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Goodwill and Other Intangible Assets (Tables)
 3 Months Ended
Mar. 31, 2012
Goodwill and Other Intangible Assets (Tables) [Abstract]  
Goodwill and other intangible assets
(in millions)
March 31, 2012
December 31, 2011
Goodwill
$
48,208

$
48,188

Mortgage servicing rights
8,039

7,223

Other intangible assets:
 
 
Purchased credit card relationships
$
535

$
602

Other credit card-related intangibles
467

488

Core deposit intangibles
533

594

Other intangibles
1,494

1,523

Total other intangible assets
$
3,029

$
3,207
Goodwill attributed to the business segments
(in millions)
March 31, 2012
December 31, 2011
Investment Bank
$
5,275

$
5,276

Retail Financial Services
16,484

16,489

Card Services & Auto
14,530

14,507

Commercial Banking
2,863

2,864

Treasury & Securities Services
1,669

1,668

Asset Management
7,010

7,007

Corporate/Private Equity
377

377

Total goodwill
$
48,208

$
48,188
Changes in the carrying amount of goodwill
Three months ended March 31,
(in millions)
2012
 
2011
Balance at beginning of period(a)
$
48,188

 
$
48,854

Changes during the period from:
 
 
 
Business combinations
10

 
(5
)
Dispositions
—

 
—

Other(b)
10

 
7

Balance at March 31,(a)
$
48,208

 
$
48,856

(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
Three months March 31,
(in millions, except where otherwise noted)
2012

 
2011

Fair value at beginning of period
$
7,223

 
$
13,649

MSR activity
 
 
 
Originations of MSRs
572

 
757

Purchase of MSRs
1

 
1

Disposition of MSRs
—

 
—

Changes due to modeled amortization
(353
)
 
(563
)
Net additions and amortization
220

 
195

Changes due to market interest rates
644

 
379

Other changes in valuation due to inputs and assumptions(a)
(48
)
 
(1,130
)
Total change in fair value of MSRs(b)
596

 
(751
)
Fair value at March 31(c)
$
8,039

 
$
13,093

Change in unrealized gains/(losses) included in income related to MSRs held at March 31
$
596

 
$
(751
)
Contractual service fees, late fees and other ancillary fees included in income
$
1,033

 
$
1,025

Third-party mortgage loans serviced at March 31 (in billions)
$
892

 
$
963

Servicer advances at March 31 (in billions)(d)
$
11.2

 
$
10.8

(a)
Represents the aggregate impact of changes in model inputs and assumptions such as costs to service, home prices, mortgage spreads, ancillary income, and assumptions used to derive prepayment speeds, as well as changes to the valuation models themselves.
(b)
Includes changes related to commercial real estate of $(2) million and $(2) million for the three months ended March 31, 2012 and 2011, respectively.
(c)
Includes $29 million and $38 million related to commercial real estate at March 31, 2012 and 2011, respectively.
(d)
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 senior to all cash payments to investors. In addition, the Firm maintains the right to stop payment if the collateral is insufficient to cover the advance.
RFS mortgage fees and related income
Three months ended March 31,
(in millions)
2012
 
2011
RFS mortgage fees and related income
 
 
 
Net production revenue:
 
 
 
Production revenue
$
1,432

 
$
679

Repurchase losses
(302
)
 
(420
)
Net production revenue
1,130

 
259

Net mortgage servicing revenue
 
 
 
Operating revenue:
 
 
 
Loan servicing revenue
1,039

 
1,052

Changes in MSR asset fair value due to modeled amortization
(351
)
 
(563
)
Total operating revenue
688

 
489

Risk management:
 
 
 
Changes in MSR asset fair value due to market interest rates
644

 
379

Other changes in MSR asset fair value due to inputs or assumptions in model(a)
(48
)
 
(1,130
)
Derivative valuation adjustments and other
(406
)
 
(486
)
Total risk management
190

 
(1,237
)
Total RFS net mortgage servicing revenue
878

 
(748
)
All other
2

 
2

Mortgage fees and related income
$
2,010

 
$
(487
)
(a)
Represents the aggregate impact of changes in model inputs and assumptions such as costs to service, home prices, mortgage spreads, ancillary income, and assumptions used to derive prepayment speeds, as well as changes to the valuation models themselves.
Key economic assumptions used to determine the fair value of the Firm's Mortgage Servicing Rights (MSRs)
(in millions, except rates)
March 31, 2012
 
December 31, 2011
Weighted-average prepayment speed assumption (“CPR”)
14.32
%
 
18.07
%
Impact on fair value of 10% adverse change
$
(581
)
 
$
(585
)
Impact on fair value of 20% adverse change
(1,114
)
 
(1,118
)
Weighted-average option adjusted spread
7.72
%
 
7.83
%
Impact on fair value of 100 basis points adverse change
$
(320
)
 
$
(269
)
Impact on fair value of 200 basis points adverse change
(616
)
 
(518
)
CPR: Constant prepayment rate.
Intangible assets components of credit card relationships, core deposits and other intangible assets
 
 
March 31, 2012
(in millions)
 
Gross amount(a)
Accumulated amortization(a)
Net
carrying value
Purchased credit card relationships
 
$
3,775

$
3,240

$
535

Other credit card-related intangibles
 
850

383

467

Core deposit intangibles
 
4,133

3,600

533

Other intangibles(b)
 
2,418

924

1,494

 
 
December 31, 2011
(in millions)
 
Gross amount
Accumulated amortization
Net
carrying value
Purchased credit card relationships
 
$
3,826

$
3,224

$
602

Other credit card-related intangibles
 
844

356

488

Core deposit intangibles
 
4,133

3,539

594

Other intangibles(b)
 
2,467

944

1,523

(a)
The decrease in the gross amount and accumulated amortization from December 31, 2011, 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
 
 
Three months ended March 31,
(in millions)
 
2012
2011
Purchased credit card relationships
 
$
69

$
80

Other credit card-related intangibles
 
27

26

Core deposit intangibles
 
61

72

Other intangibles
 
36

39

Total amortization expense
 
$
193

$
217
Estimated future amortization expense related to credit card relationships, core deposits and other intangible assets
For the year (in millions)
Purchased credit card relationships
Other credit
card-related intangibles
Core deposit intangibles
Other
intangibles
Total
2012(a)
$
253

$
108

$
240

$
147

$
748

2013
213

105

195

140

653

2014
109

103

102

122

436

2015
23

95

26

103

247

2016
4

34

14

96

148

(a)
Includes $69 million, $27 million, $61 million, and $36 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 three months ended March 31, 2012.