##### 



Exhibit 13 SELECTED FINANCIAL INFORMATION   For the Year Ended December 31,
    
    
    2003
    (7)
    
    
    2002
    (7)
    
    
    2001
    
    
    
    2000
    
    
    
    1999(In millions, except per share data, ratios, and headcount)Income Statement Data:Total revenue, net of interest expense
    
    $
    16,212
    
    
    $
    16,735
    
    
    $
    15,748
    
    
    $
    13,810
    
    
    $
    17,602Net interest income
    
    
    8,149
    
    
    
    8,555
    
    
    
    8,605
    
    
    
    8,806
    
    
    
    8,993Net interest
incomefully taxable-equivalent (FTE) basis (1)
    
    
    8,311
    
    
    
    8,700
    
    
    
    8,736
    
    
    
    8,944
    
    
    
    9,112Noninterest income
    
    
    8,063
    
    
    
    8,180
    
    
    
    7,143
    
    
    
    5,004
    
    
    
    8,609Provision for credit losses
    
    
    2,045
    
    
    
    2,487
    
    
    
    2,510
    
    
    
    3,398
    
    
    
    1,249Noninterest expense
    
    
    9,777
    
    
    
    9,546
    
    
    
    9,490
    
    
    
    11,531
    
    
    
    11,421Income
(loss) from continuing operations before cumulative effect of change in
accounting principle, net of taxes
    
    
    3,125
    
    
    
    3,256
    
    
    
    2,649
    
    
    
    (536
    )
    
    
    3,453Income from discontinued operations, net of taxes
    
    
    410
    
    
    
    39
    
    
    
    33
    
    
    
    25
    
    
    
    26Net income (loss)
    
    
    3,535
    
    
    
    3,295
    
    
    
    2,638
    
    
    
    (511
    )
    
    
    3,479Per Common Share Data:Basic earnings per share:Income (loss) from continuing operations, net of taxes
    
    $
    2.78
    
    
    $
    2.80
    
    
    $
    2.25
    
    
    $
    (0.47
    )
    
    $
    2.95Income from discontinued operations, net of taxes
    
    
    0.36
    
    
    
    0.03
    
    
    
    0.03
    
    
    
    0.02
    
    
    
    0.02Cumulative effect of change in accounting principle, net of taxes
    
    
    
    
    
    
    
    
    
    
    (0.03
    )
    
    
    
    
    
    
    Net income (loss)
    
    
    3.14
    
    
    
    2.83
    
    
    
    2.25
    
    
    
    (0.45
    )
    
    
    2.97Diluted earnings per share: (2)Income (loss) from continuing operations, net of taxes
    
    $
    2.75
    
    
    $
    2.77
    
    
    $
    2.25
    
    
    $
    (0.47
    )
    
    $
    2.93Income from discontinued operations, net of taxes
    
    
    0.36
    
    
    
    0.03
    
    
    
    0.03
    
    
    
    0.02
    
    
    
    0.02Cumulative effect of change in accounting principle, net of taxes
    
    
    
    
    
    
    
    
    
    
    (0.04
    )
    
    
    
    
    
    
    Net income (loss)
    
    
    3.11
    
    
    
    2.80
    
    
    
    2.24
    
    
    
    (0.45
    )
    
    
    2.95Cash dividends declared
    
    
    0.92
    
    
    
    0.84
    
    
    
    0.84
    
    
    
    1.26
    
    
    
    1.68Book value
    
    
    20.92
    
    
    
    19.28
    
    
    
    17.33
    
    
    
    15.90
    
    
    
    17.34Balance Sheet Data  Ending Balances:Loans
    
    $
    138,147
    
    
    $
    148,125
    
    
    $
    156,733
    
    
    $
    174,251
    
    
    $
    163,877Total assets
    
    
    326,563
    
    
    
    277,985
    
    
    
    269,507
    
    
    
    269,774
    
    
    
    269,767Deposits
    
    
    164,621
    
    
    
    170,008
    
    
    
    167,530
    
    
    
    167,077
    
    
    
    162,278Long-term debt (3)
    
    
    46,764
    
    
    
    43,234
    
    
    
    43,418
    
    
    
    40,911
    
    
    
    35,435Common stockholders equity
    
    
    23,419
    
    
    
    22,440
    
    
    
    20,226
    
    
    
    18,445
    
    
    
    19,900Total stockholders equity
    
    
    23,419
    
    
    
    22,440
    
    
    
    20,226
    
    
    
    18,635
    
    
    
    20,090Credit Quality Ratios:Net charge-offs to average loans (4)
    
    
    1.82
    %
    
    
    1.63
    %
    
    
    1.37
    %
    
    
    0.81
    %
    
    
    0.77
    %Allowance for loan losses to period-end loans
    
    
    2.75
    
    
    
    2.78
    
    
    
    2.61
    
    
    
    2.14
    
    
    
    1.21Allowance for credit losses to period-end loans (5)
    
    
    3.14
    
    
    
    3.20
    
    
    
    2.97
    
    
    
    2.42
    
    
    
    1.42Nonperforming assets to related assets (6)
    
    
    1.73
    
    
    
    2.38
    
    
    
    2.35
    
    
    
    1.48
    
    
    
    1.02Financial Performance:Return (loss) on average assets
    
    
    1.27
    %
    
    
    1.25
    %
    
    
    0.98
    %
    
    
    (0.19
    )%
    
    
    1.36
    %Return (loss) on average common equity
    
    
    15.6
    
    
    
    15.2
    
    
    
    13.4
    
    
    
    (2.7
    )
    
    
    17.1Net interest margin
    
    
    3.44
    
    
    
    3.76
    
    
    
    3.67
    
    
    
    3.71
    
    
    
    4.07Efficiency ratio
    
    
    59.7
    
    
    
    56.6
    
    
    
    59.8
    
    
    
    82.7
    
    
    
    64.4Capital Ratios:Risk-based capital:Tier 1
    
    
    10.0
    %
    
    
    9.9
    %
    
    
    8.6
    %
    
    
    7.3
    %
    
    
    7.7
    %Total
    
    
    13.7
    
    
    
    13.7
    
    
    
    12.2
    
    
    
    10.8
    
    
    
    10.7Leverage
    
    
    8.8
    
    
    
    8.9
    
    
    
    8.2
    
    
    
    7.3
    
    
    
    7.7Common Stock Data:Average shares outstanding:Basic
    
    
    1,126
    
    
    
    1,162
    
    
    
    1,166
    
    
    
    1,154
    
    
    
    1,168Diluted (2)
    
    
    1,135
    
    
    
    1,172
    
    
    
    1,174
    
    
    
    1,154
    
    
    
    1,178Stock price, year-end
    
    $
    45.59
    
    
    $
    36.55
    
    
    $
    39.05
    
    
    $
    36.63
    
    
    $
    32.00Headcount(8)
    
    
    71,196
    
    
    
    73,685
    
    
    
    73,519
    
    
    
    80,778
    
    
    
    87,735
 (1)
    
    Net interest income-FTE includes taxable equivalent adjustments of $162
million, $145 million, $131 million, $138 million and $121 million for the
years ended December 31, 2003, 2002, 2001, 2000 and 1999, respectively. Net interest
income is presented rather than gross interest income and gross interest
expense because the Corporation relies primarily on net interest revenue to
assess performance.(2)
    
    Common equivalent shares and related income were excluded from the
computation of diluted loss per share for the year ended December 31, 2000 as
the effect was antidilutive.(3)
    
    Includes trust preferred capital securities.(4)
    
    Includes net charge-offs related to held for sale credit card loans of $3
million for the year ended December 31, 2003, which are recorded in noninterest
income.(5)
    
    The allowance for credit losses includes the allowance for loan losses of
$3,472 million, $3,923 million, $3,975 million, $3,636 million and $1,943
million and reserve for unfunded lending commitments and standby letters of
credit which is included in other liabilities of $490 million, $602 million,
$553 million, $474 million and $342 million at December 31, 2003, 2002, 2001,
2000 and 1999, respectively.(6)
    
    Related assets consist of loans outstanding, including loans held for sale
and other real estate owned.(7)
    
    Results include the effects of the
consolidation of Paymentech, Inc. and Anexsys, LLC.(8)
    
    Beginning in 2001, employees on long-term disability and employees of
unconsolidated subsidiaries are excluded. Prior period data have not been
reclassified for this change. 26 BANK ONE 2003 ANNUAL REPORT




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##### 



DESCRIPTION OF BUSINESS 
  
    
    A leader in retail and small business banking
    
    A premier provider of lending, treasury management, and capital markets products to commercial customers
    
    The third largest credit card issuer in the United States and the largest Visa® issuer in the world
    
    A leading investment management company and writer of life insurance and annuity products 
 Basis of Presentation  FORWARD-LOOKING STATEMENTS
 OVERVIEW OF MANAGEMENTS DISCUSSION AND ANALYSIS
   BANK ONE 2003 ANNUAL REPORT 27




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Subsequent Events   APPLICATION OF CRITICAL ACCOUNTING POLICIES 
  Allowance for Credit Losses
   28 BANK ONE 2003 ANNUAL REPORT




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##### 



Securitizations
 Valuation of Certain Financial Instruments    Insurance Policy and Claims Reserves
   BANK ONE 2003 ANNUAL REPORT 29




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##### 



Stock Option Compensation   Pension
 Financial Accounting Standards Board Interpretation No. 46   SUMMARY OF CONSOLIDATED RESULTS
   30 BANK ONE 2003 ANNUAL REPORT




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##### 



Net Income   Net Interest Income  Percent ChangeFor the Year Ended December 31,
    
    
    2003
    (2)
    
    
    2002
    (2)
    
    
    2001
    
    
    
    2003-2002
    
    
    
    2002-2001(Dollars in millions)Net interest income-FTE basis (1)
    
    $
    8,311
    
    
    $
    8,700
    
    
    $
    8,736
    
    
    
    (4
    )%
    
    
    
    %Average earning assets
    
    
    241,487
    
    
    
    231,401
    
    
    
    237,869
    
    
    
    4
    
    
    
    (3
    )Net interest margin
    
    
    3.44
    %
    
    
    3.76
    %
    
    
    3.67
    %
 (1)
    
    Net interest income-FTE includes taxable equivalent adjustments of $162
million, $145 million and $131 million for the years ended December 31, 2003,
2002 and 2001, 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)
    
    Results include the effects of the consolidation of Paymentech, Inc. and
Anexsys, LLC. 2003
compared to 2002  2002 compared to 2001  Noninterest Income  Percent ChangeFor the Year Ended December 31,
    
    
    2003
    (1)
    
    
    2002
    (1)
    
    
    2001
    
    
    
    2003-2002
    
    
    
    2002-2001(Dollars in millions)Banking fees and commissions
    
    $
    1,795
    
    
    $
    1,794
    
    
    $
    1,736
    
    
    
    
    %
    
    
    3
    %Credit card revenue
    
    
    3,764
    
    
    
    3,836
    
    
    
    2,775
    
    
    
    (2
    )
    
    
    38Service charges on deposits
    
    
    1,661
    
    
    
    1,577
    
    
    
    1,449
    
    
    
    5
    
    
    
    9Fiduciary and investment management fees
    
    
    656
    
    
    
    645
    
    
    
    671
    
    
    
    2
    
    
    
    (4
    )Investment securities gains (losses)
    
    
    122
    
    
    
    165
    
    
    
    (66
    )
    
    
    (26
    )
    
    
    N/MTrading (losses) gains
    
    
    (26
    )
    
    
    224
    
    
    
    220
    
    
    
    N/M
    
    
    
    2Other income (loss)
    
    
    91
    
    
    
    (61
    )
    
    
    358
    
    
    
    N/M
    
    
    
    N/MTotal noninterest income
    
    $
    8,063
    
    
    $
    8,180
    
    
    $
    7,143
    
    
    
    (1
    )
    
    
    15Noninterest income to total revenue
    
    
    49.7
    %
    
    
    48.9
    %
    
    
    45.4
    %
 N/M
    
    Not meaningful.(1)
    
    Results include the effects of the consolidation of Paymentech, Inc. and
Anexsys, LLC. 2003
compared to 2002   BANK ONE 2003 ANNUAL REPORT 31




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##### 



2002 compared to 2001
 
   Noninterest Expense  Percent ChangeFor the Year Ended December 31,
    
    
    2003
    (1)
    
    
    2002
    (1)
    
    
    2001
    
    
    
    2003-2002
    
    
    
    2002-2001(Dollars in millions)Salaries and employee benefitsSalaries
    
    $
    4,085
    
    
    $
    3,788
    
    
    $
    3,602
    
    
    
    8
    %
    
    
    5
    %Employee benefits
    
    
    680
    
    
    
    636
    
    
    
    554
    
    
    
    7
    
    
    
    15Total salaries and employee benefits
    
    
    4,765
    
    
    
    4,424
    
    
    
    4,156
    
    
    
    8
    
    
    
    6Occupancy
    
    
    679
    
    
    
    643
    
    
    
    683
    
    
    
    6
    
    
    
    (6
    )Equipment
    
    
    473
    
    
    
    423
    
    
    
    451
    
    
    
    12
    
    
    
    (6
    )Outside service fees and processing
    
    
    1,153
    
    
    
    1,291
    
    
    
    1,174
    
    
    
    (11
    )
    
    
    10Marketing and development
    
    
    957
    
    
    
    1,069
    
    
    
    862
    
    
    
    (10
    )
    
    
    24Telecommunication
    
    
    213
    
    
    
    364
    
    
    
    406
    
    
    
    (41
    )
    
    
    (10
    )Goodwill amortization
    
    
    
    
    
    
    
    
    
    
    69
    
    
    
    
    
    
    
    N/MOther intangible amortization
    
    
    137
    
    
    
    125
    
    
    
    97
    
    
    
    10
    
    
    
    29Other expense
    
    
    1,400
    
    
    
    1,270
    
    
    
    1,241
    
    
    
    10
    
    
    
    2Total noninterest expense before
restructuring-related charges (reversals)
    
    
    9,777
    
    
    
    9,609
    
    
    
    9,139
    
    
    
    2
    
    
    
    5Restructuring-related charges (reversals)
    
    
    
    
    
    
    (63
    )
    
    
    351
    
    
    
    N/M
    
    
    
    N/MTotal noninterest expense
    
    $
    9,777
    
    
    $
    9,546
    
    
    $
    9,490
    
    
    
    2
    
    
    
    1Headcount
    
    
    71,196
    
    
    
    73,685
    
    
    
    73,519
    
    
    
    (3
    )
    
    
    Efficiency ratio
    
    
    59.7
    %
    
    
    56.6
    %
    
    
    59.8
    %
 N/M
    
    Not meaningful.(1)
    
    Results include the effects of the consolidation of Paymentech, Inc. and
Anexsys, LLC. 32 BANK ONE 2003 ANNUAL REPORT




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##### 



2003
compared to 2002          2002 compared to 2001
 Provision for Credit Losses 2003 compared to 2002   2002 compared to 2001
   BANK ONE 2003 ANNUAL REPORT 33




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##### 



Applicable Income Taxes  For the Year Ended December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001(Dollars in millions)Income from continuing
operations before
income taxes and
cumulative effect of change
in accounting principle
    
    $
    4,390
    
    
    $
    4,702
    
    
    $
    3,748Applicable income taxes
    
    
    1,265
    
    
    
    1,446
    
    
    
    1,099Effective tax rate
    
    
    28.8
    %
    
    
    30.8
    %
    
    
    29.3
    %Income from discontinued
operations before
income taxes
    
    $
    643
    
    
    $
    61
    
    
    $
    52Applicable income taxes
    
    
    233
    
    
    
    22
    
    
    
    19Effective tax rate
    
    
    36.2
    %
    
    
    36.1
    %
    
    
    36.5
    %Income before income taxes
and cumulative effect of
change in accounting
principle
    
    $
    5,033
    
    
    $
    4,763
    
    
    $
    3,800Applicable income taxes
    
    
    1,498
    
    
    
    1,468
    
    
    
    1,118Effective tax rate
    
    
    29.8
    %
    
    
    30.8
    %
    
    
    29.4
    %
  BUSINESS SEGMENT RESULTS AND OTHER DATA The Corporation is managed on a line of business basis. The business segments
financial results presented reflect the current organization of the
Corporation. The following table summarizes income from continuing operations
by line of business for the periods indicated: For the Year Ended December 31,
    
    
    2003
    (2)
    
    
    2002
    
    
    
    2001(In millions)Retail
    
    $
    1,558
    
    
    $
    1,451
    
    
    $
    1,046Commercial Banking
    
    
    1,197
    
    
    
    617
    
    
    
    700Card Services
    
    
    1,159
    
    
    
    1,166
    
    
    
    907Investment Management
Group
    
    
    345
    
    
    
    324
    
    
    
    293Corporate
    
    
    (1,134
    )
    
    
    (302
    )
    
    
    (297
    )Income from continuing
operations before
cumulative effect
of change
in accounting principle
    
    
    3,125
    
    
    
    3,256
    
    
    
    2,649Cumulative effect
of change
in accounting principle,
net of taxes of ($25)
    
    
    
    
    
    
    
    
    
    
    (44
    )Income from
continuing operations(1)
    
    $
    3,125
    
    
    $
    3,256
    
    
    $
    2,605
 (1)
    
    Income from continuing operations includes restructuring-related charges
(reversals) net of tax expense (benefit) of $(40) million and $222 million for
2002 and 2001, respectively. Prior periods have been reclassified to conform to
current period presentation.(2)
    
    During 2003, the non-core portfolios and the community development business
were transferred from Retail to Corporate, corporate trust services was
transferred from Investment Management Group to Corporate and retail brokerage
was transferred from Investment Management Group to Retail.
 Description of Methodology      Retail
   34 BANK ONE 2003 ANNUAL REPORT




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##### 



®
 
   For the Year Ended December 31,
    
    
    2003
    
    
    
    2002
    (8)
    
    
    2001
    (8)(Dollars in millions)Income Statement Data:Net interest income-FTE (1) (2)
    
    $
    4,422
    
    
    $
    4,286
    
    
    $
    4,116Banking fees and commissions (3)
    
    
    692
    
    
    
    729
    
    
    
    713Credit card revenue (4)
    
    
    217
    
    
    
    197
    
    
    
    164Service charges on deposits (5)
    
    
    910
    
    
    
    833
    
    
    
    791Other income
    
    
    62
    
    
    
    28
    
    
    
    53Total noninterest income
    
    
    1,881
    
    
    
    1,787
    
    
    
    1,721Total revenue, net of interest expense
    
    
    6,303
    
    
    
    6,073
    
    
    
    5,837Provision for credit losses
    
    
    505
    
    
    
    492
    
    
    
    644Salaries and employee benefits
    
    
    1,557
    
    
    
    1,528
    
    
    
    1,537Other expense
    
    
    1,786
    
    
    
    1,773
    
    
    
    1,867Total noninterest expense before restructuring-related charges (reversals)
    
    
    3,343
    
    
    
    3,301
    
    
    
    3,404Restructuring-related charges (reversals) (6)
    
    
    
    
    
    
    (18
    )
    
    
    104Total noninterest expense
    
    
    3,343
    
    
    
    3,283
    
    
    
    3,508Income before income taxes
    
    
    2,455
    
    
    
    2,298
    
    
    
    1,685Applicable income taxes
    
    
    897
    
    
    
    847
    
    
    
    639Net income
    
    $
    1,558
    
    
    $
    1,451
    
    
    $
    1,046Financial Performance:Return on average common equity
    
    
    33
    %
    
    
    30
    %
    
    
    22
    %Efficiency ratio
    
    
    53
    
    
    
    54
    
    
    
    60Headcount
    
    
    31,264
    
    
    
    32,931
    
    
    
    33,423Ending Balances:Small business commercial
    
    $
    10,216
    
    
    $
    9,921
    
    
    $
    9,749Home equity
    
    
    26,432
    
    
    
    20,853
    
    
    
    15,826Vehicle
    
    
    13,571
    
    
    
    14,661
    
    
    
    14,278Other personal loans
    
    
    6,016
    
    
    
    6,869
    
    
    
    8,069Total loans (7)
    
    
    56,235
    
    
    
    52,304
    
    
    
    47,922Assets
    
    
    58,772
    
    
    
    56,007
    
    
    
    51,939Demand deposits
    
    
    30,587
    
    
    
    27,711
    
    
    
    25,438Savings
    
    
    41,093
    
    
    
    38,784
    
    
    
    36,172Core deposits
    
    
    71,680
    
    
    
    66,495
    
    
    
    61,610Time
    
    
    17,881
    
    
    
    21,777
    
    
    
    25,561Total deposits
    
    
    89,561
    
    
    
    88,272
    
    
    
    87,171Equity
    
    
    4,774
    
    
    
    4,774
    
    
    
    4,774Average Balances:Small business commercial
    
    $
    10,059
    
    
    $
    9,854
    
    
    $
    9,650Home equity
    
    
    23,589
    
    
    
    17,630
    
    
    
    14,549Vehicle
    
    
    14,012
    
    
    
    14,519
    
    
    
    14,802Other personal loans
    
    
    6,309
    
    
    
    7,128
    
    
    
    8,670Total loans
    
    
    53,969
    
    
    
    49,131
    
    
    
    47,671Assets
    
    
    56,901
    
    
    
    52,806
    
    
    
    51,774Demand deposits
    
    
    29,048
    
    
    
    26,066
    
    
    
    23,968Savings
    
    
    40,274
    
    
    
    37,894
    
    
    
    34,055Core deposits
    
    
    69,322
    
    
    
    63,960
    
    
    
    58,023Time
    
    
    19,621
    
    
    
    24,077
    
    
    
    29,360Total deposits
    
    
    88,943
    
    
    
    88,037
    
    
    
    87,383Equity
    
    
    4,774
    
    
    
    4,774
    
    
    
    4,774
 BANK ONE 2003 ANNUAL REPORT 35




---



##### 



For the Year Ended December 31,
    
    
    2003
    
    
    
    2002
    (8)
    
    
    2001
    (8)(Dollars in millions)Credit Quality:Net charge-offs:Small business commercial
    
    $
    58
    
    
    $
    73
    
    
    $
    70Home equity
    
    
    124
    
    
    
    89
    
    
    
    54Vehicle
    
    
    216
    
    
    
    228
    
    
    
    160Other personal loans
    
    
    109
    
    
    
    104
    
    
    
    115Total net charge-offs
    
    
    507
    
    
    
    494
    
    
    
    399Net charge-off ratios:Small business commercial
    
    
    0.58
    %
    
    
    0.74
    %
    
    
    0.73
    %Home equity
    
    
    0.53
    
    
    
    0.50
    
    
    
    0.37Vehicle
    
    
    1.54
    
    
    
    1.57
    
    
    
    1.08Other personal loans
    
    
    1.73
    
    
    
    1.46
    
    
    
    1.33Total net charge-off ratio
    
    
    0.94
    
    
    
    1.01
    
    
    
    0.84Nonperforming assets:Commercial
    
    $
    250
    
    
    $
    236
    
    
    $
    268Consumer (9)
    
    
    290
    
    
    
    299
    
    
    
    328Total nonperforming loans (10)
    
    
    540
    
    
    
    535
    
    
    
    596Other, including other real estate owned (OREO)
    
    
    77
    
    
    
    223
    
    
    
    104Total nonperforming assets
    
    
    617
    
    
    
    758
    
    
    
    700Allowance for loan losses
    
    
    677
    
    
    
    679
    
    
    
    681Allowance for loan losses to period end loans (7)
    
    
    1.26
    %
    
    
    1.37
    %
    
    
    1.49
    %Allowance for loan losses to nonperforming loans (10)
    
    
    126
    
    
    
    128
    
    
    
    114Nonperforming assets to related assets (11)
    
    
    1.10
    
    
    
    1.44
    
    
    
    1.46Distribution:Number of:Banking centers
    
    
    1,841
    
    
    
    1,795
    
    
    
    1,802ATMs
    
    
    4,394
    
    
    
    3,960
    
    
    
    5,141Relationship bankers
    
    
    3,600
    
    
    
    2,839
    
    
    
    2,295Online
customers (in
thousands)
    
    
    2,436
    
    
    
    1,404
    
    
    
    1,083Personal
demand
accounts (in
thousands)
    
    
    4,773
    
    
    
    4,360
    
    
    
    4,345Business
demand
accounts (in
thousands)
    
    
    513
    
    
    
    492
    
    
    
    499Debit cards
issued (in
thousands)
    
    
    5,216
    
    
    
    4,647
    
    
    
    4,414Retail Brokerage:Mutual fund sales
    
    $
    2,644
    
    
    $
    2,293
    
    
    $
    2,284Annuity sales
    
    
    3,284
    
    
    
    3,114
    
    
    
    2,583Total investment sales volume
    
    
    5,928
    
    
    
    5,407
    
    
    
    4,867Market value
customer assets  end of
period (in
billions)
    
    
    33.7
    
    
    
    27.9
    
    
    
    25.3Number of
customers  end of
period (in
thousands)
    
    
    721
    
    
    
    681
    
    
    
    646Number of dedicated investment sales representatives
    
    
    973
    
    
    
    845
    
    
    
    724
 (1)
    
    Net interest income-FTE includes tax equivalent adjustments of $22 million,
$22 million and $21 million for the years ended December 31, 2003, 2002 and
2001, respectively.(2)
    
    Net interest income is presented rather than gross interest income and
gross interest expense because the Corporation relies primarily on net interest
revenue to assess the performance of the segment and make resource allocations.(3)
    
    Banking fees and commissions include insurance fees, documentary fees,
certain commitment fees, mutual fund commissions, loan and lease fees, safe
deposit fees, official checks fees, ATM interchange, capital markets related
fees and miscellaneous other fee revenue.(4)
    
    Credit card revenue includes credit card fees, debit card fees, merchant
fees and interchange fees.(5)
    
    Service charges on deposits include deficient balance fees, non-sufficient
funds/overdraft fees and other service related fees.(6)
    
    Restructuring-related charges (reversals) are discussed in Note 5
Restructuring-Related Activity on page 88. Income before
restructuring-related charges (reversals) for Retail, net of $7 million and
$(38) million of income tax expense (benefit) was $1.4 billion and $1.1
billion, for the years ended December 31, 2002 and 2001, respectively.(7)
    
    Loans include loans held for sale of $2,496 million, $2,689 million and
$2,336 million at December 31, 2003, 2002 and 2001, respectively. These amounts
are not included in allowance coverage statistics.(8)
    
    Prior period data has been adjusted for the transfer of the non-core
portfolios and the community development business to the Corporate line of
business and the transfer of retail brokerage from the Investment Management
Group line of business.(9)
    
    Includes consumer balances that are placed on nonaccrual status when the
collection of contractual principal or interest becomes 90 days past due.(10)
    
    Nonperforming loans include loans held for sale of $2 million and $3
million at December 31, 2003 and 2002, respectively. There were no
nonperforming loans held for sale at December 31, 2001. These amounts are not
included in allowance coverage statistics.(11)
    
    Related assets consist of loans outstanding, including loans held for
sale, and other real estate owned. 36 BANK ONE 2003 ANNUAL REPORT




---



##### 



2003 compared to 2002
 2002 compared to 2001       Commercial Banking
   BANK ONE 2003 ANNUAL REPORT 37




---



##### 



For the Year Ended December 31,
    
    
    2003
    (21)
    
    
    2002
    (21)
    
    
    2001(Dollars in millions)Income Statement Data:Net interest income-FTE (2) (12)
    
    $
    2,307
    
    
    $
    2,467
    
    
    $
    2,765Banking fees and commissions (3)
    
    
    808
    
    
    
    780
    
    
    
    718Credit card revenue (4)
    
    
    105
    
    
    
    77
    
    
    
    86Service charges on deposits (5)
    
    
    734
    
    
    
    714
    
    
    
    618Fiduciary and investment management fees (13)
    
    
    1
    
    
    
    1
    
    
    
    3Investment securities gains (losses)
    
    
    35
    
    
    
    (13
    )
    
    
    (12
    )Trading gains (14)
    
    
    4
    
    
    
    248
    
    
    
    269Other income (loss)
    
    
    20
    
    
    
    (163
    )
    
    
    (100
    )Total noninterest income
    
    
    1,707
    
    
    
    1,644
    
    
    
    1,582Total revenue, net of interest expense
    
    
    4,014
    
    
    
    4,111
    
    
    
    4,347Provision for credit losses
    
    
    (22
    )
    
    
    994
    
    
    
    1,073Salaries and employee benefits
    
    
    1,193
    
    
    
    1,062
    
    
    
    1,028Other expense
    
    
    1,182
    
    
    
    1,280
    
    
    
    1,222Total noninterest expense before restructuring-related charges (reversals)
    
    
    2,375
    
    
    
    2,342
    
    
    
    2,250Restructuring-related charges (reversals) (15)
    
    
    
    
    
    
    (4
    )
    
    
    73Total noninterest expense
    
    
    2,375
    
    
    
    2,338
    
    
    
    2,323Income before income taxes
    
    
    1,661
    
    
    
    779
    
    
    
    951Applicable income taxes
    
    
    464
    
    
    
    162
    
    
    
    251Net income
    
    $
    1,197
    
    
    $
    617
    
    
    $
    700Memo-Revenue
by activity:
(16)
Lending-related revenue
    
    $
    1,789
    
    
    $
    1,685
    
    
    $
    2,017Credit derivative hedge portfolio
    
    
    (283
    )
    
    
    42
    
    
    
    6Global treasury services
    
    
    1,595
    
    
    
    1,653
    
    
    
    1,606Capital markets (17)
    
    
    890
    
    
    
    717
    
    
    
    684Other
    
    
    23
    
    
    
    14
    
    
    
    34Financial Performance:Return on average common equity
    
    
    16
    %
    
    
    8
    %
    
    
    10
    %Efficiency ratio
    
    
    59
    
    
    
    57
    
    
    
    53Efficiency ratio excluding credit derivative hedge portfolio
    
    
    55
    
    
    
    57
    
    
    
    54Headcount:Corporate banking (including capital markets)
    
    
    2,660
    
    
    
    2,359
    
    
    
