U.s. Bancorp · NYSE:USB
U.s. Bancorp — Morgan Stanley U.S. Financials 2010 Conference
32 slides from U.s. Bancorp's conference presentation, Feb 4, 2010
Slide 1: Morgan Stanley U.S. Financials 2010 Conference
Richard K. Davis Chairman, President and CEO February 2, 2010 Morgan Stanley U.S. Financials 2010 Conference
Slide 2: Forward-looking Statements and Additional Information
2 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
Slide 3: U.S. Bancorp Businesses
4Q09 Dimensions Regional Consumer and Business Banking Wealth Management National Wholesale Banking Trust Services Global Payments *As of January 29, 2010 U.S. Bancorp Businesses Asset Size $281 billion Deposits $183 billion Loans $195 billion Customers 15.8 million NYSE Traded USB Market Capitaliza
Slide 4: Total Assets and Market Value
U.S. Rank Company $Billions 1 Bank of America $2,223 2 J.P. Morgan 2,032 3 Citigroup 1,856 4 Wells Fargo 1,244 5 U.S. Bancorp 281 6 PNC 270 7 SunTrust 174 8 BB&T 166 9 Regions 142 10 Fifth Third 113 U.S. Rank Company $Billions 1 J.P. Morgan $154 2 Wells Fargo 147 3 Bank of America 131 4 Citigroup 95
Slide 5: Performance vs Peers
Performance vs Peers Source: SNL, 1Q08 through 4Q09 Peer Banks: BAC, BBT, FITB, JPM, KEY, PNC, RF, STI, USB and WFC Since 1/1/08 USB Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 ROA 0.0102 0.0082 0.0082 0.0079 0.0045 0.0024 USB Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer
Slide 6: Diversification
Consumer Wholesale PCTAM Payments Treas & Corp Support Revenue 44 20 10 26 0 Diversification Full year 2009, taxable-equivalent basis Excluding securities gains (losses) net 2004 2005 2006 2007 2008 2009 Fee Income 0.445 0.469 0.505 0.518 0.498 0.491 Core 0 0 0 0 0 0 Revenue Mix By Business Line Fee
Slide 7: Revenue Growth
Revenue Growth 4Q08 1Q09 2Q09 3Q09 4Q09 Reported 3624 3883 4159 4250 4376 Core 3839 3989 4178 4287 4534 2005 2006 2007 2008 2009 Reported 13239 13742 14060 14677 16668 $ in millions Taxable-equivalent basis Prior 5 Quarters Year-Over-Year Core Growth 4.4% 8.0% 8.2% 12.0% 18.1% Prior 5 Years Year-Ove
Slide 8: Loan and Deposit Growth
Loan and Deposit Growth 4Q08 1Q09 2Q09 3Q09 4Q09 Loans 177.2 185.7 183.9 182 191.6 Deposits 144.5 160.5 163.2 166.4 180.9 2005 2006 2007 2008 2009 Loans 136.5 143.6 153.8 185.2 195.4 Deposits 124.7 124.9 131.4 159.4 183.2 $ in billions 8.2% $191.6 17.0% $177.2 19.6% $185.7 12.8% $183.9 9.3% $182.0 2
Slide 9: Capital Position
Capital Position $ in billions
Slide 10: Credit Quality, linked quarter change
3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 NPA $ Change 76 49 155 290 357 489 727 626 386 184 NPA % Change 0.13 0.08 0.22 0.34 0.31 0.33 0.37 0.23 0.12 0.05 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 NCO $ Change 8 26 68 103 102 134 156 141 112 69 NCO % Change 0.041884817 0.130653266 0
Slide 11: Reserves
Credit Quality - Reserves 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 Allowance 2260 2243 2448 2648 3004 3575 4105 4571 4986 Provision Exceeding NCO's 0 192 200 250 635 530 466 415 278 Provision/NCO's 1 1.66 1.51 1.5 2 1.67 1.5 1.4 1.25 Allowance for Credit Losses Allowance Provision Exceeding NCO'
Slide 12: Provision Expense
Credit Quality - Provision Expense Net Charge-offs and Provision $ in millions 4Q08 1Q09 2Q09 3Q09 4Q09 Net Charge-offs 632 788 929 1041 1110 Reserve Build 1267 1318 1395 1456 1388 100% 67% 50% 40% 25% Net Charge-offs Provision Exceeding NCO's
Slide 13: Total Loans
Credit Quality - Total Loans 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 177.2 185.7 183.9 182 191.6 Net Charge-offs Ratio 0.0142 0.0172 0.0203 0.0227 0.023 Average Loans and Net Charge-offs Ratios 4Q08 3Q09 4Q09 Allowance for credit losses as % of: Period-end loans 2.09% 2.88% 3.04% Nonperforming loans
Slide 14: Current Environment: Potential Regulatory / Legislative Changes
Current Environment Potential Regulatory / Legislative Changes 2010 $ Impact Proprietary Trading N/A Hedge Fund Ownership N/A Private Equity Investments Immaterial Card Act ^ $80 - $100 million Overdraft Legislation ^ $200 - $300 million Financial Crisis Responsibility Fee ^ $125 - $150 million
Slide 15: Strategic Evolution
15 Strategic Evolution Conservative credit culture Low-cost operating model Efficient use of capital Fortress balance sheet Diversification of risk & revenue Enterprise Revenue Office PowerBank National Corporate Banking expansion Re-focused Wealth Management National Mortgage Banking expansion Bran
Slide 16: Acquisitions Since 2008
Acquisitions Since 2008 Consumer Wholesale PCTAM Payments Revenue 44 20 10 26 Payments Merchant processing portfolio of Citizens National Bank Credit card portfolios from Citi Merchant processing portfolio of MB Financial Bank Credit card portfolio of Town North Bank ATM-related services of Palm Des
Slide 17: Business Line Growth Initiatives
Enterprise Revenue Office - Building Deeper Relationships Wealth Management - High Net- Worth Focus/Market Segmentation Corporate Banking Expansion Payments Customer Experience S.T.A.R.T. Innovation .....and more Business Line Growth Initiatives
Slide 18: Positioned for Growth Opportunities
18 Positioned for Growth Opportunities Core businesses continue to perform Solid capital and liquidity position Positioned to capitalize on economic recovery "Flight to Quality" Investing for growth - organic initiatives, M&A and joint ventures USB prepared to opportunistically acquire Core business
Slide 19: U.S. Bancorp
ee U.S. Bancorp LI All of {5 serving you" (USbancorp.
