Refi Your Home Loan

Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC) reported a net loss of $26.2 billion in the fourth quarter of 2008, a decline of $27.8 billion from the $575 million that the industry earned in the fourth quarter of 2007 and the first quarterly loss since 1990. Rising loan-loss provisions, losses from trading activities and goodwill write-downs all contributed to the quarterly net loss as banks continue to repair their balance sheets in order to return to profitability in future periods.

More than two-thirds of all insured institutions were profitable in the fourth quarter, but their earnings were outweighed by large losses at a number of big banks. Total deposits increased by $307.9 billion (3.5 percent), the largest percentage increase in 10 years, with deposits in domestic offices registering a $274.1 billion (3.8 percent) increase. And at year-end, nearly 98 percent of all insured institutions, representing almost 99 percent of industry assets, met or exceeded the highest regulatory capital standards.

"Public confidence in the banking system and deposit insurance is demonstrated by the increase in domestic deposits during the fourth quarter," FDIC Chairman Sheila Bair said. "Clearly, people see an FDIC-insured account as a safe haven for their money in difficult times."

For all of 2008, insured institutions earned $16.1 billion, a decline of 83.9 percent from 2007 and the lowest annual total since 1990. Twelve FDIC-insured institutions failed during the fourth quarter and one banking organization received assistance. During the year, a total of 25 insured institutions failed. The FDIC’s "Problem List" grew during the quarter from 171 to 252 institutions, the largest number since the middle of 1995. Total assets of problem institutions increased from $115.6 billion to $159 billion.

In its latest release, the FDIC cited deteriorating asset quality as the primary reason for the drop in industry profits. Loan-loss provisions totaled $69.3 billion in the fourth quarter, a 115.7 percent increase from the same quarter in 2007. In addition, the industry reported $15.8 billion in expenses for write-downs of goodwill (which do not affect regulatory capital levels), $9.2 billion in trading losses and $8.1 billion in realized losses on securities and other assets.

The FDIC provided data on industry use of the Temporary Liquidity Guarantee Program (TLGP), which was established in mid-October to address credit market disruptions and improve access to liquidity for insured financial institutions and their holding companies. The TLGP, which is entirely funded by industry fees that totaled $3.4 billion as of year-end, has two components. One provides a 100 percent guarantee of all deposits in noninterest-bearing transaction accounts, such as business payroll accounts, at participating institutions. The other provides a guarantee to newly issued senior unsecured debt at participating institutions. At the end of December, more than half a million deposit accounts received over $680 billion in additional FDIC coverage through the transaction account guarantee, and $224 billion in FDIC-guaranteed debt was outstanding.

"The debt guarantee program has been effective in reducing borrowing spreads and improving access to short- and intermediate-term funding for banking organizations," Chairman Bair noted. "In recent weeks, banks have been able to issue debt without guarantees and other corporate borrowers have issued debt more frequently and in larger amounts. These are positive signs."

Financial results for the fourth quarter and full year are contained in the FDIC’s latest Quarterly Banking Profile, which was released today. Among the major findings:

Provisions for loan losses continued to weigh on earnings. Rising levels of charge-offs and noncurrent loans have required insured institutions to step up their efforts to increase their reserves for loan losses. The $69.3 billion in provisions that the industry added to reserves in the fourth quarter represented over half (50.2 percent) of its net operating revenue (net interest income plus total noninterest income), the highest proportion in any quarter in more than 21 years.

The rising trend in troubled loans persisted in the fourth quarter. Insured institutions charged off $37.9 billion of troubled loans, more than twice the $16.3 billion that was charged-off in the fourth quarter of 2007. The annualized net charge-off rate of 1.91 percent equaled the previous quarterly high set in the fourth quarter of 1989. The amount of loans and leases that were noncurrent (90 days or more past due or in nonaccrual status) increased by $44.1 billion (23.7 percent) during the fourth quarter. At the end of 2008, a total of 2.93 percent of all loans and leases were noncurrent, the highest level for the industry since the end of 1992.

The FDIC’s Deposit Insurance Fund reserve ratio fell. A higher level of losses for actual and anticipated failures caused the insurance fund balance to decline during the fourth quarter by $16 billion, to $19 billion (unaudited) at December 31. In addition to having $19 billion available in the fund, $22 billion has been set aside for estimated losses on failures anticipated in 2009. The fund reserve ratio declined from 0.76 percent at September 30 to 0.40 percent at year end. The FDIC Board will meet tomorrow to set deposit insurance assessment rates beginning in the second quarter of 2009 and to consider adopting enhancements to the risk-based premium system.

