Attached files
| file | filename |
|---|---|
| EX-99.1 - PRESS RELEASE - US BANCORP \DE\ | d567675dex991.htm |
| 8-K - FORM 8-K - US BANCORP \DE\ | d567675d8k.htm |
 U.S.
Bancorp 2Q13 Earnings
Conference Call
U.S. Bancorp
2Q13 Earnings
Conference Call
July 17, 2013
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
recently
enacted
and
future
legislation
and
regulation.
U.S.
Bancorp’s
results
could
also
be
adversely
affected
by
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,
2012,
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
2Q13 Earnings
Conference Call
2Q13 Highlights
Record net income of $1.5 billion; $0.76 per diluted common share
Average loan growth of 5.2% vs. 2Q12 and average loan growth of
1.2% vs. 1Q13
Strong average deposit growth of 7.0% vs. 2Q12 and 1.0% vs. 1Q13
Net charge-offs declined 9.5% vs. 1Q13
Nonperforming assets declined 5.4% vs. 1Q13 (5.3% excluding covered assets)
Capital generation continues to reinforce capital position
•
Tier 1 common equity ratio estimated at 8.6% using final rules for Basel III
standardized approach released July 2013
•
Tier 1 common equity ratio of 9.2%; Tier 1 capital ratio of 11.1%
Returned 73% of earnings to shareholders in 2Q13
•
Annual dividend increased from $0.78 to $0.92, an 18% increase
•
Repurchased 18 million shares of common stock during 2Q13
|
 4
2Q13 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
2Q13 Earnings
Conference Call
$5,068
$5,179
$5,112
$4,874
$4,948
3,500
4,000
4,500
5,000
5,500
2Q12
3Q12
4Q12
1Q13
2Q13
Taxable-equivalent basis
Revenue Growth
Year-Over-Year Growth
8.1%
8.0%
0.2%
(1.1%)
(2.4%)
$ in millions |
 6
2Q13 Earnings
Conference Call
170.0
190.0
210.0
230.0
250.0
2Q12
3Q12
4Q12
1Q13
2Q13
Loans
Deposits
Loan and Deposit Growth
Average Balances
Year-Over-Year Growth
$ in billions
7.7%
$214.1
7.3%
$216.9
6.4%
$220.3
5.8%
$222.4
5.2%
$225.2
10.5%
$231.3
11.1%
$239.3
9.2%
$243.8
7.3%
$245.0
7.0%
$247.4 |
 7
2Q13 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 $
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
2Q13 Earnings
Conference Call
Earnings Summary
$ in millions, except per-share data
Taxable-equivalent basis
YTD
YTD
2Q13
1Q13
2Q12
vs 1Q13
vs 2Q12
2013
2012
% B/(W)
Net Interest Income
2,672
$
2,709
$
2,713
$
(1.4)
(1.5)
5,381
$
5,403
$
(0.4)
Noninterest Income
2,276
2,165
2,355
5.1
(3.4)
4,441
4,594
(3.3)
Total Revenue
4,948
4,874
5,068
1.5
(2.4)
9,822
9,997
(1.8)
Noninterest Expense
2,557
2,470
2,601
(3.5)
1.7
5,027
5,161
2.6
Operating Income
2,391
2,404
2,467
(0.5)
(3.1)
4,795
4,836
(0.8)
Net Charge-offs
392
433
520
9.5
24.6
825
1,091
24.4
Excess Provision
(30)
(30)
(50)
--
--
(60)
(140)
--
Income before Taxes
2,029
2,001
1,997
1.4
1.6
4,030
3,885
3.7
Applicable Income Taxes
585
614
619
4.7
5.5
1,199
1,202
0.2
Noncontrolling Interests
40
41
37
(2.4)
8.1
81
70
15.7
Net Income
1,484
1,428
1,415
3.9
4.9
2,912
2,753
5.8
Preferred Dividends/Other
79
70
70
(12.9)
(12.9)
149
123
(21.1)
NI to Common
1,405
$
1,358
$
1,345
$
3.5
4.5
2,763
$
2,630
$
5.1
Diluted EPS
0.76
$
0.73
$
0.71
$
4.1
7.0
1.49
$
1.38
$
8.0
Average Diluted Shares
1,853
1,867
1,898
0.7
2.4
1,860
1,904
2.3
% B/(W) |
 9
2Q13 Earnings
Conference Call
2Q13 Results -
Key Drivers
vs. 2Q12
Net Revenue decline of 2.4%
•
Net interest income decline of 1.5%; net interest margin of 3.43% vs. 3.58% in
2Q12 •
