U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q4 2015 Earnings Presentation
26 slides from U.s. Bancorp's earnings presentation, Jan 15, 2016
Slide 1: U.S. Bancorp 4Q15 Earnings Conference Call
U.S. Bancorp 4Q15 Earnings Conference Call Richard K. Davis Chairman, President and CEO Kathy Rogers Vice Chairman and CFO January 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: Full Year 2015 Highlights
Full Year 2015 Highlights • Record net income of $5.9 billion; $3.16 per diluted common share • Industry-leading profitability measures, including ROA of 1.44%, ROCE of 14.0% and efficiency ratio of 53.8% • Average loan growth of 4.1%* vs. 2014 and average deposit growth of 7.7% vs. 2014 • Net charg
Slide 4: 4Q15 Highlights
4Q15 Highlights • Record revenue of $5.2 billion • Net income of $1.5 billion; $0.80 per diluted common share • Average loan growth of 1.7%* vs. 3Q15 and 4.2% vs. 4Q14 • Average deposit growth of 1.7% vs. 3Q15 and 6.9% vs. 4Q14 • Continued momentum in payment-related fee revenue led by a year-over-y
Slide 5: Performance Ratios
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 3.14% 3.08% 3.03% 3.04% 3.06% 14.4% 14.1% 14.3% 14.1% ROCE ROA 13.7% NIM 14% 2.0% 56% 2.8% 54.3% 54.3% 53.9% 53.9% 53.2% 1.50%
Slide 6: Revenue Growth
Revenue Growth $ in millions Year-Over-Year Change 5.7% 1.9% (2.8%) 3.1% 0.8% 5,500 $5,169 $5,147 $5,211 $5,042 5,000 $4,906 4,500 4,000 3,500 4Q14 1Q15 2Q15 3Q15 4Q15 Notable items: 2Q14 Visa gain $214 million; 4Q14 Nuveen gain $124 million; 3Q15 Visa gain $135 million, student loan market value ad
Slide 7: Loan and Deposit Growth
Loan and Deposit Growth $ in billions Year-Over-Year Growth Average Balances 6.9% 300 6.9% $294.5 8.9% $289.7 8.1% $285.7 7.2% $278.5 $275.5 275 3.8% 4.0% adjusted* adjusted* 4.2% 2.7% $256.7 5.9% 5.1% 2.5% $250.5 250 $246.4 $248.0 $246.6 225 200 4Q14 1Q15 2Q15 3Q15 4Q15 Loans Deposits * Loan growth
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% $1,808 $308 $1,696 $296 $305 $292 $1,577 $1,567 $279 $1,523 260 1.50% 1,400 1.50% 0.73% 0.69% 0.63% 0.61% 130 0.75% 700 0.58% 0.75% 0.50% 0.46% 0.48% 0.46% 0.47% 0 0.00% 0 0.00% 4Q14 1Q15 2Q
Slide 9: Earnings Summary
Earnings Summary $ and shares in millions, except per-share data % B/(W) FY FY 4Q15 3Q15 4Q14 vs 3Q15 vs 4Q14 2015 2014 % B/(W) Net Interest Income $ 2,871 $ 2,821 $ 2,799 1.8 2.6 $ 11,214 $ 10,997 2.0 Noninterest Income 2,340 2,326 2,370 0.6 (1.3) 9,092 9,164 (0.8) Net Revenue 5,211 5,147 5,169 1.2
Slide 10: Net Interest Income
Net Interest Income Net Interest Income Key Points $ in millions Year-Over-Year Change vs. 4Q14 2.4% 1.7% 0.9% 2.7% 2.6% • Average earning assets grew $18.1 billion, or 5.1% 4,000 8.0% • Net interest margin lower 8 bps (3.06% vs. 3.14%) − Change in loan portfolio mix, as well as growth in the invest
Slide 11: Noninterest Income
Noninterest Income Noninterest Income Key Points $ in millions vs. 4Q14 Year-Over-Year Change • Noninterest income decreased $30 million, or 1.3% 9.9% 2.2% (7.0%) 3.7% (1.3%) − Higher credit and debit card revenue (8.1% increase) due to higher 2,800 transaction volumes and higher merchant processing
Slide 12: Noninterest Expense
Noninterest Expense Noninterest Expense Key Points $ in millions vs. 4Q14 Year-Over-Year Change • Noninterest expense increased $5 million, or 0.2% 4.5% 4.8% (2.6%) 6.2% 0.2% − Higher compensation (5.3% increase) reflecting the impact of merit 3,200 increases and higher staffing for risk and complia
Slide 13: Capital Position
Capital Position $ in billions 4Q15 3Q15 2Q15 1Q15 4Q14 Total U.S. Bancorp shareholders' equity $ 46.1 $ 45.1 $ 44.5 $ 44.3 $ 43.5 Standardized Approach Basel III transitional standardized approach Common equity tier 1 capital ratio 9.6% 9.6% 9.5% 9.6% 9.7% Tier 1 capital ratio 11.3% 11.1% 11.0% 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. 4Q14 5.9% 5.1% 2.5% 2.7% 4.2% • Average total loans increased by $10.3 billion, 4.0%* 3.8%* 280 or 4.2% $248.0 $246.6 $250.5 $256.7 $246.4 (1.8%) 0.3% 4.0% • Average total commercial loans increased 3.6% 3.5% 210 5.7%* 5.
