31 slides from U.s. Bancorp's earnings presentation, Jan 21, 2015
Slide 1: U.S. Bancorp 4Q14 Earnings Conference Call
Exhibit 99.2 U.S. Bancorp 4Q14 Earnings Conference Call Richard K. Davis Chairman, President and CEO Andy Cecere January 21, 2015 Vice Chairman and COO
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: 2014 Full Year Highlights
4Q14 Earnings 2014 Full Year Highlights Conference Call Record net income of $5.9 billion; $3.08 per diluted common share Industry-leading profitability measures, including ROA of 1.54%, ROCE of 14.7% and efficiency ratio of 53.2% Average loan growth of 6.3% vs. 2013 and average deposit growth of 6.
Slide 4: 4Q14 Highlights
4Q14 Earnings 4Q14 Highlights Conference Call Net income of $1.5 billion; $0.79 per diluted common share Positive operating leverage on a year-over-year basis Average loan growth of 5.9% vs. 4Q13 (5.5% excluding Charter One acquisition) and 1.0% vs. 3Q14 Average deposit growth of 7.2% vs. 4Q13 (5.5%
Slide 5: Performance Ratios
4Q14 Earnings Performance Ratios Conference Call Return on Average Common Equity Efficiency Ratio and and Return on Average Assets Net Interest Margin Return on Avg Common Equity Return on Avg Assets Efficiency Ratio Net Interest Margin * Excluding $214 million gain on Visa Inc. Class B common stock
Slide 6: Revenue Growth
4Q14 Earnings Revenue Growth Conference Call $ in millions Year-Over-Year Change (4.4%) (1.2%) 4.9% 2.0% 5.7% * Gain on Visa Inc. Class B common stock sale ** Gain related to an equity interest in Nuveen Taxable-equivalent basis 6
Slide 7: Loan and Deposit Growth
4Q14 Earnings Loan and Deposit Growth Conference Call $ in billions Year-Over-Year Growth 4Q14 Acquisition Adjusted Loan Growth = 5.5% Average Balances Deposit Growth = 5.5% 7
Slide 8: Credit Quality
4Q14 Earnings Credit Quality Conference Call $ in millions Net Charge-offs Nonperforming Assets* Net Charge-offs (Left Scale) Nonperforming Assets (Left Scale) NCOs to Avg Loans (Right Scale) NPAs to Loans plus ORE (Right Scale) * Note: The loss sharing agreement for the commercial and commercial re
Slide 9: Earnings Summary
4Q14 Earnings Earnings Summary Conference Call $ and shares in millions, except per-share data % B/(W) FY FY 4Q14 3Q14 4Q13 vs 3Q14 vs 4Q13 2014 2013 % B/(W) Net Interest Income $ 2,799 $ 2,748 $ 2,733 1.9 2.4 $ 10,997 $ 10,828 1.6 Noninterest Income 2,370 2,242 2,156 5.7 9.9 9,164 8,774 4.4 Total R
Slide 10: 4Q14 Results - Key Drivers
4Q14 Earnings 4Q14 Results - Key Drivers Conference Call vs. 4Q13 Net Revenue increase of 5.7% (3.2% increase excluding notable item) • Net interest income increase of 2.4%; net interest margin Notable Items of 3.14% vs. 3.40% in 4Q13 $ in millions 4Q14 • Noninterest income increase of 9.9% (4.2% in
Slide 11: Capital Position
4Q14 Earnings Capital Position Conference Call $ in billions 4Q14 3Q14 2Q14 1Q14 4Q13 Total U.S. Bancorp shareholders' equity $ 43.5 $ 43.1 $ 42.7 $ 42.1 $ 41.1 Standardized Approach Basel III transitional standardized approach/Basel I * Common equity tier 1 capital 30.9 30.2 29.8 29.5 27.9 Tier 1 c
Slide 12: 4Q14 Earnings Conference Call
4Q14 Earnings Conference Call 12
Slide 13: Appendix
4Q14 Earnings Conference Call Appendix 13
Slide 14: Average Loans
4Q14 Earnings Average Loans Conference Call $ in billions Average Loans Key Points Year-Over-Year Growth vs. 4Q13 5.7% 6.0% 6.8% 6.3% 5.9% Average total loans grew by $13.6 billion, or 5.9% (5.5% excluding Charter One acquisition) Average total loans, excluding covered loans, were higher by 7.1% Ave
Slide 15: Average Deposits
4Q14 Earnings Average Deposits Conference Call $ in billions Average Deposits Key Points Year-Over-Year Growth vs. 4Q13 5.4% 5.1% 6.0% 7.4% 7.2% Average total deposits increased by $18.6 billion, or 7.2% (5.5% excluding Charter One acquisition) Average low-cost deposits (NIB, interest checking, mone
Slide 16: Net Interest Income
4Q14 Earnings Net Interest Income Conference Call $ in millions Net Interest Income Key Points Year-Over-Year Change vs. 4Q13 (1.8%) (0.1%) 2.7% 1.3% 2.4% Average earning assets grew by $35.4 billion, or 11.1% Net interest margin lower by 26 bps (3.14% vs. 3.40%) driven by: • Lower reinvestment rate
Slide 17: Noninterest Income
