30 slides from U.s. Bancorp's earnings presentation, Oct 22, 2014
Slide 1: U.S. Bancorp 3Q14 Earnings Conference Call
Exhibit 99.2 U.S. Bancorp 3Q14 Earnings Conference Call Richard K. Davis Chairman, President and CEO Andy Cecere October 22, 2014 Vice Chairman and CFO
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: 3Q14 Highlights
3Q14 Earnings 3Q14 Highlights Conference Call Net income of $1.5 billion; $0.78 per diluted common share Positive operating leverage on a year-over-year basis Average loan growth of 6.3% vs. 3Q13 (5.9% excluding Charter One acquisition) and 1.4% vs. 2Q14 (1.1% excluding Charter One acquisition) Aver
Slide 4: Performance Ratios
3Q14 Earnings Performance Ratios Conference Call Return on Average Common Equity Efficiency Ratio and and Return on Average Assets Net Interest Margin Return on Avg Common Equity Return on Avg Assets Efficiency Ratio Net Interest Margin * Excluding $214 million gain on Visa Inc. Class B commonstock
Slide 5: Revenue Growth
3Q14 Earnings Revenue Growth Conference Call $ in millions Year-Over-Year Change (5.6%) (4.4%) (1.2%) 4.9% 2.0% * Gain on Visa Inc. Class B common stock sale 5 Taxable-equivalent basis
Slide 6: Loan and Deposit Growth
3Q14 Earnings Loan and Deposit Growth Conference Call $ in billions 3Q14 Acquisition Adjusted Year-Over-Year Growth Loan Growth = 5.9% Deposit Growth = 5.5% Average Balances 7.4% $271.0 270.0 6.0% 5.4% 5.1% $262.4 5.5% $256.9 $257.5 $252.4 250.0 6.3% 6.8% $243.9 6.0% $240.5 5.7% $235.9 5.7% $232.8 $
Slide 7: Credit Quality
3Q14 Earnings Credit Quality Conference Call $ in millions Net Charge-offs Nonperforming Assets* Net Charge-offs (Left Scale) Nonperforming Assets (Left Scale) NCOs to Avg Loans (Right Scale) NPAs to Loans plus ORE (Right Scale) 7 * Excluding Covered Assets (assets subject to loss sharing agreements
Slide 8: Earnings Summary
3Q14 Earnings Earnings Summary Conference Call $ in millions, except per-share data % B/(W) YTD YTD 3Q14 2Q14 3Q13 vs 2Q14 vs 3Q13 2014 2013 % B/(W) Net Interest Income $ 2,748 $ 2,744 $ 2,714 0.1 1.3 $ 8,198 $ 8,095 1.3 Noninterest Income 2,242 2,444 2,177 (8.3) 3.0 6,794 6,618 2.7 Total Revenue 4,
Slide 9: 3Q14 Results - Key Drivers
3Q14 Earnings 3Q14 Results - Key Drivers Conference Call vs. 3Q13 Net Revenue increase of 2.0% • Net interest income increase of 1.3%; net interest margin of 3.16% vs. 3.43% in 3Q13 • Noninterest income increase of 3.0% Noninterest expense increase of 1.9% Provision for credit losses higher by $13 m
Slide 10: Capital Position
3Q14 Earnings Capital Position Conference Call 3Q14 2Q14 1Q14 4Q13 3Q13 Total U.S. Bancorp shareholders' equity $ 43.1 $ 42.7 $ 42.1 $ 41.1 $ 40.1 Standardized Approach Basel III transitional standardized approach/Basel I (a) Common equity tier 1 capital 30.2 29.8 29.5 27.9 27.3 Tier 1 capital 35.4
Slide 11: 3Q14 Earnings Conference Call
3Q14 Earnings Conference Call 11
Slide 12: Appendix
3Q14 Earnings Conference Call Appendix 12
Slide 13: Average Loans
3Q14 Earnings Average Loans Conference Call $ in billions Average Loans Key Points Year-Over-Year Growth vs. 3Q13 5.7% 5.7% 6.0% 6.8% 6.3% Average total loans grew by $14.5 billion, or 6.3% (5.9% excluding Charter One acquisition) $232.8 $235.9 $240.5 $243.9 Average total loans, excluding covered lo
Slide 14: Average Deposits
3Q14 Earnings Average Deposits Conference Call $ in billions Average Deposits Key Points Year-Over-Year Growth vs. 3Q13 5.5% 5.4% 5.1% 6.0% 7.4% Average total deposits increased by $18.6 billion, or 7.4% (5.5% excluding Charter One acquisition) $257.5 $262.4 $271.0 $252.4 $256.9 Average low-cost dep
Slide 15: Net Interest Income
3Q14 Earnings Net Interest Income Conference Call $ in millions Net Interest Income Key Points Year-Over-Year Change vs. 3Q13 (2.5%) (1.8%) (0.1%) 2.7% 1.3% Average earning assets grew by $31.4 billion, or 10.0% Net interest margin lower by 27 bps (3.16% vs. 3.43%) driven by: • Lower reinvestment ra
Slide 16: Noninterest Income
3Q14 Earnings Noninterest Income Conference Call $ in millions Noninterest Income Key Points vs. 3Q13 Year-Over-Year Change Noninterest income increased by $65 million, or (9.1%) (7.4%) (2.6%) 7.4% 3.0% 3.0%, driven by: • Higher credit and debit card revenues (2.9% increase) due to higher transactio
