JP Morgan Chase 2012 Annual Report Download - page 323

Glossary of Terms
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Active mobile customers: Retail banking users of all mobile
platforms who have been active in the past 90 days.
Allowance for loan losses to total loans: Represents period-
end allowance for loan losses divided by retained loans.
Assets under management: Represent assets actively
managed by AM on behalf of its Private Banking, Institutional
and Retail clients. Includes “Committed capital not Called,” on
which AM earns fees. Excludes assets managed by American
Century Companies, Inc., in which the Firm sold its ownership
interest on August 31, 2011.
Assets under supervision: Represent assets under
management as well as custody, brokerage, administration and
deposit accounts.
Beneficial interests issued by consolidated VIEs: Represents
the interest of third-party holders of debt, equity securities, or
other obligations, issued by VIEs that JPMorgan Chase
consolidates.
Benefit obligation: Refers to the projected benefit obligation
for pension plans and the accumulated postretirement benefit
obligation for OPEB plans.
Client advisors: Investment product specialists, including
Private Client Advisors, Financial Advisors, Financial Advisor
Associates, Senior Financial Advisors, Independent Financial
Advisors and Financial Advisor Associate trainees, who advise
clients on investment options, including annuities, mutual
funds, stock trading services, etc., sold by the Firm or by third
party vendors through retail branches, Chase Private Client
branches and other channels.
Client investment managed accounts: Assets actively
managed by Chase Wealth Management on behalf of clients.
The percentage of managed accounts is calculated by dividing
managed account assets by total client investment assets.
Contractual credit card charge-off: In accordance with the
Federal Financial Institutions Examination Council policy, credit
card loans are charged off at the earlier of: (i) the end of the
month in which the account becomes 180 days past due or (ii)
within 60 days from receiving notification about a specific
event (e.g., bankruptcy of the borrower).
Credit derivatives: Financial instruments whose value is
derived from the credit risk associated with the debt of a third
party issuer (the reference entity) which allow one party (the
protection purchaser) to transfer that risk to another party
(the protection seller). Upon the occurrence of a credit event,
which may include, among other events, the bankruptcy or
failure to pay by, or certain restructurings of the debt of, the
reference entity, neither party has recourse to the reference
entity. The protection purchaser has recourse to the protection
seller for the difference between the face value of the CDS
contract and the fair value of the reference obligation at the
time of settling the credit derivative contract. The
determination as to whether a credit event has occurred is
generally made by the relevant International Swaps and
Derivatives Association (“ISDA”) Determinations Committee,
comprised of 10 sell-side and five buy-side ISDA member firms.
Credit cycle: A period of time over which credit quality
improves, deteriorates and then improves again (or vice
versa). The duration of a credit cycle can vary from a couple of
years to several years.
CUSIP number: A CUSIP (i.e., Committee on Uniform Securities
Identification Procedures) number consists of nine characters
(including letters and numbers) that uniquely identify a
company or issuer and the type of security and is assigned by
the American Bankers Association and operated by Standard &
Poor’s. This system facilitates the clearing and settlement
process of securities. A similar system is used to identify non-
U.S. securities (CUSIP International Numbering System).
Deposit margin: Represents net interest income expressed as a
percentage of average deposits.
FICO score: A measure of consumer credit risk provided by
credit bureaus, typically produced from statistical models by
Fair Isaac Corporation utilizing data collected by the credit
bureaus.
Forward points: Represents the interest rate differential
between two currencies, which is either added to or subtracted
from the current exchange rate (i.e., “spot rate”) to determine
the forward exchange rate.
Group of Seven (“G7”) nations: Countries in the G7 are
Canada, France, Germany, Italy, Japan, the United Kingdom and
the United States.
G7 government bonds: Bonds issued by the government of one
of countries in the G7 nations.
Headcount-related expense: Includes salary and benefits
(excluding performance-based incentives), and other
noncompensation costs related to employees.
Home equity - senior lien: Represents loans where JP Morgan
Chase holds the first security interest on the property.
Home equity - junior lien: Represents loans where JP Morgan
Chase holds a security interest that is subordinate in rank to
other liens.
Interchange income: A fee paid to a credit card issuer in the
clearing and settlement of a sales or cash advance transaction.
Investment-grade: An indication of credit quality based on
JPMorgan Chase’s internal risk assessment system.
“Investment grade” generally represents a risk profile similar
to a rating of a “BBB-”/“Baa3” or better, as defined by
independent rating agencies.
LLC: Limited Liability Company.
Loan-to-value (“LTV”) ratio: For residential real estate loans,
the relationship, expressed as a percentage, between the
principal amount of a loan and the appraised value of the
collateral (i.e., residential real estate) securing the loan.
Origination date LTV ratio
The LTV ratio at the origination date of the loan. Origination
date LTV ratios are calculated based on the actual appraised
values of collateral (i.e., loan-level data) at the origination
date.
Current estimated LTV ratio
An estimate of the LTV as of a certain date. The current
estimated LTV ratios are calculated using estimated collateral
values derived from a nationally recognized home price index
measured at the metropolitan statistical area (“MSA”) level.
These MSA-level home price indices comprise actual data to
the extent available and forecasted data where actual data is
not available. As a result, the estimated collateral values used
to calculate these ratios do not represent actual appraised