Company Announces Proposed Quarterly Common Stock Dividend Increase
and Authorizes New $2.3 Billion Share Repurchase Program
MINNEAPOLIS--(BUSINESS WIRE)--Mar. 26, 2014--
Today the Federal Reserve disclosed the results of the 2014
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 four
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 2013 through the fourth quarter of 2015 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 2014.
The Company expects to recommend a second quarter dividend of $0.245 per
common share, a 6.5 percent increase over the current dividend rate. At
this quarterly dividend rate, the annual dividend will be equivalent to
$0.98 per common share.
Additionally, the board of directors of U.S. Bancorp has approved a
one-year authorization to repurchase up to $2.3 billion of its
outstanding stock, beginning on April 1, 2014, to replace the current
authorization, which expires on March 31, 2014. U.S. Bancorp’s common
stock may be repurchased through March 2015 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
“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. “The Company’s CCAR results
demonstrate our ability to generate capital, even under extraordinarily
adverse economic conditions. 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 2014.”
Minneapolis-based U.S. Bancorp (“USB”), with $364 billion in assets as
of Dec. 31, 2013, is the parent company of U.S. Bank National
Association, the 5th largest commercial bank in the United States. The
Company operates 3,081 banking offices in 25 states and 4,906 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 www.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 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
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 moderate
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. 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 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, 2013, 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.
Source: U.S. Bancorp
Thomas Joyce, 612-303-3167