U.S. Bancorp (NYSE: USB) today announced that it has reached a
settlement with the U.S. Department of Justice (DOJ) in order to resolve
an investigation relating to the endorsement of mortgage loans under the
Federal Housing Administration’s (FHA) insurance program.
U.S. Bancorp previously disclosed the investigation, potential claims
and the related reasonably possible losses in prior financial statement
disclosures. The company cooperated fully with the DOJ investigation and
chose to settle this matter for $200 million without an admission of
liability to avoid the path of costly and protracted litigation as well
as distractions to the business. U.S. Bancorp has a legacy of being a
respected mortgage lender, including a decades-long, strong working
relationship with HUD and its FHA loan programs.
In addition, during the second quarter and prior to the settlement
agreement with the DOJ, the company sold 3.0 million shares of the Class
B common stock of Visa Inc. resulting in a net pretax gain of $214
million. After the sale, the company continues to own approximately 9.6
million Visa Class B shares. The combination of the settlement and the
sale of Visa Class B shares is expected to be neutral to
earnings-per-share in the second quarter.
About U.S. Bank
U.S. Bancorp (NYSE: USB), with $371 billion
in assets as of March 31, 2014, is the parent company of U.S. Bank
National Association, the 5th largest commercial bank in the United
States. As of June 23, 2014, the company operates 3,175 banking offices
in 25 states and 5,004 ATMs and provides a comprehensive line of
banking, brokerage, insurance, investment, mortgage, trust and payment
services products to consumers, businesses and institutions. Visit U.S.
Bancorp on the web at usbank.com.
"Safe Harbor" Statement under the Private Securities Litigation Reform
Act of 1995: This press release contains forward-looking statements
about U.S. Bancorp. Statements that are not historical or current facts,
including statements about beliefs and expectations, are forward-looking
statements and are based on the information available to, and
assumptions and estimates made by, management as of the date hereof.
These forward-looking statements cover, among other things, anticipated
future revenue and expenses and the future plans and prospects of U.S.
Bancorp. Forward-looking statements involve inherent risks and
uncertainties, and important factors could cause actual results to
differ materially from those anticipated. Global and domestic economies
could fail to recover from the recent economic downturn or could
experience another severe contraction, which could adversely affect U.S.
Bancorp’s revenues and the values of its assets and liabilities. Global
financial markets could experience a recurrence of significant
turbulence, which could reduce the availability of funding to certain
financial institutions and lead to a tightening of credit, a reduction
of business activity, and increased market volatility. Continued stress
in the commercial real estate markets, as well as a delay or failure of
recovery in the residential real estate markets could cause additional
credit losses and deterioration in asset values. In addition,
U.S. Bancorp’s business and financial performance is likely to be
negatively impacted by recently enacted and future legislation and
regulation. U.S. Bancorp’s results could also be adversely affected by
deterioration in general business and economic conditions; changes in
interest rates; deterioration in the credit quality of its loan
portfolios or in the value of the collateral securing those loans;
deterioration in the value of securities held in its investment
securities portfolio; legal and regulatory developments; increased
competition from both banks and non-banks; changes in customer behavior
and preferences; effects of mergers and acquisitions and related
integration; effects of critical accounting policies and judgments; and
management’s ability to effectively manage credit risk, residual value
risk, market risk, operational risk, interest rate risk and liquidity
risk.
For a discussion of such risks and uncertainties, which could cause
actual results to differ from expectations, see U.S. Bancorp’s Annual
Report on Form 10-K for the year ended December 31, 2013, including the
sections entitled "Risk Factors" and “Corporate Risk Profile” contained
in Exhibit 13, and all subsequent filings with the Securities and
Exchange Commission under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934. However, factors other than these also
could adversely affect U.S. Bancorp’s results, and you should not
consider these factors to be a complete set of all potential risks or
uncertainties. Forward-looking statements speak only as of the date
hereof, and U.S. Bancorp undertakes no obligation to update them in
light of new information or future events.
Copyright Business Wire 2014