US Bank 2008 Annual Report Download - page 7

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U.S. BANCORP 5
The decision to participate in the
program was made after a thoughtful
and detailed evaluation of the impact
that the program would have on
our Company’s ability to serve our
customers, support the communities in
which we operate, create long-term
value for our shareholders and, overall,
assist the U.S. Treasury in its quest to
stimulate the United States economy.
Although participation in the program
was not necessary from a capital
adequacy perspective, as our capital
position was strong, it was determined
to be fi nancially benefi cial and provided
U.S. Bancorp with the on-going capacity
for additional loan growth and for
funding growth initiatives. The fi nancial
benefi ts, including solidifying the
Company’s already strong capital posi-
tion and the ability to compete more
effectively with other banks that had
already announced their participation
in the program, were compelling.
Strengthening western markets
On November 21, 2008, we
announced that our Company’s lead
bank, U.S. Bank National Association,
acquired the banking operations of
two separate California fi nancial
institutions from the Federal Deposit
Insurance Corporation; Downey
Savings & Loan Association, F.A., and
PFF Bank & Trust. These transactions
followed the Company’s acquisition
of Mellon 1st Business Bank in Los
Angeles and Orange County, which
was announced in March 2008. These
three acquisitions strengthened our
geographic footprint in the attractive
Western region of our franchise. We
believe that acquisitions like Downey
Savings & Loan, PFF Bank & Trust
and Mellon 1st Business Bank are an
effi cient means of leveraging our
strong capital base and investing in
our Company. While adding over
200 new branch locations in total,
these three acquisitions served to
elevate us to the position of the 4th
largest banking system in California.
As part of the Downey Savings &
Loan and PFF Bank & Trust
acquisitions, the Company agreed to
modify the terms of certain residential
mortgage loans in accordance with the
FDIC Mortgage Loan Modifi cation
Program. This program will allow us
to work closely with approximately
35,000 homeowners in an effort to
provide solutions for these potentially
troubled borrowers to stay in their
homes. We have had a similar loan
modifi cation program in place at
U.S. Bancorp since 2007 and have
been very satisfi ed with the results.
We believe that helping to keep
borrowers in their homes is one of the
key elements necessary to the eventual
stabilization of housing prices and
economic recovery.
I believe that now, more than
ever, the conservative policies,
essential values and integrity
of this Company will benefi t
our shareholders, customers,
communities and employees.”
“