US Bank 2010 Annual Report Download - page 89

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Credit Quality The quality of the Company’s loan portfolios is assessed as a function of net credit losses, levels of
nonperforming assets and delinquencies, and credit quality ratings as defined by the Company. These credit quality ratings are
an important part of the Company’s overall credit risk management process and evaluation of its allowance for credit losses.
The following table provides a summary of loans by portfolio type, including the delinquency status of those loans that
continue to accrue interest, and those loans that are nonperforming:
December 31, 2010 (Dollars in Millions) Current
30-89 Days
Past Due
90 Days or
More Past Due Nonperforming Total
Accruing
Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 47,412 $ 325 $ 64 $ 597 $ 48,398
Commercial real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,986 415 1 1,293 34,695
Residential mortgages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,140 456 500 636 30,732
Credit card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,993 269 313 228 16,803
Other retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,706 404 216 65 48,391
Total loans, excluding covered loans . . . . . . . . . . . . . . . . . . . . . . . . . 173,237 1,869 1,094 2,819 179,019
Covered loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,951 757 1,090 1,244 18,042
Total loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $188,188 $2,626 $2,184 $4,063 $197,061
Total nonperforming assets include nonaccrual loans,
restructured loans not performing in accordance with
modified terms, other real estate and other nonperforming
assets owned by the Company. For details of the Company’s
nonperforming assets as of December 31, 2010 and 2009, see
Table 14 included in Management’s Discussion and Analysis
which is incorporated by reference into these Notes to
Consolidated Financial Statements.
The following table lists information related to nonperforming loans as of December 31:
(Dollars in Millions) 2010 2009
Loans on nonaccrual status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,150 $2,943
Restructured loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 669 492
Total nonperforming loans, excluding covered loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,819 3,435
Covered nonperforming loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,244 1,350
Total nonperforming loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,063 $4,785
Interest income that would have been recognized at original contractual terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 176 $ 468
Amount recognized as interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 299
Forgone revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 123 $ 169
The Company classifies its loan portfolios using internal credit quality ratings, as discussed in the Company’s significant
accounting policies in Note 1. The following table provides a summary of loans by portfolio type and the Company’s internal
credit quality rating:
December 31, 2010 (Dollars in Millions) Pass
Special
Mention Classified (a)
Total
Criticized Total
Criticized
Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 44,595 $1,545 $ 2,258 $ 3,803 $ 48,398
Commercial real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,155 1,540 5,000 6,540 34,695
Residential mortgages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,355 29 1,348 1,377 30,732
Credit card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,262 – 541 541 16,803
Other retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,906 70 415 485 48,391
Total loans, excluding covered loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166,273 3,184 9,562 12,746 179,019
Covered loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,073 283 686 969 18,042
Total loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $183,346 $3,467 $10,248 $13,715 $197,061
Total outstanding commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $370,031 $4,923 $11,576 $16,499 $386,530
(a) Classified rating on consumer loans is primarily based on delinquency status.
U.S. BANCORP 87