JPMORGAN CHASE & CO - FORM 8-K - EX-99.2

Attached files

file	filename
8-K - FORM 8-K - JPMORGAN CHASE & CO	y85554e8vk.htm
EX-99.1 - EX-99.1 - JPMORGAN CHASE & CO	y85554exv99w1.htm
EX-12.1 - EX-12.1 - JPMORGAN CHASE & CO	y85554exv12w1.htm
EX-12.2 - EX-12.2 - JPMORGAN CHASE & CO	y85554exv12w2.htm

Exhibit 99.2

EARNINGS RELEASE FINANCIAL SUPPLEMENT

SECOND QUARTER 2010


JPMORGAN CHASE & CO. TABLE OF CONTENTS


		Page(s)
Consolidated Results
Consolidated Financial Highlights		2-3
Statements of Income		4
Consolidated Balance Sheets		5
Condensed Average Balance Sheets and Annualized Yields		6
Reconciliation from Reported to Managed Summary		7

Business Detail
Line of Business Financial Highlights — Managed Basis		8
Investment Bank		9-11
Retail Financial Services		12-18
Card Services — Managed Basis		19-21
Commercial Banking		22-23
Treasury & Securities Services		24-25
Asset Management		26-29
Corporate/Private Equity		30-31

Credit-Related Information		32-38

Market Risk-Related Information		39

Supplemental Detail
Capital and Other Selected Balance Sheet Items		40
Per Share-Related Information		41

Non-GAAP Financial Measures		42

Glossary of Terms		43-46

Disclosure Change Summary		47

Page 1


JPMORGAN CHASE & CO. CONSOLIDATED FINANCIAL HIGHLIGHTS (in millions, except per share, ratio and headcount data)


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
SELECTED INCOME STATEMENT DATA:
Reported Basis
Total net revenue	$	25,101		$	27,671		$	23,164		$	26,622		$	25,623			(9	)%		(2	)%	$	52,772		$	50,648			4	%
Total noninterest expense		14,631			16,124			12,004			13,455			13,520			(9	)		8			30,755			26,893			14
Pre-provision profit		10,470			11,547			11,160			13,167			12,103			(9	)		(13	)		22,017			23,755			(7	)
Provision for credit losses		3,363			7,010			7,284			8,104			8,031			(52	)		(58	)		10,373			16,627			(38	)
Income before extraordinary gain		4,795			3,326			3,278			3,512			2,721			44			76			8,121			4,862			67
Extraordinary gain (a)		—			—			—			76			—			—			—			—			—			—
NET INCOME		4,795			3,326			3,278			3,588			2,721			44			76			8,121			4,862			67

Managed Basis (b)
Total net revenue	$	25,613		$	28,172		$	25,236		$	28,780		$	27,709			(9	)		(8	)	$	53,785		$	54,631			(2	)
Total noninterest expense		14,631			16,124			12,004			13,455			13,520			(9	)		8			30,755			26,893			14
Pre-provision profit		10,982			12,048			13,232			15,325			14,189			(9	)		(23	)		23,030			27,738			(17	)
Provision for credit losses		3,363			7,010			8,901			9,802			9,695			(52	)		(65	)		10,373			19,755			(47	)
Income before extraordinary gain		4,795			3,326			3,278			3,512			2,721			44			76			8,121			4,862			67
Extraordinary gain (a)		—			—			—			76			—			—			—			—			—			—
NET INCOME		4,795			3,326			3,278			3,588			2,721			44			76			8,121			4,862			67

PER COMMON SHARE DATA:
Basic Earnings
Income before extraordinary gain		1.10			0.75			0.75			0.80			0.28			47			293			1.84			0.68			171
Net income		1.10			0.75			0.75			0.82			0.28			47			293			1.84			0.68			171

Diluted Earnings (c)
Income before extraordinary gain		1.09			0.74			0.74			0.80			0.28			47			289			1.83			0.68			169
Net income		1.09			0.74			0.74			0.82			0.28			47			289			1.83			0.68			169

Cash dividends declared		0.05			0.05			0.05			0.05			0.05			—			—			0.10			0.10			—
Book value		40.99			39.38			39.88			39.12			37.36			4			10			40.99			37.36			10
Closing share price		36.61			44.75			41.67			43.82			34.11			(18	)		7			36.61			34.11			7
Market capitalization		145,554			177,897			164,261			172,596			133,852			(18	)		9			145,554			133,852			9

COMMON SHARES OUTSTANDING:
Weighted-average diluted shares		4,005.6			3,994.7			3,974.1			3,962.0			3,824.1			—			5			4,000.2			3,791.4			6
Common shares at period-end		3,975.8			3,975.4			3,942.0			3,938.7			3,924.1			—			1			3,975.8			3,924.1			1

FINANCIAL RATIOS: (d)
Net income:
Return on equity (“ROE”) (c)		12	%		8	%		8	%		9	%(a)		3	%								10	%		4	%
Return on tangible common equity (“ROTCE”) (c)(e)		17			12			12			14	(a)		5									15			6
Return on assets (“ROA”)		0.94			0.66			0.65			0.71	(a)		0.54									0.80			0.48

CAPITAL RATIOS:
Tier 1 capital ratio		12.1	(g)		11.5			11.1			10.2			9.7
Total capital ratio		15.8	(g)		15.1			14.8			13.9			13.3
Tier 1 common capital ratio (f)		9.6	(g)		9.1			8.8			8.2			7.7


(a)		On September 25, 2008, JPMorgan Chase acquired the banking operations of Washington Mutual. The acquisition resulted in negative goodwill, and accordingly, the Firm recognized an extraordinary gain. A preliminary gain of $1.9 billion was recognized at December 31, 2008. The final total extraordinary gain that resulted from the Washington Mutual transaction was $2.0 billion. For the third quarter of 2009, and based on income before extraordinary gain, return on equity remained at 9%, return on tangible common equity was 13% and return on assets was 0.70%.

(b)		For further discussion of managed basis, see Reconciliation from Reported to Managed Summary on page 7.

c)		The calculation of the second quarter 2009 earnings per share and net income applicable to common equity includes a one-time, noncash reduction of $1.1 billion, or $0.27 per share, resulting from repayment of Troubled Asset Relief Program (“TARP”) preferred capital. Excluding this reduction, the adjusted ROE and ROTCE for the second quarter 2009 would have been 6% and 10%, respectively. The Firm views the adjusted ROE and ROTCE, both non-GAAP financial measures, as meaningful because they enable the comparability to prior periods.

(d)		Ratios are based upon annualized amounts.

(e)		The Firm uses return on tangible common equity, a non-GAAP financial measure, to evaluate the Firm’s use of equity and to facilitate comparisons with competitors. For further discussion of ROTCE, see page 42.

(f)		Tier 1 common capital ratio is Tier 1 common capital divided by risk-weighted assets. The Firm uses Tier 1 common capital along with the other capital measures to assess and monitor its capital position. For further discussion of Tier 1 common capital ratio, see page 42.

(g)		Estimated.

Page 2


JPMORGAN CHASE & CO. CONSOLIDATED FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except per share, ratio and headcount data)


	QUARTERLY TRENDS																				YEAR-TO-DATE
															2Q10 Change											2010 Change
	2Q10		1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010		2009			2009
SELECTED BALANCE SHEET DATA (Period-end) (a)
Total assets	$	2,014,019	$	2,135,796		$	2,031,989		$	2,041,009		$	2,026,642			(6	)%		(1	)%	$	2,014,019	$	2,026,642			(1	)%
Wholesale loans		216,826		214,290			204,175			218,953			231,625			1			(6	)		216,826		231,625			(6	)
Consumer loans		482,657		499,509			429,283			434,191			448,976			(3	)		8			482,657		448,976			8
Deposits		887,805		925,303			938,367			867,977			866,477			(4	)		2			887,805		866,477			2
Common stockholders’ equity		162,968		156,569			157,213			154,101			146,614			4			11			162,968		146,614			11
Total stockholders’ equity		171,120		164,721			165,365			162,253			154,766			4			11			171,120		154,766			11

Headcount		232,939		226,623			222,316			220,861			220,255			3			6			232,939		220,255			6

LINE OF BUSINESS NET INCOME/(LOSS)
Investment Bank	$	1,381	$	2,471		$	1,901		$	1,921		$	1,471			(44	)		(6	)	$	3,852	$	3,077			25
Retail Financial Services		1,042		(131	)		(399	)		7			15		NM			NM				911		489			86
Card Services		343		(303	)		(306	)		(700	)		(672	)	NM			NM				40		(1,219	)	NM
Commercial Banking		693		390			224			341			368			78			88			1,083		706			53
Treasury & Securities Services		292		279			237			302			379			5			(23	)		571		687			(17	)
Asset Management		391		392			424			430			352			—			11			783		576			36
Corporate/Private Equity		653		228			1,197			1,287			808			186			(19	)		881		546			61

NET INCOME	$	4,795	$	3,326		$	3,278		$	3,588		$	2,721			44			76		$	8,121	$	4,862			67


(a)		Effective January 1, 2010, the Firm adopted new guidance that amended the accounting for the transfer of financial assets and the consolidation of variable interest entities (“VIEs”). Upon adoption of the new guidance, the Firm consolidated its Firm-sponsored credit card securitization trusts, Firm-administered multi-seller conduits and certain other consumer loan securitization entities, primarily mortgage-related, adding $87.7 billion and $92.2 billion of assets and liabilities, respectively, and decreasing stockholders’ equity and the Tier I capital ratio by $4.5 billion and 34 basis points, respectively. The reduction to stockholders’ equity was driven by the establishment of an allowance for loan losses of $7.5 billion (pretax) primarily related to receivables held in credit card securitization trusts that were consolidated at the adoption date. For further details regarding the Firm’s application and impact of the new accounting guidance, see Note 14 on pages 130-131, Note 15 on pages 131-142 and Note 22 on pages 149-152 of JPMorgan Chase’s March 31, 2010, Form 10-Q.

Page 3


JPMORGAN CHASE & CO. STATEMENTS OF INCOME (in millions, except per share and ratio data)


	QUARTERLY TRENDS																					YEAR TO DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
REVENUE
Investment banking fees	$	1,421		$	1,461		$	1,916		$	1,679		$	2,106			(3	)%		(33	)%	$	2,882		$	3,492			(17	)%
Principal transactions		2,090			4,548			838			3,860			3,097			(54	)		(33	)		6,638			5,098			30
Lending- and deposit-related fees		1,586			1,646			1,765			1,826			1,766			(4	)		(10	)		3,232			3,454			(6	)
Asset management, administration and commissions		3,349			3,265			3,361			3,158			3,124			3			7			6,614			6,021			10
Securities gains		1,000			610			381			184			347			64			188			1,610			545			195
Mortgage fees and related income		888			658			450			843			784			35			13			1,546			2,385			(35	)
Credit card income		1,495			1,361			1,844			1,710			1,719			10			(13	)		2,856			3,556			(20	)
Other income		585			412			231			625			10			42		NM				997			60		NM

Noninterest revenue		12,414			13,961			10,786			13,885			12,953			(11	)		(4	)		26,375			24,611			7
Interest income		15,719			16,845			15,615			16,260			16,549			(7	)		(5	)		32,564			34,475			(6	)
Interest expense		3,032			3,135			3,237			3,523			3,879			(3	)		(22	)		6,167			8,438			(27	)

Net interest income		12,687			13,710			12,378			12,737			12,670			(7	)		—			26,397			26,037			1

TOTAL NET REVENUE		25,101			27,671			23,164			26,622			25,623			(9	)		(2	)		52,772			50,648			4
Provision for credit losses		3,363			7,010			7,284			8,104			8,031			(52	)		(58	)		10,373			16,627			(38	)
NONINTEREST EXPENSE
Compensation expense		7,616			7,276			5,112			7,311			6,917			5			10			14,892			14,505			3
Occupancy expense		883			869			944			923			914			2			(3	)		1,752			1,799			(3	)
Technology, communications and equipment expense		1,165			1,137			1,182			1,140			1,156			2			1			2,302			2,302			—
Professional and outside services		1,685			1,575			1,682			1,517			1,518			7			11			3,260			3,033			7
Marketing		628			583			536			440			417			8			51			1,211			801			51
Other expense		2,419			4,441			2,262			1,767			2,190			(46	)		10			6,860			3,565			92
Amortization of intangibles		235			243			256			254			265			(3	)		(11	)		478			540			(11	)
Merger costs		—			—			30			103			143			—		NM				—			348		NM

TOTAL NONINTEREST EXPENSE		14,631			16,124			12,004			13,455			13,520			(9	)		8			30,755			26,893			14


Income before income tax expense and extraordinary gain		7,107			4,537			3,876			5,063			4,072			57			75			11,644			7,128			63
Income tax expense (a)		2,312			1,211			598			1,551			1,351			91			71			3,523			2,266			55

Income before extraordinary gain		4,795			3,326			3,278			3,512			2,721			44			76			8,121			4,862			67
Extraordinary gain (b)		—			—			—			76			—			—			—			—			—			—

NET INCOME	$	4,795		$	3,326		$	3,278		$	3,588		$	2,721			44			76		$	8,121		$	4,862			67


DILUTED EARNINGS PER SHARE
Income before extraordinary gain (c)	$	1.09		$	0.74		$	0.74		$	0.80		$	0.28			47			289		$	1.83		$	0.68			169
Extraordinary gain		—			—			—			0.02			—			—			—			—			—			—

NET INCOME (c)	$	1.09		$	0.74		$	0.74		$	0.82		$	0.28			47			289		$	1.83		$	0.68			169


FINANCIAL RATIOS
Net income:
Return on equity (c)		12	%		8	%		8	%		9	%(b)		3	%								10	%		4	%
Return on tangible common equity (c)(d)		17			12			12			14	(b)		5									15			6
Return on assets		0.94			0.66			0.65			0.71	(b)		0.54									0.80			0.48
Effective income tax rate (a)		33			27			15			31			33									30			32
Overhead ratio		58			58			52			51			53									58			53

EXCLUDING IMPACT OF MERGER COSTS (e)
Income before extraordinary gain	$	4,795		$	3,326		$	3,278		$	3,512		$	2,721			44			76		$	8,121		$	4,862			67
Merger costs (after-tax)		—			—			18			64			89			—		NM				—			216		NM

Income before extraordinary gain excl. merger costs	$	4,795		$	3,326		$	3,296		$	3,576		$	2,810			44			71		$	8,121		$	5,078			60

Diluted Earnings Per Share:
Income before extraordinary gain (c)	$	1.09		$	0.74		$	0.74		$	0.80		$	0.28			47			289		$	1.83		$	0.68			169
Merger costs (after-tax)		—			—			0.01			0.02			0.02			—		NM				—			0.05		NM

Income before extraordinary gain excl. merger costs (c)	$	1.09		$	0.74		$	0.75		$	0.82		$	0.30			47			263		$	1.83		$	0.73			151


(a)		The income tax expense in the first quarter of 2010 and fourth quarter of 2009 includes tax benefits recognized upon the resolution of tax audits.

(b)		On September 25, 2008, JPMorgan Chase acquired the banking operations of Washington Mutual. The acquisition resulted in negative goodwill, and accordingly, the Firm recognized an extraordinary gain. A preliminary gain of $1.9 billion was recognized at December 31, 2008. The final total extraordinary gain that resulted from the Washington Mutual transaction was $2.0 billion. For the third quarter of 2009, and based on income before extraordinary gain, return on equity remained at 9%, return on tangible common equity was 13% and return on assets was 0.70%.

(c)		The calculation of the second quarter 2009 earnings per share and net income applicable to common equity includes a one-time, noncash reduction of $1.1 billion, or $0.27 per share, resulting from repayment of TARP preferred capital. For additional information on the reduction, see page 2, footnote (c).

(d)		The Firm uses return on tangible common equity, a non-GAAP financial measure, to evaluate the Firm’s use of equity and to facilitate comparisons with competitors. For further discussion of ROTCE, see page 42.

(e)		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 4


JPMORGAN CHASE & CO. CONSOLIDATED BALANCE SHEETS (in millions)


																June 30, 2010
																Change
	Jun 30			Mar 31			Dec 31			Sep 30			Jun 30			Mar 31			Jun 30
	2010			2010			2009			2009			2009			2010			2009
ASSETS (a)
Cash and due from banks	$	32,806		$	31,422		$	26,206		$	21,068		$	25,133			4	%		31	%
Deposits with banks		39,430			59,014			63,230			59,623			61,882			(33	)		(36	)
Federal funds sold and securities purchased under resale agreements		199,024			230,123			195,404			171,007			159,170			(14	)		25
Securities borrowed		122,289			126,741			119,630			128,059			129,263			(4	)		(5	)
Trading assets:
Debt and equity instruments		317,293			346,712			330,918			330,370			298,135			(8	)		6
Derivative receivables		80,215			79,416			80,210			94,065			97,491			1			(18	)
Securities		312,013			344,376			360,390			372,867			345,563			(9	)		(10	)
Loans		699,483			713,799			633,458			653,144			680,601			(2	)		3
Less: Allowance for loan losses		35,836			38,186			31,602			30,633			29,072			(6	)		23

Loans, net of allowance for loan losses		663,647			675,613			601,856			622,511			651,529			(2	)		2
Accrued interest and accounts receivable		61,295			53,991			67,427			59,948			61,302			14			—
Premises and equipment		11,267			11,123			11,118			10,675			10,668			1			6
Goodwill		48,320			48,359			48,357			48,334			48,288			—			—
Mortgage servicing rights		11,853			15,531			15,531			13,663			14,600			(24	)		(19	)
Other intangible assets		4,178			4,383			4,621			4,862			5,082			(5	)		(18	)
Other assets		110,389			108,992			107,091			103,957			118,536			1			(7	)

TOTAL ASSETS	$	2,014,019		$	2,135,796		$	2,031,989		$	2,041,009		$	2,026,642			(6	)		(1	)


LIABILITIES (a)
Deposits	$	887,805		$	925,303		$	938,367		$	867,977		$	866,477			(4	)		2
Federal funds purchased and securities loaned or sold under repurchase agreements		237,455			295,171			261,413			310,219			300,931			(20	)		(21	)
Commercial paper		41,082			50,554			41,794			53,920			42,713			(19	)		(4	)
Other borrowed funds		44,431			48,981			55,740			50,824			73,968			(9	)		(40	)
Trading liabilities:
Debt and equity instruments		74,745			78,228			64,946			65,233			56,021			(4	)		33
Derivative payables		60,137			62,741			60,125			69,214			67,197			(4	)		(11	)
Accounts payable and other liabilities		160,478			154,185			162,696			171,386			171,685			4			(7	)
Beneficial interests issued by consolidated VIEs		88,148			93,055			15,225			17,859			20,945			(5	)		321
Long-term debt		248,618			262,857			266,318			272,124			271,939			(5	)		(9	)

TOTAL LIABILITIES		1,842,899			1,971,075			1,866,624			1,878,756			1,871,876			(7	)		(2	)

STOCKHOLDERS’ EQUITY (a)
Preferred stock		8,152			8,152			8,152			8,152			8,152			—			—
Common stock		4,105			4,105			4,105			4,105			4,105			—			—
Capital surplus		96,745			96,450			97,982			97,564			97,662			—			(1	)
Retained earnings		65,465			61,043			62,481			59,573			56,355			7			16
Accumulated other comprehensive income/(loss)		2,404			761			(91	)		283			(3,438	)		216		NM
Shares held in RSU trust, at cost		(68	)		(68	)		(68	)		(86	)		(86	)		—			21
Treasury stock, at cost		(5,683	)		(5,722	)		(7,196	)		(7,338	)		(7,984	)		1			29

TOTAL STOCKHOLDERS’ EQUITY		171,120			164,721			165,365			162,253			154,766			4			11

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,014,019		$	2,135,796		$	2,031,989		$	2,041,009		$	2,026,642			(6	)		(1	)


(a)		Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. For further details regarding the Firm’s application and impact of the new guidance, see footnote (a) on page 3.

