Attached files
| file | filename |
|---|---|
| 8-K - 8-K - US BANCORP \DE\ | d424566d8k.htm |
| EX-99.1 - PRESS RELEASE ISSUED BY U.S. BANCORP - US BANCORP \DE\ | d424566dex991.htm |
 U.S.
Bancorp 3Q12 Earnings
Conference Call
U.S. Bancorp
3Q12 Earnings
Conference Call
October 17, 2012
Richard K. Davis
Chairman, President and CEO
Andy Cecere
Vice Chairman and CFO
Exhibit 99.2 |
 2
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 statements
about beliefs and expectations, are forward-looking statements and are based on
the information available to, and assumptions and estimates made
by,
management
as
of
the
date
made.
These
forward-looking
statements
cover,
among
other
things,
anticipated
future
revenue
and
expenses
and
the
future
plans
and
prospects
of
U.S.
Bancorp.
Forward-looking
statements
involve
inherent
risks
and
uncertainties,
and
important
factors could cause actual results to differ materially from those
anticipated. Global and domestic economies could fail to recover from the recent
economic downturn or could experience another severe contraction, which could
adversely affect U.S. Bancorp’s revenues and the values of its assets
and liabilities. Global financial markets could experience a recurrence of significant turbulence, which could reduce the availability of
funding to certain financial institutions and lead to a tightening of credit, a
reduction of business activity, and increased market volatility. Continued
stress
in
the
commercial
real
estate
markets,
as
well
as
a
delay
or
failure
of
recovery
in
the
residential
real
estate
markets,
could
cause
additional
credit losses and deterioration in asset values. In addition, U.S.
Bancorp’s business and financial performance is likely to be negatively impacted
by effects of recently enacted and future legislation and regulation. U.S.
Bancorp’s results could also be adversely affected by continued
deterioration
in
general
business
and
economic
conditions;
changes
in
interest
rates;
deterioration
in
the
credit
quality
of
its
loan
portfolios
or
in
the
value of the collateral securing those loans; deterioration in the value of
securities held in its investment securities portfolio; legal and regulatory
developments; increased competition from both banks and non-banks; changes in
customer behavior and preferences; effects of mergers and acquisitions and
related integration; effects of critical accounting policies and judgments; and management’s ability to effectively manage credit
risk, residual value risk, market risk, operational risk, interest rate risk and
liquidity risk. For discussion of these and other risks that may cause actual
results to differ from expectations, refer to U.S. Bancorp’s Annual Report on
Form 10-K for the year ended December 31, 2011, on file with the Securities and
Exchange Commission, including the sections entitled “Risk
Factors”
and “Corporate Risk Profile”
contained in Exhibit 13, and all subsequent filings with the Securities and
Exchange Commission under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934. Forward-looking statements speak only as of the date they are made,
and U.S. Bancorp undertakes no obligation to update them in light of new
information or future events. This
presentation
includes
non-GAAP
financial
measures
to
describe
U.S.
Bancorp’s
performance.
The
reconciliations
of
those
measures
to
GAAP
measures
are
provided
within
or
in
the
appendix
of
the
presentation.
These
disclosures
should
not
be
viewed
as
a
substitute
for
operating
results
determined in accordance with GAAP, nor are they necessarily comparable to
non-GAAP performance measures that may be presented by other
companies. |
 3
3Q12 Earnings
Conference Call
3Q12 Highlights
Record net income of $1.5 billion; $0.74 per diluted common share
Record total net revenue of $5.2 billion, up 8.0% vs. 3Q11
•
Net interest income growth of 6.1% vs. 3Q11; noninterest income growth of 10.4%
vs. 3Q11 Positive operating leverage on both a year-over-year and a
linked quarter basis Average loan growth of 7.3% vs. 3Q11 and average loan
growth of 1.3% vs. 2Q12 (1.6% excluding the impact of a credit card
portfolio sale) Strong average deposit growth of 11.1% vs. 3Q11 and 3.5% vs.
