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U.S. Bancorp Q3 Earnings Beat Estimates on Higher NII & Fee Revenue
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Key Takeaways
U.S. Bancorp's Q3 earnings rose 9.8% to $1.34 per share, beating estimates by 1.5% on higher NII and fees.
USB's revenues hit a record $7.97B, driven by 5.6% NII growth and a 13.1% rise in non-interest income.
USB's average loans grew 8% year over year, while credit loss provisions rose 14.5% to $654M.
U.S. Bancorp (USB - Free Report) has reported third-quarter 2026 earnings per share of $1.34, topping the Zacks Consensus Estimate by 1.5%. The bottom line increased 9.8% from $1.22 in the year-ago quarter.
Results were supported by higher net interest income (NII), broad-based fee revenue growth and strong loan growth, while the company posted positive operating leverage of 240 basis points. The BTIG acquisition also contributed to capital markets revenue growth. However, a rise in non-interest expenses and provisions for credit losses were concerning.
Net income attributable to U.S. Bancorp was $2.20 billion, up 10% from the prior-year quarter.
USB Revenue Mix Improves on Higher NII & Fee Growth
Net revenues reached a record level of $7.97 billion in the third quarter, rising 8.7% year over year. However, the metric missed the consensus estimate by 0.5%.
Tax-equivalent NII was $4.49 billion, up 5.6% from the prior-year period. Management attributed the improvement to loan growth, the impact of the small business credit card portfolio purchase and fixed-asset repricing benefits. The net interest margin expanded 9 basis points year over year to 2.84%.
Non-interest income totaled $3.48 billion, rising 13.1% from the year-ago quarter. Growth was driven by higher capital markets revenues, trust and investment management fees, corporate payment and treasury management revenues, and other revenues.
U.S. Bancorp Expenses Rise, Efficiency Strengthens
Non-interest expenses were $4.49 billion, up 7.1% from the year-ago quarter. The impacts of the BTIG acquisition, higher compensation and employee benefits expenses, technology and communications expenses and increased marketing and business development initiatives led to the rise.
The company's efficiency ratio declined to 55.9% from 57.2% a year ago, indicating improvement in profitability.
USB Balance Sheet Expands With Loan & Deposit Growth
Average total loans increased 1% sequentially to $409.55 billion and advanced 8% year over year, reflecting growth in commercial loans, commercial real estate loans and credit card loans. The increase in credit card loans reflected the purchase of a small business credit card portfolio and higher sales volumes.
Average total deposits were $526.60 billion, up 2.2% from the prior quarter and 2.9% year over year. Growth was driven by higher savings and money market account balances, partially offset by lower time deposits.
U.S. Bancorp Credit Trends: Mixed Bag
Provision for credit losses was $654 million, up 14.5% from the year-ago quarter, primarily reflecting the initial provision of $135 million related to the purchase of a small business credit card portfolio. This was partially offset by an improved economic outlook and favorable credit performance.
Total net charge-offs were $523 million, down from $536 million a year earlier, and the net charge-off ratio was 0.51% compared with 0.56% in the prior-year quarter.
The allowance for credit losses increased to $8.17 billion as of Sept. 30, 2026, from $7.90 billion a year earlier. Non-performing assets were $1.32 billion, down from $1.65 billion as of Sept. 30, 2025.
U.S. Bancorp Capital Levels Show Mixed Trends
The Basel III standardized CET1 capital ratio was 10.8% at the quarter end, down from 10.9% in the year-ago period.
The tier 1 capital ratio was 12.3%, down from 12.4% in the prior year. The leverage ratio was 9.0%, up from 8.6% in the year-ago quarter.
The tangible common equity to tangible assets ratio was 6.6%, up from the prior-year quarter’s 6.4%.
Our Take on USB
U.S. Bancorp's diversified revenue streams, solid loan growth and improving credit quality continue to support its financial performance. Growth in NII and non-interest income, coupled with improved efficiency, bodes well for profitability. The BTIG acquisition contributed to capital markets revenue growth and expanded USB's institutional capabilities. Although provisions and expenses rose in the third quarter of 2026, the company's continued focus on its strategic priorities remain positive.
Regions Financial (RF - Free Report) is scheduled to release third-quarter 2026 earnings on Oct. 16.
The consensus estimate for RF’s quarterly earnings has been unchanged at 64 cents per share over the past seven days. This indicates a 6.4% increase from the year-ago reported level.
M&T Bank (MTB - Free Report) is slated to report third-quarter 2026 numbers on Oct. 16.
