US Bank 2009 Annual Report Download - page 40

Home equity and second mortgages
(Dollars in Millions) Lines Loans Total
Percent
of Total
Consumer Finance (a)
Less than or equal to 80%. . . . $ 857 $ 204 $ 1,061 42.8%
Over 80% through 90% . . . . . 395 175 570 23.0
Over 90% through 100% . . . . . 370 323 693 27.9
Over 100% . . . . . . . . . . . . . 61 95 156 6.3
Tot al .............. $ 1,683 $ 797 $ 2,480 100.0%
Other Retail
Less than or equal to 80%. . . . $11,702 $1,528 $13,230 78.0%
Over 80% through 90% . . . . . 1,922 522 2,444 14.4
Over 90% through 100% . . . . . 754 454 1,208 7.1
Over 100% . . . . . . . . . . . . . 51 26 77 .5
Tot al .............. $14,429 $2,530 $16,959 100.0%
Total Company
Less than or equal to 80%. . . . $12,559 $1,732 $14,291 73.5%
Over 80% through 90% . . . . . 2,317 697 3,014 15.5
Over 90% through 100% . . . . . 1,124 777 1,901 9.8
Over 100% . . . . . . . . . . . . . 112 121 233 1.2
Total. . . . . . . . . . . . . . . . $16,112 $3,327 $19,439 100.0%
(a) Consumer finance category included credit originated and managed by the consumer
finance division, as well as the majority of home equity and second mortgages with a
loan-to-value greater than 100 percent that were originated in the branches.
Note: Loan-to-values determined on original appraisal value of collateral and the current
amortized loan balance, or maximum of current commitment or current balance on lines.
Within the consumer finance division, at December 31,
2009 approximately $2.5 billion of residential mortgages
were to customers that may be defined as sub-prime
borrowers based on credit scores from independent credit
rating agencies at the time of loan origination, compared
with $2.9 billion at December 31, 2008.
The following table provides further information on
residential mortgages for the consumer finance division:
(Dollars in Millions)
Interest
Only Amortizing Total
Percent of
Division
Sub-Prime Borrowers
Less than or equal to 80% . . $ 6 $1,031 $ 1,037 10.1%
Over 80% through 90% .... 3 584 587 5.7
Over 90% through 100%.... 14 789 803 7.8
Over 100% ............ – 57 57 .6
Tot al .............. $ 23 $2,461 $ 2,484 24.2%
Other Borrowers
Less than or equal to 80% . . $1,234 $2,524 $ 3,758 36.6%
Over 80% through 90% .... 605 1,145 1,750 17.0
Over 90% through 100%.... 569 1,634 2,203 21.4
Over 100% ............ – 77 77 .8
Total ............... $2,408 $5,380 $ 7,788 75.8%
Tot al C on sum er
Finance .............
$2,431 $7,841 $10,272 100.0%
In addition to residential mortgages, at December 31, 2009,
the consumer finance division had $.6 billion of home equity
and second mortgage loans to customers that may be
defined as sub-prime borrowers, compared with $.7 billion
at December 31, 2008.
The following table provides further information on home
equity and second mortgages for the consumer finance
division:
(Dollars in Millions) Lines Loans Total
Percent
of Total
Sub-Prime Borrowers
Less than or equal to 80% . . . . . . $ 33 $123 $ 156 6.3%
Over 80% through 90% . . . . . . . . 41 109 150 6.1
Over 90% through 100% . . . . . . . 2 199 201 8.1
Over 100% . . . . . . . . . . . . . . . . 39 71 110 4.4
Tot al ................. $ 115 $502 $ 617 24.9%
Other Borrowers
Less than or equal to 80% . . . . . . $ 824 $ 81 $ 905 36.5%
Over 80% through 90% . . . . . . . . 354 66 420 16.9
Over 90% through 100% . . . . . . . 368 124 492 19.8
Over 100% . . . . . . . . . . . . . . . . 22 24 46 1.9
Tot al ................. $1,568 $295 $1,863 75.1%
Total Consumer Finance ..... $1,683 $797 $2,480 100.0%
The total amount of residential mortgage, home equity
and second mortgage loans, other than covered assets, to
customers that may be defined as sub-prime borrowers
represented only 1.1 percent of total assets at December 31,
2009, compared with 1.4 percent at December 31, 2008.
Covered assets include $2.2 billion in loans with
negative-amortization payment options at December 31,
2009, compared with $3.3 billion at December 31, 2008.
Other than covered assets, the Company does not have any
residential mortgages with payment schedules that would
cause balances to increase over time.
The retail loan portfolio principally reflects the
Company’s focus on consumers within its footprint of
branches and certain niche lending activities that are
nationally focused. Within the Company’s retail loan
portfolio, approximately 73.4 percent of the credit card
balances relate to cards originated through the bank
branches or co-branded and affinity programs that generally
experience better credit quality performance than portfolios
generated through other channels.
Table 9 provides a geographical summary of the
residential mortgage and retail loan portfolios.
Loan Delinquencies Trends in delinquency ratios are an
indicator, among other considerations, of credit risk within
the Company’s loan portfolios. The entire balance of an
account is considered delinquent if the minimum payment
contractually required to be made is not received by the
specified date on the billing statement. The Company
measures delinquencies, both including and excluding
nonperforming loans, to enable comparability with other
companies. Delinquent loans purchased from Government
National Mortgage Association (“GNMA”) mortgage pools,
38 U.S. BANCORP