 U.S. Bancorp 3Q11 Earnings Conference Call U.S. Bancorp 3Q11 Earnings Conference Call October 19, 2011 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, 2010, 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 3Q11 Earnings Conference Call 3Q11 Highlights Record net income of $1.3 billion; $0.64 per diluted common share Record total net revenue of $4.8 billion, up 4.5% vs. 3Q10 • Net interest income growth of 5.9% vs. 3Q10 • Noninterest income growth of 2.9% vs. 3Q10 Average loan growth of 5.0% (4.5% excluding acquisitions) vs. 3Q10 and average loan growth of 1.7% vs. 2Q11 Strong average low cost deposit 1 growth of 23.2% (18.3% excluding acquisitions) vs. 3Q10 and average low cost deposit growth of 4.7% vs. 2Q11 Net charge-offs declined 10.4% vs. 2Q11 and nonperforming assets (excluding covered assets) declined 6.9% vs. 2Q11 Capital generation continues to strengthen capital position • Tier 1 common equity ratio of 8.5% (8.2% under anticipated Basel III guidelines) • Tier 1 capital ratio of 10.8% • Repurchased 13 million shares of common stock during 3Q11 1 Low cost deposits consist of noninterest-bearing, interest checking, money market and savings deposits |
 4 3Q11 Earnings Conference Call Performance Ratios 16.1% 15.9% 14.5% 13.7% 12.8% 1.57% 1.54% 1.38% 1.31% 1.26% 0% 5% 10% 15% 20% 3Q10 4Q10 1Q11 2Q11 3Q11 0% 1% 2% 3% 4% 51.5% 51.6% 51.1% 52.5% 51.9% 3.65% 3.67% 3.69% 3.83% 3.91% 30% 40% 50% 60% 70% 3Q10 4Q10 1Q11 2Q11 3Q11 1% 2% 3% 4% 5% 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 3Q11 Earnings Conference Call 3Q11 2Q11 1Q11 4Q10 3Q10 Shareholders' equity 33.2 $ 32.5 $ 30.5 $ 29.5 $ 29.2 $ Tier 1 capital 28.1 27.8 26.8 25.9 24.9 Total risk-based capital 35.4 35.1 34.2 33.0 32.3 Tier 1 common equity ratio 8.5% 8.4% 8.2% 7.8% 7.6% Tier 1 capital ratio 10.8% 11.0% 10.8% 10.5% 10.3% Total risk-based capital ratio 13.5% 13.9% 13.8% 13.3% 13.3% Leverage ratio 9.0% 9.2% 9.0% 9.1% 9.0% Tangible common equity ratio 6.6% 6.5% 6.3% 6.0% 6.2% Tangible common equity as a percent of risk-weighted assets 8.1% 8.0% 7.6% 7.2% 7.2% Capital Position $ in billions |
 6 3Q11 Earnings Conference Call Loan and Deposit Growth Average Balances Year-Over-Year Growth 3Q11 Acquisition Adjusted Loan Growth = 4.5% Deposit Growth = 13.2% 2.4% $197.6 4.0% $198.8 5.0% $202.2 5.8% $192.5 2.0% $195.5 11.9% $204.3 14.2% $209.4 17.9% $215.4 9.8% $182.7 5.2% $190.3 $ in billions 150 170 190 210 230 3Q10 4Q10 1Q11 2Q11 3Q11 Loans Deposits |
 7 3Q11 Earnings Conference Call Taxable-equivalent basis Revenue Growth Year-Over-Year Growth 7.9% 7.9% 4.6% 3.8% 4.5% $ in millions 4,587 4,721 4,519 4,690 4,795 3,000 3,500 4,000 4,500 5,000 3Q10 4Q10 1Q11 2Q11 3Q11 |
 8 3Q11 Earnings Conference Call Credit Quality $ in millions, linked quarter change * Excluding Covered Assets (assets subject to loss sharing agreements with FDIC), 1Q11 change in NPAs excludes FCB acquisition ($287 million) Change in Net Charge-offs Change in Nonperforming Assets* NCO $ Change (Left Scale) NCO % Change (Right Scale) NPA $ Change (Left Scale) NPA % Change (Right Scale) 103 68 (21) 25 69 112 141 156 134 102 155 290 91 184 386 626 727 489 357 (261) (119) (171) (58) (212) (132) (159) (78) (217) (58) (226) -10% -7% -14% -6% -11% -2% 2% 7% 12% 18% 25% 27% 26% 35% 30% -160 -80 0 80 160 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 -40% -20% 0% 20% 40% -7% -6% 22% 34% 31% 33% 37% 23% 12% 5% 2% -7% -5% -6% -5% -800 -400 0 400 800 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 -40% -20% 0% 20% 40% |
