US Bank 2015 Annual Report Download - page 33

2015 from 2014 due to improvement in the residential
mortgages, and home equity and second mortgages
portfolios, as economic conditions continue to slowly improve
in 2015, partially offset by higher commercial loan net charge-
offs.
The $111 million (8.3 percent) decrease in the provision for
credit losses in 2014, compared with 2013, reflected
improving credit trends in residential mortgages and home
equity and second mortgages as economic conditions
improved during 2014, partially offset by portfolio growth and
higher commercial loan net charge-offs and lower commercial
real estate loan recoveries in 2014. Accruing loans ninety
days or more past due decreased by $244 million (20.5
percent) from December 31, 2013 to December 31, 2014,
primarily reflecting improvement in the residential mortgages
portfolio. Nonperforming assets decreased $229 million (11.2
percent) from December 31, 2013 to December 31, 2014,
primarily driven by reductions in the commercial, commercial
mortgage and construction and development portfolios, as
well as by improvement in credit card loans. Net charge-offs
decreased $131 million (8.9 percent) in 2014 from 2013 due
to the improvement in the residential mortgages and home
equity and second mortgages portfolios, reflecting improving
economic conditions, partially offset by higher commercial
loan net charge-offs and lower commercial real estate loan
recoveries in 2014.
Refer to “Corporate Risk Profile” for further information on
the provision for credit losses, net charge-offs, nonperforming
assets and other factors considered by the Company in
assessing the credit quality of the loan portfolio and
establishing the allowance for credit losses.
Noninterest Income Noninterest income in 2015 was
$9.1 billion, compared with $9.2 billion in 2014 and
$8.8 billion in 2013. The $72 million (0.8 percent) decrease in
2015 from 2014 reflected the 2014 Nuveen gain, lower gains
from Visa stock sales, the 2015 student loan market
adjustment and lower mortgage banking revenue, partially
offset by higher revenue in most other fee businesses and the
2015 HSA deposit sale gain. The decrease in mortgage
banking revenue in 2015 of 10.2 percent, compared with
2014, was primarily due to an unfavorable change in the
valuation of mortgage servicing rights (“MSRs”), net of
hedging activities, partially offset by an increase in mortgage
production volume. Credit and debit card revenue increased
4.8 percent in 2015 compared with 2014, due to higher
transaction volumes. Trust and investment management fees
increased 5.5 percent, reflecting the benefits of the
Company’s investments in its corporate trust and fund
services businesses, as well as account growth, improved
market conditions and lower fee waivers. Merchant
processing services revenue was 2.4 percent higher as a
result of higher transaction volumes, along with account
growth and equipment sales to merchants related to new chip
technology requirements. Adjusted for the impact of foreign
currency rate changes, the increase would have been
approximately 6.9 percent. In addition, treasury management
fees increased 2.9 percent in 2015 compared with 2014, due
to higher transaction volumes, and commercial products
revenue increased due to higher syndication and bond
underwriting fees and higher commercial leasing revenue,
partially offset by lower standby letter of credit fees.
TABLE 4 NONINTEREST INCOME
Year Ended December 31 (Dollars in Millions) 2015 2014 2013
2015
v 2014
2014
v 2013
Credit and debit card revenue ........................................... $1,070 $1,021 $ 965 4.8% 5.8%
Corporate payment products revenue ..................................... 708 724 706 (2.2) 2.5
Merchant processing services ........................................... 1,547 1,511 1,458 2.4 3.6
ATM processing services ............................................... 318 321 327 (.9) (1.8)
Trust and investment management fees ................................... 1,321 1,252 1,139 5.5 9.9
Deposit service charges ................................................ 702 693 670 1.3 3.4
Treasury management fees ............................................. 561 545 538 2.9 1.3
Commercial products revenue ........................................... 867 854 859 1.5 (.6)
Mortgage banking revenue .............................................. 906 1,009 1,356 (10.2) (25.6)
Investment products fees ............................................... 185 191 178 (3.1) 7.3
Securities gains (losses), net ............................................. – 3 9 * (66.7)
Other ............................................................... 907 1,040 569 (12.8) 82.8
Total noninterest income .............................................. $9,092 $9,164 $8,774 (.8)% 4.4%
* Not meaningful.
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