Loans

3 Months Ended

Mar. 31, 2011

Loans [Abstract]

LOANS

NOTE 13 — LOANS

Loan accounting framework

The accounting for a loan depends on management’s strategy for the loan, and on whether the loan was credit-impaired at the date of acquisition. The Firm accounts for and measures the loans as follows:

• Originated or purchased loans held-for-investment (i.e., “retained”), other than PCI loans, are measured at the principal amount outstanding, net of the following: allowance for loan losses; net charge-offs; interest applied to principal (for loans accounted for on the cost recovery method); unamortized discounts and premiums; and deferred loan fees or costs.

• Held-for-sale loans are measured at the lower of cost or fair value, with valuation changes recorded in noninterest revenue.

• Loans used in a trading strategy or risk managed on a fair value basis are measured at fair value, with changes in fair value recorded in noninterest revenue.

• PCI loans held-for-investment are initially recorded at fair value upon acquisition.

For a detailed discussion of loans, including accounting policies, see Note 14 on pages 220–238 of JPMorgan Chase’s 2010 Annual Report. See Note 4 on pages 105–106 of this Form 10-Q for further information on the Firm’s elections of fair value accounting under the fair value option. See Note 3 on pages 94–105 of this Form 10-Q for further information on loans carried at fair value and classified as trading assets.

Loan portfolio

The Firm’s loan portfolio is divided into three portfolio segments, which are the same segments used by the Firm to determine the allowance for loan losses: Wholesale; Consumer, excluding credit card; and Credit Card. Within each portfolio segment, the Firm monitors and assesses the credit risk in the following classes of loans, based on the risk characteristics of each loan class:

Wholesale^(a)

•   Commercial and industrial

•   Real estate

•   Financial institutions

•   Government agencies

•   Other

Consumer, excluding

credit card^(b)

Residential real estate — excluding PCI

•   Home equity — senior lien

•   Home equity — junior lien

•   Prime mortgage, including option adjustable-rate mortgages (“ARMs”)

•   Subprime mortgage

Other consumer loans

•   Auto^(c)

•   Business banking^(c)

•    Student and other

Residential real estate — PCI

•    Home equity

•    Prime mortgage

•    Subprime mortgage

•    Option ARMs

Credit Card

•   Chase, excluding accounts originated by Washington Mutual

•    Accounts originated by Washington Mutual

(a)	Includes loans reported in IB, Commercial Banking (“CB”), Treasury & Securities Services (“TSS”), Asset Management (“AM”) and Corporate/Private Equity segments.
(b)	Includes loans reported in RFS, auto and student loans reported in Card Services & Auto (“Card”), and residential real estate loans reported in the Corporate/Private Equity segment.
(c)	Includes auto and business banking risk-rated loans that apply the Firm’s wholesale methodology for determining the allowance for loan losses; these loans are managed by Card and RFS, respectively, and therefore, for consistency in presentation, are included with the other consumer loan classes.

The following table summarizes the Firm’s loan balances by portfolio segment:

			Consumer, excluding
March 31, 2011 (in millions)	Wholesale		credit card		Credit Card		Total
Retained	$	229,648	$	320,998	$	124,791	$	675,437	(a)
Held-for-sale		4,554		188		4,012		8,754
At fair value		1,805		—		—		1,805
Total	$	236,007	$	321,186	$	128,803	$	685,996

			Consumer, excluding
December 31, 2010 (in millions)	Wholesale		credit card		Credit Card		Total
Retained	$	222,510	$	327,464	$	135,524	$	685,498	(a)
Held-for-sale		3,147		154		2,152		5,453
At fair value		1,976		—		—		1,976
Total	$	227,633	$	327,618	$	137,676	$	692,927

(a) Loans (other than PCI loans and those for which the fair value option has been selected) are presented net of unearned income, unamortized discounts and premiums, and net deferred loan costs of $2.4 billion and $1.9 billion at March 31, 2011, and December 31, 2010, respectively.

The following table provides information about the carrying value of retained loans purchased, retained loans sold and retained loans reclassified to loans held-for-sale during the periods indicated. This table excludes loans recorded at fair value. On an on-going basis, the Firm manages its exposure to credit risk. Selling loans is one way that the Firm reduces its credit exposures.

			Consumer, excluding
Three months ended March 31, 2011 (in millions)	Wholesale		credit card		Credit Card		Total
Purchases:	$	123	$	1,992	$	—	$	2,115
Sales:		877		257		—		1,134
Retained loans reclassified to held-for-sale		177		—		1,912		2,089

The following table provides information about gains and losses on loan sales by portfolio segment.

Three months ended March 31, (in millions)	2011			2010
Net gains/(losses) on sales of loans (including lower of cost or fair value adjustments)(a)
Wholesale	$	61		$	79
Consumer, excluding credit card		25			30
Credit Card		(20	)		—
Total net gains/(losses) on sales of loans (including lower of cost or fair value adjustments)(a)	$	66		$	109

(a) Excludes sales related to loans accounted for at fair value.

Wholesale loan portfolio

Wholesale loans include loans made to a variety of customers from large corporate and institutional clients to certain high-net worth individuals. The primary credit quality indicator for wholesale loans is the risk rating assigned each loan. For further information on the risk ratings, see Note 14 on pages 220–238 of JPMorgan Chase’s 2010 Annual Report.

The table below provides information by class of receivable for the retained loans in the Wholesale portfolio segment.