The complete Quarterly Banking Profile is available at http://www2.fdic.gov/qbp/index.asp  on the FDIC Web site.

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Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation’s banking system. The FDIC insures deposits at the nation’s 8,305 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.

Innovative "First Watch Intelligence" Protects Chase Customers from Identity Theft, Credit Card Fraud
 

Wilmington, Del.- Building on its commitment to protect consumers, Chase Card Services, the credit card division of JP Morgan Chase & Co. [NYSE: JPM], announced that it recently received a patent from the United States Patent Office for its breakthrough fraud prevention technology, First Watch Intelligence.

Chase Card Services received the patent US 7,480,631 on Jan. 20, 2009. Fraud cases have increased dramatically in recent years, and Chase employees have been on the front line monitoring more than 40 factors that indicate potential fraud. First Watch Intelligence creates an automated system for evaluating those fraud factors, which in turn enables Chase analysts to detect fraud more efficiently and effectively.

"Fraud protection is a top priority for Chase and our card members. We continually strive to identify new ways to enhance our efforts in this critical area," said Tim Webb, senior manager, fraud operations, Chase Card Services, and co-inventor of First Watch Intelligence. "In developing this technology, we recognized our fraud analysts needed a tool that could quickly analyze fraud indicators more effectively and deliver even better customer protection. First Watch Intelligence successfully provided us with both."

The Identity Theft Resource Center, a non-profit organization that tracks identity fraud, predicts credit card fraud will likely increase in 2009 given the current economy, demonstrating a real need for increased consumer protection. Chase’s new innovation puts the company at the forefront of fraud protection technology, adding another layer of security for Chase cardholders.

"Chase has been long recognized for its innovative solutions and has one of the larger patent portfolios in the financial services industry," said Bill Mann, Ph.D. and executive director, patent and business development, Chase Card Services. "As the number of fraud cases increases in this time of economic uncertainty, the timing is ripe for this innovative patent, which is already being used to protect our customers."

"Because the application is user-friendly and highly successful, employee satisfaction is at an all-time high," said Mike Cunningham, senior director, fraud operations, Chase Card Services. "Securing a patent for this technology demonstrates our continued commitment to protecting customers from fraud, further strengthening the foundation of our business for our employees and shareholders."

About JPMorgan Chase & Co.
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.2 trillion and operations in more than 60 countries, and the company has issued about 168 million credit cards in the United States and Canada. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers and businesses in the United States and many of the world’s most prominent corporate, institutional and government clients under its J.P. Morgan, Chase, and WaMu brands. Information about the firm is available at www.jpmorganchase.com .

Two New Sessions include Chief Economist Bruce Kasman’s "Economic Outlook for Treasurers" and Payless ShoeSource’s Successful Order-to-Pay Initiative

NEW YORK – J.P. Morgan Treasury Services has launched a new podcast series designed to help businesses better navigate the current economic environment. The first new podcast features leading retailer Payless ShoeSource describing how the company reduced accounts payable operating costs by nearly 80 percent and eliminated paper invoices after implementing J.P. Morgan’s Order-to-Pay service. Order-to-Pay enables customers to automate electronic purchase order delivery, invoicing and payments across a shared supplier network of more than 70,000 suppliers.

In the second new podcast, J.P. Morgan’s chief economist Bruce Kasman speaks on the "2009 Economic Outlook for Treasurers" and provides insight into the grips and depth of the economic global downturn, the path to recovery and a scenario for growth.

Bruce Kasman is managing director and head of Economic Research for J.P. Morgan. He is also the editor of Global Data Watch, a J.P. Morgan publication providing economic forecasts covering 35 countries each week. In his session, Kasman states: "I think that the good news from our point of view is that we do see a path towards the start of recovery in the second half of the year. I think that part of that path is coming from very aggressive actions on policy makers across the world to try to heal the crisis mode in funding markets and try to provide opportunities for credit to flow. There is some beneficial improvement we have already been seeing on that front. We think there are more initiatives to come."

J.P. Morgan’s free podcast series, available at www.jpmorgan.com/podcasts , was launched in 2006 – the first of its kind in the treasury management industry. J.P. Morgan’s online archive now includes more than 30 recordings and over 500 minutes of treasury insight and business advice. Featuring leading financial experts and well-known corporate practitioners, the podcasts cover the latest regulations, trends and issues facing the treasury services industry, with topics ranging from consumer fraud to payment solutions. To date, more than more than 27,000 listeners have accessed J.P. Morgan’s podcast series.

