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Goodwill and Other Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 2013
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and other intangible assets
Goodwill and other intangible assets consist of the following.
December 31, (in millions)
2013
2012
2011
Goodwill
$
48,081

$
48,175

$
48,188

Mortgage servicing rights
9,614

7,614

7,223

Other intangible assets:
 
 
 
Purchased credit card relationships
$
131

$
295

$
602

Other credit card-related intangibles
173

229

488

Core deposit intangibles
159

355

594

Other intangibles
1,155

1,356

1,523

Total other intangible assets
$
1,618

$
2,235

$
3,207
Goodwill attributed to the business segments
The following table presents goodwill attributed to the business segments.
December 31, (in millions)
2013
2012
2011
Consumer & Community Banking
$
30,985

$
31,048

$
30,996

Corporate & Investment Bank
6,888

6,895

6,944

Commercial Banking
2,862

2,863

2,864

Asset Management
6,969

6,992

7,007

Corporate/Private Equity
377

377

377

Total goodwill
$
48,081

$
48,175

$
48,188
Changes in the carrying amount of goodwill
The following table presents changes in the carrying amount of goodwill.
Year ended December 31,
(in millions)
2013
 
2012
 
2011
Balance at beginning of period(a)
$
48,175

 
$
48,188

 
$
48,854

Changes during the period from:
 
 
 
 
 

Business combinations
64

 
43

 
97

Dispositions
(5
)
 
(4
)
 
(685
)
Other(b)
(153
)
 
(52
)
 
(78
)
Balance at December 31,(a)
$
48,081

 
$
48,175

 
$
48,188

(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 years ended December 31, 2013, 2012 and 2011.
As of or for the year ended December 31, (in millions, except where otherwise noted)
2013

 
2012

 
2011

Fair value at beginning of period
$
7,614

 
$
7,223

 
$
13,649

MSR activity:
 
 
 
 
 
Originations of MSRs
2,214

 
2,376

 
2,570

Purchase of MSRs
1

 
457

 
33

Disposition of MSRs(a)
(725
)
 
(579
)
 
—

Net additions
1,490

 
2,254

 
2,603

 
 
 
 
 
 
Changes due to collection/realization of expected cash flows(b)
(1,102
)
 
(1,228
)
 
(1,910
)
 
 
 
 
 
 
Changes in valuation due to inputs and assumptions:
 
 
 
 
 
Changes due to market interest rates and other(c)
2,122

 
(589
)
 
(5,392
)
Changes in valuation due to other inputs and assumptions:
 
 
 
 
 
Projected cash flows (e.g., cost to service)(d)
109

 
(452
)
 
(1,757
)
Discount rates
(78
)
 
(98
)
 
(1,238
)
Prepayment model changes and other(e)
(541
)
 
504

 
1,268

Total changes in valuation due to other inputs and assumptions
(510
)
 
(46
)
 
(1,727
)
Total changes in valuation due to inputs and assumptions(b)
$
1,612

 
$
(635
)
 
$
(7,119
)
Fair value at December 31,(f)
$
9,614

 
$
7,614

 
$
7,223

Change in unrealized gains/(losses) included in income related to MSRs
held at December 31,
$
1,612

 
$
(635
)
 
$
(7,119
)
Contractual service fees, late fees and other ancillary fees included in income
$
3,309

 
$
3,783

 
$
3,977

Third-party mortgage loans serviced at December 31, (in billions)
$
822

 
$
867

 
$
910

Servicer advances, net of an allowance for uncollectible amounts, at December 31, (in billions)(g)
$
9.6

 
$
10.9

 
$
11.1

(a)
Predominantly represents excess mortgage servicing rights transferred to agency-sponsored trusts in exchange for stripped mortgage backed securities (“SMBS”). In each transaction, 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. Also includes sales of MSRs in 2013 and 2012.
(b)
Included changes related to commercial real estate of $(5) million, $(8) million and $(9) million for the years ended December 31, 2013, 2012 and 2011, respectively.
(c)
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.
(d)
For the year ended December 31, 2013, the increase was driven by the inclusion in the MSR valuation model of servicing fees receivable on certain delinquent loans.
(e)
Represents changes in prepayments other than those attributable to changes in market interest rates. For the year ended December 31, 2013, the decrease was driven by changes in the inputs and assumptions used to derive prepayment speeds, primarily increases in home prices.
(f)
Included $18 million, $23 million and $31 million related to commercial real estate at December 31, 2013, 2012, and 2011, respectively.
(g)
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. However, certain of these servicer advances may not be recoverable if they were not made in accordance with applicable rules and agreements.


