27 slides from U.s. Bancorp's earnings presentation, Jan 18, 2017
Slide 1: U.S. Bancorp 4Q16 Earnings Conference Call
U.S. Bancorp 4Q16 Earnings Conference Call Richard K. Davis Chairman and CEO Terry Dolan Vice Chairman and CFO January 18, 2017
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: 2016 Full Year Highlights
2016 Full Year Highlights • Record net income of $5.9 billion; record $3.24 per diluted common share • Industry-leading profitability measures, including ROA of 1.36%, ROCE of 13.4% and efficiency ratio of 54.9%* • Average loan growth of 6.9% vs. 2015 and average deposit growth of 8.9% vs. 2015 • Ne
Slide 4: 4Q16 Highlights
4Q16 Highlights • Net income of $1.5 billion; $0.82 per diluted common share • Average loans grew 1.1% vs. 3Q16 and 6.2% vs. 4Q15 – Loan growth of 5.6% vs. 4Q15 excluding the credit card portfolio acquisition at the end of 4Q15 • Average deposits grew 3.3% vs. 3Q16 and 11.8% vs. 4Q15 • Net interest
Slide 5: Performance Ratios
Performance Ratios Return on Average Common Equity Efficiency Ratio* and and Return on Average Assets Net Interest Margin 20% 3.0% 64% 4.0% 17% 2.5% 60% 3.4% Efficiency Ratio 3.06% 3.06% 3.02% 2.98% 2.98% ROCE 13.8% ROA 13.7% NIM 13.5% 55.3% 14% 13.0% 13.1% 2.0% 56% 54.6% 54.9% 2.8% 54.5% 53.9% 1.41
Slide 6: Loan and Deposit Growth
Loan and Deposit Growth $ in billions Year-Over-Year Growth Average Balances 11.8% 340 10.0% $329.2 7.6% $318.5 6.9% 6.3% $307.4 $295.9 6.4% * 5.6% ** 300 $294.5 6.5% * 5.2% * 7.6% 6.2% 5.8% 8.1% $272.7 $269.6 4.2% $262.3 $266.6 260 $256.7 220 180 4Q15 1Q16 2Q16 3Q16 4Q16 Loans Deposits * Adjusted f
Slide 7: Credit Quality
Credit Quality $ in millions Net Charge-offs Nonperforming Assets 520 3.00% 2,800 3.00% 390 2.25% 2,100 2.25% $315 $317 $315 $322 $1,719 $305 $1,672 $1,664 $1,603 $1,523 260 1.50% 1,400 1.50% 0.65% 0.62% 0.61% 130 0.75% 700 0.58% 0.59% 0.75% 0.47% 0.48% 0.48% 0.46% 0.47% 0 0.00% 0 0.00% 4Q15 1Q16 2Q
Slide 8: Earnings Summary
Earnings Summary $ and shares in millions, except per-share data Reported % B/(W) 4Q16 3Q16 4Q15 vs. 3Q16 vs. 4Q15 FY 2016 FY 2015 % B/(W) Net Interest Income $2,955 $2,893 $2,819 2.1 4.8 $11,528 $11,001 4.8 Taxable-equivalent Adjustment 49 50 52 (2.0) (5.8) 203 213 (4.7) Net Interest Income (taxabl
Slide 9: Revenue Growth
Revenue Growth $ in millions Year-Over-Year Change 0.8% 2.7% 8.1% 4.7% 4.3% 6,000 4.5% excluding 2Q16 notable item* 5,500 $5,448 $5,435 $5,388 $180 $5,211 $5,037 5,000 4,500 4,000 4Q15 1Q16 2Q16 3Q16 4Q16 * Notable item: 2Q16 Visa Europe sale gain $180 million U.S. BANCORP | 9
Slide 10: Net Interest Income
Net Interest Income Net Interest Income Key Points $ in millions Year-Over-Year Change vs. 4Q15 2.6% 4.9% 4.5% 4.3% 4.6% • Average earning assets grew $28.9 billion, or 7.7% 4,000 8.0% • Net interest margin lower 8 bps (2.98% vs. 3.06%) − Principally driven by lower yields on securities purchases, $
Slide 11: Noninterest Income
Noninterest Income Noninterest Income Key Points $ in millions vs. 4Q15 Year-Over-Year Change • Noninterest income increased $91 million, or 3.9% (1.3%) (0.2%) 12.3% 5.1% 3.9% − Higher credit and debit card revenue (7.5% increase) due to higher transaction volumes, including the impact of acquired p
Slide 12: Noninterest Expense
Noninterest Expense Noninterest Expense Key Points $ in millions vs. 4Q15 Year-Over-Year Change • Noninterest expense increased $195 million, or 6.9% 0.2% 3.2% 11.6% 5.6% 6.9% − Higher compensation expense (12.0% increase) principally due 3,600 6.0% to the impact of hiring to support business growth
Slide 13: Capital Position
Capital Position $ in billions 4Q16 3Q16 2Q16 1Q16 4Q15 Total U.S. Bancorp shareholders' equity $47.3 $47.8 $47.4 $46.7 $46.1 Standardized Approach Basel III transitional standardized approach Common equity tier 1 capital ratio 9.4% 9.5% 9.5% 9.5% 9.6% Tier 1 capital ratio 11.0% 11.1% 11.1% 11.1% 11
Slide 14: Appendix
Appendix U.S. BANCORP | 14
