Exhibit 99.1
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U.S. Bancorp Completes Acquisition of MUFG Union Bank Reports Fourth Quarter and Full Year 2022 Results | ||
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• Net income of $1.9 billion and diluted earnings per common share of $1.20, excluding notable items related to the acquisition of MUFG Union Bank for 4Q22 | |
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• Return on average assets of 1.20% and return on average common equity of 16.8%, excluding notable items related to the acquisition of MUFG Union Bank for 4Q22 | ||
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• Common Equity Tier 1 capital ratio of 8.4% and strong levels of liquidity
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Full Year and 4Q22 Key Financial Data |
4Q22 and Full Year Highlights |
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| PROFITABILITY METRICS |
4Q22 | 3Q22 | 4Q21 | |
Full Year 2022 |
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Full Year 2021 |
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| Return on average assets (%) |
.59 | 1.22 | 1.16 | .98 | 1.43 | |||||||||||||||
| Return on average common equity (%) |
8.0 | 15.8 | 13.0 | 12.6 | 16.0 | |||||||||||||||
| Return on tangible common equity (%) (a) |
11.5 | 21.0 | 16.6 | 17.0 | 20.4 | |||||||||||||||
| Net interest margin (%) |
3.01 | 2.83 | 2.40 | 2.72 | 2.49 | |||||||||||||||
| Efficiency ratio (%) (a) |
63.3 | 57.5 | 62.3 | 61.4 | 60.4 | |||||||||||||||
| Tangible efficiency ratio (%) (a)
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62.0
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56.8
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61.6
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60.5
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59.7
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| INCOME STATEMENT (b) |
4Q22 | 3Q22 | 4Q21 | |
Full Year 2022 |
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Full Year 2021 |
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| Net interest income (taxable-equivalent basis) |
$4,325 | $3,857 | $3,150 | $14,846 | $12,600 | |||||||||||||||
| Noninterest income |
$2,043 | $2,469 | $2,534 | $9,456 | $10,227 | |||||||||||||||
| Net income attributable to U.S. Bancorp |
$925 | $1,812 | $1,673 | $5,825 | $7,963 | |||||||||||||||
| Diluted earnings per common share |
$.57 | $1.16 | $1.07 | $3.69 | $5.10 | |||||||||||||||
| Dividends declared per common share
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$.48
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$.48
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$.46
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$1.88
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$1.76
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| BALANCE SHEET (b) |
4Q22 | 3Q22 | 4Q21 | |
Full Year 2022 |
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Full Year 2021 |
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| Average total loans |
$359,811 | $336,778 | $302,755 | $333,573 | $296,965 | |||||||||||||||
| Average total deposits |
$481,834 | $456,769 | $449,838 | $462,384 | $434,281 | |||||||||||||||
| Net charge-off ratio |
.64% | .19% | .17% | .32% | .23% | |||||||||||||||
| Book value per common share (period end) |
$28.71 | $27.39 | $32.71 | |||||||||||||||||
| Preliminary Basel III standardized CET1 (c) |
8.4% | 9.7% | 10.0% | |||||||||||||||||
| (a) See Non-GAAP Financial Measures reconciliation on page 20 |
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| (b) Dollars in millions, except per share data |
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| (c) CET1 = Common equity tier 1 capital ratio |
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| 4Q22
• Net revenue of $6,368 million including $4,325 million of net interest income and $2,043 million of noninterest income for 4Q22, as reported
• Net income of $1,877 million and diluted earnings per common share of $1.20 for 4Q22, as adjusted for notable items related to the acquisition. On a reported basis, diluted earnings per common share were $0.57
• Reported results included notable items related to the acquisition of MUFG Union Bank, including balance sheet optimization charges of $399 million, merger and integration-related charges of $90 million and impacts to provision for credit losses of $791 million
• Return on average assets of 1.20% and return on average common equity of 16.8% for 4Q22, as adjusted for notable items related to the acquisition. Net income of $925 million, return on average assets of 0.59%. return on average common equity of 8.0%, and return on tangible common equity of 11.5% for 4Q22, on a reported basis
• Average total loan growth of 18.8% year-over-year and 6.8% on a linked quarter basis
• Average total deposit growth of 7.1% year-over-year and 5.5% on a linked quarter basis
Full Year
• Full year positive operating leverage over 230 basis points for legacy U.S. Bancorp operations, excluding notable items and income from the acquisition of MUFG Union Bank
• Full year net income of $5,825 million and diluted earnings per common share of $3.69 as reported, $4.45 excluding notable items from the acquisition of MUFG Union Bank |
| CEO Commentary
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‘‘Full year results, as adjusted, were highlighted by strong pre-provision earnings growth, driven by solid net interest income, wider net interest margin, and positive operating leverage over 230 basis points. On December 1 we completed the acquisition of MUFG Union Bank, which meaningfully increased our market share in California by adding one million consumer, 700 commercial, and 190,000 business banking customers. We expect the transaction to be 8 to 9% accretive to 2023 EPS as the benefits of increased scale, cost synergies, and Union Bank’s core deposit franchise are realized. Credit quality remains strong as we prudently manage with a through-the-cycle view and we continue to maintain healthy capital and liquidity levels given the uncertain economic environment. As of December 31, our common equity tier 1 ratio was 8.4%. I want to thank our dedicated U.S. Bank employees as we continue to work towards a successful systems integration and account conversion of Union Bank customers expected in the second quarter of 2023.”
— Andy Cecere, Chairman, President and CEO, U.S. Bancorp
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Impact of the MUFG Union Bank Acquisition which closed on December 1, 2022
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| MUFG UNION BANK ACQUISITION IMPACT HIGHLIGHTS | ||||||||||||||||||||||||||||||||||
| (Taxable-equivalent basis; $ in millions, except per-share data) | ||||||||||||||||||||||||||||||||||
| Net Income Attributable to U.S. Bancorp |
Impact on Diluted |
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| Fourth Quarter 2022 | USB Legacy |
MUFG Union Bank |
USB Combined |
Notable Items |
USB Reported |
Fourth Quarter 2022 | Before Tax Impact |
After Tax Impact |
Earnings Per Share |
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| Total net revenue |
$6,465 | $302 | $6,767 | $(399) | $6,368 | USB Combined | $2,408 | $1,877 | $1.20 | |||||||||||||||||||||||||
| Noninterest expense |
3,732 | 221 | 3,953 | 90 | 4,043 | |||||||||||||||||||||||||||||
| Provision for credit losses |
375 | 26 | 401 | 791 | 1,192 | Notable items | ||||||||||||||||||||||||||||
| Net income attributable to U.S. Bancorp |
1,833 | 44 | 1,877 | (952) | 925 | Balance sheet optimization |
(399) | (297) | (.20) | |||||||||||||||||||||||||
| Diluted earnings per common share |
$1.17 | $.03 | $1.20 | $(.63) | $.57 | Merger and integration charges |
(90) | (67) | (.04) | |||||||||||||||||||||||||
| Provision for credit losses |
(791) | (588) | (.39) | |||||||||||||||||||||||||||||||
| Loans at period end |
$335,133 | $53,080 | $388,213 | $388,213 | U.S. Bancorp, as reported |
$1,128 | $925 | $.57 | ||||||||||||||||||||||||||
| Deposits at period end |
442,984 | 81,992 | 524,976 | 524,976 | ||||||||||||||||||||||||||||||
| Nonperforming assets at period end |
687 | 329 | 1,016 | 1,016 | ||||||||||||||||||||||||||||||
Investor contact: George Andersen, 612.303.3620 | Media contact: Jeff Shelman, 612.303.9933
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U.S. Bancorp Fourth Quarter 2022 Results | |
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U.S. Bancorp Fourth Quarter 2022 Results | |
On December 1, 2022, the Company completed the acquisition of MUFG Union Bank. As such, the fourth quarter and full year results include one month of results from MUFG Union Bank, the impact of recognizing purchase accounting fair value marks to market and credit related marks to both the balance sheet and the accretion of these purchase accounting adjustments to the income statement in accordance with generally accepted accounting principles.
On a USB Legacy basis, key highlights include the following:
| • | Net interest income, on a taxable equivalent basis, increased 29.2 percent from the fourth quarter of 2021 and 5.5 percent on a linked quarter basis |
| • | Fee revenue declined $139 million, or 5.5 percent, from a year ago primarily driven by lower mortgage banking revenue and service charges, offset by strong growth in payment services revenue and trust and investment management fees |
| • | Total net revenue increased 12.1 percent from the fourth quarter of 2021 and 2.2 percent on a linked quarter basis |
| • | Earnings per diluted common share increased 9.3 percent from a year ago while the provision for credit losses increased by $388 million relative to the fourth quarter of a year ago. |
MUFG Union Bank contributed $81 million on a pre-provision basis representing one month of results including the impacts of purchase accounting accretion in net interest income and approximately $42 million of intangible amortization primarily related to core deposit intangibles. The acquisition contributed $.03 per diluted common share for the fourth quarter.
Fourth quarter and full year results also include certain notable items directly related to the acquisition. Noninterest income included $399 million of losses primarily related to interest rate hedging positions entered into after regulatory approval was obtained to manage the impact of interest rate volatility on capital prior to closing the transaction in December. During that time, longer term interest rates increased nearly 50 basis points before declining approximately 65 basis points. These interest rate hedges were terminated at closing. In addition, the Company took actions to sell certain loans that were not aligned with our credit risk profile, reposition the investment portfolio and sell certain equity investments. Noninterest expense included $90 million of merger and integration costs primarily reflecting deal closing costs, professional services and employee related costs. The provision for credit losses included charges of $791 million related to initially providing for acquired loans of $662 million and $129 million related to the securitization of approximately $4 billion of indirect automobile loans to optimize the balance sheet capital management.
