Loan Distribution

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Financial Sector
October 9, 2007
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Warren Buffett

• In 1919 Coca-Cola went public and sold shares for
  40. If you bought one of these shares in 1919
  for 40, it would now be worth 2.1 million.
  This is simply a 15.8 annual compounding rate

• Warren Buffet was asked why he drove a crappy
  car, when he could clearly afford the mere
  20,000 for a new car. Warren knew that he
  earned an average compounding return of 23 on
  his investments. This means that in 20 years,
  that 20,000 would be 9,958,257. To Warren
  9,958,257 was too much to pay for a new car.

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50 Cent
Get rich or die tryin
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US Bancorp NYSE USB
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• The Company
• What do they do?
• Why invest in US Bank?
• Why now?
• The Stock
• Technical analysis
• Value for shareholders
• Ratios and valuations

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I. The Company
Ranking U.S. Bank is 6th largest U.S.
commercial bank Market Cap 58.20 Billion
Customers 14.2 million Primary banking region
24 states Bank branches 2,472 ATMs 4,841 NYSE
symbol USB
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Loan Distribution
I. The Company
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I. The Company
Banking Region (24 States)
California Colorado Illinois Minnesota Missouri
Ohio Oregon
Washington Wisconsin Iowa, Kansas, Nebraska,
North Dakota, South Dakota Arkansas, Indiana,
Kentucky, Tennessee Idaho, Montana,
Wyoming Arizona, Nevada, Utah
Amount of business in banking region
Residential Mortgages and Retail
Loans 83.1 Realestate Investment
92 Commercial Loans 79.2
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II. The Stock

• General Things to Consider
• Dividend of 4.8
• US Bank in middle of 150 million share buyback
  program
• Financials very cheap right now
• Fed Rate cuts
• US Banks 6th largest bank, but region is only 24
  states
• Financials

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II. The Stock
FINANCIAL HIGHLIGHTS
Total Assets 219B Total Liabilities
198B Debt to Total Assets Ratio .90

• Total Cash 6.53B
• Total Debt 73.11B
• Gross Profit 16.72B

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EPS History
II. The Stock
EPS - 5 Yr. Growth Rate 27.12 Dividend 5 Year
Growth Rate 13.36 Return On Equity (TTM)
23.86
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6 Largest Banks
II. The Stock
USB trading at discount considering its
potential
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Why now?

• Sub-prime financial fall out
• Financials selling for very cheap (PEs)
• Feds last (and possibly future) easing of rates
• US Bank is undervalued
• 6th largest bank in country
• Room for expansion
• 150 million share repurchase plan
• 3rd quarter earnings release October 16th

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Why now?
Business Cycle
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Why now?
5 Yr. chart
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Why now?
2 Yr. chart
Price target
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Price Target32.50

• OPPURTUNITIES
• Earnings Oct. 16??
• Financial sector still shaky
• Fed rate cuts ahead??
• Housing market improvement??

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SUMMARY

• The Company

The Opportunity
The Stock