JP Morgan Chase 2010 Annual Report Download - page 130

Management’s discussion and analysis
130 JPMorgan Chase & Co./2010 Annual Report
The following table presents managed consumer credit–related information (including RFS, CS and residential real estate loans reported in the
Corporate/Private Equity segment) for the dates indicated. For further information about the Firm’s nonaccrual and charge-off accounting
policies, see Note 14 on pages 220–238 of this Annual Report.
Consumer
As of or for the year ended
December 31, Credit exposure
Nonaccrual
loans(k)(l)
Net charge-offs
Net charge
-
off
rate(m)(n)
(in millions, except ratios)
2010
2009
2010
2009
2010
2009
2010
2009
Consumer, excluding credit card
Loans, excluding PCI loans and loans
held-for-sale
Home equity – senior lien
(a)
$ 24,376 $ 27,376 $ 479 $ 477 $ 262 $ 234 1.00% 0.80%
Home equity – junior lien
(b)
64,009 74,049 784 1,188 3,182
4,448 4.63 5.62
Prime mortgage, including option ARMs
(c)
74,539 75,428 4,320 4,667 1,627 1,957 2.15 2.51
Subprime mortgage
(c)
11,287 12,526 2,210 3,248 1,374 1,648 10.82 11.86
Auto
(c)(d)
48,367 46,031 141 177 298
627 0.63 1.44
Business banking
16,812
16,974
832
826
707
842
4.23
4.73
Student and other
(c)
15,311 14,726 67 74 459 443 2.85 2.90
Total loans, excluding
PCI
loans and loans
held-for-sale 254,701 267,110 8,833 10,657 7,909 10,199 3.00 3.68
Loans – PCI
(e)
Home equity
24,459
26,520
NA
NA
NA
NA
NA
NA
Prime mortgage
17,322
19,693
NA
NA
NA
NA
NA
NA
Subprime mortgage
5,398
5,993
NA
NA
NA
NA
NA
NA
Option ARMs
25,584
29,039
NA
NA
NA
NA
NA
NA
Total loans
–
PCI
72,763
81,245
NA
NA
NA
NA
NA
NA
Total loans
–
retained
327,464
348,355
8,833
10,657
7,909
10,199
2.32
2.82
Loans held-for-sale
(f)
154 2,142 — — — — — —
Total loans
–
reported
327,618
350,497
8,833
10,657
7,909
10,199
2.32
2.82
Lending
-
related co
m
mitments
Home equity – senior lien
(a)(
g
)
16,060 19,246
Home equity – junior lien
(b)(
g
)
28,681 37,231
Prime mortgage
1,266
1,654
Subprime mortgage — —
Auto
5,246
5,467
Business banking
9,702
9,040
Student and other
579
2,189
Total len
d
ing
-
related commitments
61,534
74,827
Total consumer
exposure
, excluding
credit card 389,152 425,324
Credit C
ard
Loans retained
(c)(
h
)(
i
)
135,524 78,786 2 3 14,037 9,634 9.73 11.07
Loans held-for-sale
2,152
— — — — — — —
Total loans
–
reported
1
37,676
78,786
2
3
14,037
9,634
9.73
11.07
Securitized
(c)(
j
)
NA 84,626 NA —NA
6,443 NA 7.55
Total loans – managed
(c)
137,676 163,412 2 3 14,037 16,077 9.73 9.33
Lending-related commitments
(
g
)
547,227 569,113
Total credit card
exposure
684,903
732,525
Total consumer credit portfolio
–
reported
1,074,055
1,073,223
8,835
10,660
21,946
19,833
4.53
4.41
Total consumer credit portfolio – managed
(c)
$ 1,074,055 $ 1,157,849 $ 8,835 $10,660 $ 21,946
$ 26,276 4.53% 4.91%
(a) Represents loans where JPMorgan Chase holds the first security interest on the property.
(b) Represents loans where JPMorgan Chase holds a security interest that is subordinate in rank to other liens.
(c) Effective January 1, 2010, the Firm adopted accounting guidance related to VIEs. Upon the adoption of the guidance, the Firm consolidated its Firm-sponsored credit
card securitization trusts and certain other consumer loan securitization entities, primarily mortgage-related. As a result, related receivables are now recorded as loans
on the Consolidated Balance Sheet. As a result of the consolidation of the securitization trusts, reported and managed basis are equivalent for periods beginning after
January 1, 2010. For further discussion, see Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 64–66 of this Form 10-K.
(d) Excluded operating lease–related assets of $3.7 billion and $2.9 billion at December 31, 2010 and 2009, respectively.
(e) Charge-offs are not recorded on PCI loans until actual losses exceed estimated losses that were recorded as purchase accounting adjustments at the time of acquisition.
To date, no charge-offs have been recorded for these loans.
(f) At December 31, 2010 and 2009, loans held-for-sale included prime mortgages of $154 million and $450 million, respectively, and student loans of zero and $1.7
billion, respectively.
(g) The credit card and home equity lending-related commitments represent the total available lines of credit for these products. The Firm has not experienced, and does not
anticipate, that all available lines of credit would be used at the same time. For credit card commitments and home equity commitments (if certain conditions are met),
the Firm can reduce or cancel these lines of credit by providing the borrower prior notice or, in some cases, without notice as permitted by law.