    2,714Middle market
    
    
    2,507
    
    
    
    2,853
    
    
    
    3,251Global treasury services
    
    
    3,313
    
    
    
    3,342
    
    
    
    2,984Operations, technology, and other administration
    
    
    1,946
    
    
    
    1,988
    
    
    
    2,188Total headcount
    
    
    10,426
    
    
    
    10,542
    
    
    
    11,137Ending Balances:Loans (18) (19)
    
    $
    53,752
    
    
    $
    61,895
    
    
    $
    72,578Interests in purchased receivables (19)
    
    
    32,938
    
    
    
    
    
    
    
    Investment securities (19)
    
    
    10,034
    
    
    
    2,077
    
    
    
    1,831Assets (20)
    
    
    136,812
    
    
    
    94,260
    
    
    
    101,186Demand deposits
    
    
    26,348
    
    
    
    25,462
    
    
    
    25,533Savings (16)
    
    
    12,263
    
    
    
    9,614
    
    
    
    6,214Time (16)
    
    
    922
    
    
    
    11,373
    
    
    
    10,896Foreign offices
    
    
    12,223
    
    
    
    10,192
    
    
    
    8,575Total deposits
    
    
    51,756
    
    
    
    56,641
    
    
    
    51,218Short-term borrowings (19)
    
    
    40,717
    
    
    
    2,278
    
    
    
    2,063Equity
    
    
    7,409
    
    
    
    7,409
    
    
    
    7,357Average Balances:Loans (19)
    
    $
    56,655
    
    
    $
    65,969
    
    
    $
    80,305Interests in purchased receivables (19)
    
    
    90
    
    
    
    
    
    
    
    Investment securities (19)
    
    
    2,582
    
    
    
    2,072
    
    
    
    1,517Assets (20)
    
    
    97,739
    
    
    
    95,717
    
    
    
    107,596Demand deposits
    
    
    24,449
    
    
    
    22,419
    
    
    
    21,328Savings (16)
    
    
    10,500
    
    
    
    8,002
    
    
    
    5,524Time (16)
    
    
    3,864
    
    
    
    8,975
    
    
    
    6,053Foreign offices
    
    
    10,156
    
    
    
    8,598
    
    
    
    8,962Total deposits
    
    
    48,969
    
    
    
    47,994
    
    
    
    41,867Short-term borrowings (19)
    
    
    3,612
    
    
    
    2,016
    
    
    
    1,546Equity
    
    
    7,409
    
    
    
    7,376
    
    
    
    7,300
 38 BANK ONE 2003 ANNUAL REPORT




---



##### 



For the Year Ended December 31,
    
    
    2003
    (21)
    
    
    2002
    (21)
    
    
    2001(Dollars in millions)Credit Quality:Net charge-offs
    
    $
    398
    
    
    $
    994
    
    
    $
    1,042Net charge-off ratio
    
    
    0.70
    %
    
    
    1.51
    %
    
    
    1.30
    %Nonperforming assets:Nonperforming loans (22)
    
    $
    1,036
    
    
    $
    1,874
    
    
    $
    2,127Other, including OREO
    
    
    22
    
    
    
    21
    
    
    
    27Total nonperforming assets
    
    
    1,058
    
    
    
    1,895
    
    
    
    2,154Allowance for loan losses(20)Allowance for loan losses
    
    $
    2,161
    
    
    $
    2,469
    
    
    $
    2,526Allowance for loan losses to period end loans (18)
    
    
    4.06
    %
    
    
    4.00
    %
    
    
    3.48
    %Allowance for loan losses to nonperforming loans (22)
    
    
    209
    
    
    
    133
    
    
    
    119Allowance for credit losses(20)Allowance for credit losses
    
    $
    2,651
    
    
    $
    3,071
    
    
    $
    3,079Allowance for credit losses to period end loans (18) (20)
    
    
    4.98
    %
    
    
    4.98
    %
    
    
    4.25
    %Allowance for credit losses to nonperforming loans (22)
    
    
    257
    
    
    
    166
    
    
    
    145Nonperforming assets to related assets (11)
    
    
    1.97
    
    
    
    3.06
    
    
    
    2.97Corporate Banking:Ending balances:Loans (19)
    
    $
    27,123
    
    
    $
    31,559
    
    
    $
    36,643Interests in purchased receivables (19)
    
    
    32,938
    
    
    
    
    
    
    
    Investment securities (19)
    
    
    10,006
    
    
    
    1,506
    
    
    
    1,365Deposits
    
    
    23,685
    
    
    
    31,998
    
    
    
    28,648Short term borrowings (19)
    
    
    40,717
    
    
    
    2,278
    
    
    
    2,063Average balances:Loans (19)
    
    
    28,536
    
    
    
    32,973
    
    
    
    43,495Interests in purchased receivables (19)
    
    
    90
    
    
    
    
    
    
    
    Investment securities (19)
    
    
    2,492
    
    
    
    1,460
    
    
    
    1,029Deposits
    
    
    24,768
    
    
    
    26,060
    
    
    
    22,946Short term borrowings (19)
    
    
    3,612
    
    
    
    2,016
    
    
    
    1,546Credit Quality:Net charge-offs
    
    
    228
    
    
    
    639
    
    
    
    638Net charge-off ratio
    
    
    0.80
    %
    
    
    1.94
    %
    
    
    1.47
    %Nonperforming loans
    
    $
    321
    
    
    $
    873
    
    
    $
    1,154Nonperforming loans to total loans
    
    
    1.18
    %
    
    
    2.76
    %
    
    
    3.15
    %Syndications:Lead arranger deals:Volume (in billions)
    
    $
    60.4
    
    
    $
    61.9
    
    
    $
    54.1Number of transactions
    
    
    317
    
    
    
    271
    
    
    
    238League table
standingrank
    
    
    4
    
    
    
    4
    
    
    
    4League table
standingmarket share
    
    
    7
    %
    
    
    6
    %
    
    
    5
    %Middle Market Banking:Loans      
ending balance
    
    $
    26,629
    
    
    $
    30,336
    
    
    $
    35,935average balance
    
    
    28,119
    
    
    
    32,996
    
    
    
    36,810Deposits  
ending balance
    
    
    28,071
    
    
    
    24,643
    
    
    
    22,570average balance
    
    
    24,201
    
    
    
    21,934
    
    
    
    18,921Credit quality:Net charge-offs (in millions)
    
    
    170
    
    
    
    355
    
    
    
    404Net charge-off ratio
    
    
    0.60
    %
    
    
    1.08
    %
    
    
    1.09
    %Nonperforming loans (in millions)(22)
    
    $
    715
    
    
    $
    1,001
    
    
    $
    973Nonperforming loans to total loans (22)
    
    
    2.69
    %
    
    
    3.30
    %
    
    
    2.71
    %
 For additional footnote detail see page 36.(12)
    
    Net interest income-FTE includes taxable equivalent adjustments of $106
million, $91 million and $79 million for the years ended December 31, 2003,
2002 and 2001, respectively.(13)
    
    Fiduciary and investment management fees include asset management fees,
personal trust fees, other trust fees and advisory fees.(14)
    
    Trading gains primarily include realized and unrealized gains (losses)
from trading assets, derivative financial instruments and foreign exchange
products.(15)
    
    Restructuring-related charges (reversals) are discussed in Note 5
Restructuring-Related Activity on page 88. Income (loss) before
restructuring-related charges (reversals) for Commercial Banking, net of $1
million and $(27) million of income tax expense (benefit), was $614 million and
$746 million, for the years ended December 31, 2002 and 2001, respectively.(16)
    
    Prior periods have been adjusted to conform to material organizational
changes and current period presentation.(17)
    
    Capital markets includes trading income and underwriting, syndicated
lending and advisory fees.(18)
    
    Loans include loans held for sale of $544 million, $235 million and $83
million at December 31, 2003, 2002 and 2001, respectively. These amounts are
not included in allowance coverage statistics.(19)
    
    Impacted by the adoption of FIN No. 46.(20)
    
    The allowance for credit losses includes the allowance for loan losses of
$2,161 million, $2,469 million and $2,526 million and the reserve for unfunded
commitments and standby letters of credit, which is included in other
liabilities, of $490 million, $602 million and $553 million for the years ended
December 31, 2003, 2002 and 2001, respectively. Prior periods have been
reclassified to conform to the current periods presentation.(21)
    
    Results include the effect of consolidating Anexsys, LLC, which had an
impact on individual line items of revenue and expense but no impact on net
income for the year ended December 31, 2002. In 2002, the consolidation
resulted in a $46 million increase in net interest income, a $19 million
increase in noninterest income and a $65 million increase in noninterest
expense.(22)
    
    Nonperforming loans include loans held for sale of $3 million and $19
million at December 31, 2003 and 2002, respectively. There were no
nonperforming loans held for sale at December 31, 2001. These amounts are not
included in allowance coverage statistics. BANK ONE 2003 ANNUAL REPORT 39




---



##### 



2003 compared to 2002
 2002 compared to 2001
   40 BANK ONE 2003 ANNUAL REPORT




---



##### 



Card Services  Reported Basis ®
 
   For the Year Ended December 31,
    
    
    2003
    (27)
    
    
    2002
    (27)
    
    
    2001(Dollars in millions)Income Statement Data:Net interest income-FTE (2) (23) (24)
    
    $
    1,469
    
    
    $
    1,271
    
    
    $
    1,280Banking fees and commissions (3)
    
    
    34
    
    
    
    66
    
    
    
    96Credit card revenue (4) (24)
    
    
    3,441
    
    
    
    3,560
    
    
    
    2,525Other income (loss)
    
    
    (6
    )
    
    
    (33
    )
    
    
    120Total noninterest income
    
    
    3,469
    
    
    
    3,593
    
    
    
    2,741Total revenue, net of interest expense
    
    
    4,938
    
    
    
    4,864
    
    
    
    4,021Provision for credit losses
    
    
    757
    
    
    
    531
    
    
    
    392Salaries and employee benefits
    
    
    624
    
    
    
    589
    
    
    
    501Other expense
    
    
    1,675
    
    
    
    1,856
    
    
    
    1,618Total noninterest expense before restructuring-related charges (reversals)
    
    
    2,299
    
    
    
    2,445
    
    
    
    2,119Restructuring-related charges (reversals) (25)
    
    
    
    
    
    
    (19
    )
    
    
    61Total noninterest expense
    
    
    2,299
    
    
    
    2,426
    
    
    
    2,180Income before income taxes
    
    
    1,882
    
    
    
    1,907
    
    
    
    1,449Applicable income taxes
    
    
    723
    
    
    
    741
    
    
    
    542Net income
    
    $
    1,159
    
    
    $
    1,166
    
    
    $
    907Memo-Net securitization gains (amortization)
    
    $
    (22
    )
    
    $
    (50
    )
    
    $
    (62
    )Financial Performance:Return on average common equity
    
    
    18
    %
    
    
    18
    %
    
    
    14
    %Efficiency ratio
    
    
    47
    
    
    
    50
    
    
    
    54Headcount
    
    
    10,374
    
    
    
    10,548
    
    
    
    9,871Ending Balances:Owned loans:Held in portfolio
    
    $
    6,447
    
    
    $
    7,592
    
    
    $
    5,040Held for sale
    
    
    5,588
    
    
    
    3,989
    
    
    
    1,746Total owned loans
    
    
    12,035
    
    
    
    11,581
    
    
    
    6,786Sellers interest and accrued interest receivable (26)
    
    
    27,193
    
    
    
    28,526
    
    
    
    24,019Total receivables
    
    
    39,228
    
    
    
    40,107
    
    
    
    30,805Memo: Securitized loans
    
    
    37,100
    
    
    
    33,889
    
    
    
    37,350Assets
    
    
    44,792
    
    
    
    45,391
    
    
    
    35,385Equity
    
    
    6,361
    
    
    
    6,361
    
    
    
    6,361
 BANK ONE 2003 ANNUAL REPORT 41




---



##### 



For the Year Ended December 31,
    
    
    2003
    (27)
    
    
    2002
    (27)
    
    
    2001(Dollars in millions)Average Balances:Owned loans:Held in portfolio
    
    $
    6,937
    
    
    $
    5,993
    
    
    $
    4,034Held for sale
    
    
    7,175
    
    
    
    3,906
    
    
    
    2,850Total owned loans
    
    
    14,112
    
    
    
    9,899
    
    
    
    6,884Sellers interest and accrued interest receivable (26)
    
    
    23,820
    
    
    
    23,211
    
    
    
    18,760Total receivables
    
    
    37,932
    
    
    
    33,110
    
    
    
    25,644Memo-Securitized loans
    
    
    35,900
    
    
    
    34,758
    
    
    
    39,803Assets
    
    
    43,130
    
    
    
    37,620
    
    
    
    28,931Equity
    
    
    6,361
    
    
    
    6,361
    
    
    
    6,308Credit Quality:Net charge-offs
    
    $
    707
    
    
    $
    514
    
    
    $
    392Net charge-off ratio (28)
    
    
    5.03
    %
    
    
    5.19
    %
    
    
    5.69
    %Delinquency ratio:30+ days
    
    
    3.31
    
    
    
    2.95
    
    
    
    3.0090+ days
    
    
    1.55
    
    
    
    1.38
    
    
    
    1.41Allowance for loan losses
    
    $
    446
    
    
    $
    396
    
    
    $
    396Allowance for loan losses to period end loans held in portfolio
    
    
    6.92
    %
    
    
    5.22
    %
    
    
    7.86
    %Other Data:Charge
volume (in
billions)
    
    $
    167.1
    
    
    $
    155.4
    
    
    $
    140.4Net accounts
opened (in
thousands)(29)
    
    
    4,578
    
    
    
    5,227
    
    
    
    7,326Credit cards
issued (in
thousands)(30)
    
    
    50,839
    
    
    
    50,351
    
    
    
    50,996Number of
cardmemberservices.com customers
(in millions)(31)
    
    
    5.3
    
    
    
    3.4
    
    
    
    1.9Paymentech, Inc.:Bank card
volume (in
billions)
    
    $
    155.0
    
    
    $
    124.7
    
    
    $
    115.3Total
transactions
(in
millions)
    
    
    5,538
    
    
    
    4,208
    
    
    
    3,778
 For footnote detail see pages 36, 39 and 44.  2003 compared to 2002  Reported Basis
 ®
   42 BANK ONE 2003 ANNUAL REPORT




---



##### 



2002 compared to 2001  Reported Basis
 Card Services  Managed Basis (Non-GAAP)
    For the Year Ended December 31,
    
    
    2003
    (27)
    
    
    2002
    (27)
    
    
    2001(Dollars in millions)Income Statement Data:Net interest income-FTE (2) (23) (24)
    
    $
    6,259
    
    
    $
    6,153
    
    
    $
    6,090Banking fees and commissions (3)
    
    
    34
    
    
    
    66
    
    
    
    96Credit card revenue (4) (24)
    
    
    1,863
    
    
    
    1,796
    
    
    
    1,146Other income (loss)
    
    
    (6
    )
    
    
    (33
    )
    
    
    120Total noninterest income
    
    
    1,891
    
    
    
    1,829
    
    
    
    1,362Total revenue, net of interest expense
    
    
    8,150
    
    
    
    7,982
    
    
    
    7,452Provision for credit losses
    
    
    3,969
    
    
    
    3,649
    
    
    
    3,823Salaries and employee benefits
    
    
    624
    
    
    
    589
    
    
    
    501Other expense
    
    
    1,675
    
    
    
    1,856
    
    
    
    1,618Total noninterest expense before restructuring-related charges (reversals)
    
    
    2,299
    
    
    
    2,445
    
    
    
    2,119Restructuring-related charges (reversals) (25)
    
    
    
    
    
    
    (19
    )
    
    
    61Total noninterest expense
    
    
    2,299
    
    
    
    2,426
    
    
    
    2,180Income before income taxes
    
    
    1,882
    
    
    
    1,907
    
    
    
    1,449Applicable income taxes
    
    
    723
    
    
    
    741
    
    
    
    542Net income
    
    $
    1,159
    
    
    $
    1,166
    
    
    $
    907Memo-Net securitization gains (amortization)
    
    $
    (22
    )
    
    $
    (50
    )
    
    $
    (62
    )Financial Performance:Percentage of average outstandings:Net interest income-FTE
    
    
    8.48
    %
    
    
    9.07
    %
    
    
    9.30
    %Provision for credit losses
    
    
    5.38
    
    
    
    5.38
    
    
    
    5.84Noninterest income
    
    
    2.56
    
    
    
    2.69
    
    
    
    2.08Risk adjusted margin
    
    
    5.66
    
    
    
    6.38
    
    
    
    5.54Noninterest expense
    
    
    3.11
    
    
    
    3.57
    
    
    
    3.33Pretax income-FTE
    
    
    2.55
    
    
    
    2.81
    
    
    
    2.21Net income
    
    
    1.57
    
    
    
    1.72
    
    
    
    1.39Return on average common equity
    
    
    18
    
    
    
    18
    
    
    
    14Efficiency ratio
    
    
    28
    
    
    
    30
    
    
    
    29
 BANK ONE 2003 ANNUAL REPORT 43




---



##### 



For the Year Ended December 31,
    
    
    2003
    (27)
    
    
    2002
    (27)
    
    
    2001(Dollars in millions)Headcount
    
    
    10,374
    
    
    
    10,548
    
    
    
    9,871Ending Balances:Held in portfolio
    
    $
    6,447
    
    
    $
    7,592
    
    
    $
    5,040Held for sale
    
    
    5,588
    
    
    
    3,989
    
    
    
    1,746Securitized
    
    
    37,100
    
    
    
    33,889
    
    
    
    37,350Sellers interest and accrued interest receivable (26)
    
    
    27,193
    
    
    
    28,526
    
    
    
    24,019Total loans
    
    
    76,328
    
    
    
    73,996
    
    
    
    68,155Assets
    
    
    81,892
    
    
    
    79,280
    
    
    
    72,735Equity
    
    
    6,361
    
    
    
    6,361
    
    
    
    6,361Average Balances:Held in portfolio
    
    $
    6,937
    
    
    $
    5,993
    
    
    $
    4,034Held for sale
    
    
    7,175
    
    
    
    3,906
    
    
    
    2,850Securitized
    
    
    35,900
    
    
    
    34,758
    
    
    
    39,803Sellers interest and accrued interest receivable (26)
    
    
    23,820
    
    
    
    23,211
    
    
    
    18,760Total loans
    
    
    73,832
    
    
    
    67,868
    
    
    
    65,447Assets
    
    
    79,030
    
    
    
    72,378
    
    
    
    68,734Equity
    
    
    6,361
    
    
    
    6,361
    
    
    
    6,308Credit Quality:Net charge-offs (28)
    
    $
    3,919
    
    
    $
    3,632
    
    
    $
    3,823Net charge-off ratio (28)
    
    
    5.31
    %
    
    
    5.35
    %
    
    
    5.84
    %12 month lagged (32)
    
    
    5.77
    
    
    
    5.55
    
    
    
    5.77Delinquency ratio:30+ days
    
    
    3.90
    
    
    
    4.02
    
    
    
    4.4690+ days
    
    
    1.85
    
    
    
    1.80
    
    
    
    1.93Allowance for loan losses
    
    $
    446
    
    
    $
    396
    
    
    $
    396Allowance for loan losses to period end loans held in portfolio
    
    
    6.92
    %
    
    
    5.22
    %
    
    
    7.86
    %Other Data:Charge
volume (in
billions)
    
    $
    167.1
    
    
    $
    155.4
    
    
    $
    140.4Net accounts
opened (in
thousands)(29)
    
    
    4,578
    
    
    
    5,227
    
    
    
    7,326Credit cards
issued (in
thousands)(30)
    
    
    50,839
    
    
    
    50,351
    
    
    
    50,996Number of
cardmemberservices.com customers
(in millions)(31)
    
    
    5.3
    
    
    
    3.4
    
    
    
    1.9Paymentech, Inc.:Bank card
volume (in
billions)
    
    $
    155.0
    
    
    $
    124.7
    
    
    $
    115.3Total
transactions
(in
millions)
    
    
    5,538
    
    
    
    4,208
    
    
    
    3,778
 For additional footnote detail see pages 36 and 39.(23)
    
    Net interest income-FTE did not have tax equivalent adjustments for the
years ended December 31, 2003, 2002 and 2001.(24)
    
    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.(25)
    
    Restructuring-related charges (reversals) are discussed in Note 5
Restructuring-Related Activity on page 88. Income before
restructuring-related charges (reversals) for Card Services, net of $7 million
and $(22) million of income tax expense (benefit), was $1.1 billion and $946
million for the years ended December 31, 2002 and 2001, respectively.(26)
    
    The investor owned portion of accrued interest receivable is recorded in
other assets at December 31, 2003 and 2002.(27)
    
    Results include the effect of consolidating Paymentech, Inc.
beginning in the first quarter of 2002. As a result of this consolidation net
interest income included $13 million, noninterest income included $322 million
and noninterest expense included $285 million in 2002. There was no impact on
net income.(28)
    
    Includes net charge-offs related to held for sale loans of $3 million for
the year ended December 31, 2003, which are recorded in noninterest income.(29)
    
    Net accounts opened includes originations, purchases and sales.(30)
    
    Approximately 4.5 million previously acquired inactive accounts were
purged during 2002 and prior periods have been recalculated to conform to
current period presentation.(31)
    
    Approximately 1 million registered users were purged in late 2001 due to
inactivity.(32)
    
    The lagged loss rate for 2002 includes Wachovia net credit losses while
2001 average loans only includes five months of Wachovia balances. The lagged
loss rate for 2001 includes five months of Wachovia net credit losses. The 2001
ratio includes Wachovia net charge-offs but excludes Wachovia loans. 44 BANK ONE 2003 ANNUAL REPORT




---



##### 



2003 compared to 2002  Managed Basis (Non-GAAP)
 2002 compared to 2001  Managed Basis (Non-GAAP)
   BANK ONE 2003 ANNUAL REPORT 45




---



##### 



For the Year Ended December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001(in millions):Income Statement Data:Net interest income-FTE (2) (23) (24)Reported data for the period
    
    $
    1,469
    
    
    $
    1,271
    
    
    $
    1,280Securitization adjustments
    
    
    4,790
    
    
    
    4,882
    
    
    
    4,810Managed net interest income-FTE (2) (23) (24)
    
    
    6,259
    
    
    
    6,153
    
    
    
    6,090Credit card revenue: (4)Reported data for the period
    
    $
    3,441
    
    
    $
    3,560
    
    
    $
    2,525Securitization adjustments
    
    
    (1,578
    )
    
    
    (1,764
    )
    
    
    (1,379
    )Managed credit card revenue
    
    
    1,863
    
    
    
    1,796
    
    
    
    1,146Noninterest income:Reported data for the period
    
    $
    3,469
    
    
    $
    3,593
    
    
    $
    2,741Securitization adjustments
    
    
    (1,578
    )
    
    
    (1,764
    )
    
    
    (1,379
    )Managed noninterest income
    
    
    1,891
    
    
    
    1,829
    
    
    
    1,362Total revenue, net of interest expense:Reported data for the period
    
    $
    4,938
    
    
    $
    4,864
    
    
    $
    4,021Securitization adjustments
    
    
    3,212
    
    
    
    3,118
    
    
    
    3,431Managed total revenue, net of interest expense
    
    
    8,150
    
    
    
    7,982
    
    
    
    7,452Provision for credit losses:Reported data for the period
    
    $
    757
    
    
    $
    531
    
    
    $
    392Securitization adjustments
    
    
    3,212
    
    
    
    3,118
    
    
    
    3,431Managed provision for credit losses
    
    
    3,969
    
    
    
    3,649
    
    
    
    3,823Ending Balances:Owned loans:Held in portfolio
    
    $
    6,447
    
    
    $
    7,592
    
    
    $
    5,040Held for sale
    
    
    5,588
    
    
    
    3,989
    
    
    
    1,746Total owned loans
    
    
    12,035
    
    
    
    11,581
    
    
    
    6,786Sellers interest and accrued interest receivable (26)
    
    
    27,193
    
    
    
    28,526
    
    
    
    24,019Total on balance sheet loans
    
    
    39,228
    
    
    
    40,107
    
    
    
    30,805Securitized loans
    
    
    37,100
    
    
    
    33,889
    
    
    
    37,350Total managed loans
    
    
    76,328
    
    
    
    73,996
    
    
    
    68,155Assets:Reported
    
    $
    44,792
    
    
    $
    45,391
    
    
    $
    35,385Securitization adjustments
    
    
    37,100
    
    
    
    33,889
    
    
    
    37,350Managed assets
    
    
    81,892
    
    
    
    79,280
    
    
    
    72,735Average Balances:Owned loans:Held in portfolio
    
    $
    6,937
    
    
    $
    5,993
    
    
    $
    4,034Held for sale
    
    
    7,175
    
    
    
    3,906
    
    
    
    2,850Total owned loans
    
    
    14,112
    
    
    
    9,899
    
    
    
    6,884Sellers interest and accrued interest receivable (26)
    
    
    23,820
    
    
    
    23,211
    
    
    
    18,760Total on balance sheet loans
    
    
    37,932
    
    
    
    33,110
    
    
    
    25,644Securitized loans
    
    
    35,900
    
    
    
    34,758
    
    
    
    39,803Total managed loans
    
    
    73,832
    
    
    
    67,868
    
    
    
    65,447Total assets:Reported
    
    $
    43,130
    
    
    $
    37,620
    
    
    $
    28,931Securitization adjustments
    
    
    35,900
    
    
    
    34,758
    
    
    
    39,803Managed assets
    
    
    79,030
    
    
    
    72,378
    
    
    
    68,734Credit Quality:Net charge-offs:Reported (28)
    
    $
    707
    
    
    $
    514
    
    
    $
    392Securitization adjustments
    
    
    3,212
    
    
    
    3,118
    
    
    
    3,431Managed net charge-offs
    
    
    3,919
    
    
    
    3,632
    
    
    
    3,823
 46 BANK ONE 2003 ANNUAL REPORT




---



##### 



Investment Management Group  ®
 
   For the Year Ended December 31,
    
    
    2003
    (35)
    
    
    2002
    (35)
    
    
    2001
    (35)(Dollars in millions)Income Statement Data:Net interest income-FTE (2) (33)
    
    $
    456
    
    
    $
    382
    
    
    $
    385Banking fees and commissions (3)
    
    
    343
    
    
    
    252
    
    
    
    233Service charges on deposits (5)
    
    
    19
    
    
    
    19
    
    
    
    17Fiduciary and investment management fees (13)
    
    
    623
    
    
    
    635
    
    
    
    659Other income
    
    
    39
    
    
    
    10
    
    
    
    3Total noninterest income
    
    
    1,024
    
    
    
    916
    
    
    
    912Total revenue, net of interest expense
    
    
    1,480
    
    
    
    1,298
    
    
    
    1,297Provision for credit losses
    
    
    12
    
    
    
    35
    
    
    
    38Salaries and employee benefits
    
    
    449
    
    
    
    420
    
    
    
    428Other expense
    
    
    471
    
    
    
    328
    
    
    
    344Total noninterest expense before restructuring-related charges (reversals)
    
    
    920
    
    
    
    748
    
    
    
    772Restructuring-related charges (reversals) (34)
    
    
    
    
    
    
    (1
    )
    
    
    19Total noninterest expense
    
    
    920
    
    
    
    747
    
    
    
    791Income before income taxes
    
    
    548
    
    
    
    516
    
    
    
    468Applicable income taxes
    
    
    203
    
    
    
    192
    
    
    
    175Net income
    
    $
    345
    
    
    $
    324
    
    
    $
    293Financial Performance:Return on average common equity
    
    
    30
    %
    
    
    34
    %
    
    
    31
    %Efficiency ratio
    
    
    62
    
    
    
    58
    
    
    
    61Headcount
    
    
    4,845
    
    
    
    4,277
    
    
    
    4,596Ending Balances:Commercial
    
    $
    3,236
    
    
    $
    3,258
    
    
    $
    3,418Consumer
    
    
    4,144
    
    
    
    3,684
    
    
    
    3,698Total loans
    
    
    7,380
    
    
    
    6,942
    
    
    
    7,116Assets
    
    
    15,839
    
    
    
    8,491
    
    
    
    8,357Demand deposits
    
    
    1,702
    
    
    
    1,862
    
    
    
    2,144Savings
    
    
    9,414
    
    
    
    6,937
    
    
    
    5,399Time
    
    
    597
    
    
    
    761
    
    
    
    1,001Foreign offices
    
    
    290
    
    
    
    244
    
    
    
    165Total deposits
    
    
    12,003
    
    
    
    9,804
    
    
    
    8,709Insurance policy and claims reserves
    
    
    6,712
    
    
    
    226
    
    
    
    124Equity
    
    
    1,554
    
    
    
    952
    
    
    
    954
 BANK ONE 2003 ANNUAL REPORT 47




---



##### 



For the Year Ended December 31,
    
    
    2003
    (35)
    
    
    2002
    (35)
    
    
    2001
    (35)(Dollars in millions)Average Balances:Commercial
    
    $
    3,082
    
    
    $
    3,234
    
    
    $
    3,399Consumer
    
    
    3,727
    
    
    
    3,735
    
    
    
    3,553Total loans
    
    
    6,809
    
    
    
    6,969
    
    
    
    6,952Assets
    
    
    10,771
    
    
    
    8,357
    
    
    
    8,041Demand deposits
    
    
    1,815
    
    
    
    1,662
    
    
    
    1,711Savings
    
    
    7,974
    
    
    
    6,026
    
    
    
    4,733Time
    
    
    669
    
    
    
    864
    
    
    
    1,299Foreign offices
    
    
    168
    
    
    
    204
    
    
    
    155Total deposits
    
    
    10,626
    
    
    
    8,756
    
    
    
    7,898Insurance policy and claims reserves
    
    
    2,330
    
    
    
    178
    
    
    
    120Equity
    
    
    1,154
    
    
    
    954
    
    
    
    937Credit Quality:Net charge-offs:Commercial
    
    $
    9
    
    
    $
    15
    
    
    $
    27Consumer
    
    
    3
    
    
    
