U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q4 2019 Earnings Presentation
30 slides from U.s. Bancorp's earnings presentation, Jan 15, 2020
Slide 1: U.S. Bancorp 4Q19 Earnings Conference Call
U.S. Bancorp 4Q19 Earnings Conference Call January 15, 2020 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: 4Q19 Highlights
4Q19 Highlights * Taxable-equivalent basis; see slide 26 for calculation U.S. BANCORP | 3
Slide 4: Digital Engagement Trends
Digital Engagement Trends Transactions (% of Total) 80% 70% 64% 66% Digital Active Customers 60% (% of Total Active Customers)* 40% 36% 34% 80% 30% 73% 71% 69% 20% 0% 60% Three months ended 53% 52% 52% 51% 11/30/17 11/30/18 11/30/19 47% Total Digital Branch, ATM, Phone and IVR 42% 40% Loan Sales (%
Slide 5: Performance Ratios
Performance Ratios Return on Return on Return on Efficiency Ratio** & Average Assets Average Common Equity Tangible Common Equity** Net Interest Margin*** 1.59% 1.57% 15.8% 20.2% 15.3% 19.4% 60.3% 1.44%* 14.1%* 18.1%* 1.55%* 15.4%* 19.7%* 56.3% 53.3% 54.0%* 55.4%* 1.21% 15.2% 11.8% 3.15% 3.02% 2.92%
Slide 6: Average Loans
Average Loans $292.4 $294.9 $283.7 • On a linked quarter basis, average total loan growth was driven by growth in residential mortgages, total commercial real estate loans, and 4Q18 3Q19 4Q19 credit card loans. • On a year-over-year basis, growth in average total loans was primarily driven by growth
Slide 7: Average Deposits
Average Deposits Interest-bearing Deposits $334.4 $349.9 $356.5 • Average noninterest-bearing (NIB) deposits decreased on a linked quarter basis. On a year-over-year basis, average NIB deposits decreased primarily due to the migration of balances to interest-bearing deposits and the continued deploy
Slide 8: Credit Quality
Credit Quality Net Charge-offs Nonperforming Assets $989 $979 $385 NCO Ratio NPAs $353 $352 $829 +4 bps QoQ -0.05% QoQ 0.49% 0.48% 0.52% +3 bps YoY 0.34% 0.33% -0.06% YoY 0.28% 4Q18 3Q19 4Q19 4Q18 3Q19 4Q19 NCOs NCOs/Avg Loans NPAs NPAs/Period-end Loans plus OREO Provision for Credit Losses $10 $10
Slide 9: Earnings Summary
Earnings Summary U.S. BANCORP | 9
Slide 10: Notable Items
Notable Items U.S. BANCORP | 10
Slide 11: Net Interest Income
Net Interest Income $3,331 $3,306 Linked Quarter $3,231 • Net interest income decreased, primarily driven by declining short-term interest rates, higher premium amortization in the investment securities portfolio, and the mix of earning assets. • The net interest margin declined, primarily due to co
Slide 12: Noninterest Income
Noninterest Income Linked Quarter $2,614 • Payment services revenue declined slightly, driven by lower $2,498 $2,436 $272 corporate payment products revenue due to seasonally lower sales $171 $244 volumes, partially offset by higher credit and debit card revenue due $409 $421 to seasonally higher sa
Slide 13: Noninterest Expense
Noninterest Expense $3,401 $3,280 Linked Quarter $3,144 $291 $254 $266 $277 $286 • Employee benefits expense decreased, driven by seasonally $279 $327 $328 lower payroll taxes. $297 $556 $372 $585 • Technology and communications expense increased, driven by capital expenditures to support business g
Slide 14: Capital Position
Capital Position * Non-GAAP; see slide 28 for calculations U.S. BANCORP | 14
Slide 15: Appendix
Appendix U.S. BANCORP | 15
Slide 16: Average Loans
