US Bank 2013 Annual Report Download - page 48

TABLE 17 Net Charge-offs as a Percent of Average Loans Outstanding
Year Ended December 31 2013 2012 2011 2010 2009
Commercial
Commercial .............................................................................. .19% .43% .76% 1.80% 1.60%
Lease financing .......................................................................... .06 .63 .96 1.47 2.82
Total commercial ...................................................................... .18 .45 .79 1.76 1.75
Commercial Real Estate
Commercial mortgages .................................................................. .08 .37 .73 1.23 .42
Construction and development ........................................................... (.87) .86 4.20 6.32 5.35
Total commercial real estate ........................................................... (.09) .45 1.40 2.47 1.82
Residential Mortgages ............................................................... .57 1.09 1.45 1.97 2.00
Credit Card (a) .......................................................................... 3.90 4.01 5.19 7.32 6.90
Other Retail
Retail leasing ............................................................................. .02 .04 – .27 .74
Home equity and second mortgages .................................................... 1.33 1.72 1.66 1.72 1.75
Other ..................................................................................... .81 .94 1.20 1.68 1.85
Total other retail ........................................................................ .89 1.13 1.25 1.56 1.69
Total loans, excluding covered loans ............................................... .66 1.03 1.53 2.41 2.23
Covered Loans .......................................................................... .32 .08 .07 .09 .09
Total loans .......................................................................... .64% .97% 1.41% 2.17% 2.08%
(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 3.92 percent,
4.16 percent, 5.36 percent, 7.99 percent and 7.14 percent for the years ended December 31, 2013, 2012, 2011, 2010 and 2009, respectively.
Analysis of Loan Net Charge-offs Total loan net charge-
offs were $1.5 billion in 2013, compared with $2.1 billion in
2012 and $2.8 billion in 2011. The ratio of total loan net
charge-offs to average loans was .64 percent in 2013,
compared with .97 percent in 2012 and 1.41 percent in
2011. The decrease in total net charge-offs in 2013,
compared with 2012, primarily reflected improvement in the
commercial, commercial real estate, residential mortgages
and home equity and second mortgages portfolios, as
economic conditions continue to slowly improve.
Commercial and commercial real estate loan net
charge-offs for 2013 were $87 million (.08 percent of average
loans outstanding), compared with $441 million (.45 percent
of average loans outstanding) in 2012 and $904 million
(1.04 percent of average loans outstanding) in 2011. The
decrease in net charge-offs in 2013, compared with 2012,
reflected the impact of more stable economic conditions and
a higher level of recoveries. The decrease in net charge-offs
in 2012, compared with 2011, reflected the Company’s
efforts to resolve and reduce exposure to problem assets in
its commercial real estate portfolios and improvement in its
other commercial portfolios due to improvement in the
economy.
Residential mortgage loan net charge-offs for 2013 were
$272 million (.57 percent of average loans outstanding),
compared with $438 million (1.09 percent of average loans
outstanding) in 2012 and $489 million (1.45 percent of
average loans outstanding) in 2011. Credit card loan net
charge-offs in 2013 were $656 million (3.90 percent of
average loans outstanding), compared with $667 million
(4.01 percent of average loans outstanding) in 2012 and
$834 million (5.19 percent of average loans outstanding) in
2011. Other retail loan net charge-offs for 2013 were
$418 million (.89 percent of average loans outstanding),
compared with $541 million (1.13 percent of average loans
outstanding) in 2012 and $604 million (1.25 percent of
average loans outstanding) in 2011. The decrease in total
residential mortgage, credit card and other retail loan net
charge-offs in 2013, compared with 2012, reflected the
impact of more stable economic conditions. 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 incremental charge-offs in the residential mortgages and
other retail loan portfolios recorded in 2012 related to
regulatory clarification on bankruptcy loans.
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