U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q1 2020 Earnings Presentation
31 slides from U.s. Bancorp's earnings presentation, Apr 15, 2020
Slide 1: U.S. Bancorp 1Q20 Earnings Conference Call
U.S. Bancorp 1Q20 Earnings Conference Call April 15, 2020 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: 1Q20 Highlights
1Q20 Highlights * Taxable-equivalent basis; see slide 27 for calculation ** Common equity tier 1 capital to risk-w eighted assets, reflecting the full implementation of the current expected credit losses methodology U . S. BAN C ORP | 3 w as 8.6% as of 3/31/20.
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*** 1.49% 60.3% 1.44%* 14.3% 14.1%* 18.4% 18.1%* 58.0% 55.4% 55.4%* 1.21% 11.8% 15.2% 12.6% 9.7% 0.95% 3.16% 2.92% 2.91% 1Q19 4Q19 1Q20 1Q19 4Q19 1Q2
Slide 5: Digital Engagement Trends
Digital Engagement Trends Transactions (% of Total) 80% 72% 65% 67% Digital Active Customers 60% (% of Total Active Customers)* 40% 35% 33% 80% 28% 73% 70% 71% 20% 0% 60% Three months ended 54% 52% 52% 51% 2/28/18 2/28/19 2/29/20 48% 43% Total Digital Branch, ATM, Phone and IVR 40% Loan Sales (% of
Slide 6: Average Loans
Average Loans $294.9 $297.7 $286.1 $286.1 $294.9 $297.7 • On a linked quarter basis, average total loan growth was driven by growth in total commercial loans and residential mortgages. • On a year-over-year basis, the increase was primarily due to higher 1Q19 4Q19 1Q20 residential mortgages, along w
Slide 7: Average Deposits
Average Deposits Interest-bearing Deposits $356.5 $362.8 $335.4 • Average noninterest-bearing (NIB) deposits decreased on a linked quarter basis. On a year-over-year basis, average NIB deposits increased. 1Q19 4Q19 1Q20 • Average total savings deposits (which include money market, interest checking
Slide 8: Credit Quality
Credit Quality Net Charge-offs Nonperforming Assets $1,005 $385 $393 $946 $367 NCO Ratio NPAs $829 +1 bps QoQ +14.1% QoQ 0.52% 0.52% 0.53% +1 bps YoY 0.35% -5.9% YoY 0.28% 0.30% 1Q19 4Q19 1Q20 1Q19 4Q19 1Q20 NCOs NCOs/Avg Loans NPAs NPAs/Period-end Loans plus OREO Provision for Credit Losses $600 $1
Slide 9: Credit Risk Management – Consistent Underwriting
Credit Risk Management – Consistent Underwriting 1Q20 Wtd Avg Exposures by Impacted Industries* FICO/Bond rating Portfolio equivalent 1Q20 Avg LTV 1Q20 1Q20 Commitments Total Loans Residential mortgage 766 69% Restaurant 0.5% 0.5% Airline 0.6% 0.6% Home equity 784 68% Lodging 1.3% 1.5% Energy 2.4% 1
Slide 10: Earnings Summary
Earnings Summary U . S. BAN C ORP | 10
Slide 11: Net Interest Income
Net Interest Income $3,286 $3,231 $3,247 Linked Quarter • Net interest income increased, primarily driven by loan growth, the impact of reducing interest rates on deposits and funding mix, partially offset by lower yields on earning assets and one less day in the first quarter of 2020. • The net int
Slide 12: Noninterest Income
Noninterest Income Linked Quarter • Payment services revenue declined, driven by lower credit and debit card $2,525 revenue, lower merchant processing services revenue due to seasonally $2,436 $2,291 lower sales volume and the worldwide impact of the COVID-19 virus on $244 $395 spend, and lower corp
Slide 13: Payment Services Fee Revenue
Payment Services Fee Revenue Select Revenue Exposure, FY2019 Contribution to U.S. Bank’s Net Revenues Merchant Acquiring - 7% Retail Payment Solutions - 6% Corporate Payment Systems - 3% Corporate Payment Systems Revenue Merchant Acquiring Revenue Commercial revenue breakdown: Travel and Hospitality
Slide 14: Noninterest Expense
Noninterest Expense Linked Quarter • Employee benefits expense increased, driven by seasonally higher $3,401 $3,316 payroll taxes. $3,087 $291 $289 • Compensation expense increased, primarily due to the first quarter $257 $286 $276 impacts of merit and stock-based compensation. $277 $327 $245 $256 •
