US Bank 2012 Annual Report Download - page 141

that could be satisfied under various loan modification
programs (in addition to the programs the Company already
has in place). The Company has a $130 million accrued
liability with respect to these and related matters.
During the second quarter of 2011, the Company and its
two primary banking subsidiaries entered into Consent Orders
with U.S. federal banking regulators regarding the Company’s
residential mortgage servicing and foreclosure processes. On
January 7, 2013, U.S. federal banking regulators announced a
settlement agreement had been reached with the Company
and other financial institutions relating to certain portions of
the Consent Orders. In conjunction with the settlement, the
Company agreed to pay $80 million, which it has accrued, to
be distributed to borrowers, in a manner to be determined by
the regulators. The Company also agreed to make certain
concessions to borrowers, including potential principal
forgiveness, short sale approvals and loan modifications. The
impact of these concessions is reflected in the Company’s
allowance for loan losses and discounts on acquired loans.
The Company is currently subject to other investigations
and examinations by government agencies concerning
mortgage-related practices, including those related to Federal
Housing Administration insured residential home loans.
Other The Company is subject to various other litigation,
investigations and legal and administrative cases and
proceedings that arise in the ordinary course of its businesses.
Due to their complex nature, it may be years before some
matters are resolved. While it is impossible to ascertain the
ultimate resolution or range of financial liability with respect
to these contingent matters, the Company believes that the
aggregate amount of such liabilities will not have a material
adverse effect on the financial condition, results of operations
or cash flows of the Company.
NOTE 22 U.S. Bancorp (Parent Company)
Condensed Balance Sheet
At December 31 (Dollars in Millions) 2012 2011
Assets
Due from banks, principally interest-bearing ........................................................................... $ 3,630 $ 4,728
Available-for-sale securities ............................................................................................ 425 1,166
Investments in bank subsidiaries ...................................................................................... 38,007 33,179
Investments in nonbank subsidiaries ................................................................................... 1,445 1,321
Advances to bank subsidiaries ......................................................................................... 6,173 6,094
Advances to nonbank subsidiaries ..................................................................................... 1,404 1,190
Other assets ........................................................................................................... 1,550 1,481
Total assets ......................................................................................................... $52,634 $49,159
Liabilities and Shareholders’ Equity
Short-term funds borrowed ............................................................................................ $ 134 $ 29
Long-term debt ........................................................................................................ 12,772 14,593
Other liabilities ......................................................................................................... 730 559
Shareholders’ equity ................................................................................................... 38,998 33,978
Total liabilities and shareholders’ equity ............................................................................. $52,634 $49,159
Condensed Statement of Income
Year Ended December 31 (Dollars in Millions) 2012 2011 2010
Income
Dividends from bank subsidiaries .......................................................................... $ 250 $1,500 $ –
Dividends from nonbank subsidiaries ...................................................................... 4 7 3
Interest from subsidiaries ................................................................................... 96 101 109
Other income ............................................................................................... 149 134 105
Total income ............................................................................................. 499 1,742 217
Expense
Interest on short-term funds borrowed ..................................................................... 1 1 1
Interest on long-term debt .................................................................................. 392 424 366
Other expense .............................................................................................. 122 79 80
Total expense ............................................................................................ 515 504 447
Income before income taxes and equity in undistributed income of subsidiaries .......................... (16) 1,238 (230)
Applicable income taxes ................................................................................... (85) (83) (70)
Income of parent company ................................................................................. 69 1,321 (160)
Equity in undistributed income of subsidiaries ............................................................. 5,578 3,551 3,477
Net income attributable to U.S. Bancorp ................................................................ $5,647 $4,872 $3,317
U.S. BANCORP 137