USB - Earnings call transcript Q4 2017

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Operator

Welcome to U.S. Bancorp’s Fourth Quarter 2017 Earnings conference call.

Following a review of the results by Andy Cecere, President and Chief Executive Officer, and Terry Dolan, U.S. Bancorp’s Vice Chairman and Chief Financial Officer, there will be a formal question and answer session.

If you would like to ask a question, please press star, one on your touchtone phone, and press the pound key to withdraw. recorded Eastern for XX time midnight time. be at beginning at will Eastern noon approximately through call and replay available today XX:XX This Wednesday, January Thompson the over I U.S. conference now Relations for turn to will Jenn of Investor call Bancorp.

Jennifer Thompson

are any their to good and on call our and during our and Thank Dolan, reports website during SEC. described U.S. who and over has and of remarks. Cecere, Form usbank.com. release, risks X Parker answer Bancorp’s to the current would well turn to referencing our review XX-K schedules at Andy a are to could presentation, that statements file of your here press our fourth to slide call joined you, are A morning everyone Andy. on forward-looking today’s results in are call. our and Jamie, on forward-looking today’s be the I materially presentation Andy today questions. copy will quarter will subject as like Factors now and Terry you slide our Page Bill uncertainties. Terry supplemental that and with available made with change subsequent prepared assumptions presentation, as earnings release analyst in remind I to the me

Andrew Cecere

call. Thanks Jenn, and good joining thank you morning our everyone, and for

several talk amounting Slide the reported $X.XX, lot $X.XX this and we’ll notable included X. morning, to we fourth a about our I’ll share. the to quarter, share of earnings conclusion at We prepared items of per start your In have questions which as usual per remarks. take with

to a of items. ago a employees, talk reform customers, and invest each to minute passed that shareholders positive in provide ongoing that tax our communities a The important will is tax development a benefit these savings we and legislation few immediate of constituencies. take about as these portion our was our me notable weeks very Let

signing tax-related of to company make certain with recognized the our one-time one-time our benefit $XXX of result The fourth these and took event, approximately this million the million. employees. million connection and impact foundation special the to two the assets of a of bonus a As for of $XX contribution related $XXX $XXX quarter opportunity liabilities revaluation we legislation, a eligible the items tax. to of charitable net we million to In was accrued

this secrecy, in making we between improve investments We topic. on previous also systems. customer’s discussed regulatory million remain and of has accrual its recognized an to staff additional U.S. and investigation our Bank past laundering including legacy anti-money banking Bank processes integrity, a the morning standards relationship years increasing the and over and to to continually compliance staff, worked controls, and bank controls stakeholders. information diligently to significant program, costs filed our highest AML U.S. of $XXX all and filings several associated and enterprise in processes protect across legal a an for and compliance of related committed legacy we and business. former this the improving management The with our embraces strengthen Bank X-K provides risk and matters U.S. compliance,

shareholders credit items. per through increased metrics. book with line Slide highlights results. and $X.XX, our and expectation earnings value was in to Our Slide the highlights from buybacks. our X.X% earlier. a returned year share XX% excluding earnings our of quality Loan was dividends key notable share by were X.X%, growth X X of our stable, performance We provides at

year-over-year delivered return equity, on positive X.XX% XX.X% the return our and assets. a was tangible average quarter fourth XX.X%. a notable basis excluding was on average items, return Our a items, XX% notable performance, on equity, highlighted efficiency quarter excluding in in on We a common fourth common operating the ratio, and leverage by

provide the Terry me to call more detail over on Now quarter the forward-looking as turn let to guidance. well as