Noninterest income decline of 3.4%
Noninterest expense decline of 1.7%
Provision for credit losses lower by $108 million
•
Net charge-offs lower by $128 million
•
Provision lower than NCOs by $30 million vs. $50 million in 2Q12
vs. 1Q13
Net Revenue growth of 1.5%
•
Net interest income decline of 1.4%; net interest margin of 3.43% vs. 3.48% in
1Q13 •
Noninterest income growth of 5.1%
Noninterest expense increase of 3.5%
Provision for credit losses lower by $41 million
•
Net charge-offs lower by $41 million
•
Provision lower than NCOs by $30 million vs. $30 million in 1Q13
|
 10
2Q13 Earnings
Conference Call
Capital Position
$ in billions
RWA = risk-weighted assets
2Q13
1Q13
4Q12
3Q12
2Q12
Shareholders' equity
39.7
$
39.5
$
39.0
$
38.7
$
37.8
$
Tier 1 capital
32.2
31.8
31.2
30.8
30.0
Total risk-based capital
38.4
38.1
37.8
37.6
36.4
Tier 1 common equity ratio
9.2%
9.1%
9.0%
9.0%
8.8%
Tier 1 capital ratio
11.1%
11.0%
10.8%
10.9%
10.7%
Total risk-based capital ratio
13.3%
13.2%
13.1%
13.3%
13.0%
Leverage ratio
9.5%
9.3%
9.2%
9.2%
9.1%
Tangible common equity ratio
7.5%
7.4%
7.2%
7.2%
6.9%
Tangible common equity as a % of RWA
8.9%
8.8%
8.6%
8.8%
8.5%
Basel III
Tier 1 common equity ratio approximated
using proposed rules for the Basel III
standardized approach released June 2012
8.3%
8.2%
8.1%
8.2%
7.9%
Tier 1 common equity ratio estimated
using final rules for the Basel III
standardized approach released July 2013
8.6%
-
-
-
- |
 11
2Q13 Earnings
Conference Call
Capital Actions
Dividend increase announced June 18
•
Annual dividend increased from $0.78 to $0.92, an 18% increase
•
One
year
authorization
to
repurchase
up
to
$2.25
billion
of
outstanding
stock
effective
April
1,
2013
Returned 73% of earnings to shareholders during 2Q13
Reinvest and
Acquisitions
Dividends
Share
Repurchases
20 -
40%
Targets:
30 -
40%
30 -
40%
27%
2Q13
Actual:
43%
30%
Earnings Distribution
th |
 12
2Q13 Earnings
Conference Call
Mortgage Repurchase
Mortgages Repurchased and Make-whole Payments
Mortgage Representation and Warranties Reserve
$ in millions
2Q13
1Q13
4Q12
3Q12
2Q12
Beginning Reserve
$233
$240
$220
$216
$202
Net Realized Losses
(16)
(23)
(32)
(32)
(31)
Change in Reserve
(27)
16
52
36
45
Ending Reserve
$190
$233
$240
$220
$216
Mortgages
repurchased
and make-whole
payments
$41
$79
$57
$58
$58
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
= $64 million |
 13
A Rich
A Rich Heritage
A Strong Future
A Strong Future
1863 -
2013 |
 14
2Q13 Earnings
Conference Call
Appendix |
 15
2Q13 Earnings
Conference Call
Average Loans
Average Loans
Key Points
$ in billions
vs. 2Q12
Average total loans grew by $11.1 billion, or 5.2%
Average total loans, excluding covered loans,
were higher by 7.2%
Average total commercial loans increased $6.7
billion, or 11.2%; average residential mortgage
loans increased $7.7 billion, or 19.7%
vs. 1Q13
Average total loans grew by $2.8 billion, or 1.2%
Average total loans, excluding covered loans,
were higher by 1.6%
Average total commercial loans increased $1.5
billion, or 2.2%; average residential mortgage
loans increased $1.8 billion, or 3.9%
Covered
Commercial
CRE
Res Mtg
Retail
Credit Card |
 16
2Q13 Earnings
Conference Call
Average Deposits
Average Deposits
Key Points
$ in billions
vs. 2Q12
Average total deposits increased by $16.1
billion, or 7.0%
