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

Attached files

file	filename
8-K - FORM 8-K - JPMORGAN CHASE & CO	y88989e8vk.htm
EX-12.2 - EX-12.2 - JPMORGAN CHASE & CO	y88989exv12w2.htm
EX-99.1 - EX-99.1 - JPMORGAN CHASE & CO	y88989exv99w1.htm
EX-12.1 - EX-12.1 - JPMORGAN CHASE & CO	y88989exv12w1.htm

Exhibit 99.2

EARNINGS RELEASE FINANCIAL SUPPLEMENT

FOURTH 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		32-37

Market Risk-Related Information		38

Supplemental Detail
Capital and Other Selected Balance Sheet Items		39
Mortgage Loan Repurchase Liability		40
Per Share-Related Information		41

Non-GAAP Financial Measures		42

Glossary of Terms		43-46

Page 1


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


	QUARTERLY TRENDS																					FULL YEAR
																4Q10 Change												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
SELECTED INCOME STATEMENT DATA:
Reported Basis
Total net revenue	$	26,098		$	23,824		$	25,101		$	27,671		$	23,164			10	%		13	%	$	102,694		$	100,434			2	%
Total noninterest expense		16,043			14,398			14,631			16,124			12,004			11			34			61,196			52,352			17
Pre-provision profit		10,055			9,426			10,470			11,547			11,160			7			(10	)		41,498			48,082			(14	)
Provision for credit losses		3,043			3,223			3,363			7,010			7,284			(6	)		(58	)		16,639			32,015			(48	)
Income before extraordinary gain		4,831			4,418			4,795			3,326			3,278			9			47			17,370			11,652			49
Extraordinary gain (a)		—			—			—			—			—			—			—			—			76		NM
NET INCOME		4,831			4,418			4,795			3,326			3,278			9			47			17,370			11,728			48

Managed Basis (b)
Total net revenue	$	26,722		$	24,335		$	25,613		$	28,172		$	25,236			10			6		$	104,842		$	108,647			(4	)
Total noninterest expense		16,043			14,398			14,631			16,124			12,004			11			34			61,196			52,352			17
Pre-provision profit		10,679			9,937			10,982			12,048			13,232			7			(19	)		43,646			56,295			(22	)
Provision for credit losses		3,043			3,223			3,363			7,010			8,901			(6	)		(66	)		16,639			38,458			(57	)
Income before extraordinary gain		4,831			4,418			4,795			3,326			3,278			9			47			17,370			11,652			49
Extraordinary gain (a)		—			—			—			—			—			—			—			—			76		NM
NET INCOME		4,831			4,418			4,795			3,326			3,278			9			47			17,370			11,728			48

PER COMMON SHARE DATA:
Basic Earnings
Income before extraordinary gain		1.13			1.02			1.10			0.75			0.75			11			51			3.98			2.25			77
Net income		1.13			1.02			1.10			0.75			0.75			11			51			3.98			2.27			75

Diluted Earnings
Income before extraordinary gain		1.12			1.01			1.09			0.74			0.74			11			51			3.96			2.24			77
Net income		1.12			1.01			1.09			0.74			0.74			11			51			3.96			2.26			75

Cash dividends declared		0.05			0.05			0.05			0.05			0.05			—			—			0.20			0.20			—
Book value		43.04			42.29			40.99			39.38			39.88			2			8			43.04			39.88			8
Closing share price		42.42			38.06			36.61			44.75			41.67			11			2			42.42			41.67			2
Market capitalization		165,875			149,418			145,554			177,897			164,261			11			1			165,875			164,261			1

COMMON SHARES OUTSTANDING:
Weighted-average diluted shares (c)		3,935.2			3,971.9			4,005.6			3,994.7			3,974.1			(1	)		(1	)		3,976.9			3,879.7			3
Common shares at period-end		3,910.3			3,925.8			3,975.8			3,975.4			3,942.0			—			(1	)		3,910.3			3,942.0			(1	)

FINANCIAL RATIOS: (d)
Net income:
Return on common equity (“ROE”)		11	%		10	%		12	%		8	%		8	%								10	%		6	%
Return on tangible common equity (“ROTCE”) (e)		16			15			17			12			12									15			10
Return on assets (“ROA”)		0.92			0.86			0.94			0.66			0.65									0.85			0.58

CAPITAL RATIOS:
Tier 1 capital ratio		12.1	(g)		11.9			12.1			11.5			11.1
Total capital ratio		15.5	(g)		15.4			15.8			15.1			14.8
Tier 1 common capital ratio (f)		9.8	(g)		9.5			9.6			9.1			8.8


(a)		On September 25, 2008, JPMorgan Chase acquired the banking operations of Washington Mutual Bank (“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.

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

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

(d)		Quarterly 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 ratio and headcount data)


	QUARTERLY TRENDS																					FULL YEAR
																4Q10 Change												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
SELECTED BALANCE SHEET DATA (Period-end) (a)
Total assets	$	2,117,605		$	2,141,595		$	2,014,019		$	2,135,796		$	2,031,989			(1	)%		4	%	$	2,117,605		$	2,031,989			4	%
Wholesale loans		227,633			220,597			216,826			214,290			204,175			3			11			227,633			204,175			11
Consumer loans		465,294			469,934			482,657			499,509			429,283			(1	)		8			465,294			429,283			8
Deposits		930,369			903,138			887,805			925,303			938,367			3			(1	)		930,369			938,367			(1	)
Common stockholders’ equity		168,306			166,030			162,968			156,569			157,213			1			7			168,306			157,213			7
Total stockholders’ equity		176,106			173,830			171,120			164,721			165,365			1			6			176,106			165,365			6

Deposits-to-loans ratio		134	%		131	%		127	%		130	%		148	%								134	%		148	%

Headcount		239,831			236,810			232,939			226,623			222,316			1			8			239,831			222,316			8

LINE OF BUSINESS NET INCOME/(LOSS)
Investment Bank	$	1,501		$	1,286		$	1,381		$	2,471		$	1,901			17			(21	)	$	6,639		$	6,899			(4	)
Retail Financial Services		708			907			1,042			(131	)		(399	)		(22	)	NM				2,526			97		NM
Card Services		1,299			735			343			(303	)		(306	)		77		NM				2,074			(2,225	)	NM
Commercial Banking		530			471			693			390			224			13			137			2,084			1,271			64
Treasury & Securities Services		257			251			292			279			237			2			8			1,079			1,226			(12	)
Asset Management		507			420			391			392			424			21			20			1,710			1,430			20
Corporate/Private Equity		29			348			653			228			1,197			(92	)		(98	)		1,258			3,030			(58	)

NET INCOME	$	4,831		$	4,418		$	4,795		$	3,326		$	3,278			9			47		$	17,370		$	11,728			48


(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																					FULL YEAR
																4Q10 Change												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
REVENUE
Investment banking fees	$	1,832		$	1,476		$	1,421		$	1,461		$	1,916			24	%		(4	)%	$	6,190		$	7,087			(13	)%
Principal transactions		1,915			2,341			2,090			4,548			838			(18	)		129			10,894			9,796			11
Lending- and deposit-related fees		1,545			1,563			1,586			1,646			1,765			(1	)		(12	)		6,340			7,045			(10	)
Asset management, administration and commissions		3,697			3,188			3,349			3,265			3,361			16			10			13,499			12,540			8
Securities gains		1,253			102			1,000			610			381		NM				229			2,965			1,110			167
Mortgage fees and related income		1,617			707			888			658			450			129			259			3,870			3,678			5
Credit card income		1,558			1,477			1,495			1,361			1,844			5			(16	)		5,891			7,110			(17	)
Other income		579			468			585			412			231			24			151			2,044			916			123

Noninterest revenue		13,996			11,322			12,414			13,961			10,786			24			30			51,693			49,282			5
Interest income		15,612			15,606			15,719			16,845			15,615			—			—			63,782			66,350			(4	)
Interest expense		3,510			3,104			3,032			3,135			3,237			13			8			12,781			15,198			(16	)

Net interest income		12,102			12,502			12,687			13,710			12,378			(3	)		(2	)		51,001			51,152			—

TOTAL NET REVENUE		26,098			23,824			25,101			27,671			23,164			10			13			102,694			100,434			2
Provision for credit losses		3,043			3,223			3,363			7,010			7,284			(6	)		(58	)		16,639			32,015			(48	)
NONINTEREST EXPENSE
Compensation expense		6,571			6,661			7,616			7,276			5,112			(1	)		29			28,124			26,928			4
Occupancy expense		1,045			884			883			869			944			18			11			3,681			3,666			—
Technology, communications and equipment expense		1,198			1,184			1,165			1,137			1,182			1			1			4,684			4,624			1
Professional and outside services		1,789			1,718			1,685			1,575			1,682			4			6			6,767			6,232			9
Marketing		584			651			628			583			536			(10	)		9			2,446			1,777			38
Other expense		4,616			3,082			2,419			4,441			2,262			50			104			14,558			7,594			92
Amortization of intangibles		240			218			235			243			256			10			(6	)		936			1,050			(11	)
Merger costs		—			—			—			—			30			—		NM				—			481		NM

TOTAL NONINTEREST EXPENSE		16,043			14,398			14,631			16,124			12,004			11			34			61,196			52,352			17

Income before income tax expense and extraordinary gain		7,012			6,203			7,107			4,537			3,876			13			81			24,859			16,067			55
Income tax expense (a)		2,181			1,785			2,312			1,211			598			22			265			7,489			4,415			70

Income before extraordinary gain		4,831			4,418			4,795			3,326			3,278			9			47			17,370			11,652			49
Extraordinary gain (b)		—			—			—			—			—			—			—			—			76		NM

NET INCOME	$	4,831		$	4,418		$	4,795		$	3,326		$	3,278			9			47		$	17,370		$	11,728			48


DILUTED EARNINGS PER SHARE
Income before extraordinary gain	$	1.12		$	1.01		$	1.09		$	0.74		$	0.74			11			51		$	3.96		$	2.24			77
Extraordinary gain		—			—			—			—			—			—			—			—			0.02		NM

NET INCOME	$	1.12		$	1.01		$	1.09		$	0.74		$	0.74			11			51		$	3.96		$	2.26			75


FINANCIAL RATIOS
Net income:
Return on equity		11	%		10	%		12	%		8	%		8	%								10	%		6	%
Return on tangible common equity (c)		16			15			17			12			12									15			10
Return on assets		0.92			0.86			0.94			0.66			0.65									0.85			0.58
Effective income tax rate (a)		31			29			33			27			15									30			27
Overhead ratio		61			60			58			58			52									60			52

EXCLUDING IMPACT OF MERGER COSTS (d)
Income before extraordinary gain	$	4,831		$	4,418		$	4,795		$	3,326		$	3,278			9			47		$	17,370		$	11,652			49
Merger costs (after-tax)		—			—			—			—			18			—		NM				—			298		NM

Income before extraordinary gain excl. merger costs	$	4,831		$	4,418		$	4,795		$	3,326		$	3,296			9			47		$	17,370		$	11,950			45

Diluted Earnings Per Share:
Income before extraordinary gain	$	1.12		$	1.01		$	1.09		$	0.74		$	0.74			11			51		$	3.96		$	2.24			77
Merger costs (after-tax)		—			—			—			—			0.01			—		NM				—			0.08		NM

Income before extraordinary gain excl. merger costs	$	1.12		$	1.01		$	1.09		$	0.74		$	0.75			11			49		$	3.96		$	2.32			71


(a)		The income tax expense in the first quarter of 2010 and fourth quarter of 2009 included 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.

(c)		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.

(d)		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)


																December 31, 2010
																Change
	Dec 31			Sep 30			Jun 30			Mar 31			Dec 31			Sep 30			Dec 31
	2010			2010			2010			2010			2009			2010			2009
ASSETS (a)
Cash and due from banks	$	27,567		$	23,960		$	32,806		$	31,422		$	26,206			15	%		5	%
Deposits with banks		21,673			31,077			39,430			59,014			63,230			(30	)		(66	)
Federal funds sold and securities purchased under resale agreements		222,554			235,390			199,024			230,123			195,404			(5	)		14
Securities borrowed		123,587			127,365			122,289			126,741			119,630			(3	)		3
Trading assets:
Debt and equity instruments		409,411			378,222			317,293			346,712			330,918			8			24
Derivative receivables		80,481			97,293			80,215			79,416			80,210			(17	)		—
Securities		316,336			340,168			312,013			344,376			360,390			(7	)		(12	)
Loans		692,927			690,531			699,483			713,799			633,458			—			9
Less: Allowance for loan losses		32,266			34,161			35,836			38,186			31,602			(6	)		2

Loans, net of allowance for loan losses		660,661			656,370			663,647			675,613			601,856			1			10
Accrued interest and accounts receivable		70,147			63,224			61,295			53,991			67,427			11			4
Premises and equipment		13,355			11,316			11,267			11,123			11,118			18			20
Goodwill		48,854			48,736			48,320			48,359			48,357			—			1
Mortgage servicing rights		13,649			10,305			11,853			15,531			15,531			32			(12	)
Other intangible assets		4,039			3,982			4,178			4,383			4,621			1			(13	)
Other assets		105,291			114,187			110,389			108,992			107,091			(8	)		(2	)

TOTAL ASSETS	$	2,117,605		$	2,141,595		$	2,014,019		$	2,135,796		$	2,031,989			(1	)		4


LIABILITIES (a)
Deposits	$	930,369		$	903,138		$	887,805		$	925,303		$	938,367			3			(1	)
Federal funds purchased and securities loaned or sold under repurchase agreements		276,644			314,161			237,455			295,171			261,413			(12	)		6
Commercial paper		35,363			38,611			41,082			50,554			41,794			(8	)		(15	)
Other borrowed funds		57,309			51,642			44,431			48,981			55,740			11			3
Trading liabilities:
Debt and equity instruments		76,947			82,919			74,745			78,228			64,946			(7	)		18
Derivative payables		69,219			74,902			60,137			62,741			60,125			(8	)		15
Accounts payable and other liabilities		170,330			169,365			160,478			154,185			162,696			1			5
Beneficial interests issued by consolidated VIEs		77,649			77,438			88,148			93,055			15,225			—			410
Long-term debt		247,669			255,589			248,618			262,857			266,318			(3	)		(7	)

TOTAL LIABILITIES		1,941,499			1,967,765			1,842,899			1,971,075			1,866,624			(1	)		4

STOCKHOLDERS’ EQUITY (a)
Preferred stock		7,800			7,800			8,152			8,152			8,152			—			(4	)
Common stock		4,105			4,105			4,105			4,105			4,105			—			—
Capital surplus		97,415			96,938			96,745			96,450			97,982			—			(1	)
Retained earnings		73,998			69,531			65,465			61,043			62,481			6			18
Accumulated other comprehensive income/(loss)		1,001			3,096			2,404			761			(91	)		(68	)	NM
Shares held in RSU Trust, at cost		(53	)		(68	)		(68	)		(68	)		(68	)		22			22
Treasury stock, at cost		(8,160	)		(7,572	)		(5,683	)		(5,722	)		(7,196	)		(8	)		(13	)

TOTAL STOCKHOLDERS’ EQUITY		176,106			173,830			171,120			164,721			165,365			1			6

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,117,605		$	2,141,595		$	2,014,019		$	2,135,796		$	2,031,989			(1	)		4


(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																					FULL YEAR
																4Q10 Change												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
AVERAGE BALANCES (a)
ASSETS
Deposits with banks	$	29,213		$	38,747		$	58,737		$	64,229		$	49,705			(25	)%		(41	)%	$	47,611		$	67,015			(29	)%
Federal funds sold and securities purchased under resale agreements		201,489			192,099			189,573			170,036			156,848			5			28			188,394			152,926			23
Securities borrowed		119,973			121,302			113,650			114,636			125,453			(1	)		(4	)		117,416			124,462			(6	)
Trading assets — debt instruments		273,929			251,790			245,532			248,089			256,414			9			7			254,898			251,035			2
Securities		328,126			327,798			327,425			337,441			374,327			—			(12	)		330,166			342,655			(4	)
Loans		690,529			693,791			705,189			725,136			642,406			—			7			703,540			682,885			3
Other assets (b)		42,583			36,912			34,429			27,885			29,868			15			43			35,496			29,510			20

Total interest-earning assets		1,685,842			1,662,439			1,674,535			1,687,452			1,635,021			1			3			1,677,521			1,650,488			2
Trading assets — equity instruments		122,827			96,200			95,080			83,674			74,936			28			64			99,543			67,028			49
Trading assets — derivative receivables		87,569			92,857			79,409			78,683			86,415			(6	)		1			84,676			110,457			(23	)
All other noninterest-earning assets		192,906			189,617			194,623			188,871			196,853			2			(2	)		191,511			196,228			(2	)

TOTAL ASSETS	$	2,089,144		$	2,041,113		$	2,043,647		$	2,038,680		$	1,993,225			2			5		$	2,053,251		$	2,024,201			1


LIABILITIES
Interest-bearing deposits	$	661,994		$	659,027		$	668,953		$	677,431		$	667,269			—			(1	)	$	666,787		$	684,016			(3	)
Federal funds purchased and securities loaned or sold under repurchase agreements		287,493			281,171			273,614			271,934			283,263			2			1			278,603			275,862			1
Commercial paper		34,507			34,523			37,557			37,461			42,290			—			(18	)		36,000			39,055			(8	)
Trading liabilities — debt instruments		77,096			73,278			72,276			65,154			63,048			5			22			71,987			48,530			48
Other borrowings and liabilities (c)		139,057			130,191			131,546			123,321			119,374			7			16			131,071			152,652			(14	)
Beneficial interests issued by consolidated VIEs		78,114			83,928			90,085			98,104			16,002			(7	)		388			87,493			14,930			486
Long-term debt		253,753			252,097			256,089			262,503			268,476			1			(5	)		256,075			268,238			(5	)

Total interest-bearing liabilities		1,532,014			1,514,215			1,530,120			1,535,908			1,459,722			1			5			1,528,016			1,483,283			3
Noninterest-bearing deposits		233,318			213,700			209,615			200,075			203,092			9			15			214,267			197,989			8
Trading liabilities — equity instruments		7,166			6,560			5,216			5,728			8,372			9			(14	)		6,172			11,694			(47	)
Trading liabilities — derivative payables		71,727			69,350			62,547			59,053			63,423			3			13			65,714			77,901			(16	)
All other noninterest-bearing liabilities		70,307			65,335			68,928			73,670			93,939			8			(25	)		69,539			88,377			(21	)

TOTAL LIABILITIES		1,914,532			1,869,160			1,876,426			1,874,434			1,828,548			2			5			1,883,708			1,859,244			1

Preferred stock		7,800			7,991			8,152			8,152			8,152			(2	)		(4	)		8,023			19,054			(58	)
Common stockholders’ equity		166,812			163,962			159,069			156,094			156,525			2			7			161,520			145,903			11

TOTAL STOCKHOLDERS’ EQUITY		174,612			171,953			167,221			164,246			164,677			2			6			169,543			164,957			3

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,089,144		$	2,041,113		$	2,043,647		$	2,038,680		$	1,993,225			2			5		$	2,053,251		$	2,024,201			1


AVERAGE RATES (a)
INTEREST-EARNING ASSETS
Deposits with banks		1.02	%		0.85	%		0.63	%		0.60	%		0.95	%								0.72	%		1.40	%
Federal funds sold and securities purchased under resale agreements		1.05			0.92			0.84			0.97			0.92									0.95			1.14
Securities borrowed		0.16			0.22			0.11			0.10			0.14									0.15			—
Trading assets — debt instruments		4.29			4.37			4.25			4.56			4.63									4.37			4.89
Securities		2.44			2.67			3.14			3.54			3.32									2.95			3.65
Loans		5.71			5.71			5.68			5.91			5.51									5.75			5.67
Other assets (b)		1.54			1.57			1.60			1.36			1.42									1.52			1.62
Total interest-earning assets		3.70			3.75			3.79			4.07			3.80									3.83			4.04

INTEREST-BEARING LIABILITIES
Interest-bearing deposits		0.51			0.51			0.53			0.51			0.53									0.51			0.71
Federal funds purchased and securities loaned or sold under repurchase agreements		0.12	(d)		(0.28	)(d)		(0.07	)(d)		(0.05	)(d)		0.08									(0.07	)(d)		0.21
Commercial paper		0.21			0.20			0.19			0.19			0.20									0.20			0.28
Trading liabilities — debt instruments		2.30			2.64			2.49			3.39			3.85									2.68			3.95
Other borrowings and liabilities (c)		1.11			0.54			0.50			0.56			0.83									0.69			0.82
Beneficial interests issued by consolidated VIEs		1.13			1.36			1.36			1.36			1.32									1.31			1.46
Long-term debt		2.34			2.34			1.97			1.95			2.01									2.15			2.35
Total interest-bearing liabilities		0.91			0.81			0.79			0.83			0.88									0.84			1.02

INTEREST RATE SPREAD		2.79	%		2.94	%		3.00	%		3.24	%		2.92	%								2.99	%		3.02	%

NET YIELD ON INTEREST-EARNING ASSETS		2.88	%		3.01	%		3.06	%		3.32	%		3.02	%								3.06	%		3.12	%

NET YIELD ON INTEREST-EARNING ASSETS ADJUSTED FOR SECURITIZATIONS		2.88	%		3.01	%		3.06	%		3.32	%		3.33	%								3.06	%		3.42	%


(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.

