27 slides from U.s. Bancorp's earnings presentation, Jul 19, 2017
Slide 1: U.S. Bancorp 2Q17 Earnings Conference Call
U.S. Bancorp 2Q17 Earnings Conference Call July 19, 2017 U.S. BANCORP
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: 2Q17 Highlights
2Q17 Highlights Income Statement change vs. Credit Quality change vs. $ in millions, except EPS 2Q17 1Q17 2Q16 $ in millions 2Q17 1Q17 2Q16 Net interest income* $3,068 2.4 % 5.9 % Nonperforming assets $1,349 (9.8) % (19.3) % Noninterest income 2,419 3.9 (5.2) NPA ratio 0.49% (6bps) (13bps) Reported
Slide 4: Performance Ratios
Performance Ratios Return on Return on Efficiency Ratio* & Average Common Equity Average Assets Net Interest Margin** 13.8% 1.43% 55.6% 55.2% 13.3% 13.4% 1.35% 1.35% 54.9% 3.02% 3.03% 3.04% 2Q16 1Q17 2Q17 2Q16 1Q17 2Q17 2Q16 1Q17 2Q17 * Non-GAAP; see slide 26 for calculation ** Taxable-equivalent ba
Slide 5: Average Loans
Average Loans Average Change vs. (Three months ended 6/30/17) Balances 1Q17 2Q16 $273.2 $275.5 Commercial $95.6 2.0 % 3.8 % $266.6 Residential Mortgage 58.5 1.1 5.5 Retail 54.6 1.6 6.1 Commercial Real Estate 42.6 (1.4) (1.0) Credit Card 20.6 (1.0) 2.4 Covered 3.6 (5.2) (18.3) Total loans $275.5 0.9
Slide 6: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing Average Loans Delinquencies and Net Charge-offs 2Q16 1Q17 2Q17 $7,181 Average Loans $5,326 $6,469 $7,181 $6,191 $6,469 30-89 Delinquencies 0.18% 0.24% 0.22% $5,773 $5,326 90+ Delinquencies 0.00% 0.01% 0.01% Nonperforming Loans 0.04% 0.04% 0.07% 0.19% 0.15% 0.11% 140 M
Slide 7: Average Deposits
Average Deposits Interest-bearing Deposits $328.4 $331.2 $307.4 Average Change vs. Change (Three months ended 6/30/17) Balances 1Q17 2Q16 Rates vs. 1Q17 Money market savings $106.8 (1.8) % 14.9 % 0.58 % 0.10 % Interest checking 67.3 2.4 10.6 0.10 0.02 Savings accounts 43.5 2.1 8.1 0.07 (0.01) Time d
Slide 8: Credit Quality
Credit Quality Net Charge-offs Nonperforming Assets $1,672 $335 $340 $1,495 $317 $1,349 NCO Ratio NPAs -1bp QoQ 0.62% -9.8% QoQ 0.48% 0.50% 0.49% 0.55% 0.49% +1bp YoY -19.3% YoY 2Q16 1Q17 2Q17 2Q16 1Q17 2Q17 NPAs NPAs/Period-end Loans plus OREO NCOs NCOs/Avg Loans Provision for Credit Losses $20 $10
Slide 9: Earnings Summary
Earnings Summary $ and shares in millions, except per-share data Reported % Change 2Q17 1Q17 2Q16 vs. 1Q17 vs. 2Q16 Net Interest Income $3,017 $2,945 $2,845 2.4 6.0 Taxable-equivalent Adjustment 51 50 51 2.0 - Net Interest Income (taxable-equivalent basis) 3,068 2,995 2,896 2.4 5.9 Noninterest Incom
Slide 10: Revenue
Revenue 2Q17 Revenue $5,448 $5,487 $5,324 44% 56% Net Interest Income* Noninterest Income Linked Quarter • Growth reflected higher net interest income as well as seasonally higher fee-based revenue 2Q16 1Q17 2Q17 Net Interest Income* Noninterest Income Year-over-Year • Revenue increased 4.2% excludi
Slide 11: Net Interest Income
Net Interest Income $2,995 $3,068 $2,896 Linked Quarter • Net interest income growth driven by loan growth, the impact of higher interest rates and an additional day in the quarter • Net interest margin increased 1bp due to rising interest rates, partially offset by the impact of a flatter yield cur
Slide 12: Noninterest Income
Noninterest Income $2,552 $2,419 Linked Quarter $238 $2,329 $212 • Solid growth in payment services revenue $207 $358 reflected typical seasonal patterns $380 $368 $410 • Growth in trust and investment $415 $434 management fees driven primarily by new account growth $666 $483 $490 Year-over-Year • E
Slide 13: Noninterest Expense
Noninterest Expense $2,992 $2,944 $3,023 Linked Quarter $241 $235 $242 • Increase driven by higher compensation $243 $247 $255 and marketing and business development $347 $267 $295 expense, partially offset by lower $490 $528 employee benefits cost $606 Year-over-Year • Total noninterest expense inc
Slide 14: Capital Position
