JP Morgan Chase 2009 Annual Report Download - page 110

Management’s discussion and analysis
JPMorgan Chase & Co./2009 Annual Report
108
The following table presents additional information on the wholesale real estate industry for the periods ended December 31, 2009 and 2008.
December 31, 2009
(in millions, except ratios)
Credit
exposure
% of credit
portfolio
Criticized
exposure
Nonperforming
loans
% of nonperforming
loans to total loans(b)
Net charge-offs/
(recoveries)
% of net
charge-offs
to total loans
(b)
Commercial real estate subcategories
Multi-family
$ 32,073 47% $ 3,986 $ 1,109 3.57% $ 199 0.64 %
Commercial lessors
18,512 27 4,017 1,057 6.97 232 1.53
Commercial construction and development
6,593 10 1,518 313 6.81 105 2.28
Other(a)
11,331 16 2,454 409 6.44 152 2.39
Total commercial real estate
$ 68,509 100% $ 11,975 $ 2,888 5.05% $ 688 1.20 %
December 31, 2008
(in millions, except ratios)
Credit
exposure
% of credit
portfolio
Criticized
exposure
Nonperforming
loans
% of nonperforming
loans to total loans(b)
Net charge-offs/
(recoveries)
% of net
charge-offs
to total loans
(b)
Commercial real estate subcategories
Multi-family $ 36,188 45% $ 1,191 $ 293 0.87% $ (1) — %
Commercial lessors 21,037 26 1,649 74 0.43 4 0.02
Commercial construction and development
6,688 8 706 82 1.95 4 0.10
Other(a) 16,371 21 2,415 357 3.89 205 2.23
Total commercial real estate
$ 80,284 100% $ 5,961 $ 806 1.25% $ 212 0.33 %
(a) Other includes lodging, REITs, single family, homebuilders and other real estate.
(b) Ratios were calculated using end-of-period retained loans of $57.2 billion and $64.5 billion for the years ended December 31, 2009 and 2008, respectively.
• Banks and finance companies: Exposure to this industry de-
creased by 28% or $21.5 billion from 2008, primarily as a result
of lower derivative exposure to commercial banks.
• Automotive: Conditions in the U.S. had improved by the end of
2009, largely as a result of the government supported restructur-
ing of General Motors and Chrysler in the first half of 2009 and the
related effects on automotive suppliers. Exposure to this industry
decreased by 18% or $2.1 billion and criticized exposure de-
creased 30% or $535 million from 2008, largely due to loan re-
payments and sales. Most of the Firm’s remaining criticized
exposure in this segment remains performing and is substantially
secured.
• Leisure: Exposure to this industry decreased by 16% or $1.3
billion from 2008 due to loan repayments and sales, primarily in
gaming. While exposure to this industry declined, the criticized
component remained elevated due to the continued weakness in
the industry, particularly in gaming. The gaming portfolio contin-
ues to be managed actively.
• All other: All other in the wholesale credit exposure concentration
table on pages 106–107 of this Annual Report at December 31,
2009 (excluding loans held-for-sale and loans at fair value) in-
cluded $135.8 billion of credit exposure to seven industry seg-
ments. Exposures related to SPEs and to Individuals, Private
Education & Civic Organizations were 44% and 47%, respectively,
of this category. SPEs provide secured financing (generally backed
by receivables, loans or bonds) originated by a diverse group of
companies in industries that are not highly correlated. For further
discussion of SPEs, see Note 16 on pages 214–222 of this Annual
Report. The remaining all other exposure is well-diversified across
industries and none comprise more than 1.0% of total exposure.
Loans
The following table presents wholesale loans and nonperforming assets by business segment as of December 31, 2009 and 2008.
December 31, 2009
Loans Nonperforming
Assets acquired in loan
satisfactions
(in millions) Retained
Held-for-sale
and fair value Total Loans Derivatives
Real estate
owned Other
Nonperforming
assets
Investment Bank $ 45,544 $ 3,567 $ 49,111 $ 3,504 $ 529(b) $ 203 $ — $ 4,236
Commercial Banking 97,108 324 97,432 2,801 — 187 1 2,989
Treasury & Securities Services 18,972 — 18,972 14 — — — 14
Asset Management 37,755 — 37,755 580 — 2 — 582
Corporate/Private Equity 698 207 905 5 — — — 5
Total $ 200,077 $ 4,098 $ 204,175 $ 6,904(a) $ 529 $ 392 $ 1 $ 7,826