(c)		Includes brokerage customer payables and advances from Federal Home Loan Banks.

(d)		Reflects a benefit from the favorable market environments 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 U.S. (“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																	FULL YEAR
												4Q10 Change											2010 Change
	4Q10		3Q10		2Q10		1Q10		4Q09			3Q10			4Q09			2010		2009			2009
CREDIT CARD INCOME
Credit card income — reported	$	1,558	$	1,477	$	1,495	$	1,361	$	1,844			5	%		(16	)%	$	5,891	$	7,110			(17	)%
Impact of:
Credit card securitizations	NA		NA		NA		NA			(375	)	NM			NM			NA			(1,494	)	NM

Credit card income — managed	$	1,558	$	1,477	$	1,495	$	1,361	$	1,469			5			6		$	5,891	$	5,616			5


OTHER INCOME
Other income — reported	$	579	$	468	$	585	$	412	$	231			24			151		$	2,044	$	916			123
Impact of:
Fully tax-equivalent adjustments		503		415		416		411		397			21			27			1,745		1,440			21

Other income — managed	$	1,082	$	883	$	1,001	$	823	$	628			23			72		$	3,789	$	2,356			61


TOTAL NONINTEREST REVENUE
Total noninterest revenue — reported	$	13,996	$	11,322	$	12,414	$	13,961	$	10,786			24			30		$	51,693	$	49,282			5
Impact of:
Credit card securitizations	NA		NA		NA		NA			(375	)	NM			NM			NA			(1,494	)	NM
Fully tax-equivalent adjustments		503		415		416		411		397			21			27			1,745		1,440			21

Total noninterest revenue — managed	$	14,499	$	11,737	$	12,830	$	14,372	$	10,808			24			34		$	53,438	$	49,228			9


NET INTEREST INCOME
Net interest income — reported	$	12,102	$	12,502	$	12,687	$	13,710	$	12,378			(3	)		(2	)	$	51,001	$	51,152			—
Impact of:
Credit card securitizations	NA		NA		NA		NA			1,992		NM			NM			NA			7,937		NM
Fully tax-equivalent adjustments		121		96		96		90		58			26			109			403		330			22

Net interest income — managed	$	12,223	$	12,598	$	12,783	$	13,800	$	14,428			(3	)		(15	)	$	51,404	$	59,419			(13	)


TOTAL NET REVENUE
Total net revenue — reported	$	26,098	$	23,824	$	25,101	$	27,671	$	23,164			10			13		$	102,694	$	100,434			2
Impact of:
Credit card securitizations	NA		NA		NA		NA			1,617		NM			NM			NA			6,443		NM
Fully tax-equivalent adjustments		624		511		512		501		455			22			37			2,148		1,770			21

Total net revenue — managed	$	26,722	$	24,335	$	25,613	$	28,172	$	25,236			10			6		$	104,842	$	108,647			(4	)


PRE-PROVISION PROFIT
Total pre-provision profit — reported	$	10,055	$	9,426	$	10,470	$	11,547	$	11,160			7			(10	)	$	41,498	$	48,082			(14	)
Impact of:
Credit card securitizations	NA		NA		NA		NA			1,617		NM			NM			NA			6,443		NM
Fully tax-equivalent adjustments		624		511		512		501		455			22			37			2,148		1,770			21

Total pre-provision profit — managed	$	10,679	$	9,937	$	10,982	$	12,048	$	13,232			7			(19	)	$	43,646	$	56,295			(22	)


PROVISION FOR CREDIT LOSSES
Provision for credit losses — reported	$	3,043	$	3,223	$	3,363	$	7,010	$	7,284			(6	)		(58	)	$	16,639	$	32,015			(48	)
Impact of:
Credit card securitizations	NA		NA		NA		NA			1,617		NM			NM			NA			6,443		NM

Provision for credit losses — managed	$	3,043	$	3,223	$	3,363	$	7,010	$	8,901			(6	)		(66	)	$	16,639	$	38,458			(57	)


INCOME TAX EXPENSE
Income tax expense — reported	$	2,181	$	1,785	$	2,312	$	1,211	$	598			22			265		$	7,489	$	4,415			70
Impact of:
Fully tax-equivalent adjustments		624		511		512		501		455			22			37			2,148		1,770			21

Income tax expense — managed	$	2,805	$	2,296	$	2,824	$	1,712	$	1,053			22			166		$	9,637	$	6,185			56


NA: Not applicable.

Page 7


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


	QUARTERLY TRENDS																					FULL YEAR
																4Q10 Change												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
TOTAL NET REVENUE (FTE)
Investment Bank (a)	$	6,213		$	5,353		$	6,332		$	8,319		$	4,929			16	%		26	%	$	26,217		$	28,109			(7	)%
Retail Financial Services		8,525			7,646			7,809			7,776			7,669			11			11			31,756			32,692			(3	)
Card Services		4,246			4,253			4,217			4,447			5,148			—			(18	)		17,163			20,304			(15	)
Commercial Banking		1,611			1,527			1,486			1,416			1,406			6			15			6,040			5,720			6
Treasury & Securities Services		1,913			1,831			1,881			1,756			1,835			4			4			7,381			7,344			1
Asset Management		2,613			2,172			2,068			2,131			2,195			20			19			8,984			7,965			13
Corporate/Private Equity (a)		1,601			1,553			1,820			2,327			2,054			3			(22	)		7,301			6,513			12

TOTAL NET REVENUE	$	26,722		$	24,335		$	25,613		$	28,172		$	25,236			10			6		$	104,842		$	108,647			(4	)


TOTAL PRE-PROVISION PROFIT
Investment Bank (a)	$	2,012		$	1,649		$	1,810		$	3,481		$	2,643			22			(24	)	$	8,952		$	12,708			(30	)
Retail Financial Services		3,701			3,129			3,528			3,534			3,367			18			10			13,892			15,944			(13	)
Card Services		2,732			2,808			2,781			3,045			3,752			(3	)		(27	)		11,366			14,923			(24	)
Commercial Banking		1,053			967			944			877			863			9			22			3,841			3,544			8
Treasury & Securities Services		443			421			482			431			444			5			—			1,777			2,066			(14	)
Asset Management		836			684			663			689			725			22			15			2,872			2,492			15
Corporate/Private Equity (a)		(98	)		279			774			(9	)		1,438		NM			NM				946			4,618			(80	)

TOTAL PRE-PROVISION PROFIT	$	10,679		$	9,937		$	10,982		$	12,048		$	13,232			7			(19	)	$	43,646		$	56,295			(22	)


NET INCOME/(LOSS)
Investment Bank	$	1,501		$	1,286		$	1,381		$	2,471		$	1,901			17			(21	)	$	6,639		$	6,899			(4	)
Retail Financial Services		708			907			1,042			(131	)		(399	)		(22	)	NM				2,526			97		NM
Card Services		1,299			735			343			(303	)		(306	)		77		NM				2,074			(2,225	)	NM
Commercial Banking		530			471			693			390			224			13			137			2,084			1,271			64
Treasury & Securities Services		257			251			292			279			237			2			8			1,079			1,226			(12	)
Asset Management		507			420			391			392			424			21			20			1,710			1,430			20
Corporate/Private Equity		29			348			653			228			1,197			(92	)		(98	)		1,258			3,030			(58	)

TOTAL NET INCOME	$	4,831		$	4,418		$	4,795		$	3,326		$	3,278			9			47		$	17,370		$	11,728			48


AVERAGE EQUITY (b)
Investment Bank	$	40,000		$	40,000		$	40,000		$	40,000		$	33,000			—			21		$	40,000		$	33,000			21
Retail Financial Services		28,000			28,000			28,000			28,000			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			6,500			6,500			5,000			—			30			6,500			5,000			30
Asset Management		6,500			6,500			6,500			6,500			7,000			—			(7	)		6,500			7,000			(7	)
Corporate/Private Equity		62,812			59,962			55,069			52,094			63,525			5			(1	)		57,520			52,903			9

TOTAL AVERAGE EQUITY	$	166,812		$	163,962		$	159,069		$	156,094		$	156,525			2			7		$	161,520		$	145,903			11


RETURN ON EQUITY (b)
Investment Bank		15	%		13	%		14	%		25	%		23	%								17	%		21	%
Retail Financial Services		10			13			15			(2	)		(6	)								9			—
Card Services		34			19			9			(8	)		(8	)								14			(15	)
Commercial Banking		26			23			35			20			11									26			16
Treasury & Securities Services		16			15			18			17			19									17			25
Asset Management		31			26			24			24			24									26			20


(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 net 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. ROE is measured and internal targets for expected returns are established as key measures 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, and to reflect 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																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
INCOME STATEMENT
REVENUE
Investment banking fees	$	1,833		$	1,502		$	1,405		$	1,446		$	1,892			22	%		(3	)%	$	6,186		$	7,169			(14	)%
Principal transactions		1,289			1,129			2,105			3,931			84			14		NM				8,454			8,154			4
Lending- and deposit-related fees		209			205			203			202			174			2			20			819			664			23
Asset management, administration and commissions		652			565			633			563			608			15			7			2,413			2,650			(9	)
All other income (a)		185			61			86			49			(14	)		203		NM				381			(115	)	NM

Noninterest revenue		4,168			3,462			4,432			6,191			2,744			20			52			18,253			18,522			(1	)
Net interest income		2,045			1,891			1,900			2,128			2,185			8			(6	)		7,964			9,587			(17	)

TOTAL NET REVENUE (b)		6,213			5,353			6,332			8,319			4,929			16			26			26,217			28,109			(7	)

Provision for credit losses		(271	)		(142	)		(325	)		(462	)		(181	)		(91	)		(50	)		(1,200	)		2,279		NM

NONINTEREST EXPENSE
Compensation expense		1,845			2,031			2,923			2,928			549			(9	)		236			9,727			9,334			4
Noncompensation expense		2,356			1,673			1,599			1,910			1,737			41			36			7,538			6,067			24

TOTAL NONINTEREST EXPENSE		4,201			3,704			4,522			4,838			2,286			13			84			17,265			15,401			12


Income before income tax expense		2,283			1,791			2,135			3,943			2,824			27			(19	)		10,152			10,429			(3	)
Income tax expense		782			505			754			1,472			923			55			(15	)		3,513			3,530			—

NET INCOME	$	1,501		$	1,286		$	1,381		$	2,471		$	1,901			17			(21	)	$	6,639		$	6,899			(4	)


FINANCIAL RATIOS
ROE		15	%		13	%		14	%		25	%		23	%								17	%		21	%
ROA		0.75			0.68			0.78			1.48			1.12									0.91			0.99
Overhead ratio		68			69			71			58			46									66			55
Compensation expense as a percent of total net revenue (c)		30			38			46			35			11									37			33

REVENUE BY BUSINESS
Investment banking fees:
Advisory	$	424		$	385		$	355		$	305		$	611			10			(31	)	$	1,469		$	1,867			(21	)
Equity underwriting		489			333			354			413			549			47			(11	)		1,589			2,641			(40	)
Debt underwriting		920			784			696			728			732			17			26			3,128			2,661			18

Total investment banking fees		1,833			1,502			1,405			1,446			1,892			22			(3	)		6,186			7,169			(14	)
Fixed income markets		2,875			3,123			3,563			5,464			2,735			(8	)		5			15,025			17,564			(14	)
Equity markets		1,128			1,135			1,038			1,462			971			(1	)		16			4,763			4,393			8
Credit portfolio (a)		377			(407	)		326			(53	)		(669	)	NM			NM				243			(1,017	)	NM

Total net revenue	$	6,213		$	5,353		$	6,332		$	8,319		$	4,929			16			26		$	26,217		$	28,109			(7	)


REVENUE BY REGION (a)
Americas	$	3,939		$	2,857		$	3,935		$	4,562		$	2,872			38			37		$	15,293		$	15,156			1
Europe/Middle East/Africa		1,422			1,531			1,537			2,814			1,502			(7	)		(5	)		7,304			9,790			(25	)
Asia/Pacific		852			965			860			943			555			(12	)		54			3,620			3,163			14

Total net revenue	$	6,213		$	5,353		$	6,332		$	8,319		$	4,929			16			26		$	26,217		$	28,109			(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 $475 million, $390 million, $401 million, $403 million and $357 million for the quarters ended December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively, and $1.7 billion and $1.4 billion for full year 2010 and 2009, respectively.

(c)		The compensation expense as a percentage of total net revenue ratio for the second quarter and full year of 2010 excluding the payroll tax expense related to the U.K. Bank Payroll Tax on certain compensation awarded from December 9, 2009 to April 5, 2010 to relevant banking employees, which is a non-GAAP financial measure, was 37% and 35%, respectively. IB excludes this tax from the ratio because it enables comparability with prior periods.

Page 9


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


	QUARTERLY TRENDS																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
SELECTED BALANCE SHEET DATA (Period-end)
Loans (a):
Loans retained (b)	$	53,145		$	51,299		$	54,049		$	53,010		$	45,544			4	%		17	%	$	53,145		$	45,544			17	%
Loans held-for-sale and loans at fair value		3,746			2,252			3,221			3,594			3,567			66			5			3,746			3,567			5

Total loans		56,891			53,551			57,270			56,604			49,111			6			16			56,891			49,111			16
Equity		40,000			40,000			40,000			40,000			33,000			—			21			40,000			33,000			21

SELECTED BALANCE SHEET DATA (Average)
Total assets	$	792,703		$	746,926		$	710,005		$	676,122		$	674,241			6			18		$	731,801		$	699,039			5
Trading assets — debt and equity instruments		346,990			300,517			296,031			284,085			285,363			15			22			307,061			273,624			12
Trading assets — derivative receivables		72,491			76,530			65,847			66,151			72,640			(5	)		—			70,289			96,042			(27	)
Loans (a):
Loans retained (b)		52,502			53,331			53,351			58,501			51,573			(2	)		2			54,402			62,722			(13	)
Loans held-for-sale and loans at fair value		3,504			2,678			3,530			3,150			4,158			31			(16	)		3,215			7,589			(58	)

Total loans		56,006			56,009			56,881			61,651			55,731			—			—			57,617			70,311			(18	)
Adjusted assets (c)		587,307			539,459			527,520			506,635			519,403			9			13			540,449			538,724			—
Equity		40,000			40,000			40,000			40,000			33,000			—			21			40,000			33,000			21

Headcount		26,314			26,373			26,279			24,977			24,654			—			7			26,314			24,654			7

CREDIT DATA AND QUALITY STATISTICS
Net charge-offs/(recoveries)	$	(23	)	$	33		$	28		$	697		$	685		NM			NM			$	735		$	1,904			(61	)
Nonperforming assets:
Nonperforming loans:
Nonperforming loans retained (b)(d)		3,159			2,025			1,926			2,459			3,196			56			(1	)		3,159			3,196			(1	)
Nonperforming loans held-for-sale and loans at fair value		460			361			334			282			308			27			49			460			308			49

Total nonperforming loans		3,619			2,386			2,260			2,741			3,504			52			3			3,619			3,504			3

Derivative receivables		34			255			315			363			529			(87	)		(94	)		34			529			(94	)
Assets acquired in loan satisfactions		117			148			151			185			203			(21	)		(42	)		117			203			(42	)

Total nonperforming assets		3,770			2,789			2,726			3,289			4,236			35			(11	)		3,770			4,236			(11	)
Allowance for credit losses:
Allowance for loan losses		1,863			1,976			2,149			2,601			3,756			(6	)		(50	)		1,863			3,756			(50	)
Allowance for lending-related commitments		447			570			564			482			485			(22	)		(8	)		447			485			(8	)

Total allowance for credit losses		2,310			2,546			2,713			3,083			4,241			(9	)		(46	)		2,310			4,241			(46	)

Net charge-off/(recovery) rate (b)(e)		(0.17	)%		0.25	%		0.21	%		4.83	%		5.27	%								1.35	%		3.04	%
Allow. for loan losses to period-end loans retained (b)(e)		3.51			3.85			3.98			4.91			8.25									3.51			8.25
Allow. for loan losses to average loans retained (b)(e)		3.55			3.71			4.03			4.45			7.28									3.42			5.99
Allow. for loan losses to nonperforming loans retained (b)(d)(e)		59			98			112			106			118									59			118
Nonperforming loans to total period-end loans		6.36			4.46			3.95			4.84			7.13									6.36			7.13
Nonperforming loans to total average loans		6.46			4.26			3.97			4.45			6.29									6.28			4.98


(a)		Effective January 1, 2010, the Firm adopted new accounting guidance related to VIEs. For further details regarding the Firm’s application and impact of the new guidance, see footnote (a) on page 3.