Slide 15: Average Loans
Average Loans Average Loans Key Points $ in billions Year-Over-Year Growth vs. 4Q15 4.2% 5.8% 8.1% 7.6% 6.2% • Average total loans increased by $16.0 billion, or 6.2% (5.6% growth excluding the credit card 320 portfolio acquisition) $269.6 $272.7 $262.3 $266.6 $256.7 5.2%* 5.5% • Average total comme
Slide 16: Average Deposits
Average Deposits Average Deposits Key Points $ in billions Year-Over-Year Growth vs. 4Q15 6.9% 6.3% 7.6% 10.0% 11.8% • Average total deposits increased by 360 $34.7 billion, or 11.8% $329.2 $318.5 $307.4 $294.5 $295.9 • Average low-cost deposits (NIB, interest 1.2% 270 2.4% 1.3% checking, money mark
Slide 17: Credit Quality – Commercial Loans
Credit Quality – Commercial Loans $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 120,000 2.0% 4Q15 3Q16 4Q16 Average Loans $86,803 $92,369 $93,807 $92,154 $92,369 $93,807 30-89 Delinquencies 0.36% 0.24% 0.28% $89,820 $86,803 90,000 1.5% 90+ Delinquencies 0.05% 0.05% 0.06% Nonp
Slide 18: Credit Quality – Commercial Real Estate
Credit Quality – Commercial Real Estate $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 60,000 1.5% 4Q15 3Q16 4Q16 Average Loans $42,231 $43,374 $43,391 $42,231 $42,401 $42,988 $43,374 $43,391 30-89 Delinquencies 0.21% 0.08% 0.10% 40,000 1.0% 90+ Delinquencies 0.03% 0.02% 0.02%
Slide 19: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 80,000 2.0% 4Q15 3Q16 4Q16 Average Loans $52,970 $56,284 $56,718 30-89 Delinquencies 0.32% 0.26% 0.26% 60,000 $55,501 $56,284 $56,718 1.5% $52,970 $54,208 90+ Delinquencies 0.33% 0.28% 0.27% N
Slide 20: Credit Quality – Credit Card
Credit Quality – Credit Card $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 24,000 12.0% 4Q15 3Q16 4Q16 $20,628 $20,942 Average Loans $18,838 $20,628 $20,942 $20,244 $20,140 $18,838 30-89 Delinquencies 1.15% 1.27% 1.31% 18,000 9.0% 90+ Delinquencies 1.09% 1.11% 1.16% Nonperfor
Slide 21: Credit Quality – Home Equity
Credit Quality – Home Equity $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 20,000 2.0% 4Q15 3Q16 4Q16 $16,241 $16,368 $16,394 $16,470 $16,444 Average Loans $16,241 $16,470 $16,444 15,000 1.5% 30-89 Delinquencies 0.36% 0.41% 0.37% 90+ Delinquencies 0.25% 0.24% 0.25% Nonperform
Slide 22: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 8,000 0.8% 4Q15 3Q16 4Q16 Average Loans $5,265 $5,773 $6,191 $6,191 30-89 Delinquencies 0.21% 0.21% 0.28% 6,000 $5,773 0.6% $5,265 $5,179 $5,326 90+ Delinquencies 0.02% 0.00% 0.02% Nonperforming Loa
Slide 23: Credit Quality – Other Retail
Credit Quality – Other Retail $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 40,000 2.0% 4Q15 3Q16 4Q16 Average Loans $29,556 $30,608 $31,245 $30,608 $31,245 30-89 Delinquencies 0.52% 0.56% 0.66% $29,556 $29,550 $29,748 30,000 1.5% 90+ Delinquencies 0.11% 0.11% 0.13% Nonperfor
Slide 24: Credit Quality – Auto Loans
Credit Quality – Auto Loans $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 20,000 2.0% 4Q15 3Q16 4Q16 $17,205 $17,624 Average Loans $16,551 $17,205 $17,624 $16,551 $16,623 $16,690 30-89 Delinquencies 0.51% 0.59% 0.74% 15,000 1.5% 90+ Delinquencies 0.04% 0.05% 0.06% Nonperformi
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures December 31, September 30, June 30, March 31, December 31, (Dollars in Millions, Unaudited) 2016 2016 2016 2016 2015 Total equity $47,933 $48,399 $48,029 $47,393 $46,817 Preferred stock (5,501) (5,501) (5,501) (5,501) (5,501) Noncontrolling interests (635) (640) (639) (63
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures (Dollars in Millions, Unaudited) Three Months Ended Year Ended December 31, September 30, June 30, March 31, December 31, December 31, December 31, 2016 2016 2016 2016 2015 2016 2015 Net interest income $2,955 $2,893 $2,845 $2,835 $2,819 $11,528 $11,001 Taxable-equivalent
Slide 27: U.S. Bancorp 4Q16 Earnings Conference Call
U.S. Bancorp 4Q16 Earnings Conference Call January 18, 2017