US Bank 2005 Annual Report Download - page 21

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wholesale funding, and asset/liability decisions given rising advantaged development projects and higher medical and
shorter-term interest rates. Slightly higher loan fees and the pension costs from a year ago. These incremental expenses
increasing margin benefit of deposits and net free funds were partially offset by a favorable change in impairment
partially offset the impact of these factors during the year. charges related to the mortgage servicing rights (‘‘MSRs’’)
Total noninterest expense in 2005 increased portfolio of $110 million due to changing longer-term
$78 million (1.3 percent), compared with 2004. Noninterest interest rates and a $101 million reduction in debt
expense reflected incremental costs related to expanding the prepayment charges, compared with 2004. The efficiency
payment processing businesses, investments in in-store ratio (the ratio of noninterest expense to taxable-equivalent
branches (branches located within grocery stores) and net revenue excluding net securities gains or losses) was
service-related business initiatives, expenses related to 44.3 percent in 2005, compared with 45.3 percent in 2004.
investments in affordable housing or other similar tax- The improvement in the efficiency ratio reflected these
SELECTED FINANCIAL DATA
Year Ended December 31
(Dollars and Shares in Millions, Except Per Share Data) 2005 2004 2003 2002 2001
Condensed Income Statement
Net interest income (taxable-equivalent basis) (a) **************** $ 7,088 $ 7,140 $ 7,217 $ 6,847 $ 6,405
Noninterest income****************************************** 6,151 5,624 5,068 4,911 4,340
Securities gains (losses), net********************************** (106) (105) 245 300 329
Total net revenue **************************************** 13,133 12,659 12,530 12,058 11,074
Noninterest expense***************************************** 5,863 5,785 5,597 5,740 6,149
Provision for credit losses ************************************ 666 669 1,254 1,349 2,529
Income from continuing operations before taxes ************* 6,604 6,205 5,679 4,969 2,396
Taxable-equivalent adjustment ******************************** 33 29 28 33 54
Applicable income taxes ************************************* 2,082 2,009 1,941 1,708 818
Income from continuing operations ************************* 4,489 4,167 3,710 3,228 1,524
Discontinued operations (after-tax)***************************** — — 23 (23) (45)
Cumulative effect of accounting change (after-tax) *************** ———(37)—
Net income ********************************************* $ 4,489 $ 4,167 $ 3,733 $ 3,168 $ 1,479
Per Common Share
Earnings per share from continuing operations ****************** $ 2.45 $ 2.21 $ 1.93 $ 1.68 $ .79
Diluted earnings per share from continuing operations *********** 2.42 2.18 1.92 1.68 .79
Earnings per share ****************************************** 2.45 2.21 1.94 1.65 .77
Diluted earnings per share *********************************** 2.42 2.18 1.93 1.65 .76
Dividends declared per share ********************************* 1.230 1.020 .855 .780 .750
Book value per share**************************************** 11.07 10.52 10.01 9.62 8.58
Market value per share ************************************** 29.89 31.32 29.78 21.22 20.93
Average common shares outstanding ************************** 1,831 1,887 1,924 1,916 1,928
Average diluted common shares outstanding ******************* 1,857 1,913 1,936 1,925 1,940
Financial Ratios
Return on average assets ************************************ 2.21% 2.17% 1.99% 1.84% .89%
Return on average equity ************************************ 22.5 21.4 19.2 18.3 9.0
Net interest margin (taxable-equivalent basis) ******************* 3.97 4.25 4.49 4.65 4.46
Efficiency ratio (b) ******************************************* 44.3 45.3 45.6 48.8 57.2
Average Balances
Loans ***************************************************** $133,105 $122,141 $118,362 $114,453 $118,177
Loans held for sale****************************************** 1,795 1,608 3,616 2,644 1,911
Investment securities **************************************** 42,103 43,009 37,248 28,829 21,916
Earning assets********************************************** 178,425 168,123 160,808 147,410 143,501
Assets***************************************************** 203,198 191,593 187,630 171,948 165,944
Noninterest-bearing deposits ********************************* 29,229 29,816 31,715 28,715 25,109
Deposits *************************************************** 121,001 116,222 116,553 105,124 104,956
Short-term borrowings*************************************** 19,382 14,534 10,503 10,116 11,679
Long-term debt********************************************* 36,141 35,115 33,663 32,172 26,088
Shareholders’ equity***************************************** 19,953 19,459 19,393 17,273 16,426
Period End Balances
Loans ***************************************************** $137,806 $126,315 $118,235 $116,251 $114,405
Allowance for credit losses *********************************** 2,251 2,269 2,369 2,422 2,457
Investment securities **************************************** 39,768 41,481 43,334 28,488 26,608
Assets***************************************************** 209,465 195,104 189,471 180,027 171,390
Deposits *************************************************** 124,709 120,741 119,052 115,534 105,219
Long-term debt********************************************* 37,069 34,739 33,816 31,582 28,542
Shareholders’ equity***************************************** 20,086 19,539 19,242 18,436 16,745
Regulatory capital ratios
Tangible common equity ********************************** 5.9% 6.4% 6.5% 5.7% 5.9%
Tier 1 capital ******************************************** 8.2 8.6 9.1 8.0 7.8
Total risk-based capital *********************************** 12.5 13.1 13.6 12.4 11.9
Leverage *********************************************** 7.6 7.9 8.0 7.7 7.9
(a) Interest and rates are presented on a fully taxable-equivalent basis utilizing a tax rate of 35 percent.
(b) Computed as noninterest expense divided by the sum of net interest income on a taxable-equivalent basis and noninterest income excluding securities gains (losses), net.
U.S. BANCORP 19
Table 1