U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q1 2017 Earnings Presentation
28 slides from U.s. Bancorp's earnings presentation, Apr 19, 2017
Slide 1: U.S. Bancorp 1Q17 Earnings Conference Call
U.S. Bancorp 1Q17 Earnings Conference Call April 19, 2017 Exhibit 99.2
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: Today’s presentation contains forward-looking statements about U.S. Bancorp. Statements that are not historical or current facts, including
Slide 3: 1Q17 Highlights
1Q17 Highlights * Taxable-equivalent basis, see slide 27 for calculation ** Estimated for the Basel III fully implemented standardized approach; RWA = risk-weighted assets, see slide 26 for calculation 1Q17 Highlights Income Statement change vs. Credit Quality change vs. $ in millions, except EPS 1Q
Slide 4: Performance Ratios
Performance Ratios Return on Average Common Equity Efficiency Ratio* & Net Interest Margin** * Non-GAAP, see slide 27 for calculation ** Taxable equivalent basis Return on Average Assets
Slide 5: Average Loans
Average Loans +0.2% linked quarter +4.1% year-over-year Large corporate growth was pressured by high levels of pay downs and active capital markets in 1Q17 Commercial middle market loan growth was strong across many markets vs. 1Q16 Commercial real estate reflected a cautious approach to certain seg
Slide 6: Average Deposits
Average Deposits -0.2% linked quarter +11.0% year-over-year Interest-bearing Deposits $ in billions Rates are presented on a fully taxable-equivalent basis utilizing a tax rate of 35 percent Linked quarter growth reflected typical seasonal trends and lower funding requirements Growth vs. 1Q16 driven
Slide 7: Credit Quality
Credit Quality NCO Ratio +3bps QoQ +2bps YoY NPAs -6.7% QoQ -13.0% YoY $ in millions
Slide 8: Credit Quality: Auto and Retail Industry Exposure
Credit Quality Auto 1Q16 4Q16 1Q17 Average Loans $16.6$17.6 $17.5 30-89 Delinquencies0.39% 0.74% 0.64% 90+ Delinquencies0.02% 0.06% 0.05% Nonperforming Loans0.07%0.09% 0.09% $ in billions * As of December 31, 2016 CRE – Owner Occupied USB Total Commitments* $573 $0.6, 3% Retail Industry $19.7, 3.4%
Slide 9: Earnings Summary
Earnings Summary $ and shares in millions, except per-share data 1Q17 4Q16 1Q16 vs. 4Q16 vs. 1Q16 Net Interest Income $2,945 $2,955 $2,835 (0.3) 3.9 Taxable-equivalent Adjustment 50 49 53 2.0 (5.7) Net Interest Income (taxable-equivalent basis) 2,995 3,004 2,888 (0.3) 3.7 Noninterest Income 2,329 2,
Slide 10: Revenue
Revenue $5,324 $5,435 $5,037 Linked Quarter Decline reflected typical seasonal patterns in certain fee businesses Year-over-Year Growth primarily driven by solid loan growth and broad-based growth in fee income $ in millions Taxable-equivalent basis -2.0% linked quarter +5.7% year-over-year 1Q17 Rev
Slide 11: Net Interest Income
Net Interest Income Linked Quarter Net interest income was stable despite two fewer days The 5bp increase in net interest margin reflected the impact of higher interest rates Year-over-Year Net interest income growth driven by strong earning asset growth $ in millions Taxable-equivalent basis -0.3%
Slide 12: Noninterest Income
Noninterest Income $ in millions Payments = credit and debit card, corporate payment products and merchant processing Service charges = deposit service charges, treasury management and ATM processing $2,149 $2,431 $2,329 Linked Quarter Typical seasonal factors impacted growth in deposit service char
Slide 13: Noninterest Expense
Noninterest Expense $2,749 $3,004 $2,944 Linked Quarter Decrease in noninterest expense (2%) reflected typical seasonal patterns Year-over-Year Total noninterest expense up 7.1% on higher compensation and benefit costs, marketing and other expenses Higher compensation expense reflected hiring to sup
Slide 14: Capital Position
Capital Position RWA = risk-weighted assets; * See Non-GAAP Financial Measures reconciliation on slide 26 $ in billions 1Q17 4Q16 3Q16 2Q16 1Q16 Total U.S. Bancorp shareholders' equity $47.8 $47.3 $47.8 $47.4 $46.8 Standardized Approach Basel III transitional standardized approach Common equity tier
Slide 15: Appendix
Appendix U.S, BANCORP | 15
Slide 16: Average Loans Key Points
Average Loans Key Points vs. 1Q16 Average total loans increased by $10.9 billion, or 4.1% Average total commercial loans increased by $3.9 billion, or 4.4% Average residential mortgage loans increased by $3.7 billion, or 6.8% vs. 4Q16 Average total loans increased by $487 million, or 0.2% Average re
Slide 17: Average Deposits Key Points
Average Deposits Key Points vs. 1Q16 Average total deposits increased by $32.6 billion, or 11.0% Average low-cost deposits (NIB, interest checking, money market and savings) increased by $35.6 billion, or 13.6% vs. 4Q16 Average total deposits decreased by $750 million, or 0.2% Average low-cost depos
Slide 18: Credit Quality – Commercial Loans
Credit Quality – Commercial Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points Loans increased modestly 4.4% year over year; growth slowed in 1Q17 as a result of seasonality, energy paydowns and strong bond market activity Net charge-offs improved year-over-year as energy
Slide 19: Credit Quality – Commercial Real Estate
A&D Construction $672 Credit Quality – Commercial Real Estate Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points Average loans increased 1.8% year-over-year as growth waned in recent quarters as interest rates increased and certain sectors, such as multi-family, have seen increa
Slide 20: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points Originations continued to be high credit quality (weighted average FICO of 756, weighted average LTV of 68%) 90% of the balances have been originated since the beginning of 2009; the origina
Slide 21: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points Year-over-year average loan growth of 3.0% was driven by high credit quality originations Commitment weighted average FICO on new originations was 761, up 3 points from 1Q16 Year-over-year increases
Slide 22: Credit Quality – Home Equity
Credit Quality – Home Equity Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points High-quality originations (weighted average FICO on commitments of 768, weighted average CLTV of 70%) originated primarily through the retail branch network to existing bank customers on their primar
Slide 23: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points Continued high-quality originations (weighted average FICO of 782) support the portfolio’s stable credit profile Delinquencies, nonperforming leases and net charge-offs remained at very low levels
Slide 24: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points Overall growth continued to be driven by the auto loans and installment categories, which were up 5.5% and 14.9% year-over-year, respectively Net charge-offs and 30-89 delinquencies showed seasonal
Slide 25: Credit Quality – Auto Loans
Credit Quality – Auto Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points Continued growth in auto loans driven by high-quality originations in the indirect channel (weighted average FICO 776) Net charge-offs remained relatively stable on a linked quarter basis $mm1Q164Q161
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures * Preliminary data. Subject to change prior to filings with applicable regulatory agencies. (1) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements. (2) Includes net losses on cash flow hedges in
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures (1) Utilizes a tax rate of 35 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes. (Dollars in Millions, Unaudited) March 31, December 31, September 30, June 30, March 31, 2017 2016 2016 2016 2016 Net interest i
Slide 28: U.S. Bancorp 1Q17 Earnings Conference Call
U.S. Bancorp 1Q17 Earnings Conference Call April 19, 2017