	Commercial
	and industrial						Real estate
	March 31,			December 31,			March 31,			December 31,
(in millions, except ratios)	2011			2010			2011			2010
Loans by risk ratings
Investment-grade	$	33,942		$	31,697		$	28,884		$	28,504
Noninvestment-grade:
Noncriticized		31,943			30,874			16,167			16,425
Criticized performing		2,393			2,371			5,405			5,769
Criticized–total nonaccrual		1,457			1,634			2,364			2,937
Total noninvestment grade		35,793			34,879			23,936			25,131
Total retained loans	$	69,735		$	66,576		$	52,820		$	53,635
% of total criticized to total retained loans		5.52	%		6.02	%		14.71	%		16.23	%
% of nonaccrual loans to total retained loans		2.09			2.45			4.48			5.48
Loans by geographic distribution(a)
Total non-U.S.	$	19,298		$	17,731		$	1,513		$	1,963
Total U.S.		50,437			48,845			51,307			51,672
Total retained loans	$	69,735		$	66,576		$	52,820		$	53,635
Loan delinquency(b)
Current and less than 30 days past due and still accruing	$	68,092		$	64,501		$	50,162		$	50,299
30–89 days past due and still accruing		180			434			247			290
90 or more days past due and still accruing(c)		6			7			47			109
Nonaccrual		1,457			1,634			2,364			2,937
Total retained loans	$	69,735		$	66,576		$	52,820		$	53,635

(a)	U.S. and non-U.S. distribution is determined based predominantly on the domicile of the borrower.
(b)	For wholesale loans, the past due status of a loan is generally not a significant indicator of credit quality due to the ongoing review and monitoring of an obligor’s ability to meet contractual obligations. For a discussion of more significant factors, see Note 14 on page 223 of JPMorgan Chase’s 2010 Annual Report.
(c)	Represents loans that are 90 days or more past due as to principal and/or interest, but that are still accruing interest; these loans are considered well-collateralized.
(d)	Other primarily includes loans to special purpose entities and loans to private banking clients. See Note 1 on pages 164–165 of the Firm’s 2010 Annual Report for additional information on SPEs.

The following table presents additional information on the real estate class of loans within the wholesale portfolio segment for the periods indicated. For further information on real estate loans, see Note 14 on pages 220–238 of JPMorgan Chase’s 2010 Annual Report.

	Multi-family						Commercial lessors
	March 31,			December 31,			March 31,			December 31,
(in millions, except ratios)	2011			2010			2011			2010
Real estate retained loans	$	30,501		$	30,604		$	15,226		$	15,796
Criticized exposure		3,623			3,798			2,850			3,593
% of total real estate retained loans		11.88	%		12.41	%		18.72	%		22.75	%
Criticized nonaccrual	$	1,027		$	1,016		$	1,000		$	1,549
% of total real estate retained loans		3.37	%		3.32	%		6.57	%		9.81	%

Financial																		Total
institutions						Government agencies						Other(d)						retained loans
March 31,			December 31,			March 31,			December 31,			March 31,			December 31,			March 31,			December 31,
2011			2010			2011			2010			2011			2010			2011			2010
$	24,940		$	22,525		$	6,304		$	6,871		$	59,089		$	56,450		$	153,159		$	146,047
	7,312			8,480			355			382			7,642			6,012			63,419			62,173
	297			317			5			3			392			320			8,492			8,780
	90			136			22			22			645			781			4,578			5,510
	7,699			8,933			382			407			8,679			7,113			76,489			76,463
$	32,639		$	31,458		$	6,686		$	7,278		$	67,768		$	63,563		$	229,648		$	222,510
	1.19	%		1.44	%		0.40	%		0.34	%		1.53	%		1.73	%		5.69	%		6.42	%
	0.28			0.43			0.33			0.30			0.95			1.23			1.99			2.48
$	23,704		$	19,756		$	834		$	870		$	27,113		$	25,831		$	72,462		$	66,151
	8,935			11,702			5,852			6,408			40,655			37,732			157,186			156,359
$	32,639		$	31,458		$	6,686		$	7,278		$	67,768		$	63,563		$	229,648		$	222,510
$	32,454		$	31,289		$	6,658		$	7,222		$	66,362		$	61,837		$	223,728		$	215,148
	93			31			6			34			693			704			1,219			1,493
	2			2			—			—			68			241			123			359
	90			136			22			22			645			781			4,578			5,510
$	32,639		$	31,458		$	6,686		$	7,278		$	67,768		$	63,563		$	229,648		$	222,510

Commercial construction and development						Other						Total real estate loans
March 31,			December 31,			March 31,			December 31,			March 31,			December 31,
2011			2010			2011			2010			2011			2010
$	3,294		$	3,395		$	3,799		$	3,840		$	52,820		$	53,635
	535			619			761			696			7,769			8,706
	16.24	%		18.23	%		20.03	%		18.13	%		14.71	%		16.23	%
$	141		$	174		$	196		$	198		$	2,364		$	2,937
	4.28	%		5.13	%		5.16	%		5.16	%		4.48	%		5.48	%

Wholesale impaired loans and loan modifications

Wholesale impaired loans include loans that have been placed on nonaccrual status and/or that have been modified in a TDR. All impaired loans are evaluated for an asset-specific allowance as described in Note 14 on pages 139—140 of this Form 10-Q.

The table below set forth information about the Firm’s wholesale impaired loans.

