Revenue from Contracts with Customers

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

Note 18: Revenue from Contracts with Customers 

Our revenue includes net interest income on financial instruments and noninterest income. Table 18.1 presents our revenue by operating segment. The “Other” segment for each of the tables below includes the elimination of certain items that are included in more than one business segment, substantially all of which represents products and services for WIM customers served through Community Banking distribution channels. For additional description of our operating segments, including

additional financial information and the underlying management accounting process, see Note 22 (Operating Segments).

We adopted ASU 2014-09 – Revenue from Contracts with Customers on a modified retrospective basis as of January 1, 2018. For details on the impact of the adoption of this ASU, see Note 1 (Summary of Significant Accounting Policies) in our 2018 Form 10-K.

Table 18.1: Revenue by Operating Segment

	Quarter ended June 30,
	Community Banking					Wholesale Banking				Wealth and Investment Management				Other				Consolidated Company
(in millions)	2019			2018		2019		2018		2019		2018		2019		2018		2019	2018
Net interest income (1)	$	7,066		7,346		4,535		4,693		1,037		1,111		(543	)	(609	)	12,095	12,541
Noninterest income:
Service charges on deposit accounts	704			632		502		530		4		5		(4	)	(4	)	1,206	1,163
Trust and investment fees:
Brokerage advisory, commissions and other fees	480			465		74		78		2,248		2,284		(484	)	(473	)	2,318	2,354
Trust and investment management	199			220		117		110		687		731		(208	)	(226	)	795	835
Investment banking	(18		)	—		475		485		(1	)	1		(1	)	—		455	486
Total trust and investment fees	661			685		666		673		2,934		3,016		(693	)	(699	)	3,568	3,675
Card fees	929			904		95		96		2		2		(1	)	(1	)	1,025	1,001
Other fees:
Lending related charges and fees (1)(2)	65			69		284		307		2		2		(2	)	(2	)	349	376
Cash network fees	117			118		—		2		—		—		—		—		117	120
Commercial real estate brokerage commissions	—			—		105		109		—		—		—		—		105	109
Wire transfer and other remittance fees	71			67		49		53		2		2		(1	)	(1	)	121	121
All other fees(1)	82			94		26		25		—		1		—		—		108	120
Total other fees	335			348		464		496		4		5		(3	)	(3	)	800	846
Mortgage banking (1)	655			695		104		75		(3	)	(2	)	2		2		758	770
Insurance (1)	11			16		75		78		17		18		(10	)	(10	)	93	102
Net gains (losses) from trading activities (1)	(11		)	24		226		154		13		13		1		—		229	191
Net gains (losses) on debt securities (1)	15			(2	)	5		42		—		1		—		—		20	41
Net gains from equity securities (1)	471			409		116		89		35		(203	)	—		—		622	295
Lease income (1)	—			—		424		443		—		—		—		—		424	443
Other income of the segment (1)	969			749		(147	)	(172	)	7		(15	)	(85	)	(77	)	744	485
Total noninterest income	4,739			4,460		2,530		2,504		3,013		2,840		(793	)	(792	)	9,489	9,012
Revenue	$	11,805		11,806		7,065		7,197		4,050		3,951		(1,336	)	(1,401	)	21,584	21,553
	Six months ended June 30,
	Community Banking					Wholesale Banking				Wealth and Investment Management				Other				Consolidated Company
(in millions)	2019			2018		2019		2018		2019		2018		2019		2018		2019	2018
Net interest income (1)	$	14,314		14,541		9,069		9,225		2,138		2,223		(1,115	)	(1,210	)	24,406	24,779
Noninterest income:
Service charges on deposit accounts	1,314			1,271		985		1,064		8		9		(7	)	(8	)	2,300	2,336
Trust and investment fees:
Brokerage advisory, commissions and other fees	929			943		152		145		4,372		4,628		(942	)	(959	)	4,511	4,757
Trust and investment management	409			453		231		223		1,363		1,474		(422	)	(465	)	1,581	1,685
Investment banking	(38		)	(10	)	887		925		4		1		(4	)	—		849	916
Total trust and investment fees	1,300			1,386		1,270		1,293		5,739		6,103		(1,368	)	(1,424	)	6,941	7,358
Card fees	1,787			1,725		181		183		3		3		(2	)	(2	)	1,969	1,909
Other fees:
Lending related charges and fees (1)(2)	130			145		566		611		4		4		(4	)	(4	)	696	756
Cash network fees	226			243		—		3		—		—		—		—		226	246
Commercial real estate brokerage commissions	—			—		186		194		—		—		—		—		186	194
Wire transfer and other remittance fees	135			130		97		105		4		4		(2	)	(2	)	234	237
All other fees (1)	176			157		52		55		—		1		—		—		228	213
Total other fees	667			675		901		968		8		9		(6	)	(6	)	1,570	1,646
Mortgage banking (1)	1,296			1,537		172		168		(6	)	(5	)	4		4		1,466	1,704
Insurance (1)	22			44		153		157		34		36		(20	)	(21	)	189	216
Net gains (losses) from trading activities (1)	(6		)	23		559		379		32		32		1		—		586	434
Net gains on debt securities (1)	52			(2	)	93		43		—		1		—		—		145	42
Net gains from equity securities (1)	1,072			1,093		193		182		171		(197	)	—		—		1,436	1,078
Lease income (1)	—			—		867		898		—		—		—		—		867	898
Other income of the segment (1)	1,737			1,343		(267	)	(84	)	2		(21	)	(154	)	(151	)	1,318	1,087
Total noninterest income	9,241			9,095		5,107		5,251		5,991		5,970		(1,552	)	(1,608	)	18,787	18,708
Revenue	$	23,555		23,636		14,176		14,476		8,129		8,193		(2,667	)	(2,818	)	43,193	43,487

