US Bancorp 1Q14 Earnings Call Notes

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A digest of some of the top insights that I’ve gathered from this week’s earnings calls.  Full notes can be found here.

CRE Strong

” Commercial real estate, Jon are strong on both coasts as it has been in the past both East and the West as well as Texas particularly in new construction and some investment decisions being made by some of our customers. The most active city is our Seattle, San Francisco, LA and Orange County, so that stays pretty much West Coast focused.”

Residential loans continue to grow, Home equity weak

“Residential mortgages, we said is up from its record highest but the portfolio continues to grow. Home equity, well we see that continuing to be the softest part as we are sliding to get enough acquisition to offset the runoff. We had a very strong March, which takes me some good hope in this second quarter particularly as we introduced some new programs and some pricing in order to encourage that behavior in the spring.”

The Fed is letting people know it’s getting closer to the time to raise rates

“I think the [Fed] in their current messaging continues to allow people to believe that we’re getting closer and closer to [indiscernible] in time when rates will move up. And I think our customers are starting to demonstrate behavior and getting really prepared for that moment and eventually they will use these unused lines of credit, they’ll use their deposits and they’ll start getting more lines in loans to I think accommodate that growth which is probably a few years out but may starting at the last half of 2014.”

LCR changing the value of deposits

“depending upon the LCR runoff assumption, certain deposits are certain more valuable, we try to reflect that in our pricing, we’ve actually incorporated LCR into our FTP system our Funds Transfer Pricing system. And different deposits have different value and that is a function of LCR and we’re taking that into account.”