Slide 16: Average Deposits
Average Deposits Average Deposits Key Points $ in billions Year-Over-Year Growth vs. 4Q14 7.2% 8.1% 8.9% 6.9% 6.9% • Average total deposits increased by 320 $19.0 billion, or 6.9% $289.7 $294.5 $278.5 $285.7 $275.5 • Average low-cost deposits (NIB, interest 7.7% 9.2% 9.0% checking, money market and
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% 4Q14 3Q15 4Q15 $84,704 $86,803 Average Loans $79,625 $84,704 $86,803 $81,508 $83,253 $79,625 30-89 Delinquencies 0.31% 0.24% 0.36% 75,000 1.5% 90+ Delinquencies 0.05% 0.05% 0.05% Nonp
Slide 18: 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% 4Q14 3Q15 4Q15 Average Loans $40,966 $42,316 $42,231 $40,966 $42,671 $42,446 $42,316 $42,231 30-89 Delinquencies 0.26% 0.15% 0.21% 40,000 1.0% 90+ Delinquencies 0.05% 0.05% 0.03%
Slide 19: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 60,000 2.0% 4Q14 3Q15 4Q15 $52,970 $51,872 $51,426 $51,114 $51,831 Average Loans $51,872 $51,831 $52,970 30-89 Delinquencies 0.43% 0.35% 0.32% 45,000 1.5% 90+ Delinquencies 0.40% 0.33% 0.33% N
Slide 20: Credit Quality – Credit Card
Credit Quality – Credit Card $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 24,000 12.0% 4Q14 3Q15 4Q15 Average Loans $17,990 $17,944 $18,838 $18,838 30-89 Delinquencies 1.24% 1.27% 1.15% $17,990 $17,823 $17,613 $17,944 18,000 9.0% 90+ Delinquencies 1.13% 1.10% 1.09% Nonperfor
Slide 21: Credit Quality – Home Equity
Credit Quality – Home Equity $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 20,000 4.0% 4Q14 3Q15 4Q15 Average Loans $15,853 $16,083 $16,241 $15,853 $15,897 $15,958 $16,083 $16,241 30-89 Delinquencies 0.54% 0.36% 0.36% 15,000 3.0% 90+ Delinquencies 0.26% 0.25% 0.25% Nonperform
Slide 22: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 8,000 0.8% 4Q14 3Q15 4Q15 Average Loans $5,939 $5,480 $5,265 $5,939 30-89 Delinquencies 0.18% 0.18% 0.21% $5,819 $5,696 6,000 $5,480 0.6% 90+ Delinquencies 0.02% 0.02% 0.02% $5,265 Nonperforming Loa
Slide 23: Credit Quality – Other Retail
Credit Quality – Other Retail $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 40,000 2.0% 4Q14 3Q15 4Q15 Average Loans $27,317 $27,286 $29,556 $29,556 30-89 Delinquencies 0.51% 0.46% 0.52% 30,000 $27,317 $27,604 $27,286 1.5% 90+ Delinquencies 0.12% 0.10% 0.11% $25,415 Nonperfor
Slide 24: Credit Quality – Auto Loans
Credit Quality – Auto Loans $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 20,000 2.0% 4Q14 3Q15 4Q15 $16,551 Average Loans $14,644 $16,220 $16,551 $16,220 $15,609 30-89 Delinquencies 0.45% 0.40% 0.51% $14,644 $15,013 15,000 1.5% 90+ Delinquencies 0.03% 0.02% 0.04% Nonperformi
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures December 31, September 30, June 30, March 31, December 31, (Dollars in Millions, Unaudited) 2015 2015 2015 2015 2014 Total equity $46,817 $45,767 $45,231 $44,965 $44,168 Preferred stock (5,501) (4,756) (4,756) (4,756) (4,756) Noncontrolling interests (686) (692) (694) (68
Slide 26: U.S. Bancorp 4Q15 Earnings Conference Call
U.S. Bancorp 4Q15 Earnings Conference Call January 15, 2016