New York, October 13, 2010 - JPMorgan Chase & Co. (NYSE: JPM) today reported thirdquarter 2010 net income of $4.4 billion, an increase of 23% compared with $3.6 billion in the third quarter of 2009. Earnings per share were $1.01, compared with $0.82 in the third quarter of 2009.

Jamie Dimon, Chairman and Chief Executive Officer, commented: "Our third-quarter net income of $4.4 billion was the result of the good underlying performance of our businesses. The Investment Bank delivered solid earnings while maintaining its number one ranking in Global Investment Banking Fees. Retail Financial Services reported strong mortgage loan production. Card Services increased sales volume by 7% compared with the prior year, and positive credit trends assisted in delivering improved results. Commercial Banking reported record revenue, while Asset Management had strong net inflows of $38 billion this quarter."

Dimon added: "We are pleased to report a continued overall decline in credit costs, although our mortgage and credit card portfolios continued to bear very high net charge-offs. Our mortgage delinquency trends remained relatively flat compared with the prior quarter, and we expect mortgage credit losses to remain at these high levels for the next several quarters. If economic conditions worsen, mortgage credit losses could trend higher. With respect to our credit card portfolio, delinquencies and net charge-offs continued to improve, and we reduced loan loss reserves by $1.5 billion this quarter as estimated losses declined. We expect credit card net chargeoffs to continue to improve next quarter."

Commenting on the Firm's balance sheet, Dimon said: "Our fortress balance sheet continued to strengthen, ending the quarter with a strong Tier 1 Common ratio of 9.5%. We believe that the quality of our balance sheet will position us well for the eventual implementation of new capital standards being developed by bank regulators. Our total firmwide credit reserves declined to $35.0 billion, resulting in a firmwide coverage ratio of 5.1% of total loans1."

Dimon further remarked: "We are firmly committed to doing all we can to support the ongoing economic recovery. We are providing capital, financing and liquidity to our clients in the U.S. and around the world. So far this year, we have loaned or raised capital for our clients of more than $1.0 trillion, and our small-business originations were up 37%. In addition, we are on track to hire over 10,000 people in the U.S. this year."

"Regarding regulatory reform, we will work with our regulators as they proceed with the extensive rulemaking required to implement financial reforms. We will continue to devote substantial resources to ensure regulatory reforms are implemented in a way that preserves the value we deliver to our clients."

Looking forward, Dimon concluded: "The Firm has excellent client franchises with leading positions in their respective markets, a strong balance sheet, and plenty of capital. With these fundamental strengths, we will continue to serve our clients and build our franchises for many years to come while providing good returns to our shareholders."

INVESTMENT BANK (IB)
Net income was $1.3 billion, down 33% compared with the prior year and 7% compared with the prior quarter. The decrease from the prior year reflected lower revenue, partially offset by lower noninterest expense and a benefit from the provision for credit losses; the decrease from the prior quarter reflected lower revenue and a lower benefit from the provision for credit losses, largely offset by lower noninterest expense.

Net revenue was $5.4 billion, compared with $7.5 billion in the prior year and $6.3 billion in the prior quarter. Investment banking fees were $1.5 billion, down 9% from the prior year and up 7% from the prior quarter; these consisted of equity underwriting fees of $333 million (down 51% from the prior year and 6% from the prior quarter), debt underwriting fees of $784 million (up 32% from the prior year and 13% from the prior quarter) and advisory fees of $385 million (flat compared with the prior year and up 8% from the prior quarter). Fixed Income Markets revenuewas $3.1 billion, compared with $5.0 billion in the prior year and $3.6 billion in the prior quarter.

The decrease from the prior year largely reflected lower results in credit and rates markets; the decrease from the prior quarter primarily reflected losses of $149 million from the tightening of the Firm's credit spreads on certain structured liabilities, compared with gains of $397 million in the prior quarter. Equity Markets revenue was $1.1 billion, compared with $941 million in the prior year and $1.0 billion in the prior quarter, reflecting solid client revenue. The current period also included losses of $96 million from the tightening of the Firm's credit spreads on certain structured liabilities, compared with gains of $191 million in the prior quarter. Credit Portfolio revenue was a loss of $407 million, primarily reflecting the negative net impact of credit spreads on derivative assets and liabilities, partially offset by net interest income and fees on retained loans.