Additional podcasts planned for 2009 include practical advice and case study presentations on how treasury products are helping businesses cut costs, save time and reduce risk. To receive monthly e-mail notifications when new podcasts are posted, visit www.jpmorgan.com/visit/podcastsubscription .

About J.P. Morgan Treasury Services
The Treasury Services business of J.P. Morgan is a top-ranked, full-service provider of innovative payment, collection, liquidity and investment management, trade finance, commercial card and information solutions to corporations, financial services institutions, middle market companies, small businesses, governments and municipalities worldwide. With more than 50,000 clients and a presence in 39 countries, J.P. Morgan Treasury Services is one of the world’s largest providers of treasury management services and a division of JPMorgan Chase Bank, N.A., member FDIC. More information can be found at www.jpmorgan.com/ts .

About JPMorgan Chase & Co.
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.2 trillion and operations in more than 60 countries. The firm is a leader in investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset management, and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world’s most prominent corporate, institutional and government clients under its J.P. Morgan, Chase, and WaMu brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com .

Jamie Dimon, chief executive officer of JPMorgan Chase & Co. (NYSE: JPM), RELEASED THE FOLLOWING STATEMENT TODAY ABOUT THE OBAMA ADMINISTRATION’S PLAN TO HELP STRUGGLING HOMEOWNERS:

NEW YORK, February 18, 2009 — We believe that the plan announced today by President Obama is good and strong, comprehensive and thoughtful. I think it will be successful in modifying mortgages in a way that’s good for homeowners.

We applaud:

• The focus on making monthly payments affordable for borrowers
  

• The creation of uniform national standards for mortgage modification to provide consistent and fair treatment of customers across the industry.  That standard will include the common-sense application of full income and debt verification
  

• The partnership with government to reduce interest rates – and payments — for borrowers
  

• The expanded ability of borrowers to take advantage of today’s lower rates through refinancing
  

• The inclusion of financially distressed borrowers even before they are delinquent
  

• The use of counseling for borrowers with the highest debt ratios
  

We look forward to working with the administration, Congress, the agencies and other interested parties in implementing these initiatives to help families – and the U.S. economy.

Bank of America today said it applauds the Obama administration’s Homeowner Affordability and Stability Plan focused on assisting homeowners with their mortgage payments through refinancing and a loan modification program.

“We support the administration’s focus on affordability in the loan modification and refinance processes in order to achieve long-term mortgage sustainability for homeowners,” said Barbara Desoer, president of Bank of America Mortgage, Home Equity and Insurance Services. “Bank of America is committed to helping our customers sustain homeownership.”

Bank of America last week announced a moratorium on foreclosure sales. Desoer said the moratorium will be extended until eligibility details for the Homeowner Affordability and Stability Plan are released. Bank of America’s foreclosure sales moratorium includes first mortgage loans owned and serviced by Bank of America, Countrywide and subsidiaries of Merrill Lynch, as well as those owned by investors who have agreed to the terms of the moratorium.

“We want to ensure that any borrower who has sufficient income and the desire to sustain homeownership has the ability to do so using any and all tools we have available,” she said.

“The administration’s focus is consistent with the approach we have successfully been using with our customers, which has led to more than 230,000 loan modifications for our customers in 2008, and another 39,000 customers in January alone,” said Desoer. “We look forward to continuing to work with the Obama administration in the development of detailed guidelines for the modification and refinance plans to ensure success of the Homeowner Affordability and Stability Plan.”

In 2008, Bank of America committed to offer over the next three years loan modifications to as many as 630,000 customers to help them stay in their homes, representing more than $100 billion in mortgage financing. More than 5,900 associates are focused on home retention efforts on behalf of Bank of America and Countrywide customers.

Bank of America

Bank of America is one of the world’s largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company provides unmatched convenience in the United States, serving more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,700 ATMs and award-winning online banking with nearly 29 million active users. Following the acquisition of Merrill Lynch on January 1, 2009, Bank of America is among the world’s leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to more than 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients in more than 150 countries. Bank of America Corporation stock is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.

www.bankofamerica.com

WASHINGTON – Hundreds of thousands of homeless individuals and families will find a stable home and be offered critically needed services as a result of nearly $1.6 billion in homeless assistance announced today by U.S. Department of Housing and Urban Development Secretary Shaun Donovan. This week, President Obama also signed the American Recovery and Reinvestment Act of 2009 into law, which will provide an additional $1.5 billion in funding for homeless prevention.