2 q08erf supplement

EARNINGS RELEASE FINANCIAL SUPPLEMENT
SECOND QUARTER 2008

JPMORGAN CHASE & CO.
TABLE OF CONTENTS
Page

Consolidated Results
Consolidated Financial Highlights
Statements of Income
Consolidated Balance Sheets
Condensed Average Balance Sheets and Annualized Yields
Reconciliation from Reported to Managed Summary

2
3
4
5
6

Business Detail
Line of Business Financial Highlights - Managed Basis
Investment Bank
Retail Financial Services
Card Services - Managed Basis
Commercial Banking
Treasury & Securities Services
Asset Management
Corporate/Private Equity

7
8
11
16
19
21
23
26

Credit-Related Information

28

Supplemental Detail
Capital, Intangible Assets and Deposits

33

Glossary of Terms

34

Page 1

CONSOLIDATED FINANCIAL HIGHLIGHTS
(in millions, except per share, ratio and headcount data)
QUARTERLY TRENDS
2Q08
SELECTED INCOME STATEMENT DATA
Total net revenue
Provision for credit losses
Total noninterest expense
Net income

$

PER COMMON SHARE:
Net income per share - basic
Net income per share - diluted

1Q08

18,399
3,455
12,177
2,003

$

4Q07

16,890
4,424
8,931
2,373

$

YEAR-TO-DATE

3Q07

17,384
2,542
10,720
2,971

$

2Q08 Change
1Q08
2Q07

2Q07

16,112
1,785
9,327
3,373

$

18,908
1,529
11,028
4,234

2008

9 %
(22)
36
(16)

(3) %
126
10
(53)

$

2008 Change
2007

2007

35,289
7,879
21,108
4,376

$

37,876
2,537
21,656
9,021

(7) %
211
(3)
(51)

0.56
0.54

0.70
0.68

0.88
0.86

1.00
0.97

1.24
1.20

(20)
(21)

(55)
(55)

1.26
1.22

2.63
2.55

(52)
(52)

Cash dividends declared
Book value
Closing share price
Market capitalization

0.38
37.02
34.31
117,881

0.38
36.94
42.95
146,066

0.38
36.59
43.65
146,986

0.38
35.72
45.82
153,901

0.38
35.08
48.45
164,659

(20)
(19)

6
(29)
(28)

0.76
37.02
34.31
117,881

0.72
35.08
48.45
164,659

6
6
(29)
(28)

COMMON SHARES OUTSTANDING:
Weighted-average diluted shares outstanding
Common shares outstanding at period-end

3,531.0
3,435.7

3,494.7
3,400.8

3,471.8
3,367.4

3,477.7
3,358.8

3,521.6
3,398.5

1
1

1

3,512.9
3,435.7

3,540.5
3,398.5

(1)
1

FINANCIAL RATIOS: (a)
Net income:
ROE
ROE-GW (b)
ROA

6
10
0.48

%

8
12
0.61

CAPITAL RATIOS:
Tier 1 capital ratio
Total capital ratio

9.1
13.5

(d)
(d)

8.3
12.5

8.4
12.6

8.4
12.5

8.4
12.0

$ 1,775,670
229,359
308,670
722,905
127,176

$ 1,642,862
231,297
305,759
761,626
125,627

$ 1,562,147
213,076
306,298
740,728
123,221

$ 1,479,575
197,728
288,592
678,091
119,978

$ 1,458,042
181,968
283,069
651,370
119,211

195,594

182,166

180,667

179,847

179,664

SELECTED BALANCE SHEET DATA (Period-end)
Total assets
Wholesale loans
Consumer loans
Deposits
Common stockholders' equity
Headcount
LINE OF BUSINESS NET INCOME
Investment Bank
Card Services
Commercial Banking
Asset Management
Corporate/Private Equity (c)
Net income

$

$

394
606
250
355
425
395
(422)
2,003

$

$

(87)
(227)
609
292
403
356
1,027
2,373

%

10
15
0.77

$

$

124
752
609
288
422
527
249
2,971

%

11
18
0.91

$

$

296
639
786
258
360
521
513
3,373

%

14
23
1.19

$

$

1,179
785
759
284
352
493
382
4,234

%

7
11
0.54

%

16
25
1.29

%

8
(1)
1
(5)
1

22
26
9
11
7

$ 1,775,670
229,359
308,670
722,905
127,176

$ 1,458,042
181,968
283,069
651,370
119,211

22
26
9
11
7

7

9

195,594

179,664

9

NM
NM
(59)
22
5
11
NM
(16)

(67)
(23)
(67)
25
21
(20)
NM
(53)

$

$

307
379
859
647
828
751
605
4,376

$

$

2,719
1,644
1,524
588
615
918
1,013
9,021

(89)
(77)
(44)
10
35
(18)
(40)
(51)

(a) Ratios are based upon annualized amounts.
(b) Net income applicable to common stock divided by total average common equity (net of goodwill). The Firm uses return on equity less goodwill, a non-GAAP financial measure, to evaluate the operating
performance of the Firm. The Firm also utilizes this measure to facilitate comparisons to competitors.
(c) Included the after-tax impact of material litigation actions, equity earnings related to Bear Stearns and merger costs. See Corporate/Private Equity Financial Highlights for additional details.
(d) Estimated.

Page 2

STATEMENTS OF INCOME
(in millions, except per share and ratio data)
QUARTERLY TRENDS
2Q08
REVENUE
Investment banking fees
Principal transactions
Lending & deposit-related fees
Asset management, administration and commissions
Securities gains (losses)
Mortgage fees and related income
Credit card income
Other income
Noninterest revenue

$

Interest income
Interest expense
Net interest income

1Q08

1,612
752
1,105
3,628
647
696
1,803
(138)
10,105

$

4Q07

1,216
(803)
1,039
3,596
33
525
1,796
1,829
9,231

$

YEAR-TO-DATE

3Q07

1,662
165
1,066
3,896
148
898
1,857
469
10,161

$

2Q08 Change
1Q08
2Q07

2Q07

1,336
650
1,026
3,663
237
221
1,777
289
9,199

$

1,898
3,713
951
3,611
(223)
523
1,714
553
12,740

33
NM
6
1
NM
33
NM
9

%

2008

(15) %
(80)
16
NM
33
5
NM
(21)

$

2008 Change
2007

2007

2,828
(51)
2,144
7,224
680
1,221
3,599
1,691
19,336

$

3,637
8,200
1,846
6,797
(221)
999
3,277
1,071
25,606

(22) %
NM
16
6
NM
22
10
58
(24)

16,529
8,235
8,294

17,532
9,873
7,659

18,619
11,396
7,223

18,806
11,893
6,913

17,342
11,174
6,168

(6)
(17)
8

(5)
(26)
34

34,061
18,108
15,953

33,962
21,692
12,270

(17)
30

TOTAL NET REVENUE

18,399

16,890

17,384

16,112

18,908

9

(3)

35,289

37,876

(7)


3,455

4,424

2,542

1,785

1,529

(22)

126

7,879

2,537

211

6,913
669
1,028
1,450
413
1,233
316
155
12,177

4,951
648
968
1,333
546
169
316
8,931

5,469
659
986
1,421
570
1,254
339
22
10,720

4,677
657
950
1,260
561
812
349
61
9,327

6,309
652
921
1,259
457
1,013
353
64
11,028

40
3
6
9
(24)
NM
NM
36

10
3
12
15
(10)
22
(10)
142
10

11,864
1,317
1,996
2,783
959
1,402
632
155
21,108

12,543
1,292
1,843
2,459
939
1,748
706
126
21,656

(5)
2
8
13
2
(20)
(10)
23
(3)

6,351
2,117
4,234

(22)
(34)
(16)

(56)
(64)
(53)

13,683
4,662
9,021

(54)
(59)
(51)

1.20

(21)

(55)

2.55

(52)

NONINTEREST EXPENSE
Compensation expense
Occupancy expense
Technology, communications and equipment expense
Professional & outside services
Marketing
Other expense
Amortization of intangibles
Merger costs
TOTAL NONINTEREST EXPENSE
Income before income tax expense
Income tax expense
NET INCOME

$

2,767
764
2,003

DILUTED EARNINGES PER SHARE

0.54

FINANCIAL RATIOS
Net income:
ROE
ROE-GW
ROA
Effective income tax rate
Overhead ratio

6
10
0.48
28
66

$

EXCLUDING IMPACT OF MERGER COSTS (a)
Net income
Less merger costs (after-tax)
Net income excluding merger costs
Diluted Per Share:
Net income
Less merger costs (after-tax)
Net income excluding merger costs

$
$

$
$

3,535
1,162
2,373

$

0.68

%

8
12
0.61
33
53

2,003
96
2,099

$

0.54
0.03
0.57

$

$

$

4,122
1,151
2,971

$

0.86

%

10
15
0.77
28
62

2,373
2,373

$

0.68
0.68

$

$

$

5,000
1,627
3,373

$

0.97

%

11
18
0.91
33
58

2,971
14
2,985

$

0.86
0.86

$

$

$

%

14
23
1.19
33
58

3,373
38
3,411

$

0.97
0.01
0.98

$

$

$

$

6,302
1,926
4,376

$

1.22

%

7
11
0.54
31
60

4,234
40
4,274

(16)
NM
(12)

(53)
140
(51)

$

1.20
0.01
1.21

(21)
NM
(16)

(55)
200
(53)

$

$

$

%

16
25
1.29
34
57

4,376
96
4,472

$

1.22
0.03
1.25

$

$

$

%

9,021
78
9,099

(51)
23
(51)

2.55
0.02
2.57

(52)
50
(51)

(a) Net income excluding merger costs, a non-GAAP financial measure, is used by the Firm to facilitate comparison of results against the Firm's ongoing operations and with other companies' U.S. GAAP financial statements.

Page 3

CONSOLIDATED BALANCE SHEETS
(in millions)
Jun 30, 2008
Change
Jun 30
2008
ASSETS
Cash and due from banks
Deposits with banks
Federal funds sold and securities purchased under resale agreements
Securities borrowed
Trading assets:
Debt and equity instruments
Derivative receivables
Securities
Loans (net of allowance for loan losses)
Accrued interest and accounts receivable (a)
Premises and equipment
Goodwill
Other intangible assets:
Mortgage servicing rights
Purchased credit card relationships
All other intangibles
Other assets
TOTAL ASSETS
LIABILITIES
Deposits
Federal funds purchased and securities sold under repurchase agreements
Commercial paper
Other borrowed funds
Trading liabilities:
Debt and equity instruments
Derivative payables
Accounts payable, accrued expenses and other liabilities
(including the allowance for lending-related commitments) (b)
Beneficial interests issued by consolidated VIEs
Long-term debt
Junior subordinated deferrable interest debentures held by trusts that issued
guaranteed capital debt securities
TOTAL LIABILITIES
STOCKHOLDERS' EQUITY
Preferred stock
Common stock
Capital surplus
Retained earnings
Accumulated other comprehensive income (loss)
Shares held in RSU trust
Treasury stock, at cost
TOTAL STOCKHOLDERS' EQUITY
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

32,255
17,150
176,287
142,854

Mar 31
2008
$

46,888
12,414
203,176
81,014

Dec 31
2007
$

40,144
11,466
170,897
84,184

Sep 30
2007
$

32,766
26,714
135,589
84,697

Jun 30
2007
$

35,449
41,736
125,930
88,360

409,608
122,389
119,173
524,783
64,294
11,843
45,993

$

$

386,170
99,110
101,647
525,310
50,989
9,457
45,695

414,273
77,136
85,450
510,140
24,823
9,319
45,270

389,119
64,592
97,706
478,207
26,401
8,892
45,335

391,508
59,038
95,984
457,404
26,716
9,044
45,254

11,617
1,984
3,675
91,765
1,775,670

8,419
2,140
3,815
66,618
1,642,862

8,632
2,303
3,796
74,314
1,562,147

9,114
2,427
3,959
74,057
1,479,575

722,905
194,724
50,151
22,594

$

$

761,626
192,633
50,602
28,430

$

$

740,728
154,398
49,596
28,835

$

$

678,091
178,767
33,978
31,154

$

$

Mar 31
2008

Jun 30
2007
(31) %
38
(13)
76

(9) %
(59)
40
62

6
23
17
26
25
1

5
107
24
15
141
31
2

9,499
2,591
4,103
65,426
1,458,042

38
(7)
(4)
38
8

22
(23)
(10)
40
22

651,370
205,961
25,116
29,263

(5)
1
(1)
(21)

11
(5)
100
(23)
(7)
56

87,841
95,749

89,162
68,705

80,748
68,426

93,969
61,396

11
21

171,004
20,071
260,192

106,088
14,524
189,995

94,476
14,016
183,862

86,524
13,283
173,696

84,785
14,808
159,493

61
38
37

102
36
63

17,263
1,642,494

$

78,982
78,983

15,372
1,517,235

15,148
1,438,926

14,930
1,359,597

12,670
1,338,831

12
8

36
23

6,000
3,658
78,870
56,313
(1,566)
(269)
(9,830)
133,176
1,775,670

3,658
78,072
55,762
(512)
(11,353)
125,627
1,642,862

3,658
78,597
54,715
(917)
(12,832)
123,221
1,562,147

3,658
78,295
53,064
(1,830)
(13,209)
119,978
1,479,575

3,658
78,020
51,011
(2,080)
(11,398)
119,211
1,458,042

NM
1
1
(206)
NM
13
6
8

NM
1
10
25
NM
14
12
22

$

$

$

$

(a) Includes margin loans; receivables from brokers, dealers and clearing organizations; and securities fails.
(b) Includes brokerage customer payables; payables to brokers, dealers and clearing organizations; and securities fails.

