Annual report pursuant to Section 13 and 15(d)

Business Segment Information

v3.22.0.1
Business Segment Information
 12 Months Ended
Dec. 31, 2021
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.
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 primarily consists of ALM activities, liquidating businesses and certain expenses not otherwise allocated to a business segment. ALM activities encompass interest rate and foreign currency risk management activities for which substantially all of the results 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.
Effective October 1, 2021, a business activity previously included in the Global Markets segment is being reported as a liquidating business in All Other, consistent with a realignment
in performance reporting to senior management. While this activity was not material to Global Markets’ results of operations and historical results have not been restated, this activity’s noninterest expense of $309 million and $473 million for the three months ended September 30, 2021 and June 30, 2021 was elevated and would have been excluded from Global Markets’ results of operations for those periods under the new basis of presentation.
The table below 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 2021, 2020 and 2019, and total assets at December 31, 2021 and 2020 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) 2021 2020 2019 2021 2020 2019
Net interest income $ 43,361  $ 43,859  $ 49,486  $ 24,929  $ 24,698  $ 28,158 
Noninterest income 46,179  42,168  42,353  9,076  8,564  10,429 
Total revenue, net of interest expense 89,540  86,027  91,839  34,005  33,262  38,587 
Provision for credit losses (4,594) 11,320  3,590  (1,035) 5,765  3,772 
Noninterest expense 59,731  55,213  54,900  19,290  18,882  17,646 
Income before income taxes 34,403  19,494  33,349  15,750  8,615  17,169 
Income tax expense 2,425  1,600  5,919  3,859  2,111  4,207 
Net income $ 31,978  $ 17,894  $ 27,430  $ 11,891  $ 6,504  $ 12,962 
Period-end total assets $ 3,169,495  $ 2,819,627  $ 1,131,142  $ 988,580   
  Global Wealth & Investment Management Global Banking
  2021 2020 2019 2021 2020 2019
Net interest income $ 5,664  $ 5,468  $ 6,504  $ 8,511  $ 9,013  $ 10,675 
Noninterest income 15,084  13,116  13,034  12,364  9,974  9,808 
Total revenue, net of interest expense 20,748  18,584  19,538  20,875  18,987  20,483 
Provision for credit losses (241) 357  82  (3,201) 4,897  414 
Noninterest expense 15,258  14,160  13,825  10,632  9,342  9,011 
Income before income taxes 5,731  4,067  5,631  13,444  4,748  11,058 
Income tax expense 1,404  996  1,380  3,630  1,282  2,985 
Net income $ 4,327  $ 3,071  $ 4,251  $ 9,814  $ 3,466  $ 8,073 
Period-end total assets $ 438,275  $ 369,736  $ 638,131  $ 580,561   
  Global Markets All Other
  2021 2020 2019 2021 2020 2019
Net interest income $ 4,011  $ 4,646  $ 3,915  $ 246  $ 34  $ 234 
Noninterest income 15,244  14,119  11,699  (5,589) (3,605) (2,617)
Total revenue, net of interest expense 19,255  18,765  15,614  (5,343) (3,571) (2,383)
Provision for credit losses 65  251  (9) (182) 50  (669)
Noninterest expense 13,032  11,417  10,728  1,519  1,412  3,690 
Income (loss) before income taxes 6,158  7,097  4,895  (6,680) (5,033) (5,404)
Income tax expense (benefit) 1,601  1,845  1,395  (8,069) (4,634) (4,048)
Net income (loss) $ 4,557  $ 5,252  $ 3,500  $ 1,389  $ (399) $ (1,356)
Period-end total assets $ 747,794  $ 616,609  $ 214,153  $ 264,141   
(1)There were no material intersegment revenues
The tables below present noninterest income and the associated components for 2021, 2020 and 2019 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) 2021 2020 2019 2021 2020 2019 2021 2020 2019
Fees and commissions:
Card income
Interchange fees $ 4,560  $ 3,954  $ 3,834  $ 3,597  $ 3,027  $ 3,174  $ 43  $ 36  $ 59 
Other card income 1,658  1,702  1,963  1,575  1,646  1,910  42  42  42 
