QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Title of each class |
Trading symbol |
Name of each exchange on which registered | ||
|
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Non-Cumulative Perpetual Preferred Stock, par value $1.00) |
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Non-Cumulative Perpetual Preferred Stock, par value $1.00) |
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Non-Cumulative Perpetual Preferred Stock, par value $1.00) |
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Non-Cumulative Perpetual Preferred Stock, par value $1.00) |
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Non-Cumulative Perpetual Preferred Stock, par value $1.00) |
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0.850% |
Accelerated filer ☐ | ||
Non-accelerated filer ☐ |
Smaller reporting company Emerging growth company |
Class | Outstanding as of October 31, 2019 | |
Common Stock, $0.01 Par Value |
Part I — Financial Information |
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31 |
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2 2 |
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32 |
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Part II — Other Information |
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74 |
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76 |
U.S. Bancorp |
1 |
Table 1 |
Selected Financial Data |
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||||||||||
(Dollars and Shares in Millions, Except Per Share Data) | 2019 | 2018 | Percent Change |
2019 | 2018 | Percent Change |
||||||||||||||||||
Condensed Income Statement |
||||||||||||||||||||||||
Net interest income |
$ | 3,281 | $ | 3,251 | .9 | % | $ | 9,845 | $ | 9,616 | 2.4 | % | ||||||||||||
Taxable-equivalent adjustment (a) |
25 | 30 | (16.7 | ) | 79 | 88 | (10.2 | ) | ||||||||||||||||
Net interest income (taxable-equivalent basis) (b) |
3,306 | 3,281 | .8 | 9,924 | 9,704 | 2.3 | ||||||||||||||||||
Noninterest income |
2,589 | 2,408 | 7.5 | 7,348 | 7,079 | 3.8 | ||||||||||||||||||
Securities gains (losses), net |
25 | 10 | * | 47 | 25 | 88.0 | ||||||||||||||||||
Total net revenue |
5,920 | 5,699 | 3.9 | 17,319 | 16,808 | 3.0 | ||||||||||||||||||
Noninterest expense |
3,144 | 3,044 | 3.3 | 9,384 | 9,184 | 2.2 | ||||||||||||||||||
Provision for credit losses |
367 | 343 | 7.0 | 1,109 | 1,011 | 9.7 | ||||||||||||||||||
Income before taxes |
2,409 | 2,312 | 4.2 | 6,826 | 6,613 | 3.2 | ||||||||||||||||||
Income taxes and taxable-equivalent adjustment |
492 | 490 | .4 | 1,373 | 1,351 | 1.6 | ||||||||||||||||||
Net income |
1,917 | 1,822 | 5.2 | 5,453 | 5,262 | 3.6 | ||||||||||||||||||
Net (income) loss attributable to noncontrolling interests |
(9 | ) | (7 | ) | (28.6 | ) | (25 | ) | (22 | ) | (13.6 | ) | ||||||||||||
Net income attributable to U.S. Bancorp |
$ | 1,908 | $ | 1,815 | 5.1 | $ | 5,428 | $ | 5,240 | 3.6 | ||||||||||||||
Net income applicable to U.S. Bancorp common shareholders |
$ | 1,821 | $ | 1,732 | 5.1 | $ | 5,175 | $ | 5,007 | 3.4 | ||||||||||||||
Per Common Share |
||||||||||||||||||||||||
Earnings per share |
$ | 1.16 | $ | 1.06 | 9.4 | % | $ | 3.26 | $ | 3.05 | 6.9 | % | ||||||||||||
Diluted earnings per share |
1.15 | 1.06 | 8.5 | 3.25 | 3.04 | 6.9 | ||||||||||||||||||
Dividends declared per share |
.42 | .37 | 13.5 | 1.16 | .97 | 19.6 | ||||||||||||||||||
Book value per share (c) |
30.26 | 27.35 | 10.6 | |||||||||||||||||||||
Market value per share |
55.34 | 52.81 | 4.8 | |||||||||||||||||||||
Average common shares outstanding |
1,575 | 1,629 | (3.3 | ) | 1,589 | 1,641 | (3.2 | ) | ||||||||||||||||
Average diluted common shares outstanding |
1,578 | 1,633 | (3.4 | ) | 1,592 | 1,645 | (3.2 | ) | ||||||||||||||||
Financial Ratios |
||||||||||||||||||||||||
Return on average assets |
1.57 | % | 1.58 | % | 1.54 | % | 1.54 | % | ||||||||||||||||
Return on average common equity |
15.3 | 15.5 | 14.9 | 15.2 | ||||||||||||||||||||
Net interest margin (taxable-equivalent basis) (a) |
3.02 | 3.15 | 3.10 | 3.14 | ||||||||||||||||||||
Efficiency ratio (b) |
53.3 | 53.5 | 54.3 | 54.7 | ||||||||||||||||||||
Net charge-offs as a percent of average loans outstanding |
.48 | .46 | .49 | .48 | ||||||||||||||||||||
Average Balances |
||||||||||||||||||||||||
Loans |
$ | 292,436 | $ | 281,065 | 4.0 | % | $ | 289,278 | $ | 279,699 | 3.4 | % | ||||||||||||
Loans held for sale |
4,476 | 3,109 | 44.0 | 3,265 | 3,262 | .1 | ||||||||||||||||||
Investment securities (d) |
117,213 | 113,547 | 3.2 | 115,628 | 113,873 | 1.5 | ||||||||||||||||||
Earning assets |
435,673 | 415,177 | 4.9 | 427,426 | 413,246 | 3.4 | ||||||||||||||||||
Assets |
481,454 | 456,916 | 5.4 | 472,216 | 455,241 | 3.7 | ||||||||||||||||||
Noninterest-bearing deposits |
74,594 | 77,192 | (3.4 | ) | 73,711 | 78,546 | (6.2 | ) | ||||||||||||||||
Deposits |
349,933 | 330,121 | 6.0 | 343,563 | 333,159 | 3.1 | ||||||||||||||||||
Short-term borrowings |
18,597 | 22,186 | (16.2 | ) | 18,046 | 21,881 | (17.5 | ) | ||||||||||||||||
Long-term debt |
42,691 | 39,701 | 7.5 | 41,664 | 36,400 | 14.5 | ||||||||||||||||||
Total U.S. Bancorp shareholders’ equity |
53,292 | 50,138 | 6.3 | 52,446 | 49,433 | 6.1 | ||||||||||||||||||
September 30, 2019 |
December 31, 2018 |
|||||||||||||||||||||||
Period End Balances |
||||||||||||||||||||||||
Loans |
$ | 294,638 | $ | 286,810 | 2.7 | % | ||||||||||||||||||
Investment securities |
121,079 | 112,165 | 7.9 | |||||||||||||||||||||
Assets |
487,671 | 467,374 | 4.3 | |||||||||||||||||||||
Deposits |
359,715 | 345,475 | 4.1 | |||||||||||||||||||||
Long-term debt |
41,274 | 41,340 | (.2 | ) | ||||||||||||||||||||
Total U.S. Bancorp shareholders’ equity |
53,517 | 51,029 | 4.9 | |||||||||||||||||||||
Asset Quality |
||||||||||||||||||||||||
Nonperforming assets |
$ | 979 | $ | 989 | (1.0 | )% | ||||||||||||||||||
Allowance for credit losses |
4,481 | 4,441 | .9 | |||||||||||||||||||||
Allowance for credit losses as a percentage of period-end loans |
1.52 | % | 1.55 | % | ||||||||||||||||||||
Capital Ratios |
||||||||||||||||||||||||
Basel III standardized approach: |
||||||||||||||||||||||||
Common equity tier 1 capital |
9.6 | % | 9.1 | % | ||||||||||||||||||||
Tier 1 capital |
11.2 | 10.7 | ||||||||||||||||||||||
Total risk-based capital |
13.2 | 12.6 | ||||||||||||||||||||||
Leverage |
9.3 | 9.0 | ||||||||||||||||||||||
Common equity tier 1 capital to risk-weighted assets for the Basel III advanced approaches |
12.6 | 11.8 | ||||||||||||||||||||||
Tangible common equity to tangible assets (b) |
8.0 | 7.8 | ||||||||||||||||||||||
Tangible common equity to risk-weighted assets (b) |
9.7 | 9.4 |
* |
Not meaningful |
(a) |
Based on a federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes. |
(b) |
See Non-GAAP Financial Measures beginning on page 30. |
(c) |
Calculated as U.S. Bancorp common shareholders’ equity divided by common shares outstanding at end of the period. |
(d) |
Excludes unrealized gains and losses on available-for-sale available-for-sale held-to-maturity. |
2 |
U.S. Bancorp |
U.S. Bancorp | 3 |
Table 2 |
Noninterest Income |
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||||||||||
(Dollars in Millions) | 2019 | 2018 | Percent Change |
2019 | 2018 | Percent Change |
||||||||||||||||||
Credit and debit card revenue |
$ | 366 | $ | 344 | 6.4 | % | $ | 1,035 | $ | 1,019 | 1.6 | % | ||||||||||||
Corporate payment products revenue |
177 | 169 | 4.7 | 506 | 481 | 5.2 | ||||||||||||||||||
Merchant processing services |
410 | 392 | 4.6 | 1,192 | 1,142 | 4.4 | ||||||||||||||||||
Trust and investment management fees |
421 | 411 | 2.4 | 1,235 | 1,210 | 2.1 | ||||||||||||||||||
Deposit service charges |
234 | 283 | (17.3 | ) | 678 | 817 | (17.0 | ) | ||||||||||||||||
Treasury management fees |
139 | 146 | (4.8 | ) | 438 | 451 | (2.9 | ) | ||||||||||||||||
Commercial products revenue |
240 | 216 | 11.1 | 708 | 670 | 5.7 | ||||||||||||||||||
Mortgage banking revenue |
272 | 174 | 56.3 | 630 | 549 | 14.8 | ||||||||||||||||||
Investment products fees |
46 | 47 | (2.1 | ) | 138 | 140 | (1.4 | ) | ||||||||||||||||
Securities gains (losses), net |
25 | 10 | * | 47 | 25 | 88.0 | ||||||||||||||||||
Other |
284 | 226 | 25.7 | 788 | 600 | 31.3 | ||||||||||||||||||
Total noninterest income |
$ | 2,614 | $ | 2,418 | 8.1 | % | $ | 7,395 | $ | 7,104 | 4.1 | % |
* |
Not meaningful |
4 |
U.S. Bancorp |
Table 3 |
Noninterest Expense |
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||||||||||
(Dollars in Millions) | 2019 | 2018 | Percent Change |
2019 | 2018 | Percent Change |
||||||||||||||||||
Compensation |
$ | 1,595 | $ | 1,529 | 4.3 | % | $ | 4,728 | $ | 4,594 | 2.9 | % | ||||||||||||
Employee benefits |
324 | 294 | 10.2 | 971 | 923 | 5.2 | ||||||||||||||||||
Net occupancy and equipment |
279 | 270 | 3.3 | 837 | 797 | 5.0 | ||||||||||||||||||
Professional services |
114 | 96 | 18.8 | 315 | 274 | 15.0 | ||||||||||||||||||
Marketing and business development |
109 | 106 | 2.8 | 309 | 314 | (1.6 | ) | |||||||||||||||||
Technology and communications |
277 | 247 | 12.1 | 804 | 724 | 11.0 | ||||||||||||||||||
Postage, printing and supplies |
74 | 84 | (11.9 | ) | 219 | 244 | (10.2 | ) | ||||||||||||||||
Other intangibles |
42 | 41 | 2.4 | 124 | 120 | 3.3 | ||||||||||||||||||
Other |
330 | 377 | (12.5 | ) | 1,077 | 1,194 | (9.8 | ) | ||||||||||||||||
Total noninterest expense |
$ | 3,144 | $ | 3,044 | 3.3 | % | $ | 9,384 | $ | 9,184 | 2.2 | % | ||||||||||||
Efficiency ratio (a) |
53.3 | % | 53.5 | % | 54.3 | % | 54.7 | % |
a) |
See Non-GAAP Financial Measures beginning on page 30. |
U.S. Bancorp | 5 |
6 |
U.S. Bancorp |
Table 4 |
Investment Securities |
Available-for-Sale |
Held-to-Maturity |
|||||||||||||||||||||||||||||||||||
At September 30, 2019 (Dollars in Millions) |
Amortized Cost |
Fair Value | Weighted- Average Maturity in Years |
Average Yield (e) |
Amortized Cost |
|
Fair Value | Weighted- Average Maturity in Years |
|
Weighted- Average Yield (e) |
||||||||||||||||||||||||||
U.S. Treasury and Agencies |
||||||||||||||||||||||||||||||||||||
Maturing in one year or less |
$ |
$ |
|
% | |
|
|
|
$ |
– | $ |
– | |
– | – | % | ||||||||||||||||||||
Maturing after one year through five years |
||||||||||||||||||||||||||||||||||||
Maturing after five years through ten years |
||||||||||||||||||||||||||||||||||||
Maturing after ten years |
– | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||
Total |
$ | $ | % | $ | $ | % | ||||||||||||||||||||||||||||||
Mortgage-Backed Securities (a) |
||||||||||||||||||||||||||||||||||||
Maturing in one year or less |
$ | $ | % | $ | $ | % | ||||||||||||||||||||||||||||||
Maturing after one year through five years |
||||||||||||||||||||||||||||||||||||
Maturing after five years through ten years |
||||||||||||||||||||||||||||||||||||
Maturing after ten years |
||||||||||||||||||||||||||||||||||||
Total |
$ | $ | % | $ | $ | % | ||||||||||||||||||||||||||||||
Asset-Backed Securities (a) |
||||||||||||||||||||||||||||||||||||
Maturing in one year or less |
$ | – | $ | – | – | – | % | $ | – | $ | – | – | – | % | ||||||||||||||||||||||
Maturing after one year through five years |
||||||||||||||||||||||||||||||||||||
Maturing after five years through ten years |
– | – | – | – | – | |||||||||||||||||||||||||||||||
Maturing after ten years |
– | – | – | – | – | |||||||||||||||||||||||||||||||
Total |
$ | $ | % | $ | $ | % | ||||||||||||||||||||||||||||||
Obligations of State and Political |
||||||||||||||||||||||||||||||||||||
Maturing in one year or less |
$ | $ | % | $ | – | $ | – | % | ||||||||||||||||||||||||||||
Maturing after one year through five years |
– | – | ||||||||||||||||||||||||||||||||||
Maturing after five years through ten years |
||||||||||||||||||||||||||||||||||||
Maturing after ten years |
– | – | – | – | ||||||||||||||||||||||||||||||||
Total |
$ | $ | % | $ | $ | % | ||||||||||||||||||||||||||||||
Other |
||||||||||||||||||||||||||||||||||||
Maturing in one year or less |
$ | $ | % | $ | $ | % | ||||||||||||||||||||||||||||||
Maturing after one year through five years |
– | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||
Maturing after five years through ten years |
– | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||
Maturing after ten years |
– | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||
Total |
$ | $ | % | $ | $ | % | ||||||||||||||||||||||||||||||
Total investment securities (d) |
$ | $ | % | $ | $ | % |
(a) |
Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities that take into account anticipated future prepayments. |
(b) |
Information related to obligations of state and political subdivisions is presented based upon yield to first optional call date if the security is purchased at a premium, and yield to maturity if the security is purchased at par or a discount. |
(c) |
Maturity calculations for obligations of state and political subdivisions are based on the first optional call date for securities with a fair value above par and the contractual maturity date for securities with a fair value equal to or below par. |
(d) |
The weighted-average maturity of the available-for-sale held-to-maturity |
(e) |
Weighted-average yields for obligations of state and political subdivisions are presented on a fully-taxable equivalent basis based on a federal income tax rate of available-for-sale held-to-maturity available-for-sale held-to-maturity. |
September 30, 2019 | December 31, 2018 | |||||||||||||||||||
(Dollars in Millions) | Amortized Cost |
Percent of Total |
Amortized Cost |
Percent of Total |
||||||||||||||||
U.S. Treasury and agencies |
$ | % | $ | % | ||||||||||||||||
Mortgage-backed securities |
||||||||||||||||||||
Asset-backed securities |
||||||||||||||||||||
Obligations of state and political subdivisions |
||||||||||||||||||||
Other |
– |
– | ||||||||||||||||||
Total investment securities |
$ | % | $ | % |
U.S. Bancorp | 7 |
8 |
U.S. Bancorp |
• | Macroeconomic environment and other qualitative considerations, such as regulatory and compliance changes, litigation developments, and technology and cybersecurity; |
• | Credit measures, including adversely rated and nonperforming loans, leveraged transactions, credit concentrations and lending limits; |
• | Interest rate and market risk, including market value and net income simulation, and trading-related Value at Risk (“VaR”); |
• | Liquidity risk, including funding projections under various stressed scenarios; |
• | Operational and compliance risk, including losses stemming from events such as fraud, processing errors, control breaches, breaches in data security or adverse business decisions, as well as reporting on technology performance, and various legal and regulatory compliance measures; |
• | Capital ratios and projections, including regulatory measures and stressed scenarios; and |
• | Strategic and reputational risk considerations, impacts and responses. |
U.S. Bancorp | 9 |
10 |
U.S. Bancorp |
Residential Mortgages (Dollars in Millions) |
Interest Only |
Amortizing | Total | Percent of Total |
||||||||||||
Loan-to-Value |
||||||||||||||||
Less than or equal to 80% |
$ | 2,314 | $ | 57,346 | $ | 59,660 | 86.0 | % | ||||||||
Over 80% through 90% |
14 | 5,614 | 5,628 | 8.1 | ||||||||||||
Over 90% through 100% |
1 | 483 | 484 | .7 | ||||||||||||
Over 100% |
– | 165 | 165 | .3 | ||||||||||||
No LTV available |
– | 28 | 28 | – | ||||||||||||
Loans purchased from GNMA mortgage pools (a) |
– | 3,413 | 3,413 | 4.9 | ||||||||||||
Total |
$ | 2,329 | $ | 67,049 | $ | 69,378 | 100.0 | % | ||||||||
Borrower Type |
||||||||||||||||
Prime borrowers |
$ | 2,329 | $ | 63,010 | $ | 65,339 | 94.2 | % | ||||||||
Sub-prime borrowers |
– | 626 | 626 | .9 | ||||||||||||
Loans purchased from GNMA mortgage pools (a) |
– | 3,413 | 3,413 | 4.9 | ||||||||||||
Total |
$ | 2,329 | $ | 67,049 | $ | 69,378 | 100.0 | % |
(a) |
