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JPMorgan Chase & Co – ‘10-K’ for 12/31/14 – ‘R23’

On:  Tuesday, 2/24/15, at 4:04pm ET   ·   For:  12/31/14   ·   Accession #:  19617-15-272   ·   File #:  1-05805

Previous ‘10-K’:  ‘10-K’ on 2/20/14 for 12/31/13   ·   Next:  ‘10-K’ on 2/23/16 for 12/31/15   ·   Latest:  ‘10-K’ on 2/16/24 for 12/31/23

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  As Of               Filer                 Filing    For·On·As Docs:Size

 2/24/15  JPMorgan Chase & Co               10-K       12/31/14  232:116M

Annual Report   —   Form 10-K   —   Sect. 13 / 15(d) – SEA’34
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                       HTML   6.22M 
 4: EX-21       List of Subsidiaries                                HTML     72K 
 5: EX-23       Consent of Independent Registered Public            HTML     63K 
                Accounting Firm                                                  
 2: EX-12.1     Computation of Ratio of Earnings to Fixed Charges   HTML     79K 
 3: EX-12.2     Computation of Ratio of Earnings to Fixed Charges   HTML     81K 
                and Preferred Stock Div Req                                      
 6: EX-31.1     Certification -- §302 - SOA'02                      HTML     68K 
 7: EX-31.2     Certification -- §302 - SOA'02                      HTML     68K 
 8: EX-32       Certification Pursuant to Section 906 of the        HTML     67K 
                Sarbanes-Oxley Act of 2002                                       
154: R1          Document and Entity Information                     HTML     90K  
113: R2          Consolidated Statements of Income                   HTML    197K  
142: R3          Consolidated Statements of Comprehensive Income     HTML     90K  
163: R4          Consolidated Balance Sheets                         HTML    196K  
204: R5          Consolidated Balance Sheets (Parenthetical)         HTML    140K  
118: R6          Consolidated Statements of Changes in               HTML    148K  
                Stockholders' Equity                                             
141: R7          Consolidated Statements of Changes in               HTML     64K  
                Stockholders' Equity (Parenthetical)                             
103: R8          Consolidated Statements of Cash Flows               HTML    235K  
82: R9          Basis of Presentation                               HTML     99K 
206: R10         Business Changes and Developments                   HTML     64K  
165: R11         Fair Value Measurement                              HTML   1.45M  
164: R12         Fair Value Option                                   HTML    281K  
176: R13         Credit Risk Concentrations                          HTML    170K  
177: R14         Derivative Instruments                              HTML    776K  
170: R15         Noninterest Revenue                                 HTML    144K  
180: R16         Interest Income and Interest Expense                HTML    114K  
143: R17         Pension and Other Postretirement Employee Benefit   HTML    970K  
                Plans                                                            
156: R18         Employee Stock Based Incentives                     HTML    142K  
168: R19         Noninterest Expense                                 HTML     85K  
229: R20         Securities                                          HTML    460K  
194: R21         Securities Financing Activities                     HTML    183K  
132: R22         Loans                                               HTML   1.55M  
167: R23         Allowance for Credit Losses                         HTML    380K  
137: R24         Variable Interest Entities                          HTML    357K  
61: R25         Goodwill and Other Intangible Assets                HTML    277K 
196: R26         Premises and Equipment                              HTML     65K  
214: R27         Deposits                                            HTML    120K  
95: R28         Accounts Payable and Other Liabilities              HTML     74K 
94: R29         Long-term debt                                      HTML    243K 
101: R30         Preferred Stock                                     HTML    137K  
102: R31         Common Stock                                        HTML    108K  
106: R32         Earnings Per Share                                  HTML     96K  
34: R33         Accumulated Other Comprehensive Income/(Loss)       HTML    248K 
190: R34         Income Taxes                                        HTML    206K  
127: R35         Restrictions on Cash and Intercompany Funds         HTML     71K  
                Transfers                                                        
133: R36         Regulatory Capital                                  HTML    176K  
71: R37         Off-Balance Sheet Lending-Related Financial         HTML    280K 
                Instruments, Guarantees and Other Commitments                    
228: R38         Commitments, Pledged Assets, and Collateral         HTML     98K  
15: R39         Litigation                                          HTML    122K 
110: R40         International Operations                            HTML    150K  
202: R41         Business Segments                                   HTML    233K  
67: R42         Parent Company                                      HTML    233K 
92: R43         Basis of Presentation (Policies)                    HTML     97K 
100: R44         Fair Value Measurement (Policies)                   HTML     67K  
114: R45         Fair Value Option (Policies)                        HTML     71K  
33: R46         Derivative Instruments (Policies)                   HTML     71K 
80: R47         Noninterest Revenue (Policies)                      HTML     74K 
20: R48         Interest Income and Interest Expense (Policies)     HTML     63K 
200: R49         Pension and Other Postretirement Employee Benefit   HTML     73K  
                Plans (Policies)                                                 
64: R50         Employee Stock-Based Incentives (Policies)          HTML     68K 
193: R51         Securities (Policies)                               HTML     66K  
