US Bank 2012 Annual Report Download - page 28

TABLE 3 Net Interest Income — Changes Due to Rate and Volume (a)
2012 v 2011 2011 v 2010
Year Ended December 31 (Dollars in Millions) Volume Yield/Rate Total Volume Yield/Rate Total
Increase (decrease) in
Interest Income
Investment securities .......................................... $ 275 $(316) $ (41) $ 586 $(369) $ 217
Loans held for sale ............................................ 122 (40) 82 (32) (14) (46)
Loans
Commercial ................................................. 369 (272) 97 193 (99) 94
Commercial real estate ..................................... 45 (29) 16 56 36 92
Residential mortgages ...................................... 318 (123) 195 311 (115) 196
Credit card .................................................. 54 101 155 (30) 52 22
Other retail .................................................. (14) (147) (161) 30 (137) (107)
Total loans, excluding covered loans ....................... 772 (470) 302 560 (263) 297
Covered loans .............................................. (179) 77 (102) (179) 122 (57)
Total loans ............................................... 593 (393) 200 381 (141) 240
Other earning assets .......................................... (52) 53 1 226 (142) 84
Total earning assets ...................................... 938 (696) 242 1,161 (666) 495
Interest Expense
Interest-bearing deposits
Interest checking ............................................ 4 (23) (19) 5 (17) (12)
Money market accounts .................................... 3 (17) (14) 18 (74) (56)
Savings accounts ........................................... 12 (58) (46) 33 (42) (9)
Time certificates of deposit less than $100,000 ............. (14) (28) (42) (25) 12 (13)
Time deposits greater than $100,000 ....................... 26 (54) (28) 25 (23) 2
Total interest-bearing deposits ........................... 31 (180) (149) 56 (144) (88)
Short-term borrowings ........................................ (38) (52) (90) (50) 31 (19)
Long-term debt ................................................ (117) (23) (140) 30 12 42
Total interest-bearing liabilities ........................... (124) (255) (379) 36 (101) (65)
Increase (decrease) in net interest income ..................... $1,062 $(441) $ 621 $1,125 $(565) $ 560
(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 2011 were $15.9 billion
(33.3 percent) higher than 2010, primarily due to planned
purchases of U.S. Treasury and government agency mortgage-
backed securities, as the Company increased its on-balance
sheet liquidity in response to anticipated regulatory
requirements.
Average total deposits for 2011 were $28.4 billion (15.4
percent) higher than 2010. Excluding deposits from
acquisitions, 2011 average total deposits increased $19.3
billion (10.5 percent) over 2010. Average noninterest-bearing
deposits in 2011 were $13.7 billion (34.1 percent) higher than
2010, primarily due to growth in Wholesale Banking and
Commercial Real Estate, and Wealth Management and
Securities Services balances. Average total savings deposits
were $13.8 billion (13.7 percent) higher in 2011, compared
with 2010, primarily due to growth in corporate and
institutional trust balances, as well as an increase in Consumer
and Small Business Banking balances. These increases were
partially offset by lower broker-dealer balances. Average time
certificates of deposit less than $100,000 were lower in 2011
by $1.4 billion (8.4 percent), compared with 2010, a result of
maturities and lower renewals. Average time deposits greater
than $100,000 were $2.3 billion (8.5 percent) higher in 2011,
compared with 2010, primarily due to acquisitions.
Provision for Credit Losses The provision for credit losses
reflects changes in the size and 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 2012, the provision for credit losses was $1.9 billion,
compared with $2.3 billion and $4.4 billion in 2011 and
2010, respectively. The provision for credit losses was lower
than net charge-offs by $215 million in 2012 and $500
million in 2011, and exceeded net charge-offs by $175 million
in 2010. The $461 million (19.7 percent) decrease in the
provision for credit losses in 2012, compared with 2011,
reflected improving credit trends and the underlying risk
profile of the loan portfolio as economic conditions continued
to slowly improve, partially offset by portfolio growth.
Accruing loans ninety days or more past due decreased by
$183 million (21.7 percent) (excluding covered loans) from
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