The provision for credit losses was a benefit of $142 million, compared with an expense of $379 million in the prior year. The current-quarter provision reflected a reduction in the allowance for loan losses, largely related to net repayments and loan sales. The allowance for loan losses to endof- period loans retained was 3.85%, compared with 8.44% in the prior year. The decline in the allowance ratio was due largely to the consolidation of asset-backed commercial paper conduits in accordance with new accounting guidance, effective January 1, 2010; excluding these balances, the current-quarter allowance coverage ratio was 6.20%. Net charge-offs were $33 million, compared with $750 million in the prior year. Nonperforming loans were $2.4 billion, down by $2.5 billion from the prior year and up by $126 million from the prior quarter.

Noninterest expense was $3.7 billion, down 13% from the prior year and 18% from the prior quarter, primarily due to lower compensation expense and the absence of the U.K. bonus tax recorded in the prior quarter.

RETAIL FINANCIAL SERVICES (RFS)
Net income was $907 million, compared with $7 million in the prior year.

Net revenue was $7.6 billion, a decrease of $572 million, or 7%, compared with the prior year.

Net interest income was $4.9 billion, down by $296 million, or 6%, reflecting the impact of lower loan balances and narrower loan spreads, partially offset by a shift to wider-spread deposit products.

Noninterest revenue was $2.8 billion, down by $276 million, or 9%, as lower deposit-related fees and mortgage fees and related income were partially offset by higher debit card income and auto operating lease income.

The provision for credit losses was $1.5 billion, a decrease of $2.4 billion from the prior year and

$167 million from the prior quarter. While delinquency trends and net charge-offs improved

compared with the prior year, the current-quarter provision continued to reflect elevated losses for the mortgage and home equity portfolios. Home equity net charge-offs were $730 million (3.10% net charge-off rate1), compared with $1.1 billion (4.25% net charge-off rate1) in the prior year.

Subprime mortgage net charge-offs were $206 million (6.64% net charge-off rate1), compared with $422 million (12.31% net charge-off rate1). Prime mortgage net charge-offs were $265 million (1.84% net charge-off rate1), compared with $525 million (3.45% net charge-off rate1). There was no change to the allowance for loan losses in the quarter, while $1.4 billion was added in the prior year. The allowance for loan losses to ending loans retained, excluding purchased credit-impaired loans, was 5.36%, compared with 4.63% in the prior year and 5.26% in the prior quarter.

Retail Banking reported net income of $848 million, a decrease of $195 million, or 19%, compared with the prior year.

Net revenue was $4.4 billion, down 3% compared with the prior year. The decrease was driven by declining deposit-related fees, largely offset by a shift to wider-spread deposit products and higher debit card income.

The provision for credit losses was $175 million, down $33 million compared with the prior year.

Retail Banking net charge-offs were $175 million (4.18% net charge-off rate), compared with $208 million (4.66% net charge-off rate) in the prior year.

Noninterest expense was $2.8 billion, up 5% compared with the prior year, resulting from sales force increases in Business Banking and bank branches.

Mortgage Banking & Other Consumer Lending reported net income of $207 million, a decrease of $205 million, or 50%, from the prior year.

Net revenue was $1.9 billion, down by $150 million, or 7%, from the prior year. Mortgage Banking net revenue was $1.1 billion, down by $219 million. Other Consumer Lending net revenue, comprising Auto and Student Lending, was $832 million, up by $69 million, predominantly as a result of higher auto loan and lease balances.

Mortgage Banking net revenue included $232 million of net interest income and $821 million of noninterest revenue, comprising production, servicing and other noninterest revenue. Total production revenue was a net loss of $231 million, a decrease of $161 million compared with the prior year. Production revenue, excluding repurchase losses, was $1.2 billion, an increase of $838 million, reflecting higher mortgage origination volumes and wider margins. Total production revenue was reduced by $1.5 billion of repurchase losses, compared with $465 million in the prior year, and included a $1.0 billion increase in the repurchase reserve during the current quarter, reflecting higher estimated future repurchase demands. Net mortgage servicing revenue, which comprises operating revenue and MSR risk management, was $936 million, a decrease of $7 million. Operating revenue was $549 million, an increase of $41 million, reflecting an improvement in other changes in MSR asset fair value driven by lower runoff of the MSR asset due to time decay, largely offset by lower loan servicing revenue as a result of lower third-party loans serviced. MSR risk management revenue was $387 million, a decrease of $48 million. The provision for credit losses, predominantly related to the student and auto loan portfolios, was $176 million, compared with $222 million in the prior year. Student loan and other net charge-offs were $82 million (2.21% net charge-off rate), compared with $60 million (1.66% net charge-off rate) in the prior year. Auto loan net charge-offs were $67 million (0.56% net charge-off rate), compared with $159 million (1.46% net charge-off rate) in the prior year.