Slide 17: Noninterest Expense
3Q14 Earnings Noninterest Expense Conference Call $ in millions Noninterest Expense Key Points vs. 3Q13 Year-Over-Year Change Noninterest expense was higher by $49 million, or (1.7%) (0.1%) 3.0% 7.7% 1.9% 1.9%, driven by: • Higher compensation expense (4.0% increase) reflecting the impact of merit i
Slide 18: Credit Quality - Commercial Loans
3Q14 Earnings Credit Quality - Commercial Loans Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q13 2Q14 3Q14 Average Loans $62,856 $69,920 $72,190 30-89 Delinquencies 0.28% 0.23% 0.23% 90+ Delinquencies 0.08% 0.06% 0.05% Nonperforming Loans 0.16% 0.24% 0.22% C
Slide 19: Credit Quality - Commercial Leases
3Q14 Earnings Credit Quality - Commercial Leases Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q13 2Q14 3Q14 Average Loans $5,208 $5,100 $5,155 30-89 Delinquencies 0.76% 0.75% 0.83% 90+ Delinquencies 0.00% 0.00% 0.00% Nonperforming Loans 0.23% 0.31% 0.23% Com
Slide 20: Credit Quality - Commercial Real Estate
3Q14 Earnings Credit Quality - Commercial Real Estate Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q13 2Q14 3Q14 Average Loans $38,501 $40,497 $40,839 30-89 Delinquencies 0.16% 0.14% 0.12% 90+ Delinquencies 0.02% 0.06% 0.03% Nonperforming Loans 0.92% 0.55% 0
Slide 21: Credit Quality - Residential Mortgage
3Q14 Earnings Credit Quality - Residential Mortgage Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q13 2Q14 3Q14 Average Loans $49,139 $51,815 $51,994 30-89 Delinquencies 0.70% 0.48% 0.46% 90+ Delinquencies 0.53% 0.49% 0.41% Nonperforming Loans 1.46% 1.57% 1.6
Slide 22: Credit Quality - Credit Card
3Q14 Earnings Credit Quality - Credit Card Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q13 2Q14 3Q14 Average Loans $16,931 $17,384 $17,753 30-89 Delinquencies 1.25% 1.13% 1.23% 90+ Delinquencies 1.11% 1.06% 1.10% Nonperforming Loans 0.55% 0.29% 0.22% Commen
Slide 23: Credit Quality - Home Equity
3Q14 Earnings Credit Quality - Home Equity Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q13 2Q14 3Q14 Average Loans $15,648 $15,327 $15,704 30-89 Delinquencies 0.65% 0.50% 0.51% 90+ Delinquencies 0.25% 0.26% 0.26% Nonperforming Loans 1.15% 1.11% 1.05% Subpri
Slide 24: Credit Quality - Retail Leasing
3Q14 Earnings Credit Quality - Retail Leasing Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q13 2Q14 3Q14 Average Loans $5,664 $6,014 $5,991 30-89 Delinquencies 0.15% 0.16% 0.14% 90+ Delinquencies 0.02% 0.00% 0.02% Nonperforming Loans 0.02% 0.02% 0.02% Commen
Slide 25: Credit Quality - Other Retail
3Q14 Earnings Credit Quality - Other Retail Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q13 2Q14 3Q14 Average Loans $25,682 $26,587 $27,003 30-89 Delinquencies 0.48% 0.47% 0.49% 90+ Delinquencies 0.14% 0.11% 0.13% Nonperforming Loans 0.10% 0.06% 0.06% Auto
Slide 26: Credit Quality - Auto Loans
3Q14 Earnings Credit Quality - Auto Loans Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q13 2Q14 3Q14 Average Loans $12,946 $14,108 $14,404 30-89 Delinquencies 0.30% 0.38% 0.41% 90+ Delinquencies 0.03% 0.03% 0.05% Nonperforming Loans 0.02% 0.01% 0.03% Indirec
Slide 27: Mortgage Repurchase
3Q14 Earnings Mortgage Repurchase Conference Call Mortgages Repurchased and Make-whole Payments Repurchase activity lower than Mortgage Representation and Warranties Reserve peers due to: $ in millions 3Q14 2Q14 1Q14 4Q13 3Q13 • Conservative credit and Beginning Reserve $69 $75 $83 $176 $190 underwr
Slide 28: Non-GAAP Financial Measures
3Q14 Earnings Non-GAAP Financial Measures Conference Call $ in millions 3Q14 2Q14 1Q14 4Q13 3Q13 Total equity $ 43,829 $ 43,386 $ 42,743 $ 41,807 $ 41,552 Preferred stock (4,756) (4,756) (4,756) (4,756) (4,756) Noncontrolling interests (688) (686) (689) (694) (1,420) Goodwill (net of deferred tax li
Slide 29: Non-GAAP Financial Measures
3Q14 Earnings Non-GAAP Financial Measures Conference Call $ in millions 3Q14 2Q14 1Q14 4Q13 3Q13 Total assets $ 391,284 $ 389,065 $ 371,289 $ 364,021 $ 360,681 Goodwill (net of deferred tax liability) (1) (8,503) (8,548) (8,352) (8,343) (8,319) Intangible assets, other than mortgage servicing rights
Slide 30: U.S. Bancorp 3Q14 Earnings Conference Call
U.S. Bancorp 3Q14 Earnings Conference Call October 22, 2014