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U.S. Bancorp Stock Gains as Q3 Earnings Beat on NII, Fee Income Growth
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Key Takeaways
U.S. Bancorp's Q3 EPS of $1.22 beat estimates and rose 18.4% year over year.
Higher net interest and non-interest income boosted total revenue to $7.33 billion.
Lower expenses and improved efficiency ratio strengthened profitability and capital ratios.
U.S. Bancorp’s (USB - Free Report) third-quarter 2025 earnings per share of $1.22 beat the Zacks Consensus Estimate of $1.11. The bottom line increased 18.4% from the prior-year quarter.
USB shares rose roughly 1.5% in the pre-market trading session following the earnings release.
Results benefited from lower expenses and higher non-interest income. Also, a rise in net interest income (NII) and a strong capital position were tailwinds. However, a rise in provision was concerning.
Net income attributable to U.S. Bancorp was $2 billion, up 16.6% from the prior-year quarter.
USB’s Revenues Rise, Expenses Decline
Total revenues in the reported quarter were $7.33 billion, up 6.8% year over year. The top line beat the Zacks Consensus Estimate by 2.4%.
Tax-equivalent NII totaled $4.25 billion, up 2% from the year-ago quarter. The increase primarily resulted from fixed asset repricing, loan mix and lower rates paid on interest-bearing deposits.
The net interest margin of 2.75% was relatively stable compared with the year-ago period.
Non-interest income moved up 14.1% year over year to $3.08 billion. The upside was driven by a rise in almost all components.
Non-interest expenses declined 2% year over year to $4.19 billion due to lower compensation and employee benefits expenses, partially offset by higher technology and communications expenses and other expenses.
The efficiency ratio was 57.2%, lower than the year-ago quarter’s 60.2%. A decline in the ratio indicates an improvement in profitability.
U.S. Bancorp’s Loan & Deposit Balances Increase
Average total loans rose slightly to $379.2 billion from the previous quarter. Average total deposits moved up 1.8% from the previous quarter to $511.8 billion.
USB’s Credit Quality Improves
Total allowance for credit losses was $7.89 billion, down marginally year over year. As of Sept. 30, 2025, U.S. Bancorp’s non-performing assets amounted to $1.65 billion, down 10.4% from the year-ago period.
Net charge-offs were $536 million, down 4.9% from the year-ago quarter.
The provision for credit losses in the reported quarter was $571 million, up 2.5% from the prior-year quarter.
U.S. Bancorp’s Capital Ratios Improve
The Tier 1 capital ratio was 12.4% as of Sept. 30, 2025, up from 12.2% in the prior-year quarter. The Common Equity Tier 1 capital ratio under the Basel III standardized approach was 10.9% as of Sept. 30, 2025, up from 10.5% in the year-ago quarter.
The tangible common equity to tangible assets ratio was 6.4%, up from the prior-year quarter’s 5.7%.
Our Take on USB
U.S. Bancorp’s diversified revenue streams, solid balance sheet, and disciplined cost control continue to support its strong financial performance. Growth in NII and non-interest income, coupled with improved efficiency, bodes well for future profitability. Although provisions rose modestly, USB remains well-positioned to deliver steady returns on tangible common equity and maintain positive operating leverage in the upcoming quarters.
Bank of Hawaii (BOH - Free Report) is scheduled to announce third-quarter 2025 numbers on Oct. 27.
Over the past seven days, the Zacks Consensus Estimate for BOH’s quarterly earnings has been unchanged at $1.13 per share. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Huntington Bancshares Inc. (HBAN - Free Report) is slated to report third-quarter 2025 results on Oct. 17.
Over the past seven days, the Zacks Consensus Estimate for HBAN’s quarterly earnings has been unchanged at 38 cents per share.
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U.S. Bancorp Stock Gains as Q3 Earnings Beat on NII, Fee Income Growth
Key Takeaways
U.S. Bancorp’s (USB - Free Report) third-quarter 2025 earnings per share of $1.22 beat the Zacks Consensus Estimate of $1.11. The bottom line increased 18.4% from the prior-year quarter.
USB shares rose roughly 1.5% in the pre-market trading session following the earnings release.
Results benefited from lower expenses and higher non-interest income. Also, a rise in net interest income (NII) and a strong capital position were tailwinds. However, a rise in provision was concerning.
Net income attributable to U.S. Bancorp was $2 billion, up 16.6% from the prior-year quarter.
USB’s Revenues Rise, Expenses Decline
Total revenues in the reported quarter were $7.33 billion, up 6.8% year over year. The top line beat the Zacks Consensus Estimate by 2.4%.
Tax-equivalent NII totaled $4.25 billion, up 2% from the year-ago quarter. The increase primarily resulted from fixed asset repricing, loan mix and lower rates paid on interest-bearing deposits.
The net interest margin of 2.75% was relatively stable compared with the year-ago period.
Non-interest income moved up 14.1% year over year to $3.08 billion. The upside was driven by a rise in almost all components.
Non-interest expenses declined 2% year over year to $4.19 billion due to lower compensation and employee benefits expenses, partially offset by higher technology and communications expenses and other expenses.
The efficiency ratio was 57.2%, lower than the year-ago quarter’s 60.2%. A decline in the ratio indicates an improvement in profitability.
U.S. Bancorp’s Loan & Deposit Balances Increase
Average total loans rose slightly to $379.2 billion from the previous quarter. Average total deposits moved up 1.8% from the previous quarter to $511.8 billion.
USB’s Credit Quality Improves
Total allowance for credit losses was $7.89 billion, down marginally year over year. As of Sept. 30, 2025, U.S. Bancorp’s non-performing assets amounted to $1.65 billion, down 10.4% from the year-ago period.
Net charge-offs were $536 million, down 4.9% from the year-ago quarter.
The provision for credit losses in the reported quarter was $571 million, up 2.5% from the prior-year quarter.
U.S. Bancorp’s Capital Ratios Improve
The Tier 1 capital ratio was 12.4% as of Sept. 30, 2025, up from 12.2% in the prior-year quarter. The Common Equity Tier 1 capital ratio under the Basel III standardized approach was 10.9% as of Sept. 30, 2025, up from 10.5% in the year-ago quarter.
The tangible common equity to tangible assets ratio was 6.4%, up from the prior-year quarter’s 5.7%.
Our Take on USB
U.S. Bancorp’s diversified revenue streams, solid balance sheet, and disciplined cost control continue to support its strong financial performance. Growth in NII and non-interest income, coupled with improved efficiency, bodes well for future profitability. Although provisions rose modestly, USB remains well-positioned to deliver steady returns on tangible common equity and maintain positive operating leverage in the upcoming quarters.
U.S. Bancorp Price, Consensus and EPS Surprise
U.S. Bancorp price-consensus-eps-surprise-chart | U.S. Bancorp Quote
Currently, U.S. Bancorp carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Dates & Expectations of Bank Stocks
Bank of Hawaii (BOH - Free Report) is scheduled to announce third-quarter 2025 numbers on Oct. 27.
Over the past seven days, the Zacks Consensus Estimate for BOH’s quarterly earnings has been unchanged at $1.13 per share. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Huntington Bancshares Inc. (HBAN - Free Report) is slated to report third-quarter 2025 results on Oct. 17.
Over the past seven days, the Zacks Consensus Estimate for HBAN’s quarterly earnings has been unchanged at 38 cents per share.