U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q3 2017 Earnings Presentation
26 slides from U.s. Bancorp's earnings presentation, Oct 18, 2017
Slide 1: U.S. Bancorp 3Q17 Earnings Conference Call
U.S. Bancorp 3Q17 Earnings Conference Call October 18, 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: 3Q17 Highlights
3Q17 Highlights Income Statement change vs. Credit Quality change vs. $ in millions, except EPS 3Q17 2Q17 3Q16 $ in millions 3Q17 2Q17 3Q16 Net interest income* $3,186 3.8 % 8.3 % Nonperforming assets $1,251 (7.3) % (24.8) % Noninterest income 2,422 0.1 (0.9) NPA ratio 0.45% (4bps) (16bps) Reported
Slide 4: Performance Ratios
Performance Ratios Return on Return on Efficiency Ratio* & Average Common Equity Average Assets Net Interest Margin** 13.5% 13.4% 13.6% 1.36% 1.35% 1.38% 54.5% 55.2% 54.3% 3.04% 3.10% 2.98% 3Q16 2Q17 3Q17 3Q16 2Q17 3Q17 3Q16 2Q17 3Q17 * Non-GAAP; see slide 25 for calculation ** Taxable-equivalent ba
Slide 5: Average Loans
Average Loans Average Change vs. $275.5 $277.6 (Three months ended 9/30/17) Balances 2Q17 3Q16 $269.6 Commercial $96.6 1.0 % 4.6 % Residential Mortgage 59.0 0.8 4.9 Retail 56.1 2.6 6.1 Commercial Real Estate 41.6 (2.2) (4.0) Credit Card 20.9 1.4 1.4 Covered 3.4 (5.4) (19.0) Total loans $277.6 0.8 %
Slide 6: Average Deposits
Average Deposits Interest-bearing Deposits $331.2 $335.2 $318.5 Average Change vs. Change (Three months ended 9/30/17) Balances 2Q17 3Q16 Rates vs. 2Q17 Money market savings $105.1 (1.6) % 5.2 % 0.67 % 0.09 % Interest checking 68.1 1.2 7.3 0.15 0.05 Savings accounts 43.6 0.3 7.3 0.07 0.00 Time depos
Slide 7: Credit Quality
Credit Quality Net Charge-offs Nonperforming Assets $1,664 $340 $330 $315 $1,349 NCO Ratio $1,251 NPAs -2bps QoQ 0.61% -7.3% QoQ 0.46% 0.49% 0.47% 0.49% 0.45% +1bp YoY -24.8% YoY 3Q16 2Q17 3Q17 3Q16 2Q17 3Q17 NPAs NPAs/Period-end Loans plus OREO NCOs NCOs/Avg Loans Provision for Credit Losses $10 $1
Slide 8: Earnings Summary
Earnings Summary $ and shares in millions, except EPS Reported % Change 3Q17 2Q17 3Q16 vs. 2Q17 vs. 3Q16 Net Interest Income $3,135 $3,017 $2,893 3.9 8.4 Taxable-equivalent Adjustment 51 51 50 - 2.0 Net Interest Income (taxable-equivalent basis) 3,186 3,068 2,943 3.8 8.3 Noninterest Income 2,422 2,4
Slide 9: Net Interest Income
Net Interest Income $3,186 $3,068 $2,943 Linked Quarter • Net interest income growth was driven by loan growth, the impact of rising rates, higher interest recoveries and an additional day in the third quarter • Net interest margin growth was driven by higher interest rates and a change in loan port
Slide 10: Noninterest Income
Noninterest Income $2,445 $2,419 $2,422 Linked Quarter $314 $212 $213 • Solid growth in corporate payment products and deposit service charges revenue $362 $380 $380 reflected typical seasonal patterns $434 $437 • Growth in commercial products revenue was $426 driven primarily by higher foreign exch
Slide 11: Noninterest Expense
Noninterest Expense $3,023 $3,039 Linked Quarter $2,931 $242 $246 $243 • Growth in noninterest expense was driven $255 $258 $250 by higher compensation expense, principally $295 $278 $309 due to corporate incentive plans and the $528 $536 impact of hiring to support growth $520 Year-over-Year • Grow
Slide 12: Capital Position
Capital Position $ in billions 3Q17 2Q17 1Q17 4Q16 3Q16 Total U.S. Bancorp shareholders' equity $48.7 $48.3 $47.8 $47.3 $47.8 Standardized Approach Basel III transitional standardized approach Common equity tier 1 capital ratio 9.6% 9.5% 9.5% 9.4% 9.5% Tier 1 capital ratio 11.1% 11.1% 11.0% 11.0% 11
Slide 13: Appendix
Appendix U.S. BANCORP | 13
Slide 14: Average Loans
Average Loans Average Loans ($bn) Key Points Year-over-Year Growth vs. 3Q16 • Average total loans increased by $8.0 billion, or 3.0% 7.6% 6.2% 4.1% 3.4% 3.0% • Average commercial loans increased by $4.3 billion, or $275.5 $277.6 4.6% $269.6 $272.7 $273.2 • Average retail loans increased by $3.2 bill
Slide 15: Average Deposits
Average Deposits Average Deposits ($bn) Key Points Year-over-Year Growth vs. 3Q16 10.0% 11.8% 11.0% 7.7% 5.2% • Average total deposits increased by $16.6 billion, or 5.2% $329.2 $328.4 $331.2 $335.2 $318.5 • Average low-cost deposits (NIB, interest (0.1%) checking, money market and savings) 1.2% 2.8
Slide 16: Credit Quality – Commercial Loans
Credit Quality – Commercial Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 3Q16 2Q17 3Q17 Average Loans $92,369 $95,638 $96,633 30-89 Delinquencies 0.24% 0.27% 0.22% $93,807 $93,739 $95,638 $96,633 $92,369 90+ Delinquencies 0.05% 0.05% 0.05% Nonperforming Loans 0.55% 0.33% 0.