(b)		Loans retained include credit portfolio loans, leveraged leases and other accrual loans, and exclude 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 $1.1 billion, $603 million, $617 million, $811 million and $1.3 billion were held against these nonperforming loans at December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively.

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

Page 10


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


	QUARTERLY TRENDS																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
MARKET RISK — AVERAGE TRADING AND CREDIT
PORTFOLIO VAR - 95% CONFIDENCE LEVEL
Trading activities:
Fixed income	$	53		$	72		$	64		$	69		$	121			(26	)%		(56	)%	$	65		$	160			(59	)%
Foreign exchange		10			9			10			13			14			11			(29	)		11			18			(39	)
Equities		23			21			20			24			21			10			10			22			47			(53	)
Commodities and other		14			13			20			15			17			8			(18	)		16			20			(20	)
Diversification (a)		(38	)		(38	)		(42	)		(49	)		(62	)		—			39			(43	)		(91	)		53

Total trading VaR (b)		62			77			72			72			111			(19	)		(44	)		71			154			(54	)

Credit portfolio VaR (c)		26			30			27			19			24			(13	)		8			26			52			(50	)
Diversification (a)		(10	)		(8	)		(9	)		(9	)		(11	)		(25	)		9			(10	)		(42	)		76

Total trading and credit portfolio VaR	$	78		$	99		$	90		$	82		$	124			(21	)		(37	)	$	87		$	164			(47	)


	Full Year 2010					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		9	%		#1		8	%		#1
Global long-term debt (f)		7	%		#2		8	%		#1
Global equity and equity-related (g)		7	%		#3		12	%		#1
Global announced M&A (h)		16	%		#4		24	%		#3
U.S. debt, equity and equity-related		11	%		#2		15	%		#1
U.S. syndicated loans		19	%		#2		22	%		#1
U.S. long-term debt (f)		11	%		#2		14	%		#1
U.S. equity and equity-related		13	%		#2		16	%		#2
U.S. announced M&A (h)		23	%		#3		36	%		#2


(a)		Average value-at-risk (“VaR”) was less than the sum of the VaR of the components described above, which is due to portfolio diversification. The diversification effect reflects 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)		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, for example, correlation risk. Trading VaR does not include the debit valuation adjustments (“DVA”) taken on derivative and structured liabilities to reflect the credit quality of the Firm. Trading VaR includes the estimated credit spread sensitivity of certain mortgage products.

(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, which is not MTM.

(d)		Source: Dealogic. Global Investment Banking fees reflects the ranking of fees and market share. Remainder of rankings reflects transaction volume rank 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 exclude 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 on transaction value at announcement; all other rankings are on 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 full year 2010 and 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																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
INCOME STATEMENT
REVENUE
Lending- and deposit-related fees	$	737		$	759		$	780		$	841		$	972			(3	)%		(24	)%	$	3,117		$	3,969			(21	)%
Asset management, administration and commissions		456			443			433			452			406			3			12			1,784			1,674			7
Mortgage fees and related income		1,609			705			886			655			481			128			235			3,855			3,794			2
Credit card income		524			502			480			450			441			4			19			1,956			1,635			20
Other income		370			379			413			354			299			(2	)		24			1,516			1,128			34

Noninterest revenue		3,696			2,788			2,992			2,752			2,599			33			42			12,228			12,200			—
Net interest income		4,829			4,858			4,817			5,024			5,070			(1	)		(5	)		19,528			20,492			(5	)

TOTAL NET REVENUE (a)		8,525			7,646			7,809			7,776			7,669			11			11			31,756			32,692			(3	)

Provision for credit losses		2,456			1,548			1,715			3,733			4,229			59			(42	)		9,452			15,940			(41	)

NONINTEREST EXPENSE
Compensation expense		1,905			1,915			1,842			1,770			1,722			(1	)		11			7,432			6,712			11
Noncompensation expense		2,851			2,533			2,369			2,402			2,499			13			14			10,155			9,706			5
Amortization of intangibles		68			69			70			70			81			(1	)		(16	)		277			330			(16	)

TOTAL NONINTEREST EXPENSE		4,824			4,517			4,281			4,242			4,302			7			12			17,864			16,748			7


Income/(loss) before income tax expense/(benefit)		1,245			1,581			1,813			(199	)		(862	)		(21	)	NM				4,440			4		NM
Income tax expense/(benefit)		537			674			771			(68	)		(463	)		(20	)	NM				1,914			(93	)	NM

NET INCOME/(LOSS)	$	708		$	907		$	1,042		$	(131	)	$	(399	)		(22	)	NM			$	2,526		$	97		NM


FINANCIAL RATIOS
ROE		10	%		13	%		15	%		(2	)%		(6	)%								9	%		—	%
Overhead ratio		57			59			55			55			56									56			51
Overhead ratio excluding core deposit intangibles (b)		56			58			54			54			55									55			50

SELECTED BALANCE SHEET DATA (Period-end)
Assets	$	366,841		$	367,675		$	375,329		$	382,475		$	387,269			—			(5	)	$	366,841		$	387,269			(5	)
Loans:
Loans retained		316,725			323,481			330,329			339,002			340,332			(2	)		(7	)		316,725			340,332			(7	)
Loans held-for-sale and loans at fair value (c)		14,863			13,071			12,599			11,296			14,612			14			2			14,863			14,612			2

Total loans		331,588			336,552			342,928			350,298			354,944			(1	)		(7	)		331,588			354,944			(7	)
Deposits		370,819			364,186			359,974			362,470			357,463			2			4			370,819			357,463			4
Equity		28,000			28,000			28,000			28,000			25,000			—			12			28,000			25,000			12

SELECTED BALANCE SHEET DATA (Average)
Assets		373,883			375,968			381,906			393,867			395,045			(1	)		(5	)		381,337			407,497			(6	)
Loans:
Loans retained		320,407			326,905			335,308			342,997			343,411			(2	)		(7	)		331,330			354,789			(7	)
Loans held-for-sale and loans at fair value (c)		18,883			15,683			14,426			17,055			17,670			20			7			16,515			18,072			(9	)

Total loans		339,290			342,588			349,734			360,052			361,081			(1	)		(6	)		347,845			372,861			(7	)
Deposits		367,920			362,559			362,010			356,934			356,464			1			3			362,386			367,696			(1	)
Equity		28,000			28,000			28,000			28,000			25,000			—			12			28,000			25,000			12

Headcount		121,876			119,424			116,879			112,616			108,971			2			12			121,876			108,971			12


(a)		Total net revenue included tax-equivalent adjustments associated with tax-exempt loans to municipalities and other qualified entities of $1 million, $4 million, $5 million, $5 million and $4 million for the quarters ended December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively, and $15 million and $22 million for full year 2010 and 2009, respectively.

(b)		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 $68 million, $69 million, $69 million, $70 million and $80 million for the quarters ended December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively, and $276 million and $328 million for full year 2010 and 2009, respectively.

(c)		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 $14.7 billion, $12.6 billion, $12.2 billion, $8.4 billion and $12.5 billion at December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively. Average balances of these loans totaled $18.7 billion, $15.3 billion, $12.5 billion, $14.2 billion and $16.0 billion for the quarters ended December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively, and $15.2 billion and $15.8 billion for full year 2010 and 2009, respectively.

Page 12


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


	QUARTERLY TRENDS																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
CREDIT DATA AND QUALITY STATISTICS
Net charge-offs	$	2,159		$	1,548		$	1,761		$	2,438		$	2,738			39	%		(21	)%	$	7,906		$	10,113			(22	)%
Nonperforming loans:
Nonperforming loans retained		8,768			9,801			10,457			10,769			10,611			(11	)		(17	)		8,768			10,611			(17	)
Nonperforming loans held-for-sale and loans at fair value		145			166			176			217			234			(13	)		(38	)		145			234			(38	)

Total nonperforming loans (a) (b) (c)		8,913			9,967			10,633			10,986			10,845			(11	)		(18	)		8,913			10,845			(18	)
Nonperforming assets (a) (b) (c)		10,266			11,421			11,907			12,191			12,098			(10	)		(15	)		10,266			12,098			(15	)
Allowance for loan losses		16,453			16,154			16,152			16,200			14,776			2			11			16,453			14,776			11

Net charge-off rate (d)		2.67	%		1.88	%		2.11	%		2.88	%		3.16	%								2.39	%		2.85	%
Net charge-off rate excluding purchased credit-impaired loans (d) (e)		3.47			2.44			2.75			3.76			4.16									3.11			3.75
Allowance for loan losses to ending loans retained (d)		5.19			4.99			4.89			4.78			4.34									5.19			4.34
Allowance for loan losses to ending loans retained excluding purchased credit-impaired loans (d) (e)		4.72			5.36			5.26			5.16			5.09									4.72			5.09
Allowance for loan losses to nonperforming loans retained (a) (d) (e)		131			136			128			124			124									131			124
Nonperforming loans to total loans		2.69			2.96			3.10			3.14			3.06									2.69			3.06
Nonperforming loans to total loans excluding purchased credit-impaired loans (a)		3.44			3.81			4.00			4.05			3.96									3.44			3.96


(a)		Excludes purchased credit-impaired loans that were acquired as part of the Washington Mutual transaction, which are accounted for on a pool basis. Since each pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, the past-due status of the pools, or that of the individual loans within the pools, is not meaningful. Because the Firm is recognizing interest income on each pool of loans, they are all considered to be performing.

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

(c)		Nonperforming loans and assets exclude: (1) mortgage loans insured by U.S. government agencies of $10.5 billion, $10.2 billion, $10.1 billion, $10.5 billion and $9.0 billion at December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively, that are 90 days past due and accruing at the guaranteed reimbursement rate; (2) real estate owned insured by U.S. government agencies of $1.9 billion, $1.7 billion, $1.4 billion, $707 million and $579 million at December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively; and (3) student loans that are 90 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program (“FFELP”), of $625 million, $572 million, $447 million, $581 million and $542 million at December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively. These amounts are excluded as reimbursement of insured amounts 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 $4.9 billion, $2.8 billion, $2.8 billion, $2.8 billion and $1.6 billion was recorded for these loans at December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively, which has also been excluded from the applicable ratios. 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																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
RETAIL BANKING
Noninterest revenue	$	1,715		$	1,691		$	1,684		$	1,702		$	1,804			1	%		(5	)%	$	6,792		$	7,169			(5	)%
Net interest income		2,693			2,745			2,712			2,635			2,716			(2	)		(1	)		10,785			10,781			—

Total net revenue		4,408			4,436			4,396			4,337			4,520			(1	)		(2	)		17,577			17,950			(2	)
Provision for credit losses		73			175			168			191			248			(58	)		(71	)		607			1,142			(47	)
Noninterest expense		2,668			2,779			2,633			2,577			2,574			(4	)		4			10,657			10,357			3

Income before income tax expense		1,667			1,482			1,595			1,569			1,698			12			(2	)		6,313			6,451			(2	)

Net income	$	954		$	848		$	914		$	898		$	1,027			13			(7	)	$	3,614		$	3,903			(7	)


Overhead ratio		61	%		63	%		60	%		59	%		57	%								61	%		58	%
Overhead ratio excluding core deposit intangibles (a)		59			61			58			58			55									59			56

BUSINESS METRICS (in billions, except where otherwise noted)
Business banking origination volume (in millions)	$	1,435		$	1,126		$	1,222		$	905		$	670			27			114		$	4,688		$	2,299			104
End-of-period loans owned		16.8			16.6			16.6			16.8			17.0			1			(1	)		16.8			17.0			(1	)
End-of-period deposits:
Checking		131.7			124.2			123.5			123.8			121.9			6			8			131.7			121.9			8
Savings		166.6			162.4			161.8			163.4			153.4			3			9			166.6			153.4			9
Time and other		45.9			48.9			50.5			53.2			58.0			(6	)		(21	)		45.9			58.0			(21	)

Total end-of-period deposits		344.2			335.5			335.8			340.4			333.3			3			3			344.2			333.3			3
Average loans owned		16.6			16.6			16.7			16.9			17.2			—			(3	)		16.7			17.8			(6	)
Average deposits:
Checking		126.6			123.5			123.6			119.7			116.4			3			9			123.4			113.5			9
Savings		164.7			162.2			162.8			158.6			153.1			2			8			162.1			150.9			7
Time and other		47.4			49.8			51.4			55.6			60.3			(5	)		(21	)		51.0			76.4			(33	)

Total average deposits		338.7			335.5			337.8			333.9			329.8			1			3			336.5			340.8			(1	)
Deposit margin		3.00	%		3.08	%		3.05	%		3.02	%		3.06	%								3.03	%		2.96	%
Average assets	$	28.3		$	27.7		$	28.4		$	28.9		$	28.2			2			—		$	28.3		$	28.9			(2	)

CREDIT DATA AND QUALITY STATISTICS
Net charge-offs		173			175			168			191			248			(1	)		(30	)		707			842			(16	)
Net charge-off rate		4.13	%		4.18	%		4.04	%		4.58	%		5.72	%								4.23	%		4.73	%
Nonperforming assets	$	846		$	913		$	920		$	872		$	839			(7	)		1		$	846		$	839			1

RETAIL BRANCH BUSINESS METRICS
Investment sales volume		6,069			5,798			5,756			5,956			5,851			5			4			23,579			21,784			8

Number of:
Branches		5,268			5,192			5,159			5,155			5,154			1			2			5,268			5,154			2
ATMs		16,145			15,815			15,654			15,549			15,406			2			5			16,145			15,406			5
Personal bankers		21,715			21,438			20,170			19,003			17,991			1			21			21,715			17,991			21
Sales specialists		7,196			7,123			6,785			6,315			5,912			1			22			7,196			5,912			22
Active online customers (in thousands)		17,744			17,167			16,584			16,208			15,424			3			15			17,744			15,424			15
Checking accounts (in thousands)		27,252			27,014			26,351			25,830			25,712			1			6			27,252			25,712			6


(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 $68 million, $69 million, $69 million, $70 million and $80 million for the quarters ended December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively, and $276 million and $328 million for full year 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																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
MORTGAGE BANKING & OTHER CONSUMER LENDING
Noninterest revenue (a)	$	1,971		$	1,076		$	1,256		$	1,018		$	801			83	%		146	%	$	5,321		$	5,057			5	%
Net interest income		817			809			792			893			802			1			2			3,311			3,165			5

Total net revenue		2,788			1,885			2,048			1,911			1,603			48			74			8,632			8,222			5
Provision for credit losses		46			176			175			217			242			(74	)		(81	)		614			1,235			(50	)
Noninterest expense		1,743			1,348			1,243			1,246			1,163			29			50			5,580			4,544			23

Income before income tax expense		999			361			630			448			198			177			405			2,438			2,443			—

Net income (a)	$	577		$	207		$	364		$	257		$	266			179			117		$	1,405		$	1,643			(14	)


Overhead ratio		63	%		72	%		61	%		65	%		73	%								65	%		55	%

BUSINESS METRICS (in billions)
End-of-period loans owned:
Auto loans	$	48.4		$	48.2		$	47.5		$	47.4		$	46.0			—			5		$	48.4		$	46.0			5
Mortgage (b)		14.2			13.8			13.2			13.7			11.9			3			19			14.2			11.9			19
Student loans and other		14.4			14.6			15.1			17.4			15.8			(1	)		(9	)		14.4			15.8			(9	)

Total end-of-period loans owned		77.0			76.6			75.8			78.5			73.7			1			4			77.0			73.7			4
Average loans owned:
Auto loans		48.3			47.7			47.5			46.9			45.3			1			7			47.6			43.6			9
Mortgage (b)		13.9			13.6			13.6			12.5			10.6			2			31			13.4			8.8			52
Student loans and other		14.6			14.8			16.7			18.4			15.6			(1	)		(6	)		16.2			16.3			(1	)

Total average loans owned (c)		76.8			76.1			77.8			77.8			71.5			1			7			77.2			68.7			12

CREDIT DATA AND QUALITY STATISTICS
Net charge-offs:
Auto loans		71			67			58			102			148			6			(52	)		298			627			(52	)
Mortgage		12			10			13			6			—			20		NM				41			14			193
Student loans and other		114			82			150			64			92			39			24			410			287			43

Total net charge-offs		197			159			221			172			240			24			(18	)		749			928			(19	)

Net charge-off rate:
Auto loans		0.58	%		0.56	%		0.49	%		0.88	%		1.30	%								0.63	%		1.44	%
Mortgage		0.35			0.30			0.39			0.20			—									0.31			0.17
Student loans and other		3.10			2.21			4.04			1.64			2.59									2.72			1.98
Total net charge-off rate (c)		1.02			0.83			1.17			0.93			1.36									0.99			1.40

30+ day delinquency rate (d) (e)		1.69			1.54			1.42			1.47			1.75									1.69			1.75
Nonperforming assets (f) (g)	$	996		$	1,052		$	1,013		$	1,006		$	912			(5	)		9		$	996		$	912			9


(a)		Losses related to the repurchase of previously-sold loans are recorded as a reduction of production revenue. These losses totaled $349 million, $1.5 billion, $667 million, $432 million and $672 million for the quarters ended December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively, and $2.9 billion and $1.6 billion for full year 2010 and 2009, respectively. The losses resulted in a negative impact on net income of $203 million, $853 million, $388 million, $252 million and $413 million for the quarters ended December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively, and $1.7 billion and $991 million for full year 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 $192 million, $338 million, $1.9 billion, $2.9 billion and $1.7 billion for the quarters ended December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively, and $1.3 billion and $2.2 billion for full year 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 $11.4 billion, $11.1 billion, $10.9 billion, $11.2 billion and $9.7 billion at December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively. These amounts are excluded as reimbursement of insured amounts 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 FFELP, of $1.1 billion, $1.0 billion, $988 million, $965 million and $942 million at December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively. These amounts are excluded as reimbursement of insured amounts is proceeding normally.