Terrance Dolan

Thanks Andy, morning. and good

turn and increased balance earnings quarter trends. up In notable loans of with a review the linked Commercial follow a start loans quarter ago. from sheet If will the you X.X% a X.X% referencing a X.X% discussion Slide with and I’ll fourth by items. year quarter, My to be excluding X, fourth remarks on increased sequentially. results average basis grew

needs. lending quarter commercial the tapped the lending the loan our X.X% was continue this continued average appetite. We drag rates quarter; gain remained at general fourth borrowers of in basis return not line declined real elevated as growth risk in a prudent XX down growth historical across market in real activity total increased at the share do our low in fourth utilization as and activity to loan a X.X% for by however; businesses. and time, and strong some markets lending retail long-term our total levels pay our commercial remain activity and in our commercial supported estate which Commitment to loans in estate real loans levels fund continuing Primarily to fit loan construction our pay in by forego estate to in lines, point commercial the to of commercial installment our impact leasing. growth view capital mortgage down negatively contributed quarter, We and that average quarter. funding prudent both Retail result opportunities in continued to Pay also downs portfolio.

seasonality, loans credit reflecting quarter, card and partly loans the X.X% mortgage X.X%. increased sequentially, During increased

X, year-over-year. and in services. growth slightly the Slide to non-interest increased grew a management wealth quarter, increased investment deposits and Turning deposits bearing deposits banking X.X%, and and X.X% business and reflecting with saving X.X% on consumer basis third total average linked Compared quarter

betas deposit interest-bearing experience. Our past with to perform continue consistently

hike deposit the expect between will beta the We rate XX end following total up XX%. most about interest recent to bearing

level the X Slide continues up charge-offs occur, net quarter. a the expected linked $X.X than we primarily Slide growth higher the our of trend loan compared of betas yields. lower to decreased third net On basis to that the provides to average basis In quarter quarter X.X% expect toward XX, point you XXXX. X.X% deposit with over fourth quarter, of basis quarter declined compared Net basis toward expected. On be quarter our than modestly were and results third with year-over-year Slide periods. versus see two to up can Record quarter and anticipated rate assets year credit taxable due the versus consumer compared by a income onto billion both up fourth in and quarter a will that interest declined a the somewhat fully the future hikes and move year. XX% now year I revenue fourth earnings in X.X% however, results. billion on quarter was loans were net the was supported quarter a by fourth comparable highlights slower As interest on was $X.X equivalent level; lower Linked fourth of quarter, we points to pace growth and up as Non-performing deposits. beta in X, basis margin as X.XX% XX% X.X% quality continue initially both linked a and one on than year-over-year. will relatively third percentage stable ago. gradually loans

market sales non-interest Trust the a quarter on unchanged. been X.X%, year-over-year interest basis, and margin and which in interest third margin, and conditions corporate would Slide volumes. both the credit by Excluding mainly driven have highlights net that XX.X% On increased linked favorable payments X.X% quarter recoveries growth. card and revenue and points basis trends by higher fees grew X.X% contributed XX basis management grew revenue systems year-over-year. increased asset a and to account income, to net debit due approximately investment two X.X%

declined well third this that revenue. was processing to revenue quarter a with previous line as the ventures impacted of for lower the mortgage the joint in the fee from margins second refinancing events earlier strong industry, offsetting quarter activity performance slightly of Somewhat merchant XXXX. lower merchant our due decrease production certain XX.X% a weather XXXX occurred revenue In exiting by guidance, which late of of driven banking impact in and in the X% year mainly as

position. expense XXXX. the fully expense expenses compensation capital XX% maturity. benefits and grew compliance fewer growth noting expense mainly rate. costs overall hiring expense fourth Slide At by consulting approach Tier X.X%. recent This a of to if to forward-looking services expenses estimated provide company’s to advantaged towards X.X% to December to III has professional the higher continues and growth and as the It’s versus I’ll related employee Basel that XX, projects. quarter, near Turning in guidance. compliance with due expense in support of our programs seasonally some common business to decreased highlights capital year related was On in target quarter compared and quarters tax reflecting X.X%, XX primarily implemented was in ago, our ratio higher programs. X increased Slide moderate to reflecting XX, investments compares the equity non-interest services standardized Regulatory slowed compliance now worth X.X%. using our capital as increase The a third basis, year-over-year

