25 slides from U.s. Bancorp's earnings presentation, Oct 19, 2016
Slide 1: U.S. Bancorp 3Q16 Earnings Conference Call
Exhibit 99.2 U.S. Bancorp 3Q16 Earnings Conference Call Richard K. Davis Chairman and CEO Terry Dolan Vice Chairman and CFO October 19, 2016
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: This presentation contains forward-looking statements about U.S. Bancorp. Statements that are not historical or current facts, including st
Slide 3: 3Q16 Highlights
3Q16 Highlights • Net income of $1.5 billion; $0.84 per diluted common share • Average loans grew 1.1% vs. 2Q16 and 7.6% vs. 3Q15 – Loan growth of 6.4% vs. 3Q15 excluding the credit card portfolio acquisition at the end of 4Q15 and student loans which were transferred from held for sale to held for
Slide 4: 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% 3.04% 3.06% 3.06% 3.02% 2.98% 14.1% 13.7% 13.8% 13.5% 14% 13.0% 2.0% 56% 54.6% 54.9% 2.8% 54.5% 53.9% 53.9% 54.0% 1.44% 1.41% 1.43% 11% 1.36% 1
Slide 5: Revenue Growth
Revenue Growth $ in millions Year-Over-Year Change 3.1% 0.8% 2.7% 8.1% 4.7% 4.5% 6,000 excluding 2Q16 notable item* 5,500 $5,448 $5,388 $5,211 $180 $5,147 $5,037 5,000 4,500 4,000 3Q15 4Q15 1Q16 2Q16 3Q16 * Notable item: 2Q16 Visa Europe sale gain $180 million U.S. BANCORP | 5
Slide 6: Loan and Deposit Growth
Loan and Deposit Growth $ in billions Year-Over-Year Growth Average Balances 340 10.0% 7.6% $318.5 6.9% 6.3% $307.4 6.9% $295.9 300 $294.5 6.5% * 6.4% * $289.7 5.2% * 8.1% 7.6% 3.8% * 4.2% 5.8% $266.6 $269.6 2.7% $256.7 $262.3 260 $250.5 220 180 3Q15 4Q15 1Q16 2Q16 3Q16 Loans Deposits * Adjusted for
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 $1,719 $305 $1,672 $1,664 $292 $1,567 $1,523 260 1.50% 1,400 1.50% 0.61% 0.65% 0.62% 0.61% 130 0.75% 700 0.58% 0.75% 0.46% 0.47% 0.48% 0.48% 0.46% 0 0.00% 0 0.00% 3Q15 4Q15 1Q
Slide 8: Earnings Summary
Earnings Summary $ and shares in millions, except per-share data Excl Notable Reported Notable Items 3Q16 % B/(W) Items % B/(W) 3Q16 2Q16 3Q15 vs 2Q16 vs 3Q15 2Q16 vs 2Q16 Net Interest Income $ 2,893 $ 2,845 $ 2,768 1.7 4.5 $ - 1.7 Taxable-equivalent Adjustment 50 51 53 (2.0) (5.7) - (2.0) Net Inter
Slide 9: Net Interest Income
Net Interest Income Net Interest Income Key Points $ in millions Year-Over-Year Change vs. 3Q15 2.7% 2.6% 4.9% 4.5% 4.3% • Average earning assets grew $24.5 billion, or 6.6% 4,000 8.0% • Net interest margin lower 6 bps (2.98% vs. 3.04%) – Principally due to increased funding costs and higher $2,871
Slide 10: Noninterest Income
Noninterest Income Noninterest Income Key Points $ in millions vs. 3Q15 Year-Over-Year Change • Noninterest income increased $119 million, or 5.1% 3.7% (1.3%) (0.2%) 12.3% 5.1% – Higher mortgage banking revenue (40.2% increase) driven by higher 4.4% origination and sales volume in part due to refina
Slide 11: Noninterest Expense
Noninterest Expense Noninterest Expense Key Points $ in millions vs. 3Q15 Year-Over-Year Change • Noninterest expense increased $156 million, or 5.6% 6.2% 0.2% 3.2% 11.6% 5.6% – Higher compensation (8.5% increase) principally due to the 3,600 6.0% impact of hiring decisions to support business growt
Slide 12: Capital Position
Capital Position $ in billions 3Q16 2Q16 1Q16 4Q15 3Q15 Total U.S. Bancorp shareholders' equity $ 47.8 $ 47.4 $ 46.7 $ 46.1 $ 45.1 Standardized Approach Basel III transitional standardized approach Common equity tier 1 capital ratio 9.5% 9.5% 9.5% 9.6% 9.6% Tier 1 capital ratio 11.1% 11.1% 11.1% 11.