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U.S. Bancorp Fourth Quarter 2022 Results | |
| INCOME STATEMENT HIGHLIGHTS | ||||||||||||||||||||||||||||||||
| ($ in millions, except per-share data) |
Percent Change | |||||||||||||||||||||||||||||||
| 4Q 2022 |
3Q 2022 |
4Q 2021 |
4Q22 vs 3Q22 |
4Q22 vs 4Q21 |
Full Year 2022 |
Full Year 2021 |
Percent Change |
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| Net interest income |
$ | 4,293 | $ | 3,827 | $ | 3,123 | 12.2 | 37.5 | $ | 14,728 | $ | 12,494 | 17.9 | |||||||||||||||||||
| Taxable-equivalent adjustment |
32 | 30 | 27 | 6.7 | 18.5 | 118 | 106 | 11.3 | ||||||||||||||||||||||||
| Net interest income (taxable-equivalent basis) |
4,325 | 3,857 | 3,150 | 12.1 | 37.3 | 14,846 | 12,600 | 17.8 | ||||||||||||||||||||||||
| Noninterest income |
2,043 | 2,469 | 2,534 | (17.3 | ) | (19.4 | ) | 9,456 | 10,227 | (7.5) | ||||||||||||||||||||||
| Total net revenue |
6,368 | 6,326 | 5,684 | .7 | 12.0 | 24,302 | 22,827 | 6.5 | ||||||||||||||||||||||||
| Noninterest expense before merger and integration |
3,953 | 3,595 | 3,533 | 10.0 | 11.9 | 14,577 | 13,728 | 6.2 | ||||||||||||||||||||||||
| Merger and integration charges |
90 | 42 | -- | nm | nm | 329 | -- | nm | ||||||||||||||||||||||||
| Total noninterest expense |
4,043 | 3,637 | 3,533 | 11.2 | 14.4 | 14,906 | 13,728 | 8.6 | ||||||||||||||||||||||||
| Income before provision and income taxes |
2,325 | 2,689 | 2,151 | (13.5 | ) | 8.1 | 9,396 | 9,099 | 3.3 | |||||||||||||||||||||||
| Provision for credit losses |
1,192 | 362 | (13 | ) | nm | nm | 1,977 | (1,173 | ) | nm | ||||||||||||||||||||||
| Income before taxes |
1,133 | 2,327 | 2,164 | (51.3 | ) | (47.6 | ) | 7,419 | 10,272 | (27.8) | ||||||||||||||||||||||
| Income taxes and taxable-equivalent adjustment |
203 | 511 | 486 | (60.3 | ) | (58.2 | ) | 1,581 | 2,287 | (30.9) | ||||||||||||||||||||||
| Net income |
930 | 1,816 | 1,678 | (48.8 | ) | (44.6 | ) | 5,838 | 7,985 | (26.9) | ||||||||||||||||||||||
| Net (income) loss attributable to noncontrolling interests |
(5 | ) | (4 | ) | (5 | ) | (25.0 | ) | -- | (13 | ) | (22 | ) | 40.9 | ||||||||||||||||||
| Net income attributable to U.S. Bancorp |
$925 | $ | 1,812 | $ | 1,673 | (49.0 | ) | (44.7 | ) | $ | 5,825 | $ | 7,963 | (26.8) | ||||||||||||||||||
| Net income applicable to U.S. Bancorp common shareholders |
$853 | $ | 1,718 | $ | 1,582 | (50.3 | ) | (46.1 | ) | $ | 5,501 | $ | 7,605 | (27.7) | ||||||||||||||||||
| Diluted earnings per common share |
$.57 | $ | 1.16 | $ | 1.07 | (50.9 | ) | (46.7 | ) | $ | 3.69 | $ | 5.10 | (27.6) | ||||||||||||||||||
Net income attributable to U.S. Bancorp was $925 million for the fourth quarter of 2022, which was $748 million lower than the $1,673 million for the fourth quarter of 2021 and $887 million lower than the $1,812 million for the third quarter of 2022. Diluted earnings per common share were $0.57 in the fourth quarter of 2022, compared with $1.07 in the fourth quarter of 2021 and $1.16 in the third quarter of 2022. The fourth quarter of 2022 included $(952) million, or $(0.63) per diluted common share, of notable items associated with the acquisition of MUFG Union Bank including the impact of certain transactions to support balance sheet optimization, merger and integration-related charges and the initial provision for credit losses, compared with $(0.02) per diluted common share of merger and integration-related charges in the third quarter of 2022.
The decrease in net income year-over-year was primarily due to the notable items. Pretax income excluding the notable items increased 11.5 percent compared with a year ago including $55 million of contribution from MUFG Union Bank. Net interest income increased 37.3 percent on a year-over-year taxable-equivalent basis due to the impact of rising interest rates on earning assets and strong growth in loan balances including the impacts of the MUFG Union Bank acquisition, partially offset by deposit mix and pricing as well as funding mix. The net interest margin increased to 3.01 percent in the current quarter from 2.40 percent in the fourth quarter of 2021 primarily due to the impact of higher rates on earning assets, partially offset by deposit pricing and short-term borrowing costs. Excluding the impact of notable items, noninterest income decreased 3.6 percent compared with a year ago driven by lower mortgage banking revenue due to a decline in refinancing activities, partially offset by higher payment services revenue and trust and investment management fees. The increase also reflects $47 million of fee income related to MUFG Union Bank. Excluding merger and integration-related charges, noninterest expense increased 11.9 percent driven by MUFG Union Bank operating expenses of $221 million, including core deposit intangible amortization expense and higher legacy compensation expense. Provision for credit losses reflected the initial provision for credit losses related to the acquisition of MUFG Union Bank and a reserve build in the fourth quarter of 2022 as compared with a reserve release in the fourth quarter of 2021, primarily driven by increasing economic uncertainty.
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U.S. Bancorp Fourth Quarter 2022 Results | |
Net income decreased on a linked quarter basis primarily due to the notable items. Pretax income excluding the notable items increased 1.9 percent on a linked quarter basis including $55 million of contribution from MUFG Union Bank. Net interest income increased 12.1 percent on a taxable-equivalent basis due to yield curve favorability, growth in loan balances including the impacts of the MUFG Union Bank acquisition and earning asset mix, partially offset by deposit mix and pricing as well as funding mix. The net interest margin increased to 3.01 percent in the current quarter from 2.83 percent in the third quarter of 2022 primarily due to the impact of higher rates on earning assets and loan growth, partially offset by deposit pricing and short-term borrowing costs. Excluding the impact of notable items, noninterest income decreased 1.1 percent compared with the third quarter of 2022 driven by seasonally lower payment services revenue, impacted by foreign currency exchange rates in Europe, and lower commercial products revenue, partially offset by higher mortgage banking revenue. Excluding merger and integration-related charges, noninterest expense increased 10.0 percent on a linked quarter basis driven by MUFG Union Bank operating expenses, core deposit intangible amortization expense and higher legacy Company compensation expense. Provision for credit losses increased driven by the initial provision for credit losses related to the acquisition of MUFG Union Bank along with increasing economic uncertainty.
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U.S. Bancorp Fourth Quarter 2022 Results | |
Net interest income on a taxable-equivalent basis in the fourth quarter of 2022 was $4,325 million, an increase of $1,175 million (37.3 percent) over the fourth quarter of 2021. The increase was primarily due to the impact of rising interest rates on earning assets, growth in the Company’s legacy loan portfolio and the MUFG Union Bank acquisition, partially offset by deposit pricing and short-term borrowing costs. Average earning assets were $50.1 billion (9.6 percent) higher than the fourth quarter of 2021, reflecting increases of $57.1 billion (18.8 percent) in average total loans and $6.2 billion (3.9 percent) in average investment securities, while average interest-bearing deposits with banks decreased $10.2 billion (22.3 percent) driven by the growth in loan and investment securities balances. The increase in average investment securities year-over-year was due to the acquisition of MUFG Union Bank as well as purchases of mortgage-backed, U.S. Treasury and state and political securities, net of prepayments, sales and maturities in the Company’s legacy portfolio.
Net interest income on a taxable-equivalent basis increased $468 million (12.1 percent) on a linked quarter basis primarily due to yield curve favorability, growth in loan balances including the impacts of the MUFG Union Bank acquisition and earning asset mix, partially offset by deposit mix and pricing as well as short-term borrowing costs. Average earning assets were $31.0 billion (5.7 percent) higher on a linked quarter basis, reflecting increases of $23.0 billion (6.8 percent) in average loans, $2.1 billion (1.3 percent) in average investment securities and $6.4 billion (22.1 percent) in average interest-bearing deposits with banks. The increase in average investment securities on a linked quarter basis was primarily due to the acquisition of MUFG Union Bank.
The net interest margin in the fourth quarter of 2022 was 3.01 percent, compared with 2.40 percent in the fourth quarter of 2021 and 2.83 percent in the third quarter of 2022. The increase in the net interest margin from the prior year was primarily due to the impact of higher rates on earning assets, partially offset by deposit pricing and short-term borrowing costs. The increase in the net interest margin on a linked quarter basis reflected the impact of rising interest rates on earning assets and loan growth, partially offset by deposit pricing and short-term borrowing costs.
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4Q 2022 3Q 2022 4Q 2021 4Q22 vs 3Q22 4Q22 vs 4Q21 Full Year 2022 Full Year 2021 Percent Change Commercial Lease financing Total commercial Commercial mortgages Construction and development Total commercial real estate Residential mortgages Credit card Retail leasing Home equity and second mortgages Other Total other retail Total loans Average total loans for the fourth quarter of 2022 were $57.1 billion
(18.8 percent) higher than the fourth quarter of 2021. The increase was driven by growth in the Company’s legacy loan portfolio as well as the $18.3 billion impact on average loan balances from the MUFG Union Bank acquisition which are
primarily reflected in commercial loans, commercial mortgages and residential mortgages. Increases in commercial loans (29.0 percent), commercial mortgages (24.0 percent), residential mortgages (28.0 percent) and credit card loans (12.4 percent)
were partially offset by lower retail leasing balances (21.5 percent) and other retail loans (4.7 percent). The increase in legacy portfolio commercial loans was due to higher utilization driven by working capital needs of corporate customers,
slower pay-offs given higher volatility in the capital markets and core growth. The increase in legacy residential mortgages was driven by on-balance sheet loan
activities and slower refinance activity. The increase in credit card loans was primarily driven by higher spend volumes, account growth and lower payment rates. Average total loans were $23.0 billion (6.8 percent) higher than the third quarter of 2022 primarily due to the $18.3 billion impact of
the MUFG Union Bank acquisition as well as legacy portfolio growth. Increases in commercial loans (3.7 percent), total commercial real estate (14.3 percent) and residential mortgages (15.6 percent) were primarily driven by the MUFG Union Bank
acquisition, while the increase in credit card loans (4.4 percent) was primarily driven by lower payment rates.
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Noninterest-bearing deposits Interest-bearing savings deposits Interest checking Money market savings Savings accounts Total savings deposits Time deposits Total interest-bearing deposits Total deposits Average total deposits for the fourth quarter of 2022 were $32.0 billion (7.1 percent) higher than the fourth quarter of 2021 driven in part
by the $28.6 billion impact of the MUFG Union Bank acquisition. Average noninterest-bearing deposits decreased $17.0 billion (12.5 percent) across all business lines, net of the impact of the acquisition. Average total savings deposits
were $37.3 billion (12.8 percent) higher year-over-year driven by Corporate and Commercial Banking and the impact of the acquisition. Average time deposits were $11.7 billion (51.2 percent) higher than the prior year quarter mainly within
Corporate and Commercial Banking. Changes in time deposits are primarily related to those deposits managed as an alternative to other funding sources, based largely on relative pricing and liquidity characteristics. Average total deposits grew $25.1 billion (5.5 percent) from the third quarter of 2022 reflecting the $28.6 billion impact of the MUFG
Union Bank acquisition. On a linked quarter basis, average noninterest-bearing deposits increased $4.9 billion (4.3 percent) primarily driven by Consumer and Business Banking as a result of the acquisition. Average total savings deposits
increased $21.9 billion (7.2 percent) primarily within Corporate and Commercial Banking, Wealth Management and Investment Services and Consumer and Business Banking driven by the acquisition. Average time deposits were $1.7 billion (4.8
percent) lower on a linked quarter basis mainly within Corporate and Commercial Banking. Changes in time deposits are primarily related to those deposits managed as an alternative to other funding sources, based largely on relative pricing and
liquidity characteristics.
