- Record net revenue of $5,699 million,
record net income of $1,815 million and record diluted earnings per
share of $1.06
- Industry leading return on average
assets of 1.58% and return on average common equity of 15.5%
U.S. Bancorp (NYSE: USB):
3Q18 Key Financial Data
PROFITABILITY
METRICS 3Q18 2Q18 3Q17 Return on average
assets (%) 1.58 1.54 1.38 Return on average
common equity (%) 15.5 15.3 13.6 Return on tangible common equity
(%) (a) 19.9 19.8 17.3 Net interest margin (%) 3.15 3.13 3.14
Efficiency ratio (%) (a) 53.5 54.8 53.9
INCOME STATEMENT (b) 3Q18
2Q18 3Q17 Net interest income (taxable-equivalent basis)
$3,281 $3,226 $3,227 Noninterest income $2,418 $2,414 $2,340 Net
income attributable to U.S. Bancorp $1,815 $1,750 $1,563 Diluted
earnings per common share $1.06 $1.02 $.88 Dividends declared per
common share $.37 $.30 $.30
BALANCE SHEET (b) 3Q18 2Q18
3Q17 Average total loans $281,065 $278,624 $277,626 Average
total deposits $330,121 $334,822 $335,151 Net charge-off ratio .46%
.48% .47% Book value per common share (period end) $27.35 $27.02
$25.98 Basel III standardized CET1 (c) 9.0% 9.1% 9.4%
(a) See Non-GAAP Financial
Measures reconciliation on pages 16-17 (b) Dollars in millions,
except per share data (c) CET1 = Common equity tier 1 capital
ratio, 3Q17 as if fully implemented
3Q18 Highlights
- Net income of $1,815 million and
diluted earnings per common share of $1.06
- Industry leading return on average
assets of 1.58% and return on average common equity of 15.5%
- Return on tangible common equity of
19.9%
- Returned 78% of 3Q earnings to
shareholders through dividends and share buybacks
- Year-over-year positive operating
leverage with net revenue increase of 2.4% and noninterest expense
increase of 1.5%
- Net interest income grew 2.4%
year-over-year (1.7% on a taxable-equivalent basis) and 1.7% linked
quarter on both a reported and tax-equivalent basis
- Total noninterest income grew 3.3%
year-over year
- Payment services revenue grew 7.1%
- Trust and investment management fees
increased 8.2%
- Nonperforming assets decreased 19.7% on
a year-over-year basis and 8.0% on a linked quarter basis
CEO Commentary
“Strong underlying momentum in each of our business lines drove
record revenue, net income and EPS this quarter. We remain vigilant
in our expense discipline while continuing to prudently invest in
our core businesses as well as in our digital and payments
capabilities. In the third quarter, we expanded our commercial
banking presence, launched a new digital platform to serve our
small business customers and acquired new capabilities in our
payments business. At the same time, our focus on optimization
allowed us to deliver positive operating leverage and a
best-in-class efficiency ratio, while growing our industry leading
return on tangible common equity ratio to 19.9%. I am thankful for
our U.S. Bank team members who work every day to put the customer
in the center with the goal of delivering outstanding results for
each of our stakeholders.”
— Andy Cecere, Chairman, President and CEO,
U.S. Bancorp
In the Spotlight
Most Powerful Women in Banking and FinanceThree of our
Vice Chairmen, Leslie Godridge, Corporate & Commercial Banking,
Gunjan Kedia, Wealth Management and Investment Services and Kate
Quinn, chief administrative officer at U.S. Bank, were honored by
American Banker magazine among the "Most Powerful Women in Banking
and Finance" for 2018.
Launch of Digital Small Business LendingU.S. Bank has
created a new, fully digital option for small businesses to apply
for and receive a loan or line of credit. The entire process, from
application to funding, can be completed same day, often within an
hour or less, dramatically improving the experience for busy
entrepreneurs.
Expansion of Commercial Banking TeamU.S. Bank has built a
strong presence in the greater New York metropolitan area over the
past 10 years, and has recently announced the expansion of its
Commercial Banking team into this market, focusing on serving
middle market clients in New York, New Jersey and Connecticut.
Meeting Customers’ Short-Term Cash NeedsU.S. Bank
recently launched a new small-dollar loan product called Simple
Loan, designed to help customers deal with unexpected or short-term
cash needs with a transparent, easy-to-understand installment loan.
U.S. Bank worked closely with its regulators when developing this
product and is the first national bank to offer this type of
short-term loan solution.
INCOME
STATEMENT HIGHLIGHTS
($ in millions, except per-share data)
Percent Change
3Q 2Q 3Q 3Q18 vs 3Q18
vs YTD YTD Percent 2018
2018 2017 2Q18
3Q17 2018 2017
Change Net interest income $3,251 $3,197 $3,176 1.7
2.4 $9,616 $9,205 4.5 Taxable-equivalent adjustment 30
29 51 3.4 (41.2 ) 88 152
(42.1 ) Net interest income (taxable-equivalent basis) 3,281
3,226 3,227 1.7 1.7 9,704 9,357 3.7 Noninterest income 2,418
2,414 2,340 .2 3.3 7,104
6,947 2.3 Total net revenue 5,699 5,640 5,567 1.0 2.4 16,808
16,304 3.1 Noninterest expense 3,044 3,085
2,998 (1.3 ) 1.5 9,184 8,891 3.3
Income before provision and income taxes 2,655 2,555 2,569 3.9 3.3
7,624 7,413 2.8 Provision for credit losses 343 327
360 4.9 (4.7 ) 1,011 1,055
(4.2 ) Income before taxes 2,312 2,228 2,209 3.8 4.7 6,613
6,358 4.0
Income taxes and
taxable-equivalent adjustment
490 470 640 4.3 (23.4 ) 1,351
1,791 (24.6 ) Net income 1,822 1,758 1,569 3.6
16.1 5,262 4,567 15.2
Net (income) loss attributable
to noncontrolling interests
(7 ) (8 ) (6 ) 12.5 (16.7 ) (22 ) (31 ) 29.0
Net income attributable to U.S. Bancorp $1,815 $1,750
$1,563 3.7 16.1 $5,240 $4,536
15.5
Net income applicable to U.S.
