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U.S. BANCORP REPORTS RECORD EARNINGS IN 1993

 PORTLAND, Ore., Jan. 17 /PRNewswire/ -- U.S. Bancorp (NASDAQ: USBC) today released the following:
 1993 FINANCIAL HIGHLIGHTS: (1993 results are compared to 1992 results before accounting changes)
 - Net income up 24 percent to $257.9 million, highest in history
 - Period end loans grow 4.5 percent
 - Nonperforming assets to total loans & foreclosed assets down to
 1.77 percent from 2.13 percent, lowest level in four years
 - Provision for credit losses down 31 percent
 - Net interest margin rises to 5.29 percent versus 5.18 percent
 - Return on assets of 1.25 percent versus 1.07 percent
 - Return on common equity of 15.75 percent versus 13.80 percent
 U.S. Bancorp today reported record earnings for the fourth quarter and full year 1993. Net income for the fourth quarter 1993 totaled $67.1 million, while net income for the full year totaled $257.9 million. The full year 1993 net income represents a 24 percent increase over the $208.1 million earned before accounting changes in 1992. Net income per common share was $.64 for the fourth quarter and $2.47 for the full year, compared to $.63 and $2.05 before accounting changes for the respective periods in 1992.
 "Our record 1993 results continue a long tradition of profitability at U.S. Bancorp, and mark our eleventh consecutive year of increased earnings. While we are pleased to have achieved the highest earnings in our history, we are focused on the significant growth opportunities in 1994," stated Roger L. Breezley, chairman and chief executive officer. "With the placement of Gerry Cameron as Chief Operating Officer and streamlined reporting relationships throughout the company, we have positioned ourselves to compete most effectively in 1994 through enhanced delivery of our products and services."
 Net interest income increased over 7 percent for the full year 1993, resulting from positive fundamental trends which include increased loan growth over the last three quarters of the year, strong net interest margins and continued reductions in nonperforming assets. Period end 1993 total loans increased 4.5 percent over prior year end levels while average loans experienced their highest growth rate of the year, over 6 percent annualized, during the fourth quarter 1993. The loan growth trend reflected in recent quarters is expected to continue in 1994. The net interest margin, primarily benefited by lower funding costs, was 5.29 percent for the full year 1993, up from 5.18 percent in 1992. The margin was 5.22 percent for the fourth quarter 1993, down slightly from levels experienced in earlier quarters.
 Credit quality continued to strengthen throughout 1993 as nonperforming assets at year-end dropped 13 percent from prior year levels to $252 million, representing only 1.77 percent of total loans and foreclosed assets. Credit loss reserve coverage of nonperforming loans strengthened to 125 percent, up from 100 percent at year-end 1992, while coverage of total loans and leases was maintained at 1.91 percent. Net loan charge-offs dropped $31 million, or 27 percent, during the full year 1993 in comparison to the prior year, while the provision for credit losses decreased $42 million, or 31 percent, versus the prior year.
 Noninterest revenues rose to $531.8 million for the full year 1993, an increase of $88.3 million, or 20 percent, over 1992 results. The increase was provided by strong gains in bank card revenues, brokerage commissions, equity investment income, mortgage banking revenues and service charges. For the year, noninterest revenue sources comprised more than 35 percent of total revenues, defined as tax-equivalent net interest income plus noninterest revenue, up from 33 percent in 1992.
 Noninterest expenses totaled $982.8 million for the full year 1993, up $114 million, or 13 percent, from the prior year. The increase was associated with the internal and acquisition-related revenue growth of the company. For the year, total noninterest expenses represented 65.7 percent of total revenues, compared to 64.8 percent in 1992. During the fourth quarter 1993, the efficiency ratio improved to 65.5 percent from 67 percent in the third quarter 1993.
 "We have previously noted that heightened cost control efforts are the focus at U.S. Bancorp as we enter 1994," noted Breezley, "While improvement in the overhead ratio was evident in the fourth quarter of 1993, we are reviewing every expense category with the goal of significantly greater efficiency going forward.
 "During 1993, we proceeded in refining our organization with a focus on the future." Breezley continued, "From a strategic standpoint, we believe our business lines, organizational structure, management team and employees are well aligned to allow us to take advantage of the opportunities available for continued success in the future."
 U.S. Bancorp is the largest bank holding company headquartered in the Northwest and one of the nations 35 largest, with assets of $21.4 billion as of December 31, 1993. Banking subsidiaries include U.S. Bank of Oregon; U.S. Bank of Washington; U.S. Bank of California; U.S. Bank of Nevada; U.S. Bank of Idaho, U.S. Bank (Canada); and U.S. Bank, N.A. Other financial services businesses include U.S. Bancorp Mortgage Company; U.S. Bancorp Leasing and Financial; and U.S. Bancorp Securities and Trust Group.