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4Q 2022 3Q 2022 4Q 2021 Full Year 2022 Full Year 2021 Percent Change Card revenue Corporate payment products revenue Merchant processing services Trust and investment management fees Service charges Commercial products revenue Mortgage banking revenue Investment products fees Securities gains (losses), net Other Total before balance sheet optimization Fourth quarter noninterest income of $2,043 million was $491 million (19.4 percent) lower than the fourth quarter of 2021, reflecting
$(399) million of balance sheet optimization impact related to the MUFG Union Bank acquisition. Excluding the balance sheet optimization impact, fourth quarter noninterest income was $92 million (3.6 percent) lower than the fourth quarter of
2021 driven by lower mortgage banking revenue due to a decline in refinancing activities as well as lower service charges, partially offset by stronger payment services revenue and trust and investment management fees. Mortgage banking revenue
decreased $194 million (65.1 percent) reflecting lower application volume, given declining refinance activities experienced in the mortgage industry, lower related gain on sale margins and fewer sales of performing loans, partially offset by a
favorable change in the valuation of mortgage servicing rights, net of hedging activities. Service charges decreased $31 million (9.0 percent) primarily due to the impact of the elimination of certain consumer overdraft fees in 2022. These
decreases in noninterest income were partially offset by an increase of $45 million (5.0 percent) in payment services revenue compared with the fourth quarter of 2021. Corporate payment products revenue increased $23 million (14.8 percent)
driven by improving business spending across all product groups and merchant processing services revenue increased $20 million (5.5 percent) driven by higher sales volume and higher merchant fees. Given continued uncertainties in Europe, the
U.S. dollar has strengthened considerably compared to European currencies. Adjusted for the impact of foreign currency rate changes, year-over-year merchant processing services revenue increased approximately 11.2 percent. Trust and investment
management fees increased $88 million (18.2 percent) driven by lower money market fund fee waivers and activity related to the fourth quarter of 2021 acquisition of PFM Asset Management LLC, partially offset by unfavorable market conditions.
Noninterest income was $426 million (17.3 percent) lower in the fourth quarter of 2022 compared with the third quarter of 2022,
reflecting $(399) million of balance sheet optimization related to the MUFG Union Bank acquisition. Excluding the balance sheet optimization impact, fourth quarter noninterest income was $27 million (1.1 percent) lower than the third quarter of
2022 reflecting seasonally lower payment services revenue and lower commercial products revenue, partially offset by higher mortgage banking revenue and other noninterest income. Payment services revenue decreased $40 million (4.1 percent).
Card revenue decreased $7 million (1.8 percent) due to lower net interchange rate. Corporate payment products revenue decreased $12 million (6.3 percent) primarily due to seasonally lower sales volume. Merchant processing services revenue
decreased $21 million (5.2 percent) primarily due to lower sales volume and lower merchant fees. Commercial products revenue decreased $21 million (7.4 percent) driven by lower capital markets and foreign currency customer activity as well
as lower trading revenue, partially offset by higher non-yield loan fees as a result of higher commitment fees, higher commercial leasing fees and activity related to the acquisition of MUFG Union Bank.
Partially offsetting these decreases, mortgage banking revenue increased $23 million (28.4 percent) reflecting an increase in the fair value of mortgage servicing rights, net of hedging activities, and other noninterest income increased
$14 million (8.2 percent) due to higher tax-advantaged investment syndication revenue, partially offset by higher gains on the sale of certain assets in the third quarter of 2022.
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4Q 2022 3Q 2022 4Q 2021 4Q22 vs 3Q22 4Q22 vs 4Q21 Full Year 2022 Full Year 2021 Percent Change Compensation and employee benefits Net occupancy and equipment Professional services Marketing and business development Technology and communications Other intangibles Other Total before merger and integration Merger and integration charges Total noninterest expense Fourth quarter noninterest expense of $4,043 million was $510 million (14.4 percent) higher than the
fourth quarter of 2021. Included in the fourth quarter of 2022 were merger and integration-related charges associated with the acquisition of MUFG Union Bank of $90 million. Excluding the fourth quarter merger and integration-related charges,
fourth quarter noninterest expense increased $420 million (11.9 percent) compared with the fourth quarter of 2021, driven by the impact of MUFG Union Bank operating expenses, core deposit intangible amortization expense, higher legacy Company
compensation expense and higher other noninterest expense. Compensation expense increased $179 million (8.1 percent) compared with the fourth quarter of 2021 primarily due to MUFG Union Bank expense as well as merit and hiring to support
business growth and lower capitalized loan costs driven by lower mortgage production, partially offset by lower performance-based incentives. Intangible amortization increased $45 million driven by the core deposit intangible created as a
result of the MUFG Union Bank acquisition. Other noninterest expense increased $130 million (48.1 percent) due to lower prior year accruals related to future delivery exposures for merchant and airline processing and other liabilities, higher
FDIC insurance expense driven by an increase in the assessment base and rate and MUFG Union Bank expense, partially offset by lower costs related to tax-advantaged projects and expenses related to the decline
in mortgage production. Noninterest expense increased $406 million (11.2 percent) on a linked quarter basis. Excluding merger
and integration-related charges of $90 million in the fourth quarter of 2022 and $42 million in the third quarter of 2022, fourth quarter noninterest expense increased $358 million (10.0 percent) driven by the impact of MUFG Union
Bank operating expenses, core deposit intangible amortization, higher legacy Company compensation expense and other noninterest expense. Compensation expense increased $142 million (6.3 percent) primarily due to MUFG Union Bank expense, higher
performance-based incentives and lower capitalized loan costs driven by lower mortgage production, partially offset by lower variable compensation. Intangible amortization increased $42 million (97.7 percent) driven by the core deposit
intangible created as a result of the MUFG Union Bank acquisition. Other noninterest expense increased $64 million (19.0 percent) due to MUFG Union Bank expense, higher costs related to tax-advantaged
projects, higher FDIC insurance expense driven by an increase in the assessment base and rate, and other accrued liabilities. Provision for Income Taxes The provision for income taxes for the fourth quarter of 2022 resulted in a tax rate of 17.9 percent on a taxable-equivalent basis (effective tax rate of 15.5 percent), compared with 22.5 percent on a taxable-equivalent
basis (effective tax rate of 21.5 percent) in the fourth quarter of 2021, and a tax rate of 22.0 percent on a taxable-equivalent basis (effective tax rate of 20.9 percent) in the third quarter of 2022. The tax rate on a taxable-equivalent
basis, was 22.0 percent excluding the impact of notable items related to the acquisition.
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Balance, beginning of period Allowance for acquired credit losses (b) Net charge-offs Acquisition impact (c) Total net charge-offs Provision for credit losses USB Combined Balance sheet optimization impact Acquisition impact of initial provision Total provision for credit losses Other changes Balance, end of period Components Allowance for loan losses Liability for unfunded credit commitments Total allowance for credit losses Allowance for credit losses as a percentage of Period-end loans Nonperforming loans Nonperforming assets (a) Annualized and calculated on average
loan balances (b) Allowance for credit deteriorated and charged-off
loans acquired from MUFG Union Bank (c) Includes net charge-offs of $179 million, reflecting
uncollectible acquired loans previously charged-off and acquisition alignment, and $189 million loss on balance sheet optimization
11
The Company’s provision for credit losses for the fourth
quarter of 2022 was $1,192 million, compared with a provision of $362 million in the third quarter of 2022 and a credit benefit of $13 million in the fourth quarter of 2021. The increase in provision was primarily due to the initial
provision for credit losses recorded in the fourth quarter of 2022 of $662 million related to the MUFG Union Bank acquisition and the provision impact of balance sheet optimization actions taken in the fourth quarter of $129 million as
well as changing economic conditions. During 2021, factors affecting economic conditions, including government stimulus and declining impacts from the pandemic in the U.S., contributed to economic improvement and related reserve releases. In 2022,
economic uncertainty and recession risk have been increasing due to ongoing supply chain challenges, inflationary concerns, market volatility, rising oil prices from the Russia-Ukraine conflict and pressure on corporate earnings related to these
factors. Expected loss estimates consider various factors including customer specific information impacting changes in risk ratings, projected delinquencies, and the impact of economic deterioration on borrowers’ liquidity and ability to repay.
Generally, these credit quality factors continue to perform better than pre-pandemic levels despite the changing economic outlook. Consumer portfolios remain resilient despite rising delinquencies and lower
collateral values. We anticipate some stress in commercial portfolios as the impact of rising interest rates filters through financials. Total net charge-offs in the fourth quarter of 2022 were $578 million, compared with $162 million in
the third quarter of 2022 and $132 million in the fourth quarter of 2021. Net charge-offs for the fourth quarter included $179 million of uncollectible acquired loans previously charged-off and
acquisition alignment, and $189 million of losses on balance sheet optimization. The net charge-off ratio was 0.64 percent in the fourth quarter of 2022 (0.23 percent excluding the impact of the
MUFG Union Bank acquisition-related items noted above), compared with 0.19 percent in the third quarter of 2022 and 0.17 percent in the fourth quarter of 2021. Net charge-offs, excluding the impact of the MUFG Union Bank
acquisition-related items noted above, increased $48 million (29.6 percent) compared with the third quarter of 2022 and $78 million (59.1 percent) compared with the fourth quarter of 2021, reflecting higher charge-offs in most loan
categories consistent with normalizing credit conditions. The allowance for credit losses was
$7,404 million at December 31, 2022, compared with $6,455 million at September 30, 2022, and $6,155 million at December 31, 2021. The allowance for credit losses at December 31, 2022, included the impact of MUFG
Union Bank’s initial provision for credit losses of $662 million and $336 million of initial allowance recorded through purchase accounting. The increase on a linked quarter basis was driven by the MUFG Union Bank acquisition, and
increasing economic uncertainty. The ratio of the allowance for credit losses to period-end loans was 1.91 percent at December 31, 2022, compared with 1.88 percent at September 30, 2022,
and 1.97 percent at December 31, 2021. The ratio of the allowance for credit losses to nonperforming loans was 762 percent at December 31, 2022, compared with 1,025 percent at September 30, 2022, and 738 percent at
December 31, 2021. Nonperforming assets were $1,016 million at December 31, 2022, and
included $329 million acquired from MUFG Union Bank. Nonperforming assets were $677 million at September 30, 2022, and $878 million at December 31, 2021. The ratio of nonperforming assets to loans and other real estate was
0.26 percent at December 31, 2022, compared with 0.20 percent at September 30, 2022, and 0.28 percent at December 31, 2021. The year-over-year and linked quarter increases in nonperforming assets reflected nonperforming
assets acquired from MUFG Union Bank. The year-over-year increase was partially offset by decreases across all loan categories within the legacy portfolios, with the largest drivers in total commercial and total commercial real estate nonperforming
loans. Accruing loans 90 days or more past due were $491 million at December 31, 2022, and included $22 million of accruing loans 90 days or more past due acquired from MUFG Union Bank, compared with $393 million at
September 30, 2022, and $472 million at December 31, 2021.
