US Bank 2011 Annual Report Download - page 24

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TABLE 3 Net Interest Income — Changes Due to Rate and Volume (a)
2011 v 2010 2010 v 2009
Year Ended December 31 (Dollars in Millions) Volume Yield/Rate Total Volume Yield/Rate Total
Increase (decrease) in
Interest Income
Investment securities ..................................... $ 586 $(369) $ 217 $ 205 $(212) $ (7)
Loans held for sale ....................................... (32) (14) (46) (10) (21) (31)
Loans
Commercial loans ..................................... 193 (99) 94 (228) 131 (97)
Commercial real estate ................................ 56 36 92 22 55 77
Residential mortgages ................................. 311 (115) 196 182 (126) 56
Credit card ............................................. (30) 52 22 134 19 153
Other retail ............................................. 30 (137) (107) 35 (41) (6)
Total loans, excluding covered loans .................. 560 (263) 297 145 38 183
Covered loans ......................................... (179) 122 (57) 327 80 407
Total loans .......................................... 381 (141) 240 472 118 590
Other earning assets ..................................... 226 (142) 84 89 (14) 75
Total earning assets................................. 1,161 (666) 495 756 (129) 627
Interest Expense
Interest-bearing deposits .................................
Interest checking ...................................... 5 (17) (12) 7 (8) (1)
Money market accounts ............................... 18 (74) (56) 36 (49) (13)
Savings accounts ...................................... 33 (42) (9) 42 8 50
Time certificates of deposit less than $100,000 ....... (25) 12 (13) (32) (126) (158)
Time deposits greater than $100,000 .................. 25 (23) 2 (46) (106) (152)
Total interest-bearing deposits...................... 56 (144) (88) 7 (281) (274)
Short-term borrowings ................................... (50) 31 (19) 86 (81) 5
Long-term debt........................................... 30 12 42 (199) 23 (176)
Total interest-bearing liabilities ...................... 36 (101) (65) (106) (339) (445)
Increase (decrease) in net interest income ............... $1,125 $(565) $ 560 $ 862 $ 210 $1,072
(a) This table shows the components of the change in net interest income by volume and rate on a taxable-equivalent basis utilizing a tax rate of 35 percent. This table does not take into account
the level of noninterest-bearing funding, nor does it fully reflect changes in the mix of assets and liabilities. The change in interest not solely due to changes in volume or rates has been allocated
on a pro-rata basis to volume and yield/rate.
Average investment securities in 2010 were $5.0 billion
(11.6 percent) higher than 2009, primarily due to purchases of
U.S. Treasury and government agency mortgage-backed
securities and the consolidation of $.6 billion of
held-to-maturity securities held in a variable interest entity
(“VIE”) due to the adoption of new authoritative accounting
guidance effective January 1, 2010.
Average total deposits for 2010 were $16.9 billion (10.1
percent) higher than 2009. Of this increase, $12.0 billion
related to deposits assumed in a fourth quarter of 2009
acquisition. Average noninterest-bearing deposits in 2010
were $2.3 billion (6.1 percent) higher than 2009, primarily
due to growth in Consumer and Small Business Banking and
Wholesale Banking and Commercial Real Estate balances.
Average total savings deposits were $19.0 billion (23.2
percent) higher in 2010, compared with 2009, due to an
increase in savings account balances of $7.8 billion (59.5
percent) resulting from strong participation in a product
offered by Consumer and Small Business Banking, higher
money market savings balances of $7.9 billion (24.8 percent)
from higher corporate trust and Consumer and Small Business
Banking balances, and higher interest checking account
balances of $3.3 billion (9.0 percent) resulting from increases
in Consumer and Small Business Banking and institutional
trust accounts. Average time certificates of deposit less than
$100,000 were lower in 2010 by $1.3 billion (7.0 percent),
compared with 2009, reflecting the run-off of previously
acquired balances and lower renewals. Average time deposits
greater than $100,000 were $3.1 billion (10.3 percent) lower
in 2010, compared with 2009, reflecting the net impact of
acquisitions, more than offset by a decrease in required overall
wholesale funding.
Provision for Credit Losses The provision for credit losses
reflects changes in the credit quality of the entire portfolio of
loans. The Company maintains an allowance for credit losses
considered appropriate by management for probable and
estimable incurred losses, based on factors discussed in the
“Analysis and Determination of Allowance for Credit Losses”
section.
In 2011, the provision for credit losses was $2.3 billion,
compared with $4.4 billion and $5.6 billion in 2010 and
22 U.S. BANCORP