SEC Filing | JPMorgan Chase & Co.

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8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934


Date of Report:				Commission file number
July 21, 2004				1-5805

J.P. MORGAN CHASE & CO.

(Exact name of registrant as specified in its charter)


Delaware				13-2624428
(State or other jurisdiction of incorporation or organization)				(I.R.S. Employer Identification No.)

270 Park Avenue, New York, NY				10017
(Address of principal executive offices)				(Zip Code)

Registrant’s telephone number, including area code: (212) 270-6000

TABLE OF CONTENTS


	Item 5. Other Events and Regulation FD Disclosure
	Item 7. Financial Statements and Exhibits
	Item 12. Results of Operations and Financial Condition
SIGNATURE
EXHIBIT INDEX
EX-3.1: CERTIFICATE OF OWNERSHIP AND MERGER
EX-12.1: J.P. MORGAN CHASE & CO. COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
EX-12.2: J.P. MORGAN CHASE & CO. COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDEND REQUIREMENTS
EX-99.1: J.P. MORGAN CHASE & CO. EARNINGS RELEASE - 2004 SECOND QUARTER RESULTS
EX-99.2: J.P. MORGAN CHASE & CO. EARNINGS RELEASE FINANCIAL SUPPLEMENT - SECOND QUARTER 2004
EX-99.3: BANK ONE CORPORATION EARNINGS RELEASE FINANCIAL SUPPLEMENT - SECOND QUARTER 2004

Item 5. Other Events and Regulation FD Disclosure

On July 20, 2004, J.P. Morgan Chase & Co. (“JPMorgan Chase” or the “Firm”) changed its name to JPMorgan Chase & Co. The change eliminated the periods and space in JPMorgan so that the style of the formal name of the company is now consistent with the style used in referring to the JPMorgan Chase brand. Exhibit 3.1 is a certified copy of the Certificate of Ownership and Merger filed with the State of Delaware reflecting the above name change.

Item 7. Financial Statements and Exhibits


Exhibit Number		Description of Exhibit

3.1		Certificate of Ownership and Merger
12.1		J.P. Morgan Chase & Co. Computation of Ratio of Earnings to Fixed Charges
12.2		J.P. Morgan Chase & Co. Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividend Requirements
99.1		J.P. Morgan Chase & Co. Earnings Release — 2004 Second Quarter Results
99.2		J.P. Morgan Chase & Co. Earnings Release Financial Supplement — Second Quarter 2004
99.3		Bank One Corporation Earnings Release Financial Supplement — Second Quarter 2004

Item 12. Results of Operations and Financial Condition

On July 21, 2004, JPMorgan Chase reported a 2004 second quarter net loss of $548 million, or ($0.27) per share, compared to net income of $1.83 billion, or $0.89 per share, for the second quarter of 2003. A copy of the 2004 second quarter earnings release is attached hereto as Exhibit 99.1, and a copy of the earnings release financial supplement is attached hereto as Exhibit 99.2.

The earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of JPMorgan Chase’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements.

The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the risk that, following the merger, the businesses will not be integrated successfully; the risk that the cost savings and any revenue synergies from the merger may not be fully realized or may take longer to realize than expected; the risk that excess capital is not generated from the merger as anticipated or not utilized in an accretive manner; and the risk that disruption from the merger may make it more difficult to maintain relationships with clients, employees or suppliers.

Additional factors that could cause JPMorgan Chase’s results to differ materially from those described in the forward-looking statements can be found in the Quarterly Report on Form 10-Q for the quarter ended March 31, 2004, and in the 2003 Annual Report on Form 10-K of JPMorgan Chase filed with the Securities and Exchange Commission and available at the Securities and Exchange Commission’s Internet site (http://www.sec.gov).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	J.P. MORGAN CHASE & CO.
	(Registrant)

	By:	/s/ Joseph L. Sclafani
		Joseph L. Sclafani

	Executive Vice President and Controller
	[Principal Accounting Officer]

Dated: July 21, 2004

EXHIBIT INDEX


Exhibit Number		Description of Exhibit

3.1		Certificate of Ownership and Merger
12.1		J.P. Morgan Chase & Co. Computation of Ratio of Earnings to Fixed Charges
12.2		J.P. Morgan Chase & Co. Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividend Requirements
99.1		J.P. Morgan Chase & Co. Earnings Release — 2004 Second Quarter Results
99.2		J.P. Morgan Chase & Co. Earnings Release Financial Supplement — Second Quarter 2004
99.3		Bank One Corporation Earnings Release Financial Supplement — Second Quarter 2004

EX-3.1:

Exhibit 3.1

(DELAWARE STATE LETTERHEAD)

I , HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF OWNERSHIP, WHICH MERGES:

“JPMORGAN CHASE ONE, INC.”, A DELAWARE CORPORATION,

WITH AND INTO “ J.P. MORGAN CHASE & CO.” UNDER THE NAME OF “JPMORGAN CHASE & CO.”, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF DELAWARE, AS RECEIVED AND FILED IN THIS OFFICE THE TWENTIETH DAY OF JULY, A.D. 2004, AT 2:14 O’CLOCK P.M.

A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF DEEDS.




		Harriet Smith Windsor, Secretary of State
0691011	8100M	AUTHENTICATION: 3243661

040528687		DATE: 07-20-04

State of Delaware
Secretary of State
Division of Corporations
Delivered 02:14 PM 07/20/2004
FILED 02:14 PM 07/20/2004
SRV 040528687 0691011 FILE

CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
JPMORGAN CHASE ONE, INC.
WITH AND INTO
J.P. MORGAN CHASE & CO.

Pursuant to Section 253 of the
General Corporation Law of the State of Delaware

J.P. Morgan Chase & Co., a Delaware corporation (the “Corporation”), does hereby certify to the following facts relating to the merger (the “Merger”) of JPMorgan Chase One, Inc., a Delaware corporation (the “Subsidiary”), with and into the Corporation, with the Corporation remaining as the surviving corporation:

FIRST: The Corporation is incorporated pursuant to the General Corporation Law of the State of Delaware (the “DGCL”). The Subsidiary is incorporated pursuant to the DGCL.

SECOND: The Corporation owns all of the outstanding shares of each class of capital stock of the Subsidiary.

THIRD: The Board of Directors of the Corporation, by the following resolutions duly adopted on July 20, 2004, determined to merge the Subsidiary with and into the Corporation pursuant to Section 253 of the DGCL:

		WHEREAS, J.P. Morgan Chase & Co., a Delaware corporation (the “Corporation”), owns all of the outstanding shares of the capital stock of JPMorgan Chase One, Inc., a Delaware corporation (the “Subsidiary”); and

		WHEREAS, the Board of Directors of the Corporation has deemed it advisable that the Subsidiary be merged with and into the Corporation pursuant to Section 253 of the General Corporation Law of the State of Delaware;

		NOW, THEREFORE, BE IT AND IT HEREBY IS

		RESOLVED that, effective upon the filing of (or at such subsequent time as may be specified in) the Certificate of Ownership and Merger filed in respect thereof (the “Effective Time”), the Subsidiary shall be merged with and into the Corporation with the Corporation being the surviving corporation (the “Merger”);

		RESOLVED, that it is intended that the Merger qualify as a tax-free reorganization under Section 368(a)(l)(F) of the Internal Revenue Code of 1986, as amended, and that these resolutions constitute a plan of reorganization within the meaning of Section 368;

		RESOLVED that, at any time prior to the Effective Time, the Merger may be amended, modified, terminated or abandoned by action of the Board of Directors of the Corporation;

		RESOLVED, that by virtue of the Merger and without any action on the part of the holder thereof, each then outstanding or treasury share of capital stock of the

		Corporation shall remain unchanged and continue to remain outstanding or held in treasury, respectively, as one share of capital stock of the Corporation, held by the person who was the holder of such share of capital stock of the Corporation immediately prior to the Merger;

		RESOLVED, that by virtue of the Merger and without any action on the part of the holder thereof, each then outstanding share of common stock of the Subsidiary shall be cancelled and no consideration shall be issued in respect thereof;

		RESOLVED, that, at the Effective Time, Article FIRST of the Restated Certificate of Incorporation of the Corporation shall be amended to read in its entirety as follows:

		FIRST. The name of the Corporation is JPMorgan Chase & Co.

		RESOLVED, that the appropriate officers of the Corporation be, and hereby are, authorized to make and execute a Certificate of Ownership and Merger setting forth a copy of these resolutions, and the date of adoption thereof, in the discretion of any such officer to specify therein an Effective Time subsequent to the filing thereof and to file the same in the office of the Secretary of Slate of the State of Delaware;

		RESOLVED, that in connection with changing the Corporation’s name, the appropriate officers of the Corporation be, and hereby are, authorized, in the name and on behalf of the Corporation, to enter into any agreements with the office of the Secretary of State of the State of Delaware, and to make and execute such additional certificates and to file the same in the office of the Secretary of State of the State of Delaware, in each case as may, in his or her judgment, be required or advisable;

		RESOLVED, that in order for the Corporation to comply with all applicable regulations and requirements of federal, state, local and foreign governmental agencies and exchanges, the appropriate officers of the Corporation be, and hereby are, authorized, in the name and on behalf of the Corporation, to prepare, execute and file or cause to be filed all reports, statements, documents, undertakings, commitments and information with any exchange or governmental agencies as may, in his or her judgment, be required or advisable in connection with the Merger or the Corporation’s name change;

		RESOLVED, that, after the Effective Time, the appropriate officers of the Corporation be, and hereby are, authorized, in the name and on behalf of the Corporation, to apply to, and to take such steps and to execute such documents as may be necessary or desirable to, change the name in which the Corporation is qualified to do business, in such jurisdictions as it is qualified, to reflect the change in the Corporation’s name;

		RESOLVED, that, after the Effective Time, the appropriate officers of the Corporation be, and hereby are, authorized, in the name and on behalf of the Corporation, to apply to, and to take such steps and to execute such documents as may be necessary or desirable to, use any alternate name, fictitious name, assumed name or other name in such jurisdictions as the Corporation is qualified, if any such officer determines it is necessary or desirable for the Corporation to use an alternate name, fictitious name, assumed name or other name;

Page 2 of 3

		RESOLVED that, effective immediately following the Effective Time, the By-laws of the Corporation shall be amended by deleting the name “J.P. Morgan Chase & Co.” from the Heading and Section 1.01 thereof and substituting therefor the name “JPMorgan Chase & Co.”;

		RESOLVED, that, after the Effective Time, the appropriate officers of the Corporation be, and hereby are, authorized, in the name and on behalf of the Corporation, to prepare, execute and file a listing application or supplemental listing application, and such other documents, and to take such steps, as may be necessary or desirable, with the New York Stock Exchange and if any such officer determines it required or advisable, any other exchanges on which the Corporation has listed securities, to reflect the change in the Corporation’s name;

		RESOLVED, that all actions to be taken or heretofore taken by any officer or agent of the Corporation in connection with any matter referred to or contemplated by any of the foregoing resolutions be, and they hereby are, approved, ratified and confirmed in all respects; and

		RESOLVED, that the appropriate officers of the Corporation be, and hereby are, authorized to do all acts and things and to sign, seal, execute, acknowledge, file, deliver and record all papers, instruments, agreements, documents and certificates, and to pay all charges, fees, taxes and other expenses, from time to time necessary, desirable or appropriate to be done, signed, sealed, executed, acknowledged, filed, delivered, recorded or paid, under any applicable law, or otherwise, and to certify as having been adopted by this Board of Directors any form of resolution required by any law, regulation or agency, in order to effectuate the purpose of the foregoing resolutions or any of them or to carry out the transactions contemplated hereby.

FOURTH: The Corporation shall be the surviving corporation of the Merger. The name of the surviving corporation shall be amended in the Merger to be “JPMorgan Chase & Co.”

FIFTH: The Restated Certificate of Incorporation of the Corporation as in effect immediately prior to the effective time of the Merger shall be the certificate of incorporation of the surviving corporation, except that Article FIRST thereof shall be amended to read in its entirety as follows:

FIRST. The name of the Corporation is JPMorgan Chase & Co.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Ownership and Merger to be executed by its duly authorized officer the 20th day of July, 2004.


		J.P. MORGAN CHASE & CO.

		BY:

				Name: Anthony J. Horan
				Title: Corporate Secretary

Page 3 of 3

EX-12.1

EXHIBIT 12.1

J.P. MORGAN CHASE & CO.

Computation of Ratio of Earnings to Fixed Charges


Six Months Ended June 30, (in millions, except ratios)	2004

Excluding Interest on Deposits
Income before income taxes	$	1,828


Fixed charges:
Interest expense		3,654
One-third of rents, net of income from subleases (a)		151

Total fixed charges		3,805


Less: Equity in undistributed income of affiliates		(78	)


Earnings before taxes and fixed charges, excluding capitalized interest	$	5,555


Fixed charges, as above	$	3,805


Ratio of earnings to fixed charges		1.46


Including Interest on Deposits
Fixed charges, as above	$	3,805

Add: Interest on deposits		1,622


Total fixed charges and interest on deposits	$	5,427


Earnings before taxes and fixed charges, excluding capitalized interest, as above	$	5,555

Add: Interest on deposits		1,622


Total earnings before taxes, fixed charges and interest on deposits	$	7,177


Ratio of earnings to fixed charges		1.32


(a)		The proportion deemed representative of the interest factor.

EX-12.2

EXHIBIT 12.2

J.P. MORGAN CHASE & CO.

Computation of Ratio of Earnings to Fixed Charges
and Preferred Stock Dividend Requirements


Six Months Ended June 30, (in millions, except ratios)	2004

Excluding Interest on Deposits
Income before income taxes	$	1,828


Fixed charges:
Interest expense		3,654
One-third of rents, net of income from subleases (a)		151

Total fixed charges		3,805


Less: Equity in undistributed income of affiliates		(78	)


Earnings before taxes and fixed charges, excluding capitalized interest	$	5,555


Fixed charges, as above	$	3,805

Preferred stock dividends (pre-tax)		34


Fixed charges including preferred stock dividends	$	3,839


Ratio of earnings to fixed charges and preferred stock dividend requirements		1.45


Including Interest on Deposits
Fixed charges including preferred stock dividends, as above	$	3,839

Add: Interest on deposits		1,622


Total fixed charges including preferred stock dividends and interest on deposits	$	5,461


Earnings before taxes and fixed charges, excluding capitalized interest, as above	$	5,555

Add: Interest on deposits		1,622


Total earnings before taxes, fixed charges and interest on deposits	$	7,177


Ratio of earnings to fixed charges and preferred stock dividend requirements		1.31


(a)		The proportion deemed representative of the interest factor.

EX-99.1:

Exhibit 99.1


JPMorgan Chase & Co. 270 Park Avenue, New York, NY 10017-2070 NYSE symbol: JPM www.jpmorganchase.com

News release: IMMEDIATE RELEASE

JPMORGAN CHASE AND BANK ONE REPORT 2004 SECOND QUARTER RESULTS

• JPMC TAKES LITIGATION RESERVE CHARGE OF $2.3 BILLION (AFTER-TAX)

• JPMORGAN CHASE REPORTS NET LOSS OF $548 MILLION

• BANK ONE REPORTS EARNINGS OF $1.1 BILLION

• MERGER SAVINGS ESTIMATE RAISED TO $3 BILLION

• BOARD APPROVES $6 BILLION STOCK REPURCHASE PROGRAM

			New York, July 21, 2004 – JPMorgan Chase & Co. (NYSE: JPM) today reported a 2004 second quarter net loss of $548 million, or ($0.27) per share, compared to net income of $1.83 billion, or $0.89 per share, for the second quarter of 2003. Bank One Corporation announced 2004 second quarter net income of $1.1 billion, or $0.99 per share, compared to $856 million, or $0.75 per share, for the second quarter of 2003. The merger of JPMorgan Chase and Bank One occurred on July 1, 2004. Accordingly, second quarter earnings for JPMorgan Chase and Bank One are each provided on a stand-alone basis. Refer to the “Merger and other financial information” section of this press release for additional information concerning the merger and estimated merger costs and savings.

			Second quarter earnings for JPMorgan Chase were reduced by a $2.3 billion (after-tax) charge to increase litigation reserves and $60 million (after-tax) of merger costs. Excluding these charges, earnings would have been $1.81 billion, or $0.85 per share. “We have decided, after an extensive review, that our litigation reserves should be increased,” said William B. Harrison, Jr., Chairman and Chief Executive Officer. Mr. Harrison noted additionally that “JPMorgan Chase will continue to defend itself vigorously in these legal matters, and will seek to resolve them in the manner management believes is in the best interests of the Firm and its shareholders.”

			Mr. Harrison commented further on second quarter earnings, “Our earnings this quarter, excluding the charges, were comparable to the prior year. Strength in investment banking fees, continued improvement in our commercial credit portfolio, and strong results from private equity were offset by the expected decrease in Chase Home Finance and weakness in trading as the capital markets environment became more challenging.” Mr. Harrison further commented, “The merger with Bank One was completed on July 1st, and the new management team is working well together. We have made all of the decisions on technology platforms, we announced our decision on franchise branding and we are raising our annual merger savings target to $3 billion. We remain focused on clients, disciplined execution and performance.”

			James Dimon, President and Chief Operating Officer, commenting on Bank One’s earnings said, “We reported another strong quarter, demonstrating the continuing momentum in each of our operating businesses. Retail continued its string of quarterly increases in accounts, deposits, loan production and profits. Card’s strong earnings were driven by improved margin and increased charge volume, while middle market loan balances grew modestly.”


Investor Contact:		Ann Borowiec (212) 270-7318				Media Contact:		Joe Evangelisti (212) 270-7438

JPMorgan Chase & Co.
News Release

The Board of Directors authorized an initial stock repurchase program of up to $6 billion of JPMorgan Chase common stock.1 “The stock repurchase program reflects the Board’s belief that significant capital will be generated that can be used to repurchase stock over time and invest in our businesses,” said Mr. Dimon.

In the discussion of the lines of business below, information is presented on an operating basis2. For JPMorgan Chase “operating” basis excludes the after-tax impact of the litigation charge and merger costs of $2.3 billion and $60 million, respectively. In the case of Chase Cardmember Services and Bank One Card Services, operating or managed basis excludes the impact of credit card securitizations. For more information about operating or managed basis, as well as other non-GAAP financial measures used by management, see the Notes below.

The following discussion of results for the second quarter of 2004 compares results to the second quarter of 2003 unless otherwise indicated.

JPMorgan Chase highlights for the second quarter of 2004:

•

The Investment Bank achieved a return on equity of 19%. Investment banking fees reached their highest quarterly level since 2001 and credit quality continued to improve, causing a reduction in the allowance for credit losses.

•

Chase Financial Services’ return on equity was 27%, up from 18% in the first quarter, primarily due to higher reported earnings in Chase Home Finance.

•

JPMorgan Partners produced $392 million in gains during the quarter.

•

JPMorgan Chase maintained strong capital with a Tier 1 capital ratio of 8.2% (estimated).

Investment Bank (“IB”)
Earnings were $703 million for the second quarter, down 32% from the year-ago period. Revenues of $3.1 billion were 26% lower while expenses were down 15%. The decline in earnings reflected lower trading revenues and the anticipated reduction in treasury revenues partially offset by higher investment banking fees and favorable credit costs. Return on allocated capital was 19% for the quarter, compared to 21% for the second quarter of 2003.

•

Investment banking fees were $883 million, up 15%, driven by higher advisory and equity underwriting fees. According to Thomson Financial, for the first six months of 2004 compared to full year 2003, the Firm maintained its #1 ranking in Global Syndicated Loans and #2 ranking in Global Investment-Grade Bonds. The Investment Bank increased its market share in Global Announced M&A from 15% to 23%, maintaining its top-five ranking, while its Global Equity and Equity-Related ranking declined from #4 to #7. The Investment Bank sustained its momentum in U.S. IPOs, increasing its ranking to #4 from #14.

•

Markets and lending revenues excluding Global Treasury were $2.1 billion, down 27%, driven by lower revenue in fixed income and equity markets. The decline in fixed income reflected lower portfolio management revenues; client revenues, though down slightly from the first quarter, increased from the second quarter of 2003. The decline in equities reflected reduced portfolio management results, as well as lower client activity.

•

Global Treasury revenues were $175 million, down from $620 million, reflecting lower levels of realized investment securities gains and net interest income.

•

Expenses of $2.1 billion decreased 15% from the year-ago quarter primarily reflecting reduced levels of performance-related incentive compensation. Last year’s expenses included over $200 million for disposition of real estate and regulatory settlement of Enron-related matters.

•

Credit costs were a benefit of $128 million, attributable to a reduction in the allowance for loan losses. Credit costs improved by $123 million from the second quarter of 2003, but were $60 million less favorable than the first quarter of 2004.

JPMorgan Chase & Co.
News Release

Chase Financial Services (“CFS”)
Earnings were $620 million for the quarter, a decrease of 27% from a record quarter in 2003, but an increase of 45% from last quarter, both driven primarily by Chase Home Finance. Return on allocated capital for the quarter was 27% compared to 39% for the second quarter of 2003 and 18% in the first quarter of 2004. Operating revenues were $3.7 billion, down 7% compared to the prior year, and expenses of $1.9 billion were up 2%. Credit costs were up compared to both the sequential and prior year’s quarter, driven by higher balances, while consumer charge-off rates declined.

Business Segments

•

Chase Home Finance: Earnings were $321 million for the quarter, a decrease of 43% from record performance in the second quarter of 2003. Total revenue of $965 million declined 28% from last year as higher rates lowered mortgage originations and margins. Mortgage servicing rights hedging contributed to the revenue decline with a net gain of $40 million compared to a $233 million gain in the second quarter of 2003. Expenses of $424 million were up 6% from last year primarily due to growth in the home equity business and in the mortgage sales and distribution channels. Compared to the first quarter of 2004, earnings increased 45% as revenue increased 19% due to higher origination and mortgage servicing rights hedging revenues and expenses declined 11%.

•

Chase Cardmember Services: Earnings were $176 million, up 7% from last year. Operating revenues on a managed basis were $1.6 billion, up 5%, driven by double-digit growth in purchase volume. Expenses of $570 million were up 5% year-over-year, primarily reflecting higher marketing costs. Credit quality improved, with the managed net charge-off rate declining to 5.84% in the second quarter from 6.02% in the prior year.

•

Chase Auto Finance: Earnings were $72 million, an increase of 7% from last year, driven primarily by lower net charge-offs. Revenues of $218 million were essentially flat as 9% growth in balances serviced was offset by narrower margins reflecting a highly competitive environment. Expenses were up from last year.

•

Chase Regional Banking: Earnings were $10 million, down $24 million from last year. Revenues were $654 million, essentially flat to last year as strong deposit growth was offset by continued spread compression. Average deposits increased 10% to $82 billion from the prior year and 10% on an annualized basis from the prior quarter. Expenses were up 6%, as a result of higher compensation, marketing costs and investments in the distribution network. For example, during the quarter over 300 ATMs were upgraded to eATMs; approximately 75% of all ATMs have now been converted.

•

Chase Middle Market: Earnings were $73 million, down 6% from last year. Revenues were $357 million, up 1%. Average deposits increased 21% to $33 billion from the prior year and 18% on an annualized basis from the prior quarter. Spread compression offset the benefit from strong deposit growth. Expenses declined 4% from last year due to lower compensation expense and lower operating losses.

Treasury & Securities Services (“TSS”)
Earnings were $121 million, up 9%. Return on allocated capital for the quarter was 15%, compared to 16% in the second quarter of 2003 and 15% in the prior quarter.

•

Revenues were $1.2 billion, up 21% from last year; excluding acquisitions and other one-time items, revenues were up 11%. Investor Services revenues increased 26%, as higher equity market valuations and a strong seasonal pick-up in customer volumes led to higher custody fees, securities lending fees and foreign exchange revenue. Treasury Services revenues rose 16% on the strength of the acquisition of the Electronic Financial Services business together with higher product revenue. Institutional Trust Services revenues increased 15% reflecting acquisitions including Bank One’s corporate trust business, growth in the American Depositary Receipts business and an increase in the other global equities business.

JPMorgan Chase & Co.
News Release

•

Expenses of $1.0 billion for the quarter increased 23%, reflecting acquisitions and investment write-offs of approximately $70 million. Excluding the write-offs and acquisitions, expenses were up 7% from last year and up 2% from prior quarter.

Investment Management & Private Banking (“IMPB”) Earnings were $93 million for the quarter, up from $58 million in the second quarter of 2003. Return on allocated capital was 7%, compared to 4% in the second quarter of 2003; return on tangible allocated capital3 (net of goodwill) was 31%, compared to 17% in the second quarter of 2003.

•

Revenues of $805 million were up 19% reflecting global equity market appreciation, net assets under supervision inflows, the acquisition of Retirement Plan Services (“RPS”) and increased brokerage activity.

•

Expenses of $669 million increased 13% as a result of higher compensation, the acquisition of RPS, and technology initiatives.

•

Total assets under supervision were $788 billion, up 14% from last year as a result of equity market appreciation and net asset inflows. Total assets under management were $570 billion, up 11%. Not reflected in assets under management is the Firm’s 43% interest in American Century Companies, Inc., which had assets under management of $91 billion as of June 30, 2004, up from $78 billion as of June 30, 2003.

JPMorgan Partners (“JPMP”)

•

JPMorgan Partners had earnings of $187 million, compared to a loss of $96 million in the second quarter of 2003. Net private equity gains on the portfolio were $392 million, compared to a net loss of $22 million in the second quarter. The total portfolio was $6.4 billion at the end of the quarter, compared to $7.9 billion a year ago.

Consolidated Expenses

•

Expenses for the Firm in the second quarter of 2004 were $5.7 billion, excluding the litigation reserve charge and merger costs of $3.7 billion and $90 million, respectively, down 3% from the prior year and 6% from the prior quarter. Compensation expense decreased by 7% driven by reductions in incentive compensation. Non-compensation expenses increased 3% reflecting higher technology costs and increased marketing. These increases were partially offset by reduced occupancy costs.

•

Litigation charge: The $3.7 billion ($2.3 billion after-tax) addition to the litigation reserve brings the Firm’s reserve for all litigation, including the Enron and securities cases covered by previous publicly announced reserving actions, to approximately $4.7 billion. The addition is the result of a comprehensive and detailed review of the Firm’s major litigation exposures conducted by management after extensive consultation with legal counsel. While the outcome of litigation is inherently uncertain, this addition reflects management’s current assessment of the appropriate reserve level in light of all currently known information. Management reviews litigation reserves periodically, and the reserve may be increased or decreased in the future to reflect further developments. Among the factors weighed by management in adjusting the litigation reserve level were developments in the legal cases themselves, developments in settlement efforts, recent settlements by other parties and a significantly more negative assessment of the litigation environment in the United States. The Firm has meritorious defenses to claims asserted against it and intends to continue to defend itself vigorously, litigating or settling cases according to management’s judgment as to what is in the best interest of stockholders.

JPMorgan Chase & Co.
News Release

Consolidated Credit

•

Credit quality trends continued to be favorable for both commercial and consumer portfolios. For commercial, this was the fourth consecutive quarter with credit cost benefits. Total commercial credit costs, including the residual component, were a benefit of $120 million for the quarter, compared to costs of $106 million in the prior year. This was the third consecutive quarter with a commercial loan charge-off rate at or below 0.50%. The commercial loan charge-off rate was 0.35% for the quarter, compared to 1.20% in second quarter of 2003. On the consumer side, total credit costs of $809 million were unchanged from the second quarter of 2003, and the credit card charge-off rate declined. The Firm had total nonperforming assets of $2.5 billion at June 30, 2004, down 40% from June 30, 2003.

Total assets and capital

•

Total assets as of June 30, 2004 were $818 billion, compared to $803 billion as of June 30, 2003. Commercial loans were $79.2 billion, compared to $91.1 billion as of June 30, 2003. Managed consumer loans of $180.8 billion increased 6% from June 30, 2003. The Tier 1 capital ratio was 8.2% at June 30, 2004 (estimated) and 8.4% at June 30, 2003.

Merger and other financial information

•

Merger between JPMorgan Chase & Co. and Bank One Corporation: On July 1, 2004, JPMorgan Chase and Bank One completed the merger of their holding companies. The merger was accounted for as a purchase. Accordingly, the earnings for JPMorgan Chase and Bank One for the second quarter are provided on a stand-alone basis.

•

Merger saves and costs: Management has updated its estimates for merger savings and costs related to the merger with Bank One. Management raised its estimate of merger saves from $2.2 billion to $3.0 billion to be phased in over the next three years. Approximately two-thirds of the savings will be realized by 2005. Merger costs are now estimated to be $4.0 billion. Approximately $1.0 billion of the $4.0 billion will be accounted for as purchase accounting adjustments and will be recorded as an increase to goodwill. The remaining $3.0 billion of merger costs are expected to be charged against income, over the next three years, beginning in the third quarter of 2004.

•

Conformance of accounting policies: As part of the merger, certain accounting policies and practices will be conformed, which will result in charges estimated at $1.3 billion to $1.5 billion (pre-tax) to earnings during the second half of the year. The largest impact comes from refining the approach to credit loss reserves, primarily related to the decertification of the seller’s retained interest in credit card securitizations. Other conforming adjustments and business decisions may lead to additional pre-tax charges currently estimated at $200 million to $400 million.

JPMorgan Chase & Co.
News Release

The following discussion of Bank One’s results for the second quarter of 2004 compares results to the second quarter of 2003 unless otherwise indicated.

Bank One Corporation highlights for the second quarter of 2004:
Bank One Corporation, which merged with JPMorgan Chase on July 1st, announced 2004 second quarter net income of $1.1 billion, or $0.99 per diluted share, compared to $856 million, or $0.75 per diluted share.

•

Significant items resulted in a $0.06 per share net impact to Bank One’s earnings.


($millions)
	Pre-tax			After-tax
Commercial Banking net allowance release	$	175		$	111
Net securities losses		(89	)		(57	)
Earnings impact from non-core portfolio actions		74			47
Merger-related costs		(54	)		(34	)

Net impact to earnings	$	106		$	67

Retail’s performance continued to be driven by strong growth in net checking accounts, deposits, loan production and investment sales. Net income was $485 million, up $112 million, or 30%.

•

Net checking account growth remained strong with 164,000 accounts added in the current quarter. During the past 12 months, net checking accounts increased 550,000, or 11%.

•

Average core deposit balances were $75.3 billion, up 9% from the prior year and 14% annualized from the prior quarter.

•

Home equity average loan balances grew $5.6 billion, or 24% from the prior year and 21% annualized from the prior quarter. Home equity production was $5.5 billion, up 9% from the prior year.

•

Credit quality continued to improve with the net charge-off ratio decreasing to 0.58% from 0.66% last quarter and 0.85% in the prior year.

•

Investment sales volume was up $237 million, or 15% from the prior year.

•

Retail branch expansion continued with the opening of 27 new banking centers and the addition of 59 new ATMs during the quarter. Over the past 12 months, 535 ATMs were added to the network and 45% were replaced with upgraded functionality. Further, over 1,000 sales people were added, while overall headcount decreased by 755.

Commercial Banking’s net income was $420 million compared to $252 million, an increase of 67%. Excluding the impact of the net allowance releases of $175 million in the current quarter and $95 million in the prior year, net income was $309 million, an increase of $118 million, or 62%.

•

Commercial Banking extended its credit quality improvement trend during the quarter. Corporate banking reported net recoveries of $13 million — its second consecutive quarter of net recoveries. Middle market reported net charge-offs of only $1 million. Nonperforming loans declined $541 million, or 77%, in corporate banking and $527 million, or 53% in middle market. Compared to the prior quarter, nonperforming loans declined $72 million, or 31%, in corporate banking and $123 million, or 21%, in middle market.

•

Middle market lending continued to experience the modest growth that began in the first quarter. Outstanding balances grew by $0.7 billion, while commitments to lend and average utilization increased slightly during the quarter.

•

As expected capital markets activities declined; lower fees in fixed income and derivatives were partially offset by strength in structured finance.

JPMorgan Chase & Co.
News Release

Card Services’ net income was $389 million, up $110 million, or 39% from the prior year and up $70 million, or 22% from the prior quarter as spread improvements, higher total receivables, higher charge volume and lower provision for loan losses were partially offset by higher marketing expenses.

•

Managed margin as a percentage of average managed loans increased 147 basis points over the prior year and 17 basis points over the prior quarter, continuing the positive trends. Rising rates may pressure margin in the future.

•

Average total receivables increased $4.3 billion or 12%, while average managed loans increased $2.6 billion, or 4%, and charge volume increased $6.6 billion, or 16% compared to the prior year.

•

Paymentech, Inc.’s bank card volume increased $9.4 billion, or 24% and total transactions increased 358 million or 21% over the prior year.

•

Credit quality remains strong. The managed net charge-off ratio increased slightly to 5.44% from 5.21% in the prior year and 5.35% in the prior quarter. The 30-day managed delinquency ratio decreased to 3.37% from 3.95% in the prior year and 3.75% in the prior quarter. The reported net charge-off ratio decreased to 4.48% from 5.17% in the prior year but increased slightly from the prior quarter rate of 4.24%.