12
Delinquent loan ratios - 90 days or more past due Commercial Commercial real estate Residential mortgages Credit card Other retail Total loans Delinquent loan ratios - 90 days or more past due and nonperforming loans Commercial Commercial real estate Residential mortgages Credit card Other retail Total loans
13
Beginning shares outstanding Shares issued for stock incentive plans, acquisitions and other corporate purposes Shares repurchased Ending shares outstanding Total U.S. Bancorp shareholders’ equity was $50.8 billion at December 31, 2022, compared with
$47.5 billion at September 30, 2022, and $54.9 billion at December 31, 2021. The Company suspended all common stock repurchases at the beginning of the third quarter of 2021, except for those done exclusively in connection with
its stock-based compensation programs, due to its pending acquisition of MUFG Union Bank’s core regional banking franchise. The Company does not expect to commence repurchasing its common stock until its CET1 ratio approximates
9.0 percent. All regulatory ratios continue to be in excess of “well-capitalized”
requirements. The common equity tier 1 capital to risk-weighted assets ratio using the Basel III standardized approach was 8.4 percent at December 31, 2022, compared with 9.7 percent at September 30, 2022, and 10.0 percent
at December 31, 2021. The common equity tier 1 capital to risk-weighted assets ratio, reflecting the full implementation of the current expected credit losses methodology was 8.1 percent at December 31, 2022, compared with
9.4 percent at September 30, 2022, and 9.6 percent at December 31, 2021.
14
Investor Conference Call On Wednesday, January 25, 2023 at 8 a.m. CT, Chairman, President and Chief
Executive Officer Andy Cecere and Vice Chair and Chief Financial Officer Terry Dolan will host a conference call to review the financial results. The live conference call will be available online or by telephone. To access the webcast and
presentation, visit the U.S. Bancorp website at usbank.com and click on “About Us”, “Investor Relations” and “Webcasts & Presentations.” To access the conference call from locations within the United States and
Canada, please dial 877-692-8955. Participants calling from outside the United States and Canada, please dial 234-720-6979. The PIN code for all participants is 6030554. For those unable to participate during the live call, a replay will be available at approximately 11 a.m. CT on Wednesday, January 25, 2023. To
access the replay, please visit the U.S. Bancorp website at usbank.com and click on “About Us”, “Investor Relations” and “Webcasts & Presentations.” About U.S. Bancorp U.S. Bancorp, with approximately 77,000 employees and $675 billion in assets
as of December 31, 2022, is the parent company of U.S. Bank National Association. The Minneapolis-based company serves millions of customers locally, nationally and globally through a diversified mix of businesses: Consumer and Business
Banking; Payment Services; Corporate & Commercial Banking; and Wealth Management and Investment Services. MUFG Union Bank, consisting primarily of retail banking branches on the West Coast, joined U.S. Bancorp in 2022. The company has been
recognized for its approach to digital innovation, social responsibility, and customer service, including being named one of the 2022 World’s Most Ethical Companies and Fortune’s most admired superregional bank. Learn more at
usbank.com/about. Forward-looking Statements “Safe Harbor” Statement under the Private Securities Litigation Reform
Act of 1995: This press release contains forward-looking statements about U.S. Bancorp. Statements
that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements and are based on the information available to, and assumptions and estimates made by, management as of the date hereof.
These forward-looking statements cover, among other things, future economic conditions and the anticipated future revenue, expenses, financial condition, asset quality, capital and liquidity levels, plans, prospects and operations of U.S. Bancorp.
Forward-looking statements often use words such as “anticipates,” “targets,” “expects,” “hopes,” “estimates,” “projects,” “forecasts,” “intends,” “plans,”
“goals,” “believes,” “continue” and other similar expressions or future or conditional verbs such as “will,” “may,” “might,” “should,” “would” and “could.”
Forward-looking statements involve inherent risks and uncertainties that could cause actual results
to differ materially from those set forth in forward-looking statements, including the following risks and uncertainties: Deterioration in general business and economic conditions or turbulence in domestic or global
financial markets, which could adversely affect U.S. Bancorp’s revenues and the values of its assets and liabilities, reduce the availability of funding to certain financial institutions, lead to a tightening of credit, and increase stock price
volatility; Changes to statutes, regulations, or regulatory policies or practices, including capital and
liquidity requirements, and the enforcement and interpretation of such laws and regulations, and U.S. Bancorp’s ability to address or satisfy those requirements and other requirements or conditions imposed by regulatory entities;
Changes in interest rates; Increases in unemployment rates; Deterioration in the credit quality of its loan portfolios or in the value of the collateral
securing those loans; Risks related to originating and selling mortgages, including repurchase and indemnity demands, and
related to U.S. Bancorp’s role as a loan servicer; Impacts of current, pending or future litigation and governmental proceedings; Increased competition from both banks and non-banks;
Effects of climate change and related physical and transition risks; Changes in customer behavior and preferences and the ability to implement technological changes to
respond to customer needs and meet competitive demands; Breaches in data security; Failures or disruptions in or breaches of U.S. Bancorp’s operational or security systems or
infrastructure, or those of third parties;
15
Failures to safeguard personal information; Impacts of pandemics, including the COVID-19 pandemic,
natural disasters, terrorist activities, civil unrest, international hostilities and geopolitical events; Impacts of supply chain disruptions, rising inflation, slower growth or a recession;
Failure to execute on strategic or operational plans; Effects of mergers and acquisitions and related integration; Effects of critical accounting policies and judgments; Effects of changes in or interpretations of tax laws and regulations; Management’s ability to effectively manage credit risk, market risk, operational risk,
compliance risk, strategic risk, interest rate risk, liquidity risk and reputation risk; and The risks and uncertainties more fully discussed in the section entitled “Risk Factors” of
U.S. Bancorp’s Form 10-K for the year ended December 31, 2021, and subsequent filings with the Securities and Exchange Commission. In addition, U.S. Bancorp’s acquisition of MUFG Union Bank presents
risks and uncertainties, including, among others: the risk that the cost savings, any revenue synergies and other anticipated benefits of the acquisition may not be realized or may take longer than anticipated to be realized; and the possibility
that the combination of MUFG Union Bank with U.S. Bancorp, including the integration of MUFG Union Bank, may be more costly or difficult to complete than anticipated or have unanticipated adverse results. In addition, factors other than these risks also could adversely affect U.S. Bancorp’s results, and the
reader should not consider these risks to be a complete set of all potential risks or uncertainties. Readers are cautioned not to place undue reliance on any forward-looking statements. Forward-looking statements speak only as of the date hereof,
and U.S. Bancorp undertakes no obligation to update them in light of new information or future events.
16
Non-GAAP Financial
Measures In addition to capital ratios defined by banking regulators, the Company
considers various other measures when evaluating capital utilization and adequacy, including: Tangible common equity to tangible assets Tangible common equity to risk-weighted assets Common equity tier 1 capital to risk-weighted assets, reflecting the full implementation of the
current expected credit losses methodology, and Return on tangible common equity. These capital measures are viewed by management as useful additional
methods of evaluating the Company’s utilization of its capital held and the level of capital available to withstand unexpected negative market or economic conditions. Additionally, presentation of these measures allows investors, analysts and
banking regulators to assess the Company’s capital position relative to other financial services companies. These capital measures are not defined in generally accepted accounting principles (“GAAP”), or are not currently effective or
defined in banking regulations. In addition, certain of these measures differ from currently effective capital ratios defined by banking regulations principally in that the currently effective ratios, which are subject to certain transitional
provisions, temporarily exclude the impact of the 2020 adoption of accounting guidance related to impairment of financial instruments based on the current expected credit losses methodology. As a result, these capital measures disclosed by the
Company may be considered non-GAAP financial measures. Management believes this information helps investors assess trends in the Company’s capital adequacy. The Company also discloses net interest income and related ratios and analysis on a taxable-equivalent basis,
which may also be considered non-GAAP financial measures. The Company believes this presentation to be the preferred industry measurement of net interest income as it provides a relevant comparison of net
interest income arising from taxable and tax-exempt sources. In addition, certain performance measures, including the efficiency ratio, tangible efficiency ratio and net interest margin, utilize net interest
income on a taxable-equivalent basis. The adjusted return on average assets, adjusted return on
average common equity, adjusted return on tangible common equity and adjusted diluted earnings per common share exclude notable items related to the acquisition of MUFG Union Bank. Management uses these measures in their analysis of the
Company’s performance and believes these measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods. There may be limits in the usefulness of these measures to investors. As a result, the Company encourages
readers to consider the consolidated financial statements and other financial information contained in this press release in their entirety, and not to rely on any single financial measure. A table follows that shows the Company’s calculation
of these non-GAAP financial measures.
