31 slides from U.s. Bancorp's earnings presentation, Jan 18, 2012
Slide 1: U.S. Bancorp 4Q11 Earnings Conference Call
U.S. Bancorp 4Q11 Earnings Conference Call Richard K. Davis Chairman, President and CEO Andy Cecere January 18, 2012 Vice Chairman and CFO
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: 4Q11 Highlights
4Q11 Highlights 4Q11 Earnings Conference Call Net income of $1.4 billion; $0.69 per diluted common share Results included two notable items; net, items added $0.05 per diluted common share • $263 million merchant settlement gain • $130 million expense accrual related to mortgage servicing matters Re
Slide 4: 2011 Full Year Highlights
4Q11 Earnings 2011 Full Year Highlights Conference Call Record net income of $4.9 billion; $2.46 per diluted common share Record total net revenue of $19.1 billion, up 5.3% vs. 2010 • Net interest income growth of 5.7% vs. 2010 • Noninterest income growth of 4.8% vs. 2010 Average loan growth of 4.4%
Slide 5: Performance Ratios
4Q11 Earnings Performance Ratios Conference Call Efficiency Ratio and ROCE and ROA Net Interest Margin 20% 4% 70% 5% 16.8% 15.9% 16.1% 14.5% 3.83% 15% 13.7% 3% 60% 3.69% 3.67% 3.65% 4% 3.60% 10% 2% 50% 52.5% 3% 52.7% 51.1% 51.6% 51.5% 1.54% 1.57% 1.62% 5% 1.31% 1.38% 1% 40% 2% 0% 0% 30% 1% 4Q10 1Q11
Slide 6: Capital Position
4Q11 Earnings Capital Position Conference Call $ in billions 4Q11 3Q11 2Q11 1Q11 4Q10 Shareholders' equity $ 34.0 $ 33.2 $ 32.5 $ 30.5 $ 29.5 Tier 1 capital 29.2 28.1 27.8 26.8 25.9 Total risk-based capital 36.1 35.4 35.1 34.2 33.0 Tier 1 common equity ratio 8.6% 8.5% 8.4% 8.2% 7.8% Tier 1 capital r
Slide 7: Loan and Deposit Growth
4Q11 Earnings Loan and Deposit Growth Conference Call $ in billions 4Q11 Acquisition Adjusted Average Balances Loan Growth = 5.5% Year-Over-Year Growth Deposit Growth = 11.7% 17.3% 230 17.9% $223.3 14.2% 5.9% 11.9% $215.4 5.0% 2.4% $204.3 4.0% $209.4 $207.0 210 2.0% $202.2 5.2% $197.6 $198.8 $195.5
Slide 8: Revenue Growth
4Q11 Earnings Revenue Growth Conference Call $ in millions USB Record Revenue 4Q11 Year-Over-Year Growth 7.9% 4.6% 3.8% 4.5% 8.1% 5,500 5,104 5,000 4,795 4,721 4,690 4,519 4,500 4,000 3,500 4Q10 1Q11 2Q11 3Q11 4Q11 Taxable-equivalent basis 8
Slide 9: Credit Quality
4Q11 Earnings Credit Quality Conference Call Change in Net Charge-offs Change in Nonperforming Assets* 160 40% 800 37% 40% 35% 34% 33% 30% 31% 26% 27% 25% 23% 22% 18% 80 20% 400 20% 12% 12% 7% 5% 2% 2% -2% 0 0% 0 -5% -6% -5% -6% 0% 68 103 102 134 156 141 112 69 25 -6% -7% -7% 155 290 357 489 727 626
Slide 10: Credit Quality - Outlook
4Q11 Earnings Credit Quality - Outlook Conference Call The Company expects the level of Net Charge-offs to trend modestly lower and Nonperforming Assets to trend lower during 1Q12 Delinquencies* Changes in Criticized Assets* 2.0% 1.70% 1.62% 40.0% 36% 1.45% 1.48% 1.44% 1.34% 28% 1.5% 23% 1.18% 1.06%
Slide 11: Earnings Summary
4Q11 Earnings Earnings Summary Conference Call $ in millions, except per-share data % B/(W) FY FY 4Q11 3Q11 4Q10 vs 3Q11 vs 4Q10 2011 2010 % B/(W) Net Interest Income $ 2,673 $ 2,624 $ 2,499 1.9 7.0 $ 10,348 $ 9,788 5.7 Noninterest Income 2,431 2,171 2,222 12.0 9.4 8,760 8,360 4.8 Total Revenue 5,10
Slide 12: 4Q11 Results - Key Drivers
4Q11 Earnings 4Q11 Results - Key Drivers Conference Call vs. 4Q10 Net Revenue growth of 8.1% (4.7% excluding notable items) • Net interest income growth of 7.0%; net interest margin of 3.60% vs. 3.83% • Noninterest income growth of 9.4% (2.1% excluding notable items) Noninterest expense growth of 8.