Page 5


JPMORGAN CHASE & CO. CONDENSED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS (in millions, except rates)


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
AVERAGE BALANCES (a)
ASSETS
Deposits with banks	$	58,737		$	64,229		$	49,705		$	62,248		$	68,001			(9	)%		(14	)%	$	61,468		$	78,237			(21	)%
Federal funds sold and securities purchased under resale agreements		189,573			170,036			156,848			151,705			142,226			11			33			179,858			151,554			19
Securities borrowed		113,650			114,636			125,453			129,301			122,235			(1	)		(7	)		114,140			121,498			(6	)
Trading assets — debt instruments		245,532			248,089			256,414			250,148			245,444			(1	)		—			246,804			248,753			(1	)
Securities		327,425			337,441			374,327			359,451			354,216			(3	)		(8	)		332,405			318,019			5
Loans		705,189			725,136			642,406			665,386			697,908			(3	)		1			715,108			712,353			—
Other assets (b)		34,429			27,885			29,868			24,155			36,638			23			(6	)		31,175			32,050			(3	)

Total interest-earning assets		1,674,535			1,687,452			1,635,021			1,642,394			1,666,668			(1	)		—			1,680,958			1,662,464			1
Trading assets — equity instruments		95,080			83,674			74,936			66,790			63,507			14			50			89,408			63,130			42
Trading assets — derivative receivables		79,409			78,683			86,415			99,807			114,096			1			(30	)		79,048			128,092			(38	)
All other noninterest-earning assets		194,623			188,871			196,853			190,185			194,101			3			—			191,763			198,980			(4	)

TOTAL ASSETS	$	2,043,647		$	2,038,680		$	1,993,225		$	1,999,176		$	2,038,372			—			—		$	2,041,177		$	2,052,666			(1	)


LIABILITIES
Interest-bearing deposits	$	668,953		$	677,431		$	667,269		$	660,998		$	672,350			(1	)		(1	)	$	673,169		$	704,228			(4	)
Federal funds purchased and securities loaned or sold under repurchase agreements		273,614			271,934			283,263			303,175			289,971			1			(6	)		272,779			258,217			6
Commercial paper		37,557			37,461			42,290			42,728			37,371			—			—			37,509			35,543			6
Trading liabilities — debt instruments		72,276			65,154			63,048			47,467			43,150			11			67			68,735			41,690			65
Other borrowings and liabilities (c)		131,546			123,321			119,374			131,518			164,339			7			(20	)		127,455			180,309			(29	)
Beneficial interests issued by consolidated VIEs		90,085			98,104			16,002			19,351			14,493			(8	)	NM				94,072			12,138		NM
Long-term debt		256,089			262,503			268,476			271,281			274,323			(2	)		(7	)		259,279			266,571			(3	)

Total interest-bearing liabilities		1,530,120			1,535,908			1,459,722			1,476,518			1,495,997			—			2			1,532,998			1,498,696			2
Noninterest-bearing deposits		209,615			200,075			203,092			191,821			199,221			5			5			204,871			198,531			3
Trading liabilities — equity instruments		5,216			5,728			8,372			12,376			11,437			(9	)		(54	)		5,470			13,036			(58	)
Trading liabilities — derivative payables		62,547			59,053			63,423			75,458			78,155			6			(20	)		60,809			86,503			(30	)
All other noninterest-bearing liabilities		68,928			73,670			93,939			85,383			84,359			(6	)		(18	)		71,287			87,071			(18	)

TOTAL LIABILITIES		1,876,426			1,874,434			1,828,548			1,841,556			1,869,169			—			—			1,875,435			1,883,837			—

Preferred stock		8,152			8,152			8,152			8,152			28,338			—			(71	)		8,152			30,138			(73	)
Common stockholders’ equity		159,069			156,094			156,525			149,468			140,865			2			13			157,590			138,691			14

TOTAL STOCKHOLDERS’ EQUITY		167,221			164,246			164,677			157,620			169,203			2			(1	)		165,742			168,829			(2	)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,043,647		$	2,038,680		$	1,993,225		$	1,999,176		$	2,038,372			—			—		$	2,041,177		$	2,052,666			(1	)


AVERAGE RATES (a)
INTEREST-EARNING ASSETS
Deposits with banks		0.63	%		0.60	%		0.95	%		0.83	%		1.45	%								0.61	%		1.78	%
Federal funds sold and securities purchased under resale agreements		0.84			0.97			0.92			0.96			1.04									0.90			1.35
Securities borrowed		0.11			0.10			0.14			(0.09	)		(0.32	)								0.11			(0.02	)
Trading assets — debt instruments		4.25			4.56			4.63			4.78			4.91									4.41			5.09
Securities		3.14			3.54			3.32			3.62			3.64									3.34			3.87
Loans		5.68			5.91			5.51			5.64			5.65									5.80			5.76
Other assets (b)		1.60			1.36			1.42			2.18			0.80									1.49			1.50
Total interest-earning assets		3.79			4.07			3.80			3.95			4.00									3.93			4.20

INTEREST-BEARING LIABILITIES
Interest-bearing deposits		0.53			0.51			0.53			0.65			0.70									0.52			0.82
Federal funds purchased and securities loaned or sold under repurchase agreements		(0.07	) (d)		(0.05	) (d)		0.08			0.20			0.23									(0.06	)		0.29
Commercial paper		0.19			0.19			0.20			0.23			0.24									0.19			0.35
Trading liabilities — debt instruments		2.49			3.39			3.85			4.50			3.76									2.91			3.71
Other borrowings and liabilities (c)		0.50			0.56			0.83			0.69			0.69									0.53			0.86
Beneficial interests issued by consolidated VIEs		1.36			1.36			1.32			1.43			1.59									1.36			1.58
Long-term debt		1.97			1.95			2.01			2.09			2.60									1.96			2.67
Total interest-bearing liabilities		0.79			0.83			0.88			0.95			1.04									0.81			1.14

INTEREST RATE SPREAD		3.00	%		3.24	%		2.92	%		3.00	%		2.96	%								3.12	%		3.06	%

NET YIELD ON INTEREST-EARNING ASSETS		3.06	%		3.32	%		3.02	%		3.10	%		3.07	%								3.19	%		3.18	%

NET YIELD ON INTEREST-EARNING ASSETS ADJUSTED FOR SECURITIZATIONS		3.06	%		3.32	%		3.33	%		3.40	%		3.37	%								3.19	%		3.48	%


(a)		Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. For further details regarding the Firm’s application and impact of the new guidance, see footnote (a) on page 3.

(b)		Includes margin loans and the Firm’s investment in asset-backed commercial paper under the Federal Reserve Bank of Boston’s AML facility, which declined to zero during the third quarter of 2009.

(c)		Includes securities sold but not yet purchased, brokerage customer payables and advances from Federal Home Loan Banks.

(d)		Reflects a benefit from the favorable market environment for dollar-roll financings.

Page 6


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 the lines of business on a “managed” basis, which is a non-GAAP financial measure. For additional information on managed basis, including the effect of adopting, effective January 1, 2010, new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs, refer to the notes on Non-GAAP Financial Measures on page 42.


	QUARTERLY TRENDS																			YEAR-TO-DATE
														2Q10 Change											2010 Change
	2Q10		1Q10		4Q09			3Q09			2Q09			1Q10			2Q09			2010		2009			2009
CREDIT CARD INCOME
Credit card income — reported	$	1,495	$	1,361	$	1,844		$	1,710		$	1,719			10	%		(13	)%	$	2,856	$	3,556			(20	)%
Impact of:
Credit card securitizations		N/A		N/A		(375	)		(285	)		(294	)	NM			NM				N/A		(834	)	NM

Credit card income — managed	$	1,495	$	1,361	$	1,469		$	1,425		$	1,425			10			5		$	2,856	$	2,722			5


OTHER INCOME
Other income — reported	$	585	$	412	$	231		$	625		$	10			42		NM			$	997	$	60		NM
Impact of:
Tax-equivalent adjustments		416		411		397			371			335			1			24			827		672			23

Other income — managed	$	1,001	$	823	$	628		$	996		$	345			22			190		$	1,824	$	732			149


TOTAL NONINTEREST REVENUE
Total noninterest revenue — reported	$	12,414	$	13,961	$	10,786		$	13,885		$	12,953			(11	)		(4	)	$	26,375	$	24,611			7
Impact of:
Credit card securitizations		N/A		N/A		(375	)		(285	)		(294	)	NM			NM				N/A		(834	)	NM
Tax-equivalent adjustments		416		411		397			371			335			1			24			827		672			23

Total noninterest revenue — managed	$	12,830	$	14,372	$	10,808		$	13,971		$	12,994			(11	)		(1	)	$	27,202	$	24,449			11


NET INTEREST INCOME
Net interest income — reported	$	12,687	$	13,710	$	12,378		$	12,737		$	12,670			(7	)		—		$	26,397	$	26,037			1
Impact of:
Credit card securitizations		N/A		N/A		1,992			1,983			1,958		NM			NM				N/A		3,962		NM
Tax-equivalent adjustments		96		90		58			89			87			7			10			186		183			2

Net interest income — managed	$	12,783	$	13,800	$	14,428		$	14,809		$	14,715			(7	)		(13	)	$	26,583	$	30,182			(12	)


TOTAL NET REVENUE
Total net revenue — reported	$	25,101	$	27,671	$	23,164		$	26,622		$	25,623			(9	)		(2	)	$	52,772	$	50,648			4
Impact of:
Credit card securitizations		N/A		N/A		1,617			1,698			1,664		NM			NM				N/A		3,128		NM
Tax-equivalent adjustments		512		501		455			460			422			2			21			1,013		855			18

Total net revenue — managed	$	25,613	$	28,172	$	25,236		$	28,780		$	27,709			(9	)		(8	)	$	53,785	$	54,631			(2	)


PRE-PROVISION PROFIT
Total pre-provision profit — reported	$	10,470	$	11,547	$	11,160		$	13,167		$	12,103			(9	)		(13	)	$	22,017	$	23,755			(7	)
Impact of:
Credit card securitizations		N/A		N/A		1,617			1,698			1,664		NM			NM				N/A		3,128		NM
Tax-equivalent adjustments		512		501		455			460			422			2			21			1,013		855			18

Total pre-provision profit — managed	$	10,982	$	12,048	$	13,232		$	15,325		$	14,189			(9	)		(23	)	$	23,030	$	27,738			(17	)


PROVISION FOR CREDIT LOSSES
Provision for credit losses — reported	$	3,363	$	7,010	$	7,284		$	8,104		$	8,031			(52	)		(58	)	$	10,373	$	16,627			(38	)
Impact of:
Credit card securitizations		N/A		N/A		1,617			1,698			1,664		NM			NM				N/A		3,128		NM

Provision for credit losses — managed	$	3,363	$	7,010	$	8,901		$	9,802		$	9,695			(52	)		(65	)	$	10,373	$	19,755			(47	)


INCOME TAX EXPENSE
Income tax expense — reported	$	2,312	$	1,211	$	598		$	1,551		$	1,351			91			71		$	3,523	$	2,266			55
Impact of:
Tax-equivalent adjustments		512		501		455			460			422			2			21			1,013		855			18

Income tax expense — managed	$	2,824	$	1,712	$	1,053		$	2,011		$	1,773			65			59		$	4,536	$	3,121			45


N/A:		Not applicable.

Page 7


JPMORGAN CHASE & CO. LINE OF BUSINESS FINANCIAL HIGHLIGHTS — MANAGED BASIS (in millions, except ratio data)


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
TOTAL NET REVENUE (FTE)
Investment Bank (a)	$	6,332		$	8,319		$	4,929		$	7,508		$	7,301			(24	)%		(13	)%	$	14,651		$	15,672			(7	)%
Retail Financial Services		7,809			7,776			7,669			8,218			7,970			—			(2	)		15,585			16,805			(7	)
Card Services		4,217			4,447			5,148			5,159			4,868			(5	)		(13	)		8,664			9,997			(13	)
Commercial Banking		1,486			1,416			1,406			1,459			1,453			5			2			2,902			2,855			2
Treasury & Securities Services		1,881			1,756			1,835			1,788			1,900			7			(1	)		3,637			3,721			(2	)
Asset Management		2,068			2,131			2,195			2,085			1,982			(3	)		4			4,199			3,685			14
Corporate/Private Equity (a)		1,820			2,327			2,054			2,563			2,235			(22	)		(19	)		4,147			1,896			119

TOTAL NET REVENUE	$	25,613		$	28,172		$	25,236		$	28,780		$	27,709			(9	)		(8	)	$	53,785		$	54,631			(2	)


TOTAL PRE-PROVISION PROFIT
Investment Bank (a)	$	1,810		$	3,481		$	2,643		$	3,234		$	3,234			(48	)		(44	)	$	5,291		$	6,831			(23	)
Retail Financial Services		3,528			3,534			3,367			4,022			3,891			—			(9	)		7,062			8,555			(17	)
Card Services		2,781			3,045			3,752			3,853			3,535			(9	)		(21	)		5,826			7,318			(20	)
Commercial Banking		944			877			863			914			918			8			3			1,821			1,767			3
Treasury & Securities Services		482			431			444			508			612			12			(21	)		913			1,114			(18	)
Asset Management		663			689			725			734			628			(4	)		6			1,352			1,033			31
Corporate/Private Equity (a)		774			(9	)		1,438			2,060			1,371		NM				(44	)		765			1,120			(32	)

TOTAL PRE-PROVISION PROFIT	$	10,982		$	12,048		$	13,232		$	15,325		$	14,189			(9	)		(23	)	$	23,030		$	27,738			(17	)


NET INCOME/(LOSS)
Investment Bank	$	1,381		$	2,471		$	1,901		$	1,921		$	1,471			(44	)		(6	)	$	3,852		$	3,077			25
Retail Financial Services		1,042			(131	)		(399	)		7			15		NM			NM				911			489			86
Card Services		343			(303	)		(306	)		(700	)		(672	)	NM			NM				40			(1,219	)	NM
Commercial Banking		693			390			224			341			368			78			88			1,083			706			53
Treasury & Securities Services		292			279			237			302			379			5			(23	)		571			687			(17	)
Asset Management		391			392			424			430			352			—			11			783			576			36
Corporate/Private Equity		653			228			1,197			1,287			808			186			(19	)		881			546			61

TOTAL NET INCOME	$	4,795		$	3,326		$	3,278		$	3,588		$	2,721			44			76		$	8,121		$	4,862			67


AVERAGE EQUITY (b)
Investment Bank	$	40,000		$	40,000		$	33,000		$	33,000		$	33,000			—			21		$	40,000		$	33,000			21
Retail Financial Services		28,000			28,000			25,000			25,000			25,000			—			12			28,000			25,000			12
Card Services		15,000			15,000			15,000			15,000			15,000			—			—			15,000			15,000			—
Commercial Banking		8,000			8,000			8,000			8,000			8,000			—			—			8,000			8,000			—
Treasury & Securities Services		6,500			6,500			5,000			5,000			5,000			—			30			6,500			5,000			30
Asset Management		6,500			6,500			7,000			7,000			7,000			—			(7	)		6,500			7,000			(7	)
Corporate/Private Equity		55,069			52,094			63,525			56,468			47,865			6			15			53,590			45,691			17

TOTAL AVERAGE EQUITY	$	159,069		$	156,094		$	156,525		$	149,468		$	140,865			2			13		$	157,590		$	138,691			14


RETURN ON EQUITY (b)
Investment Bank		14	%		25	%		23	%		23	%		18	%								19	%		19	%
Retail Financial Services		15			(2	)		(6	)		—			—									7			4
Card Services		9			(8	)		(8	)		(19	)		(18	)								1			(16	)
Commercial Banking		35			20			11			17			18									27			18
Treasury & Securities Services		18			17			19			24			30									18			28
Asset Management		24			24			24			24			20									24			17


(a)		Corporate/Private Equity includes an adjustment to offset IB’s inclusion of the credit reimbursement from TSS in total net revenue; TSS reports the reimbursement to IB as a separate line on its income statement (not part of total revenue).

(b)		Equity for a line of business represents the amount the Firm believes the business would require if it were operating independently, incorporating sufficient capital to address economic risk measures, regulatory capital requirements and capital levels for similarly rated peers. Capital is also allocated to each line of business for, among other things, goodwill and other intangibles associated with acquisitions effected by the line of business. Return on common equity is measured and internal targets for expected returns are established as a key measure of a business segment’s performance. Effective January 1, 2010, the Firm enhanced its line of business equity framework to better align equity assigned to each line of business with the changes anticipated to occur in that line of business, as well as changes in the competitive and regulatory landscape. The lines of business are now capitalized based on the Tier 1 common standard, rather than the Tier 1 capital standard.

Page 8


JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS (in millions, except ratio data)


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
INCOME STATEMENT
REVENUE
Investment banking fees	$	1,405		$	1,446		$	1,892		$	1,658		$	2,239			(3	)%		(37	)%	$	2,851		$	3,619			(21	)%
Principal transactions		2,105			3,931			84			2,714			1,841			(46	)		14			6,036			5,356			13
Lending- and deposit-related fees		203			202			174			185			167			—			22			405			305			33
Asset management, administration and commissions		633			563			608			633			717			12			(12	)		1,196			1,409			(15	)
All other income (a)		86			49			(14	)		63			(108	)		76		NM				135			(164	)	NM

Noninterest revenue		4,432			6,191			2,744			5,253			4,856			(28	)		(9	)		10,623			10,525			1
Net interest income		1,900			2,128			2,185			2,255			2,445			(11	)		(22	)		4,028			5,147			(22	)

TOTAL NET REVENUE (b)		6,332			8,319			4,929			7,508			7,301			(24	)		(13	)		14,651			15,672			(7	)

Provision for credit losses		(325	)		(462	)		(181	)		379			871			30		NM				(787	)		2,081		NM

NONINTEREST EXPENSE
Compensation expense (c)		2,923			2,928			549			2,778			2,677			—			9			5,851			6,007			(3	)
Noncompensation expense		1,599			1,910			1,737			1,496			1,390			(16	)		15			3,509			2,834			24

TOTAL NONINTEREST EXPENSE		4,522			4,838			2,286			4,274			4,067			(7	)		11			9,360			8,841			6


Income before income tax expense		2,135			3,943			2,824			2,855			2,363			(46	)		(10	)		6,078			4,750			28
Income tax expense		754			1,472			923			934			892			(49	)		(15	)		2,226			1,673			33

NET INCOME	$	1,381		$	2,471		$	1,901		$	1,921		$	1,471			(44	)		(6	)	$	3,852		$	3,077			25


FINANCIAL RATIOS
ROE		14	%		25	%		23	%		23	%		18	%								19	%		19	%
ROA		0.78			1.48			1.12			1.12			0.83									1.12			0.86
Overhead ratio		71			58			46			57			56									64			56
Compensation expense as a percent of total net revenue (c)		37			35			11			37			37									36			38

REVENUE BY BUSINESS
Investment banking fees:
Advisory	$	355		$	305		$	611		$	384		$	393			16			(10	)	$	660		$	872			(24	)
Equity underwriting		354			413			549			681			1,103			(14	)		(68	)		767			1,411			(46	)
Debt underwriting		696			728			732			593			743			(4	)		(6	)		1,424			1,336			7

Total investment banking fees		1,405			1,446			1,892			1,658			2,239			(3	)		(37	)		2,851			3,619			(21	)
Fixed income markets		3,563			5,464			2,735			5,011			4,929			(35	)		(28	)		9,027			9,818			(8	)
Equity markets		1,038			1,462			971			941			708			(29	)		47			2,500			2,481			1
Credit portfolio (a)		326			(53	)		(669	)		(102	)		(575	)	NM			NM				273			(246	)	NM

Total net revenue	$	6,332		$	8,319		$	4,929		$	7,508		$	7,301			(24	)		(13	)	$	14,651		$	15,672			(7	)


REVENUE BY REGION (a)
Americas	$	3,935		$	4,562		$	2,872		$	3,850		$	4,118			(14	)		(4	)	$	8,497		$	8,434			1
Europe/Middle East/Africa		1,537			2,814			1,502			2,912			2,303			(45	)		(33	)		4,351			5,376			(19	)
Asia/Pacific		860			943			555			746			880			(9	)		(2	)		1,803			1,862			(3	)

Total net revenue	$	6,332		$	8,319		$	4,929		$	7,508		$	7,301			(24	)		(13	)	$	14,651		$	15,672			(7	)


(a)		Treasury & Securities Services (“TSS”) was charged a credit reimbursement related to certain exposures managed within the Investment Bank (“IB”) credit portfolio on behalf of clients shared with TSS. IB recognizes this credit reimbursement in its credit portfolio business in all other income.

(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 $401 million, $403 million, $357 million, $371 million and $334 million for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and $804 million and $699 million for year-to-date 2010 and 2009, respectively.

(c)		The second quarter and year-to-date of 2010 excludes a payroll tax expense related to the United Kingdom Bonus Payroll Tax on certain performance bonuses awarded between December 9, 2009, and April 5, 2010, to employees operating in the U.K.

Page 9


JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except headcount and ratio data)


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
SELECTED BALANCE SHEET DATA (Period-end)
Loans (a):
Loans retained (b)	$	54,049		$	53,010		$	45,544		$	55,703		$	64,500			2	%		(16	)%	$	54,049		$	64,500			(16	)%
Loans held-for-sale & loans at fair value		3,221			3,594			3,567			4,582			6,814			(10	)		(53	)		3,221			6,814			(53	)

Total loans		57,270			56,604			49,111			60,285			71,314			1			(20	)		57,270			71,314			(20	)
Equity		40,000			40,000			33,000			33,000			33,000			—			21			40,000			33,000			21

SELECTED BALANCE SHEET DATA (Average)
Total assets	$	710,005		$	676,122		$	674,241		$	678,796		$	710,825			5			—		$	693,157		$	721,934			(4	)
Trading assets — debt and equity instruments		296,031			284,085			285,363			270,695			265,336			4			12			290,091			269,146			8
Trading assets — derivative receivables		65,847			66,151			72,640			86,651			100,536			—			(35	)		65,998			112,711			(41	)
Loans (a):
Loans retained (b)		53,351			58,501			51,573			61,269			68,224			(9	)		(22	)		55,912			69,128			(19	)
Loans held-for-sale & loans at fair value		3,530			3,150			4,158			4,981			8,934			12			(60	)		3,341			10,658			(69	)

Total loans		56,881			61,651			55,731			66,250			77,158			(8	)		(26	)		59,253			79,786			(26	)
Adjusted assets (c)		527,520			506,635			519,403			515,718			531,632			4			(1	)		517,135			560,239			(8	)
Equity		40,000			40,000			33,000			33,000			33,000			—			21			40,000			33,000			21

Headcount		26,279			24,977			24,654			24,828			25,783			5			2			26,279			25,783			2

CREDIT DATA AND QUALITY STATISTICS
Net charge-offs	$	28		$	697		$	685		$	750		$	433			(96	)		(94	)	$	725		$	469			55
Nonperforming assets:
Nonperforming loans:
Nonperforming loans retained (b)(d)		1,926			2,459			3,196			4,782			3,407			(22	)		(43	)		1,926			3,407			(43	)
Nonperforming loans held-for-sale and loans at fair value		334			282			308			128			112			18			198			334			112			198

Total nonperforming loans		2,260			2,741			3,504			4,910			3,519			(18	)		(36	)		2,260			3,519			(36	)

Derivative receivables		315			363			529			624			704			(13	)		(55	)		315			704			(55	)
Assets acquired in loan satisfactions		151			185			203			248			311			(18	)		(51	)		151			311			(51	)

Total nonperforming assets		2,726			3,289			4,236			5,782			4,534			(17	)		(40	)		2,726			4,534			(40	)
Allowance for credit losses:
Allowance for loan losses		2,149			2,601			3,756			4,703			5,101			(17	)		(58	)		2,149			5,101			(58	)
Allowance for lending-related commitments		564			482			485			401			351			17			61			564			351			61

Total allowance for credit losses		2,713			3,083			4,241			5,104			5,452			(12	)		(50	)		2,713			5,452			(50	)

Net charge-off rate (b)(e)		0.21	%		4.83	%		5.27	%		4.86	%		2.55	%								2.61	%		1.37	%
Allow. for loan losses to period-end loans retained (b)(e)		3.98			4.91			8.25			8.44			7.91									3.98			7.91
Allow. for loan losses to average loans retained (b)(e)		4.03			4.45			7.28			7.68			7.48									3.84			7.38
Allow. for loan losses to nonperforming loans retained (b)(d)(e)		112			106			118			98			150									112			150
Nonperforming loans to total period-end loans		3.95			4.84			7.13			8.14			4.93									3.95			4.93
Nonperforming loans to total average loans		3.97			4.45			6.29			7.41			4.56									3.81			4.41


(a)		Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. For further details regarding the Firm’s application and impact of the new guidance, see footnote (a) on page 3.

(b)		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.

(c)		Adjusted assets, a non-GAAP financial measure, is presented to assist the reader in comparing IB’s asset and capital levels to other investment banks in the securities industry. For further discussion of adjusted assets, see page 42.

(d)		Allowance for loan losses of $617 million, $811 million, $1.3 billion, $1.8 billion and $1.6 billion were held against these non-performing loans at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively.