Page 4

CONDENSED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS
(in millions, except rates)
QUARTERLY TRENDS
2Q08
AVERAGE BALANCES
ASSETS
Deposits with banks
Federal funds sold and securities purchased
under resale agreements
Securities borrowed
Trading assets - debt instruments
Securities
Loans
Other assets (a)
Total interest-earning assets
Trading assets - equity instruments
Goodwill
Other intangible assets:
Mortgage servicing rights
All other intangible assets
All other noninterest-earning assets
TOTAL ASSETS
LIABILITIES
Interest-bearing deposits
Federal funds purchased and securities sold
under repurchase agreements
Commercial paper
Other borrowings (b)
Other liabilities (c)
Long-term debt
Total interest-bearing liabilities
Noninterest-bearing liabilities
TOTAL LIABILITIES
TOTAL STOCKHOLDERS' EQUITY
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
AVERAGE RATES
INTEREST-EARNING ASSETS
Deposits with banks
Federal funds sold and securities purchased
under resale agreements
Securities borrowed
Trading assets - debt instruments
Securities
Loans
Other assets (a)
Total interest-earning assets
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
Federal funds purchased and securities sold
under repurchase agreements
Commercial paper
Other borrowings (b)
Other liabilities (c)
Long-term debt
Total interest-bearing liabilities
INTEREST RATE SPREAD
NET YIELD ON INTEREST-EARNING ASSETS
NET YIELD ON INTEREST-EARNING ASSETS
ADJUSTED FOR SECURITIZATIONS

$

1Q08

38,813

$

4Q07

31,975

$

YEAR-TO-DATE

3Q07

41,363

$

2Q08 Change
1Q08
2Q07

2Q07

39,906

$

18,153

21

2008

17,193

106

155,664
100,322
302,053
109,834
537,964
15,629
1,260,279
99,525
45,781

153,864
83,490
322,986
89,757
526,598
1,208,670
78,810
45,699

140,622
86,649
308,175
93,236
508,172
1,178,217
93,453
45,321

133,780
87,955
310,445
95,694
476,912
1,144,692
86,177
45,276

132,768
90,810
294,931
96,921
465,763
1,099,346
85,830
45,181

1
20
(6)
22
2
NM
4
26
-

17
10
2
13
16
NM
15
16
1

154,764
91,906
312,519
99,796
532,281
7,815
1,234,475
89,168
45,740

134,127
84,822
276,109
96,128
466,604
1,074,983
87,302
45,153

15
8
13
4
14
NM
15
2
1

$

9,947
5,823
247,344
1,668,699

$

8,273
6,202
222,143
1,569,797

$

8,795
6,220
198,031
1,530,037

$

9,290
6,532
185,367
1,477,334

$

8,371
6,854
186,404
1,431,986

20
(6)
11
6

19
(15)
33
17

$

9,110
6,012
234,743
1,619,248

$

8,079
6,996
183,084
1,405,597

13
(14)
28
15

$

612,305

$

600,132

$

587,297

$

540,937

$

513,451

2

19

$

606,218

$

506,125

203,348
47,323
92,309
19,168
17,990
229,336
1,221,779
315,965
1,537,744
130,955
$

179,897
47,584
107,552
14,082
200,354
1,149,601
295,616
1,445,217
124,580

1,668,699

3.87

$

%

171,450
48,821
99,259
14,183
191,797
1,112,807
295,670
1,408,477
121,560

1,569,797

4.22

$

%

206,174
26,511
104,995
14,454
177,851
1,070,922
287,436
1,358,358
118,976

1,530,037

4.95

$

%

209,323
25,282
100,715
13,641
162,465
1,024,877
289,058
1,313,935
118,051

1,477,334

5.06

$

%

13
(1)
(14)
NM
28
14
6
7
6
5

1,431,986

4.56

6

%

%

114

%

$

2008 Change
2007

2007

(3)
87
(8)
NM
32
41
19
9
17
11
17

35,394

$

191,622
47,453
99,931
9,584
16,036
214,846
1,185,690
305,790
1,491,480
127,768
$

1,619,248

4.03

20

204,316
23,819
98,202
14,811
155,345
1,002,618
285,826
1,288,444
117,153
$

%

(6)
99
2
NM
8
38
18
7
16
9

1,405,597

15

4.61

3.84
2.29
5.59
5.27
6.36
3.97
5.34

3.80
3.56
5.75
5.47
7.10
5.88

4.41
4.77
5.84
5.58
7.60
6.30

4.83
5.60
6.09
5.69
7.80
6.55

4.99
5.31
5.65
5.68
7.65
6.37

3.82
2.87
5.67
5.36
6.72
3.97
5.60

2.36

3.09

3.84

4.13

4.17

2.72

4.12

2.73
2.17
4.28
1.32
2.24
3.27
2.71

3.31
3.41
5.03
3.78
3.82
3.45

4.35
4.40
5.02
4.36
3.90
4.06

5.18
4.68
4.90
4.52
3.99
4.41

5.19
4.92
4.69
3.22
3.77
4.37

3.00
2.79
4.68
1.32
2.92
3.52
3.07

5.14
4.91
4.87
3.54
3.81
4.36

2.63%
2.71%

2.43%
2.59%

2.24%
2.46%

2.14%
2.43%

2.00%
2.30%

2.53%
2.65%

2.05%
2.34%

3.06%

2.95%

2.80%

2.75%

2.63%

3.00%

%

4.97
5.36
5.79
5.68
7.59
6.41

2.68%

(a) Predominantly margin loans.
(b) Includes securities sold but not yet purchased.
(c) Includes brokerage customer payables.

Page 5

%

RECONCILIATION FROM REPORTED TO MANAGED SUMMARY
(in millions)

The Firm prepares its Consolidated financial statements using accounting principles generally accepted in the United States of America ("U.S. GAAP"). That presentation, which is referred to as "reported basis," provides the reader with an
understanding of the Firm's results that can be tracked consistently from year to year and enables a comparison of the Firm's performance with other companies' U.S. GAAP financial statements.
In addition to analyzing the Firm's results on a reported basis, management reviews the Firm's and the lines' of business results on a "managed" basis, which is a non-GAAP financial measure. The Firm's definition of managed basis starts with
the reported U.S. GAAP results and includes certain reclassifications that assume credit card loans securitized by Card Services remain on the balance sheet and presents revenue on a fully taxable-equivalent ("FTE") basis. These adjustments
do not have any impact on net income as reported by the lines of business or by the Firm as a whole. The impact of these adjustments are summarized below. For additional information about managed basis, please refer to the Glossary of
Terms on page 34.
QUARTERLY TRENDS
2Q08
CREDIT CARD INCOME
Credit card income - reported
Impact of:
Credit card securitizations
Credit card income - managed
OTHER INCOME
Other income - reported
Impact of:
Tax-equivalent adjustments
Other income - managed
TOTAL NONINTEREST REVENUE
Total noninterest revenue - reported
Impact of:
Total noninterest revenue - managed
NET INTEREST INCOME
Net interest income - reported
Impact of:
Net interest income - managed
TOTAL NET REVENUE
Total net revenue - reported
Impact of:
Total net revenue - managed
PROVISION FOR CREDIT LOSSES
Provision for credit losses - reported
Impact of:
Provision for credit losses - managed
INCOME TAX EXPENSE
Income tax expense - reported
Impact of:
Income tax expense - managed

$

1,803

1Q08
$

$

(843)
960

$

$

(138)

$

$

247
109

$

10,105

1,796
(937)
859

4Q07
$

1,857

YEAR-TO-DATE

3Q07
$

1,777

2Q07
$

1,714

2Q08 Change
1Q08
2Q07
-

%

2008
5
(7)
4

%

2007

2008 Change
2007

$

3,599

$

3,277

10

$

(1,780)
1,819

$

(1,534)
1,743

(16)
4

$

(885)
972

$

(836)
941

$

(788)
926

10
12

1,829

$

469

$

289

$

553

NM

NM

$

1,691

$

1,071

58

$

203
2,032

$

182
651

$

192
481

$

199
752

22
(95)

24
(86)

$

450
2,141

$

309
1,380

46
55

$

9,231

$

10,161

$

9,199

$

12,740

9

(21)

$

19,336

$

25,606

(24)

$

(843)
247
9,509

$

(937)
203
8,497

$

(885)
182
9,458

$

(836)
192
8,555

$

(788)
199
12,151

10
22
12

(7)
24
(22)

$

(1,780)
450
18,006

$

(1,534)
309
24,381

(16)
46
(26)

$

8,294

$

7,659

$

7,223

$

6,913

$

6,168

8

34

$

15,953

$

12,270

30

$

1,673
202
10,169

$

1,618
124
9,401

$

1,504
90
8,817

$

1,414
95
8,422

$

1,378
122
7,668

3
63
8

21
66
33

$

3,291
326
19,570

$

2,717
192
15,179

21
70
29

$

18,399

$

16,890

$

17,384

$

16,112

$

18,908

9

(3)

$

35,289

$

37,876

(7)

$

830
449
19,678

$

681
327
17,898

$

619
272
18,275

$

578
287
16,977

$

590
321
19,819

22
37
10

41
40
(1)

$

1,511
776
37,576

$

1,183
501
39,560

28
55
(5)

$

3,455

$

4,424

$

2,542

$

1,785

$

1,529

(22)

126

$

7,879

$

2,537

211

$

830
4,285

$

681
5,105

$

619
3,161

$

578
2,363

$

590
2,119

22
(16)

41
102

$

1,511
9,390

$

1,183
3,720

28
152

$

764

$

1,162

$

1,151

$

1,627

$

2,117

(34)

(64)

$

1,926

$

4,662

(59)

$

449
1,213

$

327
1,489

$

272
1,423

$

287
1,914

$

321
2,438

37
(19)

40
(50)

$

776
2,702

$

501
5,163

55
(48)

Page 6

%

LINE OF BUSINESS FINANCIAL HIGHLIGHTS - MANAGED BASIS
(in millions, except ratio data)
QUARTERLY TRENDS
2Q08
TOTAL NET REVENUE (FTE)
Investment Bank
Card Services
Commercial Banking
Asset Management
TOTAL NET REVENUE
NET INCOME
Investment Bank
Card Services
Commercial Banking
Asset Management
Corporate/Private Equity (a)
TOTAL NET INCOME
AVERAGE EQUITY (b)
Investment Bank
Card Services
Commercial Banking
Asset Management
TOTAL AVERAGE EQUITY
RETURN ON EQUITY (b)
Investment Bank
Card Services
Commercial Banking
Asset Management

$

$

$

$

$

$

1Q08

5,470
5,015
3,775
1,106
2,019
2,064
229
19,678

$

$

394
606
250
355
425
395
(422)
2,003

$

$

23,319
17,000
14,100
7,000
3,500
5,066
60,970
130,955

7
14
7
20
49
31

4Q07

3,011
4,702
3,904
1,067
1,913
1,901
1,400
17,898

(87)
(227)
609
292
403
356
1,027
2,373

$

22,000
17,000
14,100
7,000
3,500
5,000
55,980
$ 124,580

%

(2) %
(5)
17
17
46
29

$

$

$

$

$

$

YEAR-TO-DATE

3Q07

3,172
4,815
3,971
1,084
1,930
2,389
914
18,275

$

$

124
752
609
288
422
527
249
2,971

$

$

21,000
16,000
14,100
6,700
3,000
4,000
56,760
121,560

2
19
17
17
56
52

$

$

%

2Q08 Change
1Q08
2Q07

2Q07

2,946
4,201
3,867
1,009
1,748
2,205
1,001
16,977

$

$

296
639
786
258
360
521
513
3,373

$

$

21,000
16,000
14,100
6,700
3,000
4,000
54,176
118,976

6
16
22
15
48
52

$

$

%

5,798
4,357
3,717
1,007
1,741
2,137
1,062
19,819

82 %
7
(3)
4
6
9
(84)
10

21,000
16,000
14,100
6,300
3,000
3,750
53,901
118,051

(6) %
15
2
10
16
(3)
(78)
(1)

NM
NM
(59)
22
5
11
NM
(16)

1,179
785
759
284
352
493
382
4,234

23
20
22
18
47
53

2008

(67)
(23)
(67)
25
21
(20)
NM
(53)

6
1
9
5

%

11
6
11
17
35
13
11

$

$

$

$

$

$

2008 Change
2007

2007

8,481
9,717
7,679
2,173
3,932
3,965
1,629
37,576

$

$

307
379
859
647
828
751
605
4,376

$

$

$

(30) %
15
4
8
20
(2)
(30)
(5)

2,719
1,644
1,524
588
615
918
1,013
9,021

$

22,659
17,000
14,100
7,000
3,500
5,033
58,476
127,768

3
4
12
19
48
30

12,052
8,463
7,397
2,010
3,267
4,041
2,330
39,560

(89)
(77)
(44)
10
35
(18)
(40)
(51)

21,000
16,000
14,100
6,300
3,000
3,750
53,003
117,153

%

26
21
22
19
41
49

8
6
11
17
34
10
9

%

(a) Included the after-tax impact of material litigation actions, equity earnings related to Bear Stearns and merger costs. See Corporate/Private Equity Financial Highlights for additional details.
(b) Each business segment is allocated capital by taking into consideration stand-alone peer comparisons, economic risk measures and regulatory capital requirements. The amount of capital assigned
to each business is referred to as equity.