(f)		Nonperforming loans and assets exclude: (1) mortgage loans insured by U.S. government agencies of $10.5 billion, $10.2 billion, $10.1 billion, $10.5 billion and $9.0 billion at December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively, that are 90 days past due and accruing at the guaranteed reimbursement rate; (2) real estate owned insured by U.S. government agencies of $1.9 billion, $1.7 billion, $1.4 billion, $707 million and $579 million at December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively; and (3) student loans that are 90 days past due and still accruing, which are insured by U.S. government agencies under the FFELP, of $625 million, $572 million, $447 million, $581 million and $542 million at December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively. These amounts are excluded as reimbursement of insured amounts is proceeding normally.

(g)		During the third quarter of 2010, $147 million of nonperforming assets pertaining to the second quarter of 2010 were reclassified from Real Estate Portfolios to Mortgage Banking & Other Consumer Lending.

Page 15


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


	QUARTERLY TRENDS																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
MORTGAGE BANKING & OTHER CONSUMER LENDING (continued)
Origination volume:
Mortgage origination volume by channel
Retail	$	22.9		$	19.2		$	15.3		$	11.4		$	12.3			19	%		86	%	$	68.8		$	53.9			28	%
Wholesale (a)		0.3			0.2			0.4			0.4			0.6			50			(50	)		1.3			3.6			(64	)
Correspondent (a)		25.5			19.1			14.7			16.0			20.0			34			28			75.3			81.0			(7	)
CNT (negotiated transactions)		2.1			2.4			1.8			3.9			1.9			(13	)		11			10.2			12.2			(16	)

Total mortgage origination volume		50.8			40.9			32.2			31.7			34.8			24			46			155.6			150.7			3

Student loans		—			0.2			0.1			1.6			0.6		NM			NM				1.9			4.2			(55	)
Auto		4.8			6.1			5.8			6.3			5.9			(21	)		(19	)		23.0			23.7			(3	)

Application volume:
Mortgage application volume by channel
Retail		32.4			34.6			27.8			20.3			17.4			(6	)		86			115.1			90.9			27
Wholesale (a)		0.4			0.6			0.6			0.8			0.7			(33	)		(43	)		2.4			4.9			(51	)
Correspondent (a)		24.9			30.7			23.5			18.2			25.3			(19	)		(2	)		97.3			110.8			(12	)

Total mortgage application volume		57.7			65.9			51.9			39.3			43.4			(12	)		33			214.8			206.6			4


Average mortgage loans held-for-sale and loans at fair value (b)		18.9			15.6			12.6			14.5			16.2			21			17			15.4			16.2			(5	)
Average assets		130.3			125.8			123.2			124.8			119.5			4			9			126.0			115.0			10
Repurchase reserve (ending)		3.0			3.0			2.0			1.6			1.4			—			114			3.0			1.4			114
Third-party mortgage loans serviced (ending)		967.5			1,012.7			1,055.2			1,075.0			1,082.1			(4	)		(11	)		967.5			1,082.1			(11	)
Third-party mortgage loans serviced (average)		981.7			1,028.6			1,063.7			1,076.4			1,088.8			(5	)		(10	)		1,037.6			1,119.1			(7	)
MSR net carrying value (ending)		13.6			10.3			11.8			15.5			15.5			32			(12	)		13.6			15.5			(12	)
Ratio of MSR net carrying value (ending) to third-party
mortgage loans serviced (ending)		1.41	%		1.02	%		1.12	%		1.44	%		1.43	%								1.41	%		1.43	%
Ratio of annualized loan servicing revenue to third-party
mortgage loans serviced (average)		0.46			0.44			0.45			0.42			0.44									0.44			0.44
MSR revenue multiple (c)		3.07x			2.32x			2.49x			3.43x			3.25x									3.20x			3.25x

SUPPLEMENTAL MORTGAGE FEES AND RELATED INCOME DETAILS (in millions)
Net production revenue:
Production revenue	$	1,098		$	1,233		$	676		$	433		$	480			(11	)		129		$	3,440		$	2,115			63
Repurchase losses		(349	)		(1,464	)		(667	)		(432	)		(672	)		76			48			(2,912	)		(1,612	)		(81	)

Net production revenue		749			(231	)		9			1			(192	)	NM			NM				528			503			5
Net mortgage servicing revenue:
Operating revenue:
Loan servicing revenue		1,129			1,153			1,186			1,107			1,221			(2	)		(8	)		4,575			4,942			(7	)
Other changes in MSR asset fair value		(555	)		(604	)		(620	)		(605	)		(657	)		8			16			(2,384	)		(3,279	)		27

Total operating revenue		574			549			566			502			564			5			2			2,191			1,663			32
Risk management:
Changes in MSR asset fair value due to inputs or
assumptions in model		2,909			(1,497	)		(3,584	)		(96	)		1,762		NM				65			(2,268	)		5,804		NM
Derivative valuation adjustments and other		(2,623	)		1,884			3,895			248			(1,653	)	NM				(59	)		3,404			(4,176	)	NM

Total risk management		286			387			311			152			109			(26	)		162			1,136			1,628			(30	)

Total net mortgage servicing revenue		860			936			877			654			673			(8	)		28			3,327			3,291			1

Mortgage fees and related income	$	1,609		$	705		$	886		$	655		$	481			128			235		$	3,855		$	3,794			2


(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 $18.7 billion, $15.3 billion, $12.5 billion, $14.2 billion and $16.0 billion for the quarters ended December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively, and $15.2 billion and $15.8 billion for full year 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).

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


	QUARTERLY TRENDS																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
REAL ESTATE PORTFOLIOS
Noninterest revenue	$	10		$	21		$	52		$	32		$	(6	)		(52	)%	NM		%	$	115		$	(26	)	NM		%
Net interest income		1,319			1,304			1,313			1,496			1,552			1			(15	)		5,432			6,546			(17	)

Total net revenue		1,329			1,325			1,365			1,528			1,546			—			(14	)		5,547			6,520			(15	)
Provision for credit losses		2,337			1,197			1,372			3,325			3,739			95			(37	)		8,231			13,563			(39	)
Noninterest expense		413			390			405			419			565			6			(27	)		1,627			1,847			(12	)

Income/(loss) before income tax expense/(benefit)		(1,421	)		(262	)		(412	)		(2,216	)		(2,758	)		(442	)		48			(4,311	)		(8,890	)		52

Net income/(loss)	$	(823	)	$	(148	)	$	(236	)	$	(1,286	)	$	(1,692	)		(456	)		51		$	(2,493	)	$	(5,449	)		54


Overhead ratio		31	%		29	%		30	%		27	%		37	%								29	%		28	%

BUSINESS METRICS (in billions)
LOANS EXCLUDING PURCHASED CREDIT-IMPAIRED LOANS (a)
End-of-period loans owned:
Home equity	$	88.4		$	91.7		$	94.8		$	97.7		$	101.4			(4	)		(13	)	$	88.4		$	101.4			(13	)
Prime mortgage		41.7			42.9			44.6			46.8			47.5			(3	)		(12	)		41.7			47.5			(12	)
Subprime mortgage		11.3			12.0			12.6			13.2			12.5			(6	)		(10	)		11.3			12.5			(10	)
Option ARMs		8.1			8.4			8.5			8.6			8.5			(4	)		(5	)		8.1			8.5			(5	)
Other		0.8			0.9			1.0			1.0			0.7			(11	)		14			0.8			0.7			14

Total end-of-period loans owned		150.3			155.9			161.5			167.3			170.6			(4	)		(12	)		150.3			170.6			(12	)
Average loans owned:
Home equity		90.2			93.3			96.3			99.5			103.3			(3	)		(13	)		94.8			108.3			(12	)
Prime mortgage		42.4			43.8			45.7			47.9			48.8			(3	)		(13	)		44.9			53.4			(16	)
Subprime mortgage		11.8			12.3			13.1			13.8			12.8			(4	)		(8	)		12.7			13.9			(9	)
Option ARMs		8.3			8.4			8.6			8.7			8.7			(1	)		(5	)		8.5			8.9			(4	)
Other		0.9			1.0			1.0			1.1			0.7			(10	)		29			1.0			0.8			25

Total average loans owned		153.6			158.8			164.7			171.0			174.3			(3	)		(12	)		161.9			185.3			(13	)
PURCHASED CREDIT-IMPAIRED LOANS (a)
End-of-period loans owned:
Home equity		24.5			25.0			25.5			26.0			26.5			(2	)		(8	)		24.5			26.5			(8	)
Prime mortgage		17.3			17.9			18.5			19.2			19.7			(3	)		(12	)		17.3			19.7			(12	)
Subprime mortgage		5.4			5.5			5.6			5.8			6.0			(2	)		(10	)		5.4			6.0			(10	)
Option ARMs		25.6			26.4			27.3			28.3			29.0			(3	)		(12	)		25.6			29.0			(12	)

Total end-of-period loans owned		72.8			74.8			76.9			79.3			81.2			(3	)		(10	)		72.8			81.2			(10	)
Average loans owned:
Home equity		24.7			25.2			25.7			26.2			26.7			(2	)		(7	)		25.5			27.6			(8	)
Prime mortgage		17.6			18.2			18.8			19.5			20.0			(3	)		(12	)		18.5			20.8			(11	)
Subprime mortgage		5.4			5.6			5.8			5.9			6.1			(4	)		(11	)		5.7			6.3			(10	)
Option ARMs		25.9			26.7			27.7			28.6			29.3			(3	)		(12	)		27.2			30.5			(11	)

Total average loans owned		73.6			75.7			78.0			80.2			82.1			(3	)		(10	)		76.9			85.2			(10	)
TOTAL REAL ESTATE PORTFOLIOS
End-of-period loans owned:
Home equity		112.9			116.7			120.3			123.7			127.9			(3	)		(12	)		112.9			127.9			(12	)
Prime mortgage		59.0			60.8			63.1			66.0			67.2			(3	)		(12	)		59.0			67.2			(12	)
Subprime mortgage		16.7			17.5			18.2			19.0			18.5			(5	)		(10	)		16.7			18.5			(10	)
Option ARMs		33.7			34.8			35.8			36.9			37.5			(3	)		(10	)		33.7			37.5			(10	)
Other		0.8			0.9			1.0			1.0			0.7			(11	)		14			0.8			0.7			14

Total end-of-period loans owned		223.1			230.7			238.4			246.6			251.8			(3	)		(11	)		223.1			251.8			(11	)
Average loans owned:
Home equity		114.9			118.5			122.0			125.7			130.0			(3	)		(12	)		120.3			135.9			(11	)
Prime mortgage		60.0			62.0			64.5			67.4			68.8			(3	)		(13	)		63.4			74.2			(15	)
Subprime mortgage		17.2			17.9			18.9			19.7			18.9			(4	)		(9	)		18.4			20.2			(9	)
Option ARMs		34.2			35.1			36.3			37.3			38.0			(3	)		(10	)		35.7			39.4			(9	)
Other		0.9			1.0			1.0			1.1			0.7			(10	)		29			1.0			0.8			25

Total average loans owned		227.2			234.5			242.7			251.2			256.4			(3	)		(11	)		238.8			270.5			(12	)
Average assets		215.3			222.5			230.3			240.2			247.3			(3	)		(13	)		227.0			263.6			(14	)
Home equity origination volume		0.3			0.3			0.3			0.3			0.4			—			(25	)		1.2			2.4			(50	)


(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 loan 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																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
REAL ESTATE PORTFOLIOS (continued)
CREDIT DATA AND QUALITY STATISTICS
Net charge-offs excluding purchased credit-impaired
loans (a) (b)
Home equity	$	792		$	730		$	796		$	1,126		$	1,177			8	%		(33	)%	$	3,444		$	4,682			(26	)%
Prime mortgage		516			255			251			453			568			102			(9	)		1,475			1,872			(21	)
Subprime mortgage		429			206			282			457			452			108			(5	)		1,374			1,648			(17	)
Option ARMs		42			11			22			23			29			282			45			98			63			56
Other		10			12			21			16			24			(17	)		(58	)		59			78			(24	)

Total net charge-offs		1,789			1,214			1,372			2,075			2,250			47			(20	)		6,450			8,343			(23	)
Net charge-off rate excluding purchased credit-impaired
loans (a) (b)
Home equity		3.48	%		3.10	%		3.32	%		4.59	%		4.52	%								3.63	%		4.32	%
Prime mortgage		4.83			2.31			2.20			3.84			4.62									3.29			3.51
Subprime mortgage		14.42			6.64			8.63			13.43			14.01									10.82			11.86
Option ARMs		2.01			0.52			1.03			1.07			1.32									1.15			0.71
Other		4.41			4.76			8.42			5.90			13.60									5.90			9.75
Total net charge-off rate excluding purchased credit-impaired loans		4.62			3.03			3.34			4.92			5.12									3.98			4.50
Net charge-off rate — reported
Home equity		2.73			2.44			2.62			3.63			3.59									2.86			3.45
Prime mortgage		3.41			1.63			1.56			2.73			3.28									2.33			2.52
Subprime mortgage		9.90			4.57			5.98			9.41			9.49									7.47			8.16
Option ARMs		0.49			0.12			0.24			0.25			0.30									0.27			0.16
Other		4.41			4.76			8.42			5.90			13.60									5.90			9.75
Total net charge-off rate — reported		3.12			2.05			2.27			3.35			3.48									2.70			3.08

30+ day delinquency rate excluding purchased credit-impaired loans (c)		6.45			6.77			6.88			7.28			7.73									6.45			7.73
Allowance for loan losses	$	14,659		$	14,111		$	14,127		$	14,127		$	12,752			4			15		$	14,659		$	12,752			15
Nonperforming assets (d) (e)		8,424			9,456			9,974			10,313			10,347			(11	)		(19	)		8,424			10,347			(19	)
Allowance for loan losses to ending loans retained		6.57	%		6.12	%		5.93	%		5.73	%		5.06	%								6.57	%		5.06	%
Allowance for loan losses to ending loans retained excluding purchased credit-impaired loans (a)		6.47			7.25			7.01			6.76			6.55									6.47			6.55


(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 $4.9 billion, $2.8 billion, $2.8 billion, $2.8 billion and $1.6 billion was recorded for these loans at December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively, which has also been excluded from the applicable ratios. To date, no charge-offs have been recorded for these loans.

(b)		Net charge-offs and net charge-off rates for the fourth quarter of 2010 include a one-time $632 million adjustment related to the timing of when the Firm recognizes charge-offs on delinquent loans. Excluding this adjustment, net charge-offs for the fourth quarter of 2010 were $725 million, $229 million, $182 million and $11 million for the home equity, prime mortgage, subprime mortgage and option ARM portfolios, respectively. Net charge-off rates excluding this adjustment and excluding purchased credit-impaired loans were 3.19%, 2.14%, 6.12% and 0.53% for the home equity, prime mortgage, subprime mortgage and option ARM portfolios, respectively. Loan balances used in the calculation of these net charge-off rates reflect the impact of this adjustment.

(c)		The delinquency rate for purchased credit-impaired loans was 28.20%, 28.07%, 27.91%, 28.49% and 27.79% at December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively.

(d)		Excludes purchased credit-impaired loans that were acquired as part of the Washington Mutual transaction, which are accounted for on a pool basis. Since each pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, the past-due status of the pools, or that of the individual loans within the pools, is not meaningful. Because the Firm is recognizing interest income on each pool of loans, they are all considered to be performing.

(e)		During the third quarter of 2010, $147 million of nonperforming assets pertaining to the second quarter of 2010 were reclassified from Real Estate Portfolios to Mortgage Banking & Other Consumer Lending.

Page 18


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


	QUARTERLY TRENDS																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
INCOME STATEMENT (a)
REVENUE
Credit card income	$	928		$	864		$	908		$	813		$	931			7	%		—	%	$	3,513		$	3,612			(3	)%
All other income (b)		(76	)		(58	)		(47	)		(55	)		(46	)		(31	)		(65	)		(236	)		(692	)		66

Noninterest revenue		852			806			861			758			885			6			(4	)		3,277			2,920			12
Net interest income		3,394			3,447			3,356			3,689			4,263			(2	)		(20	)		13,886			17,384			(20	)

TOTAL NET REVENUE		4,246			4,253			4,217			4,447			5,148			—			(18	)		17,163			20,304			(15	)

Provision for credit losses		671			1,633			2,221			3,512			4,239			(59	)		(84	)		8,037			18,462			(56	)

NONINTEREST EXPENSE
Compensation expense		318			316			327			330			336			1			(5	)		1,291			1,376			(6	)
Noncompensation expense		1,082			1,023			986			949			938			6			15			4,040			3,490			16
Amortization of intangibles		114			106			123			123			122			8			(7	)		466			515			(10	)

TOTAL NONINTEREST EXPENSE		1,514			1,445			1,436			1,402			1,396			5			8			5,797			5,381			8


Income/(loss) before income tax expense/(benefit)		2,061			1,175			560			(467	)		(487	)		75		NM				3,329			(3,539	)	NM
Income tax expense/(benefit)		762			440			217			(164	)		(181	)		73		NM				1,255			(1,314	)	NM

NET INCOME/(LOSS)	$	1,299		$	735		$	343		$	(303	)	$	(306	)		77		NM			$	2,074		$	(2,225	)	NM


Memo: Net securitization income/(loss)	NA			NA			NA			NA			$	17		NM			NM			NA			$	(474	)	NM

FINANCIAL RATIOS (a)
ROE		34	%		19	%		9	%		(8	)%		(8	)%								14	%		(15	)%
Overhead ratio		36			34			34			32			27									34			27
Percentage of average outstandings:
Net interest income		9.93			9.76			9.20			9.60			10.36									9.62			10.08
Provision for credit losses		1.96			4.63			6.09			9.14			10.30									5.57			10.71
Noninterest revenue		2.49			2.28			2.36			1.97			2.15									2.27			1.69
Risk adjusted margin (c)		10.46			7.42			5.47			2.43			2.21									6.32			1.07
Noninterest expense		4.43			4.09			3.94			3.65			3.39									4.02			3.12
Pretax income/(loss) (ROO) (d)		6.03			3.33			1.54			(1.22	)		(1.18	)								2.31			(2.05	)
Net income/(loss)		3.80			2.08			0.94			(0.79	)		(0.74	)								1.44			(1.29	)

BUSINESS METRICS
Sales volume (in billions)	$	85.9		$	79.6		$	78.1		$	69.4		$	78.8			8			9		$	313.0		$	294.1			6
New accounts opened		3.4			2.7			2.7			2.5			3.2			26			6			11.3			10.2			11
Open accounts		90.7			89.0			88.9			88.9			93.3			2			(3	)		90.7			93.3			(3	)

Merchant acquiring business
Bank card volume (in billions)	$	127.2		$	117.0		$	117.1		$	108.0		$	110.4			9			15		$	469.3		$	409.7			15
Total transactions (in billions)		5.6			5.2			5.0			4.7			4.9			8			14			20.5			18.0			14


(a)		Effective January 1, 2010, the Firm adopted new accounting guidance related to VIEs. For further details regarding the Firm’s application and impact of the new guidance, see footnote (a) on page 3.

