US Bank 2014 Annual Report Download - page 101

less than par, and the Company did not pay significant
purchase premiums for these investment securities. At
December 31, 2014, the Company had no plans to sell
investment securities with unrealized losses, and believes it is
more likely than not it would not be required to sell such
investment securities before recovery of their amortized cost.
NOTE 6 LOANS AND ALLOWANCE FOR CREDIT LOSSES
The composition of the loan portfolio at December 31, disaggregated by class and underlying specific portfolio type, was as
follows:
(Dollars in Millions) 2014 2013
Commercial
Commercial ..................................................................................................... $ 74,996 $ 64,762
Lease financing .................................................................................................. 5,381 5,271
Total commercial ............................................................................................. 80,377 70,033
CommercialRealEstate
Commercial mortgages.......................................................................................... 33,360 32,183
Construction and development .................................................................................. 9,435 7,702
Total commercial real estate.................................................................................. 42,795 39,885
Residential Mortgages
Residential mortgages ........................................................................................... 38,598 37,545
Home equity loans, first liens .................................................................................... 13,021 13,611
Total residential mortgages ................................................................................... 51,619 51,156
Credit Card ................................................................................................. 18,515 18,021
Other Retail
Retail leasing .................................................................................................... 5,871 5,929
Home equity and second mortgages ............................................................................. 15,916 15,442
Revolving credit.................................................................................................. 3,309 3,276
Installment ...................................................................................................... 6,242 5,709
Automobile ...................................................................................................... 14,822 13,743
Student .......................................................................................................... 3,104 3,579
Total other retail .............................................................................................. 49,264 47,678
Total loans, excluding covered loans ....................................................................... 242,570 226,773
Covered Loans.............................................................................................. 5,281 8,462
Total loans ................................................................................................. $247,851 $235,235
The Company had loans of $79.8 billion at December 31,
2014, and $77.2 billion at December 31, 2013, pledged at the
Federal Home Loan Bank (“FHLB”), and loans of $61.8 billion
at December 31, 2014, and $53.0 billion at December 31,
2013, pledged at the Federal Reserve Bank.
The majority of the Company’s loans are to borrowers in
the states in which it has Consumer and Small Business
Banking offices. Collateral for commercial loans may include
marketable securities, accounts receivable, inventory and
equipment. For details of the Company’s commercial portfolio
by industry group and geography as of December 31, 2014 and
2013, see Table 7 included in Management’s Discussion and
Analysis which is incorporated by reference into these Notes to
Consolidated Financial Statements.
For detail of the Company’s commercial real estate
portfolio by property type and geography as of December 31,
2014 and 2013, see Table 8 included in Management’s
Discussion and Analysis which is incorporated by reference
into these Notes to Consolidated Financial Statements. Such
loans are collateralized by the related property. The
Company has an equity interest in a joint venture, that it
accounts for under the equity method, whose principal
activities are to lend to entities that develop land, and
construct and sell residential homes. The Company provides
a warehousing line to this joint venture. Warehousing
advances to this joint venture are repaid when the sale of
loans is completed or the real estate is permanently
refinanced by others. At December 31, 2014 and 2013, the
Company had $135 million and $205 million, respectively, of
outstanding advances to this joint venture. These advances
are included in commercial real estate loans.
Originated loans are reported at the principal amount
outstanding, net of unearned interest and deferred fees and
costs. Net unearned interest and deferred fees and costs
amounted to $574 million at December 31, 2014, and
$556 million at December 31, 2013. All purchased loans and
related indemnification assets are recorded at fair value at the
date of purchase. The Company evaluates purchased loans for
impairment at the date of purchase in accordance with
applicable authoritative accounting guidance. Purchased loans
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