U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q4 2024 Earnings Presentation
33 slides from U.s. Bancorp's earnings presentation, Jan 16, 2025
Slide 1: U.S. Bancorp 4Q24 Earnings Conference Call
January 16, 2025 U.S. Bancorp 4Q24 Earnings Conference Call U.S. Bank | Confidential 1
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: 4Q24 Highlights
4Q24 Highlights Reported Adjusted1 $1.01 | $1.07 Earnings per share ▪ Positive operating leverage › Solid financial performance driven by year-over-year top line Reported1 Adjusted1 revenue growth and continued expense discipline 17.4% | 18.3% ▪ Balance sheet management Return on Tangible Common › E
Slide 4: 4Q24 Results Summary
4Q24 Results Summary Income Statement Credit Quality Reported Adjusted1 Change vs. Adjusted Change vs. 1 1 $ in millions, except EPS 4Q24 4Q24 3Q24 4Q23 $ in millions 4Q24 3Q24 4Q23 2 Net interest income $4,176 $4,176 0.2 % 0.8 % Nonperforming assets $1,832 (0.9) % 22.6 % Noninterest income 2,833 2,
Slide 5: Performance Ratios
Performance Ratios Return on Return on Return on Efficiency Ratio1 & Average Assets Average Common Equity Tangible Common Equity1 Net Interest Margin 2 1 75.9% 1 1 1.03% 12.9% 12.7% 0.99% 1 1.03% 1 0.98% 12.4% 19.6% 61.5% 12.1% 18.3% 1 60.2% 1 1 61.1% 59.9% 17.9% 17.4% 0.52% 6.4% 10.5% 2.78% 2.74% 2
Slide 6: Sustainable Earnings Power
Sustainable Earnings Power Diversified fee income businesses support our short- and long-term growth objectives Fee income represents 40% of 25% 32% U.S. Bancorp total net revenue1 As a % of Total Net Revenue1,2 Fee revenue differentiators with national reach 43% Payment Services Trust & Investment
Slide 7: Execution Through Interconnectedness
Execution Through Interconnectedness Driving sustainable growth across the franchise Select Key initiatives › Bank Smartly Product Suite › Global Capital Markets TS UC RE › Healthcare Verticalization AC OD (e.g., Salucro) H PR Trusted, interconnected › Wealth Connectivity bank › Business Essentials
Slide 8: Income Statement Detail
Income Statement Detail Excluding Notable Items2 Reported % Change Notable Items2 % Change $ in millions, except EPS 4Q24 3Q24 4Q23 vs 3Q24 vs 4Q23 4Q24 3Q24 4Q23 vs 3Q24 vs 4Q23 Net Interest Income $4,146 $4,135 $4,111 0.3 % 0.9 % $— $— $— 0.3 % 0.9 % Taxable-equivalent Adjustment 30 31 31 (3.2) (3
Slide 9: Balance Sheet Summary
Balance Sheet Summary Disciplined pricing and proactive balance sheet management Total Average Deposits Total Average Loans $503 $503 $514 $509 $512 $373 $371 $375 $374 $376 2.77% 2.83% 2.79% 2.65% 2.57% 6.13% 6.20% 6.19% 6.25% 6.03% 4Q23 1Q24 2Q24 3Q24 4Q24 4Q23 1Q24 2Q24 3Q24 4Q24 Average Deposits
Slide 10: Net Interest Income
Net Interest Income 4Q24 3Q24 4Q23 Loans $5,674 $5,862 $5,742 Loans held for sale 50 45 36 Investment securities 1,326 1,316 1,182 Other interest income 781 863 803 Total interest income $7,831 $8,086 $7,763 Deposits $2,772 $3,004 $2,751 Short-term borrowings 257 284 332 Long-term debt 656 663 569 T
Slide 11: Noninterest Income
Noninterest Income 4Q24 3Q24 4Q23 Payments $1,043 $1,069 $1,027 Trust and investment management 703 667 621 Service charges 314 302 324 Commercial products 364 397 326 Mortgage banking revenue 116 155 137 Investment product fees 87 84 73 Securities gains (losses), net (1) (119) 2 Other 207 143 228 1
