U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q1 2018 Earnings Presentation
28 slides from U.s. Bancorp's earnings presentation, Apr 18, 2018
Slide 1: U.S. Bancorp 1Q18 Earnings Conference Call
U.S. Bancorp 1Q18 Earnings Conference Call April 18, 2018 U.S. BANCORP
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: Today’s presentation contains forward-looking statements about U.S. Bancorp. Statements that are not historical or current facts, including
Slide 3: 1Q18 Highlights
1Q18 Highlights Income Statement change vs. Credit Quality change vs. $ in millions, except EPS 1Q18 4Q17 1Q17 $ in millions 1Q18 4Q17 1Q17 Net interest income* $3,197 (1.0) % 5.5 % Nonperforming assets $1,204 0.3 % (19.5) % Noninterest income 2,272 (4.1) 0.6 NPA ratio 0.43% 0bps (12bps) Reported ne
Slide 4: Performance Ratios
Performance Ratios Return on Return on Return on Efficiency Ratio* & Average Assets Average Common Equity Tangible Common Equity* Net Interest Margin** 69.8% 1.50% 14.7% 14.9% 18.8% 19.3% 1.46% 13.3% 17.2% 55.3% 55.9% 1.35% 3.11% 3.13% 3.06% 1Q17 4Q17 1Q18 1Q17 4Q17 1Q18 1Q17 4Q17 1Q18 1Q17 4Q17 1Q1
Slide 5: Average Loans
Average Loans Average Change vs. $279.8 $279.4 (Three months ended 3/31/18) Balances 4Q17 1Q17 $273.2 Commercial $97.5 (0.1) % 4.0 % Commercial Real Estate 40.4 (1.6) (6.5) Residential Mortgage 60.2 0.9 3.9 Credit Card 21.3 0.3 2.1 Retail 57.0 (0.2) 6.1 Covered 3.0 (4.5) (18.3) Total loans $279.4 (0
Slide 6: Average Deposits
Average Deposits Interest-bearing Deposits $328.4 $339.2 $334.6 Average Change vs. Change (Three months ended 3/31/18) Balances 4Q17 1Q17 Rates vs. 4Q17 Money market savings $103.3 (1.9) % (5.0) % 0.81 % 0.12 % Interest checking 70.4 (0.5) 7.1 0.15 (0.01) Savings accounts 44.4 1.4 4.2 0.07 0.00 Time
Slide 7: Credit Quality
Credit Quality Net Charge-offs Nonperforming Assets $335 $341 $325 $1,495 NCO Ratio $1,200 $1,204 NPAs +3 bps QoQ +0.3% QoQ 0.50% 0.46% 0.49% 0.55% -1 bp YoY 0.43% 0.43% -19.5% YoY 1Q17 4Q17 1Q18 1Q17 4Q17 1Q18 NCOs NCOs/Avg Loans NPAs NPAs/Period-end Loans plus OREO Provision for Credit Losses $20
Slide 8: Earnings Summary
Earnings Summary $ and shares in millions, except EPS Reported % Change 1Q18 4Q17 1Q17 vs. 4Q17 vs. 1Q17 Net Interest Income $3,168 $3,175 $2,980 (0.2) 6.3 Taxable-equivalent Adjustment 29 53 50 (45.3) (42.0) Net Interest Income (taxable-equivalent basis) 3,197 3,228 3,030 (1.0) 5.5 Noninterest Inco
Slide 9: 1Q18 Impacts of New Accounting Standards and Tax Reform
1Q18 Impacts of New Accounting Standards and Tax Reform better / (worse) $ in millions 1Q18 Prior Impact of Acctg Impact of 1Q18 to Changes Standards Adopted Tax Reform* Reported Net Interest Income (taxable-equivalent basis) $ 3,190 $ 35 $ (28) $ 3,197 Noninterest Income 2,345 (73) – 2,272 Net Reve
Slide 10: Net Interest Income
Net Interest Income Linked Quarter $3,228 $3,197 • The decline in net interest income reflects the impact of $3,030 two fewer days in the quarter, tax reform and deposit and funding mix, partially offset by the impact of higher rates. • Excluding the impact of tax reform related to tax exempt income
Slide 11: Noninterest Income
Noninterest Income Linked Quarter $2,370 $2,259 $2,272 • The decline in noninterest income reflects seasonally $202 $207 $184 lower payment services revenue, mortgage banking $394 revenue and deposit services charges. $368 $398 $396 $426 $411 Year-over-Year • Solid growth in payment services revenue
Slide 12: Noninterest Expense
Noninterest Expense $3,899 Linked Quarter $236 • Higher compensation expense was partially offset by $259 seasonally lower costs related to investments in tax- $444 $3,055 advantaged projects, mortgage banking costs and $2,909 $235 $217 professional services expense. $265 $247 $1,170 $260 • Excludin
Slide 13: Capital Position
Capital Position $ in billions 1Q18 4Q17 3Q17 2Q17 1Q17 Total U.S. Bancorp shareholders' equity $49.2 $49.0 $48.7 $48.3 $47.8 Basel III Standardized Approach Common equity tier 1 capital ratio 9.0% 9.3% 9.6% 9.5% 9.5% Tier 1 capital ratio 10.4% 10.8% 11.1% 11.1% 11.0% Total risk-based capital ratio