Average Loans Average Loans ($bn) Key Points Year-over-Year Growth vs. 4Q18 • Average total loans increased by $11.2 billion, or 3.9% 1.4% 2.4% 3.8% 4.0% 3.9% • Average residential mortgage loans increased by $5.4 billion, or 8.4% $286.1 $289.2 $292.4 $294.9 • Average commercial loans increased by $
Slide 17: Average Deposits
Average Deposits Average Deposits ($bn) Key Points Year-over-Year Growth vs. 4Q18 (1.4%) 0.2% 3.1% 6.0% 6.6% • Average total deposits increased by $356.5 $22.1 billion, or 6.6% $345.2 $349.9 $334.4 $335.4 • Average low-cost deposits (NIB, interest (3.4%) (3.7%) (6.2%) (7.6%) (7.5%) checking, savings
Slide 18: Credit Quality – Commercial
Credit Quality – Commercial Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 4Q18 3Q19 4Q19 Average Loans $100,515 $103,660 $103,911 1.5% 1.4% 1.2% 0.4% 0.2% 30-89 Delinquencies 0.31% 0.43% 0.30% $100,515 $101,960 $103,233 $103,660 $103,911 90+ Delinquencies 0.0
Slide 19: Credit Quality – Commercial Real Estate
Credit Quality – Commercial Real Estate Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 4Q18 3Q19 4Q19 Linked Quarter Growth Average Loans $40,149 $ 38,990 $39,722 1.5% (1.7%) (0.3%) (1.0%) 1.9% 30-89 Delinquencies 0.18% 0.13% 0.09% 90+ Delinquencies 0.00% 0.01% 0.01% $40,149 $39,47
Slide 20: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 4Q18 3Q19 4Q19 Average Loans $64,476 $ 68,608 $69,909 3.9% 1.7% 1.9% 2.7% 1.9% 30-89 Delinquencies 0.27% 0.24% 0.22% $68,608 $69,909 $64,476 $65,582 $66,834 90+ Delinquencies
Slide 21: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 4Q18 3Q19 4Q19 Average Loans $22,396 $ 23,681 $24,107 2.9% 0.9% 1.0% 3.7% 1.8% 30-89 Delinquencies 1.39% 1.33% 1.30% $23,681 $24,107 $22,396 $22,597 $22,830 90+ Delinquencies 1.25% 1.1
Slide 22: Credit Quality – Home Equity
Credit Quality – Home Equity Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 4Q18 3Q19 4Q19 Average Loans $16,065 $15,601 $15,221 0.4% (0.4%) (1.0%) (1.5%) (2.4%) 30-89 Delinquencies 0.56% 0.55% 0.51% $16,065 $15,993 $15,831 90+ Delinquencies 0.35% 0.34% 0.32%
Slide 23: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 4Q18 3Q19 4Q19 Average Loans $8,489 $8,442 $8,486 1.3% 1.1% (0.5%) (1.2%) 0.5% 30-89 Delinquencies 0.43% 0.48% 0.53% 90+ Delinquencies 0.04% 0.05% 0.05% $8,489 $8,586 $8,547 $8,442
Slide 24: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 4Q18 3Q19 4Q19 Average Loans $31,587 $33,454 $33,509 0.2% 1.1% 2.1% 2.7 % 0.2% 30-89 Delinquencies 0.87% 0.78% 0.81% $32,578 $33,454 $33,509 90+ Delinquencies 0.15% 0.14% 0.13% $31,58
Slide 25: Credit Quality – Auto Loans
Credit Quality – Auto Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 4Q18 3Q19 4Q19 Average Loans $18,500 $19,426 $19,434 (0.3%) 1.8% 1.0% 2.1% 0.0% 30-89 Delinquencies 1.04% 1.04% 1.06% $18,833 $19,023 $19,426 $19,434 90+ Delinquencies 0.09% 0.11% 0.10%
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures (2), (3), (4), (5) – see slide 29 for corresponding notes U.S. BANCORP | 26
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures (1), (5) – see slide 29 for corresponding notes U.S. BANCORP | 27
Slide 28: Non-GAAP Financial Measures
Non-GAAP Financial Measures * Preliminary data. Subject to change prior to filings with applicable regulatory agencies. (1) – see slide 29 for corresponding note U.S. BANCORP | 28
Slide 29: Notes
Notes (1) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements. (2) Based on a federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes. (
Slide 30: U.S. Bancorp 4Q19 Earnings Conference Call
U.S. Bancorp 4Q19 Earnings Conference Call January 15, 2020 U.S. BANCORP