22 |
||||||
TABLE 1 |
Selected Financial Data |
Year Ended December 31 (Dollars and Shares in Millions, Except Per Share Data) |
2021 | 2020 | 2019 | |||||||||
Condensed Income Statement |
||||||||||||
Net interest income |
$ | 12,494 | $ | 12,825 | $ | 13,052 | ||||||
Taxable-equivalent adjustment (a) |
106 | 99 | 103 | |||||||||
|
|
|||||||||||
Net interest income (taxable-equivalent basis) (b) |
12,600 | 12,924 | 13,155 | |||||||||
Noninterest income |
10,227 | 10,401 | 9,831 | |||||||||
|
|
|||||||||||
Total net revenue |
22,827 | 23,325 | 22,986 | |||||||||
Noninterest expense |
13,728 | 13,369 | 12,785 | |||||||||
Provision for credit losses |
(1,173 | ) | 3,806 | 1,504 | ||||||||
|
|
|||||||||||
Income before taxes |
10,272 | 6,150 | 8,697 | |||||||||
Income taxes and taxable-equivalent adjustment |
2,287 | 1,165 | 1,751 | |||||||||
|
|
|||||||||||
Net income |
7,985 | 4,985 | 6,946 | |||||||||
Net (income) loss attributable to noncontrolling interests |
(22 | ) | (26 | ) | (32 | ) | ||||||
|
|
|||||||||||
Net income attributable to U.S. Bancorp |
$ | 7,963 | $ | 4,959 | $ | 6,914 | ||||||
|
|
|||||||||||
Net income applicable to U.S. Bancorp common shareholders |
$ | 7,605 | $ | 4,621 | $ | 6,583 | ||||||
|
|
|||||||||||
Per Common Share |
||||||||||||
Earnings per share |
$ | 5.11 | $ | 3.06 | $ | 4.16 | ||||||
Diluted earnings per share |
5.10 | 3.06 | 4.16 | |||||||||
Dividends declared per share |
1.76 | 1.68 | 1.58 | |||||||||
Book value per share (c) |
32.71 | 31.26 | 29.90 | |||||||||
Market value per share |
56.17 | 46.59 | 59.29 | |||||||||
Average common shares outstanding |
1,489 | 1,509 | 1,581 | |||||||||
Average diluted common shares outstanding |
1,490 | 1,510 | 1,583 | |||||||||
Financial Ratios |
||||||||||||
Return on average assets |
1.43 | % | .93 | % | 1.45 | % | ||||||
Return on average common equity |
16.0 | 10.0 | 14.1 | |||||||||
Net interest margin (taxable-equivalent basis) (a) |
2.49 | 2.68 | 3.06 | |||||||||
Efficiency ratio (b) |
60.4 | 57.8 | 55.8 | |||||||||
Net charge-offs as a percent of average loans outstanding |
.23 | .58 | .50 | |||||||||
Average Balances |
||||||||||||
Loans |
$ | 296,965 | $ | 307,269 | $ | 290,686 | ||||||
Loans held for sale |
8,024 | 6,985 | 3,769 | |||||||||
Investment securities (d) |
154,702 | 125,954 | 117,150 | |||||||||
Earning assets |
506,141 | 481,402 | 430,537 | |||||||||
Assets |
556,532 | 531,207 | 475,653 | |||||||||
Noninterest-bearing deposits |
127,204 | 98,539 | 73,863 | |||||||||
Deposits |
434,281 | 398,615 | 346,812 | |||||||||
Short-term borrowings |
14,774 | 19,182 | 18,137 | |||||||||
Long-term debt |
36,682 | 44,040 | 41,572 | |||||||||
Total U.S. Bancorp shareholders’ equity |
53,810 | 52,246 | 52,623 | |||||||||
Period End Balances |
||||||||||||
Loans |
$ | 312,028 | $ | 297,707 | $ | 296,102 | ||||||
Investment securities |
174,821 | 136,840 | 122,613 | |||||||||
Assets |
573,284 | 553,905 | 495,426 | |||||||||
Deposits |
456,083 | 429,770 | 361,916 | |||||||||
Long-term debt |
32,125 | 41,297 | 40,167 | |||||||||
Total U.S. Bancorp shareholders’ equity |
54,918 | 53,095 | 51,853 | |||||||||
Asset Quality |
||||||||||||
Nonperforming assets |
$ | 878 | $ | 1,298 | $ | 829 | ||||||
Allowance for credit losses |
6,155 | 8,010 | 4,491 | |||||||||
Allowance for credit losses as a percentage of period-end loans |
1.97 | % | 2.69 | % | 1.52 | % | ||||||
Capital Ratios |
||||||||||||
Common equity tier 1 capital |
10.0 | % | 9.7 | % | 9.1 | % | ||||||
Tier 1 capital |
11.6 | 11.3 | 10.7 | |||||||||
Total risk-based capital |
13.4 | 13.4 | 12.7 | |||||||||
Leverage |
8.6 | 8.3 | 8.8 | |||||||||
Total leverage exposure |
6.9 | 7.3 | 7.0 | |||||||||
Tangible common equity to tangible assets (b) |
6.8 | 6.9 | 7.5 | |||||||||
Tangible common equity to risk-weighted assets (b) |
9.2 | 9.5 | 9.3 | |||||||||
Common equity tier 1 capital to risk-weighted assets, reflecting the full implementation of the current expected credit losses methodology (b) |
9.6 | 9.3 |
(a) |
Based on a federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes. |
(b) |
See Non-GAAP Financial Measures beginning on page 60. |
(c) |
Calculated as U.S. Bancorp common shareholders’ equity divided by common shares outstanding at end of the period. |
(d) |
Excludes unrealized gains and losses on available-for-sale available-for-sale held-to-maturity. |
23 |
||||
24 |
||||||
TABLE 2 |
Analysis of Net Interest Income (a) |
Year Ended December 31 (Dollars in Millions) | 2021 |
2020 | 2019 | 2021 v 2020 |
2020 v 2019 |
|||||||||||||||
Components of Net Interest Income |
||||||||||||||||||||
Income on earning assets (taxable-equivalent basis) |
$ | 13,593 | $ | 14,942 | $ | 17,607 | $ | (1,349 | ) | $ | (2,665 | ) | ||||||||
Expense on interest-bearing liabilities (taxable-equivalent basis) |
993 | 2,018 | 4,452 | (1,025 | ) | (2,434 | ) | |||||||||||||
Net interest income (taxable-equivalent basis) (b) |
$ | 12,600 | $ | 12,924 | $ | 13,155 | $ | (324 | ) | $ | (231 | ) | ||||||||
Net interest income, as reported |
$ | 12,494 | $ | 12,825 | $ | 13,052 | $ | (331 | ) | $ | (227 | ) | ||||||||
Average Yields and Rates Paid |
||||||||||||||||||||
Earning assets yield (taxable-equivalent basis) |
2.69 | % | 3.10 | % | 4.09 | % | (.41 | )% | (.99 | )% | ||||||||||
Rate paid on interest-bearing liabilities (taxable-equivalent basis) |
.28 | .56 | 1.34 | (.28 | ) | (.78 | ) | |||||||||||||
Gross interest margin (taxable-equivalent basis) |
2.41 | % | 2.54 | % | 2.75 | % | (.13 | )% | (.21 | )% | ||||||||||
Net interest margin (taxable-equivalent basis) |
2.49 | % | 2.68 | % | 3.06 | % | (.19 | )% | (.38 | )% | ||||||||||
Average Balances |
||||||||||||||||||||
Investment securities (c) |
$ | 154,702 | $ | 125,954 | $ | 117,150 | $ | 28,748 | $ | 8,804 | ||||||||||
Loans |
296,965 | 307,269 | 290,686 | (10,304 | ) | 16,583 | ||||||||||||||
Earning assets |
506,141 | 481,402 | 430,537 | 24,739 | 50,865 | |||||||||||||||
Noninterest-bearing deposits |
127,204 | 98,539 | 73,863 | 28,665 | 24,676 | |||||||||||||||
Interest-bearing deposits |
307,077 | 300,076 | 272,949 | 7,001 | 27,127 | |||||||||||||||
Total deposits |
434,281 | 398,615 | 346,812 | 35,666 | 51,803 | |||||||||||||||
Interest-bearing liabilities |
358,533 | 363,298 | 332,658 | (4,765 | ) | 30,640 |
(a) |
Interest and rates are presented on a fully taxable-equivalent basis based on a federal income tax rate of 21 percent. |
(b) |
See Non-GAAP Financial Measures beginning on page 60. |
(c) |
Excludes unrealized gains and losses on available-for-sale available-for-sale held-to-maturity. |
25 |
||||
TABLE 3 |
Net Interest Income — Changes Due to Rate and Volume (a) |
2021 v 2020 | 2020 v 2019 | |||||||||||||||||||||||
Year Ended December 31 (Dollars in Millions) | Volume | Yield/Rate | Total | Volume | Yield/Rate | Total | ||||||||||||||||||
Increase (decrease) in |
||||||||||||||||||||||||
Interest Income |
||||||||||||||||||||||||
Investment securities |
$ | 569 | $ | (623 | ) | $ | (54 | ) | $ | 222 | $ | (684 | ) | $ | (462 | ) | ||||||||
Loans held for sale |
32 | (16 | ) | 16 | 138 | (84 | ) | 54 | ||||||||||||||||
Loans |
||||||||||||||||||||||||
Commercial |
(311 | ) | (197 | ) | (508 | ) | 442 | (1,479 | ) | (1,037 | ) | |||||||||||||
Commercial real estate |
(63 | ) | (175 | ) | (238 | ) | 57 | (519 | ) | (462 | ) | |||||||||||||
Residential mortgages |
35 | (224 | ) | (189 | ) | 231 | (209 | ) | 22 | |||||||||||||||
Credit card |
(74 | ) | (40 | ) | (114 | ) | (112 | ) | (176 | ) | (288 | ) | ||||||||||||
Other retail |
95 | (321 | ) | (226 | ) | (14 | ) | (316 | ) | (330 | ) | |||||||||||||
Total loans |
(318 | ) | (957 | ) | (1,275 | ) | 604 | (2,699 | ) | (2,095 | ) | |||||||||||||
Other earning assets |
23 | (59 | ) | (36 | ) | 401 | (563 | ) | (162 | ) | ||||||||||||||
Total earning assets |
306 | (1,655 | ) | (1,349 | ) | 1,365 | (4,030 | ) | (2,665 | ) | ||||||||||||||
Interest Expense |
||||||||||||||||||||||||
Interest-bearing deposits |
||||||||||||||||||||||||
Interest checking |
15 | (56 | ) | (41 | ) | 36 | (198 | ) | (162 | ) | ||||||||||||||
Money market savings |
(37 | ) | (292 | ) | (329 | ) | 237 | (1,346 | ) | (1,109 | ) | |||||||||||||
Savings accounts |
9 | (48 | ) | (39 | ) | 14 | (79 | ) | (65 | ) | ||||||||||||||
Time deposits |
(110 | ) | (111 | ) | (221 | ) | (130 | ) | (439 | ) | (569 | ) | ||||||||||||
Total interest-bearing deposits |
(123 | ) | (507 | ) | (630 | ) | 157 | (2,062 | ) | (1,905 | ) | |||||||||||||
Short-term borrowings |
(33 | ) | (41 | ) | (74 | ) | 21 | (247 | ) | (226 | ) | |||||||||||||
Long-term debt |
(155 | ) | (166 | ) | (321 | ) | 73 | (376 | ) | (303 | ) | |||||||||||||
Total interest-bearing liabilities |
(311 | ) | (714 | ) | (1,025 | ) | 251 | (2,685 | ) | (2,434 | ) | |||||||||||||
Increase (decrease) in net interest income |
$ | 617 | $ | (941 | ) | $ | (324 | ) | $ | 1,114 | $ | (1,345 | ) | $ | (231 | ) |
(a) |
This table shows the components of the change in net interest income by volume and rate on a taxable-equivalent basis based on a federal income tax rate of 21 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. |
26 |
||||||
TABLE 4 |
Noninterest Income |
Year Ended December 31 (Dollars in Millions) | 2021 | 2020 | 2019 | 2021 v 2020 |
2020 v 2019 |
|||||||||||||||||
Credit and debit card revenue |
$ | 1,507 | $ | 1,338 | $ | 1,413 | 12.6 | % | (5.3 | )% | ||||||||||||
Corporate payment products revenue |
575 | 497 | 664 | 15.7 | (25.2 | ) | ||||||||||||||||
Merchant processing services |
1,449 | 1,261 | 1,601 | 14.9 | (21.2 | ) | ||||||||||||||||
Trust and investment management fees |
1,832 | 1,736 | 1,673 | 5.5 | 3.8 | |||||||||||||||||
Deposit service charges |
724 | 677 | 909 | 6.9 | (25.5 | ) | ||||||||||||||||
Treasury management fees |
614 | 568 | 578 | 8.1 | (1.7 | ) | ||||||||||||||||
Commercial products revenue |
1,102 | 1,143 | 934 | (3.6 | ) | 22.4 | ||||||||||||||||
Mortgage banking revenue |
1,361 | 2,064 | 874 | (34.1 | ) | * | ||||||||||||||||
Investment products fees |
239 | 192 | 186 | 24.5 | 3.2 | |||||||||||||||||
Securities gains (losses), net |
103 | 177 | 73 | (41.8 | ) | * | ||||||||||||||||
Other |
721 | 748 | 926 | (3.6 | ) | (19.2 | ) | |||||||||||||||
Total noninterest income |
$ | 10,227 | $ | 10,401 | $ | 9,831 | (1.7 | )% | 5.8 | % |
* |
Not meaningful. |
TABLE 5 |
Noninterest Expense |
Year Ended December 31 (Dollars in Millions) | 2021 | 2020 | 2019 | 2021 v 2020 |
2020 v 2019 |
|||||||||||||||
Compensation |
$ | 7,299 | $ | 6,635 | $ | 6,325 | 10.0 | % | 4.9 | % | ||||||||||
Employee benefits |
1,429 | 1,303 | 1,286 | 9.7 | 1.3 | |||||||||||||||
Net occupancy and equipment |
1,048 | 1,092 | 1,123 | (4.0 | ) | (2.8 | ) | |||||||||||||
Professional services |
492 | 430 | 454 | 14.4 | (5.3 | ) | ||||||||||||||
Marketing and business development |
366 | 318 | 426 | 15.1 | (25.4 | ) | ||||||||||||||
Technology and communications |
1,454 | 1,294 | 1,095 | 12.4 | 18.2 | |||||||||||||||
Postage, printing and supplies |
274 | 288 | 290 | (4.9 | ) | (.7 | ) | |||||||||||||
Other intangibles |
159 | 176 | 168 | (9.7 | ) | 4.8 | ||||||||||||||
Other |
1,207 | 1,833 | 1,618 | (34.2 | ) | 13.3 | ||||||||||||||
Total noninterest expense |
$ | 13,728 | $ | 13,369 | $ | 12,785 | 2.7 | % | 4.6 | % | ||||||||||
Efficiency ratio (a) |
60.4 | % | 57.8 | % | 55.8 | % |
(a) |
See Non-GAAP Financial Measures beginning on page 60. |
27 |
||||
Discount Rate |
Down 100 Basis Points |
Up 100 Basis Points |
||||||
Incremental benefit (expense) |
$ | (108 | ) | $ | 96 | |||
Percent of 2021 net income |
(1.01 | )% | .90 | % | ||||
LTROR |
Down 100 Basis Points |
Up 100 Basis Points |
||||||
Incremental benefit (expense) |
$ | (73 | ) | $ | 73 | |||
Percent of 2021 net income |
(.68 | )% | .68 | % |
28 |
||||||
TABLE 6 |
Loan Portfolio Distribution |
2021 | 2020 | |||||||||||||||||||
At December 31 (Dollars in Millions) | Amount | Percent of Total |
Amount | Percent of Total |
||||||||||||||||
Commercial |
||||||||||||||||||||
Commercial |
$ | 106,912 | 34.3 | % | $ | 97,315 | 32.7 | % | ||||||||||||
Lease financing |
5,111 | 1.6 | 5,556 | 1.9 | ||||||||||||||||
Total commercial |
112,023 | 35.9 | 102,871 | 34.6 | ||||||||||||||||
Commercial Real Estate |
||||||||||||||||||||
Commercial mortgages |
28,757 | 9.2 | 28,472 | 9.6 | ||||||||||||||||
Construction and development |
10,296 | 3.3 | 10,839 | 3.6 | ||||||||||||||||
Total commercial real estate |
39,053 | 12.5 | 39,311 | 13.2 | ||||||||||||||||
Residential Mortgages |
||||||||||||||||||||
Residential mortgages |
67,546 | 21.6 | 66,525 | 22.4 | ||||||||||||||||
Home equity loans, first liens |
8,947 | 2.9 | 9,630 | 3.2 | ||||||||||||||||
Total residential mortgages |
76,493 | 24.5 | 76,155 | 25.6 | ||||||||||||||||
Credit Card |
22,500 | 7.2 | 22,346 | 7.5 | ||||||||||||||||
Other Retail |
||||||||||||||||||||
Retail leasing |
7,256 | 2.3 | 8,150 | 2.7 | ||||||||||||||||
Home equity and second mortgages |
10,446 | 3.4 | 12,472 | 4.2 | ||||||||||||||||
Revolving credit |
2,750 | .9 | 2,688 | .9 | ||||||||||||||||
Installment |
16,514 | 5.3 | 13,823 | 4.6 | ||||||||||||||||
Automobile |
24,866 | 8.0 | 19,722 | 6.6 | ||||||||||||||||
Student |
127 | — | 169 | .1 | ||||||||||||||||
Total other retail |
61,959 | 19.9 | 57,024 | 19.1 | ||||||||||||||||
Total loans |
$ | 312,028 | 100.0 | % | $ | 297,707 | 100.0 | % |
TABLE 7 |
Selected Loan Maturity Distribution |
At December 31, 2021 (Dollars in Millions) | One Year or Less |
Over One Through Five Years |
Over Five Through Fifteen Years |
Over Fifteen Years |
Total | |||||||||||||||
Commercial |
$ | 27,220 | $ | 78,342 | $ | 6,295 | $ | 166 | $ | 112,023 | ||||||||||
Commercial real estate |
8,334 | 22,462 | 4,527 | 3,730 | (a) |
39,053 | ||||||||||||||
Residential mortgages |
337 | 877 | 7,604 | 67,675 | 76,493 | |||||||||||||||
Credit card |
22,500 | — | — | — | 22,500 | |||||||||||||||
Other retail |
2,742 | 20,934 | 23,893 | 14,390 | 61,959 | |||||||||||||||
Total loans |
$ | 61,133 | $ | 122,615 | $ | 42,319 | $ | 85,961 | $ | 312,028 | ||||||||||
Total of loans due after one year with: |
||||||||||||||||||||
Predetermined Interest Rates |
Floating Interest Rates |
|||||||||||||||||||
Commercial |
|
$ | 16,816 | $ | 67,987 | |||||||||||||||
Commercial real estate |
|
10,476 | 20,243 | |||||||||||||||||
Residential mortgages |
|
53,517 | 22,639 | |||||||||||||||||
Credit card |
|
— | — | |||||||||||||||||
Other retail |
|
47,261 | 11,956 | |||||||||||||||||
Total |
|
$ | 128,070 | $ | 122,825 |
(a) |
Primarily represents construction loans for single-family residences or loans guaranteed by the SBA. |
29 |
||||
TABLE 8 |
Commercial Loans by Industry Group and Geography |
2021 | 2020 | |||||||||||||||
At December 31 (Dollars in Millions) | Loans | Percent | Loans | Percent | ||||||||||||
Industry Group |
||||||||||||||||
Real-estate related |
$ | 16,646 | 14.9 | % | $ | 14,032 | 13.6 | % | ||||||||
Financial institutions |
14,002 | 12.5 | 11,208 | 10.9 | ||||||||||||
Automotive |
7,590 | 6.8 | 4,395 | 4.3 | ||||||||||||
Personal, professional and commercial services |
7,095 | 6.3 | 7,597 | 7.4 | ||||||||||||
Healthcare |
6,923 | 6.2 | 7,815 | 7.6 | ||||||||||||
Technology |
5,119 | 4.6 | 3,937 | 3.8 | ||||||||||||
Retail |
4,717 | 4.2 | 5,277 | 5.1 | ||||||||||||
Media and entertainment |
4,623 | 4.1 | 5,737 | 5.6 | ||||||||||||
Capital goods |
4,099 | 3.6 | 2,911 | 2.8 | ||||||||||||
Food and beverage |
4,097 | 3.6 | 3,869 | 3.8 | ||||||||||||
Transportation |
3,895 | 3.5 | 3,441 | 3.3 | ||||||||||||
Education and non-profit |
3,721 | 3.3 | 4,698 | 4.6 | ||||||||||||
Metals and mining |
3,342 | 3.0 | 2,892 | 2.8 | ||||||||||||
State and municipal government |
3,166 | 2.8 | 3,157 | 3.1 | ||||||||||||
Power |
3,028 | 2.7 | 2,150 | 2.1 | ||||||||||||
Building materials |
2,687 | 2.4 | 2,813 | 2.7 | ||||||||||||
Energy |
2,299 | 2.1 | 2,624 | 2.6 | ||||||||||||
Agriculture |
1,796 | 1.6 | 1,950 | 1.9 | ||||||||||||
Other |
13,178 | 11.8 | 12,368 | 12.0 | ||||||||||||
Total |
$ | 112,023 | 100.0 | % | $ | 102,871 | 100.0 | % | ||||||||
Geography |
||||||||||||||||
California |
$ | 15,439 | 13.8 | % | $ | 14,053 | 13.7 | % | ||||||||
New York |
7,483 | 6.7 | 6,129 | 6.0 | ||||||||||||
Texas |
6,748 | 6.0 | 6,163 | 6.0 | ||||||||||||
Minnesota |
6,730 | 6.0 | 7,251 | 7.0 | ||||||||||||
Illinois |
6,572 | 5.9 | 5,795 | 5.6 | ||||||||||||
Ohio |
4,310 | 3.8 | 4,394 | 4.3 | ||||||||||||
Wisconsin |
3,894 | 3.5 | 3,996 | 3.9 | ||||||||||||
New Jersey |
3,825 | 3.4 | 2,148 | 2.1 | ||||||||||||
Virginia |
3,822 | 3.4 | 2,098 | 2.0 | ||||||||||||
Missouri |
3,817 | 3.4 | 4,085 | 4.0 | ||||||||||||
All other states |
49,383 | 44.1 | 46,759 | 45.4 | ||||||||||||
Total |
$ | 112,023 | 100.0 | % | $ | 102,871 | 100.0 | % |
30 |
||||||
TABLE 9 |
Commercial Real Estate Loans by Property Type and Geography |
2021 | 2020 | |||||||||||||||
At December 31 (Dollars in Millions) | Loans | Percent | Loans | Percent | ||||||||||||
Property Type |
||||||||||||||||
Multi-family |
$ | 9,293 | 23.8 | % | $ | 8,672 | 22.1 | % | ||||||||
Business owner occupied |
8,238 | 21.1 | 8,622 | 21.9 | ||||||||||||
Office |
5,814 | 14.9 | 6,081 | 15.5 | ||||||||||||
Industrial |
3,672 | 9.4 | 2,941 | 7.5 | ||||||||||||
Retail |
3,382 | 8.7 | 3,645 | 9.3 | ||||||||||||
Residential land and development |
2,788 | 7.1 | 2,724 | 6.9 | ||||||||||||
Lodging |
2,422 | 6.2 | 2,814 | 7.1 | ||||||||||||
Other |
3,444 | 8.8 | 3,812 | 9.7 | ||||||||||||
Total |
$ | 39,053 | 100.0 | % | $ | 39,311 | 100.0 | % | ||||||||
Geography |
||||||||||||||||
California |
$ | 9,683 | 24.8 | % | $ | 9,653 | 24.6 | % | ||||||||
Washington |
3,680 | 9.4 | 3,427 | 8.7 | ||||||||||||
Minnesota |
1,717 | 4.4 | 1,869 | 4.7 | ||||||||||||
Colorado |
1,684 | 4.3 | 1,680 | 4.3 | ||||||||||||
Texas |
1,662 | 4.3 | 1,600 | 4.1 | ||||||||||||
Oregon |
1,526 | 3.9 | 1,738 | 4.4 | ||||||||||||
Florida |
1,520 | 3.9 | 1,265 | 3.2 | ||||||||||||
Illinois |
1,409 | 3.6 | 1,487 | 3.8 | ||||||||||||
Wisconsin |
1,391 | 3.6 | 1,585 | 4.0 | ||||||||||||
Ohio |
1,215 | 3.1 | 1,213 | 3.1 | ||||||||||||
All other states |
13,566 | 34.7 | 13,794 | 35.1 | ||||||||||||
Total |
$ | 39,053 | 100.0 | % | $ | 39,311 | 100.0 | % |
31 |
||||
TABLE 10 |
Residential Mortgages by Geography |
2021 | 2020 | |||||||||||||||||||
At December 31 (Dollars in Millions) | Loans | Percent | Loans | Percent | ||||||||||||||||
California |
$ | 23,568 | 30.8 | % | $ | 22,994 | 30.2 | % | ||||||||||||
Washington |
4,002 | 5.2 | 3,943 | 5.2 | ||||||||||||||||
Minnesota |
3,767 | 4.9 | 4,378 | 5.7 | ||||||||||||||||
Colorado |
3,612 | 4.7 | 3,777 | 5.0 | ||||||||||||||||
Illinois |
3,392 | 4.4 | 3,786 | 5.0 | ||||||||||||||||
Florida |
3,340 | 4.4 | 3,112 | 4.1 | ||||||||||||||||
Arizona |
2,684 | 3.5 | 2,865 | 3.8 | ||||||||||||||||
Oregon |
2,332 | 3.1 | 2,399 | 3.1 | ||||||||||||||||
Texas |
2,209 | 2.9 | 2,244 | 2.9 | ||||||||||||||||
Ohio |
2,072 | 2.7 | 2,241 | 2.9 | ||||||||||||||||
All other states |
25,515 | 33.4 | 24,416 | 32.1 | ||||||||||||||||
Total |
$ | 76,493 | 100.0 | % | $ | 76,155 | 100.0 | % |
TABLE 11 |
Credit Card Loans by Geography |
2021 | 2020 | |||||||||||||||||||
At December 31 (Dollars in Millions) | Loans | Percent | Loans | Percent | ||||||||||||||||
California |
$ | 2,134 | 9.5 | % | $ | 2,175 | 9.7 | % | ||||||||||||
Texas |
1,343 | 6.0 | 1,300 | 5.8 | ||||||||||||||||
Ohio |
1,113 | 4.9 | 1,153 | 5.2 | ||||||||||||||||
Minnesota |
1,109 | 4.9 | 1,126 | 5.0 | ||||||||||||||||
Illinois |
1,108 | 4.9 | 1,095 | 4.9 | ||||||||||||||||
Florida |
1,046 | 4.6 | 974 | 4.4 | ||||||||||||||||
Wisconsin |
895 | 4.0 | 926 | 4.1 | ||||||||||||||||
Michigan |
822 | 3.7 | 848 | 3.8 | ||||||||||||||||
Colorado |
761 | 3.4 | 773 | 3.5 | ||||||||||||||||
Washington |
757 | 3.4 | 789 | 3.5 | ||||||||||||||||
All other states |
11,412 | 50.7 | 11,187 | 50.1 | ||||||||||||||||
Total |
$ | 22,500 | 100.0 | % | $ | 22,346 | 100.0 | % |
32 |
||||||
TABLE 12 |
Other Retail Loans by Geography |
2021 | 2020 | |||||||||||||||||||
At December 31 (Dollars in Millions) | Loans | Percent | Loans | Percent | ||||||||||||||||
California |
$ | 9,605 | 15.5 | % | $ | 9,179 | 16.1 | % | ||||||||||||
Texas |
7,570 | 12.2 | 6,381 | 11.2 | ||||||||||||||||
Florida |
3,850 | 6.2 | 3,135 | 5.5 | ||||||||||||||||
Minnesota |
2,947 | 4.8 | 3,009 | 5.3 | ||||||||||||||||
Illinois |
2,692 | 4.3 | 2,571 | 4.5 | ||||||||||||||||
Ohio |
2,634 | 4.2 | 2,579 | 4.5 | ||||||||||||||||
New York |
2,014 | 3.3 | 1,766 | 3.1 | ||||||||||||||||
Washington |
1,913 | 3.1 | 1,809 | 3.2 | ||||||||||||||||
