US Bank 2007 Annual Report Download - page 32

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The increase was primarily driven by growth in credit card,
installment and home equity loans, partially offset by
decreases in retail leasing and student loan balances. Average
retail loans increased $3.5 billion (7.7 percent) in 2007,
principally reflecting growth in credit card and installment
loans. Strong growth in credit cards occurred in branch
originated, co-branded and financial institution partner
portfolios.
Of the total retail loans and residential mortgages
outstanding, approximately 80.0 percent were to customers
located in the Company’s primary banking region. Table 10
provides a geographic summary of residential mortgages and
retail loans outstanding as of December 31, 2007 and 2006.
Loans Held for Sale Loans held for sale, consisting primarily
of residential mortgages and student loans to be sold in the
secondary market, were $4.8 billion at December 31, 2007,
compared with $3.3 billion at December 31, 2006. The
increase in loans held for sale was principally due to an
increase in residential mortgage loan balances. Average loans
held for sale were $4.3 billion in 2007, compared with
$3.7 billion in 2006. During 2007, certain companies in the
mortgage banking industry experienced significant disruption
due to their inability to access financing through the capital
markets as investor concerns increased related to the quality
of sub-prime loan originations and related securitizations. The
Company’s primary focus of originating conventional
mortgages packaged through government agencies enabled it
to avoid these issues impacting other mortgage banking firms.
Given these market conditions and the nature of the
Company’s mortgage banking business, residential mortgage
originations increased in 2007 by 21.2 percent as customers
sought more reliable financing alternatives.
Investment Securities The Company uses its investment
securities portfolio for several purposes. It serves as a vehicle
to manage interest rate risk, generates interest and dividend
income from the investment of excess funds depending on
30 U.S. BANCORP
Table 10 RESIDENTIAL MORTGAGES AND RETAIL LOANS BY GEOGRAPHY
(Dollars in Millions) Loans Percent Loans Percent
December 31, 2007 December 31, 2006
Residential Mortgages
California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,426 6.2% $ 1,356 6.4%
Colorado. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,566 6.9 1,480 6.9
Illinois . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,450 6.3 1,359 6.4
Minnesota . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,292 10.1 2,287 10.7
Missouri . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,562 6.9 1,516 7.1
Ohio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,605 7.0 1,529 7.2
Oregon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 968 4.2 952 4.5
Washington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,266 5.6 1,273 6.0
Wisconsin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,142 5.0 1,100 5.2
Iowa, Kansas, Nebraska, North Dakota, South Dakota . . . . . . . . . . . . . . . . . . 1,502 6.6 1,512 7.1
Arkansas, Indiana, Kentucky, Tennessee . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,886 8.3 1,676 7.9
Idaho, Montana, Wyoming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 521 2.3 470 2.2
Arizona, Nevada, Utah . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,267 5.6 1,168 5.5
Total banking region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,453 81.0 17,678 83.1
Outside the Company’s banking region . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,329 19.0 3,607 16.9
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $22,782 100.0% $21,285 100.0%
Retail Loans
California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,261 12.3% $ 5,769 12.1%
Colorado. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,427 4.8 2,284 4.8
Illinois . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,614 5.1 2,429 5.1
Minnesota . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,247 10.3 5,075 10.7
Missouri . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,522 5.0 2,464 5.2
Ohio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,276 6.5 3,224 6.8
Oregon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,244 4.4 2,024 4.3
Washington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,492 4.9 2,278 4.8
Wisconsin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,529 5.0 2,454 5.2
Iowa, Kansas, Nebraska, North Dakota, South Dakota . . . . . . . . . . . . . . . . . . 3,203 6.3 3,096 6.5
Arkansas, Indiana, Kentucky, Tennessee . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,748 7.4 3,588 7.6
Idaho, Montana, Wyoming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,564 3.1 1,339 2.8
Arizona, Nevada, Utah . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,231 4.4 1,964 4.1
Total banking region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,358 79.5 37,988 80.0
Outside the Company’s banking region . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,406 20.5 9,489 20.0
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $50,764 100.0% $47,477 100.0%