32 slides from U.s. Bancorp's earnings presentation, Oct 19, 2011
Slide 1: U.S. Bancorp 3Q11 Earnings Conference Call
Exhibit 99.2 U.S. Bancorp 3Q11 Earnings Conference Call Richard K. Davis Chairman, President and CEO Andy Cecere October 19, 2011 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: 3Q11 Highlights
3Q11 Earnings 3Q11 Highlights Conference Call Record net income of $1.3 billion; $0.64 per diluted common share Record total net revenue of $4.8 billion, up 4.5% vs. 3Q10 • Net interest income growth of 5.9% vs. 3Q10 • Noninterest income growth of 2.9% vs. 3Q10 Average loan growth of 5.0% (4.5% excl
Slide 4: Performance Ratios
3Q11 Earnings Performance Ratios Conference Call Efficiency Ratio and ROCE and ROA Net Interest Margin 20% 4% 70% 5% 15.9% 16.1% 3.91% 3.83% 14.5% 13.7% 3.69% 3.67% 3.65% 15% 3% 60% 4% 12.8% 10% 2% 50% 3% 51.9% 52.5% 51.5% 51.1% 51.6% 1.38% 1.54% 1.57% 5% 1.26% 1.31% 1% 40% 2% 0% 0% 30% 1% 3Q10 4Q10
Slide 5: Capital Position
3Q11 Earnings Capital Position Conference Call $ in billions 3Q11 2Q11 1Q11 4Q10 3Q10 Shareholders' equity $ 33.2 $ 32.5 $ 30.5 $ 29.5 $ 29.2 Tier 1 capital 28.1 27.8 26.8 25.9 24.9 Total risk-based capital 35.4 35.1 34.2 33.0 32.3 Tier 1 common equity ratio 8.5% 8.4% 8.2% 7.8% 7.6% Tier 1 capital r
Slide 6: Loan and Deposit Growth
3Q11 Earnings Loan and Deposit Growth Conference Call $ in billions Average Balances 3Q11 Acquisition Adjusted Year-Over-Year Growth Loan Growth = 4.5% Deposit Growth = 13.2% 230 17.9% 14.2% 11.9% $215.4 5.0% 2.4% 4.0% $209.4 210 2.0% $204.3 5.8% $202.2 5.2% $197.6 $198.8 $192.5 9.8% $195.5 $190.3 1
Slide 7: Revenue Growth
3Q11 Earnings Revenue Growth Conference Call $ in millions Year-Over-Year Growth 7.9% 7.9% 4.6% 3.8% 4.5% 5,000 4,795 4,721 4,690 4,587 4,519 4,500 4,000 3,500 3,000 3Q10 4Q10 1Q11 2Q11 3Q11 Taxable-equivalent basis 7
Slide 8: Credit Quality
3Q11 Earnings Credit Quality Conference Call Change in Net Charge-offs Change in Nonperforming Assets* 160 40% 800 37% 40% 35% 34% 33% 30% 31% 26% 27% 25% 22% 23% 18% 80 20% 400 20% 12% 12% 7% 5% 2% 2% -2% 0 0% 0 -5% -6% -5% 0% 68 103 102 134 156 141 112 69 25 -6% -7% 155 290 357 489 727 626 386 184
Slide 9: Credit Quality - Outlook
3Q11 Earnings Credit Quality - Outlook Conference Call The Company expects the level of Net Charge-offs and Nonperforming Assets to trend lower during 4Q11 Delinquencies* Changes in Criticized Assets* 2.0% 40.0% 36% 1.70% 1.62% 28% 1.45% 1.48% 23% 1.44% 1.5% 1.34% 20.0% 18% 16% 1.18% 1.11% 1.06%1.04
Slide 10: Credit Quality - Reserves
3Q11 Earnings Credit Quality - Reserves Conference Call $ in millions Allowance for Credit Losses 6,000 200% 200% 166% 167% 4,500 165% 151% 150% 150% 140% 125% 3,000 130% 115% 102% 100% 100% 97% 94% 1,500 95% 77% 78% 2,260 2,435 2,648 2,898 3,639 4,105 4,571 4,986 5,264 5,439 5,536 5,540 5,531 5,498
Slide 11: Earnings Summary