Colorado |
1,859 | 3.0 | 1,886 | 3.3 | ||||||||||||||||
Missouri |
1,683 | 2.7 | 1,687 | 2.9 | ||||||||||||||||
All other states |
25,192 | 40.7 | 23,022 | 40.4 | ||||||||||||||||
Total |
$ | 61,959 | 100.0 | % | $ | 57,024 | 100.0 | % |
TABLE 13 |
Investment Securities |
2021 | 2020 | |||||||||||||||||||||||||||||||||||
At December 31 (Dollars in Millions) | Amortized Cost |
Fair Value | Weighted- Average Maturity in Years |
Weighted- Average Yield (d) |
Amortized Cost |
Fair Value | Weighted- Average Maturity in Years |
Weighted- Average Yield (d) |
||||||||||||||||||||||||||||
Held-to-maturity |
||||||||||||||||||||||||||||||||||||
Mortgage-backed securities (a) |
$ | 41,858 | $ | 41,812 | 7.4 | 1.45 | % | $ | — | $ | — | — | — | % | ||||||||||||||||||||||
Total held-to-maturity |
$ | 41,858 | $ | 41,812 | 7.4 | 1.45 | % | $ | — | $ | — | — | — | % | ||||||||||||||||||||||
Available-for-sale |
||||||||||||||||||||||||||||||||||||
U.S. Treasury and agencies |
$ | 36,648 | $ | 36,609 | 6.7 | 1.54 | % | $ | 21,954 | $ | 22,391 | 3.8 | 1.37 | % | ||||||||||||||||||||||
Mortgage-backed securities (a) |
85,394 | 85,564 | 4.9 | 1.58 | 103,282 | 105,374 | 3.0 | 1.47 | ||||||||||||||||||||||||||||
Asset-backed securities (a) |
62 | 66 | 5.2 | 1.53 | 200 | 205 | 6.2 | 1.47 | ||||||||||||||||||||||||||||
Obligations of state and political subdivisions (b)(c) |
10,130 | 10,717 | 6.6 | 3.67 | 8,166 | 8,861 | 6.3 | 3.99 | ||||||||||||||||||||||||||||
Other |
7 | 7 | 3.4 | 2.07 | 9 | 9 | .1 | 1.81 | ||||||||||||||||||||||||||||
Total available-for-sale |
$ | 132,241 | $ | 132,963 | 5.5 | 1.73 | % | $ | 133,611 | $ | 136,840 | 3.4 | 1.61 | % |
(a) |
Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities that take into account anticipated future prepayments. |
(b) |
Information related to obligations of state and political subdivisions is presented based upon yield to first optional call date if the security is purchased at a premium, and yield to maturity if the security is purchased at par or a discount. |
(c) |
Maturity calculations for obligations of state and political subdivisions are based on the first optional call date for securities with a fair value above par and the contractual maturity date for securities with a fair value equal to or below par. |
(d) |
Yields on investment securities are computed based on amortized cost balances. Weighted-average yields for obligations of state and political subdivisions are presented on a fully-taxable equivalent basis based on a federal income tax rate of 21 percent. |
33 |
||||
34 |
||||||
TABLE 14 |
Deposits |
2021 | 2020 | |||||||||||||||||||
At December 31 (Dollars in Millions) | Amount | Percent of Total |
Amount | Percent of Total |
||||||||||||||||
Noninterest-bearing deposits |
$ | 134,901 | 29.6 | % | $ | 118,089 | 27.5 | % | ||||||||||||
Interest-bearing deposits |
||||||||||||||||||||
Interest checking |
115,108 | 25.2 | 95,894 | 22.3 | ||||||||||||||||
Money market savings |
117,619 | 25.8 | 128,058 | 29.8 | ||||||||||||||||
Savings accounts |
65,790 | 14.4 | 57,035 | 13.3 | ||||||||||||||||
Total savings deposits |
298,517 | 65.4 | 280,987 | 65.4 | ||||||||||||||||
Domestic time deposits less than $250,000 |
11,303 | 2.5 | 14,187 | 3.3 | ||||||||||||||||
Domestic time deposits greater than $250,000 |
2,743 | .6 | 4,413 | 1.0 | ||||||||||||||||
Foreign time deposits |
8,619 | 1.9 | 12,094 | 2.8 | ||||||||||||||||
Total interest-bearing deposits |
321,182 | 70.4 | 311,681 | 72.5 | ||||||||||||||||
Total deposits (a) |
$ | 456,083 | 100.0 | % | $ | 429,770 | 100.0 | % |
(a) |
Includes $238.0 billion and $239.0 billion of deposits at December 31, 2021 and 2020, respectively, that are not subject to any federal, state or foreign deposit insurance program. |
(Dollars in Millions) | Domestic Time Deposits Greater Than $250,000 |
Foreign Time Deposits |
Total | |||||||||
Three months or less |
$ | 1,107 | $ | 8,619 | $ | 9,726 | ||||||
Three months through six months |
365 | — | 365 | |||||||||
Six months through one year |
742 | — | 742 | |||||||||
Thereafter |
529 | — | 529 | |||||||||
Total |
$ | 2,743 | $ | 8,619 | $ | 11,362 |
35 |
||||
– | Macroeconomic environment and other qualitative considerations, such as regulatory and compliance changes, litigation developments, and technology and cybersecurity; |
– | Credit measures, including adversely rated and nonperforming loans, leveraged transactions, credit concentrations and lending limits; |
– | Interest rate and market risk, including market value and net income simulation, and trading-related Value at Risk (“VaR”); |
– | Liquidity risk, including funding projections under various stressed scenarios; |
– | Operational and compliance risk, including losses stemming from events such as fraud, processing errors, control breaches, breaches in data security or adverse business decisions, as well as reporting on technology performance, and various legal and regulatory compliance measures; |
– | Capital ratios and projections, including regulatory measures and stressed scenarios; and |
– | Strategic and reputation risk considerations, impacts and responses. |
36 |
||||||
37 |
||||
38 |
||||||
Residential Mortgages (Dollars in Millions) |
Interest Only |
Amortizing | Total | Percent of Total |
||||||||||||
Loan-to-Value |
||||||||||||||||
Less than or equal to 80% |
$ | 3,680 | $ | 62,380 | $ | 66,060 | 86.4 | % | ||||||||
Over 80% through 90% |
— | 1,946 | 1,946 | 2.5 | ||||||||||||
Over 90% through 100% |
— | 193 | 193 | .3 | ||||||||||||
Over 100% |
— | 72 | 72 | .1 | ||||||||||||
No LTV available |
— | 22 | 22 | — | ||||||||||||
Loans purchased from GNMA mortgage pools (a) |
— | 8,200 | 8,200 | 10.7 | ||||||||||||
Total (b) |
$ | 3,680 | $ | 72,813 | $ | 76,493 | 100.0 | % |
(a) |
Represents loans purchased from Government National Mortgage Association (“GNMA”) mortgage pools whose payments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. |
(b) |
At December 31, 2021, approximately $418 million of residential mortgage balances were considered sub-prime. |
Home Equity and Second Mortgages (Dollars in Millions) |
Lines | Loans | Total | Percent of Total |
||||||||||||
Loan-to-Value / Combined Loan-to-Value |
| |||||||||||||||
Less than or equal to 80% |
$ | 9,132 | $ | 638 | $ | 9,770 | 93.5 | % | ||||||||
Over 80% through 90% |
282 | 223 | 505 | 4.8 | ||||||||||||
Over 90% through 100% |
47 | 23 | 70 | .7 | ||||||||||||
Over 100% |
38 | 4 | 42 | .4 | ||||||||||||
No LTV/CLTV available |
56 | 3 | 59 | .6 | ||||||||||||
Total (a) |
$ | 9,555 | $ | 891 | $ | 10,446 | 100.0 | % |
(a) |
At December 31, 2021, approximately $33 million of home equity and second mortgage balances were considered sub-prime. |
Junior Liens Behind | ||||||||||||
(Dollars in Millions) | Company Owned or Serviced First Lien |
Third Party First Lien |
Total | |||||||||
Total |
$ | 2,594 | $ | 4,795 | $ | 7,389 | ||||||
Percent 30 - 89 days past due |
.53 | % | .56 | % | .55 | % | ||||||
Percent 90 days or more past due |
.11 | % | .08 | % | .09 | % | ||||||
Weighted-average CLTV |
58 | % | 56 | % | 57 | % | ||||||
Weighted-average credit score |
782 | 783 | 782 |
39 |
||||
TABLE 15 |
Delinquent Loan Ratios as a Percent of Ending Loan Balances |
At December 31 90 days or more past due excluding nonperforming loans |
2021 | 2020 | ||||||
Commercial |
||||||||
Commercial |
.05 | % | .06 | % | ||||
Lease financing |
— | — | ||||||
Total commercial |
.04 | .05 | ||||||
Commercial Real Estate |
||||||||
Commercial mortgages |
— | — | ||||||
Construction and development |
.10 | .02 | ||||||
Total commercial real estate |
.03 | .01 | ||||||
Residential Mortgages (a) |
.24 | .18 | ||||||
Credit Card |
.73 | .88 | ||||||
Other Retail |
||||||||
Retail leasing |
.04 | .05 | ||||||
Home equity and second mortgages |
.35 | .36 | ||||||
Other |
.06 | .10 | ||||||
Total other retail |
.11 | .15 | ||||||
Total loans |
.15 | % | .16 | % | ||||
At December 31 90 days or more past due including nonperforming loans |
2021 | 2020 | ||||||
Commercial |
.20 | % | .42 | % | ||||
Commercial real estate |
.76 | 1.15 | ||||||
Residential mortgages (a) |
.53 | .50 | ||||||
Credit card |
.73 | .88 | ||||||
Other retail |
.35 | .42 | ||||||
Total loans |
.42 | % | .57 | % |
(a) |
Delinquent loan ratios exclude $1.5 billion and $1.8 billion at December 31, 2021 and 2020, respectively, of loans purchased from GNMA mortgage pools whose repayments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. Including these loans, the ratio of residential mortgages 90 days or more past due including all nonperforming loans was 2.43 percent and 2.87 percent at December 31, 2021 and 2020, respectively. |
40 |
||||||
Amount | As a Percent of Ending Loan Balances |
|||||||||||||||
At December 31 (Dollars in Millions) |
2021 | 2020 | 2021 | 2020 | ||||||||||||
Residential Mortgages (a) |
||||||||||||||||
30-89 days |
$ | 124 | $ | 244 | .15 | % | .32 | % | ||||||||
90 days or more |
181 | 137 | .24 | .18 | ||||||||||||
Nonperforming |
226 | 245 | .30 | .32 | ||||||||||||
Total |
$ | 531 | $ | 626 | .69 | % | .82 | % | ||||||||
Credit Card |
||||||||||||||||
30-89 days |
$ | 193 | $ | 231 | .86 | % | 1.04 | % | ||||||||
90 days or more |
165 | 197 | .73 | .88 | ||||||||||||
Nonperforming |
— | — | — | — | ||||||||||||
Total |
$ | 358 | $ | 428 | 1.59 | % | 1.92 | % | ||||||||
Other Retail |
||||||||||||||||
Retail Leasing |
||||||||||||||||
30-89 days |
$ | 29 | $ | 35 | .40 | % | .43 | % | ||||||||
90 days or more |
3 | 4 | .04 | .05 | ||||||||||||
Nonperforming |
10 | 13 | .14 | .16 | ||||||||||||
Total |
$ | 42 | $ | 52 | .58 | % | .64 | % | ||||||||
Home Equity and Second Mortgages |
||||||||||||||||
30-89 days |
$ | 55 | $ | 68 | .53 | % | .54 | % | ||||||||
90 days or more |
37 | 45 | .35 | .36 | ||||||||||||
Nonperforming |
116 | 107 | 1.11 | .86 | ||||||||||||
Total |
$ | 208 | $ | 220 | 1.99 | % | 1.76 | % | ||||||||
Other (b) |
||||||||||||||||
30-89 days |
$ | 191 | $ | 215 | .43 | % | .60 | % | ||||||||
90 days or more |
26 | 37 | .06 | .10 | ||||||||||||
Nonperforming |
24 | 34 | .05 | .09 | ||||||||||||
Total |
$ | 241 | $ | 286 | .54 | % | .79 | % |
(a) |
Excludes $.8 billion of loans 30-89 days past due and $1.5 billion of loans 90 days or more past due at December 31, 2021, purchased from GNMA mortgage pools that continue to accrue interest, compared with $1.4 billion and $1.8 billion at December 31, 2020, respectively. |
(b) |
Includes revolving credit, installment, automobile and student loans. |
41 |
||||
As a Percent of Performing TDRs | ||||||||||||||||||||
At December 31, 2021 (Dollars in Millions) |
Performing TDRs |
30-89 Days Past Due |
90 Days or More Past Due |
Nonperforming TDRs |
Total TDRs |
|||||||||||||||
Commercial |
$ | 130 | 5.0 | % | 2.9 | % | $ | 77 | (a) |
$ | 207 | |||||||||
Commercial real estate |
92 | 1.2 | — | 219 | (b) |
311 | ||||||||||||||
Residential mortgages |
1,363 | 3.0 | 4.9 | 126 | 1,489 | (d) | ||||||||||||||
Credit card |
234 | 10.9 | 5.0 | — | 234 | |||||||||||||||
Other retail |
164 | 11.0 | 5.9 | 38 | (c) |
202 | (e) | |||||||||||||
TDRs, excluding loans purchased from GNMA mortgage pools |
1,983 | 4.7 | 4.6 | 460 | 2,443 | |||||||||||||||
Loans purchased from GNMA mortgage pools (g) |
1,071 | — | — | — | 1,071 | (f) | ||||||||||||||
Total |
$ | 3,054 | 3.0 | % | 3.0 | % | $ | 460 | $ | 3,514 |
(a) |
Primarily represents loans less than six months from the modification date that have not met the performance period required to return to accrual status (generally six months) and small business credit cards with a modified rate equal to 0 percent. |
(b) |
Primarily represents loans less than six months from the modification date that have not met the performance period required to return to accrual status (generally six months). |
(c) |
Primarily represents loans with a modified rate equal to 0 percent. |
(d) |
Includes $231 million of residential mortgage loans to borrowers that have had debt discharged through bankruptcy and $22 million in trial period arrangements or previously placed in trial period arrangements but not successfully completed. |
(e) |
Includes $69 million of other retail loans to borrowers that have had debt discharged through bankruptcy and $14 million in trial period arrangements or previously placed in trial period arrangements but not successfully completed. |
(f) |
Includes $177 million of Federal Housing Administration and United States Department of Veterans Affairs residential mortgage loans to borrowers that have had debt discharged through bankruptcy and $132 million in trial period arrangements or previously placed in trial period arrangements but not successfully completed. |
(g) |
Approximately 8.5 percent and 35.8 percent of the total TDR loans purchased from GNMA mortgage pools are 30-89 days past due and 90 days or more past due, respectively, but are not classified as delinquent as their repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. |
42 |
||||||
TABLE 16 |
Nonperforming Assets (a) |
At December 31 (Dollars in Millions) | 2021 | 2020 | ||||||||||
Commercial |
||||||||||||
Commercial |
$ | 139 | $ | 321 | ||||||||
Lease financing |
35 | 54 | ||||||||||
Total commercial |
174 | 375 | ||||||||||
Commercial Real Estate |
||||||||||||
Commercial mortgages |
213 | 411 | ||||||||||
Construction and development |
71 | 39 | ||||||||||
Total commercial real estate |
284 | 450 | ||||||||||
Residential Mortgages (b) |
226 | 245 | ||||||||||
Credit Card |
— | — | ||||||||||
Other Retail |
||||||||||||
Retail leasing |
10 | 13 | ||||||||||
Home equity and second mortgages |
116 | 107 | ||||||||||
Other |
24 | 34 | ||||||||||
Total other retail |
150 | 154 | ||||||||||
Total nonperforming loans (1) |
834 | 1,224 | ||||||||||
Other Real Estate (c) |
22 | 24 | ||||||||||
Other Assets |
22 | 50 | ||||||||||
Total nonperforming assets |
$ | 878 | $ | 1,298 | ||||||||
Accruing loans 90 days or more past due (b) |
$ | 472 | $ | 477 | ||||||||
Period-end loans(2) |
$ | 312,028 | $ | 297,707 | ||||||||
Nonperforming loans to total loans (1)/(2) |
.27 | % | .41 | % | ||||||||
Nonperforming assets to total loans plus other real estate (c) |
.28 | % | .44 | % |
(Dollars in Millions) | Commercial and Commercial Real Estate |
Residential Mortgages, Credit Card and Other Retail |
Total | |||||||||
Balance December 31, 2020 |
$ | 854 | $ | 444 | $ | 1,298 | ||||||
Additions to nonperforming assets |
||||||||||||
New nonaccrual loans and foreclosed properties |
316 | 212 | 528 | |||||||||
Advances on loans |
10 | 1 | 11 | |||||||||
Total additions |
326 | 213 | 539 | |||||||||
Reductions in nonperforming assets |
||||||||||||
Paydowns, payoffs |
(292 | ) | (101 | ) | (393 | ) | ||||||
Net sales |
(178 | ) | (14 | ) | (192 | ) | ||||||
Return to performing status |
(129 | ) | (111 | ) | (240 | ) | ||||||
Charge-offs (d) |
(120 | ) | (14 | ) | (134 | ) | ||||||
Total reductions |
(719 | ) | (240 | ) | (959 | ) | ||||||
Net additions to (reductions in) nonperforming assets |
(393 | ) | (27 | ) | (420 | ) | ||||||
Balance December 31, 2021 |
$ | 461 | $ | 417 | $ | 878 |
(a) |
Throughout this document, nonperforming assets and related ratios do not include accruing loans 90 days or more past due. |
(b) |
Excludes $1.5 billion and $1.8 billion at December 31, 2021 and 2020, respectively, of loans purchased from GNMA mortgage pools that are 90 days or more past due that continue to accrue interest, as their repayments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. |
(c) |
Foreclosed GNMA loans of $22 million and $33 million at December 31, 2021 and 2020, respectively, continue to accrue interest and are recorded as other assets and excluded from nonperforming assets because they are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. |
(d) |
Charge-offs exclude actions for certain card products and loan sales that were not classified as nonperforming at the time the charge-off occurred. |
43 |
||||
TABLE 17 |
Net Charge-offs as a Percent of Average Loans Outstanding |
2021 | 2020 | 2019 | ||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31 (Dollars in Millions) | Average Loan Balance |
Net Charge-offs |
Percent | Average Loan Balance |
Net Charge-offs |
Percent | Average Loan Balance |
Net Charge-offs |
Percent | |||||||||||||||||||||||||||||||||||
Commercial |
||||||||||||||||||||||||||||||||||||||||||||
Commercial |
$ | 97,649 | $ | 97 | .10 | % | $ | 108,367 | $ | 483 | .45 | % | $ | 97,697 | $ | 273 | .28 | % | ||||||||||||||||||||||||||
Lease financing |
5,206 | 6 | .12 | 5,600 | 30 | .54 | 5,501 | 12 | .22 | |||||||||||||||||||||||||||||||||||
Total commercial |
102,855 | 103 | .10 | 113,967 | 513 | .45 | 103,198 | 285 | .28 | |||||||||||||||||||||||||||||||||||
Commercial real estate |
||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgages |
27,997 | (14 | ) | (.05 | ) | 29,641 | 185 | .62 | 28,595 | 12 | .04 | |||||||||||||||||||||||||||||||||
Construction |
10,784 | 16 | .15 | 10,907 | 2 | .02 | 10,791 | 2 | .02 | |||||||||||||||||||||||||||||||||||
Total commercial real estate |
38,781 | 2 | .01 | 40,548 | 187 | .46 | 39,386 | 14 | .04 | |||||||||||||||||||||||||||||||||||
Residential mortgages |
74,629 | (32 | ) | (.04 | ) | 73,667 | (12 | ) | (.02 | ) | 67,747 | 3 | — | |||||||||||||||||||||||||||||||
Credit card |
21,645 | 512 | 2.37 | 22,332 | 829 | 3.71 | 23,309 | 893 | 3.83 | |||||||||||||||||||||||||||||||||||
Other retail |
||||||||||||||||||||||||||||||||||||||||||||
Retail leasing |
7,710 | 2 | .03 | 8,405 | 81 | .96 | 8,515 | 13 | .15 | |||||||||||||||||||||||||||||||||||
Home equity and second mortgages |
11,228 | (10 | ) | (.09 | ) | 13,894 | (4 | ) | (.03 | ) | 15,659 | (3 | ) | (.02 | ) | |||||||||||||||||||||||||||||
Other |
40,117 | 105 | .26 | 34,456 | 192 | .56 | 32,872 | 249 | .76 | |||||||||||||||||||||||||||||||||||
Total other retail |
59,055 | 97 | .16 | 56,755 | 269 | .47 | 57,046 | 259 | .45 | |||||||||||||||||||||||||||||||||||
Total loans |
$ | 296,965 | $ | 682 | .23 | % | $ | 307,269 | $ | 1,786 | .58 | % | $ | 290,686 | $ | 1,454 | .50 | % |
Analysis of Loan Net Charge-offs Commercial and commercial real estate loan net charge-offs for 2021 were $105 million (0.07 percent of average loans outstanding), compared with $700 million (0.45 percent of average loans outstanding) in 2020. The decrease in net charge-offs in 2021, compared with 2020, reflected lower charge-offs as a result of improving economic conditions in 2021. Residential mortgage loan net charge-offs for 2021 reflected a net recovery of $32 million (0.04 percent of average loans outstanding), compared with a net recovery of $12 million (0.02 percent of average loans outstanding) in 2020. Credit card loan net charge-offs in 2021 were $512 million (2.37 percent of average loans outstanding), compared with $829 million (3.71 percent of average loans outstanding) in 2020. Other retail loan net charge-offs for 2021 were $97 million (0.16 percent of average loans outstanding), compared with $269 million (0.47 percent of average loans outstanding) in 2020. The decrease in total residential mortgage, credit card and other retail loan net charge-offs in 2021, compared with 2020, reflected improving economic conditions. The Company expects net charge-offs to return to more normalized levels over time. |
Analysis and Determination of the Allowance for Credit Losses Management evaluates the appropriateness of the allowance for credit losses on a quarterly basis. Multiple economic scenarios are considered over a three-year reasonable and supportable forecast period, which includes increasing consideration of historical loss experience over years two and three. These economic scenarios are constructed with interrelated projections of multiple economic variables, and loss estimates are produced that consider the historical correlation of those economic variables with credit losses. After the forecast period, the Company fully reverts to long-term historical loss experience, adjusted for prepayments and characteristics of the current loan and lease portfolio, to estimate losses over the remaining life of the portfolio. The economic scenarios are updated at least quarterly and are designed to provide a range of reasonable estimates from better to worse than current expectations. Scenarios are weighted based on the Company’s expectation of economic conditions for the foreseeable future and reflect significant judgment and consideration of uncertainties that exist. Final loss estimates also consider factors affecting credit losses not reflected in the scenarios, due to the unique aspects of current conditions and expectations. These factors may include, but are not limited to, loan servicing practices, regulatory guidance, and/or fiscal and monetary policy actions. Because business processes and credit risks associated with unfunded credit commitments are essentially the same as for loans, the Company utilizes similar processes to estimate its |
