U.s. Bancorp · NYSE:USB
U.s. Bancorp — Citi 2010 Financial Services Conference
41 slides from U.s. Bancorp's conference presentation, Mar 10, 2010
Slide 1: Citi 2010 Financial Services Conference
Richard K. Davis Chairman, President and CEO March 10, 2010 Citi 2010 Financial Services Conference
Slide 2: Forward-looking Statements and Additional Information
2 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
Slide 3: U.S. Bancorp Overview and Financial Performance
U.S. Bancorp Overview and Financial Performance Initiatives and Business Line Highlights Customer Service Corporate Payments Corporate Trust Fund Services Mortgage Banking Current Environment Fly High. Go Far.
Slide 4: U.S. Bancorp Businesses
U.S. Bancorp Businesses International Payments Regional Consumer & Business Banking & Wealth Management National Wholesale Banking & Trust Services 4Q09 Dimensions Asset Size $281 billion Deposits $183 billion Loans $195 billion Customers 15.8 million NYSE Traded USB Market Capitalization* $48 billi
Slide 5: Performance vs Peers
Performance vs Peers Source: SNL, 1Q08 through 4Q09 Peer Banks: BAC, BBT, FITB, JPM, KEY, PNC, RF, STI, USB and WFC Since 1/1/08 USB Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 ROA 0.0102 0.0082 0.0082 0.0079 0.0045 0.0024 USB Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer
Slide 6: Diversification
Consumer Wholesale PCTAM Payments Treas & Corp Support Revenue 44 20 10 26 0 Diversification Full year 2009, taxable-equivalent basis Excluding securities gains (losses) net 2004 2005 2006 2007 2008 2009 Fee Income 0.445 0.469 0.505 0.518 0.498 0.491 Core 0 0 0 0 0 0 Revenue Mix By Business Line Fee
Slide 7: Revenue Growth
Revenue Growth 4Q08 1Q09 2Q09 3Q09 4Q09 Reported 3624 3883 4159 4250 4376 Core 3839 3989 4178 4287 4534 2005 2006 2007 2008 2009 Reported 13239 13742 14060 14677 16668 $ in millions Taxable-equivalent basis Prior 5 Quarters Year-Over-Year Core Growth 4.4% 8.0% 8.2% 12.0% 18.1% Prior 5 Years Year-Ove
Slide 8: Loan and Deposit Growth
Loan and Deposit Growth 4Q08 1Q09 2Q09 3Q09 4Q09 Loans 177.2 185.7 183.9 182 191.6 Deposits 144.5 160.5 163.2 166.4 180.9 2005 2006 2007 2008 2009 Loans 136.5 143.6 153.8 185.2 195.4 Deposits 124.7 124.9 131.4 159.4 183.2 $ in billions 8.2% $191.6 17.0% $177.2 19.6% $185.7 12.8% $183.9 9.3% $182.0 2
Slide 9: Capital Position
Capital Position $ in billions
Slide 10: Credit Quality
3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 NPA $ Change 76 49 155 290 357 489 727 626 386 184 NPA % Change 0.13 0.08 0.22 0.34 0.31 0.33 0.37 0.23 0.12 0.05 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 NCO $ Change 8 26 68 103 102 134 156 141 112 69 NCO % Change 0.041884817 0.130653266 0
Slide 11: Credit Quality - Reserves
Credit Quality - Reserves 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 Allowance 2260 2243 2448 2648 3004 3575 4105 4571 4986 Provision Exceeding NCO's 0 192 200 250 635 530 466 415 278 Provision/NCO's 1 1.66 1.51 1.5 2 1.67 1.5 1.4 1.25 Allowance for Credit Losses Allowance Provision Exceeding NCO'
Slide 12: Credit Quality - Provision Expense
Credit Quality - Provision Expense Net Charge-offs and Provision $ in millions 4Q08 1Q09 2Q09 3Q09 4Q09 Net Charge-offs 632 788 929 1041 1110 Reserve Build 1267 1318 1395 1456 1388 100% 67% 50% 40% 25% Net Charge-offs Provision Exceeding NCO's
Slide 13: Credit Quality - Total Loans
Credit Quality - Total Loans 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 177.2 185.7 183.9 182 191.6 Net Charge-offs Ratio 0.0142 0.0172 0.0203 0.0227 0.023 Average Loans and Net Charge-offs Ratios 4Q08 3Q09 4Q09 Allowance for credit losses as % of: Period-end loans 2.09% 2.88% 3.04% Nonperforming loans