•

The Company continued to partner with the world’s leading brands when it launched a new rewards card with the American Kennel Club, signed Amerada Hess Corporation as a new partner and offered Sony Cardmembers exclusive entertainment and technology benefits.

•

The Company finalized the purchase of Circuit City’s private-label credit card operation, providing a platform to issue private-label credit cards for existing and future partners.

Investment Management’s net income totaled $110 million, an increase of $34 million, or 45%, driven by the 2003 acquisition of Zurich Life (“Zurich”), and continued growth in assets under management and deposits.

•

Assets under management were $182.8 billion, an increase of 7% over the prior year. Excluding the impact of the acquisitions of Zurich and Security Capital, net inflows of long-term assets were $10.7 billion over the last four quarters.

•

Integration of Zurich remains on target reflecting continued reductions in operating expenses and headcount. Additionally, Security Capital continues to show strong post-acquisition results.

•

Standard & Poor’s affirmed its A+ rating of Zurich Life and revised the outlook from negative to stable, reflecting an improved economic environment, the financial strength of the organization and the successful integration efforts to date.

•

Continued customer focus in private client services drove increases in loans and deposits of $1 billion, or 16%, and $3 billion, or 29%, respectively.

Other Corporate Items

•

Treasury net interest expense was $242 million, up $165 million from a year ago driven by activities to position the balance sheet for rising interest rates and lower levels of treasury investments and up $60 million from the prior quarter driven by the reduction in the treasury portfolio.

•

Net securities losses were $89 million, primarily the result of losses taken in the treasury investment portfolio. This compared to net securities gains of $154 million in the prior year and $122 million in the prior quarter.

•

The Tier 1 capital ratio was 10.0% at June 30, 2004 and 9.7% at June 30, 2003.

JPMorgan Chase & Co.
News Release

Notes:

	1.		The $6.0 billion stock repurchase program includes shares purchased to offset issuance under the Firm’s employee stock-based compensation plans.

	2.		In addition to analyzing the Firm’s results on a reported basis, management reviews the line of business results on an operating basis, which is a non-GAAP financial measure. The definition of operating basis starts with the reported U.S. GAAP results. In the case of the Investment Bank, operating basis includes in trading revenue net interest income related to trading activities. Trading activities generate revenues that are recorded for GAAP purposes in two line items on the income statement: trading revenue, which includes the mark to market gains or losses on trading positions; and net interest income, which includes the interest income or expense related to those positions. Combining both the trading revenue and related net interest income enables management to evaluate the Investment Bank’s trading activities, by considering all revenue related to these activities, and facilitates operating comparisons to other competitors. In the case of Chase Cardmember Services, operating or managed basis excludes the impact of credit card securitizations on revenue, the provision for credit losses, net charge-offs and receivables. JPMorgan Chase uses the concept of “managed receivables” to evaluate the credit 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 impact 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 charge-off rates) of the entire managed credit card portfolio. Operating basis excludes the litigation reserve charge and merger costs, as management believes these items are not part of the Firm’s normal daily business operations and, therefore, not indicative of trends, and also do not provide meaningful comparisons with other periods. See page 9 of JPMorgan Chase’s Earnings Release Financial Supplement (Second Quarter 2004) for a reconciliation of JPMorgan Chase’s income statement from reported to operating basis.

	3.		The Firm uses return on tangible allocated capital, a non-GAAP financial measure, to evaluate the economics of the IMPB business segment. Return on tangible allocated capital measures return on an economic capital basis (that is, on a basis that takes into account the operational, business, credit, private equity and market risks to which the business is exposed, including the level of assets) but excludes the capital allocated for goodwill. The Firm utilizes this measure to facilitate operating comparisons of IMPB to other competitors. See page 14 of JPMorgan Chase’s Earnings Release Financial Supplement (Second Quarter 2004).

			JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $1.1 trillion and operations in more than 50 countries. The Firm is a leader in investment banking, financial services for consumers and businesses, financial transaction processing, asset and wealth management, and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. has its corporate headquarters in New York and its U.S. retail financial services and commercial banking headquarters in Chicago. Under the JPMorgan, Chase and Bank One brands, the Firm serves millions of consumers in the United States and many of the world’s most prominent corporate, institutional and government clients. Information about the Firm is available at www.jpmorganchase.com.

			JPMorgan Chase will host a meeting and a conference call for the investment community on Wednesday, July 21, 2004 at 9:00 a.m. (Eastern Daylight Time) to review second quarter financial results and the merger with Bank One Corporation. The meeting will be held at 270 Park Avenue on the 11th floor in room A. Investors unable to attend the meeting can dial (973) 935-8504 or listen via live audio webcast. The webcast and presentation slides will be available on www.jpmorganchase.com. A replay of the meeting will be available beginning at 1:00 p.m. (Eastern Daylight Time) on July 21, 2004 and continuing through 6:00 p.m. (Eastern Daylight Time) on July 28, 2004 at (973) 341-3080 pin #4919180. The replay also will be available on www.jpmorganchase.com. Additional detailed financial, statistical and business-related information is included in a financial supplement. The earnings release and the financial supplement are available on the JPMorgan Chase web site (www.jpmorganchase.com).

JPMorgan Chase & Co.
New Release

			This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of JPMorgan Chase’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements.

			The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the risk that, following consummation of the merger, the businesses will not be integrated successfully; the risk that the cost savings and any revenue synergies from the merger may not be fully realized or may take longer to realize than expected; the risk that excess capital is not generated from the merger as anticipated or not utilized in an accretive manner; and the risk that disruption from the merger may make it more difficult to maintain relationships with clients, employees or suppliers. Additional factors that could cause JPMorgan Chase’s results to differ materially from those described in the forward-looking statements can be found in the 2003 Annual Report on Form 10-K and the Quarterly Report on Form 10-Q dated March 31, 2004 of JPMorgan Chase filed with the Securities and Exchange Commission and available at the Securities and Exchange Commission’s internet site (http://www.sec.gov).

Exhibit 99.1

JPMorgan Chase & Co.
News Release


J.P. MORGAN CHASE & CO. CONSOLIDATED FINANCIAL HIGHLIGHTS (in millions, except per share, ratio and employee data)


										2QTR 2004												YTD 2004
	2QTR			1QTR			2QTR			Change						Year-to-date						Change
	2004			2004			2003			1Q 2004			2Q 2003			2004			2003			2003
SELECTED INCOME STATEMENT DATA:
Revenue	$	8,599		$	8,977		$	9,034			(4	)%		(5	)%	$	17,576		$	17,440			1	%
Provision for Credit Losses		203			15			435		NM				(53	)		218			1,178			(81	)
Noninterest Expense		9,471			6,059			5,832			56			62			15,530			11,373			37
Net Income (Loss)		(548	)		1,930			1,827		NM			NM				1,382			3,227			(57	)
Per Common Share:
Net Income (Loss) per Share:
Basic	$	(0.27	)	$	0.94		$	0.90		NM			NM			$	0.67		$	1.60			(58	)
Diluted		(0.27	)		0.92			0.89		NM			NM				0.65			1.57			(59	)
Cash Dividends Declared per Share		0.34			0.34			0.34			—			—			0.68			0.68			—
Book Value per Share (Period-End)		21.52			22.62			21.53			(5	)		—
Closing Share Price		38.77			41.95			34.18			(8	)		13
Common Shares Outstanding:
Average:
Basic		2,042.8			2,032.3			2,005.6			1			2			2,037.6			2,002.8			2
Diluted		2,099.6			2,092.7			2,050.6			—			2			2,096.3			2,036.3			3
Common Shares at Period-End		2,087.5			2,081.7			2,035.1			—			3
SELECTED RATIOS:
Return on Average Common Equity(a)		NM			17	%		17	%	NM			NM				6	%		15	%	(900)bp
Tier 1 Capital Ratio		8.2	%(b)		8.4			8.4		(20)bp			(20)bp
SELECTED BALANCE SHEET DATA (PERIOD-END):
Total Assets	$	817,763		$	801,078		$	802,603			2	%		2	%
Deposits		346,539			336,886			318,248			3			9
Common Stockholders’ Equity		44,932			47,092			43,812			(5	)		3
FULL-TIME EQUIVALENT EMPLOYEES		91,008			93,285			92,256			(2	)		(1	)
SEGMENT EARNINGS
Investment Bank	$	703			1,110		$	1,037			(37	)		(32	)	$	1,813		$	1,933			(6	)%
Treasury & Securities Services		121			119			111			2			9			240			223			8
Investment Management & Private Banking		93			116			58			(20	)		60			209			84			149
JPMorgan Partners		187			116			(96	)		61		NM				303			(318	)	NM
Chase Financial Services		620			427			853			45			(27	)		1,047			1,501			(30	)
Support Units and Corporate		82			42			(136	)		95		NM				124			(196	)	NM

OPERATING EARNINGS	$	1,806		$	1,930		$	1,827			(6	)		(1	)	$	3,736		$	3,227			16

(a)		Based on annualized amounts.
(b)		Estimated


JPMorgan Chase & Co. News Release

BANK ONE CORPORATION CONSOLIDATED FINANCIAL HIGHLIGHTS (in millions, except per share, ratio and employee data)


										2QTR 2004										YTD 2004
	2QTR			1QTR			2QTR			Change						Year-to-date				Change
	2004			2004			2003			1Q 2004			2Q 2003			2004		2003		2003
SELECTED INCOME STATEMENT DATA:
Total Revenue, net of interest expense	$	4,392		$	4,565		$	4,072			(4	)%		8	%	$	8,957	$	8,015		12	%
Provision for Credit Losses		49			141			461			(65	)		(89	)		190		957		(80	)
Noninterest Expense		2,744			2,663			2,403			3			14			5,407		4,700		15
Net Income		1,115			1,233			856			(10	)		30			2,348		1,674		40
Per Common Share:
Net Income per Share:
Basic	$	1.00		$	1.11		$	0.76			(10	)		32		$	2.11	$	1.46		45
Diluted		0.99			1.09			0.75			(9	)		32			2.08		1.45		43
Cash Dividends Declared per Share		0.45			0.45			0.21			—			NM
Book Value per Share (Period-End)		21.67			21.86			19.70			(1	)		10
Closing Share Price		51.00			54.52			37.18			(6	)		37
Common Shares Outstanding:
Average:
Basic		1,111			1,115			1,132			—			(2	)		1,113		1,142		(3	)
Diluted		1,128			1,135			1,140			(1	)		(1	)		1,131		1,150		(2	)
Common Shares at Period-End		1,115			1,125			1,130			(1	)		(1	)
SELECTED RATIOS:
Return on Average Common Equity		18.7	%		20.5	%		15.3	%
Tier 1 Capital Ratio		10.0			10.2			9.7
SELECTED BALANCE SHEET DATA (PERIOD-END):
Total Assets	$	299,303		$	319,590		$	299,999			(6	)%		—	%
Deposits		164,475			165,940			172,015			(1	)		(4	)
Total Stockholders’ Equity		24,156			24,598			22,257			(2	)		9
FULL-TIME EQUIVALENT EMPLOYEES		70,993			71,039			72,323			—			(2	)
NET INCOME by LOB
Retail	$	485		$	482		$	373			1			30
Commercial Banking		420			425			252			(1	)		67
Card Services		389			319			279			22			39
Investment Management Group		110			133			76			(17	)		45
Corporate		(285	)		(127	)		(133	)		NM			NM

Net income from continuing operations	$	1,119		$	1,232		$	847			(9	)		32
Income (Loss) from discontinued operations		(4	)		1			9			NM			NM

Net income	$	1,115		$	1,233		$	856			(10	)		30

EX-99.2:

Exhibit 99.2

(JP MORGAN CHASE LOGO)

EARNINGS RELEASE FINANCIAL SUPPLEMENT

SECOND QUARTER 2004


J.P. MORGAN CHASE & CO. TABLE OF CONTENTS


		Page
Reported Basis
Consolidated Financial Highlights		3
Statement of Income — Reported Basis		4
Selected Noninterest Revenue and Noninterest Expense Detail		5
Consolidated Balance Sheet		6
Condensed Average Balance Sheet and Annualized Yields		7

Operating Basis
Statement of Income — Operating Basis		8
Reconciliation from Reported to Operating Basis		9
Lines of Business Financial Highlights Summary — Operating Basis		10

Investment Bank		11
Business-Related Metrics		12

Treasury & Securities Services		13

Investment Management & Private Banking		14
Assets Under Supervision		15

JPMorgan Partners		16
Investment Portfolio — Private and Public Securities		17

Chase Financial Services		18
Business Financial Highlights		19
Business-Related Metrics		20

Credit-Related Information		21-25

Supplemental Detail
Capital		26
Market Risk — Investment Bank Average Trading VAR		27

Glossary of Terms		28

Note: Prior periods have been adjusted to conform with current methodologies.

Page 2

(JP MORGAN CHASE LOGO)

REPORTED BASIS


J.P. MORGAN CHASE & CO. CONSOLIDATED FINANCIAL HIGHLIGHTS (in millions, except per share, ratio and employee data)


																2QTR 2004												YTD 2004
	2QTR			1QTR			4QTR			3QTR			2QTR			Change						Year-to-date						Change
	2004			2004			2003			2003			2003			1Q 2004			2Q 2003			2004			2003			2003
SELECTED INCOME STATEMENT DATA:
Revenue	$	8,599		$	8,977		$	8,068		$	7,748		$	9,034			(4	)%		(5	)%	$	17,576		$	17,440			1	%
Provision for Credit Losses		203			15			139			223			435			NM			(53	)		218			1,178			(81	)
Noninterest Expense		9,471			6,059			5,220			5,095			5,832			56			62			15,530			11,373			37
Net Income (Loss)		(548	)		1,930			1,864			1,628			1,827			NM			NM			1,382			3,227			(57	)
Per Common Share:
Net Income (Loss) per Share:
Basic	$	(0.27	)	$	0.94		$	0.92		$	0.80		$	0.90			NM			NM		$	0.67		$	1.60			(58	)
Diluted		(0.27	)		0.92			0.89			0.78			0.89			NM			NM			0.65			1.57			(59	)
Cash Dividends Declared per Share		0.34			0.34			0.34			0.34			0.34			—			—			0.68			0.68			—
Book Value per Share (Period-End)		21.52			22.62			22.10			21.55			21.53			(5	)		—
Closing Share Price		38.77			41.95			36.73			34.33			34.18			(8	)		13
Common Shares Outstanding:
Average:
Basic		2,042.8			2,032.3			2,016.2			2,012.2			2,005.6			1			2			2,037.6			2,002.8			2
Diluted		2,099.6			2,092.7			2,079.3			2,068.2			2,050.6			—			2			2,096.3			2,036.3			3
Common Shares at Period-End		2,087.5			2,081.7			2,042.6			2,039.2			2,035.1			—			3
SELECTED RATIOS:
Return on Average Common Equity (a)		NM			17	%		17	%		15	%		17	%		NM			NM			6	%		15	%		(900	)bp
Tier 1 Capital Ratio		8.2	%(b)		8.4			8.5			8.7			8.4			(20	)bp		(20	)bp
SELECTED BALANCE SHEET DATA (PERIOD-END):
Total Assets	$	817,763		$	801,078		$	770,912		$	792,700		$	802,603			2	%		2	%
Deposits		346,539			336,886			326,492			313,626			318,248			3			9
Common Stockholders’ Equity		44,932			47,092			45,145			43,948			43,812			(5	)		3
FULL-TIME EQUIVALENT EMPLOYEES		91,008			93,285			93,453			92,940			92,256			(2	)		(1	)
SEGMENT EARNINGS
Investment Bank	$	703		$	1,110		$	864		$	877		$	1,037			(37	)		(32	)	$	1,813		$	1,933			(6	)%
Treasury & Securities Services		121			119			143			140			111			2			9			240			223			8
Investment Management & Private Banking		93			116			100			79			58			(20	)		60			209			84			149
JPMorgan Partners		187			116			23			6			(96	)		61			NM			303			(318	)		NM
Chase Financial Services		620			427			560			432			853			45			(27	)		1,047			1,501			(30	)
Support Units and Corporate		82			42			174			94			(136	)		95			NM			124			(196	)		NM

Operating Earnings (c)	$	1,806		$	1,930		$	1,864		$	1,628		$	1,827			(6	)		(1	)	$	3,736		$	3,227			16

(a)		Based on annualized amounts.
(b)		Estimated
(c)		Refer to page 8 for a reconciliation between reported Net Income and Operating Earnings.

Page 3


J.P. MORGAN CHASE & CO. STATEMENT OF INCOME — REPORTED BASIS (in millions, except per share, ratio and employee data)


																2QTR 2004												YTD 2004
	2QTR			1QTR			4QTR			3QTR			2QTR			Change						Year-to-date						Change
	2004			2004			2003			2003			2003			1Q 2004			2Q 2003			2004			2003			2003
REVENUE
Investment Banking Fees	$	893		$	692		$	846		$	649		$	779			29	%		15	%	$	1,585		$	1,395			14	%
Trading Revenue		873			1,720			754			829			1,546			(49	)		(44	)		2,593			2,844			(9	)
Fees and Commissions		2,968			2,933			2,871			2,742			2,551			1			16			5,901			5,039			17
Private Equity Gains (Losses)		421			306			163			120			(29	)		38			NM			727			(250	)		NM
Securities Gains		39			126			29			164			768			(69	)		(95	)		165			1,253			(87	)
Mortgage Fees and Related Income		327			244			140			8			311			34			5			571			744			(23	)
Other Revenue		253			126			254			188			45			101			462			379			137			177

Total Noninterest Revenue		5,774			6,147			5,057			4,700			5,971			(6	)		(3	)		11,921			11,162			7
Interest Income		5,453			5,478			5,614			5,696			5,871			—			(7	)		10,931			12,134			(10	)
Interest Expense		2,628			2,648			2,603			2,648			2,808			(1	)		(6	)		5,276			5,856			(10	)

Net Interest Income		2,825			2,830			3,011			3,048			3,063			—			(8	)		5,655			6,278			(10	)

Revenue before Provision for Credit Losses		8,599			8,977			8,068			7,748			9,034			(4	)		(5	)		17,576			17,440			1
Provision for Credit Losses		203			15			139			223			435			NM			(53	)		218			1,178			(81	)

TOTAL NET REVENUE		8,396			8,962			7,929			7,525			8,599			(6	)		(2	)		17,358			16,262			7

NONINTEREST EXPENSE
Compensation Expense		3,011			3,370			2,577			2,713			3,231			(11	)		(7	)		6,381			6,405			—
Occupancy Expense		440			431			482			391			543			2			(19	)		871			1,039			(16	)
Technology and Communications Expense		786			819			756			719			732			(4	)		7			1,605			1,369			17
Other Expense		1,444			1,439			1,405			1,272			1,226			—			18			2,883			2,460			17
Litigation Reserve (a)		3,700			—			—			—			100			NM			NM			3,700			100			NM
Merger Costs		90			—			—			—			—			NM			NM			90			—			NM

TOTAL NONINTEREST EXPENSE		9,471			6,059			5,220			5,095			5,832			56			62			15,530			11,373			37

Income (Loss) before Income Tax Expense		(1,075	)		2,903			2,709			2,430			2,767			NM			NM			1,828			4,889			(63	)
Income Tax Expense (Benefit)		(527	)		973			845			802			940			NM			NM			446			1,662			(73	)

NET INCOME (LOSS)	$	(548	)	$	1,930		$	1,864		$	1,628		$	1,827			NM			NM		$	1,382		$	3,227			(57	)

NET INCOME (LOSS) APPLICABLE TO COMMON STOCK	$	(561	)	$	1,917		$	1,851		$	1,615		$	1,815			NM			NM		$	1,356		$	3,202			(58	)

NET INCOME (LOSS) PER COMMON SHARE
Basic	$	(0.27	)	$	0.94		$	0.92		$	0.80		$	0.90			NM			NM		$	0.67		$	1.60			(58	)
Diluted		(0.27	)		0.92			0.89			0.78			0.89			NM			NM			0.65			1.57			(59	)
FINANCIAL RATIOS
Return on Average Assets (b)		NM			1.01	%		0.95	%		0.83	%		0.96	%		NM			NM			0.35	%		0.84	%		(49	)bp
Return on Average Common Equity (b)		NM			17			17			15			17			NM			NM			6			15			(900	)
Common Dividend Payout Ratio		NM			38			38			44			40			NM			NM			106			44			6,200
Effective Income Tax Rate		49	%		34			31			33			34			1,500	bp		1,500	bp		24			34			(1,000	)
Overhead Ratio		110			67			65			66			65			4,300			4,500			88			65			2,300
FULL-TIME EQUIVALENT EMPLOYEES		91,008			93,285			93,453			92,940			92,256			(2	)%		(1	)%

(a)		Reflects a $3.7 billion and $100 million addition to the Litigation Reserve.
(b)		Based on annualized amounts.

Page 4


J.P. MORGAN CHASE & CO. SELECTED NONINTEREST REVENUE AND NONINTEREST EXPENSE DETAIL (in millions)


											2QTR 2004										YTD 2004
	2QTR		1QTR		4QTR		3QTR		2QTR		Change						Year-to-date				Change
	2004		2004		2003		2003		2003		1Q 2004			2Q 2003			2004		2003		2003
NONINTEREST REVENUE
Fees and Commissions:
Investment Management and Service Fees	$	668	$	668	$	618	$	573	$	508		—	%		31	%	$	1,336	$	1,053		27	%
Custody and Institutional Trust Service Fees		478		442		431		404		408		8			17			920		766		20
Credit Card Fees		767		734		825		756		698		4			10			1,501		1,390		8
Brokerage Commissions		350		401		316		310		296		(13	)		18			751		555		35
Lending-Related Service Fees		148		139		172		157		127		6			17			287		251		14
Deposit Service Fees		264		274		279		298		284		(4	)		(7	)		538		569		(5	)
Other Fees		293		275		230		244		230		7			27			568		455		25

Total	$	2,968	$	2,933	$	2,871	$	2,742	$	2,551		1			16		$	5,901	$	5,039		17

NONINTEREST EXPENSE
Other Expense:
Professional Services	$	329	$	372	$	394	$	325	$	324		(12	)		2		$	701	$	649		8
Outside Services		355		376		311		294		310		(6	)		15			731		582		26
Marketing		202		199		200		179		167		2			21			401		331		21
Travel and Entertainment		123		118		128		103		102		4			21			241		191		26
Amortization of Intangibles		79		79		74		73		73		—			8			158		147		7
All Other		356		295		298		298		250		21			42			651		560		16

Total	$	1,444	$	1,439	$	1,405	$	1,272	$	1,226		—			18		$	2,883	$	2,460		17

Page 5


J.P. MORGAN CHASE & CO. CONSOLIDATED BALANCE SHEET (in millions)


																Jun 30, 2004
																Change
	Jun 30			Mar 31			Dec 31			Sep 30			Jun 30			Mar 31			Jun 30
	2004			2004			2003			2003			2003			2004			2003
ASSETS
Cash and Due from Banks	$	23,525		$	19,419		$	20,268		$	18,585		$	23,398			21	%		1	%
Deposits with Banks		39,135			35,600			10,175			10,601			10,393			10			277
Federal Funds Sold and Securities Purchased under Resale Agreements		100,851			79,414			76,868			88,752			69,748			27			45
Securities Borrowed		44,947			49,881			41,834			37,096			41,067			(10	)		9
Trading Assets:
Debt and Equity Instruments		187,640			189,549			169,120			146,731			139,275			(1	)		35
Derivative Receivables (a)		49,980			58,434			83,751			83,787			93,602			(14	)		(47	)
Securities		64,915			70,747			60,244			65,152			82,549			(8	)		(21	)
Loans (Net of Allowance for Loan Losses)		221,971			213,510			214,995			231,448			222,307			4			—
Private Equity Investments		6,663			7,097			7,250			7,797			7,901			(6	)		(16	)
Goodwill		8,731			8,730			8,511			8,134			8,132			—			7
Other Intangibles:
Mortgage Servicing Rights		5,707			4,189			4,781			4,007			2,967			36			92
Purchased Credit Card Relationships		893			953			1,014			1,078			1,141			(6	)		(22	)
All Other Intangibles		799			813			685			311			320			(2	)		150
Other Assets		62,006			62,742			71,416			89,221			99,803			(1	)		(38	)

TOTAL ASSETS	$	817,763		$	801,078		$	770,912		$	792,700		$	802,603			2			2

LIABILITIES
Deposits:
Noninterest-Bearing	$	95,292		$	87,428		$	79,465		$	81,865		$	88,096			9			8
Interest-Bearing		251,247			249,458			247,027			231,761			230,152			1			9

Total Deposits		346,539			336,886			326,492			313,626			318,248			3			9
Federal Funds Purchased and Securities Sold under Repurchase Agreements		152,619			148,526			113,466			131,959			155,330			3			(2	)
Commercial Paper		15,300			14,972			14,284			14,790			12,382			2			24
Other Borrowed Funds		9,435			10,414			8,925			8,174			12,176			(9	)		(23	)
Trading Liabilities:
Debt and Equity Instruments		82,338			80,303			78,222			87,516			72,825			3			13
Derivative Payables (a)		42,838			53,883			71,226			68,285			72,831			(20	)		(41	)
Accounts Payable, Accrued Expenses and Other Liabilities (including the Allowance for Lending-Related Commitments)		56,576			43,656			45,066			54,333			64,072			30			(12	)
Beneficial Interests Issued by Consolidated Variable Interest Entities (b)		6,562			7,543			12,295			18,399			—			(13	)		NM
Long-Term Debt		52,981			50,062			48,014			43,945			43,371			6			22
Junior Subordinated Deferrable Interest Debentures Held by Trusts that Issued Guaranteed Capital Debt Securities		6,634			6,732			6,768			6,716			1,108			(1	)		499
Guaranteed Preferred Beneficial Interests in Capital Debt Securities Issued by Consolidated Trusts		—			—			—			—			5,439			NM			NM

TOTAL LIABILITIES		771,822			752,977			724,758			747,743			757,782			3			2
STOCKHOLDERS’ EQUITY
Preferred Stock		1,009			1,009			1,009			1,009			1,009			—			—
Common Stock		2,095			2,088			2,044			2,041			2,036			—			3
Capital Surplus		14,426			14,193			13,512			13,238			12,898			2			12
Retained Earnings		29,596			30,878			29,681			28,540			27,633			(4	)		7
Accumulated Other Comprehensive Income (Loss)		(910	)		177			(30	)		187			1,293			NM			NM
Treasury Stock, at Cost		(275	)		(244	)		(62	)		(58	)		(48	)		(13	)		(473	)

TOTAL STOCKHOLDERS’ EQUITY		45,941			48,101			46,154			44,957			44,821			(4	)		2

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	817,763		$	801,078		$	770,912		$	792,700		$	802,603			2			2

(a)		Effective January 1, 2004, the Firm elected to net cash paid and received under credit support annexes to legally enforceable master netting agreements.
(b)		Not applicable for periods prior to the Firm’s adoption of FIN 46 on July 1, 2003.

Page 6


J.P. MORGAN CHASE & CO. CONDENSED AVERAGE BALANCE SHEET AND ANNUALIZED YIELDS (in millions)


																2QTR 2004												YTD 2004
	2QTR			1QTR			4QTR			3QTR			2QTR			Change						Year-to-date						Change
	2004			2004			2003			2003			2003			1Q 2004			2Q 2003			2004			2003			2003
AVERAGE BALANCES
ASSETS
Deposits with Banks	$	26,905		$	21,535		$	11,724		$	10,163		$	7,061			25	%		281	%	$	24,220		$	8,521			184	%
Federal Funds Sold and Securities Purchased under Resale Agreements		87,080			82,555			94,773			89,865			76,690			5			14			84,818			82,143			3
Securities Borrowed		54,233			48,609			40,371			40,019			42,160			12			29			51,421			40,417			27
Trading Assets — Debt and Equity Instruments		153,547			166,389			156,958			138,829			138,503			(8	)		11			159,968			150,064			7
Securities		64,149			63,992			63,903			75,032			86,830			—			(26	)		64,070			85,549			(25	)
Loans		225,344			217,478			230,795			237,508			219,950			4			2			221,411			217,927			2

Total Interest-Earning Assets		611,258			600,558			598,524			591,416			571,194			2			7			605,908			584,621			4
Noninterest-Earning Assets		191,612			170,760			179,995			191,010			193,461			12			(1	)		181,186			186,788			(3	)

TOTAL ASSETS	$	802,870		$	771,318		$	778,519		$	782,426		$	764,655			4			5		$	787,094		$	771,409			2

LIABILITIES
Interest-Bearing Deposits	$	254,034		$	238,206		$	237,636		$	221,539		$	225,950			7			12		$	246,120		$	225,671			9
Federal Funds Purchased and Securities Sold under Repurchase Agreements		155,335			145,370			141,089			148,132			164,386			7			(6	)		150,354			177,701			(15	)
Commercial Paper		14,283			13,153			13,293			13,088			12,929			9			10			13,718			13,588			1
Other Borrowings (a)		80,364			80,388			74,551			72,191			63,524			—			27			80,375			65,974			22
Beneficial Interests Issued by Consolidated Variable Interest Entities (b)		7,433			9,764			17,585			19,791			—			(24	)		NM			8,598			—			NM
Long-Term Debt		57,019			53,574			52,408			48,685			49,219			6			16			55,297			47,619			16

Total Interest-Bearing Liabilities		568,468			540,455			536,562			523,426			516,008			5			10			554,462			530,553			5
Noninterest-Bearing Liabilities		186,529			184,036			196,771			214,860			204,879			1			(9	)		185,282			197,536			(6	)

TOTAL LIABILITIES		754,997			724,491			733,333			738,286			720,887			4			5			739,744			728,089			2

Preferred Stock		1,009			1,009			1,009			1,009			1,009			—			—			1,009			1,009			—
Common Stockholders’ Equity		46,864			45,818			44,177			43,131			42,759			2			10			46,341			42,311			10

TOTAL STOCKHOLDERS’ EQUITY		47,873			46,827			45,186			44,140			43,768			2			9			47,350			43,320			9

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	802,870		$	771,318		$	778,519		$	782,426		$	764,655			4			5		$	787,094		$	771,409			2

AVERAGE RATES
INTEREST-EARNING ASSETS
Deposits with Banks		1.68	%		1.62	%		2.88	%		0.93	%		2.39	%		6	bp		(71	)bp		1.66	%		2.50	%		(84	)bp
Federal Funds Sold and Securities Purchased under Resale Agreements		1.45			1.49			1.36			1.52			1.85			(4	)		(40	)		1.47			2.03			(56	)
Securities Borrowed		0.66			0.77			0.74			0.71			0.75			(11	)		(9	)		0.72			0.88			(16	)
Trading Assets		4.37			4.35			4.19			4.27			4.65			2			(28	)		4.36			4.65			(29	)
Securities		4.58			4.21			4.49			4.69			4.62			37			(4	)		4.40			4.62			(22	)
Loans		4.56			4.69			4.74			4.83			5.12			(13	)		(56	)		4.62			5.22			(60	)
Total Interest-Earning Assets		3.60			3.68			3.73			3.83			4.13			(8	)		(53	)		3.64			4.20			(56	)
INTEREST-BEARING LIABILITIES
Interest-Bearing Deposits		1.28			1.37			1.33			1.41			1.69			(9	)		(41	)		1.33			1.80			(47	)
Federal Funds Purchased and Securities Sold under Repurchase Agreements		1.16			1.24			1.16			1.29			1.41			(8	)		(25	)		1.20			1.48			(28	)
Commercial Paper		0.98			0.96			0.98			1.00			1.22			2			(24	)		0.97			1.26			(29	)
Other Borrowings		4.47			4.57			4.91			5.12			5.39			(10	)		(92	)		4.52			5.18			(66	)
Beneficial Interests Issued by Consolidated Variable Interest Entities		2.04			1.60			1.36			0.92			—			44			NM			1.79			—			NM
Long-Term Debt		2.85			3.02			2.86			3.01			3.14			(17	)		(29	)		2.94			3.18			(24	)
Total Interest-Bearing Liabilities		1.86			1.97			1.92			2.01			2.18			(11	)		(32	)		1.91			2.23			(32	)
INTEREST RATE SPREAD		1.74	%		1.71	%		1.81	%		1.82	%		1.95	%		3			(21	)		1.73	%		1.97	%		(24	)

NET INTEREST MARGIN		1.87	%		1.90	%		2.00	%		2.05	%		2.16	%		(3	)		(29	)		1.89	%		2.18	%		(29	)

NET INTEREST MARGIN ADJUSTED FOR SECURITIZATIONS		2.19	%		2.22	%		2.32	%		2.36	%		2.47	%		(3	)		(28	)		2.21	%		2.48	%		(27	)

(a)		Includes securities sold but not yet purchased.
(b)		Not applicable for periods prior to the Firm’s adoption of FIN 46 on July 1, 2003.

