Key TakeawaysU.S. Bancorp's stock dipped Wednesday as the regional bank posted lower first-quarter revenue, increased its provision for credit losses, and cut its guidance.Net interest income declined 14% year-over-year, while its provision for credit losses went up 30%.The U.S. Bank parent reduced its full-year net interest income outlook by at least $200 million from its previous estimate. U.S. Bancorp (USB) shares dipped Wednesday as the regional bank posted lower first-quarter revenue, increased its pro ...

Financial Data and Key Metrics - Q1 2024 earnings per share (EPS) was $0 78, including $0 12 per share of notable items Excluding notables, EPS was $0 90 [6] - CET1 ratio ended the quarter at 10 0%, up 10 basis points from year-end, and return on tangible common equity (ROTCE) was 17 4% on an adjusted basis [6] - Net interest income (NII) on a taxable equivalent basis was approximately $4 billion, down 3 1% linked-quarter, and net interest margin (NIM) declined 8 basis points to 2 70% [13] - Non-interest income increased 7 7% year-over-year, driven by higher payments revenue, capital markets activity, and mortgage banking fees [14] - Non-interest expense for the quarter totaled $4 5 billion, including $265 million of notable items Adjusted non-interest expense decreased 0 2% linked-quarter and 2 7% year-over-year [14] - Non-performing assets increased 20% linked-quarter, primarily due to stress in the commercial real estate office portfolio and one idiosyncratic commercial loan [15] - Net charge-off ratio was 0 53%, up 4 basis points from Q4 2023 and higher compared to Q1 2023 [15] Business Line Performance - Fee income represents about 40% of total net revenue, positioning the company well in a lower interest rate environment [9] - Payments ecosystem showed strong progress, with small business relationships growing 15%-20% and related revenue growing 25%-30% over the past few years [9] - Loan growth was impacted by slow industry demand, with total average loans down 0 5% linked-quarter to $371 billion [11] - Consumer deposit growth remained strong despite industry-wide pressure, with total average deposits stable at $503 billion [11] Market Performance - Deposit mix and pricing pressure were driven by a higher-for-longer interest rate environment, impacting NII expectations for the full year [8] - Corporate and mid-market clients shifted from low-cost deposits to higher-cost deposits, slowing the pace of deposit mix shift [22] - Seasonal deposit inflows at the end of Q1 were higher than usual, with $15 billion to $20 billion in temporary deposits, primarily due to holiday timing and tax season [57] Strategy and Industry Competition - The company is focusing on operational efficiencies and cost management to mitigate the impact of lower-than-expected NII on profitability [8][23] - Investments in digital capabilities, technology modernization, and the payments ecosystem are driving fee growth and client penetration [18] - The company is prioritizing capital-efficient growth and optimizing its funding mix, limiting reliance on short-term borrowings [12] Management Commentary on Operating Environment and Outlook - Management expects NII to stabilize in Q2 and grow in the second half of 2024, driven by loan repricing, deposit stabilization, and securities portfolio churn [51][62] - Full-year 2024 NII guidance was revised to $16 1 billion to $16 4 billion, reflecting changes in client deposit behavior and competitive dynamics [16] - Non-interest income is expected to grow at a mid-single-digit rate for the full year, supported by strong capital markets activity and payments revenue [16] - Credit quality metrics are developing in line with expectations, with non-performing assets expected to moderate after Q2 [32] Other Important Information - The company completed the integration of Union Bank, achieving $900 million in cost synergies [23] - The company is pausing share repurchases to build capital levels, focusing on dividends and investments in the business [72] - The company is actively managing its asset sensitivity to remain neutral in a volatile rate environment [43][65] Q&A Session Summary Question: NII Guidance and Deposit Behavior [21] - The company revised its NII guidance due to slower-than-expected stabilization in deposit mix shifts, particularly in corporate and mid-market segments [22] - Management expects NII to stabilize in Q2 and grow in the second half of 2024, driven by loan repricing and deposit stabilization [22][62] Question: Securities Yield and Deposit Mix [26] - Securities yield was down 1 basis point due to temporary hedging actions, with $3 billion in securities rolling off each quarter at lower yields [27] - Non-interest-bearing deposits (NIB) are expected to continue trending down, potentially reaching the mid-70s as a percentage of total deposits [27][85] Question: Fee Revenue Outlook [28] - Fee revenue growth is expected to be driven by strong capital markets activity, mortgage banking, and payments business, with mid-single-digit growth anticipated for the full year [29] Question: Credit Trends and Charge-offs [31] - Non-performing assets are expected to increase in Q2, primarily due to commercial real estate office stress, but charge-offs are expected to moderate later in the year [32][34] Question: Expense Management [36] - The company is focusing on operational efficiencies, including procurement, third-party spend, and workplace management, to offset NII pressure [23][36] Question: Corporate Deposit Behavior [37] - Corporate clients are shifting from NIB to interest-bearing deposits, with the pace of rotation slowing but expected to continue [38] Question: Asset Sensitivity and Rate Environment [42] - The company is managing its asset sensitivity to remain neutral, with actions taken to hedge against rate volatility [43][65] Question: Payments Business Performance [45] - Payments revenue growth was 4% year-over-year, with strong momentum in card services and merchant payments, offset by temporary declines in travel-related revenue [46] Question: CET1 Ratio and Capital Return [71] - The CET1 ratio increased to 10 0%, with the company pausing share repurchases to build capital levels ahead of Basel III endgame implementation [72] Question: Deposit Surge and NIB Trends [56][82] - The $15 billion to $20 billion deposit surge at the end of Q1 was primarily seasonal, with $10 billion above typical levels, and is expected to normalize in Q2 [57][88] Question: NII Drivers and Medium-Term Outlook [77] - The company expects NII growth in the second half of 2024, driven by loan repricing, deposit stabilization, and securities portfolio churn [62][78] Question: Deposit Beta and NIB Migration [82] - Deposit beta has slowed, with non-interest-bearing deposits expected to decline further, potentially reaching the mid-70s as a percentage of total deposits [83][85] Question: NII Guidance Conservatism [101] - The NII guidance range reflects uncertainty in client behavior and market dynamics, with no significant conservatism or aggressiveness assumed [102]

