U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q2 2018 Earnings Presentation
27 slides from U.s. Bancorp's earnings presentation, Jul 18, 2018
Slide 1: U.S. Bancorp 2Q18 Earnings Conference Call
U.S. Bancorp 2Q18 Earnings Conference Call July 18, 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: 2Q18 Highlights
2Q18 Highlights * Taxable-equivalent basis; see slide 26 for calculation ** Excluding the impact of the 2Q18 student loan portfolio sale, average total loans grew 0.3 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 -0.3% linked quarter +1.1% year-over-year Excluding the impact of the student loan portfolio sale in 2Q18, average total loans increased 0.3 percent linked quarter and 1.8 percent year-over-year, driven by growth in residential mortgage, total commercial loans and retail leasing. On bo
Slide 6: Average Deposits
Average Deposits +0.1% linked quarter +1.1% 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 total deposits grew slightly on both a linked quarter a
Slide 7: Credit Quality
Credit Quality $ in millions NCO Ratio -1 bp QoQ -1 bp YoY NPAs -9.4% QoQ -19.1% YoY
Slide 8: Earnings Summary
Earnings Summary $ and shares in millions, except EPS Reported Ler 2018 1018 = 2a17 vs. 1018 2Q17 Net Interest Income $3,197 $3,168 $3,049 09 49 taabio eactetentclosknent 29 29 51 - (43.1) Net Interest I (taxal saa basis) 3,226 3,197 3,100 09 44 Noninterest incom 2414 2272 2,348 63 28 Net Revenue 56
Slide 9: Net Interest Income
Net Interest Income Linked Quarter Growth in net interest income was primarily driven by the impact of higher interest rates and an additional day in the second quarter. The net interest margin was flat, reflecting the impact of higher interest rates offset by a deposit and funding mix shift. Year-o
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 growth was primarily driven by seasonally higher professional services and marketing and business development expense as well as higher compensation expense. Employee benefits expense saw a seasonal decline due to higher payroll taxes during the
Slide 12: Capital Position
Capital Position * See Non-GAAP Financial Measures reconciliation on slide 24
Slide 13: Appendix
Appendix
Slide 14: Average Loans vs. 2Q17
Average Loans vs. 2Q17 Average total loans increased by $3.1 billion, or 1.1% Average commercial loans increased by $2.7 billion, or 2.8% Average residential mortgage loans increased by $2.3 billion, or 3.9% Average commercial real estate loans decreased by $2.7 billion, or 6.3% vs. 1Q18 Average tot
Slide 15: Average Deposits
Average Deposits Key Points Average Deposits ($bn) vs. 2Q17 Average total deposits increased by $3.7 billion, or 1.1% Average low-cost deposits (NIB, interest checking, savings and money market) declined $3.0 billion, or 1.0% vs. 1Q18 Average total deposits increased by $0.2 billion, or 0.1% Average
Slide 16: Credit Quality – Commercial Loans
Credit Quality – Commercial Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm2Q171Q182Q18 Average Loans$95,638$97,465$98,353 30-89 Delinquencies0.27%0.25%0.23% 90+ Delinquencies0.05%0.06%0.06% Nonperforming Loans0.33%0.31%0.23% Linked Quarter Growth 2.0% 1.0% 1.0% (0.
Slide 17: Credit Quality – Commercial Real Estate
Investor $18,507 Owner Occupied $10,203 A&D Const $344 Multi-family $4,005 Retail $464 Residential Construction $1,966 Office $858 Other $2,846 Resi Land $664 $mm2Q171Q182Q18 Average Loans$42,549$40,366$39,857 30-89 Delinquencies0.08%0.09%0.11% 90+ Delinquencies0.00%0.01%0.01% Nonperforming Loans0.2
Slide 18: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm2Q171Q182Q18 Average Loans$58,544$60,174$60,834 30-89 Delinquencies0.22%0.24%0.27% 90+ Delinquencies0.20%0.22%0.18% Nonperforming Loans0.90%0.71%0.65% * Excludes GNMA loans, whose repayme
Slide 19: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm2Q171Q182Q18 Average Loans$20,631$21,284$21,220 30-89 Delinquencies1.22%1.32%1.22% 90+ Delinquencies1.10%1.29%1.15% Nonperforming Loans0.00%0.00%0.00% Linked Quarter Growth (1.0%) 1.4% 1.4% 0.3% (
Slide 20: Credit Quality – Home Equity
Credit Quality – Home Equity Average Loans ($mm) and Net Charge-offs Ratio Key Points Key Statistics $mm2Q171Q182Q18 Average Loans$16,252$16,195$16,048 30-89 Delinquencies0.33%0.41%0.39% 90+ Delinquencies0.25%0.32%0.29% Nonperforming Loans0.74%0.79%0.81% Subprime: 1% Wtd Avg LTV*: 87% NCO: -3.68% Pr
Slide 21: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm2Q171Q182Q18 Average Loans$7,181$7,982$8,150 30-89 Delinquencies0.22%0.34%0.30% 90+ Delinquencies0.01%0.02%0.02% Nonperforming Loans0.07%0.09%0.12% * Manheim Used Vehicle Value Index source: ww
Slide 22: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm2Q171Q182Q18 Average Loans$31,194$32,874$31,265 30-89 Delinquencies0.65%0.73%0.75% 90+ Delinquencies0.11%0.15%0.13% Nonperforming Loans0.10%0.11%0.12% Linked Quarter Growth 0.4% 2.6% 2.6% 0.1% (4
Slide 23: Credit Quality – Auto Loans
Credit Quality – Auto Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm2Q171Q182Q18 Average Loans$17,533$18,868$18,599 30-89 Delinquencies0.73%0.85%0.90% 90+ Delinquencies0.06%0.08%0.08% Nonperforming Loans0.12%0.12%0.13% Direct: 5% Wtd Avg FICO: 747 NCO: 0.20% 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. (2) Includes net losses on cash flow hedges in
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 2Q18 Earnings Conference Call
U.S. Bancorp 2Q18 Earnings Conference Call July 18, 2018