U.s. Bancorp · NYSE:USB
U.s. Bancorp — Investor Day (September 2013)
170 slides from U.s. Bancorp's investor day presentation, Sep 12, 2013
Slide 1: U.S. Bancorp Investor Day September 12, 2013
U.S. Bancorp Investor Day September 12, 2013 U.S. Bancorp
Slide 2: Agenda
Agenda Time Topic Presenter 8:30-10:00 Strategic Overview Richard Davis Financial Management Andy Cecere Credit Risk Management Bill Parker 10:00-10:30 Break 10:30-11:00 Enterprise Revenue Focus Mac McCullough 11:00-11:30 Consumer and Small Business Banking Kent Stone and John Elmore 11:30-12:00 Who
Slide 3: 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 4: Strategic Overview
Strategic Overview Richard K. Davis Chairman, President and CEO U.S. Bancorp Investor Day September 12, 2013
Slide 5: What You Will Hear Today
Strategic Overview Financial Management Credit Risk Management Enterprise Revenue Focus Business Unit Strategies What You Will Hear Today 5
Slide 6: U.S. Bancorp
U.S. Bancorp International ‘Consumer & Business Banking Wholesale Banking Payments and Corporate Trust ‘and Wealth Management ‘and Wealth Management & Securities Services bancorp.
Slide 7: U.S. Bancorp Dimensions
U.S. Bancorp Dimensions * As of August 30, 2013 Asset Size $353 billion Deposits $252 billion Loans $228 billion Customers 17.6 million NYSE Traded USB Market Capitalization* $66 billion Founded 1863 Bank Branches 3,087 ATMs 5,032 2Q13 Dimensions 7
Slide 8: Industry Position
Industry Position Commercial banks; Source: company reports, SNL and FactSet Assets and deposits as of 2Q13, market value as of August 30, 2013 8
Slide 9: Business Mix
Business Mix Payment Services Retail Payment Solutions Corporate Payment Systems Global Merchant Acquiring Wealth Management and Securities Services Wealth Management Asset Management Corporate Trust Fund Services Institutional Trust & Custody Consumer and Small Business Banking Branch Banking Small
Slide 10: Risk Profile
Demonstrated financial and credit discipline Low operational losses vs. the industry Strong performance in key risk and control areas Low relative levels of customer complaints Constructive regulatory relationships Strong Board of Directors support, challenge and oversight A culture of transparency
Slide 11: Strong Defense (2001-2006)
Strong Defense Expense Driven Conservative Credit Culture Efficient Operating Model Strong Capital Generation Fortress Balance Sheet Diversification of Risk Low Revenue Volatility Strong Defense (2001 - 2006) 11
Slide 12: Investing for Growth (2007-2010)
Investing for Growth Flight-to-Quality Strong Defense Enterprise Revenue Office National Corporate Banking National Mortgage Banking Deposit Pricing Parity Brand Development Selective M&A / JVs Investing for Growth (2007 - 2010) Expense Driven Conservative Credit Culture Efficient Operating Model St
Slide 13: Positioned to Win (2011-2013)
Positioned to Win Flight-to-Quality Strong Defense Enterprise Revenue Office National Corporate Banking National Mortgage Banking Deposit Pricing Parity Brand Development Selective M&A / JVs Investing for Growth (2007 - 2010) Expense Driven Conservative Credit Culture Efficient Operating Model Stron
Slide 14: What You Heard in 2010
What You Heard in 2010 Our strong defense will continue... Our investments in profitable growth initiatives will continue... We are Positioned to Win by turning our focus to: Relevant scale Customer experience Leveraging technology Employee engagement What Did We Accomplish? Market Share Gain Strong
Slide 15: Relevant Scale
Relevant Scale Payment Services Wealth Management and Securities Services Consumer and Small Business Banking Wholesale Banking and Commercial Real Estate #4 U.S. Debit Card Issuer #5 U.S. Credit Card Issuer #3 U.S. Commercial Card Issuer #5 U.S. Merchant Acquirer #6 European Merchant Acquirer #19 A
Slide 16: Relevant Scale: Market Share
Relevant Scale Core Deposits 2.0% 2.6% Consumer Loans 1.8% 3.2% Mortgage Origination 0.7% 4.8% C&I Loans 3.2% 3.7% CRE Loans 1.6% 2.5% Source: SNL and Mortgagestats (mortgage origination data as of 1Q13) 2Q13 1Q07 USB Market Share Market Share Change Middle Market Loan 1.2% 7.0% Bookrunner Investmen
Slide 17: Customer Experience
Consumer Banking Overall - Gallup Branch Experience Key Driver Score Customer Experience Source: U.S. Bank Gallup survey, quarterly sample size of approximately 90,000 customers with an error range of +/- 0.3% at 95% confidence Source: U.S. Bank Gallup survey, quarterly sample size of approximately
Slide 18: Leveraging Technology
Leveraging Technology Branch automation Online banking leadership Mobile banking innovation Call center optimization Mortgage origination platform Kansas City technology center Infrastructure and obsolescence 18
Slide 19: Distinctive Leadership Practices
Distinctive Leadership Practices Five Year Engagement Trends (CHART) Source: Kenexa WorkTrends normative database Employee Engagement 19
Slide 20: Growth in Market Share
Growth in Market Share We are in an Advantaged Position to Grow Market Share 20
Slide 21: Growth in Market Share
Growth in Market Share Our Business Model Enables Industry Leading Growth and High Returns Industry Leading Growth and Profitability with Conservative Risk Profile 21
Slide 22: Shareholder Value Creation
Shareholder Value Creation Growth in Market Share Growth in Market Share and High Returns Create Long-term Value for Shareholders Industry Leading Growth and Profitability with Conservative Risk Profile 22
Slide 23: Total Shareholder Return Since Last Investor Day
Source: Bloomberg, September 15, 2010 to September 6, 2013, annualized Total Shareholder Return Total Shareholder Return Since Last Investor Day 23
Slide 24: Extending the Advantage
Expense Driven Conservative Credit Culture Efficient Operating Model Strong Capital Generation Fortress Balance Sheet Diversification of Risk Low Revenue Volatility Strong Defense (2001 - 2006) Market Share Gain Strong Defense Investing for Growth Relevant Scale Customer Experience Leveraging Techno
Slide 25: Extending the Advantage
Extending the Advantage EXTENDING tHE ADVANTAGE (Sbancorp.
