US Bank 2008 Annual Report Download - page 29

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Company’s pension plan funding practices, investment
policies and asset allocation strategies, and accounting
policies for pension plans.
The following table shows an analysis of hypothetical
changes in the LTROR and discount rate:
LTROR (Dollars in Millions)
Down 100
basis points
Up 100
basis points
Incremental benefit (expense). . . . . . $ (25) $ 25
Percent of 2008 net income . . . . . . . (.53)% .53%
Discount Rate (Dollars in Millions)
Down 100
basis points
Up 100
basis points
Incremental benefit (expense). . . . . . $ (60) $ 48
Percent of 2008 net income . . . . . . . (1.26)% 1.01%
Income Tax Expense The provision for income taxes was
$1,087 million (an effective rate of 27.0 percent) in 2008,
compared with $1,883 million (an effective rate of
30.3 percent) in 2007 and $2,112 million (an effective rate
of 30.8 percent) in 2006. The decrease in the effective tax
rate from 2007 reflected the marginal impact of lower pre-
tax income and the relative amount of tax-exempt income
from investment securities and insurance products, and
incremental tax credits from affordable housing and other
tax-advantaged investments.
Included in 2006 was a reduction of income tax
expense of $61 million related to the resolution of federal
income tax examinations covering substantially all of the
Company’s legal entities for all years through 2004 and
$22 million related to certain state examinations.
For further information on income taxes, refer to
Note 19 of the Notes to Consolidated Financial Statements.
BALANCE SHEET ANALYSIS
Average earning assets were $215.0 billion in 2008,
compared with $194.7 billion in 2007. The increase in
average earning assets of $20.3 billion (10.5 percent) was
due to growth in total average loans of $18.2 billion
(12.4 percent), investment securities of $1.5 billion
(3.7 percent) and other earning assets of $1.0 billion
(58.4 percent), partially offset by lower loans held-for-sale.
The change in total average earning assets was principally
funded by increases of $13.7 billion in interest-bearing
deposits and $4.0 billion in wholesale funding.
For average balance information, refer to Consolidated
Daily Average Balance Sheet and Related Yields and Rates
on pages 118 and 119.
U.S. BANCORP 27
Table 6 LOAN PORTFOLIO DISTRIBUTION
At 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
2008 2007 2006 2005 2004
Commercial
Commercial . . . . . . . . . . . . . . $ 49,759 26.9% $ 44,832 29.1% $ 40,640 28.3% $ 37,844 27.7% $ 35,210 28.2%
Lease financing. . . . . . . . . . . . 6,859 3.7 6,242 4.1 5,550 3.9 5,098 3.7 4,963 4.0
Total commercial . . . . . . . . 56,618 30.6 51,074 33.2 46,190 32.2 42,942 31.4 40,173 32.2
Commercial Real Estate
Commercial mortgages . . . . . . 23,434 12.6 20,146 13.1 19,711 13.7 20,272 14.9 20,315 16.3
Construction and development. . 9,779 5.3 9,061 5.9 8,934 6.2 8,191 6.0 7,270 5.8
Total commercial real
estate. . . . . . . . . . . . . . 33,213 17.9 29,207 19.0 28,645 19.9 28,463 20.9 27,585 22.1
Residential Mortgages
Residential mortgages . . . . . . . 18,232 9.8 17,099 11.1 15,316 10.7 14,538 10.7 9,722 7.8
Home equity loans, first liens. . . 5,348 2.9 5,683 3.7 5,969 4.1 6,192 4.5 5,645 4.5
Total residential mortgages . . 23,580 12.7 22,782 14.8 21,285 14.8 20,730 15.2 15,367 12.3
Retail
Credit card . . . . . . . . . . . . . . . 13,520 7.3 10,956 7.1 8,670 6.0 7,137 5.2 6,603 5.3
Retail leasing . . . . . . . . . . . . . 5,126 2.8 5,969 3.9 6,960 4.9 7,338 5.4 7,166 5.7
Home equity and second
mortgages . . . . . . . . . . . . . 19,177 10.3 16,441 10.7 15,523 10.8 14,979 11.0 14,851 11.9
Other retail
Revolving credit . . . . . . . . . 3,205 1.7 2,731 1.8 2,563 1.8 2,504 1.8 2,541 2.0
Installment. . . . . . . . . . . . . 5,525 3.0 5,246 3.4 4,478 3.1 3,582 2.6 2,767 2.2
Automobile . . . . . . . . . . . . 9,212 5.0 8,970 5.8 8,693 6.1 8,112 6.0 7,419 5.9
Student . . . . . . . . . . . . . . . 4,603 2.5 451 .3 590 .4 675 .5 469 .4
Total other retail . . . . . . . 22,545 12.2 17,398 11.3 16,324 11.4 14,873 10.9 13,196 10.5
Total retail . . . . . . . . . . . . . 60,368 32.6 50,764 33.0 47,477 33.1 44,327 32.5 41,816 33.4
Total loans, excluding
covered assets . . . . . 173,779 93.8 153,827 100.0 143,597 100.0 136,462 100.0 124,941 100.0
Covered assets . . . . . . . . . . . . 11,450 6.2 – – – – – – – –
Total loans . . . . . . . . . . $185,229 100.0% $153,827 100.0% $143,597 100.0% $136,462 100.0% $124,941 100.0%