    5
    
    
    
    7Total net charge-offs
    
    
    12
    
    
    
    20
    
    
    
    34Net charge-off ratios:Commercial
    
    
    0.29
    %
    
    
    0.46
    %
    
    
    0.79
    %Consumer
    
    
    0.08
    
    
    
    0.13
    
    
    
    0.20Total net charge-off ratio
    
    
    0.18
    
    
    
    0.29
    
    
    
    0.49Nonperforming assets:Commercial
    
    $
    32
    
    
    $
    61
    
    
    $
    38Consumer
    
    
    10
    
    
    
    10
    
    
    
    4Total nonperforming loans
    
    
    42
    
    
    
    71
    
    
    
    42Other, including other real estate owned (OREO)
    
    
    18
    
    
    
    1
    
    
    
    1Total nonperforming assets
    
    
    60
    
    
    
    72
    
    
    
    43Allowance for loan losses
    
    
    40
    
    
    
    40
    
    
    
    25Allowance for loan losses to period end loans
    
    
    0.54
    %
    
    
    0.58
    %
    
    
    0.35
    %Allowance for loan losses to nonperforming loans
    
    
    95
    
    
    
    56
    
    
    
    60Nonperforming assets to related assets (11)
    
    
    0.81
    
    
    
    1.04
    
    
    
    0.60Assets Under Management Ending Balances:Mutual funds
    
    $
    105,489
    
    
    $
    101,234
    
    
    $
    83,488Other
    
    
    81,499
    
    
    
    60,720
    
    
    
    59,080Total
    
    
    186,988
    
    
    
    161,954
    
    
    
    142,568By type:Money market
    
    
    72,433
    
    
    
    78,624
    
    
    
    58,514Equity
    
    
    50,574
    
    
    
    37,031
    
    
    
    47,285Fixed income
    
    
    63,981
    
    
    
    46,299
    
    
    
    36,769Total
    
    
    186,988
    
    
    
    161,954
    
    
    
    142,568By channel:Private client services
    
    
    44,992
    
    
    
    42,680
    
    
    
    50,533Retail brokerage
    
    
    8,623
    
    
    
    7,008
    
    
    
    7,600Institutional
    
    
    95,001
    
    
    
    77,799
    
    
    
    62,408Commercial cash sweep
    
    
    8,134
    
    
    
    9,015
    
    
    
    9,850Capital markets
    
    
    3,631
    
    
    
    4,858
    
    
    
    1,487External (36)
    
    
    11,197
    
    
    
    10,802
    
    
    
    3,757All other direct (37) (38)
    
    
    15,410
    
    
    
    9,792
    
    
    
    6,933Total
    
    
    186,988
    
    
    
    161,954
    
    
    
    142,568Morningstar®Rankings:% of customer assets in funds ranked 4 or better
    
    
    48
    %
    
    
    50
    %
    
    
    57
    %% of customer assets in funds ranked 3 or better
    
    
    87
    
    
    
    89
    
    
    
    88
 48 BANK ONE 2003 ANNUAL REPORT




---



##### 



For the Year Ended December 31,
    
    
    2003
    (35)
    
    
    2002
    (35)
    
    
    2001
    (35)(Dollars in millions)Private Client Services:Number of private client advisors (39)
    
    
    617
    
    
    
    705
    
    
    
    670Number of private client offices (39)
    
    
    89
    
    
    
    92
    
    
    
    105Total client assetsend of period (40)
    
    $
    67,675
    
    
    $
    61,697
    
    
    $
    72,220Ending balances:Loans
    
    
    6,919
    
    
    
    6,894
    
    
    
    7,006Deposits
    
    
    11,747
    
    
    
    9,250
    
    
    
    7,998Average balances:Loans
    
    
    6,628
    
    
    
    6,919
    
    
    
    6,882Deposits
    
    
    10,054
    
    
    
    8,303
    
    
    
    7,358Insurance Group:Consolidated gross insurance  related revenue (41)
    
    $
    648
    
    
    $
    463
    
    
    $
    443Ending balances:Invested assets
    
    
    6,079
    
    
    
    385
    
    
    
    337Policy loans
    
    
    411
    
    
    
    
    
    
    
    Policies in-force  direct/assumed (in thousands)
    
    
    2,306
    
    
    
    1,193
    
    
    
    1,533Insurance in-force  direct/assumed
    
    
    231,533
    
    
    
    13,023
    
    
    
    18,143Insurance in-force  retained
    
    
    42,596
    
    
    
    13,022
    
    
    
    18,141Insurance policy and claims reserves
    
    
    6,713
    
    
    
    226
    
    
    
    124A.M. Best rating (42)
    
    
    A
    
    
    
    
    
    
    
    
 For additional footnote detail see pages 36, 39 and 44.(33)
    
    Net interest income-FTE did not have tax equivalent adjustments for the
years ended December 31, 2003, 2002 and 2001, respectively.(34)
    
    Restructuring-related charges (reversals) are discussed in Note 5
Restructuring Related Activity on page 88. Income before
restructuring-related charges (reversals) for IMG, net of $0 million and $(7)
million of income tax expense (benefit), was $323 million and $305 million for
the years ended December 31, 2002 and 2001, respectively.(35)
    
    Prior period data has been adjusted for the transfer of corporate trust
services to the Corporate line of business and the transfer of retail brokerage
to the Retail line of business.(36)
    
    Includes broker/dealers, trust companies, and registered investment
advisors that sell, or offer, One Group funds.(37)
    
    One Group funds invested in other One Group funds and other mutual funds
sub-advised.(38)
    
    2003 includes assets from the Security Capital acquisition.(39)
    
    Prior period data has been adjusted to conform to current period
presentation.(40)
    
    Fiduciary, brokerage, and other related assets (managed and non-managed).(41)
    
    Includes insurance revenues recorded in other lines of business.(42)
    
    A.M. Best maintained A ratings with developing implications.  2003 compared to 2002
 
   BANK ONE 2003 ANNUAL REPORT 49




---



##### 



2002
compared to 2001
 Corporate
   For the Year Ended December 31,
    
    
    2003
    
    
    
    2002
    (53)
    
    
    2001
    (53)(Dollars in millions)Income Statement Data:Net interest income (expense)-FTE (2) (43) (44)
    
    $
    (343
    )
    
    $
    294
    
    
    $
    190Banking fees and commissions (3)
    
    
    (82
    )
    
    
    (33
    )
    
    
    (24
    )Credit card revenue (4)
    
    
    1
    
    
    
    2
    
    
    
    Service charges on deposits (5)
    
    
    (2
    )
    
    
    11
    
    
    
    23Fiduciary and investment management fees (13)
    
    
    32
    
    
    
    9
    
    
    
    9Investment securities gains (losses)
    
    
    87
    
    
    
    178
    
    
    
    (54
    )Trading losses (14)
    
    
    (30
    )
    
    
    (24
    )
    
    
    (49
    )Other income (loss)
    
    
    (24
    )
    
    
    97
    
    
    
    282Total noninterest income (loss) (45)
    
    
    (18
    )
    
    
    240
    
    
    
    187Total income (loss), net of interest expense
    
    
    (361
    )
    
    
    534
    
    
    
    377Provision for credit losses
    
    
    793
    
    
    
    435
    
    
    
    363Salaries and employee benefits
    
    
    942
    
    
    
    825
    
    
    
    662Other expense (income)
    
    
    (102
    )
    
    
    (52
    )
    
    
    (68
    )Total
noninterest expense before restructuring-related charges (reversals)
    
    
    840
    
    
    
    773
    
    
    
    594Restructuring-related charges (reversals) (46)
    
    
    
    
    
    
    (21
    )
    
    
    94Total noninterest expense (47)
    
    
    840
    
    
    
    752
    
    
    
    688Loss before income tax benefit
    
    
    (1,994
    )
    
    
    (653
    )
    
    
    (674
    )Applicable income tax benefit
    
    
    (860
    )
    
    
    (351
    )
    
    
    (377
    )Loss from continuing operations, net of tax benefit
    
    
    (1,134
    )
    
    
    (302
    )
    
    
    (297
    )Discontinued operations:Income from discontinued operations
    
    
    643
    
    
    
    61
    
    
    
    52Applicable income taxes
    
    
    233
    
    
    
    22
    
    
    
    19Income from discontinued operations, net of taxes
    
    
    410
    
    
    
    39
    
    
    
    33Net loss
    
    $
    (724
    )
    
    $
    (263
    )
    
    $
    (264
    )Headcount
    
    
    14,287
    
    
    
    15,387
    
    
    
    14,581Ending Balances:Non-core portfolios
    
    $
    8,568
    
    
    $
    15,296
    
    
    $
    21,580Other loans
    
    
    177
    
    
    
    107
    
    
    
    751Total loans (48)
    
    
    8,745
    
    
    
    15,403
    
    
    
    22,331Assets
    
    
    70,348
    
    
    
    73,836
    
    
    
    72,640Memo

Treasury investments (49)
    
    
    39,281
    
    
    
    34,192
    
    
    
    32,214Principal investments (50)
    
    
    3,214
    
    
    
    2,254
    
    
    
    2,738Deposits
    
    
    11,301
    
    
    
    15,291
    
    
    
    20,432Equity
    
    
    3,321
    
    
    
    2,944
    
    
    
    780Average Balances:Non-core portfolios
    
    $
    11,949
    
    
    $
    18,460
    
    
    $
    24,474Other loans
    
    
    228
    
    
    
    378
    
    
    
    768Total loans
    
    
    12,177
    
    
    
    18,838
    
    
    
    25,242Assets
    
    
    70,178
    
    
    
    69,100
    
    
    
    71,786Deposits
    
    
    12,394
    
    
    
    15,176
    
    
    
    24,653Equity
    
    
    2,905
    
    
    
    2,234
    
    
    
    410
 50 BANK ONE 2003 ANNUAL REPORT




---



##### 



For the Year Ended December 31,
    
    
    2003
    
    
    
    2002
    (53)
    
    
    2001
    (53)(Dollars in millions)Credit Quality:Net charge-offs:Non-core portfolios (51)
    
    $
    980
    
    
    $
    424
    
    
    $
    420Other loans
    
    
    4
    
    
    
    19
    
    
    
    1Total net charge-offs (51)
    
    
    984
    
    
    
    443
    
    
    
    421Non-core portfolios net charge-off ratio (51)
    
    
    8.20
    %
    
    
    2.30
    %
    
    
    1.72
    %Nonperforming assets:Non-core portfolios
    
    
    580
    
    
    
    790
    
    
    
    745Other loans
    
    
    2
    
    
    
    6
    
    
    
    41Total nonperforming loans (52)
    
    
    582
    
    
    
    796
    
    
    
    786Other, including OREO
    
    
    78
    
    
    
    6
    
    
    
    5Total nonperforming assets
    
    
    660
    
    
    
    802
    
    
    
    791Allowance for loan losses (54)
    
    $
    148
    
    
    $
    339
    
    
    $
    347Allowance for loan losses to period end loans (48)
    
    
    2.76
    %
    
    
    2.20
    %
    
    
    1.55
    %Allowance for loan losses to nonperforming loans (52)
    
    
    43
    
    
    
    43
    
    
    
    44Nonperforming assets to related assets
    
    
    7.48
    
    
    
    5.20
    
    
    
    3.54
 For additional footnote detail see pages 36, 39, 44 and 49.(43)
    
    Net interest expense-FTE includes tax equivalent adjustments of $34
million, $32 million and $31 million for the years ended December 31, 2003,
2002 and 2001, respectively.(44)
    
    Net interest expense-FTE primarily includes treasury results, interest
spread on investment-related activities and spread on non-core portfolios.(45)
    
    Noninterest income primarily includes the gains and losses from investment
activities and other corporate transactions.(46)
    
    Restructuring-related charges (reversals) are discussed in Note 5
Restructuring-Related Activity on page 88. Loss before restructuring-related charges (reversals) for Corporate, net of $8 million and
$(35) million in income tax expense (benefit), was $276 million and $205
million for the years ended December 31, 2002 and 2001, respectively.(47)
    
    Noninterest expense primarily includes corporate expenses not allocated to
the lines of business.(48)
    
    Loans include loans held for sale of $3,389 million and $24 million at
December 31, 2003 and 2002, respectively. These amounts are not included in
allowance coverage statistics. There were no held for sale loans at December
31, 2001.(49)
    
    Treasury investments may include U.S. government and agency debt
securities, mortgage- and other asset-backed securities and other fixed income
investments.(50)
    
    Principal investments include primarily private equity investments and
venture capital fund investments.(51)
    
    Net charge-offs include $652 million of charge-offs related to the
transfer of $4.1 billion of home equity loans to held for sale.(52)
    
    Nonperforming loans include loans held for sale of $239 million at
December 31, 2003. This amount is not included in allowance coverage
statistics. There were no nonperforming held for sale at December 31, 2002 and
2001.(53)
    
    Prior period data has been adjusted for the transfer of corporate trust
services from the Investment Management Group line of business and the transfer
of the non-core portfolios and community development business from the Retail
line of business. Prior period amounts have been reclassified to conform to
current presentation.(54)
    
    Allowance for loan losses reflects a $237 million decline related to the
$4.1 billion transfer of home equity loans to held for sale.  2003
compared to 2002  Corporate
Excluding Non-Core Portfoliosand Discontinued Operations  For the Year Ended December 31,
    
    
    2003
    
    
    
    2002(In millions)Treasury net interest (expense) income
    
    $
    (369
    )
    
    $
    17Net securities gains
    
    
    87
    
    
    
    178Losses related to termination of debt
and related hedges
    
    
    (162
    )
    
    
    Corporate unallocated expenses,
net of restructuring
    
    
    (667
    )
    
    
    (584
    )
 
   BANK ONE 2003 ANNUAL REPORT 51




---



##### 



Non-Core Portfolios     Discontinued Operations  For the Year Ended December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001(In millions)Total revenues
    
    $
    730
    
    
    $
    131
    
    
    $
    114Total expenses
(excluding taxes)
    
    
    87
    
    
    
    70
    
    
    
    62Pretax income
    
    
    643
    
    
    
    61
    
    
    
    52Net income
    
    $
    410
    
    
    $
    39
    
    
    $
    33Total assets
    
    $
    72
    
    
    $
    84
    
    
    $
    239
  2002 compared to 2001
 Corporate Excluding Non-Core Portfolios
and Discontinued Operations  For the Year Ended December 31,
    
    
    2002
    
    
    
    2001(In millions)Treasury net interest income (expense)
    
    $
    17
    
    
    $
    (308
    )Net securities gains (losses)
    
    
    178
    
    
    
    (54
    )Corporate unallocated expenses,
net of restructuring
    
    
    (584
    )
    
    
    (351
    )
     Non-Core Portfolios
   52 BANK ONE 2003 ANNUAL REPORT




---



##### 



Non-Core Portfolios  For the Year Ended December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001Income Statement Data:Net interest income-FTE (2) (33)
    
    $
    398
    
    
    $
    594
    
    
    $
    860Banking fees and commissions (3)
    
    
    3
    
    
    
    
    
    
    
    3Other (loss) income
    
    
    (9
    )
    
    
    
    
    
    
    1Total noninterest income
    
    
    (6
    )
    
    
    
    
    
    
    4Total revenue, net of interest expense
    
    
    392
    
    
    
    594
    
    
    
    864Provision for credit losses
    
    
    789
    
    
    
    417
    
    
    
    361Salaries and employee benefits
    
    
    9
    
    
    
    17
    
    
    
    24Other expense
    
    
    165
    
    
    
    172
    
    
    
    219Total noninterest expense
    
    
    174
    
    
    
    189
    
    
    
    243(Loss) income before income taxes (benefits)
    
    
    (571
    )
    
    
    (12
    )
    
    
    260Applicable income taxes (benefits)
    
    
    (207
    )
    
    
    (4
    )
    
    
    95Net (loss) income
    
    $
    (364
    )
    
    $
    (8
    )
    
    $
    165Financial Performance:Return on average common equity
    
    
    (26
    )%
    
    
    (1
    )%
    
    
    12
    %Efficiency ratio
    
    
    44
    
    
    
    32
    
    
    
    28Headcount
    
    
    
    
    
    
    294
    
    
    
    346Ending Balances:Home equity
    
    $
    6,832
    
    
    $
    11,009
    
    
    $
    14,881Vehicle leases and other loans
    
    
    1,736
    
    
    
    4,287
    
    
    
    6,699Total Loans (48)
    
    
    8,568
    
    
    
    15,296
    
    
    
    21,580Equity
    
    
    1,415
    
    
    
    1,415
    
    
    
    1,415Average Balances:Home equity
    
    $
    9,369
    
    
    $
    12,798
    
    
    $
    16,689Vehicle leases and other loans
    
    
    2,580
    
    
    
    5,662
    
    
    
    7,785Total Loans
    
    
    11,949
    
    
    
    18,460
    
    
    
    24,474Equity
    
    
    1,415
    
    
    
    1,415
    
    
    
    1,415Credit Quality:Net
charge-offs
Home equity (51)
    
    $
    892
    
    
    $
    329
    
    
    $
    321Vehicle leases and other loans
    
    
    88
    
    
    
    95
    
    
    
    99Total net charge-offs (51)
    
    
    980
    
    
    
    424
    
    
    
    420Net charge-off ratios:Home equity (51)
    
    
    9.52
    %
    
    
    2.57
    %
    
    
    1.92
    %Vehicle leases and other loans
    
    
    3.41
    
    
    
    1.68
    
    
    
    1.27Total net charge-off ratio (51)
    
    
    8.20
    
    
    
    2.30
    
    
    
    1.72Nonperforming assets:Nonperforming loans (52)
    
    $
    580
    
    
    $
    790
    
    
    $
    745Other, including other real estate owned (OREO)
    
    
    77
    
    
    
    
    
    
    
    Total nonperforming loans
    
    
    657
    
    
    
    790
    
    
    
    745Allowance for loan losses
    
    
    144
    
    
    
    335
    
    
    
    342Allowance for loan losses to period end loans (48)
    
    
    2.78
    %
    
    
    2.19
    %
    
    
    1.58
    %Allowance for loan losses to nonperforming loans (52)
    
    
    42
    
    
    
    42
    
    
    
    46Nonperforming assets to related assets (11)
    
    
    7.60
    
    
    
    5.16
    
    
    
    3.45
 For additional footnote detail see pages 36, 39, 44, 49 and 51.
  BALANCE SHEET ANALYSIS
 Loans
   BANK ONE 2003 ANNUAL REPORT 53




---



##### 



Trading Assets  Investment Securities  Interests in Purchased Receivables  Deposits  Short-term Borrowings  Insurance Policy and Claims Reserves  Stockholders Equity  RISK MANAGEMENT
 Corporate Risk Management Governance Structure    
    
    Board of Directors:determines risk appetite and risk capacity. The Audit and
Risk Management Committee routinely reviews risk issues.
    
    Risk Committees:ensure appropriate management of aggregate risks and
capital, acceptable corporate and line of business risk profiles and the
integrity of risk governance processes. Risks addressed include, but are not
limited to credit, market, reputation and operational risk. The Executive Risk
Committee is co-chaired by the Chief Executive Officer and Chief Risk Officer.
Each line of business risk subcommittee is co-chaired by the head of the line
of business and its respective chief risk officers. Committee members represent
the lines of business, corporate risk management, finance and legal functions.
    
    Chief Risk Officer:establishes effective risk management infrastructure (people, process and systems).
    
    Lines of Business:manage risk exposures to approved limit structures for their applicable line of business and identify risk linkages to other lines of business.
    
    Investment Committee:ensures appropriate management of both new investment
proposals and the existing portfolio of investments; approves new investment
proposals and divestment strategies. The committee is co-chaired by the Chief
Financial Officer and Head of Financial Planning and Acquisitions.
    
    Principal Investments Committee:a separate investment committee exists for
governing the principal investments portfolio and is chaired by the Chief
Executive Officer.
    
    Corporate Audit:independently assesses and recommends actions to mitigate
risk across the corporation.
    
    Asset and Liability Committee (ALCO):provides governance and oversight of
liquidity, structural interest rate risk and capital and is co-chaired by the
Chief Financial Officer and Treasurer. Risk Management Process   
    
    Risk Identification:The Corporation identifies risk dynamically by assessing
the potential impact of internal and external factors on current businesses and
new products/programs, and by developing risk mitigation strategies to
effectively manage identified risks.
    
    Risk Measurement:The Corporation measures risk using a variety of
methodologies including: calculating expected loss, unexpected loss and
value-at-risk; and conducting stress tests and making comparisons to external
benchmarks. Measurement models and underlying assumptions are routinely
validated to ensure accurate risk measurement.
    
    Risk Monitoring/Control:The Corporation establishes risk management policies and procedures. These policies contain
   54 BANK ONE 2003 ANNUAL REPORT




---



##### 



approved limits by customer, product and business that are monitored weekly.
    
    Risk Reporting:Risk reporting covers all lines of business and is
comprehensively provided to management on a weekly basis. Risk Types   
    
    Credit riskis the risk to earnings or capital arising from an obligors
failure to meet the terms of any contract with the Corporation or otherwise
fail to perform as agreed.
    
    Liquidity riskis the risk of loss arising from an institutions inability to meet its obligations when they come due without incurring unacceptable losses.
    
    Market riskis the risk that changes in future market rates or prices will make the Corporations positions less valuable.
    
    Operational riskis the risk of loss resulting from inadequate or failed internal processes, people or systems or from external events.
    
    Reputation riskis the risk to earnings or capital arising from negative
public opinion. This affects the institutions ability to establish new
relationships or services, or continue servicing existing relationships.
    
    Strategic riskis the risk to earnings or capital arising from adverse
business decisions or improper implementation of those decisions.
    
    Compliance riskis the risk to earnings or capital arising from violations
of, or nonconformance with, laws, rules, regulations, prescribed practices, or
ethical standards. 
  CREDIT RISK MANAGEMENT 
  Risk Identification
 Risk Measurement Expected and Unexpected Losses
    Risk-Rated Exposure   Credit-Scored Exposure
   BANK ONE 2003 ANNUAL REPORT 55




---



##### 



Risk Monitoring    Risk Reporting  LIQUIDITY RISK MANAGEMENT 
   
    
    A portfolio of liquid assets, comprised of federal funds sold, deposit placements and marketable securities.
    
    A large customer deposit base arising through the Corporations Commercial Banking and Retail business activities.
    
    A diversified mix of short- and long-term funding sources from the wholesale financial markets.
 
    
    A substantial and growing capital position in excess of regulatory well-capitalized standards.
    
    Significant borrowing capacity at the Federal Reserve discount window. 
    
    
    Strong capital ratios and credit quality
    
    A stable, diverse earnings stream
    
    Diversity of liquidity sources
    
    Strong liquidity monitoring procedures
   At December 31, 2003
    
    Short-Term Debt
    
    Senior Long-Term DebtS & P
    
    Moody's
    
    Fitch
    
    S & P
    
    Moody's
    
    FitchThe Corporation (parent)
    
    A-1
    
    P-1
    
    F1
    
    A
    
    Aa3
    
    A+Principal banks
    
    A-1
    
    P-1
    
    F1+
    
    A+
    
    Aa2
    
    A+
 
 At December 31, 2003
    
    S & P(1)
    
    Moody's
    
    A.M. Best(2)Principal insurance companies
    
    A+
    
    A2
    
    A
 (1)
    
    S&P rating is currently on negative outlook which indicates the potential
direction of the principal insurance companies ratings.(2)
    
    A.M. Best maintained A ratings with developing implications. 56 BANK ONE 2003 ANNUAL REPORT




---



##### 



Risk Identification  Risk Measurement and Monitoring
 Risk Reporting   
    
    Internal liquidity risk metrics
    
    Composition and level of the liquid asset portfolio
    
    Timing differences in short-term cash flow obligations
    
    Available pricing and market access to the financial markets for capital, term-debt and securitization transactions
    
    Exposure to contingent draws on the Corporations liquidity
    
    Liquidity stress testing under systemic and Corporation specific scenarios MARKET RISK MANAGEMENT 
 Market Risk Management  Trading Activities
   BANK ONE 2003 ANNUAL REPORT 57




---



##### 



Risk Identification  Risk Measurement  Value-At-Risk
 
   2003(In millions)
    
    December 31
    
    
    Average
    
    
    High
    
    
    LowHigh Volume Capital Markets Trading Portfolios
and Mortgage Pipeline(1)Risk type:Interest rate
    
    $
    9
    
    
    $
    8
    
    
    $
    15
    
    
    $
    4Commodity price
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Currency exchange rate
    
    
    1
    
    
    
    
    
    
    
    3
    
    
    
    Equity
    
    
    1
    
    
    
    
    
    
    
    1
    
    
    
    Diversification benefit
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    N/ATotal (2)
    
    
    11
    
    
    
    8
    
    
    
    14
    
    
    
    5Other Trading PortfoliosRisk type:Interest rate
    
    
    7
    
    
    
    6
    
    
    
    7
    
    
    
    6Currency exchange rate
    
    
    9
    
    
    
    11
    
    
    
    16
    
    
    
    9Aggregate trading portfolio market risk
    
    $
    27
    
    
    $
    25
    
    
    $
    34
    
    
    $
    20
 58 BANK ONE 2003 ANNUAL REPORT




---



##### 



2002(In millions)
    
    December 31
    
    
    Average
    
    
    High
    
    
    LowHigh Volume Capital Markets Trading Portfolios
and Mortgage Pipeline(1)Risk type:Interest rate
    
    $
    6
    
    
    $
    5
    
    
    $
    7
    
    
    $
    3Commodity price
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    Currency exchange rate
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    Equity
    
    
    1
    
    
    
    1
    
    
    
    2
    
    
    
    Diversification benefit
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    N/ATotal
    
    
    7
    
    
    
    6
    
    
    
    8
    
    
    
    3Other Trading PortfoliosRisk type:Interest rate
    
    
    7
    
    
    
    7
    
    
    
    8
    
    
    
    7Currency exchange rate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Aggregate trading portfolio market risk
    
    $
    14
    
    
    $
    13
    
    
    $
    16
    
    
    $
    11
 N/A
    
    Not applicable(1)
    
    Subject to backtesting.(2)
    
    The total value-at-risk on any given day may be lower than the
value-at-risk for individual risk types due to diversification (i.e., hedging
or offsetting positions).  (BACKTESTING RESULTS GRAPH)
 Stress Testing  Risk Monitoring
   BANK ONE 2003 ANNUAL REPORT 59




---



##### 







Risk Reporting  Market Risk Management  Non-Trading Activities  Risk Identification   Risk Measurement


Risk Monitoring   Risk Reporting  Immediate Change in Rates (1)(In millions)
    
    +200 bp
    
    
    +100 bp
    
    
    -50 bpDecember 31, 2003
    
    $
    35
    
    
    $
    124
    
    
    $
    (161
    )December 31, 2002
    
    $
    (165
    )
    
    $
    100
    
    
    $
    (89
    )
 (1)
    
    At December 31, 2003, given the current rate environment, a -100 bp
interest rate change could result in negative or near zero interest rates, as a
result the -100 bp change has not been included. At December 31, 2002, a -100
bp change in rates resulted in a 12-month pretax earnings sensitivity of ($177)
million.




