US Bank 2009 Annual Report Download - page 58

Mortgage banking revenue increased $195 million as the
lower interest rate environment drove strong mortgage loan
production and related gains, the net change in the valuation
of MSRs and related economic hedging activities was
favorable and servicing income increased. Other income
increased $184 million due to lower retail lease residual
valuation losses, improving equity investment revenue and a
payments-related contract termination gain, partially offset
by the 2008 Visa Gain. In addition, net securities losses
decreased $95 million. The increase in noninterest income
was also due to higher fee-based payments-related income of
$70 million (10.3 percent) and an increase in commercial
products revenue of $54 million (41.2 percent) due to
stronger capital markets, standby letters of credit and other
commercial loan fees. Trust and investment management
fees declined $23 million (7.7 percent) due to lower account-
level fees and the impact of interest rates on money market
investment fees. Investment product fees and commissions
decreased $10 million (27.0 percent) due to lower sales
levels from a year ago. Deposit service charges decreased
$22 million (8.5 percent) primarily due to a decrease in the
number of overdraft incidences, which more than offset
deposit account growth.
Noninterest expense was $2.2 billion in the fourth
quarter of 2009, an increase of $290 million (15.0 percent)
from the fourth quarter of 2008. The increase in noninterest
expense was principally due to the impact of acquisitions,
and higher FDIC deposit insurance expense, marketing and
business development expense and costs related to
investments in affordable housing and other tax-advantaged
projects. Compensation expense increased $46 million
(6.0 percent) and employee benefits increased $21 million
(16.9 percent), reflecting acquisitions and higher pension
costs. Net occupancy and equipment expense increased
$12 million (5.9 percent) and professional services expense
increased $8 million (11.0 percent) due principally to
acquisitions and other business initiatives. Marketing and
business development expense increased $15 million
(16.7 percent) due to costs related to the introduction of
new credit card products, while technology and
56 U.S. BANCORP
Table 21 Fourth Quarter Results
(Dollars and Shares in Millions, Except Per Share Data) 2009 2008
Three Months Ended
December 31,
Condensed Income Statement
Net interest income (taxable-equivalent basis) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,360 $2,161
Noninterest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,174 1,716
Securities gains (losses), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (158) (253)
Total net revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,376 3,624
Noninterest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,228 1,938
Provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,388 1,267
Income before taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 760 419
Taxable-equivalent adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 40
Applicable income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 27
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602 352
Net income attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – (22)
Net income attributable to U.S. Bancorp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 602 $ 330
Net income applicable to U.S. Bancorp common shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 580 $ 259
Per Common Share
Earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .30 $ .15
Diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .30 $ .15
Dividends declared per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .050 $ .425
Average common shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,908 1,754
Average diluted common shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,917 1,763
Financial Ratios
Return on average assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86% .51%
Return on average common equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.6 5.3
Net interest margin (taxable-equivalent basis) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.83 3.81
Efficiency ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.1 50.0
(a) Interest and rates are presented on a fully taxable-equivalent basis utilizing a tax rate of 35 percent.