(b)		Includes the impact of revenue sharing agreements with other JPMorgan Chase business segments. For periods prior to January 1, 2010, net securitization income/(loss) is also included.

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

(d)		Pretax return on average managed outstandings.

NA: Not applicable.

Page 19


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


	QUARTERLY TRENDS																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
SELECTED BALANCE SHEET DATA (Period-end)
Loans:
Loans on balance sheets	$	137,676		$	136,436		$	142,994		$	149,260		$	78,786			1	%		75	%	$	137,676		$	78,786			75	%
Securitized loans (a)	NA			NA			NA			NA				84,626		NM			NM			NA				84,626		NM

Total loans		137,676			136,436			142,994			149,260			163,412			1			(16	)		137,676			163,412			(16	)

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

SELECTED BALANCE SHEET DATA (Average)
Managed assets		138,443			141,029			146,816			156,968			184,535			(2	)		(25	)		145,750			192,749			(24	)
Loans:
Loans on balance sheets		135,585			140,059			146,302			155,790			77,759			(3	)		74			144,367			87,029			66
Securitized loans (a)	NA			NA			NA			NA				85,452		NM			NM			NA				85,378		NM

Total average loans		135,585			140,059			146,302			155,790			163,211			(3	)		(17	)		144,367			172,407			(16	)

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

Headcount		20,739			21,398			21,529			22,478			22,676			(3	)		(9	)		20,739			22,676			(9	)

CREDIT QUALITY STATISTICS (a)
Net charge-offs	$	2,671		$	3,133		$	3,721		$	4,512		$	3,839			(15	)		(30	)	$	14,037		$	16,077			(13	)
Net charge-off rate (b)(c)		7.85	%		8.87	%		10.20	%		11.75	%		9.33	%								9.73	%		9.33	%

Delinquency rates
30+ day (c)		4.07			4.57			4.96			5.62			6.28									4.07			6.28
90+ day (c)		2.22			2.41			2.76			3.15			3.59									2.22			3.59

Allowance for loan losses (d)	$	11,034		$	13,029		$	14,524		$	16,032		$	9,672			(15	)		14		$	11,034		$	9,672			14
Allowance for loan losses to period-end loans (d) (e) (f)		8.14	%		9.55	%		10.16	%		10.74	%		12.28	%								8.14	%		12.28	%

KEY STATS — WASHINGTON MUTUAL ONLY
Loans	$	13,733		$	14,504		$	15,615		$	17,204		$	19,653			(5	)		(30	)	$	13,733		$	19,653			(30	)
Average loans		14,092			15,126			16,455			18,607			20,377			(7	)		(31	)		16,055			23,642			(32	)
Net interest income (g)		16.59	%		16.27	%		14.97	%		15.06	%		17.12	%								15.66	%		17.11	%
Risk adjusted margin (g) (h)		12.22			12.90			15.43			2.47			(0.66	)								10.42			(0.93	)
Net charge-off rate (i)		14.20			15.58			19.53			24.14			20.49									18.73			18.79
30+ day delinquency rate (i)		7.74			8.29			8.86			10.49			12.72									7.74			12.72
90+ day delinquency rate (i)		4.40			4.54			5.17			6.32			7.76									4.40			7.76

KEY STATS — EXCLUDING WASHINGTON MUTUAL
Loans	$	123,943		$	121,932		$	127,379		$	132,056		$	143,759			2			(14	)	$	123,943		$	143,759			(14	)
Average loans		121,493			124,933			129,847			137,183			142,834			(3	)		(15	)		128,312			148,765			(14	)
Net interest income (g)		9.16	%		8.98	%		8.47	%		8.86	%		9.40	%								8.86	%		8.97	%
Risk adjusted margin (g) (h)		10.26			6.76			4.21			2.43			2.62									5.81			1.39
Net charge-off rate		7.08			8.06			9.02			10.54			8.64									8.72			8.45
30+ day delinquency rate		3.66			4.13			4.48			4.99			5.52									3.66			5.52
90+ day delinquency rate		1.98			2.16			2.47			2.74			3.13									1.98			3.13


(a)		Effective January 1, 2010, the Firm adopted new accounting guidance related to 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)		Total average loans includes loans held-for-sale of $586 million for the quarter ended December 31, 2010, and $148 million for full year 2010. These amounts are excluded when calculating the net charge-off rate. The net charge off rate including loans held-for-sale, which is a non-GAAP financial measure, would have been 7.82% for the quarter ended December 31, 2010 and 9.72% for the full year 2010.

(c)		Results reflect the impact of purchase accounting adjustments related to the Washington Mutual transaction and the consolidation of the Washington Mutual Master Trust (“WMMT”) in the second quarter of 2009. The net charge-off rate for the quarters ended December 31, 2010, September 30, 2010 and June 30, 2010, and delinquency rates as of December 31, 2010, September 30, 2010, June 30, 2010 and March 31, 2010 were not affected.

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

(e)		Includes $1.0 billion of loans at December 31, 2009, held by the WMMT, 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. Excluding these loans, the allowance for loan losses to period-end loans would have been 12.43%.

(f)		Total period-end loans includes loans held-for-sale of $2.2 billion at December 31, 2010. No allowance for loan losses was recorded for these loans as of December 31, 2010. The held-for-sale loans are excluded when calculating the allowance for loan losses to period-end loans. The allowance for loan losses to period-end loans including the loans held-for-sale, which is a non-GAAP financial measure, would have been 8.01%.

(g)		As a percentage of average managed outstandings.

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

(i)		Excludes the impact of purchase accounting adjustments related to the Washington Mutual transaction and the consolidation of the WMMT in the second quarter of 2009.

NA: Not applicable.

Page 20


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


	QUARTERLY TRENDS																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
INCOME STATEMENT DATA
Credit card income
Reported	$	928		$	864		$	908		$	813		$	1,306			7	%		(29	)%	$	3,513		$	5,106			(31	)%
Securitization adjustments (a)	NA			NA			NA			NA				(375	)	NM			NM			NA				(1,494	)	NM

Managed credit card income	$	928		$	864		$	908		$	813		$	931			7			—		$	3,513		$	3,612			(3	)


Net interest income
Reported	$	3,394		$	3,447		$	3,356		$	3,689		$	2,271			(2	)		49		$	13,886		$	9,447			47
Securitization adjustments (a)	NA			NA			NA			NA				1,992		NM			NM			NA				7,937		NM

Managed net interest income	$	3,394		$	3,447		$	3,356		$	3,689		$	4,263			(2	)		(20	)	$	13,886		$	17,384			(20	)


Total net revenue
Reported	$	4,246		$	4,253		$	4,217		$	4,447		$	3,531			—			20		$	17,163		$	13,861			24
Securitization adjustments (a)	NA			NA			NA			NA				1,617		NM			NM			NA				6,443		NM

Managed total net revenue	$	4,246		$	4,253		$	4,217		$	4,447		$	5,148			—			(18	)	$	17,163		$	20,304			(15	)


Provision for credit losses
Reported	$	671		$	1,633		$	2,221		$	3,512		$	2,622			(59	)		(74	)	$	8,037		$	12,019			(33	)
Securitization adjustments (a)	NA			NA			NA			NA				1,617		NM			NM			NA				6,443		NM

Managed provision for credit losses	$	671		$	1,633		$	2,221		$	3,512		$	4,239			(59	)		(84	)	$	8,037		$	18,462			(56	)


BALANCE SHEETS — AVERAGE BALANCES
Total average assets
Reported	$	138,443		$	141,029		$	146,816		$	156,968		$	102,748			(2	)		35		$	145,750		$	110,516			32
Securitization adjustments (a)	NA			NA			NA				NA			81,787		NM			NM			NA				82,233		NM

Managed average assets	$	138,443		$	141,029		$	146,816		$	156,968		$	184,535			(2	)		(25	)	$	145,750		$	192,749			(24	)


CREDIT QUALITY STATISTICS
Net charge-offs
Reported	$	2,671		$	3,133		$	3,721		$	4,512		$	2,222			(15	)		20		$	14,037		$	9,634			46
Securitization adjustments (a)	NA			NA			NA			NA				1,617		NM			NM			NA				6,443		NM

Managed net charge-offs	$	2,671		$	3,133		$	3,721		$	4,512		$	3,839			(15	)		(30	)	$	14,037		$	16,077			(13	)


Net charge-off rates
Reported		7.85	%		8.87	%		10.20	%		11.75	%		11.34	%								9.73	%		11.07	%
Securitized (a)	NA			NA			NA			NA				7.51								NA				7.55
Managed net charge-off rate		7.85			8.87			10.20			11.75			9.33									9.73			9.33


(a)		Effective January 1, 2010, the Firm adopted new accounting guidance related to 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.

NA: Not applicable.

Page 21

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


	QUARTERLY TRENDS																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
INCOME STATEMENT
REVENUE
Lending- and deposit-related fees	$	273		$	269		$	280		$	277		$	279			1	%		(2	)%	$	1,099		$	1,081			2	%
Asset management, administration and commissions		35			36			36			37			35			(3	)		—			144			140			3
All other income (a)		299			242			230			186			149			24			101			957			596			61

Noninterest revenue		607			547			546			500			463			11			31			2,200			1,817			21
Net interest income		1,004			980			940			916			943			2			6			3,840			3,903			(2	)

TOTAL NET REVENUE (b)		1,611			1,527			1,486			1,416			1,406			6			15			6,040			5,720			6

Provision for credit losses		152			166			(235	)		214			494			(8	)		(69	)		297			1,454			(80	)

NONINTEREST EXPENSE
Compensation expense		208			210			196			206			183			(1	)		14			820			776			6
Noncompensation expense		342			341			337			324			351			—			(3	)		1,344			1,359			(1	)
Amortization of intangibles		8			9			9			9			9			(11	)		(11	)		35			41			(15	)

TOTAL NONINTEREST EXPENSE		558			560			542			539			543			—			3			2,199			2,176			1


Income before income tax expense		901			801			1,179			663			369			12			144			3,544			2,090			70
Income tax expense		371			330			486			273			145			12			156			1,460			819			78

NET INCOME	$	530		$	471		$	693		$	390		$	224			13			137		$	2,084		$	1,271			64

Revenue by product:
Lending	$	749		$	693		$	649		$	658		$	639			8			17		$	2,749		$	2,663			3
Treasury services		659			670			665			638			645			(2	)		2			2,632			2,642			—
Investment banking		126			120			115			105			108			5			17			466			394			18
Other		77			44			57			15			14			75			450			193			21		NM

Total Commercial Banking revenue	$	1,611		$	1,527		$	1,486		$	1,416		$	1,406			6			15		$	6,040		$	5,720			6


IB revenue, gross (c)	$	347		$	344		$	333		$	311		$	328			1			6		$	1,335		$	1,163			15

Revenue by client segment:
Middle Market Banking	$	781		$	766		$	767		$	746		$	760			2			3		$	3,060		$	3,055			—
Commercial Term Lending		301			256			237			229			191			18			58			1,023			875			17
Mid-Corporate Banking		302			304			285			263			277			(1	)		9			1,154			1,102			5
Real Estate Banking		117			118			125			100			100			(1	)		17			460			461			—
Other		110			83			72			78			78			33			41			343			227			51

Total Commercial Banking revenue	$	1,611		$	1,527		$	1,486		$	1,416		$	1,406			6			15		$	6,040		$	5,720			6


FINANCIAL RATIOS
ROE		26	%		23	%		35	%		20	%		11	%								26	%		16	%
Overhead ratio		35			37			36			38			39									36			38


(a)		Revenue from investment banking products sold to Commercial Banking (“CB”) clients and commercial card fee 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 $85 million, $59 million, $49 million, $45 million and $53 million for quarters ended December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively, and $238 million and $170 million for full year 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 headcount and ratio data)


	QUARTERLY TRENDS																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
SELECTED BALANCE SHEET DATA (Period-end)
Loans:
Loans retained	$	97,900		$	97,738		$	95,090		$	95,435		$	97,108			—	%		1	%	$	97,900		$	97,108			1	%
Loans held-for-sale and loans at fair value		1,018			399			446			294			324			155			214			1,018			324			214

Total loans		98,918			98,137			95,536			95,729			97,432			1			2			98,918			97,432			2
Equity		8,000			8,000			8,000			8,000			8,000			—			—			8,000			8,000			—

SELECTED BALANCE SHEET DATA (Average)
Total assets	$	138,041		$	130,237		$	133,309		$	133,013		$	129,948			6			6		$	133,654		$	135,408			(1	)
Loans:
Loans retained		97,823			96,657			95,521			96,317			99,794			1			(2	)		96,584			106,421			(9	)
Loans held-for-sale and loans at fair value		612			384			391			297			386			59			59			422			317			33

Total loans		98,435			97,041			95,912			96,614			100,180			1			(2	)		97,006			106,738			(9	)
Liability balances		147,534			137,853			136,770			133,142			122,471			7			20			138,862			113,152			23
Equity		8,000			8,000			8,000			8,000			8,000			—			—			8,000			8,000			—

Average loans by client segment:
Middle Market Banking	$	36,561		$	35,299		$	34,424		$	33,919		$	34,794			4			5		$	35,059		$	37,459			(6	)
Commercial Term Lending		38,358			37,509			35,956			36,057			36,507			2			5			36,978			36,806			—
Mid-Corporate Banking		11,771			11,807			11,875			12,258			13,510			—			(13	)		11,926			15,951			(25	)
Real Estate Banking		8,169			8,983			9,814			10,438			11,133			(9	)		(27	)		9,344			12,066			(23	)
Other		3,576			3,443			3,843			3,942			4,236			4			(16	)		3,699			4,456			(17	)

Total Commercial Banking loans	$	98,435		$	97,041		$	95,912		$	96,614		$	100,180			1			(2	)	$	97,006		$	106,738			(9	)


Headcount		4,881			4,805			4,808			4,701			4,151			2			18			4,881			4,151			18

CREDIT DATA AND QUALITY STATISTICS
Net charge-offs	$	286		$	218		$	176		$	229		$	483			31			(41	)	$	909		$	1,089			(17	)
Nonperforming assets:
Nonperforming loans:
Nonperforming loans retained (a)		1,964			2,898			3,036			2,947			2,764			(32	)		(29	)		1,964			2,764			(29	)
Nonperforming loans held-for-sale and loans at fair value		36			48			41			49			37			(25	)		(3	)		36			37			(3	)

Total nonperforming loans		2,000			2,946			3,077			2,996			2,801			(32	)		(29	)		2,000			2,801			(29	)

Assets acquired in loan satisfactions		197			281			208			190			188			(30	)		5			197			188			5

Total nonperforming assets		2,197			3,227			3,285			3,186			2,989			(32	)		(26	)		2,197			2,989			(26	)
Allowance for credit losses:
Allowance for loan losses		2,552			2,661			2,686			3,007			3,025			(4	)		(16	)		2,552			3,025			(16	)
Allowance for lending-related commitments		209			241			267			359			349			(13	)		(40	)		209			349			(40	)

Total allowance for credit losses		2,761			2,902			2,953			3,366			3,374			(5	)		(18	)		2,761			3,374			(18	)

Net charge-off rate		1.16	%		0.89	%		0.74	%		0.96	%		1.92	%								0.94	%		1.02	%
Allowance for loan losses to period-end loans retained		2.61			2.72			2.82			3.15			3.12									2.61			3.12
Allowance for loan losses to average loans retained		2.61			2.75			2.81			3.12			3.03									2.64			2.84
Allowance for loan losses to nonperforming loans retained		130			92			88			102			109									130			109
Nonperforming loans to total period-end loans		2.02			3.00			3.22			3.13			2.87									2.02			2.87
Nonperforming loans to total average loans		2.03			3.04			3.21			3.10			2.80									2.06			2.62


(a)		Allowance for loan losses of $340 million, $535 million, $586 million, $612 million and $581 million were held against nonperforming loans retained at December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively.