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

Page 10


JPMORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS, CONTINUED (in millions, except ratio and rankings data)


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
MARKET RISK — AVERAGE TRADING AND CREDIT
PORTFOLIO VAR - 95% CONFIDENCE LEVEL
Trading activities:
Fixed income	$	64		$	69		$	121		$	182		$	179			(7	)%		(64	)%	$	66		$	168			(61	) %
Foreign exchange		10			13			14			19			16			(23	)		(38	)		12			19			(37	)
Equities		20			24			21			19			50			(17	)		(60	)		22			73			(70	)
Commodities and other		20			15			17			23			22			33			(9	)		18			21			(14	)
Diversification (a)		(42	)		(49	)		(62	)		(97	)		(97	)		14			57			(46	)		(101	)		54

Total trading VaR (b)		72			72			111			146			170			—			(58	)		72			180			(60	)

Credit portfolio VaR (c)		27			19			24			29			68			42			(60	)		23			77			(70	)
Diversification (a)		(9	)		(9	)		(11	)		(32	)		(60	)		—			85			(9	)		(62	)		85

Total trading and credit portfolio VaR	$	90		$	82		$	124		$	143		$	178			10			(49	)	$	86		$	195			(56	)


	June 30, 2010 YTD					Full Year 2009
	Market					Market
	Share			Rankings		Share			Rankings
MARKET SHARES AND RANKINGS (d)
Global Investment Banking Fees (e)		8	%		#1		9	%		#1
Global debt, equity and equity-related		7	%		#1		9	%		#1
Global syndicated loans		10	%		#1		8	%		#1
Global long-term debt (f)		7	%		#2		8	%		#1
Global equity and equity-related (g)		8	%		#1		12	%		#1
Global announced M&A (h)		14	%		#4		24	%		#3
U.S. debt, equity and equity-related		12	%		#1		15	%		#1
U.S. syndicated loans		21	%		#2		22	%		#1
U.S. long-term debt (f)		11	%		#2		14	%		#1
U.S. equity and equity-related		16	%		#1		16	%		#2
U.S. announced M&A (h)		22	%		#3		36	%		#2


(a)		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.

(b)		IB Trading VaR includes predominantly all trading activities in IB, as well as syndicated lending facilities that the Firm intends to distribute; however, particular risk parameters of certain products are not fully captured, such as correlation risk. IB Trading VaR does not include the debit valuation adjustments (“DVA”) taken on derivative and structured liabilities to reflect the credit quality of the Firm.

(c)		Credit portfolio VaR includes the derivative credit valuation adjustments (“CVA”), hedges of the CVA and mark-to-market (“MTM”) hedges of the retained loan portfolio, which are all reported in principal transactions revenue. This VaR does not include the retained loan portfolio.

(d)		Source: Dealogic. Global Investment Banking fees reflects the ranking of fees and market share. The remaining rankings reflect transaction volume and market share.

(e)		Global IB fees exclude money market, short term debt and shelf deals.

(f)		Long-term debt tables include investment-grade, high-yield, supranationals, sovereigns, agencies, covered bonds, asset-backed securities and mortgage-backed securities, and excludes money market, short-term debt, and U.S.municipal securities.

(g)		Equity and equity-related rankings include rights offerings and Chinese A-Shares.

(h)		Global announced M&A is based upon transaction value at announcement; all other rankings are based upon transaction proceeds, with full credit to each book manager/equal if joint. Because of joint assignments, market share of all participants will add up to more than 100%. M&A for year-to-date 2010 and full-year 2009 reflects the removal of any withdrawn transactions. U.S. announced M&A represents any U.S. involvement ranking.

Page 11


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


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
INCOME STATEMENT
REVENUE
Lending- and deposit-related fees	$	780		$	841		$	972		$	1,046		$	1,003			(7	) %		(22	) %	$	1,621		$	1,951			(17	) %
Asset management, administration and commissions		433			452			406			408			425			(4	)		2			885			860			3
Mortgage fees and related income		886			655			481			873			807			35			10			1,541			2,440			(37	)
Credit card income		480			450			441			416			411			7			17			930			778			20
Other income		413			354			299			321			294			17			40			767			508			51

Noninterest revenue		2,992			2,752			2,599			3,064			2,940			9			2			5,744			6,537			(12	)
Net interest income		4,817			5,024			5,070			5,154			5,030			(4	)		(4	)		9,841			10,268			(4	)

TOTAL NET REVENUE		7,809			7,776			7,669			8,218			7,970			—			(2	)		15,585			16,805			(7	)

Provision for credit losses		1,715			3,733			4,229			3,988			3,846			(54	)		(55	)		5,448			7,723			(29	)

NONINTEREST EXPENSE
Compensation expense		1,842			1,770			1,722			1,728			1,631			4			13			3,612			3,262			11
Noncompensation expense		2,369			2,402			2,499			2,385			2,365			(1	)		—			4,771			4,822			(1	)
Amortization of intangibles		70			70			81			83			83			—			(16	)		140			166			(16	)

TOTAL NONINTEREST EXPENSE		4,281			4,242			4,302			4,196			4,079			1			5			8,523			8,250			3


Income/(loss) before income tax expense (benefit)		1,813			(199	)		(862	)		34			45		NM			NM				1,614			832			94
Income tax expense/(benefit)		771			(68	)		(463	)		27			30		NM			NM				703			343			105

NET INCOME/(LOSS)	$	1,042		$	(131	)	$	(399	)	$	7		$	15		NM			NM			$	911		$	489			86


FINANCIAL RATIOS
ROE		15	%		(2	) %		(6	) %		—	%		—	%								7	%		4	%
Overhead ratio		55			55			56			51			51									55			49
Overhead ratio excluding core deposit intangibles (a)		54			54			55			50			50									54			48

SELECTED BALANCE SHEET DATA (Period-end)
Assets	$	375,329		$	382,475		$	387,269		$	397,673		$	399,916			(2	)		(6	)	$	375,329		$	399,916			(6	)
Loans:
Loans retained		330,329			339,002			340,332			346,765			353,934			(3	)		(7	)		330,329			353,934			(7	)
Loans held-for-sale and loans at fair value (b)		12,599			11,296			14,612			14,303			13,192			12			(4	)		12,599			13,192			(4	)

Total loans		342,928			350,298			354,944			361,068			367,126			(2	)		(7	)		342,928			367,126			(7	)
Deposits		359,974			362,470			357,463			361,046			371,241			(1	)		(3	)		359,974			371,241			(3	)
Equity		28,000			28,000			25,000			25,000			25,000			—			12			28,000			25,000			12

SELECTED BALANCE SHEET DATA (Average)
Assets		381,906			393,867			395,045			401,620			410,228			(3	)		(7	)		387,854			416,813			(7	)
Loans:
Loans retained		335,308			342,997			343,411			349,762			359,372			(2	)		(7	)		339,131			363,127			(7	)
Loans held-for-sale and loans at fair value (b)		14,426			17,055			17,670			19,025			19,043			(15	)		(24	)		15,734			17,792			(12	)

Total loans		349,734			360,052			361,081			368,787			378,415			(3	)		(8	)		354,865			380,919			(7	)
Deposits		362,010			356,934			356,464			366,944			377,259			1			(4	)		359,486			373,788			(4	)
Equity		28,000			28,000			25,000			25,000			25,000			—			12			28,000			25,000			12

Headcount		116,879			112,616			108,971			106,951			103,733			4			13			116,879			103,733			13


(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 prior business combination transactions of $69 million, $70 million, $80 million, $83 million and $82 million for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and $139 million and $165 million for year-to-date 2010 and 2009, 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 $12.2 billion, $8.4 billion, $12.5 billion, $12.8 billion and $11.3 billion at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively. Average balances of these loans totaled $12.5 billion, $14.2 billion, $16.0 billion, $17.7 billion and $16.2 billion for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and $13.3 billion and $14.9 billion for year-to-date 2010 and 2009, respectively.

Page 12


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


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
CREDIT DATA AND QUALITY STATISTICS
Net charge-offs	$	1,761		$	2,438		$	2,738		$	2,550		$	2,649			(28	) %		(34	) %	$	4,199		$	4,825			(13	) %
Nonperforming loans:
Nonperforming loans retained		10,457			10,769			10,611			10,091			8,792			(3	)		19			10,457			8,792			19
Nonperforming loans held-for-sale and loans at fair value		176			217			234			242			203			(19	)		(13	)		176			203			(13	)

Total nonperforming loans (a) (b) (c)		10,633			10,986			10,845			10,333			8,995			(3	)		18			10,633			8,995			18
Nonperforming assets (a) (b) (c)		11,907			12,191			12,098			11,883			10,554			(2	)		13			11,907			10,554			13
Allowance for loan losses		16,152			16,200			14,776			13,286			11,832			—			37			16,152			11,832			37

Net charge-off rate (d)		2.11	%		2.88	%		3.16	%		2.89	%		2.96	%								2.50	%		2.68	%
Net charge-off rate excluding purchased credit-impaired loans (d) (e)		2.75			3.76			4.16			3.81			3.89									3.26			3.53
Allowance for loan losses to ending loans retained (d)		4.89			4.78			4.34			3.83			3.34									4.89			3.34
Allowance for loan losses to ending loans retained excluding purchased credit-impaired loans (d) (e)		5.26			5.16			5.09			4.63			4.41									5.26			4.41
Allowance for loan losses to nonperforming loans retained (a) (d) (e)		128			124			124			121			135									128			135
Nonperforming loans to total loans		3.10			3.14			3.06			2.86			2.45									3.10			2.45
Nonperforming loans to total loans excluding purchased credit-impaired loans (a)		4.00			4.05			3.96			3.72			3.19									4.00			3.19


(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) nonaccruing mortgage loans insured by U.S. government agencies of $10.1 billion, $10.5 billion, $9.0 billion, $7.0 billion and $4.2 billion at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively; (2) real estate owned insured by U.S. government agencies of $1.4 billion, $707 million, $579 million, $579 million and $508 million at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively; and (3) student loans that are 90 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program, of $447 million, $581 million, $542 million, $511 million and $473 million at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively. These amounts 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 that were acquired as part of the Washington Mutual transaction. These loans were accounted for at fair value on the acquisition date, which incorporated management’s estimate, as of that date, of credit losses over the remaining life of the portfolio. An allowance for loan losses of $2.8 billion, $2.8 billion, $1.6 billion and $1.1 billion was recorded for these loans at June 30, 2010, March 31, 2010, December 31, 2009 and September 30, 2009, respectively, which has also been excluded from applicable ratios. No allowance for loan losses was recorded at June 30, 2009. To date, no charge-offs have been recorded for these loans.

Page 13


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


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
RETAIL BANKING
Noninterest revenue	$	1,684		$	1,702		$	1,804		$	1,844		$	1,803			(1	) %		(7	) %	$	3,386		$	3,521			(4	) %
Net interest income		2,712			2,635			2,716			2,732			2,719			3			—			5,347			5,333			—

Total net revenue		4,396			4,337			4,520			4,576			4,522			1			(3	)		8,733			8,854			(1	)
Provision for credit losses		168			191			248			208			361			(12	)		(53	)		359			686			(48	)
Noninterest expense		2,633			2,577			2,574			2,646			2,557			2			3			5,210			5,137			1

Income before income tax expense		1,595			1,569			1,698			1,722			1,604			2			(1	)		3,164			3,031			4

Net income	$	914		$	898		$	1,027		$	1,043		$	970			2			(6	)	$	1,812		$	1,833			(1	)


Overhead ratio		60	%		59	%		57	%		58	%		57	%								60	%		58	%
Overhead ratio excluding core deposit intangibles (a)		58			58			55			56			55									58			56

BUSINESS METRICS (in billions)
Business banking origination volume	$	1.2		$	0.9		$	0.7		$	0.5		$	0.6			33			100		$	2.1		$	1.1			91
End-of-period loans owned		16.6			16.8			17.0			17.4			17.8			(1	)		(7	)		16.6			17.8			(7	)
End-of-period deposits:
Checking		123.5			123.8			121.9			115.5			114.1			—			8			123.5			114.1			8
Savings		161.8			163.4			153.4			151.6			150.4			(1	)		8			161.8			150.4			8
Time and other		50.5			53.2			58.0			66.6			78.9			(5	)		(36	)		50.5			78.9			(36	)

Total end-of-period deposits		335.8			340.4			333.3			333.7			343.4			(1	)		(2	)		335.8			343.4			(2	)
Average loans owned		16.7			16.9			17.2			17.7			18.0			(1	)		(7	)		16.8			18.2			(8	)
Average deposits:
Checking		123.6			119.7			116.4			114.0			114.2			3			8			121.7			111.8			9
Savings		162.8			158.6			153.1			151.2			151.2			3			8			160.7			149.6			7
Time and other		51.4			55.6			60.3			74.4			82.7			(8	)		(38	)		53.5			85.6			(38	)

Total average deposits		337.8			333.9			329.8			339.6			348.1			1			(3	)		335.9			347.0			(3	)
Deposit margin		3.05	%		3.02	%		3.06	%		2.99	%		2.92	%								3.03	%		2.89	%
Average assets	$	28.4		$	28.9		$	28.2		$	28.1		$	29.1			(2	)		(2	)	$	28.7		$	29.6			(3	)

CREDIT DATA AND QUALITY STATISTICS
Net charge-offs		168			191			248			208			211			(12	)		(20	)		359			386			(7	)
Net charge-off rate		4.04	%		4.58	%		5.72	%		4.66	%		4.70	%								4.31	%		4.28	%
Nonperforming assets	$	920		$	872		$	839		$	816		$	686			6			34		$	920		$	686			34

RETAIL BRANCH BUSINESS METRICS
Investment sales volume		5,756			5,956			5,851			6,243			5,292			(3	)		9			11,712			9,690			21

Number of:
Branches		5,159			5,155			5,154			5,126			5,203			—			(1	)		5,159			5,203			(1	)
ATMs		15,654			15,549			15,406			15,038			14,144			1			11			15,654			14,144			11
Personal bankers		20,170			19,003			17,991			16,941			15,959			6			26			20,170			15,959			26
Sales specialists		6,785			6,315			5,912			5,530			5,485			7			24			6,785			5,485			24
Active online customers (in thousands)		16,584			16,208			15,424			13,852			13,930			2			19			16,584			13,930			19
Checking accounts (in thousands)		26,351			25,830			25,712			25,546			25,252			2			4			26,351			25,252			4


(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 prior business combination transactions of $69 million, $70 million, $80 million, $83 million and $82 million for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and $139 million and $165 million for year-to-date 2010 and 2009, respectively.

Page 14


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


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
MORTGAGE BANKING & OTHER CONSUMER LENDING
Noninterest revenue (a)	$	1,256		$	1,018		$	801		$	1,201		$	1,134			23	%		11	%	$	2,274		$	3,055			(26	)%
Net interest income		792			893			802			834			721			(11	)		10			1,685			1,529			10

Total net revenue		2,048			1,911			1,603			2,035			1,855			7			10			3,959			4,584			(14	)
Provision for credit losses		175			217			242			222			366			(19	)		(52	)		392			771			(49	)
Noninterest expense		1,243			1,246			1,163			1,139			1,105			—			12			2,489			2,242			11

Income before income tax expense		630			448			198			674			384			41			64			1,078			1,571			(31	)

Net income (a)	$	364		$	257		$	266		$	412		$	235			42			55		$	621		$	965			(36	)


Overhead ratio		61	%		65	%		73	%		56	%		60	%								63	%		49	%

BUSINESS METRICS (in billions)
End-of-period loans owned:
Auto loans	$	47.5		$	47.4		$	46.0		$	44.3		$	42.9			—			11		$	47.5		$	42.9			11
Mortgage (b)		13.2			13.7			11.9			10.1			8.9			(4	)		48			13.2			8.9			48
Student loans and other		15.1			17.4			15.8			15.6			15.7			(13	)		(4	)		15.1			15.7			(4	)

Total end-of-period loans owned		75.8			78.5			73.7			70.0			67.5			(3	)		12			75.8			67.5			12
Average loans owned:
Auto loans		47.5			46.9			45.3			43.3			43.1			1			10			47.2			42.8			10
Mortgage (b)		13.6			12.5			10.6			8.9			8.4			9			62			13.0			8.0			63
Student loans and other		16.7			18.4			15.6			15.3			16.8			(9	)		(1	)		17.6			17.2			2

Total average loans owned (c)		77.8			77.8			71.5			67.5			68.3			—			14			77.8			68.0			14

CREDIT DATA AND QUALITY STATISTICS
Net charge-offs:
Auto loans		58			102			148			159			146			(43	)		(60	)		160			320			(50	)
Mortgage		13			6			—			7			2			117		NM				19			7			171
Student loans and other		150			64			92			60			101			134			49			214			135			59

Total net charge-offs		221			172			240			226			249			28			(11	)		393			462			(15	)

Net charge-off rate:
Auto loans		0.49	%		0.88	%		1.30	%		1.46	%		1.36	%								0.68	%		1.51	%
Mortgage		0.39			0.20			—			0.32			0.10									0.30			0.19
Student loans and other		4.04			1.64			2.59			1.66			2.79									2.84			1.84
Total net charge-off rate (c)		1.17			0.93			1.36			1.35			1.52									1.05			1.43

30+ day delinquency rate (d) (e)		1.42			1.47			1.75			1.76			1.80									1.42			1.80
Nonperforming assets (f)	$	866		$	1,006		$	912		$	872		$	783			(14	)		11		$	866		$	783			11


(a)		Losses related to the repurchase of previously-sold loans are recorded as a reduction of production revenue. These losses totaled $667 million, $432 million, $672 million, $465 million and $255 million for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and $1.1 billion and $475 million for year-to-date 2010 and 2009, respectively. The losses resulted in a negative impact on net income of $388 million, $252 million, $413 million, $286 million and $157 million for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and $640 million and $292 million for year-to-date 2010 and 2009, respectively.

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

(c)		Total average loans owned includes loans held-for-sale of $1.9 billion, $2.9 billion, $1.7 billion, $1.3 billion and $2.8 billion for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and $2.6 billion and $2.9 billion for year-to-date 2010 and 2009, respectively. These amounts are excluded when calculating the net charge-off rate.

(d)		Excludes mortgage loans that are insured by U.S. government agencies of $10.9 billion, $11.2 billion, $9.7 billion, $7.7 billion and $5.1 billion at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively. These amounts are excluded as reimbursement is proceeding normally.

(e)		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 $988 million, $965 million, $942 million, $903 million and $854 million at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively. These amounts are excluded as reimbursement is proceeding normally.

(f)		Nonperforming loans and assets exclude: (1) nonaccruing mortgage loans insured by U.S. government agencies of $10.1 billion, $10.5 billion, $9.0 billion, $7.0 billion and $4.2 billion at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively; (2) real estate owned insured by U.S. government agencies of $1.4 billion, $707 million, $579 million, $579 million and $508 million at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively; and (3) student loans that are 90 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program, of $447 million, $581 million, $542 million, $511 million and $473 million at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively. These amounts are excluded as reimbursement is proceeding normally.

Page 15


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


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
MORTGAGE BANKING & OTHER CONSUMER LENDING (continued)
Origination volume:
Mortgage origination volume by channel
Retail	$	15.3		$	11.4		$	12.3		$	13.3		$	14.7			34	%		4	%	$	26.7		$	28.3			(6	)%
Wholesale (a)		0.4			0.4			0.6			0.7			0.7			—			(43	)		0.8			2.3			(65	)
Correspondent (a)		14.7			16.0			20.0			21.1			21.9			(8	)		(33	)		30.7			39.9			(23	)
CNT (negotiated transactions)		1.8			3.9			1.9			2.0			3.8			(54	)		(53	)		5.7			8.3			(31	)

Total mortgage origination volume		32.2			31.7			34.8			37.1			41.1			2			(22	)		63.9			78.8			(19	)

Student loans		0.1			1.6			0.6			1.5			0.4			(94	)		(75	)		1.7			2.1			(19	)
Auto		5.8			6.3			5.9			6.9			5.3			(8	)		9			12.1			10.9			11

Application volume:
Mortgage application volume by channel
Retail		27.8			20.3			17.4			17.8			23.0			37			21			48.1			55.7			(14	)
Wholesale (a)		0.6			0.8			0.7			1.1			1.3			(25	)		(54	)		1.4			3.1			(55	)
Correspondent (a)		23.5			18.2			25.3			26.6			29.7			29			(21	)		41.7			58.9			(29	)

Total mortgage application volume		51.9			39.3			43.4			45.5			54.0			32			(4	)		91.2			117.7			(23	)


Average mortgage loans held-for-sale and loans at fair value (b)		12.6			14.5			16.2			18.0			16.7			(13	)		(25	)		13.5			15.3			(12	)
Average assets		123.2			124.8			119.5			115.2			111.6			(1	)		10			124.0			112.5			10
Third-party mortgage loans serviced (ending)		1,055.2			1,075.0			1,082.1			1,098.9			1,117.5			(2	)		(6	)		1,055.2			1,117.5			(6	)
Third-party mortgage loans serviced (average)		1,063.7			1,076.4			1,088.8			1,104.4			1,128.1			(1	)		(6	)		1,070.1			1,141.6			(6	)
MSR net carrying value (ending)		11.8			15.5			15.5			13.6			14.6			(24	)		(19	)		11.8			14.6			(19	)
Ratio of MSR net carrying value (ending) to third-party mortgage loans serviced (ending)		1.12	%		1.44	%		1.43	%		1.24	%		1.31	%								1.12	%		1.31	%

SUPPLEMENTAL MORTGAGE FEES AND RELATED INCOME DETAILS (in millions)
Production revenue	$	9		$	1		$	(192	)	$	(70	)	$	284		NM				(97	)	$	10		$	765			(99	)

Net mortgage servicing revenue:
Operating revenue:
Loan servicing revenue		1,186			1,107			1,221			1,220			1,279			7			(7	)		2,293			2,501			(8	)
Other changes in MSR asset fair value		(620	)		(605	)		(657	)		(712	)		(837	)		(2	)		26			(1,225	)		(1,910	)		36

Total operating revenue		566			502			564			508			442			13			28			1,068			591			81
Risk management:
Changes in MSR asset fair value due to inputs or assumptions in model		(3,584	)		(96	)		1,762			(1,099	)		3,831		NM			NM				(3,680	)		5,141		NM
Derivative valuation adjustments and other		3,895			248			(1,653	)		1,534			(3,750	)	NM			NM				4,143			(4,057	)	NM

Total risk management		311			152			109			435			81			105			284			463			1,084			(57	)

Total net mortgage servicing revenue		877			654			673			943			523			34			68			1,531			1,675			(9	)

Mortgage fees and related income	$	886		$	655		$	481		$	873		$	807			35			10		$	1,541		$	2,440			(37	)


Ratio of annualized loan servicing revenue to third-party mortgage loans serviced (average)		0.45	%		0.42	%		0.44	%		0.44	%		0.45	%								0.43	%		0.44	%
MSR revenue multiple (c)		2.49	x		3.43	x		3.25	x		2.82	x		2.91	x								2.60	x		2.98	x


(a)		Includes rural housing loans sourced through brokers and correspondents, which are underwritten under U.S. Department of Agriculture guidelines. Prior period amounts have been revised to conform with the current period presentation.