(1) Most of our revenue is not within the scope of Accounting Standards Update (ASU) 2014-09 – Revenue from Contracts with Customers, and additional details are included in other footnotes to our financial statements. The scope explicitly excludes net interest income as well as many other revenues for financial assets and liabilities, including loans, leases, securities, and derivatives.

(2) Represents combined amount of previously reported “Charges and fees on loans” and “Letters of credit fees.”

We provide services to customers which have related performance obligations that we complete to recognize revenue. Our revenues are generally recognized either immediately upon the completion of our service or over time as we perform services. Any services performed over time generally require that we render services each period and therefore we measure our progress in completing these services based upon the passage of time.

SERVICE CHARGES ON DEPOSIT ACCOUNTS are earned on depository accounts for commercial and consumer customers and

include fees for account and overdraft services. Account charges include fees for periodic account maintenance activities and event-driven services such as stop payment fees. Our obligation for event-driven services is satisfied at the time of the event when the service is delivered, while our obligation for maintenance services is satisfied over the course of each month. Our obligation for overdraft services is satisfied at the time of the overdraft.

Table 18.2 presents our service charges on deposit accounts by operating segment.

Table 18.2: Service Charges on Deposit Accounts by Operating Segment

	Quarter ended June 30,
	Community Banking			Wholesale Banking		Wealth and Investment Management		Other				Consolidated Company
(in millions)	2019		2018	2019	2018	2019	2018	2019		2018		2019	2018
Overdraft fees	$	496	416	1	1	1	1	—		—		498	418
Account charges	208		216	501	529	3	4	(4	)	(4	)	708	745
Service charges on deposit accounts	$	704	632	502	530	4	5	(4	)	(4	)	1,206	1,163
	Six months ended June 30,
	Community Banking			Wholesale Banking		Wealth and Investment Management		Other				Consolidated Company
(in millions)	2019		2018	2019	2018	2019	2018	2019		2018		2019	2018
Overdraft fees	$	913	828	2	3	1	1	—		—		916	832
Account charges	401		443	983	1,061	7	8	(7	)	(8	)	1,384	1,504
Service charges on deposit accounts	$	1,314	1,271	985	1,064	8	9	(7	)	(8	)	2,300	2,336

BROKERAGE ADVISORY, COMMISSIONS AND OTHER FEES are earned for providing full-service and discount brokerage services predominantly to retail brokerage clients. These revenues include fees earned on asset-based and transactional accounts and other brokerage advisory services.

