JP Morgan Chase 2014 Annual Report Download - page 121

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JPMorgan Chase & Co./2014 Annual Report 119
Credit Card
Total credit card loans increased from December 31, 2013
due to higher new account originations and increased credit
card sales volume. The 30+ day delinquency rate decreased
to 1.44% at December 31, 2014, from 1.67% at
December 31, 2013. For the years ended December 31,
2014 and 2013, the net charge-off rates were 2.75% and
3.14%, respectively. Charge-offs have improved compared
with a year ago as a result of improvement in delinquent
loans. The credit card portfolio continues to reflect a well-
seasoned, largely rewards-based portfolio that has good
U.S. geographic diversification.
Loans outstanding in the top five states of California, Texas,
New York, Illinois and Florida consisted of $54.9 billion in
receivables, or 43% of the retained loan portfolio, at
December 31, 2014, compared with $52.7 billion, or 41%,
at December 31, 2013. The greatest geographic
concentration of credit card retained loans is in California,
which represented 14% and 13% of total retained loans at
December 31, 2014 and 2013, respectively. For further
information on the geographic composition of the Firm’s
credit card loans, see Note 14.
Modifications of credit card loans
At December 31, 2014 and 2013, the Firm had $2.0 billion
and $3.1 billion, respectively, of credit card loans
outstanding that have been modified in TDRs. These
balances included both credit card loans with modified
payment terms and credit card loans that reverted back to
their pre-modification payment terms because the
cardholder did not comply with the modified payment
terms. The decrease in modified credit card loans
outstanding from December 31, 2013, was attributable to a
reduction in new modifications as well as ongoing payments
and charge-offs on previously modified credit card loans.
Consistent with the Firm’s policy, all credit card loans
typically remain on accrual status until charged-off.
However, the Firm establishes an allowance, which is offset
against loans and charged to interest income, for the
estimated uncollectible portion of accrued interest and fee
income.
For additional information about loan modification
programs to borrowers, see Note 14.