U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q1 2021 Earnings Presentation
33 slides from U.s. Bancorp's earnings presentation, Apr 15, 2021
Slide 1: U.S. Bancorp 1Q21 Earnings Conference Call
U.S. Bancorp 1Q21 Earnings Conference Call April 15, 2021 U.S. BANCORP
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: 1Q21 Highlights
1Q21 Highlights Income Statement change vs. Credit Quality change vs. $ in millions, except EPS 1Q21 4Q20 1Q20 $ in millions 1Q21 4Q20 1Q20 Net interest income* $3,089 (3.5) % (4.9) % Nonperforming assets $1,202 (7.4) % 27.1 % Noninterest income 2,381 (6.6) (5.7) NPA ratio 0.41 % (3 bps) 11 bps Repo
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** 24.3% 1.69% 19.0% 62.1% 58.0% 58.8% 15.6% 1.10% 12.1% 12.6% 0.95% 9.7% 2.91% 2.57% 2.50% 1Q20 4Q20 1Q21 1Q20 4Q20 1Q21 1Q20 4Q20 1Q21 1Q20 4Q20 1Q21
Slide 5: Digital Engagement Trends
Digital Engagement Trends Transactions (% of Total) 79% 80% 72% 67% Digital Active Customers 60% (% of Total Active Customers)* 78% 40% 33% 80% 28% 73% 21% 71% 20% 58% 0% 60% Three months ended 52% 52% 51% 2/28/19 2/29/20 2/28/21 50% 48% Total Digital Branch, ATM, Phone and IVR 40% Loan Sales (% of
Slide 6: Average Loans
Average Loans Change vs. (Three months ended 3/31/21) Avg. Balances 4Q20 1Q20 $302.3 Commercial $102.1 (4.1) % (3.7) % $297.7 $294.0 Commercial Real Estate 38.8 (3.3) (3.2) Residential Mortgages 75.2 (2.1) 6.1 Credit Card 21.1 (3.6) (11.3) Retail 56.8 (0.5) (0.2) Total loans $294.0 (2.8) % (1.2) % •
Slide 7: Average Deposits
Average Deposits Interest-bearing Deposits Average Change vs. Change $422.4 $426.4 (Three months ended 3/31/21) Balances 4Q20 1Q20 Rates vs. 4Q20 Money market savings $124.8 (2.0) % 2.4 % 0.16 % (0.01) % $362.8 Interest checking 97.4 6.6 25.9 0.02 (0.01) Savings accounts 58.8 5.6 22.5 0.01 (0.02) Ti
Slide 8: Credit Quality
Credit Quality Net Charge-offs Nonperforming Assets $1,298 $441 $1,202 $393 NCO Ratio NPAs $946 0.58% $223 -27 bps QoQ -7.4% QoQ 0.53% -22 bps YoY 0.44% 0.41% +27.1% YoY 0.31% 0.30% 1Q20 4Q20 1Q21 1Q20 4Q20 1Q21 NCOs NCOs/Avg Loans NPAs NPAs/Period-end Loans plus OREO Provision for Credit Losses $1,
Slide 9: Credit Risk Management – Consistent Underwriting
Credit Risk Management – Consistent Underwriting Disciplined Credit Underwriting, 1Q21 Allowance for Credit Losses by Loan Class, 1Q21 Loans and Leases Wtd Avg FICO/Bond Avg Amount Outstanding rating equivalent* LTV* ($B) (%) Residential mortgage 773 69% Commercial $1.9 1.9% Home equity 796 63% Comm
Slide 10: Credit Risk Management – COVID-19 Impacted Industries
Credit Risk Management – COVID-19 Impacted Industries Commercial/Commercial Real Estate Exposures Payment Relief* by Impacted Industries*** As of 12/31/20 As of 3/31/21 As of 12/31/20 As of 3/31/21 Outstanding Segment Outstanding Segment Balances Loans Balances Loans Loans Commitments Loans Commitme
Slide 11: Earnings Summary
Earnings Summary $ and shares in millions, except EPS Reported % Change 1Q21 4Q20 1Q20 vs. 4Q20 vs. 1Q20 Net Interest Income $3,063 $3,175 $3,223 (3.5) (5.0) Taxable-equivalent Adjustment 26 26 24 - 8.3 Net Interest Income (taxable-equivalent basis) 3,089 3,201 3,247 (3.5) (4.9) Noninterest Income 2