60 BANK ONE 2003 ANNUAL REPORT





---



##### 



OPERATIONAL RISK MANAGEMENT 
  Risk Identification
 Risk Measurement  Risk Monitoring   Risk Reporting
   BANK ONE 2003 ANNUAL REPORT 61




---



##### 



CREDIT PORTFOLIO COMPOSITION Selected Statistical Information  At and for the year ended December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001
    
    
    
    2000
    
    
    
    1999(Dollars in millions)Loans (1)
    
    $
    138,147
    
    
    $
    148,125
    
    
    $
    156,733
    
    
    $
    174,251
    
    
    $
    163,877Average loans
    
    
    143,722
    
    
    
    150,805
    
    
    
    167,054
    
    
    
    171,768
    
    
    
    156,855Nonperforming loans (2)
    
    
    2,200
    
    
    
    3,276
    
    
    
    3,551
    
    
    
    2,475
    
    
    
    1,559Other, including other real estate owned
    
    
    195
    
    
    
    251
    
    
    
    137
    
    
    
    98
    
    
    
    106Nonperforming assets
    
    
    2,395
    
    
    
    3,527
    
    
    
    3,688
    
    
    
    2,573
    
    
    
    1,665Allowance for loan losses (1)
    
    
    3,472
    
    
    
    3,923
    
    
    
    3,975
    
    
    
    3,636
    
    
    
    1,943Allowance for credit losses (1)
    
    
    3,962
    
    
    
    4,525
    
    
    
    4,528
    
    
    
    4,110
    
    
    
    2,285Net charge-offs
    
    
    2,608
    
    
    
    2,465
    
    
    
    2,288
    
    
    
    1,391
    
    
    
    1,206Nonperforming assets to related assets (3)
    
    
    1.73
    %
    
    
    2.38
    %
    
    
    2.35
    %
    
    
    1.48
    %
    
    
    1.02
    %Allowance for loan losses to period end loans (1)
    
    
    2.75
    
    
    
    2.78
    
    
    
    2.61
    
    
    
    2.14
    
    
    
    1.21Allowance for loan losses to nonperforming loans (2)
    
    
    178
    
    
    
    121
    
    
    
    112
    
    
    
    147
    
    
    
    125Allowance for credit losses to period end loans (1)
    
    
    3.14
    
    
    
    3.20
    
    
    
    2.97
    
    
    
    2.42
    
    
    
    1.42Allowance for credit losses to nonperforming loans (2)
    
    
    203
    
    
    
    139
    
    
    
    128
    
    
    
    166
    
    
    
    147Net charge-offs to average loans (4)
    
    
    1.82
    
    
    
    1.63
    
    
    
    1.37
    
    
    
    0.81
    
    
    
    0.77Allowance for loan losses to net charge-offs
    
    
    133
    
    
    
    159
    
    
    
    174
    
    
    
    261
    
    
    
    161
 (1)
    
    Includes loans held for sale of $12.0 billion, $6.9 billion, $4.2 billion,
$4.2 billion and $3.3 billion at December 31, 2003, 2002, 2001, 2000 and 1999.
These amounts are not included in allowance coverage statistics.(2)
    
    Includes loans held for sale of $244 million and $22 million for the years
ended December 31, 2003 and 2002, respectively. There were no nonperforming
loans included in loans held for sale at December 31, 2001, 2000 and 1999.
These amounts are not included in allowance coverage statistics.(3)
    
    Related assets consist of loans outstanding, including loans held for sale
and other real estate owned.(4)
    
    Includes net charge-offs related to held for sale credit card loans of
$3 million for the year ended December 31, 2003, which are recorded in
noninterest income. Loan Composition   At December 31,
    
    2003
    
    2002
    
    2001
    
    2000(Dollars in millions)
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    PercentRetail:(1)Small business commercial
    
    $
    10,216
    
    
    
    8
    %
    
    $
    9,921
    
    
    
    7
    %
    
    $
    9,749
    
    
    
    7
    %
    
    $
    8,901
    
    
    
    5
    %Home equity
    
    
    26,432
    
    
    
    19
    
    
    
    20,853
    
    
    
    14
    
    
    
    15,826
    
    
    
    10
    
    
    
    13,164
    
    
    
    8Vehicle
    
    
    13,571
    
    
    
    10
    
    
    
    14,661
    
    
    
    10
    
    
    
    14,278
    
    
    
    9
    
    
    
    14,300
    
    
    
    8Other personal
    
    
    6,016
    
    
    
    4
    
    
    
    6,869
    
    
    
    4
    
    
    
    8,069
    
    
    
    5
    
    
    
    10,674
    
    
    
    6Total Retail
    
    
    56,235
    
    
    
    41
    
    
    
    52,304
    
    
    
    35
    
    
    
    47,922
    
    
    
    31
    
    
    
    47,039
    
    
    
    27Commercial Banking:Corporate banking:Commercial and industrial
    
    
    13,213
    
    
    
    10
    
    
    
    17,866
    
    
    
    12
    
    
    
    22,268
    
    
    
    14
    
    
    
    N/ACommercial real estate
    
    
    8,818
    
    
    
    6
    
    
    
    8,321
    
    
    
    6
    
    
    
    8,975
    
    
    
    6
    
    
    
    N/ALease financing
    
    
    4,151
    
    
    
    3
    
    
    
    4,358
    
    
    
    3
    
    
    
    4,669
    
    
    
    3
    
    
    
    N/AOther
    
    
    941
    
    
    
    1
    
    
    
    1,014
    
    
    
    
    
    
    
    731
    
    
    
    
    
    
    
    N/ATotal corporate banking
    
    
    27,123
    
    
    
    20
    
    
    
    31,559
    
    
    
    21
    
    
    
    36,643
    
    
    
    23
    
    
    
    51,700
    
    
    
    30Middle market:Commercial and industrial
    
    
    23,675
    
    
    
    17
    
    
    
    26,983
    
    
    
    18
    
    
    
    31,116
    
    
    
    20
    
    
    
    N/ACommercial real estate
    
    
    1,993
    
    
    
    1
    
    
    
    2,318
    
    
    
    2
    
    
    
    3,472
    
    
    
    2
    
    
    
    N/ALease financing
    
    
    820
    
    
    
    1
    
    
    
    1,008
    
    
    
    1
    
    
    
    1,053
    
    
    
    1
    
    
    
    N/AOther
    
    
    141
    
    
    
    
    
    
    
    27
    
    
    
    
    
    
    
    294
    
    
    
    
    
    
    
    N/ATotal middle market
    
    
    26,629
    
    
    
    19
    
    
    
    30,336
    
    
    
    21
    
    
    
    35,935
    
    
    
    23
    
    
    
    36,159
    
    
    
    21Total Commercial Banking
    
    
    53,752
    
    
    
    39
    
    
    
    61,895
    
    
    
    42
    
    
    
    72,578
    
    
    
    46
    
    
    
    87,859
    
    
    
    51Card Services
    
    
    12,035
    
    
    
    9
    
    
    
    11,581
    
    
    
    8
    
    
    
    6,786
    
    
    
    4
    
    
    
    4,744
    
    
    
    3Investment Management
Group(1)
    
    
    7,380
    
    
    
    5
    
    
    
    6,942
    
    
    
    5
    
    
    
    7,116
    
    
    
    5
    
    
    
    7,014
    
    
    
    4Corporate (1)
    
    
    8,745
    
    
    
    6
    
    
    
    15,403
    
    
    
    10
    
    
    
    22,331
    
    
    
    14
    
    
    
    27,595
    
    
    
    15Total
    
    $
    138,147
    
    
    
    100
    %
    
    $
    148,125
    
    
    
    100
    %
    
    $
    156,733
    
    
    
    100
    %
    
    $
    174,251
    
    
    
    100
    %
 (1)
    
    Prior period amounts have been reclassified for the transfer of the
non-core portfolios and the community development business from the Retail line
of business and corporate trust from the Investment Management Group line of
business to the Corporate line of business. 62 BANK ONE 2003 ANNUAL REPORT




---



##### 



At December 31,
    
    2000
    
    1999(Dollars in millions)
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    PercentCommercial:Domestic:Commercial
    
    $
    65,270
    
    
    
    38
    %
    
    $
    59,070
    
    
    
    36
    %Real estate:Construction
    
    
    5,757
    
    
    
    3
    
    
    
    5,836
    
    
    
    4Other
    
    
    16,778
    
    
    
    10
    
    
    
    18,817
    
    
    
    11Lease financing
    
    
    5,818
    
    
    
    3
    
    
    
    5,562
    
    
    
    3Foreign
    
    
    6,837
    
    
    
    4
    
    
    
    7,067
    
    
    
    4Total commercial
    
    
    100,460
    
    
    
    58
    
    
    
    96,352
    
    
    
    58Consumer:Residential real estate
    
    
    40,596
    
    
    
    23
    
    
    
    32,313
    
    
    
    20Automotive-loans/leases
    
    
    20,741
    
    
    
    12
    
    
    
    23,567
    
    
    
    14Other
    
    
    7,710
    
    
    
    4
    
    
    
    7,608
    
    
    
    5Total consumer
    
    
    69,047
    
    
    
    39
    
    
    
    63,488
    
    
    
    39Card Services
    
    
    4,744
    
    
    
    3
    
    
    
    4,037
    
    
    
    3Total
    
    $
    174,251
    
    
    
    100
    %
    
    $
    163,877
    
    
    
    100
    %
  Managed Credit Card Receivables (Non-GAAP)   At December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001(Dollars in millions)Average balances:Credit card loans
    
    $
    14,112
    
    
    $
    9,899
    
    
    $
    6,884Credit card receivables
transferred to trusts
    
    
    59,720
    
    
    
    57,969
    
    
    
    58,563Total average managed
credit card receivables
    
    
    73,832
    
    
    
    67,868
    
    
    
    65,447Total managed net charge-offs
(including securitizations)
    
    $
    3,919
    
    
    $
    3,632
    
    
    $
    3,823Net charge-offs/average
total receivables
    
    
    5.31
    %
    
    
    5.35
    %
    
    
    5.84
    %Card Services delinquency
rate at period-end30+ days
    
    
    3.90
    
    
    
    4.02
    
    
    
    4.4690+ days
    
    
    1.85
    
    
    
    1.80
    
    
    
    1.93
 
   BANK ONE 2003 ANNUAL REPORT 63




---



##### 



Retail    Corporate Non-Core Portfolios  Commercial Banking
 Commercial and Industrial Loans   At December 31, 2003(Dollars in millions)
    
    Outstanding
    
        
    Percent(1)Motor vehicles and parts/auto related
    
    $
    3,798
    
    
    
    10.3
    %Wholesale trade
    
    
    3,048
    
    
    
    8.3Oil and gas
    
    
    2,518
    
    
    
    6.8Government and not-for-profit
    
    
    2,170
    
    
    
    5.9Business finance and leasing
    
    
    2,058
    
    
    
    5.6Other (2)
    
    
    23,296
    
    
    
    63.1Total
    
    $
    36,888
    
    
    
    100
    %
 (1)
    
    Total outstanding by industry concentration as a percentage of total
commercial and industrial loans.(2)
    
    Includes 35 industry concentrations. Commercial Real Estate
   64 BANK ONE 2003 ANNUAL REPORT




---



##### 



At December 31, 2003
    
    Outstanding(Dollars in millions)
    
    
    
    
    
    Percent ofBy Collateral Location:
    
    Amount
    
    
    PortfolioCalifornia
    
    $
    1,170
    
    
    
    11
    %Illinois
    
    
    903
    
    
    
    8Michigan
    
    
    895
    
    
    
    8Texas
    
    
    888
    
    
    
    8Ohio
    
    
    745
    
    
    
    7Arizona
    
    
    625
    
    
    
    6Kentucky
    
    
    331
    
    
    
    3Louisiana
    
    
    324
    
    
    
    3Indiana
    
    
    295
    
    
    
    3Colorado
    
    
    276
    
    
    
    3Other areas
    
    
    1,408
    
    
    
    13Unsecured
    
    
    1,843
    
    
    
    17Secured by other than
commercial real estate
    
    
    1,108
    
    
    
    10Total
    
    $
    10,811
    
    
    
    100
    %Percent ofBy Property Type:
    
    Amount
    
    
    PortfolioOffice
    
    $
    1,879
    
    
    
    17
    %Retail
    
    
    1,755
    
    
    
    16Apartment
    
    
    1,627
    
    
    
    15Single family residential development
    
    
    1,428
    
    
    
    13Industrial/warehouse
    
    
    1,258
    
    
    
    12Residential lots
    
    
    570
    
    
    
    5Hotels
    
    
    404
    
    
    
    4Other commercial income producing
    
    
    1,727
    
    
    
    16Other residential developments
    
    
    163
    
    
    
    2Total
    
    $
    10,811
    
    
    
    100
    %
 ASSET QUALITY Nonperforming Assets   
    
    Retail consumer loans are placed on nonaccrual status when the collection of
contractual principal or interest becomes 90 days past due. Accrued but
uncollected interest and fee income are reversed and charged against interest
income when the consumer loan is placed on nonaccrual status. Subsequent cash
collections are recognized as interest income unless the consumer loan is
subsequently charged-off, in which case cash collections are recognized as
recoveries.
    
    Commercial Banking and Retail small business commercial loans are placed on
nonaccrual status when the collection of contractual principal or interest is
deemed doubtful, or it becomes 90 days or more past due and is not both
well-secured and in the process of collection. Accrued but uncollected interest
and fee income are reversed and charged against interest income when placed on
nonaccrual status. Cash interest payments received are recognized either as
interest income or as a reduction of principal when collection of principal is
doubtful. The loan is returned to accrual status only when all of the principal
and interest amounts contractually due are reasonably assured within a
reasonable time frame and when the borrower has demonstrated payment
performance.
    
    Credit card receivables are not placed on nonaccrual status. However, a
reserve is established for the amount of accrued finance charges and fees which
are deemed uncollectible.
     At December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001
    
    
    
    2000(Dollars in millions)Nonperforming Loans:Retail (1)
    
    $
    540
    
    
    $
    535
    
    
    $
    596
    
    
    $
    484Commercial Banking:Corporate banking
    
    
    321
    
    
    
    873
    
    
    
    1,154
    
    
    
    1,065Middle market banking
    
    
    715
    
    
    
    1,001
    
    
    
    973
    
    
    
    459Total Commercial Banking
    
    
    1,036
    
    
    
    1,874
    
    
    
    2,127
    
    
    
    1,524Investment Management Group (1)
    
    
    42
    
    
    
    71
    
    
    
    42
    
    
    
    40Corporate (1)
    
    
    582
    
    
    
    796
    
    
    
    786
    
    
    
    427Total nonperforming loans (2) (3)
    
    
    2,200
    
    
    
    3,276
    
    
    
    3,551
    
    
    
    2,475Other, including other real estate owned
    
    
    195
    
    
    
    251
    
    
    
    137
    
    
    
    98Total nonperforming assets
    
    $
    2,395
    
    
    $
    3,527
    
    
    $
    3,688
    
    
    $
    2,573Nonperforming assets to related assets (4)
    
    
    1.73
    %
    
    
    2.38
    %
    
    
    2.35
    %
    
    
    1.48
    %Loans 90-days or more past due and accruing interest:Card Services
    
    $
    186
    
    
    $
    160
    
    
    $
    96
    
    
    $
    57Other
    
    
    
    
    
    
    1
    
    
    
    1
    
    
    
    5Total
    
    $
    186
    
    
    $
    161
    
    
    $
    97
    
    
    $
    62
 (1)
    
    Prior period amounts have been reclassified for the transfer of the
non-core portfolios and the community development business from the Retail line
of business and corporate trust from the Investment Management Group line of
business to the Corporate line of business.(2)
    
    Nonperforming loans at December 31, 2003 and 2002 include $244 million and
$22 million of loans held for sale, respectively. There were no nonperforming
loans included in held for sale at December 31, 2001 or 2000.(3)
    
    The amount of interest on nonperforming loans that was contractually due in
2003 totaled $175 million. Of this amount, $69 million was recognized in
interest income in 2003.(4)
    
    Related assets consist of loans outstanding, including loans held for sale,
and other real estate owned. BANK ONE 2003 ANNUAL REPORT 65




---



##### 



Charge-Offs   
    
    Commercial loans are charged-off in the reporting period in which either an
event occurs that confirms the existence of a loss or it is determined that a
loan or a portion of a loan is uncollectible.
    
    A credit card loan is charged-off in the month it becomes contractually 180
days past due and remains unpaid at the end of that month, or 60 days after
notification of bankruptcy or death. Interest on credit card loans is accrued
until the loan is charged-off. The Corporation maintains a reserve for the
portion of interest and fees that it deems uncollectible. At the time of
charge-off, accrued but uncollected interest and fees are charged against this
reserve. Subsequent cash collections are recorded as recoveries. Beginning in
2003, recoveries of previously charged-off interest and fees are recorded as
interest income.
    
    Consumer loans, excluding credit card, are generally charged-off following a
delinquency period of 120 days, or within 60 days for unsecured Retail loans
after receipt of notification in cases of bankruptcy. Closed-end consumer
loans, such as auto loans and leases and home mortgage loans, are typically
written down to the extent of loss after considering the net realizable value
of the collateral.
    For the Year EndedDecember 31,
    
    2003
    
    2002
    
    2001Net
    
    
    
    
    
    
    Net
    
    
    Net
    
    
    
    
    
    
    Net
    
    
    Net
    
    
    
    
    
    
    Netcharge-
    
    
    Average
    
    
    charge-
    
    
    charge-
    
    
    Average
    
    
    charge-
    
    
    charge-
    
    
    Average
    
    
    charge-(Dollars in millions)
    
    offs
    
    
    balance
    
    
    off rate
    
    
    offs
    
    
    balance
    
    
    off rate
    
    
    offs
    
    
    balance
    
    
    off rateRetail (1)
    
    $
    507
    
    
    $
    53,969
    
    
    
    0.94
    %
    
    $
    494
    
    
    $
    49,131
    
    
    
    1.01
    %
    
    $
    399
    
    
    $
    47,671
    
    
    
    0.84
    %Commercial Banking:Corporate banking
    
    
    228
    
    
    
    28,536
    
    
    
    0.80
    
    
    
    639
    
    
    
    32,973
    
    
    
    1.94
    
    
    
    638
    
    
    
    43,495
    
    
    
    1.47Middle market banking
    
    
    170
    
    
    
    28,119
    
    
    
    0.60
    
    
    
    355
    
    
    
    32,996
    
    
    
    1.08
    
    
    
    404
    
    
    
    36,810
    
    
    
    1.09Total Commercial
Banking
    
    
    398
    
    
    
    56,655
    
    
    
    0.70
    
    
    
    994
    
    
    
    65,969
    
    
    
    1.51
    
    
    
    1,042
    
    
    
    80,305
    
    
    
    1.30Card Services
    
    
    707
    
    
    
    14,112
    
    
    
    5.03
    (2)
    
    
    514
    
    
    
    9,899
    
    
    
    5.19
    
    
    
    392
    
    
    
    6,884
    
    
    
    5.69Investment Management
Group (1)
    
    
    12
    
    
    
    6,809
    
    
    
    0.18
    (2)
    
    
    20
    
    
    
    6,969
    
    
    
    0.29
    
    
    
    34
    
    
    
    6,952
    
    
    
    0.49Corporate (1)
    
    
    984
    
    
    
    12,177
    
    
    
    8.08
    
    
    
    443
    
    
    
    18,838
    
    
    
    2.35
    
    
    
    421
    
    
    
    25,242
    
    
    
    1.67Total
    
    $
    2,608
    
    
    $
    143,722
    
    
    
    1.82
    %
    
    $
    2,465
    
    
    $
    150,806
    
    
    
    1.63
    %
    
    $
    2,288
    
    
    $
    167,054
    
    
    
    1.37
    %
 (1)
    
    Prior period amounts have been reclassified for the transfer of the
non-core portfolios and the community development business from the Retail line
of business and corporate trust from the Investment Management Group line of
business to the Corporate line of business.(2)
    
    Includes net charge-offs related to held for sale loans of $3 million for
the year ended December 31, 2003, which are recorded in noninterest income. 66 BANK ONE 2003 ANNUAL REPORT




---



##### 



Loan Sales  For the Year Ended December 31,
    
    
    2003
    
    
    
    2002(In millions)Loans sold and loans transferred
to loans held for sale: (1)Nonperforming loans
    
    $
    271
    
    
    $
    469Other loans with
credit related losses
    
    
    663
    
    
    
    415Other loans
    
    
    223
    
    
    
    713Total
    
    $
    1,157
    
    
    $
    1,597Impact 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:Nonperforming loans
    
    $
    36
    
    
    $
    92Other loans with
credit related losses
    
    
    48
    
    
    
    42Total charge-offs to allowance
    
    
    84
    
    
    
    134(Gains) losses on loans sold
and held for sale
    
    
    (81
    )
    
    
    35Total
    
    $
    3
    
    
    $
    169
 (1)
    
    December 31, 2003 data includes loans reclassified to loans held for sale
that are not yet sold of approximately $3 million and $541 million in
non-performing loans and other loans, respectively.
 ALLOWANCE FOR LOAN AND CREDIT LOSSES
   BANK ONE 2003 ANNUAL REPORT 67




---



##### 



For the Year Ended December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001
    
    
    
    2000(In millions)Balance, beginning of year
    
    $
    3,923
    
    
    $
    3,975
    
    
    $
    3,636
    
    
    $
    1,943Charge-offs:Retail:(1)Small business commercial
    
    
    81
    
    
    
    93
    
    
    
    92
    
    
    
    66Home equity
    
    
    142
    
    
    
    105
    
    
    
    68
    
    
    
    38Vehicle
    
    
    271
    
    
    
    288
    
    
    
    227
    
    
    
    224Other personal
    
    
    137
    
    
    
    130
    
    
    
    144
    
    
    
    127Total Retail
    
    
    631
    
    
    
    616
    
    
    
    531
    
    
    
    455Commercial Banking:Corporate banking:Commercial and industrial
    
    
    243
    
    
    
    541
    
    
    
    689
    
    
    N/ACommercial real estate
    
    
    16
    
    
    
    35
    
    
    
    15
    
    
    N/ALease financing
    
    
    57
    
    
    
    135
    
    
    
    16
    
    
    N/ATotal corporate banking
    
    
    316
    
    
    
    711
    
    
    
    720
    
    
    
    469Middle market:Commercial and industrial
    
    
    257
    
    
    
    377
    
    
    
    418
    
    
    N/ACommercial real estate
    
    
    13
    
    
    
    21
    
    
    
    8
    
    
    N/ALease financing
    
    
    9
    
    
    
    30
    
    
    
    36
    
    
    N/ATotal middle market
    
    
    279
    
    
    
    428
    
    
    
    462
    
    
    
    157Total Commercial Banking
    
    
    595
    
    
    
    1,139
    
    
    
    1,182
    
    
    
    626Card Services
    
    
    785
    
    
    
    565
    
    
    
    415
    
    
    
    261Investment Management Group (1)
    
    
    26
    
    
    
    29
    
    
    
    42
    
    
    
    N/ACorporate (1)
    
    
    1,026
    (3)
    
    
    480
    
    
    
    460
    
    
    
    N/ATotal charge-offs
    
    
    3,063
    
    
    
    2,829
    
    
    
    2,630
    
    
    
    1,667Recoveries:Retail:(1)Small business commercial
    
    
    23
    
    
    
    20
    
    
    
    22
    
    
    
    22Home equity
    
    
    18
    
    
    
    16
    
    
    
    14
    
    
    
    10Vehicle
    
    
    55
    
    
    
    60
    
    
    
    67
    
    
    
    67Other personal
    
    
    28
    
    
    
    26
    
    
    
    29
    
    
    
    35Total Retail
    
    
    124
    
    
    
    122
    
    
    
    132
    
    
    
    134Commercial Banking:Corporate banking:Commercial and industrial
    
    
    80
    
    
    
    66
    
    
    
    74
    
    
    N/ACommercial real estate
    
    
    6
    
    
    
    6
    
    
    
    8
    
    
    N/ALease financing
    
    
    2
    
    
    
    
    
    
    
    
    
    
    N/ATotal corporate banking
    
    
    88
    
    
    
    72
    
    
    
    82
    
    
    
    36Middle market:Commercial and industrial
    
    
    103
    
    
    
    65
    
    
    
    49
    
    
    N/ACommercial real estate
    
    
    2
    
    
    
    4
    
    
    
    1
    
    
    N/ALease financing
    
    
    4
    
    
    
    4
    
    
    
    8
    
    
    N/ATotal middle market
    
    
    109
    
    
    
    73
    
    
    
    58
    
    
    
    28Total Commercial Banking
    
    
    197
    
    
    
    145
    
    
    
    140
    
    
    
    64Card Services
    
    
    78
    
    
    
    51
    
    
    
    23
    
    
    
    14Investment Management Group (1)
    
    
    14
    
    
    
    9
    
    
    
    8
    
    
    
    N/ACorporate (1)
    
    
    42
    
    
    
    37
    
    
    
    39
    
    
    
    N/ATotal recoveries
    
    
    455
    
    
    
    364
    
    
    
    342
    
    
    
    276Net charge-offs:Retail (1)
    
    
    507
    
    
    
    494
    
    
    
    399
    
    
    
    321Commercial Banking
    
    
    398
    
    
    
    994
    
    
    
    1,042
    
    
    
    562Card Services
    
    
    707
    
    
    
    514
    
    
    
    392
    
    
    
    247Investment Management Group (1)
    
    
    12
    
    
    
    20
    
    
    
    34
    
    
    
    N/ACorporate (1)
    
    
    984
    
    
    
    443
    
    
    
    421
    
    
    
    N/ATotal net charge-offs
    
    
    2,608
    
    
    
    2,465
    
    
    
    2,288
    
    
    
    1,391Provision for loan losses
    
    
    2,157
    
    
    
    2,438
    
    
    
    2,431
    
    
    
    3,266Transfers (2)
    
    
    
    
    
    
    (25
    )
    
    
    196
    
    
    
    (182
    )Balance, end of year
    
    $
    3,472
    
    
    $
    3,923
    
    
    $
    3,975
    
    
    $
    3,636
 N/A
    
    Not available(1)
    
    Prior period amounts have been reclassified for the transfer of the
non-core portfolios and the community development business from the Retail line
of business and corporate trust from the Investment Management Group line of
business to the Corporate line of business.(2)
    
    Transfers to the allowance for loan losses in 2001 primarily represent the
addition of the Wachovia credit card portfolio. Transfers from the allowance
for loan losses for 2000 primarily represents allocable credit allowances
associated with consumer loan sale transactions, including securitization
transactions. 68 BANK ONE 2003 ANNUAL REPORT




---



##### 



For the Year Ended December 31,
    
    
    2000
    
    
    
    1999(In millions)Balance, beginning of year
    
    $
    1,943
    
    
    $
    1,929Charge-offs:Commercial:Domestic:Commercial
    
    
    618
    
    
    
    325Real estate:Construction
    
    
    8
    
    
    
    5Other
    
    
    11
    
    
    
    27Lease financing
    
    
    7
    
    
    
    12Foreign
    
    
    64
    
    
    
    41Total commercial
    
    
    708
    
    
    
    410Consumer:Residential real estate
    
    
    230
    
    
    
    189Automotive:Loans
    
    
    215
    
    
    
    256Leases
    
    
    91
    
    
    
    87Other
    
    
    162
    
    
    
    203Total consumer
    
    
    698
    
    
    
    735Card Services
    
    
    261
    
    
    
    386Total charge-offs
    
    
    1,667
    
    
    
    1,531Recoveries:Commercial:Domestic:Commercial
    
    
    98
    
    
    
    70Real estate:Construction
    
    
    1
    
    
    
    6Other
    
    
    4
    
    
    
    25Lease financing
    
    
    1
    
    
    
    2Foreign
    
    
    7
    
    
    
    1Total commercial
    
    
    111
    
    
    
    104Consumer:Residential real estate
    
    
    17
    
    
    
    12Automotive:Loans
    
    
    69
    
    
    
    82Leases
    
    
    21
    
    
    
    23Other
    
    
    44
    
    
    
    60Total consumer
    
    
    151
    
    
    
    177Card Services
    
    
    14
    
    
    
    44Total recoveries
    
    
    276
    
    
    
    325Net charge-offs:Commercial
    
    
    597
    
    
    
    306Consumer
    
    
    547
    
    
    
    558Card Services
    
    
    247
    
    
    
    342Total net charge-off
    
    
    1,391
    
    
    
    1,206Provision for loan losses
    
    
    3,266
    
    
    
    1,249Transfers (1)
    
    
    (182
    )
    
    
    (29
    )Balance, end of year
    
    $
    3,636
    
    
    $
    1,943
 (1)
    
    Transfers from the allowance for loan losses primarily represent allocable
credit allowances associated with consumer loan sale transactions, including
securitization transactions. BANK ONE 2003 ANNUAL REPORT 69




---



##### 



Composition of Allowance for Loan Losses  At December 31,
    
    2003
    
    2002
    
    2001
    
    2000(Dollars in millions)
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    PercentRetail
    
    $
    677
    
    
    
    20
    %
    
    $
    679
    
    
    
    17
    %
    
    $
    681
    
    
    
    17
    %
    
    $
    434
    
    
    
    12
    %Commercial Banking:Corporate banking
    
    
    1,012
    
    
    
    29
    
    
    
    1,331
    
    
    
    34
    
    
    
    1,367
    
    
    
    34
    
    
    
    1,408
    
    
    
    39Middle market
    
    
    1,149
    
    
    
    33
    
    
    
    1,138
    
    
    
    29
    
    
    
    1,159
    
    
    
    29
    
    
    
    1,172
    
    
    
    32Total Commercial
Banking
    
    
    2,161
    
    
    
    62
    
    
    
    2,469
    
    
    
    63
    
    
    
    2,526
    
    
    
    63
    
    
    
    2,580
    
    
    
    71Card Services
    
    
    446
    
    
    
    13
    
    
    
    396
    
    
    
    10
    
    
    
    396
    
    
    
    10
    
    
    
    197
    
    
    
    5Investment Management
Group
    
    
    40
    
    
    
    1
    
    
    
    40
    
    
    
    1
    
    
    
    25
    
    
    
    1
    
    
    
    22
    
    
    
    1Corporate
    
    
    148
    
    
    
    4
    
    
    
    339
    
    
    
    9
    
    
    
    347
    
    
    
    9
    
    
    
    403
    
    
    
    11Total
    
    $
    3,472
    
    
    
    100
    %
    
    $
    3,923
    
    
    
    100
    %
    
    $
    3,975
    
    
    
    100
    %
    
    $
    3,636
    
    
    
    100
    %
  At December 31,
    
    2000
    
    1999(Dollars in millions)
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    PercentCommercial(1)
    
    $
    2,725
    
    
    
    75
    %
    
    $
    630
    
    
    
    32
    %Consumer
    
    
    714
    
    
    
    20
    
    
    
    486
    
    
    
    25Card Services
    
    
    197
    
    
    
    5
    
    
    
    148
    
    
    
    8Unallocated
    
    
    
    
    
    
    
    
    
    
    679
    
    
    
    35Total
    
    $
    3,636
    
    
    
    100
    %
    
    $
    1,943
    
    
    
    100
    %
  (1)
    
    Includes allowance related to Business and Community Banking loans, which
are included in the Retail business segment results. Components of Allowance for Credit Losses    At December 31,
    
    
    2003
    
    
    
    2002(In millions)Asset-specific
    
    $
    305
    
    
    $
    551Expected loss
    
    
    1,793
    
    
    
    2,425Stress
    
    
    1,374
    
    
    
    947Total components(1)
    
    $
    3,472
    
    
    $
    3,923
 (1)
    
    The underlying assumptions, estimates and assessments made by management to
determine the components of the allowance for loan losses are continually
evaluated by management and updated to reflect managements judgments regarding
economic conditions and various relevant factors impacting credit quality and
inherent losses.
 Portfolio Stress-Tests
   70 BANK ONE 2003 ANNUAL REPORT




---



##### 



DERIVATIVE FINANCIAL INSTRUMENTS   Trading Derivative Instruments
 Asset and Liability Management
Hedging Derivative Instruments    Fair Value Hedges
   BANK ONE 2003 ANNUAL REPORT 71




---



##### 



Cash Flow Hedges  Financial Presentation
 Asset and Liability Management
Maturities and Rates
   At December 31, 2003
    
    
    2004
    
    
    
    2005
    
    
    
    2006
    
    
    
    2007
    
    
    
    2008
    
    
    Thereafter
    
    
    Total(Dollars in millions)Receive fixed/pay floating swaps:(1)Notional amount
    
    $
    1,700
    
    
    $
    
    
    
    $
    30
    
    
    $
    
    
    
    $
    3,000
    
    
    $
    4,875
    
    
    $
    9,605Weighted average:Receive rate
    
    
    1.40
    %
    
    
    
    %
    
    
    2.80
    %
    
    
    
