U.s. Bancorp · NYSE:USB
U.s. Bancorp — Credit Suisse Financial Services Forum 2015
30 slides from U.s. Bancorp's conference presentation, Feb 11, 2015
Slide 1: Credit Suisse Financial Services Forum 2015
Credit Suisse Financial Services Forum 2015 February 11, 2015 Kathy Rogers Vice Chairman and CFO P.W. (Bill) Parker Vice Chairman, Chief Risk Officer EXTENDING THE ADVANTAGE Exhibit 99.1
Slide 2: Forward-looking Statements and Additional Information
EXTENDING THE ADVANTAGE 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 cur
Slide 3: Agenda
EXTENDING THE ADVANTAGE Agenda Overview Financial Management Capital Management Loan Growth / Credit Quality 1Q15 Update Long-term Goals
Slide 4: U.S. Bancorp Dimensions
EXTENDING THE ADVANTAGE U.S. Bancorp Dimensions Asset Size $403 billion Deposits $283 billion Loans $248 billion Customers 18.5 million NYSE Traded USB Market Capitalization* $75 billion Founded Bank Branches 3,176 ATMs 5,022 4Q14 Dimensions * As of 1/30/15
Slide 5: Industry Positions
EXTENDING THE ADVANTAGE 5 U.S. Bancorp 403 5 U.S. Bancorp 283 5 U.S. Bancorp 75 Industry Positions Source: company reports, SNL and FactSet Assets and deposits as of 12/31/14, market value as of 1/30/15 U.S. U.S. U.S. Rank Company $ Billions Rank Company $ Billions Rank Company $ Billions J.P. Morga
Slide 6: Diversified Business Mix
EXTENDING THE ADVANTAGE Consumer and Small Business Banking 41% Payment Services 30% Wealth Mgmt and Securities Services 11% Wholesale Banking and Commercial Real Estate 18% Revenue Mix By Business Line Fee Income / Total Revenue Full year 2014, taxable-equivalent basis, excluding securities gains (
Slide 7: Agenda
EXTENDING THE ADVANTAGE Agenda Overview Financial Management Capital Management Loan Growth / Credit Quality 1Q15 Update Long-term Goals
Slide 8: Peer Banks
EXTENDING THE ADVANTAGE Peer Banks Peer Bank Ticker Symbols BAC Bank of America PNC PNC BBT BB&T RF Regions FITB Fifth Third STI SunTrust JPM J.P. Morgan USB U.S. Bancorp KEY KeyCorp WFC Wells Fargo Bank of America SunTrust Wells Fargo KeyCorp BBT Fifth Third Regions PNC J.P. Morgan U.S. Bancorp
Slide 9: Industry Leading Returns
EXTENDING THE ADVANTAGE Source: SNL and company reports; Peer banks: BAC, BBT, FITB, JPM, KEY, PNC, RF, STI and WFC Efficiency ratio computed as noninterest expense divided by the sum of net interest income on a taxable-equivalent basis and noninterest income excluding securities gains (losses) Indu
Slide 10: Efficient Expense Platform
EXTENDING THE ADVANTAGE Efficient Expense Platform Single processing platforms Full consolidation of acquisitions Operating scale in all significant businesses Business line monthly review process 2014 Efficiency Ratio Source of Competitive Advantage Source: SNL and company reports; Peer banks: BAC,
Slide 11: Peer Debt Ratings
EXTENDING THE ADVANTAGE Debt ratings: holding company as of 1/30/15 op=outlook positive on=outlook negative s=outlook stable wn=watch negative wp=watch positive Flight to quality Funding advantage Advantages Peer Debt Ratings Top of Class Debt Ratings Rating Outlook Rating Outlook Rating Outlook Rat
Slide 12: Agenda
EXTENDING THE ADVANTAGE Agenda Overview Financial Management Capital Management Loan Growth / Credit Quality 1Q15 Update Long-term Goals
Slide 13: Capital Management
EXTENDING THE ADVANTAGE 2.5% 4.5% Capital Requirement * Based on the final rules for the Basel III fully implemented standardized approach Earnings Distribution Target 8.0% Internal Buffer 1.0% Capital Conservation Buffer Minimum Capital Requirement 9.0%* Common Equity Tier 1 Basel III Target USB 4Q
Slide 14: Payout Ratio
EXTENDING THE ADVANTAGE 62% 11% 32% Payout Ratio 71% Capital Distributions 72% Comprehensive Capital Analysis and Review (CCAR) capital plan was submitted in January CCAR results expected to be published by March 31, 2015 PPNR = Pre-Provision Net Revenue Source: Federal Reserve, estimates in the sev