Represents loans purchased from Government National Mortgage Association (“GNMA”) mortgage pools whose payments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. |
Home Equity and Second Mortgages (Dollars in Millions) |
Lines | Loans | Total | Percent of Total |
||||||||||||
Loan-to-Value |
||||||||||||||||
Less than or equal to 80% |
$ | 11,480 | $ | 958 | $ | 12,438 | 80.5 | % | ||||||||
Over 80% through 90% |
1,738 | 724 | 2,462 | 15.9 | ||||||||||||
Over 90% through 100% |
226 | 65 | 291 | 1.9 | ||||||||||||
Over 100% |
113 | 11 | 124 | .8 | ||||||||||||
No LTV/CLTV available |
131 | 7 | 138 | .9 | ||||||||||||
Total |
$ | 13,688 | $ | 1,765 | $ | 15,453 | 100.0 | % | ||||||||
Borrower Type |
||||||||||||||||
Prime borrowers |
$ | 13,654 | $ | 1,722 | $ | 15,376 | 99.5 | % | ||||||||
Sub-prime borrowers |
34 | 43 | 77 | .5 | ||||||||||||
Total |
$ | 13,688 | $ | 1,765 | $ | 15,453 | 100.0 | % |
U.S. Bancorp | 11 |
Junior Liens Behind | ||||||||||||
(Dollars in Millions) | Company Owned or Serviced First Lien |
Third Party First Lien |
Total | |||||||||
Total |
$ | 4,666 | $ | 6,882 | $ | 11,548 | ||||||
Percent 30-89 days past due |
.39 | % | .49 | % | .45 | % | ||||||
Percent 90 days or more past due |
.06 | % | .08 | % | .07 | % | ||||||
Weighted-average CLTV |
69 | % | 66 | % | 67 | % | ||||||
Weighted-average credit score |
780 | 776 | 777 |
Table 5 |
Delinquent Loan Ratios as a Percent of Ending Loan Balances |
90 days or more past due excluding nonperforming loans |
September 30, 2019 |
December 31, 2018 |
||||||
Commercial |
||||||||
Commercial |
.10 | % | .07 | % | ||||
Lease financing |
– | – | ||||||
Total commercial |
.10 | .07 | ||||||
Commercial Real Estate |
||||||||
Commercial mortgages |
– | – | ||||||
Construction and development |
.02 | – | ||||||
Total commercial real estate |
.01 | – | ||||||
Residential Mortgages (a) |
.17 | .18 | ||||||
Credit Card |
1.16 | 1.25 | ||||||
Other Retail |
||||||||
Retail leasing |
.05 | .04 | ||||||
Home equity and second mortgages |
.34 | .35 | ||||||
Other |
.14 | .15 | ||||||
Total other retail |
.18 | .19 | ||||||
Total loans |
.20 | % | .20 | % | ||||
90 days or more past due including nonperforming loans |
September 30, 2019 |
December 31, 2018 |
||||||
Commercial |
.40 | % | .27 | % | ||||
Commercial real estate |
.23 | .29 | ||||||
Residential mortgages (a) |
.53 | .63 | ||||||
Credit card |
1.16 | 1.25 | ||||||
Other retail |
.47 | .54 | ||||||
Total loans |
.49 | % | .49 | % |
(a) |
Delinquent loan ratios exclude $1.7 billion at September 30, 2019, and at December 31, 2018, of loans purchased from GNMA mortgage pools whose repayments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. Including these loans, the ratio of residential mortgages 90 days or more past due including all nonperforming loans was 2.91 percent at September 30, 2019, and 3.21 percent at December 31, 2018. |
12 |
U.S. Bancorp |
Amount | As a Percent of Ending Loan Balances |
|||||||||||||||||||
(Dollars in Millions) | September 30, 2019 |
December 31, 2018 |
September 30, 2019 |
December 31, 2018 |
||||||||||||||||
Residential Mortgages (a) |
||||||||||||||||||||
30-89 days |
$ | 167 | $ | 181 | .24 | % | .27 | % | ||||||||||||
90 days or more |
115 | 114 | .17 | .18 | ||||||||||||||||
Nonperforming |
251 | 296 | .36 | .46 | ||||||||||||||||
Total |
$ | 533 | $ | 591 | .77 | % | .91 | % | ||||||||||||
Credit Card |
||||||||||||||||||||
30-89 days |
$ | 316 | $ | 324 | 1.33 | % | 1.39 | % | ||||||||||||
90 days or more |
278 | 293 | 1.16 | 1.25 | ||||||||||||||||
Nonperforming |
– | – | – | – | ||||||||||||||||
Total |
$ | 594 | $ | 617 | 2.49 | % | 2.64 | % | ||||||||||||
Other Retail |
||||||||||||||||||||
Retail Leasing |
||||||||||||||||||||
30-89 days |
$ | 41 | $ | 37 | .48 | % | .43 | % | ||||||||||||
90 days or more |
4 | 3 | .05 | .04 | ||||||||||||||||
Nonperforming |
12 | 12 | .14 | .14 | ||||||||||||||||
Total |
$ | 57 | $ | 52 | .67 | % | .61 | % | ||||||||||||
Home Equity and Second Mortgages |
||||||||||||||||||||
30-89 days |
$ | 85 | $ | 90 | .55 | % | .56 | % | ||||||||||||
90 days or more |
52 | 57 | .34 | .35 | ||||||||||||||||
Nonperforming |
116 | 145 | .75 | .90 | ||||||||||||||||
Total |
$ | 253 | $ | 292 | 1.64 | % | 1.81 | % | ||||||||||||
Other (b) |
||||||||||||||||||||
30-89 days |
$ | 265 | $ | 276 | .78 | % | .87 | % | ||||||||||||
90 days or more |
46 | 48 | .14 | .15 | ||||||||||||||||
Nonperforming |
42 | 40 | .13 | .13 | ||||||||||||||||
Total |
$ | 353 | $ | 364 | 1.05 | % | 1.15 | % |
(a) |
Excludes $391 million of loans 30-89 days past due and $1.7 billion of loans 90 days or more past due at September 30, 2019, purchased from GNMA mortgage pools that continue to accrue interest, compared with $430 million and $1.7 billion at December 31, 2018, respectively. |
(b) |
Includes revolving credit, installment, automobile and student loans. |
U.S. Bancorp | 13 |
As a Percent of Performing TDRs | ||||||||||||||||||||
At September 30, 2019 (Dollars in Millions) |
Performing TDRs |
30-89 Days Past Due |
90 Days or More Past Due |
Nonperforming TDRs |
Total TDRs |
|||||||||||||||
Commercial |
$ | 264 | 4.8 | % | 2.1 | % | $ | 145 | (a) | $ | 409 | |||||||||
Commercial real estate |
145 | .9 | — | 37 | (b) | 182 | ||||||||||||||
Residential mortgages |
1,322 | 2.9 | 4.3 | 156 | 1,478 | (d) | ||||||||||||||
Credit card |
262 | 10.6 | 5.9 | — | 262 | |||||||||||||||
Other retail |
152 | 8.4 | 7.2 | 38 | (c) | 190 | (e) | |||||||||||||
TDRs, excluding loans purchased from GNMA mortgage pools |
2,145 | 4.3 | 4.1 | 376 | 2,521 | |||||||||||||||
Loans purchased from GNMA mortgage pools (g) |
1,690 | — | — | — | 1,690 | (f) | ||||||||||||||
Total |
$ | 3,835 | 2.4 | % | 2.3 | % | $ | 376 | $ | 4,211 |
(a) |
Primarily represents loans less than six months from the modification date that have not met the performance period required to return to accrual status (generally six months) and small business credit cards with a modified rate equal to 0 percent. |
(b) |
Primarily represents loans less than six months from the modification date that have not met the performance period required to return to accrual status (generally six months). |
(c) |
Primarily represents loans with a modified rate equal to 0 percent. |
(d) |
Includes $314 million of residential mortgage loans to borrowers that have had debt discharged through bankruptcy and $37 million in trial period arrangements or previously placed in trial period arrangements but not successfully completed. |
(e) |
Includes $92 million of other retail loans to borrowers that have had debt discharged through bankruptcy and $18 million in trial period arrangements or previously placed in trial period arrangements but not successfully completed. |
(f) |
Includes $144 million of Federal Housing Administration and United States Department of Veterans Affairs residential mortgage loans to borrowers that have had debt discharged through bankruptcy and $416 million in trial period arrangements or previously placed in trial period arrangements but not successfully completed. |
(g) |
Approximately 5.9 percent and 44.6 percent of the total TDR loans purchased from GNMA mortgage pools are 30-89 days past due and 90 days or more past due, respectively, but are not classified as delinquent as their repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. |
14 |
U.S. Bancorp |
Amount | As a Percent of Ending Loan Balances |
|||||||||||||||||||
(Dollars in Millions) | September 30, 2019 |
December 31, 2018 |
September 30, 2019 |
December 31, 2018 |
||||||||||||||||
Residential |
||||||||||||||||||||
Illinois |
$ | 10 | $ | 11 | .22 | % | .25 | % | ||||||||||||
California |
8 | 11 | .03 | .04 | ||||||||||||||||
New York |
6 | 8 | .69 | .97 | ||||||||||||||||
Minnesota |
5 | 5 | .08 | .08 | ||||||||||||||||
Oregon |
4 | 5 | .12 | .15 | ||||||||||||||||
All other states |
47 | 66 | .11 | .16 | ||||||||||||||||
Total residential |
80 | 106 | .09 | .13 | ||||||||||||||||
Commercial |
||||||||||||||||||||
California |
3 | 3 | .01 | .01 | ||||||||||||||||
Idaho |
– | 1 | – | .09 | ||||||||||||||||
All other states |
1 | 1 | – | – | ||||||||||||||||
Total commercial |
4 | 5 | – | – | ||||||||||||||||
Total |
$ | 84 | $ | 111 | .03 | % | .04 | % |
U.S. Bancorp | 15 |
Table 6 |
Nonperforming Assets (a) |
(Dollars in Millions) | September 30, 2019 |
December 31, 2018 |
||||||
Commercial |
||||||||
Commercial |
$ | 290 | $ | 186 | ||||
Lease financing |
29 | 23 | ||||||
Total commercial |
319 | 209 | ||||||
Commercial Real Estate |
||||||||
Commercial mortgages |
82 | 76 | ||||||
Construction and development |
7 | 39 | ||||||
Total commercial real estate |
89 | 115 | ||||||
Residential Mortgages (b) |
251 | 296 | ||||||
Credit Card |
– | – | ||||||
Other Retail |
||||||||
Retail leasing |
12 | 12 | ||||||
Home equity and second mortgages |
116 | 145 | ||||||
Other |
42 | 40 | ||||||
Total other retail |
170 | 197 | ||||||
Total nonperforming loans |
829 | 817 | ||||||
Other Real Estate (c) |
84 | 111 | ||||||
Other Assets |
66 | 61 | ||||||
Total nonperforming assets |
$ | 979 | $ | 989 | ||||
Accruing loans 90 days or more past due (b) |
$ | 600 | $ | 584 | ||||
Nonperforming loans to total loans |
.28 | % | .28 | % | ||||
Nonperforming assets to total loans plus other real estate (c) |
.33 | % | .34 | % |
(Dollars in Millions) | Commercial and Commercial Real Estate |
Residential Mortgages, Credit Card and Other Retail |
Total | |||||||||
Balance December 31, 2018 |
$ | 338 | $ | 651 | $ | 989 | ||||||
Additions to nonperforming assets |
||||||||||||
New nonaccrual loans and foreclosed properties |
578 | 225 | 803 | |||||||||
Advances on loans |
6 | 1 | 7 | |||||||||
Total additions |
584 | 226 | 810 | |||||||||
Reductions in nonperforming assets |
||||||||||||
Paydowns, payoffs |
(136 | ) | (109 | ) | (245 | ) | ||||||
Net sales |
(170 | ) | (64 | ) | (234 | ) | ||||||
Return to performing status |
(10 | ) | (153 | ) | (163 | ) | ||||||
Charge-offs (d) |
(162 | ) | (16 | ) | (178 | ) | ||||||
Total reductions |
(478 | ) | (342 | ) | (820 | ) | ||||||
Net additions to (reductions in) nonperforming assets |
106 | (116 | ) | (10 | ) | |||||||
Balance September 30, 2019 |
$ | 444 | $ | 535 | $ | 979 |
(a) |
Throughout this document, nonperforming assets and related ratios do not include accruing loans 90 days or more past due. |
(b) |
Excludes $1.7 billion at September 30, 2019, and at December 31, 2018, of loans purchased from GNMA mortgage pools that are 90 days or more past due that continue to accrue interest, as their repayments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. |
(c) |
Foreclosed GNMA loans of $177 million and $235 million at September 30, 2019, and December 31, 2018, respectively, continue to accrue interest and are recorded as other assets and excluded from nonperforming assets because they are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. |
(d) |
Charge-offs exclude actions for certain card products and loan sales that were not classified as nonperforming at the time the charge-off occurred. |
16 |
U.S. Bancorp |
Table 7 |
Net Charge-offs as a Percent of Average Loans Outstanding |
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||||
Commercial |
||||||||||||||||||||
Commercial |
.29 | % | .27 | % | .27 | % | .25 | % | ||||||||||||
Lease financing |
.22 | .22 | .20 | .27 | ||||||||||||||||
Total commercial |
.29 | .26 | .27 | .25 | ||||||||||||||||
Commercial Real Estate |
||||||||||||||||||||
Commercial mortgages |
.04 | (.07 | ) | .02 | (.04 | ) | ||||||||||||||
Construction and development |
.11 | (.14 | ) | .02 | (.04 | ) | ||||||||||||||
Total commercial real estate |
.06 | (.09 | ) | .02 | (.04 | ) | ||||||||||||||
Residential Mortgages |
(.02 | ) | .03 | .01 | .03 | |||||||||||||||
Credit Card |
3.53 | 3.75 | 3.85 | 3.91 | ||||||||||||||||
Other Retail |
||||||||||||||||||||
Retail leasing |
.14 | .14 | .14 | .15 | ||||||||||||||||
Home equity and second mortgages |
(.03 | ) | (.02 | ) | (.03 | ) | (.03 | ) | ||||||||||||
Other |
.72 | .74 | .75 | .76 | ||||||||||||||||
Total other retail |
.43 | .43 | .44 | .45 | ||||||||||||||||
Total loans |
.48 | % | .46 | % | .49 | % | .48 | % |
U.S. Bancorp | 17 |
18 |
U.S. Bancorp |
Table 8 |
Summary of Allowance for Credit Losses |
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||||||
(Dollars in Millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Balance at beginning of period |
$ | 4,466 | $ | 4,411 | $ | 4,441 | $ | 4,417 | ||||||||||||
Charge-Offs |
||||||||||||||||||||
Commercial |
||||||||||||||||||||
Commercial |
86 | 83 | 286 | 248 | ||||||||||||||||
Lease financing |
5 | 5 | 14 | 17 | ||||||||||||||||
Total commercial |
91 | 88 | 300 | 265 | ||||||||||||||||
Commercial real estate |
||||||||||||||||||||
Commercial mortgages |
3 | 1 | 7 | 4 | ||||||||||||||||
Construction and development |
4 | – | 4 | 2 | ||||||||||||||||
Total commercial real estate |
7 | 1 | 11 | 6 | ||||||||||||||||
Residential mortgages |
8 | 12 | 27 | 37 | ||||||||||||||||
Credit card |
248 | 231 | 767 | 727 | ||||||||||||||||
Other retail |
||||||||||||||||||||
Retail leasing |
6 | 6 | 17 | 16 | ||||||||||||||||
Home equity and second mortgages |
5 | 6 | 14 | 18 | ||||||||||||||||
Other |
86 | 84 | 252 | 249 | ||||||||||||||||
Total other retail |
97 | 96 | 283 | 283 | ||||||||||||||||
Total charge-offs |
451 | 428 | 1,388 | 1,318 | ||||||||||||||||
Recoveries |
||||||||||||||||||||
Commercial |
||||||||||||||||||||
Commercial |
14 | 20 | 87 | 75 | ||||||||||||||||
Lease financing |
2 | 2 | 6 | 6 | ||||||||||||||||
Total commercial |
16 | 22 | 93 | 81 | ||||||||||||||||
Commercial real estate |
||||||||||||||||||||
Commercial mortgages |
– | 6 | 2 | 13 | ||||||||||||||||
Construction and development |
1 | 4 | 2 | 5 | ||||||||||||||||
Total commercial real estate |
1 | 10 | 4 | 18 | ||||||||||||||||
Residential mortgages |
11 | 8 | 23 | 22 | ||||||||||||||||
Credit card |
37 | 25 | 104 | 100 | ||||||||||||||||
Other retail |
||||||||||||||||||||
Retail leasing |
3 | 3 | 8 | 7 | ||||||||||||||||
Home equity and second mortgages |
6 | 7 | 17 | 22 | ||||||||||||||||
Other |
25 | 25 | 70 | 67 | ||||||||||||||||
Total other retail |
34 | 35 | 95 | 96 | ||||||||||||||||
Total recoveries |
99 | 100 | 319 | 317 | ||||||||||||||||
Net Charge-Offs |
||||||||||||||||||||
Commercial |
||||||||||||||||||||
Commercial |
72 | 63 | 199 | 173 | ||||||||||||||||
Lease financing |
3 | 3 | 8 | 11 | ||||||||||||||||
Total commercial |
75 | 66 | 207 | 184 | ||||||||||||||||
Commercial real estate |
||||||||||||||||||||
Commercial mortgages |
3 | (5 | ) | 5 | (9 | ) | ||||||||||||||
Construction and development |
3 | (4 | ) | 2 | (3 | ) | ||||||||||||||
Total commercial real estate |
6 | (9 | ) | 7 | (12 | ) | ||||||||||||||
Residential mortgages |
(3 | ) | 4 | 4 | 15 | |||||||||||||||
Credit card |
211 | 206 | 663 | 627 | ||||||||||||||||
Other retail |
||||||||||||||||||||
Retail leasing |
3 | 3 | 9 | 9 | ||||||||||||||||
Home equity and second mortgages |
(1 | ) | (1 | ) | (3 | ) | (4 | ) | ||||||||||||
Other |
61 | 59 | 182 | 182 | ||||||||||||||||
Total other retail |
63 | 61 | 188 | 187 | ||||||||||||||||
Total net charge-offs |
352 | 328 | 1,069 | 1,001 | ||||||||||||||||
Provision for credit losses |
367 | 343 | 1,109 | 1,011 | ||||||||||||||||
Other changes |
– | – | – | (1 | ) | |||||||||||||||
Balance at end of period (a) |
$ | 4,481 | $ | 4,426 | $ | 4,481 | $ | 4,426 | ||||||||||||
Components |
||||||||||||||||||||
Allowance for loan losses |
$ | 4,007 | $ | 3,954 | ||||||||||||||||
Liability for unfunded credit commitments |
474 | 472 | ||||||||||||||||||
Total allowance for credit losses |
$ | 4,481 | $ | 4,426 | ||||||||||||||||
Allowance for Credit Losses as a Percentage of |
||||||||||||||||||||
Period-end loans |
1.52 | % | 1.57 | % | ||||||||||||||||
Nonperforming loans |
541 | 544 | ||||||||||||||||||