Slide 12: Noninterest Expense
Noninterest Expense 4Q24 3Q24 4Q23 Compensation and benefits $2,607 $2,637 $2,509 Technology and communications 534 524 513 Occupancy and equipment 317 317 316 Professional services 135 130 158 Marketing and business development 160 165 196 All other 449 431 512 1 Total Noninterest Expense, Adjusted
Slide 13: Credit Quality
Credit Quality Stabilizing macroeconomic environment amid continued stress in CRE Office Allowance for Credit Losses Net Charge-offs and Nonperforming Assets by Loan Category, 4Q24 Change vs. Amount Reserve 4Q24 3Q24 4Q23 ($B) (%) Non-performing Assets Commercial $2.2 1.6% Balance $1,832 $(16) $338
Slide 14: Capital Management
Capital Management Balancing continued capital build with distributions CET1 Ratio1 10.3% 10.5% 10.6% 9.9% 10.0% 7.6% CET1 Ratio Regulatory Minimum Binding Capital Constraint 4Q23 1Q24 2Q24 3Q24 4Q24 CET1 Ratio 7.7% 7.8% 8.1% 8.6% 8.6% including AOCI 2 4th Quarter Highlights • CET1 ratio increased t
Slide 15: Guidance – 1Q and FY 2025
Guidance – 1Q and FY 2025 1Q 2025 Guidance FY 2025 Guidance Net interest Relatively stable +3% to 5% Total net revenue income1 vs. Q4 2024 of $4,176M vs. FY 2024 of $27.6B1,4 (excluding day count impact) Total noninterest Relatively stable Positive operating expense vs. Q4 2024 adjusted of leverage
Slide 16: Appendix
Appendix U.S. Bancorp 16
Slide 17: Average Loans
Average Loans Average % of Average Change vs. $372.9 $374.1 $375.7 4Q 2024 Balance Total 3Q24 4Q23 Commercial $135 36% 1.7 % 3.3 % Commercial Real Estate 50 13% (3.1) (7.3) Residential Mortgages 118 31% 0.7 2.8 Credit Card 30 8% 1.5 6.1 Other Retail 43 12% (0.9) (5.4) Total Loans $376 0.4 % 0.8 % 4Q
Slide 18: Average Deposits
Average Deposits Average Average Change vs. 4Q 2024 Balance 3Q24 4Q23 $502.8 $508.8 $512.3 Noninterest-bearing deposits $83 2.4 % (8.5) % Money market savings 207 — 10.3 Interest checking 125 (0.4) (1.8) Savings accounts 41 11.9 (7.9) Time deposits 56 (3.9) 7.3 Total interest-bearing deposits $429 0
Slide 19: Capital Position
Capital Position $ in billions 4Q24 3Q24 2Q24 1Q24 4Q23 Total U.S. Bancorp shareholders’ equity $58.6 $58.9 $56.4 $55.6 $55.3 Basel III Standardized Approach 1 Common equity tier 1 capital ratio 10.6 % 10.5 % 10.3 % 10.0 % 9.9 % Tier 1 capital ratio 12.2 % 12.2 % 11.9 % 11.6 % 11.5 % Total risk-base
Slide 20: Payment Services
Payment Services Payments Total Net Revenue by Business (4Q24) Highlights • Credit card fee growth of 4.7% YoY driven by credit 10% card sales growth. Total card fee revenue declined 0.7% 23% YoY driven by decline in prepaid activity. Global Merchant Acquiring Retail Payment Solutions • Merchant pro
Slide 21: Credit Quality – Commercial
Credit Quality – Commercial Average Loans ($M) and Net Charge-offs Ratio Key Statistics $ in millions 4Q23 3Q24 4Q24 Linked Quarter Growth Average Loans $131,096 $133,138 $135,384 (2.7)% (0.3)% 2.7% (0.9)% 1.7% 30-89 Delinquencies 0.35 % 0.25 % 0.26 % 90+ Delinquencies 0.09 % 0.07 % 0.07 % $131,096
Slide 22: Credit Quality – Commercial Real Estate
Credit Quality – Commercial Real Estate Average Loans ($M) and Net Charge-offs Ratio Key Statistics $ in millions 4Q23 3Q24 4Q24 Linked Quarter Growth Average Loans $53,825 $51,454 $49,871 (0.8)% (1.5)% (1.4)% (1.6)% (3.1)% 30-89 Delinquencies 0.10 % 0.16 % 0.16 % 90+ Delinquencies 0.01 % 0.02 % 0.0
