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U.S. Bancorp Reports Fourth Quarter And Full Year 2012 Earnings

“Our capital position remains strong with a Tier 1 common ratio of 9.0 percent and a Tier 1 capital ratio of 10.8 percent at December 31st. Our Tier 1 common equity ratio, based on our assessment of the proposed rules for the Basel III standardized approach, was 8.1 percent at December 31st, above our targeted ratio of 8.0 percent. We continue to generate significant capital each quarter, and we have set a target to return 60 to 80 percent of our earnings to shareholders in the form of dividends and share buybacks. In 2012, we achieved our target by returning a total of $3.4 billion of earnings to our shareholders through dividends and the repurchase of approximately 59 million shares of common stock. In early January, we completed and submitted our 2013 Comprehensive Capital Plan to the Federal Reserve, and we look forward to receiving regulatory authority by March 31st to raise our dividend and continue our stock buyback program in 2013.

“I am very proud of our current quarter and full year 2012 results, and I want to take this opportunity to thank all of our employees for their contributions, hard work and dedication to serving our customers. These results and our success as a Company are directly tied to the talent, passion and commitment our employees bring to their job everyday, as they work closely with their fellow employees and customers, support their families and enrich the communities in which they live through their volunteer activities.

“On July 13, 2013, U.S. Bank will celebrate its 150th anniversary. Our institution operates under the national charter, signed in 1863, that originally formed the First National Bank of Cincinnati. Since then, our Company has expanded through organic growth and through numerous acquisitions. We have managed through times of prosperity and through times of hardship. We have focused our efforts externally on growth and development and, when necessary, we have focused internally to right the course. Our past has shaped our present and our future. We are a Company with a well diversified business model, prudent risk management and an ability to produce consistent, predictable, repeatable results. We are always mindful of the responsibility we hold to help our customers achieve their financial goals, while supporting and strengthening the communities, and this country, that we serve. We are, once again, stronger and better than we were one year ago. We are focused on the future and continuing to build momentum into 2013 and beyond – all for the benefit of our customers, employees, communities and, importantly, our shareholders.”

                                   
INCOME STATEMENT HIGHLIGHTS                                 Table 2
(Taxable-equivalent basis, $ in millions,       Percent   Percent      
except per-share data)   Change Change
4Q 3Q 4Q 4Q12 vs 4Q12 vs Full Year Full Year Percent
2012   2012   2011   3Q12   4Q11   2012   2011   Change
 
Net interest income $2,783 $2,783 $2,673 -- 4.1 $10,969 $10,348 6.0
Noninterest income 2,329   2,396   2,431 (2.8 ) (4.2 ) 9,319   8,760 6.4
Total net revenue 5,112 5,179 5,104 (1.3 ) .2 20,288 19,108 6.2
Noninterest expense 2,686   2,609   2,696 3.0 (.4 ) 10,456   9,911 5.5
Income before provision and taxes 2,426 2,570 2,408 (5.6 ) .7 9,832 9,197 6.9
Provision for credit losses 443   488   497 (9.2 ) (10.9 ) 1,882   2,343 (19.7 )
Income before taxes 1,983 2,082 1,911 (4.8 ) 3.8 7,950 6,854 16.0
Taxable-equivalent adjustment 56 57 56 (1.8 ) -- 224 225 (.4 )
Applicable income taxes 552   593   527 (6.9 ) 4.7 2,236   1,841 21.5
Net income 1,375 1,432 1,328 (4.0 ) 3.5 5,490 4,788 14.7
Net (income) loss attributable to
noncontrolling interests 45   42   22 7.1 nm 157   84 86.9
Net income attributable to U.S. Bancorp $1,420   $1,474   $1,350 (3.7 ) 5.2 $5,647   $4,872 15.9
Net income applicable to U.S. Bancorp
common shareholders $1,349   $1,404   $1,314 (3.9 ) 2.7 $5,383   $4,721 14.0
Diluted earnings per common share $.72   $.74   $.69 (2.7 ) 4.3 $2.84   $2.46 15.4
                                   

Net income attributable to U.S. Bancorp for the fourth quarter of 2012 was $70 million (5.2 percent) higher than the fourth quarter of 2011, but $54 million (3.7 percent) lower than the third quarter of 2012. The increase in net income year-over-year was the result of an increase in total net revenue, driven by higher net interest income, a decrease in noninterest expense and a decline in the provision for credit losses. On a linked quarter basis, the decrease in net income was driven by a decline in noninterest income and an increase in noninterest expense, primarily due to the $80 million mortgage foreclosure-related regulatory settlement accrual, partially offset by a decrease in the provision for credit losses.

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