Slide 26: U.S. Bancorp Investor Day Strategic Overview
U.S. Bancorp Investor Day Strategic Overview
Slide 27: Financial Management
U.S. Bancorp Investor Day Financial Management Andy Cecere Vice Chairman and CFO September 12, 2013
Slide 28: 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 29: Financial Management: Sustainable Competitive Advantage
Financial Management Sustainable Competitive Advantage Value creation Low risk Above market growth Industry leading returns Capital management Long-term growth expectations Low Risk Growth High Return 3
Slide 30: Revenue Mix By Business Line
Revenue Mix By Business Line (CHART) Consumer and Small Business Banking 47% Payment Services 26% Wealth Mgmt and Securities Services 8% Wholesale Banking and Commercial Real Estate 19% Fee Income / Total Revenue (CHART) Full year 2012, taxable-equivalent basis Excluding securities gains (losses) ne
Slide 31: Diversified Business Mix
Diversified Business Mix Source: FR Y-9C and company reports, 2012 full year Peer banks: BAC, BBT, FITB, JPM, KEY, PNC, RF, STI and WFC U.S. Bancorp Revenue Mix (CHART) (CHART) Peer Bank Average Revenue Mix Net Interest Income Payments Fee Revenue Fiduciary Activities Service Charges Mortgage Fees T
Slide 32: Low Risk Balance Sheet
Low Risk Balance Sheet Used to manage interest rate risk, provide liquidity, generate interest income and provide collateral 96% of the portfolio is concentrated in Government-Backed/Issued Securities (Treasuries and Agency Debentures, Agency MBS/CMOs, and Municipal Securities) Securities Portfolio
Slide 33: Low Risk Balance Sheet: Interest Rate Risk
Low Risk Balance Sheet Interest rate risk is the risk to the Company's earnings given changes in interest rates The Company uses net interest income simulation analysis for measuring and analyzing consolidated interest rate risk The Company is currently slightly asset sensitive Sensitivity of Net In
Slide 34: Low Risk Balance Sheet: Liquidity
Low Risk Balance Sheet On- and off-balance sheet liquidity is strong On-balance sheet - unencumbered high quality investment portfolio securities that could be pledged or sold for cash Off-balance sheet - loans pledged to the Federal Home Loan and Federal Reserve banks Liquidity Total On- and Off-Ba
Slide 35: Top of Class Debt Ratings
Debt ratings: holding company as of September 4, 2013; Debt spread as of September 1, 2013 Peer banks: BAC, BBT, FITB, JPM, KEY, PNC, RF, STI and WFC Top of Class Debt Ratings op=outlook positive on=outlook negative s=outlook stable wu = watch uncertain wn=watch negative wp=watch positive Flight to
Slide 36: Consistent Earnings Power
Consistent Earnings Power Dodd-Frank Act Stress Test results and USB internal stress test results and methodologies released March 7, 2013 Comprehensive Capital Analysis and Review results released March 14, 2013 The Federal Reserve did not object to USB's capital plan (CHART) (CHART) PPNR = Pre-Pro
Slide 37: Growth - Loans
Growth - Loans $ in millions Peer banks: BAC, BBT, FITB, JPM, KEY, PNC, RF, STI and WFC (CHART) 6.9% 5.8% 3.9% 4.4% 5.2% (CHART) 2010 Average Loans $193 billion 2Q13 Average Loans $225 billion Commercial Commercial Real Estate Res Mtg and Home Equity Credit Card Other Retail Covered 24% 18% 24% 15%
Slide 38: Growth - Deposits
Growth - Deposits (CHART) 10.6% 7.3% 10.1% 15.4% 7.0% (CHART) 2010 Average Deposits $185 billion 2Q13 Average Deposits $247 billion 22% 54% 24% (CHART) 27% 55% 18% Noninterest Bearing Checking and Savings Time USB +34% Peer Median +12% $ in millions Peer banks: BAC, BBT, FITB, JPM, KEY, PNC, RF, STI
Slide 39: Growth - Revenue and Earning Assets
Growth - Revenue and Earning Assets $ in millions, taxable-equivalent basis (CHART) Total Revenue Year-Over-Year Growth 4.4% 13.6% 8.9% 5.3% 6.2% USB Record Revenue 2012 (CHART) Average Earning Assets Year-Over-Year Growth 10.5% 10.3% 6.2% 12.4% 8.1% Growth 13
Slide 40: Industry Leading Returns
Industry Leading Returns Return on Average Assets Return on Average Common Equity Efficiency Ratio Full Year 2012 2Q13 YTD (CHART) (CHART) (CHART) (CHART) (CHART) (CHART) Source: SNL and company reports Peer banks: BAC, BBT, FITB, JPM, KEY, PNC, RF, STI and WFC High Return 14
Slide 41: High Returns on Capital
High Returns on Capital 2012 Return on Tangible Common Equity Source: SNL and company reports Peer banks: BAC, BBT, FITB, JPM, KEY, PNC, RF, STI and WFC (CHART) High return / capital efficient businesses Corporate Trust Merchant Processing Fund Services Treasury Management Corporate Payments Efficie
Slide 42: Efficient Expense Platform
Efficient Expense Platform Single processing platforms Full consolidation of acquisitions Operating scale in all significant businesses Business line monthly review process If our efficiency ratio was peer median, our ROE would decrease to 9.9% 2012 Efficiency Ratio (CHART) Peer banks: BAC, BBT, FIT
Slide 43: Disciplined Capital Allocation Process
Disciplined Capital Allocation Process Decision-making Approach - Acquisitions and Organic Initiatives Centrally managed review process, which includes data gathering, business line "expert" review and valuation analysis Acquisitions and investments sponsored by business line Vice Chairman Investmen
Slide 44: Prudent Investment Strategy
Prudent Investment Strategy Mortgage banking In-store and on-site branches Wholesale banking expansion Ascent Private Capital Management International payments expansion Internet and mobile banking channels Tier 4 data center Call center telephony Distribution channel integration (CHART) 2003 - 2007
