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U.S. Bancorp Q4 Earnings Beat Estimates as NII & Fee Income Rise Y/Y
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Key Takeaways
USB posted Q4 EPS of $1.26, beating estimates and rising 24.7% year over year on higher net income.
U.S. Bancorp saw revenue climb 5.1% as NII grew on loan growth and asset repricing, while margins expanded.
USB cut expenses year over year, improving its efficiency ratio, even as credit-loss provisions edged higher.
U.S. Bancorp’s (USB - Free Report) fourth-quarter 2025 earnings per share of $1.26 beat the Zacks Consensus Estimate of $1.19. The bottom line increased 24.7% from the prior-year quarter.
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 $2.04 billion, up 22.9% from the prior-year quarter.
In 2025, earnings of $4.62 per share surpassed the consensus estimate of $4.55 and rose from $3.79 in 2024. Net income was $7.6 billion, up 20.2% from the prior-year quarter.
USB’s Revenues Rise, Expenses Decline
Total revenues in the reported quarter were $7.36 billion, up 5.1% year over year. The top line beat the Zacks Consensus Estimate by 0.6%.
For 2025, total revenues were $28.54 billion, which marginally missed the Zacks Consensus Estimate of $28.61 billion. The top line rose 4.4% year over year.
Tax-equivalent NII totaled $4.31 billion, up 3.2% from the year-ago quarter. The increase primarily resulted from loan growth and fixed asset repricing.
The net interest margin of 2.77% expanded 6 basis points year over year.
Non-interest income moved up 7.8% year over year to $3.05 billion. The upside was driven by a rise in almost all components.
Non-interest expenses declined 1.9% year over year to $4.23 billion. The decrease was due to lower compensation and employee benefits expenses, partially offset by higher marketing and business development expenses, technology and communications expenses and other expenses.
The efficiency ratio was 57.4%, lower than the year-ago quarter’s 61.5%. A decline in the ratio indicates an improvement in profitability.
U.S. Bancorp’s Loan & Deposit Balances Increase
Average total loans rose 1.3% to $384.3 billion from the previous quarter. Average total deposits moved up slightly from the previous quarter to $515.1 billion.
USB’s Credit Quality Improves
Total allowance for credit losses was $7.94 billion, down marginally year over year. As of Dec. 31, 2025, U.S. Bancorp’s non-performing assets amounted to $1.59 billion, down 13.2% from the year-ago period.
Net charge-offs were $527 million, down 6.2% from the year-ago quarter.
The provision for credit losses in the reported quarter was $577 million, up 3% from the prior-year quarter.
U.S. Bancorp’s Capital Ratios Improve
The Tier 1 capital ratio was 12.3% as of Dec. 31, 2025, up from 12.2% in the prior-year quarter. The Common Equity Tier 1 capital ratio under the Basel III standardized approach was 10.8% as of Dec. 31, 2025, up from 10.6% in the year-ago quarter.
The tangible common equity to tangible assets ratio was 6.7%, up from the prior-year quarter’s 5.8%.
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.
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U.S. Bancorp Q4 Earnings Beat Estimates as NII & Fee Income Rise Y/Y
Key Takeaways
U.S. Bancorp’s (USB - Free Report) fourth-quarter 2025 earnings per share of $1.26 beat the Zacks Consensus Estimate of $1.19. The bottom line increased 24.7% from the prior-year quarter.
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 $2.04 billion, up 22.9% from the prior-year quarter.
In 2025, earnings of $4.62 per share surpassed the consensus estimate of $4.55 and rose from $3.79 in 2024. Net income was $7.6 billion, up 20.2% from the prior-year quarter.
USB’s Revenues Rise, Expenses Decline
Total revenues in the reported quarter were $7.36 billion, up 5.1% year over year. The top line beat the Zacks Consensus Estimate by 0.6%.
For 2025, total revenues were $28.54 billion, which marginally missed the Zacks Consensus Estimate of $28.61 billion. The top line rose 4.4% year over year.
Tax-equivalent NII totaled $4.31 billion, up 3.2% from the year-ago quarter. The increase primarily resulted from loan growth and fixed asset repricing.
The net interest margin of 2.77% expanded 6 basis points year over year.
Non-interest income moved up 7.8% year over year to $3.05 billion. The upside was driven by a rise in almost all components.
Non-interest expenses declined 1.9% year over year to $4.23 billion. The decrease was due to lower compensation and employee benefits expenses, partially offset by higher marketing and business development expenses, technology and communications expenses and other expenses.
The efficiency ratio was 57.4%, lower than the year-ago quarter’s 61.5%. A decline in the ratio indicates an improvement in profitability.
U.S. Bancorp’s Loan & Deposit Balances Increase
Average total loans rose 1.3% to $384.3 billion from the previous quarter. Average total deposits moved up slightly from the previous quarter to $515.1 billion.
USB’s Credit Quality Improves
Total allowance for credit losses was $7.94 billion, down marginally year over year. As of Dec. 31, 2025, U.S. Bancorp’s non-performing assets amounted to $1.59 billion, down 13.2% from the year-ago period.
Net charge-offs were $527 million, down 6.2% from the year-ago quarter.
The provision for credit losses in the reported quarter was $577 million, up 3% from the prior-year quarter.
U.S. Bancorp’s Capital Ratios Improve
The Tier 1 capital ratio was 12.3% as of Dec. 31, 2025, up from 12.2% in the prior-year quarter. The Common Equity Tier 1 capital ratio under the Basel III standardized approach was 10.8% as of Dec. 31, 2025, up from 10.6% in the year-ago quarter.
The tangible common equity to tangible assets ratio was 6.7%, up from the prior-year quarter’s 5.8%.
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
Huntington Bancshares Inc. (HBAN - Free Report) is slated to report fourth-quarter 2025 results on Jan. 22.
Over the past seven days, the Zacks Consensus Estimate for HBAN’s quarterly earnings has been unchanged at 39 cents per share.
Bank of Hawaii (BOH - Free Report) is scheduled to announce fourth-quarter 2025 numbers on Jan. 26.
Over the past seven days, the Zacks Consensus Estimate for BOH’s quarterly earnings has been unchanged at $1.25 per share.