 U.S. BANCORP AND SUBSIDIARIES
 CONSOLIDATED BALANCE SHEET
 In Thousands, December 31, 1993 1992
 ASSETS
 Cash and due from banks $ 1,250,565 $1,246,233
 Interest-bearing deposits with banks 8,633 13,022
 Federal funds sold and security
 resell agreements 295,317 749,475
 Other short-term investments 6,381 35,764
 Securities held to maturity 1,736,558 3,014,641
 Securities available for sale 1,676,942 --
 Trading account securities 208,318 154,140
 Loans held for sale 850,327 731,461
 Loans and lease financing, net of
 unearned income
 Commercial 6,824,073 6,320,798
 Real estate construction 699,867 855,621
 Real estate mortgage 2,611,213 2,669,900
 Consumer 3,198,370 2,929,011
 Foreign 69,080 64,826
 Lease financing 765,884 724,492
 Total loans and lease financing 14,168,487 13,564,648
 Allowance for credit losses (270,229) (259,155)
 Net loans and lease financing 13,898,258 13,305,493
 Premises, furniture and equipment 533,050 470,747
 Other real estate and equipment owned 35,897 31,406
 Customers' liability on acceptances 192,982 197,188
 Other assets 722,262 791,577
 Total $21,415,490 $20,741,147
 LIABILITIES
 Deposits:
 Noninterest bearing deposits $ 3,909,617$ 3,478,702
 Interest bearing demand, money market
 and savings accounts 6,896,880 6,609,640
 Time deposits 4,704,204 5,336,935
 Total deposits 15,510,701 15,425,277
 Federal funds purchased and security
 repurchase agreements 1,954,176 1,382,268
 Commercial paper 143,140 141,914
 Other short-term borrowings 308,105 244,495
 Long-term debt 1,051,578 1,329,174
 Accrued income taxes 114,696 70,230
 Acceptances outstanding 192,982 197,188
 Other liabilities 321,917 319,293
 Total liabilities 19,597,295 19,109,839
 SHAREHOLDERS' EQUITY
 Preferred stock 150,000 150,000
 Common stock 497,382 495,339
 Capital surplus 385,613 379,982
 Net unrealized securities holding gain 18,125 --
 Retained earnings 767,075 605,987
 Total shareholders' equity 1,818,195 1,631,308
 Total liabilities and shareholders
 equity $21,415,490$20,741,147
 CONSOLIDATED STATEMENT OF INCOME
 Three Months Ended Twelve Months Ended
 In Thousands December 31, December 31,
 Except Per Share Data 1993 1992 1993 1992
 INTEREST INCOME
 Loans and lease financing $288,949 $305,729 $1,161,146 $1,253,112
 Loans held for sale 13,029 15,882 51,315 48,891
 Securities held to maturity 48,571 49,504 202,314 163,382
 Securities available for
 sale 196 - 246 -
 Trading account securities 2,304 2,930 8,607 9,480
 Money market investments 1,833 4,619 10,068 16,609
 Total interest income 354,882 378,664 1,433,696 1,491,474
 INTEREST EXPENSE
 Deposits 85,130 106,076 365,791 448,372
 Short-term borrowings 16,344 18,299 58,934 89,524
 Long-term debt 18,210 22,431 80,860 93,220
 Total interest expense 119,684 146,806 505,585 631,116
 NET INTEREST INCOME 235,198 231,858 928,111 860,358
 Provision for credit losses 28,866 21,033 92,851 134,454
 Net interest income after
 provision for credit
 losses 206,332 210,825 835,260 725,904
 NONINTEREST REVENUE
 Service charges on deposit
 accounts 34,300 33,612 134,668 120,102
 Trust and investment
 administration 12,693 12,331 48,678 45,738
 Bank card revenue 16,801 14,604 59,122 50,163
 Credit reporting revenue 7,727 7,437 33,984 33,315
 Equity investment income 14,157 5,352 33,973 12,928
 Exchange fees 7,719 7,673 28,051 24,333
 Mortgage banking income 24,157 14,077 84,632 65,437
 Securities transactions 8 (699) 11 438
 Other operating revenue 30,965 27,015 108,700 91,047
 Total noninterest revenue $148,527 $121,402 $ 531,819 $ 443,501
 Three Months Ended Twelve Months Ended
 In Thousands, December 31, December 31,
 Except Per Share Data 1993 1992 1993 1992
 NONINTEREST EXPENSE
 Employee compensation and
 benefits 129,620 115,817 495,224 436,633
 Net occupancy expense 16,458 14,868 65,931 55,709
 Equipment rentals,
 depreciation and
 maintenance 24,403 20,676 90,237 73,703
 Regulatory agency fees 10,031 10,121 41,335 36,095
 Long-term debt redemption
 expense -- -- -- 6,668
 Other real estate owned
 expenses 3,046 796 10,147 20,607
