U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q1 2025 Earnings Presentation
44 slides from U.s. Bancorp's earnings presentation, Apr 16, 2025
Slide 1: U.S. Bancorp 1Q25 Earnings Conference Call
April 16, 2025 U.S. Bancorp 1Q25 Earnings Conference Call U.S. Bank | Confidential 1
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: 1Q25 Highlights
1Q25 Highlights $1.03 ▪ Prudent expense discipline Earnings per share › Six consecutive quarters of flat expenses and three straight quarters of positive operating leverage, as adjusted1 17.5% ▪ Steady financial performance Return on Tangible Common › Highly diversified revenue mix; Organic growth f
Slide 4: An Exceptional Banking Franchise
An Exceptional Banking Franchise Fee income represents 41% of Balance sheet3 Clients4 U.S. Bancorp’s total net revenue1 $669B Assets ~13M Consumers As a % of 26% 32% $610B Earning Assets ~1.4M Businesses Total Revenue1,2 ■ Payment Services $507B Deposits ~500K Wealth clients 42% ■ Consumer & Busines
Slide 5: Committed to Achieving Our Financial Targets
Committed to Achieving Our Financial Targets 1 Key strategic priorities Medium-term Targets ROA 1.15% to 1.35% 1 Expense Management Capacity to deliver positive operating leverage and fund organic growth ROTCE High teens 2 Organic Growth Deepening relationships, interconnected Fee Income product set
Slide 6: Delivering Positive Operating Leverage and Funding Organic Growth
1 Expense Management Delivering Positive Operating Leverage and Funding Organic Growth Efficiency and productivity momentum supported by four cost-save initiatives 6 consecutive quarters of expense discipline; Positive operating leverage for 3 straight quarters3 Year-over-year change 23.1%1 20.8%1 1
Slide 7: Prioritizing Organic Growth Opportunities
2 Organic Growth Prioritizing Organic Growth Opportunities Diversified fee businesses support our mid-single digit growth target Fee Revenue Growth1 Year over year growth (FY2024 vs. FY2023) Our growth target is supported by: +$87M ■ Improving momentum in fee +16.1% revenues +2.9% -8.2% ■ Dissipatin
Slide 8: Committed to Our Payments Franchise
3 Payments Transformation Committed to Our Payments Franchise Strategy focused on accelerating growth 1 Our “execution-focused” payments Trailing 12-months total purchase volume $ in Billions transformation entails: 4.0% CAGR ■ Redeploy expense saves to scale marketing efforts and sales capacity $85
Slide 9: Streamlining Our Execution
Streamlining Our Execution Wealth, Corporate, Consumer and Payment Commercial and Institutional Business Banking (CBB) Services Banking (WCIB) Branch and Payments: Payments: Institutional CBB Small Business Consumer and Merchant and WCIB Client Group Products Banking Small Business Institutional Pro
Slide 10: 1Q25 Results Summary
1Q25 Results Summary Income Statement Credit Quality Change vs. Prior Period Adjusted Change vs. 1 1 $ in millions, except EPS 1Q25 4Q24 1Q24 $ in millions 1Q25 4Q24 1Q24 2 Net interest income $4,122 (1.3) % 2.7 % Nonperforming assets $1,727 (5.7) % (3.3) % Noninterest income 2,836 0.1 5.0 NPA ratio
Slide 11: Performance Ratios
Performance Ratios Return on Return on Return on Efficiency Ratio1 & Average Assets Average Common Equity Tangible Common Equity1 Net Interest Margin 2 1 66.4% 1 1.03% 1.04% 12.7% 1 61.5% 1 1 12.3% 1 18.3% 60.8% 0.93% 11.6% 17.4% 17.5% 1 62.5% 1 60.8% 0.98% 12.1% 59.9% 17.4% 0.81% 15.1% 10.0% 2.70%
