Record Earnings Per Diluted Common Share of
$0.84
Return on average assets of 1.36 percent and
average common equity of 13.5 percent
Returned 79 percent of third quarter
earnings to shareholders
U.S. Bancorp (NYSE: USB) today reported net income of $1,502
million for the third quarter of 2016, or $0.84 per diluted common
share, compared with $1,489 million, or $0.81 per diluted common
share, in the third quarter of 2015.
Highlights for the third quarter of 2016 included:
- Industry-leading return on average
assets of 1.36 percent, return on average common equity of 13.5
percent and efficiency ratio of 54.5 percent
- Returned 79 percent of third quarter
earnings to shareholders through dividends and share buybacks
- Average total loans grew 1.1 percent on
a linked quarter basis and 7.6 percent over the third quarter of
2015 (6.4 percent year-over-year, excluding the credit card
portfolio acquisition at the end of the fourth quarter of 2015 and
student loans, which were transferred from held for sale to held
for investment in the third quarter of 2015)
- Average total deposits grew 3.6 percent
on a linked quarter basis and 10.0 percent over the third quarter
of 2015
- Net interest income (taxable-equivalent
basis) grew 1.6 percent on a linked quarter basis and 4.3 percent
year-over-year
- Average earning assets grew 2.2 percent
on a linked quarter basis and 6.6 percent year-over-year
- Net interest margin of 2.98 percent for
the third quarter of 2016, impacted by higher average cash
balances, was down 4 basis points from 3.02 percent in the second
quarter of 2016, and down 6 basis points from 3.04 percent in the
third quarter of 2015
- Mortgage banking revenue increased 31.9
percent linked quarter and 40.2 percent year-over-year driven by
strong refinancing activities due to lower longer-term interest
rates during the third quarter of 2016
- Credit quality was relatively stable
- Nonperforming assets and net
charge-offs decreased slightly on a linked quarter basis
- Strong capital position. At September
30, 2016, the estimated common equity tier 1 capital to
risk-weighted assets ratio was 9.3 percent using the Basel III
fully implemented standardized approach and was 12.1 percent using
the Basel III fully implemented advanced approaches method
EARNINGS
SUMMARY
Table 1 ($ in millions, except
per-share data)
Percent Percent
Change Change 3Q
2Q 3Q 3Q16 vs 3Q16 vs YTD
YTD Percent 2016 2016
2015 2Q16
3Q15 2016 2015
Change Net income attributable to U.S.
Bancorp $1,502 $1,522 $1,489 (1.3 ) .9 $4,410 $4,403 .2 Diluted
earnings per common share $.84 $.83 $.81 1.2 3.7 $2.43 $2.36 3.0
Return on average assets (%) 1.36 1.43 1.44 1.37 1.45 Return
on average common equity (%) 13.5 13.8 14.1 13.4 14.1 Net interest
margin (%) 2.98 3.02 3.04 3.02 3.05 Efficiency ratio (%) (a) 54.5
54.9 53.9 54.7 53.8 Tangible efficiency ratio (%) (a) 53.7 54.1
53.1 53.8 53.0 Dividends declared per common share $.280
$.255 $.255 9.8 9.8 $.790 $.755 4.6 Book value per common share
(period end) $24.78 $24.37 $22.99 1.7 7.8
(a) Computed as noninterest expense
divided by the sum of net interest income on a taxable-equivalent
basis and noninterest income excluding net securities gains
(losses), and for tangible efficiency ratio, intangible
amortization.
Net income attributable to U.S. Bancorp was $1,502 million for
the third quarter of 2016, 0.9 percent higher than the $1,489
million for the third quarter of 2015, and 1.3 percent lower than
the $1,522 million for the second quarter of 2016. Diluted earnings
per common share were $0.84 in the third quarter of 2016, $0.03
higher than the third quarter of 2015 and $0.01 higher than the
second quarter of 2016. The increase in net income year-over-year
was principally due to total net revenue growth, including an
increase in net interest income of 4.3 percent on a
taxable-equivalent basis (4.5 percent as reported on a GAAP basis),
mainly a result of loan growth, and noninterest income growth of
5.1 percent, driven by higher mortgage banking revenue, trust and
investment management fees, and credit and debit card revenue. This
increase was partially offset by higher noninterest expense related
to increased compensation expense due to merit increases and higher
variable compensation expense along with hiring to support business
growth and compliance programs, increased technology and
communications expense reflecting capital investments, continued
brand marketing, and higher other noninterest expense, which
includes a special FDIC surcharge that began in the third quarter
of 2016. The decrease in net income on a linked quarter basis was
primarily driven by a 4.2 percent decrease in noninterest income
partially offset by a 2.0 percent decrease in noninterest expense,
both of which were impacted by notable items in the prior quarter
including a $180 million Visa gain in noninterest income and $150
million in noninterest expense related to litigation accruals and a
charitable contribution. Excluding the notable items from the
second quarter of 2016, the increase in net income on a linked
quarter basis was principally due to total net revenue growth of
2.3 percent reflecting an increase in net interest income of 1.6
percent on a taxable-equivalent basis (1.7 percent as reported on a
GAAP basis) and noninterest income of 3.1 percent driven by
mortgage banking and payment services revenue, partially offset by
higher noninterest expense of 3.1 percent related to increased
compensation expense, impacted by an additional business day in the
current quarter compared with the previous quarter and increased
staffing, and other noninterest expense reflecting seasonally
higher costs related to investments in tax-advantaged projects and
the FDIC surcharge.
U.S. Bancorp Chairman and Chief Executive Officer Richard K.
Davis said, “U.S. Bancorp reported solid, industry-leading
financial results in the third quarter. The banking industry
continues to face steady headwinds, including persistently low
interest rates, a flat yield curve, and a slow economic recovery
that caused some commercial customers to pause investments in their
businesses during the quarter. Despite the operating environment,
we announced record earnings per share and solid revenue growth,
particularly within our fee-based businesses. The continuing
momentum in consumer lending led to growth in net interest income
despite a decline in net interest margin. Fee-based revenues grew
year over year across most categories including payments, mortgage
banking and wealth management while capital markets continued to
have solid performance in the third quarter. We remain confident in
our ability to generate consistent, predictable and repeatable
industry-leading financial results because of our diversified
business model and the execution of our strategy.
