U.S. Bancorp Operating activities analysis report

Core Income Sources

  • Investment securities
  • Loans held for sale
  • Issued loans
  • Income through loan generation fees and interest

Other Income Sources

  • Credit and debit card revenue
  • Payment products for small businesses
  • Merchant processing services and ATM fees
  • Trust and investment management fees
  • Mortgage banking and investments

Quality of Earnings

  • Net income increased $234 million (4.11%) since 2012
  • Majority of earnings (55%) come from interest income
  • Interest income increased $244 million (2.21%) in 2015
  • Non-interest income has increased $330 million (4.4%) in 2015
  • Interest expense decreased by $52 million (3.6%)
  • Non-interest expenses increased by $216 million (2.0%)
  • Loans increased by $8.8 billion (3.6%) in 2015 with only covered loans seeing a decrease
  • Earnings per share has increased 5.3% in the last 3 years
  • Visa stock sale was lower than expected though still profitable

Permanent and Transitory Earnings

  • Permanent earnings include all interest and some non-interest income
  • Transitory earnings form non-interest income are increase in goodwill increase and cash decrease from acquiring Charter One Bank in June 2014

Projected Future Earnings

  • A steady and consistent increase in net income indicates similar success in coming years
  • Revenues are produced in many different ways, giving stability to U.S. Bancorp
  • Provisions for credit losses are decreasing because lines of credit are better and U.S. Bancorp is collecting debts more efficiently
  • Acquisition of Charter One Bank should give opportunity for growth and increase the market share for U.S. Bancorp
  • Rising stock market should allow fund and wealth managers to produce higher earnings for clients
Created By
Robert Smith
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