32 slides from U.s. Bancorp's earnings presentation, Jul 15, 2022
Slide 1: U.S. Bancorp 2Q22 Earnings Conference Call
U.S. Bancorp 2Q22 Earnings Conference Call July 15, 2022 Exhibit 99.2
Slide 2: Forward-looking statements disclaimer
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 statements about beliefs and expectations, are forward-l
Slide 3: 2Q22 Highlights
2Q22 Highlights 1 Taxable-equivalent basis; see slide 28 for calculation 2 Common equity tier 1 capital to risk-weighted assets, reflecting the full implementation of the current expected credit losses methodology was 9.4% as of 6/30/22. 3 Earnings returned (millions) = total common dividends paid a
Slide 4: Performance Ratios
Performance Ratios Return on Average Assets Efficiency Ratio1 & Net Interest Margin2 Return on Average Common Equity Return on Tangible Common Equity1 1 Non-GAAP; see slides 28 and 29 for calculations 2 Net interest margin on a taxable-equivalent basis 3 Non-GAAP; Excluding merger and integration ch
Slide 5: Digital Engagement Trends
Digital Engagement Trends 5/31/22 1 Represents core Consumer Banking customers active in at least one channel in the previous 90 days 2 Interactive Voice Response Total Digital includes both online and mobile platforms
Slide 6: Digital and payments initiatives across our businesses
Digital and payments initiatives across our businesses Commercial and Large Corporate Business Banking Consumer Banking ~6x >10x FY20 RTP Transactions at U.S. Bank First in market to send RTP4 Transaction Multiple ways to integrate RTP products #1 are out of U.S. Bank’s footprint ~55% New State Farm
Slide 7: Business Banking and Payments Trends
Business Banking and Payments Trends With 1.1 million business1 banking relationships, there is a significant opportunity for us to deepen current relationships and acquire new customers. Banking and Payments2 Relationships Business Banking only Business Banking & Payments Payments only Payments & B
Slide 8: Average Loans
Average Loans +3.6% linked quarter +10.2% year-over-year On a linked quarter basis, average total loans were higher primarily due to growth in commercial loans and higher residential mortgages. On a year-over-year basis, average total loans were higher primarily due to higher commercial loans, highe
Slide 9: Average Deposits
Average Deposits +0.5% linked quarter +6.4% year-over-year Interest-bearing Deposits Average noninterest-bearing (NIB) deposits decreased on a linked quarter basis and on a year-over-year basis. On a linked quarter basis, the decrease was driven by Corporate and Commercial Banking and Wealth Managem
Slide 10: Credit Quality
NCO Ratio -1 bps QoQ -5 bps YoY NPAs -5.1% QoQ -27.3% YoY $ in millions, except allowance for credit losses in billions Allowance for Credit Losses by Loan Class, 2Q22 Amount ($B) Loans and Leases Outstanding (%) Commercial $1.9 1.5% Commercial Real Estate 1.0 2.4% Residential Mortgage 0.7 0.8% Cred
Slide 11: Earnings Summary
Earnings Summary 1 Merger and integration-related charges associated with the planned acquisition of MUFG Union Bank.
