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U.S. Bancorp Q4 Earnings Beat on Y/Y Rise in Fee Income, Shares Fall
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Key Takeaways
USB posted Q4 EPS of $1.26, topping estimates as revenue rose 5.1% year over year on broad-based fee growth.
U.S. Bancorp's non-interest income jumped 7.8%, led by gains in payments, trust fees, and capital markets.
USB non-interest expenses fell 1.9%, but higher provisions pushed shares slightly lower after results.
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.
Total revenues in the reported quarter were $7.37 billion, up 5.1% year over year. The top line beat the Zacks Consensus Estimate by 0.6%.
Results benefited from broad-based expansion in fee-generating businesses. The quarter also benefited from disciplined expense management which supported margin expansion and operating stability. However rise in provision was concerning. Despite strong quarterly performance, USB shares pared initial gains and ended yesterday’s session down slightly.
Increase in Non-Interest Income Boosts USB’s Q4 Revenues
Non-interest income moved up 7.8% year over year to $3.05 billion. The increase was driven by higher payment services revenues, trust and investment management fees, capital markets revenues, mortgage banking revenues, investment products fees, and other revenues.
Notably, Payment services revenues rose 3.9% from the fourth quarter of 2024 due to increases in card revenues. Trust and investment management fees rallied 7.5%, driven by business growth and favorable market conditions. Capital markets revenues rose 17.3% due to higher corporate bond underwriting fees. Mortgage banking revenues increased 12.1% due to higher gain on sale activity.
Similar to USB, other banks like Regions Financial (RF - Free Report) and Fifth Third Bancorp (FITB - Free Report) witnessed improvements in non-interest income in the fourth quarter. This resulted in a rise in revenues for both companies. Regions Financial's non-interest income increased 9.4% year over year to $640 million, while Fifth Third Bancorp’s non-interest income rose 11% to $811 million.
Additionally, USB’s tax-equivalent net interest income (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 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.
Other Factors That Impacted USB’s Q4 Results
USB’s 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. However, the provision for credit losses in the reported quarter was $577 million, up 3% from the prior-year quarter.
Looking ahead, U.S. Bancorp’s management anticipates revenue growth, capital markets expansion and payments innovation to be the key drivers for 2026. The integration of BTIG LLC (expected to close in the second quarter of 2026) is likely to enhance the bank’s capital markets capabilities, creating cross-selling opportunities and strengthening its institutional franchise.
Image: Bigstock
U.S. Bancorp Q4 Earnings Beat on Y/Y Rise in Fee Income, Shares Fall
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.
Total revenues in the reported quarter were $7.37 billion, up 5.1% year over year. The top line beat the Zacks Consensus Estimate by 0.6%.
Results benefited from broad-based expansion in fee-generating businesses. The quarter also benefited from disciplined expense management which supported margin expansion and operating stability. However rise in provision was concerning. Despite strong quarterly performance, USB shares pared initial gains and ended yesterday’s session down slightly.
U.S. Bancorp Price, Consensus and EPS Surprise
U.S. Bancorp price-consensus-eps-surprise-chart | U.S. Bancorp Quote
Increase in Non-Interest Income Boosts USB’s Q4 Revenues
Non-interest income moved up 7.8% year over year to $3.05 billion. The increase was driven by higher payment services revenues, trust and investment management fees, capital markets revenues, mortgage banking revenues, investment products fees, and other revenues.
Notably, Payment services revenues rose 3.9% from the fourth quarter of 2024 due to increases in card revenues. Trust and investment management fees rallied 7.5%, driven by business growth and favorable market conditions. Capital markets revenues rose 17.3% due to higher corporate bond underwriting fees. Mortgage banking revenues increased 12.1% due to higher gain on sale activity.
Similar to USB, other banks like Regions Financial (RF - Free Report) and Fifth Third Bancorp (FITB - Free Report) witnessed improvements in non-interest income in the fourth quarter. This resulted in a rise in revenues for both companies. Regions Financial's non-interest income increased 9.4% year over year to $640 million, while Fifth Third Bancorp’s non-interest income rose 11% to $811 million.
Additionally, USB’s tax-equivalent net interest income (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 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.
Other Factors That Impacted USB’s Q4 Results
USB’s 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. However, the provision for credit losses in the reported quarter was $577 million, up 3% from the prior-year quarter.
Looking ahead, U.S. Bancorp’s management anticipates revenue growth, capital markets expansion and payments innovation to be the key drivers for 2026. The integration of BTIG LLC (expected to close in the second quarter of 2026) is likely to enhance the bank’s capital markets capabilities, creating cross-selling opportunities and strengthening its institutional franchise.
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.