JPMORGAN CHASE & CO - FORM 8-K - EX-99.1

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8-K - FORM 8-K - JPMORGAN CHASE & CO	y83793e8vk.htm

Exhibit 99.1

FINANCIAL SUPPLEMENT

Retail Financial Services

2009 and 2008

JPMORGAN CHASE & CO.
TABLE OF CONTENTS


			Page(s)
Summary of Revisions			3

Business Detail
Retal Financial Services			4 - 5
Retail Banking			6
Mortgage Banking & Other Consumer Lending			7 - 8
Real Estate Portfolios			9 - 10

Page 2

JPMORGAN CHASE & CO.
Revised Financial Disclosure

JPMorgan Chase & Co. (the “Firm”) has revised certain of its financial disclosures of the Retail Financial Services (“RFS”) business segment. Previously, RFS was reported as: Retail Banking and Consumer Lending. Commencing January 1, 2010, RFS is presenting Consumer Lending for reporting purposes as: (1) Mortgage Banking & Other Consumer Lending, and (2) Real Estate Portfolios. Mortgage Banking & Other Consumer Lending comprises mortgage production and servicing, auto finance, and student and other lending activities. Real Estate Portfolios comprises residential mortgages and home equity loans, including the purchased credit-impaired portfolio acquired in the Washington Mutual transaction. Retail Banking, which includes branch banking and business banking activities, is not affected by these revisions. This presentation will be reflected in the Firm’s financial reports and disclosures commencing with its report of financial results for the first quarter of 2010.

The chart below provides a mapping of RFS’s prior reporting to the current presentation.

Page 3

JPMORGAN CHASE & CO.
RETAIL FINANCIAL SERVICES
FINANCIAL HIGHLIGHTS
(in millions, except ratio and headcount data)


	QUARTERLY TRENDS																								FULL YEAR
	4Q09			3Q09			2Q09			1Q09			4Q08			3Q08			2Q08			1Q08			2009			2008
INCOME STATEMENT
REVENUE
Lending- and deposit-related fees	$	972		$	1,046		$	1,003		$	948		$	1,050		$	538		$	497		$	461		$	3,969		$	2,546
Asset management, administration and commissions		406			408			425			435			412			346			375			377			1,674			1,510
Mortgage fees and related income		481			873			807			1,633			1,962			438			696			525			3,794			3,621
Credit card income		441			416			411			367			367			204			194			174			1,635			939
Other income		299			321			294			214			183			206			198			152			1,128			739

Noninterest revenue		2,599			3,064			2,940			3,597			3,974			1,732			1,960			1,689			12,200			9,355
Net interest income		5,070			5,154			5,030			5,238			4,710			3,231			3,150			3,074			20,492			14,165

TOTAL NET REVENUE		7,669			8,218			7,970			8,835			8,684			4,963			5,110			4,763			32,692			23,520

Provision for credit losses		4,229			3,988			3,846			3,877			3,576			2,056			1,585			2,688			15,940			9,905

NONINTEREST EXPENSE
Compensation expense		1,722			1,728			1,631			1,631			1,604			1,120			1,184			1,160			6,712			5,068
Noncompensation expense		2,499			2,385			2,365			2,457			2,345			1,559			1,396			1,312			9,706			6,612
Amortization of intangibles		81			83			83			83			97			100			100			100			330			397

TOTAL NONINTEREST EXPENSE		4,302			4,196			4,079			4,171			4,046			2,779			2,680			2,572			16,748			12,077


Income/(loss) before income tax expense (benefit)		(862	)		34			45			787			1,062			128			845			(497	)		4			1,538
Income tax expense (benefit)		(463	)		27			30			313			438			64			342			(186	)		(93	)		658

NET INCOME/(LOSS)	$	(399	)	$	7		$	15		$	474		$	624		$	64		$	503		$	(311	)	$	97		$	880


FINANCIAL RATIOS
ROE		(6	)%		—	%		—	%		8	%		10	%		1	%		12	%		(7	)%		—	%		5	%
Overhead ratio		56			51			51			47			47			56			52			54			51			51
Overhead ratio excluding core deposit intangibles (a)		55			50			50			46			45			54			51			52			50			50

SELECTED BALANCE SHEET DATA (Period-end)
Assets	$	387,269		$	397,673		$	399,916		$	412,505		$	419,831		$	426,435		$	265,845		$	262,118		$	387,269		$	419,831
Loans:
Loans retained		340,332			346,765			353,934			364,220			368,786			371,153			223,047			218,489			340,332			368,786
Loans held-for-sale & loans at fair value (b)		14,612			14,303			13,192			12,529			9,996			10,223			16,282			18,000			14,612			9,996

