Annual report pursuant to Section 13 and 15(d)

Business Segment Information

v3.20.4
Business Segment Information
 12 Months Ended
Dec. 31, 2020
Segment Reporting [Abstract]  
Business Segment Information Business Segment Information
The Corporation reports its results of operations through the following four business segments: Consumer Banking, GWIM, Global Banking and Global Markets, with the remaining operations recorded in All Other.
Consumer Banking
Consumer Banking offers a diversified range of credit, banking and investment products and services to consumers and small businesses. Consumer Banking product offerings include traditional savings accounts, money market savings accounts, CDs and IRAs, checking accounts, and investment accounts and products, as well as credit and debit cards, residential mortgages and home equity loans, and direct and indirect loans to consumers and small businesses in the U.S. Consumer Banking includes the impact of servicing residential mortgages and home equity loans in the core portfolio.
Global Wealth & Investment Management
GWIM provides a high-touch client experience through a network of financial advisors focused on clients with over $250,000 in total investable assets, including tailored solutions to meet clients’ needs through a full set of investment management, brokerage, banking and retirement products. GWIM also provides comprehensive wealth management solutions targeted to high net worth and ultra high net worth clients, as well as customized solutions to meet clients’ wealth structuring, investment management, trust and banking needs, including specialty asset management services.
Global Banking
Global Banking provides a wide range of lending-related products and services, integrated working capital management and treasury solutions, and underwriting and advisory services through the Corporation’s network of offices and client relationship teams. Global Banking also provides investment banking products to clients. The economics of certain investment banking and underwriting activities are shared primarily between Global Banking and Global Markets under an internal revenue-sharing arrangement. Global Banking clients generally include middle-market companies, commercial real estate firms, not-for-profit companies, large global corporations, financial institutions, leasing clients, and mid-sized U.S.-based businesses requiring customized and integrated financial advice and solutions.
Global Markets
Global Markets offers sales and trading services and research services to institutional clients across fixed-income, credit, currency, commodity and equity businesses. Global Markets provides market-making, financing, securities clearing, settlement and custody services globally to institutional investor clients in support of their investing and trading activities. Global Markets product coverage includes securities and derivative products in both the primary and secondary markets. Global Markets also works with commercial and corporate clients to provide risk management products. As a result of market-making activities, Global Markets may be required to manage risk in a broad range of financial products. In addition, the economics of certain investment banking and underwriting activities are shared primarily between Global Markets and Global Banking under an internal revenue-sharing arrangement.
All Other
All Other consists of ALM activities, equity investments, non-core mortgage loans and servicing activities, liquidating businesses and certain expenses not otherwise allocated to business segments. ALM activities encompass certain residential mortgages, debt securities, interest rate and foreign currency risk management activities. Substantially all of the results of ALM activities are allocated to the business segments.
Basis of Presentation
The management accounting and reporting process derives segment and business results by utilizing allocation methodologies for revenue and expense. The net income derived for the businesses is dependent upon revenue and cost allocations using an activity-based costing model, funds transfer pricing, and other methodologies and assumptions management believes are appropriate to reflect the results of the business.