CCB mortgage fees and related income
The following table presents the components of mortgage fees and related income (including the impact of MSR risk management activities) for the years ended December 31, 2013, 2012 and 2011.
Year ended December 31,
(in millions)
2013
 
2012
 
2011
CCB mortgage fees and related income
 
 
 
 
 
Net production revenue:
 
 
 
 
 
Production revenue
$
2,673

 
$
5,783

 
$
3,395

Repurchase losses
331

 
(272
)
 
(1,347
)
Net production revenue
3,004

 
5,511

 
2,048

Net mortgage servicing revenue
 
 
 
 
 

Operating revenue:
 
 
 
 
 

Loan servicing revenue
3,552

 
3,772

 
4,134

Changes in MSR asset fair value due to collection/realization of expected cash flows
(1,094
)
 
(1,222
)
 
(1,904
)
Total operating revenue
2,458

 
2,550

 
2,230

Risk management:
 
 
 
 
 

Changes in MSR asset fair value due to market interest rates and other(a)
2,119

 
(587
)
 
(5,390
)
Other changes in MSR asset fair value due to other inputs and assumptions in model(b)
(511
)
 
(46
)
 
(1,727
)
Change in derivative fair value and other
(1,875
)
 
1,252

 
5,553

Total risk management
(267
)
 
619

 
(1,564
)
Total CCB net mortgage servicing revenue
2,191

 
3,169

 
666

All other
10

 
7

 
7

Mortgage fees and related income
$
5,205

 
$
8,687

 
$
2,721

(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 year ended December 31, 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 (MSRs)
The table below outlines the key economic assumptions used to determine the fair value of the Firm’s MSRs at December 31, 2013 and 2012, and outlines the sensitivities of those fair values to immediate adverse changes in those assumptions, as defined below.
December 31,
(in millions, except rates)
2013
 
2012
Weighted-average prepayment speed assumption (“CPR”)
8.07
%
 
13.04
%
Impact on fair value of 10% adverse change
$
(362
)
 
$
(517
)
Impact on fair value of 20% adverse change
(705
)
 
(1,009
)
Weighted-average option adjusted spread
7.77
%
 
7.61
%
Impact on fair value of 100 basis points adverse change
$
(389
)
 
$
(306
)
Impact on fair value of 200 basis points adverse change
(750
)
 
(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.
 
2013
 
2012
 
Gross amount(a)
Accumulated amortization(a)
Net
carrying value
 
Gross amount
Accumulated amortization
Net
carrying value
December 31, (in millions)
 
Purchased credit card relationships
$
3,540

$
3,409

$
131

 
$
3,775

$
3,480

$
295

Other credit card-related intangibles
542

369

173

 
850

621

229

Core deposit intangibles
4,133

3,974

159

 
4,133

3,778

355

Other intangibles(b)
2,374

1,219

1,155

 
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.
Year ended December 31, (in millions)
2013
 
2012
 
2011
Purchased credit card relationships
$
195

 
$
309

 
$
295

Other credit card-related intangibles
58

 
265

 
106

Core deposit intangibles
196

 
239

 
285

Other intangibles
188

 
144

 
162

Total amortization expense
$
637

 
$
957

 
$
848
Schedule of finite-lived intangible assets, future amortization expense
The following table presents estimated future amortization expense related to credit card relationships, core deposits and other intangible assets at December 31, 2013.
Year ended December 31, (in millions)
Purchased credit card relationships
Other credit
card-related intangibles
Core deposit intangibles
Other
intangibles
Total
2014
$
96

$
51

$
102

$
111

$
360

2015
12

39

26

92

169

2016
9

34

14

86

143

2017
5

29

7

61

102

2018
3

20

5

52

80