Nonperforming and accruing loans 90 days or more past due |
314 | 324 | ||||||||||||||||||
Nonperforming assets |
458 | 441 | ||||||||||||||||||
Annualized net charge-offs |
321 | 340 |
(a) |
At September 30, 2019 and 2018, $1.8 billion and $1.7 billion, respectively, of the total allowance for credit losses related to incurred losses on credit card and other retail loans. |
U.S. Bancorp | 19 |
Table 9 |
Sensitivity of Net Interest Income |
September 30, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||||||||
Down 50 bps Immediate |
Up 50 bps Immediate |
Down 200 bps Gradual |
Up 200 bps Gradual |
Down 50 bps Immediate |
Up 50 bps Immediate |
Down 200 bps Gradual |
Up 200 bps Gradual |
|||||||||||||||||||||||||||||
Net interest income |
(1.31 | )% | .36 | % | (2.50 | )% | (.38 | )% | (1.43 | )% | 1.02 | % | (3.90 | )% | 1.45 | % |
20 |
U.S. Bancorp |
• | To convert fixed-rate debt from fixed-rate payments to floating-rate payments; |
• | To convert the cash flows associated with floating-rate debt from floating-rate payments to fixed-rate payments; |
• | To mitigate changes in value of the Company’s unfunded mortgage loan commitments, funded MLHFS and MSRs; |
• | To mitigate remeasurement volatility of foreign currency denominated balances; and |
• | To mitigate the volatility of the Company’s net investment in foreign operations driven by fluctuations in foreign currency exchange rates. |
U.S. Bancorp | 21 |
Nine Months Ended September 30 (Dollars in Millions) |
2019 | 2018 | ||||||
Average |
$ | 1 | $ | 1 | ||||
High |
2 | 1 | ||||||
Low |
1 | 1 | ||||||
Period-end |
1 | 1 |
Nine Months Ended September 30 (Dollars in Millions) |
2019 | 2018 | ||||||
Average |
$ | 6 | $ | 5 | ||||
High |
9 | 8 | ||||||
Low |
4 | 2 | ||||||
Period-end |
7 | 6 |
22 |
U.S. Bancorp |
Nine Months Ended September 30 (Dollars in Millions) |
2019 | 2018 | ||||||
Residential Mortgage Loans Held For Sale and Related Hedges |
||||||||
Average |
$ | 3 | $ | 1 | ||||
High |
8 | 2 | ||||||
Low |
– | – | ||||||
Mortgage Servicing Rights and Related Hedges |
||||||||
Average |
$ | 6 | $ | 6 | ||||
High |
11 | 7 | ||||||
Low |
4 | 4 |
U.S. Bancorp | 23 |
24 |
U.S. Bancorp |
Table 10 |
Regulatory Capital Ratios |
(Dollars in Millions) | September 30, 2019 |
December 31, 2018 |
||||||
Basel III standardized approach: |
||||||||
Common equity tier 1 capital |
$ | 37,653 | $ | 34,724 | ||||
Tier 1 capital |
43,667 | 40,741 | ||||||
Total risk-based capital |
51,684 | 48,178 | ||||||
Risk-weighted assets |
390,622 | 381,661 | ||||||
Common equity tier 1 capital as a percent of risk-weighted assets |
9.6 | % | 9.1 | % | ||||
Tier 1 capital as a percent of risk-weighted assets |
11.2 | 10.7 | ||||||
Total risk-based capital as a percent of risk-weighted assets |
13.2 | 12.6 | ||||||
Tier 1 capital as a percent of adjusted quarterly average assets (leverage ratio) |
9.3 | 9.0 | ||||||
Basel III advanced approaches: |
||||||||
Common equity tier 1 capital |
$ | 37,653 | $ | 34,724 | ||||
Tier 1 capital |
43,667 | 40,741 | ||||||
Total risk-based capital |
48,620 | 45,136 | ||||||
Risk-weighted assets |
299,309 | 295,002 | ||||||
Common equity tier 1 capital as a percent of risk-weighted assets |
12.6 | % | 11.8 | % | ||||
Tier 1 capital as a percent of risk-weighted assets |
14.6 | 13.8 | ||||||
Total risk-based capital as a percent of risk-weighted assets |
16.2 | 15.3 | ||||||
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure (total leverage exposure ratio) |
7.4 | 7.2 |
Period | Total Number of Shares Purchased |
Average Price Paid Per Share |
Total Number of Shares Purchased as Part of Publicly Announced Program (a) |
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (In Millions) |
||||||||||||
July |
10,442,260 | $ | 56.40 | 10,442,260 | $ | 2,411 | ||||||||||
August |
3,751,874 | 53.98 | 3,751,874 | 2,209 | ||||||||||||
September |
63,199 | 55.46 | 63,199 | 2,205 | ||||||||||||
Total |
14,257,333 | $ | 55.76 | 14,257,333 | $ | 2,205 |
(a) |
All shares were purchased under the July 1, 2019 through June 30, 2020, $3.0 billion common stock repurchase authorization program announced June 27, 2019. |
U.S. Bancorp | 25 |
Table 11 |
Line of Business Financial Performance |
Corporate and Commercial Banking |
Consumer and Business Banking |
|||||||||||||||||||||||||||||||
Three Months Ended September 30 (Dollars in Millions) |
2019 | 2018 | Percent Change |
2018 | |
Percent Change |
||||||||||||||||||||||||||
Condensed Income Statement |
||||||||||||||||||||||||||||||||
Net interest income (taxable-equivalent basis) |
$ |
$ | ( |
) % |
|
|
$ | $ |
|
% | |
|||||||||||||||||||||
Noninterest income |
||||||||||||||||||||||||||||||||
Securities gains (losses), net |
– | – | – | – | – | – | ||||||||||||||||||||||||||
Total net revenue |
( |
) | ||||||||||||||||||||||||||||||
Noninterest expense |
||||||||||||||||||||||||||||||||
Other intangibles |
– | ( |
) | |||||||||||||||||||||||||||||
Total noninterest expense |
||||||||||||||||||||||||||||||||
Income before provision and income taxes |
( |
) | ||||||||||||||||||||||||||||||
Provision for credit losses |
||||||||||||||||||||||||||||||||
Income before income taxes |
( |
) | ||||||||||||||||||||||||||||||
Income taxes and taxable-equivalent adjustment |
( |
) | ||||||||||||||||||||||||||||||
Net income |
( |
) | ||||||||||||||||||||||||||||||
Net (income) loss attributable to noncontrolling interests |
– | – | – | – | – | – | ||||||||||||||||||||||||||
Net income attributable to U.S. Bancorp |
$ | $ | ( |
) | $ | $ | ||||||||||||||||||||||||||
Average Balance Sheet |
||||||||||||||||||||||||||||||||
Commercial |
$ | $ | % | $ | $ | ( |
) % |
|||||||||||||||||||||||||
Commercial real estate |
( |
) | ( |
) | ||||||||||||||||||||||||||||
Residential mortgages |
( |
) | ||||||||||||||||||||||||||||||
Credit card |
– | – | – | – | – | – | ||||||||||||||||||||||||||
Other retail |
– | |||||||||||||||||||||||||||||||
Covered loans |
– | – | – | – | * | |||||||||||||||||||||||||||
Total loans |
||||||||||||||||||||||||||||||||
Goodwill |
– | ( |
) | |||||||||||||||||||||||||||||
Other intangible assets |
( |
) | ( |
) | ||||||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||||||
Noninterest-bearing deposits |
( |
) | ||||||||||||||||||||||||||||||
Interest checking |
||||||||||||||||||||||||||||||||
Savings products |
||||||||||||||||||||||||||||||||
Time deposits |
( |
) | ||||||||||||||||||||||||||||||
Total deposits |
– | |||||||||||||||||||||||||||||||
Total U.S. Bancorp shareholders’ equity |
( | ) | ( |
) | ||||||||||||||||||||||||||||
Corporate and Commercial Banking |
Consumer and Business Banking |
|||||||||||||||||||||||||||||||
Nine Months Ended September 30 (Dollars in Millions) |
2019 | 2018 | Percent Change |
2019 | 2018 | Percent Change |
||||||||||||||||||||||||||
Condensed Income Statement |
||||||||||||||||||||||||||||||||
Net interest income (taxable-equivalent basis) |
$ | $ | ( |
) % |
$ | $ | % | |||||||||||||||||||||||||
Noninterest income |
||||||||||||||||||||||||||||||||
Securities gains (losses), net |
– | – | – | – | – | – | ||||||||||||||||||||||||||
Total net revenue |
– | |||||||||||||||||||||||||||||||
Noninterest expense |
( | ) | ||||||||||||||||||||||||||||||
Other intangibles |
– | ( |
) | |||||||||||||||||||||||||||||
Total noninterest expense |
( | ) | ||||||||||||||||||||||||||||||
Income before provision and income taxes |
( |
) | ||||||||||||||||||||||||||||||
Provision for credit losses |
( |
) | ||||||||||||||||||||||||||||||
Income before income taxes |
( | ) | ||||||||||||||||||||||||||||||
Income taxes and taxable-equivalent adjustment |
( | ) | ||||||||||||||||||||||||||||||
Net income |
( | ) | ||||||||||||||||||||||||||||||
Net (income) loss attributable to noncontrolling interests |
– | – | – | – | – | – | ||||||||||||||||||||||||||
Net income attributable to U.S. Bancorp |
$ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||
Average Balance Sheet |
||||||||||||||||||||||||||||||||
Commercial |
$ | $ | % | $ | $ | ( |
) % |
|||||||||||||||||||||||||
Commercial real estate |
( |
) | ( |
) | ||||||||||||||||||||||||||||
Residential mortgages |
( |
) | ||||||||||||||||||||||||||||||
Credit card |
– | – | – | – | – | – | ||||||||||||||||||||||||||
Other retail |
– | |||||||||||||||||||||||||||||||
Covered loans |
– | – | – | – | * | |||||||||||||||||||||||||||
Total loans |
||||||||||||||||||||||||||||||||
Goodwill |
– | ( |
) | |||||||||||||||||||||||||||||
Other intangible assets |
( |
) | ( |
) | ||||||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||||||
Noninterest-bearing deposits |
( |
) | ( | ) | ||||||||||||||||||||||||||||
Interest checking |
||||||||||||||||||||||||||||||||
Savings products |
||||||||||||||||||||||||||||||||
Time deposits |
( |
) | ||||||||||||||||||||||||||||||
Total deposits |
( |
) | ||||||||||||||||||||||||||||||
Total U.S. Bancorp shareholders’ equity |
( | ) | ( |
) |
* |
Not meaningful |
(a) |
Presented net of related rewards and rebate costs and certain partner payments of $ |
(b) |
Includes revenue generated from certain contracts with customers of $ $ both the ninem onths ended September 30, 2019 and 2018, respectively. |
26 |
U.S. Bancorp |
Wealth Management and Investment Services |
Payment Services |
Treasury and Corporate Support |
Consolidated Company |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | Percent Change |
2019 | 2018 | Percent Change |
2019 | 2018 | Percent Change |
2019 | 2018 | Percent Change |
|||||||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | % | $ | $ | % | $ | $ | % | $ | $ | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
(a) | (a) | (b) | (b) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
– | – | – | – | – | – | |
* | * | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
( |
) | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
– | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
( |
) | * | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
– | – | – | – | – | – | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | % | $ | $ | % | $ | $ | % | $ | $ | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
( |
) | – | – | – | ( |
) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
– | – | – | – | * | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
– | – | – | – | – | – | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
( |
) | ( |
) | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
– | – | – | – | – | – | – | – | – | – | * | ||||||||||||||||||||||||||||||||||||||||||||||||||||
( | ) | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
( |
) | – | – | – | ( |
) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
( |
) | ( |
) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
( |
) | – | – | – | * | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
( |
) | ( |
) | * | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wealth Management and Investment Services |
Payment Services |
Treasury and Corporate Support |
Consolidated Company |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | Percent Change |
2019 | 2018 | Percent Change |
2019 | 2018 | Percent Change |
2019 | 2018 | Percent Change |
|||||||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | % | $ | $ | % | $ | $ | % | $ | $ | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
(a) | (a) | (b) | (b) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
– | – | – | – | – | – | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
( |
) | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
– | ( |
) | * | ( |
) | * | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
– | – | – | – | – | – | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | % | $ | $ | % | $ | $ | % | $ | $ | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
( |
) | – | – | – | ( |
) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
– | – | – | – | * | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
– | – | – | – | – | – |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
( |
) | ( |
) | – | * |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
– | – | – | – | – | – | – | – | – |
– | * | ||||||||||||||||||||||||||||||||||||||||||||||||||||
( | ) | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
( |
) | – | – | – | ( |
) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
( |
) | – | – | – | * | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
( |
) | ( |
) | * | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Bancorp |
27 |
28 |
U.S. Bancorp |
U.S. Bancorp | 29 |
• | Tangible common equity to tangible assets, and |
• | Tangible common equity to risk-weighted assets. |
30 |
U.S. Bancorp |
(Dollars in Millions) | September 30, 2019 |
December 31, 2018 |
||||||
Total equity |
$ | 54,147 | $ | 51,657 | ||||
Preferred stock |
(5,984 | ) | (5,984 | ) | ||||
Noncontrolling interests |
(630 | ) | (628 | ) | ||||
Goodwill (net of deferred tax liability) (1) |
(8,781 | ) | (8,549 | ) | ||||
Intangible assets, other than mortgage servicing rights |
(687 | ) | (601 | ) | ||||
Tangible common equity (a) |
38,065 | 35,895 | ||||||
Total assets |
487,671 | 467,374 | ||||||
Goodwill (net of deferred tax liability) (1) |
(8,781 | ) | (8,549 | ) | ||||
Intangible assets, other than mortgage servicing rights |
(687 | ) | (601 | ) | ||||
Tangible assets (b) |
478,203 | 458,224 | ||||||
Risk-weighted assets, determined in accordance with the Basel III standardized approach (c) |
390,622 | 381,661 | ||||||
Ratios |
||||||||
Tangible common equity to tangible assets (a)/(b) |
8.0 | % | 7.8 | % | ||||
Tangible common equity to risk-weighted assets (a)/(c) |
9.7 | 9.4 |
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||
Net interest income |
$ | 3,281 | $ | 3,251 | $ | 9,845 | $ | 9,616 | ||||||||||
Taxable-equivalent adjustment (2) |
25 | 30 | 79 | 88 | ||||||||||||||
Net interest income, on a taxable-equivalent basis |
3,306 | 3,281 | 9,924 | 9,704 | ||||||||||||||
Net interest income, on a taxable-equivalent basis (as calculated above) |
3,306 | 3,281 | 9,924 | 9,704 | ||||||||||||||
Noninterest income |
2,614 | 2,418 | 7,395 | 7,104 | ||||||||||||||
Less: Securities gains (losses), net |
25 | 10 | 47 | 25 | ||||||||||||||
Total net revenue, excluding net securities gains (losses) (d) |
5,895 | 5,689 | 17,272 | 16,783 | ||||||||||||||
Noninterest expense (e) |
3,144 | 3,044 | 9,384 | 9,184 | ||||||||||||||
Efficiency ratio (e)/(d) |
53.3 | % | 53.5 | % | 54.3 | % | 54.7 | % |
(1) |
Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements. |
(2) |
Based on a federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes. |
U.S. Bancorp | 31 |
(Dollars in Millions) | September 30, 2019 |
December 31 , 2018 |
||||||
(Unaudited) | ||||||||
Assets |
||||||||
Cash and due from banks |
$ | $ | ||||||
Investment securities |
||||||||
Held-to-maturity |
||||||||
Available-for-sale |
||||||||
Loans held for sale (including $ |
||||||||
Loans |
||||||||
Commercial |
||||||||
Commercial real estate |
||||||||
Residential mortgages |
||||||||
Credit card |
||||||||
Other retail |
|
|||||||
Total loans |
||||||||
Less allowance for loan losses |
( |
) | ( |
) | ||||
Net loans |
||||||||
Premises and equipment |
||||||||
Goodwill |
||||||||
Other intangible assets |
||||||||
Other assets (including $ |
||||||||
Total assets |
$ | $ | ||||||
Liabilities and Shareholders’ Equity |
||||||||
Deposits |
||||||||
Noninterest-bearing |
$ | $ | ||||||
Interest-bearing (b) |
||||||||
Total deposits |
||||||||
Short-term borrowings |
||||||||
Long-term debt |
||||||||
Other liabilities |
||||||||
Total liabilities |
||||||||
Shareholders’ equity |
||||||||
Preferred stock |
||||||||
Common stock, par value $ share—authorized : — |
||||||||
Capital surplus |
||||||||
Retained earnings |
||||||||
Less cost of common stock in treasury: 9/30/19 - — |
( |
) | ( |
) | ||||