earnings Let how go-forward a of discussion on impacted be me our tax a basis. will reform with positively start by

approximately effective for to to approximately X% X Our plus or X% rate XX% for taxes, is purposes total. expected tax federal XXXX in be state in

with our policies, technology, full rates tax business to of taxable of capital taxable XXXX. to of Consistent automation, investments, to we expect tax we notable the rate, including as XX% decline accelerated tax our our positive with year compares leverage operating to deliver items, about realize XXXX. expect employees. growth of benefit equivalent our the approximately we and We in expect as plan XX.X% reinvest innovation of This to about XX.X%. these for initiatives, equivalent fourth business the quarter in excluding well to Inclusive in management

first quarter me guidance. XXXX to let Now shift

we year-over-year interest net impact expect quarter as digit at basis. the case expect on a be quarter. modestly a Due We on of pace typically to the mid-single count, to basis interest a is in linked lower increase day income first income net the to

a income and pace a to volumes digit single basis. quarter in processing typically linked low merchant We first expect service the due lower and sales fee seasonally lower credit on year-over-year basis, fee On lower deposit is a seasonally card charges. to increase income quarter at

range. by benefits, digit amortization in costs the in non-interest the programs, service somewhat first mid-single increases, expense a employee seasonally due This On We of be is growth seasonally credit tax higher a and reflecting year-over-year lower professional activities. merit offset to expect basis higher to incentive is typically basis, on quarter and timing employee quarter costs. linked the compensation expense marketing

on linked expense a non-interest increase We quarter expect to slightly basis.

it to remain We fourth I’ll closing compared stable for quarter. expect the remarks. credit Andy to relatively quality to hand back

Andrew Cecere

Thanks Terry.

has is positioned of of growth some this The improvement growth, metrics beginning becoming limited have and with market growth operating over national while job nimble. almost any the control, of will in footing. Bank the risk delivery We fee in crisis. to out stronger, industry profitability improving has and base reform our be the equity a Against that been our are years, businesses and lending a industry-leading safer, past and The pace cycle. XX constant environment this win U.S. re-emerged appears promote of now was and we us to predictable, within many credit and some banking discipline well has share recently tax economy arguable the well the faced, our but years headwinds deliver returns control. firm what, environments. by prolong backdrop, supportive hindsight, these through has regulatory account, in of same the the served returns By been on of more consumer more on is spending, business Today

starting reason is there However, are headwinds that to these to believe abate.

consent been OCC. than the to have costs normalized our to order addressing primarily considered expenses we First, due related with higher

activity, in growth the lifting digit Strategic to favor. compliance and starting headwind in revenue we however, is in refinance by home challenges growth and been completed pace, regulatory merchant merchant revenue third Fee trajectory to heavy decisions processing to diminishing return to towards expect continue sales our declining depressed our for will has which the processing Mortgage continue and our overall the is at to shift confident revert remain quarter. costs a and mid-single industry, strengthen. market a that we a trajectory. However, expense are headwinds XXXX;

have revenue While top previously are we line of most for make our the profitability. businesses, investments optimistic we increasingly we future, investments the is about diminishing plan in headwinds and growth are in what to the well improving as manifest that beneficial, potential in made to form as

firing is all business cylinders on payments corporate heading Our services into XXXX.

In wealth both which government For T&E time investment up-tiering and are benefiting gains are by and businesses. In in up traditional our being spend, commercial bank our share our higher the markets businesses, good market and sector, from moving first the momentum. in many client in clients tables showing growth. lead banking driven new sector corporate we the our the years, businesses, are business is services management capital

enhancing aimed strong share the On consumer the driving market over past our investments at are relationships growth. several side, years auto

leasing We to is are both results, one investment remaining well delivering to financers the non-captive It one our industry for to that benefits a positioned the few and reap dealers. those clear option the of as few years come. we lending lessors as spending of and in offer expect is the and past to intended

accelerate investment opportunity the have we spending. reform, tax of because to Now, our