Bancorp common shareholders
$1,732 $1,678 $1,485 3.2 16.6
$5,007 $4,302 16.4 Diluted earnings per common
share $1.06 $1.02 $.88 3.9 20.5
$3.04 $2.55 19.2
Net income attributable to U.S. Bancorp was $1,815 million for
the third quarter of 2018, which was 16.1 percent higher than the
$1,563 million for the third quarter of 2017, and 3.7 percent
higher than the $1,750 million for the second quarter of 2018.
Diluted earnings per common share were $1.06 in the third quarter
of 2018, compared with $0.88 in the third quarter of 2017 and $1.02
in the second quarter of 2018.
The increase in net income year-over-year was largely due to
total net revenue growth of 2.4 percent partially offset by
noninterest expense growth of 1.5 percent. Net interest income
increased 2.4 percent (1.7 percent on a taxable-equivalent basis),
mainly a result of the impact of rising interest rates, earning
assets growth, and higher yields on reinvestment of securities,
partially offset by higher rates on deposits and funding mix.
Noninterest income increased 3.3 percent compared with a year ago,
driven by strong growth in payment services revenue, trust and
investment management fees, and other noninterest revenue,
partially offset by decreases in mortgage banking revenue and
commercial products revenue. Noninterest expense increased 1.5
percent primarily due to increased compensation expense related to
supporting business growth and compliance programs, merit
increases, and variable compensation related to revenue growth,
higher employee benefits expense, and higher technology and
communications expense in support of business growth. Partially
offsetting these increases was lower other noninterest expense
driven by lower costs related to tax-advantaged projects, lower
FDIC insurance expense, a reduction in mortgage servicing costs,
and lower pension related costs.
Net income increased on a linked quarter basis primarily due to
total net revenue growth of 1.0 percent and a decrease in
noninterest expense of 1.3 percent. The increase in total net
revenue reflected an increase in net interest income of 1.7 percent
due to the impact of rising interest rates, earning assets growth,
and an additional day in the third quarter, partially offset by
higher rates on deposits and funding mix. Noninterest income
increased 0.2 percent driven by seasonally higher payment services
revenue and deposit services charges, along with higher trust and
investment management fees and other noninterest income. These
increases were partially offset by decreases in commercial products
revenue and mortgage banking revenue. The decrease in noninterest
expense of 1.3 percent was primarily driven by lower other
noninterest expense due to lower costs related to tax-advantaged
projects driven by syndicating tax credits following tax reform and
the change in accruals related to legal and insurance matters, as
well as a reduction in compensation expense due to lower incentives
and seasonally lower contract labor costs.
NET
INTEREST INCOME
(Taxable-equivalent basis; $ in
millions)
Change
3Q 2Q 3Q 3Q18 vs 3Q18 vs
YTD YTD 2018 2018
2017 2Q18 3Q17
2018 2017 Change Components of
net interest income Income on earning assets $4,155 $3,980 $3,758
$175 $397 $11,957 $10,774 $1,183 Expense on interest-bearing
liabilities 874 754 531
120 343 2,253 1,417
836 Net interest income $3,281
$3,226 $3,227 $55 $54
$9,704 $9,357 $347
Average yields and rates paid Earning assets yield 3.98 %
3.86 % 3.66 % .12 % .32 % 3.86 % 3.56 % .30 % Rate paid on
interest-bearing liabilities 1.10 .97
.69 .13 .41 .96
.63 .33 Gross interest margin 2.88 %
2.89 % 2.97 % (.01 )% (.09 )%
2.90 % 2.93 % (.03 )% Net interest margin 3.15 %
3.13 % 3.14 % .02 % .01 % 3.14 %
3.09 % .05 % Average balances Investment
securities (a) $113,547 $114,578 $111,832 $(1,031 ) $1,715 $113,873
$111,325 $2,548 Loans 281,065 278,624 277,626 2,441 3,439 279,699
275,454 4,245 Earning assets 415,177 412,676 408,825 2,501 6,352
413,246 404,031 9,215 Interest-bearing liabilities 314,816 312,217
304,236 2,599 10,580 312,894 299,922 12,972 (a) Excludes
unrealized gain (loss)
Net interest income on a taxable-equivalent basis in the third
quarter of 2018 was $3,281 million, an increase of $54 million (1.7
percent) over the third quarter of 2017. The increase was
principally driven by the impact of rising interest rates, earning
assets growth, and higher yields on securities, partially offset by
lower spread due to loan mix, higher rates on deposits and funding
mix shift as well as the impact of tax reform which reduced the
taxable-equivalent adjustment benefit related to tax exempt assets
and higher interest recoveries in the prior year quarter. Average
earning assets were $6.4 billion (1.6 percent) higher than the
third quarter of 2017, reflecting increases of $3.4 billion (1.2
percent) in average total loans, $1.7 billion (1.5 percent) in
average investment securities, and $2.0 billion (13.1 percent) in
average other earning assets.
Net interest income on a taxable-equivalent basis increased $55
million (1.7 percent) on a linked quarter basis primarily driven by
the impact of higher interest rates on assets, earning asset
growth, and an additional day in the third quarter, partially
offset by deposits and funding mix shift. Average earning assets
were $2.5 billion (0.6 percent) higher on a linked quarter basis,
reflecting increases of $2.4 billion (0.9 percent) in average total
loans and $1.5 billion (9.6 percent) in average other earning
assets. Average investment securities decreased $1.0 billion (0.9
percent).
The net interest margin in the third quarter of 2018 was 3.15
percent, compared with 3.14 percent in the third quarter of 2017
and 3.13 percent in the second quarter of 2018. The increase in the
net interest margin year-over-year was primarily due to higher
interest rates, partially offset by deposit and funding mix, lower
loan spreads due to mix, and the impact of tax reform. The increase
in net interest margin on a linked quarter basis was primarily due
to the impact of higher rates on assets, partially offset by
deposit and funding mix, as well as higher cash balances.
Average investment securities in the third quarter of 2018
increased $1.7 billion (1.5 percent) from the third quarter of
2017, due to purchases of U.S. Treasury, mortgage-backed and state
and political securities, net of prepayments and maturities.
Average investment securities decreased $1.0 billion (0.9
percent) from the second quarter of 2018 as a portion of the
proceeds received on maturities of securities in the current
quarter were not reinvested.