Slide 12: Net Interest Income
Net Interest Income $3,247 $3,201 Linked Quarter $3,089 • Net interest income decreased, primarily driven by a decline in average loan balances, the yield impact of prepayments on mortgage loans and securities and two fewer days in the quarter, partially offset by the benefit of deposit and funding
Slide 13: Noninterest Income
Noninterest Income Linked Quarter $2,525 $2,550 $2,381 • Mortgage banking revenue decreased, due to lower production volume and related gain on sale margins, as well as the unfavorable net impact of the $395 $468 $299 change in fair value of mortgage servicing rights, net of hedging activities. $427
Slide 14: Payment Services
Payment Services Payment Fees as a % of Net Revenue 2019 1Q21 • Payments fee revenues are essentially flat compared with the first quarter of 2020 7.0% 5.8% 6.1% 6.1% • Payments sales volumes have rebounded since 2.3% bottoming in April 2020 84.0% 85.8% 2.9% • Travel & hospitality, airline, and trav
Slide 15: Payment Services Volume Growth
Payment Services Volume Growth Volume Growth YoY Merchant Sales Volume Growth**** CPS Sales Volume Growth**** RPS** Sales Volume Growth**** 0% 0% 0% 1Q20 2Q20 3Q20 4Q20 1Q21 1Q20 2Q20 3Q20 4Q20 1Q21 1Q20 2Q20 3Q20 4Q20 1Q21 Travel & Hospitality* Airline All Other Total Travel & Entertainment All Oth
Slide 16: Noninterest Expense
Noninterest Expense Linked Quarter $3,316 $3,364 $3,379 • Compensation increased, primarily due to higher performance-based $289 $362 $359 incentives and the first quarter impact of stock-based compensation. $276 $269 $263 • Employee benefits expense increased, driven by seasonally higher $245 $302
Slide 17: Capital Position
Capital Position $ in billions 1Q21 4Q20 3Q20 2Q20 1Q20 Total U.S. Bancorp shareholders' equity $51.7 $53.1 $52.6 $51.9 $51.5 Basel III Standardized Approach* Common equity tier 1 capital ratio 9.9% 9.7% 9.4% 9.0% 9.0% Tier 1 capital ratio 11.5% 11.3% 11.0% 10.6% 10.5% Total risk-based capital ratio
Slide 18: Appendix
Appendix U.S. BANCORP | 18
Slide 19: Average Loans
Average Loans Average Loans ($bn) Key Points Year-over-Year Growth vs. 1Q20 • Average total loans decreased by $3.7 billion, or 1.2% 4.0% 10.0% 6.4% 2.5% (1.2%) • Average residential mortgage loans increased by $4.3 $318.1 $311.0 billion, or 6.1% $297.7 $302.3 $294.0 • Average commercial loans decre
Slide 20: Average Deposits
Average Deposits Average Deposits ($bn) Key Points Year-over-Year Growth vs. 1Q20 8.2% 16.8% 15.9% 18.5% 17.5% • Average total deposits increased by $426.4 $63.6 billion, or 17.5% $422.4 $403.3 $405.5 $362.8 • Average low-cost deposits (NIB, interest 30.1% 55.0% 59.6% checking, savings and money mar
Slide 21: Credit Quality – Commercial
Credit Quality – Commercial Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q20 4Q20 1Q21 Average Loans $105,987 $106,421 $102,091 2.0% 20.8% (9.8%) (7.9%) (4.1%) 30-89 Delinquencies 0.28% 0.31% 0.19% $128,039 90+ Delinquencies 0.06% 0.05% 0.06% $115,489 Nonpe
