☑ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES |
EXCHANGE ACT OF 1934 |
2019
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES |
EXCHANGE ACT OF 1934 |
Delaware | 41-0255900 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading symbols | Name of each exchange on which registered | ||
Common Stock, $.01 par value per share | USB | New York Stock Exchange | ||
Depositary Shares (each representing 1/100th interest in a share of Series A Non-Cumulative Perpetual Preferred Stock, par value $1.00) | USB PrA | New York Stock Exchange | ||
Depositary Shares (each representing 1/1,000th interest in a share of Series B Non-Cumulative Perpetual Preferred Stock, par value $1.00) | USB PrH | New York Stock Exchange | ||
Depositary Shares (each representing 1/1,000th interest in a share of Series F Non-Cumulative Perpetual Preferred Stock, par value $1.00) | USB PrM | New York Stock Exchange | ||
Depositary Shares (each representing 1/1,000th interest in a share of Series H Non-Cumulative Perpetual Preferred Stock, par value $1.00) | USB PrO | New York Stock Exchange | ||
Depositary Shares (each representing 1/1,000th interest in a share of Series K Non-Cumulative Perpetual Preferred Stock, par value $1.00) | USB PrP | New York Stock Exchange | ||
0.850% Medium-Term Notes, Series X (Senior), due June 7, 2024 | USB/24B | New York Stock Exchange |
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of RegulationS-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form10-K or any amendment to this Form10-K. ☐
Large accelerated filer | ☑ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company☐ |
Class | Outstanding at January 31, | |
Common Stock, $.01 par value per share |
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Document | Parts Into Which Incorporated | |||
1. | Portions of the Annual Report to Shareholders for the Fiscal Year Ended December 31, | Parts I and II | ||
2. | Portions of the Proxy Statement for the Annual Meeting of Shareholders to be held April | Part III |
Item 1. |
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accounts, savings accounts and time certificate contracts. Ancillary services such as capital markets, treasury management and receivable
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Both the scope of the laws and regulations and the intensity of the supervision to which the Company is subject have increased in recent years in response to the financial crisis, as well as other factors such as technological and market changes. Regulatory enforcement and fines have also increased across the banking and financial services sector. Many of these changes have occurred as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and its implementing regulations, most of which are now in place. While the regulatory environment has entered a period of rebalancing of the post financial crisis framework, the Company expects that its business will remain subject to extensive regulation and supervision.
On
requirements described below.
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companies and banks,banking organizations, including the Company and U.S. Bank National Association, would be placed into oneand that tailored the application of four risk-based categories based on the banking organization’s size, status as a global systemically important bank, cross-jurisdictional activity, weighted short-term wholesale funding, nonbank assets andoff-balance sheet exposures. The extent to whichFederal Reserve’s enhanced prudential standards and certain other capital and liquidity standards would apply to these bank holding companies and banks would depend upon thelarge banking organization’s category. Under the Proposed Tailoring Rules, which remain subject to finalization and may be revised, the Company and U.S. Bank National Association would each qualify as a Category III banking organization subject to proposed requirements applicable to banking organizations that are not subject to Category I or II standards and that have at least $250 billion in total consolidated assets OR at least $100 billion in total consolidated assets and $75 billion or more in any one of three indicators: (1) nonbank assets, (2) weighted short-term wholesale funding, or(3) off-balance sheet exposures. In connection with the Proposed Tailoring Rules, the Federal Reserve indicated the firms that would fall into each of the four categories based on data for the second quarter of 2018. According to the Federal Reserve’s projections, which could change in accordance with any finalorganizations. The rules the Company and U.S. Bank National Association would be “Category III” banking organizations under the Proposed Tailoring Rules, and several regulatory requirements currently applicable to the Company and U.S. Bank National Association would be reduced or eliminated, as discussedare described in furthermore detail in the paragraphs that follow.
The ultimate benefits or consequences of the EGRRCPA for the Company, U.S. Bank National Association, their other subsidiaries and their activities will depend on the final form of the Proposed Tailoring Rules and additional rulemakings to implement the Act that are expected to be issued by the United States banking agencies, which cannot be predicted.
below.
In August 2017, the
System that addresses the role of boards of directors as well as the responsibilities of members of senior and business line management and controls at large financial institutions.
