U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q2 2016 Earnings Presentation
27 slides from U.s. Bancorp's earnings presentation, Jul 15, 2016
Slide 1: U.S. Bancorp 2Q16 Earnings Conference Call
U.S. Bancorp 2Q16 Earnings Conference Call Richard K. Davis Chairman and CEO Kathy Rogers Vice Chairman and CFO July 15, 2016
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: 2Q16 Highlights
2Q16 Highlights • Record net income of $1.5 billion; $0.83 per diluted common share – Notable items related to equity investments, legal and regulatory matters and charitable contributions combined to increase diluted EPS by $0.01 • Record revenue, net income and diluted earnings per share on both a
Slide 4: Notable Items
Notable Items $ in millions 2Q16 1Q16 2Q15 Revenue Items Visa Europe gain $ 180 $ - $ - Expense Items Foundation contribution 40 - - Legal and regulatory matters accrual 110 - - Net pretax effect - gain / (loss) $ 30 $ - $ - After tax gain / (loss) $ 22 $ - $ - Net income to common $ 22 $ - $ - Dilu
Slide 5: Performance Ratios: Efficiency Ratio
Performance Ratios Return on Average Common Equity Efficiency Ratio and and Return on Average Assets Net Interest Margin 20% 3.0% 64% 4.0% 17% 2.5% 60% 3.4% Efficiency Ratio 3.03% 3.04% 3.06% 3.06% 3.02% 14.3% 14.1% ROCE 13.8% ROA 13.7% NIM 14% 13.0% 2.0% 56% 54.6% 54.9% 2.8% 53.9% 53.9% 53.2% 1.46%
Slide 6: Revenue Growth
Revenue Growth $ in millions Year-Over-Year Change (2.8%) 3.1% 0.8% 2.7% 8.1% 4.5% 6,000 excluding 2Q16 notable item* 5,500 $5,448 $5,211 $180 $5,147 $5,042 $5,037 5,000 4,500 4,000 2Q15 3Q15 4Q15 1Q16 2Q16 * Notable item: 2Q16 Visa Europe sale gain $180 million Taxable-equivalent basis U.S. BANCORP
Slide 7: Loan and Deposit Growth
Loan and Deposit Growth $ in billions Year-Over-Year Growth Average Balances 320 7.6% $307.4 6.9% 6.3% 6.9% $295.9 8.9% $294.5 $289.7 290 $285.7 6.5% * 5.2% * 8.1% 4.0% * 3.8% * 5.8% $266.6 4.2% $262.3 260 2.7% $256.7 2.5% $250.5 $246.6 230 200 2Q15 3Q15 4Q15 1Q16 2Q16 Loans Deposits * Adjusted for
Slide 8: Credit Quality
Credit Quality $ in millions Net Charge-offs Nonperforming Assets 520 3.00% 2,800 3.00% 390 2.25% 2,100 2.25% $315 $317 $1,719 $1,672 $296 $305 $292 $1,577 $1,567 $1,523 260 1.50% 1,400 1.50% 0.63% 0.61% 0.65% 0.62% 130 0.75% 700 0.58% 0.75% 0.48% 0.46% 0.47% 0.48% 0.48% 0 0.00% 0 0.00% 2Q15 3Q15 4Q
Slide 9: Energy Credit
Energy Credit Energy %Change %Change All Other %Change %Change 2Q16 1Q16 2Q15 vs. 1Q16 vs. 2Q15 2Q16 1Q16 2Q15 vs. 1Q16 vs. 2Q15 Loans $3,024 $3,417 $3,255 (12%) (7%) $265,497 $261,105 $245,384 2% 8% Commitments $11,329 $11,931 $12,459 (5%) (9%) $552,312 $544,426 $505,151 1% 9% Nonperforming Assets
Slide 10: Earnings Summary
Earnings Summary $ and shares in millions, except per-share data Reported Notable Excl Notable Items % B/(W) Items % B/(W) 2Q16 1Q16 2Q15 vs 1Q16 vs 2Q15 2Q16 vs 1Q16 vs 2Q15 Net Interest Income $ 2,896 $ 2,888 $ 2,770 0.3 4.5 $ - 0.3 4.5 Noninterest Income 2,552 2,149 2,272 18.8 12.3 180 10.4 4.4 N
Slide 11: Net Interest Income
Net Interest Income Net Interest Income Key Points $ in millions Year-Over-Year Change vs. 2Q15 0.9% 2.7% 2.6% 4.9% 4.5% • Average earning assets grew $18.9 billion, or 5.2% 4,000 8.0% • Net interest margin lower 1 bp (3.02% vs. 3.03%) − Due to lower average rates on new securities purchases and $2,
Slide 12: Noninterest Income
Noninterest Income Noninterest Income Key Points $ in millions vs. 2Q15 Year-Over-Year Change • Noninterest income increased $280 million, or 12.3% (4.4% (7.0%) 3.7% (1.3%) (0.2%) 12.3% excluding the Visa Europe sale) 4.4% − Higher credit and debit card revenue (11.3% increase) due to higher 3,000 a
Slide 13: Noninterest Expense
Noninterest Expense Noninterest Expense Key Points $ in millions vs. 2Q15 Year-Over-Year Change • Noninterest expense increased $310 million, or 11.6% (2.6%) 6.2% 0.2% 3.2% 11.6% (6.0% increase excluding notable expense items) 3,200 $2,992 − Higher compensation (6.8% increase) reflecting the impact
Slide 14: Capital Position
Capital Position $ in billions 2Q16 1Q16 4Q15 3Q15 2Q15 Total U.S. Bancorp shareholders' equity $ 47.4 $ 46.7 $ 46.1 $ 45.1 $ 44.5 Standardized Approach Basel III transitional standardized approach Common equity tier 1 capital ratio 9.5% 9.5% 9.6% 9.6% 9.5% Tier 1 capital ratio 11.1% 11.1% 11.3% 11.