72: R52         Loans (Policies)                                    HTML     93K 
111: R53         Allowance for Credit Losses (Policies)              HTML     75K  
18: R54         Variable Interest Entities (Policies)               HTML     68K 
27: R55         Goodwill and Other Intangible Assets (Policies)     HTML     82K 
99: R56         Premises and Equipment (Policies)                   HTML     68K 
44: R57         Long-term debt (Policies)                           HTML     63K 
209: R58         Earnings Per Share (Policies)                       HTML     65K  
125: R59         Income Taxes (Policies)                             HTML     67K  
172: R60         Off-Balance Sheet Lending-Related Financial         HTML     73K  
                Instruments, Guarantees and Other Commitments                    
                (Policies)                                                       
78: R61         Basis of Presentation Basis of Presentation         HTML     79K 
                (Tables)                                                         
87: R62         Fair Value Measurement (Tables)                     HTML   1.39M 
186: R63         Fair Value Option (Tables)                          HTML    272K  
181: R64         Credit Risk Concentrations (Tables)                 HTML    164K  
131: R65         Derivative Instruments (Tables)                     HTML    770K  
184: R66         Noninterest Revenue (Tables)                        HTML    139K  
73: R67         Interest Income and Interest Expense (Tables)       HTML    113K 
138: R68         Pension and Other Postretirement Employee Benefit   HTML    965K  
                Plans (Tables)                                                   
213: R69         Employee Stock-Based Incentives (Tables)            HTML    132K  
25: R70         Noninterest Expense (Tables)                        HTML     85K 
59: R71         Securities (Tables)                                 HTML    463K 
112: R72         Securities Financing Activities (Tables)            HTML    182K  
42: R73         Loans (Tables)                                      HTML   1.51M 
224: R74         Allowance for Credit Losses (Tables)                HTML    369K  
69: R75         Variable Interest Entities (Tables)                 HTML    305K 
47: R76         Goodwill and Other Intangible Assets (Tables)       HTML    271K 
58: R77         Deposits (Tables)                                   HTML    122K 
29: R78         Accounts Payable and Other Liabilities (Tables)     HTML     73K 
38: R79         Long-Term debt (Tables)                             HTML    234K 
159: R80         Preferred Stock (Tables)                            HTML    131K  
53: R81         Common Stock (Tables)                               HTML    103K 
211: R82         Earnings Per Share (Tables)                         HTML     94K  
108: R83         Accumulated Other Comprehensive Income/(Loss)       HTML    248K  
                (Tables)                                                         
169: R84         Income Taxes (Tables)                               HTML    202K  
183: R85         Regulatory Capital (Tables)                         HTML    168K  
50: R86         Off-Balance Sheet Lending-Related Financial         HTML    238K 
                Instruments, Guarantees and Other Commitments                    
                (Tables)                                                         
57: R87         Commitments, Pledged Assets, and Collateral         HTML     98K 
                (Tables)                                                         
205: R88         International Operations (Tables)                   HTML    150K  
43: R89         Business Segments (Tables)                          HTML    216K 
161: R90         Parent Company (Tables)                             HTML    231K  
146: R91         Fair Value Measurement - Recurring Basis (Details)  HTML    753K  
188: R92         Fair Value Measurement - Transfers (Details)        HTML     99K  
145: R93         Fair Value Measurement - Level 3 Inputs (Details)   HTML    303K  
119: R94         Fair Value Measurement - Changes in Level 3         HTML    685K  
                Recurring Measurements (Details)                                 
199: R95         Fair Value Measurement - Level 3 Analysis           HTML    123K  
                (Details)                                                        
115: R96         Fair Value Measurement - Credit Adjustments         HTML    101K  
                Reflected on Balance Sheet (Details)                             
70: R97         Fair Value Measurement - Impact of Credit           HTML     82K 
                Adjustments (Details)                                            
134: R98         Fair Value Measurement - Nonrecurring Basis         HTML     87K  
                (Details)                                                        
126: R99         Fair Value Measurement - Carrying Value and         HTML    242K  
                Estimated Fair Value (Details)                                   
96: R100        Fair Value Option - Changes in fair value under     HTML    176K 
                the fair value option (Details)                                  
231: R101        Fair Value Option - Aggregate differences           HTML    139K  
                (Details)                                                        
185: R102        Fair Value Option - Structured note products by     HTML    119K  
                balance sheet classification and risk component                  
                (Details)                                                        
144: R103        Credit Risk Concentrations (Details)                HTML    246K  
31: R104        Derivative Instruments - Notional Amount of         HTML    116K 
                Derivative Contracts (Details)                                   
201: R105        Derivative Instruments - Impact on Balance Sheet    HTML    159K  
                (Details)                                                        
212: R106        Derivative Instruments - Derivatives Netting        HTML    331K  
