U.s. Bancorp · NYSE:USB
U.s. Bancorp — Barclays Americas Select Franchise Conference 2017
40 slides from U.s. Bancorp's conference presentation, May 15, 2017
Slide 1: Barclays Americas Select Franchise Conference 2017
Barclays Americas Select Franchise Conference 2017 May 16, 2017 Andy Cecere Terry Dolan Vice Chairman and CFO President and CEO Exhibit 99.1
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: Agenda
Agenda Overview Strategy and Positioning Financial and Capital Management Returns
Slide 4: U.S. Bancorp Advantaged Position
U.S. Bancorp Advantaged Position As of 3/31/17, except market value as of 5/10/17 NYSE Traded USB Founded 1863 Market Value $88B Assets $450B Deposits $337B Loans $274B
Slide 5: Advantaged Position – Size
Advantaged Position – Size Source: Company reports and Bloomberg Assets and deposits as of 3/31/17, market value as of 5/10/17 Assets Market Value Deposits
Slide 6: Advantaged Position – Profitability
Advantaged Position – Profitability Return on Average Assets Return on Average Common Equity Efficiency Ratio Since 1Q08 2016 Source: Company reports and SNL; Peer banks: BAC, BBT, FITB, JPM, KEY, PNC, RF, STI and WFC * Non-GAAP, see slide 39 for calculation Peer 9 Peer 9
Slide 7: Agenda
Agenda Overview Strategy and Positioning Financial and Capital Management Returns
Slide 8: Our Business Mix and Product Delivery
Our Business Mix and Product Delivery Payment Services Wealth Management & Securities Services Retail Payment Solutions, Global Merchant Acquiring and Corporate Payment Systems Provides a full suite of payment services to consumers, merchants, corporations and governments – a unique position versus
Slide 9: Consumer and Small Business Banking
Consumer and Small Business Banking #1 Branch network in our 25-state footprint #4 SBA lender #6 Mortgage loan originator A broad range of spread and fee revenues 40% of USB’s total revenue Metropolitan Banking 28% Community Banking 24% Mortgage Banking 25% In-store & On-site Banking 6% Other 7% Con
Slide 10: Differentiated Branch Strategy
Differentiated Branch Strategy Metro Community In-store & On-site Larger cities and suburban areas Sales engines Generally smaller footprints Smaller cities and towns Focal point of local community Generational customers Typically larger footprints Convenience-oriented Large transaction volume Servi
Slide 11: Enabled by Big Data
Enabled by Big Data Our NextGen initiative is modernizing banking at all customer touch-points. Optimizing our footprint to better serve our clients and promote future growth
Slide 12: Wholesale Banking
Wholesale Banking 17% of USB’s total revenue Varied mix of revenue sources With a broad product set and deep industry expertise, we offer our clients global capabilities with local presence. Corporate Banking 62% Commercial Banking 18% CRE 20% Branch footprint Major offices est. pre-2007 Major offic
Slide 13: Wholesale Banking
Wholesale Banking Up-tiering client relationships Building out national middle market Fee opportunities complement lending relationships USB serves 90% of Fortune 500 companies and 88% of the Fortune 1,000. We lead with credit, then quickly shift focus to deeper, more profitable relationships. * Inc
Slide 14: Innovation in Wholesale Banking
Innovation in Wholesale Banking Virtual Pay What is a virtual payment solution? Unique single-use 16-digit account number Generated at time of payment Assigned to specific payment or supplier Real-time payments; 24/7 Fastest growing Corporate Payment Systems product Growing ~20% year-over-year Volum
Slide 15: Wealth Management and Securities Services
Wealth Management and Securities Services 12% of USB’s total revenue Wealth Management 35% Corporate Trust 35% Investment Services* 30% We provide a full array of wealth offerings to meet the needs of our clients. A variety of fee and interest income revenue streams $142B in AUM $5.8T in AUA #1 U.S.