44 |
||||||
45 |
||||
TABLE 18 |
Summary of Allowance for Credit Losses |
(Dollars in Millions) | 2021 | 2020 | 2019 | |||||||||
Balance at beginning of year |
$ | 8,010 | $ | 4,491 | $ | 4,441 | ||||||
Change in accounting principle (a) |
— | 1,499 | — | |||||||||
Charge-Offs |
||||||||||||
Commercial |
||||||||||||
Commercial |
206 | 536 | 380 | |||||||||
Lease financing |
16 | 39 | 19 | |||||||||
Total commercial |
222 | 575 | 399 | |||||||||
Commercial real estate |
||||||||||||
Commercial mortgages |
9 | 202 | 17 | |||||||||
Construction and development |
20 | 8 | 4 | |||||||||
Total commercial real estate |
29 | 210 | 21 | |||||||||
Residential mortgages |
18 | 19 | 34 | |||||||||
Credit card |
686 | 975 | 1,028 | |||||||||
Other retail |
||||||||||||
Retail leasing |
26 | 101 | 24 | |||||||||
Home equity and second mortgages |
12 | 16 | 19 | |||||||||
Other |
215 | 284 | 342 | |||||||||
Total other retail |
253 | 401 | 385 | |||||||||
Total charge-offs |
1,208 | 2,180 | 1,867 | |||||||||
Recoveries |
||||||||||||
Commercial |
||||||||||||
Commercial |
109 | 53 | 107 | |||||||||
Lease financing |
10 | 9 | 7 | |||||||||
Total commercial |
119 | 62 | 114 | |||||||||
Commercial real estate |
||||||||||||
Commercial mortgages |
23 | 17 | 5 | |||||||||
Construction and development |
4 | 6 | 2 | |||||||||
Total commercial real estate |
27 | 23 | 7 | |||||||||
Residential mortgages |
50 | 31 | 31 | |||||||||
Credit card |
174 | 146 | 135 | |||||||||
Other retail |
||||||||||||
Retail leasing |
24 | 20 | 11 | |||||||||
Home equity and second mortgages |
22 | 20 | 22 | |||||||||
Other |
110 | 92 | 93 | |||||||||
Total other retail |
156 | 132 | 126 | |||||||||
Total recoveries |
526 | 394 | 413 | |||||||||
Net Charge-Offs |
||||||||||||
Commercial |
||||||||||||
Commercial |
97 | 483 | 273 | |||||||||
Lease financing |
6 | 30 | 12 | |||||||||
Total commercial |
103 | 513 | 285 | |||||||||
Commercial real estate |
||||||||||||
Commercial mortgages |
(14 | ) | 185 | 12 | ||||||||
Construction and development |
16 | 2 | 2 | |||||||||
Total commercial real estate |
2 | 187 | 14 | |||||||||
Residential mortgages |
(32 | ) | (12 | ) | 3 | |||||||
Credit card |
512 | 829 | 893 | |||||||||
Other retail |
||||||||||||
Retail leasing |
2 | 81 | 13 | |||||||||
Home equity and second mortgages |
(10 | ) | (4 | ) | (3 | ) | ||||||
Other |
105 | 192 | 249 | |||||||||
Total other retail |
97 | 269 | 259 | |||||||||
Total net charge-offs |
682 | 1,786 | 1,454 | |||||||||
Provision for credit losses |
(1,173 | ) | 3,806 | 1,504 | ||||||||
Balance at end of year |
$ | 6,155 | $ | 8,010 | $ | 4,491 | ||||||
Components |
||||||||||||
Allowance for loan losses |
$ | 5,724 | $ | 7,314 | $ | 4,020 | ||||||
Liability for unfunded credit commitments |
431 | 696 | 471 | |||||||||
Total allowance for credit losses (1) |
$ | 6,155 | $ | 8,010 | $ | 4,491 | ||||||
Period-end loans(2) |
$ | 312,028 | $ | 297,707 | $ | 296,102 | ||||||
Nonperforming loans (3) |
834 | 1,224 | 692 | |||||||||
Allowance for Credit Losses as a Percentage of |
||||||||||||
Period-end loans(1)/(2) |
1.97 | % | 2.69 | % | 1.52 | % | ||||||
Nonperforming loans (1)/(3) |
738 | 654 | 649 | |||||||||
Nonperforming and accruing loans 90 days or more past due |
471 | 471 | 346 | |||||||||
Nonperforming assets |
701 | 617 | 542 | |||||||||
Net charge-offs |
902 | 448 | 309 |
(a) |
Effective January 1, 2020, the Company adopted accounting guidance which changed impairment recognition of financial instruments to a model that is based on expected losses rather than incurred losses. |
46 |
||||||
TABLE 19 |
Allocation of the Allowance for Credit Losses |
Allowance Amount | Allowance as a Percent of Loans | |||||||||||||||
At December 31 (Dollars in Millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Commercial |
||||||||||||||||
Commercial |
$ | 1,779 | $ | 2,344 | 1.66 | % | 2.41 | % | ||||||||
Lease financing |
70 | 79 | 1.37 | 1.42 | ||||||||||||
Total commercial |
1,849 | 2,423 | 1.65 | 2.36 | ||||||||||||
Commercial Real Estate |
||||||||||||||||
Commercial mortgages |
699 | 894 | 2.43 | 3.14 | ||||||||||||
Construction and development |
424 | 650 | 4.12 | 6.00 | ||||||||||||
Total commercial real estate |
1,123 | 1,544 | 2.88 | 3.93 | ||||||||||||
Residential Mortgages |
565 | 573 | .74 | .75 | ||||||||||||
Credit Card |
1,673 | 2,355 | 7.44 | 10.54 | ||||||||||||
Other Retail |
||||||||||||||||
Retail leasing |
136 | 252 | 1.87 | 3.09 | ||||||||||||
Home equity and second mortgages |
231 | 349 | 2.21 | 2.80 | ||||||||||||
Other |
578 | 514 | 1.31 | 1.41 | ||||||||||||
Total other retail |
945 | 1,115 | 1.53 | 1.96 | ||||||||||||
Total allowance |
$ | 6,155 | $ | 8,010 | 1.97 | % | 2.69 | % |
47 |
||||
December 31, 2021 |
December 31, 2020 |
|||||||
United States unemployment rate for the three months ending (a) |
||||||||
December 31, 2021 |
4.3 | % | 6.8 | % | ||||
June 30, 2022 |
3.6 | 6.2 | ||||||
December 31, 2022 |
3.5 | 5.4 | ||||||
United States real gross domestic product for the three months ending (b) |
||||||||
December 31, 2021 |
2.8 | % | 1.5 | % | ||||
June 30, 2022 |
5.0 | 3.8 | ||||||
December 31, 2022 |
6.4 | 5.7 |
(a) |
Reflects quarterly average of forecasted reported United States unemployment rate. |
(b) |
Reflects cumulative change from December 31, 2019. |
48 |
||||||
TABLE 20 |
Sensitivity of Net Interest Income |
December 31, 2021 | December 31, 2020 | |||||||||||||||||||||||||||||||
Down 50 bps Immediate |
Up 50 bps Immediate |
Down 200 bps Gradual |
Up 200 bps Gradual |
Down 50 bps Immediate |
Up 50 bps Immediate |
Down 200 bps Gradual |
Up 200 bps Gradual |
|||||||||||||||||||||||||
Net interest income |
(3.77 | )% | 3.09 | % | * | 5.39 | % | (4.48 | )% | 4.58 | % | * | 6.57 | % |
* |
Given the level of interest rates, downward rate scenario is not computed. |
49 |
||||
– | To convert fixed-rate debt and available-for-sale |
– | To convert floating-rate debt from floating-rate payments to fixed-rate payments; |
– | To mitigate changes in value of the Company’s unfunded mortgage loan commitments, funded MLHFS and MSRs; |
– | To mitigate remeasurement volatility of foreign currency denominated balances; and |
– | To mitigate the volatility of the Company’s net investment in foreign operations driven by fluctuations in foreign currency exchange rates. |
50 |
||||||
Year Ended December 31 (Dollars in Millions) |
2021 | 2020 | ||||||
Average |
$ | 2 | $ | 2 | ||||
High |
4 | 3 | ||||||
Low |
1 | 1 | ||||||
Period-end |
2 | 2 |
Year Ended December 31 (Dollars in Millions) |
2021 | 2020 | ||||||
Average |
$ | 7 | $ | 6 | ||||
High |
9 | 8 | ||||||
Low |
5 | 4 | ||||||
Period-end |
7 | 5 |
51 |
||||
Year Ended December 31 (Dollars in Millions) |
2021 | 2020 | ||||||
Residential Mortgage Loans Held For Sale and Related Hedges |
||||||||
Average |
$ | 9 | $ | 10 | ||||
High |
19 | 22 | ||||||
Low |
4 | 2 | ||||||
Mortgage Servicing Rights and Related Hedges |
||||||||
Average |
$ | 4 | $ | 19 | ||||
High |
11 | 54 | ||||||
Low |
1 | 1 |
52 |
||||||
TABLE 21 |
Credit Ratings |
Moody’s | S&P Global Ratings | Fitch Ratings | DBRS Morningstar | |||||||||||||
U.S. Bancorp |
||||||||||||||||
Long-term issuer rating |
A2 | A+ | AA- | AA | ||||||||||||
Short-term issuer rating |
A-1 |
F1+ | R-1 (middle) |
|||||||||||||
Senior unsecured debt |
A2 | A+ | A+ | AA | ||||||||||||
Subordinated debt |
A2 | A | A | AA (low) | ||||||||||||
Junior subordinated debt |
A3 | |||||||||||||||
Preferred stock |
Baa1 | BBB+ | BBB+ | A | ||||||||||||
Commercial paper |
P-1 |
F1+ | ||||||||||||||
U.S. Bank National Association |
||||||||||||||||
Long-term issuer rating |
A1 | AA- | AA- | AA (high) | ||||||||||||
Short-term issuer rating |
P-1 |
A-1+ |
F1+ | R-1 (high) |
||||||||||||
Long-term deposits |
Aa2 | AA | AA (high) | |||||||||||||
Short-term deposits |
P-1 |
F1+ | ||||||||||||||
Senior unsecured debt |
A1 | AA- | AA- | AA (high) | ||||||||||||
Subordinated debt |
A1 | A+ | AA | |||||||||||||
Commercial paper |
P-1 |
A-1+ |
F1+ | |||||||||||||
Counterparty risk assessment |
Aa3(cr)/P-1(cr) |
|||||||||||||||
Counterparty risk rating |
A1/P-1 |
|||||||||||||||
Baseline credit assessment |
a1 |
53 |
||||
54 |
||||||
55 |
||||
TABLE 22 |
Regulatory Capital Ratios |
At December 31 (Dollars in Millions) | 2021 | 2020 | ||||||
Basel III standardized approach: |
||||||||
Common equity tier 1 capital |
$ | 41,701 | $ | 38,045 | ||||
Tier 1 capital |
48,516 | 44,474 | ||||||
Total risk-based capital |
56,250 | 52,602 | ||||||
Risk-weighted assets |
418,571 | 393,648 | ||||||
Common equity tier 1 capital as a percent of risk-weighted assets |
10.0 | % | 9.7 | % | ||||
Tier 1 capital as a percent of risk-weighted assets |
11.6 | 11.3 | ||||||
Total risk-based capital as a percent of risk-weighted assets |
13.4 | 13.4 | ||||||
Tier 1 capital as a percent of adjusted quarterly average assets (leverage ratio) |
8.6 | 8.3 | ||||||
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure (total leverage exposure ratio) |
6.9 | 7.3 |
56 |
||||||
57 |
||||
TABLE 23 |
Line of Business Financial Performance |
Corporate and Commercial Banking |
Consumer and Business Banking |
|||||||||||||||||||||||||||||||||||
Year Ended December 31 (Dollars in Millions) |
2021 | 2020 | Percent Change |
2021 | 2020 | Percent Change |
||||||||||||||||||||||||||||||
Condensed Income Statement |
||||||||||||||||||||||||||||||||||||
Net interest income (taxable-equivalent basis) |
$ | 2,900 | $ | 3,411 | (15.0 | )% | $ | 6,077 | $ | 5,759 | 5.5 | % | ||||||||||||||||||||||||
Noninterest income |
1,035 | 1,117 | (7.3 | ) | 2,501 | 3,177 | (21.3 | ) | ||||||||||||||||||||||||||||
Total net revenue |
3,935 | 4,528 | (13.1 | ) | 8,578 | 8,936 | (4.0 | ) | ||||||||||||||||||||||||||||
Noninterest expense |
1,678 | 1,711 | (1.9 | ) | 5,690 | 5,470 | 4.0 | |||||||||||||||||||||||||||||
Other intangibles |
— | — | — | 12 | 16 | (25.0 | ) | |||||||||||||||||||||||||||||
Total noninterest expense |
1,678 | 1,711 | (1.9 | ) | 5,702 | 5,486 | 3.9 | |||||||||||||||||||||||||||||
Income before provision and income taxes |
2,257 | 2,817 | (19.9 | ) | 2,876 | 3,450 | (16.6 | ) | ||||||||||||||||||||||||||||
Provision for credit losses |
89 | 604 | (85.3 | ) | (144 | ) | 291 | * | ||||||||||||||||||||||||||||
Income (loss) before income taxes |
2,168 | 2,213 | (2.0 | ) | 3,020 | 3,159 | (4.4 | ) | ||||||||||||||||||||||||||||
Income taxes and taxable-equivalent adjustment |
542 | 554 | (2.2 | ) | 755 | 791 | (4.6 | ) | ||||||||||||||||||||||||||||
Net income (loss) |
1,626 | 1,659 | (2.0 | ) | 2,265 | 2,368 | (4.3 | ) | ||||||||||||||||||||||||||||
Net (income) loss attributable to noncontrolling interests |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Net income (loss) attributable to U.S. Bancorp |
$ | 1,626 | $ | 1,659 | (2.0 | ) | $ | 2,265 | $ | 2,368 | (4.3 | ) | ||||||||||||||||||||||||
Average Balance Sheet |
||||||||||||||||||||||||||||||||||||
Commercial |
$ | 78,351 | $ | 89,841 | (12.8 | )% | $ | 8,656 | $ | 9,127 | (5.2 | )% | ||||||||||||||||||||||||
Commercial real estate |
24,819 | 25,692 | (3.4 | ) | 10,944 | 11,977 | (8.6 | ) | ||||||||||||||||||||||||||||
Residential mortgages |
26 | 19 | 36.8 | 67,442 | 67,981 | (.8 | ) | |||||||||||||||||||||||||||||
Credit card |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Other retail |
12 | 11 | 9.1 | 54,040 | 52,174 | 3.6 | ||||||||||||||||||||||||||||||
Total loans |
103,208 | 115,563 | (10.7 | ) | 141,082 | 141,259 | (.1 | ) | ||||||||||||||||||||||||||||
Goodwill |
1,715 | 1,647 | 4.1 | 3,428 | 3,500 | (2.1 | ) | |||||||||||||||||||||||||||||
Other intangible assets |
5 | 6 | (16.7 | ) | 2,760 | 2,105 | 31.1 | |||||||||||||||||||||||||||||
Assets |
115,194 | 128,038 | (10.0 | ) | 161,571 | 159,191 | 1.5 | |||||||||||||||||||||||||||||
Noninterest-bearing deposits |
61,272 | 44,309 | 38.3 | 33,855 | 30,467 | 11.1 | ||||||||||||||||||||||||||||||
Interest checking |
14,306 | 14,359 | (.4 | ) | 69,718 | 55,512 | 25.6 | |||||||||||||||||||||||||||||
Savings products |
47,815 | 54,578 | (12.4 | ) | 75,404 | 62,702 | 20.3 | |||||||||||||||||||||||||||||
Time deposits |
9,125 | 19,201 | (52.5 | ) | 13,312 | 13,322 | (.1 | ) | ||||||||||||||||||||||||||||
Total deposits |
132,518 | 132,447 | .1 | 192,289 | 162,003 | 18.7 | ||||||||||||||||||||||||||||||
Total U.S. Bancorp shareholders’ equity |
13,928 | 15,063 | (7.5 | ) | 12,337 | 12,739 | (3.2 | ) |
* |
Not meaningful |
58 |
||||||
Wealth Management and Investment Services |
Payment Services |
Treasury and Corporate Support |
Consolidated Company |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | Percent Change |
2021 | 2020 | Percent Change |
2021 | 2020 | Percent Change |
2021 | 2020 | Percent Change |
|||||||||||||||||||||||||||||||||||||||||||||||||
$ | 1,002 | $ | 1,246 | (19.6 | )% | $ | 2,458 | $ | 2,562 | (4.1 | )% | $ | 163 | $ | (54 | ) | * | % | $ | 12,600 | $ | 12,924 | (2.5 | )% | ||||||||||||||||||||||||||||||||||||
2,221 | 2,022 | 9.8 | 3,550 | 3,124 | 13.6 | 920 | 961 | (4.3 | ) | 10,227 | 10,401 | (1.7 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
3,223 | 3,268 | (1.4 | ) | 6,008 | 5,686 | 5.7 | 1,083 | 907 | 19.4 | 22,827 | 23,325 | (2.1 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
2,045 | 1,961 | 4.3 | 3,231 | 3,123 | 3.5 | 925 | 928 | (.3 | ) | 13,569 | 13,193 | 2.8 | ||||||||||||||||||||||||||||||||||||||||||||||||
14 | 12 | 16.7 | 133 | 148 | (10.1 | ) | — | — | — | 159 | 176 | (9.7 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
2,059 | 1,973 | 4.4 | 3,364 | 3,271 | 2.8 | 925 | 928 | (.3 | ) | 13,728 | 13,369 | 2.7 | ||||||||||||||||||||||||||||||||||||||||||||||||
1,164 | 1,295 | (10.1 | ) | 2,644 | 2,415 | 9.5 | 158 | (21 | ) | * | 9,099 | 9,956 | (8.6 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
47 | 40 | 17.5 | 349 | 681 | (48.8 | ) | (1,514 | ) | 2,190 | * | (1,173 | ) | 3,806 | * | ||||||||||||||||||||||||||||||||||||||||||||||
1,117 | 1,255 | (11.0 | ) | 2,295 | 1,734 | 32.4 | 1,672 | (2,211 | ) | * | 10,272 | 6,150 | 67.0 | |||||||||||||||||||||||||||||||||||||||||||||||
280 | 314 | (10.8 | ) | 575 | 434 | 32.5 | 135 | (928 | ) | * | 2,287 | 1,165 | 96.3 | |||||||||||||||||||||||||||||||||||||||||||||||
837 | 941 | (11.1 | ) | 1,720 | 1,300 | 32.3 | 1,537 | (1,283 | ) | * | 7,985 | 4,985 | 60.2 | |||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | (22 | ) | (26 | ) | 15.4 | (22 | ) | (26 | ) | 15.4 | |||||||||||||||||||||||||||||||||||||||||||||
$ | 837 | $ | 941 | (11.1 | ) | $ | 1,720 | $ | 1,300 | 32.3 | $ | 1,515 | $ | (1,309 | ) | * | $ | 7,963 | $ | 4,959 | 60.6 | |||||||||||||||||||||||||||||||||||||||
$ | 5,407 | $ | 4,755 | 13.7 | % | $ | 9,004 | $ | 8,936 | .8 | % | $ | 1,437 | $ | 1,308 | 9.9 | % | $ | 102,855 | $ | 113,967 | (9.8 | )% | |||||||||||||||||||||||||||||||||||||
735 | 738 | (.4 | ) | — | — | — | 2,283 | 2,141 | 6.6 | 38,781 | 40,548 | (4.4 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
7,159 | 5,664 | 26.4 | — | — | — | 2 | 3 | (33.3 | ) | 74,629 | 73,667 | 1.3 | ||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | 21,645 | 22,332 | (3.1 | ) | — | — | — | 21,645 | 22,332 | (3.1 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
4,796 | 4,299 | 11.6 | 207 | 271 | (23.6 | ) | — | — | — | 59,055 | 56,755 | 4.1 | ||||||||||||||||||||||||||||||||||||||||||||||||
18,097 | 15,456 | 17.1 | 30,856 | 31,539 | (2.2 | ) | 3,722 | 3,452 | 7.8 | 296,965 | 307,269 | (3.4 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
1,628 | 1,617 | .7 | 3,185 | 3,060 | 4.1 | — | — | — | 9,956 | 9,824 | 1.3 | |||||||||||||||||||||||||||||||||||||||||||||||||
84 | 39 | * | 508 | 581 | (12.6 | ) | — | — | — | 3,357 | 2,731 | 22.9 | ||||||||||||||||||||||||||||||||||||||||||||||||
21,236 | 18,564 | 14.4 | 36,553 | 36,497 | .2 | 221,978 | 188,917 | 17.5 | 556,532 | 531,207 | 4.8 | |||||||||||||||||||||||||||||||||||||||||||||||||
24,587 | 17,149 | 43.4 | 4,861 | 4,351 | 11.7 | 2,629 | 2,263 | 16.2 | 127,204 | 98,539 | 29.1 | |||||||||||||||||||||||||||||||||||||||||||||||||
18,605 | 14,147 | 31.5 | — | — | — | 569 | 258 | * | 103,198 | 84,276 | 22.5 | |||||||||||||||||||||||||||||||||||||||||||||||||
55,243 | 59,768 | (7.6 | ) | 145 | 120 | 20.8 | 780 | 760 | 2.6 | 179,387 | 177,928 | .8 | ||||||||||||||||||||||||||||||||||||||||||||||||
1,770 | 3,610 | (51.0 | ) | — | 1 | * | 285 | 1,738 | (83.6 | ) | 24,492 | 37,872 | (35.3 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
100,205 | 94,674 | 5.8 | 5,006 | 4,472 | 11.9 | 4,263 | 5,019 | (15.1 | ) | 434,281 | 398,615 | 8.9 | ||||||||||||||||||||||||||||||||||||||||||||||||
3,154 | 2,936 | 7.4 | 7,643 | 7,462 | 2.4 | 16,748 | 14,046 | 19.2 | 53,810 | 52,246 | 3.0 |
59 |
||||
– | Tangible common equity to tangible assets, |
– | Tangible common equity to risk-weighted assets, and |
– | Common equity tier 1 capital to risk-weighted assets, reflecting the full implementation of the CECL methodology. |
60 |
||||||
At December 31 (Dollars in Millions) | 2021 | 2020 | ||||||
Total equity |
$ | 55,387 | $ | 53,725 | ||||
Preferred stock |
(6,371 | ) | (5,983 | ) | ||||
Noncontrolling interests |
(469 | ) | (630 | ) | ||||
Goodwill (net of deferred tax liability) (1) |
(9,323 | ) | (9,014 | ) | ||||
Intangible assets, other than mortgage servicing rights |
(785 | ) | (654 | ) | ||||
|
|
|||||||
Tangible common equity (a) |
38,439 | 37,444 | ||||||
Common equity tier 1 capital, determined in accordance with transitional regulatory capital requirements related to the CECL methodology implementation |
41,701 | 38,045 | ||||||
Adjustments (2) |
(1,733 | ) | (1,733 | ) | ||||
|
|
|||||||
Common equity tier 1 capital, reflecting the full implementation of the CECL methodology (b) |
39,968 | 36,312 | ||||||
Total assets |
573,284 | 553,905 | ||||||
Goodwill (net of deferred tax liability) (1) |
(9,323 | ) | (9,014 | ) | ||||
Intangible assets, other than mortgage servicing rights |
(785 | ) | (654 | ) | ||||
|
|
|||||||
Tangible assets (c) |
563,176 | 544,237 | ||||||
Risk-weighted assets, determined in accordance with prescribed regulatory capital requirements effective for the Company (d) |
418,571 | 393,648 | ||||||
Adjustments (3) |
(357 | ) | (1,471 | ) | ||||
|
|
|||||||
Risk-weighted assets, reflecting the full implementation of the CECL methodology (e) |
418,214 | 392,177 | ||||||
Ratios |
||||||||
Tangible common equity to tangible assets (a)/(c) |
6.8 | % | 6.9 | % | ||||
Tangible common equity to risk-weighted assets (a)/(d) |
9.2 | 9.5 | ||||||
Common equity tier 1 capital to risk-weighted assets, reflecting the full implementation of the CECL methodology (b)/(e) |
9.6 | 9.3 |
Year Ended December 31 | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Net interest income |
$ 12,494 | $ 12,825 | $ 13,052 | |||||||||
Taxable-equivalent adjustment (4) |
106 | 99 | 103 | |||||||||
|
|
|||||||||||
Net interest income, on a taxable-equivalent basis |
12,600 | 12,924 | 13,155 | |||||||||
Net interest income, on a taxable-equivalent basis (as calculated above) |
12,600 | 12,924 | 13,155 | |||||||||
Noninterest income |
10,227 | 10,401 | 9,831 | |||||||||
Less: Securities gains (losses), net |
103 | 177 | 73 | |||||||||
|
|
|||||||||||
Total net revenue, excluding net securities gains (losses) (f) |
22,724 | 23,148 | 22,913 | |||||||||
Noninterest expense (g) |
13,728 | 13,369 | 12,785 | |||||||||
Efficiency ratio (g)/(f) |
60.4 | % | 57.8 | % | 55.8 | % |
Year Ended December 31, 2021 | ||||||||||||
Net Revenue | Net Revenue as a Percent of the Consolidated Company |
Net Revenue as a Percent of the Consolidated Company Excluding Treasury and Corporate Support |
||||||||||
Corporate and Commercial Banking |
$ | 3,935 | 17 | % | 18 | % | ||||||
Consumer and Business Banking |
8,578 | 38 | 39 | |||||||||
Wealth Management and Investment Services |
3,223 | 14 | 15 | |||||||||
Payment Services |
6,008 | 26 | 28 | |||||||||
|
|
|||||||||||
Treasury and Corporate Support |
1,083 | 5 | ||||||||||
|
|
|
|
|||||||||
Consolidated Company |
22,827 | 100 | % | |||||||||
|
|
|||||||||||
Less: Treasury and Corporate Support |
1,083 | |||||||||||
|
|
|||||||||||
Consolidated Company excluding Treasury and Corporate Support |