Slide 12: Balance Sheet Summary
Balance Sheet Summary Proactive balance sheet management and pricing discipline Total Average Deposits Total Average Loans $503 $514 $509 $512 $507 $371 $375 $374 $376 $379 2.77% 2.83% 2.79% 2.57% 6.20% 6.19% 6.25% 2.39% 6.03% 5.91% 1Q24 2Q24 3Q24 4Q24 1Q25 1Q24 2Q24 3Q24 4Q24 1Q25 Average Deposits
Slide 13: Net Interest Income
Net Interest Income 1Q25 4Q24 1Q24 Loans $5,533 $5,674 $5,712 Loans held for sale 28 50 37 Investment securities 1,308 1,326 1,175 Other interest income 647 781 840 Total interest income $7,516 $7,831 $7,764 Deposits $2,511 $2,772 $2,884 Short-term borrowings 249 257 270 Long-term debt 664 656 625 T
Slide 14: Noninterest Income
Noninterest Income 1Q25 4Q24 1Q24 Payments $1,002 $1,043 $977 Trust and investment management 680 703 641 Service charges 315 314 315 Capital markets revenue 382 364 388 Mortgage banking revenue 173 116 166 Investment product fees 87 87 77 Securities gains (losses), net — (1) 2 Other 197 207 134 Non
Slide 15: Noninterest Expense
Noninterest Expense 1Q25 4Q24 1Q24 Compensation and benefits $2,637 $2,607 $2,691 Technology and communications 533 534 507 Occupancy and equipment 306 317 296 Professional services 98 135 110 Marketing and business development 182 160 136 All other 476 449 454 1 Total Noninterest Expense, Adjusted
Slide 16: Credit Quality
Credit Quality Trends were favorable linked quarter despite continued stress in CRE Office and economic uncertainty Net Charge-offs and Nonperforming Assets Allowance for Credit Losses Change vs. by Loan Category, 1Q25 Amount Reserve 1Q25 4Q24 1Q24 ($B) (%) Non-performing Assets Commercial $2.2 1.5%
Slide 17: Capital Management
Capital Management Balancing our continued capital accretion with modest share buybacks CET1 Ratio1 10.5% 10.6% 10.8% 10.0% 10.3% 7.6% CET1 Ratio 8.5% Regulatory Minimum Binding Capital Constraint 1Q23 1Q24 2Q24 3Q24 4Q24 1Q25 CET1 Ratio 6.5% 7.8% 8.1% 8.6% 8.6% 8.8% including AOCI 2 1st Quarter Hig
Slide 18: Balance Sheet and Net Interest Margin Path
Balance Sheet and Net Interest Margin Path Projected Balance Sheet Path Projected NIM Expansion Drivers Total Average Assets 1Q25 NIM 2.72% $675-685B $685-695B $700B+ $669B Loan Growth/Mix + ‘+10 to 20bps Fixed Repricing Investment Portfolio Mgmt ‘+10 to 15bps + Fixed Repricing Deposit Mix + ‘+5 to
Slide 19: Guidance – 2Q and FY 2025
Guidance – 2Q and FY 2025 1Q25 Performance 1Q Guidance 1Q Result Relatively stable Net interest income1 vs. Q4 2024 of $4,176M (excluding day count impact) $4,122M Relatively stable Total noninterest expense vs. Q4 2024 adjusted of $4,202M2 $4,232M Positive operating leverage3 200+ bps 270 bps2 2Q25
Slide 20: Marching Towards Our Medium-Term Targets
Marching Towards Our Medium-Term Targets Medium-term 1Q 2024 1Q 2025 Target5 Return on Average Assets 0.93%1 1.04% 1.15% to 1.35% 17.4%1 4 Return on Tangible Common Equity 17.5% High Teens Fee Income Growth2 6.3% 5.1% Mid-single digits 4 Efficiency 62.5%1 60.8% Mid-to-high 50s Committed to Positive
Slide 21: The Path Forward
The Path Forward Strong Foundation... Efficient Execution... Organic Growth... Foundation Execution Growth ▪ Deep management ▪ Acquired scale / ▪ Greater bench and culture capabilities interconnectivity ▪ Risk and financial ▪ Accelerated ▪ Payments discipline capital build transformation ▪ Diversifi
Slide 22: Appendix
Appendix U.S. Bancorp 22
