JP Morgan Chase 2010 Annual Report Download - page 96

Management’s discussion and analysis
JPMorgan Chase & Co./2010 Annual Report
96
The Firm has not experienced, and does not anticipate, that all
available lines of credit for these products would be utilized at the
same time. The Firm can reduce or cancel credit card lines of credit
by providing the borrower prior notice or, in some cases, without
notice as permitted by law. The Firm may reduce or close home
equity lines of credit when there are significant decreases in the
value of the underlying property or when there has been a
demonstrable decline in the creditworthiness of the borrower. The
accompanying table excludes certain guarantees that do not have a
contractual maturity date (e.g., loan sale and securitization-related
indemnification obligations). For further discussion, see discussion
of Loan sale and securitization-related indemnification obligations
in Note 30 on pages 275–280 of this Annual Report.
Off–balance sheet lending-related financial instruments and other guarantees
By remaining maturity at December 31,
2010
2009
(in millions) 2011 2012-2013 2014-2015 After 2015
Total
Total
Lending
-
related
Consumer, excluding credit card:
Home equity
—
senior lien
$ 617 $ 3,100 $ 5,936 $ 6,407 $ 16,060 $ 19,246
Home equity
—
junior lien
1,125 7,169 10,742 9,645 28,681 37,231
Prime mortgage
1,266 — — — 1,266 1,654
Subprime mortgage
— — — — — —
Auto
5,095 144 6 1 5,246 5,467
Business banking
9,116 264 85 237 9,702 9,040
Student and other
76 6 — 497 579 2,189
Total consumer, excluding credit card
17,295 10,683 16,769 16,787 61,534 74,827
Credit card
547,227 — — — 547,227 569,113
Total cons
umer
564,522 10,683 16,769 16,787 608,761 643,940
Wholesale:
Other unfunded co
m
mitments to
extend
credit(a)(b)(c) 62,786 99,698 32,177 5,198 199,859 192,145
Asset purchase agreements
(b)
— — — — — 22,685
Standby letters of credit and other financial
guarantees(a)(c)(d)(e) 25,346 48,408 16,729 4,354 94,837 91,485
Unused advised lines of credit
34,354 9,154 373 839 44,720 35,673
Other letters of credit
(a)(
e
)
3,903 2,304 456 — 6,663 5,167
Total wholesale
126,389 159,564 49,735 10,391 346,079 347,155
Total lending
-
related
$ 690,911 $ 170,247 $ 66,504 $ 27,178 $ 954,840 $ 991,095
Other guarantees
Securities lending indemnifications
(
f
)
$ 181,717 $ — $ — $ — $ 181,717 $ 170,777
Derivatives qualifying as guarantees
(
g
)
3,140 585 48,308 35,735 87,768 98,052
(
i)
Other guarantees and commitments
(
h
)
90 226 288 3,162 3,766 3,671
(a) At December 31, 2010 and 2009, represents the contractual amount net of risk participations totaling $542 million and $643 million, respectively, for other unfunded
commitments to extend credit; $22.4 billion and $24.6 billion, respectively, for standby letters of credit and other financial guarantees; and $1.1 billion and $690
million, respectively, for other letters of credit. In regulatory filings with the Federal Reserve these commitments are shown gross of risk participations.
(b) Upon the adoption of the accounting guidance related to VIEs, $24.2 billion of lending-related commitments between the Firm and Firm-administered multi-seller
conduits were eliminated upon consolidation. The decrease in lending-related commitments was partially offset by the addition of $6.5 billion of unfunded
commitments directly between the multi-seller conduits and clients; these unfunded commitments of the consolidated conduits are now included as off–balance sheet
lending-related commitments of the Firm.
(c) Includes credit enhancements and bond and commercial paper liquidity commitments to U.S. states and municipalities, hospitals and other not-for-profit entities of
$43.4 billion and $44.1 billion, at December 31, 2010 and 2009, respectively.
(d) At December 31, 2010 and 2009, includes unissued standby letters of credit commitments of $41.6 billion and $38.4 billion, respectively.
(e) At December 31, 2010 and 2009, JPMorgan Chase held collateral relating to $37.8 billion and $31.5 billion, respectively, of standby letters of credit; and $2.1 billion
and $1.3 billion, respectively, of other letters of credit.
(f) At December 31, 2010 and 2009, collateral held by the Firm in support of securities lending indemnification agreements totaled $185.0 billion and $173.2 billion,
respectively. Securities lending collateral comprises primarily cash, and securities issued by governments that are members of the Organisation for Economic Co-operation and
Development (“OECD”) and U.S. government agencies.
(g) Represents the notional amounts of derivative contracts qualifying as guarantees. For further discussion of guarantees, see Note 6 on pages 191–199 and Note 30 on
pages 275–280 of this Annual Report.
(h) Amounts include letters of credit hedged by derivative transactions and managed on a market risk basis.
(i) The prior period has been revised to conform with current presentation.