U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q1 2019 Earnings Presentation
29 slides from U.s. Bancorp's earnings presentation, Apr 17, 2019
Slide 1: U.S. Bancorp 1Q19 Earnings Conference Call
U.S. Bancorp 1Q19 Earnings Conference Call April 17, 2019 U.S. BANCORP
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: 1Q19 Highlights
1Q19 Highlights Income Statement change vs. Credit Quality change vs. $ in millions, except EPS 1Q19 4Q18 1Q18 $ in millions 1Q19 4Q18 1Q18 Net interest income* $3,286 (1.4) % 2.8 % Nonperforming assets $1,005 1.6 % (16.5) % Noninterest income 2,291 (8.3) 0.8 NPA ratio 0.35% 1 bp (8 bps) Reported ne
Slide 4: Performance Ratios
Performance Ratios Return on Return on Return on Efficiency Ratio** & Average Assets Average Common Equity Tangible Common Equity** Net Interest Margin 1.59% 15.8% 20.2% 1.50% 14.9% 19.3% 56.3% 1.49% 14.3% 18.4% 55.9% 55.4% 1.55%* 15.4%* 19.7%* 54.0%* 3.13% 3.15% 3.16% 1Q18 4Q18 1Q19 1Q18 4Q18 1Q19
Slide 5: Average Loans
Average Loans Change vs. $283.7 $286.1 (Three months ended 3/31/19) Avg. Balances 4Q18 1Q18 $279.4 Commercial $101.9 1.4 % 4.6 % Commercial Real Estate 39.5 (1.7) (2.2) Residential Mortgages 65.6 1.7 9.0 Credit Card 22.6 0.9 6.2 Retail 56.5 0.6 (1.0) Covered - - nm Total loans $286.1 0.9 % 2.4 % Tot
Slide 6: Average Deposits
Average Deposits Interest-bearing Deposits Average Change vs. Change $334.6 $334.4 $335.4 (Three months ended 3/31/19) Balances 4Q18 1Q18 Rates vs. 4Q18 Money market savings $99.4 (0.2) % (3.8) % 1.53 % 0.20 % Interest checking 72.2 1.6 2.6 0.35 0.04 Savings accounts 45.2 1.5 1.9 0.21 0.03 Time depo
Slide 7: Credit Quality
Credit Quality Net Charge-offs Nonperforming Assets $367 $1,204 $353 $341 NCO Ratio NPAs $989 $1,005 +3 bps QoQ +1.6% QoQ 0.49% 0.49% 0.52% +3 bps YoY 0.43% 0.34% 0.35% -16.5% YoY 1Q18 4Q18 1Q19 1Q18 4Q18 1Q19 NCOs NCOs/Avg Loans NPAs NPAs/Period-end Loans plus OREO Provision for Credit Losses $15 $
Slide 8: Earnings Summary
Earnings Summary $ and shares in millions, except EPS Reported % Change 1Q19 4Q18 1Q18 vs. 4Q18 vs. 1Q18 Net Interest Income $3,259 $3,303 $3,168 (1.3) 2.9 Taxable-equivalent Adjustment 27 28 29 (3.6) (6.9) Net Interest Income (taxable-equivalent basis) 3,286 3,331 3,197 (1.4) 2.8 Noninterest Income
Slide 9: Net Interest Income
Net Interest Income $3,331 $3,286 $3,197 Linked Quarter • Net interest income decreased, primarily driven by two fewer days in the quarter and lower interest recoveries, partially offset by loan growth. • Net interest margin expansion was driven by loan portfolio mix, lower cash balances and the imp
Slide 10: Noninterest Income
Noninterest Income $2,498 Linked Quarter $2,272 $171 $2,291 • The decline in payment services revenue reflects seasonally lower $184 $169 sales across all business segments and fewer billing cycle $409 $399 processing days within the credit and debit card business. $398 $396 • Service charges revenu
Slide 11: Noninterest Expense
Noninterest Expense $3,280 Linked Quarter $3,055 $254 $3,087 $235 $266 $257 • Costs related to tax-advantaged projects and professional $265 $277 services were seasonably lower. $328 $260 $256 • The decrease in marketing and business development expense $442 $556 $405 was driven by the timing of cer
Slide 12: Capital Position
Capital Position $ in billions 1Q19 4Q18 3Q18 2Q18 1Q18 Total U.S. Bancorp shareholders' equity $52.1 $51.0 $50.4 $49.6 $49.2 Basel III Standardized Approach Common equity tier 1 capital ratio 9.3% 9.1% 9.0% 9.1% 9.0% Tier 1 capital ratio 10.9% 10.7% 10.6% 10.5% 10.4% Total risk-based capital ratio
Slide 13: Digital Engagement Trends
Digital Engagement Trends Transactions (% of Total) 80% 65% 67% 63% Digital Active Customers 60% (% of Total Active Customers)* 37% 35% 40% 33% 80% 70% 71% 20% 66% 0% 60% Three months ended 53% 54% 52% 2/28/17 2/28/18 2/28/19 48% 43% Total Digital Branch, ATM, Phone and IVR 40% 40% Loan Sales (% of
Slide 14: Appendix
Appendix U.S. BANCORP | 14
Slide 15: Average Loans
