U.s. Bancorp · NYSE:USB
U.s. Bancorp — Morgan Stanley Financials Conference 2011
40 slides from U.s. Bancorp's conference presentation, Feb 1, 2011
Slide 1: Morgan Stanley Financials Conference 2011
Andy Cecere Vice Chairman and CFO February 1, 2011 Morgan Stanley Financials Conference 2011
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: U.S. Bancorp Overview
U.S. Bancorp Overview 2010 Performance Current Topics Investing for Growth
Slide 4: U.S. Bancorp Businesses
*As of January 28, 2011 U.S. Bancorp Businesses 4Q10 Dimensions Asset Size $308 billion Deposits $204 billion Loans $197 billion Customers 17 million NYSE Traded USB Market Capitalization* $51 billion Founded 1863 Bank Branches 3,031 ATMs 5,310
Slide 5: Total Assets and Market Value
U.S. Rank Company $Billions 1 Bank of America $2,265 2 J.P. Morgan 2,118 3 Citigroup 1,915 4 Wells Fargo 1,258 5 U.S. Bancorp 308 6 PNC 264 7 SunTrust 173 8 BB&T 157 9 Regions 132 10 Fifth Third 111 U.S. Rank Company $Billions 1 J.P. Morgan $174 2 Wells Fargo 168 3 Bank of America 137 4 Citigroup 13
Slide 6: Revenue Diversification
Consumer Wholesale PCTAM Payments Revenue 43 20 9 28 Diversification Full year 2010, taxable-equivalent basis Excluding securities gains (losses) net 2006 2007 2008 2009 2010 Fee Income 0.51 0.52 0.5 0.49 0.46 Core 0 0 0 0 0 Revenue Mix By Business Line Fee Income / Total Revenue Consumer and Small
Slide 7: 2010 Performance
U.S. Bancorp Overview 2010 Performance Current Topics Investing for Growth
Slide 8: 2010 Results
2010 Results Full Year Full Year 2010 2009 % Change Net Income ($ in millions) $3,317 $2,205 + 50.4% Diluted EPS (per share) $1.73 $0.97 + 78.4% Return on Assets 1.16% 0.82% Return on Common Equity 12.7% 8.2% Record-setting net revenue of $18.1 billion Provision for credit losses declined 22% Averag
Slide 9: Performance Metrics
Performance Metrics Source: company reports Peer Banks: BAC, BBT, FITB, JPM, KEY, PNC, RF, STI, USB and WFC 2006 2007 2008 2009 2010 1Q10 2Q10 3Q10 4Q10 USB 0.235 0.213 0.139 0.082 0.127 0.105 0.134 0.128 0.137 Peer Median 0.135 0.116 0.038 0.019 0.05 0.051 0.052 0.073 2006 2007 2008 2009 2010 2Q10
Slide 10: Performance vs Peers
Performance vs Peers Source: SNL, 1Q08 through 4Q10 Peer Banks: BAC, BBT, FITB, JPM, KEY, PNC, RF, STI, USB and WFC Since 1/1/08 USB Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 ROA 0.0106 0.0099 0.0088 0.0073 0.0059 0.0012 USB Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer
Slide 11: Revenue Growth
Revenue Growth 4Q09 1Q10 2Q10 3Q10 4Q10 Reported 4376 4321 4519 4587 4721 2006 2007 2008 2009 2010 Reported 13742 14060 14677 16668 18148 $ in millions Taxable-equivalent basis Prior 5 Quarters Year-Over-Year Growth 20.8% 11.3% 8.7% 7.9% 7.9% Prior 5 Years Year-Over-Year Growth 3.8% 2.3% 4.4% 13.6%
Slide 12: Loan and Deposit Growth
Loan and Deposit Growth 4Q09 1Q10 2Q10 3Q10 4Q10 Loans 191.6 192.9 191.2 192.5 195.5 Deposits 180.9 182.5 183.3 182.7 190.3 2006 2007 2008 2009 2010 Loans 144 154 185 195 197 Deposits 125 131 159 183 204 $ in billions 2.0% $195.5 8.2% $191.6 3.9% $192.9 4.0% $191.2 5.8% $192.5 5.2% $190.3 25.2% $180
Slide 13: Loan Growth
Loan Growth Average loans; loan growth 4Q10 vs. 4Q09 adjusted for acquisitions Acquisition adjustments: USB - FBOP acquisition, BAC & JPM - credit card securitizations USB Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Loan Growth 0.015 0.014 0.006 0 -0.005 -0.007 -0.008 -0.012 -0.01
Slide 14: Deposit Growth
Deposit Growth Average deposits; deposit growth 4Q10 vs. 4Q09 adjusted for acquisitions Acquisition adjustments: USB - FBOP acquisition USB Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Deposit Growth 0.042 0.035 0.027 0.026 0.021 0.02 0.006 0.002 0 -0.005 USB Peer 1 Peer 2 Peer 3 P
Slide 15: Capital Position
Capital Position $ in billions 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 TARP 0 0 0 0 24.4 25.3 0 0 0 0 0 0 0 Tier 1 Capital Ratio 0.083 0.086 0.085 0.085 0.106 0.109 0.094 0.095 0.096 0.099 0.101 0.103 0.105 Tier 1 Common Ratio 0.056 0.057 0.056 0.057 0.051 0.054 0.067 0.068