 Telecommunications 6,555 6,308 26,009 24,031
 Other operating expense 66,702 64,088 253,947 215,337
 Total noninterest expense 256,815 232,674 982,830 868,783
 Income before income taxes 98,044 99,553 384,249 300,622
 Provision for income taxes 30,982 33,476 126,300 92,548
 Income before cumulative
 effect of accounting
 changes 67,062 66,077 257,949 208,074
 Cumulative effect of
 accounting changes -- -- -- (59,890)
 Net income $ 67,062 $ 66,077 $257,949 $148,184
 Amounts applicable to
 common stock
 Income before cumulative
 effect of accounting
 changes $ 64,015 $ 63,030 $ 245,762 $ 202,725
 Net income 64,015 63,030 245,762 142,835
 Average number of common
 shares outstanding 99,454 98,898 99,327 98,650
 Per common share
 Income before cumulative
 effect of accounting
 changes $.64 $.63 $2.47 $2.05
 Net income .64 .63 2.47 1.45
 Cash dividends declared .22 .19 .85 .76
 CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
 Twelve Months Ended
 December 31,
 In Thousands 1993 1992
 Shareholders' equity at beginning of period $1,631,308 $1,406,380
 Net income 257,949 148,184
 Stock options exercised 3,958 10,311
 Dividends reinvested and other transactions 3,491 3,515
 Preferred dividends declared (12,187) (6,839)
 Common dividends declared (84,449) (75,033)
 Net unrealized securities holding gain 18,125 --
 Issuance of preferred stock, net of expenses -- 144,790
 Shareholders' equity at end of period $1,818,195 $1,631,308
 SUPPLEMENTAL INFORMATION
 Three Months Ended Twelve Months Ended
 December 31, 1993 1992 1993 1992
 (In thousands except per share data)
 Return on average common
 equity (1) 15.64% 16.65% 15.75% 13.80%
 Return on average total
 equity (1) 15.00% 15.88% 15.08% 13.56%
 Return on average assets (1) 1.26% 1.27% 1.25% 1.07%
 Period end shares outstanding 99,476 99,068
 Book value per common share $16.77 $14.95
 Risk-based capital (1993
 estimate)
 Tier 1 8.83% 8.54%
 Total capital 11.82% 11.54%
 Leverage 7.67% 7.16%
 Tax-Equivalent Net Interest
 Margin
 Average rate earned on
 interest earning assets 7.78% 8.40% 8.07% 8.83%
 Cost of funds supporting
 earning assets 2.56 3.18 2.78 3.65
 Net interest margin 5.22% 5.22% 5.29% 5.18%
 Tax-equivalent adjustment $ 8,470 $ 8,831 $ 34,975 $ 36,686
 Net interest income-tax
 equivalent $243,668 $240,689 $ 963,086 $897,044
 Average Balances (In millions)
 Loans $ 13,940 $ 13,631 $ 13,645 $ 13,722
 Earning assets 18,584 18,387 18,206 17,310
 Total assets 21,171 20,774 20,684 19,487
 Deposits 15,589 15,218 15,289 13,920
 Total shareholders' equity 1,774 1,595 1,711 1,475
 Common equity 1,624 1,445 1,561 1,409
 Credit Quality
 Allowance for credit losses,
 beginning of period $264,781 $ 252,710 $ 259,155 $ 230,101
 Acquisitions 241 (8) 322 7,515
 Provision for credit losses 28,866 21,033 92,851 134,454
 Charge-offs (34,406) (25,293) (114,844)(144,182)
 Recoveries 10,747 10,713 32,745 31,267
 Net charge-offs (23,659) (14,580) (82,099)(112,915)
 Allowance for credit losses,
 end of period $270,229 $259,155 $ 270,229 $ 259,155
 Nonaccrual loans $ 214,747 $252,376
 Restructured loans 1,458 5,647
 Other real estate and
 equipment owned 35,897 31,406
 Total nonperforming assets $ 252,102 $289,429
 Accruing loans past due 90
 days or more $ 14,062 $ 19,245
 Three Months Ended Twelve Months Ended
 December 31, 1993 1992 1993 1992
 Net charge-offs to
 average loans(2) .67% .43% .60% .82%
 Allowance for credit losses
 to end of period loans 1.91% 1.91%
 Allowance to nonperforming loans 125% 100%
 Total nonperforming assets
 as a percent of outstanding
 loans and foreclosed assets 1.77% 2.13%
 (1) Calculated before accounting changes.
 (2) Net loan charge-offs were annualized.
 -0- 1/17/94 R
 /CONTACT: analysts & shareholders: Laura E. Klein, 503-275-5773, Mark R. Patterson, 503-275-6524 or Donald F. Bowler, 503-275-5702, or media: Mary B. Ruble, 503-275-6200, all of U.S. Bancorp/
 (USBC)


CO: U.S. Bancorp ST: Oregon IN: FIN SU: ERN

TW -- NY007R -- 1265 01/17/94 10:51 EST
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