US Bank 2002 Annual Report Download - page 56

2001 results were restated and presented on a Total net revenue decreased 1.2 percent in 2002,
comparable basis. compared with 2001. Net interest income, on a taxable-
The Company’s basis of financial presentation differed equivalent basis, decreased 6.7 percent, compared with
significantly in 2000 due to organizational changes in 2001, as average loans declined $6.8 billion in 2002,
connection with the Firstar/USBM merger. Therefore, the compared with 2001. The impact of declining average loans
presentation of comparative business line results for 2000 is on net interest income was offset somewhat by improving
not practical at this time. spreads and a decrease in the funding cost related to non-
earning assets. The decrease in net interest income also
Wholesale Banking offers lending, depository, treasury reflected the adverse impact of declining interest rates on
management and other financial services to middle market, the funding benefits of customer deposits, partially offset by
large corporate and public sector clients. Wholesale Banking growth in average deposits of 23.6 percent in 2002,
contributed $1,372.7 million of the Company’s net compared with 2001. Additionally, a decline in required
operating earnings in 2002 and $708.4 million in 2001. The capital for Wholesale Banking, driven by lower commercial
significant increase in operating earnings in 2002, compared loan balances and unfunded commitments, reduced the
with 2001 was primarily driven by a lower provision for related earnings credit in 2002, compared with 2001. The
credit losses. decline in commercial loans was due in part to weak
Line of Business Financial Performance
Wholesale Consumer
Banking Banking
Percent Percent
Year Ended December 31 (Dollars in Millions) 2002 2001 Change 2002 2001 Change
Condensed Income Statement
Net interest income (taxable-equivalent basis) ************************************ $1,999.0 $2,141.8 (6.7)% $3,295.7 $3,259.7 1.1%
Noninterest income************************************************************ 739.5 629.4 17.5 1,477.4 1,248.4 18.3
Total net revenue ********************************************************** 2,738.5 2,771.2 (1.2) 4,773.1 4,508.1 5.9
Noninterest expense*********************************************************** 395.9 394.5 .4 1,695.1 1,698.7 (.2)
Other intangible amortization *************************************************** 20.7 24.7 (16.2) 339.0 166.2 *
Goodwill amortization********************************************************** ——— ———
Total noninterest expense *************************************************** 416.6 419.2 (.6) 2,034.1 1,864.9 9.1
Operating income******************************************************* 2,321.9 2,352.0 (1.3) 2,739.0 2,643.2 3.6
Provision for credit losses ****************************************************** 163.9 1,238.4 (86.8) 428.6 550.9 (22.2)
Income before income taxes**************************************************** 2,158.0 1,113.6 93.8 2,310.4 2,092.3 10.4
Income taxes and taxable-equivalent adjustment********************************** 785.3 405.2 93.8 840.7 761.5 10.4
Operating earnings, before merger and restructuring-related items and cumulative effect of
change in accounting principles *********************************************** $ 1,372.7 $ 708.4 93.8 $ 1,469.7 $ 1,330.8 10.4
Merger and restructuring-related items (after-tax)************************************
Cumulative effect of change in accounting principles (after-tax) ************************
Net income
Average Balance Sheet Data
Commercial ******************************************************************* $ 31,699 $ 37,586 (15.7)% $ 7,099 $ 8,278 (14.2)%
Commercial real estate ********************************************************* 16,113 16,959 (5.0) 8,789 8,283 6.1
Residential mortgages ********************************************************** 167 157 6.4 8,001 8,229 (2.8)
Retail ************************************************************************ 136 221 (38.5) 26,928 23,924 12.6
Total loans***************************************************************** 48,115 54,923 (12.4) 50,817 48,714 4.3
Goodwill ********************************************************************** 1,331 1,384 (3.8) 1,787 1,724 3.7
Other intangible assets ********************************************************* 127 157 (19.1) 945 678 39.4
Assets *********************************************************************** 54,580 62,024 (12.0) 59,287 56,906 4.2
Noninterest-bearing deposits ***************************************************** 13,008 10,613 22.6 12,933 12,062 7.2
Savings products ************************************************************** 5,563 4,125 34.9 35,790 34,466 3.8
Time deposits ***************************************************************** 2,591 2,386 8.6 22,609 26,864 (15.8)
Total deposits ************************************************************** 21,162 17,124 23.6 71,332 73,392 (2.8)
Shareholders’ equity************************************************************ $ 5,376 $ 6,117 (12.1) $ 4,858 $ 4,848 .2
* Not meaningful
54 U.S. Bancorp
Table 22