Slide 45: Prudent Investment Strategy: Acquisitions
Prudent Investment Strategy Payments Collective Point of Sale Solutions Ltd FSV Payment Systems TransCard's heavy truck fuel card network Financial institutions credit card portfolio of FIA Card Services Merchant processing portfolio of Santander-Mexico Merchant processing portfolio of Citizens Nati
Slide 46: Capital Management: Competitive Position
G-SIBs = global systemically important banks Source: SNL, as of 2Q13, market value as of August 30, 2013 Competitive Position Capital Management Landscape G-SIBs Advanced Approaches Standardized Approach 20
Slide 47: Capital Management
Capital Management Capital Requirement Tangible book value (TBV) = book value per share excluding intangible assets other than mortgage servicing rights Return on tangible common equity (ROTCE) = net income, adjusted for after-tax amortization of intangibles, as a % of average tangible common equity
Slide 48: Capital Management: Earnings Distribution Target
Capital Management Earnings Distribution Target (CHART) 62% 69% 11% 32% 73% Reinvest and Acquisitions Dividends Share Repurchases 20 - 40% 30 - 40% 30 - 40% Payout Ratio 22
Slide 49: Long-term Growth Expectations
Long-term Growth Expectations Investor Day 2010 Long-term Growth Expectations Net Interest Income 5-7% Noninterest Income 8-10% Total Revenue 7-8% Noninterest Expense 4-5% Provision for Credit Losses 6-8% Net Income 8-9% EPS 8-10% 23
Slide 50: Long-term Growth Expectations
Long-term Growth Expectations Legislative impact includes Card Act, Overdraft Legislation and Durbin Amendment Unusual impact includes significant one-time items Provision normalized to 100 bps of loans Taxable-equivalent basis CAGR = compound annual growth rate; see appendix page 31 for specific ad
Slide 51: Long-term Growth Expectations
Long-term Growth Expectations 25
Slide 52: 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 53: Appendix
Appendix U.S. Bancorp Investor Day - Financial Management 27
Slide 54: Non-GAAP Financial Measures
Non-GAAP Financial Measures 28
Slide 55: Non-GAAP Financial Measures
Non-GAAP Financial Measures 29
Slide 56: Tangible Book Value and Return on Tangible Common Equity
Non-GAAP Financial Measures Tangible Book Value and Return on Tangible Common Equity 30
Slide 57: Adjustments: 2010 to 2012 CAGR
Non-GAAP Financial Measures Adjustments: 2010 to 2012 CAGR 31
Slide 58: U.S. Bancorp Investor Day Financial Management
U.S. Bancorp Investor Day Financial Management
Slide 59: Credit Risk Management
U.S. Bancorp Investor Day Credit Risk Management P.W. (Bill) Parker EVP and Chief Credit Officer September 12, 2013
Slide 60: 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 61: Lending Philosophy
Lending Philosophy Lending philosophy defined as: Relationship driven Centralized vs. decentralized (all credit risk governed by Credit) Lender accountability Active portfolio management Cash flow lenders Higher risk transactions in the context of relationships Characterized as prudent versus conser
Slide 62: Credit Risk Management: Portfolio Management
Credit Risk Management Portfolio Management The strategy for Credit Risk Management includes: Well-defined, centralized credit policies Diversification by product type on a geographic, industry and customer level Ongoing risk monitoring and review processes Regular credit examinations and management
Slide 63: Credit Risk Management: Credit Culture
Credit Risk Management Credit culture established at the top of the organization Risk Management Committee of USB Board of Directors reviews and approves: Risk management framework Appropriateness of the allowance Compliance with regulatory requirements Credit policy changes and exception guidelines
Slide 64: Credit Quality
Credit Quality * Excludes covered assets Continued Improvement in Overall Asset Quality Loan Delinquencies* Special Mention and Classified Assets To Tier 1 Capital + Allowance (CHART) 39.8% 35.5% 31.9% 30.0% 26.9% (CHART) 6
Slide 65: Credit Quality: Net Charge-offs and Nonperforming Assets
Credit Quality (CHART) $468 Net Charge-offs ($ in millions) Nonperforming Assets* ($ in millions) Net Charge-offs (Left Scale) NCOs to Avg Loans (Right Scale) Nonperforming Assets (Left Scale) NPAs to Loans plus ORE (Right Scale) (CHART) $433 $520 $538 $2,029 $2,256 $2,188 $2,088 $392 $1,921 * Exclu
Slide 66: Net Charge-off Volatility Versus Peers
Strong credit culture resulted in #1 ranking among peers for the lowest net charge-off volatility from 1Q03 - 2Q13 Reserve build was less than our peers - now have modest releases Peer Group Source: SNL Peer banks: BAC, BBT, FITB, JPM, KEY, PNC, RF, STI and WFC 8
Slide 67: Credit Risk Management: Normalized Losses
Credit Risk Management Normalized Losses Normalized losses are generally a function of historical performance and underwriting criteria; but may be adjusted for significant factors Changes in our Bank's underwriting criteria Material changes in industry underwriting criteria Changes in portfolio mix
Slide 68: Net Charge-offs - Investor Day 2010
USB Normalized Estimate 1.00% Credit Risk Management Net Charge-offs - Investor Day 2010 Losses well above normalized levels Sources: SNL, Federal Financial Institutions Examination Council (FFIEC) Consolidated Reports of Condition and Income Peer banks: BAC, BBT, FITB, JPM, KEY, PNC, RF, STI and WF
Slide 69: Net Charge-offs - Investor Day 2013
