U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q3 2015 Earnings Presentation
27 slides from U.s. Bancorp's earnings presentation, Oct 15, 2015
Slide 1: U.S. Bancorp 3Q15 Earnings Conference Call
Exhibit 99.2 U.S. Bancorp 3Q15 Earnings Conference Call Richard K. Davis Chairman, President and CEO Kathy Rogers Vice Chairman and CFO October 15, 2015
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: 3Q15 Highlights
3Q15 Highlights • Net income of $1.5 billion; record $0.81 per diluted common share • Average loan growth* of 1.3% vs. 2Q15 and 3.8% vs. 3Q14 • Average deposit growth of 1.4% vs. 2Q15 and 6.9% vs. 3Q14 • Positive trends in payments-related fee revenue – Credit and debit card revenue increased 7.2% v
Slide 4: Performance Ratios
Performance Ratios Return on Average Common Equity Efficiency Ratio and and Return on Average Assets Net Interest Margin Return on Avg Common Equity Return on Avg Assets Efficiency Ratio Net Interest Margin Efficiency ratio computed as noninterest expense divided by the sum of net interest income on
Slide 5: 3Q15 Notable Impacts to 3Q15 Earnings
3Q15 Notable Impacts to 3Q15 Earnings • Student Loan Market Adjustment ($58) million • Elevated 3Q15 Expenses ($60) million (not expected to repeat in 4Q15) – Mortgage-related Compliance – Talent Upgrade • Visa Gain $135 million Total Impact Relatively Neutral U.S. BANCORP 5|
Slide 6: Revenue Growth
Revenue Growth $ in millions Year-Over-Year Change 2.0% 5.7% 1.9% (2.8%) 3.1% 3.2% excluding 1.4% excluding 1.6% excluding 5,500 4Q14 notable 2Q14 notable 3Q15 notable $5,169 $5,147 $124 $5,042 $77 $4,990 5,000 $4,906 4,500 4,000 3,500 3Q14 4Q14 1Q15 2Q15 3Q15 Notable items: 2Q14 Visa gain $214 mill
Slide 7: Loan and Deposit Growth
Loan and Deposit Growth $ in billions Year-Over-Year Growth Average Balances 300 6.9% 8.9% $289.7 8.1% $285.7 7.2% $278.5 7.4% $275.5 275 $271.0 4.0% 3.8% adjusted* adjusted* 5.1% 2.7% 5.9% 2.5% 6.3% $248.0 $250.5 250 $246.4 $246.6 $243.9 225 200 3Q14 4Q14 1Q15 2Q15 3Q15 Loans Deposits * Excluding s
Slide 8: Credit Quality
Credit Quality $ in millions Net Charge-offs Nonperforming Assets Net Charge-offs (Left Scale) Nonperforming Assets (Left Scale) NCOs to Avg Loans (Right Scale) NPAs to Loans plus ORE (Right Scale) U.S. BANCORP 8|
Slide 9: Earnings Summary
Earnings Summary $ and shares in millions, except per-share data % B/(W) YTD YTD 3Q15 2Q15 3Q14 vs 2Q15 vs 3Q14 2015 2014 %B/(W) Net Interest Income $ 2,821 $ 2,770 $ 2,748 1.8 2.7 $ 8,343 $ 8,198 1.8 Noninterest Income 2,326 2,272 2,242 2.4 3.7 6,752 6,794 (0.6) Net Revenue 5,147 5,042 4,990 2.1 3.
Slide 10: Net Interest Income
Net Interest Income Net Interest Income Key Points $ in millions Year-Over-Year Change vs. 3Q14 1.3% 2.4% 1.7% 0.9% 2.7% • Average earning assets grew $22.8 billion, or 6.6% • Net interest margin lower 12 bps (3.04% vs. 3.16%) – Change in loan portfolio mix, as well as growth in the investment portf
Slide 11: Noninterest Income
Noninterest Income Noninterest Income Key Points $ in millions vs. 3Q14 Year-Over-Year Change • Noninterest income increased $84 million, or 3.7% 3.0% 9.9% 2.2% (7.0%) 3.7% – Higher other income, principally due to the Visa sale, partially offset by the student loan market valuation adjustment 2,800
Slide 12: Noninterest Expense
Noninterest Expense Noninterest Expense Key Points $ in millions Year-Over-Year Change vs. 3Q14 1.9% 4.5% 4.8% (2.6%) 6.2% • Noninterest expense increased $161 million, or 6.2% 3,200 – Higher compensation (8.2% increase) reflecting the impact of merit $2,804 $2,775 increases and higher staffing for
Slide 13: Capital Position
Capital Position $ in billions 3Q15 2Q15 1Q15 4Q14 3Q14 Total U.S. Bancorp shareholders' equity $ 45.1 $ 44.5 $ 44.3 $ 43.5 $ 43.1 Standardized Approach Basel III transitional standardized approach Common equity tier 1 capital ratio 9.6% 9.5% 9.6% 9.7% 9.7% Tier 1 capital ratio 11.1% 11.0% 11.1% 11.
