Latest news with #U.S.Bancorp
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6 hours ago
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Why U.S. Bancorp (USB) is a Core Holding for Investors Seeking Safe Dividend Stocks
U.S. Bancorp (NYSE:USB) is included among the 10 Best and Safe Dividend Stocks to Buy Now. An experienced banker on the trading floor, monitoring financial markets in real time. It is a broad-based financial services provider, offering a wide range of solutions across consumer and commercial banking, wealth management, payment processing, and corporate finance. The bank caters to individuals, businesses, and institutions nationwide, providing services that include basic bank accounts as well as advanced financial tools like treasury management for large corporations. U.S. Bancorp (NYSE:USB) recently reported earnings for the second quarter of 2025, posting revenue of $7 billion, which showed a 2% growth from the same period last year. Its net income came in at $1.815 billion for the quarter, marking a 13.2% increase compared to the same period last year. Diluted earnings per share rose to $1.11 from $0.97 in the second quarter of 2024. The company achieved a return on tangible common equity of 18.0%, a return on average assets of 1.08%, and posted an efficiency ratio of 59.2%. U.S. Bancorp (NYSE:USB) announced on July 1 that it intends to raise its quarterly dividend by 4%, increasing it from $0.50 to $0.52 per share. The decision follows the company's successful performance in the Federal Reserve's stress test. Alongside the dividend hike, the company also plans to move forward with share repurchases as part of its ongoing $5 billion buyback program. U.S. Bancorp (NYSE:USB) currently offers a quarterly dividend of $0.50 per share and has a dividend yield of 4.32%, as of July 27. The company has raised its payouts for 14 years in a row. While we acknowledge the potential of USB as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and . Disclosure: None. Sign in to access your portfolio
Yahoo
18-07-2025
- Business
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U.S. Bancorp (USB) Q2 2025 Earnings Call Highlights: Strong EPS Growth Amid Strategic Repositioning
Earnings Per Share (EPS): $1.11 Net Income: $1.8 billion Fee Revenue Growth: 4.6% year over year Return on Tangible Common Equity: 18% Return on Average Assets: 1.08% Efficiency Ratio: High 50s Total Net Revenue: $7 billion Ending Assets: $686 billion CET1 Capital Ratio: 10.7% Net Interest Income: $4.08 billion Non-Interest Income: $2.9 billion Non-Interest Expense: $4.18 billion Non-Performing Assets Ratio: 0.44% Net Charge-Off Ratio: 0.59% Allowance for Credit Losses: $7.9 billion Average Deposits: $503 billion Average Loans: $379 billion Investment Securities Portfolio: $174 billion Warning! GuruFocus has detected 3 Warning Sign with USB. Release Date: July 17, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points U.S. Bancorp (NYSE:USB) reported strong year-over-year EPS growth of approximately 13%, demonstrating robust financial performance. The company achieved a 4.6% year-over-year increase in total fee revenue, reflecting broad-based strength across its diversified fee income businesses. U.S. Bancorp delivered 250 basis points of year-over-year positive operating leverage, marking the fourth consecutive quarter of revenue growth outpacing expense growth. The company maintained stable asset quality trends and credit metrics, with capital levels well above regulatory capital minimums. U.S. Bancorp strategically repositioned its balance sheet by divesting approximately $6 billion in mortgage and auto loans, optimizing for stronger growth and deeper client relationships. Negative Points Net interest margin declined by 6 basis points sequentially, with half of the decline attributed to temporary factors. The competitive deposit environment led to elevated deposit pricing pressures, impacting net interest income. Corporate and government spend was muted this quarter, reflecting caution around economic uncertainty. The company faced challenges in achieving its medium-term target of a 3% net interest margin, with current market conditions affecting progress. Despite positive financial results, U.S. Bancorp's stock experienced a decline, indicating potential investor concerns about the sustainability of growth and strategic initiatives. Q & A Highlights Q: Can you discuss the net interest margin (NIM) dynamics and what factors could influence its trajectory? A: John Stern, CFO, explained that the NIM decline was partly due to transitory factors related to loan sales. He expects sequential net interest income growth in the third and fourth quarters, driven by strategic actions, fixed asset repricing, and loan growth, particularly in C&I and credit card portfolios. The goal remains to achieve a 3% NIM over the medium term. Q: How are you managing expenses to achieve your operating leverage targets, and is there a risk of underinvestment? A: John Stern, CFO, emphasized that the company is self-funding its initiatives and investments, leveraging productivity improvements and technology enhancements. Gunjan Kedia, CEO, added that the company is committed to maintaining a streamlined business mix and investing in future growth, supported by significant digital investments over the past five years. Q: What is driving the strong growth in C&I loans, and how are you funding this growth? A: John Stern, CFO, noted that C&I growth is broad-based, with contributions from ABS lending, small business, and middle market expansion. The company is focusing on consumer deposits, particularly through its Bank Smartly product, which has shown strong client