 9 3Q11 Earnings Conference Call Credit Quality - Outlook The Company expects the level of Net Charge-offs and Nonperforming Assets to trend lower during 4Q11 Delinquencies* Changes in Criticized Assets* * Excluding Covered Assets (assets subject to loss sharing agreements with FDIC) 1Q11 change in criticized assets excludes FCB acquisition 0.69% 1.06% 1.04% 1.18% 1.62% 1.70% 1.45% 1.44% 1.48% 1.34% 1.11% 1.00% 1.04% 0.84% 0.72% 0.43% 0.43% 0.41% 0.46% 0.56% 0.68% 0.72% 0.78% 0.88% 0.78% 0.72% 0.66% 0.61% 0.52% 0.44% 0.0% 0.5% 1.0% 1.5% 2.0% 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 30 to 89 days 90+ days -8% -9% -1% -11% -8% 18% 23% 16% 36% 28% 0% 6% 0% -1% -16% -40.0% -20.0% 0.0% 20.0% 40.0% 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 |
 10 3Q11 Earnings Conference Call Credit Quality - Reserves Allowance for Credit Losses Allowance for Credit Losses Provision/NCO's $ in millions 5,536 5,439 5,264 4,986 4,571 4,105 3,639 2,898 2,648 2,435 2,260 5,540 5,531 5,498 5,308 5,190 78% 77% 94% 97% 100% 102% 115% 125% 140% 150% 167% 200% 150% 151% 166% 100% 0 1,500 3,000 4,500 6,000 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 60% 95% 130% 165% 200% |
 11 3Q11 Earnings Conference Call YTD YTD 3Q11 2Q11 3Q10 vs 2Q11 vs 3Q10 2011 2010 % B/(W) Net Interest Income 2,624 $ 2,544 $ 2,477 $ 3.1 5.9 7,675 $ 7,289 $ 5.3 Noninterest Income 2,171 2,146 2,110 1.2 2.9 6,329 6,138 3.1 Total Revenue 4,795 4,690 4,587 2.2 4.5 14,004 13,427 4.3 Noninterest Expense 2,476 2,425 2,385 (2.1) (3.8) 7,215 6,898 (4.6) Operating Income 2,319 2,265 2,202 2.4 5.3 6,789 6,529 4.0 Net Charge-offs 669 747 995 10.4 32.8 2,221 3,244 31.5 Excess Provision (150) (175) - -- -- (375) 200 -- Income before Taxes 1,800 1,693 1,207 6.3 49.1 4,943 3,085 60.2 Applicable Income Taxes 548 514 313 (6.6) (75.1) 1,483 776 (91.1) Noncontrolling Interests 21 24 14 (12.5) 50.0 62 34 82.4 Net Income 1,273 1,203 908 5.8 40.2 3,522 2,343 50.3 Preferred Dividends/Other 36 36 37 - 2.7 115 (38) -- NI to Common 1,237 $ 1,167 $ 871 $ 6.0 42.0 3,407 $ 2,381 $ 43.1 Diluted EPS 0.64 $ 0.60 $ 0.45 $ 6.7 42.2 1.77 $ 1.24 $ 42.7 Average Diluted Shares 1,922 1,929 1,920 0.4 (0.1) 1,926 1,920 (0.3) % B/(W) Earnings Summary $ in millions, except per-share data Taxable-equivalent basis |
 12 3Q11 Earnings Conference Call 3Q11 Results - Key Drivers vs. 3Q10 Net Revenue growth of 4.5% • Net interest income growth of 5.9%; net interest margin of 3.65% vs. 3.91% • Noninterest income growth of 2.9% Noninterest expense growth of 3.8% Provision for credit losses lower by $476 million • Net charge-offs lower by $326 million • Provision lower than NCOs by $150 million vs. provision equal to NCOs in 3Q10 vs. 2Q11 Net Revenue growth of 2.2% • Net interest income growth of 3.1%; net interest margin of 3.65% vs. 3.67% • Noninterest income growth of 1.2% Noninterest expense growth of 2.1% Provision for credit losses lower by $53 million • Net charge-offs lower by $78 million • Provision lower than NCOs by $150 million vs. provision lower than NCOs by $175 million in 2Q11 |