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functional “functional regulation,” the Federal Reserve acts as an umbrella regulator for the Company, and certain of the Company’s
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financial condition and future prospects (including current and projected capital ratios and levels); the competence, experience and integrity of management and its record of compliance with laws and regulations; the convenience and needs of the communities to be served (including the acquiring institution’s record of compliance under the CRA); the effectiveness of the acquiring institution in combating money laundering activities; and the extent to which the transaction would result in greater or more concentrated risks to the stability of the United States banking or financial system. In addition, approval of interstate transactions requires that the acquiror satisfy regulatory standards for well-capitalized and well-managed institutions.
Under these requirements, the CompanyFederal Reserve may in the future be requiredrequire the Company to provide financial assistance to U.S. Bank National Association, should it experience financial distress. Capital loans by the Company to U.S. Bank National Association would be subordinate in right of payment to deposits and certain other debts of U.S. Bank National Association. In the event of the Company’s bankruptcy, any commitment by the Company to a federal bank regulatory agency to maintain the capital of U.S. Bank National Association would be assumed by the bankruptcy trustee and entitled to a priority of payment.
more, but these requirements have not yet been finalized.
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In addition, Federal Reserve policy on the payment of dividends, stock redemptions and stock repurchases requires that bank holding companies consult with and inform the Federal Reserve in advance of doing any of the following: declaring and paying dividends that could raise safety and soundness concerns (i.e. declaring and paying dividends that exceed earnings for the period for which dividends are being paid); redeeming or repurchasing capital instruments when experiencing financial weakness; and redeeming or repurchasing common stock and perpetual preferred stock, if the result will be a net reduction in the amount of such capital instruments outstanding for the quarter in which the reduction occurs.
inclusion of minority interests in regulatory capital.
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On
requirements.
Under the Proposed Tailoring Rules, the Company, as a Category III banking organization, would no longer be required to calculate risk-based capital ratios under the advanced approaches for purposes of determining regulatory compliance. Instead, the Company’s risk-based capital ratios would be calculated using only the standardized approach. The Company would remain subject to the SLR and the countercyclical capital buffer. In addition, the Company, as a Category III banking organization, would be permitted to opt out of recognizing accumulated other comprehensive income (“AOCI”) in common equity tier 1 capital for purposes of calculating its regulatory capital ratios. The Company cannot predict whether the final form of the Proposed Tailoring Rules will exempt the Company from using the advanced approaches to calculate risk-based capital ratios or permit the Company to opt out of including AOCI in its calculation of common equity tier 1 capital.
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federal banking regulator to take “prompt corrective action” with respect to aan FDIC-insured depository institution, such as U.S. Bank National Association, if that institution does not meet certain capital adequacy standards. Supervisory actions by the appropriate federal banking regulator under the “prompt corrective action” rules generally depend upon an institution’s classification within five capital categories. An institution that fails to remain well-capitalized becomes subject to a series of restrictions that increase in severity as its capital condition weakens. Such restrictions may include a prohibition on capital distributions, restrictions on asset growth or restrictions on the ability to receive regulatory approval of applications. The FDICIA also provides for enhanced supervisory authority over undercapitalized institutions, including authority for the appointment of a conservator or receiver for the institution.
conditions.
2020.
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company-runstress test employing stress scenarios developed by the Company. The results of this stress test must be submitted totests, and the Federal Reserve for review in early October of each year. The Company is required to publish its results of this stress test no later than the end of November of each year. The Federal Reserve currently publishes summaries of supervisory stress test results for each large bank holding company under bothhas eliminated the adverse and severely adversescenario as a mandatory scenario.
NationalTailoring Rules. Under the OCC’s rule, national banks with assets in excess of $50$250 billion, including U.S. Bank National Association, are currently required to submit annual5, 2019.6, 2020. The Company is required to publish the results of this stress test no later than June 30, 2019.
Under the Proposed EPS Tailoring Rule, the Company, as a Category III banking organization, would remain subject to annual supervisory stress tests but would be subject to company-run stress tests every two years, instead of annually. Consistent with EGRRCPA, the Federal Reserve also has proposed to eliminate themid-cycle stress testing requirement for all banking organizations as of 2020 and eliminate the adverse scenario from all stress testing requirements. The Company cannot predict whether the Proposed EPS Tailoring Rule and other related issuances will be adopted as proposed or whether any changes will be made to it that would affect the stress testing requirements applicable to the Company.
2020.
In November 2018, the Federal Reserve’s Vice Chairman for Supervision stated that the Federal Reserve does not expect that the proposed stress buffer requirements will go into effect before 2020, and that, although the Federal Reserve expects to finalize certain elements
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one-yeartime horizon and would apply to the Company and U.S. Bank National Association. Federal banking regulators continue to work on finalizing the rule to implement the NSFR.