	Commercial								Financial				Government								Total
	and industrial				Real estate				institutions				agencies				Other				retained loans
	March 31,		December 31,		March 31,		December 31,		March 31,		December 31,		March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
(in millions)	2011		2010		2011		2010		2011		2010		2011		2010		2011		2010		2011		2010
Impaired loans
With an allowance	$	1,382	$	1,512	$	2,043	$	2,510	$	72	$	127	$	22	$	22	$	550	$	697	$	4,069	$	4,868
Without an allowance(a)		135		157		257		445		18		8		—		—		19		8		429		618
Total impaired loans	$	1,517	$	1,669	$	2,300	$	2,955	$	90	$	135	$	22	$	22	$	569	$	705	$	4,498	$	5,486
Allowance for loan losses related to impaired loans(b)	$	414	$	435	$	436	$	825	$	28	$	61	$	14	$	14	$	138	$	239	$	1,030	$	1,574
Unpaid principal balance of impaired loans(c)		2,507		2,453		2,777		3,487		218		244		31		30		917		1,046		6,450		7,260

(a)	When the discounted cash flows, collateral value or market price equals or exceeds the recorded investment in the loan, then the loan does not require an allowance. This typically occurs when the impaired loans have been partially charged-off and/or there have been interest payments received and applied to the loan balance.
(b)	The allowance for impaired loans is included in JPMorgan Chase’s asset-specific allowance for loan losses.
(c)	Represents the contractual amount of principal owed at March 31, 2001 and December 31, 2010. The unpaid principal balance differs from the impaired loan balances due to various factors, including charge-offs; interest payments received and applied to the carrying value; net deferred loan fees or costs; and unamortized discount or premiums on purchased loans.

The following table presents the Firm’s average impaired loans for the periods indicated.

Three months ended March 31,	Average impaired loans
(in millions)	2011		2010
Commercial and industrial	$	1,553	$	1,905
Real estate		2,730		3,041
Financial institutions		94		512
Government agencies		22		3
Other		637		995
Total(a)	$	5,036	$	6,456

(a) The related interest income on accruing impaired loans and interest income recognized on a cash basis were not material for the three months ended March 31, 2011 and 2010.

The following table provides information about the Firm’s wholesale loans modified in troubled debt restructurings (“TDRs”). These TDR loans are included as impaired loans in the above tables.

	Commercial								Financial				Government								Total
	and industrial				Real estate				institutions				agencies				Other				retained loans
	March 31,		December 31,		March 31,		December 31,		March 31,		December 31,		March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
(in millions)	2011		2010		2011		2010		2011		2010		2011		2010		2011		2010		2011		2010
Loans modified in troubled debt restructurings(a)	$	156	$	212	$	270	$	907	$	1	$	1	$	22	$	22	$	—	$	1	$	449	$	1,143
TDRs on nonaccrual status		105		163		269		831		1		1		22		22		—		1		397		1,018
Additional commitments to lend to borrowers whose loans have been modified in TDRs		4		1		18		—		—		—		—		—		—		—		22		1

(a) These modifications generally provided interest rate concessions to the borrower or deferral of principal repayments.

Consumer loan portfolio

Consumer loans, excluding credit card loans, consist primarily of residential mortgages, home equity loans, auto loans, business banking loans, and student and other loans, with a primary focus on serving the prime consumer credit market. The portfolio also includes home equity loans secured by junior liens and mortgage loans with interest-only payment options to predominantly prime borrowers, as well as certain payment-option loans originated by Washington Mutual that may result in negative amortization.

The table below provides information about consumer retained loans by class, excluding the credit card loan portfolio segment.

(in millions)	March 31, 2011		December 31, 2010
Residential real estate – excluding PCI
Home equity:
Senior lien(a)	$	24,071	$	24,376
Junior lien(b)		61,182		64,009
Mortgages:
Prime, including option ARMs		74,682		74,539
Subprime		10,841		11,287
Other consumer loans
Auto		47,411		48,367
Business banking		16,957		16,812
Student and other		15,089		15,311
Residential real estate – PCI
Home equity		23,973		24,459
Prime mortgage		16,725		17,322
Subprime mortgage		5,276		5,398
Option ARMs		24,791		25,584
Total retained loans	$	320,998	$	327,464

(a)	Represents loans where JPMorgan Chase holds the first security interest on the property.
(b)	Represents loans where JPMorgan Chase holds a security interest that is subordinate in rank to other liens.

Delinquency rates are a primary credit quality indicator for consumer loans. Other credit quality indicators for consumer loans include:

• For residential real estate loans, including both non-PCI and PCI portfolios: The current estimated loan-to-value (“LTV”) ratio, or the combined LTV ratio in the case of loans with a junior lien, the geographic distribution of the loan collateral, and the borrowers’ current or “refreshed” FICO score.

• For auto, scored business banking and student loans: Geographic distribution.

• For risk-rated business banking and auto loans: Risk ratings of the loan, geographic considerations and whether the loan is considered to be criticized and/or nonaccrual.

For further information on consumer credit quality indicators, see Note 14 on pages 220–238 of JPMorgan Chase’s 2010 Annual Report.

Residential real estate — excluding PCI loans

The tables below provide information by class for residential real estate (excluding PCI) retained loans in the consumer, excluding credit card portfolio segment.