Accumulated other comprehensive income (loss) |
( |
) | ( |
) | ||||
Total U.S. Bancorp shareholders’ equity |
||||||||
Noncontrolling interests |
||||||||
Total equity |
||||||||
Total liabilities and equity |
$ | $ |
(a) |
Includes only collateral pledged by the Company where counterparties have the right to sell or pledge the collateral. |
(b) |
Includes time deposits greater than $250,000 balances of $ |
32 |
U.S. Bancorp |
(Dollars and Shares in Millions, Except Per Share Data) (Unaudited) |
|
Three Months September 30 |
Nine Months September 30 |
|||||||||||||
2019 | 2018 | |
2019 | 2018 | ||||||||||||
Interest Income |
||||||||||||||||
Loans |
$ |
$ | |
$ | |
$ | ||||||||||
Loans held for sale |
||||||||||||||||
Investment securities |
||||||||||||||||
Other interest income |
||||||||||||||||
Total interest income |
||||||||||||||||
Interest Expense |
||||||||||||||||
Deposits |
||||||||||||||||
Short-term borrowings |
||||||||||||||||
Long-term debt |
||||||||||||||||
Total interest expense |
||||||||||||||||
Net interest income |
||||||||||||||||
Provision for credit losses |
||||||||||||||||
Net interest income after provision for credit losses |
||||||||||||||||
Noninterest Income |
||||||||||||||||
Credit and debit card revenue |
||||||||||||||||
Corporate payment products revenue |
||||||||||||||||
Merchant processing services |
||||||||||||||||
Trust and investment management fees |
||||||||||||||||
Deposit service charges |
||||||||||||||||
Treasury management fees |
||||||||||||||||
Commercial products revenue |
||||||||||||||||
Mortgage banking revenue |
||||||||||||||||
Investment products fees |
||||||||||||||||
Realized securities gains (losses), net |
||||||||||||||||
Other |
||||||||||||||||
Total noninterest income |
||||||||||||||||
Noninterest Expense |
||||||||||||||||
Compensation |
||||||||||||||||
Employee benefits |
||||||||||||||||
Net occupancy and equipment |
||||||||||||||||
Professional services |
||||||||||||||||
Marketing and business development |
||||||||||||||||
Technology and communications |
||||||||||||||||
Postage, printing and supplies |
||||||||||||||||
Other intangibles |
||||||||||||||||
Other |
||||||||||||||||
Total noninterest expense |
||||||||||||||||
Income before income taxes |
||||||||||||||||
Applicable income taxes |
||||||||||||||||
Net income |
||||||||||||||||
Net (income) loss attributable to noncontrolling interests |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Net income attributable to U.S. Bancorp |
$ | $ | $ | $ | ||||||||||||
Net income applicable to U.S. Bancorp common shareholders |
$ | $ | $ | $ | ||||||||||||
Earnings per common share |
$ |
$ | $ |
|
$ | |||||||||||
Diluted earnings per common share |
$ |
|
$ | $ |
|
$ | ||||||||||
Average common shares outstanding |
||||||||||||||||
Average diluted common shares outstanding |
U.S. Bancorp |
33 |
(Dollars in Millions) (Unaudited) |
Three Months Ended September 30 |
Nine Months Ended September 30 |
||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net income |
$ | $ | $ | $ | ||||||||||||
Other Comprehensive Income (Loss) |
||||||||||||||||
Changes in unrealized gains and losses on investment securities available-for-sale |
( |
) | ( |
) | ||||||||||||
Changes in unrealized gains and losses on derivative hedges |
( |
) | ( |
) | ||||||||||||
Foreign currency translation |
||||||||||||||||
Changes in unrealized gains and losses on retirement plans |
– | – | – | ( |
) | |||||||||||
Reclassification to earnings of realized gains and losses |
||||||||||||||||
Income taxes related to other comprehensive income (loss) |
( |
) | ( |
) | ||||||||||||
Total other comprehensive income (loss) |
( |
) | ( |
) | ||||||||||||
Comprehensive income |
||||||||||||||||
Comprehensive (income) loss attributable to noncontrolling interests |
( |
) | ( |
) |
( |
) | ( |
) | ||||||||
Comprehensive income attributable to U.S. Bancorp |
$ | $ | $ | $ |
34 |
U.S. Bancorp |
U.S. Bancorp Shareholders | ||||||||||||||||||||||||||||||||||||||||
(Dollars and Shares in Millions, Except Per Share Data) (Unaudited) |
Common Shares Outstanding |
Preferred Stock |
Common Stock |
Capital Surplus |
Retained Earnings |
Treasury Stock |
Accumulated Other Comprehensive Income (Loss) |
Total U.S. Bancorp Shareholders’ Equity |
Noncontrolling Interests |
Total Equity |
||||||||||||||||||||||||||||||
Balance June 30, 2018 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||
Net income (loss) |
||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Preferred stock dividends (a) |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Common stock dividends ($ per share) |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Issuance of preferred stock |
||||||||||||||||||||||||||||||||||||||||
Issuance of common and treasury stock |
( |
) | ||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests |
– | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||||
Net other changes in noncontrolling interests |
– | |||||||||||||||||||||||||||||||||||||||
Stock option and restricted stock grants |
||||||||||||||||||||||||||||||||||||||||
Balance September 30, 2018 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||
Balance June 30, 2019 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||
Net income (loss) |
||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) |
||||||||||||||||||||||||||||||||||||||||
Preferred stock dividends (b) |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Common stock dividends ($ per share) |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Issuance of common and treasury stock |
( |
) | ||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Net other changes in noncontrolling interests |
– | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||||
Stock option and restricted stock grants |
||||||||||||||||||||||||||||||||||||||||
Balance September 30, 2019 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||
Balance December 31, 2017 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||
Change in accounting principle (c) |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Net income (loss) |
||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Preferred stock dividends (d) |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Common stock dividends ($ per share) |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Issuance of preferred stock |
||||||||||||||||||||||||||||||||||||||||
Issuance of common and treasury stock |
( |
) | ||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests |
– | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||||
Net other changes in noncontrolling interests |
– | |||||||||||||||||||||||||||||||||||||||
Stock option and restricted stock grants |
||||||||||||||||||||||||||||||||||||||||
Balance September 30, 2018 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||
Balance December 31, 2018 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||
Change in accounting principle |
||||||||||||||||||||||||||||||||||||||||
Net income (loss) |
||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) |
||||||||||||||||||||||||||||||||||||||||
Preferred stock dividends (e) |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Common stock dividends ($ |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Issuance of common and treasury stock |
( |
) | ||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests |
– | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||||
Net other changes in noncontrolling interests |
– | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||||
Stock option and restricted stock grants |
||||||||||||||||||||||||||||||||||||||||
Balance September 30, 2019 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ |
(a) |
Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series H , Series J and Series K Non-Cumulative Perpetual Preferred Stock of $, $ |
(b) |
Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series H, Series J and Series K Non-Cumulative Perpetual Preferred Stock of $ |
(c) |
Reflects the adoption of new accounting guidance on January 1, 2018 to reclassify the impact of the reduced federal statutory rate for corporations included in 2017 tax reform legislation from accumulated other comprehensive income to retained earnings. |
(d) |
Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series H, Series I , Series J and Series K Non-Cumulative Perpetual Preferred Stock of $, $ |
(e) |
Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series H, Series I, Series J and Series K Non-Cumulative Perpetual Preferred Stock of $ |
U.S. Bancorp |
35 |
(Dollars in Millions) (Unaudited) |
Nine Months Ended September 30 |
|||||||
2019 | |
2018 | ||||||
Operating Activities |
||||||||
Net income attributable to U.S. Bancorp |
$ | $ | ||||||
Adjustments to reconcile net income to net cash provided by operating activities |
||||||||
Provision for credit losses |
||||||||
Depreciation and amortization of premises and equipment |
||||||||
Amortization of intangibles |
||||||||
(Gain) loss on sale of loans held for sale |
( |
) | ( |
) | ||||
(Gain) loss on sale of securities and other assets |
( |
) | ( |
) | ||||
Loans originated for sale in the secondary market, net of repayments |
( |
) | ( |
) | ||||
Proceeds from sales of loans held for sale |
||||||||
Other, net |
||||||||
Net cash provided by operating activities |
||||||||
Investing Activities |
||||||||
Proceeds from sales of available-for-sale |
||||||||
Proceeds from maturities of held-to-maturity |
||||||||
Proceeds from maturities of available-for-sale |
||||||||
Purchases of held-to-maturity |
( |
) | ( |
) | ||||
Purchases of available-for-sale |
( |
) | ( |
) | ||||
Net increase in loans outstanding |
( |
) | ( |
) | ||||
Proceeds from sales of loans |
||||||||
Purchases of loans |
( |
) | ( |
) | ||||
Net increase in securities purchased under agreements to resell |
( |
) | ( |
) | ||||
Other, net |
( |
) | ( |
) | ||||
Net cash used in investing activities |
( |
) | ( |
) | ||||
Financing Activities |
||||||||
Net increase (decrease) in deposits |
( |
) | ||||||
Net increase in short-term borrowings |
||||||||
Proceeds from issuance of long-term debt |
||||||||
Principal payments or redemption of long-term debt |
( |
) | ( |
) | ||||
Proceeds from issuance of preferred stock |
– | |||||||
Proceeds from issuance of common stock |
||||||||
Repurchase of common stock |
( |
) | ( |
) | ||||
Cash dividends paid on preferred stock |
( |
) | ( |
) | ||||
Cash dividends paid on common stock |
( |
) | ( |
) | ||||
Net cash provided by (used in) financing activities |
( |
) | ||||||
Change in cash and due from banks |
( |
) | ||||||
Cash and due from banks at beginning of period |
||||||||
Cash and due from banks at end of period |
$ | $ |
36 |
U.S. Bancorp |
Note 1 |
Basis of Presentation |
Note 2 |
Accounting Changes |
U.S. Bancorp |
37 |
Note 3 |
Investment Securities |
September 30, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||
Unrealized Losses | Unrealized Losses | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in Millions) | Amortized Cost |
Unrealized Gains |
Other-than- Temporary (a) |
Other (b) | Fair Value |
Amortized Cost |
Unrealized Gains |
Other-than- Temporary (a) |
Other (b) | Fair Value |
||||||||||||||||||||||||||||||||||
Held-to-maturity |
||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury and agencies |
$ | $ | $ | — | $ | ( |
$ | $ | $ | $ | — |
$ | ( ) |
$ | ||||||||||||||||||||||||||||||
Residential agency mortgage-backed securities |
|
— | ( |
) | — |
( |
) | |||||||||||||||||||||||||||||||||||||
Asset-backed securities |
||||||||||||||||||||||||||||||||||||||||||||
Collateralized debt obligations/Collateralized loan |
— | — | — | — |
— |
— |
||||||||||||||||||||||||||||||||||||||
Other |
— | — | — |
— |
||||||||||||||||||||||||||||||||||||||||
Obligations of state and political subdivisions |
— | — | — | — |
— |
|||||||||||||||||||||||||||||||||||||||
Obligations of foreign governments |
— | — | — | — |
— |
— |
||||||||||||||||||||||||||||||||||||||
Other |
— | — | — | — |
— |
— |
||||||||||||||||||||||||||||||||||||||
Total held-to-maturity |
$ | $ | $ | — | $ | ( |
$ | $ | $ | $ | — |
$ | ( ) |
$ | ||||||||||||||||||||||||||||||
Available-for-sale |
||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury and agencies |
$ | $ | $ | — | $ | ( |
$ | $ | $ | $ | — |
$ | ( ) |
$ | ||||||||||||||||||||||||||||||
Mortgage-backed securities |
||||||||||||||||||||||||||||||||||||||||||||
Residential agency |
— | ( |
) | — |
( |
) | ||||||||||||||||||||||||||||||||||||||
Commercial agency |
— | — | ( |
) | — |
— |
— |
|||||||||||||||||||||||||||||||||||||
Other asset-backed securities |
— | — | — |
— |
||||||||||||||||||||||||||||||||||||||||
Obligations of state and political subdivisions |
— | ( |
) | — |
( |
) | ||||||||||||||||||||||||||||||||||||||
Obligations of foreign governments |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
| |
Total available-for-sale |
$ | $ | $ | — | $ | ( |
) | $ | $ | $ | $ | — |
$ | ( |
) | $ |
(a) |
Represents impairment not related to credit for those investment securities that have been determined to be other-than-temporarily impaired. |
(b) |
Represents unrealized losses on investment securities that have not been determined to be other-than-temporarily impaired. |
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||||||
(Dollars in Millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Taxable |
$ | |
||||||||||||||||||
Non-taxable |
||||||||||||||||||||
Total interest income from investment securities |
$ |
38 |
U.S. Bancorp |
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||||||
(Dollars in Millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Realized gains |
$ | $ | $ |
$ | ||||||||||||||||
Realized losses |
– | – | ( |
) | – | |||||||||||||||
Net realized gains (losses) |
$ | $ | $ | $ | ||||||||||||||||
Income tax (benefit) on net realized gains (losses) |
$ | $ | $ | $ |
Less Than 12 Months | 12 Months or Greater | Total | ||||||||||||||||||||||||||||||
(Dollars in Millions) | Fair Value |
Unrealized Losses |
Fair Value |
Unrealized Losses |
Fair Value |
Unrealized Losses |
||||||||||||||||||||||||||
Held-to-maturity |
||||||||||||||||||||||||||||||||
U.S. Treasury and agencies |
|
$ | ( |
) | $ | $ | ( |
) | |
$ | $ | ( |
) | |||||||||||||||||||
Residential agency mortgage-backed securities |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Other asset-backed securities |
– | – | – | – | ||||||||||||||||||||||||||||
Other |
– | – | – | – | ||||||||||||||||||||||||||||
|
$ |
( |
) | $ |
$ |
( |
) | $ |
$ |
( |
) | |||||||||||||||||||||
Available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
U.S. Treasury and agencies |
$ | $ | ( |
) | $ | $ | ( |
) | $ | $ | ( |
) | ||||||||||||||||||||
Residential agency mortgage-backed securities |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Commercial agency mortgage-backed securities |
( |
) | – | – | ( |
) | ||||||||||||||||||||||||||
Obligations of state and political subdivisions |
( |
) | – | ( |
) | |||||||||||||||||||||||||||
Total available-for-sale |
$ | $ | ( |
) | $ | $ | ( |
) | $ | $ | ( |
) |
U.S. Bancorp |
39 |
Note 4 |
Loans and Allowance for Credit Losses |
September 30, 2019 | December 31, 2018 | |||||||||||||||||||
(Dollars in Millions) | Amount | Percent of Total |
Amount | Percent of Total |
||||||||||||||||
Commercial |
||||||||||||||||||||
Commercial |
$ | |
% | $ | % | |||||||||||||||
Lease financing |
|
|||||||||||||||||||
Total commercial |
|
|||||||||||||||||||
Commercial Real Estate |
||||||||||||||||||||
Commercial mortgages |
|
|||||||||||||||||||
Construction and development |
|
|||||||||||||||||||
Total commercial real estate |
|
|||||||||||||||||||
Residential Mortgages |
||||||||||||||||||||
Residential mortgages |
|
|||||||||||||||||||
Home equity loans, first liens |
|
|||||||||||||||||||
