US Bank 2007 Annual Report Download - page 34

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structures and are classified as asset-backed securities within
the consolidated financial statements.
At December 31, 2007, approximately 39 percent of the
investment securities portfolio represented adjustable-rate
financial instruments, compared with 37 percent at
December 31, 2006. Adjustable-rate financial instruments
include variable-rate collateralized mortgage obligations,
mortgage-backed securities, agency securities, adjustable-rate
money market accounts, asset-backed securities, corporate
debt securities and floating-rate preferred stock. Average
investment securities were $1.4 billion (3.4 percent) higher
in 2007, compared with 2006, driven primarily by an
increase in the municipal securities portfolio, partially offset
by a reduction in mortgage-backed assets. The weighted-
average yield of the available-for-sale portfolio was
5.51 percent at December 31, 2007, compared with
5.32 percent at December 31, 2006. The average maturity of
the available-for-sale portfolio increased to 7.4 years at
December 31, 2007, up from 6.6 years at December 31,
2006. The relative mix of the type of investment securities
maintained in the portfolio is provided in Table 11.
The Company conducts a regular assessment of its
investment portfolios to determine whether any securities are
other-than-temporarily impaired considering, among other
factors, the nature of the investments, credit ratings or
financial condition of the issuer, the extent and duration of
the unrealized loss, expected cash flows of underlying
collateral, market conditions and the Company’s ability to
hold the securities through the anticipated recovery period.
At December 31, 2007, the available-for-sale securities
portfolio included a $1.1 billion net unrealized loss,
compared with a net unrealized loss of $600 million at
December 31, 2006. The substantial portion of securities
with unrealized losses were either government securities,
issued by government-backed agencies or privately issued
securities with high investment grade credit ratings and
limited, if any, credit exposure. Some securities classified
within obligations of state and political subdivisions are
supported by mono-line insurers that have recently
experienced credit rating downgrades. Based on
management’s evaluation, the impact of these changes is
expected to be minimal to the Company. The majority of
asset-backed securities at December 31, 2007, represented
structured investments. The valuation of these securities is
determined through estimates of expected cash flows,
discount rates and management’s assessment of various
32 U.S. BANCORP
Table 12 DEPOSITS
The composition of deposits was as follows:
December 31 (Dollars in Millions) Amount
Percent
of Total Amount
Percent
of Total Amount
Percent
of Total Amount
Percent
of Total Amount
Percent
of Total
2007 2006 2005 2004 2003
Noninterest-bearing deposits . . . . . $ 33,334 25.4% $ 32,128 25.7% $ 32,214 25.8% $ 30,756 25.5% $ 32,470 27.3%
Interest-bearing savings deposits
Interest checking . . . . . . . . . . . 28,996 22.0 24,937 20.0 23,274 18.7 23,186 19.2 21,404 18.0
Money market savings . . . . . . . 24,301 18.5 26,220 21.0 27,934 22.4 30,478 25.2 34,025 28.6
Savings accounts . . . . . . . . . . 5,001 3.8 5,314 4.2 5,602 4.5 5,728 4.8 5,630 4.7
Total of savings deposits . . . 58,298 44.3 56,471 45.2 56,810 45.6 59,392 49.2 61,059 51.3
Time certificates of deposit less
than $100,000 . . . . . . . . . . . . 14,160 10.8 13,859 11.1 13,214 10.6 12,544 10.4 13,690 11.5
Time deposits greater than
$100,000
Domestic . . . . . . . . . . . . . . . . 15,351 11.7 14,868 11.9 14,341 11.5 11,956 9.9 5,902 4.9
Foreign . . . . . . . . . . . . . . . . . 10,302 7.8 7,556 6.1 8,130 6.5 6,093 5.0 5,931 5.0
Total interest-bearing
deposits . . . . . . . . . . . . 98,111 74.6 92,754 74.3 92,495 74.2 89,985 74.5 86,582 72.7
Total deposits . . . . . . . . . . . . . $131,445 100.0% $124,882 100.0% $124,709 100.0% $120,741 100.0% $119,052 100.0%
The maturity of time deposits was as follows:
December 31, 2007 (Dollars in Millions)
Certificates
Less Than $100,000
Time Deposits
Greater Than $100,000 Total
Three months or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,809 $19,196 $24,005
Three months through six months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,827 3,528 7,355
Six months through one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,728 1,537 4,265
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,663 746 2,409
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386 272 658
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 506 242 748
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234 129 363
Thereafter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 3 10
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $14,160 $25,653 $39,813