U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q4 2021 Earnings Presentation
28 slides from U.s. Bancorp's earnings presentation, Jan 19, 2022
Slide 1: U.S. Bancorp 4Q21 Earnings Conference Call
U.S. Bancorp 4Q21 Earnings Conference Call January 19, 2022 U . S. BAN C ORP
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: 4Q21 Highlights
4Q21 Highlights Income Statement change vs. Credit Quality change vs. $ in millions, except EPS 4Q21 3Q21 4Q20 $ in millions 4Q21 3Q21 4Q20 Net interest income* $3,150 (1.5) % (1.6) % Nonperforming assets $878 (7.0) % (32.4) % Noninterest income 2,534 (5.9) (0.6) NPA ratio 0.28 % (4 bps) (16 bps) Re
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** 20.2% 62.3% 58.8% 58.4% 1.45% 15.9% 16.6% 15.6% 1.16% 13.0% 1.10% 12.1% 2.57% 2.53% 2.40% 4Q20 3Q21 4Q21 4Q20 3Q21 4Q21 4Q20 3Q21 4Q21 4Q20 3Q21 4Q2
Slide 5: Digital Engagement Trends
Digital Engagement Trends Digital Active Customers (% of Total Active Customers)* Transactions (% of Total) 80% 80% 77% 81% 73% 77% 80% 70% 62% 60% 57% 51% 51% 52% 60% 43% 40% 30% 40% 23% 19% 20% 20% 0% Three months ended 0% 11/30/19 11/30/20 11/30/21 11/30/19 11/30/20 11/30/21 Mobile Online Total D
Slide 6: Business Banking and Payments Trends
Business Banking and Payments Trends Banking and Payments* Relationships Business Banking Payments 71.8% 28.2% 50.1% 49.9% Business Business Banking & Business Banking & Payments only Banking only Payments Payments With 1.1 million business banking relationships**, there is a significant opportunity
Slide 7: Average Loans
Average Loans Change vs. (Three months ended 12/31/21) Avg. Balances 3Q21 4Q20 $302.3 $302.8 Commercial $104.5 2.6 % (1.8) % $296.7 Commercial Real Estate 38.9 (0.2) (3.1) Residential Mortgages 75.9 2.4 (1.2) Credit Card 22.4 2.3 2.1 Other Retail 61.1 1.9 7.2 Total loans $302.8 2.0 % 0.1 % • On a li
Slide 8: Average Deposits
Average Deposits Interest-bearing Deposits $422.4 $431.5 $449.8 Average Change vs. Change (Three months ended 12/31/21) Balances 3Q21 4Q20 Rates vs. 3Q21 Money market savings $117.4 4.3 % (7.8) % 0.17 % - % Interest checking 108.9 5.7 19.2 0.02 - Savings accounts 64.8 2.2 16.2 0.01 - Time deposits 2
Slide 9: Credit Quality
Credit Quality Net Charge-offs Nonperforming Assets $1,298 $441 NCO Ratio NPAs $944 -3 bps QoQ $878 -7.0% QoQ 0.58% -41 bps YoY 0.44% -32.4% YoY $147 $132 0.32% 0.28% 0.20% 0.17% 4Q20 3Q21 4Q21 4Q20 3Q21 4Q21 NCOs NCOs/Avg Loans NPAs NPAs/Period-end Loans plus OREO Provision for Credit Losses Allowa
Slide 10: Earnings Summary
Earnings Summary $ and shares in millions, except EPS Reported % Change 4Q21 3Q21 4Q20 vs. 3Q21 vs. 4Q20 Net Interest Income $3,123 $3,171 $3,175 (1.5) (1.6) Taxable-equivalent Adjustment 27 26 26 3.8 3.8 Net Interest Income (taxable-equivalent basis) 3,150 3,197 3,201 (1.5) (1.6) Noninterest Income
Slide 11: Net Interest Income
Net Interest Income $3,201 $3,197 Linked Quarter $3,150 • Net interest income decreased, primarily due to lower loan fees related to the SBA Paycheck Protection Program. • The net interest margin decreased, primarily reflecting lower loan fees related to the SBA Paycheck Protection Program, as well
Slide 12: Noninterest Income
Noninterest Income $2,693 Linked Quarter $2,550 $2,534 • Mortgage banking revenue decreased, driven by lower production volume and $418 $298 related gain on sale margins and the slightly unfavorable net impact of the $468 change in fair value of mortgage servicing rights, net of hedging activities.
