EARNINGS RELEASE FINANCIAL SUPPLEMENT
SECOND QUARTER 2009
JPMORGAN CHASE & CO.
TABLE OF CONTENTS
Page

Consolidated Results
Consolidated Financial Highlights
Statements of Income
C...
JPMORGAN CHASE & CO.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(in millions, except per share, ratio and headcount data)
QUARTERLY...
JPMORGAN CHASE & CO.
STATEMENTS OF INCOME
(in millions, except per share and ratio data)
QUARTERLY TRENDS

YEAR-TO-DATE
20...
JPMORGAN CHASE & CO.
CONSOLIDATED BALANCE SHEETS
(in millions)

Jun 30
2009
ASSETS
Cash and due from banks
Deposits with b...
JPMORGAN CHASE & CO.
CONDENSED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS
(in millions, except rates)
QUARTERLY TRENDS

...
JPMORGAN CHASE & CO.
RECONCILIATION FROM REPORTED TO MANAGED SUMMARY
(in millions)

The Firm prepares its consolidated fin...
JPMORGAN CHASE & CO.
LINE OF BUSINESS FINANCIAL HIGHLIGHTS - MANAGED BASIS
(in millions, except ratio data)
QUARTERLY TREN...
JPMORGAN CHASE & CO.
INVESTMENT BANK
FINANCIAL HIGHLIGHTS
(in millions, except ratio data)
QUARTERLY TRENDS

YEAR-TO-DATE
...
JPMORGAN CHASE & CO.
INVESTMENT BANK
FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except headcount and ratio data)
QUARTE...
JPMORGAN CHASE & CO.
INVESTMENT BANK
FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except ratio and rankings data)
QUARTER...
JPMORGAN CHASE & CO.
RETAIL FINANCIAL SERVICES
FINANCIAL HIGHLIGHTS
(in millions, except ratio and headcount data)
QUARTER...
JPMORGAN CHASE & CO.
RETAIL FINANCIAL SERVICES
FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except ratio data)
QUARTERLY ...
JPMORGAN CHASE & CO.
RETAIL FINANCIAL SERVICES
FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except ratio data and where o...
JPMORGAN CHASE & CO.
RETAIL FINANCIAL SERVICES
FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except ratio data and where o...
JPMORGAN CHASE & CO.
RETAIL FINANCIAL SERVICES
FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except ratio data and where o...
JPMORGAN CHASE & CO.
RETAIL FINANCIAL SERVICES
FINANCIAL HIGHLIGHTS, CONTINUED
(in billions, except where otherwise noted)...
JPMORGAN CHASE & CO.
CARD SERVICES - MANAGED BASIS
FINANCIAL HIGHLIGHTS
(in millions, except ratio data and where otherwis...
JPMORGAN CHASE & CO.
CARD SERVICES - MANAGED BASIS
FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except headcount and rati...
JPMORGAN CHASE & CO.
CARD RECONCILIATION OF REPORTED AND MANAGED DATA
(in millions)
QUARTERLY TRENDS

YEAR-TO-DATE
2Q09 Ch...
JPMORGAN CHASE & CO.
COMMERCIAL BANKING
FINANCIAL HIGHLIGHTS
(in millions, except ratio data)
QUARTERLY TRENDS

YEAR-TO-DA...
JPMORGAN CHASE & CO.
COMMERCIAL BANKING
FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except ratio and headcount data)
QUA...
JPMORGAN CHASE & CO.
TREASURY & SECURITIES SERVICES
FINANCIAL HIGHLIGHTS
(in millions, except headcount and ratio data)
QU...
JPMORGAN CHASE & CO.
TREASURY & SECURITIES SERVICES
FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except ratio data and wh...
JPMORGAN CHASE & CO.
ASSET MANAGEMENT
FINANCIAL HIGHLIGHTS
(in millions, except ratio, ranking and headcount data)
QUARTER...
JPMORGAN CHASE & CO.
ASSET MANAGEMENT
FINANCIAL HIGHLIGHTS, CONTINUED
(in billions)

Jun 30
2009
Assets by asset class
Liq...
JPMORGAN CHASE & CO.
ASSET MANAGEMENT
FINANCIAL HIGHLIGHTS, CONTINUED
(in billions)
QUARTERLY TRENDS
2Q09
ASSETS UNDER SUP...
2 q09 erf_supplement_final
2 q09 erf_supplement_final
2 q09 erf_supplement_final
2 q09 erf_supplement_final
2 q09 erf_supplement_final
2 q09 erf_supplement_final
2 q09 erf_supplement_final
2 q09 erf_supplement_final
2 q09 erf_supplement_final
2 q09 erf_supplement_final
2 q09 erf_supplement_final
2 q09 erf_supplement_final
2 q09 erf_supplement_final
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2 q09 erf_supplement_final

  1. 1. EARNINGS RELEASE FINANCIAL SUPPLEMENT SECOND QUARTER 2009
  2. 2. JPMORGAN CHASE & CO. TABLE OF CONTENTS Page Consolidated Results Consolidated Financial Highlights Statements of Income Consolidated Balance Sheets Condensed Average Balance Sheets and Annualized Yields Reconciliation from Reported to Managed Summary 2 3 4 5 6 Business Detail Line of Business Financial Highlights - Managed Basis Investment Bank Retail Financial Services Card Services - Managed Basis Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity 7 8 11 17 20 22 24 27 Credit-Related Information 29 Market Risk-Related Information 34 Supplemental Detail Capital, Intangible Assets and Deposits Per Share-Related Information 35 36 Glossary of Terms 37 Page 1
  3. 3. JPMORGAN CHASE & CO. CONSOLIDATED FINANCIAL HIGHLIGHTS (in millions, except per share, ratio and headcount data) QUARTERLY TRENDS YEAR-TO-DATE 2Q09 Change 2Q09 SELECTED INCOME STATEMENT DATA: Reported Basis Total net revenue Total noninterest expense Pre-provision profit Provision for credit losses Income (loss) before extraordinary gain Extraordinary gain NET INCOME Managed Basis (a) Total net revenue Total noninterest expense Pre-provision profit Provision for credit losses Income (loss) before extraordinary gain Extraordinary gain NET INCOME 1Q09 4Q08 3Q08 2Q08 1Q09 2Q08 2009 2009 Change 2008 2008 $ 25,623 13,520 12,103 8,031 2,721 2,721 $ 25,025 13,373 11,652 8,596 2,141 2,141 $ 17,226 11,255 5,971 7,313 (623) 1,325 702 $ 14,737 11,137 3,600 5,787 (54) 581 527 $ 18,399 12,177 6,222 3,455 2,003 2,003 2 % 1 4 (7) 27 27 39 % 11 95 132 36 36 $ 50,648 26,893 23,755 16,627 4,862 4,862 $ 35,289 21,108 14,181 7,879 4,376 4,376 44 % 27 68 111 11 11 $ 27,709 13,520 14,189 9,695 2,721 2,721 $ 26,922 13,373 13,549 10,060 2,141 2,141 $ 19,108 11,255 7,853 8,541 (623) 1,325 702 $ 16,088 11,137 4,951 6,660 (54) 581 527 $ 19,678 12,177 7,501 4,285 2,003 2,003 3 1 5 (4) 27 27 41 11 89 126 36 36 $ 54,631 26,893 27,738 19,755 4,862 4,862 $ 37,576 21,108 16,468 9,390 4,376 4,376 45 27 68 110 11 11 PER COMMON SHARE: Basic Earnings (b) Income (loss) before extraordinary gain Net income 0.28 0.28 0.40 0.40 (0.29) 0.06 (0.08) 0.09 0.54 0.54 (30) (30) (48) (48) 0.68 0.68 1.21 1.21 (44) (44) Diluted Earnings (b) (c) Income (loss) before extraordinary gain Net income 0.28 0.28 0.40 0.40 (0.29) 0.06 (0.08) 0.09 0.53 0.53 (30) (30) (47) (47) 0.68 0.68 1.20 1.20 (43) (43) Cash dividends declared Book value Closing share price Market capitalization 0.05 37.36 34.11 133,852 0.05 36.78 26.58 99,881 0.38 36.15 31.53 117,695 0.38 36.95 46.70 174,048 0.38 37.02 34.31 117,881 2 28 34 (87) 1 (1) 14 0.10 37.36 34.11 133,852 0.76 37.02 34.31 117,881 (87) 1 (1) 14 COMMON SHARES OUTSTANDING: Weighted-average diluted shares outstanding (b) Common shares outstanding at period-end 3,824.1 3,924.1 3,758.7 3,757.7 3,737.5 3,732.8 3,444.6 3,726.9 3,453.1 3,435.7 2 4 11 14 3,791.4 3,924.1 3,438.2 3,435.7 10 14 FINANCIAL RATIOS: (d) Income (loss) before extraordinary gain: Return on common equity ("ROE") (e) Return on equity-goodwill ("ROE-GW") (e) (f) Return on assets ("ROA") Net income: ROE (e) ROE-GW (e) (f) ROA 3 % 5 0.54 5 % 7 0.42 3 5 0.54 5 7 0.42 1 1 0.13 1 2 0.12 6 10 0.48 CAPITAL RATIOS: Tier 1 capital ratio Total capital ratio 9.7 (g) 13.3 (g) 11.4 15.2 10.9 14.8 8.9 12.6 9.2 13.4 SELECTED BALANCE SHEET DATA (Period-end) Total assets Wholesale loans Consumer loans Deposits Common stockholders' equity Total stockholders' equity $ Headcount LINE OF BUSINESS NET INCOME (LOSS) Investment Bank Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity Net income 2,026,642 231,625 448,976 866,477 146,614 154,766 $ 220,255 $ $ 1,471 15 (672) 368 379 352 808 2,721 2,079,188 242,284 465,959 906,969 138,201 170,194 (3) % (5) (0.11) $ 219,569 $ $ 1,606 474 (547) 338 308 224 (262) 2,141 2,175,052 262,044 482,854 1,009,277 134,945 166,884 (1) % (1) (0.01) $ 224,961 $ $ (2,364) 624 (371) 480 533 255 1,545 702 2,251,469 288,445 472,936 969,783 137,691 145,843 6 10 0.48 $ 228,452 $ $ 882 64 292 312 406 351 (1,780) 527 1,775,670 229,359 308,670 722,905 127,176 133,176 195,594 $ $ 394 503 250 355 425 395 (319) 2,003 % 4 6 0.48 % 7 11 0.54 4 6 0.48 (3) (4) (4) (4) 6 (9) 14 1 45 20 15 16 - 13 (8) (97) (23) 9 23 57 NM 27 273 (97) NM 4 (11) (11) NM 36 $ 2,026,642 231,625 448,976 866,477 146,614 154,766 7 11 0.54 $ $ 3,077 489 (1,219) 706 687 576 546 4,862 $ $ 1,775,670 229,359 308,670 722,905 127,176 133,176 14 1 45 20 15 16 195,594 220,255 $ % 13 307 192 859 647 828 751 792 4,376 NM 155 NM 9 (17) (23) (31) 11 (a) For further discussion of managed basis, see Reconciliation from reported to managed summary on page 6. (b) Effective January 1, 2009, the Firm adopted FSP EITF 03-6-1. Accordingly, prior period numbers have been revised as required. For further discussion of this FSP, see Per share-related information on page 36. (c) The calculation of second quarter 2009 earnings per share includes a one-time, non-cash reduction of $1.1 billion, or $0.27 per share, resulting from repayment of TARP preferred capital. (d) Ratios are based upon annualized amounts. (e) The calculation of second quarter and year-to-date 2009 net income applicable to common equity includes a one-time, non-cash reduction of $1.1 billion resulting from repayment of TARP preferred capital. Excluding this reduction the adjusted ROE and ROE-GW were 6% and 10% for the second quarter 2009 , respectively, and 6% and 9% for the year-to-date, respectively. The Firm views the adjusted ROE and ROE-GW, non-GAAP financial measures, as meaningful because it increases the comparability to prior periods. (f) Net income applicable to common equity 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 utilizes this measure to facilitate comparisons to competitors. (g) Estimated. Page 2
  4. 4. JPMORGAN CHASE & CO. STATEMENTS OF INCOME (in millions, except per share and ratio data) QUARTERLY TRENDS YEAR-TO-DATE 2009 Change 2008 2Q09 Change 2Q09 REVENUE Investment banking fees Principal transactions Lending & deposit-related fees Asset management, administration and commissions Securities gains Mortgage fees and related income Credit card income Other income Noninterest revenue $ Interest income Interest expense Net interest income 1Q09 2,106 3,097 1,766 3,124 347 784 1,719 10 12,953 $ 4Q08 1,386 2,001 1,688 2,897 198 1,601 1,837 50 11,658 $ 3Q08 1,382 (7,885) 1,776 3,234 456 1,789 2,049 593 3,394 $ 2Q08 1,316 (2,763) 1,168 3,485 424 457 1,771 (115) 5,743 $ 1Q09 2Q08 2009 1,612 752 1,105 3,628 647 696 1,803 (138) 10,105 52 % 55 5 8 75 (51) (6) (80) 11 31 % 312 60 (14) (46) 13 (5) NM 28 (8) (15) (5) $ (53) 53 2008 3,492 5,098 3,454 6,021 545 2,385 3,556 60 24,611 $ 2,828 (51) 2,144 7,224 680 1,221 3,599 1,691 19,336 23 % NM 61 (17) (20) 95 (1) (96) 27 34,475 8,438 26,037 34,061 18,108 15,953 1 (53) 63 16,549 3,879 12,670 17,926 4,559 13,367 21,631 7,799 13,832 17,326 8,332 8,994 16,529 8,235 8,294 TOTAL NET REVENUE 25,623 25,025 17,226 14,737 18,399 2 39 50,648 35,289 44 Provision for credit losses 8,031 8,596 7,313 5,787 3,455 (7) 132 16,627 7,879 111 6,917 914 1,156 1,518 417 2,190 265 143 13,520 7,588 885 1,146 1,515 384 1,375 275 205 13,373 5,024 955 1,207 1,819 501 1,242 326 181 11,255 5,858 766 1,112 1,451 453 1,096 305 96 11,137 6,913 669 1,028 1,450 413 1,233 316 155 12,177 (9) 3 1 9 59 (4) (30) 1 37 12 5 1 78 (16) (8) 11 14,505 1,799 2,302 3,033 801 3,565 540 348 26,893 11,864 1,317 1,996 2,783 959 1,402 632 155 21,108 22 37 15 9 (16) 154 (15) 125 27 4,072 1,351 2,721 2,721 3,056 915 2,141 2,141 (1,342) (719) (623) 1,325 702 (2,187) (2,133) (54) 581 527 2,767 764 2,003 2,003 33 48 27 27 47 77 36 36 7,128 2,266 4,862 4,862 6,302 1,926 4,376 4,376 13 18 11 11 0.53 0.53 (30) (30) (47) (47) 1.20 1.20 (43) (43) NONINTEREST EXPENSE Compensation expense Occupancy expense Technology, communications and equipment expense Professional & outside services Marketing