(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 $12.5 billion, $14.2 billion, $16.0 billion, $17.7 billion and $16.2 billion for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and $13.3 billion and $14.9 billion for year-to-date 2010 and 2009, 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 16


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


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
REAL ESTATE PORTFOLIOS
Noninterest revenue	$	52		$	32		$	(6	)	$	19		$	3			63	%	NM		%	$	84		$	(39	)	NM		%
Net interest income		1,313			1,496			1,552			1,588			1,590			(12	)		(17	)		2,809			3,406			(18	)

Total net revenue		1,365			1,528			1,546			1,607			1,593			(11	)		(14	)		2,893			3,367			(14	)
Provision for credit losses		1,372			3,325			3,739			3,558			3,119			(59	)		(56	)		4,697			6,266			(25	)
Noninterest expense		405			419			565			411			417			(3	)		(3	)		824			871			(5	)

Income/(loss) before income tax expense/(benefit)		(412	)		(2,216	)		(2,758	)		(2,362	)		(1,943	)		81			79			(2,628	)		(3,770	)		30

Net income/(loss)	$	(236	)	$	(1,286	)	$	(1,692	)	$	(1,448	)	$	(1,190	)		82			80		$	(1,522	)	$	(2,309	)		34


Overhead ratio		30	%		27	%		37	%		26	%		26	%								28	%		26	%

BUSINESS METRICS (in billions)
LOANS EXCLUDING PURCHASED CREDIT-IMPAIRED LOANS (a)
End-of-period loans owned:
Home equity	$	94.8		$	97.7		$	101.4		$	104.8		$	108.2			(3	)		(12	)	$	94.8		$	108.2			(12	)
Prime mortgage		44.6			46.8			47.5			50.0			53.2			(5	)		(16	)		44.6			53.2			(16	)
Subprime mortgage		12.6			13.2			12.5			13.3			13.8			(5	)		(9	)		12.6			13.8			(9	)
Option ARMs		8.5			8.6			8.5			8.9			9.0			(1	)		(6	)		8.5			9.0			(6	)
Other		1.0			1.0			0.7			0.7			0.9			—			11			1.0			0.9			11

Total end-of-period loans owned		161.5			167.3			170.6			177.7			185.1			(3	)		(13	)		161.5			185.1			(13	)
Average loans owned:
Home equity		96.3			99.5			103.3			106.6			110.1			(3	)		(13	)		97.9			111.7			(12	)
Prime mortgage		45.7			47.9			48.8			51.7			54.9			(5	)		(17	)		46.8			56.4			(17	)
Subprime mortgage		13.1			13.8			12.8			13.6			14.3			(5	)		(8	)		13.4			14.6			(8	)
Option ARMs		8.6			8.7			8.7			8.9			9.1			(1	)		(5	)		8.7			9.0			(3	)
Other		1.0			1.1			0.7			0.8			0.9			(9	)		11			1.0			0.9			11

Total average loans owned		164.7			171.0			174.3			181.6			189.3			(4	)		(13	)		167.8			192.6			(13	)
PURCHASED CREDIT-IMPAIRED LOANS (a)
End-of-period loans owned:
Home equity		25.5			26.0			26.5			27.1			27.7			(2	)		(8	)		25.5			27.7			(8	)
Prime mortgage		18.5			19.2			19.7			20.2			20.8			(4	)		(11	)		18.5			20.8			(11	)
Subprime mortgage		5.6			5.8			6.0			6.1			6.4			(3	)		(13	)		5.6			6.4			(13	)
Option ARMs		27.3			28.3			29.0			29.8			30.5			(4	)		(10	)		27.3			30.5			(10	)

Total end-of-period loans owned		76.9			79.3			81.2			83.2			85.4			(3	)		(10	)		76.9			85.4			(10	)
Average loans owned:
Home equity		25.7			26.2			26.7			27.4			28.0			(2	)		(8	)		26.0			28.2			(8	)
Prime mortgage		18.8			19.5			20.0			20.5			21.0			(4	)		(10	)		19.1			21.3			(10	)
Subprime mortgage		5.8			5.9			6.1			6.2			6.5			(2	)		(11	)		5.8			6.6			(12	)
Option ARMs		27.7			28.6			29.3			30.2			31.0			(3	)		(11	)		28.2			31.2			(10	)

Total average loans owned		78.0			80.2			82.1			84.3			86.5			(3	)		(10	)		79.1			87.3			(9	)
TOTAL REAL ESTATE PORTFOLIOS
End-of-period loans owned:
Home equity		120.3			123.7			127.9			131.9			135.9			(3	)		(11	)		120.3			135.9			(11	)
Prime mortgage		63.1			66.0			67.2			70.2			74.0			(4	)		(15	)		63.1			74.0			(15	)
Subprime mortgage		18.2			19.0			18.5			19.4			20.2			(4	)		(10	)		18.2			20.2			(10	)
Option ARMs		35.8			36.9			37.5			38.7			39.5			(3	)		(9	)		35.8			39.5			(9	)
Other		1.0			1.0			0.7			0.7			0.9			—			11			1.0			0.9			11

Total end-of-period loans owned		238.4			246.6			251.8			260.9			270.5			(3	)		(12	)		238.4			270.5			(12	)
Average loans owned:
Home equity		122.0			125.7			130.0			134.0			138.1			(3	)		(12	)		123.9			139.9			(11	)
Prime mortgage		64.5			67.4			68.8			72.2			75.9			(4	)		(15	)		65.9			77.7			(15	)
Subprime mortgage		18.9			19.7			18.9			19.8			20.8			(4	)		(9	)		19.2			21.2			(9	)
Option ARMs		36.3			37.3			38.0			39.1			40.1			(3	)		(9	)		36.9			40.2			(8	)
Other		1.0			1.1			0.7			0.8			0.9			(9	)		11			1.0			0.9			11

Total average loans owned		242.7			251.2			256.4			265.9			275.8			(3	)		(12	)		246.9			279.9			(12	)
Average assets		230.3			240.2			247.3			258.3			269.5			(4	)		(15	)		235.2			274.7			(14	)
Home equity origination volume		0.3			0.3			0.4			0.5			0.6			—			(50	)		0.6			1.5			(60	)


(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 lives of the loans as long as cash flows are reasonably estimable, even if the underlying loans are contractually past due.

Page 17


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


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
REAL ESTATE PORTFOLIOS (continued)
CREDIT DATA AND QUALITY STATISTICS
Net charge-offs excluding purchased credit-impaired loans (a)
Home equity	$	796		$	1,126		$	1,177		$	1,142		$	1,265			(29	)%		(37	)%	$	1,922		$	2,363			(19	)%
Prime mortgage		251			453			568			518			479			(45	)		(48	)		704			786			(10	)
Subprime mortgage		282			457			452			422			410			(38	)		(31	)		739			774			(5	)
Option ARMs		22			23			29			15			15			(4	)		47			45			19			137
Other		21			16			24			19			20			31			5			37			35			6

Total net charge-offs		1,372			2,075			2,250			2,116			2,189			(34	)		(37	)		3,447			3,977			(13	)
Net charge-off rate excluding purchased credit-impaired loans (a)
Home equity		3.32	%		4.59	%		4.52	%		4.25	%		4.61	%								3.96	%		4.27	%
Prime mortgage		2.20			3.84			4.62			3.98			3.50									3.03			2.81
Subprime mortgage		8.63			13.43			14.01			12.31			11.50									11.12			10.69
Option ARMs		1.03			1.07			1.32			0.67			0.66									1.04			0.43
Other		8.42			5.90			13.60			9.42			8.91									7.46			7.84
Total net charge-off rate excluding purchased credit-impaired loans		3.34			4.92			5.12			4.62			4.64									4.14			4.16
Net charge-off rate — reported
Home equity		2.62			3.63			3.59			3.38			3.67									3.13			3.41
Prime mortgage		1.56			2.73			3.28			2.85			2.53									2.15			2.04
Subprime mortgage		5.98			9.41			9.49			8.46			7.91									7.76			7.36
Option ARMs		0.24			0.25			0.30			0.15			0.15									0.25			0.10
Other		8.42			5.90			13.60			9.42			8.91									7.46			7.84
Total net charge-off rate — reported		2.27			3.35			3.48			3.16			3.18									2.82			2.87
30+ day delinquency rate excluding purchased credit-impaired loans (b)		6.88			7.28			7.73			7.46			6.46									6.88			6.46
Allowance for loan losses	$	14,127		$	14,127		$	12,752		$	11,261		$	9,821			—			44		$	14,127		$	9,821			44
Nonperforming assets (c)		10,121			10,313			10,347			10,196			9,085			(2	)		11			10,121			9,085			11
Allowance for loan losses to ending loans retained		5.93	%		5.73	%		5.06	%		4.32	%		3.63	%								5.93	%		3.63	%
Allowance for loan losses to ending loans retained excluding purchased credit-impaired loans (a)		7.01			6.76			6.55			5.72			5.31									7.01			5.31


(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 $2.8 billion, $2.8 billion, $1.6 billion and $1.1 billion was recorded for these loans at June 30, 2010, March 31, 2010, December 31, 2009 and September 30, 2009, respectively, which has also been excluded from the applicable ratios. No allowance for loan losses was recorded at June 30, 2009. To date, no charge-offs have been recorded for these loans.

(b)		The delinquency rate for purchased credit-impaired loans was 27.91%, 28.49%, 27.79%, 25.56% and 23.37% at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively.

(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 18


JPMORGAN CHASE & CO.
CARD SERVICES — MANAGED BASIS
FINANCIAL HIGHLIGHTS
(in millions, except ratio data and where otherwise noted)


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
INCOME STATEMENT (a)
REVENUE
Credit card income	$	908		$	813		$	931		$	916		$	921			12	%		(1	)%	$	1,721		$	1,765			(2	)%
All other income		(47	)		(55	)		(46	)		(85	)		(364	)		15			87			(102	)		(561	)		82

Noninterest revenue		861			758			885			831			557			14			55			1,619			1,204			34
Net interest income		3,356			3,689			4,263			4,328			4,311			(9	)		(22	)		7,045			8,793			(20	)

TOTAL NET REVENUE		4,217			4,447			5,148			5,159			4,868			(5	)		(13	)		8,664			9,997			(13	)

Provision for credit losses		2,221			3,512			4,239			4,967			4,603			(37	)		(52	)		5,733			9,256			(38	)

NONINTEREST EXPENSE
Compensation expense		327			330			336			354			329			(1	)		(1	)		657			686			(4	)
Noncompensation expense		986			949			938			829			873			4			13			1,935			1,723			12
Amortization of intangibles		123			123			122			123			131			—			(6	)		246			270			(9	)

TOTAL NONINTEREST EXPENSE		1,436			1,402			1,396			1,306			1,333			2			8			2,838			2,679			6


Income/(loss) before income tax expense/(benefit)		560			(467	)		(487	)		(1,114	)		(1,068	)	NM			NM				93			(1,938	)	NM
Income tax expense/(benefit)		217			(164	)		(181	)		(414	)		(396	)	NM			NM				53			(719	)	NM

NET INCOME/(LOSS)	$	343		$	(303	)	$	(306	)	$	(700	)	$	(672	)	NM			NM			$	40		$	(1,219	)	NM


Memo: Net securitization income/(loss)		N/A			N/A		$	17		$	(43	)	$	(268	)	NM			NM				N/A		$	(448	)	NM

FINANCIAL RATIOS (a)
ROE		9	%		(8	)%		(8	)%		(19	)%		(18	)%								1	%		(16	)%
Overhead ratio		34			32			27			25			27									33			27
Percentage of average outstandings:
Net interest income		9.20			9.60			10.36			10.15			9.93									9.41			9.92
Provision for credit losses		6.09			9.14			10.30			11.65			10.60									7.66			10.44
Noninterest revenue		2.36			1.97			2.15			1.95			1.28									2.16			1.36
Risk adjusted margin (b)		5.47			2.43			2.21			0.45			0.61									3.91			0.84
Noninterest expense		3.94			3.65			3.39			3.06			3.07									3.79			3.02
Pretax income/(loss) (ROO) (c)		1.54			(1.22	)		(1.18	)		(2.61	)		(2.46	)								0.12			(2.19	)
Net income/(loss)		0.94			(0.79	)		(0.74	)		(1.64	)		(1.55	)								0.05			(1.38	)

BUSINESS METRICS
Sales volume (in billions)	$	78.1		$	69.4		$	78.8		$	74.7		$	74.0			13			6		$	147.5		$	140.6			5
New accounts opened (in millions)		2.7			2.5			3.2			2.4			2.4			8			13			5.2			4.6			13
Open accounts (in millions)		88.9			88.9			93.3			93.6			100.3			—			(11	)		88.9			100.3			(11	)

Merchant acquiring business
Bank card volume (in billions)	$	117.1		$	108.0		$	110.4		$	103.5		$	101.4			8			15		$	225.1		$	195.8			15
Total transactions (in billions)		5.0			4.7			4.9			4.5			4.5			6			11			9.7			8.6			13


(a)		Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. For further details regarding the Firm’s application and impact of the new guidance, see footnote (a) on page 3.

(b)		Represents total net revenue less provision for credit losses.

(c)		Pretax return on average managed outstandings.

N/A:		Not applicable.

Page 19


JPMORGAN CHASE & CO.
CARD SERVICES — MANAGED BASIS
FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except headcount and ratio data)


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
SELECTED BALANCE SHEET DATA (Period-end)
Loans:
Loans on balance sheets	$	142,994		$	149,260		$	78,786		$	78,215		$	85,736			(4	)%		67	%	$	142,994		$	85,736			67	%
Securitized loans (a)		N/A			N/A			84,626			87,028			85,790		NM			NM				N/A			85,790		NM

Total loans		142,994			149,260			163,412			165,243			171,526			(4	)		(17	)		142,994			171,526			(17	)

Equity		15,000			15,000			15,000			15,000			15,000			—			—			15,000			15,000			—

SELECTED BALANCE SHEET DATA (Average)
Managed assets		146,816			156,968			184,535			192,141			193,310			(6	)		(24	)		151,864			197,234			(23	)
Loans:
Loans on balance sheets		146,302			155,790			77,759			83,146			89,692			(6	)		63			151,020			93,715			61
Securitized loans (a)		N/A			N/A			85,452			86,017			84,417		NM			NM				N/A			85,015		NM

Total average loans		146,302			155,790			163,211			169,163			174,109			(6	)		(16	)		151,020			178,730			(16	)

Equity		15,000			15,000			15,000			15,000			15,000			—			—			15,000			15,000			—

Headcount		21,529			22,478			22,676			22,850			22,897			(4	)		(6	)		21,529			22,897			(6	)

CREDIT QUALITY STATISTICS (a)
Net charge-offs	$	3,721		$	4,512		$	3,839		$	4,392		$	4,353			(18	)		(15	)	$	8,233		$	7,846			5
Net charge-off rate (b)		10.20	%		11.75	%		9.33	%		10.30	%		10.03	%								10.99	%		8.85	%

Delinquency rates
30+ day (b)		4.96	%		5.62	%		6.28	%		5.99	%		5.86	%								4.96	%		5.86	%
90+ day (b)		2.76			3.15			3.59			2.76			3.25									2.76			3.25

Allowance for loan losses (c)	$	14,524		$	16,032		$	9,672		$	9,297		$	8,839			(9	)		64		$	14,524		$	8,839			64
Allowance for loan losses to period-end loans (c) (d)		10.16	%		10.74	%		12.28	%		11.89	%		10.31	%								10.16	%		10.31	%

KEY STATS — WASHINGTON MUTUAL ONLY
Loans	$	15,615		$	17,204		$	19,653		$	21,163		$	23,093			(9	)		(32	)	$	15,615		$	23,093			(32	)
Average loans		16,455			18,607			20,377			22,287			24,418			(12	)		(33	)		17,525			25,990			(33	)
Net interest income (e)		14.97	%		15.06	%		17.12	%		17.04	%		17.90	%								15.02	%		17.14	%
Risk adjusted margin (e) (f)		15.43			2.47			(0.66	)		(4.45	)		(3.89	)								8.59			0.49
Net charge-off rate (g)		19.53			24.14			20.49			21.94			19.17									21.97			16.75
30+ day delinquency rate (g)		8.86			10.49			12.72			12.44			11.98									8.86			11.98
90+ day delinquency rate (g)		5.17			6.32			7.76			6.21			6.85									5.17			6.85

KEY STATS — EXCLUDING WASHINGTON MUTUAL
Loans	$	127,379		$	132,056		$	143,759		$	144,080		$	148,433			(4	)		(14	)	$	127,379		$	148,433			(14	)
Average loans		129,847			137,183			142,834			146,876			149,691			(5	)		(13	)		133,495			152,740			(13	)
Net interest income (e)		8.47	%		8.86	%		9.40	%		9.10	%		8.63	%								8.67	%		8.69	%
Risk adjusted margin (e) (f)		4.21			2.43			2.62			1.19			1.34									3.30			0.89
Net charge-off rate		9.02			10.54			8.64			9.41			8.97									9.80			7.90
30+ day delinquency rate		4.48			4.99			5.52			5.38			5.27									4.48			5.27
90+ day delinquency rate		2.47			2.74			3.13			2.48			2.90									2.47			2.90


(a)		Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. As a result of the consolidation of the credit card securitization trusts, reported and managed basis relating to credit card securitizations are equivalent for periods beginning after January 1, 2010. For further details regarding the Firm’s application and impact of the new guidance, see footnote (a) on page 3.

(b)		Results reflect the impact of purchase accounting adjustments related to the Washington Mutual transaction and the consolidation of the Washington Mutual Master Trust. Net charge-off rate is not impacted in the quarter ended June 30, 2010. Delinquency rates for June 30, 2010 and March 31, 2010 are not impacted.

(c)		Based on loans on the Consolidated Balance Sheets.

(d)		Includes $1.0 billion, $3.0 billion and $5.0 billion of loans at December 31, 2009, September 30, 2009 and June 30, 2009, respectively, held by the Washington Mutual Master Trust, which were consolidated onto the Card Services balance sheet at fair value during the second quarter of 2009. No allowance for loan losses was recorded for these loans as of December 31, 2009, September 30, 2009 and June 30, 2009. Excluding these loans, the allowance for loan losses to period-end loans would have been 12.43%, 12.36% and 10.95%, respectively.

(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. Net charge-off rate is not impacted in the quarter ended June 30, 2010. Delinquency rates for June 30, 2010 and March 31, 2010 are not impacted.

N/A:		Not applicable.

Page 20


JPMORGAN CHASE & CO.
CARD RECONCILIATION OF REPORTED AND MANAGED DATA
(in millions, except ratio data)


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
INCOME STATEMENT DATA
Credit card income
Reported	$	908		$	813		$	1,306		$	1,201		$	1,215			12	%		(25	)%	$	1,721		$	2,599			(34	)%
Securitization adjustments (a)		N/A			N/A			(375	)		(285	)		(294	)	NM			NM				N/A			(834	)	NM

Managed credit card income	$	908		$	813		$	931		$	916		$	921			12			(1	)	$	1,721		$	1,765			(2	)


Net interest income
Reported	$	3,356		$	3,689		$	2,271		$	2,345		$	2,353			(9	)		43		$	7,045		$	4,831			46
Securitization adjustments (a)		N/A			N/A			1,992			1,983			1,958		NM			NM				N/A			3,962		NM

Managed net interest income	$	3,356		$	3,689		$	4,263		$	4,328		$	4,311			(9	)		(22	)	$	7,045		$	8,793			(20	)


Total net revenue
Reported	$	4,217		$	4,447		$	3,531		$	3,461		$	3,204			(5	)		32		$	8,664		$	6,869			26
Securitization adjustments (a)		N/A			N/A			1,617			1,698			1,664		NM			NM				N/A			3,128		NM

Managed total net revenue	$	4,217		$	4,447		$	5,148		$	5,159		$	4,868			(5	)		(13	)	$	8,664		$	9,997			(13	)


Provision for credit losses
Reported	$	2,221		$	3,512		$	2,622		$	3,269		$	2,939			(37	)		(24	)	$	5,733		$	6,128			(6	)
Securitization adjustments (a)		N/A			N/A			1,617			1,698			1,664		NM			NM				N/A			3,128		NM

Managed provision for credit losses	$	2,221		$	3,512		$	4,239		$	4,967		$	4,603			(37	)		(52	)	$	5,733		$	9,256			(38	)


BALANCE SHEETS — AVERAGE BALANCES
Total average assets
Reported	$	146,816		$	156,968		$	102,748		$	109,362		$	111,722			(6	)		31		$	151,864		$	115,052			32
Securitization adjustments (a)		N/A			N/A			81,787			82,779			81,588		NM			NM				N/A			82,182		NM

Managed average assets	$	146,816		$	156,968		$	184,535		$	192,141		$	193,310			(6	)		(24	)	$	151,864		$	197,234			(23	)


CREDIT QUALITY STATISTICS
Net charge-offs
Reported	$	3,721		$	4,512		$	2,222		$	2,694		$	2,689			(18	)		38		$	8,233		$	4,718			75
Securitization adjustments (a)		N/A			N/A			1,617			1,698			1,664		NM			NM				N/A			3,128		NM

Managed net charge-offs	$	3,721		$	4,512		$	3,839		$	4,392		$	4,353			(18	)		(15	)	$	8,233		$	7,846			5


Net charge-off rates
Reported		10.20	%		11.75	%		11.34	%		12.85	%		12.03	%								10.99	%		10.15	%
Securitized (a)		N/A			N/A			7.51			7.83			7.91									N/A			7.42
Managed net charge-off rate		10.20			11.75			9.33			10.30			10.03									10.99			8.85


(a)		Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. As a result of the consolidation of the credit card securitization trusts, reported and managed basis relating to credit card securitizations are equivalent for periods beginning after January 1, 2010. For further details regarding the Firm’s application and impact of the new guidance, see footnote (a) on page 3.

N/A:		Not applicable.

Page 21


JPMORGAN CHASE & CO.
COMMERCIAL BANKING
FINANCIAL HIGHLIGHTS
(in millions, except ratio data)


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
INCOME STATEMENT
REVENUE
Lending- and deposit-related fees	$	280		$	277		$	279		$	269		$	270			1	%		4	%	$	557		$	533			5	%
Asset management, administration and commissions		36			37			35			35			36			(3	)		—			73			70			4
All other income (a)		230			186			149			170			152			24			51			416			277			50

Noninterest revenue		546			500			463			474			458			9			19			1,046			880			19
Net interest income		940			916			943			985			995			3			(6	)		1,856			1,975			(6	)

TOTAL NET REVENUE (b)		1,486			1,416			1,406			1,459			1,453			5			2			2,902			2,855			2

Provision for credit losses		(235	)		214			494			355			312		NM			NM				(21	)		605		NM

NONINTEREST EXPENSE
Compensation expense		196			206			183			196			197			(5	)		(1	)		402			397			1
Noncompensation expense		337			324			351			339			327			4			3			661			669			(1	)
Amortization of intangibles		9			9			9			10			11			—			(18	)		18			22			(18	)

TOTAL NONINTEREST EXPENSE		542			539			543			545			535			1			1			1,081			1,088			(1	)


Income before income tax expense		1,179			663			369			559			606			78			95			1,842			1,162			59
Income tax expense		486			273			145			218			238			78			104			759			456			66

NET INCOME	$	693		$	390		$	224		$	341		$	368			78			88		$	1,083		$	706			53


Revenue by product:
Lending	$	649		$	658		$	639		$	675		$	684			(1	)		(5	)	$	1,307		$	1,349			(3	)
Treasury services		665			638			645			672			679			4			(2	)		1,303			1,325			(2	)
Investment banking		115			105			108			99			114			10			1			220			187			18
Other		57			15			14			13			(24	)		280		NM				72			(6	)	NM

Total Commercial Banking revenue	$	1,486		$	1,416		$	1,406		$	1,459		$	1,453			5			2		$	2,902		$	2,855			2


IB revenue, gross (c)	$	333		$	311		$	328		$	301		$	328			7			2		$	644		$	534			21


Revenue by client segment:
Middle Market Banking	$	767		$	746		$	760		$	771		$	772			3			(1	)	$	1,513		$	1,524			(1	)
Commercial Term Lending		237			229			191			232			224			3			6			466			452			3
Mid-Corporate Banking		285			263			277			278			305			8			(7	)		548			547			—
Real Estate Banking		125			100			100			121			120			25			4			225			240			(6	)
Other		72			78			78			57			32			(8	)		125			150			92			63

Total Commercial Banking revenue	$	1,486		$	1,416		$	1,406		$	1,459		$	1,453			5			2		$	2,902		$	2,855			2


FINANCIAL RATIOS
ROE		35	%		20	%		11	%		17	%		18	%								27	%		18	%
Overhead ratio		36			38			39			37			37									37			38


(a)		Revenue from investment banking products sold to Commercial Banking (“CB”) clients and commercial card revenue is included in all other income.

