U.S. Bancorp(USB) - 2024 Q1 - Quarterly Results

Consolidated Financial Statements Quarterly Consolidated Statement of Income In Q1 2024, U.S. Bancorp reported a net income of $1.326 billion and diluted EPS of $0.78, significantly increasing from the prior quarter but decreasing from Q1 2023, primarily due to lower net interest income and continued net interest margin compression Q1 2024 Consolidated Income Statement Highlights (vs. Prior Periods) | Metric | Q1 2024 | Q4 2023 | Q1 2023 | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $3,985M | $4,111M | $4,634M | -14.0% | -3.1% | | Total Noninterest Income | $2,700M | $2,620M | $2,507M | +7.7% | +3.1% | | Total Noninterest Expense | $4,459M | $5,219M | $4,555M | -2.1% | -14.6% | | Net Income | $1,326M | $861M | $1,704M | -22.2% | +54.0% | | Diluted EPS | $0.78 | $0.49 | $1.04 | -25.0% | +59.2% | | Net Interest Margin | 2.70% | 2.78% | 3.10% | -40 bps | -8 bps | Consolidated Ending Balance Sheet As of March 31, 2024, total assets were $683.6 billion, with stable total loans at $374.6 billion and increased total deposits to $528.1 billion, driven by growth in interest-bearing deposits offsetting a decline in noninterest-bearing deposits Key Balance Sheet Items (as of March 31, 2024) | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Total Assets | $683.6B | $663.5B | $682.4B | | Net Loans | $367.1B | $366.5B | $380.8B | | Total Deposits | $528.1B | $512.3B | $505.3B | | Noninterest-bearing Deposits | $91.2B | $90.0B | $124.6B | | Total Shareholders' Equity | $56.0B | $55.8B | $53.5B | Consolidated Average Balance Sheet and Yields/Rates For Q1 2024, the net interest margin (NIM) on a taxable-equivalent basis was 2.70%, reflecting compression driven by a significant increase in the rate paid on interest-bearing liabilities outpacing the rise in the yield on total earning assets Q1 2024 Average Balances and Yields/Rates Analysis | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Avg. Earning Assets | $596.1B | $594.2B | $607.6B | | Yield on Earning Assets | 5.25% | 5.22% | 4.65% | | Avg. Interest-Bearing Liabilities | $487.4B | $479.7B | $458.1B | | Rate on Interest-Bearing Liabilities | 3.12% | 3.02% | 2.06% | | Net Interest Margin (Taxable-equivalent) | 2.70% | 2.78% | 3.10% | - Year-over-year, average noninterest-bearing deposits decreased by 34.6%, while interest-bearing deposits, particularly money market and time deposits, grew significantly by 33.7% and 55.5% respectively, reflecting a shift in deposit mix towards higher-cost funding[8] Loan Portfolio As of March 31, 2024, the total loan portfolio of $374.6 billion was well-diversified, with commercial loans as the largest segment, and notable shifts including a decrease in 'Other retail' and growth in credit card loans compared to the prior year Loan Portfolio Composition (March 31, 2024) | Loan Category | Amount | Percent of Total | | :--- | :--- | :--- | | Total Commercial | $134.7B | 36.0% | | Total Commercial Real Estate | $52.7B | 14.1% | | Total Residential Mortgages | $116.1B | 31.0% | | Credit Card | $27.8B | 7.4% | | Total Other Retail | $43.3B | 11.5% | | Total Loans | $374.6B | 100.0% | Supplemental Business Line Schedules Wealth, Corporate, Commercial and Institutional Banking This segment reported a net income of $651 million for Q1 2024, a decrease from prior periods driven by lower net interest income and a swing to provision expense, despite increased noninterest income and deteriorating credit quality Segment Financial Highlights (Q1 2024) | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Net Income | $651M | $687M | $942M | | Total Net Revenue | $2,378M | $2,328M | $2,570M | | Provision for Credit Losses | $138M | $70M | ($26M) | | Total Net Charge-offs | $65M | $99M | $5M | - Assets Under Management grew to $472.2 billion, up from $419.6 billion in the prior year, driven by growth across all categories, especially money market funds[20] Consumer and Business Banking The Consumer and Business Banking segment generated a net income of $601 million in Q1 2024, primarily due to a 14% year-over-year decline in net interest income, an increased provision for credit losses, and higher net charge-offs Segment Financial Highlights (Q1 2024) | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Net Income | $601M | $616M | $770M | | Total Net Revenue | $2,437M | $2,505M | $2,742M | | Provision for Credit Losses | $55M | $49M | $7M | | Total Net Charge-offs | $68M | $64M | $42M | - Mortgage production volume was $7.1 billion in Q1 2024, down from $9.9 billion in Q1 2023, reflecting the challenging mortgage market environment[29] - The number of branches continued to decline, reaching 2,256 in Q1 2024, down from 2,462 in Q1 2023, as part of ongoing optimization efforts[27] Payment Services Payment Services delivered a net income of $248 million in Q1 2024, a decrease from Q1 2023, as revenue growth was more than offset by a significant increase in the provision for credit losses and rising credit card net charge-off rates Segment Financial Highlights (Q1 2024) | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Net Income | $248M | $183M | $310M | | Total Net Revenue | $1,715M | $1,738M | $1,592M | | Provision for Credit Losses | $359M | $461M | $220M | | Credit Card Net Charge-off Ratio | 4.26% | 3.65% | 2.78% | - Payment volumes showed year-over-year growth, with credit card volume up 4.5% to $33.7 billion and merchant acquiring volume up 3.6% to $137.6 billion[36] Treasury and Corporate Support This segment recorded a net loss of $181 million in Q1 2024, an improvement from the prior year, primarily due to a significantly lower provision for credit losses and reduced noninterest expense Segment Financial Highlights (Q1 2024) | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Net Loss | ($181M) | ($639M) | ($324M) | | Total Net Revenue | $185M | $191M | $271M | | Provision for Credit Losses | $1M | ($68M) | $226M | | Total Noninterest Expense | $482M | $1,210M | $549M |