Slide 23: Income Statement Detail
Income Statement Detail Excluding Notable Items2 Reported % Change Notable Items2 % Change $ in millions, except EPS 1Q25 4Q24 1Q24 vs 4Q24 vs 1Q24 1Q25 4Q24 1Q24 vs 4Q24 vs 1Q24 Net Interest Income $4,092 $4,146 $3,985 (1.3) % 2.7 % $— $— $— (1.3) % 2.7 % Taxable-equivalent Adjustment 30 30 30 — —
Slide 24: Average Loans
Average Loans Average % of Average Change vs. $375.7 $379.0 1Q 2025 Balance Total 4Q24 1Q24 $371.1 Commercial1 $140 37% 3.5 % 7.2 % Commercial Real Estate 49 13% (2.0) (7.8) Residential Mortgages 119 31% 0.4 2.8 Credit Card 29 8% (0.1) 5.2 Other Retail 42 11% (1.9) (4.4) Total Loans $379 0.9 % 2.1 %
Slide 25: Average Deposits
Average Deposits Average Average Change vs. 1Q 2025 Balance 4Q24 1Q24 $503.1 $512.3 $506.5 Noninterest-bearing deposits $80 (3.9) % (6.0) % Money market savings 195 (5.4) (0.5) Interest checking 126 0.4 0.5 Savings accounts 50 22.0 20.7 Time deposits 56 (1.9) 0.6 Total interest-bearing deposits $427
Slide 26: Capital Position
Capital Position $ in billions 1Q25 4Q24 3Q24 2Q24 1Q24 Total U.S. Bancorp shareholders’ equity $60.1 $58.6 $58.9 $56.4 $55.6 Basel III Standardized Approach 1 2 2 2 2 Fully implemented common equity tier 1 capital ratio 10.8 % 10.5 % 10.5 % 10.2 % 9.9 % Tier 1 capital ratio 12.4 % 12.2 % 12.2 % 11.
Slide 27: Payment Services
Payment Services Payments Total Net Revenue by Business (1Q25) Highlights 32% • New PCS and PMI heads driving payments Payments: Consumer & Small Business (PCS) transformation Payments: Merchant & Institutional (PMI) 68% • Launched a new industry leading Shield card with 24- month 0% intro APR 42% •
Slide 28: Credit Quality – Commercial
Credit Quality – Commercial Average Loans ($M) and Net Charge-offs Ratio Key Statistics $ in millions 1Q24 4Q24 1Q25 Linked Quarter Growth Average Loans $130,767 $135,384 $140,130 (0.3)% 2.7% (0.9)% 1.7% 3.5% 30-89 Delinquencies 0.23 % 0.26 % 0.21 % $140,130 90+ Delinquencies 0.08 % 0.07 % 0.07 % $1
Slide 29: Credit Quality – Commercial Real Estate
Credit Quality – Commercial Real Estate Average Loans ($M) and Net Charge-offs Ratio Key Statistics $ in millions 1Q24 4Q24 1Q25 Linked Quarter Growth Average Loans $53,037 $49,871 $48,890 (1.5)% (1.4)% (1.6)% (3.1)% (2.0)% 30-89 Delinquencies 0.04 % 0.16 % 0.12 % 90+ Delinquencies 0.00 % 0.02 % 0.0
Slide 30: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($M) and Net Charge-offs Ratio Key Statistics $ in millions 1Q24 4Q24 1Q25 Linked Quarter Growth Average Loans $115,639 $118,406 $118,844 0.4% 0.7% 0.9% 0.7% 0.4% 30-89 Delinquencies 0.12 % 0.16 % 0.25 % 90+ Delinquencies 0.12 % 0.17 % 0.19 % $115,
Slide 31: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($M) and Net Charge-offs Ratio Key Statistics $ in millions 1Q24 4Q24 1Q25 Linked Quarter Growth Average Loans $27,942 $29,438 $29,404 30-89 Delinquencies 1.40 % 1.41 % 1.31 % 0.7% 1.5% 2.3% 1.5% (0.1)% 90+ Delinquencies 1.42 % 1.43 % 1.40 % $28,349 $28,994
Slide 32: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($M) and Net Charge-offs Ratio Key Statistics $ in millions 1Q24 4Q24 1Q25 Linked Quarter Growth Average Loans $43,685 $42,556 $41,760 (2.9)% (1.0)% (0.7)% (0.9)% (1.9)% 30-89 Delinquencies 0.55 % 0.54 % 0.50 % 90+ Delinquencies 0.15 % 0.15 % 0.14 % $43,68
Slide 33: Financial Targets
