U.S. Bancorp (NYSE:USB) reported first-quarter results on Thursday that came in ahead of analyst expectations, though its shares moved lower in pre-market trading.
The stock declined 1.10% following the announcement.
The bank posted adjusted earnings per share of $1.18, exceeding the consensus estimate of $1.15 by $0.03. Revenue totaled $7.29 billion, slightly above the $7.28 billion forecast and up 4.7% from $6.96 billion in the same quarter last year. Net income attributable to U.S. Bancorp increased 13.8% year on year to $1.95 billion.
Net interest income, on a taxable-equivalent basis, rose 4.1% to $4.29 billion, supported by loan growth, a more favorable mix of earning assets, and repricing of fixed-rate assets.
Net interest margin improved to 2.77%, compared to 2.72% a year earlier. Fee income grew 6.9% year on year, driven by stronger payments activity and continued momentum in capital markets and investment services.
“In the first quarter, we delivered diluted earnings per share of $1.18, up 15% year-over-year, and a return on tangible common equity of 17%,” said CEO Gunjan Kedia. “Strong revenue growth drove 440 basis points of positive operating leverage, as ongoing investments for growth and continued cost savings drove 260 basis points of year-over-year improvement in our efficiency ratio.”
Average total loans increased 3.8% to $393.56 billion, while average deposits rose 1.7% to $515.12 billion.
Noninterest expenses edged up 0.8% to $4.27 billion, mainly due to higher spending on marketing and technology, partially offset by lower compensation costs.
The provision for credit losses increased 7.3% to $576 million, reflecting loan book expansion. Meanwhile, the net charge-off ratio improved to 0.56% from 0.59% a year earlier. The bank’s common equity tier 1 ratio remained steady at 10.8%.