    %
    
    
    2.92
    %
    
    
    4.76
    %
    
    
    3.59
    %Pay rate
    
    
    1.16
    
    
    
    
    
    
    
    1.17
    
    
    
    
    
    
    
    1.16
    
    
    
    1.17
    
    
    
    1.16Pay fixed/receive floating swaps:(1)Notional amount
    
    $
    2,970
    
    
    $
    3,582
    
    
    $
    2,420
    
    
    $
    3,411
    
    
    $
    4,084
    
    
    $
    4,000
    
    
    $
    20,467Weighted average:Receive rate
    
    
    1.17
    %
    
    
    1.16
    %
    
    
    1.19
    %
    
    
    1.18
    %
    
    
    1.17
    %
    
    
    0.99
    %
    
    
    1.14
    %Pay rate
    
    
    3.67
    
    
    
    4.12
    
    
    
    4.02
    
    
    
    3.86
    
    
    
    4.12
    
    
    
    4.10
    
    
    
    3.99Total notional amount(2)
    
    $
    4,670
    
    
    $
    3,582
    
    
    $
    2,450
    
    
    $
    3,411
    
    
    $
    7,084
    
    
    $
    8,875
    
    
    $
    30,072
 (1)
    
    Variable interest rates  which generally are the one-month, three-month
and six-month London interbank offered rates (LIBOR) in effect on the date of
repricing.(2)
    
    Excludes $880 million notional (U.S. dollar) cross-currency swaps hedging
non-U.S. dollar denominated debt.  Mortgage Banking Hedging Activity
 Hedging Foreign Currency Exposure
   72 BANK ONE 2003 ANNUAL REPORT




---



##### 



Credit Exposure Resulting from
Derivative Financial Instruments    At December 31,
    
    
    2003
    
    
    
    2002(In millions)Gross replacement cost
    
    $
    23,436
    
    
    $
    22,066Less: Adjustment due to master netting agreements
    
    
    18,228
    
    
    
    17,793Balance sheet credit exposure
    
    $
    5,208
    
    
    $
    4,273
 LOAN SECURITIZATIONS AND
OFF-BALANCE SHEET ACTIVITIES Loan Securitizations
 
   At December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001
    
    
    
    2000
    
    
    
    1999(In millions)Owned credit card loans  held in portfolio
    
    $
    6,447
    
    
    $
    7,592
    
    
    $
    5,040
    
    
    $
    2,835
    
    
    $
    2,369Owned credit card loans  held for sale
    
    
    5,588
    
    
    
    3,989
    
    
    
    1,746
    
    
    
    1,909
    
    
    
    1,668Sellers interest in credit card loans
and accrued interest receivable
    
    
    27,193
    
    
    
    28,526
    
    
    
    24,019
    
    
    
    22,446
    
    
    
    19,680Total credit card receivables reflected on balance sheet
    
    
    39,228
    
    
    
    40,107
    
    
    
    30,805
    
    
    
    27,190
    
    
    
    23,717Securities sold to investors and removed from balance sheet
    
    
    37,100
    
    
    
    33,889
    
    
    
    37,350
    
    
    
    39,795
    
    
    
    45,639Managed credit card loans
    
    $
    76,328
    
    
    $
    73,996
    
    
    $
    68,155
    
    
    $
    66,985
    
    
    $
    69,356
  At December 31,
    
    
    2004
    
    
    
    2005
    
    
    
    2006
    
    
    
    2007
    
    
    
    2008
    
    
    Thereafter(In millions)Securitized Loans
    
    $
    9,482
    
    
    $
    5,053
    
    
    $
    8,187
    
    
    $
    4,392
    
    
    $
    8,061
    
    
    $
    1,925
 BANK ONE 2003 ANNUAL REPORT 73




---



##### 



Off-Balance Sheet Activities
 Credit-Related Financial Instruments
   At December 31, 2003
    
    Amount of Commitment Expiration Per PeriodLess Than
    
    
    
    1 - 3
    
    
    
    3 - 5
    
    
    More than(In millions)
    
    Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    5 YearsUnused credit card lines
    
    $
    348,037
    
    
    $
    348,037
    
    
    $
    
    
    
    $
    
    
    
    $
    Unused loan commitments
    
    
    109,001
    
    
    
    72,121
    
    
    
    25,613
    
    
    
    10,804
    
    
    
    463Standby letters of credit and foreign office guarantees
    
    
    25,874
    
    
    
    17,851
    
    
    
    5,584
    
    
    
    2,115
    
    
    
    324Commercial letters of credit
    
    
    840
    
    
    
    840
    
    
    
    
    
    
    
    
    
    
    
    
   Long-Term Contractual Obligations  At December 31, 2003
    
    Payments due by periodLess than
    
    
    
    1 - 3
    
    
    
    3 - 5
    
    
    More than(In millions)
    
    Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    5 YearsCertificates of deposit of $100,000 and over
    
    $
    9,160
    
    
    $
    3,500
    
    
    $
    4,103
    
    
    $
    1,172
    
    
    $
    385Long-term debt, including capital lease obligations(1)
    
    
    46,764
    
    
    
    8,977
    
    
    
    16,516
    
    
    
    11,263
    
    
    
    10,008Operating lease obligations
    
    
    1,806
    
    
    
    219
    
    
    
    394
    
    
    
    314
    
    
    
    879Purchase obligations
    
    
    1,906
    
    
    
    836
    
    
    
    639
    
    
    
    167
    
    
    
    264Obligations under affinity and co-brand programs (2)
    
    
    5,332
    
    
    
    925
    
    
    
    2,033
    
    
    
    1,948
    
    
    
    426Pension, postretirement liabilities and other related
    
    
    596
    
    
    
    167
    
    
    
    53
    
    
    
    35
    
    
    
    341Other long-term liabilities (3)
    
    
    808
    
    
    
    513
    
    
    
    33
    
    
    
    132
    
    
    
    130Total
    
    $
    66,372
    
    
    $
    15,137
    
    
    $
    23,771
    
    
    $
    15,031
    
    
    $
    12,433
 (1)
    
    Includes trust preferred securities.(2)
    
    Obligations under affinity and co-brand programs represent contractual
obligations with affinity and co-brand partners under the Corporations various
credit card programs.(3)
    
    Includes non-contingent life insurance products, annuities and insurance
related deposits.  
 Asset-Backed Finance Programs
   74 BANK ONE 2003 ANNUAL REPORT




---



##### 



At December 31,
    
    2003
    
    2002Liquidity
    
    
    
    
    
    
    
    
    
    
    LiquidityFacility
    
    
    
    
    
    
    
    
    
    
    FacilityTotal
    
    
    provided
    
    
    
    
    
    
    Total
    
    
    providedLiquidity
    
    
    by the
    
    
    
    
    
    
    Liquidity
    
    
    by the(Dollars in billions)
    
    Facility
    
    
    Corporation
    
    
    Percent
    
    
    Facility
    
    
    Corporation
    
    
    PercentTotal multi-seller conduits
    
    $
    48.1
    
    
    $
    43.3
    
    
    
    90
    %
    
    $
    50.6
    
    
    $
    41.3
    
    
    
    82
    %
  
 
   BANK ONE 2003 ANNUAL REPORT 75




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##### 



Principal Investments and Joint Ventures
 Loans
Sold with Recourse  CAPITAL MANAGEMENT The capital position of the Corporation is managed to achieve managements
external debt rating objectives, comply with regulatory requirements and
reflect the underlying risks of the Corporations business activities. The
Corporation employs an economic capital framework (described further on page
77) to facilitate a standard measure of risk and return across all business
units, as well as to provide a measure of capital adequacy consistent with
internal risk evaluation practices. This serves as the basis for capital
planning and related management activities. Selected Capital Ratios
   Well-CapitalizedRegulatoryAt December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001
    
    
    
    2000
    
    
    
    1999
    
    
    GuidelinesRisk-based capital ratios:Tier 1
    
    
    10.0
    %
    
    
    9.9
    %
    
    
    8.6
    %
    
    
    7.3
    %
    
    
    7.7
    %
    
    
    6.0
    %Total
    
    
    13.7
    
    
    
    13.7
    
    
    
    12.2
    
    
    
    10.8
    
    
    
    10.7
    
    
    
    10.0Leverage ratio (1)
    
    
    8.8
    
    
    
    8.9
    
    
    
    8.2
    
    
    
    7.3
    
    
    
    7.7
    
    
    
    N/ACommon equity/assets
    
    
    7.2
    
    
    
    8.1
    
    
    
    7.5
    
    
    
    6.8
    
    
    
    7.4
    
    
    
    Tangible common equity/tangible reported assets
    
    
    6.4
    
    
    
    7.2
    
    
    
    6.8
    
    
    
    6.3
    
    
    
    6.6
    
    
    
    Tangible common equity/tangible managed assets
    
    
    5.7
    
    
    
    6.4
    
    
    
    5.9
    
    
    
    5.5
    
    
    
    5.7
    
    
    
    Double leverage ratio
    
    
    103
    
    
    
    103
    
    
    
    103
    
    
    
    108
    
    
    
    112
    
    
    
    Dividend payout ratio
    
    
    30
    
    
    
    30
    
    
    
    38
    
    
    
    N/M
    
    
    
    57
    
    
    
    
      (1)
    
    The minimum regulatory guideline is 3%. With the consolidation of certain
asset-backed conduits as of December 31, 2003, the leverage ratio is expected
to be negatively impacted by approximately 108 basis points in the first
quarter of 2004. The components of the Corporations regulatory risk-based capital and
risk-weighted assets were as follows: At December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001
    
    
    
    2000
    
    
    
    1999(In millions)Regulatory risk-based capital:Tier 1 capital
    
    $
    24,499
    
    
    $
    23,918
    
    
    $
    21,749
    
    
    $
    19,824
    
    
    $
    20,247Tier 2 capital
    
    
    9,135
    
    
    
    9,201
    
    
    
    9,091
    
    
    
    9,316
    
    
    
    7,967Total capital
    
    $
    33,634
    
    
    $
    33,119
    
    
    $
    30,840
    
    
    $
    29,140
    
    
    $
    28,214Total risk-weighted assets
    
    $
    245,441
    
    
    $
    241,468
    
    
    $
    253,330
    
    
    $
    270,182
    
    
    $
    263,169
 76 BANK ONE 2003 ANNUAL REPORT




---



##### 



For the Year Ended December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001
    
    
    
    2000
    
    
    
    1999(In millions)Goodwill
    
    $
    2,061
    
    
    $
    1,882
    
    
    $
    1,560
    
    
    $
    858
    
    
    $
    934Other nonqualifying intangibles
    
    
    290
    
    
    
    256
    
    
    
    207
    
    
    
    375
    
    
    
    669Subtotal
    
    
    2,351
    
    
    
    2,138
    
    
    
    1,767
    
    
    
    1,233
    
    
    
    1,603Qualifying intangibles
    
    
    468
    
    
    
    415
    
    
    
    414
    
    
    
    214
    
    
    
    583Total intangibles
    
    $
    2,819
    
    
    $
    2,553
    
    
    $
    2,181
    
    
    $
    1,447
    
    
    $
    2,186
  Dividend Policy  Double Leverage  Stock Repurchase Program
 Economic Capital    
    
    An equal amount of capital is assigned for each measured unit of risk.  
    
    Risk is defined in terms of unexpected losses over the life of the
exposure, measured at a confidence interval consistent with that level of
capitalization necessary to achieve a targeted AA solvency standard. Unexpected
losses are in excess of those normally incurred and for which reserves are
maintained.  
    
    Business units are assessed a uniform charge against allotted capital,
representing a target hurdle rate on equity investments. Returns on capital in
excess of the hurdle rate contribute to increases in shareholder value.
   BANK ONE 2003 ANNUAL REPORT 77




---



##### 



CONSOLIDATED BALANCE SHEETS  At December 31,
    
    
    2003
    
    
    
    2002(Dollars in millions)AssetsCash and due from banks
    
    $
    17,089
    
    
    $
    17,920Interest-bearing due from banks
    
    
    3,093
    
    
    
    1,503Federal funds sold and securities purchased under resale agreements
    
    
    15,551
    
    
    
    17,356Trading assets
    
    
    11,584
    
    
    
    7,190Derivative product assets
    
    
    5,208
    
    
    
    4,273Investment securities
    
    
    84,951
    
    
    
    67,643Interests in purchased receivables
    
    
    32,938
    
    
    
    Loans (1)
    
    
    138,147
    
    
    
    148,125Allowance for loan losses
    
    
    (3,472
    )
    
    
    (3,923
    )Loans, net
    
    
    134,675
    
    
    
    144,202Premises and equipment
    
    
    2,960
    
    
    
    2,454Goodwill
    
    
    2,061
    
    
    
    1,882Other intangible assets
    
    
    758
    
    
    
    671Other assets
    
    
    15,695
    
    
    
    12,891Total assets
    
    $
    326,563
    
    
    $
    277,985LiabilitiesDepositsDemand
    
    $
    24,485
    
    
    $
    34,325Savings
    
    
    99,175
    
    
    
    88,934TimeUnder $100,000
    
    
    13,708
    
    
    
    16,767$100,000 and over
    
    
    9,234
    
    
    
    13,745Foreign offices
    
    
    18,019
    
    
    
    16,237Total deposits
    
    
    164,621
    
    
    
    170,008Federal funds purchased and securities sold under repurchase agreements
    
    
    20,573
    
    
    
    14,578Other short-term borrowings
    
    
    47,740
    
    
    
    12,306Long-term debt
    
    
    46,764
    
    
    
    43,234Insurance policy and claims reserves
    
    
    6,713
    
    
    
    226Derivative product liabilities
    
    
    4,050
    
    
    
    3,838Other liabilities
    
    
    12,683
    
    
    
    11,355Total liabilities
    
    
    303,144
    
    
    
    255,545Commitments
and contingencies (see Note 22, 23 and 28)Stockholders EquityCommon stock ($0.01 par value; authorized 4,000,000,000; issued 1,181,382,304)
    
    
    12
    
    
    
    12Surplus
    
    
    10,290
    
    
    
    10,239Retained earnings
    
    
    15,514
    
    
    
    13,020Accumulated other adjustments to stockholders equity
    
    
    127
    
    
    
    (8
    )Deferred compensation
    
    
    (189
    )
    
    
    (157
    )Treasury stock, at cost (61,800,269 and 17,340,948 shares, respectively)
    
    
    (2,335
    )
    
    
    (666
    )Total stockholders equity
    
    
    23,419
    
    
    
    22,440Total liabilities and stockholders equity
    
    $
    326,563
    
    
    $
    277,985
 (1)
    
    Includes loans held for sale of $12,017 million and $6,937 million at
December 31, 2003 and 2002, respectively.   78 BANK ONE 2003 ANNUAL REPORT




---



##### 



CONSOLIDATED INCOME STATEMENTS  For the Year Ended December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001(In millions, except per share data)Net Interest IncomeInterest income
    
    $
    12,661
    
    
    $
    13,887
    
    
    $
    17,257Interest expense
    
    
    4,512
    
    
    
    5,332
    
    
    
    8,652Total net interest income
    
    
    8,149
    
    
    
    8,555
    
    
    
    8,605Noninterest IncomeBanking fees and commissions
    
    
    1,795
    
    
    
    1,794
    
    
    
    1,736Credit card revenue
    
    
    3,764
    
    
    
    3,836
    
    
    
    2,775Service charges on deposits
    
    
    1,661
    
    
    
    1,577
    
    
    
    1,449Fiduciary and investment management fees
    
    
    656
    
    
    
    645
    
    
    
    671Investment securities gains (losses)
    
    
    122
    
    
    
    165
    
    
    
    (66
    )Trading gains (losses)
    
    
    (26
    )
    
    
    224
    
    
    
    220Other income (losses)
    
    
    91
    
    
    
    (61
    )
    
    
    358Total noninterest income
    
    
    8,063
    
    
    
    8,180
    
    
    
    7,143Total revenue, net of interest expense
    
    
    16,212
    
    
    
    16,735
    
    
    
    15,748Provision for credit losses
    
    
    2,045
    
    
    
    2,487
    
    
    
    2,510Noninterest ExpenseSalaries and employee benefits
    
    
    4,765
    
    
    
    4,424
    
    
    
    4,156Occupancy
    
    
    679
    
    
    
    643
    
    
    
    683Equipment
    
    
    473
    
    
    
    423
    
    
    
    451Outside service fees and processing
    
    
    1,153
    
    
    
    1,291
    
    
    
    1,174Marketing and development
    
    
    957
    
    
    
    1,069
    
    
    
    862Telecommunication
    
    
    213
    
    
    
    364
    
    
    
    406Goodwill amortization
    
    
    
    
    
    
    
    
    
    
    69Other intangible amortization
    
    
    137
    
    
    
    125
    
    
    
    97Other expense
    
    
    1,400
    
    
    
    1,270
    
    
    
    1,241Total noninterest expense before
restructuring-related charges (reversals)
    
    
    9,777
    
    
    
    9,609
    
    
    
    9,139Restructuring-related charges (reversals)
    
    
    
    
    
    
    (63
    )
    
    
    351Total noninterest expense
    
    
    9,777
    
    
    
    9,546
    
    
    
    9,490Income from continuing operations before income taxes and
cumulative effect of change in accounting principle
    
    
    4,390
    
    
    
    4,702
    
    
    
    3,748Applicable income taxes
    
    
    1,265
    
    
    
    1,446
    
    
    
    1,099Income from continuing operations before
cumulative effect of change in accounting principle
    
    
    3,125
    
    
    
    3,256
    
    
    
    2,649Discontinued operationsIncome from discontinued operations (includes gain on sale of $597 in 2003)
    
    
    643
    
    
    
    61
    
    
    
    52Applicable income taxes
    
    
    233
    
    
    
    22
    
    
    
    19Income from discontinued operations, net of taxes
    
    
    410
    
    
    
    39
    
    
    
    33Cumulative effect of change in accounting principle, net of taxes of ($25)
    
    
    
    
    
    
    
    
    
    
    (44
    )Net income
    
    $
    3,535
    
    
    $
    3,295
    
    
    $
    2,638Net income attributable to common stockholders equity
    
    
    3,535
    
    
    
    3,295
    
    
    
    2,628Basic earnings per shareIncome from continuing operations, net of taxes
    
    $
    2.78
    
    
    $
    2.80
    
    
    $
    2.25Income from discontinued operations, net of taxes
    
    
    0.36
    
    
    
    0.03
    
    
    
    0.03Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    (0.03
    )Net income
    
    $
    3.14
    
    
    $
    2.83
    
    
    $
    2.25Diluted earnings per shareIncome from continuing operations, net of taxes
    
    $
    2.75
    
    
    $
    2.77
    
    
    $
    2.25Income from discontinued operations, net of taxes
    
    
    0.36
    
    
    
    0.03
    
    
    
    0.03Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    (0.04
    )Net income
    
    $
    3.11
    
    
    $
    2.80
    
    
    $
    2.24
 The
accompanying notes are an integral part of this statement. BANK ONE 2003 ANNUAL REPORT 79




---



##### 



CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY  AccumulatedOtherAdjustments to
    
    
    
    
    
    
    
    
    
    
    TotalPreferred
    
    
    Common
    
    
    
    
    
    
    Retained
    
    
    Stockholders'
    
    
    Deferred
    
    
    Treasury
    
    
    Stockholders'(In millions)
    
    Stock
    
    
    Stock
    
    
    Surplus
    
    
    Earnings
    
    
    Equity
    
    
    Compensation
    
    
    Stock
    
    
    EquityBalance-December 31, 2000
    
    $
    190
    
    
    $
    12
    
    
    $
    10,487
    
    
    $
    9,060
    
    
    $
    (5
    )
    
    $
    (121
    )
    
    $
    (988
    )
    
    $
    18,635Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,638
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,638Change in fair value,
investment securities-available
for sale, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    93
    
    
    
    
    
    
    
    
    
    
    
    93Change in fair value of cash-flow
hedge derivative, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (146
    )
    
    
    
    
    
    
    
    
    
    
    (146
    )Translation loss, net of
hedge results and taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7
    )
    
    
    
    
    
    
    
    
    
    
    (7
    )Net income and changes in
accumulated other adjustments
to stockholders equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,638
    
    
    
    (60
    )
    
    
    
    
    
    
    
    
    
    
    2,578Cash dividends declared:Common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (981
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (981
    )Preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10
    )Net issuance of common stock
    
    
    
    
    
    
    
    
    
    
    (179
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    370
    
    
    
    191Redemption of stock
    
    
    (190
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (190
    )Other
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3Balance-December 31, 2001
    
    $
    
    
    
    $
    12
    
    
    $
    10,311
    
    
    $
    10,707
    
    
    $
    (65
    )
    
    $
    (121
    )
    
    $
    (618
    )
    
    $
    20,226Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,295
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,295Change in fair value,
investment securities-available
for sale, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    474
    
    
    
    
    
    
    
    
    
    
    
    474Change in fair value of cash-flow
hedge derivative, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (414
    )
    
    
    
    
    
    
    
    
    
    
    (414
    )Translation loss, net of
hedge results and taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    (3
    )Net income and changes in
accumulated other adjustments
to stockholders equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,295
    
    
    
    57
    
    
    
    
    
    
    
    
    
    
    
    3,352Common stock cash
dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (982
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (982
    )Net purchases of common stock
    
    
    
    
    
    
    
    
    
    
    (134
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (48
    )
    
    
    (182
    )Restricted stock awards granted,
net of forfeitures and amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (36
    )
    
    
    
    
    
    
    (36
    )Stock option grants
    
    
    
    
    
    
    
    
    
    
    45
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45Other
    
    
    
    
    
    
    
    
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17Balance-December 31, 2002
    
    $
    
    
    
    $
    12
    
    
    $
    10,239
    
    
    $
    13,020
    
    
    $
    (8
    )
    
    $
    (157
    )
    
    $
    (666
    )
    
    $
    22,440Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,535
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,535Change in fair value,
investment securities-available
for sale, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (117
    )
    
    
    
    
    
    
    
    
    
    
    (117
    )Change in fair value of cash-flow
hedge derivative, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    285
    
    
    
    
    
    
    
    
    
    
    
    285Minimum pension liability
(1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (35
    )
    
    
    
    
    
    
    
    
    
    
    (35
    )Translation gain, net of
hedge results and taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    2Net income and changes in
accumulated other adjustments
to stockholders equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,535
    
    
    
    135
    
    
    
    
    
    
    
    
    
    
    
    3,670Common stock cash
dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,041
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,041
    )Net purchases of common stock
    
    
    
    
    
    
    
    
    
    
    (31
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,669
    )
    
    
    (1,700
    )Restricted stock awards granted,
net of forfeitures and amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (32
    )
    
    
    
    
    
    
    (32
    )Stock option grants
    
    
    
    
    
    
    
    
    
    
    83
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    83Other
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )Balance-December 31, 2003
    
    $
    
    
    
    $
    12
    
    
    $
    10,290
    
    
    $
    15,514
    
    
    $
    127
    
    
    $
    (189
    )
    
    $
    (2,335
    )
    
    $
    23,419
 (1)
    
    Relates primarily to the nonqualified supplemental pension plan. The accompanying notes are an integral part of this statement. 80 BANK ONE 2003 ANNUAL REPORT




---



##### 



CONSOLIDATED STATEMENTS OF
CASH FLOWS  For the Year Ended December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001(In millions)Cash Flows from Operating Activities of Continuing Operations:Net income
    
    $
    3,535
    
    
    $
    3,295
    
    
    $
    2,638Income from discontinued operations, net of taxes
    
    
    410
    
    
    
    39
    
    
    
    33Income from continuing operations, net of taxes
    
    
    3,125
    
    
    
    3,256
    
    
    
    2,605Adjustments to reconcile net income to net cash provided by operating activities
of continuing operations:Depreciation and amortization
    
    
    576
    
    
    
    524
    
    
    
    571Cumulative effect of accounting change
    
    
    
    
    
    
    
    
    
    
    69Provision for credit losses
    
    
    2,045
    
    
    
    2,487
    
    
    
    2,510Investment securities (gains) losses, net
    
    
    (122
    )
    
    
    (165
    )
    
    
    66Change in net derivative product assets and liabilities
    
    
    (491
    )
    
    
    (504
    )
    
    
    (198
    )Change in trading assets
    
    
    (4,818
    )
    
    
    (1,021
    )
    
    
    (3,456
    )Change in other assets
    
    
    (1,338
    )
    
    
    1,229
    
    
    
    213Change in other liabilities
    
    
    1,557
    
    
    
    (867
    )
    
    
    375Restructuring (reversals) charges
    
    
    
    
    
    
    (63
    )
    
    
    351Other operating adjustments
    
    
    (360
    )
    
    
    523
    
    
    
    (764
    )Net cash provided by operating activities
    
    
    174
    
    
    
    5,399
    
    
    
    2,342Cash Flows from Investing Activities of Continuing Operations:Change in federal funds sold and securities purchased under resale agreements
    
    
    1,805
    
    
    
    (8,010
    )
    
    
    (4,610
    )Securities available for sale:Purchases
    
    
    (74,604
    )
    
    
    (57,304
    )
    
    
    (56,088
    )Maturities
    
    
    13,559
    
    
    
    7,193
    
    
    
    23,579Sales
    
    
    53,014
    
    
    
    48,340
    
    
    
    23,393Credit card receivables securitized
    
    
    11,450
    
    
    
    6,775
    
    
    
    3,845Change in loans
    
    
    (1,123
    )
    
    
    (4,677
    )
    
    
    13,425Loan recoveries
    
    
    455
    
    
    
    364
    
    
    
    342Additions to premises and equipment
    
    
    (1,662
    )
    
    
    (488
    )
    
    
    (169
    )Proceeds from sales of premises and equipment
    
    
    62
    
    
    
    53
    
    
    
    55Business acquisitions, net of cash received
    
    
    (401
    )
    
    
    
    
    
    
    (5,776
    )All other investing activities, net
    
    
    (31
    )
    
    
    (257
    )
    
    
    383Net cash provided by (used in) investing activities
    
    
    2,524
    
    
    
    (8,011
    )
    
    
    (1,621
    )Cash Flows from Financing Activities of Continuing Operations:Change in deposits
    
    
    (5,443
    )
    
    
    2,590
    
    
    
    373Change in federal funds purchased and securities sold under repurchase agreements
    
    
    5,995
    
    
    
    850
    
    
    
    1,607Change in other short-term borrowings
    
    
    (1,475
    )
    
    
    2,061
    
    
    
    (7,757
    )Proceeds from issuance of long-term debt
    
    
    11,712
    
    
    
    8,293
    
    
    
    13,291Repayment of long-term debt
    
    
    (10,544
    )
    
    
    (8,945
    )
    
    
    (11,341
    )Treasury stock acquired
    
    
    (2,069
    )
    
    
    (617
    )
    
    
    (78
    )Cash dividends paid
    
    
    (1,005
    )
    
    
    (983
    )
    
    
    (991
    )Proceeds from issuance of common and treasury stock
    
    
    201
    
    
    
    292
    
    
    
    191Redemption of preferred stock
    
    
    
    
    
    
    
    
    
    
    (190
    )All other financing activities, net
    
    
    22
    
    
    
    69
    
    
    
    19Net cash provided by (used in) financing activities
    
    
    (2,606
    )
    
    
    3,610
    
    
    
    (4,876
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    41
    
    
    
    (27
    )
    
    
    34Discontinued Operations:Net cash provided by discontinued operations
    
    
    626
    
    
    
    39
    
    
    
    33Net increase (decrease) in cash and cash equivalents
    
    
    759
    
    
    
    1,010
    
    
    
    (4,088
    )Cash and cash equivalents at beginning of year
    
    
    19,423
    
    
    
    18,413
    
    
    
    22,501Cash and cash equivalents at end of year
    
    $
    20,182
    
    
    $
    19,423
    
    
    $
    18,413Other cash flow disclosures from continuing operations:Interest paid
    
    $
    4,664
    
    
    $
    5,676
    
    
    $
    9,207Income taxes paid
    
    
    1,239
    
    
    
    1,089
    
    
    
    487Noncash disclosure:Loans transferred to other real estate owned
    
    
    396
    
    
    
    414
    
    
    
    162
 
 BANK ONE 2003 ANNUAL REPORT 81




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  Note 1  Summary of Significant Accounting Policies  (a) Basis of Presentation   (b) Principles of Consolidation
 (c) Resale and Repurchase Agreements  (d) Trading Activities  (e) Hedging Activities
   82 BANK ONE 2003 ANNUAL REPORT




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (f) Investment Securities    (g) Equity and Cost Method Investments
 (h) Interests in Purchased Receivables  (i) Loans
   BANK ONE 2003 ANNUAL REPORT 83




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (j) Lease Financing Receivables  (k) Loan Sales and Securitizations    (l) Nonperforming Loans
 (m) Allowance for Credit Losses  (n) Premises and Equipment  (o) Goodwill and Other Intangible Assets  (p) Other Real Estate Owned (OREO)  (q) Insurance Policy and Claims Reserves
   84 BANK ONE 2003 ANNUAL REPORT




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  At December 31,
    
    
    2003
    
    
    
    2002(In millions)Annuity and deposit contracts
    
    $
    4,748
    
    
    $
    135Life insurance policies
    
    
    1,923
    
    
    
    40Other
    
    
    42
    
    
    
    51Total
    
    $
    6,713
    
    
    $
    226
 (r) Insurance Revenues    (s) Separate Accounts
 (t) Credit Card Award Programs  (u) Stock Options  (v) Income Taxes  (w) Cash Flow Reporting  (x) New and Pending Accounting Pronouncements
   BANK ONE 2003 ANNUAL REPORT 85




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  Costs Associated with Exit or Disposal Activities  Accounting and Disclosure Requirements for Guarantees  Consolidation of Variable Interest Entities
 Derivative Instruments and Hedging Activities  Accounting and Reporting for Certain Long-Duration Contracts and Separate
Accounts
   86 BANK ONE 2003 ANNUAL REPORT




