USB - U.S. Bancorp (USB) Bernstein's 40th Annual Strategic Decisions Conference
2024-05-30 17:27:08 ET
U.S. Bancorp (USB)
Bernstein's 40th Annual Strategic Decisions Conference
May 30, 2024 9:00 AM ET
Company Participants
Andy Cecere - Chairman and Chief Executive
John Stern - Senior Executive Vice President and Chief Financial
Conference Call Participants
John McDonald - Bernstein
Presentation
John McDonald
Okay, good morning. Thanks everyone. We're very happy to start today off with U.S. Bancorp joining us again. From the company we have CEO Andy Cecere and CFO John Stern. Thank you both for coming.
Andy Cecere
Thanks for having.
John Stern
Good morning.
Question-and-Answer Session
Q - John McDonald
Great to have you guys. Andy, you know, let's put things in perspective here. We're approaching two years since the close of the Union Bank transaction. I think a year from the conversion, maybe.
Andy Cecere
Exactly a year, yes.
John McDonald
What's the report card on the deal? How has it benefited growth so far, and what are the opportunities in the new markets?
Andy Cecere
Thanks John, and good morning everyone. It's great to be here. So it's a great place to start John, because it fits very well into our overall company strategy, which is about our diverse business mix, the scale that we have, taking advantage of the digital investments we made and cost takeouts and efficiency. So, and UniBank hits on all those marks. So first of all, from a scale perspective, it made [Technical Difficulty] in California, you know, we were in the 10 and 11 [Technical Difficulty] now we're 45. It increased our step function and scale 15% to 20%, depending upon the category you look at.
And it really provided the opportunity to leverage those investments we made in technology and in digital to allow us to lift and shift in one weekend, about a year [Technical Difficulty], this last weekend, a very successful conversion allowed us to exit the consent order they've had for a while very quickly, and importantly, achieve $900 million of cost takeouts, which was fully in the run rate at the end of the fourth quarter of ‘23. So it hit on all those marks.
And while we didn't put it in the model, the opportunity to take a million customers on the consumer side, a couple hundred thousand on the business banking side, and leverage the banking and payment products that we have to those customers is tremendous. So one example, the card penetration of the consumer base at Union Bank was about half of the U.S. banks. So they were about 20% or about 40%, we’re already at 28% at Union Bank after one year. So it really hit on all those parts. It was a positive deal both strategically, as well as financially....
U.S. Bancorp (USB) Bernstein's 40th Annual Strategic Decisions Conference