Slide 16: Credit Quality
Credit Quality 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 NPA $ Change 76 49 155 290 357 489 727 626 386 184 91 -261 -171 -212 NPA % Change 0.13 0.08 0.22 0.34 0.31 0.33 0.37 0.23 0.12 0.05 0.02 -0.07 -0.05 -0.06 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10
Slide 17: Credit Quality - Reserves
Credit Quality - Reserves 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 Allowance 2260 2435 2648 2898 3639 4105 4571 4986 5264 5439 5536 5540 5531 Provision/NCO's 1 1.66 1.51 1.5 2 1.67 1.5 1.4 1.25 1.15 1.02 1 0.97 Allowance for Credit Losses Allowance for Credit Losses Provision
Slide 18: Current Topics
U.S. Bancorp Overview 2010 Performance Current Topics Investing for Growth
Slide 19: Mortgage Repurchase
Mortgage Repurchase Mortgages Repurchased and Make-whole Payments Mortgage Representation and Warranties Reserve $ in millions 4Q10 3Q10 2Q10 1Q10 4Q09 Beginning Reserve $147 $101 $73 $72 $52 Net Realized Losses (27) (24) (20) (22) (6) Additions to Reserve 60 70 48 23 26 Ending Reserve $180 $147 $10
Slide 20: Regulatory Environment
Regulatory Environment Existing regulatory oversight actions 4Q10 FY 2010 Annual Actual Actual Run Rate Overdraft Legislation ^ $115 ^ $255 ^ $440 - $480 Pricing and Policy Changes Card Act ^ $60 ^ $160 ^ $250 Net Interest Margin and Fee Income Durbin Amendment -- -- ^ $400* $ in millions, estimated
Slide 21: Basel III
Basel III Capital Tier 1 common ratio 7.3% under Basel III Liquidity Liquidity Coverage Ratio (LCR) requires replacing off-balance sheet liquidity with on-balance sheet liquidity Expect transition to on-balance sheet liquidity to result in increase in average investment portfolio in 2011 No impact t
Slide 22: Investing for Growth
U.S. Bancorp Overview 2010 Performance Current Topics Investing for Growth
Slide 23: Investing for Growth - Capital Expenditures
Investing for Growth - Capital Expenditures 2005 2006 2007 2008 2009 2010 CapX 301 540 484 519 772 856 $ in millions, approved by Capital Expenditure Committee Technology Investments Tier 4 Data Center Branch Hardware & Software Internet Channel Home Mortgage Origination Platform Mobile Banking Chan
Slide 24: Investing for Growth - Acquisitions
Investing for Growth - Acquisitions Investing in the franchise Payments Merchant processing portfolio of Santander-Mexico Merchant processing portfolio of Citizens National Bank Credit card portfolios from Citi Merchant processing portfolio of MB Financial Bank Credit card portfolio of Town North Ba
Slide 25: New Mexico Acquisition
New Mexico Acquisition Transaction: Terms: Approvals: Status: FDIC assisted whole bank purchase and assumption transaction U.S. Bank received substantially all assets and liabilities of First Community Bank, a subsidiary of First State Bancorporation of Albuquerque, New Mexico No holding company ass
Slide 26: New Mexico Acquisition
New Mexico Acquisition First Community Bank operates 38 branches in NM (35) and AZ (3) Provides USB with the #3 market share ranking in New Mexico Complementary footprint Adds 25th contiguous state to USB footprint Loan portfolio 51% CRE, 25% construction, 10% 1-4 family, 13% C&I, 1% other Deposits
Slide 27: New Mexico Acquisition
New Mexico Acquisition Low risk transaction Attractive entry into New Mexico #3 market share Expands USB footprint to 25th contiguous state Expect to increase presence in state through future de novo branch expansion Financially attractive for USB shareholders Significantly exceeds all internal fina
Slide 28: Positioned to Win
Positioned to Win USB is well-positioned to produce industry-leading performance with... a strong foundation, including excellent credit and risk management, a diversified business mix and prudent capital management a proven track record initiatives to build relevant, profitable scale in each of our
Slide 29: Morgan Stanley Financials Conference 2011
Andy Cecere Vice Chairman and CFO February 1, 2011 Morgan Stanley Financials Conference 2011
Slide 30: Appendix
Appendix (USbancorp.