2Q12 Net charge-offs increased 3.5% vs. 2Q12 (decreased 6.9% excluding
$54 million of incremental charge-offs due to a regulatory
clarification) Nonperforming assets (excluding covered assets) declined 3.0%
vs. 2Q12 (7.8% excluding $109 million of incremental nonperforming assets
due to a regulatory clarification) Capital generation continues to fortify
capital position •
Tier 1 common equity ratio of approximately 8.2% using proposed rules for Basel
III standardized approach released June 2012
•
Tier 1 common equity ratio of 9.0%; Tier 1 capital ratio of 10.9%
•
Repurchased 17 million shares of common stock during 3Q12
•
Returned 67% of our earnings in 3Q12 to shareholders
|
 4
3Q12 Earnings
Conference Call
Performance Ratios
ROCE and ROA
Efficiency Ratio and
Net Interest Margin
Return on Avg Common Equity
Return on Avg Assets
Efficiency Ratio
Net Interest Margin
Efficiency ratio computed as noninterest expense divided by the sum of net interest
income on a taxable-equivalent basis
and
noninterest
income
excluding
securities
gains
(losses)
net |
 5
3Q12 Earnings
Conference Call
* Gain on merchant processing agreement settlement
Taxable-equivalent basis
Revenue Growth
Year-Over-Year Growth
4.5%
8.1%
9.1%
8.1%
8.0%
$ in millions |
 6
3Q12 Earnings
Conference Call
Loan and Deposit Growth
Average Balances
Year-Over-Year Growth
$ in billions
7.7%
$214.1
7.3%
$216.9
5.0%
$202.2
5.9%
$207.0
6.4%
$210.2
10.5%
$231.3
11.1%
$239.3
17.9%
$215.4
17.3%
$223.3
11.7%
$228.3 |
 7
3Q12 Earnings
Conference Call
Credit Quality
* Excluding Covered Assets (assets subject to loss sharing agreements with
FDIC) ** Related to a regulatory clarification in the treatment of residential mortgage and other consumer
loans to borrowers who have exited bankruptcy but continue to make payments on
their loans *** Excluding $54 million of incremental charge-offs
Net Charge-offs
Nonperforming Assets*
$ in millions
Net Charge-offs (Left Scale)
NCOs to Avg Loans (Right Scale)
Nonperforming Assets (Left Scale)
NPAs to Loans plus ORE (Right Scale) |
 8
3Q12 Earnings
Conference Call
YTD
YTD
3Q12
2Q12
3Q11
vs 2Q12
vs 3Q11
3Q12
3Q11
% B/(W)
Net Interest Income
2,783
$
2,713
$
2,624
$
2.6
6.1
8,186
$
7,675
$
6.7
Noninterest Income
2,396
2,355
2,171
1.7
10.4
6,990
6,329
10.4
Total Revenue
5,179
5,068
4,795
2.2
8.0
15,176
14,004
8.4
Noninterest Expense
2,609
2,601
2,476
(0.3)
(5.4)
7,770
7,215
(7.7)
Operating Income
2,570
2,467
2,319
4.2
10.8
7,406
6,789
9.1
Net Charge-offs
538
520
669
(3.5)
19.6
1,629
2,221
26.7
Excess Provision
(50)
(50)
(150)
--
--
(190)
(375)
--
Income before Taxes
2,082
1,997
1,800
4.3
15.7
5,967
4,943
20.7
Applicable Income Taxes
650
619
548
(5.0)
(18.6)
1,852
1,483
(24.9)
Noncontrolling Interests
42
37
21
13.5
100.0
112
62
80.6
Net Income
1,474
1,415
1,273
4.2
15.8
4,227
3,522
20.0
Preferred Dividends/Other
70
70
36
-
(94.4)
193
115
(67.8)
NI to Common
1,404
$
1,345
$
1,237
$
4.4
13.5
4,034
$
3,407
$
18.4
Diluted EPS
0.74
$
0.71
$
0.64
$
4.2
15.6
2.12
$
1.77
$
19.8
Average Diluted Shares
1,897
1,898
1,922
0.1
1.3
1,901
1,926
1.3
% B/(W)
Earnings Summary
$ in millions, except per-share data
Taxable-equivalent basis |
 9
3Q12 Earnings
Conference Call
3Q12 Results -
Key Drivers
vs. 3Q11
Net Revenue growth of 8.0%
•
Net
interest
income
growth
of
6.1%;
net
interest
margin
of
3.59%
vs.