“In this challenging operating environment, we remain focused on
doing the right thing for our customers, our communities and our
shareholders, and investing in our businesses in order to create
value over the long-term. For customers who are looking to
establish a relationship with a trusted financial institution, we
continue to enhance offerings and business processes to provide
convenient, accessible and affordable products and services to meet
their unique objectives. For our communities, we achieved
record-breaking results in our annual employee giving campaign.
Every year, our employees choose to invest their time, talents and
resources generously in the communities where we operate to make
them more vibrant and prosperous. I am extremely proud of our
67,000 employees who work hard every day to create value for our
customers, communities, and shareholders.
“And for our shareholders, our financial performance has enabled
us to return 79 percent of our third quarter earnings to
shareholders through dividends and share buybacks. We accomplished
all this while strengthening the U.S. Bank brand and positioning
the company for long-term growth.”
INCOME
STATEMENT HIGHLIGHTS
Table 2 ($ in millions,
except per-share data)
Percent Percent
Change Change
3Q 2Q 3Q 3Q16 vs 3Q16 vs
YTD YTD Percent 2016
2016 2015 2Q16
3Q15 2016
2015 Change Net interest income
$2,893 $2,845 $2,768 1.7 4.5 $8,573 $8,182 4.8 Taxable-equivalent
adjustment 50 51 53
(2.0 ) (5.7 ) 154 161 (4.3 ) Net
interest income (taxable-equivalent basis) 2,943 2,896 2,821 1.6
4.3 8,727 8,343 4.6 Noninterest income 2,445
2,552 2,326 (4.2 ) 5.1 7,146
6,752 5.8 Total net revenue 5,388 5,448 5,147
(1.1 ) 4.7 15,873 15,095 5.2 Noninterest expense 2,931
2,992 2,775 (2.0 ) 5.6
8,672 8,122 6.8 Income before provision
and income taxes 2,457 2,456 2,372 -- 3.6 7,201 6,973 3.3 Provision
for credit losses 325 327
282 (.6 ) 15.2 982 827 18.7
Income before taxes 2,132 2,129 2,090 .1 2.0 6,219 6,146 1.2
Income taxes and taxable-equivalent
adjustment
616 593 587 3.9
4.9 1,766 1,702 3.8 Net income 1,516
1,536 1,503 (1.3 ) .9 4,453 4,444 .2
Net (income) loss attributable to
noncontrolling interests
(14 ) (14 ) (14 ) -- -- (43 )
(41 ) (4.9 ) Net income attributable to U.S. Bancorp $1,502
$1,522 $1,489 (1.3
) .9 $4,410 $4,403 .2
Net income applicable to U.S. Bancorp
common shareholders
$1,434 $1,435 $1,422
(.1 ) .8 $4,198 $4,204 (.1 )
Diluted earnings per common share $.84 $.83
$.81 1.2 3.7 $2.43
$2.36 3.0
NET INTEREST INCOME
Table 3 (Taxable-equivalent basis; $ in millions)
Change
Change 3Q 2Q 3Q 3Q16 vs 3Q16
vs YTD YTD 2016 2016
2015 2Q16
3Q15 2016 2015
Change Components of net interest income
Income on earning assets $3,371 $3,305 $3,171 $66 $200 $9,951
$9,410 $541 Expense on interest-bearing liabilities 428 409
350 19 78 1,224 1,067 157
Net interest income $2,943 $2,896 $2,821
$47 $122 $8,727 $8,343 $384
Average yields and rates paid Earning assets yield
3.41 % 3.44 % 3.42 % (.03 )% (.01 )% 3.44 % 3.44 % .00 % Rate paid
on interest-bearing liabilities .59 .58 .52
.01 .07 .57 .53 .04 Gross
interest margin 2.82 % 2.86 % 2.90 % (.04 )% (.08 )% 2.87 % 2.91 %
(.04 )% Net interest margin 2.98 % 3.02 % 3.04 % (.04 )% (.06 )%
3.02 % 3.05 % (.03 )% Average balances Investment securities
(a) $108,109 $107,132 $103,943 $977 $4,166 $107,095 $102,361 $4,734
Loans 269,637 266,582 250,536 3,055 19,101 266,179 248,358 17,821
Earning assets 393,783 385,368 369,265 8,415 24,518 385,816 365,543
20,273 Interest-bearing liabilities 290,331 285,796 269,479 4,535
20,852 285,233 269,317 15,916 (a) Excludes unrealized gain
(loss)
Net Interest Income
Net interest income on a taxable-equivalent basis in the third
quarter of 2016 was $2,943 million, an increase of $122 million
(4.3 percent) over the third quarter of 2015. The increase was
driven by loan growth and higher interest rates, partially offset
by the loan portfolio mix and lower yields in the investment
portfolio. Average earning assets were $24.5 billion (6.6 percent)
higher than the third quarter of 2015, driven by increases of $19.1
billion (7.6 percent) in average total loans and $4.2 billion (4.0
percent) in average investment securities. Net interest income on a
taxable-equivalent basis increased $47 million (1.6 percent) linked
quarter, primarily due to growth in average total loans, partially
offset by lower reinvestment yields in the investment securities
portfolio and higher average cash balances in the third quarter of
2016. Average earning assets were $8.4 billion (2.2 percent) higher
on a linked quarter basis, reflecting growth in total loans of $3.1
billion (1.1 percent) and higher average cash balances.
The net interest margin in the third quarter of 2016 was 2.98
percent, compared with 3.04 percent in the third quarter of 2015,
and 3.02 percent in the second quarter of 2016. The decrease in the
net interest margin on a year-over-year basis was principally due
to increased funding costs and higher average cash balances, along
with securities purchases at lower average rates and lower
reinvestment rates on maturing securities, partially offset by
higher rates on new loans. On a linked quarter basis, the decrease
in net interest margin primarily reflected higher average cash
balances as well as lower average rates on new securities purchases
and lower reinvestment rates on maturing securities, partially
offset by the benefit of somewhat higher LIBOR rates for loans
during the quarter.