Page 7

INVESTMENT BANK
FINANCIAL HIGHLIGHTS
QUARTERLY TRENDS
2Q08
INCOME STATEMENT
REVENUE
Investment banking fees
All other income
Noninterest revenue
Net interest income
TOTAL NET REVENUE (a)

$

Credit reimbursement from TSS (b)

REVENUE BY REGION
Americas
Europe/Middle East/Africa
Asia/Pacific
Total net revenue

$

1,206
(798)
102
744
(66)
1,188
1,823
3,011

$

3Q07

1,657
(623)
142
705
(166)
1,715
1,457
3,172

$

2Q07

1,330
(435)
118
712
(76)
1,649
1,297
2,946

$

1,900
2,325
93
643
122
5,083
715
5,798

$

618
30

200
30

227
31

1,241
1,312
2,553

1,561
1,450
3,011

1,178
1,200
2,378
372
76
296

368
(26)
394

7
0.19
87
57

$

$

$

$

44 %
NM
3
(5)
(242)
166
27
82

164
30

3,132
1,602
4,734

FINANCIAL RATIOS
ROE
ROA
Overhead ratio
Compensation expense as a % of total net revenue
REVENUE BY BUSINESS
Investment banking fees:
Advisory
Equity underwriting
Debt underwriting
Total investment banking fees
Fixed income markets
Equity markets
Credit portfolio
Total net revenue

1,735
838
105
709
(226)
3,161
2,309
5,470

4Q07

398
30

NONINTEREST EXPENSE
Noncompensation expense
Income (loss) before income tax expense
Income tax expense (benefit)
NET INCOME (LOSS)

1Q08

YEAR-TO-DATE
2Q08 Change
1Q08
2Q07

$

%

(130)
(43)
(87)

$

(2) %
(0.05)
85
41

370
542
823
1,735
2,347
1,079
309
5,470

$

3,165
1,512
793
5,470

$

$

$

(9)
(133)
124

2
0.07
95
49

483
359
364
1,206
466
976
363
3,011

$

536
1,641
834
3,011

$

$

$

$

%

6
0.17
81
40

646
544
467
1,657
615
578
322
3,172

$

1,128
1,334
710
3,172

$

$

$

2008

(9) %
(64)
13
10
NM
(38)
223
(6)

$

2008 Change
2007

2007

2,941
40
207
1,453
(292)
4,349
4,132
8,481

$

3,629
5,467
186
1,284
164
10,730
1,322
12,052

(19) %
(99)
11
13
NM
(59)
213
(30)

%

143
-

1,016
60

227
60

2,589
1,265
3,854

$

(36)
152
22
85

21
27
23

4,373
2,914
7,287

5,226
2,459
7,685

(16)
19
(5)

1,810
631
1,179

NM
40
NM

(80)
NM
(67)

4,200
1,481
2,719

(94)
NM
(89)

23
0.68
66
45

595
267
468
1,330
687
537
392
2,946

$

1,016
1,389
541
2,946

$

$

$

$

%

238
(69)
307

3
0.08
86
52

560
509
831
1,900
2,445
1,249
204
5,798

(23)
51
126
44
404
11
(15)
82

(34)
6
(1)
(9)
(4)
(14)
51
(6)

$

2,655
2,327
816
5,798

490
(8)
(5)
82

19
(35)
(3)
(6)

$

$

$

$

%

26
0.81
64
43

853
901
1,187
2,941
2,813
2,055
672
8,481

$

3,701
3,153
1,627
8,481

$

$

$

348
-

%

1,032
902
1,695
3,629
5,037
2,788
598
12,052

(17)
(30)
(19)
(44)
(26)
12
(30)

6,021
4,578
1,453
12,052

(39)
(31)
12
(30)

(a) Total net revenue included tax-equivalent adjustments, predominantly due to tax-exempt income from municipal bond investments and income tax credits related to affordable housing
investments, of $404 million, $289 million, $230 million, $255 million and $290 million for the quarters ended June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007
and June 30, 2007, respectively, and $693 million and $442 million for year-to-date 2008 and 2007, respectively.
(b) Treasury & Securities Services ("TSS") was charged a credit reimbursement related to certain exposures managed within the Investment Bank credit portfolio on behalf of clients
shared with TSS.

Page 8

INVESTMENT BANK
FINANCIAL HIGHLIGHTS, CONTINUED
(in millions, except headcount and ratio data)
QUARTERLY TRENDS
2Q08
SELECTED BALANCE SHEETS DATA (Average)
Total assets
Trading assets - debt and equity instruments
Trading assets - derivative receivables
Loans:
Loans retained (a)
Loans held-for-sale & loans at fair value
Total loans
Adjusted assets (b)
Equity

$

Net charge-off (recovery) rate (a) (d)
Allowance for loan losses to average loans (a) (d)
Allowance for loan losses to nonperforming loans (c)
Nonperforming loans to average loans

814,860
367,184
99,395

$

4Q07

755,828
369,456
90,234

$

3Q07

735,685
371,842
74,659

$

2Q07

710,665
372,212
63,017

$

696,230
359,387
58,520

8 %
(1)
10

2008
17
2
70

%

$

2008 Change
2007

2007

785,344
368,320
94,814

$

677,581
347,320
57,465

16
6
65

76,239
20,440
96,679
676,777
23,319

$

74,106
19,612
93,718
662,419
22,000

68,928
24,977
93,905
644,573
21,000

61,919
17,315
79,234
625,619
21,000

59,065
14,794
73,859
603,839
21,000

3
4
3
2
6

29
38
31
12
11

75,173
20,026
95,199
669,598
22,659

59,019
14,242
73,261
588,016
21,000

27
41
30
14
8

37,057

Headcount
CREDIT DATA AND QUALITY STATISTICS
Net charge-offs (recoveries)
Nonperforming assets:
Nonperforming loans (c)
Other nonperforming assets
Allowance for credit losses:
Allowance for loan losses
Allowance for lending-related commitments
Total allowance for credit losses

1Q08

YEAR-TO-DATE
2Q08 Change
1Q08
2Q07

25,780

25,543

25,691

25,356

44

46

37,057

25,356

46

NM

50

(8)

$

13

$

(9)

$

67

$

(16)

313
177

321
118

353
100

265
60

72
47

(2)
50

335
277

2,429
469
2,898

1,891
607
2,498

1,329
560
1,889

1,112
568
1,680

1,037
487
1,524

28
(23)
16

134
(4)
90

(0.04) %
3.19 (e)
843
0.32

0.07
2.55
683
0.34

%
(e)

(0.05) %
1.93
439
0.38

0.43
1.80
585
0.33

%

(0.11) %
1.76
2,206
0.10

$

5

(22)

NM

313
177

72
47

335
277

2,429
469
2,898

1,037
487
1,524

0.01
3.23
843
0.33

$

%
(e)

134
(4)
90

(0.08) %
1.76
2,206
0.10

(a) Loans retained included credit portfolio loans, leveraged leases and other accrual loans, and excluded loans at fair value.
(b) Adjusted assets, a non-GAAP financial measure, equals total assets minus (1) securities purchased under resale agreements and securities borrowed less securities sold, not yet purchased; (2) assets of variable interest entities ("VIEs")
consolidated under FIN 46R; (3) cash and securities segregated and on deposit for regulatory and other purposes; and (4) goodwill and intangibles. The amount of adjusted assets is presented to assist the reader in comparing the Investment
Bank's ("IB") asset and capital levels to other investment banks in the securities industry. Asset-to-equity leverage ratios are commonly used as one measure to assess a company’s capital adequacy. The IB believes an adjusted asset amount
that excludes the assets discussed above, which are considered to have a low risk profile, provides a more meaningful measure of balance sheet leverage in the securities industry.
(c) Nonperforming loans included loans held-for-sale and loans at fair value of $25 million, $44 million, $50 million, $75 million and $25 million at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007 and June 30, 2007,
respectively, which were excluded from the allowance coverage ratios. Nonperforming loans excluded distressed loans held-for-sale that were purchased as part of IB's proprietary activities.
(d) Loans held-for-sale & loans at fair value were excluded when calculating the allowance coverage ratio and net charge-off (recovery) rate.
(e) Excluding the impact of a loan originated in March, 2008 to Bear Stearns, the adjusted ratio would be 3.46%, 2.61% and 3.40% for the quarters ended June 30, 2008 and March 31, 2008, and the six months ended June 30, 2008, respectively.
The average balance of the loan extended to Bear Stearns was $6.0 billion, $1.7 billion and $3.8 billion for the quarters ended June 30, 2008 and March 31, 2008, and the six months ended June 30, 2008, respectively.

Page 9

%

INVESTMENT BANK
(in millions, except ratio and rankings data)
QUARTERLY TRENDS
2Q08
MARKET RISK - AVERAGE TRADING AND CREDIT PORTFOLIO VAR (a)
Trading activities:
Fixed income
$
Foreign exchange
Equities
Commodities and other
Diversification (b)
Total trading VAR (c)

148
26
30
31
(92)
143

Credit portfolio VAR (d)
Diversification (b)
Total trading and credit portfolio VAR

35
(36)
142

MARKET SHARES AND RANKINGS (e)
Global debt, equity and equity-related
Global syndicated loans
Global long-term debt (f)
Global equity and equity-related (g)
Global announced M&A (h)
U.S. debt, equity and equity-related
U.S. syndicated loans
U.S. long-term debt (f)
U.S. equity and equity-related (g)
U.S. announced M&A (h)

$

1Q08

$

$

120
35
31
28
(92)
122
30
(30)
122

June 30, 2008 YTD
Market
Share
Rankings
9%
#1
13%
#1
9%
#1
11%
#1
27%
#3
15%
#1
30%
#1
15%
#1
13%
#3
41%
#3

4Q07

$

$

103
31
63
29
(102)
124
26
(27)
123

YEAR-TO-DATE

3Q07

$

$

98
23
35
28
(72)
112
17
(22)
107

2Q07

$

$

2Q08 Change
1Q08
2Q07

74
20
51
40
(73)
112

23 %
(26)
(3)
11
17

12
(14)
110

17
(20)
16

100 %
30
(41)
(23)
(26)
28
192
(157)
29

2008

$

$

2007

134
30
31
29
(91)
133

60
19
46
37
(65)
97

33
(34)
132

12
(12)
97

2008 Change
2007

123 %
58
(33)
(22)
(40)
37
175
(183)
36

Full Year 2007
Market
Share
Rankings
8%
#2
13%
#1
7%
#3
9%
#2
27%
#4
10%
#2
24%
#1
10%
#2
11%
#5
28%
#3

(a) Results for second quarter 2008 include one month of the combined Firm's results and two months of heritage JPMorgan Chase results. All prior periods reflect heritage JPMorgan Chase results.
(b) Average VARs were less than the sum of the VARs of their market risk components, which was due to risk offsets resulting from portfolio diversification. The diversification effect reflected the fact that the risks were not perfectly correlated. The
risk of a portfolio of positions is usually less than the sum of the risks of the positions themselves.
(c) Trading VAR includes predominantly all trading activities in IB; however, particular risk parameters of certain products are not fully captured, for example, correlation risk or the credit spread sensitivity of certain mortgage products. Trading VAR
does not include VAR related to held-for-sale funded loans and unfunded commitments, nor the debit valuation adjustments ("DVA") taken on derivative and structured liabilities to reflect the credit quality of the Firm. Trading VAR also does not
include the MSR portfolio or VAR related to other corporate functions, such as Corporate/Private Equity.
(d) Includes VAR on derivative credit valuation adjustments, hedges of the credit valuation adjustment and mark-to-market hedges of the retained loan portfolio, which are all reported in principal transactions revenue. This VAR does not
include the retained loan portfolio.
(e) Source: Thomson Reuters Securities data. June 30, 2008 YTD results are pro forma for the acquisition of Bear Stearns. Full year 2007 results represent heritage-JPMorgan Chase only.
(f) Includes asset-backed securities, mortgage-backed securities and municipal securities.
(g) Includes rights offerings; U.S. domiciled equity and equity-related transactions.
(h) Global announced M&A is based upon rank value; all other rankings were based upon proceeds, with full credit to each book manager/equal if joint. Because of joint assignments, market share of all participants will add up to more than 100%.
Global and U.S. announced M&A market share and ranking for 2007 include transactions withdrawn since December 31, 2007. U.S. announced M&A represents any U.S. involvement ranking.

Page 10

RETAIL FINANCIAL SERVICES
(in millions, except ratio and headcount data)
QUARTERLY TRENDS
2Q08
INCOME STATEMENT
REVENUE
Securities gains (losses)
Mortgage fees and related income
Credit card income
All other income
Noninterest revenue
Net interest income
TOTAL NET REVENUE

$

1Q08

497
375
696
194
198
1,960
3,055
5,015

$

4Q07

461
377
525
174
154
1,691
3,011
4,702

$

YEAR-TO-DATE

3Q07

496
332
1
888
174
219
2,110
2,705
4,815

$

2Q08 Change
1Q08
2Q07

2Q07

492
336
229
167
296
1,520
2,681
4,201

$

470
344
495
163
212
1,684
2,673
4,357


1,332

2,492

1,051

680

587

NONINTEREST EXPENSE

1,184
1,386
100
2,670

1,160
1,310
100
2,570

1,113
1,313
114
2,540

1,087
1,265
117
2,469

NET INCOME (LOSS)

1,013
407
606

1,224
472
752

1,052
413
639

8 %
(1)
33
11
29
16
1
7

$

FINANCIAL RATIOS
ROE
Overhead ratio
Overhead ratio excluding core deposit intangibles (a)
SELECTED BALANCE SHEETS (Ending)
Assets
Loans:
Loans retained
Loans held-for-sale & loans at fair value (b)
Total loans
Deposits
SELECTED BALANCE SHEETS (Average)
Assets
Loans:
Loans retained
Loans held-for-sale & loans at fair value (b)
Total loans
Deposits
Equity
Headcount

14
53
51

$

230,695

$
%

232,725

$

(5) %
55
53

$

187,595
16,282
203,877
223,121
$

(360)
(133)
(227)

227,916

19
53
50

$

184,211
18,000
202,211
230,854
$

227,560

225,908

$
%

16
59
56

$

181,016
16,541
197,557
221,129
$

221,557

216,754

214,852

6 %
9
41
19
(7)
16
14
15

$

2008 Change
2007

2007

958
752
1,221
368
352
3,651
6,066
9,717

$

893
607
977
305
391
3,173
5,290
8,463

7 %
24
25
21
(10)
15
15
15
335

$
%

(47)

127

3,824

879

1,104
1,264
116
2,484

2
6
4

7
10
(14)
7

2,344
2,696
200
5,240

2,169
2,488
234
4,891

8
8
(15)
7

1,286
501
785

NM
NM
NM

(21)
(19)
(23)

653
274
379

2,693
1,049
1,644

(76)
(74)
(77)

20
57
54

$

$

$

%

4
54
52

217,421

1

6

166,992
23,501
190,493
217,689

172,498
18,274
190,772
216,135
$

2008

2
(10)
1
(3)

12
(31)
7
2

216,692

2

7

$

230,695

$
%

21
58
55

$

230,143

$

217,421

6

166,992
23,501
190,493
217,689

187,595
16,282
203,877
223,121
$

%

12
(31)
7
2

216,912

6

185,993
20,492
206,485
226,487
17,000

182,220
17,841
200,061
225,555
17,000

176,140
17,538
193,678
219,226
16,000

168,495
19,560
188,055
216,904
16,000

165,136
25,166
190,302
219,171
16,000

2
15
3
-

13
(19)
9
3
6

184,106
19,167
203,273
226,021
17,000

163,946
26,692
190,638
218,058
16,000

12
(28)
7
4
6

69,550

70,095

69,465

68,528

68,254

(1)

2

69,550

68,254

2

(a) Retail Financial Services uses the overhead ratio (excluding the amortization of core deposit intangibles ("CDI")), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in
the overhead ratio calculation results in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this method would result in an improving overhead ratio over time, all things remaining equal. This non-GAAP ratio
excludes Regional Banking's core deposit intangible amortization expense related to The Bank of New York transaction and the Bank One merger of $99 million, $99 million, $113 million, $116 million and $115 million for the quarters ending
June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively, and $198 million and $231 million for year-to-date 2008 and 2007, respectively.
(b) Loans included prime mortgage loans originated with the intent to sell, which were accounted for at fair value. These loans, classified as trading assets on the Consolidated balance sheets, totaled $14.1 billion, $13.5 billion, $12.6 billion,
$14.4 billion and $15.2 billion at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively. Average loans included prime mortgage loans, classified as trading assets on the Consolidated
balance sheets, of $16.9 billion, $13.4 billion, $13.5 billion, $14.1 billion and $13.5 billion for the quarters ended June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively, and $15.2 billion and
$10.0 billion for the year-to-date 2008 and 2007, respectively.