 13 3Q11 Earnings Conference Call Net Interest Income Net Interest Income Key Points $ in millions Taxable-equivalent basis vs. 3Q10 Average earning assets grew by $34.4 billion, or 13.6% (13.2% excluding acquisitions) Net interest margin lower by 26 bp (3.65% vs. 3.91%) driven by: • Higher balances in lower yielding investment securities • Higher cash position at the Federal Reserve vs. 2Q11 Average earning assets grew by $8.7 billion, or 3.1% Net interest margin lower by 2 bp (3.65% vs. 3.67%) driven by: • Higher balances in lower yielding investment securities Year-Over-Year Growth 14.8% 5.9% 4.3% 5.6% 5.9% 2,477 2,499 2,507 2,544 2,624 3.91% 3.83% 3.69% 3.67% 3.65% 1,500 1,800 2,100 2,400 2,700 3Q10 4Q10 1Q11 2Q11 3Q11 2.0% 3.0% 4.0% 5.0% 6.0% Net Interest Income Net Interest Margin |
 14 3Q11 Earnings Conference Call Covered Commercial CRE Res Mtg Retail Credit Card Average Loans Average Loans Key Points $ in billions Year-Over-Year Growth 5.8% 2.0% 2.4% 4.0% 5.0% $202.2 $192.5 $195.5 $197.6 $198.8 Retail Res Mtg Covered CRE Commercial vs. 3Q10 Average total loans grew by $9.7 billion, or 5.0% (4.5% excluding acquisitions) Average total loans, excluding covered loans, were higher by 7.6% Average commercial loans increased $5.6 billion, or 11.9% (11.7% excluding acquisitions) vs. 2Q11 Average total loans grew by $3.4 billion, or 1.7% Average total loans, excluding covered loans, were higher by 2.3% Average commercial loans grew by $2.3 billion, or 4.6% Credit Card 11.9% 8.0% 3.0% (4.5%) (8.7%) 4.0% 3.9% 3.0% 1.6% 1.1% 22.0% 22.0% 20.3% 15.8% 14.3% (2.7%) (2.7%) (1.5%) 0.0% 7.3% 1.1% 1.9% 1.9% 3.1% 2.2% 0 60 120 180 240 3Q10 4Q10 1Q11 2Q11 3Q11 |
 15 3Q11 Earnings Conference Call Average Deposits 1.0% 5.1% 1.9% (7.4%) (0.8%) 17.4% 11.8% 11.6% 2.9% 13.8% 11.0% 17.3% 17.2% 17.5% 17.8% 47.5% 22.1% 16.3% 4.8% 7.4% 0 60 120 180 240 3Q10 4Q10 1Q11 2Q11 3Q11 Average Deposits Key Points $ in billions Year-Over-Year Growth 9.8% 5.2% 11.9% 14.2% 17.9% $215.4 $182.7 $190.3 $204.3 $209.4 Noninterest -bearing Checking & Savings Time Money Market vs. 3Q10 Average total deposits increased by $32.7 billion, or 17.9% (13.2% excluding acquisitions) Average low cost deposits (NIB, interest checking, money market and savings), increased by $32.3 billion, or 23.2% (18.3% excluding acquisitions) vs. 2Q11 Average total deposits increased by $6.0 billion, or 2.8% Average low cost deposits increased by $7.7 billion, or 4.7% Time Money Market Checking & Savings Noninterest-bearing |
 16 3Q11 Earnings Conference Call 3Q10 4Q10 1Q11 2Q11 3Q11 Valuation losses (9) $ (14) $ (5) $ (8) $ (9) $ Other non-operating gains - 103 46 - - Total (9) $ 89 $ 41 $ (8) $ (9) $ Notable Noninterest Income Items All Other Mortgage Service Charges Trust & Inv Mgmt Payments Noninterest Income Noninterest Income Key Points $ in millions Year-Over-Year Growth 0.8% 10.2% 4.9% 1.7% 2.9% $2,146 $2,110 $2,171 $2,222 $2,012 Trust & Inv Mgmt Service Charges All Other Mortgage Payments Payments = credit and debit card revenue, corporate payment products revenue and merchant processing services; Service charges = deposit service charges, treasury management fees and ATM processing services vs. 3Q10 Noninterest income grew by $61 million, or 2.9%, driven by: • Payments revenue (6.0% growth) • Service charges (7.7% growth) • Commercial products revenue (7.6% growth) • Lower Trust and Inv Mgmt fees (9.7% decline) primarily due to the sale of the long-term asset mgmt business (4Q10) and money market account fee waivers • Mortgage banking revenue decrease of $65 million 31% decrease in production volume Favorable net change in MSR valuation and related hedging (hedge $7 3Q11 vs. $1 3Q10) vs. 2Q11 Noninterest income grew by $25 million, or 1.2%, driven