US Bank 2001 Annual Report Download - page 26

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taxes, refer to Note 19 of the Notes to Consolidated The Company's loan portfolio inherently has credit
Financial Statements. risk, which may ultimately result in loan charge-oÅs. The
Company manages this risk through stringent, centralized
BALANCE SHEET ANALYSIS credit policies and review procedures, as well as
diversiÑcation along geographic and customer lines. Refer to
Average earning assets were $145.2 billion in 2001
""Corporate Risk ProÑle'' on pages 29 through 36, for a
compared with $140.6 billion in 2000. The increase of
more detailed discussion of the management of credit risk
$4.6 billion (3.2 percent) was primarily driven by increases
including the allowance for credit losses.
in the investment portfolio, core retail loan growth, and the
impact of acquisitions. This growth was partially oÅset by a Commercial Commercial loans, including lease Ñnancing,
$2.7 billion decline in lower margin residential mortgages totaled $46.3 billion at December 31, 2001, down
and a $2.2 billion reduction related to transfers of short- $6.5 billion (12.3 percent) from year-end 2000. The
term, high credit quality, low margin commercial loans to decline in commercial loans reÖected tighter credit
the loan conduit. The increase was funded with an increase underwriting throughout 2001, slower economic growth,
in average interest-bearing liabilities of $3.4 billion the Company's transfer of approximately $3.7 billion of
consisting principally of more favorably priced long-term short-term, high credit quality, low margin commercial
wholesale funds and an increase in net free funds of loans into the loan conduit and the transfer of $680 million
$1.2 billion including an increase in average noninterest- in unsecured small business product to loans held for sale.
bearing deposits of $1.3 billion. This was oÅset somewhat by core growth in equipment
For average balance information, refer to Consolidated lease Ñnancing and bank acquisitions. Average commercial
Daily Average Balance Sheet and Related Yields and Rates loans in 2001 were Öat compared with 2000. On a core
on pages 86 and 87. basis (without loan conduit activities and transfers to loans
held for sale), average commercial loans increased by 2.1
Loans The Company's loan portfolio decreased $8.0 billion
percent from a year ago.
to $114.4 billion at December 31, 2001, from $122.4 billion
The Company oÅers a broad array of traditional
at December 31, 2000. The change in loans outstanding was
commercial lending products and specialized products such
impacted by several management actions, including the sale
as asset-based lending, lease Ñnancing, agricultural credit
of high LTV home equity and indirect automobile
and correspondent banking. The Company monitors and
portfolios, the transfer of a discontinued unsecured small
manages the portfolio diversiÑcation by industry, customer
business product to loans held for sale, branch divestitures
and geography. The commercial portfolio reÖects the
required by the merger of Firstar and USBM, and transfers
Company's focus of serving small business customers,
of short-term, high credit quality, low margin commercial
middle market and larger corporate businesses throughout
loans to the loan conduit. In addition, the Company
its 24 state banking region and national customers within
continued its business strategy to reduce the lower margin
certain niche industry groups.
residential mortgage portfolio. Average total loans
Table 9 provides a summary of the signiÑcant industry
decreased less than one percent to $118.2 billion in 2001
groups and geographic locations of commercial loans
compared with $118.3 billion in 2000. Excluding residential
outstanding at December 31, 2001 and 2000. The
mortgages, average loans for 2001 were $2.6 billion
commercial loan portfolio is diversiÑed among various
(2.4 percent) higher than 2000. Average loans on a core
industries with somewhat higher concentrations in
basis (excluding loan conduit activities, transfer of loans to
consumer products and services, capital goods (including
held for sale and residential mortgages) increased by $4.6
manufacturing and commercial construction-related
billion (4.3 percent) relative to the prior year.
Selected Loan Maturity Distribution
Over One
One Year Through Over Five
At December 31, 2001 (Dollars in Millions) or Less Five Years Years Total
CommercialÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $25,761 $17,896 $ 2,673 $ 46,330
Commercial real estate ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7,256 12,238 5,879 25,373
Residential mortgages ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 495 954 4,297 5,746
Retail ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 13,452 13,417 10,087 36,956
Total loans ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $46,964 $44,505 $22,936 $114,405
Total of loans due after one year with
Predetermined interest rates ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 37,420
Floating interest rates ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 30,021
U.S. Bancorp
Table 8
24