The net interest margin was 3.49 percent, a decrease of 7 bps from 3.56 percent in the previous quarter. The decline in net interest margin was driven by the 4 bps benefit in the third quarter from non-recurring items described above as well as lower loan and securities yields. The margin otherwise benefited by 2 bps from the full quarter impact of the TruPS redemption in the third quarter and 1 bp from the FHLB debt termination in December.
Compared with the fourth quarter of 2011, net interest income decreased $17 million and the net interest margin decreased 18 bps, driven by lower asset yields partially offset by higher average loan balances, run-off in higher-priced CDs and mix shift to lower cost deposit products.
Average securities and other short-term investments were $16.8 billion in the fourth quarter of 2012 compared with $16.6 billion in the previous quarter and $17.2 billion in the fourth quarter of 2011. The sequential increase in average balances was related to the pre-investment in the third quarter of anticipated fourth quarter cash flows. The year-over-year decline was due to the timing of reinvestment in portfolio cash flows during 2011 as well as lower cash balances held at the Federal Reserve.Loans
|For the Three Months Ended||% Change|
|Average Portfolio Loans and Leases ($ in millions)|
|Commercial and industrial loans||$34,301||$33,111||$32,734||$31,371||$29,891||4%||15%|
|Subtotal - commercial loans and leases||47,689||46,901||46,886||45,913||44,636||2%||7%|
|Residential mortgage loans||11,846||11,578||11,274||10,828||10,464||2%||13%|
|Other consumer loans and leases||306||314||326||345||402||(3%)||(24%)|
|Subtotal - consumer loans and leases||36,254||35,987||35,700||35,587||35,278||1%||3%|
|Total average loans and leases (excluding held for sale)||$83,943||$82,888||$82,586||$81,500||$79,914||1%||5%|
|Average loans held for sale||2,237||1,941||1,920||2,257||2,364||15%||(5%)|