Core Insights - U.S. Bancorp's fourth-quarter 2025 earnings per share of $1.26 exceeded the Zacks Consensus Estimate of $1.19, marking a 24.7% increase from the prior-year quarter [1][8] - The net income attributable to U.S. Bancorp was $2.04 billion, reflecting a 22.9% rise from the previous year [1] - Total revenues for the quarter were $7.36 billion, up 5.1% year over year, and slightly above the Zacks Consensus Estimate by 0.6% [3][8] Financial Performance - For the full year 2025, earnings per share were $4.62, surpassing the consensus estimate of $4.55 and increasing from $3.79 in 2024 [2] - Net income for 2025 was $7.6 billion, a 20.2% increase from the prior year [2] - Tax-equivalent net interest income (NII) for the quarter totaled $4.31 billion, up 3.2% year over year, driven by loan growth and fixed asset repricing [3][4] Revenue and Expenses - Non-interest income rose 7.8% year over year to $3.05 billion, supported by increases across nearly all components [4] - Non-interest expenses decreased by 1.9% year over year to $4.23 billion, primarily due to lower compensation and employee benefits expenses [4] - The efficiency ratio improved to 57.4%, down from 61.5% in the prior year, indicating enhanced profitability [5] Loan and Deposit Growth - Average total loans increased by 1.3% to $384.3 billion from the previous quarter [6] - Average total deposits rose slightly to $515.1 billion from the previous quarter [6] Credit Quality - The total allowance for credit losses was $7.94 billion, showing a marginal year-over-year decline [7] - Non-performing assets decreased by 13.2% year over year to $1.59 billion [7] - Net charge-offs were $527 million, down 6.2% from the previous quarter [7] Capital Ratios - The Tier 1 capital ratio improved to 12.3% as of December 31, 2025, up from 12.2% in the prior year [9] - The Common Equity Tier 1 capital ratio was 10.8%, an increase from 10.6% year over year [9] - The tangible common equity to tangible assets ratio rose to 6.7%, up from 5.8% in the prior year [9] Future Outlook - U.S. Bancorp's diversified revenue streams, solid balance sheet, and disciplined cost control are expected to support strong financial performance moving forward [10] - Growth in NII and non-interest income, along with improved efficiency, is anticipated to enhance future profitability [10]

By Arasu Kannagi Basil Jan 20 (Reuters) - U.S. Bancorp CEO Gunjan Kedia warned on Tuesday that President Donald Trump's proposed 10% cap on credit card ​interest rates would significantly impact its clients and the broader economy, echoing concerns ‌raised by the banking industry. "Our estimate is that 90 plus percent of our clients will see a ‌detrimental impact if there was an across-the-board 10% rate cap on credit cards. The impact to 50% of the clients will be crushing, as it will be for the economy ...

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or a ...

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or a ...

Core Insights - U.S. Bancorp reported record net revenue of $7.4 billion for the fourth quarter, with a year-over-year growth of 5.1% and a full-year record of $28.7 billion [2][5] - The bank's earnings per share for the fourth quarter reached $1.26, reflecting an 18% increase year-over-year on an adjusted basis [3][5] - Tangible book value per common share increased by 18.2% year-over-year as of December 31 [1] Financial Performance - Net interest income (NII) rose by 3.3% year-over-year, supported by strong consumer deposit growth, while fee revenue increased by 7.6% year-over-year [3][5] - Total average deposits were $515 billion, up 0.7% from the prior quarter, with non-interest-bearing deposits making up about 16% of total average deposits [5][6] - Average loans totaled $384 billion, reflecting a 1.4% increase from the prior quarter, with commercial and credit card lending growing by 10.1% and 5.7% year-over-year, respectively [6] Fee Income and Growth Strategies - Fee income constituted 42% of total net revenues in 2025, with a year-over-year growth of 6.7% [8] - The bank's global fund services (GFS) segment grew at an 11% compound annual growth rate since 2021, with a 12% increase in 2025 [9] - Payments transformation is a strategic priority, with expectations of mid-single-digit growth in payments fees across card and merchant services in 2026 [10] Expense Management and Credit Quality - Non-interest expense was approximately $4.2 billion, up 0.7% sequentially, with stable expenses maintained over nine consecutive quarters [11] - Credit quality showed improvement, with non-performing assets at 0.41% of loans and net charge-offs at 0.54% [12] Capital and Future Outlook - The Common Equity Tier 1 (CET1) ratio was reported at 10.8%, with plans to gradually increase buybacks starting from $100 million to $200 million [13] - For 2026, the bank anticipates total net revenue growth of 4%-6% year-over-year and positive operating leverage of over 200 basis points [14] - The BTIG acquisition is expected to contribute $175-$200 million in quarterly fee revenue, with a 12 basis point impact on CET1 [14]