Page 23

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


	QUARTERLY TRENDS																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
INCOME STATEMENT
REVENUE
Lending- and deposit-related fees	$	314		$	318		$	313		$	311		$	330			(1	)%		(5	)%	$	1,256		$	1,285			(2	)%
Asset management, administration and commissions		689			644			705			659			675			7			2			2,697			2,631			3
All other income		209			210			209			176			212			—			(1	)		804			831			(3	)

Noninterest revenue		1,212			1,172			1,227			1,146			1,217			3			—			4,757			4,747			—
Net interest income		701			659			654			610			618			6			13			2,624			2,597			1

TOTAL NET REVENUE		1,913			1,831			1,881			1,756			1,835			4			4			7,381			7,344			1

Provision for credit losses		10			(2	)		(16	)		(39	)		53		NM				(81	)		(47	)		55		NM
Credit reimbursement to IB (a)		(30	)		(31	)		(30	)		(30	)		(30	)		3			—			(121	)		(121	)		—

NONINTEREST EXPENSE
Compensation expense		679			701			697			657			668			(3	)		2			2,734			2,544			7
Noncompensation expense		763			693			684			650			704			10			8			2,790			2,658			5
Amortization of intangibles		28			16			18			18			19			75			47			80			76			5

TOTAL NONINTEREST EXPENSE		1,470			1,410			1,399			1,325			1,391			4			6			5,604			5,278			6


Income before income tax expense		403			392			468			440			361			3			12			1,703			1,890			(10	)
Income tax expense		146			141			176			161			124			4			18			624			664			(6	)

NET INCOME	$	257		$	251		$	292		$	279		$	237			2			8		$	1,079		$	1,226			(12	)


REVENUE BY BUSINESS
Treasury Services	$	953		$	937		$	926		$	882		$	918			2			4		$	3,698		$	3,702			—
Worldwide Securities Services		960			894			955			874			917			7			5			3,683			3,642			1

TOTAL NET REVENUE	$	1,913		$	1,831		$	1,881		$	1,756		$	1,835			4			4		$	7,381		$	7,344			1


FINANCIAL RATIOS
ROE		16	%		15	%		18	%		17	%		19	%								17	%		25	%
Overhead ratio		77			77			74			75			76									76			72
Pretax margin ratio		21			21			25			25			20									23			26

SELECTED BALANCE SHEET DATA (Period-end)
Loans (b)	$	27,168		$	26,899		$	24,513		$	24,066		$	18,972			1			43		$	27,168		$	18,972			43
Equity		6,500			6,500			6,500			6,500			5,000			—			30			6,500			5,000			30

SELECTED BALANCE SHEET DATA (Average)
Total assets	$	46,301		$	42,445		$	42,868		$	38,273		$	36,589			9			27		$	42,494		$	35,963			18
Loans (b)		26,941			24,337			22,137			19,578			18,888			11			43			23,271			18,397			26
Liability balances		256,661			242,517			246,690			247,905			250,695			6			2			248,451			248,095			—
Equity		6,500			6,500			6,500			6,500			5,000			—			30			6,500			5,000			30

Headcount		29,073			28,544			27,943			27,223			26,609			2			9			29,073			26,609			9


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

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 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																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
TSS FIRMWIDE DISCLOSURES
TS revenue — reported	$	953		$	937		$	926		$	882		$	918			2	%		4	%	$	3,698		$	3,702			—	%
TS revenue reported in CB		659			670			665			638			645			(2	)		2			2,632			2,642			—
TS revenue reported in other lines of business		65			64			62			56			57			2			14			247			245			1

TS firmwide revenue (a)		1,677			1,671			1,653			1,576			1,620			—			4			6,577			6,589			—
Worldwide Securities Services revenue		960			894			955			874			917			7			5			3,683			3,642			1

TSS firmwide revenue (a)	$	2,637		$	2,565		$	2,608		$	2,450		$	2,537			3			4		$	10,260		$	10,231			—

TS firmwide liability balances (average) (b)	$	320,745		$	302,921		$	303,224		$	305,105		$	289,024			6			11		$	308,028		$	274,472			12
TSS firmwide liability balances (average) (b)		404,195			380,370			383,460			381,047			373,166			6			8			387,313			361,247			7

TSS FIRMWIDE FINANCIAL RATIOS
TS firmwide overhead ratio (c)		54	%		55	%		54	%		55	%		54	%								55	%		53	%
TSS firmwide overhead ratio (c)		66			65			64			65			66									65			62

FIRMWIDE BUSINESS METRICS
Assets under custody (in billions)	$	16,120		$	15,863		$	14,857		$	15,283		$	14,885			2			8		$	16,120		$	14,885			8
Number of:
US$ ACH transactions originated		995			978			970			949			975			2			2			3,892			3,896			—
Total US$ clearing volume (in thousands)		32,144			30,779			30,531			28,669			29,493			4			9			122,123			113,476			8
International electronic funds transfer volume (in thousands) (d)		60,882			57,333			58,484			55,754			53,354			6			14			232,453			193,348			20
Wholesale check volume		525			531			526			478			514			(1	)		2			2,060			2,184			(6	)
Wholesale cards issued (in thousands) (e)		29,785			28,404			28,066			27,352			27,138			5			10			29,785			27,138			10

CREDIT DATA AND QUALITY STATISTICS
Net charge-offs	$	—		$	1		$	—		$	—		$	—		NM				—		$	1		$	19			(95	)
Nonperforming loans		12			14			14			14			14			(14	)		(14	)		12			14			(14	)
Allowance for credit losses:
Allowance for loan losses		65			54			48			57			88			20			(26	)		65			88			(26	)
Allowance for lending-related commitments		51			52			68			76			84			(2	)		(39	)		51			84			(39	)

Total allowance for credit losses		116			106			116			133			172			9			(33	)		116			172			(33	)

Net charge-offs rate		—	%		0.02	%		—	%		—	%		—	%								—	%		0.10	%
Allowance for loan losses to period-end loans		0.24			0.20			0.20			0.24			0.46									0.24			0.46
Allowance for loan losses to average loans		0.24			0.22			0.22			0.29			0.47									0.28			0.48
Allowance for loan losses to nonperforming loans	NM				386			343			407		NM									NM			NM
Nonperforming loans to period-end loans		0.04			0.05			0.06			0.06			0.07									0.04			0.07
Nonperforming loans to average loans		0.04			0.06			0.06			0.07			0.07									0.05			0.08


(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 $181 million, $143 million, $175 million, $137 million, and $162 million for the quarters ended December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively, and $636 million and $661 million for full year 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 and headcount data)


	QUARTERLY TRENDS																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
INCOME STATEMENT
REVENUE
Asset management, administration and commissions	$	1,846		$	1,498		$	1,522		$	1,508		$	1,632			23	%		13	%	$	6,374		$	5,621			13	%
All other income		386			282			177			266			191			37			102			1,111			751			48

Noninterest revenue		2,232			1,780			1,699			1,774			1,823			25			22			7,485			6,372			17
Net interest income		381			392			369			357			372			(3	)		2			1,499			1,593			(6	)

TOTAL NET REVENUE		2,613			2,172			2,068			2,131			2,195			20			19			8,984			7,965			13

Provision for credit losses		23			23			5			35			58			—			(60	)		86			188			(54	)

NONINTEREST EXPENSE
Compensation expense		1,078			914			861			910			907			18			19			3,763			3,375			11
Noncompensation expense		679			557			527			514			543			22			25			2,277			2,021			13
Amortization of intangibles		20			17			17			18			20			18			—			72			77			(6	)

TOTAL NONINTEREST EXPENSE		1,777			1,488			1,405			1,442			1,470			19			21			6,112			5,473			12


Income before income tax expense		813			661			658			654			667			23			22			2,786			2,304			21
Income tax expense		306			241			267			262			243			27			26			1,076			874			23

NET INCOME	$	507		$	420		$	391		$	392		$	424			21			20		$	1,710		$	1,430			20


REVENUE BY CLIENT SEGMENT
Private Banking (a)	$	1,376		$	1,181		$	1,153		$	1,150		$	1,166			17			18		$	4,860		$	4,320			13
Institutional		675			506			455			544			584			33			16			2,180			2,065			6
Retail		562			485			460			437			445			16			26			1,944			1,580			23

TOTAL NET REVENUE	$	2,613		$	2,172		$	2,068		$	2,131		$	2,195			20			19		$	8,984		$	7,965			13


FINANCIAL RATIOS
ROE		31	%		26	%		24	%		24	%		24	%								26	%		20	%
Overhead ratio		68			69			68			68			67									68			69
Pretax margin ratio		31			30			32			31			30									31			29

SELECTED BALANCE SHEET DATA (Period-end)
Loans	$	44,084		$	41,408		$	38,744		$	37,088		$	37,755			6			17		$	44,084		$	37,755			17
Equity		6,500			6,500			6,500			6,500			7,000			—			(7	)		6,500			7,000			(7	)

SELECTED BALANCE SHEET DATA (Average)
Total assets	$	69,290		$	64,911		$	63,426		$	62,525		$	63,036			7			10		$	65,056		$	60,249			8
Loans		42,296			39,417			37,407			36,602			36,137			7			17			38,948			34,963			11
Deposits		89,314			87,841			86,453			80,662			77,352			2			15			86,096			77,005			12
Equity		6,500			6,500			6,500			6,500			7,000			—			(7	)		6,500			7,000			(7	)

Headcount		16,918			16,510			16,019			15,321			15,136			2			12			16,918			15,136			12


(a)		Private Banking is a combination of the previously disclosed client segments: Private Bank, Private Wealth Management and JPMorgan Securities.

Page 26

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


	QUARTERLY TRENDS																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
BUSINESS METRICS
Number of:
Client advisors		2,245			2,209			2,055			1,987			1,934			2	%		16	%		2,245			1,934			16	%
Retirement planning services participants (in thousands)		1,580			1,665			1,653			1,651			1,628			(5)			(3)			1,580			1,628			(3)
JPMorgan Securities brokers (a)		415			419			402			390			376			(1	)		10			415			376			10
% of customer assets in 4 & 5 Star Funds (b)		49	%		42	%		43	%		43	%		42	%		17			17			49	%		42	%		17
% of AUM in 1^stand 2^nd quartiles: (c)
1 year		67	%		67	%		58	%		55	%		57	%		—			18			67	%		57	%		18
3 years		72	%		65	%		67	%		67	%		62	%		11			16			72	%		62	%		16
5 years		80	%		74	%		78	%		77	%		74	%		8			8			80	%		74	%		8

CREDIT DATA AND QUALITY STATISTICS
Net charge-offs	$	8		$	13		$	27		$	28		$	35		(38)			(77)			$	76		$	117		(35)
Nonperforming loans		375			294			309			475			580		28			(35)				375			580		(35)
Allowance for credit losses:
Allowance for loan losses		267			257			250			261			269		4			(1)				267			269		(1)
Allowance for lending-related commitments		4			3			3			13			9		33			(56)				4			9		(56)

Total allowance for credit losses		271			260			253			274			278		4			(3)				271			278		(3)
Net charge-off rate		0.08	%		0.13	%		0.29	%		0.31	%		0.38	%								0.20	%		0.33	%
Allowance for loan losses to period-end loans		0.61			0.62			0.65			0.70			0.71									0.61			0.71
Allowance for loan losses to average loans		0.63			0.65			0.67			0.71			0.74									0.69			0.77
Allowance for loan losses to nonperforming loans		71			87			81			55			46									71			46
Nonperforming loans to period-end loans		0.85			0.71			0.80			1.28			1.54									0.85			1.54
Nonperforming loans to average loans		0.89			0.75			0.83			1.30			1.61									0.96			1.66


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

(b)		Derived from Morningstar for the U.S., the U.K., Luxembourg, France, Hong Kong and Taiwan; and Nomura for Japan.

(c)		Quartile ranking sourced from Lipper for the U.S. and Taiwan; Morningstar for the U.K., Luxembourg, France and Hong Kong; and Nomura for Japan.

Page 27

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


											December 31, 2010
											Change
	Dec 31		Sep 30		Jun 30		Mar 31		Dec 31		Sep 30			Dec 31
ASSETS UNDER SUPERVISION (a)	2010		2010		2010		2010		2009		2010			2009
Assets by asset class
Liquidity	$	497	$	521	$	489	$	521	$	591		(5	)%		(16	)%
Fixed income		289		277		259		246		226		4			28
Equities and multi-asset		404		362		322		355		339		12			19
Alternatives		108		97		91		97		93		11			16

TOTAL ASSETS UNDER MANAGEMENT		1,298		1,257		1,161		1,219		1,249		3			4
Custody/brokerage/administration/deposits		542		513		479		488		452		6			20

TOTAL ASSETS UNDER SUPERVISION	$	1,840	$	1,770	$	1,640	$	1,707	$	1,701		4			8


Assets by client segment
Private Banking (b)	$	284	$	276	$	258	$	268	$	270		3			5
Institutional		686		677		634		669		709		1			(3	)
Retail		328		304		269		282		270		8			21

TOTAL ASSETS UNDER MANAGEMENT	$	1,298	$	1,257	$	1,161	$	1,219	$	1,249		3			4


Private Banking (b)	$	731	$	698	$	653	$	666	$	636		5			15
Institutional		687		678		636		670		710		1			(3	)
Retail		422		394		351		371		355		7			19

TOTAL ASSETS UNDER SUPERVISION	$	1,840	$	1,770	$	1,640	$	1,707	$	1,701		4			8


Assets by geographic region
U.S./Canada	$	862	$	852	$	791	$	815	$	837	1			3
International		436		405		370		404		412	8			6

TOTAL ASSETS UNDER MANAGEMENT	$	1,298	$	1,257	$	1,161	$	1,219	$	1,249	3			4


U.S./Canada	$	1,271	$	1,237	$	1,151	$	1,189	$	1,182	3			8
International		569		533		489		518		519	7			10

TOTAL ASSETS UNDER SUPERVISION	$	1,840	$	1,770	$	1,640	$	1,707	$	1,701	4			8


Mutual fund assets by asset class
Liquidity	$	446	$	466	$	440	$	470	$	539	(4		)	(17		)
Fixed income		92		88		79		76		67	5			37
Equities and multi-asset		169		151		133		150		143	12			18
Alternatives		7		7		8		9		9	—			(22		)

TOTAL MUTUAL FUND ASSETS	$	714	$	712	$	660	$	705	$	758	—			(6		)


(a)		Excludes assets under management of American Century Companies, Inc. in which the Firm has a 41% ownership in the fourth and third quarters of 2010, and 42% in all other prior periods presented.

(b)		Private Banking is a combination of the previously disclosed client segments: Private Bank, Private Wealth Management and JPMorgan Securities.

Page 28

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


	QUARTERLY TRENDS															FULL YEAR
	4Q10			3Q10			2Q10			1Q10			4Q09			2010			2009
ASSETS UNDER SUPERVISION (continued)
Assets under management rollforward
Beginning balance	$	1,257		$	1,161		$	1,219		$	1,249		$	1,259		$	1,249		$	1,133
Net asset flows:
Liquidity		(25	)		27			(29	)		(62	)		(44	)		(89	)		(23	)
Fixed income		10			12			12			16			12			50			34
Equities, multi-asset and alternatives		13			(1	)		1			6			8			19			17
Market/performance/other impacts		43			58			(42	)		10			14			69			88

TOTAL ASSETS UNDER MANAGEMENT	$	1,298		$	1,257		$	1,161		$	1,219		$	1,249		$	1,298		$	1,249


Assets under supervision rollforward
Beginning balance	$	1,770		$	1,640		$	1,707		$	1,701		$	1,670		$	1,701		$	1,496
Net asset flows		1			41			(4	)		(10	)		(11	)		28			50
Market/performance/other impacts		69			89			(63	)		16			42			111			155

TOTAL ASSETS UNDER SUPERVISION	$	1,840		$	1,770		$	1,640		$	1,707		$	1,701		$	1,840		$	1,701

Page 29

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


	QUARTERLY TRENDS																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
INCOME STATEMENT
REVENUE
Principal transactions	$	587		$	1,143		$	(69	)	$	547		$	715			(49	)%		(18	)%	$	2,208		$	1,574			40	%
Securities gains		1,199			99			990			610			378		NM				217			2,898			1,139			154
All other income		(24	)		(29	)		182			124			13			17		NM				253			58			336

Noninterest revenue		1,762			1,213			1,103			1,281			1,106			45			59			5,359			2,771			93
Net interest income		(131	)		371			747			1,076			978		NM			NM				2,063			3,863			(47	)

TOTAL NET REVENUE (a)		1,631			1,584			1,850			2,357			2,084			3			(22	)		7,422			6,634			12

Provision for credit losses		2			(3	)		(2	)		17			9		NM				(78	)		14			80			(83	)

NONINTEREST EXPENSE
Compensation expense		538			574			770			475			747			(6	)		(28	)		2,357			2,811			(16	)
Noncompensation expense (b)		2,352			1,927			1,468			3,041			1,058			22			122			8,788			3,597			144
Merger costs		—			—			—			—			30			—		NM				—			481		NM

Subtotal		2,890			2,501			2,238			3,516			1,835			16			57			11,145			6,889			62
Net expense allocated to other businesses		(1,191	)		(1,227	)		(1,192	)		(1,180	)		(1,219	)		3			2			(4,790	)		(4,994	)		4

TOTAL NONINTEREST EXPENSE		1,699			1,274			1,046			2,336			616			33			176			6,355			1,895			235


Income/(loss) before income tax expense/(benefit) and extraordinary gain		(70	)		313			806			4			1,459		NM			NM				1,053			4,659			(77	)

Income tax expense/(benefit) (c)		(99	)		(35	)		153			(224	)		262			(183	)	NM				(205	)		1,705		NM

Income before extraordinary gain		29			348			653			228			1,197			(92	)		(98	)		1,258			2,954			(57	)
Extraordinary gain (d)		—			—			—			—			—			—			—			—			76		NM

NET INCOME	$	29		$	348		$	653		$	228		$	1,197			(92	)		(98	)	$	1,258		$	3,030			(58	)


MEMO:
TOTAL NET REVENUE
Private equity	$	355		$	721		$	48		$	115		$	296			(51	)		20		$	1,239		$	18		NM
Corporate		1,276			863			1,802			2,242			1,788			48			(29	)		6,183			6,616			(7	)

TOTAL NET REVENUE	$	1,631		$	1,584		$	1,850		$	2,357		$	2,084			3			(22	)	$	7,422		$	6,634			12


NET INCOME/(LOSS)
Private equity	$	178		$	344		$	11		$	55		$	141			(48	)		26		$	588		$	(78	)	NM
Corporate (e)		(149	)		4			642			173			1,056		NM			NM				670			3,108			(78	)

TOTAL NET INCOME/(LOSS)	$	29		$	348		$	653		$	228		$	1,197			(92	)		(98	)	$	1,258		$	3,030			(58	)


Headcount		20,030			19,756			19,482			19,307			20,119			1			—			20,030			20,119			—


(a)		Total net revenue included tax-equivalent adjustments, predominantly due to tax-exempt income from municipal bond investments of $63 million, $58 million, $57 million, $48 million and $41 million for the quarters ended December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively, and $226 million and $151 million for full year 2010 and 2009, respectively.

(b)		Includes litigation expense of $1.5 billion, $1.3 billion, $0.7 billion and $2.3 billion for the quarters ending December 31, 2010, September 30, 2010, June 30, 2010 and March 31, 2010, respectively, and $5.7 billion and a net benefit of $0.3 billion for full year 2010 and 2009, respectively.

(c)		Income tax expense in the third quarter of 2010, first quarter of 2010 and fourth quarter of 2009 included 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 JPMorgan Securities broker retention expense.

Page 30

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


	QUARTERLY TRENDS																			FULL YEAR
														4Q10												2010 Change
	4Q10			3Q10		2Q10			1Q10			4Q09		3Q10			4Q09			2010			2009			2009
SUPPLEMENTAL INFORMATION

TREASURY and CHIEF INVESTMENT OFFICE (“CIO”)
Securities gains (a)	$	1,199		$	99	$	989		$	610		$	378		NM	%		217	%	$	2,897		$	1,147			153	%
Investment securities portfolio (average)		322,218			321,428		320,578			330,584			353,224		—			(9	)		323,673			324,037			—
Investment securities portfolio (ending)		310,801			334,140		305,288			337,442			340,163		(7	)		(9	)		310,801			340,163			(9	)
Mortgage loans (average)		10,117			9,174		8,539			8,162			7,794		10			30			9,004			7,427			21
Mortgage loans (ending)		10,739			9,550		8,900			8,368			8,023		12			34			10,739			8,023			34

PRIVATE EQUITY
Private equity gains/(losses)
Direct investments
Realized gains	$	1,039		$	179	$	78		$	113		$	12		480		NM			$	1,409		$	109			NM
Unrealized gains/(losses) (b)		(781	)		561		(7	)		(75	)		224		NM			NM			(302	)		(81	)		(273	)

Total direct investments		258			740		71			38			236		(65	)		9			1,107			28			NM
Third-party fund investments		129			10		4			98			37	NM				249			241			(82	)		NM

Total private equity gains/(losses) (c)	$	387		$	750	$	75		$	136		$	273		(48	)		42		$	1,348		$	(54	)		NM


Private equity portfolio information
Direct investments
Publicly-held securities
Carrying value	$	875		$	1,152	$	873		$	890		$	762		(24	)		15
Cost		732			985		901			793			743		(26	)		(1	)
Quoted public value		935			1,249		974			982			791		(25	)		18
Privately-held direct securities
Carrying value		5,882			6,388		5,464			4,782			5,104		(8	)		15
Cost		6,887			6,646		6,507			5,795			5,959		4			16
Third-party fund investments (d)
Carrying value		1,980			1,814		1,782			1,603			1,459		9			36
Cost		2,404			2,356		2,315			2,134			2,079		2			16


Total private equity portfolio — Carrying value	$	8,737		$	9,354	$	8,119		$	7,275		$	7,325		(7	)		19


Total private equity portfolio — Cost	$	10,023		$	9,987	$	9,723		$	8,722		$	8,781		—			14


(a)		Reflects repositioning of the Corporate investment securities portfolio.