Page 7

(JP MORGAN CHASE LOGO)

OPERATING BASIS

In addition to analyzing the Firm’s results on a reported basis, management reviews the line-of-business results on an “operating basis,” which is a non-GAAP financial measure. The definition of operating basis starts with the reported U.S. GAAP results. In the case of IB, operating basis includes in Trading Revenue net interest income related to trading activities. Trading activities generate revenues which are recorded for GAAP purposes in two line items on the income statement: Trading Revenue, which includes the mark-to-market gains or losses on trading positions; and Net Interest Income, which includes the interest income or expense related to those positions. Combining both the trading revenue and related net interest income enables management to evaluate IB’s trading activities, by considering all revenue related to these activities, and facilitates operating comparisons to other competitors. In the case of Chase Cardmember Services, operating or managed basis excludes the impact of credit card securitizations on revenue, the provision for credit losses, net charge-offs and receivables. JPMorgan Chase uses the concept of “managed receivables” to evaluate the credit 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 impact 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. Operating basis excludes the Litigation Reserve and Merger Costs, as management believes these items are not part of the Firm’s normal daily business operations and, therefore, not indicative of trends, and also do not provide meaningful comparisons with other periods.


J.P. MORGAN CHASE & CO. STATEMENT OF INCOME — OPERATING BASIS (in millions, except per share and ratio data)


																2QTR 2004												YTD 2004
	2QTR			1QTR			4QTR			3QTR			2QTR			Change						Year-to-date						Change
	2004			2004			2003			2003			2003			1Q 2004			2Q 2003			2004			2003			2003
OPERATING REVENUE
Investment Banking Fees	$	893		$	692		$	846		$	649		$	779			29	%		15	%	$	1,585		$	1,395			14	%
Trading-Related Revenue (Includes Trading NII)		1,312			2,296			1,272			1,278			2,025			(43	)		(35	)		3,608			4,006			(10	)
Fees and Commissions		2,832			2,784			2,687			2,569			2,429			2			17			5,616			4,748			18
Private Equity Gains (Losses)		421			306			163			120			(29	)		38			NM			727			(250	)		NM
Securities Gains		39			126			29			164			768			(69	)		(95	)		165			1,253			(87	)
Mortgage Fees and Related Income		327			244			140			8			311			34			5			571			744			(23	)
Other Revenue		208			87			225			174			21			139			NM			295			109			171
Net Interest Income (Excludes Trading NII)		3,053			2,915			3,168			3,257			3,210			5			(5	)		5,968			6,372			(6	)

TOTAL OPERATING REVENUE		9,085			9,450			8,530			8,219			9,514			(4	)		(5	)		18,535			18,377			1

OPERATING EXPENSE
Compensation Expense (a)		3,011			3,370			2,577			2,713			3,231			(11	)		(7	)		6,381			6,405			—
Noncompensation Expense (a) (b)		2,670			2,689			2,643			2,382			2,601			(1	)		3			5,359			4,968			8

TOTAL OPERATING EXPENSE		5,681			6,059			5,220			5,095			5,832			(6	)		(3	)		11,740			11,373			3
Operating Margin		3,404			3,391			3,310			3,124			3,682			—			(8	)		6,795			7,004			(3	)
Credit Costs		689			488			601			694			915			41			(25	)		1,177			2,115			(44	)

Operating Income before Income Tax Expense		2,715			2,903			2,709			2,430			2,767			(6	)		(2	)		5,618			4,889			15
Income Tax Expense		909			973			845			802			940			(7	)		(3	)		1,882			1,662			13

OPERATING EARNINGS	$	1,806		$	1,930		$	1,864		$	1,628		$	1,827			(6	)		(1	)	$	3,736		$	3,227			16

SELECTED METRICS
Diluted Earnings per Share	$	0.85		$	0.92		$	0.89		$	0.78		$	0.89			(8	)		(4	)	$	1.77		$	1.57			13
Return on Average Managed Assets (c) (e)		0.87	%		0.96	%		0.91	%		0.79	%		0.92	%		(9	)bp		(5	)bp		0.92	%		0.81	%		(11	)bp
Return on Average Allocated Capital (d) (e)		15			17			17			15			17			(200	)		(200	)		16			15			100
Compensation Expense as a % of Operating Revenue		33			36			30			33			34			(300	)		(100	)		34			35			(100	)
Noncompensation Expense as a % of Operating Revenue		29			28			31			29			27			100			200			29			27			200
Overhead Ratio		63			64			61			62			61			(100	)		200			63			62			100
RECONCILIATION OF NET INCOME (LOSS) TO OPERATING EARNINGS
Net Income (Loss)	$	(548	)	$	1,930		$	1,864		$	1,628		$	1,827			NM			NM		$	1,382		$	3,227			(57	)%
Reconciling Items (Net of Taxes):
Litigation Reserve		2,294			—			—			—			—			NM			NM			2,294			—			NM
Merger Costs		60			—			—			—			—			NM			NM			60			—			NM

Operating Earnings	$	1,806		$	1,930		$	1,864		$	1,628		$	1,827			(6	)%		(1	)%	$	3,736		$	3,227			16

EARNINGS PER SHARE — DILUTED
Net Income (Loss)	$	(0.27	)	$	0.92		$	0.89		$	0.78		$	0.89			NM			NM		$	0.65		$	1.57			(59	)
Reconciling Items (Net of Taxes):
Litigation Reserve		1.09			—			—			—			—			NM			NM			1.09			—			NM
Merger Costs		0.03			—			—			—			—			NM			NM			0.03			—			NM

Operating Earnings	$	0.85		$	0.92		$	0.89		$	0.78		$	0.89			(8	)		(4	)	$	1.77		$	1.57			13

RECONCILIATION OF OPERATING EARNINGS TO SHAREHOLDER VALUE ADDED
Operating Earnings	$	1,806		$	1,930		$	1,864		$	1,628		$	1,827			(6	)		(1	)	$	3,736		$	3,227			16
Less: Preferred Dividends		13			13			13			13			12			—			8			26			25			4

Earnings Applicable to Common Stock		1,793			1,917			1,851			1,615			1,815			(6	)		(1	)		3,710			3,202			16
Less: Cost of Capital (f)		1,398			1,367			1,337			1,304			1,279			2			9			2,765			2,518			10

Shareholder Value Added (g)	$	395		$	550		$	514		$	311		$	536			(28	)		(26	)	$	945		$	684			38

RECONCILIATION OF AVERAGE ASSETS TO AVERAGE MANAGED ASSETS
Average Assets	$	802,870		$	771,318		$	778,519		$	782,426		$	764,655			4			5		$	787,094		$	771,409			2
Average Credit Card Securitizations		33,026			33,357			33,445			32,497			31,665			(1	)		4			33,191			31,749			5

Average Managed Assets	$	835,896		$	804,675		$	811,964		$	814,923		$	796,320			4			5		$	820,285		$	803,158			2

(a)		Includes severance and other related costs associated with expense containment programs.
(b)		Includes Occupancy Expense, Technology and Communications Expense, Other Expense and, in the second quarter of 2003, Litigation Reserve.
(c)		Represents operating earnings as a percentage of average managed assets.
(d)		Represents operating earnings less preferred dividends as a percentage of average common equity.
(e)		Based on annualized amounts.
(f)		A 12% (after-tax) cost of capital, based on average allocated capital, is used by the Firm. To derive shareholder value added for the business segments, a 12% (after-tax) cost of capital is deducted from each business segment’s net income, except for JPMorgan Partners, which is charged a 15% (after-tax) cost of capital.
(g)		Management uses the SVA framework as its primary measure of profitability for the Firm and each of its business segments. To derive SVA, the Firm applies a cost of capital to each business segment. The capital elements and resultant capital charges provide the businesses and investors with a financial framework by which to evaluate the trade-off between the use of capital by each business unit versus its return to shareholders. JPMorgan Chase varies the amount of capital attributed to lines of business based on its estimate of the economic risk capital required by the line of business as a result of the credit, market, operational and business risk for each particular line of business and private equity risk for JPMorgan Partners. JPMorgan Chase believes this risk-adjusted approach to economic capital compensates for differing levels of risk across businesses, and therefore a constant 12% cost of capital can be applied across businesses with differing levels of risk. The cost of capital for JPMorgan Partners is 15%, because JPMorgan Chase believes that the business risk for JPMP is so sufficiently differentiated that, even after risk-adjustment, a higher cost of capital is warranted. Capital charges are an integral part of the SVA measurement for each business. Under the Firm’s model, average common equity is either underallocated or overallocated to the business segments, as compared with the Firm’s total common stockholders’ equity. The revenue and SVA impact of this over/under allocation is reported under Support Units and Corporate.

Page 8


J.P. MORGAN CHASE & CO. RECONCILIATION FROM REPORTED TO OPERATING BASIS (in millions)


																2QTR 2004												YTD 2004
	2QTR			1QTR			4QTR			3QTR			2QTR			Change						Year-to-date						Change
	2004			2004			2003			2003			2003			1Q 2004			2Q 2003			2004			2003			2003
REPORTED
Revenue
Investment Banking Fees	$	893		$	692		$	846		$	649		$	779			29	%		15	%	$	1,585		$	1,395			14	%
Trading Revenue		873			1,720			754			829			1,546			(49	)		(44	)		2,593			2,844			(9	)
Fees and Commissions		2,968			2,933			2,871			2,742			2,551			1			16			5,901			5,039			17
Private Equity Gains (Losses)		421			306			163			120			(29	)		38			NM			727			(250	)		NM
Securities Gains		39			126			29			164			768			(69	)		(95	)		165			1,253			(87	)
Mortgage Fees and Related Income		327			244			140			8			311			34			5			571			744			(23	)
Other Revenue		253			126			254			188			45			101			462			379			137			177
Net Interest Income		2,825			2,830			3,011			3,048			3,063			—			(8	)		5,655			6,278			(10	)

Total Revenue		8,599			8,977			8,068			7,748			9,034			(4	)		(5	)		17,576			17,440			1
Noninterest Expense
Litigation Reserve		3,700			—			—			—			100			NM			NM			3,700			100			NM
Merger Costs		90			—			—			—			—			NM			NM			90			—			NM
All Other Noninterest Expense		5,681			6,059			5,220			5,095			5,732			(6	)		(1	)		11,740			11,273			4

Total Noninterest Expense		9,471			6,059			5,220			5,095			5,832			56			62			15,530			11,373			37
Operating Margin		(872	)		2,918			2,848			2,653			3,202			NM			NM			2,046			6,067			(66	)
Provision for Credit Losses		203			15			139			223			435			NM			(53	)		218			1,178			(81	)

Income (Loss) before Income Tax Expense		(1,075	)		2,903			2,709			2,430			2,767			NM			NM			1,828			4,889			(63	)
Income Tax Expense (Benefit)		(527	)		973			845			802			940			NM			NM			446			1,662			(73	)

Net Income (Loss)	$	(548	)	$	1,930		$	1,864		$	1,628		$	1,827			NM			NM		$	1,382		$	3,227			(57	)

RECONCILING ITEMS (a)
Revenue
Trading-Related Revenue (b)	$	439		$	576		$	518		$	449		$	479			(24	)		(8	)	$	1,015		$	1,162			(13	)
Fees and Commissions (c)		(136	)		(149	)		(184	)		(173	)		(122	)		(9	)		11			(285	)		(291	)		(2	)
Other Revenue (c)		(45	)		(39	)		(29	)		(14	)		(24	)		15			88			(84	)		(28	)		200
Net Interest Income:
Trading-Related (b)		(439	)		(576	)		(518	)		(449	)		(479	)		(24	)		(8	)		(1,015	)		(1,162	)		(13	)
Credit Card Securitizations (c)		667			661			675			658			626			1			7			1,328			1,256			6

Total Net Interest Income		228			85			157			209			147			168			55			313			94			233
Total Revenue		486			473			462			471			480			3			1			959			937			2
Noninterest Expense
Litigation Reserve (d)		(3,700	)		—			—			—			—			NM			NM			(3,700	)		—			NM
Merger Costs (d)		(90	)		—			—			—			—			NM			NM			(90	)		—			NM
All Other Noninterest Expense		—			—			—			—			—			NM			NM			—			—			NM

Total Noninterest Expense		(3,790	)		—			—			—			—			NM			NM			(3,790	)		—			NM
Operating Margin		4,276			473			462			471			480			NM			NM			4,749			937			407
Securitized Credit Losses (c)		486			473			462			471			480			3			1			959			937			2

Income before Income Tax Expense		3,790			—			—			—			—			NM			NM			3,790			—			NM
Income Tax Expense		1,436			—			—			—			—			NM			NM			1,436			—			NM

Net Income	$	2,354		$	—		$	—		$	—		$	—			NM			NM		$	2,354		$	—			NM

OPERATING
Revenue
Investment Banking Fees	$	893		$	692		$	846		$	649		$	779			29			15		$	1,585		$	1,395			14
Trading-Related Revenue (Includes Trading NII)		1,312			2,296			1,272			1,278			2,025			(43	)		(35	)		3,608			4,006			(10	)
Fees and Commissions		2,832			2,784			2,687			2,569			2,429			2			17			5,616			4,748			18
Private Equity Gains (Losses)		421			306			163			120			(29	)		38			NM			727			(250	)		NM
Securities Gains		39			126			29			164			768			(69	)		(95	)		165			1,253			(87	)
Mortgage Fees and Related Income		327			244			140			8			311			34			5			571			744			(23	)
Other Revenue		208			87			225			174			21			139			NM			295			109			171
Net Interest Income (Excludes Trading NII)		3,053			2,915			3,168			3,257			3,210			5			(5	)		5,968			6,372			(6	)

Total Operating Revenue		9,085			9,450			8,530			8,219			9,514			(4	)		(5	)		18,535			18,377			1
Noninterest Expense
Litigation Reserve		—			—			—			—			100			NM			NM			—			100			NM
Merger Costs		—			—			—			—			—			NM			NM			—			—			NM
All Other Noninterest Expense		5,681			6,059			5,220			5,095			5,732			(6	)		(1	)		11,740			11,273			4

Total Noninterest Expense		5,681			6,059			5,220			5,095			5,832			(6	)		(3	)		11,740			11,373			3
Operating Margin		3,404			3,391			3,310			3,124			3,682			—			(8	)		6,795			7,004			(3	)
Credit Costs		689			488			601			694			915			41			(25	)		1,177			2,115			(44	)

Income before Income Tax Expense		2,715			2,903			2,709			2,430			2,767			(6	)		(2	)		5,618			4,889			15
Income Tax Expense		909			973			845			802			940			(7	)		(3	)		1,882			1,662			13

Operating Earnings	$	1,806		$	1,930		$	1,864		$	1,628		$	1,827			(6	)		(1	)	$	3,736		$	3,227			16

(a)		Represents only those line items on the Consolidated Statement of Income impacted by the reclassification of trading-related net interest income and the impact of credit card securitizations, as well as for the second quarter of 2004, the Litigation reserve and Merger costs line items on the Consolidated Statement of Income.
(b)		The reclassification of trading-related net interest income from Net Interest Income to Trading Revenue primarily impacts the Investment Bank segment results. See page 11 for further information.
(c)		The impact of credit card securitizations impacts Chase Cardmember Services. See page 19 for further information.
(d)		The impact of the Litigation Reserve and Merger Costs are excluded from Operating Earnings, as management believes these items are not part of the Firm’s normal daily business operations and, therefore, not indicative of trends, and also do not provide meaningful comparisons with other periods.

Page 9


J.P. MORGAN CHASE & CO. LINES OF BUSINESS FINANCIAL HIGHLIGHTS SUMMARY — OPERATING BASIS (in millions, except ratio data)


																2QTR 2004												YTD 2004
	2QTR			1QTR			4QTR			3QTR			2QTR			Change						Year-to-date						Change
	2004			2004			2003			2003			2003			1Q 2004			2Q 2003			2004			2003			2003
OPERATING REVENUE
Investment Bank	$	3,116		$	3,980		$	3,046		$	3,160		$	4,203			(22	)%		(26	)%	$	7,096		$	8,212			(14	)%
Treasury & Securities Services		1,187			1,106			1,071			1,007			979			7			21			2,293			1,905			20
Investment Management & Private Banking		805			824			822			737			677			(2	)		19			1,629			1,319			24
JPMorgan Partners		350			249			106			71			(80	)		41			NM			599			(367	)		NM
Chase Financial Services		3,684			3,414			3,609			3,355			3,975			8			(7	)		7,098			7,668			(7	)
Support Units and Corporate		(57	)		(123	)		(124	)		(111	)		(240	)		54			76			(180	)		(360	)		50

OPERATING REVENUE	$	9,085		$	9,450		$	8,530		$	8,219		$	9,514			(4	)		(5	)	$	18,535		$	18,377			1

OPERATING EARNINGS
Investment Bank	$	703		$	1,110		$	864		$	877		$	1,037			(37	)		(32	)	$	1,813		$	1,933			(6	)
Treasury & Securities Services		121			119			143			140			111			2			9			240			223			8
Investment Management & Private Banking		93			116			100			79			58			(20	)		60			209			84			149
JPMorgan Partners		187			116			23			6			(96	)		61			NM			303			(318	)		NM
Chase Financial Services		620			427			560			432			853			45			(27	)		1,047			1,501			(30	)
Support Units and Corporate		82			42			174			94			(136	)		95			NM			124			(196	)		NM

OPERATING EARNINGS	$	1,806	(a)	$	1,930		$	1,864		$	1,628		$	1,827			(6	)		(1	)	$	3,736		$	3,227			16

AVERAGE ALLOCATED CAPITAL
Investment Bank	$	14,999		$	15,973		$	16,966		$	18,937		$	20,130			(6	)		(25	)	$	15,486		$	20,499			(24	)
Treasury & Securities Services		3,197			3,183			2,734			2,616			2,779			—			15			3,190			2,776			15
Investment Management & Private Banking		5,369			5,470			5,466			5,537			5,533			(2	)		(3	)		5,420			5,508			(2	)
JPMorgan Partners		4,547			4,899			5,541			5,721			5,916			(7	)		(23	)		4,723			5,950			(21	)
Chase Financial Services		9,143			9,413			8,972			8,948			8,687			(3	)		5			9,278			8,589			8

TOTAL CAPITAL ALLOCATED TO BUSINESS SEGMENTS		37,255			38,938			39,679			41,759			43,045			(4	)		(13	)		38,097			43,322			(12	)
Support Units and Corporate		9,609			6,880			4,498			1,372			(286	)		40			NM			8,244			(1,011	)		NM

TOTAL AVERAGE ALLOCATED CAPITAL	$	46,864		$	45,818		$	44,177		$	43,131		$	42,759			2			10		$	46,341		$	42,311			10

RETURN ON AVERAGE ALLOCATED CAPITAL
Investment Bank		19	%		28	%		20	%		18	%		21	%		(900	)bp		(200	)bp		23	%		19	%		400	bp
Treasury & Securities Services		15			15			21			21			16			—			(100	)		15			16			(100	)
Investment Management & Private Banking		7			8			7			6			4			(100	)		300			8			3			500
JPMorgan Partners		16			9			2			—			NM			700			NM			13			NM			NM
Chase Financial Services		27			18			25			19			39			900			(1,200	)		23			35			(1,200	)
RETURN ON AVERAGE COMMON EQUITY		15			17			17			15			17			(200	)		(200	)		16			15			100

(a)

Excludes the after-tax impact of the $3.7 billion Litigation Reserve and $90 million of Merger Costs. See the Operating Basis section for a discussion of the non-GAAP adjustments to reported Net Income.

Page 10


J.P. MORGAN CHASE & CO. INVESTMENT BANK FINANCIAL HIGHLIGHTS (in millions, except ratios and employees)


																2QTR 2004												YTD 2004
	2QTR			1QTR			4QTR			3QTR			2QTR			Change						Year-to-date						Change
	2004			2004			2003			2003			2003			1Q 2004			2Q 2003			2004			2003			2003
OPERATING INCOME STATEMENT
REVENUE:
Trading Revenue (Includes Trading NII): (a)
Equities	$	(88	)	$	333		$	94		$	95		$	160			NM			NM		$	245		$	359			(32	)%
Fixed Income and Other		1,345			1,936			1,113			1,160			1,868			(31	)%		(28	)%		3,281			3,600			(9	)

		1,257			2,269			1,207			1,255			2,028			(45	)		(38	)		3,526			3,959			(11	)
Investment Banking Fees		883			682			834			636			765			29			15			1,565			1,385			13
Net Interest Income		399			374			463			538			585			7			(32	)		773			1,276			(39	)
Fees and Commissions		455			485			437			425			402			(6	)		13			940			780			21
Securities Gains		43			129			13			225			445			(67	)		(90	)		172			828			(79	)
All Other Revenue		79			41			92			81			(22	)		93			NM			120			(16	)		NM

TOTAL OPERATING REVENUE		3,116			3,980			3,046			3,160			4,203			(22	)		(26	)		7,096			8,212			(14	)

EXPENSE:
Compensation Expense		1,160			1,401			825			970			1,384			(17	)		(16	)		2,561			2,697			(5	)
Noncompensation Expense		933			942			943			860			955			(1	)		(2	)		1,875			1,825			3

Operating Expense (Excl. Nonmerger-related Severance & Related Costs)		2,093			2,343			1,768			1,830			2,339			(11	)		(11	)		4,436			4,522			(2	)
Nonmerger-related Severance & Related Costs		17			19			67			26			150			(11	)		(89	)		36			254			(86	)

TOTAL OPERATING EXPENSE		2,110			2,362			1,835			1,856			2,489			(11	)		(15	)		4,472			4,776			(6	)

Operating Margin		1,006			1,618			1,211			1,304			1,714			(38	)		(41	)		2,624			3,436			(24	)
Credit Costs		(128	)		(188	)		(241	)		(181	)		(5	)		32			NM			(316	)		241			NM
Corporate Credit Allocation		2			2			(5	)		(10	)		(9	)		—			NM			4			(21	)		NM

Operating Income Before Income Tax Expense		1,136			1,808			1,447			1,475			1,710			(37	)		(34	)		2,944			3,174			(7	)
Income Tax Expense		433			698			583			598			673			(38	)		(36	)		1,131			1,241			(9	)

OPERATING EARNINGS	$	703		$	1,110		$	864		$	877		$	1,037			(37	)		(32	)	$	1,813		$	1,933			(6	)

Average Allocated Capital	$	14,999		$	15,973		$	16,966		$	18,937		$	20,130			(6	)		(25	)	$	15,486		$	20,499			(24	)
Average Assets		536,265			513,553			511,333			512,017			495,213			4			8			524,909			510,405			3
Return on Average Allocated Capital		19	%		28	%		20	%		18	%		21	%		(900	)bp		(200	)bp		23	%		19	%		400	bp
Overhead Ratio		68			59			60			59			59			900			900			63			58			500
Overhead Ratio Excl. Severance and Related Costs		67			59			58			58			56			800			1,100			63			55			800
Compensation Expense as a % of Operating Revenue		38			36			28			31			34			200			400			37			34			300
Excl. Severance and Related Costs		37			35			27			31			33			200			400			36			33			300
FULL-TIME EQUIVALENT EMPLOYEES		15,197			14,814			14,574			14,296			14,270			3	%		6	%
Shareholder Value Added:
Operating Earnings	$	703		$	1,110		$	864		$	877		$	1,037			(37	)		(32	)	$	1,813		$	1,933			(6	)%
Less: Preferred Dividends		4			5			5			5			5			(20	)		(20	)		9			10			(10	)

Earnings Applicable to Common Stock		699			1,105			859			872			1,032			(37	)		(32	)		1,804			1,923			(6	)
Less: Cost of Capital		448			476			513			573			603			(6	)		(26	)		924			1,220			(24	)

Total Shareholder Value Added	$	251		$	629		$	346		$	299		$	429			(60	)		(41	)	$	880		$	703			25

(a)

Trading revenue, on a reported basis, excludes the impact of net interest income related to IB’s trading activities; this income is recorded within Net interest income. However, in assessing the profitability of IB’s trading business, the Firm combines these revenues for segment reporting. The amount reclassified from Net interest income to Trading revenue was $439 million, $576 million, $513 million, $451 million, and $484 million during the quarters ended June 30, 2004, March 31, 2004, December 31, 2003, September 30, 2003, and June 30, 2003, respectively.

Page 11


J.P. MORGAN CHASE & CO. INVESTMENT BANK BUSINESS-RELATED METRICS (in millions)


													2QTR 2004												YTD 2004
	2QTR		1QTR			4QTR		3QTR		2QTR			Change						Year-to-date						Change
	2004		2004			2003		2003		2003			1Q 2004			2Q 2003			2004			2003			2003
BUSINESS REVENUE:
INVESTMENT BANKING FEES
Underwriting:
Equity Underwriting	$	221	$	177		$	254	$	173	$	163			25	%		36	%	$	398		$	271			47	%
Debt Underwriting		394		358			423		302		440			10			(10	)		752			792			(5	)

Total Underwriting		615		535			677		475		603			15			2			1,150			1,063			8
Advisory		268		147			157		161		162			82			65			415			322			29

TOTAL INVESTMENT BANKING FEES		883		682			834		636		765			29			15			1,565			1,385			13

MARKETS & LENDING
Fixed Income		1,550		2,068			1,366		1,432		2,156			(25	)		(28	)		3,618			4,120			(12	)
Equities		193		673			342		339		388			(71	)		(50	)		866			819			6
Credit Portfolio		315		345			361		389		274			(9	)		15			660			669			(1	)

TOTAL MARKETS & LENDING		2,058		3,086			2,069		2,160		2,818			(33	)		(27	)		5,144			5,608			(8	)
TOTAL REVENUE (EXCLUDING GLOBAL TREASURY)		2,941		3,768			2,903		2,796		3,583			(22	)		(18	)		6,709			6,993			(4	)
Global Treasury		175		212			143		364		620			(17	)		(72	)		387			1,219			(68	)

TOTAL REVENUE	$	3,116	$	3,980		$	3,046	$	3,160	$	4,203			(22	)		(26	)	$	7,096		$	8,212			(14	)

MEMO:
GLOBAL TREASURY
Total Revenue	$	175	$	212		$	143	$	364	$	620			(17	)		(72	)	$	387		$	1,219			(68	)
Total-Return Adjustments		135		(229	)		79		127		(183	)		NM			NM			(94	)		(247	)		62

Total-Return Revenue (a)	$	310	$	(17	)	$	222	$	491	$	437			NM			(29	)	$	293		$	972			(70	)


			Full Year
	YTD 2004			2003
MARKET SHARE / RANKINGS: (b)
Global Syndicated Loans		22% / #1		20% / #1
Global Investment-Grade Bonds		8% / #2		9% / #2
Global Equity and Equity-Related		6% / #7		8% / #4
U.S. Equity and Equity-Related		8% / #4		11% / #4
Global Announced M&A		23% / #5		15% / #4

(a)		Total-return revenue (“TRR”), a non-GAAP financial measure, represents revenue plus the change in unrealized gains or losses on investment securities and hedges (included in Other comprehensive income) and internally transfer-priced assets and liabilities. TRR is a supplemental performance measure used by management to analyze performance of Global Treasury on an economic basis. Management believes the TRR measure is meaningful, because it measures all positions on a mark-to-market basis, thereby reflecting the true economic value of positions in the portfolio. This performance measure is consistent with the manner in which the portfolio is managed, as it removes the timing differences that result from applying the various GAAP accounting policies.
(b)		Derived from Thomson Financial Securities Data, which reflect subsequent updates to prior-period information. Global announced M&A is based on rank value; all other rankings are based on 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%. As disclosed by Thomson Financial, the market shares and rankings are presented on a combined basis reflecting the merger of JPMorgan Chase and Bank One.

Page 12


J.P. MORGAN CHASE & CO. TREASURY & SECURITIES SERVICES FINANCIAL HIGHLIGHTS (in millions, except ratios and employees)


																2QTR 2004												YTD 2004
	2QTR			1QTR			4QTR			3QTR			2QTR			Change						Year-to-date						Change
	2004			2004			2003			2003			2003			1Q 2004			2Q 2003			2004			2003			2003
OPERATING INCOME STATEMENT
REVENUE:
Fees and Commissions	$	791		$	745		$	676		$	654		$	632			6	%		25	%	$	1,536		$	1,230			25	%
Net Interest Income		323			313			304			311			307			3			5			636			597			7
All Other Revenue		73			48			91			42			40			52			83			121			78			55

TOTAL OPERATING REVENUE		1,187			1,106			1,071			1,007			979			7			21			2,293			1,905			20

EXPENSE:
Compensation Expense		348			343			322			309			309			1			13			691			622			11
Noncompensation Expense		642			571			504			480			482			12			33			1,213			930			30

Operating Expense (Excl. Nonmerger-related Severance & Related Costs)		990			914			826			789			791			8			25			1,904			1,552			23
Nonmerger-related Severance & Related Costs		10			7			23			10			24			43			(58	)		17			28			(39	)

TOTAL OPERATING EXPENSE		1,000			921			849			799			815			9			23			1,921			1,580			22

Operating Margin		187			185			222			208			164			1			14			372			325			14
Credit Costs		3			1			—			—			1			200			200			4			2			100
Corporate Credit Allocation		(2	)		(2	)		5			10			9			—			NM			(4	)		21			NM

Operating Income Before Income Tax Expense		182			182			227			218			172			—			6			364			344			6
Income Tax Expense		61			63			84			78			61			(3	)		—			124			121			2

OPERATING EARNINGS	$	121		$	119		$	143		$	140		$	111			2			9		$	240		$	223			8

Average Allocated Capital	$	3,197		$	3,183		$	2,734		$	2,616		$	2,779			—			15		$	3,190		$	2,776			15
Average Assets		21,623			19,785			20,525			18,037			19,334			9			12			20,704			18,426			12
Average Deposits		111,619			99,489			89,647			87,121			79,974			12			40			105,554			77,264			37
Return on Average Allocated Capital		15	%		15	%		21	%		21	%		16	%		—	bp		(100	)bp		15	%		16	%		(100	)bp
Overhead Ratio		84			83			79			79			83			100			100			84			83			100
Assets under Custody (in billions)	$	7,980		$	8,001		$	7,597		$	6,926		$	6,777			—	%		18	%
FULL-TIME EQUIVALENT EMPLOYEES		14,404			14,749			14,530			14,185			14,273			(2	)		1
Shareholder Value Added:
Operating Earnings	$	121		$	119		$	143		$	140		$	111			2			9		$	240		$	223			8	%
Less: Preferred Dividends		1			1			1			—			—			—			NM			2			1			100

Earnings Applicable to Common Stock		120			118			142			140			111			2			8			238			222			7
Less: Cost of Capital		95			96			82			80			83			(1	)		14			191			165			16

Total Shareholder Value Added	$	25		$	22		$	60		$	60		$	28			14			(11	)	$	47		$	57			(18	)

OPERATING REVENUE BY BUSINESS:
Treasury Services	$	544		$	537		$	485		$	497		$	468			1			16		$	1,081		$	942			15
Investor Services		455			399			381			370			360			14			26			854			701			22
Institutional Trust Services		274			257			252			233			238			7			15			531			437			22
Other		(86	)		(87	)		(47	)		(93	)		(87	)		1			1			(173	)		(175	)		1

Total Treasury & Securities Services	$	1,187		$	1,106		$	1,071		$	1,007		$	979			7			21		$	2,293		$	1,905			20

Page 13


J.P. MORGAN CHASE & CO. INVESTMENT MANAGEMENT & PRIVATE BANKING FINANCIAL HIGHLIGHTS (in millions, except ratios and employees)


																2QTR 2004												YTD 2004
	2QTR			1QTR			4QTR			3QTR			2QTR			Change						Year-to-date						Change
	2004			2004			2003			2003			2003			1Q 2004			2Q 2003			2004			2003			2003
OPERATING INCOME STATEMENT
REVENUE:
Fees and Commissions	$	644		$	657		$	617		$	572		$	508			(2	)%		27	%	$	1,301		$	1,018			28	%
Net Interest Income		113			117			118			116			117			(3	)		(3	)		230			232			(1	)
All Other Revenue		48			50			87			49			52			(4	)		(8	)		98			69			42

TOTAL OPERATING REVENUE		805			824			822			737			677			(2	)		19			1,629			1,319			24


EXPENSE:
Compensation Expense		337			322			299			307			294			5			15			659			579			14
Noncompensation Expense		327			312			315			305			289			5			13			639			584			9

Operating Expense (Excl. Nonmerger-related Severance & Related Costs)		664			634			614			612			583			5			14			1,298			1,163			12
Nonmerger-related Severance & Related Costs		5			1			19			11			7			400			(29	)		6			14			(57	)

TOTAL OPERATING EXPENSE		669			635			633			623			590			5			13			1,304			1,177			11

Operating Margin		136			189			189			114			87			(28	)		56			325			142			129
Credit Costs		(4	)		10			36			(7	)		—		NM			NM				6			6			—

Operating Income Before Income Tax Expense		140			179			153			121			87			(22	)		61			319			136			135
Income Tax Expense		47			63			53			42			29			(25	)		62			110			52			112

OPERATING EARNINGS	$	93		$	116		$	100		$	79		$	58			(20	)		60		$	209		$	84			149


Average Tangible Allocated Capital	$	1,212		$	1,316		$	1,318		$	1,389		$	1,385			(8	)		(12	)	$	1,264		$	1,361			(7	)
Average Goodwill Capital		4,157			4,154			4,148			4,148			4,148			—			—			4,156			4,147			—
Average Allocated Capital		5,369			5,470			5,466			5,537			5,533			(2	)		(3	)		5,420			5,508			(2	)
Average Assets		35,054			35,263			34,108			33,255			33,987			(1	)		3			35,158			33,811			4
Return on Tangible Allocated Capital (a)		31	%		36	%		31	%		23	%		17	%		(500	)bp		1,400	bp		34	%		12	%		2,200	bp
Return on Average Allocated Capital		7			8			7			6			4			(100	)		300			8			3			500
Overhead Ratio		83			77			77			85			87			600			(400	)		80			89			(900	)

FULL-TIME EQUIVALENT EMPLOYEES		7,954			7,940			7,872			7,849			8,027			—	%		(1	)%

Shareholder Value Added:
Operating Earnings	$	93		$	116		$	100		$	79		$	58			(20	)		60		$	209		$	84			149	%
Less: Preferred Dividends		2			2			2			2			2			—			—			4			3			33

Earnings Applicable to Common Stock		91			114			98			77			56			(20	)		63			205			81			153
Less: Cost of Tangible Allocated Capital		33			36			36			39			39			(8	)		(15	)		69			78			(12	)

Tangible Shareholder Value Added (a)		58			78			62			38			17			(26	)		241			136			3		NM
Less: Cost of Goodwill Capital		127			127			129			128			126			—			1			254			250			2

Shareholder Value Added	$	(69	)	$	(49	)	$	(67	)	$	(90	)	$	(109	)		(41	)		37		$	(118	)	$	(247	)		52

(a)

The Firm uses return on tangible allocated capital and tangible shareholder value added, non-GAAP financial measures, as two of several measures to evaluate the economics of the IMPB business segment. Return on tangible allocated capital and tangible shareholder value added measure return on an economic capital basis (that is, on a basis that takes into account the operational, business, credit and other risks to which this business is exposed, including the level of assets) but excludes the capital allocated for goodwill. The Firm utilizes these measures to facilitate operating comparisons of IMPB to other competitors.