Financial Data and Key Metrics Changes - The company reported earnings per share of $1.26, an increase of approximately 18% year-over-year on an adjusted basis [4] - Net interest income increased by 3.3% year-over-year, supported by strong consumer deposit growth [4] - Total net revenue for the fourth quarter was $7.4 billion, a 5.1% increase, while full-year net revenue reached $28.7 billion [4][13] - The return on tangible common equity was 18.4%, and the efficiency ratio improved to 57.4% year-over-year [15] Business Line Data and Key Metrics Changes - Fee income represented 42% of total net revenues and grew by 6.7% year-over-year, with broad-based strength across most fee businesses [7][16] - The Global Fund Services business generated strong fee revenue growth, with total net revenue growing at a healthy 11% CAGR since 2021 [9] - Commercial loans grew by 10.1% year-over-year, while credit card loans increased by 5.7% [15] Market Data and Key Metrics Changes - Total average deposits increased by 0.7% linked quarter to $515 billion, with non-interest-bearing deposits stable at approximately 16% of total average deposits [15] - The company experienced modest growth in commercial real estate loans after 11 quarters of decline [11] Company Strategy and Development Direction - The company is focused on restoring investor confidence and executing on three key priorities, including expense management and strategic investments in technology, sales, and marketing [4][6] - The acquisition of BTIG is expected to capture considerable revenue synergies and enhance the capital markets franchise [7][8] - The company aims to drive organic growth and maintain high returns while managing risks effectively [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the economic backdrop going into 2026, highlighting strong consumer performance and improving credit quality metrics [20][88] - The company anticipates total net revenue growth in the range of 4%-6% for 2026, with positive operating leverage of 200 basis points or more [18][19] Other Important Information - The company has made significant investments in digital capabilities over the past six years, which are expected to drive productivity and support future growth [71] - The company is actively monitoring potential regulatory changes that could impact the banking industry [88] Q&A Session Summary Question: Share repurchase pace and capital ratios - Management plans to gradually increase share repurchases from $100 million to $200 million, focusing on client and loan growth first [24] Question: Impact of credit card rate caps - Management estimates that over 90% of clients would be negatively impacted by a 10% rate cap on credit cards, emphasizing the importance of financial education [25][26] Question: Revenue growth expectations for 2026 - Management expects mid-single-digit growth for both net interest income and fee revenue, driven by strong business momentum [30][31] Question: Balance sheet growth outlook - Management anticipates 3%-4% loan growth in 2026, with a focus on commercial and card loans [40] Question: Digital assets organization and revenue potential - The company is exploring opportunities in digital assets, with a focus on capital markets and custody capabilities [51] Question: BTIG acquisition and capital call - The acquisition is expected to be PPNR neutral initially, with potential for margin expansion post-merger costs [100]