(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 $1.0 billion, $1.1 billion, $1.2 billion, $1.4 billion and $1.5 billion at December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively.

Page 31

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


											December 31, 2010
											Change
	Dec 31		Sep 30		Jun 30		Mar 31		Dec 31		Sep 30			Dec 31
	2010		2010		2010		2010		2009		2010			2009
CREDIT EXPOSURE
WHOLESALE (a)
Loans retained (b)	$	222,510	$	217,582	$	212,987	$	210,211	$	200,077		2	%		11	%
Loans held-for-sale and loans at fair value		5,123		3,015		3,839		4,079		4,098		70			25

TOTAL WHOLESALE LOANS — REPORTED		227,633		220,597		216,826		214,290		204,175		3			11
CONSUMER (c)
Home loan portfolio — excluding purchased credit-impaired loans:
Home equity		88,385		91,728		94,761		97,642		101,425		(4	)		(13	)
Prime mortgage (b)		66,424		65,790		66,429		68,210		66,892		1			(1	)
Subprime mortgage (b)		11,287		12,009		12,597		13,219		12,526		(6	)		(10	)
Option ARMs (b)		8,115		8,415		8,594		8,644		8,536		(4	)		(5	)

Total home loan portfolio — excluding purchased credit-impaired loans		174,211		177,942		182,381		187,715		189,379		(2	)		(8	)
Home loan portfolio — purchased credit-impaired loans: (d)
Home equity		24,459		24,982		25,471		26,012		26,520		(2	)		(8	)
Prime mortgage		17,322		17,904		18,512		19,203		19,693		(3	)		(12	)
Subprime mortgage		5,398		5,496		5,662		5,848		5,993		(2	)		(10	)
Option ARMs		25,584		26,370		27,256		28,260		29,039		(3	)		(12	)

Total home loan portfolio — purchased credit-impaired loans		72,763		74,752		76,901		79,323		81,245		(3	)		(10	)
Other consumer:
Auto (b)		48,367		48,186		47,548		47,381		46,031		—			5
Credit card — retained:
Loans excluding those held by the WaMu Master Trust (b)		135,524		136,436		142,994		149,260		77,784		(1	)		74
Loans held by the WaMu Master Trust (e)		—		—		—		—		1,002		—		NM

Total credit card — retained		135,524		136,436		142,994		149,260		78,786		(1	)		72
Other loans (b)		32,123		32,151		32,399		32,951		31,700		—			1

Loans retained		462,988		469,467		482,223		496,630		427,141		(1	)		8
Loans held-for-sale (f)		2,306		467		434		2,879		2,142		394			8

TOTAL CONSUMER LOANS — REPORTED		465,294		469,934		482,657		499,509		429,283		(1	)		8

TOTAL LOANS — REPORTED		692,927		690,531		699,483		713,799		633,458		—			9
Credit card — securitized (b)	NA		NA		NA		NA			84,626	NM			NM

TOTAL MANAGED LOANS (b)		692,927		690,531		699,483		713,799		718,084		—			(4	)
Derivative receivables		80,481		97,293		80,215		79,416		80,210		(17	)		—
Receivables from customers (g)		32,541		25,274		22,966		16,314		15,745		29			107
Interests in purchased receivables (b)		625		751		1,836		2,579		2,927		(17	)		(79	)

TOTAL CREDIT-RELATED ASSETS		806,574		813,849		804,500		812,108		816,966		(1	)		(1	)
Wholesale lending-related commitments (b)		346,079		338,612		324,552		326,921		347,155		2			—

TOTAL	$	1,152,653	$	1,152,461	$	1,129,052	$	1,139,029	$	1,164,121		—			(1	)

Memo: Total by category
Total wholesale exposure (h)	$	687,359	$	682,527	$	646,395	$	639,520	$	650,212		1			6
Total consumer loans (i)		465,294		469,934		482,657		499,509		513,909		(1	)		(9	)

Total	$	1,152,653	$	1,152,461	$	1,129,052	$	1,139,029	$	1,164,121		—			(1	)


(a)		Includes IB, CB, TSS, AM and Corporate/Private Equity.

(b)		Effective January 1, 2010, the Firm adopted new accounting guidance related to 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 RFS, CS and Corporate/Private Equity.

(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 underlying 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 WMMT 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.

(f)		Included loans for credit card of $2.2 billion at December 31, 2010, for prime mortgage of $154 million, $428 million, $185 million, $558 million and $450 million at December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively, and for other (largely student loans) of zero, $39 million, $249 million, $2.3 billion and $1.7 billion at December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively.

(g)		Represents margin loans to prime and retail brokerage customers, which are included in accrued interest and accounts receivable on the Consolidated Balance Sheets.

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

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

NA: Not applicable.

Page 32

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


																December 31, 2010
																Change
	Dec 31			Sep 30			Jun 30			Mar 31			Dec 31			Sep 30			Dec 31
	2010			2010			2010			2010			2009			2010			2009
NONPERFORMING ASSETS AND RATIOS
WHOLESALE LOANS
Loans retained	$	5,510		$	5,231		$	5,285		$	5,895		$	6,559			5	%		(16	)%
Loans held-for-sale and loans at fair value		496			409			375			331			345			21			44

TOTAL WHOLESALE LOANS		6,006			5,640			5,660			6,226			6,904			6			(13	)


CONSUMER LOANS
Home loan portfolio:
Home equity		1,263			1,251			1,211			1,427			1,665			1			(24	)
Prime mortgage		3,905			4,420			4,653			4,579			4,355			(12	)		(10	)
Subprime mortgage		2,210			2,649			3,115			3,331			3,248			(17	)		(32	)
Option ARMs		415			437			409			348			312			(5	)		33

Total home loan portfolio		7,793			8,757			9,388			9,685			9,580			(11	)		(19	)
Auto loans		141			145			155			174			177			(3	)		(20	)
Credit card — reported		2			2			3			3			3			—			(33	)
Other loans		899			959			973			962			900			(6	)		—

TOTAL CONSUMER LOANS (a)(b)		8,835			9,863			10,519			10,824			10,660			(10	)		(17	)

TOTAL NONPERFORMING LOANS REPORTED (c)		14,841			15,503			16,179			17,050			17,564			(4	)		(16	)


Derivative receivables		34			255			315			363			529			(87	)		(94	)
Assets acquired in loan satisfactions		1,682			1,898			1,662			1,606			1,648			(11	)		2

TOTAL NONPERFORMING ASSETS (a)	$	16,557		$	17,656		$	18,156		$	19,019		$	19,741			(6	)		(16	)


TOTAL NONPERFORMING LOANS TO TOTAL LOANS REPORTED		2.14	%		2.25	%		2.31	%		2.39	%		2.77	%

NONPERFORMING ASSETS BY LOB
Investment Bank	$	3,770		$	2,789		$	2,726		$	3,289		$	4,236			35			(11	)
Retail Financial Services (b)		10,121			11,255			11,731			11,974			11,864			(10	)		(15	)
Card Services		2			2			3			3			3			—			(33	)
Commercial Banking		2,197			3,227			3,285			3,186			2,989			(32	)		(26	)
Treasury & Securities Services		12			14			14			14			14			(14	)		(14	)
Asset Management		382			299			337			498			582			28			(34	)
Corporate/Private Equity (d)		73			70			60			55			53			4			38

TOTAL	$	16,557		$	17,656		$	18,156		$	19,019		$	19,741			(6	)		(16	)


(a)		Nonperforming assets exclude: (1) mortgage loans insured by U.S. government agencies of $10.5 billion, $10.2 billion, $10.1 billion, $10.5 billion and $9.0 billion at December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively, that are 90 days past due and accruing at the guaranteed reimbursement rate; (2) real estate owned insured by U.S. government agencies of $1.9 billion, $1.7 billion, $1.4 billion, $707 million and $579 million at December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively; and (3) student loans that are 90 days past due and still accruing, which are insured by U.S. government agencies under the FFELP, of $625 million, $572 million, $447 million, $581 million and $542 million at December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively. These amounts are excluded as reimbursement of insured amounts 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 purchased credit-impaired loans that were acquired as part of the Washington Mutual transaction, which are accounted for on a pool basis. Since each pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, the past-due status of the pools, or that of the individual loans within the pools, is not meaningful. Because the Firm is recognizing interest income on each pool of loans, they are all 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 related to 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 33

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


	QUARTERLY TRENDS																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
GROSS CHARGE-OFFS (a)
Wholesale loans	$	414		$	297		$	264		$	1,014		$	1,230			39	%		(66	)%	$	1,989		$	3,226			(38	)%
Consumer loans, excluding credit card		2,277			1,677			1,874			2,555			2,825			36			(19	)		8,383			10,421			(20	)
Credit card loans — reported		2,980			3,485			4,063			4,882			2,405			(14	)		24			15,410			10,371			49

Total loans — reported		5,671			5,459			6,201			8,451			6,460			4			(12	)		25,782			24,018			7
Credit card loans — securitized	NA			NA			NA			NA				1,733		NM			NM			NA				6,898		NM

Total loans — managed		5,671			5,459			6,201			8,451			8,193			4			(31	)		25,782			30,916			(17	)


RECOVERIES (a)
Wholesale loans		143			31			33			55			26			361			450			262			94			179
Consumer loans, excluding credit card		115			131			112			116			74			(12	)		55			474			222			114
Credit card loans — reported		309			352			342			370			183			(12	)		69			1,373			737			86

Total loans — reported		567			514			487			541			283			10			100			2,109			1,053			100
Credit card loans — securitized	NA			NA			NA			NA				116		NM			NM			NA				455		NM

Total loans — managed		567			514			487			541			399			10			42			2,109			1,508			40


NET CHARGE-OFFS (a)
Wholesale loans		271			266			231			959			1,204			2			(77	)		1,727			3,132			(45	)
Consumer loans, excluding credit card		2,162			1,546			1,762			2,439			2,751			40			(21	)		7,909			10,199			(22	)
Credit card loans — reported		2,671			3,133			3,721			4,512			2,222			(15	)		20			14,037			9,634			46

Total loans — reported		5,104			4,945			5,714			7,910			6,177			3			(17	)		23,673			22,965			3
Credit card loans — securitized	NA			NA			NA			NA				1,617		NM			NM			NA				6,443		NM

Total loans — managed	$	5,104		$	4,945		$	5,714		$	7,910		$	7,794			3			(35	)	$	23,673		$	29,408			(20	)


NET CHARGE-OFF RATES (a)
Wholesale retained loans		0.49	%		0.49	%		0.44	%		1.84	%		2.31	%								0.81	%		1.40	%
Consumer retained loans		4.12			3.90			4.49			5.56			4.60									4.53			4.41
Total retained loans — reported		2.95			2.84			3.28			4.46			3.85									3.39			3.42
Consumer loans — managed		4.12			3.90			4.49			5.56			5.08									4.53			4.91
Total loans — managed		2.95			2.84			3.28			4.46			4.29									3.39			3.88
Consumer loans — managed excluding purchased credit-impaired loans (b)		4.89			4.64			5.34			6.61			6.05									5.38			5.85
Total loans — managed excluding purchased credit-impaired loans (b)		3.31			3.19			3.69			5.03			4.84									3.81			4.37

Memo: Average Retained Loans (a)
Wholesale loans — reported	$	219,750		$	213,979		$	209,016		$	211,599		$	206,846								$	213,609		$	223,047
Consumer loans — reported		465,523			476,137			490,149			506,949			428,964									484,553			449,245
Total loans — reported		685,273			690,116			699,165			718,548			635,810									698,162			672,292
Consumer loans — managed		465,523			476,137			490,149			506,949			514,416									484,553			534,623
Total loans — managed		685,273			690,116			699,165			718,548			721,262									698,162			757,670


(a)		Effective January 1, 2010, the Firm adopted new accounting guidance related to 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.

NA: Not applicable.

Page 34

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


	QUARTERLY TRENDS																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
SUMMARY OF CHANGES IN THE ALLOWANCES
ALLOWANCE FOR LOAN LOSSES
Beginning balance at January 1,	$	34,161		$	35,836		$	38,186		$	31,602		$	30,633			(5	)%		12	%	$	31,602		$	23,164			36	%
Cumulative effect of change in accounting principles (a)		—			—			—			7,494			—			—			—			7,494			—		NM
Net charge-offs (a)		5,104			4,945			5,714			7,910			6,177			3			(17	)		23,673			22,965			3
Provision for loan losses (a)		3,207			3,244			3,380			6,991			7,166			(1	)		(55	)		16,822			31,735			(47	)
Other (b)		2			26			(16	)		9			(20	)		(92	)	NM				21			(332	)	NM

Ending balance	$	32,266		$	34,161		$	35,836		$	38,186		$	31,602			(6	)		2		$	32,266		$	31,602			2

ALLOWANCE FOR LENDING-RELATED COMMITMENTS
Beginning balance at January 1,	$	873		$	912		$	940		$	939		$	821			(4	)		6		$	939		$	659			42
Cumulative effect of change in accounting principles (a)		—			—			—			(18	)		—			—			—			(18	)		—		NM
Provision for lending-related commitments		(164	)		(21	)		(17	)		19			118		NM			NM				(183	)		280		NM
Other		8			(18	)		(11	)		—			—		NM			NM				(21	)		—		NM

Ending balance	$	717		$	873		$	912		$	940		$	939			(18	)		(24	)	$	717		$	939			(24	)


ALLOWANCE FOR LOAN LOSSES BY LOB
Investment Bank (a)	$	1,863		$	1,976		$	2,149		$	2,601		$	3,756			(6	)		(50	)
Retail Financial Services (a)		16,453			16,154			16,152			16,200			14,776			2			11
Card Services (a)		11,034			13,029			14,524			16,032			9,672			(15	)		14
Commercial Banking		2,552			2,661			2,686			3,007			3,025			(4	)		(16	)
Treasury & Securities Services		65			54			48			57			88			20			(26	)
Asset Management		267			257			250			261			269			4			(1	)
Corporate/Private Equity		32			30			27			28			16			7			100

Total	$	32,266		$	34,161		$	35,836		$	38,186		$	31,602			(6	)		2


(a)		Effective January 1, 2010, the Firm adopted new accounting guidance related to 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 fourth quarter and full year 2009 predominantly included a reclassification related to the issuance and retention of securities from the Chase Issuance Trust.

Page 35

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


	QUARTERLY TRENDS
																4Q10
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09
ALLOWANCE COMPONENTS AND RATIOS
ALLOWANCE FOR LOAN LOSSES
Wholesale
Asset specific (a)	$	1,574		$	1,246		$	1,324		$	1,557		$	2,046			26	%		(23	)%
Formula — based		3,187			3,717			3,824			4,385			5,099			(14	)		(37	)

Total wholesale		4,761			4,963			5,148			5,942			7,145			(4	)		(33	)

Consumer
Asset specific (b)		1,138			1,153			1,161			1,010			996			(1	)		14
Formula — based (a)(c)(d)		21,426			25,234			26,716			28,423			21,880			(15	)		(2	)
Purchased credit-impaired (d)		4,941			2,811			2,811			2,811			1,581			76			213

Total consumer		27,505			29,198			30,688			32,244			24,457			(6	)		12

Total allowance for loan losses		32,266			34,161			35,836			38,186			31,602			(6	)		2
Allowance for lending-related commitments		717			873			912			940			939			(18	)		(24	)

Total allowance for credit losses	$	32,983		$	35,034		$	36,748		$	39,126		$	32,541			(6	)		1


Wholesale allowance to total wholesale retained loans		2.14	%		2.28	%		2.42	%		2.83	%		3.57	%
Consumer allowance to total consumer retained loans		5.94			6.22			6.36			6.49			5.73
Allowance to total retained loans		4.71			4.97			5.15			5.40			5.04
Consumer allowance to consumer retained nonperforming loans (e)		311			296			292			298			229
Consumer allowance to consumer retained nonperforming loans excluding credit card (e)		186			164			154			150			139

CREDIT RATIOS excluding purchased credit-impaired loans (f)
Consumer allowance to total consumer retained loans (f)(g)		5.78			6.69			6.88			7.05			6.63
Allowance to retained loans (f)(g)		4.46			5.12			5.34			5.64			5.51
Consumer allowance to consumer retained nonperforming loans (e)(f)(g)		255			268			265			272			215
Consumer allowance to consumer retained nonperforming loans excluding credit card (e)(f)		131			135			127			124			124
Allowance to total retained nonperforming loans (f)(g)		190			208			209			212			174


(a)		Effective January 1, 2010, the Firm adopted new accounting guidance related to 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 $985 million, $980 million, $946 million, $754 million and $754 million at December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 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.

(g)		Excludes loans held by the WMMT, 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. The balance of these loans held by the WMMT was zero at December 31, 2010, September 30, 2010, June 30, 2010 and March 31, 2010.