3.65%
•
Noninterest income growth of 10.4%
Noninterest expense growth of 5.4%
Provision for credit losses lower by $31 million
•
Net charge-offs lower by $131 million
•
Provision lower than NCOs by $50 million vs. $150 million in 3Q11
vs. 2Q12
Net Revenue growth of 2.2%
•
Net
interest
income
growth
of
2.6%;
net
interest
margin
of
3.59%
vs.
3.58%
•
Noninterest income growth of 1.7%
Noninterest expense growth of 0.3%
Provision for credit losses higher by $18 million
•
Net charge-offs higher by $18 million
•
Provision lower than NCOs by $50 million vs. $50 million in 2Q12
|
 10
3Q12 Earnings
Conference Call
Capital Position
$ in billions
RWA = risk-weighted assets
3Q12
2Q12
1Q12
4Q11
3Q11
Shareholders' equity
38.7
$
37.8
$
35.9
$
34.0
$
33.2
$
Tier 1 capital
30.8
30.0
30.0
29.2
28.1
Total risk-based capital
37.6
36.4
36.4
36.1
35.4
Tier 1 common equity ratio
9.0%
8.8%
8.7%
8.6%
8.5%
Tier 1 capital ratio
10.9%
10.7%
10.9%
10.8%
10.8%
Total risk-based capital ratio
13.3%
13.0%
13.3%
13.3%
13.5%
Leverage ratio
9.2%
9.1%
9.2%
9.1%
9.0%
Tangible common equity ratio
7.2%
6.9%
6.9%
6.6%
6.6%
Tangible common equity as a % of RWA
8.8%
8.5%
8.3%
8.1%
8.1%
Basel
III
Tier 1 common equity ratio using Basel III
proposals published prior to June 2012
-
-
8.4%
8.2%
8.2%
Tier 1 common equity ratio approximated
using proposed rules for the Basel III
standardized approach released June 2012
8.2%
7.9%
-
-
- |
 11
3Q12 Earnings
Conference Call
Mortgage Repurchase
Mortgages Repurchased and Make-whole Payments
Mortgage Representation and Warranties Reserve
$ in millions
3Q12
2Q12
1Q12
4Q11
3Q11
Beginning Reserve
$216
$202
$160
$162
$173
Net Realized Losses
(32)
(31)
(25)
(31)
(31)
Additions to Reserve
36
45
67
29
20
Ending Reserve
$220
$216
$202
$160
$162
Mortgages
repurchased
and make-whole
payments
$58
$58
$55
$61
$57
Repurchase activity lower than
peers due to:
•
Conservative credit and
underwriting culture
•
Disciplined origination process -
primarily conforming
loans
(
95% sold to GSEs)
Do not participate in private
placement securitization market
Outstanding repurchase and
make-whole requests balance
= $118 million
Repurchase requests expected to
remain relatively stable over next
few quarters |
 continues
continues
Momentum
Momentum |
 13
3Q12 Earnings
Conference Call
Appendix |
 14
3Q12 Earnings
Conference Call
Commercial
CRE
Res Mtg
Credit
Card
Retail
Average Loans
Average Loans
Key Points
$ in billions
vs. 3Q11
Average total loans grew by $14.7 billion, or 7.3%
Average total loans, excluding covered loans,
were higher by 9.6%
Average total commercial loans increased $9.8
billion, or 18.8%; average residential mortgage
loans increased $6.9 billion, or 20.4%
vs. 2Q12
Average total loans grew by $2.8 billion, or 1.3%
(1.6% excluding the impact of a credit card
portfolio sale)
Average total loans, excluding covered loans,
were higher by 2.0%
Average total commercial loans increased $2.2
billion, or 3.6%; average residential mortgage
loans increased $1.8 billion, or 4.6%
Year-Over-Year Growth
5.0%
5.9%
6.4%
7.7%
7.3%
Covered
Commercial
CRE
Res Mtg
Retail
Credit Card
$202.2
$207.0
