U.s. Bancorp · NYSE:USB
U.s. Bancorp — Barclays 2015 Global Financial Services Conference
28 slides from U.s. Bancorp's conference presentation, Sep 17, 2015
Slide 1: Barclays 2015 Global Financial Services Conference
Barclays 2015 Global Financial Services Conference September 17, 2015 Richard K. Davis Chairman, President and CEO Exhibit 99.1
Slide 2: Agenda
Agenda Company Overview Business Line Highlight: Payment Services 3Q Update Long-term Goals
Slide 3: U.S. Bancorp 2Q15 Dimensions
U.S. Bancorp 2Q15 Dimensions Market value as of 9/15/15 NYSE Traded USB Founded Market Value $74B Branches 3,164 ATMs 5,020 Customers 18.5M Assets $419B Deposits $297B Loans $249B
Slide 4: Industry Position
5 U.S. Bancorp 419 5 U.S. Bancorp 297 5 U.S. Bancorp 74 Industry Position Source: company reports, SNL and FactSet Assets and deposits as of 6/30/15, market value as of 9/15/15 Assets Market Value Deposits U.S. U.S. U.S. Rank Company $ Billions Rank Company $ Billions Rank Company $ Billions J.P. Mo
Slide 5: Capital Management
27% 29% 31% 32% 32% Capital Management Earnings Distribution Target 35% 42% 41% 38% 44% 0% 25% 50% 75% 100% 1Q15 2Q15 Dividends Share Repurchases 62% 70% 76% 71% 72% Annual dividend increased from $0.98 to $1.02 per share in 2Q15, a 4.1% increase Five-quarter authorization to repurchase up to $3.0 b
Slide 6: Industry Leading Returns 2Q15
Industry Leading Returns 2Q15 Source: SNL and company reports; Peer banks: BAC, BBT, FITB, JPM, KEY, PNC, RF, STI and WFC Efficiency ratio computed as noninterest expense divided by the sum of net interest income on a taxable-equivalent basis and noninterest income excluding net securities gains (lo
Slide 7: Profitability Drivers
Profitability Drivers Revenue Diversification Best in Class Debt Ratings Efficiency Credit Quality
Slide 8: Profitability Drivers: Revenue Diversification
Consumer and Small Business Banking 42% Payment Services 30% Wealth Mgmt and Securities Services 11% Wholesale Banking and Commercial Real Estate 17% Profitability Drivers: Revenue Diversification Revenue Mix By Business Line Fee Income / Total Revenue 46% 45% 45% 45% 35% 40% 45% 50% 55% 1H15 2015 Y
Slide 9: Profitability Drivers: Best in Class Debt Rating
Profitability Drivers: Best in Class Debt Rating Debt ratings: holding company as of 9/15/15 USB is highest rated peer bank across all rating agencies Funding advantage Competitive advantages – Pricing – Flight-to-quality – Sales Force Confidence
Slide 10: Profitability Drivers: Efficiency
Profitability Drivers: Efficiency USB efficiency ratio is best in class Challenging revenue growth under current economic conditions supports our continued and expanding efficiency efforts
Slide 11: Profitability Drivers: Credit Quality
Profitability Drivers: Credit Quality $ in millions Net Charge-offs Net Charge-offs (Left Scale) NCOs to Avg Loans (Right Scale) Nonperforming Assets Nonperforming Assets (Left Scale) NPAs to Loans plus ORE (Right Scale) $349 $336 $308 $279 $296 0.58% 0.55% 0.50% 0.46% 0.48% 0.00% 0.75% 1.50% 2.25%
Slide 12: Profitability Drivers: Credit Quality
Profitability Drivers: Credit Quality $ in millions Allowance to Loans Allowance to NPAs 229% 230% 242% 257% 274% 0% 100% 200% 300% 400% 2Q14 3Q14 4Q14 1Q15 2Q15 Total Allowance for Credit Losses (Left Scale) Allowance % of period-end loans (Right Scale) Allowance to NPAs 4,449 4,414 4,375 4,351 4,3
Slide 13: Growth Drivers: Loans
6.9% 6.1% 4.2% 6.5% 4.8% 5.9% 4.9% 3.6% 2.4% 1.3% 4.0%* 5.7%* Growth Drivers: Loans $ in billions * Excluding the impact of the reclassification of approximately $3 billion of student loans to held for sale at the end of 1Q15 Average Balances Year-Over-Year Growth Retail: Strengthening Commercial: R
Slide 14: Agenda
Agenda Company Overview Business Line Highlight: Payment Services 3Q Update Long-term Goals