Credit Risk Management Net Charge-offs - Investor Day 2013 Losses now below normalized levels USB Normalized Estimate 1.00% Sources: SNL, Federal Financial Institutions Examination Council (FFIEC) Consolidated Reports of Condition and Income Peer banks: BAC, BBT, FITB, JPM, KEY, PNC, RF, STI and WFC
Slide 70: Loan Portfolio Normalized NCO%
Investor Day 2Q13 Investor Day 2Q13 Loan Portfolio Normalized NCO% Commercial 0.45% Commercial Real Estate 0.50% Small Business* 1.75% Residential Mortgages 0.60% Credit Cards 5.00% Other Retail 1.00% Covered Assets 0.25% Total 1.00% More significant segment today Investor Day 2Q10 Investor Day 2Q10
Slide 71: Indirect Auto Lending
Indirect Auto Lending * Source: Market share based on Experian Autocount data as of August 29, 2013 for total auto financing market (loans and leases from all sources), ranking shown among banks only (captives excluded) ** Source: JD Pin (JD Power and Associates), includes loans only; banks: Ally, C
Slide 72: Credit Quality: Originations
Credit Quality Strong originations while maintaining high level of credit quality Investor Day 2Q10 Investor Day 2Q10 Originations ($'s in Billions) Originations Originations Commercial/Commercial Real Estate $ 29.3 $ 29.3 Credit Cards 1.7 1.7 Mortgage and Other Retail 15.3 15.3 Total Originations $
Slide 73: U.S. Bancorp Investor Day Credit Risk Management
U.S. Bancorp Investor Day Credit Risk Management
Slide 74: Extending the Advantage
U.S. Bancorp Investor Day Extending the Advantage Richard K. Davis Chairman, President and CEO September 12, 2013
Slide 75: U.S. Bancorp Competitive Advantages
U.S. Bancorp Competitive Advantages USB Relative Position Versus Larger Competitors Versus Smaller Competitors Business Mix Risk Profile Low Risk Capital Generation Execution Industry Leading Returns Industry Position Scale Above Market Growth Advantaged Competitive Disadvantaged 2
Slide 76: Extending the Advantage
Flight-to-Quality Strong Defense Enterprise Revenue Office National Corporate Banking National Mortgage Banking Deposit Pricing Parity Brand Development Selective M&A / JVs Investing for Growth (2007 - 2010) Expense Driven Conservative Credit Culture Efficient Operating Model Strong Capital Generati
Slide 77: U.S. Bancorp Investor Day Extending the Advantage
U.S. Bancorp Investor Day Extending the Advantage
Slide 78: Enterprise Revenue Focus
U.S. Bancorp Investor Day September 12, 2013 Mac McCullough EVP and Chief Strategy Officer Enterprise Revenue Focus
Slide 79: 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 80: Enterprise Revenue Office
Enterprise Revenue Office Intensified focus on revenue growth Created enterprise focus on customers Launched Building Deeper Relationships Developed vision and roadmap to build out digital banking channels Mobile banking Online banking Flight-to-Quality Strong Defense Enterprise Revenue Office Natio
Slide 81: Launched Building Deeper Relationships
Launched Building Deeper Relationships 2007 2011 Process Product Packages Mortgage Referrals Relationship Review Changed focus, process and culture 4
Slide 82: Enterprise Revenue Office 2011-2013
Enterprise Revenue Office Market Share Gain Strong Defense Investing for Growth Relevant Scale Customer Experience Leveraging Technology Employee Engagement Positioned to Win (2011 - 2013) Expanded Building Deeper Relationships Customer experience Leveraging technology Delivered industry-leading dig
Slide 83: Expanded Building Deeper Relationships
Expanded Building Deeper Relationships 2007 2011 Process 2014 Technology Mobile Banking Online Banking Branch Automation Invested in and leveraged technology Product Packages Mortgage Referrals Relationship Review Changed focus, process and culture 6
Slide 84: Building Deeper Relationships Revenue
Expanded Building Deeper Relationships 2007 2011 Process 2014 Technology BDR Revenue (MM$) 2007 - 2013 $1,550 Actual/ Forecast $2,150 2007 - 2014 Target 1,725 Product Packages Mortgage Referrals Relationship Review Mobile Banking Online Banking Branch Automation Actual / forecast and target revenue
Slide 85: Industry-leading Digital Banking Channels: Mobile Banking
Industry-leading Digital Banking Channels U.S. Bank ranked #1 for Mobile App and 'most improved' among 13 leading banks U.S. Bank had the largest year- over-year increase in Mobile Banking Customer Satisfaction among the top-10 banks surveyed Mobile Banking U.S. Bank made the largest move among 15 l
Slide 86: Industry-leading Digital Banking Channels: Online Banking
Industry-leading Digital Banking Channels Online Banking Original Home Page (circa 2010) New Home Page 9
Slide 87: Industry-leading Digital Banking Channels: Online Banking
Industry-leading Digital Banking Channels Online Banking - 2010 to present Redesigned public site Simplified Online Apply Robust data analytics supporting online marketing and lead management 2013 Model Bank for Online Marketing and Lead Management U.S. Bank ranked #5 in Web Experience in 2013 out o
Slide 88: Industry-leading Digital Banking Channels: Online Banking 2013
Industry-leading Digital Banking Channels Online Banking - 4Q13 Launch of redesigned secure site Make targeted offers to customers based on profile and behavioral data Migration of servicing to digital channels to improve customer experience and reduce cost-to-serve More convenient and simplified pa
Slide 89: Enterprise Revenue Office: Extending the Advantage
Enterprise Revenue Office Shareholder Value Strong Defense Investing for Growth Positioned to Win Extending the Advantage Extending the Advantage (2014 ?) Continued expansion of Building Deeper Relationships Customer insights Next best action Client Advocacy Customer experience Data analytics Innova
