Decision will preserve more than $2.6 billion of capital on an annualized basis Flight to quality continues in first quarter 2009MINNEAPOLIS, Mar 04, 2009 (BUSINESS WIRE) -- The board of directors of U.S. Bancorp (NYSE: USB) has declared a
quarterly dividend of $0.05 per common share, a reduction of $0.375, or
88.2 percent, from the $0.425 dividend per common share paid in the same
quarter of 2008. The dividend is payable April 15, 2009, to shareholders
of record at the close of business on March 31, 2009. At this quarterly
dividend rate, the annual dividend is equivalent to $0.20 per common
U.S. Bancorp Chairman, President and Chief Executive Officer Richard K.
Davis said, "The decision to reduce our quarterly dividend was
thoughtfully considered and very difficult, given the importance of the
dividend to our shareholders. It was, however, the right decision, as
our industry continues to confront uncertainty in the financial markets
and a weakening economy. It is important for our shareholders to know
that we are not reducing the dividend and preserving capital from a
position of weakness, but from a position of strength and a desire to
continue to invest in and expand our business. We are benefiting from a
flight to quality as we continue to lend, acquire deposits and grow our
fee-based businesses. In addition, we are investing in our franchise and
employees, positively impacting our customers and the communities we
serve. A strong capital position is essential to manage, grow and
prosper in this challenging environment. Our company's capital position
is solid, evidenced by a Tier 1 capital ratio of 10.6 percent at
December 31, 2008. However, given the increasing focus on common equity
as a measure of financial strength, we believe it is important to reduce
the dividend and grow common equity as a proportion of total capital.
Together with our company's ability to generate capital through strong
operating earnings, this dividend reduction will serve to fortify our
capital base and ensure that our company can withstand the challenges
facing the banking industry today, while remaining positioned to take
advantage of opportunities for growth both now and in the future.
Additionally, the preservation of capital will give our company the
flexibility to redeem the U.S. Treasury's preferred stock investment as
soon as prudently possible.
"It is also important for our shareholders to know that we are committed
to returning the dividend to a normalized rate as soon as possible. I am
confident that the quality of our franchise and our disciplined approach
to credit and risk management will enable this company to perform, and
even thrive, during these difficult times and serve to further
underscore what makes U.S. Bancorp distinctive among its peers."
In other action, the board of directors has also declared a regular
quarterly dividend of $218.75 per share (equivalent to $0.21875 per
depositary share) on U.S. Bancorp's Series B Non-Cumulative Perpetual
Preferred Stock, payable April 15, 2009, to stockholders of record at
the close of business on March 31, 2009.
Additionally, the board of directors declared a regular quarterly
dividend of $492.19 per share (equivalent to $0.49219 per depositary
share) on U.S. Bancorp's Series D Non-Cumulative Perpetual Preferred
Stock, payable April 15, 2009, to stockholders of record at the close of
business on March 31, 2009.
Davis and Andrew Cecere, vice chairman and chief financial officer, will
host a conference call at 8:00 a.m. (CST) on Wednesday, March 4, 2009 to
discuss today's dividend announcement and give a brief business update.
The conference call will be available by telephone or Internet.
Presentation slides related to today's discussion can be found on our
website at www.usbank.com.
To access the conference call from locations within the United States
and Canada, please dial 866-316-1409. Participants calling from outside
the United States and Canada, please dial 706-634-9086. The conference
ID number for all participants is 88779470. For those unable to
participate during the live call, a recording of the call will be
available approximately two hours after the conference call ends on
Wednesday, March 4th, and will run through Wednesday, March 11th, at
11:00 p.m. (CST). To access the recorded message within the United
States and Canada, dial 800-642-1687. If calling from outside the United
States and Canada, please dial 706-645-9291 to access the recording. The
conference ID is 88779470. To access the webcast and slide presentation
go to usbank.com and click on "About U.S. Bancorp" and then
"Investor/Shareholder Information." The webcast link can be found under
"Webcasts and Presentations."
Minneapolis-based U.S. Bancorp, with $266 billion in assets, is the
parent company of U.S. Bank National Association, the 6th largest
commercial bank in the United States. The company operates 2,791 banking
offices and 5,164 ATMs in 24 states, 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.
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. These statements often include the words "may," "could,"
"would," "should," "believes," "expects," "anticipates," "estimates,"
"intends," "plans," "targets," "potentially," "probably," "projects,"
"outlook" or similar expressions. 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. A continuation of the recent turbulence in significant
portions of the global financial markets, particularly if it worsens,
could impact our performance, both directly by affecting our revenues
and the value of our assets and liabilities, and indirectly by affecting
our counterparties and the economy generally. Dramatic declines in the
housing market in the past year have resulted in significant write-downs
of asset values by financial institutions. Concerns about the stability
of the financial markets generally have reduced the availability of
funding to certain financial institutions, leading to a tightening of
credit, reduction of business activity, and increased market volatility.
There can be no assurance that any governmental program or legislation
will help to stabilize the U.S. financial system or alleviate the
industry or economic factors that may adversely impact our business. In
addition, our business and financial performance could be impacted as
the financial industry restructures in the current environment, by
increased regulation of financial institutions or other effects of
recently enacted legislation, by changes in the creditworthiness and
performance of our counterparties, and by changes in the competitive
landscape. Our results could also be adversely affected by continued
deterioration in general business and economic conditions; changes in
interest rates; deterioration in the credit quality of our loan
portfolios or in the value of the collateral securing those loans;
deterioration in the value of securities held in our 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, market risk,
operational risk, legal risk, and regulatory and compliance 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, 2008, on file with the Securities
and Exchange Commission, including the sections entitled "Risk Factors"
and "Corporate Risk Profile." Forward-looking statements speak only as
of the date they are made, and the Company undertakes no obligation to
update them in light of new information or future events.
SOURCE: U.S. Bancorp
Steve Dale, 612-303-0784
Judith T. Murphy, 612-303-0783