U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q2 2021 Earnings Presentation
30 slides from U.s. Bancorp's earnings presentation, Jul 15, 2021
Slide 1: U.S. Bancorp 2Q21 Earnings Conference Call
U.S. Bancorp 2Q21 Earnings Conference Call July 15, 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: 2Q21 Highlights
2Q21 Highlights Income Statement change vs. Credit Quality change vs. $ in millions, except EPS 2Q21 1Q21 2Q20 $ in millions 2Q21 1Q21 2Q20 Net interest income* $3,164 2.4 % (1.9) % Nonperforming assets $1,059 (11.9) % (9.7) % Noninterest income 2,619 10.0 0.2 NPA ratio 0.36 % (5 bps) (2 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** 24.3% 1.69% 19.0% 20.9% 62.1% 16.3% 57.6% 59.0% 1.44% 7.1% 0.51% 5.3% 2.62% 2.50% 2.53% 2Q20 1Q21 2Q21 2Q20 1Q21 2Q21 2Q20 1Q21 2Q21 2Q20 1Q21 2Q21
Slide 5: Digital Engagement Trends
Digital Engagement Trends Digital Active Customers (% of Total Active Customers)* Transactions (% of Total) 79% 80% 77% 80% 76% 80% 72% 67% 60% 60% 60% 55% 56% 50% 52% 47% 40% 33% 40% 24% 20% 20% 20% 0% Three months ended 0% 5/31/19 5/31/20 5/31/21 5/31/19 5/31/20 5/31/21 Mobile Online Total Digital
Slide 6: Average Loans
Average Loans Change vs. (Three months ended 6/30/21) Avg. Balances 1Q21 2Q20 $318.1 Commercial $103.0 0.9 % (19.6) % $294.0 $294.3 Commercial Real Estate 38.6 (0.6) (6.1) Residential Mortgages 73.3 (2.5) 3.1 Credit Card 21.1 (0.1) (1.8) Retail 58.3 2.7 3.4 Total loans $294.3 0.1 % (7.5) % • On a li
Slide 7: Average Deposits
Average Deposits Interest-bearing Deposits Average Change vs. Change $426.4 $429.2 (Three months ended 6/30/21) Balances 1Q21 2Q20 Rates vs. 1Q21 $403.3 Money market savings $113.7 (8.9) % (12.4) % 0.18 % 0.02 % Interest checking 103.3 6.1 23.4 0.03 0.01 Savings accounts 62.1 5.5 21.2 0.01 - Time de
Slide 8: Credit Quality
Credit Quality Net Charge-offs Nonperforming Assets $437 $1,173 $1,202 $1,059 NCO Ratio NPAs 0.55% $223 -6 bps QoQ -11.9% QoQ 0.31% $180 0.38% 0.41% 0.36% -30 bps YoY -9.7% YoY 0.25% 2Q20 1Q21 2Q21 2Q20 1Q21 2Q21 NCOs NCOs/Avg Loans NPAs NPAs/Period-end Loans plus OREO Provision for Credit Losses Al
Slide 9: Earnings Summary
Earnings Summary $ and shares in millions, except EPS Reported % Change 2Q21 1Q21 2Q20 vs. 1Q21 vs. 2Q20 Net Interest Income $3,137 $3,063 $3,200 2.4 (2.0) Taxable-equivalent Adjustment 27 26 24 3.8 12.5 Net Interest Income (taxable-equivalent basis) 3,164 3,089 3,224 2.4 (1.9) Noninterest Income 2,
Slide 10: Net Interest Income
Net Interest Income $3,224 Linked Quarter $3,089 $3,164 • Net interest income increased, primarily driven by higher yields and volumes in the investment portfolio, favorable earning asset mix, higher loan fees, one more day in the quarter, and favorable deposit and funding mix, partially offset by l
Slide 11: Noninterest Income
Noninterest Income $2,614 $2,619 Linked Quarter $2,381 • Mortgage banking revenue increased, due to the favorable net impact of the $346 change in fair value of mortgage servicing rights, net of hedging activities, $648 $299 partially offset by lower production volume and related gain on sale margin
Slide 12: Payment Services
Payment Services % of Merchant Acquiring Payment Fees as a % of Net Revenue Volume Merchant Acquiring 2019 2Q21 2019 2Q21 Travel & Hospitality* 22% 20% • Volumes in each of our Airline 15% 8% payments businesses 7.0% 6.5% continue to rebound due All Other 63% 72% to a strengthening 6.1% 6.8% % of CP
Slide 13: Noninterest Expense
Noninterest Expense Linked Quarter $3,318 $3,379 $3,387 • Compensation decreased, due to the impact of seasonally higher $309 $359 $362 stock-based compensation in the first quarter partially offset by the $258 impact of seasonal merit increases, one additional day in the second $271 $263 $215 $263
Slide 14: Capital Position
Capital Position $ in billions 2Q21 1Q21 4Q20 3Q20 2Q20 Total U.S. Bancorp shareholders' equity $53.0 $51.7 $53.1 $52.6 $51.9 Basel III Standardized Approach* Common equity tier 1 capital ratio 9.9% 9.9% 9.7% 9.4% 9.0% Tier 1 capital ratio 11.5% 11.5% 11.3% 11.0% 10.6% Total risk-based capital ratio