Slide 90: Enterprise Revenue Office: Extending the Advantage
Enterprise Revenue Office Shareholder Value Strong Defense Investing for Growth Positioned to Win Extending the Advantage Extending the Advantage (2014 ?) Continued expansion of Building Deeper Relationships Customer insights Next best action Client Advocacy Customer experience Data analytics Innova
Slide 91: Innovation at U.S. Bank
Innovation at U.S. Bank Innovate is a Distinctive Leadership Practice 14
Slide 92: Innovation at U.S. Bank
Innovation at U.S. Bank Core Products Concepts Ideas Customers Qualitative Testing Wholesale Payments Voice of the Customer Checking With Choice Savings Today And Rewards Tomorrow FlexPerks Multi-function Campus Card 15
Slide 93: Innovation at U.S. Bank: Digital Capabilities and Payments
Innovation at U.S. Bank Virtual Merchant Mobile Mobile Real-time Credit Card Apply, Approve, Use Mobile Photo Bill Pay Digital Capabilities Payments 16
Slide 94: Business Models Innovation at U.S. Bank
Business Models Innovation at U.S. Bank Distribution Network Optimization Video ATM Anchor Branch Online Banking On-Site Branch Drive Thru Branch In-Store Branch Mobile Banking " "Drop In" Branch Insight from Millennials 17
Slide 95: Innovation at U.S. Bank: More to Come
Innovation at U.S. Bank More to come... Innovation Advisory Leadership Group Payments Shark Tank Ideas From US Innovation Advocate Training 18
Slide 96: U.S. Bancorp Investor Day Enterprise Revenue Focus
U.S. Bancorp Investor Day Enterprise Revenue Focus
Slide 97: Consumer and Small Business Banking
U.S. Bancorp Investor Day Consumer and Small Business Banking John Elmore, Vice Chairman Kent Stone, Vice Chairman September 12, 2013
Slide 98: 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 99: Consumer and Small Business Banking Profile
Consumer and Small Business Banking Profile Full year 2012, excluding Treasury and Corporate Support Contribution to U.S. Bancorp Revenue Pre-provision Income Loans Deposits (CHART) (CHART) (CHART) (CHART) 47% 39% 56% 50% Revenue Mix (CHART) In-store and On-site Banking 6% Metropolitan Banking 24% C
Slide 100: Financial Performance
Financial Performance Average loan growth of 6.8% Average deposit growth of 7.2% Total net revenue growth of 7.6% Noninterest expense growth of 7.3% Performance Highlights (2010 - 2012 CAGR) Key Drivers Branch originated mortgage loans, small business and indirect auto lending and leasing Enhanced d
Slide 101: Competitive Advantages
Competitive Advantages USB Relative Position Versus Larger Competitors Versus Smaller Competitors Community Banking Business Model In-store and On-site Branch Delivery Models Customer Experience - Retail Customer Experience - Small Business Small Business Franchise Breadth and Depth of Capabilities
Slide 102: Scale and Market Position
1Q07 2Q13 Scale Consumer Banking Sales and Support #2 SBA Lender Market Share Business Unit Market Rank #5 Core Deposits 2.0% 2.6% Community Banking and Branch Delivery Source: SNL, Mortgagestats and Experian (mortgage origination data as of 1Q13), U.S. Small Business Administration #6 Home Equity L
Slide 103: Growth Accelerators
Growth Accelerators Growth Accelerators Positioning for the New Economy Delivering on Client Advocacy Industry-leading digital channel capabilities Checking 21% Mortgage 27% Credit Card 35% Home Equity 51% Auto 83% Online Account Growth 1H13 vs. 1H12 2013 Model Bank for Online Marketing and Lead Man
Slide 104: 2010 Business Unit Growth Strategies
Increased branch share in 25 state footprint to 7.1% Continuing 2010 Business Unit Growth Strategies Strategy Accomplishments Status Building scale through expanded distribution Customer experience Continuing Significant investments in technology Affluent market - differentiated delivery and service
Slide 105: Extending the Advantage
Extending the Advantage Community Banking business model Distribution network optimization Positioning mortgage for the New Economy National consumer lending expansion 9
Slide 106: The Right Delivery Model
The Right Delivery Model Community Banking 1,108 Branches Delivering the full capabilities of U.S. Bank through a traditional, relationship-based community banking model Metropolitan Branches 1,114 Branches Providing a full array of consumer and small business banking products and services in larger
Slide 107: Community Banking Business Model
Community Banking Business Model Maximizing bank impact in each community Strategic effort in each Community Market to connect to: Consumers Businesses Philanthropies Civic organizations Competitive advantage Focus on relationship management and customer advocacy Local decision making Local delivery
Slide 108: Distribution Network Optimization
Distribution Network Optimization Pilot Market Execution Initial "Anchor" branch will be in a multi-purpose retail complex with over 30,000 visitors per day, featuring high-end retailers, restaurants, public entertainment spaces and several up-scale residential housing complexes Market Characteristi
Slide 109: Positioning Mortgage for the New Economy
Positioning Mortgage for the New Economy Mortgage Transitioning from refinance to purchase market Increasing origination of Retail vs. Correspondent Utilizing web, mobile and telesales capabilities Leveraging branch network Targeted and mass market mortgage advertising Building Deeper Relationships