3Q11 Earnings Earnings Summary Conference Call $ in millions, except per-share data % B/(W) YTD YTD 3Q11 2Q11 3Q10 vs 2Q11 vs 3Q10 2011 2010 % B/(W) Net Interest Income $ 2,624 $ 2,544 $ 2,477 3.1 5.9 $ 7,675 $ 7,289 5.3 Noninterest Income 2,171 2,146 2,110 1.2 2.9 6,329 6,138 3.1 Total Revenue 4,79
Slide 12: 3Q11 Results - Key Drivers
3Q11 Earnings 3Q11 Results - Key Drivers Conference Call vs. 3Q10 Net Revenue growth of 4.5% • Net interest income growth of 5.9%; net interest margin of 3.65% vs. 3.91% • Noninterest income growth of 2.9% Noninterest expense growth of 3.8% Provision for credit losses lower by $476 million • Net cha
Slide 13: Net Interest Income
3Q11 Earnings Net Interest Income Conference Call $ in millions Net Interest Income Key Points Year-Over-Year Growth vs. 3Q10 14.8% 5.9% 4.3% 5.6% 5.9% Average earning assets grew by $34.4 billion, or 13.6% (13.2% excluding acquisitions) 2,700 2,624 6.0% 2,544 2,477 2,499 2,507 Net interest margin l
Slide 14: Average Loans
3Q11 Earnings Average Loans Conference Call $ in billions Average Loans Key Points Year-Over-Year Growth vs. 3Q10 5.8% 2.0% 2.4% 4.0% 5.0% Average total loans grew by $9.7 billion, or 5.0% (4.5% excluding acquisitions) 240 $192.5 $195.5 $197.6 $198.8 $202.2 Average total loans, excluding covered loa
Slide 15: Average Deposits
3Q11 Earnings Average Deposits Conference Call $ in billions Average Deposits Key Points Year-Over-Year Growth vs. 3Q10 9.8% 5.2% 11.9% 14.2% 17.9% Average total deposits increased by $32.7 billion, or 17.9% (13.2% excluding acquisitions) 240 $215.4 $204.3 $209.4 Average low cost deposits (NIB, inte
Slide 16: Noninterest Income
3Q11 Earnings Noninterest Income Conference Call $ in millions Noninterest Income Key Points Year-Over-Year Growth vs. 3Q10 0.8% 10.2% 4.9% 1.7% 2.9% Noninterest income grew by $61 million, or 2.9%, driven by: 2800 • Payments revenue (6.0% growth) $2,222 $2,171 • Service charges (7.7% growth) $2,110
Slide 17: Noninterest Expense
3Q11 Earnings Noninterest Expense Conference Call $ in millions Noninterest Expense Key Points Year-Over-Year Growth vs. 3Q10 16.2% 11.5% 8.3% 2.0% 3.8% Noninterest expense was higher by $91 million, or 3.8%, driven by: 2800 $2,476 $2,485 $2,425 • Increased compensation (4.9%) and employee $2,385 $2
Slide 18: Mortgage Repurchase
3Q11 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 3Q11 2Q11 1Q11 4Q10 3Q10 • Conservative credit and Beginning Reserve $173 $181 $180 $147 $101 unde
Slide 19: Positioned to Win
3Q11 Earnings Positioned to Win Conference Call 19
Slide 20: Appendix
3Q11 Earnings Conference Call Appendix 20
Slide 21: Notable Items
3Q11 Earnings Notable Items Conference Call $ in millions YTD YTD 3Q11 2Q11 3Q10 2011 2010 Revenue Items Securities gains (losses), net $ (9) $ (8) $ (9) $ (22) $ (64) Gain related to FCB acquisition - - - 46 - Expense Items ITS transaction debt extinguishment and expense - - - - 18 Incremental Prov
Slide 22: Regulatory Environment
3Q11 Earnings Regulatory Environment Conference Call Existing regulatory oversight actions FY 2010 Annual Actual Run Rate Overdraft Legislation $255 $440 - $480 Pricing and Policy Changes Card Act $160 $250 Net Interest Margin and Fee Income Durbin Amendment -- $300* Future regulatory oversight acti