                (Details)                                                        
203: R107        Derivative Instruments - Derivatives Collateral     HTML     79K  
                (Details)                                                        
139: R108        Derivative Instruments - Liquidity Risk and         HTML     81K  
                Credit-Related Contingent Features (Details)                     
45: R109        Derivative Instruments - Impact on Statements of    HTML    110K 
                Income, Fair Value Hedges (Details)                              
175: R110        Derivative Instruments - Impact on Statements of    HTML    116K  
                Income, Cash Flow Hedges (Details)                               
75: R111        Derivative Instruments - Impact on Statements of    HTML     71K 
                Income, Net Investment Hedges (Details)                          
17: R112        Derivative Instruments - Impact on Statements of    HTML     77K 
                Income, Risk Management Derivatives (Details)                    
117: R113        Derivative Instruments - Credit Derivatives         HTML    102K  
                (Details)                                                        
109: R114        Derivative Instruments - Credit Derivatives,        HTML    112K  
                Protection Sold, Notional and Fair Value (Details)               
195: R115        Noninterest Revenue (Details)                       HTML    168K  
85: R116        Interest Income and Interest Expense (Details)      HTML    120K 
218: R117        Pension and Other Postretirement Employee Benefit   HTML    253K  
                Plans - Defined Benefit Pension Plans (Details)                  
39: R118        Pension and Other Postretirement Employee Benefit   HTML    104K 
                Plans - Pretax Pension and OPEB in AOCI (Details)                
153: R119        Pension and Other Postretirement Employee Benefit   HTML    218K  
                Plans - Net Periodic Benefit Costs (Details)                     
182: R120        Pension and Other Postretirement Employee Benefit   HTML     85K  
                Plans - Pretax Amortization from AOCI (Details)                  
23: R121        Pension and Other Postretirement Employee Benefit   HTML     78K 
                Plans - Actual Rate of Return on Plan Assets                     
                (Details)                                                        
148: R122        Pension and Other Postretirement Employee Benefit   HTML    127K  
                Plans - Weighted-Average Assumptions Benefit                     
                Obligations (Details)                                            
135: R123        Pension and Other Postretirement Employee Benefit   HTML    121K  
                Plans - Weighted-Average Assumptions Net Periodic                
                Benefit Costs (Details)                                          
26: R124        Pension and Other Postretirement Employee Benefit   HTML     92K 
                Plans - One Percentage Point Increase Effects                    
                (Details)                                                        
155: R125        Pension and Other Postretirement Employee Benefit   HTML    158K  
                Plans - Weighted Average Asset Allocation                        
                (Details)                                                        
222: R126        Pension and Other Postretirement Employee Benefit   HTML    643K  
                Plans - Plan Assets Measured At Fair Value                       
                (Details)                                                        
40: R127        Pension and Other Postretirement Employee Benefit   HTML    316K 
                Plans - Changes In Level 3 Fair Value Measurements               
                (Details)                                                        
88: R128        Pension and Other Postretirement Employee Benefit   HTML    115K 
                Plans - Estimated Future Benefit Payments                        
                (Details)                                                        
189: R129        Employee Stock-Based Incentives - Employee          HTML     96K  
                Stock-Based Awards (Details)                                     
220: R130        Employee Stock-Based Incentives - RSUs, Employee    HTML    166K  
                Stock Options and SARS Activities (Details)                      
130: R131        Employee Stock-Based Incentives - Compensation      HTML     76K  
                Expense (Details)                                                
150: R132        Employee Stock-Based Incentives - Cash Flows and    HTML     76K  
                Tax Benefits (Details)                                           
41: R133        Employee Stock-Based Incentives - Valuation         HTML     74K 
                Assumptions (Details)                                            
46: R134        Noninterest Expense (Details)                       HTML     97K 
116: R135        Securities - Realized Gain (Loss) (Details)         HTML    100K  
91: R136        Securities - Amortized Costs, Fair Value (Details)  HTML    222K 
178: R137        Securities - Continuous Unrealized Loss Position    HTML    274K  
                (Details)                                                        
121: R138        Securities - Other Than Temporary Impairment        HTML     84K  
                (Details)                                                        
83: R139        Securities - Changes in Credit Loss (Details)       HTML     80K 
124: R140        Securities - Amortized Cost, Fair Value, by         HTML    387K  
                Contract Maturity (Details)                                      
62: R141        Securities Financing Activities - Schedule of       HTML     96K 
                securities purchased under resale agreements,                    
                netting & securities borrowed (Details)                          
16: R142        Securities Financing Activities - Schedule of       HTML     89K 
                securities purchased under resale agreements &                   
