Core Insights - U.S. Bancorp reported strong Q2 2025 earnings with a 13.2% year-over-year increase in net income to $1.8 billion and a return on tangible common equity of 18% [1][5] - Despite solid earnings, investor sentiment was cautious due to soft revenue and net interest income, along with conservative guidance for Q3 [1][7] - The bank is focusing on embedded payments, blockchain, and AI-driven infrastructure to position itself as a platform-centric bank for the digital economy [2][4] Financial Performance - Net income rose 13.2% year-over-year to $1.8 billion, with diluted earnings per share increasing from $0.97 to $1.11 [5] - Fee income grew by 4.6%, driven by strong performance in payment services and investment management [6] - The market reacted negatively to the earnings report, highlighting concerns over revenue and net interest income [7] Strategic Initiatives - U.S. Bancorp is enhancing its embedded payment capabilities through its Elavon subsidiary, which has become the fifth-largest U.S. merchant acquirer, processing over $576 billion annually [8] - The bank aims to transition from a back-office processor to a front-end enabler of commerce, integrating treasury, card, and acquiring capabilities into a single digital framework [9][11] - A new embedded payment suite was launched, designed for seamless integration into various enterprise software and eCommerce systems [10] Technological Advancements - Technology and communications expenses increased by 4.9% year-over-year to $534 million, reflecting a strategy to modernize the bank's infrastructure [12] - U.S. Bancorp is consolidating its card issuance platform with Fiserv's Credit Choice to offer a unified interface for managing digital-first credit and debit cards [13] - The bank is focusing on refining automation, data architecture, and cybersecurity to support the scaling of digital products [14] Future Outlook - U.S. Bancorp is betting on a future where banking is embedded into software applications rather than relying on traditional branches [15] - The shift towards an API-based, modular financial ecosystem is seen as essential for the bank's long-term strategy [15]

Financial Data and Key Metrics Changes - The company reported earnings per share of $1.11 and net income of $1.8 billion, reflecting a year-over-year EPS growth of approximately 13% [5][14] - Total fee revenue grew by 4.6% year-over-year, driven by broad-based strength across various businesses [5][20] - The return on tangible common equity was 18%, and the return on average assets improved to 1.08% [6][15] - The efficiency ratio improved to the high 50s, indicating better expense management [6][15] Business Line Data and Key Metrics Changes - Fee income now represents approximately 42% of total net revenue, with significant growth in payment services [7][10] - Merchant payment services revenue grew 4.4% year-over-year, supported by a tech-led strategy [10] - The capital markets business is focused on introducing new product capabilities, contributing to growth in commercial and industrial (C&I) loans [9][10] Market Data and Key Metrics Changes - The company divested approximately $6 billion in mortgage and auto loans to strategically reposition its balance sheet [13] - C&I and credit card portfolios represented 47% of the balance sheet, up from 43% at the end of 2023, with average loans growing 6.6% year-over-year [12][13] - Average consumer deposit balances increased by $2.4 billion or 1.1% linked quarter, while the percentage of non-interest-bearing deposits remained stable at approximately 16% [17] Company Strategy and Development Direction - The company is focused on three key priorities: expense discipline, organic growth, and transformation of the payments business [26] - There is an intentional evolution of the business mix to be more fee-intensive and diversified, with a shift towards multi-service clients [26][27] - The company aims to deliver sustainable EPS growth while maintaining a focus on operational efficiency and productivity [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate the current higher interest rate environment and position the balance sheet for near-term margin expansion [6][14] - The company expects net interest income for the third quarter to be in the range of $4.1 billion to $4.2 billion, with total fee revenue expected to be approximately $3 billion [23] - Management remains optimistic about achieving medium-term profitability and efficiency targets, despite some headwinds in net interest income [15][25] Other Important Information - The company reported stable asset quality trends and credit metrics, with a modest reserve release of $53 million this quarter [15][21] - The CET1 capital ratio was 10.7%, well above regulatory minimums, reflecting strong capital levels [21][22] - The company is strategically evolving both sides of the balance sheet to support a higher net interest income trajectory [75] Q&A Session Summary Question: NII dynamics and margin outlook - Management indicated that part of the linked quarter decline in net interest margin was transitory and expects sequential net interest income growth in the upcoming quarters [31][32] Question: Expense management and operating leverage - Management reassured that cost-cutting measures do not hinder necessary investments, emphasizing self-funding initiatives and operational efficiencies [36][39] Question: C&I loan growth drivers - Management highlighted strong growth in C&I loans, driven by increased utilization rates and strength in various sectors, including healthcare [60][61] Question: RWA increase and deposit competition - Management explained that the increase in risk-weighted assets was due to credit risk transfers and commercial loan growth, while deposit competition remains a consistent challenge [70][72] Question: Future loan growth outlook - Management expressed optimism about loan growth, particularly in C&I and credit card segments, indicating better growth opportunities than at the beginning of the year [85][86]

