U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q3 2022 Earnings Presentation
32 slides from U.s. Bancorp's earnings presentation, Oct 14, 2022
Slide 1: U.S. Bancorp 3Q22 Earnings Conference Call
us| bank. October 14, 2022 U.S. Bancorp 3Q22 Earnings Conference Call
Slide 2: Forward-looking statements disclaimer
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 and expectations, are forward-l
Slide 3: Third quarter financial highlights
$ in millions, except EPS $ in millions $ in billions 1 Taxable-equivalent basis; see slide 28 for calculation 2 Common equity tier 1 capital to risk-weighted assets, reflecting the full implementation of the current expected credit losses methodology was 9.4% as of 9/30/22. 3 Non-GAAP; see slide 30
Slide 4: 1 Non-GAAP; see slides 28 and 29 for calculations 2 Net interest margin on
1 Non-GAAP; see slides 28 and 29 for calculations 2 Net interest margin on a taxable-equivalent basis 3 Non-GAAP; Excluding merger and integration charges; see slides 28 and 29 for calculations U.S. Bank
Slide 5: Digital customer growth
1 Represents core Consumer Banking customers active in at least one channel in the previous 90 days 2 Interactive Voice Response U.S. Bank Total Digital includes both online and mobile platforms
Slide 6: Payments and deposit product momentum
First in market to send RTP2 Transaction Multiple ways to integrate RTP products 3Q21 3Q22 New State Farm Deposit Accounts1 2020 2021 3Q22 YTD 2020 2021 3Q22 YTD 1 Data as of 9/30/2022 2 Real Time Payments U.S. Bank Note: State Farm and logo are trademarks of State Farm Mutual Automobile Company
Slide 7: Relationship growth
Relationship Growth4 1 Defined as businesses with under $25M in revenue 2 Payments includes merchant acquiring and card relationships within Retail Payment Solutions 3 Data as of 8/31/22 U.S. Bank 4 Data indexed to 100 as of 3/31/21
Slide 8: Balance sheet (three months ended 9/30/22)
(Three months ended 9/30/22) • • U.S. Bank $ in billions
Slide 9: Balance sheet (three months ended 9/30/22)
(Three months ended 9/30/22) • • U.S. Bank $ in billions
Slide 10: Income statement
U.S. Bank $ in millions, except allowance for credit losses in billions
Slide 11: Income statement with merger charges
1 Merger and integration-related charges associated with the planned acquisition of MUFG Union Bank. U.S. Bank
Slide 12: Net interest income and PPP income
• • • • PPP Income 1 3Q21 4Q21 1Q22 2Q22 3Q22 $128 $48 $24 $14 $12 $ in millions 1 Includes PPP interest income and PPP loan fees U.S. Bank Net interest income on a taxable-equivalent basis; see slide 28 for calculation
Slide 13: Noninterest income
• • • • • • $ in millions Payments = credit and debit card, corporate payment products and merchant processing U.S. Bank Service charges = deposit service charges and treasury management All other = commercial products, investment products fees, securities gains (losses) and other
Slide 14: Credit and debit card, merchant, corporate payments fee revenue
Credit and Debit Card Fee Revenue1 20.0% 18.0% 15.0% 10.0% 5.5% 5.0% 1.3% 0.6% 0.8% 0.0% -0.8% -0.5% -5.0% -2.0% -2.8% -10.0% -11.5% -15.0% Linked Quarter Year-over-Year 3Q21 4Q21 1Q22 2Q22 3Q22 Merchant Processing Fee Revenue Corporate Payments Fee Revenue 20.0% 17.1% 17.4% 14.2% 30.0% 25.4% 13.0%
Slide 15: Payments revenue trends
↓ ↑ Stable ↑ Stable ↑ ↑ ↓ ↓ ↑ ↑ ↓ 43% 7% • • 3Q22 vs. 3Q22 vs. 3Q21 3Q19 • 2019 2020 2021 3Q22 YTD 1 Includes prepaid card 2 Linked quarter change based on trends from 2015 – 2019 U.S. Bank 3 Tech-led includes digital, omni-commerce and e-commerce as well as investments in integrated software provid
Slide 16: Noninterest expense
