U.s. Bancorp · NYSE:USB
U.s. Bancorp — Barclays Americas Select Franchise Conference 2024
33 slides from U.s. Bancorp's conference presentation, May 7, 2024
Slide 1: Barclays Americas Select Franchise Conference 2024
May 7, 2024 Barclays Americas Select Franchise Conference 2024 Terry Dolan Vice Chair and Chief Administration Officer John Stern Senior Executive Vice President and Chief Financial Officer U.S. Bancorp U.S. Bancorp 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: A trusted partner with a strong foundation
A trusted partner with a strong foundation NYSE Traded USB Branches 2,256 Assets $654B Founded 1863 ATMs 4,522 Deposits $503B Market Cap $64B Loans $371B Regional National International Branch footprint Mortgage, Wealth and Payment Services Business, Commercial & Corporate Banking Investment Service
Slide 4: A scaled player in the industry
A scaled player in the industry Assets Deposits Market Cap Rank Company $B Rank Company $B Rank Company $B 1 J.P. Morgan $3,969 1 J.P. Morgan $2,375 1 J.P. Morgan $556 2 Bank of America 3,247 2 Bank of America 1,908 2 Bank of America 298 3 Wells Fargo 1,917 3 Wells Fargo 1,342 3 Wells Fargo 210 4 U.
Slide 5: Performance ratios
Performance ratios Adjusted Return on Adjusted Return on Adjusted Return on Average Assets1 Average Common Equity Tangible Common Equity2 1.27% 15.1% 13.9% 14.1% 1.16% 1.14% 1.15% 1.13% 13.3% 20.0% 12.0% 18.5% 18.1% 18.2% 10.8% 16.7% 1.06% 14.6% 3 year avg 5 year avg 10 year avg 3 year avg 5 year av
Slide 6: Expanded opportunities with Union Bank
Expanded opportunities with Union Bank Digital Meaningfully Transformation enhances scale Significant value creation Payments Ecosystem + Underpenetrated client base = for our customers, shareholders, communities, and Strategic Strategically & financially employees Partnerships attractive We’ve incr
Slide 7: What drives our higher returns
What drives our higher returns Our business mix Our efficient operating platform Our risk management philosophy Our culture Our commitment to corporate social responsibility U.S. U.S.Bancorp Bancorp 7
Slide 8: Our differentiated business mix supports consistent growth
Our differentiated business mix supports consistent growth Consumer & Payment Services - 26% Business Banking - 37% Wealth, Corporate, Commercial & Institutional Banking - 37% Consumer & Business Banking Wealth, Corporate, Commercial & Payment Services Institutional Banking Branch Banking, Small Bus
Slide 9: Our sustainable earnings power
Our sustainable earnings power Strong annualized fee income generated by our diversified business model supports our short- and long- term growth objectives Fee income represents 40% of 26% 37% U.S. Bancorp total net revenue1 As a % of Total Net Revenue1 Fee revenue differentiators with national rea
Slide 10: Our market leading products
Our market leading products Deepening relationships, broadening product sets and expanding footprint to deliver capital efficient growth Consumer & Business Banking Wealth, Corporate, Commercial & Institutional Banking >11M Clients $472B AUM1 | ~$11T AUCA1 › Leading digital platform across Mortgage,
Slide 11: Our payments ecosystem is a key differentiator
Our payments ecosystem is a key differentiator Demonstrated business banking revenue and relationship growth 3-year Medium Business Banking Cumulative rates term Payments Ecosystem Revenue1 ~30% +25%-30% $3.6B Opportunity $2.7B 3-year Medium Business Banking Cumulative rates term Relationships2 ~3
Slide 12: Digital strategy driving efficiencies
Digital strategy driving efficiencies Our digital strategy continues to evolve, becoming core to our operating model and a key differentiator within the industry Clear Objectives Simplicity in Execution Generate Efficiencies Modernize infrastructure to Simplified solutions to facilitate Accelerate d
Slide 13: Credit quality
Credit quality Trends reflect normalization in the credit environment and expected CRE stress Net Charge-off and Nonperforming Assets Allowance for Credit Losses by Loan Category, 1Q24 Change vs. Amount Reserve 1Q24 4Q23 1Q23 ($B) (%) Non-performing Assets Commercial $2.2 1.6% Balance $1,786 $292 $6
Slide 14: Disciplined underwriting 'through-the-cycle'
Disciplined underwriting ‘through-the-cycle’ Net Charge-Off Rates 4.0% 3.5% 3.0% 2.5% NCO Rate 2.0% 1.5% 1.0% U.S. Bancorp Average 0.75% to 1.00% 0.5% 0.0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Year Recession Indicator NCO Rate
Slide 15: Our culture
Our culture Our strength, soundness and commitment to our stakeholders are at the center of everything we do Most Admired Superregional Bank Fortune® 2024 (14 consecutive years) Best Places to Work for LGBTQ Equality (17 times) Disability Equality Index – Perfect Score Disability:IN 2023 (6 cons
Slide 16: Our commitment to corporate social responsibility
Our commitment to corporate social responsibility We strive to manage our business in an ethical manner while supporting sustainable and inclusive growth Increase Equity, Access & Lead with Core Values Enable a Sustainable Future Economic Empowerment › Committed to the highest standards of › Goal of
Slide 17: 1Q24 earnings highlights
