31 slides from U.s. Bancorp's earnings presentation, Apr 16, 2014
Slide 1: U.S. Bancorp 1Q14 Earnings Conference Call
Exhibit 99.2 U.S. Bancorp 1Q14 Earnings Conference Call Richard K. Davis Chairman, President and CEO Andy Cecere April 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: 1Q14 Highlights
1Q14 Earnings 1Q14 Highlights Conference Call Net income of $1.4 billion; $0.73 per diluted common share Average loan growth of 6.0% vs. 1Q13 and average loan growth of 1.3% vs. 4Q13 Average deposit growth of 5.1% vs. 1Q13 and 0.2% vs. 4Q13 Net charge-offs declined 21.2% vs. 1Q13 Nonperforming asset
Slide 4: Performance Ratios
1Q14 Earnings Performance Ratios Conference Call Return on Average Common Equity Efficiency Ratio and and Return on Average Assets Net Interest Margin 20% 3.0% 65% 4.0% 3.48% 17% 2.5% 60% 3.43% 3.43% 3.40% 3.5% 16.0% 16.1% 3.35% 15.8% 15.4% 14.6% 14% 2.0% 55% 3.0% 1.70% 54.9% 1.65% 1.65% 1.62% 1.56%
Slide 5: Revenue Growth
1Q14 Earnings Revenue Growth Conference Call $ in millions Year-Over-Year Change (1.1%) (2.4%) (5.6%) (4.4%) (1.2%) 5,500 $4,948 5,000 $4,874 $4,891 $4,889 $4,814 4,500 4,000 3,500 1Q13 2Q13 3Q13 4Q13 1Q14 5 Taxable-equivalent basis
Slide 6: Loan and Deposit Growth
1Q14 Earnings Loan and Deposit Growth Conference Call $ in billions Average Balances Year-Over-Year Growth 5.4% 5.1% 5.5% $257.5 260.0 7.0% $256.9 7.3% $252.4 $247.4 $245.0 6.0% 5.7% 240.0 5.7% $235.9 5.2% $232.8 5.8% $229.4 $225.2 $222.4 220.0 200.0 180.0 1Q13 2Q13 3Q13 4Q13 1Q14 Loans Deposits 6
Slide 7: Credit Quality
1Q14 Earnings Credit Quality Conference Call $ in millions Net Charge-offs Nonperforming Assets* 600 3.00% 3,200 3.00% $433 450 2.25% 2,400 2.25% $392 $2,029 $341 $1,921 $1,880 $328 $1,813 $1,794 $312 300 1.50% 1,600 1.50% 0.95% 0.79% 0.88% 0.85% 0.70% 0.80% 0.78% 0.57% 0.59% 0.75% 150 0.53% 0.75% 8
Slide 8: Earnings Summary
1Q14 Earnings Earnings Summary Conference Call $ in millions, except per-share data % B/(W) 1Q14 4Q13 1Q13 vs 4Q13 vs 1Q13 Net Interest Income $ 2,706 $ 2,733 $ 2,709 (1.0) (0.1) Noninterest Income 2,108 2,156 2,165 (2.2) (2.6) Total Revenue 4,814 4,889 4,874 (1.5) (1.2) Noninterest Expense 2,544 2,
Slide 9: 1Q14 Results - Key Drivers
1Q14 Earnings 1Q14 Results - Key Drivers Conference Call vs. 1Q13 Net Revenue decline of 1.2% • Net interest income flat; net interest margin of 3.35% vs. 3.48% in 1Q13 • Noninterest income decline of 2.6% Noninterest expense increase of 3.0% Provision for credit losses lower by $97 million • Net ch
Slide 10: Capital Position
1Q14 Earnings Capital Position Conference Call $ in billions 1Q14 4Q13 3Q13 2Q13 1Q13 Total U.S. Bancorp shareholders' equity $ 42.1 $ 41.1 $ 40.1 $ 39.7 $ 39.5 Basel III transitional standardized approach/Basel I (a) Common equity tier 1 capital 29.5 27.9 27.3 26.8 26.3 Tier 1 capital 34.6 33.4 32.