Slide 20: Morgan Stanley U.S. Financials 2010 Conference
Richard K. Davis Chairman, President and CEO February 2, 2010 Morgan Stanley U.S. Financials 2010 Conference
Slide 21: Appendix
Appendix (USbancorp.
Slide 22: Commercial Loans
Credit Quality - Commercial Loans 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 50328 49362 47362 44655 43490 Net Charge-offs Ratio 0.0085 0.0092 0.015 0.0178 0.0228 Average Loans and Net Charge-offs Ratios Key Statistics Comments Corporate loan demand remained weak as evidenced by the declining utilizatio
Slide 23: Commercial Leases
Credit Quality - Commercial Leases 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 6608 6772 6697 6567 6489 Net Charge-offs Ratio 0.0187 0.0329 0.0329 0.0266 0.0202 Average Loans and Net Charge-offs Ratios Key Statistics Comments Delinquency levels and net charge-offs have declined due to improvement in the
Slide 24: CRE Mortgages
Credit Quality - CRE Mortgages 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 22967 23553 23875 24296 24895 Net Charge-offs Ratio 0.0024 0.0022 0.0047 0.0049 0.0048 Average Loans and Net Charge-offs Ratios Key Statistics Comments Average loans increased 2.5% on a linked quarter basis and increased 8.4% over
Slide 25: CRE Construction
Credit Quality - CRE Construction 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 9691 9845 9852 9533 9149 Net Charge-offs Ratio 0.0259 0.0482 0.0379 0.0662 0.0624 Average Loans and Net Charge-offs Ratios Key Statistics Comments Residential construction has declined from $4.7 billion in 3Q07 to $2.3 billion
Slide 26: Residential Mortgage
4Q08 1Q09 2Q09 3Q09 4Q09 Restructured 813 1129 1289 1338 1354 Credit Quality - Residential Mortgage 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 23430 23915 23964 24405 25621 Net Charge-offs Ratio 0.0143 0.0154 0.0194 0.021 0.0237 Average Loans and Net Charge-offs Ratios Key Statistics Comments Continue t
Slide 27: Home Equity
Credit Quality - Home Equity 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 18691 19215 19314 19368 19444 Net Charge-offs Ratio 0.0111 0.0148 0.0172 0.0182 0.0196 Average Loans and Net Charge-offs Ratios Key Statistics Comments Demand is weak for home equity products High quality traditional portfolio (bran
Slide 28: Credit Card
4Q08 3Q09 4Q09 Average Loans 12,976 15,387 16,399 30-89 Delinquencies 2.73% 2.58% 2.38% 90+ Delinquencies 2.20% 2.41% 2.59% Nonperforming 0.50% 0.77% 0.84% Credit Quality - Credit Card 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 12976 13597 14329 15387 16399 Net Charge-offs Ratio 0.0518 0.0632 0.0736 0.0
Slide 29: Retail Leasing
Credit Quality - Retail Leasing 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 5062 5115 5031 4822 4620 Net Charge-offs Ratio 0.0086 0.0103 0.008 0.0066 0.0043 Average Loans and Net Charge-offs Ratios Key Statistics Comments 30+ delinquency rates continue to improve Improvement in used car prices has signif
Slide 30: Other Retail
Credit Quality - Other Retail 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 22247 22987 22753 22647 23037 Net Charge-offs Ratio 0.017 0.0175 0.018 0.0194 0.0191 Average Loans and Net Charge-offs Ratios Key Statistics Comments Average loans have grown 1.7% linked quarter basis and 3.6% over 4Q08 on strong g
Slide 31: Non-Regulatory Capital Ratios
Non-Regulatory Capital Ratios $ in millions
Slide 32: Morgan Stanley U.S. Financials 2010 Conference
Richard K. Davis Chairman, President and CEO February 2, 2010 Morgan Stanley U.S. Financials 2010 Conference
US Bancorp \de\ — Morgan Stanley U.S. Financials 2010 Conference on 6ix