Investment Securities
Average investment securities in the third quarter of 2016 were
$4.2 billion (4.0 percent) higher year-over-year and $1.0 billion
(0.9 percent) higher than the prior quarter. These increases were
primarily due to purchases of U.S. Treasury and U.S. government
agency-backed securities, net of prepayments and maturities, to
support regulatory liquidity coverage ratio requirements.
AVERAGE
LOANS
Table 4 ($ in millions)
Percent
Percent
Change Change 3Q 2Q 3Q 3Q16
vs 3Q16 vs YTD YTD Percent
2016 2016 2015
2Q16 3Q15
2016 2015 Change
Commercial $87,067 $86,899 $79,486 .2 9.5 $86,186 $77,880
10.7 Lease financing 5,302 5,255 5,218
.9 1.6 5,265 5,287 (.4 ) Total commercial 92,369
92,154 84,704 .2 9.0 91,451 83,167 10.0 Commercial mortgages
31,888 31,950 32,083 (.2 ) (.6 ) 31,891 32,563 (2.1 ) Construction
and development 11,486 11,038 10,233
4.1 12.2 11,031 9,913 11.3 Total commercial real
estate 43,374 42,988 42,316 .9 2.5 42,922 42,476 1.1
Residential mortgages 56,284 55,501 51,831 1.4 8.6 55,334 51,458
7.5 Credit card 20,628 20,140 17,944 2.4 15.0 20,339 17,794
14.3 Retail leasing 5,773 5,326 5,480 8.4 5.3 5,427 5,663
(4.2 ) Home equity and second mortgages 16,470 16,394 16,083 .5 2.4
16,411 15,980 2.7 Other 30,608 29,748
27,286 2.9 12.2 29,971 26,768 12.0 Total other retail
52,851 51,468 48,849 2.7 8.2 51,809
48,411 7.0 Total loans, excluding covered
loans 265,506 262,251 245,644 1.2 8.1
261,855 243,306 7.6 Covered loans 4,131
4,331 4,892 (4.6 ) (15.6 ) 4,324
5,052 (14.4 ) Total loans $269,637 $266,582
$250,536 1.1 7.6 $266,179 $248,358 7.2
Loans
Average total loans were $19.1 billion (7.6 percent) higher in
the third quarter of 2016 than the third quarter of 2015 (6.4
percent excluding student loans and the credit card portfolio
acquisition). The increase was driven by growth in total commercial
loans (9.0 percent), residential mortgages (8.6 percent), total
other retail loans (8.2 percent, 5.2 percent excluding student
loans), and credit card loans (15.0 percent, 5.9 percent excluding
the credit card portfolio acquisition). These increases were
partially offset by a decline in the run-off covered loans
portfolio (15.6 percent). Average total loans were $3.1 billion
(1.1 percent) higher in the third quarter of 2016 than the second
quarter of 2016. The increase was driven by linked quarter growth
in credit card loans (2.4 percent), residential mortgages (1.4
percent), and total other retail loans (2.7 percent).
AVERAGE
DEPOSITS
Table 5 ($ in millions)
Percent
Percent
Change Change 3Q 2Q 3Q
3Q16 vs 3Q16 vs YTD YTD Percent
2016 2016 2015
2Q16 3Q15
2016 2015 Change
Noninterest-bearing deposits $82,021 $79,171 $80,940 3.6 1.3
$79,928 $77,623 3.0 Interest-bearing savings deposits Interest
checking 63,456 60,842 56,888 4.3 11.5 60,746 55,592 9.3 Money
market savings 99,921 92,904 80,338 7.6 24.4 93,121 78,065 19.3
Savings accounts 40,695 40,258 37,480
1.1 8.6 40,070 36,866 8.7 Total of savings deposits
204,072 194,004 174,706 5.2 16.8 193,937 170,523 13.7 Time deposits
32,455 34,211 34,046 (5.1 ) (4.7 )
33,447 36,527 (8.4 ) Total interest-bearing deposits
236,527 228,215 208,752 3.6 13.3
227,384 207,050 9.8 Total deposits $318,548
$307,386 $289,692 3.6 10.0 $307,312
$284,673 8.0
Deposits
Average total deposits for the third quarter of 2016 were $28.9
billion (10.0 percent) higher than the third quarter of 2015.
Average noninterest-bearing deposits increased $1.1 billion (1.3
percent) year-over-year, mainly in Consumer and Small Business
Banking, partially offset by a decline in deposits within Wealth
Management and Securities Services. Average total savings deposits
were $29.4 billion (16.8 percent) higher year-over-year, the result
of growth across all business lines. Average time deposits were
$1.6 billion (4.7 percent) lower than the prior year quarter.
Changes in time deposits are largely related to those deposits
managed as an alternative to other funding sources such as
wholesale borrowing, based largely on relative pricing and
liquidity characteristics.
Average total deposits increased $11.2 billion (3.6 percent)
over the second quarter of 2016. On a linked quarter basis, average
noninterest-bearing deposits increased $2.9 billion (3.6 percent)
and average total savings deposits increased $10.1 billion (5.2
percent) reflecting increases across all business lines. Average
time deposits, which are managed based on funding needs, relative
pricing, and liquidity characteristics, decreased $1.8 billion (5.1
percent) on a linked quarter basis.
NONINTEREST INCOME
Table
6 ($ in millions)
Percent Percent
Change Change
3Q 2Q 3Q 3Q16 vs 3Q16 vs
YTD YTD Percent 2016
2016 2015 2Q16
3Q15 2016
2015 Change Credit and debit
card revenue $299 $296 $269 1.0 11.2 $861 $776 11.0 Corporate
payment products revenue 190 181 190 5.0 -- 541 538 .6 Merchant
processing services 412 403 400 2.2 3.0 1,188 1,154 2.9 ATM
processing services 87 84 81 3.6 7.4 251 239 5.0 Trust and
investment management fees 362 358 329 1.1 10.0 1,059 985 7.5
Deposit service charges 192 179 185 7.3 3.8 539 520 3.7 Treasury
management fees 147 147 143 -- 2.8 436 422 3.3 Commercial products
revenue 219 238 231 (8.0 ) (5.2 ) 654 645 1.4 Mortgage banking
revenue 314 238 224 31.9 40.2 739 695 6.3 Investment products fees
41 39 46 5.1 (10.9 ) 120 141 (14.9 ) Securities gains (losses), net
10 3 (1 ) nm nm 16 (1 ) nm Other 172 386
229 (55.4 ) (24.9 ) 742 638 16.3
Total noninterest income $2,445 $2,552
$2,326 (4.2 ) 5.1 $7,146 $6,752
5.8
Noninterest Income
Third quarter noninterest income was $2,445 million, which was
$119 million (5.1 percent) higher than the third quarter of 2015,
reflecting increases in mortgage banking revenue, trust and
investment management fees, credit and debit card revenue, and
merchant processing services revenue, partially offset by declines
in commercial products revenue and other noninterest income.