Total revenue, net of interest expense, includes net interest income on an FTE basis and noninterest income. The adjustment of net interest income to an FTE basis results in a corresponding increase in income tax expense. The segment results also reflect certain revenue and expense methodologies that are utilized to determine net income. The net interest income of the businesses includes the results of a funds transfer pricing process that matches assets and liabilities with similar interest rate sensitivity and maturity characteristics. In segments where the total of liabilities and equity exceeds assets, which are generally deposit-taking segments, the Corporation allocates assets to match liabilities. Net interest income of the business segments also includes an allocation of
net interest income generated by certain of the Corporation’s ALM activities.
The Corporation’s ALM activities include an overall interest rate risk management strategy that incorporates the use of various derivatives and cash instruments to manage fluctuations in earnings and capital that are caused by interest rate volatility. The Corporation’s goal is to manage interest rate sensitivity so that movements in interest rates do not significantly adversely affect earnings and capital. The results of substantially all of the Corporation’s ALM activities are allocated to the business segments and fluctuate based on the performance of the ALM activities. ALM activities include external product pricing decisions including deposit pricing
strategies, the effects of the Corporation’s internal funds transfer pricing process and the net effects of other ALM activities.
Certain expenses not directly attributable to a specific business segment are allocated to the segments. The costs of certain centralized or shared functions are allocated based on methodologies that reflect utilization.
The following table presents net income (loss) and the components thereto (with net interest income on an FTE basis for the business segments, All Other and the total Corporation) for 2020, 2019 and 2018, and total assets at December 31, 2020 and 2019 for each business segment, as well as All Other.
Results of Business Segments and All Other
At and for the year ended December 31
Total Corporation (1)
Consumer Banking
(Dollars in millions) 2020 2019 2018 2020 2019 2018
Net interest income $ 43,859  $ 49,486  $ 48,772  $ 24,698  $ 28,158  $ 27,025 
Noninterest income 42,168  42,353  42,858  8,564  10,429  10,593 
Total revenue, net of interest expense 86,027  91,839  91,630  33,262  38,587  37,618 
Provision for credit losses 11,320  3,590  3,282  5,765  3,772  3,664 
Noninterest expense 55,213  54,900  53,154  18,878  17,646  17,672 
Income before income taxes 19,494  33,349  35,194  8,619  17,169  16,282 
Income tax expense 1,600  5,919  7,047  2,112  4,207  4,150 
Net income $ 17,894  $ 27,430  $ 28,147  $ 6,507  $ 12,962  $ 12,132 
Period-end total assets $ 2,819,627  $ 2,434,079  $ 988,580  $ 804,093   
  Global Wealth & Investment Management Global Banking
  2020 2019 2018 2020 2019 2018
Net interest income $ 5,468  $ 6,504  $ 6,265  $ 9,013  $ 10,675  $ 10,993 
Noninterest income 13,116  13,034  13,188  9,974  9,808  9,008 
Total revenue, net of interest expense 18,584  19,538  19,453  18,987  20,483  20,001 
Provision for credit losses 357  82  86  4,897  414  8 
Noninterest expense 14,154  13,825  14,015  9,337  9,011  8,745 
Income before income taxes 4,073  5,631  5,352  4,753  11,058  11,248 
Income tax expense 998  1,380  1,364  1,283  2,985  2,923 
Net income $ 3,075  $ 4,251  $ 3,988  $ 3,470  $ 8,073  $ 8,325 
Period-end total assets $ 369,736  $ 299,770    $ 580,561  $ 464,032   
  Global Markets All Other
  2020 2019 2018 2020 2019 2018
Net interest income $ 4,646  $ 3,915  $ 3,857  $ 34  $ 234  $ 632 
Noninterest income 14,120  11,699  12,326  (3,606) (2,617) (2,257)
Total revenue, net of interest expense 18,766  15,614  16,183  (3,572) (2,383) (1,625)
Provision for credit losses 251  (9) —  50  (669) (476)
Noninterest expense 11,422  10,728  10,835  1,422  3,690  1,887 
Income (loss) before income taxes 7,093  4,895  5,348  (5,044) (5,404) (3,036)
Income tax expense (benefit) 1,844  1,395  1,390  (4,637) (4,048) (2,780)
Net income (loss) $ 5,249  $ 3,500  $ 3,958  $ (407) $ (1,356) $ (256)
Period-end total assets $ 616,609  $ 641,809  $ 264,141  $ 224,375   
(1)There were no material intersegment revenues.