Slide 15: Appendix
Appendix U.S. BANCORP | 15
Slide 16: Average Loans
Average Loans Average Loans Key Points $ in billions Year-Over-Year Growth vs. 2Q15 2.5% 2.7% 4.2% 5.8% 8.1% • Average total loans increased by $20.0 billion, 4.0%* 3.8%* 5.2%* 6.5%* or 8.1% (6.5% growth excluding the student 320 loans and the Fidelity portfolio acquisition at $256.7 $262.3 $266.6 e
Slide 17: Average Deposits
Average Deposits Average Deposits Key Points $ in billions Year-Over-Year Growth vs. 2Q15 8.9% 6.9% 6.9% 6.3% 7.6% • Average total deposits increased by 320 $307.4 $21.6 billion, or 7.6% $289.7 $294.5 $295.9 $285.7 2.4% • Average low-cost deposits (NIB, interest 9.0% 5.4% 240 7.7% 9.2% checking, mon
Slide 18: Credit Quality – Commercial Loans
Credit Quality – Commercial Loans $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 100,000 $92,154 2.0% 2Q15 1Q16 2Q16 $89,820 $84,704 $86,803 Average Loans $83,253 $89,820 $92,154 $83,253 30-89 Delinquencies 0.23% 0.21% 0.22% 75,000 1.5% 90+ Delinquencies 0.05% 0.05% 0.05% Nonp
Slide 19: Credit Quality – Commercial Real Estate
Credit Quality – Commercial Real Estate $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 60,000 1.5% 2Q15 1Q16 2Q16 Average Loans $42,446 $42,401 $42,988 $42,446 $42,316 $42,231 $42,401 $42,988 30-89 Delinquencies 0.12% 0.19% 0.11% 40,000 1.0% 90+ Delinquencies 0.05% 0.04% 0.03%
Slide 20: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 60,000 $55,501 2.0% 2Q15 1Q16 2Q16 $52,970 $54,208 $51,114 $51,831 Average Loans $51,114 $54,208 $55,501 30-89 Delinquencies 0.38% 0.24% 0.28% 45,000 1.5% 90+ Delinquencies 0.30% 0.31% 0.27% N
Slide 21: Credit Quality – Credit Card
Credit Quality – Credit Card $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 24,000 12.0% 2Q15 1Q16 2Q16 $20,244 $20,140 Average Loans $17,613 $20,244 $20,140 $18,838 30-89 Delinquencies 1.16% 1.09% 1.15% $17,613 $17,944 18,000 9.0% 90+ Delinquencies 1.03% 1.10% 0.98% Nonperfor
Slide 22: Credit Quality – Home Equity
Credit Quality – Home Equity $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 20,000 2.0% 2Q15 1Q16 2Q16 $15,958 $16,083 $16,241 $16,368 $16,394 Average Loans $15,958 $16,368 $16,394 15,000 1.5% 30-89 Delinquencies 0.36% 0.39% 0.36% 90+ Delinquencies 0.25% 0.26% 0.24% Nonperform
Slide 23: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 8,000 0.8% 2Q15 1Q16 2Q16 Average Loans $5,696 $5,179 $5,326 30-89 Delinquencies 0.17% 0.17% 0.18% 6,000 $5,696 0.6% $5,480 $5,326 90+ Delinquencies 0.00% 0.02% 0.00% $5,265 $5,179 Nonperforming Loa
Slide 24: Credit Quality – Other Retail
Credit Quality – Other Retail $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 40,000 2.0% 2Q15 1Q16 2Q16 Average Loans $25,415 $29,550 $29,748 $29,556 $29,550 $29,748 30-89 Delinquencies 0.48% 0.42% 0.47% 30,000 $27,286 1.5% 90+ Delinquencies 0.10% 0.10% 0.10% $25,415 Nonperfor
Slide 25: Credit Quality – Auto Loans
Credit Quality – Auto Loans $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 20,000 2.0% 2Q15 1Q16 2Q16 $16,551 $16,623 $16,690 Average Loans $15,609 $16,623 $16,690 $16,220 $15,609 30-89 Delinquencies 0.35% 0.39% 0.48% 15,000 1.5% 90+ Delinquencies 0.02% 0.02% 0.03% Nonperformi
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures June 30, March 31, December 31, September 30, June 30, (Dollars in Millions, Unaudited) 2016 2016 2015 2015 2015 Total equity $48,029 $47,393 $46,817 $45,767 $45,231 Preferred stock (5,501) (5,501) (5,501) (4,756) (4,756) Noncontrolling interests (639) (638) (686) (692) (
Slide 27: U.S. Bancorp 2Q16 Earnings Conference Call
U.S. Bancorp 2Q16 Earnings Conference Call July 15, 2016