Slide 13: Notable Items
4Q11 Earnings Notable Items Conference Call $ in millions FY FY 4Q11 3Q11 4Q10 2011 2010 Revenue Items Securities gains (losses), net $ (9) $ (9) $ (14) $ (31) $ (78) Merchant processing agreement settlement 263 - - 263 - Gain related to FCB acquisition - - - 46 - Nuveen transaction - - 103 - 103 Ex
Slide 14: Net Interest Income
4Q11 Earnings Net Interest Income Conference Call $ in millions Net Interest Income Key Points Year-Over-Year Growth vs. 4Q10 5.9% 4.3% 5.6% 5.9% 7.0% Average earning assets grew by $35.3 billion, or 13.6% (13.1% excluding acquisitions) 3,000 6.0% 2,624 2,673 Net interest margin lower by 23 bp (3.60
Slide 15: Average Loans
4Q11 Earnings Average Loans Conference Call $ in billions Average Loans Key Points Year-Over-Year Growth vs. 4Q10 2.0% 2.4% 4.0% 5.0% 5.9% Average total loans grew by $11.5 billion, or 5.9% (5.5% excluding acquisitions) 240 $195.5 $197.6 $198.8 $202.2 $207.0 Average total loans, excluding covered lo
Slide 16: Average Deposits
4Q11 Earnings Average Deposits Conference Call $ in billions Average Deposits Key Points Year-Over-Year Growth vs. 4Q10 5.2% 11.9% 14.2% 17.9% 17.3% Average total deposits increased by $33.0 billion, or 17.3% (11.7% excluding acquisitions) 240 $223.3 $204.3 $209.4 $215.4 $190.3 Average low cost depo
Slide 17: Noninterest Income
4Q11 Earnings Noninterest Income Conference Call $ in millions Noninterest Income Key Points Year-Over-Year Growth vs. 4Q10 Noninterest income grew by $209 million, or 9.4%, driven by: 10.2% 4.9% 1.7% 2.9% 9.4% • Deposit service charges (18.8% growth) 2800 • Merchant processing services (17.0% growt
Slide 18: Noninterest Expense
4Q11 Earnings Noninterest Expense Conference Call $ in millions Noninterest Expense Key Points Year-Over-Year Growth vs. 4Q10 11.5% 8.3% 2.0% 3.8% 8.5% Noninterest expense was higher by $211 million, or 8.5%, driven by: $2,696 2800 $2,485 $2,425 $2,476 • Increased compensation (5.8%) and employee $2
Slide 19: Mortgage Repurchase
4Q11 Earnings Mortgage Repurchase Conference Call Mortgages Repurchased and Make-whole Payments Repurchase activity lower than Mortgage Representation and Warranties Reserve peers due to: $ in millions 4Q11 3Q11 2Q11 1Q11 4Q10 • Conservative credit and Beginning Reserve $162 $173 $181 $180 $147 unde
Slide 20: Positioned to Win
4Q11 Earnings Positioned to Win Conference Call 20
Slide 21: Appendix
4Q11 Earnings Conference Call Appendix 21
Slide 22: Credit Quality - Commercial Loans
4Q11 Earnings Credit Quality - Commercial Loans Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 4Q10 3Q11 4Q11 Average Loans 41,700 46,484 49,437 60,000 6.0% 30-89 Delinquencies 0.57% 0.34% 0.48% 49,437 44,135 46,484 90+ Delinquencies 0.15% 0.09% 0.09% 41,700 42
