U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q1 2010 Earnings Presentation
30 slides from U.s. Bancorp's earnings presentation, Apr 20, 2010
Slide 1: U.S. Bancorp 1Q10 Earnings Conference Call
U.S. Bancorp 1Q10 Earnings Conference Call April 20, 2010 Richard K. Davis Chairman, President and CEO Andy Cecere Vice Chairman and CFO
Slide 2: Forward-looking Statements and Additional Information
2 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
Slide 3: 1Q10 Highlights
1Q10 Highlights Net income of $669 million; $.34 per diluted common share Total net revenue of $4.3 billion, up 11.3% vs. 1Q09 Achieved positive operating leverage vs. 4Q09; industry leading efficiency ratio of 49.0% Strong average deposit growth of 13.7% (4.5% excluding acquisitions) and average lo
Slide 4: Performance Ratios
Performance Ratios 1Q09 2Q09 3Q09 4Q09 1Q10 Return on Avg Common Equity 0.09 0.042 0.1 0.096 0.105 Return on Avg Assets 0.0081 0.0071 0.009 0.0086 0.0096 1Q09 2Q09 3Q09 4Q09 1Q10 Efficiency Ratio 0.458 0.51 0.475 0.491 0.49 Net Interest Margin 0.0359 0.036 0.0367 0.0383 0.039 ROE and ROA Efficiency
Slide 5: Capital Position
Capital Position $ in billions 1Q09 2Q09 3Q09 4Q09 1Q10 Shareholders' equity $ 27.2 $ 24.2 $ 25.2 $ 26.0 $ 26.7 Tier 1 capital 25.3 21.7 22.0 22.6 23.3 Total risk-based capital 33.5 30.0 30.1 30.5 30.9 Tier 1 capital ratio 10.9% 9.4% 9.5% 9.6% 9.9% Tier 1 common equity ratio 5.4% 6.7% 6.8% 6.8% 7.1%
Slide 6: Loan and Deposit Growth
1Q09 2Q09 3Q09 4Q09 1Q10 Loans 185.7 183.9 182 191.6 192.9 Deposits 160.5 163.2 166.4 180.9 182.5 Loan and Deposit Growth Average Balances Year-Over-Year Growth 1Q10 Acquisition Adjusted Loan Growth = (2.9%) Deposit Growth = 4.5% 8.2% $191.6 3.9% $192.9 19.6% $185.7 12.8% $183.9 9.3% $182.0 25.2% $1
Slide 7: Revenue Growth
Taxable-equivalent basis 1Q09 2Q09 3Q09 4Q09 1Q10 Reported 3883 4159 4250 4376 4321 Core 3989 4178 4287 4534 4355 Revenue Growth Year-Over-Year Core Growth 8.0% 8.2% 12.0% 18.1% 9.2% Reported Core $ in millions
Slide 8: Credit Quality, linked quarter change
3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 NPA $ Change 76 49 155 290 357 489 727 626 386 184 91 NPA % Change 0.13 0.08 0.22 0.34 0.31 0.33 0.37 0.23 0.12 0.05 0.02 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 NCO $ Change 8 26 68 103 102 134 156 141 112 69 25 NCO % Change 0.04
Slide 9: Credit Quality - Reserves
Credit Quality - Reserves 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 Allowance 2260 2243 2448 2648 3004 3575 4105 4571 4986 5264 Provision Exceeding NCO's 0 192 200 250 635 530 466 415 278 175 Provision/NCO's 1 1.66 1.51 1.5 2 1.67 1.5 1.4 1.25 1.15 Allowance for Credit Losses Allowance Provi
Slide 10: Credit Quality - Commercial Loans
Credit Quality - Commercial Loans 1Q09 2Q09 3Q09 4Q09 1Q10 Average Loans 49362 47362 44655 43490 40837 Net Charge-offs Ratio 0.0092 0.015 0.0178 0.0228 0.0241 Average Loans and Net Charge-offs Ratios Key Statistics Comments Utilization continues to decline resulting in a $1.5 billion decline in aver
Slide 11: Credit Quality - Commercial Leases