Slide 14: Appendix
Appendix U.S. BANCORP 14 |
Slide 15: Average Loans
Average Loans Average Loans Key Points $ in billions Year-Over-Year Growth vs. 3Q14 6.3% 5.9% 5.1% 2.5% 2.7% • Average total loans increased by $6.7 billion, or 280 4.0%* 3.8%* 2.7% (3.8% excluding student loans which $243.9 $246.4 $248.0 $246.6 $250.5 were reclassified back to held for investment (
Slide 16: Average Deposits
Average Deposits Average Deposits Key Points $ in billions Year-Over-Year Growth vs. 3Q14 7.4% 7.2% 8.1% 8.9% 6.9% • Average total deposits increased by $18.7 320 billion, or 6.9% $285.7 $289.7 $275.5 $278.5 $271.0 • Average low-cost deposits (NIB, interest 240 3.3% 5.2% 7.7% 9.2% checking, money ma
Slide 17: Credit Quality – Commercial Loans
Credit Quality – Commercial Loans $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 100,000 2.0% 3Q14 2Q15 3Q15 Average Loans $72,190 $77,932 $79,486 $77,932 $79,486 $74,333 $76,183 30-89 Delinquencies 0.23% 0.19% 0.20% $72,190 75,000 1.5% 90+ Delinquencies 0.05% 0.05% 0.05% Nonp
Slide 18: Credit Quality – Commercial Leases
Credit Quality – Commercial Leases $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 9,000 2.1% 3Q14 2Q15 3Q15 Average Loans $5,155 $5,321 $5,218 30-89 Delinquencies 0.83% 0.81% 0.88% 6,000 $5,155 $5,292 $5,325 $5,321 $5,218 1.4% 90+ Delinquencies 0.00% 0.00% 0.00% Nonperforming
Slide 19: Credit Quality – Commercial Real Estate
Credit Quality – Commercial Real Estate $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q14 2Q15 3Q15 Average Loans $40,839 $42,446 $42,316 30-89 Delinquencies 0.12% 0.12% 0.15% 90+ Delinquencies 0.03% 0.05% 0.05% Nonperforming Loans 0.59% 0.41% 0.34% Performing TDRs* $284 $24
Slide 20: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q14 2Q15 3Q15 Average Loans $51,994 $51,114 $51,831 30-89 Delinquencies 0.46% 0.38% 0.35% 90+ Delinquencies 0.41% 0.30% 0.33% Nonperforming Loans 1.62% 1.50% 1.40% Residential Mortgage Perfor
Slide 21: Credit Quality – Credit Card
Credit Quality – Credit Card $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q14 2Q15 3Q15 Average Loans $17,753 $17,613 $17,944 30-89 Delinquencies 1.23% 1.16% 1.27% 90+ Delinquencies 1.10% 1.03% 1.10% Nonperforming Loans 0.22% 0.09% 0.06% Key Points • Average loans increased
Slide 22: Credit Quality – Home Equity
Credit Quality – Home Equity $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q14 2Q15 3Q15 Average Loans $15,704 $15,958 $16,083 30-89 Delinquencies 0.51% 0.36% 0.36% 90+ Delinquencies 0.26% 0.25% 0.25% Nonperforming Loans 1.05% 0.98% 0.91% Home Equity Subprime: 1% Wtd Avg LTV
Slide 23: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q14 2Q15 3Q15 Average Loans $5,991 $5,696 $5,480 30-89 Delinquencies 0.14% 0.17% 0.18% 90+ Delinquencies 0.02% 0.00% 0.02% Nonperforming Loans 0.02% 0.04% 0.04% Key Points • Continued high-quality
Slide 24: Credit Quality – Other Retail
Credit Quality – Other Retail $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q14 2Q15 3Q15 Average Loans $27,003 $25,415 $27,286 30-89 Delinquencies 0.49% 0.48% 0.46% 90+ Delinquencies 0.13% 0.10% 0.10% Nonperforming Loans 0.06% 0.07% 0.07% Student Loans $889 Auto Loans Revol
Slide 25: Credit Quality – Auto Loans
Credit Quality – Auto Loans $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q14 2Q15 3Q15 Average Loans $14,404 $15,609 $16,220 30-89 Delinquencies 0.41% 0.35% 0.40% 90+ Delinquencies 0.05% 0.02% 0.02% Nonperforming Loans 0.03% 0.04% 0.05% Indirect: 94% Direct: 6% Wtd Avg FICO
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures September 30, June 30, March 31, December 31, September 30, (Dollars in Millions, Unaudited) 2015 2015 2015 2014 2014 Total equity $45,767 $45,231 $44,965 $44,168 $43,829 Preferred stock (4,756) (4,756) (4,756) (4,756) (4,756) Noncontrolling interests (692) (694) (688) (6
Slide 27: U.S. Bancorp 3Q15 Earnings Conference Call
U.S. Bancorp 3Q15 Earnings Conference Call October 15, 2015