US Bank 2013 Annual Report Download - page 26

TABLE 3 Net Interest Income — Changes Due to Rate and Volume (a)
2013 v 2012 2012 v 2011
Year Ended December 31 (Dollars in Millions) Volume Yield/Rate Total Volume Yield/Rate Total
Increase (decrease) in
Interest Income
Investment securities ...................................... $ 68 $(240) $(172) $ 275 $(316) $ (41)
Loans held for sale ........................................ (76) (3) (79) 122 (40) 82
Loans
Commercial ............................................. 229 (229) – 369 (272) 97
Commercial real estate ................................. 78 (127) (49) 45 (29) 16
Residential mortgages .................................. 348 (216) 132 318 (123) 195
Credit card ............................................. 16 (18) (2) 54 101 155
Other retail .............................................. (42) (128) (170) (14) (147) (161)
Total loans, excluding covered loans ................ 629 (718) (89) 772 (470) 302
Covered loans .......................................... (196) 13 (183) (179) 77 (102)
Total loans ........................................... 433 (705) (272) 593 (393) 200
Other earning assets ...................................... (87) 11 (76) (52) 53 1
Total earning assets.................................. 338 (937) (599) 938 (696) 242
Interest Expense
Interest-bearing deposits
Interest checking ....................................... 3 (13) (10) 4 (23) (19)
Money market savings .................................. 11 3 14 3 (17) (14)
Savings accounts ....................................... 5 (22) (17) 12 (58) (46)
Time certificates of deposit less than $100,000 ........ (29) (33) (62) (14) (28) (42)
Time deposits greater than $100,000 ................... 3 (58) (55) 26 (54) (28)
Total interest-bearing deposits ....................... (7) (123) (130) 31 (180) (149)
Short-term borrowings ..................................... (14) (76) (90) (38) (52) (90)
Long-term debt ............................................ (253) 15 (238) (117) (23) (140)
Total interest-bearing liabilities ....................... (274) (184) (458) (124) (255) (379)
Increase (decrease) in net interest income ................ $ 612 $(753) $(141) $1,062 $(441) $ 621
(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 total deposits for 2012 were $22.6 billion (10.6
percent) higher than 2011. Average noninterest-bearing
deposits in 2012 were $13.4 billion (24.9 percent) higher
than 2011 due to growth in average balances in a majority of
the lines of business, including Wholesale Banking and
Commercial Real Estate, Wealth Management and Securities
Services, and Consumer and Small Business Banking.
Average total savings deposits were $7.3 billion
(6.4 percent) higher in 2012, compared with 2011, primarily
due to growth in Consumer and Small Business Banking
balances resulting from strong participation in a consumer
savings product offering, and higher corporate trust
balances. These increases were partially offset by lower
government banking and broker-dealer balances. Average
time certificates of deposit less than $100,000 were lower in
2012 by $728 million (4.8 percent), compared with 2011, a
result of maturities and lower renewals. Average time
deposits greater than $100,000 were $2.6 billion
(8.8 percent) higher in 2012, compared with 2011.
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 2013, the provision for credit losses was $1.3 billion,
compared with $1.9 billion and $2.3 billion in 2012 and 2011,
respectively. The provision for credit losses was lower than
net charge-offs by $125 million in 2013, $215 million in 2012
and $500 million in 2011. The $542 million (28.8 percent)
decrease in the provision for credit losses in 2013,
compared with 2012, 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 increased by $53 million (8.0 percent) (excluding
covered loans) from December 31, 2012 to December 31,
2013, primarily reflecting an increase in restructured
residential mortgages in trial period arrangements.
Nonperforming assets decreased $275 million (13.2 percent)
(excluding covered assets) from December 31, 2012 to
24 U.S. BANCORP