JP Morgan Chase 2015 Annual Report Download - page 131

JPMorgan Chase & Co./2015 Annual Report 121
Credit Card
Total credit card loans increased from December 31, 2014
due to higher new account originations and increased credit
card sales volume partially offset by sales of non-core loans
and the transfer of commercial card loans to the CIB. The
30+ day delinquency rate decreased to 1.43% at
December 31, 2015, from 1.44% at December 31, 2014.
For the years ended December 31, 2015 and 2014, the net
charge-off rates were 2.51% and 2.75%, respectively. The
Credit Card 30+ day delinquency rate and net charge-off
rate remain near historic lows. Charge-offs have improved
compared to a year ago due to continued discipline in credit
underwriting as well as improvement in the economy driven
by lower unemployment. 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, Florida and Illinois consisted of $57.5 billion in
receivables, or 44% of the retained loan portfolio, at
December 31, 2015, compared with $54.9 billion, or 43%,
at December 31, 2014. The greatest geographic
concentration of credit card retained loans is in California,
which represented 14% of total retained loans at both
December 31, 2015 and 2014, 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, 2015 and 2014, the Firm had $1.5 billion
and $2.0 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, 2014, 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.