US Bancorp at RBC Capital Markets Global Financial Institutions Conference Transcript

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

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Maybe we'll start off with a question that both of you may want to address. But obviously, we're two months into the year, there's been a lot of activity this week in the political scene. But how is the economy from your guys' view going? And how are you positioned to navigate through these kind of volatile times?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : We've seen in the interest rate environment today, the front end of the curve around 4%, of course, and up until this week, we had a positive slope. And you're really going to go back 20 years to a period where you had the front end of the curve over 3% and a positive slope. So if we do get back to that this year, where you do have that positive slope, but the front end hovering around 3% and 3.25% for tying into your Fed fund rate cuts, what kind of impact could that have on net interest income for you folks?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Yeah. Maybe moving over to the balance sheet. When we talked about or when you guys look at loan growth for the year, can you share with us some of the puts and takes that you're seeing in the loan portfolio, both in the Commercial and Consumer side?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Have you seen any evidence? Some of your peers have said at the conference that the C&I loan growth has picked up a little bit, maybe due to some inventory building and anticipation of tariffs. Have you seen any of that? Are you accustomed?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Right. And Arijit, we move over to the right side of the balance sheet, deposits. Maybe you can share with us the trends you're seeing in deposits, also deposit betas. What are you seeing from the Consumers and the small business folks?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Okay.

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Maybe coming back again to the Consumer side of the business. When you look at how you're growing Consumer and Business Banking, you mentioned the suite product. What's the anchor product for the Consumer and how do you build upon that to grow the business?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Right.

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Yeah. This interconnectedness is so important because it deepens the relationship with your customers. We know that heightens profitability. How do you measure it or how do you incentivize your people to really move this forward because it's so critical?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Some of your peers have used expansion of their branches as a way of driving their Consumer business and small business. How do you see that part playing out with your guy's strategy?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Yeah. One of the things that has always differentiated US Bancorp from many of your peers is your Payments business. And maybe, John, if you could talk about the growth opportunities in the Payments business and then also the challenges. Obviously, it's a very competitive business.

Question: Gerard Cassidy - RBC Capital Markets - Analyst : So what do you see for challenges?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Okay.

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Okay. Got it.

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Okay.

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Yeah. Got it. Thank you. Coming back to the competition, we hear from many of your peers at this conference and other conferences. Everybody seems to be highlighting Payments as an avenue of growth. Are you seeing more competition or how has it evolved over the last five or so years? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2025 / 4:20PM, USB.N - US Bancorp at RBC Capital Markets Global Financial Institutions Conference

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Yeah. Yeah.

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Yeah.

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Yeah. No. Very good. One of the other areas that is unique to a regional bank is your global transaction services business. And so maybe can you tell us how you differentiate yourselves versus some of the bigger players, the trust banks or the G-SIB that are...

Question: Gerard Cassidy - RBC Capital Markets - Analyst : In that business? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2025 / 4:20PM, USB.N - US Bancorp at RBC Capital Markets Global Financial Institutions Conference

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Yeah.

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Is there a targeted market or targeted client base for this product that you're zeroing in on?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Yeah. Got it. Maybe sticking with these Payments, the Fund Servicing and Corporate Trust business, again, unique to you folks. How is that growing and what do you see for the opportunities there?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Yeah. At Investor Day, as you guys referenced, you're going from defense to offense. And maybe, Arijit, you could talk to us about the legacy Union Bank customers in California and an update on what you guys are doing to grow that business?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Wow Shifting over the capital, obviously, the Basel III endgame is changing from what it was originally proposed in the summer of 2023. Assuming it's a watered down or softer version. Can you share with us what that might mean for US Bancorp and the opportunity to return more capital to shareholders?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : One of the identifying factors for you as Bancorp over the years has been underwriting strength. And credit's always been something that is a hallmark here. Can you share with us what you're seeing on the credit side? What trends might be developing or any areas that you're, aside from Commercial real estate, office.

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Which we're all familiar with.

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Yeah.

Question: Gerard Cassidy - RBC Capital Markets - Analyst : And we're running out of time. In fact, we're going into the red zone. But I'll squeeze in one last question about driving shareholder value. Positive operating leverage, of course, is important. What are some of the levers that you can use to drive operating leverage, even high positive operating leverage?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : And then how do you measure whether you're increasing long-term shareholder value?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Great. We've run out of time. But I want to thank you guys for participating. Please join me in a round of applause thanking management and now the ballroom for folks that are interested in the alternative asset space. Thank you.