                securities borrowed collateral netting (Details)                 
191: R143        Securities Financing Activities - Schedule of       HTML    101K  
                securities sold under repurchase agreements,                     
                netting & securities loaned (Details)                            
166: R144        Securities Financing Activities - Schedule of       HTML     92K  
                securities sold under repurchase agreements &                    
                securities loaned collateral netting (Details)                   
51: R145        Loans - By Portfolio Segment (Details)              HTML    153K 
152: R146        Loans - Purchased, Sold and Reclassified to         HTML     94K  
                Held-for-Sale (Details)                                          
128: R147        Loans - Net Gains and Losses on Sale (Details)      HTML     75K  
48: R148        Loans - Consumer, Excluding Credit Card Loans       HTML    115K 
                (Details)                                                        
52: R149        Loans - Consumer, Excluding Credit Card Loans,      HTML    531K 
                Residential Real Estate, Excluding PCI Loans                     
                (Details)                                                        
171: R150        Loans - Consumer, Excluding Credit Card Loans,      HTML    131K  
                Delinquency Statistics Junior Lien Home Equity                   
                Loans (Details)                                                  
77: R151        Loans - Consumer, Excluding Credit Card Loans,      HTML    212K 
                Impaired Loans (Details)                                         
19: R152        Loans - Consumer, Excluding Credit Card Loans,      HTML     78K 
                Loan Modifications, New TDRs (Details)                           
140: R153        Loans - Consumer, Excluding Credit Card Loans,      HTML    186K  
                Loan Modifications, Nature and Extent of                         
                Modifications (Details)                                          
173: R154        Loans - Consumer, Excluding Credit Card Loans,      HTML    197K  
                Financial Effects of Modifications and Redefaults                
                (Details)                                                        
30: R155        Loans - Consumer, Excluding Credit Card Loans,      HTML    331K 
                Other Consumer Loans (Details)                                   
66: R156        Loans - Consumer, Excluding Credit Card Loans,      HTML     89K 
                Other Consumer Impaired Loans and Loan                           
                Modifications (Details)                                          
226: R157        Loans - Consumer, Excluding Credit Card Loans,      HTML     78K  
                Financial Effects of Modification (Details)                      
74: R158        Loans - Consumer, Excluding Credit Card Loans, PCI  HTML    479K 
                Loans (Details)                                                  
107: R159        Loans - Consumer, Excluding Credit Card Loans, PCI  HTML    136K  
                Delinquency Statistics (Details)                                 
120: R160        Loans - Consumer, Excluding Credit Card Loans, PCI  HTML    105K  
                Accretable Yield Activity (Details)                              
187: R161        Loans Loans - Credit Card Loan Portfolio (Details)  HTML    136K  
105: R162        Loans Loans - Credit Card Portfolio - Impaired      HTML     85K  
                Loans (Details)                                                  
208: R163        Loans Loans - Credit Card Portfolio - Loan          HTML     85K  
                Modifications (Details)                                          
158: R164        Loans - Wholesale Loan Portfolio - By Class of      HTML    300K  
                Receivable (Details)                                             
219: R165        Loans - Wholesale Loan Portfolio - Real Estate      HTML    133K  
                Class of Loans (Details)                                         
28: R166        Loans - Wholesale Loan Portfolio - Impaired Loans   HTML    140K 
                (Details)                                                        
198: R167        Allowance for Credit Losses (Details)               HTML    411K  
81: R168        Variable Interest Entities - Firm Sponsored         HTML    219K 
                Variable Interest Entities (Details)                             
151: R169        Variable Interest Entities - Resecuritizations,     HTML    112K  
                Multi-seller Conduits (Details)                                  
136: R170        Variable Interest Entities - Municipal Bond         HTML     96K  
                Vehicle VIEs (Details)                                           
207: R171        Variable Interest Entities - Credit Related Note,   HTML     74K  
                Asset Swap Vehicle VIEs (Details)                                
89: R172        Variable Interest Entities - Consolidated VIE       HTML    183K 
                Assets and Liabilities (Details)                                 
63: R173        Variable Interest Entities - Securitization         HTML    130K 
                Activity (Details)                                               
179: R174        Variable Interest Entities - Loans Sold to          HTML     88K  
                Third-Party Sponsored Securitization Entities                    
                (Details)                                                        
68: R175        Variable Interest Entities - Loan Delinquencies     HTML    130K 
                and Net Charge-offs (Details)                                    
21: R176        Goodwill and Other Intangible Assets - by Business  HTML     81K 
                Segment (Details)                                                
35: R177        Goodwill and Other Intangible Assets - Changes      HTML     83K 
                During Period (Details)                                          
192: R178        Goodwill and Other Intangible Assets - Mortgage     HTML    122K  