Slide 16: Wealth Management
Wealth Management We offer the foundational capabilities to serve our clients’ needs. …and we’re rolling out auto-investing in 2017 Home mortgage Small business Payment solutions Retirement & wealth planning We deliver through three distinct service delivery models…
Slide 17: Securities Services Pivot
Securities Services Pivot We’re innovating to transform the client experience. Solid market share in key market segments with additional opportunities to grow Structured Finance USB USB USB Municipal Trustee Corporate Trustee #1 #1 #2
Slide 18: Growth Through Acquisitions
Growth Through Acquisitions We’ve completed 17 securities services acquisitions in the last 15 years, with more than half of those in Corporate Trust. As banks rationalize, we have further opportunity for European growth. Select Acquisitions State Street (Corporate Trust) Wachovia (Corporate Trust a
Slide 19: Quintillion – High Profile Clients
Quintillion – High Profile Clients
Slide 20: Payment Services
Payment Services Diverse mix of revenue within Payments 31% of USB’s total revenue We provide a full suite of payment services to consumers, merchants, corporations and governments – giving us a differentiated market position. Retail Payment Solutions 62% Global Merchant Acquiring 29% Corporate Paym
Slide 21: Payment Services
Payment Services Focused on verticals where we can add value Top 5 provider for hospitality and healthcare #1 provider for airlines One of few truly pan-European acquirers Android Pay Samsung Pay Apple Pay Dynamic currency conversion
Slide 22: Select International Merchant Customers
Select International Merchant Customers
Slide 23: Innovation in Payments
Innovation in Payments Fintech Fintech Fintech Fintech Fintech Fintech Biometrics & security Blockchain Real-time rewards Artificial intelligence & machine learning Distributed ledger Payments, ecommerce & mobile commerce Financial transaction Data Information Evolution of merchant acquiring… Hospit
Slide 24: The Most Trusted Choice
The Most Trusted Choice Our strength, soundness and commitment to our stakeholders are at the center of everything we do and make us the most trusted choice. World’s Most Admired Superregional Bank – FORTUNE, February 2017 (also annually from 2011 to 2016) Most Trusted Companies for Retail Banking –
Slide 25: One of the World's Most Admired Companies
One of the World’s Most Admired Companies® 1. Walt Disney 1. Walt Disney 1. Walt Disney 1. Walt Disney 2. TJX 2. U.S. Bancorp 2. U.S. Bancorp 2. Microsoft 3. U.S. Bancorp 3. Starbucks 3. Starbucks 3. Alphabet 4. Starbucks 4. TJX 4. Johnson & Johnson 4. Starbucks 5. Nike 5. Johnson & Johnson 5. NextE
Slide 26: Committed to Corporate Social Responsibility
Committed to Corporate Social Responsibility Environmental sustainability $2.6B in environmentally beneficial business opportunities Diversity and inclusion Women make up more than 60% of our workforce Multicultural growth Multicultural customers make up 94% of new population growth in our retail fo
Slide 27: Our Debt Ratings are World Class
Our Debt Ratings are World Class Debt ratings: Holding company as of 5/10/17 * Moody’s Baseline Credit Assessment (BCA) is the issuers’ standalone intrinsic strength, absent any extraordinary support from an affiliate or a government; BCA for U.S. entities is bank level entity rating USB is the high
Slide 28: Agenda
Agenda Overview Strategy and Positioning Financial and Capital Management Returns
Slide 29: Revenue Diversification
Revenue Diversification Revenue by Business Line Consumer and Small Business Banking 40% Payment Services 31% WMSS 12% Wholesale Banking 17% FY2016 taxable-equivalent basis Business line revenue percentages exclude Treasury and Corporate Support, see slide 38 for reconciliation Well Balanced Between
Slide 30: Revenue Growth
Revenue Growth Consumer and Small Business Banking 40% Payment Services 31% WMSS 12% Wholesale Banking 17% Long-term Growth Expectations Consumer and Small Business Banking5-7% Wholesale Banking6-8% Payment Services7-9% Wealth Mgmt. and Securities Services7-9% Long-term Revenue Growth Expectations b
Slide 31: Structurally Efficient
Structurally Efficient Single processing platforms Full consolidation of acquisitions Operating scale in all significant businesses Business line monthly review process Ongoing efficiency efforts Source of Competitive Advantage Source: Company reports; Peer banks: BAC, BBT, FITB, JPM, KEY, PNC, RF,
Slide 32: Risk Management
Risk Management Financial Crisis-Related Settlement Outlays since 2010* * Data from published analysis by SNL Financial, The Wall Street Journal, and other external sources, and includes banks’ 2010-January of 2016 settlements with GSEs; the national mortgage settlements; settlements and fines impos
Slide 33: Capital Management
Capital Management * Based on the Basel III fully implemented standardized approach, see slide 40 for calculation Earnings Distribution Target: Reinvest & Acquisitions Dividends Share Repurchases 20 - 40% 30 - 40% 30 - 40% Hypothetical Earnings Distribution Example Dividends 30% Reinvestment 30% Sha
Slide 34: Sustainability in Earnings and Capital
Sustainability in Earnings and Capital Competitive advantages Diversified business mix Operating scale Efficient platform Flight to quality Sustainability of dividends Source: Company filings and SNL Financial, Federal Reserve estimates under the supervisory severely adverse scenario
Slide 35: Agenda
Agenda Overview Strategy and Positioning Financial and Capital Management Returns
Slide 36: Returns
Returns * Non-GAAP, see slide 39 for calculation Source: Company reports, SNL and Bloomberg Peer banks: BAC, BBT, FITB, JPM, KEY, PNC, RF, STI and WFC; Large European banks: BARC, HSBA, ACA, BNP, SAN Long-term Expectations Return on Assets 1.35-1.65% Return on Equity 13.5-16.5% Return on Tangible Co
Slide 37: Appendix
| Appendix U.S, BANCORP | 37
Slide 38: Non-GAAP Financial Measures
Non-GAAP Financial Measures
Slide 39: Non-GAAP Financial Measures
Non-GAAP Financial Measures (1) Utilizes a tax rate of 35 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes (Dollars in Millions, Unaudited) Net interest income $11,528 $93,550 Taxable-equivalent adjustment (1) 203 1,902 Net interest inc
Slide 40: Non-GAAP Financial Measures
Non-GAAP Financial Measures (1) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements. (2) Includes net losses on cash flow hedges included in accumulated other comprehensive income (loss) and other adjustments. (3) Includes
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