32 slides from U.s. Bancorp's earnings presentation, Jul 20, 2011
Slide 1: U.S. Bancorp 2Q11 Earnings Conference Call
Exhibit 99.2 U.S. Bancorp 2Q11 Earnings Conference Call Richard K. Davis Chairman, President and CEO Andy Cecere July 20, 2011 Vice Chairman and CFO
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: 2Q11 Highlights
2Q11 Earnings 2Q11 Highlights Conference Call Net income of $1.2 billion; $0.60 per diluted common share Total net revenue of $4.7 billion, up 3.8% vs. 2Q10 • Net interest income growth of 5.6% vs. 2Q10 • Noninterest income growth of 1.7% vs. 2Q10 Average loan growth of 4.0% (3.5% excluding acquisit
Slide 4: Performance Ratios
2Q11 Earnings Performance Ratios Conference Call Efficiency Ratio and ROCE and ROA Net Interest Margin 20% 4% 70% 5% 15.9% 3.90% 3.91% 14.5% 3.83% 3.69% 13.7% 3.67% 15% 13.4% 3% 60% 4% 12.8% 10% 11.8%* 2% 50% 3% 52.4% 52.5% 51.6% 51.9% 51.1% 1.54% 5% 1.26% 1.31% 1.38% 1% 40% 2% 1.09% 0% 0% 30% 1% 2Q
Slide 5: Capital Position
2Q11 Earnings Capital Position Conference Call $ in billions 2Q11 1Q11 4Q10 3Q10 2Q10 Shareholders' equity $ 32.5 $ 30.5 $ 29.5 $ 29.2 $ 28.2 Tier 1 capital 27.8 26.8 25.9 24.9 24.0 Total risk-based capital 35.1 34.2 33.0 32.3 31.9 Tier 1 common equity ratio 8.4% 8.2% 7.8% 7.6% 7.4% Tier 1 capital r
Slide 6: Loan and Deposit Growth
2Q11 Earnings Loan and Deposit Growth Conference Call $ in billions Average Balances Year-Over-Year Growth 2Q11 Acquisition Adjusted Loan Growth = 3.5% Deposit Growth = 9.6% 230 14.2% 11.9% 2.4% $204.3 4.0% $209.4 210 2.0% 4.0% 5.8% 5.2% $198.8 $197.6 $192.5 $195.5 $191.2 12.3% 9.8% $190.3 190 $183.
Slide 7: Revenue Growth
2Q11 Earnings Revenue Growth Conference Call $ in millions Year-Over-Year Growth 8.7% 7.9% 7.9% 4.6% 3.8% 5,000 4,721 4,690 4,587 4,519 4,519 4,500 4,000 3,500 3,000 2Q10 3Q10 4Q10 1Q11 2Q11 Taxable-equivalent basis 7
Slide 8: Credit Quality
2Q11 Earnings Credit Quality Conference Call Change in Net Charge-offs Change in Nonperforming Assets* NCO $ Change (Left Scale) NPA $ Change (Left Scale) NCO % Change (Right Scale) NPA % Change (Right Scale) $ in millions, linked quarter change * Excluding Covered Assets (assets subject to loss sha
Slide 9: Credit Quality - Outlook
2Q11 Earnings Credit Quality - Outlook Conference Call The Company expects the level of Net Charge-offs and Nonperforming Assets to trend lower during 3Q11 Delinquencies* Changes in Criticized Assets* 2.0% 40.0% 36% 1.70% 1.62% 28% 1.45% 1.44% 1.48% 23% 1.34% 1.5% 20.0% 18% 16% 1.18% 1.11% 1.06% 1.0
Slide 10: Credit Quality - Reserves
2Q11 Earnings Credit Quality - Reserves Conference Call $ in millions Allowance for Credit Losses 6,000 200% 200% 167% 166% 150% 4,500 150% 165% 151% 140% 125% 3,000 130% 115% 102% 100% 100% 97% 94% 1,500 95% 77% 2,260 2,435 2,648 2,898 3,639 4,105 4,571 4,986 5,264 5,439 5,536 5,540 5,531 5,498 5,3
Slide 11: Earnings Summary
2Q11 Earnings Earnings Summary Conference Call $ in millions, except per-share data % B/(W) YTD YTD 2Q11 1Q11 2Q10 vs 1Q11 vs 2Q10 2011 2010 % B/(W) Net Interest Income $ 2,544 $ 2,507 $ 2,409 1.5 5.6 $ 5,051 $ 4,812 5.0 Noninterest Income 2,146 2,012 2,110 6.7 1.7 4,158 4,028 3.2 Total Revenue 4,69