Slide 13: Payment Services
Payment Services % of Merchant Acquiring Volume Payment Fees as a % of Net Revenue Merchant Acquiring 2019 4Q21 2019 4Q21 Travel & Hospitality * 22% 22% • Volumes in each of our Airline 15% 9% payments businesses 7.0% 6.4% continue to rebound, All Other 63% 69% despite late quarter 6.1% 6.7% % of CP
Slide 14: Noninterest Expense
Noninterest Expense Linked Quarter $3,429 $3,533 • Employee benefits expense increased, driven by higher medical claims $3,364 $361 $372 expense. $362 $259 $268 • Professional services expense increased, primarily due to an increase $269 $294 $360 in business investment and related initiatives. $302
Slide 15: Capital Position
Capital Position $ in billions 4Q21 3Q21 2Q21 1Q21 4Q20 Total U.S. Bancorp shareholders' equity $54.9 $53.7 $53.0 $51.7 $53.1 Basel III Standardized Approach* Common equity tier 1 capital ratio 10.0% 10.2% 9.9% 9.9% 9.7% Tier 1 capital ratio 11.6% 11.7% 11.5% 11.5% 11.3% Total risk-based capital rat
Slide 16: Appendix
Appendix U . S. BAN C ORP | 16
Slide 17: Average Loans
Average Loans Average Loans ($bn) Key Points Year-over-Year Growth Linked Quarter • Average total loans increased by $6.0 billion, or 2.0% 2.5% (1.2%) (7.5%) (4.6%) 0.1% • Average commercial loans increased by $2.7 billion, or 2.6% $302.3 $294.0 $294.3 $296.7 $302.8 • Average residential mortgage lo
Slide 18: Average Deposits
Average Deposits Average Deposits ($bn) Key Points Year-over-Year Growth Linked Quarter 18.5% 17.5% 6.4% 6.4% 6.5% • Average total deposits increased by $18.4 billion, or 4.3% $449.8 $422.4 $426.4 $429.2 $431.5 • Average low-cost deposits (NIB, interest checking, savings and money market) 18.1% 55.0
Slide 19: Credit Quality – Commercial
Credit Quality – Commercial Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth, including PPP $mm 4Q20 3Q21 4Q21 (7.9%) (4.1%) 0.9% (1.1%) 2.6% Average Loans $106,421 $101,832 $104,508 30-89 Delinquencies 0.31% 0.16% 0.47% Linked Quarter Growth, excluding PPP 90+ Deli
Slide 20: Credit Quality – Commercial Real Estate
Credit Quality – Commercial Real Estate Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 4Q20 3Q21 4Q21 Average Loans $40,098 $38,921 $38,851 (2.0%) (3.3%) (0.6%) 0.9% (0.2%) 30-89 Delinquencies 0.47% 0.08% 0.20% 90+ Delinquencies 0.01% 0.05% 0.03% $40,098 $38,7
Slide 21: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 4Q20 3Q21 4Q21 Average Loans $76,809 $74,104 $75,858 1.3% (2.1%) (2.5%) 1.0% 2.4% 30-89 Delinquencies 0.32% 0.20% 0.15% $76,809 $75,201 $75,858 90+ Delinquencies 0.18% 0.15% 0
Slide 22: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 4Q20 3Q21 4Q21 Linked Quarter Growth Average Loans $21,937 $21,905 $22,399 (0.5%) (3.6%) (0.1%) 3.7% 2.3% 30-89 Delinquencies 1.04% 0.83% 0.86% 90+ Delinquencies 0.88% 0.66% 0.73% $21,937 $21,905 $22,399 No
Slide 23: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 4Q20 3Q21 4Q21 Linked Quarter Growth Average Loans $57,043 $59,977 $61,139 0.5% (0.5%) 2.7% 2.9% 1.9% 30-89 Delinquencies 0.56% 0.41% 0.44% 90+ Delinquencies 0.15% 0.11% 0.11% Nonperforming Loans 0.27% 0.2
Slide 24: Non-GAAP Financial Measures
Non-GAAP Financial Measures (Dollars in Millions, Unaudited) Three Months Ended December 31, September 30, December 31, 2021 2021 2020 Net interest income $3,123 $3,171 $3,175 Taxable-equivalent adjustment (4) 27 26 26 Net interest income, on a taxable-equivalent basis 3,150 3,197 3,201 Net interest
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended December 31, September 30, December 31, (Dollars in Millions, Unaudited) 2021 2021 2020 Net income applicable to U.S. Bancorp common shareholders $1,582 $1,934 $1,425 Intangibles amortization (net-of-tax) 32 32 37 Net income applicable to U.S. Bancorp c
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures December 31, September 30, June 30, March 31, December 31, (Dollars in Millions, Unaudited) 2021 2021 2021 2021 2020 Total equity $55,387 $54,378 $53,674 $52,308 $53,725 Preferred stock (6,371) (5,968) (5,968) (5,968) (5,983) Noncontrolling interests (469) (635) (635) (63
Slide 27: 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 28: U.S. Bancorp 4Q21 Earnings Conference Call
U.S. Bancorp 4Q21 Earnings Conference Call January 19, 2022 U . S. BAN C ORP