Credit Quality - Commercial Leases 1Q09 2Q09 3Q09 4Q09 1Q10 Average Loans 6772 6697 6567 6489 6445 Net Charge-offs Ratio 0.0329 0.0329 0.0266 0.0202 0.0214 Average Loans and Net Charge-offs Ratios Key Statistics Comments Delinquency and nonperforming levels continue to decline as net charge-offs sta
Slide 12: Credit Quality - Commercial Real Estate
Multi-Family Retial Res Construction Condo Construction A&D Commercial Office Other Mix 2081 1341 1463 522 1080 923 1297 Investor Owner Mix 14402 11042 Credit Quality - Commercial Real Estate 1Q09 2Q09 3Q09 4Q09 1Q10 Avg Loans 33398 33727 33829 34044 34151 NCO Ratio 0.0158 0.0144 0.0222 0.0203 0.022
Slide 13: Credit Quality - Residential Mortgage
1Q09 2Q09 3Q09 4Q09 1Q10 Restructured 1129 1289 1338 1354 1560 Credit Quality - Residential Mortgage 1Q09 2Q09 3Q09 4Q09 1Q10 Average Loans 23915 23964 24405 25621 26408 Net Charge-offs Ratio 0.0154 0.0194 0.021 0.0237 0.0223 Average Loans and Net Charge-offs Ratios Key Statistics Comments Successfu
Slide 14: Credit Quality - Home Equity
Credit Quality - Home Equity 1Q09 2Q09 3Q09 4Q09 1Q10 Average Loans 19215 19314 19368 19444 19402 Net Charge-offs Ratio 0.0148 0.0172 0.0182 0.0196 0.0188 Average Loans and Net Charge-offs Ratios Key Statistics Comments Strong credit quality portfolio (weighted average FICO 745, CTLV 73%) originated
Slide 15: Credit Quality - Credit Card
1Q09 4Q09 1Q10 Average Loans 13,597 16,399 16,368 30-89 Delinquencies 2.62% 2.38% 2.35% 90+ Delinquencies 2.56% 2.59% 2.57% Nonperforming Loans 0.66% 0.84% 1.02% Credit Quality - Credit Card 1Q09 2Q09 3Q09 4Q09 1Q10 Average Loans 13597 14329 15387 16399 16368 Net Charge-offs Ratio 0.0632 0.0736 0.06
Slide 16: Credit Quality - Retail Leasing
Credit Quality - Retail Leasing 1Q09 2Q09 3Q09 4Q09 1Q10 Average Loans 5115 5031 4822 4620 4509 Net Charge-offs Ratio 0.0103 0.008 0.0066 0.0043 0.0045 Average Loans and Net Charge-offs Ratios Key Statistics Comments Retail leasing delinquency rates continue to improve Strong used auto values contin
Slide 17: Credit Quality - Other Retail
Credit Quality - Other Retail 1Q09 2Q09 3Q09 4Q09 1Q10 Average Loans 22987 22753 22647 23037 23343 Net Charge-offs Ratio 0.0175 0.018 0.0194 0.0191 0.0193 Average Loans and Net Charge-offs Ratios Key Statistics Comments Overall delinquencies declined on a linked quarter basis Auto loan portfolio net
Slide 18: Earnings Summary
Earnings Summary $ in millions, except per-share data % B/(W) 1Q10 4Q09 1Q09 vs 4Q09 vs 1Q09 Net Interest Income $ 2,403 $ 2,360 $ 2,095 1.8 14.7 Noninterest Income 1,918 2,016 1,788 (4.9) 7.3 Total Revenue 4,321 4,376 3,883 (1.3) 11.3 Noninterest Expense 2,136 2,228 1,871 4.1 (14.2) Operating Incom
Slide 19: 1Q10 Results - Key Drivers
1Q10 Results - Key Drivers vs. 1Q09 Net Revenue growth of 11.3% (9.2% excluding significant items) Net interest income growth of 14.7%; net interest margin of 3.90% vs. 3.59% Noninterest income growth of 7.3% (3.1% excluding significant items) Significant items: net change of $72 million Noninterest
Slide 20: Significant Items
