U.s. Bancorp · NYSE:USB
U.s. Bancorp — UBS 2009 Global Financial Services Conference
39 slides from U.s. Bancorp's conference presentation, May 13, 2009
Slide 1: UBS 2009 Global Financial Services Conference
UBS 2009 Global Financial Services Conference Richard K. Davis Chairman, President and CEO May 13, 2009
Slide 2: Forward-looking Statements
2 Forward-looking Statements 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 statements about beliefs an
Slide 3: U.S. Bancorp Overview
3 U.S. Bancorp Overview Financial Strength Capital Profitability Credit Quality Focusing on the Future Growth Initiatives Customer Service
Slide 4: U.S. Bancorp Businesses
U.S. Bancorp Businesses Asset Size $264 billion Deposits $163 billion Loans $184 billion Customers 15.8 million Market Capitalization* $36 billion Founded 1863 Bank Branches 2,847 ATMs 5,183 * As of May 8, 2009 Regional Consumer and Business Banking Wealth Management National Wholesale Banking Trust
Slide 5: Total Assets and Market Value
Total Assets and Market Value Assets U.S. Rank Company $Billions 1 Bank of America $2,322 2 J.P. Morgan 2,079 3 Citigroup 1,823 4 Wells Fargo 1,286 5 PNC 286 6 U.S. Bancorp 264 7 SunTrust 179 8 Capital One 177 9 BB&T 143 10 Regions 142 Market Value U.S. Rank Company $Billions 1 J.P. Morgan $146 2 We
Slide 6: Revenue Mix By Business Line
Consumer Wholesale PCTAM Payments Revenue 41 19 13 27 2004 2005 2006 2007 2008 1Q09 Fee Income 0.441 0.465 0.51 0.52 0.5 0.49 Business Line Diversification Consumer 40% Wealth Mgmt 13% Wholesale 20% Payments 27% Full year 2008 Excluding securities gains (losses) net Revenue Mix By Business Line Fee
Slide 7: U.S. Bancorp Overview: Capital
7 U.S. Bancorp Overview Financial Strength Capital Profitability Credit Quality Focusing on the Future Growth Initiatives Customer Service
Slide 8: Supervisory Capital Assessment Results: Resources to Absorb Losses
8 Supervisory Capital Assessment Results USB Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Resources 0.059 0.055 0.054 0.05 0.049 0.046 0.038 0.029 0.028 0.02 Resources to Absorb Losses (Preprovision Income) to Risk-Weighted Assets USB vs Peer Banks Source: Supervisory Capital Asses
Slide 9: Supervisory Capital Assessment Results: Total Loan Loss Rates
9 Supervisory Capital Assessment Results USB Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Resources 0.078 0.083 0.085 0.086 0.088 0.09 0.091 0.1 0.1 0.105 Total Loan Loss Rates USB vs Peer Banks Source: Supervisory Capital Assessment Program: Overview of Results, May 7, 2009 Superv
Slide 10: Supervisory Capital Assessment Results
10 Supervisory Capital Assessment Results USB has more than sufficient capital to withstand the Federal Reserve's "More Adverse" scenario USB believes its ending capital position would be more positive than projected by the Federal Reserve Strong proforma capital position will allow USB to withstand
Slide 11: Key Rationale for Capital Raise
11 Key Rationale for Capital Raise May 11 offering $2.5 billion of common stock $1.0 billion of unsecured senior notes (non-guaranteed) (Tightest 5-year unsecured spread year-to-date @ 5-year Treasury + 2.15%) Positions USB to repay TARP capital in consultation and with approval of regulators Full i
Slide 12: Strong Capital Foundation
12 Strong Capital Foundation Proforma capital raise and TARP redemption with warrant repurchase as of 3/31/09 Tangible common equity equals common shareholders' equity less goodwill and intangible assets (excluding MSR) Tier 1 Common equals Tier 1 less Trust Preferred, Preferred Equity and Minority
Slide 13: Industry Leading Capital Generation
13 Industry Leading Capital Generation Return on Tangible Equity Full Year 2008 USB Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 ROE 0.23 0.21 0.14 0.08 0.08 0.07 0.06 Source: SNL; NA = negative return Peer Banks: BAC, BBT, FITB, JPM, KEY, PNC, RF, STI, USB and WFC Net income adjus
Slide 14: Debt Ratings