by: • Payments revenue (2.6% growth) primarily due to seasonally higher corporate payments revenue • Deposit service charges (13.0% growth) due to higher transaction volumes and product redesign initiatives • Lower Trust and Inv Mgmt fees (6.6% decline) primarily due to the impact of market conditions and money market account fee waivers • Mortgage banking revenue increase of $6 million 43% increase in production volume Unfavorable net change in MSR valuation and related hedging (hedge $7 3Q11 vs. $81 2Q11) 21.4% (21.0%) 7.7% (9.7%) 6.0% 0 700 1400 2100 2800 3Q10 4Q10 1Q11 2Q11 3Q11 |
 17 3Q11 Earnings Conference Call Noninterest Expense (5.8%) 1.6% 6.9% 10.0% 7.0% 0 700 1400 2100 2800 3Q10 4Q10 1Q11 2Q11 3Q11 Noninterest Expense Key Points $ in millions Year-Over-Year Growth 16.2% 11.5% 8.3% 2.0% 3.8% $2,425 $2,476 $2,385 $2,485 $2,314 Occupancy & Equipment Prof Services, Marketing & PPS All Other Tech & Comm Compensation & Benefits vs. 3Q10 Noninterest expense was higher by $91 million, or 3.8%, driven by: • Increased compensation (4.9%) and employee benefits (18.7%) • Increase in net occupancy & equipment (10.0%) related to business expansion and technology initiatives • Increase in professional services (28.2%) due to mortgage servicing-related projects • Other expense lower primarily due to favorable changes in other loan expense and costs related to insurance and litigation matters, partially offset by higher investments in affordable housing and other tax-advantaged projects vs. 2Q11 Noninterest expense was higher by $51 million, or 2.1%, driven by: • Higher compensation (1.7%) principally due to additions to staff and higher incentives • Increase in professional services (22.0%) due to mortgage servicing-related projects • Increase in marketing and business development expenses (13.3%) due to the timing of payments- related initiatives and an increase in the contribution to the Company’s charitable foundation All Other Tech & Communications Prof Svcs, Marketing and PPS Occupancy & Equip Compensation & Benefits |
 18 3Q11 Earnings Conference Call Mortgage Repurchase Mortgages Repurchased and Make-whole Payments Mortgage Representation and Warranties Reserve $ in millions 3Q11 2Q11 1Q11 4Q10 3Q10 Beginning Reserve $173 $181 $180 $147 $101 Net Realized Losses (31) (43) (32) (27) (24) Additions to Reserve 20 35 33 60 70 Ending Reserve $162 $173 $181 $180 $147 Mortgages repurchased and make-whole payments $57 $72 $90 $69 $53 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 = $115 million Repurchase requests expected to decline over the next few quarters |
 19 3Q11 Earnings Conference Call Positioned to Win |
 20 3Q11 Earnings Conference Call Appendix |
 21 3Q11 Earnings Conference Call YTD YTD 3Q11 2Q11 3Q10 2011 2010 Revenue Items Securities gains (losses), net (9) $ (8) $ (9) $ (22) $ (64) $ Gain related to FCB acquisition - - - 46 - Expense Items ITS transaction debt extinguishment and expense - - - - 18 Incremental Provision (150) (175) - (375) 200 ITS transaction equity impact (net of tax)* - - - - 118 Notable Items $ in millions * Not a component of net income, but does impact net income applicable to U.S. Bancorp common shareholders and earnings per diluted common share |