AVERAGE
LOANS ($ in millions)
Percent
Change 3Q 2Q 3Q
3Q18 vs 3Q18 vs YTD YTD
Percent 2018 2018
2017 2Q18 3Q17
2018 2017 Change
Commercial $93,541 $92,835 $91,077 .8 2.7 $92,776 $89,817 3.3 Lease
financing 5,507 5,518 5,556 (.2 ) (.9 ) 5,519
5,530 (.2 ) Total commercial 99,048 98,353 96,633 .7 2.5 98,295
95,347 3.1 Commercial mortgages 28,362 28,710 30,114 (1.2 )
(5.8 ) 28,746 30,729 (6.5 ) Construction and development 11,180
11,147 11,507 .3 (2.8 ) 11,172 11,708 (4.6 )
Total commercial real estate 39,542 39,857 41,621 (.8 ) (5.0 )
39,918 42,437 (5.9 ) Residential mortgages 62,042 60,834
59,030 2.0 5.1 61,023 58,496 4.3 Credit card 21,774 21,220
20,926 2.6 4.1 21,428 20,801 3.0 Retail leasing 8,383 8,150
7,762 2.9 8.0 8,173 7,142 14.4 Home equity and second mortgages
16,000 16,048 16,299 (.3 ) (1.8 ) 16,080 16,270 (1.2 ) Other 31,520
31,265 32,008 .8 (1.5 ) 31,882 31,423 1.5
Total other retail 55,903 55,463 56,069 .8 (.3 )
56,135 54,835 2.4 Total loans, excluding covered
loans 278,309 275,727 274,279 .9 1.5 276,799
271,916 1.8 Covered loans 2,756 2,897 3,347
(4.9 ) (17.7 ) 2,900 3,538 (18.0 ) Total loans
$281,065 $278,624 $277,626 .9 1.2 $279,699
$275,454 1.5
Average total loans were $3.4 billion (1.2 percent) higher than
the third quarter of 2017 (1.8 percent excluding the impact of the
second quarter of 2018 student loan portfolio sale). The increase
was due to growth in residential mortgages (5.1 percent), total
commercial loans (2.5 percent), credit card loans (4.1 percent),
and retail leasing (8.0 percent). These increases were partially
offset by a decrease in total commercial real estate loans (5.0
percent) due to disciplined underwriting and customers paying down
balances over the past year. Loan growth was also impacted by
continued run-off of the covered loans portfolio (17.7 percent) and
the sale of the student loan portfolio in the second quarter of
2018. Average total loans were $2.4 billion (0.9 percent) higher
than the second quarter of 2018 driven by growth in residential
mortgages (2.0 percent), total commercial loans (0.7 percent),
credit card loans (2.6 percent) and retail leasing (2.9 percent),
partially offset by continued pay-offs of commercial real estate
loans (0.8 percent) and run-off of covered loans (4.9 percent). At
the end of the third quarter, approximately $1.3 billion of covered
loans were transferred from the loan portfolio to loans held for
sale.
AVERAGE
DEPOSITS
($
in millions)
Percent Change
3Q 2Q 3Q 3Q18 vs
3Q18 vs YTD YTD Percent
2018 2018 2017
2Q18 3Q17 2018
2017 Change Noninterest-bearing
deposits $77,192 $78,987 $81,964 (2.3 ) (5.8 ) $78,546 $81,808 (4.0
) Interest-bearing savings deposits Interest checking 69,330 69,918
68,066 (.8 ) 1.9 69,865 67,021 4.2 Money market savings 100,688
103,333 105,072 (2.6 ) (4.2 ) 102,453 106,856 (4.1 ) Savings
accounts 44,848 45,069 43,649 (.5 ) 2.7 44,770
43,265 3.5 Total savings deposits 214,866 218,320 216,787 (1.6 )
(.9 ) 217,088 217,142 -- Time deposits 38,063 37,515
36,400 1.5 4.6 37,525 32,660 14.9 Total interest-bearing
deposits 252,929 255,835 253,187 (1.1 ) (.1 ) 254,613
249,802 1.9 Total deposits $330,121 $334,822
$335,151 (1.4 ) (1.5 ) $333,159 $331,610 .5
Average total deposits for the third quarter of 2018 were $5.0
billion (1.5 percent) lower than the third quarter of 2017. Average
noninterest-bearing deposits decreased $4.8 billion (5.8 percent)
year-over-year primarily due to decreases in business deposits
within Corporate and Commercial Banking and corporate trust
balances within Wealth Management and Investment Services. Average
total savings deposits were $1.9 billion (0.9 percent) lower
year-over-year driven by decreases in Wealth Management and
Investment Services and Corporate and Commercial Banking, partially
offset by an increase in Consumer and Business Banking. Average
time deposits were $1.7 billion (4.6 percent) higher than the prior
year quarter. Changes in time deposits are largely related to those
deposits managed as an alternative to other funding sources such as
wholesale borrowing, based largely on relative pricing and
liquidity characteristics.
Average total deposits decreased $4.7 billion (1.4 percent) from
the second quarter of 2018. On a linked quarter basis, average
noninterest-bearing deposits decreased $1.8 billion (2.3 percent)
primarily due to decreases in Wealth Management and Investment
Services and Corporate and Commercial Banking, partially offset by
an increase in consumer balances within Consumer and Business
Banking. Noninterest bearing deposit declines were primarily a
result of business customers deploying deposit balances to support
business growth, the migration of balances to alternative
investment vehicles, and the change in deposit balances associated
with the timing of receipt and distribution of funds in the
corporate trust business.
Average total savings deposits decreased $3.5 billion (1.6
percent) on a linked quarter basis primarily due to decreases in
Corporate and Commercial Banking as well as Wealth Management and
Investment Services. The decline in Corporate and Commercial
Banking savings balances reflects expected run-off related to the
business merger of a large financial customer. The decline is
expected to moderate in future quarters. Average time deposits,
which are managed based on funding needs, relative pricing and
liquidity characteristics, increased $548 million (1.5 percent).
Time deposits are experiencing some growth as customers search for
higher yield.
