US Bank 2015 Annual Report Download - page 41

TABLE 12 SELECTED LOAN MATURITY DISTRIBUTION
At December 31, 2015 (Dollars in Millions)
One Year
or Less
Over One
Through
Five Years
Over Five
Years Total
Commercial ............................................................ $28,529 $ 55,846 $ 4,027 $ 88,402
Commercial real estate .................................................... 11,074 24,476 6,587 42,137
Residential mortgages .................................................... 2,705 8,118 42,673 53,496
Credit card ............................................................. 21,012 — — 21,012
Other retail ............................................................. 9,876 27,382 13,948 51,206
Covered loans ........................................................... 580 774 3,242 4,596
Total loans ............................................................ $73,776 $116,596 $70,477 $260,849
Total of loans due after one year with
Predetermined interest rates ............................................. $ 82,032
Floating interest rates ................................................... $105,041
Investment Securities The Company uses its investment
securities portfolio to manage enterprise interest rate risk,
provide liquidity (including the ability to meet regulatory
requirements), generate interest and dividend income, and as
collateral for public deposits and wholesale funding sources.
While the Company intends to hold its investment securities
indefinitely, it may sell available-for-sale securities in response
to structural changes in the balance sheet and related interest
rate risk and to meet liquidity requirements, among other
factors.
Investment securities totaled $105.6 billion at
December 31, 2015, compared with $101.0 billion at
December 31, 2014. The $4.6 billion (4.5 percent) increase
reflected $5.1 billion of net investment purchases, partially
offset by a $457 million unfavorable change in net unrealized
gains (losses) on available-for-sale investment securities.
Average investment securities were $103.2 billion in 2015,
compared with $90.3 billion in 2014. The weighted-average
yield of the available-for-sale portfolio was 2.21 percent at
December 31, 2015, compared with 2.32 percent at
December 31, 2014. The average maturity of the available-
for-sale portfolio was 4.7 years at December 31, 2015,
compared with 4.3 years at December 31, 2014. The
weighted-average yield of the held-to-maturity portfolio was
1.92 percent at December 31, 2015, unchanged from
December 31, 2014. The average maturity of the held-to-
maturity portfolio was 4.2 years at December 31, 2015,
compared with 4.0 years at December 31, 2014. Investment
securities by type are shown in Table 13.
The Company’s available-for-sale securities are carried at
fair value with changes in fair value reflected in other
comprehensive income (loss) unless a security is deemed to
be other-than-temporarily impaired. At December 31, 2015,
the Company’s net unrealized gains on available-for-sale
securities were $180 million, compared with $637 million at
December 31, 2014. The unfavorable change in net
unrealized gains (losses) was primarily due to decreases in the
fair value of agency mortgage-backed and state and political
securities as a result of increases in interest rates. Gross
unrealized losses on available-for-sale securities totaled $480
million at December 31, 2015, compared with $343 million at
December 31, 2014. The Company conducts a regular
assessment of its investment portfolio to determine whether
any securities are other-than-temporarily impaired. When
assessing unrealized losses for other-than-temporary
impairment, the Company considers the nature of the
investment, the financial condition of the issuer, the extent
and duration of unrealized loss, expected cash flows of
underlying assets and market conditions. At December 31,
2015, the Company had no plans to sell securities with
unrealized losses, and believes it is more likely than not that it
would not be required to sell such securities before recovery
of their amortized cost.
In December 2013, U.S. banking regulators approved final
rules that prohibit banks from holding certain types of
investments, such as investments in hedge and certain private
equity funds. The Company does not anticipate the
implementation of these final rules will require any significant
liquidation of securities held or impairment charges.
Refer to Notes 5 and 22 in the Notes to Consolidated
Financial Statements for further information on investment
securities.
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