The table below presents noninterest income and the associated components for 2020, 2019 and 2018 for each business segment, All Other and the total Corporation. For more information, see Note 2 – Net Interest Income and Noninterest Income.
Noninterest Income by Business Segment and All Other
Total Corporation Consumer Banking Global Wealth &
Investment Management
(Dollars in millions) 2020 2019 2018 2020 2019 2018 2020 2019 2018
Fees and commissions:
Card income
Interchange fees $ 3,954  $ 3,834  $ 3,866  $ 3,027  $ 3,174  $ 3,196  $ 36  $ 59  $ 81 
Other card income 1,702  1,963  1,958  1,646  1,910  1,907  42  42  46 
Total card income 5,656  5,797  5,824  4,673  5,084  5,103  78  101  127 
Service charges
Deposit-related fees 5,991  6,588  6,667  3,417  4,218  4,300  67  68  73 
Lending-related fees 1,150  1,086  1,100  —  —  —  —  —  — 
Total service charges 7,141  7,674  7,767  3,417  4,218  4,300  67  68  73 
Investment and brokerage services
Asset management fees 10,708  10,241  10,189  146  144  147  10,578  10,130  10,042 
Brokerage fees 3,866  3,661  3,971  127  149  172  1,692  1,740  1,917 
Total investment and brokerage services
14,574  13,902  14,160  273  293  319  12,270  11,870  11,959 
Investment banking fees
Underwriting income 4,698  2,998  2,722  —  —  —  391  401  335 
Syndication fees 861  1,184  1,347  —  —  —  —  —  — 
Financial advisory services 1,621  1,460  1,258  —  —  —  —  —  2 
Total investment banking fees 7,180  5,642  5,327  —  —  —  391  401  337 
Total fees and commissions 34,551  33,015  33,078  8,363  9,595  9,722  12,806  12,440  12,496 
Market making and similar activities 8,355  9,034  9,008  2  6  8  63  113  112 
Other income (loss) (738) 304  772  199  828  863  247  481  580 
Total noninterest income $ 42,168  $ 42,353  $ 42,858  $ 8,564  $ 10,429  $ 10,593  $ 13,116  $ 13,034  $ 13,188 
Global Banking Global Markets
All Other (1)
2020 2019 2018 2020 2019 2018 2020 2019 2018
Fees and commissions:
Card income
Interchange fees $ 499  $ 519  $ 503  $ 391  $ 81  $ 86  $ 1  $ 1  $ — 
Other card income 14  13  8  —  (1) (2) —  (1) (1)
Total card income 513  532  511  391  80  84  1  —  (1)
Service charges
Deposit-related fees 2,298  2,121  2,111  177  156  161  32  25  22 
Lending-related fees 940  894  916  210  192  184  —  —  — 
Total service charges 3,238  3,015  3,027  387  348  345  32  25  22 
Investment and brokerage services
Asset management fees —  —  —  —  —  —  (16) (33) — 
Brokerage fees 74  34  94  1,973  1,738  1,780  —  —  8 
Total investment and brokerage services
74  34  94  1,973  1,738  1,780  (16) (33) 8 
Investment banking fees
Underwriting income 2,070  1,227  1,090  2,449  1,555  1,495  (212) (185) (198)
Syndication fees 482  574  648  379  610  698  —  —  1 
Financial advisory services 1,458  1,336  1,153  163  123  103  —  1  — 
Total investment banking fees 4,010  3,137  2,891  2,991  2,288  2,296  (212) (184) (197)
Total fees and commissions 7,835  6,718  6,523  5,742  4,454  4,505  (195) (192) (168)
Market making and similar activities 103  235  260  8,471  7,065  7,260  (284) 1,615  1,368 
Other income (loss) 2,036  2,855  2,225  (93) 180  561  (3,127) (4,040) (3,457)
Total noninterest income $ 9,974  $ 9,808  $ 9,008  $ 14,120  $ 11,699  $ 12,326  $ (3,606) $ (2,617) $ (2,257)
(1)All Other includes eliminations of intercompany transactions.
Business Segment Reconciliations
(Dollars in millions) 2020 2019 2018
Segments’ total revenue, net of interest expense $ 89,599  $ 94,222  $ 93,255 
Adjustments (1):
     
ALM activities 375  241  (325)
Liquidating businesses, eliminations and other (3,947) (2,624) (1,300)
FTE basis adjustment (499) (595) (610)
Consolidated revenue, net of interest expense $ 85,528  $ 91,244  $ 91,020 
Segments’ total net income 18,301  28,786  28,403 
Adjustments, net-of-tax (1):
   
ALM activities 279  202  (222)
Liquidating businesses, eliminations and other (686) (1,558) (34)
Consolidated net income $ 17,894  $ 27,430  $ 28,147 
December 31
2020 2019
Segments’ total assets $ 2,555,486  $ 2,209,704 
Adjustments (1):
   
ALM activities, including securities portfolio 1,176,071  721,806 
Elimination of segment asset allocations to match liabilities (977,685) (565,378)
Other 65,755  67,947 
Consolidated total assets $ 2,819,627  $ 2,434,079 
(1)Adjustments include consolidated income, expense and asset amounts not specifically allocated to individual business segments.