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
Three months ended March 31, (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	720			1,248				66			2,034			1,134			1,627				92			2,853
Gross recoveries	(112		)	(166		)		(31		)	(309		)	(138		)	(241		)		(87		)	(466		)
Net charge-offs/(recoveries)	608			1,082				35			1,725			996			1,386				5			2,387
Provision for loan losses	(37		)	582				24			569			2			636				8			646
Other	(2		)	(3		)		5			—			(3		)	2				4			3
Ending balance at March 31,	$	11,645		$	4,998			$	4,137		$	20,780		$	15,297		$	6,251			$	4,323		$	25,871

Allowance for loan losses by impairment methodology
Asset-specific^(a)	$	771		$	1,434		^(b)	$	228		$	2,433		$	760		$	2,402		^(b)	$	448		$	3,610
Formula-based	5,163			3,564				3,909			12,636			8,826			3,849				3,875			16,550
PCI	5,711			—				—			5,711			5,711			—				—			5,711
Total allowance for loan losses	$	11,645		$	4,998			$	4,137		$	20,780		$	15,297		$	6,251			$	4,323		$	25,871

Loans by impairment methodology
Asset-specific	$	14,189		$	4,287			$	1,302		$	19,778		$	10,059		$	6,524			$	2,058		$	18,641
Formula-based	217,456			117,578				309,271			644,305			230,650			117,951				281,573			630,174
PCI	58,437			—				9			58,446			64,061			—				22			64,083
Total retained loans	$	290,082		$	121,865			$	310,582		$	722,529		$	304,770		$	124,475			$	283,653		$	712,898

Impaired collateral-dependent loans
Net charge-offs	$	78		$	—			$	6		$	84		$	29		$	—			$	24		$	53
Loans measured at fair value of collateral less cost to sell	3,153			—				432			3,585			849			—				790			1,639

Allowance for lending-related commitments
Beginning balance at January 1,	$	7		$	—			$	661		$	668		$	7		$	—			$	666		$	673
Provision for lending-related commitments	—			—				48			48			(1		)	—				81			80
Other	—			—				—			—			1			—				(4		)	(3		)
Ending balance at March 31,	$	7		$	—			$	709		$	716		$	7		$	—			$	743		$	750

Allowance for lending-related commitments by impairment methodology
Asset-specific	$	—		$	—			$	82		$	82		$	—		$	—			$	187		$	187
Formula-based	7			—				627			634			7			—				556			563
Total allowance for lending-related commitments	$	7		$	—			$	709		$	716		$	7		$	—			$	743		$	750

Lending-related commitments by impairment methodology
Asset-specific	$	—		$	—			$	244		$	244		$	—		$	—			$	756		$	756
Formula-based	60,874			537,455				435,037			1,033,366			63,121			533,318				400,308			996,747
Total lending-related commitments	$	60,874		$	537,455			$	435,281		$	1,033,610		$	63,121		$	533,318			$	401,064		$	997,503


(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.