(b)		Total net revenue included tax-equivalent adjustments from income tax credits related to equity investments in designated community development entities that provide loans to qualified businesses in low-income communities as well as tax-exempt income from municipal bond activity of $49 million, $45 million, $53 million, $43 million and $39 million for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and $94 million and $74 million for year-to-date 2010 and 2009, respectively.

(c)		Represents the total revenue related to investment banking products sold to CB clients.

Page 22


JPMORGAN CHASE & CO.
COMMERCIAL BANKING
FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except ratio and headcount data)


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
SELECTED BALANCE SHEET DATA (Period-end)
Loans:
Loans retained	$	95,090		$	95,435		$	97,108		$	101,608		$	105,556			—	%		(10	)%	$	95,090		$	105,556			(10	)%
Loans held-for-sale and loans at fair value		446			294			324			288			296			52			51			446			296			51

Total loans		95,536			95,729			97,432			101,896			105,852			—			(10	)		95,536			105,852			(10	)
Equity		8,000			8,000			8,000			8,000			8,000			—			—			8,000			8,000			—

SELECTED BALANCE SHEET DATA (Average)
Total assets	$	133,309		$	133,013		$	129,948		$	130,316		$	137,283			—			(3	)	$	133,162		$	140,771			(5	)
Loans:
Loans retained		95,521			96,317			99,794			103,752			108,750			(1	)		(12	)		95,917			111,146			(14	)
Loans held-for-sale and loans at fair value		391			297			386			297			288			32			36			344			292			18

Total loans		95,912			96,614			100,180			104,049			109,038			(1	)		(12	)		96,261			111,438			(14	)
Liability balances (a)		136,770			133,142			122,471			109,293			105,829			3			29			134,966			110,377			22
Equity		8,000			8,000			8,000			8,000			8,000			—			—			8,000			8,000			—

Average loans by client segment:
Middle Market Banking	$	34,424		$	33,919		$	34,794		$	36,200		$	38,193			1			(10	)	$	34,173		$	39,453			(13	)
Commercial Term Lending		35,956			36,057			36,507			36,943			36,963			—			(3	)		36,006			36,889			(2	)
Mid-Corporate Banking		11,875			12,258			13,510			14,933			17,012			(3	)		(30	)		12,065			17,710			(32	)
Real Estate Banking		9,814			10,438			11,133			11,547			12,347			(6	)		(21	)		10,124			12,803			(21	)
Other		3,843			3,942			4,236			4,426			4,523			(3	)		(15	)		3,893			4,583			(15	)

Total Commercial Banking loans	$	95,912		$	96,614		$	100,180		$	104,049		$	109,038			(1	)		(12	)	$	96,261		$	111,438			(14	)


Headcount		4,808			4,701			4,151			4,177			4,228			2			14			4,808			4,228			14

CREDIT DATA AND QUALITY STATISTICS
Net charge-offs	$	176		$	229		$	483		$	291		$	181			(23	)		(3	)	$	405		$	315			29
Nonperforming loans:
Nonperforming loans retained (b)		3,036			2,947			2,764			2,284			2,090			3			45			3,036			2,090			45
Nonperforming loans held-for-sale and loans at fair value		41			49			37			18			21			(16	)		95			41			21			95

Total nonperforming loans		3,077			2,996			2,801			2,302			2,111			3			46			3,077			2,111			46
Nonperforming assets		3,285			3,186			2,989			2,461			2,255			3			46			3,285			2,255			46
Allowance for credit losses:
Allowance for loan losses		2,686			3,007			3,025			3,063			3,034			(11	)		(11	)		2,686			3,034			(11	)
Allowance for lending-related commitments		267			359			349			300			272			(26	)		(2	)		267			272			(2	)

Total allowance for credit losses		2,953			3,366			3,374			3,363			3,306			(12	)		(11	)		2,953			3,306			(11	)

Net charge-off rate		0.74	%		0.96	%		1.92	%		1.11	%		0.67	%								0.85	%		0.57	%
Allowance for loan losses to period-end loans retained		2.82			3.15			3.12			3.01			2.87									2.82			2.87
Allowance for loan losses to average loans retained		2.81			3.12			3.03			2.95			2.79									2.80			2.73
Allowance for loan losses to nonperforming loans retained		88			102			109			134			145									88			145
Nonperforming loans to total period-end loans		3.22			3.13			2.87			2.26			1.99									3.22			1.99
Nonperforming loans to total average loans		3.21			3.10			2.80			2.21			1.94									3.20			1.89


(a)		Liability balances include deposits, as well as deposits that are swept to on—balance sheet liabilities (e.g., commercial paper, federal funds purchased, time deposits and securities loaned or sold under repurchase agreements) as part of customer cash management programs.

(b)		Allowance for loan losses of $586 million, $612 million, $581 million, $496 million and $460 million were held against nonperforming loans retained at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively.

Page 23


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


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
INCOME STATEMENT
REVENUE
Lending- and deposit-related fees	$	313		$	311		$	330		$	316		$	314			1	%		—	%	$	624		$	639			(2	)%
Asset management, administration and commissions		705			659			675			620			710			7			(1	)		1,364			1,336			2
All other income		209			176			212			201			221			19			(5	)		385			418			(8	)

Noninterest revenue		1,227			1,146			1,217			1,137			1,245			7			(1	)		2,373			2,393			(1	)
Net interest income		654			610			618			651			655			7			—			1,264			1,328			(5	)

TOTAL NET REVENUE		1,881			1,756			1,835			1,788			1,900			7			(1	)		3,637			3,721			(2	)

Provision for credit losses		(16	)		(39	)		53			13			(5	)		59			(220	)		(55	)		(11	)		(400	)
Credit reimbursement to IB (a)		(30	)		(30	)		(30	)		(31	)		(30	)		—			—			(60	)		(60	)		—

NONINTEREST EXPENSE
Compensation expense		697			657			668			629			618			6			13			1,354			1,247			9
Noncompensation expense		684			650			704			633			650			5			5			1,334			1,321			1
Amortization of intangibles		18			18			19			18			20			—			(10	)		36			39			(8	)

TOTAL NONINTEREST EXPENSE		1,399			1,325			1,391			1,280			1,288			6			9			2,724			2,607			4


Income before income tax expense		468			440			361			464			587			6			(20	)		908			1,065			(15	)
Income tax expense		176			161			124			162			208			9			(15	)		337			378			(11	)

NET INCOME	$	292		$	279		$	237		$	302		$	379			5			(23	)	$	571		$	687			(17	)


REVENUE BY BUSINESS
Treasury Services	$	926		$	882		$	918		$	919		$	934			5			(1	)	$	1,808		$	1,865			(3	)
Worldwide Securities Services		955			874			917			869			966			9			(1	)		1,829			1,856			(1	)

TOTAL NET REVENUE	$	1,881		$	1,756		$	1,835		$	1,788		$	1,900			7			(1	)	$	3,637		$	3,721			(2	)


FINANCIAL RATIOS
ROE		18	%		17	%		19	%		24	%		30	%								18	%		28	%
Overhead ratio		74			75			76			72			68									75			70
Pretax margin ratio (b)		25			25			20			26			31									25			29

SELECTED BALANCE SHEET DATA (Period-end)
Loans (c)	$	24,513		$	24,066		$	18,972		$	19,693		$	17,929			2			37		$	24,513		$	17,929			37
Equity		6,500			6,500			5,000			5,000			5,000			—			30			6,500			5,000			30

SELECTED BALANCE SHEET DATA (Average)
Total assets	$	42,868		$	38,273		$	36,589		$	33,117		$	35,520			12			21		$	40,583		$	37,092			9
Loans (c)		22,137			19,578			18,888			17,062			17,524			13			26			20,865			18,825			11
Liability balances (d)		246,690			247,905			250,695			231,502			234,163			—			5			247,294			255,208			(3	)
Equity		6,500			6,500			5,000			5,000			5,000			—			30			6,500			5,000			30

Headcount		27,943			27,223			26,609			26,389			27,252			3			3			27,943			27,252			3


(a)		IB credit portfolio group manages certain exposures on behalf of clients shared with TSS. TSS reimburses IB for a portion of the total cost of managing the credit portfolio. IB recognizes this credit reimbursement as a component of noninterest revenue.

(b)		Pretax margin represents income before income tax expense divided by total net revenue, which is a measure of pretax performance and another basis by which management evaluates its performance and that of its competitors.

(c)		Loan balances include wholesale overdrafts, commercial card and trade finance loans.

(d)		Liability balances include deposits, as well as deposits that are swept to on—balance sheet liabilities (e.g., commercial paper, federal funds purchased, time deposits and securities loaned or sold under repurchase agreements) as part of customer cash management programs.

Page 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
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
TSS FIRMWIDE DISCLOSURES
TS revenue — reported	$	926		$	882		$	918		$	919		$	934			5	%		(1	)%	$	1,808		$	1,865			(3	)%
TS revenue reported in CB		665			638			645			672			679			4			(2	)		1,303			1,325			(2	)
TS revenue reported in other lines of business		62			56			57			63			63			11			(2	)		118			125			(6	)

TS firmwide revenue (a)		1,653			1,576			1,620			1,654			1,676			5			(1	)		3,229			3,315			(3	)
Worldwide Securities Services revenue		955			874			917			869			966			9			(1	)		1,829			1,856			(1	)

TSS firmwide revenue (a)	$	2,608		$	2,450		$	2,537		$	2,523		$	2,642			6			(1	)	$	5,058		$	5,171			(2	)


TS firmwide liability balances (average) (b)	$	303,224		$	305,105		$	289,024		$	261,059		$	258,312			(1	)		17		$	304,159		$	273,892			11
TSS firmwide liability balances (average) (b)		383,460			381,047			373,166			340,795			339,992			1			13			382,260			365,584			5

TSS FIRMWIDE FINANCIAL RATIOS
TS firmwide overhead ratio (c)		54	%		55	%		54	%		52	%		51	%								55	%		52	%
TSS firmwide overhead ratio (c)		64			65			66			62			59									65			61

FIRMWIDE BUSINESS METRICS
Assets under custody (in billions)	$	14,857		$	15,283		$	14,885		$	14,887		$	13,748			(3	)		8		$	14,857		$	13,748			8

Number of:
US$ ACH transactions originated (in millions)		970			949			975			965			978			2			(1	)		1,919			1,956			(2	)
Total US$ clearing volume (in thousands)		30,531			28,669			29,493			28,604			28,193			6			8			59,200			55,379			7
International electronic funds transfer volume (in thousands) (d)		58,484			55,754			53,354			48,533			47,096			5			24			114,238			91,461			25
Wholesale check volume (in millions)		526			478			514			530			572			10			(8	)		1,004			1,140			(12	)
Wholesale cards issued (in thousands) (e)		28,066			27,352			27,138			26,977			25,501			3			10			28,066			25,501			10

CREDIT DATA AND QUALITY STATISTICS
Net charge-offs	$	—		$	—		$	—		$	—		$	17			—		NM			$	—		$	19		NM
Nonperforming loans		14			14			14			14			14			—			—			14			14			—
Allowance for credit losses:
Allowance for loan losses		48			57			88			15			15			(16	)		220			48			15			220
Allowance for lending-related commitments		68			76			84			104			92			(11	)		(26	)		68			92			(26	)

Total allowance for credit losses		116			133			172			119			107			(13	)		8			116			107			8

Net charge-offs rate		—	%		—	%		—	%		—	%		0.39	%								—	%		0.20	%
Allowance for loan losses to period-end loans		0.20			0.24			0.46			0.08			0.08									0.20			0.08
Allowance for loan losses to average loans		0.22			0.29			0.47			0.09			0.09									0.23			0.08
Allowance for loan losses to nonperforming loans		343			407		NM				107			107									343			107
Nonperforming loans to period-end loans		0.06			0.06			0.07			0.07			0.08									0.06			0.08
Nonperforming loans to average loans		0.06			0.07			0.07			0.08			0.08									0.07			0.07


(a)		TSS firmwide revenue includes foreign exchange (“FX”) revenue recorded in TSS and FX revenue associated with TSS customers who are FX customers of IB. However, some of the FX revenue associated with TSS customers who are FX customers of IB is not included in TS and TSS firmwide revenue. The total FX revenue generated was $175 million, $137 million, $162 million, $154 million and $191 million for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and $312 million and $345 million for year-to-date 2010 and 2009, respectively.

(b)		Firmwide liability balances include liability balances recorded in CB.

(c)		Overhead ratios have been calculated based on firmwide revenue and TSS and TS expense, respectively, including those allocated to certain other lines of business. FX revenue and expense recorded in IB for TSS-related FX activity are not included in this ratio.

(d)		International electronic funds transfer includes non-U.S. dollar Automated Clearing House (“ACH”) and clearing volume.

(e)		Wholesale cards issued and outstanding include U.S. domestic commercial, stored value, prepaid and government electronic benefit card products.

Page 25


JPMORGAN CHASE & CO.
ASSET MANAGEMENT
FINANCIAL HIGHLIGHTS
(in millions, except ratio, ranking and headcount data)


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
INCOME STATEMENT
REVENUE
Asset management, administration and commissions	$	1,522		$	1,508		$	1,632		$	1,443		$	1,315			1	%		16	%	$	3,030		$	2,546			19	%
All other income		177			266			191			238			253			(33	)		(30	)		443			322			38

Noninterest revenue		1,699			1,774			1,823			1,681			1,568			(4	)		8			3,473			2,868			21
Net interest income		369			357			372			404			414			3			(11	)		726			817			(11	)

TOTAL NET REVENUE		2,068			2,131			2,195			2,085			1,982			(3	)		4			4,199			3,685			14

Provision for credit losses		5			35			58			38			59			(86	)		(92	)		40			92			(57	)

NONINTEREST EXPENSE
Compensation expense		861			910			907			858			810			(5	)		6			1,771			1,610			10
Noncompensation expense		527			514			543			474			525			3			—			1,041			1,004			4
Amortization of intangibles		17			18			20			19			19			(6	)		(11	)		35			38			(8	)

TOTAL NONINTEREST EXPENSE		1,405			1,442			1,470			1,351			1,354			(3	)		4			2,847			2,652			7


Income before income tax expense		658			654			667			696			569			1			16			1,312			941			39
Income tax expense		267			262			243			266			217			2			23			529			365			45

NET INCOME	$	391		$	392		$	424		$	430		$	352			—			11		$	783		$	576			36


REVENUE BY CLIENT SEGMENT
Private Bank	$	695		$	698		$	723		$	639		$	640			—			9		$	1,393		$	1,223			14
Retail		482			415			445			471			411			16			17			897			664			35
Institutional		433			566			584			534			487			(23	)		(11	)		999			947			5
Private Wealth Management		348			343			331			339			334			1			4			691			646			7
JPMorgan Securities (a)		110			109			112			102			110			1			—			219			205			7

TOTAL NET REVENUE	$	2,068		$	2,131		$	2,195		$	2,085		$	1,982			(3	)		4		$	4,199		$	3,685			14


FINANCIAL RATIOS
ROE		24	%		24	%		24	%		24	%		20	%								24	%		17	%
Overhead ratio		68			68			67			65			68									68			72
Pretax margin ratio (b)		32			31			30			33			29									31			26

SELECTED BALANCE SHEET DATA (Period-end)
Loans	$	38,744		$	37,088		$	37,755		$	35,925		$	35,474			4			9		$	38,744		$	35,474			9
Equity		6,500			6,500			7,000			7,000			7,000			—			(7	)		6,500			7,000			(7	)

SELECTED BALANCE SHEET DATA (Average)
Total assets	$	63,426		$	62,525		$	63,036		$	60,345		$	59,334			1			7		$	62,978		$	58,783			7
Loans		37,407			36,602			36,137			34,822			34,292			2			9			37,007			34,438			7
Deposits		86,453			80,662			77,352			73,649			75,355			7			15			83,573			78,534			6
Equity		6,500			6,500			7,000			7,000			7,000			—			(7	)		6,500			7,000			(7	)

Headcount		16,019			15,321			15,136			14,919			14,840			5			8			16,019			14,840			8


(a)		JPMorgan Securities was formerly known as Bear Stearns Private Client Services prior to January 1, 2010.

(b)		Pretax margin represents income before income tax expense divided by total net revenue, which is a measure of pretax performance and another basis by which management evaluates its performance and that of its competitors.

Page 26


JPMORGAN CHASE & CO.
ASSET MANAGEMENT
FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except ratio, ranking and headcount data)


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
BUSINESS METRICS
Number of:
Client advisors		2,055			1,987			1,934			1,891			1,838			3	%		12	%		2,055			1,838			12	%
Retirement planning services participants (in thousands)		1,653			1,651			1,628			1,620			1,595			—			4			1,653			1,595			4
JPMorgan Securities brokers (a)		402			390			376			365			362			3			11			402			362			11
% of customer assets in 4 & 5 Star Funds (b)		43	%		43	%		42	%		39	%		45	%		—			(4	)		43	%		45	%		(4	)
% of AUM in 1^stand 2^nd quartiles: (c)
1 year		58	%		55	%		57	%		60	%		62	%		5			(6	)		58	%		62	%		(6	)
3 years		67	%		67	%		62	%		70	%		69	%		—			(3	)		67	%		69	%		(3	)
5 years		78	%		77	%		74	%		74	%		80	%		1			(3	)		78	%		80	%		(3	)

CREDIT DATA AND QUALITY STATISTICS
Net charge-offs	$	27		$	28		$	35		$	17		$	46			(4	)		(41	)	$	55		$	65			(15	)
Nonperforming loans		309			475			580			409			313			(35	)		(1	)		309			313			(1	)
Allowance for credit losses:
Allowance for loan losses		250			261			269			251			226			(4	)		11			250			226			11
Allowance for lending-related commitments		3			13			9			5			4			(77	)		(25	)		3			4			(25	)

Total allowance for credit losses		253			274			278			256			230			(8	)		10			253			230			10
Net charge-off rate		0.29	%		0.31	%		0.38	%		0.19	%		0.54	%								0.30	%		0.38	%
Allowance for loan losses to period-end loans		0.65			0.70			0.71			0.70			0.64									0.65			0.64
Allowance for loan losses to average loans		0.67			0.71			0.74			0.72			0.66									0.68			0.66
Allowance for loan losses to nonperforming loans		81			55			46			61			72									81			72
Nonperforming loans to period-end loans		0.80			1.28			1.54			1.14			0.88									0.80			0.88
Nonperforming loans to average loans		0.83			1.30			1.61			1.17			0.91									0.83			0.91


(a)		JPMorgan Securities was formerly known as Bear Stearns Private Client Services prior to January 1, 2010.

(b)		Derived from Morningstar for the United States, the United Kingdom, Luxembourg, France, Hong Kong and Taiwan; and Nomura for Japan.

(c)		Quartile ranking sourced from Lipper for the United States and Taiwan; Morningstar for the United Kingdom, Luxembourg, France and Hong Kong; and Nomura for Japan.

Page 27


JPMORGAN CHASE & CO.
ASSET MANAGEMENT
FINANCIAL HIGHLIGHTS, CONTINUED
(in billions)


											June 30, 2010
											Change
	Jun 30		Mar 31		Dec 31		Sep 30		Jun 30		Mar 31			Jun 30
	2010		2010		2009		2009		2009		2010			2009
ASSETS UNDER SUPERVISION (a)
Assets by asset class
Liquidity	$	489	$	521	$	591	$	634	$	617		(6	)%		(21	)%
Fixed income		259		246		226		215		194		5			34
Equities and multi-asset		322		355		339		316		264		(9	)		22
Alternatives		91		97		93		94		96		(6	)		(5	)

TOTAL ASSETS UNDER MANAGEMENT		1,161		1,219		1,249		1,259		1,171		(5	)		(1	)
Custody / brokerage / administration / deposits		479		488		452		411		372		(2	)		29

TOTAL ASSETS UNDER SUPERVISION	$	1,640	$	1,707	$	1,701	$	1,670	$	1,543		(4	)		6


Assets by client segment
Institutional	$	634	$	669	$	709	$	737	$	697		(5	)		(9	)
Private Bank		177		184		187		180		179		(4	)		(1	)
Retail		269		282		270		256		216		(5	)		25
Private Wealth Management		66		70		69		71		67		(6	)		(1	)
JPMorgan Securities (b)		15		14		14		15		12		7			25

TOTAL ASSETS UNDER MANAGEMENT	$	1,161	$	1,219	$	1,249	$	1,259	$	1,171		(5	)		(1	)


Institutional	$	636	$	670	$	710	$	737	$	697		(5	)		(9	)
Private Bank		469		476		452		414		390		(1	)		20
Retail		351		371		355		339		289		(5	)		21
Private Wealth Management		130		133		129		131		123		(2	)		6
JPMorgan Securities (b)		54		57		55		49		44		(5	)		23

TOTAL ASSETS UNDER SUPERVISION	$	1,640	$	1,707	$	1,701	$	1,670	$	1,543		(4	)		6


Assets by geographic region
U.S. / Canada	$	791	$	815	$	837	$	862	$	814		(3	)		(3	)
International		370		404		412		397		357		(8	)		4

TOTAL ASSETS UNDER MANAGEMENT	$	1,161	$	1,219	$	1,249	$	1,259	$	1,171		(5	)		(1	)


U.S. / Canada	$	1,151	$	1,189	$	1,182	$	1,179	$	1,103		(3	)		4
International		489		518		519		491		440		(6	)		11

TOTAL ASSETS UNDER SUPERVISION	$	1,640	$	1,707	$	1,701	$	1,670	$	1,543		(4	)		6


Mutual fund assets by asset class
Liquidity	$	440	$	470	$	539	$	576	$	569		(6	)		(23	)
Fixed income		79		76		67		57		48		4			65
Equities and multi-asset		133		150		143		133		111		(11	)		20
Alternatives		8		9		9		10		9		(11	)		(11	)

TOTAL MUTUAL FUND ASSETS	$	660	$	705	$	758	$	776	$	737		(6	)		(10	)


(a)		Excludes assets under management of American Century Companies, Inc. in which the Firm has had a 42% ownership in all the periods presented.

(b)		JPMorgan Securities was formerly known as Bear Stearns Private Client Services prior to January 1, 2010.