Financial Data and Key Metrics Changes - The company reported earnings per share of $1.26, an increase of approximately 18% year-over-year on an adjusted basis [4] - Net interest income increased by 3.3% year-over-year, supported by strong consumer deposit growth [4] - Total net revenue for the fourth quarter was $7.4 billion, a 5.1% increase, while full-year net revenue reached $28.7 billion [4][13] - The return on tangible common equity was 18.4%, and the efficiency ratio improved to 57.4% year-over-year [15] Business Line Data and Key Metrics Changes - Fee income represented 42% of total net revenues and grew 6.7% year-over-year, with broad-based strength across most fee businesses [7][16] - Average loans totaled $384 billion, up 1.4% from the prior quarter, with commercial and credit card loans growing by 10.1% and 5.7% respectively [15] - Non-interest expense totaled approximately $4.2 billion, up 0.7% linked quarter, influenced by severance charges [17] Market Data and Key Metrics Changes - The company experienced record consumer deposits this quarter, contributing to net interest income growth [10] - The ratio of non-performing assets to loans improved to 0.41%, indicating better asset quality [17] Company Strategy and Development Direction - The company is focused on restoring investor confidence and delivering strong financial results through three key priorities [5] - Strategic investments in technology, sales, and marketing are planned for 2026 to drive growth [6] - The acquisition of BTIG is expected to create considerable revenue synergies and enhance the capital markets franchise [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the economic backdrop for 2026, highlighting strong consumer performance and improving credit quality metrics [20][88] - The company is closely monitoring potential policy changes that could impact the banking industry, particularly regarding capital and digital assets [88] Other Important Information - The company expects total net revenue growth of 4%-6% for 2026, with positive operating leverage of 200 basis points or more [18] - The BTIG acquisition is anticipated to contribute $175-$200 million of fee revenue per quarter [19] Q&A Session Summary Question: Share repurchase pace and capital ratios - Management plans to gradually increase share repurchases from $100 million to $200 million, focusing on client and loan growth first [24] Question: Impact of credit card rate caps - Management estimates that over 90% of clients would be negatively impacted by a 10% rate cap on credit cards, emphasizing the importance of financial education [25][26] Question: Revenue growth expectations for 2026 - Management expects mid-single-digit growth for both net interest income and fee revenue, driven by strong business momentum [30][31] Question: Balance sheet growth outlook - Loan growth is expected to be in the 3%-4% range, with a focus on commercial and card loans [40] Question: NIM expansion timeline - Management maintains a path to achieve a 3% net interest margin by 2027, driven by loan mix and fixed asset repricing [43] Question: Drivers of deposit growth - The company is seeing steady growth in consumer deposits, which are expected to be accretive in the long term [48][49] Question: Digital assets organization - The company is actively exploring opportunities in digital assets, particularly in capital markets and cryptocurrency custody [51] Question: BTIG acquisition impact - The acquisition is expected to be PPNR neutral initially, with potential for margin expansion post-merger costs [100]