Significant Items 1Q10 4Q09 1Q09 Revenue Items Securities gains (losses), net $ (34) $ (158) $ (198) Other non-operating gains (losses) - - 92 Expense Items Provision in excess of net charge-offs 175 278 530 $ in millions
Slide 21: Net Interest Income
Net Interest Income 1Q09 2Q09 3Q09 4Q09 1Q10 Net Interest Income 2095 2104 2157 2360 2403 Net Interest Margin 0.0359 0.036 0.0367 0.0383 0.039 Net Interest Income Key Points $ in millions Taxable-equivalent basis vs. 1Q09 Average earning assets grew by $13.5 billion, or 5.7% (0.1% excluding acquisit
Slide 22: Average Earning Assets
Average Earning Assets 1Q09 2Q09 3Q09 4Q09 1Q10 Other 7.288 8.198 9.585 9.586 9.739 Loans 185.705 183.878 181.968 191.648 192.878 Securities 42.321 42.189 42.558 44.149 46.211 Average Earning Assets Key Points $ in billions Year-Over-Year Growth 13.7% 10.5% 8.9% 8.6% 5.7% Securities Loans LHFS and O
Slide 23: Average Loans
Average Loans 1Q09 2Q09 3Q09 4Q09 1Q10 Covered 11.344 10.701 10.288 18.504 21.415 Commercial 56.134 54.059 51.222 49.979 47.282 CRE 33.398 33.727 33.829 34.044 34.151 Res Mtg 23.915 23.964 24.405 25.621 26.408 Retail 60.914 61.427 62.224 63.5 63.622 Average Loans Key Points $ in billions Year-Over-Y
Slide 24: Average Deposits
Average Deposits 1Q09 2Q09 3Q09 4Q09 1Q10 Time 54.203 48.911 43.951 45.774 45.606 Money Market 27.927 27.25 33.387 38.485 40.902 Checking & Savings 42.378 49.671 52.042 55.64 58.023 Noninterest-bearing 36.02 37.388 36.982 40.99 38 Average Deposits Key Points $ in billions Year-Over-Year Growth 22.7%
Slide 25: Noninterest Income
Noninterest Income 1Q09 2Q09 3Q09 4Q09 1Q10 All Other 230 346 379 400 392 Mortgage 233 308 276 218 200 Service Charges 363 392 397 370 344 Trust & Inv Mgmt 294 304 293 277 264 Payment Services 668 705 748 751 718 Noninterest Income Key Points $ in millions Year-Over-Year Growth (12.5%) 8.6% 48.2% 37
Slide 26: Noninterest Expense
Noninterest Expense 1Q09 2Q09 3Q09 4Q09 1Q10 All Other 382 649 500 611 611 Tech & Communications 155 157 175 186 186 Prof Svcs, Marketing and PPS 182 211 272 256 256 Occupancy & Equip 211 208 203 214 214 Compensation & Benefits 941 904 903 961 961 Noninterest Expense Key Points $ in millions Year-Ov
Slide 27: Positioned for Growth Opportunities
Positioned for Growth Opportunities Core businesses continue to perform Solid capital and liquidity position and strong capital generation Positioned to capitalize on economic recovery "Flight to Quality" Investing for growth - organic initiatives, M&A and joint ventures USB prepared to opportunisti
Slide 28: 1Q10 Earnings Conference Call Appendix
1Q10 Earnings Conference Call Appendix (Sbancorp.
Slide 29: Non-Regulatory Capital Ratios
Non-Regulatory Capital Ratios $ in millions 1Q09 2Q09 3Q09 4Q09 1Q10 Total equity $ 27,942 $ 24,886 $ 25,880 $ 26,661 $ 27,388 Preferred stock (7,939) (1,500) (1,500) (1,500) (1,500) Noncontrolling interests (719) (715) (709) (698) (679) Goodwill (net of deferred tax liability) (8,001) (8,035) (8,16
Slide 30: U.S. Bancorp 1Q10 Earnings Conference Call
U.S. Bancorp 1Q10 Earnings Conference Call April 20, 2010