U.s. Bancorp · NYSE:USB
U.s. Bancorp — Investor Presentation (August 2017)
26 slides from U.s. Bancorp's investor presentation, Aug 22, 2017
Slide 1: Forward-looking Statements and Additional Information
Forward-looking Statements and Additional Information The following information appears in accordance with the Private Securities Litigation Reform Act of 1995: Today’s presentation contains forward-looking statements about U.S. Bancorp. Statements that are not historical or current facts, including
Slide 2: Agenda
Agenda U.S. Bank Overview Risk Management The Regulatory Environment Top Issues in the Banking Industry
Slide 3: U.S. Bancorp 2Q17 Dimensions
U.S. Bancorp 2Q17 Dimensions As of 6/30/17, except market value as of 7/21/17 NYSE Traded USB Founded 1863 Market Value $88B Branches 3,088 ATMs 4,826 Customers 18.7M Assets $464B Deposits $347B Loans $277B
Slide 4: Industry Position
Industry Position Source: Company reports and Bloomberg Assets and deposits as of 6/30/17, market value as of 7/21/17 Assets Market Value Deposits
Slide 5: Our Business Mix and Product Delivery
Our Business Mix and Product Delivery Payment Services Wealth Management & Securities Services Retail Payment Solutions, Global Merchant Acquiring and Corporate Payment Systems Provides a full suite of payment services to consumers, merchants, corporations and governments – a unique position versus
Slide 6: Revenue Diversification
Revenue Diversification 2Q17 YTD taxable-equivalent basis Business line revenue percentages exclude Treasury and Corporate Support, see slide 27 for reconciliation Payment Services 30% Consumer and Small Business Banking 39% Wholesale Banking 18% Revenue Mix by Business Line Diversification Advantag
Slide 7: Agenda
Agenda U.S. Bank Overview Risk Management The Regulatory Environment Top Issues in the Banking Industry
Slide 8: Critical Bank Treasury Responsibilities
Critical Bank Treasury Responsibilities Optimization Communication Risk Management Asset / Liability Management Optimize Investment Portfolio Issue Debt to Support Loan Growth Business Line Partner Board Committee Communication Rating Agency “Relationship Manager” Liquidity Management Capital Alloca
Slide 9: Industry Enhancements in Capital Management
Industry Enhancements in Capital Management Banking Sector Enhancements: Comprehensive quantitative analysis of capital targets Consideration of stress results into risk/limit structure Capital largely defined as Common Equity Tier 1 Three Lines of Defense central to appropriate challenge of results
Slide 10: Industry Changes in Capital Management
Industry Changes in Capital Management Source: FR Y-9C, SNL Data Peer group includes BAC, BBT, FITB, JPM, KEY, PNC, RF, STI, USB, WFC Peer Median Payout Ratio 410% 390% Payout ratios declined significantly post-crisis, and have yet to return to pre-crisis levels
Slide 11: Industry Changes in Capital Management
Industry Changes in Capital Management Source: FR Y-9C, SNL Data Peer group includes BAC, BBT, FITB, JPM, KEY, PNC, RF, STI, USB, WFC Quality and quantity within the capital stack has improved Peer Median Capital Composition Q1 2007 Q1 2017 Total Capital: $398B Total Capital: $836B
Slide 12: U.S. Bank Capital Management
U.S. Bank Capital Management Based on the Basel III fully implemented standardized approach * Non-GAAP, see slide 26 for calculation Earnings Distribution Target: Reinvest & Acquisitions Dividends Share Repurchases 20 - 40% 30 - 40% 30 - 40% Hypothetical Earnings Distribution Example Dividends 30% R
Slide 13: Industry Enhancements in Liquidity Management
Industry Enhancements in Liquidity Management Banking Sector Focus: Robust liquidity stress scenarios Quality and quantity of high-quality liquid assets dramatically increase Additional data required to monitor liquidity profile in real time Three Lines of Defense central to appropriate challenge of
Slide 14: Industry Changes in Liquidity Management
Q1 2007 Q1 2017 Total Liquidity Sources: $1.0T Total Liquidity Sources: $3.0T Industry Changes in Liquidity Management Peer Median Liquidity Composition Quality and quantity of liquidity has improved Source: FR Y-9C, SNL Data Peer group includes BAC, BBT, FITB, JPM, KEY, PNC, RF, STI, USB, WFC
Slide 15: Interest Rate Risk
Interest Rate Risk Current areas of focus: Deposit behavior post- prolonged low rate environment: Deposit pricing (i.e. betas) Balance outflow and rotation Potential impact of Fed’s reduced balance sheet and rising interest rates Enhancements of behavioral modeling: Deposit modeling for use in Net I
Slide 16: Current Asset Sensitivity and Liquidity Position
Current Asset Sensitivity and Liquidity Position Net Interest Income Sensitivity Reliable source of core deposits Diversified sources of liquidity Excess cash and liquid assets Wholesale funding sources Off-balance sheet capacity Strong LCR Total Available Liquidity ($bn) Well-Balanced Liquidity Pos
Slide 17: Agenda
Agenda U.S. Bank Overview Risk Management The Regulatory Environment Top Issues in the Banking Industry
Slide 18: Current Regulatory Environment
Current Regulatory Environment Current areas of focus: Current environment is complex Multiple new rules over the past decade have created new constraints Structural changes within the Fed and OCC continue to drive headlines More recently, open and productive dialogue is taking place
Slide 19: U.S. Bancorp's Position and Optimal Size
U.S. Bancorp’s Position and Optimal Size Assets G-SIBs TLAC/Bail-in debt requirements Higher capital standards Enhanced supplementary leverage ratio Higher litigation risk Limited acquisition opportunities Relative cost of compliance Sub-optimal efficiency and scale Less capacity to invest Potential
Slide 20: Agenda
Agenda U.S. Bank Overview Risk Management The Regulatory Environment Top Issues in the Banking Industry
Slide 21: Top Issues in the Banking Industry
Top Issues in the Banking Industry The future of branches Omnichannel, digital, mobile Innovation The role of Fintech Payments P2P, B2C, C2B, B2B Cybersecurity Government policies Lending, taxes, regulation Amazon effect Expectations, competition, demographics
Slide 22: Top Issues in the Banking Industry
Top Issues in the Banking Industry © The future of branches + Omnichannel, digital, mobile Amazon effect + Expectations, competition, demographics Payments + P2P, B2C, C2B, B2B (a) Cybersecurity Government policies + Lending, taxes, regulation Innovation * The role of Fintech U.S. BANCORP | 24
Slide 23: Non-GAAP Financial Measures
Non-GAAP Financial Measures (1) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements. (2) Includes net losses on cash flow hedges included in accumulated other comprehensive income (loss) and other adjustments. (3) Includes
Slide 24: Non-GAAP Financial Measures
Non-GAAP Financial Measures ($ in millions) Net Revenue Line of Business Financial Performance 2Q17 YTD Wholesale Banking and Commercial Real Estate 1,669 $ Consumer and Small Business Banking 3,685 Wealth Management and Securities Services 1,177 Payment Services 2,855 Treasury and Corporate Support
Slide 25: U.S. Bancorp Intellisight
U.S. Bancorp Intellisight Investor Presentation August 22, 2017
Slide 26: U.S. Bancorp
U.S. Bancorp Intellisight Investor Presentation August 22, 2017 TBSbancorp Us. ANCOR
US Bancorp \de\ — Investor Presentation (August 2017) on 6ix