Slide 15: Agenda
EXTENDING THE ADVANTAGE Agenda Overview Financial Management Capital Management Loan Growth / Credit Quality 1Q15 Update Long-term Goals
Slide 16: Loan Growth
EXTENDING THE ADVANTAGE $ in millions Prior 5 Years Average Balances Year-Over-Year Growth 3.9% 4.4% 6.9% 5.6% 6.3% Prior 5 Quarters Average Balances Year-Over-Year Growth 5.7% 6.0% 6.8% 6.3% 5.9% Loan Growth
Slide 17: Credit Quality
EXTENDING THE ADVANTAGE $ in millions Net Charge-offs Net Charge-offs (Left Scale) NCOs to Avg Loans (Right Scale) Credit Quality Nonperforming Assets Nonperforming Assets (Left Scale) NPAs to Loans plus ORE (Right Scale)
Slide 18: Credit Quality
EXTENDING THE ADVANTAGE Credit Quality Source: SNL and company reports Strong credit culture • Lowest net charge-off volatility in peer group from 1Q03 – 4Q14 Minimum/Maximum NCO% 4Q14 NCO% NCO Volatility
Slide 19: Credit Quality
EXTENDING THE ADVANTAGE Credit Quality Source: company reports, reserve release is calculated as net charge-offs less provision for credit losses Strong credit culture • Reserve build was less than peers – now have modest releases Reserve Release / Net Income (Full Year 2014)
Slide 20: Credit Risk Management
EXTENDING THE ADVANTAGE Investor Day 2Q13 Current Small Business Card Growth Ongoing benefit of 2009+ Originations Net Charge-offs - USB Normalized • Overall normalized loss rate 0.95% - 1.00% • Actual losses now well below normalized Credit Risk Management * Includes commercial and commercial real
Slide 21: Energy Lending
EXTENDING THE ADVANTAGE 66% 24% 10% Energy Lending A limited, managed exposure • $11.5 billion in commitments, $3.1 billion funded (1.3% of total loans) • ~70% of commitments rated investment grade or equivalent • Low energy prices are expected to help consumer spending in areas such as services and
Slide 22: Agenda
EXTENDING THE ADVANTAGE Overview Financial Management Capital Management Loan Growth / Credit Quality 1Q15 Update Long-term Goals Agenda
Slide 23: 1Q15 Update
EXTENDING THE ADVANTAGE 1Q15 Update Business Climate Loan Growth Net Interest Margin Credit Quality Noninterest Income / Expense
Slide 24: Agenda
EXTENDING THE ADVANTAGE Overview Financial Management Capital Management Loan Growth / Credit Quality 1Q15 Update Long-term Goals Agenda
Slide 25: Long-term Goals
EXTENDING THE ADVANTAGE Long-term Goals Optimal business line mix Investments generating positive returns Profitability: • ROE 16-19% • ROA 1.60-1.90% • Efficiency Ratio low 50s Capital distributions: • Earnings distribution 60-80% Current Status Four simple and stable business lines Mortgage, wealt
Slide 26: Appendix
EXTENDING THE ADVANTAGE Appendix
Slide 27: Non-GAAP Financial Measures
EXTENDING THE ADVANTAGE Non-GAAP Financial Measures $ in millions 4Q14 3Q14 2Q14 1Q14 4Q13 Total equity 44,168 $ 43,829 $ 43,386 $ 42,743 $ 41,807 $ Preferred stock (4,756) (4,756) (4,756) (4,756) (4,756) Noncontrolling interests (689) (688) (686) (689) (694) Goodwill (net of deferred tax liability)
Slide 28: Non-GAAP Financial Measures
EXTENDING THE ADVANTAGE Non-GAAP Financial Measures $ in millions 4Q14 3Q14 2Q14 1Q14 4Q13 Total assets 402,529 $ 391,284 $ 389,065 $ 371,289 $ 364,021 $ Goodwill (net of deferred tax liability) (1) (8,403) (8,503) (8,548) (8,352) (8,343) Intangible assets, other than mortgage servicing rights (824)
Slide 29: Line of Business Financial Performance
EXTENDING THE ADVANTAGE Taxable-equivalent basis, excluding securities gains (losses) net Line of Business Financial Performance Non-GAAP Financial Measures $ in millions Revenue Line of Business Financial Performance FY 2014 Wholesale Banking and Commercial Real Estate 3,037 $ Consumer and Small Bu
Slide 30: Credit Suisse Financial Services Forum 2015
EXTENDING THE ADVANTAGE Credit Suisse Financial Services Forum 2015 February 11, 2015
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