Slide 14: Flight to Quality ...it's happening here
Flight to Quality ...it's happening here U.S. Bancorp Overview and Financial Performance Initiatives and Business Line Highlights Customer Service Corporate Payments Corporate Trust Fund Services Mortgage Banking Current Environment
Slide 15: Customer Service - Goal to be #1
Customer Service - Goal to be #1 Source: U.S. Bank Branch Loyalty Study Market Probe Top Box Scores 4Q09 (3 month average Oct/Nov/Dec) Consumer Bank Loyalty Monthly survey, measuring loyalty at branch level Improved to a record 73.5% loyalty in 4Q09 - 9 or 10 rating Focus on improving problem resolu
Slide 16: Customer Service - Goal to be #1 (ACSI)
USB WFC C JPM BAC Score 77 73 68 68 67 In 4Q 2009, U.S. Bank engaged ACSI in the same measurement system used in their independent survey of Retail Banks U.S. Bank scored 77 in overall ACSI customer satisfaction The next highest reported score was 73 Industry average overall customer satisfaction sc
Slide 17: Business Line Highlights
Business Line Highlights Consumer Wholesale PCTAM Payments Revenue 44 20 10 26 Payment Services Retail Payment Solutions Corporate Payment Systems Global Merchant Acquiring Wealth Management Wealth Management Corporate Trust FAF Advisors Fund Services Institutional Trust & Custody Consumer Wealth Mg
Slide 18: Corporate Payment Systems
Corporate Payment Systems Issues commercial, purchasing and fleet cards to corporations and government entities Operates three closed-loop networks Relationships with 265 of the Fortune 500 Significant provider of payment services to the U.S. Government
Slide 19: Corporate Payment Systems - CAGR + 11.2%
Corporate Payment Systems 04 - 09 CAGR + 11.2% Corporate Card Sales Volume ($ in billions) 2004 2005 2006 2007 2008 2009 USB 23 27.8 30.8 34.9 39.4 39 Corp card Purchasing Card Power Track Fleet Income 13 63 11 13 Noninterest Income (Full Year 2009) Corporate Cards 13% Purchasing Cards 63% Fleet Car
Slide 20: Corporate Trust
20 Corporate Trust National Business with Local Presence Key Statistics 47 Offices 112,000+ Issuances 604,000+ Bondholders $2.9 Trillion AUA
Slide 21: Corporate Trust Revenue
Corporate Trust 1 2 4 5 Revenue 65 26 5 4 Trustee Paying Agent Escrow Agent Document Custody Top 2 municipal finance trustee Top 3 ABS/MBS trustee First Citizens Bank (Municipal Trust) 3Q 2009 AmeriServ (Corporate Trust) 2Q 2009 LaSalle (Municipal Trust) 4Q 2006 SunTrust (Corporate & Municipal Trust
Slide 22: Fund Services
Fund Services U.S. Bancorp Fund Services, LLC Market focus - investment management firms Complete, integrated services across all investment manager products Market distinction Tenured personnel, specialized expertise Integrated customer experience for all investment manager products 41 year history
Slide 23: Mortgage Banking
Mortgage Banking $ in billions 2002 2003 2004 2005 2006 2007 2008 2009 Mtg 43.1 54 63.2 69 82.9 97 120.3 150.8 2002 2003 2004 2005 2006 2007 2008 2009 Mtg 23.1 29.9 17.4 23.1 22.3 27.2 34.1 55.6 Mortgage Production Volume Mortgages Serviced for Others National originator (6th largest) of 1-4 family
Slide 24: Mortgage Banking - 2009 Production
Mortgage Banking - 2009 Production Govt 30yr 15yr Port ARM Saleable ARM Mix 24 63 9 3 1 <75% 75-80% 80-85% 85-90% 90-95% >95% LTV 60 30 2 5 3 1 Freddie Mac Fannie Mae GNMA Portfolio Mix 68 4 25 3 740 700 660 620 620 FICO 82 13 4 1 1 Product Mix Sales/Portfolio Mix LTV Distribution FICO Distribution
Slide 25: Yes, the future looks brighter with us.