	Home equity
	Senior lien						Junior lien
	March 31,			December 31,			March 31,			December 31,
(in millions, except ratios)	2011			2010			2011			2010
Loan delinquency(a)
Current and less than 30 days past due	$	23,354		$	23,615		$	59,676		$	62,315
30–149 days past due		364			414			1,304			1,508
150 or more days past due		353			347			202			186
Total retained loans	$	24,071		$	24,376		$	61,182		$	64,009
% of 30+ days past due to total retained loans		2.98	%		3.12	%		2.46	%		2.65	%
90 or more days past due and still accruing	$	—		$	—		$	—		$	—
Nonaccrual loans(b)		470			479			793			784
Current estimated LTV ratios(c)(d)(e)
Greater than 125% and refreshed FICO scores:
Equal to or greater than 660	$	558		$	528		$	7,026		$	6,928
Less than 660		243			238			2,530			2,495
101% to 125% and refreshed FICO scores:
Equal to or greater than 660		1,100			974			9,390			9,403
Less than 660		354			325			2,836			2,873
80% to 100% and refreshed FICO scores:
Equal to or greater than 660		2,934			2,860			12,603			13,333
Less than 660		744			738			2,940			3,155
Less than 80% and refreshed FICO scores:
Equal to or greater than 660		15,478			15,994			20,759			22,527
Less than 660		2,660			2,719			3,098			3,295
U.S. government-guaranteed		—			—			—			—
Total retained loans	$	24,071		$	24,376		$	61,182		$	64,009
Geographic region
California	$	3,336		$	3,348		$	14,037		$	14,656
New York		3,266			3,272			11,809			12,278
Texas		3,499			3,594			2,114			2,239
Florida		1,078			1,088			3,312			3,470
Illinois		1,622			1,635			4,068			4,248
Ohio		1,977			2,010			1,487			1,568
New Jersey		731			732			3,461			3,617
Michigan		1,159			1,176			1,545			1,618
Arizona		1,461			1,481			2,827			2,979
Washington		767			776			2,051			2,142
All other(f)		5,175			5,264			14,471			15,194
Total retained loans	$	24,071		$	24,376		$	61,182		$	64,009

(a)	Mortgage loans insured by U.S. government agencies are included in the delinquency classifications presented. Prior period amounts have been revised to conform to the current period presentation.
(b)	At March 31, 2011, and December 31, 2010, nonaccrual loans excluded mortgage loans insured by U.S. government agencies of $9.8 billion and $10.5 billion, respectively, that are accruing at the guaranteed reimbursement rate. These amounts were excluded as reimbursement of insured amounts is proceeding normally.
(c)	Represents the aggregate unpaid principal balance of loans divided by the estimated current property value. Current property values are estimated, at a minimum, quarterly, based on home valuation models utilizing nationally recognized home price index valuation estimates incorporating actual data to the extent available and forecasted data where actual data is not available. These property values do not represent actual appraised loan level collateral values; as such, the resulting ratios are necessarily imprecise and should be viewed as estimates.
(d)	Junior lien represents combined LTV, which considers all available lien positions related to the property. All other products are presented without consideration of subordinate liens on the property.
(e)	Refreshed FICO scores represent each borrower’s most recent credit score, which is obtained by the Firm at least on a quarterly basis.
(f)	At March 31, 2011, and December 31, 2010, included mortgage loans insured by U.S. government agencies of $13.0 billion and $12.9 billion, respectively.
(g)	At March 31, 2011, and December 31, 2010, excluded mortgage loans insured by U.S. government agencies of $10.4 billion and $11.4 billion, respectively. These amounts were excluded as reimbursement of insured amounts is proceeding normally.

Mortgages												Total residential real
Prime, including option ARMs						Subprime						estate (excluding PCI)
March 31,			December 31,			March 31,			December 31,			March 31,			December 31,
2011			2010			2011			2010			2011			2010
$	60,399		$	59,223		$	8,236		$	8,477		$	151,665		$	153,630
	3,155			4,052			961			1,184			5,784			7,158
	11,128			11,264			1,644			1,626			13,327			13,423
$	74,682		$	74,539		$	10,841		$	11,287		$	170,776		$	174,211
	6.36%	(g)		6.68	%(g)		24.03	%		24.90	%		5.61%	(g)		5.88	%(g)
$	—		$	—		$	—		$	—		$	—		$	—
	4,166			4,320			2,106			2,210			7,535			7,793
$	3,250		$	3,039		$	377		$	338		$	11,211		$	10,833
	1,603			1,595			1,209			1,153			5,585			5,481
	4,798			4,733			511			506			15,799			15,616
	1,805			1,775			1,481			1,486			6,476			6,459
	10,652			10,720			889			925			27,078			27,838
	2,792			2,786			1,841			1,955			8,317			8,634
	32,200			32,385			2,056			2,252			70,493			73,158
	4,587			4,557			2,477			2,672			12,822			13,243
	12,995			12,949			—			—			12,995			12,949
$	74,682		$	74,539		$	10,841		$	11,287		$	170,776		$	174,211
$	19,070		$	19,278		$	1,660		$	1,730		$	38,103		$	39,012
	9,745			9,587			1,332			1,381			26,152			26,518
	2,688			2,569			333			345			8,634			8,747
	4,709			4,840			1,362			1,422			10,461			10,820
	3,885			3,765			445			468			10,020			10,116
	455			462			265			275			4,184			4,315
	2,027			2,026			513			534			6,732			6,909
	951			963			281			294			3,936			4,051
	1,274			1,320			230			244			5,792			6,024
	2,021			2,056			238			247			5,077			5,221
	27,857			27,673			4,182			4,347			51,685			52,478
$	74,682		$	74,539		$	10,841		$	11,287		$	170,776		$	174,211

Residential real estate impaired loans and loan modifications — excluding PCI loans

The Firm is participating in the U.S. Treasury’s Making Home Affordable (“MHA”) programs and is continuing to expand its other loss-mitigation efforts for financially distressed borrowers who do not qualify for the MHA programs. For further information, see Note 14 on pages 220–238 of JPMorgan Chase’s 2010 Annual Report.

The tables below set forth information about the Firm’s residential real estate impaired loans, excluding PCI. These loans are considered to be impaired as they have been modified in a TDR. All impaired loans are evaluated for an asset-specific allowance as described in Note 14 on pages 139–140 of this Form 10-Q.