$ | 21,744 | 100 | % |
(1) |
Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements. |
(2) |
Includes the estimated increase in the allowance for credit losses related to the adoption of the CECL methodology net of deferred taxes. |
(3) |
Includes the impact of the estimated increase in the allowance for credit losses related to the adoption of the CECL methodology. |
(4) |
Based on federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes. |
61 |
||||
62 |
||||||
63 |
||||
64 |
||||||
65 |
||||
Description of the Matter |
The Company’s loan and lease portfolio and the associated allowance for credit losses (ACL), were $312.0 billion and $6.2 billion as of December 31, 2021, respectively. The provision for credit losses was a benefit of $1.2 billion for the year ended December 31, 2021. As discussed in Notes 1 and 6 to the financial statements, the ACL is established for current expected credit losses on the Company’s loan and lease portfolio, including unfunded credit commitments, by utilizing forward-looking expected loss models. When determining expected losses, the Company uses multiple probability weighted economic scenarios over a reasonable and supportable forecast period and then fully reverts to historical loss experience to estimate losses over the remaining asset lives. Model estimates are adjusted to consider any relevant changes in portfolio composition, lending policies, underwriting standards, risk management practices or economic conditions that would affect the accuracy of the model. Additionally, management may adjust ACL for other qualitative factors such as model imprecision, imprecision in economic scenario assumptions, and emerging risks related to either changes in the environment that are affecting specific portfolio segments, or changes in portfolio concentrations. |
66 |
||||||
Auditing management’s ACL estimate and related provision for credit losses was complex due to the highly judgmental nature of the probability weighted economic scenarios, expected loss models, as well as model and qualitative factor adjustments. | ||
How We Addressed the Matter in Our Audit |
We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s process for establishing the ACL, including management’s controls over: 1) selection and implementation of forward-looking economic scenarios and the probability weights assigned to them; 2) expected loss models, including model validation, implementation, monitoring, the completeness and accuracy of key inputs and assumptions used in the models, and management’s output assessment and related adjustments; 3) adjustments to reflect management’s consideration of qualitative factors; 4) the ACL methodology and governance process. With the support of specialists, we assessed the economic scenarios and related probability weights by, among other procedures, evaluating management’s methodology and agreeing a sample of key economic variables used to external sources. We also performed and considered the results of various sensitivity analyses and analytical procedures, including comparison of a sample of the key economic variables to alternative external sources, historical statistics and peer bank information. With respect to expected loss models, with the support of specialists, we evaluated model calculation design and reperformed the calculation for a sample of models. We also tested the appropriateness of key inputs and assumptions used in these models by agreeing a sample of inputs to internal sources. As to model adjustments, with the support of specialists, we evaluated management’s estimate methodology and assessment of factors that could potentially impact the accuracy of expected loss models. We also recalculated a sample of model adjustments and tested internal and external data used by agreeing a sample of inputs to internal and external sources. Regarding the completeness of qualitative factors identified and incorporated into measuring the ACL, we evaluated the potential impact of imprecision in the expected loss models and economic scenario assumptions; emerging risks related to changes in the environment impacting specific portfolio segments and portfolio concentrations. We also evaluated and tested internal and external data used in the qualitative adjustments by agreeing significant inputs and underlying data to internal and external sources. We evaluated the overall ACL amount, including model estimates and adjustments, qualitative factors adjustments, and whether the recorded ACL appropriately reflects expected credit losses on the loan and lease portfolio and unfunded credit commitments. We reviewed historical loss statistics, peer-bank information, subsequent events and transactions and considered whether they corroborate or contradict the Company’s measurement of the ACL. We searched for and evaluated information that corroborates or contradicts management’s forecasted assumptions and related probability weights as well as identification and measurement of adjustments to model estimates and qualitative factors. |
67 |
||||
68 |
||||||
Consolidated Financial Statements |
||||
70 | ||||
71 | ||||
72 | ||||
73 | ||||
74 | ||||
Notes to Consolidated Financial Statements |
||||
75 | ||||
82 | ||||
82 | ||||
82 | ||||
83 | ||||
86 | ||||
92 | ||||
93 | ||||
94 | ||||
95 | ||||
96 | ||||
97 | ||||
97 | ||||
98 | ||||
99 | ||||
104 | ||||
104 | ||||
109 | ||||
111 | ||||
113 | ||||
117 | ||||
120 | ||||
126 | ||||
129 | ||||
132 | ||||
133 |
69 |
||||
At December 31 (Dollars in Millions) | 2021 | 2020 | ||||||
Assets |
||||||||
Cash and due from banks |
$ | $ | ||||||
Investment securities |
||||||||
Held-to-maturity |
– | |||||||
Available-for-sale (a) |
||||||||
Loans held for sale (including $ |
||||||||
Loans |
||||||||
Commercial |
||||||||
Commercial real estate |
||||||||
Residential mortgages |
||||||||
Credit card |
||||||||
Other retail |
||||||||
Total loans |
||||||||
Less allowance for loan losses |
( |
) | ( |
) | ||||
Net loans |
||||||||
Premises and equipment |
||||||||
Goodwill |
||||||||
Other intangible assets |
||||||||
Other assets (including $ (a) |
||||||||
Total assets |
$ | $ | ||||||
Liabilities and Shareholders’ Equity |
||||||||
Deposits |
||||||||
Noninterest-bearing |
$ | $ | ||||||
Interest-bearing |
||||||||
Total deposits |
||||||||
Short-term borrowings |
||||||||
Long-term debt |
||||||||
Other liabilities |
||||||||
Total liabilities |
||||||||
Shareholders’ equity |
||||||||
Preferred stock |
||||||||
Common stock, par value $ |
||||||||
Capital surplus |
||||||||
Retained earnings |
||||||||
Less cost of common stock in treasury: 2021 — |
( |
) | ( |
) | ||||
Accumulated other comprehensive income (loss) |
( |
) | ||||||
Total U.S. Bancorp shareholders’ equity |
||||||||
Noncontrolling interests |
||||||||
Total equity |
||||||||
Total liabilities and equity |
$ | $ |
(a) |
Includes only collateral pledged by the Company where counterparties have the right to sell or pledge the collateral. |
70 |
||||||
Year Ended December 31 (Dollars and Shares in Millions, Except Per Share Data) | 2021 | 2020 | 2019 | |||||||||
Interest Income |
||||||||||||
Loans |
$ | $ | $ | |||||||||
Loans held for sale |
||||||||||||
Investment securities |
||||||||||||
Other interest income |
||||||||||||
Total interest income |
||||||||||||
Interest Expense |
||||||||||||
Deposits |
||||||||||||
Short-term borrowings |
||||||||||||
Long-term debt |
||||||||||||
Total interest expense |
||||||||||||
Net interest income |
||||||||||||
Provision for credit losses |
( |
) | ||||||||||
Net interest income after provision for credit losses |
||||||||||||
Noninterest Income |
||||||||||||
Credit and debit card revenue |
||||||||||||
Corporate payment products revenue |
||||||||||||
Merchant processing services |
||||||||||||
Trust and investment management fees |
||||||||||||
Deposit service charges |
||||||||||||
Treasury management fees |
||||||||||||
Commercial products revenue |
||||||||||||
Mortgage banking revenue |
||||||||||||
Investment products fees |
||||||||||||
Securities gains (losses), net |
||||||||||||
Other |
||||||||||||
Total noninterest income |
||||||||||||
Noninterest Expense |
||||||||||||
Compensation |
||||||||||||
Employee benefits |
||||||||||||
Net occupancy and equipment |
||||||||||||
Professional services |
||||||||||||
Marketing and business development |
||||||||||||
Technology and communications |
||||||||||||
Postage, printing and supplies |
||||||||||||
Other intangibles |
||||||||||||
Other |
||||||||||||
Total noninterest expense |
||||||||||||
Income before income taxes |
||||||||||||
Applicable income taxes |
||||||||||||
Net income |
||||||||||||
Net (income) loss attributable to noncontrolling interests |
( |
) | ( |
) | ( |
) | ||||||
Net income attributable to U.S. Bancorp |
$ | $ | $ | |||||||||
Net income applicable to U.S. Bancorp common shareholders |
$ | $ | $ | |||||||||
Earnings per common share |
$ | $ | $ | |||||||||
Diluted earnings per common share |
$ | $ | $ | |||||||||
Average common shares outstanding |
||||||||||||
Average diluted common shares outstanding |
71 |
||||
Year Ended December 31 (Dollars in Millions) | 2021 | 2020 | 2019 | |||||||||
Net income |
$ | $ | $ | |||||||||
Other Comprehensive Income (Loss) |
||||||||||||
Changes in unrealized gains (losses) on investment securities available-for-sale |
( |
) | ||||||||||
Unrealized gains (losses) on held-to-maturity available-for-sale |
– | – | ||||||||||
Changes in unrealized gains (losses) on derivative hedges |
( |
) | ( |
) | ||||||||
Foreign currency translation |
||||||||||||
Changes in unrealized gains (losses) on retirement plans |
( |
) | ( |
) | ||||||||
Reclassification to earnings of realized (gains) losses |
( |
) | ||||||||||
Income taxes related to other comprehensive income (loss) |
( |
) | ( |
) | ||||||||
Total other comprehensive income (loss) |
( |
) | ||||||||||
Comprehensive income |
||||||||||||
Comprehensive (income) loss attributable to noncontrolling interests |
( |
) | ( |
) | ( |
) | ||||||
Comprehensive income attributable to U.S. Bancorp |
$ | $ | $ |
72 |
||||||
U.S. Bancorp Shareholders | ||||||||||||||||||||||||||||||||||||||||
(Dollars and Shares in Millions, Except Per Share Data) | Common Shares Outstanding |
Preferred Stock |
Common Stock |
Capital Surplus |
Retained Earnings |
Treasury Stock |
Accumulated Other Comprehensive Income (Loss) |
Total U.S. Bancorp Shareholders’ Equity |
Noncontrolling Interests |
Total Equity |
||||||||||||||||||||||||||||||
Balance December 31, 2018 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||
Changes in accounting principle |
||||||||||||||||||||||||||||||||||||||||
Net income (loss) |
||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) |
||||||||||||||||||||||||||||||||||||||||
Preferred stock dividends (a) |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Common stock dividends ($ |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Issuance of common and treasury stock |
( |
) | ||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests |
– | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||||
Net other changes in noncontrolling interests |
– | |||||||||||||||||||||||||||||||||||||||
Stock option and restricted stock grants |
||||||||||||||||||||||||||||||||||||||||
Balance December 31, 2019 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||
Change in accounting principle (b) |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Net income (loss) |
||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) |
||||||||||||||||||||||||||||||||||||||||
Preferred stock dividends (c) |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Common stock dividends ($ |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Issuance of preferred stock |
||||||||||||||||||||||||||||||||||||||||
Call of preferred stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Issuance of common and treasury stock |
( |
) | ||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests |
– | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||||
Net other changes in noncontrolling interests |
– | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||||
Stock option and restricted stock grants |
||||||||||||||||||||||||||||||||||||||||
Balance December 31, 2020 |
$ | $ | $ | $ | $ | ( |
) | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Net income (loss) |
||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Preferred stock dividends (d) |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Common stock dividends ($ |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Issuance of preferred stock |
||||||||||||||||||||||||||||||||||||||||
Call and redemption of preferred stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Issuance of common and treasury stock |
( |
) | ||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests |
– | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||||
Purchase of noncontrolling interests |
– | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||||
Net other changes in noncontrolling interests |
– | |||||||||||||||||||||||||||||||||||||||
Stock option and restricted stock grants |
||||||||||||||||||||||||||||||||||||||||
Balance December 31, 2021 |
$ | $ | $ | $ | $ | ( |
) | ($ | ) | $ | $ | $ |
(a) |
Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series H, Series I, Series J and Series K Non-Cumulative Perpetual Preferred Stock of $ |
(b) |
Effective January 1, 2020, the Company adopted accounting guidance which changed impairment recognition of financial instruments to a model that is based on expected losses rather than incurred losses. Upon adoption, the Company increased its allowance for credit losses and reduced retained earnings net of deferred taxes through a cumulative-effect adjustment. |
(c) |
Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series H, Series I, Series J, Series K and Series L Non-Cumulative Perpetual Preferred Stock of $ |
(d) |
Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series I, Series J, Series K, Series L, Series M and Series N Non-Cumulative Perpetual Preferred Stock of $ |
73 |
||||
Year Ended December 31 (Dollars in Millions) | 2021 | 2020 | 2019 | |||||||||
Operating Activities |
||||||||||||
Net income attributable to U.S. Bancorp |
$ | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities |
||||||||||||
Provision for credit losses |
( |
) | ||||||||||
Depreciation and amortization of premises and equipment |
||||||||||||
Amortization of intangibles |
||||||||||||
(Gain) loss on sale of loans held for sale |
( |
) | ( |
) | ( |
) | ||||||
(Gain) loss on sale of securities and other assets |
( |
) | ( |
) | ( |
) | ||||||
Loans originated for sale, net of repayments |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from sales of loans held for sale |
||||||||||||
Other, net |
( |
) | ||||||||||
|
|
|||||||||||
Net cash provided by operating activities |
||||||||||||
Investing Activities |
||||||||||||
Proceeds from sales of available-for-sale |
||||||||||||
Proceeds from maturities of held-to-maturity |
– | |||||||||||
Proceeds from maturities of available-for-sale |
||||||||||||
Purchases of held-to-maturity |
( |
) | – | ( |
) | |||||||
Purchases of available-for-sale |
( |
) | ( |
) | ( |
) | ||||||
Net (increase) decrease in loans outstanding |
( |
) | ( |
) | ||||||||
Proceeds from sales of loans |
||||||||||||
Purchases of loans |
( |
) | ( |
) | ( |
) | ||||||
Net decrease (increase) in securities purchased under agreements to resell |
( |
) | ||||||||||
Other, net |
( |
) | ( |
) | ||||||||
|
|
|||||||||||
Net cash used in investing activities |
( |
) | ( |
) | ( |
) | ||||||
Financing Activities |
||||||||||||
Net increase in deposits |
||||||||||||
Net increase (decrease) in short-term borrowings |
( |
) | ||||||||||
Proceeds from issuance of long-term debt |
||||||||||||
Principal payments or redemption of long-term debt |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from issuance of preferred stock |
– | |||||||||||
Proceeds from issuance of common stock |
||||||||||||
Repurchase of preferred stock |
( |
) | – | – | ||||||||
Repurchase of common stock |
( |
) | ( |
) | ( |
) | ||||||
Cash dividends paid on preferred stock |
( |
) | ( |
) | ( |
) | ||||||
Cash dividends paid on common stock |
( |
) | ( |
) | ( |
) | ||||||
Purchase of noncontrolling interests |
( |
) | – | – | ||||||||
|
|
|||||||||||
Net cash provided by financing activities |
||||||||||||
|
|
|||||||||||
Change in cash and due from banks |
( |
) | ||||||||||
Cash and due from banks at beginning of period |
||||||||||||
|
|
|||||||||||
Cash and due from banks at end of period |
$ | $ | $ | |||||||||
|
|
|||||||||||
Supplemental Cash Flow Disclosures |
||||||||||||
Cash paid for income taxes |
$ | $ | $ | |||||||||
Cash paid for interest |
||||||||||||
Noncash transfer of held-to-maturity available-for-sale |
– | – | ||||||||||
Noncash transfer of available-for-sale held-to-maturity |
– | – | ||||||||||
Net noncash transfers to foreclosed property |
||||||||||||
|
|
|||||||||||
Acquisitions |
||||||||||||
Assets (sold) acquired |
$ | $ | |
|
$ | |
||||||
Liabilities sold (assumed) |
( |
) | ( |
) |
|
|||||||
|
|
|||||||||||
Net |
$ | $ | |
|
$ | |
74 |
||||||
NOTE 1 |
Significant Accounting Policies |
75 |
||||
76 |
||||||
77 |
||||
78 |
||||||
79 |
||||
80 |
||||||
81 |
||||
NOTE 2 |
Accounting Changes |
NOTE 3 |
Business Combinations |
NOTE 4 |
Restrictions on Cash and Due from | |
Banks |
82 |
||||||
NOTE 5 |
Investment Securities |
2021 | 2020 | |||||||||||||||||||||||||||||||
(Dollars in Millions) | Amortized Cost |
Unrealized Gains |
Unrealized Losses |
Fair Value |
Amortized Cost |
Unrealized Gains |
Unrealized Losses |
Fair Value |
||||||||||||||||||||||||
Held-to-maturity |
||||||||||||||||||||||||||||||||
Residential agency mortgage-backed securities |
$ | $ | $ | ( |
) | $ | $ | – | $ | – | $ | – | $ | – | ||||||||||||||||||
Total held-to-maturity |
$ | $ | $ | ( |
) | $ | $ | – | $ | – | $ | – | $ | – | ||||||||||||||||||
Available-for-sale |
||||||||||||||||||||||||||||||||
U.S. Treasury and agencies |
$ | $ | $ | ( |
) | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||||||
Mortgage-backed securities |
||||||||||||||||||||||||||||||||
Residential agency |
( |
) | ( |
) | ||||||||||||||||||||||||||||
Commercial agency |
( |
) | ( |
) | ||||||||||||||||||||||||||||
Asset-backed securities |
– | – | ||||||||||||||||||||||||||||||
Obligations of state and political subdivisions |
( |
) | – | |||||||||||||||||||||||||||||
Other |
– | – | – | – | ||||||||||||||||||||||||||||
Total available-for-sale |
$ | $ | $ | ( |
) | $ | $ | $ | $ | ( |
) | $ |
Year Ended December 31 (Dollars in Millions) | 2021 | 2020 | 2019 | |||||||||
Taxable |
$ | $ | $ | |||||||||
Non-taxable |
||||||||||||
Total interest income from investment securities |
$ | $ | $ |
Year Ended December 31 (Dollars in Millions) | 2021 | 2020 | 2019 | |||||||||
Realized gains |
$ | $ | $ | |||||||||
Realized losses |
( |
) | ( |
) | ( |
) | ||||||
Net realized gains |
$ | $ | $ | |||||||||
Income tax on net realized gains |
$ | $ | $ |
83 |
||||
Less Than 12 Months | 12 Months or Greater | Total | ||||||||||||||||||||||
(Dollars in Millions) | Fair Value |
Unrealized Losses |
Fair Value |
Unrealized Losses |
Fair Value |
Unrealized Losses |
||||||||||||||||||
U.S. Treasury and agencies |
$ | $ | ( |
) | $ | $ | ( |
) | $ | $ | ( |
) | ||||||||||||
Residential agency mortgage-backed securities |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Commercial agency mortgage-backed securities |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Asset-backed securities |
– | – | – | – | ||||||||||||||||||||
Obligations of state and political subdivisions |
( |
) | – | – | ( |
) | ||||||||||||||||||
Other |
– | – | – | – | ||||||||||||||||||||
Total investment securities |
$ | $ | ( |
) | $ | $ | ( |
) | $ | $ | ( |
) |
84 |
||||||
(Dollars in Millions) | Amortized Cost |
Fair Value | Weighted- Average Maturity in Years |
Weighted- Average Yield (e) |
||||||||||||
Held-to-maturity |
||||||||||||||||
Mortgage-Backed Securities (a) |
||||||||||||||||
Maturing in one year or less |
$ | – | $ | – | – | – | % | |||||||||
Maturing after one year through five years |
||||||||||||||||
Maturing after five years through ten years |
||||||||||||||||
Maturing after ten years |
– | – | – | – | ||||||||||||
Total |
$ | $ | % | |||||||||||||
Total held-to-maturity |
$ | $ | % | |||||||||||||
Available-for-sale |
