US Bank 2012 Annual Report Download - page 66

TABLE 24 Line of Business Financial Performance
Wholesale Banking and
Commercial Real Estate
Consumer and Small
Business Banking
Year Ended December 31
(Dollars in Millions) 2012 2011
Percent
Change 2012 2011
Percent
Change
Condensed Income Statement
Net interest income (taxable-equivalent basis) ...................... $ 2,099 $ 2,123 (1.1)% $ 4,731 $ 4,599 2.9%
Noninterest income .................................................. 1,224 1,222 .2 3,567 2,745 29.9
Securities gains (losses), net ........................................ – – – – – –
Total net revenue ................................................. 3,323 3,345 (.7) 8,298 7,344 13.0
Noninterest expense ................................................ 1,266 1,254 1.0 4,986 4,651 7.2
Other intangibles .................................................... 16 16 – 52 75 (30.7)
Total noninterest expense ........................................ 1,282 1,270 .9 5,038 4,726 6.6
Income before provision and income taxes ......................... 2,041 2,075 (1.6) 3,260 2,618 24.5
Provision for credit losses ........................................... 1 424 (99.8) 1,160 1,391 (16.6)
Income before income taxes ........................................ 2,040 1,651 23.6 2,100 1,227 71.1
Income taxes and taxable-equivalent adjustment ................... 743 600 23.8 765 446 71.5
Net income .......................................................... 1,297 1,051 23.4 1,335 781 70.9
Net (income) loss attributable to noncontrolling interests ........... – 4 * (1) (1) –
Net income attributable to U.S. Bancorp ............................ $ 1,297 $ 1,055 22.9 $ 1,334 $ 780 71.0
Average Balance Sheet
Commercial ......................................................... $45,171 $37,396 20.8% $ 8,218 $ 7,391 11.2%
Commercial real estate .............................................. 19,658 19,293 1.9 16,135 15,539 3.8
Residential mortgages ............................................... 59 67 (11.9) 39,826 33,248 19.8
Credit card .......................................................... – – – – – –
Other retail........................................................... 7 5 40.0 45,596 45,760 (.4)
Total loans, excluding covered loans ............................. 64,895 56,761 14.3 109,775 101,938 7.7
Covered loans ....................................................... 914 1,493 (38.8) 7,523 8,405 (10.5)
Total loans ........................................................ 65,809 58,254 13.0 117,298 110,343 6.3
Goodwill ............................................................. 1,604 1,604 – 3,516 3,520 (.1)
Other intangible assets .............................................. 36 52 (30.8) 1,787 2,043 (12.5)
Assets ............................................................... 71,698 64,088 11.9 134,372 124,399 8.0
Noninterest-bearing deposits........................................ 31,102 25,183 23.5 20,510 17,941 14.3
Interest checking .................................................... 10,343 12,687 (18.5) 29,947 26,620 12.5
Savings products .................................................... 9,362 9,371 (.1) 43,431 40,555 7.1
Time deposits ....................................................... 17,161 14,523 18.2 23,838 24,446 (2.5)
Total deposits ..................................................... 67,968 61,764 10.0 117,726 109,562 7.5
Total U.S. Bancorp shareholders’ equity ............................ 6,440 5,582 15.4 11,279 9,433 19.6
* Not meaningful
capital allocated to each business line includes credit and
operational capital allocations following a Basel II regulatory
framework. Interest income and expense is determined based
on the assets and liabilities managed by the business line.
Because funding and asset liability management is a central
function, funds transfer-pricing methodologies are utilized to
allocate a cost of funds used or credit for funds provided to all
business line assets and liabilities, respectively, using a
matched funding concept. Also, each business unit is allocated
the taxable-equivalent benefit of tax-exempt products. The
residual effect on net interest income of asset/liability
management activities is included in Treasury and Corporate
Support. Noninterest income and expenses directly managed
by each business line, including fees, service charges, salaries
and benefits, and other direct revenues and costs are
accounted for within each segment’s financial results in a
manner similar to the consolidated financial statements.
Occupancy costs are allocated based on utilization of facilities
by the lines of business. Generally, operating losses are
charged to the line of business when the loss event is realized
in a manner similar to a loan charge-off. Noninterest expenses
incurred by centrally managed operations or business lines
that directly support another business line’s operations are
charged to the applicable business line based on its utilization
of those services, primarily measured by the volume of
customer activities, number of employees or other relevant
factors. These allocated expenses are reported as net shared
services expense within noninterest expense. Certain activities
that do not directly support the operations of the lines of
business or for which the lines of business are not considered
62 U.S. BANCORP