U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q1 2022 Earnings Presentation
30 slides from U.s. Bancorp's earnings presentation, Apr 14, 2022
Slide 1: U.S. Bancorp 1Q22 Earnings Conference Call
U.S. Bancorp 1Q22 Earnings Conference Call April 14, 2022 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: This presentation contains forward-looking statements about U.S. Bancorp. Statements that are not historical or current facts, including st
Slide 3: 1Q22 Highlights
1Q22 Highlights Income Statement change vs. Credit Quality change vs. $ in millions, exc ept EPS 1Q22 4Q21 1Q21 $ in millions 1Q22 4Q21 1Q21 1 Net interest income $3,200 1.6 % 3.6 % Nonperforming assets $811 (7.6) % (32.5) % Noninterest income 2,396 (5.4) 0.6 NPA ratio 0.25 % (3 bps) (16 bps) Report
Slide 4: Performance Ratios
Performance Ratios Return on Return on Return on Efficiency Ratio1 & Average Assets Average Common Equity Tangible Common Equity1 Net Interest Margin2 24.3% 1.69% 19.0% 62.1% 62.3% 62.8% 16.6% 16.6% 1.16% 13.0% 12.7% 1.09% 2.50% 2.44% 2.40% 1Q21 4Q21 1Q22 1Q21 4Q21 1Q22 1Q21 4Q21 1Q22 1Q21 4Q21 1Q22
Slide 5: Digital Engagement Trends
Digital Engagement Trends Digital Active Customers (% of Total Active Customers)1 Transactions (% of Total) 78% 81% 79% 82% 80% 74% 80% 72% 63% 58% 60% 60% 52% 52% 50% 42% 40% 28% 40% 21% 18% 20% 20% 0% Three months ended 0% 2/29/20 2/28/21 2/28/22 2/29/20 2/28/21 2/28/22 2 Mobile Online Total Digit
Slide 6: Business Banking and Payments Trends
Business Banking and Payments Trends With 1.1 million business1 banking relationships, there is a significant opportunity for us to deepen current relationships and acquire new customers. talech is a great example of how we are capitalizing on this opportunity. Banking and Payments2 Relationships Ne
Slide 7: Average Loans
Average Loans Change vs. (Three months ended 3/31/22) Avg. Balances 4Q21 1Q21 $313.0 Commercial $112.8 8.0 % 10.5 % $294.0 $302.8 Commercial Real Estate 39.1 0.6 0.8 Residential Mortgages 77.5 2.1 3.0 Credit Card 21.8 (2.5) 3.3 Other Retail 61.8 1.0 8.8 Total loans $313.0 3.4 % 6.5 % • On a linked q
Slide 8: Average Deposits
Average Deposits Interest-bearing Deposits $426.4 $449.8 $454.2 Average Change vs. Change (Three months ended 3/31/22) Balances 4Q21 1Q21 Rates vs. 4Q21 Money market savings $119.6 1.8 % (4.2) % 0.18 % 0.01 % Interest checking 115.0 5.7 18.2 0.03 0.01 Savings accounts 67.0 3.4 13.8 0.01 - Time depos
Slide 9: Credit Quality
Credit Quality Net Charge-offs Nonperforming Assets $1,202 NCO Ratio NPAs +4 bps QoQ $878 -7.6% QoQ $223 $811 0.31% $162 -10 bps YoY 0.41% -32.5% YoY $132 0.28% 0.25% 0.17% 0.21% 1Q21 4Q21 1Q22 1Q21 4Q21 1Q22 NCOs NCOs/Avg Loans NPAs NPAs/Period-end Loans plus OREO Provision for Credit Losses Allowa
Slide 10: Earnings Summary
Earnings Summary $ and shares in millions, except EPS Reported % Change 1Q22 4Q21 1Q21 vs. 4Q21 vs. 1Q21 Net Interest Income $3,173 $3,123 $3,063 1.6 3.6 Taxable-equivalent Adjustment 27 27 26 - 3.8 Net Interest Income (taxable-equivalent basis) 3,200 3,150 3,089 1.6 3.6 Noninterest Income 2,396 2,5
Slide 11: Net Interest Income
Net Interest Income 6.50% 3400 Linked Quarter $3,150 $3,200 3200 $3,089 5.50% $24 • Net interest income increased, primarily due to higher loan and $47 investment portfolio balances as well as higher yields in the $91 3000 investment portfolio, partially offset by lower loan fees. 4.50% 2800 • The n
Slide 12: Noninterest Income
Noninterest Income Linked Quarter $2,534 $2,381 $2,396 • Mortgage banking revenue decreased, driven by lower application volume and $298 related gain on sale margins as well as lower performing loan sales, partially $299 $200 offset by the favorable net impact of the change in fair value of mortgage
Slide 13: Payment Services
Payment Services COVID-19 Impacted Industries Payments Revenue Breakdown Seasonal Considerations Continue to Recover Payment Fees as a % of Historical Linked Quarter Seasonal Volume Growth vs. 2019 Net Revenue (1Q22) Trends for Payment Fees Revenue2 Comparable Period3 0% 6.5% Segment 1Q 2Q 3Q 4Q 6.0
Slide 14: Payment Services Fee Revenue Growth
Payment Services Fee Revenue Growth Credit and Debit Card Fee Revenue1 Prepaid Card Fee Revenue 50.0% 1Q21 2Q21 3Q21 4Q21 1Q22 39.4% 40.0% $65 $68 $55 $47 $41 30.0% 17.9% 20.0% 10.5% 10.0% 1.3% 5.5% • In 1Q22, prepaid card related fee revenue 0.6% 0.0% -0.8% was 12% of total credit and debit card fe