||||||||||||||||
U.S. Treasury and Agencies |
||||||||||||||||
Maturing in one year or less |
$ | $ | % | |||||||||||||
Maturing after one year through five years |
||||||||||||||||
Maturing after five years through ten years |
||||||||||||||||
Maturing after ten years |
||||||||||||||||
Total |
$ | $ | % | |||||||||||||
Mortgage-Backed Securities (a) |
||||||||||||||||
Maturing in one year or less |
$ | $ | % | |||||||||||||
Maturing after one year through five years |
||||||||||||||||
Maturing after five years through ten years |
||||||||||||||||
Maturing after ten years |
||||||||||||||||
Total |
$ | $ | % | |||||||||||||
Asset-Backed Securities (a) |
||||||||||||||||
Maturing in one year or less |
$ | – | $ | – | % | |||||||||||
Maturing after one year through five years |
||||||||||||||||
Maturing after five years through ten years |
||||||||||||||||
Maturing after ten years |
– | |||||||||||||||
Total |
$ | $ | % | |||||||||||||
Obligations of State and Political Subdivisions (b) (c) |
||||||||||||||||
Maturing in one year or less |
$ | $ | % | |||||||||||||
Maturing after one year through five years |
||||||||||||||||
Maturing after five years through ten years |
||||||||||||||||
Maturing after ten years |
||||||||||||||||
Total |
$ | $ | % | |||||||||||||
Other |
||||||||||||||||
Maturing in one year or less |
$ | – | $ | – | – | – | % | |||||||||
Maturing after one year through five years |
||||||||||||||||
Maturing after five years through ten years |
– | – | – | – | ||||||||||||
Maturing after ten years |
– | – | – | – | ||||||||||||
Total |
$ | $ | % | |||||||||||||
Total available-for-sale (d) |
$ | $ | % |
(a) |
Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities that take into account anticipated future prepayments. |
(b) |
Information related to obligations of state and political subdivisions is presented based upon yield to first optional call date if the security is purchased at a premium, and yield to maturity if the security is purchased at par or a discount. |
(c) |
Maturity calculations for obligations of state and political subdivisions are based on the first optional call date for securities with a fair value above par and the contractual maturity date for securities with a fair value equal to or below par. |
(d) |
The weighted-average maturity of total available-for-sale |
(e) |
Weighted-average yields for obligations of state and political subdivisions are presented on a fully-taxable equivalent basis based on a federal income tax rate of available-for-sale held-to-maturity. |
85 |
||||
NOTE 6 |
Loans and Allowance for Credit Losses |
(Dollars in Millions) | 2021 | 2020 | ||||||
Commercial |
||||||||
Commercial |
$ | $ | ||||||
Lease financing |
||||||||
Total commercial |
||||||||
Commercial Real Estate |
||||||||
Commercial mortgages |
||||||||
Construction and development |
||||||||
Total commercial real estate |
||||||||
Residential Mortgages |
||||||||
Residential mortgages |
||||||||
Home equity loans, first liens |
||||||||
Total residential mortgages |
||||||||
Credit Card |
||||||||
Other Retail |
||||||||
Retail leasing |
||||||||
Home equity and second mortgages |
||||||||
Revolving credit |
||||||||
Installment |
||||||||
Automobile |
||||||||
Student |
||||||||
Total other retail |
||||||||
Total loans |
$ | $ |
86 |
||||||
(Dollars in Millions) | Commercial | Commercial Real Estate |
Residential Mortgages |
Credit Card |
Other Retail |
Total Loans |
||||||||||||||||||
Balance at December 31, 2020 |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Add |
||||||||||||||||||||||||
Provision for credit losses |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Deduct |
||||||||||||||||||||||||
Loans charged-off |
||||||||||||||||||||||||
Less recoveries of loans charged-off |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Net loan charge-offs (recoveries) |
( |
) | ||||||||||||||||||||||
Balance at December 31, 2021 |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Balance at December 31, 2019 |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Add |
||||||||||||||||||||||||
Change in accounting principle (a) |
( |
) | ( |
) | ||||||||||||||||||||
Provision for credit losses |
||||||||||||||||||||||||
Deduct |
||||||||||||||||||||||||
Loans charged-off |
||||||||||||||||||||||||
Less recoveries of loans charged-off |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Net loan charge-offs (recoveries) |
( |
) | ||||||||||||||||||||||
Balance at December 31, 2020 |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Balance at December 31, 2018 |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Add |
||||||||||||||||||||||||
Provision for credit losses |
( |
) | ||||||||||||||||||||||
Deduct |
||||||||||||||||||||||||
Loans charged-off |
||||||||||||||||||||||||
Less recoveries of loans charged-off |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Net loan charge-offs (recoveries) |
||||||||||||||||||||||||
Balance at December 31, 2019 |
$ | $ | $ | $ | $ | $ |
(a) |
Effective January 1, 2020, the Company adopted accounting guidance which changed impairment recognition of financial instruments to a model that is based on expected losses rather than incurred losses. |
87 |
||||
Accruing | ||||||||||||||||||||
(Dollars in Millions) | Current | 30-89 Days Past Due |
90 Days or More Past Due |
Nonperforming (b) |
Total | |||||||||||||||
December 31, 2021 |
||||||||||||||||||||
Commercial |
$ | $ | $ | $ | $ | |||||||||||||||
Commercial real estate |
||||||||||||||||||||
Residential mortgages (a) |
||||||||||||||||||||
Credit card |
– | |||||||||||||||||||
Other retail |
||||||||||||||||||||
Total loans |
$ | $ | $ | $ | $ | |||||||||||||||
December 31, 2020 |
||||||||||||||||||||
Commercial |
$ | $ | $ | $ | $ | |||||||||||||||
Commercial real estate |
||||||||||||||||||||
Residential mortgages (a) |
||||||||||||||||||||
Credit card |
– | |||||||||||||||||||
Other retail |
||||||||||||||||||||
Total loans |
$ | $ | $ | $ | $ |
(a) |
At December 31, 2021, $ |
(b) |
Substantially all nonperforming loans at December 31, 2021 and 2020, had an associated allowance for credit losses. The Company recognized interest income on nonperforming loans of $ |
88 |
||||||
December 31, 2021 | December 31, 2020 | |||||||||||||||||||||||||||||||||||||||
Criticized | Criticized | |||||||||||||||||||||||||||||||||||||||
(Dollars in Millions) | Pass | Special Mention |
Classified (a) |
Total Criticized |
Total | Pass | Special Mention |
Classified (a) |
Total Criticized |
Total | ||||||||||||||||||||||||||||||
Commercial |
||||||||||||||||||||||||||||||||||||||||
Originated in 2021 |
$ | $ | $ | $ | $ | $ | – | $ | – | $ | – | $ | – | $ | – | |||||||||||||||||||||||||
Originated in 2020 |
||||||||||||||||||||||||||||||||||||||||
Originated in 2019 |
||||||||||||||||||||||||||||||||||||||||
Originated in 2018 |
||||||||||||||||||||||||||||||||||||||||
Originated in 2017 |
||||||||||||||||||||||||||||||||||||||||
Originated prior to 2017 |
||||||||||||||||||||||||||||||||||||||||
Revolving |
||||||||||||||||||||||||||||||||||||||||
Total commercial |
||||||||||||||||||||||||||||||||||||||||
Commercial real estate |
||||||||||||||||||||||||||||||||||||||||
Originated in 2021 |
– | – | – | – | – | |||||||||||||||||||||||||||||||||||
Originated in 2020 |
||||||||||||||||||||||||||||||||||||||||
Originated in 2019 |
||||||||||||||||||||||||||||||||||||||||
Originated in 2018 |
||||||||||||||||||||||||||||||||||||||||
Originated in 2017 |
||||||||||||||||||||||||||||||||||||||||
Originated prior to 2017 |
||||||||||||||||||||||||||||||||||||||||
Revolving |
||||||||||||||||||||||||||||||||||||||||
Total commercial real estate |
||||||||||||||||||||||||||||||||||||||||
Residential mortgages (b) |
||||||||||||||||||||||||||||||||||||||||
Originated in 2021 |
– | – | – | – | – | – | ||||||||||||||||||||||||||||||||||
Originated in 2020 |
||||||||||||||||||||||||||||||||||||||||
Originated in 2019 |
– | |||||||||||||||||||||||||||||||||||||||
Originated in 2018 |
– | |||||||||||||||||||||||||||||||||||||||
Originated in 2017 |
– | |||||||||||||||||||||||||||||||||||||||
Originated prior to 2017 |
– | |||||||||||||||||||||||||||||||||||||||
Revolving |
– | – | – | – | – | – | ||||||||||||||||||||||||||||||||||
Total residential mortgages |
||||||||||||||||||||||||||||||||||||||||
Credit card (c) |
– | – | ||||||||||||||||||||||||||||||||||||||
Other retail |
||||||||||||||||||||||||||||||||||||||||
Originated in 2021 |
– | – | – | – | – | – | ||||||||||||||||||||||||||||||||||
Originated in 2020 |
– | – | ||||||||||||||||||||||||||||||||||||||
Originated in 2019 |
– | – | ||||||||||||||||||||||||||||||||||||||
Originated in 2018 |
– | – | ||||||||||||||||||||||||||||||||||||||
Originated in 2017 |
– | – | ||||||||||||||||||||||||||||||||||||||
Originated prior to 2017 |
– | – | ||||||||||||||||||||||||||||||||||||||
Revolving |
– | – | ||||||||||||||||||||||||||||||||||||||
Revolving converted to term |
– | – | ||||||||||||||||||||||||||||||||||||||
Total other retail |
– | – | ||||||||||||||||||||||||||||||||||||||
Total loans |
$ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Total outstanding commitments |
$ | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Note: |
Year of origination is based on the origination date of a loan, or for existing loans the date when the maturity date, pricing or commitment amount is amended. |
(a) |
Classified rating on consumer loans primarily based on delinquency status. |
(b) |
At December 31, 2021, $ |
(c) |
All credit card loans are considered revolving loans. |
89 |
||||
(Dollars in Millions) | Number of Loans |
Pre-Modification Outstanding Loan Balance |
Post-Modification Outstanding Loan Balance |
|||||||||
2021 |
||||||||||||
Commercial |
$ | $ | ||||||||||
Commercial real estate |
||||||||||||
Residential mortgages |
||||||||||||
Credit card |
||||||||||||
Other retail |
||||||||||||
Total loans, excluding loans purchased from GNMA mortgage pools |
||||||||||||
Loans purchased from GNMA mortgage pools |
||||||||||||
Total loans |
$ | $ | ||||||||||
2020 |
||||||||||||
Commercial |
$ | $ | ||||||||||
Commercial real estate |
||||||||||||
Residential mortgages |
||||||||||||
Credit card |
||||||||||||
Other retail |
||||||||||||
Total loans, excluding loans purchased from GNMA mortgage pools |
||||||||||||
Loans purchased from GNMA mortgage pools |
||||||||||||
Total loans |
$ | $ | ||||||||||
2019 |
||||||||||||
Commercial |
$ | $ | ||||||||||
Commercial real estate |
||||||||||||
Residential mortgages |
||||||||||||
Credit card |
||||||||||||
Other retail |
||||||||||||
Total loans, excluding loans purchased from GNMA mortgage pools |
||||||||||||
Loans purchased from GNMA mortgage pools |
||||||||||||
Total loans |
$ | $ | ||||||||||
90 |
||||||
(Dollars in Millions) | Number of Loans |
Amount Defaulted |
||||||
2021 |
||||||||
Commercial |
$ | |||||||
Commercial real estate |
||||||||
Residential mortgages |
||||||||
Credit card |
||||||||
Other retail |
||||||||
Total loans, excluding loans purchased from GNMA mortgage pools |
||||||||
Loans purchased from GNMA mortgage pools |
||||||||
Total loans |
$ | |||||||
2020 |
||||||||
Commercial |
$ | |||||||
Commercial real estate |
||||||||
Residential mortgages |
||||||||
Credit card |
||||||||
Other retail |
||||||||
Total loans, excluding loans purchased from GNMA mortgage pools |
||||||||
Loans purchased from GNMA mortgage pools |
||||||||
Total loans |
$ | |||||||
2019 |
||||||||
Commercial |
$ | |||||||
Commercial real estate |
||||||||
Residential mortgages |
||||||||
Credit card |
||||||||
Other retail |
||||||||
Total loans, excluding loans purchased from GNMA mortgage pools |
||||||||
Loans purchased from GNMA mortgage pools |
||||||||
Total loans |
$ | |||||||
91 |
||||
NOTE 7 |
Leases |
(Dollars in Millions) | 2021 | 2020 | ||||||
Lease receivables |
$ | $ | ||||||
Unguaranteed residual values accruing to the lessor’s benefit |
||||||||
Total net investment in sales-type and direct financing leases |
$ | $ |
(Dollars in Millions) | Sales-type and direct financing leases |
Operating leases | ||||||
2022 |
$ | $ | ||||||
2023 |
||||||||
2024 |
||||||||
2025 |
||||||||
2026 |
||||||||
Thereafter |
||||||||
Total lease payments |
$ | |||||||
Amounts representing interest |
( |
) | ||||||
Lease receivables |
$ |
(Dollars in Millions) | 2021 | 2020 | 2019 | |||||||||
Cash paid for amounts included in the measurement of lease liabilities |
||||||||||||
Operating cash flows from operating leases |
$ | $ | $ | |||||||||
Operating cash flows from finance leases |
||||||||||||
Financing cash flows from finance leases |
||||||||||||
Right of use assets obtained in exchange for new operating lease liabilities |
||||||||||||
Right of use assets obtained in exchange for new finance lease liabilities |
2021 | 2020 | |||||||
Weighted-average remaining lease term of operating leases (in years) |
||||||||
Weighted-average remaining lease term of finance leases (in years) |
||||||||
Weighted-average discount rate of operating leases |
% | % | ||||||
Weighted-average discount rate of finance leases |
% | % |
92 |
||||||
(Dollars in Millions) | leases | leases | ||||||
2022 |
$ | $ | ||||||
2023 |
||||||||
2024 |
||||||||
2025 |
||||||||
2026 |
||||||||
Thereafter |
||||||||
Total lease payments |
||||||||
Amounts representing interest |
( |
) | ( |
) | ||||
Lease liabilities |
$ | $ |
NOTE 8 |
Accounting for Transfers and Servicing of Financial Assets and Variable Interest | |
Entities |
93 |
||||
At December 31 (Dollars in Millions) | 2021 | 2020 | ||||||
Investment carrying amount |
$ | $ | ||||||
Unfunded capital and other commitments |
||||||||
Maximum exposure to loss |
NOTE 9 |
Premises and Equipment |
(Dollars in Millions) | 2021 | 2020 | ||||||||
Land |
$ | $ | ||||||||
Buildings and improvements |
||||||||||
Furniture, fixtures and equipment |
||||||||||
Right of use assets on operating leases |
||||||||||
Right of use assets on finance leases |
||||||||||
Construction in progress |
||||||||||
Less accumulated depreciation and amortization |
( |
) | ( |
) | ||||||
Total |
$ | $ |
94 |
||||||
NOTE 10 |
Mortgage Servicing Rights |
(Dollars in Millions) | 2021 | 2020 | 2019 | |||||||||
Balance at beginning of period |
$ | |
$ | |
$ | |
||||||
Rights purchased |
||||||||||||
Rights capitalized |
||||||||||||
Rights sold (a) |
||||||||||||
Changes in fair value of MSRs |
||||||||||||
Due to fluctuations in market interest rates (b) |
( |
) | ( |
) | ||||||||
Due to revised assumptions or models (c) |
( |
) | ( |
) | ||||||||
Other changes in fair value (d) |
( |
) | ( |
) | ( |
) | ||||||
Balance at end of period |
$ | $ | $ |
(a) |
MSRs sold include those having a negative fair value, resulting from the loans being severely delinquent. |
(b) |
Includes changes in MSR value associated with changes in market interest rates, including estimated prepayment rates and anticipated earnings on escrow deposits. |
(c) |
Includes changes in MSR value not caused by changes in market interest rates, such as changes in assumed cost to service, ancillary income and option adjusted spread, as well as the impact of any model changes. |
(d) |
Primarily the change in MSR value from passage of time and cash flows realized (decay), but also includes the impact of changes to expected cash flows not associated with changes in market interest rates, such as the impact of delinquencies. |
2021 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in Millions) | Down 100 bps |
Down 50 bps |
Down 25 bps |
Up 25 bps |
Up 50 bps |
Up 100 bps |
Down 100 bps |
Down 50 bps |
Down 25 bps |
Up 25 bps |
Up 50 bps |
Up 100 bps |
||||||||||||||||||||||||||||||||||||
MSR portfolio |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||||
Derivative instrument hedges |
( |
( |
( |
( |
( |
( |
||||||||||||||||||||||||||||||||||||||||||
Net sensitivity |
$ | ( |
$ | ( |
$ | ( |
$ | $ | $ | ( |
$ | $ | $ | ( |
$ | $ | $ |
95 |
||||
2021 | 2020 | |||||||||||||||||||||||||||||||
(Dollars in Millions) | HFA | Government | Conventional (d) |
Total | HFA | Government | Conventional (d) |
Total | ||||||||||||||||||||||||
Servicing portfolio (a) |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Fair value |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Value (bps) (b) |
||||||||||||||||||||||||||||||||
Weighted-average servicing fees (bps) |
||||||||||||||||||||||||||||||||
Multiple (value/servicing fees) |
||||||||||||||||||||||||||||||||
Weighted-average note rate |
% | % | % | % | % | % | % | % | ||||||||||||||||||||||||
Weighted-average age (in years) |
||||||||||||||||||||||||||||||||
Weighted-average expected prepayment (constant prepayment rate) |
% | % | % | % | % | % | % | % | ||||||||||||||||||||||||
Weighted-average expected life (in years) |
||||||||||||||||||||||||||||||||
Weighted-average option adjusted spread (c) |
% | % | % | % | % | % | % | % |
(a) |
Represents principal balance of mortgages having corresponding MSR asset. |
(b) |
Calculated as fair value divided by the servicing portfolio. |
(c) |
Option adjusted spread is the incremental spread added to the risk-free rate to reflect optionality and other risk inherent in the MSRs. |
(d) |
Represents loans sold primarily to GSEs. |
NOTE 11 |
Intangible Assets |
At December 31 (Dollars in Millions) | 2021 | 2020 | ||||||||||
Goodwill |
$ | $ | ||||||||||
Merchant processing contracts |
||||||||||||
Core deposit benefits |
||||||||||||
Mortgage servicing rights |
||||||||||||
Trust relationships |
||||||||||||
Other identified intangibles |
||||||||||||
Total |
$ | $ |
Year Ended December 31 (Dollars in Millions) | 2021 | 2020 | 2019 | |||||||||
Merchant processing contracts |
$ | $ | $ | |||||||||
Core deposit benefits |
||||||||||||
Trust relationships |
||||||||||||
Other identified intangibles |
||||||||||||
Total |
$ | $ | $ |
(Dollars in Millions) | ||||||||
2022 |
$ | |||||||
2023 |
||||||||
2024 |
||||||||
2025 |
||||||||
2026 |
96 |
||||||
(Dollars in Millions) | Corporate and Commercial Banking |
Consumer and Business Banking |
Wealth Management and Investment Services |
Payment Services |
Treasury and Corporate Support |
Consolidated Company |
||||||||||||||||||
Balance at December 31, 2018 |
$ | $ | $ | $ | $ | — | $ | |||||||||||||||||
Goodwill acquired |
— | — | — | — | ||||||||||||||||||||
Foreign exchange translation and other |
— | — | ( |
) | — | |||||||||||||||||||
Balance at December 31, 2019 |
$ | $ | $ | $ | $ | — | $ | |||||||||||||||||
Goodwill acquired |
— | — | — | — | ||||||||||||||||||||
Foreign exchange translation and other |
— | — | — | |||||||||||||||||||||
Balance at December 31, 2020 |
$ | $ | $ | $ | $ | — | $ | |||||||||||||||||
Goodwill acquired |
— | — | ||||||||||||||||||||||
Foreign exchange translation and other |
( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||||||
Balance at December 31, 2021 |
$ | $ | $ | $ | $ | — | $ |
NOTE 12 |
Deposits |
(Dollars in Millions) | 2021 | 2020 | ||||||
Noninterest-bearing deposits |
$ | $ | ||||||
Interest-bearing deposits |
||||||||
Interest checking |
||||||||
Money market savings |
||||||||
Savings accounts |
||||||||
Time deposits |
||||||||
Total interest-bearing deposits |
||||||||
Total deposits |
$ | $ |
(Dollars in Millions) | ||||||||
2022 |
$ | |||||||
2023 |
||||||||
2024 |
||||||||
2025 |
||||||||
2026 |
||||||||
Thereafter |
||||||||
Total |
$ |
NOTE 13 |
Short-Term Borrowings |
(Dollars in Millions) | 2021 | 2020 | ||||||
Federal funds purchased |
$ | $ | ||||||
Securities sold under agreements to repurchase |
||||||||
Commercial paper |
||||||||
Other short-term borrowings |
||||||||
Total |
$ | $ |
97 |
||||
NOTE 14 |
Long-Term Debt |
(Dollars in Millions) | Rate Type |
Rate (a) |
Maturity Date | 2021 | 2020 | |||||||||||||||||||
U.S. Bancorp (Parent Company) |
||||||||||||||||||||||||
Subordinated notes |
Fixed | % | 2 | $ | $ | |||||||||||||||||||
Fixed | % | 4 | ||||||||||||||||||||||
Fixed | % | 6 | ||||||||||||||||||||||
Fixed | % | 6 | ||||||||||||||||||||||
Fixed | % | 9 | ||||||||||||||||||||||
Fixed | % | 6 | – | |||||||||||||||||||||
Medium-term notes |
Fixed | % | - 0 |
|||||||||||||||||||||
Floating | % | 1 |
– | |||||||||||||||||||||
Other (b) |
||||||||||||||||||||||||
Subtotal |
||||||||||||||||||||||||
Subsidiaries |
||||||||||||||||||||||||
Federal Home Loan Bank advances |
Fixed | % | - 6 |
|||||||||||||||||||||
Floating | (d) |
% | - 6 |
|||||||||||||||||||||
Bank notes |
Fixed | % | - 5 |
|||||||||||||||||||||
Floating | (d) |
– % - |
% | - 9 |
||||||||||||||||||||
