3 1,333 1,316 177 35 1 2 215 (2) (2) 213 164 45 (11) 198 587 741 3 1,331 1,529 590 2,119 2Q08 Change 1Q08 2Q07 (6) % (46) (36) NM (9) (47) 38 30 (20) (18) NM NM NM NM NM NM 126 84 NM 121 175 NM 29 NM NM NM NM NM NM NM NM NM NM NM NM NM NM (36) (53) (42) 6 NM (32) (47) 38 30 (20) (22) 22 (16) 143 4 NM NM NM 155 127 84 NM 122 126 41 102 2008 % $ $ $ $ $ $ 1,109 220 18 34 36 1,417 3,823 2,353 450 6,626 8,043 (93) (72) 1 (1) (165) 1 1 (164) 1,016 148 19 33 36 1,252 3,824 2,353 450 6,627 7,879 1,511 9,390 2007 $ $ $ $ $ $ 22 27 3 (21) 31 881 1,377 6 2,264 2,295 205 35 3 1 244 (2) (2) 242 227 62 6 (20) 275 879 1,377 6 2,262 2,537 1,183 3,720 2008 Change 2007 NM NM 500 NM NM NM 334 71 NM 193 250 NM NM (67) NM NM NM NM NM 348 139 217 NM NM 355 335 71 NM 193 211 28 152 (a) Represent provision expense related to loans acquired in the merger with Bear Stearns. (b) Includes amounts related to held-for-investment prime mortgages transferred from RFS and AM to the Corporate/Private Equity segment during 2007. Page 32 %

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