Slide 14: Appendix
Appendix U.S. BANCORP | 14
Slide 15: Average Loans
Average Loans Average Loans ($bn) Key Points Year-over-Year Growth vs. 1Q17 • Average total loans increased by $6.2 billion, or 2.3% 4.1% 3.4% 3.0% 2.6% 2.3% • Average commercial loans increased by $3.7 billion, $275.5 $277.6 $279.8 $279.4 or 4.0% $273.2 6.1% • Average retail loans increased by $3.3
Slide 16: Average Deposits
Average Deposits Average Deposits ($bn) Key Points Year-over-Year Growth vs. 1Q17 11.0% 7.7% 5.2% 3.0% 1.9% • Average total deposits increased by $6.1 billion, or 1.9% $328.4 $331.2 $335.2 $339.2 $334.6 • Average low-cost deposits (NIB, interest (0.1%) (3.0%) (1.6%) checking, money market and saving
Slide 17: Credit Quality – Commercial Loans
Credit Quality – Commercial Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q17 4Q17 1Q18 Average Loans $93,739 $97,558 $97,465 (0.1%) 2.0% 1.0% 1.0% (0.1%) 30-89 Delinquencies 0.23% 0.26% 0.25% 90+ Delinquencies 0.06% 0.06% 0.06% $93,739 $95,638 $96,633
Slide 18: Credit Quality – Commercial Real Estate
Credit Quality – Commercial Real Estate Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 1Q17 4Q17 1Q18 Linked Quarter Growth Average Loans $43,158 $41,009 $40,366 (0.5%) (1.4%) (2.2%) (1.5%) (1.6%) 30-89 Delinquencies 0.15% 0.09% 0.09% 90+ Delinquencies 0.01% 0.01% 0.01% $43,158 $42
Slide 19: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q17 4Q17 1Q18 Average Loans $57,900 $59,639 $60,174 2.1% 1.1% 0.8% 1.0% 0.9% 30-89 Delinquencies 0.21% 0.33% 0.24% $59,030 $59,639 $60,174 90+ Delinquencies 0.24% 0.22% 0.22%
Slide 20: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q17 4Q17 1Q18 Average Loans $20,845 $21,218 $21,284 (0.5%) (1.0%) 1.4% 1.4% 0.3% 30-89 Delinquencies 1.24% 1.37% 1.32% $20,845 $20,631 $20,926 $21,218 $21,284 90+ Delinquencies 1.23%
Slide 21: Credit Quality – Home Equity
Credit Quality – Home Equity Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q17 4Q17 1Q18 Average Loans $16,259 $16,299 $16,195 (1.1%) 0.0% 0.3% 0.0% (0.6%) 30-89 Delinquencies 0.33% 0.48% 0.41% $16,259 $16,252 $16,299 $16,299 $16,195 90+ Delinquencies 0.24%
Slide 22: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q17 4Q17 1Q18 Average Loans $6,469 $7,982 $7,982 4.5% 11.0% 8.1% 2.8% 0.0% 30-89 Delinquencies 0.24% 0.41% 0.34% $7,762 $7,982 $7,982 90+ Delinquencies 0.01% 0.03% 0.02% $7,181 Non
Slide 23: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q17 4Q17 1Q18 Average Loans $31,056 $32,856 $32,874 (0.6%) 0.4% 2.6% 2.6% 0.1% 30-89 Delinquencies 0.56% 0.80% 0.73% $32,008 $32,856 $32,874 90+ Delinquencies 0.12% 0.15% 0.15% $31,0
Slide 24: Credit Quality – Auto Loans
Credit Quality – Auto Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q17 4Q17 1Q18 Average Loans $17,538 $18,754 $18,868 (0.5%) 0.0% 2.7% 4.1% 0.6% 30-89 Delinquencies 0.64% 0.95% 0.85% $18,754 $18,868 90+ Delinquencies 0.05% 0.08% 0.08% $17,538 $17,533
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures March 31, December 31, September 30, June 30, March 31, (Dollars in Millions, Unaudited) 2018 2017 2017 2017 2017 Total equity $49,812 $49,666 $49,351 $48,949 $48,433 Preferred stock (5,419) (5,419) (5,419) (5,419) (5,419) Noncontrolling interests (625) (626) (628) (629)
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended March 31, December 31, March 31, (Dollars in Millions, Unaudited) 2018 2017 2017 Net income applicable to U.S. Bancorp common shareholders $1,597 $1,611 $1,387 Intangibles amortization (net-of-tax) 31 28 29 Net income applicable to U.S. Bancorp common s
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended March 31, December 31, March 31, (Dollars in Millions, Unaudited) 2018 2017 2017 Net interest income $3,168 $3,175 $2,980 Taxable-equivalent adjustment (1) 29 53 50 Net interest income, on a taxable-equivalent basis 3,197 3,228 3,030 Net interest income
Slide 28: U.S. Bancorp 1Q18 Earnings Conference Call
U.S. Bancorp 1Q18 Earnings Conference Call April 18, 2018 U.S. BANCORP