XML 89 R59.htm IDEA: XBRL DOCUMENT v3.3.1.900
Goodwill and Other Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill attributed to the business segments
The following table presents goodwill attributed to the business segments.
December 31, (in millions)
2015
2014
2013
Consumer & Community Banking
$
30,769

$
30,941

$
30,985

Corporate & Investment Bank
6,772

6,780

6,888

Commercial Banking
2,861

2,861

2,862

Asset Management
6,923

6,964

6,969

Corporate
—

101

377

Total goodwill
$
47,325

$
47,647

$
48,081


The following table presents changes in the carrying amount of goodwill.
Year ended December 31,
(in millions)
2015
 
2014
 
2013
Balance at beginning of period
$
47,647

 
$
48,081

 
$
48,175

Changes during the period from:
 
 
 
 
 
Business combinations
28

 
43

 
64

Dispositions
(160
)
(b)
(80
)
 
(5
)
Other(a)
(190
)
 
(397
)
 
(153
)
Balance at December 31,
$
47,325

 
$
47,647

 
$
48,081

(a)
Includes foreign currency translation adjustments, other tax-related adjustments, and, during 2014, goodwill impairment associated with the Firm’s Private Equity business of $276 million.
(b)
Includes $101 million of Private Equity goodwill, which was disposed of as part of the Private Equity sale completed in January 2015.
Mortgage servicing rights activity
The following table summarizes MSR activity for the years ended December 31, 2015, 2014 and 2013.
As of or for the year ended December 31, (in millions, except where otherwise noted)
2015

 
2014

 
2013

Fair value at beginning of period
$
7,436

 
$
9,614

 
$
7,614

MSR activity:
 
 
 
 
 
Originations of MSRs
550

 
757

 
2,214

Purchase of MSRs
435

 
11

 
1

Disposition of MSRs(a)
(486
)
 
(209
)
 
(725
)
Net additions
499

 
559

 
1,490

 
 
 
 
 
 
Changes due to collection/realization of expected cash flows
(922
)
 
(911
)
 
(1,102
)
 
 
 
 
 
 
Changes in valuation due to inputs and assumptions:
 
 
 
 
 
Changes due to market interest rates and other(b)
(160
)
 
(1,608
)
 
2,122

Changes in valuation due to other inputs and assumptions:
 
 
 
 
 
Projected cash flows (e.g., cost to service)
(112
)
 
133

 
109

Discount rates
(10
)
 
(459
)
(e) 
(78
)
Prepayment model changes and other(c)
(123
)
 
108

 
(541
)
Total changes in valuation due to other inputs and assumptions
(245
)
 
(218
)
 
(510
)
Total changes in valuation due to inputs and assumptions
$
(405
)
 
$
(1,826
)
 
$
1,612

Fair value at December 31,
$
6,608

 
$
7,436

 
$
9,614

Change in unrealized gains/(losses) included in income related to MSRs
held at December 31,
$
(405
)
 
$
(1,826
)
 
$
1,612

Contractual service fees, late fees and other ancillary fees included in income
$
2,533

 
$
2,884

 
$
3,309

Third-party mortgage loans serviced at December 31, (in billions)
$
677

 
$
756

 
$
822

Servicer advances, net of an allowance
  for uncollectible amounts, at December 31, (in billions)(d)
$
6.5

 
$
8.5

 
$
9.6

(a)
For 2014 and 2013, predominantly represents excess MSRs 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.
(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)
Represents changes in prepayments other than those attributable to changes in market interest rates.
(d)
Represents amounts the Firm pays as the servicer (e.g., scheduled principal and interest, 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 servicer 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.
(e)
For the year ending December 31, 2014, the negative impact was primarily related to higher capital allocated to the Mortgage Servicing business, which, in turn, resulted in an increase in the OAS. The resulting OAS assumption was consistent with capital and return requirements the Firm believed a market participant would consider, taking into account factors such as the operating risk environment and regulatory and economic capital requirements.
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, 2015, 2014 and 2013.
Year ended December 31,
(in millions)
2015
 
2014
 
2013
CCB mortgage fees and related income
 
 
 
 
 
Net production revenue
$
769

 
$
1,190

 
$
3,004

 
 
 
 
 
 
Net mortgage servicing revenue:
 
 
 
 
 

Operating revenue:
 
 
 
 
 

Loan servicing revenue
2,776

 
3,303

 
3,552

Changes in MSR asset fair value due to collection/realization of expected cash flows
(917
)
 
(905
)
 
(1,094
)
Total operating revenue
1,859

 
2,398

 
2,458

Risk management:
 
 
 
 
 

Changes in MSR asset fair value
  due to market interest rates and other(a)
(160
)
 
(1,606
)
 
2,119

Other changes in MSR asset fair value due to other inputs and assumptions in model(b)
(245
)
 
(218
)
 
(511
)
Change in derivative fair value and other
288

 
1,796

 
(1,875
)
Total risk management
(117
)
 
(28
)
 
(267
)
Total net mortgage servicing revenue
1,742

 
2,370

 
2,191

 
 
 
 
 
 
Total CCB mortgage fees and related income
2,511

 
3,560

 
5,195

 
 
 
 
 
 
All other
2

 
3

 
10

Mortgage fees and related income
$
2,513

 
$
3,563

 
$
5,205

(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).
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, 2015 and 2014, and outlines the sensitivities of those fair values to immediate adverse changes in those assumptions, as defined below.
December 31,
(in millions, except rates)
2015
 
2014
Weighted-average prepayment speed assumption (“CPR”)
9.81
%
 
9.80
%
Impact on fair value of 10% adverse change
$
(275
)
 
$
(337
)
Impact on fair value of 20% adverse change
(529
)
 
(652
)
Weighted-average option adjusted spread
9.02
%
 
9.43
%
Impact on fair value of 100 basis points adverse change
$
(258
)
 
$
(300
)
Impact on fair value of 200 basis points adverse change
(498
)
 
(578
)
CPR: Constant prepayment rate.