4Q14 Earnings Noninterest Income Conference Call $ in millions Noninterest Income Key Points vs. 4Q13 Year-Over-Year Change Noninterest income increased by $214 million, or (7.4%) (2.6%) 7.4% 3.0% 9.9% 9.9%, driven by: • Higher trust and investment management fees (8.4% increase) due to account grow
Slide 18: Noninterest Expense
4Q14 Earnings Noninterest Expense Conference Call $ in millions Noninterest Expense Key Points vs. 4Q13 Year-Over-Year Change Noninterest expense was higher by $122 million, or (0.1%) 3.0% 7.7% 1.9% 4.5% 4.5%, driven by: • Higher compensation expense (4.4% increase) reflecting the impact of merit in
Slide 19: Credit Quality - Commercial Loans
4Q14 Earnings Credit Quality - Commercial Loans Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 4Q13 3Q14 4Q14 Average Loans $63,714 $72,190 $74,333 30-89 Delinquencies 0.33% 0.23% 0.27% 90+ Delinquencies 0.08% 0.05% 0.05% Nonperforming Loans 0.19% 0.22% 0.13% C
Slide 20: Credit Quality - Commercial Leases
4Q14 Earnings Credit Quality - Commercial Leases Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 4Q13 3Q14 4Q14 Average Loans $5,210 $5,155 $5,292 30-89 Delinquencies 0.85% 0.83% 0.78% 90+ Delinquencies 0.00% 0.00% 0.00% Nonperforming Loans 0.23% 0.23% 0.24% Com
Slide 21: Credit Quality - Commercial Real Estate
4Q14 Earnings Credit Quality - Commercial Real Estate Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 4Q13 3Q14 4Q14 Average Loans $39,318 $40,839 $40,966 30-89 Delinquencies 0.24% 0.12% 0.26% 90+ Delinquencies 0.07% 0.03% 0.05% Nonperforming Loans 0.76% 0.59% 0
Slide 22: Credit Quality - Residential Mortgage
4Q14 Earnings Credit Quality - Residential Mortgage Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 4Q13 3Q14 4Q14 Average Loans $50,732 $51,994 $51,872 30-89 Delinquencies 0.70% 0.46% 0.43% 90+ Delinquencies 0.65% 0.41% 0.40% Nonperforming Loans 1.51% 1.62% 1.6
Slide 23: Credit Quality - Credit Card
4Q14 Earnings Credit Quality - Credit Card Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 4Q13 3Q14 4Q14 Average Loans $17,366 $17,753 $17,990 30-89 Delinquencies 1.25% 1.23% 1.24% 90+ Delinquencies 1.17% 1.10% 1.13% Nonperforming Loans 0.43% 0.22% 0.16% Commen
Slide 24: Credit Quality - Home Equity
4Q14 Earnings Credit Quality - Home Equity Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 4Q13 3Q14 4Q14 Average Loans $15,488 $15,704 $15,853 30-89 Delinquencies 0.66% 0.51% 0.54% 90+ Delinquencies 0.32% 0.26% 0.26% Nonperforming Loans 1.08% 1.05% 1.07% Subpri
Slide 25: Credit Quality - Retail Leasing
4Q14 Earnings Credit Quality - Retail Leasing Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 4Q13 3Q14 4Q14 Average Loans $5,847 $5,991 $5,939 30-89 Delinquencies 0.18% 0.14% 0.18% 90+ Delinquencies 0.00% 0.02% 0.02% Nonperforming Loans 0.02% 0.02% 0.02% Commen
Slide 26: Credit Quality - Other Retail
4Q14 Earnings Credit Quality - Other Retail Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 4Q13 3Q14 4Q14 Average Loans $26,059 $27,003 $27,317 30-89 Delinquencies 0.50% 0.49% 0.51% 90+ Delinquencies 0.14% 0.13% 0.12% Nonperforming Loans 0.09% 0.06% 0.06% Comme
Slide 27: Credit Quality - Auto Loans
4Q14 Earnings Credit Quality - Auto Loans Conference Call $ in millions Average Loans and Net Charge-offs Ratios Key Statistics 4Q13 3Q14 4Q14 Average Loans $13,409 $14,404 $14,644 30-89 Delinquencies 0.34% 0.41% 0.45% 90+ Delinquencies 0.04% 0.05% 0.03% Nonperforming Loans 0.02% 0.03% 0.03% Indirec
Slide 28: Mortgage Repurchase
4Q14 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 4Q14 3Q14 2Q14 1Q14 4Q13 • Conservative credit and Beginning Reserve $62 $69 $75 $83 $176 underwri
Slide 29: Non-GAAP Financial Measures
4Q14 Earnings Non-GAAP Financial Measures Conference Call (Dollars in Millions, Unaudited) 4Q14 3Q14 2Q14 1Q14 4Q13 Total equity $44,168 $43,829 $43,386 $42,743 $41,807 Preferred stock (4,756) (4,756) (4,756) (4,756) (4,756) Noncontrolling interests (689) (688) (686) (689) (694) Goodwill (net of def
Slide 30: Non-GAAP Financial Measures
4Q14 Earnings Non-GAAP Financial Measures Conference Call (Dollars in Millions, Unaudited) 4Q14 3Q14 2Q14 1Q14 4Q13 Total assets $402,529 $391,284 $389,065 $371,289 $364,021 Goodwill (net of deferred tax liability) (1) (8,403) (8,503) (8,548) (8,352) (8,343) Intangible assets, other than mortgage se
Slide 31: U.S. Bancorp 4Q14 Earnings Conference Call
U.S. Bancorp 4Q14 Earnings Conference Call January 21, 2015