U.s. Bancorp · NYSE:USB

U.s. Bancorp — Debt Investor Presentation (May 2017)

33 slides from U.s. Bancorp's debt investor presentation, May 2017

  1. Slide 1: U.S. Bancorp Fixed Income Investor Presentation

    U.S. Bancorp Fixed Income Investor Presentation May 2017 U.S. BANCORP

  2. 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

  3. Slide 3: Agenda

    Agenda  Overview  Business Lines & Financial Management  Balance Sheet & Capital Management  Appendix U.S. BANCORP | 3

  4. Slide 4: U.S. Bancorp 1Q17 Dimensions

    U.S. Bancorp 1Q17 Dimensions NYSE Traded USB Branches 3,091 Assets $450B Founded 1863 ATMs 4,838 Deposits $337B Market Value $88B Customers 18.7M Loans $274B As of 3/31/17, except market value as of 5/10/17 U.S. BANCORP | 4

  5. Slide 5: Industry Position

    Industry Position Assets Deposits Market Value U.S. U.S. U.S. Rank Company $ Billions Rank Company $ Billions Rank Company $ Billions 1 J.P. Morgan $2,546 1 J.P. Morgan $1,423 1 J.P. Morgan $311 2 Bank of America 2,248 2 Wells Fargo 1,325 2 Wells Fargo 273 3 Wells Fargo 1,952 3 Bank of America 1,272

  6. Slide 6: U.S. Bancorp's Positioning

    U.S. Bancorp’s Positioning Optimal size Assets  Relative cost of compliance  G-SIBs  Sub-optimal efficiency and scale  TLAC/Bail-in debt requirements  Less capacity to invest  Higher capital standards  Potential trapped capital  Enhanced supplementary leverage ratio  Higher litigation risk

  7. Slide 7: U.S. Bancorp European Presence

    U.S. Bancorp European Presence European Offices Elavon Oslo Corporate Trust/Fund Services Dublin Watford Cherrywood Arklow London Frankfurt Warsaw Diegem Madrid U.S. BANCORP | 7

  8. Slide 8: Agenda

    Agenda  Overview  Business Lines & Financial Management  Balance Sheet & Capital Management  Appendix U.S. BANCORP | 8

  9. Slide 9: Revenue Diversification

    Revenue Diversification Diversification Advantages Revenue Mix  Balanced mix of fee revenue and By Business Line balance sheet businesses  High return/capital efficient businesses: • Payments • Wealth Management Payment Services 31%  Consistent, predictable, repeatable revenue sources Wealth Mgmt

  10. Slide 10: Revenue Diversification – Preferred Mix of Business

    Revenue Diversification – Preferred Mix of Business U.S. Bancorp Peer Bank Average Revenue Mix Revenue Mix Trading, Brokerage, Mortgage Service Investment Banking, Fees Charges* Equity Investments 5% Fiduciary 6% 3% Activities 6% Other Fee Income 9% Payments Fee Revenue 16% Interest Income 55% Full

  11. Slide 11: Our Business Mix and Product Delivery

    Our Business Mix and Product Delivery  Retail Payment Solutions, Global Merchant Acquiring and Corporate Payment Systems Payment Services Payment Services  Provides a full suite of payment processing services to consumers, small businesses, corporations, government and merchants – a unique positio

  12. Slide 12: Performance vs. U.S. Peers

    Performance vs. U.S. Peers 2016 1Q08 – 1Q17 Return on Average Assets Peer 9 Return on Average Common Equity Peer 9 70.3% 72.6% 67.6% 68.5% 61.2% 61.5% 62.9% 57.9% 58.6% 51.9%* Efficiency Ratio USB Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Source: Company reports and SNL; Peer ba

  13. Slide 13: Efficient Platform

    Efficient Platform Source of Competitive Advantage  Single processing platforms  Full consolidation of acquisitions  Operating scale in all significant businesses  Business line monthly review process  Ongoing efficiency efforts Source: Company reports; Peer banks: BAC, BBT, FITB, JPM, KEY, PNC

  14. Slide 14: Credit Quality

    Credit Quality Net Charge-offs Nonperforming Assets $ in millions U.S. BANCORP | 14

  15. Slide 15: Agenda

    Agenda  Overview  Business Lines & Financial Management  Balance Sheet & Capital Management  Appendix U.S. BANCORP | 15

  16. Slide 16: U.S. Bancorp Legal Entity Overview

    U.S. Bancorp Legal Entity Overview  Efficient organizational structure with minimal number of operating entities  Primary banking subsidiary holds over 98% of consolidated assets U.S. Bancorp • Holding Company • $450 Billion Consolidated Assets U.S. Bank National Association U.S. Bancorp Investmen

  17. Slide 17: Best in Class Debt Rating

    Best in Class Debt Rating USB is the highest rated bank amongst its U.S. peers across all rating agencies and is recognized by Moody’s and Fitch as the highest rated bank globally  Funding advantage  Competitive advantages include pricing, flight-to-quality and sales force confidence U.S. Peers La

