Wealth Management & Securities Services. Wealth Management & Securities Services

Transcription

1 U.S. Bancorp Investor Conference Wealth Management & Securities Services Diane Thormodsgard Vice Chairman Wealth Management & Securities Services September 5, 2007

2 Forward-looking Statements This presentation 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. These statements often include the words may, could, would, should, believes, expects, anticipates, estimates, intends, plans, targets, potentially, probably, projects, outlook or similar expressions. These forward-looking statements cover, among other things, anticipated future revenue and expenses and the future plans and prospects of the Company. Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated, including changes in general business and economic conditions, changes in interest rates, legal and regulatory developments, increased competition from both banks and non-banks, changes in customer behavior and preferences, effects of mergers and acquisitions and related integration, effects of critical accounting policies and judgments, and management s ability to effectively manage credit risk, market risk, operational risk, legal risk, and regulatory and compliance risk. For discussion of these and other risks that may cause actual results to differ from expectations, refer to our Annual Report on Form 10-K for the year ended December 31, 2006, on file with the Securities and Exchange Commission, including the sections entitled Risk Factors and Corporate Risk Profile. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update them in light of new information or future events. 2

3 Wealth Management & Securities Services Profile Capabilities Investing for Growth Long-term Growth Expectations Deepening Customer Relationships Core Products & Services Maximize Shareholder Value Investing for Growth Product Innovation Expanding Product and Distribution Distinctive Capabilities Strong Core Financial Institution 3

4 Wealth Management & Securities Services Business Units Contribution to U.S. Bancorp Wealth Management Private Client Group 15% 14% Investments & Insurance Securities Services Revenue Net Income Asset Management (FAF Advisors) Corporate Trust Fund Services Institutional Trust & Custody (IT&C) 14% 4% Deposits Loans 2Q07 YTD 4

5 Wealth Management & Securities Services Institutional Trust & Custody Revenue Mix 7% FAF Advisors 9% Corporate Trust 27% Wealth Management 47% Fund Services 10% Business Line Scale Top 2 municipal finance trustee Top 3 ABS/MBS trustee Top 5 bank-affiliated U.S. mutual fund family Top 5 full-service, third-party provider of mutual fund services $162 billion in assets under management $4 trillion in assets under administration 2Q07 YTD 5

6 Wealth Management & Securities Services 3,000 Financial Performance 2,250 1,534 1,645 1,951 Wealth Management & Securities Services YTD Growth Rate Revenue 7.2% 18.6% 4.7% Pre-Provision Income 16.3% 22.1% 11.7% Net Income 17.5% 22.5% 12.6% 1, , YTD 2006 YTD 2007 Net Income Revenue $ in millions 6

7 Wealth Management & Securities Services 2,000 1,500 1, % 19.4% Q07 YTD Fee Income 8.1% 1Q 2Q 3Q 4Q Growth Drivers Corporate Trust FAF Advisors Wholesale Distribution Fund Services Expertise Wealth Management Initiative $ in millions, Y/Y growth 7

9 Core Products and Services Wealth Management Corporate Trust FAF Advisors Fund Services Institutional Trust & Custody 9

10 Wealth Management Private Banking Personal Trust Investment Management Financial Planning Trusted Advice Mutual Funds Variable/Fixed Annuities Stocks, Bonds, Options Discount Brokerage Life / Long-term Care Insurance Planning Services Brokerage Insurance Business Banking Team Leader Client Outside Advisors Private Banking Mortgage Investment Management Personal Trust 10

11 Wealth Management Financial Consultant Financial Specialist Private Client Relationship Manager 11

12 Wealth Management Capabilities: Broad array of world class products and services Local service delivery by trusted advisors Robust credit process Strong internal partnerships Considerable untapped potential 12

13 Corporate Trust Top 2 municipal finance trustee Top 3 ABS/MBS trustee Revenue by Business Segment Trustee Paying Agent Escrow Agent Document Custody Document Custody Services 6% Structured 27% Municipal, Corporate & Escrow 64% Default 3% 2006 Revenue 13

14 Corporate Trust National Business with Local Presence 46 Offices 118,000 Customers 786,000 Bondholders $2.9 Trillion AUA 14

15 Corporate Trust Capabilities: Size that provides sound performance and scale efficiencies Experienced trust professionals with long-term relationships Specialization that affords focus and risk management Large internal referral network Committed industry leader (80+ years) 15

16 FAF Advisors Top 5 bank-affiliated U.S. mutual fund family Advisor to First American Funds Customized Portfolio Management Securities Lending Assets Under Management Equity 17% Money Market 57% Fixed Income 26% AUM - $109 billion 16

17 FAF Advisors Capabilities: Award winning performance 2006 & 2005 Lipper Awards Best Fund Managers by BusinessWeek Scalable infrastructure is in place Realigned investment team & compensation Enhanced compliance & legal teams Developed an integrated product and marketing team focused on sales Internal and third party distribution Proven process-driven investment culture 17

18 Fund Services Fund Sponsor Custody, Lending Services Fund CCO Support Administration & Compliance Prospect Services Fund Accounting Transfer Agent & Shareholder Services Fund Distribution & Marketing Support 18

19 Fund Services Capabilities: Focus is on small to mid-sized fund groups that require: Higher levels of service than larger competitors are willing to provide Commitments to technology that smaller competitors are unable to provide Tenured personnel Award winning services 19

