US Bank 2011 Annual Report Download - page 46

Download and view the complete annual report

Please find page 46 of the 2011 US Bank annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 149

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149

TABLE 17 Net Charge-Offs as a Percent of Average Loans Outstanding
Year Ended December 31 2011 2010 2009 2008 2007
Commercial
Commercial .............................................................................. .76% 1.80% 1.60% .53% .24%
Lease financing ........................................................................... .96 1.47 2.82 1.36 .61
Total commercial ...................................................................... .79 1.76 1.75 .63 .29
Commercial Real Estate
Commercial mortgages .................................................................. .73 1.23 .42 .15 .06
Construction and development........................................................... 4.20 6.32 5.35 1.48 .11
Total commercial real estate ........................................................... 1.40 2.47 1.82 .55 .08
Residential Mortgages .................................................................. 1.45 1.97 2.00 1.01 .28
Credit Card (a) ............................................................................ 5.19 7.32 6.90 4.73 3.34
Other Retail
Retail leasing ............................................................................. — .27 .74 .65 .25
Home equity and second mortgages ..................................................... 1.66 1.72 1.75 1.01 .46
Other ..................................................................................... 1.20 1.68 1.85 1.39 .96
Total other retail ....................................................................... 1.25 1.56 1.69 1.15 .64
Total loans, excluding covered loans ............................................... 1.53 2.41 2.23 1.10 .54
Covered Loans............................................................................ .07 .09 .09 .38 —
Total loans .......................................................................... 1.41% 2.17% 2.08% 1.10% .54%
(a) Net charge-off as a percent of average loans outstanding, excluding portfolio purchases where the acquired loans were recorded at fair value at the purchase date, were 5.36 percent, 7.99
percent and 7.14 percent for the years ended December 31, 2011, 2010 and 2009, respectively.
The following table provides an analysis of OREO, excluding
covered assets, as a percent of their related loan balances,
including geographical location detail for residential
(residential mortgage, home equity and second mortgage) and
commercial (commercial and commercial real estate) loan
balances:
At December 31,
(Dollars in Millions)
Amount
As a Percent of Ending
Loan Balances
2011 2010 2011 2010
Residential
Minnesota .......... $ 22 $ 28 .39% .53%
California ........... 16 21 .22 .34
Illinois .............. 10 16 .31 .57
Colorado ........... 10 9 .27 .27
Missouri ............ 7 10 .26 .39
All other states ..... 86 134 .26 .46
Total
residential ..... 151 218 .27 .44
Commercial
Nevada ............. 44 58 3.13 3.93
California ........... 26 23 .18 .18
Connecticut ........ 25 — 4.78 —
Ohio ................ 18 20 .38 .48
Arizona ............. 16 14 1.41 1.50
All other states ..... 124 178 .18 .28
Total
commercial . . . 253 293 .27 .35
Total OREO . . . $404 $511 .21% .29%
Analysis of Loan Net Charge-Offs Total loan net charge-offs
were $2.8 billion in 2011, compared with $4.2 billion in 2010
and $3.9 billion in 2009. The ratio of total loan net charge-
offs to average loans was 1.41 percent in 2011, compared
with 2.17 percent in 2010 and 2.08 percent in 2009. The
decrease in total net charge-offs in 2011, compared with
2010, was principally due to stabilizing economic conditions.
Total net charge-offs peaked for the Company in the first
quarter of 2010 and have trended lower since.
Commercial and commercial real estate loan net charge-
offs for 2011 were $904 million (1.04 percent of average
loans outstanding), compared with $1.7 billion (2.06 percent
of average loans outstanding) in 2010 and $1.5 billion
(1.78 percent of average loans outstanding) in 2009. The
decrease in net charge-offs in 2011, compared with 2010,
reflected the impact of efforts to resolve and reduce exposure
to problem assets in the Company’s commercial real estate
portfolios and improvement in the other commercial
portfolios due to the stabilizing economy. The increase in net
charge-offs in 2010, compared with 2009, reflected the
weakening economy and rising unemployment throughout
most of 2009, which affected the residential housing markets,
including homebuilding and related industries, commercial
real estate properties and other commercial loans.
Residential mortgage loan net charge-offs for 2011 were
$489 million (1.45 percent of average loans outstanding),
compared with $546 million (1.97 percent of average loans
outstanding) in 2010 and $489 million (2.00 percent of
average loans outstanding) in 2009. Credit card loan net
charge-offs for 2011 were $834 million (5.19 percent of
average loans outstanding), compared with $1.2 billion
(7.32 percent of average loans outstanding) in 2010 and
$1.0 billion (6.90 percent of average loans outstanding) in
44 U.S. BANCORP