• • • • • • $ in millions PPS = postage, printing and supplies U.S. Bank 1 $197 million and $42 million of merger and integration charges included in 2Q22 and 3Q22, respectively
Slide 17: Capital position
1 Ratios calculated in accordance with transitional regulatory requirements related to the current expected credit losses methodology U.S. Bank 2 Non-GAAP; see slide 30 for calculations
Slide 18: Guidance
($ in millions) 1 All guidance for stand alone USB 2 Core guidance excludes notable items for merger and integration charges associated with the planned acquisition of MUFG Union Bank 3 Excludes $42 million of merger and integration-related charges associated with the planned acquisition of MUFG Uni
Slide 19: Union Bank Acquisition Update
Union Bank Acquisition Update Progress What’s Next Integration planning including technology and business line operations largely complete $100 billion community benefits plan announced Participated in numerous stakeholder town- hall meetings Participated in a joint public meeting with the Fed and O
Slide 20: Appendix
U.S. Bank
Slide 21: Average Loans
Average Loans Average Loans ($bn) Year-over-Year Growth (4.6%) 0.1% 6.5% 10.2% 13.5% $336.8 $296.7 $302.8 $313.0 $324.2 " 0.2% 4.7% 8.8% 5.7% 7.2% 3Q21 4Q21 1Q22 2Q22 3Q22 Other Retail [Credit Card [| ResMtg CRE | Commercial Linked Quarter Average total loans increased by $12.6 billion, or 3.9% Aver
Slide 22: U.S. Bank
• • 8.1% (3.6%) (11.6%) 18.1% 18.0% 11.8% 8.8% 18.0% 16.5% • 20.6% (4.2%) 8.9% 11.4% • (9.3%) (7.8%) (31.0%) (30.4%) (8.8%) 8.5% 54.0% U.S. Bank
Slide 23: Credit Quality - Commercial
Credit Quality - Commercial Linked Quarter Growth (1.1%) 2.6% 8.0% 6.9% 6.5% 128,519 $112,822 $120,657 ee. z $101,832 $104,508 3Q21 4Q21 1Q22 2Q22 3Q22 mmm Average Loans —e—Net Charge-offs Ratio * Net charge-offs ratio remained low at 0.08% * Utilization increased quarter over quarter from 23.7% to
Slide 24: Credit Quality - Commercial Real Estate
Credit Quality - Commercial Real Estate Linked Quarter Growth $mm 3Q21 2Q22 3Q22 Average Loans $38,921 $39,517 $40,010 0.9% (0.2%) 0.6% 11% 1.2% 30-89 Delinquencies 0.08% 0.06% 0.02% 90+ Delinquencies 0.05% 0.01% 0.05% $38,921 $38,851 $39,084 $39,517 $40,010 Nonperforming Loans 0.76% 0.52% 0.41% CRE
Slide 25: Residential Mortgage Delinquencies
Residential Mortgage Delinquencies ($mm) $800 $600 $400 $200 $0 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 30-89 days past due 90+ days past due • • • U.S. Bank
Slide 26: Credit Card Delinquencies
Credit Card Delinquencies ($mm) $800 $600 $400 $200 $0 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 30-89 days past due 90+ days past due • • U.S. Bank
Slide 27: Credit Quality - Other Retail
Credit Quality — Other Retail Linked Quarter Growth $mm 3Q214 2Q22 3Q22 Average Loans $59,977 $61,037 $60,126 2.9% 1.9% 1.0% (1.2%) (1.5%) 30-89 Delinquencies 0.41% 0.39% 0.41% 90+ Delinquencies 0.11% 0.10% 0.11% Nonperforming Loans 0.26% 0.24% 0.22% $59,977 $61,139 $61,769 $61,037 $60,126 Other Ret
Slide 28: U.S. Bank (1), (2) – see slide 31 for corresponding notes
U.S. Bank (1), (2) – see slide 31 for corresponding notes
Slide 29: U.S. Bank (2), (3) – see slide 31 for corresponding notes
U.S. Bank (2), (3) – see slide 31 for corresponding notes
Slide 30: 1 Preliminary data. Subject to change prior to filings with applicable regulatory agencies. U.S.
1 Preliminary data. Subject to change prior to filings with applicable regulatory agencies. U.S. Bank (3), (4), (5) – see slide 31 for corresponding notes
Slide 31: Notes
Notes (1) Based on a federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes. (2) Notable items for the three months ended September 30, 2022 include $42 million ($33 million after-tax) of merger and integration c
Slide 32: U.S. Bank
U.S. Bank