Slide 31: Credit Quality - Commercial Loans
Credit Quality - Commercial Loans 4Q09 1Q10 2Q10 3Q10 4Q10 Average Loans 43490 40837 40095 40726 41700 Net Charge-offs Ratio 0.0228 0.0241 0.0223 0.0149 0.0111 Average Loans and Net Charge-offs Ratios Key Statistics Comments Overall delinquencies continue to decline significantly Nonperforming loans
Slide 32: Credit Quality - Commercial Leases
EF ST Balance 2469 3663 Credit Quality - Commercial Leases 4Q09 1Q10 2Q10 3Q10 4Q10 Average Loans 6489 6445 6245 6058 6012 Net Charge-offs Ratio 0.0202 0.0214 0.0141 0.0118 0.0112 Average Loans and Net Charge-offs Ratios Key Statistics Comments Net charge-offs declined slightly while early stage del
Slide 33: Credit Quality - Commercial Real Estate
Multi-Family Retail Res Construction Condo Construction A&D Commercial Office Other balance 1894 1086 1203 487 930 877 1350 Inv Owner balance 15545 11205 Credit Quality - Commercial Real Estate 4Q09 1Q10 2Q10 3Q10 4Q10 Avg Loans 34044 34151 34164 34190 34577 NCO Ratio 0.0203 0.0228 0.0267 0.024 0.02
Slide 34: Credit Quality - Residential Mortgage
4Q09 1Q10 2Q10 3Q10 4Q10 Restructured 1354 1560 1672 1747 1804 Credit Quality - Residential Mortgage 4Q09 1Q10 2Q10 3Q10 4Q10 Average Loans 25621 26408 26821 27890 29659 Net Charge-offs Ratio 0.0237 0.0223 0.0206 0.0188 0.0175 Average Loans and Net Charge-offs Ratios Key Statistics Comments Strong g
Slide 35: Credit Quality - Home Equity
Credit Quality - Home Equity 4Q09 1Q10 2Q10 3Q10 4Q10 Average Loans 19444 19402 19332 19289 19119 Net Charge-offs Ratio 0.0196 0.0188 0.0164 0.0162 0.0172 Average Loans and Net Charge-offs Ratios Key Statistics Comments Strong credit quality portfolio (weighted average FICO 746, weighted average CLT
Slide 36: Credit Quality - Credit Card
Traditional Consumer Finance Balance 15126 1277 4Q09 3Q10 4Q10 Average Loans 16,399 16,510 16,403 30-89 Delinquencies 2.38% 1.85% 1.60% 90+ Delinquencies 2.59% 2.09% 1.86% Nonperforming Loans 0.84% 1.21% 1.36% Credit Quality - Credit Card 4Q09 1Q10 2Q10 3Q10 4Q10 Average Loans 16399 16368 16329 1651
Slide 37: Credit Quality - Retail Leasing
Credit Quality - Retail Leasing 4Q09 1Q10 2Q10 3Q10 4Q10 Average Loans 4620 4509 4364 4289 4459 Net Charge-offs Ratio 0.0043 0.0045 0.0037 0.0019 0.0009 Average Loans and Net Charge-offs Ratios Key Statistics Comments Average loans increased during the quarter as demand for new auto leases increased
Slide 38: Credit Quality - Other Retail
Auto Install Student Revolving Balance 10823 5537 5104 3519 Credit Quality - Other Retail 4Q09 1Q10 2Q10 3Q10 4Q10 Average Loans 23037 23343 23357 24281 24983 Net Charge-offs Ratio 0.0191 0.0193 0.017 0.0165 0.0145 Average Loans and Net Charge-offs Ratios Key Statistics Comments Average balances inc
Slide 39: Non-Regulatory Capital Ratios
Non-Regulatory Capital Ratios $ in millions
Slide 40: Andy Cecere Vice Chairman and CFO February 1, 2011 Morgan Stanley Financials Conference 2011
Andy Cecere Vice Chairman and CFO February 1, 2011 Morgan Stanley Financials Conference 2011
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