20 Institutional Trust & Custody Securities transaction processing Accounting & reporting Securities lending Investment management Retirement plan trustee Performance measurement Benefits payments 2006 Revenue by Customer Segment Government Insurance Advisors/brokers 9% 9% Corporations 38% 9% 4% Other 20% 11% Financial Institutions Foundations/ Endowments 20

21 Institutional Trust & Custody Capabilities: Middle market focus Tenured staff delivering local services Recent acquisition of Wachovia book of business expands geographical presence and increases sales Quality core custodial processing capabilities 21

22 Distinctive Capabilities Core Products and Services Excellent trust capabilities Established footprint-wide broker/dealer Broad private banking and advisory services Proprietary investment manufacturing Distinctive Capabilities Corporate Trust scale First American Funds performance Fund Services expertise 22

24 Wealth Management & Securities Services Investing for Growth Corporate Trust FAF Advisors Fund Services Wealth Management Initiative Building Deeper Relationships Innovation 24

25 Corporate Trust Growth Through Acquisition Recent Deals LaSalle Corporate Trust (12/06) SunTrust Corporate Trust (9/06) Wachovia Corporate Trust (12/05) National City Corp Trust (6/04) State Street Corp Trust (12/02) 9 Deals prior to 2002 Market Share % Municipal Structured

26 Corporate Trust Strategic benefits of recent acquisitions: Complement U.S. Bank s existing business Significant cost savings opportunities Expand and/or strengthen geographic presence Acquire deposits and mutual fund balances for First American Funds Enhance referral opportunities Solidify U.S. Bank as top tier corporate trust provider 26

27 Corporate Trust 70% Operating Efficiency Ratio 60% 61% Power of a Scale Business 50% 40% 37% 44% 40% 30% 20% Pre-acquisition Year Following Acquisition Typical Acquisition U.S. Bank Corporate Trust 27 Acquisition efficiency ratio for illustrative purposes, excludes intangible amortization Corporate Trust efficiency ratio based on internal managerial reporting

28 Corporate Trust Growth Drivers: Acquisitions Increased market share of key products Diversify product offerings Leverage internal referral network Increase deal flow from influencers 28

29 FAF Advisors Key Stages of Development Distribution Successfully Commenced Third-Party Execution Performance Infrastructure

30 FAF Advisors Building a Quality National Team National Distribution Comprehensive Coverage 1 st Quarter 2005 National Distribution Comprehensive Coverage 1 st Quarter

31 FAF Advisors Revenue Source YTD 10% Third-Party 42% 90% Proprietary 58% Source: FAF Advisors, Inc Estimated 31

32 Fund Services Growth in Services for Mutual Fund Clients Number of Shareholder Accounts (millions) Growth Opportunities: Industry consolidation Regulatory changes Q07 32

33 Fund Services Growth in Services for Alternative Product Clients 40 Assets ($ in Billions) Growth Opportunities: Fund Services reputation Product demand Q07 33

34 Wealth Management Initiative Objective: Transform the Wealth Management group into a more integrated and coordinated group to fully capture the significant opportunity created by the impending retirement of the baby boomers Dimensions: 686 FINRA / Insurance Licensed Representatives 730 Insurance Licensed Representatives 1,543 Personal Trust / Banking Representatives 34

35 Wealth Management Initiative Objectives: Collaborate seamlessly around the client Motivate our vast referral network Attract younger and more affluent clients by ensuring that product, branding, and talent are aligned Invest thoughtfully in the business, while optimizing existing resources 35

36 Building Deeper Relationships Deepen consumer wealth management penetration with existing high potential retail customers Review Corporate Trust clients for Wholesale Banking and Fund Services opportunities Increase frequency of referrals from Wholesale Banking to Wealth Management Leverage additional opportunities with new clients from recent acquisitions 36

37 Innovation Retirement Planning Center Edina, MN Branch 37

39 Wealth Management & Securities Services CAGR 19.1% Long-term Growth Expectations 12.8% 7.7% 9.0% 5.0% 12.0% Revenue Expense Pre- Provision Income Revenue Expense Pre- Provision Income 39

40 U.S. Bancorp Investor Conference Wealth Management & Securities Services Diane Thormodsgard Vice Chairman Wealth Management & Securities Services September 5, 2007

41 41 Appendix

42 Wealth Management & Securities Services $ in millions Financial Performance YTD 2006 YTD 2007 $ $ %B/(W) $ %B/(W) $ $ %B/(W) Net Interest Income % % (4.7%) Noninterest Income 1,169 1, % 1, % % Total Revenue 1,534 1, % 1, % 972 1, % Expense (0.5%) 1,017 (15.6%) % Pre-Provision Contribution % % % Net Charge-offs % % 2 0 NA Pre-Tax Contribution % % % Net Income % % % Efficiency Ratio 57.1% 53.5% 3.6% 52.1% 1.4% 53.4% 50.3% 3.1% Average Loans 4,818 4, % 5, % 5,086 5, % Average Deposits 12,006 13, % 14, % 14,047 16, % Designations, assignments and allocations change from time to time as management systems are enhanced, methods evaluating performance or product lines change or business segments are realigned to better respond to the Company s diverse customer base. During 2007, certain organization and methodology changes were made and, accordingly, historical results were restated and presented on a comparable basis. 42