NONINTEREST INCOME ($ in millions)
Percent Change
3Q 2Q 3Q 3Q18 vs 3Q18 vs
YTD YTD Percent
2018 2018 2017
2Q18 3Q17 2018
2017 Change Credit and debit card
revenue $344 $351 $318 (2.0 ) 8.2 $1,019 $947 7.6 Corporate payment
products revenue 169 158 150 7.0 12.7 481 427 12.6 Merchant
processing services 392 387 377 1.3 4.0 1,142 1,112 2.7 ATM
processing services 85 90 77 (5.6 ) 10.4 254 223 13.9 Trust and
investment management fees 411 401 380 2.5 8.2 1,210 1,128 7.3
Deposit service charges 198 183 187 8.2 5.9 563 538 4.6 Treasury
management fees 146 155 153 (5.8 ) (4.6 ) 451 466 (3.2 ) Commercial
products revenue 216 234 240 (7.7 ) (10.0 ) 670 730 (8.2 ) Mortgage
banking revenue 174 191 213 (8.9 ) (18.3 ) 549 632 (13.1 )
Investment products fees 47 47 42 -- 11.9 140 128 9.4 Securities
gains (losses), net 10 10 9 -- 11.1 25 47 (46.8 ) Other 226
207 194 9.2 16.5 600 569 5.4 Total noninterest
income $2,418 $2,414 $2,340 .2 3.3 $7,104
$6,947 2.3
Third quarter noninterest income of $2,418 million was $78
million (3.3 percent) higher than the third quarter of 2017 led by
strong growth in payment services revenue and trust and investment
management fees. Other noninterest income also increased
year-over-year primarily due to higher equity investment income and
tax-advantaged syndication revenue. These increases were partially
offset by lower mortgage banking revenue and commercial products
revenue, which were impacted by industry trends in these revenue
categories. Payment services revenue increased $60 million (7.1
percent) due to higher credit and debit card revenue of $26 million
(8.2 percent), an increase in corporate payment products revenue of
$19 million (12.7 percent), and higher merchant processing services
of $15 million (4.0 percent) all driven by higher sales volumes.
Trust and investment management fees increased $31 million (8.2
percent) due to business growth and favorable market conditions.
The decrease in mortgage banking revenue of $39 million (18.3
percent) was primarily due to lower mortgage production and the
adverse impact on gain on sale margins due to excess capacity in
the industry in the near term. Commercial products revenue
decreased $24 million (10.0 percent) primarily due to lower
corporate bond underwriting fees and loan syndication fees.
Noninterest income was $4 million (0.2 percent) higher in the
third quarter of 2018 compared with the second quarter of 2018
reflecting higher payment services revenue as corporate payment
products revenue grew $11 million (7.0 percent) due to seasonally
higher sales volumes and merchant processing services increased $5
million (1.3 percent) primarily due to seasonally higher fee
revenue, partially offset by a seasonal decrease of $7 million (2.0
percent) in credit and debit card revenue. Deposit service charges
increased $15 million (8.2 percent) as a result of seasonally
higher incidence rates and other noninterest income increased $19
million (9.2 percent) primarily due to higher equity investment
income and tax-advantaged syndication revenue. Partially offsetting
these increases were a decrease in commercial products revenue of
$18 million (7.7 percent) due mainly to lower corporate bond
underwriting fees and a decrease in mortgage banking revenue of $17
million (8.9 percent) driven by an unfavorable change in the
valuation of mortgage servicing rights, net of hedging
activities.
NONINTEREST EXPENSE
($ in millions)
Percent Change 3Q 2Q
3Q 3Q18 vs 3Q18 vs YTD
YTD Percent 2018
2018 2017 2Q18
3Q17 2018 2017
Change Compensation $1,529 $1,542 $1,440 (.8 ) 6.2
$4,594 $4,247 8.2 Employee benefits 294 299 268 (1.7 ) 9.7 923 843
9.5 Net occupancy and equipment 270 262 258 3.1 4.7 797 760 4.9
Professional services 96 95 104 1.1 (7.7 ) 274 305 (10.2 )
Marketing and business development 106 111 92 (4.5 ) 15.2 314 291
7.9 Technology and communications 247 242 227 2.1 8.8 724 667 8.5
Postage, printing and supplies 84 80 82 5.0 2.4 244 244 -- Other
intangibles 41 40 44 2.5 (6.8 ) 120 131 (8.4 ) Other 377 414
483 (8.9 ) (21.9 ) 1,194 1,403 (14.9 ) Total
noninterest expense $3,044 $3,085 $2,998 (1.3 ) 1.5
$9,184 $8,891 3.3
Third quarter noninterest expense of $3,044 million was $46
million (1.5 percent) higher than the third quarter of 2017
primarily due to higher personnel costs and technology investment,
partially offset by lower other noninterest expense. Compensation
expense increased $89 million (6.2 percent) principally due to the
impact of hiring to support business growth and compliance
programs, merit increases, and higher variable compensation related
to business production. Employee benefits expense increased $26
million (9.7 percent) primarily driven by increased medical costs
and staffing. Other noninterest expense decreased $106 million
(21.9 percent) due to lower costs related to tax-advantaged
projects, lower FDIC insurance expense, a reduction in mortgage
servicing costs, and lower pension related costs.
Noninterest expense decreased $41 million (1.3 percent) on a
linked quarter basis primarily due to a reduction in compensation
expense including lower incentives and a seasonal decline in
contract labor costs as well as lower other noninterest expense as
a result of lower costs related to tax-advantaged projects driven
by syndicating tax credits following tax reform and the change in
accruals related to legal and insurance matters.
Provision for Income Taxes
The provision for income taxes for the third quarter of 2018
resulted in a tax rate of 21.2 percent on a taxable-equivalent
basis (effective tax rate of 20.2 percent), compared with 29.0
percent (effective tax rate of 27.3 percent) in the third quarter
of 2017, and 21.1 percent on a taxable-equivalent basis (effective
tax rate of 20.1 percent) in the second quarter of 2018. The lower
2018 tax rates reflect the tax reform legislation enacted during
the fourth quarter of 2017.