17
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 Card revenue Corporate payment products revenue Merchant processing services Trust and investment management fees Service charges Commercial products revenue Mortgage banking revenue Investment products fees Securities gains (losses), net Other Total noninterest income Noninterest Expense Compensation and employee benefits Net occupancy and equipment Professional services Marketing and business development Technology and communications Other intangibles Merger and integration charges 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 Dividends declared per common share Average common shares outstanding Average diluted common shares outstanding 18
December 31, 2022 December 31, 2021 Assets Cash and due from banks Investment securities Held-to-maturity Available-for-sale Loans held for sale 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 Total assets Liabilities and Shareholders’ Equity Deposits Noninterest-bearing Interest-bearing Total deposits Short-term borrowings Long-term debt Other liabilities Total liabilities Shareholders’ equity Preferred stock Common stock Capital surplus Retained earnings Less treasury stock Accumulated other comprehensive income (loss) Total U.S. Bancorp shareholders’ equity Noncontrolling interests Total equity Total liabilities and equity 19
December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 Total equity Preferred stock Noncontrolling interests Goodwill (net of deferred tax liability) (1) Intangible assets (net of deferred tax liability), other than mortgage servicing rights Tangible common equity (a) Common equity tier 1 capital, determined in accordance with transitional regulatory capital requirements
related to the current expected credit losses methodology implementation Adjustments (2) Common equity tier 1 capital, reflecting the full implementation of the current expected credit losses
methodology (b) Total assets Goodwill (net of deferred tax liability) (1) Intangible assets (net of deferred tax liability), other than mortgage servicing rights Tangible assets (c) Risk-weighted assets, determined in accordance with transitional regulatory capital requirements related to
the current expected credit losses methodology implementation (d) Adjustments (3) Risk-weighted assets, reflecting the full implementation of the current expected credit
losses Ratios* Tangible common equity to tangible assets (a)/(c) Tangible common equity to risk-weighted assets (a)/(d) Common equity tier 1 capital to risk-weighted assets, reflecting the full implementation of the current
expected credit losses methodology (b)/(e) Net income applicable to U.S. Bancorp common shareholders Intangibles amortization
(net-of-tax) Net income applicable to U.S. Bancorp common shareholders, excluding intangibles amortization Annualized net income applicable to U.S. Bancorp common shareholders, excluding intangible
amortization (f) Average total equity Average preferred stock Average noncontrolling interests Average goodwill (net of deferred tax liability) (1) Average intangible assets (net of deferred tax liability), other than mortgage servicing rights Average tangible common equity (g) Return on tangible common equity (f)/(g) Net interest income Taxable-equivalent adjustment (4) Net interest income, on a taxable-equivalent basis Net interest income, on a taxable-equivalent basis (as calculated above) Noninterest income Less: Securities gains (losses), net Total net revenue, excluding net securities gains (losses) (h) Noninterest expense (i) Less: Intangibles amortization Noninterest expense, excluding intangibles amortization (j) Efficiency ratio (i)/(h) Tangible efficiency ratio (j)/(h) Preliminary data. Subject to change prior to filings with applicable regulatory agencies.
Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory
requirements. Includes the estimated increase in the allowance for credit losses related to the adoption of the current expected
credit losses methodology net of deferred taxes. Includes the impact of the estimated increase in the allowance for credit losses related to the adoption of the current
expected credit losses methodology. 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. 20
Net income attributable to U.S. Bancorp Less: Notable items (1) Net income attributable to U.S. Bancorp, excluding notable items Annualized net income attributable to U.S. Bancorp, excluding notable items (a) Average assets (b) Return on average assets, excluding notable items (a)/(b) Net income applicable to U.S. Bancorp common shareholders Less: Notable items, including the impact of earnings allocated to participating stock awards (1) Net income applicable to U.S. Bancorp common shareholders, excluding notable items Annualized net income applicable to U.S. Bancorp common shareholders, excluding notable items (c) Average common equity (d) Return on average common equity, excluding notable items (c)/(d) Net interest income Taxable-equivalent adjustment (2) Net interest income, on a taxable-equivalent basis Net interest income, on a taxable-equivalent basis (as calculated above) Noninterest income Less: Securities gains (losses), net Total net revenue, excluding net securities gains (losses) Less: Notable items (1) Less: Securities (gains) losses, net included in notable items Total net revenue, excluding net securities gains (losses) and notable items (e) Noninterest expense Less: Notable items (1) Noninterest expense, excluding notable items (f) Less: Intangibles amortization Noninterest expense, excluding notable items and intangible amortization (g) Efficiency ratio, excluding notable items (f)/(e) Tangible efficiency ratio, excluding notable items (g)/(e) Net income applicable to U.S. Bancorp common shareholders, excluding notable items (as calculated above)
(h) Average diluted common shares outstanding (i) Diluted earnings per common share, excluding notable items
(h)/(i) Notable items for the three months ended December 31, 2022 include the following: Notable items for the three months ended September 30, 2022 included $42 million ($33 million net-of-tax) of merger and integration charges. 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. 21
Three Months Ended 2022 Net income applicable to U.S. Bancorp common shareholders Intangibles amortization
(net-of-tax) Net income applicable to U.S. Bancorp common shareholders, excluding intangibles amortization Less: Notable items, including the impact of earnings allocated to participating stock awards (1) Net income applicable to U.S. Bancorp common shareholders, excluding intangibles amortization and notable
items Annualized net income applicable to U.S. Bancorp common shareholders, excluding intangibles amortization
and notable items (a) Average total equity Average preferred stock Average noncontrolling interests Average goodwill (net of deferred tax liability) (2) Average intangible assets (net of deferred tax liability), other than mortgage servicing rights Average tangible common equity (b) Return on tangible common equity, excluding notable items (a)/(b) Net charge-offs Less: Notable items (3) Net charge-offs, excluding notable items Annualized net charge-offs, excluding notable items (c) Average loan balances (d) Net charge-off ratio, excluding notable items (c)/(d) Income before taxes Taxable-equivalent adjustment (4) Less: Notable items (1) Income before taxes (taxable-equivalent basis), excluding notable items (e) Income taxes Taxable-equivalent adjustment (4) Less: Notable items (1) Income taxes and taxable-equivalent adjustment, excluding notable items (f) Income tax rate (taxable-equivalent basis), excluding notable
items (f)/(e) Notable items for the three months ended December 31, 2022 include the following:
Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory
requirements. Notable items for the three months ended December 31, 2022 included net charge-offs of $179 million,
reflecting uncollectible acquired loans previously charged-off and acquisition alignment, and $189 million loss on balance sheet optimization. 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. 22
Net income applicable to U.S. Bancorp common shareholders Intangibles amortization
(net-of-tax) Net income applicable to U.S. Bancorp common shareholders, excluding intangibles amortization (a) Average total equity Average preferred stock Average noncontrolling interests Average goodwill (net of deferred tax liability) (1) Average intangible assets (net of deferred tax liability), other than mortgage servicing rights Average tangible common equity (b) Return on tangible common equity (a)/(b) Net interest income Taxable-equivalent adjustment (2) Net interest income, on a taxable-equivalent basis Net interest income, on a taxable-equivalent basis (as calculated above) Noninterest income Less: Securities gains (losses), net Total net revenue, excluding net securities gains (losses) (c) Noninterest expense (d) Less: Intangibles amortization Noninterest expense, excluding intangibles amortization (e) Efficiency ratio (d)/(c) Tangible efficiency ratio (e)/(c) Net interest income, on a taxable-equivalent basis (as calculated above) Noninterest income Total net revenue Less: MUFG Union Bank net revenue Less: Notable items (3) Total net revenue, excluding MUFG Union Bank and notable items Noninterest expense Less: MUFG Union Bank noninterest expense Less: Notable items (3) Total noninterest expense, excluding MUFG Union Bank and notable items Operating leverage (f) - (h) Operating leverage, excluding MUFG Union Bank and notable items (g) - (i) Net income applicable to U.S. Bancorp common shareholders Less: Notable items, including the impact of earnings allocated to participating stock awards (3) Net income applicable to U.S. Bancorp common shareholders, excluding notable items (j) Average diluted common shares outstanding (k) Diluted earnings per common share, excluding notable items
(j)/(k) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory
requirements. 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. Notable items for the year ended December 31, 2022 include the following:
23
Percent Change Corporate and Commercial Banking Consumer and Business Banking Wealth Management and Investment Services Payment Services Treasury and Corporate Support Consolidated Company Percent Change Corporate and Commercial Banking Consumer and Business Banking Wealth Management and Investment Services Payment Services Treasury and Corporate Support Consolidated Company Lines of Business The Company’s major lines of business are Corporate and Commercial Banking, Consumer and Business Banking,
Wealth Management and Investment Services, Payment Services, and Treasury and Corporate Support. These operating segments are components of the Company about which financial information is prepared and is evaluated regularly by management in
deciding how to allocate resources and assess performance. Business line results are derived from the Company’s business unit profitability reporting systems by specifically attributing managed balance sheet assets, deposits and other
liabilities and their related income or expense. Designations, assignments and allocations change from time to time as management systems are enhanced, methods of evaluating performance or product lines change or business segments are realigned to
better respond to the Company’s diverse customer base. During 2022, certain organization and methodology changes were made and, accordingly, prior period results were restated and presented on a comparable basis.
2
4Q 2022 3Q 2022 4Q 2021 4Q22 vs 3Q22 4Q22 vs 4Q21 Full Year 2022 Full Year 2021 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 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 Data Loans Other earning assets Goodwill Other intangible assets Assets Noninterest-bearing deposits Interest-bearing deposits Total deposits Total U.S. Bancorp shareholders’ equity Corporate and Commercial Banking offers lending, equipment finance and small-ticket leasing, depository services, treasury management, capital markets services, international trade services and other financial services to
middle market, large corporate, commercial real estate, financial institution, non-profit and public sector clients. Corporate and Commercial Banking generated $701 million of income before provision and taxes in the fourth
quarter of 2022, compared with $509 million in the fourth quarter of 2021, and contributed $542 million of the Company’s net income in the fourth quarter of 2022. The provision for credit losses decreased $120 million compared
with the fourth quarter of 2021 primarily due to slower legacy Company loan balance growth in the current year quarter, partially offset by the impact of the MUFG Union Bank acquisition. Total net revenue was $276 million (29.2 percent) higher
due to an increase of $292 million (42.1 percent) in net interest income, partially offset by a decrease of $16 million (6.4 percent) in total noninterest income. Net interest income increased primarily due to higher loan balances and the
impact of higher rates on the margin benefit from deposits, partially offset by lower spreads on loans and lower noninterest-bearing deposits. Total noninterest income decreased primarily due to lower commercial products revenue due to lower capital
markets revenue net of higher trading revenue as well as lower service charges driven by higher earnings credits. Total noninterest expense increased $84 million (19.3 percent) compared with a year ago primarily due to higher FDIC insurance
expense and higher net shared services expense driven by investment in support of business growth and the impacts of the MUFG Union Bank acquisition including intangible amortization driven by the core deposit intangible.
3
4Q 2022 3Q 2022 4Q 2021 Full Year 2022 Full Year 2021 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 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 Data Loans Other earning assets Goodwill Other intangible assets Assets Noninterest-bearing deposits Interest-bearing deposits Total deposits Total U.S. Bancorp shareholders’ equity Consumer and Business Banking comprises consumer banking, small business banking and consumer lending. Products and services are delivered through banking offices, telephone servicing and sales, on-line services, direct mail, ATM processing, mobile devices, distributed mortgage loan officers, and intermediary relationships including auto dealerships, mortgage banks, and strategic business partners.