Page 14


J.P. MORGAN CHASE & CO. INVESTMENT MANAGEMENT & PRIVATE BANKING ASSETS UNDER SUPERVISION (a) (in billions)


														2QTR 2004
	2QTR			1QTR		4QTR			3QTR		2QTR			Change
	2004(b)			2004		2003			2003		2003			1Q 2004			2Q 2003
Asset Class:
Liquidity	$	151		$	164	$	160		$	149	$	140			(8	)%		8	%
Fixed Income		145			144		144			146		150			1			(3	)
Equities and Other		274			276		255			232		222			(1	)		23

Assets under Management		570			584		559			527		512			(2	)		11
Custody / Brokerage / Administration / Deposits		218			213		199			193		182			2			20

Total Assets under Supervision	$	788		$	797	$	758		$	720	$	694			(1	)		14


Client Segment:
Retail
Assets under Management	$	107		$	112	$	101		$	88	$	84			(4	)		27
Custody / Brokerage / Administration / Deposits		80			78		71			66		61			3			31

Assets under Supervision		187			190		172			154		145			(2	)		29
Private Bank
Assets under Management		139			141		138			132		130			(1	)		7
Custody / Brokerage / Administration / Deposits		138			135		128			127		121			2			14

Assets under Supervision		277			276		266			259		251			—			10
Institutional
Assets under Management		324			331		320			307		298			(2	)		9

Total Assets under Supervision	$	788		$	797	$	758		$	720	$	694			(1	)		14


Geographic Region:
Americas
Assets under Management	$	362		$	370	$	360		$	348	$	348			(2	)		4
Custody / Brokerage / Administration / Deposits		186			183		170			165		155			2			20

Assets under Supervision		548			553		530			513		503			(1	)		9
Europe, Middle East & Africa and Asia/Pacific
Assets under Management		208			214		199			179		164			(3	)		27
Custody / Brokerage / Administration / Deposits		32			30		29			28		27			7			19

Assets under Supervision		240			244		228			207		191			(2	)		26

Total Assets under Supervision	$	788		$	797	$	758		$	720	$	694			(1	)		14


Assets Under Supervision Rollforward:
Beginning Balance	$	797		$	758	$	720		$	694	$	622			5			28
Net Asset Flows		(2	)		14		(2	)		4		(9	)	NM				78
Market / Other Impact (c)		(7	)		25		40			22		81		NM			NM

Ending Balance	$	788		$	797	$	758		$	720	$	694			(1	)		14

(a)		Excludes assets under management of American Century.
(b)		Estimated
(c)		Other includes the acquisition of American Century Retirement Plan Services Inc. in the second quarter of 2003.

Page 15


J.P. MORGAN CHASE & CO. JPMORGAN PARTNERS FINANCIAL HIGHLIGHTS (in millions, except ratios and employees)


																2QTR 2004												YTD 2004
	2QTR			1QTR			4QTR			3QTR			2QTR			Change						Year-to-date						Change
	2004			2004			2003			2003			2003			1Q 2004			2Q 2003			2004			2003			2003
OPERATING INCOME STATEMENT
REVENUE:
Direct Investments:
Realized Gains	$	402		$	302		$	202		$	134		$	153			33	%		163	%	$	704		$	199			254	%
Write-ups / (Write-downs / Write-offs)		(27	)		(23	)		(52	)		1			(177	)		(17	)		85			(50	)		(353	)		86
Mark-to-Market Gains (Losses) (a)		(1	)		25			48			26			147		NM			NM				24			141			(83	)

Total Direct Investments		374			304			198			161			123			23			204			678			(13	)	NM
Private Third-Party Fund Investments		18			(8	)		(39	)		(41	)		(145	)	NM			NM				10			(239	)	NM

Total Private Equity Gains (Losses) (b)		392			296			159			120			(22	)		32		NM				688			(252	)	NM
Net Interest Income (Loss)		(53	)		(59	)		(64	)		(61	)		(67	)		10			21			(112	)		(138	)		19
Fees and Other Revenue		11			12			11			12			9			(8	)		22			23			23			—

TOTAL OPERATING REVENUE		350			249			106			71			(80	)		41		NM				599			(367	)	NM


EXPENSE:
Compensation Expense		36			38			33			31			34			(5	)		6			74			67			10
Noncompensation Expense		32			31			38			32			38			3			(16	)		63			67			(6	)

TOTAL OPERATING EXPENSE		68			69			71			63			72			(1	)		(6	)		137			134			2

Operating Income (Loss) Before Income Tax Expense		282			180			35			8			(152	)		57		NM				462			(501	)	NM
Income Tax Expense (Benefit)		95			64			12			2			(56	)		48		NM				159			(183	)	NM

OPERATING EARNINGS (LOSS)	$	187		$	116		$	23		$	6		$	(96	)		61		NM			$	303		$	(318	)	NM


Average Allocated Capital	$	4,547		$	4,899		$	5,541		$	5,721		$	5,916			(7	)		(23	)	$	4,723		$	5,950			(21	)
Average Assets		7,270			7,769			8,199			8,653			9,008			(6	)		(19	)		7,520			9,217			(18	)
Return on Average Allocated Capital		16	%		9	%		2	%		—	%		NM			700	bp	NM				13	%		NM		NM

FULL-TIME EQUIVALENT EMPLOYEES		288			296			309			318			322			(3	)%		(11	)%

Shareholder Value Added:
Operating Earnings (Loss)	$	187		$	116		$	23		$	6		$	(96	)		61		NM			$	303		$	(318	)	NM
Less: Preferred Dividends		2			1			2			2			2			100			—			3			4			(25	)

Earnings (Loss) Applicable to Common Stock		185			115			21			4			(98	)		61		NM				300			(322	)	NM
Less: Cost of Capital		169			184			209			216			221			(8	)		(24	)		353			442			(20	)

Total Shareholder Value Added	$	16		$	(69	)	$	(188	)	$	(212	)	$	(319	)	NM			NM			$	(53	)	$	(764	)		93

(a)		Includes mark-to-market gains (losses) and reversals of mark-to-market gains (losses) due to public securities sales.
(b)		Includes the impact of portfolio hedging activities.

Page 16


J.P. MORGAN CHASE & CO. JPMORGAN PARTNERS INVESTMENT PORTFOLIO — PRIVATE AND PUBLIC SECURITIES (in millions)


											Jun 30, 2004
											Change
	Jun 30		Mar 31		Dec 31		Sep 30		Jun 30		Mar 31			Jun 30
	2004		2004		2003		2003		2003		2004			2003
PORTFOLIO INFORMATION

Public Securities (47 companies)(a)
Carrying Value	$	811	$	697	$	643	$	705	$	591		16	%		37	%
Cost		566		520		451		560		531		9			7
Quoted Public Value		1,306		1,107		994		1,083		868		18			50

Private Direct Securities (783 companies)(a)
Carrying Value		4,821		5,177		5,508		5,686		5,766		(7	)		(16	)
Cost		6,307		6,562		6,960		7,188		7,351		(4	)		(14	)

Private Third-Party Fund Investments (201 funds)(a)(b)
Carrying Value		751		961		1,099		1,406		1,544		(22	)		(51	)
Cost		1,208		1,512		1,736		2,020		2,121		(20	)		(43	)

Total Investment Portfolio — Carrying Value	$	6,383	$	6,835	$	7,250	$	7,797	$	7,901		(7	)		(19	)


Total Investment Portfolio — Cost	$	8,081	$	8,594	$	9,147	$	9,768	$	10,003		(6	)		(19	)

(a)		Represents the number of companies and funds at June 30, 2004.
(b)		Unfunded commitments to private equity funds were $850 million at June 30, 2004.

Page 17


J.P. MORGAN CHASE & CO. CHASE FINANCIAL SERVICES FINANCIAL HIGHLIGHTS (in millions, except ratios and employees)


																2QTR 2004												YTD 2004
	2QTR			1QTR			4QTR			3QTR			2QTR			Change						Year-to-date						Change
	2004			2004			2003			2003			2003			1Q 2004			2Q 2003			2004			2003			2003
OPERATING INCOME STATEMENT
REVENUE:
Net Interest Income	$	2,307		$	2,244		$	2,447		$	2,470		$	2,402			3	%		(4	)%	$	4,551		$	4,702			(3	)%
Fees and Commissions		937			876			948			897			893			7			5			1,813			1,718			6
Securities Gains (Losses)		—			—			18			(62	)		323		NM			NM				—			426		NM
Mortgage Fees and Related Income		355			241			137			8			310			47			15			596			742			(20	)
All Other Revenue		85			53			59			42			47			60			81			138			80			73

TOTAL OPERATING REVENUE		3,684			3,414			3,609			3,355			3,975			8			(7	)		7,098			7,668			(7	)


EXPENSE:
Compensation Expense		736			765			698			691			756			(4	)		(3	)		1,501			1,475			2
Noncompensation Expense		1,105			1,170			1,113			1,075			1,054			(6	)		5			2,275			2,118			7

Operating Expense (Excl. Nonmerger-related Severance & Related Costs)		1,841			1,935			1,811			1,766			1,810			(5	)		2			3,776			3,593			5
Nonmerger-related Severance & Related Costs		16			64			53			26			2			(75	)	NM				80			17			371

TOTAL OPERATING EXPENSE		1,857			1,999			1,864			1,792			1,812			(7	)		2			3,856			3,610			7

Operating Margin		1,827			1,415			1,745			1,563			2,163			29			(16	)		3,242			4,058			(20	)
Credit Costs		845			748			855			884			817			13			3			1,593			1,693			(6	)

Operating Income Before Income Tax Expense		982			667			890			679			1,346			47			(27	)		1,649			2,365			(30	)
Income Tax Expense		362			240			330			247			493			51			(27	)		602			864			(30	)

OPERATING EARNINGS	$	620		$	427		$	560		$	432		$	853			45			(27	)	$	1,047		$	1,501			(30	)


Average Allocated Capital	$	9,143		$	9,413		$	8,972		$	8,948		$	8,687			(3	)		5		$	9,278		$	8,589			8
Average Deposits		117,439			111,228			108,703			115,151			109,945			6			7			114,334			107,970			6
Return on Average Allocated Capital		27	%		18	%		25	%		19	%		39	%		900	bp		(1,200	)bp		23	%		35	%		(1,200	)bp
Overhead Ratio		50			59			52			53			46			(900	)		400			54			47			700

FULL-TIME EQUIVALENT EMPLOYEES		43,235			45,292			46,095			46,168			45,204			(5	)%		(4	)%

Shareholder Value Added:
Operating Earnings	$	620		$	427		$	560		$	432		$	853			45			(27	)	$	1,047		$	1,501			(30	)%
Less: Preferred Dividends		3			3			3			3			2			—			50			6			5			20

Earnings Applicable to Common Stock		617			424			557			429			851			46			(27	)		1,041			1,496			(30	)
Less: Cost of Capital		273			281			271			270			260			(3	)		5			554			511			8

Total Shareholder Value Added	$	344		$	143		$	286		$	159		$	591			141			(42	)	$	487		$	985			(51	)


RECONCILIATION OF AVERAGE REPORTED LOANS TO AVERAGE MANAGED LOANS
Average Reported Loans	$	161,296		$	153,416		$	158,923		$	160,324		$	151,861			5			6		$	157,356		$	147,062			7
Average Credit Card Securitizations		33,026			33,357			33,445			32,497			31,665			(1	)		4			33,191			31,749			5

Average Managed Loans	$	194,322		$	186,773		$	192,368		$	192,821		$	183,526			4			6		$	190,547		$	178,811			7


RECONCILIATION OF AVERAGE REPORTED ASSETS TO AVERAGE MANAGED ASSETS
Average Reported Assets	$	182,181		$	174,218		$	184,215		$	190,927		$	185,673			5			(2	)	$	178,188		$	178,163			—
Average Credit Card Securitizations		33,026			33,357			33,445			32,497			31,665			(1	)		4			33,191			31,749			5

Average Managed Assets	$	215,207		$	207,575		$	217,660		$	223,424		$	217,338			4			(1	)	$	211,379		$	209,912			1

Page 18


J.P. MORGAN CHASE & CO. CHASE FINANCIAL SERVICES BUSINESS FINANCIAL HIGHLIGHTS (in millions)


														2QTR 2004											YTD 2004
	2QTR		1QTR			4QTR			3QTR			2QTR		Change						Year-to-date					Change
	2004		2004			2003			2003			2003		1Q 2004			2Q 2003			2004			2003		2003
CHASE FINANCIAL SERVICES’ BUSINESSES
CHASE HOME FINANCE:
Operating Revenue:
Operating Revenue (Excl. MSR Risk Management Revenue) (a)	$	925	$	819		$	950		$	687		$	1,099		13	%		(16	)%	$	1,744		$	2,160		(19	)%
MSR Risk Management Revenue (a)		40		(7	)		(83	)		(6	)		233		NM			(83	)		33			319		(90	)

Total	$	965	$	812		$	867		$	681		$	1,332		19			(28	)	$	1,777		$	2,479		(28	)
Operating Expense		424		478			484			444			400		(11	)		6			902			781		15
Operating Earnings		321		221			238			118			561		45			(43	)		542			985		(45	)
CHASE CARDMEMBER SERVICES — REPORTED:
Revenue	$	1,106	$	1,090		$	1,158		$	1,099		$	1,032		1			7		$	2,196		$	2,036		8
Expense		570		605			561			557			543		(6	)		5			1,175			1,082		9
Provision for Credit Losses		263		232			330			234			232		13			13			495			470		5
Net Income		176		162			172			198			165		9			7			338			311		9
CHASE CARDMEMBER SERVICES — OPERATING: (b)
Revenue	$	1,592	$	1,563		$	1,620		$	1,570		$	1,512		2			5		$	3,155		$	2,973		6
Expense		570		605			561			557			543		(6	)		5			1,175			1,082		9
Credit Costs		749		705			792			705			712		6			5			1,454			1,407		3
Earnings		176		162			172			198			165		9			7			338			311		9
CHASE AUTO FINANCE:
Operating Revenue	$	218	$	166		$	207		$	216		$	221		31			(1	)	$	384		$	419		(8	)
Operating Expense		80		80			77			74			73		—			10			160			141		13
Operating Earnings		72		30			53			49			67		140			7			102			104		(2	)
CHASE REGIONAL BANKING:
Operating Revenue	$	654	$	635		$	653		$	636		$	656		3			—		$	1,289		$	1,287		—
Operating Expense		619		635			646			581			585		(3	)		6			1,254			1,162		8
Operating Earnings (Loss)		10		(15	)		(6	)		11			34		NM			(71	)		(5	)		61		NM
CHASE MIDDLE MARKET:
Operating Revenue	$	357	$	344		$	359		$	362		$	353		4			1		$	701		$	715		(2	)
Operating Expense		213		218			210			229			222		(2	)		(4	)		431			438		(2	)
Operating Earnings		73		81			92			66			78		(10	)		(6	)		154			165		(7	)

(a)		MSR represents Mortgage Servicing Rights.
(b)		See page 9 for a reconciliation of JPMorgan Chase’s results on a reported basis to the operating basis.

Page 19


J.P. MORGAN CHASE & CO. CHASE FINANCIAL SERVICES BUSINESS-RELATED METRICS (in billions, except ratios and where otherwise noted)


																2QTR 2004												YTD 2004
	2QTR			1QTR			4QTR			3QTR			2QTR			Change						Year-to-date						Change
	2004			2004			2003			2003			2003			1Q 2004			2Q 2003			2004			2003			2003
Chase Home Finance
Origination Volume by Channel: Retail, Wholesale and Correspondent	$	44.4		$	30.1		$	37.0		$	67.9		$	55.1			48	%		(19	)%	$	74.5		$	96.0			(22)	%
Correspondent Negotiated Transactions		12.4			7.7			14.0			25.8			22.5			61			(45	)		20.1			43.6			(54	)

Total		56.8			37.8			51.0			93.7			77.6			50			(27	)		94.6			139.6			(32	)
Origination Volume by Product: First Mortgage		47.0			31.1			43.7			86.3			71.8			51			(35	)		78.1			129.6			(40	)
Home Equity		9.8			6.7			7.3			7.4			5.8			46			69			16.5			10.0			65

Total		56.8			37.8			51.0			93.7			77.6			50			(27	)		94.6			139.6			(32	)
Loans Serviced		493			475			470			455			437			4			13			493			437			13
End-of-Period Outstandings		83.2			75.0			73.7			85.8			74.5			11			12			83.2			74.5			12
Total Average Loans Owned		79.2			72.1			79.4			80.6			71.2			10			11			75.6			67.1			13
Number of Customers (in millions)		4.2			4.1			4.1			4.0			3.9			2			8			4.2			3.9			8
MSR Carrying Value		5.7			4.2			4.8			4.0			3.0			36			90			5.7			3.0			90
30+ Day Delinquency Rate		1.18	%		1.32	%		1.81	%		2.05	%		2.23	%		(14	)bp		(105	)bp		1.18	%		2.23	%		(105	)bp
Net Charge-Off Ratio		0.14			0.16			0.19			0.15			0.18			(2	)		(4	)		0.15			0.19			(4	)
Overhead Ratio		44			59			56			65			30			(1,500	)		1,400			51			32			1,900
Chase Cardmember Services — Reported Basis
Average Outstandings	$	17.3		$	17.2		$	16.6		$	17.3		$	18.1			1	%		(4	)%	$	17.2		$	18.5			(7)	%
30+ Day Delinquency Rate		3.07	%		3.18	%		3.34	%		3.33	%		3.20	%		(11	)bp		(13	)bp		3.07	%		3.20	%		(13	)bp
Net Charge-Off Ratio		6.05			6.33			6.68			6.28			6.25			(28	)		(20	)		6.19			6.21			(2	)
Overhead Ratio		52			56			48			51			53			(400	)		(100	)		54			53			100
Chase Cardmember Services — Managed Basis
End-of-Period Outstandings	$	51.3		$	51.0		$	52.3		$	50.9		$	51.0			1	%		1	%	$	51.3		$	51.0			1	%
Average Outstandings		51.3			51.6			51.1			50.9			50.7			(1	)		1			51.5			50.8			1
Total Volume (a)		24.1			22.0			23.9			22.9			22.2			10			9			46.1			42.9			7
New Accounts (in millions)		1.0			1.0			1.0			1.1			1.0			—			—			2.0			2.1			(5	)
Active Accounts (in millions)		16.4			16.5			16.5			16.3			16.4			(1	)		—			16.4			16.4			—
Total Accounts (in millions)		31.0			30.8			30.8			30.6			30.3			1			2			31.0			30.3			2
Credit Cards Issued		35.7			35.4			35.3			34.8			34.3			1			4			35.7			34.3			4
30+ Day Delinquency Rate		4.27	%		4.43	%		4.68	%		4.62	%		4.40	%		(16	)bp		(13	)bp		4.27	%		4.40	%		(13	)bp
Net Charge-Off Ratio		5.84			5.80			5.76			5.83			6.02			4			(18	)		5.82			5.99			(17	)
Overhead Ratio		36			39			35			35			36			(300	)		—			37			36			100
Chase Auto Finance
Loan and Lease Receivables	$	43.5		$	44.0		$	43.2		$	42.8		$	41.7			(1	)%		4	%	$	43.5		$	41.7			4	%
Average Loan and Lease Receivables		44.1			44.3			43.5			42.1			41.7			—			6			44.2			40.7			9
Automobile Origination Volume (b)		5.4			6.8			5.5			7.0			7.9			(21	)		(32	)		12.2			15.3			(20	)
Automobile Market Share (Year-to-Date)		5.6	%		6.1	%		6.1	%		6.6	%		6.8	%		(50	)bp		(120	)bp		5.6	%(d)		6.8	%		(120	)bp
30+ Day Delinquency Rate		1.06			1.10			1.46			1.16			1.14			(4	)		(8	)		1.06			1.14			(8	)
Net Charge-Off Ratio		0.28			0.36			0.39			0.41			0.37			(8	)		(9	)		0.32			0.42			(10	)
Overhead Ratio		37			48			37			34			33			(1,100	)		400			42			34			800
Chase Regional Banking
Total Average Deposits	$	81.9		$	79.9		$	77.1		$	76.0		$	74.5			3	%		10	%	$	80.9		$	73.6			10	%
Total Client Assets (c)		117.9			118.4			111.1			109.5			108.1			—			9			118.2			107.0			10
Number of Branches / Banking Centers		536			532			529			528			527			1			2			536			527			2
Number of ATMs		1,711			1,718			1,730			1,740			1,735			—			(1	)		1,711			1,735			(1	)
Overhead Ratio		95	%		100	%		99	%		91	%		89	%		(500	)bp		600	bp		97	%		90	%		700	bp
Chase Middle Market
Total Average Loans	$	14.7		$	13.8		$	13.5		$	14.3		$	14.3			7	%		3	%	$	14.3		$	14.3			—	%
Total Average Deposits		33.0			31.6			28.9			29.1			27.2			4			21			32.3			27.9			16
Nonperforming Average Loans as a % of Total Average Loans		1.03	%		0.91	%		1.00	%		1.12	%		1.24	%		12	bp		(21	)bp		0.97	%		1.32	%		(35	)bp
Net Charge-Off Ratio		0.81			(0.03	)		0.16			0.61			0.40			NM			41			0.41			0.58			(17	)
Overhead Ratio		60			63			58			63			63			(300	)		(300	)		61			61			—

(a)		Sum of total customer purchases, cash advances and balance transfers.
(b)		Excludes amounts related to Chase Education Finance.
(c)		Deposits, money market funds and/or investment assets (including annuities).

Page 20

(JP MORGAN CHASE LOGO)

CREDIT-RELATED INFORMATION


J.P. MORGAN CHASE & CO. CREDIT-RELATED INFORMATION (in millions)


											Jun 30, 2004
											Change
	Jun 30		Mar 31		Dec 31		Sep 30		Jun 30		Mar 31			Jun 30
	2004		2004		2003		2003		2003		2004			2003
CREDIT EXPOSURE
Commercial Loans:
Loans — U.S.	$	47,747	$	47,273	$	52,024	$	58,082	$	55,693		1	%		(14	)%
Loans — Non-U.S.		31,492		31,942		31,073		30,326		35,363		(1	)		(11	)

Total Commercial Loans — Reported		79,239		79,215		83,097		88,408		91,056		—			(13	)
Consumer Loans:
1-4 Family Residential Mortgages — First Liens		59,188		54,284		54,460		68,873		57,593		9			3
Home Equity		25,146		21,617		19,252		16,981		17,327		16			45

1-4 Family Residential Mortgages		84,334		75,901		73,712		85,854		74,920		11			13
Credit Card — Reported		16,462		15,975		16,793		16,015		16,578		3			(1	)
Automobile Financings		39,456		39,118		38,695		38,867		38,151		1			3
Other Consumer		6,447		7,421		7,221		7,057		6,689		(13	)		(4	)

Total Consumer Loans — Reported		146,699		138,415		136,421		147,793		136,338		6			8

Total Loans — Reported		225,938		217,630		219,518		236,201		227,394		4			(1	)
Credit Card Securitizations		34,138		34,478		34,856		34,315		33,789		(1	)		1

Total Loans — Managed		260,076		252,108		254,374		270,516		261,183		3			—
Derivative Receivables (a)		49,980		58,434		83,751		83,787		93,602		(14	)		(47	)
Other Receivables		108		108		108		108		108		—			—
Commercial Lending-Related Commitments (b)		215,636		218,287		215,758		209,042		229,119		(1	)		(6	)

TOTAL (c)	$	525,800	$	528,937	$	553,991	$	563,453	$	584,012		(1	)		(10	)

Memo: Total by Category Total Commercial Exposure (d)	$	344,963	$	356,044	$	382,714	$	381,345	$	413,885		(3	)		(17	)
Total Consumer Managed Loans (c) (e)		180,837		172,893		171,277		182,108		170,127		5			6

Total	$	525,800	$	528,937	$	553,991	$	563,453	$	584,012		(1	)		(10	)

(a)		Effective January 1, 2004, derivative receivables Credit exposure takes into account net cash received under credit support annexes to legally enforceable master netting agreements.
(b)		Includes unused advised lines of credit of $21 billion at June 30, 2004.
(c)		Excludes consumer lending-related commitments.
(d)		Represents Total Commercial Loans, Derivative Receivables, Other Receivables and Commercial Lending-Related Commitments.
(e)		Represents Total Consumer Loans plus Credit Card Securitizations.

Page 21


J.P. MORGAN CHASE & CO. CREDIT-RELATED INFORMATION (CONT.) (in millions, except ratios)


																					Jun 30, 2004
																					Change
	Jun 30				Mar 31				Dec 31				Sep 30				Jun 30				Mar 31			Jun 30
	2004				2004				2003				2003				2003				2004			2003
COMMERCIAL CREDIT EXPOSURE
Total Commercial Loans	$	79,239			$	79,215			$	83,097			$	88,408			$	91,056				—	%		(13	)%
Derivative Receivables		49,980				58,434				83,751				83,787				93,602				(14	)		(47	)
Other Receivables		108				108				108				108				108				—			—
Commercial Lending-Related Commitments		215,636				218,287				215,758				209,042				229,119				(1	)		(6	)

Credit Exposure (a)	$	344,963	100	%	$	356,044	100	%	$	382,714	100	%	$	381,345	100	%	$	413,885	100	%		(3	)		(17	)

Risk Profile of Credit Exposure:
Investment-Grade	$	285,302	83	%	$	293,458	82	%	$	316,053	83	%	$	316,523	83	%	$	345,330	83	%		(3	)		(17	)
Noninvestment-Grade:
Noncriticized		53,304	15	%		54,868	15	%		57,782	15	%		53,457	14	%		55,711	14	%		(3	)		(4	)
Criticized Performing		4,163	1	%		5,224	2	%		6,457	1	%		8,240	2	%		9,479	2	%		(20	)		(56	)
Criticized Nonperforming		1,820	1	%		2,163	1	%		2,400	1	%		3,104	1	%		3,364	1	%		(16	)		(46	)
Purchased Held for Sale Commercial Loans (b)		374	0	%		331	0	%		22	0	%		21	0	%		1	0	%		13			NM

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 Noncriticized: BB+ / Ba1 to B- / B3
		Criticized: CCC+ / Caa1 & below
(a)		Credit exposure is net of risk participations, and effective January 1, 2004, the Firm elected to net cash paid and received under credit support annexes to legally enforceable master netting agreements. Credit exposure does not reflect the benefit of credit derivative hedges or, prior to January 1, 2004, liquid collateral held against derivatives contracts.
(b)		Represents distressed commercial loans purchased as part of the IB’s proprietary investing activities.

Page 22


J.P. MORGAN CHASE & CO. CREDIT-RELATED INFORMATION (CONT.) (in millions, except ratios)


																Jun 30, 2004
																Change
	Jun 30			Mar 31			Dec 31			Sep 30			Jun 30			Mar 31			Jun 30
	2004			2004			2003			2003			2003			2004			2003
NONPERFORMING ASSETS AND RATIOS
Commercial Loans:
Loans — U.S.	$	774		$	976		$	1,092		$	1,465		$	1,827			(21	)%		(58	)%
Loans — Non-U.S.		715			839			947			1,271			1,153			(15	)		(38	)

TOTAL COMMERCIAL LOANS (EXCLUDING PURCHASED HFS LOANS)		1,489			1,815			2,039			2,736			2,980			(18	)		(50	)
Consumer Loans:
1-4 Family Residential Mortgages — First Liens		253			285			291			293			275			(11	)		(8	)
Home Equity		52			59			58			57			55			(12	)		(5	)

Total Residential Loans		305			344			349			350			330			(11	)		(8	)
Credit Card — Reported		9			10			11			13			13			(10	)		(31	)
Automobile Financings		111			107			119			113			111			4			—
Other Consumer		55			58			66			70			66			(5	)		(17	)

TOTAL CONSUMER LOANS		480			519			545			546			520			(8	)		(8	)
TOTAL LOANS (EXCLUDING PURCHASED HFS COMMERCIAL LOANS)		1,969			2,334			2,584			3,282			3,500			(16	)		(44	)
Derivative Receivables		223			240			253			260			276			(7	)		(19	)
Other Receivables		108			108			108			108			108			—			—
Assets Acquired in Loan Satisfactions		182			200			216			203			227			(9	)		(20	)

TOTAL NONPERFORMING ASSETS (EXCLUDING PURCHASED HFS COMMERCIAL LOANS)	$	2,482		$	2,882		$	3,161		$	3,853		$	4,111			(14	)		(40	)

PURCHASED HELD FOR SALE COMMERCIAL LOANS(a)	$	374		$	331		$	22		$	21		$	1			13			NM

TOTAL NONPERFORMING ASSETS (EXCLUDING PURCHASED HFS COMMERCIAL LOANS) TO TOTAL ASSETS		0.30	%		0.36	%		0.41	%		0.49	%		0.51	%		(6	)bp		(21	)bp

PAST DUE 90 DAYS AND OVER AND ACCRUING
Commercial Loans:
Loans — U.S.	$	7		$	56		$	41		$	35		$	35			(88	)%		(80	)%
Loans — Non-U.S.		5			26			5			2			—			(81	)		NM

TOTAL COMMERCIAL LOANS — REPORTED		12			82			46			37			35			(85	)		(66	)
Consumer Loans:
1-4 Family Residential Mortgages — First Liens		—			—			—			—			—			NM			NM
Home Equity		—			—			—			—			—			NM			NM

Total Residential Loans		—			—			—			—			—			NM			NM
Credit Card — Reported		214			230			248			229			229			(7	)		(7	)
Automobile Financings		—			—			—			—			—			NM			NM
Other Consumer		19			19			21			21			21			—			(10	)

TOTAL CONSUMER LOANS — REPORTED		233			249			269			250			250			(6	)		(7	)
TOTAL LOANS — REPORTED		245			331			315			287			285			(26	)		(14	)
Credit Card Securitizations		766			854			879			814			792			(10	)		(3	)

TOTAL LOANS — MANAGED		1,011			1,185			1,194			1,101			1,077			(15	)		(6	)
Derivative Receivables		—			—			—			—			—			NM			NM

TOTAL CREDIT PORTFOLIO	$	1,011		$	1,185		$	1,194		$	1,101		$	1,077			(15	)		(6	)

(a)

Represents distressed commercial loans purchased as part of the IB’s proprietary investing activities.