Other expense (a) Amortization of intangibles Merger costs TOTAL NONINTEREST EXPENSE Income (loss) before income tax expense and extraordinary gain Income tax expense (benefit) (b) Income (loss) before extraordinary gain Extraordinary gain (c) NET INCOME DILUTED EARNINGS PER SHARE Income (loss) before extraordinary gain (d)(e) Extraordinary gain NET INCOME (d)(e) $ $ $ FINANCIAL RATIOS Income (loss) before extraordinary gain: ROE (f) ROE-GW (f) ROA Net income: ROE (f) ROE-GW (f) ROA Effective income tax rate (b) Overhead ratio $ 0.28 0.28 3 5 0.54 $ $ % EXCLUDING IMPACT OF MERGER COSTS (g) Income (loss) before extraordinary gain Merger costs (after-tax) Income (loss) before extraordinary gain excluding merger costs $ Diluted Per Share: Income (loss) before extraordinary gain (d)(e) Merger costs (after-tax) Income (loss) before extraordinary gain excluding merger costs (d)(e) $ $ $ 0.40 0.40 5 7 0.42 3 5 0.54 33 53 $ $ $ % $ $ 0.28 0.02 0.30 $ $ $ $ (3) % (5) (0.11) 5 7 0.42 30 53 2,721 89 2,810 (0.29) 0.35 0.06 $ $ $ 0.40 0.03 0.43 $ $ $ $ (1) % (1) (0.01) 1 1 0.13 54 65 2,141 127 2,268 (0.08) 0.17 0.09 $ 6 10 0.48 1 2 0.12 98 76 (623) 112 (511) $ $ (0.29) 0.03 (0.26) $ $ $ $ 0.68 0.68 $ % 4 6 0.48 6 10 0.48 28 66 (54) 60 6 $ $ (0.08) 0.02 (0.06) $ $ $ $ $ % 7 11 0.54 4 6 0.48 32 53 2,003 96 2,099 27 (30) 24 36 (7) 34 $ $ 0.53 0.03 0.56 (30) (33) (30) (47) (33) (46) $ 7 11 0.54 31 60 4,862 216 5,078 $ 0.68 0.05 0.73 $ $ % $ $ 4,376 96 4,472 11 125 14 1.20 0.03 1.23 (43) 67 (41) (a) Second quarter 2009 includes a $675 million FDIC special assessment. (b) The income tax benefit in the third quarter of 2008 includes the realization of a benefit from the release of deferred tax liabilities associated with the undistributed earnings of certain non-U.S. subsidiaries that were deemed to be reinvested indefinitely. (c) JPMorgan Chase acquired the banking operations of Washington Mutual Bank for $1.9 billion. The fair value of the net assets acquired exceeded the purchase price, which resulted in negative goodwill. In accordance with SFAS 141, nonfinancial assets that are not held-for-sale were written down against that negative goodwill. The negative goodwill that remained after writing down nonfinancial assets was recognized as an extraordinary gain. (d) Effective January 1, 2009, the Firm adopted FSP EITF 03-6-1. Accordingly, prior period numbers have been revised as required. For further discussion of this FSP, see Per share-related information on page 36. (e) The calculation of second quarter 2009 earnings per share includes a one-time, non-cash reduction of $1.1 billion, or $0.27 per share, resulting from repayment of TARP preferred capital. (f) The calculation of second quarter and year-to-date 2009 net income applicable to common equity includes a one-time, non-cash reduction of $1.1 billion resulting from repayment of TARP preferred capital. Excluding this reduction the adjusted ROE and ROE-GW were 6% and 10% for the second quarter 2009 , respectively, and 6% and 9% for the year-to-date, respectively. The Firm views the adjusted ROE and ROE-GW, non-GAAP financial measures, as meaningful because it increases the comparability to prior periods. (g) 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 2009 ASSETS Cash and due from banks Deposits with banks Federal funds sold and securities purchased under resale agreements Securities borrowed Trading assets: Debt and equity instruments Derivative receivables Securities Loans Less: allowance for loan losses Loans, net of allowance for loan losses Accrued interest and accounts receivable Premises and equipment Goodwill Other intangible assets: Mortgage servicing rights Purchased credit card relationships All other intangibles Other assets (a) TOTAL ASSETS LIABILITIES Deposits Federal funds purchased and securities loaned or sold under repurchase agreements Commercial paper Other borrowed funds (a) Trading liabilities: Debt and equity instruments Derivative payables Accounts payable and other liabilities (including the allowance for lending-related commitments) Beneficial interests issued by consolidated VIEs Long-term debt Junior subordinated deferrable interest debentures held by trusts that issued guaranteed capital debt securities TOTAL LIABILITIES STOCKHOLDERS' EQUITY Preferred stock Common stock Capital surplus Retained earnings Accumulated other comprehensive income (loss) Shares held in RSU trust Treasury stock, at cost TOTAL STOCKHOLDERS' EQUITY TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 25,133 61,882 159,170 129,263 Mar 31 2009 $ 26,681 89,865 157,237 127,928 Dec 31 2008 $ 26,895 138,139 203,115 124,000 Sep 30 2008 $ 54,350 34,372 233,668 152,050 Jun 30 2008 $ Jun 30, 2009 Change Mar 31 Jun 30 2009 2008 32,255 17,150 176,287 142,854 (6) % (31) 1 1 (22) % 261 (10) (10) 298,135 97,491 345,563 680,601 29,072 651,529 61,302 10,668 48,288 298,453 131,247 333,861 708,243 27,381 680,862 52,168 10,336 48,201 347,357 162,626 205,943 744,898 23,164 721,734 60,987 10,045 48,027 401,609 118,648 150,779 761,381 19,052 742,329 104,232 9,962 46,121 409,608 122,389 119,173 538,029 13,246 524,783 64,294 10,333 45,993 (26) 4 (4) 6 (4) 18 3 - (27) (20) 190 26 119 24 (5) 3 5 $ 14,600 1,431 3,651 118,536 2,026,642 $ 10,634 1,528 3,821 106,366 2,079,188 $ 9,403 1,649 3,932 111,200 2,175,052 $ 17,048 1,827 3,653 180,821 2,251,469 $ 11,617 1,984 3,675 93,275 1,775,670 37 (6) (4) 11 (3) 26 (28) (1) 27 14 $ 866,477 $ 906,969 $ 1,009,277 $ 969,783 $ 722,905 (4) 20 300,931 42,713 73,968 192,546 37,845 132,400 224,075 54,480 167,827 194,724 50,151 22,594 8 29 (34) 55 (15) 227 56,021 67,197 53,786 86,020 45,274 121,604 76,213 85,816 87,841 95,749 4 (22) (36) (30) 171,685 20,945 254,226 165,521 9,674 243,569 187,978 10,561 252,094 260,563 11,437 238,034 171,004 20,071 260,192 4 117 4 4 (2) 17,713 1,871,876 $ 279,837 33,085 112,257 18,276 1,908,994 18,589 2,008,168 17,398 2,105,626 17,263 1,642,494 (3) (2) 3 14 8,152 4,105 97,662 56,355 (3,438) (86) (7,984) 154,766 2,026,642 31,993 3,942 91,469 55,487 (4,490) (86) (8,121) 170,194 2,079,188 31,939 3,942 92,143 54,013 (5,687) (217) (9,249) 166,884 2,175,052 8,152 3,942 90,535 55,217 (2,227) (267) (9,509) 145,843 2,251,469 6,000 3,658 78,870 56,313 (1,566) (269) (9,830) 133,176 1,775,670 (75) 4 7 2 23 2 (9) (3) 36 12 24 $ $ $ $ (120) 68 19 16 14 (a) On September 19, 2008, the Federal Reserve established a special lending facility, the AML Facility, to provide liquidity to eligible money market mutual funds. The Firm participated in the AML Facility and had ABCP investments totaling $14.5 billion, $6.0 billion, $11.2 billion, and $61.3 billion at June 30, 2009, March 31, 2009, December 31, 2008, and September 30, 2008, respectively. These ABCP investments were recorded in other assets with the corresponding nonrecourse liability to the Federal Reserve Bank of Boston for the same amounts recorded in other borrowed funds. Page 4
  6. 6. JPMORGAN CHASE & CO. CONDENSED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS (in millions, except rates) QUARTERLY TRENDS YEAR-TO-DATE 2Q09 Change 2Q09 AVERAGE BALANCES ASSETS Deposits with banks Federal funds sold and securities purchased under resale agreements Securities borrowed Trading assets - debt instruments Securities Loans Other assets (a) Total interest-earning assets Trading assets - equity instruments Goodwill Other intangible assets: Mortgage servicing rights All other intangible assets All other noninterest-earning assets TOTAL ASSETS LIABILITIES Interest-bearing deposits Federal funds purchased and securities loaned or sold under repurchase agreements Commercial paper Other borrowings and liabilities (b) Beneficial interests issued by consolidated VIEs Long-term debt Total interest-bearing liabilities Noninterest-bearing liabilities TOTAL LIABILITIES Preferred stock Common stockholders' equity TOTAL STOCKHOLDERS' EQUITY TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1Q09 68,001 $ 4Q08 88,587 $ 3Q08 106,156 $ 2Q08 41,303 $ 1Q09 38,813 2Q08 (23) % 2009 75 % $ 2009 Change 2008 2008 78,237 $ 35,394 121 % 142,226 122,235 245,444 354,216 697,908 36,638 1,666,668 63,507 48,273 160,986 120,752 252,098 281,420 726,959 27,411 1,658,213 62,748 48,071 205,182 123,523 269,576 174,652 752,524 56,322 1,687,935 72,782 46,838 164,980 134,651 298,760 119,443 536,890 37,237 1,333,264 92,300 45,947 155,664 100,322 302,053 109,834 537,964 15,629 1,260,279 99,525 45,781 (12) 1 (3) 26 (4) 34 1 1 - (9) 22 (19) 223 30 134 32 (36) 5 151,554 121,498 248,753 318,019 712,353 32,050 1,662,464 63,130 48,173 154,764 91,906 312,519 99,796 532,281 7,815 1,234,475 89,168 45,740 (2) 32 (20) 219 34 310 35 (29) 5 $ 12,256 5,218 242,450 2,038,372 $ 11,141 5,443 281,503 2,067,119 $ 14,837 5,586 339,887 2,167,865 $ 11,811 5,512 267,525 1,756,359 $ 9,947 5,823 247,344 1,668,699 10 (4) (14) (1) 23 (10) (2) 22 $ 11,702 5,329 261,868 2,052,666 $ 9,110 6,012 234,743 1,619,248 28 (11) 12 27 $ 672,350 $ 736,460 $ 777,604 $ 589,348 $ 612,305 (9) 10 $ 704,228 $ 606,218 203,348 47,323 111,477 17,990 229,336 1,221,779 315,965 1,537,744 4,549 126,406 130,955 28 11 (12) 49 6 (6) (2) (11) 3 - 43 (21) 86 (19) 20 22 18 22 NM 11 29 1,668,699 (1) 22 289,971 37,371 207,489 14,493 274,323 1,495,997 373,172 1,869,169 28,338 140,865 169,203 $ 226,110 33,694 236,673 9,757 258,732 1,501,426 397,243 1,898,669 31,957 136,493 168,450 2,038,372 $ 203,568 40,486 264,236 9,440 248,125 1,543,459 460,894 2,004,353 24,755 138,757 163,512 2,067,119 $ 200,032 47,579 161,821 11,431 261,385 1,271,596 351,023 1,622,619 7,100 126,640 133,740 2,167,865 $ 1,756,359 $ 258,217 35,543 221,999 12,138 266,571 1,498,696 385,141 1,883,837 30,138 138,691 168,829 $ 16 191,622 47,453 109,515 16,036 214,846 1,185,690 305,790 1,491,480 2,275 125,493 127,768 2,052,666 $ 35 (25) 103 (24) 24 26 26 26 NM 11 32 1,619,248 27 AVERAGE RATES INTEREST-EARNING ASSETS Deposits with banks Federal funds sold and securities purchased under resale agreements (c) Trading assets - debt instruments Securities Loans Other assets (a) Total interest-earning assets INTEREST-BEARING LIABILITIES Interest-bearing deposits Federal funds purchased and securities sold under repurchase agreements Commercial paper Other borrowings and liabilities (b) Beneficial interests issued by consolidated VIEs Long-term debt Total interest-bearing liabilities INTEREST RATE SPREAD NET YIELD ON INTEREST-EARNING ASSETS NET YIELD ON INTEREST-EARNING ASSETS ADJUSTED FOR SECURITIZATIONS 1.45 % 2.03 % 3.34 % 3.04 % 3.87 % 1.78 % 4.03 0.41 4.91 3.64 5.65 0.80 4.00 1.06 5.27 4.16 5.87 2.44 4.41 2.14 6.18 5.14 6.44 3.06 5.12 3.00 6.06 5.09 6.31 3.29 5.22 3.23 5.59 5.27 6.36 3.97 5.34 0.74 5.09 3.87 5.76 1.50 4.20 3.46 5.67 5.36 6.72 3.97 5.60 0.70 0.93 1.53 2.26 2.36 0.82 2.72 0.23 0.24 1.32 1.59 2.60 1.04 0.36 0.47 1.46 1.57 2.73 1.23 0.95 1.17 2.56 3.79 3.87 2.01 2.63 2.05 2.84 2.87 3.31 2.61 2.73 2.17 3.77 2.24 3.27 2.71 0.29 0.35 1.39 1.58 2.67 1.14 3.00 2.79 4.39 2.92 3.52 3.07 2.96% 3.07% 3.18% 3.29% 3.11% 3.28% 2.61% 2.73% 2.63% 2.71% 3.06% 3.18% 2.53% 2.65% 3.37% 3.60% 3.55% 3.06% 3.06% 3.48% % 3.00% (a) Includes margin loans and the Firm's investment in asset-backed commercial paper under the Federal Reserve Bank of Boston's AML facility. (b) Includes securities sold but not yet purchased, brokerage customer payables and advances from Federal Home Loan Banks. (c) Includes securities borrowed. Page 5