 22 3Q11 Earnings Conference Call Regulatory Environment Existing regulatory oversight actions Future regulatory oversight actions • Dodd-Frank Wall Street Reform and Consumer Protection Act Consumer Financial Protection Bureau • Residential mortgage foreclosure policy and procedures FY 2010 Annual Actual Run Rate Overdraft Legislation $255 $440 - $480 Pricing and Policy Changes Card Act $160 $250 Net Interest Margin and Fee Income Durbin Amendment -- $300* $ in millions, estimated reduction to revenue * 4Q11 impact approximately $75 million ($0.24 per average transaction starting 4Q11) |
 23 3Q11 Earnings Conference Call Credit Quality - Commercial Loans 40,726 41,700 42,683 44,135 46,484 1.49% 1.11% 1.19% 0.75% 0.77% 0 15,000 30,000 45,000 60,000 3Q10 4Q10 1Q11 2Q11 3Q11 0.0% 1.5% 3.0% 4.5% 6.0% Average Loans Net Charge-offs Ratio Average Loans and Net Charge-offs Ratios Key Statistics Comments Overall delinquencies and nonperforming loans continued to improve year-over-year and on a linked quarter basis Net charge-offs increased slightly during the quarter, however, were down significantly from the prior year Loan balances and commitments grew: utilization rates remain historically low 3Q10 2Q11 3Q11 Average Loans 40,726 44,135 46,484 30-89 Delinquencies 0.76% 0.46% 0.34% 90+ Delinquencies 0.22% 0.09% 0.09% Nonperforming Loans 1.43% 0.78% 0.71% 20% 25% 30% 35% 40% 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 Revolving Line Utilization Trend $ in millions |
 24 3Q11 Earnings Conference Call Credit Quality - Commercial Leases 6,058 6,012 6,030 5,919 5,860 1.18% 1.12% 0.94% 0.88% 0.61% 0 2,000 4,000 6,000 8,000 3Q10 4Q10 1Q11 2Q11 3Q11 0.0% 1.5% 3.0% 4.5% 6.0% Average Loans Net Charge-offs Ratio Average Loans and Net Charge-offs Ratios Key Statistics Comments Net charge-offs improved, declining to 0.61% for the quarter Credit quality continued to improve as overall delinquencies and nonperforming loans declined on a linked quarter and year-over-year basis 3Q10 2Q11 3Q11 Average Loans 6,058 5,919 5,860 30-89 Delinquencies 1.45% 1.00% 0.93% 90+ Delinquencies 0.02% 0.02% 0.02% Nonperforming Loans 1.83% 0.73% 0.68% $ in millions Equipment Finance $2,376 Small Ticket $3,484 |
 25 3Q11 Earnings Conference Call Credit Quality - Commercial Real Estate 34,190 34,577 35,179 35,499 35,569 2.40% 2.51% 1.44% 1.85% 1.39% 0.93% 0.90% 0.59% 1.33% 1.72% 3.43% 5.67% 4.61% 6.54% 4.56% 0 10,000 20,000 30,000 40,000 3Q10 4Q10 1Q11 2Q11 3Q11 0.0% 2.5% 5.0% 7.5% 10.0% Average Loans and Net Charge-offs Ratios Key Statistics Comments Net charge-offs and nonperforming loans decreased on a linked quarter and on a year-over-year basis Exposure to construction lending has decreased on a linked quarter basis by 7% and a year-over-year basis by 19% 3Q10 2Q11 3Q11 Average Loans 34,190 35,499 35,569 30-89 Delinquencies 0.50% 0.45% 0.44% 90+ Delinquencies 0.05% 0.01% 0.08% Nonperforming Loans 4.15% 3.84% 3.43% Performing TDRs* 70 225 459 $ in millions Multi-family $1,560 Other $960 Office $788 A&D Construction $938 Retail $827 Condo Construction $336 Residential Construction $1,181 Investor $17,693 Owner Occupied $11,286 CRE Mortgage CRE Construction Average Loans Net Charge-offs Ratio NCO Ratio - Comm Mtg NCO Ratio - Construction * TDR = troubled debt restructuring, 3Q11 increase principally due to the impact of new accounting guidance adopted in the current quarter (FASB Accounting Standards Update No. 2011-02) |
