US Bank 2006 Annual Report Download - page 78

Download and view the complete annual report

Please find page 78 of the 2006 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.

Page out of 130

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130

incorporated by reference into these Notes to Consolidated Nonperforming assets include nonaccrual loans,
Financial Statements. restructured loans not performing in accordance with
For detail of the Company’s commercial real estate modified terms, other real estate and other nonperforming
portfolio by property type and geography as of assets owned by the Company. For details of the
December 31, 2006 and 2005, see Table 8 included in Company’s nonperforming assets as of December 31, 2006
Management’s Discussion and Analysis which is and 2005, see Table 14 included in Management’s
incorporated by reference into these Notes to Consolidated Discussion and Analysis which is incorporated by reference
Financial Statements. Such loans are collateralized by the into these Notes to Consolidated Financial Statements.
related property.
The following table lists information related to nonperforming loans as of December 31:
(Dollars in Millions) 2006 2005
Loans on nonaccrual status **************************************************************************************** $432 $469
Restructured loans************************************************************************************************ 38 75
Total nonperforming loans****************************************************************************************** $470 $544
Interest income that would have been recognized at original contractual terms************************************************ $55 $48
Amount recognized as interest income******************************************************************************** 16 18
Forgone revenue ************************************************************************************************* $39 $30
Activity in the allowance for credit losses was as follows:
(Dollars in Millions) 2006 2005 2004
Balance at beginning of year ********************************************************************** $2,251 $2,269 $2,369
Add
Provision charged to operating expense ********************************************************** 544 666 669
Deduct
Loans charged off *************************************************************************** 763 949 1,074
Less recoveries of loans charged off************************************************************* 219 264 307
Net loans charged off************************************************************************* 544 685 767
Acquisitions and other changes ******************************************************************** 5 1 (2)
Balance at end of year (a) ************************************************************************ $2,256 $2,251 $2,269
Components
Allowance for loan losses ********************************************************************* $2,022 $2,041 $2,080
Liability for unfunded credit commitments ******************************************************** 234 210 189
Total allowance for credit losses ************************************************************* $2,256 $2,251 $2,269
(a) Included in this analysis is activity related to the Company’s liability for unfunded commitments, which is separately recorded in other liabilities in the Consolidated Balance Sheet.
A portion of the allowance for credit losses is allocated to commercial and commercial real estate loans deemed impaired.
These impaired loans are included in nonperforming assets. A summary of impaired loans and their related allowance for
credit losses is as follows:
2006 2005 2004
Recorded Valuation Recorded Valuation Recorded Valuation
(Dollars in Millions) Investment Allowance Investment Allowance Investment Allowance
Impaired loans
Valuation allowance required ***************** $346 $44 $388 $37 $489 $64
No valuation allowance required ************** ––––––
Total impaired loans *************************** $346 $44 $388 $37 $489 $64
Average balance of impaired loans during the year ** $344 $412 $600
Interest income recognized on impaired loans during
the year ********************************* 421
Commitments to lend additional funds to customers In addition to impaired commercial and commercial
whose commercial and commercial real estate loans were real estate loans, the Company had smaller balance
classified as nonaccrual or restructured at December 31, homogenous loans that are accruing interest at rates
2006, totaled $23 million. considered to be below market rate. At December 31, 2006,
2005 and 2004, the recorded investment in these other
76 U.S. BANCORP