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Goodwill and Other Intangible Assets (Tables)
 9 Months Ended
Sep. 30, 2013
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and other intangible assets
Goodwill and other intangible assets consist of the following.
(in millions)
September 30, 2013
December 31, 2012
Goodwill
$
48,100

$
48,175

Mortgage servicing rights
9,490

7,614

Other intangible assets:
 
 
Purchased credit card relationships
$
176

$
295

Other credit card-related intangibles
188

229

Core deposit intangibles
206

355

Other intangibles
1,247

1,356

Total other intangible assets
$
1,817

$
2,235
Goodwill attributed to the business segments
The following table presents goodwill attributed to the business segments.
(in millions)
September 30, 2013
December 31, 2012
Consumer & Community Banking
$
31,000

$
31,048

Corporate & Investment Bank
6,882

6,895

Commercial Banking
2,862

2,863

Asset Management
6,979

6,992

Corporate/Private Equity
377

377

Total goodwill
$
48,100

$
48,175
Changes in the carrying amount of goodwill
The following table presents changes in the carrying amount of goodwill.
 
Three months ended
September 30,
 
Nine months ended
September 30,
(in millions)
2013
 
2012
 
2013
 
2012
Balance at beginning of period(a)
$
48,057

 
$
48,131

 
$
48,175

 
$
48,188

Changes during the period from:
 
 
 
 
 
 
 
Business combinations
11

 
11

 
47

 
31

Dispositions
—

 
—

 
(5
)
 
(4
)
Other(b)
32

 
36

 
(117
)
 
(37
)
Balance at Sept 30,(a)
$
48,100

 
$
48,178

 
$
48,100

 
$
48,178

(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
The following table summarizes MSR activity for the three and nine months ended September 30, 2013 and 2012.
 
As of or for the three months
ended September 30,
 
As of or for the nine months
ended September 30,
(in millions, except where otherwise noted)
2013
 
2012
 
2013
 
2012
Fair value at beginning of period
$
9,335

 
$
7,118

 
$
7,614

 
$
7,223

MSR activity:
 
 
 
 
 
 
 
Originations of MSRs
532

 
604

 
1,874

 
1,700

Purchase of MSRs
2

 
2

 
(1
)
 
5

Disposition of MSRs
—

 
(23
)
 
(418
)
(g) 
(23
)
Net additions
534

 
583

 
1,455

 
1,682

 
 
 
 
 
 
 
 
Changes due to collection/realization of expected cash flows(a)
(286
)
 
(292
)
 
(833
)
 
(973
)
 
 
 
 
 
 
 
 
Changes in valuation due to inputs and assumptions:
 
 
 
 
 
 
 
Changes due to market interest rates and other(b)
80

 
(324
)
 
1,700

 
(875
)
Changes in valuation due to other inputs and assumptions:
 
 
 
 
 
 
 
Projected cash flows (e.g., cost to service)(c)
(123
)
 
(101
)
 
167

 
(396
)
Discount rates
—

 
(98
)
 
(78
)
 
(98
)
Prepayment model changes and other(d)
(50
)
 
194

 
(535
)
 
517

Total changes in valuation due to other inputs and assumptions
(173
)
 
(5
)
 
(446
)
 
23

Total changes in valuation due to inputs and assumptions(a)
(93
)
 
(329
)
 
1,254

 
(852
)
Fair value at September 30,(e)
$
9,490

 
$
7,080

 
$
9,490

 
$
7,080

Change in unrealized gains/(losses) included in income related to MSRs
held at September 30,
$
(93
)
 
$
(329
)
 
$
1,254

 
$
(852
)
Contractual service fees, late fees and other ancillary fees included in income
$
808

 
$
914

 
$
2,512

 
$
2,896

Third-party mortgage loans serviced at September 30, (in billions)
$
838

 
$
819

 
$
838

 
$
819

Servicer advances at September 30, (in billions)(f)
$
9.4

 
$
10.0

 
$
9.4

 
$
10.0

(a)
Included changes related to commercial real estate of $(2) million and $(3) million for the three months ended September 30, 2013 and 2012, respectively, and $(4) million and $(8) million for the nine months ended September 30, 2013 and 2012, respectively.
(b)
Represents both the impact of changes in estimated future prepayments due to changes in market interest rates, and the difference between actual and expected prepayments.
(c)
For the nine months ended September 30, 2013, the increase was driven by the inclusion in the MSR valuation model of servicing fees receivable on certain delinquent loans.
(d)
Represents changes in prepayments other than those attributable to changes in market interest rates. For the nine months ended September 30, 2013, the decrease was driven by changes in the inputs and assumptions used to derive prepayment speeds, primarily increases in home prices.
(e)
Included $19 million and $23 million related to commercial real estate at September 30, 2013 and 2012, respectively.
(f)
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 typically senior to all cash payments to investors. In addition, the Firm maintains the right to stop payment to investors if the collateral is insufficient to cover the advance.
(g)
Includes excess mortgage servicing rights transferred to an agency-sponsored trust in exchange for stripped mortgage backed securities (“SMBS”). A portion of the SMBS was acquired by third parties at the transaction date; the Firm acquired and has retained the remaining balance of those SMBS as trading securities.
Fees And Commissions, Mortgage Banking And Related, Components [Table Text Block]
The following table presents the components of mortgage fees and related income (including the impact of MSR risk management activities) for the three and nine months ended September 30, 2013 and 2012.
 