Financial Data and Key Metrics Changes - The company reported earnings per share (EPS) of $1.11 and net income of $1.8 billion, reflecting a year-over-year EPS growth of approximately 13% [4][14] - Total fee revenue grew by 4.6% year-over-year, driven by broad-based strength across various businesses [4][21] - The return on tangible common equity was 18%, and the return on average assets improved to 1.08% [5][15] - The efficiency ratio improved to the high 50s, indicating better expense management [5][15] Business Line Data and Key Metrics Changes - Fee income now represents approximately 42% of total net revenue, with significant growth in payment services [6][10] - The capital markets business is focusing on new product capabilities, contributing to growth in commercial and industrial (C&I) loans [8][9] - Merchant payment services revenue grew 4.4% year-over-year, supported by a tech-led strategy [10] Market Data and Key Metrics Changes - The company divested approximately $6 billion in mortgage and auto loans to strategically reposition its balance sheet [13] - Average loans totaled $379 billion, with a decrease of 0.1% linked quarter, impacted by the sale of residential mortgages and auto loans [17][18] - The investment securities portfolio increased to $174 billion, reflecting a strategic shift in asset allocation [19] Company Strategy and Development Direction - The company is focused on three key priorities: expense discipline, organic growth, and transformation of the payments business [27] - There is an intentional evolution towards a more fee-intensive business model, with a focus on multi-service clients [26][27] - The company aims to achieve a net interest margin (NIM) of 3% in the medium term, supported by strategic actions and loan growth [33][80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate the current higher interest rate environment and expects sequential net interest income growth in the upcoming quarters [31][32] - The company anticipates continued growth in C&I and credit card portfolios, with strong pipelines [32][88] - Management acknowledged the competitive deposit environment but remains optimistic about the trajectory of net interest income [74][78] Other Important Information - The company reported a modest reserve release of $53 million, reflecting favorable loan portfolio sales [15][22] - The CET1 capital ratio was 10.7%, indicating strong capital levels above regulatory minimums [22][23] - The company is preparing for potential regulatory changes regarding stablecoins, although immediate revenue impact is not anticipated [116] Q&A Session Summary Question: NII dynamics and margin outlook - Management indicated that part of the NIM decline was transitory and expects sequential growth in NII in the upcoming quarters [31][32] Question: Expense management and operating leverage - Management reassured that expense management does not hinder necessary investments and highlighted ongoing investments in technology and productivity [36][39] Question: C&I loan growth drivers - Management noted strong growth in C&I loans, driven by various sectors including healthcare and small businesses [62][63] Question: RWA increase and deposit competition - Management explained the increase in RWA was due to credit risk transfers and commercial loan growth, while deposit competition remains a consistent challenge [72][74] Question: Future loan growth outlook - Management expressed optimism about loan growth, particularly in C&I and credit card segments, indicating better growth opportunities than earlier in the year [88] Question: Fee revenue growth expectations - Management remains confident in mid-single-digit growth for overall fees and payments businesses [95]

Core Viewpoint - U.S. Bancorp reported quarterly earnings of $1.11 per share, exceeding the Zacks Consensus Estimate of $1.07 per share, and showing an increase from $0.98 per share a year ago, indicating a positive earnings surprise of +3.74% [1][2] Financial Performance - The company posted revenues of $7 billion for the quarter ended June 2025, which was 0.84% below the Zacks Consensus Estimate, compared to $6.84 billion in the same quarter last year [2] - Over the last four quarters, U.S. Bancorp has surpassed consensus EPS estimates four times but has only topped revenue estimates once [2] Stock Performance - U.S. Bancorp shares have declined approximately 4.5% year-to-date, contrasting with the S&P 500's gain of 6.5% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.08 on revenues of $7.17 billion, and for the current fiscal year, it is $4.30 on revenues of $28.41 billion [7] - The trend of earnings estimate revisions is mixed ahead of the earnings release, which may influence future stock performance [6] Industry Context - The Banks - Major Regional industry, to which U.S. Bancorp belongs, is currently ranked in the top 6% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact investor sentiment [5]

