U.S. Bancorp Expects Gains to Offset Visa Litigation Charges

U.S. Bancorp (USB) said Friday it would record two Q4 charges: about $215 million, or $0.09/diluted common share, for its portion of the Visa litigation and a valuation loss of $110 million, or about $0.04/share as a result of purchasing certain asset-backed commercial paper holdings from the rated money market funds managed by its subsidiary. As a result of recent guidance from the Security and Exchange Commission accounting staff, U.S. Bancorp and other similarly situated banks are required to recognize the fair value of a contingent obligation for the potential losses arising from this litigation. U.S. Bancorp said it already recorded a Q3 charge for its share of the Visa settlement with American Express. Visa has filed documents in preparation for an initial public offering, anticipated in Q1 of 2008. U.S. Bancorp said it expects its proportionate share of gains will more than exceed the aggregate charge announced Friday and the charge taken in the Q3. Visa hopes to raise $10 billion in its initial public offering next year, and U.S. Bancorp intends to cash in part of its stake in Visa. USB is up 1.36% in mid-day trading.

Sources: Press release, MarketWatch
Additional Reading: U.S. Bancorp: A Solid, Safe Option

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.

Comments

[User 124892]

It looks like US Bank corp, is getting ready to make a grand entry into the Ohio area.
They are one of the few large banks who made money in the fourth quarter.
Look out Key Corp and NCC.
US Bank corp, is getting ready to rope a dope.