U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q2 2020 Earnings Presentation
32 slides from U.s. Bancorp's earnings presentation, Jul 15, 2020
Slide 1: U.S. Bancorp 2Q20 Earnings Conference Call
U.S. Bancorp 2Q20 Earnings Conference Call July 15, 2020 Exhibit 99.2
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: This presentation contains forward-looking statements about U.S. Bancorp. Statements that are not historical or current facts, including st
Slide 3: 2Q20 Highlights
2Q20 Highlights * Taxable-equivalent basis; see slide 28 for calculation ** Common equity tier 1 capital to risk-weighted assets, reflecting the full implementation of the current expected credit losses methodology was 8.7% as of 6/30/20.
Slide 4: Performance Ratios
Performance Ratios Efficiency Ratio* & Net Interest Margin** * Non-GAAP; see slides 28 and 29 for calculations ** Net interest margin on a taxable-equivalent basis Return on Average Common Equity Return on Tangible Common Equity* Return on Average Assets
Slide 5: Digital Engagement Trends
Digital Engagement Trends Three months ended Three months ended * Represents core Consumer Banking customers active in at least one channel in the previous 90 days Total Digital includes both online and mobile platforms
Slide 6: Average Loans
Average Loans +6.9% linked quarter +10.0% year-over-year On a linked quarter basis, average total loans were higher primarily driven by growth in total commercial loans, reflecting the utilization of bank credit facilities by customers to support liquidity requirements as well as the impact of loans
Slide 7: Average Deposits
Average Deposits $ in billions +11.2% linked quarter +16.8% year-over-year Interest-bearing Deposits Average noninterest-bearing (NIB) deposits increased on both a linked quarter and year-over-year basis, primarily driven by Corporate and Commercial Banking, Consumer and Business Banking, and Wealth
Slide 8: Credit Quality
Credit Quality $ in millions NCO Ratio +2 bps QoQ +6 bps YoY NPAs +24.0% QoQ +23.1% YoY
Slide 9: Credit Risk Management – Consistent Underwriting
2Q202Q20 Retail (includes Restaurants) 5.4% 4.6% Autos3.0%2.1% Energy 2.3% 1.1% Media & Entertainment2.2%2.2% Lodging 1.1% 1.4% Airline 0.6% 0.6% Credit Risk Management – Consistent Underwriting Commercial Exposures by Impacted Industries** Key Points Debt rating agencies: Moody’s and S&P * FICO and
Slide 10: Earnings Summary
Earnings Summary $ and shares in millions, except EPS Reported % Change 2020 1020 2019 vs.1020 vs. 2019 Net Interest Income $3,200 $3,223 $3,305 (07) (32) Taxable-equivalent Adjustment 24 24 27 - (14.4) Net Interest Income (taxable-equivalent basis) 3,224 3,247 3,332 (0.7) (32) it 2,614 2,525 2,490
Slide 11: Net Interest Income
Net Interest Income Linked Quarter Net interest income decreased, primarily driven by the impact of lower interest rates, partially offset by loan growth and the benefit of deposit pricing and funding mix. The net interest margin decreased, primarily due to impact of the lower yield curve and higher
Slide 12: Noninterest Income
Noninterest Income $ in millions; Payments = credit and debit card, corporate payment products and merchant processing; Service charges = deposit service charges and treasury management; All other = commercial products, investment products fees, securities gains (losses) and other +3.5% linked quart
Slide 13: Payment Services Fee Revenue
Payment Services Fee Revenue Select Revenue Exposure, YTD 2020 Contribution to U.S. Bank’s Net Revenues Merchant Acquiring Revenue Corporate Payment Systems Revenue Retail Payment Solutions Revenue Commercial revenue breakdown: Travel and Entertainment represents 11.7% of total CPS revenue YTD
Slide 14: Noninterest Expense
Noninterest Expense $ in millions PPS = postage, printing and supplies +0.1% linked quarter +5.2% year-over-year Linked Quarter Compensation expense increased, primarily due to merit and revenue-related expenses. Technology and communications expense increased, primarily due to capital expenditures
Slide 15: Capital Position
Capital Position * Non-GAAP; see slide 30 for calculations
Slide 16: Responding to Challenging Times
Responding to Challenging Times Customers Paycheck Protection Program Funding approval secured for over 101,000 applicants $7.3 billion in loans Potential impact: 840,000 employees Forbearance, deferral and fee waiver programs Branch operation adjustments that allowed for ongoing support of customer
Slide 17: Appendix
Appendix U.S. BANCORP | 17
Slide 18: Average Loans
Average Loans vs. 2Q19 Average total loans increased by $28.9 billion, or 10.0% Average commercial loans increased by $24.8 billion, or 24.0% Average residential mortgage loans increased by $4.3 billion, or 6.4% Average credit card loans decreased by $1.3 billion, or 5.8% Average retail loans decrea
Slide 19: Average Deposits
Average Deposits Key Points Average Deposits ($bn) vs. 2Q19 Average total deposits increased by $58.1 billion, or 16.8% Average low-cost deposits (NIB, interest checking, savings and money market) increased by $61.7 billion, or 20.7% vs. 1Q20 Average total deposits increased by $40.5 billion, or 11.
