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securities transactions were principally related to accounts and asset-backed securities. Average investment
asset/liability management decisions. At December 31, 2005, securities were $.9 billion (2.1 percent) lower in 2005,
approximately 41 percent of the investment securities compared with 2004. The decline principally reflected the
portfolio represented adjustable-rate financial instruments, net impact of repositioning the investment portfolio as part
compared with 39 percent at December 31, 2004. of asset/liability risk management decisions to acquire
Adjustable-rate financial instruments include variable-rate variable-rate securities.
collateralized mortgage obligations, mortgage-backed The weighted-average yield of the available-for-sale
securities, agency securities, adjustable-rate money market portfolio was 4.89 percent at December 31, 2005,
INVESTMENT SECURITIES
Available-for-Sale Held-to-Maturity
Weighted- Weighted-
Average Weighted- Average Weighted-
Amortized Fair Maturity in Average Amortized Fair Maturity in Average
December 31, 2005 (Dollars in Millions) Cost Value Years Yield (c) Cost Value Years Yield (c)
U.S. Treasury and agencies
Maturing in one year or less***************** $ 101 $ 101 .72 4.63% $ — $ — — —%
Maturing after one year through five years***** 41 41 2.67 5.96 ————
Maturing after five years through ten years **** 29 30 7.34 5.65 ————
Maturing after ten years ******************** 325 317 14.58 5.71 ————
Total ****************************** $ 496 $ 489 10.36 5.51% $ — $ — — —%
Mortgage-backed securities (a)
Maturing in one year or less***************** $ 379 $ 381 .70 5.70% $ — $ — — —%
Maturing after one year through five years***** 20,606 20,208 3.61 4.65 8 8 3.05 5.08
Maturing after five years through ten years **** 13,629 13,342 7.19 4.93 ————
Maturing after ten years ******************** 3,547 3,583 13.38 5.69 ————
Total ****************************** $38,161 $37,514 5.77 4.86% $ 8 $ 8 3.05 5.08%
Asset-backed securities (a)
Maturing in one year or less***************** $ 12 $ 12 .74 5.40% $ — $ — — —%
Maturing after one year through five years***** — ——— ————
Maturing after five years through ten years **** — ——— ————
Maturing after ten years ******************** — ——— ————
Total ****************************** $ 12 $ 12 .74 5.40% $ — $ — — —%
Obligations of state and political
subdivisions
Maturing in one year or less***************** $ 67 $ 67 .31 7.28% $ 12 $ 12 .33 6.37%
Maturing after one year through five years***** 59 61 2.31 7.24 23 24 3.30 6.65
Maturing after five years through ten years **** 231 231 9.40 6.42 15 17 7.92 7.68
Maturing after ten years ******************** 283 278 15.49 6.25 34 35 15.15 6.57
Total ****************************** $ 640 $ 637 10.49 6.51% $ 84 $ 88 8.51 6.76%
Other debt securities
Maturing in one year or less***************** $ 301 $ 301 .08 3.65% $ 5 $ 5 .57 6.16%
Maturing after one year through five years***** 12 12 1.28 3.82 11 11 3.46 5.23
Maturing after five years through ten years **** 15 15 10.00 5.30 1 1 6.25 4.15
Maturing after ten years ******************** 626 621 21.69 5.15 ————
Total ****************************** $ 954 $ 949 14.44 4.66% $ 17 $ 17 2.73 5.45%
Other investments *********************** $58$58——%$—$———%
Total investment securities (b) ******************* $40,321 $39,659 6.10 4.89% $109 $113 7.21 6.44%
(a) Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities anticipating future prepayments.
(b) The weighted-average maturity of the available for sale investment securities was 4.45 years at December 31, 2004, with a corresponding weighted-average yield of 4.43 percent. The
weighted-average maturity of the held-to-maturity investment securities was 6.19 years at December 31, 2004, with a corresponding weighted-average yield of 6.28 percent.
(c) Average yields are presented on a fully-taxable equivalent basis under a tax rate of 35 percent. Yields on available-for-sale and held-to-maturity securities are computed based on historical
cost balances. Average yield and maturity calculations exclude equity securities that have no stated yield or maturity.
2005 2004
Amortized Percent Amortized Percent
(Dollars in Millions) Cost of Total Cost of Total
U.S. Treasury and agencies ******************************************** $ 496 1.2% $ 684 1.6%
Mortgage-backed securities ******************************************** 38,169 94.4 39,820 95.4
Asset-backed securities *********************************************** 12 .1 64 .2
Obligations of state and political subdivisions ***************************** 724 1.8 303 .7
Other debt securities and investments *********************************** 1,029 2.5 881 2.1
Total investment securities ****************************************** $40,430 100.0% $41,752 100.0%
30 U.S. BANCORP
Table 11