Slide 12: 2Q11 Results - Key Drivers
2Q11 Earnings 2Q11 Results - Key Drivers Conference Call vs. 2Q10 Net Revenue growth of 3.8% • Net interest income growth of 5.6%; net interest margin of 3.67% vs. 3.90% • Noninterest income growth of 1.7% Noninterest expense growth of 2.0% Provision for credit losses lower by $567 million • Net cha
Slide 13: Notable Items
2Q11 Earnings Notable Items Conference Call $ in millions YTD YTD 2Q11 1Q11 2Q10 2011 2010 Revenue Items Securities gains (losses), net $ (8) $ (5) $ (21) $ (13) $ (55) Gain related to FCB acquisition - 46 - 46 - Expense Items ITS transaction debt extinguishment and expense - - 18 - 18 Incremental P
Slide 14: Net Interest Income
2Q11 Earnings Net Interest Income Conference Call $ in millions Net Interest Income Key Points Year-Over-Year Growth vs. 2Q10 14.5% 14.8% 5.9% 4.3% 5.6% Average earning assets grew by $30.1 billion, or 12.2% (11.6% excluding acquisitions) 2,700 6.0% 2,544 2,477 2,499 2,507 Net interest margin lower
Slide 15: Average Loans
2Q11 Earnings Average Loans Conference Call $ in billions Average Loans Key Points Year-Over-Year Growth vs. 2Q10 4.0% 5.8% 2.0% 2.4% 4.0% Average total loans grew by $7.6 billion, or 4.0% (3.5% excluding acquisitions) 240 $191.2 $192.5 $195.5 $197.6 $198.8 Average total loans, excluding covered loa
Slide 16: Average Deposits
2Q11 Earnings Average Deposits Conference Call $ in billions Average Deposits Key Points Year-Over-Year Growth vs. 2Q10 12.3% 9.8% 5.2% 11.9% 14.2% Average total deposits increased by $26.1 billion, or 14.2% (9.6% excluding acquisitions) 240 $204.3 $209.4 $190.3 Average low cost deposits (NIB, inter
Slide 17: Noninterest Income
2Q11 Earnings Noninterest Income Conference Call $ in millions Noninterest Income Key Points Year-Over-Year Growth vs. 2Q10 2.7% 0.8% 10.2% 4.9% 1.7% Noninterest income grew by $36 million, or 1.7%, driven by: 2800 • Payments revenue (5.9% growth) $2,110 $2,110 $2,222 $2,146 • Commercial products re
Slide 18: Noninterest Expense
2Q11 Earnings Noninterest Expense Conference Call $ in millions Noninterest Expense Key Points Year-Over-Year Growth vs. 2Q10 11.6% 16.2% 11.5% 8.3% 2.0% Noninterest expense was higher by $48 million, or 2.0%, majority of variance driven by: 2800 $2,485 $2,425 $2,377 $2,385 $2,314 • Increased compen
Slide 19: Mortgage Repurchase
2Q11 Earnings Mortgage Repurchase Conference Call Mortgages Repurchased and Make-whole Payments Repurchase activity lower than Mortgage Representation and Warranties Reserve peers due to: $ in millions 2Q11 1Q11 4Q10 3Q10 2Q10 • Conservative credit and underwriting Beginning Reserve $181 $180 $147 $
Slide 20: Regulatory Environment
2Q11 Earnings Regulatory Environment Conference Call Existing regulatory oversight actions FY 2010 Annual Actual Run Rate Overdraft Legislation $255 $440 - $480 Pricing and Policy Changes Card Act $160 $250 Net Interest Margin and Fee Income Durbin Amendment -- $300* Future regulatory oversight acti