Mortgage banking revenue increased $90 million (40.2 percent)
driven by higher origination and sales volume in part due to
refinancing activities in the marketplace. Trust and investment
management fees increased $33 million (10.0 percent) reflecting
lower money market fee waivers along with account growth, an
increase in assets under management and improved market conditions.
Credit and debit card revenue increased $30 million (11.2 percent)
reflecting higher transaction volumes including acquired
portfolios. Merchant processing services revenue increased $12
million (3.0 percent) as a result of an increase in product fees
and higher volumes. Adjusted for the approximate $9 million impact
of foreign currency rate changes, year-over-year merchant
processing services revenue increased approximately 5.3 percent.
Commercial products revenue decreased $12 million (5.2 percent),
primarily driven by a large syndication transaction in the prior
year.
Noninterest income was $107 million (4.2 percent) lower in the
third quarter of 2016 than the second quarter of 2016. Excluding
the impact of the second quarter 2016 notable item ($180 million of
equity investment income, primarily the result of our membership in
Visa Europe Limited which was sold to Visa, Inc. in the second
quarter), noninterest income increased 3.1 percent principally
driven by higher mortgage banking revenue, payment services revenue
and deposit service charges. Mortgage banking revenue increased $76
million (31.9 percent) reflecting higher origination and sales
volumes impacted by stronger refinancing activities along with a
favorable change in the valuation of mortgage servicing rights, net
of hedging activities. Deposit service charges increased $13
million (7.3 percent), corporate payment products revenue was
seasonally higher by $9 million (5.0 percent) and merchant
processing services revenue increased $9 million (2.2 percent) due
to seasonally higher transaction volumes. Adjusted for the
approximate $5 million impact of foreign currency rate changes,
linked quarter merchant processing services revenue increased
approximately 3.5 percent. Commercial products revenue decreased
$19 million (8.0 percent) primarily due to higher capital markets
volume in the prior quarter as a result of market volatility in the
second quarter of 2016. Excluding the second quarter notable item,
other noninterest income decreased $34 million (16.5 percent)
primarily due to lower retail leasing revenue reflecting lower
end-of-term gains on auto leases.
NONINTEREST
EXPENSE
Table 7 ($ in millions)
Percent
Percent
Change Change 3Q 2Q 3Q 3Q16
vs 3Q16 vs YTD YTD Percent
2016 2016 2015
2Q16 3Q15
2016 2015 Change
Compensation $1,329 $1,277 $1,225 4.1 8.5 $3,855 $3,600 7.1
Employee benefits 280 278 285 .7 (1.8 ) 858 895 (4.1 ) Net
occupancy and equipment 250 243 251 2.9 (.4 ) 741 745 (.5 )
Professional services 127 121 115 5.0 10.4 346 298 16.1 Marketing
and business development 102 149 99 (31.5 ) 3.0 328 265 23.8
Technology and communications 243 241 222 .8 9.5 717 657 9.1
Postage, printing and supplies 80 77 77 3.9 3.9 236 223 5.8 Other
intangibles 45 44 42 2.3 7.1 134 128 4.7 Other 475
562 459 (15.5 ) 3.5 1,457 1,311 11.1
Total noninterest expense $2,931 $2,992
$2,775 (2.0 ) 5.6 $8,672 $8,122 6.8
Noninterest Expense
Third quarter noninterest expense was $2,931 million, which was
$156 million (5.6 percent) higher than the third quarter of 2015,
primarily related to higher compensation expense, technology and
communications expense and other noninterest expense. Compensation
expense increased $104 million (8.5 percent) principally due to the
impact of hiring decisions to support business growth and
compliance programs, merit increases, and higher variable
compensation. Professional services increased $12 million (10.4
percent) from a year ago primarily due to compliance programs.
Technology and communications expense increased $21 million (9.5
percent) including the impact of capital investments and costs
related to acquired card portfolios. Other noninterest expense
increased $16 million (3.5 percent), reflecting the impact of the
FDIC surcharge, which began in the third quarter 2016.
Noninterest expense decreased $61 million (2.0 percent) on a
linked quarter basis. Excluding the second quarter 2016 notable
items, noninterest expense increased $89 million (3.1 percent),
driven by higher compensation and other noninterest expense. Second
quarter 2016 notable items included $110 million in accruals
related to legal and regulatory matters along with a $40 million
charitable contribution. Compensation expense increased $52 million
(4.1 percent) due to an additional business day in the current
quarter compared with the previous quarter and increased staffing.
Excluding the second quarter notable items, other noninterest
expense increased $23 million (5.1 percent) due to seasonally
higher costs related to investments in tax-advantaged projects and
the impact of the FDIC surcharge, which began in the current
quarter, while marketing and business development decreased $7
million (6.4 percent) due to the timing of various marketing
programs.
Provision for Income Taxes
The provision for income taxes for the third quarter of 2016
resulted in a tax rate on a taxable-equivalent basis of 28.9
percent (effective tax rate of 27.2 percent), compared with 28.1
percent (effective tax rate of 26.2 percent) in the third quarter
of 2015, and 27.9 percent (effective tax rate of 26.1 percent) in
the second quarter of 2016, reflecting the favorable settlement of
certain tax examination matters in the prior quarters.