$210.2
$214.1
$216.9
Covered |
 15
3Q12 Earnings
Conference Call
Time
Money
Market
Checking
& Savings
Noninterest
-bearing
Average Deposits
Average Deposits
Key Points
$ in billions
vs. 3Q11
Average total deposits increased by $23.9
billion, or 11.1%
Average low cost deposits (NIB, interest
checking, money market and savings)
increased by $17.3 billion, or 10.1%
vs. 2Q12
Average total deposits increased by $8.0
billion, or 3.5%
Average low cost deposits increased by $4.1
billion, or 2.2%
Year-Over-Year Growth
17.9%
17.3%
11.7%
10.5%
11.1%
Time
Money Market
Checking and Savings
Noninterest-bearing
$215.4
$223.3
$228.3
$231.3
$239.3 |
 16
3Q12 Earnings
Conference Call
Net Interest Income
Net Interest Income
Key Points
$ in millions
Taxable-equivalent basis
vs. 3Q11
Average earning assets grew by $22.7 billion, or
7.9%
Net interest margin lower by 6 bp (3.59% vs.
3.65%) driven by:
•
Higher balances in lower yielding investment securities
•
Partially offset by lower rates on deposits and long-
term debt and the classification change of credit card
balance transfer fees from noninterest income to
interest income beginning 1Q12
vs. 2Q12
Average earning assets grew by $5.2 billion, or
1.7%
Net interest margin higher by 1 bp (3.59% vs.
3.58%) driven by:
•
Favorable funding costs, primarily lower rates on
wholesale funds
•
Partially offset by a reduction in the yield on the
investment securities portfolio
Year-Over-Year Growth
5.9%
7.0%
7.3%
6.6%
6.1%
$2,624
$2,673
$2,690
$2,713
$2,783
3.65%
3.60%
3.60%
3.58%
3.59%
2.0%
3.0%
4.0%
5.0%
6.0%
1,000
1,500
2,000
2,500
3,000
3Q11
4Q11
1Q12
2Q12
3Q12
Net Interest Income
Net Interest Margin |
 17
3Q12 Earnings
Conference Call
Noninterest Income
Noninterest Income
Key Points
$ in millions
Payments = credit and debit card revenue, corporate payment products revenue and
merchant processing; Service charges = deposit service charges, treasury
management fees and ATM processing services vs. 3Q11
Noninterest income grew by $225 million, or 10.4%,
driven by:
•
Mortgage banking revenue increase of $274 million
•
Trust and investment management fees (10.0% growth)
•
Increase in other income (3.8% growth) due to a credit card
portfolio sale gain, partially offset by an equity-method
investment charge and lower retail lease residual revenue
•
Lower credit and debit card revenue (26.3% decline) due to
the impact of legislative changes and a 1Q12 classification
change, partially offset by higher transaction volumes
•
Lower ATM processing services revenue (24.3% decline)
due to a 1Q12 classification change
vs. 2Q12
Noninterest income grew by $41 million, or 1.7%,
driven by:
•
Mortgage banking revenue increase of $29 million
•
Higher deposit service charges (11.5% increase) and
corporate payment products revenue (5.8% increase) due
to seasonally higher sales volume
•
Partially offset by lower credit and debit card revenue (9.4%
decline) primarily due to a benefit from the final expiration of
debit card customer rewards recognized in 2Q12 and
merchant processing (3.9% decline) due to lower volumes
Year-Over-Year Growth
2.9%
9.4%
11.3%
