US Bank 2009 Annual Report Download - page 24

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(2.7 percent) year-over-year principally due to lower
utilization of existing commitments and a reduction in the
demand for new loans. Average covered assets increased
$11.4 billion, due to the timing of the Downey, PFF and
FBOP acquisitions.
Average investment securities in 2009 were essentially
unchanged from 2008, as security purchases offset maturities
and sales. In 2009, the composition of the Company’s
investment portfolio shifted to a larger proportion in
U.S. Treasury, agency and agency mortgage-backed
securities, compared with a year ago.
Average noninterest-bearing deposits in 2009 were
$9.1 billion (31.7 percent) higher than 2008. The increase
reflected higher business demand deposit balances, partially
offset by lower trust demand deposits.
Average total savings products increased $18.4 billion
(29.0 percent) in 2009, compared with 2008, principally as
a result of a $7.2 billion increase in savings accounts due to
strong participation in a new savings product introduced
across the franchise by Consumer Banking late in the third
quarter of 2008, a $5.7 billion (18.4 percent) increase in
interest checking balances from higher government and
consumer banking customer balances and acquisitions, and a
$5.5 billion (20.9 percent) increase in money market savings
balances from higher broker-dealer, corporate trust and
institutional trust customer balances and acquisitions.
Average time certificates of deposit less than $100,000
increased $4.3 billion (31.6 percent) primarily due to
acquisitions. Average time deposits greater than $100,000
decreased $.2 billion (.7 percent) in 2009, compared with
2008. Time deposits greater than $100,000 are managed as
an alternative to other funding sources, such as wholesale
borrowing, based largely on relative pricing.
The $1.1 billion (16.3 percent) increase in net interest
income in 2008, compared with 2007, was attributable to
strong growth in average earning assets, as well as an
22 U.S. BANCORP
Table 3 Net Interest Income — Changes Due to Rate and Volume (a)
(Dollars in Millions) Volume Yield/Rate Total Volume Yield/Rate Total
2009 v 2008 2008 v 2007
Increase (decrease) in
Interest Income
Investment securities . . . . . . . . . . . . . . . . . $ (2) $ (388) $ (390) $ 83 $ (162) $ (79)
Loans held for sale . . . . . . . . . . . . . . . . . . 111 (61) 50 (25) (25) (50)
Loans
Commercial loans . . . . . . . . . . . . . . . . . (74) (554) (628) 427 (868) (441)
Commercial real estate. . . . . . . . . . . . . . 150 (468) (318) 183 (491) (308)
Residential mortgage . . . . . . . . . . . . . . . 75 (114) (39) 72 (7) 65
Retail loans . . . . . . . . . . . . . . . . . . . . . 480 (489) (9) 560 (506) 54
Total loans, excluding covered assets . . . . 631 (1,625) (994) 1,242 (1,872) (630)
Covered assets . . . . . . . . . . . . . . . . . . . 534 (17) 517 61 – 61
Total loans . . . . . . . . . . . . . . . . . . . . 1,165 (1,642) (477) 1,303 (1,872) (569)
Other earning assets . . . . . . . . . . . . . . . . . 7 (72) (65) 80 (61) 19
Total earning assets . . . . . . . . . . . . . . 1,281 (2,163) (882) 1,441 (2,120) (679)
Interest Expense
Interest-bearing deposits
Interest checking . . . . . . . . . . . . . . . . . . 46 (219) (173) 67 (167) (100)
Money market accounts . . . . . . . . . . . . . 69 (254) (185) 25 (346) (321)
Savings accounts . . . . . . . . . . . . . . . . . 24 27 51 2 (1) 1
Time certificates of deposit less than
$100,000 . . . . . . . . . . . . . . . . . . . . . 149 (160) (11) (47) (125) (172)
Time deposits greater than $100,000 . . . . (5) (356) (361) 400 (681) (281)
Total interest-bearing deposits . . . . . . . 283 (962) (679) 447 (1,320) (873)
Short-term borrowings . . . . . . . . . . . . . . . . (272) (321) (593) 493 (880) (387)
Long-term debt. . . . . . . . . . . . . . . . . . . . . (121) (339) (460) (269) (252) (521)
Total interest-bearing liabilities . . . . . . . (110) (1,622) (1,732) 671 (2,452) (1,781)
Increase (decrease) in net interest income . . $1,391 $ (541) $ 850 $ 770 $ 332 $ 1,102
(a) This table shows the components of the change in net interest income by volume and rate on a taxable-equivalent basis utilizing a tax rate of 35 percent. This table does not take into
account the level of noninterest-bearing funding, nor does it fully reflect changes in the mix of assets and liabilities. The change in interest not solely due to changes in volume or rates has
been allocated on a pro-rata basis to volume and yield/rate.