Financial Performance Highlights - U S Bancorp achieved earnings per share of $1.11, a 13% increase compared to 2Q24 (adjusted)[12] - The company's Return on Tangible Common Equity was 18.0%[12] - Positive operating leverage was 250 bps year-over-year (adjusted)[12] - Total fee revenue grew by 4.6% year-over-year[12] - The efficiency ratio improved to 59.2%[12] Balance Sheet and Credit Quality - Total assets reached $686.4 billion[14,36] - Earning assets averaged $613.3 billion[14,36] - Total loans amounted to $380.2 billion[14,36] - Total deposits were $518.7 billion[14,36] - The Nonperforming Assets (NPA) ratio was 0.44%[38] - The net charge-off ratio was 0.59%[38] Revenue Mix and Strategy - Fee income represented approximately 42% of U S Bancorp's total net revenue[9,14] - The company is shifting towards a higher quality revenue mix by expanding beyond traditional banking products and services[27] - Multi-service clients contribute approximately 3x more revenue than single-service clients[30] Expense Management and Efficiency - The company achieved seven consecutive quarters of stable expenses (adjusted)[8,16] - Positive operating leverage was maintained for four straight quarters[7,16] - Noninterest expense was $4.181 billion[34]

智通财经7月17日电，美国合众银行第二季度每股收益1.11美元，高于预期的1.06美元。 ...

[Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) [Quarterly Consolidated Statement of Income](index=2&type=section&id=QUARTERLY%20CONSOLIDATED%20STATEMENT%20OF%20INCOME) U.S. Bancorp's Q2 2025 net income rose to **$1.815 billion**, driven by increased noninterest income and improved efficiency, with diluted EPS reaching **$1.11** Key Income Statement Data (Q2 2025 vs. Prior Periods) | (Millions of Dollars, Except Per Share Data) | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Interest Income | $4,051 | $4,092 | $4,023 | | Total Noninterest Income | $2,924 | $2,836 | $2,815 | | Provision for Credit Losses | $501 | $537 | $568 | | Net Income Attributable to U.S. Bancorp | $1,815 | $1,709 | $1,603 | | Diluted Earnings Per Share | $1.11 | $1.03 | $0.97 | | Dividends Declared Per Common Share | $0.50 | $0.50 | $0.49 | Key Financial Ratios (%) | Ratio | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Interest Margin (taxable-equivalent) | 2.66% | 2.72% | 2.67% | | Return on Average Assets | 1.08% | 1.04% | 0.97% | | Return on Average Common Equity | 12.9% | 12.3% | 12.4% | | Efficiency Ratio | 59.2% | 60.8% | 61.0% | [Consolidated Ending Balance Sheet](index=4&type=section&id=CONSOLIDATED%20ENDING%20BALANCE%20SHEET) Total assets reached **$686.4 billion** as of June 30, 2025, with deposits growing to **$518.7 billion** and shareholders' equity increasing to **$61.4 billion** Key Balance Sheet Data (As of June 30, 2025) | (Billions of Dollars) | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Total Assets | $686.4 | $676.5 | $680.1 | | Net Loans | $372.7 | $374.2 | $368.6 | | Total Deposits | $518.7 | $512.5 | $523.8 | | Total U.S. Bancorp Shareholders' Equity | $61.4 | $60.1 | $56.4 | [Consolidated Average Balance Sheet and Yields/Rates](index=6&type=section&id=CONSOLIDATED%20AVERAGE%20BALANCE%20SHEET%20AND%20YIELDS%2FRATES) Q2 2025 saw a **Net Interest Margin (NIM)** compression to **2.66%** due to higher funding costs, while average earning assets remained stable at **$613.3 billion** - The Net Interest Margin (NIM) on a taxable-equivalent basis compressed to **2.66%** in Q2 2025, down **6 basis points** from Q1 2025 and **1 basis point** from Q2 2024[7](index=7&type=chunk)[11](index=11&type=chunk) Year-over-Year Average Balance and Yield Comparison (Q2 2025 vs. Q2 2024) | (Millions of Dollars) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Average Total Earning Assets | $613,342 | $608,892 | 0.7% | | Average Total Loans | $378,529 | $374,685 | 1.0% | | Average Total Deposits | $502,890 | $513,909 | (2.1)% | | Yield on Total Earning Assets | 4.99% | 5.29% | - | | Rate on Total Interest-Bearing Liabilities | 2.80% | 3.18% | - | Quarter-over-Quarter Average Balance and Yield Comparison (Q2 2025 vs. Q1 2025) | (Millions of Dollars) | Q2 2025 | Q1 2025 | % Change | | :--- | :--- | :--- | :--- | | Average Total Earning Assets | $613,342 | $610,230 | 0.5% | | Average Total Loans | $378,529 | $379,028 | (0.1)% | | Average Total Deposits | $502,890 | $506,534 | (0.7)% | | Yield on Total Earning Assets | 4.99% | 4.99% | - | | Rate on Total Interest-Bearing Liabilities | 2.80% | 2.75% | - | [Loan Portfolio](index=16&type=section&id=LOAN%20PORTFOLIO) The total loan portfolio reached **$380.2 billion** in Q2 2025, with commercial loans as the largest segment at **38.8%**, while residential mortgages declined Loan Portfolio Composition (as of June 30, 2025) | Loan Category | Amount (Millions of Dollars) | Percent of Total | | :--- | :--- | :--- | | Total Commercial | $147,416 | 38.8% | | Total Commercial Real Estate | $48,181 | 12.7% | | Total Residential Mortgages | $114,475 | 30.1% | | Credit Card | $30,023 | 7.9% | | Total Other Retail | $40,148 | 10.5% | | **Total Loans** | **$380,243** | **100.0%** | - Compared to the prior quarter, commercial loans increased by **$3.3 billion**, while residential mortgages and commercial real estate loans decreased by **$4.4 billion** and **$0.15 billion**, respectively[16](index=16&type=chunk) [Supplemental Business Segment Schedules](index=17&type=section&id=Supplemental%20Business%20Segment%20Schedules) [Wealth, Corporate, Commercial and Institutional Banking](index=18&type=section&id=WEALTH%2C%20CORPORATE%2C%20COMMERCIAL%20AND%20INSTITUTIONAL%20BANKING) Net income for this segment was **$1.10 billion** in Q2 2025, impacted by higher credit loss provisions, despite total net revenue reaching **$3.0 billion** and AUM growing to **$536.4 billion** Segment Performance Highlights | (Millions of Dollars) | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Income | $1,098 | $1,200 | $1,183 | | Total Net Revenue | $3,000 | $2,947 | $3,058 | | Provision for Credit Losses | $183 | $10 | $100 | | Total Net Charge-offs | $106 | $61 | $107 | - Assets Under Management (AUM) increased to **$536.4 billion**, up from **$524.3 billion** in the prior quarter, with growth seen in fixed income and money market categories[20](index=20&type=chunk) [Consumer and Business Banking](index=23&type=section&id=CONSUMER%20AND%20BUSINESS%20BANKING) Net income for Consumer and Business Banking rose to **$459 million** in Q2 2025, driven by higher net interest income and lower credit loss provisions, while branch count decreased to **2,081** Segment Performance Highlights | (Millions of Dollars) | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Income | $459 | $408 | $493 | | Net Interest Income | $1,843 | $1,768 | $1,912 | | Mortgage Banking Revenue | $162 | $173 | $160 | | Provision for Credit Losses | $39 | $62 | $30 | - Mortgage production volume increased significantly to **$9.6 billion** from **$6.6 billion** in the prior quarter[24](index=24&type=chunk) - The number of branches continued to decline, reaching **2,081** at the end of Q2 2025, down from **2,117** in Q1 2025 and **2,207** a year ago[23](index=23&type=chunk) [Payment Services](index=29&type=section&id=PAYMENT%20SERVICES) Payment Services reported **$325 million** net income in Q2 2025, with total net revenue growing to **$1.85 billion** driven by increased card and merchant processing volumes, despite higher credit loss provisions Segment Performance Highlights | (Millions of Dollars) | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Income | $325 | $337 | $289 | | Total Net Revenue | $1,846 | $1,777 | $1,766 | | Total Noninterest Income | $1,116 | $1,035 | $1,093 | | Provision for Credit Losses | $384 | $317 | $388 | - Credit card net charge-off ratio was **4.30%**, down slightly from **4.48%** in the prior quarter but comparable to **4.47%** a year ago[28](index=28&type=chunk) - Merchant acquiring volume increased to **$155.9 billion** from **$143.5 billion** in the prior quarter, reflecting strong transaction growth[29](index=29&type=chunk) [Treasury and Corporate Support](index=34&type=section&id=TREASURY%20AND%20CORPORATE%20SUPPORT) Treasury and Corporate Support reported a reduced net loss of **$67 million** in Q2 2025, significantly improving from prior quarters due to a **$105 million** reserve release and lower noninterest expenses Segment Performance Highlights | (Millions of Dollars) | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Income (Loss) | ($67) | ($236) | ($362) | | Net Interest Income (Loss) | ($294) | ($168) | ($461) | | Provision for Credit Losses | ($105) | $148 | $50 | - The segment recorded a reserve release (negative provision) of **$105 million**, contrasting with a provision expense of **$148 million** in the prior quarter[30](index=30&type=chunk)