Page 28


JPMORGAN CHASE & CO.
ASSET MANAGEMENT
FINANCIAL HIGHLIGHTS, CONTINUED
(in billions)


	QUARTERLY TRENDS														YEAR-TO-DATE
	2Q10			1Q10			4Q09			3Q09		2Q09			2010			2009
ASSETS UNDER SUPERVISION (continued)
Assets under management rollforward
Beginning balance	$	1,219		$	1,249		$	1,259		$	1,171	$	1,115		$	1,249		$	1,133
Net asset flows:
Liquidity		(29	)		(62	)		(44	)		9		(7	)		(91	)		12
Fixed income		12			16			12			13		8			28			9
Equities, multi-asset and alternatives		1			6			8			12		2			7			(3	)
Market / performance / other impacts		(42	)		10			14			54		53			(32	)		20

TOTAL ASSETS UNDER MANAGEMENT	$	1,161		$	1,219		$	1,249		$	1,259	$	1,171		$	1,161		$	1,171


Assets under supervision rollforward
Beginning balance	$	1,707		$	1,701		$	1,670		$	1,543	$	1,464		$	1,701		$	1,496
Net asset flows		(4	)		(10	)		(11	)		45		(9	)		(14	)		16
Market / performance / other impacts		(63	)		16			42			82		88			(47	)		31

TOTAL ASSETS UNDER SUPERVISION	$	1,640		$	1,707		$	1,701		$	1,670	$	1,543		$	1,640		$	1,543

Page 29


JPMORGAN CHASE & CO.
CORPORATE/PRIVATE EQUITY
FINANCIAL HIGHLIGHTS
(in millions, except headcount data)


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
INCOME STATEMENT
REVENUE
Principal transactions	$	(69	)	$	547		$	715		$	1,109		$	1,243		NM		%	NM		%	$	478		$	(250	)	NM		%
Securities gains		990			610			378			181			366			62			170			1,600			580			176
All other income		182			124			13			273			(209	)		47		NM				306			(228	)	NM

Noninterest revenue		1,103			1,281			1,106			1,563			1,400			(14	)		(21	)		2,384			102		NM
Net interest income		747			1,076			978			1,031			865			(31	)		(14	)		1,823			1,854			(2	)

TOTAL NET REVENUE (a)		1,850			2,357			2,084			2,594			2,265			(22	)		(18	)		4,207			1,956			115

Provision for credit losses		(2	)		17			9			62			9		NM			NM				15			9			67

NONINTEREST EXPENSE
Compensation expense		770			475			747			768			655			62			18			1,245			1,296			(4	)
Noncompensation expense (b)		1,468			3,041			1,058			875			1,319			(52	)		11			4,509			1,664			171
Merger costs		—			—			30			103			143			—		NM				—			348		NM

Subtotal		2,238			3,516			1,835			1,746			2,117			(36	)		6			5,754			3,308			74
Net expense allocated to other businesses		(1,192	)		(1,180	)		(1,219	)		(1,243	)		(1,253	)		(1	)		5			(2,372	)		(2,532	)		6

TOTAL NONINTEREST EXPENSE		1,046			2,336			616			503			864			(55	)		21			3,382			776			336


Income/(loss) before income tax expense (benefit) and extraordinary gain		806			4			1,459			2,029			1,392		NM				(42	)		810			1,171			(31	)

Income tax expense/(benefit) (c)		153			(224	)		262			818			584		NM				(74	)		(71	)		625		NM

Income/(loss) before extraordinary gain		653			228			1,197			1,211			808			186			(19	)		881			546			61
Extraordinary gain (d)		—			—			—			76			—			—			—			—			—			—

NET INCOME/(LOSS)	$	653		$	228		$	1,197		$	1,287		$	808			186			(19	)	$	881		$	546			61


MEMO:
TOTAL NET REVENUE
Private equity	$	48		$	115		$	296		$	172		$	(1	)		(58	)	NM			$	163		$	(450	)	NM
Corporate		1,802			2,242			1,788			2,422			2,266			(20	)		(20	)		4,044			2,406			68

TOTAL NET REVENUE	$	1,850		$	2,357		$	2,084		$	2,594		$	2,265			(22	)		(18	)	$	4,207		$	1,956			115


NET INCOME/(LOSS)
Private equity	$	11		$	55		$	141		$	88		$	(27	)		(80	)	NM			$	66		$	(307	)	NM
Corporate (e)		642			173			1,056			1,199			835			271			(23	)		815			853			(4	)

TOTAL NET INCOME/(LOSS)	$	653		$	228		$	1,197		$	1,287		$	808			186			(19	)	$	881		$	546			61


Headcount		19,482			19,307			20,119			20,747			21,522			1			(9	)		19,482			21,522			(9	)


(a)		Total net revenue included tax-equivalent adjustments, predominantly due to tax-exempt income from municipal bond investments of $57 million, $48 million, $41 million, $40 million and $44 million for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and $105 million and $70 million for year-to-date 2010 and 2009, respectively.

(b)		The first quarter of 2010 included a $2.3 billion increase reflecting increased litigation reserves, including those for mortgage-related matters. The second quarter of 2009 included a $675 million FDIC special assessment.

(c)		The income tax expense in the first quarter of 2010 and fourth quarter of 2009 includes tax benefits recognized upon the resolution of tax audits.

(d)		On September 25, 2008, JPMorgan Chase acquired the banking operations of Washington Mutual. The acquisition resulted in negative goodwill, and accordingly, the Firm recognized an extraordinary gain. A preliminary gain of $1.9 billion was recognized at December 31, 2008. The final total extraordinary gain that resulted from the Washington Mutual transaction was $2.0 billion.

(e)		The 2009 periods included merger costs and the extraordinary gain related to the Washington Mutual transaction, as well as items related to the Bear Stearns merger, including merger costs, asset management liquidation costs and Bear Stearns Private Client Services (which was renamed to JPMorgan Securities effective January 2010) broker retention expense.

Page 30


JPMORGAN CHASE & CO.
CORPORATE/PRIVATE EQUITY
FINANCIAL HIGHLIGHTS, CONTINUED
(in millions)


	QUARTERLY TRENDS																			YEAR-TO-DATE
														2Q10 Change												2010 Change
	2Q10			1Q10			4Q09		3Q09		2Q09			1Q10			2Q09			2010			2009			2009
SUPPLEMENTAL INFORMATION

TREASURY and CIO
Securities gains (a)	$	989		$	610		$	378	$	181	$	374			62	%		164	%	$	1,599		$	588			172	%
Investment securities portfolio (average)		320,578			330,584			353,224		339,745		336,263			(3	)		(5	)		325,553			301,219			8
Investment securities portfolio (ending)		305,288			337,442			340,163		351,823		326,414			(10	)		(6	)		305,288			326,414			(6	)
Mortgage loans (average)		8,539			8,162			7,794		7,469		7,228			5			18			8,352			7,219			16
Mortgage loans (ending)		8,900			8,368			8,023		7,665		7,368			6			21			8,900			7,368			21

PRIVATE EQUITY
Private equity gains/(losses)
Direct investments
Realized gains	$	78		$	113		$	12	$	57	$	25			(31	)		212		$	191		$	40			378
Unrealized gains/(losses) (b)		(7	)		(75	)		224		88		16			91		NM				(82	)		(393	)		79

Total direct investments		71			38			236		145		41			87			73			109			(353	)	NM
Third-party fund investments		4			98			37		10		(61	)		(96	)	NM				102			(129	)	NM

Total private equity gains/(losses) (c)	$	75		$	136		$	273	$	155	$	(20	)		(45	)	NM			$	211		$	(482	)	NM


Private equity portfolio information
Direct investments
Publicly-held securities
Carrying value	$	873		$	890		$	762	$	674	$	431			(2	)		103
Cost		901			793			743		751		778			14			16
Quoted public value		974			982			791		720		477			(1	)		104
Privately-held direct securities
Carrying value		5,464			4,782			5,104		4,722		4,709			14			16
Cost		6,507			5,795			5,959		5,823		5,627			12			16
Third-party fund investments (d)
Carrying value		1,782			1,603			1,459		1,440		1,420			11			25
Cost		2,315			2,134			2,079		2,068		2,055			8			13


Total private equity portfolio — Carrying value	$	8,119		$	7,275		$	7,325	$	6,836	$	6,560			12			24


Total private equity portfolio — Cost	$	9,723		$	8,722		$	8,781	$	8,642	$	8,460			11			15


(a)		All periods reflect repositioning of the Corporate investment securities portfolio, and exclude gains/losses on securities used to manage risk associated with MSRs.

(b)		Unrealized gains/(losses) contain reversals of unrealized gains and losses that were recognized in prior periods and have now been realized.

(c)		Included in principal transactions revenue in the Consolidated Statements of Income.

(d)		Unfunded commitments to third-party private equity funds were $1.2 billion, $1.4 billion, $1.5 billion, $1.4 billion and $1.5 billion at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively.

Page 31


JPMORGAN CHASE & CO.
CREDIT-RELATED INFORMATION
(in millions)


											June 30, 2010
											Change
	Jun 30		Mar 31		Dec 31		Sep 30		Jun 30		Mar 31			Jun 30
	2010		2010		2009		2009		2009		2010			2009
CREDIT EXPOSURE
WHOLESALE (a)
Loans retained (b)	$	212,987	$	210,211	$	200,077	$	213,718	$	224,080		1	%		(5	)%
Loans held-for-sale and loans at fair value		3,839		4,079		4,098		5,235		7,545		(6	)		(49	)

TOTAL WHOLESALE LOANS — REPORTED		216,826		214,290		204,175		218,953		231,625		1			(6	)
CONSUMER (c)
Home loan portfolio — excluding purchased credit-impaired loans:
Home equity		94,761		97,642		101,425		104,795		108,229		(3	)		(12	)
Prime mortgage (b)		66,429		68,210		66,892		67,597		68,878		(3	)		(4	)
Subprime mortgage (b)		12,597		13,219		12,526		13,270		13,825		(5	)		(9	)
Option ARMs (b)		8,594		8,644		8,536		8,852		9,034		(1	)		(5	)

Total home loan portfolio — excluding purchased credit-impaired loans		182,381		187,715		189,379		194,514		199,966		(3	)		(9	)
Home loan portfolio — purchased credit-impaired loans: (d)
Home equity		25,471		26,012		26,520		27,088		27,729		(2	)		(8	)
Prime mortgage		18,512		19,203		19,693		20,229		20,807		(4	)		(11	)
Subprime mortgage		5,662		5,848		5,993		6,135		6,341		(3	)		(11	)
Option ARMs		27,256		28,260		29,039		29,750		30,529		(4	)		(11	)

Total home loan portfolio — purchased credit-impaired loans		76,901		79,323		81,245		83,202		85,406		(3	)		(10	)
Other consumer:
Auto (b)		47,548		47,381		46,031		44,309		42,887		—			11
Credit card — reported:
Loans excluding those held by the WaMu Master Trust (b)		142,994		149,260		77,784		75,207		80,722		(4	)		77
Loans held by the WaMu Master Trust (e)		—		—		1,002		3,008		5,014		—		NM

Total credit card — reported		142,994		149,260		78,786		78,215		85,736		(4	)		67
Other loans (b)		32,399		32,951		31,700		32,405		33,041		(2	)		(2	)

Loans retained		482,223		496,630		427,141		432,645		447,036		(3	)		8
Loans held-for-sale (f)		434		2,879		2,142		1,546		1,940		(85	)		(78	)

TOTAL CONSUMER LOANS — REPORTED		482,657		499,509		429,283		434,191		448,976		(3	)		8

TOTAL LOANS — REPORTED		699,483		713,799		633,458		653,144		680,601		(2	)		3
Credit card — securitized (b)		N/A		N/A		84,626		87,028		85,790	NM			NM

TOTAL MANAGED LOANS (b)		699,483		713,799		718,084		740,172		766,391		(2	)		(9	)
Derivative receivables		80,215		79,416		80,210		94,065		97,491		1			(18	)
Receivables from customers		22,966		16,314		15,745		13,148		12,977		41			77
Interests in purchased receivables (b)		1,836		2,579		2,927		2,329		2,972		(29	)		(38	)

TOTAL CREDIT-RELATED ASSETS		804,500		812,108		816,966		849,714		879,831		(1	)		(9	)
Wholesale lending-related commitments (b)		324,552		326,921		347,155		343,135		343,991		(1	)		(6	)

TOTAL	$	1,129,052	$	1,139,029	$	1,164,121	$	1,192,849	$	1,223,822		(1	)		(8	)

Memo: Total by category
Total wholesale exposure (g)	$	646,395	$	639,520	$	650,212	$	671,630	$	689,056		1			(6	)
Total consumer loans (h)		482,657		499,509		513,909		521,219		534,766		(3	)		(10	)

Total	$	1,129,052	$	1,139,029	$	1,164,121	$	1,192,849	$	1,223,822		(1	)		(8	)


(a)		Includes Investment Bank, Commercial Banking, Treasury & Securities Services and Asset Management.

(b)		Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. As a result of the consolidation of the credit card securitization trusts, reported and managed basis relating to credit card securitizations are equivalent for periods beginning after January 1, 2010. For further details regarding the Firm’s application and impact of the new guidance, see footnote (a) on page 3.

(c)		Includes Retail Financial Services, Card Services and residential mortgage loans reported in the Corporate/Private Equity segment to be risk managed by the Chief Investment Office.

(d)		Purchased credit-impaired loans represent loans acquired in the Washington Mutual transaction for which a deterioration in credit quality occurred between the origination date and JPMorgan Chase’s acquisition date. These loans were initially recorded at fair value and accrete interest income over the estimated lives of the loans as long as cash flows are reasonably estimable, even if the underlying loans are contractually past due.

(e)		Represents the remaining balance of loans measured at fair value within the Washington Mutual Master Trust that were consolidated onto the Firm’s balance sheet during the second quarter of 2009. No allowance for loan losses was recorded for these loans as of December 31, 2009, September 30, 2009 and June 30, 2009.

(f)		Included loans for prime mortgage of $185 million, $558 million, $450 million, $187 million and $589 million at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively, and other (largely student loans) of $249 million, $2.3 billion, $1.7 billion, $1.4 billion and $1.4 billion at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively.

(g)		Primarily represents total wholesale loans, derivative receivables, wholesale lending-related commitments and receivables from customers.

(h)		Represents total consumer loans and excludes consumer lending-related commitments.

		N/A: Not Applicable.

Page 32


JPMORGAN CHASE & CO.
CREDIT-RELATED INFORMATION, CONTINUED
(in millions)


											June 30, 2010
											Change
	Jun 30		Mar 31		Dec 31		Sep 30		Jun 30		Mar 31			Jun 30
	2010		2010		2009		2009		2009		2010			2009
CREDIT EXPOSURE (continued)
Risk profile of wholesale credit exposure:
Investment-grade	$	463,223	$	457,471	$	460,702	$	474,005	$	491,168		1	%		(6	)%
Noninvestment-grade:
Noncriticized		128,020		129,368		133,557		141,578		141,408		(1	)		(9	)
Criticized performing		20,911		23,451		26,095		27,217		26,453		(11	)		(21	)
Criticized nonperforming		5,600		6,258		7,088		8,118		6,533		(11	)		(14	)

Total noninvestment-grade		154,531		159,077		166,740		176,913		174,394		(3	)		(11	)
Loans held-for-sale and loans at fair value		3,839		4,079		4,098		5,235		7,545		(6	)		(49	)
Receivables from customers		22,966		16,314		15,745		13,148		12,977		41			77
Interests in purchased receivables (a)		1,836		2,579		2,927		2,329		2,972		(29	)		(38	)

Total wholesale exposure	$	646,395	$	639,520	$	650,212	$	671,630	$	689,056		1			(6	)


(a)		Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. For further details regarding the Firm’s application and impact of the new guidance, see footnote (a) on page 3.

		Note: The risk profile is based on JPMorgan Chase’s internal risk ratings. For further details on the Firm’s internal risk ratings, refer to Glossary of Terms on page 43.

Page 33


JPMORGAN CHASE & CO.
CREDIT-RELATED INFORMATION, CONTINUED
(in millions, except ratio data)


																June 30, 2010
																Change
	Jun 30			Mar 31			Dec 31			Sep 30			Jun 30			Mar 31			Jun 30
	2010			2010			2009			2009			2009			2010			2009
NONPERFORMING ASSETS AND RATIOS
WHOLESALE LOANS
Loans retained	$	5,285		$	5,895		$	6,559		$	7,494		$	5,829			(10	)%		(9	)%
Loans held-for-sale and loans at fair value		375			331			345			146			133			13			182

TOTAL WHOLESALE LOANS		5,660			6,226			6,904			7,640			5,962			(9	)		(5	)


CONSUMER LOANS
Home loan portfolio:
Home equity		1,211			1,427			1,665			1,598			1,487			(15	)		(19	)
Prime mortgage		4,653			4,579			4,355			4,007			3,501			2			33
Subprime mortgage		3,115			3,331			3,248			3,233			2,773			(6	)		12
Option ARMs		409			348			312			244			182			18			125

Total home loan portfolio		9,388			9,685			9,580			9,082			7,943			(3	)		18
Auto loans		155			174			177			179			154			(11	)		1
Credit card — reported		3			3			3			3			4			—			(25	)
Other loans		973			962			900			863			722			1			35

TOTAL CONSUMER LOANS (a)(b)		10,519			10,824			10,660			10,127			8,823			(3	)		19

TOTAL NONPERFORMING LOANS REPORTED (c)		16,179			17,050			17,564			17,767			14,785			(5	)		9


Derivative receivables		315			363			529			624			704			(13	)		(55	)
Assets acquired in loan satisfactions		1,662			1,606			1,648			1,971			2,028			3			(18	)

TOTAL NONPERFORMING ASSETS (a)	$	18,156		$	19,019		$	19,741		$	20,362		$	17,517			(5	)		4


TOTAL NONPERFORMING LOANS TO TOTAL LOANS REPORTED		2.31	%		2.39	%		2.77	%		2.72	%		2.17	%

NONPERFORMING ASSETS BY LOB
Investment Bank	$	2,726		$	3,289		$	4,236		$	5,782		$	4,534			(17	)		(40	)
Retail Financial Services (b)		11,731			11,974			11,864			11,641			10,351			(2	)		13
Card Services		3			3			3			3			4			—			(25	)
Commercial Banking		3,285			3,186			2,989			2,461			2,255			3			46
Treasury & Securities Services		14			14			14			14			14			—			—
Asset Management		337			498			582			422			326			(32	)		3
Corporate/Private Equity (d)		60			55			53			39			33			9			82

TOTAL	$	18,156		$	19,019		$	19,741		$	20,362		$	17,517			(5	)		4


(a)		Nonperforming assets exclude: (1) nonaccruing mortgage loans insured by U.S. government agencies of $10.1 billion, $10.5 billion, $9.0 billion, $7.0 billion and $4.2 billion at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively; (2) real estate owned insured by U.S. government agencies of $1.4 billion, $707 million, $579 million, $579 million and $508 million at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively; and (3) student loans that are 90 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program, of $447 million, $581 million, $542 million, $511 million and $473 million at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively. These amounts are excluded as reimbursement is proceeding normally. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance. Under guidance issued by the Federal Financial Institutions Examination Council, credit card loans are charged off by the end of the month in which the account becomes 180 days past due or within 60 days from receiving notification about a specified event (e.g., bankruptcy of the borrower), whichever is earlier.

(b)		Excludes home lending purchased credit-impaired loans that were acquired as part of the Washington Mutual transaction. These loans are accounted for on a pool basis, and the pools are considered to be performing. Also excludes loans held-for-sale and loans at fair value.

(c)		Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. For further details regarding the Firm’s application and impact of the new guidance, see footnote (a) on page 3.

(d)		Predominantly relates to held-for-investment prime mortgage loans.

Page 34


JPMORGAN CHASE & CO.
CREDIT-RELATED INFORMATION, CONTINUED
(in millions, except ratio data)


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
GROSS CHARGE-OFFS (a)
Wholesale loans	$	264		$	1,014		$	1,230		$	1,093		$	697			(74	)%		(62	)%	$	1,278		$	903			42	%
Consumer loans, excluding credit card		1,874			2,555			2,825			2,634			2,718			(27	)		(31	)		4,429			4,962			(11	)
Credit card loans — reported		4,063			4,882			2,405			2,894			2,883			(17	)		41			8,945			5,072			76

Total loans — reported		6,201			8,451			6,460			6,621			6,298			(27	)		(2	)		14,652			10,937			34
Credit card loans — securitized		N/A			N/A			1,733			1,810			1,776		NM			NM				N/A			3,355		NM

Total loans — managed		6,201			8,451			8,193			8,431			8,074			(27	)		(23	)		14,652			14,292			3


RECOVERIES (a)
Wholesale loans		33			55			26			35			18			(40	)		83			88			33			167
Consumer loans, excluding credit card		112			116			74			13			67			(3	)		67			228			135			69
Credit card loans — reported		342			370			183			200			194			(8	)		76			712			354			101

Total loans — reported		487			541			283			248			279			(10	)		75			1,028			522			97
Credit card loans — securitized		N/A			N/A			116			112			112		NM			NM				N/A			227		NM

Total loans — managed		487			541			399			360			391			(10	)		25			1,028			749			37


NET CHARGE-OFFS (a)
Wholesale loans		231			959			1,204			1,058			679			(76	)		(66	)		1,190			870			37
Consumer loans, excluding credit card		1,762			2,439			2,751			2,621			2,651			(28	)		(34	)		4,201			4,827			(13	)
Credit card loans — reported		3,721			4,512			2,222			2,694			2,689			(18	)		38			8,233			4,718			75

Total loans — reported		5,714			7,910			6,177			6,373			6,019			(28	)		(5	)		13,624			10,415			31
Credit card loans — securitized		N/A			N/A			1,617			1,698			1,664		NM			NM				N/A			3,128		NM

Total loans — managed	$	5,714		$	7,910		$	7,794		$	8,071		$	7,683			(28	)		(26	)	$	13,624		$	13,543			1


NET CHARGE-OFF RATES (a)
Wholesale retained loans		0.44	%		1.84	%		2.31	%		1.93	%		1.19	%								1.14	%		0.75	%
Consumer retained loans		4.49			5.56			4.60			4.79			4.69									5.03			4.15
Total retained loans — reported		3.28			4.46			3.85			3.84			3.52									3.88			3.01
Consumer loans — managed		4.49			5.56			5.08			5.29			5.20									5.03			4.65
Total loans — managed		3.28			4.46			4.29			4.30			4.00									3.88			3.49
Consumer loans — managed excluding purchased credit-impaired loans (b)		5.34			6.61			6.05			6.29			6.18									5.98			5.53
Total loans — managed excluding purchased credit-impaired loans (b)		3.69			5.03			4.84			4.85			4.51									4.36			3.93

Memo: Average Retained Loans (a)
Wholesale loans — reported	$	209,016		$	211,599		$	206,846		$	217,952		$	229,105								$	210,300		$	233,871
Consumer loans — reported		490,149			506,949			428,964			440,376			456,292									498,503			464,062
Total loans — reported		699,165			718,548			635,810			658,328			685,397									708,803			697,932
Consumer loans — managed		490,149			506,949			514,416			526,393			540,709									498,503			549,077
Total loans — managed		699,165			718,548			721,262			744,345			769,814									708,803			782,947


(a)		Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. As a result of the consolidation of the credit card securitization trusts, reported and managed basis relating to credit card securitizations are equivalent for periods beginning after January 1, 2010. For further details regarding the Firm’s application and impact of the new guidance, see footnote (a) on page 3.