Total loans		354,944			361,068			367,126			376,749			378,782			381,376			239,329			236,489			354,944			378,782
Deposits		357,463			361,046			371,241			380,140			360,451			353,660			223,121			230,854			357,463			360,451
Equity		25,000			25,000			25,000			25,000			25,000			25,000			17,000			17,000			25,000			25,000

SELECTED BALANCE SHEET DATA (Average)
Assets	$	395,045		$	401,620		$	410,228		$	423,472		$	423,699		$	265,367		$	267,808		$	260,013		$	407,497		$	304,442
Loans:
Loans retained		343,411			349,762			359,372			366,925			369,172			222,640			221,132			214,586			354,789			257,083
Loans held-for-sale & loans at fair value (b)		17,670			19,025			19,043			16,526			13,848			16,037			20,492			17,841			18,072			17,056

Total loans		361,081			368,787			378,415			383,451			383,020			238,677			241,624			232,427			372,861			274,139
Deposits		356,464			366,944			377,259			370,278			358,523			222,180			226,487			225,555			367,696			258,362
Equity		25,000			25,000			25,000			25,000			25,000			17,000			17,000			17,000			25,000			19,011

Headcount		108,971			106,951			103,733			100,677			102,007			101,826			69,550			70,095			108,971			102,007


(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 would result in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this method would therefore result in an improving overhead ratio over time, all things remaining equal. The non-GAAP ratio excludes Retail Banking’s CDI amortization expense related to the 2006 Bank of New York transaction and the 2004 Bank One merger of $80 million, $83 million, $82 million, $83 million, $97 million, $99 million, $99 million and $99 million for the quarters ended December 31, 2009, September 30, 2009, June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008 and March 31, 2008, respectively, and $328 million and $394 million for full year 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 $12.5 billion, $12.8 billion, $11.3 billion, $8.9 billion, $8.0 billion, $8.6 billion, $14.1 billion and $13.5 billion at December 31, 2009, September 30, 2009, June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008 and March 31, 2008, respectively. Average balances of these loans totaled $16.0 billion, $17.7 billion, $16.2 billion, $13.4 billion, $12.0 billion, $14.5 billion, $16.9 billion and $13.4 billion for the quarters ended December 31, 2009, September 30, 2009, June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008 and March 31, 2008, respectively, and $15.8 billion and $14.2 billion for full year 2009 and 2008, respectively.

Page 4

JPMORGAN CHASE & CO.
RETAIL FINANCIAL SERVICES
FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except ratio data)


	QUARTERLY TRENDS																								FULL YEAR
	4Q09			3Q09			2Q09			1Q09			4Q08			3Q08			2Q08			1Q08			2009			2008
CREDIT DATA AND QUALITY STATISTICS
Net charge-offs	$	2,738		$	2,550		$	2,649		$	2,176		$	1,701		$	1,326		$	1,025		$	825		$	10,113		$	4,877
Nonperforming loans:
Nonperforming loans retained		10,611			10,091			8,792			7,714			6,548			5,517			4,394			3,613			10,611			6,548
Nonperforming loans held-for-sale and loans at fair value		234			242			203			264			236			207			180			129			234			236

Total nonperforming loans (a) (b) (c)		10,845			10,333			8,995			7,978			6,784			5,724			4,574			3,742			10,845			6,784
Nonperforming assets (a) (b) (c)		12,098			11,883			10,554			9,846			9,077			8,085			5,333			4,359			12,098			9,077
Allowance for loan losses		14,776			13,286			11,832			10,619			8,918			7,517			5,062			4,496			14,776			8,918

Net charge-off rate (e)		3.16	%		2.89	%		2.96	%		2.41	%		1.83	%		2.37	%		1.86	%		1.55	%		2.85	%		1.90	%
Net charge-off rate excluding purchased credit-impaired loans (d) (e)		4.16			3.81			3.89			3.16			2.41			2.37			1.86			1.55			3.75			2.08
Allowance for loan losses to ending loans retained (e)		4.34			3.83			3.34			2.92			2.42			2.03			2.27			2.06			4.34			2.42
Allowance for loan losses to ending loans retained excluding purchased credit-impaired loans (d) (e)		5.09			4.63			4.41			3.84			3.19			2.56			2.27			2.06			5.09			3.19
Allowance for loan losses to nonperforming loans retained (a) (d) (e)		124			121			135			138			136			136			115			124			124			136
Nonperforming loans to total loans		3.06			2.86			2.45			2.12			1.79			1.50			1.91			1.58			3.06			1.79
Nonperforming loans to total loans excluding purchased credit-impaired loans		3.96			3.72			3.19			2.76			2.34			1.88			1.91			1.58			3.96			2.34


(a)		Excludes purchased credit-impaired loans that were acquired as part of the Washington Mutual transaction. These loans are accounted for on a pool basis, and the pools are considered to be performing.

(b)		Certain of these loans are classified as trading assets on the Consolidated Balance Sheets.

