Allowance for credit losses

For a detailed discussion of the allowance for credit losses and the related accounting policies, refer to Note 13 of JPMorgan Chase’s 2017 Annual Report.

Allowance for credit losses and related information

The table below summarizes information about the allowances for loan losses and lending-related commitments, and includes a breakdown of loans and lending-related commitments by impairment methodology.



	2018													2017
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,	$	4,579		$	4,884			$	4,141		$	13,604		5,198				$	4,034			$	4,544		$	13,776
Gross charge-offs	539			2,578				241			3,358			1,105				2,223				99			3,427
Gross recoveries	(451		)	(244		)		(76		)	(771		)	(307		)		(193		)		(69		)	(569		)
Net charge-offs	88			2,334				165			2,587			798				2,030				30			2,858
Write-offs of PCI loans^(a)	93			—				—			93			46				—				—			46
Provision for loan losses	90			2,334				(98		)	2,326			448				2,380				(337		)	2,491
Other	—			—				—			—			(2		)		—				2			—
Ending balance at June 30,	$	4,488		$	4,884			$	3,878		$	13,250		$	4,800			$	4,384			$	4,179		$	13,363

Allowance for loan losses by impairment methodology
Asset-specific^(b)	$	226		$	402		^(c)	$	318		$	946		$	296			$	370		^(c)	$	345		$	1,011
Formula-based	2,130			4,482				3,560			10,172			2,239				4,014				3,834			10,087
PCI	2,132			—				—			2,132			2,265				—				—			2,265
Total allowance for loan losses	$	4,488		$	4,884			$	3,878		$	13,250		$	4,800			$	4,384			$	4,179		$	13,363

Loans by impairment methodology
Asset-specific	$	7,387		$	1,252			$	1,327		$	9,966		$	8,340			$	1,204			$	1,760		$	11,304
Formula-based	340,223			143,969				419,302			903,494			323,711				138,831				392,663			855,205
PCI	26,977			—				3			26,980			33,064				—				3			33,067
Total retained loans	$	374,587		$	145,221			$	420,632		$	940,440		$	365,115			$	140,035			$	394,426		$	899,576

Impaired collateral-dependent loans
Net charge-offs	$	14		$	—			$	—		$	14		$	36			$	—			$	16		$	52
Loans measured at fair value of collateral less cost to sell	2,124			—				300			2,424			2,234				—				296			2,530

Allowance for lending-related commitments
Beginning balance at January 1,	$	33		$	—			$	1,035		$	1,068		$	26			$	—			$	1,052		$	1,078
Provision for lending-related commitments	—			—				49			49			6				—				33			39
Other	—			—				—			—			—				—				—			—
Ending balance at June 30,	$	33		$	—			$	1,084		$	1,117		$	32			$	—			$	1,085		$	1,117

Allowance for lending-related commitments by impairment methodology
Asset-specific	$	—		$	—			$	139		$	139		$	—			$	—			$	211		$	211
Formula-based	33			—				945			978			32				—				874			906
Total allowance for lending-related commitments	$	33		$	—			$	1,084		$	1,117		$	32			$	—			$	1,085		$	1,117

Lending-related commitments by impairment methodology
Asset-specific	$	—		$	—			$	712		$	712		$	—			$	—			$	750		$	750
Formula-based	51,784			592,452				401,045			1,045,281			53,872			^(d)	576,264				365,748			995,884			^(d)
Total lending-related commitments	$	51,784		$	592,452			$	401,757		$	1,045,993		$	53,872		^(d)	$	576,264			$	366,498		$	996,634		^(d)


(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.


(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.


(d)	The prior period amounts have been revised to conform with the current period presentation.