ALLOWANCE FOR CREDIT LOSSES
Table 8
($ in millions)
3Q
2Q 1Q
4Q
3Q 2016 % (b)
2016 % (b)
2016 % (b) 2015
% (b) 2015
% (b) Balance, beginning of period $4,329 $4,320
$4,306 $4,306 $4,326 Net charge-offs Commercial 84 .38 74
.34 78 .37 58 .28 68 .34 Lease financing 3 .23 5 .38
5 .38 5 .38 3 .23 Total commercial 87 .37 79
.34 83 .37 63 .29 71 .33 Commercial mortgages 5 .06 (4 ) (.05 ) (2
) (.03 ) 2 .02 -- -- Construction and development (4 ) (.14 ) 4
.15 (3 ) (.11 ) (2 ) (.08 ) (11 ) (.43 ) Total commercial
real estate 1 .01 -- -- (5 ) (.05 ) -- -- (11 ) (.10 ) Residential
mortgages 12 .08 17 .12 19 .14 16 .12 25 .19 Credit card 161 3.11
170 3.39 164 3.26 166 3.50 153 3.38 Retail leasing 1 .07 2 .15 1
.08 1 .08 2 .14 Home equity and second mortgages 1 .02 (1 ) (.02 )
2 .05 6 .15 7 .17 Other 52 .68 50 .68 51 .69
53 .71 45 .65 Total other retail 54 .41 51
.40 54 .43 60 .47 54 .44
Total net charge-offs, excluding covered
loans
315 .47 317 .49 315 .49 305 .48 292 .47 Covered loans -- --
-- -- -- -- -- -- -- -- Total net
charge-offs 315 .46 317 .48 315 .48 305 .47 292 .46 Provision for
credit losses 325 327 330 305 282 Other changes (a) (1 ) (1 ) (1 )
-- (10 ) Balance, end of period $4,338 $4,329
$4,320 $4,306 $4,306 Components
Allowance for loan losses $3,797 $3,806 $3,853 $3,863 $3,965
Liability for unfunded credit
commitments
541 523 467 443 341 Total
allowance for credit losses $4,338 $4,329 $4,320
$4,306 $4,306 Gross charge-offs $398 $407 $405
$381 $372 Gross recoveries $83 $90 $90 $76 $80 Allowance for
credit losses as a percentage of
Period-end loans, excluding covered
loans
1.61 1.62 1.65 1.67 1.71
Nonperforming loans, excluding covered
loans
309 311 302 360 347
Nonperforming assets, excluding covered
assets
264 263 255 288 280 Period-end loans 1.60 1.61 1.63 1.65 1.69
Nonperforming loans 310 312 303 361 347 Nonperforming assets 261
259 251 283 275
(a) Includes net changes in credit losses
to be reimbursed by the FDIC and reductions in the allowance for
covered loans where the reversal of a previously recorded allowance
was offset by an associated decrease in the indemnification asset,
and the impact of any loan sales.
(b) Annualized and calculated on average
loan balances
Credit Quality
The Company’s provision for credit losses for the third quarter
of 2016 was $325 million, which was relatively flat to the prior
quarter and $43 million (15.2 percent) higher than the third
quarter of 2015. Credit quality was relatively stable compared with
the second quarter of 2016.
The provision for credit losses was $10 million higher than net
charge-offs in the third quarter of 2016 and in the second quarter
of 2016 and $10 million lower than net charge-offs in the third
quarter of 2015. The reserve build for the third quarter of 2016
was driven by portfolio growth, partially offset by residential
mortgage credit quality improvement. Total net charge-offs in the
third quarter of 2016 were $315 million, compared with $317 million
in the second quarter of 2016, and $292 million in the third
quarter of 2015. Net charge-offs were relatively flat to the second
quarter of 2016 mainly due to a modest increase in commercial loan
net charge-offs, offset by seasonal declines in credit card net
charge-offs. Net charge-offs increased $23 million (7.9 percent)
compared with the third quarter of 2015 primarily due to higher
commercial loan net charge-offs, partially offset by lower
charge-offs related to residential mortgages. The net charge-off
ratio was 0.46 percent in the third quarter of 2016, compared with
0.48 percent in the second quarter of 2016 and 0.46 percent in the
third quarter of 2015.
The allowance for credit losses was $4,338 million at September
30, 2016, compared with $4,329 million at June 30, 2016, and $4,306
million at September 30, 2015. The ratio of the allowance for
credit losses to period-end loans was 1.60 percent at September 30,
2016, compared with 1.61 percent at June 30, 2016, and 1.69 percent
at September 30, 2015. The ratio of the allowance for credit losses
to nonperforming loans was 310 percent at September 30, 2016,
compared with 312 percent at June 30, 2016, and 347 percent at
September 30, 2015.
Nonperforming assets were $1,664 million at September 30, 2016,
compared with $1,672 million at June 30, 2016, and $1,567 million
at September 30, 2015. The ratio of nonperforming assets to loans
and other real estate was 0.61 percent at September 30, 2016,
compared with 0.62 percent at June 30, 2016, and 0.61 percent at
September 30, 2015. The $97 million (6.2 percent) increase in
nonperforming assets on a year-over-year basis was driven by
commercial loans within the energy portfolio, partially offset by
improvements in the Company’s residential and commercial real
estate portfolios. The decrease in nonperforming assets on a linked
quarter basis of $8 million was driven by improvements in
residential mortgages and other real estate. Accruing loans 90 days
or more past due were $748 million ($518 million excluding covered
loans) at September 30, 2016, compared with $724 million ($478
million excluding covered loans) at June 30, 2016, and $825 million
($510 million excluding covered loans) at September 30, 2015.
Commercial loans to customers in the energy sector were
approximately $2.7 billion ($11.1 billion of commitments) at
September 30, 2016, compared with $3.0 billion ($11.3 billion of
commitments) at June 30, 2016. During the third quarter 2016,
criticized commitments within the energy portfolio decreased by
$427 million while nonperforming loans in the energy portfolio
increased $37 million, primarily due to a single account. Energy
portfolio loans represented 1.0 percent of the Company’s total
loans outstanding at September 30, 2016, compared with 1.1 percent
at June 30, 2016. At September 30, 2016, the Company had credit
reserves of 8.9 percent of total outstanding energy loan balances,
compared with 8.8 percent of total outstanding energy loan balances
at June 30, 2016.
