Today the Federal Reserve disclosed the results of the 2015
Comprehensive Capital Analysis and Review (“CCAR”). After a review of
the Company’s CCAR results, the Federal Reserve did not object to the
Company’s plan to increase its capital distributions over the next five
fiscal quarters. The Federal Reserve’s CCAR disclosure included its
estimate of U.S. Bancorp’s minimum capital ratios for the period from
the fourth quarter of 2014 through the fourth quarter of 2016 under the
Supervisory Severely Adverse Scenario and the Supervisory Adverse
Scenario, including the dividends and buybacks proposed by the Company
under the more likely base case scenario.
As a result of the Federal Reserve’s non-objection to U.S. Bancorp’s
plan to increase its dividend rate, the Company will recommend in June
that its board of directors approve an increase to the annual dividend
rate beginning with the second quarter dividend payable in July 2015.
The Company expects to recommend a second quarter dividend of $0.255 per
common share, a 4.1 percent increase over the current dividend rate. At
this quarterly dividend rate, the annual dividend will be equivalent to
$1.02 per common share.
Additionally, the board of directors of U.S. Bancorp has approved a
five-quarter authorization to repurchase up to $3.022 billion of its
outstanding stock, beginning on April 1, 2015, to replace the current
authorization, which expires on March 31, 2015. U.S. Bancorp’s common
stock may be repurchased through June 2016 in the open market or in
privately negotiated transactions. The acquired common shares will be
held as treasury shares and may be reissued for various corporate
purposes.
“We are very pleased to receive the Federal Reserve’s non-objection to
our plan to increase our dividends and authorize a new share repurchase
program,” said Richard K. Davis, chairman, president, and chief
executive officer of U.S. Bancorp. “Our Company’s ability to generate
capital, even under extraordinarily adverse economic conditions, is well
proven by the results of this year’s CCAR. Our goal is to return 60 to
80 percent of our earnings each year to shareholders through dividends
and share buybacks, and our planned capital actions will allow us to,
once again, achieve that goal in 2015.”
Minneapolis-based U.S. Bancorp (NYSE:USB), with $403 billion in assets
as of Dec. 31, 2014, is the parent company of U.S. Bank National
Association, the fifth largest commercial bank in the United States. The
company operates 3,176 banking offices in 25 states and 5,022 ATMs and
provides a comprehensive line of banking, investment, mortgage, trust
and payment services products to consumers, businesses and institutions.
Visit U.S. Bancorp on the web at www.usbank.com.
Forward-Looking Statements
The following information appears in accordance with 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. The
forward-looking statements contained in this press release include,
among other things, anticipated future U.S. Bancorp capital
distributions by dividends and stock repurchases. There can be no
assurance that U.S. Bancorp will distribute this or any amount of
capital to its shareholders in the future in the form of dividends or
share repurchases.
Forward-looking statements involve inherent risks and uncertainties, and
important factors could cause actual results to differ materially from
those anticipated. A reversal or slowing of the current economic
recovery or another severe contraction 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. Stress in the
commercial real estate markets, as well as a downturn in the residential
real estate markets could cause 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; breaches in data security; 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,
compliance risk, strategic risk, interest rate risk, liquidity risk and
reputational risk.
For discussion of these and other risks that may cause actual results to
differ from expectations, refer to U.S. Bancorp’s Annual Report on Form
10-K for the year ended December 31, 2014, as amended, on file with the
Securities and Exchange Commission, 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 the reader 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 2015