Page 11

QUARTERLY TRENDS
2Q08
Net charge-offs
Nonperforming loans (a) (b)
Nonperforming assets (a) (b)

$

Net charge-off rate (c) (d)
Allowance for loan losses to ending loans (c)
Nonperforming loans to total loans

1Q08

941
3,873
4,481
4,475
1.99
2.39
121
1.90

$

%

4Q07

789
3,292
3,824
4,208
1.71
2.28
133
1.63

$

%

YEAR-TO-DATE

3Q07

522
2,704
3,190
2,634
1.17
1.46
100
1.37

$

%

2Q08 Change
1Q08
2Q07

2Q07

350
1,991
2,404
2,105
0.82
1.22
107
1.04

$

%

270
1,760
2,099
1,772
0.66
1.06
115
0.92

19
18
17
6

%

249
120
113
153

2008

%

$

%

2008 Change
2007

2007

1,730
3,873
4,481
4,475
1.85
2.39
121
1.90

$

%

455
1,760
2,099
1,772
0.56
1.06
115
0.92

280
120
113
153
%

REGIONAL BANKING
Noninterest revenue
Net interest income
Total net revenue
Noninterest expense
Net income (loss)
ROE
Overhead ratio
Overhead ratio excluding core deposit intangibles (e)

$

1,022
2,571
3,593
1,213
1,778
602
354
11
49
47

$

%

878
2,543
3,421
2,324
1,794
(697)
(433)
(14) %
52
50

$

940
2,363
3,303
915
1,785
603
371
12
54
51

$

%

1,013
2,325
3,338
574
1,760
1,004
611
21
53
49

$

%

977
2,296
3,273
494
1,749
1,030
629
21
53
50

16
1
5
(48)
(1)
NM
NM
%

5
12
10
146
2
(42)
(44)

$

1,900
5,114
7,014
3,537
3,572
(95)
(79)
(1) %
51
48

$

1,770
4,595
6,365
727
3,478
2,160
1,319
23
55
51

7
11
10
387
3
NM
NM
%

(a) Nonperforming loans included loans held-for-sale and loans accounted for at fair value of $180 million, $129 million, $69 million, $17 million and $217 million at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and
June 30, 2007, respectively. Certain of these loans are classified as trading assets on the Consolidated balance sheets.
(b) Nonperforming loans and assets excluded (1) loans eligible for repurchase as well as loans repurchased from Governmental National Mortgage Association ("GNMA") pools that are insured by U.S. government agencies
of $1.9 billion, $1.8 billion, $1.5 billion, $1.3 billion and $1.2 billion at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively, and (2) education loans that are 90 days
past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program of $ 371 million, $252 million, $279 million, $241 million and $200 million at June 30, 2008, March 31, 2008,
December 31, 2007, September 30, 2007, and June 30, 2007, respectively. These amounts for GNMA and education loans are excluded, as reimbursement is proceeding normally.
(c) Loans held-for-sale and loans accounted for at fair value under SFAS 159 were excluded when calculating the allowance coverage ratio and the net charge-off rate.
(d) The net charge-off rate for the quarters ended June 30, 2008, March 31, 2008 and December 31, 2007, excluded $19 million, $14 million and $2 million, respectively, and the six months ended June 30, 2008, excluded $33 million of
charge-offs related to prime mortgage loans held by Corporate/Private Equity.
(e) Regional Banking uses the overhead ratio (excluding the amortization of core deposit intangibles ("CDI")), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in the
overhead ratio calculation results in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this inclusion would result in an improving overhead ratio over time, all things remaining equal. This non-GAAP ratio
excludes Regional Banking's core deposit intangible amortization expense related to The Bank of New York transaction and the Bank One merger of $99 million, $99 million, $113 million, $116 million and $115 million for the quarters ended
June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively, and $198 million and $231 million for year-to-date 2008 and 2007, respectively.

Page 12

%

(in millions, except ratio data and where otherwise noted)
QUARTERLY TRENDS
2Q08

1Q08

4Q07

YEAR-TO-DATE

3Q07

2Q08 Change
1Q08
2Q07

2Q07

2008

2008 Change
2007

2007

REGIONAL BANKING (continued)
BUSINESS METRICS (in billions)
Home equity origination volume
End of period loans owned:
Home equity
Mortgage (a)
Business banking
Education
Other loans (b)
Total end of period loans
End of period deposits:
Checking
Savings
Time and other
Total end of period deposits
Average loans owned:
Home equity
Mortgage loans (a)
Business banking
Education (c)
Other loans (b)
Total average loans (c)
Average deposits:
Checking
Savings
Time and other
Total average deposits
Average assets
Average equity
30+ day delinquency rate (d) (e)
Net charge-offs
Home equity
Mortgage
Business banking
Other loans
Total net charge-offs
Net charge-off rate
Home equity
Mortgage (f)
Business banking
Other loans
Total net charge-off rate (c) (f)
Nonperforming assets (g)

$

5.3

$

6.7

$

9.8

$

11.2

$

14.6

$

95.1
14.9
16.4
13.0
1.1
140.5

$

95.0
15.9
15.8
12.4
1.1
140.2

$

94.8
15.7
15.4
11.0
2.3
139.2

$

93.0
12.3
14.9
10.2
2.4
132.8

$

91.0
8.8
14.6
10.2
2.5
127.1

$

69.1
105.8
37.0
211.9

$

69.1
105.4
44.6
219.1

$

67.0
96.0
48.7
211.7

$

64.5
95.7
46.5
206.7

$

$

95.1
15.6
16.1
12.7
1.1
140.6

$

95.0
15.8
15.6
12.0
1.5
139.9

$

94.0
13.7
15.1
10.6
2.3
135.7

$

91.8
9.9
14.8
9.8
2.4
128.7

$

68.5
105.8
39.6
213.9
149.3
12.4

$

66.3
100.3
47.7
214.3
149.9
12.4

$

64.5
96.3
47.7
208.5
147.1
11.8

$

64.9
97.1
43.3
205.3
140.6
11.8

3.61
$

511
211
51
48
821
2.16
4.95
1.27
1.80
2.35

$

3,865

3.23

%

$

447
163
40
21
671
1.89
3.79
1.03
0.89
1.94

%

$

3,348

3.03

%

$

248
73
38
28
387
1.05
2.06
1.00
1.21
1.16

%

$

2,879

2.39

%

$

$

2,206

$

12.0

$

27.3

(6)
4
5
-

5
69
12
27
(56)
11

$

95.1
14.9
16.4
13.0
1.1
140.5

$

91.0
8.8
14.6
10.2
2.5
127.1

5
69
12
27
(56)
11

67.3
97.7
41.9
206.9

(17)
(3)

3
8
(12)
2

$

69.1
105.8
37.0
211.9

$

67.3
97.7
41.9
206.9

3
8
(12)
2

$

89.2
8.8
14.5
10.5
2.4
125.4

(1)
3
6
(27)
1

7
77
11
21
(54)
12

$

95.0
15.7
15.9
12.4
1.3
140.3

$

87.8
8.8
14.4
10.8
2.7
124.5

8
78
10
15
(52)
13

$

150
40
33
23
246
0.65
1.60
0.88
1.01
0.78

%

(64) %

67.2
98.4
41.7
207.3
137.7
11.8

3
5
(17)
-

2
8
(5)
3
8
5

$

67.4
103.1
43.6
214.1
149.6
12.4

$

67.3
97.6
42.1
207.0
136.8
11.8

6
4
3
9
5

1.88

%

$

$

1,751

3.61

%

98
26
30
52
206
0.44
1.19
0.83
2.32
0.68

%

(21) %

14
29
28
129
22

421
NM
70
(8)
299

$

958
374
91
69
1,492
2.03
4.37
1.15
1.37
2.15

%

15

121

$

3,865

1.88

%

$

$

%

166
46
55
65
332
0.38
1.05
0.77
1.39
0.56

%

(56) %

477
NM
65
6
349
%

1,751

121

(a) Balance reported predominantly reflected subprime mortgage loans owned.
(b) Included commercial loans derived from community development activities prior to March 31, 2008.
(c) Average loans included loans held-for-sale of $3.1 billion, $4.0 billion, $3.7 billion, $3.2 billion and $3.9 billion for the quarters ended June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007,
respectively, and $3.6 billion and $4.1 billion for year-to-date 2008 and 2007, respectively. These amounts were excluded when calculating the net charge-off rate.
(d) Excluded loans eligible for repurchase as well as loans repurchased from GNMA pools that are insured by U.S. government agencies of $1.5 billion, $1.5 billion, $1.2 billion, $979 million and $879 million at June 30, 2008, March 31, 2008,
December 31, 2007, September 30, 2007, and June 30, 2007, respectively. These amounts are excluded as reimbursement is proceeding normally.
(e) Excluded loans that are 30 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program of $594 million, $534 million, $663 million, $590 million and $523 million at
June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively. These amounts are excluded as reimbursement is proceeding normally.
(f) The mortgage and total net charge-off rate for the quarters ended June 30, 2008, March 31, 2008 and December 31, 2007, excluded $19 million, $14 million and $2 million, respectively, and for the six months ended June 30, 2008,
excluded $33 million of charge-offs related to prime mortgage loans held by the Corporate/Private Equity sector.
(g) Nonperforming assets excluded (1) loans eligible for repurchase as well as loans repurchased from Governmental National Mortgage Association ("GNMA") pools that are insured by U.S. government agencies of $1.9 billion, $1.8 billion,
$1.5 billion, $1.3 billion and $1.2 billion at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively, and (2) education loans that are 90 days past due and still accruing, which are insured
by U.S. government agencies under the Federal Family Education Loan Program of $371 million, $252 million, $279 million, $241 million and $200 million at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and
June 30, 2007, respectively. These amounts for GNMA and education loans are excluded, as reimbursement is proceeding normally.
Page 13

QUARTERLY TRENDS
2Q08

1Q08

4Q07

YEAR-TO-DATE

3Q07

2Q08 Change
1Q08
2Q07

2Q07

2008

2008 Change
2007

2007

REGIONAL BANKING (continued)
RETAIL BRANCH BUSINESS METRICS
Investment sales volume

$

Number of:
Branches
ATMs
Personal bankers
Sales specialists
Active online customers (in thousands)
Checking accounts (in thousands)

5,211

$

3,157
9,310
9,995
4,116
7,180
11,336

4,084

$

3,146
9,237
9,826
4,133
6,454
11,068

4,114

$

3,152
9,186
9,650
4,105
5,918
10,839

4,346

$

28

3,089
8,649
9,025
3,915
5,448
10,356

1
2
11
2

2
8
11
5
32
9

463

4

29

615

3,096
8,943
9,503
4,025
5,706
10,644

5,117

7

10

%

2

%

$

9,295

$

3,157
9,310
9,995
4,116
7,180
11,336

9,900

(6) %

3,089
8,649
9,025
3,915
5,448
10,356

2
8
11
5
32
9

863

36

1,216

8

1,060
(761)
299
(1,141)
374

(16)
(8)
(77)
23
34

1,237
984
253
155

35
20
93
94

MORTGAGE BANKING
Production revenue

$

Net mortgage servicing revenue:
Loan servicing revenue
Changes in MSR asset fair value:
Due to inputs or assumptions in model
Other changes in fair value
Total changes in MSR asset fair value
Derivative valuation adjustments and other
Total net mortgage servicing revenue

$

22

$

66

$

(810)
(377)
(1,187)
788
230

1,059
518
541
332
%

176

629

(766)
(393)
(1,159)
1,232
738

751
536
215
132
%

321

665

(632)
(425)
(1,057)
598
175

922
649
273
169
28

576

634

1,519
(394)
1,125
(1,478)
325

ROE

Mortgage origination volume by channel (in billions)
Retail
Wholesale
Correspondent
CNT (negotiated transactions)
Total

$

678

Total net revenue
Noninterest expense
Net income (loss)

Business metrics (in billions)
Third-party mortgage loans serviced (ending)
MSR net carrying value (ending)
Avg mortgage loans held-for-sale & loans at fair value (a)
Average assets
Average equity

597

952
(383)
569
(1,014)
170

406
485
(79)
(48)

14

1,173

$

1,312

60
(3)
98
(46)
91

23
21
27
28

633
516
117
71

NM

%

NM
7
NM
NM
86

$

887
(819)
68
(880)
500

46
26
133
138

1,673
1,185
488
301

%

25

%

16

%

$

659.1
10.9
17.4
36.2
2.4

$

627.1
8.4
13.8
32.2
2.4

$

614.7
8.6
13.8
30.6
2.0

$

600.0
9.1
16.4
31.4
2.0

$

572.4
9.5
21.3
35.6
2.0

5
30
26
12
-

15
15
(18)
2
20

$

659.1
10.9
15.6
34.2
2.4

$

572.4
9.5
22.6
36.8
2.0

15
15
(31)
(7)
20

$

12.5
9.1
17.0
17.5
56.1

$

12.6
10.6
12.0
11.9
47.1

$

9.9
10.2
9.5
10.4
40.0

$

11.1
9.8
7.2
11.1
39.2

$

13.6
12.8
6.4
11.3
44.1

(1)
(14)
42
47
19

(8)
(29)
166
55
27

$

25.1
19.7
29.0
29.4
103.2

$

24.5
22.7
11.2
21.8
80.2

2
(13)
159
35
29

(a) Included $16.9 billion, $13.4 billion, $13.5 billion, $14.1 billion and $13.5 billion of prime mortgage loans at fair value for the quarters ended June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007,
respectively, and $15.2 billion and $10.0 billion for year-to-date 2008 and 2007, respectively. These loans are classified as trading assets on the Consolidated balance sheets.

