The following is excerpted from the question-and-answer section of the transcript.
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Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst
: I guess, the question for USB is I don't think your investors doubt the through-the-cycle credit outperformance or even the PPNR
strength. It's well noted that the adjustment to your revenue outlook was very minimal relative to peers. I think the big question
that investors have is you're starting from 8.5% CET1. You note earnings power and capital -- organic capital generation of 20 to 25
basis points.
But as we anticipate Cat II, and you're telling us that the Fed could decide and not your asset size necessarily could decide when that
line is, what is the new endpoint of CET1 in your view? Because as we think about going into that new category, I don't think investors
think that 8.5% to 9% is the right bogey. And then the sort of the sub-question to that, Andy, is, is your priority getting to a higher
capital level faster? And if so, how are you thinking about dividend growth this year?
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APRIL 19, 2023 / 2:00PM, USB.N - Q1 2023 US Bancorp Earnings Call
Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst
: And is 9.5%, 10% an appropriate new bogey as we think about the shift change for next year on Cat II?
Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst
: Go ahead.
Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst
: And just if I could sneak in one last one in, one of your peers closest to you in size said the TLAC was pretty much done and dusted.
I noticed that you mentioned your superior debt rating several times. Clearly, the debt markets are still a little bit dislocated. But
how should we think about the wholesale funding stack from here?
I noticed on a period-end basis, short-term borrowings went up by $25 billion. Terry, as you potentially anticipate TLAC, how should
we think about your senior debt issuance plans or really sort of hold that level of borrowings until there's a little bit more -- less
dislocation in the senior debt market?
Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst
: Yes, sorry to prolong the call, I just had one follow-up question. Andy, I asked the question in a compound way, so I apologize. But
if you think about accreting to over 9% CET1 by year-end, how would you stack rank dividend growth as a priority?
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APRIL 19, 2023 / 2:00PM, USB.N - Q1 2023 US Bancorp Earnings Call
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