JP Morgan Chase 2014 Annual Report Download - page 258

Notes to consolidated financial statements
256 JPMorgan Chase & Co./2014 Annual Report
by S&P and Moody’s. Investment-grade ratings range from
“AAA/Aaa” to “BBB-/Baa3.” Noninvestment-grade ratings
are classified as noncriticized (“BB+/Ba1 and B-/B3”) and
criticized (“CCC+”/“Caa1 and below”), and the criticized
portion is further subdivided into performing and
nonaccrual loans, representing management’s assessment
of the collectibility of principal and interest. Criticized loans
have a higher probability of default than noncriticized
loans.
Risk ratings are reviewed on a regular and ongoing basis by
Credit Risk Management and are adjusted as necessary for
updated information affecting the obligor’s ability to fulfill
its obligations.
As noted above, the risk rating of a loan considers the
industry in which the obligor conducts its operations. As
part of the overall credit risk management framework, the
Firm focuses on the management and diversification of its
industry and client exposures, with particular attention paid
to industries with actual or potential credit concern. See
Note 5 for further detail on industry concentrations.
The table below provides information by class of receivable for the retained loans in the Wholesale portfolio segment.
As of or for the year
ended December 31,
(in millions, except
ratios)
Commercial
and industrial Real estate Financial institutions Government agencies Other(d) Total retained loans
2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013
Loans by risk ratings
Investment grade $ 63,069 $ 57,690 $61,006 $ 52,195 $ 27,111 $26,712 $8,393 $ 9,979 $82,087 $79,494 $241,666 $226,070
Noninvestment grade:
Noncriticized 44,117 43,477 16,541 14,381 7,085 6,674 300 440 10,075 10,992 78,118 75,964
Criticized performing 2,251 2,385 1,313 2,229 316 272 342 236 480 4,119 5,408
Criticized nonaccrual 188 294 253 346 18 25 —1140 155 599 821
Total noninvestment
grade 46,556 46,156 18,107 16,956 7,419 6,971 303 483 10,451 11,627 82,836 82,193
Total retained loans $109,625 $103,846 $ 79,113 $ 69,151 $34,530 $ 33,683 $8,696 $10,462 $92,538 $91,121 $324,502 $308,263
% of total criticized to
total retained loans 2.22% 2.58% 1.98 % 3.72% 0.97 % 0.88 % 0.03% 0.41% 0.41 % 0.70% 1.45% 2.02%
% of nonaccrual loans
to total retained loans 0.17 0.28 0.32 0.50 0.05 0.07 —0.01 0.15 0.17 0.18 0.27
Loans by geographic
distribution(a)
Total non-U.S. $ 33,739 $ 34,440 $ 2,099 $ 1,369 $ 20,944 $22,726 $1,122 $ 2,146 $42,961 $43,376 $100,865 $104,057
Total U.S. 75,886 69,406 77,014 67,782 13,586 10,957 7,574 8,316 49,577 47,745 223,637 204,206
Total retained loans $109,625 $103,846 $ 79,113 $ 69,151 $34,530 $ 33,683 $8,696 $10,462 $ 92,538 $91,121 $324,502 $308,263
Net charge-offs/
(recoveries) $ 22 $ 99 $ (9) $ 6 $ (12) $ (99) $ 25 $ 1 $ (14) $ 9 $ 12 $ 16
% of net charge-offs/
(recoveries) to end-of-
period retained loans 0.02% 0.10% (0.01)% 0.01% (0.04)% (0.29)% 0.29% 0.01% (0.02)% 0.01% —% 0.01%
Loan delinquency(b)
Current and less than 30
days past due and still
accruing $108,857 $103,357 $78,552 $ 68,627 $ 34,408 $33,426 $8,627 $10,421 $91,168 $89,717 $321,612 $305,548
30–89 days past due
and still accruing 566 181 275 164 104 226 69 40 1,201 1,233 2,215 1,844
90 or more days past
due and still accruing(c) 14 14 33 14 —6——29 16 76 50
Criticized nonaccrual 188 294 253 346 18 25 —1140 155 599 821
Total retained loans $109,625 $103,846 $ 79,113 $ 69,151 $34,530 $ 33,683 $8,696 $10,462 $ 92,538 $91,121 $324,502 $308,263
(a) The U.S. and non-U.S. distribution is determined based predominantly on the domicile of the borrower.
(b) The credit quality of wholesale loans is assessed primarily through ongoing review and monitoring of an obligor’s ability to meet contractual obligations rather than relying on
the past due status, which is generally a lagging indicator of credit quality. For a discussion of more significant risk factors, see pages 255–256 of this Note.
(c) Represents loans that are considered well-collateralized and therefore still accruing interest.
(d) Other primarily includes loans to SPEs and loans to private banking clients. See Note 1 for additional information on SPEs.