U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q3 2021 Earnings Presentation
31 slides from U.s. Bancorp's earnings presentation, Oct 14, 2021
Slide 1: U.S. Bancorp 3Q21 Earnings Conference Call
U.S. Bancorp 3Q21 Earnings Conference Call October 14, 2021 U.S. BANCORP
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: 3Q21 Highlights
3Q21 Highlights Income Statement change vs. Credit Quality change vs. $ in millions, except EPS 3Q21 2Q21 3Q20 $ in millions 3Q21 2Q21 3Q20 Net interest income* $3,197 1.0 % (1.7) % Nonperforming assets $944 (10.9) % (25.7) % Noninterest income 2,693 2.8 (0.7) NPA ratio 0.32 % (4 bps) (9 bps) Report
Slide 4: Performance Ratios
Performance Ratios Return on Return on Return on Efficiency Ratio* & Average Assets Average Common Equity Tangible Common Equity* Net Interest Margin** 20.9% 20.2% 59.0% 58.4% 1.44% 1.45% 16.3% 56.6% 15.9% 16.6% 1.17% 12.8% 2.67% 2.53% 2.53% 3Q20 2Q21 3Q21 3Q20 2Q21 3Q21 3Q20 2Q21 3Q21 3Q20 2Q21 3Q2
Slide 5: Digital Engagement Trends
Digital Engagement Trends Digital Active Customers (% of Total Active Customers)* Transactions (% of Total) 79% 80% 76% 80% 76% 80% 72% 67% 62% 56% 60% 60% 51% 51% 51% 43% 40% 33% 40% 24% 20% 20% 20% 0% Three months ended 0% 8/31/19 8/31/20 8/31/21 8/31/19 8/31/20 8/31/21 Mobile Online Total Digital
Slide 6: Business Banking and Payments Trends
Business Banking and Payments Trends Banking and Payments* Relationships Business Banking Payments 72.0% 28.0% 49.6% 50.4% Business Business Banking & Business Banking & Payments only Banking only Payments Payments With 1.1 million business banking relationships**, there is a significant opportunity
Slide 7: Average Loans
Average Loans Change vs. (Three months ended 9/30/21) Avg. Balances 2Q21 3Q20 $311.0 Commercial $101.8 (1.1) % (11.8) % $294.3 $296.7 Commercial Real Estate 38.9 0.9 (4.9) Residential Mortgages 74.1 1.0 (2.2) Credit Card 21.9 3.7 (0.7) Retail 60.0 2.9 5.7 Total loans $296.7 0.8 % (4.6) % • On a link
Slide 8: Average Deposits
Average Deposits Interest-bearing Deposits $429.2 $431.5 Average Change vs. Change $405.5 (Three months ended 9/30/21) Balances 2Q21 3Q20 Rates vs. 2Q21 Money market savings $112.6 (1.0) % (9.3) % 0.17 % (0.01) % Interest checking 103.0 (0.3) 21.9 0.02 (0.01) Savings accounts 63.4 2.1 18.5 0.01 - Ti
Slide 9: Credit Quality
Credit Quality Net Charge-offs Nonperforming Assets $515 $1,270 $1,059 NCO Ratio NPAs $944 0.66% -5 bps QoQ -10.9% QoQ $180 -46 bps YoY 0.41% 0.36% 0.32% -25.7% YoY 0.25% $147 0.20% 3Q20 2Q21 3Q21 3Q20 2Q21 3Q21 NCOs NCOs/Avg Loans NPAs NPAs/Period-end Loans plus OREO Provision for Credit Losses All
Slide 10: Earnings Summary
Earnings Summary $ and shares in millions, except EPS Reported % Change 3Q21 2Q21 3Q20 vs. 2Q21 vs. 3Q20 Net Interest Income $3,171 $3,137 $3,227 1.1 (1.7) Taxable-equivalent Adjustment 26 27 25 (3.7) 4.0 Net Interest Income (taxable-equivalent basis) 3,197 3,164 3,252 1.0 (1.7) Noninterest Income 2
Slide 11: Net Interest Income
Net Interest Income $3,252 $3,197 Linked Quarter $3,164 • Net interest income increased, primarily due to higher loan fees primarily related to the SBA Paycheck Protection Program, lower premium amortization in the investment portfolio, and one more day in the quarter, partially offset by lower loan
Slide 12: Noninterest Income
Noninterest Income $2,712 $2,693 Linked Quarter $2,619 • Mortgage banking revenue increased, driven by higher production volume and $553 $346 $418 related gain on sale margins as well as higher loan sales, partially offset by a slightly unfavorable net impact of the change in fair value of mortgage
Slide 13: Payment Services
Payment Services % of Merchant Acquiring Payment Fees as a % of Net Revenue Volume Merchant Acquiring 2019 3Q21 2019 3Q21 Travel & Hospitality* 22% 24% • Volumes in each of our Airline 15% 8% payments businesses 7.0% continue to rebound due 6.7% All Other 63% 68% to a strengthening 6.1% 6.6% % of CP
Slide 14: Noninterest Expense
Noninterest Expense Linked Quarter $3,371 $3,387 $3,429 • Compensation increased, due to performance-based incentives, $334 $362 $361 revenue-related compensation driven by business production, and one $276 $258 $259 extra day in the quarter. $244 $263 $294 • Professional services expense increased,
Slide 15: Capital Position