ALLOWANCE FOR CREDIT LOSSES ($ in millions)
3Q 2Q 1Q
4Q 3Q
2018 % (b) 2018 %
(b) 2018 % (b) 2017
% (b) 2017 % (b)
Balance, beginning of period $4,411 $4,417 $4,417 $4,407 $4,377
Net charge-offs Commercial 63 .27 54 .23 56 .25 22 .09 79
.34 Lease financing 3 .22 4 .29 4 .29 6
.44 4 .29 Total commercial 66 .26 58 .24 60 .25 28 .11 83
.34 Commercial mortgages (5 ) (.07 ) -- -- (4 ) (.06 ) 18 .24 (2 )
(.03 ) Construction and development (4 ) (.14 ) -- -- 1
.04 -- -- (5 ) (.17 ) Total commercial real estate (9
) (.09 ) -- -- (3 ) (.03 ) 18 .17 (7 ) (.07 ) Residential
mortgages 4 .03 4 .03 7 .05 10 .07 7 .05 Credit card 206
3.75 210 3.97 211 4.02 205 3.83 187 3.55 Retail leasing 3
.14 3 .15 3 .15 3 .15 2 .10 Home equity and second mortgages (1 )
(.02 ) (2 ) (.05 ) (1 ) (.03 ) (2 ) (.05 ) (1 ) (.02 ) Other 59
.74 59 .76 64 .79 63 .76 59 .73
Total other retail 61 .43 60 .43 66 .47 64 .44 60 .42
Total net charge-offs,
excluding covered loans
328 .47 332 .48 341 .50 325 .47 330 .48 Covered loans -- --
-- -- -- -- -- -- -- -- Total net
charge-offs 328 .46 332 .48 341 .49 325 .46 330 .47 Provision for
credit losses 343 327 341 335 360 Other changes (a) -- (1 )
-- -- -- Balance, end of period $4,426
$4,411 $4,417 $4,417 $4,407
Components Allowance for loan losses $3,954 $3,920 $3,918 $3,925
$3,908
Liability for unfunded credit
commitments
472 491 499 492 499 Total
allowance for credit losses $4,426 $4,411 $4,417
$4,417 $4,407 Gross charge-offs $428
$437 $453 $464 $433 Gross recoveries $100 $105 $112 $139 $103
Allowance for credit losses as a percentage of Period-end
loans 1.57 1.57 1.59 1.58 1.58 Nonperforming loans 544 484 431 438
426 Nonperforming assets 441 404 367 368 352
(a) Includes net changes in credit losses
to be reimbursed by the FDIC and reductions in the allowance for
covered loans where the reversal of a previously recorded
allowance was offset by an associated decrease in the
indemnification asset, and the impact of any loan sales.
(b) Annualized and calculated on average loan balances
Credit quality was relatively stable on a linked quarter and
year-over-year basis. The Company’s provision for credit losses for
the third quarter of 2018 was $343 million, which was $16 million
(4.9 percent) higher than the prior quarter and $17 million (4.7
percent) lower than the third quarter of 2017.
Total net charge-offs in the third quarter of 2018 were $328
million, compared with $332 million in the second quarter of 2018,
and $330 million in the third quarter of 2017. Net charge-offs
decreased $4 million (1.2 percent) compared with the second quarter
of 2018 mainly due to lower total commercial real estate net
charge-offs, partially offset by higher total commercial net
charge-offs. Net charge-offs decreased $2 million (0.6 percent)
compared with the third quarter of 2017 primarily due to lower
total commercial net charge-offs and lower residential mortgage net
charge-offs mostly offset by higher credit card net charge-offs.
The net charge-off ratio was 0.46 percent in the third quarter of
2018, compared with 0.48 percent in the second quarter of 2018 and
0.47 percent in the third quarter of 2017.
The allowance for credit losses was $4,426 million at September
30, 2018, compared with $4,411 million at June 30, 2018, and $4,407
million at September 30, 2017. The ratio of the allowance for
credit losses to period-end loans was 1.57 percent at September 30,
2018, and at June 30, 2018, compared with 1.58 percent at September
30, 2017. The ratio of the allowance for credit losses to
nonperforming loans was 544 percent at September 30, 2018, compared
with 484 percent at June 30, 2018, and 426 percent at September 30,
2017.
Nonperforming assets were $1,004 million at September 30, 2018,
compared with $1,091 million at June 30, 2018, and $1,251 million
at September 30, 2017. The ratio of nonperforming assets to loans
and other real estate was 0.36 percent at September 30, 2018,
compared with 0.39 percent at June 30, 2018, and 0.45 percent at
September 30, 2017. The year-over-year decrease in nonperforming
assets was driven by improvements in nonperforming residential
mortgages, total commercial loans, and other real estate owned,
partially offset by increases in nonperforming other retail loans
and other nonperforming assets. Accruing loans 90 days or more past
due were $551 million at September 30, 2018, compared with $640
million at June 30, 2018, and $649 million at September 30,
2017.
DELINQUENT LOAN RATIOS AS A PERCENT OF ENDING LOAN
BALANCES (Percent)
Sep 30 Jun 30
Mar 31 Dec 31 Sep 30
2018 2018 2018
2017 2017 Delinquent loan ratios
- 90 days or more past due
excluding nonperforming loans
Commercial .06 .06 .06 .06 .05 Commercial real estate .01 .01 .01
.01 .01 Residential mortgages .19 .18 .22 .22 .18 Credit card 1.18
1.15 1.29 1.28 1.20 Other retail .17 .16 .18 .17 .15 Total loans,
excluding covered loans .19 .19 .21 .21 .18 Covered loans (a) .86
4.46 4.57 4.74 4.66 Total loans .20 .23 .25 .26 .23
Delinquent loan ratios - 90 days or more past due
including
nonperforming loans Commercial .28 .28 .37 .31 .33 Commercial real
estate .27 .27 .31 .37 .30 Residential mortgages .69 .84 .93 .96
.98 Credit card 1.18 1.15 1.29 1.28 1.20 Other retail .49 .48 .48
.46 .43 Total loans, excluding covered loans .48 .51 .58 .57 .55
Covered loans (a) .86 4.68 4.77 4.93 4.84 Total loans .48 .55 .62
.62 .60 (a) Effective September 30, 2018, the Company
transferred $1.3 billion of covered loans to loans held for sale.
Included in the amount transferred were
$108 million of loans 90 days or more past due and $6 million
that were nonperforming.
