US Bank 2013 Annual Report Download - page 8

constraints. We continue to enjoy the benefits of the “flight
to quality” as customers recognize our exceptional products
and services, our superior financial performance and industry-
leading debt ratings — all signs of an outstanding banking
franchise. Our prudent management culture, a disciplined
attention to measuring every aspect of our business and a
commitment to aligning expenses with revenue have resulted
in a balance sheet that is strong and growing, along with
a mix of business that is well diversified and a franchise
performance that is consistent, predictable and repeatable.
We resist the temptation to enter businesses we don’t
understand; we don’t follow irrational players in the market
and we remain steadfastly diligent in evaluating potential
acquisitions that could only extend our success.
2014 is beginning much like 2013 with corporations and
consumers husbanding cash and foregoing discretionary
spending and investments. Soon we will see consumers
begin to spend rather than accumulate. We will also see
corporations begin to invest, rather than stockpile. Eventually,
we will expect to see spending and credit line utilization
increase and deposits decrease as the recovery takes hold.
However, for this current stage, deposits are still growing, an
indication that a robust recovery has yet to begin. We’re not
at the inflection point yet, but dialogue with our customers
leads us to believe that the recovery will accelerate in the
second half of this year. As I have said before, we are well-
positioned to capitalize on the upturn. Until then, we will
continue to prudently manage our Company — watching our
expenses and keeping them aligned with revenue, maintaining
and growing our market share and investing for the future.
Opportunity to grow
We are asked regularly about our interest in acquisitions —
and our answer is always the same. We are interested in
deepening our market share where we already have a branch
network. Our recent agreement to acquire branches in
Chicago, which doubles our presence in that great city, is
a perfect example. We expect to be a net branch grower
in the coming years. We like branches. Some of them might
not be traditional branches but, rather, in-store or on-site
branches in partnership with supermarkets, corporations,
hospitals, colleges or other high-traffic locations. We are
not interested in leap-frogging across states or acquiring a
few branches in a state where we have no critical mass or
presence. Additionally, we would like to continue to acquire
corporate trust and payments-related portfolios and companies;
acquisitions that increase competitive and operational scale in
these high value businesses. I have referred to our acquisition
focus as “one-offs.” By that I mean discreet, strategic acquisi-
tions which are smaller, rather than transformational, that are
priced correctly and enhance our franchise, capabilities and
product set and, ultimately, make sense for our shareholders.
A strong team and a strong future
I am very proud of our record full year 2013 earnings and
results. Our Company’s results are directly tied to the hard
work and dedication of our 67,000 employees, and I want to
take this opportunity to thank them for their contribution to
our success.
Average Loans and Deposits
(Dollars in Billions)
260
230
200
243.8 245.0 247.4
252.4 256.9
220.3
222.4 225.2 229.4 232.8
Deposits
Loans
4Q12 1Q13 2Q13 3Q13 4Q13
EXTENDING OUR STRENGTH
6 U.S. BANCORP