DELINQUENT LOAN
RATIOS AS A PERCENT OF ENDING LOAN BALANCES
Table 9 (Percent)
Sep 30 Jun 30 Mar
31 Dec 31 Sep 30 2016
2016 2016 2015
2015 Delinquent loan ratios - 90 days
or more past due
excluding nonperforming loans Commercial
.05 .05 .05 .05 .05 Commercial real estate .02 .03 .04 .03 .05
Residential mortgages .28 .27 .31 .33 .33 Credit card 1.11 .98 1.10
1.09 1.10 Other retail .14 .13 .15 .15 .14 Total loans, excluding
covered loans .19 .18 .20 .21 .20 Covered loans 5.72 5.81 6.23 6.31
6.57 Total loans .28 .27 .30 .32 .32 Delinquent loan ratios
- 90 days or more past due
including nonperforming loans
Commercial .61 .58 .57 .25 .25 Commercial real estate .26 .27 .28
.33 .39 Residential mortgages 1.37 1.39 1.54 1.66 1.73 Credit card
1.13 1.00 1.14 1.13 1.16 Other retail .42 .43 .45 .46 .47 Total
loans, excluding covered loans .72 .70 .75 .67 .70 Covered loans
5.89 5.98 6.39 6.48 6.80 Total loans .79 .79 .84 .78 .81
ASSET QUALITY
Table 10 ($ in millions)
Sep 30 Jun
30 Mar 31 Dec 31 Sep 30 2016
2016 2016
2015 2015 Nonperforming loans
Commercial $477 $450 $457 $160 $157 Lease financing 40
39 16 14 12 Total
commercial 517 489 473 174 169 Commercial mortgages 98 91 94 92 105
Construction and development 7 12 10
35 39 Total commercial real estate 105
103 104 127 144 Residential mortgages 614 628 677 712 735 Credit
card 4 5 7 9 12 Other retail 153 157
157 162 171 Total nonperforming loans,
excluding covered loans 1,393 1,382 1,418 1,184 1,231 Covered loans
7 7 7 8 11
Total nonperforming loans 1,400 1,389 1,425 1,192 1,242 Other real
estate (a) 213 229 242 280 276 Covered other real estate (a) 28 34
33 32 31 Other nonperforming assets 23 20
19 19 18 Total nonperforming
assets (b) $1,664 $1,672 $1,719
$1,523 $1,567 Total nonperforming assets,
excluding covered assets $1,629 $1,631
$1,679 $1,483 $1,525
Accruing loans 90 days or more past due,
excluding covered loans
$518 $478 $528 $541
$510 Accruing loans 90 days or more past due
$748 $724 $804 $831
$825
Performing restructured loans, excluding
GNMA and covered loans
$2,672 $2,676 $2,735
$2,766 $2,746 Performing restructured GNMA and
covered loans $1,375 $1,602 $1,851
$1,944 $2,031
Nonperforming assets to loans plus ORE,
excluding covered assets (%)
.61 .62 .64 .58 .61 Nonperforming assets to loans plus ORE
(%) .61 .62 .65 .58 .61 (a) Includes equity investments in
entities whose principal assets are other real estate owned. (b)
Does not include accruing loans 90 days or more past due.
COMMON
SHARES
Table 11 (Millions)
3Q 2Q 1Q
4Q 3Q 2016
2016 2016 2015
2015 Beginning shares outstanding 1,719
1,732 1,745 1,754 1,767
Shares issued for stock incentive plans,
acquisitions and other corporate purposes
2 2 3 1 3 Shares repurchased (16 ) (15 )
(16 ) (10 ) (16 ) Ending shares
outstanding 1,705 1,719
1,732 1,745 1,754
CAPITAL
POSITION
Table 12
($ in millions)
Sep 30
Jun 30 Mar 31 Dec
31 Sep 30 2016
2016 2016
2015 2015 Total U.S.
Bancorp shareholders' equity $47,759 $47,390 $46,755 $46,131
$45,075
Standardized Approach Basel III
transitional standardized approach Common equity tier 1 capital
$33,827 $33,444 $32,827 $32,612 $32,124 Tier 1 capital 39,531
39,148 38,532 38,431 37,197 Total risk-based capital 47,452 47,049
45,412 45,313 44,015 Common equity tier 1 capital ratio 9.5
% 9.5 % 9.5 % 9.6 % 9.6 % Tier 1 capital ratio 11.1 11.1 11.1 11.3
11.1 Total risk-based capital ratio 13.3 13.4 13.1 13.3 13.1
Leverage ratio 9.2 9.3 9.3 9.5 9.3
Common equity tier 1 capital to
risk-weighted assets estimated for the Basel III fully implemented
standardized approach
9.3 9.3 9.2 9.1 9.2
Advanced Approaches
Common equity tier 1 capital to
risk-weighted assets for the Basel III transitional advanced
approaches
12.4 12.3 12.3 12.5 13.0
Common equity tier 1 capital to
risk-weighted assets estimated for the Basel III fully implemented
advanced approaches
12.1 12.0 11.9 11.9 12.4
Tangible common equity to
tangible assets 7.5 7.6 7.7 7.6 7.7
Tangible common equity
to risk-weighted assets 9.3 9.3 9.3 9.2 9.3 Beginning
January 1, 2014, the regulatory capital requirements effective for
the Company follow Basel III, subject to certain transition
provisions from Basel I over the following four years to full
implementation by January 1, 2018. Basel III includes two
comprehensive methodologies for calculating risk-weighted assets: a
general standardized approach and more risk-sensitive advanced
approaches, with the Company's capital adequacy being evaluated
against the methodology that is most restrictive.
Capital Management
Total U.S. Bancorp shareholders’ equity was $47.8 billion at
September 30, 2016, compared with $47.4 billion at June 30, 2016,
and $45.1 billion at September 30, 2015. During the third quarter,
the Company returned 79 percent of earnings to shareholders through
dividends and share buybacks.
