TD Cowen Maintains a Constructive View on U.S. Bancorp (USB)

Core Viewpoint - U.S. Bancorp is actively expanding its capabilities and market presence through strategic acquisitions and positive financial performance, positioning itself favorably for future growth [4][5][6]. Financial Performance - U.S. Bancorp reported a core EPS of $1.26 for Q4 2025, exceeding expectations, with net interest income and fees both showing positive surprises [3]. - The company maintained tight expense control and demonstrated solid pre-provision operating leverage during the quarter [3]. Acquisition Details - U.S. Bancorp announced plans to acquire Wall Street brokerage BTIG for up to $1 billion in cash and stock, enhancing its capital markets presence [4][5]. - The acquisition involves an upfront payment of $725 million in cash and stock, with an additional $275 million contingent on performance targets over three years [6]. - This deal is expected to add approximately $750 million in annual revenue, primarily from fee-based services, and will enhance capabilities in equity capital markets, M&A advisory, and equity trading [6]. Strategic Importance - The acquisition of BTIG is seen as a strategic move to fill product gaps for corporate and institutional clients, allowing U.S. Bancorp to offer a more comprehensive suite of capital markets services [5]. - The relationship between U.S. Bancorp and BTIG dates back to 2014, indicating a long-standing partnership that will be further strengthened through this acquisition [5]. Company Overview - U.S. Bancorp operates as a financial services holding company with diverse operations across various sectors, including Wealth, Corporate, Commercial and Institutional Banking, Consumer and Business Banking, Payment Services, and Treasury and Corporate Support [7].