Slide 110: National Consumer Lending Expansion
National Consumer Lending Expansion Expand non-captive lending position - new auto, new leasing Expand / establish new manufacturer relationships and strategic partnerships Leverage current dealer relationship for pre-owned vehicle financing Continue new product expansion Market white label leasing
Slide 111: Current Growth Drivers
Current Growth Drivers Building scale through expanded distribution Customer experience Affluent market - differentiated delivery and service Building Deeper Relationships Small Business - differentiated delivery and service Mortgage banking expansion Community Banking business model Distribution ne
Slide 112: U.S. Bancorp Investor Day Consumer and Small Business Banking
U.S. Bancorp Investor Day Consumer and Small Business Banking
Slide 113: Wholesale Banking and Commercial Real Estate
U.S. Bancorp Investor Day Wholesale Banking and Commercial Real Estate Joe Hoesley, Vice Chairman Dick Payne, Vice Chairman September 12, 2013
Slide 114: 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 115: Wholesale Banking and Commercial Real Estate Profile
Wholesale Banking and Commercial Real Estate Profile Full year 2012, excluding Treasury and Corporate Support Revenue Mix (CHART) Contribution to U.S. Bancorp Revenue Pre-provision Income Loans Deposits (CHART) (CHART) (CHART) (CHART) 19% 25% 31% 29% Corporate Banking 63% Commercial Real Estate 21%
Slide 116: Financial Performance
Financial Performance Loan commitments growth of 19.1% and average loan growth of 9.4% Average deposit growth of 12.2% Total net revenue growth of 3.0% Noninterest expense growth of 2.1% Performance Highlights (2010 - 2012 CAGR) Key Drivers Expanded distribution, new customer relationships and "flig
Slide 117: Competitive Advantages
Wholesale Banking and Commercial Real Estate Competitive Advantages USB Relative Position Versus Larger Competitors Versus Smaller Competitors Balance Sheet Strength Debt Ratings Middle Market Franchise Breadth and Depth of Capabilities Cost of Funds Regulatory Capital Requirements Advantaged Compet
Slide 118: Market Position and Share
1Q07 2Q13 Debt Capital Markets Market Share Business Category Market Rank #4 Commercial Real Estate Bank Lender 3.2% 3.7% Balance Sheet 0.3% 2.3% 1.2% 7.0% #5 Commitments #5 C&I Bank Lender 3.7% 5.1% 2.5% 1.6% Market Position 2.2% 4.3% 2.4% NA 1.8% Source: SNL, Securities Data Corp and Thompson Reut
Slide 119: Growth Accelerators
Growth Accelerators Growth Accelerators Positioning for an improving economy Delivering on Client Advocacy Client growth in other U.S. Bank lines of business Leveraging "flight-to-quality" (CHART) (CHART) (CHART) Average Commitments Average Loans Average Deposits $ in billions 19.1% CAGR 9.4% CAGR 1
Slide 120: 2010 Business Unit Growth Strategies
Continuing Continuing Continuing Increased client satisfaction scores as measured by Greenwich Expanded into high potential markets Enhanced RM market coverage teams More than 450 new Wholesale relationships* 2010 Business Unit Growth Strategies Strategy Accomplishments Status Expanding distribution
Slide 121: Extending the Advantage
Extending the Advantage Optimizing distribution Building Deeper Relationships - Fortune 1000 Optimizing low-risk capital markets product set Client Advocacy 9
Slide 122: Optimizing Distribution
Optimizing Distribution Geographic expansion Expanded client segmentation Enhanced Relationship Manager and Product Partner coverage models Adjacent State Strategy Wholesale Offices Wholesale Banking Market Area Community Banking Market Area 25 State Footprint 10
Slide 123: Building Deeper Relationships - Fortune 1000
Building Deeper Relationships - Fortune 1000 Competitive Advantages and Investments Have Significantly Improved Ability to Build Deeper Relationships with Fortune 1000 Competitive Advantages Debt Ratings Cost of Funds Regulatory Capital Requirements Investments Expanded Distribution Low-risk Capital
Slide 124: Optimizing Low-risk Capital Markets Product Set
High Grade Bond business Private Placements Loan Sales & Trading Municipal Securities investment Derivative investment Foreign Exchange investment Optimizing Low-risk Capital Markets Product Set 2007 - 2013 2014 and Beyond * Total U.S. Bancorp, included in Commercial Products Revenue ** Capital Mark
Slide 125: Client Advocacy Program
All Wholesale Banking and Commercial Real Estate Team Leaders, Relationship Managers, Product Partners and Credit Partners have been through the three day Client Advocacy Program Objective is to focus on the success of the client by delivering the assets and capabilities of the entire Bank in a time
Slide 126: Current Growth Drivers
Current Growth Drivers Optimizing distribution Optimizing low-risk capital markets product set Building Deeper Relationships Client Advocacy Business Unit Strategies Environmental Factors Opportunities Strong economic recovery Market share and "share of wallet" expansion Challenges Slow economic rec
Slide 127: U.S. Bancorp Investor Day Wholesale Banking and Commercial Real Estate
U.S. Bancorp Investor Day Wholesale Banking and Commercial Real Estate
Slide 128: Wealth Management and Securities Services
U.S. Bancorp Investor Day Wealth Management and Securities Services Terry Dolan Vice Chairman September 12, 2013
Slide 129: 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 130: Wealth Management and Securities Services Profile