	Home equity								Mortgages
									Prime, including								Total residential real
	Senior lien				Junior lien				option ARMs				Subprime				estate (excluding PCI)
	March 31,		December 31,		March 31,		December 31,		March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
(in millions)	2011		2010		2011		2010		2011		2010		2011		2010		2011		2010
Impaired loans(a)(b)
With an allowance	$	217	$	211	$	380	$	258	$	2,421	$	1,525	$	2,573	$	2,563	$	5,591	$	4,557
Without an allowance(c)		17		15		29		25		569		559		181		188		796		787
Total impaired loans(d)	$	234	$	226	$	409	$	283	$	2,990	$	2,084	$	2,754	$	2,751	$	6,387	$	5,344
Allowance for loan losses related to impaired loans	$	72	$	77	$	114	$	82	$	92	$	97	$	537	$	555	$	815	$	811
Unpaid principal balance of impaired loans(e)		281		265		551		402		3,757		2,751		3,872		3,777		8,461		7,195
Impaired loans on nonaccrual status		38		38		178		63		570		534		595		632		1,381		1,267

(a)	Represents loans modified in a TDR. These modifications generally provided interest rate concessions to the borrower or deferral of principal repayments.
(b)	There were no additional commitments to lend to borrowers whose loans have been modified in TDRs as of March 31, 2011, and December 31, 2010.
(c)	When discounted cash flows or collateral value equals or exceeds the recorded investment in the loan, the loan does not require an allowance. This result typically occurs when an impaired loan has been partially charged off.
(d)	At March 31, 2011, and December 31, 2010, $3.6 billion and $3.0 billion, respectively, of loans modified subsequent to repurchase from Ginnie Mae were excluded from loans accounted for as TDRs. When such loans perform subsequent to modification they are generally sold back into Ginnie Mae loan pools. Modified loans that do not re-perform become subject to foreclosure. Substantially all amounts due under the terms of these loans continue to be insured, and where applicable, reimbursement of insured amounts is proceeding normally.
(e)	Represents the contractual amount of principal owed at March 31, 2011, and December 31, 2010. The unpaid principal balance differs from the impaired loan balances due to various factors, including charge-offs; net deferred loan fees or costs; and unamortized discounts or premiums on purchased loans.

The following table presents average impaired loans and the related interest income reported by the Firm.

									Interest income on impaired
Three months ended March 31,	Average impaired loans				Interest income on impaired loans(a)				loans on a cash basis(a)
(in millions)	2011		2010		2011		2010		2011		2010
Home equity
Senior lien	$	231	$	165	$	3	$	2	$	—	$	—
Junior lien		353		269		4		3		—		—
Mortgages
Prime, including option ARMs		2,477		976		26		17		3		1
Subprime		2,750		2,206		34		27		3		4
Total residential real estate (excluding PCI)	$	5,811	$	3,616	$	67	$	49	$	6	$	5

(a) Generally, interest income on loans modified in a TDR is recognized on a cash basis until such time as the borrower has made a minimum of six payments under the new terms. As of March 31, 2011 and 2010, loans of $640 million and $663 million, respectively, were TDRs for which the borrowers had not yet made six payments under their modified terms.

Other consumer loans

The tables below provide information for other consumer retained loan classes, including auto, business banking and student loans.

	Auto						Business banking						Student and other					Total other consumer
	March 31,			December 31,			March 31,			December 31,			March 31,			December		March 31,			December 31,
(in millions, except ratios)	2011			2010			2011			2010			2011			31, 2010		2011			2010
Loan delinquency(a)
Current and less than 30 days past due	$	46,949		$	47,778		$	16,443		$	16,240		$	13,744		$	13,998	$	77,136		$	78,016
30–119 days past due		454			579			322			351			828			795		1,604			1,725
120 or more days past due		8			10			192			221			517			518		717			749
Total retained loans	$	47,411		$	48,367		$	16,957		$	16,812		$	15,089		$	15,311	$	79,457		$	80,490
% of 30+ days past due to total retained loans		0.97	%		1.22	%		3.03	%		3.40	%		1.99%	(d)	1.61%(d)			1.61%	(d)	1.75%(d)
90 or more days past due and still accruing(b)	$	—		$	—		$	—		$	—		$	615		$	625	$	615		$	625
Nonaccrual loans		120			141			810			832			107			67		1,037			1,040
Geographic region
California	$	4,214		$	4,307		$	966		$	851		$	1,314		$	1,330	$	6,494		$	6,488
New York		3,781			3,875			2,882			2,877			1,296			1,305		7,959			8,057
Texas		4,385			4,505			2,582			2,550			1,245			1,273		8,212			8,328
Florida		1,865			1,923			222			220			710			722		2,797			2,865
Illinois		2,540			2,608			1,323			1,320			934			940		4,797			4,868
Ohio		2,855			2,961			1,603			1,647			994			1,010		5,452			5,618
New Jersey		1,832			1,842			229			422			499			502		2,560			2,766
Michigan		2,377			2,434			1,394			1,401			714			729		4,485			4,564
Arizona		1,438			1,499			1,210			1,218			377			387		3,025			3,104
Washington		734			716			133			115			275			279		1,142			1,110
All other		21,390			21,697			4,413			4,191			6,731			6,834		32,534			32,722
Total retained loans	$	47,411		$	48,367		$	16,957		$	16,812		$	15,089		$	15,311	$	79,457		$	80,490
Loans by risk ratings(c)
Noncriticized	$	5,840		$	5,803		$	11,153		$	10,831		NA			NA		$	16,993		$	16,634
Criticized performing		257			265			457			502		NA			NA			714			767
Criticized nonaccrual		8			12			574			574		NA			NA			582			586

(a)	Loans insured by U.S. government agencies under the Federal Family Education Loan Program (“FFELP”) are included in the delinquency classifications presented based on their payment status. Prior period amounts have been revised to conform to the current period presentation.
(b)	These amounts represent student loans, which are insured by U.S. government agencies under the FFELP. These amounts were accruing as reimbursement of insured amounts is proceeding normally.
(c)	For risk-rated business banking and auto loans, the primary credit quality indicator is the risk rating of the loan, including whether the loans are considered to be criticized and/or nonaccrual.
(d)	At March 31, 2011, and December 31, 2010, excluded loans 30 days or more past due and still accruing, which are insured by U.S. government agencies under the FFELP, of $1.0 billion and $1.1 billion, respectively. These amounts were excluded as reimbursement of insured amounts is proceeding normally.