All regulatory ratios continue to be in excess of
“well-capitalized” requirements. The estimated common equity tier 1
capital to risk-weighted assets ratio using the Basel III fully
implemented standardized approach was 9.3 percent at September 30,
2016, compared with 9.3 percent at June 30, 2016, and 9.2 percent
at September 30, 2015. The estimated common equity tier 1 capital
to risk-weighted assets ratio using the Basel III fully implemented
advanced approaches method was 12.1 percent at September 30, 2016,
compared with 12.0 percent at June 30, 2016, and 12.4 percent at
September 30, 2015.
On Wednesday, October 19, 2016, at 8:00 a.m. CDT, Richard K.
Davis, chairman and chief executive officer, and Terry Dolan, vice
chairman and chief financial officer, will host a conference call
to review the financial results. The conference call will be
available online or by telephone. To access the webcast and
presentation, go to www.usbank.com and click on
“About U.S. Bank.” The “Webcasts & Presentations” link
can be found under the Investor/Shareholder information heading,
which is at the left side near the bottom of the page. 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 65198440. For those
unable to participate during the live call, a recording will be
available at approximately 11:00 a.m. CDT on Wednesday, October 19
and be accessible through Wednesday, October 26 at 11:00 p.m. CDT.
To access the recorded message within the United States and Canada,
dial 855-859-2056. If calling from outside the United States and
Canada, please dial 404-537-3406 to access the recording. The
conference ID is 65198440.
Minneapolis-based U.S. Bancorp (NYSE: USB), with $454 billion in
assets as of September 30, 2016, is the parent company of U.S. Bank
National Association, the fifth largest commercial bank in the
United States. The Company operates 3,114 banking offices in 25
states and 4,875 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. 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 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 (which
could result, in part, from the United Kingdom's withdrawal from
the European Union); 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 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, 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.
Non-GAAP Financial Measures
In addition to capital ratios defined by banking regulators, the
Company considers various other measures when evaluating capital
utilization and adequacy, including:
- Tangible common equity to tangible
assets,
- Tangible common equity to risk-weighted
assets,
- Common equity tier 1 capital to
risk-weighted assets estimated for the Basel III fully implemented
standardized approach, and
- Common equity tier 1 capital to
risk-weighted assets estimated for the Basel III fully implemented
advanced approaches.
These capital measures are viewed by management as useful
additional methods of reflecting the level of capital available to
withstand unexpected market or economic conditions. Additionally,
presentation of these measures allows investors, analysts and
banking regulators to assess the Company’s capital position
relative to other financial services companies. These measures
differ from currently effective capital ratios defined by banking
regulations principally in that the numerator includes unrealized
gains and losses related to available-for-sale securities and
excludes preferred securities, including preferred stock, the
nature and extent of which varies among different financial
services companies. These capital measures are not defined in
generally accepted accounting principles (“GAAP”), or are not
currently effective or defined in federal banking regulations. As a
result, these capital measures disclosed by the Company may be
considered non-GAAP financial measures.
The Company also discloses net interest income and related
ratios and analysis on a taxable-equivalent basis, which may also
be considered non-GAAP financial measures. The Company believes
this presentation to be the preferred industry measurement of net
interest income as it provides a relevant comparison of net
interest income arising from taxable and tax-exempt sources. In
addition, certain performance measures, including the efficiency
ratio and net interest margin utilize net interest income on a
taxable-equivalent basis.
There may be limits in the usefulness of these measures to
investors. As a result, the Company encourages readers to consider
the consolidated financial statements and other financial
information contained in this press release in their entirety, and
not to rely on any single financial measure. A table follows that
shows the Company’s calculation of these non-GAAP financial
measures.
U.S.
Bancorp
Consolidated Statement of Income Three Months Ended
Nine Months Ended (Dollars and Shares in Millions, Except Per Share
Data) September 30, September 30, (Unaudited)
2016 2015 2016
2015
Interest Income Loans $2,731 $2,520
$8,039 $7,476 Loans held for sale 43 60 110 166 Investment
securities 515 502 1,555 1,502 Other interest income 31
35 89
102 Total interest income 3,320 3,117 9,793 9,246
Interest Expense Deposits 161 113 452 344 Short-term
borrowings 70 66 201 189 Long-term debt 196
170 567 531
Total interest expense 427 349
1,220 1,064 Net interest
income 2,893 2,768 8,573 8,182 Provision for credit losses 325
282 982
827 Net interest income after provision for
credit losses 2,568 2,486 7,591 7,355
Noninterest Income
Credit and debit card revenue 299 269 861 776 Corporate payment
products revenue 190 190 541 538 Merchant processing services 412
400 1,188 1,154 ATM processing services 87 81 251 239 Trust and
investment management fees 362 329 1,059 985 Deposit service
charges 192 185 539 520 Treasury management fees 147 143 436 422
Commercial products revenue 219 231 654 645 Mortgage banking
revenue 314 224 739 695 Investment products fees 41 46 120 141
Securities gains (losses), net 10 (1 ) 16 (1 ) Other 172
229 742
638 Total noninterest income 2,445 2,326 7,146 6,752
Noninterest Expense Compensation 1,329 1,225 3,855 3,600
Employee benefits 280 285 858 895 Net occupancy and equipment 250