Noninterest expense was $1.3 billion, up by $209 million, or 18%, from the prior year, driven by an increase in default-related expense for the serviced portfolio.

Real Estate Portfolios reported a net loss of $148 million, compared with a net loss of $1.4 billion in the prior year. The improvement was driven by a lower provision for credit losses, partially offset by lower net interest income.

Net revenue was $1.3 billion, down by $282 million, or 18%, from the prior year. The decrease was driven by a decline in net interest income as a result of lower loan balances, reflecting net portfolio runoff, and a decline in mortgage loan yields.

The provision for credit losses was $1.2 billion, compared with $3.6 billion in the prior year. The current-quarter provision reflected improved delinquency trends and a $902 million reduction in net charge-offs. Additionally, the prior-year provision included an addition to the allowance for loan losses of $1.4 billion in the home equity and mortgage loan portfolios. (For further detail, see RFS discussion of the provision for credit losses.)

Noninterest expense was $390 million, down by $21 million, or 5%, from the prior year.

CARD SERVICES (CS)
Net income was $735 million, compared with a net loss of $700 million in the prior year. The improved results were driven by a lower provision for credit losses, partially offset by lower net revenue.

End-of-period loans were $136.4 billion, a decrease of $28.8 billion, or 17%, from the prior year and $6.6 billion, or 5%, from the prior quarter. Average loans were $140.1 billion, a decrease of $29.1 billion, or 17%, from the prior year and $6.2 billion, or 4%, from the prior quarter. The declines in both end-of-period and average loans were consistent with expected portfolio runoff.

Net revenue was $4.3 billion, a decrease of $906 million, or 18%, from the prior year. Net interest income was $3.4 billion, down by $881 million, or 20%. The decrease was driven by lower average loan balances, the impact of legislative changes and a decreased level of fees. These decreases were offset partially by lower revenue reversals associated with lower charge-offs.

Noninterest revenue was $806 million, a decrease of $25 million, or 3%, due to lower revenue from fee-based products.

The provision for credit losses was $1.6 billion, compared with $5.0 billion in the prior year and $2.2 billion in the prior quarter. The current-quarter provision reflected lower net charge-offs and a reduction of $1.5 billion to the allowance for loan losses due to lower estimated losses. The prior year provision included an addition of $575 million to the allowance for loan losses. The net charge-off rate was 8.87%, down from 10.30% in the prior year and 10.20% in the prior quarter.

The 30-day delinquency rate was 4.57%, down from 5.99% in the prior year and 4.96% in the prior quarter. Excluding the Washington Mutual portfolio, the net charge-off rate was 8.06%, down from 9.41% in the prior year and 9.02% in the prior quarter; and the 30-day delinquency rate was 4.13%, down from 5.38% in the prior year and 4.48% in the prior quarter.

Noninterest expense was $1.4 billion, an increase of $139 million, or 11%, due to higher marketing expense.

COMMERCIAL BANKING (CB)
Net income was $471 million, an increase of $130 million, or 38%, from the prior year. The increase was driven by a reduction in the provision for credit losses. Results included the impact of the purchase of a $3.5 billion loan portfolio during the current quarter.

Net revenue was a record $1.5 billion, up by $68 million, or 5%, compared with the prior year.

Net interest income was $980 million, down by $5 million, or 1%, driven by spread compression on liability products and lower loan balances, offset by growth in liability balances and wider loan spreads. Noninterest revenue was $547 million, an increase of $73 million, or 15%, driven by changes in the valuation of investments held at fair value, higher investment banking fees, higher lending-related fees, gains on sales of loans, and higher other fees.

Revenue from Middle Market Banking was $766 million, a decrease of $5 million, or 1%, from the prior year. Revenue from Commercial Term Lending was $256 million, an increase of $24 million, or 10%, and included the impact of the loan portfolio purchased during the quarter.

