U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q4 2009 Earnings Presentation
31 slides from U.s. Bancorp's earnings presentation, Jan 20, 2010
Slide 1: U.S. Bancorp 4Q09 Earnings Conference Call
U.S. Bancorp 4Q09 Earnings Conference Call January 20, 2010 Richard K. Davis Chairman, President and CEO Andy Cecere Vice Chairman and CFO
Slide 2: Forward-looking Statements and Additional Information
2 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
Slide 3: 4Q09 Highlights
4Q09 Highlights Net income of $602 million; $.30 per diluted common share Record total net revenue of $4.4 billion Achieved positive operating leverage vs. 4Q08; industry leading efficiency ratio of 49.1% Strong average deposit growth of 25.2% (15.3% excluding acquisitions) and average loan growth o
Slide 4: Performance Ratios
Performance Ratios 4Q08 1Q09 2Q09 3Q09 4Q09 Return on Avg Common Equity 0.053 0.09 0.042 0.1 0.096 Return on Avg Assets 0.0051 0.0081 0.0071 0.009 0.0086 4Q08 1Q09 2Q09 3Q09 4Q09 Efficiency Ratio 0.5 0.458 0.51 0.475 0.491 Net Interest Margin 0.0381 0.0359 0.036 0.0367 0.0383 ROE and ROA Efficiency
Slide 5: Capital Position
Capital Position $ in billions
Slide 6: Loan and Deposit Growth
4Q08 1Q09 2Q09 3Q09 4Q09 Loans 177.2 185.7 183.9 182 191.6 Deposits 144.5 160.5 163.2 166.4 180.9 Loan and Deposit Growth Average Balances Year-Over-Year Growth 4Q09 Acquisition Adjusted Loan Growth = 0.4% Deposit Growth = 15.3% 8.2% $191.6 17.0% $177.2 19.6% $185.7 12.8% $183.9 9.3% $182.0 25.2% $1
Slide 7: Record Revenue
Taxable-equivalent basis 4Q08 1Q09 2Q09 3Q09 4Q09 Reported 3624 3883 4159 4250 4376 Core 3839 3989 4178 4287 4534 Revenue Growth USB Record Revenue 4Q09 Year-Over-Year Core Growth 4.4% 8.0% 8.2% 12.0% 18.1% Reported Core $ in millions
Slide 8: Credit Quality, linked quarter change
3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 NPA $ Change 76 49 155 290 357 489 727 626 386 184 NPA % Change 0.13 0.08 0.22 0.34 0.31 0.33 0.37 0.23 0.12 0.05 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 NCO $ Change 8 26 68 103 102 134 156 141 112 69 NCO % Change 0.041884817 0.130653266 0
Slide 9: Credit Quality - Reserves
Credit Quality - Reserves 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 Allowance 2260 2243 2448 2648 3004 3575 4105 4571 4986 Provision Exceeding NCO's 0 192 200 250 635 530 466 415 278 Provision/NCO's 1 1.66 1.51 1.5 2 1.67 1.5 1.4 1.25 Allowance for Credit Losses Allowance Provision Exceeding NCO'
Slide 10: Credit Quality - Commercial Loans
Credit Quality - Commercial Loans 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 50328 49362 47362 44655 43490 Net Charge-offs Ratio 0.0085 0.0092 0.015 0.0178 0.0228 Average Loans and Net Charge-offs Ratios Key Statistics Comments Corporate loan demand remained weak as evidenced by the declining utilizatio
Slide 11: Credit Quality - Commercial Leases
Credit Quality - Commercial Leases 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 6608 6772 6697 6567 6489 Net Charge-offs Ratio 0.0187 0.0329 0.0329 0.0266 0.0202 Average Loans and Net Charge-offs Ratios Key Statistics Comments Delinquency levels and net charge-offs have declined due to improvement in the
Slide 12: Credit Quality - CRE Mortgages
Credit Quality - CRE Mortgages 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 22967 23553 23875 24296 24895 Net Charge-offs Ratio 0.0024 0.0022 0.0047 0.0049 0.0048 Average Loans and Net Charge-offs Ratios Key Statistics Comments Average loans increased 2.5% on a linked quarter basis and increased 8.4% over
Slide 13: Credit Quality - CRE Construction
Credit Quality - CRE Construction 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 9691 9845 9852 9533 9149 Net Charge-offs Ratio 0.0259 0.0482 0.0379 0.0662 0.0624 Average Loans and Net Charge-offs Ratios Key Statistics Comments Residential construction has declined from $4.7 billion in 3Q07 to $2.3 billion
Slide 14: Credit Quality - Residential Mortgage
4Q08 1Q09 2Q09 3Q09 4Q09 Restructured 813 1129 1289 1338 1354 Credit Quality - Residential Mortgage 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 23430 23915 23964 24405 25621 Net Charge-offs Ratio 0.0143 0.0154 0.0194 0.021 0.0237 Average Loans and Net Charge-offs Ratios Key Statistics Comments Continue t
Slide 15: Credit Quality - Home Equity
