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US Bancorp Declares SCB & Plans Dividend Hike After 2026 Stress Test
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Key Takeaways
USB passed the Fed's 2026 stress test, while its SCB will remain unchanged at 2.6% until Oct. 1, 2027.
U.S. Bancorp intends to raise its quarterly dividend by 3.8% to 54 cents per share.
USB's CET1 ratio of 10.8% exceeded the 7.1% minimum, supporting capital returns and growth.
Following the release of the Federal Reserve's 2026 stress test, U.S. Bancorp (USB - Free Report) outlined its planned capital actions and reaffirmed its strong capital position. According to the Fed’s stress test results released yesterday, USB is among the 32 U.S. banks that successfully passed the test.
Based on the 2026 stress test results, USB's stress capital buffer (SCB) would have been subject to the regulatory floor of 2.5%. However, as announced by the Fed in February 2026, stress test-related capital buffer requirements will remain unchanged through 2027 while the agency reviews public feedback on its supervisory models. As such, the company's SCB will remain unchanged at 2.6% until Oct. 1, 2027.
Including the Basel III minimum common equity Tier 1 (CET1) capital requirement of 4.5%, USB is also required to maintain a CET1 ratio of at least 7.1%. As of March 31, 2026, the company's CET1 ratio was 10.8%, significantly above the required minimum level. This underlines the capital strength of USB and enables the bank to undertake organic growth initiatives and continue capital payouts.
As part of its planned capital actions, U.S. Bancorp intends to raise its quarterly common stock dividend by 3.8% to 54 cents per share from 52 cents, subject to board approval. The higher dividend is expected to become effective in the third quarter of 2026.
Based on yesterday's closing price of $60.10, its current dividend yield stands at 3.5% compared with the industry's 2.7%. Over the past five years, the company has increased its dividend five times.
Dividend Yield
Image Source: Zacks Investment Research
Apart from dividends, USB continues to return capital through share repurchases. In September 2024, the board authorized a share repurchase program of up to $5 billion of common stock. As of March 31, 2026, nearly $4.1 billion remained available under the authorization.
U.S. Bancorp also maintains a decent liquidity position. As of March 31, 2026, cash and due from banks were $48.4 billion, while short-term borrowings and long-term debt totaled $17.9 billion and $61.4 billion, respectively.
Driven by strong capital levels, earnings strength and solid liquidity, USB is expected to sustain its capital distribution activities and continue enhancing shareholder value. The planned dividend increase and significant remaining share repurchase capacity reflect management's confidence in the company's financial position and long-term growth prospects.
Other Firms Set to Raise Dividends After 2026 Stress Test
Some other participants from the stress test that are enhancing capital distribution plans following the results are Wells Fargo (WFC - Free Report) and Goldman Sachs (GS - Free Report) .
Wells Fargo intends to raise its third-quarter 2026 common stock dividend by 11% to 50 cents per share from 45 cents, subject to board approval. Goldman Sachs plans to increase its quarterly common dividend by 11% to $5 per share from $4.50 beginning July 1, 2026, subject to approval at its scheduled third-quarter board meeting.
USB’s Price Performance and Zacks Rank
Over the past six months, shares of US Bancorp have rallied 9.3% compared with the industry’s growth of 12.5%.
View the Zacks #1 Rank List
Image: Bigstock
US Bancorp Declares SCB & Plans Dividend Hike After 2026 Stress Test
Key Takeaways
Following the release of the Federal Reserve's 2026 stress test, U.S. Bancorp (USB - Free Report) outlined its planned capital actions and reaffirmed its strong capital position. According to the Fed’s stress test results released yesterday, USB is among the 32 U.S. banks that successfully passed the test.
Based on the 2026 stress test results, USB's stress capital buffer (SCB) would have been subject to the regulatory floor of 2.5%. However, as announced by the Fed in February 2026, stress test-related capital buffer requirements will remain unchanged through 2027 while the agency reviews public feedback on its supervisory models. As such, the company's SCB will remain unchanged at 2.6% until Oct. 1, 2027.
Including the Basel III minimum common equity Tier 1 (CET1) capital requirement of 4.5%, USB is also required to maintain a CET1 ratio of at least 7.1%. As of March 31, 2026, the company's CET1 ratio was 10.8%, significantly above the required minimum level. This underlines the capital strength of USB and enables the bank to undertake organic growth initiatives and continue capital payouts.
As part of its planned capital actions, U.S. Bancorp intends to raise its quarterly common stock dividend by 3.8% to 54 cents per share from 52 cents, subject to board approval. The higher dividend is expected to become effective in the third quarter of 2026.
Based on yesterday's closing price of $60.10, its current dividend yield stands at 3.5% compared with the industry's 2.7%. Over the past five years, the company has increased its dividend five times.
Dividend Yield
Image Source: Zacks Investment Research
Apart from dividends, USB continues to return capital through share repurchases. In September 2024, the board authorized a share repurchase program of up to $5 billion of common stock. As of March 31, 2026, nearly $4.1 billion remained available under the authorization.
U.S. Bancorp also maintains a decent liquidity position. As of March 31, 2026, cash and due from banks were $48.4 billion, while short-term borrowings and long-term debt totaled $17.9 billion and $61.4 billion, respectively.
Driven by strong capital levels, earnings strength and solid liquidity, USB is expected to sustain its capital distribution activities and continue enhancing shareholder value. The planned dividend increase and significant remaining share repurchase capacity reflect management's confidence in the company's financial position and long-term growth prospects.
Other Firms Set to Raise Dividends After 2026 Stress Test
Some other participants from the stress test that are enhancing capital distribution plans following the results are Wells Fargo (WFC - Free Report) and Goldman Sachs (GS - Free Report) .
Wells Fargo intends to raise its third-quarter 2026 common stock dividend by 11% to 50 cents per share from 45 cents, subject to board approval. Goldman Sachs plans to increase its quarterly common dividend by 11% to $5 per share from $4.50 beginning July 1, 2026, subject to approval at its scheduled third-quarter board meeting.
USB’s Price Performance and Zacks Rank
Over the past six months, shares of US Bancorp have rallied 9.3% compared with the industry’s growth of 12.5%.
Price Performance
Image Source: Zacks Investment Research
Currently, the company carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.