U.S. Bancorp

Welcome to the U.S. Bancorp's third quarter 2020 earnings conference call. Following a review of the results by Andy Circeri, Chairman, President, and Chief Executive Officer, and Terry Dolan, Vice Chair and Chief Financial Officer, there will be a formal question and answer session. If you would like to ask a question, please press star 1 on your touchtone phone. and press the pound key to withdraw. This call will be recorded and available for replay beginning today at approximately 12 o'clock p.m. Eastern Time through Wednesday, October 21st at 12 o'clock midnight Eastern Time. I will now turn the conference over to Jen Thompson, Director of Investor Relations and Economic Analysis for U.S. Bancorp.

Thank you, Cindy, and good morning, everyone. With me today are Andy Cesari, our chairman, president, and CEO, and Terry Dolan, our chief financial officer. Also joining us on the call are our chief risk officer, Jody Richard, and our chief credit officer, Mark Runkle. During their prepared remarks, Andy and Terry will be referencing a slide presentation. A copy of the slide presentation, as well as our earnings release and supplemental analyst schedules, are available on our website at usbank.com. I'd like to remind you that any forward-looking statements made during today's call are subject to risk and uncertainty. Factors that could materially change our current forward-looking assumptions are described on page two of today's presentation in our press release and in our form 10-K and subsequent reports on file with the SEC. I'll now turn the call over to Andy.

Thanks, Jen. Good morning, everyone, and thank you for joining our call. Following our prepared remarks, Terry, Jody, Mark, and I will take any questions you have. I'll begin on slide three. In the third quarter, we reported earnings per share of 99 cents. Our revenue of $6 billion was higher on both a linked quarter and year-over-year basis, driven by strong fee income performance across a number of business lines. Credit quality metrics deteriorated in line with our expectations, primarily reflecting more challenging operating conditions for some commercial sectors impacted by COVID-19. However, our reserve bill in the third quarter was limited to the addition related to our acquisition of $1.2 billion of credit card loans from State Farm. Our capital and liquidity positions remain strong and our deposit mix improved as the third quarter as demand deposits increased sharply while higher cost time deposits declined. The bottom right quadrant of this slide shows our strong capital position. At September 30th, our common equity tier one capital ratio was 9.4%. Slide four provides key performance metrics. In the third quarter, we delivered a 16.6% return on tangible common equity. Slide five shows steady improvement in digital activities. Notably, digital sales now account for more than half of all loan sales, highlighting how our business investments are supporting our customers' evolving behavior. Digital remains a focused investment area for us, and as more activity moves to the digital channel, It will drive customer loyalty and top-line growth, as well as cost savings and efficiency opportunities. Now let me turn the call over to Terry, who will provide more color on the quarter. Thanks, Andy.