US Bank 2004 Annual Report Download - page 27
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Please find page 27 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.industry-wide shift of payments from paper-based to the mix of merchants. The favorable variance in trust and
electronic and card-based transactions. During 2004, investment management fees in 2003 of $61.8 million
commercial products revenue increased $31.7 million (6.9 percent), compared with 2002, was driven by the
(7.9 percent), primarily due to syndication fees and acquisition of State Street Corporate Trust, which
commercial leasing revenue. An increase in loan servicing contributed $83.7 million in fees during 2003. Treasury
revenues from a year ago contributed to an increase of management fees grew by $49.4 million (11.8 percent) in
$30.2 million (8.2 percent) in mortgage banking revenue 2003, compared with 2002, with the majority of the
during 2004. The growth in mortgage servicing revenues increase occurring within the Wholesale Banking line of
was offset somewhat by lower gains from the sale of business. The increase in treasury management fees during
mortgage loan production. Investment products fees and 2003 was driven by growth in product sales, pricing
commissions revenue increased in 2004 by $11.1 million enhancements and the relatively low earnings credit rates to
(7.7 percent), compared with 2003, primarily due to higher customers. The growth was also driven by a change in the
sales activity in the Consumer Banking business line. The Federal government’s payment methodology for treasury
increase in sales activities reflected improving equity market management services from compensating balances, reflected
conditions in late 2003 and 2004. Other noninterest income in net interest income, to fees during the third quarter of
increased by $107.9 million (29.1 percent) from 2003, 2003. During 2003, commercial products revenue declined
principally due to improving retail lease residual values $78.7 million (16.4 percent), principally reflecting lower
resulting in lower end-of-term residual losses, a residual commercial loan conduit servicing fees resulting, in part,
value insurance recovery of $17.2 million during the third from consolidating the Stellar commercial loan conduit.
quarter of 2004 and improving equity investment Mortgage banking revenue had a year-over-year increase of
valuations. $36.9 million (11.2 percent) during 2003, principally due to
In 2003, noninterest income increased $102.3 million higher mortgage originations, servicing and secondary
(2.0 percent), compared with 2002, driven by strong growth market sales and the acquisition of Leader, which
in payment services revenue, trust and investment contributed $16.5 million of the favorable variance in 2003.
management fees, deposit service charges, treasury Investment products fees and commissions revenue increased
management fees, mortgage banking revenue and investment in 2003 by $12.2 million (9.2 percent), compared with
products fees and commissions attributable to both organic 2002, primarily due to increased retail brokerage activity
growth and acquisitions. Partially offsetting the increase in given more favorable equity capital market conditions
noninterest income in 2003 was a year-over-year decrease in relative to 2002. Deposit service charges increased in 2003
net securities gains of $55.1 million. The favorable impact by $25.5 million (3.7 percent), compared with 2002,
on noninterest income from acquisitions, which included primarily due to net new growth in checking accounts and
Leader, Bay View and State Street Corporate Trust, was fee enhancements principally within the Consumer Banking
approximately $122.7 million during 2003. Credit and line of business. Other noninterest income decreased by
debit card revenue, corporate payment products revenue $28.4 million (7.1 percent) from 2002, which included
and ATM processing services revenue were higher in 2003, $67.4 million of gains on the sales of two co-branded credit
compared with 2002, by $43.7 million (8.5 percent), card portfolios.
$35.6 million (10.9 percent) and $5.3 million (3.3 percent), Noninterest Expense Noninterest expense in 2004 was
respectively. Credit and debit card revenue growth in 2003 $5.8 billion, compared with $5.6 billion and $5.7 billion in
was somewhat muted ($19.4 million) due to the impact of 2003 and 2002, respectively. The increase of $187.6 million
the settlement of the antitrust litigation brought against (3.4 percent) in 2004, compared with 2003, principally
VISA USA and MasterCard by Wal-Mart Stores, Inc., Sears reflected a $154.8 million charge related to the prepayment
Roebuck & Co. and other retailers beginning in August of a portion of the Company’s long-term debt, costs related
2003. This change in the interchange rate in the third to business initiatives and incremental expenses of
quarter of 2003, in addition to higher customer loyalty $62.8 million due to the expansion of EuroConex. These
rewards expenses, however, were more than offset by increases were offset somewhat by a net reduction in MSR
increases in transaction volumes and other pricing impairments of $151.9 million and lower merger and
enhancements. Corporate payment products revenue and restructuring-related charges. In 2003, noninterest expense
ATM processing services revenue were higher in 2003, included $46.2 million of merger and restructuring-related
primarily reflecting growth in sales and card usage during costs related to acquisitions completed in prior years.
the year. Merchant processing services revenue was lower in Compensation expense increased in 2004, compared with
2003 by $5.9 million (1.0 percent), compared with 2002, 2003, due to increases in salaries and stock-based
primarily due to lower processing spreads resulting from compensation. The increase in salaries reflected business
pricing changes that occurred in late 2002 and changes in
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