Page 36

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


	QUARTERLY TRENDS																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
PROVISION FOR CREDIT LOSSES
LOANS
Investment Bank (a)	$	(140	)	$	(158	)	$	(418	)	$	(477	)	$	(265	)		11	%		47	%	$	(1,193	)	$	2,154		NM		%
Commercial Banking		184			192			(143	)		204			445			(4	)		(59	)		437			1,314			(67	)
Treasury & Securities Services		11			6			(8	)		(31	)		73			83			(85	)		(22	)		34		NM
Asset Management		22			23			15			31			53			(4	)		(58	)		91			183			(50	)
Corporate/Private Equity		—			(1	)		(1	)		16			(2	)	NM			NM				14			(1	)	NM

Total wholesale		77			62			(555	)		(257	)		304			24			(75	)		(673	)		3,684		NM

Retail Financial Services (a)		2,457			1,551			1,715			3,735			4,228			58			(42	)		9,458			15,950			(41	)
Card Services — reported (a)		671			1,633			2,221			3,512			2,622			(59	)		(74	)		8,037			12,019			(33	)
Corporate/Private Equity		2			(2	)		(1	)		1			12		NM				(83	)		—			82		NM

Total consumer		3,130			3,182			3,935			7,248			6,862			(2	)		(54	)		17,495			28,051			(38	)

Total provision for loan losses	$	3,207		$	3,244		$	3,380		$	6,991		$	7,166			(1	)		(55	)	$	16,822		$	31,735			(47	)


LENDING-RELATED COMMITMENTS
Investment Bank (a)	$	(131	)	$	16		$	93		$	15		$	84		NM			NM			$	(7	)	$	125		NM
Commercial Banking		(32	)		(26	)		(92	)		10			49			(23	)	NM				(140	)		140		NM
Treasury & Securities Services		(1	)		(8	)		(8	)		(8	)		(20	)		88			95			(25	)		21		NM
Asset Management		1			—			(10	)		4			5		NM				(80	)		(5	)		5		NM
Corporate/Private Equity		—			—			—			—			(1	)		—		NM				—			(1	)	NM

Total wholesale		(163	)		(18	)		(17	)		21			117		NM			NM				(177	)		290		NM

Retail Financial Services		(1	)		(3	)		—			(2	)		1			67		NM				(6	)		(10	)		40
Card Services — reported		—			—			—			—			—			—			—			—			—			—
Corporate/Private Equity		—			—			—			—			—			—			—			—			—			—

Total consumer		(1	)		(3	)		—			(2	)		1			67		NM				(6	)		(10	)		40

Total provision for lending-related commitments	$	(164	)	$	(21	)	$	(17	)	$	19		$	118		NM			NM			$	(183	)	$	280		NM


TOTAL PROVISION FOR CREDIT LOSSES
Investment Bank (a)	$	(271	)	$	(142	)	$	(325	)	$	(462	)	$	(181	)		(91	)		(50	)	$	(1,200	)	$	2,279		NM
Commercial Banking		152			166			(235	)		214			494			(8	)		(69	)		297			1,454			(80	)
Treasury & Securities Services		10			(2	)		(16	)		(39	)		53		NM				(81	)		(47	)		55		NM
Asset Management		23			23			5			35			58			—			(60	)		86			188			(54	)
Corporate/Private Equity		—			(1	)		(1	)		16			(3	)	NM			NM				14			(2	)	NM

Total wholesale		(86	)		44			(572	)		(236	)		421		NM			NM				(850	)		3,974		NM

Retail Financial Services (a)		2,456			1,548			1,715			3,733			4,229			59			(42	)		9,452			15,940			(41	)
Card Services — reported (a)		671			1,633			2,221			3,512			2,622			(59	)		(74	)		8,037			12,019			(33	)
Corporate/Private Equity		2			(2	)		(1	)		1			12		NM				(83	)		—			82		NM

Total consumer		3,129			3,179			3,935			7,246			6,863			(2	)		(54	)		17,489			28,041			(38	)

Total provision for credit losses		3,043			3,223			3,363			7,010			7,284			(6	)		(58	)		16,639			32,015			(48	)


Credit card loans — securitized (a)	NA			NA			NA			NA				1,617		NM			NM			NA				6,443		NM

Managed provision for credit losses (a)	$	3,043		$	3,223		$	3,363		$	7,010		$	8,901			(6	)		(66	)	$	16,639		$	38,458			(57	)


(a)		Effective January 1, 2010, the Firm adopted new accounting guidance related to 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.

NA: Not applicable.

Page 37

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


	QUARTERLY TRENDS																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
AVERAGE IB TRADING VAR, CREDIT PORTFOLIO
VAR AND OTHER VAR - 95% CONFIDENCE LEVEL
IB VaR by risk type:
Fixed income	$	53		$	72		$	64		$	69		$	121			(26	)%		(56	)%	$	65		$	160			(59	)%
Foreign exchange		10			9			10			13			14			11			(29	)		11			18			(39	)
Equities		23			21			20			24			21			10			10			22			47			(53	)
Commodities and other		14			13			20			15			17			8			(18	)		16			20			(20	)
Diversification benefit to IB trading VaR (a)		(38	)		(38	)		(42	)		(49	)		(62	)		—			39			(43	)		(91	)		53

IB Trading VaR (b)		62			77			72			72			111			(19	)		(44	)		71			154			(54	)

Credit portfolio VaR (c)		26			30			27			19			24			(13	)		8			26			52			(50	)
Diversification benefit to IB trading and credit portfolio VaR (a)		(10	)		(8	)		(9	)		(9	)		(11	)		(25	)		9			(10	)		(42	)		76

Total IB trading and credit portfolio VaR		78			99			90			82			124			(21	)		(37	)		87			164			(47	)


Mortgage Banking VaR (d)		17			24			24			25			29			(29	)		(41	)		23			57			(60	)
Chief Investment Office (CIO) VaR (e)		49			53			72			70			78			(8	)		(37	)		61			103			(41	)
Diversification benefit to total other VaR (a)		(10	)		(15	)		(14	)		(13	)		(19	)		33			47			(13	)		(36	)		64

Total other VaR		56			62			82			82			88			(10	)		(36	)		71			124			(43	)


Diversification benefit to total IB and other VaR (a)		(39	)		(52	)		(79	)		(66	)		(67	)		25			42			(59	)		(82	)		28

Total IB and other VaR (f)	$	95		$	109		$	93		$	98		$	145			(13	)		(34	)	$	99		$	206			(52	)


(a)		Average value-at-risk (“VaR”) was less than the sum of the VaR of the components described above, which is due to portfolio diversification. The diversification effect reflects 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, for example, 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. IB Trading VaR includes the estimated credit spread sensitivity of certain mortgage products.

(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, which is not MTM.

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

(e)		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 38

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


																December 31, 2010
																Change						FULL YEAR
	Dec 31			Sep 30			Jun 30			Mar 31			Dec 31			Sep 30			Dec 31							2010 Change
	2010			2010			2010			2010			2009			2010			2009			2010		2009		2009
CAPITAL RATIOS
Tier 1 capital	$	142,845		$	139,381		$	137,077		$	131,350		$	132,971		2		%	7		%
Total capital		182,629			180,740			178,293			173,332			177,073		1			3
Tier 1 common capital (a)		115,159			110,842			108,175			103,908			105,284		4			9
Risk-weighted assets		1,176,329			1,170,158			1,131,030			1,147,008			1,198,006		1			(2		)
Adjusted average assets (b)		2,025,464			1,975,479			1,983,839			1,981,060			1,933,767		3			5
Tier 1 capital ratio		12.1	%		11.9	%		12.1	%		11.5	%		11.1	%
Total capital ratio		15.5			15.4			15.8			15.1			14.8
Tier 1 common capital ratio (a)		9.8			9.5			9.6			9.1			8.8
Tier 1 leverage ratio		7.1			7.1			6.9			6.6			6.9

TANGIBLE COMMON EQUITY (PERIOD-END) (c)
Common stockholders’ equity	$	168,306		$	166,030		$	162,968		$	156,569		$	157,213			1			7
Less: Goodwill		48,854			48,736			48,320			48,359			48,357			—			1
Less: Other intangible assets		4,039			3,982			4,178			4,383			4,621			1			(13	)
Add: Deferred tax liabilities (d)		2,934			2,656			2,584			2,544			2,538			10			16

Total tangible common equity	$	118,347		$	115,968		$	113,054		$	106,371		$	106,773			2			11


TANGIBLE COMMON EQUITY (AVERAGE) (c)
Common stockholders’ equity	$	166,812		$	163,962		$	159,069		$	156,094		$	156,525			2			7		$	161,520	$	145,903		11	%
Less: Goodwill		48,831			48,745			48,348			48,542			48,341			—			1			48,618		48,254		1
Less: Other intangible assets		4,054			4,094			4,265			4,307			4,741			(1	)		(14	)		4,178		5,095		(18	)
Add: Deferred tax liabilities (d)		2,795			2,620			2,564			2,541			2,533			7			10			2,631		2,547		3

Total tangible common equity	$	116,722		$	113,743		$	109,020		$	105,786		$	105,976			3			10		$	111,355	$	95,101		17


INTANGIBLE ASSETS (PERIOD-END)
Goodwill	$	48,854		$	48,736		$	48,320		$	48,359		$	48,357			—			1
Mortgage servicing rights		13,649			10,305			11,853			15,531			15,531			32			(12	)
Purchased credit card relationships		897			974			1,051			1,153			1,246			(8	)		(28	)
All other intangibles		3,142			3,008			3,127			3,230			3,375			4			(7	)

Total intangibles	$	66,542		$	63,023		$	64,351		$	68,273		$	68,509			6			(3	)


DEPOSITS (PERIOD-END)
U.S. offices:
Noninterest-bearing	$	242,260		$	219,302		$	208,064		$	210,982		$	204,003			10			19
Interest-bearing		441,532			435,405			433,764			436,914			439,104			1			1
Non-U.S. offices:
Noninterest-bearing		10,917			10,646			9,094			10,062			8,082			3			35
Interest-bearing		235,660			237,785			236,883			267,345			287,178			(1	)		(18	)

Total deposits	$	930,369		$	903,138		$	887,805		$	925,303		$	938,367			3			(1	)


(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)		Adjusted average assets, for purposes of calculating the leverage ratio, include total quarterly average assets adjusted for unrealized gains/(losses)on securities, less deductions for disallowed goodwill and other intangible assets, investments in certain subsidiaries, and the total adjusted carrying value of nonfinancial equity investments that are subject to deductions from Tier 1 capital.

(c)		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.

(d)		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.

(e)		Estimated.

Page 39

JPMORGAN CHASE & CO.
MORTGAGE LOAN REPURCHASE LIABILITY
(in millions)


	QUARTERLY TRENDS
																4Q10
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10		4Q09
REPURCHASE LIABILITY (a)
Summary of changes in repurchase liability:
Repurchase liability at beginning of period	$	3,307		$	2,332		$	1,982		$	1,705		$	1,102		42	%	200	%
Realized losses (b)		(371	)		(489	)		(317	)		(246	)		(142	)	24		(161	)
Provision for repurchase losses		349			1,464			667			523			745		(76	)	(53	)

Repurchase liability at end of period	$	3,285		$	3,307		$	2,332		$	1,982		$	1,705		(1	)	93


Outstanding repurchase demands and mortgage insurance rescission notices by counterparty type: (c)
GSEs and other	$	1,071		$	1,063		$	1,331		$	1,358		$	1,339		1		(20	)
Mortgage insurers		624			556			998			1,090			865		12		(28	)
Overlapping population (d)		(63	)		(69	)		(220	)		(232	)		(169	)	9		63

Total	$	1,632		$	1,550		$	2,109		$	2,216		$	2,035		5		(20	)


Quarterly repurchase demands received
by loan origination vintage: (c)
Pre-2005	$	38		$	31		$	35		$	16		$	12		23		217
2005		72			67			94			50			40		7		80
2006		195			185			234			189			166		5		17
2007		537			498			521			403			425		8		26
2008		254			191			186			98			157		33		62
Post-2008		65			46			53			20			26		41		150

Total	$	1,161		$	1,018		$	1,123		$	776		$	826		14		41


(a)		For further details regarding the Firm’s repurchase liability, see pages 58-61 of JPMorgan Chase’s September 30, 2010, Form 10-Q.

(b)		Includes principal losses and accrued interest on repurchased loans, “make-whole” settlements, settlements with claimants, and certain related expenses. Make-whole settlements were $152 million, $225 million, $150 million, $105 million and $68 million for the quarters ended December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively.

(c)		Excludes amounts related to Washington Mutual.

(d)		Because the GSEs may make repurchase demands based on mortgage insurance rescission notices that remain unresolved, certain loans may be subject to both an unresolved mortgage insurance rescission notice and an unresolved repurchase demand.

Page 40


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


	QUARTERLY TRENDS																					FULL YEAR
																4Q10												2010 Change
	4Q10			3Q10			2Q10			1Q10			4Q09			3Q10			4Q09			2010			2009			2009
EARNINGS PER SHARE DATA
Basic earnings per share:
Income before extraordinary gain	$	4,831		$	4,418		$	4,795		$	3,326		$	3,278			9	%		47	%	$	17,370		$	11,652			49	%
Extraordinary gain		—			—			—			—			—			—			—			—			76		NM

Net income		4,831			4,418			4,795			3,326			3,278			9			47			17,370			11,728			48
Less: Preferred stock dividends		157			160			163			162			162			(2	)		(3	)		642			1,327			(52	)
Less: Accelerated amortization from redemption of preferred stock issued to the U.S. Treasury (a)		—			—			—			—			—			—			—			—			1,112		NM

Net income applicable to common equity (a)		4,674			4,258			4,632			3,164			3,116			10			50			16,728			9,289			80
Less: Dividends and undistributed earnings allocated to participating securities		262			239			269			190			164			10			60			964			515			87

Net income applicable to common stockholders	$	4,412		$	4,019		$	4,363		$	2,974		$	2,952			10			49		$	15,764		$	8,774			80


Total weighted-average basic shares outstanding (b)		3,917.0			3,954.3			3,983.5			3,970.5			3,946.1			(1	)		(1	)		3,956.3			3,862.8			2

Income before extraordinary gain per share (a)	$	1.13		$	1.02		$	1.10		$	0.75		$	0.75			11			51		$	3.98		$	2.25			77
Extraordinary gain per share		—			—			—			—			—			—			—			—			0.02		NM

Net income per share (a)	$	1.13		$	1.02		$	1.10		$	0.75		$	0.75			11			51		$	3.98		$	2.27			75


Diluted earnings per share:
Net income applicable to common stockholders	$	4,412		$	4,019		$	4,363		$	2,974		$	2,952			10			49		$	15,764		$	8,774			80

Total weighted-average basic shares outstanding (b)		3,917.0			3,954.3			3,983.5			3,970.5			3,946.1			(1	)		(1	)		3,956.3			3,862.8			2
Add: Employee stock options and SARs (c)		18.2			17.6			22.1			24.2			28.0			3			(35	)		20.6			16.9			22

Total weighted-average diluted shares outstanding (d)		3,935.2			3,971.9			4,005.6			3,994.7			3,974.1			(1	)		(1	)		3,976.9			3,879.7			3

Income before extraordinary gain per share (a)	$	1.12		$	1.01		$	1.09		$	0.74		$	0.74			11			51		$	3.96		$	2.24			77
Extraordinary gain per share		—			—			—			—			—			—			—			—			0.02		NM

Net income per share (a)	$	1.12		$	1.01		$	1.09		$	0.74		$	0.74			11			51		$	3.96		$	2.26			75


COMMON SHARES OUTSTANDING
Common shares — at period end		3,910.3			3,925.8			3,975.8			3,975.4			3,942.0			—			(1	)		3,910.3			3,942.0			(1	)
Cash dividends declared per share	$	0.05		$	0.05		$	0.05		$	0.05		$	0.05			—			—		$	0.20		$	0.20			—
Book value per share		43.04			42.29			40.99			39.38			39.88			2			8			43.04			39.88			8
Dividend payout ratio		4	%		5	%		5	%		7	%		7	%								5	%		9	%

SHARE PRICE
High	$	43.12		$	41.70		$	48.20		$	46.05		$	47.47			3			(9	)	$	48.20		$	47.47			2
Low		36.21			35.16			36.51			37.03			40.04			3			(10	)		35.16			14.96			135
Close		42.42			38.06			36.61			44.75			41.67			11			2			42.42			41.67			2
Market capitalization		165,875			149,418			145,554			177,897			164,261			11			1			165,875			164,261			1

STOCK REPURCHASE PROGRAM
Aggregate repurchases	$	685.2		$	2,178.1		$	135.3		$	—		$	—			(69	)	NM			$	2,998.6		$	—		NM
Common shares repurchased		17.9			56.5			3.5			—			—			(68	)	NM				77.9			—		NM
Average purchase price	$	38.37		$	38.52		$	38.73		$	—		$	—			—		NM			$	38.49		$	—		NM


(a)		The calculation of basic and diluted earnings per share (“EPS”) and net income applicable to common equity for full year 2009 includes a one-time, noncash reduction of $1.1 billion, or $0.27 per share, resulting from repayment of U.S. Troubled Asset Relief Program (“TARP”) preferred capital.

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

(c)		Excluded from the computation of diluted EPS (due to the antidilutive effect) were options issued under employee benefit plans and the warrants originally issued in 2008 under the U.S. Treasury’s Capital Purchase Program to purchase shares of the Firm’s common stock aggregating 233 million, 236 million, 224 million, 239 million and 147 million, for the quarters ended December 31, 2010, September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, respectively, and 233 million and 266 million shares for the full years ended December 31, 2010 and 2009, respectively.

(d)		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.

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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 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 equivalent for periods beginning after January 1, 2010.

		As noted above, 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 had used this managed basis information 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 perpetual preferred stock, noncontrolling interests in subsidiaries and 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 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)		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 consolidated 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 (“AML 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. For additional information, see Note 2 on pages 143-148 of JPMorgan Chase’s 2009 Annual Report.

Beneficial interests 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, CS’ 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 loans. 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.

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 MTM value is positive, it indicates the counterparty owes JPMorgan Chase and, therefore, creates a credit risk for the Firm. When the MTM value is negative, JPMorgan Chase owes the counterparty; in this situation, the Firm has liquidity risk.

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

MSR risk management revenue: Includes 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.

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.

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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 IB 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 excluding loans held-for-sale and loans at fair value.

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

Unaudited: Financial statements and information that have not been subject 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 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. For additional information, see Note 2 on pages 143-148 of JPMorgan Chase’s 2009 Annual Report.

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JPMORGAN CHASE & CO. GLOSSARY OF TERMS

INVESTMENT BANK (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 revenue related to market-making across global fixed income markets, including foreign exchange, interest rate, credit and commodities markets.

Equities markets primarily include 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.

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:

Net 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 (“CNTs”) – 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.

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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.

5.		Other primarily includes lending and investment activity within the Community Development Banking and Chase Capital segments.

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.

4.		Other product revenue primarily includes tax-equivalent adjustments generated from Community Development Banking segment activity and certain income derived from principal transactions.

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 Treasury Services 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 AM on behalf of Private Banking, Institutional, and Retail 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 41% ownership interest at December 31, 2010.

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

Multi-asset – Any fund or account that allocates assets under management to more than one asset class (e.g., long-term fixed income, equity, cash, real assets, private equity or hedge funds).

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.

Private Banking offers investment advice and wealth management services to high- and ultra-high-net-worth individuals, families, money managers, business owners and small corporations worldwide, including investment management, capital markets and risk management, tax and estate planning, banking, capital raising and specialty-wealth advisory services.

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