Over the past week, the Zacks Consensus Estimate for M&T Bank’s quarterly earnings has been revised downward to $4.98 per share, indicating a 2.3% increase from the prior-year quarter’s reported figure.
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U.S. Bancorp Q3 Earnings Beat Estimates on Higher NII & Fee Revenue
Key Takeaways
U.S. Bancorp (USB - Free Report) has reported third-quarter 2026 earnings per share of $1.34, topping the Zacks Consensus Estimate by 1.5%. The bottom line increased 9.8% from $1.22 in the year-ago quarter.
Results were supported by higher net interest income (NII), broad-based fee revenue growth and strong loan growth, while the company posted positive operating leverage of 240 basis points. The BTIG acquisition also contributed to capital markets revenue growth. However, a rise in non-interest expenses and provisions for credit losses were concerning.
Net income attributable to U.S. Bancorp was $2.20 billion, up 10% from the prior-year quarter.
USB Revenue Mix Improves on Higher NII & Fee Growth
Net revenues reached a record level of $7.97 billion in the third quarter, rising 8.7% year over year. However, the metric missed the consensus estimate by 0.5%.
Tax-equivalent NII was $4.49 billion, up 5.6% from the prior-year period. Management attributed the improvement to loan growth, the impact of the small business credit card portfolio purchase and fixed-asset repricing benefits. The net interest margin expanded 9 basis points year over year to 2.84%.
Non-interest income totaled $3.48 billion, rising 13.1% from the year-ago quarter. Growth was driven by higher capital markets revenues, trust and investment management fees, corporate payment and treasury management revenues, and other revenues.
U.S. Bancorp Expenses Rise, Efficiency Strengthens
Non-interest expenses were $4.49 billion, up 7.1% from the year-ago quarter. The impacts of the BTIG acquisition, higher compensation and employee benefits expenses, technology and communications expenses and increased marketing and business development initiatives led to the rise.
The company's efficiency ratio declined to 55.9% from 57.2% a year ago, indicating improvement in profitability.
USB Balance Sheet Expands With Loan & Deposit Growth
Average total loans increased 1% sequentially to $409.55 billion and advanced 8% year over year, reflecting growth in commercial loans, commercial real estate loans and credit card loans. The increase in credit card loans reflected the purchase of a small business credit card portfolio and higher sales volumes.
Average total deposits were $526.60 billion, up 2.2% from the prior quarter and 2.9% year over year. Growth was driven by higher savings and money market account balances, partially offset by lower time deposits.
U.S. Bancorp Credit Trends: Mixed Bag
Provision for credit losses was $654 million, up 14.5% from the year-ago quarter, primarily reflecting the initial provision of $135 million related to the purchase of a small business credit card portfolio. This was partially offset by an improved economic outlook and favorable credit performance.
Total net charge-offs were $523 million, down from $536 million a year earlier, and the net charge-off ratio was 0.51% compared with 0.56% in the prior-year quarter.
The allowance for credit losses increased to $8.17 billion as of Sept. 30, 2026, from $7.90 billion a year earlier. Non-performing assets were $1.32 billion, down from $1.65 billion as of Sept. 30, 2025.
U.S. Bancorp Capital Levels Show Mixed Trends
The Basel III standardized CET1 capital ratio was 10.8% at the quarter end, down from 10.9% in the year-ago period.
The tier 1 capital ratio was 12.3%, down from 12.4% in the prior year. The leverage ratio was 9.0%, up from 8.6% in the year-ago quarter.
The tangible common equity to tangible assets ratio was 6.6%, up from the prior-year quarter’s 6.4%.
Our Take on USB
U.S. Bancorp's diversified revenue streams, solid loan growth and improving credit quality continue to support its financial performance. Growth in NII and non-interest income, coupled with improved efficiency, bodes well for profitability. The BTIG acquisition contributed to capital markets revenue growth and expanded USB's institutional capabilities. Although provisions and expenses rose in the third quarter of 2026, the company's continued focus on its strategic priorities remain positive.
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 Other Stocks
Regions Financial (RF - Free Report) is scheduled to release third-quarter 2026 earnings on Oct. 16.
The consensus estimate for RF’s quarterly earnings has been unchanged at 64 cents per share over the past seven days. This indicates a 6.4% increase from the year-ago reported level.
M&T Bank (MTB - Free Report) is slated to report third-quarter 2026 numbers on Oct. 16.
Over the past week, the Zacks Consensus Estimate for M&T Bank’s quarterly earnings has been revised downward to $4.98 per share, indicating a 2.3% increase from the prior-year quarter’s reported figure.