Average low cost deposits (NIB, interest
checking, money market and savings)
increased by $18.1 billion, or 9.8%
vs. 1Q13
Average total deposits increased by $2.4
billion, or 1.0%
Average low cost deposits increased by $3.3
billion, or 1.6%
Time
Money Market
Checking and Savings
Noninterest-bearing
Noninterest
-bearing
Checking
& Savings
Money
Market
Time
2.2%
15.0%
8.8%
7.6%
(4.3%)
(1.2%)
6.5%
9.6%
15.6%
24.5%
8.1%
7.1%
4.7%
4.6%
6.4%
32.5%
16.2%
14.2%
4.4%
3.6%
0
70
140
210
280
2Q12
3Q12
4Q12
1Q13
2Q13 |
 17
2Q13 Earnings
Conference Call
Net Interest Income
Net Interest Income
Key Points
$ in millions
Taxable-equivalent basis
vs. 2Q12
Average earning assets grew by $8.2 billion,
or 2.7%
Net interest margin lower by 15 bps (3.43%
vs. 3.58%) driven by:
•
Lower rates on investment securities and loans
•
Partially offset by lower rates on deposits and
long-term debt
vs. 1Q13
Average earning assets declined by $2.1
billion, or 0.7%
Net interest margin lower by 5 bps (3.43% vs.
3.48%) driven by:
•
Lower rates on investment securities and loans
Year-Over-Year Growth
6.6%
6.1%
4.1%
0.7%
(1.5%)
$2,713
$2,783
$2,783
$2,709
$2,672
3.58%
3.59%
3.55%
3.48%
3.43%
0.0%
2.0%
4.0%
6.0%
8.0%
0
1,000
2,000
3,000
4,000
2Q12
3Q12
4Q12
1Q13
2Q13
Net Interest Income
Net Interest Margin |
 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. 2Q12
Noninterest income declined by $79 million, or 3.4%,
driven by:
•
Mortgage banking revenue decline of $94 million
•
Lower corporate payments revenue (7.4% decline), mainly due to
lower government and transportation-related transactions
•
Higher trust and investment management fees (8.4% increase),
due to improved market conditions and business expansion, and
higher investment product fees (21.1% increase), due to higher
sales volume and fees
•
Higher merchant processing (3.9% increase) and higher credit
and debit card revenue (3.8% increase)
•
Lower other income, mainly due to lower equity investment and
retail lease revenue
vs. 1Q13
Noninterest income grew by $111 million, or 5.1%,
driven by:
•
Higher payments revenue (8.2% increase), primarily due to
seasonally higher transaction volumes
•
Higher trust and investment management fees (2.2% increase)
and higher investment product fees (12.2% increase)
•
Higher commercial products revenue (4.5% increase)
•
Higher deposit service charges (4.6% increase) and treasury
management fees (4.5% increase), mainly due to seasonally
higher transaction volumes
•
Higher other income, mainly due to higher equity investment and
other revenue, partially offset by lower retail lease revenue
Year-Over-Year Growth
9.7%
10.4%
(4.2%)
(3.3%)
(3.4%)
$2,329
$2,165
$2,276
$2,355
$2,396
Trust and
Inv Mgmt
Service
Charges
All Other
Mortgage
Payments
All Other
Mortgage
Service Charges
Trust and Inv Mgmt
Payments
2,800
2,100
1,400
700
0
2Q12
3Q12
4Q12
1Q13
2Q13
2Q13 Earnings
Conference Call
18 |
 19
2Q13 Earnings
Conference Call
Noninterest Expense
Noninterest Expense
Key Points
$ in millions
vs. 2Q12
Noninterest expense was lower by $44 million, or
1.7%, driven by:
•
Lower other expense, mainly due to prior year Visa accrual,
lower FDIC insurance expense and costs related to OREO,
partially offset by higher costs related to investments in
affordable housing and other tax-advantaged projects
•
Lower professional services expense (33.1% decline), due to
