JP Morgan Chase 2013 Annual Report Download - page 267

JPMorgan Chase & Co./2013 Annual Report 273
TDR activity rollforward
The following table reconciles the beginning and ending balances of other consumer loans modified in TDRs for the periods
presented.
Year ended December 31,
(in millions)
Auto Business banking Total other consumer
2013 2012 2011 2013 2012 2011 2013 2012 2011
Beginning balance of TDRs $ 150 $ 88 $ 91 $ 352 $ 415 $ 395 $ 502 $ 503 $ 486
New TDRs 90 145 54 66 104 195 156 249 249
Charge-offs post-modification (10) (9) (5) (10) (9) (11) (20) (18) (16)
Foreclosures and other liquidations —— — —(1) (3) —(1) (3)
Principal payments and other (123) (74) (52) (137) (157) (161) (260) (231) (213)
Ending balance of TDRs $ 107 $ 150 $ 88 $ 271 $ 352 $ 415 $ 378 $ 502 $ 503
Financial effects of modifications and redefaults
For auto loans, TDRs typically occur in connection with the
bankruptcy of the borrower. In these cases, the loan is
modified with a revised repayment plan that typically
incorporates interest rate reductions and, to a lesser
extent, principal forgiveness. Beginning September 30,
2012, Chapter 7 auto loans are also considered TDRs.
For business banking loans, concessions are dependent on
individual borrower circumstances and can be of a short-
term nature for borrowers who need temporary relief or
longer term for borrowers experiencing more fundamental
financial difficulties. Concessions are predominantly term or
payment extensions, but also may include interest rate
reductions.
The balance of business banking loans modified in TDRs
that experienced a payment default, and for which the
payment default occurred within one year of the
modification, was $43 million, $42 million and $80 million,
during the years ended December 31, 2013, 2012 and
2011, respectively. The balance of auto loans modified in
TDRs that experienced a payment default, and for which the
payment default occurred within one year of the
modification, was $54 million and $46 million during the
years ended December 31, 2013 and 2012, respectively.
The corresponding amount for the year ended
December 31, 2011 was insignificant. A payment default is
deemed to occur as follows: (1) for scored auto and
business banking loans, when the loan is two payments past
due; and (2) for risk-rated business banking loans and auto
loans, when the borrower has not made a loan payment by
its scheduled due date after giving effect to the contractual
grace period, if any.
The following table provides information about the financial effects of the various concessions granted in modifications of
other consumer loans for the periods presented.
Year ended December 31,
Auto Business banking
2013 2012 2011 2013 2012 2011
Weighted-average interest rate of loans with interest rate reductions
– before TDR 13.66% 12.64% 12.45% 8.37% 7.33% 7.55%
Weighted-average interest rate of loans with interest rate reductions
– after TDR 4.94 4.83 5.70 6.05 5.49 5.52
Weighted-average remaining contractual term (in years) of loans with
term or payment extensions – before TDR NM NM NM 1.1 1.4 1.4
Weighted-average remaining contractual term (in years) of loans with
term or payment extensions – after TDR NM NM NM 3.1 2.4 2.6