MINNEAPOLIS - U.S. Bancorp (NYSE:USB) announced a new share repurchase program authorizing the buyback of up to $5 billion of its common stock starting Friday, September 13, 2024. The financial institution also declared an increased regular quarterly dividend, reflecting a 2 percent hike from the previous quarter.
The company's share repurchase initiative, which is set to commence by early 2025, will be conducted at the company's discretion, taking into account the prevailing economic conditions, capital growth, and regulatory compliance. The repurchase of shares can occur in the open market or through privately negotiated transactions, with no commitment to purchase any specific number of shares.
In addition to the buyback program, U.S. Bancorp announced a quarterly dividend of $0.50 per common share, payable on October 15, 2024, to shareholders on record as of September 30, 2024. This increase raises the annual dividend to $2.00 per common share.
The board also approved dividends for various series of preferred stock, all payable on the same date to stockholders of record at the end of September.
This new share repurchase plan supersedes the previous program approved in December 2020. While the company has expressed intentions for capital distribution, it emphasizes that any future dividends or share repurchases are subject to board approval and may be adjusted based on market conditions and other relevant factors.
The announcement follows a forward-looking statement from the company, highlighting that actual results could differ from expectations due to a range of risks and uncertainties. These include, but are not limited to, the company's capital position, financial performance, strategic initiatives, market conditions, and regulatory considerations.
U.S. Bancorp, a financial services holding company with over 70,000 employees and $680 billion in assets as of June 30, 2024, operates through its subsidiary, U.S. Bank National Association. The company provides a broad range of banking, payment, and wealth management services to diverse customer segments.
This news is based on a press release statement and reflects the company's current capital management strategy as it continues to navigate the financial landscape.
In other recent news, U.S. Bancorp reported a slight increase in diluted earnings per share to $0.97 in Q2 2024, and after accounting for a special FDIC assessment, the adjusted earnings per share stood at $0.98. The bank also reported growth in net interest income and fee income, and a rise in return on tangible common equity to 18.6% on an adjusted basis. Additionally, U.S. Bancorp completed the acquisition of Salucro Healthcare Solutions LLC, a healthcare financial technology company specializing in patient payments and billing.
On the regulatory front, US regulators are expected to introduce significant revisions to bank capital rules, potentially easing the market-risk requirement for the nation's largest banks. Piper Sandler maintained a Neutral rating on U.S. Bancorp, with a steady price target of $47.00, focusing on the upcoming investor day hosted by the bank.
These recent developments highlight U.S. Bancorp's strategic plans for growth and stable financial position. The bank anticipates stable net interest income in Q3 with modest loan growth and expects mid-single-digit growth in non-interest income for the full year. CEO Andrew Cecere highlighted the bank's focus on investing in the business, dividends, and buybacks.
InvestingPro Insights
U.S. Bancorp's (NYSE:USB) recent announcement of a new share repurchase program and a dividend increase is a reflection of its consistent shareholder return strategy. InvestingPro data highlights a few key metrics that provide a deeper understanding of the company's financial health and outlook. The company's market capitalization stands at a robust $69.83 billion, and it boasts a Price/Earnings (P/E) ratio of 14.14, which adjusts to a slightly lower 13.04 when considering the last twelve months as of Q2 2024.
Investors may find U.S. Bancorp's shareholder yield particularly attractive, as the company has a notable history of increasing its dividend, doing so for 13 consecutive years. In fact, it has maintained dividend payments for an impressive 54 years, underscoring its commitment to returning value to shareholders. Moreover, the dividend yield as of the latest data was 4.38%, with a dividend growth of 2.08% over the last twelve months. The InvestingPro Tips further reinforce the company's strength, noting its status as a prominent player in the Banks industry and its strong return over the last three months, with a price total return of 15.35%.
While U.S. Bancorp's gross profit margins are identified as weak among the InvestingPro Tips, the company's operating income margin stands at a healthy 31.46% for the last twelve months as of Q2 2024. This suggests efficient management and profitability, which is further substantiated by analysts' predictions that the company will remain profitable this year, a continuation from its profitability over the last twelve months.
For those interested in further analysis and tips, InvestingPro offers additional insights on U.S. Bancorp, which can be accessed through the dedicated page at https://www.investing.com/pro/USB. Currently, there are more tips available, providing a comprehensive view of the company's performance and potential investment opportunities.
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