9.7%
10.4%
All Other
Mortgage
Service Charges
Trust and Inv Mgmt
Payments
3Q11
4Q11
1Q12
2Q12
3Q12
Non-operating gains
-
$
263
$
-
$
-
$
-
$
Total
-
$
263
$
-
$
-
$
-
$
Notable Noninterest Income Items
$2,171
$2,431
$2,239
$2,355
$2,396
Trust and
Inv Mgmt
Service
Charges
All Other
Mortgage
Payments |
 18
3Q12 Earnings
Conference Call
Noninterest Expense
Noninterest Expense
Key Points
$ in millions
vs. 3Q11
Noninterest expense was higher by $133 million,
or 5.4%, driven by:
•
Increase in professional services (44.0%) principally due
to mortgage servicing review-related projects
•
Increased compensation (8.6%) and employee
benefits (10.8%)
•
Lower net occupancy and equipment (7.5%) principally
reflecting the change in classification of ATM surcharge
revenue passed through to others
vs. 2Q12
Noninterest expense was higher by $8 million, or
0.3%, driven by:
•
Higher compensation expense (3.1%) and professional
services (5.9%)
•
Higher marketing (20.0%) due to the timing of marketing
campaigns
•
Partially offset by a decrease in other expense (9.4%)
primarily due to the 2Q12 accrual related to
indemnification obligations associated with Visa and
lower FDIC insurance costs, partially offset by higher
costs related to investments in affordable housing and
other tax-advantaged projects
All Other
Tech and Communications
Prof Svcs, Marketing and PPS
Occupancy and Equipment
Compensation and Benefits
3Q11
4Q11
1Q12
2Q12
3Q12
Mortgage servicing matters
-
$
130
$
-
$
-
$
-
$
Total
-
$
130
$
-
$
-
$
-
$
Notable Noninterest Expense Items
Year-Over-Year Growth
3.8%
8.5%
10.6%
7.3%
5.4%
$2,476
$2,696
$2,560
$2,601
$2,609
Occupancy
and Equipment
Prof Services,
Marketing
and PPS
Tech and Comm
Compensation
and Benefits
All Other |
 19
3Q12 Earnings
Conference Call
Credit Quality
-
Commercial Loans
Average Loans and Net Charge-offs Ratios
Key Statistics
Comments
Nonperforming loans continue to improve year-over-year and on a linked
quarter basis Net charge-offs and delinquencies were relatively stable
and remain at levels below last year Strong new lending activity of both
loans and commitments resulted in 4% linked quarter loan growth and 22%
growth year-over-year
Utilization rates remain historically low
3Q11
2Q12
3Q12
Average Loans
$46,484
$54,362
$56,655
30-89 Delinquencies
0.34%
0.26%
0.29%
90+ Delinquencies
0.09%
0.07%
0.07%
Nonperforming Loans
0.71%
0.31%
0.23%
$ in millions |
 20
3Q12 Earnings
Conference Call
Credit Quality
-
Commercial Leases
Average Loans and Net Charge-offs Ratios
Key Statistics
Comments
Net charge-offs improved linked quarter and year-over-year
Nonperforming loans declined on a linked quarter and year-over-year
basis 3Q11
2Q12
3Q12
Average Loans
$5,860
$5,658
$5,537
30-89 Delinquencies
0.93%
0.83%
0.93%
90+ Delinquencies
0.02%
0.00%
0.02%
Nonperforming Loans
0.68%
0.40%
0.35%
$ in millions
$5,860
$5,834
$5,822
$5,658
$5,537
0.61%
1.43%
0.55%
1.07%
0.50%
0.0%
1.5%
3.0%
4.5%
6.0%
0
2,000
4,000
6,000
8,000
3Q11
4Q11
1Q12
2Q12
3Q12
Average Loans
Net Charge
-
offs Ratio
Small Ticket
$3,260
Equipment
Finance
$2,277
Commercial Leases |
 21
3Q12 Earnings
