28 slides from U.s. Bancorp's earnings presentation, Apr 19, 2017
Slide 1: U.S. Bancorp 1Q17 Earnings Conference Call
U.S. Bancorp 1Q17 Earnings Conference Call April 19, 2017 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: Today’s presentation contains forward-looking statements about U.S. Bancorp. Statements that are not historical or current facts, including
Slide 3: 1Q17 Highlights
1Q17 Highlights Income Statement change vs. Credit Quality change vs. $ in millions, except EPS 1Q17 4Q16 1Q16 $ in millions 1Q17 4Q16 1Q16 Net interest income* $2,995 (0.3) % 3.7 % Nonperforming assets $1,495 (6.7) % (13.0) % Noninterest income 2,329 (4.2) 8.4 NPA ratio 0.55% (4bps) (10bps) Reporte
Slide 4: Performance Ratios
Performance Ratios Return on Return on Efficiency Ratio* & Average Common Equity Average Assets Net Interest Margin** 13.0% 13.1% 13.3% 1.35% 55.3% 1.32% 1.32% 54.6% 55.6% 3.06% 3.03% 2.98% 1Q16 4Q16 1Q17 1Q16 4Q16 1Q17 1Q16 4Q16 1Q17 * Non-GAAP, see slide 27 for calculation ** Taxable equivalent ba
Slide 5: Average Loans
Average Loans Average Change vs. $272.7 $273.2 (Three months ended 3/31/17) Balances 4Q16 1Q16 $262.3 Retail $53.8 (0.2) % 5.3 % Credit Card 20.9 (0.5) 3.0 Residential Mortgage 57.9 2.1 6.8 Commercial Real Estate 43.2 (0.5) 1.8 Commercial 93.7 (0.1) 4.4 Covered 3.7 (5.1) (17.3) Total loans $273.2 0.
Slide 6: Average Deposits
Average Deposits $329.2 $328.4 Interest-bearing Deposits $295.9 Average Change vs. Change (Three months ended 3/31/17) Balances 4Q16 1Q16 Rates vs. 4Q16 Interest checking $65.7 1.6 % 13.4 % 0.08 % 0.00 % Money market savings 108.8 2.0 25.8 0.48 0.10 Savings accounts 42.6 3.1 7.6 0.08 0.00 Time depos
Slide 7: Credit Quality
Credit Quality Net Charge-offs Nonperforming Assets $335 $1,719 $315 $322 $1,603 $1,495 NCO Ratio NPAs +3bps QoQ 0.65% 0.59% 0.55% -6.7% QoQ 0.48% 0.47% 0.50% +2bps YoY -13.0% YoY 1Q16 4Q16 1Q17 1Q16 4Q16 1Q17 NCOs NCOs/Avg Loans NPAs NPAs/Period-end Loans plus OREO Provision for Credit Losses $15 $
Slide 8: Credit Quality
Credit Quality Auto Loans $16.6 $17.6 $17.5 Auto 1Q16 4Q16 1Q17 Average Loans $16.6 $17.6 $17.5 0.41% 0.43% 0.46% 30-89 Delinquencies 0.39% 0.74% 0.64% 90+ Delinquencies 0.02% 0.06% 0.05% Nonperforming Loans 0.07% 0.09% 0.09% 1Q16 4Q16 1Q17 Average Loans Net Charge-offs Ratio Retail Industry Direct
Slide 9: Earnings Summary
Earnings Summary $ and shares in millions, except per-share data Reported % Change 1Q17 4Q16 1Q16 vs. 4Q16 vs. 1Q16 Net Interest Income $2,945 $2,955 $2,835 (0.3) 3.9 Taxable-equivalent Adjustment 50 49 53 2.0 (5.7) Net Interest Income (taxable-equivalent basis) 2,995 3,004 2,888 (0.3) 3.7 Nonintere
Slide 10: Revenue
Revenue $5,435 $5,324 $5,037 1Q17 Revenue 44% 56% Net Interest Income Noninterest Income Linked Quarter 1Q16 4Q16 1Q17 • Decline reflected typical seasonal patterns in certain fee businesses Net Interest Income Noninterest Income Year-over-Year -2.0% linked quarter • Growth primarily driven by solid
Slide 11: Net Interest Income
Net Interest Income $3,004 $2,995 $2,888 Linked Quarter • Net interest income was stable despite two fewer days • The 5bp increase in net interest margin reflected the impact of higher interest rates 3.06 % 2.98 % 3.03 % Year-over-Year • Net interest income growth driven by strong earning asset grow
Slide 12: Noninterest Income
Noninterest Income $2,431 $2,329 Linked Quarter $2,149 • Typical seasonal factors impacted $891 growth in deposit service charges, $849 $809 payments and mortgage • Decrease in mortgage revenue (14%) $368 $368 reflected both seasonal patterns and $339 lower refinancing activity $420 $415 $390 $240 Y
Slide 13: Noninterest Expense
Noninterest Expense $3,004 $2,944 $2,749 Linked Quarter • Decrease in noninterest expense (2%) $1,618 reflected typical seasonal patterns $1,705 $1,549 Year-over-Year $247 • Total noninterest expense up 7.1% on $248 $247 higher compensation and benefit costs, $338 $254 $267 marketing and other expen
Slide 14: Capital Position
