U S Bank

U S Bank
425 Walnut Street
Cincinnati, OH 45202

Concentration: All Other Specialization > 1 Billion
Established: 1863-07-13
FDIC Insurance: 1934-01-01
FDIC Cert: #6548
Holden By: U.S. Bancorp
# of Branches: 2979
Website: www.usbank.com
Total Assets: $473,138,169,000
Total Deposits: $364,531,324,000
Total Equity Capital: $49,034,976,000
Total Domestic Deposits: $342,652,693,000
Net Income: $3,520,631,000
Quarterly Net Income: $1,821,664,000
Return on Assets: 2%
Quarterly Return on Assets: 2% 
Return on Equity: 15% 
Quarterly Return on Equity: 15%
Charter Class: Commercial bank, national (federal) charter and Fed member, Oversee by the Office of the Comptroller of the Currency (OCC)

IN 2019

3RD Quarter

Diluted earnings per common share were $1.15 in the third quarter of 2019, compared with $1.06 in the third quarter of 2018 and $1.09 in the second quarter of 2019.

Net income increased on a linked quarter basis primarily due to an increase in total net revenue of 1.7 percent and a decrease in noninterest expense of 0.3 percent.

The increase in total net revenue reflected higher noninterest income of 5.0 percent, partially offset by lower net interest income of 0.7 percent primarily due to the adverse impact of the yield curve and lower interest recoveries, partially offset by loan growth and an additional day in the third quarter.

Noninterest income increased compared with the second quarter of 2019 driven by higher payment services revenue, mortgage banking revenue, and other noninterest income.

Noninterest expense decreased 0.3 percent on a linked quarter basis primarily driven by lower other noninterest expense, partially offset by higher personnel expense.

U S Bank: Average earning assets were $20.5 billion higher than the third quarter of 2018, reflecting increases of $11.4 billion in average total loans, $3.7 billion in average investment securities and $4.1 billion on average other earning assets.

Excluding the impact of the fourth quarter of 2018 sale of the majority of the Company’s FDIC covered loans; average total loans grew 4.7 percent compared with the third quarter of 2018.

U S Bank: Net interest income on a taxable-equivalent basis decreased $26 million on a linked quarter basis primarily driven by the impact of declining rates, flatter yield curve and lower interest recoveries, partially offset by earning assets growth and an additional day in the third quarter.

Average earning assets were $8.7 billion higher on a linked quarter basis, reflecting increases of $3.2 billion in average total loans, $1.8 billion in average investment securities and $2.5 billion on average other earning assets.

The net interest margin in the third quarter of 2019 was 3.02 percent, compared with 3.15 percent in the third quarter of 2018 and 3.13 percent in the second quarter of 2019.

U S Bank: The decrease in net interest margin on a linked quarter basis was primarily due to changes in the yield curve during the quarter and higher cash balances, in part, related to a change in policy on affiliate balances by the regulator of the Company’s Irish subsidiary.

Average investment securities in the third quarter of 2019 increased $3.7 billion over the third quarter of 2018 and $1.8 billion over the second quarter of 2019 primarily due to purchases of mortgage-backed securities, net of prepayments and maturities.

Average total loans were $11.4 billion higher than the third quarter of 2018.

U S Bank: Excluding the impact of the fourth quarter of 2018 sale of the majority of the Company’s FDIC covered loans; average total loans grew 4.7 percent over the prior-year quarter.

These increases were partially offset by decreases in total commercial real estate loans given the later stage of the business cycle and the sale of covered loans in the fourth quarter of 2018.

The average total loans were $3.2 billion higher than the second quarter of 2019 primarily driven by growth in residential mortgages and credit card loans.

Average time deposits were $4.4 billion higher than the prior-year quarter.

Average total deposits increased $4.7 billion from the second quarter of 2019.

On a linked quarter basis, average noninterest-bearing deposits increased $1.5 billion.

U S Bank: Average total savings deposits increased $7.8 billion on a linked quarter basis primarily due to increases in Wealth Management and Investment Services and Corporate and Commercial Banking.

