U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q1 2024 Earnings Presentation
32 slides from U.s. Bancorp's earnings presentation, Apr 17, 2024
Slide 1: U.S. Bancorp 1Q24 Earnings Conference Call
April 17, 2024 U.S. Bancorp 1Q24 Earnings Conference Call U.S. Bank | Confidential 1
Slide 2: 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: This presentation contains forward-looking statements about U.S. Bancorp. Statements that are not historical or current facts, including st
Slide 3: 1Q24 Highlights
1Q24 Highlights Reported Adjusted 1 ▪ Strong financial performance $0.78 | $0.90 › Highly diversified and sustainable fee revenue Earnings per share streams represents ~40% of total net revenue Reported 1 Adjusted 1 ▪ Prudent expense management 15.1% | 17.4% › Operational efficiency supports ongoing
Slide 4: Performance Ratios
Performance Ratios Return on Return on Return on Efficiency Ratio1 & Average Assets Average Common Equity Tangible Common Equity1 Net Interest Margin 2 1 1 1.15% 1 24.3% 15.7% 1 0.99% 1 1 1.03% 0.93% 12.9% 1 22.0% 19.6% 14.1% 75.9% 1 1 11.6% 17.4% 66.4% 63.2% 0.81% 1 1 15.1% 1 61.1% 62.5% 10.0% 59.8
Slide 5: 1Q24 Highlights - Details
1Q24 Highlights - Details Income Statement Credit Quality Adjusted Reported Adjusted 1 change vs. Change vs. 1 1 $ in millions, except EPS 1Q24 1Q24 4Q23 1Q23 $ in millions 1Q24 4Q23 1Q23 2 Net interest income $4,015 $4,015 (3.1) % (14.0) % Nonperforming assets $1,786 19.5 % 51.2 % Noninterest incom
Slide 6: Sustainable Earnings Power
Sustainable Earnings Power Strong annualized fee income generated by our diversified business model supports our short- and long-term growth objectives Fee income represents 40% of 26% U.S. Bancorp total net revenue1 37% As a % of Total Net Revenue1 Fee revenue differentiators with national reach 37
Slide 7: Our Payments Ecosystem is a Key Differentiator
Our Payments Ecosystem is a Key Differentiator Demonstrated business banking revenue and relationship growth Business Banking Revenue1 3-year Medium Cumulative rates term Payments Ecosystem +25%-30% h~30% $3.6B Opportunity $2.7B FY 2020 FY 2023 Business Banking Relationships2 3-year Medium Cumulativ
Slide 8: 1Q24 Earnings Summary – Detail
1Q24 Earnings Summary – Detail Excluding Notable Items2 1Q24 % Change 1Q23 4Q23 Notable vs 4Q23 vs 1Q23 2 $ in millions, except EPS Reported Reported Reported Items Adjusted Adjusted Adjusted Net Interest Income $4,634 $4,111 $3,985 $— $ 3,985 (3.1) % (14.0) % Taxable-equivalent Adjustment 34 31 30
Slide 9: Balance Sheet Summary
Balance Sheet Summary Effective balance sheet management and continued consumer deposit growth Total Average Loan Balance Total Average Deposits $377 $373 $371 $512 $503 $503 3Q23 4Q23 1Q24 3Q23 4Q23 1Q24 Highlights Consumer Deposit Growth (Avg.) ▪ Average loan decline driven by slower industry-wide
Slide 10: Net Interest Income
Net Interest Income 1Q24 4Q23 1Q23 Loans $5,712 $5,742 $5,277 Loans held for sale 37 36 31 Investment securities 1,175 1,182 1,074 Other interest income 840 803 582 Total interest income $7,764 $7,763 $6,964 Deposits $2,884 $2,751 $1,505 Short-term borrowings 270 332 449 Long-term debt 625 569 376 T
Slide 11: Noninterest Income