ASSET QUALITY (a) ($ in millions)
Sep 30 Jun 30
Mar 31 Dec 31 Sep 30 2018
2018 2018 2017
2017 Nonperforming loans Commercial $193 $199 $274 $225 $231
Lease financing 23 25 27 24 38 Total
commercial 216 224 301 249 269 Commercial mortgages 77 72 86
108 89 Construction and development 28 32 33
34 33 Total commercial real estate 105 104 119 142 122
Residential mortgages 317 400 430 442 474 Credit card -- --
-- 1 1 Other retail 175 178 168 168 163
Total nonperforming loans, excluding covered loans 813 906 1,018
1,002 1,029 Covered loans -- 6 6 6
6 Total nonperforming loans 813 912 1,024 1,008 1,035
Other real estate 100 108 124 141 164 Covered other real estate 19
20 20 21 26 Other nonperforming assets 72 51 36
30 26 Total nonperforming assets $1,004 $1,091
$1,204 $1,200 $1,251 Accruing loans 90
days or more past due $551 $640 $702 $720
$649
Performing restructured loans, excluding
GNMA and covered loans
$2,262 $2,164 $2,190 $2,306 $2,419
Performing restructured GNMA and covered loans $1,678 $1,695
$1,598 $1,713 $1,600 Nonperforming
assets to loans plus ORE (%) .36 .39 .43 .43 .45 (a)
Throughout this document, nonperforming assets and related ratios
do not include accruing loans 90 days or more past due
COMMON SHARES (Millions)
3Q 2Q 1Q 4Q
3Q 2018 2018
2018 2017 2017 Beginning
shares outstanding 1,636 1,649 1,656 1,667 1,679
Shares issued for stock incentive
plans, acquisitions and other corporate purposes
1 -- 4 1 -- Shares repurchased (14 ) (13 ) (11 )
(12 ) (12 ) Ending shares outstanding 1,623
1,636 1,649 1,656
1,667
CAPITAL POSITION ($ in millions)
Sep
30 Jun 30 Mar 31 Dec
31 Sep 30 2018
2018 2018 2017
2017 Total U.S. Bancorp
shareholders' equity $50,375 $49,628 $49,187 $49,040 $48,723
Basel III Standardized Approach (a) Common equity tier 1
capital $34,097 $34,161 $33,539 $34,369 $34,876 Tier 1 capital
40,114 39,611 38,991 39,806 40,411 Total risk-based capital 47,531
47,258 46,640 47,503 48,104 Fully implemented common equity
tier 1 capital ratio (a) 9.0 % 9.1 % 9.0 % 9.1 % (b) 9.4 % (b) Tier
1 capital ratio 10.6 10.5 10.4 10.8 11.1 Total risk-based capital
ratio 12.6 12.6 12.5 12.9 13.2 Leverage ratio 9.0 8.9 8.8 8.9 9.1
Basel III Advanced Approaches (a) Fully implemented
common equity tier 1 capital ratio (a) 11.8 11.6 11.5 11.6 (b) 11.8
(b)
Tangible common equity to tangible assets (b) 7.7
7.8 7.7 7.6 7.7
Tangible common equity to risk-weighted assets
(b) 9.3 9.3 9.3 9.4 9.5
Common equity tier 1 capital ratio
calculated under the transitional standardized approach
(a)
-- -- -- 9.3 9.6
Common equity tier 1 capital ratio
calculated under the transitional advanced approaches (a)
-- -- -- 12.0 12.1
(a) Beginning January 1, 2018, the
regulatory capital requirements fully reflect implementation of
Basel III. Prior to 2018, the Company's capital ratios reflected
certain transitional adjustments. Basel III includes two
comprehensive methodologies for calculating risk-weighted assets: a
general standardized approach and more risk-sensitive
advanced approaches, with the Company's capital adequacy being
evaluated against the methodology that is most restrictive.
(b) See Non-GAAP Financial Measures reconciliation on page 16
Total U.S. Bancorp shareholders’ equity was $50.4 billion at
September 30, 2018, compared with $49.6 billion at June 30, 2018,
and $48.7 billion at September 30, 2017. During the third quarter,
the Company returned 78 percent of earnings to shareholders through
dividends and share buybacks.
All regulatory ratios continue to be in excess of
“well-capitalized” requirements. The common equity tier 1 capital
to risk-weighted assets ratio using the Basel III standardized
approach was 9.0 percent at September 30, 2018, compared with 9.1
percent at June 30, 2018, and 9.6 percent at September 30, 2017.
The common equity tier 1 capital to risk-weighted assets ratio
using the Basel III advanced approaches method was 11.8 percent at
September 30, 2018, compared with 11.6 percent at June 30, 2018,
and 12.1 percent at September 30, 2017.
Investor Conference Call
On Wednesday, October 17, 2018, at 8:00 a.m. CDT, Andy Cecere,
chairman, president and chief executive officer, and Terry Dolan,
vice chairman and chief financial officer, will host a conference
call to review the financial results. The conference call will be
available online or by telephone. To access the webcast and
presentation, visit U.S. Bancorp’s website at usbank.com and click
on “About US”, “Investor Relations” and “Webcasts &
Presentations.” To access the conference call from locations within
the United States and Canada, please dial 866-316-1409.
Participants calling from outside the United States and Canada,
please dial 706-634-9086. The conference ID number for all
participants is 7338239. For those unable to participate during the
live call, a recording will be available at approximately 11:00
a.m. CDT on Wednesday, October 17 and will be accessible until
Wednesday, October 24 at 11:00 p.m. CDT. To access the recorded
message within the United States and Canada, please dial
855-859-2056. If calling from outside the United States and Canada,
please dial 404-537-3406 to access the recording. The conference ID
is 7338239.
About U.S. Bancorp
U.S. Bancorp, with 74,000 employees and $465 billion in assets
as of September 30, 2018, is the parent company of U.S. Bank, the
fifth-largest commercial bank in the United States. The
Minneapolis-based bank blends its relationship teams, branches and
ATM network with mobile and online tools that allow customers to
bank how, when and where they prefer. U.S. Bank is committed to
serving its millions of retail, business, wealth management,
payment, commercial and corporate, and investment services
customers across the country and around the world as a trusted
financial partner, a commitment recognized by the Ethisphere
Institute naming the bank a 2018 World’s Most Ethical Company.
Visit U.S. Bank at www.usbank.com or follow on social media to stay
up to date with company news.
Forward-looking Statements
The following information appears in accordance with the Private
Securities Litigation Reform Act of 1995:
This press release 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 hereof. 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. Deterioration in general business and economic
conditions or turbulence in domestic or global financial markets
could adversely affect U.S. Bancorp’s revenues and the values of
its assets and liabilities, reduce the availability of funding to
certain financial institutions, lead to a tightening of credit, and
increase stock price volatility. Stress in the commercial real
estate markets, as well as a downturn in the residential real
estate markets, could cause credit losses and deterioration in
asset values. In addition, changes to statutes, regulations, or
regulatory policies or practices could affect U.S. Bancorp in
substantial and unpredictable ways. U.S. Bancorp’s results could
also be adversely affected by 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 its investment securities; legal and regulatory
developments; litigation; increased competition from both banks and
non-banks; changes in customer behavior and preferences; breaches
in data security; effects of mergers and acquisitions and related
integration; effects of critical accounting policies and judgments;
and management’s ability to effectively manage credit risk, market
risk, operational risk, compliance risk, strategic risk, interest
rate risk, liquidity risk and reputational 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, 2017, on file
with the Securities and Exchange Commission, including the sections
entitled “Corporate Risk Profile” and “Risk Factors” 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. However, factors other than these
also could adversely affect U.S. Bancorp’s results, and the reader
should not consider these factors to be a complete set of all
potential risks or uncertainties. Forward-looking statements speak
only as of the date hereof, and U.S. Bancorp undertakes no
obligation to update them in light of new information or future
events.