Page 23


J.P. MORGAN CHASE & CO. CREDIT-RELATED INFORMATION (CONT.) (in millions, except rates)


																2QTR 2004											YTD 2004
	2QTR			1QTR			4QTR			3QTR			2QTR			Change						Year-to-date					Change
	2004			2004			2003			2003			2003			1Q 2004			2Q 2003			2004			2003		2003
NET CHARGE-OFFS
Commercial Loans:
Loans — U.S.	$	106		$	11		$	1		$	194		$	185			NM			(43	)%	$	117		$	303		(61	)%
Loans — Non-U.S.		(34	)		91			7			65			72			NM			NM			57			246		(77	)

Total Commercial Loans — Reported		72			102			8			259			257			(29	)%		(72	)		174			549		(68	)
Consumer Loans:
1-4 Family Residential Mortgages — First Liens		4			2			9			4			5			100			(20	)		6			10		(40	)
Home Equity		2			3			1			1			6			(33	)		(67	)		5			8		(38	)

Total Residential Loans		6			5			10			5			11			20			(45	)		11			18		(39	)
Credit Card — Reported		247			257			266			263			268			(4	)		(8	)		504			543		(7	)
Automobile Financings		31			40			43			43			39			(23	)		(21	)		71			85		(16	)
Other Consumer		36			40			47			44			39			(10	)		(8	)		76			89		(15	)

Total Consumer Loans — Reported		320			342			366			355			357			(6	)		(10	)		662			735		(10	)
Total Loans — Reported		392			444			374			614			614			(12	)		(36	)		836			1,284		(35	)
Credit Card Securitizations		486			473			462			471			480			3			1			959			937		2

Total Loans — Managed		878			917			836			1,085			1,094			(4	)		(20	)		1,795			2,221		(19	)
Commercial Lending-Related Commitments		—			—			—			—			—			NM			NM			—			—		NM

TOTAL CREDIT PORTFOLIO	$	878		$	917		$	836		$	1,085		$	1,094			(4	)		(20	)	$	1,795		$	2,221		(19	)

NET CHARGE-OFF RATES — ANNUALIZED
Commercial Loans:
Loans — U.S.		0.84	%		0.09	%		0.01	%		1.21	%		1.40	%		75	bp		(56	)bp		0.47	%		1.13		(66	)bp
Loans — Non-U.S.		(0.44	)		1.18			0.09			0.84			0.88			NM			NM			0.37			1.48		(111	)
Total Commercial Loans — Reported		0.35			0.50			0.04			1.09			1.20			(15	)		(85	)		0.43			1.26		(83	)
Consumer Loans:
1-4 Family Residential Mortgages — First Liens		0.03			0.02			0.06			0.02			0.04			1			(1	)		0.02			0.04		(2	)
Home Equity		0.03			0.06			0.02			0.02			0.15			(3	)		(12	)		0.05			0.10		(5	)
Total Residential Loans		0.03			0.03			0.05			0.02			0.06			—			(3	)		0.03			0.05		(2	)
Credit Card — Reported		6.03			6.30			6.66			6.26			6.22			(27	)		(19	)		6.17			6.19		(2	)
Automobile Financings		0.31			0.41			0.43			0.45			0.41			(10	)		(10	)		0.36			0.47		(11	)
Other Consumer		2.05			2.06			2.56			2.53			2.15			(1	)		(10	)		2.05			2.35		(30	)
Total Consumer Loans — Reported		0.90			1.01			1.02			0.98			1.07			(11	)		(17	)		0.95			1.14		(19	)
Total Loans — Reported		0.70			0.82			0.64			1.03			1.12			(12	)		(42	)		0.76			1.19		(43	)
Credit Card Securitizations		5.74			5.53			5.31			5.57			5.90			21			(16	)		5.63			5.85		(22	)
Total Loans — Managed		1.36			1.46			1.25			1.59			1.74			(10	)		(38	)		1.41			1.79		(38	)
Lending-Related Commitments		—			—			—			—			—			—			—			—			—		—
TOTAL CREDIT PORTFOLIO		0.74			0.79			0.69			0.88			0.91			(5	)		(17	)		0.76			0.93		(17	)
Memo: Credit Card — Managed		5.83			5.78			5.74			5.80			6.01			5			(18	)		5.81			5.97		(16	)

Page 24


J.P. MORGAN CHASE & CO. CREDIT-RELATED INFORMATION (CONT.) (in millions, except rates)


																2QTR 2004												YTD 2004
	2QTR			1QTR			4QTR			3QTR			2QTR			Change						Year-to-date						Change
	2004			2004			2003			2003			2003			1Q 2004			2Q 2003			2004			2003			2003
SUMMARY OF CHANGES IN THE ALLOWANCE
LOANS:
Beginning Balance	$	4,120		$	4,523		$	4,753		$	5,087		$	5,215			(9	)%		(21	)%	$	4,523		$	5,350			(15)	%
Net Charge-Offs		(392	)		(444	)		(374	)		(614	)		(614	)		12			36			(836	)		(1,284	)		35
Provision for Loan Losses		240			42			144			278			487			471			(51	)		282			1,157			(76	)
Other		(1	)		(1	)		—			2			(1	)		—			—			(2	)		(136	)		99

Ending Balance	$	3,967		$	4,120		$	4,523		$	4,753		$	5,087			(4	)		(22	)	$	3,967		$	5,087			(22	)

LENDING-RELATED COMMITMENTS:
Beginning Balance	$	297		$	324		$	329		$	384		$	436			(8	)		(32	)	$	324		$	363			(11	)
Net Charge-Offs		—			—			—			—			—			NM			NM			—			—			NM
Provision for Lending-Related Commitments		(37	)		(27	)		(5	)		(55	)		(52	)		(37	)		29			(64	)		21			NM
Other		—			—			—			—			—			NM			NM			—			—			NM

Ending Balance	$	260		$	297		$	324		$	329		$	384			(12	)		(32	)	$	260		$	384			(32	)

ALLOWANCE COMPONENTS AND RATIOS
LOANS:
Commercial — Specific	$	549		$	716		$	917		$	1,096		$	1,371			(23	)		(60	)
Commercial — Expected		452			411			454			481			548			10			(18	)

Total Commercial		1,001			1,127			1,371			1,577			1,919			(11	)		(48	)
Consumer Expected		2,180			2,177			2,257			2,234			2,226			—			(2	)

Total Specific and Expected		3,181			3,304			3,628			3,811			4,145			(4	)		(23	)
Residual Component		786			816			895			942			942			(4	)		(17	)

Total Allowance for Loan Losses	$	3,967		$	4,120		$	4,523		$	4,753		$	5,087			(4	)		(22	)

LENDING-RELATED COMMITMENTS:
Commercial — Specific	$	114		$	146		$	172		$	187		$	252			(22	)		(55	)
Commercial — Expected		99			104			105			95			85			(5	)		16

Total Specific and Expected		213			250			277			282			337			(15	)		(37	)
Residual Component		47			47			47			47			47			—			—

Total Allowance for Lending-Related Commitments	$	260		$	297		$	324		$	329		$	384			(12	)		(32	)

Total Allowance for Credit Losses	$	4,227		$	4,417		$	4,847		$	5,082		$	5,471			(4	)		(23	)

Allowance for Loan Losses to Total Loans (a)		1.76	%		1.90	%		2.06	%		2.01	%		2.24	%		(14	)bp		(48	)bp
Allowance for Loan Losses to Total Nonperforming Loans(a)		201			177			175			145			145			2,400			5,600
Allowance for Loan Losses to Total Nonperforming Assets (a)		160			143			143			123			124			1,700			3,600
CREDIT COSTS
Loans:
Commercial	$	(53	)	$	(141	)	$	(197	)	$	(85	)	$	58			62	%		NM		$	(194	)	$	252			NM
Consumer		323			262			388			363			329			23			(2	)%		585			740			(21	)%

Total Specific and Expected		270			121			191			278			387			123			(30	)		391			992			(61	)
Residual Component		(30	)		(79	)		(47	)		—			100			62			NM			(109	)		165			NM

Total Provision for Loan Losses		240			42			144			278			487			471			(51	)		282			1,157			(76	)

Lending-Related Commitments:
Commercial		(37	)		(27	)		(5	)		(55	)		(52	)		(37	)		29			(64	)		13			NM
Residual Component		—			—			—			—			—			NM			NM			—			8			NM

Total Provision for Lending-Related Commitments		(37	)		(27	)		(5	)		(55	)		(52	)		(37	)		29			(64	)		21			NM

Provision for Credit Losses		203			15			139			223			435			NM			(53	)		218			1,178			(81	)
Securitized Credit Losses		486			473			462			471			480			3			1			959			937			2

Total Managed Credit Costs	$	689		$	488		$	601		$	694		$	915			41			(25	)	$	1,177		$	2,115			(44	)

(a)

Excludes purchased held for sale commercial loans.

Page 25

(JP MORGAN CHASE LOGO)

SUPPLEMENTAL DETAIL


J.P. MORGAN CHASE & CO. CAPITAL


																2QTR 2004												YTD 2004
	2QTR			1QTR			4QTR			3QTR			2QTR			Change						Year-to-date						Change
	2004			2004			2003			2003			2003			1Q 2004			2Q 2003			2004			2003			2003
AVAILABLE VERSUS REQUIRED AVERAGE CAPITAL
(in billions)
Common Stockholders’ Equity	$	46.9		$	45.8		$	44.2		$	43.1		$	42.8			2	%		10	%	$	46.3		$	42.3			9	%
Economic Risk Capital
Credit Risk		8.2	(a)		9.5			10.6			12.6			14.4			(14	)		(43	)		8.9	(a)		14.7			(39	)
Market Risk		5.8	(a)		5.6			4.7			5.0			4.3			4			35			5.7	(a)		4.3			33
Operational Risk		3.2	(a)		3.4			3.5			3.4			3.5			(6	)		(9	)		3.3	(a)		3.5			(6	)
Business Risk		1.7	(a)		1.7			1.7			1.7			1.7			—			—			1.7	(a)		1.7			—
Private Equity Risk		4.2	(a)		4.6			5.2			5.4			5.4			(9	)		(22	)		4.3	(a)		5.4			(20	)

Economic Risk Capital		23.1	(a)		24.8			25.7			28.1			29.3			(7	)		(21	)		23.9	(a)		29.6			(19	)

Goodwill / Intangibles		9.6	(a)		9.5			9.1			8.8			8.9			1			8			9.5	(a)		8.9			7
Asset Capital Tax		4.1	(a)		3.9			4.0			4.1			3.9			5			5			4.0	(a)		4.0			—

Capital Against Nonrisk Factors		13.7	(a)		13.4			13.1			12.9			12.8			2			7			13.5	(a)		12.9			5

Total Capital Allocated to Business Activities		36.8	(a)		38.2			38.8			41.0			42.1			(4	)		(13	)		37.4			42.5			(12	)
Diversification Effect		(5.1	)(a)		(5.3	)		(5.1	)		(5.3	)		(5.0	)		(4	)		2			(5.2	)(a)		(5.1	)		(2	)

Total Required Internal Capital		31.7	(a)		32.9			33.7			35.7			37.1			(4	)		(15	)		32.2	(a)		37.4			(14	)

Firm Capital in Excess of Required Capital	$	15.2	(a)	$	12.9		$	10.5		$	7.4		$	5.7			18			167		$	14.1	(a)	$	4.9			188

COMMON SHARES OUTSTANDING
(in millions)
Basic Weighted-Average Shares Outstanding		2,042.8			2,032.3			2,016.2			2,012.2			2,005.6			1			2			2,037.6			2,002.8			2
Diluted Weighted-Average Shares Outstanding		2,099.6			2,092.7			2,079.3			2,068.2			2,050.6			—			2			2,096.3			2,036.3			3
Common Shares Outstanding — at Period-End		2,087.5			2,081.7			2,042.6			2,039.2			2,035.1			—			3
CASH DIVIDENDS DECLARED PER SHARE	$	0.34		$	0.34		$	0.34		$	0.34		$	0.34			—			—		$	0.68		$	0.68			—
BOOK VALUE PER SHARE		21.52			22.62			22.10			21.55			21.53			(5	)		—
SHARE PRICE
High	$	42.57		$	43.84		$	36.99		$	38.26		$	36.52			(3	)		17		$	43.84		$	36.52			20
Low		34.62			36.30			34.45			32.40			23.75			(5	)		46			34.62			20.13			72
Close		38.77			41.95			36.73			34.33			34.18			(8	)		13
CAPITAL RATIOS
(in millions, except ratios)
Tier 1 Capital		43,537	(a)	$	44,686		$	43,167		$	42,533		$	41,115			(3	)		6
Total Capital		59,357	(a)		60,898			59,816			59,455			58,848	(b)		(3	)		1
Risk-Weighted Assets		530,180	(a)		534,971			507,456			490,590			491,500			(1	)		8
Adjusted Average Assets		790,390	(a)		758,260			765,910			770,707			751,376			4			5
Tier 1 Capital Ratio		8.2%	(a)		8.4	%		8.5	%		8.7	%		8.4	%(b)		(20	)bp		(20	)bp
Total Capital Ratio		11.2	(a)		11.4			11.8			12.1			12.0	(b)		(20	)		(80	)
Tier 1 Leverage Ratio		5.5	(a)		5.9			5.6			5.5			5.5			(40	)		—

(a)		Estimated
(b)		The Firm changed the way it calculates risk-weighted assets during the third quarter of 2003. The June 30, 2003 Tier 1 and Total Capital ratios of 8.4% and 12.0%, respectively, are calculated on the same basis as for September 30, 2003. The June 30, 2003 Tier 1 and Total Capital ratios were previously reported as 8.7% and 12.4%, respectively.
		Prior quarters have not been restated.

Page 26


J.P. MORGAN CHASE & CO. MARKET RISK — INVESTMENT BANK AVERAGE TRADING VAR


																2QTR 2004												YTD 2004
(in millions)	2QTR			1QTR			4QTR			3QTR			2QTR			Change						Year-to-date						Change
	2004			2004			2003			2003			2003			1Q 2004			2Q 2003			2004			2003			2003
IB Trading Portfolio:
Interest Rate	$	89.7		$	84.0		$	75.8		$	65.8		$	60.5			7	%		48	%	$	86.9		$	57.1			52	%
Foreign Exchange		16.3			22.2			20.3			14.8			15.2			(27	)		7			19.2			16.2			19
Equities		28.6			40.6			40.9			12.0			9.2			(30	)		211			34.5			10.1			242
Commodities		2.8			2.5			2.7			3.5			3.1			12			(10	)		2.6			2.7			(4	)
Hedge Fund Investment		5.2			5.7			5.4			5.9			4.5			(9	)		16			5.5			4.0			38
Less: Portfolio Diversification		(41.3	)		(49.5	)		(50.6	)		(33.5	)		(34.3	)		(17	)		20			(45.4	)		(34.2	)		(33	)

Total Investment Bank Trading VAR	$	101.3		$	105.5		$	94.5		$	68.5		$	58.2			(4	)		74		$	103.3		$	55.9			85

Page 27


J.P. MORGAN CHASE & CO. Glossary of Terms

Assets Under Management: Represent assets managed by Investment Management & Private Banking on behalf of institutional, retail and private banking clients. Excludes assets managed at American Century Companies, Inc., in which the Firm has a 43% ownership interest.

Assets Under Supervision: Represent assets under management as well as custody, brokerage, administration and deposit accounts.

Average Allocated Capital: Represents the portion of average common stockholders’ equity allocated to the business segments, based on their respective risks. The total average allocated capital of all business segments equals the total average common stockholders’ equity of the Firm.

Average Goodwill Capital: The Firm allocates capital to businesses equal to 100% of the carrying value of goodwill. Average goodwill capital is equal to the average carrying value of goodwill.

Average Managed Assets: Includes credit card receivables that have been securitized.

Average Tangible Allocated Capital: Average allocated capital less the average capital allocated for goodwill.

bp: Denotes basis points; 100 bp equals 1%.

Corporate: Includes Support Units and the effect remaining at the corporate level after the implementation of management accounting policies.

FIN 46: Financial Accounting Standards Board Interpretation No. 46, “Consolidation of Variable Interest Entities, an interpretation of Accounting Research Bulletin No. 51.”

Managed Credit Card Receivables: Refers to credit card receivables on the Firm’s balance sheet plus credit card receivables that have been securitized.

NM: Not meaningful

Operating (Managed) Basis or Operating Earnings: In addition to analyzing the Firm’s results on a reported basis, management looks at results on an “operating basis”, which is a non-GAAP measure. The definition of operating basis starts with the reported U.S. GAAP results. In the case of the Investment Bank, the operating basis includes the reclassification of net interest income related to trading activities to Trading Revenue. In the case of Chase Financial Services and Chase Cardmember Services, “operating” or “managed” basis excludes the impact of credit card securitizations. Operating basis excludes the Litigation Reserve and Merger Costs, as management believes these items are not part of the Firm’s normal daily business operations and, therefore, not indicative of trends, and also do not provide meaningful comparisons with other periods.

Other Consumer Loans: Consists of manufactured housing loans, installment loans (direct and indirect types of consumer finance), student loans, unsecured revolving lines of credit and non-U.S. consumer loans.

Overhead Ratio: Noninterest expense as a percentage of revenue before provision for credit losses.

Reported Basis: Financial statements prepared under accounting principles generally accepted in the United States of America (“U.S. GAAP”). The reported basis includes the impact of credit card securitizations.

Return on Tangible Allocated Capital: Operating earnings less preferred dividends as a percentage of average allocated capital, excluding the capital allocated for goodwill.

Segment Results: All periods are on a comparable basis, although restatements may occur in future periods to reflect further alignment of management accounting policies or changes in organizational structures between businesses.

Shareholder Value Added (“SVA”): Represents operating earnings minus preferred dividends and an explicit charge for capital.

Tangible Shareholder Value Added: SVA less the impact of goodwill on operating earnings and capital charges.

Unaudited: The financial statements and information included throughout this document are unaudited, and have not been subjected to auditing procedures sufficient to permit an independent certified public accountant to express an opinion.

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

Page 28

EX-99.3:

Exhibit 99.3


FINANCIAL INFORMATION
SECOND QUARTER 2004


Consolidated Earnings		Page
Summary Earnings Information		2
Select Financial Information
Reported Basis		3
Managed Basis		4
Reconciliation of Consolidated Reported and Managed Data		5
Consolidated Statements of Income		7

Line of Business Information
Retail		9
Commercial Banking		12
Card Services
Reported Basis		15
Managed Basis		17
Reconciliation of Reported and Managed Data		19
Investment Management Group		21
Corporate		24

Consolidated Balance Sheet
Consolidated Balance Sheets		26
Credit Quality Statistics		27
Capital and Intangible Assets		29
Consolidated Average Balance Sheet, Yields & Rates
Reported Basis		30
Managed Basis		34

Other Items
Definitions		38

NOTES:

Refer to the 2003 Annual Report for definitions and methodologies. Line of business information is provided for analytical purposes and is based on management information systems, assumptions and methodologies that are under continual review.


Summary Earnings Information


	2004						2003									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
																Amt			%			Amt			%
NET INCOME by LOB ($ millions)
Retail	$	485		$	482		$	398		$	392		$	373		$	3			1	%	$	112			30	%
Commercial Banking		420			425			376			363			252			(5	)		(1	)		168			67
Card Services		389			319			347			285			279			70			22			110			39
Investment Management Group		110			133			105			91			76			(23	)		(17	)		34			45
Corporate		(285	)		(127	)		(633	)		(257	)		(133	)		(158	)		N/M			(152	)		N/M

Income from continuing operations		1,119			1,232			593			874			847			(113	)		(9	)		272			32

Discontinued Operations
Income from discontinued operations		(5	)		1			604			14			14			(6	)		N/M			(19	)		N/M
Applicable income taxes		(1	)		—			219			5			5			(1	)		N/M			(6	)		N/M

Income from discontinued operations		(4	)		1			385			9			9			(5	)		N/M			(13	)		N/M

Net Income	$	1,115		$	1,233		$	978		$	883		$	856		$	(118	)		(10	)	$	259			30

Retail		43.3	%		39.1	%		67.1	%		44.9	%		44.0	%		4.2	%					(0.7	)%
Commercial Banking		37.5			34.5			63.4			41.5			29.8			3.0						7.7
Card Services		34.8			25.9			58.5			32.6			32.9			8.9						1.9
Investment Management Group		9.8			10.8			17.7			10.4			9.0			(1.0	)					0.8
Corporate		(25.4	)		(10.3	)		(106.7	)		(29.4	)		(15.7	)		(15.1	)					(9.7	)

Income from continuing operations		100.0			100.0			100.0			100.0			100.0

CAPITAL RATIOS
Tier 1 capital		10.0	%		10.2	%		10.0	%		9.8	%		9.7	%		(0.2	)%					0.3	%
Total capital		13.5			13.8			13.7			13.5			13.6			(0.3	)					(0.1	)
Leverage		8.5			8.1			8.8			8.4			8.7			0.4						(0.2	)

COMMON STOCK DATA
Average shares outstanding (millions)
Basic shares		1,111			1,115			1,109			1,115			1,132			(4	)		0	%		(21	)		(2	)%
Diluted shares		1,128			1,135			1,122			1,124			1,140			(7	)		(1	)		(12	)		(1	)

Basic earnings per share
Income from continuing operations	$	1.00		$	1.11		$	0.53		$	0.78		$	0.75		$	(0.11	)		(10	)	$	0.25			33
Income from discontinued operations		—			—			0.35			0.01			0.01			—			N/M			(0.01	)		N/M

Net Income	$	1.00		$	1.11		$	0.88		$	0.79		$	0.76		$	(0.11	)		(10	)	$	0.24			32

Diluted earnings per share
Income from continuing operations	$	0.99		$	1.09		$	0.53		$	0.78		$	0.74		$	(0.10	)		(9	)	$	0.25			34
Income from discontinued operations		—			—			0.34			0.01			0.01			—			N/M			(0.01	)		N/M

Net Income	$	0.99		$	1.09		$	0.87		$	0.79		$	0.75		$	(0.10	)		(9	)	$	0.24			32

Cash dividends declared		0.45			0.45			0.25			0.25			0.21			0.00			—			0.24			N/M
Book value per share		21.67			21.86			20.92			20.05			19.70			(0.19	)		(1	)		1.97			10
Stock price, quarter-end		51.00			54.52			45.59			38.65			37.18			(3.52	)		(6	)		13.82			37

Headcount		70,993			71,039			71,196			71,240			72,323			(46	)		—			(1,330	)		(2	)


Select Financial Information — Reported Basis


	2004						2003									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
																Amt			%			Amt			%
INCOME STATEMENT DATA ($ millions)
Total revenue, net of interest expense	$	4,392		$	4,565		$	4,113		$	4,084		$	4,072		$	(173	)		(4	)%	$	320			8	%

Net interest income — fully taxable-equivalent (“FTE”) basis (1)		2,186			2,249			2,154			2,127			2,009			(63	)		(3	)		177			9
Noninterest income		2,251			2,361			2,004			1,998			2,102			(110	)		(5	)		149			7

Total revenue, net of interest expense (“FTE”)		4,437			4,610			4,158			4,125			4,111			(173	)		(4	)		326			8
Provision for credit losses		49			141			672			416			461			(92	)		(65	)		(412	)		(89	)
Noninterest expense		2,744			2,663			2,656			2,421			2,403			81			3			341			14

Income from continuing operations		1,119			1,232			593			874			847			(113	)		(9	)		272			32
Discontinued Operations
Income from discontinued operations		(5	)		1			604			14			14			(6	)		N/M			(19	)		N/M
Applicable income taxes		(1	)		—			219			5			5			(1	)		N/M			(6	)		N/M

Income from discontinued operations		(4	)		1			385			9			9			(5	)		N/M			(13	)		N/M

Net Income	$	1,115		$	1,233		$	978		$	883		$	856		$	(118	)	$	(10	)	$	259		$	30

BALANCE SHEET DATA — ENDING BALANCES ($ millions)
Loans	$	135,034		$	137,529		$	138,147		$	141,710		$	144,583			(2,495	)		(2	)%		(9,549	)		(7	)
Total assets		299,303			319,590			326,563			290,473			299,999			(20,287	)		(6	)		(696	)		—
Deposits		164,475			165,940			164,621			163,411			172,015			(1,465	)		(1	)		(7,540	)		(4	)
Long-term debt (2)		42,483			45,312			46,764			44,225			46,070			(2,829	)		(6	)		(3,587	)		(8	)
Common stockholders’ equity		24,156			24,598			23,419			22,411			22,257			(442	)		(2	)		1,899			9
Total stockholders’ equity		24,156			24,598			23,419			22,411			22,257			(442	)		(2	)		1,899			9

CREDIT QUALITY
Net charge-offs to average loans		0.65	%		0.78	%		3.11	%		1.50	%		1.35	%		(0.13	)%					(0.70	)%
Total net charge-offs ($ millions)	$	224		$	272		$	1,084		$	540		$	489		$	(48	)		(18	)%	$	(265	)		(54	)%
Allowance for loan losses to period-end loans		2.46			2.63			2.75			2.98			2.95			(0.17	)					(0.49	)
Allowance for credit losses to period end-loans (3)		2.86			3.03			3.14			3.34			3.35			(0.17	)					(0.49	)
Nonperforming assets to related assets (4)		1.15			1.42			1.73			2.06			2.28			(0.27	)					(1.13	)

FINANCIAL PERFORMANCE
Return on average assets		1.47	%		1.56	%		1.38	%		1.23	%		1.24	%		(0.09	)%					0.23	%
Return on average common equity		18.7			20.5			16.8			15.8			15.3			(1.8	)					3.4
Net interest margin		3.30			3.25			3.50			3.45			3.37			0.05						(0.07	)
Efficiency ratio		61.8			57.8			63.9			58.7			58.5			4.0						3.3

NOTES:

(1)		Net interest income-FTE includes taxable equivalent adjustments of $45 million, $45 million, $45 million, $41 million, and $39 million for the quarters ended June 30, 2004, March 31, 2004, December 31, 2003, September 30, 2003, and June 30, 2003, respectively. Net interest income is presented rather than gross interest income and gross interest expense because the Corporation relies primarily on net interest income to assess performance.

(2)		Includes trust preferred capital securities.

(3)		The allowance for credit losses includes the allowance for loan losses of $3,123 million, $3,323 million, $3,472 million, $3,907 million, and $3,962 million and reserve for unfunded lending commitments and standby letters of credit which is included in other liabilities of $508 million, $508 million, $490 million, $467 million, and $536 million, each for the periods ending June 30, 2004, March 31, 2004, December 31, 2003, September 30, 2003, and June 30, 2003, respectively.

(4)		Related assets consist of loans outstanding, including loans held for sale and other real estate owned.


Select Financial Information — Managed Basis


	2004						2003									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
																Amt			%			Amt			%
MANAGED FINANCIAL DATA ($ millions)
Total managed revenue, net of interest expense	$	5,280		$	5,433		$	4,973		$	4,857		$	4,842		$	(153	)		(3	)%	$	438			9	%

Managed net interest income — fully taxable-equivalent (“FTE”) basis (1)(2)		3,462			3,523			3,429			3,318			3,165			(61	)		(2	)		297			9
Managed noninterest income (2)		1,863			1,955			1,589			1,580			1,716			(92	)		(5	)		147			9

Total managed revenue, net of interest expense (“FTE”)		5,325			5,478			5,018			4,898			4,881			(153	)		(3	)		444			9
Managed provision for credit losses		937			1,009			1,532			1,189			1,230			(72	)		(7	)		(293	)		(24	)
Managed noninterest expense		2,744			2,663			2,656			2,421			2,403			81			3			341			14

Managed income from continuing operations		1,119			1,232			593			874			847			(113	)		(9	)		272			32
Discontinued Operations
Income from discontinued operations		(5	)		1			604			14			14			(6	)		N/M			(19	)		N/M
Applicable income taxes		(1	)		—			219			5			5			(1	)		N/M			(6	)		N/M

Income from discontinued operations		(4	)		1			385			9			9			(5	)		N/M			(13	)		N/M

Managed income, net of expense before taxes	$	1,115		$	1,233		$	978		$	883		$	856		$	(118	)		(10	)	$	259			30

Memo: Managed credit card revenue		617			494			613			556			525			123			25			92			18

MANAGED BALANCE SHEET DATA — ENDING BALANCES ($ millions)
Managed loans	$	200,825		$	199,283		$	202,440		$	201,758		$	204,829		$	1,542			1	%	$	(4,004	)		(2	)%
Managed total assets		334,917			353,859			363,663			327,236			335,831			(18,942	)		(5	)		(914	)		—

MANAGED CREDIT QUALITY RATIOS
Managed net charge-offs to average loans		2.22	%		2.27	%		3.87	%		2.60	%		2.47	%		(0.05	)%					(0.25	)%
Total managed net charge-offs ($ millions)	$	1,112		$	1,140		$	1,944		$	1,313		$	1,258		$	(28	)		(2	)	$	(146	)		(12	)

FINANCIAL PERFORMANCE ON A MANAGED BASIS
Managed net interest margin		4.62	%		4.50	%		4.82	%		4.68	%		4.61	%		0.12	%					0.01	%
Managed efficiency ratio		51.5			48.6			52.9			49.4			49.2			2.9						2.3

MANAGED CAPITAL RATIO
Managed tangible common equity/managed tangible assets		6.4	%		6.2	%		5.7	%		6.0	%		5.9	%		0.2	%					0.5	%

NOTES:

The Corporation evaluates its Card Services line of business trends on a managed basis which assumes that securitized receivables are still on the balance sheet. The Corporation manages its Card Services operations on a managed basis because the receivables that are securitized are subject to underwriting standards comparable to the owned portfolio and are serviced by operating personnel without regard to ownership. The Corporation believes that investors should be informed, and often request information, about the credit performance of the entire managed portfolio in order to understand the quality of the Card Services originations and the related credit risks inherent in the owned portfolio and retained interests in securitizations. In addition, the Corporation funds its Card Services operations, reviews operating results and makes decisions about allocating resources, such as employees and capital on a managed basis. See “Loan Securitizations” on page 73 and Note 11, “Credit Card Securitizations,” of the December 31, 2003 Form 10-K for additional information related to the Corporation’s securitization activity.

(1)		Net interest income-FTE includes taxable equivalent adjustments of $45 million, $45 million, $45 million, $41 million, and $39 million for the quarters ended June 30, 2004, March 31, 2004, December 31, 2003, September 30, 2003, and June 30, 2003, respectively. Net interest income is presented rather than gross interest income and gross interest expense because the Corporation relies primarily on net interest income to assess performance.

(2)		On a reported basis, income earned on securitized loans is reported in credit card revenue and income earned on seller’s interest is reported in net interest income.


Reconciliation of Consolidated Reported and Managed Data


	2004						2003
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr
INCOME STATEMENT DATA ($ millions)
Total revenue, net of interest expense
Reported data for the period	$	4,392		$	4,565		$	4,113		$	4,084		$	4,072
Securitization adjustments		888			868			860			773			770

Total managed revenue, net of interest expense		5,280			5,433			4,973			4,857			4,842

Net interest income — FTE
Reported data for the period		2,186			2,249			2,154			2,127			2,009
Securitization adjustments		1,276			1,274			1,275			1,191			1,156

Managed net interest income — FTE		3,462			3,523			3,429			3,318			3,165

Noninterest income
Reported data for the period		2,251			2,361			2,004			1,998			2,102
Securitization adjustments		(388	)		(406	)		(415	)		(418	)		(386	)

Managed noninterest income		1,863			1,955			1,589			1,580			1,716

Total revenue, net of interest expense — FTE
Reported data for the period		4,437			4,610			4,158			4,125			4,111
Securitization adjustments		888			868			860			773			770

Total managed revenue, net of interest expense — FTE		5,325			5,478			5,018			4,898			4,881

Provision for credit losses
Reported data for the period		49			141			672			416			461
Securitization adjustments		888			868			860			773			769

Managed provision for credit losses		937			1,009			1,532			1,189			1,230

Credit card revenue
Reported data for the period		1,005			900			1,028			974			911
Securitization adjustments		(388	)		(406	)		(415	)		(418	)		(386	)

Managed credit card revenue		617			494			613			556			525

BALANCE SHEET — ENDING BALANCES ($ millions)
Loans
Reported	$	135,034		$	137,529		$	138,147		$	141,710		$	144,583
Securitization adjustments		65,791			61,754			64,293			60,048			60,246

Managed loans		200,825			199,283			202,440			201,758			204,829

Total assets
Reported		299,303			319,590			326,563			290,473			299,999
Securitization adjustments		35,614			34,269			37,100			36,763			35,832

Managed total assets		334,917			353,859			363,663			327,236			335,831


Reconciliation of Consolidated Reported and Managed Data


	2004						2003
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr
BALANCE SHEET — AVERAGE BALANCES ($ millions)
Investment securities
Reported	$	82,120		$	84,350		$	75,779		$	71,738		$	66,735
Securitization adjustments		(28,236	)		(25,798	)		(23,058	)		(21,255	)		(22,722	)


Managed investment securities		53,884			58,552			52,721			50,483			44,013

Loans
Reported		136,932			138,652			139,741			144,162			144,635
Securitization adjustments		63,137			62,281			61,074			57,858			58,945

Managed loans		200,069			200,933			200,815			202,020			203,580

Other assets
Reported		42,138			42,697			41,089			43,090			41,452
Securitization adjustments		(945	)		(854	)		(705	)		(574	)		(559	)

Managed other assets		41,193			41,843			40,384			42,516			40,893

Total assets
Reported		305,144			317,593			281,746			283,676			276,809
Securitization adjustments		33,956			35,629			37,311			36,029			35,664

Managed total assets		339,100			353,222			319,057			319,705			312,473

Other short-term borrowings
Reported		38,917			44,454			10,935			11,216			13,413
Securitization adjustments		33,956			35,629			37,311			36,029			35,664

Managed other short-term borrowings		72,873			80,083			48,246			47,245			49,077

Total liabilities and stockholders’ equity
Reported		305,144			317,593			281,746			283,676			276,809
Securitization adjustments		33,956			35,629			37,311			36,029			35,664

Managed total liabilities and equity		339,100			353,222			319,057			319,705			312,473

CREDIT QUALITY ($ millions)
Net charge-offs
Reported data for the period		224			272			1,084			540			489
Securitization adjustments		888			868			860			773			769

Managed net charge-offs		1,112			1,140			1,944			1,313			1,258

NOTES:

The Corporation evaluates its Card Services line of business trends on a managed basis which assumes that securitized receivables have not been sold and are still on the balance sheet. The Corporation manages its Card Services operations on a managed basis because the receivables that are securitized are subject to underwriting standards comparable to the owned portfolio and are serviced by operating personnel without regard to ownership. The Corporation believes that investors should be informed, and often request information, about the credit performance of the entire managed portfolio in order to understand the quality of the Card Services originations and the related credit risks inherent in the owned portfolio and retained interests in securitizations. In addition, the Corporation funds its Card Services operations, reviews operating results and makes decisions about allocating resources, such as employees and capital, on a managed basis. See “Loan Securitizations” on page 73 and Note 11, “Credit Card Securitizations,” of the December 31, 2003 Form 10-K for additional information related to the Corporation’s securitization activity.


