U.S. Bancorp (NYSE:USB) reported stronger-than-expected second-quarter earnings on Thursday, but the stock slid 2.69% in pre-market trading as overall revenue came in shy of analyst forecasts.
The Minneapolis-based lender posted earnings per share of $1.11 for the quarter, beating the consensus estimate of $1.07. However, total revenue came in at $6.96 billion, narrowly missing the expected $7 billion mark — a shortfall that appeared to weigh on investor sentiment.
Net income climbed to $1.82 billion, a 13.2% increase from the $1.6 billion earned in the same period last year. Key profitability metrics were solid, with return on tangible common equity reaching 18% and return on average assets at 1.08%.
“In the second quarter we posted diluted earnings per share of $1.11, delivered a return on tangible common equity of 18% and posted a return on average assets of 1.08%,” said Gunjan Kedia, President and CEO of U.S. Bancorp. “Importantly, year-over-year top-line revenue growth, coupled with our continued expense discipline, resulted in 250 basis points of positive operating leverage.”
Fee income provided a boost, rising 4.6% year-over-year and now accounting for roughly 42% of the bank’s total revenue. Growth was led by payment services, trust and investment management fees, and treasury management services.
Net interest margin edged down to 2.66% from 2.67% in the prior-year period and 2.72% in Q1 2025. Average loans rose slightly to $378.5 billion, up 1% from a year earlier, while deposits declined 2.1% to $502.9 billion.
Asset quality metrics held steady, with a net charge-off ratio of 0.59%, unchanged from the previous quarter. The bank’s Common Equity Tier 1 (CET1) capital ratio remained healthy at 10.7% at quarter-end.
“Our diversified business mix and sound risk management culture remain strengths, especially at a time of economic volatility,” Kedia added.
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