  7. 7. JPMORGAN CHASE & CO. RECONCILIATION FROM REPORTED TO MANAGED SUMMARY (in millions) The Firm prepares its consolidated financial statements using accounting principles generally accepted in the United States of America ("U.S. GAAP"). That presentation, which is referred to as "reported basis," provides the reader with an understanding of the Firm's results that can be tracked consistently from year to year and enables a comparison of the Firm's performance with other companies' U.S. GAAP financial statements. In addition to analyzing the Firm's results on a reported basis, management reviews the Firm's results and the results of lines of business on a "managed" basis, which is a non-GAAP financial measure. The Firm's definition of managed basis starts with the reported U.S. GAAP results and includes certain reclassifications that assume credit card loans securitized by Card Services remain on the balance sheet and presents revenue on a fully taxable-equivalent ("FTE") basis. These adjustments do not have any impact on net income as reported by the lines of business or by the Firm as a whole. The impact of these adjustments are summarized below. For additional information about managed basis, please refer to the Glossary of Terms on page 37. QUARTERLY TRENDS YEAR-TO-DATE 2Q09 Change 2Q09 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 PRE-PROVISION PROFIT Total pre-provision profit - reported Impact of: Credit card securitizations Tax-equivalent adjustments Total pre-provision profit - managed PROVISION FOR CREDIT LOSSES Provision for credit losses - reported Impact of: Credit card securitizations Provision for credit losses - managed INCOME TAX EXPENSE Income tax expense (benefit) - reported Impact of: Tax-equivalent adjustments Income tax expense (benefit) - managed 1Q09 4Q08 3Q08 2Q08 $ 1,719 $ 1,837 $ 2,049 $ 1,771 $ $ (294) 1,425 $ (540) 1,297 $ (710) 1,339 $ (843) 928 $ 1Q09 1,803 2Q08 2009 2008 2009 Change 2008 (6) % (5) % $ 3,556 $ 3,599 (1) % (843) 960 46 10 65 48 $ (834) 2,722 $ (1,780) 1,819 53 50 NM $ 10 $ 50 $ 593 $ (115) $ (138) (80) $ 60 $ 1,691 (96) $ 335 345 $ 337 387 $ 556 1,149 $ 323 208 $ 247 109 (1) (11) 36 217 $ 672 732 $ 450 2,141 49 (66) $ 12,953 $ 11,658 $ 3,394 $ 5,743 $ 10,105 11 28 $ 24,611 $ 19,336 27 $ (294) 335 12,994 $ (540) 337 11,455 $ (710) 556 3,240 $ (843) 323 5,223 $ (843) 247 9,509 46 (1) 13 65 36 37 $ (834) 672 24,449 $ (1,780) 450 18,006 53 49 36 $ 12,670 $ 13,367 $ 13,832 $ 8,994 $ 8,294 (5) 53 $ 26,037 $ 15,953 63 $ 1,958 87 14,715 $ 2,004 96 15,467 $ 1,938 98 15,868 $ 1,716 155 10,865 $ 1,673 202 10,169 (2) (9) (5) 17 (57) 45 $ 3,962 183 30,182 $ 3,291 326 19,570 20 (44) 54 $ 25,623 $ 25,025 $ 17,226 $ 14,737 $ 18,399 2 39 $ 50,648 $ 35,289 44 $ 1,664 422 27,709 $ 1,464 433 26,922 $ 1,228 654 19,108 $ 873 478 16,088 $ 830 449 19,678 14 (3) 3 100 (6) 41 $ 3,128 855 54,631 $ 1,511 776 37,576 107 10 45 $ 12,103 $ 11,652 $ 5,971 $ 3,600 $ 6,222 4 95 $ 23,755 $ 14,181 68 $ 1,664 422 14,189 $ 1,464 433 13,549 $ 1,228 654 7,853 $ 873 478 4,951 $ 830 449 7,501 14 (3) 5 100 (6) 89 $ 3,128 855 27,738 $ 1,511 776 16,468 107 10 68 $ 8,031 $ 8,596 $ 7,313 $ 5,787 $ 3,455 (7) 132 $ 16,627 $ 7,879 111 $ 1,664 9,695 $ 1,464 10,060 $ 1,228 8,541 $ 873 6,660 $ 830 4,285 14 (4) 100 126 $ 3,128 19,755 $ 1,511 9,390 107 110 $ 1,351 $ 915 $ (719) $ (2,133) $ 764 48 77 $ 2,266 $ 1,926 18 $ 422 1,773 $ 433 1,348 $ 654 (65) $ 478 (1,655) $ 449 1,213 (3) 32 (6) 46 $ 855 3,121 $ 776 2,702 10 16 Page 6
  8. 8. JPMORGAN CHASE & CO. LINE OF BUSINESS FINANCIAL HIGHLIGHTS - MANAGED BASIS (in millions, except ratio data) QUARTERLY TRENDS YEAR-TO-DATE 2Q09 Change 2Q09 TOTAL NET REVENUE (FTE) Investment Bank (a) Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity (a) TOTAL NET REVENUE TOTAL PRE-PROVISION PROFIT Investment Bank (a) Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity (a) TOTAL PRE-PROVISION PROFIT NET INCOME (LOSS) Investment Bank Retail Financial Services Card Services Commercial Banking Treasury & Securities Services Asset Management Corporate/Private Equity TOTAL NET INCOME AVERAGE EQUITY (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 $ $ $ $ $ $ $ $ 1Q09 7,301 7,970 4,868 1,453 1,900 1,982 2,235 27,709 3,234 3,891 3,535 918 612 628 1,371 14,189 1,471 15 (672) 368 379 352 808 2,721 33,000 25,000 15,000 8,000 5,000 7,000 47,865 140,865 18 % (18) 18 30 20 $ $ $ $ $ $ $ $ 4Q08 8,371 8,835 5,129 1,402 1,821 1,703 (339) 26,922 3,597 4,664 3,783 849 502 405 (251) 13,549 1,606 474 (547) 338 308 224 (262) 2,141 33,000 25,000 15,000 8,000 5,000 7,000 43,493 136,493 20 % 8 (15) 17 25 13 $ $ $ $ $ $ $ $ 3Q08 (272) 8,684 4,908 1,479 2,249 1,658 402 19,108 (3,013) 4,638 3,419 980 910 445 474 7,853 (2,364) 624 (371) 480 533 255 1,545 702 33,000 25,000 15,000 8,000 4,500 7,000 46,257 138,757 (28) % 10 (10) 24 47 14 $ $ $ $ $ $ $ $ 2Q08 4,066 4,963 3,887 1,125 1,953 1,961 (1,867) 16,088 $ $ 250 2,184 2,693 639 614 599 (2,028) 4,951 $ $ 882 64 292 312 406 351 (1,780) 527 $ $ 26,000 17,000 14,100 7,000 3,500 5,500 53,540 126,640 13 1 8 18 46 25 $ $ % 1Q09 5,500 5,110 3,775 1,106 2,019 2,064 104 19,678 2Q08 2009 (13) % (10) (5) 4 4 16 NM 3 33 % 56 29 31 (6) (4) NM 41 $ 766 2,430 2,590 630 702 664 (281) 7,501 (10) (17) (7) 8 22 55 NM 5 322 60 36 46 (13) (5) NM 89 $ 394 503 250 355 425 395 (319) 2,003 (8) (97) (23) 9 23 57 NM 27 273 (97) NM 4 (11) (11) NM 36 10 3 42 47 6 14 43 38 (15) 11 23,319 17,000 14,100 7,000 3,500 5,066 56,421 126,406 7 12 7 20 49 31 % $ $ $ $ $ $ 2009 Change 2008 2008 15,672 16,805 9,997 2,855 3,721 3,685 1,896 54,631 6,831 8,555 7,318 1,767 1,114 1,033 1,120 27,738 3,077 489 (1,219) 706 687 576 546 4,862 33,000 25,000 15,000 8,000 5,000 7,000 45,691 138,691 19 % 4 (16) 18 28 17 $ $ $ $ $ $ $ $ 8,541 9,873 7,679 2,173 3,932 3,965 1,413 37,576 83 % 70 30 31 (5) (7) 34 45 1,254 4,621 5,222 1,212 1,387 1,242 1,530 16,468 445 85 40 46 (20) (17) (27) 68 307 192 859 647 828 751 792 4,376 NM 155 NM 9 (17) (23) (31) 11 22,659 17,000 14,100 7,000 3,500 5,033 56,201 125,493 46 47 6 14 43 39 (19) 11 3 2 12 19 48 30 % (a) In the second quarter of 2009, Investment Bank ("IB") began reporting credit reimbursement from TSS as a component of total net revenue, whereas TSS continues to report its credit reimbursement to IB as a separate line item on its income statement (not part of net revenue). Corporate/Private Equity includes an adjustment to offset IB's inclusion of the credit reimbursement in total net revenue. Prior periods have been revised for IB and Corporate/Private Equity to reflect this presentation. (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 YEAR-TO-DATE 2009 Change 2008 2Q09 Change 2Q09 INCOME STATEMENT REVENUE Investment banking fees Principal transactions Lending & deposit-related fees Asset management, administration and commissions All other income (a) Noninterest revenue Net interest income TOTAL NET REVENUE (b) $ Provision for credit losses REVENUE BY REGION (a) Americas Europe/Middle East/Africa Asia/Pacific Total net revenue $ 1,380 3,515 138 692 (56) 5,669 2,702 8,371 $ 3Q08 1,373 (6,160) 138 764 139 (3,746) 3,474 (272) $ 2Q08 1,593 (922) 118 847 (248) 1,388 2,678 4,066 $ 1Q09 1,735 838 105 709 (196) 3,191 2,309 5,500 2Q08 2009 62 % (48) 21 4 (93) (14) (10) (13) 29 % 120 59 1 45 52 6 33 $ 2008 3,619 5,356 305 1,409 (164) 10,525 5,147 15,672 $ 2,941 40 207 1,453 (232) 4,409 4,132 8,541 23 % NM 47 (3) 29 139 25 83 105 $ 1,210 765 234 398 (28) 119 2,081 1,016 2,677 1,390 4,067 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 (a) Total net revenue 2,239 1,841 167 717 (108) 4,856 2,445 7,301 4Q08 871 NONINTEREST EXPENSE Compensation expense Noncompensation expense TOTAL NONINTEREST EXPENSE Income (loss) before income tax expense Income tax expense (benefit) (c) NET INCOME (LOSS) 1Q09 3,330 1,444 4,774 1,166 1,575 2,741 2,162 1,654 3,816 3,132 1,602 4,734 (20) (4) (15) (15) (13) (14) 6,007 2,834 8,841 4,373 2,914 7,287 (1) 14 (8) NM NM 273 2,363 892 1,471 $ 18 % 0.83 56 37 $ $ $ $ 393 1,103 743 2,239 4,929 708 (575) 7,301 4,177 2,235 889 7,301 2,387 781 1,606 $ 20 % 0.89 57 40 $ $ $ $ 479 308 593 1,380 4,889 1,773 329 8,371 4,800 2,595 976 8,371 (3,778) (1,414) (2,364) $ (28) % (1.08) NM NM $ $ $ $ 579 330 464 1,373 (1,671) (94) 120 (272) (2,203) 2,026 (95) (272) 16 (866) 882 $ 13 % 0.39 94 53 $ $ $ $ 576 518 499 1,593 815 1,650 8 4,066 1,072 2,517 477 4,066 368 (26) 394 $ 7 % 0.19 86 57 $ $ $ $ 4,750 1,673 3,077 $ 19 % 0.86 56 38 370 542 823 1,735 2,347 1,079 339 5,500 (18) 258 25 62 1 (60) NM (13) 6 104 (10) 29 110 (34) NM 33 3,185 1,519 796 5,500 (13) (14) (9) (13) 31 47 12 33 $ $ $ $ 872 1,411 1,336 3,619 9,818 2,481 (246) 15,672 8,977 4,830 1,865 15,672 238 (69) 307 37 (3) 21 NM NM NM 3 % 0.08 85 51 $ $ $ $ 853 901 1,187 2,941 2,813 2,055 732 8,541 2 57 13 23 249 21 NM 83 3,741 3,167 1,633 8,541 140 53 14 83 (a) 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. IB recognizes this credit reimbursement in its credit portfolio business in all other income. Prior periods have been revised to conform with the current presentation. (b) Total net revenue included tax-equivalent adjustments, predominantly due to income tax credits related to affordable housing and alternative energy investments, as well as, tax-exempt income from municipal bond investments, of $334 million, $365 million, $583 million, $427 million, and $404 million, for the quarters ended June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, and June 30, 2008, respectively, and $699 million and $693 million for year-to-date 2009 and 2008, respectively. (c) The income tax benefit in the third quarter of 2008 is predominantly the result of reduced deferred tax liabilities on overseas earnings. Page 8
  10. 10. JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except headcount and ratio data) QUARTERLY TRENDS YEAR-TO-DATE 2009 Change 2008 2Q09 Change 2Q09 SELECTED BALANCE SHEET DATA (Period-end) Loans: Loans retained (a) Loans held-for-sale & loans at fair value Total loans Equity SELECTED BALANCE SHEET DATA (Average) Total assets Trading assets - debt and equity instruments Trading assets - derivative receivables Loans: 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 period-end loans (a) (d) Allowance for loan losses to average loans (a) (d) (e) Allowance for loan losses to nonperforming loans (c) Nonperforming loans to period-end loans Nonperforming loans to average loans 4Q08 3Q08 2Q08 1Q09 $ 64,500 6,814 71,314 33,000 $ 66,506 10,993 77,499 33,000 $ 71,357 13,660 85,017 33,000 $ 73,347 16,667 90,014 33,000 $ 70,690 19,699 90,389 26,000 $ 710,825 265,336 100,536 $ 733,166 272,998 125,021 $ 869,159 306,168 153,875 $ 890,040 360,821 105,462 $ 2Q08 2009 2008 (3) % (38) (8) - (9) % (65) (21) 27 $ 64,500 6,814 71,314 33,000 $ 70,690 19,699 90,389 26,000 (9) % (65) (21) 27 814,860 367,184 99,395 (3) (3) (20) (13) (28) 1 $ 721,934 269,146 112,711 $ 785,344 368,320 94,814 (8) (27) 19 68,224 8,934 77,158 531,632 33,000 $ 70,041 12,402 82,443 589,163 33,000 73,110 16,378 89,488 685,242 33,000 69,022 17,612 86,634 694,459 26,000 76,239 20,440 96,679 676,777 23,319 (3) (28) (6) (10) - (11) (56) (20) (21) 42 69,128 10,658 79,786 560,239 33,000 75,173 20,026 95,199 669,598 22,659 (8) (47) (16) (16) 46 25,783 Headcount CREDIT DATA AND QUALITY STATISTICS Net charge-offs (recoveries) Nonperforming assets: Loans (c) Derivative receivables Assets acquired in loan satisfactions Total nonperforming assets Allowance for credit losses: Allowance for loan losses Allowance for lending-related commitments Total allowance for credit losses 1Q09 26,142 27,938 30,993 37,057 (1) (30) 25,783 37,057 (30) NM NM 5 NM 96 (30) 32 49 NM NM 208 NM 3,519 704 311 4,534 313 76 101 490 NM NM 208 NM 9 19 10 110 (25) 88 5,101 351 5,452 2,429 469 2,898 110 (25) 88 433 $ 36 $ 87 $ 13 $ (8) 3,519 704 311 4,534 1,795 1,010 236 3,041 1,175 1,079 247 2,501 436 34 113 583 313 76 101 490 5,101 351 5,452 4,682 295 4,977 3,444 360 3,804 2,654 463 3,117 2,429 469 2,898 2.55 % 7.91 7.48 150 4.93 4.56 0.21 % 7.04 6.68 269 2.32 2.18 0.47 % 4.83 4.71 301 1.38 1.31 0.07 % 3.62 3.85 657 0.48 0.50 (0.04) % 3.44 3.19 843 0.35 0.32 $ 469 $ 1.37 % 7.91 7.38 