As of 5/8/09 Peer Banks: BAC, BBT, FITB, JPM, KEY, PNC, RF, STI, USB and WFC Debt Ratings Financial Strength Capital
Slide 15: Performance Metrics
15 Performance Metrics Source: company reports Peer Banks: BAC, BBT, FITB, JPM, KEY, PNC, RF, STI, USB and WFC Financial Strength Profitability
Slide 16: 1Q09 Highlights
16 1Q09 Highlights Net income of $529 million or $0.24 per share Strong core business trends Record net revenue of $3.9 billion Record mortgage banking activity 11.1% average loan growth excluding acquisitions 12.3% average deposit growth excluding acquisitions 45.8% efficiency ratio Credit trends i
Slide 17: Revenue Growth - Reported and Core
17 Revenue Growth - Reported and Core 9.8% 15.6% 16.7% [ ] [ ] 1Q08 2Q08 3Q08 4Q08 1Q09 Reported 3874 3800 3379 3624 3883 Core 3695 3863 3829 3839 3989 USB Record Revenue 1Q09 $ in millions Taxable-equivalent basis Year-Over-Year Core Growth 9.1% 9.4% 7.7% 4.4% 8.0% Significant items excluded for co
Slide 18: Loan and Deposit Growth
Loan and Deposit Growth 18 $ in billions 1Q08 2Q08 3Q08 4Q08 1Q09 Loans 155.2 163.1 166.6 177.2 185.7 Deposits 130.9 135.8 133.5 144.5 160.5 Average Balances Year-Over-Year Growth 12.9% $166.6 17.0% $177.2 19.6% $185.7 7.3% $155.2 12.0% $163.1 12.1% $133.5 15.2% $144.5 22.7% $160.5 8.4% $130.9 14.1%
Slide 19: Credit Quality Consistently Better Than Peers
1Q08 2Q08 3Q08 4Q08 1Q09 Charge-off Ratio 0.0076 0.0098 0.0119 0.0142 0.0172 NPA Ratio 0.0053 0.0068 0.0088 0.0114 0.0156 Strong credit quality a result of: Conservative approach to risk management Diversification of portfolio by industry, geography and customer segment 19 Credit Quality Consistentl
Slide 20: Adequate Reserves for Current Environment
20 Adequate Reserves for Current Environment 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Allowance 2260 2243 2448 2648 3004 3575 Provision Exceeding NCO's 0 192 200 250 635 530 Provision/NCO's 1 1.66 1.51 1.5 2 1.67 $ in millions Allowance for Credit Losses Allowance Provision Exceeding NCO's Provision/NCO's Fina
Slide 21: Credit Quality
21 Credit Quality Credit quality positively impacted by: Conservative approach to risk management Diversification of portfolio by industry, geography and customer segments Predominantly prime-based residential mortgage and home equity Direct-to-consumer home equity origination model Limited concentr
Slide 22: Credit Quality: Total Loan Portfolio
22 Credit Quality As of 3/31/09 Total Loan Portfolio Size - $184 Billion Well balanced portfolio between Commercial and Consumer loans diversifies risk Commercial Commercial Real Estate Residential Mortgages & Home Equity Consumer Credit Cards Retail Covered Total Loans 30 18 24 7 15 6 Commercial 30
Slide 23: Commercial Loans
23 Commercial Loans Commercial Services & Supplies 8% Consumer Discretionary 19% Consumer Staples 4% Energy 4% Financials 11% Health Care 6% Info Tech 2% Materials 4% Private Investors 2% Real Estate 7% Transportation 3% Agriculture 4% Capital Goods 8% All Other 18% As of 3/31/09 Commercial Loan Por
Slide 24: Commercial Real Estate
Commercial Real Estate Commercial Real Estate Portfolio Size - $34 Billion Balance of the portfolio is well-diversified by property type, with over one third owner occupied Residential Construction portfolio showing stress - $3.0 billion portfolio Limited condo exposure - $0.7 billion 24 Owner Occup
Slide 25: Residential Mortgage & Home Equity
25 Residential Mortgage & Home Equity Residential Mtg & Home Equity Portfolio Size - $43 Billion Credit trends continue to show strong credit quality in the traditional portfolio Stress primarily in the Consumer Finance Division portfolio 1Q 08 2Q08 3Q08 4Q08 1Q09 Total 0.0073 0.0113 0.0107 0.0111 0
Slide 26: Consumer Credit Cards
26 Consumer Credit Cards Credit Cards Portfolio Size - $14 Billion Growth and credit quality within the portfolio are strong Prime-based portfolio with significant co-brand and affinity relationships Consistently rank in the top of the peer group with net charge-off rates below the industry average