Slide 23: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($M) and Net Charge-offs Ratio Key Statistics $ in millions 4Q23 3Q24 4Q24 Linked Quarter Growth Average Loans $115,196 $117,559 $118,406 0.5% 0.4% 0.7% 0.9% 0.7% 30-89 Delinquencies 0.15 % 0.14 % 0.16 % $118,406 90+ Delinquencies 0.12 % 0.15 % 0.1
Slide 24: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($M) and Net Charge-offs Ratio Key Statistics $ in millions 4Q23 3Q24 4Q24 Linked Quarter Growth Average Loans $27,753 $28,994 $29,438 30-89 Delinquencies 1.42 % 1.47 % 1.41 % 3.2% 0.7% 1.5% 2.3% 1.5% 90+ Delinquencies 1.31 % 1.36 % 1.43 % $28,349 $28,994 $
Slide 25: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($M) and Net Charge-offs Ratio Key Statistics $ in millions 4Q23 3Q24 4Q24 Linked Quarter Growth Average Loans $44,986 $42,925 $42,556 (3.0)% (2.9)% (1.0)% (0.7)% (0.9)% 30-89 Delinquencies 0.63 % 0.52 % 0.54 % 90+ Delinquencies 0.15 % 0.14 % 0.15 % $44,98
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended (Dollars in Millions, Unaudited) December 31, 2024 September 30, 2024 December 31, 2023 Net interest income $ 4,146 $ 4,135 $ 4,111 Taxable-equivalent adjustment (1) 30 31 31 Net interest income, on a taxable-equivalent basis 4,176 4,166 4,142 Net inter
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended (Dollars in Millions, Unaudited) December 31, 2024 September 30, 2024 December 31, 2023 Net income applicable to U.S. Bancorp common shareholders $ 1,581 $ 1,601 $ 766 Intangibles amortization (net-of-tax) 110 112 123 Net income applicable to U.S. Banco
Slide 28: Non-GAAP Financial Measures
Non-GAAP Financial Measures December 31, September June 30, March 31, December 31, (Dollars and Shares in Millions Except Per Share Data, Unaudited) 2024 30, 2024 2024 2024 2023 Total equity $ 59,040 $ 59,321 $ 56,885 $ 56,033 $ 55,771 Preferred stock (6,808) (6,808) (6,808) (6,808) (6,808) Noncontr
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures December 31, September 30, June 30, March 31, December 31, (Dollars and Shares in Millions Except Per Share Data, Unaudited) 2024 2024 2024 2024 2023 Common equity tier 1 capital, determined in accordance with transitional regulatory capital requirements related to the cu
Slide 30: Non-GAAP Financial Measures
Non-GAAP Financial Measures Twelve Months Ended ($ in millions) December 31, 2024 Line of Business Financial Performance Net Revenue Wealth, Corporate, Commercial and Institutional Banking $ 12,193 Consumer and Business Banking 9,264 Payment Services 7,029 Treasury and Corporate Support (1,031) Tota
Slide 31: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended (Dollars in Millions, Unaudited) December 31, 2024 December 31, 2023 Net interest income $ 4,146 $ 4,111 Taxable-equivalent adjustment (1) 30 31 Net interest income, on a taxable-equivalent adjustment basis 4,176 4,142 Net interest income, on a taxable-
Slide 32: Notes
Notes 1. Based on a federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes. 2. Notable items for the three months ended December 31, 2024 of $109 million ($82 million net-of-tax) included lease impairments and op
Slide 33: U.S. Bancorp
U.S. Bancorp 33