U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q4 2018 Earnings Presentation
29 slides from U.s. Bancorp's earnings presentation, Jan 16, 2019
Slide 1: U.S. Bancorp 4Q18 Earnings Conference Call
U.S. Bancorp 4Q18 Earnings Conference Call January 16, 2019 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: Today’s presentation contains forward-looking statements about U.S. Bancorp. Statements that are not historical or current facts, including
Slide 3: 4Q18 Highlights
4Q18 Highlights * Taxable-equivalent basis; see slide 26 for calculation ** Excluding the impact of student loans sold in 2Q18 and FDIC covered loans sold in 4Q18, average total loans grew 2.6% vs. 4Q17 and 1.5% vs. 3Q18
Slide 4: Performance Ratios
Performance Ratios Efficiency Ratio** & Net Interest Margin Net interest margin on a taxable-equivalent basis * Excluding notable items; see slides 26 and 27 for calculations ** Non-GAAP; see slides 26 and 27 for calculations Return on Average Common Equity Return on Tangible Common Equity** Return
Slide 5: Average Loans
Average Loans +0.9% linked quarter +1.4% year-over-year On a linked quarter basis, average total loan growth was driven by growth in residential mortgages and total commercial loans. On a year-over-year basis, growth in average total loans was driven by residential mortgages, total commercial loans,
Slide 6: Average Deposits
Average Deposits +1.3% linked quarter -1.4% year-over-year $ in billions Interest-bearing Deposits On a linked quarter basis, average noninterest-bearing deposits were essentially flat reflecting seasonal growth in Wealth Management and Investment Services balances offset by decreases in Corporate a
Slide 7: Credit Quality
Credit Quality $ in millions NCO Ratio +3 bps QoQ +3 bps YoY NPAs -1.5% QoQ -17.6% YoY
Slide 8: Earnings Summary
Earnings Summary Excluding $ and shares in millions, except EPS Reported Notable Items Notable Items a8 4Q17 __%Change 418 17 ‘%Change Net interest Income $3,303 $3,175 40 $- s- 40 Taxable- sauilent ‘Adjustment 28 53 (472) - - (47.2) Net Interest Income (oable oquatont basis) 3,331 3,228 32 - - 2,49
Slide 9: Notable Items
Notable Items 4Q18 notable items include: $340 million gain on sale of ATM servicing business $264 million in charges for asset impairments related to sale of FDIC covered loans and certain other assets $174 million in severance charges and legal accruals $140 million favorable adjustment to deferre
Slide 10: Net Interest Income
Net Interest Income Linked Quarter Net interest income growth was primarily driven by the impact of higher interest rates and earning assets growth, partially offset by higher rates on deposits and funding mix shift. The net interest margin was flat reflecting the impact of higher rates on assets an
Slide 11: Noninterest Income
Noninterest Income $ in millions Payments = credit and debit card, corporate payment products and merchant processing Service charges = deposit service charges, treasury management and ATM processing All other = commercial products, investment products fees, securities gains (losses) and other $2,37
Slide 12: Noninterest Expense
Noninterest Expense Linked Quarter Noninterest expense increased primarily due to an increase in compensation expense, seasonally higher professional services expense, and growth in other noninterest expense. Other noninterest expense growth reflects seasonally higher amortization costs related to t
Slide 13: Capital Position
Capital Position * See Non-GAAP Financial Measures reconciliation on slide 25
Slide 14: Appendix
Appendix
Slide 15: Average Loans
Average Loans vs. 4Q17 Average total loans increased by $3.9 billion, or 1.4% Average residential mortgage loans increased by $4.8 billion, or 8.1% Average commercial loans increased by $3.0 billion, or 3.0% Average credit card loans increased by $1.2 billion, or 5.6% Average commercial real estate
Slide 16: Average Deposits
Average Deposits Key Points Average Deposits ($bn) vs. 4Q17 Average total deposits decreased by $4.8 billion, or 1.4% Average low-cost deposits (NIB, interest checking, savings and money market) declined $9.8 billion, or 3.3% vs. 3Q18 Average total deposits increased by $4.2 billion, or 1.3% Average
Slide 17: Credit Quality – Commercial Loans
Credit Quality – Commercial Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm4Q173Q184Q18 Average Loans$97,558$99,048$100,515 30-89 Delinquencies0.26%0.23%0.31% 90+ Delinquencies0.06%0.06%0.07% Nonperforming Loans0.26%0.22%0.20% Linked Quarter Growth 1.0% (0.1%) 0.9%
Slide 18: Credit Quality – Commercial Real Estate
Investor $19,047 Owner Occupied $9,883 A&D Const $328 Multi-family $4,088 Retail $416 Residential Construction $2,144 Office $1,051 Other $2,502 Resi Land $690 $mm4Q173Q184Q18 Average Loans$41,009$39,542$40,149 30-89 Delinquencies0.09%0.08%0.18% 90+ Delinquencies0.01%0.01%0.00% Nonperforming Loans0.
Slide 19: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm4Q173Q184Q18 Average Loans$59,639$62,042$64,476 30-89 Delinquencies0.33%0.27%0.27% 90+ Delinquencies0.22%0.19%0.18% Nonperforming Loans0.74%0.50%0.46% * Excludes GNMA loans, whose repayme
Slide 20: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm4Q173Q184Q18 Average Loans$21,218$21,774$22,396 30-89 Delinquencies1.37%1.42%1.39% 90+ Delinquencies1.28%1.18%1.25% Nonperforming Loans0.00%0.00%0.00% Linked Quarter Growth 1.4% 0.3% (0.3%) 2.6% 2
Slide 21: Credit Quality – Home Equity
Credit Quality – Home Equity Average Loans ($mm) and Net Charge-offs Ratio Key Points Linked Quarter Growth 0.0% (0.6%) (0.9%) (0.3%) 0.4% High-quality originations (weighted average FICO on commitments of 766, weighted average CLTV of 69%) were originated primarily through the retail branch network
Slide 22: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm4Q173Q184Q18 Average Loans$7,982$8,383$8,489 30-89 Delinquencies0.41%0.38%0.43% 90+ Delinquencies0.03%0.02%0.04% Nonperforming Loans0.10%0.13%0.14% * Manheim Used Vehicle Value Index source: ww
Slide 23: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm4Q173Q184Q18 Average Loans$32,856$31,520$31,587 30-89 Delinquencies0.80%0.83%0.87% 90+ Delinquencies0.15%0.14%0.15% Nonperforming Loans0.10%0.12%0.13% Linked Quarter Growth 2.6% 0.1% (4.9%) 0.8%
Slide 24: Credit Quality – Auto Loans
Credit Quality – Auto Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm4Q173Q184Q18 Average Loans$18,754$18,563$18,500 30-89 Delinquencies0.95%1.00%1.04% 90+ Delinquencies0.08%0.08%0.09% Nonperforming Loans0.12%0.14%0.14% Direct: 4% Wtd Avg FICO: 746 NCO: 0.18% Indire
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures * Preliminary data. Subject to change prior to filings with applicable regulatory agencies. (1) – see slide 28 for corresponding note
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures (2), (3), (4), (5) – see slide 28 for corresponding notes
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures (1), (5) – see slide 28 for corresponding notes
Slide 28: Notes
Notes Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements. Interest and rates are presented on a fully taxable-equivalent basis based on a federal income tax rate of 21 percent for 2018 and 35 percent for 2017. Notable item
Slide 29: U.S. Bancorp 4Q18 Earnings Conference Call
U.S. Bancorp 4Q18 Earnings Conference Call January 16, 2019