Asset-based revenues are charged based on the market value of the client’s assets. The services and related obligations associated with certain of these revenues, which include investment advice, active management of client assets, or assistance with selecting and engaging a third-party advisory manager, are generally satisfied over a month or quarter. The remaining revenues include trailing commissions which are earned for selling shares to investors. Our obligation associated with earning trailing commissions is satisfied at the time shares are sold. However, these fees are received and recognized over time during the period the customer owns the shares and we remain the broker of record. The amount of trailing commissions is variable based on the length of time the customer holds the shares and on changes in the value of the underlying assets.

Transactional revenues are earned for executing transactions at the client’s direction. Our obligation is generally satisfied upon the execution of the transaction and the fees are based on the size and number of transactions executed.

Other revenues earned from other brokerage advisory services include omnibus and networking fees received from mutual fund companies in return for providing record keeping and other administrative services, and annual account maintenance fees charged to customers.

Table 18.3 presents our brokerage advisory, commissions and other fees by operating segment.

Table 18.3: Brokerage Advisory, Commissions and Other Fees by Operating Segment

	Quarter ended June 30,
	Community Banking			Wholesale Banking		Wealth and Investment Management		Other				Consolidated Company
(in millions)	2019		2018	2019	2018	2019	2018	2019		2018		2019	2018
Asset-based revenue (1)	$	369	365	—	—	1,698	1,722	(369	)	(365	)	1,698	1,722
Transactional revenue	94		83	10	16	390	400	(98	)	(92	)	396	407
Other revenue	17		17	64	62	160	162	(17	)	(16	)	224	225
Brokerage advisory, commissions and other fees	$	480	465	74	78	2,248	2,284	(484	)	(473	)	2,318	2,354
	Six months ended June 30,
	Community Banking			Wholesale Banking		Wealth and Investment Management		Other				Consolidated Company
(in millions)	2019		2018	2019	2018	2019	2018	2019		2018		2019	2018
Asset-based revenue (1)	$	712	736	—	—	3,278	3,465	(712	)	(736	)	3,278	3,465
Transactional revenue	183		176	26	28	777	839	(196	)	(192	)	790	851
Other revenue	34		31	126	117	317	324	(34	)	(31	)	443	441
Brokerage advisory, commissions and other fees	$	929	943	152	145	4,372	4,628	(942	)	(959	)	4,511	4,757

(1) We earned trailing commissions of $289 million and $569 million for the second quarter and first half of 2019, respectively, and $321 million and $652 million for the second quarter and first half of 2018, respectively.

TRUST AND INVESTMENT MANAGEMENT FEES are earned for providing trust, investment management and other related services.

Investment management services include managing and administering assets, including mutual funds, and institutional separate accounts. Fees for these services are generally determined based on a tiered scale relative to the market value of assets under management (AUM). In addition to AUM, we have client assets under administration (AUA) that earn various administrative fees which are generally based on the extent of the services provided to administer the account. Services with AUM

and AUA-based fees are generally performed over time.

Trust services include acting as a trustee or agent for corporate trust, personal trust, and agency assets. Obligations for trust services are generally satisfied over time, while obligations for activities that are transactional in nature are satisfied at the time of the transaction.

Other related services include the custody and safekeeping of accounts. Our obligation for these services is generally satisfied over time.

Table 18.4 presents our trust and investment management fees by operating segment.

