JP Morgan Chase 2015 Annual Report Download - page 270

Notes to consolidated financial statements
260 JPMorgan Chase & Co./2015 Annual Report
are classified as noncriticized (“BB+/Ba1 and B-/B3”) and
criticized (“CCC+”/“Caa1 and below”), and the criticized
portion is further subdivided into performing and
nonaccrual loans, representing management’s assessment
of the collectibility of principal and interest. Criticized loans
have a higher probability of default than noncriticized
loans.
Risk ratings are reviewed on a regular and ongoing basis by
Credit Risk Management and are adjusted as necessary for
updated information affecting the obligor’s ability to fulfill
its obligations.
As noted above, the risk rating of a loan considers the
industry in which the obligor conducts its operations. As
part of the overall credit risk management framework, the
Firm focuses on the management and diversification of its
industry and client exposures, with particular attention paid
to industries with actual or potential credit concern. See
Note 5 for further detail on industry concentrations.
The table below provides information by class of receivable for the retained loans in the Wholesale portfolio segment.
As of or for the
year ended
December 31,
(in millions,
except ratios)
Commercial
and industrial Real estate Financial institutions Government agencies Other(e) Total
retained loans
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
Loans by risk
ratings
Investment grade $ 62,150 $ 63,069 $74,330 $61,006 $21,786 $ 27,111 $11,363 $8,393 $ 98,107 $ 82,087 $267,736 $241,666
Noninvestment
grade:
Noncriticized 45,632 44,117 17,008 16,541 7,667 7,093 (d) 256 300 11,390 10,067 (d) 81,953 78,118
Criticized
performing 4,542 2,251 1,251 1,313 320 316 73253 236 6,373 4,119
Criticized
nonaccrual 608 188 231 253 10 18 ——139 140 988 599
Total
noninvestment
grade 50,782 46,556 18,490 18,107 7,997 7,427 (d) 263 303 11,782 10,443 (d) 89,314 82,836
Total retained
loans $112,932 $109,625 $92,820 $79,113 $29,783 $ 34,538 (d) $11,626 $8,696 $109,889 $ 92,530 (d) $357,050 $324,502
% of total
criticized to
total retained
loans 4.56% 2.22% 1.60 % 1.98 % 1.11 % 0.97 % 0.06 % 0.03% 0.36% 0.41 % 2.06% 1.45%
% of nonaccrual
loans to total
retained loans 0.54 0.17 0.25 0.32 0.03 0.05 ——0.13 0.15 0.28 0.18
Loans by
geographic
distribution(a)
Total non-U.S. $ 30,063 $ 33,739 $ 3,003 $ 2,099 $17,166 $ 20,944 $ 1,788 $1,122 $ 42,031 $ 42,961 $ 94,051 $ 100,865
Total U.S. 82,869 75,886 89,817 77,014 12,617 13,594 (d) 9,838 7,574 67,858 49,569 (d) 262,999 223,637
Total retained
loans $112,932 $109,625 $92,820 $79,113 $29,783 $ 34,538 (d) $11,626 $8,696 $109,889 $ 92,530 (d) $357,050 $324,502
Net charge-offs/
(recoveries) $26$22$ (14) $(9)$(5)$ (12) $(8)$25 $11$ (14) $10$12
% of net
charge-offs/
(recoveries) to
end-of-period
retained loans 0.02% 0.02% (0.02)% (0.01)% (0.02)% (0.04) % (0.07)% 0.29% 0.01% (0.02) % —% —%
Loan
delinquency(b)
Current and less
than 30 days
past due and
still accruing $112,058 $108,857 $92,381 $78,552 $29,713 $ 34,416 (d) $11,565 $8,627 $108,734 $ 91,160 (d) $354,451 $321,612
30–89 days past
due and still
accruing 259 566 193 275 49 104 55 69 988 1,201 1,544 2,215
90 or more days
past due and
still accruing(c) 714 15 33 11 —6—28 29 67 76
Criticized
nonaccrual 608 188 231 253 10 18 ——139 140 988 599
Total retained
loans $112,932 $109,625 $92,820 $79,113 $29,783 $ 34,538 (d) $11,626 $8,696 $109,889 $ 92,530 (d) $357,050 $324,502
(a) The U.S. and non-U.S. distribution is determined based predominantly on the domicile of the borrower.
(b) The credit quality of wholesale loans is assessed primarily through ongoing review and monitoring of an obligor’s ability to meet contractual obligations rather than relying on
the past due status, which is generally a lagging indicator of credit quality.
(c) Represents loans that are considered well-collateralized and therefore still accruing interest.
(d) Effective in the fourth quarter 2015, the Firm realigned its wholesale industry divisions in order to better monitor and manage industry concentrations. Prior period amounts
have been revised to conform with current period presentation. For additional information, see Wholesale credit portfolio on pages 122–129.
(e) Other includes: individuals; SPEs; holding companies; and private education and civic organizations. For more information on exposures to SPEs, see Note 16.