U.S. Bancorp (NYSE:USB) posted stronger-than-expected third-quarter results on Thursday, powered by record revenue, rising fee income, and an improved net interest margin. Shares climbed 3.88% in pre-market trading after the announcement.
The bank reported earnings per share of $1.22, topping the analyst estimate of $1.12, while total revenue hit a record $7.33 billion, surpassing expectations of $7.16 billion. Net income increased 16.7% year over year to $2.001 billion, reflecting solid execution across business lines.
“Our commitment to growth, execution, and greater interconnectedness across the franchise supported delivery of record net revenue of $7.3 billion this quarter,” said Gunjan Kedia, CEO of U.S. Bancorp. “Solid net interest income growth and margin expansion, as well as continued momentum across our fee businesses and prudent expense management supported double-digit net income growth.”
Fee revenue grew 9.5% YoY, while net interest margin expanded to 2.75%, up 9 basis points from the previous quarter. The bank’s efficiency ratio improved to 57.2% from 60.2% a year ago, reflecting stronger cost discipline as noninterest expenses held steady year over year.
Asset quality also improved, with the net charge-off ratio declining to 0.56% from 0.60% a year earlier. The bank’s capital position strengthened, with the CET1 ratio rising to 10.9% from 10.5%.
Average total loans grew 1.4% YoY to $379.15 billion, supported by growth in commercial loans (9.5%) and credit card loans (4.3%). Average total deposits edged up 0.6% to $511.78 billion.
Return on tangible common equity increased to 18.6%, up from 17.9% in the same quarter of 2024, reflecting improved profitability and stronger capital efficiency.
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