                Servicing Rights (Details)                                       
160: R179        Goodwill and Other Intangible Assets - Mortgage     HTML    108K  
                Fees and Related Income (Details)                                
197: R180        Goodwill and Other Intangible Assets - Key          HTML     80K  
                Economic Assumptions (Details)                                   
122: R181        Goodwill and Other Intangible Assets - Other        HTML    109K  
                Intangible Assets (Details)                                      
56: R182        Goodwill and Other Intangible Assets -              HTML     80K 
                Amortization Expense (Details)                                   
86: R183        Goodwill and Other Intangible Assets - Future       HTML     97K 
                Amortization Expense (Details)                                   
157: R184        Deposits - Noninterest and Interest-bearing         HTML    112K  
                (Details)                                                        
223: R185        Deposits - Time Deposits (Details)                  HTML    102K  
162: R186        Accounts Payable and Other Liabilities (Details)    HTML     75K  
22: R187        Long-Term debt - Summary of Long-Term Debt          HTML    312K 
                (Details)                                                        
32: R188        Long-term debt - Junior Subordinated Debt           HTML    180K 
                (Details)                                                        
174: R189        Preferred Stock (Details)                           HTML    207K  
104: R190        Common Stock (Details)                              HTML    161K  
215: R191        Earnings Per Share (Details)                        HTML    109K  
225: R192        Accumulated Other Comprehensive Income/(Loss) -     HTML    134K  
                Rollforward (Details)                                            
149: R193        Accumulated Other Comprehensive Income/(Loss) -     HTML    307K  
                Components of Other Comprehensive Income/(Loss)                  
                (Details)                                                        
123: R194        Income Taxes - Reconciliation of Effective Income   HTML     96K  
                Tax Rate (Details)                                               
210: R195        Income Taxes - Components of Income Tax             HTML    132K  
                Expense/(Benefit) (Details)                                      
37: R196        Income Taxes - Deferred Tax Assets and Liabilities  HTML    117K 
                (Details)                                                        
129: R197        Income Taxes - Unrecognized Tax Benefits (Details)  HTML    103K  
49: R198        Income Taxes - US and non-US components (Details)   HTML     72K 
65: R199        Restrictions on Cash and Intercompany Funds         HTML     86K 
                Transfers (Details)                                              
232: R200        Regulatory Capital (Details)                        HTML    201K  
60: R201        Off-Balance Sheet Lending-Related Financial         HTML    416K 
                Instruments, Guarantees and Other Commitments                    
                (Details)                                                        
230: R202        Off-Balance Sheet Lending-Related Financial         HTML    130K  
                Instruments, Guarantees and Other Commitments -                  
                Standby Letters of Credit and Other Financial                    
                Guarantees (Details)                                             
55: R203        Off-Balance Sheet Lending-Related Financial         HTML    150K 
                Instruments, Guarantees and Other Commitments -                  
                Loan Sales- and Securitization-Related                           
                Indemnifications (Details)                                       
93: R204        Off-Balance Sheet Lending-Related Financial         HTML     78K 
                Instruments, Guarantees and Other Commitments -                  
                Other Off-Balance Sheet Arrangements (Details)                   
98: R205        Commitments, Pledged Assets, and Collateral -       HTML    100K 
                Lease Commitments (Details)                                      
147: R206        Commitments, Pledged Assets, and Collateral -       HTML     88K  
                Pledged Assets and Collateral (Details)                          
76: R207        Litigation (Details)                                HTML    208K 
227: R208        International Operations (Details)                  HTML    128K  
216: R209        Business Segments - Narrative (Details)             HTML     73K  
79: R210        Business Segments (Details)                         HTML    231K 
97: R211        Parent Company - Statements of Income (Details)     HTML    134K 
54: R212        Parent Company - Balance Sheets (Details)           HTML    132K 
221: R213        Parent Company - Statements of Cash Flows           HTML    197K  
                (Details)                                                        
36: R214        Parent Company - Supplemental Information           HTML     90K 
                (Details)                                                        
217: XML         IDEA XML File -- Filing Summary                      XML    394K  
24: EXCEL       IDEA Workbook of Financial Reports                  XLSX   1.92M 
90: EXCEL       IDEA Workbook of Financial Reports (.xls)            XLS  20.18M 
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11: EX-101.CAL  XBRL Calculations -- jpm-20141231_cal                XML    893K 
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13: EX-101.LAB  XBRL Labels -- jpm-20141231_lab                      XML   7.67M 
14: EX-101.PRE  XBRL Presentations -- jpm-20141231_pre               XML   4.98M 
10: EX-101.SCH  XBRL Schema -- jpm-20141231                          XSD    963K 
84: ZIP         XBRL Zipped Folder -- 0000019617-15-000272-xbrl      Zip   1.73M 