(c)		Nonperforming loans and assets exclude: (1) mortgage loans insured by U.S. government agencies of $9.0 billion, $7.0 billion, $4.2 billion, $4.2 billion, $3.0 billion, $1.4 billion, $1.4 billion and $1.3 billion at December 31, 2009, September 30, 2009, June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008 and March 31, 2008, respectively; (2) real estate owned insured by U.S. government agencies of $579 million, $579 million, $508 million, $433 million, $364 million, $370 million, $490 million and $478 million at December 31, 2009, September 30, 2009, June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008 and March 31, 2008, respectively; and (3) student loans that are 90 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program, of $542 million, $511 million, $473 million, $433 million, $437 million, $405 million, $394 million and $418 million at December 31, 2009, September 30, 2009, June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008 and March 31, 2008, respectively. These amounts are excluded as reimbursement is proceeding normally.

(d)		Excludes the impact of purchased credit-impaired loans that were acquired as part of the Washington Mutual transaction. These loans were accounted for at fair value on the acquisition date, which incorporated management’s estimate, as of that date, of credit losses over the remaining life of the portfolio. An allowance for loan losses of $1.6 billion and $1.1 billion was recorded for these loans at December 31, 2009 and September 30, 2009, respectively, which has also been excluded from applicable ratios. No allowance for loan losses was recorded as of June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008 and March 31, 2008. To date, no charge-offs have been recorded for these loans.

(e)		Loans held-for-sale and loans accounted for at fair value were excluded when calculating the allowance coverage ratio and net charge-off rate.

Page 5

JPMORGAN CHASE & CO.
RETAIL FINANCIAL SERVICES
FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except ratio data and where otherwise noted)


	QUARTERLY TRENDS																								FULL YEAR
	4Q09			3Q09			2Q09			1Q09			4Q08			3Q08			2Q08			1Q08			2009			2008
RETAIL BANKING
Noninterest revenue	$	1,804		$	1,844		$	1,803		$	1,718		$	1,834		$	1,089		$	1,062		$	966		$	7,169		$	4,951
Net interest income		2,716			2,732			2,719			2,614			2,687			1,756			1,671			1,545			10,781			7,659

Total net revenue		4,520			4,576			4,522			4,332			4,521			2,845			2,733			2,511			17,950			12,610
Provision for credit losses		248			208			361			325			268			70			62			49			1,142			449
Noninterest expense		2,574			2,646			2,557			2,580			2,533			1,580			1,557			1,562			10,357			7,232

Income before income tax expense		1,698			1,722			1,604			1,427			1,720			1,195			1,114			900			6,451			4,929

Net income	$	1,027		$	1,043		$	970		$	863		$	1,040		$	723		$	674		$	545		$	3,903		$	2,982


Overhead ratio		57	%		58	%		57	%		60	%		56	%		56	%		57	%		62	%		58	%		57	%
Overhead ratio excluding core deposit intangibles (a)		55			56			55			58			54			52			53			58			56			54

BUSINESS METRICS (in billions)
Business banking origination volume	$	0.7		$	0.5		$	0.6		$	0.5		$	0.8		$	1.2		$	1.7		$	1.8		$	2.3		$	5.5
End-of-period loans owned		17.0			17.4			17.8			18.2			18.4			18.6			16.5			15.9			17.0			18.4
End-of-period deposits:
Checking	$	121.9		$	115.5		$	114.1		$	113.9		$	109.2		$	106.7		$	69.1		$	69.0		$	121.9		$	109.2
Savings		153.4			151.6			150.4			152.4			144.0			146.4			105.8			105.4			153.4			144.0
Time and other		58.0			66.6			78.9			86.5			89.1			85.8			37.0			44.6			58.0			89.1

Total end-of-period deposits		333.3			333.7			343.4			352.8			342.3			338.9			211.9			219.0			333.3			342.3
Average loans owned	$	17.2		$	17.7		$	18.0		$	18.4		$	18.2		$	16.6		$	16.2		$	15.8		$	17.8		$	16.7
Average deposits:
Checking	$	116.4		$	114.0		$	114.2		$	109.4		$	105.8		$	68.0		$	68.4		$	66.1		$	113.5		$	77.1
Savings		153.1			151.2			151.2			148.2			145.3			105.4			105.9			100.3			150.9			114.3
Time and other		60.3			74.4			82.7			88.2			88.7			36.7			39.6			47.7			76.4			53.2

Total average deposits		329.8			339.6			348.1			345.8			339.8			210.1			213.9			214.1			340.8			244.6
Deposit margin		3.06	%		2.99	%		2.92	%		2.85	%		2.94	%		3.06	%		2.88	%		2.64	%		2.96	%		2.89	%
Average assets	$	28.2		$	28.1		$	29.1		$	30.2		$	28.7		$	25.6		$	25.7		$	25.4		$	28.9		$	26.3

