US Bank 2012 Annual Report Download - page 51

TABLE 17 Net Charge-Offs as a Percent of Average Loans Outstanding
Year Ended December 31 2012 2011 2010 2009 2008
Commercial
Commercial .............................................................................. .43% .76% 1.80% 1.60% .53%
Lease financing ........................................................................... .63 .96 1.47 2.82 1.36
Total commercial ...................................................................... .45 .79 1.76 1.75 .63
CommercialRealEstate
Commercial mortgages .................................................................. .37 .73 1.23 .42 .15
Construction and development........................................................... .86 4.20 6.32 5.35 1.48
Total commercial real estate ........................................................... .45 1.40 2.47 1.82 .55
Residential Mortgages ..................................................................... 1.09 1.45 1.97 2.00 1.01
Credit Card (a).............................................................................. 4.01 5.19 7.32 6.90 4.73
Other Retail
Retail leasing ............................................................................. .04 – .27 .74 .65
Home equity and second mortgages ..................................................... 1.72 1.66 1.72 1.75 1.01
Other ..................................................................................... .94 1.20 1.68 1.85 1.39
Total other retail ....................................................................... 1.13 1.25 1.56 1.69 1.15
Total loans, excluding covered loans ............................................... 1.03 1.53 2.41 2.23 1.10
Covered Loans ......................................................................... .08 .07 .09 .09 .38
Total loans .......................................................................... .97% 1.41% 2.17% 2.08% 1.10%
(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 4.16 percent, 5.36
percent, 7.99 percent and 7.14 percent for the years ended December 31, 2012, 2011, 2010 and 2009, respectively.
Analysis of Loan Net Charge-offs Total loan net charge-offs
were $2.1 billion in 2012, compared with $2.8 billion in 2011
and $4.2 billion in 2010. The ratio of total loan net charge-
offs to average loans was .97 percent in 2012, compared with
1.41 percent in 2011 and 2.17 percent in 2010. The decrease
in total net charge-offs in 2012, compared with 2011, was due
to improvement in most loan categories as economic
conditions continued to slowly improve.
Commercial and commercial real estate loan net charge-
offs for 2012 were $441 million (.45 percent of average loans
outstanding), compared with $904 million (1.04 percent of
average loans outstanding) in 2011 and $1.7 billion
(2.06 percent of average loans outstanding) in 2010. The
decrease in net charge-offs in 2012, compared with 2011,
reflected the Company’s continued efforts to resolve and
reduce exposure to problem assets in its commercial real
estate portfolios and improvement in its other commercial
portfolios due to the continued improvement in the economy.
The decrease in net charge-offs in 2011, compared with 2010,
also reflected efforts to reduce exposure to problem assets in
the Company’s commercial real estate portfolios and
improvement in the other commercial portfolios.
Residential mortgage loan net charge-offs for 2012 were
$438 million (1.09 percent of average loans outstanding),
compared with $489 million (1.45 percent of average loans
outstanding) in 2011 and $546 million (1.97 percent of
average loans outstanding) in 2010. Credit card loan net
charge-offs in 2012 were $667 million (4.01 percent of
average loans outstanding), compared with $834 million
(5.19 percent of average loans outstanding) in 2011 and
$1.2 billion (7.32 percent of average loans outstanding) in
2010. Other retail loan net charge-offs for 2012 were
$541 million (1.13 percent of average loans outstanding),
compared with $604 million (1.25 percent of average loans
outstanding) in 2011 and $745 million (1.56 percent of
average loans outstanding) in 2010. The decrease in total
residential mortgage, credit card and other retail loan net
charge-offs in 2012, compared with 2011, reflected the impact
of more stable economic conditions, partially offset by current
year incremental charge-offs in the residential mortgages and
other retail loan portfolios related to regulatory clarification
on bankruptcy loans. The decrease in total residential
mortgage, credit card and other retail loan net charge-offs in
2011, compared with 2010, reflected the impact of more
stable economic conditions.
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