Conference Call
Credit Quality
-
Commercial Real Estate
Average Loans and Net Charge-offs Ratios
Key Statistics
Comments
Average loans increased $1.1B, or 3.0%, on a year-over-year basis
Net charge-off ratio of 0.27%, down from 0.58% on a linked quarter basis and
from the 2Q10 peak of 2.67% The linked quarter decline was driven by a 57%
reduction in net charge-offs in the mortgage portfolio Delinquencies
continue to decline on a linked quarter and year-over-year basis
3Q11
2Q12
3Q12
Average Loans
$35,569
$36,549
$36,630
30-89 Delinquencies
0.44%
0.24%
0.18%
90+ Delinquencies
0.08%
0.03%
0.03%
Nonperforming Loans
3.43%
1.89%
1.71%
Performing TDRs*
459
596
583
$ in millions
* TDR = troubled debt restructuring, new accounting guidance adopted 3Q11 (FASB
Accounting Standards Update No. 2011-02) Investor
$19,400
Owner
Occupied
$11,286
Multi-family
$1,812
Retail
$599
Residential
Construction
$976
Condo
Construction
$168
A&D
Construction
$751
Office
$742
Other
$896
CRE Mortgage
CRE Construction |
 22
3Q12 Earnings
Conference Call
Credit Quality
-
Residential Mortgage
Average Loans and Net Charge-offs Ratios
Key Statistics
Comments
Strong growth in high quality originations (weighted average FICO 763, weighted
average LTV 67%) as average loans increased 4.6% over 2Q12, driven by demand
for refinancing Increase in net charge-offs ($22 million), nonperforming
loans ($85 million) and performing TDRs ($129 million) primarily due to a
regulatory clarification in the treatment of loans to borrowers who have exited bankruptcy but
continue to make payments on their loans
3Q11
2Q12
3Q12
Average Loans
$34,026
$39,166
$40,969
30-89 Delinquencies
1.09%
0.86%
0.93%
90+ Delinquencies
1.03%
0.80%
0.72%
Nonperforming Loans
1.85%
1.65%
1.81%
$ in millions
** Excludes GNMA loans, whose repayments are insured by the FHA or guaranteed by
the Department of VA ($1,631 million 3Q12) $34,026
$36,256
$37,831
$39,166
$40,969
1.42%
1.30%
1.19%
1.12%
1.17%
%*
0.0%
1.5%
3.0%
4.5%
6.0%
0
12,000
24,000
36,000
48,000
3Q11
4Q11
1Q12
2Q12
3Q12
Average Loans
Adjusted NCO Ratio
0.96
$1,938
$2,002
$2,017
$2,011
$2,076
0
1,000
2,000
3,000
4,000
3Q11
4Q11
1Q12
2Q12
3Q12
Residential Mortgage Performing TDRs**
Net
Charge-offs
Ratio
* Excluding $22 million related to a regulatory clarification in the treatment of loans to borrowers
who have exited bankruptcy but continue to make payments on their loans |
 23
3Q12 Earnings
Conference Call
3Q11
2Q12
3Q12
Average Loans
$16,057
$16,696
$16,551
30-89 Delinquencies
1.38%
1.20%
1.41%
90+ Delinquencies
1.28%
1.17%
1.18%
Nonperforming Loans
1.53%
1.12%
0.99%
Credit Quality -
Credit Card
Average Loans and Net Charge-offs Ratios
Key Statistics
Comments
Net charge-offs continue to remain low
Average loans are down slightly, however during 3Q12, the Company sold a branded
consumer and business credit card portfolio
Early stage delinquencies increased primarily due to seasonal patterns
$ in millions
* Excluding portfolio purchases where the acquired loans were recorded at fair
value at the purchase date Average Loans
Net Charge-offs Ratio
Net Charge-offs Ratio Excluding Acquired Portfolios*