(b)		Excludes the impact of purchased credit-impaired loans that were acquired as part of the Washington Mutual transaction. These loans were accounted for at fair value on the acquisition date, which incorporated management’s estimate, as of that date, of credit losses over the remaining life of the portfolio. To date, no charge-offs have been recorded for these loans.

		N/A: Not Applicable.

Page 35


JPMORGAN CHASE & CO.
CREDIT-RELATED INFORMATION, CONTINUED
(in millions)


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
SUMMARY OF CHANGES IN THE ALLOWANCES
ALLOWANCE FOR LOAN LOSSES
Beginning balance at January 1,	$	38,186		$	31,602		$	30,633		$	29,072		$	27,381			21	%		39	%	$	31,602		$	23,164			36	%
Cumulative effect of change in accounting principles (a)		—			7,494			—			—			—		NM				—			7,494			—		NM
Net charge-offs (a)		5,714			7,910			6,177			6,373			6,019			(28	)		(5	)		13,624			10,415			31
Provision for loan losses (a)		3,380			6,991			7,166			8,029			7,923			(52	)		(57	)		10,371			16,540			(37	)
Other (b)		(16	)		9			(20	)		(95	)		(213	)	NM				92			(7	)		(217	)		97

Ending balance	$	35,836		$	38,186		$	31,602		$	30,633		$	29,072			(6	)		23		$	35,836		$	29,072			23


ALLOWANCE FOR LENDING-RELATED COMMITMENTS
Beginning balance at January 1,	$	940		$	939		$	821		$	746		$	638			—			47		$	939		$	659			42
Cumulative effect of change in accounting principles (a)		—			(18	)		—			—			—		NM				—			(18	)		—		NM
Provision for lending-related commitments		(17	)		19			118			75			108		NM			NM				2			87			(98	)
Other		(11	)		—			—			—			—		NM			NM				(11	)		—			NM

Ending balance	$	912		$	940		$	939		$	821		$	746			(3	)		22		$	912		$	746			22


ALLOWANCE FOR LOAN LOSSES BY LOB
Investment Bank (a)	$	2,149		$	2,601		$	3,756		$	4,703		$	5,101			(17	)		(58	)
Retail Financial Services (a)		16,152			16,200			14,776			13,286			11,832			—			37
Card Services (a)		14,524			16,032			9,672			9,297			8,839			(9	)		64
Commercial Banking		2,686			3,007			3,025			3,063			3,034			(11	)		(11	)
Treasury & Securities Services		48			57			88			15			15			(16	)		220
Asset Management		250			261			269			251			226			(4	)		11
Corporate/Private Equity		27			28			16			18			25			(4	)		8

Total	$	35,836		$	38,186		$	31,602		$	30,633		$	29,072			(6	)		23


(a)		Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. For further details regarding the Firm’s application and impact of the new guidance, see footnote (a) on page 3.

(b)		Activity for the third and second quarters of 2009 predominantly included a reclassification related to the issuance and retention of securities from the Chase Issuance Trust.

Page 36


JPMORGAN CHASE & CO.
CREDIT-RELATED INFORMATION, CONTINUED
(in millions, except ratio data)


	QUARTERLY TRENDS
																2Q10 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09
ALLOWANCE COMPONENTS AND RATIOS
ALLOWANCE FOR LOAN LOSSES
Wholesale
Asset specific (a)	$	1,324		$	1,557		$	2,046		$	2,410		$	2,108			(15	)%		(37	)%
Formula — based		3,824			4,385			5,099			5,631			6,284			(13	)		(39	)

Total wholesale		5,148			5,942			7,145			8,041			8,392			(13	)		(39	)

Consumer
Asset specific (b)		1,184			1,010			996			1,009			801			17			48
Formula — based (a)(c)(d)		26,693			28,423			21,880			20,493			19,879			(6	)		34
Purchased credit-impaired (d)		2,811			2,811			1,581			1,090			—			—		NM

Total consumer		30,688			32,244			24,457			22,592			20,680			(5	)		48

Total allowance for loan losses		35,836			38,186			31,602			30,633			29,072			(6	)		23
Allowance for lending-related commitments		912			940			939			821			746			(3	)		22

Total allowance for credit losses	$	36,748		$	39,126		$	32,541		$	31,454		$	29,818			(6	)		23


CREDIT RATIOS
Wholesale allowance to total wholesale retained loans		2.42	%		2.83	%		3.57	%		3.76	%		3.75	%
Consumer allowance to total consumer retained loans		6.36			6.49			5.73			5.22			4.63
Allowance to total retained loans		5.15			5.40			5.04			4.74			4.33
Consumer allowance to consumer retained nonperforming loans (e)		292			298			229			223			234
Consumer allowance to consumer retained nonperforming loans excluding credit card (e)		154			150			139			131			134

CREDIT RATIOS excluding purchased credit-impaired loans (f)
Consumer allowance to total consumer retained loans (f)(g)		6.88			7.05			6.63			6.21			5.80
Allowance to retained loans (f)(g)		5.34			5.64			5.51			5.28			5.01
Consumer allowance to consumer retained nonperforming loans (e)(f)(g)		265			272			215			212			234
Consumer allowance to consumer retained nonperforming loans excluding credit card (e)(f)		127			124			124			121			134
Allowance to total retained nonperforming loans (f)(g)		209			212			174			168			198


(a)		Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. For further details regarding the Firm’s application and impact of the new guidance, see footnote (a) on page 3.

(b)		The asset-specific consumer allowance for loan losses includes troubled debt restructuring reserves of $946 million, $754 million, $754 million, $756 million and $603 million at June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively. Prior period amounts have been reclassified from formula-based to conform with the current period presentation.

(c)		Includes all of the Firm’s allowance for loan losses on credit card loans, including those for which the Firm has modified the terms of the loans for borrowers who are experiencing financial difficulty.

(d)		Prior period amounts have been reclassified from formula-based to conform with the current period presentation.

(e)		The Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance. Under guidance issued by the Federal Financial Institutions Examination Council, credit card loans are charged off by the end of the month in which the account becomes 180 days past due or within 60 days from receiving notification about a specified event (e.g., bankruptcy of the borrower), whichever is earlier.

(f)		Excludes the impact of purchased credit-impaired loans that were acquired as part of the Washington Mutual transaction, as well as the related allowance recorded on these loans. These loans were accounted for at fair value on the acquisition date, which incorporated management’s estimate, as of that date, of credit losses over the remaining life of the portfolio. To date, no charge-offs have been recorded for these loans.

(g)		Excludes loans held by the Washington Mutual Master Trust, which were consolidated onto the Firm’s balance sheet at fair value during the second quarter of 2009. No allowance for loan losses was recorded for these loans as of December 31, 2009, September 30, 2009, and June 30, 2009. The balance of these loans held by the Washington Mutual Master Trust was zero at June 30, 2010 and March 31, 2010.

Page 37


JPMORGAN CHASE & CO.
CREDIT-RELATED INFORMATION, CONTINUED
(in millions)


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
PROVISION FOR CREDIT LOSSES
LOANS
Investment Bank (a)	$	(418	)	$	(477	)	$	(265	)	$	330		$	815			12	%	NM		%	$	(895	)	$	2,089		NM		%
Commercial Banking		(143	)		204			445			326			280		NM			NM				61			543			(89	)
Treasury & Securities Services		(8	)		(31	)		73			1			(20	)		74			60			(39	)		(40	)		3
Asset Management		15			31			53			37			59			(52	)		(75	)		46			93			(51	)
Corporate/Private Equity		(1	)		16			(2	)		(6	)		7		NM			NM				15			7			114

Total wholesale		(555	)		(257	)		304			688			1,141			(116	)	NM				(812	)		2,692		NM

Retail Financial Services (a)		1,715			3,735			4,228			4,004			3,841			(54	)		(55	)		5,450			7,718			(29	)
Card Services — reported (a)		2,221			3,512			2,622			3,269			2,939			(37	)		(24	)		5,733			6,128			(6	)
Corporate/Private Equity		(1	)		1			12			68			2		NM			NM				—			2		NM

Total consumer		3,935			7,248			6,862			7,341			6,782			(46	)		(42	)		11,183			13,848			(19	)

Total provision for loan losses	$	3,380		$	6,991		$	7,166		$	8,029		$	7,923			(52	)		(57	)	$	10,371		$	16,540			(37	)


LENDING-RELATED COMMITMENTS
Investment Bank (a)	$	93		$	15		$	84		$	49		$	56		NM				66		$	108		$	(8	)	NM
Commercial Banking		(92	)		10			49			29			32		NM			NM				(82	)		62		NM
Treasury & Securities Services		(8	)		(8	)		(20	)		12			15			—		NM				(16	)		29		NM
Asset Management		(10	)		4			5			1			—		NM			NM				(6	)		(1	)		(500	)
Corporate/Private Equity		—			—			(1	)		—			—			—			—			—			—			—

Total wholesale		(17	)		21			117			91			103		NM			NM				4			82			(95	)

Retail Financial Services		—			(2	)		1			(16	)		5		NM			NM				(2	)		5		NM
Card Services — reported		—			—			—			—			—			—			—			—			—			—
Corporate/Private Equity		—			—			—			—			—			—			—			—			—			—

Total consumer		—			(2	)		1			(16	)		5		NM			NM				(2	)		5		NM

Total provision for lending-related commitments	$	(17	)	$	19		$	118		$	75		$	108		NM			NM			$	2		$	87			(98	)


TOTAL PROVISION FOR CREDIT LOSSES
Investment Bank (a)	$	(325	)	$	(462	)	$	(181	)	$	379		$	871			30		NM			$	(787	)	$	2,081		NM
Commercial Banking		(235	)		214			494			355			312		NM			NM				(21	)		605		NM
Treasury & Securities Services		(16	)		(39	)		53			13			(5	)		59			(220	)		(55	)		(11	)		(400	)
Asset Management		5			35			58			38			59			(86	)		(92	)		40			92			(57	)
Corporate/Private Equity		(1	)		16			(3	)		(6	)		7		NM			NM				15			7			114

Total wholesale		(572	)		(236	)		421			779			1,244			(142	)	NM				(808	)		2,774		NM

Retail Financial Services (a)		1,715			3,733			4,229			3,988			3,846			(54	)		(55	)		5,448			7,723			(29	)
Card Services — reported (a)		2,221			3,512			2,622			3,269			2,939			(37	)		(24	)		5,733			6,128			(6	)
Corporate/Private Equity		(1	)		1			12			68			2		NM			NM				—			2		NM

Total consumer		3,935			7,246			6,863			7,325			6,787			(46	)		(42	)		11,181			13,853			(19	)

Total provision for credit losses		3,363			7,010			7,284			8,104			8,031			(52	)		(58	)		10,373			16,627			(38	)


Credit card loans — securitized (a)		N/A			N/A			1,617			1,698			1,664		NM			NM				N/A			3,128		NM

Managed provision for credit losses (a)	$	3,363		$	7,010		$	8,901		$	9,802		$	9,695			(52	)		(65	)	$	10,373		$	19,755			(47	)


(a)		Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. As a result of the consolidation of the credit card securitization trusts, reported and managed basis relating to credit card securitizations are equivalent for periods beginning after January 1, 2010. For further details regarding the Firm’s application and impact of the new guidance, see footnote (a) on page 3.

		N/A: Not Applicable.

Page 38



JPMORGAN CHASE & CO. MARKET RISK-RELATED INFORMATION (in millions)


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
AVERAGE IB TRADING VAR, CREDIT PORTFOLIO
VAR AND OTHER VAR - 95% CONFIDENCE LEVEL
IB VaR by risk type:
Fixed income	$	64		$	69		$	121		$	182		$	179			(7	)%		(64	)%	$	66		$	168			(61	)%
Foreign exchange		10			13			14			19			16			(23	)		(38	)		12			19			(37	)
Equities		20			24			21			19			50			(17	)		(60	)		22			73			(70	)
Commodities and other		20			15			17			23			22			33			(9	)		18			21			(14	)
Diversification benefit to IB trading VaR (a)		(42	)		(49	)		(62	)		(97	)		(97	)		14			57			(46	)		(101	)		54

IB Trading VaR (b)		72			72			111			146			170			—			(58	)		72			180			(60	)

Credit portfolio VaR (c)		27			19			24			29			68			42			(60	)		23			77			(70	)
Diversification benefit to IB trading and credit portfolio VaR (a)		(9	)		(9	)		(11	)		(32	)		(60	)		—			85			(9	)		(62	)		85

Total IB trading and credit portfolio VaR		90			82			124			143			178			10			(49	)		86			195			(56	)


Consumer Lending VaR (d)		24			25			29			49			43			(4	)		(44	)		25			75			(67	)
Chief Investment Office (CIO) VaR (e)		72			70			78			99			111			3			(35	)		71			116			(39	)
Diversification benefit to total other VaR (a)		(14	)		(13	)		(19	)		(31	)		(29	)		(8	)		52			(14	)		(45	)		69

Total other VaR		82			82			88			117			125			—			(34	)		82			146			(44	)


Diversification benefit to total IB and other VaR (a)		(79	)		(66	)		(67	)		(82	)		(89	)		(20	)		11			(73	)		(91	)		20

Total IB and other VaR (f)	$	93		$	98		$	145		$	178		$	214			(5	)		(57	)	$	95		$	250			(62	)


(a)		Average VaRs were less than the sum of the VaRs of their market risk components, which is due to risk offsets resulting from portfolio diversification. The diversification effect reflected the fact that the risks were not perfectly correlated. The risk of a portfolio of positions is therefore usually less than the sum of the risks of the positions themselves.

(b)		IB Trading VaR includes predominantly all trading activities in IB, as well as syndicated lending facilities that the Firm intends to distribute; however, particular risk parameters of certain products are not fully captured, such as correlation risk. IB Trading VaR does not include the debit valuation adjustments (“DVA”) taken on derivative and structured liabilities to reflect the credit quality of the Firm.

(c)		Credit Portfolio VaR includes the derivative credit valuation adjustments (“CVA”), hedges of the CVA and mark-to-market hedges of the retained loan portfolio, which are all reported in principal transactions revenue. This VaR does not include the retained loan portfolio.

(d)		Consumer Lending VaR includes the Firm’s mortgage pipeline and warehouse, MSR and all related hedges.

(e)		Chief Investment Office (CIO) VaR includes positions, primarily in debt securities and credit products, used to manage structural risk and other risks, including interest rate, and credit risks arising from the Firm’s ongoing business activities.

(f)		Total IB and other VaR excludes certain nontrading activity, such as Private Equity, principal investing (e.g., mezzanine financing, tax-oriented investments, etc.), balance sheet and capital management positions and longer-term corporate investments managed by the CIO.

Page 39



JPMORGAN CHASE & CO. CAPITAL AND OTHER SELECTED BALANCE SHEET ITEMS (in millions, except ratio data)


																June 30, 2010
																Change						YEAR-TO-DATE
	Jun 30			Mar 31			Dec 31			Sep 30			Jun 30			Mar 31			Jun 30							2010 Change
	2010			2010			2009			2009			2009			2010			2009			2010		2009		2009
CAPITAL RATIOS
Tier 1 capital	$	137,077	(d)	$	131,350		$	132,971		$	126,541		$	122,174			4	%		12	%
Total capital		178,291	(d)		173,332			177,073			171,804			167,767			3			6
Tier 1 common capital (a)		108,175	(d)		103,908			105,284			101,420			96,850			4			12
Risk-weighted assets		1,130,890	(d)		1,147,008			1,198,006			1,237,760			1,260,237			(1	)		(10	)
Adjusted average assets		1,983,839	(d)		1,981,060			1,933,767			1,940,689			1,969,339			—			1
Tier 1 capital ratio		12.1	% (d)		11.5	%		11.1	%		10.2	%		9.7	%
Total capital ratio		15.8	(d)		15.1			14.8			13.9			13.3
Tier 1 common capital ratio (a)		9.6	(d)		9.1			8.8			8.2			7.7
Tier 1 leverage ratio		6.9	(d)		6.6			6.9			6.5			6.2

TANGIBLE COMMON EQUITY (PERIOD-END) (b)
Common stockholders’ equity	$	162,968		$	156,569		$	157,213		$	154,101		$	146,614			4			11
Less: Goodwill		48,320			48,359			48,357			48,334			48,288			—			—
Less: Other intangible assets		4,178			4,383			4,621			4,862			5,082			(5	)		(18	)
Add: Deferred tax liabilities (c)		2,584			2,544			2,538			2,527			2,535			2			2

Total tangible common equity		113,054			106,371			106,773			103,432			95,779			6			18


TANGIBLE COMMON EQUITY (AVERAGE) (b)
Common stockholders’ equity		159,069			156,094			156,525			149,468			140,865			2			13		$	157,590	$	138,691		14	%
Less: Goodwill		48,348			48,542			48,341			48,328			48,273			—			—			48,445		48,173		1
Less: Other intangible assets		4,265			4,307			4,741			4,984			5,218			(1	)		(18	)		4,285		5,329		(20	)
Add: Deferred tax liabilities (c)		2,564			2,541			2,533			2,531			2,518			1			2			2,553		2,562		—

Total tangible common equity		109,020			105,786			105,976			98,687			89,892			3			21			107,413		87,751		22


INTANGIBLE ASSETS (PERIOD-END)
Goodwill		48,320			48,359			48,357			48,334			48,288			—			—
Mortgage servicing rights		11,853			15,531			15,531			13,663			14,600			(24	)		(19	)
Purchased credit card relationships		1,051			1,153			1,246			1,342			1,431			(9	)		(27	)
All other intangibles		3,127			3,230			3,375			3,520			3,651			(3	)		(14	)

Total intangibles		64,351			68,273			68,509			66,859			67,970			(6	)		(5	)


DEPOSITS (PERIOD-END)
U.S. offices:
Noninterest-bearing		208,064			210,982			204,003			195,561			192,247			(1	)		8
Interest-bearing		433,764			436,914			439,104			415,122			433,862			(1	)		—
Non-U.S. offices:
Noninterest-bearing		9,094			10,062			8,082			9,390			8,291			(10	)		10
Interest-bearing		236,883			267,345			287,178			247,904			232,077			(11	)		2

Total deposits		887,805			925,303			938,367			867,977			866,477			(4	)		2


(a)		The Firm uses Tier 1 common capital along with the other capital measures to assess and monitor its capital position. The Tier 1 common capital ratio is Tier 1 common capital divided by risk-weighted assets. For further discussion of Tier 1 common capital ratio, see page 42.

(b)		The Firm uses return on tangible common equity, a non-GAAP financial measure, to evaluate the Firm’s use of equity and to facilitate comparisons with competitors. For further discussion of ROTCE, see page 42.

(c)		Represents deferred tax liabilities related to tax-deductible goodwill and to identifiable intangibles created in non-taxable transactions, which are netted against goodwill and other intangibles when calculating TCE.

(d)		Estimated.

Page 40



JPMORGAN CHASE & CO. PER SHARE-RELATED INFORMATION (in millions, except per share and ratio data)


	QUARTERLY TRENDS																					YEAR-TO-DATE
																2Q10 Change												2010 Change
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09			2010			2009			2009
EARNINGS PER SHARE DATA
Basic earnings per share:
Income before extraordinary gain	$	4,795		$	3,326		$	3,278		$	3,512		$	2,721			44	%		76	%	$	8,121		$	4,862			67	%
Extraordinary gain		—			—			—			76			—			—			—			—			—			—

Net income		4,795			3,326			3,278			3,588			2,721			44			76			8,121			4,862			67
Less: Preferred stock dividends		163			162			162			163			473			1			(66	)		325			1,002			(68	)
Less: Accelerated amortization from redemption of preferred stock issued to the U.S. Treasury (a)		—			—			—			—			1,112			—		NM				—			1,112		NM

Net income applicable to common equity		4,632			3,164			3,116			3,425			1,136			46			308			7,796			2,748			184
Less: Dividends and undistributed earnings allocated to participating securities		269			190			164			185			64			42			320			461			157			194

Net income applicable to common stockholders	$	4,363		$	2,974		$	2,952		$	3,240		$	1,072			47			307		$	7,335		$	2,591			183


Total weighted-average basic shares outstanding		3,983.5			3,970.5			3,946.1			3,937.9			3,811.5			—			5			3,977.0			3,783.6			5

Income before extraordinary gain per share (a)	$	1.10		$	0.75		$	0.75		$	0.80		$	0.28			47			293		$	1.84		$	0.68			171
Extraordinary gain per share		—			—			—			0.02			—			—			—			—			—			—

Net income per share (a)	$	1.10		$	0.75		$	0.75		$	0.82		$	0.28			47			293		$	1.84		$	0.68			171


Diluted earnings per share:
Net income applicable to common stockholders	$	4,363		$	2,974		$	2,952		$	3,240		$	1,072			47			307		$	7,335		$	2,591			183

Total weighted-average basic shares outstanding		3,983.5			3,970.5			3,946.1			3,937.9			3,811.5			—			5			3,977.0			3,783.6			5
Add: Employee stock options and SARs (b)		22.1			24.2			28.0			24.1			12.6			(9	)		75			23.2			7.8			197

Total weighted-average diluted shares outstanding (c)		4,005.6			3,994.7			3,974.1			3,962.0			3,824.1			—			5			4,000.2			3,791.4			6

Income before extraordinary gain per share (a)	$	1.09		$	0.74		$	0.74		$	0.80		$	0.28			47			289		$	1.83		$	0.68			169
Extraordinary gain per share		—			—			—			0.02			—			—			—			—			—			—

Net income per share (a)	$	1.09		$	0.74		$	0.74		$	0.82		$	0.28			47			289		$	1.83		$	0.68			169


COMMON SHARES OUTSTANDING
Common shares — at period end (d)		3,975.8			3,975.4			3,942.0			3,938.7			3,924.1			—			1			3,975.8			3,924.1			1
Cash dividends declared per share	$	0.05		$	0.05		$	0.05		$	0.05		$	0.05			—			—		$	0.10		$	0.10			—
Book value per share		40.99			39.38			39.88			39.12			37.36			4			10			40.99			37.36			10
Dividend payout ratio		5	%		7	%		7	%		6	%		14	%								5	%		15	%

SHARE PRICE
High	$	48.20		$	46.05		$	47.47		$	46.50		$	38.94			5			24		$	48.20		$	38.94			24
Low		36.51			37.03			40.04			31.59			25.29			(1	)		44			36.51			14.96			144
Close		36.61			44.75			41.67			43.82			34.11			(18	)		7			36.61			34.11			7
Market capitalization		145,554			177,897			164,261			172,596			133,852			(18	)		9			145,554			133,852			9

STOCK REPURCHASE PROGRAM
Aggregate repurchases	$	135.3		$	—		$	—		$	—		$	—		NM			NM			$	135.3		$	—		NM
Common shares repurchased		3.5			—			—			—			—		NM			NM				3.5			—		NM
Average purchase price	$	38.73		$	—		$	—		$	—		$	—		NM			NM			$	38.73		$	—		NM


(a)		The calculation of second quarter 2009 earnings per share includes a one-time non-cash reduction of $1.1 billion, or $0.27 per share, resulting from the redemption of Series K preferred stock issued to the U.S. Treasury.

