U.S. Bancorp

Welcome to U.S. Bincorp's 4th Quarter 2021 Earnings Conference Call. Following a review of the results by Andy Ciceri, 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 11 a.m. Central Time through Wednesday, January 26, 2022 at 1059 p.m. Central Time. I will now turn the conference call over to Jen Thompson, Director of Investor Relations and Economic Analysis for U.S. Bancorp.

Thank you, Natalia, and good morning, everyone. With me today are Andy Cesari, our Chairman, President, and CEO, and Terry Dolan, our Chief Financial Officer. 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 would 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 and I will take any questions you have. I'll begin on Slide 3. In the fourth quarter, we reported earnings per share of $1.07 and generated total revenue of $5.7 billion. We saw strong balance sheet growth this quarter, including deposit growth of over $18 billion, or 4.3%, compared with the third quarter. Average loans grew by 2% link quarter, or 2.7% excluding the impact of loan forgiveness related to PPP. We are encouraged by the loan growth momentum, and we have a positive outlook for 2022 given improving client sentiment and business conditions, and continued strength in certain focused commercial portfolios, such as ABS lending and supply chain financing. The significant increase in liquidity provided by the strong deposit inflows this quarter puts us in a favorable position to support future balance sheet growth. Deposit growth provided the opportunity for tactical investment and cash management strategies that pressured the net interest margin for the fourth quarter, but was both accretive to net interest income and maintained asset sensitivity for a rising rate environment. Turning to fees. Underlying client acquisition and market share trends across our business lines were healthy, and payment sales trends continued to improve on a year-over-year basis. This quarter, we released $145 million in loan loss reserves, reflecting continued strong credit quality, including a record low net charge-off ratio. In the lower right quadrant, you can see that our book value per share totaled $32.71 at December 31st, which was 1.5% higher than September 30th. Our CET1 capital ratio was 10% at 31st. Slide four provides key performance metrics. Slide five highlights trends in digital engagement. Digital transactions now account for over 80% of total transactions, and digital loan sales account for two-thirds of total loan sales. Turning to slide six, we continue to believe our initiatives aim at connecting our banking customers with our payment products and our services, And our payments customers with our banking products and services will allow us to grow our small business relationships by 15 to 20 percent and related revenue by 25 to 30 percent over the next few years. Now let me turn the call over to Terry who will provide more detail on the quarter.