For the quarter ended March 2024, U.S. Bancorp (USB) reported revenue of $6.69 billion, down 6.4% over the same period last year. EPS came in at $0.90, compared to $1.16 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $6.7 billion, representing a surprise of -0.16%. The company delivered an EPS surprise of +1.12%, with the consensus EPS estimate being $0.89.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street ex ...

U.S. Bancorp (USB) came out with quarterly earnings of $0.90 per share, beating the Zacks Consensus Estimate of $0.89 per share. This compares to earnings of $1.16 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 1.12%. A quarter ago, it was expected that this company would post earnings of $0.99 per share when it actually produced earnings of $0.99, delivering no surprise.Over the last four quarters, the company has surpassed ...

Follow Invezz on Telegram , Twitter , and Google News for instant updates >On April 17th, U.S. Bancorp reported its Q1 2024 financial results, before US markets opened this morning.Are you looking for signals & alerts from pro-traders? Sign-up to Invezz Signals™ for FREE. Takes 2 mins.The results exceeded analysts’ expectations, but were still generally lackluster as compared with 2023. The bank announced a net income of $1.5 billion, compared with a Q1 2023 net income of $1.8 billion and a Q4 2023 net inco ...

Consolidated Financial Statements [Quarterly Consolidated Statement of Income](index=2&type=section&id=Quarterly%20Consolidated%20Statement%20of%20Income) In Q1 2024, U.S. Bancorp reported a net income of $1.326 billion and diluted EPS of $0.78, significantly increasing from the prior quarter but decreasing from Q1 2023, primarily due to lower net interest income and continued net interest margin compression Q1 2024 Consolidated Income Statement Highlights (vs. Prior Periods) | Metric | Q1 2024 | Q4 2023 | Q1 2023 | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | :--- | :--- | | **Net Interest Income** | $3,985M | $4,111M | $4,634M | -14.0% | -3.1% | | **Total Noninterest Income** | $2,700M | $2,620M | $2,507M | +7.7% | +3.1% | | **Total Noninterest Expense** | $4,459M | $5,219M | $4,555M | -2.1% | -14.6% | | **Net Income** | $1,326M | $861M | $1,704M | -22.2% | +54.0% | | **Diluted EPS** | $0.78 | $0.49 | $1.04 | -25.0% | +59.2% | | **Net Interest Margin** | 2.70% | 2.78% | 3.10% | -40 bps | -8 bps | [Consolidated Ending Balance Sheet](index=4&type=section&id=Consolidated%20Ending%20Balance%20Sheet) As of March 31, 2024, total assets were $683.6 billion, with stable total loans at $374.6 billion and increased total deposits to $528.1 billion, driven by growth in interest-bearing deposits offsetting a decline in noninterest-bearing deposits Key Balance Sheet Items (as of March 31, 2024) | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | **Total Assets** | $683.6B | $663.5B | $682.4B | | **Net Loans** | $367.1B | $366.5B | $380.8B | | **Total Deposits** | $528.1B | $512.3B | $505.3B | | **Noninterest-bearing Deposits** | $91.2B | $90.0B | $124.6B | | **Total Shareholders' Equity** | $56.0B | $55.8B | $53.5B | [Consolidated Average Balance Sheet and Yields/Rates](index=6&type=section&id=Consolidated%20Average%20Balance%20Sheet%20and%20Yields%2FRates) For Q1 2024, the net interest margin (NIM) on a taxable-equivalent basis was 2.70%, reflecting compression driven by a significant increase in the rate paid on interest-bearing liabilities outpacing the rise in the yield on total earning assets Q1 2024 Average Balances and Yields/Rates Analysis | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | **Avg. Earning Assets** | $596.1B | $594.2B | $607.6B | | **Yield on Earning Assets** | 5.25% | 5.22% | 4.65% | | **Avg. Interest-Bearing Liabilities** | $487.4B | $479.7B | $458.1B | | **Rate on Interest-Bearing Liabilities** | 3.12% | 3.02% | 2.06% | | **Net Interest Margin (Taxable-equivalent)** | 2.70% | 2.78% | 3.10% | - Year-over-year, average noninterest-bearing deposits decreased by **34.6%**, while interest-bearing deposits, particularly money market and time deposits, grew significantly by **33.7%** and **55.5%** respectively, reflecting a shift in deposit mix towards higher-cost funding[8](index=8&type=chunk) [Loan Portfolio](index=13&type=section&id=Loan%20Portfolio) As of March 31, 2024, the total loan portfolio of $374.6 billion was well-diversified, with commercial loans as the largest segment, and notable shifts including a decrease in 'Other retail' and growth in credit card loans compared to the prior year Loan Portfolio Composition (March 31, 2024) | Loan Category | Amount | Percent of Total | | :--- | :--- | :--- | | **Total Commercial** | $134.7B | 36.0% | | **Total Commercial Real Estate** | $52.7B | 14.1% | | **Total Residential Mortgages** | $116.1B | 31.0% | | **Credit Card** | $27.8B | 7.4% | | **Total Other Retail** | $43.3B | 11.5% | | **Total Loans** | **$374.6B** | **100.0%** | Supplemental Business Line Schedules [Wealth, Corporate, Commercial and Institutional Banking](index=15&type=section&id=Wealth%2C%20Corporate%2C%20Commercial%20and%20Institutional%20Banking) This segment reported a net income of $651 million for Q1 2024, a decrease from prior periods driven by lower net interest income and a swing to provision expense, despite increased noninterest income and deteriorating credit quality Segment Financial Highlights (Q1 2024) | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | **Net Income** | $651M | $687M | $942M | | **Total Net Revenue** | $2,378M | $2,328M | $2,570M | | **Provision for Credit Losses** | $138M | $70M | ($26M) | | **Total Net Charge-offs** | $65M | $99M | $5M | - Assets Under Management grew to **$472.2 billion**, up from **$419.6 billion** in the prior year, driven by growth across all categories, especially money market funds[20](index=20&type=chunk) [Consumer and Business Banking](index=20&type=section&id=Consumer%20and%20Business%20Banking) The Consumer and Business Banking segment generated a net income of $601 million in Q1 2024, primarily due to a 14% year-over-year decline in net interest income, an increased provision for credit losses, and higher net charge-offs Segment Financial Highlights (Q1 2024) | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | **Net Income** | $601M | $616M | $770M | | **Total Net Revenue** | $2,437M | $2,505M | $2,742M | | **Provision for Credit Losses** | $55M | $49M | $7M | | **Total Net Charge-offs** | $68M | $64M | $42M | - Mortgage production volume was **$7.1 billion** in Q1 2024, down from **$9.9 billion** in Q1 2023, reflecting the challenging mortgage market environment[29](index=29&type=chunk) - The number of branches continued to decline, reaching **2,256** in Q1 2024, down from **2,462** in Q1 2023, as part of ongoing optimization efforts[27](index=27&type=chunk) [Payment Services](index=26&type=section&id=Payment%20Services) Payment Services delivered a net income of $248 million in Q1 2024, a decrease from Q1 2023, as revenue growth was more than offset by a significant increase in the provision for credit losses and rising credit card net charge-off rates Segment Financial Highlights (Q1 2024) | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | **Net Income** | $248M | $183M | $310M | | **Total Net Revenue** | $1,715M | $1,738M | $1,592M | | **Provision for Credit Losses** | $359M | $461M | $220M | | **Credit Card Net Charge-off Ratio** | 4.26% | 3.65% | 2.78% | - Payment volumes showed year-over-year growth, with credit card volume up **4.5%** to **$33.7 billion** and merchant acquiring volume up **3.6%** to **$137.6 billion**[36](index=36&type=chunk) [Treasury and Corporate Support](index=31&type=section&id=Treasury%20and%20Corporate%20Support) This segment recorded a net loss of $181 million in Q1 2024, an improvement from the prior year, primarily due to a significantly lower provision for credit losses and reduced noninterest expense Segment Financial Highlights (Q1 2024) | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | **Net Loss** | ($181M) | ($639M) | ($324M) | | **Total Net Revenue** | $185M | $191M | $271M | | **Provision for Credit Losses** | $1M | ($68M) | $226M | | **Total Noninterest Expense** | $482M | $1,210M | $549M |

