US Bank 2010 Annual Report Download - page 7

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U.S. BANCORP 5
Richard K. Davis
Chairman, President and
Chief Executive Officer
diversified business model, recent investments, deeper
customer relationships and overall financial strength.
Continued challenges
Despite these positive results, U.S. Bancorp and the industry
still face challenges in loan demand which, though showing
some welcome signs of recovery, remains muted. Credit-
worthy businesses are applying for credit lines, but many are
not actively utilizing them. Commercial utilization levels
are at historic lows, and only a continuing and robust
recovery will allow that to change.
Capital and liquidity positions
We continued to generate significant capital in 2010, ending
the year with a Tier 1 common equity ratio of 7.8 percent
and a Tier 1 capital ratio of 10.5 percent, both measures
significantly higher than the regulatory levels required to be
considered “well-capitalized.” Our ability to generate capital
each and every quarter, and the significant growth we have
experienced in deposits over the past few years have provided
us with the capacity to fund and grow our balance sheet.
Further, the strength of our capital and liquidity has been
recognized by the rating agencies, as our debt ratings continue
to place us among the highest-rated banks in the country.
Our role in the recovery
The financial services industry is no longer in a crisis
situation; many banks are doing well, and the economy is
slowly recovering. As one of America’s strongest banks,
we are proud to be an industry leader, providing guidance
on public messaging and communicating on behalf of our
industry with regulators and legislators.
It is now time for America’s banking industry to be heard.
A healthy and vibrant banking industry is essential to drive
the economy forward and help our country recover from
this recession. When the intensity of the economic downturn
became clear several years ago, and as some financial compa-
nies’ role in the downturn became known, the entire industry
lost a great deal of respect and its reputation suffered. This
proved to be harmful to all banks, customers, shareholders
and communities. It is now clear that strong banks, including
U.S. Bancorp, are critically important to the recovery and must
have a voice in the direction of industry regulation. U.S. Bancorp
will continue to work with the administration, legislators,
the regulators — and our peer banks — to make it clear to
all that the banking industry holds the key to accelerating the
economic recovery. Importantly, however, we must continue
to highlight the consequences of excessive regulation that
could be injurious, rather than supportive, of a full recovery.