$16,057
$16,271
$16,778
$16,696
$16,551
4.40%
4.71%
4.05%
4.10%
4.01%
4.54%
4.88%
4.21%
4.25%
4.17%
0.0%
3.0%
6.0%
9.0%
12.0%
0
5,000
10,000
15,000
20,000
3Q11
4Q11
1Q12
2Q12
3Q12
Core
Portfolio
$15,936
Portfolios
Acquired at
Fair Value
$615
Credit Card |
 24
3Q12 Earnings
Conference Call
Credit Quality -
Home Equity
Average Loans and Net Charge-offs Ratios
Key Statistics
Comments
High-quality originations (weighted average FICO 771, weighted average CLTV
70%) originated primarily through the retail branch network to existing bank
customers on their primary residence Increase in net charge-offs ($26
million) and nonperforming loans ($13 million) primarily due to a regulatory
clarification in the treatment of loans to borrowers who have exited bankruptcy but
continue to make payments on their
loans 3Q11
2Q12
3Q12
Average Loans
$18,510
$17,598
$17,329
30-89 Delinquencies
0.83%
0.71%
0.81%
90+ Delinquencies
0.67%
0.30%
0.32%
Nonperforming Loans
0.19%
0.91%
1.05%
Consumer Finance: 13%
Wtd Avg LTV**: 82%
NCO: 5.48%
$ in millions
Traditional: 87%
Wtd Avg LTV**: 71%
NCO: 1.53%
** LTV at origination
* Excluding $26 million related to a regulatory clarification in the treatment of loans to borrowers
who have exited bankruptcy but continue to make payments on their loans |
 25
3Q12 Earnings
Conference Call
Credit Quality -
Retail Leasing
Average Loans and Net Charge-offs Ratios
Key Statistics
Comments
High-quality originations (weighted average FICO 772)
Retail leasing delinquencies have stabilized at very low levels
Strong used auto values continued to contribute to historically low net
charge-offs 3Q11
2Q12
3Q12
Average Loans
$5,097
$5,151
$5,256
30-89 Delinquencies
0.19%
0.13%
0.17%
90+ Delinquencies
0.02%
0.00%
0.02%
Nonperforming Loans
0.00%
0.00%
0.02%
$ in millions
* Manheim Used Vehicle Value Index source: www.manheimconsulting.com, January 1995 = 100,
quarter value = average monthly ending value |
 26
3Q12 Earnings
Conference Call
Credit Quality -
Other Retail
Average Loans and Net Charge-offs Ratios
Key Statistics
Comments
Average balances grew modestly during the quarter as auto loan demand remained
strong Increase in net charge-offs ($5 million) and nonperforming loans
($10 million) primarily due to a regulatory clarification in the treatment
of loans to borrowers who have exited bankruptcy but continue to make
payments on their loans 3Q11
2Q12
3Q12
Average Loans
$24,773
$25,151
$25,406
30-89 Delinquencies
0.67%
0.51%
0.59%
90+ Delinquencies
0.20%
0.16%
0.16%
Nonperforming Loans
0.12%
0.09%
0.12%
Installment
$5,480
Auto Loans
$12,211
Revolving
Credit
$3,322
Student
Lending
$4,393
$ in millions
* Excluding $5 million related to a regulatory clarification in the treatment of
loans to borrowers who have exited bankruptcy but continue to make payments on their loans
$24,773
$24,901
$24,902
$25,151
$25,406
1.11%
1.19%
0.92%
0.86%
1.06%
0.98
0.0%
1.5%
3.0%
4.5%
6.0%
0
7,000
14,000
21,000
28,000
3Q11
4Q11
1Q12
2Q12
3Q12
Average Loans
Net Charge-offs Ratio
Adjusted NCO Ratio
Other Retail |
 27
3Q12 Earnings
Conference Call
Non-GAAP Financial Measures
