US Bank 2007 Annual Report Download - page 31

conditions in early 2007 that enabled customer refinancing
of projects, a management decision to reduce condominium
construction financing in selected markets, and a slowdown
in residential homebuilding impacting construction lending.
During the fourth quarter of 2007, the Company
experienced growth of 2.4 percent in commercial real estate
loans as developers sought bank financing as liquidity
disruptions in the capital markets occurred. Table 9 provides
a summary of commercial real estate by property type and
geographical locations.
The Company maintains the real estate construction
designation until the completion of the construction phase
and, if retained, the loan is reclassified to the commercial
mortgage category. Approximately $107 million of
construction loans were permanently financed and
reclassified to the commercial mortgage loan category in
2007. At December 31, 2007, $231 million of tax-exempt
industrial development loans were secured by real estate.
The Company’s commercial real estate mortgages and
construction loans had unfunded commitments of
$8.9 billion at December 31, 2007 and 2006. The Company
also finances the operations of real estate developers and
other entities with operations related to real estate. These
loans are not secured directly by real estate and are subject
to terms and conditions similar to commercial loans. These
loans were included in the commercial loan category and
totaled $1.8 billion at December 31, 2007.
Residential Mortgages Residential mortgages held in the
loan portfolio at December 31, 2007, increased $1.5 billion
(7.0 percent) from December 31, 2006. The growth was
principally the result of an increase in consumer finance
originations during the year. The majority of loans retained
in the portfolio represented originations to customers with
better than sub-prime credit risk ratings. Average residential
mortgages increased 1.0 billion (4.9 percent) in 2007,
compared with 2006. The growth in average residential
mortgages from the consumer finance distribution channel
was offset somewhat by lower balances from traditional
branch and mortgage banking channels.
Retail Total retail loans outstanding, which include credit
card, retail leasing, home equity and second mortgages and
other retail loans, increased $3.3 billion (6.9 percent) at
December 31, 2007, compared with December 31, 2006.
U.S. BANCORP 29
Table 9 COMMERCIAL REAL ESTATE BY PROPERTY TYPE AND GEOGRAPHY
Property Type (Dollars in Millions) Loans Percent Loans Percent
December 31, 2007 December 31, 2006
Business owner occupied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,340 35.4% $10,027 35.0%
Commercial property
Industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 818 2.8 939 3.3
Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,424 8.3 2,226 7.8
Retail. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,979 10.2 2,732 9.5
Other commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,184 10.9 2,745 9.6
Homebuilders
Condominiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,081 3.7 1,117 3.9
Other residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,008 10.3 3,440 12.0
Multi-family . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,001 13.7 3,850 13.4
Hotel/motel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,051 3.6 1,126 3.9
Health care facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321 1.1 443 1.6
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $29,207 100.0% $28,645 100.0%
Geography
California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,783 19.8% $ 6,044 21.1%
Colorado. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,577 5.4 1,404 4.9
Illinois . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,110 3.8 1,060 3.7
Minnesota . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,723 5.9 1,833 6.4
Missouri . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,577 5.4 1,461 5.1
Ohio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,314 4.5 1,375 4.8
Oregon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,840 6.3 1,747 6.1
Washington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,950 10.1 3,065 10.7
Wisconsin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,460 5.0 1,547 5.4
Iowa, Kansas, Nebraska, North Dakota, South Dakota . . . . . . . . . . . . . . . . . . 2,103 7.2 1,948 6.8
Arkansas, Indiana, Kentucky, Tennessee . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,402 4.8 1,404 4.9
Idaho, Montana, Wyoming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,227 4.2 1,060 3.7
Arizona, Nevada, Utah . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,629 9.0 2,406 8.4
Total banking region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,695 91.4 26,354 92.0
Outside the Company’s banking region . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,512 8.6 2,291 8.0
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $29,207 100.0% $28,645 100.0%