Consumer and Business Banking generated $831 million of income before provision and taxes in the
fourth quarter of 2022, compared with $640 million in the fourth quarter of 2021, and contributed $462 million of the Company’s net income in the fourth quarter of 2022. The provision for credit losses increased $216 million
compared with prior year due to the impacts of balance sheet optimization and more favorable credit trends in the prior year quarter. Total net revenue was higher by $351 million (16.8 percent) due to an increase of $568 million (37.8
percent) in net interest income, partially offset by a decrease in total noninterest income of $217 million (37.3 percent). Net interest income reflected the favorable impact of higher rates on the margin benefit from deposits, partially offset
by lower spreads on loans and lower loan fees. Total noninterest income decreased primarily due to lower mortgage banking revenue reflecting lower application volume, lower related gain on sale margins and fewer sales of loans. Noninterest income
was also adversely impacted by lower residual gains on vehicle sales and the impact of pricing changes on deposit service charges. Total noninterest expense increased $160 million (11.1 percent) due to increases in net shared services expense
due to investments in digital capabilities and the impact of the MUFG Union Bank acquisition, including intangible amortization driven by the core deposit intangible, as well as lower capitalized loan costs driven by lower mortgage production,
partially offset by lower compensation expense and related loan expenses due to lower mortgage production.
4
4Q 2022 3Q 2022 4Q 2021 4Q22 vs 3Q22 4Q22 vs 4Q21 Full Year 2022 Full Year 2021 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 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 Data Loans Other earning assets Goodwill Other intangible assets Assets Noninterest-bearing deposits Interest-bearing deposits Total deposits Total U.S. Bancorp shareholders’ equity Wealth Management and Investment
Services provides private banking, financial advisory services, investment management, retail brokerage services, insurance, trust, custody and fund servicing through four
businesses: Wealth Management, Global Corporate Trust & Custody, U.S. Bancorp Asset Management and Fund Services. Wealth Management and Investment Services generated $529 million of income before provision and taxes in the fourth quarter of 2022, compared with $278 million in the fourth quarter of 2021, and contributed
$395 million of the Company’s net income in the fourth quarter of 2022. The provision for credit losses decreased slightly compared with the prior year quarter. Total net revenue increased $343 million (41.2 percent) year-over-year
reflecting an increase of $272 million in net interest income and $71 million (12.2 percent) in total noninterest income. Net interest income increased primarily due to the favorable impact of higher rates on the margin benefit from
deposits. Total noninterest income increased primarily driven by higher trust and investment management fees reflecting lower money market fund fee waivers and the impact of the PFM acquisition, partially offset by the impact of unfavorable market
conditions. Total noninterest expense increased $92 million (16.6 percent) compared with the fourth quarter of 2021 reflecting increasing compensation costs, higher net shared services expense driven by investment in support of business growth
and the impact of the MUFG Union Bank acquisition. Compensation expense increased as a result of merit, the PFM acquisition in late 2021, and core business growth.
5
4Q 2022 3Q 2022 4Q 2021 4Q22 vs 3Q22 4Q22 vs 4Q21 Full Year 2022 Full Year 2021 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 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 Data Loans Other earning assets Goodwill Other intangible assets Assets Noninterest-bearing deposits Interest-bearing deposits Total deposits Total U.S. Bancorp shareholders’ equity Payment Services includes consumer and business credit cards, stored-value cards, debit cards, corporate, government and purchasing card services, consumer lines of credit and merchant processing. Payment Services generated $649 million of income before provision and taxes in the fourth quarter of 2022,
compared with $622 million in the fourth quarter of 2021, and contributed $229 million of the Company’s net income in the fourth quarter of 2022. The provision for credit losses increased $211 million from a year ago primarily
due to the impacts of increasing delinquency rates, along with stronger growth in loan balances. Total net revenue increased $60 million (3.9 percent) due to higher net interest income of $14 million (2.3 percent) and higher total
noninterest income of $46 million (5.1 percent). Net interest income increased primarily due to higher loan yields driven by higher interest rates net of lower customer revolve rates, higher loan balances, and loan fees, mostly offset by higher
funding costs. Total noninterest income increased year-over-year mainly due to continued strengthening of consumer and business spending across most sectors. As a result, there was strong growth in corporate payment products revenue driven by
improving business spending across all product groups. In addition, merchant processing services revenue increased due to higher sales volume and higher merchant fees, partially offset by the impact of foreign currency rate changes in Europe. Total
noninterest expense increased $33 million (3.7 percent) reflecting higher net shared services expense driven by investment in infrastructure and technology development, in addition to higher compensation expense due to merit and core business
growth.
6
4Q 2022 3Q 2022 4Q 2021 4Q22 vs 3Q22 4Q22 vs 4Q21 Full Year 2022 Full Year 2021 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 (loss) before provision and taxes Provision for credit losses Income (loss) before income taxes Income taxes and taxable-equivalent
adjustment Net income (loss) Net (income) loss attributable to noncontrolling
interests Net income (loss) attributable to U.S.
Bancorp Average Balance Sheet Data Loans Other earning assets Goodwill Other intangible assets Assets Noninterest-bearing deposits Interest-bearing deposits Total deposits Total U.S. Bancorp shareholders’ equity Treasury and Corporate Support includes the Company’s investment portfolios, funding, capital management, interest rate risk management, income taxes not allocated to the business lines, including most investments in tax-advantaged projects, and the residual aggregate of those expenses associated with corporate activities that are managed on a consolidated basis. Treasury and Corporate Support generated a $385 million loss before provision and taxes in the fourth quarter
of 2022, compared with $102 million of income before provision and taxes in the fourth quarter of 2021, and recorded a net loss of $703 million in the fourth quarter of 2022. The provision for credit losses increased $901 million
primarily due to the initial provision for credit losses recorded in the fourth quarter of 2022 related to the MUFG Union Bank acquisition as well as continued economic uncertainty in the current quarter relative to the reduction in the allowance
for credit losses associated with improving economic conditions in the fourth quarter of 2021. Total net revenue was lower by $346 million due to a decrease of $375 million in total noninterest income, partially offset by an increase of
$29 million (34.1 percent) in net interest income. Net interest income increased primarily due to the acquisition of MUFG Union Bank, partially offset by higher funding costs. The decrease in total noninterest income was primarily due to the
impacts of balance sheet optimization associated with the acquisition of MUFG Union Bank. Total noninterest expense increased $141 million (71.9 percent) primarily due to merger and integration-related charges related to the acquisition of MUFG
Union Bank, other accrued liabilities, and higher compensation expense reflecting merit, hiring to support business growth, core business growth and higher production incentives, partially offset by lower net shared services costs. Income taxes are
assessed to each line of business at a managerial tax rate of 25.0 percent with the residual tax expense or benefit to arrive at the consolidated effective tax rate included in Treasury and Corporate Support.
7
U.S. Bancorp Fourth Quarter 2022 Results
AVERAGE LOANS
($ in millions)
Percent Change
$128,269
$123,745
$99,433
3.7
29.0
$
118,967
$
97,649
21.8
4,649
4,774
5,075
(2.6
)
(8.4
)
4,830
5,206
(7.2
)
132,918
128,519
104,508
3.4
27.2
123,797
102,855
20.4
34,997
30,002
28,216
16.6
24.0
30,890
27,997
10.3
10,725
10,008
10,635
7.2
.8
10,208
10,784
(5.3
)
45,722
40,010
38,851
14.3
17.7
41,098
38,781
6.0
97,092
84,018
75,858
15.6
28.0
84,749
74,629
13.6
25,173
24,105
22,399
4.4
12.4
23,478
21,645
8.5
5,774
6,259
7,354
(7.7
)
(21.5
)
6,459
7,710
(16.2
)
11,927
11,142
10,568
7.0
12.9
11,051
11,228
(1.6
)
41,205
42,725
43,217
(3.6
)
(4.7
)
42,941
40,117
7.0
58,906
60,126
61,139
(2.0
)
(3.7
)
60,451
59,055
2.4
$359,811
$336,778
$302,755
6.8
18.8
$
333,573
$