$ in millions
3Q12
2Q12
1Q12
4Q11
3Q11
Total equity
39,825
$
38,874
$
36,914
$
34,971
$
34,210
$
Preferred stock
(4,769)
(4,769)
(3,694)
(2,606)
(2,606)
Noncontrolling interests
(1,164)
(1,082)
(1,014)
(993)
(980)
Goodwill (net of deferred tax liability)
(8,194)
(8,205)
(8,233)
(8,239)
(8,265)
Intangible assets (exclude mortgage servicing rights)
(980)
(1,118)
(1,182)
(1,217)
(1,209)
Tangible common equity (a)
24,718
23,700
22,791
21,916
21,150
Tier 1 Capital, determined in accordance with prescribed regulatory requirements using Basel I
definition 30,766
30,044
29,976
29,173
28,081
Trust preferred securities
-
-
(1,800)
(2,675)
(2,675)
Preferred stock
(4,769)
(4,769)
(3,694)
(2,606)
(2,606)
Noncontrolling interests, less preferred stock not eligible for Tier I capital
(685)
(685)
(686)
(687)
(695)
Tier 1 common equity using Basel I definition (b)
25,312
24,590
23,796
23,205
22,105
Tier 1 capital, determined in accordance with prescribed regulatory requirements using Basel III
proposals published prior to June 2012
27,578
25,636
24,902
Preferred stock
(3,694)
(2,606)
(2,606)
Noncontrolling interests of real estate investment trusts
(659)
(664)
(667)
Tier 1 common equity using Basel III proposals published prior to June 2012 (c)
23,225
22,366
21,629
Tier 1 capital, determined in accordance with prescribed regulatory requirements approximated
using proposed rules for the Basel III standardized approach released June 2012
29,644
28,622
Preferred Stock
(4,769)
(4,769)
Tier 1 common equity approximated using proposed rules for the Basel III standardized approach
released June 2012 (d)
24,875
23,853
Total assets
352,253
353,136
340,762
340,122
330,141
Goodwill (net of deferred tax liability)
(8,194)
(8,205)
(8,233)
(8,239)
(8,265)
Intangible assets (exclude mortgage servicing rights)
(980)
(1,118)
(1,182)
(1,217)
(1,209)
Tangible assets (e)
343,079
343,813
331,347
330,666
320,667
Risk-weighted assets, determined in accordance with prescribed regulatory requirements using Basel
I definition (f) 282,033
279,972
274,847
271,333
261,115
Risk-weighted assets using Basel III proposals published prior to June 2012 (g)
277,856
274,351
264,103
Risk-weighted assets approximated using proposed rules for the Basel III standarized approach
released June 2012 (h) 304,200
303,212
Tangible common equity to tangible assets (a)/(e)
7.2%
6.9%
6.9%
6.6%
6.6%
Tangible common equity to risk-weighted assets using Basel I definition (a)/(f)
8.8%
8.5%
8.3%
8.1%
8.1%
Tier 1 common equity to risk-weighted assets using Basel I definition (b)/(f)
9.0%
8.8%
8.7%
8.6%
8.5%
Tier 1 common equity to risk-weighted assets using Basel III proposals published prior to June 2012
(c)/(g) -
-
8.4%
8.2%
8.2%
Tier 1 common equity to risk-weighted assets approximated using proposed rules for the Basel III
standardized approach released June 2012 (d)/(h)
8.2%
7.9%
-
-
-
3Q12
risk-weighted
assets
are
preliminary
data,
subject
to
change
prior
to
filings
with
applicable
regulatory
agencies
Ratios |
 U.S.
Bancorp 3Q12 Earnings
Conference Call
U.S. Bancorp
3Q12 Earnings
Conference Call
October 17, 2012 |