Consolidated Statements of Income


	2004					2003									Change from
	2nd Qtr			1st Qtr		4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
															Amt			%			Amt			%
INCOME STATEMENT DATA ($ millions)
Net Interest Income
Interest income	$	3,173		$	3,297	$	3,172		$	3,172		$	3,130		$	(124	)		(4	)%	$	43			1	%
Interest expense		1,032			1,093		1,063			1,086			1,160			(61	)		(6	)		(128	)		(11	)

Total net interest income		2,141			2,204		2,109			2,086			1,970			(63	)		(3	)		171			9

Noninterest Income
Banking fees and commissions		452			486		456			441			458			(34	)		(7	)		(6	)		(1	)
Credit card revenue		1,005			900		1,028			974			911			105			12			94			10
Service charges on deposits		440			421		432			433			413			19			5			27			7
Fiduciary and investment management fees		182			192		171			164			161			(10	)		(5	)		21			13
Investment securities gains (losses)		(64	)		129		(167	)		68			152			(193	)		N/M			(216	)		N/M
Trading gains (losses)		96			56		23			23			(76	)		40			71			172			N/M
Other income (loss)		140			177		61			(105	)		83			(37	)		(21	)		57			69

Total noninterest income		2,251			2,361		2,004			1,998			2,102			(110	)		(5	)		149			7

Total revenue, net of interest expense		4,392			4,565		4,113			4,084			4,072			(173	)		(4	)		320			8

Provision for credit losses		49			141		672			416			461			(92	)		(65	)		(412	)		(89	)

Noninterest Expense
Salaries and employee benefits		1,303			1,280		1,186			1,193			1,213			23			2			90			7
Occupancy		169			178		174			175			166			(9	)		(5	)		3			2
Equipment		122			117		126			119			117			5			4			5			4
Outside service fees and processing		299			322		315			290			282			(23	)		(7	)		17			6
Marketing and development		319			290		263			253			215			29			10			104			48
Telecommunication		54			55		53			58			54			(1	)		(2	)		—			—
Other intangible amortization		34			33		39			34			32			1			3			2			6
Other expense		444			388		500			299			324			56			14			120			37

Total noninterest expense		2,744			2,663		2,656			2,421			2,403			81			3			341			14

Income from continuing operations		1,599			1,761		785			1,247			1,208			(162	)		(9	)		391			32
Applicable income taxes		480			529		192			373			361			(49	)		(9	)		119			33

Income from continuing operations, net of taxes	$	1,119		$	1,232	$	593		$	874		$	847		$	(113	)		(9	)%	$	272			(32	)%

Discontinued Operations
Income from discontinued operations	$	(5	)	$	1	$	604		$	14		$	14		$	(6	)		N/M		$	(19	)		N/M
Applicable income taxes		(1	)		—		219			5			5			(1	)		N/M			(6	)		N/M

Income from discontinued operations, net of taxes	$	(4	)	$	1	$	385		$	9		$	9		$	(5	)		N/M		$	(13	)		N/M

Net Income	$	1,115		$	1,233	$	978		$	883		$	856		$	(118	)		(10	)%	$	259			30	%


Basic earnings per share
Income from continuing operations, net of taxes	$	1.00		$	1.11	$	0.53		$	0.78		$	0.75		$	(0.11	)		(10	)%	$	0.25			33	%
Income from discontinued operations, net of taxes		—			—		0.35			0.01			0.01			—			N/M			(0.01	)		N/M

Net Income	$	1.00		$	1.11	$	0.88		$	0.79		$	0.76		$	(0.11	)		(10	)%	$	0.24			32	%

Diluted earnings per share
Income from continuing operations, net of taxes	$	0.99		$	1.09	$	0.53		$	0.78		$	0.74		$	(0.10	)		(9	)%	$	0.25			34	%
Income from discontinued operations, net of taxes		—			—		0.34			0.01			0.01			—			N/M			(0.01	)		N/M

Net Income	$	0.99		$	1.09	$	0.87		$	0.79		$	0.75		$	(0.10	)		(9	)%	$	0.24			32	%

Average shares outstanding (millions)
Basic		1,111			1,115		1,109			1,115			1,132			(4	)		0	%		(21	)		(2	)%
Diluted		1,128			1,135		1,122			1,124			1,140			(7	)		(1	)		(12	)		(1	)


Consolidated Statement of Income — YTD — Reported Basis


	Six Months Ended
	2004			2003			Change
							Amt			%
INCOME STATEMENT DATA ($ millions)
Interest income	$	6,470		$	6,317		$	153			2	%
Interest expense		2,125			2,363			(238	)		(10	)

Total net interest income		4,345			3,954			391			10

Banking fees and commissions		938			898			40			4
Credit card revenue		1,905			1,762			143			8
Service charges on deposits		861			796			65			8
Fiduciary and investment management fees		374			321			53			17
Investment securities gains (losses)		65			221			(156	)		(71	)
Trading gains (losses)		152			(72	)		224			N/M
Other income (loss)		317			135			182			N/M

Total noninterest income		4,612			4,061			551			14

Total revenue, net of interest expense		8,957			8,015			942			12

Provision for credit losses		190			957			(767	)		(80	)

Salaries and employee benefits		2,583			2,386			197			8
Occupancy		347			330			17			5
Equipment		239			228			11			5
Outside service fees and processing		621			548			73			13
Marketing and development		609			441			168			38
Telecommunication		109			102			7			7
Other intangible amortization		67			64			3			5
Other expense		832			601			231			38

Total noninterest expense		5,407			4,700			707			15

Income before income taxes		3,360			2,358			1,002			42
Applicable income taxes		1,009			700			309			44

Income from continuing operations	$	2,351		$	1,658		$	693			42	%

Discontinued Operations
Income from discontinued operations	$	(4	)	$	25		$	(29	)		N/M
Applicable income taxes		(1	)		9			(10	)		N/M

Income from discontinued operations	$	(3	)	$	16		$	(19	)		N/M

Net Income	$	2,348		$	1,674		$	674			40	%


Basic earnings per share
Income from continuing operations	$	2.11		$	1.45		$	0.66			46	%
Income from discontinued operations, net		—			0.01			(0.01	)		N/M

Net Income	$	2.11		$	1.46		$	0.65			45	%

Diluted earnings per share
Income from continuing operations	$	2.08		$	1.44		$	0.64			44	%
Income from discontinued operations, net		—			0.01			(0.01	)		N/M

Net Income	$	2.08		$	1.45		$	0.63			43	%

Average shares outstanding (millions)
Basic		1,113			1,142			(29	)		(3	)%
Diluted		1,131			1,150			(19	)		(2	)


Retail Line of Business Information


	2004						2003									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
																Amt			%			Amt			%
INCOME STATEMENT DATA ($ millions)
Net interest income — FTE (1)	$	1,178		$	1,241		$	1,121		$	1,102		$	1,077		$	(63	)		(5	)%	$	101			9	%

Banking fees and commissions		168			189			158			170			175			(21	)		(11	)		(7	)		(4	)
Credit card revenue		65			56			52			53			59			9			16			6			10
Service charges on deposits		245			232			239			242			225			13			6			20			9
Other income		48			10			19			28			2			38			N/M			46			N/M

Total noninterest income		526			487			468			493			461			39			8			65			14

Total revenue, net of interest expense		1,704			1,728			1,589			1,595			1,538			(24	)		(1	)		166			11

Provision for credit losses		81			114			142			139			108			(33	)		(29	)		(27	)		(25	)

Salaries and employee benefits		413			404			374			390			407			9			2			6			1
Other expense		444			450			445			449			435			(6	)		(1	)		9			2

Total noninterest expense		857			854			819			839			842			3			—			15			2

Income before income taxes		766			760			628			617			588			6			1			178			30
Applicable income taxes		281			278			230			225			215			3			1			66			31

Net income	$	485		$	482		$	398		$	392		$	373		$	3			1	%	$	112			30	%


FINANCIAL PERFORMANCE
Return on average common equity		41	%		41	%		33	%		33	%		31	%		0	%					10	%
Efficiency ratio		50			49			52			53			55			1						(5	)

Headcount		31,057			31,468			31,264			30,867			31,812			(411	)		(1	)		(755	)		(2	)

ENDING BALANCES ($ millions)
Small business commercial	$	10,551		$	10,387		$	10,216		$	10,122		$	10,050		$	164			2	%	$	501			5	%
Home equity		29,142			27,685			26,432			25,252			23,863			1,457			5			5,279			22
Vehicle		13,087			13,548			13,571			13,841			13,873			(461	)		(3	)		(786	)		(6	)
Other personal loans		4,760			6,006			6,016			6,199			5,919			(1,246	)		(21	)		(1,159	)		(20	)

Total loans (2)		57,540			57,626			56,235			55,414			53,705			(86	)		—			3,835			7

Assets		60,130			60,109			58,772			58,080			56,900			21			—			3,230			6

Demand deposits		31,651			31,509			30,587			29,642			29,280			142			—			2,371			8
Savings		43,822			42,893			41,093			40,581			40,066			929			2			3,756			9

Core deposits		75,473			74,402			71,680			70,223			69,346			1,071			1			6,127			9
Time		16,570			17,140			17,881			18,616			19,486			(570	)		(3	)		(2,916	)		(15	)

Total deposits		92,043			91,542			89,561			88,839			88,832			501			1			3,211			4

Equity		4,774			4,774			4,774			4,774			4,774			—			—			—			—


Retail Line of Business Information


	2004						2003									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
																Amt			%			Amt			%
AVERAGE BALANCES ($ millions)
Small business commercial	$	10,495		$	10,347		$	10,142		$	10,126		$	10,010		$	148			1	%	$	485			5	%
Home equity		28,366			26,957			25,790			24,499			22,807			1,409			5			5,559			24
Vehicle		13,371			13,606			13,672			13,962			13,989			(235	)		(2	)		(618	)		(4	)
Other personal loans		5,141			6,350			5,995			6,147			6,087			(1,209	)		(19	)		(946	)		(16	)

Total loans		57,373			57,260			55,599			54,734			52,893			113			—			4,480			8

Assets		59,939			59,725			58,087			57,467			56,261			214			—			3,678			7

Demand deposits		31,879			30,928			30,124			29,632			28,809			951			3			3,070			11
Savings		43,404			41,887			41,041			40,354			40,107			1,517			4			3,297			8

Core deposits		75,283			72,815			71,165			69,986			68,916			2,468			3			6,367			9
Time		16,799			17,506			18,260			18,985			20,095			(707	)		(4	)		(3,296	)		(16	)

Total deposits		92,082			90,321			89,425			88,971			89,011			1,761			2			3,071			3

Equity		4,774			4,774			4,774			4,774			4,774			—			—			—			—

CREDIT QUALITY ($ millions)
Net charge-offs
Small business commercial	$	13		$	9		$	17		$	14		$	16		$	4			44	%	$	(3	)		(19	)%
Home equity		19			20			24			47			27			(1	)		(5	)		(8	)		(30	)
Vehicle		35			53			67			56			46			(18	)		(34	)		(11	)		(24	)
Other personal loans		16			13			40			27			24			3			23			(8	)		(33	)

Total net charge-offs		83			95			148			144			113			(12	)		(13	)		(30	)		(27	)

Net charge-off ratios
Small business commercial		0.50	%		0.35	%		0.67	%		0.55	%		0.64	%		0.15	%					(0.14	)%
Home equity		0.27			0.30			0.37			0.77			0.47			(0.03	)					(0.20	)
Vehicle		1.05			1.56			1.96			1.60			1.32			(0.51	)					(0.27	)
Other personal loans		1.24			0.82			2.67			1.76			1.58			0.42						(0.34	)
Total net charge-off ratio		0.58			0.66			1.06			1.05			0.85			(0.08	)					(0.27	)

Nonperforming assets
Commercial	$	226		$	239		$	250		$	268		$	255		$	(13	)		(5	)%	$	(29	)		(11	)%
Consumer		250			265			290			305			315			(15	)		(6	)		(65	)		(21	)

Total nonperforming loans (3)		476			504			540			573			570			(28	)		(6	)		(94	)		(16	)
Other, including other real estate owned (“OREO”)		46			57			77			117			218			(11	)		(19	)		(172	)		(79	)

Total nonperforming assets		522			561			617			690			788			(39	)		(7	)		(266	)		(34	)

Allowance for loan losses ($ millions)		688			690			677			683			688			(2	)		—			—			—
Allowance for loan losses to period-end loans (2)		1.23	%		1.26	%		1.26	%		1.29	%		1.33	%		(0.03	)%					(0.10	)%
Allowance for loan losses to nonperforming loans (3)		146			137			126			120			121			9						25
Nonperforming assets to related assets		0.91			0.97			1.10			1.24			1.46			(0.06	)					(0.55	)


Retail Line of Business Information


	2004				2003						Change from
	2nd Qtr		1st Qtr		4th Qtr		3rd Qtr		2nd Qtr		1Q04						2Q03
											Amt			%			Amt		%
DISTRIBUTION
Number of
Banking centers		1,866		1,845		1,841		1,810		1,803		21			1	%		63		3	%
ATMs		4,628		4,569		4,394		4,350		4,093		59			1			535		13
Relationship bankers		3,673		3,614		3,600		3,139		2,823		59			2			850		30
On-line customers (thousands)		2,918		2,693		2,436		2,184		1,922		225			8			996		52
Personal demand accounts (thousands)		5,063		4,908		4,773		4,684		4,541		155			3			522		11
Business demand accounts (thousands)		529		520		513		508		501		9			2			28		6
Debit cards issued (thousands)		5,627		5,447		5,216		5,104		4,946		180			3			681		14

RETAIL BROKERAGE ($ millions)
Mutual fund sales	$	833	$	896	$	622	$	671	$	774	$	(63	)		(7	)%	$	59		8	%
Annuity sales		937		821		864		895		759		116			14			178		23

Total investment sales volume		1,770		1,717		1,486		1,566		1,533		53			3			237		15

Market value customer assets — end of period ($ billions)		35.2		34.6		33.7		31.9		30.5		0.6			2			4.7		15

Number of customers — end of period (thousands)		738		734		721		707		694		4			1			44		6
Number of dedicated investment sales representatives		1,014		1,063		973		902		874		(49	)		(5	)		140		16

NOTES:

(1)		Net interest income-FTE includes taxable equivalent adjustments of $6 million, $6 million, $5 million, $6 million, and $6 million for the quarters ended June 30, 2004, March 31, 2004, December 31, 2003, September 30, 2003, and June 30, 2003, respectively.

(2)		Loans includes loans held for sale of $1,562 million, $2,686 million, $2,496 million, $2,480 million, and $2,067 million, at June 30, 2004, March 31, 2004, December 31, 2003, September 30, 2003, and June 30, 2003, respectively. These amounts are not included in allowance coverage statistics.

(3)		Nonperforming loans includes loans held for sale of $5 million, $2 million, $2 million, $2 million, and $2 million, at June 30, 2004, March 31, 2004, December 31, 2003, September 30, 2003, and June 30, 2003, respectively. These amounts are not included in allowance coverage statistics.


Commercial Banking Line of Business Information


	2004						2003 (8)									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
																Amt			%			Amt			%
INCOME STATEMENT DATA ($ millions)
Net interest income — FTE (1)	$	557		$	570		$	586		$	574		$	571		$	(13	)		(2	)%	$	(14	)		(2	)%

Banking fees and commissions		173			182			185			198			234			(9	)		(5	)		(61	)		(26	)
Credit card revenue		33			31			28			27			27			2			6			6			22
Service charges on deposits		191			185			188			186			185			6			3			6			3
Fiduciary and investment management fees		—			1			1			—			(1	)		(1	)		N/M			1			N/M
Investment securities gains (losses)		25			7			6			31			(2	)		18			N/M			27			N/M
Trading gains (losses)		71			53			32			30			(75	)		18			34			146			N/M
Other income (loss)		(20	)		(28	)		—			(24	)		(3	)		8			29			(17	)		N/M

Total noninterest income		473			431			440			448			365			42			10			108			30

Total revenue, net of interest expense		1,030			1,001			1,026			1,022			936			29			3			94			10

Provision for credit losses		(187	)		(188	)		(109	)		(51	)		10			1			1			(197	)		N/M

Salaries and employee benefits (2)		326			314			325			297			295			12			4			31			10
Other expense (2)		319			291			302			286			306			28			10			13			4

Total noninterest expense		645			605			627			583			601			40			7			44			7

Income before income taxes		572			584			508			490			325			(12	)		(2	)		247			76
Applicable income taxes		152			159			132			127			73			(7	)		(4	)		79			N/M

Net Income	$	420		$	425		$	376		$	363		$	252		$	(5	)		(1	)%	$	168			67	%


Memo — Revenue by activity
Lending-related revenue	$	461		$	415		$	471		$	454		$	434		$	46			11	%	$	27			6	%
Credit derivative hedge portfolio		(6	)		8			(35	)		(51	)		(143	)		(14	)		N/M			137			96
Global treasury services		407			394			405			405			395			13			3			12			3
Capital markets (3)		178			202			202			234			253			(24	)		(12	)		(75	)		(30	)
Other		(10	)		(18	)		(17	)		(20	)		(3	)		8			44			(7	)		N/M

FINANCIAL PERFORMANCE
Return on average common equity		23	%		23	%		20	%		19	%		14	%		0	%					9	%
Efficiency ratio		63			60			61			57			64			3						(1	)
Efficiency ratio excluding credit derivative hedge portfolio		62			61			59			54			56			1						6

Headcount:
Corporate banking (including capital markets)		2,452			2,630			2,686			2,650			2,640			(178	)		(7	)%		(188	)		(7	)%
Middle market		2,423			2,426			2,507			2,551			2,491			(3	)		—			(68	)		(3	)
Global treasury services (2)		2,689			2,795			3,313			3,234			3,239			(106	)		(4	)		(550	)		(17	)
Operations, technology and other administration		1,916			2,002			1,946			1,930			2,048			(86	)		(4	)		(132	)		(6	)

Total headcount		9,480			9,853			10,452			10,365			10,418			(373	)		(4	)		(938	)		(9	)


Commercial Banking Line of Business Information


	2004						2003 (8)									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
																Amt			%			Amt			%
ENDING BALANCES ($ millions)
Loans (4)	$	52,027		$	52,661		$	53,752		$	54,493		$	57,775		$	(634	)		(1	)%	$	(5,748	)		(10	)%
Interests in purchased receivables (5)		30,184			28,912			32,938			—			—			1,272			4			30,184			N/M
Investment securities (5)		9,804			10,884			10,035			3,806			2,815			(1,080	)		(10	)		6,989			N/M
Assets		113,972			126,501			137,289			103,265			109,147			(12,529	)		(10	)		4,825			4

Demand deposits		24,342			26,150			26,348			27,287			30,324			(1,808	)		(7	)		(5,982	)		(20	)
Savings		14,911			13,622			12,263			11,269			9,332			1,289			9			5,579			60
Time		835			843			922			1,024			9,110			(8	)		(1	)		(8,275	)		(91	)
Foreign offices		10,173			11,222			12,223			11,619			10,838			(1,049	)		(9	)		(665	)		(6	)

Total deposits		50,261			51,837			51,756			51,199			59,604			(1,576	)		(3	)		(9,343	)		(16	)

Short-term borrowings (5)		35,832			36,772			40,717			3,783			4,507			(940	)		(3	)		31,325			N/M

Equity		7,451			7,451			7,451			7,451			7,451			—			—			—			—

AVERAGE BALANCES ($ millions)
Loans	$	52,763		$	53,321		$	53,634		$	55,090		$	58,046		$	(558	)		(1	)%	$	(5,283	)		(9	)%
Interests in purchased receivables (5)		28,982			31,145			358			—			—			(2,163	)		(7	)		28,982			N/M
Investment securities (5)		10,054			9,873			3,629			2,928			1,920			181			2			8,134			N/M
Assets		120,128			130,946			97,758			101,403			99,249			(10,818	)		(8	)		20,879			21

Demand deposits		24,551			24,973			24,846			25,929			24,402			(422	)		(2	)		149			1
Savings		14,645			12,982			11,669			10,983			10,005			1,663			13			4,640			46
Time		856			915			987			2,968			3,529			(59	)		(6	)		(2,673	)		(76	)
Foreign offices		10,819			11,445			10,737			10,413			10,443			(626	)		(5	)		376			4

Total deposits		50,871			50,315			48,239			50,293			48,379			556			1			2,492			5

Short-term borrowings (5)		35,673			39,036			4,433			3,490			3,888			(3,363	)		(9	)		31,785			N/M

Equity		7,451			7,451			7,451			7,451			7,451			—			—			—			—

CREDIT QUALITY ($ millions)
Net charge-offs (recoveries)	$	(12	)	$	(8	)	$	66		$	99		$	105		$	(4	)		(50	)%	$	(117	)		N/M
Net charge-off (recovery) ratio		(0.09	)%		(0.06	)%		0.49	%		0.72	%		0.72	%		(0.03	)%					(0.81	)%

Nonperforming assets
Nonperforming loans (6)	$	625		$	820		$	1,036		$	1,387		$	1,693		$	(195	)		(24	)%	$	(1,068	)		(63	)%
Other, including other real estate owned (“OREO”)		18			16			22			40			22			2			13			(4	)		(18	)

Total nonperforming assets		643			836			1,058			1,427			1,715			(193	)		(23	)		(1,072	)		(63	)

Allowance for loan losses
Allowance for loan losses		1,771			1,971			2,161			2,359			2,440			(200	)		(10	)		(669	)		(27	)
Allowance for loan losses to period-end loans (4)		3.41	%		3.78	%		4.06	%		4.37	%		4.25	%		(0.37	)%					(0.84	)%
Allowance for loan losses to nonperforming loans (6)		288			240			209			170			145			48						143

Allowance for credit losses (7)
Allowance for credit losses		2,271			2,471			2,651			2,826			2,976			(200	)		(8	)		(705	)		(24	)
Allowance for credit losses to period-end loans (4)		4.37	%		4.74	%		4.98	%		5.23	%		5.18	%		(0.37	)%					(0.81	)%
Allowance for credit losses to nonperforming loans (6)		369			301			257			204			176			68						193

Nonperforming assets to related assets		1.24			1.59			1.97			2.62			2.97			(0.35	)					(1.73	)


Commercial Banking Line of Business Information


	2004						2003 (8)									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
																Amt			%			Amt			%
CORPORATE BANKING ($ millions)
Ending balances
Loans	$	24,536		$	25,835		$	27,123		$	27,375		$	29,319		$	(1,299	)		(5	)%	$	(4,783	)		(16	)%
Interests in purchased receivables (5)		30,184			28,912			32,938			—			—			1,272			4			30,184			N/M
Investment securities (5)		9,759			10,839			10,007			3,769			2,774			(1,080	)		(10	)		6,985			N/M
Deposits		21,238			22,855			23,685			24,414			32,730			(1,617	)		(7	)		(11,492	)		(35	)
Short-term borrowings (5)		35,832			36,772			40,717			3,783			4,507			(940	)		(3	)		31,325			N/M

Average balances
Loans		25,662			26,756			27,043			27,544			29,222			(1,094	)		(4	)		(3,560	)		(12	)
Interests in purchased receivables (5)		28,982			31,145			358			—			—			(2,163	)		(7	)		28,982			N/M
Investment securities (5)		9,997			9,813			3,583			2,890			1,879			184			2			8,118			N/M
Deposits		22,471			22,913			22,849			25,221			24,251			(442	)		(2	)		(1,780	)		(7	)
Short-term borrowings (5)		35,673			39,036			4,433			3,490			3,888			(3,363	)		(9	)		31,785			N/M

Credit Quality
Net charge-offs (recoveries) ($ millions)	$	(13	)	$	(19	)	$	28		$	56		$	63		$	6			32	%	$	(76	)		N/M
Net charge-off (recovery) ratio		(0.20	)%		(0.28	)%		0.41	%		0.81	%		0.86	%		0.08	%					(1.06	)%
Nonperforming loans ($ millions)	$	164		$	236		$	321		$	526		$	705		$	(72	)		(31	)%	$	(541	)		(77	)%
Nonperforming loans to total loans		0.67	%		0.91	%		1.18	%		1.92	%		2.40	%		(0.24	)%					(1.73	)%

Syndications
Lead arranger deals
Volume ($ billions)	$	15.8		$	16.8		$	14.4		$	15.3		$	15.9		$	(1.0	)		(6	)%	$	(0.1	)		(1	)%
Number of transactions		87			72			100			76			95			15			21			(8	)		(8	)
League table standing — rank		5			4			4			4			4			1						1
League table standing — market share		3	%		9	%		6	%		7	%		6	%		(6	)%					(3	)%

MIDDLE MARKET BANKING ($ millions)
Loans
Ending balance	$	27,491		$	26,826		$	26,629		$	27,118		$	28,456		$	665			2	%	$	(965	)		(3	)%
Average balance		27,101			26,565			26,591			27,546			28,824			536			2			(1,723	)		(6	)

Deposits
Ending balance		29,023			28,982			28,071			26,785			26,874			41			—			2,149			8
Average balance		28,400			27,402			25,390			25,072			24,128			998			4			4,272			18

Credit Quality
Net charge-offs ($ millions)	$	1		$	11		$	38		$	43		$	42		$	(10	)		(91	)%	$	(41	)		(98	)%
Net charge-off ratio		0.01	%		0.17	%		0.57	%		0.62	%		0.58	%		(0.16	)%					(0.57	)%
Nonperforming loans ($ millions)	$	461		$	584		$	715		$	861		$	988		$	(123	)		(21	)%	$	(527	)		(53	)%
Nonperforming loans to total loans		1.68	%		2.18	%		2.69	%		3.18	%		3.47	%		(0.50	)%					(1.79	)%

NOTES:

(1)		Net interest income-FTE includes taxable equivalent adjustments of $31 million, $32 million, $30 million, $28 million, and $25 million for the quarters ended June 30, 2004, March 31, 2004, December 31, 2003, September 30, 2003, and June 30, 2003, respectively.

(2)		Reflects the transfer of lock box operations to the Corporate line of business during the first quarter of 2004.

(3)		Capital markets includes trading income and underwriting, syndicated lending and advisory fees.

(4)		Loans includes loans held for sale of $60 million, $497 million, $544 million, $471 million, and $327 million, at June 30, 2004, March 31, 2004, December 31, 2003, September 30, 2003, and June 30, 2003, respectively. These amounts are not included in allowance coverage statistics.

(5)		Impacted by the adoption of FIN No. 46.

(6)		Nonperforming loans includes loans held for sale of $9 million, $0, $3 million, $3 million, and $6 million, at June 30, 2004, March 31, 2004, December 31, 2003, September 30, 2003, and June 30, 2003, respectively. These amounts are not included in allowance coverage statistics.

(7)		The allowance for credit losses includes the allowance for loan losses of $1,771 million, $1,971 million, $2,161 million, $2,359 million, and $2,440 million and reserve for unfunded lending commitments and standby letters of credit which is included in other liabilities of $500 million, $500 million, $490 million, $467 million, and $536 million, each for the periods ending June 30, 2004, March 31, 2004, December 31, 2003, September 30, 2003, and June 30, 2003, respectively.

(8)		Prior period data has been adjusted for the transfer of community development activities from the Corporate line of business.


Card Services Line of Business Information — Reported Basis (1)


	2004						2003									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
																Amt			%			Amt			%
INCOME STATEMENT DATA ($ millions)
Net interest income — FTE	$	538		$	483		$	414		$	414		$	332		$	55			11	%	$	206			62	%

Banking fees and commissions		6			5			9			5			9			1			20			(3	)		(33	)
Credit card revenue		907			813			947			895			825			94			12			82			10
Other income (loss)		(12	)		24			(24	)		(12	)		34			(36	)		N/M			(46	)		N/M

Total noninterest income		901			842			932			888			868			59			7			33			4

Total revenue, net of interest expense		1,439			1,325			1,346			1,302			1,200			114			9			239			20

Provision for credit losses		140			171			168			246			182			(31	)		(18	)		(42	)		(23	)

Salaries and employee benefits		166			167			158			157			156			(1	)		(1	)		10			6
Other expense		505			474			457			436			408			31			7			97			24

Total noninterest expense		671			641			615			593			564			30			5			107			19

Income before income taxes		628			513			563			463			454			115			22			174			38
Applicable income taxes		239			194			216			178			175			45			23			64			37

Net income	$	389		$	319		$	347		$	285		$	279		$	70			22	%	$	110			39	%


Memo: Net securitization gains (amortization)	$	(1	)	$	1		$	(27	)	$	(13	)	$	17		$	(2	)		N/M		$	(18	)		N/M

FINANCIAL PERFORMANCE (2)
Return on average common equity		25	%		20	%		22	%		18	%		18	%		5	%					7	%
Efficiency ratio		47			48			46			46			47			(1	)					—

Headcount		11,455			10,591			10,374			10,366			10,751			864			8			704			7

ENDING BALANCES ($ millions)
Owned loans
Held in portfolio	$	7,310		$	7,069		$	6,447		$	6,449		$	6,308		$	241			3	%	$	1,002			16	%
Held for sale (3)		4,406			5,395			5,588			7,729			7,782			(989	)		(18	)		(3,376	)		(43	)

Total owned loans		11,716			12,464			12,035			14,178			14,090			(748	)		(6	)		(2,374	)		(17	)
Seller’s interest and accrued interest receivable		30,177			27,485			27,193			23,285			24,414			2,692			10			5,763			24

Total receivables		41,893			39,949			39,228			37,463			38,504			1,944			5			3,389			9

Memo: Securitized loans		35,614			34,269			37,100			36,763			35,832			1,345			4			(218	)		(1	)

Assets		47,710			45,421			44,792			42,768			43,597			2,289			5			4,113			9

Equity		6,361			6,361			6,361			6,361			6,361			—			—			—			—


Card Services Line of Business Information — Reported Basis (1)


	2004						2003									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
																Amt			%			Amt			%
AVERAGE BALANCES ($ millions)
Owned loans
Held in portfolio	$	7,265		$	6,757		$	6,452		$	6,440		$	7,085		$	508			8	%	$	180			3	%
Held for sale (3)		5,245			5,596			7,064			10,001			7,005			(351	)		(6	)		(1,760	)		(25	)

Total owned loans		12,510			12,353			13,516			16,441			14,090			157			1			(1,580	)		(11	)
Seller’s interest and accrued interest receivable		29,181			26,652			23,763			21,829			23,281			2,529			9			5,900			25

Total receivables		41,691			39,005			37,279			38,270			37,371			2,686			7			4,320			12

Memo: Securitized loans		33,956			35,629			37,311			36,029			35,664			(1,673	)		(5	)		(1,708	)		(5	)

Assets		46,754			44,500			42,360			43,105			42,886			2,254			5			3,868			9

Equity		6,361			6,361			6,361			6,361			6,361			—			—			—			—

CREDIT QUALITY ($ millions)
Net charge-offs	$	140		$	131		$	153		$	211		$	182		$	9			7	%	$	(42	)		(23	)%

Net charge-off ratio (4)		4.48	%		4.24	%		4.62	%		5.13	%		5.17	%		0.24	%					(0.69	)%

Delinquency ratios
30+ days		2.71			3.05			3.31			3.82			3.22			(0.34	)					(0.51	)
90+ days		1.27			1.46			1.55			1.78			1.49			(0.19	)					(0.22	)

Allowance for loan losses	$	486		$	486		$	446		$	431		$	396		$	—			0	%	$	90			23	%
Allowance for loan losses to period-end loans held in portfolio		6.65	%		6.88	%		6.92	%		6.68	%		6.28	%		(0.23	)%					0.37	%

OTHER DATA
Charge volume ($ billions)	$	47.1		$	42.0		$	45.5		$	42.8		$	40.5		$	5.1			12	%	$	6.6			16	%
Net accounts opened (thousands) (5)		9,257			985			885			895			1,823			8,272			N/M			7,434			N/M
Credit cards issued (thousands)		60,813			51,775			50,839			51,500			52,073			9,038			17			8,740			17
Number of cardmemberservices.com customers (millions)		6.3			5.8			5.3			4.7			4.2			0.5			9			2.1			50

Paymentech, Inc.
Bank card volume ($ billions)	$	48.4		$	45.0		$	46.1		$	41.1		$	39.0		$	3.4			8	%	$	9.4			24	%
Total transactions (millions)		2,055			1,957			1,967			1,770			1,697			98			5			358			21

NOTES:

(1)		On a reported basis, income earned on securitized loans is reported in credit card revenue and income earned on Seller’s Interest is reported in net interest income. On a managed basis, net interest income, noninterest income and provision for credit losses are reported in their respective income statement lines.