reduction in mortgage servicing review-related costs
•
Higher compensation (2.0% increase), primarily the result of
growth in staffing and employee benefits (21.0% increase),
mainly due to higher pension costs
•
Higher marketing and business development expense (20.0%
increase), mainly due to payments-related initiatives
vs. 1Q13
Noninterest expense was higher by $87 million, or
3.5%, driven by:
•
Higher other expense, mainly due to higher insurance and
regulatory expense relative to the prior quarter, partially offset
by lower OREO expense
•
Higher marketing and business development expense (31.5%
increase) and higher professional services expense (16.7%
increase), driven by the timing of projects and initiatives
across a majority of the business lines
•
Lower benefits expense (10.6% decrease), due mainly to
seasonally lower payroll taxes
All Other
Tech and Communications
Prof Svcs, Marketing and PPS
Occupancy and Equipment
Compensation and Benefits
2Q12
3Q12
4Q12
1Q13
2Q13
Mortgage servicing matters
-
$
-
$
80
$
-
$
-
$
Total
-
$
-
$
80
$
-
$
-
$
Notable Noninterest Expense Items
Year-Over-Year Growth
7.3%
5.4%
(0.4%)
(3.5%)
(1.7%)
$2,601
$2,609
$2,686
$2,470
$2,557
Compensation
and Benefits
Occupancy
and Equipment
Prof Services,
Marketing
and PPS
Tech and Comm
All Other |
 20
2Q13 Earnings
Conference Call
Credit Quality
-
Commercial Loans
Average Loans and Net Charge-offs Ratios
Key Statistics
Comments
Strong
new
lending
activity
resulted
in
2.6%
linked
quarter
loan
growth
and
13.1%
year-over-year
growth
even though utilization rates remained at historically low levels
Nonperforming loans and net charge-offs continued to improve
year-over-year and were unchanged on a linked quarter basis
Early stage delinquencies remained at moderate levels
2Q12
1Q13
2Q13
Average Loans
$54,362
$59,921
$61,507
30-89 Delinquencies
0.26%
0.20%
0.23%
90+ Delinquencies
0.07%
0.10%
0.10%
Nonperforming Loans
0.31%
0.14%
0.14%
$ in millions
$54,362
$56,655
$58,552
$59,921
$61,507
0.41%
0.41%
0.32%
0.22%
0.22%
0.0%
1.0%
2.0%
3.0%
4.0%
0
20,000
40,000
60,000
80,000
2Q12
3Q12
4Q12
1Q13
2Q13
Average Loans
Net Charge-offs Ratio |
 21
2Q13 Earnings
Conference Call
Credit Quality
-
Commercial Leases
Average Loans and Net Charge-offs Ratios
Key Statistics
Comments
Net charge-offs improved materially year-over-year and rose modestly on
a linked quarter basis Nonperforming loans and early stage delinquencies
improved year-over-year and on a linked quarter basis
2Q12
1Q13
2Q13
Average Loans
$5,658
$5,378
$5,255
30-89 Delinquencies
0.83%
0.82%
0.74%
90+ Delinquencies
0.00%
0.00%
0.00%
Nonperforming Loans
0.40%
0.30%
0.27%
$ in millions
$5,658
$5,537
$5,377
$5,378
$5,255
1.07%
0.50%
0.37%
0.23%
0.31%
0.0%
1.0%
2.0%
3.0%
4.0%
0
2,000
4,000
6,000
8,000
2Q12
3Q12
4Q12
1Q13
2Q13
Average Loans
Net Charge-offs Ratio
Commercial Leases |
 22
Credit Quality
-
Commercial Real Estate
Key Statistics
Comments
Average loans increased 1.8% on a linked quarter basis
High levels of commercial real estate recoveries, reflecting continued improvement
in market conditions Early stage delinquencies remain stable
year-over-year and on a linked quarter basis Nonperforming loans
continued to decline, down from the peak of 5.36% in 1Q10 2Q12
1Q13
2Q13
Average Loans
$36,549
$37,218
$37,884
30-89 Delinquencies
0.24%
0.22%
0.23%