Association.
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the FDIC would have broad powers to transfer any assets or liabilities of a bank holding company without the approval of its creditors.
by July 1, 2021.
rulemaking process is complete.
2019.
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Association. Association or its subsidiaries. Under the Federal Reserve Act and the Federal Reserve’s Regulation W, U.S. Bank National Association (andand its subsidiaries) issubsidiaries are subject to quantitative and qualitative limits on extensions of credit (including credit exposure arising from repurchase and reverse repurchase agreements, securities borrowing and derivative transactions), purchases of assets, and certain other transactions involvingwith the Company or its othertermsterms. Transactions between U.S. Bank National Associations and its affiliates must be consistent with standards of safety and soundness.
Non-compliance with sanctions laws and/or AML laws or failure to maintain an adequate BSA/AML compliance program can lead to significant monetary penalties and reputational damage, and federal regulators evaluate the effectiveness of an applicant in combating money laundering when determining whether to approve a proposed bank merger, acquisition, restructuring, or other expansionary activity. There have been a number of significant enforcement actions against banks, broker-dealers andnon-bank financial institutions with respect to sanctions laws and AML laws and some have resulted in substantial penalties, including against the Company and U.S. Bank National Association. See Note 22 of the Notes to Consolidated Financial Statements in the 2018 Annual Report.
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final form of the rule and how it is implemented.
On May 9, 2018,
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March 1, 2017. The the rules for initial margin requirements will phase in over four years, which began on September 1, 2016,have become effective and will be fully2020,2021, depending on the level of
In October 2019, the banking regulators proposed rules to conform their margin rules on inter-affiliate transactions to the CFTC’s margin rules, which generally exempt inter-affiliate transactions from initial margin requirements.
activities will depend on, among other things, further rulemaking and guidance from the Volcker Rule regulators and the development of market practices and standards.
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cyber-attack.
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Item 1A. |
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Item 1B. |
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Item 2. |
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Item 3. |
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Item 4. |
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Closing Date | Issuer | Capital Securities or Preferred Stock | Other Securities | Covered Debt | ||||
3/17/06 | USB Capital IX and U.S. Bancorp | USB Capital IX’s $675,378,000 of 6.189% Fixed-to-Floating | U.S. Bancorp’s Series A Non-Cumulative Perpetual Preferred Stock | U.S. Bancorp’s 7.50% Subordinated Debentures due 2026 (CUSIP No. 911596AL8) | ||||
3/27/06 | U.S. Bancorp | U.S. Bancorp’s 40,000,000 Depositary Shares ($25 per Depositary Share) each representing a 1/1000 th interest in a share of Series BNon-Cumulative Perpetual Preferred Stock | Not Applicable | U.S. Bancorp’s 7.50% Subordinated Debentures due 2026 (CUSIP No. 911596AL8) | ||||
12/22/06 | USB Realty Corp (a) and U.S. Bancorp | USB Realty Corp.’s Fixed-to-Floating-Rate Non-Cumulative Perpetual Series A Preferred Stock exchangeable for shares of U.S. Bancorp’s Series CNon-Cumulative Perpetual Preferred Stock(b) | Not Applicable | U.S. Bancorp’s 7.50% Subordinated Debentures due 2026 (CUSIP No. 911596AL8) |
(a) |
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(b) |
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Item 5. |
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Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (In Millions) | ||||||||||||
October1-31 | 7,906,336 | (a) | $ | 51.75 | 7,806,336 | $ | 1,843 | |||||||||
November1-30 | 4,526,196 | 53.56 | 4,526,196 | 1,601 | ||||||||||||
December1-31 | 3,770,521 | (b) | 48.30 | 3,695,521 | 1,422 | |||||||||||
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Total | 16,203,053 | (c) | $ | 51.46 | 16,028,053 | $ | 1,422 | |||||||||
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Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (In Millions) | ||||||||||||||||
October 1-31 | 9,517,417 | (a) | $ | 56.45 | 9,442,417 | $ | 1,672 | |||||||||||||
November 1-30 | 11,887,044 | 59.25 | 11,887,044 | 3,468 | ||||||||||||||||
December 1-31 | 17,717,490 | 59.99 | 17,717,490 | 2,405 | ||||||||||||||||
Total | 39,121,951 | (a) | $ | 58.90 | 39,046,951 | $ | 2,405 | |||||||||||||
(a) |
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Item 6. |
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Item 7. |
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Item 7A. |
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Item 8. |
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Item 9. |
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Item 9A. |
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Item 9B. | Other Information |
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Item 10. |
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John R. Elmore
Mr. Elmore is Vice Chairman, Community Banking and Branch Delivery,
Ms. Godridge will retire from U.S. Bancorp on June 30, 2020.