Capital Position $ in billions 2Q17 1Q17 4Q16 3Q16 2Q16 Total U.S. Bancorp shareholders' equity $48.3 $47.8 $47.3 $47.8 $47.4 Standardized Approach Basel III transitional standardized approach Common equity tier 1 capital ratio 9.5% 9.5% 9.4% 9.5% 9.5% Tier 1 capital ratio 11.1% 11.0% 11.0% 11.1% 11
Slide 15: Appendix
Appendix U.S. BANCORP | 15
Slide 16: Average Loans
Average Loans Average Loans ($bn) Key Points Year-over-Year Growth vs. 2Q16 • Average total loans increased by $8.9 billion, or 3.4% 8.1% 7.6% 6.2% 4.1% 3.4% • Average commercial loans increased by $3.5 billion, or $273.2 $275.5 3.8% $269.6 $272.7 $266.6 • Average retail loans increased by $3.2 bill
Slide 17: Average Deposits
Average Deposits Average Deposits ($bn) Key Points Year-over-Year Growth vs. 2Q16 7.6% 10.0% 11.8% 11.0% 7.7% • Average total deposits increased by $23.8 billion, or 7.7% $329.2 $328.4 $331.2 $307.4 $318.5 • Average low-cost deposits (NIB, interest checking, money market and savings) 1.2% 2.8% 4.5%
Slide 18: Credit Quality – Commercial Loans
Credit Quality – Commercial Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 2Q16 1Q17 2Q17 Average Loans $92,154 $93,739 $95,638 30-89 Delinquencies 0.22% 0.23% 0.27% $92,154 $92,369 $93,807 $93,739 $95,638 90+ Delinquencies 0.05% 0.06% 0.05% Nonperforming Loans 0.53% 0.46% 0.
Slide 19: Credit Quality – Commercial Real Estate
Credit Quality – Commercial Real Estate Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 2Q16 1Q17 2Q17 Average Loans $42,988 $43,158 $42,549 30-89 Delinquencies 0.11% 0.15% 0.08% $42,988 $43,374 $43,391 $43,158 $42,549 90+ Delinquencies 0.03% 0.01% 0.00% Nonperforming Loans 0.24% 0.
Slide 20: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 2Q16 1Q17 2Q17 Average Loans $55,501 $57,900 $58,544 30-89 Delinquencies 0.28% 0.21% 0.22% $56,284 $56,718 $57,900 $58,544 90+ Delinquencies 0.27% 0.24% 0.20% $55,501 Nonperforming Loans 1.12% 0.99
Slide 21: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 2Q16 1Q17 2Q17 Average Loans $20,140 $20,845 $20,631 30-89 Delinquencies 1.15% 1.24% 1.22% $20,140 $20,628 $20,942 $20,845 $20,631 90+ Delinquencies 0.98% 1.23% 1.10% Nonperforming Loans 0.02% 0.01% 0.00% C
Slide 22: Credit Quality – Home Equity
Credit Quality – Home Equity Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 2Q16 1Q17 2Q17 Average Loans $16,394 $16,259 $16,252 30-89 Delinquencies 0.36% 0.33% 0.33% $16,394 $16,470 $16,444 $16,259 $16,252 90+ Delinquencies 0.24% 0.24% 0.25% Nonperforming Loans 0.78% 0.79% 0.74% H
Slide 23: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 2Q16 1Q17 2Q17 Average Loans $29,748 $31,056 $31,194 30-89 Delinquencies 0.47% 0.56% 0.65% $30,608 $31,245 $31,056 $31,194 90+ Delinquencies 0.10% 0.12% 0.11% $29,748 Nonperforming Loans 0.09% 0.09% 0.10%
Slide 24: Credit Quality – Auto Loans
Credit Quality – Auto Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 2Q16 1Q17 2Q17 Average Loans $16,690 $17,538 $17,533 30-89 Delinquencies 0.48% 0.64% 0.73% $17,205 $17,624 $17,538 $17,533 90+ Delinquencies 0.03% 0.05% 0.06% $16,690 Nonperforming Loans 0.08% 0.09% 0.12% In
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures June 30, March 31, December 31, September 30, June 30, (Dollars in Millions, Unaudited) 2017 2017 2016 2016 2016 Total equity $48,949 $48,433 $47,933 $48,399 $48,029 Preferred stock (5,419) (5,419) (5,501) (5,501) (5,501) Noncontrolling interests (629) (635) (635) (640) (
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures (Dollars in Millions, Unaudited) Three Months Ended June 30, March 31, December 31, September 30, June 30, 2017 2017 2016 2016 2016 Net interest income $3,017 $2,945 $2,955 $2,893 $2,845 Taxable-equivalent adjustment (1) 51 50 49 50 51 Net interest income, on a taxable-eq
Slide 27: U.S. Bancorp 2Q17 Earnings Conference Call
U.S. Bancorp 2Q17 Earnings Conference Call July 19, 2017 U.S. BANCORP