U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q3 2015 Earnings Presentation
27 slides from U.s. Bancorp's earnings presentation, Oct 15, 2015
Slide 1: U.S. Bancorp 3Q15 Earnings Conference Call
U.S. Bancorp 3Q15 Earnings Conference Call Richard K. Davis Chairman, President and CEO Kathy Rogers Vice Chairman and CFO October 15, 2015
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: 3Q15 Highlights
3Q15 Highlights • Net income of $1.5 billion; record $0.81 per diluted common share • Average loan growth* of 1.3% vs. 2Q15 and 3.8% vs. 3Q14 • Average deposit growth of 1.4% vs. 2Q15 and 6.9% vs. 3Q14 • Positive trends in payments-related fee revenue − Credit and debit card revenue increased 7.2% v
Slide 4: 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% 3.16% Efficiency Ratio 3.14% 3.08% 3.03% 3.04% 14.5% 14.4% 14.3% 14.1% 14.1% ROCE ROA NIM 14% 2.0% 56% 2.8% 54.3% 54.3% 53.9% 53.2% 1.51% 52.4%
Slide 5: 3Q15 Notable Impacts to 3Q15 Earnings
3Q15 Notable Impacts to 3Q15 Earnings • Student Loan Market Adjustment ($58) million • Elevated 3Q15 Expenses ($60) million (not expected to repeat in 4Q15) − Mortgage-related Compliance − Talent Upgrade • Visa Gain $135 million Total Impact Relatively Neutral U.S. BANCORP | 5
Slide 6: Revenue Growth
Revenue Growth $ in millions Year-Over-Year Change 2.0% 5.7% 1.9% (2.8%) 3.1% 3.2% excluding 1.4% excluding 1.6% excluding 4Q14 notable 2Q14 notable 3Q15 notable 5,500 $5,169 $5,147 $124 $5,042 $77 $4,990 5,000 $4,906 4,500 4,000 3,500 3Q14 4Q14 1Q15 2Q15 3Q15 Notable items: 2Q14 Visa gain $214 mill
Slide 7: Loan and Deposit Growth
Loan and Deposit Growth $ in billions Year-Over-Year Growth Average Balances 300 6.9% 8.9% $289.7 8.1% $285.7 7.2% $278.5 7.4% $275.5 275 $271.0 4.0% 3.8% adjusted* adjusted* 5.1% 2.7% 5.9% 2.5% $250.5 6.3% $248.0 250 $246.4 $246.6 $243.9 225 200 3Q14 4Q14 1Q15 2Q15 3Q15 Loans Deposits * Excluding s
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 $1,923 2.25% $336 $1,808 $308 $1,696 $296 $292 $1,577 $1,567 $279 260 1.50% 1,400 1.50% 0.78% 0.73% 0.69% 0.63% 0.61% 130 0.55% 0.75% 700 0.75% 0.50% 0.46% 0.48% 0.46% 0 0.00% 0 0.00% 3Q14 4Q14 1Q
Slide 9: Earnings Summary
Earnings Summary $ and shares in millions, except per-share data % B/(W) YTD YTD 3Q15 2Q15 3Q14 vs 2Q15 vs 3Q14 2015 2014 % B/(W) Net Interest Income $ 2,821 $ 2,770 $ 2,748 1.8 2.7 $ 8,343 $ 8,198 1.8 Noninterest Income 2,326 2,272 2,242 2.4 3.7 6,752 6,794 (0.6) Net Revenue 5,147 5,042 4,990 2.1 3
Slide 10: Net Interest Income
Net Interest Income Net Interest Income Key Points $ in millions Year-Over-Year Change vs. 3Q14 1.3% 2.4% 1.7% 0.9% 2.7% • Average earning assets grew $22.8 billion, or 6.6% 4,000 8.0% • Net interest margin lower 12 bps (3.04% vs. 3.16%) − Change in loan portfolio mix, as well as growth in the inves
Slide 11: Noninterest Income
Noninterest Income Noninterest Income Key Points $ in millions vs. 3Q14 Year-Over-Year Change • Noninterest income increased $84 million, or 3.7% 3.0% 9.9% 2.2% (7.0%) 3.7% − Higher other income, principally due to the Visa sale, partially offset by the student loan market valuation adjustment 2,800
Slide 12: Noninterest Expense
Noninterest Expense Noninterest Expense Key Points $ in millions Year-Over-Year Change vs. 3Q14 1.9% 4.5% 4.8% (2.6%) 6.2% • Noninterest expense increased $161 million, or 6.2% 3,200 − Higher compensation (8.2% increase) reflecting the impact of merit $2,804 $2,775 increases and higher staffing for
Slide 13: Capital Position