 26 3Q11 Earnings Conference Call 1,938 1,939 1,890 1,804 1,747 0 1,000 2,000 3,000 4,000 3Q10 4Q10 1Q11 2Q11 3Q11 Credit Quality - Residential Mortgage 27,890 29,659 31,777 32,734 34,026 1.88% 1.75% 1.65% 1.46% 1.42% 0 9,000 18,000 27,000 36,000 3Q10 4Q10 1Q11 2Q11 3Q11 0.0% 1.5% 3.0% 4.5% 6.0% Average Loans Net Charge-offs Ratio Average Loans and Net Charge-offs Ratios Key Statistics Comments Strong growth in high quality originations (weighted average FICO 760, weighted average LTV 68%) as average loans increased 3.9% over 2Q11, driven by demand for refinancing Continued to help home owners by successfully modifying 4,624 loans (owned and serviced) in 3Q11, representing $843 million in balances Nonperforming loans, delinquencies and foreclosure inventory all improved 3Q10 2Q11 3Q11 Average Loans 27,890 32,734 34,026 30-89 Delinquencies 1.65% 1.11% 1.09% 90+ Delinquencies 1.75% 1.13% 1.03% Nonperforming Loans 2.15% 2.03% 1.85% Residential Mortgage Performing TDRs $ in millions * Excludes GNMA loans, whose repayments are insured by the Federal Housing Administration or guaranteed by the Department of Veteran Affairs ($866 million 3Q11) * |
 27 3Q11 Earnings Conference Call 3Q10 2Q11 3Q11 Average Loans 16,510 15,884 16,057 30-89 Delinquencies 1.85% 1.34% 1.38% 90+ Delinquencies 2.09% 1.32% 1.28% Nonperforming Loans 1.21% 1.59% 1.53% Credit Quality - Credit Card 16,510 16,403 16,124 15,884 16,057 7.11% 6.65% 6.21% 5.45% 4.40% 4.54% 5.62% 6.45% 7.21% 7.84% 0 5,000 10,000 15,000 20,000 3Q10 4Q10 1Q11 2Q11 3Q11 0.0% 4.0% 8.0% 12.0% 16.0% Average Loans and Net Charge-offs Ratios Key Statistics Comments Overall delinquencies were relatively flat for the quarter Net charge-offs declined for the fifth consecutive quarter $ 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* Core Portfolio $15,562 Portfolios Acquired at Fair Value $495 |
 28 3Q11 Earnings Conference Call Credit Quality - Home Equity 19,289 19,119 18,801 18,634 18,510 1.59% 1.64% 1.75% 1.72% 1.62% 0 6,000 12,000 18,000 24,000 3Q10 4Q10 1Q11 2Q11 3Q11 0.0% 1.5% 3.0% 4.5% 6.0% Average Loans Net Charge-offs Ratio Average Loans and Net Charge-offs Ratios Key Statistics Comments Strong credit quality portfolio (weighted average FICO 747, weighted average CLTV 72%) originated primarily through the retail branch network to existing bank customers on their primary residence Loan demand remained soft for home equity products Slight increases in early and late stage delinquencies 3Q10 2Q11 3Q11 Average Loans 19,289 18,634 18,510 30-89 Delinquencies 0.93% 0.78% 0.83% 90+ Delinquencies 0.73% 0.65% 0.67% Nonperforming Loans 0.18% 0.22% 0.19% Traditional: 87% Wtd Avg LTV: 71% NCO: 1.28% Consumer Finance: 13% Wtd Avg LTV: 80% NCO: 3.57% $ in millions |
 29 3Q11 Earnings Conference Call Credit Quality - Retail Leasing Average Loans and Net Charge-offs Ratios Key Statistics Comments Average loans continued to increase as demand for new auto leases remained strong Retail leasing delinquencies have stabilized Strong used auto values continued to reduce end of term risk and net charge-offs 3Q10 2Q11 3Q11 Average Loans 4,289 4,808 5,097 30-89 Delinquencies 0.46% 0.20% 0.19% 90+ Delinquencies 0.05% 0.02% 0.02% Nonperforming Loans --% --% --% $ in millions 90 100 110 120 130 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 Manheim Used Vehicle Value Index* * Manheim Used Vehicle Value Index source: www.manheimconsulting.com, January 1995 = 100, quarter value = average monthly ending value 4,289 4,459 4,647 4,808 5,097 0.19% 0.09% 0.09% 0.00% -0.08% 0 2,000 4,000 6,000 3Q10 4Q10 1Q11 2Q11 3Q11 -1.0% 0.0% 1.0% 2.0% 3.0% Average Loans Net Charge-offs Ratio |