Slide 23: Credit Quality - Commercial Leases
4Q11 Earnings Credit Quality - Commercial Leases Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 4Q10 3Q11 4Q11 Average Loans 6,012 5,860 5,834 8,000 6.0% 30-89 Delinquencies 1.34% 0.93% 0.96% 6,012 6,030 5,919 5,860 5,834 90+ Delinquencies 0.02% 0.02% 0.00% 6,0
Slide 24: Credit Quality - Commercial Real Estate
4Q11 Earnings Credit Quality - Commercial Real Estate Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 4Q10 3Q11 4Q11 Average Loans 34,577 35,569 35,802 40,000 35,499 35,569 35,802 10.0% 30-89 Delinquencies 1.20% 0.44% 0.38% 34,577 35,179 90+ Delinquencies 0.00%
Slide 25: Credit Quality - Residential Mortgage
4Q11 Earnings Credit Quality - Residential Mortgage Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 4Q10 3Q11 4Q11 Average Loans 29,659 34,026 36,256 40,000 36,256 6.0% 34,026 30-89 Delinquencies 1.48% 1.09% 1.09% 31,777 32,734 29,659 90+ Delinquencies 1.63% 1.0
Slide 26: Credit Quality - Credit Card
4Q11 Earnings Credit Quality - Credit Card Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 4Q10 3Q11 4Q11 Average Loans 16,403 16,057 16,271 20,000 16.0% 30-89 Delinquencies 1.60% 1.38% 1.37% 16,403 16,124 15,884 16,057 16,271 90+ Delinquencies 1.86% 1.28% 1.36%
Slide 27: Credit Quality - Home Equity
4Q11 Earnings Credit Quality - Home Equity Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 4Q10 3Q11 4Q11 Average Loans 19,119 18,510 18,281 24,000 6.0% 30-89 Delinquencies 0.93% 0.83% 0.90% 19,119 18,801 18,634 18,510 18,281 90+ Delinquencies 0.78% 0.67% 0.73%
Slide 28: Credit Quality - Retail Leasing
4Q11 Earnings Credit Quality - Retail Leasing Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 4Q10 3Q11 4Q11 Average Loans 4,459 5,097 5,150 6,000 3.0% 4,808 5,097 5,150 30-89 Delinquencies 0.37% 0.19% 0.19% 4,459 4,647 90+ Delinquencies 0.05% 0.02% 0.02% 4,000
Slide 29: Credit Quality - Other Retail
4Q11 Earnings Credit Quality - Other Retail Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 4Q10 3Q11 4Q11 Average Loans 24,983 24,773 24,901 28,000 6.0% 24,983 24,691 24,498 24,773 24,901 30-89 Delinquencies 0.85% 0.67% 0.68% 90+ Delinquencies 0.26% 0.20% 0.20%
Slide 30: Non-Regulatory Capital Ratios
4Q11 Earnings Non-Regulatory Capital Ratios Conference Call $ in millions 4Q11 3Q11 2Q11 1Q11 4Q10 Total equity $ 34,971 $ 34,210 $ 33,341 $ 31,335 $ 30,322 Preferred stock (2,606) (2,606) (2,606) (1,930) (1,930) Noncontrolling interests (993) (980) (889) (828) (803) Goodwill (net of deferred tax li
Slide 31: U.S. Bancorp 4Q11 Earnings Conference Call
U.S. Bancorp 4Q11 Earnings Conference Call January 18, 2012