Total residential mortgages |
|
|||||||||||||||||||
Credit Card |
|
|||||||||||||||||||
Other Retail |
||||||||||||||||||||
Retail leasing |
|
|||||||||||||||||||
Home equity and second mortgages |
|
|||||||||||||||||||
Revolving credit |
|
|||||||||||||||||||
Installment |
|
|||||||||||||||||||
Automobile |
|
|||||||||||||||||||
Student |
|
|||||||||||||||||||
Total other retail |
|
|||||||||||||||||||
Total loans |
$ | |
% | $ | % |
40 |
U.S. Bancorp |
U.S. Bancorp |
41 |
Three Months Ended September 30 (Dollars in Millions) |
Commercial | Commercial Real Estate |
Residential Mortgages |
Credit Card |
Other Retail |
Covered Loans |
Total Loans |
|||||||||||||||||||||
2019 |
||||||||||||||||||||||||||||
Balance at beginning of period |
$ | $ | $ | $ | $ | $ | – | $ | ||||||||||||||||||||
Add |
||||||||||||||||||||||||||||
Provision for credit losses |
( |
) | – | |||||||||||||||||||||||||
Deduct |
||||||||||||||||||||||||||||
Loans charged-off |
– | |||||||||||||||||||||||||||
Less recoveries of loans charged-off |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | – | ( |
) | |||||||||||||||
Net loans charged-off |
( |
) | – | |||||||||||||||||||||||||
Balance at end of period |
$ | $ | $ | $ | $ | $ | – | $ | ||||||||||||||||||||
2018 |
||||||||||||||||||||||||||||
Balance at beginning of period |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Add |
||||||||||||||||||||||||||||
Provision for credit losses |
( |
) | ( |
) | ||||||||||||||||||||||||
Deduct |
||||||||||||||||||||||||||||
Loans charged-off |
– | |||||||||||||||||||||||||||
Less recoveries of loans charged-off |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | – | ( |
) | |||||||||||||||
Net loans charged-off |
( |
) | – | |||||||||||||||||||||||||
Balance at end of period |
$ | $ | $ | $ | $ | $ | $ |
Nine Months Ended September 30 (Dollars in Millions) |
Commercial | Commercial Real Estate |
Residential Mortgages |
Credit Card |
Other Retail |
Covered Loans |
Total Loans |
|||||||||||||||||||||
2019 |
||||||||||||||||||||||||||||
Balance at beginning of period |
$ | $ | $ | $ | $ | $ | – | $ | ||||||||||||||||||||
Add |
||||||||||||||||||||||||||||
Provision for credit losses |
( |
) | ( |
) | – | |||||||||||||||||||||||
Deduct |
||||||||||||||||||||||||||||
Loans charged-off |
– | |||||||||||||||||||||||||||
Less recoveries of loans charged-off |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | – | ( |
) | |||||||||||||||
Net loans charged-off |
– | |||||||||||||||||||||||||||
Balance at end of period |
$ | $ | $ | $ | $ | $ | – | $ | ||||||||||||||||||||
2018 |
||||||||||||||||||||||||||||
Balance at beginning of period |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Add |
||||||||||||||||||||||||||||
Provision for credit losses |
( |
) | ( |
) | ||||||||||||||||||||||||
Deduct |
||||||||||||||||||||||||||||
Loans charged-off |
– | |||||||||||||||||||||||||||
Less recoveries of loans charged-off |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | – | ( |
) | |||||||||||||||
Net loans charged-off |
( |
) | – | |||||||||||||||||||||||||
Other changes (a) |
– | – | – | – | – | ( |
) | ( |
) | |||||||||||||||||||
Balance at end of period |
$ | $ | $ | $ | $ | $ | $ |
(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. |
(Dollars in Millions) | Commercial | Commercial Real Estate |
Residential Mortgages |
Credit Card |
Other Retail |
Total Loans |
||||||||||||||||||
Allowance Balance at September 30, 2019 Related to |
||||||||||||||||||||||||
Loans individually evaluated for impairment (a) |
$ | $ | $ | – | $ | – | $ | – | $ | |||||||||||||||
TDRs collectively evaluated for impairment |
||||||||||||||||||||||||
Other loans collectively evaluated for impairment |
||||||||||||||||||||||||
Loans acquired with deteriorated credit quality |
– | – | – | – | ||||||||||||||||||||
Total allowance for credit losses |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Allowance Balance at December 31, 2018 Related to |
||||||||||||||||||||||||
Loans individually evaluated for impairment (a) |
$ | $ | $ | – | $ | – | $ | – | $ | |||||||||||||||
TDRs collectively evaluated for impairment |
||||||||||||||||||||||||
Other loans collectively evaluated for impairment |
||||||||||||||||||||||||
Loans acquired with deteriorated credit quality |
– | – | – | |||||||||||||||||||||
Total allowance for credit losses |
$ | $ | $ | $ | $ | $ |
(a) |
Represents the allowance for credit losses related to loans greater than $5 million classified as nonperforming or TDRs. |
42 |
U.S. Bancorp |
(Dollars in Millions) | Commercial | Commercial Real Estate |
Residential Mortgages |
Credit Card |
Other Retail |
Total Loans |
||||||||||||||||||
September 30, 2019 |
||||||||||||||||||||||||
Loans individually evaluated for impairment (a) |
$ | $ | $ | – | $ | – | $ | – | $ | |||||||||||||||
TDRs collectively evaluated for impairment |
||||||||||||||||||||||||
Other loans collectively evaluated for impairment |
||||||||||||||||||||||||
Loans acquired with deteriorated credit quality |
– | – | – | |||||||||||||||||||||
Total loans |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
December 31, 2018 |
||||||||||||||||||||||||
Loans individually evaluated for impairment (a) |
$ | $ | $ | – | $ | – | $ | – | $ | |||||||||||||||
TDRs collectively evaluated for impairment |
||||||||||||||||||||||||
Other loans collectively evaluated for impairment |
||||||||||||||||||||||||
Loans acquired with deteriorated credit quality |
– | – | – | |||||||||||||||||||||
Total loans |
$ | $ | $ | $ | $ | $ |
(a) |
Represents loans greater than $5 million classified as nonperforming or TDRs. |
U.S. Bancorp |
43 |
Accruing | ||||||||||||||||||||
(Dollars in Millions) | Current | 30-89 Days Past Due |
90 Days or More Past Due |
Nonperforming | Total | |||||||||||||||
September 30, 2019 |
||||||||||||||||||||
Commercial |
$ | $ | $ | $ | $ | |||||||||||||||
Commercial real estate |
||||||||||||||||||||
Residential mortgages (a) |
||||||||||||||||||||
Credit card |
— | |||||||||||||||||||
Other retail |
||||||||||||||||||||
Total loans |
$ | $ | $ | $ | $ | |||||||||||||||
December 31, 2018 |
||||||||||||||||||||
Commercial |
$ | $ | $ | $ | $ | |||||||||||||||
Commercial real estate |
— |
|||||||||||||||||||
Residential mortgages (a) |
||||||||||||||||||||
Credit card |
— |
|||||||||||||||||||
Other retail |
||||||||||||||||||||
Total loans |
$ | $ | $ | $ | $ |
(a) |
At September 30, 2019, $ |
44 |
U.S. Bancorp |
Criticized | ||||||||||||||||||||
(Dollars in Millions) | Pass | Special Mention |
Classified (a) | Total Criticized |
Total | |||||||||||||||
September 30, 2019 |
||||||||||||||||||||
Commercial |
$ | $ | $ | $ | $ | |||||||||||||||
Commercial real estate |
||||||||||||||||||||
Residential mortgages (b) |
||||||||||||||||||||
Credit card |
– | |||||||||||||||||||
Other retail |
||||||||||||||||||||
Total loans |
$ | $ | $ | $ | $ | |||||||||||||||
Total outstanding commitments |
$ | $ | $ | $ | $ | |||||||||||||||
December 31, 2018 |
||||||||||||||||||||
Commercial |
$ | $ | $ | $ | $ | |||||||||||||||
Commercial real estate |
||||||||||||||||||||
Residential mortgages (b) |
||||||||||||||||||||
Credit card |
– | |||||||||||||||||||
Other retail |
||||||||||||||||||||
Total loans |
$ | $ | $ | $ | $ | |||||||||||||||
Total outstanding commitments |
$ | $ | $ | $ | $ |
(a) |
Classified rating on consumer loans primarily based on delinquency status. |
(b) |
At September 30, 2019, $ |
(Dollars in Millions) | Period-end Recorded Investment (a) |
Unpaid Principal Balance |
Valuation Allowance |
Commitments to Lend Additional Funds |
||||||||||||
September 30, 2019 |
||||||||||||||||
Commercial |
$ | $ | $ | $ | ||||||||||||
Commercial real estate |
– | |||||||||||||||
Residential mortgages |
– | |||||||||||||||
Credit card |
– | |||||||||||||||
Other retail |
||||||||||||||||
Total loans, excluding loans purchased from GNMA mortgage pools |
||||||||||||||||
Loans purchased from GNMA mortgage pools |
||||||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||
December 31, 2018 |
||||||||||||||||
Commercial |
$ | $ | $ | $ | ||||||||||||
Commercial real estate |
||||||||||||||||
Residential mortgages |
– | |||||||||||||||
Credit card |
– | |||||||||||||||
Other retail |
||||||||||||||||
Total loans, excluding loans purchased from GNMA mortgage pools |
||||||||||||||||
Loans purchased from GNMA mortgage pools |
– | |||||||||||||||
Total |
$ | $ | $ | $ |
(a) |
Substantially all loans classified as impaired at September 30, 2019 and December 31, 2018, had an associated allowance for credit losses. |
U.S. Bancorp |
45 |
2019 | 2018 | |||||||||||||||||||
(Dollars in Millions) | Average Recorded Investment |
Interest Income Recognized |
Average Recorded Investment |
Interest Income Recognized |
||||||||||||||||
Three Months Ended September 30 |
||||||||||||||||||||
Commercial |
$ | $ | $ | $ | ||||||||||||||||
Commercial real estate |
||||||||||||||||||||
Residential mortgages |
||||||||||||||||||||
Credit card |
– | |||||||||||||||||||
Other retail |
||||||||||||||||||||
Covered Loans |
– | – | – | |||||||||||||||||
Total loans, excluding loans purchased from GNMA mortgage pools |
||||||||||||||||||||
Loans purchased from GNMA mortgage pools |
||||||||||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||||||
Nine Months Ended September 30 |
||||||||||||||||||||
Commercial |
$ | $ | $ | $ | ||||||||||||||||
Commercial real estate |
||||||||||||||||||||
Residential mortgages |
||||||||||||||||||||
Credit card |
– | |||||||||||||||||||
Other retail |
||||||||||||||||||||
Covered Loans |
– | – | ||||||||||||||||||
Total loans, excluding loans purchased from GNMA mortgage pools |
||||||||||||||||||||
Loans purchased from GNMA mortgage pools |
||||||||||||||||||||
Total |
$ | $ | $ | $ |
2019 | 2018 | |||||||||||||||||||||||||||
(Dollars in Millions) | Number of Loans |
Pre-Modification Outstanding Loan Balance |
Post-Modification Outstanding Loan Balance |
Number of Loans |
Pre-Modification Outstanding Loan Balance |
Post-Modification Outstanding Loan Balance |
||||||||||||||||||||||
Three Months Ended September 30 |
||||||||||||||||||||||||||||
Commercial |
|
$ | |
$ | |
$ | |
$ | ||||||||||||||||||||
Commercial real estate |
||||||||||||||||||||||||||||
Residential mortgages |
||||||||||||||||||||||||||||
Credit card |
||||||||||||||||||||||||||||
Other retail |
||||||||||||||||||||||||||||
Covered Loans |
– | – | – | |||||||||||||||||||||||||
Total loans, excluding loans purchased from GNMA mortgage pools |
||||||||||||||||||||||||||||
Loans purchased from GNMA mortgage pools |
||||||||||||||||||||||||||||
Total loans |
$ | $ | $ | $ | ||||||||||||||||||||||||
Nine Months Ended September 30 |
||||||||||||||||||||||||||||
Commercial |
$ | $ | $ | $ | ||||||||||||||||||||||||
Commercial real estate |
||||||||||||||||||||||||||||
Residential mortgages |
||||||||||||||||||||||||||||
Credit card |
||||||||||||||||||||||||||||
Other retail |
||||||||||||||||||||||||||||
Covered Loans |
– | – | – | |||||||||||||||||||||||||
Total loans, excluding loans purchased from GNMA mortgage pools |
||||||||||||||||||||||||||||
Loans purchased from GNMA mortgage pools |
||||||||||||||||||||||||||||
Total loans |
$ | $ | $ | $ |
46 |
U.S. Bancorp |
U.S. Bancorp |
47 |
2019 | 2018 | |||||||||||||||||||
(Dollars in Millions) | Number of Loans |
Amount Defaulted |
Number of Loans |
Amount Defaulted |
||||||||||||||||
Three Months Ended September 30 |
||||||||||||||||||||
Commercial |
$ | $ | ||||||||||||||||||
Commercial real estate |
||||||||||||||||||||
Residential mortgages |
||||||||||||||||||||
Credit card |
||||||||||||||||||||
Other retail |
||||||||||||||||||||
Total loans, excluding loans purchased from GNMA mortgage pools |
||||||||||||||||||||
Loans purchased from GNMA mortgage pools |
||||||||||||||||||||
Total loans |
$ | $ | ||||||||||||||||||
Nine Months Ended September 30 |
||||||||||||||||||||
Commercial |
$ | $ | ||||||||||||||||||
Commercial real estate |
||||||||||||||||||||
Residential mortgages |
||||||||||||||||||||
Credit card |
||||||||||||||||||||
Other retail |
||||||||||||||||||||
Covered loans |
– | – | – | |||||||||||||||||
Total loans, excluding loans purchased from GNMA mortgage pools |
||||||||||||||||||||
Loans purchased from GNMA mortgage pools |
||||||||||||||||||||
Total loans |
$ | $ |
Note 5 |
(Dollars in Millions) |
September 30, 2019 |
December 31, 2018 |
||||||
Lease receivables |
$ |
$ |
||||||
Unguaranteed residual values accruing to the lessor’s benefit |
||||||||
Total net investment in sales-type and direct financing leases |
$ |
$ |
48 |
U.S. Bancorp |
(Dollars in Millions) | Sales-type and direct financing leases |
Operating leases | ||||||
One Year or Less |
$ | $ | ||||||
Over One Through Two Years |
||||||||
Over Two Through Three Years |
||||||||
Over Three Through Four Years |
||||||||
Over Four Through Five Years |
||||||||
Thereafter |
||||||||
Total lease payments |
$ | |||||||
Amounts representing interest |
( |
) | ||||||
Lease receivables |
$ |
(Dollars in Millions) | Three Months Ended September 30, 2019 |
Nine Months Ended September 30, 2019 |
||||||
Cash paid for amounts included in the measurement of lease liabilities |
||||||||
Operating cash flows from operating leases |
$ | $ | ||||||
Operating cash flows from finance leases |
||||||||
Financing cash flows from finance leases |
||||||||
Right of use assets obtained in exchange for new operating lease liabilities |
||||||||
Right of use assets obtained in exchange for new finance lease liabilities |
Weighted-average remaining lease term of operating leases (in years) |
||||
Weighted-average remaining lease term of finance leases (in years) |
||||
Weighted-average discount rate of operating leases |
% | |||
Weighted-average discount rate of finance leases |
% |
U.S. Bancorp |
49 |
(Dollars in Millions) | Operating leases | Finance leases | ||||||
One Year or Less |
$ | $ | ||||||
Over One Through Two Years |
||||||||
Over Two Through Three Years |
||||||||
Over Three Through Four Years |
||||||||
Over Four Through Five Years |
||||||||
Thereafter |
||||||||
Total lease payments |
||||||||
Amounts representing interest |
( |
) | ( |
) | ||||
Lease liabilities |
$ | $ |
Note 6 |
Accounting for Transfers and Servicing of Financial Assets and Variable Interest Entities |
50 |
U.S. Bancorp |
(Dollars in Millions) | September 30, 2019 |
December 31, 2018 |
||||||
Investment carrying amount |
$ | $ | ||||||
Unfunded capital and other commitments |
||||||||
Maximum exposure to loss |
U.S. Bancorp |
51 |
Note 7 |
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
(Dollars in Millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Balance at beginning of period |
$ | $ | $ | $ | ||||||||||||
Rights purchased |
||||||||||||||||
Rights capitalized |
||||||||||||||||
Rights sold (a) |
( |
) | ( |
) | ||||||||||||
Changes in fair value of MSRs |
||||||||||||||||
Due to fluctuations in market interest rates ( b ) |
( |
) | ( |
) | ||||||||||||
Due to revised assumptions or models ( c ) |
||||||||||||||||
Other changes in fair value ( d ) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Balance at end of period |
$ | $ | $ | $ |
(a) |
MSRs sold in 2019 include those having a negative fair value, resulting from the related loans being severely delinquent. |
(b) |
Includes changes in MSR value associated with changes in market interest rates, including estimated prepayment rates and anticipated earnings on escrow deposits. |
(c) |
Includes changes in MSR value not caused by changes in market interest rates, such as changes in cost to service, ancillary income and option adjusted spread, as well as the impact of any model changes. |
(d) |
Primarily represents changes due to realization of expected cash flows over time (decay). |
September 30, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in Millions) | Down 100 bps |