Wealth Management and Securities Services Profile Full year 2012, excluding Treasury and Corporate Support Revenue Mix (CHART) Contribution to U.S. Bancorp Revenue Pre-provision Income Deposits Fee Income (CHART) (CHART) (CHART) 8% 3% 20% 12% Fund Services 15% IT&C 9% Corporate Trust 35% Wealth Mana
Slide 131: Financial Performance
Financial Performance Average deposit growth of 32.6% Average loan growth of 3.8%, increased to 8.1% in 2012 and accelerated to 25.4% 1H13 vs. 1H12 Total net revenue growth of 2.6% Noninterest expense growth of 7.2% Performance Highlights (2010 - 2012 CAGR) Key Drivers Corporate Trust market share g
Slide 132: Competitive Advantages
Competitive Advantages USB Relative Position Versus Larger Competitors Versus Smaller Competitors Customer Experience - Ascent PCM Customer Experience - Private Client Reserve Investment Platform Brand Awareness Customer Experience - Private Client Group Investment Thought Leadership Advantaged Comp
Slide 133: Competitive Advantages
Competitive Advantages USB Relative Position Versus Larger Competitors Versus Smaller Competitors Operating Scale Debt Ratings Breadth and Depth of Capabilities Brand Awareness Market Position Barriers to Entry Advantaged Competitive Disadvantaged Customer Experience Securities Services Technology 6
Slide 134: Our Scale Differentiates
Higher customer satisfaction Leveraging the economic recovery Consolidated platforms Investment in people Investment in technology Efficient risk management Service quality high Fees competitive Maintenance requirement lower Employees engaged Our Scale Differentiates Competitive Advantages 7
Slide 135: Scale and Market Position
2007 2012 Scale Fund Services #1 U.S. Structured Trustee Market Share Business Unit Market Rank #1 U.S. Municipal Trustee 27.2% 30.5% Corporate Trust Source: Barron's (wealth management), accounts over $5 million; Investment Company Institute (fund services); Securities Data Corp (corporate trust),
Slide 136: Growth Accelerators
Growth Accelerators Growth Accelerators Capitalizing on investments Delivering on Client Advocacy Growth from Building Deeper Relationships initiative Significant leverage to an improving economy (CHART) (CHART) (CHART) Average Deposits and Loans ($ in billions) Annualized Sales ($ in millions) Fort
Slide 137: 2010 Business Unit Growth Strategies
Talent aligned to segments Enhanced business capabilities Accelerating growth rates Continuing 2010 Business Unit Growth Strategies Strategy Accomplishments Status Customer segmentation / servicing model in Wealth Management Customer experience Continuing "Share of Media Voice" expanding "5 Star" NQ
Slide 138: Extending the Advantage
Extending the Advantage Building a distinctive client experience Alternative investment servicing capabilities Corporate Trust global expansion 11
Slide 139: Building a Distinctive Client Experience
Building a Distinctive Client Experience Integrated Online Experience Call Center + Concierge Services Personalized Advisory Dedicated Teams Family Office High Touch Comprehensive Wealth Management Financial Advisory On-Demand Services Online Delegated Self Directed Investable Assets Branding Invest
Slide 140: Building a Distinctive Client Experience - Ascent
Unique customer experience Managing the "Impact of Wealth" versus investments 2nd fastest growing family office wealth manager in 2012 Building a Distinctive Client Experience - Ascent 13
Slide 141: Building a Distinctive Client Experience - Private Client Reserve
Building a Distinctive Client Experience - Private Client Reserve Strong Momentum Enhanced leadership teams Implemented client service models Aligned talent by segment Improved credit processes Expanded investment platform Created market visibility Enhanced partnerships 14
Slide 142: Building a Distinctive Client Experience - Private Client Group
Building a Distinctive Client Experience - Private Client Group Opportunity Exists in Affluent Strong brand with affluent banking clients Client utilization of services similar to retail banking Capturing the Affluent Opportunity Rebalancing resources Enhancing service delivery Aligning performance
Slide 143: Alternative Investment Servicing
Alternative Investment Servicing Fund Services "Top Tier" customer experience Market position - hedge fund servicing 28th in 2010 to 14th in 2013 Geographical expansion into Europe Product extension across all servicing Expanding middle office capabilities Strategic acquisitions (CHART) Alternative
Slide 144: Corporate Trust Global Expansion
Corporate Trust Global Expansion Domestic markets: Focus on "Centers of Influence" Penetration of Wholesale Banking clients Cross-sell alternative investment funds International markets: Geographical market expansion Extension of product offering and capabilities Leverage scalable global platforms S
Slide 145: Current Growth Drivers
Current Growth Drivers Customer segmentation / servicing model in Wealth Management Building a distinctive client experience Building Deeper Relationships Global securities services Federal Government initiative Strategic acquisitions Alternative investment servicing capabilities Corporate Trust glo
Slide 146: U.S. Bancorp Investor Day Wealth Management and Securities Services
U.S. Bancorp Investor Day Wealth Management and Securities Services
Slide 147: Payment Services
U.S. Bancorp Investor Day Payment Services Pamela Joseph Vice Chairman September 12, 2013
Slide 148: 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 149: Payment Services Profile
