It was a simpler time, when digital footprint, tokenization and cybersecurity were only science-fiction terms. Transactions were passed through my window, not through fiber optics. Real-time speed was the time it took bills and payments to go from mailbox to mailbox via the U.S. Postal Service.
Times have changed. The essence of the relationship between bankers and customers, however, has not: do the right thing and re-earn their trust today.
Preserving, protecting and nurturing trust has been the centerpiece of my professional journey and the platform on which U.S. Bancorp has created shareholder value for decades. Now, as I wind down my 41-year career as a banker — in a very complex, fast-paced, digital age — it is clear that preserving, protecting and nurturing trust is more important than ever for U.S. Bank — and the entire banking industry.
I am proud that every morning, our 73,000 employees start their days by opening their figurative teller windows — together. This togetherness in purpose is our formula that we call “one U.S. Bank” — and it is the foundation for how we generate long-term growth, help customers achieve financial security, revitalize communities, embrace sustainable business practices and, ultimately, become the most trusted choice for all our stakeholders.
Do the right thing and re-earn their trust today. It’s a formula that will never change at U.S. Bank.
Operating as one U.S. Bank is not a fancy business model or a new centralization strategy — it is merely a crisp expression of the culture we are building across our enterprise.
Grounded in ethics and integrity, our one U.S. Bank philosophy drives our focus on achieving a strong financial performance, delivering a unified customer experience, getting better every day and becoming the most trusted choice.
This alignment complements our diversified business model, where our four distinct, core businesses — Consumer & Small Business Banking, Wholesale Banking, Payment Services and Wealth Management & Securities Services — come together as one strong enterprise.
And, our ability to operate as one U.S. Bank is a primary reason we are able to deliver a consistent, predictable and repeatable financial performance year after year.
In my final full year as CEO, I am proud of our outstanding financial performance in 2016, with record net income, earnings per common share and revenue.
In a challenging calendar year in which the environment was often unpredictable, we once again delivered industry-leading return on average assets (ROA), return on average equity (ROE) and efficiency ratio — number one in each metric compared to our peers. In addition, we returned 79 percent of our earnings to shareholders through share buybacks and dividends, increasing our dividend by nearly 10 percent.
It is the kind of consistent, predictable and repeatable financial performance our shareholders have learned to expect from U.S. Bank and this management team — and the kind of performance I expect under Andy Cecere’s leadership when he succeeds me as CEO at our annual meeting.
Andy and I have partnered together for the past 10 years to lead this company and he is one of the strongest and most capable leaders in the banking industry. He has tremendous intellect and business insight, which will help him maintain U.S. Bank’s industry-leading financial strength. He also has an innate curiosity that will challenge the organization to focus on innovations that improve the customer experience.
With an intense focus on our customers’ experiences, we believe the fundamental elements of our core businesses are solid and we are well positioned for growth in 2017 and beyond.
When I was a teller, it was my job to stand and wait for customers to come to me. Not anymore. Today, we believe in making the bank available to our customers where, when and how they prefer — and that requires multiple channels, including mobile devices, personal computers, ATMs, the phone and our bank branches.
We know customers are doing more transactions online and through mobile platforms. Currently, our non-branch channels have approximately 82 million interactions a month. We make all those channels available to our customers — and they use what is most attractive and convenient for them.
This is what customers expect from us today: a seamless experience, where U.S. Bank adjusts to them throughout their financial lifetimes; from first job to first house, from retirement planning to estate planning and from a new small business to a growing large business.
We believe there’s tremendous value in having a relationship with a bank you can rely on as needs change over a lifetime — a relationship that gets better every day.
Continuous improvement — that’s our goal.
Every day, U.S. Bank wants to be a little better at what we do — from the top of the organization down. We want to grow revenue a little faster, when prudent; we want to operate more efficiently, when possible; and we want to be more customer-focused, always.
So, while we were generating industry-leading returns in 2016, we also made important investments in our long-term growth strategy, especially initiatives designed to get better every day.
Faster, easier and safer payments are one of those areas. In early 2016, U.S. Bank was the first bank to launch on the ZelleSM payment platform, which is owned by a consortium of banks. Zelle will reach more than 76 million consumers in 2017 through the mobile banking apps of the financial institutions in the network.
And, this is precisely what American consumers are demanding today.
In an era when everything happens instantly, the banking industry is leading the way in safe, secure and interconnected payments. As more and more banks join the Zelle platform, this innovation will be a cornerstone for customers’ preferred way to engage with us.
Willingly and transparently strengthening our customer interfaces is one example of how we get better every day and strengthen our trust relationships.
More than any other year in recent history, U.S. Bank was recognized for the overall quality of its performance and achievements in 2016.
We are always proud of our consistently excellent financial performance; however, we are particularly proud of how our people strive to be the most trusted choice every day and how that comes to life in so many different ways.
For the third year (including 2017), the Ethisphere® Institute named U.S. Bank to its World’s Most Ethical Companies® list. For the tenth year, the Ponemon Institute named U.S. Bank the Most Trusted Bank. For the tenth year, U.S. Bank received a perfect score in the Corporate Equality Index and was named a Best Place to Work by the Human Rights Campaign Foundation. For the seventh year, Fortune magazine named U.S. Bank the number one superregional bank. And for the first time, Money® magazine named U.S. Bank the Best Big Bank in the country.
We also care deeply about promoting sustainable business practices while supporting economic growth — it is one of the reasons why we invested more than $2.6 billion in environmentally responsible business opportunities in 2016.
We are proud of these achievements and commitments because they reflect our committed employees and our culture. Our success in 2016 was a result of the superlative effort of our people working hard as one U.S. Bank — and we did it with ethics and integrity.
"Grounded in ethics and integrity, our one U.S. Bank philosophy drives our focus on achieving a strong financial performance, delivering a unified customer experience, getting better every day and becoming the most trusted choice."
I have always been a big believer in the power of storytelling. Stories capture imaginations. Stories teach lessons. Stories make the complex simple. Stories make everything three-dimensional.
I am intensely proud of the U.S. Bank story.
It is compelling. It is customer focused. It is one of excellence. It is transparent. It is evolving. It is diverse and inclusive. It is about making possible happen. And, it is getting better.
It’s a story built on trust.
I am also deeply proud of my U.S. Bank story. It has been an honor and privilege to serve as CEO of the greatest bank in the world for the past 10 years, and I am grateful that I will continue to serve as Chairman of the Board. As I close the CEO chapter of my U.S. Bank career, let me assure you, the U.S. Bank story is just getting started. Because of the trust that we work to re-earn every single day, we are operating from a position of strength.
Thank you for the support you have shown me over the years, and thank you for your continued trust in the U.S. Bank story. The future is bright for our shareholders, customers, communities and employees.
Trust. It’s still the most important word in banking.
Richard K. Davis
Chairman and Chief Executive Officer
February 23, 2017