Slide 15: Capital Position
Capital Position * Non-GAAP; see slide 29 for calculations U . S. BAN C ORP | 15
Slide 16: Appendix
Appendix U . S. BAN C ORP | 16
Slide 17: Average Loans
Average Loans Average Loans ($bn) Key Points Year-over-Year Growth vs. 1Q19 • Average total loans increased by $11.5 billion, or 4.0% 2.4% 3.8% 4.0% 3.9% 4.0% • Average residential mortgage loans increased by $5.3 billion, or 8.1% $292.4 $294.9 $297.7 $286.1 $289.2 • Average commercial loans increas
Slide 18: Average Deposits
Average Deposits Average Deposits ($bn) Key Points Year-over-Year Growth vs. 1Q19 0.2% 3.1% 6.0% 6.6% 8.2% • Average total deposits increased by $27.4 billion, or 8.2% $356.5 $362.8 $345.2 $349.9 $335.4 • Average low-cost deposits (NIB, interest (3.7%) 1.0% (7.5%) (3.4%) checking, savings and money
Slide 19: Credit Quality – Commercial
Credit Quality – Commercial Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 1Q19 4Q19 1Q20 Linked Quarter Growth Average Loans $101,960 $103,911 $105,987 1.4% 1.2% 0.4% 0.2% 2.0% 30-89 Delinquencies 0.58% 0.30% 0.28% $101,960 $103,233 $103,660 $103,911 $105,987 90+ Delinquencies 0.0
Slide 20: Credit Quality – Commercial Real Estate
Credit Quality – Commercial Real Estate Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 1Q19 4Q19 1Q20 Linked Quarter Growth Average Loans $39,470 $39,722 $40,078 (1.7%) (0.3%) (1.0%) 1.9% 0.9% 30-89 Delinquencies 0.11% 0.09% 0.20% 90+ Delinquencies 0.01% 0.01% 0.00% $39,470 $39,365
Slide 21: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q19 4Q19 1Q20 Average Loans $65,582 $69,909 $70,892 1.7% 1.9% 2.7% 1.9% 1.4% 30-89 Delinquencies 0.26% 0.22% 0.23% $68,608 $69,909 $70,892 $65,582 $66,834 90+ Delinquencies 0
Slide 22: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q19 4Q19 1Q20 Average Loans $22,597 $24,107 $23,836 0.9% 1.0% 3.7% 1.8% (1.1%) 30-89 Delinquencies 1.31% 1.30% 1.29% $22,830 $23,681 $24,107 $23,836 $22,597 90+ Delinquencies 1.29% 1.
Slide 23: Credit Quality – Home Equity
Credit Quality – Home Equity Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q19 4Q19 1Q20 Average Loans $15,993 $15,221 $14,838 (0.4%) (1.0%) (1.5%) (2.4%) (2.5%) 30-89 Delinquencies 0.54% 0.51% 0.53% $15,993 $15,831 90+ Delinquencies 0.37% 0.32% 0.30% $15,60
Slide 24: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q19 4Q19 1Q20 1.1% (0.5%) (1.2%) 0.5% (0.1%) Average Loans $8,586 $8,486 $8,474 30-89 Delinquencies 0.42% 0.53% 0.52% $8,586 $8,547 90+ Delinquencies 0.03% 0.05% 0.04% $8,442 $8,48
Slide 25: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q19 4Q19 1Q20 Average Loans $31,922 $33,509 $33,552 1.1% 2.1% 2.7% 0.2 % 0.1% 30-89 Delinquencies 0.78% 0.81% 0.79% $32,578 $33,454 $33,509 $33,552 90+ Delinquencies 0.14% 0.13% 0.14
Slide 26: Credit Quality – Auto Loans
Credit Quality – Auto Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q19 4Q19 1Q20 Average Loans $18,833 $19,434 $19,276 1.8% 1.0% 2.1% 0.0% (0.8%) 30-89 Delinquencies 0.95% 1.06% 1.08% $19,426 $19,434 90+ Delinquencies 0.08% 0.10% 0.12% $18,833 $19,023
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures (2), (3), (4), (5) – see slide 30 for corresponding notes U . S. BAN C ORP | 27
Slide 28: Non-GAAP Financial Measures
Non-GAAP Financial Measures (1), (5) – see slide 30 for corresponding notes U . S. BAN C ORP | 28
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures * Preliminary data. Subject to change prior to filings w ith applicable regulatory agencies. (1), (6), (7) – see slide 30 for corresponding notes U . S. BAN C ORP | 29
Slide 30: Notes
Notes (1) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements. (2) 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. (
Slide 31: U.S. Bancorp 1Q20 Earnings Conference Call
U.S. Bancorp 1Q20 Earnings Conference Call April 15, 2020 U . S. BAN C ORP