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  Accounting for Certain Financial Instruments with Characteristics of Both
Liabilities and Equity
 Note 2  Earnings Per Share
    For the Year Ended December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001(In millions, except per share data)Income from continuing operations
before cumulative effect of change in accounting principle, net of taxes
    
    $
    3,125
    
    
    $
    3,256
    
    
    $
    2,649Income from discontinued operations, net of taxes of $233, $22, $19
    
    
    410
    
    
    
    39
    
    
    
    33Cumulative
effect of change in accounting principle, net of taxes of ($25)
    
    
    
    
    
    
    
    
    
    
    (44
    )Net income
    
    
    3,535
    
    
    
    3,295
    
    
    
    2,638Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    (10
    )Net income available to common stockholders for basic and diluted EPS
    
    $
    3,535
    
    
    $
    3,295
    
    
    $
    2,628Average shares outstanding
    
    
    1,126
    
    
    
    1,162
    
    
    
    1,166Dilutive effect of stock options
    
    
    9
    
    
    
    10
    
    
    
    8Average shares outstanding assuming full dilution
    
    
    1,135
    
    
    
    1,172
    
    
    
    1,174Basic earnings per share
Income from continuing operations
    
    $
    2.78
    
    
    $
    2.80
    
    
    $
    2.25Income from discontinued operations
    
    
    0.36
    
    
    
    0.03
    
    
    
    0.03Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    (0.03
    )Net income
    
    $
    3.14
    
    
    $
    2.83
    
    
    $
    2.25Diluted earnings per share
Income from continuing operations
    
    $
    2.75
    
    
    $
    2.77
    
    
    $
    2.25Income from discontinued operations
    
    
    0.36
    
    
    
    0.03
    
    
    
    0.03Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    (0.04
    )Net income
    
    $
    3.11
    
    
    $
    2.80
    
    
    $
    2.24
 BANK ONE 2003 ANNUAL REPORT 87




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##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  Note 3  Acquisitions
 Note 4  Discontinued Operations    For the Year Ended December 31,
    
    2003
    
    
    2002
    
    
    2001(In millions)Total revenues
    
    $
    730
    
    
    $
    131
    
    
    $
    114Total expenses
(excluding taxes)
    
    
    87
    
    
    
    70
    
    
    
    62Pretax income
    
    $
    643
    
    
    $
    61
    
    
    $
    52Income from discontinued
operations, net of tax
    
    $
    410
    
    
    $
    39
    
    
    $
    33Total assets
    
    $
    72
    
    
    $
    84
    
    
    $
    239
 Note 5  Restructuring-Related Activity
   88 BANK ONE 2003 ANNUAL REPORT




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  Note 6  Business Segments
 
   Total revenues from
    
    Income taxes
    
    Income (loss)For the Year Ended
    
    continuing operations
    
    provision (benefit) for
    
    from continuingDecember 31,
    
    FTE (1)
    
    continuing operations(1)
    
    operations
    
    Total assets2003
    
    
    
    2002
    
    
    
    2001
    
    
    
    2003
    
    
    
    2002
    
    
    
    2001
    
    
    
    2003
    
    
    
    2002
    
    
    
    2001
    
    
    
    2003
    
    
    
    2002
    
    
    
    2001(In millions, except identifiable
assets in billions)Retail
    
    $
    6,303
    
    
    $
    6,073
    
    
    $
    5,837
    
    
    $
    897
    
    
    $
    847
    
    
    $
    639
    
    
    $
    1,558
    
    
    $
    1,451
    
    
    $
    1,046
    
    
    $
    58,772
    
    
    $
    56,007
    
    
    $
    51,939Commercial Banking
    
    
    4,014
    
    
    
    4,111
    
    
    
    4,347
    
    
    
    464
    
    
    
    162
    
    
    
    251
    
    
    
    1,197
    
    
    
    617
    
    
    
    700
    
    
    
    136,812
    
    
    
    94,260
    
    
    
    101,186Card Services
    
    
    4,938
    
    
    
    4,864
    
    
    
    4,021
    
    
    
    723
    
    
    
    741
    
    
    
    542
    
    
    
    1,159
    
    
    
    1,166
    
    
    
    907
    
    
    
    44,792
    
    
    
    45,391
    
    
    
    35,385Investment Management Group (2)
    
    
    1,480
    
    
    
    1,298
    
    
    
    1,297
    
    
    
    203
    
    
    
    192
    
    
    
    175
    
    
    
    345
    
    
    
    324
    
    
    
    293
    
    
    
    15,839
    
    
    
    8,491
    
    
    
    8,357Corporate (2)
    
    
    (361
    )
    
    
    534
    
    
    
    377
    
    
    
    (860
    )
    
    
    (351
    )
    
    
    (377
    )
    
    
    (1,134
    )
    
    
    (302
    )
    
    
    (297
    )
    
    
    70,348
    
    
    
    73,836
    
    
    
    72,640Total before cumulative
effect of change in
accounting principle
    
    
    16,374
    
    
    
    16,880
    
    
    
    15,879
    
    
    
    1,427
    
    
    
    1,591
    
    
    
    1,230
    
    
    
    3,125
    
    
    
    3,256
    
    
    
    2,649
    
    
    
    326,563
    
    
    
    277,985
    
    
    
    269,507Cumulative effect of change
in accounting principle,
net of taxes ($25)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (44
    )
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    16,374
    
    
    $
    16,880
    
    
    $
    15,879
    
    
    $
    1,427
    
    
    $
    1,591
    
    
    $
    1,230
    
    
    $
    3,125
    
    
    $
    3,256
    
    
    $
    2,605
    
    
    $
    326,563
    
    
    $
    277,985
    
    
    $
    269,507
 (1)
    
    Revenue and provision (benefit) for income tax includes taxable equivalent
adjustments of $162 million, $145 million and $131 million for the years ended
December 31, 2003, 2002 and 2001, respectively.(2)
    
    Amounts presented are for continuing operations. Refer to Note 4,
Discontinued Operations, on page 88 for information related to corporate trust
services. Note 7  Interest Income and Interest Expense  For the Year Ended December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001(In millions)Interest IncomeLoans, including fees (1)
    
    $
    8,828
    
    
    $
    9,947
    
    
    $
    13,213Bank balances
    
    
    32
    
    
    
    10
    
    
    
    98Federal funds sold and securities under resale agreements
    
    
    156
    
    
    
    159
    
    
    
    418Trading assets
    
    
    366
    
    
    
    256
    
    
    
    309Investment securities
    
    
    3,279
    
    
    
    3,515
    
    
    
    3,219Total interest income
    
    
    12,661
    
    
    
    13,887
    
    
    
    17,257Interest ExpenseDeposits (1)
    
    
    2,032
    
    
    
    2,711
    
    
    
    4,881Federal funds purchased and securities sold under repurchase agreements
    
    
    270
    
    
    
    271
    
    
    
    633Other short-term borrowings
    
    
    341
    
    
    
    262
    
    
    
    659Long-term debt
    
    
    1,869
    
    
    
    2,088
    
    
    
    2,479Total interest expense
    
    
    4,512
    
    
    
    5,332
    
    
    
    8,652Net Interest Income
    
    
    8,149
    
    
    
    8,555
    
    
    
    8,605Provision for credit losses
    
    
    2,045
    
    
    
    2,487
    
    
    
    2,510Net Interest Income After Provision for Credit Losses
    
    $
    6,104
    
    
    $
    6,068
    
    
    $
    6,095
 (1)
    
    Prior period amounts have been reclassified to conform to the current year presentation. BANK ONE 2003 ANNUAL REPORT 89




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 8  Investment Securities  Gross
    
    
    Gross
    
    
    FairAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    ValueAt December 31, 2003
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    (Book Value)(In millions)U.S. Treasury
    
    $
    5,606
    
    
    $
    28
    
    
    $
    30
    
    
    $
    5,604U.S. government agencies
    
    
    31,228
    
    
    
    330
    
    
    
    40
    
    
    
    31,518States and political subdivisions
    
    
    1,262
    
    
    
    59
    
    
    
    9
    
    
    
    1,312Retained interests in securitized credit card receivables (1)
    
    
    26,626
    
    
    
    179
    
    
    
    
    
    
    
    26,805Other debt securities
    
    
    12,734
    
    
    
    181
    
    
    
    16
    
    
    
    12,899Equity securities (1)
    
    
    4,252
    
    
    
    5
    
    
    
    7
    
    
    
    4,250Total available for sale securities
    
    $
    81,708
    
    
    $
    782
    
    
    $
    102
    
    
    
    82,388Principal and other investments (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,563Total investment securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    84,951
 Gross
    
    
    Gross
    
    
    FairAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    ValueAt December 31, 2002
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    (Book Value)(In millions)U.S. Treasury
    
    $
    1,310
    
    
    $
    25
    
    
    $
    
    
    
    $
    1,335U.S. government agencies
    
    
    26,419
    
    
    
    635
    
    
    
    14
    
    
    
    27,040States and political subdivisions
    
    
    1,116
    
    
    
    54
    
    
    
    1
    
    
    
    1,169Retained interests in securitized credit card receivables (1)
    
    
    28,202
    
    
    
    147
    
    
    
    
    
    
    
    28,349Other debt securities
    
    
    4,719
    
    
    
    40
    
    
    
    14
    
    
    
    4,745Equity securities (1)
    
    
    3,406
    
    
    
    4
    
    
    
    1
    
    
    
    3,409Total available for sale securities
    
    $
    65,172
    
    
    $
    905
    
    
    $
    30
    
    
    
    66,047Principal and other investments (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,596Total investment securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    67,643
 Gross
    
    
    Gross
    
    
    FairAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    ValueAt December 31, 2001
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    (Book Value)(In millions)U.S. Treasury
    
    $
    1,424
    
    
    $
    30
    
    
    $
    4
    
    
    $
    1,450U.S. government agencies
    
    
    25,265
    
    
    
    113
    
    
    
    132
    
    
    
    25,246States and political subdivisions
    
    
    1,310
    
    
    
    28
    
    
    
    8
    
    
    
    1,330Retained interests in securitized credit card receivables (1)
    
    
    23,998
    
    
    
    107
    
    
    
    
    
    
    
    24,105Other debt securities
    
    
    4,397
    
    
    
    24
    
    
    
    18
    
    
    
    4,403Equity securities (1)
    
    
    2,775
    
    
    
    10
    
    
    
    15
    
    
    
    2,770Total available for sale securities
    
    $
    59,169
    
    
    $
    312
    
    
    $
    177
    
    
    
    59,304Principal and other investments (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,579Total investment securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    60,883
 (1)
    
    The fair values of certain securities for which market quotations were not
available were estimated.(2)
    
    The fair values of certain securities reflect liquidity adjustments and
other market-related factors, and include investments accounted for at fair
value consistent with specialized industry practice. The following is a summary of the fair value of securities with unrealized
losses and an aging of those unrealized losses: At December 31, 2003
    
    Less than 12 months
    
    12 months or more
    
    TotalUnrealized
    
    
    
    
    
    
    Unrealized
    
    
    
    
    
    
    UnrealizedFair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    LossesU.S. Treasury
    
    $
    3,054
    
    
    $
    30
    
    
    $
    3
    
    
    $
    
    
    
    $
    3,057
    
    
    $
    30U.S. government agencies
    
    
    9,239
    
    
    
    40
    
    
    
    18
    
    
    
    
    
    
    
    9,257
    
    
    
    40States and political subdivisions
    
    
    178
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    178
    
    
    
    9Other debt securities
    
    
    1,278
    
    
    
    9
    
    
    
    474
    
    
    
    7
    
    
    
    1,752
    
    
    
    16Equity securities (1)
    
    
    153
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    153
    
    
    
    7Total temporarily impaired securities
    
    $
    13,902
    
    
    $
    95
    
    
    $
    495
    
    
    $
    7
    
    
    $
    14,397
    
    
    $
    102
 (1)
    
    The fair values of certain securities for which market quotations were not
available were estimated.  
 
   90 BANK ONE 2003 ANNUAL REPORT




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Available-for-sale debt securities had the following maturity and yield
characteristics: Due in 1 year
    
    Due in 1 year
    
    Due in 5 yearsAt December 31, 2003
    
    or less
    
    through 5 years
    
    through 10 years
    
    Due after 10 years
    
    TotalAmortized
    
    
    
    
    
    
    Amortized
    
    
    
    
    
    
    Amortized
    
    
    
    
    
    
    Amortized
    
    
    
    
    
    
    AmortizedCost
    
    
    Yield
    
    
    Cost
    
    
    Yield
    
    
    Cost
    
    
    Yield
    
    
    Cost
    
    
    Yield
    
    
    Cost
    
    
    Yield(Dollars in millions)U.S. Treasury
    
    $
    313
    
    
    
    3.89
    %
    
    $
    265
    
    
    
    1.20
    %
    
    $
    4,269
    
    
    
    2.20
    %
    
    $
    759
    
    
    
    2.91
    %
    
    $
    5,606
    
    
    
    2.34
    %U.S. government agencies
    
    
    55
    
    
    
    3.53
    
    
    
    307
    
    
    
    4.24
    
    
    
    646
    
    
    
    4.05
    
    
    
    30,220
    
    
    
    5.08
    
    
    
    31,228
    
    
    
    5.05States and political
subdivisions
    
    
    78
    
    
    
    5.07
    
    
    
    217
    
    
    
    4.82
    
    
    
    340
    
    
    
    4.43
    
    
    
    627
    
    
    
    4.73
    
    
    
    1,262
    
    
    
    4.69Other debt securities
    
    
    7,667
    
    
    
    6.23
    
    
    
    23,106
    
    
    
    5.95
    
    
    
    4,781
    
    
    
    3.46
    
    
    
    3,806
    
    
    
    2.87
    
    
    
    39,360
    
    
    
    5.40Total debt securities
-at amortized cost
    
    
    8,113
    
    
    
    6.11
    
    
    
    23,895
    
    
    
    5.87
    
    
    
    10,036
    
    
    
    2.99
    
    
    
    35,412
    
    
    
    4.79
    
    
    
    77,456
    
    
    
    5.03Total debt securities
-at fair value
    
    $
    8,173
    
    
    
    
    
    
    $
    24,094
    
    
    
    
    
    
    $
    10,119
    
    
    
    
    
    
    $
    35,752
    
    
    
    
    
    
    $
    78,138
  Note 9  Trading Assets and Liabilities  (In millions)
    
    
    2003
    
    
    
    2002Trading account assets:U.S. government & agency securities
    
    $
    4,514
    
    
    $
    3,058Municipal securities
    
    
    156
    
    
    
    326Corporate and other securities (1)
    
    
    2,193
    
    
    
    534Mortgage-backed securities (2)
    
    
    1,431
    
    
    
    917Asset-backed securities
    
    
    812
    
    
    
    725Commercial paper
    
    
    627
    
    
    
    441Equity securities
    
    
    1,508
    
    
    
    806Other securities (3)
    
    
    343
    
    
    
    382Total trading account assets
    
    $
    11,584
    
    
    $
    7,190Trading account liabilities:U.S. government & agency securities
    
    $
    2,069
    
    
    $
    946Corporate and other securities (1)
    
    
    751
    
    
    
    350Mortgage-backed securities (2)
    
    
    472
    
    
    
    348Other securities (3)
    
    
    326
    
    
    
    313Total trading account liabilities
    
    $
    3,618
    
    
    $
    1,957
 (1)
    
    Includes high yield securities and convertible securities.(2)
    
    Includes collateralized mortgage obligations and commercial
mortgage-backed securities.(3)
    
    Includes certain investment in mutual funds. Net unrealized trading gains for the year ended December 31, 2003 related to
trading assets and liabilities still held at the reporting date were $104.6
million.
 Note 10  Loans  At December 31,
    
    
    2003
    
    
    
    2002(In millions)Retail:Small business commercial
    
    $
    10,216
    
    
    $
    9,921Home equity
    
    
    26,432
    
    
    
    20,853Vehicle
    
    
    13,571
    
    
    
    14,661Other personal
    
    
    6,016
    
    
    
    6,869Total Retail
    
    
    56,235
    
    
    
    52,304Commercial Banking:Corporate banking:Commercial and industrial
    
    
    13,213
    
    
    
    17,866Commercial real estate
    
    
    8,818
    
    
    
    8,321Lease financing
    
    
    4,151
    
    
    
    4,358Other
    
    
    941
    
    
    
    1,014Total corporate banking
    
    
    27,123
    
    
    
    31,559Middle market:Commercial and industrial
    
    
    23,675
    
    
    
    26,983Commercial real estate
    
    
    1,993
    
    
    
    2,318Lease financing
    
    
    820
    
    
    
    1,008Other
    
    
    141
    
    
    
    27Total middle market
    
    
    26,629
    
    
    
    30,336Total Commercial Banking
    
    
    53,752
    
    
    
    61,895Card Services
    
    
    12,035
    
    
    
    11,581Investment Management Group
    
    
    7,380
    
    
    
    6,942Corporate
    
    
    8,745
    
    
    
    15,403Total loans
    
    
    138,147
    
    
    
    148,125Less: Allowance for loan losses
    
    
    3,472
    
    
    
    3,923Total loans, net
    
    $
    134,675
    
    
    $
    144,202
   BANK ONE 2003 ANNUAL REPORT 91




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##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  
 At December 31,
    
    
    2003
    
    
    
    2002(In millions)Impaired loans with
related allowance
    
    $
    1,371
    
    
    $
    2,183Impaired loans with
no related allowance (1)
    
    
    
    
    
    
    11Total impaired loans
    
    $
    1,371
    
    
    $
    2,194Allowance for impaired loans (2)
    
    
    305
    
    
    
    551
 At December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001(In millions)Average balance
of impaired loans
    
    $
    1,988
    
    
    $
    2,462
    
    
    $
    2,047Interest income recognized
on impaired loans
    
    
    22
    
    
    
    40
    
    
    
    41
 (1)
    
    Impaired loans for which the discounted cash flows, collateral value or
market price equals or exceeds the carrying value of the loan do not require an
allowance under SFAS No. 114, Accounting by Creditors for Impairment of a loan
- an amendment of FASB Statements No. 5 and 15.(2)
    
    The allowance for impaired loans is included in the Corporations overall allowance for loan losses.
   Maturity Distribution and Interest Rate Sensitivity of Loans  One Year
    
    
    One to Five
    
    
    Over FiveAt December 31, 2003
    
    or Less
    
    
    Years
    
    
    Years
    
    
    Total(In millions)Retail:Small business commercial
    
    $
    3,252
    
    
    $
    4,318
    
    
    $
    2,646
    
    
    $
    10,216Home equity
    
    
    401
    
    
    
    688
    
    
    
    25,343
    
    
    
    26,432Vehicle
    
    
    287
    
    
    
    9,056
    
    
    
    4,228
    
    
    
    13,571Other personal
    
    
    1,055
    
    
    
    474
    
    
    
    4,487
    
    
    
    6,016Total Retail
    
    
    4,995
    
    
    
    14,536
    
    
    
    36,704
    
    
    
    56,235Commercial Banking:Corporate banking:Commercial and industrial
    
    
    3,607
    
    
    
    7,580
    
    
    
    2,026
    
    
    
    13,213Commercial real estate
    
    
    4,766
    
    
    
    4,007
    
    
    
    45
    
    
    
    8,818Lease financing
    
    
    200
    
    
    
    374
    
    
    
    3,577
    
    
    
    4,151Other
    
    
    941
    
    
    
    
    
    
    
    
    
    
    
    941Middle market:Commercial and industrial
    
    
    14,633
    
    
    
    7,868
    
    
    
    1,174
    
    
    
    23,675Commercial real estate
    
    
    986
    
    
    
    879
    
    
    
    128
    
    
    
    1,993Lease financing
    
    
    61
    
    
    
    489
    
    
    
    270
    
    
    
    820Other
    
    
    141
    
    
    
    
    
    
    
    
    
    
    
    141Total Commercial Banking
    
    
    25,335
    
    
    
    21,197
    
    
    
    7,220
    
    
    
    53,752Card Services
    
    
    12,035
    
    
    
    
    
    
    
    
    
    
    
    12,035Investment
Management Group
    
    
    982
    
    
    
    3,281
    
    
    
    3,117
    
    
    
    7,380Corporate
    
    
    1,205
    
    
    
    1,192
    
    
    
    6,348
    
    
    
    8,745Total
    
    $
    44,552
    
    
    $
    40,206
    
    
    $
    53,389
    
    
    $
    138,147Loans with floating interest rates
    
    
    
    
    
    $
    21,092
    
    
    $
    19,926
    
    
    $
    41,018Loans with predetermined interest rates
    
    
    
    
    
    
    19,114
    
    
    
    33,463
    
    
    
    52,577Total
    
    
    
    
    
    $
    40,206
    
    
    $
    53,389
    
    
    $
    93,595
  Foreign Outstandings
 Note 11  Credit Card Securitizations
   92 BANK ONE 2003 ANNUAL REPORT




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##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  
 
   Interest-Only Strip(1)
    
    Sellers Interest(2)
    
    Total Retained InterestsAt December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2003
    
    
    
    2002
    
    
    
    2003
    
    
    
    2002(Dollars in millions)Receivable Life:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.5 years
    
    
    0.5 years10% Adverse Change
    
    $
    23.2
    
    
    $
    22.1
    
    
    $
    17.5
    
    
    $
    14.3
    
    
    
    40.7
    
    
    
    36.420% Adverse Change
    
    
    46.6
    
    
    
    44.2
    
    
    
    35.1
    
    
    
    28.8
    
    
    
    81.7
    
    
    
    73.0Excess Spread:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.43
    %
    
    
    1.22
    %10% Adverse Change
    
    
    23.8
    
    
    
    22.6
    
    
    
    17.9
    
    
    
    14.7
    
    
    
    41.7
    
    
    
    37.320% Adverse Change
    
    
    47.6
    
    
    
    45.2
    
    
    
    35.9
    
    
    
    29.4
    
    
    
    83.5
    
    
    
    74.6Expected Net Credit Losses: (3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5.73
    %
    
    
    5.97
    %10% Adverse Change
    
    
    102.1
    
    
    
    93.3
    
    
    
    73.5
    
    
    
    67.5
    
    
    
    175.6
    
    
    
    160.820% Adverse Change
    
    
    204.3
    
    
    
    183.9
    
    
    
    147.1
    
    
    
    119.3
    
    
    
    351.4
    
    
    
    303.2Discount Rate:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10.00
    %
    
    
    10.00
    %10% Adverse Change
    
    
    0.7
    
    
    
    0.7
    
    
    
    0.5
    
    
    
    0.4
    
    
    
    1.2
    
    
    
    1.120% Adverse Change
    
    
    1.5
    
    
    
    1.4
    
    
    
    1.1
    
    
    
    0.9
    
    
    
    2.6
    
    
    
    2.3
 (1)
    
    The effect of adverse changes in key assumptions on the fair value of the
interest-only strip would be recorded in noninterest income.(2)
    
    The effect of adverse changes in key assumptions on the fair value of the
Sellers Interest would be recorded in accumulated other adjustments to
stockholders equity, net of tax, unless the decline in value is deemed to be
other than temporary, which would result in a charge to noninterest income upon
recognition.(3)
    
    Certain trust legal documents include finance charge and fee revenue
reversals in the definition of net credit losses, resulting in a higher net
credit loss rate for trust purposes.  
 
   BANK ONE 2003 ANNUAL REPORT 93




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##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  For Year Ended December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001(In millions)Proceeds from reinvestment
in revolving securitizations
    
    $
    79,860
    
    
    $
    60,633
    
    
    $
    72,206Proceeds from new
securitizations
    
    
    11,450
    
    
    
    6,775
    
    
    
    3,845Servicing fees received
    
    
    526
    
    
    
    505
    
    
    
    598Cash flows received
on retained interests (1)
    
    
    2,235
    
    
    
    2,586
    
    
    
    2,577Cash released from
spread accounts
    
    
    112
    
    
    
    13
    
    
    
    146
 (1)
    
    Includes cash flows from interest-only strips as well as interchange fees
received from securitized accounts.
 Note 12  Allowance for Credit Losses   For the Year Ended December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001(In millions)Balance, beginning of year
    
    $
    3,923
    
    
    $
    3,975
    
    
    $
    3,636Additions (deductions):Charge-offs
    
    
    (3,063
    )
    
    
    (2,829
    )
    
    
    (2,630
    )Recoveries
    
    
    455
    
    
    
    364
    
    
    
    342Net charge-offs
    
    
    (2,608
    )
    
    
    (2,465
    )
    
    
    (2,288
    )Provision for loan losses
    
    
    2,157
    
    
    
    2,438
    
    
    
    2,431Transfers (1)
    
    
    
    
    
    
    (25
    )
    
    
    196Balance, end of year
    
    $
    3,472
    
    
    $
    3,923
    
    
    $
    3,975
 (1)
    
    Transfers to the allowance for loan losses in 2001 primarily represent the
addition of the Wachovia credit card portfolio.  For the Year Ended December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001(In millions)Balance, beginning of year
    
    $
    602
    
    
    $
    553
    
    
    $
    474Provision for credit losses
    
    
    (112
    )
    
    
    49
    
    
    
    79Balance, end of year
    
    $
    490
    
    
    $
    602
    
    
    $
    553
 Note 13  Goodwill and Other Intangible Assets
    For the Year Ended December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001(In millions except per share data)Net income attributable to common stockholders equity
    
    $
    3,535
    
    
    $
    3,295
    
    
    $
    2,628Goodwill amortization, net of taxes of $25
    
    
    
    
    
    
    
    
    
    
    44Adjusted net income attributable to common stockholders equity
    
    $
    3,535
    
    
    $
    3,295
    
    
    $
    2,672Basic earnings per share:Reported earnings per share
    
    $
    3.14
    
    
    $
    2.83
    
    
    $
    2.25Goodwill amortization
    
    
    
    
    
    
    
    
    
    
    0.04Adjusted basic earnings per share
    
    $
    3.14
    
    
    $
    2.83
    
    
    $
    2.29Diluted earnings per share:Reported earnings per share
    
    $
    3.11
    
    
    $
    2.80
    
    
    $
    2.24Goodwill amortization
    
    
    
    
    
    
    
    
    
    
    0.04Adjusted diluted earnings per share
    
    $
    3.11
    
    
    $
    2.80
    
    
    $
    2.28
 94 BANK ONE 2003 ANNUAL REPORT




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Goodwill   At December 31, 2003Commercial
    
    
    Card
    
    
    Investment(In millions)
    
    Retail
    
    
    Banking
    
    
    Services
    
    
    Management Group
    
    
    Corporate
    
    
    TotalGoodwill
    
    $
    516
    
    
    $
    139
    
    
    $
    1,206
    
    
    $
    200
    
    
    $
    
    
    
    $
    2,061
 Other Intangible AssetsFinite life intangible assets   At December 31, 2003(In millions)
    
    Gross amount
    
    
    Accumulated amortization
    
    
    Net carrying valuePurchased customer relationships
    
    $
    1,136
    
    
    $
    732
    
    
    $
    404Other
    
    
    433
    
    
    
    164
    
    
    
    269Total intangible assets
    
    $
    1,569
    
    
    $
    896
    
    
    $
    673
 
 At December 31,
    
    2004
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008(In millions)Amortization expense
    
    $
    138
    
    
    $
    125
    
    
    $
    88
    
    
    $
    84
    
    
    $
    56
 Indefinite life intangible assets  Note 14  Long-Term Debt  At December 31,
    
    Interest Rate
    
    Maturities
    
    
    2003
    
    
    
    2002(Dollars in millions)Parent CompanySenior debt:Medium-term notes
    
    
    1.25-7.63
    %
    
    
    2004-2008
    
    
    $
    12,322
    
    
    $
    11,973Other
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    6Subordinated debt:Notes
    
    
    4.90-10.00
    %
    
    
    2004-2027
    
    
    
    6,820
    
    
    
    7,270Floating rate notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150SubsidiariesBank notes
    
    
    1.07-7.50
    %
    
    
    2004-2008
    
    
    
    14,563
    
    
    
    13,866Subordinated notes
    
    
    6.00-8.25
    %
    
    
    2004-2008
    
    
    
    913
    
    
    
    1,590Capital leases
    
    
    4.27-12.60
    %
    
    
    2004-2011
    
    
    
    51
    
    
    
    73Federal Home Loan Bank advances
    
    
    1.08-4.57
    %
    
    
    2005-2010
    
    
    
    4,865
    
    
    
    3,715Trust preferred
    
    
    1.71-9.33
    %
    
    
    2026-2031
    
    
    
    3,315
    
    
    
    3,315Other (1)
    
    
    1.00-15.93
    %
    
    
    2004-2018
    
    
    
    3,910
    
    
    
    1,276Total long-term debt
    
    
    
    
    
    
    
    
    
    $
    46,764
    
    
    $
    43,234
 (1)
    
    Includes $2.7 billion of long-term debt issued by the investment vehicle
consolidated in conjunction with FIN No. 46. Investors in the investment
vehicle have no recourse to the general assets of the Corporation. BANK ONE 2003 ANNUAL REPORT 95




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Corporation has sponsored ten trusts with a total aggregate issuance
outstanding of $3.3 billion in trust preferred securities as follows: At December 31, 2003
    
    Trust Preferred
    
    Junior Subordinated Debt Owned by TrustInitial
    
    
    
    
    
    
    InitialIssuance
    
    Liquidation
    
    
    Distribution
    
    Principal
    
    
    
    
    Redeemable(Dollars in millions)
    
    Date
    
    Value
    
    
    Rate
    
    Amount
    
    
    Maturity
    
    BeginningCapital VI
    
    September 28, 2001
    
    $
    525
    
    
    
    7.20
    %
    
    $
    541.2
    
    
    October 15, 2031
    
    October 15, 2006Capital V
    
    January 30, 2001
    
    
    300
    
    
    
    8.00
    %
    
    
    309.3
    
    
    January 30, 2031
    
    January 30, 2006Capital IV
    
    August 30, 2000
    
    
    160
    
    
    3-mo LIBOR
plus 1.50%
    
    
    164.9
    
    
    September 1, 2030
    
    September 1, 2005Capital III
    
    August 30, 2000
    
    
    475
    
    
    