296,965
12.3
U.S. Bancorp Fourth Quarter 2022 Results
AVERAGE DEPOSITS
($ in millions)
Percent Change
4Q
3Q
4Q
4Q22 vs
4Q22 vs
Full Year
Full Year
Percent
2022
2022
2021
3Q22
4Q21
2022
2021
Change
$
118,912
$
114,044
$
135,936
4.3
(12.5
)
$
120,394
$
127,204
(5.4
)
124,522
113,364
108,889
9.8
14.4
117,471
103,198
13.8
135,949
125,389
117,462
8.4
15.7
126,221
117,093
7.8
67,991
67,782
64,763
.3
5.0
67,722
62,294
8.7
328,462
306,535
291,114
7.2
12.8
311,414
282,585
10.2
34,460
36,190
22,788
(4.8
)
51.2
30,576
24,492
24.8
362,922
342,725
313,902
5.9
15.6
341,990
307,077
11.4
$
481,834
$
456,769
$
449,838
5.5
7.1
$
462,384
$
434,281
6.5
U.S. Bancorp Fourth Quarter 2022 Results
NONINTEREST INCOME
($ in millions)
Percent Change
4Q22 vs
3Q22
4Q22 vs
4Q21
$384
$391
$382
(1.8
)
.5
$1,512
$1,507
.3
178
190
155
(6.3
)
14.8
698
575
21.4
385
406
365
(5.2
)
5.5
1,579
1,449
9.0
571
572
483
(.2
)
18.2
2,209
1,832
20.6
314
317
345
(.9
)
(9.0
)
1,298
1,338
(3.0
)
264
285
265
(7.4
)
(.4
)
1,105
1,102
.3
104
81
298
28.4
(65.1
)
527
1,361
(61.3
)
58
56
62
3.6
(6.5
)
235
239
(1.7
)
--
1
15
nm
nm
38
103
(63.1
)
184
170
164
8.2
12.2
654
721
(9.3
)
2,442
2,469
2,534
(1.1
)
(3.6
)
9,855
10,227
(3.6
)
Balance sheet optimization
(399
)
--
--
nm
nm
(399
)
--
nm
Total noninterest income
$
2,043
$
2,469
$
2,534
(17.3
)
(19.4
)
$
9,456
$
10,227
(7.5
)
U.S. Bancorp Fourth Quarter 2022 Results
NONINTEREST EXPENSE
($ in millions)
Percent Change
$
2,402
$
2,260
$
2,223
6.3
8.1
$
9,157
$
8,728
4.9
290
272
268
6.6
8.2
1,096
1,048
4.6
173
131
160
32.1
8.1
529
492
7.5
144
126
129
14.3
11.6
456
366
24.6
459
427
443
7.5
3.6
1,726
1,728
(.1
)
85
43
40
97.7
nm
215
159
35.2
400
336
270
19.0
48.1
1,398
1,207
15.8
3,953
3,595
3,533
10.0
11.9
14,577
13,728
6.2
90
42
--
nm
nm
329
--
nm
$
4,043
$
3,637
$
3,533
11.2
14.4
$
14,906
$
13,728
8.6
U.S. Bancorp Fourth Quarter 2022 Results
ALLOWANCE FOR CREDIT LOSSES
($ in millions)
4Q
2022
% (a)
3Q
2022
% (a)
2Q
2022
% (a)
1Q
2022
% (a)
4Q
2021
% (a)
$
6,455
$
6,255
$
6,105
$
6,155
$
6,300
336
--
--
--
--
USB Combined
210
.23
162
.19
161
.20
162
.21
132
.17
368
--
--
--
--
578
.64
162
.19
161
.20
162
.21
132
.17
401
362
311
112
(13
)
129
--
--
--
--
662
--
--
--
--
1,192
362
311
112
(13
)
(1
)
--
--
--
--
$
7,404
$
6,455
$
6,255
$
6,105
$
6,155
$
6,936
$
6,017
$
5,832
$
5,664
$
5,724
468
438
423
441
431
$
7,404
$
6,455
$
6,255
$
6,105
$
6,155
1.91
%
1.88
%
1.88
%
1.91
%
1.97
%
762
%
1,025
%
863
%
798
%
738
%
729
%
953
%
812
%
753
%
701
%
U.S. Bancorp Fourth Quarter 2022 Results
U.S. Bancorp Fourth Quarter 2022 Results
DELINQUENT LOAN RATIOS AS A PERCENT OF ENDING LOAN BALANCES
(Percent)
Dec 31
2022
Sep 30
2022
Jun 30
2022
Mar 31
2022
Dec 31
2021
.07
.03
.07
.06
.04
.01
.05
.01
--
.03
.08
.10
.12
.18
.24
.88
.74
.69
.74
.73
.12
.11
.10
.11
.11
.13
.11
.13
.14
.15
.19
.12
.19
.21
.20
.62
.46
.53
.55
.76
.36
.35
.40
.45
.53
.88
.74
.69
.74
.73
.37
.32
.35
.37
.35
.38
.30
.35
.38
.42
U.S. Bancorp Fourth Quarter 2022 Results
COMMON SHARES
(Millions)
4Q
2022
3Q
2022
2Q
2022
1Q
2022
4Q
2021
1,486
1,486
1,486
1,484
1,483
45
--
--
3
1
--
--
--
(1
)
--
1,531
1,486
1,486
1,486
1,484
U.S. Bancorp Fourth Quarter 2022 Results
•
•
•
•
•
•
•
•
•
•
•
•
U.S. Bancorp Fourth Quarter 2022 Results
•
•
•
•
•
•
•
•
•
U.S. Bancorp Fourth Quarter 2022 Results
•
•
•
•
CONSOLIDATED STATEMENT OF INCOME
Three Months Ended
Year Ended
(Dollars and Shares in Millions, Except Per Share Data)
December 31,
December 31,
(Unaudited)
2022
2021
2022
2021
$4,532
$2,635
$13,603
$10,747
38
56
201
232
988
624
3,378
2,365
416
40
763
143
5,974
3,355
17,945
13,487
1,081
75
1,872
320
318
18
565
70
282
139
780
603
1,681
232
3,217
993
4,293
3,123
14,728
12,494
1,192
(13
)
1,977
(1,173
)
3,101
3,136
12,751
13,667
384
382
1,512
1,507
178
155
698
575
385
365
1,579
1,449
571
483
2,209
1,832
314
345
1,298
1,338
264
265
1,105
1,102
104
298
527
1,361
58
62
235
239
(18
)
15
20
103
(197
)
164
273
721
2,043
2,534
9,456
10,227
2,402
2,223
9,157
8,728
290
268
1,096
1,048
173
160
529
492
144
129
456
366
459
443
1,726
1,728
85
40
215
159
90
--
329
--
400
270
1,398
1,207
4,043
3,533
14,906
13,728
1,101
2,137
7,301
10,166
171
459
1,463
2,181
930
1,678
5,838
7,985
(5
)
(5
)
(13
)
(22
)
$925
$1,673
$5,825
$7,963
$853
$1,582
$5,501
$7,605
$.57
$1.07
$3.69
$5.11
$.57
$1.07
$3.69
$5.10
$.48
$.46
$1.88
$1.76
1,501
1,483
1,489
1,489
1,501
1,484
1,490
1,490
CONSOLIDATED ENDING BALANCE SHEET
(Dollars in Millions)
$53,542
$28,905
88,740
41,858
72,910
132,963
2,200
7,775
135,690
112,023
55,487
39,053
115,845
76,493
26,295
22,500
54,896
61,959
388,213
312,028
(6,936
)
(5,724
)
381,277
306,304
3,858
3,305
12,373
10,262
7,155
3,738
52,750
38,174
$674,805
$573,284
$137,743
$134,901
387,233
321,182
524,976
456,083
31,216
11,796
39,829
32,125
27,552
17,893
623,573
517,897
6,808
6,371
21
21
8,712
8,539
71,901
69,201
(25,269
)
(27,271
)
(11,407
)
(1,943
)
50,766
54,918
466
469
51,232
55,387
$674,805
$573,284
NON-GAAP FINANCIAL MEASURES
(Dollars in Millions, Unaudited)
$51,232
$47,978
$49,069
$51,668
$55,387
(6,808
)
(6,808
)
(6,808
)
(6,808
)
(6,371
)
(466
)
(465
)
(464
)
(468
)
(469
)
(11,395
)
(9,165
)
(9,204
)
(9,304
)
(9,323
)
(2,792
)
(735
)
(780
)
(762
)
(785
)
29,771
30,805
31,813
34,326
38,439
41,560
44,094
42,944
41,950
41,701
(1,299
)
(1,300
)
(1,300
)
(1,298
)
(1,733
)
40,261
42,794
41,644
40,652
39,968
674,805
600,973
591,381
586,517
573,284
(11,395
)
(9,165
)
(9,204
)
(9,304
)
(9,323
)
(2,792
)
(735
)
(780
)
(762
)
(785
)
660,618
591,073
581,397
576,451
563,176
496,500
*
456,928
441,804
427,174
418,571
(620
)*
(337
)
(317
)
(351
)
(357
)
methodology (e)
495,880
*
456,591
441,487
426,823
418,214
4.5
%
5.2
%
5.5
%
6.0
%
6.8
%
6.0
6.7
7.2
8.0
9.2
8.1
9.4
9.4
9.5
9.6
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
$853
$1,718
$1,464
$1,466
$1,582
67
34
32
37
32
920
1,752
1,496
1,503
1,614
3,650
6,951
6,000
6,096
6,403
49,731
50,284
49,633
53,934
55,875
(6,808
)
(6,808
)
(6,808
)
(6,619
)
(6,865
)
(466
)
(464
)
(467
)
(468
)
(633
)
(9,202
)
(9,192
)
(9,246
)
(9,320
)
(9,115
)
(1,637
)
(758
)
(783
)
(779
)
(656
)
31,618
33,062
32,329
36,748
38,606
11.5
%
21.0
%
18.6
%
16.6
%
16.6
%
$4,293
$3,827
$3,435
$3,173
$3,123
32
30
29
27
27
4,325
3,857
3,464
3,200
3,150
4,325
3,857
3,464
3,200
3,150
2,043
2,469
2,548
2,396
2,534
(18
)
1
19
18
15
6,386
6,325
5,993
5,578
5,669
4,043
3,637
3,724
3,502
3,533
85
43
40
47
40
3,958
3,594
3,684
3,455
3,493
63.3
%
57.5
%
62.1
%
62.8
%
62.3
%
62.0
56.8
61.5
61.9
61.6
*
(1)
(2)
(3)
(4)
NON-GAAP FINANCIAL MEASURES
Three Months Ended
(Dollars in Millions, Unaudited)
December 31,
2022
September 30,
2022
$925
$1,812
(952
)
(33
)
1,877
1,845
7,447
7,320
622,064
588,764
1.20
%
1.24
%
$853
$1,718
(948
)
(33
)
1,801
1,751
7,145
6,947
42,457
43,012
16.8
%
16.2
%
$4,293
$3,827
32
30
4,325
3,857
4,325
3,857
2,043
2,469
(18
)
1
6,386
6,325
(399
)
--
18
--
6,767
6,325
4,043
3,637
90
42
3,953
3,595
85
43
3,868
3,552
58.4
%
56.8
%
57.2
%
56.2
%
$1,801
$1,751
1,501
1,486
$1.20
$1.18
(1)
-
$399 million ($297 million net-of-tax) of losses primarily related to interest rate hedging positions entered into after
regulatory approval was obtained to manage the impact of interest rate volatility on capital prior to closing the MUFG Union Bank acquisition.
-
$90 million ($67 million net-of-tax) of merger and integration charges.
-
$791 million ($588 million net-of-tax) of provision for credit losses related to initially providing for acquired loans as well
as charges related to the securitization of indirect automobile loans to optimize the balance sheet capital management.
(2)
NON-GAAP FINANCIAL MEASURES
(Dollars in Millions, Unaudited)
December 31,
$853
67
920
(948
)
1,868
7,411
49,731
(6,808
)
(466
)
(9,202
)
(1,637
)
31,618
23.4
%
$578
368
210
833
359,811
.23
%
$1,101
32
(1,280
)
2,413
171
32
(328
)
531
22.0
%
(1)
-
$399 million ($297 million net-of-tax) of losses primarily related to interest rate hedging positions entered into after
regulatory approval was obtained to manage the impact of interest rate volatility on capital prior to closing the MUFG Union Bank acquisition.
-
$90 million ($67 million net-of-tax) of merger and integration charges.
-
$791 million ($588 million net-of-tax) of provision for credit losses related to initially providing for acquired loans as well
as charges related to the securitization of indirect automobile loans to optimize the balance sheet capital management.
(2)
(3)
(4)
NON-GAAP FINANCIAL MEASURES
Year Ended
(Dollars in Millions, Unaudited)
December 31,
2022
December 31,
2021
Percent
Change
$5,501
$7,605
170
126
5,671
7,731
50,882
54,442
(6,761
)
(6,255
)
(466
)
(632
)
(9,240
)
(9,037
)
(991
)
(650
)
33,424
37,868
17.0
%
20.4
%
$14,728
$12,494
118
106
14,846
12,600
14,846
12,600
9,456
10,227
20
103
24,282
22,724
14,906
13,728
215
159
14,691
13,569
61.4
%
60.4
%
60.5
%
59.7
%
$14,846
$12,600
9,456
10,227
24,302
22,827
6.5
%(f)
302
--
(399
)
--
24,399
22,827
6.9
%(g)
14,906
13,728
8.6
%(h)
221
--
329
--
14,356
13,728
4.6
%(i)
(2.1
)%
2.3
%
$5,501
(1,134
)
6,635
1,490
$4.45
(1)
(2)
(3)
-
$399 million ($297 million net-of-tax) of losses primarily related to interest rate hedging positions entered into after
regulatory approval was obtained to manage the impact of interest rate volatility on capital prior to closing the MUFG Union Bank acquisition.