Average time deposits, that area unit managed supported funding wants, relative evaluation and liquidity characteristics, and minimized $4.6 billion on a joined quarter basis.

Third-quarter noninterest income of $2,614 million was $196 million higher than the third quarter of 2018 driven by growth in payment services revenue, commercial products revenue, mortgage banking revenue and other noninterest income, partially offset by a decline in deposit service charges.

Payment services revenue increased $48 million due to $22 million higher credit and debit card revenue primarily driven by core business growth and processing days, as well as an increase in corporate payment products revenue of $8 million, and higher merchant processing services revenue of $18 million, both driven by higher sales volumes.

Noninterest income was $124 million higher in the third quarter of 2019 compared with the second quarter of 2019 driven by higher payment services revenue, mortgage banking revenue, and other noninterest income.

Payment services revenue increased $17 million as corporate payment products revenue grew $10 million driven by seasonally higher sales volumes and merchant processing services revenue increased $6 million primarily due to seasonally higher fee revenue.

Other noninterest income increased $27 million on a linked quarter basis primarily due to higher equity investment income.

Partially offsetting these increases was a decrease in other noninterest expense of $47 million due to lower FDIC assessment costs, driven by the elimination of the surcharge in the fourth quarter of 2018, and lower prices associated with tax-advantaged projects.

Noninterest expense decreased $9 million on a linked quarter basis.

Compensation expense increased $21 million primarily due to an additional business day in the third quarter and variable compensation related to business production.

Provision for Income Taxes The provision for income taxes for the third quarter of 2019 resulted in a tax rate of 20.4 percent on a taxable-equivalent basis, compared with 21.2 percent in the third quarter of 2018, and 20.7 percent on a taxable-equivalent basis in the second quarter of 2019.

U.S. Bancorp Third Quarter 2019 Results ALLOWANCE FOR CREDIT LOSSES Balance, beginning of period 3Q 2019 % $4,466 Net charge-offs Commercial Lease financing Total commercial mortgages Construction and development Total commercial real estate Residential mortgages Credit card Total net charge-offs Provision for credit losses Balance, end of period Components Allowance for loan losses Liability for unfunded credit commitments Total allowance for credit losses $4,441 4Q 2018 % $4,426 3Q 2018 % $4,411.

The Company’s provision for credit losses for the third quarter of 2019 was $367 million, which was $2 million higher than the prior quarter and $24 million higher than the third quarter of 2018, primarily reflecting loan growth.

U S Bank: Total net charge-offs in the third quarter of 2019 were $352 million, compared with $350 million in the second quarter of 2019, and $328 million in the third quarter of 2018.

Net charge-offs increased $2 million compared with the second quarter of 2019 primarily due to higher total commercial and total commercial real estate net charge-offs, mostly offset by lower credit card and residential mortgage net charge-offs.

Net charge-offs increased $24 million compared with the third quarter of 2018 primarily due to higher total commercial and total commercial real estate net charge-offs in addition to higher credit card net charge-offs, partially offset by lower residential mortgage net charge-offs.

The net charge-off ratio was 0.48 percent in the third quarter of 2019, compared with 0.49 percent in the second quarter of 2019 and 0.46 percent in the third quarter of 2018.

The increase in nonperforming assets on a linked quarter basis was driven by increases in nonperforming total commercial loans, partially offset by lower nonperforming residential mortgages.

The June 30, 2019, commercial loan 90 days past due delinquencies were elevated related to one customer that was resolved in the third quarter without a credit loss.

During the third quarter, the Company returned 80 percent of earnings to shareholders through dividends and share buybacks.

U.S. Bancorp Third Quarter 2019 Results Non-GAAP Financial Measures In addition to capital ratios defined by banking regulators, the Company considers various other measures when evaluating capital utilization and adequacy, including Tangible common equity to tangible assets Tangible common equity to risk-weighted assets come back on tangible common equity These capital measures are viewed by management as helpful further ways of evaluating the Company’s utilization of its capital command and therefore the level of capital offered to face up to surprising negative market or economic conditions.

Back to top button
Close