Company announces proposed quarterly common stock dividend increase
of 9.8% and authorizes new $2.6 billion share repurchase program
MINNEAPOLIS--(BUSINESS WIRE)--Jun. 29, 2016--
Today the Federal Reserve disclosed the results of the 2016
Comprehensive Capital Analysis and Review (“CCAR”). After a review of
the Company’s submission and final 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 first quarter of 2016 through the first quarter of 2018
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 July
that its board of directors approve an increase to the quarterly
dividend rate beginning with the third quarter dividend payable in
October 2016. The Company expects to recommend a third quarter dividend
of $0.28 per common share, a 9.8 percent increase over the current
dividend rate. At this quarterly dividend rate, the annual dividend will
be equivalent to $1.12 per common share.
Additionally, the board of directors of U.S. Bancorp has approved a
four-quarter authorization to repurchase up to $2.6 billion of its
outstanding stock, beginning on July 1, 2016, to replace the current
five-quarter authorization, which expires on June 30, 2016. U.S.
Bancorp’s common stock may be repurchased through June 2017 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
“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 and chief executive officer of
U.S. Bancorp. “Our Company’s ability to withstand extraordinarily
adverse economic conditions is once again proven by the results of this
year’s CCAR. Our goal is to return 60 to 80 percent of our earnings to
shareholders through dividends and share buybacks, and our planned
capital actions will allow us to once again achieve that goal in 2016.”
U.S. Bancorp (NYSE: USB), with $429 billion in assets as of March 31,
2016, is the parent company of U.S. Bank National Association, the fifth
largest commercial bank in the United States. The Company operates 3,129
banking offices in 25 states and 4,954 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.
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 U.S. Bancorp capital distributions by
dividends and share repurchases. There can be no assurance that U.S.
Bancorp will distribute this or any amount of capital to its
shareholders in the form of dividends or share repurchases in the future.
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;
litigation; 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, market risk, operational risk,
compliance risk, strategic risk, interest rate risk, liquidity risk and
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, 2015, 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160629006398/en/
Source: U.S. Bancorp
U.S. Bank Investor Relations
Jen Thompson, 612-303-0778
Bank Corporate Communications
Dana Ripley, 612-303-3167