150 4.93 4.41 0.01 % 3.44 3.23 843 0.35 0.33 (a) Loans retained included credit portfolio loans, leveraged leases and other accrual loans, and excluded loans held-for-sale and loans accounted for at fair value. (b) Adjusted assets, a non-GAAP financial measure, equals total assets minus (1) securities purchased under resale agreements and securities borrowed less securities sold, not yet purchased; (2) assets of variable interest entities ("VIEs") consolidated under FIN 46R; (3) cash and securities segregated and on deposit for regulatory and other purposes; (4) goodwill and intangibles; (5) securities received as collateral; and (6) investments purchased under the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility. The amount of adjusted assets is presented to assist the reader in comparing the Investment Bank's ("IB") asset and capital levels to other investment banks in the securities industry. Asset-to-equity leverage ratios are commonly used as one measure to assess a company’s capital adequacy. IB believes an adjusted asset amount that excludes the assets discussed above, which were considered to have a low risk profile, provides a more meaningful measure of balance sheet leverage in the securities industry. (c) Nonperforming loans included loans held-for-sale and loans at fair value of $112 million, $57 million, $32 million, $32 million, and $25 million, at June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, and June 30, 2008, respectively, which were excluded from the allowance coverage ratios. Nonperforming loans excluded distressed loans held-for-sale that were purchased as part of IB's proprietary activities. (d) Loans held-for-sale and loans at fair value were excluded when calculating the allowance coverage ratio and net charge-off (recovery) rate. (e) Excluding the impact of a loan originated in March 2008 to Bear Stearns, the adjusted ratio would be 3.46% and 3.40% for the quarter ended June 30, 2008, and the six months ended June 30, 2008, respectively. The average balance of the loan extended to Bear Stearns was $6.0 billion and $3.8 billion for the quarter ended June 30, 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 YEAR-TO-DATE 2Q09 Change 2Q09 1Q09 MARKET RISK - AVERAGE TRADING AND CREDIT PORTFOLIO VAR - 99% CONFIDENCE LEVEL (a) Trading activities: Fixed income $ Foreign exchange Equities Commodities and other Diversification (b) Total trading VaR (c) 249 26 77 34 (136) 250 Credit portfolio VaR (d) Diversification (b) Total trading and credit portfolio VaR 133 (116) 267 $ $ 4Q08 218 40 162 28 (159) 289 182 (135) 336 $ June 30, 2009 YTD MARKET SHARES AND RANKINGS (e) Global debt, equity and equity-related Global syndicated loans Global long-term debt (f) Global equity and equity-related (g) Global announced M&A (h) U.S. debt, equity and equity-related U.S. syndicated loans U.S. long-term debt (f) U.S. equity and equity-related (g) U.S. announced M&A (h) Market Share 11% 10% 9% 16% 32% 15% 25% 15% 17% 48% Rankings #1 #1 #1 #1 #3 #1 #1 #1 #1 #3 $ $ 3Q08 276 55 87 30 (146) 302 165 (140) 327 $ 2Q08 183 20 80 41 (104) 220 47 (49) 218 $ $ $ 1Q09 2Q08 155 26 30 31 (92) 150 14 % (35) (52) 21 14 (13) 35 (36) 149 (27) 14 (21) 2009 61 % 157 10 (48) 67 280 (222) 79 $ $ 2009 Change 2008 2008 234 33 119 31 (148) 269 157 (125) 301 $ $ 137 30 31 29 (91) 136 33 (34) 135 71 % 10 284 7 (63) 98 376 (268) 123 Full Year 2008 Market Share 10% 12% 9% 10% 27% 15% 25% 15% 11% 33% Rankings #1 #1 #3 #1 #2 #2 #1 #2 #1 #2 (a) Results for second quarter 2008 include one month of the combined Firm's results and two months of heritage JPMorgan Chase & Co. results. (b) Average VaRs were less than the sum of the VaRs of their market risk components, which was due to risk offsets resulting from portfolio diversification. The diversification effect reflected the fact that the risks were not perfectly correlated. The risk of a portfolio of positions is usually less than the sum of the risks of the positions themselves. (c) Trading VaR includes predominantly all trading activities in IB; however, particular risk parameters of certain products are not fully captured, for example, correlation risk. Trading VaR does not include VaR related to held-for-sale funded loans and unfunded commitments, nor the debit valuation adjustments ("DVA") taken on derivative and structured liabilities to reflect the credit quality of the Firm. Trading VaR also does not include the MSR portfolio or VaR related to other corporate functions, such as Corporate/Private Equity. Beginning in the fourth quarter of 2008, trading VaR includes the estimated credit spread sensitivity of certain mortgage products. (d) Included VaR on derivative credit valuation adjustments ("CVA"), hedges of the CVA and mark-to-market hedges of the retained loan portfolio, which are all reported in principal transactions revenue. This VaR does not include the retained loan portfolio. (e) Source: Thomson Reuters. Full year 2008 results are pro forma for the Bear Stearns merger. (f) Includes asset-backed securities, mortgage-backed securities and municipal securities. (g) Includes rights offerings; U.S. domiciled equity and equity-related transactions. (h) Global announced M&A is based upon rank value; all other rankings are based upon proceeds, with full credit to each book manager/equal if joint. Because of joint assignments, market share of all participants will add up to more than 100%. Global and U.S. announced M&A market share and ranking for 2008 include transactions withdrawn since December 31, 2008. U.S. announced M&A represents any U.S. involvement ranking. Page 10
  12. 12. JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS (in millions, except ratio and headcount data) QUARTERLY TRENDS YEAR-TO-DATE 2Q09 Change 2Q09 INCOME STATEMENT REVENUE Lending & deposit-related fees Asset management, administration and commissions Mortgage fees and related income Credit card income Other income Noninterest revenue Net interest income TOTAL NET REVENUE $ 1Q09 1,003 425 807 411 294 2,940 5,030 7,970 $ 4Q08 948 435 1,633 367 214 3,597 5,238 8,835 $ 3Q08 1,050 412 1,962 367 183 3,974 4,710 8,684 $ 2Q08 538 346 438 204 206 1,732 3,231 4,963 $ 1Q09 497 375 696 194 198 1,960 3,150 5,110 2Q08 6 % (2) (51) 12 37 (18) (4) (10) 2009 102 % 13 16 112 48 50 60 56 $ 2009 Change 2008 2008 1,951 860 2,440 778 508 6,537 10,268 16,805 $ 958 752 1,221 368 350 3,649 6,224 9,873 104 % 14 100 111 45 79 65 70 Provision for credit losses 3,846 3,877 3,576 2,056 1,585 (1) 143 7,723 4,273 81 NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE 1,631 2,365 83 4,079 1,631 2,457 83 4,171 1,604 2,345 97 4,046 1,120 1,559 100 2,779 1,184 1,396 100 2,680 (4) (2) 38 69 (17) 52 3,262 4,822 166 8,250 2,344 2,708 200 5,252 39 78 (17) 57 845 342 503 (94) (90) (97) (95) (91) (97) Income (loss) before income tax expense Income tax expense (benefit) NET INCOME (LOSS) $ FINANCIAL RATIOS ROE Overhead ratio Overhead ratio excluding core deposit intangibles (a) SELECTED BALANCE SHEET DATA (Period-end) Assets Loans: Loans retained Loans held-for-sale & loans at fair value (b) Total loans Deposits Equity SELECTED BALANCE SHEET DATA (Average) Assets Loans: Loans retained Loans held-for-sale & loans at fair value (b) Total loans Deposits Equity Headcount 45 30 15 $ % 51 50 $ 399,916 410,228 $ 8 % 47 46 $ 353,934 13,192 367,126 371,241 25,000 $ 787 313 474 412,505 423,472 $ 10 % 47 45 $ 364,220 12,529 376,749 380,140 25,000 $ 1,062 438 624 419,831 423,699 $ 1 % 56 54 $ 368,786 9,996 378,782 360,451 25,000 $ 128 64 64 426,435 12 % 52 51 $ 265,367 $ 832 343 489 348 156 192 $ 4 % 49 48 265,845 (3) 50 223,047 16,282 239,329 223,121 17,000 371,153 10,223 381,376 353,660 25,000 $ $ (3) 5 (3) (2) - 59 (19) 53 66 47 267,808 (3) 53 $ 399,916 2 % 53 51 $ 416,813 $ 265,845 50 223,047 16,282 239,329 223,121 17,000 353,934 13,192 367,126 371,241 25,000 $ 139 120 155 59 (19) 53 66 47 263,911 58 359,372 19,043 378,415 377,259 25,000 366,925 16,526 383,451 370,278 25,000 369,172 13,848 383,020 358,523 25,000 222,640 16,037 238,677 222,180 17,000 221,132 20,492 241,624 226,487 17,000 (2) 15 (1) 2 - 63 (7) 57 67 47 363,127 17,792 380,919 373,788 25,000 217,859 19,167 237,026 226,021 17,000 67 (7) 61 65 47 103,733 100,677 102,007 101,826 69,550 3 49 103,733 69,550 49 (a) Retail Financial Services uses the overhead ratio (excluding the amortization of core deposit intangibles ("CDI")), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in the overhead ratio calculation results in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this method would result in an improving overhead ratio over time, all things remaining equal. This non-GAAP ratio excludes Retail Banking's core deposit intangibles amortization expense related to the 2006 Bank of New York transaction and the 2004 Bank One merger of $82 million, $83 million, $97 million, $99 million, and $99 million for the quarters ending June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, and June 30, 2008, respectively, and $165 million and $198 million for year-to-date 2009 and 2008, respectively. (b) Loans at fair value consist of prime mortgages originated with the intent to sell that are accounted for at fair value and classified as trading assets on the Consolidated Balance Sheets. These loans totaled $11.3 billion, $8.9 billion, $8.0 billion, $8.6 billion, and $14.1 billion at June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, and June 30, 2008, respectively. Average balances of these loans totaled $16.2 billion, $13.4 billion, $12.0 billion, $14.5 billion, and $16.9 billion for the quarters ended June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, and June 30, 2008, respectively, and $14.9 billion and $15.2 billion for year-to-date 2009 and 2008, respectively. Page 11
  13. 13. JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data) QUARTERLY TRENDS YEAR-TO-DATE 2Q09 Change 2Q09 CREDIT DATA AND QUALITY STATISTICS Net charge-offs Nonperforming loans (a) (b) (c) Nonperforming assets (a) (b) (c) Allowance for loan losses Net charge-off rate (d) Net charge-off rate excluding purchased credit-impaired loans (d) (e) Allowance for loan losses to ending loans (d) Allowance for loan losses to ending loans excluding purchased credit-impaired loans (d) (e) Allowance for loan losses to nonperforming loans (a) (d) Nonperforming loans to total loans Nonperforming loans to total loans excluding purchased credit-impaired loans (a) $ 1Q09 2,649 8,995 10,554 11,832 2.96 % 3.89 3.34 4.41 135 2.45 3.19 $ 4Q08 2,176 7,978 9,846 10,619 2.41 % 3.16 2.92 3.84 138 2.12 2.76 $ 3Q08 1,701 6,784 9,077 8,918 1.83 % 2.41 2.42 3.19 136 1.79 2.34 $ 2Q08 1,326 5,724 8,085 7,517 2.37 % 2.37 2.03 2.56 136 1.50 1.88 $ 1Q09 1,025 4,574 5,333 5,062 1.86 % 1.86 2.27 2.27 115 1.91 1.91 2Q08 22 % 13 7 11 2009 158 % 97 98 134 $ 2009 Change 2008 2008 4,825 8,995 10,554 11,832 2.68 % 3.53 3.34 4.41 135 2.45 3.19 $ 1,850 4,574 5,333 5,062 161 % 97 98 134 1.71 % 1.71 2.27 2.27 115 1.91 1.91 (a) Excludes purchased credit-impaired loans accounted for under SOP 03-3 that were acquired as part of the Washington Mutual transaction. These loans are accounted for on a pool basis and the pools are considered to be performing under SOP 03-3. (b) Nonperforming loans and assets included loans held-for-sale and loans accounted for at fair value of $203 million, $264 million, $236 million, $207 million, and $180 million at June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, and June 30, 2008, respectively. Certain of these loans are classified as trading assets on the Consolidated Balance Sheets. (c) Nonperforming loans and assets excluded: (1) loans eligible for repurchase, as well as loans repurchased from Government National Mortgage Association ("GNMA") pools that are insured by U.S. government agencies, of $4.7 billion, $4.6 billion, $3.3 billion, $1.8 billion, and $1.9 billion at June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, and June 30, 2008, respectively; and (2) student loans that are 90 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program, of $473 million, $433 million, $437 million, $405 million, and $394 million at June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, and June 30, 2008, respectively. These amounts for GNMA and student loans are excluded, as reimbursement is proceeding normally. (d) Loans held-for-sale and loans accounted for at fair value were excluded when calculating the allowance coverage ratio and the net charge-off rate. (e) Excludes the impact of purchased credit-impaired loans accounted for under SOP 03-3 that were acquired as part of the Washington Mutual transaction. These loans were accounted for at fair value on the acquisition date, which incorporated management's estimate, as of that date, of credit losses over the remaining life of the portfolio. No allowance for loan losses has been recorded for these loans as of June 30, 2009, March 31, 2009, December 31, 2008, and September 30, 2008, respectively. Page 12