Other consumer impaired loans

The tables below set forth information about the Firm’s other consumer impaired loans, including risk-rated business banking and auto loans that have been placed on nonaccrual status, and any loan that has been modified in a TDR.

	Auto				Business banking				Total other consumer(c)
	March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
(in millions)	2011		2010		2011		2010		2011		2010
Impaired loans
With an allowance	$	98	$	102	$	769	$	774	$	867	$	876
Without an allowance(a)		—		—		—		—		—		—
Total impaired loans	$	98	$	102	$	769	$	774	$	867	$	876
Allowance for loan losses related to impaired loans	$	16	$	16	$	236	$	248	$	252	$	264
Unpaid principal balance of impaired loans(b)		131		132		894		899		1,025		1,031
Impaired loans on nonaccrual status		47		50		631		647		678		697

(a)	When discounted cash flows, collateral value or market price equals or exceeds the recorded investment in the loan, then the loan does not require an allowance. This typically occurs when the impaired loans have been partially charged off and/or there have been interest payments received and applied to the loan balance.
(b)	Represents the contractual amount of principal owed at March 31, 2011, and December 31, 2010. The unpaid principal balance differs from the impaired loan balances due to various factors, including charge-offs; interest payments received and applied to the principal balance; net deferred loan fees or costs; and unamortized discounts or premiums on purchased loans.
(c)	There were no impaired student and other loans at March 31, 2011, and December 31, 2010.

The following table presents average impaired loans.

Three months ended March 31,	Average impaired loans(b)
(in millions)	2011		2010
Auto	$	99	$	127
Business banking		772		510
Total other consumer(a)	$	871	$	637

(a)	There were no student and other loans modified in TDRs at March 31, 2011, and December 31, 2010.
(b)	The related interest income on impaired loans, including those on cash basis, was not material for the three months ended March 31, 2011 and 2010.

The following table provides information about the Firm’s other consumer loans modified in TDRs. These TDR loans are included as impaired loans in the tables above.

	Auto				Business banking				Total other consumer(c)
	March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
(in millions)	2011		2010		2011		2010		2011		2010
Loans modified in troubled debt restructurings(a)(b)	$	90	$	91	$	408	$	395	$	498	$	486
TDRs on nonaccrual status		39		39		270		268		309		307

(a)	These modifications generally provided interest rate concessions to the borrower or deferral of principal repayments.
(b)	Additional commitments to lend to borrowers whose loans have been modified in TDRs as of March 31, 2011, and December 31, 2010, were immaterial.
(c)	There were no student and other loans modified in TDRs at March 31, 2011, and December 31, 2010.

Purchased credit-impaired (“PCI”) loans

For a detailed discussion of PCI loans, including the related accounting policies, see Note 14 on pages 220–238 of JPMorgan Chase’s 2010 Annual Report.

Residential real estate — PCI loans

The table below sets forth information about the Firm’s consumer, excluding credit card PCI loans.

	Home equity						Prime mortgage
	March 31,			December 31,			March 31,			December 31,
(in millions, except ratios)	2011			2010			2011			2010
Carrying value(a)	$	23,973		$	24,459		$	16,725		$	17,322
Related allowance for loan losses(b)		1,583			1,583			1,766			1,766
Loan delinquency (based on unpaid principal balance)
Current and less than 30 days past due	$	24,956		$	25,783		$	12,632		$	13,035
30–149 days past due		1,193			1,348			1,285			1,468
150 or more days past due		1,248			1,181			4,238			4,425
Total loans	$	27,397		$	28,312		$	18,155		$	18,928
% of 30+ days past due to total loans		8.91	%		8.93	%		30.42	%		31.13	%
Current estimated LTV ratios (based on unpaid principal balance)(c)(d)
Greater than 125% and refreshed FICO scores:
Equal to or greater than 660	$	6,466		$	6,324		$	2,424		$	2,400
Less than 660		4,065			4,052			2,897			2,744
101% to 125% and refreshed FICO scores:
Equal to or greater than 660		5,804			6,097			3,517			3,815
Less than 660		2,584			2,701			2,904			3,011
80% to 100% and refreshed FICO scores:
Equal to or greater than 660		3,685			4,019			1,757			1,970
Less than 660		1,378			1,483			1,749			1,857
Lower than 80% and refreshed FICO scores:
Equal to or greater than 660		2,379			2,539			1,323			1,443
Less than 660		1,036			1,097			1,584			1,688
Total unpaid principal balance	$	27,397		$	28,312		$	18,155		$	18,928
Geographic region (based on unpaid principal balance)
California	$	16,466		$	17,012		$	10,405		$	10,891
New York		1,276			1,316			1,086			1,111
Texas		508			525			184			194
Florida		2,521			2,595			1,467			1,519
Illinois		607			627			550			562
Ohio		36			38			88			91
New Jersey		520			540			478			486
Michigan		91			95			262			279
Arizona		521			539			330			359
Washington		1,486			1,535			432			451
All other		3,365			3,490			2,873			2,985
Total unpaid principal balance	$	27,397		$	28,312		$	18,155		$	18,928

