U.S. Bancorp (NYSE:USB) Q2 2023 Earnings Call Transcript

John McDonald: Hi, Terry. Thanks. One more on the mitigation and optimization opportunity. Originally, you had talked about 50 basis points of opportunity to harness this year. Obviously, you got 40 this quarter. And now it sounds like the total is more. I’m just trying to – is there a way to size how much more you might see out there between the remainder of this year and next year relative to the original 50 you were targeting?

Terry Dolan: Yes. Again, the 50 that we were targeting, we knew we had a high level of confidence in terms of being able to achieve it because there were low to kind of neutral impact and they were things that we could kind of execute on the – we definitely believe that as we get into 2024, the standing up, which obviously takes a little longer, standing up of securitization programs and many of the actions that I talked about earlier, gets us to where we need to be from a capital perspective when you take into consideration the burndown, et cetera. So, that opportunity I think is certainly – probably in line with another 50 basis points, would be my guess.

John McDonald: Okay. And when you say no impact or low impact, we did see some this quarter, like in terms of the charge-offs and taxes, I guess they’re not run rate. Is that what you mean by like you could have episodic one quarter type impacts?

Terry Dolan: Yes, absolutely. We’ll continue to see that as we reposition the balance sheet. But again, those impacts are all taken into consideration when we think about the net RWA impacts.

John McDonald: Okay. And again, your target that you want to get to for the fully loaded by the end of next year is what? When you say you want to …

Terry Dolan: Yes. Well, it’ll be – fully adopted, it’d be roughly 8.5%, 9%.

John McDonald: Okay. Thank you.

Operator: And we have no further questions at this time, and I’ll turn it back to George Anderson. Please continue.

George Anderson: Thank you for listening to our earnings call. Please contact the Investor Relations department if you have any follow-up questions.

Operator: And this concludes today’s conference. Thank you for participating. You may now disconnect.