Slide 11: Capital Actions
1Q14 Earnings Capital Actions Conference Call Share repurchase authorization and expected dividend increase announced th March 26 • Expect to increase annual dividend from $0.92 to $0.98, a 6.5% increase, effective 2Q14 • One year authorization to repurchase up to $2.3 billion of outstanding stock e
Slide 12: 1Q14 Earnings Conference Call
1Q14 Earnings Conference Call 12
Slide 13: Appendix
1Q14 Earnings Conference Call Appendix 13
Slide 14: Average Loans
1Q14 Earnings Average Loans Conference Call $ in billions Average Loans Key Points Year-Over-Year Growth vs. 1Q13 5.8% 5.2% 5.7% 5.7% 6.0% Average total loans grew by $13.5 billion, or 6.0% 280 Average total loans, excluding covered loans, $232.8 $235.9 were higher by 7.6% $222.4 $225.2 $229.4 0.9%
Slide 15: Average Deposits
1Q14 Earnings Average Deposits Conference Call $ in billions Average Deposits Key Points Year-Over-Year Growth vs. 1Q13 7.3% 7.0% 5.5% 5.4% 5.1% Average total deposits increased by $12.5 billion, or 5.1% 320 Average low cost deposits (NIB, interest $257.5 $245.0 $247.4 $252.4 $256.9 checking, money
Slide 16: Net Interest Income
1Q14 Earnings Net Interest Income Conference Call $ in millions Net Interest Income Key Points Year-Over-Year Growth vs. 1Q13 0.7% (1.5%) (2.5%) (1.8%) (0.1%) Average earning assets grew by $12.2 billion, 4,000 8.0% or 3.9% Net interest margin lower by 13 bps (3.35% 3,000 $2,709 $2,672 $2,714 $2,733
Slide 17: Noninterest Income
1Q14 Earnings Noninterest Income Conference Call $ in millions Noninterest Income Key Points vs. 1Q13 Year-Over-Year Growth Noninterest income declined by $57 million, or (3.3%) (3.4%) (9.1%) (7.4%) (2.6%) 2.6%, driven by: • Mortgage banking revenue decline of $165 million • Higher credit and debit
Slide 18: Noninterest Expense
1Q14 Earnings Noninterest Expense Conference Call $ in millions Noninterest Expense Key Points vs. 1Q13 Year-Over-Year Change Noninterest expense was higher by $74 million, or (3.5%) (1.7%) (1.7%) (0.1%) 3.0% 3.0%, driven by: 3,200 • Higher compensation expense (3.0% increase) due to growth in staff
Slide 19: Credit Quality - Commercial Loans
1Q14 Earnings Credit Quality - Commercial Loans Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 1Q13 4Q13 1Q14 80,000 4.0% Average Loans $59,921 $63,714 $65,645 $62,856 $63,714 $65,645 30-89 Delinquencies 0.20% 0.33% 0.25% $59,921 $61,507 60,000 3.0% 90+ Delinqu
Slide 20: Credit Quality - Commercial Leases
1Q14 Earnings Credit Quality - Commercial Leases Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 1Q13 4Q13 1Q14 9,000 3.0% Average Loans $5,378 $5,210 $5,189 30-89 Delinquencies 0.82% 0.85% 0.74% 6,000 $5,378 $5,255 $5,208 $5,210 $5,189 2.0% 90+ Delinquencies 0.
Slide 21: Credit Quality - Commercial Real Estate
1Q14 Earnings Credit Quality - Commercial Real Estate Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 1Q13 4Q13 1Q14 60,000 1.5% Average Loans $37,218 $39,318 $40,050 30-89 Delinquencies 0.22% 0.24% 0.14% $38,501 $39,318 $40,050 90+ Delinquencies 0.02% 0.07% 0.0
Slide 22: Credit Quality - Residential Mortgage
1Q14 Earnings Credit Quality - Residential Mortgage Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 1Q13 4Q13 1Q14 60,000 4.0% Average Loans $45,109 $50,732 $51,584 $50,732 $51,584 $49,139 30-89 Delinquencies 0.71% 0.70% 0.59% $46,873 $45,109 90+ Delinquencies 0
Slide 23: Credit Quality - Credit Card
1Q14 Earnings Credit Quality - Credit Card Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 1Q13 4Q13 1Q14 10.0% 20,000 Average Loans $16,528 $17,366 $17,407 $16,931 $17,366 $17,407 $16,528 $16,416 30-89 Delinquencies 1.24% 1.25% 1.19% 15,000 7.5% 90+ Delinquenci
Slide 24: Credit Quality - Home Equity
1Q14 Earnings Credit Quality - Home Equity Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 1Q13 4Q13 1Q14 24,000 6.0% Average Loans $16,434 $15,488 $15,366 30-89 Delinquencies 0.70% 0.66% 0.57% 18,000 $16,434 4.5% 90+ Delinquencies 0.27% 0.32% 0.33% $15,989 $15,
Slide 25: Credit Quality - Retail Leasing
1Q14 Earnings Credit Quality - Retail Leasing Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 1Q13 4Q13 1Q14 9,000 1.5% Average Loans $5,448 $5,847 $5,979 30-89 Delinquencies 0.12% 0.18% 0.16% $5,448 $5,653 $5,664 $5,847 $5,979 1.0% 90+ Delinquencies 0.02% 0.00%
Slide 26: Credit Quality - Other Retail
1Q14 Earnings Credit Quality - Other Retail Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 1Q13 4Q13 1Q14 40,000 4.0% Average Loans $25,364 $26,059 $26,312 30-89 Delinquencies 0.48% 0.50% 0.40% 90+ Delinquencies 0.16% 0.14% 0.13% 30,000 3.0% $25,364 $25,682 $26
Slide 27: Credit Quality - Auto Loans
1Q14 Earnings Credit Quality - Auto Loans Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 1Q13 4Q13 1Q14 16,000 0.8% Average Loans $12,519 $13,409 $13,815 $13,815 $13,409 $12,519 $12,575 $12,946 30-89 Delinquencies 0.30% 0.34% 0.26% 12,000 0.6% 90+ Delinquencies
Slide 28: Mortgage Repurchase
1Q14 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 1Q14 4Q13 3Q13 2Q13 1Q13 • Conservative credit and Beginning Reserve $83 $176 $190 $233 $240 under
Slide 29: Non-GAAP Financial Measures
1Q14 Earnings Non-GAAP Financial Measures Conference Call $ in millions 1Q14 4Q13 3Q13 2Q13 1Q13 Total equity $ 42,743 $ 41,807 $ 41,552 $ 41,050 $ 40,847 Preferred stock (4,756) (4,756) (4,756) (4,756) (4,769) Noncontrolling interests (689) (694) (1,420) (1,367) (1,316) Goodwill (net of deferred ta
Slide 30: Non-GAAP Financial Measures
1Q14 Earnings Non-GAAP Financial Measures Conference Call $ in millions 1Q14 4Q13 3Q13 2Q13 1Q13 Total assets $ 371,289 $ 364,021 $ 360,681 $ 353,415 $ 355,447 Goodwill (net of deferred tax liability) (1) (8,352) (8,343) (8,319) (8,317) (8,333) Intangible assets, other than mortgage servicing rights
Slide 31: U.S. Bancorp 1Q14 Earnings Conference Call
U.S. Bancorp 1Q14 Earnings Conference Call April 16, 2014