(a)	Carrying value includes the effect of fair value adjustments that were applied to the consumer PCI portfolio at the date of acquisition.
(b)	Management concluded as part of the Firm’s regular assessment of the PCI loan pools that it was probable that higher expected principal credit losses would result in a decrease in expected cash flows. As a result, an allowance for loan losses for impairment of these pools has been recognized.
(c)	Represents the aggregate unpaid principal balance of loans divided by the estimated current property value. Current property values are estimated, at a minimum, quarterly, based on home valuation models utilizing nationally recognized home price index valuation estimates incorporating actual data to the extent available and forecasted data where actual data is not available. These property values do not represent actual appraised loan level collateral values; as such, the resulting ratios are necessarily imprecise and should be viewed as estimates. Current estimated combined LTV for junior lien home equity loans considers all available lien positions related to the property.
(d)	Refreshed FICO scores represent each borrower’s most recent credit score obtained by the Firm. The Firm obtains refreshed FICO scores at least quarterly.

Subprime mortgage						Option ARMs						Total PCI
March 31,			December 31,			March 31,			December 31,			March 31,			December 31,
2011			2010			2011			2010			2011			2010
$	5,276		$	5,398		$	24,791		$	25,584		$	70,765		$	72,763
	98			98			1,494			1,494			4,941			4,941
$	4,352		$	4,312		$	18,317		$	18,672		$	60,257		$	61,802
	833			1,020			1,932			2,215			5,243			6,051
	2,660			2,710			9,310			9,904			17,456			18,220
$	7,845		$	8,042		$	29,559		$	30,791		$	82,956		$	86,073
	44.53	%		46.38	%		38.03	%		39.36	%		27.36	%		28.20	%
$	465		$	432		$	2,737		$	2,681		$	12,092		$	11,837
	2,174			2,129			6,315			6,330			15,451			15,255
	411			424			4,098			4,292			13,830			14,628
	1,637			1,663			4,814			5,005			11,939			12,380
	336			374			3,763			4,152			9,541			10,515
	1,380			1,477			3,396			3,551			7,903			8,368
	177			186			2,087			2,281			5,966			6,449
	1,265			1,357			2,349			2,499			6,234			6,641
$	7,845		$	8,042		$	29,559		$	30,791		$	82,956		$	86,073
$	1,889		$	1,971		$	15,430		$	16,130		$	44,190		$	46,004
	731			736			1,660			1,703			4,753			4,866
	428			435			151			155			1,271			1,309
	896			906			3,762			3,916			8,646			8,936
	432			438			753			760			2,342			2,387
	120			122			123			131			367			382
	313			316			1,039			1,064			2,350			2,406
	204			214			309			345			866			933
	154			165			482			528			1,487			1,591
	176			178			727			745			2,821			2,909
	2,502			2,561			5,123			5,314			13,863			14,350
$	7,845		$	8,042		$	29,559		$	30,791		$	82,956		$	86,073

The table below sets forth the accretable yield activity for the Firm’s PCI consumer loans for the three months ended March 31, 2011 and 2010, and represents the Firm’s estimate of gross interest income expected to be earned over the remaining life of the PCI loan portfolios. This table excludes the cost to fund the PCI portfolios, and therefore does not represent net interest income expected to be earned on these portfolios.

Three months ended March 31	Total PCI
(in millions, except ratios)	2011			2010
Balance, January 1	$	19,097		$	25,544
Accretion into interest income		(704	)		(886	)
Changes in interest rates on variable rate loans		(32	)		(394	)
Other changes in expected cash flows(a)		455			(3,693	)
Balance, March 31	$	18,816		$	20,571
Accretable yield percentage		4.29	%		4.57	%

(a) Other changes in expected cash flows may vary from period to period as the Firm continues to refine its cash flow model and periodically updates model assumptions. For the three months ended March 31, 2011, other changes in expected cash flows were principally driven by changes in prepayment assumptions. For the three months ended March 31, 2010, other changes in expected cash flows were principally driven by changes in prepayment assumptions, as well as reclassification to the nonaccretable difference. Changes to prepayment assumptions change the expected remaining life of the portfolio, which drives changes in expected future interest cash collections. Such changes do not have a significant impact on the accretable yield percentage.

The factors that most significantly affect estimates of gross cash flows expected to be collected, and accordingly the accretable yield balance, include: (i) changes in the benchmark interest rate indices for variable rate products such as option ARM and home equity loans; and (ii) changes in prepayment assumptions.

Since the date of purchase, the decrease in the accretable yield percentage has been primarily related to a decrease in interest rates on variable-rate loans and, to a lesser extent, extended loan liquidation periods. Certain events, such as extended loan liquidation periods, affect the timing of expected cash flows but not the amount of cash expected to be received (i.e., the accretable yield balance). Extended loan liquidation periods reduce the accretable yield percentage because the same accretable yield balance is recognized against a higher-than-expected loan balance over a longer-than-expected period of time.

Credit card loans

The credit card portfolio segment includes credit card loans originated and purchased by the Firm, including those acquired in the Washington Mutual transaction. Delinquency rates are the primary credit quality indicator for credit card loans. In addition to delinquency rates, the geographic distribution of the loans provides insight as to the credit quality of the portfolio based on the regional economy.

The borrower’s credit score is another general indicator of credit quality. Because the credit score tends to be a lagging indicator of credit quality, the Firm does not use credit scores as a primary indicator of credit quality. For more information on credit quality indicators, see Note 14 on pages 220–238 of JPMorgan Chase’s 2010 Annual Report. The Firm generally originates new card accounts to prime consumer borrowers. However, certain cardholders’ refreshed FICO scores may change over time, depending on the performance of the cardholder and changes in credit score technology.