Noninterest Income 1Q24 4Q23 1Q23 Payments $977 $1,027 $936 Trust & Inv Mgmt 641 621 590 Service Charges 315 324 324 Commercial Products 388 326 334 Mortgage 166 137 128 Other 213 303 195 1 Noninterest Income, Adjusted $2,700 $2,738 $2,507 1 Notable Items — (118) — Noninterest Income, Reported $2,70
Slide 12: Noninterest Expense
Noninterest Expense 1Q24 4Q23 1Q23 Compensation & Benefits $2,691 $2,509 $2,646 Technology & Communications 507 513 503 Occupancy & Equipment 296 316 321 Professional Services 110 158 134 Marketing/Business Development 136 196 122 All Other 454 512 585 1 Total Noninterest Expense, Adjusted $4,194 $4
Slide 13: Credit Quality
Credit Quality Trends reflect normalization in the credit environment and expected CRE stress Allowance for Credit Losses Net Charge-off and Nonperforming Assets by Loan Category, 1Q24 Change vs. Amount Reserve 1Q24 4Q23 1Q23 ($B) (%) Non-performing Assets Commercial $2.2 1.6% Balance $1,786 $292 $6
Slide 14: Capital Position
Capital Position $ in billions 1Q24 4Q23 3Q23 2Q23 1Q23 Total U.S. Bancorp shareholders’ equity $55.6 $55.3 $53.1 $53.0 $53.0 Basel III Standardized Approach 1 Common equity tier 1 capital ratio 10.0 % 9.9 % 9.7 % 9.1 % 8.5 % Tier 1 capital ratio 11.6 % 11.5 % 11.2 % 10.6 % 10.0 % Total risk-based c
Slide 15: Guidance – 2Q and FY 2024
Guidance – 2Q and FY 2024 2Q 2024 Guidance Net interest income1 Relatively stable vs. Q1 2024 of ~$4.0B FY 2024 Guidance Prior Revised Net interest income1 $16.6B+ $16.1 to $16.4B Total noninterest income, Mid-single digit growth as adjusted2 vs. FY 2023 of ~$10.8B Total noninterest expense, as adju
Slide 16: Appendix
Appendix U.S. Bancorp 16
Slide 17: Average Loans
Average Loans $386.8 Average % of Average Change vs. 1Q 2024 Balance Total 4Q23 1Q23 $372.9 $371.1 Commercial $131 35% (0.3) % (3.6) % Commercial Real Estate 53 14% (1.5) (4.6) Residential Mortgages 116 31% 0.4 (0.6) Credit Card 28 8% 0.7 9.3 Other Retail 43 12% (2.9) (18.5) Total Loans $371 (0.5) %
Slide 18: Average Deposits
Average Deposits Average Average Change vs. 1Q 2024 Balance 4Q23 1Q23 $510.3 $502.8 $503.1 Noninterest-bearing deposits $85 (6.4) % (34.6) % Money market savings 196 4.9 33.7 Interest checking 125 (1.9) (3.4) Savings accounts 42 (6.9) (39.5) Time deposits 55 4.6 55.5 Total interest-bearing deposits
Slide 19: Payment Services
Payment Services Payment Fees as a % of Total Net Revenue (1Q24) Highlights Total payment fee revenue grew 4% year-over-year due to 6.0% continued strength in consumer and business spend activities ▪ Total credit card fee revenue improved ~13% YoY on 5.8% higher sales volume. 85.5% 2.7% ▪ Merchant p
Slide 20: Credit Quality – Commercial
Credit Quality – Commercial Average Loans ($M) and Net Charge-offs Ratio Key Statistics $ in millions 1Q23 4Q23 1Q24 Linked Quarter Growth Average Loans $135,683 $131,096 $130,767 2.1% 1.8% (2.4)% (2.7)% (0.3)% 30-89 Delinquencies 0.33 % 0.35 % 0.23 % $138,085 90+ Delinquencies 0.05 % 0.09 % 0.08 %
Slide 21: Credit Quality – Commercial Real Estate
Credit Quality – Commercial Real Estate Average Loans ($M) and Net Charge-offs Ratio Key Statistics $ in millions 1Q23 4Q23 1Q24 Linked Quarter Growth Average Loans $55,595 $53,825 $53,037 21.6% (1.2)% (1.2)% (0.8)% (1.5)% 30-89 Delinquencies 0.13 % 0.10 % 0.04 % 90+ Delinquencies 0.01 % 0.01 % —% $