acquisition and multiservice client statistics. Q: How do you view the sustainability of your financial targets, and what is needed to create shareholder value? A: Gunjan Kedia, CEO, stated that the 200 basis points of positive operating leverage is a healthy target, and the company is focused on consistent delivery against medium-term targets. The opportunities for revenue growth are real, and the company is confident that sustained performance will positively impact the stock. Q: Can you provide more details on the strategic sale of mortgage and auto loans and its impact on the balance sheet? A: John Stern, CFO, explained that the sale of $4.6 billion in mortgages and $1 billion in auto loans was part of a strategy to optimize the balance sheet for multiservice clients. The proceeds were reinvested into higher-yielding investment securities, improving the net interest income trajectory. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
17-07-2025
- Business
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USB Q2 Earnings Beat on Higher NII & Non-Interest Income, Stock Down
U.S. Bancorp's USB second-quarter 2025 earnings per share of $1.11 beat the Zacks Consensus Estimate of $1.07. The bottom line increased 13.3% from the prior-year benefited from lower expenses and higher non-interest income. Also, a rise in net interest income (NII) and a strong capital position were tailwinds. However, a decline in deposits and loans was concerning. Its shares declined 4% in the pre-market trading session on these income (GAAP basis) attributable to U.S. Bancorp was $1.82 billion, up 13.2% from the prior-year quarter. (See the Zacks Earnings Calendar to stay ahead of market-making news.) USB's Revenues Rise, Expenses Decline Total revenues in the reported quarter were $7 billion, up 2% year over year. The top line missed the Zacks Consensus Estimate by 0.8%.Tax-equivalent NII totaled $4.08 billion, up marginally from the year-ago quarter. The increase primarily resulted from fixed asset repricing, loan mix and lower rates paid on interest-bearing deposits, partially offset by lower noninterest-bearing deposit interest margin of 2.66% contracted 1 basis point year over income moved up 3.9% year over year to $2.92 billion. The upside was driven by a rise in almost all components except corporate payment products revenues, mortgage banking revenues, and net losses in expenses declined marginally year over year to $4.18 billion. The fall was due to a decline in almost all components except marketing and business development costs, technology and communications expenses, and other costs. Further, adjusted non-interest expenses declined marginally from the prior year efficiency ratio was 59.2%, lower than the year-ago quarter's 61%. A decline in the ratio indicates an improvement in profitability. U.S. Bancorp's Loan & Deposit Balances Decline Average total loans decreased 0.1% to $378.5 billion from the previous quarter. Average total deposits declined 0.7% from the previous quarter to $502.9 billion. USB's Credit Quality Improves Total allowance for credit losses was $7.86 billion, down roughly 1% year over year. As of June 30, 2025, U.S. Bancorp's non-performing assets amounted to $1.68 billion, down 9.3% from the year-ago charge-offs were $554 million, up 3% from the year-ago provision for credit losses in the reported quarter was $501 million, down 11.8% from the prior-year quarter. U.S. Bancorp's Capital Ratios Improve The Tier 1 capital ratio was 12.3% as of June 30, 2025, up from 11.9% in the prior-year quarter. The Common Equity Tier 1 capital ratio under the Basel III standardized approach was 10.7% as of June 30, 2025, up from 10.2% in the year-ago tangible common equity to tangible assets ratio was 6.1%, up from the prior-year quarter's 5.4%. Our Take on USB U.S. Bancorp's solid business model and diverse revenue streams are likely to keep aiding its financials in the upcoming period. An improving NII looks encouraging. Going forward, USB is well-positioned to deliver solid returns on tangible common equity and positive operating leverage. U.S. Bancorp Price, Consensus and EPS Surprise U.S. Bancorp price-consensus-eps-surprise-chart | U.S. Bancorp Quote Currently, U.S. Bancorp carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Performance of USB's Peer Banks The Bank of New York Mellon Corporation's BK second-quarter 2025 adjusted earnings of $1.94 per share surpassed the Zacks Consensus Estimate of $1.74. Also, the bottom line reflected a jump of 28% from the prior-year were primarily aided by a rise in fee revenues and NII. Also, the company recorded a provision benefit in the quarter, which was a tailwind. Growth in assets under custody and/or administration (AUC/A) and assets under management (AUM) balances further supported results. However, higher expenses were an undermining factor for BK. State Street's STT second-quarter 2025 adjusted earnings of $2.53 per share surpassed the Zacks Consensus Estimate of $2.36. The bottom line also increased 17.7% from the prior-year results were aided by growth in fee revenues. Also, the company witnessed improvements in total AUC/A and AUM balances. However, higher adjusted expenses, a jump in provisions and lower NII acted as spoilsports. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Bank of New York Mellon Corporation (BK) : Free Stock Analysis Report State Street Corporation (STT) : Free Stock Analysis Report U.S. Bancorp (USB) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
17-07-2025
- Business
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U.S. Bancorp (NYSE:USB) Posts Q2 Sales In Line With Estimates