Yes, the future looks brighter with us. U.S. Bancorp Overview and Financial Performance Initiatives and Business Line Highlights Customer Service Corporate Payments Corporate Trust Fund Services Mortgage Banking Current Environment
Slide 26: Current Environment
Current Environment Challenges Credit Quality Regulatory / Legislative oversight actions Card Act (2010 ^ $80 - $100 million) Overdraft Legislation (2010 ^ $200 - $300 million) Financial Crisis Responsibility Fee (FY ^ $125 - $150 million) Future capital, liquidity and reserve requirements Opportuni
Slide 27: Leveraged to Economic Recovery
Leveraged to Economic Recovery Consumer Wholesale PCTAM Payments Revenue 44 20 10 26 Consumer Wealth Mgmt Wholesale Payments Payment Services Retail Payment Solutions Corporate Payment Systems Global Merchant Acquiring Wealth Management Wealth Management Corporate Trust FAF Advisors Fund Services In
Slide 28: U.S. Bancorp
ee U.S. Bancorp LJ All of {5 serving you" (Sbancorp.
Slide 29: Citi 2010 Financial Services Conference
Richard K. Davis Chairman, President and CEO March 10, 2010 Citi 2010 Financial Services Conference
Slide 30: Appendix
Appendix (USbancorp.
Slide 31: Credit Quality - Commercial Loans
Credit Quality - Commercial Loans 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 50328 49362 47362 44655 43490 Net Charge-offs Ratio 0.0085 0.0092 0.015 0.0178 0.0228 Average Loans and Net Charge-offs Ratios Key Statistics Comments Corporate loan demand remained weak as evidenced by the declining utilizatio
Slide 32: Credit Quality - Commercial Leases
Credit Quality - Commercial Leases 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 6608 6772 6697 6567 6489 Net Charge-offs Ratio 0.0187 0.0329 0.0329 0.0266 0.0202 Average Loans and Net Charge-offs Ratios Key Statistics Comments Delinquency levels and net charge-offs have declined due to improvement in the
Slide 33: Credit Quality - CRE Mortgages
Credit Quality - CRE Mortgages 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 22967 23553 23875 24296 24895 Net Charge-offs Ratio 0.0024 0.0022 0.0047 0.0049 0.0048 Average Loans and Net Charge-offs Ratios Key Statistics Comments Average loans increased 2.5% on a linked quarter basis and increased 8.4% over
Slide 34: Credit Quality - CRE Construction
Credit Quality - CRE Construction 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 9691 9845 9852 9533 9149 Net Charge-offs Ratio 0.0259 0.0482 0.0379 0.0662 0.0624 Average Loans and Net Charge-offs Ratios Key Statistics Comments Residential construction has declined from $4.7 billion in 3Q07 to $2.3 billion
Slide 35: Credit Quality - Residential Mortgage
4Q08 1Q09 2Q09 3Q09 4Q09 Restructured 813 1129 1289 1338 1354 Credit Quality - Residential Mortgage 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 23430 23915 23964 24405 25621 Net Charge-offs Ratio 0.0143 0.0154 0.0194 0.021 0.0237 Average Loans and Net Charge-offs Ratios Key Statistics Comments Continue t
Slide 36: Credit Quality - Home Equity
Credit Quality - Home Equity 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 18691 19215 19314 19368 19444 Net Charge-offs Ratio 0.0111 0.0148 0.0172 0.0182 0.0196 Average Loans and Net Charge-offs Ratios Key Statistics Comments Demand is weak for home equity products High quality traditional portfolio (bran
Slide 37: Credit Quality - Credit Card
4Q08 3Q09 4Q09 Average Loans 12,976 15,387 16,399 30-89 Delinquencies 2.73% 2.58% 2.38% 90+ Delinquencies 2.20% 2.41% 2.59% Nonperforming 0.50% 0.77% 0.84% Credit Quality - Credit Card 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 12976 13597 14329 15387 16399 Net Charge-offs Ratio 0.0518 0.0632 0.0736 0.0
Slide 38: Credit Quality - Retail Leasing
Credit Quality - Retail Leasing 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 5062 5115 5031 4822 4620 Net Charge-offs Ratio 0.0086 0.0103 0.008 0.0066 0.0043 Average Loans and Net Charge-offs Ratios Key Statistics Comments 30+ delinquency rates continue to improve Improvement in used car prices has signif
Slide 39: Credit Quality - Other Retail
Credit Quality - Other Retail 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 22247 22987 22753 22647 23037 Net Charge-offs Ratio 0.017 0.0175 0.018 0.0194 0.0191 Average Loans and Net Charge-offs Ratios Key Statistics Comments Average loans have grown 1.7% linked quarter basis and 3.6% over 4Q08 on strong g
Slide 40: Non-Regulatory Capital Ratios
Non-Regulatory Capital Ratios $ in millions
Slide 41: Citi 2010 Financial Services Conference
Richard K. Davis Chairman, President and CEO March 10, 2010 Citi 2010 Financial Services Conference
US Bancorp \de\ — Citi 2010 Financial Services Conference on 6ix