  14. 14. JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) QUARTERLY TRENDS YEAR-TO-DATE 2Q09 Change 2Q09 1Q09 4Q08 3Q08 2Q08 1Q09 2Q08 2009 2009 Change 2008 2008 RETAIL BANKING Noninterest revenue Net interest income Total net revenue Provision for credit losses Noninterest expense Income before income tax expense Net income $ $ Overhead ratio Overhead ratio excluding core deposit intangibles (a) BUSINESS METRICS (in billions) Business banking origination volume End-of-period loans owned End-of-period deposits: Checking Savings Time and other Total end-of-period deposits Average loans owned Average deposits: Checking Savings Time and other Total average deposits Deposit margin Average assets CREDIT DATA AND QUALITY STATISTICS Net charge-offs Net charge-off rate Nonperforming assets 1,803 2,719 4,522 361 2,557 1,604 970 $ $ 57 % 55 1,718 2,614 4,332 325 2,580 1,427 863 $ $ 60 % 58 1,834 2,687 4,521 268 2,533 1,720 1,040 $ $ 56 % 54 1,089 1,756 2,845 70 1,580 1,195 723 $ $ 56 % 52 1,062 1,671 2,733 62 1,557 1,114 674 5 % 4 4 11 (1) 12 12 70 % 63 65 482 64 44 44 $ $ 57 % 53 3,521 5,333 8,854 686 5,137 3,031 1,833 $ $ 58 % 56 2,028 3,216 5,244 111 3,119 2,014 1,219 74 % 66 69 NM 65 50 50 59 % 56 $ 0.6 17.8 $ 0.5 18.2 $ 0.8 18.4 $ 1.2 18.6 $ 1.7 16.5 20 (2) (65) 8 $ 1.1 17.8 $ 3.5 16.5 (69) 8 $ 114.1 150.4 78.9 343.4 18.0 $ 113.9 152.4 86.5 352.8 18.4 $ 109.2 144.0 89.1 342.3 18.2 $ 106.7 146.4 85.8 338.9 16.6 $ 69.1 105.8 37.0 211.9 16.2 (1) (9) (3) (2) 65 42 113 62 11 $ 114.1 150.4 78.9 343.4 18.2 $ 69.1 105.8 37.0 211.9 16.0 65 42 113 62 14 $ $ $ $ $ $ $ $ $ $ 114.2 $ 151.2 82.7 348.1 2.92 % 29.1 $ 109.4 $ 148.2 88.2 345.8 2.85 % 30.2 $ 105.8 $ 145.3 88.7 339.8 2.94 % 28.7 $ 68.0 $ 105.4 36.7 210.1 3.06 % 25.6 $ 68.4 105.9 39.6 213.9 2.88 % 25.7 4 2 (6) 1 67 43 109 63 $ (4) 13 $ 211 $ 4.70 % 686 $ 175 $ 3.86 % 579 $ 168 $ 3.67 % 424 $ 68 $ 1.63 % 380 $ 61 1.51 % 337 21 246 $ 18 104 $ 20 2 $ $ 111.8 $ 149.6 85.6 347.0 2.89 % 29.6 $ 67.3 103.1 43.6 214.0 2.76 % 25.5 66 45 96 62 386 $ 4.28 % 686 $ 110 1.38 % 337 251 16 104 RETAIL BRANCH BUSINESS METRICS Investment sales volume Number of: Branches ATMs Personal bankers Sales specialists Active online customers (in thousands) Checking accounts (in thousands) $ 5,292 5,203 14,144 15,959 5,485 13,930 25,252 $ 4,398 5,186 14,159 15,544 5,454 12,882 24,984 $ 3,956 5,474 14,568 15,825 5,661 11,710 24,499 $ 4,389 5,423 14,389 15,491 5,899 11,682 24,490 $ 5,211 3,157 9,310 9,995 4,116 7,180 11,336 3 1 8 1 65 52 60 33 94 123 9,690 $ 5,203 14,144 15,959 5,485 13,930 25,252 9,295 4 3,157 9,310 9,995 4,116 7,180 11,336 65 52 60 33 94 123 (a) Retail Banking uses the overhead ratio (excluding the amortization of core deposit intangibles ("CDI")), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in the overhead ratio calculation results in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this method would result in an improving overhead ratio over time, all things remaining equal. This non-GAAP ratio excludes Retail Banking's core deposit intangibles amortization expense related to the 2006 Bank of New York transaction and the 2004 Bank One merger of $82 million, $83 million, $97 million, $99 million, and $99 million for the quarters ending June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, and June 30, 2008, respectively, and $165 million and $198 million for year-to-date 2009 and 2008, respectively. Page 13
  15. 15. JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) QUARTERLY TRENDS YEAR-TO-DATE 2009 Change 2008 2Q09 Change 2Q09 1Q09 4Q08 3Q08 2Q08 1Q09 2Q08 2009 2008 CONSUMER LENDING Noninterest revenue Net interest income Total net revenue Provision for credit losses Noninterest expense Income (loss) before income tax expense Net income (loss) $ $ Overhead ratio BUSINESS METRICS (in billions) LOANS EXCLUDING PURCHASED CREDIT-IMPAIRED LOANS (a) End-of-period loans owned: Home equity Prime mortgage Subprime mortgage Option ARMs Student loans Auto loans Other Total end-of-period loans Average loans owned: Home equity Prime mortgage Subprime mortgage Option ARMs Student loans Auto loans Other Total average loans PURCHASED CREDIT-IMPAIRED LOANS (a) End-of-period loans owned: Home equity Prime mortgage Subprime mortgage Option ARMs Total end-of-period loans Average loans owned: Home equity Prime mortgage Subprime mortgage Option ARMs Total average loans TOTAL CONSUMER LENDING PORTFOLIO End-of-period loans owned: Home equity Prime mortgage Subprime mortgage Option ARMs Student loans Auto loans Other Total end-of-period loans Average loans owned: Home equity Prime mortgage Subprime mortgage Option ARMs Student loans Auto loans Other Total average loans owned (b) 1,137 2,311 3,448 3,485 1,522 (1,559) (955) $ $ 44 % 1,879 2,624 4,503 3,552 1,591 (640) (389) $ $ 35 % 2,140 2,023 4,163 3,308 1,513 (658) (416) $ $ 36 % 643 1,475 2,118 1,986 1,199 (1,067) (659) $ $ 57 % 898 1,479 2,377 1,523 1,123 (269) (171) (39) % (12) (23) (2) (4) (144) (146) 27 % 56 45 129 36 (480) (458) $ $ 47 % 3,016 4,935 7,951 7,037 3,113 (2,199) (1,344) $ $ 39 % 1,621 3,008 4,629 4,162 2,133 (1,666) (1,027) 86 % 64 72 69 46 (32) (31) 46 % $ 108.2 62.1 13.8 9.0 15.6 42.9 1.0 252.6 $ 111.7 65.4 14.6 9.0 17.3 43.1 1.0 262.1 $ 114.3 65.2 15.3 9.0 15.9 42.6 1.3 263.6 $ 116.8 63.0 18.1 19.0 15.3 43.3 1.0 276.5 $ 95.1 40.1 14.8 13.0 44.9 0.9 208.8 (3) (5) (5) (10) (4) 14 55 (7) NM 20 (4) 11 21 $ 108.2 62.1 13.8 9.0 15.6 42.9 1.0 252.6 $ 95.1 40.1 14.8 13.0 44.9 0.9 208.8 14 55 (7) NM 20 (4) 11 21 $ 110.1 63.3 14.3 9.1 16.7 43.1 1.0 257.6 $ 113.4 65.4 14.9 8.8 17.0 42.5 1.5 263.5 $ 114.6 65.0 15.7 9.0 15.6 42.9 1.5 264.3 $ 94.8 39.7 14.2 14.1 43.9 0.9 207.6 $ 95.1 39.3 15.5 12.7 44.9 1.0 208.5 (3) (3) (4) 3 (2) 1 (33) (2) 16 61 (8) NM 31 (4) 24 $ 111.7 64.4 14.6 9.0 16.8 42.8 1.3 260.6 $ 95.0 37.7 15.6 12.4 44.1 1.1 205.9 18 71 (6) NM 35 (3) 18 27 $ 27.7 20.8 6.4 30.5 85.4 $ 28.4 21.4 6.6 31.2 87.6 $ 28.6 21.8 6.8 31.6 88.8 $ 26.5 24.7 3.9 22.6 77.7 $ - (2) (3) (3) (2) (3) NM NM NM NM NM $ 27.7 20.8 6.4 30.5 85.4 $ - NM NM NM NM NM $ 28.0 21.0 6.5 31.0 86.5 $ 28.4 21.6 6.7 31.4 88.1 $ 28.2 21.9 6.8 31.6 88.5 $ - $ - (1) (3) (3) (1) (2) NM NM NM NM NM $ 28.2 21.3 6.6 31.2 87.3 $ - NM NM NM NM NM $ 135.9 82.9 20.2 39.5 15.6 42.9 1.0 338.0 $ 140.1 86.8 21.2 40.2 17.3 43.1 1.0 349.7 $ 142.9 87.0 22.1 40.6 15.9 42.6 1.3 352.4 $ 143.3 87.7 22.0 41.6 15.3 43.3 1.0 354.2 $ 95.1 40.1 14.8 13.0 44.9 0.9 208.8 (3) (4) (5) (2) (10) (3) 43 107 36 NM 20 (4) 11 62 $ 135.9 82.9 20.2 39.5 15.6 42.9 1.0 338.0 $ 95.1 40.1 14.8 13.0 44.9 0.9 208.8 43 107 36 NM 20 (4) 11 62 $ 138.1 84.3 20.8 40.1 16.7 43.1 1.0 344.1 $ 141.8 87.0 21.6 40.2 17.0 42.5 1.5 351.6 $ 142.8 86.9 22.5 40.6 15.6 42.9 1.5 352.8 $ 94.8 39.7 14.2 14.1 43.9 0.9 207.6 $ 95.1 39.3 15.5 12.7 44.9 1.0 208.5 (3) (3) (4) (2) 1 (33) (2) 45 115 34 NM 31 (4) 65 $ 139.9 85.7 21.2 40.2 16.8 42.8 1.3 347.9 $ 95.0 37.7 15.6 12.4 44.1 1.1 205.9 47 127 36 NM 35 (3) 18 69 (a) Purchased credit-impaired loans accounted for under SOP 03-3 represent loans acquired in the Washington Mutual transaction for which a deterioration in credit quality occurred between the origination date and JPMorgan Chase's acquisition date. Under SOP 03-3, these loans were initially recorded at fair value and accrete interest income over the estimated life of the loan when cash flows are reasonably estimable, even if the underlying loans are contractually past due. (b) Total average loans include loans held-for-sale of $2.8 billion, $3.1 billion, $1.8 billion, $1.5 billion, and $3.6 billion for the quarters ended June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, and June 30, 2008, respectively, and $2.9 billion and $4.0 billion for year-to-date 2009 and 2008, respectively. Page 14
  16. 16. JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) QUARTERLY TRENDS YEAR-TO-DATE 2Q09 Change 2Q09 1Q09 4Q08 3Q08 2Q08 1Q09 2Q08 2009 2009 Change 2008 2008 CONSUMER LENDING (continued) CREDIT DATA AND QUALITY STATISTICS Net charge-offs excluding purchased credit-impaired loans: (a) Home equity Prime mortgage Subprime mortgage Option ARMs Auto loans Other Total net charge-offs Net charge-off rate excluding purchased credit-impaired loans: (a) Home equity Prime mortgage Subprime mortgage Option ARMs Auto loans Other Total net charge-off rate excluding purchased credit-impaired loans (b) Net charge-off rate - reported: Home equity Prime mortgage Subprime mortgage Option ARMs Auto loans Other Total net charge-off rate - reported (b) 30+ day delinquency rate excluding purchased credit-impaired loans (c) (d) (e) Nonperforming assets (f) (g) Allowance for loan losses to ending loans Allowance for loan losses to ending loans excluding purchased credit-impaired loans (a) $ 1,265 481 410 15 146 121 2,438 $ 4.61 % 3.07 11.50 0.66 1.36 3.15 3.84 3.67 2.30 7.91 0.15 1.36 3.15 2.87 $ 5.22 9,868 $ 3.23 % 4.34 1,098 312 364 4 174 49 2,001 $ 770 195 319 207 42 1,533 $ 663 177 273 124 21 1,258 $ 511 104 192 119 38 964 3.93 % 1.95 9.91 0.18 1.66 1.25 3.12 2.67 % 1.20 8.08 1.92 1.08 2.32 2.78 % 1.79 7.65 1.12 0.60 2.43 2.15 0.89 5.64 1.92 1.08 1.74 2.78 1.79 7.65 1.12 0.60 2.43 148 % 363 114 NM 23 218 153 $ 2.16 % 1.08 4.98 1.07 1.44 1.89 3.14 1.46 6.83 0.04 1.66 1.25 2.33 15 % 54 13 275 (16) 147 22 2.16 1.08 4.98 1.07 1.44 1.89 4.73 9,267 $ 2.83 % 3.79 4.21 8,653 $ 2.36 % 3.16 3.16 7,705 $ 1.95 % 2.50 3.88 4,996 2.33 % 2.33 2,363 793 774 19 320 170 4,439 $ 4.27 % 2.50 10.69 0.43 1.51 2.18 3.47 3.41 1.88 7.36 0.10 1.51 2.18 2.59 6 98 $ 5.22 9,868 $ 3.23 % 4.34 958 154 341 237 50 1,740 147 % 415 127 NM 35 240 155 2.03 % 0.83 4.40 1.08 1.01 1.73 2.03 0.83 4.40 1.08 1.01 1.73 3.88 4,996 2.33 % 2.33 98 (a) Excludes the impact of purchased credit-impaired loans accounted for under SOP 03-3 that were acquired as part of the Washington Mutual transaction. These loans were accounted for at fair value on the acquisition date, which incorporated management's estimate, as of that date, of credit losses over the remaining life of the portfolio. No allowance for loan losses and no charge-offs have been recorded for these loans as of June 30, 2009, March 31, 2009, December 31, 2008, and September 30, 2008, respectively. (b) Average loans held-for-sale of $2.8 billion, $3.1 billion, $1.8 billion, $1.5 billion, and $3.6 billion for the quarters ended June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, and June 30, 2008, respectively, and $2.9 billion and $4.0 billion for year-to-date 2009 and 2008, respectively, were excluded when calculating the net charge-off rate. (c) Excluded