Slide 15: Leader in Payment Services
30% Leader in Payment Services Fast growing , dynamic industry Provides a full suite of diversified payment processing services to consumers, small businesses, corporations and merchants – a unique position versus other banks Expanding internationally in merchant acquiring through continued investme
Slide 16: Payment Services Competitive Advantages
Payment Services Competitive Advantages Full Suite of Payment Products and Services Innovation and Technology Platforms Breadth and Depth of Capabilities Financial Institution Distribution Visibility into Both Issuing and Acquiring Trends, Technology & Opportunities for Scale Relative Scale Relative
Slide 17: Advantage: Diversification of Product, Geography and Distribution
Advantage: Diversification of Product, Geography and Distribution Distribution – 3,164 U.S. Bank branches – Elan has over 1,500 financial institution clients – a unique position vs other banks – Cobrand/affinity relationships with more than 60 customers – Merchant acquiring in 19 countries Product –
Slide 18: Advantage: Payments Innovation
Key achievements Fifteen “Firsts” in the Industry Awards in seven of past eight years Recognized Industry Leadership in Mobile, Digital, and Payments Innovation Averaging two pilots per quarter ~50% move to commercialization Why it matters Key to winning marquee business Among first to offer Apple P
Slide 19: Relative Scale Matters
Relative Scale Matters Ranking Annual Volume #5 U.S. credit card issuer $64 billion #5 U.S. debit card issuer $58 billion #3 U.S. corporate card issuer $54 billion #5 U.S. merchant acquirer #4 European merchant acquirer Source: The Nilson Report (Visa and MasterCard issuers) $375 billion
Slide 20: Agenda
Agenda Company Overview Business Line Highlight: Payment Services 3Q Update Long-term Goals
Slide 21: Student Loan Sale Timeline
Student Loan Sale Timeline 3Q15 Student Loan Update Disruption in the student loan securitization market occurred after the launch of the Company’s student loan sale Company will return student loans to portfolio A negative market adjustment of ($55 - $60) million will be recognized in 3Q15 and is e
Slide 22: 3Q15 Notable Events
3Q15 Notable Events Student Loan Market Adjustment ($55 - $60) million Elevated 3Q15 Expenses ($50 - $60) million (not expected to repeat in 4Q) – Mortgage-related compliance – Talent upgrade costs VISA Gain $120 - $130 million Total Impact Relatively Neutral
Slide 23: 3Q15 Linked Quarter Performance
3Q15 Linked Quarter Performance Loan Growth: 1-1.5% growth Credit Quality: Relatively stable Net Interest Margin: Relatively stable Mortgage Fees: Slightly lower Payment Fees: Seasonally higher Noninterest Expense: Expense increasing vs. 2Q15 – Core expense flat * As presented on slide 23 3Q15 expen
Slide 24: Agenda
Agenda Company Overview Business Line Highlight: Payment Services 3Q Update Long-term Goals
Slide 25: Long-term Goals
Long-term Goals Long-term Goals Optimal business line mix Investments generating positive returns Profitability: ROE 16-19% ROA 1.60-1.90% Efficiency Ratio low 50s Capital distributions: Earnings distribution 60-80% Current Status Four simple and stable business lines Mortgage, wealth management, co
Slide 26: Appendix
Appendix
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures Line of Business Financial Performance Taxable-equivalent basis $ in millions Revenue Line of Business Financial Performance 2Q15 YTD Wholesale Banking and Commercial Real Estate 1,447 $ Consumer and Small Business Banking 3,545 Wealth Management and Securities Services P
Slide 28: Barclays 2015 Global Financial Services Conference
Barclays 2015 Global Financial Services Conference
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