JP Morgan Chase 2009 Annual Report Download - page 215

JPMorgan Chase & Co./2009 Annual Report 213
Loan delinquencies and net charge-offs
The table below includes information about delinquencies, net charge-offs/(recoveries) and components of reported and securitized finan-
cial assets at December 31, 2009 and 2008.
Year ended December 31, Credit exposure
Nonperforming loans(h)(i)
90 days or more past
due and still accr
uing(i)
Net loan charge-offs
(in millions) 2009 2008 2009 2008 2009
2008
2009 2008
Consumer loans – excluding
purchased credit-impaired
loans and loans held-for-sale:
Home equity – senior lien
$ 27,376 $ 29,793
$ 477 $ 291
$ —
$ —
$ 234
$ 86
Home equity – junior lien 74,049 84,542 1,188 1,103 — — 4,448 2,305
Prime mortgage(a) 66,892 72,266 4,355 1,895
—
—
1,894
526
Subprime mortgage 12,526 15,330 3,248 2,690 — — 1,648 933
Option ARMs 8,536 9,018 312 10 — — 63 —
Auto loans 46,031 42,603 177 148 — — 627 568
Credit card(b) 78,786 104,746 3 4
3,481
2,649
9,634
4,556
All other loans 31,700 33,715 900 430 542 463 1,285 459
Total consumer loans 345,896 392,013 10,660 6,571 4,023 3,112 19,833 9,433
Consumer loans – purchased
credit-impaired(c)
Home equity 26,520 28,555 NA NA NA NA NA NA
Prime mortgage 19,693 21,855 NA NA NA NA NA NA
Subprime mortgage 5,993 6,760 NA NA NA NA NA NA
Option ARMs 29,039 31,643 NA NA NA NA NA NA
Total consumer loans –
purchased credit-impaired(c) 81,245 88,813 NA NA
NA
NA
NA
NA
Total consumer loans – retained 427,141 480,826 10,660 6,571 4,023 3,112 19,833 9,433
Loans held-for-sale(d) 2,142 2,028 — —
—
—
—
—
Total consumer loans – reported 429,283 482,854 10,660 6,571 4,023 3,112 19,833 9,433
Total wholesale loans 204,175 262,044 6,904(j) 2,382(j) 332 163
3,132
402
Total loans reported 633,458 744,898 17,564 8,953 4,355 3,275 22,965 9,835
Securitized loans:
Residential mortgage:
Prime mortgage(a) 171,547 212,274 33,838 21,130
—
—
9,333
5,645
Subprime mortgage 47,261 58,607 19,505 13,301 — — 7,123 4,797
Option ARMs 41,983 48,328 10,973 6,440 — — 2,287 270
Automobile 218 791 1 2 — — 4 15
Credit card 84,626 85,571 — — 2,385 1,802 6,443 3,612
Student 1,008 1,074 — — 64 66 1 1
Commercial and other 24,799 45,677 1,244 166 — 28 15 8
Total loans securitized(e) 371,442 452,322 65,561 41,039
2,449
1,896
25,206
14,348
Total loans reported and
securitized(f) $ 1,004,900(g) $ 1,197,220(g)
$ 83,125 $ 49,992
$ 6,804 $ 5,171 $ 48,171 $ 24,183
(a) Includes Alt-A loans.
(b) Includes billed finance charges and fees net of an allowance for uncollectible amounts, and $1.0 billion of loans at December 31, 2009, held by the Washington Mutual Master
Trust, which were consolidated onto the Firm’s Consolidated Balance Sheets at fair value during the second quarter of 2009.
(c) Purchased credit-impaired loans represent loans acquired in the Washington Mutual transaction for which a deterioration in credit quality occurred between the origination date
and JPMorgan Chase’s acquisition date. These loans were initially recorded at fair value and accrete interest income over the estimated life of the loan when cash flows are rea-
sonably estimable, even if the underlying loans are contractually past due. For additional information, see Note 13 on pages 200–204 of this Annual Report.
(d) Includes loans for prime mortgages and other (largely student loans) of $450 million and $1.7 billion at December 31, 2009, respectively, and $206 million and $1.8 billion at
December 31, 2008, respectively.
(e) Total assets held in securitization-related SPEs were $541.4 billion and $640.8 billion at December 31, 2009 and 2008, respectively. The $371.4 billion and $452.3 billion of loans
securitized at December 31, 2009 and 2008, respectively, excludes: $145.0 billion and $152.4 billion of securitized loans, in which the Firm has no continuing involvement; $16.7
billion and $33.3 billion of seller’s interests in credit card master trusts; and $8.3 billion and $2.8 billion of cash amounts on deposit and escrow accounts, all respectively.
(f) Represents both loans on the Consolidated Balance Sheets and loans that have been securitized.
(g) Includes securitized loans that were previously recorded at fair value and classified as trading assets.
(h) At December 31, 2009 and 2008, nonperforming loans excluded: (1) mortgage loans insured by U.S. government agencies of $9.0 billion and $3.0 billion, respectively; (2) student
loans that were 90 days past due and still accruing, which are insured by U.S. government agencies under the Federal Family Education Loan Program, of $542 million and $437
million, respectively. These amounts are excluded, as reimbursement is proceeding normally. In addition, the Firm’s policy is generally to exempt credit card loans from being placed
on nonaccrual status as permitted by regulatory guidance. Under guidance issued by the Federal Financial Institutions Examination Council, credit card loans are charged off by the
end of the month in which the account becomes 180 days past due or within 60 days from receiving notification about a specified event (e.g., bankruptcy of the borrower), which-
ever is earlier.
(i) Excludes purchased credit-impaired loans that were acquired as part of the Washington Mutual transaction, which are accounted for on a pool basis. Since each pool is accounted
for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, the past due status of the pools, or that of individual loans within the pools,
in not meaningful. Because the Firm is recognizing interest income on each pool of loans, they are all considered to be performing.
(j) Includes nonperforming loans held-for-sale and loans at fair value of $345 million and $32 million at December 31, 2009 and 2008, respectively.