U.s. Bancorp · NYSE:USB
U.s. Bancorp — Q4 2017 Earnings Presentation
27 slides from U.s. Bancorp's earnings presentation, Jan 17, 2018
Slide 1: U.S. Bancorp 4Q17 Earnings Conference Call
U.S. Bancorp 4Q17 Earnings Conference Call January 17, 2018 Exhibit 99.2
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: Notable Items
Notable Items 4Q17 notable items include: $910 million increase to net earnings related to the impacts of tax reform legislation passed in late 4Q17 $608 million legal and regulatory accrual $150 million contribution to the U.S. Bank Foundation $67 million one-time bonus to certain eligible employee
Slide 4: 4Q17 Highlights
4Q17 Highlights * Taxable-equivalent basis; see slide 26 for calculation ** Estimated for the Basel III fully implemented standardized approach; RWA = risk-weighted assets, see slide 25 for calculation
Slide 5: Performance Ratios
Performance Ratios Return on Average Common Equity Efficiency Ratio** & Net Interest Margin*** * Excluding notable items; see slide 26 for calculation ** Non-GAAP; see slide 26 for calculation *** Taxable-equivalent basis Return on Average Assets 14.7% 1.46% 70.0%
Slide 6: Average Loans
Average Loans +0.8% linked quarter +2.6% year-over-year Linked quarter growth in total loans was driven primarily by other retail loans, commercial loans and residential mortgage Year-over-year and linked quarter declines in commercial real estate loans reflected disciplined underwriting of construc
Slide 7: Average Deposits
Average Deposits +1.2% linked quarter +3.0% year-over-year $ in billions Rates are presented on a fully taxable-equivalent basis utilizing a tax rate of 35 percent Interest-bearing Deposits Average noninterest-bearing deposits increased 0.4% on a linked quarter basis Average noninterest-bearing depo
Slide 8: Credit Quality
Credit Quality $ in millions NCO Ratio -1bp QoQ -1bp YoY NPAs -4.1% QoQ -25.1% YoY
Slide 9: Earnings Summary
Earnings Summary Notable Excluding $ and shares in milions, except EPS 4Q17 Net Interest Income $3,144 Tavable-equivalent Adjustment 53 Net Interest Income xable-equivalent basis) 3,197 2441 Net Revenue 5,638 i 3,939 Operating Income 1,699 Net Charge-offs 325 Excess Provision 10 Income Before Taxes
Slide 10: Net Interest Income
Net Interest Income Linked Quarter Net interest income growth was driven by loan growth and the impact of rising interest rates The decrease in the net interest margin was primarily due to higher interest recoveries in 3Q17 Year-over-Year Net interest income growth was driven primarily by the impact
Slide 11: Noninterest Income
Noninterest Income $ in millions Payments = credit and debit card, corporate payment products and merchant processing Service charges = deposit service charges, treasury management and ATM processing $2,431 $2,422 $2,441 Linked Quarter Noninterest income growth was driven by trust and investment man
Slide 12: Noninterest Expense
Noninterest Expense $3,004 $3,039 $3,939 Linked Quarter Fourth quarter noninterest expense included notable items which totaled $825 million Excluding notable items, noninterest expense increased 2.5%, driven by seasonally higher costs related to investments in tax-advantaged projects, seasonally hi
Slide 13: Capital Position
Capital Position RWA = risk-weighted assets * See Non-GAAP Financial Measures reconciliation on slide 25
Slide 14: Appendix
Appendix
Slide 15: Average Loans
Average Loans vs. 4Q16 Average total loans increased by $7.1 billion, or 2.6% Average commercial loans increased by $3.8 billion, or 4.0% Average retail loans increased by $3.3 billion, or 6.0% Average residential mortgage loans increased by $2.9 billion, or 5.2% vs. 3Q17 Average total loans increas
Slide 16: Average Deposits
Average Deposits Key Points Average Deposits ($bn) vs. 4Q16 Average total deposits increased by $10.0 billion, or 3.0% Average low-cost deposits (NIB, interest checking, money market and savings) increased by $4.7 billion, or 1.6% vs. 3Q17 Average total deposits increased by $4.0 billion, or 1.2% Av
Slide 17: Credit Quality – Commercial Loans
Credit Quality – Commercial Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm4Q163Q174Q17 Average Loans$93,807$96,633$97,558 30-89 Delinquencies0.28%0.22%0.26% 90+ Delinquencies0.06%0.05%0.06% Nonperforming Loans0.52%0.28%0.26% 2017 loan growth was driven by up-tierin
Slide 18: Credit Quality – Commercial Real Estate
Credit Quality – Commercial Real Estate Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm4Q163Q174Q17 Average Loans$43,391$41,621$41,009 30-89 Delinquencies0.10%0.15%0.09% 90+ Delinquencies0.02%0.01%0.01% Nonperforming Loans0.29%0.29%0.35% Performing TDRs*$169$141$138 * TDR
Slide 19: Credit Quality – Residential Mortgage
Credit Quality – Residential Mortgage Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm4Q163Q174Q17 Average Loans$56,718$59,030$59,639 30-89 Delinquencies0.26%0.26%0.33% 90+ Delinquencies0.27%0.18%0.22% Nonperforming Loans1.04%0.80%0.74% * Excludes GNMA loans, whose repayme
Slide 20: Credit Quality – Credit Card
Credit Quality – Credit Card Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm4Q163Q174Q17 Average Loans$20,942$20,926$21,218 30-89 Delinquencies1.31%1.42%1.37% 90+ Delinquencies1.16%1.20%1.28% Nonperforming Loans0.01%0.00%0.00% Year-over-year average loan growth of 1.3% dr
Slide 21: Credit Quality – Home Equity
Credit Quality – Home Equity Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm4Q163Q174Q17 Average Loans$16,444$16,299$16,299 30-89 Delinquencies0.37%0.38%0.48% 90+ Delinquencies0.25%0.24%0.28% Nonperforming Loans0.78%0.75%0.77% Subprime: 1% Wtd Avg LTV*: 88% NCO: 0.00% Pri
Slide 22: Credit Quality – Retail Leasing
Credit Quality – Retail Leasing Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm4Q163Q174Q17 Average Loans$6,191$7,762$7,982 30-89 Delinquencies0.28%0.31%0.41% 90+ Delinquencies0.02%0.03%0.03% Nonperforming Loans0.03%0.09%0.10% * Manheim Used Vehicle Value Index source: ww
Slide 23: Credit Quality – Other Retail
Credit Quality – Other Retail Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm4Q163Q174Q17 Average Loans$31,245$32,008$32,856 30-89 Delinquencies0.66%0.75%0.80% 90+ Delinquencies0.13%0.13%0.15% Nonperforming Loans0.09%0.10%0.10% Overall growth continued to be driven by aut
Slide 24: Credit Quality – Auto Loans
Credit Quality – Auto Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm4Q163Q174Q17 Average Loans$17,624$18,008$18,754 30-89 Delinquencies0.74%0.89%0.95% 90+ Delinquencies0.06%0.08%0.08% Nonperforming Loans0.09%0.11%0.12% Direct: 5% Wtd Avg FICO: 748 NCO: 0.23% Indire
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures * Preliminary data. Subject to change prior to filings with applicable regulatory agencies. (1) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements. (2) Includes net losses on cash flow hedges in
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures Utilizes a tax rate of 35 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes. Notable items for the three months ended December 31, 2017 include: $608 million legal and regulatory accrual, $150 million contribu
Slide 27: U.S. Bancorp 4Q17 Earnings Conference Call
U.S. Bancorp 4Q17 Earnings Conference Call January 17, 2018