Slide 17: Credit Quality – Commercial Real Estate
Credit Quality – Commercial Real Estate Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 3Q16 2Q17 3Q17 Average Loans $43,374 $42,549 $41,621 30-89 Delinquencies 0.08% 0.08% 0.15% $43,374 $43,391 $43,158 $42,549 $41,621 90+ Delinquencies 0.02% 0.00% 0.01% Nonperforming Loans 0.24% 0.
Slide 18: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 3Q16 2Q17 3Q17 Average Loans $56,284 $58,544 $59,030 30-89 Delinquencies 0.26% 0.22% 0.26% $56,718 $57,900 $58,544 $59,030 90+ Delinquencies 0.28% 0.20% 0.18% $56,284 Nonperforming Loans 1.09% 0.90
Slide 19: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 3Q16 2Q17 3Q17 Average Loans $20,628 $20,631 $20,926 30-89 Delinquencies 1.27% 1.22% 1.42% $20,628 $20,942 $20,845 $20,631 $20,926 90+ Delinquencies 1.11% 1.10% 1.20% Nonperforming Loans 0.02% 0.00% 0.00% C
Slide 20: Credit Quality – Home Equity
Credit Quality – Home Equity Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 3Q16 2Q17 3Q17 Average Loans $16,470 $16,252 $16,299 30-89 Delinquencies 0.41% 0.33% 0.38% $16,470 $16,444 $16,259 $16,252 $16,299 90+ Delinquencies 0.24% 0.25% 0.24% Nonperforming Loans 0.75% 0.74% 0.75% H
Slide 21: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 3Q16 2Q17 3Q17 $7,762 Average Loans $5,773 $7,181 $7,762 $7,181 30-89 Delinquencies 0.21% 0.22% 0.31% $6,469 $6,191 90+ Delinquencies 0.00% 0.01% 0.03% $5,773 Nonperforming Loans 0.05% 0.07% 0.09% 140 Ma
Slide 22: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 3Q16 2Q17 3Q17 Average Loans $30,608 $31,194 $32,008 30-89 Delinquencies 0.56% 0.65% 0.75% $31,245 $31,056 $31,194 $32,008 $30,608 90+ Delinquencies 0.11% 0.11% 0.13% Nonperforming Loans 0.08% 0.10% 0.10%
Slide 23: Credit Quality – Auto Loans
Credit Quality – Auto Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 3Q16 2Q17 3Q17 Average Loans $17,205 $17,533 $18,008 30-89 Delinquencies 0.59% 0.73% 0.89% $17,624 $17,538 $17,533 $18,008 90+ Delinquencies 0.05% 0.06% 0.08% $17,205 Nonperforming Loans 0.08% 0.12% 0.11% In
Slide 24: Non-GAAP Financial Measures
Non-GAAP Financial Measures September 30, June 30, March 31, December 31, September 30, (Dollars in Millions, Unaudited) 2017 2017 2017 2016 2016 Total equity $49,351 $48,949 $48,433 $47,933 $48,399 Preferred stock (5,419) (5,419) (5,419) (5,501) (5,501) Noncontrolling interests (628) (629) (635) (6
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures (Dollars in Millions, Unaudited) Three Months Ended September 30, June 30, March 31, December 31, September 30, 2017 2017 2017 2016 2016 Net interest income $3,135 $3,017 $2,945 $2,955 $2,893 Taxable-equivalent adjustment (1) 51 51 50 49 50 Net interest income, on a taxab
Slide 26: U.S. Bancorp 3Q17 Earnings Conference Call
U.S. Bancorp 3Q17 Earnings Conference Call October 18, 2017 U.S. BANCORP