US Bank 2002 Annual Report Download - page 31

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from its product distribution network and by implementing decrease in non-deductible merger and restructuring-related
more effective business processes. Restructuring activities charges and the change in accounting for goodwill. The
related to Piper were completed in 2001. effective tax rate increase in 2001, compared with 2000,
In 2000, merger and restructuring-related items was primarily due to a decline in tax-exempt interest related
included in noninterest expense consisted of $227.0 million to sales of investment securities, the impact of unitary state
related to the merger of Firstar and Mercantile tax apportionment factors on the Company, non-deductible
Bancorporation, $52.6 million related to the merger of merger and restructuring-related costs and the acquisition
Firstar and Star Banc Corporation and $69.1 million of NOVA.
primarily related to other acquisitions by USBM. Included The Company’s net deferred tax liability was
in merger and restructuring-related items were $59.4 for $1,664.1 million at December 31, 2002, compared with
severance and employee-related costs, $193.5 million for $573.2 million for the year ended 2001. The change in
systems conversions, $47.3 million for lease cancellations 2002 primarily relates to leasing activities and unrealized
and other building-related costs and $48.5 million of other appreciation in securities available-for-sale and financial
business integration costs. instruments. For further information on income taxes,
Refer to Notes 4 and 5 of the Notes to Consolidated refer to Note 20 of the Notes to Consolidated
Financial Statements for further information on these Financial Statements.
acquired businesses and merger and restructuring-related
BALANCE SHEET ANALYSIS
items.
Average earning assets were $149.1 billion in 2002,
Income Tax Expense The provision for income taxes was
compared with $145.2 billion in 2001. The increase in
$1,776.3 million (an effective rate of 34.8 percent) in 2002,
average earning assets of $3.9 billion (2.7 percent) was
compared with $927.7 million (an effective rate of
primarily driven by increases in the investment portfolio,
35.2 percent) in 2001 and $1,512.2 million (an effective
core retail loan growth, and the impact of acquisitions. This
rate of 34.5 percent) in 2000. The decrease in the effective
growth was partially offset by declines in commercial and
tax rate in 2002, compared with 2001, was primarily driven
commercial real estate loans reflecting lower borrowing
by a change in unitary state tax apportionment factors, a
Loan Portfolio Distribution
2002 2001 2000 1999 1998
Percent Percent Percent Percent Percent
December 31 (Dollars in Millions) Amount of Total Amount of Total Amount of Total Amount of Total Amount of Total
Commercial
Commercial ********************** $ 36,584 31.5% $ 40,472 35.4% $ 47,041 38.5% $ 42,021 37.1% $ 37,777 35.3%
Lease financing ****************** 5,360 4.6 5,858 5.1 5,776 4.7 3,835 3.4 3,291 3.1
Total commercial ************** 41,944 36.1 46,330 40.5 52,817 43.2 45,856 40.5 41,068 38.4
Commercial real estate
Commercial mortgages************ 20,325 17.5 18,765 16.4 19,466 15.9 18,636 16.5 16,602 15.5
Construction and development ***** 6,542 5.6 6,608 5.8 6,977 5.7 6,506 5.7 5,206 4.9
Total commercial real estate **** 26,867 23.1 25,373 22.2 26,443 21.6 25,142 22.2 21,808 20.4
Residential mortgages************ 9,746 8.4 7,829 6.8 9,397 7.7 12,760 11.3 14,982 14.0
Retail
Credit card*********************** 5,665 4.9 5,889 5.1 6,012 4.9 5,004 4.4 4,856 4.5
Retail leasing ******************** 5,680 4.9 4,906 4.3 4,153 3.4 2,123 1.9 1,621 1.5
Home equity and
second mortgages (a)********** 13,572 11.6 12,235 10.7 11,956 9.7 * * * *
Other retail
Revolving credit *************** 2,650 2.3 2,673 2.3 2,750 2.2 * * * *
Installment******************** 2,258 1.9 2,292 2.0 2,186 1.8 * * * *
Automobile ******************* 6,343 5.5 5,660 5.0 5,609 4.6 * * * *
Student ********************** 1,526 1.3 1,218 1.1 1,042 .9 * * * *
Total other retail (a)********* 12,777 11.0 11,843 10.4 11,587 9.5 22,344 19.7 22,623 21.2
Total retail ******************** 37,694 32.4 34,873 30.5 33,708 27.5 29,471 26.0 29,100 27.2
Total loans **************** $116,251 100.0% $114,405 100.0% $122,365 100.0% $113,229 100.0% $106,958 100.0%
(a) Home equity and second mortgages are included within the total other retail category for the periods prior to the year 2000.
* Information not available
U.S. Bancorp 29
Table 7