2009.
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Item 11. |
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Item 12. |
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Plan Category | Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights | Weighted-average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in the First Column) | |||||||||
Equity compensation plans approved by security holders | 34,713,980 | (3) | ||||||||||
Stock Options | 9,115,010 | (1) | $ | 34.52 | ||||||||
Restricted Stock Units and Performance-Based Restricted Stock Units | 6,719,298 | (2) | - | |||||||||
Equity compensation plans not approved by security holders | 416,688 | (4) | - | - | ||||||||
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Total | 16,250,996 | 34,713,980 |
Plan Category | Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in the First Column) | ||||||||||||
Equity Compensation Plans Approved by Security Holders | 31,618,954 | (3) | |||||||||||||
Stock Options | 5,718,256 | (1) | $ | 39.25 | |||||||||||
Restricted Stock Units and Performance-Based Restricted Stock Units | 6,606,833 | (2) | - | ||||||||||||
Equity Compensation Plans Not Approved by Security Holders | 351,948 | (4) | - | - | |||||||||||
Total | 12,677,037 | 31,618,954 |
(1) |
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(2) |
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(3) |
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(4) |
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416,688315,948 shares included in the table assume that participants in the plans whose deferred compensation had been deemed to be invested in the Company’s common stock had elected to receive all of that deferred compensation in shares of the Company’s common stock on December 31, 2018.2019. The U.S. Bank Executive Employees Deferred Compensation Plan (2005 Statement) and the U.S. Bank Outside Directors Deferred Compensation Plan (2005 Statement) are the Company’s only deferred compensation plans under which compensation may currently be deferred.25
Item 13. |
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Item 14. |
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Item 15. |
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Exhibit Number | Description | |
| Restated Certificate of Incorporation, as amended. Filed as Exhibit 3.1 to Form10-Q for the quarterly period ended September 30, 2018. | |
| Amended and Restated Bylaws. Filed as Exhibit 3.1 to Form8-K filed on January 20, 2016. | |
4.1 | Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, copies of instruments defining the rights of holders of long-term debt are not filed. U.S. Bancorp agrees to furnish a copy thereof to the SEC upon request. |
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(1) |
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(2) |
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U.S. BANCORP | ||
By | /s/ ANDREW CECERE | |
Andrew Cecere | ||
Chairman, President and Chief Executive Officer |
Signature and Title |
/s/ ANDREW CECERE |
Andrew Cecere, |
Chairman, President and Chief Executive Officer (principal executive officer) |
/s/ TERRANCE R. DOLAN |
Terrance R. Dolan, |
Vice (principal financial officer) |
/s/ |
Executive Vice President and Controller (principal accounting officer) |
WARNER L. BAXTER* |
Warner L. Baxter, Director |
DOROTHY J. BRIDGES* |
Dorothy J. Bridges, Director |
ELIZABETH L. BUSE* |
Elizabeth L. Buse, Director |
MARC N. CASPER* |
Mark N. Casper, Director |
ARTHUR D. COLLINS, JR.* |
Arthur D. Collins, Jr., Director |
KIMBERLY J. HARRIS* |
Kimberly J. Harris, Director |
ROLAND A. HERNANDEZ* |
Roland A. Hernandez, Director |
DOREEN WOO HO* |
Doreen Woo Ho, Director |
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Signature and Title |
OLIVIA F. KIRTLEY* |
Olivia F. Kirtley, Director |
KAREN S. LYNCH* |
Karen S. Lynch, Director |
RICHARD P. MCKENNEY* |
Richard P. McKenney, Director |
YUSUF I. MEHDI* |
Yusuf I. Mehdi, Director |
DAVID B. O’MALEY* |
David B. O’Maley, Director |
O’DELL M. OWENS, M.D., M.P.H.* |
O’Dell M. Owens, M.D., M.P.H., Director |
CRAIG D. SCHNUCK* |
Craig D. Schnuck, Director |
JOHN P. WIEHOFF* |
John P. Wiehoff, Director |
SCOTT W. WINE* |
Scott W. Wine, Director |
* |
|
By: | /s/ ANDREW CECERE | |
Andrew Cecere | ||
Attorney-In-Fact | ||
Chairman, President and Chief Executive Officer |
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