Slide 27: Retail Auto Leasing and Other Retail
Automobile Retail Leasing Installment Student Revolving Credit Other 9030 5075 5443 5101 3238 27 Other Retail & Retail Auto Leasing Other Retail & Retail Auto Leasing Portfolio Size - $28 Billion Retail auto leasing - high quality portfolio (average FICO 760): end of term lease valuations are improv
Slide 28: High Quality Securities Portfolio
28 High Quality Securities Portfolio Government-Backed or Issued Mortgage-Backed SIV Preferred Stock & Hybrids Revenue 85 8 3 4 Government- Backed or Issued 85% Securities Portfolio $39 Billion Non-Agency MBS 8% Preferred Stock & Hybrid / Other 4% 85% Government-backed or issued - FNMA / FHLMC / GNM
Slide 29: U.S. Bancorp Overview: Growth Initiatives
29 U.S. Bancorp Overview Financial Strength Capital Profitability Credit Quality Focusing on the Future Growth Initiatives Customer Service
Slide 30: Building Deeper Relationships
30 Enterprise Revenue Office Corporate Liquidity Services Referrals to Wealth Mgmt Industry Specific Solutions Integrated Payments Delivery Relationship Review Collaboration Consumer Package Highlights > 45% of new DDA customers are selecting a Consumer Package > 60% are choosing higher-value Gold o
Slide 31: Wealth Management
31 Wealth Management Old: Lack of Clear Coordination New: Single Point of Contact Client Planning Services Brokerage Insurance Business Banking Investment Management Mortgage Personal Trust Private Banking Outside Advisors Team Leader High Net-Worth Service Delivery Model
Slide 32: Downey Savings & Loan / PFF Bank & Trust
32 Downey Savings & Loan / PFF Bank & Trust DSL Branches USB Branches PFFB Branches Expands the depth and breadth of our distribution system in one of the fastest growing regions within our footprint $17 billion in assets; $12 billion in deposits 208 branches in California and 5 branches in Arizona
Slide 33: First Bank of Idaho
33 First Bank of Idaho Deposit-only acquisition through the FDIC to purchase First Bank of Idaho and First Bank of Tetons (both subsidiaries of SunValley Bancorp) Bank has seven branches in the ski resort communities of Wood River Valley, ID, Teton Valley, ID and Jackson, WY Acquired approximately $
Slide 34: Customer Service - Goal to be #1
34 Customer Service - Goal to be #1 Source: U.S. Bank Branch Loyalty Study Market Probe Top Box Scores 1Q09 (3 month average Jan/Feb/Mar) Consumer Bank Loyalty Monthly survey, measuring loyalty at branch level Improved to a record 71.4% loyalty in 1Q09 - 9 or 10 rating Focus on improving problem res
Slide 35: Award Winning Customer Experience
Highest ranked commercial bank! Greatest year-over-year improvement - 18% improvement in 1 year! Outperformed all major competitors Customer Experience Study measures: "Usefulness" "Ease of use" "Enjoyability of experiences" 35 Award Winning Customer Experience Forrester 2008 Customer Experience Stu
Slide 36: Focusing on the Future - Well Positioned
36 Focusing on the Future - Well Positioned Revenue initiatives launched in 3Q07 expected to add $750 million in annual revenue at full run rate by 2011 Expanded National Corporate Banking capabilities, rebranded Wealth Management and broadened mortgage banking platform Well positioned to act on low
Slide 37: Investment Highlights
37 Investment Highlights Industry leading financial performance Advantageous mix of fee-based businesses Benefiting from a "flight to quality" Conservative approach to risk management leading to differentiated credit quality Strong capital and capital generation Positioned for long-term growth and o
Slide 38: U.S. Bancorp
U.S. Bancorp OPEN uSibamke Now
Slide 39: UBS 2009 Global Financial Services Conference
UBS 2009 Global Financial Services Conference Richard K. Davis Chairman, President and CEO May 13, 2009
US Bancorp \de\ — UBS 2009 Global Financial Services Conference on 6ix