Three months ended
September 30,
 
Nine months ended
September 30,
(in millions)
2013
 
2012
 
2013
 
2012
Mortgage fees and related income
 
 
 
 
 
 
 
Net production revenue:
 
 
 
 
 
 
 
Production revenue
$
311

 
$
1,582

 
$
2,370

 
$
4,376

Repurchase losses
175

 
(13
)
 
110

 
(325
)
Net production revenue
486

 
1,569

 
2,480

 
4,051

Net mortgage servicing revenue
 
 
 
 
 

 
 

Operating revenue:
 
 
 
 
 

 
 

Loan servicing revenue
817

 
946

 
2,698

 
2,989

Changes in MSR asset fair value due to collection/realization of expected cash flows
(284
)
 
(290
)
 
(827
)
 
(968
)
Total operating revenue
533

 
656

 
1,871

 
2,021

Risk management:
 
 
 
 
 

 
 

Changes in MSR asset fair value due to market interest rates and other(a)
80

 
(323
)
 
1,698

 
(872
)
Other changes in MSR asset fair value due to other inputs and assumptions in model(b)
(173
)
 
(5
)
 
(446
)
 
23

Change in derivative fair value and other
(87
)
 
479

 
(1,495
)
 
1,426

Total risk management
(180
)
 
151

 
(243
)
 
577

Net mortgage servicing revenue
353

 
807

 
1,628

 
2,598

All other
2

 
1

 
8

 
3

Mortgage fees and related income
$
841

 
$
2,377

 
$
4,116

 
$
6,652

(a)
Represents both the impact of changes in estimated future prepayments due to changes in market interest rates, and the difference between actual and expected prepayments.
(b)
Represents the aggregate impact of changes in model inputs and assumptions such as projected cash flows (e.g., cost to service), discount rates and changes in prepayments other than those attributable to changes in market interest rates (e.g., changes in prepayments due to changes in home prices). For the nine months ended September 30, 2013, the decrease was driven by changes in the inputs and assumptions used to derive prepayment speeds, primarily increases in home prices.
Key economic assumptions used to determine the fair value of the Firm's Mortgage Servicing Rights
The table below outlines the key economic assumptions used to determine the fair value of the Firm’s MSRs at September 30, 2013, and December 31, 2012, and outlines the sensitivities of those fair values to immediate adverse changes in those assumptions, as defined below.
(in millions, except rates)
September 30, 2013
 
December 31, 2012
Weighted-average prepayment speed assumption (“CPR”)
8.77
%
 
13.04
%
Impact on fair value of 10% adverse change
$
(417
)
 
$
(517
)
Impact on fair value of 20% adverse change
(810
)
 
(1,009
)
Weighted-average option adjusted spread
7.79
%
 
7.61
%
Impact on fair value of 100 basis points adverse change
$
(376
)
 
$
(306
)
Impact on fair value of 200 basis points adverse change
(725
)
 
(591
)
CPR: Constant prepayment rate.
Intangible assets components of credit card relationships, core deposits and other intangible assets
The components of credit card relationships, core deposits and other intangible assets were as follows.
 
 
September 30, 2013
 
December 31, 2012
(in millions)
 
Gross amount(a)
Accumulated amortization(a)
Net carrying value
 
Gross
amount
Accumulated amortization
Net carrying value
Purchased credit card relationships
 
$
3,540

$
3,364

$
176

 
$
3,775

$
3,480

$
295

Other credit card-related intangibles
 
543

355

188

 
850

621

229

Core deposit intangibles
 
4,133

3,927

206

 
4,133

3,778

355

Other intangibles(b)
 
2,379

1,132

1,247

 
2,390

1,034

1,356

(a)
The decrease in the gross amount and accumulated amortization from December 31, 2012, was due to the removal of fully amortized assets.
(b)
Includes intangible assets of approximately $600 million consisting primarily of asset management advisory contracts, which were determined to have an indefinite life and are not amortized.
Amortization expense related to credit card relationships, core deposits and other intangible assets
The following table presents amortization expense related to credit card relationships, core deposits and other intangible assets.
 
 
Three months ended
September 30,
 
Nine months ended
September 30,
(in millions)
 
2013
2012
 
2013
2012
Purchased credit card relationships
 
$
45

$
59

 
$
150

$
195

Other credit card-related intangibles
 
15

27

 
44

81

Core deposit intangibles
 
49

60

 
149

182

Other intangibles
 
31

36

 
101

108

Total amortization expense
 
$
140

$
182

 
$
444

$
566
Estimated future amortization expense related to credit card relationships, core deposits and other intangible assets
The following table presents estimated future amortization expense related to credit card relationships, core deposits and other intangible assets at September 30, 2013.
For the year (in millions)
Purchased credit card relationships
Other credit
card-related intangibles
Core deposit intangibles
Other
intangibles
Total
2013(a)
$
196

$
58

$
196

$
132

$
582

2014
96

51

102

116

365

2015
12

40

26

95

173

2016
9

34

14

88

145

2017
5

29

13

85

132

(a)
Includes $150 million, $44 million, $149 million and $101 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 nine months ended September 30, 2013.