31 slides from U.s. Bancorp's earnings presentation, Jul 16, 2014
Slide 1: U.S. Bancorp 2Q14 Earnings Conference Call
Exhibit 99.2 U.S. Bancorp 2Q14 Earnings Conference Call Richard K. Davis Chairman, President and CEO Andy Cecere July 16, 2014 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: 2Q14 Highlights
2Q14 Earnings 2Q14 Highlights Conference Call Record net income of $1.5 billion; $0.78 per diluted common share 2Q14 results included a $214 million gain on the sale of Visa Inc. Class B common stock and a $200 million FHA DOJ settlement (no impact to EPS) Average loan growth of 6.8% vs. 2Q13 (6.7%
Slide 4: Performance Ratios
2Q14 Earnings Performance Ratios Conference Call Return on Average Common Equity Efficiency Ratio and and Return on Average Assets Net Interest Margin Return on Avg Common Equity Return on Avg Assets Efficiency Ratio Net Interest Margin * Excluding $214 million gain on Visa Inc. Class B common stock
Slide 5: Revenue Growth
2Q14 Earnings Revenue Growth Conference Call $ in millions Year-Over-Year Change (2.4%) (5.6%) (4.4%) (1.2%) 4.9% * Gain on Visa Inc. Class B common stock sale 5 Taxable-equivalent basis
Slide 6: Loan and Deposit Growth
2Q14 Earnings Loan and Deposit Growth Conference Call $ in billions Year-Over-Year Growth Average Balances 6.0% 5.4% 5.1% $262.4 5.5% $256.9 $257.5 7.0% $252.4 $247.4 6.8% 6.0% $240.5 5.7% $235.9 5.7% $232.8 5.2% $229.4 $225.2 6
Slide 7: Credit Quality
2Q14 Earnings Credit Quality Conference Call $ in millions Net Charge-offs Nonperforming Assets* Net Charge-offs (Left Scale) Nonperforming Assets (Left Scale) NCOs to Avg Loans (Right Scale) NPAs to Loans plus ORE (Right Scale) 7 * Excluding Covered Assets (assets subject to loss sharing agreements
Slide 8: Earnings Summary
2Q14 Earnings Earnings Summary Conference Call $ in millions, except per-share data % B/(W) YTD YTD 2Q14 1Q14 2Q13 vs 1Q14 vs 2Q13 2014 2013 % B/(W) Net Interest Income $ 2,744 $ 2,706 $ 2,672 1.4 2.7 $ 5,450 $ 5,381 1.3 Noninterest Income 2,444 2,108 2,276 15.9 7.4 4,552 4,441 2.5 Total Revenue 5,1
Slide 9: 2Q14 Results - Key Drivers
2Q14 Earnings 2Q14 Results - Key Drivers Conference Call vs. 2Q13 Net Revenue increase of 4.9% (0.5% excluding notable items) • Net interest income increase of 2.7%; net interest margin of 3.27% vs. 3.43% in 2Q13 • Noninterest income increase of 7.4% (2.0% decrease excluding notable items) Nonintere
Slide 10: Capital Position
2Q14 Earnings Capital Position Conference Call 2Q14 1Q14 4Q13 3Q13 2Q13 Total U.S. Bancorp shareholders' equity $ 42.7 $ 42.1 $ 41.1 $ 40.1 $ 39.7 Standardized Approach Basel III transitional standardized approach/Basel I (a) Common equity tier 1 capital 29.8 29.5 27.9 27.3 26.8 Tier 1 capital 34.9
Slide 11: Capital Actions
2Q14 Earnings Capital Actions Conference Call Dividend increase announced June 17 th • Annual dividend increased from $0.92 to $0.98, a 6.5% increase • One year authorization to repurchase up to $2.3 billion of outstanding stock effective April 1, 2014 Returned 75% of earnings to shareholders during
Slide 12: 2Q14 Earnings Conference Call
2Q14 Earnings Conference Call 12
Slide 13: Appendix
2Q14 Earnings Conference Call Appendix 13
Slide 14: Average Loans
2Q14 Earnings Average Loans Conference Call $ in billions Average Loans Key Points Year-Over-Year Growth vs. 2Q13 5.2% 5.7% 5.7% 6.0% 6.8% Average total loans grew by $15.3 billion, or 6.8% (6.7% excluding Charter One acquisition) Average total loans, excluding covered loans, $235.9 $240.5 $225.2 $2
Slide 15: Average Deposits
2Q14 Earnings Average Deposits Conference Call $ in billions Average Deposits Key Points Year-Over-Year Growth vs. 2Q13 7.0% 5.5% 5.4% 5.1% 6.0% Average total deposits increased by $15.0 billion, or 6.0% (5.8% excluding Charter One acquisition) $262.4 $247.4 $252.4 $256.9 $257.5 Average low cost dep
Slide 16: Net Interest Income
2Q14 Earnings Net Interest Income Conference Call $ in millions Net Interest Income Key Points Year-Over-Year Change vs. 2Q13 (1.5%) (2.5%) (1.8%) (0.1%) 2.7% Average earning assets grew by $24.1 billion, or 7.7% Net interest margin lower by 16 bps (3.27% vs. 3.43%) driven by: • Lower reinvestment r
Slide 17: Noninterest Income