Page 14

QUARTERLY TRENDS
2Q08

1Q08

4Q07

YEAR-TO-DATE

3Q07

2Q08 Change
1Q08
2Q07

2Q07

2008

2008 Change
2007

2007

AUTO FINANCE
Noninterest revenue
Net interest income
Total net revenue
Noninterest expense
Net income

$

ROE
ROA
Business metrics (in billions)
Auto origination volume
End-of-period loans and lease related assets
Loans outstanding
Lease financing receivables
Operating lease assets
Total end-of-period loans and lease related assets
Average loans and lease related assets
Loans outstanding
Lease financing receivables
Operating lease assets
Total average loans and lease related assets
Average assets
Average equity
Credit quality statistics
30+ day delinquency rate
Net charge-offs
Loans
Lease receivables
Total net charge-offs
Net charge-off rate
Loans
Lease receivables
Total net charge-off rate
Nonperforming assets

155
343
498
117
243
138
83
15
0.71

$

%

151
379
530
168
240
122
74
13
0.65

$

%

142
308
450
133
237
80
49
9
0.44

$

%

140
307
447
96
224
127
76
14
0.70

$

%

138
312
450
92
219
139
85
15
0.79

3 %
(9)
(6)
(30)
1
13
12

12 %
10
11
27
11
(1)
(2)

$

%

306
722
1,028
285
483
260
157
14
0.68

$

%

269
591
860
151
429
280
170
16
0.79

14 %
22
20
89
13
(7)
(8)
%

$

5.6

$

7.2

$

5.6

$

5.2

$

5.3

(22)

6

$

12.8

$

10.5

22

$

44.7
0.2
2.1
47.0

$

44.4
0.3
2.0
46.7

$

42.0
0.3
1.9
44.2

$

40.3
0.6
1.8
42.7

$

40.4
0.8
1.8
43.0

1
(33)
5
1

11
(75)
17
9

$

44.7
0.2
2.1
47.0

$

40.4
0.8
1.8
43.0

11
(75)
17
9

$

44.7
0.2
2.1
47.0
47.3
2.3

$

42.9
0.3
1.9
45.1
45.5
2.3

$

41.1
0.5
1.9
43.5
43.8
2.2

$

39.9
0.7
1.8
42.4
42.9
2.2

$

40.1
1.0
1.7
42.8
43.4
2.2

4
(33)
11
4
4
-

11
(80)
24
10
9
5

$

43.8
0.3
2.0
46.1
46.4
2.3

$

39.8
1.2
1.7
42.7
43.3
2.2

10
(75)
18
8
7
5

1.57
$

$

%

118
1
119
1.06
2.01
1.07
164

1.44
$

%

$

%

117
1
118
1.10
1.34
1.10
160

1.85
$

%

$

%

132
1
133
1.27
0.79
1.27
188

1.65
$

%

$

%

98
1
99
0.97
0.57
0.97
156

1.43
$

%

$

%

62
1
63
0.62
0.40
0.61
131

1.57
1
1

90
89

$

%

2

25

$

%

235
2
237
1.08
1.34
1.08
164

1.43
$

%

$

%

120
2
122
0.61
0.34
0.60
131

96
94
%

25

Page 15

CARD SERVICES - MANAGED BASIS
QUARTERLY TRENDS
2Q08
INCOME STATEMENT
REVENUE
Credit card income
All other income
Noninterest revenue
Net interest income
TOTAL NET REVENUE

$

1Q08

673
91
764
3,011
3,775

$

4Q07

600
119
719
3,185
3,904

$

YEAR-TO-DATE

3Q07

712
122
834
3,137
3,971

$

2Q08 Change
1Q08
2Q07

2Q07

692
67
759
3,108
3,867

$

682
80
762
2,955
3,717

12 %
(24)
6
(5)
(3)

2008

(1) %
14
2
2

$

2008 Change
2007

2007

1,273
210
1,483
6,196
7,679

$

1,281
172
1,453
5,944
7,397

(1) %
22
2
4
4


2,194

1,670

1,788

1,363

1,331

31

65

3,864

2,560

51

NONINTEREST EXPENSE

258
763
164
1,185

267
841
164
1,272

260
790
173
1,223

256
827
179
1,262

251
753
184
1,188

(3)
(9)
(7)

3
1
(11)
-

525
1,604
328
2,457

505
1,556
368
2,429

4
3
(11)
1

Income tax expense
NET INCOME

$

396
146
250

$

962
353
609

$

960
351
609

$

1,242
456
786

$

1,198
439
759

(59)
(59)
(59)

(67)
(67)
(67)

$

1,358
499
859

$

2,408
884
1,524

(44)
(44)
(44)

Memo: Net securitization gains

$

36

$

70

$

28

$

-

$

16

(49)

125

$

106

$

39

FINANCIAL METRICS
ROE
Overhead ratio
% of average managed outstandings:
Net interest income
Noninterest revenue
Risk adjusted margin (a)
Noninterest expense
Pretax income (ROO) (b)
Net income
BUSINESS METRICS
Charge volume (in billions)
Net accounts opened (in millions)
Credit cards issued (in millions)
Number of registered internet customers (in millions)
Merchant acquiring business (c)
Bank card volume (in billions)
Total transactions (in billions)

7
31

%

17
33

7.92
5.77
2.01
4.16
3.12
1.04
0.66

%

17
31

8.34
4.37
1.88
5.85
3.33
2.52
1.60

%

22
33

8.20
4.67
2.18
5.71
3.20
2.51
1.59

%

22
32

8.29
3.64
2.03
6.68
3.37
3.31
2.10

%

12
32

8.04
3.62
2.07
6.49
3.23
3.26
2.06

%

22
33

8.13
5.07
1.95
5.01
3.23
1.78
1.13

172

%

8.08
3.48
1.97
6.57
3.30
3.27
2.07

$

93.6
3.6
157.6
28.0

$

85.4
3.4
156.4
26.7

$

95.5
5.3
155.0
28.3

$

89.8
4.0
153.6
26.4

$

88.0
3.7
150.9
24.6

10
6
1
5

6
(3)
4
14

$

179.0
7.0
157.6
28.0

$

169.3
7.1
150.9
24.6

6
(1)
4
14

$

199.3
5.6

$

182.4
5.2

$

194.4
5.4

$

181.4
5.0

$

179.7
4.8

9
8

11
17

$

381.7
10.8

$

343.3
9.3

11
16

(a) Represents total net revenue less provision for credit losses.
(b) Pretax return on average managed outstandings.
(c) Represents 100% of the merchant acquiring business.

Page 16

CARD SERVICES - MANAGED BASIS
QUARTERLY TRENDS
2Q08
SELECTED ENDING BALANCES
Loans:
Loans on balance sheets
Securitized loans
Managed loans

1Q08

$

76,278
79,120
$ 155,398

$
$

75,888
75,062
150,950

$ 161,601

$

$

$

4Q07

$

159,602

$
$

75,630
77,195
$ 152,825

$

Equity

$

$

Headcount
MANAGED CREDIT QUALITY STATISTICS
Net charge-offs
Net charge-off rate

19,570

$

Managed delinquency ratios
30+ days
90+ days
Allowance for loan losses (a)
Allowance for loan losses to period-end loans (a)

1,894
4.98

3.46
1.76
$

3,705
4.86

$

158,183

$

79,028
72,715
151,743

$

$

14,100

14,100

18,931

$
%

%

3.66
1.84
$

%

1,670
4.37

3,404
4.49

$

$
%

%

1,488
3.89

3.48
1.65
$

3,407
4.04

$

$

5

$

160,601

$

155,333

3

(5)
4
-

(4)
13
4

$

$

$

77,537
75,652
153,189

$

80,458
67,959
148,417

(4)
11
3

14,100

-

-

$

14,100

$

14,100

-

18,913

$

3

3

18,913

3

13

42

$

154,956

$

154,406

1

$

$

79,993
68,673
148,666

$

79,000
68,428
147,428

$

14,100

$

18,887

$

%

3.25
1.50
$

%

1,363
3.64

3,107
3.91

$
%

%

3.00
1.42
$

%

1,331
3.62

3,096
3.85

%

(5) %
17
5

$

2008 Change
2007

2007

80,495
67,506
148,001

1
5
3

%

2008

76,278
79,120
155,398

80,495
67,506
148,001

18,554

%

2Q07

79,409
69,643
149,052

$

79,445
74,108
153,553

14,100

3Q07

84,352
72,701
157,053

SELECTED AVERAGE BALANCES
Managed assets
Loans:
Loans on balance sheets
Securitized loans
Managed average loans

$

YEAR-TO-DATE
2Q08 Change
1Q08
2Q07

19,570

$

%

%

3,564
4.68

3.46
1.76
9

%

20

$

$

3,705
4.86

$
%

%

3.00
1.42
$

%

2,645
3.59

3,096
3.85

(5) %
17
5

35
%

%

20
%

(a) Loans on a reported basis.

Page 17

CARD RECONCILIATION OF REPORTED AND MANAGED DATA
(in millions)
QUARTERLY TRENDS
2Q08
INCOME STATEMENT DATA (a)
Credit card income
Reported
Securitization adjustments
Managed credit card income
Net interest income
Reported
Managed net interest income
Total net revenue
Reported
Managed total net revenue
Reported
Managed provision for credit losses
BALANCE SHEETS - AVERAGE BALANCES (a)
Total average assets
Reported
Managed average assets
CREDIT QUALITY STATISTICS (a)
Net charge-offs
Reported
Managed net charge-offs

$
$

$
$

$
$

$
$

1,516
(843)
673

1,338
1,673
3,011

2,945
830
3,775

1,364
830
2,194

$

1Q08

$
$

$
$

$
$

$
$

87,021
74,580
$ 161,601

$

$

$

$

1,064
830
1,894

$

$

1,537
(937)
600

1,567
1,618
3,185

3,223
681
3,904

989
681
1,670

88,013
71,589
159,602

989
681
1,670

4Q07

$
$

$
$

$
$

$
$

$
$

$
$

1,597
(885)
712

1,633
1,504
3,137

3,352
619
3,971

1,169
619
1,788

88,244
69,939
158,183

869
619
1,488

YEAR-TO-DATE

3Q07

$
$

$
$

$
$

$
$

$
$

$
$

1,528
(836)
692

1,694
1,414
3,108

3,289
578
3,867

785
578
1,363

88,856
66,100
154,956

785
578
1,363

2Q07

$
$

$
$

$
$

$
$

$
$

$
$

1,470
(788)
682

2Q08 Change
1Q08
2Q07

(1) %
10
12

2008

3 %
(7)
(1)

$
$

$

8 %
(16)
(1)

(15)
21
2

3,127
590
3,717

(9)
22
(3)

(6)
41
2

741
590
1,331

38
22
31

84
41
65

(1)
4
1

(2)
13
5

87,517
73,084
$ 160,601

89,814
65,519
$ 155,333

(3)
12
3

8
22
13

44
41
42

$

$

40
28
35

741
590
1,331

$
$

$
$

6,168
1,511
7,679

2,353
1,511
3,864

$

$

2,053
1,511
3,564

$

2,815
(1,534)
1,281

(15)
3
(5)

$

2,905
3,291
6,196

$

2008 Change
2007

1,577
1,378
2,955

88,486
65,920
154,406

$

3,053
(1,780)
1,273

2007

$

$
$

$
$

3,227
2,717
5,944

(10)
21
4

6,214
1,183
7,397

(1)
28
4

1,377
1,183
2,560

71
28
51

$

$

1,462
1,183
2,645

(a) JPMorgan Chase uses the concept of “managed receivables” to evaluate the credit performance and overall performance of the underlying credit card loans, both sold and not sold; as the same borrower is continuing
to use the credit card for ongoing charges, a borrower’s credit performance will affect both the receivables sold under SFAS 140 and those not sold. Thus, in its disclosures regarding managed receivables, JPMorgan
Chase treats the sold receivables as if they were still on the balance sheet in order to disclose the credit performance (such as net charge-off rates) of the entire managed credit card portfolio. Managed results exclude
the impact of credit card securitizations on total net revenue, the provision for credit losses, net charge-offs and loan receivables. Securitization does not change reported net income versus managed earnings;
however, it does affect the classification of items on the Consolidated Statements of Income and Consolidated Balance Sheets.

Page 18

COMMERCIAL BANKING
QUARTERLY TRENDS
2Q08
INCOME STATEMENT
REVENUE
All other income (a)
Noninterest revenue
Net interest income
TOTAL NET REVENUE

$


1Q08

207
26
150
383
723
1,106

$

4Q07

193
26
115
334
733
1,067

$

YEAR-TO-DATE

3Q07

172
24
130
326
758
1,084

$

2Q08 Change
1Q08
2Q07

2Q07

159
24
107
290
719
1,009

$

158
21
133
312
695
1,007

7 %
30
15
(1)
4

2008

31
24
13
23
4
10

%

$

2008 Change
2007

2007

400
52
265
717
1,456
2,173

$

316
44
287
647
1,363
2,010

27 %
18
(8)
11
7
8

47

101

105

112

45

(53)

4

148

62

139

NONINTEREST EXPENSE

173
290
13
476

178
294
13
485

184
307
13
504

160
300
13
473

182
300
14
496

(3)
(1)
(2)

(5)
(3)
(7)
(4)

351
584
26
961

362
590
29
981

(3)
(1)
(10)
(2)

Income tax expense
NET INCOME

583
228
355

481
189
292

475
187
288

424
166
258

466
182
284

21
21
22

25
25
25

1,064
417
647

967
379
588

10
10
10

(1)
2
34
125
4

8
11
11
13
10

$

33

14

14
(3)
21
4

8
19
(14)
44
10

MEMO:
Revenue by product:
Lending
Treasury services
Investment banking
Other
Total Commercial Banking revenue
IB revenue, gross (b)
Revenue by business:
Middle Market Banking
Mid-Corporate Banking
Real Estate Banking
Other
Total Commercial Banking revenue
FINANCIAL RATIOS
ROE
Overhead ratio

$

$

$

$

$

376
630
91
9
1,106

$

270

$

708
235
94
69
1,106

$

20
43

$

$

$

379
616
68
4
1,067

$

203

$

706
207
97
57
1,067

$

%

17
45

$

$

$

380
631
70
3
1,084

$

227

$

695
239
102
48
1,084

$

%

17
46

$

$

$

343
594
64
8
1,009

$

348
569
82
8
1,007

$

194

$

236

$

680
167
108
54
1,009

$

653
197
109
48
1,007

$

%

15
47

$

%

18
49

%

$

$

$

$

755
1,246
159
13
2,173

$

696
1,125
158
31
2,010

$

473

$

467

$

1,414
442
191
126
2,173

$

1,314
409
211
76
2,010

$

19
44

$

%

19
49

8
11
1
(58)
8
1

8
8
(9)
66
8

%

(a) IB-related and commercial card revenue is included in all other income.
(b) Represents the total revenue related to investment banking products sold to Commercial Banking ("CB") clients.