Table 18.4: Trust and Investment Management Fees by Operating Segment

	Quarter ended June 30,
	Community Banking					Wholesale Banking		Wealth and Investment Management		Other				Consolidated Company
(in millions)	2019			2018		2019	2018	2019	2018	2019		2018		2019	2018
Investment management fees	$	(1	)	—		—	—	501	531	—		—		500	531
Trust fees	200			232		83	82	175	185	(208	)	(226	)	250	273
Other revenue	—			(12	)	34	28	11	15	—		—		45	31
Trust and investment management fees	$	199		220		117	110	687	731	(208	)	(226	)	795	835
	Six months ended June 30,
	Community Banking					Wholesale Banking		Wealth and Investment Management		Other				Consolidated Company
(in millions)	2019			2018		2019	2018	2019	2018	2019		2018		2019	2018
Investment management fees	$	—		—		—	—	978	1,065	—		—		978	1,065
Trust fees	409			453		165	168	343	373	(422	)	(465	)	495	529
Other revenue	—			—		66	55	42	36	—		—		108	91
Trust and investment management fees	$	409		453		231	223	1,363	1,474	(422	)	(465	)	1,581	1,685

INVESTMENT BANKING FEES are earned for underwriting debt and equity securities, arranging loan syndications and performing other advisory services. Our obligation for these services is generally satisfied at closing of the transaction. Substantially all of these fees are in the Wholesale Banking operating segment.

CARD FEES include credit and debit card interchange and network revenues and various card-related fees. Credit and debit card interchange and network revenues are earned on credit and debit card transactions conducted through payment networks such as Visa, MasterCard, and American Express. Our obligation is satisfied concurrently with the delivery of services on a daily basis.

Table 18.5 presents our card fees by operating segment.

Table 18.5: Card Fees by Operating Segment

	Quarter ended June 30,
	Community Banking			Wholesale Banking		Wealth and Investment Management		Other				Consolidated Company
(in millions)	2019		2018	2019	2018	2019	2018	2019		2018		2019	2018
Credit card interchange and network revenues (1)	$	209	211	95	96	2	2	(1	)	(1	)	305	308
Debit card interchange and network revenues	546		525	—	—	—	—	—		—		546	525
Late fees, cash advance fees, balance transfer fees, and annual fees	174		168	—	—	—	—	—		—		174	168
Card fees (1)	$	929	904	95	96	2	2	(1	)	(1	)	1,025	1,001
	Six months ended June 30,
	Community Banking			Wholesale Banking		Wealth and Investment Management		Other				Consolidated Company
(in millions)	2019		2018	2019	2018	2019	2018	2019		2018		2019	2018
Credit card interchange and network revenues (1)	$	398	382	181	183	3	3	(2	)	(2	)	580	566
Debit card interchange and network revenues	1,053		1,004	—	—	—	—	—		—		1,053	1,004
Late fees, cash advance fees, balance transfer fees, and annual fees	336		339	—	—	—	—	—		—		336	339
Card fees (1)	$	1,787	1,725	181	183	3	3	(2	)	(2	)	1,969	1,909

(1) The cost of credit card rewards and rebates of $375 million and $729 million for the second quarter and first half of 2019, respectively, and $335 million and $678 million for the second quarter and first half of 2018, respectively, are presented net against the related revenues.

CASH NETWORK FEES are earned for processing ATM transactions. Our obligation is completed daily upon settlement of ATM transactions. All of these fees are in the Community Banking operating segment.

COMMERCIAL REAL ESTATE BROKERAGE COMMISSIONS are earned for assisting customers in the sale of real estate property. Our obligation is satisfied upon the successful brokering of a transaction. Fees are based on a fixed percentage of the sales price. All of these fees are in the Wholesale Banking operating segment.

WIRE TRANSFER AND OTHER REMITTANCE FEES consist of fees earned for funds transfer services and issuing cashier’s checks and money orders. Our obligation is satisfied at the time of the funds transfer services or upon issuance of the cashier’s check or money order. Substantially all of these fees are in the Community Banking and Wholesale Banking operating segments.

ALL OTHER FEES include various types of fees earned on services to customers which have related performance obligations that we complete to recognize revenue. A majority portion of the revenue is earned from providing business payroll services and merchant services, which are generally recognized over time as we perform the services. Most of these fees are in the Community Banking operating segment.