US Bank 2010 Annual Report Download - page 90

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A loan is considered to be impaired when, based on current events or information, it is probable the Company will be unable to
collect all amounts due per the contractual terms of the loan agreement. Impaired loans include certain nonaccrual commercial
loans, loans for which a charge-off has been recorded based upon the fair value of the underlying collateral and loans modified
as TDRs. Nonaccrual commercial lease financing loans of $78 million, $125 million and $102 million at December 31, 2010,
2009 and 2008, respectively, were excluded from impaired loans as commercial lease financing loans are accounted for under
authoritative accounting guidance for leases, and are excluded from the definition of an impaired loan under loan impairment
guidance. A summary of impaired loans, excluding covered loans, was as follows:
(Dollars in Millions)
Recorded
Investment
Valuation
Allowance
Recorded
Investment
Valuation
Allowance
Recorded
Investment
Valuation
Allowance
2010 2009 2008
Commercial and commercial real estate loans:
Period-end recorded investment
Nonaccrual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,812 $172 $2,639 $203 $1,364 $104
Restructured accruing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 5 145 2 152 10
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,904 $177 $2,784 $205 $1,516 $114
Average recorded investment . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,294 $2,559 $ 992
Interest income recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 7 5
Commitments to lend additional funds . . . . . . . . . . . . . . . . . . . . . 97 289 107
Residential mortgages and retail loans:
Period-end recorded investment
Nonaccrual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 929 $112 $ 671 $ 72 $ 302 $ 29
Restructured accruing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,115 472 1,649 339 1,072 208
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,044 $584 $2,320 $411 $1,374 $237
Average recorded investment . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,865 $2,148 $ 993
Interest income recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 106 67
Note: At December 31, 2010, all impaired loans had an associated allowance. At December 31, 2009 and 2008, all impaired loans, except for certain impaired commercial and
commercial real estate loans had an associated allowance. Impaired loan balances with no associated allowance at December 31, 2009 and 2008, were $1.0 billion and $514 million,
respectively.
Additional detail of impaired loans by portfolio type, excluding covered loans, for the year ended December 31, 2010, was as
follows:
(Dollars in Millions)
Period-end
Recorded
Investment
Unpaid
Principal
Balance
Valuation
Allowance
Average
Recorded
Investment
Interest
Income
Recognized
Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 596 $1,631 $ 59 $ 693 $ 8
Commercial real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,308 2,659 118 1,601 2
Residential mortgages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,440 2,877 334 2,297 72
Credit card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452 798 218 418 11
Other retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 189 32 150 6
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,948 $8,154 $761 $5,159 $99
Net gains on the sale of loans of $574 million,
$710 million and $220 million for the years ended
December 31, 2010, 2009 and 2008, respectively, were
included in noninterest income, primarily in mortgage
banking revenue.
The Company has an equity interest in a joint venture
that is accounted for utilizing the equity method. The
principal activities of this entity are to lend to entities that
develop land, and construct and sell residential homes. The
Company provides a warehousing line to this joint venture.
Warehousing advances to this joint venture are repaid when
the sale of loans is completed or the real estate is
permanently refinanced by others. At December 31, 2010
and 2009, the Company had $825 million and $890 million,
respectively, of outstanding advances to this joint venture.
These advances are included in commercial real estate loans.
88 U.S. BANCORP