Slide 22: Credit Quality – Commercial Real Estate
Credit Quality – Commercial Real Estate Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q20 4Q20 1Q21 Average Loans $40,078 $40,098 $38,786 0.9% 2.5% (0.4%) (2.0%) (3.3%) 30-89 Delinquencies 0.20% 0.47% 0.31% 90+ Delinquencies 0.00% 0.01% 0.01% $40,078 $41,088
Slide 23: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q20 4Q20 1Q21 Average Loans $70,892 $76,809 $75,201 1.4% 0.3% 6.6% 1.3% (2.1%) 30-89 Delinquencies 0.23% 0.32% 0.28% $75,786 $76,809 $75,201 90+ Delinquencies 0.15% 0.18% 0.1
Slide 24: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q20 4Q20 1Q21 Average Loans $23,836 $21,937 $21,144 (1.1%) (9.8%) 2.5% (0.5%) (3.6%) 30-89 Delinquencies 1.29% 1.04% 0.90% 90+ Delinquencies 1.29% 0.88% 0.95% $23,836 $21,510 $22,052
Slide 25: Credit Quality – Home Equity
Credit Quality – Home Equity Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q20 4Q20 1Q21 Average Loans $14,838 $12,816 $12,062 (2.5%) (3.0%) (5.8%) (5.4%) (5.9%) 30-89 Delinquencies 0.53% 0.54% 0.37% 90+ Delinquencies 0.30% 0.36% 0.36% $14,838 $14,386 $13,55
Slide 26: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q20 4Q20 1Q21 (0.1%) (0.7%) 0.3% (1.6%) (3.9%) Average Loans $8,474 $8,299 $7,975 30-89 Delinquencies 0.52% 0.43% 0.34% $8,474 $8,412 $8,438 $8,299 3.0% 90+ Delinquencies 0.04% 0.0
Slide 27: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q20 4Q20 1Q21 Average Loans $33,552 $35,928 $36,730 0.1% 0.0% 3.6% 3.3% 2.2% 30-89 Delinquencies 0.79% 0.60% 0.40% $35,928 $36,730 90+ Delinquencies 0.14% 0.10% 0.07% $33,552 $33,550
Slide 28: Credit Quality – Auto Loans
Credit Quality – Auto Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 1Q20 4Q20 1Q21 Linked Quarter Growth Average Loans $19,276 $19,390 $19,881 (0.8%) (2.7%) 0.3% 3.0% 2.5% 30-89 Delinquencies 1.08% 0.83% 0.55% 90+ Delinquencies 0.12% 0.11% 0.06% $19,276 $19,390 $19,881 $18,7
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures (Dollars in Millions, Unaudited) Three Months Ended March 31, December 31, March 31, 2021 2020 2020 Net interest income $3,063 $3,175 $3,223 Taxable-equivalent adjustment (4) 26 26 24 Net interest income, on a taxable-equivalent basis 3,089 3,201 3,247 Net interest income
Slide 30: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended March 31, December 31, March 31, (Dollars in Millions, Unaudited) 2021 2020 2020 Net income applicable to U.S. Bancorp common shareholders $2,175 $1,425 $1,088 Intangibles amortization (net-of-tax) 30 37 33 Net income applicable to U.S. Bancorp common s
Slide 31: Non-GAAP Financial Measures
Non-GAAP Financial Measures March 31, December 31, September 30, June 30, March 31, (Dollars in Millions, Unaudited) 2021 2020 2020 2020 2020 Total equity $52,308 $53,725 $53,195 $52,480 $52,162 Preferred stock (5,968) (5,983) (5,984) (5,984) (5,984) Noncontrolling interests (630) (630) (630) (630)
Slide 32: 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 33: U.S. Bancorp 1Q21 Earnings Conference Call
U.S. Bancorp 1Q21 Earnings Conference Call April 15, 2021 U.S. BANCORP