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
- Return on tangible common equity
These capital measures are viewed by management as useful
additional methods of evaluating the Company’s utilization of its
capital held and the level of capital available to withstand
unexpected negative market or economic conditions. Additionally,
presentation of these measures allows investors, analysts and
banking regulators to assess the Company’s capital position
relative to other financial services companies. These capital
measures are not defined in generally accepted accounting
principles (“GAAP”), or are not defined in banking regulations. As
a result, these capital measures disclosed by the Company may be
considered non-GAAP financial measures. In addition, certain
capital measures related to prior periods are presented on the same
basis as those capital measures in the current period. The
effective capital ratios defined by banking regulations for these
periods were subject to certain transitional provisions. Management
believes this information helps investors assess trends in the
Company’s capital adequacy.
The Company also discloses net interest income and related
ratios and analysis on a taxable-equivalent basis, which may also
be considered non-GAAP financial measures. The Company believes
this presentation to be the preferred industry measurement of net
interest income as it provides a relevant comparison of net
interest income arising from taxable and tax-exempt sources. In
addition, certain performance measures, including the efficiency
ratio and net interest margin utilize net interest income on a
taxable-equivalent basis.
There may be limits in the usefulness of these measures to
investors. As a result, the Company encourages readers to consider
the consolidated financial statements and other financial
information contained in this press release in their entirety, and
not to rely on any single financial measure. A table follows that
shows the Company’s calculation of these non-GAAP financial
measures.
CONSOLIDATED STATEMENT OF INCOME (Dollars and Shares
in Millions, Except Per Share Data)
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
(Unaudited) 2018 2017 2018 2017
Interest Income Loans $3,353 $3,049
$9,645 $8,728 Loans held for sale 36 40 108 104 Investment
securities 661 568 1,927 1,653 Other interest income 73
47 182 131 Total interest
income 4,123 3,704 11,862 10,616
Interest Expense Deposits
491 293 1,263 730 Short-term borrowings 104 39 265 96 Long-term
debt 277 196 718 585
Total interest expense 872 528
2,246 1,411 Net interest income 3,251 3,176
9,616 9,205 Provision for credit losses 343 360
1,011 1,055 Net interest income
after provision for credit losses 2,908 2,816 8,605 8,150
Noninterest Income Credit and debit card revenue 344 318
1,019 947 Corporate payment products revenue 169 150 481 427
Merchant processing services 392 377 1,142 1,112 ATM processing
services 85 77 254 223 Trust and investment management fees 411 380
1,210 1,128 Deposit service charges 198 187 563 538 Treasury
management fees 146 153 451 466 Commercial products revenue 216 240
670 730 Mortgage banking revenue 174 213 549 632 Investment
products fees 47 42 140 128 Securities gains (losses), net 10 9 25
47 Other 226 194 600 569
Total noninterest income 2,418 2,340 7,104 6,947
Noninterest Expense Compensation 1,529 1,440 4,594 4,247
Employee benefits 294 268 923 843 Net occupancy and equipment 270
258 797 760 Professional services 96 104 274 305 Marketing and
business development 106 92 314 291 Technology and communications
247 227 724 667 Postage, printing and supplies 84 82 244 244 Other
intangibles 41 44 120 131 Other 377 483
1,194 1,403 Total noninterest expense 3,044
2,998 9,184 8,891
Income before income taxes 2,282 2,158 6,525 6,206 Applicable
income taxes 460 589 1,263
1,639 Net income 1,822 1,569 5,262 4,567 Net (income)
loss attributable to noncontrolling interests (7 ) (6 )
(22 ) (31 ) Net income attributable to U.S. Bancorp
$1,815 $1,563 $5,240
$4,536 Net income applicable to U.S. Bancorp common
shareholders $1,732 $1,485 $5,007
$4,302 Earnings per common share $1.06
$.89 $3.05 $2.56 Diluted earnings per common share $1.06 $.88 $3.04
$2.55 Dividends declared per common share $.37 $.30 $.97 $.86
Average common shares outstanding 1,629 1,672 1,641 1,683 Average
diluted common shares outstanding 1,633 1,678
1,645 1,689
CONSOLIDATED ENDING BALANCE SHEET
(Dollars in Millions) September 30, December 31, September 30,
2018 2017 2017
Assets (Unaudited)
(Unaudited) Cash and due from banks $20,082 $19,505 $20,540
Investment securities Held-to-maturity 46,046 44,362 44,018
Available-for-sale 64,912 68,137 67,772 Loans held for sale 4,533
3,554 3,757 Loans Commercial 99,273 97,561 96,928 Commercial real
estate 39,966 40,463 41,430 Residential mortgages 62,904 59,783
59,317 Credit card 21,869 22,180 20,923 Other retail 56,049
57,324 56,859 Total loans, excluding
covered loans 280,061 277,311 275,457 Covered loans 1,400
3,121 3,262 Total loans 281,461 280,432
278,719 Less allowance for loan losses (3,954 ) (3,925 )
(3,908 ) Net loans 277,507 276,507 274,811 Premises and
equipment 2,438 2,432 2,402 Goodwill 9,530 9,434 9,370 Other
intangible assets 3,544 3,228 3,193 Other assets 36,015
34,881 33,364 Total assets $464,607
$462,040 $459,227
Liabilities and Shareholders' Equity Deposits
Noninterest-bearing $77,146 $87,557 $82,152 Interest-bearing
254,032 259,658 260,437 Total
deposits 331,178 347,215 342,589 Short-term borrowings 23,868
16,651 15,856 Long-term debt 40,894 32,259 34,515 Other liabilities
17,660 16,249 16,916 Total
liabilities 413,600 412,374 409,876 Shareholders' equity Preferred
stock 5,984 5,419 5,419 Common stock 21 21 21 Capital surplus 8,479
8,464 8,457 Retained earnings 57,878 54,142 53,023 Less treasury
stock (19,414 ) (17,602 ) (16,978 ) Accumulated other comprehensive
income (loss) (2,573 ) (1,404 ) (1,219 ) Total U.S.