90+ Delinquencies
0.03%
0.02%
0.03%
Nonperforming Loans
1.89%
1.36%
1.11%
Performing TDRs*
596
526
494
$ in millions
Investor
$20,270
Owner
Occupied
$11,101
Multi-family
$2,085
Retail
$494
Residential
Construction
$1,385
A&D
Construction
$547
Office
$510
Other
$1,492
* TDR = troubled debt restructuring
Average Loans and Net Charge-offs Ratios
2Q13 Earnings
Conference Call
45,000
30,000
15,000
0
$36,549
$36,630
$36,851
$37,218
$37,884
0.9%
0.6%
0.3%
0.0%
-0.3%
2Q12
3Q12
4Q12
1Q13
2Q13
Average Loans
Net Charge-offs Ratio
22 |
 23
2Q13 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 65%) as average loans increased 3.9% over 1Q13, driven by demand
for refinancing Over 74% of the balances have been originated since the
beginning of 2009, the origination quality metrics and performance to date
have significantly outperformed prior vintages with similar seasoning Net
charge-offs continue to decline as housing values improve 2Q12
1Q13
2Q13
Average Loans
$39,166
$45,109
$46,873
30-89 Delinquencies
0.86%
0.71%
0.78%
90+ Delinquencies
0.80%
0.54%
0.53%
Nonperforming Loans
1.65%
1.46%
1.43%
$ in millions
*
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
$39,166
$40,969
$43,156
$45,109
$46,873
1.12%
1.17%
0.88%
0.83%
0.63%
0.96%*
0.0%
1.0%
2.0%
3.0%
4.0%
0
15,000
30,000
45,000
60,000
2Q12
3Q12
4Q12
1Q13
2Q13
Average Loans
Net Charge-offs Ratio
Adjusted NCO Ratio
$2,011
$2,076
$2,087
$2,035
$2,084
0
1,000
2,000
3,000
4,000
2Q12
3Q12
4Q12
1Q13
2Q13
Residential Mortgage Performing TDRs**
**
Excludes
GNMA
loans,
whose
repayments
are
insured
by
the
FHA
or
guaranteed
by
the
Department
of
VA
($1,851
million
2Q13) |
 24
2Q13 Earnings
Conference Call
2Q12
1Q13
2Q13
Average Loans
$16,696
$16,528
$16,416
30-89 Delinquencies
1.20%
1.24%
1.17%
90+ Delinquencies
1.17%
1.26%
1.10%
Nonperforming Loans
1.12%
0.78%
0.65%
Credit Quality -
Credit Card
Average Loans and Net Charge-offs Ratios
Key Statistics
Comments
Increased loss rate driven by lower recoveries
Delinquencies remain at historically low levels
Nonperforming loans have decreased for eight consecutive quarters
$ in millions
$16,696
$16,551
$16,588
$16,528
$16,416
4.10%
4.01%
3.86%
3.93%
4.23%
0.0%
2.5%
5.0%
7.5%
10.0%
0
5,000
10,000
15,000
20,000
2Q12
3Q12
4Q12
1Q13
2Q13
Average Loans
Net Charge-offs Ratio
$189
$163
$146
$127
$109
1.12%
0.99%
0.85%
0.78%
0.65%
0.0%
0.6%
1.2%
1.8%
2.4%
0
60
120
180
240
2Q12
3Q12
4Q12
1Q13
2Q13
Credit Card Nonperforming Loans |
 25
2Q13 Earnings
Conference Call
Credit Quality -
Home Equity
Average Loans and Net Charge-offs Ratios
Key Statistics
Comments
High-quality originations (weighted average FICO 761, weighted average CLTV
71%) originated primarily through the retail branch network to existing bank
customers on their primary residence Net charge-off ratio declined on a
linked quarter basis 2Q12
1Q13
2Q13
Average Loans
$17,598
$16,434
$15,989
30-89 Delinquencies
0.71%
0.70%
0.74%
90+ Delinquencies
0.30%
0.27%
0.25%
Nonperforming Loans
0.91%
1.25%
1.23%
$ in millions
*
Excluding
$26
million
related
to
a
regulatory
clarification
in
the
treatment
of
loans
to
borrowerswho
have
exited
bankruptcy
but
continue
to
make
payments
on
their
loans
$17,598
$17,329
$16,950
$16,434
$15,989
1.44%
2.04%
1.76%
1.80%
1.45%
1.44%*
0.0%
1.5%
3.0%
4.5%
6.0%
0
6,000
12,000
18,000
24,000
2Q12
3Q12
4Q12
1Q13
2Q13
Average Loans
