US Bank 2014 Annual Report Download - page 53

TABLE 17 NET CHARGE-OFFS AS A PERCENT OF AVERAGE LOANS OUTSTANDING
Year Ended December 31 2014 2013 2012 2011 2010
Commercial
Commercial............................................................................. .26% .19% .43% .76% 1.80%
Lease financing ......................................................................... .17 .06 .63 .96 1.47
Total commercial .................................................................... .26 .18 .45 .79 1.76
CommercialRealEstate
Commercial mortgages ................................................................. (.03) .08 .37 .73 1.23
Construction and development .......................................................... (.05) (.87) .86 4.20 6.32
Total commercial real estate ......................................................... (.03) (.09) .45 1.40 2.47
Residential Mortgages ................................................................... .38 .57 1.09 1.45 1.97
Credit Card ................................................................................ 3.73 3.90 4.01 5.19 7.32
Other Retail
Retail leasing ........................................................................... .03 .02 .04 – .27
Home equity and second mortgages .................................................... .61 1.33 1.72 1.66 1.72
Other ................................................................................... .71 .81 .94 1.20 1.68
Total other retail ..................................................................... .60 .89 1.13 1.25 1.56
Total loans, excluding covered loans............................................... .57 .66 1.03 1.53 2.41
Covered Loans ............................................................................ .15 .32 .08 .07 .09
Total loans......................................................................... .55% .64% .97% 1.41% 2.17%
Analysis of Loan Net Charge-offs Total loan net charge-offs
were $1.3 billion in 2014, compared with $1.5 billion in 2013
and $2.1 billion in 2012. The ratio of total loan net charge-
offs to average loans was .55 percent in 2014, compared with
.64 percent in 2013 and .97 percent in 2012. The decrease in
total net charge-offs in 2014, compared with 2013, reflected
improvement in the residential mortgages and home equity
and second mortgages portfolios, as economic conditions
continue to slowly improve, partially offset by higher
commercial loan net charge-offs and lower recoveries in the
commercialrealestateportfolio.
Commercial and commercial real estate loan net
charge-offs for 2014 were $182 million (.16 percent of
average loans outstanding), compared with $87 million (.08
percent of average loans outstanding) in 2013 and $441
million (.45 percent of average loans outstanding) in 2012.
The increase in net charge-offs in 2014, compared with 2013,
reflected higher commercial loan net charge-offs and lower
recoveries in commercial real estate. The decrease in net
charge-offs in 2013, compared with 2012, reflected the
impact of more stable economic conditions and a higher level
of recoveries during 2013.
Residential mortgage loan net charge-offs for 2014 were
$195 million (.38 percent of average loans outstanding),
compared with $272 million (.57 percent of average loans
outstanding) in 2013 and $438 million (1.09 percent of average
loans outstanding) in 2012. Credit card loan net charge-offs in
2014 were $658 million (3.73 percent of average loans
outstanding), compared with $656 million (3.90 percent of
average loans outstanding) in 2013 and $667 million
(4.01 percent of average loans outstanding) in 2012. Other
retail loan net charge-offs for 2014 were $288 million
(.60 percent of average loans outstanding), compared with
$418 million (.89 percent of average loans outstanding) in
2013 and $541 million (1.13 percent of average loans
outstanding) in 2012. The decrease in total residential
mortgage, credit card and other retail loan net charge-offs in
2014, compared with 2013, reflected the continued
improvement in economic conditions, especially in residential
housing prices. The decrease in total residential mortgage,
credit card and other retail loan net charge-offs in 2013,
compared with 2012, reflected the impact of more stable
economic conditions in 2013 as compared with 2012.
The following table provides an analysis of net charge-offs as
a percent of average loans outstanding for residential
mortgages and home equity and second mortgages by
borrower type:
Year Ended December 31
(Dollars in Millions)
Average Loans
Percent of
Average Loans
2014 2013 2014 2013
Residential Mortgages
Prime borrowers ............ $44,006 $40,077 .30% .48%
Sub-prime borrowers ........ 1,302 1,478 4.07 4.74
Other borrowers ............. 858 883 1.05 1.02
Loans purchased from
GNMA mortgage pools(a) .. 5,652 5,544 .05 .02
Total ...................... $51,818 $47,982 .38% .57%
Home Equity and Second
Mortgages
Prime borrowers ............ $14,804 $15,114 .53% 1.19%
Sub-prime borrowers ........ 262 324 5.34 7.09
Other borrowers ............. 498 449 .60 1.78
Total ...................... $15,564 $15,887 .61% 1.33%
(a) Represents loans purchased from GNMA mortgage pools whose payments are primarily
insured by the Federal Housing Administration or guaranteed by the Department of
Veterans Affairs.
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