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Goodwill and Other Intangible Assets (Tables)
6 Months Ended
Jun. 30, 2011
Goodwill and Other Intangible Assets (Tables) [Abstract] 
Goodwill and other intangible assets
(in millions)
June 30, 2011
December 31, 2010
Goodwill
$
48,882

$
48,854

Mortgage servicing rights
12,243

13,649

Other intangible assets:
 
 
Purchased credit card relationships
$
744

$
897

Other credit card-related intangibles
558

593

Core deposit intangibles
734

879

Other intangibles
1,643

1,670

Total other intangible assets
$
3,679

$
4,039

Goodwill attributed to the business segments
(in millions)
June 30, 2011
December 31, 2010
Investment Bank
$
5,250

$
5,278

Retail Financial Services
16,490

16,496

Card Services & Auto
14,581

14,522

Commercial Banking
2,864

2,866

Treasury & Securities Services
1,670

1,680

Asset Management
7,650

7,635

Corporate/Private Equity
377

377

Total goodwill
$
48,882

$
48,854

Changes in the carrying amount of goodwill
 
Three months ended June 30,
 
Six months ended June 30,
(in millions)
2011
 
2010
 
2011
 
2010
Balance at beginning of period(a)
$
48,856

 
$
48,359

 
$
48,854

 
$
48,357

Changes during the period from:
 
 
 
 
 
 
 
Business combinations
11

 
10

 
6

 
19

Dispositions
—

 
—

 
—

 
(19
)
Other(b)
15

 
(49
)
 
22

 
(37
)
Balance at June 30(a)
$
48,882

 
$
48,320

 
$
48,882

 
$
48,320

(a)
Reflects gross goodwill balances as the Firm has not recognized any impairment losses to date.
(b)
Includes foreign currency translation adjustments and other tax-related adjustments.

Mortgage servicing rights activity
 
Three months ended June 30,
 
Six months ended June 30,
(in millions, except where otherwise noted)
2011

 
2010

 
2011

 
2010

Fair value at beginning of period
$
13,093

 
$
15,531

 
$
13,649

 
$
15,531

MSR activity
 
 
 
 
 
 
 
Originations of MSRs
562

 
533

 
1,319

 
1,222

Purchase of MSRs
29

 
—

 
30

 
14

Disposition of MSRs
—

 
(5
)
 
—

 
(5
)
Total net additions
591

 
528

 
1,349

 
1,231

Change in valuation due to inputs and assumptions(a)
(960
)
 
(3,584
)
 
(1,711
)
 
(3,680
)
Other changes in fair value(b)
(481
)
 
(622
)
 
(1,044
)
 
(1,229
)
Total change in fair value of MSRs(c)
(1,441
)
 
(4,206
)
 
(2,755
)
 
(4,909
)
Fair value at June 30(d)
$
12,243

 
$
11,853

 
$
12,243

 
$
11,853

Change in unrealized gains/(losses) included in income related to MSRs held at June 30
$
(960
)
 
$
(3,584
)
 
$
(1,711
)
 
$
(3,680
)
Contractual service fees, late fees and other ancillary fees included in income
$
983

 
$
1,148

 
$
2,008

 
$
2,280

Third-party mortgage loans serviced at June 30 (in billions)
$
949

 
$
1,064

 
$
949

 
$
1,064

Servicer advances, net at June 30 (in billions)(e)
$
10.9

 
$
9.3

 
$
10.9

 
$
9.3

(a)
Represents MSR asset fair value adjustments due to changes in inputs, such as interest rates and volatility, as well as updates to assumptions used in the valuation model.
(b)
Includes changes in MSR value due to modeled servicing portfolio runoff (i.e., amortization or time decay).
(c)
Includes changes related to commercial real estate of $(2) million and $(2) million for the three months ended June 30, 2011 and 2010, respectively, and $(4) million and $(4) million for the six months ended June 30, 2011 and 2010, respectively.
(d)
Includes $36 million and $37 million related to commercial real estate at June 30, 2011 and 2010, respectively.
(e)
Represents amounts the Firm pays as the servicer (e.g., scheduled principal and interest to a trust, taxes and insurance), which will generally be reimbursed within a short period of time after the advance from future cash flows from the trust or the underlying loans. The Firm’s credit risk associated with these advances is minimal because reimbursement of the advances is senior to all cash payments to investors. In addition, the Firm maintains the right to stop payment if the collateral is insufficient to cover the advance.
RFS mortgage fees and related income
 