(b)		Excluded from the computation of diluted EPS (due to the antidilutive effect) were options issued under employee benefit plans and warrants originally issued under the U.S. Treasury’s Capital Purchase Program to purchase shares of the Firm’s common stock aggregating 224 million, 239 million, 147 million, 241 million and 315 million, for the quarters ended June 30, 2010, March 31, 2010, December 31, 2009, September 30, 2009 and June 30, 2009, respectively.

(c)		Participating securities were included in the calculation of diluted EPS using the two-class method, as this computation was more dilutive than the calculation using the treasury stock method.

(d)		On June 5, 2009, the Firm issued $5.8 billion, or 163 million shares, of its common stock at $35.25 per share.

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JPMORGAN CHASE & CO. Non-GAAP Financial Measures

The following are several of the non-GAAP measures that the Firm uses for various reasons, including: (i) to allow management to assess the comparability of revenue arising from both taxable and tax-exempt sources, (ii) to assess and compare the quality and composition of the Firm’s capital with the capital of other financial services companies, and (iii) more generally, to provide a more meaningful measure of certain metrics that enables comparability with prior periods, as well as with competitors.

(a)		In addition to analyzing the Firm’s results on a reported basis, management reviews the Firm’s results and the results of the 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 to present total net revenue for the Firm (and each of the business segments) on a FTE basis. Accordingly, revenue from tax-exempt securities and investments that receive tax credits is presented in the managed results on a basis comparable to taxable securities and investments. This non-GAAP financial measure allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The corresponding income tax impact related to these items is recorded within income tax expense. These adjustments have no impact on net income as reported by the Firm as a whole or by the lines of business.

		Prior to January 1, 2010, the Firm’s managed-basis presentation also included certain reclassification adjustments that assumed credit card loans securitized by CS remained on the balance sheet. Effective January 1, 2010, the Firm adopted new accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of VIEs. Additionally, the new guidance required the Firm to consolidate its Firm-sponsored credit card securitizations trusts. The income, expense and credit costs associated with these securitization activities are now recorded in the 2010 Consolidated Statements of Income in the same classifications that were previously used to report such items on a managed basis. As a result of the consolidation of the credit card securitization trusts, reported and managed basis relating to credit card securitizations are comparable for periods beginning after January 1, 2010.

		The presentation in 2009 of CS results on a managed basis assumed that credit card loans that had been securitized and sold in accordance with U.S. GAAP remained on the Consolidated Balance Sheets, and that the earnings on the securitized loans were classified in the same manner as the earnings on retained loans recorded on the Consolidated Balance Sheets. JPMorgan Chase used the concept of managed basis to evaluate the credit performance and overall financial performance of the entire managed credit card portfolio. Operations were funded and decisions were made about allocating resources, such as employees and capital, based on managed financial information. In addition, the same underwriting standards and ongoing risk monitoring are used for both loans on the Consolidated Balance Sheets and securitized loans. Although securitizations result in the sale of credit card receivables to a trust, JPMorgan Chase retains the ongoing customer relationships, as the customers may continue to use their credit cards; accordingly, the customer’s credit performance affects both the securitized loans and the loans retained on the Consolidated Balance Sheets. JPMorgan Chase believed that this managed-basis information was useful to investors, as it enabled them to understand both the credit risks associated with the loans reported on the Consolidated Balance Sheets and the Firm’s retained interests in securitized loans

(b)		The ratio for the allowance for loan losses to end-of-period loans excludes the following: loans accounted for at fair value and loans held-for-sale; purchased credit-impaired loans; the allowance for loan losses related to purchased credit-impaired loans; and loans from the Washington Mutual Master Trust, which were consolidated on the Firm’s balance sheet at fair value during the second quarter of 2009. Additionally, Real Estate Portfolios net charge-off rates exclude the impact of purchased credit-impaired loans.

(c)		Return on Tangible Common Equity is Net income applicable to common equity divided by total average common stockholders’ equity (i.e., total stockholders’ equity less preferred stock) less identifiable intangible assets (other than MSRs) and goodwill, net of related deferred tax liabilities. The Firm uses return on tangible common equity, a non-GAAP financial measure, to evaluate the Firm’s use of equity and to facilitate comparisons with competitors.

(d)		Tier 1 common capital ratio is Tier 1 common capital divided by risk-weighted assets. Tier 1 Common Capital (“Tier 1 Common”) is defined as Tier 1 capital less elements of capital not in the form of common equity – such as qualifying perpetual preferred stock, qualifying noncontrolling interest in subsidiaries and qualifying trust preferred capital debt securities. Tier 1 Common, a non-GAAP financial measure, is used by banking regulators, investors and analysts to assess and compare the quality and composition of the Firm’s capital with the capital of other financial services companies. The Firm uses Tier 1 Common along with the other capital measures to assess and monitor its capital position.

(e)		TSS Firmwide revenue includes certain TSS product revenue and liability balances reported in other lines of business, mainly CB, RFS and AM, related to customers who are also customers of those lines of business.

(f)		Retail Financial Services uses the overhead ratio (excluding the amortization of core deposit intangibles (“CDI”)), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in the overhead ratio calculation would result in a higher overhead ratio in the earlier years and a lower overhead ratio in later years. This method would therefore result in an improving overhead ratio over time, all things remaining equal. The non-GAAP ratio excludes Retail Banking’s CDI amortization expense related to prior business combination transactions.

(g)		The calculation of the second quarter 2009 earnings per share and net income applicable to common equity includes a one-time, noncash reduction of $1.1 billion, or $0.27 per share, resulting from repayment of TARP preferred capital. Excluding this reduction, the adjusted ROE and ROTCE for the second quarter of 2009 would have been 6% and 10%, respectively. The Firm views the adjusted ROE and ROTCE, both non-GAAP financial measures, as meaningful because they enable the comparability to prior periods.

(h)		Adjusted assets, a non-GAAP financial measure, equals total assets minus (1) securities purchased under resale agreements and securities borrowed less securities sold, not yet purchased; (2) assets of variable interest entities (“VIEs”); (3) cash and securities segregated and on deposit for regulatory and other purposes; (4) goodwill and intangibles; (5) securities received as collateral; and (6) investments purchased under the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility. The amount of adjusted assets is presented to assist the reader in comparing IB’s asset and capital levels to other investment banks in the securities industry. Asset-to-equity leverage ratios are commonly used as one measure to assess a company’s capital adequacy. IB believes an adjusted asset amount that excludes the assets discussed above, which were considered to have a low risk profile, provides a more meaningful measure of balance sheet leverage in the securities industry.

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JPMORGAN CHASE & CO. Glossary of Terms

ACH: Automated Clearing House.

Allowance for loan losses to total loans: Represents period-end Allowance for loan losses divided by retained loans.

Average managed assets: Refers to total assets on the Firm’s Consolidated Balance Sheets plus credit card receivables that have been securitized and removed from the Firm’s Consolidated Balance Sheets, for periods ended prior to the January 1, 2010, adoption of new FASB guidance requiring the consolidation of the Firm-sponsored credit card securitization trusts.

Bear Stearns Merger: Effective May 30, 2008, JPMorgan Chase merged with The Bear Stearns Companies Inc. (“Bear Stearns”) and Bear Stearns became a wholly-owned subsidiary of JPMorgan Chase. The final total purchase price to complete the merger was $1.5 billion.

Beneficial interest issued by consolidated VIEs: Represents the interest of third-party holders of debt/equity securities, or other obligations, issued by VIEs that JPMorgan Chase consolidates. The underlying obligations of the VIEs consist of short-term borrowings, commercial paper and long-term debt. The related assets consist of trading assets, available-for-sale securities, loans and other assets.

Contractual credit card charge-off: In accordance with the Federal Financial Institutions Examination Council policy, credit card loans are charged off by the end of the month in which the account becomes 180 days past due or within 60 days from receiving notification about a specific event (e.g., bankruptcy of the borrower), whichever is earlier.

Corporate/Private Equity: Includes Private Equity, Treasury and Chief Investment Office, and Corporate Other, which includes other centrally managed expense and discontinued operations.

Credit card securitizations: For periods ended prior to the January 1, 2010, adoption of new guidance relating to the accounting for the transfer of financial assets and the consolidation of VIEs, Card Services’ results were presented on a “managed” basis that assumed that credit card loans that had been securitized and sold in accordance with U.S. GAAP remained on the Consolidated Balance Sheets and that earnings on the securitized loans were classified in the same manner as the earnings on retained loans recorded on the Consolidated Balance Sheets. “Managed” results excluded the impact of credit card securitizations on total net revenue, the provision for credit losses, net charge-offs and loan receivables. Securitization did not change reported net income; however, it did affect the classification of items on the Consolidated Statements of Income and Consolidated Balance Sheets.

FASB: Financial Accounting Standards Board.

Interests in purchased receivables: Represents an ownership interest in cash flows of an underlying pool of receivables transferred by a third-party seller into a bankruptcy-remote entity, generally a trust.

JPMorgan Chase’s internal risk ratings: Generally correspond to the following ratings as defined by Standard & Poor’s / Moody’s: Investment-Grade: AAA / Aaa to BBB- / Baa3; Noninvestment-Grade: BB+ / Ba1 and below.

Investment-grade: An indication of credit quality based on JPMorgan Chase’s internal risk assessment system. “Investment-grade” generally represents a risk profile similar to a rating of a “BBB-”/“Baa3” or better, as defined by independent rating agencies.

Managed basis: A non-GAAP presentation of financial results that includes reclassifications to present revenue on a fully taxable-equivalent basis, and for periods ended prior to the January 1, 2010, adoption of new accounting guidance relating to the accounting for the transfer of financial assets and the consolidation of VIEs related to credit card securitizations. Management uses this non-GAAP financial measure at the segment level, because it believes this provides information to enable investors to understand the underlying operational performance and trends of the particular business segment and facilitates a comparison of the business segment with the performance of competitors.

Managed credit card receivables: Refers to credit card receivables on the Firm’s Consolidated Balance Sheets plus credit card receivables that have been securitized and removed from the Firm’s Consolidated Balance Sheets, for periods ended prior to the January 1, 2010, adoption of new guidance requiring the consolidation of the Firm-sponsored credit card securitization trusts.

Mark-to-market exposure: A measure, at a point in time, of the value of a derivative or foreign exchange contract in the open market. When the mark-to-market value is positive, it indicates the counterparty owes JPMorgan Chase and, therefore, creates a credit risk for the Firm. When the mark-to-market value is negative, JPMorgan Chase owes the counterparty; in this situation, the Firm has liquidity risk.

Merger costs: Reflects costs associated with the Washington Mutual transaction and the Bear Stearns merger in 2008.

MSR risk management revenue: Includes changes in MSR asset fair value due to inputs or assumptions in model and derivative valuation adjustments.

Net charge-off ratio: Represents net charge-offs (annualized) divided by average retained loans for the reporting period.

Net yield on interest-earning assets: The average rate for interest-earning assets less the average rate paid for all sources of funds.

NM: Not meaningful.

Overhead ratio: Noninterest expense as a percentage of total net revenue.

Page 43



JPMORGAN CHASE & CO. Glossary of Terms

Participating securities: Represent unvested stock-based compensation awards containing nonforfeitable rights to dividends or dividend equivalents (collectively, “dividends”), which are included in the EPS calculation using the two-class method. JPMorgan Chase grants restricted stock and RSUs to certain employees under its stock-based compensation programs, which entitle the recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. These unvested awards meet the definition of participating securities. Under the two-class method, all earnings (distributed and undistributed) are allocated to each class of common stock and participating securities, based on their respective rights to receive dividends.

Pre-provision profit: The Firm believes that this financial measure is useful in assessing the ability of a lending institution to generate income in excess of its provision for credit losses.

Pretax margin: Represents income before income tax expense divided by total net revenue, which is, in management’s view, a comprehensive measure of pretax performance derived by measuring earnings after all costs are taken into consideration. It is, therefore, another basis that management uses to evaluate the performance of TSS and AM against the performance of their respective competitors.

Principal transactions: Realized and unrealized gains and losses from trading activities (including physical commodities inventories that are accounted for at the lower of cost or fair value) and changes in fair value associated with financial instruments held predominantly by the Investment Bank for which the fair value option was elected. Principal transactions revenue also includes private equity gains and losses.

Reported basis: Financial statements prepared under U.S. GAAP, which excludes the impact of taxable-equivalent adjustments. For periods ended prior to the January 1, 2010, adoption of new guidance requiring the consolidation of the Firm-sponsored credit card securitization trusts, the reported basis included the impact of credit card securitizations.

Retained loans: Loans that are held for investment, which excludes loans held-for-sale and loans at fair value.

Taxable-equivalent basis: Total net revenue for each of the business segments and the Firm is presented on a tax-equivalent basis. Accordingly, revenue from tax-exempt securities and investments that receive tax credits is presented in the managed results on a basis comparable to fully taxable securities and investments. This non-GAAP financial measure allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The corresponding income tax impact related to these items is recorded within income tax expense.

Unaudited: Financial statements and information that have not been subjected to auditing procedures sufficient to permit an independent certified public accountant to express an opinion.

U.S. GAAP: Accounting principles generally accepted in the United States of America.

Value-at-risk (“VaR”): A measure of the dollar amount of potential loss from adverse market moves in an ordinary market environment.

Washington Mutual Transaction: On September 25, 2008, JPMorgan Chase acquired the banking operations of Washington Mutual Bank (“Washington Mutual”) from the Federal Deposit Insurance Corporation (“FDIC”) for $1.9 billion. The final allocation of the purchase price resulted in the recognition of negative goodwill and an extraordinary gain of $2.0 billion.

Page 44



JPMORGAN CHASE & CO. Glossary of Terms

INVESTMENT BANKING (IB)

IB’s revenue comprises the following:

Investment banking fees include advisory, equity underwriting, bond underwriting and loan syndication fees.

Fixed income markets primarily include client and portfolio management revenue related to market-making across global fixed income markets, including foreign exchange, interest rate, credit and commodities markets.

Equities markets primarily include client and portfolio management revenue related to market-making across global equity products, including cash instruments, derivatives and convertibles.

Credit portfolio revenue includes net interest income, fees and loan sale activity, as well as gains or losses on securities received as part of a loan restructuring, for IB’s credit portfolio. Credit portfolio revenue also includes the results of risk management related to the Firm’s lending and derivative activities, and changes in the credit valuation adjustment, which is the component of the fair value of a derivative that reflects the credit quality of the counterparty.

RETAIL FINANCIAL SERVICES (RFS)

Description of selected business metrics within Retail Banking:

Personal bankers – Retail branch office personnel who acquire, retain and expand new and existing customer relationships by assessing customer needs and recommending and selling appropriate banking products and services.

Sales specialists – Retail branch office personnel who specialize in the marketing of a single product, including mortgages, investments, and business banking, by partnering with the personal bankers.

Mortgage banking revenue comprises the following:

Production revenue includes net gains or losses on originations and sales of prime and subprime mortgage loans, other production-related fees and losses related to the repurchase of previously-sold loans.

Net mortgage servicing revenue includes the following components:

Operating revenue comprises:

	•		all gross income earned from servicing third-party mortgage loans, including stated service fees, excess service fees, late fees and other ancillary fees; and

	•		modeled servicing portfolio runoff (or time decay).

Risk management comprises:

	•		changes in MSR asset fair value due to market-based inputs, such as interest rates and volatility, as well as updates to assumptions used in the MSR valuation model; and

	•		derivative valuation adjustments and other, which represents changes in the fair value of derivative instruments used to offset the impact of changes in the market-based inputs to the MSR valuation model.

RFS (continued)

Mortgage origination channels comprise the following:

Retail – Borrowers who are buying or refinancing a home through direct contact with a mortgage banker employed by the Firm using a branch office, the Internet or by phone. Borrowers are frequently referred to a mortgage banker by a banker in a Chase branch, real estate brokers, home builders or other third parties.

Wholesale – A third-party mortgage broker refers loan applications to a mortgage banker at the Firm. Brokers are independent loan originators that specialize in finding and counseling borrowers but do not provide funding for loans. The Firm exited the broker channel during 2008.

Correspondent – Banks, thrifts, other mortgage banks and other financial institutions that sell closed loans to the Firm.

Correspondent negotiated transactions (“CNT”) – These transactions occur when mid- to large-sized mortgage lenders, banks and bank-owned mortgage companies sell servicing to the Firm on an as-originated basis, and exclude purchased bulk servicing transactions. These transactions supplement traditional production channels and provide growth opportunities in the servicing portfolio in stable and periods of rising interest rates.

CARD SERVICES (CS)

Description of selected business metrics within CS:

Sales volume – Dollar amount of cardmember purchases, net of returns.

Open accounts – Cardmember accounts with charging privileges.

Merchant acquiring business – A business that processes bank card transactions for merchants.

Bank card volume – Dollar amount of transactions processed for merchants.

Total transactions – Number of transactions and authorizations processed for merchants.

Page 45



JPMORGAN CHASE & CO. Glossary of Terms

COMMERCIAL BANKING (CB)

CB Client Segments:

1.		Middle Market Banking covers corporate, municipal, financial institution and not-for-profit clients, with annual revenue generally ranging between $10 million and $500 million.

2.		Mid-Corporate Banking covers clients with annual revenue generally ranging between $500 million and $2 billion and focuses on clients that have broader investment banking needs.

3.		Commercial Term Lending primarily provides term financing to real estate investors/owners for multi-family properties as well as financing office, retail and industrial properties.

4.		Real Estate Banking provides full-service banking to investors and developers of institutional-grade real estate properties.

CB Revenue:

1.		Lending includes a variety of financing alternatives, which are primarily provided on a basis secured by receivables, inventory, equipment, real estate or other assets. Products include term loans, revolving lines of credit, bridge financing, asset-based structures and leases.

2.		Treasury services includes a broad range of products and services enabling clients to transfer, invest and manage the receipt and disbursement of funds, while providing the related information reporting. These products and services include U.S. dollar and multi-currency clearing, ACH, lockbox, disbursement and reconciliation services, check deposits, other check and currency-related services, trade finance and logistics solutions, commercial card and deposit products, sweeps and money market mutual funds.

3.		Investment banking products provide clients with sophisticated capital-raising alternatives, as well as balance sheet and risk management tools through loan syndications, investment-grade debt, asset-backed securities, private placements, high-yield bonds, equity underwriting, advisory, interest rate derivatives, foreign exchange hedges and securities sales.

CB selected business metrics:

1.		Liability balances include deposits, as well as deposits that are swept to on—balance sheet liabilities (e.g., commercial paper, federal funds purchased, time deposits and securities loaned or sold under repurchase agreements) as part of customer cash management programs.

2.		IB revenue, gross represents total revenue related to investment banking products sold to CB clients.

TREASURY & SECURITIES SERVICES (TSS)

Treasury & Securities Services firmwide metrics include certain TSS product revenue and liability balances reported in other lines of business related to customers who are also customers of those other lines of business. In order to capture the firmwide impact of TS and TSS products and revenue, management reviews firmwide metrics such as liability balances, revenue and overhead ratios in assessing financial performance for TSS. Firmwide metrics are necessary, in management’s view, in order to understand the aggregate TSS business.

Description of selected business metrics within TSS:

Liability balances include deposits, as well as deposits that are swept to on—balance sheet liabilities (e.g., commercial paper, federal funds purchased, time deposits and securities loaned or sold under repurchase agreements) as part of customer cash management programs.

ASSET MANAGEMENT (AM)

Assets under management – Represent assets actively managed by Asset Management on behalf of Institutional, Retail, Private Banking, Private Wealth Management and JPMorgan Securities clients. Includes ”committed capital not called”, on which AM earns fees. Excludes assets managed by American Century Companies, Inc., in which the Firm has a 42% ownership interest at June 30, 2010.

Assets under supervision – Represents assets under management as well as custody, brokerage, administration and deposit accounts.

Alternative assets – The following types of assets constitute alternative investments – Hedge funds, currency, real estate and private equity.

AM’s client segments comprise the following:

Institutional brings comprehensive global investment services – including asset management, pension analytics, asset/liability management and active risk budgeting strategies – to corporate and public institutions, endowments, foundations, not-for-profit organizations and governments worldwide.

Retail provides worldwide investment management services and retirement planning and administration through third-party and direct distribution of a full range of investment vehicles.

The Private Bank addresses every facet of wealth management for ultra-high-net-worth individuals and families worldwide, including investment management, capital markets and risk management, tax and estate planning, banking, capital raising and specialty-wealth advisory services.

Private Wealth Management offers high-net-worth individuals, families and business owners in the U.S. comprehensive wealth management solutions, including investment management, capital markets and risk management, tax and estate planning, banking, and specialty-wealth advisory services.

JPMorgan Securities provides investment advice and wealth management services to high-net-worth individuals, money managers, and small corporations.

Page 46



JPMORGAN CHASE & CO. DISCLOSURE CHANGE SUMMARY

Commencing with the second quarter of 2010, JPMorgan Chase & Co. implemented some formatting changes to certain schedules in its Earnings Release Financial Supplement. The changes were made to make the presentation of the financial information contained in the Earnings Release Financial Supplement easier to read, reduce redundancies and to conform certain disclosures with those in the Form 10-Q/10-K. None of the changes affect previously disclosed financial data.

The following highlights some of the schedules that included more significant changes:


Schedule Title	Page Reference		Brief Description of the Change

Consolidated Financial Highlights		2	Split into two pages, with selected balance sheet, headcount and line of business net income/(loss) metrics moved to the next page

Statement of Income		4	Financial ratios based on income before extraordinary gain moved to the footnote on the Washington Mutual transaction

Condensed Average Balance Sheet		6	Combined goodwill and other intangibles with all other noninterest-earning assets; added trading liabilities – debt instruments and its related yield to conform with the Form 10-Q/10-K format; added two new line disclosures, noninterest-bearing deposits and trading liabilities – equity instruments, to conform with the Form 10-Q/10-K format

Asset Management Financial Highlights		26	Split first page into two, with business metrics and credit data and quality statistics moved to the next page

Credit-Related Information		32	Credit Exposure schedule split into two pages, with risk profile of wholesale credit exposure moved to the next page

		36	Allowance for Credit Losses schedule split into two pages, with allowance components and ratios moved to the next page; added two new line disclosures to conform with the Form 10-Q/10-K format (these are: consumer allowance to consumer retained nonperforming loans adjusted for credit-impaired loans; and consumer allowance to consumer retained nonperforming loans excluding credit card and adjusted for credit- impaired loans)

Per Share-Related Information		41	Added a set of disclosures related to stock repurchases

Page 47

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