‘R23’   —   Allowance for Credit Losses


This is an IDEA Financial Report.  [ Alternative Formats ]



 
v2.4.1.9
Allowance for Credit Losses
12 Months Ended
Allowance for Credit Losses [Abstract]  
Allowance for credit losses
Allowance for credit losses
JPMorgan Chase’s allowance for loan losses covers the consumer, including credit card, portfolio segments (primarily scored); and wholesale (risk-rated) portfolio, and represents management’s estimate of probable credit losses inherent in the Firm’s loan portfolio. The allowance for loan losses includes an asset-specific component, a formula-based component and a component related to PCI loans, as described below. Management also estimates an allowance for wholesale and consumer lending-related commitments using methodologies similar to those used to estimate the allowance on the underlying loans. During 2014, the Firm did not make any significant changes to the methodologies or policies used to determine its allowance for credit losses; such policies are described in the following paragraphs.
The asset-specific component of the allowance relates to loans considered to be impaired, which includes loans that have been modified in TDRs as well as risk-rated loans that have been placed on nonaccrual status. To determine the asset-specific component of the allowance, larger loans are evaluated individually, while smaller loans are evaluated as pools using historical loss experience for the respective class of assets. Scored loans (i.e., consumer loans) are pooled by product type, while risk-rated loans (primarily wholesale loans) are segmented by risk rating.
The Firm generally measures the asset-specific allowance as the difference between the recorded investment in the loan and the present value of the cash flows expected to be collected, discounted at the loan’s original effective interest rate. Subsequent changes in impairment are reported as an adjustment to the provision for loan losses. In certain cases, the asset-specific allowance is determined using an observable market price, and the allowance is measured as the difference between the recorded investment in the loan and the loan’s fair value. Impaired collateral-dependent loans are charged down to the fair value of collateral less costs to sell and therefore may not be subject to an asset-specific reserve as are other impaired loans. See Note 14 for more information about charge-offs and collateral-dependent loans.
The asset-specific component of the allowance for impaired loans that have been modified in TDRs incorporates the effects of foregone interest, if any, in the present value calculation and also incorporates the effect of the modification on the loan’s expected cash flows, which considers the potential for redefault. For residential real estate loans modified in TDRs, the Firm develops product-specific probability of default estimates, which are applied at a loan level to compute expected losses. In developing these probabilities of default, the Firm considers the relationship between the credit quality characteristics of the underlying loans and certain assumptions about home prices and unemployment, based upon industry-wide data. The Firm also considers its own historical loss experience to date based on actual redefaulted modified loans. For credit card loans modified in TDRs, expected losses incorporate projected redefaults based on the Firm’s historical experience by type of modification program. For wholesale loans modified in TDRs, expected losses incorporate redefaults based on management’s expectation of the borrower’s ability to repay under the modified terms.
The formula-based component is based on a statistical calculation to provide for incurred credit losses in performing risk-rated loans and all consumer loans, except for any loans restructured in TDRs and PCI loans. See Note 14 for more information on PCI loans.
For scored loans, the statistical calculation is performed on pools of loans with similar risk characteristics (e.g., product type) and generally computed by applying loss factors to outstanding principal balances over an estimated loss emergence period. The loss emergence period represents the time period between the date at which the loss is estimated to have been incurred and the ultimate realization of that loss (through a charge-off). Estimated loss emergence periods may vary by product and may change over time; management applies judgment in estimating loss emergence periods, using available credit information and trends.
Loss factors are statistically derived and sensitive to changes in delinquency status, credit scores, collateral values and other risk factors. The Firm uses a number of different forecasting models to estimate both the PD and the loss severity, including delinquency roll rate models and credit loss severity models. In developing PD and loss severity assumptions, the Firm also considers known and anticipated changes in the economic environment, including changes in home prices, unemployment rates and other risk indicators.
A nationally recognized home price index measure is used to estimate both the PD and the loss severity on residential real estate loans at the metropolitan statistical areas (“MSA”) level. Loss severity estimates are regularly validated by comparison to actual losses recognized on defaulted loans, market-specific real estate appraisals and property sales activity. The economic impact of potential modifications of residential real estate loans is not included in the statistical calculation because of the uncertainty regarding the type and results of such modifications.
For risk-rated loans, the statistical calculation is the product of an estimated PD and an estimated LGD. These factors are differentiated by risk rating and expected maturity. In assessing the risk rating of a particular loan, among the factors considered are the obligor’s debt capacity and financial flexibility, the level of the obligor’s earnings, the amount and sources for repayment, the level and nature of contingencies, management strength, and the industry and geography in which the obligor operates. These factors are based on an evaluation of historical and current information, and involve subjective assessment and interpretation. Emphasizing one factor over another or considering additional factors could impact the risk rating assigned by the Firm to that loan. PD estimates are based on observable external through-the-cycle data, using credit-rating agency default statistics. LGD estimates are based on the Firm’s history of actual credit losses over more than one credit cycle. Estimates of PD and LGD are subject to periodic refinement based on changes to underlying external and Firm-specific historical data.
Management applies judgment within an established framework to adjust the results of applying the statistical calculation described above. The determination of the appropriate adjustment is based on management’s view of loss events that have occurred but that are not yet reflected in the loss factors and that relate to current macroeconomic and political conditions, the quality of underwriting standards and other relevant internal and external factors affecting the credit quality of the portfolio. For the scored loan portfolios, adjustments to the statistical calculation are made in part by analyzing the historical loss experience for each major product segment. Factors related to unemployment, home prices, borrower behavior and lien position, the estimated effects of the mortgage foreclosure-related settlement with federal and state officials and uncertainties regarding the ultimate success of loan modifications are incorporated into the calculation, as appropriate. For junior lien products, management considers the delinquency and/or modification status of any senior liens in determining the adjustment. In addition, for the risk-rated portfolios, any adjustments made to the statistical calculation take into consideration model imprecision, deteriorating conditions within an industry, product or portfolio type, geographic location, credit concentration, and current economic events that have occurred but that are not yet reflected in the factors used to derive the statistical calculation.
Management establishes an asset-specific allowance for lending-related commitments that are considered impaired and computes a formula-based allowance for performing consumer and wholesale lending-related commitments. These are computed using a methodology similar to that used for the wholesale loan portfolio, modified for expected maturities and probabilities of drawdown.
Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. Subsequent evaluations of the loan portfolio, in light of the factors then prevailing, may result in significant changes in the allowances for loan losses and lending-related commitments in future periods. At least quarterly, the allowance for credit losses is reviewed by the Chief Risk Officer, the Chief Financial Officer and the Controller of the Firm and discussed with the Risk Policy and Audit Committees of the Board of Directors of the Firm. As of December 31, 2014, JPMorgan Chase deemed the allowance for credit losses to be appropriate (i.e., sufficient to absorb probable credit losses inherent in the portfolio).
Allowance for credit losses and loans and lending-related commitments by impairment methodology
The table below summarizes information about the allowance for loan losses, loans by impairment methodology, the allowance for lending-related commitments and lending-related commitments by impairment methodology.

