U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q1 2021 Earnings Presentation
33 slides from U.s. Bancorp's earnings presentation, Apr 15, 2021
Slide 1: U.S. Bancorp 1Q21 Earnings Conference Call
U.S. Bancorp 1Q21 Earnings Conference Call April 15, 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: 1Q21 Highlights
1Q21 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 9.5% as of 3/31/21. *** Earnings returned (millions) = total common dividends pai
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 * Non-GAAP; see slides 29 and 30 for calculations ** Net interest margin on a taxable-equivalent basis
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 -1.2% year-over-year On a linked quarter basis, average total loans were lower primarily driven by a decline in total commercial loans, lower residential mortgages, and lower home equity and second mortgages, all as a result of customer paydowns. On a year-over-yea
Slide 7: Average Deposits
Average Deposits +0.9% linked quarter +17.5% 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 and Wealth Ma
Slide 8: Credit Quality
Credit Quality NCO Ratio -27 bps QoQ -22 bps YoY NPAs -7.4% QoQ +27.1% YoY $ in millions
Slide 9: Credit Risk Management – Consistent Underwriting
Credit Risk Management – Consistent Underwriting Allowance for Credit Losses by Loan Class, 1Q21 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 $0.1 0.1% $0.0 0.0% Commercial Real Estate $0.3 0.8% $0.2 0.6% Residential Mortgages** $2.8 4.2% $1.9 3.0% Credit Cards $0.1 0.4% $0.0 0.2% Other Retail $0.6 1.0% $0.4 0.6% Total $3.8 1.4% $2.
Slide 11: Earnings Summary
Earnings Summary $ and shares in millions, except EPS. Reported % Change 1021 4a20 1020 vs.4Q20 vs. 1020 Net Interest Income $3,063 $3,175 $3,223 5) (60) Tostie saison ‘Adjustment 26 26 24 - 83 Net Inter (able equvelet basis) 3,089 3,201 3,247 (35) (49) 2,381 2,550 2,525 (66) (67) Net Revenue 5,470
Slide 12: Net Interest Income
Net Interest Income Linked Quarter Net interest income decreased, primarily driven by a decline in average loan balances, the yield impact of prepayments on mortgage loans and securities and two fewer days in the quarter, partially offset by the benefit of deposit and funding mix as well as higher l
Slide 13: Noninterest Income
Noninterest Income -6.6% linked quarter -5.7% year-over-year Linked Quarter Mortgage banking revenue decreased, due to lower production volume and related gain on sale margins, as well as the unfavorable net impact of the change in fair value of mortgage servicing rights, net of hedging activities.
Slide 14: Payment Services
Payment Services Payment Fees as a % of Net Revenue 2019 1Q21 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 revenue and 26% of 1Q21 net revenue Mercha
Slide 15: Payment Services Volume Growth
Payment Services Volume Growth * Travel & Hospitality includes hotels, restaurants, entertainment & travel ** RPS includes credit, debit, and prepaid *** Travel includes airlines, auto rental, hotel/motel, other transportation, travel agencies **** Monthly data ranging from January 2020 – March 2021
Slide 16: Noninterest Expense
Noninterest Expense +0.4% linked quarter +1.9% year-over-year Linked Quarter Compensation increased, primarily due to higher performance-based incentives and the first quarter impact of stock-based compensation. Employee benefits expense increased, driven by seasonally higher payroll taxes and medic
Slide 17: Capital Position
Capital Position * 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 vs. 1Q20
Average Loans vs. 1Q20 Average total loans decreased by $3.7 billion, or 1.2% Average residential mortgage loans increased by $4.3 billion, or 6.1% Average commercial loans decreased by $3.9 billion, or 3.7% Average credit card loans decreased by $2.7 billion, or 11.3% vs. 4Q20 Average total loans d
Slide 20: Average Deposits
Year-over-Year Growth 8.2% 16.8% 15.9% 18.5% 17.5% Time Money Market Checking and Savings Noninterest-bearing Average Deposits Key Points Average Deposits ($bn) vs. 1Q20 Average total deposits increased by $63.6 billion, or 17.5% Average low-cost deposits (NIB, interest checking, savings and money m
Slide 21: Credit Quality – Commercial
Credit Quality – Commercial Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm1Q20 4Q20 1Q21 Average Loans$105,987 $106,421 $102,091 30-89 Delinquencies0.28% 0.31% 0.19% 90+ Delinquencies0.06% 0.05% 0.06% Nonperforming Loans0.24% 0.36% 0.33% Linked Quarter Growth 2.0% 20.8%
Slide 22: Credit Quality – Commercial Real Estate
A&D Const $203 Multi-family $4,040 Retail $221 Residential Construction $2,032 Office $1,049 Other $2,746 Residential Land $527 $mm1Q20 4Q20 1Q21 Average Loans$40,078 $40,098 $38,786 30-89 Delinquencies0.20% 0.47%0.31% 90+ Delinquencies0.00%0.01%0.01% Nonperforming Loans0.25% 1.14% 0.93% Credit Qual
Slide 23: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm1Q204Q201Q21 Average Loans$70,892 $76,809 $75,201 30-89 Delinquencies0.23%0.32%0.28% 90+ Delinquencies0.15% 0.18% 0.19% Nonperforming Loans0.34%0.32%0.34% Linked Quarter Growth 1.4% 0.3%
Slide 24: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm1Q204Q201Q21 Average Loans$23,836 $21,937$21,144 30-89 Delinquencies1.29% 1.04%0.90% 90+ Delinquencies1.29%0.88%0.95% Nonperforming Loans0.00%0.00%0.00% Linked Quarter Growth (1.1%) (9.8%) 2.5% (0
Slide 25: Credit Quality – Home Equity
Credit Quality – Home Equity Average Loans ($mm) and Net Charge-offs Ratio Key Points Linked Quarter Growth (2.5%) (3.0%) (5.8%) (5.4%) (5.9%) Key Statistics Key Statistics $mm1Q204Q201Q21 Average Loans$14,838 $12,816 $12,062 30-89 Delinquencies0.53%0.54%0.37% 90+ Delinquencies0.30%0.36%0.36% Nonper
Slide 26: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm1Q204Q201Q21 Average Loans$8,474 $8,299 $7,975 30-89 Delinquencies0.52%0.43%0.34% 90+ Delinquencies0.04%0.05%0.01% Nonperforming Loans0.18%0.16%0.18% Linked Quarter Growth (0.1%) (0.7%) 0.3% (1
Slide 27: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm1Q204Q201Q21 Average Loans$33,552 $35,928 $36,730 30-89 Delinquencies0.79%0.60%0.40% 90+ Delinquencies0.14%0.10%0.07% Nonperforming Loans0.10%0.09%0.08% Linked Quarter Growth 0.1% 0.0% 3.6% 3.3%
Slide 28: Credit Quality – Auto Loans
Credit Quality – Auto Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm1Q204Q201Q21 Average Loans$19,276 $19,390 $19,881 30-89 Delinquencies1.08%0.83%0.55% 90+ Delinquencies0.12%0.11%0.06% Nonperforming Loans0.15%0.13%0.11% Direct: 4% Wtd Avg FICO: 761 NCO: 0.32% Indi
Slide 29: Non-GAAP Financial Measures (4)
Non-GAAP Financial Measures (4) – see slide 32 for corresponding notes
Slide 30: Non-GAAP Financial Measures (1)
Non-GAAP Financial Measures (1) – 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 1Q21 Earnings Conference Call
U.S. Bancorp 1Q21 Earnings Conference Call April 15, 2021