Allowance for credit losses

For detailed discussion of the allowance for credit losses and the related accounting policies, see Note 15 on pages 276–279 JPMorgan Chase’s 2012 Annual Report.

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.



	2013													2012
Six months ended June 30, (in millions)	Consumer, excluding credit card			Credit card				Wholesale			Total			Consumer, excluding credit card			Credit card				Wholesale			Total
Allowance for loan losses
Beginning balance at January 1,	$	12,292		$	5,501			$	4,143		$	21,936		$	16,294		$	6,999			$	4,316		$	27,609
Gross charge-offs	1,295			2,414				116			3,825			2,188			3,210				165			5,563
Gross recoveries	(231		)	(318		)		(148		)	(697		)	(268		)	(479		)		(151		)	(898		)
Net charge-offs/(recoveries)	1,064			2,096				(32		)	3,128			1,920			2,731				14			4,665
Provision for loan losses	(531		)	1,046				64			579			(423		)	1,231				38			846
Other	(6		)	(6		)		9			(3		)	(8		)	—				9			1
Ending balance at June 30,	$	10,691		$	4,445			$	4,248		$	19,384		$	13,943		$	5,499			$	4,349		$	23,791

Allowance for loan losses by impairment methodology
Asset-specific^(a)	$	713		$	1,227		^(b)	$	228		$	2,168		$	1,004		$	1,977		^(b)	$	407		$	3,388
Formula-based	4,267			3,218				4,020			11,505			7,228			3,522				3,942			14,692
PCI	5,711			—				—			5,711			5,711			—				—			5,711
Total allowance for loan losses	$	10,691		$	4,445			$	4,248		$	19,384		$	13,943		$	5,499			$	4,349		$	23,791

Loans by impairment methodology
Asset-specific	$	14,251		$	3,857			$	1,032		$	19,140		$	11,614		$	5,794			$	1,946		$	19,354
Formula-based	216,401			120,431				307,164			643,996			225,821			118,799				296,927			641,547
PCI	56,736			—				12			56,748			62,611			—				15			62,626
Total retained loans	$	287,388		$	124,288			$	308,208		$	719,884		$	300,046		$	124,593			$	298,888		$	723,527

Impaired collateral-dependent loans
Net charge-offs	$	132		$	—			$	10		$	142		$	51		$	—			$	46		$	97
Loans measured at fair value of collateral less cost to sell	3,152			—				394			3,546			887			—				671			1,558

Allowance for lending-related commitments
Beginning balance at January 1,	$	7		$	—			$	661		$	668		$	7		$	—			$	666		$	673
Provision for lending-related commitments	1			—				84			85			—			—				94			94
Other	—			—				—			—			—			—				(3		)	(3		)
Ending balance at June 30,	$	8		$	—			$	745		$	753		$	7		$	—			$	757		$	764

Allowance for lending-related commitments by impairment methodology
Asset-specific	$	—		$	—			$	79		$	79		$	—		$	—			$	181		$	181
Formula-based	8			—				666			674			7			—				576			583
Total allowance for lending-related commitments	$	8		$	—			$	745		$	753		$	7		$	—			$	757		$	764

Lending-related commitments by impairment methodology
Asset-specific	$	—		$	—			$	283		$	283		$	—		$	—			$	565		$	565
Formula-based	62,303			532,359				445,189			1,039,851			62,438			534,267				419,076			1,015,781
Total lending-related commitments	$	62,303		$	532,359			$	445,472		$	1,040,134		$	62,438		$	534,267			$	419,641		$	1,016,346


(a)	Includes risk-rated loans that have been placed on nonaccrual status and loans that have been modified in a TDR.


(b)	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.