Financial Data and Key Metrics Changes - The company reported earnings per share of $1.26, an increase of approximately 18% year-over-year on an adjusted basis [3] - Net interest income increased by 3.3% year-over-year, supported by strong consumer deposit growth [3] - Total net revenue for the fourth quarter was $7.4 billion, a 5.1% increase year-over-year, while full-year net revenue reached $28.7 billion [3][11] - The return on tangible common equity was 18.4%, and the efficiency ratio improved to 57.4% year-over-year [12] Business Line Data and Key Metrics Changes - Fee income represented 42% of total net revenues and grew by 6.7% year-over-year, with broad-based strength across most fee businesses [5][12] - The global fund services business generated strong fee revenue growth, with total net revenue growing at a healthy 11% CAGR since 2021 [8] - Commercial and credit card loans grew by 10.1% and 5.7% year-over-year, respectively, contributing to an overall loan growth of 1.4% from the prior quarter [12] Market Data and Key Metrics Changes - The company experienced record consumer deposits this quarter, with a stable percentage of non-interest-bearing deposits at approximately 16% [12] - The investment portfolio remained at $171 billion as of December 31 [13] - The company expects total net revenue growth in the range of 4%-6% for 2026, excluding the impact of the BTIG acquisition [15] Company Strategy and Development Direction - The company is focused on restoring investor confidence and delivering strong financial results through three key priorities: expense management, organic growth, and strategic investments in technology, sales, and marketing [4][5] - The acquisition of BTIG is expected to capture considerable revenue synergies and enhance the capital markets franchise [5][6] - The company aims to drive organic growth and high returns while maintaining strong risk management practices [17] Management's Comments on Operating Environment and Future Outlook - The economic backdrop going into 2026 is broadly constructive, with expectations of continued consumer spending and improving credit quality metrics [17][86] - Management expressed confidence in the ability to achieve positive operating leverage of 200 basis points or more for the full year of 2026 [15][30] - The company is closely monitoring potential policy changes that could impact the banking industry, particularly regarding capital and digital assets [87] Other Important Information - The company has made significant investments in digital capabilities over the past six years, which are expected to drive productivity and support future growth [30][70] - The company is committed to increasing share repurchases gradually, starting from $100 million to $200 million [20] Q&A Session Summary Question: Share repurchase pace and capital ratios - Management indicated plans to gradually increase share repurchases while focusing on client and loan growth [20] Question: Impact of credit card rate caps - Management estimated that a 10% rate cap on credit cards would negatively impact over 90% of clients, but they are exploring options to assist customers [22] Question: Revenue growth expectations for 2026 - Management expects mid-single-digit growth for both net interest income and fee revenue, driven by strong business momentum [27] Question: Balance sheet growth outlook - Management anticipates loan growth of 3%-4% in 2026, with a focus on commercial and card loans [36] Question: Drivers of deposit growth - Management highlighted steady growth in consumer deposits, particularly through the Bank Smartly product, and a reduction in CDs [46] Question: Digital assets organization and revenue potential - Management is actively exploring opportunities in digital assets, particularly in capital markets and custody services, but noted that the revenue model is still developing [50] Question: BTIG acquisition and capital markets strategy - Management clarified that the BTIG acquisition is expected to enhance their capital markets capabilities and is aligned with client demand [100]

Core Viewpoint - U.S. Bancorp reported strong fourth-quarter results for 2025, with adjusted earnings per share exceeding analyst expectations, but the stock price fell due to market reactions [1] Financial Performance - Adjusted earnings per share for Q4 2025 were $1.26, surpassing the consensus estimate of $1.19 - Quarterly sales reached $7.337 billion, exceeding the expected $7.308 billion [1] - Net income increased by 23.0% year over year to $2.045 billion [3] - The provision for credit losses was $577 million, up from $571 million in Q3 2025 and $560 million in Q4 2024, driven by loan portfolio growth [1][2] Key Metrics - Return on tangible common equity rose to 18.4%, and return on average assets increased to 1.19% - The efficiency ratio improved to 57.4% compared to Q4 2024 - Net interest margin increased to 2.77%, up 6 basis points year over year [3] - Average deposits rose to $515.1 billion from $511.8 billion in Q3 2025, while average total loans increased to $384.3 billion from $379.2 billion [4] Strategic Developments - U.S. Bancorp signed a definitive agreement to acquire BTIG, LLC, enhancing its investment banking and trading capabilities, with the deal expected to close in Q2 2026 pending regulatory approvals [6] - The company completed a cross-border stablecoin pilot, indicating readiness for future compliant commercial offerings [6] Outlook - U.S. Bancorp forecasts fiscal 2026 revenue between $29.85 billion and $30.42 billion, slightly above Wall Street expectations of $30.04 billion [7] - The company remains committed to its strategic priorities and medium-term targets to drive sustainable EPS growth and industry-leading returns [7] Stock Performance - U.S. Bancorp shares fell by 3.25% to $52.63 during premarket trading, approaching a 52-week high of $56.19 [8]

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