  18. Slide 18: Consistent Balance Sheet Composition

    Consistent Balance Sheet Composition Assets Liabilities & Equity  Stable asset composition  Strong deposit growth predominately funds asset growth Ending balances U.S. BANCORP | 18

  19. Slide 19: Wholesale Funding Issuance History

    Wholesale Funding Issuance History  Strong deposit base results in less reliance on wholesale funding Increased issuance to support LCR / Investment Portfolio growth U.S. BANCORP | 19

  20. Slide 20: Debt Maturity Distribution

    Debt Maturity Distribution U.S. Bancorp Wholesale Funding 4.0  U.S. Bancorp issuance 3.5 3.0 1.3 principally supports dividend payments, share ($ in Billions) 2.5 2.0 1.2 buybacks, acquisitions, 1.5 2.2 2.5 1.0 and operating expenses 1.0 1.5 1.5 1.4 1.3 0.5 0.8 0.0 2017 2018 2019 2020 2021 2022 202

  21. Slide 21: Asset Sensitivity and Liquidity

    Asset Sensitivity and Liquidity Net Interest Income Sensitivity Well-Balanced Liquidity Position  Asset sensitivity  Reliable source of core deposits  Diversified sources of liquidity • Excess cash and liquid assets • Wholesale funding sources • Off-balance sheet capacity  Strong LCR Total Avail

  22. Slide 22: Investment Portfolio

    Investment Portfolio  High-quality portfolio with minimal credit risk  Majority of portfolio invested in U.S. government securities  Portfolio Weighted Average Life of 4.8 years As of 3/31/17 U.S. BANCORP | 22

  23. Slide 23: Capital Management

    Capital Management Earnings Distribution Target: Reinvest & Share Dividends Acquisitions Repurchases 20 - 40% 30 - 40% 30 - 40% Hypothetical Earnings Distribution Example Dividends 30% Reinvestment 30% Share Repurchases 40% Assumed ROTCE 20% Discretionary Distributions 70% Balance Sheet Growth 6% Ba

  24. Slide 24: Sustainability in Earnings and Capital

    Sustainability in Earnings and Capital Competitive advantages  Diversified business mix  Operating scale  Efficient platform  Flight to quality  Sustainability of dividends Source: Company filings and SNL Financial, Federal Reserve estimates under supervisory severely adverse scenario U.S. BANC

  25. Slide 25: Agenda

    Agenda  Overview  Business Lines & Financial Management  Balance Sheet & Capital Management  Appendix U.S. BANCORP | 25

  26. Slide 26: Non-GAAP Financial Measures

    Non-GAAP Financial Measures March 31, (Dollars in Millions, Unaudited) 2017 Total equity $48,433 Preferred stock (5,419) Noncontrolling interests (635) Goodwill (net of deferred tax liability) (1) (8,186) Intangible assets, other than mortgage servicing rights (671) Tangible common equity 33,522 Tan

  27. Slide 27: Non-GAAP Financial Measures

    Non-GAAP Financial Measures Year ended January 1, 2008 to (Dollars in Millions, Unaudited) December 31, 2016 March 31, 2017 Net interest income $11,528 $93,550 Taxable-equivalent adjustment (1) 203 1,902 Net interest income, on a taxable-equivalent basis 11,731 95,452 Net interest income, on a taxab

  28. Slide 28: Non-GAAP Financial Measures

    Non-GAAP Financial Measures ($ in millions) Net Revenue Line of Business Financial Performance 2016 Full Year Wholesale Banking and Commercial Real Estate $ 3,139 Consumer and Small Business Banking 7,279 Wealth Management and Securities Services 2,126 Payment Services 5,702 Treasury and Corporate S

  29. Slide 29: Payment Services

    Payment Services Revenue Contribution Competitive Advantages to USB  Highly capital and operationally efficient Payment Services  Proprietary scalable, flexible platforms 31%  Financial institution/partner distribution Wealth Mgmt and Securities Services  Successful innovation program Consumer a

  30. Slide 30: Wealth Management and Securities Services

    Wealth Management and Securities Services Revenue Contribution Competitive Advantages to USB  Operating scale Payment Services  High barriers to entry  Investment in customer experience Wealth Mgmt and Securities Services 12% Consumer and Growth Opportunities Small Business Wholesale Banking  AU

  31. Slide 31: Consumer and Small Business Banking

    Consumer and Small Business Banking Revenue Contribution Competitive Advantages to USB  Community banking model supported by scale Payment Services  Robust branch-based small business strategy  Omnichannel approach enhancing customer experience Wealth Mgmt and Securities Services  Real-time paym

  32. Slide 32: Wholesale Banking

    Wholesale Banking Revenue Contribution Competitive Advantages to USB  Breadth and depth of capabilities Payment Services  National footprint for large corporate banking and commercial real estate business Wealth Mgmt and  Highest debt ratings – pricing advantage, flight-to-quality Securities Serv

  33. Slide 33: U.S. Bancorp Fixed Income Investor Presentation

    U.S. Bancorp Fixed Income Investor Presentation May 2017 U.S. BANCORP

U.S. Bancorp — Debt Investor Presentation (May 2017) on 6ix