 30 3Q11 Earnings Conference Call Credit Quality - Other Retail 24,281 24,983 24,691 24,498 24,773 1.65% 1.45% 1.33% 1.16% 1.11% 0 7,000 14,000 21,000 28,000 3Q10 4Q10 1Q11 2Q11 3Q11 0.0% 1.5% 3.0% 4.5% 6.0% Average Loans Net Charge-offs Ratio Average Loans and Net Charge-offs Ratios Key Statistics Comments Average balances increased 1.1% over 2Q11, as demand for auto loans remained strong Net charge-offs continued to decline while nonperforming loans remained stable Slight increase in early stage delinquencies; late stage delinquencies remained stable 3Q10 2Q11 3Q11 Average Loans 24,281 24,498 24,773 30-89 Delinquencies 0.81% 0.62% 0.67% 90+ Delinquencies 0.28% 0.20% 0.20% Nonperforming Loans 0.11% 0.13% 0.12% Installment $5,379 Auto Loans $11,279 Revolving Credit $3,325 Student Lending $4,790 $ in millions |
 31 3Q11 Earnings Conference Call $ in millions 3Q11 2Q11 1Q11 4Q10 3Q10 Total equity 34,210 $ 33,341 $ 31,335 $ 30,322 $ 29,943 $ Preferred stock (2,606) (2,606) (1,930) (1,930) (1,930) Noncontrolling interests (980) (889) (828) (803) (792) Goodwill (net of deferred tax liability) (8,265) (8,300) (8,317) (8,337) (8,429) Intangible assets (exclude mortgage servicing rights) (1,209) (1,277) (1,342) (1,376) (1,434) Tangible common equity (a) 21,150 20,269 18,918 17,876 17,358 Tier 1 Capital, determined in accordance with prescribed regulatory requirements using Basel I definition 28,081 27,795 26,821 25,947 24,908 Trust preferred securities (2,675) (3,267) (3,949) (3,949) (3,949) Preferred stock (2,606) (2,606) (1,930) (1,930) (1,930) Noncontrolling interests, less preferred stock not eligible for Tier I capital (695) (695) (694) (692) (694) Tier 1 common equity using Basel I definition (b) 22,105 21,227 20,248 19,376 18,335 Tier 1 capital, determined in accordance with prescribed regulatory requirements using anticipated Basel III definition 24,902 23,931 21,855 20,854 Preferred stock (2,606) (2,606) (1,930) (1,930) Noncontrolling interests of real estate investment trusts (667) (667) (667) (667) Tier 1 common equity using anticipated Basel III definition (c) 21,629 20,658 19,258 18,257 Total assets 330,141 320,874 311,462 307,786 290,654 Goodwill (net of deferred tax liability) (8,265) (8,300) (8,317) (8,337) (8,429) Intangible assets (exclude mortgage servicing rights) (1,209) (1,277) (1,342) (1,376) (1,434) Tangible assets (d) 320,667 311,297 301,803 298,073 280,791 Risk-weighted assets, determined in accordance with prescribed regulatory requirements using Basel I definition (e) 261,115 252,882 247,486 247,619 242,490 Risk-weighted assets using anticipated Basel III definitions (f) 264,103 256,205 250,931 251,704 Ratios Tangible common equity to tangible assets (a)/(d) 6.6% 6.5% 6.3% 6.0% 6.2% Tier 1 common equity to risk-weighted assets using Basel I definition (b)/(e) 8.5% 8.4% 8.2% 7.8% 7.6% Tier 1 common equity to risk-weighted assets using anticipated Basel III definition (c)/(f) 8.2% 8.1% 7.7% 7.3% Tangible common equity to risk-weighted assets (a)/(e) 8.1% 8.0% 7.6% 7.2% 7.2% 3Q11 risk-weighted assets are preliminary data, subject to change prior to filings with applicable regulatory agencies Anticipated Basel III definitions reflect adjustments for changes to the related elements as proposed in December 2010 by regulatory agencies Non-Regulatory Capital Ratios |
 U.S. Bancorp 3Q11 Earnings Conference Call U.S. Bancorp 3Q11 Earnings Conference Call October 19, 2011 |