To innovation BXB line spending long-term Technology and the aimed to your our our our and and excited be U.S. experience the payments, will mean makes our formal and XXXX strategy our to I that and prove That of the I I now advance initiatives on our U.S. competitive employees, revenue focus course initiatives will the and to will very customer for what Terry, concludes a a Bill on good additional Bank and and We mobile particular digital our leveraging and happy to - communities, are remarks. innovation us and customers, of capabilities. shareholders. positioning, both that enhancing be technology questions. answer we’re top entirety efficiencies. support that by at believe wrap year opportunity for core for banking, target operating improved will about up, key with growth, Bank,

Operator

Ken Usdin [Operator from instructions] Jefferies. with Your first comes question

open. Your line is

Amanda Larsen

Larsen Ken. Amanda on it’s Hi, for

Andrew Cecere

Amanda. Hi

Amanda Larsen

you Can effective to XX%? you going again? all Did go that say tax over your that be rate is

Terrance Dolan

XX%. was it Yes,

Amanda Larsen

single digits. growth of X% benefit, previously X expense mid that in the for of you digit you’re move the noted year Should and on that Then full the we to be expense range going reinvesting we’re rate great. planning expect lieu XX% discussed? had there XQXX would mid-single ’XX, of Okay, noted to you that the outlook, that guys in to approximately you an

Terrance Dolan

mid-single XXXX, looking expenses end because reinvestment and digits at the expect that the on the When plan up to Yes. that end you we of in of making, high range. that of for would full year us we be

Amanda Larsen

particularly management? treasury upon some more growth A Okay, thanks. the Then also, customer can yet. friendly, service competitors have deposit credit just moving you that charges touch your on couple Thank then you. treasury rate area ’XX, changes outlook of if you and for in management, are making earnings announced - and overdraft,

Terrance Dolan

while further about time. From thanks fee lot a you standpoint, I this so our for point to deposit and Yes, service in types making wouldn’t particular us question. a if made see structure with of fee we respect so think those a and of the at changes any back, charges, changes

service consumer deposit tied both and just and accounts. to growth of with balance deposit in growth to that We good respect terms have charges, really seen is

treasury of for year. good has growth that into continue We’ve a a of impact terms and story in relationships that year, going positive have XXXX. throughout core seen us been client treasury to will would the management we this success terms In expect real management,

would that rates be rate, deposit we adjustment would the we expect some to do dampen and earnings credit would bit. As a making rise, though, that it

Andrew Cecere

a on as as with think has Terry, because the corporate about government treasury as particular and add, XX% really two it parts payments we we - in the growth, they’re I’d payments corporate well the side. component, corporate about same combination wonderful think of year both management, had in

the we about combination product about think growing to that going thinking there’s management future, of be Our and XX%, corporate as payments. treasury with is together pay virtual

Operator

next John Your question comes Evercore from Pancari ISI. with

is open. line Your

John Pancari

Good morning.

Andrew Cecere

Morning.

John Pancari

giving confidence merchant you’re get I the indicated you that seeing back digit What processing rate you side, that you rebound? On quarter. by that’s growth mid-single Andy, that know you the can are confident in to third

Andrew Cecere

first the add this the related we’ve going about joint of greatly and past. half reason that the exit of exit impacts weather well of ask related The of in this think the principle we quarter the and weather and talked second I I’ll will quarter the is the forward, the two Terry to were as as ventures ventures but year starting joint ’XX. in diminish lap in the on,

Terrance Dolan

second and Yes, those X%, so of the pretty then end weather of to and Andy quarter, in events the impact as two first about the is quarter again said. X.X the the diminish significantly by

The other strong. our particularly business been is acquiring thing we’re volumes that in have seeing merchant sales

create some fourth good because We’re that’s overall nice was X%-plus momentum and going of generate the we acquiring lift half of digits that that ballpark, then - that saw new nice about terms believe terms the--by seeing in to business. by in started which sales XXXX. X.X%, us of our merchant is store in same the of growth we were kind We sales, second end in and that the the that of quarter, to we’re business in mid single help

