28 slides from U.s. Bancorp's earnings presentation, Jul 17, 2019
Slide 1: U.S. Bancorp 2Q19 Earnings Conference Call
U.S. Bancorp 2Q19 Earnings Conference Call July 17, 2019 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: 2Q19 Highlights
2Q19 Highlights Income Statement change vs. Credit Quality change vs. $ in millions, except EPS 2Q19 1Q19 2Q18 $ in millions 2Q19 1Q19 2Q18 Net interest income* $3,332 1.4 % 3.3 % Nonperforming assets $953 (5.2) % (12.6) % Noninterest income 2,490 8.7 3.1 NPA ratio 0.33% (2 bps) (6 bps) Reported net
Slide 4: Performance Ratios
Performance Ratios Return on Return on Return on Efficiency Ratio* & Average Assets Average Common Equity Tangible Common Equity* Net Interest Margin 1.54% 1.55% 15.3% 15.0% 19.8% 1.49% 18.4% 19.2% 54.8% 55.4% 54.3% 14.3% 3.13% 3.16% 3.13% 2Q18 1Q19 2Q19 2Q18 1Q19 2Q19 2Q18 1Q19 2Q19 2Q18 1Q19 2Q19
Slide 5: Average Loans
Average Loans Change vs. (Three months ended 6/30/19) Avg. Balances 1Q19 2Q18 $286.1 $289.2 Commercial $103.2 1.2 % 5.0 % $278.6 Commercial Real Estate 39.4 (0.3) (1.2) Residential Mortgages 66.8 1.9 9.9 Credit Card 22.8 1.0 7.6 Retail 57.0 0.8 2.7 Covered - - nm Total loans $289.2 1.1 % 3.8 % Total
Slide 6: Average Deposits
Average Deposits Interest-bearing Deposits $335.4 $345.2 Average Change vs. Change $334.8 (Three months ended 6/30/19) Balances 1Q19 2Q18 Rates vs. 1Q19 Money market savings $108.6 9.3 % 5.1 % 1.61 % 0.08 % Interest checking 70.4 (2.4) 0.7 0.30 (0.05) Savings accounts 46.0 1.7 2.0 0.23 0.02 Time dep
Slide 7: Credit Quality
Credit Quality Net Charge-offs Nonperforming Assets $367 $350 $332 NCO Ratio $1,091 NPAs $1,005 $953 -3 bps QoQ -5.2% QoQ 0.48% 0.52% 0.49% +1 bp YoY 0.39% 0.35% 0.33% -12.6% YoY 2Q18 1Q19 2Q19 2Q18 1Q19 2Q19 NCOs NCOs/Avg Loans NPAs NPAs/Period-end Loans plus OREO Provision for Credit Losses $15 $1
Slide 8: Earnings Summary
Earnings Summary $ and shares in millions, except EPS Reported % Change 2Q19 1Q19 2Q18 vs. 1Q19 vs. 2Q18 Net Interest Income $3,305 $3,259 $3,197 1.4 3.4 Taxable-equivalent Adjustment 27 27 29 - (6.9) Net Interest Income (taxable-equivalent basis) 3,332 3,286 3,226 1.4 3.3 Noninterest Income 2,490 2
Slide 9: Net Interest Income
Net Interest Income $3,286 $3,332 $3,226 Linked Quarter • Net interest income growth was primarily driven by growth in earning assets, an additional day in the second quarter and higher interest recoveries. • The net interest margin declined, primarily due to the inversion of the yield curve in the
Slide 10: Noninterest Income
Noninterest Income Linked Quarter • Payment services revenue growth reflects seasonally higher sales $2,414 $2,490 as well as a recovery in consumer spending activity. $2,291 $189 $191 • Commercial products revenue growth reflects higher corporate $169 $415 bond fees and other capital markets revenu
Slide 11: Noninterest Expense
Noninterest Expense Linked Quarter $3,085 $3,087 $3,153 • Compensation expense increased due to the impact of $242 $257 $270 seasonal merit increases and an additional day in the second $262 $277 $281 quarter. $286 $256 $290 • Growth in professional services expense and marketing and $454 $405 $424
Slide 12: Capital Position
Capital Position $ in billions 2Q19 1Q19 4Q18 3Q18 2Q18 Total U.S. Bancorp shareholders' equity $52.9 $52.1 $51.0 $50.4 $49.6 Basel III Standardized Approach Common equity tier 1 capital ratio 9.5% 9.3% 9.1% 9.0% 9.1% Tier 1 capital ratio 11.0% 10.9% 10.7% 10.6% 10.5% Total risk-based capital ratio
Slide 13: Digital Engagement Trends
Digital Engagement Trends Transactions (% of Total) 80% 65% 67% 62% Digital Active Customers 60% (% of Total Active Customers)* 38% 35% 40% 33% 80% 72% 70% 20% 67% 0% 60% Three months ended 54% 52% 52% 5/31/17 5/31/18 5/31/19 50% 44% Total Digital Branch, ATM, Phone and IVR 41% 40% Loan Sales (% of
Slide 14: Appendix
Appendix U.S. BANCORP | 14
Slide 15: Average Loans
Average Loans Average Loans ($bn) Key Points Year-over-Year Growth vs. 2Q18 • Average total loans increased by $10.6 billion, or 3.8% 1.1% 1.2% 1.4% 2.4% 3.8% • Average commercial loans increased by $4.9 billion, $286.1 $289.2 or 5.0% $278.6 $281.1 $283.7 • Average residential mortgage loans increas
Slide 16: Average Deposits
Average Deposits Average Deposits ($bn) Key Points Year-over-Year Growth vs. 2Q18 1.1% (1.5%) (1.4%) 0.2% 3.1% • Average total deposits increased by $10.4 billion, or 3.1% $334.8 $334.4 $335.4 $345.2 $330.1 • Average low-cost deposits (NIB, interest (4.5%) (6.2%) (7.6%) (7.5%) checking, savings and
Slide 17: Credit Quality – Commercial
Credit Quality – Commercial Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 2Q18 1Q19 2Q19 Average Loans $98,353 $101,960 $103,233 0.9% 0.7% 1.5% 1.4% 1.2% 30-89 Delinquencies 0.23% 0.58% 0.34% $99,048 $100,515 $101,960 $103,233 90+ Delinquencies 0.06% 0.07% 0.