Capital Position $ in billions 1Q17 4Q16 3Q16 2Q16 1Q16 Total U.S. Bancorp shareholders' equity $47.8 $47.3 $47.8 $47.4 $46.8 Standardized Approach Basel III transitional standardized approach Common equity tier 1 capital ratio 9.5% 9.4% 9.5% 9.5% 9.5% Tier 1 capital ratio 11.0% 11.0% 11.1% 11.1% 11
Slide 15: Appendix
Appendix U.S. BANCORP | 15
Slide 16: Average Loans
Average Loans Average Loans ($bn) Key Points Year-over-Year Growth vs. 1Q16 5.8% 8.1% 7.6% 6.2% 4.1% • Average total loans increased by $10.9 billion, or 4.1% $266.6 $269.6 $272.7 $273.2 $262.3 • Average total commercial loans increased by 5.2%** 5.5% 5.3% $3.9 billion, or 4.4% 3.6% 4.1%** 5.2%* 5.8
Slide 17: Average Deposits
Average Deposits Average Deposits ($bn) Key Points Year-over-Year Growth vs. 1Q16 6.3% 7.6% 10.0% 11.8% 11.0% • Average total deposits increased by $32.6 billion, or 11.0% $318.5 $329.2 $328.4 $307.4 • Average low-cost deposits (NIB, interest $295.9 checking, money market and savings) 1.2% 2.8% 2.4%
Slide 18: Credit Quality – Commercial Loans
Credit Quality – Commercial Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 1Q16 4Q16 1Q17 Average Loans $89,820 $93,807 $93,739 30-89 Delinquencies 0.21% 0.28% 0.23% $92,154 $92,369 $93,807 $93,739 $89,820 90+ Delinquencies 0.05% 0.06% 0.06% Nonperforming Loans 0.52% 0.52% 0.
Slide 19: Credit Quality – Commercial Real Estate
Credit Quality – Commercial Real Estate Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 1Q16 4Q16 1Q17 Average Loans $42,401 $43,391 $43,158 30-89 Delinquencies 0.19% 0.10% 0.15% $42,401 $42,988 $43,374 $43,391 $43,158 90+ Delinquencies 0.04% 0.02% 0.01% Nonperforming Loans 0.24% 0.
Slide 20: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 1Q16 4Q16 1Q17 Average Loans $54,208 $56,718 $57,900 30-89 Delinquencies 0.24% 0.26% 0.21% $56,284 $56,718 $57,900 90+ Delinquencies 0.31% 0.27% 0.24% $54,208 $55,501 Nonperforming Loans 1.23% 1.04
Slide 21: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 1Q16 4Q16 1Q17 Average Loans $20,244 $20,942 $20,845 30-89 Delinquencies 1.09% 1.31% 1.24% $20,244 $20,140 $20,628 $20,942 $20,845 90+ Delinquencies 1.10% 1.16% 1.23% Nonperforming Loans 0.04% 0.01% 0.01% C
Slide 22: Credit Quality – Home Equity
Credit Quality – Home Equity Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 1Q16 4Q16 1Q17 Average Loans $16,368 $16,444 $16,259 30-89 Delinquencies 0.39% 0.37% 0.33% $16,368 $16,394 $16,470 $16,444 $16,259 90+ Delinquencies 0.26% 0.25% 0.24% Nonperforming Loans 0.80% 0.78% 0.79% H
Slide 23: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 1Q16 4Q16 1Q17 Average Loans $5,179 $6,191 $6,469 30-89 Delinquencies 0.17% 0.28% 0.24% $6,469 $6,191 90+ Delinquencies 0.02% 0.02% 0.01% $5,773 $5,179 $5,326 Nonperforming Loans 0.04% 0.03% 0.04% 140 Ma
Slide 24: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 1Q16 4Q16 1Q17 Average Loans $29,550 $31,245 $31,056 30-89 Delinquencies 0.42% 0.66% 0.56% $30,608 $31,245 $31,056 90+ Delinquencies 0.10% 0.13% 0.12% $29,550 $29,748 Nonperforming Loans 0.08% 0.09% 0.09%
Slide 25: Credit Quality – Auto Loans
Credit Quality – Auto Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 1Q16 4Q16 1Q17 Average Loans $16,623 $17,624 $17,538 30-89 Delinquencies 0.39% 0.74% 0.64% $17,205 $17,624 $17,538 90+ Delinquencies 0.02% 0.06% 0.05% $16,623 $16,690 Nonperforming Loans 0.07% 0.09% 0.09% In
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures March 31, December 31, September 30, June 30, March 31, (Dollars in Millions, Unaudited) 2017 2016 2016 2016 2016 Total equity $48,433 $47,933 $48,399 $48,029 $47,393 Preferred stock (5,419) (5,501) (5,501) (5,501) (5,501) Noncontrolling interests (635) (635) (640) (639)
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures (Dollars in Millions, Unaudited) Three Months Ended March 31, December 31, September 30, June 30, March 31, 2017 2016 2016 2016 2016 Net interest income $2,945 $2,955 $2,893 $2,845 $2,835 Taxable-equivalent adjustment (1) 50 49 50 51 53 Net interest income, on a taxable-e
Slide 28: U.S. Bancorp 1Q17 Earnings Conference Call
U.S. Bancorp 1Q17 Earnings Conference Call April 19, 2017 U.S. BANCORP