John Pancari

want and could see on you growth that’s to to Thanks. your right, XXXX. still about at thinking as around and that thoughts ’XX; in get in side, real the it get GDP little on X% a look Then growth some of when fair color just commercial All that loan X growth Is so wanted some on to Okay. loans plus, estate, possibly updated to you’re front, GDP, bit assume stabilization just in we for good. line. terms what more on

Terrance Dolan

I’ll take let so to it hand and it first off then Bill. me Yes,

that in as difficult tax of in we activity pay performance. the or of of the honestly is the going you capital if going their structure to the rebalance forecast, and be upon be the It’s realign there term see structure, in a near about growth, loan near dependent term certainly growth will. quite sort capital bit impacts corporate but customers that downs little level think you to to If markets loan debt is

I or year, that we it’s reasonable estimate the impacted in or some in of think your plus as term by things think of GDP, a in expectation to see customer that be going near behavior. about range good little of is of the but that of a full terms you kind the

Bill Parker

several interest decreases on up I environment, get pick commercial more real mortgage a has more rate on we build rate Once environment. be function I’ll that seen the that’s which through last commercial this there, of able your The I question estate. the think for line, stabilization book. see quarters, to think increase we’ll

On the perhaps construction forward we expanding we’re area that been We’ve hopeful southeast back, come area. so our some in multi-family ’XX. construction on that the looking being aggressive to we’re positive the side, growth tax into should are seeing bill residential and in with that

Terrance Dolan

terms in respect the I maybe and side. John, seeing we in growth is half bodes of consumer well add with would Then and think I loan XXXX, terms and I that of last on spend loan consumer to retail that of in are with thing think that the the just reform, activity, latter momentum tax growth

John Pancari

Okay, great. you. Thank

Operator

comes Sandler O’Neill. with Siefers Your Scott next question from

Your line is open.

Scott Siefers

Morning guys.

Andrew Cecere

Scott. Morning

Scott Siefers

expense just ’XX. quick mid-single the on A growth question for digit

which--for give amount mid-single basing XXXX maybe Just I’m digit the can which clear, expectation? off off you’re the so growth you dollar

Terrance Dolan

excluding at really range, think a we the reform, and on us Yes, reinvestment to continue some end that that kind be year-over-year it above to of if to that in making. With end a the and rate of little going looking this what tax end digits. the that causes the that reform bit or I you of was we we’re X% high up mid-single tax is expected our up year, think growth improve basis, at to

Andrew Cecere

the when excluding it about of I for notable about I we’re numbers think, of base the is Terry, that, items, expense. which billion is think talking off $XX.X

Terrance Dolan

Yes, yes.

Scott Siefers

operating Okay, excluding guys expect or that that think guess clarifies at prepared digits? I leverage growth appreciate Yes, below it. would that investments. remarks you I the the mid-single Then the perfect. you somewhere in implies revenue positive it. I said

Terrance Dolan

investments. including - No investments including positive the expect we Scott, operating leverage the

Scott Siefers

All okay. clarification. I - good. right, appreciate that including Oh,

it wanted and correctly, I Just it. did so. not, appreciate it That’s me, for sure to heard I make I so

Terrance Dolan

Thank you, Scott.

Operator

comes Piper Jaffray. Your next Barker question with from Kevin

Your line is open.

Kevin Barker

bit Thanks for on wanted you’re parameters range mid-single innovation detail spending think to the a of and that? the put get rates, around taking I my digit making, you growth little some can questions. when about more just you that

Andrew Cecere

to experience, the the minimum all BXB, is about, the and is which I and banking, what as of those things well things really about $XX brand, so employees, and to we’re terms we very continuing right? on think increased time, dependent talked customer of digits, about, our X% are we’re focus we’ve But been continue growth been wage. be on things digital, our about innovate to and and base the Our you deliver we’ve going focused expansion customer talked continuing in continuing on talking mid-single our our are as experience, best as mobile drive our expenses, doing, experiencing. to will is success the that that around so Then that, the over customer Terry, or in those talking we’re

Terrance Dolan

Yes, that’s right.