Down 50 bps |
Down 25 bps |
Up 25 bps |
Up 50 bps |
Up 100 bps |
Down 100 bps |
Down 50 bps |
Down 25 bps |
Up 25 bps |
Up 50 bps |
Up 100 bps |
||||||||||||||||||||||||||||||||||||||||
MSR portfolio |
$ | ( |
) | $ | ( |
) | $ | ( |
) |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||||||||
Derivative instrument hedges |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||||
Net sensitivity |
$ | ( |
) | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) |
52 |
U.S. Bancorp |
September 30, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||||||||
(Dollars in Millions) | HFA | Government | Conventional (d) | Total | HFA | Government | Conventional (d) | Total | ||||||||||||||||||||||||||||
Servicing portfolio (a) |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Fair value |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Value (bps) (b) |
|
|||||||||||||||||||||||||||||||||||
Weighted-average servicing fees (bps) |
||||||||||||||||||||||||||||||||||||
Multiple (value/servicing fees) |
||||||||||||||||||||||||||||||||||||
Weighted-average note rate |
% | % | % | % | % | % | % | % | ||||||||||||||||||||||||||||
Weighted-average age (in years) |
||||||||||||||||||||||||||||||||||||
Weighted-average expected prepayment (constant prepayment rate) |
% | % | % | % | % | % | % | % | ||||||||||||||||||||||||||||
Weighted-average expected life (in years) |
||||||||||||||||||||||||||||||||||||
Weighted-average option adjusted spread (c) |
% | % | % | % | % | % | % | % |
(a) |
Represents principal balance of mortgages having corresponding MSR asset. |
(b) |
Calculated as fair value divided by the servicing portfolio. |
(c) |
Option adjusted spread is the incremental spread added to the risk-free rate to reflect optionality and other risk inherent in the MSRs. |
(d) |
Represents loans sold primarily to GSEs. |
Note 8 |
Preferred Stock |
September 30, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||||||||
(Dollars in Millions) |
Shares Issued and Outstanding |
Liquidation Preference |
Discount | Carrying Amount |
Shares Issued and Outstanding |
Liquidation Preference |
Discount | Carrying Amount |
||||||||||||||||||||||||||||
Series A |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Series B |
– | – | ||||||||||||||||||||||||||||||||||
Series F |
||||||||||||||||||||||||||||||||||||
Series H |
||||||||||||||||||||||||||||||||||||
Series I |
||||||||||||||||||||||||||||||||||||
Series J |
||||||||||||||||||||||||||||||||||||
Series K |
||||||||||||||||||||||||||||||||||||
Total preferred stock (a) |
$ | $ | $ | $ | $ | $ |
(a) |
The par value of all shares issued and outstanding at September 30, 2019 and December 31, 2018, was $ |
Note 9 |
Accumulated Other Comprehensive Income (Loss) |
Three Months Ended September 30 (Dollars in Millions) |
Unrealized Gains (Losses) on Investment Securities Available-For- Sale |
Unrealized Gains (Losses) on Investment Securities Transferred From Available-For-Sale to Held-To- Maturity |
Unrealized Gains (Losses) on Derivative Hedges |
Unrealized Gains (Losses) on Retirement Plans |
Foreign Currency Translation |
Total | ||||||||||||||||||
2019 |
||||||||||||||||||||||||
Balance at beginning of period |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||
Changes in unrealized gains and losses |
– | ( |
) | – | – | |||||||||||||||||||
Foreign currency translation adjustment (a) |
– | – | – | – | ||||||||||||||||||||
Reclassification to earnings of realized gains and losses |
( |
) | ( |
) | – | |||||||||||||||||||
Applicable income taxes |
( |
) | – | ( |
) | – | ( |
) | ||||||||||||||||
Balance at end of period |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||
2018 |
||||||||||||||||||||||||
Balance at beginning of period |
$ | ( |
) | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||
Changes in unrealized gains and losses |
( |
) | – | – | – | ( |
) | |||||||||||||||||
Foreign currency translation adjustment (a) |
– | – | – | – | ||||||||||||||||||||
Reclassification to earnings of realized gains and losses |
( |
) | ( |
) | ( |
) | – | |||||||||||||||||
Applicable income taxes |
– | ( |
) | ( |
) | ( |
) | |||||||||||||||||
Balance at end of period |
$ | ( |
) | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) |
(a) |
Represents the impact of changes in foreign currency exchange rates on the Company’s investment in foreign operations and related hedges. |
U.S. Bancorp |
53 |
Nine Months Ended September 30 (Dollars in Millions) |
Unrealized Gains (Losses) on Investment Securities Available-For- Sale |
Unrealized Gains (Losses) on Investment Securities Transferred From Available-For-Sale to Held-To- Maturity |
Unrealized Gains (Losses) on Derivative Hedges |
Unrealized Gains (Losses) on Retirement Plans |
Foreign Currency Translation |
Total | ||||||||||||||||||
2019 |
||||||||||||||||||||||||
Balance at beginning of period |
$ | ( |
) | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||
Changes in unrealized gains and losses |
( |
) | ||||||||||||||||||||||
Foreign currency translation adjustment (a) |
||||||||||||||||||||||||
Reclassification to earnings of realized gains and losses |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Applicable income taxes |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Balance at end of period |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||
2018 |
||||||||||||||||||||||||
Balance at beginning of period |
$ | ( |
) | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||
Revaluation of tax related balances (b) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Changes in unrealized gains and losses |
( |
) | – | ( |
) | – | ( |
) | ||||||||||||||||
Foreign currency translation adjustment (a) |
– | – | – | – | ||||||||||||||||||||
Reclassification to earnings of realized gains and losses |
( |
) | ( |
) | ( |
) | – | |||||||||||||||||
Applicable income taxes |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Balance at end of period |
$ | ( |
) | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) |
(a) |
Represents the impact of changes in foreign currency exchange rates on the Company’s investment in foreign operations and related hedges. |
(b) |
Reflects the adoption of new accounting guidance on January 1, 2018 to reclassify the impact of the reduced federal statutory rate for corporations included in 2017 tax reform legislation from accumulated other comprehensive income to retained earnings. |
Impact to Net Income |
Affected Line Item in the Consolidated Statement of Income | |||||||||||||||||||||
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||||||||
(Dollars in Millions) |
2019 |
2018 |
2019 |
2018 |
||||||||||||||||||
Unrealized gains (losses) on investment securities available-for-sale |
||||||||||||||||||||||
Realized gains (losses) on sale of investment securities |
$ |
$ |
$ |
$ |
Total securities gains (losses), net | |||||||||||||||||
( |
) |
( |
) |
( |
) |
( |
) |
Applicable income taxes | ||||||||||||||
Net-of-tax | ||||||||||||||||||||||
Unrealized gains (losses) on investment securities transferred from |
||||||||||||||||||||||
available-for-sale to held-to-maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of unrealized gains |
Interest income | |||||||||||||||||||||
– |
( |
) |
( |
) |
Applicable income taxes | |||||||||||||||||
Net-of-tax | ||||||||||||||||||||||
Unrealized gains (losses) on derivative hedges |
||||||||||||||||||||||
Realized gains (losses) on derivative hedges |
( |
) |
Interest expense | |||||||||||||||||||
( |
) |
( |
) |
( |
) |
Applicable income taxes | ||||||||||||||||
( |
) |
– |
Net-of-tax | |||||||||||||||||||
Unrealized gains (losses) on retirement plans |
||||||||||||||||||||||
Actuarial gains (losses) and prior service cost (credit) amortization |
( |
) |
( |
) |
( |
) |
( |
) |
Other noninterest expense | |||||||||||||
Applicable income taxes | ||||||||||||||||||||||
( |
) |
( |
) |
( |
) |
( |
) |
Net-of-tax | ||||||||||||||
Total impact to net income |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
54 |
U.S. Bancorp |
Note 10 |
Earnings Per Share |
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||||||
(Dollars and Shares in Millions, Except Per Share Data) | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Net income attributable to U.S. Bancorp |
$ | $ | $ | $ | ||||||||||||||||
Preferred dividends |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Earnings allocated to participating stock awards |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Net income applicable to U.S. Bancorp common shareholders |
$ | $ | $ | $ | ||||||||||||||||
Average common shares outstanding |
||||||||||||||||||||
Net effect of the exercise and assumed purchase of stock awards |
||||||||||||||||||||
Average diluted common shares outstanding |
||||||||||||||||||||
Earnings per common share |
$ | $ | $ | $ | ||||||||||||||||
Diluted earnings per common share |
$ | $ | $ | $ |
Note 11 |
Employee Benefits |
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||||||||||
Pension Plans | Postretirement Welfare Plan |
Pension Plans | Postretirement Welfare Plan |
|||||||||||||||||||||||||||||||||
(Dollars in Millions) | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||||||
Service cost |
$ | $ | $ | – | $ | – | $ | $ | $ | – | $ | – | ||||||||||||||||||||||||
Interest cost |
– | |||||||||||||||||||||||||||||||||||
Expected return on plan assets |
( |
) | ( |
) | ( |
) | – | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||
Prior service cost (credit) amortization |
– | – | ( |
) | ( |
) | – | – | ( |
) | ( |
) | ||||||||||||||||||||||||
Actuarial loss (gain) amortization |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Net periodic benefit cost (a) |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ | ( |
) | $ | ( |
) |
(a) |
Service cost is included in employee benefits expense on the Consolidated Statement of Income. All other components are included in other noninterest expense on the Consolidated Statement of Income. |
Note 12 |
Income Taxes |
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||||||
(Dollars in Millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Federal |
||||||||||||||||||||
Current |
$ | $ | $ | $ | ||||||||||||||||
Deferred |
( |
) | ( |
) | ( |
) | ||||||||||||||
Federal income tax |
||||||||||||||||||||
State |
||||||||||||||||||||
Current |
||||||||||||||||||||
Deferred |
( |
) | ( |
) | ( |
) | ||||||||||||||
State income tax |
||||||||||||||||||||
Total income tax provision |
$ | $ | $ | $ |
U.S. Bancorp |
55 |
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||||||
(Dollars in Millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Tax at statutory rate |
$ | $ | $ | $ | ||||||||||||||||
State income tax, at statutory rates, net of federal tax benefit |
||||||||||||||||||||
Tax effect of |
||||||||||||||||||||
Tax credits and benefits, net of related expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Exam resolutions |
– | – | ( |
) | ( |
) | ||||||||||||||
Tax-exempt income |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Noncontrolling interests |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Other items |
( |
) | ||||||||||||||||||
Applicable income taxes |
$ | $ | $ | $ |
Note 13 |
Derivative Instruments |
56 |
U.S. Bancorp |
U.S. Bancorp |
57 |
Asset Derivatives | Liability Derivatives | |||||||||||||||||||||||||||
(Dollars in Millions) | Notional Value |
Fair Value |
Weighted- Average Remaining Maturity In |
Notional Value |
Fair Value |
Weighted- Average Remaining Maturity In Years |
||||||||||||||||||||||
September 30, 2019 |
||||||||||||||||||||||||||||
Fair value hedges |
||||||||||||||||||||||||||||
Interest rate contracts |
||||||||||||||||||||||||||||
Receive fixed/pay floating swaps |
$ | $ | – | $ | $ | – | ||||||||||||||||||||||
Cash flow hedges |
||||||||||||||||||||||||||||
Interest rate contracts |
||||||||||||||||||||||||||||
Pay fixed/receive floating swaps |
– | |||||||||||||||||||||||||||
Net investment hedges |
||||||||||||||||||||||||||||
Foreign exchange forward contracts |
– | – | – |
|||||||||||||||||||||||||
Other economic hedges |
||||||||||||||||||||||||||||
Interest rate contracts |
||||||||||||||||||||||||||||
Futures and forwards |
||||||||||||||||||||||||||||
Buy |
||||||||||||||||||||||||||||
Sell |
||||||||||||||||||||||||||||
Options |
||||||||||||||||||||||||||||
Purchased |
– | |||||||||||||||||||||||||||
Written |
||||||||||||||||||||||||||||
Receive fixed/pay floating swaps |
– | – | ||||||||||||||||||||||||||
Pay fixed/receive floating swaps |
– | – | ||||||||||||||||||||||||||
Foreign exchange forward contracts |
||||||||||||||||||||||||||||
Equity contracts |
||||||||||||||||||||||||||||
Other (a) |
||||||||||||||||||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||||||||||||||
December 31, 2018 |
||||||||||||||||||||||||||||
Cash flow hedges |
||||||||||||||||||||||||||||
Interest rate contracts |
||||||||||||||||||||||||||||
Pay fixed/receive floating swaps |
$ | $ | $ | $ | – | |||||||||||||||||||||||
Net investment hedges |
||||||||||||||||||||||||||||
Foreign exchange forward contracts |
||||||||||||||||||||||||||||
Other economic hedges |
||||||||||||||||||||||||||||
Interest rate contracts |
||||||||||||||||||||||||||||
Futures and forwards |
||||||||||||||||||||||||||||
Buy |
||||||||||||||||||||||||||||
Sell |
||||||||||||||||||||||||||||
Options |
||||||||||||||||||||||||||||
Purchased |
– | – | – | |||||||||||||||||||||||||
Written |
– | |||||||||||||||||||||||||||
Receive fixed/pay floating swaps |
– | – | ||||||||||||||||||||||||||
Pay fixed/receive floating swaps |
– | – | ||||||||||||||||||||||||||
Foreign exchange forward contracts |
||||||||||||||||||||||||||||
Equity contracts |
||||||||||||||||||||||||||||
Other (a) |
– | |||||||||||||||||||||||||||
Total |
$ | $ | $ | $ |
(a) |
Includes derivative liability swap agreements related to the sale of a portion of the Company’s Class B common shares of Visa Inc. The Visa swap agreements had a total notional value, fair value and weighted-average remaining maturity of $ |
58 |
U.S. Bancorp |
Asset Derivatives | Liability Derivatives | |||||||||||||||||||||||||||
(Dollars in Millions) | Notional Value |
Fair Value |
Weighted- Average Remaining Maturity In Years |
Notional Value |
Fair Value |
Weighted- Average Remaining Maturity In Years |
||||||||||||||||||||||
September 30, 2019 |
||||||||||||||||||||||||||||
Interest rate contracts |
||||||||||||||||||||||||||||
Receive fixed/pay floating swaps |
$ | $ | $ | $ | ||||||||||||||||||||||||
Pay fixed/receive floating swaps |
||||||||||||||||||||||||||||
Other (a) |
||||||||||||||||||||||||||||
Options |
||||||||||||||||||||||||||||
Purchased |
||||||||||||||||||||||||||||
Written |
||||||||||||||||||||||||||||
Futures |
||||||||||||||||||||||||||||
Buy |
– | – | ||||||||||||||||||||||||||
Sell |
– | – | – | |||||||||||||||||||||||||
Foreign exchange rate contracts |
||||||||||||||||||||||||||||
Forwards, spots and swaps |
||||||||||||||||||||||||||||
Options |
||||||||||||||||||||||||||||
Purchased |
– | – | – | |||||||||||||||||||||||||
Written |
– | – | – | |||||||||||||||||||||||||
Credit contracts |
||||||||||||||||||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||||||||||||||
December 31, 2018 |
||||||||||||||||||||||||||||
Interest rate contracts |
||||||||||||||||||||||||||||
Receive fixed/pay floating swaps |
$ | $ | $ | $ | ||||||||||||||||||||||||
Pay fixed/receive floating swaps |
||||||||||||||||||||||||||||
Other (a) |
||||||||||||||||||||||||||||
Options |
||||||||||||||||||||||||||||
Purchased |
||||||||||||||||||||||||||||
Written |
||||||||||||||||||||||||||||
Futures |
||||||||||||||||||||||||||||
Buy |
– | – | – | – | ||||||||||||||||||||||||
Sell |
– | – | – | |||||||||||||||||||||||||
Foreign exchange rate contracts |