Financial services giant U.S. Bancorp (NYSE:USB) met Wall Street's revenue expectations in Q2 CY2025, with sales up 2.4% year on year to $7.00 billion. Its GAAP profit of $1.11 per share was 3.9% above analysts' consensus estimates. Is now the time to buy U.S. Bancorp? Find out in our full research report. U.S. Bancorp (USB) Q2 CY2025 Highlights: Net Interest Income: $4.05 billion vs analyst estimates of $4.12 billion (flat year on year, 1.6% miss) Net Interest Margin: 2.7% vs analyst estimates of 2.7% (flat year on year, 5.8 bps miss) Revenue: $7.00 billion vs analyst estimates of $7.03 billion (2.4% year-on-year growth, in line) Efficiency Ratio: 59.2% vs analyst estimates of 59.2% (in line) EPS (GAAP): $1.11 vs analyst estimates of $1.07 (3.9% beat) Market Capitalization: $71.17 billion Company Overview With roots dating back to 1863 and a presence across 26 states primarily in the Midwest and West, U.S. Bancorp (NYSE:USB) is one of America's largest banks providing lending, deposit services, wealth management, payment processing, and merchant services to individuals and businesses. Sales Growth From lending activities to service fees, most banks build their revenue model around two income sources. Interest rate spreads between loans and deposits create the first stream, with the second coming from charges on everything from basic bank accounts to complex investment banking transactions. Over the last five years, U.S. Bancorp grew its revenue at a mediocre 3.7% compounded annual growth rate. This was below our standard for the bank sector and is a rough starting point for our analysis. Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. U.S. Bancorp's recent performance shows its demand has slowed as its revenue was flat over the last two years. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business. This quarter, U.S. Bancorp grew its revenue by 2.4% year on year, and its $7.00 billion of revenue was in line with Wall Street's estimates. Net interest income made up 58.6% of the company's total revenue during the last five years, meaning U.S. Bancorp's growth drivers strike a balance between lending and non-lending activities. Markets consistently prioritize net interest income growth over fee-based revenue, recognizing its superior quality and recurring nature compared to the more unpredictable non-interest income streams. Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories. Tangible Book Value Per Share (TBVPS) Banks are balance sheet-driven businesses because they generate earnings primarily through borrowing and lending. They're also valued based on their balance sheet strength and ability to compound book value (another name for shareholders' equity) over time. When analyzing banks, tangible book value per share (TBVPS) takes precedence over many other metrics. This measure isolates genuine per-share value by removing intangible assets of debatable liquidation worth. On the other hand, EPS is often distorted by mergers and flexible loan loss accounting. TBVPS provides clearer performance insights. U.S. Bancorp's TBVPS grew at an excellent 8.4% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 32.3% annually over the last two years from $20.04 to $35.06 per share. Over the next 12 months, Consensus estimates call for U.S. Bancorp's TBVPS to shrink by 16.1% to $29.41, a sour projection. Key Takeaways from U.S. Bancorp's Q2 Results We were impressed by how significantly U.S. Bancorp blew past analysts' tangible book value per share expectations this quarter. On the other hand, its net interest income missed and its revenue was in line with Wall Street's estimates. Overall, this was a weaker quarter. The stock traded down 3.8% to $43.95 immediately after reporting. So do we think U.S. Bancorp is an attractive buy at the current price? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
16-07-2025
- Business
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U.S. Bancorp (USB) Q2 Earnings Report Preview: What To Look For
Financial services giant U.S. Bancorp (NYSE:USB) will be reporting results this Thursday morning. Here's what to expect. U.S. Bancorp beat analysts' revenue expectations by 0.5% last quarter, reporting revenues of $6.93 billion, up 3.6% year on year. It was a mixed quarter for the company, with a decent beat of analysts' EPS estimates but a miss of analysts' tangible book value per share estimates. Is U.S. Bancorp a buy or sell going into earnings? Read our full analysis here, it's free. This quarter, analysts are expecting U.S. Bancorp's revenue to grow 2.7% year on year to $7.03 billion, a reversal from the 5% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.07 per share. Heading into earnings, analysts covering the company have grown increasingly bearish with revenue estimates seeing 7 downward revisions over the last 30 days (we track 12 analysts). U.S. Bancorp has missed Wall Street's revenue estimates four times over the last two years. Looking at U.S. Bancorp's peers in the diversified banks segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Citigroup delivered year-on-year revenue growth of 8%, beating analysts' expectations by 3.5%, and JPMorgan Chase reported a revenue decline of 10.5%, topping estimates by 2.9%. Read our full analysis of Citigroup's results here and JPMorgan Chase's results here. There has been positive sentiment among investors in the diversified banks segment, with share prices up 8.3% on average over the last month. U.S. Bancorp is up 5.9% during the same time and is heading into earnings with an average analyst price target of $52.83 (compared to the current share price of $45.70). Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story. StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
