US Bank 2002 Annual Report Download - page 99

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The estimated fair values of the Company’s financial instruments at December 31 are shown in the table below.
2002 2001
Carrying Fair Carrying Fair
December 31 (Dollars in Millions) Amount Value Amount Value
Financial Assets
Cash and cash equivalents ******************************************* $ 11,192 $ 11,192 $ 9,745 $ 9,745
Trading securities **************************************************** 898 898 982 982
Investment securities ************************************************* 28,488 28,495 26,608 26,615
Loans held for sale ************************************************** 4,159 4,159 2,820 2,820
Loans ************************************************************** 113,829 115,341 111,948 112,236
Total financial assets********************************************** 158,566 $160,085 152,103 $152,398
Nonfinancial assets******************************************** 21,461 19,287
Total assets *********************************************** $180,027 $171,390
Financial Liabilities
Deposits ************************************************************ $115,534 $116,039 $105,219 $105,561
Short-term borrowings************************************************ 7,806 7,806 14,670 14,670
Long-term debt ****************************************************** 28,588 29,161 25,716 25,801
Company-obligated mandatorily redeemable preferred securities of
subsidiary trusts holding solely the junior subordinated debentures of
the parent company*********************************************** 2,994 3,055 2,826 2,915
Total financial liabilities ******************************************** 154,922 $156,061 148,431 $148,947
Nonfinancial liabilities ****************************************** 7,004 6,498
Shareholders’ equity ******************************************* 18,101 16,461
Total liabilities and shareholders’ equity *********************** $180,027 $171,390
Derivative Positions
Asset and liability management positions
Interest Rate Swaps ******************************************* $ 1,438 $ 1,438 $ 328 $ 328
Forward commitments to sell residential mortgages *************** (80) (80) 72 72
Customer-related positions
Interest rate contracts****************************************** 22 22 10 10
Foreign exchange contracts ************************************ 1122
The fair value of unfunded commitments, standby commitments include consumer credit lines that are
letters of credit and other guarantees is approximately equal cancelable upon notification to the consumer.
to their carrying value. The carrying value of unfunded
LETTERS OF CREDIT
commitments and standby letters of credit is $240 million.
The carrying value of other guarantees is $162 million. Standby letters of credit are conditional commitments the
Company issues to guarantee the performance of a
Commitments and Contingent Liabilities customer to a third-party. The guarantees frequently
support public and private borrowing arrangements,
COMMITMENTS TO EXTEND CREDIT
including commercial paper issuances, bond financings and
Commitments to extend credit are legally binding and other similar transactions. The Company issues commercial
generally have fixed expiration dates or other termination letters of credit on behalf of customers to ensure payment
clauses. The contractual amount represents the Company’s or collection in connection with trade transactions. In the
exposure to credit loss, in the event of default by the event of a customer’s nonperformance, the Company’s
borrower. The Company manages this credit risk by using credit loss exposure is the same as in any extension of
the same credit policies it applies to loans. Collateral is credit, up to the letter’s contractual amount. Management
obtained to secure commitments based on management’s assesses the borrower’s credit to determine the necessary
credit assessment of the borrower. The collateral may collateral, which may include marketable securities, real
include marketable securities, receivables, inventory, estate, accounts receivable and inventory. Since the
equipment and real estate. Since the Company expects many conditions requiring the Company to fund letters of credit
of the commitments to expire without being drawn, total may not occur, the Company expects its liquidity
commitment amounts do not necessarily represent the requirements to be less than the total outstanding
Company’s future liquidity requirements. In addition, the
U.S. Bancorp 97
Note 23