Slide 21: Positioned to Win
2Q11 Earnings Positioned to Win Conference Call 21
Slide 22: Appendix
2Q11 Earnings Conference Call Appendix 22
Slide 23: Credit Quality - Commercial Loans
2Q11 Earnings Credit Quality - Commercial Loans Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 2Q10 1Q11 2Q11 Average Loans 40,095 42,683 44,135 60,000 6.0% 30-89 Delinquencies 0.73% 0.58% 0.46% 44,135 90+ Delinquencies 0.24% 0.13% 0.09% 40,726 41,700 42,683 45
Slide 24: Credit Quality - Commercial Leases
2Q11 Earnings Credit Quality - Commercial Leases Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 2Q10 1Q11 2Q11 Average Loans 6,245 6,030 5,919 8,000 6.0% 30-89 Delinquencies 1.55% 1.18% 1.00% 6,245 6,058 6,012 6,030 5,919 90+ Delinquencies 0.03% 0.03% 0.02% 6,0
Slide 25: Credit Quality - Commercial Real Estate
2Q11 Earnings Credit Quality - Commercial Real Estate Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 2Q10 1Q11 2Q11 Average Loans 34,164 35,179 35,499 40,000 10.0% 34,164 34,190 34,577 35,179 35,499 30-89 Delinquencies 0.98% 0.74% 0.45% 90+ Delinquencies 0.09%
Slide 26: Credit Quality - Residential Mortgage
2Q11 Earnings Credit Quality - Residential Mortgage Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 2Q10 1Q11 2Q11 Average Loans 26,821 31,777 32,734 36,000 32,734 6.0% 31,777 30-89 Delinquencies 1.75% 1.22% 1.11% 29,659 26,821 27,890 90+ Delinquencies 1.85% 1.3
Slide 27: Credit Quality - Home Equity
2Q11 Earnings Credit Quality - Home Equity Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 2Q10 1Q11 2Q11 Average Loans 19,332 18,801 18,634 24,000 6.0% 30-89 Delinquencies 0.89% 0.81% 0.78% 19,332 19,289 19,119 18,801 18,634 90+ Delinquencies 0.68% 0.71% 0.65%
Slide 28: Credit Quality - Credit Card
2Q11 Earnings Credit Quality - Credit Card Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 2Q10 1Q11 2Q11 Average Loans 16,329 16,124 15,884 20,000 16.0% 30-89 Delinquencies 1.86% 1.44% 1.34% 16,329 16,510 16,403 16,124 15,884 90+ Delinquencies 2.38% 1.62% 1.32%
Slide 29: Credit Quality - Retail Leasing
2Q11 Earnings Credit Quality - Retail Leasing Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 2Q10 1Q11 2Q11 Average Loans 4,364 4,647 4,808 8,000 4.0% 30-89 Delinquencies 0.46% 0.26% 0.20% 90+ Delinquencies 0.05% 0.04% 0.02% 6,000 3.0% Nonperforming Loans --% -
Slide 30: Credit Quality - Other Retail
2Q11 Earnings Credit Quality - Other Retail Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 2Q10 1Q11 2Q11 Average Loans 23,357 24,691 24,498 28,000 6.0% 24,281 24,983 24,691 24,498 30-89 Delinquencies 0.85% 0.63% 0.62% 23,357 90+ Delinquencies 0.32% 0.25% 0.20%
Slide 31: Non-Regulatory Capital Ratios
2Q11 Earnings Non-Regulatory Capital Ratios Conference Call $ in millions 2Q11 1Q11 4Q10 3Q10 2Q10 Total equity $ 33,341 $ 31,335 $ 30,322 $ 29,943 $ 28,940 Preferred stock (2,606) (1,930) (1,930) (1,930) (1,930) Noncontrolling interests (889) (828) (803) (792) (771) Goodwill (net of deferred tax li
Slide 32: U.S. Bancorp 2Q11 Earnings Conference Call
U.S. Bancorp 2Q11 Earnings Conference Call July 20, 2011