1Q24 earnings highlights Reported Adjusted 1 ▪ Strong financial performance $0.78 | $0.90 › Highly diversified and sustainable fee revenue streams represents ~40% of Earnings per share total net revenue Reported 1 Adjusted 1 ▪ Prudent expense management › Operational efficiency supports ongoing expe
Slide 18: Balance sheet summary
Balance sheet summary Effective balance sheet management and continued consumer deposit growth Total Average Loan Balance Total Average Deposits $377 $373 $371 $512 $503 $503 3Q23 4Q23 1Q24 3Q23 4Q23 1Q24 Highlights Consumer Deposit Growth (Avg.) $222 $224 $225 • Average loan decline driven by slowe
Slide 19: Prudent loan growth
Prudent loan growth Disciplined loan growth focused on high margin / high return business; Limited Commercial Real Estate Office exposure and appropriately reserved Total Loan Portfolio Mix ($B) CRE Exposure Average % of Average Change vs. Consumer 50% Multi Family 34% 1Q24 Balance Total 4Q23 1Q23 C
Slide 20: Deposit composition
Deposit composition A strong deposit base with a highly diversified deposit composition 1Q24 Average deposits by business line 1Q24 Uninsured deposit composition2 3% Total Deposit Base Uninsured Composition Non-Operational 15% ~20% Uninsured ~49% Uninsured 52% deposits are largely Operational 30% op
Slide 21: Investment securities portfolio
Investment securities portfolio Investment Securities Portfolio Composition End of Period Balances 3.9% $161.2 $163.8 $162.1 $160.6 $162.4 6.4% Agency Residential MBS 45% 47% 47% 48% 49% US Treasury and Agencies 6.7% 2.97% 2.96% 2.75% 2.87% 2.64% Municipals 15.5% 67.5% Agency Commercial MBS 55% 53%
Slide 22: Guidance – 2Q and FY 2024
Guidance – 2Q and FY 2024 2Q 2024 Guidance Net interest income1 Relatively stable vs. Q1 2024 of ~$4.0B FY 2024 Guidance Net interest income1 $16.1B to $16.4B Total noninterest income, Mid-single digit growth as adjusted2 vs FY 2023 of ~$10.8B Total noninterest expense, $16.8B or less as adjusted2 U
Slide 23: Appendix
Appendix U.S. Bancorp 23
Slide 24: Wealth, Corporate, Commercial and Institutional Banking
Wealth, Corporate, Commercial and Institutional Banking With greater scale and a broader product set we offer our clients a compelling value proposition Traditional Loans and Deposits Wealth and Capital Markets Transaction Processing › Strong brand positioning, product › Our holistic offering and ex
Slide 25: Consumer & Business Banking
Consumer & Business Banking Serving millions of clients across three major business areas Consumer Banking Consumer Lending Business Banking › Healthy deposit franchise with › Flexible and adaptable business › Integrated ecosystem of banking, growing balances model payments, and technology › Leading
Slide 26: Payment Services
Payment Services Empowering real-time decision making, funding, and payments via three distinct business lines Our competitive advantage Retail Payment Complete payments ecosystem - full suite of payment and banking products and services Solutions Innovation and technology platforms Breadth an
Slide 27: Non-GAAP financial measures
Non-GAAP financial measures Year Ended (Dollars in Millions, Unaudited) 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 Net income applicable to U.S. Bancorp common shareholders $ 5,051 $ 5,501 $ 7,605 $ 4,621 $ 6,583 $ 6,784 $ 5,913 $ 5,589 $ 5,608 $ 5,583 Less: Notable items (1) (1,597) (1,134)
Slide 28: Non-GAAP financial measures
Non-GAAP financial measures Three Months Ended (Dollars in Millions, Unaudited) March 31, 2024 Net income applicable to U.S. Bancorp common shareholders $ 1,209 Less: Notable items, including the impact of earnings allocated to participating stock awards (1) (198) Net income applicable to U.S. Banco
Slide 29: Non-GAAP financial measures
Non-GAAP financial measures Three Months Ended (Dollars in Millions, Unaudited) March 31, 2024 Net income applicable to U.S. Bancorp common shareholders $ 1,209 Intangibles amortization (net-of-tax) 115 Net income applicable to U.S. Bancorp common shareholders, excluding intangibles amortization 1,3
Slide 30: Non-GAAP financial measures
Non-GAAP financial measures Three Months Ended (Dollars in Millions, Unaudited) June 30, 2023 March 31, 2023 Net charge-offs $ 649 $ 373 Less: Notable items (1) 309 91 Net charge-offs, excluding notable items 340 282 Annualized net charge-offs, excluding notable items (a) 1,364 1,144 Average loan ba
Slide 31: Non-GAAP financial measures
Non-GAAP financial measures Three Months Ended ($ in millions) March 31, 2024 Line of Business Financial Performance Net Revenue Wealth, Corporate, Commercial and Institutional Banking $ 2,378 Consumer and Business Banking 2,437 Payment Services 1,715 Treasury and Corporate Support 185 Total Company
Slide 32: Notable items
Notable items 1. Notable items of $265 million ($199 million net-of-tax) for the three months ended March 31, 2024 included $155 million of merger and integration-related charges and a $110 million charge for the increase in the FDIC special assessment. Notable items for the year-ended December 31,
Slide 33: U.S. Bancorp
U.S. Bancorp 33
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