Slide 20: Credit Quality – Commercial
Credit Quality – Commercial Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm2Q19 1Q20 2Q20 Average Loans$103,233 $105,987 $128,039 30-89 Delinquencies0.34% 0.28%0.33% 90+ Delinquencies0.26%0.06%0.07% Nonperforming Loans0.27% 0.24% 0.38% Linked Quarter Growth 1.2% 0.4% 0.2%
Slide 21: Credit Quality – Commercial Real Estate
Investor $21,159 Owner Occupied $9,035 A&D Const $250 Multi-family $3,769 Retail $307 Residential Construction $2,367 Office $939 Other $2,586 Resi Land $676 $mm2Q19 1Q20 2Q20 Average Loans$39,365 $40,078$41,088 30-89 Delinquencies0.07% 0.20%0.25% 90+ Delinquencies0.00%0.00%0.00% Nonperforming Loans
Slide 22: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm2Q191Q202Q20 Average Loans$66,834 $70,892 $71,122 30-89 Delinquencies0.26%0.23%0.34% 90+ Delinquencies0.17% 0.15% 0.16% Nonperforming Loans0.39%0.34%0.34% * Excludes GNMA loans, whose rep
Slide 23: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm2Q191Q202Q20 Average Loans$22,830 $23,836 $21,510 30-89 Delinquencies1.23%1. 29%1.08% 90+ Delinquencies1.14%1.29%1.22% Nonperforming Loans0.00%0.00%0.00% Linked Quarter Growth 1.0% 3.7% 1.8% (1.1%
Slide 24: Credit Quality – Home Equity
Credit Quality – Home Equity Average Loans ($mm) and Net Charge-offs Ratio Key Points Linked Quarter Growth (1.0%) (1.5%) (2.4%) (2.5%) (3.0%) Key Statistics Key Statistics $mm2Q191Q202Q20 Average Loans$15,831 $14,838 $14,386 30-89 Delinquencies0.51%0.53%0.46% 90+ Delinquencies0.34%0.30%0.37% Nonper
Slide 25: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm2Q191Q202Q20 Average Loans$8,547 $8,474 $8,412 30-89 Delinquencies0.45%0.52%0.51% 90+ Delinquencies0.02%0.04%0.06% Nonperforming Loans0.13%0.18%0.23% * Manheim Used Vehicle Value Index source:
Slide 26: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm2Q191Q202Q20 Average Loans$32,578 $33,552 $33,550 30-89 Delinquencies0.80%0.79%0.43% 90+ Delinquencies0.13%0.14%0.10% Nonperforming Loans0.12%0.10%0.14% Linked Quarter Growth 2.1% 2.7% 0.2 % 0.1%
Slide 27: Credit Quality – Auto Loans
Credit Quality – Auto Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm2Q191Q202Q20 Average Loans$19,023 $19,276 $18,758 30-89 Delinquencies1.01%1.08%0.56% 90+ Delinquencies0.09%0.12%0.07% Nonperforming Loans0.15%0.15%0.21% Direct: 4% Wtd Avg FICO: 753 NCO: 0.19% Indi
Slide 28: Non-GAAP Financial Measures (4)
Non-GAAP Financial Measures (4) – see slide 31 for corresponding notes
Slide 29: Non-GAAP Financial Measures (1)
Non-GAAP Financial Measures (1) – see slide 31 for corresponding notes
Slide 30: Non-GAAP Financial Measures
Non-GAAP Financial Measures * Preliminary data. Subject to change prior to filings with applicable regulatory agencies. (1), (2), (3) – see slide 31 for corresponding notes
Slide 31: Notes
Notes Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements. Includes the estimated increase in the allowance for credit losses related to the adoption of the current expected credit losses methodology net of deferred taxes.
Slide 32: U.S. Bancorp 2Q20 Earnings Conference Call
U.S. Bancorp 2Q20 Earnings Conference Call July 15, 2020