Financial Targets Medium-term1 Key assumptions2 Modest GDP growth ROA 1.15% to 1.35% Stable unemployment rate Moderating inflation ROTCE High teens Current tax policy Fee Income Growth Mid-single digits Fed Funds rate path consistent with market implied Upward sloping yield curve driven by rate cuts
Slide 34: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended (Dollars in Millions, Unaudited) March 31, 2025 December 31, 2024 March 31, 2024 Net interest income $ 4,092 $ 4,146 $ 3,985 Taxable-equivalent adjustment (1) 30 30 30 Net interest income, on a taxable-equivalent basis 4,122 4,176 4,015 Net interest inc
Slide 35: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended (Dollars in Millions, Unaudited) March 31, 2025 December 31, 2024 March 31, 2024 Net income applicable to U.S. Bancorp common shareholders $ 1,603 $ 1,581 $ 1,209 Intangibles amortization (net-of-tax) 97 110 115 Net income applicable to U.S. Bancorp com
Slide 36: Non-GAAP Financial Measures
Non-GAAP Financial Measures March 31, December 31, September 30, June 30, March 31, (Dollars and Shares in Millions Except Per Share Data, Unaudited) 2025 2024 2024 2024 2024 Total equity $ 60,558 $ 59,040 $ 59,321 $ 56,885 $ 56,033 Preferred stock (6,808) (6,808) (6,808) (6,808) (6,808) Noncontroll
Slide 37: Non-GAAP Financial Measures
Non-GAAP Financial Measures March 31, December 31, September 30, June 30, March 31, March 31, (Dollars in Millions, Unaudited) 2025 2024 2024 2024 2024 2023 Common equity tier 1 capital, determined in accordance with transitional regulatory capital requirements related to the current expected credit
Slide 38: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended ($ in millions) March 31, 2025 Line of Business Financial Performance Net Revenue Wealth, Corporate, Commercial and Institutional Banking $ 2,910 Consumer and Business Banking 2,166 Payment Services 1,778 Treasury and Corporate Support 104 Total Company
Slide 39: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended March 31, March 31, December 31, December 31, September 30, September 30, (Dollars in Millions, Unaudited) 2025 2024 2024 2023 2024 2023 Net interest income $ 4,092 $ 3,985 $ 4,146 $ 4,111 $ 4,135 $ 4,236 Taxable-equivalent adjustment (1) 30 30 30 31 31
Slide 40: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended June 30, June 30, March 31, March 31, December 31, December 31, (Dollars in Millions, Unaudited) 2024 2023 2024 2023 2023 2022 Net interest income $ 4,023 $ 4,415 $ 3,985 $ 4,634 $ 4,111 $ 4,293 Taxable-equivalent adjustment (1) 29 34 30 34 31 32 Net in
Slide 41: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended September 30, September 30, June 30, June 30, March 31, March 31, (Dollars in Millions, Unaudited) 2023 2022 2023 2022 2023 2022 Net interest income $ 4,236 $ 3,827 $ 4,415 $ 3,435 $ 4,634 $ 3,173 Taxable-equivalent adjustment (1) 32 30 34 29 34 27 Net
Slide 42: Notes
Notes 1. Based on a federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes. 2. Notable items for the three months ended December 31, 2024 of $109 million ($82 million net-of-tax) included lease impairments and op
Slide 43: Notes
Notes 1. Notable items for the three months ended September 30, 2022 included $42 million ($33 million net-of-tax) of merger and integration-related charges 2. Notable items for the three months ended June 30, 2022 included $197 million ($153 million net of tax) of merger and integration- related ch
Slide 44: U.S. Bancorp
U.S. Bancorp 44