Slide 15: Appendix
Appendix U.S. BANCORP | 15
Slide 16: Average Loans
Average Loans Average Loans ($bn) Key Points Year-over-Year Growth vs. 2Q20 • Average total loans decreased by $23.8 billion, or 7.5% 10.0% 6.4% 2.5% (1.2%) (7.5%) • Average residential mortgage loans increased by $2.2 $318.1 $311.0 billion, or 3.1% $302.3 $294.0 $294.3 • Average commercial loans de
Slide 17: Average Deposits
Average Deposits Average Deposits ($bn) Key Points Year-over-Year Growth vs. 2Q20 16.8% 15.9% 18.5% 17.5% 6.4% • Average total deposits increased by $426.4 $429.2 $25.9 billion, or 6.4% $422.4 $403.3 $405.5 • Average low-cost deposits (NIB, interest 30.1% 55.0% 59.6% 31.7% checking, savings and mone
Slide 18: Credit Quality – Commercial
Credit Quality – Commercial Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 2Q20 1Q21 2Q21 Average Loans $128,039 $102,091 $102,974 20.8% (9.8%) (7.9%) (4.1%) 0.9% 30-89 Delinquencies 0.33% 0.19% 0.17% $128,039 90+ Delinquencies 0.07% 0.06% 0.04% $115,489 Nonpe
Slide 19: Credit Quality – Commercial Real Estate
Credit Quality – Commercial Real Estate Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 2Q20 1Q21 2Q21 Average Loans $41,088 $38,786 $38,564 2.5% (0.4%) (2.0%) (3.3%) (0.6%) 30-89 Delinquencies 0.25% 0.31% 0.08% 90+ Delinquencies -% 0.01% 0.01% $41,088 $40,929
Slide 20: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 2Q20 1Q21 2Q21 Average Loans $71,122 $75,201 $73,351 0.3% 6.6% 1.3% (2.1%) (2.5%) 30-89 Delinquencies 0.34% 0.28% 0.24% $75,786 $76,809 $75,201 90+ Delinquencies 0.16% 0.19% 0
Slide 21: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 2Q20 1Q21 2Q21 Average Loans $21,510 $21,144 $21,116 (9.8%) 2.5% (0.5%) (3.6%) (0.1%) 30-89 Delinquencies 1.08% 0.90% 0.72% 90+ Delinquencies 1.22% 0.95% 0.70% $21,510 $22,052 $21,937
Slide 22: Credit Quality – Home Equity
Credit Quality – Home Equity Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 2Q20 1Q21 2Q21 Average Loans $14,386 $12,062 $11,368 (3.0%) (5.8%) (5.4%) (5.9%) (5.8%) 30-89 Delinquencies 0.46% 0.37% 0.33% 90+ Delinquencies 0.37% 0.36% 0.36% $14,386 $13,551 Nonper
Slide 23: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 2Q20 1Q21 2Q21 (0.7%) 0.3% (1.6%) (3.9%) (1.3%) Average Loans $8,412 $7,975 $7,873 30-89 Delinquencies 0.51% 0.34% 0.31% $8,412 $8,438 $8,299 90+ Delinquencies 0.06% 0.01% 0.03% $7,
Slide 24: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 2Q20 1Q21 2Q21 Average Loans $33,550 $36,730 $39,038 -% 3.6% 3.3% 2.2% 6.3% 30-89 Delinquencies 0.43% 0.40% 0.35% $39,038 $35,928 $36,730 90+ Delinquencies 0.10% 0.07% 0.05% $33,550 $
Slide 25: Credit Quality – Auto Loans
Credit Quality – Auto Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 2Q20 1Q21 2Q21 Linked Quarter Growth Average Loans $18,758 $19,881 $21,198 (2.7%) 0.3% 3.0% 2.5% 6.6% 30-89 Delinquencies 0.56% 0.55% 0.47% 90+ Delinquencies 0.07% 0.06% 0.04% $21,198 Nonperforming Loans 0.2
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures (Dollars in Millions, Unaudited) Three Months Ended June 30, March 31, June 30, 2021 2021 2020 Net interest income $3,137 $3,063 $3,200 Taxable-equivalent adjustment (4) 27 26 24 Net interest income, on a taxable-equivalent basis 3,164 3,089 3,224 Net interest income, on
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended June 30, March 31, June 30, (Dollars in Millions, Unaudited) 2021 2021 2020 Net income applicable to U.S. Bancorp common shareholders $1,914 $2,175 $614 Intangibles amortization (net-of-tax) 32 30 34 Net income applicable to U.S. Bancorp common sharehol
Slide 28: Non-GAAP Financial Measures
Non-GAAP Financial Measures June 30, March 31, December 31, September 30, June 30, (Dollars in Millions, Unaudited) 2021 2021 2020 2020 2020 Total equity $53,674 $52,308 $53,725 $53,195 $52,480 Preferred stock (5,968) (5,968) (5,983) (5,984) (5,984) Noncontrolling interests (635) (630) (630) (630) (
Slide 29: 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 30: U.S. Bancorp 2Q21 Earnings Conference Call
U.S. Bancorp 2Q21 Earnings Conference Call July 15, 2021 U.S. BANCORP