Average Loans Average Loans ($bn) Key Points vs. 1Q18 Year-over-Year Growth • Average total loans increased by $6.7 billion, or 2.4% 2.3% 1.1% 1.2% 1.4% 2.4% • Average residential mortgage loans increased by $5.4 billion, or 9.0% $279.4 $278.6 $281.1 $283.7 $286.1 • Average commercial loans increase
Slide 16: Average Deposits
Average Deposits Average Deposits ($bn) Key Points Year-over-Year Growth vs. 1Q18 1.9% 1.1% (1.5%) (1.4%) 0.2% • Average total deposits increased by $0.8 billion, or 0.2% $334.6 $334.8 $330.1 $335.4 $334.4 • Average low-cost deposits (NIB, interest (1.6%) (4.5%) (6.2%) (7.6%) checking, savings and m
Slide 17: Credit Quality – Commercial
Credit Quality – Commercial Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q18 4Q18 1Q19 Average Loans $97,465 $100,515 $101,960 (0.1%) 0.9% 0.7% 1.5% 1.4% 30-89 Delinquencies 0.25% 0.31% 0.58% $99,048 $100,515 $101,960 90+ Delinquencies 0.06% 0.07% 0.07% $97
Slide 18: Credit Quality – Commercial Real Estate
Credit Quality – Commercial Real Estate Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 1Q18 4Q18 1Q19 Linked Quarter Growth Average Loans $40,366 $40,149 $39,470 (1.6%) (1.3%) (0.8%) 1.5% (1.7%) 30-89 Delinquencies 0.09% 0.18% 0.11% 90+ Delinquencies 0.01% 0.00% 0.01% $40,366 $39,8
Slide 19: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q18 4Q18 1Q19 Average Loans $60,174 $64,476 $65,582 0.9% 1.1% 2.0% 3.9% 1.7% 30-89 Delinquencies 0.24% 0.27% 0.26% $65,582 90+ Delinquencies 0.22% 0.18% 0.18% $62,042 $64,476
Slide 20: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q18 4Q18 1Q19 Average Loans $21,284 $22,396 $22,597 0.3% (0.3%) 2.6% 2.9% 0.9% 30-89 Delinquencies 1.32% 1.39% 1.31% $22,396 $22,597 90+ Delinquencies 1.29% 1.25% 1.29% $21,284 $21,22
Slide 21: Credit Quality – Home Equity
Credit Quality – Home Equity Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q18 4Q18 1Q19 Average Loans $16,195 $16,065 $15,993 (0.6%) (0.9%) (0.3%) 0.4% (0.4%) 30-89 Delinquencies 0.41% 0.56% 0.54% $16,195 $16,048 $16,000 $16,065 $15,993 90+ Delinquencies 0.
Slide 22: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q18 4Q18 1Q19 Average Loans $7,982 $8,489 $8,586 0.0% 2.1% 2.9% 1.3% 1.1% 30-89 Delinquencies 0.34% 0.43% 0.42% 90+ Delinquencies 0.02% 0.04% 0.03% $8,383 $8,489 $8,586 Nonperformi
Slide 23: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q18 4Q18 1Q19 Average Loans $32,874 $31,587 $31,922 0.1% (4.9%) 0.8% 0.2% 1.1% 30-89 Delinquencies 0.73% 0.87% 0.78% $32,874 $31,922 90+ Delinquencies 0.15% 0.15% 0.14% $31,265 $31,5
Slide 24: Credit Quality – Auto Loans
Credit Quality – Auto Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 1Q18 4Q18 1Q19 Average Loans $18,868 $18,500 $18,833 0.6% (1.4%) (0.2%) (0.3%) 1.8% 30-89 Delinquencies 0.85% 1.04% 0.95% $18,868 $18,599 $18,563 $18,833 90+ Delinquencies 0.08% 0.09% 0
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures March 31, December 31, September 30, June 30, March 31, (Dollars in Millions, Unaudited) 2019 2018 2018 2018 2018 Total equity $52,686 $51,657 $51,007 $50,257 $49,812 Preferred stock (5,984) (5,984) (5,984) (5,419) (5,419) Noncontrolling interests (629) (628) (632) (629)
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures (Dollars in Millions, Unaudited) Three Months Ended March 31, December 31, March 31, 2019 2018 2018 Net interest income $3,259 $3,303 $3,168 Taxable-equivalent adjustment (2) 27 28 29 Net interest income, on a taxable-equivalent basis 3,286 3,331 3,197 Net interest income
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended March 31, December 31, March 31, (Dollars in Millions, Unaudited) 2019 2018 2018 Net income applicable to U.S. Bancorp common shareholders $1,613 $1,777 $1,597 Intangibles amortization (net-of-tax) 32 32 31 Net income applicable to U.S. Bancorp common s
Slide 28: Notes
Notes (1) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements. (2) Based on a federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes. (
Slide 29: U.S. Bancorp 1Q19 Earnings Conference Call
U.S. Bancorp 1Q19 Earnings Conference Call April 17, 2019 U.S. BANCORP