US Bank 2004 Annual Report Download - page 101
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Please find page 101 of the 2004 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.by discounting the contractual cash flow using the discount based on appropriate LIBOR, eurodollar futures, swap,
rates implied by the high-grade corporate bond yield curve. treasury note yield curves and equity market prices.
Short-term Borrowings Federal funds purchased, securities Loan Commitments, Letters of Credit and Guarantees The
sold under agreements to repurchase, commercial paper and fair value of commitments, letters of credit and guarantees
other short-term funds borrowed are at floating rates or represents the estimated costs to terminate or otherwise
have short-term maturities. Their carrying value is assumed settle the obligations with a third-party. Residential
to approximate their fair value. mortgage commitments are actively traded and the fair
value is estimated using available market quotes. Other loan
Long-term Debt The estimated fair value of medium-term commitments, letters of credit and guarantees are not
notes, bank notes, Federal Home Loan Bank advances, actively traded. Substantially all loan commitments have
capital lease obligations and mortgage note obligations was floating rates and do not expose the Company to interest
determined using a discounted cash flow analysis based on rate risk assuming no premium or discount was ascribed to
current market rates of similar maturity debt securities to loan commitments because funding could occur at market
discount cash flows. Other long-term debt instruments were rates. The Company estimates the fair value of loan
valued using available market quotes. commitments, letters of credit and guarantees based on the
Interest Rate Swaps, Equity Contracts, Basis Swaps and related amount of unamortized deferred commitment fees
Options The interest rate options and swap cash flows were adjusted for the probable losses for these arrangements.
estimated using a third-party pricing model and discounted
The estimated fair values of the Company’s financial instruments at December 31 are shown in the table below.
2004 2003
Carrying Fair Carrying Fair
(Dollars in Millions) Amount Value Amount Value
Financial Assets
Cash and cash equivalents ************************************************************* $ 6,537 $ 6,537 $ 8,782 $ 8,782
Investment securities ****************************************************************** 41,481 41,486 43,334 43,343
Loans held for sale ******************************************************************** 1,439 1,439 1,433 1,433
Loans ******************************************************************************* 124,235 124,611 116,051 117,058
Total financial assets**************************************************************** 173,692 $174,073 169,600 $170,616
Nonfinancial assets ************************************************************* 21,412 19,871
Total assets***************************************************************** $195,104 $189,471
Financial Liabilities
Deposits ***************************************************************************** $120,741 $120,788 $119,052 $119,120
Short-term borrowings ***************************************************************** 13,084 13,084 10,850 10,850
Long-term debt *********************************************************************** 34,739 35,160 33,816 34,425
Total financial liabilities ************************************************************** 168,564 $169,032 163,718 $164,395
Nonfinancial liabilities ************************************************************ 7,001 6,511
Shareholders’ equity ************************************************************ 19,539 19,242
Total liabilities and shareholders’ equity ***************************************** $195,104 $189,471
Derivative Positions
Asset and liability management positions
Interest rate swaps***************************************************************** $ 435 $ 435 $ 631 $ 631
Forward commitments to sell residential mortgages************************************* (4) (4) — —
Foreign exchange forward contracts ************************************************** (12) (12) — —
Equity contracts ******************************************************************* 44——
Customer related positions
Interest rate contracts ************************************************************** 36 36 31 31
Foreign exchange contracts ********************************************************* 4422
The fair value of unfunded commitments, standby letters of credit and other guarantees is approximately equal to their
carrying value. The carrying value of unfunded commitments and standby letters of credit was $253.8 million. The carrying
value of other guarantees was $74.9 million.
U.S. BANCORP 99