CREDIT DATA AND QUALITY STATISTICS
Net charge-offs	$	248		$	208		$	211		$	175		$	168		$	68		$	61		$	49		$	842		$	346
Net charge-off rate		5.72	%		4.66	%		4.70	%		3.86	%		3.67	%		1.63	%		1.51	%		1.25	%		4.73	%		2.07	%
Nonperforming assets	$	839		$	816		$	686		$	579		$	424		$	380		$	337		$	328		$	839		$	424

RETAIL BRANCH BUSINESS METRICS
Investment sales volume	$	5,851		$	6,243		$	5,292		$	4,398		$	3,956		$	4,389		$	5,211		$	4,084		$	21,784		$	17,640

Number of:
Branches		5,154			5,126			5,203			5,186			5,474			5,423			3,157			3,146			5,154			5,474
ATMs		15,406			15,038			14,144			14,159			14,568			14,389			9,310			9,237			15,406			14,568
Personal bankers		17,991			16,941			15,959			15,544			15,825			15,491			9,995			9,826			17,991			15,825
Sales specialists		5,912			5,530			5,485			5,454			5,661			5,899			4,116			4,133			5,912			5,661
Active online customers (in thousands)		15,424			13,852			13,930			12,882			11,710			11,682			7,180			6,454			15,424			11,710
Checking accounts (in thousands)		25,712			25,546			25,252			24,984			24,499			24,490			11,336			11,068			25,712			24,499


(a)		Retail Banking uses the overhead ratio (excluding the amortization of CDI), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in the overhead ratio calculation would result in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this method would therefore result in an improving overhead ratio over time, all things remaining equal. The non-GAAP ratio excludes Retail Banking’s CDI amortization expense related to the 2006 Bank of New York transaction and the 2004 Bank One merger of $80 million, $83 million, $82 million, $83 million, $97 million, $99 million, $99 million and $99 million for the quarters ended December 31, 2009, September 30, 2009, June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008 and March 31, 2008, respectively, and $328 million and $394 million for full year 2009 and 2008, respectively.

Page 6

JPMORGAN CHASE & CO.
RETAIL FINANCIAL SERVICES
FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except ratio data and where otherwise noted)


	QUARTERLY TRENDS																								FULL YEAR
	4Q09			3Q09			2Q09			1Q09			4Q08			3Q08			2Q08			1Q08			2009			2008
MORTGAGE BANKING & OTHER CONSUMER LENDING
Noninterest revenue	$	801		$	1,201		$	1,134		$	1,921		$	2,221		$	688		$	927		$	853		$	5,057		$	4,689
Net interest income		802			834			721			808			543			613			562			561			3,165			2,279

Total net revenue		1,603			2,035			1,855			2,729			2,764			1,301			1,489			1,414			8,222			6,968
Provision for credit losses		242			222			366			405			388			175			132			200			1,235			895
Noninterest expense		1,163			1,139			1,105			1,137			1,177			1,023			922			834			4,544			3,956

Income before income tax expense		198			674			384			1,187			1,199			103			435			380			2,443			2,117

Net income	$	266		$	412		$	235		$	730		$	727		$	61		$	266		$	232		$	1,643		$	1,286


Overhead ratio		73	%		56	%		60	%		42	%		43	%		79	%		62	%		59	%		55	%		57	%

BUSINESS METRICS (in billions)
End-of-period loans owned:
Auto loans	$	46.0		$	44.3		$	42.9		$	43.1		$	42.6		$	43.3		$	44.9		$	44.7		$	46.0		$	42.6
Mortgage (a)		11.9			10.1			8.9			8.8			6.5			4.8			4.5			3.9			11.9			6.5
Student loans and other		15.8			15.6			15.7			17.4			16.3			15.4			13.0			12.4			15.8			16.3

Total end-of-period loans owned		73.7			70.0			67.5			69.3			65.4			63.5			62.4			61.0			73.7			65.4
Average loans owned:
Auto loans	$	45.3		$	43.3		$	43.1		$	42.5		$	42.9		$	43.9		$	44.9		$	43.2		$	43.6		$	43.8
Mortgage (a)		10.6			8.9			8.4			7.4			5.3			4.4			4.0			3.6			8.8			4.3
Student loans and other		15.6			15.3			16.8			17.6			16.2			14.1			12.8			12.3			16.3			13.8

Total average loans owned (b)		71.5			67.5			68.3			67.5			64.4			62.4			61.7			59.1			68.7			61.9

CREDIT DATA AND QUALITY STATISTICS
Net charge-offs:
Auto loans	$	148		$	159		$	146		$	174		$	207		$	124		$	119		$	118		$	627		$	568
Mortgage		—			7			2			5			2			2			1			—			14			5
Student loans and other		92			60			101			34			29			9			27			(1	)		287			64