||||||||||||||||||||||||||||
Forwards, spots and swaps |
||||||||||||||||||||||||||||
Options |
||||||||||||||||||||||||||||
Purchased |
– | – | – | |||||||||||||||||||||||||
Written |
– | – | – | |||||||||||||||||||||||||
Credit contracts |
– | |||||||||||||||||||||||||||
Total |
$ | $ | $ | $ |
(a) |
Primarily represents floating rate interest rate swaps that pay based on differentials between specified interest rate indexes. |
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||||||||||
Gains (Losses) Recognized in Other Comprehensive Income (Loss) |
Gains (Losses) Reclassified from Other Comprehensive Income (Loss) into Earnings |
Gains (Losses) Recognized in Other Comprehensive Income (Loss) |
Gains (Losses) Reclassified from Other Comprehensive Income (Loss) into Earnings |
|||||||||||||||||||||||||||||||||
(Dollars in Millions) | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||||||
Asset and Liability Management Positions |
||||||||||||||||||||||||||||||||||||
Cash flow hedges |
||||||||||||||||||||||||||||||||||||
Interest rate contracts |
$ | ( |
) | $ | $ | ( |
) | $ | $ | ( |
) | $ | $ | $ | – | |||||||||||||||||||||
Net investment hedges |
||||||||||||||||||||||||||||||||||||
Foreign exchange forward contracts |
– | – | – | – | – | |||||||||||||||||||||||||||||||
Non-derivative debt instruments |
– | – | – | – |
Note: |
The Company does not exclude components from effectiveness testing for cash flow and net investment hedges. |
U.S. Bancorp |
59 |
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||||||
(Dollars in Millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Total amount of interest expense presented in the Consolidated Statement of Income |
$ |
$ |
$ | $ | ||||||||||||||||
Asset and Liability Management Positions |
||||||||||||||||||||
Fair value hedges |
||||||||||||||||||||
Interest rate contract derivatives |
( |
) | – | ( |
) | |||||||||||||||
Hedged items |
– | ( |
) | |||||||||||||||||
Cash Flow hedges |
||||||||||||||||||||
Interest rate contract derivatives |
( |
) | ( |
) | ( |
) |
Note: |
The Company does not exclude components from effectiveness testing for fair value and cash flow hedges. The Company did not reclassify gains or losses into earnings as a result of the discontinuance of cash flow hedges during the three and nine months ended September 30, 2019 and 2018. |
Carrying Amount of the Hedged Assets (Liabilities) |
Cumulative Hedging Adjustment (a) | |||||||||||||||||||
(Dollars in Millions) | September 30, 2019 | December 31, 2018 | September 30, 2019 | December 31, 2018 | ||||||||||||||||
Line Item in the Consolidated Balance Sheet |
||||||||||||||||||||
Long-term Debt |
$ | $ | – | $ | $ | ( |
) |
(a) |
The cumulative hedging adjustment related to discontinued hedging relationships at September 30, 2019 and December 31, 2018 was $( |
Location of Gains (Losses) Recognized in Earnings |
|
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||||||||||||
(Dollars in Millions) | |
2019 | 2018 | 2019 |
2018 |
|||||||||||||||||||||||
Asset and Liability Management Positions |
||||||||||||||||||||||||||||
Other economic hedges |
||||||||||||||||||||||||||||
Interest rate contracts |
||||||||||||||||||||||||||||
Futures and forwards |
Mortgage banking revenue | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||
Purchased and written options |
Mortgage banking revenue | |||||||||||||||||||||||||||
Swaps |
Mortgage banking revenue | ( |
) | ( |
) | |||||||||||||||||||||||
Foreign exchange forward contracts |
Other noninterest income | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||
Equity contracts |
Compensation expense | – | – | ( |
) | ( |
) | |||||||||||||||||||||
Other |
Other noninterest income | – | – | – | ||||||||||||||||||||||||
Customer-Related Positions |
||||||||||||||||||||||||||||
Interest rate contracts |
||||||||||||||||||||||||||||
Swaps |
Commercial products revenue | |||||||||||||||||||||||||||
Purchased and written options |
Commercial products revenue | ( |
) | |||||||||||||||||||||||||
Futures |
Commercial products revenue | ( |
) | ( |
) | |||||||||||||||||||||||
Foreign exchange rate contracts |
||||||||||||||||||||||||||||
Forwards, spots and swaps |
Commercial products revenue | |||||||||||||||||||||||||||
Purchased and written options |
Commercial products revenue | – | – | |||||||||||||||||||||||||
Credit contracts |
Commercial products revenue | ( |
) | ( |
) |
60 |
U.S. Bancorp |
Note 14 |
Netting Arrangements for Certain Financial Instruments and Securities Financing Activities | |
U.S. Bancorp |
61 |
(Dollars in Millions) | Overnight and Continuous |
Less Than 30 Days |
30-89 Days |
Greater Than 90 Days |
Total | |||||||||||||||
September 30, 2019 |
||||||||||||||||||||
Repurchase agreements |
||||||||||||||||||||
U.S. Treasury and agencies |
$ |
|
|
$ |
– |
|
$ |
– |
|
$ |
– |
|
$ |
|
| |||||
Residential agency mortgage-backed securities |
|
|
|
|
– |
|
|
– |
|
|
– |
|
|
|
| |||||
Corporate debt securities |
|
|
|
|
– |
|
|
– |
|
|
– |
|
|
|
| |||||
Total repurchase agreements |
|
|
|
|
– |
|
|
– |
|
|
– |
|
|
|
| |||||
Securities loaned |
||||||||||||||||||||
Corporate debt securities |
|
|
|
|
– |
|
|
– |
|
|
– |
|
|
|
| |||||
Total securities loaned |
|
|
|
|
– |
|
|
– |
|
|
– |
|
|
|
| |||||
Gross amount of recognized liabilities |
$ |
|
|
$ |
– |
|
$ |
– |
|
$ |
– |
|
$ |
|
| |||||
December 31, 2018 |
||||||||||||||||||||
Repurchase agreements |
||||||||||||||||||||
U.S. Treasury and agencies |
$ |
|
|
$ |
– |
|
$ |
– |
|
$ |
– |
|
$ |
|
| |||||
Residential agency mortgage-backed securities |
|
|
|
|
– |
|
|
|
|
|
|
|
|
|
| |||||
Corporate debt securities |
|
|
|
|
– |
|
|
– |
|
|
– |
|
|
|
| |||||
Total repurchase agreements |
|
|
|
|
– |
|
|
|
|
|
|
|
|
|
| |||||
Securities loaned |
||||||||||||||||||||
Corporate debt securities |
|
|
|
|
– |
|
|
– |
|
|
– |
|
|
|
| |||||
Total securities loaned |
|
|
|
|
– |
|
|
– |
|
|
– |
|
|
|
| |||||
Gross amount of recognized liabilities |
$ |
|
|
$ |
– |
|
$ |
|
|
$ |
|
|
$ |
|
|
Gross Recognized Assets |
Gross Amounts Offset on the Consolidated Balance Sheet (a) |
Net Amounts Presented on the Consolidated Balance Sheet |
Gross Amounts Not Offset on the Consolidated Balance Sheet |
|||||||||||||||||||||
(Dollars in Millions) |
Financial Instruments (b) |
Collateral Received (c) |
Net Amount |
|||||||||||||||||||||
September 30, 2019 |
||||||||||||||||||||||||
Derivative assets (d) |
$ |
|
|
$ |
( |
) |
$ |
|
|
$ |
( |
) |
$ |
( |
) |
$ |
|
| ||||||
Reverse repurchase agreements |
|
|
|
|
– |
|
|
|
|
|
( |
) |
|
( |
) |
|
– |
|||||||
Securities borrowed |
|
|
|
|
– |
|
|
|
|
|
– |
|
|
( |
) |
|
|
|||||||
Total |
$ |
|
|
$ |
( |
) |
$ |
|
|
$ |
( |
) |
$ |
( |
) |
$ |
|
| ||||||
December 31, 2018 |
||||||||||||||||||||||||
Derivative assets (d) |
$ |
|
|
$ |
( |
) |
$ |
|
|
$ |
( |
) |
$ |
( |
) |
$ |
|
| ||||||
Reverse repurchase agreements |
|
|
|
|
– |
|
|
|
|
|
( |
) |
|
( |
) |
|
– |
| ||||||
Securities borrowed |
|
|
|
|
– |
|
|
|
|
|
– |
|
|
( |
) |
|
|
| ||||||
Total |
$ |
|
|
$ |
( |
) |
$ |
|
|
$ |
( |
) |
$ |
( |
) |
$ |
|
|
(a) |
Includes $ |
(b) |
For derivative assets this includes any derivative liability fair values that could be offset in the event of counterparty default; for reverse repurchase agreements this includes any repurchase agreement payables that could be offset in the event of counterparty default; for securities borrowed this includes any securities loaned payables that could be offset in the event of counterparty default. |
(c) |
Includes the fair value of securities received by the Company from the counterparty. These securities are not included on the Consolidated Balance Sheet unless the counterparty defaults. |
(d) |
Excludes $ |
62 |
U.S. Bancorp |
(Dollars in Millions) | Gross Recognized Liabilities |
Gross Amounts Offset on the Consolidated Balance Sheet (a) |
|
Net Amounts Presented on the Consolidated Balance Sheet |
Gross Amounts Not Offset on the Consolidated Balance Sheet |
|
Net Amount | |||||||||||||||||
|
Financial Instruments (b) |
|
Collateral Pledged (c) |
|||||||||||||||||||||
September 30, 2019 |
||||||||||||||||||||||||
Derivative liabilities (d) |
$ |
|
|
$ |
( |
) |
$ |
|
|
$ |
( |
) |
$ |
– |
$ |
|
| |||||||
Repurchase agreements |
|
|
|
|
– |
|
|
|
|
|
( |
) |
|
( |
) |
|
– |
| ||||||
Securities loaned |
|
|
|
|
– |
|
|
|
|
|
– |
|
|
( |
) |
|
|
| ||||||
Total |
$ |
|
|
$ |
( |
) |
$ |
|
|
$ |
( |
) |
$ |
( |
) |
$ |
|
| ||||||
December 31, 2018 |
||||||||||||||||||||||||
Derivative liabilities (d) |
$ |
|
|
$ |
( |
) |
$ |
|
|
$ |
( |
) |
$ |
– |
|
$ |
|
| ||||||
Repurchase agreements |
|
|
|
|
– |
|
|
|
|
|
( |
) |
|
( |
) |
|
– |
| ||||||
Securities loaned |
|
|
|
|
– |
|
|
|
|
|
– |
|
|
( |
) |
|
|
| ||||||
Total |
$ |
|
|
$ |
( |
) |
$ |
|
|
$ |
( |
) |
$ |
( |
) |
$ |
|
|
(a) |
Includes $ |
(b) |
For derivative liabilities this includes any derivative asset fair values that could be offset in the event of counterparty default; for repurchase agreements this includes any reverse repurchase agreement receivables that could be offset in the event of counterparty default; for securities loaned this includes any securities borrowed receivables that could be offset in the event of counterparty default. |
(c) |
Includes the fair value of securities pledged by the Company to the counterparty. These securities are included on the Consolidated Balance Sheet unless the Company defaults. |
(d) |
Excludes $ |
Note 15 |
Fair Values of Assets and Liabilities |
• | Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 1 includes U.S. Treasury securities, as well as exchange-traded instruments. |
• | Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 includes debt securities that are traded less frequently than exchange-traded instruments and which are typically valued using third party pricing services; derivative contracts and other assets and liabilities, including securities, whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data; and MLHFS whose values are determined using quoted prices for similar assets or pricing models with inputs that are observable in the market or can be corroborated by observable market data. |
• | Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category includes MSRs and certain derivative contracts. |
U.S. Bancorp |
63 |
64 |
U.S. Bancorp |
Minimum | Maximum | Weighted - Average (a) |
||||||||||
Expected prepayment |
% | % | % | |||||||||
Option adjusted spread |
(a) |
Determined based on the relative fair value of the related mortgage loans serviced. |
Minimum | Maximum | Weighted - Average (a) |
||||||||||
Expected loan close rate |
% | % | % | |||||||||
Inherent MSR value (basis points per loan) |
(a) |
Determined based on the relative fair value of the related mortgage loans. |
U.S. Bancorp |
65 |
(Dollars in Millions) | Level 1 | Level 2 | Level 3 | Netting | Total | |||||||||||||||
September 30, 2019 |
||||||||||||||||||||
Available-for-sale |
||||||||||||||||||||
U.S. Treasury and agencies |
$ | $ | $ | – | $ | – | $ | |||||||||||||
Mortgage-backed securities |
||||||||||||||||||||
Residential agency |
– | – | – | |||||||||||||||||
Commercial agency |
– | – | – | |||||||||||||||||
Other asset-backed securities |
– | – | – | |||||||||||||||||
Obligations of state and political subdivisions |
– | – | – | |||||||||||||||||
Obligations of foreign governments |
|
|
– |
|
|
|
|
|
|
|
– |
|
|
|
– |
|
|
|
|
|
Total available-for-sale |
– | – | ||||||||||||||||||
Mortgage loans held for sale |
– | – | – | |||||||||||||||||
Mortgage servicing rights |
– | – | – | |||||||||||||||||
Derivative assets |
( |
) | ||||||||||||||||||
Other assets |
– | – | ||||||||||||||||||
Total |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||
Derivative liabilities |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||
Short-term borrowings and other liabilities (a) |
– | – | ||||||||||||||||||
Total |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||
December 31, 2018 |
||||||||||||||||||||
Available-for-sale U.S. Treasury and agencies |
$ | $ | $ | – | $ | – | $ | |||||||||||||
Mortgage-backed securities |
||||||||||||||||||||
Residential agency |
– | – | – | |||||||||||||||||
Commercial agency |
– | – | – | |||||||||||||||||
Other asset-backed securities |
– | – | – | |||||||||||||||||
Obligations of state and political subdivisions |
– | – | – | |||||||||||||||||
Total available-for-sale |
– | – | ||||||||||||||||||
Mortgage loans held for sale |
– | – | – | |||||||||||||||||
Mortgage servicing rights |
– | – | – | |||||||||||||||||
Derivative assets |
– | ( |
) | |||||||||||||||||
Other assets |
– | – | ||||||||||||||||||
Total |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||
Derivative liabilities |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||
Short-term borrowings and other liabilities (a) |
– | – | ||||||||||||||||||
Total |
$ | $ | $ | $ | ( |
) | $ |
Note: |
Excluded from the table above are equity investments without readily determinable fair values. The Company has elected to carry these investments at historical cost, adjusted for impairment and any changes resulting from observable price changes for identical or similar investments of the issuer. The aggregate carrying amount of these equity investments was $ |
(a) |
Primarily represents the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance. |
66 |
U.S. Bancorp |
(Dollars in Millions) |
Beginning of Period Balance |
Net Gains (Losses) Included in Net Income |
Purchases |
Sales |
Issuances |
Settlements |
End of Period Balance |
Net Change in Unrealized Gains (Losses) Relating to Assets and Liabilities Held at End of Period |
||||||||||||||||||||||||
2019 |
||||||||||||||||||||||||||||||||
Mortgage servicing rights |
$ |
$ |
( |
) (a) |
$ |
$ |
$ |
(c) |
$ |
– |
$ |
$ |
( |
) (a) | ||||||||||||||||||
Net derivative assets and liabilities |
(b) |
( |
) |
– |
( |
) |
(d) | |||||||||||||||||||||||||
2018 |
||||||||||||||||||||||||||||||||
Mortgage servicing rights |
$ |
$ |
( |
) (a) |
$ |
$ |
( |
) |
$ |
(c) |
$ |
– |
$ |
$ |
( |
) (a) | ||||||||||||||||
Net derivative assets and liabilities |
( |
) |
( |
) (e) |
( |
) |
– |
( |
) |
( |
) |
( |
) (f) |
(a) |
Included in mortgage banking revenue. |
(b) |
Approximately $ |
(c) |
Represents MSRs capitalized during the period. |
(d) |
Approximately $ |
(e) |
Approximately $( |
(f) |
Approximately $( |
(Dollars in Millions) | Beginning of Period Balance |
Net Gains (Losses) Included in Net Income |
Purchases | Sales | Issuances | Settlements | End of Period Balance |
Net Change in Unrealized Gains (Losses) Relating to Assets and Liabilities Held at End of Period |
||||||||||||||||||||||||
2019 |
||||||||||||||||||||||||||||||||
Mortgage servicing rights |
$ | $ | ( |
) (a) | $ | $ | $ | (c) | $ | – | $ | $ | ( |
) (a) | ||||||||||||||||||
Net derivative assets and liabilities |
(b) | ( |
) | – | ( |
) | (d) | |||||||||||||||||||||||||
2018 |
||||||||||||||||||||||||||||||||
Mortgage servicing rights |
$ | $ | ( |
) (a) | $ | $ | ( |
) | $ | (c) | $ | – | $ | $ | ( |
) | ||||||||||||||||
Net derivative assets and liabilities |
( |
) (e) | ( |
) | – | ( |
) | ( |
) | ( |
) |
(a) |
Included in mortgage banking revenue. |
(b) |
Approximately $ |
(c) |
Represents MSRs capitalized during the period. |
(d) |
Approximately $ b illion included in other noninterest income and $ |
(e) |
Approximately $( |
(f) |
Approximately $( |
September 30, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||||||||
(Dollars in Millions) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||
Loans (a) |
$ | – | $ | – | $ | $ | $ | – | $ | – | $ | $ | ||||||||||||||||||||||||
Other assets (b) |
– | – | – | – |
(a) |
Represents the carrying value of loans for which adjustments were based on the fair value of the collateral, excluding loans fully charged-off. |
(b) |