 
2014
Year ended December 31,
(in millions)
Consumer,
excluding
credit card
 
Credit card
 
Wholesale
 
Total
Allowance for loan losses
 
 
 
 
 
 
 
Beginning balance at January 1,
$
8,456

 
$
3,795

 
$
4,013

 
$
16,264

Gross charge-offs
2,132


3,831

 
151

 
6,114

Gross recoveries
(814
)
 
(402
)
 
(139
)
 
(1,355
)
Net charge-offs/(recoveries)
1,318


3,429

 
12

 
4,759

Write-offs of PCI loans(a)
533

 

 

 
533

Provision for loan losses
414

 
3,079

 
(269
)
 
3,224

Other
31


(6
)
 
(36
)
 
(11
)
Ending balance at December 31,
$
7,050

 
$
3,439

 
$
3,696

 
$
14,185

 
 
 
 
 
 
 
 
Allowance for loan losses by impairment methodology
 
 
 
 
 
 
 
Asset-specific(b)
$
539

 
$
500

(c) 
$
87

 
$
1,126

Formula-based
3,186

 
2,939

 
3,609

 
9,734

PCI
3,325

 

 

 
3,325

Total allowance for loan losses
$
7,050

 
$
3,439

 
$
3,696

 
$
14,185

 
 
 
 
 
 
 
 
Loans by impairment methodology
 
 
 
 
 
 
 
Asset-specific
$
12,020

 
$
2,029

 
$
637

 
$
14,686

Formula-based
236,263

 
125,998

 
323,861

 
686,122

PCI
46,696

 

 
4

 
46,700

Total retained loans
$
294,979

 
$
128,027

 
$
324,502

 
$
747,508

 
 
 
 
 
 
 
 
Impaired collateral-dependent loans
 
 
 
 
 
 
 
Net charge-offs
$
133


$

 
$
21

 
$
154

Loans measured at fair value of collateral less cost to sell
3,025

 

 
326

 
3,351

 
 
 
 
 
 
 
 
Allowance for lending-related commitments
 
 
 
 
 
 
 
Beginning balance at January 1,
$
8

 
$

 
$
697

 
$
705

Provision for lending-related commitments
5

 

 
(90
)
 
(85
)
Other

 

 
2

 
2

Ending balance at December 31,
$
13

 
$

 
$
609

 
$
622

 
 