Net Charge-offs Ratio
Adjusted NCO Ratio |
 Credit Quality -
Retail Leasing
Average Loans and Net Charge-offs Ratios
Key Statistics
Comments
Strong year-over-year growth (9.7%) driven by high-quality originations
(weighted average FICO 769) Delinquencies remain relatively stable at very
low levels Strong used auto values continued to contribute to historically
low net charge-offs 2Q12
1Q13
2Q13
Average Loans
$5,151
$5,448
$5,653
30-89 Delinquencies
0.13%
0.12%
0.14%
90+ Delinquencies
0.00%
0.02%
0.00%
Nonperforming Loans
0.00%
0.02%
0.02%
$ in millions
*
Manheim
Used
Vehicle
Value
Index
source:
www.manheimconsulting.com,
January
1995
=
100,
quarter
value
=
average
monthly
ending
value
9,000
6,000
3,000
0
$5,151
$5,256
$5,384
$5,448
$5,653
2Q12
3Q12
4Q12
1Q13
2Q13
0.00%
0.00%
0.07%
0.07%
-0.07%
1.5%
1.0%
0.5%
0.0%
130
120
110
100
Manheim Used Vehicle Index*
90
2Q13 Earnings
Conference Call
Average Loans
Net Charge-offs Ratio
26
-0.5% |
 27
2Q13 Earnings
Conference Call
Credit Quality -
Other Retail
Average Loans and Net Charge-offs Ratios
Key Statistics
Comments
Year-over-year
growth in Auto Loans continue to offset declines in Student Lending loan
balances (see slide 28 for auto loan detail)
Delinquencies and nonperforming loans remain stable and at very low levels
2Q12
1Q13
2Q13
Average Loans
$25,151
$25,364
$25,224
30-89 Delinquencies
0.51%
0.48%
0.46%
90+ Delinquencies
0.16%
0.16%
0.14%
Nonperforming Loans
0.09%
0.10%
0.11%
Installment
$5,564
$ 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
$25,151
$25,406
$25,595
$25,364
$25,224
0.86%
1.06%
0.92%
0.83%
0.76%
0.98%*
0.0%
1.0%
2.0%
3.0%
4.0%
0
10,000
20,000
30,000
40,000
2Q12
3Q12
4Q12
1Q13
2Q13
Average Loans
Net Charge-offs Ratio
Adjusted NCO Ratio
Other Retail |
 28
2Q13 Earnings
Conference Call
Indirect and Direct Channel
Credit Quality -
Auto Loans
Average Loans and Net Charge-offs Ratios
Key Statistics
Comments
Continued growth in Auto Loans driven by high-quality originations (Indirect
channel weighted average FICO 767, Direct channel weighted average FICO
750) Low net charge-offs and delinquencies continue as used vehicle
values remain strong 2Q12
1Q13
2Q13
Average Loans
$11,974
$12,519
$12,575
30-89 Delinquencies
0.40%
0.30%
0.30%
90+ Delinquencies
0.04%
0.03%
0.02%
Nonperforming Loans
0.00%
0.02%
0.02%
$ in millions
Auto Loans are included in Other Retail category
Direct: 9%
Wtd Avg FICO: 748
NCO: 0.00%
Indirect: 91%
Wtd Avg FICO: 770
NCO: 0.00%
$11,974
$12,211
$12,540
$12,519
$12,575
0.13%
0.20%
0.22%
0.16%
0.00%
0.0%
0.2%
0.4%
0.6%
0.8%
0
4,000
8,000
12,000
16,000
2Q12
3Q12
4Q12
1Q13
2Q13
Average Loans
Net Charge-offs Ratio |
 29
2Q13 Earnings
Conference Call
Non-GAAP Financial Measures
$ in millions
2Q13
1Q13
4Q12
3Q12
2Q12
Total equity
41,050
$
40,847
$
40,267
$
39,825
$
38,874
$
Preferred stock
(4,756)
(4,769)
(4,769)
(4,769)
(4,769)
Noncontrolling interests
(1,367)
(1,316)
(1,269)
(1,164)
(1,082)
Goodwill (net of deferred tax liability)
(8,317)
(8,333)
(8,351)
(8,194)
(8,205)
Intangible assets (exclude mortgage servicing rights)
(910)
(963)
(1,006)
(980)
(1,118)
Tangible common equity (a)
25,700
25,466
24,872
24,718
23,700
Tier 1 capital, determined in accordance with prescribed
regulatory requirements using Basel I definition
32,219
31,774
31,203
30,766
30,044
Preferred stock
(4,756)
(4,769)
(4,769)