Capital Position $ in billions 3Q21 2Q21 1Q21 4Q20 3Q20 Total U.S. Bancorp shareholders' equity $53.7 $53.0 $51.7 $53.1 $52.6 Basel III Standardized Approach* Common equity tier 1 capital ratio 10.2% 9.9% 9.9% 9.7% 9.4% Tier 1 capital ratio 11.7% 11.5% 11.5% 11.3% 11.0% Total risk-based capital rati
Slide 16: Appendix
Appendix U.S. BANCORP | 16
Slide 17: Average Loans
Average Loans Average Loans ($bn) Key Points Year-over-Year Growth vs. 3Q20 • Average total loans decreased by $14.3 billion, or 4.6% 6.4% 2.5% (1.2%) (7.5%) (4.6%) • Average other retail loans increased $3.2 billion, $311.0 or 5.7% $302.3 $294.0 $294.3 $296.7 • Average commercial loans decreased by
Slide 18: Average Deposits
Average Deposits Average Deposits ($bn) Key Points Year-over-Year Growth vs. 3Q20 15.9% 18.5% 17.5% 6.4% 6.4% • Average total deposits increased by $426.4 $429.2 $431.5 $26.0 billion, or 6.4% $422.4 $405.5 • Average low-cost deposits (NIB, interest 55.0% 59.6% 31.7% 18.0% checking, savings and money
Slide 19: Credit Quality – Commercial
Credit Quality – Commercial Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth, including PPP $mm 3Q20 2Q21 3Q21 (9.8%) (7.9%) (4.1%) 0.9% (1.1%) Average Loans $115,489 $102,974 $101,832 Linked Quarter Growth, excluding PPP 30-89 Delinquencies 0.22% 0.17% 0.16% (12.5%
Slide 20: Credit Quality – Commercial Real Estate
Credit Quality – Commercial Real Estate Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 3Q20 2Q21 3Q21 Average Loans $40,929 $38,564 $38,921 (0.4%) (2.0%) (3.3%) (0.6%) 0.9% 30-89 Delinquencies 0.23% 0.08% 0.08% 90+ Delinquencies -% 0.01% 0.05% $40,929 $40,098
Slide 21: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 3Q20 2Q21 3Q21 Average Loans $75,786 $73,351 $74,104 6.6% 1.3% (2.1%) (2.5%) 1.0% 30-89 Delinquencies 0.31% 0.24% 0.20% $75,786 $76,809 $75,201 90+ Delinquencies 0.15% 0.16% 0
Slide 22: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 3Q20 2Q21 3Q21 Average Loans $22,052 $21,116 $21,905 2.5% (0.5%) (3.6%) (0.1%) 3.7% 30-89 Delinquencies 0.94% 0.72% 0.83% 90+ Delinquencies 0.91% 0.70% 0.66% $22,052 $21,937 $21,144 $2
Slide 23: Credit Quality – Home Equity
Credit Quality – Home Equity Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 3Q20 2Q21 3Q21 Average Loans $13,551 $11,368 $10,936 (5.8%) (5.4%) (5.9%) (5.8%) (3.8%) 30-89 Delinquencies 0.35% 0.33% 0.43% 90+ Delinquencies 0.37% 0.36% 0.37% $13,551 Nonperforming
Slide 24: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 3Q20 2Q21 3Q21 0.3% (1.6%) (3.9%) (1.3%) (2.9%) Average Loans $8,438 $7,873 $7,643 30-89 Delinquencies 0.38% 0.31% 0.34% $8,438 $8,299 90+ Delinquencies 0.06% 0.03% 0.03% $7,975 $7,
Slide 25: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 3Q20 2Q21 3Q21 Average Loans $34,773 $39,038 $41,398 3.6% 3.3% 2.2% 6.3% 6.0% 30-89 Delinquencies 0.51% 0.35% 0.42% $41,398 90+ Delinquencies 0.07% 0.05% 0.05% $39,038 $35,928 $36,730
Slide 26: Credit Quality – Auto Loans
Credit Quality – Auto Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 3Q20 2Q21 3Q21 Linked Quarter Growth Average Loans $18,823 $21,198 $22,728 0.3% 3.0% 2.5% 6.6% 7.2% 30-89 Delinquencies 0.68% 0.47% 0.56% $21,198 $22,728 90+ Delinquencies 0.05% 0.04% 0.05% $19,390 $19,881 N
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures (Dollars in Millions, Unaudited) Three Months Ended September 30, June 30, September 30, 2021 2021 2020 Net interest income $3,171 $3,137 $3,227 Taxable-equivalent adjustment (4) 26 27 25 Net interest income, on a taxable-equivalent basis 3,197 3,164 3,252 Net interest in
Slide 28: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended September 30, June 30, September 30, (Dollars in Millions, Unaudited) 2021 2021 2020 Net income applicable to U.S. Bancorp common shareholders $1,934 $1,914 $1,494 Intangibles amortization (net-of-tax) 32 32 35 Net income applicable to U.S. Bancorp comm
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures September 30, June 30, March 31, December 31, September 30, (Dollars in Millions, Unaudited) 2021 2021 2021 2020 2020 Total equity $54,378 $53,674 $52,308 $53,725 $53,195 Preferred stock (5,968) (5,968) (5,968) (5,983) (5,984) Noncontrolling interests (635) (635) (630) (6
Slide 30: Notes
Notes (1) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements. (2) Includes the estimated increase in the allowance for credit losses related to the adoption of the current expected credit losses methodology net of deferred
Slide 31: U.S. Bancorp 3Q21 Earnings Conference Call
U.S. Bancorp 3Q21 Earnings Conference Call October 14, 2021 U.S. BANCORP