Slide 13: Appendix
Appendix U.S. BANCORP | 13
Slide 14: Average Loans
Average Loans Average Loans Key Points $ in billions Year-Over-Year Growth vs. 3Q15 2.7% 4.2% 5.8% 8.1% 7.6% • Average total loans increased by $19.1 billion, 3.8%* 5.2%* 6.5%* 6.4%* or 7.6% (6.4% growth excluding student loans 320 and the credit card portfolio acquisition) $269.6 $262.3 $266.6 $250
Slide 15: Average Deposits
Average Deposits Average Deposits Key Points $ in billions Year-Over-Year Growth vs. 3Q15 6.9% 6.9% 6.3% 7.6% 10.0% • Average total deposits increased by 360 $28.9 billion, or 10.0% $318.5 $307.4 $289.7 $294.5 $295.9 • Average low-cost deposits (NIB, interest 270 2.4% 1.3% checking, money market and
Slide 16: Credit Quality – Commercial Loans
Credit Quality – Commercial Loans $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 120,000 2.0% 3Q15 2Q16 3Q16 Average Loans $84,704 $92,154 $92,369 $89,820 $92,154 $92,369 30-89 Delinquencies 0.24% 0.22% 0.24% 90,000 $84,704 $86,803 1.5% 90+ Delinquencies 0.05% 0.05% 0.05% Nonp
Slide 17: 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% 3Q15 2Q16 3Q16 Average Loans $42,316 $42,988 $43,374 $42,316 $42,231 $42,401 $42,988 $43,374 30-89 Delinquencies 0.15% 0.11% 0.08% 40,000 1.0% 90+ Delinquencies 0.05% 0.03% 0.02%
Slide 18: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 80,000 2.0% 3Q15 2Q16 3Q16 Average Loans $51,831 $55,501 $56,284 30-89 Delinquencies 0.35% 0.28% 0.26% 60,000 $55,501 $56,284 1.5% $51,831 $52,970 $54,208 90+ Delinquencies 0.33% 0.27% 0.28% N
Slide 19: Credit Quality – Credit Card
Credit Quality – Credit Card $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 24,000 12.0% 3Q15 2Q16 3Q16 $20,244 $20,140 $20,628 Average Loans $17,944 $20,140 $20,628 $18,838 30-89 Delinquencies 1.27% 1.15% 1.27% $17,944 18,000 9.0% 90+ Delinquencies 1.10% 0.98% 1.11% Nonperfor
Slide 20: Credit Quality – Home Equity
Credit Quality – Home Equity $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 20,000 2.0% 3Q15 2Q16 3Q16 $16,083 $16,241 $16,368 $16,394 $16,470 Average Loans $16,083 $16,394 $16,470 15,000 1.5% 30-89 Delinquencies 0.36% 0.36% 0.41% 90+ Delinquencies 0.25% 0.24% 0.24% Nonperform
Slide 21: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 8,000 0.8% 3Q15 2Q16 3Q16 Average Loans $5,480 $5,326 $5,773 30-89 Delinquencies 0.18% 0.18% 0.21% $5,773 6,000 $5,480 0.6% 90+ Delinquencies 0.02% 0.00% 0.00% $5,265 $5,179 $5,326 Nonperforming Loa
Slide 22: Credit Quality – Other Retail
Credit Quality – Other Retail $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 40,000 2.0% 3Q15 2Q16 3Q16 Average Loans $27,286 $29,748 $30,608 $29,556 $29,550 $29,748 $30,608 30-89 Delinquencies 0.46% 0.47% 0.56% 30,000 $27,286 1.5% 90+ Delinquencies 0.10% 0.10% 0.11% Nonperfor
Slide 23: Credit Quality – Auto Loans
Credit Quality – Auto Loans $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 20,000 2.0% 3Q15 2Q16 3Q16 $16,551 $16,623 $16,690 $17,205 Average Loans $16,220 $16,690 $17,205 $16,220 30-89 Delinquencies 0.40% 0.48% 0.59% 15,000 1.5% 90+ Delinquencies 0.02% 0.03% 0.05% Nonperformi
Slide 24: Non-GAAP Financial Measures
Non-GAAP Financial Measures September 30, June 30, March 31, December 31, September 30, (Dollars in Millions, Unaudited) 2016 2016 2016 2015 2015 Total equity $48,399 $48,029 $47,393 $46,817 $45,767 Preferred stock (5,501) (5,501) (5,501) (5,501) (4,756) Noncontrolling interests (640) (639) (638) (6
Slide 25: U.S. Bancorp 3Q16 Earnings Conference Call
U.S. Bancorp 3Q16 Earnings Conference Call October 19, 2016