Noninterest revenue

Investment banking fees

The following table presents the components of investment banking fees.



Year ended December 31, (in millions)	2016		2015		2014
Underwriting
Equity	$	1,146	$	1,408	$	1,571
Debt	3,207		3,232		3,340
Total underwriting	4,353		4,640		4,911
Advisory	2,095		2,111		1,631
Total investment banking fees	$	6,448	$	6,751	$	6,542

Underwriting fees are recognized as revenue when the Firm has rendered all services to, and is entitled to collect the fee from, the issuer, and there are no other contingencies associated with the fee. Underwriting fees are net of syndicate expense; the Firm recognizes credit arrangement and syndication fees as revenue after satisfying certain retention, timing and yield criteria. Advisory fees are recognized as revenue when the related services have been performed and the fee has been earned.

Principal transactions

Principal transactions revenue is driven by many factors, including the bid-offer spread, which is the difference between the price at which the Firm is willing to buy a financial or other instrument and the price at which the Firm is willing to sell that instrument. It also consists of the realized (as a result of closing out or termination of transactions, or interim cash payments) and unrealized (as a result of changes in valuation) gains and losses on financial and other instruments (including those accounted for under the fair value option) primarily used in client-driven market-making activities and on private equity investments. In connection with its client-driven market-making activities, the Firm transacts in debt and equity instruments, derivatives and commodities (including physical commodities inventories and financial instruments that reference commodities).

Principal transactions revenue also includes certain realized and unrealized gains and losses related to hedge accounting and specified risk-management activities, including: (a) certain derivatives designated in qualifying hedge accounting relationships (primarily fair value hedges of commodity and foreign exchange risk), (b) certain derivatives used for specific risk management purposes, primarily to mitigate credit risk, foreign exchange risk and commodity risk, and (c) other derivatives. For further information on the income statement classification of gains and losses from derivatives activities, see Note 6.

In the financial commodity markets, the Firm transacts in OTC derivatives (e.g., swaps, forwards, options) and ETD that reference a wide range of underlying commodities. In the physical commodity markets, the Firm primarily purchases and sells precious and base metals and may hold other commodities inventories under financing and other arrangements with clients.

The following table presents all realized and unrealized gains and losses recorded in principal transactions revenue. This table excludes interest income and interest expense on trading assets and liabilities, which are an integral part of the overall performance of the Firm’s client-driven market-making activities. See Note 8 for further information on interest income and interest expense. Trading revenue is presented primarily by instrument type. The Firm’s client-driven market-making businesses generally utilize a variety of instrument types in connection with their market-making and related risk-management activities; accordingly, the trading revenue presented in the table below is not representative of the total revenue of any individual line of business.



Year ended December 31, (in millions)	2016		2015		2014
Trading revenue by instrument type
Interest rate	$	2,325	$	1,933	$	1,362
Credit	2,096		1,735		1,880
Foreign exchange	2,827		2,557		1,556
Equity	2,994		2,990		2,563
Commodity	1,067		842		1,663
Total trading revenue	11,309		10,057		9,024
Private equity gains^(a)	257		351		1,507
Principal transactions	$	11,566	$	10,408	$	10,531


(a)	Includes revenue on private equity investments held in the Private Equity business within Corporate, as well as those held in other business segments.

Lending- and deposit-related fees

The following table presents the components of lending- and deposit-related fees.



Year ended December 31, (in millions)	2016		2015		2014
Lending-related fees	$	1,114	$	1,148	$	1,307
Deposit-related fees	4,660		4,546		4,494
Total lending- and deposit-related fees	$	5,774	$	5,694	$	5,801

Lending-related fees include fees earned from loan commitments, standby letters of credit, financial guarantees, and other loan-servicing activities. Deposit-related fees include fees earned in lieu of compensating balances, and fees earned from performing cash management activities and other deposit account services. Lending- and deposit-related fees in this revenue category are recognized over the period in which the related service is provided.

Asset management, administration and commissions

The following table presents Firmwide asset management, administration and commissions income:



Year ended December 31, (in millions)	2016		2015		2014
Asset management fees
Investment management fees^(a)	$	8,865	$	9,403	$	9,169
All other asset management fees^(b)	336		352		477
Total asset management fees	9,201		9,755		9,646

Total administration fees^(c)	1,915		2,015		2,179

Commissions and other fees
Brokerage commissions	2,151		2,304		2,270
All other commissions and fees	1,324		1,435		1,836
Total commissions and fees	3,475		3,739		4,106
Total asset management, administration and commissions	$	14,591	$	15,509	$	15,931


(a)	Represents fees earned from managing assets on behalf of the Firm’s clients, including investors in Firm-sponsored funds and owners of separately managed investment accounts.


(b)	Represents fees for services that are ancillary to investment management services, such as commissions earned on the sales or distribution of mutual funds to clients.


(c)	Predominantly includes fees for custody, securities lending, funds services and securities clearance.

This revenue category includes fees from investment management and related services, custody and brokerage services, insurance premiums and commissions, and fees from other products and services. These fees are recognized over the period in which the related product or service is provided. Performance-based fees, which are earned based on exceeding certain benchmarks or other performance targets, are accrued and recognized at the end of the performance period in which the target is met. The Firm has contractual arrangements with third parties to provide certain services in connection with its asset management activities. Amounts paid to third-party service providers are predominantly expensed, such that asset management fees are recorded gross of payments made to third parties.

Mortgage fees and related income

This revenue category primarily reflects CCB’s Mortgage Banking production and servicing revenue, including fees and income derived from mortgages originated with the intent to sell; mortgage sales and servicing including losses related to the repurchase of previously sold loans; the impact of risk-management activities associated with the mortgage pipeline, warehouse loans and MSRs; and revenue related to any residual interests held from mortgage securitizations. This revenue category also includes gains and losses on sales and lower of cost or fair value adjustments for mortgage loans held-for-sale, as well as changes in fair value for mortgage loans originated with the intent to sell and measured at fair value under the fair value option. Changes in the fair value of MSRs are reported in mortgage fees and related income. For a further discussion of MSRs, see Note 17. Net interest income from mortgage loans is recorded in interest income.

Card income

This revenue category includes interchange income from credit and debit cards and net fees earned from processing card transactions for merchants. Card income is recognized as earned. Costs related to rewards programs are recorded when the rewards are earned by the customer and presented as a reduction to interchange income. Annual fees and direct loan origination costs are deferred and recognized on a straight-line basis over a 12-month period.

Credit card revenue sharing agreements

The Firm has contractual agreements with numerous co-brand partners which grant the Firm exclusive rights to market to the customers or members of such partners. These partners endorse the credit card programs and provide their customer or member lists to the Firm, and they may also conduct marketing activities and provide awards under the various credit card programs. The terms of these agreements generally range from five to ten years.

The Firm typically makes incentive payments to the partners based on new account originations, sales volumes and the cost of the partners’ marketing activities and awards. Payments based on new account originations are accounted for as direct loan origination costs. Payments to partners based on sales volumes are deducted from interchange income as the related revenue is earned. Payments based on marketing efforts undertaken by the partners are expensed by the Firm as incurred and reported as noninterest expense.

Other income

Other income on the Firm’s Consolidated statements of income included the following:



Year ended December 31, (in millions)	2016		2015		2014
Operating lease income	$	2,724	$	2,081	$	1,699

Operating lease income is recognized on a straight–line basis over the lease term.