Slide 15: Noninterest Expense
Noninterest Expense Linked Quarter $3,533 $3,502 • Professional services expense decreased, primarily due to the timing $3,379 $372 $349 of certain initiatives in the fourth quarter of 2021. $359 $268 $269 • Marketing and business development expense decreased due to the $263 $215 $360 $266 timing o
Slide 16: Capital Position
Capital Position $ in billions 1Q22 4Q21 3Q21 2Q21 1Q21 Total U.S. Bancorp shareholders' equity $51.2 $54.9 $53.7 $53.0 $51.7 Basel III Standardized Approach1 Common equity tier 1 capital ratio 9.8% 10.0% 10.2% 9.9% 9.9% Tier 1 capital ratio 11.5% 11.6% 11.7% 11.5% 11.5% Total risk-based capital rat
Slide 17: Union Bank Acquisition Update
Union Bank Acquisition Update Strategic and Financial Thesis Intact and Compelling Progress Financial Impact1 Disclosed with deal announcement: • Working on integration activities including technology and EPS Accretion2 business line operations Synergies realized 75% / 100% • Participated in numerou
Slide 18: Appendix
Appendix U.S. BANCORP | 18
Slide 19: Average Loans
Average Loans Average Loans ($bn) Key Points Year-over-Year Growth Linked Quarter • Average total loans increased by $10.2 billion, or 3.4% (1.2%) (7.5%) (4.6%) 0.1% 6.5% • Average commercial loans increased by $8.3 billion, $313.0 or 8.0% $294.0 $294.3 $296.7 $302.8 • Average residential mortgage l
Slide 20: Average Deposits
Average Deposits Average Deposits ($bn) Key Points Year-over-Year Growth Linked Quarter 17.5% 6.4% 6.4% 6.5% 6.5% • Average total deposits increased by $4.4 billion, or 1.0% $449.8 $454.2 $426.4 $429.2 $431.5 • Average low-cost deposits (NIB, interest 8.1% checking, savings and money market) 18.1% 5
Slide 21: Credit Quality – Commercial
Credit Quality – Commercial Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth, including PPP $mm 1Q21 4Q21 1Q22 (4.1%) 0.9% (1.1%) 2.6% 8.0% Average Loans $102,091 $104,508 $112,822 30-89 Delinquencies 0.19% 0.47% 0.20% Linked Quarter Growth, excluding PPP 90+ Delinq
Slide 22: Credit Quality – Commercial Real Estate
Credit Quality – Commercial Real Estate Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q21 4Q21 1Q22 Average Loans $38,786 $38,851 $39,084 (3.3%) (0.6%) 0.9% (0.2%) 0.6% 30-89 Delinquencies 0.31% 0.20% 0.22% 90+ Delinquencies 0.01% 0.03% -% $38,786 $38,564 $3
Slide 23: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q21 4Q21 1Q22 Average Loans $75,201 $75,858 $77,449 (2.1%) (2.5%) 1.0% 2.4% 2.1% 30-89 Delinquencies 0.28% 0.15% 0.13% $75,201 $75,858 $77,449 90+ Delinquencies 0.19% 0.24% 0
Slide 24: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 1Q21 4Q21 1Q22 Linked Quarter Growth Average Loans $21,144 $22,399 $21,842 (3.6%) (0.1%) 3.7% 2.3% (2.5%) 30-89 Delinquencies 0.90% 0.86% 0.88% 90+ Delinquencies 0.95% 0.73% 0.74% $21,905 $22,399 $21,842 No
Slide 25: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 1Q21 4Q21 1Q22 Linked Quarter Growth Average Loans $56,767 $61,139 $61,769 (0.5%) 2.7% 2.9% 1.9% 1.0% 30-89 Delinquencies 0.39% 0.44% 0.38% 90+ Delinquencies 0.12% 0.11% 0.11% Nonperforming Loans 0.30% 0.2
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures (Dollars in Millions, Unaudited) Three Months Ended March 31, December 31, March 31, 2022 2021 2021 Net interest income $3,173 $3,123 $3,063 Taxable-equivalent adjustment (1) 27 27 26 Net interest income, on a taxable-equivalent basis 3,200 3,150 3,089 Net interest income
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended March 31, December 31, March 31, (Dollars in Millions, Unaudited) 2022 2021 2021 Net income applicable to U.S. Bancorp common shareholders $1,466 $1,582 $2,175 Intangibles amortization (net-of-tax) 37 32 30 Net income applicable to U.S. Bancorp common s
Slide 28: Non-GAAP Financial Measures
Non-GAAP Financial Measures March 31, December 31, September 30, June 30, March 31, (Dollars in Millions, Unaudited) 2022 2021 2021 2021 2021 Total equity $51,668 $55,387 $54,378 $53,674 $52,308 Preferred stock (6,808) (6,371) (5,968) (5,968) (5,968) Noncontrolling interests (468) (469) (635) (635)
Slide 29: Notes
Notes (1) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements. (2) Includes the estimated increase in the allowance for credit losses related to the adoption of the current expected credit losses methodology net of deferred
Slide 30: U.S. Bancorp 1Q22 Earnings Conference Call
U.S. Bancorp 1Q22 Earnings Conference Call April 14, 2022 U.S. BANCORP