US Bank’s auto outstandings decreased 2.5% sequentially in the third quarter in line with expectations going into 2022.
Outstandings clocked in at $23.2 billion, down 1.1% year over year, according to the earnings release.
The bank in Q4 2021 expected that auto lending may become more moderate looking ahead at 2022, Chief Financial Officer Terry Dolan previously said. Outstandings also fell sequentially during the first two quarters of 2022.
While the bank did not break out auto-specific credit performance metrics, the rate of loans 30-89 days delinquent increased 2 basis points (bps) sequentially and was flat YoY at 0.41% across the bank’s $60.1 billion other retail book, of which auto loans make up 39%, according to the earnings presentation.
Other retail loans 90-plus days past due accounted for 0.11% in Q3, an increase of 1 bps sequentially and flat YoY.
The bank’s net charge-offs across the other retail segment came in at 0.18%, an increase of 7 bps sequentially and 5 bps YoY, according to the presentation. Allowance for losses for other retail loans totaled $1 billion, representing 1.6% of outstandings.
Meanwhile, the bank continues to see strong momentum in real-time payment transactions, with the number of transactions year to date through Sept. 30 landing 17 times higher compared with the full year 2020, Chief Executive Andrew Cecere said on today’s earnings call. The bank in August launched real-time payments for auto dealers.
“We provide loan funds instantly after a long contract is finalized. This gives our participating dealer clients greater control of their cash flow and helps to improve their day-to-day operational efficiency,” Cecere said on the call.
The percentage of loan sales through the bank’s digital channels also landed at 62% in Q3, up from 45% in the beginning of 2020, according to the presentation.
Shares of U.S. Bancorp [NYSE: USB] were trading down 2.83% to $42.64 at market close today. The bank has a market capitalization of $63.4 billion.
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