Kevin Barker

then flow like will you the couple to X% for term and to return XXXX, in growth start Okay, XXXX, will next to your to the you that X do expense rate, into continue feel back years? or target through longer regards

Terrance Dolan

take Kevin, that. let me Yes maybe

revenue about it in kind second think the of a of arc, making an think then benefit two three-year third year investments about you today that that there’s start you and to year. If time incremental kind half see and the making, or investments second of the the you’re frame, and over I into

the that as horizon. the that following to those sort the that of also investments expect going well, XXXX that kind time we would incremental from be and about we get we to have benefit to on, down that going but of that’s arc, going horizon, positively, think of we do double with have when time efficiencies believe initiatives you’re see business to as think will. if you revenue is So XXXX that about you I to that see impacting XXXX, digital the come

Andrew Cecere

revenue investments simply ’XX,’XX, as said, revenue, and the we’re of from Terry, at an operating that to the ’XX importantly, this leverage a both both we’re grow looking we’re and making going that additional equation, going And sides perspective, say manage and to expense the forward. positive in you and to

Kevin Barker

for thanks my Okay, taking questions.

Terrance Dolan

Kevin. Thanks

Operator

next Your comes Bank. from question Matt with Deutsche O’Connor

open. is line Your

Ricky

actually Matt’s Hi, is team. from Ricky this

this, if without if wondering with missed bit touch year, there. the I’m and for both takes and I NIM you could but Sorry outlook a additional hikes, and on puts the

Terrance Dolan

Yes, think things given all think year, the Ricky, about going growth moving would just expect going to and a to one stronger. of income income net respect growth we the going with the into rising environment. we really be focus this fee parts, around we we’re net I so on is when guidance pretty similar giving income, little next interest being net income what growth expectations see driven our by bit to loan rate to That interest year, growth is interest

Ricky

trajectory a Wondering or up Got balance this sheet securities could the that about overall bit book there? It Is quarter. look growth, track in it, if what one ticked talk like the and looks that XXXX. going to you the like then securities follow-up. what’s a bit for thinking and maybe should

Terrance Dolan

liquidity with assets. in that portfolio really the is consistently standpoint, earning management up from Yes, end investment our track will that the and managing way we very a growth average

Ricky

Okay, thank you.

Operator

America. of Najarian Erika from comes Bank with question next Your

line Your open. is

Erika Najarian

Yes, good questions. for my Thank taking morning. you

Terrance Dolan

Hey Erika.

Andrew Cecere

Morning.

Erika Najarian

some to momentum billion. morning. does Dodd-Frank, is feedback different $XXX tier billion could the version - does if rules? It you sort SIFI has that for I’m terms threshold dollar new wondering in on U.S. just of regulatory a in and the the bipartisan pass simply question that amendments put SIFI Good a of to is that mean some of for $XXX first Senate if there seems obviously you nothing is My backdrop. Bank, share changes or threshold like

Andrew Cecere

would expectation, to is Bank. the Erika, U.S. changes My limited see that we

$XXX but a As above don’t the on capital buffer SIFI billion we have component. a reminder, we’re

capital the already We’re levels. at

the in company. processes CCAR our stress I change have to and so or place expect testing, impact limited We for

Erika Najarian

it. Got

and could shape operating embedded how XXXX? up rate for you the share guidance to curve you many of a question, in Just follow the positive for XXXX, as hikes your Ricky’s presume leverage also

Terrance Dolan

and we a or and the we’re in kind we’re of kind we to was and terms so December, in but frame, bit as I of in the time down there’s it’s where in rates probably bit be couple probably where probably pressure, recently curve steepened our There’s rate to you to established our a going up when expect then about going so movement Yes, going two we’ll I little forecast terms and well. yield hikes, know, rate yield of mid-December that thinking based year that is. flatten of hikes, plan XXXX, midyear, a it’s curve think think going be as and to then the see yield rise see upon as that curve, one during

Erika Najarian

Got it, thank you.