-
$329 million ($253 million net-of-tax) of merger and integration charges.
-
$791 million ($588 million net-of-tax) of provision for credit losses related to initially providing for acquired loans as well
as charges related to the securitization of indirect automobile loans to optimize the balance sheet capital management.
LINE OF BUSINESS FINANCIAL
PERFORMANCE
Preliminary data
($ in millions)
Net Income Attributable
to U.S. Bancorp
Percent Change
Net Income Attributable
to U.S. Bancorp
Business Line
4Q
2022
3Q
2022
4Q
2021
4Q22 vs
3Q22
4Q22 vs
4Q21
Full Year
2022
Full Year
2021
$542
$504
$308
7.5
76.0
$1,841
$1,564
17.7
462
460
481
.4
(4.0
)
1,806
2,357
(23.4
)
395
397
205
(.5
)
92.7
1,313
842
55.9
229
330
367
(30.6
)
(37.6
)
1,324
1,704
(22.3
)
(703
)
121
312
nm
nm
(459
)
1,496
nm
$925
$1,812
$1,673
(49.0
)
(44.7
)
$5,825
$7,963
(26.8
)
Income Before Provision
and Taxes
Percent Change
Income Before
Provision
and Taxes
4Q
2022
3Q
2022
4Q
2021
4Q22 vs
3Q22
4Q22 vs
4Q21
Full Year
2022
Full Year
2021
$701
$740
$509
(5.3
)
37.7
$2,604
$2,151
21.1
831
654
640
27.1
29.8
2,636
3,006
(12.3
)
529
533
278
(.8
)
90.3
1,760
1,130
55.8
649
725
622
(10.5
)
4.3
2,746
2,621
4.8
(385
)
37
102
nm
nm
(350
)
191
nm
$2,325
$2,689
$2,151
(13.5
)
8.1
$9,396
$9,099
3.3
CORPORATE AND
COMMERCIAL BANKING
Preliminary
data
($ in millions)
Percent Change
$986
$938
$694
5.1
42.1
$3,468
$2,853
21.6
235
255
251
(7.8
)
(6.4
)
1,008
1,039
(3.0
)
--
--
--
--
--
--
--
--
1,221
1,193
945
2.3
29.2
4,476
3,892
15.0
510
453
436
12.6
17.0
1,862
1,741
7.0
10
--
--
nm
nm
10
--
nm
520
453
436
14.8
19.3
1,872
1,741
7.5
701
740
509
(5.3
)
37.7
2,604
2,151
21.1
(22
)
68
98
nm
nm
149
65
nm
723
672
411
7.6
75.9
2,455
2,086
17.7
181
168
103
7.7
75.7
614
522
17.6
542
504
308
7.5
76.0
1,841
1,564
17.7
--
--
--
--
--
--
--
--
$542
$504
$308
7.5
76.0
$1,841
$1,564
17.7
$140,713
$131,578
$106,491
6.9
32.1
$127,916
$103,404
23.7
4,786
4,506
4,690
6.2
2.0
4,532
4,537
(.1
)
1,922
1,912
1,912
.5
.5
1,915
1,715
11.7
215
3
4
nm
nm
57
5
nm
159,802
147,635
118,274
8.2
35.1
143,370
115,423
24.2
54,591
53,280
66,292
2.5
(17.7
)
57,451
61,991
(7.3
)
107,317
100,407
75,621
6.9
41.9
97,169
71,711
35.5
161,908
153,687
141,913
5.3
14.1
154,620
133,702
15.6
15,267
14,607
13,685
4.5
11.6
14,403
13,906
3.6
CONSUMER AND BUSINESS
BANKING
Preliminary data
($ in millions)
Percent Change
4Q22 vs
3Q22
4Q22 vs
4Q21
$2,072
$1,724
$1,504
20.2
37.8
$6,904
$6,085
13.5
364
337
581
8.0
(37.3
)
1,556
2,496
(37.7
)
--
--
--
--
--
--
--
--
2,436
2,061
2,085
18.2
16.8
8,460
8,581
(1.4
)
1,573
1,404
1,442
12.0
9.1
5,783
5,563
4.0
32
3
3
nm
nm
41
12
nm
1,605
1,407
1,445
14.1
11.1
5,824
5,575
4.5
831
654
640
27.1
29.8
2,636
3,006
(12.3
)
215
40
(1)
nm
nm
228
(136)
nm
616
614
641
.3
(3.9
)
2,408
3,142
(23.4
)
154
154
160
--
(3.8
)
602
785
(23.3
)
462
460
481
.4
(4.0
)
1,806
2,357
(23.4
)
--
--
--
--
--
--
--
--
$462
$460
$481
.4
(4.0
)
$1,806
$2,357
(23.4
)
$155,173
$143,022
$140,630
8.5
10.3
$145,079
$140,890
3.0
2,485
3,043
6,570
(18.3
)
(62.2
)
3,117
8,093
(61.5
)
3,255
3,241
3,262
.4
(.2
)
3,249
3,429
(5.2
)
4,584
3,726
2,966
23.0
54.6
3,785
2,761
37.1
170,688
158,475
159,333
7.7
7.1
160,713
161,385
(.4
)
35,708
31,193
33,360
14.5
7.0
32,256
33,063
(2.4
)
171,258
166,223
162,132
3.0
5.6
167,938
157,592
6.6
206,966
197,416
195,492
4.8
5.9
200,194
190,655
5.0
13,105
12,468
12,212
5.1
7.3
12,550
12,319
1.9
WEALTH MANAGEMENT AND INVESTMENT
SERVICES
Preliminary data
($ in millions)
Percent Change
$522
$475
$250
9.9
nm
$1,624
$1,002
62.1
654
651
583
.5
12.2
2,553
2,222
14.9
--
--
--
--
--
--
--
--
1,176
1,126
833
4.4
41.2
4,177
3,224
29.6
639
587
551
8.9
16.0
2,390
2,079
15.0
8
6
4
33.3
nm
27
15
80.0
647
593
555
9.1
16.6
2,417
2,094
15.4
529
533
278
(.8
)
90.3
1,760
1,130
55.8
2
3
5
(33.3
)
(60.0
)
9
7
28.6
527
530
273
(.6
)
93.0
1,751
1,123
55.9
132
133
68
(.8
)
94.1
438
281
55.9
395
397
205
(.5
)
92.7
1,313
842
55.9
--
--
--
--
--
--
--
--
$395
$397
$205
(.5
)
92.7
$1,313
$842
55.9
$23,705
$22,871
$19,620
3.6
20.8
$22,410
$18,095
23.8
334
249
229
34.1
45.9
273
242
12.8
1,701
1,700
1,656
.1
2.7
1,720
1,628
5.7
356
311
130
14.5
nm
308
84
nm
27,436
26,439
22,970
3.8
19.4
26,036
21,303
22.2
22,594
23,851
29,314
(5.3
)
(22.9
)
24,721
24,663
.2
78,236
73,229
74,620
6.8
4.8
73,461
76,000
(3.3
)
100,830
97,080
103,934
3.9
(3.0
)
98,182
100,663
(2.5
)
3,759
3,726
3,318
.9
13.3
3,675
3,154
16.5
PAYMENT SERVICES
Preliminary data
($ in millions)
Percent Change
$631
$627
$617
.6
2.3
$2,498
$2,457
1.7
952
995
906
(4.3
)
5.1
3,799
3,550
7.0
--
--
--
--
--
--
--
--
1,583
1,622
1,523
(2.4
)
3.9
6,297
6,007
4.8
900
863
868
4.3
3.7
3,415
3,254
4.9
34
34
33
--
3.0
136
132
3.0
934
897
901
4.1
3.7
3,551
3,386
4.9
649
725
622
(10.5
)
4.3
2,746
2,621
4.8
344
285
133
20.7
nm
980
349
nm
305
440
489
(30.7
)
(37.6
)
1,766
2,272
(22.3
)
76
110
122
(30.9
)
(37.7
)
442
568
(22.2
)
229
330
367
(30.6
)
(37.6
)
1,324
1,704
(22.3
)
--
--
--
--
--
--
--
--
$229
$330
$367
(30.6
)
(37.6
)
$1,324
$1,704
(22.3
)
$37,023
$35,819
$32,351
3.4
14.4
$34,627
$30,856
12.2
110
392
356
(71.9
)
(69.1
)
634
93
nm
3,284
3,292
3,219
(.2
)
2.0
3,305
3,184
3.8
387
405
473
(4.4
)
(18.2
)
423
507
(16.6
)
42,699
42,090
38,280
1.4
11.5
41,109
36,549
12.5
3,265
3,312
4,247
(1.4
)
(23.1
)
3,410
4,861
(29.8
)
152
171
155
(11.1
)
(1.9
)
162
145
11.7
3,417
3,483
4,402
(1.9
)
(22.4
)
3,572
5,006
(28.6
)
8,544
8,257
7,936
3.5
7.7
8,235
7,642
7.8
TREASURY AND CORPORATE
SUPPORT
Preliminary data
($ in millions)
Percent Change
$114
$93
$85
22.6
34.1
$352
$203
73.4
(144
)
230
198
nm
nm
520
817
(36.4
)
(18
)
1
15
nm
nm
20
103
(80.6
)
(48
)
324
298
nm
nm
892
1,123
(20.6
)
336
287
196
17.1
71.4
1,241
932
33.2
1
--
--
nm
nm
1
--
nm
337
287
196
17.4
71.9
1,242
932
33.3
(385
)
37
102
nm
nm
(350
)
191
nm
653
(34
)
(248)
nm
nm
611
(1,458)
nm
(1,038
)
71
350
nm
nm
(961
)
1,649
nm
(340
)
(54
)
33
nm
nm
(515
)
131
nm
(698
)
125
317
nm
nm
(446
)
1,518
nm
(5
)
(4
)
(5)
(25.0
)
--
(13
)
(22)
40.9
$(703)
$121
$312
nm
nm
$(459
)
$1,496
nm
$3,197
$3,488
$3,663
(8.3
)
(12.7
)
$3,541
$3,720
(4.8
)
205,152
196,698
207,935
4.3
(1.3
)
203,214
196,211
3.6
--
--
--
--
--
--
--
--
18
--
--
nm
nm
4
--
nm
221,439
214,125
233,502
3.4
(5.2
)
220,921
221,872
(.4
)
2,754
2,408
2,723
14.4
1.1
2,556
2,626
(2.7
)
5,959
2,695
1,374
nm
nm
3,260
1,629
nm
8,713
5,103
4,097
70.7
nm
5,816
4,255
36.7
8,590
10,762
18,091
(20.2
)
(52.5
)
11,553
16,789
(31.2
)
