Minneapolis-based U.S. Bancorp announced yesterday that it will sell $6.6 billion worth of preferred stock and warrants to the U.S. Treasury under its Capital Purchase Program of the Emergency Economic Stabilization Act of 2008.
"Over the past few weeks, we have been evaluating the U.S. Treasury’s Capital Purchase Program and the impact that the company’s participation in the program might have on our ability to serve our customers, support our communities and create long-term value for our shareholders," said Richard K. Davis, chairman, president and CEO of U.S. Bancorp. "U.S. Bancorp is operating from a position of strength. During these uncertain times, the company has benefited from both a prudent approach to risk management and a diverse mix of businesses. Our capital position is solid. After careful consideration, we have concluded that the capital available through the Capital Purchase Program will augment our capacity to engage in increased lending activity and invest for future growth, and will enhance the company’s capability to assist in stimulating the United States economy."
The Minneapolis-based parent company of U.S. Bank recently reported third-quarter net income of $576 million, or 32 cents per share, down from $950 million, or 53 cents per share, in the same period a year ago.
"U.S. Bancorp’s third quarter results reflected the underlying strength of our banking franchise and business model, as well as the challenges presented to us by the current operating environment," Davis said at the time. "Strong year-over-year growth in average loans and deposits, an expanded net interest margin and higher fee-based revenue, demonstrated our ability – and on-going opportunity – to provide banking products and services to our growing customer base."
