10-KPeriod: FY2005

US BANCORP \DE\ Annual Report, Year Ended Dec 31, 2005

Filed March 7, 2006For Securities:USBUSB-PHUSB-PPUSB-PRUSB-PQUSB-PSUSB-PA

Summary

U.S. Bancorp's 2005 10-K filing reveals a strong financial year, marked by record earnings of $4.5 billion, or $2.42 per diluted share, an 11% increase from the previous year. This performance surpassed the company's long-term goal of 10% earnings per share growth for the fourth consecutive year. Key performance indicators like return on average assets (2.21%) and return on average equity (22.5%) were industry-leading. The company strategically focused on growing its fee-based businesses, which saw a 9.4% increase in revenue, particularly in payment processing and deposit services. Significant acquisitions bolstered its Payment Services and Private Client, Trust & Asset Management segments, expanding its global footprint and market leadership. Credit quality also improved, with net charge-offs decreasing to 0.51% of average loans and nonperforming assets declining by 14%. The company demonstrated strong operational efficiency, achieving an efficiency ratio of 44.3%. Furthermore, U.S. Bancorp returned significant value to shareholders, with a 10% increase in dividends and a commitment to returning over 80% of earnings through dividends and share repurchases.

Key Highlights

  • 1Achieved record net income of $4.5 billion, translating to $2.42 diluted earnings per share, an 11% increase year-over-year.
  • 2Exceeded long-term EPS growth target of 10% for the fourth consecutive year.
  • 3Demonstrated industry-leading profitability with a Return on Average Assets of 2.21% and Return on Average Equity of 22.5%.
  • 4Grew fee-based revenue by 9.4%, driven by payment processing and deposit service charges.
  • 5Strengthened credit quality with a reduction in net charge-offs to 0.51% of average loans and a 14% decrease in nonperforming assets.
  • 6Completed significant acquisitions in Payment Services and Trust & Asset Management to enhance scale and market position.
  • 7Increased quarterly common stock dividend by 10% to $0.33 per share, marking 34 consecutive years of dividend increases.

Frequently Asked Questions

U.S. Bancorp reported record net income of $4.5 billion, or $2.42 per diluted share, an 11% increase from 2004. Return on average assets was 2.21%, and return on average equity was 22.5%. Total net revenue increased by 3.7% to $13.1 billion.

Credit quality improved significantly, with net charge-offs decreasing to 0.51% of average loans from 0.63% in 2004. Nonperforming assets also declined by 14% to $644 million at year-end 2005.

Revenue growth was driven by a 9.4% increase in fee-based revenue, particularly from payment processing businesses and deposit service charges. The company also saw strong organic growth in most fee income categories.

U.S. Bancorp reiterated its commitment to returning at least 80% of earnings to shareholders through dividends and share repurchases. In 2005, the company returned 90% of its earnings. It also announced a 10% increase in its quarterly dividend, marking 34 consecutive years of dividend increases.