Slide 12: Net Interest Income
Net Interest Income +8.3% linked quarter +9.5% year-over-year $ in millions 1 Includes PPP interest income and PPP loan fees Net interest income on a taxable-equivalent basis; see slide 28 for calculation Including PPP Excluding PPP +8.7% linked quarter +12.5% year-over-year $3,164 $3,200 $3,464 Lin
Slide 13: Noninterest Income
Noninterest Income +6.3% linked quarter -2.7% year-over-year Linked Quarter Payment services revenue increased, as credit card revenue increased due to seasonally higher sales volume and rate. Merchant processing services revenue increased due to higher sales volumes and merchant fees. Trust and Inv
Slide 14: Payment Services Fee Revenue Growth
Payment Services Fee Revenue Growth 1 Includes prepaid card
Slide 15: Payments Revenue Breakdown
Merchant Processing Credit and Debit Card1 Corporate Payments All Other Revenue Payment Services Payments Revenue Breakdown Total payments revenue, which includes net interest income and fee revenue, accounted for 27% of 2Q22 net revenue. Total payment fee revenue grew nearly 9.7% year-over-year due
Slide 16: Noninterest Expense
Noninterest Expense +6.3% linked quarter +9.9% year-over-year Linked Quarter Compensation expense increased, due to seasonal merit increases, one additional day in the second quarter, and higher variable compensation, partially offset by the impact of seasonally higher stock-based compensation in th
Slide 17: Capital Position
Capital Position 1 Ratios calculated in accordance with transitional regulatory requirements related to the current expected credit losses methodology 2 Non-GAAP; see slide 30 for calculations
Slide 18: Outlook
1 All guidance for stand alone USB 2 Core guidance excludes notable items for merger and integration charges associated with the planned acquisition of MUFG Union Bank 3 Excludes $197 million of merger and integration-related charges associated with the planned acquisition of MUFG Union Bank Outlook
Slide 19: Union Bank Acquisition Update
Progress What’s Next Integration planning including technology and business line operations largely complete $100 billion community benefits plan announced Participated in numerous stakeholder town-hall meetings Participated in a joint public meeting with the Fed and OCC Continuing to work with regu
Slide 20: Appendix
Appendix
Slide 21: Average Loans
Average Loans Linked Quarter Average total loans increased by $11.2 billion, or 3.6% Average commercial loans increased by $7.8 billion, or 6.9% Average residential mortgage loans increased by $2.8 billion, or 3.6% Average credit card loans increased by $0.9 billion, or 4.1% Year-over-Year Average t
Slide 22: Average Deposits
Key Points Year-over-Year Growth 6.4% 6.4% 6.5% 6.5% 6.4% Time Money Market Checking and Savings Noninterest-bearing Average Deposits Average Deposits ($bn) Linked Quarter Average total deposits increased by $2.3 billion, or 0.5% Average low-cost deposits (NIB, interest checking, savings and money m
Slide 23: Credit Quality – Commercial
Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm2Q21 1Q22 2Q22 Average Loans$102,974 $112,822 $120,657 30-89 Delinquencies0.17% 0.20% 0.20% 90+ Delinquencies0.04% 0.06% 0.07% Nonperforming Loans0.28% 0.15% 0.12% 0.9% (1.1%) 2.6% 8.0% 6.9% Average loans increased by 6.9% on
Slide 24: Credit Quality – Commercial Real Estate
$mm2Q21 1Q22 2Q22 Average Loans$38,564 $39,084 $39,517 30-89 Delinquencies0.08% 0.22%0.06% 90+ Delinquencies0.01%- %0.01% Nonperforming Loans0.80% 0.55% 0.52% Linked Quarter Growth (0.6%) 0.9% (0.2%) 0.6% 1.1% Average loans increased by 1.1% on a linked quarter basis Net charge offs during the quart
Slide 25: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage $mm2Q211Q222Q22 Average Loans$73,351 $77,449 $80,228 30-89 Delinquencies0.24%0.13% 0.12% 90+ Delinquencies0.16% 0.18% 0.12% Nonperforming Loans0.33%0.27%0.27% (2.5%) 1.0% 2.4% 2.1% 3.6% Key Points Average loans increased by 3.6% on a linked quarter basis reflect
Slide 26: Credit Quality – Credit Card
Credit Quality – Credit Card $mm2Q211Q222Q22 Average Loans$21,116 $21,842 $22,748 30-89 Delinquencies0.72% 0.88% 0.84% 90+ Delinquencies0.70%0.74% 0.69% Nonperforming Loans - %- %- % (0.1%) 3.7% 2.3% (2.5%) 4.1% Key Points Linked Quarter Growth Average loans increased by 4.1% on a linked quarter bas
Slide 27: Credit Quality – Other Retail
$mm2Q211Q222Q22 Average Loans$58,279 $61,769$61,037 30-89 Delinquencies0.34%0.38% 0.39% 90+ Delinquencies0.10%0.11% 0.10% Nonperforming Loans0.29%0.26% 0.24% 2.7% 2.9% 1.9% 1.0% (1.2%) Credit Quality – Other Retail Key Points Linked Quarter Growth Average loans decreased by 1.2% on a linked quarter
Slide 28: Non-GAAP Financial Measures
Non-GAAP Financial Measures (1), (2) – see slide 31 for corresponding notes
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures (2), (3) – 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. (3), (4), (5) – see slide 31 for corresponding notes
Slide 31: Notes
Notes Based on a federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes. Notable items for the three months ended June 30, 2022 include $197 million ($153 million after-tax) of merger and integration charges. Inc
Slide 32: us bank
us bank