(4,769)
(4,769)
Noncontrolling interests, less preferred stock not eligible for Tier I
capital (685)
(684)
(685)
(685)
(685)
Tier 1 common equity using Basel I definition (b)
26,778
26,321
25,749
25,312
24,590
Tangible common equity (as calculated above)
25,700
25,466
24,872
24,718
23,700
Adjustments
1
(43)
81
126
157
153
Tier 1 common equity approximated using proposed rules for the
Basel III standardized approach released June 2012 (c)
25,657
25,547
24,998
24,875
23,853
Tangible common equity (as calculated above)
25,700
Adjustments
2
195
Tier 1 common equity estimated using final rules for the
Basel III standardized approach released July 2013 (d)
25,895
1
Includes
net
losses
on
cash
flow
hedges
included
in
accumulated
other
comprehensive
income,
unrealized
losses
on
securities
transferred
from
available-for-sale
to
held-to-maturity
included
in
accumulated
other
comprehensive
income
and
disallowed
mortgage
servicing
rights
2
Includes
net
losses
on
cash
flow
hedges
included
in
accumulated
other
comprehensive
income
and
unrealized
losses
on
securities
transferred
from
available-for-sale
to
held-to-maturity
included
in
accumulated
other
comprehensive
income |
 30
2Q13 Earnings
Conference Call
Non-GAAP Financial Measures
$ in millions
2Q13
1Q13
4Q12
3Q12
2Q12
Total assets
353,415
$
355,447
$
353,855
$
352,253
$
353,136
$
Goodwill (net of deferred tax liability)
(8,317)
(8,333)
(8,351)
(8,194)
(8,205)
Intangible assets (exclude mortgage servicing rights)
(910)
(963)
(1,006)
(980)
(1,118)
Tangible assets (e)
344,188
346,151
344,498
343,079
343,813
Risk-weighted assets, determined in accordance with prescribed
regulatory requirements using Basel I definition (f)
289,613
289,672
287,611
282,033
279,972
Adjustments
3
20,866
21,021
21,233
22,167
23,240
Risk-weighted assets approximated using proposed rules for the
Basel III standardized approach released June 2012 (g)
310,479
310,693
308,844
304,200
303,212
Risk-weighted assets, determined in accordance with prescribed
regulatory requirements using Basel I definition
289,613
Adjustments
4
12,476
Risk-weighted assets estimated using final rules for the
Basel III standardized approach released July 2013 (h)
302,089
Ratios
Tangible common equity to tangible assets (a)/(e)
7.5%
7.4%
7.2%
7.2%
6.9%
Tangible common equity to risk-weighted assets using Basel I definition
(a)/(f) 8.9%
8.8%
8.6%
8.8%
8.5%
Tier 1 common equity to risk-weighted assets using Basel I definition
(b)/(f) 9.2%
9.1%
9.0%
9.0%
8.8%
Tier 1 common equity to risk-weighted assets approximated using proposed
rules for the Basel III standardized approach released June 2012
(c)/(g)
8.3%
8.2%
8.1%
8.2%
7.9%
Tier 1 common equity to risk-weighted assets estimated using final rules
for the Basel III standardized approach released July 2013 (d)/(h)
8.6%
-
-
-
-
2Q13
risk-weighted
assets
are
preliminary
data,
subject
to
change
prior
to
filings
with
applicable
regulatory
agencies
3
Includes higher risk-weighting for residential mortgages, unfunded loan
commitments, investment securities and mortgage servicing rights, and other adjustments
4
Includes higher risk-weighting for unfunded loan commitments, investment
securities and mortgage servicing rights, and other adjustments |
 U.S.
Bancorp 2Q13 Earnings
Conference Call
U.S. Bancorp
2Q13 Earnings
Conference Call
July 17, 2013 |