Primarily represents the fair value of foreclosed properties that were measured at fair value based on an appraisal or broker price opinion of the collateral subsequent to their initial acquisition. |
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||||||
(Dollars in Millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Loans (a) |
$ |
$ |
|
|
$ |
$ |
||||||||||||||
Other assets (b) |
(a) |
Represents write-downs of loans which were based on the fair value of the collateral, excluding loans fully charged-off. |
(b) |
Primarily represents related losses of foreclosed properties that were measured at fair value subsequent to their initial acquisition. |
U.S. Bancorp |
67 |
September 30, 2019 | December 31, 2018 | |||||||||||||||||||||||||||
(Dollars in Millions) | Fair Value Carrying Amount |
Aggregate Unpaid Principal |
Carrying Amount Over (Under) Unpaid Principal |
Fair Value Carrying Amount |
Aggregate Unpaid Principal |
Carrying Amount Over (Under) Unpaid Principal |
||||||||||||||||||||||
Total loans |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||||||
Nonaccrual loans |
– | – | ||||||||||||||||||||||||||
Loans 90 days or more past due |
– | – | – | – | – | – |
September 30, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Amount |
Fair Value | Carrying Amount |
Fair Value | |||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in Millions) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||||||||||||||
Financial Assets |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and due from banks |
$ | $ | $ | – | $ | – | $ | $ | $ | $ | – | $ | – | $ | ||||||||||||||||||||||||||||||||||||||
Federal funds sold and securities purchased under resale agreements |
– | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||
Investment securities held-to-maturity |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans held for sale (a) |
– | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||
Loans |
– | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||
Other |
– | – | ||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Liabilities |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Time deposits |
– | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||
Short-term borrowings (b) |
– | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt |
– | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||
Other |
– | – | – |
(a) |
Excludes mortgages held for sale for which the fair value option under applicable accounting guidance was elected. |
(b) |
Excludes the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance. |
Note 16 |
Guarantees and Contingent Liabilities |
68 |
U.S. Bancorp |
(Dollars in Millions) | Collateral Held |
Carrying Amount |
Maximum Potential Future Payments |
|||||||||
Standby letters of credit |
$ | — | $ | $ | ||||||||
Third party borrowing arrangements |
— | — | ||||||||||
Securities lending indemnifications |
— | |||||||||||
Asset sales |
— | (a) | ||||||||||
Merchant processing |
||||||||||||
Tender option bond program guarantee |
— | |||||||||||
Minimum revenue guarantees |
— | — | ||||||||||
Other |
— |
(a) |
The maximum potential future payments do not include loan sales where the Company provides standard representation and warranties to the buyer against losses related to loan underwriting documentation defects that may have existed at the time of sale that generally are identified after the occurrence of a triggering event such as delinquency. For these types of loan sales, the maximum potential future payments is generally the unpaid principal balance of loans sold measured at the end of the current reporting period. Actual losses will be significantly less than the maximum exposure, as only a fraction of loans sold will have a representation and warranty breach, and any losses on repurchase would generally be mitigated by any collateral held against the loans. |
U.S. Bancorp |
69 |
70 |
U.S. Bancorp |
Note 17 |
Subsequent Events |
U.S. Bancorp |
71 |
For the Three Months Ended September 30 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in Millions) (Unaudited) |
Average Balances |
Interest | Yields and Rates |
Average Balances |
Interest | Yields and Rates |
% Change Average Balances |
|||||||||||||||||||||||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment securities |
$ | 117,213 | $ | 748 | 2.55 | % | $ | 113,547 | $ | 677 | 2.38 | % | 3.2 | % | ||||||||||||||||||||||||||||||||||||||
Loans held for sale |
4,476 | 48 | 4.24 | 3,109 | 36 | 4.64 | 44.0 | |||||||||||||||||||||||||||||||||||||||||||||
Loans (b) |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial |
103,660 | 1,063 | 4.07 | 99,048 | 986 | 3.95 | 4.7 | |||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate |
38,990 | 473 | 4.81 | 39,542 | 480 | 4.82 | (1.4 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Residential mortgages |
68,608 | 665 | 3.87 | 62,042 | 588 | 3.79 | 10.6 | |||||||||||||||||||||||||||||||||||||||||||||
Credit card |
23,681 | 686 | 11.50 | 21,774 | 650 | 11.84 | 8.8 | |||||||||||||||||||||||||||||||||||||||||||||
Other retail |
57,497 | 682 | 4.70 | 55,903 | 622 | 4.42 | 2.9 | |||||||||||||||||||||||||||||||||||||||||||||
Covered loans |
— | — | — | 2,756 | 44 | 6.35 | * | |||||||||||||||||||||||||||||||||||||||||||||
Total loans |
292,436 | 3,569 | 4.85 | 281,065 | 3,370 | 4.76 | 4.0 | |||||||||||||||||||||||||||||||||||||||||||||
Other earning assets |
21,548 | 100 | 1.85 | 17,456 | 72 | 1.64 | 23.4 | |||||||||||||||||||||||||||||||||||||||||||||
Total earning assets |
435,673 | 4,465 | 4.08 | 415,177 | 4,155 | 3.98 | 4.9 | |||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses |
(4,021 | ) | (3,930 | ) | (2.3 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gain (loss) on investment securities |
426 | (1,686 | ) | * | ||||||||||||||||||||||||||||||||||||||||||||||||
Other assets |
49,376 | 47,355 | 4.3 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total assets |
$ | 481,454 | $ | 456,916 | 5.4 | |||||||||||||||||||||||||||||||||||||||||||||||
Liabilities and Shareholders’ Equity |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing deposits |
$ | 74,594 | $ | 77,192 | (3.4 | )% | ||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest checking |
72,007 | 56 | .31 | 69,330 | 37 | .21 | 3.9 | |||||||||||||||||||||||||||||||||||||||||||||
Money market savings |
114,475 | 447 | 1.55 | 100,688 | 286 | 1.13 | 13.7 | |||||||||||||||||||||||||||||||||||||||||||||
Savings accounts |
46,348 | 30 | .25 | 44,848 | 17 | .14 | 3.3 | |||||||||||||||||||||||||||||||||||||||||||||
Time deposits |
42,509 | 211 | 1.97 | 38,063 | 151 | 1.58 | 11.7 | |||||||||||||||||||||||||||||||||||||||||||||
Total interest-bearing deposits |
275,339 | 744 | 1.07 | 252,929 | 491 | .77 | 8.9 | |||||||||||||||||||||||||||||||||||||||||||||
Short-term borrowings |
18,597 | 100 | 2.13 | 22,186 | 106 | 1.90 | (16.2 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Long-term debt |
42,691 | 315 | 2.93 | 39,701 | 277 | 2.77 | 7.5 | |||||||||||||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities |
336,627 | 1,159 | 1.37 | 314,816 | 874 | 1.10 | 6.9 | |||||||||||||||||||||||||||||||||||||||||||||
Other liabilities |
16,312 | 14,140 | 15.4 | |||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders’ equity |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred equity |
5,984 | 5,714 | 4.7 | |||||||||||||||||||||||||||||||||||||||||||||||||
Common equity |
47,308 | 44,424 | 6.5 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total U.S. Bancorp shareholders’ equity |
53,292 | 50,138 | 6.3 | |||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interests |
629 | 630 | (.2 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Total equity |
53,921 | 50,768 | 6.2 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and equity |
$ | 481,454 | $ | 456,916 | 5.4 | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest income |
$ | 3,306 | $ | 3,281 | ||||||||||||||||||||||||||||||||||||||||||||||||
Gross interest margin |
2.71 | % | 2.88 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Gross interest margin without taxable-equivalent increments |
2.69 | % | 2.85 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Percent of Earning Assets |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest income |
4.08 | % | 3.98 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense |
1.06 | .83 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest margin |
3.02 | % | 3.15 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Net interest margin without taxable-equivalent increments |
3.00 | % | 3.12 | % |
* |
Not meaningful |
(a) |
Interest and rates are presented on a fully taxable-equivalent basis based on a federal income tax rate of 21 percent. |
(b) |
Interest income and rates on loans include loan fees. Nonaccrual loans are included in average loan balances. |
72 |
U.S. Bancorp |
For the Nine Months Ended September 30 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in Millions) (Unaudited) |
Average Balances |
Interest | Yields and Rates |
Average Balances |
Interest | Yields and Rates |
% Change Average Balances |
|||||||||||||||||||||||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment securities |
$ | 115,628 | $ | 2,227 | 2.57 | % | $ | 113,873 | $ | 1,971 | 2.31 | % | 1.5 | % | ||||||||||||||||||||||||||||||||||||||
Loans held for sale |
3,265 | 107 | 4.36 | 3,262 | 108 | 4.41 | .1 | |||||||||||||||||||||||||||||||||||||||||||||
Loans (b) |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial |
102,957 | 3,238 | 4.20 | 98,295 | 2,785 | 3.79 | 4.7 | |||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate |
39,274 | 1,474 | 5.02 | 39,918 | 1,379 | 4.62 | (1.6 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Residential mortgages |
67,019 | 1,980 | 3.94 | 61,023 | 1,714 | 3.75 | 9.8 | |||||||||||||||||||||||||||||||||||||||||||||
Credit card |
23,040 | 2,003 | 11.63 | 21,428 | 1,876 | 11.70 | 7.5 | |||||||||||||||||||||||||||||||||||||||||||||
Other retail |
56,988 | 2,025 | 4.75 | 56,135 | 1,808 | 4.31 | 1.5 | |||||||||||||||||||||||||||||||||||||||||||||
Covered loans |
— | — | — | 2,900 | 134 | 6.14 | * | |||||||||||||||||||||||||||||||||||||||||||||
Total loans |
289,278 | 10,720 | 4.95 | 279,699 | 9,696 | 4.63 | 3.4 | |||||||||||||||||||||||||||||||||||||||||||||
Other earning assets |
19,255 | 272 | 1.89 | 16,412 | 182 | 1.48 | 17.3 | |||||||||||||||||||||||||||||||||||||||||||||
Total earning assets |
427,426 | 13,326 | 4.16 | 413,246 | 11,957 | 3.86 | 3.4 | |||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses |
(4,005 | ) | (3,930 | ) | (1.9 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gain (loss) on investment securities |
(297 | ) | (1,530 | ) | 80.6 | |||||||||||||||||||||||||||||||||||||||||||||||
Other assets |
49,092 | 47,455 | 3.4 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total assets |
$ | 472,216 | $ | 455,241 | 3.7 | |||||||||||||||||||||||||||||||||||||||||||||||
Liabilities and Shareholders’ Equity |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing deposits |
$ | 73,711 | $ | 78,546 | (6.2 | )% | ||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest checking |
71,539 | 171 | .32 | 69,865 | 95 | .18 | 2.4 | |||||||||||||||||||||||||||||||||||||||||||||
Money market savings |
107,568 | 1,257 | 1.56 | 102,453 | 744 | .97 | 5.0 | |||||||||||||||||||||||||||||||||||||||||||||
Savings accounts |
45,855 | 80 | .23 | 44,770 | 37 | .11 | 2.4 | |||||||||||||||||||||||||||||||||||||||||||||
Time deposits |
44,890 | 693 | 2.06 | 37,525 | 387 | 1.38 | 19.6 | |||||||||||||||||||||||||||||||||||||||||||||
Total interest-bearing deposits |
269,852 | 2,201 | 1.09 | 254,613 | 1,263 | .66 | 6.0 | |||||||||||||||||||||||||||||||||||||||||||||
Short-term borrowings |
18,046 | 289 | 2.14 | 21,881 | 272 | 1.66 | (17.5 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Long-term debt |
41,664 | 912 | 2.93 | 36,400 | 718 | 2.64 | 14.5 | |||||||||||||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities |
329,562 | 3,402 | 1.38 | 312,894 | 2,253 | .96 | 5.3 | |||||||||||||||||||||||||||||||||||||||||||||
Other liabilities |
15,869 | 13,740 | 15.5 | |||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders’ equity |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred equity |
5,984 | 5,518 | 8.4 | |||||||||||||||||||||||||||||||||||||||||||||||||
Common equity |
46,462 | 43,915 | 5.8 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total U.S. Bancorp shareholders’ equity |
52,446 | 49,433 | 6.1 | |||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interests |
628 | 628 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Total equity |
53,074 | 50,061 | 6.0 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and equity |
$ | 472,216 | $ | 455,241 | 3.7 | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest income |
$ | 9,924 | $ | 9,704 | ||||||||||||||||||||||||||||||||||||||||||||||||
Gross interest margin |
2.78 | % | 2.90 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Gross interest margin without taxable-equivalent increments |
2.76 | % | 2.87 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Percent of Earning Assets |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest income |
4.16 | % | 3.86 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense |
1.06 | .72 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest margin |
3.10 | % | 3.14 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Net interest margin without taxable-equivalent increments |
3.08 | % | 3.11 | % |
* |
Not meaningful |
(a) |
Interest and rates are presented on a fully taxable-equivalent basis based on a federal income tax rate of 21 percent. |
(b) |
Interest income and rates on loans include loan fees. Nonaccrual loans are included in average loan balances. |
U.S. Bancorp | 73 |
|
31.1 |
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. | ||
31.2 |
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. | |||
32 |
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002. | |||
101.INS |
XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||
101.SCH |
XBRL Taxonomy Extension Schema Document. | |||
101.CAL |
XBRL Taxonomy Extension Calculation Linkbase Document. | |||
101.DEF |
XBRL Taxonomy Extension Definition Linkbase Document. | |||
101.LAB |
XBRL Taxonomy Extension Label Linkbase Document. | |||
101.PRE |
XBRL Taxonomy Extension Presentation Linkbase Document. | |||
104 |
The cover page of U.S. Bancorp’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, formatted in Inline XBRL (included within the Exhibit 101 attachments). |
74 |
U.S. Bancorp |
U.S. BANCORP | ||||||
By: | /s/ CRAIG E. GIFFORD | |||||
| ||||||
Dated: November 7, 2019 | Craig E. Gifford Controller (Principal Accounting Officer and Duly Authorized Officer) |
U.S. Bancorp | 75 |
(1) | I have reviewed this Quarterly Report on Form 10-Q of U.S. Bancorp; |
(2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
(3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
(4) | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
(5) | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ ANDREW CECERE |
Andrew Cecere |
Chief Executive Officer |
76 |
U.S. Bancorp |
(1) | I have reviewed this Quarterly Report on Form 10-Q of U.S. Bancorp; |
(2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
(3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
(4) | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
(5) | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ TERRANCE R. DOLAN |
Terrance R. Dolan Chief Financial Officer |
U.S. Bancorp | 77 |
(1) | The Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ ANDREW CECERE | /s/ TERRANCE R. DOLAN | |||
Andrew Cecere Chief Executive Officer Dated: November 7, 2019 |
Terrance R. Dolan Chief Financial Officer |
78 |
U.S. Bancorp |
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