Other (c) |
||||||||||||||||||||||||
Subtotal |
||||||||||||||||||||||||
Total |
$ | $ |
(a) |
Weighted-average interest rates of medium-term notes, Federal Home Loan Bank advances and bank notes were |
(b) |
Includes debt issuance fees and unrealized gains and losses and deferred amounts relating to derivative instruments. |
(c) |
Includes consolidated community development and tax-advantaged investment VIEs, finance lease obligations, debt issuance fees, and unrealized gains and losses and deferred amounts relating to derivative instruments. |
(d) |
Includes $ |
(Dollars in Millions) | Parent Company |
Consolidated | ||||||
2022 |
$ | $ | ||||||
2023 |
||||||||
2024 |
||||||||
2025 |
||||||||
2026 |
||||||||
Thereafter |
||||||||
Total |
$ | $ |
98 |
||||||
NOTE 15 |
Shareholders’ Equity |
2021 | 2020 | |||||||||||||||||||||||||||||||
At December 31 (Dollars in Millions) | Shares Issued and Outstanding |
Liquidation Preference |
Discount | Carrying Amount |
Shares Issued and Outstanding |
Liquidation Preference |
Discount | Carrying Amount |
||||||||||||||||||||||||
Series A |
$ | $ | $ | $ | $ | |
$ | |
||||||||||||||||||||||||
Series B |
– | — | ||||||||||||||||||||||||||||||
Series F |
– | – | – | – | ||||||||||||||||||||||||||||
Series I |
– | – | – | – | ||||||||||||||||||||||||||||
Series J |
||||||||||||||||||||||||||||||||
Series K |
||||||||||||||||||||||||||||||||
Series L |
||||||||||||||||||||||||||||||||
Series M |
– | – | – | – | ||||||||||||||||||||||||||||
Series N |
– | – | – | – | ||||||||||||||||||||||||||||
Total preferred stock (a) |
$ | $ | $ | $ | $ | $ |
(a) |
The par value of all shares issued and outstanding at December 31, 2021 and 2020, was $ |
99 |
||||
100 |
||||||
(Dollars and Shares in Millions) | Shares | Value | ||||||
2021 |
$ | |||||||
2020 |
||||||||
2019 |
(Dollars in Millions) | Unrealized Gains (Losses) on Investment Securities Available-For-Sale |
Unrealized Gains (Losses) on Investment Securities Transferred From Available-For-Sale to Held-To-Maturity |
Unrealized Gains (Losses) on Derivative Hedges |
Unrealized Gains (Losses) on Retirement Plans |
Foreign Currency Translation |
Total | ||||||||||||||||||
2021 |
||||||||||||||||||||||||
Balance at beginning of period |
$ | $ | – | $ | ( |
$ | ( |
$ | ( |
$ | ||||||||||||||
Changes in unrealized gains (losses) |
( |
– | ( |
|||||||||||||||||||||
Transfer of securities from available-for-sale held-to-maturity |
( |
– | – | – | – | |||||||||||||||||||
Foreign currency translation adjustment (a) |
– | – | – | – | ||||||||||||||||||||
Reclassification to earnings of realized (gains) losses |
( |
– | ||||||||||||||||||||||
Applicable income taxes |
( |
( |
( |
|||||||||||||||||||||
Balance at end of period |
$ | $ | ( |
$ | ( |
$ | ( |
$ | ( |
$ | ( |
|||||||||||||
2020 |
||||||||||||||||||||||||
Balance at beginning of period |
$ | $ | – | $ | ( |
$ | ( |
$ | ( |
$ | ( |
|||||||||||||
Changes in unrealized gains (losses) |
– | ( |
( |
– | ||||||||||||||||||||
Foreign currency translation adjustment (a) |
– | – | – | – | ||||||||||||||||||||
Reclassification to earnings of realized (gains) losses |
( |
– | – | ( |
||||||||||||||||||||
Applicable income taxes |
( |
– | ( |
( |
||||||||||||||||||||
Balance at end of period |
$ | $ | – | $ | ( |
$ | ( |
$ | ( |
$ | ||||||||||||||
2019 |
||||||||||||||||||||||||
Balance at beginning of period |
$ | ( |
$ | $ | $ | ( |
$ | ( |
$ | ( |
||||||||||||||
Changes in unrealized gains (losses) |
– | ( |
( |
– | ||||||||||||||||||||
Unrealized gains (losses) on held-to-maturity available-for-sale |
( |
– | – | – | ||||||||||||||||||||
Foreign currency translation adjustment (a) |
– | – | – | – | ||||||||||||||||||||
Reclassification to earnings of realized (gains) losses |
( |
( |
– | |||||||||||||||||||||
Applicable income taxes |
( |
( |
( |
|||||||||||||||||||||
Balance at end of period |
$ | $ | – | $ | ( |
$ | ( |
$ | ( |
$ | ( |
(a) |
Represents the impact of changes in foreign currency exchange rates on the Company’s investment in foreign operations and related hedges. |
101 |
||||
Impact to Net Income | Affected Line Item in the Consolidated Statement of Income | |||||||||||||
(Dollars in Millions) | 2021 | 2020 | 2019 | |||||||||||
Unrealized gains (losses) on investment securities available-for-sale |
||||||||||||||
Realized gains (losses) on sale of investment securities |
$ | $ | $ | Securities gains (losses), net | ||||||||||
( |
) | ( |
) | ( |
) | Applicable income taxes | ||||||||
Net-of-tax | ||||||||||||||
Unrealized gains (losses) on investment securities transferred from available-for-sale held-to-maturity |
||||||||||||||
Amortization of unrealized gains |
( |
) | – | Interest income | ||||||||||
– | ( |
) | Applicable income taxes | |||||||||||
( |
) | – | Net-of-tax | |||||||||||
Unrealized gains (losses) on derivative hedges |
||||||||||||||
Realized gains (losses) on derivative hedges |
( |
) | ( |
) | ( |
) | Interest expense | |||||||
Applicable income taxes | ||||||||||||||
( |
) | ( |
) | ( |
) | Net-of-tax | ||||||||
Unrealized gains (losses) on retirement plans |
||||||||||||||
Actuarial gains (losses) and prior service cost (credit) amortization |
( |
) | ( |
) | ( |
) | Other noninterest expense | |||||||
Applicable income taxes | ||||||||||||||
( |
) | ( |
) | ( |
) | Net-of-tax | ||||||||
Total impact to net income |
$ | ( |
) | $ | $ | ( |
) |
102 |
||||||
U.S. Bancorp | U.S. Bank National Association | |||||||||||||||||||
(Dollars in Millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||
Basel III standardized approach: |
||||||||||||||||||||
Common shareholders’ equity |
$ | $ | $ | $ | ||||||||||||||||
Less intangible assets |
||||||||||||||||||||
Goodwill (net of deferred tax liability) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Other disallowed intangible assets |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Other (a) |
||||||||||||||||||||
Total common equity tier 1 capital |
||||||||||||||||||||
Qualifying preferred stock |
— | — | ||||||||||||||||||
Noncontrolling interests eligible for tier 1 capital |
||||||||||||||||||||
Other (b) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Total tier 1 capital |
||||||||||||||||||||
Eligible portion of allowance for credit losses |
||||||||||||||||||||
Subordinated debt and noncontrolling interests eligible for tier 2 capital |
||||||||||||||||||||
Total tier 2 capital |
||||||||||||||||||||
Total risk-based capital |
$ | $ | $ | $ | ||||||||||||||||
Risk-weighted assets |
$ | $ | $ | $ | ||||||||||||||||
Common equity tier 1 capital as a percent of risk-weighted assets |
% | % | % | % | ||||||||||||||||
Tier 1 capital as a percent of risk-weighted assets |
||||||||||||||||||||
Total risk-based capital as a percent of risk-weighted assets |
||||||||||||||||||||
Tier 1 capital as a percent of adjusted quarterly average assets (leverage ratio) |
||||||||||||||||||||
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure (total leverage exposure ratio) |
Minimum (c) |
Well- Capitalized |
|||||||
Bank Regulatory Capital Requirements |
||||||||
Common equity tier 1 capital as a percent of risk-weighted assets |
% | % (d) | ||||||
Tier 1 capital as a percent of risk-weighted assets |
||||||||
Total risk-based capital as a percent of risk-weighted assets |
||||||||
Tier 1 capital as a percent of adjusted quarterly average assets (leverage ratio) |
(d) | |||||||
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure (total leverage exposure ratio) |
(a) |
Includes the impact of items included in other comprehensive income (loss), such as unrealized gains (losses) on available-for-sale |
(b) |
Includes the remaining portion of deferred tax assets not eligible for total tier 1 capital. |
(c) |
The minimum common equity tier 1 capital, tier 1 capital and total risk-based capital ratio requirements reflect a stress capital buffer requirement of |
(d) |
A minimum well-capitalized threshold does not apply to U.S. Bancorp for this ratio as it is not formally defined under applicable banking regulations for bank holding companies. |
103 |
||||
NOTE 16 |
Earnings Per Share |
|
Year Ended December 31 (Dollars and Shares in Millions, Except Per Share Data) |
2021 |
2020 |
2019 |
|||||||||
Net income attributable to U.S. Bancorp |
$ | $ | $ | |||||||||
Preferred dividends |
( |
) | ( |
) | ( |
) | ||||||
Impact of preferred stock call and redemption |
( |
) (a) |
( |
) (b) |
– | |||||||
Earnings allocated to participating stock awards |
( |
) | ( |
) | ( |
) | ||||||
|
|
|||||||||||
Net income applicable to U.S. Bancorp common shareholders |
$ | $ | $ | |||||||||
|
|
|||||||||||
Average common shares outstanding |
||||||||||||
Net effect of the exercise and assumed purchase of stock awards |
||||||||||||
|
|
|||||||||||
Average diluted common shares outstanding |
||||||||||||
|
|
|||||||||||
Earnings per common share |
$ | $ | $ | |||||||||
Diluted earnings per common share |
$ | $ | $ |
(a) |
Represents stock issuance costs originally recorded in preferred stock upon the issuance of the Company’s Series I and Series F Preferred Stock that were reclassified to retained earnings on the date the Company announced its intent to redeem the outstanding shares. |
(b) |
Represents stock issuance costs originally recorded in preferred stock upon the issuance of the Company’s Series H Preferred Stock that were reclassified to retained earnings on the date the Company announced its intent to redeem the outstanding shares. |
NOTE 17 |
Employee Benefits |
104 |
||||||
Pension Plans | Postretirement Welfare Plan |
|||||||||||||||
(Dollars in Millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Change In Projected Benefit Obligation (a) |
||||||||||||||||
Benefit obligation at beginning of measurement period |
$ | $ | $ | $ | ||||||||||||
Service cost |
– | – | ||||||||||||||
Interest cost |
||||||||||||||||
Participants’ contributions |
– | – | ||||||||||||||
Plan amendments |
– | ( |
) | – | – | |||||||||||
Actuarial (gain) loss |
( |
) | ( |
) | ( |
) | ||||||||||
Lump sum settlements |
( |
) | ( |
) | – | – | ||||||||||
Benefit payments |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Federal subsidy on benefits paid |
– | – | – | |||||||||||||
Benefit obligation at end of measurement period (b) |
$ | $ | $ | $ | ||||||||||||
Change In Fair Value Of Plan Assets |
||||||||||||||||
Fair value at beginning of measurement period |
$ | $ | $ | – | $ | |||||||||||
Actual return on plan assets |
– | |||||||||||||||
Employer contributions |
||||||||||||||||
Participants’ contributions |
– | – | ||||||||||||||
Lump sum settlements |
( |
) | ( |
) | – | – | ||||||||||
Benefit payments |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other Changes (c ) |
– | – | – | ( |
) | |||||||||||
Fair value at end of measurement period |
$ | $ | $ | – | $ | – | ||||||||||
Funded (Unfunded) Status |
$ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||
Components Of The Consolidated Balance Sheet |
||||||||||||||||
Noncurrent benefit asset |
$ | $ | $ | – | $ | – | ||||||||||
Current benefit liability |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Noncurrent benefit liability |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Recognized amount |
$ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||
Accumulated Other Comprehensive Income (Loss), Pretax |
||||||||||||||||
Net actuarial (loss) gain |
$ | ( |
) | $ | ( |
) | $ | $ | ||||||||
Net prior service credit (cost) |
||||||||||||||||
Recognized amount |
$ | ( |
) | $ | ( |
) | $ | $ |
(a) |
The increase in the projected benefit obligation for 2021 was primarily due to demographic experience partially offset by a higher discount rate, and the increase for 2020 was primarily due to a lower discount rate. |
(b) |
At December 31, 2021 and 2020, the accumulated benefit obligation for all pension plans was $ |
(c) |
The fair value of postretirement welfare plan assets decreased in 2020 due to the dissolution of the VEBA trust. Prior to dissolution, the remaining assets in the VEBA trust were used to pay benefits under other programs of the Company’s health and welfare plan, as permitted by the VEBA trust agreement. The postreirement welfare plan now operates as an unfunded plan. |
(Dollars in Millions) | 2021 | 2020 | ||||||
Pension Plans with Projected Benefit Obligations in Excess of Plan Assets |
||||||||
Projected benefit obligation |
$ | $ | ||||||
Fair value of plan assets |
– | – | ||||||
Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets |
||||||||
Accumulated benefit obligation |
$ | $ | ||||||
Fair value of plan assets |
– | – |
105 |
||||
Pension Plans | Postretirement Welfare Plan | |||||||||||||||||||||||
(Dollars in Millions) | 2021 | 2020 | 2019 | 2021 | 2020 | 2019 | ||||||||||||||||||
Components Of Net Periodic Benefit Cost |
||||||||||||||||||||||||
Service cost |
$ | $ | $ | $ | – | $ | – | $ | – | |||||||||||||||
Interest cost |
||||||||||||||||||||||||
Expected return on plan assets |
( |
) | ( |
) | ( |
) | – | ( |
) | ( |
) | |||||||||||||
Prior service cost (credit) and transition obligation (asset) amortization |
( |
) | – | – | ( |
) | ( |
) | ( |
) | ||||||||||||||
Actuarial loss (gain) amortization |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Net periodic benefit cost |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||||
Other Changes In Plan Assets And Benefit Obligations |
||||||||||||||||||||||||
Recognized In Other Comprehensive Income (Loss) |
||||||||||||||||||||||||
Net actuarial gain (loss) arising during the year |
$ | $ | ( |
) | $ | ( |
) | $ | $ | $ | ||||||||||||||
Net actuarial loss (gain) amortized during the year |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Net prior service (cost) credit and transition (obligation) asset arising during the year |
– | – | – | – | – | |||||||||||||||||||
Net prior service cost (credit) and transition obligation (asset) amortized during the year |
( |
) | – | – | ( |
) | ( |
) | ( |
) | ||||||||||||||
Total recognized in other comprehensive income (loss) |
$ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||
Total recognized in net periodic benefit cost and other comprehensive income (loss) |
$ | $ | ( |
) | $ | ( |
) | $ | $ | $ |
Pension Plans | Postretirement Welfare Plan |
|||||||||||||||
(Dollars in Millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Discount rate (a ) |
% | % | % | % | ||||||||||||
Cash balance interest crediting rate |
* | * | ||||||||||||||
Rate of compensation increase (b) |
* | * | ||||||||||||||
Health care cost trend rate (c) |
||||||||||||||||
Prior to age 65 |
% | % | ||||||||||||||
After age 65 |
% | % |
(a) |
The discount rates were developed using a cash flow matching bond model with a modified duration for the qualified pension plan, legacy pension plan, non-qualified pension plan and postretirement welfare plan of |
(b) |
Determined on an active liability-weighted basis. |
(c) |
The 2021 and 2020 pre-65 and post-65 rates are both assumed to decrease gradually to |
* |
Not applicable |
Pension Plans | Postretirement Welfare Plan | |||||||||||||||||||||||
(Dollars in Millions) | 2021 | 2020 | 2019 | 2021 | 2020 | 2019 | ||||||||||||||||||
Discount rate (a) |
% | % | % | % | % | % | ||||||||||||||||||
Cash balance interest crediting rate |
* | * | * | |||||||||||||||||||||
Expected return on plan assets (b) |
* | |||||||||||||||||||||||
Rate of compensation increase (c) |
* | * | * | |||||||||||||||||||||
Health care cost trend rate (d) |
||||||||||||||||||||||||
Prior to age 65 |
% | % | % | |||||||||||||||||||||
After age 65 |
(a) |
The discount rates were developed using a cash flow matching bond model with a modified duration for the qualified pension plan, legacy pension plan, non-qualified pension plan and postretirement welfare plan of non-qualified pension plan and postretirement welfare plan of |
(b) |
With the help of an independent pension consultant, the Company considers several sources when developing its expected long-term rates of return on plan assets assumptions, including, but not limited to, past returns and estimates of future returns given the plans’ asset allocation, economic conditions, and peer group LTROR information. The Company determines its expected long-term rates of return reflecting current economic conditions and plan assets. |
(c) |
Determined on an active liability weighted basis. |
(d) |
The 2021, 2020 and 2019 pre-65 and post-65 rates are both assumed to decrease gradually to |
* |
Not applicable |
106 |
||||||
Qualified Pension Plans | ||||||||||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||||||||||
(Dollars in Millions) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Cash and cash equivalents |
$ | $ | – | $ | – | $ | $ | $ | – | $ | – | $ | ||||||||||||||||||||
Debt securities |
– | – | ||||||||||||||||||||||||||||||
Mutual funds |
||||||||||||||||||||||||||||||||
Debt securities |
– | – | – | – | ||||||||||||||||||||||||||||
Emerging markets equity securities |
– | – | – | – | ||||||||||||||||||||||||||||
Other |
– | – | – | – | ||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Plan investment assets not classified in fair value hierarchy (a) : |
||||||||||||||||||||||||||||||||
Collective investment funds |
||||||||||||||||||||||||||||||||
Domestic equity securities |
||||||||||||||||||||||||||||||||
Mid-small cap equity securities(b) |
||||||||||||||||||||||||||||||||
International equity securities |
||||||||||||||||||||||||||||||||
Domestic real estate securities |
||||||||||||||||||||||||||||||||
Hedge funds (c) |
||||||||||||||||||||||||||||||||
Private equity funds (d) |
||||||||||||||||||||||||||||||||
Total plan investment assets at fair value |
$ | $ |
(a) |
These investments are valued based on net asset value per share as a practical expedient; fair values are provided to reconcile to total investment assets of the plans at fair value. |
(b) |
At December 31, 2021 and 2020, securities included $ |
(c) |
This category consists of several investment strategies diversified across several hedge fund managers. |
(d) |
This category consists of several investment strategies diversified across several private equity fund managers. |
107 |
||||
2021 | 2020 | 2019 | ||||||||||
(Dollars in Millions) | Other | Other | Other | |||||||||
Balance at beginning of period |
$ | $ | $ | |||||||||
Unrealized gains (losses) relating to assets still held at end of year |
( |
) | ||||||||||
Purchases, sales, and settlements, net |
||||||||||||
Balance at end of period |
$ | $ | $ |
(Dollars in Millions) | Pension Plans |
Postretirement Welfare Plan (a) |
||||||
2022 |
$ | $ | ||||||
2023 |
||||||||
2024 |
||||||||
2025 |
||||||||
2026 |
||||||||
2027-2031 |
(a) |
Net of expected retiree contributions and before Medicare Part D subsidy. |
108 |
||||||
NOTE 18 |
Stock-Based Compensation |
Year Ended December 31 | Stock Options/Shares |
Weighted- Average Exercise Price |
Weighted-Average Remaining Contractual Term |
Aggregate Intrinsic Value (in millions) |
||||||||||||
2021 |
||||||||||||||||
Number outstanding at beginning of period |
$ | |||||||||||||||
Exercised |
( |
) | ||||||||||||||
Cancelled (a) |
( |
) | ||||||||||||||
Number outstanding at end of period (b) |
$ | $ | ||||||||||||||
Exercisable at end of period |
$ | $ | ||||||||||||||
2020 |
||||||||||||||||
Number outstanding at beginning of period |
$ | |||||||||||||||
Exercised |
( |
) | ||||||||||||||
Cancelled (a) |
( |
) | ||||||||||||||
Number outstanding at end of period (b) |
$ | $ | ||||||||||||||
Exercisable at end of period |
$ | $ | ||||||||||||||
2019 |
||||||||||||||||
Number outstanding at beginning of period |
$ | |||||||||||||||
Exercised |
( |
) | ||||||||||||||
Cancelled (a) |
( |
) | ||||||||||||||
Number outstanding at end of period (b) |
$ | $ | ||||||||||||||
Exercisable at end of period |
$ | $ |
Note: |
The Company did not grant any stock option awards during 2021, 2020 and 2019. |
(a) |
Options cancelled include both non-vested (i.e., forfeitures) and vested options. |
(b) |
Outstanding options include stock-based awards that may be forfeited in future periods. The impact of the estimated forfeitures is reflected in compensation expense. |
Year Ended December 31 (Dollars in Millions) | 2021 | 2020 | 2019 | |||||||||
Fair value of options vested |
$ | $ | $ | |||||||||
Intrinsic value of options exercised |
||||||||||||
Cash received from options exercised |
||||||||||||
Tax benefit realized from options exercised |
109 |
||||
Outstanding Options | Exercisable Options | |||||||||||||||||||