Bancorp shareholders' equity 50,375 49,040 48,723 Noncontrolling
interests 632 626 628 Total
equity 51,007 49,666 49,351
Total liabilities and equity $464,607 $462,040
$459,227
NON-GAAP FINANCIAL MEASURES
(Dollars in Millions, Unaudited)
September 30,2018
June 30,2018
March 31,2018
December 31,2017
September 30,2017
Total equity $51,007 $50,257 $49,812 $49,666 $49,351
Preferred stock (5,984 ) (5,419 ) (5,419 )
(5,419
)
(5,419 ) Noncontrolling interests (632 ) (629 ) (625 ) (626 ) (628
) Goodwill (net of deferred tax liability) (1) (8,682 ) (8,585 )
(8,609 ) (8,613 ) (8,141 ) Intangible assets, other than mortgage
servicing rights (627 ) (571 ) (608 ) (583 )
(595 ) Tangible common equity (a) 35,082 35,053 34,551
34,425 34,568 Total assets 464,607 461,329 460,119 462,040
459,227 Goodwill (net of deferred tax liability) (1) (8,682 )
(8,585 ) (8,609 ) (8,613 ) (8,141 ) Intangible assets, other than
mortgage servicing rights (627 ) (571 ) (608 )
(583 ) (595 ) Tangible assets (b) 455,298 452,173 450,902
452,844 450,491
Risk-weighted assets, determined in
accordance with the Basel III standardized approach (c)
377,713
*
375,466 373,141 367,771 363,957 Tangible common equity (as
calculated above) 34,425 34,568 Adjustments (2) (550 ) (52 )
Common equity tier 1 capital estimated for
the Basel III fully implemented standardized and advanced
approaches (d)
33,875 34,516
Risk-weighted assets, determined in
accordance with prescribed transitional standardized approach
regulatory requirements
367,771 363,957 Adjustments (3) 4,473 3,907
Risk-weighted assets estimated for the
Basel III fully implemented standardized approach (e)
372,244 367,864
Risk-weighted assets, determined in
accordance with prescribed transitional advanced approaches
regulatory requirements
287,211 287,800 Adjustments (4) 4,769 4,164
Risk-weighted assets estimated for the
Basel III fully implemented advanced approaches (f)
291,980 291,964
Ratios * Tangible common equity to
tangible assets (a)/(b) 7.7 % 7.8 % 7.7 % 7.6 % 7.7 % Tangible
common equity to risk-weighted assets (a)/(c) 9.3
9.3
9.3 9.4 9.5
Common equity tier 1 capital to
risk-weighted assets estimated for the Basel III fully
implemented standardized approach (d)/(e)
9.1 9.4
Common equity tier 1 capital to
risk-weighted assets estimated for the Basel III fully implemented
advanced approaches (d)/(f)
11.6 11.8 Three Months Ended September 30, June 30,
March 31, December 31, September 30, 2018 2018
2018 2017 2017 Net income
applicable to U.S. Bancorp common shareholders $1,732 $1,678 $1,597
$1,611 $1,485 Intangibles amortization (net-of-tax) 32
32 31 28 29
Net income applicable to U.S. Bancorp
common shareholders, excluding intangibles amortization
1,764 1,710 1,628 1,639 1,514
Annualized net income applicable to U.S.
Bancorp common shareholders, excluding intangibles
amortization (g)
6,998
6,859 6,602 6,503 6,007 Average total equity 50,768 49,950
49,450 49,461 49,447 Less: Average preferred stock 5,714 5,419
5,419 5,419 5,419 Less: Average noncontrolling interests 630 628
625 627 628 Less: Average goodwill (net of deferred tax liability)
(1) 8,620 8,602 8,627 8,154 8,153 Less: Average intangible assets,
other than mortgage servicing rights 584 588
603 591 615
Average U.S. Bancorp common shareholders'
equity, excluding intangible assets (h)
35,220 34,713 34,176 34,670 34,632 Return on tangible common
equity (g)/(h) 19.9 % 19.8 % 19.3 %
18.8 % 17.3 % *Preliminary data. Subject to change
prior to filings with applicable regulatory agencies. (1) Includes
goodwill related to certain investments in unconsolidated financial
institutions per prescribed regulatory requirements. (2) Includes
net losses on cash flow hedges included in accumulated other
comprehensive income (loss) and other adjustments. (3) Includes
higher risk-weighting for unfunded loan commitments, investment
securities, residential mortgages, mortgage servicing rights and
other adjustments. (4) Primarily reflects higher risk-weighting for
mortgage servicing rights.
NON-GAAP FINANCIAL MEASURES Three
Months Ended Nine Months Ended
(Dollars in Millions, Unaudited)
September 30,2018
June 30,2018
March 31,2018
December 31,2017
September 30,2017
September 30,2018
September 30,2017
Net interest
income $3,251 $3,197 $3,168 $3,175 $3,176 $9,616 $9,205
Taxable-equivalent adjustment (1) 30 29
29 53 51 88
152 Net interest income, on a
taxable-equivalent basis 3,281 3,226 3,197 3,228 3,227 9,704 9,357
Net interest income, on a taxable-equivalent basis (as
calculated above) 3,281 3,226 3,197 3,228 3,227 9,704 9,357
Noninterest income 2,418 2,414 2,272 2,370 2,340 7,104 6,947 Less:
Securities gains (losses), net 10 10 5
10 9 25
47 Total net revenue, excluding net securities
gains (losses) (a) 5,689 5,630 5,464 5,588 5,558 16,783 16,257
Noninterest expense (b) 3,044 3,085 3,055 3,899 2,998 9,184
8,891 Less: Intangible amortization 41 40
39 44 44
120 131 Noninterest expense, excluding
intangible amortization (c) 3,003 3,045 3,016 3,855 2,954 9,064
8,760 Efficiency ratio (b)/(a) 53.5 % 54.8 % 55.9 % 69.8 %
53.9 % 54.7 % 54.7 % Tangible efficiency ratio (c)/(a) 52.8
54.1 55.2 69.0
53.1 54.0 53.9
(1) Interest and rates are presented
on a fully taxable-equivalent basis based on a federal income tax
rate of 21 percent for 2018 and 35 percent for 2017.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181017005087/en/
U.S. BancorpInvestor contact:Jennifer Thompson,
612-303-0778orMedia contact:Stacey Wempen, 612-303-7620
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