U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q4 2020 Earnings Presentation
33 slides from U.s. Bancorp's earnings presentation, Jan 20, 2021
Slide 1: U.S. Bancorp 4Q20 Earnings Conference Call
U.S. Bancorp 4Q20 Earnings Conference Call January 20, 2021 Exhibit 99.2
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: 4Q20 Highlights
4Q20 Highlights * Taxable-equivalent basis; see slide 29 for calculation ** Common equity tier 1 capital to risk-weighted assets, reflecting the full implementation of the current expected credit losses methodology was 9.3% as of 12/31/20. *** Earnings returned (millions) = total common dividends pa
Slide 4: Performance Ratios
Performance Ratios Efficiency Ratio** & Net Interest Margin*** Return on Average Common Equity Return on Tangible Common Equity** Return on Average Assets 1.44%* 14.1%* 18.1%* 60.3% * Excluding notable items; see slides 29 and 30 for calculations ** Non-GAAP; see slides 29 and 30 for calculations **
Slide 5: Digital Engagement Trends
Digital Engagement Trends Three months ended Three months ended * Represents core Consumer Banking customers active in at least one channel in the previous 90 days Total Digital includes both online and mobile platforms
Slide 6: Average Loans
Average Loans -2.8% linked quarter +2.5% year-over-year On a linked quarter basis, average total loans were lower primarily driven by a decline in total commercial loans, reflecting continued paydowns by corporate customers, partially offset by higher residential mortgages given the lower interest r
Slide 7: Average Deposits
Average Deposits +4.2% linked quarter +18.5% year-over-year Interest-bearing Deposits Average noninterest-bearing (NIB) deposits increased on both a linked quarter and year-over-year basis. On a linked quarter basis, the increase was primarily driven by Corporate and Commercial Banking, while increa
Slide 8: Credit Quality
Credit Quality NCO Ratio -8 bps QoQ +6 bps YoY NPAs +2.2% QoQ +56.6% YoY $ in millions
Slide 9: Credit Risk Management – Consistent Underwriting
Credit Risk Management – Consistent Underwriting Allowance for Credit Losses by Loan Class, 4Q20 Key Points Prime-based lender for retail portfolios Investment grade equivalent in commercial portfolios with limited leveraged lending Commercial Real Estate lending is relationship-based with consisten
Slide 10: Credit Risk Management – COVID-19 Impacted Industries
Segments Outstanding Balances ($B) Segment Loans (%) Outstanding Balances ($B) Segment Loans (%) Commercial $0.4 0.4% $0.1 0.1% Commercial Real Estate $0.7 1.6% $0.3 0.8% Residential Mortgages** $4.2 5.5% $2.8 4.2% Credit Cards $0.1 0.4% $0.1 0.4% Other Retail $0.8 1.4% $0.6 1.0% Total $6.2 2.0% $3.
Slide 11: Earnings Summary
Earnings Summary cludi Notable Items $ and shares in rifons, except EPS Reported % Chai Notable items __ 302 aqis 3020 9 | 420 acts | vs. 4019 Net Interest income $3,175 $3,227 $3,207 (16) (1.0) > s- (10) 26 25 24 40 83 : : 83 Net interest income (taxable-equivalent basis) 3201 3.252 3,281 (16) (09)
Slide 12: Notable Items
Notable Items $ in milions, except per share 4Q20 4Q19 Visa derivative liability charge $- ($140) Total noninterest income - (140) Severance charges : 158 Other accruals and charges - 42 Total noninterest expense - 200 Income before taxes - (340) Tax expense (benefit) on notable items - (68) Net inc
Slide 13: Net Interest Income
Net Interest Income Linked Quarter Net interest income decreased, primarily driven by a decline in average loan balances, higher premium amortization expense and lower yields on reinvestments in the investment portfolio, partially offset by the benefit of deposit and funding mix as well as higher lo
Slide 14: Noninterest Income
Noninterest Income -6.0% linked quarter +4.7% year-over-year -1.0% excluding notable items Linked Quarter Payment services revenue decreased, driven by lower credit and debit card revenue and lower merchant processing services revenue due to the timing of stimulus payments through prepaid card proce
Slide 15: Payment Services Revenue
All Other Travel*** (Credit & Debit) Total Payment Services Payment Fees as a % of Net Revenue 2019 4Q20 Merchant Acquiring Retail Payment Solutions Corporate Payment Solutions All Other Revenue Total payments revenue, which includes net interest income and fee revenue, accounted for 27% of FY19 net
Slide 16: Noninterest Expense
