US Bank 2009 Annual Report Download - page 90

Download and view the complete annual report

Please find page 90 of the 2009 US Bank annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 143

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143

nonperforming assets as of December 31, 2009 and 2008,
see Table 14 included in Management’s Discussion and
Analysis which is incorporated by reference into these Notes
to Consolidated Financial Statements.
The following table lists information related to nonperforming loans as of December 31:
(Dollars in Millions) 2009 2008
Loans on nonaccrual status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,946 $2,260
Restructured loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 492 151
Total nonperforming loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,438 $2,411
Interest income that would have been recognized at original contractual terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 468 $ 123
Amount recognized as interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299 43
Forgone revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 169 $ 80
Activity in the allowance for credit losses was as follows:
(Dollars in Millions) 2009 2008 2007
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,639 $2,260 $2,256
Add
Provision charged to operating expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,557 3,096 792
Deduct
Loans charged off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,111 2,009 1,032
Less recoveries of loans charged off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (243) (190) (240)
Net loans charged off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,868 1,819 792
Acquisitions and other changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (64) 102 4
Balance at end of year (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,264 $3,639 $2,260
Components
Allowance for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,079 $3,514 $2,058
Liability for unfunded credit commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 125 202
Total allowance for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,264 $3,639 $2,260
(a) Included in this analysis is activity related to the Company’s liability for unfunded commitments, which is separately recorded in other liabilities in the Consolidated Balance Sheet. The
balance at December 31, 2009 excludes $1.4 billion of credit discounts recorded as part of the initial determination of the fair value of purchased nonimpaired loans related to the FBOP
transaction.
A summary of impaired loans is as follows:
(Dollars in Millions)
Recorded
Investment
Valuation
Allowance
Recorded
Investment
Valuation
Allowance
Recorded
Investment
Valuation
Allowance
2009 2008 2007
Commercial and commercial real estate loans:
Period-end recorded investment
Valuation allowance required . . . . . . . . . . . . . . . . . . . . . . . . $1,792 $206 $1,023 $115 $314 $34
No valuation allowance required. . . . . . . . . . . . . . . . . . . . . . 1,045 – 514 – 107 –
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,837 $206 $1,537 $115 $421 $34
Average balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,599 $1,006 $366
Interest income recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 6 –
Commitments to lend additional funds . . . . . . . . . . . . . . . . . . . 289 107 12
Restructured accruing homogenous loans:
Period-end recorded investment . . . . . . . . . . . . . . . . . . . . . . . $2,081 $367 $1,336 $223 $551 $17
Average balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,520 1,196 466
Interest income recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 71 29
Nonaccrual homogenous loans:
Period-end recorded investment . . . . . . . . . . . . . . . . . . . . . . . $ 670 $ 72 $ 302 $ 29 $ 82 $ 1
88 U.S. BANCORP