Three months ended June 30,
 
Six months ended June 30,
(in millions)
2011
 
2010
 
2011
 
2010
RFS mortgage fees and related income
 
 
 
 
 
 
 
Net production revenue:
 
 
 
 
 
 
 
Production revenue
$
767

 
$
676

 
$
1,446

 
$
1,109

Repurchase losses
(223
)
 
(667
)
 
(643
)
 
(1,099
)
Net production revenue
544

 
9

 
803

 
10

Net mortgage servicing revenue
 
 
 
 
 
 
 
Operating revenue:
 
 
 
 
 
 
 
Loan servicing revenue
1,011

 
1,186

 
2,063

 
2,293

Other changes in MSR asset fair value(a)
(478
)
 
(620
)
 
(1,041
)
 
(1,225
)
Total operating revenue
533

 
566

 
1,022

 
1,068

Risk management:
 
 
 
 
 
 
 
Changes in MSR asset fair value due to inputs or assumptions in model(b)
(960
)
 
(3,584
)
 
(1,711
)
 
(3,680
)
Derivative valuation adjustments and other
983

 
3,895

 
497

 
4,143

Total risk management
23

 
311

 
(1,214
)
 
463

Total RFS net mortgage servicing revenue
556

 
877

 
(192
)
 
1,531

All other
3

 
2

 
5

 
5

Mortgage fees and related income
$
1,103

 
$
888

 
$
616

 
$
1,546

(a)
Includes changes in the MSR value due to modeled servicing portfolio runoff (i.e., amortization or time decay).
(b)
Represents MSR asset fair value adjustments due to changes in inputs, such as interest rates and volatility, as well as updates to assumptions used in the MSR valuation model.

Key economic assumptions used to determine the fair value of the Firm's Mortgage Servicing Rights (MSRs)
(in millions, except rates)
June 30, 2011
 
December 31, 2010
Weighted-average prepayment speed assumption (“CPR”)
10.63
%
 
11.29
%
Impact on fair value of 10% adverse change
$
(775
)
 
$
(809
)
Impact on fair value of 20% adverse change
(1,500
)
 
(1,568
)
Weighted-average option adjusted spread
3.85
%
 
3.94
%
Impact on fair value of 100 basis points adverse change
$
(587
)
 
$
(578
)
Impact on fair value of 200 basis points adverse change
(1,125
)
 
(1,109
)
CPR: Constant prepayment rate.
Intangible assets components of credit card relationships, core deposits and other intangible assets
 
June 30, 2011
 
December 31, 2010
 
Gross amount(a)
Accumulated amortization(a)
Net
carrying value
 
Gross amount
Accumulated amortization
Net
carrying value
(in millions)
 
Purchased credit card relationships
$
3,830

$
3,086

$
744

 
$
5,789

$
4,892

$
897

Other credit card-related intangibles
861

303

558

 
907

314

593

Core deposit intangibles
4,132

3,398

734

 
4,280

3,401

879

Other intangibles
2,498

855

1,643

 
2,515

845

1,670

(a)
The decrease in the gross amount and accumulated amortization from December 31, 2010, was due to the removal of fully amortized assets.
Amortization expense related to credit card relationships, core deposits and other intangible assets
 
Three months ended June 30,
 
Six months ended June 30,
(in millions)
2011
 
2010
 
2011
 
2010
Purchased credit card relationships
$
77

 
$
97

 
$
157

 
$
194

All other intangibles:
 
 
 
 
 
 
 
Other credit card-related intangibles
27

 
26

 
53

 
52

Core deposit intangibles
72

 
83

 
144

 
166

Other intangibles
36

 
29

 
75

 
66

Total amortization expense
$
212

 
$
235

 
$
429

 
$
478

Estimated future amortization expense related to credit card relationships, core deposits and other intangible assets
For the year: (in millions)
Purchased credit card relationships
Other credit
card-related intangibles
Core deposit intangibles
Other
intangibles
Total
2011(a)
$
294

$
107

$
284

$
143

$
828

2012
254

110

240

137

741

2013
213

107

195

130

645

2014
110

105

100

114

429

2015
24

98

25

96

243

(a)
Includes $157 million, $53 million, $144 million, and $75 million of amortization expense related to purchased credit card relationships, other credit card-related intangibles, core deposit intangibles and other intangibles, respectively, recognized during the six months ended June 30, 2011.