Credit Quality - Home Equity 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 18691 19215 19314 19368 19444 Net Charge-offs Ratio 0.0111 0.0148 0.0172 0.0182 0.0196 Average Loans and Net Charge-offs Ratios Key Statistics Comments Demand is weak for home equity products High quality traditional portfolio (bran
Slide 16: Credit Quality - Credit Card
4Q08 3Q09 4Q09 Average Loans 12,976 15,387 16,399 30-89 Delinquencies 2.73% 2.58% 2.38% 90+ Delinquencies 2.20% 2.41% 2.59% Nonperforming 0.50% 0.77% 0.84% Credit Quality - Credit Card 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 12976 13597 14329 15387 16399 Net Charge-offs Ratio 0.0518 0.0632 0.0736 0.0
Slide 17: Credit Quality - Retail Leasing
Credit Quality - Retail Leasing 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 5062 5115 5031 4822 4620 Net Charge-offs Ratio 0.0086 0.0103 0.008 0.0066 0.0043 Average Loans and Net Charge-offs Ratios Key Statistics Comments 30+ delinquency rates continue to improve Improvement in used car prices has signif
Slide 18: Credit Quality - Other Retail
Credit Quality - Other Retail 4Q08 1Q09 2Q09 3Q09 4Q09 Average Loans 22247 22987 22753 22647 23037 Net Charge-offs Ratio 0.017 0.0175 0.018 0.0194 0.0191 Average Loans and Net Charge-offs Ratios Key Statistics Comments Average loans have grown 1.7% linked quarter basis and 3.6% over 4Q08 on strong g
Slide 19: Earnings Summary
Earnings Summary $ in millions Taxable-equivalent basis
Slide 20: 4Q09 Results - Key Drivers
4Q09 Results - Key Drivers vs. 4Q08 Net Revenue growth of 20.8% (16.9% excluding net securities losses) Net interest income growth of 9.2%; net interest margin of 3.83% vs. 3.81% Noninterest income growth of 37.8% (26.7% excluding net securities losses) Significant items: net change of $57 million N
Slide 21: Significant Items
Significant Items $ in millions * The impact of the TARP discount being treated as a deemed dividend does not reduce earnings, but it is a component of the computation of earnings per diluted common share
Slide 22: Net Interest Income
Net Interest Income 4Q08 1Q09 2Q09 3Q09 4Q09 Net Interest Income 2161 2095 2104 2157 2360 Net Interest Margin 0.0381 0.0359 0.036 0.0367 0.0383 Net Interest Income Key Points $ in millions Taxable-equivalent basis vs. 4Q08 Average earning assets grew by $19.4 billion, or 8.6% (2.4% excluding acquisi
Slide 23: Average Earning Assets
Average Earning Assets 4Q08 1Q09 2Q09 3Q09 4Q09 Other 6.807 7.288 8.198 9.585 9.586 Loans 177.205 185.705 183.878 181.968 191.648 Securities 41.974 42.321 42.189 42.558 44.149 Average Earning Assets Key Points $ in billions Year-Over-Year Growth 12.8% 13.7% 10.5% 8.9% 8.6% Securities Loans LHFS and
Slide 24: Average Loans
Average Loans 4Q08 1Q09 2Q09 3Q09 4Q09 Covered 5.205 11.344 10.701 10.288 18.504 Commercial 56.936 56.134 54.059 51.222 49.979 CRE 32.658 33.398 33.727 33.829 34.044 Res Mtg 23.43 23.915 23.964 24.405 25.621 Retail 58.976 60.914 61.427 62.224 63.5 Average Loans Key Points $ in billions Year-Over-Yea
Slide 25: Average Deposits
Average Deposits 4Q08 1Q09 2Q09 3Q09 4Q09 Time 48.697 54.203 48.911 43.951 43.951 Money Market 27.009 27.927 27.25 33.387 33.387 Checking & Savings 37.124 42.378 49.671 52.042 52.042 Noninterest-bearing 31.639 36.02 37.388 36.982 36.982 Average Deposits Key Points $ in billions Year-Over-Year Growth
Slide 26: Noninterest Income
Noninterest Income 4Q08 1Q09 2Q09 3Q09 4Q09 All Other 71 230 346 379 400 Mortgage 23 233 308 276 218 Service Charges 388 363 392 397 370 Trust & Inv Mgmt 300 294 304 293 277 Payment Services 681 668 705 748 751 Noninterest Income Key Points $ in million Year-Over-Year Growth (19.2%) (12.5%) 8.6% 48.
Slide 27: Noninterest Expense
Noninterest Expense 4Q08 1Q09 2Q09 3Q09 4Q09 All Other 446 382 649 500 611 Tech & Communications 156 155 157 175 186 Prof Svcs, Marketing and PPS 240 182 211 272 256 Occupancy & Equip 202 211 208 203 214 Compensation & Benefits 894 941 904 903 961 Noninterest Expense Key Points $ in million Year-Ove
Slide 28: Positioned for Growth Opportunities
Positioned for Growth Opportunities Core businesses continue to perform Solid capital and liquidity position Positioned to capitalize on economic recovery "Flight to Quality" Investing for growth - organic initiatives, M&A and joint ventures USB prepared to opportunistically acquire Core businesses
Slide 29: Appendix
4Q09 Earnings Conference Call LJ Appendix (Sbancorp.
Slide 30: Non-Regulatory Capital Ratios
Non-Regulatory Capital Ratios $ in millions
Slide 31: U.S. Bancorp 4Q09 Earnings Conference Call
U.S. Bancorp 4Q09 Earnings Conference Call January 20, 2010