Slide 18: Credit Quality – Commercial Real Estate
Credit Quality – Commercial Real Estate Average Loans ($mm) and Net Charge-offs Ratio Key Statistics $mm 2Q18 1Q19 2Q19 Linked Quarter Growth Average Loans $39,857 $39,470 $39,365 (1.3%) (0.8%) 1.5% (1.7%) (0.3%) 30-89 Delinquencies 0.11% 0.11% 0.07% 90+ Delinquencies 0.01% 0.01% 0.00% $39,857 $39,5
Slide 19: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 2Q18 1Q19 2Q19 Average Loans $60,834 $65,582 $66,834 1.1% 2.0% 3.9% 1.7% 1.9% 30-89 Delinquencies 0.27% 0.26% 0.26% $64,476 $65,582 $66,834 90+ Delinquencies 0.18% 0.18% 0.17%
Slide 20: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 2Q18 1Q19 2Q19 Average Loans $21,220 $22,597 $22,830 (0.3%) 2.6% 2.9% 0.9% 1.0% 30-89 Delinquencies 1.22% 1.31% 1.23% $22,396 $22,597 $22,830 $21,220 $21,774 90+ Delinquencies 1.15% 1.
Slide 21: Credit Quality – Home Equity
Credit Quality – Home Equity Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 2Q18 1Q19 2Q19 Average Loans $16,048 $15,993 $15,831 (0.9%) (0.3%) 0.4% (0.4%) (1.0%) 30-89 Delinquencies 0.39% 0.54% 0.51% $16,048 $16,000 $16,065 $15,993 $15,831 90+ Delinquencies 0.
Slide 22: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 2Q18 1Q19 2Q19 Average Loans $8,150 $8,586 $8,547 2.1% 2.9% 1.3% 1.1% (0.5%) 30-89 Delinquencies 0.30% 0.42% 0.45% 90+ Delinquencies 0.02% 0.03% 0.02% $8,383 $8,489 $8,586 $8,547 No
Slide 23: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 2Q18 1Q19 2Q19 Average Loans $31,265 $31,922 $32,578 (4.9%) 0.8% 0.2% 1.1 % 2.1% 30-89 Delinquencies 0.75% 0.78% 0.80% $31,922 $32,578 90+ Delinquencies 0.13% 0.14% 0.13% $31,265 $31,
Slide 24: Credit Quality – Auto Loans
Credit Quality – Auto Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Linked Quarter Growth $mm 2Q18 1Q19 2Q19 Average Loans $18,599 $18,833 $19,023 (1.4%) (0.2%) (0.3%) 1.8% 1.0% 30-89 Delinquencies 0.90% 0.95% 1.01% $18,599 $18,563 $18,833 $19,023 90+ Delinquencies 0.08% 0.08% 0
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures (Dollars in Millions, Unaudited) Three Months Ended June 30, March 31, June 30, 2019 2019 2018 Net interest income $3,305 $3,259 $3,197 Taxable-equivalent adjustment (1) 27 27 29 Net interest income, on a taxable-equivalent basis 3,332 3,286 3,226 Net interest income, on
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended June 30, March 31, June 30, (Dollars in Millions, Unaudited) 2019 2019 2018 Net income applicable to U.S. Bancorp common shareholders $1,741 $1,613 $1,678 Intangibles amortization (net-of-tax) 33 32 32 Net income applicable to U.S. Bancorp common shareh
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures June 30, March 31, December 31, September 30, June 30, (Dollars in Millions, Unaudited) 2019 2019 2018 2018 2018 Total equity $53,540 $52,686 $51,657 $51,007 $50,257 Preferred stock (5,984) (5,984) (5,984) (5,984) (5,419) Noncontrolling interests (627) (629) (628) (632) (
Slide 28: U.S. Bancorp 2Q19 Earnings Conference Call
U.S. Bancorp 2Q19 Earnings Conference Call July 17, 2019 U.S. BANCORP