Total net charge-offs		240			226			249			213			238			135			147			117			928			637
Net charge-off rate:
Auto loans		1.30	%		1.46	%		1.36	%		1.66	%		1.92	%		1.12	%		1.07	%		1.10	%		1.44	%		1.30	%
Mortgage		—			0.32			0.10			0.29			0.16			0.20			0.11			—			0.17			0.13
Student loans and other		2.59			1.66			2.79			0.92			0.79			0.28			1.12		NM				1.98			0.57
Total net charge-off rate (b)		1.36			1.35			1.52			1.34			1.51			0.88			1.02			0.86			1.40			1.08

30+ day delinquency rate (c) (d)		1.75			1.76			1.80			1.56			1.91			1.65			1.73			1.53			1.75			1.91
Nonperforming assets (e)	$	912		$	872		$	783		$	830		$	866		$	821		$	617		$	477		$	912		$	866


(a)		Predominantly represents loans repurchased from Government National Mortgage Association (“GNMA”) pools, which are insured by U.S. government agencies.

(b)		Total average loans owned includes loans held-for-sale of $1.7 billion, $1.3 billion, $2.8 billion, $3.1 billion, $1.8 billion, $1.5 billion, $3.6 billion and $4.4 billion for the quarters ended December 31, 2009, September 30, 2009, June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008 and March 31, 2008, respectively, and $2.2 and $2.8 billion for full year 2009 and 2008, respectively. These amounts are excluded when calculating the net charge-off rate.

(c)		Excludes mortgage loans that are insured by U.S. government agencies of $9.7 billion, $7.7 billion, $5.1 billion, $4.9 billion, $3.5 billion, $2.2 billion, $1.8 billion and $1.7 billion at December 31, 2009, September 30, 2009, June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008 and March 31, 2008, respectively. These amounts are excluded as reimbursement is proceeding normally.

(d)		Excludes loans that are 30 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program, of $942 million, $903 million, $854 million, $770 million, $824 million, $787 million, $735 million and $734 million at December 31, 2009, September 30, 2009, June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008 and March 31, 2008, respectively. These amounts are excluded as reimbursement is proceeding normally.

(e)		Nonperforming loans and assets exclude: (1) mortgage loans insured by U.S. government agencies of $9.0 billion, $7.0 billion, $4.2 billion, $4.2 billion, $3.0 billion, $1.4 billion, $1.4 billion and $1.3 billion at December 31, 2009, September 30, 2009, June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008 and March 31, 2008, respectively; (2) real estate owned insured by U.S. government agencies of $579 million, $579 million, $508 million, $433 million, $364 million, $370 million, $490 million and $478 million at December 31, 2009, September 30, 2009, June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008 and March 31, 2008, respectively; and (3) student loans that are 90 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program, of $542 million, $511 million, $473 million, $433 million, $437 million, $405 million, $394 million and $418 million at December 31, 2009, September 30, 2009, June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008 and March 31, 2008, respectively. These amounts are excluded as reimbursement is proceeding normally.

Page 7

JPMORGAN CHASE & CO.
RETAIL FINANCIAL SERVICES
FINANCIAL HIGHLIGHTS, CONTINUED
(in billions, except ratio data and where otherwise noted)


	QUARTERLY TRENDS																								FULL YEAR
	4Q09			3Q09			2Q09			1Q09			4Q08			3Q08			2Q08			1Q08			2009			2008
MORTGAGE BANKING & OTHER CONSUMER LENDING (continued)
Origination volume:
Mortgage origination volume by channel
Retail	$	12.3		$	13.3		$	14.7		$	13.6		$	7.6		$	8.4		$	12.5		$	12.6		$	53.9		$	41.1
Wholesale (a)		3.4			3.4			2.4			2.6			3.8			5.9			9.1			10.6			11.8			29.4
Correspondent		17.2			18.4			20.2			17.0			13.3			13.2			17.0			12.0			72.8			55.5
CNT (negotiated transactions)		1.9			2.0			3.8			4.5			3.4			10.2			17.5			11.9			12.2			43.0

Total mortgage origination volume		34.8			37.1			41.1			37.7			28.1			37.7			56.1			47.1			150.7			169.0

Student loans		0.6			1.5			0.4			1.7			1.0			2.6			1.3			2.0			4.2			6.9
Auto		5.9			6.9			5.3			5.6			2.8			3.8			5.6			7.2			23.7			19.4

Application volume:
Mortgage application volume by channel
Retail	$	17.4		$	17.8		$	23.0		$	32.7		$	24.2		$	17.1		$	20.8		$	27.0		$	90.9		$	89.1
Wholesale (a)		3.7			4.7			4.3			3.7			8.8			11.7			15.9			26.6			16.4			63.0
Correspondent		22.3			23.0			26.7			27.3			21.2			18.2			19.7			23.4			99.3			82.5

