US Bank 2004 Annual Report Download - page 54
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Please find page 54 of the 2004 US Bank annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.equity and capital management programs, refer to Note 17 and growth in fee-based products and services. Net income
of the Notes to Consolidated Financial Statements. from continuing operations was $1,056.0 million, or
The following table provides a detailed analysis of all $.56 per diluted share, compared with $970.3 million, or
shares repurchased during the fourth quarter of 2004: $.50 per diluted share for the fourth quarter of 2003,
representing an 8.8 percent annual growth rate. Net income
Number of Average Remaining Shares
Shares Price Paid Available to be for the fourth quarter of 2003 also included after-tax
Time Period Purchased per Share Purchased
merger and restructuring-related items of $5.0 million
October (a)*********** 4,316,098 $28.74 63,615,584 ($7.6 million on a pre-tax basis).
November (a) ********* 6,044,285 29.74 57,571,299
Total net revenue, on a taxable-equivalent basis, was
December (b)********* 9,345,786 30.53 144,959,788
$3,235.0 million for the fourth quarter of 2004, compared
Total ************* 19,706,169 $29.90 144,959,788
with $3,113.3 million for the fourth quarter of 2003, an
(a) All shares purchased during October and November of 2004 were purchased under increase of $121.7 million (3.9 percent) from a year ago.
the publicly announced December 16, 2003 repurchase authorization.
(b) For the month of December 5.0 million shares were purchased under the publicly The increase reflected growth in the majority of fee-based
announced December 21, 2004 authorization and 4.3 million shares were purchased revenue categories, particularly in payment processing
under the publicly announced December 16, 2003 authorization.
revenue. The expansion of the Company’s merchant
Banking regulators define minimum capital
acquiring business in Europe, including the purchase of the
requirements for banks and financial services holding
remaining 50 percent shareholder interest in EuroConex
companies. These requirements are expressed in the form of
and the acquisition of several European merchant acquiring
a minimum Tier 1 capital ratio, total risk-based capital
businesses, accounted for approximately $24.2 million of
ratio, and Tier 1 leverage ratio. The minimum required level
the favorable variance in total net revenue year-over-year.
for these ratios is 4.0 percent, 8.0 percent, and 4.0 percent,
Fee-based revenue growth was offset somewhat by the
respectively. The Company targets its regulatory capital
unfavorable variance in securities gains (losses) of
levels, at both the bank and bank holding company level, to
$20.4 million and net interest income.
exceed the ‘‘well-capitalized’’ threshold for these ratios of
Fourth quarter net interest income, on a taxable-
6.0 percent, 10.0 percent, and 5.0 percent, respectively. As
equivalent basis was $1,799.8 million, compared with
of December 31, 2004, the Company’s Tier 1 capital, total
$1,816.7 million in the fourth quarter of 2003. The
risk-based capital, and Tier 1 leverage ratio were
$16.9 million (.9 percent) decrease in net interest income
8.6 percent, 13.1 percent, and 7.9 percent, respectively.
was driven by lower net interest margins, partially offset by
These ratios compare to 9.1 percent, 13.6 percent, and
growth in average earning assets. Average earning assets
8.0 percent, respectively, as of December 31, 2003. All
increased by $7.2 billion (4.4 percent), primarily driven by
regulatory ratios, at both the bank and bank holding
continued strong growth in retail loans, as well as increases
company level, continue to be in excess of stated ‘‘well-
in residential mortgages, investment securities, commercial
capitalized’’ requirements.
and commercial real estate loans. The growth in earning
The Company uses tangible common equity expressed
assets contributed approximately $83.8 million of net
as a percent of tangible common assets as an additional
interest income relative to a year ago. The positive impact
measure of its capital. At December 31, 2004, the
of earning asset growth was more than offset by an
Company’s tangible common equity ratio was 6.4 percent,
unfavorable rate variance, which reduced net interest
compared with 6.5 percent at year-end 2003. Table 20
income by $89.0 million, primarily driven by the higher
provides a summary of capital ratios as of December 31,
cost of wholesale funding relative to the fourth quarter of
2004 and 2003, including Tier 1 and total risk-based
2003. Also contributing to the year-over-year decline was
capital ratios, as defined by the regulatory agencies.
an $11.6 million reduction in loan fees, the result of fewer
FOURTH QUARTER SUMMARY loan prepayments. The net interest margin for the fourth
quarter of 2004 was 4.20 percent, compared with
The Company reported net income of $1,056.0 million for 4.42 percent in the fourth quarter of 2003. The year-over-
the fourth quarter of 2004, or $.56 per diluted share, year decline in net interest margin primarily reflected
compared with $977.0 million, or $.50 per diluted share, competitive credit pricing, a preference to acquire lower
for the fourth quarter of 2003. Return on average assets yielding, adjustable rate securities, lower prepayment fees
and return on average equity were 2.16 percent and and the higher cost of wholesale funding relative to the
21.2 percent, respectively, for the fourth quarter of 2004, fourth quarter of 2003 due to rising interest rates.
compared with returns of 2.05 percent and 19.4 percent, Fourth quarter 2004 noninterest income increased
respectively, for the fourth quarter of 2003. The Company’s 10.7 percent from the same period of a year ago. The
results for the fourth quarter of 2004 improved over the increase was driven by favorable variances in the majority
fourth quarter of 2003, primarily due to lower credit costs of fee income categories, slightly offset by an increase in
52 U.S. BANCORP