US Bancorp at BancAnalysts Association of Boston Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Gerry Benson - Fidelity Investments - Analyst : Yeah, my mic. Well, John, maybe we can start with you. Reported a strong third quarter net interest income growth followed by the expectation for that to remain relatively stable in fourth quarter. Maybe you can touch upon the main puts and takes underlying that outlook?

Question: Gerry Benson - Fidelity Investments - Analyst : I guess just following on that, does it matter much whether the fed goes 25 or another, say even 75 this year?

Question: Gerry Benson - Fidelity Investments - Analyst : Right, okay. And then just switching over to the fee income growth, you reiterated your fiscal year, mid-single digit fee outlook at the lower end of the range. I'm just curious what gives you confidence in the outlook for the fourth quarter, given, factoring in the near-term headwinds and payments?

Question: Gerry Benson - Fidelity Investments - Analyst : Okay, thanks John. Stephen, you just highlighted how U.S. Banc has reported very strong growth in the capital market space over the past several years. Maybe you can elaborate some of the key focus areas that support the outlook for 12% to 15% revenue growth in the medium term and just help us in defining medium term as well? Stephen Philipson - US Bancorp - Senior Executive Vice President and Head of Wealth, Corporate, Commercial, and Institutional Banking I define medium term as the next five years. And what gives us confidence is sort of a proven formula that we've had between going deeper with clients and that up-tier opportunity that we continue to see and that up-tier, when we up-tier with clients in those syndicated facilities, the most immediate beneficiary is typically our capital markets business is when you go from being a participant to a lead in the loan facility, you tend to lead the bond deals, you tend to lead the hedging activity. So it's that depth opportunity that from a client perspective, but it's also expanding the breadth of products. And we continue to see these opportunities as we've seen in commodities and structured credit over the past year where our customers are asking us to get into these products and commodities is such a good example where there's just such pent up demand for a new counterparty, that we flip the switch and turn the product on and are immediately getting a nice fee income flow. And we have other opportunities like that. We added, we have picked up talent with some product expertise in areas like the fees and structured notes where we're just putting these teams in place and we can see the go-forward growth areas like customer repo, which we haven't historically been in. So we've got a nice pipeline of products and initiatives and in addition to that, that client up-tiering, that gives us a lot of confidence, and these can be volatile businesses. And one of the nice things that we've experienced over the last several years is that opportunity to continue to up-tier and continue to add products is a nice offset to the natural market volatility.

Question: Gerry Benson - Fidelity Investments - Analyst : Okay, thanks. And then within private capital, you announced the new private capital and Global Asset Management division earlier in the year. Can you discuss USB's primary focus and where you see the growth opportunities ahead? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 07, 2024 / 3:30PM, USB.N - US Bancorp at BancAnalysts Association of Boston Conference Stephen Philipson - US Bancorp - Senior Executive Vice President and Head of Wealth, Corporate, Commercial, and Institutional Banking Yeah, our primary focus is really partnering with these firms in providing complementary -- we view them as complementary partners. We don't have the same they're not the same existential threat to us as they are to some others in the industry because we've never had a big leverage finance business. So some of the customers that are exiting the banking sector to go to that private capital space are not in the credit box that we would normally be going after. So we don't have that competitive threat. So it's more how do we support their growth. And we're doing that with our investment services product, which they highly value. I mean, we are a provider of choice and these firms want to do business with us, they prefer to do business with us. So it's leveraging that as a gateway to then introduce the rest of the relationship, introduce the structured credit lending, introduce some of the capital markets, hedging activity, introduce payments. And again, it's working out really well because the more that segment grows, we're actually a beneficiary. It creates annuity like revenue in our investment services businesses. And as we tack on some more of those fee businesses, it just builds upon them.

Question: Gerry Benson - Fidelity Investments - Analyst : Okay, great. Actually let me pause and see if there's any questions from the audience.

Question: Gerry Benson - Fidelity Investments - Analyst : All right. Thank you. We're actually out of time. That was great. We really appreciate it. Thank you, John and Stephen.