Core Insights - U.S. Bank is recognized as a leading mortgage lender, particularly for its commitment to assist underserved borrowers and its diverse range of home loan products [1][5][9] Mortgage Products - U.S. Bank offers various home loan types, including conventional loans, FHA loans, VA loans, and home equity loans, with specific assistance programs for down payments and closing costs [5][9][10] - The bank provides up to $12,500 in down payment assistance and an additional $5,000 in lender fee credits for underserved families [5] - Existing customers may receive a closing costs credit of up to $1,000 [5] Loan Qualification and Rates - The prequalification process is free and quick, taking about five minutes without affecting the credit score [5][22] - U.S. Bank's advertised mortgage rates are primarily aimed at well-qualified buyers, requiring a 25% down payment and a FICO score of 740 or higher, which is above the national average of 715 [5][21] - The bank's mortgage rates scored 3 out of 5 stars, with a near-median interest rate of 6.5% and total loan costs of $4,864.87 [20][21] Home Equity Options - U.S. Bank offers home equity lines of credit (HELOCs) with adjustable rates and the option to convert to a fixed rate for up to 20 years [13] - Home equity loans are available with a fixed-rate payback option, and potential borrowers can receive a Loan Estimate without a full application [14][15] Online Resources and Support - U.S. Bank provides extensive online resources, including educational materials and calculators, earning a 5-star rating in the Online Features category [27] - The bank's Learning Center includes articles on mortgage underwriting, insurance, and first-time homebuyer loans [24] Comparison with Competitors - U.S. Bank's mortgage offerings are competitive with other lenders like Truist and Chase, particularly in terms of down payment assistance and government-backed loans [30][29] - While both U.S. Bank and Truist show rates with one discount point, Truist allows for zero points pricing, giving it a slight advantage in transparency [29]

Wall Street expects a year-over-year decline in earnings on lower revenues when U.S. Bancorp (USB) reports results for the quarter ended March 2024. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on April 17, 2024, might help the stock move higher if these key numbers are better than expecta ...

Changes to Basel III "endgame" rules could remove an overhang from this bank stock.Regulators have been working on proposed bank changes, called Basel III endgame, which they argue would help strengthen the financial system by requiring banks to hold more capital on their balance sheets. Banks pushed back against these rules, arguing they are well capitalized, and further capital requirements could limit them and their ability to lend to their customers.U.S. Bancorp (USB -0.44%) was one bank facing big ques ...

U.S. Bancorp (USB) closed at $43.23 in the latest trading session, marking a -1.64% move from the prior day. The stock's change was less than the S&P 500's daily loss of 0.72%. Elsewhere, the Dow saw a downswing of 1%, while the tech-heavy Nasdaq depreciated by 0.95%.Heading into today, shares of the company had gained 2.93% over the past month, lagging the Finance sector's gain of 3.08% and outpacing the S&P 500's gain of 2.16% in that time.Investors will be eagerly watching for the performance of U.S. Ban ...