loans eligible for repurchase, as well as loans repurchased from GNMA pools that are insured by U.S. government agencies, of $4.6 billion, $4.5 billion, $3.2 billion, $2.0 billion, and $1.5 billion at June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, and June 30, 2008, respectively. These amounts are excluded, as reimbursement is proceeding normally. (d) Excluded loans that are 30 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program, of $854 million, $770 million, $824 million, $787 million, and $735 million at June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, and June 30, 2008, respectively. These amounts are excluded as reimbursement is proceeding normally. (e) The delinquency rate for purchased credit-impaired loans accounted for under SOP 03-3 was 23.37%, 21.36%, 17.89%, and 13.21% at June 30, 2009, March 31, 2009, December 31, 2008, and September 30, 2008, respectively. There were no purchased credit-impaired loans at June 30, 2008. (f) Nonperforming assets excluded: (1) loans eligible for repurchase, as well as loans repurchased from Governmental National Mortgage Association ("GNMA") pools that are insured by U.S. government agencies, of $4.7 billion, $4.6 billion, $3.3 billion, $1.8 billion, and $1.9 billion at June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, and June 30, 2008, respectively; and (2) student loans that are 90 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program, of $473 million, $433 million, $437 million, $405 million, and $394 million at June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, and June 30, 2008, respectively. These amounts for GNMA and student loans are excluded, as reimbursement is proceeding normally. (g) Excludes purchased credit-impaired loans accounted for under SOP 03-3 that were acquired as part of the Washington Mutual transaction. These loans are accounted for on a pool basis and the pools are considered to be performing under SOP 03-3. Page 15
  17. 17. JPMORGAN CHASE & CO. RETAIL FINANCIAL SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in billions, except where otherwise noted) QUARTERLY TRENDS YEAR-TO-DATE 2009 Change 2008 2Q09 Change 2Q09 1Q09 4Q08 3Q08 2Q08 1Q09 2Q08 2009 2008 CONSUMER LENDING (continued) Origination volume: Mortgage origination volume by channel Retail Wholesale Correspondent CNT (negotiated transactions) Total mortgage origination volume Home equity Student loans Auto loans $ Average mortgage loans held-for-sale & loans at fair value (a) Average assets Third-party mortgage loans serviced (ending) MSR net carrying value (ending) SUPPLEMENTAL MORTGAGE FEES AND RELATED INCOME DETAILS (in millions) Production revenue Net mortgage servicing revenue: Loan servicing revenue Changes in MSR asset fair value: Due to inputs or assumptions in model Other changes in fair value Total changes in MSR asset fair value Derivative valuation adjustments and other Total net mortgage servicing revenue Mortgage fees and related income 14.7 2.4 20.2 3.8 41.1 0.6 0.4 5.3 $ 16.7 381.1 1,117.5 14.6 $ 284 13.6 2.6 17.0 4.5 37.7 0.9 1.7 5.6 $ 14.0 393.3 1,148.8 10.6 $ 481 7.6 3.8 13.3 3.4 28.1 1.7 1.0 2.8 $ 12.2 395.0 1,172.6 9.3 $ 62 1,279 1,222 1,366 3,831 (837) 2,994 1,310 (1,073) 237 (6,950) (843) (7,793) (3,750) 523 807 (307) 1,152 1,633 8,327 1,900 1,962 8.4 5.9 13.2 10.2 37.7 2.6 2.6 3.8 $ 14.9 239.8 1,114.8 16.4 $ 66 654 (786) (390) (1,176) 894 372 438 12.5 9.1 17.0 17.5 56.1 5.3 1.3 5.6 8 % (8) 19 (16) 9 (33) (76) (5) 18 % (74) 19 (78) (27) (89) (69) (5) $ 28.3 5.0 37.2 8.3 78.8 1.5 2.1 10.9 17.4 242.1 659.1 10.9 $ 19 (3) (3) 38 (4) 57 70 34 394 (41) (28) 645 5 98 2,501 $ 15.3 387.2 1,117.5 14.6 $ 765 25.1 19.7 29.0 29.4 103.2 12.0 3.3 12.8 13 % (75) 28 (72) (24) (88) (36) (15) 15.6 238.4 659.1 10.9 (2) 62 70 34 770 (1) $ 1,238 102 1,519 (394) 1,125 192 22 NM 152 (112) 166 5,141 (1,910) 3,231 887 (819) 68 480 (133) NM (1,468) 302 696 NM (55) (51) (155) 73 16 (4,057) 1,675 2,440 (855) 451 1,221 (375) 271 100 (a) Loans at fair value consist of prime mortgages originated with the intent to sell that are accounted for at fair value and classified as trading assets on the Consolidated Balance Sheets. Average balances of these loans totaled $16.2 billion, $13.4 billion, $12.0 billion, $14.5 billion, and $16.9 billion for the quarters ended June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, and June 30, 2008, respectively, and $14.9 billion and $15.2 billion for year-to-date 2009 and 2008, respectively. Page 16
  18. 18. JPMORGAN CHASE & CO. CARD SERVICES - MANAGED BASIS FINANCIAL HIGHLIGHTS (in millions, except ratio data and where otherwise noted) QUARTERLY TRENDS YEAR-TO-DATE 2Q09 Change 2Q09 INCOME STATEMENT REVENUE Credit card income All other income Noninterest revenue Net interest income TOTAL NET REVENUE $ 1Q09 921 (364) 557 4,311 4,868 $ 4Q08 844 (197) 647 4,482 5,129 $ 3Q08 862 (272) 590 4,318 4,908 $ 2Q08 633 13 646 3,241 3,887 $ 1Q09 673 91 764 3,011 3,775 2Q08 9 % (85) (14) (4) (5) 2009 37 % NM (27) 43 29 $ 2009 Change 2008 2008 1,765 (561) 1,204 8,793 9,997 $ 1,273 210 1,483 6,196 7,679 39 % NM (19) 42 30 Provision for credit losses 4,603 4,653 3,966 2,229 2,194 (1) 110 9,256 3,864 140 NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE 329 873 131 1,333 357 850 139 1,346 335 979 175 1,489 267 773 154 1,194 258 763 164 1,185 (8) 3 (6) (1) 28 14 (20) 12 686 1,723 270 2,679 525 1,604 328 2,457 31 7 (18) 9 $ 396 146 250 (23) (23) (23) NM NM NM $ (1,938) (719) (1,219) $ 1,358 499 859 NM NM NM $ 36 (49) NM $ (448) $ 106 NM Income (loss) before income tax expense Income tax expense (benefit) NET INCOME (LOSS) Memo: Net securitization income (loss) $ (1,068) (396) (672) $ (268) FINANCIAL METRICS ROE Overhead ratio % of average managed outstandings: Net interest income Provision for credit losses Noninterest revenue Risk adjusted margin (a) Noninterest expense Pretax income (loss) (ROO) (b) Net income (loss) BUSINESS METRICS Charge volume (in billions) Net accounts opened (in millions) (c) Credit cards issued (in millions) Number of registered internet customers (in millions) Merchant acquiring business (d) Bank card volume (in billions) Total transactions (in billions) (a) (b) (c) (d) $ (870) (323) (547) $ (180) (18) % 27 $ (547) (176) (371) $ 464 172 292 $ (261) $ (28) (15) % 26 9.93 10.60 1.28 0.61 3.07 (2.46) (1.55) (10) % 30 9.91 10.29 1.43 1.05 2.98 (1.92) (1.21) 8 % 31 9.17 8.42 1.25 2.00 3.16 (1.16) (0.79) 7 % 31 8.18 5.63 1.63 4.19 3.01 1.17 0.74 (16) % 27 7.92 5.77 2.01 4.16 3.12 1.04 0.66 12 % 32 9.92 10.44 1.36 0.84 3.02 (2.19) (1.38) 8.13 5.07 1.95 5.01 3.23 1.78 1.13 $ 82.8 2.4 151.9 30.5 $ 76.0 2.2 159.0 33.8 $ 96.0 4.3 168.7 35.6 $ 93.9 16.6 171.9 34.3 $ 93.6 3.6 157.6 28.0 9 9 (4) (10) (12) (33) (4) 9 $ 158.8 4.6 151.9 30.5 $ 179.0 7.0 157.6 28.0 (11) (34) (4) 9 $ 101.4 4.5 $ 94.4 4.1 $ 135.1 4.9 $ 197.1 5.7 $ 199.3 5.6 7 10 (49) (20) $ 195.8 8.6 $ 381.7 10.8 (49) (20) Represents total net revenue less provision for credit losses. Pretax return on average managed outstandings. Third quarter of 2008 included approximately 13 million credit card accounts acquired by JPMorgan Chase in the Washington Mutual transaction. The Chase Paymentech Solutions joint venture was dissolved effective November 1, 2008. JPMorgan Chase retained approximately 51% of the business and operates the business under the name Chase Paymentech Solutions. For the period January 1, 2008, through October 31, 2008, the data presented represents activity for the Chase Paymentech Solutions joint venture and beyond that date, the data presented represents activity for Chase Paymentech Solutions. Page 17
  19. 19. JPMORGAN CHASE & CO. CARD SERVICES - MANAGED BASIS FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except headcount and ratio data) QUARTERLY TRENDS YEAR-TO-DATE 2Q09 Change 2Q09 1Q09 4Q08 3Q08 2Q08 1Q09 2Q08 2009 SELECTED BALANCE SHEET DATA (Period-end) Loans: Loans on balance sheets Securitized loans Managed loans $ 85,736 85,790 171,526 $ $ 92,881 93,664 186,545 $ $ 104,746 85,571 190,317 $ $ 90,911 85,220 176,131 $ $ $ 76,278 79,120 155,398 (6) % 1 (3) Equity $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 14,100 - $ 193,310 $ 201,200 $ 203,943 $ 169,413 $ 161,601 $ $ $ 79,183 78,371 157,554 $ $ 98,790 88,505 187,295 $ $ 97,783 85,619 183,402 $ $ 89,692 84,417 174,109 $ 75,630 77,195 152,825 $ 15,000 $ 15,000 $ 15,000 $ 14,100 $ 14,100 19,570 25 130 SELECTED BALANCE SHEET DATA (Average) Managed assets Loans: Loans on balance sheets Securitized loans Managed average loans Equity Headcount MANAGED CREDIT QUALITY STATISTICS Net charge-offs Net charge-off rate (a) 22,897 $ Managed delinquency rates 30+ day (a) 90+ day (a) Allowance for loan losses (b) Allowance for loan losses to period-end loans (b) (c) KEY STATS - WASHINGTON MUTUAL ONLY (d) Managed loans Managed average loans Net interest income (e) Risk adjusted margin (e) (f) Net charge-off rate (g) 30+ day delinquency rate (g) 90+ day delinquency rate (g) KEY STATS - EXCLUDING WASHINGTON MUTUAL Managed loans Managed average loans Net interest income (e) Risk adjusted margin (e) (f) Net charge-off rate 30+ day delinquency rate 90+ day delinquency rate 4,353 $ 10.03 % 5.86 % 3.25 23,759 3,493 $ 7.72 % 6.16 % 3.22 24,025 2,616 $ 5.56 % 4.97 % 2.34 $ 8,839 $ 10.31 % 8,849 $ 9.73 % 7,692 $ 7.34 % $ 23,093 $ 24,418 17.90 % (3.89) 19.17 11.98 6.85 25,908 $ 27,578 16.45 % 4.42 14.57 10.89 5.79 28,250 $ 27,703 14.87 % 4.18 12.09 9.14 4.39 148,433 $ 149,691 8.63 % 1.34 8.97 5.27 2.90 150,223 $ 155,824 8.75 % 0.46 6.86 5.34 2.78 162,067 $ 159,592 8.18 % 1.62 5.29 4.36 2.09 $ 22,283 1,979 $ 5.00 % 3.91 % 1.77 5,946 $ 6.40 % 1,894 4.98 % 12 % 8 10 $ 85,736 85,790 171,526 $ $ $ 76,278 79,120 155,398 6 $ 15,000 $ 14,100 6 (4) 20 $ 197,234 $ 160,601 23 (8) (1) (5) 19 9 14 $ $ $ 93,715 85,015 178,730 $ 77,537 75,652 153,189 21 12 17 - 6 $ 15,000 $ 14,100 6 (4) 17 19,570 17 22,897 $ 3.46 % 1.76 3,705 4.86 % 27,235 - 139 $ (11) (11) 155,398 152,825 7.92 % 4.16 4.98 3.46 1.76 7,846 $ 8.85 % 5.86 % 3.25 NM NM $ (1) (4) (4) (2) $ 7.53 % 3.51 159,310 $ 157,554 8.18 % 4.19 5.00 3.69 1.74 2009 Change 2008 2008 8,839 $ 10.31 % 3,564 4.68 % 12 % 8 10 120 3.46 % 1.76 3,705 4.86 % 139 23,093 25,990 17.14 % 0.49 16.75 11.98 6.85 148,433 $ 152,740 8.69 % 0.89 7.90 5.27 2.90 NM NM 155,398 153,189 8.13 % 5.01 4.68 3.46 1.76 (4) - (a) Results for the quarters ended June 30, 2009, March 31, 2009, December 31, 2008, and September 30, 2008, reflect the impact of purchase accounting adjustments related to the Washington Mutual transaction and the consolidation of the Washington Mutual Master Trust. (b) Based on loans on balance sheets. (c) Includes loans from the Washington Mutual Master Trust, which were consolidated onto the Card Services balance sheet at fair value during the second quarter of 2009. No allowance for loan losses was recorded for these loans as of June 30, 2009. Excluding these loans, the allowance for loan losses to period-end loans was 10.95%. (d) Statistics are only presented for periods after September 25, 2008, the date of the Washington Mutual transaction. (e) As a percentage of average managed outstandings. (f) Represents total net revenue less provision for credit losses. (g) Excludes the impact of purchase accounting adjustments related to the Washington Mutual transaction and the consolidation of the Washington Mutual Master Trust. Page 18
