U.S. Bancorp Receives Stress Capital Buffer Requirement of 2.5 Percent; Recommends Dividend Increase of 9.5 Percent
29 June 2021 - 7:10AM
Business Wire
U.S. Bancorp (NYSE: USB) today commented on the results of the
Federal Reserve’s 2021 Dodd-Frank Act stress test.
Based on its 2021 stress test results, the company will be
subject to a stress capital buffer requirement (SCB) of 2.5 percent
for the period beginning October 1, 2021 and ending on September
30, 2022. The SCB, when added to the Basel III Common Equity Tier 1
(CET1) minimum of 4.5 percent, requires the company to maintain a
CET1 ratio above 7 percent through this period. The company’s CET1
ratio was 9.9 percent as of March 31, 2021 under CECL transition
rules.
The Federal Reserve also announced that the capital restrictions
instituted in the third quarter of 2020 in response to the economic
uncertainty from the COVID-19 pandemic will expire on June 30,
2021. As a result, the company will recommend that its Board of
Directors approve a 9.5 percent increase to its third quarter
dividend payable in October 2021. The company expects to recommend
a third quarter dividend of $0.46 per common share, equivalent to
an annual dividend of $1.84 per common share.
U.S. Bancorp’s existing share repurchase program announced in
December 2020 remains in effect. The company will continue to
monitor its capital position and may revise the program based on
economic conditions and performance. Capital distributions,
including dividends and stock repurchases, are subject to the
approval of the company’s Board of Directors, and will align with
regulatory requirements.
“We are committed to creating and delivering value to our
shareholders and we continue to do so every day,” said Andy Cecere,
Chairman, President and CEO of U.S. Bancorp. “The results of this
year’s stress test are a testament to our strong financial profile
and well-established financial discipline which allowed us to
maintain strong capital and liquidity positions throughout the
recent adverse economic conditions.”
About U.S. Bank
U.S. Bancorp, with nearly 70,000 employees and $553 billion in
assets as of March 31, 2021, is the parent company of U.S. Bank
National Association. The Minneapolis-based company serves millions
of customers locally, nationally and globally through a diversified
mix of businesses: Consumer and Business Banking; Payment Services;
Corporate & Commercial Banking; and Wealth Management and
Investment Services. The company has been recognized for its
approach to digital innovation, social responsibility, and customer
service, including being named one of the 2021 World’s Most Ethical
Companies and Fortune’s most admired superregional bank. Learn more
at usbank.com/about.
Forward-looking statements
“Safe Harbor” Statement under 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 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.
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;
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, 2020, 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. 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/20210628005819/en/
Investors: Jennifer Thompson, U.S. Bancorp Investor Relations
612.303.0778, jen.thompson@usbank.com
Media: Jeff Shelman, U.S. Bancorp Public Affairs and
Communications 612.422.1423, Jeffrey.shelman@usbank.com
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