U.S. Bancorp's ratings are based on the company's level of business diversity, reflected in its revenue stream and operating earnings. The firm emerged from Firstar Corp.'s acquisition of the former U.S. Bancorp, which closed in first-quarter 2001. The combination of the two banks' complementary franchises, which involved extensive geographic, revenue, and asset diversification, affords a broad measure of operational stability. The retail banking strength of Firstar complements the commercial banking lines and nonbanking subsidiaries of the former U.S. Bancorp. While merger-related charges continue to diminish net income, core operating profitability remains strong and well diversified. Operating efficiencies are still an underlying strength of core profitability. Credit costs are higher in 2001 year-to-date, in part reflecting an alignment of credit risk