Noninterest Expense -0.2% linked quarter -1.1% year-over-year +5.1% excluding notable items Linked Quarter Compensation expense decreased, primarily due to lower business incentives and employee benefits expense decreased, primarily due to lower medical claims expense. Professional services expense
Slide 17: Capital Position
Capital Position * 2020 ratios calculated in accordance with transitional regulatory requirements related to the current expected credit losses methodology ** Non-GAAP; see slide 31 for calculations
Slide 18: Appendix
Appendix U.S. BANCORP | 18
Slide 19: Average Loans
Average Loans vs. 4Q19 Average total loans increased by $7.4 billion, or 2.5% Average residential mortgage loans increased by $6.9 billion, or 9.9% Average commercial loans increased by $2.5 billion, or 2.4% Average credit card loans decreased by $2.2 billion, or 9.0% vs. 3Q20 Average total loans de
Slide 20: Average Deposits
Year-over-Year Growth 6.6% 8.2% 16.8% 15.9% 18.5% Time Money Market Checking and Savings Noninterest-bearing Average Deposits Key Points Average Deposits ($bn) vs. 4Q19 Average total deposits increased by $66.0 billion, or 18.5% Average low-cost deposits (NIB, interest checking, savings and money ma
Slide 21: Credit Quality – Commercial
Credit Quality – Commercial Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm4Q19 3Q20 4Q20 Average Loans$103,911 $115,489 $106,421 30-89 Delinquencies0.30% 0.22%0.31% 90+ Delinquencies0.08%0.06%0.05% Nonperforming Loans0.20% 0.41% 0.36% Linked Quarter Growth 0.2% 2.0% 20.8
Slide 22: Credit Quality – Commercial Real Estate
A&D Const $228 Multi-family $4,073 Retail $226 Residential Construction $2,232 Office $975 Other $2,806 Resi Land $554 $mm4Q19 3Q20 4Q20 Average Loans$39,722$40,929$40,098 30-89 Delinquencies0.09% 0.23%0.47% 90+ Delinquencies0.01%0.00%0.01% Nonperforming Loans0.21% 0.82% 1.14% Performing TDRs*$160 $
Slide 23: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm4Q193Q204Q20 Average Loans$69,909 $75,786 $76,809 30-89 Delinquencies0.22%0.31%0.49% 90+ Delinquencies0.17% 0.15% 0.22% Nonperforming Loans0.34%0.31%0.32% Linked Quarter Growth 1.9% 1.4%
Slide 24: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm4Q193Q204Q20 Average Loans$24,107 $22,052 $21,937 30-89 Delinquencies1.30%0.94%1.04% 90+ Delinquencies1.23%0.91%0.88% Nonperforming Loans0.00%0.00%0.00% Linked Quarter Growth 1.8% (1.1%) (9.8%) 2.
Slide 25: Credit Quality – Home Equity
Credit Quality – Home Equity Average Loans ($mm) and Net Charge-offs Ratio Key Points Linked Quarter Growth (2.4%) (2.5%) (3.0%) (5.8%) (5.4%) Key Statistics Key Statistics $mm4Q193Q204Q20 Average Loans$15,221 $13,551 $12,816 30-89 Delinquencies0.51%0.35%0.55% 90+ Delinquencies0.32%0.37%0.38% Nonper
Slide 26: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm4Q193Q204Q20 Average Loans$8,486 $8,438 $8,299 30-89 Delinquencies0.53%0.38%0.43% 90+ Delinquencies0.05%0.06%0.05% Nonperforming Loans0.15%0.17%0.16% Linked Quarter Growth 0.5% (0.1%) (0.7%) 0.
Slide 27: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm4Q193Q204Q20 Average Loans$33,509 $34,773 $35,928 30-89 Delinquencies0.81%0.51%0.60% 90+ Delinquencies0.13%0.07%0.10% Nonperforming Loans0.11%0.10%0.09% Linked Quarter Growth 0.2% 0.1% 0.0% 3.6%
Slide 28: Credit Quality – Auto Loans
Credit Quality – Auto Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm4Q193Q204Q20 Average Loans$19,434 $18,823 $19,390 30-89 Delinquencies1.06%0.68%0.83% 90+ Delinquencies0.10%0.05%0.11% Nonperforming Loans0.15%0.15%0.13% Direct: 4% Wtd Avg FICO: 758 NCO: 0.33% Indi
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures (4), (5), (6), (7) – see slide 32 for corresponding notes
Slide 30: Non-GAAP Financial Measures
Non-GAAP Financial Measures (1), (7) – see slide 32 for corresponding notes
Slide 31: Non-GAAP Financial Measures
Non-GAAP Financial Measures * Preliminary data. Subject to change prior to filings with applicable regulatory agencies. (1), (2), (3) – see slide 32 for corresponding notes
Slide 32: Notes
Notes Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements. Includes the estimated increase in the allowance for credit losses related to the adoption of the current expected credit losses methodology net of deferred taxes.
Slide 33: U.S. Bancorp 4Q20 Earnings Conference Call
U.S. Bancorp 4Q20 Earnings Conference Call January 20, 2021