Range of Exercise Prices | Shares | Weighted- Average Remaining Contractual Life (Years) |
Weighted- Average Exercise Price |
Shares | Weighted- Average Exercise Price |
|||||||||||||||
$ |
$ | $ | ||||||||||||||||||
$ |
||||||||||||||||||||
$ |
||||||||||||||||||||
$ |
||||||||||||||||||||
$ |
||||||||||||||||||||
$ |
||||||||||||||||||||
$ | $ |
2021 | 2020 | 2019 | ||||||||||||||||||||||
Year Ended December 31 | Shares | Weighted- Average Grant- Date Fair Value |
Shares | Weighted- Average Grant- Date Fair Value |
Shares | Weighted- Average Grant- Date Fair Value |
||||||||||||||||||
Outstanding at beginning of period |
$ | $ | $ | |||||||||||||||||||||
Granted |
||||||||||||||||||||||||
Vested |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Cancelled |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Outstanding at end of period |
$ | $ | $ |
110 |
||||||
NOTE 19 |
Income Taxes |
Year Ended December 31 (Dollars in Millions) | 2021 | 2020 | 2019 | |||||||||
Federal |
||||||||||||
Current |
$ | $ | $ | |||||||||
Deferred |
( |
) | ||||||||||
Federal income tax |
||||||||||||
State |
||||||||||||
Current |
||||||||||||
Deferred |
( |
) | ( |
) | ||||||||
State income tax |
||||||||||||
Total income tax provision |
$ | $ | $ |
Year Ended December 31 (Dollars in Millions) | 2021 | 2020 | 2019 | |||||||||
Tax at statutory rate |
$ | $ | $ | |||||||||
State income tax, at statutory rates, net of federal tax benefit |
||||||||||||
Tax effect of |
||||||||||||
Tax credits and benefits, net of related expenses |
( |
) | ( |
) | ( |
) | ||||||
Tax-exempt income |
( |
) | ( |
) | ( |
) | ||||||
Nondeductible legal and regulatory expenses |
||||||||||||
Other items (a) |
||||||||||||
Applicable income taxes |
$ | $ | $ |
(a) |
Includes excess tax benefits associated with stock-based compensation and adjustments related to deferred tax assets and liabilities. |
Year Ended December 31 (Dollars in Millions) | 2021 | 2020 | 2019 | |||||||||
Balance at beginning of period |
$ | $ | $ | |||||||||
Additions for tax positions taken in prior years |
||||||||||||
Additions for tax positions taken in the current year |
||||||||||||
Exam resolutions |
( |
) | ( |
) | ( |
) | ||||||
Statute expirations |
( |
) | ( |
) | ( |
) | ||||||
Balance at end of period |
$ | $ | $ |
111 |
||||
At December 31 (Dollars in Millions) | 2021 | 2020 | ||||||
Deferred Tax Assets |
||||||||
Federal, state and foreign net operating loss and credit carryforwards |
$ | $ | ||||||
Allowance for credit losses |
||||||||
Accrued expenses |
||||||||
Obligation for operating leases |
||||||||
Securities available-for-sale |
— | |||||||
Stock compensation |
||||||||
Pension and postretirement benefits |
||||||||
Partnerships and other investment assets |
— | |||||||
Other deferred tax assets, net |
||||||||
Gross deferred tax assets |
||||||||
Deferred Tax Liabilities |
||||||||
Leasing activities |
( |
) | ( |
) | ||||
Goodwill and other intangible assets |
( |
) | ( |
) | ||||
Mortgage servicing rights |
( |
) | ( |
) | ||||
Right of use operating leases |
( |
) | ( |
) | ||||
Fixed assets |
( |
) | ( |
) | ||||
Loans |
( |
) | ( |
) | ||||
Partnerships and other investment assets |
( |
) | — | |||||
Securities available-for-sale |
— | ( |
) | |||||
Other deferred tax liabilities, net |
( |
) | ( |
) | ||||
Gross deferred tax liabilities |
( |
) | ( |
) | ||||
Valuation allowance |
( |
) | ( |
) | ||||
Net Deferred Tax Asset |
$ | $ | ||||||
112 |
||||||
NOTE 20 |
Derivative Instruments |
113 |
||||
The following table summarizes the asset and liability management derivative positions of the Company at December 31: |
||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||
Notional Value |
Fair Value | Notional Value |
Fair Value | |||||||||||||||||||||
(Dollars in Millions) | Assets | Liabilities | Assets | Liabilities | ||||||||||||||||||||
Fair value hedges |
||||||||||||||||||||||||
Interest rate contracts |
||||||||||||||||||||||||
Receive fixed/pay floating swaps |
$ | $ | – | $ | – | $ | $ | – | $ | – | ||||||||||||||
Pay fixed/receive floating swaps |
– | – | – | – | ||||||||||||||||||||
Cash flow hedges |
||||||||||||||||||||||||
Interest rate contracts |
||||||||||||||||||||||||
Pay fixed/receive floating swaps |
– | – | – | – | – | |||||||||||||||||||
Net investment hedges |
||||||||||||||||||||||||
Foreign exchange forward contracts |
– | – | ||||||||||||||||||||||
Other economic hedges |
||||||||||||||||||||||||
Interest rate contracts |
||||||||||||||||||||||||
Futures and forwards |
||||||||||||||||||||||||
Buy |
||||||||||||||||||||||||
Sell |
||||||||||||||||||||||||
Options |
||||||||||||||||||||||||
Purchased |
– | – | ||||||||||||||||||||||
Written |
||||||||||||||||||||||||
Receive fixed/pay floating swaps |
– | – | – | – | ||||||||||||||||||||
Pay fixed/receive floating swaps |
– | – | – | – | ||||||||||||||||||||
Foreign exchange forward contracts |
||||||||||||||||||||||||
Equity contracts |
– | – | ||||||||||||||||||||||
Other (a) |
– | |||||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ |
(a) |
Includes derivative liability swap agreements related to the sale of a portion of the Company’s Class B common and preferred shares of Visa Inc. The Visa swap agreements had a total notional value and fair value of $ |
The following table summarizes the customer-related derivative positions of the Company at December 31: |
||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||
Notional Value |
Fair Value | Notional Value |
Fair Value | |||||||||||||||||||||
(Dollars in Millions) | Assets | Liabilities | Assets | Liabilities | ||||||||||||||||||||
Interest rate contracts |
||||||||||||||||||||||||
Receive fixed/pay floating swaps |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Pay fixed/receive floating swaps |
||||||||||||||||||||||||
Other (a) |
||||||||||||||||||||||||
Options |
||||||||||||||||||||||||
Purchased |
||||||||||||||||||||||||
Written |
||||||||||||||||||||||||
Futures |
||||||||||||||||||||||||
Buy |
– | – | – | – | ||||||||||||||||||||
Sell |
– | – | – | – | ||||||||||||||||||||
Foreign exchange rate contracts |
||||||||||||||||||||||||
Forwards, spots and swaps |
||||||||||||||||||||||||
Options |
||||||||||||||||||||||||
Purchased |
– | – | ||||||||||||||||||||||
Written |
– | – | ||||||||||||||||||||||
Credit contracts |
||||||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
(a) Primarily represents floating rate interest rate swaps that pay based on differentials between specified interest rate indexes. |
114 |
||||||
The table below shows the effective portion of the gains (losses) recognized in other comprehensive income (loss) and the gains (losses) reclassified from other comprehensive income (loss) into earnings (net-of-tax) |
||||||||||||||||||||||||
Gains (Losses) Recognized in Other Comprehensive Income (Loss) |
Gains (Losses) Reclassified from Other Comprehensive Income (Loss) into Earnings |
|||||||||||||||||||||||
(Dollars in Millions) | 2021 | 2020 | 2019 | 2021 | 2020 | 2019 | ||||||||||||||||||
Asset and Liability Management Positions |
||||||||||||||||||||||||
Cash flow hedges |
||||||||||||||||||||||||
Interest rate contracts |
$ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $( |
||||||||||
Net investment hedges |
||||||||||||||||||||||||
Foreign exchange forward contracts |
( |
) | – | – | – | |||||||||||||||||||
Non-derivative debt instruments |
( |
) | – | – | – | |||||||||||||||||||
Note:The Company does not exclude components from effectiveness testing for cash flow and net investment hedges. |
The table below shows the effect of fair value and cash flow hedge accounting on the Consolidated Statement of Income for the years ended December 31: |
||||||||||||||||||||||||
Interest Income | Interest Expense | |||||||||||||||||||||||
(Dollars in Millions) | 2021 | 2020 | 2019 | 2021 | 2020 | 2019 | ||||||||||||||||||
Total amount of income and expense line items presented in the Consolidated Statement of Income in which the effects of fair value or cash flow hedges are recorded |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Asset and Liability Management Positions |
||||||||||||||||||||||||
Fair value hedges |
||||||||||||||||||||||||
Interest rate contract derivatives |
– | ( |
) | ( |
||||||||||||||||||||
Hedged items |
( |
) | ( |
) | – | ( |
) | |||||||||||||||||
Cash flow hedges |
||||||||||||||||||||||||
Interest rate contract derivatives |
– | – | – | |||||||||||||||||||||
Note: The Company does not exclude components from effectiveness testing for fair value and cash flow hedges. The Company reclassified losses of $ |
The table below shows cumulative hedging adjustments and the carrying amount of assets and liabilities designated in fair value hedges: |
||||||||||||||||
Carrying Amount of the Hedged Assets and Liabilities |
Cumulative Hedging Adjustment (a) |
|||||||||||||||
At December 31 (Dollars in Millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Line Item in the Consolidated Balance Sheet |
||||||||||||||||
Available-for-sale |
$ | $ | $ | ( |
) | $( |
||||||||||
Long-term debt |
||||||||||||||||
(a) The cumulative hedging adjustment related to discontinued hedging relationships on available-for-sale |
115 |
||||
The table below shows the gains (losses) recognized in earnings for other economic hedges and the customer-related positions for the years ended December 31: |
||||||||||||||
(Dollars in Millions) | Location of Gains (Losses) Recognized in Earnings |
2021 | 2020 | 2019 | ||||||||||
Asset and Liability Management Positions |
||||||||||||||
Other economic hedges |
||||||||||||||
Interest rate contracts |
||||||||||||||
Futures and forwards |
Mortgage banking revenue/ other noninterest income |
$ | $ | $ | ||||||||||
Purchased and written options |
Mortgage banking revenue | |||||||||||||
Swaps |
Mortgage banking revenue | ( |
) | |||||||||||
Foreign exchange forward contracts |
Other noninterest income | ( |
||||||||||||
Equity contracts |
Compensation expense | — | ||||||||||||
Other |
Other noninterest income | ( |
) | ( |
||||||||||
Customer-Related Positions |
||||||||||||||
Interest rate contracts |
||||||||||||||
Swaps |
Commercial products revenue | |||||||||||||
Purchased and written options |
Commercial products revenue | ( |
) | ( |
) | |||||||||
Futures |
Commercial products revenue | ( |
) | ( |
||||||||||
Foreign exchange rate contracts |
||||||||||||||
Forwards, spots and swaps |
Commercial products revenue | |||||||||||||
Purchased and written options |
Commercial products revenue | |||||||||||||
Credit contracts |
Commercial products revenue | ( |
) | ( |
) | ( |
116 |
||||||
NOTE 21 |
Netting Arrangements for Certain Financial Instruments and Securities Financing | |
Activities |
117 |
||||
(Dollars in Millions) | Overnight and Continuous |
Less Than 30 Days |
30-89 Days |
Greater Than 90 Days |
Total | |||||||||||||||
December 31, 2021 |
||||||||||||||||||||
Repurchase agreements |
||||||||||||||||||||
U.S. Treasury and agencies |
$ | $ | – | $ | – | $ | – | $ | ||||||||||||
Residential agency mortgage-backed securities |
– | – | – | |||||||||||||||||
Corporate debt securities |
– | – | – | |||||||||||||||||
Total repurchase agreements |
– | – | – | |||||||||||||||||
Securities loaned |
||||||||||||||||||||
Corporate debt securities |
– | – | – | |||||||||||||||||
Total securities loaned |
– | – | – | |||||||||||||||||
Gross amount of recognized liabilities |
$ | $ | – | $ | – | $ | – | $ | ||||||||||||
December 31, 2020 |
||||||||||||||||||||
Repurchase agreements |
||||||||||||||||||||
U.S. Treasury and agencies |
$ | $ | – | $ | – | $ | – | $ | ||||||||||||
Residential agency mortgage-backed securities |
– | – | – | |||||||||||||||||
Corporate debt securities |
– | – | – | |||||||||||||||||
Total repurchase agreements |
– | – | – | |||||||||||||||||
Securities loaned |
||||||||||||||||||||
Corporate debt securities |
– | – | – | |||||||||||||||||
Total securities loaned |
– | – | – | |||||||||||||||||
Gross amount of recognized liabilities |
$ | $ | – | $ | – | $ | – | $ |
118 |
||||||
(Dollars in Millions) |
Gross Recognized Assets |
Gross Amounts Offset on the Consolidated Balance Sheet (a) |
Net Amounts Presented on the Consolidated Balance Sheet |
Gross Amounts Not Offset on the Consolidated Balance Sheet |
||||||||||||||||||||
Financial Instruments (b) |
Collateral Received (c) |
Net Amount | ||||||||||||||||||||||
December 31, 2021 |
||||||||||||||||||||||||
Derivative assets (d) |
$ | $ | ( |
) | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||
Reverse repurchase agreements |
– | ( |
) | ( |
) | – | ||||||||||||||||||
Securities borrowed |
– | – | ( |
) | ||||||||||||||||||||
Total |
$ | $ | ( |
) | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||
December 31, 2020 |
||||||||||||||||||||||||
Derivative assets (d) |
$ | $ | ( |
) | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||
Reverse repurchase agreements |
– | ( |
) | ( |
) | – | ||||||||||||||||||
Securities borrowed |
– | – | ( |
) | ||||||||||||||||||||
Total |
$ | $ | ( |
) | $ | $ | ( |
) | $ | ( |
) | $ |
(a) |
Includes $ |
(b) |
For derivative assets this includes any derivative liability fair values that could be offset in the event of counterparty default; for reverse repurchase agreements this includes any repurchase agreement payables that could be offset in the event of counterparty default; for securities borrowed this includes any securities loaned payables that could be offset in the event of counterparty default. |
(c) |
Includes the fair value of securities received by the Company from the counterparty. These securities are not included on the Consolidated Balance Sheet unless the counterparty defaults. |
(d) |
Excludes $ |
(Dollars in Millions) |
Gross Recognized Liabilities |
Gross Amounts Offset on the Consolidated Balance Sheet (a) |
Net Amounts Presented on the Consolidated Balance Sheet |
Gross Amounts Not Offset on the Consolidated Balance Sheet |
Net Amount |
|||||||||||||||||||
Financial Instruments (b) |
Collateral Pledged (c) |
|||||||||||||||||||||||
December 31, 2021 |
||||||||||||||||||||||||
Derivative liabilities (d) |
$ | $ | ( |
) | $ | $ | ( |
) | $ | – | $ | |||||||||||||
Repurchase agreements |
– | ( |
) | ( |
) | – | ||||||||||||||||||
Securities loaned |
– | – | ( |
) | ||||||||||||||||||||
Total |
$ | $ | ( |
) | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||
December 31, 2020 |
||||||||||||||||||||||||
Derivative liabilities (d) |
$ | $ | ( |
) | $ | $ | ( |
) | $ | – | $ | |||||||||||||
Repurchase agreements |
– | ( |
) | ( |
) | – | ||||||||||||||||||
Securities loaned |
– | – | ( |
) | ||||||||||||||||||||
Total |
$ | $ | ( |
) | $ | $ | ( |
) | $ | ( |
) | $ |
(a) |
Includes $ |
(b) |
For derivative liabilities this includes any derivative asset fair values that could be offset in the event of counterparty default; for repurchase agreements this includes any reverse repurchase agreement receivables that could be offset in the event of counterparty default; for securities loaned this includes any securities borrowed receivables that could be offset in the event of counterparty default. |
(c) |
Includes the fair value of securities pledged by the Company to the counterparty. These securities are included on the Consolidated Balance Sheet unless the Company defaults. |
(d) |
Excludes $ |
119 |
||||
NOTE 22 |
Fair Values of Assets and Liabilities |
– | Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 1 includes U.S. Treasury securities, as well as exchange-traded instruments. |
– | Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 includes debt securities that are traded less frequently than exchange-traded instruments and which are typically valued using third party pricing services; derivative contracts and other assets and liabilities, including securities, whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data; and MLHFS whose values are determined using quoted prices for similar assets or pricing models with inputs that are observable in the market or can be corroborated by observable market data. |
– | Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category includes MSRs and certain derivative contracts. |
120 |
||||||
Minimum | Maximum | Weighted- Average (a) |
||||||||||
Expected prepayment |
% | % | % | |||||||||
Option adjusted spread |
(a) |
Determined based on the relative fair value of the related mortgage loans serviced. |
121 |
||||
Minimum | Maximum | Weighted- Average (a) |
||||||||||
Expected loan close rate |
% | % | % | |||||||||
Inherent MSR value (basis points per loan) |
(a) |
Determined based on the relative fair value of the related mortgage loans. |
122 |
||||||
(Dollars in Millions) | Level 1 | Level 2 | Level 3 | Netting | Total | |||||||||||||||
December 31, 2021 |
||||||||||||||||||||
Available-for-sale |
||||||||||||||||||||
U.S. Treasury and agencies |
$ | $ | $ | – | $ | – | $ | |||||||||||||
Mortgage-backed securities |
||||||||||||||||||||
Residential agency |
– | – | – | |||||||||||||||||
Commercial agency |
– | – | – | |||||||||||||||||
Asset-backed securities |
– | – | ||||||||||||||||||
Obligations of state and political subdivisions |
– | – | ||||||||||||||||||
Other |
– | – | – | |||||||||||||||||
Total available-for-sale |
– | |||||||||||||||||||
Mortgage loans held for sale |
– | – | – | |||||||||||||||||
Mortgage servicing rights |
– | – | – | |||||||||||||||||
Derivative assets |
( |
) | ||||||||||||||||||
Other assets |
– | – | ||||||||||||||||||
Total |
$ | $ | $ | $ | ( |
$ | ||||||||||||||
Derivative liabilities |
$ | – | $ | $ | $ | ( |
$ | |||||||||||||
Short-term borrowings and other liabilities (a) |
– | – | ||||||||||||||||||
Total |
$ | $ | $ | $ | ( |
$ | ||||||||||||||
December 31, 2020 |
||||||||||||||||||||
Available-for-sale |
||||||||||||||||||||
U.S. Treasury and agencies |
$ | $ | $ | – | $ | – | $ | |||||||||||||
Mortgage-backed securities |
||||||||||||||||||||
Residential agency |
– | – | – | |||||||||||||||||
Commercial agency |
– | – | – | |||||||||||||||||
Asset-backed securities |
– | – | ||||||||||||||||||
Obligations of state and political subdivisions |
– | – | ||||||||||||||||||
Other |
– | – | – | |||||||||||||||||
Total available-for-sale |
– | |||||||||||||||||||
Mortgage loans held for sale |
– | – | – | |||||||||||||||||
Mortgage servicing rights |
– | – | – | |||||||||||||||||
Derivative assets |
( |
) | ||||||||||||||||||
Other assets |
– | – | ||||||||||||||||||
Total |
$ | $ | $ | $ | ( |
$ | ||||||||||||||
Derivative liabilities |
$ | – | $ | $ | $ | ( |
$ | |||||||||||||
Short-term borrowings and other liabilities (a) |
– | – | ||||||||||||||||||
Total |
$ | $ | $ | $ | ( |
$ |
(a) |
Primarily represents the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance. |
123 |
||||
(Dollars in Millions) |
Beginning of Period Balance |
Net Gains (Losses) Included in Net Income |
Net Gains (Losses) Included in Other Comprehensive Income (Loss) |
Purchases |
Sales |
Principal Payments |
Issuances |
Settlements |
Transfers into Level 3 |
End of Period Balance |
Net Change in Unrealized Gains (Losses) Relating to Assets and Liabilities Held at End of Period |
|||||||||||||||||||||||||||||||||
2021 |
||||||||||||||||||||||||||||||||||||||||||||
Available-for-sale |
||||||||||||||||||||||||||||||||||||||||||||
Asset-backed securities |
$ | $ | – | $ | $ | – | $ | – | $ | ( |
) | $ | – | $ | – | $ | – | $ | $ | |||||||||||||||||||||||||
Obligations of state and political subdivisions |
– | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||||||||||
Total available-for-sale |
– | – | – | ( |
) | – | – | – | ||||||||||||||||||||||||||||||||||||
Mortgage servicing rights |
( |
) (a) |
– | – | (c) |
– | – | ( |
) (a) | |||||||||||||||||||||||||||||||||||
Net derivative assets and liabilities |
( |
) (b) |
– | ( |
) | – | – | ( |
) | – | ( |
) (d) | ||||||||||||||||||||||||||||||||
2020 |
||||||||||||||||||||||||||||||||||||||||||||
Available-for-sale |
||||||||||||||||||||||||||||||||||||||||||||
Asset-backed securities |
$ | $ | – | $ | – | $ | – | $ | – | $ | ( |
) | $ | – | $ | – | $ | – | $ | $ | – | |||||||||||||||||||||||
Obligations of state and political subdivisions |
– | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||||||||||
Total available-for-sale |
– | – | – | – | ( |
) | – | – | – | – | ||||||||||||||||||||||||||||||||||
Mortgage servicing rights |
( |
) (a) |
– | – | (c) |
– | – | ( |
) (a) | |||||||||||||||||||||||||||||||||||
Net derivative assets and liabilities |
(e) |
– | ( |
) | – | – | ( |