Page 19

COMMERCIAL BANKING
(in millions, except ratio and headcount data)
QUARTERLY TRENDS
2Q08
Total assets
Loans:
Loans retained
Total loans (a)
Liability balances (b)
Equity
MEMO:
Loans by business:
Middle Market Banking
Mid-Corporate Banking
Real Estate Banking
Other
Total Commercial Banking loans

$ 103,469

Net charge-off (recovery) rate (a)
Allowance for loan losses to average loans (a)

$

70,682
379
71,061
99,404
7,000

$

$

Headcount
Nonperforming loans (c)
Allowance for credit losses:
Allowance for loan losses (d)

1Q08

42,879
15,357
7,500
5,325
71,061

$

$

$

$

1,843
170
2,013

40,111
15,150
7,457
5,313
68,031

$

$

81
446

0.48
2.65
426
0.66

94,550

$

$

38,275
15,440
7,347
4,482
65,544

$

$

33
146

0.21
2.66
1,161
0.22

86,652

$

$

$

$

20
134

$

0.13
2.67
1,211
0.22

84,687

1
5
(27)
4
-

20
(49)
19
18
11

37,099
11,692
6,894
4,127
59,812

7
1
1
4

16
31
9
29
19

4,295

37,617
12,076
7,144
4,435
61,272

1,623
236
1,859
%

2008

59,071
741
59,812
84,187
6,300

4,158

1,695
236
1,931
%

2Q07

60,839
433
61,272
88,081
6,700

4,125

1,790
200
1,990
%

3Q07

63,749
1,795
65,544
96,716
6,700

4,075

49
486

0.28
2.61
401
0.68

101,979
67,510
521
68,031
99,477
7,000

4,028

$

4Q07

YEAR-TO-DATE
2Q08 Change
1Q08
2Q07

(1)

(6)

(8)
135
1,551
222
1,773

%

%

22

(40)
9

NM
260

3
(15)
1

%

19
(23)
14

(0.05) %
2.63
1,149
0.23

$

2007

102,724

$

$

$

$

4,028

$

130
486

$

1,843
170
2,013
0.38
2.67
401
0.70

23
19
(26)
18
20
11

36,710
11,183
6,984
3,865
58,742

13
36
7
38
18

4,295

41,495
15,253
7,479
5,319
69,546

83,622
58,133
609
58,742
82,976
6,300

69,096
450
69,546
99,441
7,000

$

2008 Change
2007

(6)

(9)
135
1,551
222
1,773

%

NM
260
19
(23)
14

(0.03) %
2.67
1,149
0.23

(a) Loans held-for-sale and loans accounted for at fair value were excluded when calculating the allowance coverage ratio and the net charge-off (recovery) rate.
(b) Liability balances include deposits and deposits swept to on-balance sheet liabilities such as commercial paper, federal funds purchased and securities sold under repurchase agreements.
(c) Nonperforming loans included loans held-for-sale and loans at fair value of $26 million at June 30, 2008, and March 31, 2008. These amounts were excluded when calculating the allowance
coverage ratios. There were no nonperforming loans held-for-sale or held at fair value at December 31, 2007, September 30, 2007, and June 30, 2007, respectively.
(d) The allowance for loan losses at June 30, 2008, included an amount transferred from Corporate/Private Equity related to loans acquired in the merger with Bear Stearns.

Page 20

%

TREASURY & SECURITIES SERVICES
QUARTERLY TRENDS
2Q08
INCOME STATEMENT
REVENUE
All other income
Noninterest revenue
Net interest income
TOTAL NET REVENUE

$

Credit reimbursement to IB (a)

1Q08

283
846
228
1,357
662
2,019

$

7
(30)

4Q07

269
820
200
1,289
624
1,913

$

12
(30)

YEAR-TO-DATE

3Q07

247
806
228
1,281
649
1,930

$

4
(30)

2Q08 Change
1Q08
2Q07

2Q07

244
730
171
1,145
603
1,748

$

9
(31)

219
828
184
1,231
510
1,741

5
3
14
5
6
6

(30)

(42)
-

%

2008

29
2
24
10
30
16

%

$

NM
-

2008 Change
2007

2007

552
1,666
428
2,646
1,286
3,932

$

432
1,514
309
2,255
1,012
3,267

19
(60)

28
10
39
17
27
20

6
(60)

217
-

NONINTEREST EXPENSE

669
632
16
1,317

641
571
16
1,228

607
598
17
1,222

579
538
17
1,134

609
523
17
1,149

4
11
7

10
21
(6)
15

1,310
1,203
32
2,545

1,167
1,025
32
2,224

12
17
14

Income tax expense
NET INCOME

665
240
425

643
240
403

674
252
422

574
214
360

562
210
352

3
5

18
14
21

1,308
480
828

977
362
615

34
33
35

720
1,021
1,741

5
6
6

18
14
16

1,409
1,858
3,267

18
22
20

REVENUE BY BUSINESS
Treasury Services
Worldwide Securities Services
TOTAL NET REVENUE

$

$
$

FINANCIAL RATIOS
ROE
Overhead ratio
Pretax margin ratio (b)
SELECTED AVERAGE BALANCES
Total assets
Loans (c)
Liability balances (d)
Equity
Headcount

852
1,167
2,019

49
65
33

$

$

56,192
23,822
268,293
3,500
27,232

$
$

%

813
1,100
1,913

46
64
34

$

$

57,204
23,086
254,369
3,500
26,561

$
$

%

824
1,106
1,930

56
63
35

$

$

60,830
23,489
250,645
3,000
25,669

$
$

%

780
968
1,748

48
65
33

$

$

55,688
20,602
236,381
3,000
25,209

$
$

%

47
66
32

$

$

$
$

%

1,665
2,267
3,932

48
65
33

50,687
20,195
217,514
3,000

(2)
3
5
-

11
18
23
17

25,206

3

8

$

$

56,698
23,454
261,331
3,500

$
$

%

41
68
30

$

%

48,359
19,575
214,095
3,000

17
20
22
17

25,206

8

27,232

Footnotes:
(a) TSS is charged a credit reimbursement related to certain exposures managed within the IB credit portfolio on behalf of clients shared with TSS.
(b) Pretax margin represents income before income tax expense divided by total net revenue, which is a measure of pretax performance and another basis by which management evaluates its performance and that of its competitors.
(c) Loan balances include wholesale overdrafts, commercial card and trade finance loans.
(d) Liability balances include deposits and deposits swept to on-balance sheet liabilities such as commercial paper, federal funds purchased and securities sold under repurchase agreements.

Page 21

%

TREASURY & SECURITIES SERVICES
TSS firmwide metrics include revenue recorded in the CB, Regional Banking and Asset Management ("AM") lines of business and excludes FX revenue recorded in the IB for TSS-related FX activity. In order to capture the
firmwide impact of Treasury Services ("TS") and TSS products and revenue, management reviews firmwide metrics such as liability balances, revenue and overhead ratios in assessing financial performance for TSS.
Firmwide metrics are necessary in order to understand the aggregate TSS business.
QUARTERLY TRENDS
2Q08

1Q08

TSS FIRMWIDE DISCLOSURES
Treasury Services revenue - reported
Treasury Services revenue reported in Commercial Banking
Treasury Services revenue reported in other lines of business
Treasury Services firmwide revenue (a)
Worldwide Securities Services revenue
Treasury & Securities Services firmwide revenue (a)

$

Treasury Services firmwide liability balances (average) (b)
Treasury & Securities Services firmwide liability balances (average) (b)

$ 230,689
367,670

$

TSS FIRMWIDE FINANCIAL RATIOS
Treasury Services firmwide overhead ratio (c)
Treasury & Securities Services firmwide overhead ratio (c)
FIRMWIDE BUSINESS METRICS
Assets under custody (in billions)
Number of:
US$ ACH transactions originated (in millions)
Total US$ clearing volume (in thousands)
International electronic funds transfer volume (in thousands) (d)
Wholesale check volume (in millions)
Wholesale cards issued (in thousands) (e)

852
630
72
1,554
1,167
2,721

54
58

$

15,476

993
29,063
41,432
618
19,917

$

$
$

%

4Q07

813
616
69
1,498
1,100
2,598

$

221,716
353,845

55
58

$

$

15,690

1,004
28,056
40,039
623
19,122

$

%

3Q07

824
631
75
1,530
1,106
2,636

$

$

218,416
347,361

53
57

$

YEAR-TO-DATE

15,946

984
28,386
42,723
656
18,722

$

%

2Q07

780
594
70
1,444
968
2,412

$

$

201,671
324,462

54
59

$

2Q08 Change
1Q08
2Q07

15,614

943
28,031
41,415
731
18,108

$

%

720
569
65
1,354
1,021
2,375

5
2
4
4
6
5

189,214
301,701

4
4

59
60

$

%

2008
18
11
11
15
14
15
22
22

%

$

$
$

%

1,665
1,246
141
3,052
2,267
5,319

(1)

2

972
27,779
42,068
767
17,535

(1)
4
3
(1)
4

2
5
(2)
(19)
14

$

$

15,476

1,997
57,119
81,471
1,241
19,917

1,409
1,125
125
2,659
1,858
4,517

18
11
13
15
22
18

$ 187,930
297,072

20
21

$

226,203
360,758

54
58

15,203

2008 Change
2007

2007

%

59
61

$

%

15,203

2

1,943
54,619
84,467
1,538
17,535

3
5
(4)
(19)
14

Footnotes:
(a) TSS firmwide FX revenue, which includes FX revenue recorded in TSS and FX revenue associated with TSS customers who are FX customers of the IB, was $222 million, $191 million, $157 million, $144 million and $139 million for the quarters
ended June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively, and $413 million and $251 million for year-to-date 2008 and 2007, respectively. This is not included in the TS and TSS firmwide revenue.
(b) Firmwide liability balances include TS' liability balances recorded in the Commercial Bank line of business.
(c) Overhead ratios have been calculated based upon firmwide revenue and TSS and TS expense, respectively, including those allocated to certain other lines of business. FX revenue and expense recorded in the IB for TSS-related FX activity are not
included in this ratio.
(d) International electronic funds transfer includes non-US$ ACH and clearing volume.
(e) Wholesale cards issued include domestic commercial card, stored value card, prepaid card, and government electronic benefit card products.

Page 22

%

ASSET MANAGEMENT
(in millions, except ratio, ranking and headcount data)
QUARTERLY TRENDS
2Q08
INCOME STATEMENT
REVENUE
All other income
Noninterest revenue
Net interest income
TOTAL NET REVENUE

$


REVENUE BY CLIENT SEGMENT
Private Bank
Retail
Institutional
Private Client Services
Bear Stearns Brokerage
Total net revenue

1,573
130
1,703
361
2,064

$

4Q07

1,531
59
1,590
311
1,901

17

$
$

$

FINANCIAL RATIOS
ROE
Overhead ratio
Pretax margin ratio (a)

825
477
21
1,323

647
252
395

$

765
490
472
299
38
2,064
31
68
31

BUSINESS METRICS
Number of:
Client advisors
Retirement planning services participants
Bear Stearns brokers

$

16

886
494
20
1,400

NONINTEREST EXPENSE
Income tax expense
NET INCOME

1Q08

$

$
%

1,717
1,505,000
326

1,901
159
2,060
329
2,389

$

$
$

$
%

1,744
1,519,000
-

1,760
152
1,912
293
2,205

$

$

713
640
754
282
2,389

$

$
%

1,729
1,501,000
-

3
120
7
16
9
6

$

686
639
603
277
2,205

$

$
%

1,680
1,495,000
-

(6) %
(25)
(8)
23
(3)

$

2008 Change
2007

2007

3,104
189
3,293
672
3,965

$

3,160
343
3,503
538
4,041

(2) %
(45)
(6)
25
(2)

33

1
8
3

1,711
971
41
2,723

1,643
907
40
2,590

4
7
2
5

(18)
(16)
(20)

1,209
458
751

1,471
553
918

(18)
(17)
(18)

17
5
(4)
3
NM
9

646
602
617
272
2,137

NM

15
22
11

793
300
493

53
63
37

%

2008

7
4
(5)
6

879
456
20
1,355

836
315
521

52
62
38

1,671
173
1,844
293
2,137
(11)

848
498
20
1,366

831
304
527

52
65
35

2Q07

3

1,030
510
19
1,559

655
466
490
290
1,901
29
70
30

3Q07

(1)

562
206
356

YEAR-TO-DATE
2Q08 Change
1Q08
2Q07

18
(19)
(24)
10
NM
(3)

1,206
1,129
1,168
538
4,041

18
(15)
(18)
9
NM
(2)

$

1,420
956
962
589
38
3,965

%

1,582
1,477,000
-

30
69
30

(2)
(1)
NM

9
2
NM

(20)

$

%

49
64
36

1,717
1,505,000
326

NM

%

1,582
1,477,000
-

9
2
NM

% of customer assets in 4 & 5 Star Funds (b)

40

%

49

%

55

%

55

%

65

%

(18)

(38)

40

%

65

%

(38)

% of AUM in 1st and 2nd quartiles: (c)
1 year
3 years
5 years

51
70
76

%
%
%

52
73
75

%
%
%

57
75
76

%
%
%

47
73
76

%
%
%

65
77
76

%
%
%

(2)
(4)
1

(22)
(9)
-

51
70
76

%
%
%

65
77
76

%
%
%

(22)
(9)
-

51,710
28,695
55,981
3,750

8
7
3
1

26
37
25
35

14,108

6

12

Total assets
Loans (d)
Deposits
Equity

$

Headcount
Nonperforming loans
Net charge-off (recovery) rate
Allowance for loan losses to average loans
Allowance for loan losses to nonperforming loans

65,015
39,264
69,975
5,066

$

15,840
$

$

14,955

2
68
147
5
0.02
0.37
216
0.17

60,286
36,628
68,184
5,000

$

%

(2)
11
130
6
(0.02) %
0.35
1,182
0.03

55,989
32,627
64,630
4,000

$

14,799
$

$

14,510

2
12
112
7
0.02
0.34
933
0.04

53,879
30,928
59,907
4,000

$

%

(5)
28
115
6
(0.06) %
0.37
411
0.09

$

(5)
21
105
7
(0.07) %
0.37
500
0.07

NM
NM
13
(17)

NM
224
40
(29)

$

62,651
37,946
69,079
5,033

$

$

-

$

68
147
5
0.39
216
0.18

%

28
40
25
34

14,108

15,840

48,779
27,176
55,402
3,750

12

(5)
21
105
7

NM
224
40
(29)

(0.04) %
0.39
500
0.08

(a) Pretax margin represents income before income tax expense divided by total net revenue, which is a measure of pretax performance and another basis by which management evaluates its performance and that of its competitors.
(b) Derived from the following rating services: Morningstar for the United States; Micropal for the United Kingdom, Luxembourg, Hong Kong and Taiwan; and Nomura for Japan.
(c) Derived from the following rating services: Lipper for the United States and Taiwan; Micropal for the United Kingdom, Luxembourg and Hong Kong; and Nomura for Japan.
(d) Reflects the transfer in 2007 of held-for-investment prime mortgage loans from AM to Corporate within the Corporate/Private Equity segment.