(2)		See Card Services line of business results on a managed basis in the financial supplement for financial performance ratios on a managed basis.

(3)		Held for sale amounts are not included in allowance coverage statistics.

(4)		Includes net charge-offs related to loans held for sale of $3 million for the quarter ended December 31, 2003, which is recorded in noninterest income.

(5)		Net accounts opened includes originations, purchases and sales.


Card Services Line of Business Information — Managed Basis (1)


	2004						2003									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
																Amt			%			Amt			%
MANAGED FINANCIAL DATA ($ millions)
Managed net interest income — FTE	$	1,814		$	1,757		$	1,689		$	1,605		$	1,488		$	57			3	%	$	326			22	%

Managed banking fees and commissions		6			5			9			5			9			1			20			(3	)		(33	)
Managed credit card revenue		519			407			532			477			438			112			28			81			18
Managed other income (loss)		(12	)		24			(24	)		(12	)		34			(36	)		N/M			(46	)		N/M

Total managed noninterest income		513			436			517			470			481			77			18			32			7

Total managed revenue, net of interest expense		2,327			2,193			2,206			2,075			1,969			134			6			358			18

Managed provision for credit losses		1,028			1,039			1,028			1,019			951			(11	)		(1	)		77			8

Managed salaries and employee benefits		166			167			158			157			156			(1	)		(1	)		10			6
Managed other expense		505			474			457			436			408			31			7			97			24

Total managed noninterest expense		671			641			615			593			564			30			5			107			19

Managed income, net of expense, before taxes	$	628		$	513		$	563		$	463		$	454		$	115			22	%	$	174			38	%


Memo: Net managed securitization gains (amortization)	$	(1	)	$	1		$	(27	)	$	(13	)	$	17		$	(2	)		N/M		$	(18	)		N/M

FINANCIAL PERFORMANCE ON A MANAGED BASIS:
Percentage of average managed outstandings
Managed net interest income — FTE		9.64	%		9.47	%		8.98	%		8.57	%		8.17	%		0.17	%					1.47	%
Managed provision for credit losses		5.47			5.60			5.47			5.44			5.22			(0.13	)					0.25
Managed noninterest income		2.74			2.35			2.75			2.51			2.64			0.39						0.10
Managed risk adjusted margin		6.91			6.22			6.26			5.64			5.59			0.69						1.32
Managed noninterest expense		3.57			3.46			3.27			3.17			3.10			0.11						0.47
Managed income, net of expense before taxes — FTE		3.34			2.76			2.99			2.47			2.49			0.58						0.85

Managed return on average common equity		25	%		20	%		22	%		18	%		18	%		5	%					7	%
Managed efficiency ratio		29			29			28			29			29			—						—

Managed headcount		11,455			10,591			10,374			10,366			10,751			864			8			704			7

ENDING MANAGED BALANCES ($ millions)
Held in portfolio	$	7,310		$	7,069		$	6,447		$	6,449		$	6,308		$	241			3	%	$	1,002			16	%
Held for sale (2)		4,406			5,395			5,588			7,729			7,782			(989	)		(18	)		(3,376	)		(43	)
Securitized		35,614			34,269			37,100			36,763			35,832			1,345			4			(218	)		(1	)
Seller’s interest and accrued interest receivable		30,177			27,485			27,193			23,285			24,414			2,692			10			5,763			24


Total managed loans		77,507			74,218			76,328			74,226			74,336			3,289			4			3,171			4

Managed assets		83,324			79,690			81,892			79,531			79,429			3,634			5			3,895			5

Managed equity		6,361			6,361			6,361			6,361			6,361			—			—			—			—


Card Services Line of Business Information — Managed Basis (1)


	2004						2003									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
																Amt			%			Amt			%
AVERAGE MANAGED BALANCES ($ millions)
Held in portfolio	$	7,265		$	6,757		$	6,452		$	6,440		$	7,085		$	508			8	%	$	180			3	%
Held for sale (2)		5,245			5,596			7,064			10,001			7,005			(351	)		(6	)		(1,760	)		(25	)
Securitized		33,956			35,629			37,311			36,029			35,664			(1,673	)		(5	)		(1,708	)		(5	)
Seller’s interest and accrued interest receivable		29,181			26,652			23,763			21,829			23,281			2,529			9			5,900			25

Total managed loans		75,647			74,634			74,590			74,299			73,035			1,013			1			2,612			4

Managed assets		80,710			80,129			79,671			79,134			78,550			581			1			2,160			3

Managed equity		6,361			6,361			6,361			6,361			6,361			—			—			—			—

MANAGED CREDIT QUALITY ($ millions)
Managed net charge-offs	$	1,028		$	999		$	1,013		$	984		$	951		$	29			3	%	$	77			8	%

Annualized managed net charge-off ratio		5.44	%		5.35	%		5.43	%		5.30	%		5.21	%		0.09	%					0.23	%
Managed 12 month lagged		5.63			5.45			5.71			5.77			5.77			0.18						(0.14	)

Managed Delinquency ratios
30+ days		3.37			3.75			3.90			3.98			3.95			(0.38	)					(0.58	)
90+ days		1.60			1.82			1.85			1.85			1.85			(0.22	)					(0.25	)

Managed allowance for loan losses	$	486		$	486		$	446		$	431		$	396		$	—			0	%	$	90			23	%
Managed allowance for loan losses to period-end loans held in portfolio		6.65	%		6.88	%		6.92	%		6.68	%		6.28	%		(0.23	)%					0.37	%

REPORTED OTHER DATA
Charge volume ($ billions)	$	47.1		$	42.0		$	45.5		$	42.8		$	40.5		$	5.1			12	%	$	6.6			16	%
Net accounts opened (thousands) (3)		9,257			985			885			895			1,823			8,272			N/M			7,434			N/M
Credit cards issued (thousands)		60,813			51,775			50,839			51,500			52,073			9,038			17			8,740			17
Number of cardmemberservices.com customers (millions)		6.3			5.8			5.3			4.7			4.2			0.5			9			2.1			50

Paymentech, Inc.
Bank card volume ($ billions)	$	48.4		$	45.0		$	46.1		$	41.1		$	39.0		$	3.4			8	%	$	9.4			24	%
Total transactions (millions)		2,055			1,957			1,967			1,770			1,697			98			5			358			21

NOTES:

(1)		On a reported basis, income earned on securitized loans is reported in credit card revenue and income earned on Seller’s Interest is reported in net interest income. On a managed basis, net interest income, non-interest income and provision are reported in their respective income statement lines.

(2)		Held for sale amounts are not included in allowance coverage statistics.

(3)		Net accounts opened includes originations, purchases and sales.


Card Services — Reconciliation of Reported and Managed Data


	2004						2003
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr
INCOME STATEMENT DATA ($ millions)
Net interest income — FTE
Reported data for the period	$	538		$	483		$	414		$	414		$	332
Securitization adjustments		1,276			1,274			1,275			1,191			1,156

Managed net interest income		1,814			1,757			1,689			1,605			1,488

Credit card revenue
Reported data for the period	$	907		$	813		$	947		$	895		$	825
Securitization adjustments		(388	)		(406	)		(415	)		(418	)		(387	)

Managed credit card revenue		519			407			532			477			438

Noninterest income
Reported data for the period	$	901		$	842		$	932		$	888		$	868
Securitization adjustments		(388	)		(406	)		(415	)		(418	)		(387	)

Managed noninterest income		513			436			517			470			481

Total revenue, net of interest expense
Reported data for the period	$	1,439		$	1,325		$	1,346		$	1,302		$	1,200
Securitization adjustments		888			868			860			773			769

Total Managed revenue, net of interest expense		2,327			2,193			2,206			2,075			1,969

Provision for credit losses
Reported data for the period	$	140		$	171		$	168		$	246		$	182
Securitization adjustments		888			868			860			773			769

Managed provision for credit losses		1,028			1,039			1,028			1,019			951

BALANCE SHEET — ENDING BALANCES ($ millions)
Owned loans
Held in portfolio	$	7,310		$	7,069		$	6,447		$	6,449		$	6,308
Held for sale		4,406			5,395			5,588			7,729			7,782

Total owned loans		11,716			12,464			12,035			14,178			14,090
Seller’s interest and accrued interest receivable		30,177			27,485			27,193			23,285			24,414

Total on balance sheet loans		41,893			39,949			39,228			37,463			38,504
Securitized loans		35,614			34,269			37,100			36,763			35,832

Total managed loans		77,507			74,218			76,328			74,226			74,336

Total assets
Reported	$	47,710		$	45,421		$	44,792		$	42,768		$	43,597
Securitization adjustments		35,614			34,269			37,100			36,763			35,832

Managed assets		83,324			79,690			81,892			79,531			79,429


Card Services — Reconciliation of Reported and Managed Data


	2004				2003
	2nd Qtr		1st Qtr		4th Qtr		3rd Qtr		2nd Qtr
BALANCE SHEET — AVERAGE BALANCES ($ millions)
Owned loans
Held in portfolio	$	7,265	$	6,757	$	6,452	$	6,440	$	7,085
Held for sale		5,245		5,596		7,064		10,001		7,005

Total owned loans		12,510		12,353		13,516		16,441		14,090
Seller’s interest and accrued interest receivable		29,181		26,652		23,763		21,829		23,281

Total on balance sheet loans		41,691		39,005		37,279		38,270		37,371
Securitized loans		33,956		35,629		37,311		36,029		35,664

Total managed loans		75,647		74,634		74,590		74,299		73,035

Total assets
Reported	$	46,754	$	44,500	$	42,360	$	43,105	$	42,886
Securitization adjustments		33,956		35,629		37,311		36,029		35,664

Managed assets		80,710		80,129		79,671		79,134		78,550

CREDIT QUALITY ($ millions)
Net charge-offs
Reported data for the period	$	140	$	131	$	153	$	211	$	182
Securitization adjustments		888		868		860		773		769

Managed net charge-offs		1,028		999		1,013		984		951

NOTES:

The Corporation evaluates its Card Services line of business trends on a managed basis which assumes that securitized receivables are still on the balance sheet. The Corporation manages its Card Services operations on a managed basis because the receivables that are securitized are subject to underwriting standards comparable to the owned portfolio and are serviced by operating personnel without regard to ownership. The Corporation believes that investors should be informed, and often request information, about the credit performance of the entire managed portfolio in order to understand the quality of the Card Services originations and the related credit risks inherent in the owned portfolio and retained interests in securitizations. In addition, the Corporation funds its Card Services operations, reviews operating results and makes decisions about allocating resources, such as employees and capital, on a managed basis. See “Loan Securitizations” on page 73 and Note 11, “Credit Card Securitizations,” of the December 31, 2003 Form 10-K for additional information related to the Corporation’s securitization activity.


Investment Management Group Line of Business Information


	2004						2003									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
																Amt			%			Amt			%
INCOME STATEMENT DATA ($ millions)
Net interest income — FTE	$	168		$	169		$	162		$	115		$	90		$	(1	)		(1	)%	$	78			87	%

Banking fees and commissions		119			124			119			88			70			(5	)		(4	)		49			70
Service charges on deposits		4			5			4			5			4			(1	)		(20	)		—			—
Fiduciary and investment management fees		176			185			162			156			154			(9	)		(5	)		22			14
Other income		25			29			29			8			2			(4	)		(14	)		23			N/M

Total noninterest income		324			343			314			257			230			(19	)		(6	)		94			41

Total revenue, net of interest expense		492			512			476			372			320			(20	)		(4	)		172			54

Provision for credit losses		—			(2	)		—			4			6			2			N/M			(6	)		N/M

Salaries and employee benefits		113			110			119			114			109			3			3			4			4
Other expense		205			193			191			110			84			12			6			121			N/M

Total noninterest expense		318			303			310			224			193			15			5			125			65

Income before income taxes		174			211			166			144			121			(37	)		(18	)		53			44
Applicable income taxes		64			78			61			53			45			(14	)		(18	)		19			42

Net Income	$	110		$	133		$	105		$	91		$	76		$	(23	)		(17	)%	$	34			45	%


FINANCIAL PERFORMANCE
Return on average common equity		28	%		34	%		27	%		31	%		32	%		(6	)%					(4	)%
Efficiency ratio		65			59			65			60			60			6						5

Headcount		4,050			4,046			4,845			4,949			4,086			4			—			(36	)		(1	)

ENDING BALANCES ($ millions)
Commercial	$	3,424		$	3,348		$	3,236		$	3,153		$	3,014			76			2			410			14
Consumer		4,476			4,258			4,144			4,002			3,565		$	218			5		$	911			26

Total Loans		7,900			7,606			7,380			7,155			6,579			294			4			1,321			20
Assets		16,077			16,256			15,839			15,656			8,163			(179	)		(1	)		7,914			97

Demand deposits		1,793			1,608			1,702			971			2,036			185			12			(243	)		(12	)
Savings		10,661			10,033			9,414			8,327			7,812			628			6			2,849			36
Time		557			592			597			621			655			(35	)		(6	)		(98	)		(15	)
Foreign offices		287			226			290			219			255			61			27			32			13

Total deposits		13,298			12,459			12,003			10,138			10,758			839			7			2,540			24

Insurance Policy and Claims Reserves		6,476			6,783			6,712			6,496			219			(307	)		(5	)		6,257			N/M

Equity		1,554			1,554			1,554			1,553			953			—			—			601			63


Investment Management Group Line of Business Information


	2004						2003									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
																Amt			%			Amt			%
AVERAGE BALANCES ($ millions)
Commercial	$	3,373		$	3,283		$	3,159		$	2,996		$	3,034		$	90			3	%	$	339			11	%
Consumer		4,326			4,118			4,070			3,669			3,556			208			5			770			22

Total Loans		7,699			7,401			7,229			6,665			6,590			298			4			1,109			17
Assets		15,878			15,567			15,669			10,700			8,263			311			2			7,615			92

Demand deposits		1,673			1,716			1,734			2,019			1,765			(43	)		(3	)		(92	)		(5	)
Savings		10,414			9,569			8,893			8,032			7,678			845			9			2,736			36
Time		574			586			611			633			692			(12	)		(2	)		(118	)		(17	)
Foreign offices		216			157			165			165			184			59			38			32			17

Total deposits		12,877			12,028			11,403			10,849			10,319			849			7			2,558			25

Insurance Policy and Claims Reserves		6,682			6,747			6,607			2,265			221			(65	)		(1	)		6,461			N/M

Equity		1,554			1,554			1,554			1,149			954			—			—			600			63

CREDIT QUALITY ($ millions)
Net charge-offs (recoveries)
Commercial	$	(1	)	$	(2	)	$	(1	)	$	5		$	4		$	1			50	%	$	(5	)		N/M
Consumer		1			—			1			(1	)		2			1			N/M			(1	)		(50	)

Total net charge-offs (recoveries)		—			(2	)		—			4			6			2			N/M			(6	)		N/M

Net charge-off (recovery) ratios
Commercial		(0.12	)%		(0.24	)%		(0.13	)%		0.67	%		0.53	%		0.12	%					(0.65	)%
Consumer		0.09			—			0.10			(0.11	)		0.22			0.09						(0.13	)
Total net charge-off (recovery) ratio		—			(0.11	)		—			0.24			0.36			0.11						(0.36	)

Nonperforming assets
Commercial	$	23		$	28		$	32		$	60		$	67		$	(5	)		(18	)%	$	(44	)		(66	)%
Consumer		19			16			10			14			13			3			19			6			46

Total nonperforming loans		42			44			42			74			80			(2	)		(5	)		(38	)		(48	)
Other, including other real estate owned (“OREO”)		15			17			18			1			2			(2	)		(12	)		13			N/M

Total nonperforming assets		57			61			60			75			82			(4	)		(7	)		(25	)		(30	)

Allowance for loan losses		38			38			40			40			40			—			—			(2	)		(5	)
Allowance for loan losses to period-end loans		0.48	%		0.50	%		0.54	%		0.56	%		0.61	%		(0.02	)%					(0.13	)%
Allowance for loan losses to nonperforming loans		90			86			95			54			50			4						40
Nonperforming assets to related assets		0.72			0.80			0.81			1.05			1.25			(0.08	)					(0.53	)

ASSETS UNDER MANAGEMENT
ENDING BALANCES ($ millions)
Mutual Funds	$	102,073		$	102,891		$	105,489		$	100,646		$	102,494		$	(818	)		(1	)%	$	(421	)		0	%
Other		80,691			85,379			81,499			74,902			68,395			(4,688	)		(5	)		12,296			18

Total		182,764			188,270			186,988			175,548			170,889			(5,506	)		(3	)		11,875			7

By type
Money market		65,570			69,970			72,433			70,820			78,457			(4,400	)		(6	)		(12,887	)		(16	)
Equity		52,602			52,255			50,574			42,150			40,584			347			1			12,018			30
Fixed income		64,592			66,045			63,981			62,578			51,848			(1,453	)		(2	)		12,744			25

Total		182,764			188,270			186,988			175,548			170,889			(5,506	)		(3	)		11,875			7


Investment Management Group Line of Business Information


	2004						2003									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
																Amt			%			Amt			%
By channel
Private client services		44,285			45,190			44,992			42,970			43,236			(905	)		(2	)		1,049			2
Retail brokerage		8,952			8,924			8,623			8,139			7,924			28			—			1,028			13
Institutional		94,646			100,077			97,568			95,856			89,891			(5,431	)		(5	)		4,755			5
Commercial cash sweep		6,303			6,581			8,134			8,581			7,949			(278	)		(4	)		(1,646	)		(21	)
Capital markets		3,827			3,917			3,631			2,935			3,049			(90	)		(2	)		778			26
External (1)		10,970			9,896			10,315			8,525			11,073			1,074			11			(103	)		(1	)
All other direct (2)		13,781			13,685			13,725			8,542			7,767			96			1			6,014			77

Total		182,764			188,270			186,988			175,548			170,889			(5,506	)		(3	)		11,875			7

MORNINGSTAR RANKINGS
% of customer assets in funds ranked 4 or better		53	%		51	%		48	%		54	%		53	%		2	%					0	%
% of customer assets in funds ranked 3 or better		86			84			87			88			91			2						(5	)

PRIVATE CLIENT SERVICES ($ millions)
Number of private client advisors		632			640			646			664			662			(8	)		(1	)		(30	)		(5	)
Number of private client offices		89			90			89			89			89			(1	)		(1	)		—			—

Total client assets — end of period (3)	$	67,557		$	68,271		$	67,675		$	64,307		$	64,270		$	(714	)		(1	)%	$	3,287			5	%

Ending balances
Loans		7,488			7,198			6,919			6,604			6,483			290			4			1,005			16
Deposits		13,031			12,322			11,747			10,548			10,071			709			6			2,960			29

Average balances
Loans		7,313			7,020			6,762			6,492			6,543			293			4			770			12
Deposits		12,659			11,744			10,976			10,125			9,752			915			8			2,907			30

INSURANCE GROUP ($ millions)
Consolidated gross insurance-related revenue (4)	$	259		$	257		$	253		$	160		$	118		$	2			1	%	$	141			N/M

Ending Balances
Invested assets		5,614			6,247			6,079			6,042			407			(633	)		(10	)		5,207			N/M
Policy loans		399			402			411			415			—			(3	)		(1	)		399			N/M

Policies in-force — direct / assumed (thousands) (5)		2,081			1,993			2,006			2,031			935			88			4			1,146			N/M

Insurance in-force — direct / assumed		239,160			235,815			231,533			228,076			12,514			3,345			1			226,646			N/M
Insurance in-force — retained		42,223			41,885			42,596			42,966			12,513			338			1			29,710			N/M
Insurance policy and claims reserves		6,476			6,783			6,712			6,496			219			(307	)		(5	)		6,257			N/M

A.M. Best rating (6)		A			A			A			A			—			—			—			—			—

NOTES:

(1)		Includes broker/dealers, trust companies and registered investment advisors that sell, or offer, One Group Funds.

(2)		One Group funds invested in other One Group funds and other mutual funds sub-advised.

(3)		Fiduciary, brokerage, and other related assets (managed and non-managed).

(4)		Includes insurance revenues recorded in other lines of business.

(5)		Prior period data has been adjusted to conform to current period presentation.

(6)		A.M. Best maintained A ratings with a stable outlook.


Corporate Line of Business Information


	2004						2003 (5)									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
																Amt			%			Amt			%
INCOME STATEMENT DATA ($ millions)
Net interest income (expense) — FTE (1)	$	(255	)	$	(214	)	$	(129	)	$	(78	)	$	(61	)	$	(41	)		(19	)%	$	(194	)		N/M

Banking fees and commissions		(14	)		(14	)		(15	)		(20	)		(30	)		—			—			16			53
Credit card revenue		—			—			1			(1	)		—			—			N/M			—			N/M
Service charges on deposits		—			(1	)		1			—			(1	)		1			N/M			1			N/M
Fiduciary and investment management fees		6			6			8			8			8			—			—			(2	)		(25	)
Investment securities gains (losses)		(89	)		122			(173	)		37			154			(211	)		N/M			(243	)		N/M
Trading gains (losses)		25			3			(9	)		(7	)		(1	)		22			N/M			26			N/M
Other income (loss)		99			142			37			(105	)		48			(43	)		(30	)		51			N/M

Total noninterest (loss) income		27			258			(150	)		(88	)		178			(231	)		(90	)		(151	)		(85	)

Total revenue, net of interest expense		(228	)		44			(279	)		(166	)		117			(272	)		N/M			(345	)		N/M

Provision for credit losses		15			46			471			78			155			(31	)		(67	)		(140	)		(90	)

Salaries and employee benefits (2)		285			285			210			235			246			—			—			39			16
Other expense (income) (2)		(32	)		(25	)		75			(53	)		(43	)		(7	)		(28	)		11			25

Total noninterest expense		253			260			285			182			203			(7	)		(3	)		50			25

Loss before income tax benefit		(496	)		(262	)		(1,035	)		(426	)		(241	)		(234	)		(89	)		(255	)		N/M
Applicable income tax benefit		(211	)		(135	)		(402	)		(169	)		(108	)		(76	)		(56	)		(103	)		(95	)

Income (Loss) from continuing operations, net of tax benefit	$	(285	)		(127	)		(633	)		(257	)		(133	)	$	(158	)		N/M		$	(152	)		N/M

Discontinued Operations
Income from discontinued operations		(5	)		1			604			14			14			(6	)		N/M			(19	)		N/M
Applicable income taxes		(1	)		—			219			5			5			(1	)		N/M			(6	)		N/M

Income from discontinued operations, net of taxes	$	(4	)		1			385			9			9		$	(5	)		N/M		$	(13	)		N/M
Net loss	$	(289	)	$	(126	)	$	(248	)	$	(248	)	$	(124	)	$	(163	)		N/M		$	(165	)		N/M


Headcount (2)		14,951			15,081			14,261			14,693			15,256			(130	)		(1	)%		(305	)		(2	)%

ENDING BALANCES ($ millions)
Loans (3)	$	5,851		$	7,172		$	8,745		$	10,470		$	12,434		$	(1,321	)		(18	)%	$	(6,583	)		(53	)%

Assets		61,414			71,303			69,871			70,704			82,192			(9,889	)		(14	)		(20,778	)		(25	)
Memo
Treasury investments		25,587			40,362			39,281			40,545			45,258			(14,775	)		(37	)		(19,671	)		(43	)
Principal investments		2,960			2,914			3,213			2,912			2,600			46			2			360			14

Deposits		8,873			10,102			11,301			13,235			12,821			(1,229	)		(12	)		(3,948	)		(31	)

Equity		4,016			4,458			3,279			2,272			2,718			(442	)		(10	)		1,298			48


Corporate Line of Business Information


	2004						2003									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
																Amt			%			Amt			%
AVERAGE BALANCES ($ millions)
Loans	$	6,587		$	8,317		$	9,763		$	11,232		$	13,016		$	(1,730	)		(21	)%	$	(6,429	)		(49	)%

Assets		62,445			66,855			67,872			71,001			70,150			(4,410	)		(7	)		(7,705	)		(11	)

Deposits		9,080			10,333			11,053			12,321			12,598			(1,253	)		(12	)		(3,518	)		(28	)

Equity		3,871			4,027			2,977			2,477			2,922			(156	)		(4	)		949			32

CREDIT QUALITY ($ millions)
Net charge-offs		13			56			717			82			83			(43	)		(77	)		(70	)		(84	)

Nonperforming assets
Nonperforming loans (4)		287			433			582			673			719			(146	)		(34	)		(432	)		(60	)
Other, including other real estate owned (“OREO”)		49			66			78			56			3			(17	)		(26	)		46			N/M

Total nonperforming assets		336			499			660			729			722			(163	)		(33	)		(386	)		(53	)

Allowance for loan losses ($ millions)		140			138			148			394			398			2			1			(258	)		(65	)
Allowance for loan losses to period-end loans		3.64	%		2.94	%		2.76	%		3.77	%		3.21	%		0.70	%					0.43	%
Allowance for loan losses to nonperforming loans (4)		73			55			43			59			56			18						17
Nonperforming assets to related assets		5.69			6.89			7.48			6.93			5.81			(1.20	)					(0.12	)

NOTES:

(1)		Net interest income-FTE includes taxable equivalent adjustments of $8 million, $7 million, $10 million, $7 million, and $9 million for the quarters ended June 30, 2004, March 31, 2004, December 31, 2003, September 30, 2003, and June 30, 2003, respectively.

(2)		Reflects the transfer of certain technology and operations functions from Commercial Banking and Investment Management Group during the first quarter of 2004.

(3)		Loans include loans held for sale of $2,003 million, $2,479 million, $3,389 million, $17 million, and $18 million, at June 30, 2004, March 31, 2004, December 31, 2003, September 30, 2003, and June 30, 2003, respectively. These amounts are not included in allowance coverage statistics.

(4)		Nonperforming loans include loans held for sale of $95 million, $181 million, $239 million, $5 million and $3 million at June 30, 2004, March 31, 2004, December 31, 2003, September 30, 2003, and June 30, 2003, respectively. These amounts are not included in allowance coverage statistics.

(5)		Prior period data has been adjusted for the transfer of community development activities to the Commercial Banking line of business.


Consolidated Balance Sheets — Reported Basis


	2004						2003									Change from
	June 30			Mar 31			Dec 31			Sept 30			June 30			Mar 31, 2004						June 30, 2003
																Amt			%			Amt			%
ASSETS ($ millions)
Cash and due from banks	$	14,669		$	15,675		$	17,089		$	16,814		$	19,529		$	(1,006	)		(6	)%	$	(4,860	)		(25	)%
Interest-bearing due from banks		7,310			4,780			3,093			3,486			5,909			2,530			53			1,401			24
Federal funds sold and securities purchased under resale agreements		12,163			10,129			15,551			13,786			21,639			2,034			20			(9,476	)		(44	)
Trading assets		3,132			8,721			11,584			13,626			11,478			(5,589	)		(64	)		(8,346	)		(73	)
Derivative product assets		5,105			5,464			5,208			5,603			5,343			(359	)		(7	)		(238	)		(4	)
Investment securities		73,097			86,884			84,951			76,145			75,177			(13,787	)		(16	)		(2,080	)		(3	)
Interests in purchased receivables		30,184			28,912			32,938			—			—			1,272			4			30,184			N/M
Loans (1)		135,034			137,529			138,147			141,710			144,583			(2,495	)		(2	)		(9,549	)		(7	)
Allowance for loan losses		(3,123	)		(3,323	)		(3,472	)		(3,907	)		(3,962	)		200			6			839			21

Loans, net		131,911			134,206			134,675			137,803			140,621			(2,295	)		(2	)		(8,710	)		(6	)
Premises and equipment		3,174			3,061			2,960			2,731			2,605			113			4			569			22
Goodwill		2,057			2,061			2,061			2,005			1,893			(4	)		—			164			9
Other intangible assets		697			717			758			804			777			(20	)		(3	)		(80	)		(10	)
Other assets		15,804			18,980			15,695			17,670			15,028			(3,176	)		(17	)		776			5

Total assets	$	299,303		$	319,590		$	326,563		$	290,473		$	299,999		$	(20,287	)		(6	)%	$	(696	)		0	%


LIABILITIES ($ millions)
Deposits:
Demand	$	21,495		$	23,710		$	24,485		$	25,191		$	34,361		$	(2,215	)		(9	)%	$	(12,866	)		(37	)%
Savings		107,056			103,671			99,175			96,170			95,221			3,385			3			11,835			12
Time		21,226			22,054			22,942			24,263			25,977			(828	)		(4	)		(4,751	)		(18	)
Foreign offices		14,698			16,505			18,019			17,787			16,456			(1,807	)		(11	)		(1,758	)		(11	)

Total deposits		164,475			165,940			164,621			163,411			172,015			(1,465	)		(1	)		(7,540	)		(4	)
Federal funds purchased and securities sold under repurchase agreements		7,256			14,803			20,573			24,464			25,382			(7,547	)		(51	)		(18,126	)		(71	)
Other short-term borrowings		38,317			41,042			47,740			11,098			13,526			(2,725	)		(7	)		24,791			N/M
Long-term debt		42,483			45,312			46,764			44,225			46,070			(2,829	)		(6	)		(3,587	)		(8	)
Insurance policy and claims reserves		6,476			6,783			6,713			6,496			219			(307	)		(5	)		6,257			N/M
Derivative product liabilities		3,782			4,244			4,050			4,688			4,188			(462	)		(11	)		(406	)		(10	)
Other liabilities		12,358			16,868			12,683			13,680			16,342			(4,510	)		(27	)		(3,984	)		(24	)

Total liabilities		275,147			294,992			303,144			268,062			277,742			(19,845	)		(7	)		(2,595	)		(1	)


STOCKHOLDERS’ EQUITY ($ millions)
Common stock	$	12		$	12		$	12		$	12		$	12		$	—			0	%	$	—			0	%
Surplus		10,533			10,518			10,290			10,254			10,240			15			—			293			3
Retained earnings		16,850			16,242			15,514			14,816			14,213			608			4			2,637			19
Accumulated other adjustments to stockholders’ equity		(192	)		340			127			(75	)		(76	)		(532	)		N/M			(116	)		N/M
Deferred compensation		(277	)		(332	)		(189	)		(220	)		(245	)		55			17			(32	)		(13	)
Treasury stock		(2,770	)		(2,182	)		(2,335	)		(2,376	)		(1,887	)		(588	)		(27	)		(883	)		(47	)

Total stockholders’ equity		24,156			24,598			23,419			22,411			22,257			(442	)		(2	)		1,899			9

Total liabilities and stockholders’ equity	$	299,303		$	319,590		$	326,563		$	290,473		$	299,999		$	(20,287	)		(6	)%	$	(696	)		0	%


Common Shares — period-end (millions)
Issued		1,181			1,181			1,181			1,181			1,181			—			—			—			—
Treasury shares		66			56			61			63			51			10			18			15			29

Outstanding		1,115			1,125			1,120			1,118			1,130			(10	)		(1	)		(15	)		(1	)

NOTES:

(1)

Loans include loans held for sale of $8.0 billion, $11.1 billion, $12.0 billion, $10.7 billion, and $10.2 billion, at June 30, 2004, March 31, 2004, December 31, 2003, September 30, 2003, and June 30, 2003, respectively. These amounts are not included in allowance coverage ratios.