  20. 20. JPMORGAN CHASE & CO. CARD RECONCILIATION OF REPORTED AND MANAGED DATA (in millions) QUARTERLY TRENDS YEAR-TO-DATE 2Q09 Change 2Q09 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 $ $ $ $ 1Q09 1,215 (294) 921 $ 2,353 1,958 4,311 $ $ $ 3,204 1,664 4,868 $ 2,939 1,664 4,603 $ $ 111,722 81,588 193,310 $ 2,689 1,664 4,353 $ $ $ $ 4Q08 1,384 (540) 844 $ 2,478 2,004 4,482 $ $ $ 3,665 1,464 5,129 $ 3,189 1,464 4,653 $ $ 118,418 82,782 201,200 $ 2,029 1,464 3,493 $ $ $ $ 3Q08 1,553 (691) 862 $ 2,408 1,910 4,318 $ $ $ 3,689 1,219 4,908 $ 2,747 1,219 3,966 $ $ 118,290 85,653 203,943 $ 1,397 1,219 2,616 $ $ $ $ 2Q08 1,476 (843) 633 $ 1,525 1,716 3,241 $ $ $ 3,014 873 3,887 $ 1,356 873 2,229 $ $ 93,701 75,712 169,413 $ 1,106 873 1,979 $ $ $ $ 1Q09 2Q08 2009 1,516 (843) 673 (12) % 46 9 1,338 1,673 3,011 (5) (2) (4) 76 17 43 2,945 830 3,775 (13) 14 (5) 9 100 29 1,364 830 2,194 (8) 14 (1) 115 100 110 $ 87,021 74,580 161,601 (6) (1) (4) 28 9 20 $ 33 14 25 153 100 130 1,064 830 1,894 (20) % 65 37 $ $ $ $ $ $ $ $ $ $ 2008 2,599 (834) 1,765 $ 4,831 3,962 8,793 $ 6,869 3,128 9,997 3,053 (1,780) 1,273 $ 66 20 42 6,168 1,511 7,679 11 107 30 2,353 1,511 3,864 160 107 140 87,517 73,084 160,601 31 12 23 2,053 1,511 3,564 130 107 120 $ $ $ 115,052 82,182 197,234 $ 4,718 3,128 7,846 $ $ (15) % 53 39 2,905 3,291 6,196 $ 6,128 3,128 9,256 2009 Change 2008 $ $ (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 19
  21. 21. JPMORGAN CHASE & CO. COMMERCIAL BANKING FINANCIAL HIGHLIGHTS (in millions, except ratio data) QUARTERLY TRENDS YEAR-TO-DATE 2Q09 Change 2Q09 INCOME STATEMENT REVENUE Lending & deposit-related fees Asset management, administration and commissions All other income (a) Noninterest revenue Net interest income TOTAL NET REVENUE $ 1Q09 270 36 152 458 995 1,453 $ 4Q08 263 34 125 422 980 1,402 $ 3Q08 242 32 102 376 1,103 1,479 $ 2Q08 212 29 147 388 737 1,125 $ 1Q09 207 26 150 383 723 1,106 2Q08 3 % 6 22 9 2 4 2009 30 % 38 1 20 38 31 $ 2009 Change 2008 2008 533 70 277 880 1,975 2,855 $ 400 52 265 717 1,456 2,173 33 % 35 5 23 36 31 Provision for credit losses 312 293 190 126 47 6 NM 605 148 309 NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE 197 327 11 535 200 342 11 553 164 324 11 499 177 298 11 486 173 290 13 476 (2) (4) (3) 14 13 (15) 12 397 669 22 1,088 351 584 26 961 13 15 (15) 13 Income before income tax expense Income tax expense NET INCOME 606 238 368 556 218 338 790 310 480 513 201 312 583 228 355 9 9 9 4 4 4 1,162 456 706 1,064 417 647 9 9 9 3 5 56 NM 4 82 8 25 NM 31 79 6 18 NM 31 59 3 (2) 26 (47) 4 MEMO: Revenue by product: Lending Treasury services Investment banking Other Total Commercial Banking revenue IB revenue, gross (b) Revenue by business: Middle Market Banking Commercial Term Lending (c) Mid-Corporate Banking Real Estate Banking (c) Other (c) Total Commercial Banking revenue FINANCIAL RATIOS ROE Overhead ratio $ $ $ 684 679 114 (24) 1,453 $ $ $ $ $ 665 646 73 18 1,402 328 $ 772 224 305 120 32 1,453 $ 18 37 $ $ $ % $ 611 759 88 21 1,479 206 $ 752 228 242 120 60 1,402 $ 17 39 $ $ $ % $ 377 643 87 18 1,125 $ 376 630 91 9 1,106 241 $ 252 $ 270 796 243 243 131 66 1,479 $ 729 236 91 69 1,125 $ 708 235 94 69 1,106 24 34 $ $ $ % 18 43 $ $ % 20 43 % $ $ $ $ 1,349 1,325 187 (6) 2,855 $ 755 1,246 159 13 2,173 21 $ 534 $ 473 9 NM 30 28 (54) 31 $ 1,524 452 547 240 92 2,855 $ 1,414 442 191 126 2,173 $ 18 38 $ $ % 19 44 13 8 NM 24 26 (27) 31 % (a) Revenue from investment banking products sold to Commercial Banking ("CB") clients and commercial card revenue is included in all other income. (b) Represents the total revenue related to investment banking products sold to CB clients. (c) Includes total net revenue on net assets acquired in the Washington Mutual transaction starting in the period ending December 31, 2008. Page 20
  22. 22. JPMORGAN CHASE & CO. COMMERCIAL BANKING FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio and headcount data) QUARTERLY TRENDS YEAR-TO-DATE 2009 Change 2008 2Q09 Change 2Q09 SELECTED BALANCE SHEET DATA (Period-end) Loans: Loans retained Loans held-for-sale & loans at fair value Total loans Equity SELECTED BALANCE SHEET DATA (Average) Total assets Loans: Loans retained Loans held-for-sale & loans at fair value Total loans Liability balances (a) Equity MEMO: Loans by business: Middle Market Banking Commercial Term Lending (b) Mid-Corporate Banking Real Estate Banking (b) Other (b) Total Commercial Banking loans Net charge-off rate (f) Allowance for loan losses to period-end loans (d) (f) Allowance for loan losses to average loans (d) (f) Allowance for loan losses to nonperforming loans (c) (d) Nonperforming loans to period-end loans (d) Nonperforming loans to average loans (d) 4Q08 3Q08 2Q08 1Q09 105,556 296 105,852 8,000 $ 71,105 306 71,411 7,000 103,469 (5) 33 $ 140,771 $ 102,724 37 70,682 379 71,061 99,404 7,000 (4) (3) (4) (8) - 54 (24) 53 6 14 69,096 450 69,546 99,441 7,000 61 (35) 60 11 14 42,879 15,357 7,500 5,325 71,061 (6) (8) (7) (3) (4) (11) NM 11 65 (15) 53 41,495 15,253 7,479 5,319 69,546 (5) NM 16 71 (14) 60 4,028 (7) 5 4,028 5 130 486 510 142 334 342 1,843 170 2,013 65 60 64 110,923 272 111,195 8,000 $ 115,130 295 115,425 8,000 $ 117,316 313 117,629 8,000 $ 71,105 306 71,411 7,000 $ 137,283 $ 144,298 $ 149,815 $ 101,681 $ $ $ 38,193 36,963 17,012 12,347 4,523 109,038 $ $ 4,228 $ 40,728 36,814 18,416 13,264 4,643 113,865 $ $ 4,545 181 2,111 2,255 $ 3,034 272 3,306 0.67 2.87 2.79 145 1.99 1.94 117,351 329 117,680 114,113 8,000 134 1,531 1,651 0.48 2.65 2.59 192 1.38 1.34 $ $ 5,206 $ 2,945 240 3,185 % 71,901 397 72,298 99,410 7,000 42,613 37,039 18,169 13,529 6,330 117,680 118 1,026 1,142 0.40 2.45 2.41 275 0.89 0.87 $ $ 5,298 $ 2,826 206 3,032 % 43,155 16,491 7,513 5,139 72,298 40 844 923 2,698 191 2,889 % 0.22 % 2.30 2.32 (g) 320 0.72 0.72 (g) 2008 $ $ 113,568 297 113,865 114,975 8,000 2009 48 % (3) 48 14 105,556 296 105,852 8,000 108,750 288 109,038 105,829 8,000 2Q08 (5) % 9 (5) - $ Headcount CREDIT DATA AND QUALITY STATISTICS Net charge-offs Nonperforming loans (c) (d) Nonperforming assets Allowance for credit losses: Allowance for loan losses (e) Allowance for lending-related commitments Total allowance for credit losses 1Q09 $ 49 486 510 35 38 37 269 334 342 1,843 170 2,013 3 13 4 65 60 64 0.28 % 2.59 2.61 401 0.68 0.68 111,146 292 111,438 110,377 8,000 $ $ 39,453 36,889 17,710 12,803 4,583 111,438 $ $ 4,228 $ 315 2,111 2,255 $ 3,034 272 3,306 0.57 % 2.87 2.73 145 1.99 1.89 48 % (3) 48 14 0.38 % 2.59 2.67 401 0.68 0.70 (a) Liability balances include deposits and deposits swept to on-balance sheet liabilities such as commercial paper, federal funds purchased and securities loaned or sold under repurchase agreements. (b) Includes loans acquired in the Washington Mutual transaction starting in the period ended December 31, 2008. (c) Nonperforming loans included loans held-for-sale and loans at fair value of $21 million and $26 million at June 30, 2009 and 2008, respectively. These amounts were excluded when calculating the allowance for loan losses to nonperforming loans ratio. There were no nonperforming loans held-for-sale or held at fair value at March 31, 2009, December 31, 2008, and September 30, 2008. (d) Purchased credit-impaired wholesale loans accounted for under SOP 03-3 that were acquired in the Washington Mutual transaction are considered nonperforming loans because the timing and amount of expected cash flows are not reasonably estimable. These nonperforming loans were included when calculating the allowance coverage ratios, the allowance for loan losses-to-nonperforming loans ratio, and the nonperforming loans-to-average and period-end loans ratios. The carrying amount of these purchased credit-impaired loans at June 30, 2009, March 31, 2009, December 31, 2008, and September 30, 2008, was $209 million, $210 million, $224 million and $272 million, respectively. (e) The allowance for loan losses at September 30, 2008, and June 30, 2008, included amounts related to loans acquired in the Washington Mutual transaction and the merger with Bear Stearns, respectively. (f) Loans held-for-sale and loans accounted for at fair value were excluded when calculating the allowance coverage ratios and the net charge-off rate. (g) Average loans in the calculation of this ratio were adjusted to include $44.5 billion of loans acquired from Washington Mutual as if the transaction occurred on July 1, 2008. Excluding this adjustment, the unadjusted allowance for loan losses-to-average loans and nonperforming loans-to-average loans ratios would have been 3.75% and 1.17%, respectively. Page 21
  23. 23. JPMORGAN CHASE & CO. TREASURY & SECURITIES SERVICES FINANCIAL HIGHLIGHTS (in millions, except headcount and ratio data) QUARTERLY TRENDS YEAR-TO-DATE 2Q09 Change 2Q09 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) 1Q09 314 710 221 1,245 655 1,900 $ (5) (30) 4Q08 325 626 197 1,148 673 1,821 $ (6) (30) 3Q08 304 748 268 1,320 929 2,249 $ 45 (30) 2Q08 290 719 221 1,230 723 1,953 $ 18 (31) 1Q09 283 846 228 1,357 662 2,019 7 (30) NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE 618 650 20 1,288 629 671 19 1,319 628 692 19 1,339 664 661 14 1,339 669 632 16 1,317 Income before income tax expense Income tax expense NET INCOME 587 208 379 478 170 308 835 302 533 565 159 406 665 240 425 REVENUE BY BUSINESS Treasury Services (b) Worldwide Securities Services (b) TOTAL NET REVENUE $ $ $ FINANCIAL RATIOS ROE Overhead ratio Pretax margin ratio (c) SELECTED BALANCE SHEET DATA (Period-end) Loans (d) Equity SELECTED BALANCE SHEET DATA (Average) Total assets Loans (d) Liability balances (e) Equity Headcount 934 966 1,900 $ $ $ 30 % 68 31 931 890 1,821 $ $ $ 25 % 72 26 1,068 1,181 2,249 $ $ $ 47 % 60 37 946 1,007 1,953 $ $ $ 46 % 69 29 905 1,114 2,019 2Q08 2009 2009 Change 2008 2008 (3) % 13 12 8 (3) 4 11 % (16) (3) (8) (1) (6) 17 - NM - (2) (3) 5 (2) (8) 3 25 (2) 1,247 1,321 39 2,607 1,310 1,203 32 2,545 (5) 10 22 2 23 22 23 (12) (13) (11) 1,065 378 687 1,308 480 828 (19) (21) (17) 1,765 2,167 3,932 6 (14) (5) 9 4 3 (13) (6) $ 639 1,336 418 2,393 1,328 3,721 $ (11) (60) $ $ $ 49 % 65 33 1,865 1,856 3,721 552 1,666 428 2,646 1,286 3,932 16 % (20) (2) (10) 3 (5) 19 (60) $ $ $ 28 % 70 29 NM - 48 % 65 33 $ 17,929 5,000 $ 18,529 5,000 $ 24,508 4,500 $ 40,675 4,500 $ 26,348 3,500 (3) - (32) 43 $ 17,929 5,000 $ 26,348 3,500 (32) 43 $ 35,520 17,524 234,163 5,000 $ 38,682 20,140 276,486 5,000 $ 55,515 31,283 336,277 4,500 $ 49,386 26,650 259,992 3,500 $ 56,192 23,822 268,293 3,500 (8) (13) (15) - (37) (26) (13) 43 $ 37,092 18,825 255,208 5,000 $ 56,698 23,454 261,331 3,500 (35) (20) (2) 43 27,232 1 27,232 - 27,252 26,998 27,070 27,592 - 27,252 (a) The Investment Bank credit portfolio group manages certain exposures on behalf of clients shared with TSS. TSS reimburses IB for a portion of the total cost of managing the credit portfolio. IB recognizes this credit reimbursement as a component of noninterest revenue. (b) Reflects an internal reorganization for escrow products, from Worldwide Securities Services to Treasury Services revenue of $46 million, $45 million, $75 million, $49 million, and $52 million, for the quarters ended June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, and June 30, 2008, respectively, and $91 million and $99 million for year-to-date 2009 and 2008, respectively. (c) Pretax margin represents income before income tax expense divided by total net revenue, which is a measure of pretax performance and another basis by which management evaluates its performance and that of its competitors. (d) Loan balances include wholesale overdrafts, commercial card and trade finance loans. (e) Liability balances include deposits and deposits swept to on-balance sheet liabilities such as commercial paper, federal funds purchased and securities loaned or sold under repurchase agreements. Page 22