Total card income 6,218  5,656  5,797  5,172  4,673  5,084  85  78  101 
Service charges
Deposit-related fees 6,271  5,991  6,588  3,538  3,417  4,218  72  67  68 
Lending-related fees 1,233  1,150  1,086  —  —  —  —  —  — 
Total service charges 7,504  7,141  7,674  3,538  3,417  4,218  72  67  68 
Investment and brokerage services
Asset management fees 12,729  10,708  10,241  188  146  144  12,541  10,578  10,130 
Brokerage fees 3,961  3,866  3,661  132  127  149  1,771  1,692  1,740 
Total investment and brokerage services
16,690  14,574  13,902  320  273  293  14,312  12,270  11,870 
Investment banking fees
Underwriting income 5,077  4,698  2,998  —  —  —  388  391  401 
Syndication fees 1,499  861  1,184  —  —  —  —  —  — 
Financial advisory services 2,311  1,621  1,460  —  —  —  —  —  — 
Total investment banking fees 8,887  7,180  5,642  —  —  —  388  391  401 
Total fees and commissions 39,299  34,551  33,015  9,030  8,363  9,595  14,857  12,806  12,440 
Market making and similar activities 8,691  8,355  9,034  1  2  6  40  63  113 
Other income (loss) (1,811) (738) 304  45  199  828  187  247  481 
Total noninterest income $ 46,179  $ 42,168  $ 42,353  $ 9,076  $ 8,564  $ 10,429  $ 15,084  $ 13,116  $ 13,034 
Global Banking Global Markets
All Other (1)
2021 2020 2019 2021 2020 2019 2021 2020 2019
Fees and commissions:
Card income
Interchange fees $ 700  $ 499  $ 519  $ 220  $ 391  $ 81  $ —  $ 1  $ 1 
Other card income 13  14  13  —  —  (1) 28  —  (1)
Total card income 713  513  532  220  391  80  28  1  — 
Service charges
Deposit-related fees 2,508  2,298  2,121  146  177  156  7  32  25 
Lending-related fees 1,015  940  894  218  210  192  —  —  — 
Total service charges 3,523  3,238  3,015  364  387  348  7  32  25 
Investment and brokerage services
Asset management fees —  —  —  —  —  —  —  (16) (33)
Brokerage fees 104  74  34  1,979  1,973  1,738  (25) —  — 
Total investment and brokerage services
104  74  34  1,979  1,973  1,738  (25) (16) (33)
Investment banking fees
Underwriting income 2,187  2,070  1,227  2,725  2,449  1,555  (223) (212) (185)
Syndication fees 781  482  574  718  379  610  —  —  — 
Financial advisory services 2,139  1,458  1,336  173  163  123  (1) —  1 
Total investment banking fees 5,107  4,010  3,137  3,616  2,991  2,288  (224) (212) (184)
Total fees and commissions 9,447  7,835  6,718  6,179  5,742  4,454  (214) (195) (192)
Market making and similar activities 145  103  235  8,760  8,471  7,065  (255) (284) 1,615 
Other income (loss) 2,772  2,036  2,855  305  (94) 180  (5,120) (3,126) (4,040)
Total noninterest income $ 12,364  $ 9,974  $ 9,808  $ 15,244  $ 14,119  $ 11,699  $ (5,589) $ (3,605) $ (2,617)
(1)All Other includes eliminations of intercompany transactions.
Business Segment Reconciliations
(Dollars in millions) 2021 2020 2019
Segments’ total revenue, net of interest expense $ 94,883  $ 89,598  $ 94,222 
Adjustments (1):
     
Asset and liability management activities (4) 375  241 
Liquidating businesses, eliminations and other (5,339) (3,946) (2,624)
FTE basis adjustment (427) (499) (595)
Consolidated revenue, net of interest expense $ 89,113  $ 85,528  $ 91,244 
Segments’ total net income 30,589  18,293  28,786 
Adjustments, net-of-tax (1):
   
Asset and liability management activities 11  279  202 
Liquidating businesses, eliminations and other 1,378  (678) (1,558)
Consolidated net income $ 31,978  $ 17,894  $ 27,430 
December 31
2021 2020
Segments’ total assets $ 2,955,342  $ 2,555,486 
Adjustments (1):
 
Asset and liability management activities, including securities portfolio 1,363,626  1,176,071 
Elimination of segment asset allocations to match liabilities (1,216,891) (977,685)
Other 67,418  65,755 
Consolidated total assets $ 3,169,495  $ 2,819,627 
(1)Adjustments include consolidated income, expense and asset amounts not specifically allocated to individual business segments.