Total mortgage application volume		43.4			45.5			54.0			63.7			54.2			47.0			56.4			77.0			206.6			234.6


Average mortgage loans held-for-sale & loans at fair value (b)		16.2			18.0			16.7			14.0			12.2			14.9			17.4			13.8			16.2			14.6
Average assets		119.5			115.2			111.6			113.4			108.7			97.3			97.6			91.5			115.0			98.8
Third-party mortgage loans serviced (ending)		1,082.1			1,098.9			1,117.5			1,148.8			1,172.6			1,114.8			659.1			627.1			1,082.1			1,172.6
Third-party mortgage loans serviced (average)		1,088.8			1,104.4			1,128.1			1,155.0			1,169.0			669.7			640.3			620.5			1,119.1			774.9
MSR net carrying value (ending)		15.5			13.6			14.6			10.6			9.3			16.4			10.9			8.4			15.5			9.3
Ratio of MSR net carrying value (ending) to third-party mortgage loans serviced (ending)		1.43	%		1.24	%		1.31	%		0.92	%		0.79	%		1.47	%		1.65	%		1.34	%		1.43	%		0.79	%

SUPPLEMENTAL MORTGAGE FEES AND RELATED INCOME DETAILS (in millions)
Production revenue	$	(192	)	$	(70	)	$	284		$	481		$	62		$	66		$	394		$	376		$	503		$	898

Net mortgage servicing revenue:
Operating revenue:
Loan servicing revenue		1,221			1,220			1,279			1,222			1,366			654			645			593			4,942			3,258
Other changes in MSR asset fair value		(657	)		(712	)		(837	)		(1,073	)		(843	)		(390	)		(394	)		(425	)		(3,279	)		(2,052	)

Total operating revenue		564			508			442			149			523			264			251			168			1,663			1,206
Risk management:
Changes in MSR asset fair value due to inputs or assumptions in model		1,762			(1,099	)		3,831			1,310			(6,950	)		(786	)		1,519			(632	)		5,804			(6,849	)
Derivative valuation adjustments and other		(1,653	)		1,534			(3,750	)		(307	)		8,327			894			(1,468	)		613			(4,176	)		8,366

Total risk management		109			435			81			1,003			1,377			108			51			(19	)		1,628			1,517

Total net mortgage servicing revenue		673			943			523			1,152			1,900			372			302			149			3,291			2,723

Mortgage fees and related income		481			873			807			1,633			1,962			438			696			525			3,794			3,621

Ratio of annualized loan servicing revenue to third-party mortgage loans serviced (average)		0.44	%		0.44	%		0.45	%		0.43	%		0.46	%		0.39	%		0.41	%		0.38	%		0.44	%		0.42	%
MSR revenue multiple (c)		3.25x			2.82x			2.91x			2.14x			1.72x			3.77x			4.02x			3.53x			3.25x			1.88x


(a)		Includes rural housing loans sourced through brokers and underwritten under U.S. Department of Agriculture guidelines.

(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. Average balances of these loans totaled $16.0 billion, $17.7 billion, $16.2 billion, $13.4 billion, $12.0 billion, $14.5 billion, $16.9 billion and $13.4 billion for the quarters ended December 31, 2009, September 30, 2009, June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008 and March 31, 2008, respectively, and $15.8 billion and $14.2 billion for full year 2009 and 2008, respectively.

(c)		Represents the ratio of MSR net carrying value (ending) to third-party mortgage loans serviced (ending) divided by the ratio of annualized loan servicing revenue to third-party mortgage loans serviced (average).

Page 8

JPMORGAN CHASE & CO.
RETAIL FINANCIAL SERVICES
FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except ratio data and where otherwise noted)


	QUARTERLY TRENDS																								FULL YEAR
	4Q09			3Q09			2Q09			1Q09			4Q08			3Q08			2Q08			1Q08			2009			2008
REAL ESTATE PORTFOLIOS
Noninterest revenue	$	(6	)	$	19		$	3		$	(42	)	$	(81	)	$	(45	)	$	(29	)	$	(130	)	$	(26	)	$	(285	)
Net interest income		1,552			1,588			1,590			1,816			1,480			862			917			968			6,546			4,227

Total net revenue		1,546			1,607			1,593			1,774			1,399			817			888			838			6,520			3,942
Provision for credit losses		3,739			3,558			3,119			3,147			2,920			1,811			1,391			2,439			13,563			8,561
Noninterest expense		565			411			417			454			336			176			201			176			1,847			889

Income/(loss) before income tax expense/(benefit)		(2,758	)		(2,362	)		(1,943	)		(1,827	)		(1,857	)		(1,170	)		(704	)		(1,777	)		(8,890	)		(5,508	)