Page 23

ASSET MANAGEMENT
(in billions)

Jun 30
2008
Assets by asset class
Liquidity
Fixed income
Equities & balanced
Alternatives
TOTAL ASSETS UNDER MANAGEMENT
Custody / brokerage / administration / deposits
TOTAL ASSETS UNDER SUPERVISION

Assets by client segment
Institutional
Private Bank
Retail
Institutional
Private Bank
Retail

Assets by geographic region
U.S. / Canada
International
U.S. / Canada
International

Mutual fund assets by asset class
Liquidity
Fixed income
Equities
TOTAL MUTUAL FUND ASSETS

$

$

$

$
$

$

$
$
$
$

$

$

478
199
378
130
1,185
426
1,611

645
196
276
60
8
1,185

Mar 31
2008
$

$

$

$

646
442
357
106
60
1,611

$

771
414
1,185

$

1,093
518
1,611

416
47
179
642

$

$
$
$

$

$

471
200
390
126
1,187
382
1,569

652
196
279
60
1,187

Dec 31
2007
$

$

$

$

652
441
366
110
1,569

$

773
414
1,187

$

1,063
506
1,569

405
45
186
636

$

$
$
$

$

$

400
200
472
121
1,193
379
1,572

632
201
300
60
1,193

Sep 30
2007
$

$

$

$

633
433
394
112
1,572

$

760
433
1,193

$

1,032
540
1,572

339
46
224
609

$

$
$
$

$

$

368
195
481
119
1,163
376
1,539

603
196
304
60
1,163
604
423
399
113
1,539

745
418
1,163
1,022
517
1,539

308
46
235
589

Jun 30
2007
$

$

$

$
$

$

$
$
$
$

$

$

333
190
467
119
1,109
363
1,472

Jun 30, 2008
Change
Mar 31
Jun 30
2008
2007
1 %
(1)
(3)
3
12
3

44 %
5
(19)
9
7
17
9

565
185
300
59
1,109

(1)
(1)
NM
-

14
6
(8)
2
NM
7

566
402
393
111
1,472

(1)
(2)
(4)
NM
3

14
10
(9)
(5)
NM
9

700
409
1,109

-

10
1
7

971
501
1,472

3
2
3

13
3
9

3
4
(4)
1

55
(4)
(24)
16

268
49
235
552

Page 24

ASSET MANAGEMENT
(in billions)
QUARTERLY TRENDS
2Q08
ASSETS UNDER SUPERVISION (continued)
Assets under management rollforward
Beginning balance
Net asset flows:
Liquidity
Fixed income
Equities, balanced & alternative
Market / performance / other impacts (a)
Assets under supervision rollforward
Beginning balance
Net asset flows
Market / performance / other impacts (a)

$

1,187

$

1
(1)
(3)
1
1,185

$

$

1,569
(5)
47
1,611

1Q08

$

1,193

$

68
(21)
(53)
1,187

$

$

1,572
52
(55)
1,569

YEAR-TO-DATE

4Q07

$

1,163

$

26
3
4
(3)
1,193

$

$

1,539
37
(4)
1,572

3Q07

$

1,109

$

33
(2)
2
21
1,163

$

$

1,472
41
26
1,539

2Q07

$

1,053

$

12
6
12
26
1,109

$

$

1,395
38
39
1,472

2008

$

1,193

$

69
(1)
(24)
(52)
1,185

$

$

1,572
47
(8)
1,611

2007

$

1,013

$

19
8
22
47
1,109

$

$

1,347
65
60
1,472

(a) Second quarter 2008 reflects $15 billion for assets under management and $68 billion for assets under supervision from the Bear Stearns acquisition on May 30, 2008.

Page 25

CORPORATE/PRIVATE EQUITY
(in millions, except headcount data)
QUARTERLY TRENDS
2Q08
INCOME STATEMENT
REVENUE
Securities gains (losses) (a)
All other income (b)
Noninterest revenue
Net interest income (expense)
TOTAL NET REVENUE

$


MEMO:
TOTAL NET REVENUE
Private equity
Corporate
TOTAL NET REVENUE
NET INCOME (LOSS)
Private equity
Corporate
Merger related items (d)
TOTAL NET INCOME (LOSS)
Headcount

$

290

NONINTEREST EXPENSE
Noncompensation expense (c)
Merger costs
Subtotal
Net expense allocated to other businesses
NET INCOME (LOSS)

(97)
656
(378)
181
48
229

1Q08

$
$
$

$

(456)
(34)
(422)

197
32
229
99
19
(540)
(422)
22,317

$

196

611
699
155
1,465
(1,070)
395

$

5
42
1,639
1,686
(286)
1,400

4Q07

$

$
$
$

$

1,704
677
1,027

163
1,237
1,400
57
970
1,027
21,769

3Q07

773
146
213
1,132
(218)
914

$

14

639
(82)
557
(1,057)
(500)

$
$
$

$

239
(10)
249

688
226
914
356
(93)
(14)
249
22,512

1,082
128
70
1,280
(279)
1,001

2Q07

$

(31)

714
982
22
1,718
(1,057)
661

$

YEAR-TO-DATE

$
$
$

$

787
274
513

733
268
1,001
409
142
(38)
513
22,864

1,372
(227)
90
1,235
(173)
1,062
3

569
674
61
1,304
(1,059)
245

$

2Q08 Change
1Q08
2Q07

$
$
$

$

NM %
NM
NM
(85)
NM
(78)

48
(4)
NM
NM
163
(1)
NM

(12)
(15)
142
(7)
(21)

557
175
382

NM
NM
NM

NM
NM
NM

1,293
(231)
1,062

21
(97)
(84)

(85)
NM
(78)

702
(280)
(40)
382

74
(98)
NM
NM

(86)
NM
NM
NM

$

NM

695
818
64
1,577
(1,075)
502

$

NM %
NM
NM
(89)
NM
(84)

2008

23,532

3

(5)

(92)
698
1,261
1,867
(238)
1,629

$

486

$
$
$

$

1,248
643
605

360
1,269
1,629
156
989
(540)
605
22,317

2,697
(235)
158
2,620
(290)
2,330
6

1,250
617
155
2,022
(2,127)
(105)

$

2008 Change
2007

2007

NM %
NM
NM
(29)
18
(30)
NM

1,471
1,374
126
2,971
(2,115)
856

$

$
$
$

$

(15)
(55)
23
(32)
(1)
NM

1,468
455
1,013

(15)
41
(40)

2,546
(216)
2,330

(86)
NM
(30)

1,400
(309)
(78)
1,013

(89)
NM
NM
(40)

23,532

(5)

(a) Included gain on sale of MasterCard shares in the second quarter of 2008.
(b) Included proceeds from the sale of Visa shares in its initial public offering in the first quarter of 2008.
(c) Included a release of credit card litigation reserves in the first quarter of 2008.
(d) The second quarter of 2008 reflects items related to the Bear Stearns merger, which include the Bear Stearns equity earnings, merger costs, Bear Stearns asset management liquidation costs and
Bear Stearns private client services broker retention expense. Prior periods represent costs related to the Bank One and Bank of New York transactions.

Page 26

CORPORATE/PRIVATE EQUITY
QUARTERLY TRENDS
2Q08

1Q08

4Q07

YEAR-TO-DATE

3Q07

2Q07

2Q08 Change
1Q08
2Q07

2008

2007

2008 Change
2007

SUPPLEMENTAL
TREASURY
Securities gains (losses) (a)
Investment securities portfolio (average)
Investment securities portfolio (ending)
Mortgage loans (average) (b)
Mortgage loans (ending) (b)
PRIVATE EQUITY
Private equity gains (losses)
Direct investments
Realized gains
Unrealized gains (losses) (c)
Total direct investments
Third-party fund investments
Total private equity gains (d)
Private equity portfolio information
Direct investments
Publicly-held securities
Carrying value
Cost
Quoted public value
Privately-held direct securities
Carrying value
Cost
Third-party fund investments
Carrying value
Cost

$

$

$

$

656
97,223
103,751
42,143
42,602

540
(326)
214
6
220

615
665
732

$

$

$

$

42
80,443
91,323
39,096
41,125

1,113
(881)
232
(43)
189

603
499
720

$

146
82,445
76,200
34,436
36,942

$

126
85,470
86,495
29,854
32,804

$

(227)
87,760
86,821
26,830
27,299

NM
21
14
8
4

$

100
569
669
43
712

$

504
227
731
35
766

$

985
290
1,275
53
1,328

(51)
63
(8)
NM
16

(45)
NM
(83)
(89)
(83)

465
367
600

2
33
2

32
81
22

$

$

390
288
536

$

$

409
291
560

$

$

%

NM
11
19
57
56

6,270
6,113

5,191
4,973

5,914
4,867

5,336
5,003

5,247
5,228

21
23

811
1,064

849
1,076

839
1,078

812
1,067

3
3

$

698
88,833
103,751
40,620
42,602

$

$

1,653
(1,207)
446
(37)
409

$

(235)
87,102
86,821
26,041
27,299

NM
2
19
56
56

$

1,708
811
2,519
87
2,606

(3)
NM
(82)
NM
(84)

$

%

19
17

838
1,094

%

3
3

Total private equity portfolio - Carrying value

$

7,723

$

6,605

$

7,153

$

6,584

$

6,524

17

18

Total private equity portfolio - Cost

$

7,872

$

6,536

$

6,231

$

6,372

$

6,662

20

18

(a) The second quarter of 2008 included a gain on the sale of MasterCard shares. All periods reflect repositioning of the Corporate investment securities portfolio and exclude gains/losses on securities
used to manage risk associated with MSRs.
(b) Held-for-investment prime mortgage loans were transferred from RFS and AM to the Corporate/Private Equity segment for risk management and reporting purposes. The transfers had no material
impact on the financial results of Corporate/Private Equity.
(c) Unrealized gains (losses) contains reversals of unrealized gains and losses that were recognized in prior periods and have now been realized.
(d) Included in principal transactions revenue in the Consolidated Statements of Income.

Page 27

CREDIT-RELATED INFORMATION
(in millions)

Jun 30
2008
CREDIT EXPOSURE
WHOLESALE (a)
Loans - U.S.
Loans - Non-U.S.
TOTAL WHOLESALE LOANS - REPORTED (b)

$

CONSUMER (c)
Home equity
Mortgage (includes RFS and Corporate/Private Equity)
Auto loans and leases
Credit card - reported
Other loans
TOTAL CONSUMER LOANS - REPORTED
TOTAL LOANS - REPORTED
Credit card - securitized
TOTAL LOANS - MANAGED
Receivables from customers (d)
TOTAL CREDIT-RELATED ASSETS
Wholesale lending-related commitments
TOTAL
Memo: Total by category
Total wholesale exposure (e)
Total consumer managed loans (f)
Total

137,236
92,123
229,359

Mar 31
2008

$

141,921
89,376
231,297

Dec 31
2007

$

133,253
79,823
213,076

Sep 30
2007

$

126,343
71,385
197,728

Jun 30
2007

$

Jun 30, 2008
Change
Mar 31
Jun 30
2008
2007

111,082
70,886
181,968

95,129
61,977
44,867
76,278
30,419
308,670

94,968
60,855
44,714
75,888
29,334
305,759

94,832
56,031
42,350
84,352
28,733
306,298

93,026
47,730
40,871
79,409
27,556
288,592

90,989
43,114
41,231
80,495
27,240
283,069

538,029
79,120
617,149
122,389
26,572
766,110
430,028
$ 1,196,138

$

537,056
75,062
612,118
99,110
711,228
438,392
1,149,620

519,374
72,701
592,075
77,136
669,211
446,652
1,115,863

486,320
69,643
555,963
64,592
620,555
468,145
1,088,700

465,037
67,506
532,543
59,038
591,581
435,718
1,027,299

$

$

(3) %
3
(1)

808,348
387,790
$ 1,196,138

$

$

768,799
380,821
1,149,620

$

590,439

$

$
$

736,864
378,999
1,115,863

$

571,394

$

$
$

730,465
358,235
1,088,700

$

548,663

$

$

2
1
4
1
5
1
23
NM
8
(2)
4

24
30
26

%

5
44
9
(5)
12
9
16
17
16
107
NM
30
(1)
16

$

676,724
350,575
1,027,299

5
2
4

19
11
16

$

532,134

-

11

Risk profile of wholesale credit exposure:
Investment-grade (g)

590,045

Noninvestment-grade: (g)
Noncriticized
Criticized performing
Criticized nonperforming
Total noninvestment-grade