Revenue from Mid-Corporate Banking was $304 million, an increase of $26 million, or 9%.

Revenue from Real Estate Banking was $118 million, a decrease of $3 million, or 2%.

The provision for credit losses was $166 million, compared with $355 million in the prior year.

Net charge-offs were $218 million (0.89% net charge-off rate) and were largely related to commercial real estate, compared with $291 million (1.11% net charge-off rate) in the prior year and $176 million (0.74% net charge-off rate) in the prior quarter. The allowance for loan losses to end-of-period loans retained was 2.72%, down from 3.01% in the prior year and 2.82% in the prior quarter. Nonperforming loans were $2.9 billion, up by $644 million from the prior year, reflecting increases in commercial real estate, and were down by $131 million from the prior quarter.

Noninterest expense was $560 million, an increase of $15 million, or 3%, compared with the prior year, reflecting higher headcount-related expense.

TREASURY & SECURITIES SERVICES (TSS)
Net income was $251 million, a decrease of $51 million, or 17%, from the prior year. These results reflected higher noninterest expense, partially offset by higher net revenue. Net income decreased by $41 million, or 14%, compared with the prior quarter, due to a decline in securities lending and depositary receipts revenue reflecting seasonal activity.

Net revenue was $1.8 billion, an increase of $43 million, or 2%, from the prior year. Treasury Services net revenue was $937 million, an increase of $18 million, or 2%. The increase was driven by higher trade loan and card product volumes, partially offset by lower spreads on liability products. Worldwide Securities Services net revenue was $894 million, an increase of $25 million, or 3%. The increase was driven by higher market levels and net inflows of assets under custody, partially offset by lower spreads on liability products and securities lending.

TSS generated firmwide net revenue1 of $2.6 billion, including $1.7 billion by Treasury Services; of that amount, $937 million was recorded in Treasury Services, $670 million in Commercial Banking and $64 million in other lines of business. The remaining $894 million of firmwide net revenue was recorded in Worldwide Securities Services.

Noninterest expense was $1.4 billion, an increase of $130 million, or 10%, from the prior year.

The increase was driven by continued investment in new product platforms, primarily related to international expansion, and higher performance-based compensation.

ASSET MANAGEMENT (AM)
Net income was $420 million, a decrease of $10 million, or 2%, from the prior year. These results reflected higher noninterest expense, largely offset by higher net revenue and a lower provision for credit losses.

Net revenue was $2.2 billion, an increase of $87 million, or 4%, from the prior year. Noninterest revenue was $1.8 billion, up by $99 million, or 6%, due to higher loan originations, the effect of higher market levels and net inflows to products with higher margins, partially offset by lower brokerage revenue and lower quarterly valuations of seed capital investments. Net interest income was $392 million, down by $12 million, or 3%, due to narrower deposit and loan spreads, offset by higher deposit and loan balances.

Revenue from Private Banking was $1.2 billion, up 9% from the prior year. Revenue from Institutional was $506 million, down 5%. Revenue from Retail was $485 million, up 3%. Assets under supervision were $1.8 trillion, an increase of $100 billion, or 6%, from the prior year. Assets under management were $1.3 trillion, flat from the prior year, due to net outflows in liquidity products, offset by net inflows of long-term products and the effect of higher market levels. Custody, brokerage, administration and deposit balances were $513 billion, up by $102 billion, or 25%, due to custody and brokerage inflows and the effect of higher market levels.

The provision for credit losses was $23 million, compared with $38 million in the prior year.

Noninterest expense was $1.5 billion, an increase of $137 million, or 10%, from the prior year, resulting from an increase in headcount.

CORPORATE/PRIVATE EQUITY
Net income was $348 million, compared with net income of $1.3 billion in the prior year.

Private Equity net income was $344 million, compared with $88 million in the prior year. Net revenue was $721 million, an increase of $549 million, and noninterest expense was $184 million, an increase of $150 million, both driven by higher private equity gains.

Corporate net income was $4 million, compared with $1.2 billion in the prior year. Net revenue was $863 million, including $400 million of net interest income and $399 million of trading and securities gains. Noninterest expense reflected an increase of $1.3 billion for litigation reserves, including those for mortgage-related matters.