Slide 22: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($M) and Net Charge-offs Ratio Key Statistics $ in millions 1Q23 4Q23 1Q24 Linked Quarter Growth Average Loans $116,287 $115,196 $115,639 19.8% 1.1% (2.5)% 0.5% 0.4% 30-89 Delinquencies 0.13 % 0.15 % 0.12 % 90+ Delinquencies 0.08 % 0.12 % 0.12 % $1
Slide 23: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($M) and Net Charge-offs Ratio Key Statistics $ in millions 1Q23 4Q23 1Q24 Linked Quarter Growth Average Loans $25,569 $27,753 $27,942 30-89 Delinquencies 1.10 % 1.42 % 1.40 % 1.6% 1.9% 3.2% 3.2% 0.7% 90+ Delinquencies 1.00 % 1.31 % 1.42 % $27,753 $27,942 N
Slide 24: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($M) and Net Charge-offs Ratio Key Statistics $ in millions 1Q23 4Q23 1Q24 Linked Quarter Growth Average Loans $53,616 $44,986 $43,685 (9.0)% (2.7)% (11.0)% (3.0)% (2.9)% 30-89 Delinquencies 0.48 % 0.63 % 0.55 % 90+ Delinquencies 0.12 % 0.15 % 0.15 % $53,6
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended (Dollars in Millions, Unaudited) March 31, 2024 December 31, 2023 March 31, 2023 Net interest income $ 3,985 $ 4,111 $ 4,634 Taxable-equivalent adjustment (1) 30 31 34 Net interest income, on a taxable-equivalent basis 4,015 4,142 4,668 Net interest inc
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended (Dollars in Millions, Unaudited) March 31, 2024 December 31, 2023 March 31, 2023 Net income applicable to U.S. Bancorp common shareholders $ 1,209 $ 766 $ 1,592 Intangibles amortization (net-of-tax) 115 123 126 Net income applicable to U.S. Bancorp comm
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended (Dollars in Millions, Unaudited) June 30, 2023 March 31, 2023 Net charge-offs $ 649 $ 373 Less: Notable items (2) 309 91 Net charge-offs, excluding notable items 340 282 Annualized net charge-offs, excluding notable items (a) 1,364 1,144 Average loan ba
Slide 28: Non-GAAP Financial Measures
Non-GAAP Financial Measures March 31, December 31, September June 30, March 31, (Dollars and Shares in Millions Except Per Share Data, Unaudited) 2024 2023 30, 2023 2023 2023 Total equity $ 56,033 $ 55,771 $ 53,578 $ 53,484 $ 53,454 Preferred stock (6,808) (6,808) (6,808) (6,808) (6,808) Noncontroll
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures Year Ended (Dollars in Millions, Unaudited) December 31, 2023 Total noninterest income $ 10,617 Less: notable items (2) (140) Total noninterest income, as adjusted 10,757 Noninterest expense $ 18,873 Less: notable items (2) 1,853 Total noninterest expense, as adjusted $ 1
Slide 30: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended ($ in millions) March 31, 2024 Line of Business Financial Performance Net Revenue Wealth, Corporate, Commercial and Institutional Banking $ 2,378 Consumer and Business Banking 2,437 Payment Services 1,715 Treasury and Corporate Support 185 Total Company
Slide 31: Notes
Notes 1. Based on a federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes. 2. Notable items of $265 million ($199 million net-of-tax) for the three months ended March 31, 2024 included $155 million of merger and
Slide 32: U.S. Bancorp
U.S. Bancorp 32