U.S. Bancorp (USB) stock experienced a pre-market plunge of 6.13% on Thursday, January 16, 2025, following the bank's fourth-quarter earnings report and muted guidance for net interest income (NII) in the first quarter of 2025.
In its Q4 2024 earnings release, U.S. Bancorp reported adjusted earnings per share of $1.07, narrowly beating analyst estimates of $1.05. However, the bank's revenue of $6.98 billion slightly missed expectations. While profitability metrics such as return on tangible common equity (18.3%) and return on average assets (1.03%) remained strong, the market's reaction was driven by U.S. Bancorp's NII outlook.
U.S. Bancorp predicted that its NII would be "relatively stable" in the first quarter of 2025, amid expectations of sluggish loan growth and heightened competition for deposits as interest rates decline. This outlook, coupled with PNC Financial Services Group's projection of a 2% to 3% sequential decline in NII, raised concerns among investors about the potential impact on regional banks' earnings in the coming months.
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