U.S. Bancorp announces $3 billion common stock repurchase program
December 22 2020 - 11:42AM
Business Wire
U.S. Bancorp (NYSE: USB) announced that it has received its
results of the December 2020 Stress Test from the Federal Reserve.
Based on the results, the company’s common equity tier 1 (CET1)
capital requirement remains at 7.0 percent which includes the
Stress Capital Buffer requirement of 2.5 percent. Under the
Supervisory Severely Adverse and Supervisory Alternative Severe
scenarios the company’s minimum CET1 ratio was 7.6 and 7.8 percent,
respectively, above the regulatory requirement.
The Federal Reserve extended, with modifications, the capital
restrictions through the first quarter of 2021 due to “ongoing
economic uncertainty and to preserve the strength of the banking
sector.” These restrictions include capping common stock dividends
at existing rates and limiting the aggregate amount of common stock
dividends and share repurchases to an amount that does not exceed
the average net income of the four preceding calendar quarters.
The U.S. Bancorp board of directors currently intends to
maintain the quarterly common stock dividend of $0.42 per common
share. The company’s quarterly common stock dividends are subject
to approval of the board of directors.
The U.S. Bancorp board of directors has approved an
authorization to repurchase up to $3 billion of the company’s
outstanding common stock beginning January 1, 2021 and the company
intends to begin repurchasing shares in the first quarter of 2021.
The stock may be repurchased in the open market or in privately
negotiated transactions. U.S. Bancorp will utilize the share
repurchase program at its discretion as it continues to monitor the
economic environment, manage to its long-term earnings distribution
targets while maintaining strong capital levels and remain in
compliance with regulatory requirements. The company will adjust
its capital distributions as conditions warrant. Additional capital
distributions, including share repurchases, are subject to the
approval of the company’s board of directors.
“The results of this stress test reflect again, the strength of
our balance sheet, our diverse businesses and our strong financial
discipline,” said Andy Cecere, chairman, president and CEO of U.S.
Bancorp. “Our capital position remained strong through these
challenging times and we believe the reinstatement of the share
repurchase program will allow us to continue to deliver on our
commitment of creating long-term value for our shareholders,
customers and employees through continued investment in our
business, support to our customers and prudent deployment of
capital to our shareholders.”
About U.S. Bancorp
U.S. Bancorp, with more than 70,000 employees and $540 billion
in assets as of September 30, 2020, is the parent company of U.S.
Bank National Association, the fifth-largest commercial bank in the
United States. The Minneapolis-based bank blends its relationship
teams, branches and ATM network with mobile and online tools that
allow customers to bank how, when and where they prefer. U.S. Bank
is committed to serving its millions of retail, business, wealth
management, payment, commercial and corporate, and investment
services customers across the country and around the world as a
trusted financial partner, a commitment recognized by the
Ethisphere Institute naming the bank one of the 2020 World’s Most
Ethical Companies. Visit U.S. Bank at www.usbank.com or follow on
social media to stay up to date with company news.
Forward-looking statements
“Safe Harbor” Statement under the Private Securities Litigation
Reform Act of 1995:
This news 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 return this or any
amount of capital to its shareholders in the form of dividends or
share repurchases in the future.
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. The
COVID-19 pandemic is adversely affecting U.S. Bancorp, its
customers, counterparties, employees, and third-party service
providers, and the ultimate extent of the impacts on its business,
financial position, results of operations, liquidity, and prospects
is uncertain. Continued deterioration in general business and
economic conditions or turbulence in domestic or global financial
markets could adversely affect U.S. Bancorp’s revenues and the
values of its assets and liabilities, reduce the availability of
funding to certain financial institutions, lead to a tightening of
credit, and increase stock price volatility. In addition, changes
to statutes, regulations, or regulatory policies or practices could
affect U.S. Bancorp in substantial and unpredictable ways. U.S.
Bancorp’s results could also be adversely affected by changes in
interest rates; further increases in unemployment 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 its investment securities; legal and regulatory
developments; litigation; increased competition from both banks and
non-banks; changes in the level of tariffs and other trade policies
of the United States and its global trading partners; civil unrest;
changes in customer behavior and preferences; breaches in data
security; failures to safeguard personal information; 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 reputation 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, 2019, on file
with the Securities and Exchange Commission, including the sections
entitled “Corporate Risk Profile” and “Risk Factors” 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, including the section entitled
“Risk Factors” in the Quarterly Reports on Form 10-Q for the
quarters ended June 30, 2020 and September 30, 2020. In addition,
factors other than these risks also could adversely affect U.S.
Bancorp’s results, and the reader should not consider these risks
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: https://www.businesswire.com/news/home/20201222005544/en/
Investor contact: Jennifer Thompson, U.S. Bancorp Investor
Relations jen.thompson@usbank.com, 612.303.0778, @usbank_news
Media contact: Jeff Shelman, U.S. Bancorp Public Affairs and
Communications jeffrey.shelman@usbank.com, 612.422.1423,
@usbank_news
US Bancorp (NYSE:USB)
Historical Stock Chart
From Jun 2024 to Jul 2024
US Bancorp (NYSE:USB)
Historical Stock Chart
From Jul 2023 to Jul 2024