Capital Position $ in billions 3Q15 2Q15 1Q15 4Q14 3Q14 Total U.S. Bancorp shareholders' equity $ 45.1 $ 44.5 $ 44.3 $ 43.5 $ 43.1 Standardized Approach Basel III transitional standardized approach Common equity tier 1 capital ratio 9.6% 9.5% 9.6% 9.7% 9.7% Tier 1 capital ratio 11.1% 11.0% 11.1% 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. 3Q14 6.3% 5.9% 5.1% 2.5% 2.7% • Average total loans increased by $6.7 billion, or 280 4.0%* 3.8%* 2.7% (3.8% excluding student loans which $243.9 $246.4 $248.0 $246.6 $250.5 were reclassified back to held for investment (
Slide 16: Average Deposits
Average Deposits Average Deposits Key Points $ in billions Year-Over-Year Growth vs. 3Q14 7.4% 7.2% 8.1% 8.9% 6.9% • Average total deposits increased by $18.7 320 billion, or 6.9% $285.7 $289.7 $275.5 $278.5 $271.0 • Average low-cost deposits (NIB, interest 240 3.3% 5.2% 7.7% 9.2% checking, money ma
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% 3Q14 2Q15 3Q15 Average Loans $72,190 $77,932 $79,486 $77,932 $79,486 $74,333 $76,183 30-89 Delinquencies 0.23% 0.19% 0.20% $72,190 75,000 1.5% 90+ Delinquencies 0.05% 0.05% 0.05% Nonp
Slide 18: Credit Quality – Commercial Leases
Credit Quality – Commercial Leases $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 9,000 2.1% 3Q14 2Q15 3Q15 Average Loans $5,155 $5,321 $5,218 30-89 Delinquencies 0.83% 0.81% 0.88% 6,000 $5,155 $5,292 $5,325 $5,321 $5,218 1.4% 90+ Delinquencies 0.00% 0.00% 0.00% Nonperforming
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% 3Q14 2Q15 3Q15 Average Loans $40,839 $42,446 $42,316 $40,839 $40,966 $42,671 $42,446 $42,316 30-89 Delinquencies 0.12% 0.12% 0.15% 40,000 1.0% 90+ Delinquencies 0.03% 0.05% 0.05%
Slide 20: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 60,000 2.0% 3Q14 2Q15 3Q15 $51,994 $51,872 $51,426 $51,114 $51,831 Average Loans $51,994 $51,114 $51,831 30-89 Delinquencies 0.46% 0.38% 0.35% 45,000 1.5% 90+ Delinquencies 0.41% 0.30% 0.33% 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% 3Q14 2Q15 3Q15 Average Loans $17,753 $17,613 $17,944 $17,753 $17,990 $17,823 $17,944 30-89 Delinquencies 1.23% 1.16% 1.27% $17,613 18,000 9.0% 90+ Delinquencies 1.10% 1.03% 1.10% Nonperfor
Slide 22: Credit Quality – Home Equity
Credit Quality – Home Equity $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 20,000 4.0% 3Q14 2Q15 3Q15 Average Loans $15,704 $15,958 $16,083 $15,704 $15,853 $15,897 $15,958 $16,083 30-89 Delinquencies 0.51% 0.36% 0.36% 15,000 3.0% 90+ Delinquencies 0.26% 0.25% 0.25% 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% 3Q14 2Q15 3Q15 Average Loans $5,991 $5,696 $5,480 $5,991 $5,939 30-89 Delinquencies 0.14% 0.17% 0.18% $5,819 $5,696 6,000 $5,480 0.6% 90+ Delinquencies 0.02% 0.00% 0.02% 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% 3Q14 2Q15 3Q15 Average Loans $27,003 $25,415 $27,286 30-89 Delinquencies 0.49% 0.48% 0.46% 30,000 $27,003 $27,317 $27,604 $27,286 1.5% 90+ Delinquencies 0.13% 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% 3Q14 2Q15 3Q15 Average Loans $14,404 $15,609 $16,220 $16,220 $15,609 30-89 Delinquencies 0.41% 0.35% 0.40% $14,644 $15,013 15,000 $14,404 1.5% 90+ Delinquencies 0.05% 0.02% 0.02% Nonperformi
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures September 30, June 30, March 31, December 31, September 30, (Dollars in Millions, Unaudited) 2015 2015 2015 2014 2014 Total equity $45,767 $45,231 $44,965 $44,168 $43,829 Preferred stock (4,756) (4,756) (4,756) (4,756) (4,756) Noncontrolling interests (692) (694) (688) (6
Slide 27: U.S. Bancorp 3Q15 Earnings Conference Call
U.S. Bancorp 3Q15 Earnings Conference Call October 15, 2015