251 741 745 Professional services 127 115 346 298 Marketing and
business development 102 99 328 265 Technology and communications
243 222 717 657 Postage, printing and supplies 80 77 236 223 Other
intangibles 45 42 134 128 Other 475 459
1,457 1,311 Total
noninterest expense 2,931 2,775
8,672 8,122 Income before
income taxes 2,082 2,037 6,065 5,985 Applicable income taxes 566
534 1,612
1,541 Net income 1,516 1,503 4,453 4,444 Net
(income) loss attributable to noncontrolling interests (14 )
(14 ) (43 ) (41 ) Net
income attributable to U.S. Bancorp $1,502
$1,489 $4,410
$4,403 Net income applicable to U.S. Bancorp common
shareholders $1,434 $1,422
$4,198 $4,204
Earnings per common share $.84 $.81 $2.44 $2.38 Diluted earnings
per common share $.84 $.81 $2.43 $2.36 Dividends declared per
common share $.280 $.255 $.790 $.755 Average common shares
outstanding 1,710 1,758 1,724 1,770 Average diluted common shares
outstanding 1,716 1,766
1,730 1,778
U.S. Bancorp
Consolidated Ending Balance Sheet September 30,
December 31, September 30, (Dollars in Millions) 2016
2015 2015
Assets (Unaudited)
(Unaudited) Cash and due from banks $23,664 $11,147 $10,450
Investment securities Held-to-maturity 42,873 43,590 44,690
Available-for-sale 67,155 61,997 60,396 Loans held for sale 5,575
3,184 4,472 Loans Commercial 93,201 88,402 85,539 Commercial real
estate 43,468 42,137 42,478 Residential mortgages 56,229 53,496
52,349 Credit card 20,706 21,012 18,583 Other retail 53,664
51,206 51,051 Total
loans, excluding covered loans 267,268 256,253 250,000 Covered
loans 4,021 4,596 4,791
Total loans 271,289 260,849 254,791 Less allowance for loan
losses (3,797 ) (3,863 ) (3,965 ) Net
loans 267,492 256,986 250,826 Premises and equipment 2,449 2,513
2,515 Goodwill 9,357 9,361 9,368 Other intangible assets 2,887
3,350 3,176 Other assets 32,682 29,725
30,050 Total assets $454,134
$421,853 $415,943
Liabilities and Shareholders' Equity Deposits
Noninterest-bearing $89,101 $83,766 $83,549 Interest-bearing
245,494 216,634 211,715
Total deposits 334,595 300,400 295,264 Short-term borrowings
15,695 27,877 26,915 Long-term debt 37,978 32,078 32,504 Other
liabilities 17,467 14,681
15,493 Total liabilities 405,735 375,036 370,176
Shareholders' equity Preferred stock 5,501 5,501 4,756 Common stock
21 21 21 Capital surplus 8,429 8,376 8,362 Retained earnings 49,231
46,377 45,413 Less treasury stock (14,844 ) (13,125 ) (12,756 )
Accumulated other comprehensive income (loss) (579 )
(1,019 ) (721 ) Total U.S. Bancorp shareholders'
equity 47,759 46,131 45,075 Noncontrolling interests 640
686 692 Total equity
48,399 46,817 45,767
Total liabilities and equity $454,134
$421,853 $415,943
U.S. Bancorp
Non-GAAP Financial Measures
September 30, June 30, March 31, December 31, September 30,
(Dollars in Millions, Unaudited)
2016 2016
2016 2015 2015
Total equity $48,399 $48,029 $47,393 $46,817 $45,767 Preferred
stock (5,501 ) (5,501 ) (5,501 ) (5,501 ) (4,756 ) Noncontrolling
interests (640 ) (639 ) (638 ) (686 ) (692 ) Goodwill (net of
deferred tax liability) (1) (8,239 ) (8,246 ) (8,270 ) (8,295 )
(8,324 ) Intangible assets, other than mortgage servicing rights
(756 ) (796 ) (820 )
(838 ) (779 )
Tangible common equity (a) 33,263 32,847 32,164 31,497 31,216
Tangible common equity (as calculated above) 33,263 32,847
32,164 31,497 31,216 Adjustments (2) 97
133 99 67
118
Common equity tier 1 capital estimated for
the Basel III fully implemented standardized and advanced
approaches (b)
33,360 32,980 32,263 31,564 31,334 Total assets 454,134
438,463 428,638 421,853 415,943 Goodwill (net of deferred tax
liability) (1) (8,239 ) (8,246 ) (8,270 ) (8,295 ) (8,324 )
Intangible assets, other than mortgage servicing rights (756 )
(796 ) (820 )
(838 ) (779 ) Tangible
assets (c) 445,139 429,421 419,548 412,720 406,840
Risk-weighted assets, determined in
accordance with prescribed transitional standardized approach
regulatory requirements (d)
356,733 * 351,462 346,227 341,360 336,227 Adjustments (3) 3,165
* 3,079 3,485
3,892 3,532
Risk-weighted assets estimated for the
Basel III fully implemented standardized approach (e)
359,898 * 354,541 349,712 345,252 339,759
Risk-weighted assets, determined in
accordance with prescribed transitional advanced approaches
regulatory requirements
272,832 * 271,495 267,309 261,668 248,048 Adjustments (4) 3,372
* 3,283 3,707
4,099 3,723
Risk-weighted assets estimated for the
Basel III fully implemented advanced approaches (f)
276,204 * 274,778 271,016 265,767 251,771
Ratios *
Tangible common equity to tangible assets (a)/(c) 7.5 % 7.6 % 7.7 %
7.6 % 7.7 % Tangible common equity to risk-weighted assets (a)/(d)
9.3 9.3 9.3 9.2 9.3
Common equity tier 1 capital to
risk-weighted assets estimated for the Basel III fully implemented
standardized approach (b)/(e)
9.3 9.3 9.2 9.1 9.2
Common equity tier 1 capital to
risk-weighted assets estimated for the Basel III fully implemented
advanced approaches (b)/(f)
12.1 12.0 11.9 11.9 12.4 Three Months Ended
Nine Months Ended
September 30, June 30, September 30, September 30, September 30,
2016 2016 2015
2016 2015 Net interest income $2,893 $2,845
$2,768 $8,573 $8,182 Taxable-equivalent adjustment (5) 50
51 53 154
161 Net interest income, on a taxable-equivalent basis
$2,943 $2,896
$2,821 $8,727 $8,343 *
Preliminary data. Subject to change prior to filings with
applicable regulatory agencies. (1) Includes goodwill related to
certain investments in unconsolidated financial institutions per
prescribed regulatory requirements. (2) Includes net losses on cash
flow hedges included in accumulated other comprehensive income
(loss) and other adjustments. (3) Includes higher risk-weighting
for unfunded loan commitments, investment securities, residential
mortgages, mortgage servicing rights and other adjustments. (4)
Primarily reflects higher risk-weighting for mortgage servicing
rights. (5) Utilizes a tax rate of 35 percent for those assets and
liabilities whose income or expense is not included for federal
income tax purposes.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161019005086/en/
U.S. BancorpMedia:Dana Ripley,
612-303-3167orInvestors/Analysts:Jennifer Thompson,
612-303-0778
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