2Q14 Earnings Noninterest Income Conference Call $ in millions Noninterest Income Key Points vs. 2Q13 Year-Over-Year Change Noninterest income increased by $168 million, or 7.4%, driven by: (3.4%) (9.1%) (7.4%) (2.6%) 7.4% • Higher credit and debit card revenue (6.1% increase) and $2,444 corporate p
Slide 18: Noninterest Expense
2Q14 Earnings Noninterest Expense Conference Call $ in millions Noninterest Expense Key Points vs. 2Q13 Year-Over-Year Change Noninterest expense was higher by $196 million, or (1.7%) (1.7%) (0.1%) 3.0% 7.7% 7.7%, driven by: • Higher other expense due primarily to the FHA DOJ settlement partially of
Slide 19: Credit Quality - Commercial Loans
2Q14 Earnings Credit Quality - Commercial Loans Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 2Q13 1Q14 2Q14 Average Loans $61,507 $65,645 $69,920 30-89 Delinquencies 0.23% 0.25% 0.23% 90+ Delinquencies 0.10% 0.07% 0.06% Nonperforming Loans 0.14% 0.25% 0.24% C
Slide 20: Credit Quality - Commercial Leases
2Q14 Earnings Credit Quality - Commercial Leases Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 2Q13 1Q14 2Q14 Average Loans $5,255 $5,189 $5,100 30-89 Delinquencies 0.74% 0.74% 0.75% 90+ Delinquencies 0.00% 0.00% 0.00% Nonperforming Loans 0.27% 0.27% 0.31% Com
Slide 21: Credit Quality - Commercial Real Estate
2Q14 Earnings Credit Quality - Commercial Real Estate Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 2Q13 1Q14 2Q14 Average Loans $37,884 $40,050 $40,497 30-89 Delinquencies 0.23% 0.14% 0.14% 90+ Delinquencies 0.03% 0.06% 0.06% Nonperforming Loans 1.11% 0.67% 0
Slide 22: Credit Quality - Residential Mortgage
2Q14 Earnings Credit Quality - Residential Mortgage Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 2Q13 1Q14 2Q14 Average Loans $46,873 $51,584 $51,815 30-89 Delinquencies 0.78% 0.59% 0.48% 90+ Delinquencies 0.53% 0.64% 0.49% Nonperforming Loans 1.43% 1.50% 1.5
Slide 23: Credit Quality - Credit Card
2Q14 Earnings Credit Quality - Credit Card Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 2Q13 1Q14 2Q14 Average Loans $16,416 $17,407 $17,384 30-89 Delinquencies 1.17% 1.19% 1.13% 90+ Delinquencies 1.10% 1.21% 1.06% Nonperforming Loans 0.65% 0.38% 0.29% Commen
Slide 24: Credit Quality - Home Equity
2Q14 Earnings Credit Quality - Home Equity Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 2Q13 1Q14 2Q14 Average Loans $15,989 $15,366 $15,327 30-89 Delinquencies 0.74% 0.57% 0.50% 90+ Delinquencies 0.25% 0.33% 0.26% Nonperforming Loans 1.23% 1.09% 1.11% Subpri
Slide 25: Credit Quality - Retail Leasing
2Q14 Earnings Credit Quality - Retail Leasing Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 2Q13 1Q14 2Q14 Average Loans $5,653 $5,979 $6,014 30-89 Delinquencies 0.14% 0.16% 0.16% 90+ Delinquencies 0.00% 0.02% 0.00% Nonperforming Loans 0.02% 0.02% 0.02% Commen
Slide 26: Credit Quality - Other Retail
2Q14 Earnings Credit Quality - Other Retail Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 2Q13 1Q14 2Q14 Average Loans $25,224 $26,312 $26,587 30-89 Delinquencies 0.46% 0.40% 0.47% 90+ Delinquencies 0.14% 0.13% 0.11% Nonperforming Loans 0.11% 0.08% 0.06% Auto
Slide 27: Credit Quality - Auto Loans
2Q14 Earnings Credit Quality - Auto Loans Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 2Q13 1Q14 2Q14 Average Loans $12,575 $13,815 $14,108 30-89 Delinquencies 0.30% 0.26% 0.38% 90+ Delinquencies 0.02% 0.03% 0.03% Nonperforming Loans 0.02% 0.02% 0.01% Indirec
Slide 28: Mortgage Repurchase
2Q14 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 2Q14 1Q14 4Q13 3Q13 2Q13 • Conservative credit and Beginning Reserve $75 $83 $176 $190 $233 underw
Slide 29: Non-GAAP Financial Measures
2Q14 Earnings Non-GAAP Financial Measures Conference Call $ in millions 2Q14 1Q14 4Q13 3Q13 2Q13 Total equity $ 43,386 $ 42,743 $ 41,807 $ 41,552 $ 41,050 Preferred stock (4,756) (4,756) (4,756) (4,756) (4,756) Noncontrolling interests (686) (689) (694) (1,420) (1,367) Goodwill (net of deferred tax
Slide 30: Non-GAAP Financial Measures
2Q14 Earnings Non-GAAP Financial Measures Conference Call $ in millions 2Q14 1Q14 4Q13 3Q13 2Q13 Total assets $ 389,065 $ 371,289 $ 364,021 $ 360,681 $ 353,415 Goodwill (net of deferred tax liability) (1) (8,548) (8,352) (8,343) (8,319) (8,317) Intangible assets, other than mortgage servicing rights
Slide 31: U.S. Bancorp 2Q14 Earnings Conference Call
U.S. Bancorp 2Q14 Earnings Conference Call July 16, 2014