The table below sets forth information about the Firm’s Credit Card loans.

	Chase, excluding						Washington Mutual
	Washington Mutual portfolio(c)						portfolio(c)						Total credit card
	March 31,			December 31,			March 31,			December 31,			March 31,			December 31,
(in millions, except ratios)	2011			2010			2011			2010			2011			2010
Loan delinquency(a)
Current and less than 30 days past due and still accruing	$	108,748		$	117,248		$	11,585		$	12,670		$	120,333		$	129,918
30–89 days past due and still accruing		1,693			2,092			350			459			2,043			2,551
90 or more days past due and still accruing		1,940			2,449			473			604			2,413			3,053
Nonaccrual loans		2			2			—			—			2			2
Total retained loans	$	112,383		$	121,791		$	12,408		$	13,733		$	124,791		$	135,524
Loan delinquency ratios
% of 30 plus days past due to total retained loans		3.23	%		3.73	%		6.63	%		7.74	%		3.57	%		4.14	%
% of 90 plus days past due to total retained loans		1.73			2.01			3.81			4.40			1.93			2.25
Credit card loans by geographic region
California	$	14,269		$	15,454		$	2,391		$	2,650		$	16,660		$	18,104
New York		8,839			9,540			933			1,032			9,772			10,572
Texas		8,700			9,217			915			1,006			9,615			10,223
Florida		6,240			6,724			1,049			1,165			7,289			7,889
Illinois		6,472			7,077			489			542			6,961			7,619
New Jersey		4,628			5,070			446			494			5,074			5,564
Ohio		4,550			5,035			362			401			4,912			5,436
Pennsylvania		4,073			4,521			383			424			4,456			4,945
Michigan		3,569			3,956			246			273			3,815			4,229
Virginia		2,802			3,020			267			295			3,069			3,315
Georgia		2,599			2,834			359			398			2,958			3,232
Washington		1,932			2,053			397			438			2,329			2,491
All other		43,710			47,290			4,171			4,615			47,881			51,905
Total retained loans	$	112,383		$	121,791		$	12,408		$	13,733		$	124,791		$	135,524
Percentage of portfolio based on carrying value with estimated refreshed FICO scores(b)
Equal to or greater than 660		80.9	%		80.6	%		58.2	%		56.4	%		78.4	%		77.9	%
Less than 660		19.1			19.4			41.8			43.6			21.6			22.1

(a)	The Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance. Under guidance issued by the Federal Financial Institutions Examination Council (“FFIEC”), credit card loans are charged off by the end of the month in which the account becomes 180 days past due or within 60 days from receiving notification about a specified event (e.g., bankruptcy of the borrower), whichever is earlier.
(b)	Refreshed FICO scores are estimated based on a statistically significant random sample of credit card accounts in the credit card portfolio for the period shown. The Firm obtains refreshed FICO scores at least quarterly.
(c)	Includes billed finance charges and fees net of an allowance for uncollectible amounts.

Credit card impaired loans

For a detailed discussion of impaired credit card loans, including credit card loan modifications, see Note 14 on pages 220—238 of JPMorgan Chase’s 2010 Annual Report.

The tables below set forth information about the Firm’s impaired credit card loans. All of these loans are considered to be impaired as they have been modified in TDRs.

	Chase, excluding
	Washington Mutual				Washington Mutual
	portfolio				portfolio				Total credit card
	March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
(in millions)	2011		2010		2011		2010		2011		2010
Impaired loans with an allowance(a)(b)
Credit card loans with modified payment terms(c)	$	6,303	$	6,685	$	1,472	$	1,570	$	7,775	$	8,255
Modified credit card loans that have reverted to pre-modification payment terms(d)		1,197		1,439		264		311		1,461		1,750
Total impaired loans	$	7,500	$	8,124	$	1,736	$	1,881	$	9,236	$	10,005
Allowance for loan losses related to impaired loans	$	3,013	$	3,175	$	806	$	894	$	3,819	$	4,069

(a)	The carrying value and the unpaid principal balance are the same for credit card impaired loans.
(b)	There were no impaired loans without an allowance.
(c)	Represents credit card loans outstanding to borrowers then enrolled in a credit card modification program.
(d)	Represents credit card loans that were modified in TDRs but that have subsequently reverted back to the loans’ pre-modification payment terms. At March 31, 2011, and December 31, 2010, of the $1.5 billion and $1.8 billion total loan amount, respectively, approximately $934 million and $1.2 billion, respectively, of loans have reverted back to the pre-modification payment terms of the loans due to noncompliance with the terms of the modified loans. A substantial portion of these loans is expected to be charged-off in accordance with the Firm’s standard charge-off policy. The remaining $527 million and $590 million at March 31, 2011, and December 31, 2010, respectively, of these loans are to borrowers who have successfully completed a short-term modification program. The Firm continues to report these loans as TDRs since the borrowers’ credit lines remain closed.

The following table presents average balances of impaired credit card loans and interest income recognized on those loans.

Three months ended March 31,	Average impaired loans				Interest income on impaired loans(a)
(in millions)	2011		2010		2011		2010
Chase, excluding Washington Mutual portfolio	$	7,709	$	8,911	$	101	$	119
Washington Mutual portfolio		1,785		1,971		29		31
Total credit card	$	9,494	$	10,882	$	130	$	150

(a) As permitted by regulatory guidance, credit card loans are generally exempt from being placed on nonaccrual status; accordingly, interest and fees related to credit card loans continue to accrue until the loan is charged off or paid in full. However, the Firm separately establishes an allowance for the estimated uncollectible portion of billed and accrued interest and fee income on credit card loans.