Andrew Cecere

Thanks Erika.

Operator

Raymond Our next James. Long question with from David comes

Your line is open.

David Long

Morning everyone.

Terrance Dolan

David. Hey

David Long

of the further on away that your tax XXXX whether get to thoughts of on road. the potential benefits, down any any happens wanted competing in or Just

Terrance Dolan

think ultimately much run dynamic of in place the all difficult we place costs in obviously this capital to that real I pretty about the think I a but have. a to going and Terry. some I bleed up Yes, there so be it’s the though, of bit expect also getting be that because competed is over tax upon the so because to at but XX cost little I going competitive the you is in the that’s will will dependent take about probably and levels and think we if how would segment talked price environment. we pretty upon customer be environment, that that product different, how been lower of competition. and industry pricing, a it that you last liquidity, of going sorts competition do reform, Obviously, terms think gets away operate time to things. competitive take like about has the ends and depending pricing, utilized, live in When you and return that service say it’s regulatory years, things the reinvestment;

some its and be for think from especially industry little to a is of result period in delayed. competitive do of time, will think of I to recapture that bit that going a terms as some that standpoint I returns, try the banking So a

David Long

the Got appreciate color. it, Thanks.

Operator

Again if keypad. you would on like star, question, to telephone ask a one your press

Klock from next KBW. Your question Brian comes with

open. is line Your

Brian Klock

Good morning everyone.

Terrance Dolan

Brian. Hi

Brian Klock

I you about for after in little was that the pay that? us recovery the probably position a tick-up malls Bill. there about while. a a a for I was downs, bit on noticed have net to talk a that of guess charge-offs think in Talking I color enclosed question, note Can book related the you being in were CRE give so I can down, that? CRE written

Bill Parker

Well, at much out so there the point recovery, eventually the this cycle, CRE Sure. the obviously on of book. pretty you in run we’re

million, On those a we to what where call malls, market malls, this couple I to quarter. do small so had I’d that’s have of think deals just we we portfolio don’t deal of enclosed saw to shift a we continue with quarter some expect online, but and had were harder enclosed of smaller with. that portfolio $XXX about that. We this the The more overall is hit that each

Brian Klock

you us accrual legal AML, you you question you legal follow-up money guys have where the stand, to had with effort All order? BSA lot of about a on thinking to remediate stand update know helpful. that, can a where an great. quarter of think settlement I that or lot you in regulatory Andy, spent that’s give that the A I and the you guess right, - related for Thanks, and or

Andrew Cecere

and a process as We will Brian. we process we’re now the as most processes the XXXX, Yes, of for integration and in the of at and the systems on and acting the that is continue the--all ’XX, hasn’t in changed, really we’ve and end as there and build, well sustainability of first to completed performing that which half ensuring phase of it put are place of be expected. people

Brian Klock

again? is back acquisitions it’s think be that able so pursue half ’XX? or you should ’XX, bank to about being could looking Is or for something this of Okay, possible maybe reasonable, we

Andrew Cecere

we the can. sure regulator, doing we as but performing dependent on that’s to as make upon know, our certainly, we’re everything end well You are

said, just through activities. that the M&A I think we’ve things, look card we going and in remind a working matter been portfolios, have to and related I consent and now would and processes I items. As it they’re the place, people it’s appropriately. of of ensuring trust all activity also on been the has continue payments, that We’ll those focused that like at not to order you AML systems

Brian Klock

time. Right. your Helpful, thanks and for

Andrew Cecere

Brian. you, Thank

Operator

further over There I no the presenters. time. turn questions to are back call at the will this

Jennifer Thompson

Please you everyone questions. to call. any follow-up us listening you for Thank our have contact if

Operator

concludes call. This today’s conference

disconnect. You may now

U.S. Bancorp (USB) 17 Jan 182017 Q4 Earnings call transcript