Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Intangible Assets

v2.4.0.8
Goodwill and Intangible Assets
9 Months Ended
Sep. 30, 2014
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets
NOTE 8 – Goodwill and Intangible Assets
 
Goodwill

The table below presents goodwill balances by business segment at September 30, 2014 and December 31, 2013. The reporting units utilized for goodwill impairment testing are the operating segments or one level below. For additional information, see Note 8 – Goodwill and Intangible Assets to the Consolidated Financial Statements of the Corporation's 2013 Annual Report on Form 10-K.

Goodwill
(Dollars in millions)
September 30
2014
 
December 31
2013
Consumer & Business Banking
$
31,681

 
$
31,681

Global Wealth & Investment Management
9,698

 
9,698

Global Banking
22,377

 
22,377

Global Markets
5,197

 
5,197

All Other
831

 
891

Total goodwill
$
69,784

 
$
69,844



For purposes of goodwill impairment testing, the Corporation utilizes allocated equity as a proxy for the carrying value of its reporting units. Allocated equity in the reporting units is comprised of allocated capital plus capital for the portion of goodwill and intangibles specifically assigned to the reporting unit. The goodwill impairment test involves comparing the fair value of each reporting unit with its carrying value, including goodwill, as measured by allocated equity. During the latest annual planning process, the Corporation made refinements to the amount of capital allocated to each of its businesses based on multiple considerations that included, but were not limited to, risk-weighted assets measured under the Basel 3 Standardized and Advanced approaches, business segment exposures and risk profile, and strategic plans. As a result of this process, in 2014, the Corporation adjusted the amount of capital being allocated to its business segments. This change resulted in a reduction of the unallocated capital, which is reflected in All Other, and an aggregate increase to the amount of capital being allocated to the business segments. An increase in allocated capital in the business segments generally results in a reduction of the excess of the fair value over the carrying value and a reduction to the estimated fair value as a percentage of allocated carrying value for an individual reporting unit.

There was no goodwill in Consumer Real Estate Services at September 30, 2014 and December 31, 2013.

During the three months ended September 30, 2014, the Corporation completed its annual goodwill impairment test as of June 30, 2014 for all applicable reporting units. Based on the results of the annual goodwill impairment test, the Corporation determined there was no impairment. For more information regarding annual goodwill impairment testing, see Note 8 – Goodwill and Intangible Assets to the Consolidated Financial Statements of the Corporation's 2013 Annual Report on Form 10-K.

Intangible Assets

The table below presents the gross carrying value and accumulated amortization for intangible assets at September 30, 2014 and December 31, 2013.

Intangible Assets (1, 2)
 
 
 
September 30, 2014
 
December 31, 2013
(Dollars in millions)
Gross
Carrying Value
 
Accumulated
Amortization
 
Net
Carrying Value
 
Gross
Carrying Value
 
Accumulated
Amortization
 
Net
Carrying Value
Purchased credit card relationships
$
5,543

 
$
4,479

 
$
1,064

 
$
6,160

 
$
4,849

 
$
1,311

Core deposit intangibles
1,779

 
1,350

 
429

 
3,592

 
3,055

 
537

Customer relationships
4,025

 
2,559

 
1,466

 
4,025

 
2,281

 
1,744

Affinity relationships
1,572

 
1,265

 
307

 
1,575

 
1,197

 
378

Other intangibles
2,045

 
462

 
1,583

 
2,045

 
441

 
1,604

Total intangible assets
$
14,964

 
$
10,115

 
$
4,849

 
$
17,397

 
$
11,823

 
$
5,574

(1) 
Excludes fully amortized intangible assets.
(2) 
At September 30, 2014 and December 31, 2013, none of the intangible assets were impaired.

The table below presents intangible asset amortization expense for the three and nine months ended September 30, 2014 and 2013.

Amortization Expense
 
 
 
 
 
Three Months Ended
September 30
 
Nine Months Ended
September 30
(Dollars in millions)
2014
 
2013
 
2014
 
2013
Purchased credit card and Affinity relationships
$
105

 
$
118

 
$
312

 
$
356

Core deposit intangibles
36

 
25

 
108

 
150

Customer relationships
87

 
116

 
268

 
280

Other intangibles
6

 
11

 
20

 
34

Total amortization expense
$
234

 
$
270

 
$
708

 
$
820



The table below presents estimated future intangible asset amortization expense at September 30, 2014.

Estimated Future Amortization Expense
(Dollars in millions)
Remainder of
2014
 
2015
 
2016
 
2017
 
2018
 
2019
Purchased credit card and Affinity relationships
$
104

 
$
358

 
$
299

 
$
239

 
$
180

 
$
121

Core deposit intangibles
32

 
122

 
105

 
91

 
80

 
7

Customer relationships
87

 
340

 
325

 
310

 
302

 
286

Other intangibles
5

 
16

 
9

 
6

 
3

 
1

Total estimated future amortization expense
$
228

 
$
836

 
$
738

 
$
646

 
$
565

 
$
415