U.s. Bancorp · NYSE:USB
U.s. Bancorp — Merger or Acquisition (September 2021)
20 slides from U.s. Bancorp's merger presentation, Sep 21, 2021
Slide 1: U.S. Bancorp to Acquire Union Bank from Mitsubishi UFJ Financial Group
ibdroot\projects\IBD-NY\bonelike2021\677634_1\7. Investor Presentation\Presentation\Project Symphony Investor Presentation IR v31.pptx U.S. Bancorp to Acquire Union Bank from Mitsubishi UFJ Financial Group Creating value for all our stakeholders September 21, 2021 U.S. BANCORP
Slide 2: Disclaimer
Disclaimer “Safe Harbor” Statement under 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-looking state
Slide 3: A Strategically and Financially Attractive Acquisition
A Strategically and Financially Attractive Acquisition Opportunity to Creates Improves Increases deploy broad Meaningfully significant returns, share in product set enhances value through accelerates attractive and offer scale expense long-term markets digital synergies growth capabilities Similar c
Slide 4: Acquiring a Well-Established West Coast Franchise
Acquiring a Well-Established West Coast Franchise Established Scaled Positioned Trusted Leader Proven Over 150 years >1MM Consumers #3 non-GSIB California Leading customer service #1 SBA lender in Strong credit of service >190K Business Banking deposit market share & net promoter scores California
Slide 5: Enhancing Scale in Attractive Markets
Enhancing Scale in Attractive Markets Pro Forma Branch Footprint Improves CA deposit market share to #5 from #10 Increases deposits per branch by >60% in California ~80% Union Bank branches are within 3 miles of a USB branch Assets ($B) Deposits ($B) Loans ($B) 19 % 21 % 20 % 664 527 355 559 105 437
Slide 6: Strengthened Footprint in Attractive Growth Markets
Strengthened Footprint in Attractive Growth Markets Los Angeles Bay Area San Diego Population: 13.3 million Population: 6.8 million Population: 3.3 million PF Deposits: $56.2 billion PF Deposits: $21.7 billion PF Deposits: $19.6 billion PF Deposit Rank: #4 PF Deposit Rank: #8 PF Deposit Rank: #3 Med
Slide 7: California: A Large and Growing Banking Opportunity
California: A Large and Growing Banking Opportunity Population Affluent Households² Small Businesses United Large States 328 million 7 million 33 million3 Addressable Client Segments… California Share 12% 12% 13% U.S. Rank #1 #1 #1 …with Strong Growth ~90% of MSAs >10% Annual $33B in Annual Credit E
Slide 8: Deploy Broad Product Set and Digital Capabilities
Deploy Broad Product Set and Digital Capabilities Scale, product breadth, and technology to penetrate… … Large, loyal client base Mobile banking Retail cards Consumer Accounts Consumer & Business Banking Data & analytics Auto finance 1 million Digital mortgage Installment loans Merchan
Slide 9: Financially Compelling
Financially Compelling PRICING COST SYNERGIES CAPITALIZED VALUE OF NET COST SYNERGIES1 1.3x TBV 2% Deposit Premium ~$900MM / ~40% $7.1B EPS ACCRETION2 TBVPS IMPACT3 INTERNAL RATE OF RETURN Synergies realized 75% / 100% Dilution ~1% Earnback Accretion Method Crossover ~6% / ~8% ~0.75 Yrs. ~1.5 Yrs. ~
Slide 10: Transaction Summary
Transaction Summary • U.S. Bancorp to acquire MUFG Union Bank, N.A. Structure • Excludes Global Corporate & Investment Bank, certain middle and back-office functions, and other selected assets • $8.0 billion1 Transaction Value • 7.7x synergized price / earnings multiple2 Consideration / • $5.5 billi
Slide 11: Leveraging A Strong Risk Management Framework
Leveraging A Strong Risk Management Framework Ensuring Sustainable, Consistent, Best-in-Class Returns Through the Cycle Diversified, Complimentary Loan Portfolios… Shared disciplined credit 1% 7% underwriting philosophies 20% 19% 35% 7% $297B $58B 42% Similar strong credit 25% 31% 13% track record o
Slide 12: Comprehensive Due Diligence and Integration Planning
Comprehensive Due Diligence and Integration Planning Focused, Company-Wide Assessment of Benefits, Risks and Opportunities BY THE NUMBERS EXTENSIVE SCOPE Commercial Banking Credit 500+ U.S. Bank employees participated Finance, Accounting, Transaction Banking Tax & Treasury 50+ Outside profession
Slide 13: Financially Attractive Allocation of Capital
Financially Attractive Allocation of Capital Delivering on our Long-Term Stated Objectives Rightsizing Our Capital Stack… …for a Well-Timed Investment… Common Equity Tier 1 Ratio Attractive Relative Price / TBV Multiple 9.9% ~9.0% 9.0% 2.2x 1.3x 8.5% 2Q21A Est. Close Target Range Purchase Multiple¹
Slide 14: A Combination that Benefits all Stakeholders
A Combination that Benefits all Stakeholders Supporting Financial Inclusion Investing in our Communities Creating an Inclusive Workplace Delivers Digital First capabilities Culture rooted in ‘doing the right Preserving and maintaining a values- increasing access and convenience thing’ and supp
Slide 15: A Strategically and Financially Attractive Acquisition
A Strategically and Financially Attractive Acquisition Opportunity to Creates Improves Increases deploy broad Meaningfully significant returns, share in product set enhances value through accelerates attractive and offer scale expense long-term markets digital synergies growth capabilities Similar c
Slide 16: Appendix
Appendix U.S. BANCORP | 16
Slide 17: Deposit Market Share in California
Deposit Market Share in California Top 3 Top 5 Combined Market Deposits Market Deposits Market Deposits The combined Market Rank ($MM) Rank ($MM) Rank ($MM) company will have 1. Los Angeles, CA 9 $ 15,679 5 $ 40,523 4 $ 56,202 #5 deposit market 2. San Diego, CA 7 4,889 4 14,716 3 19,605 share in Cal
Slide 18: Loan and Deposit Composition
Loan and Deposit Composition ($ in billions) Combined Yield: 3.66% Yield: 3.24% 1% Yield: 3.57% 7% 20% 19% 18% 35% 32% $58 Loans $297 $355 6% 7% 42% 31% 25% 28% 13% 16% Commercial CRE Mortgage Credit Card Other Retail Cost: 0.08% Cost: 0.11% Cost: 0.09% 5% 7% 5% 14% 11% 13% 31% 33% 40% $90 $527 Depo
Slide 19: Transaction Assumptions
Transaction Assumptions • USB: projections based on Wall Street consensus estimates Earnings • Union Bank: management estimates, adjusted for carve-out • USB planned share repurchases deferred until the second half of 2022 Capital Actions • Long-term earnings distribution targets unchanged post-clos
Slide 20: Union Bank Acquired Financials
Union Bank Acquired Financials Balance Sheet Income Statement As of June 30, 2021 $B For the Last Twelve Months ended March 31, 2021 $MM Cash and Investments $ 42.3 Total Revenue $ 2,925 Loans Held for Investment 57.7 Non-interest Expense 2,303 Allowance for Credit Losses (0.6) Loans Held for Sale 0
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