U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q3 2018 Earnings Presentation
27 slides from U.s. Bancorp's earnings presentation, Oct 17, 2018
Slide 1: U.S. Bancorp 3Q18 Earnings Conference Call
U.S. Bancorp 3Q18 Earnings Conference Call October 17, 2018 Exhibit 99.2
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: 3Q18 Highlights
3Q18 Highlights * Taxable-equivalent basis; see slide 26 for calculation ** Excluding the impact of student loans sold in 2Q18, average total loans grew 0.9 percent linked quarter and 1.8 percent year-over-year
Slide 4: Performance Ratios
Performance Ratios Efficiency Ratio* & Net Interest Margin** * Non-GAAP; see slides 25 and 26 for calculations ** Taxable-equivalent basis Return on Average Common Equity Return on Tangible Common Equity* Return on Average Assets
Slide 5: Average Loans
Average Loans +0.9% linked quarter +1.2% year-over-year On both a linked quarter and year-over-year basis, growth in average total loans was driven by growth in residential mortgages, commercial loans, credit card loans and retail leasing. On both a linked quarter and year-over-year basis, growth in
Slide 6: Average Deposits
Average Deposits -1.4% linked quarter -1.5% year-over-year $ in billions Rates are presented on a fully taxable-equivalent basis based on a federal income tax rate of 21 percent for 2018 and 35 percent for 2017 Interest-bearing Deposits Average noninterest-bearing deposits decreased 2.3 percent link
Slide 7: Credit Quality
Credit Quality $ in millions NCO Ratio -2 bps QoQ -1 bp YoY NPAs -8.0% QoQ -19.7% YoY
Slide 8: Earnings Summary
Earnings Summary $ and shares in milions, except EPS Reported % Change 318-2018 =~ 3Q17 vs.2Q18 vs. Ea Net Interest Income $3,251 $3,197 $3,176 : Taxable- carvan neuen 30 29 51 34 “i a Net interest In (ta vable-aqutelontbesis) 3,281 3,226 3,227 17 17 Noninterest Income 2418 2414 2,340 02 33 Net Reve
Slide 9: Net Interest Income
Net Interest Income Linked Quarter Net interest income growth was primarily driven by the impact of higher interest rates, earning asset growth and an additional day in the quarter, partially offset by deposit and funding mix shift. The increase in net interest margin was primarily due to the impact
Slide 10: Noninterest Income
Noninterest Income $ in millions Payments = credit and debit card, corporate payment products and merchant processing Service charges = deposit service charges, treasury management and ATM processing All other = commercial products, investment products fees, securities gains (losses) and other $2,34
Slide 11: Noninterest Expense
Noninterest Expense Linked Quarter Noninterest expense decreased primarily due to a reduction in compensation expense including lower incentives and a seasonal decline in labor costs. Other noninterest expense declined as a result of lower costs related to tax-advantaged projects and the change in a
Slide 12: Capital Position
Capital Position * See Non-GAAP Financial Measures reconciliation on slide 24
Slide 13: Appendix
Appendix
Slide 14: Average Loans vs. 3Q17
Average Loans vs. 3Q17 Average total loans increased by $3.4 billion, or 1.2% Average residential mortgage loans increased by $3.0 billion, or 5.1% Average commercial loans increased by $2.4 billion, or 2.5% Average commercial real estate loans decreased by $2.1 billion, or 5.0% vs. 2Q18 Average tot
Slide 15: Average Deposits
Average Deposits Key Points Average Deposits ($bn) vs. 3Q17 Average total deposits decreased by $5.0 billion, or 1.5% Average low-cost deposits (NIB, interest checking, savings and money market) declined $6.7 billion, or 2.2% vs. 2Q18 Average total deposits decreased by $4.7 billion, or 1.4% Average
Slide 16: Credit Quality – Commercial Loans
Credit Quality – Commercial Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm3Q172Q183Q18 Average Loans$96,633$98,353$99,048 30-89 Delinquencies0.22%0.23%0.23% 90+ Delinquencies0.05%0.06%0.06% Nonperforming Loans0.28%0.23%0.22% Linked Quarter Growth 1.0% 1.0% (0.1%) 0
Slide 17: Credit Quality – Commercial Real Estate
Investor $18,283 Owner Occupied $10,079 A&D Const $302 Multi-family $4,015 Retail $409 Residential Construction $2,110 Office $955 Other $2,722 Resi Land $667 $mm3Q172Q183Q18 Average Loans$41,621$39,857$39,542 30-89 Delinquencies0.15%0.11%0.08% 90+ Delinquencies0.01%0.01%0.01% Nonperforming Loans0.2
Slide 18: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm3Q172Q183Q18 Average Loans$59,030$60,834$62,042 30-89 Delinquencies0.26%0.27%0.27% 90+ Delinquencies0.18%0.18%0.19% Nonperforming Loans0.80%0.65%0.50% * Excludes GNMA loans, whose repayme
Slide 19: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm3Q172Q183Q18 Average Loans$20,926$21,220$21,774 30-89 Delinquencies1.42%1.22%1.42% 90+ Delinquencies1.20%1.15%1.18% Nonperforming Loans0.00%0.00%0.00% Linked Quarter Growth 1.4% 1.4% 0.3% (0.3%) 2
Slide 20: Credit Quality – Home Equity
Credit Quality – Home Equity Average Loans ($mm) and Net Charge-offs Ratio Key Points Key Statistics $mm3Q172Q183Q18 Average Loans$16,299$16,048$16,000 30-89 Delinquencies0.38%0.39%0.45% 90+ Delinquencies0.24%0.29%0.32% Nonperforming Loans0.75%0.81%0.78% Subprime: 1% Wtd Avg LTV*: 87% NCO: 0.0% Prim
Slide 21: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm3Q172Q183Q18 Average Loans$7,762$8,150$8,383 30-89 Delinquencies0.31%0.30%0.38% 90+ Delinquencies0.03%0.02%0.02% Nonperforming Loans0.09%0.12%0.13% * Manheim Used Vehicle Value Index source: ww
Slide 22: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm3Q172Q183Q18 Average Loans$32,008$31,265$31,520 30-89 Delinquencies0.75%0.75%0.83% 90+ Delinquencies0.13%0.13%0.14% Nonperforming Loans0.10%0.12%0.12% Linked Quarter Growth 2.6% 2.6% 0.1% (4.9%)
Slide 23: Credit Quality – Auto Loans
Credit Quality – Auto Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm3Q172Q183Q18 Average Loans$18,008$18,599$18,563 30-89 Delinquencies0.89%0.90%1.00% 90+ Delinquencies0.08%0.08%0.08% Nonperforming Loans0.11%0.13%0.14% Direct: 5% Wtd Avg FICO: 747 NCO: 0.06% Indire
Slide 24: Non-GAAP Financial Measures
Non-GAAP Financial Measures * Preliminary data. Subject to change prior to filings with applicable regulatory agencies. (1) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements.
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures (1) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements.
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures (1) Interest and rates are presented on a fully taxable-equivalent basis based on a federal income tax rate of 21 percent for 2018 and 35 percent for 2017.
Slide 27: U.S. Bancorp 3Q18 Earnings Conference Call
U.S. Bancorp 3Q18 Earnings Conference Call October 17, 2018