U.S. Bancorp Sees Embedded Payments and Stablecoins as Growth Drivers

Core Insights - U.S. Bancorp's third-quarter earnings showed growth in deposits, improved credit metrics, and advancements in embedded payments as key drivers of performance [1][3] Financial Performance - Consumer deposits accounted for over 52% of total average deposits, reflecting a year-over-year increase of more than 2% [3] - Overall average deposits reached $511.8 billion in the latest quarter, up from $508.8 billion a year ago [4] - Fee income is expected to grow in the mid-single digits, supported by interconnected product offerings [4] Credit Quality - Key credit quality metrics, including nonperforming assets and net charge-offs, improved both sequentially and year-over-year [4] - The company reported strong spending trends and favorable credit conditions, with loss rates significantly decreasing this quarter [5] Merchant Business - The merchant business experienced a strong quarter, driven by success in key verticals and tech-led strategies [5] Stablecoin Initiatives - The company is exploring stablecoins in two areas: capital markets and as a payment rail, with pilot programs planned for the near term [6][8] - Efforts include providing custody and safekeeping for stablecoin collateral and cryptocurrency assets, as well as preparing to onboard stablecoins into the banking system [7][8] Market Reaction - U.S. Bancorp shares increased by 1.7% in early trading following the earnings release [9]