US Bank 2010 Annual Report Download - page 81

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The new guidance replaces the previous quantitative-based
risks and rewards calculation for determining whether an
entity must consolidate a VIE with an assessment of whether
the entity has both (i) the power to direct the activities of
the VIE that most significantly impact the VIE’s economic
performance and (ii) the obligation to absorb losses of the
VIE or the right to receive benefits from the VIE that could
potentially be significant to the VIE. This guidance requires
reconsideration of whether an entity is a VIE upon
occurrence of certain events, as well as ongoing assessments
of whether a variable interest holder is the primary
beneficiary of a VIE. The Company consolidated
approximately $1.6 billion of assets of previously
unconsolidated entities, and deconsolidated approximately
$84 million of assets of previously consolidated entities upon
adoption of this guidance. Additionally, the adoption of this
guidance reduced total equity by $89 million.
Note 3 BUSINESS COMBINATIONS
AND DIVESTITURES
In 2009, the Company acquired the banking operations of
First Bank of Oak Park Corporation (“FBOP”) in an FDIC
assisted transaction, and in 2008 the Company acquired the
banking operations of Downey Savings and Loan
Association, F.A. and PFF Bank and Trust (“Downey” and
“PFF”, respectively) in FDIC assisted transactions. Through
these acquisitions, the Company increased its deposit base
and branch franchise. The Company acquired approximately
$18.0 billion of assets in the FBOP acquisition and
approximately $17.4 billion of assets in the Downey and
PFF acquisitions, most of which are covered under loss
sharing agreements with the FDIC. Under the terms of the
loss sharing agreements, the FDIC will reimburse the
Company for most of the losses on the covered assets.
In 2010, the Company acquired the securitization trust
administration business of Bank of America, N.A. This
transaction included the acquisition of $1.1 trillion of assets
under administration and provided the Company with
approximately $8 billion of deposits as of December 31,
2010.
During 2010, the Company exchanged the long-term
asset management business of U.S. Bancorp Asset
Management (formerly FAF Advisors, Inc.), an affiliate of
the Company, for cash consideration and a 9.5 percent
equity interest in Nuveen Investments. The Company
recorded a $103 million gain ($41 million after tax) related
to this transaction. The Company will retain all other
products and services previously offered by U.S. Bancorp
Asset Management.
Note 4 RESTRICTIONS ON CASH AND
DUE FROM BANKS
The Federal Reserve Bank requires bank subsidiaries to
maintain minimum average reserve balances. The amount of
those reserve balances were approximately $1.2 billion at
December 31, 2010 and 2009.
U.S. BANCORP 79