Slide 23: Credit Quality - Commercial Loans
3Q11 Earnings Credit Quality - Commercial Loans Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q10 2Q11 3Q11 Average Loans 40,726 44,135 46,484 60,000 6.0% 30-89 Delinquencies 0.76% 0.46% 0.34% 44,135 46,484 90+ Delinquencies 0.22% 0.09% 0.09% 40,726 41,700 42
Slide 24: Credit Quality - Commercial Leases
3Q11 Earnings Credit Quality - Commercial Leases Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q10 2Q11 3Q11 Average Loans 6,058 5,919 5,860 8,000 6.0% 30-89 Delinquencies 1.45% 1.00% 0.93% 6,058 6,012 6,030 5,919 5,860 90+ Delinquencies 0.02% 0.02% 0.02% 6,0
Slide 25: Credit Quality - Commercial Real Estate
3Q11 Earnings Credit Quality - Commercial Real Estate Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q10 2Q11 3Q11 Average Loans 34,190 35,499 35,569 40,000 10.0% 34,190 34,577 35,179 35,499 35,569 30-89 Delinquencies 0.50% 0.45% 0.44% 90+ Delinquencies 0.05%
Slide 26: Credit Quality - Residential Mortgage
3Q11 Earnings Credit Quality - Residential Mortgage Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q10 2Q11 3Q11 Average Loans 27,890 32,734 34,026 36,000 32,734 34,026 6.0% 31,777 30-89 Delinquencies 1.65% 1.11% 1.09% 29,659 27,890 90+ Delinquencies 1.75% 1.1
Slide 27: Credit Quality - Credit Card
3Q11 Earnings Credit Quality - Credit Card Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q10 2Q11 3Q11 Average Loans 16,510 15,884 16,057 20,000 16.0% 30-89 Delinquencies 1.85% 1.34% 1.38% 16,510 16,403 16,124 15,884 16,057 90+ Delinquencies 2.09% 1.32% 1.28%
Slide 28: Credit Quality - Home Equity
3Q11 Earnings Credit Quality - Home Equity Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q10 2Q11 3Q11 Average Loans 19,289 18,634 18,510 24,000 6.0% 30-89 Delinquencies 0.93% 0.78% 0.83% 19,289 19,119 18,801 18,634 18,510 90+ Delinquencies 0.73% 0.65% 0.67%
Slide 29: Credit Quality - Retail Leasing
3Q11 Earnings Credit Quality - Retail Leasing Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q10 2Q11 3Q11 Average Loans 4,289 4,808 5,097 6,000 3.0% 4,808 5,097 30-89 Delinquencies 0.46% 0.20% 0.19% 4,459 4,647 4,289 90+ Delinquencies 0.05% 0.02% 0.02% 4,000
Slide 30: Credit Quality - Other Retail
3Q11 Earnings Credit Quality - Other Retail Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 3Q10 2Q11 3Q11 Average Loans 24,281 24,498 24,773 28,000 6.0% 24,281 24,983 24,691 24,498 24,773 30-89 Delinquencies 0.81% 0.62% 0.67% 90+ Delinquencies 0.28% 0.20% 0.20%
Slide 31: Non-Regulatory Capital Ratios
3Q11 Earnings Non-Regulatory Capital Ratios Conference Call $ in millions 3Q11 2Q11 1Q11 4Q10 3Q10 Total equity $ 34,210 $ 33,341 $ 31,335 $ 30,322 $ 29,943 Preferred stock (2,606) (2,606) (1,930) (1,930) (1,930) Noncontrolling interests (980) (889) (828) (803) (792) Goodwill (net of deferred tax li
Slide 32: U.S. Bancorp 3Q11 Earnings Conference Call
U.S. Bancorp 3Q11 Earnings Conference Call October 19, 2011