| NOTE 10 | Intangible Assets |
Intangible assets consisted of the following:
| Estimated | Amortization | Balance | ||||||||||||||||
| At December 31 (Dollars in Millions) |
Life (a) |
Method (b) |
2013 | 2012 | ||||||||||||||
|
Goodwill |
(c | ) | $ | 9,205 | $ | 9,143 | ||||||||||||
|
Merchant processing contracts |
10 years/8 years | SL/AC | 229 | 281 | ||||||||||||||
|
Core deposit benefits |
22 years/5 years | SL/AC | 135 | 176 | ||||||||||||||
|
Mortgage servicing rights |
(c | ) | 2,680 | 1,700 | ||||||||||||||
|
Trust relationships |
14 years/6 years | SL/AC | 122 | 149 | ||||||||||||||
|
Other identified intangibles |
9 years/5 years | SL/AC | 363 | 400 | ||||||||||||||
|
Total |
$ | 12,734 | $ | 11,849 | ||||||||||||||
| (a) | Estimated life represents the amortization period for assets subject to the straight line method and the weighted average or life of the underlying cash flows amortization period for intangibles subject to accelerated methods. If more than one amortization method is used for a category, the estimated life for each method is calculated and reported separately. |
|
(b) Amortization methods: |
SL = straight line method | |
|
AC= accelerated methods generally based on cash flows |
| (c) | Goodwill is evaluated for impairment, but not amortized. Mortgage servicing rights are recorded at fair value, and are not amortized. |
Aggregate amortization expense consisted of the following:
| Year Ended December 31 (Dollars in Millions) | 2013 | 2012 | 2011 | |||||||||
|
Merchant processing contracts |
$ | 64 | $ | 74 | $ | 90 | ||||||
|
Core deposit benefits |
41 | 60 | 81 | |||||||||
|
Trust relationships |
34 | 39 | 35 | |||||||||
|
Other identified intangibles |
84 | 101 | 93 | |||||||||
|
Total |
$ | 223 | $ | 274 | $ | 299 | ||||||
The estimated amortization expense for the next five years is as follows:
| (Dollars in Millions) | ||||
|
2014 |
$ | 184 | ||
|
2015 |
148 | |||
|
2016 |
119 | |||
|
2017 |
98 | |||
|
2018 |
78 | |||
The following table reflects the changes in the carrying value of goodwill for the years ended December 31, 2013, 2012 and 2011:
| (Dollars in Millions) | Wholesale Banking and Commercial Real Estate |
Consumer and Small Business Banking |
Wealth Management and Securities Services |
Payment Services |
Treasury and Corporate Support |
Consolidated Company |
||||||||||||||||||
|
Balance at December 31, 2010 |
$ | 1,605 | $ | 3,535 | $ | 1,463 | $ | 2,351 | $ | – | $ | 8,954 | ||||||||||||
|
Other (a) |
– | (21 | ) | – | (6 | ) | – | (27 | ) | |||||||||||||||
|
Balance at December 31, 2011 |
$ | 1,605 | $ | 3,514 | $ | 1,463 | $ | 2,345 | $ | – | $ | 8,927 | ||||||||||||
|
Goodwill acquired |
– | – | 65 | 143 | – | 208 | ||||||||||||||||||
|
Other (a) |
– | – | – | 8 | – | 8 | ||||||||||||||||||
|
Balance at December 31, 2012 |
$ | 1,605 | $ | 3,514 | $ | 1,528 | $ | 2,496 | $ | – | $ | 9,143 | ||||||||||||
|
Goodwill acquired |
– | – | 37 | 20 | – | 57 | ||||||||||||||||||
|
Other (a) |
– | – | – | 5 | – | 5 | ||||||||||||||||||
|
Balance at December 31, 2013 |
$ | 1,605 | $ | 3,514 | $ | 1,565 | $ | 2,521 | $ | – | $ | 9,205 | ||||||||||||
| (a) | Other changes in goodwill include a reclassification from goodwill to covered loans related to an FDIC-assisted acquisition for Consumer and Small Business Banking and the effect of foreign exchange translation for Payment Services. |