Net income/(loss)	$	(1,692	)	$	(1,448	)	$	(1,190	)	$	(1,119	)	$	(1,143	)	$	(720	)	$	(437	)	$	(1,088	)	$	(5,449	)	$	(3,388	)


Overhead ratio		37	%		26	%		26	%		26	%		24	%		22	%		23	%		21	%		28	%		23	%

BUSINESS METRICS (in billions)
LOANS EXCLUDING PURCHASED CREDIT-IMPAIRED LOANS (a)
End-of-period loans owned:
Home equity	$	101.4		$	104.8		$	108.2		$	111.7		$	114.3		$	116.8		$	95.1		$	95.0		$	101.4		$	114.3
Prime mortgage		47.5			50.0			53.2			56.6			58.7			58.2			35.6			34.3			47.5			58.7
Subprime mortgage		12.5			13.3			13.8			14.6			15.3			18.1			14.8			15.8			12.5			15.3
Option ARMs		8.5			8.9			9.0			9.0			9.0			19.0			—			—			8.5			9.0
Other		0.7			0.7			0.9			0.9			0.9			0.9			0.9			1.0			0.7			0.9

Total end-of-period loans		170.6			177.7			185.1			192.8			198.2			213.0			146.4			146.1			170.6			198.2
Average loans owned:
Home equity	$	103.3		$	106.6		$	110.1		$	113.4		$	114.6		$	94.8		$	95.1		$	95.0		$	108.3		$	99.9
Prime mortgage		48.8			51.7			54.9			58.0			59.7			35.3			35.3			32.4			53.4			40.7
Subprime mortgage		12.8			13.6			14.3			14.9			15.7			14.2			15.5			15.7			13.9			15.3
Option ARMs		8.7			8.9			9.1			8.8			9.0			—			—			—			8.9			2.3
Other		0.7			0.8			0.9			0.9			0.9			0.9			0.9			1.0			0.8			0.9

Total average loans		174.3			181.6			189.3			196.0			199.9			145.2			146.8			144.1			185.3			159.1
PURCHASED CREDIT-IMPAIRED LOANS (a)
End-of-period loans owned:
Home equity	$	26.5		$	27.1		$	27.7		$	28.4		$	28.6		$	26.5		$	—		$	—		$	26.5		$	28.6
Prime mortgage		19.7			20.2			20.8			21.4			21.8			24.7			—			—			19.7			21.8
Subprime mortgage		6.0			6.1			6.4			6.6			6.8			3.9			—			—			6.0			6.8
Option ARMs		29.0			29.8			30.5			31.2			31.6			22.6			—			—			29.0			31.6

Total end-of-period loans		81.2			83.2			85.4			87.6			88.8			77.7			—			—			81.2			88.8
Average loans owned:
Home equity	$	26.7		$	27.4		$	28.0		$	28.4		$	28.2		$	—		$	—		$	—		$	27.6		$	7.1
Prime mortgage		20.0			20.5			21.0			21.6			21.9			—			—			—			20.8			5.4
Subprime mortgage		6.1			6.2			6.5			6.7			6.8			—			—			—			6.3			1.7
Option ARMs		29.3			30.2			31.0			31.4			31.6			—			—			—			30.5			8.0

Total average loans		82.1			84.3			86.5			88.1			88.5			—			—			—			85.2			22.2
TOTAL REAL ESTATE PORTFOLIOS
End-of-period loans owned:
Home equity	$	127.9		$	131.9		$	135.9		$	140.1		$	142.9		$	143.3		$	95.1		$	95.0		$	127.9		$	142.9
Prime mortgage		67.2			70.2			74.0			78.0			80.5			82.9			35.6			34.3			67.2			80.5
Subprime mortgage		18.5			19.4			20.2			21.2			22.1			22.0			14.8			15.8			18.5			22.1
Option ARMs		37.5			38.7			39.5			40.2			40.6			41.6			—			—			37.5			40.6
Other		0.7			0.7			0.9			0.9			0.9			0.9			0.9			1.0			0.7			0.9

Total end-of-period loans		251.8			260.9			270.5			280.4			287.0			290.7			146.4			146.1			251.8			287.0
Average loans owned:
Home equity	$	130.0		$	134.0		$	138.1		$	141.8		$	142.8		$	94.8		$	95.1		$	95.0		$	135.9		$	107.0
Prime mortgage		68.8			72.2			75.9			79.6			81.6			35.3			35.3			32.4			74.2			46.1
Subprime mortgage		18.9			19.8			20.8			21.6			22.5			14.2			15.5			15.7			20.2			17.0
Option ARMs		38.0			39.1			40.1			40.2			40.6			—			—			—			39.4			10.3
Other		0.7			0.8			0.9			0.9			0.9			0.9			0.9			1.0			0.8			0.9

Total average loans owned		256.4			265.9			275.8			284.1			288.4			145.2			146.8			144.1			270.5			181.3
Average assets		247.3			258.3			269.5			279.9			286.3			142.5			144.5			143.1			263.6			179.3
Home equity origination volume		0.4			0.5			0.6			0.9			1.7			2.6			5.3			6.7			2.4			16.3


(a)		Purchased credit-impaired loans represent loans acquired in the Washington Mutual transaction for which a deterioration in credit quality occurred between the origination date and JPMorgan Chase’s acquisition date. 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.

