JP Morgan Chase 2012 Annual Report Download - page 265

JPMorgan Chase & Co./2012 Annual Report 275
Loan modifications
Certain loan modifications are considered to be TDRs as they provide various concessions to borrowers who are experiencing
financial difficulty. All TDRs are reported as impaired loans in the tables above.
The following table provides information about the Firm’s wholesale loans that have been modified in TDRs, including a
reconciliation of the beginning and ending balances of such loans and information regarding the nature and extent of
modifications during the periods presented.
Years ended December 31,
(in millions)
Commercial and industrial Real estate Other(b) Total
2012 2011 2012 2011 2012 2011 2012 2011
Beginning balance of TDRs $ 531 $ 212 $ 176 $ 907 $ 43 $ 24 $ 750 $ 1,143
New TDRs 162 $ 665 43 113 73 32 278 810
Increases to existing TDRs 183 96 —16 ——183 112
Charge-offs post-modification (27) (30) (2) (146) (7) —(36) (176)
Sales and other(a) (274) (412) (118) (714) (87) (13) (479) (1,139)
Ending balance of TDRs $ 575 $ 531 $ 99 $ 176 $ 22 $ 43 $ 696 $ 750
TDRs on nonaccrual status $ 522 $ 415 $ 92 $ 128 $ 22 $ 35 $ 636 $ 578
Additional commitments to lend to borrowers
whose loans have been modified in TDRs 44 147 ——2—46 147
(a) Sales and other are largely sales and paydowns, but also includes performing loans restructured at market rates that were removed from the reported TDR balance of $44
million and $152 million during the years ended December 31, 2012 and 2011, respectively.
(b) Includes loans to Financial institutions, Government agencies and Other.
Financial effects of modifications and redefaults
Loans modified as TDRs are typically term or payment
extensions and, to a lesser extent, deferrals of principal
and/or interest on commercial and industrial and real estate
loans. For the years ended December 31, 2012 and 2011,
the average term extension granted on loans with term or
payment extensions was 1.1 years and 3.3 years,
respectively. The weighted-average remaining term for all
loans modified during these periods was 3.6 years and 4.5
years, respectively. Wholesale TDR loans that redefaulted
within one year of the modification were $56 million and
$96 million during the years ended December 31, 2012
and 2011, respectively. A payment default is deemed to
occur when the borrower has not made a loan payment by
its scheduled due date after giving effect to any contractual
grace period.