    8.75
    %
    
    
    489.7
    
    
    September 1, 2030
    
    See (1) below.Capital II
    
    August 8, 2000
    
    
    280
    
    
    
    8.50
    %
    
    
    288.7
    
    
    August 15, 2030
    
    August 15, 2005Capital I
    
    September 20, 1999
    
    
    575
    
    
    
    8.00
    %
    
    
    592.8
    
    
    September 15, 2029
    
    September 20, 2004First ChicagoNBD Capital 1
    
    January 31, 1997
    
    
    250
    
    
    3-mo LIBOR
plus 0.55%
    
    
    257.7
    
    
    February 1, 2027
    
    February 1, 2007First USACapital Trust I (2)
    
    December 20, 1996
    
    
    200
    
    
    
    9.33
    %
    
    
    206.2
    
    
    January 15, 2027
    
    January 15, 2007First ChicagoNBD Institutional
Capital A
    
    December 3, 1996
    
    
    500
    
    
    
    7.95
    %
    
    
    515.5
    
    
    December 1, 2026
    
    December 1, 2006First ChicagoNBD Institutional
Capital B
    
    December 5, 1996
    
    
    250
    
    
    
    7.75
    %
    
    
    257.7
    
    
    December 1, 2026
    
    December 1, 2006
 (1)
    
    Redeemable at any time subject to approval by the Federal Reserve Board.(2)
    
    The Corporation paid a premium of $36 million to repurchase $193 million of
these securities in 1997.  
 At December 31, 2003
    
    Total(In
millions)2004
    
    $
    8,9772005
    
    
    7,7992006
    
    
    8,7172007
    
    
    6,1272008
    
    
    5,136Thereafter
    
    
    10,008Total
    
    $
    46,764
 Note
15  Deposits and Short-Term Borrowings
   At December 31, 2003
    
    Amount
    
    
    Percent(Dollars
in millions)Domestic Time Certificates of Deposit of $100,000 and Over:Three months or less
    
    $
    1,633
    
    
    
    18
    %Over three months to six months
    
    
    878
    
    
    
    9Over six months to twelve months
    
    
    989
    
    
    
    11Over twelve months
    
    
    5,660
    
    
    
    62Total
    
    $
    9,160
    
    
    
    100
    %Foreign Offices:Three months or less
    
    $
    17,703
    
    
    
    98
    %Over three months to six months
    
    
    46
    
    
    
    Over six months to twelve months
    
    
    4
    
    
    
    Over twelve months
    
    
    266
    
    
    
    2Total
    
    $
    18,019
    
    
    
    100
    %
   96 BANK ONE 2003 ANNUAL REPORT




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Short-Term Borrowings  At Year-End
    
    For the YearHighestWeighted-
    
    
    Daily Average
    
    
    Weighted-
    
    
    OutstandingsDecember 31
    
    Outstanding
    
    
    Average Rate
    
    
    Outstandings
    
    
    Average Rate
    
    
    at Month End(Dollars
in millions)2003:Federal funds purchased
    
    $
    3,249
    
    
    
    0.92
    %
    
    $
    4,193
    
    
    
    1.07
    %
    
    $
    6,695Securities sold under repurchase agreements
    
    
    17,324
    
    
    
    0.99
    
    
    
    16,262
    
    
    
    1.06
    
    
    
    20,541Bank notes
    
    
    4,984
    
    
    
    1.15
    
    
    
    7,305
    
    
    
    1.34
    
    
    
    9,293Commercial paper (1)
    
    
    37,243
    
    
    
    1.13
    
    
    
    638
    
    
    
    1.14
    
    
    
    37,243Other short-term borrowings
    
    
    5,513
    
    
    
    2.25
    
    
    
    4,053
    
    
    
    3.27
    
    
    
    5,513Total short-term borrowings
    
    $
    68,313
    
    
    
    1.18
    %
    
    $
    32,451
    
    
    
    1.40
    %(2)2002:Federal funds purchased
    
    $
    3,833
    
    
    
    1.02
    %
    
    $
    4,400
    
    
    
    1.63
    %
    
    $
    6,086Securities sold under repurchase agreements
    
    
    10,745
    
    
    
    1.11
    
    
    
    10,548
    
    
    
    1.55
    
    
    
    12,730Bank notes
    
    
    8,519
    
    
    
    1.57
    
    
    
    4,960
    
    
    
    2.11
    
    
    
    9,733Commercial paper
    
    
    567
    
    
    
    1.65
    
    
    
    485
    
    
    
    2.26
    
    
    
    567Other short-term borrowings
    
    
    3,220
    
    
    
    1.41
    
    
    
    3,441
    
    
    
    2.61
    
    
    
    5,310Total short-term borrowings
    
    $
    26,884
    
    
    
    1.28
    %
    
    $
    23,834
    
    
    
    1.85
    %(2)2001:Federal funds purchased
    
    $
    3,171
    
    
    
    1.62
    %
    
    $
    5,121
    
    
    
    4.32
    %
    
    $
    6,353Securities sold under repurchase agreements
    
    
    10,557
    
    
    
    1.43
    
    
    
    11,543
    
    
    
    3.57
    
    
    
    13,386Bank notes
    
    
    4,529
    
    
    
    3.07
    
    
    
    8,267
    
    
    
    5.48
    
    
    
    13,047Commercial paper
    
    
    828
    
    
    
    1.58
    
    
    
    1,968
    
    
    
    4.75
    
    
    
    2,634Other short-term borrowings
    
    
    4,898
    
    
    
    1.60
    
    
    
    3,273
    
    
    
    3.68
    
    
    
    4,898Total short-term borrowings
    
    $
    23,983
    
    
    
    1.83
    %
    
    $
    30,172
    
    
    
    4.31
    %(2)
 (1)
    
    Includes $36.9 billion of commercial paper issued by the multi-seller
conduits and investment vehicle consolidated in conjunction with FIN No. 46.
Investors in the multi-seller conduits and investment vehicle have no recourse
to the general assets of the Corporation.(2)
    
    The Corporation uses interest rate swaps to hedge certain short-term
borrowings in its asset and liability management activities. The overall
weighted average rate, including the effects of derivative contracts was 1.88%,
2.24% and 4.28% for the years ended December 31, 2003, 2002 and 2001,
respectively.  Note 16  Preferred Stock  Note 17  Dividends and Capital Restrictions
 
   BANK ONE 2003 ANNUAL REPORT 97




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   Risk-
    
    
    Adjusted
    
    
    Tier 1
    
    
    Total
    
    
    Tier 1Tier 1
    
    
    Total
    
    
    Weighted
    
    
    Average
    
    
    Capital
    
    
    Capital
    
    
    LeverageCapital
    
    
    Capital
    
    
    Assets
    
    
    Assets
    
    
    Ratio
    (1)
    
    Ratio
    (1)
    
    Ratio
    (2)(Dollars in millions)December 31, 2003The Corporation (consolidated)
    
    $
    24,499
    
    
    $
    33,634
    
    
    $
    245,441
    
    
    $
    279,126
    
    
    
    10.0
    %
    
    
    13.7
    %
    
    
    8.8
    %Bank One, N.A. (Chicago)
    
    
    16,835
    
    
    
    22,783
    
    
    
    166,219
    
    
    
    211,189
    
    
    
    10.1
    
    
    
    13.7
    
    
    
    8.0Bank One, N.A. (Columbus)
    
    
    3,625
    
    
    
    6,001
    
    
    
    53,915
    
    
    
    64,011
    
    
    
    6.7
    
    
    
    11.1
    
    
    
    5.7Bank One, Delaware, N.A. (3)
    
    
    2,569
    
    
    
    2,711
    
    
    
    19,050
    
    
    
    17,311
    
    
    
    13.5
    
    
    
    14.2
    
    
    
    14.8December 31, 2002The Corporation (consolidated)
    
    $
    23,918
    
    
    $
    33,119
    
    
    $
    241,468
    
    
    $
    267,321
    
    
    
    9.9
    %
    
    
    13.7
    %
    
    
    8.9
    %Bank One, N.A. (Chicago) (4)
    
    
    17,407
    
    
    
    24,059
    
    
    
    178,171
    
    
    
    215,270
    
    
    
    9.8
    
    
    
    13.5
    
    
    
    8.1Bank One, N.A. (Columbus) (5)
    
    
    3,331
    
    
    
    5,343
    
    
    
    43,299
    
    
    
    59,680
    
    
    
    7.7
    
    
    
    12.3
    
    
    
    5.6Bank One, Delaware, N.A. (3)
    
    
    2,630
    
    
    
    2,756
    
    
    
    17,748
    
    
    
    16,213
    
    
    
    14.8
    
    
    
    15.5
    
    
    
    16.2Well capitalized ratios (6)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6.0
    %
    
    
    10.0
    %
    
    
    5.0
    %(7)Minimum capital ratios (6)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4.0
    
    
    
    8.0
    
    
    
    3.0
 (1)
    
    Tier 1 Capital or Total Capital, as applicable, divided by risk-weighted
assets. Risk-weighted assets include assets and off-balance sheet positions,
weighted by the type of instruments and the risk weight of the counterparty,
collateral or guarantor.(2)
    
    Tier 1 Capital divided by adjusted average
quarterly assets (net of allowance for loan losses, goodwill and certain
intangible assets).(3)
    
    Formerly First USA Bank, N.A.(4)
    
    Restated to show the
effect of the 2003 mergers with Bank One, Oklahoma, N.A and Bank One, Kentucky,
N.A.,(5)
    
    Restated to show the effect of the 2003 mergers with Bank One,
Wheeling-Steubenville, N.A. and Bank One, West Virginia, N.A.(6)
    
    As defined by the regulations issued by the Federal Reserve Board, the FDIC and the OCC.(7)
    
    Represents requirements for bank subsidiaries pursuant to regulations issued
under the Federal Deposit Insurance Corporation Improvement Act. There is no
Tier 1 Leverage component in the definition of a well-capitalized bank holding
company.  
 Note 18  Supplemental Disclosures for Accumulated Other Adjustments to Stockholders Equity
   2003
    
    
    
    2002
    
    
    
    2001(In millions)Fair value
adjustment on investment securitiesavailable for sale:Balance, beginning of period
    
    $
    552
    
    
    $
    78
    
    
    $
    (15
    )Change in fair value, net of taxes of $(142), $323 and $86
for the year ended December 31, 2003, 2002 and 2001, respectively
    
    
    (237
    )
    
    
    560
    
    
    
    158Reclassification adjustment, net of taxes of $68, $(50) and $(38)
for the year ended December 31, 2003, 2002 and 2001, respectively
    
    
    120
    
    
    
    (86
    )
    
    
    (65
    )Balance, end-of-period
    
    
    435
    
    
    
    552
    
    
    
    78Fair value
adjustment on derivative instrumentscash flow type hedges:Balance, beginning of period
    
    
    (560
    )
    
    
    (146
    )
    
    
    Transition adjustment at January 1, 2001, net of tax benefit of $56
    
    
    
    
    
    
    
    
    
    
    (98
    )Net change in fair value associated with current period hedging activities,
net of tax benefits of $120, $425 and $70 for the year ended
December 31, 2003, 2002 and 2001, respectively
    
    
    (199
    )
    
    
    (711
    )
    
    
    (139
    )Reclassification into earnings, net of taxes of $282, $178 and $49
for the year ended December 31, 2003, 2002 and 2001, respectively (1)
    
    
    484
    
    
    
    297
    
    
    
    91Balance, end-of-period
    
    
    (275
    )
    
    
    (560
    )
    
    
    (146
    )Accumulated translation adjustment:Balance, beginning of period
    
    
    
    
    
    
    3
    
    
    
    10Translation gain (loss), net of hedge results and taxes
    
    
    2
    
    
    
    (3
    )
    
    
    (7
    )Balance, end-of-period
    
    
    2
    
    
    
    
    
    
    
    3Minimum pension liability: (2)Balance, beginning of period
    
    
    
    
    
    
    
    
    
    
    Minimum pension loss, net of taxes of $18
    
    
    (35
    )
    
    
    
    
    
    
    Balance, end-of-period
    
    
    (35
    )
    
    
    
    
    
    
    Total accumulated other adjustments to stockholders equity
    
    $
    127
    
    
    $
    (8
    )
    
    $
    (65
    )
 (1)
    
    During 2001, $89 million after-tax of the transition adjustment recorded at
January 1, 2001, was reclassified into earnings.(2)
    
    Relates primarily to the nonqualified supplemental pension plan. 98 BANK ONE 2003 ANNUAL REPORT




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 19  Employee Benefits   2003
    
    2002(In millions)
    
    Qualified
    
    
    Nonqualified
    
    
    Total
    
    
    Qualified
    
    
    Nonqualified
    
    
    TotalChange in benefit obligation:Benefit obligation, January 1
    
    $
    2,419
    
    
    $
    108
    
    
    $
    2,527
    
    
    $
    2,297
    
    
    $
    98
    
    
    $
    2,395Service cost
    
    
    99
    
    
    
    2
    
    
    
    101
    
    
    
    101
    
    
    
    3
    
    
    
    104Interest cost
    
    
    157
    
    
    
    7
    
    
    
    164
    
    
    
    166
    
    
    
    7
    
    
    
    173Actuarial loss
    
    
    225
    
    
    
    6
    
    
    
    231
    
    
    
    182
    
    
    
    16
    
    
    
    198Transfer out of plan
    
    
    
    
    
    
    (2
    )
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    Benefits paid
    
    
    (307
    )
    
    
    (17
    )
    
    
    (324
    )
    
    
    (327
    )
    
    
    (16
    )
    
    
    (343
    )Benefit obligation, December 31 (1)(2)
    
    $
    2,593
    
    
    $
    104
    
    
    $
    2,697
    
    
    $
    2,419
    
    
    $
    108
    
    
    $
    2,527Change in plan assets:Fair value of plan assets, January 1
    
    $
    2,481
    
    
    $
    
    
    
    $
    2,481
    
    
    $
    2,747
    
    
    $
    
    
    
    $
    2,747Actual gain (loss) on plan assets
    
    
    511
    
    
    
    
    
    
    
    511
    
    
    
    (219
    )
    
    
    
    
    
    
    (219
    )Corporation contribution (3)
    
    
    520
    
    
    
    17
    
    
    
    537
    
    
    
    280
    
    
    
    16
    
    
    
    296Benefits paid
    
    
    (307
    )
    
    
    (17
    )
    
    
    (324
    )
    
    
    (327
    )
    
    
    (16
    )
    
    
    (343
    )Fair value of plan assets, December 31
    
    $
    3,205
    
    
    $
    
    
    
    $
    3,205
    
    
    $
    2,481
    
    
    $
    
    
    
    $
    2,481Funded Status
    
    $
    612
    
    
    $
    (104
    )
    
    $
    508
    
    
    $
    62
    
    
    $
    (108
    )
    
    $
    (46
    )Unrecognized net loss
    
    
    807
    
    
    
    49
    
    
    
    856
    
    
    
    829
    
    
    
    49
    
    
    
    878Unrecognized prior service cost
    
    
    16
    
    
    
    10
    
    
    
    26
    
    
    
    20
    
    
    
    14
    
    
    
    34Unrecognized transition obligation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1Net amount recognized, December 31
    
    $
    1,435
    
    
    $
    (45
    )
    
    $
    1,390
    
    
    $
    911
    
    
    $
    (44
    )
    
    $
    867Prepaid benefit cost, December 31
    
    $
    1,435
    
    
    $
    
    
    
    $
    1,435
    
    
    $
    911
    
    
    $
    
    
    
    $
    911Accrued benefit cost, December 31
    
    
    
    
    
    
    (103
    )
    
    
    (103
    )
    
    
    
    
    
    
    (44
    )
    
    
    (44
    )Intangible asset
    
    
    
    
    
    
    10
    
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    Accumulated other adjustments to stockholders equity
    
    
    
    
    
    
    48
    
    
    
    48
    
    
    
    
    
    
    
    
    
    
    
    Net amount recognized, December 31
    
    $
    1,435
    
    
    $
    (45
    )
    
    $
    1,390
    
    
    $
    911
    
    
    $
    (44
    )
    
    $
    867
 (1)
    
    The Corporation acquired Zurich Life effective September 1, 2003, however
no pension obligations or assets were assumed in the acquisition. The employees
assumed in the acquisition will add approximately $2 million to expense in
2004.(2)
    
    The accumulated benefit obligation for the qualified plan at December
31, 2003 and 2002 was $2,515 million and $2,388 million, respectively. The
accumulated benefit obligation for the nonqualified plan at both December 31,
2003 and 2002 was $103 million.(3)
    
    For the qualified pension plan, a discretionary $100 million was
contributed to the qualified plan in January 2004. An additional discretionary
$47 million is expected to be contributed to the qualified plan in 2004,
conditional upon tax deductibility. For the nonqualified plan, $13 million is
expected to be paid to participants from the Corporations assets during 2004. The net periodic pension cost (benefit) for 2003, 2002 and 2001 for the
Corporations qualified and nonqualified supplemental pension plans was as
follows: 2003
    
    2002
    
    2001(In millions)
    
    Qualified
    
    
    Nonqualified
    
    
    Total
    
    
    Qualified
    
    
    Nonqualified
    
    
    Total
    
    
    Qualified
    
    
    Nonqualified
    
    
    TotalService cost-benefits
earned during the year
    
    $
    99
    
    
    $
    2
    
    
    $
    101
    
    
    $
    101
    
    
    $
    3
    
    
    $
    104
    
    
    $
    92
    
    
    $
    4
    
    
    $
    96Interest cost on benefit obligation
    
    
    157
    
    
    
    7
    
    
    
    164
    
    
    
    166
    
    
    
    7
    
    
    
    173
    
    
    
    168
    
    
    
    9
    
    
    
    177Expected return on plan assets
    
    
    (264
    )
    
    
    
    
    
    
    (264
    )
    
    
    (272
    )
    
    
    
    
    
    
    (272
    )
    
    
    (287
    )
    
    
    
    
    
    
    (287
    )Amortization of prior service costs
    
    
    4
    
    
    
    5
    
    
    
    9
    
    
    
    4
    
    
    
    5
    
    
    
    9
    
    
    
    4
    
    
    
    4
    
    
    
    8Recognition of actuarial (gain) loss
    
    
    
    
    
    
    7
    
    
    
    7
    
    
    
    
    
    
    
    5
    
    
    
    5
    
    
    
    (4
    )
    
    
    3
    
    
    
    (1
    )Amortization of transition assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7
    )
    
    
    
    
    
    
    (7
    )Net periodic (benefit) cost
    
    $
    (4
    )
    
    $
    21
    
    
    $
    17
    
    
    $
    (1
    )
    
    $
    20
    
    
    $
    19
    
    
    $
    (34
    )
    
    $
    20
    
    
    $
    (14
    )
  Target Allocation
    
    
    AllocationAt December 31,
    
    
    2004
    
    
    
    2003
    
    
    
    2002Equity securities
    
    
    65
    %
    
    
    63
    %
    
    
    63
    %Debt securities
    
    
    35
    
    
    
    37
    
    
    
    37Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 BANK ONE 2003 ANNUAL REPORT 99




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  
 
   Benefit Obligation (At December 31)
    
    Net Periodic Cost (For the Year Ended December 31)2004
    
    
    
    2003
    
    
    
    2002
    
    
    
    2001
    
    
    
    2004
    
    
    
    2003
    
    
    
    2002
    
    
    
    2001Actuarial assumptions:
    
    Projected
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ProjectedWeighted-average
discount rate
    
    
    6.00
    %
    
    
    6.00
    %
    
    
    6.50
    %
    
    
    7.00
    %
    
    
    6.00
    %
    
    
    6.50
    %
    
    
    7.00
    %
    
    
    7.50
    %Weighted-average rate
of compensation increase
    
    
    4.25
    %
    
    
    4.25
    %
    
    
    4.25
    %
    
    
    4.25
    %
    
    
    4.25
    %
    
    
    4.25
    %
    
    
    4.25
    %
    
    
    4.25
    %Expected long-term rate
of return on plan assets
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    7.50
    %
    
    
    7.50
    %
    
    
    8.50
    %
    
    
    9.50
    %
  (b)
    
    Postretirement Benefits Other Than Pensions  (In millions)
    
    
    2003
    
    
    
    2002Change in benefit obligation:Benefit obligation, January 1
    
    $
    252
    
    
    $
    233Interest cost
    
    
    16
    
    
    
    15Acquisition of Zurich Life (1)
    
    
    5
    
    
    
    Actuarial loss
    
    
    12
    
    
    
    24Benefits paid
    
    
    (20
    )
    
    
    (20
    )Benefit obligation, December 31
    
    $
    265
    
    
    $
    252Change in plan assets:Fair value of plan assets, January 1
    
    $
    80
    
    
    $
    Implementation of retiree VEBA
    
    
    
    
    
    
    76Actual return on plan assets
    
    
    5
    
    
    
    6Corporation contribution (2)
    
    
    25
    
    
    
    18Benefits paid
    
    
    (20
    )
    
    
    (20
    )Fair value of plan assets, December 31
    
    $
    90
    
    
    $
    80Funded status
    
    $
    (175
    )
    
    $
    (172
    )Unrecognized net actuarial loss
    
    
    94
    
    
    
    85Unrecognized prior service cost
    
    
    
    
    
    
    (12
    )Net amount recognized, December 31
    
    $
    (81
    )
    
    $
    (99
    )
 (1)
    
    The Corporation acquired Zurich Life effective September 1, 2003, including
its postretirement obligation of $5 million.(2)
    
    For the Corporations postretirement plans, employer contributions to the
qualified plan in 2004 are expected to be no greater than $16 million. In
addition, $8 million in benefit payments is expected to be paid from the
Corporations assets during 2004.
 For the Year Ended December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001(In millions)Interest cost on
benefit obligation
    
    $
    16
    
    
    $
    15
    
    
    $
    14Expected return
on plan assets
    
    
    (5
    )
    
    
    (3
    )
    
    
    Amortization of
prior service costs
    
    
    (12
    )
    
    
    (12
    )
    
    
    (12
    )Recognition of
actuarial loss
    
    
    3
    
    
    
    3
    
    
    
    Net periodic
postretirement cost
    
    $
    2
    
    
    $
    3
    
    
    $
    2
   100 BANK ONE 2003 ANNUAL REPORT




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The assumptions used in determining the Corporations benefit obligation at
December 31, and net periodic cost for the year ended December 31, for the
postretirement benefit obligation were as follows: Benefit Obligation (At December 31)
    
    Net Periodic Cost (For the Year Ended December 31)2004
    
    
    
    2003
    
    
    
    2002
    
    
    
    2001
    
    
    
    2004
    
    
    
    2003
    
    
    
    2002
    
    
    
    2001Actuarial assumptions:
    
    Projected
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ProjectedWeighted-average
discount rate
    
    
    6.00
    %
    
    
    6.00
    %
    
    
    6.50
    %
    
    
    7.00
    %
    
    
    6.00
    %
    
    
    6.50
    %
    
    
    7.00
    %
    
    
    7.50
    %Expected long-term
rate of return on
plan assets
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    4.75
    %
    
    
    5.40
    %
    
    
    5.40
    %
    
    
    5.40
    %
  (In millions)
    
    1% increase
    
    
    1% decreaseEffect on 2003 service and interest cost components
    
    $
    1
    
    
    $
    (1
    )Effect on December 31, 2003, accumulated postretirement benefit obligation
    
    $
    20
    
    
    $
    (17
    )
  (c) 401(k) Plan  Note 20  Stock-Based Compensation
 For the Year Ended December 31,
    
    
    2003
    
    
    
    2002
    (1)
    
    
    2001(In millions)Net income attributable
to common stockholders
equity(2)
    
    $
    3,535
    
    
    $
    3,295
    
    
    $
    2,628Add: Stock-based employee
compensation expense
included in reported net
income, net of related
tax effects
    
    
    115
    
    
    
    75
    
    
    
    44Deduct: Total stock-based
employee compensation
expense determined under
the fair value method for
all awards, vested during
the year, net of related
tax effects (3)
    
    
    147
    
    
    
    138
    
    
    
    266Pro forma net income
attributable to common
stockholders equity
    
    $
    3,503
    
    
    $
    3,232
    
    
    $
    2,406Earnings per share:Basic  as reported
    
    $
    3.14
    
    
    $
    2.83
    
    
    $
    2.25Basic  pro forma
    
    
    3.11
    
    
    
    2.78
    
    
    
    2.06Diluted  as reported
    
    $
    3.11
    
    
    $
    2.80
    
    
    $
    2.24Diluted  pro forma
    
    
    3.09
    
    
    
    2.76
    
    
    
    2.05
 (1)
    
    In 2002, management refined its methodology in estimating proforma
compensation cost. Accordingly, the 2001 proforma compensation cost has been
adjusted for comparability purposes.(2)
    
    Includes the impact of preferred stock dividends of $10 million in 2001.(3)
    
    Stock option awards granted in 1999 and 2000 were fully vested by early
2002.
   BANK ONE 2003 ANNUAL REPORT 101




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (a) Restricted Shares  (b) Stock Options
 
   For the year ended December 31,
    
    2003
    
    2002
    
    2001Wtd. Avg.
    
    
    
    
    
    
    Wtd. Avg.
    
    
    
    
    
    
    Wtd. Avg.Exercise
    
    
    
    
    
    
    Exercise
    
    
    
    
    
    
    Exercise(Shares in thousands)
    
    Shares
    
    
    Price
    
    
    Shares
    
    
    Price
    
    
    Shares
    
    
    PriceOutstanding at January 1
    
    
    96,112
    
    
    $
    37.57
    
    
    
    90,482
    
    
    $
    35.72
    
    
    
    77,315
    
    
    $
    34.17Granted
    
    
    19,160
    
    
    
    39.51
    
    
    
    20,063
    
    
    
    40.95
    
    
    
    23,573
    
    
    
    37.73Exercised
    
    
    (11,916
    )
    
    
    28.58
    
    
    
    (10,223
    )
    
    
    26.60
    
    
    
    (7,262
    )
    
    
    25.09Forfeited
    
    
    (6,233
    )
    
    
    42.57
    
    
    
    (4,210
    )
    
    
    41.16
    
    
    
    (3,144
    )
    
    
    36.72Outstanding at December 31
    
    
    97,123
    
    
    $
    38.73
    
    
    
    96,112
    
    
    $
    37.57
    
    
    
    90,482
    
    
    $
    35.72Exercisable at December 31
    
    
    52,530
    
    
    $
    38.39
    
    
    
    58,037
    
    
    $
    36.84
    
    
    
    45,525
    
    
    $
    36.30
 At December 31, 2003
    
    Options Outstanding
    
    Options ExercisableWtd. Avg.
    
    
    Wtd. Avg.
    
    
    
    
    
    Wtd. Avg.(Shares in thousands)
    
    Number
    
    
    Exercise
    
    
    Remaining
    
    Number
    
    
    ExerciseRange of Exercise Prices
    
    Outstanding
    
    
    Price
    
    
    Contractual Life
    
    Exercisable
    
    
    PriceLess than $20.00
    
    
    517
    
    
    $
    16.42
    
    
    1.0
    years
    
    
    517
    
    
    $
    16.42$20.01-$25.00
    
    
    1,741
    
    
    
    24.62
    
    
    
    2.4
    
    
    
    1,741
    
    
    
    24.62$25.01-$30.00
    
    
    16,691
    
    
    
    26.61
    
    
    
    11.7
    
    
    
    15,371
    
    
    
    26.46$30.01-$35.00
    
    
    3,633
    
    
    
    32.73
    
    
    
    5.6
    
    
    
    2,531
    
    
    
    32.42$35.01-$40.00
    
    
    40,088
    
    
    
    38.59
    
    
    
    6.2
    
    
    
    11,085
    
    
    
    37.89$40.01-$45.00
    
    
    17,237
    
    
    
    41.36
    
    
    
    8.3
    
    
    
    4,082
    
    
    
    41.60$45.01-$55.00
    
    
    13,998
    
    
    
    49.80
    
    
    
    7.6
    
    
    
    13,985
    
    
    
    49.81Greater than $55.00
    
    
    3,218
    
    
    
    59.08
    
    
    
    4.6
    
    
    
    3,218
    
    
    
    59.08Total
    
    
    97,123
    
    
    $
    38.73
    
    
    7.5
    years
    
    
    52,530
    
    
    $
    38.39
  (c) Employee Stock Purchase Plan
 (d) Fair Value of Stock-Based Compensation
   102 BANK ONE 2003 ANNUAL REPORT




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Summarized stock-based compensation grants and their related weighted-average
grant-date fair values follow: For the Year Ended December 31,
    
    2003
    
    2002
    
    2001Wtd. Avg.
    
    
    
    
    
    
    Wtd. Avg.
    