 
 
 
 
 
 
Allowance for lending-related commitments by impairment methodology
 
 
 
 
 
 
 
Asset-specific
$

 
$

 
$
60

 
$
60

Formula-based
13

 

 
549

 
562

Total allowance for lending-related commitments
$
13

 
$

 
$
609

 
$
622

 
 
 
 
 
 
 
 
Lending-related commitments by impairment methodology
 
 
 
 
 
 
 
Asset-specific
$

 
$

 
$
103

 
$
103

Formula-based
58,153

 
525,963

 
471,953

 
1,056,069

Total lending-related commitments
$
58,153

 
$
525,963

 
$
472,056

 
$
1,056,172

(a)
Write-offs of PCI loans are recorded against the allowance for loan losses when actual losses for a pool exceed estimated losses that were recorded as purchase accounting adjustments at the time of acquisition. A write-off of a PCI loan is recognized when the underlying loan is removed from a pool (e.g., upon liquidation). During the fourth quarter of 2014, the Firm recorded a $291 million adjustment to reduce the PCI allowance and the recorded investment in the Firm’s PCI loan portfolio, primarily reflecting the cumulative effect of interest forgiveness modifications. This adjustment had no impact to the Firm’s Consolidated statements of income.
(b)
Includes risk-rated loans that have been placed on nonaccrual status and loans that have been modified in a TDR.
(c)
The asset-specific credit card allowance for loan losses is related to loans that have been modified in a TDR; such allowance is calculated based on the loans’ original contractual interest rates and does not consider any incremental penalty rates.




(table continued from previous page)
 
 
 
 
 
 
 
 
2013
 
2012
Consumer,
excluding
credit card
 
Credit card
 
Wholesale
Total
 
Consumer,
excluding
credit card
 
Credit card
 
Wholesale
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
$
12,292

 
$
5,501

 
$
4,143

$
21,936

 
$
16,294

 
$
6,999

 
$
4,316

$
27,609

2,754

 
4,472

 
241

7,467

 
4,805

 
5,755

 
346

10,906

(847
)
 
(593
)
 
(225
)
(1,665
)
 
(508
)
 
(811
)
 
(524
)
(1,843
)
1,907

 
3,879

 
16

5,802

 
4,297

 
4,944

 
(178
)
9,063

53

 

 

53

 

 

 


(1,872
)
 
2,179

 
(119
)
188

 
302

 
3,444

 
(359
)
3,387

(4
)
 
(6
)
 
5

(5
)
 
(7
)
 
2

 
8

3

$
8,456

 
$
3,795

 
$
4,013

$
16,264

 
$
12,292

 
$
5,501

 
$
4,143

$
21,936

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
601

 
$
971

(c) 
$
181

$
1,753

 
$
729

 
$
1,681

(c) 
$
319

$
2,729

3,697

 
2,824

 
3,832

10,353

 
5,852

 
3,820

 
3,824

13,496

4,158

 

 

4,158

 
5,711

 

 

5,711

$
8,456

 
$
3,795

 
$
4,013

$
16,264

 
$
12,292

 
$
5,501

 
$
4,143

$
21,936

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
13,785

 
$
3,115

 
$
845

$
17,745

 
$
13,938

 
$
4,762

 
$
1,475

$
20,175

221,609

 
124,350

 
307,412

653,371

 
218,945

 
123,231

 
304,728

646,904

53,055

 

 
6

53,061

 
59,737

 

 
19

59,756

$
288,449

 
$
127,465

 
$
308,263

$
724,177

 
$
292,620

 
$
127,993

 
$
306,222

$
726,835

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
235

 
$

 
$
37

$
272

 
$
973

 
$

 
$
77

$
1,050

3,105

 

 
362

3,467

 
3,272

 

 
445

3,717

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
7

 
$

 
$
661

$
668

 
$
7

 
$

 
$
666

$
673

1

 

 
36

37

 

 

 
(2
)
(2
)

 

 


 

 

 
(3
)
(3
)
$
8

 
$

 
$
697

$
705

 
$
7

 
$

 
$
661

$
668

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$

 
$

 
$
60

$
60

 
$

 
$

 
$
97

$
97

8

 

 
637

645

 
7

 

 
564

571

$
8

 
$

 
$
697

$
705

 
$
7

 
$

 
$
661

$
668

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$

 
$

 
$
206

$
206

 
$

 
$

 
$
355

$
355

56,057

 
529,383

 
446,026

1,031,466

 
60,156

 
533,018

 
434,459

1,027,633

$
56,057

 
$
529,383

 
$
446,232

$
1,031,672

 
$
60,156

 
$
533,018

 
$
434,814

$
1,027,988


Dates Referenced Herein   and   Documents Incorporated by Reference

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