Page 9

JPMORGAN CHASE & CO.
RETAIL FINANCIAL SERVICES
FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except ratio data)


	QUARTERLY TRENDS																								FULL YEAR
	4Q09			3Q09			2Q09			1Q09			4Q08			3Q08			2Q08			1Q08			2009			2008
REAL ESTATE PORTFOLIOS (continued)
CREDIT DATA AND QUALITY STATISTICS
Net charge-offs excluding purchased credit-impaired loans: (a)
Home equity	$	1,177		$	1,142		$	1,265		$	1,098		$	770		$	663		$	511		$	447		$	4,682		$	2,391
Prime mortgage		568			518			479			307			193			175			103			50			1,872			521
Subprime mortgage		452			422			410			364			319			273			192			149			1,648			933
Option ARMs		29			15			15			4			—			—			—			—			63			—
Other		24			19			20			15			13			12			11			13			78			49

Total net charge-offs		2,250			2,116			2,189			1,788			1,295			1,123			817			659			8,343			3,894
Net charge-off rate excluding purchased credit-impaired loans: (a)
Home equity		4.52	%		4.25	%		4.61	%		3.93	%		2.67	%		2.78	%		2.16%			1.89	%		4.32	%		2.39	%
Prime mortgage		4.62			3.98			3.50			2.15			1.29			1.97			1.17			0.62			3.51			1.28
Subprime mortgage		14.01			12.31			11.50			9.91			8.08			7.65			4.98			3.82			11.86			6.10
Option ARMs		1.32			0.67			0.66			0.18			—			—			—			—			0.71			—
Other		13.60			9.42			8.91			6.76			5.75			5.30			4.92			5.23			9.75			5.44
Total net charge-off rate excluding purchased credit-impaired loans		5.12			4.62			4.64			3.70			2.58			3.08			2.24			1.84			4.50			2.45
Net charge-off rate — reported:
Home equity		3.59			3.38			3.67			3.14			2.15			2.78			2.16			1.89			3.45			2.23
Prime mortgage		3.28			2.85			2.53			1.56			0.94			1.97			1.17			0.62			2.52			1.13
Subprime mortgage		9.49			8.46			7.91			6.83			5.64			7.65			4.98			3.82			8.16			5.49
Option ARMs		0.30			0.15			0.15			0.04			—			—			—			—			0.16			—
Other		13.60			9.42			8.91			6.76			5.75			5.30			4.92			5.23			9.75			5.44
Total net charge-off rate — reported		3.48			3.16			3.18			2.55			1.79			3.08			2.24			1.84			3.08			2.15

30+ day delinquency rate excluding purchased credit-impaired loans (b)		7.73			7.46			6.46			5.87			4.97			3.61			4.58			3.94			7.73			4.97
Allowance for loan losses	$	12,752		$	11,261		$	9,821		$	8,870		$	7,510		$	4,941		$	4,252		$	3,676		$	12,752		$	7,510
Nonperforming assets (c)		10,347			10,196			9,085			8,437			7,787			6,884			4,379			3,554			10,347			7,787
Allowance for loan losses to ending loans retained		5.06	%		4.32	%		3.63	%		3.16	%		2.62	%		1.70	%		2.90	%		2.52	%		5.06	%		2.62	%
Allowance for loan losses to ending loans retained excluding purchased credit-impaired loans (a)		6.55			5.72			5.31			4.60			3.79			2.32			2.90			2.52			6.55			3.79


(a)		Excludes the impact of purchased credit-impaired loans that were acquired as part of the Washington Mutual transaction. These loans were accounted for at fair value on the acquisition date, which incorporated management’s estimate, as of that date, of credit losses over the remaining life of the portfolio. An allowance for loan losses of $1.6 billion and $1.1 billion was recorded for these loans at December 31, 2009 and September 30, 2009, respectively, which has also been excluded from applicable ratios. No allowance for loan losses was recorded as of June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008, June 30, 2008 and March 31, 2008. To date, no charge-offs have been recorded for these loans.

(b)		The delinquency rate for purchased credit-impaired loans was 27.79%, 25.56%, 23.37%, 21.36%, 17.89% and 13.21% at December 31, 2009, September 30, 2009, 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 and March 31, 2008.

(c)		Excludes purchased credit-impaired loans that were acquired as part of the Washington Mutual transaction. These loans are accounted for on a pool basis, and the pools are considered to be performing.

Page 10

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