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NONPERFORMING ASSETS (a)
At December 31, (Dollars in Millions) 2005 2004 2003 2002 2001
Commercial
Commercial ************************************************* $231 $289 $ 624 $ 760 $ 526
Lease financing********************************************** 42 91 113 167 181
Total commercial ***************************************** 273 380 737 927 707
Commercial real estate
Commercial mortgages *************************************** 134 175 178 175 131
Construction and development ******************************** 23 25 40 57 36
Total commercial real estate******************************** 157 200 218 232 167
Residential mortgages ************************************** 48 43 40 52 79
Retail
Credit card ************************************************* 49————
Retail leasing************************************************ ——— 1 7
Other retail************************************************** 17 17 25 25 41
Total retail *********************************************** 66 17 25 26 48
Total nonperforming loans ****************************** 544 640 1,020 1,237 1,001
Other real estate ******************************************** 71 72 73 59 44
Other assets************************************************* 29 36 55 77 75
Total nonperforming assets ***************************** $644 $748 $1,148 $1,373 $1,120
Accruing loans 90 days or more past due************************** $253 $294 $ 329 $ 426 $ 463
Nonperforming loans to total loans ******************************** .39% .51% .86% 1.06% .87%
Nonperforming assets to total loans plus other real estate ************ .47% .59% .97% 1.18% .98%
Net interest lost on nonperforming loans *************************** $ 30 $ 42 $ 67 $ 65 $ 63
Changes in Nonperforming Assets
Commercial and Retail and
(Dollars in Millions) Commercial Real Estate Residential Mortgages (c) Total
Balance December 31, 2004 ************************************ $ 619 $129 $ 748
Additions to nonperforming assets
New nonaccrual loans and foreclosed properties ****************** 397 101 498
Advances on loans******************************************** 35 — 35
Total additions ******************************************** 432 101 533
Reductions in nonperforming assets
Paydowns, payoffs******************************************** (265) (29) (294)
Net sales **************************************************** (78) — (78)
Return to performing status ************************************ (66) (11) (77)
Charge-offs (b) *********************************************** (185) (3) (188)
Total reductions ******************************************* (594) (43) (637)
Net additions (reductions) in nonperforming assets ********** (162) 58 (104)
Balance December 31, 2005 ************************************ $ 457 $187 $ 644
(a) Throughout this document, nonperforming assets and related ratios do not include accruing loans 90 days or more past due.
(b) Charge-offs exclude actions for certain card products and loan sales that were not classified as nonperforming at the time the charge-off occurred.
(c) Residential mortgage information excludes changes related to residential mortgages serviced by others.
goods, consumer-related sectors, manufacturing and certain
Residential mortgage loans on nonaccrual status increased segments of transportation.
slightly during 2005 primarily reflecting growth in the Included in nonperforming loans were restructured
portfolio. As a percentage of loan balances, nonperforming commercial, commercial real estate and retail loans of
residential mortgages declined to .23 percent at $75 million and $58 million at December 31, 2005 and
December 31, 2005 compared with .28 percent at 2004, respectively. Commitments to lend additional funds
December 31, 2004. under restructured loans were $9 million at December 31,
The $400 million decrease in total nonperforming 2005, compared with $12 million as of December 31, 2004.
assets in 2004, as compared with 2003, reflected decreases Restructured loans performing under the restructured terms
in nonperforming commercial, commercial real estate and beyond a specified timeframe are reported as ‘‘restructured
retail loans, partially offset by an increase in nonperforming loans’’ and accrue interest.
residential mortgages. The decrease in nonperforming assets
Restructured Loans Accruing Interest On a case-by-case
in 2004 was also broad-based across most industry sectors
basis, management determines whether an account that
within the commercial loan portfolio including capital
experiences financial difficulties should be modified as to its
U.S. BANCORP 37
Table 14