    
    
    
    
    
    Wtd. Avg.Grant Date
    
    
    
    
    
    
    Grant Date
    
    
    
    
    
    
    Grant DateNumber
    
    
    Fair Value
    
    
    Number
    
    
    Fair Value
    
    
    Number
    
    
    Fair Value(Shares in thousands)
    
    of Shares
    
    
    Per Share
    
    
    of Shares
    
    
    Per Share
    
    
    of Shares
    
    
    Per ShareStock option plans
    
    
    19,160
    
    
    $
    9.44
    
    
    
    20,063
    
    
    $
    12.68
    
    
    
    23,573
    
    
    $
    13.34Restricted shares
    
    
    4,047
    
    
    
    38.37
    
    
    
    3,488
    
    
    
    37.68
    
    
    
    2,065
    
    
    
    37.68Employee stock purchase plan
    
    
    
    
    
    
    
    
    
    
    3,300
    (1)
    
    
    11.48
    
    
    
    2,483
    
    
    
    9.68
 (1)
    
    Estimated number of shares that employees would purchase under the 2002 plan. The following assumptions were used to determine the Black-Scholes
weighted-average grant date fair value of options granted during 2003, 2002 and
2001: Stock Option Plans
    
    Employee Stock Purchase PlanWeighted-average assumptions:
    
    
    2003
    
    
    
    2002
    
    
    
    2001
    
    
    
    2002-2003
    
    
    
    2001Expected dividend yield
    
    
    2.38
    %
    
    
    1.97
    %
    
    
    2.29
    %
    
    
    2.18
    %
    
    
    2.30
    %Expected volatility
    
    
    34.16
    
    
    
    35.84
    
    
    
    36.85
    
    
    
    32.46
    
    
    
    33.80Risk-free interest rate
    
    
    2.47
    
    
    
    4.34
    
    
    
    5.02
    
    
    
    2.75
    
    
    
    2.61Expected life (in years)
    
    
    3.41
    
    
    
    4.88
    
    
    
    4.64
    
    
    
    1.98
    
    
    
    1.50
  Note 21  Income Taxes  For the Year Ended December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001(In millions)Income tax expense (benefit):Current:Federal
    
    $
    1,347
    
    
    $
    1,208
    
    
    $
    797Foreign
    
    
    13
    
    
    
    7
    
    
    
    11State
    
    
    135
    
    
    
    144
    
    
    
    115Total
    
    
    1,495
    
    
    
    1,359
    
    
    
    923Deferred:Federal
    
    
    
    
    
    
    138
    
    
    
    194Foreign
    
    
    
    
    
    
    1
    
    
    
    5State
    
    
    3
    
    
    
    (30
    )
    
    
    (4
    )Total
    
    
    3
    
    
    
    109
    
    
    
    195Applicable income taxes
    
    $
    1,498
    
    
    $
    1,468
    
    
    $
    1,118
   For the Year Ended December 31,
    
    2003
    
    2002
    
    2001(Dollars in millions)Statutory tax rate
    
    $
    1,762
    
    
    
    35.0
    %
    
    $
    1,667
    
    
    
    35.0
    %
    
    $
    1,330
    
    
    
    35.0
    %Increase (decrease) resulting from:State income taxes,
net of federal income tax benefit
    
    
    90
    
    
    
    1.8
    
    
    
    74
    
    
    
    1.6
    
    
    
    72
    
    
    
    1.9Tax-exempt interest
    
    
    (51
    )
    
    
    (1.0
    )
    
    
    (50
    )
    
    
    (1.1
    )
    
    
    (56
    )
    
    
    (1.5
    )Tax credits
    
    
    (314
    )
    
    
    (6.2
    )
    
    
    (287
    )
    
    
    (6.1
    )
    
    
    (231
    )
    
    
    (6.1
    )Cash surrender value of life insurance
    
    
    (53
    )
    
    
    (1.1
    )
    
    
    (54
    )
    
    
    (1.1
    )
    
    
    (57
    )
    
    
    (1.5
    )Other, net
    
    
    64
    
    
    
    1.3
    
    
    
    118
    
    
    
    2.5
    
    
    
    60
    
    
    
    1.6Applicable income taxes
    
    $
    1,498
    
    
    
    29.8
    %
    
    $
    1,468
    
    
    
    30.8
    %
    
    $
    1,118
    
    
    
    29.4
    %
 BANK ONE 2003 ANNUAL REPORT 103




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  For the Year
Ended December 31,
    
    
    2003
    
    
    
    2002(In millions)Deferred tax liabilities:Deferred income on lease financing
    
    $
    3,695
    
    
    $
    4,042Prepaid pension costs
    
    
    486
    
    
    
    315Deferred fee income
    
    
    487
    
    
    
    461Other
    
    
    266
    
    
    
    176Gross deferred tax liabilities
    
    
    4,934
    
    
    
    4,994Deferred tax assets:Allowance for credit losses
    
    
    1,488
    
    
    
    1,691Purchased intangibles
    
    
    215
    
    
    
    289Deferred compensation
    
    
    284
    
    
    
    257Other
    
    
    883
    
    
    
    678Gross deferred tax assets
    
    
    2,870
    
    
    
    2,915Net deferred tax liability
    
    $
    2,064
    
    
    $
    2,079
  Note 22  Lease Commitments  At
December 31, 2003(In millions)2004
    
    $
    2192005
    
    
    2072006
    
    
    1872007
    
    
    1642008
    
    
    1502009 and thereafter
    
    
    879Total
    
    $
    1,806
  Note 23  Financial Instruments with Off-Balance Sheet Risk
 (a) Collateral and Other Security Arrangements  (b) Credit-Related Financial Instruments  At December 31,
    
    
    2003
    
    
    
    2002(In millions)Unused credit card lines
    
    $
    348,037
    
    
    $
    337,470Unused loan commitments
    
    
    109,001
    
    
    
    134,844Commercial letters of credit
    
    
    840
    
    
    
    545
   104 BANK ONE 2003 ANNUAL REPORT




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  
 (c) Financial Guarantees
   For the Year Ended December 31,
    
    2003
    
    2002Contract
    
    
    Carrying
    
    
    Contract
    
    
    Carrying(In millions)
    
    Amount
    
    
    Value
    (3)
    
    Amount
    
    
    Value
    (3)Standby letters of credit and foreign office guarantees (1)(2)
    
    $
    25,874
    
    
    $
    291
    
    
    $
    23,979
    
    
    $
    218Loans sold with recourse
    
    
    2,620
    
    
    
    10
    
    
    
    4,742
    
    
    
    10Swap guarantees
    
    
    102
    
    
    
    4
    
    
    
    222
    
    
    
    9Asset purchase agreements (4)
    
    
    2,155
    
    
    
    
    
    
    
    2,453
    
    
    
    
 (1)
    
    The contract amount of financial standby letters of credit and foreign
office guarantees and performance standby letters of credit and foreign office
guarantees totaled $22.6 billion and $3.3 billion and $20.4 billion and $3.6
billion at December 31, 2003 and 2002, respectively.(2)
    
    Includes $8.8 billion and $7.1 billion at December 31, 2003, and December
31, 2002, respectively, participated to other institutions.(3)
    
    The carrying value of financial guarantees includes amounts deferred and
recognized in income over the life of the contract and amounts accrued for
inherent losses in accordance with FASB Statement No. 5, Accounting for
Contingencies (SFAS No. 5). These amounts are reported in other liabilities.(4)
    
    Certain asset purchase agreements entered into in conjunction with the
Corporations asset-backed conduit programs qualify as financial guarantees
under this new accounting guidance due to the specific structure of certain of
these agreements. For additional discussion of the asset purchase agreements
and the related off-balance sheet exposures, see pages 74-76.  Contract
    
    
    Carrying(In millions)
    
    Amount
    
    
    ValueLoans
    
    $
    9,467
    
    
    $
    206Commodities
    
    
    551
    
    
    
    (15
    )Equities
    
    
    55
    
    
    
    (6
    )Other
    
    
    4,425
    
    
    
    (7
    )
 Note 24  Fair Value of Financial Instruments
   BANK ONE 2003 ANNUAL REPORT 105




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  
 
    At December 31,
    
    2003
    
    2002Carrying
    
    
    Estimated
    
    
    Carrying
    
    
    Estimated(In millions)
    
    Value
    
    
    Fair Value
    
    
    Value
    
    
    Fair ValueFinancial assets:Cash and other short-term financial instruments (a)
    
    $
    35,951
    
    
    $
    35,951
    
    
    $
    37,001
    
    
    $
    37,001Trading assets (a)
    
    
    11,584
    
    
    
    11,584
    
    
    
    7,190
    
    
    
    7,190Investment securities (b)
    
    
    84,951
    
    
    
    84,951
    
    
    
    67,643
    
    
    
    67,643Loans (c)
    
    
    138,147
    
    
    
    135,557
    
    
    
    148,125
    
    
    
    146,649Allowance for loan losses
    
    
    (3,472
    )
    
    
    
    
    
    
    (3,923
    )
    
    
    Loans, net
    
    
    134,675
    
    
    
    135,557
    
    
    
    144,202
    
    
    
    146,649Derivative product assets (f)
    
    
    5,208
    
    
    
    5,208
    
    
    
    4,273
    
    
    
    4,273Financial instruments in other assets (a)
    
    
    1,371
    
    
    
    1,371
    
    
    
    1,315
    
    
    
    1,315Financial liabilities:Deposits (d)
    
    
    164,621
    
    
    
    165,421
    
    
    
    170,008
    
    
    
    171,312Securities sold not yet purchased (a)
    
    
    3,618
    
    
    
    3,618
    
    
    
    1,957
    
    
    
    1,957Other short-term financial instruments (a)
    
    
    64,913
    
    
    
    64,913
    
    
    
    25,149
    
    
    
    25,149Long-term debt (1) (e)
    
    
    46,764
    
    
    
    48,656
    
    
    
    43,234
    
    
    
    46,090Derivative product liabilities (f)
    
    
    4,050
    
    
    
    4,050
    
    
    
    3,838
    
    
    
    3,838Financial instruments in other liabilities (a)
    
    
    1,268
    
    
    
    1,268
    
    
    
    1,532
    
    
    
    1,532
 (1)
    
    Includes trust preferred capital securities.  
 
   106 BANK ONE 2003 ANNUAL REPORT




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  Note
25  Related Party Transactions  Note
26  Pledged Assets
 Note
27  Collateral Policy Related to Certain Asset Transfer Activity   Note
28  Contingent Liabilities
   BANK ONE 2003 ANNUAL REPORT 107




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 29  Parent Company Only Condensed Financial Statements
 
Condensed Balance Sheets At December 31,
    
    
    2003
    
    
    
    2002(In millions)AssetsCash and due from banks:Bank subsidiaries
    
    $
    14
    
    
    $
    6Interest-bearing due from banks:Bank subsidiaries
    
    
    3,907
    
    
    
    7,128Securities purchased under resale agreement
    
    
    52
    
    
    
    50Investment securities
    
    
    36
    
    
    
    20Loans and receivables-subsidiaries:Bank subsidiaries
    
    
    5,660
    
    
    
    5,304Nonbank subsidiaries
    
    
    9,764
    
    
    
    7,096Investment in subsidiaries:Bank subsidiaries
    
    
    24,550
    
    
    
    24,943Nonbank subsidiaries
    
    
    2,910
    
    
    
    1,630Other assets
    
    
    784
    
    
    
    834Total assets
    
    $
    47,677
    
    
    $
    47,011Liabilities and Stockholders EquityShort-term borrowings:Nonbank subsidiaries
    
    $
    67
    
    
    $
    63Other
    
    
    141
    
    
    
    457Long-term debt:Nonbank subsidiaries
    
    
    3,412
    
    
    
    3,411Other
    
    
    19,154
    
    
    
    19,407Other liabilities
    
    
    1,484
    
    
    
    1,233Total liabilities
    
    
    24,258
    
    
    
    24,571Stockholders equity
    
    
    23,419
    
    
    
    22,440Total liabilities and stockholders equity
    
    $
    47,677
    
    
    $
    47,011
 Condensed Income Statements For the Year Ended December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001(In millions)Operating Income:Dividends:Bank subsidiaries
    
    $
    3,553
    
    
    $
    1,634
    
    
    $
    1,645Nonbank subsidiaries
    
    
    371
    
    
    
    57
    
    
    
    209Interest income:Bank subsidiaries
    
    
    196
    
    
    
    289
    
    
    
    655Nonbank subsidiaries
    
    
    348
    
    
    
    316
    
    
    
    381Other
    
    
    3
    
    
    
    1
    
    
    
    3Other income (loss):Bank subsidiaries
    
    
    (56
    )
    
    
    1
    
    
    
    5Other
    
    
    (8
    )
    
    
    (11
    )
    
    
    (2
    )Total operating income
    
    
    4,407
    
    
    
    2,287
    
    
    
    2,896Operating Expense:Interest expense:Nonbank subsidiaries
    
    
    250
    
    
    
    253
    
    
    
    234Other
    
    
    792
    
    
    
    943
    
    
    
    1,308Restructuring-related reversals
    
    
    
    
    
    
    (12
    )
    
    
    (12
    )Salaries and employee benefits
    
    
    
    
    
    
    
    
    
    
    (1
    )Professional fees and services
    
    
    
    
    
    
    
    
    
    
    2Other expense
    
    
    177
    
    
    
    5
    
    
    
    34Total operating expense
    
    
    1,219
    
    
    
    1,189
    
    
    
    1,565Income before income taxes and cumulative effect of change in
accounting principle and equity in undistributed net income of subsidiaries
    
    
    3,188
    
    
    
    1,098
    
    
    
    1,331Applicable income tax benefit
    
    
    (284
    )
    
    
    (224
    )
    
    
    (202
    )Income before cumulative effect of change in accounting principle
and equity in undistributed net income of subsidiaries
    
    
    3,472
    
    
    
    1,322
    
    
    
    1,533Equity in undistributed net income (loss) of subsidiaries:Bank subsidiaries
    
    
    (130
    )
    
    
    2,181
    
    
    
    1,300Nonbank subsidiaries
    
    
    193
    
    
    
    (208
    )
    
    
    (151
    )Income before cumulative effect of change in accounting principle
    
    
    3,535
    
    
    
    3,295
    
    
    
    2,682Cumulative effect of change in accounting principle, net of taxes ($25)
    
    
    
    
    
    
    
    
    
    
    (44
    )Net income
    
    $
    3,535
    
    
    $
    3,295
    
    
    $
    2,638
 108 BANK ONE 2003 ANNUAL REPORT




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 30  Continued-Parent Company Only Condensed Financial Statements
Condensed Statements of Cash Flows For the Year Ended December 31,
    
    
    2003
    
    
    
    2002
    
    
    
    2001(In millions)Cash Flows from Operating Activities:Net income
    
    $
    3,535
    
    
    $
    3,295
    
    
    $
    2,638Adjustments to reconcile net income to net cash provided by operating activities:Equity in net income of subsidiaries
    
    
    (3,987
    )
    
    
    (3,664
    )
    
    
    (3,003
    )Cumulative effect of accounting change of subsidiaries
    
    
    
    
    
    
    
    
    
    
    69Dividends received from subsidiaries
    
    
    3,924
    
    
    
    1,691
    
    
    
    1,854Other operating adjustments
    
    
    (87
    )
    
    
    1,123
    
    
    
    68Net cash provided by operating activities
    
    
    3,385
    
    
    
    2,445
    
    
    
    1,626Cash Flows from Investing Activities:Change in loans to subsidiaries
    
    
    (2,993
    )
    
    
    1,550
    
    
    
    (435
    )Change in capital investments in subsidiaries
    
    
    (702
    )
    
    
    (262
    )
    
    
    (412
    )Purchase of investment securities-available for sale
    
    
    (62
    )
    
    
    (15
    )
    
    
    (79
    )Proceeds from sales and maturities of investment securities-available for sale
    
    
    2
    
    
    
    16
    
    
    
    189Other, net
    
    
    42
    
    
    
    (19
    )
    
    
    (30
    )Net cash (used in) provided by investing activities
    
    
    (3,713
    )
    
    
    1,270
    
    
    
    (767
    )Cash Flows from Financing Activities:Change in commercial paper and short-term borrowings
    
    
    (318
    )
    
    
    (100
    )
    
    
    (624
    )Proceeds from issuance of long-term debt
    
    
    3,019
    
    
    
    1,854
    
    
    
    6,414Redemption and repayment of long-term debt
    
    
    (2,882
    )
    
    
    (4,375
    )
    
    
    (5,495
    )Dividends paid
    
    
    (1,005
    )
    
    
    (982
    )
    
    
    (991
    )Proceeds from issuance of common and treasury stock
    
    
    370
    
    
    
    292
    
    
    
    191Purchase of treasury stock
    
    
    (2,069
    )
    
    
    (617
    )
    
    
    (78
    )Payment for redemption of preferred stock
    
    
    
    
    
    
    
    
    
    
    (190
    )Net cash used in financing activities
    
    
    (2,885
    )
    
    
    (3,928
    )
    
    
    (773
    )Net (Decrease) Increase in Cash and Cash Equivalents
    
    
    (3,213
    )
    
    
    (213
    )
    
    
    86Cash and Cash Equivalents at Beginning of Year
    
    
    7,134
    
    
    
    7,347
    
    
    
    7,261Cash and Cash Equivalents at End of Year
    
    $
    3,921
    
    
    $
    7,134
    
    
    $
    7,347Other Cash Flow Disclosures:Interest paid
    
    $
    1,031
    
    
    $
    1,246
    
    
    $
    1,501Income tax received
    
    
    (195
    )
    
    
    (539
    )
    
    
    (374
    )
 BANK ONE 2003 ANNUAL REPORT 109




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 31 Quarterly Financial Data (Unaudited) 2003
    
    2002Fourth
    
    Third
    
    Second
    
    First
    
    Fourth
    
    Third
    
    Second
    
    First(In millions, except per share data,
ratios, and headcount)Income Statement Data:Total revenue, net of interest expense
    
    $
    4,113
    
    
    $
    4,084
    
    
    $
    4,072
    
    
    $
    3,943
    
    
    $
    4,197
    
    
    $
    4,154
    
    
    $
    4,250
    
    
    $
    4,134Net interest income
fully taxable-equivalent (FTE)
basis(1)
    
    
    2,154
    
    
    
    2,127
    
    
    
    2,009
    
    
    
    2,021
    
    
    
    2,180
    
    
    
    2,226
    
    
    
    2,069
    
    
    
    2,225Noninterest income
    
    
    2,004
    
    
    
    1,998
    
    
    
    2,102
    
    
    
    1,959
    
    
    
    2,053
    
    
    
    1,966
    
    
    
    2,217
    
    
    
    1,944Provision for credit losses
    
    
    672
    
    
    
    416
    
    
    
    461
    
    
    
    496
    
    
    
    628
    
    
    
    587
    
    
    
    607
    
    
    
    665Noninterest expense
    
    
    2,656
    
    
    
    2,421
    
    
    
    2,403
    
    
    
    2,297
    
    
    
    2,371
    
    
    
    2,404
    
    
    
    2,427
    
    
    
    2,344Income from continuing operations
    
    
    593
    
    
    
    874
    
    
    
    847
    
    
    
    811
    
    
    
    832
    
    
    
    813
    
    
    
    835
    
    
    
    776Income from discontinued operations
    
    
    385
    
    
    
    9
    
    
    
    9
    
    
    
    7
    
    
    
    10
    
    
    
    10
    
    
    
    8
    
    
    
    11Net income
    
    
    978
    
    
    
    883
    
    
    
    856
    
    
    
    818
    
    
    
    842
    
    
    
    823
    
    
    
    843
    
    
    
    787Per Common Share Data:Basic
earnings per share:Income from continuing operations
    
    $
    0.53
    
    
    $
    0.78
    
    
    $
    0.75
    
    
    $
    0.70
    
    
    $
    0.72
    
    
    $
    0.70
    
    
    $
    0.71
    
    
    $
    0.66Income from discontinued operations
    
    
    0.35
    
    
    
    0.01
    
    
    
    0.01
    
    
    
    0.01
    
    
    
    0.01
    
    
    
    0.01
    
    
    
    0.01
    
    
    
    0.01Net income
    
    $
    0.88
    
    
    $
    0.79
    
    
    $
    0.76
    
    
    $
    0.71
    
    
    $
    0.73
    
    
    $
    0.71
    
    
    $
    0.72
    
    
    $
    0.67Diluted
earnings per share:Income from continuing operations
    
    $
    0.53
    
    
    $
    0.78
    
    
    $
    0.74
    
    
    $
    0.70
    
    
    $
    0.71
    
    
    $
    0.69
    
    
    $
    0.70
    
    
    $
    0.66Income from discontinued operations
    
    
    0.34
    
    
    
    0.01
    
    
    
    0.01
    
    
    
    0.01
    
    
    
    0.01
    
    
    
    0.01
    
    
    
    0.01
    
    
    
    0.01Net income
    
    
    0.87
    
    
    
    0.79
    
    
    
    0.75
    
    
    
    0.71
    
    
    
    0.72
    
    
    
    0.70
    
    
    
    0.71
    
    
    
    0.67Cash dividends declared
    
    
    0.25
    
    
    
    0.25
    
    
    
    0.21
    
    
    
    0.21
    
    
    
    0.21
    
    
    
    0.21
    
    
    
    0.21
    
    
    
    0.21Book value
    
    
    20.92
    
    
    
    20.05
    
    
    
    19.70
    
    
    
    19.44
    
    
    
    19.28
    
    
    
    18.79
    
    
    
    18.37
    
    
    
    17.81Balance Sheet Data 
Ending Balances:Loans
    
    $
    138,147
    
    
    $
    141,710
    
    
    $
    144,583
    
    
    $
    144,747
    
    
    $
    148,125
    
    
    $
    150,389
    
    
    $
    147,728
    
    
    $
    152,126Total assets
    
    
    326,563
    
    
    
    290,473
    
    
    
    299,999
    
    
    
    288,464
    
    
    
    277,985
    
    
    
    274,755
    
    
    
    270,912
    
    
    
    263,516Deposits
    
    
    164,621
    
    
    
    163,411
    
    
    
    172,015
    
    
    
    167,075
    
    
    
    170,008
    
    
    
    164,036
    
    
    
    157,518
    
    
    
    158,803Long-term debt (2)
    
    
    46,764
    
    
    
    44,225
    
    
    
    46,070
    
    
    
    44,950
    
    
    
    43,234
    
    
    
    42,481
    
    
    
    43,756
    
    
    
    44,194Common stockholders equity
    
    
    23,419
    
    
    
    22,411
    
    
    
    22,257
    
    
    
    22,316
    
    
    
    22,440
    
    
    
    21,925
    
    
    
    21,563
    
    
    
    20,913Total stockholders equity
    
    
    23,419
    
    
    
    22,411
    
    
    
    22,257
    
    
    
    22,316
    
    
    
    22,440
    
    
    
    21,925
    
    
    
    21,563
    
    
    
    20,913Credit Quality Ratios:Net charge-offs to average loans
    
    
    3.11
    %
    
    
    1.50
    %
    
    
    1.35
    %
    
    
    1.35
    %
    
    
    1.65
    %
    
    
    1.55
    %
    
    
    1.62
    %
    
    
    1.71
    %Allowance for loan losses to period
end loans
    
    
    2.75
    
    
    
    2.98
    
    
    
    2.95
    
    
    
    2.87
    
    
    
    2.78
    
    
    
    2.77
    
    
    
    2.78
    
    
    
    2.68Allowance for credit losses
to period end loans
    
    
    3.14
    
    
    
    3.34
    
    
    
    3.35
    
    
    
    3.31
    
    
    
    3.20
    
    
    
    3.17
    
    
    
    3.19
    
    
    
    3.06Nonperforming assets to related
assets(3)
    
    
    1.73
    
    
    
    2.06
    
    
    
    2.28
    
    
    
    2.38
    
    
    
    2.38
    
    
    
    2.48
    
    
    
    2.65
    
    
    
    2.58Financial Performance:Return on average assets
    
    
    1.38
    %
    
    
    1.23
    %
    
    
    1.24
    %
    
    
    1.22
    %
    
    
    1.23
    %
    
    
    1.24
    %
    
    
    1.32
    %
    
    
    1.21
    %Return on average common equity
    
    
    16.8
    
    
    
    15.8
    
    
    
    15.3
    
    
    
    14.7
    
    
    
    15.0
    
    
    
    14.8
    
    
    
    15.7
    
    
    
    15.3Net interest margin
    
    
    3.50
    
    
    
    3.45
    
    
    
    3.37
    
    
    
    3.45
    
    
    
    3.65
    
    
    
    3.83
    
    
    
    3.67
    
    
    
    3.89Efficiency ratio
    
    
    63.9
    
    
    
    58.7
    
    
    
    58.5
    
    
    
    57.7
    
    
    
    56.0
    
    
    
    57.3
    
    
    
    56.6
    
    
    
    56.2Headcount(4)
    
    
    71,196
    
    
    
    71,240
    
    
    
    72,323
    
    
    
    74,077
    
    
    
    73,685
    
    
    
    73,535
    
    
    
    73,579
    
    
    
    73,864Capital Ratios:Risk-based capital:Tier 1
    
    
    10.0
    %
    
    
    9.8
    %
    
    
    9.7
    %
    
    
    10.0
    %
    
    
    9.9
    %
    
    
    9.5
    %
    
    
    9.4
    %
    
    
    9.0
    %Total
    
    
    13.7
    
    
    
    13.5
    
    
    
    13.6
    
    
    
    13.8
    
    
    
    13.7
    
    
    
    13.0
    
    
    
    13.0
    
    
    
    12.7Leverage
    
    
    8.8
    
    
    
    8.4
    
    
    
    8.7
    
    
    
    8.9
    
    
    
    8.9
    
    
    
    9.0
    
    
    
    9.1
    
    
    
    8.6Common Stock Data:Average shares outstanding:Basic
    
    
    1,109
    
    
    
    1,115
    
    
    
    1,132
    
    
    
    1,148
    
    
    
    1,157
    
    
    
    1,162
    
    
    
    1,174
    
    
    
    1,170Diluted
    
    
    1,122
    
    
    
    1,124
    
    
    
    1,140
    
    
    
    1,156
    
    
    
    1,166
    
    
    
    1,171
    
    
    
    1,184
    
    
    
    1,179Stock price:High
    
    $
    45.70
    
    
    $
    40.06
    
    
    $
    39.99
    
    
    $
    38.70
    
    
    $
    40.05
    
    
    $
    41.20
    
    
    $
    42.53
    
    
    $
    42.45Low
    
    
    39.44
    
    
    
    37.02
    
    
    
    34.90
    
    
    
    33.94
    
    
    
    32.59
    
    
    
    32.90
    
    
    
    37.02
    
    
    
    34.56Close
    
    
    45.59
    
    
    
    38.65
    
    
    
    37.18
    
    
    
    34.62
    
    
    
    36.55
    
    
    
    37.40
    
    
    
    38.48
    
    
    
    41.78
 (1)
    
    Net interest income-FTE includes taxable equivalent adjustments of $45
million, $41 million, $39 million and $37 million for quarters ended December
31, 2003, September 30, 2003, June 30, 2003 and March 31, 2003, respectively.
Net interest income-FTE includes taxable equivalent adjustments of $36 million,
$38 million, $36 million and $35 million for quarters ended December 31, 2002,
September 30, 2002, June 30, 2002 and March 31, 2002, respectively.(2)
    
    Includes trust preferred capital securities.(3)
    
    Related assets consist of loans outstanding, including loans held for sale,
and other real estate owned. 110 BANK ONE 2003 ANNUAL REPORT




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  Note 32  Subsequent Events
 
   REPORT OF MANAGEMENT  
 (-s- James Dimon)
 James Dimon
 (-s- Heidi Miller)
 Heidi Miller
   BANK ONE 2003 ANNUAL REPORT 111




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##### 



REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS  
 (-s- KPMG)
   112 BANK ONE 2003 ANNUAL REPORT




---



##### 



SELECTED STATISTICAL INFORMATION Bank
One Corporation and Subsidiaries
 Common Stock and Stockholder Data(1) (2)
    
    
    2003
    
    
    
    2002
    
    
    
    2001
    
    
    
    2000
    
    
    
    1999Market price:High for the year
    
    $
    45.70
    
    
    $
    42.53
    
    
    $
    39.85
    
    
    $
    38.81
    
    
    $
    63.13Low for the year
    
    
    33.94
    
    
    
    32.59
    
    
    
    28.00
    
    
    
    24.25
    
    
    
    29.98At year-end
    
    
    45.59
    
    
    
    36.55
    
    
    
    39.05
    
    
    
    36.63
    
    
    
    32.00Book value (at year-end)
    
    
    20.92
    
    
    
    19.28
    
    
    
    17.33
    
    
    
    15.90
    
    
    
    17.34Dividend payout ratio
    
    
    30
    %
    
    
    30
    %
    
    
    38
    %
    
    
    N/M
    
    
    
    57
    %Financial Ratios:Net income (loss) as a percentage of: (3)Average stockholders equity
    
    
    15.6
    %
    
    
    15.2
    %
    
    
    13.4
    %
    
    
    (2.6
    )%
    
    
    17.0
    %Average common stockholders equity
    
    
    15.6
    
    
    
    15.2
    
    
    
    13.5
    
    
    
    (2.6
    )
    
    
    17.2Average total assets
    
    
    1.3
    
    
    
    1.3
    
    
    
    1.0
    
    
    
    (0.2
    )
    
    
    1.4Average earning assets
    
    
    1.5
    
    
    
    1.4
    
    
    
    1.1
    
    
    
    (0.2
    )
    
    
    1.6Stockholders equity at year-end as a percentage of:Total assets at year-end
    
    
    7.2
    
    
    
    8.1
    
    
    
    7.5
    
    
    
    6.9
    
    
    
    7.5Total loans at year-end
    
    
    17.0
    
    
    
    15.1
    
    
    
    12.9
    
    
    
    10.7
    
    
    
    12.3Total deposits at year-end
    
    
    14.2
    
    
    
    13.2
    
    
    
    12.1
    
    
    
    11.2
    
    
    
    12.4Average stockholders equity as a percentage of:Average total assets
    
    
    8.1
    
    
    
    8.2
    
    
    
    7.3
    
    
    
    7.2
    
    
    
    8.0Average loans
    
    
    15.7
    
    
    
    14.4
    
    
    
    11.6
    
    
    
    11.4
    
    
    
    13.0Average deposits
    
    
    14.0
    
    
    
    13.6
    
    
    
    12.0
    
    
    
    12.0
    
    
    
    13.2Income from
continuing operations to fixed charges: (4)Excluding interest on deposits
    
    
    2.8x
    
    
    
    2.8x
    
    
    
    1.9x
    
    
    
    0.8x
    
    
    
    2.3xIncluding interest on deposits
    
    
    2.0x
    
    
    
    1.9x
    
    
    
    1.4x
    
    
    
    0.9x
    
    
    
    1.6x
 N/M Not meaningful.(1)
    
    There were 100,492 registered common stockholders of record as of December
31, 2003.(2)
    
    The principal market for the Corporations common stock is the New York
Stock Exchange. The Corporations common stock is also listed on the Chicago
Stock Exchange.(3)
    
    Does not include a deduction for preferred dividends.(4)
    
    Results for the year ended December 31, 2000, were insufficient to cover
fixed charges. The coverage deficiency was approximately $1.3 billion. BANK ONE 2003 ANNUAL REPORT 113