159,216
11,607
903
171,726

147,771
9,570
742
158,083

134,983
6,267
571
141,821

155,172
5,605
414
161,191

127,818
4,964
252
133,034

8
21
22
9

25
134
258
29

Receivables from customers (d)
Total wholesale exposure

20,005
26,572
808,348

20,277
768,799

23,649
736,864

20,611
730,465

11,556
676,724

(1)
NM
5

73
NM
19

$

$

$

$

$

(a) Includes Investment Bank, Commercial Banking, Treasury & Securities Services and Asset Management.
(b) Includes loans held-for-sale & loans at fair value.
(c) Includes Retail Financial Services, Card Services and residential mortgage loans reported in the Corporate/Private Equity segment to be risk managed by the Chief Investment Office.
(d) Represents margin loans to brokerage customers included in accrued interest and accounts receivable on the Consolidated Balance Sheet.
(e) Represents total wholesale loans, derivative receivables, wholesale lending-related commitments and receivables from customers.
(f) Represents total consumer loans plus credit card securitizations, and excludes consumer lending-related commitments.
(g) Excludes loans held-for-sale & loans at fair value.
Note: The risk profile is based on JPMorgan Chase's internal risk ratings, which generally correspond to the following ratings as defined by Standard & Poor's / Moody's:
Investment-Grade: AAA / Aaa to BBB- / Baa3
Noninvestment-Grade: BB+ / Ba1 and below

Page 28

CREDIT-RELATED INFORMATION, CONTINUED

Jun 30
2008
NONPERFORMING ASSETS AND RATIOS
WHOLESALE LOANS (a)
Loans - U.S.
Loans - Non-U.S.
TOTAL WHOLESALE LOANS-REPORTED

$

Mar 31
2008

806
64
870

$

Dec 31
2007

761
20
781

$

Sep 30
2007

490
24
514

$

Jun 30, 2008
Change
Mar 31
Jun 30
2008
2007

Jun 30
2007

401
26
427

$

190
38
228

6
220
11

%

324
68
282

CONSUMER LOANS (b)
Home equity
Mortgage (includes RFS and Corporate/Private Equity)
Auto loans and leases
Other loans
TOTAL CONSUMER LOANS-REPORTED (c)

1,032
3,281
102
6
340
4,761

948
2,537
94
6
335
3,920

810
1,798
116
7
341
3,072

576
1,224
92
7
336
2,235

483
1,034
81
8
335
1,941

9
29
9
1
21

114
217
26
(25)
1
145

TOTAL LOANS REPORTED
Assets acquired in loan satisfactions
TOTAL NONPERFORMING ASSETS

5,631
80
880
6,591

4,701
31
711
5,443

3,586
29
622
4,237

2,662
34
485
3,181

2,169
30
387
2,586

20
158
24
21

160
167
127
155

12
16
13
NM
45
21

%

312
105
(25)
272
224
496
155

$

TOTAL NONPERFORMING LOANS TO TOTAL LOANS
NONPERFORMING ASSETS BY LOB
Investment Bank
Card Services
Commercial Banking
Asset Management
Corporate/Private Equity (d)
TOTAL

1.05

$

$

490
4,301
6
510
68
1,216
6,591

$
%

0.88

$

$

439
3,695
6
453
11
839
5,443

$
%

0.69

$

$

453
3,121
7
148
12
496
4,237

$
%

0.55

$

$

325
2,387
7
136
28
298
3,181

$
%

0.47

$

$

119
2,097
8
137
21
204
2,586

%

(a) Included nonperforming loans held-for-sale and loans at fair value of $51 million, $70 million, $50 million, $75 million and $25 million at June 30, 2008, March 31, 2008, December 31, 2007,
September 30, 2007, and June 30, 2007, respectively. Excluded purchased held-for-sale wholesale loans.
(b) There were no nonperforming loans held-for-sale at June 30, 2008, March 31, 2008, December 31, 2007, and September 30, 2007, while there were $215 million at June 30, 2007.
(c) Nonperforming loans and assets excluded (1) loans eligible for repurchase as well as loans repurchased from GNMA pools that are insured by U.S. government agencies of $1.9 billion,
$1.8 billion, $1.5 billion, $1.3 billion and $1.2 billion at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively, and (2) education loans
that are 90 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program of $371 million, $252 million, $279 million,
$241 million and $200 million at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively. These amounts for GNMA and education loans
are excluded, as reimbursement is proceeding normally.
(d) Predominantly relates to held-for-investment prime mortgage loans transferred from RFS and AM to the Corporate/Private Equity segment.

Page 29

QUARTERLY TRENDS
2Q08

1Q08

4Q07

YEAR-TO-DATE

3Q07

2Q08 Change
1Q08
2Q07

2Q07

2008

2008 Change
2007

2007

GROSS CHARGE-OFFS
Wholesale loans
Consumer (includes RFS and
Corporate/Private Equity)
Total loans - reported
Total loans - managed

$

82

$

130

$

54

$

101

$

13

(37) %

1,079
1,209
2,370
949
3,319

880
1,144
2,154
791
2,945

582
1,000
1,636
716
2,352

403
911
1,415
679
2,094

321
877
1,211
704
1,915

23
6
10
20
13

41

38

29

19

42

8

54
145
240
119
359

55
155
248
110
358

47
131
207
97
304

49
126
194
101
295

48
136
226
114
340

41

92

25

82

(29)

1,025
1,064
2,130
830
2,960

825
989
1,906
681
2,587

535
869
1,429
619
2,048

354
785
1,221
578
1,799

NM

%

$

236
38
96
35
73

212

$

30

NM %

1,959
2,353
4,524
1,740
6,264

562
1,724
2,316
1,406
3,722

249
36
95
24
68

(2)

79

65

22

(2)
(6)
(3)
8
-

13
7
6
4
6

109
300
488
229
717

101
262
428
223
651

8
15
14
3
10

(55)

NM

133

(35)

NM

24
8
12
22
14

275
44
116
41
88

1,850
2,053
4,036
1,511
5,547

RECOVERIES
Wholesale loans
NET CHARGE-OFFS
Wholesale loans

$

$

$

$

$

273
741
985
590
1,575

$

$

461
1,462
1,888
1,183
3,071

NET CHARGE-OFF RATES - ANNUALIZED
Wholesale loans (a)
Corporate/Private Equity) (b)
Total loans - reported (a) (b)
Total loans - managed (a) (b)

1.81
5.66
1.67
4.32
2.02

1.50
5.01
1.53
3.70
1.81

1.01
4.36
1.19
3.38
1.48

0.70
3.89
1.07
3.34
1.37

0.57
3.76
0.90
3.46
1.25

1.66
5.32
1.60
4.02
1.91

0.49
3.66
0.88
3.51
1.23

Memo: Credit card - managed

4.98

4.37

3.89

3.64

3.62

4.68

301
40
114
28
81

3.59

0.08

%

0.18

%

0.05

%

0.19

%

(0.07) %

0.13 %

(0.04) %

(a) Average wholesale loans held-for-sale and loans at fair value were $20.8 billion, $20.1 billion, $26.8 billion, $17.8 billion and $15.5 billion for the quarters ended June 30, 2008, March 31, 2008,
December 31, 2007, September 30, 2007, and June 30, 2007, respectively, and $20.5 billion and $14.9 billion for year-to-date 2008 and 2007, respectively. These amounts were excluded when calculating
the net charge-off rates.
(b) Average consumer (excluding card) loans held-for-sale and loans at fair value were $3.6 billion, $4.4 billion, $4.0 billion, $5.4 billion and $11.7 billion for the quarters ended June 30, 2008, March 31, 2008,
December 31, 2007, September 30, 2007, and June 30, 2007, respectively, and $4.0 billion and $16.7 billion for year-to-date 2008 and 2007, respectively. These amounts were excluded when calculating
the net charge-off rates.

Page 30

QUARTERLY TRENDS
2Q08
SUMMARY OF CHANGES IN THE ALLOWANCE FOR LOAN LOSSES
Beginning balance
Net charge-offs
Provision for loan losses
Other
Ending balance
SUMMARY OF CHANGES IN THE ALLOWANCE FOR
LENDING-RELATED COMMITMENTS
Beginning balance
Provision for lending-related commitments
Ending balance
ALLOWANCE COMPONENTS AND RATIOS
ALLOWANCE FOR LOAN LOSSES
Wholesale
Asset specific
Formula - based
Total wholesale

$

$

$
$

$

Consumer
Asset specific
Formula - based
Total consumer
Total allowance for loan losses

11,746
(2,130)
3,624
6
13,246

$

855
(169)
686

$

$

$

174
4,295
4,469

$

4Q07

9,234
(1,906)
4,419
(1)
11,746

$

$

850
5
855

$

146
3,691
3,837

$

$

3Q07

8,113
(1,429)
2,550
9,234

$

858
(8)
850

$

$

$

108
3,046
3,154

$

2Q07

7,633
(1,221)
1,693
8
8,113

$

$

766
92
858

$

53
2,810
2,863

$

$

7,300
(985)
1,316
2
7,633

27 %
(12)
(18)
NM
13

553
213
766

61 %
(116)
175
200
74

1
NM
(20)

55
NM
(10)

52
2,650
2,702

19
16
16

$

75
7,834
7,909

80
6,000
6,080

70
5,180
5,250

81
4,850
4,931

(19)
11
11

$

$

$

13,246
686
13,932

11,746
855
12,601

9,234
850
10,084

8,113
858
8,971

7,633
766
8,399

13
(20)
11

9,234
(4,036)
8,043
5
13,246

$

850
(164)
686

$

$

2008 Change
2007

7,279
(1,888)
2,295
(53)
7,633

27 %
(114)
250
NM
74

$

$

524
242
766

62
NM
(10)

74
(10)
66

28
6
9
3
54
13
104
13

$

2007

(25)
80
78

134
153
20
19
344
40
NM
74

2.13
2.86
2.57
237
$

2008

235
62
65

61
8,716
8,777

Wholesale allowance for loan losses to total wholesale loans (a)
Consumer allowance for loan losses to total consumer loans (b)
Allowance for loan losses to total loans (a) (b)
Allowance for loan losses to total nonperforming loans (c)
ALLOWANCE FOR LOAN LOSSES BY LOB
Investment Bank
Card Services
Commercial Banking
Asset Management
Total

1Q08

YEAR-TO-DATE
2Q08 Change
1Q08
2Q07

2,429
4,475
3,705
1,843
40
147
607
13,246

$
%

1.82
2.63
2.29
254
$

$

1,891
4,208
3,404
1,790
26
130
297
11,746

$
%

1.67
2.01
1.88
261
$

$

1,329
2,634
3,407
1,695
18
112
39
9,234

$
%

1.62
1.84
1.76
314
$

$

1,112
2,105
3,107
1,623
13
115
38
8,113

$
%

1.59
1.79
1.71
396
$

$

1,037
1,772
3,096
1,551
9
105
63
7,633

%

(a) Wholesale loans held-for-sale and loans at fair value were $20.0 billion, $20.3 billion, $23.6 billion, $20.6 billion and $11.6 billion at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007,
respectively. These amounts were excluded when calculating the allowance coverage ratios.
(b) Consumer loans held-for-sale were $2.2 billion, $4.5 billion, $4.0 billion, $3.9 billion and $8.3 billion at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively. These amounts
were excluded when calculating the allowance coverage ratios.
(c) Nonperforming loans held-for-sale and loans at fair value were $51 million, $70 million, $50 million, $75 million and $240 million at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007,
respectively. These amounts were excluded when calculating the allowance coverage ratios.

Page 31

(in millions)
QUARTERLY TRENDS
2Q08
PROVISION FOR CREDIT LOSSES
LOANS
Investment Bank
Commercial Banking
Asset Management
Total wholesale
Card Services - reported
Corporate/Private Equity (b)
Total consumer
Total provision for loan losses
LENDING-RELATED COMMITMENTS
Investment Bank
Commercial Banking
Asset Management
Total wholesale
Total consumer
Total provision for lending-related commitments
TOTAL PROVISION FOR CREDIT LOSSES
Investment Bank
Commercial Banking
Asset Management
Total wholesale
Corporate/Private Equity (b)
Total consumer
Total provision for credit losses
Card Services - securitized
Managed provision for credit losses

$

$

$

$

$

$

538
77
7
17
36
675
1,331
1,364
254
2,949
3,624

(140)
(30)
(170)
1
1
(169)

398
47
7
17
36
505
1,332
1,364
254
2,950
3,455
830
4,285

1Q08

$

$

$

$

$

$

571
143
11
17
742
2,492
989
196
3,677
4,419

47
(42)
1
(1)
5
5

618
101
12
16
747
2,492
989
196
3,677
4,424
681
5,105

4Q07

$

$

3Q07

208
105
5
(2)
316
1,051
1,169
14
2,234
2,550

$

(8)

$

$

$

(1)
1
(8)
$

(8)

$

$

200
105
4
(1)
308
1,051
1,169
14
2,234
2,542
619
3,161

$

$

YEAR-TO-DATE

$

146
98
3
4
251
688
785
(31)
1,442
1,693

81
14
6
(1)
100
(8)
(8)
92

227
112
9
3
351
680
785
(31)
1,434
1,785
578
2,363

2Q07

$

$

$

$

$

$

(13)
10
(1)
(13)
(17)
589
741
3
1,333
1,316

177
35
1
2
215
(2)
(2)
213

164
45
(11)
198
587
741
3
1,331
1,529
590
2,119

2Q08 Change
1Q08
2Q07

(6) %
(46)
(36)
NM
(9)
(47)
38
30
(20)
(18)

NM
NM
NM
NM
NM
NM
126
84
NM
121
175

NM
29
NM
NM
NM
NM
NM
NM

NM
NM
NM
NM
NM
NM
NM
NM

(36)
(53)
(42)
6
NM
(32)
(47)
38
30
(20)
(22)
22
(16)

143
4
NM
NM
NM
155
127
84
NM
122
126
41
102

2008

%

$

$

$

$

$

$

1,109
220
18
34
36
1,417
3,823
2,353
450
6,626
8,043

(93)
(72)
1
(1)
(165)
1
1
(164)

1,016
148
19
33
36
1,252
3,824
2,353
450
6,627
7,879
1,511
9,390

2007

$

$

$

$

$

$

22
27
3
(21)
31
881
1,377
6
2,264
2,295

205
35
3
1
244
(2)
(2)
242

227
62
6
(20)
275
879
1,377
6
2,262
2,537
1,183
3,720

2008 Change
2007

NM
NM
500
NM
NM
NM
334
71
NM
193
250

NM
NM
(67)
NM
NM
NM
NM
NM

348
139
217
NM
NM
355
335
71
NM
193
211
28
152

(a) Represent provision expense related to loans acquired in the merger with Bear Stearns.
(b) Includes amounts related to held-for-investment prime mortgages transferred from RFS and AM to the Corporate/Private Equity segment during 2007.

Page 32

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