) | – | (f) | ||||||||||||||||||||||||||||||||||
2019 |
||||||||||||||||||||||||||||||||||||||||||||
Available-for-sale |
||||||||||||||||||||||||||||||||||||||||||||
Asset-backed securities |
$ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | $ | $ | – | ||||||||||||||||||||||||
Obligations of state and political subdivisions |
– | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||||||||||
Total available-for-sale |
– | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||||||||||
Mortgage servicing rights |
( |
) (a) |
– | – | (c) |
– | – | ( |
) (a) | |||||||||||||||||||||||||||||||||||
Net derivative assets and liabilities |
(g) |
– | ( |
) | – | – | ( |
) | – | (h) |
(a) |
Included in mortgage banking revenue. |
(b) |
Approximately $ |
(c) |
Represents MSRs capitalized during the period. |
(d) |
Approximately $ |
(e) |
Approximately $ |
(f) |
Approximately $ |
(g) |
Approximately $ |
(h) |
Approximately $ |
2021 | 2020 | |||||||||||||||||||||||||||||||
(Dollars in Millions) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Loans (a) |
$ | – | $ | – | $ | $ | $ | – | $ | – | $ | $ | ||||||||||||||||||||
Other assets (b) |
– | – | – | – |
(a) |
Represents the carrying value of loans for which adjustments were based on the fair value of the collateral, excluding loans fully charged-off. |
(b) |
Primarily represents the fair value of foreclosed properties that were measured at fair value based on an appraisal or broker price opinion of the collateral subsequent to their initial acquisition. |
124 |
||||||
(Dollars in Millions) | 2021 | 2020 | 2019 | |||||||||
Loans (a) |
$ | $ | $ | |||||||||
Other assets (b) |
(a) |
Represents write-downs of loans which were based on the fair value of the collateral, excluding loans fully charged-off. |
(b) |
Primarily represents related losses of foreclosed properties that were measured at fair value subsequent to their initial acquisition. |
2021 | 2020 | |||||||||||||||||||||||
(Dollars in Millions) | Fair Value Carrying Amount |
Aggregate Unpaid Principal |
Carrying Amount Over (Under) Unpaid Principal |
Fair Value Carrying Amount |
Aggregate Unpaid Principal |
Carrying Amount Over (Under) Unpaid Principal |
||||||||||||||||||
Total loans |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Nonaccrual loans |
— | — | ||||||||||||||||||||||
Loans 90 days or more past due |
— | — |
2021 | 2020 | |||||||||||||||||||||||||||||||||||||||
Carrying Amount |
Fair Value | Carrying Amount |
Fair Value | |||||||||||||||||||||||||||||||||||||
(Dollars in Millions) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||
Financial Assets |
||||||||||||||||||||||||||||||||||||||||
Cash and due from banks |
$ | $ | $ | – | $ | – | $ | $ | $ | $ | – | $ | – | $ | ||||||||||||||||||||||||||
Federal funds sold and securities purchased under resale agreements |
– | – | – | – | ||||||||||||||||||||||||||||||||||||
Investment securities held-to-maturity |
– | – | – | – | – | – | – | |||||||||||||||||||||||||||||||||
Loans held for sale (a) |
– | – | – | – | ||||||||||||||||||||||||||||||||||||
Loans |
– | – | – | – | ||||||||||||||||||||||||||||||||||||
Other (b) |
– | – | ||||||||||||||||||||||||||||||||||||||
Financial Liabilities |
||||||||||||||||||||||||||||||||||||||||
Time deposits |
– | – | – | – | ||||||||||||||||||||||||||||||||||||
Short-term borrowings (c) |
– | – | – | – | ||||||||||||||||||||||||||||||||||||
Long-term debt |
– | – | – | – | ||||||||||||||||||||||||||||||||||||
Other (d) |
– | – |
(a) |
Excludes mortgages held for sale for which the fair value option under applicable accounting guidance was elected. |
(b) |
Includes investments in Federal Reserve Bank and Federal Home Loan Bank stock and tax-advantaged investments. |
(c) |
Excludes the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance. |
(d) |
Includes operating lease liabilities and liabilities related to tax-advantaged investments. |
125 |
||||
NOTE 23 |
Guarantees and Contingent Liabilities |
Term | ||||||||||||
(Dollars in Millions) | Less Than One Year |
Greater Than One Year |
Total | |||||||||
Commercial and commercial real estate loans |
$ | $ | $ | |||||||||
Corporate and purchasing card loans (a) |
– | |||||||||||
Residential mortgages |
||||||||||||
Retail credit card loans (a) |
– | |||||||||||
Other retail loans |
||||||||||||
Other |
– |
(a) |
Primarily cancelable at the Company’s discretion. |
(Dollars in Millions) | Collateral Held |
Carrying Amount |
Maximum Potential Future Payments |
|||||||||
Standby letters of credit |
$ | – | $ | $ | ||||||||
Third party borrowing arrangements |
– | – | ||||||||||
Securities lending indemnifications |
– | |||||||||||
Asset sales |
||||||||||||
Merchant processing |
||||||||||||
Tender option bond program guarantee |
– | |||||||||||
Other |
– |
126 |
||||||
Term | ||||||||||||
(Dollars in Millions) | Less Than One Year |
Greater Than One Year |
Total | |||||||||
Standby |
$ |
$ |
$ |
|||||||||
Commercial |
127 |
||||
128 |
||||||
NOTE 24 |
Business Segments |
129 |
||||
130 |
||||||
Corporate and Commercial Banking |
Consumer and Business Banking |
Wealth Management and Investment Services |
||||||||||||||||||||||||||||||||||
(Dollars in Millions) | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||
Condensed Income Statement |
||||||||||||||||||||||||||||||||||||
Net interest income (taxable-equivalent basis) |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Noninterest income |
||||||||||||||||||||||||||||||||||||
Total net revenue |
||||||||||||||||||||||||||||||||||||
Noninterest expense |
||||||||||||||||||||||||||||||||||||
Other intangibles |
– | – | ||||||||||||||||||||||||||||||||||
Total noninterest expense |
||||||||||||||||||||||||||||||||||||
Income (loss) before provision and income taxes |
||||||||||||||||||||||||||||||||||||
Provision for credit losses |
( |
) | ||||||||||||||||||||||||||||||||||
Income (loss) before income taxes |
||||||||||||||||||||||||||||||||||||
Income taxes and taxable-equivalent adjustment |
||||||||||||||||||||||||||||||||||||
Net income (loss) |
||||||||||||||||||||||||||||||||||||
Net (income) loss attributable to noncontrolling interests |
– | – | – | – | – | – | ||||||||||||||||||||||||||||||
Net income (loss) attributable to U.S. Bancorp |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Average Balance Sheet |
||||||||||||||||||||||||||||||||||||
Loans |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Other earning assets |
||||||||||||||||||||||||||||||||||||
Goodwill |
||||||||||||||||||||||||||||||||||||
Other intangible assets |
||||||||||||||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||||||||||
Noninterest-bearing deposits |
||||||||||||||||||||||||||||||||||||
Interest-bearing deposits |
||||||||||||||||||||||||||||||||||||
Total deposits |
||||||||||||||||||||||||||||||||||||
Total U.S. Bancorp shareholders’ equity |
||||||||||||||||||||||||||||||||||||
Payment Services |
Treasury and Corporate Support |
Consolidated Company |
||||||||||||||||||||||||||||||||||
(Dollars in Millions) | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||
Condensed Income Statement |
||||||||||||||||||||||||||||||||||||
Net interest income (taxable-equivalent basis) |
$ | $ | $ | $ | ( |
) | $ | $ | ||||||||||||||||||||||||||||
Noninterest income |
(a) |
(a) |
(b) |
(b) |
||||||||||||||||||||||||||||||||
Total net revenue |
||||||||||||||||||||||||||||||||||||
Noninterest expense |
||||||||||||||||||||||||||||||||||||
Other intangibles |
– | – | ||||||||||||||||||||||||||||||||||
Total noninterest expense |
||||||||||||||||||||||||||||||||||||
Income (loss) before provision and income taxes |
( |
) | ||||||||||||||||||||||||||||||||||
Provision for credit losses |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Income (loss) before income taxes |
( |
) | ||||||||||||||||||||||||||||||||||
Income taxes and taxable-equivalent adjustment |
( |
) | ||||||||||||||||||||||||||||||||||
Net income (loss) |
( |
) | ||||||||||||||||||||||||||||||||||
Net (income) loss attributable to noncontrolling interests |
– | – | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Net income (loss) attributable to U.S. Bancorp |
$ | $ | $ | $ | ( |
) | $ | $ | ||||||||||||||||||||||||||||
Average Balance Sheet |
||||||||||||||||||||||||||||||||||||
Loans |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Other earning assets |
||||||||||||||||||||||||||||||||||||
Goodwill |
– | – | ||||||||||||||||||||||||||||||||||
Other intangible assets |
– | – | ||||||||||||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||||||||||
Noninterest-bearing deposits |
||||||||||||||||||||||||||||||||||||
Interest-bearing deposits |
||||||||||||||||||||||||||||||||||||
Total deposits |
||||||||||||||||||||||||||||||||||||
Total U.S. Bancorp shareholders’ equity |
(a) Presented net of related rewards and rebate costs and certain partner payments of $ |
(b) Includes revenue generated from certain contracts with customers of $ |
131 |
||||
NOTE 25 |
U.S. Bancorp (Parent Company) |
At December 31 (Dollars in Millions) | 2021 | 2020 | ||||||||||
Assets |
||||||||||||
Due from banks, principally interest-bearing |
$ | $ | ||||||||||
Available-for-sale |
||||||||||||
Investments in bank subsidiaries |
||||||||||||
Investments in nonbank subsidiaries |
||||||||||||
Advances to bank subsidiaries |
||||||||||||
Advances to nonbank subsidiaries |
||||||||||||
Other assets |
||||||||||||
Total assets |
$ | $ | ||||||||||
Liabilities and Shareholders’ Equity |
||||||||||||
Long-term debt |
$ | $ | ||||||||||
Other liabilities |
||||||||||||
Shareholders’ equity |
||||||||||||
Total liabilities and shareholders’ equity |
$ | $ |
Year Ended December 31 (Dollars in Millions) | 2021 | 2020 | 2019 | |||||||||
Income |
||||||||||||
Dividends from bank subsidiaries |
$ | $ | $ | |||||||||
Dividends from nonbank subsidiaries |
||||||||||||
Interest from subsidiaries |
||||||||||||
Other income |
||||||||||||
Total income |
||||||||||||
Expense |
||||||||||||
Interest expense |
||||||||||||
Other expense |
||||||||||||
Total expense |
||||||||||||
Income before income taxes and equity in undistributed income of subsidiaries |
||||||||||||
Applicable income taxes |
( |
) | ( |
) | ( |
) | ||||||
Income of parent company |
||||||||||||
Equity in undistributed income of subsidiaries |
||||||||||||
Net income attributable to U.S. Bancorp |
$ | $ | $ |
132 |
||||||
Year Ended December 31 (Dollars in Millions) | 2021 | 2020 | 2019 | |||||||||
Operating Activities |
||||||||||||
Net income attributable to U.S. Bancorp |
$ | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities |
||||||||||||
Equity in undistributed income of subsidiaries |
( |
) | ( |
) | ( |
) | ||||||
Other, net |
( |
) | ||||||||||
Net cash provided by operating activities |
||||||||||||
Investing Activities |
||||||||||||
Proceeds from sales and maturities of investment securities |
||||||||||||
Purchases of investment securities |
– | ( |
) | |||||||||
Net (increase) decrease in short-term advances to subsidiaries |
||||||||||||
Long-term advances to subsidiaries |
( |
) | – | ( |
) | |||||||
Principal collected on long-term advances to subsidiaries |
– | |||||||||||
Other, net |
( |
) | ( |
) | ||||||||
Net cash provided by (used in) investing activities |
( |
) | ( |
) | ||||||||
Financing Activities |
||||||||||||
Net increase (decrease) in short-term borrowings |
( |
) | ||||||||||
Proceeds from issuance of long-term debt |
||||||||||||
Principal payments or redemption of long-term debt |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from issuance of preferred stock |
– | |||||||||||
Proceeds from issuance of common stock |
||||||||||||
Repurchase of preferred stock |
( |
) | – | – | ||||||||
Repurchase of common stock |
( |
) | ( |
) | ( |
) | ||||||
Cash dividends paid on preferred stock |
( |
) | ( |
) | ( |
) | ||||||
Cash dividends paid on common stock |
( |
) | ( |
) | ( |
) | ||||||
Net cash used in financing activities |
( |
) | ( |
) | ( |
) | ||||||
Change in cash and due from banks |
( |
) | ||||||||||
Cash and due from banks at beginning of year |
||||||||||||
Cash and due from banks at end of year |
$ | $ | $ |
NOTE 26 |
Subsequent Events |
133 |
||||
2021 | ||||||||||||||||
Year Ended December 31 (Dollars in Millions) | Average Balances |
Interest | Yields and Rates |
|||||||||||||
Assets |
||||||||||||||||
Investment securities |
$ | 154,702 | $ | 2,434 | 1.57 | % | ||||||||||
Loans held for sale |
8,024 | 232 | 2.89 | |||||||||||||
Loans (b) |
||||||||||||||||
Commercial |
102,855 | 2,684 | 2.61 | |||||||||||||
Commercial real estate |
38,781 | 1,219 | 3.14 | |||||||||||||
Residential mortgages |
74,629 | 2,477 | 3.32 | |||||||||||||
Credit card |
21,645 | 2,278 | 10.52 | |||||||||||||
Other retail |
59,055 | 2,126 | 3.60 | |||||||||||||
Total loans |
296,965 | 10,784 | 3.63 | |||||||||||||
Other earning assets |
46,450 | 143 | .31 | |||||||||||||
Total earning assets |
506,141 | 13,593 | 2.69 | |||||||||||||
Allowance for loan losses |
(6,326 | ) | ||||||||||||||
Unrealized gain (loss) on investment securities |
1,174 | |||||||||||||||
Other assets |
55,543 | |||||||||||||||
Total assets |
$ | 556,532 | ||||||||||||||
Liabilities and Shareholders’ Equity |
||||||||||||||||
Noninterest-bearing deposits |
$ | 127,204 | ||||||||||||||
Interest-bearing deposits |
||||||||||||||||
Interest checking |
103,198 | 24 | .02 | |||||||||||||
Money market savings |
117,093 | 199 | .17 | |||||||||||||
Savings accounts |
62,294 | 7 | .01 | |||||||||||||
Time deposits |
24,492 | 90 | .37 | |||||||||||||
Total interest-bearing deposits |
307,077 | 320 | .10 | |||||||||||||
Short-term borrowings |
||||||||||||||||
Federal funds purchased |
1,507 | 2 | .10 | |||||||||||||
Securities sold under agreements to repurchase |
1,790 | 2 | .13 | |||||||||||||
Commercial paper |
7,228 | 1 | .01 | |||||||||||||
Other short-term borrowings |
4,249 | 65 | 1.54 | |||||||||||||
Total short-term borrowings |
14,774 | 70 | .47 | |||||||||||||
Long-term debt |
36,682 | 603 | 1.64 | |||||||||||||
Total interest-bearing liabilities |
358,533 | 993 | .28 | |||||||||||||
Other liabilities |
16,353 | |||||||||||||||
Shareholders’ equity |
||||||||||||||||
Preferred equity |
6,255 | |||||||||||||||
Common equity |
47,555 | |||||||||||||||
Total U.S. Bancorp shareholders’ equity |
53,810 | |||||||||||||||
Noncontrolling interests |
632 | |||||||||||||||
Total equity |
54,442 | |||||||||||||||
Total liabilities and equity |
$ | 556,532 | ||||||||||||||
Net interest income |
$ | 12,600 | ||||||||||||||
Gross interest margin |
2.41 | % | ||||||||||||||
Gross interest margin without taxable-equivalent increments |
2.39 | % | ||||||||||||||
Percent of Earning Assets |
||||||||||||||||
Interest income |
2.69 | % | ||||||||||||||
Interest expense |
.20 | |||||||||||||||
Net interest margin |
2.49 | % | ||||||||||||||
Net interest margin without taxable-equivalent increments |
2.47 | % |
(a) |
Interest and rates are presented on a fully taxable-equivalent basis based on a federal income tax rate of 21 percent . |
(b) |
Interest income and rates on loans include loan fees. Nonaccrual loans are included in average loan balances. |
134 |
||||||
2020 | 2019 | 2021 v 2020 | ||||||||||||||||||||||||||||||||
Average Balances |
Interest | Yields and Rates |
Average Balances |
Interest | Yields and Rates |
% Change Average Balances |
||||||||||||||||||||||||||||
$ | 125,954 | $ | 2,488 | 1.98 | % | $ | 117,150 | $ | 2,950 | 2.52 | % | 22.8 | % | |||||||||||||||||||||
6,985 | 216 | 3.10 | 3,769 | 162 | 4.30 | 14.9 | ||||||||||||||||||||||||||||
113,967 | 3,192 | 2.80 | 103,198 | 4,229 | 4.10 | (9.8 | ) | |||||||||||||||||||||||||||
40,548 | 1,457 | 3.59 | 39,386 | 1,919 | 4.87 | (4.4 | ) | |||||||||||||||||||||||||||
73,667 | 2,666 | 3.62 | 67,747 | 2,644 | 3.90 | 1.3 | ||||||||||||||||||||||||||||
22,332 | 2,392 | 10.71 | 23,309 | 2,680 | 11.50 | (3.1 | ) | |||||||||||||||||||||||||||
56,755 | 2,352 | 4.14 | 57,046 | 2,682 | 4.70 | 4.1 | ||||||||||||||||||||||||||||
307,269 | 12,059 | 3.92 | 290,686 | 14,154 | 4.87 | (3.4 | ) | |||||||||||||||||||||||||||
41,194 | 179 | .43 | 18,932 | 341 | 1.80 | 12.8 | ||||||||||||||||||||||||||||
481,402 | 14,942 | 3.10 | 430,537 | 17,607 | 4.09 | 5.1 | ||||||||||||||||||||||||||||
(6,858 | ) | (4,007 | ) | 7.8 | ||||||||||||||||||||||||||||||
2,901 | (117 | ) | (59.5 | ) | ||||||||||||||||||||||||||||||
53,762 | 49,240 | 3.3 | ||||||||||||||||||||||||||||||||
$ | 531,207 | $ | 475,653 | 4.8 | ||||||||||||||||||||||||||||||
$ | 98,539 | $ | 73,863 | 29.1 | % | |||||||||||||||||||||||||||||
84,276 | 65 | .08 | 72,553 | 227 | .31 | 22.5 | ||||||||||||||||||||||||||||
125,786 | 528 | .42 | 109,849 | 1,637 | 1.49 | (6.9 | ) | |||||||||||||||||||||||||||
52,142 | 46 | .09 | 46,130 | 111 | .24 | 19.5 | ||||||||||||||||||||||||||||
37,872 | 311 | .82 | 44,417 | 880 | 1.98 | (35.3 | ) | |||||||||||||||||||||||||||
300,076 | 950 | .32 | 272,949 | 2,855 | 1.05 | 2.3 | ||||||||||||||||||||||||||||
1,660 | 6 | .35 | 1,457 | 28 | 1.94 | (9.2 | ) | |||||||||||||||||||||||||||
1,686 | 8 | .50 | 1,770 | 36 | 2.00 | 6.2 | ||||||||||||||||||||||||||||
8,141 | 21 | .26 | 8,186 | 119 | 1.45 | (11.2 | ) | |||||||||||||||||||||||||||
7,695 | 109 | 1.41 | 6,724 | 187 | 2.78 | (44.8 | ) | |||||||||||||||||||||||||||
19,182 | 144 | .75 | 18,137 | 370 | 2.04 | (23.0 | ) | |||||||||||||||||||||||||||
44,040 | 924 | 2.10 | 41,572 | 1,227 | 2.95 | (16.7 | ) | |||||||||||||||||||||||||||
363,298 | 2,018 | .56 | 332,658 | 4,452 | 1.34 | (1.3 | ) | |||||||||||||||||||||||||||
16,494 | 15,880 | (.9 | ) | |||||||||||||||||||||||||||||||
6,042 | 5,984 | 3.5 | ||||||||||||||||||||||||||||||||
46,204 | 46,639 | 2.9 | ||||||||||||||||||||||||||||||||
52,246 | 52,623 | 3.0 | ||||||||||||||||||||||||||||||||
630 | 629 | .3 | ||||||||||||||||||||||||||||||||
52,876 | 53,252 | 3.0 | ||||||||||||||||||||||||||||||||
$ | 531,207 | $ | 475,653 | 4.8 | ||||||||||||||||||||||||||||||
$ | 12,924 | $ | 13,155 | |||||||||||||||||||||||||||||||
2.54 | % | 2.75 | % | |||||||||||||||||||||||||||||||
2.52 | % | 2.73 | % | |||||||||||||||||||||||||||||||
3.10 | % | 4.09 | % | |||||||||||||||||||||||||||||||
.42 | 1.03 | |||||||||||||||||||||||||||||||||
2.68 | % | 3.06 | % | |||||||||||||||||||||||||||||||
2.66 | % | 3.04 | % |
135 |
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Earnings Per Common Share Summary | 2021 | 2020 | 2019 | |||||||||
Earnings per common share |
$ | 5.11 | $ | 3.06 | $ | 4.16 | ||||||
Diluted earnings per common share |
5.10 | 3.06 | 4.16 | |||||||||
Dividends declared per common share |
1.76 | 1.68 | 1.58 | |||||||||
Other Statistics (Dollars and Shares in Millions) | ||||||||||||
Common shares outstanding (a) |
1,484 | 1,507 | 1,534 | |||||||||
Average common shares outstanding and common stock equivalents |
||||||||||||
Earnings per common share |
1,489 | 1,509 | 1,581 | |||||||||
Diluted earnings per common share |
1,490 | 1,510 | 1,583 | |||||||||
Number of shareholders (b) |
31,111 | 32,520 | 33,515 | |||||||||
Common dividends declared |
$ | 2,630 | $ | 2,541 | $ | 2,493 |
(a) |
Defined as total common shares less common stock held in treasury at December 31. |
(b) |
Based on number of common stock shareholders of record at December 31. |
136 |
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137 |
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138 |
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139 |
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140 |
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141 |
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142 |
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143 |
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144 |
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145 |
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146 |
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147 |
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148 |
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149 |
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150 |
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151 |
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152 |
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1. |
Executive Committee |
2. |
Audit Committee |
3. |
Capital Planning Committee |
4. |
Compensation and Human Resources Committee |
5. |
Governance Committee |
6. |
Public Responsibility Committee |
7. |
Risk Management Committee |
153 |
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