Group 1 - U.S. Bancorp is set to release its second-quarter earnings results on July 17, with expected earnings of $1.07 per share, up from 97 cents per share a year ago [1] - The company is projected to report quarterly revenue of $7.07 billion, an increase from $6.84 billion in the previous year [1] - U.S. Bancorp raised its quarterly cash dividend from 50 cents to 52 cents per share on July 1 [2] Group 2 - Truist Securities analyst John McDonald maintained a Hold rating and raised the price target from $48 to $50 [4] - Raymond James analyst Michael Rose upgraded the stock from Outperform to Strong Buy and increased the price target from $51 to $57 [4] - Morgan Stanley analyst Betsy Graseck maintained an Overweight rating and raised the price target from $50 to $51 [4] - Citigroup analyst Keith Horowitz maintained a Buy rating and increased the price target from $55 to $59 [4] - Goldman Sachs analyst Richard Ramsden maintained a Neutral rating and raised the price target from $41 to $46 [4]

Core Viewpoint - U.S. Bancorp (USB) is expected to report year-over-year increases in revenues and earnings for Q2 2025, benefiting from lower expenses and higher non-interest income [1] Group 1: Financial Performance Expectations - The company anticipates net interest income (NII) for Q2 2025 to be between $4.1 billion and $4.2 billion, with a consensus estimate of $4.01 billion, reflecting a marginal increase from the previous quarter [2][8] - The consensus estimate for total revenues in Q2 2025 is $7.06 billion, indicating a rise of 3.3% from the year-ago figure [13] - The Zacks Consensus Estimate for average earning assets is $611.2 million, suggesting a slight sequential increase [4] Group 2: Non-Interest Income and Trading Activity - Non-interest income is projected to rise by 3.3% due to gains in trading, mortgage, and card revenues, with total non-interest income estimated at $2.93 billion [9][8] - Trading volumes in equity derivatives and corporate bonds have increased, with the consensus estimate for commercial product revenues at $391 million, reflecting a 2.4% increase from the prior quarter [5] Group 3: Loan Activity and Market Conditions - Lending activity remained strong in Q2 2025, supported by a resilient labor market and easing inflation, with notable demand for commercial and industrial loans [3] - Mortgage banking revenues are expected to reach $179.6 million, indicating a 3.8% increase from the previous quarter, despite mortgage rates fluctuating in the mid-to-upper 6% range [6] Group 4: Expense Management and Asset Quality - The company aims to keep non-interest expenses at or below $4.2 billion in Q2 2025, despite higher costs related to compensation and employee benefits [10][9] - The Zacks Consensus Estimate for non-performing loans is $1.72 billion, indicating a rise of 1.8% from the prior quarter [10] Group 5: Earnings Expectations - U.S. Bancorp has a positive Earnings ESP of +0.21%, indicating a high likelihood of beating earnings estimates [11] - The consensus estimate for Q2 earnings is $1.07, reflecting a 9.2% increase from the year-ago reported number [12]

Core Viewpoint - Analysts expect U.S. Bancorp (USB) to report quarterly earnings of $1.07 per share, reflecting a year-over-year increase of 9.2%, with revenues projected at $7.06 billion, up 3.3% from the previous year [1] Earnings Projections - The consensus EPS estimate has been revised down by 0.7% in the last 30 days, indicating a reassessment by analysts [1][2] Key Financial Metrics - Efficiency Ratio is forecasted to reach 59.1%, down from 61.0% in the same quarter last year [4] - Average Balances - Total earning assets are estimated at $611.20 billion, slightly up from $608.89 billion year-over-year [4] - Total nonperforming loans are projected at $1.72 billion, down from $1.81 billion in the same quarter last year [5] - Total nonperforming assets are expected to be $1.75 billion, compared to $1.85 billion a year ago [5] - Leverage ratio is anticipated to reach 8.5%, up from 8.1% year-over-year [6] - Tier 1 Capital Ratio is expected to be 12.5%, compared to 11.9% in the same quarter last year [6] - Total Noninterest Income is projected at $2.93 billion, up from $2.82 billion year-over-year [6] - Net interest income (taxable-equivalent basis) is likely to reach $4.12 billion, compared to $4.05 billion in the same quarter last year [7] - Mortgage banking revenue is expected at $179.55 million, down from $190.00 million year-over-year [7] - Other noninterest income is estimated at $157.21 million, slightly up from $157.00 million last year [8] - Commercial products revenue is projected at $391.02 million, compared to $374.00 million in the same quarter last year [8] - Service charges are expected to reach $322.07 million, compared to $322.00 million in the same quarter last year [9] Stock Performance - U.S. Bancorp shares have increased by 9.7% over the past month, outperforming the Zacks S&P 500 composite, which rose by 4% [10]