Credit Quality Statistics — Reported Basis


	2004						2003									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
																Amt			%			Amt			%
($ millions)
Provision for credit losses	$	49		$	141		$	672		$	416		$	461		$	(92	)		(65	)%	$	(412	)		(89	)%

Gross charge-offs		328			385			1,206			642			618			(57	)		(15	)		(290	)		(47	)
Recoveries		104			113			122			102			129			(9	)		(8	)		(25	)		(19	)

Total net charge-offs		224			272			1,084			540			489			(48	)		(18	)		(265	)		(54	)

Net charge-offs (recoveries)
Retail		83			95			148			144			113			(12	)		(13	)		(30	)		(27	)
Commercial Banking
Corporate Banking		(13	)		(19	)		28			56			63			6			32			(76	)		N/M
Middle Market Banking		1			11			38			43			42			(10	)		(91	)		(41	)		(98	)

Total Commercial Banking		(12	)		(8	)		66			99			105			(4	)		(50	)		(117	)		N/M
Card Services		140			131			153			211			182			9			7			(42	)		(23	)
Investment Management Group		—			(2	)		—			4			6			2			N/M			(6	)		N/M
Corporate		13			56			717			82			83			(43	)		(77	)		(70	)		(84	)

Total net charge-offs		224			272			1,084			540			489			(48	)		(18	)		(265	)		(54	)

Memo: Card Services — Managed Basis		1,028			999			1,013			984			951			29			3			77			8

Net charge-off (recovery) ratios
Retail		0.58	%		0.66	%		1.06	%		1.05	%		0.85	%		(0.08	)%					(0.27	)%
Commercial Banking:
Corporate Banking		(0.20	)		(0.28	)		0.41			0.81			0.86			0.08						(1.06	)
Middle Market Banking		0.01			0.17			0.57			0.62			0.58			(0.16	)					(0.57	)
Total Commercial Banking		(0.09	)		(0.06	)		0.49			0.72			0.72			(0.03	)					(0.81	)
Card Services		4.48			4.24			4.62			5.13			5.17			0.24						(0.69	)
Investment Management Group		—			(0.11	)		—			0.24			0.36			0.11						(0.36	)
Corporate		0.79			2.69			29.38			2.92			2.55			(1.90	)					(1.76	)
Total net charge-off (recovery) ratio		0.65			0.78			3.11			1.50			1.35			(0.13	)					(0.70	)

Memo: Card Services — Managed Basis		5.44			5.35			5.43			5.30			5.21			0.09						0.23

Allowance for loan losses — period-end	$	3,123		$	3,323		$	3,472		$	3,907		$	3,962		$	(200	)		(6	)%	$	(839	)		(21	)%
Allowance for credit losses — period-end (2)		3,631			3,831			3,962			4,374			4,498			(200	)		(5	)		(867	)		(19	)


Credit Quality Statistics — Reported Basis


	2004						2003									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
																Amt			%			Amt			%
($ millions)
Nonperforming assets — period-end
Nonperforming loans
Retail	$	476		$	504		$	540		$	573		$	570			(28	)		(6	)		(94	)		(16	)
Commercial Banking
Corporate Banking		164			236			321			526			705			(72	)		(31	)		(541	)		(77	)
Middle Market Banking		461			584			715			861			988			(123	)		(21	)		(527	)		(53	)

Total Commercial Banking		625			820			1,036			1,387			1,693			(195	)		(24	)		(1,068	)		(63	)
Investment Management Group		42			44			42			74			80			(2	)		(5	)		(38	)		(48	)
Corporate		287			433			582			673			719			(146	)		(34	)		(432	)		(60	)

Total nonperforming loans (1)		1,430			1,801			2,200			2,707			3,062			(371	)		(21	)		(1,632	)		(53	)
Other, including other real estate owned		128			156			195			214			245			(28	)		(18	)		(117	)		(48	)

Total nonperforming assets	$	1,558		$	1,957		$	2,395		$	2,921		$	3,307		$	(399	)		(20	)%	$	(1,749	)		(53	)%


Nonperforming assets to related assets		1.15	%		1.42	%		1.73	%		2.06	%		2.28	%		(0.27	)%					(1.13	)%
Allowance for loan losses to period-end loans		2.46			2.63			2.75			2.98			2.95			(0.17	)					(0.49	)
Allowance for loan losses to nonperforming loans (1)		236			205			178			145			130			31						106
Allowance for credit losses to period-end loans (2)		2.86			3.03			3.14			3.34			3.35			(0.17	)					(0.49	)
Allowance for credit losses to nonperforming loans (1) (2)		275			237			203			162			147			38						128

Credit card delinquency rate
Reported Basis
30+ days		2.71			3.05			3.31			3.82			3.22			(0.34	)					(0.51	)
90+ days		1.27			1.46			1.55			1.78			1.49			(0.19	)					(0.22	)
Managed Basis
30+ days		3.37			3.75			3.90			3.98			3.95			(0.38	)					(0.58	)
90+ days		1.60			1.82			1.85			1.85			1.85			(0.22	)					(0.25	)

COMMERCIAL LOAN SALES ($ millions)
Loans sold and loans transferred to loans
held for sale
Nonperforming loans	$	—		$	55		$	36		$	132		$	28		$	(55	)		N/M		$	(28	)		N/M
Other loans with credit related losses		18			59			241			121			217			(41	)		(69	)		(199	)		(92	)
Other loans		460			128			105			4			41			332			N/M			419			N/M

Total	$	478		$	242		$	382		$	257		$	286		$	236			98	%	$	192			67	%


Impact of sales, transfers to loans held for sale
and valuation adjustments on held for sale
Charge-offs on loans sold and transferred to held
for sale: (3) (4)
Nonperforming loans	$	—		$	7		$	3		$	22		$	1		$	(7	)		N/M		$	(1	)		N/M
Other loans with credit related losses		—			1			6			11			21			(1	)		N/M			(21	)		N/M

Total charge-offs to allowance		—			8			9			33			22			(8	)		N/M			(22	)		N/M
(Gains) on loans sold and held for sale		(12	)		(14	)		(34	)		(25	)		(14	)		2			14			2			14

Total	$	(12	)	$	(6	)	$	(25	)	$	8		$	8		$	(6	)		N/M		$	(20	)		N/M

NOTES:

(1)		Nonperforming loans include loans held for sale of $109 million, $183 million, $244 million, $10 million, and $11 million at June 30, 2004, March 31, 2004, December 31, 2003, September 30, 2003, and June 30, 2003, respectively. These amounts are not included in allowance coverage statistics.

(2)		The allowance for credit losses includes the allowance for loan losses of $3,123 million, $3,323 million, $3,472 million, $3,907 million, and $3,962 million and reserve for unfunded lending commitments and standby letters of credit which is included in other liabilities of $508 million, $508 million, $490 million, $467 million, and $536 million, at June 30, 2004, March 31, 2004, December 31, 2003, September 30, 2003, and June 30, 2003, respectively.

(3)		These charge-offs are included in Commercial Banking net charge-offs.

(4)		When loans are reclassified to loans held for sale appropriate charge-offs are recorded. Subsequent write-downs in market value on loans held for sale are reflected in other income / loss.


Capital and Intangible Assets


	2004						2003									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
																Amt			%			Amt			%
SELECTED CAPITAL RATIOS
Regulatory risk-based capital
Tier 1 capital	$	25,593		$	25,462		$	24,499		$	23,708		$	23,721		$	131			(1	)%	$	1,872			8	%
Tier 2 capital		8,910			8,954			9,135			9,180			9,316			(44	)		—			(406	)		(4	)

Total capital	$	34,503		$	34,416		$	33,634		$	32,888		$	33,037		$	87			0	%	$	1,466			4	%

Total risk-weighted assets	$	255,385		$	249,247		$	245,441		$	243,130		$	243,779		$	6,138			2	%	$	11,606			5	%

Risk-based capital ratios
Tier 1		10.0	%		10.2	%		10.0	%		9.8	%		9.7	%		(0.2	)%					0.3	%
Total		13.5			13.8			13.7			13.5			13.6			(0.3	)					(0.1	)
Leverage ratio		8.5			8.1			8.8			8.4			8.7			0.4						(0.2	)

INTANGIBLE ASSETS ($ millions)
Goodwill	$	2,057		$	2,061		$	2,061		$	2,005		$	1,893		$	(4	)		0	%	$	164			9	%
Other nonqualifying intangibles		262			281			290			302			303			(19	)		(7	)		(41	)		(14	)

Subtotal		2,319			2,342			2,351			2,307			2,196			(23	)		(1	)		123			6
Qualifying intangibles		435			436			468			502			474			(1	)		—			(39	)		(8	)

Total intangibles	$	2,754		$	2,778		$	2,819		$	2,809		$	2,670		$	(24	)		(1	)%	$	84			3	%


Average Balance Sheets, Yields & Rates — Reported Basis


	2004						2003									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
																Amt			%			Amt			%
AVERAGE BALANCE SHEET ($ millions)
Assets
Short-term investments	$	11,994		$	14,008		$	16,316		$	17,029		$	17,775		$	(2,014	)		(14	)%	$	(5,781	)		(33	)%
Trading assets		6,236			10,187			12,139			11,669			10,211			(3,951	)		(39	)		(3,975	)		(39	)
Investment securities
U.S. government and federal agency		32,991			37,483			35,817			36,937			33,356			(4,492	)		(12	)		(365	)		(1	)
States and political subdivisions		972			1,311			1,300			1,278			1,237			(339	)		(26	)		(265	)		(21	)
Other		48,157			45,556			38,662			33,523			32,142			2,601			6			16,015			50

Total investment securities		82,120			84,350			75,779			71,738			66,735			(2,230	)		(3	)		15,385			23
Interests in purchased receivables (1)		28,982			31,145			358			—			—			(2,163	)		(7	)		28,982			N/M
Loans (2)		136,932			138,652			139,741			144,162			144,635			(1,720	)		(1	)		(7,703	)		(5	)

Total earning assets		266,264			278,342			244,333			244,598			239,356			(12,078	)		(4	)		26,908			11
Allowance for loan losses		(3,258	)		(3,446	)		(3,676	)		(4,012	)		(3,999	)		188			5			741			19
Other assets — nonearning		42,138			42,697			41,089			43,090			41,452			(559	)		(1	)		686			2

Total assets	$	305,144		$	317,593		$	281,746		$	283,676		$	276,809		$	(12,449	)		(4	)%	$	28,335			10	%


Liabilities and Stockholders’ Equity
Deposits — interest-bearing (3)
Savings	$	11,211		$	10,732		$	10,483		$	10,453		$	10,260		$	479			4	%	$	951			9	%
Money market		72,689			69,419			66,925			64,728			62,881			3,270			5			9,808			16
Time		21,602			22,467			23,471			25,014			27,104			(865	)		(4	)		(5,502	)		(20	)
Foreign offices (4)		14,947			16,328			16,085			16,244			15,985			(1,381	)		(8	)		(1,038	)		(6	)

Total deposits — interest-bearing		120,449			118,946			116,964			116,439			116,230			1,503			1			4,219			4
Federal funds purchased and securities sold under repurchase agreements		11,209			16,914			21,491			23,003			20,383			(5,705	)		(34	)		(9,174	)		(45	)
Other short-term borrowings (1)		38,917			44,454			10,935			11,216			13,413			(5,537	)		(12	)		25,504			N/M
Long-term debt (5)		43,975			46,285			44,313			45,248			45,014			(2,310	)		(5	)		(1,039	)		(2	)

Total interest-bearing liabilities		214,550			226,599			193,703			195,906			195,040			(12,049	)		(5	)		19,510			10
Noninterest-bearing deposits		44,461			44,051			43,156			45,995			44,077			410			1			384			1
Other liabilities		22,122			22,776			21,770			19,563			15,230			(654	)		(3	)		6,892			45
Common stockholders’ equity		24,011			24,167			23,117			22,212			22,462			(156	)		(1	)		1,549			7

Total liabilities and equity	$	305,144		$	317,593		$	281,746		$	283,676		$	276,809		$	(12,449	)		(4	)%	$	28,335			10	%


Average Balance Sheets, Yields & Rates — Reported Basis


	2004				2003						Change from
	2nd Qtr		1st Qtr		4th Qtr			3rd Qtr		2nd Qtr	1Q04						2Q03
											Amt			%			Amt			%
INCOME / EXPENSE ($ millions)
Assets
Short-term investments	$	39	$	40	$	43	$	41	$	50	$	(1	)		(3	)%	$	(11	)		(22	)%
Trading assets (6)		62		95		107		100		87		(33	)		(35	)		(25	)		(29	)
Investment securities (6)
U.S. government and federal agency		473		455		393		366		336		18			4			137			41
States and political subdivisions		17		21		22		21		21		(4	)		(19	)		(4	)		(19	)
Other		565		557		538		466		444		8			1			121			27

Total investment securities		1,055		1,033		953		853		801		22			2			254			32
Interests in purchased receivables (1)		90		93		—		—		—		(3	)		(3	)		90			N/M
Loans (2) (6)		1,972		2,081		2,114		2,219		2,231		(109	)		(5	)		(259	)		(12	)

Total earning assets	$	3,218	$	3,342	$	3,217	$	3,213	$	3,169	$	(124	)		(4	)%	$	49			2	%

Liabilities
Deposits — interest-bearing (3)
Savings	$	13	$	13	$	13	$	19	$	14	$	—			0	%	$	(1	)		(7	)%
Money market		187		171		166		154		171		16			9			16			9
Time		210		227		231		251		274		(17	)		(7	)		(64	)		(23	)
Foreign offices (4)		54		61		59		59		65		(7	)		(11	)		(11	)		(17	)

Total deposits — interest-bearing		464		472		469		483		524		(8	)		(2	)		(60	)		(11	)
Federal funds purchased and securities sold
under repurchase agreements		38		53		66		70		73		(15	)		(28	)		(35	)		(48	)
Other short-term borrowings (1)		147		171		83		81		90		(24	)		(14	)		57			63
Long-term debt (5)		383		397		445		452		473		(14	)		(4	)		(90	)		(19	)

Total interest-bearing liabilities	$	1,032	$	1,093	$	1,063	$	1,086	$	1,160	$	(61	)		(6	)%	$	(128	)		(11	)%


Interest income	$	3,218	$	3,342	$	3,217	$	3,213	$	3,169	$	(124	)		(4	)%	$	49			2	%
Interest expense		1,032		1,093		1,063		1,086		1,160		(61	)		(6	)		(128	)		(11	)

Net interest income	$	2,186	$	2,249	$	2,154	$	2,127	$	2,009	$	(63	)		(3	)%	$	177			9	%


Average Balance Sheets, Yields & Rates — Reported Basis


	2004						2003									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04				2Q03
																Amt			%	Amt			%
YIELDS AND RATES
Assets
Short-term investments		1.31	%		1.15	%		1.05	%		0.96	%		1.13	%		0.16	%			0.18	%
Trading assets (6)		4.00			3.75			3.50			3.40			3.42			0.25				0.58
Investment securities (6)
U.S. government and federal agency		5.77			4.88			4.35			3.93			4.04			0.89				1.73
States and political subdivisions		7.03			6.44			6.71			6.52			6.81			0.59				0.22
Other		4.72			4.92			5.52			5.52			5.54			(0.20	)			(0.82	)
Total investment securities		5.17			4.93			4.99			4.72			4.81			0.24				0.36
Interests in purchased receivables (1)		1.25			1.20			—			—			—			0.05				1.25
Loans (2)		5.79			6.04			6.00			6.11			6.19			(0.25	)			(0.40	)
Total earning assets		4.86			4.83			5.22			5.21			5.31			0.03				(0.45	)

Liabilities
Deposits — interest-bearing (3)
Savings		0.47			0.49			0.49			0.72			0.55			(0.02	)			(0.08	)
Money market		1.03			0.99			0.98			0.94			1.09			0.04				(0.06	)
Time		3.91			4.06			3.90			3.98			4.05			(0.15	)			(0.14	)
Foreign offices (4)		1.45			1.50			1.46			1.44			1.63			(0.05	)			(0.18	)
Total deposits — interest-bearing		1.55			1.60			1.59			1.65			1.81			(0.05	)			(0.26	)
Federal funds purchased and securities sold
under repurchase agreements		1.36			1.26			1.22			1.21			1.44			0.10				(0.08	)
Other short-term borrowings (1)		1.52			1.55			3.01			2.87			2.69			(0.03	)			(1.17	)
Long-term debt (5)		3.50			3.45			3.98			3.96			4.21			0.05				(0.71	)
Total interest-bearing liabilities		1.93			1.94			2.18			2.20			2.39			(0.01	)			(0.46	)

Interest income/earning assets		4.86			4.83			5.22			5.21			5.31			0.03				(0.45	)
Interest expense/earning assets		1.56			1.58			1.72			1.76			1.94			(0.02	)			(0.38	)

Net interest margin		3.30	%		3.25	%		3.50	%		3.45	%		3.37	%		0.05	%			(0.07	)%

NOTES:

(1)		Impacted by the adoption of FIN 46.

(2)		Nonperforming loans are included in average balances used to determine average rate.

(3)		On a consolidated basis, demand deposits are routinely swept into money market deposits. On a line of business basis, balances are presented without the impact of the sweeps. Certain prior data has been adjusted to conform with current period presentation.

(4)		Includes international banking facility deposit balances in domestic offices and balances of Edge Act and overseas offices.

(5)		Includes trust preferred capital securities.

(6)		Includes tax-equivalent adjustments based on federal income tax rate of 35%.


Average Balance Sheets, Yields & Rates — YTD — Reported Basis


	Six Months Ended June 30
	2004								2003
	Average			Income/		Yield/			Average			Income/		Yield/
	Balance			Expense		Rate			Balance			Expense		Rate
AVERAGE BALANCE SHEET ($ millions)
Assets
Short-term investments	$	13,001		$	79		1.22	%	$	17,723		$	104		1.18	%
Trading assets (1)		8,212			157		3.84			9,318			161		3.48
Investment securities (1)
U.S. government and federal agency		35,237			928		5.30			31,206			616		3.98
States and political subdivisions		1,142			38		6.69			1,203			41		6.87
Other		46,856			1,122		4.82			33,489			925		5.57

Total investment securities		83,235			2,088		5.04			65,898			1,582		4.84
Interests in purchased receivables		30,063			183		1.22			—			—		—
Loans (2)		137,792			4,053		5.92			145,522			4,546		6.30

Total earning assets		272,303		$	6,560		4.84			238,461		$	6,393		5.41

Allowance for loan losses		(3,352	)							(3,979	)
Other assets — nonearning		42,417								40,179

Total assets	$	311,368							$	274,661


Liabilities and Stockholders’ Equity
Deposits — interest-bearing (3)
Savings	$	10,972		$	26		0.48	%	$	9,963		$	28		0.57	%
Money market		71,054			358		1.01			60,409			345		1.15
Time		22,034			437		3.99			28,246			580		4.14
Foreign offices (4)		15,636			115		1.48			15,149			126		1.68

Total deposits — interest-bearing		119,696			936		1.57			113,767			1,079		1.91
Federal funds purchased and securities sold
under repurchase agreements		14,062			91		1.30			18,634			135		1.46
Other short-term borrowings		41,685			318		1.53			12,925			177		2.76
Long-term debt (5)		45,130			780		3.48			44,823			972		4.37

Total interest-bearing liabilities		220,573		$	2,125		1.94			190,149		$	2,363		2.51

Noninterest-bearing deposits		44,257								46,815
Other liabilities		22,449								15,156
Common stockholders’ equity		24,089								22,541

Total liabilities and equity	$	311,368							$	274,661

Interest income/earning assets				$	6,560		4.84					$	6,393		5.41
Interest expense/earning assets					2,125		1.56						2,363		2.00

Net interest margin				$	4,435		3.28	%				$	4,030		3.41	%

NOTES:

(1)		Includes tax-equivalent adjustments based on federal income tax rate of 35%.

(2)		Nonperforming loans are included in average balances used to determine average rate.

(3)		On a consolidated basis, demand deposits are routinely swept overnight into money market deposits. On a line of business basis, balances are presented without the impact of the sweeps. Certain prior period data has been adjusted to conform with current period presentation.

(4)		Includes international banking facility deposit balances in domestic offices and balances of Edge Act and overseas offices.

(5)		Includes trust preferred capital securities.


Average Balance Sheets, Yields & Rates — Managed Basis


	2004						2003									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04						2Q03
																Amt			%			Amt			%
AVERAGE BALANCE SHEET ($ millions)
Assets
Short-term investments	$	11,994		$	14,008		$	16,316		$	17,029		$	17,775		$	(2,014	)		(14	)%	$	(5,781	)		(33	)%
Trading assets		6,236			10,187			12,139			11,669			10,211			(3,951	)		(39	)		(3,975	)		(39	)
Investment securities U.S. government and federal agency		32,991			37,483			35,817			36,937			33,356			(4,492	)		(12	)		(365	)		(1	)
States and political subdivisions		972			1,311			1,300			1,278			1,237			(339	)		(26	)		(265	)		(21	)
Other		19,921			19,758			15,604			12,268			9,420			163			1			10,501			N/M

Total investment securities		53,884			58,552			52,721			50,483			44,013			(4,668	)		(8	)		9,871			22
Interests in purchased receivables (1)		28,982			31,145			358			—			—			(2,163	)		(7	)		28,982			N/M
Managed loans (2)		200,069			200,933			200,815			202,020			203,580			(864	)		—			(3,511	)		(2	)

Total managed earning assets		301,165			314,825			282,349			281,201			275,579			(13,660	)		(4	)		25,586			9
Allowance for loan losses		(3,258	)		(3,446	)		(3,676	)		(4,012	)		(3,999	)		188			5			741			19
Other assets — nonearning		41,193			41,843			40,384			42,516			40,893			(650	)		(2	)		300			1

Managed total assets	$	339,100		$	353,222		$	319,057		$	319,705		$	312,473		$	(14,122	)		(4	)%	$	26,627			9	%


Liabilities and Stockholders’ Equity
Deposits — interest-bearing (3) Savings	$	11,211		$	10,732		$	10,483		$	10,453		$	10,260		$	479			4	%	$	951			9	%
Money market		72,689			69,419			66,925			64,728			62,881			3,270			5			9,808			16
Time		21,602			22,467			23,471			25,014			27,104			(865	)		(4	)		(5,502	)		(20	)
Foreign offices (4)		14,947			16,328			16,085			16,244			15,985			(1,381	)		(8	)		(1,038	)		(6	)

Total deposits — interest-bearing		120,449			118,946			116,964			116,439			116,230			1,503			1			4,219			4
Federal funds purchased and securities sold under repurchase agreements		11,209			16,914			21,491			23,003			20,383			(5,705	)		(34	)		(9,174	)		(45	)
Managed other short-term borrowings (1)		72,873			80,083			48,246			47,245			49,077			(7,210	)		(9	)		23,796			48
Long-term debt (5)		43,975			46,285			44,313			45,248			45,014			(2,310	)		(5	)		(1,039	)		(2	)

Total managed interest-bearing liabilities		248,506			262,228			231,014			231,935			230,704			(13,722	)		(5	)		17,802			8
Noninterest-bearing deposits		44,461			44,051			43,156			45,995			44,077			410			1			384			1
Other liabilities		22,122			22,776			21,770			19,563			15,230			(654	)		(3	)		6,892			45
Common stockholders’ equity		24,011			24,167			23,117			22,212			22,462			(156	)		(1	)		1,549			7

Total managed liabilities and equity	$	339,100		$	353,222		$	319,057		$	319,705		$	312,473		$	(14,122	)		(4	)%	$	26,627			9	%


Average Balance Sheets, Yields & Rates — Managed Basis


	2004				2003						Change from
	2nd Qtr		1st Qtr		4th Qtr		3rd Qtr		2nd Qtr		1Q04						2Q03
											Amt			%			Amt			%
INCOME / EXPENSE ($ millions)
Assets
Short-term investments	$	39	$	40	$	43	$	41	$	50	$	(1	)		(3	)%	$	(11	)		(22	)%
Trading assets (6)		62		95		107		100		87		(33	)		(35	)		(25	)		(29	)
Investment securities (6)
U.S. government and federal agency		473		455		393		366		336		18			4			137			41
States and political subdivisions		17		21		22		21		21		(4	)		(19	)		(4	)		(19	)
Other		100		134		161		115		80		(34	)		(25	)		20			25

Total investment securities		590		610		576		502		437		(20	)		(3	)		153			35
Interests in purchased receivables (1)		90		93		—		—		—		(3	)		(3	)		90			N/M
Managed loans (2) (6)		3,863		3,932		3,933		3,920		3,916		(69	)		(2	)		(53	)		(1	)

Total managed earning assets	$	4,644	$	4,770	$	4,659	$	4,563	$	4,490	$	(126	)		(3	)%	$	154			3	%

Liabilities
Deposits — interest-bearing (3)
Savings	$	13	$	13	$	13	$	19	$	14	$	—			0	%	$	(1	)		(7	)%
Money market		187		171		166		154		171		16			9			16			9
Time		210		227		231		251		274		(17	)		(7	)		(64	)		(23	)
Foreign offices (4)		54		61		59		59		65		(7	)		(11	)		(11	)		(17	)

Total deposits — interest-bearing		464		472		469		483		524		(8	)		(2	)		(60	)		(11	)
Federal funds purchased and securities sold under repurchase agreements		38		53		66		70		73		(15	)		(28	)		(35	)		(48	)
Managed other short-term borrowings (1)		297		325		250		240		255		(28	)		(9	)		42			16
Long-term debt (5)		383		397		445		452		473		(14	)		(4	)		(90	)		(19	)

Total managed interest-bearing liabilities	$	1,182	$	1,247	$	1,230	$	1,245	$	1,325	$	(65	)		(5	)%	$	(143	)		(11	)%

Managed interest income	$	4,644	$	4,770	$	4,659	$	4,563	$	4,490	$	(126	)		(3	)%	$	154			3	%
Managed interest expense		1,182		1,247		1,230		1,245		1,325		(65	)		(5	)		(143	)		(11	)

Managed net interest income	$	3,462	$	3,523	$	3,429	$	3,318	$	3,165	$	(61	)		(2	)%	$	297			9	%


Average Balance Sheets, Yields & Rates — Managed Basis


	2004						2003									Change from
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			1Q04				2Q03
																Amt			%	Amt			%
YIELDS AND RATES
Assets
Short-term investments		1.31	%		1.15	%		1.05	%		0.96	%		1.13	%		0.16	%			0.18	%
Trading assets (6)		4.00			3.75			3.50			3.40			3.42			0.25				0.58
Investment securities (6)
U.S. government and federal agency		5.77			4.88			4.35			3.93			4.04			0.89				1.73
States and political subdivisions		7.03			6.44			6.71			6.52			6.81			0.59				0.22
Other		2.02			2.73			4.09			3.72			3.41			(0.71	)			(1.39	)
Total investment securities		4.40			4.19			4.33			3.95			3.98			0.21				0.42
Interests in purchased receivables (1)		1.25			1.20			—			—			—			0.05				1.25
Managed loans (2)		7.77			7.87			7.77			7.70			7.72			(0.10	)			0.05
Total managed earning assets		6.20			6.09			6.55			6.44			6.54			0.11				(0.34	)

Liabilities
Deposits — interest-bearing (3)
Savings		0.47			0.49			0.49			0.72			0.55			(0.02	)			(0.08	)
Money market		1.03			0.99			0.98			0.94			1.09			0.04				(0.06	)
Time		3.91			4.06			3.90			3.98			4.05			(0.15	)			(0.14	)
Foreign offices (4)		1.45			1.50			1.46			1.44			1.63			(0.05	)			(0.18	)
Total deposits — interest-bearing		1.55			1.60			1.59			1.65			1.81			(0.05	)			(0.26	)
Federal funds purchased and securities sold
under repurchase agreements		1.36			1.26			1.22			1.21			1.44			0.10				(0.08	)
Managed other short-term borrowings (1)		1.64			1.63			2.06			2.02			2.08			0.01				(0.44	)
Long-term debt (5)		3.50			3.45			3.98			3.96			4.21			0.05				(0.71	)
Total managed interest-bearing liabilities		1.91			1.91			2.11			2.13			2.30			—				(0.39	)

Managed interest income/managed earning assets		6.20			6.09			6.55			6.44			6.54			0.11				(0.34	)
Managed interest expense/managed earning assets		1.58			1.59			1.73			1.76			1.93			(0.01	)			(0.35	)

Managed net interest margin		4.62	%		4.50	%		4.82	%		4.68	%		4.61	%		0.12	%			0.01	%

NOTES:

(1)		Impacted by the adoption of FIN 46.

(2)		Nonperforming loans are included in average balances used to determine average rate.

(3)		On a consolidated basis, demand deposits are routinely swept into money market deposits. On a line of business basis, balances are presented without the impact of the sweeps. Certain prior data has been adjusted to conform with current period presentation.

(4)		Includes international banking facility deposit balances in domestic offices and balances of Edge Act and overseas offices.

(5)		Includes trust preferred capital securities.

(6)		Includes tax-equivalent adjustments based on federal income tax rate of 35%.


Average Balance Sheets, Yields & Rates — YTD — Managed Basis


	Six Months Ended June 30
	2004								2003
	Average			Income/		Yield/			Average			Income/		Yield/
	Balance			Expense		Rate			Balance			Expense		Rate
AVERAGE BALANCE SHEET ($ millions)
Assets
Short-term investments	$	13,001		$	79		1.22	%	$	17,723		$	104		1.18	%
Trading assets (1)		8,212			157		3.84			9,318			161		3.48
Investment securities (1)
U.S. government and federal agency		35,237			928		5.30			31,206			616		3.98
States and political subdivisions		1,142			38		6.69			1,203			41		6.87
Other		19,839			234		2.37			9,190			156		3.42

Total investment securities		56,218			1,200		4.29			41,599			813		3.94
Interests in purchased receivables		30,063			183		1.22			—			—		—
Loans (1) (2)		200,501			7,795		7.82			205,499			7,970		7.82

Total earning assets		307,995		$	9,414		6.15			274,139		$	9,048		6.66

Allowance for loan losses		(3,352	)							(3,979	)
Other assets — nonearning		41,518								39,617

Total assets	$	346,161							$	309,777


Liabilities and Stockholders’ Equity
Deposits — interest-bearing (3)
Savings	$	10,972		$	26		0.48	%	$	9,963		$	28		0.57	%
Money market		71,054			358		1.01			60,409			345		1.15
Time		22,034			437		3.99			28,246			580		4.14
Foreign offices (4)		15,636			115		1.48			15,149			126		1.68

Total deposits — interest-bearing		119,696			936		1.57			113,767			1,079		1.91
Federal funds purchased and securities sold under repurchase agreements		14,062			91		1.30			18,634			135		1.46
Other short-term borrowings		76,478			622		1.64			48,041			508		2.13
Long-term debt (5)		45,130			780		3.48			44,823			972		4.37

Total interest-bearing liabilities		255,366		$	2,429		1.91			225,265		$	2,694		2.41

Noninterest-bearing deposits		44,257								46,815
Other liabilities		22,449								15,156
Common stockholders’ equity		24,089								22,541

Total liabilities and equity	$	346,161							$	309,777

Interest income/earning assets				$	9,414		6.15					$	9,048		6.66
Interest expense/earning assets					2,429		1.59						2,694		1.99

Net interest margin				$	6,985		4.56	%				$	6,354		4.67	%

NOTES:

(1)		Includes tax-equivalent adjustments based on federal income tax rate of 35%.

(2)		Nonperforming loans are included in average balances used to determine average rate.

(3)		On a consolidated basis, demand deposits are routinely swept overnight into money market deposits. On a line of business basis, balances are presented without the impact of the sweeps. Certain prior period data has been adjusted to conform with current period presentation.

(4)		Includes international banking facility deposit balances in domestic offices and balances of Edge Act and overseas offices.

(5)		Includes trust preferred capital securities.


Definitions of Key Terms


GLOSSARY FOR SELECTED NONINTEREST INCOME CATEGORIES

Banking fees and commissions		Insurance fees, documentary fees, commitment fees, mutual fund commissions, leasing fees, safe deposit fees, official checks fees, ATM interchange and miscellaneous other fee revenue.

Credit card revenue		Related to Card Services, consumer and small business credit card fees; related to Retail, debit card fees; and related to Commercial, Commercial card fees.

Fiduciary and investment management fees		Asset management fees, personal trust fees and advisory fees.

Fully Taxable Equivalent (“FTE”)		Net interest income and tax expense in the income statement is grossed up for tax-exempt securities in order to present results on a basis comparable to taxable securities.

Investment security gains (losses)		Venture capital and investment securities (losses).

Other income (loss)		Net securitization gains (losses), net gains (losses) on Corporation transactions and/or asset sales/dispositions.

Service charges on deposits		Deficient balance fees, non-sufficient funds/overdraft fees and other service related fees.

Trading		Realized and unrealized mark-to-market changes from trading assets, derivative financial instruments and foreign exchange products.

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