  24. 24. JPMORGAN CHASE & CO. TREASURY & SECURITIES SERVICES FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio data and where otherwise noted) TSS firmwide metrics include revenue recorded in the CB, Retail Banking and Asset Management ("AM") lines of business and excludes FX revenue recorded in the IB for TSS-related FX activity. In order to capture the firmwide impact of Treasury Services ("TS") and TSS products and revenue, management reviews firmwide metrics such as liability balances, revenue and overhead ratios in assessing financial performance for TSS. Firmwide metrics are necessary in order to understand the aggregate TSS business. QUARTERLY TRENDS YEAR-TO-DATE 2Q09 Change 2Q09 TSS FIRMWIDE DISCLOSURES Treasury Services revenue - reported (a) Treasury Services revenue reported in Commercial Banking Treasury Services revenue reported in other lines of business Treasury Services firmwide revenue (a) (b) Worldwide Securities Services revenue (a) Treasury & Securities Services firmwide revenue (b) Treasury Services firmwide liability balances (average) (c) (d) Treasury & Securities Services firmwide liability balances (average) (c) $ $ $ TSS FIRMWIDE FINANCIAL RATIOS Treasury Services firmwide overhead ratio (e) Treasury & Securities Services firmwide overhead ratio (e) FIRMWIDE BUSINESS METRICS Assets under custody (in billions) Net charge-off (recovery) rate Allowance for loan losses to period-end loans Allowance for loan losses to average loans Allowance for loan losses to nonperforming loans Nonperforming loans to period-end loans Nonperforming loans to average loans 934 679 63 1,676 966 2,642 $ 258,312 339,992 $ 51 59 $ Number of: US$ ACH transactions originated (in millions) Total US$ clearing volume (in thousands) International electronic funds transfer volume (in thousands) (f) Wholesale check volume (in millions) Wholesale cards issued (in thousands) (g) CREDIT DATA AND QUALITY STATISTICS Net charge-offs (recoveries) Nonperforming loans Allowance for loan losses Allowance for lending-related commitments 1Q09 $ % 13,748 $ $ 289,645 391,461 $ $ % 13,532 $ % $ 1,068 759 82 1,909 1,181 3,090 $ 312,559 450,390 $ $ % 13,205 $ % $ 946 643 76 1,665 1,007 2,672 $ 248,075 359,401 $ $ % 14,417 $ % $ 905 630 72 1,607 1,114 2,721 2Q08 - % 5 2 2 9 4 252,625 367,670 (11) (13) 2009 3 % 8 (13) 4 (13) (3) 2 (8) $ % $ $ $ % 15,476 2 (11) 4 6 1 7 (2) (3) 14 (7) 19 NM (53) (71) 19 NM NM (63) 179 (2) 40 33 (0.03) % 0.15 0.17 NM - $ 1,865 1,325 125 3,315 1,856 5,171 $ 273,892 365,584 $ $ % 13,748 $ 6 % 6 (11) 5 (14) (3) 247,897 360,758 10 1 % $ % 15,476 (11) 1,997 57,119 81,471 1,241 19,917 19 14 15 92 0.20 0.08 0.08 107 0.08 0.07 1,765 1,246 141 3,152 2,167 5,319 53 58 1,956 55,379 91,461 1,140 23,744 $ 2009 Change 2008 2008 52 61 993 29,063 41,432 618 19,917 47 45 0.12 0.18 NM - 1Q09 53 58 997 29,277 41,831 595 21,858 30 74 63 0.30 0.24 247 0.12 0.10 2Q08 52 60 1,006 29,346 47,734 572 22,784 2 30 51 77 0.04 0.28 0.25 170 0.16 0.15 3Q08 44 52 978 27,186 44,365 568 22,233 17 14 15 92 0.39 0.08 0.09 107 0.08 0.08 931 646 62 1,639 890 2,529 53 63 978 28,193 47,096 572 23,744 $ 4Q08 (2) (3) 12 (8) 19 (2) 40 33 NM NM (63) 179 (0.02) % 0.15 0.17 NM - (a) Reflects an internal reorganization for escrow products, from Worldwide Securities Services to Treasury Services revenue, of $46 million, $45 million, $75 million, $49 million, and $52 million, for the quarters ended June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, and June 30, 2008, respectively, and $91 million and $99 million for year-to-date 2009 and 2008, respectively. (b) TSS firmwide FX revenue includes FX revenue recorded in TSS and FX revenue associated with TSS customers who are FX customers of IB. FX revenue associated with TSS customers who are FX customers of IB was $191 million, $154 million, $271 million, $196 million, and $222 million, for the quarters ended June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, and June 30, 2008, respectively, and $345 million and $413 million for year-to-date 2009 and 2008, respectively. These amounts are not included in TS and TSS firmwide revenue. (c) Firmwide liability balances include liability balances recorded in Commercial Banking. (d) Reflects an internal reorganization for escrow products, from Worldwide Securities Services to Treasury Services liability balances, of $14.9 billion, $18.2 billion, $22.3 billion, $20.3 billion, and $21.9 billion for the quarters ended June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, and June 30, 2008, respectively, and $16.5 billion and $21.7 billion for year-to-date 2009 and 2008, respectively. (e) Overhead ratios have been calculated based upon firmwide revenue and TSS and TS expense, respectively, including those allocated to certain other lines of business. FX revenue and expense recorded in IB for TSS-related FX activity are not included in this ratio. (f) International electronic funds transfer includes non-US dollar ACH and clearing volume. (g) Wholesale cards issued include domestic commercial card, stored value card, prepaid card and government electronic benefit card products. Page 23
  25. 25. JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS (in millions, except ratio, ranking and headcount data) QUARTERLY TRENDS YEAR-TO-DATE 2Q09 Change 2Q09 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 (a) Institutional Retail Private Wealth Management (a) Bear Stearns Private Client Services Total net revenue 1,315 253 1,568 414 1,982 $ 4Q08 1,231 69 1,300 403 1,703 $ 3Q08 1,362 (170) 1,192 466 1,658 $ 2Q08 1,538 43 1,581 380 1,961 $ 1Q09 1,573 130 1,703 361 2,064 59 $ $ $ FINANCIAL RATIOS ROE Overhead ratio Pretax margin ratio (b) 33 32 20 17 810 525 19 1,354 NONINTEREST EXPENSE Compensation expense Noncompensation expense Amortization of intangibles TOTAL NONINTEREST EXPENSE Income before income tax expense Income tax expense NET INCOME 1Q09 800 479 19 1,298 689 504 20 1,213 816 525 21 1,362 886 494 20 1,400 569 217 352 640 487 411 334 110 1,982 $ $ $ 20 % 68 29 BUSINESS METRICS Number of: Client advisors (c) Retirement planning services participants Bear Stearns brokers 372 148 224 583 460 253 312 95 1,703 $ $ $ 13 % 76 22 1,785 1,595,000 362 413 158 255 630 327 265 330 106 1,658 $ $ $ 14 % 73 25 1,833 1,628,000 359 579 228 351 631 486 399 352 93 1,961 $ $ $ 25 % 69 30 1,795 1,531,000 324 2Q08 7 % 267 21 3 16 79 2009 (16) % 95 (8) 15 (4) $ 247 1 10 4 53 47 57 (12) (14) (11) 708 472 490 356 38 2,064 10 6 62 7 16 16 (10) 3 (16) (6) 189 (4) 1,801 1,505,000 326 $ (18) % 70 (13) 22 (7) $ $ $ 33 1,711 971 41 2,723 (6) 3 (7) (3) 1,209 458 751 (22) (20) (23) 1,304 962 956 705 38 3,965 (6) (2) (31) (8) 439 (7) 941 365 576 1,223 947 664 646 205 3,685 $ $ $ 17 % 72 26 (3) (2) 1 3,104 189 3,293 672 3,965 1,610 1,004 38 2,652 31 % 68 31 1,769 1,492,000 323 2,546 322 2,868 817 3,685 92 (9) 6 (5) (3) 647 252 395 2009 Change 2008 2008 (1) 6 11 179 30 % 69 30 1,785 1,595,000 362 1,801 1,505,000 326 (1) 6 11 % of customer assets in 4 & 5 Star Funds (d) 45 % 42 % 42 % 39 % 40 % 7 13 45 % 40 % 13 % of AUM in 1st and 2nd quartiles: (e) 1 year 3 years 5 years 62 % 69 % 80 % 54 % 62 % 66 % 54 % 65 % 76 % 49 % 67 % 77 % 51 % 70 % 76 % 15 11 21 22 (1) 5 62 % 69 % 80 % 51 % 70 % 76 % 22 (1) 5 SELECTED BALANCE SHEET DATA (Period-end) Loans Equity SELECTED BALANCE SHEET DATA (Average) Total assets Loans Deposits Equity $ 35,474 7,000 $ 33,944 7,000 $ 36,188 7,000 $ 39,720 7,000 $ 41,536 5,200 5 - (15) 35 $ 35,474 7,000 $ 41,536 5,200 (15) 35 $ 59,334 34,292 75,355 7,000 $ 58,227 34,585 81,749 7,000 $ 65,648 36,851 76,911 7,000 $ 71,189 39,750 65,621 5,500 $ 65,015 39,264 69,975 5,066 2 (1) (8) - (9) (13) 8 38 $ 58,783 34,438 78,534 7,000 $ 62,651 37,946 69,079 5,033 (6) (9) 14 39 15,840 (2) (6) 15,840 (6) 2 68 147 5 142 4 5 - NM 360 54 (20) 68 147 5 NM 360 54 (20) 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 period-end loans Allowance for loan losses to average loans Allowance for loan losses to nonperforming loans Nonperforming loans to period-end loans Nonperforming loans to average loans (a) (b) (c) (d) (e) 14,840 $ 46 313 226 4 0.54 % 0.64 0.66 72 0.88 0.91 15,109 $ 19 301 215 4 0.22 % 0.63 0.62 71 0.89 0.87 15,339 $ 12 147 191 5 0.13 % 0.53 0.52 130 0.41 0.40 15,493 $ (1) 121 170 5 (0.01) % 0.43 0.43 140 0.30 0.30 $ 0.02 % 0.35 0.37 216 0.16 0.17 14,840 $ 65 313 226 4 0.38 % 0.64 0.66 72 0.88 0.91 $ % 0.35 0.39 216 0.16 0.18 In the third quarter of 2008, certain clients were transferred from Private Bank to Private Wealth Management. Prior periods have been revised to conform with this change. Pretax margin represents income before income tax expense divided by total net revenue, which is a measure of pretax performance and another basis by which management evaluates its performance and that of its competitors. Prior periods revised to conform with current methodology. Derived from the following rating services: Morningstar for the United States; Micropal for the United Kingdom, Luxembourg, Hong Kong and Taiwan; and Nomura for Japan. Derived from the following rating services: Lipper for the United States and Taiwan; Micropal for the United Kingdom, Luxembourg and Hong Kong; and Nomura for Japan. Page 24
  26. 26. JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS, CONTINUED (in billions) Jun 30 2009 Assets by asset class Liquidity Fixed income Equities & balanced Alternatives TOTAL ASSETS UNDER MANAGEMENT Custody / brokerage / administration / deposits TOTAL ASSETS UNDER SUPERVISION Assets by client segment Institutional Private Bank (a) Retail Private Wealth Management (a) Bear Stearns Private Client Services TOTAL ASSETS UNDER MANAGEMENT Institutional Private Bank (a) Retail Private Wealth Management (a) Bear Stearns Private Client Services TOTAL ASSETS UNDER SUPERVISION Assets by geographic region U.S. / Canada International TOTAL ASSETS UNDER MANAGEMENT U.S. / Canada International TOTAL ASSETS UNDER SUPERVISION Mutual fund assets by asset class Liquidity Fixed income Equities Alternatives TOTAL MUTUAL FUND ASSETS $ $ $ $ $ $ $ $ $ $ $ $ 617 194 264 96 1,171 372 1,543 Mar 31 2009 $ $ 697 179 216 67 12 1,171 $ 697 390 289 123 44 1,543 $ 814 357 1,171 $ 1,103 440 1,543 $ 569 48 111 9 737 $ $ $ $ $ $ 625 180 215 95 1,115 349 1,464 Dec 31 2008 $ $ 668 181 184 68 14 1,115 $ 669 375 250 120 50 1,464 $ 789 326 1,115 $ 1,066 398 1,464 $ 570 42 85 8 705 $ $ $ $ $ $ 613 180 240 100 1,133 363 1,496 681 181 194 71 6 1,133 Sep 30 2008 $ $ $ $ 682 378 262 124 50 1,496 $ 798 335 1,133 $ 1,084 412 1,496 $ 553 41 92 7 693 $ $ $ $ $ 524 189 308 132 1,153 409 1,562 653 194 223 75 8 1,153 Jun 30 2008 $ $ $ $ 653 417 303 134 55 1,562 $ 785 368 1,153 $ 1,100 462 1,562 $ 470 44 127 7 648 $ $ $ $ $ 478 199 378 130 1,185 426 1,611 Jun 30, 2009 Change Mar 31 Jun 30 2009 2008 (1) % 8 23 1 5 7 5 29 % (2) (30) (26) (1) (13) (4) 645 181 276 75 8 1,185 4 (1) 17 (1) (14) 5 8 (1) (22) (11) 50 (1) 646 415 357 133 60 1,611 4 4 16 2 (12) 5 8 (6) (19) (8) (27) (4) 771 414 1,185 3 10 5 6 (14) (1) 1,093 518 1,611 3 11 5 1 (15) (4) 14 31 13 5 37 2 (35) 13 15 416 47 171 8 642 (a) In the third quarter of 2008, certain clients were transferred from Private Bank to Private Wealth Management. Prior periods have been revised to conform with this change. Page 25
  27. 27. JPMORGAN CHASE & CO. ASSET MANAGEMENT FINANCIAL HIGHLIGHTS, CONTINUED (in billions) QUARTERLY TRENDS 2Q09 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 $ 1,115 $ (7) 8 2 53 1,171 $ $ 1,464 (9) 88 1,543 1Q09 $ 1,133 $ 19 1 (5) (33) 1,115 $ $ 1,496 25 (57) 1,464 YEAR-TO-DATE 4Q08 $ 1,153 $ 86 (7) (18) (81) 1,133 $ $ 1,562 73 (139) 1,496 3Q08 $ 1,185 $ 55 (4) (5) (78) 1,153 $ $ 1,611 61 (110) 1,562 2Q08 $ 1,187 $ 1 (1) (3) 1 1,185 $ $ 1,569 (5) 47 1,611 2009 $ 1,133 $ 12 9 (3) 20 1,171 $ $ 1,496 16 31 1,543 2008 $ 1,193 $ 69 (1) (24) (52) 1,185 $ $ 1,572 47 (8) 1,611 (a) Second quarter 2008 reflects $15 billion for assets under management and $68 billion for assets under supervision from the Bear Stearns merger on May 30, 2008. Page 26

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