U.S. Bancorp Third Quarter Earnings to Include $655 Million Non-Cash Charge Related to Incremental Provision for Loan Loss
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MINNEAPOLIS, Oct. 5 /PRNewswire/ -- U.S. Bancorp (NYSE: USB) today reported that earnings for the third quarter of 2001 will include an incremental provision for loan losses, beyond expected levels, of approximately $655 million after-tax, or $1,025 million pre-tax. This action recognizes the probability that the current economic slowdown will accelerate as a result of the events of September 11, 2001.
Approximately $712 million of the incremental provision, which, in part, recognizes weakness in the airline sector, will increase the allowance for credit losses.
The allowance for credit losses as a percent of period-end loans at September 30, 2001, is expected to be approximately 2.12 percent, compared with 1.45 percent at June 30, 2001. The allowance for credit losses as a percent of nonperforming assets at September 30, 2001, is expected to be approximately 216 percent, compared with 141 percent at June 30, 2001.
Approximately $313 million of the incremental provision will cover an increased level of charge-offs, primarily related to credits in the manufacturing and transportation sectors.
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