Payment Services Profile Full year 2012, excluding Treasury and Corporate Support Revenue Mix (CHART) Contribution to U.S. Bancorp Revenue Pre-provision Income Loans (CHART) (CHART) (CHART) 26% 33% 11% Fee Income (CHART) 35% Retail Payment Solutions 59% Global Merchant Acquiring 30% Corporate Paymen
Slide 150: Financial Performance
Financial Performance Average loan growth of 1.8% Total net revenue growth of 2.8% Noninterest expense growth of 3.0% Performance Highlights (2010 - 2012 CAGR) Key Drivers Cautious consumer behavior driven by slow economy Growth in customer base, Building Deeper Relationships initiatives, product in
Slide 151: Competitive Advantages
Competitive Advantages USB Relative Position Versus Larger Competitors Versus Smaller Competitors Financial Institution Distribution Technology Platforms Customer Experience Brand Awareness Barriers to Entry Breadth and Depth of Capabilities Advantaged Competitive Disadvantaged Payments Services 5
Slide 152: Scale and Market Position
2007 2012 Scale Global Merchant Acquiring #3 U.S. Commercial Card Issuer Market Share Business Unit Market Rank #5 U.S. Merchant Acquirer 8% 8% Retail Payment Solutions #6 European Merchant Acquirer 7% 8% 10% 11% #4 U.S. Debit Card Issuer #5 U.S. Credit Card Issuer 4% 6% 3% 3% Market Position NR = A
Slide 153: Growth Accelerators
Growth Accelerators Growth Accelerators Significant leverage to an improving economy Stabilizing regulatory environment Client growth in other U.S. Bank lines of business 7
Slide 154: 2010 Business Unit Growth Strategies
Elavon: Brazil, Spain Corporate Payments: Europe Continuing 2010 Business Unit Growth Strategies Strategy Accomplishments Status International expansion Financial institution partnerships Continuing Account production up 45% since 2010 FlexPerks rewards Continuing Retained 79% of receivables Payment
Slide 155: Extending the Advantage
Investing in products and technology Prepaid expansion Product innovation International expansion Organic growth plans in existing markets New market expansion Building Deeper Relationships Selling into core USB banking relationships Extending the Advantage 9
Slide 156: Prepaid Expansion
Prepaid Expansion Continued high growth industry with ~20% CAGR* New government and payroll card programs fueling growth FSV adds key processing capabilities, deepens penetration in attractive corporate vertical, and dramatically increases size of business line Prepaid Value Chain Taking processing
Slide 157: Investing in Product and Technology
Internal Rewards Platform Allows for customization including: Pay with Points Corporate card rewards Double-Up (merchant processing rewards) Credit Processing Enables USB to serve as a third party processor for banks and credit unions which wish to own their own card programs Innovation Ongoing mobi
Slide 158: Innovation Timeline
JULY FlexPerks Contactless & EMV Card Pilot MARCH Retailer iPad App SEPTEMBER REI iPhone Credit Card App Pilot DECEMBER Go Mobile Launch MAY V.me Wallet Support APRIL Nina Voice Control Pilot AUGUST Bar Code Payment Pilot OCTOBER JUNE Square (r) Wallet Support FEBRUARY Video Banking Launch AUGUST Mu
Slide 159: International Expansion
International Expansion Merchant Acquiring International Expansion International revenue 17% of total Elavon revenue in 2010, expectations are for 30% in 2015 Executed joint venture with Santander in Spain (April 2013) Further expansion opportunities: Organic growth investments - Brazil, Mexico, UK
Slide 160: Building Deeper Relationships
Consumer Credit Cards Continue focus on Project ReDE (Replace, Deepen, and Elevate) to enhance card sales in branches Merchant Accounts Leverage ReDE program for merchant "Double Up" - innovative program offering rewards to customers with both a merchant account and a small business card Corporate C
Slide 161: Current Growth Drivers
International expansion Financial institution partnerships FlexPerks rewards Payments innovation Building Deeper Relationships Investing in products and technology Business Unit Strategies Current Growth Drivers Environmental Factors Opportunities Strong economic recovery Additional partnership oppo
Slide 162: U.S. Bancorp Investor Day Payment Services
U.S. Bancorp Investor Day Payment Services
Slide 163: Closing Remarks
Closing Remarks Richard K. Davis Chairman, President and CEO U.S. Bancorp Investor Day September 12, 2013
Slide 164: Extending the Advantage
Extending the Advantage Our Culture Client Advocacy New Economy Distribution Strength 2
Slide 165: Extending the Advantage
Extending the Advantage Shareholder Value Strong Defense Investing for Growth Positioned to Win Flight-to-Quality Strong Defense Enterprise Revenue Office National Corporate Banking National Mortgage Banking Deposit Pricing Parity Brand Development Selective M&A / JVs Investing for Growth (2007 - 20
Slide 166: Consistent Predictable Repeatable
Consistent Predictable Repeatable 4
Slide 167: Growth in Market Share
Growth in Market Share We are in an Advantaged Position to Grow Market Share 5
Slide 168: Growth in Market Share
Growth in Market Share Our Business Model Enables Industry Leading Growth and High Returns Industry Leading Growth and Profitability with Conservative Risk Profile 6
Slide 169: Shareholder Value Creation
Shareholder Value Creation Growth in Market Share Growth in Market Share and High Returns Create Long-term Value for Shareholders Industry Leading Growth and Profitability with Conservative Risk Profile 7
Slide 170: U.S. Bancorp Investor Day Closing Remarks
U.S. Bancorp Investor Day Closing Remarks