U.S. Bancorp’s USB fourth-quarter 2024 adjusted earnings per share (excluding the impacts of notable items) of $1.07 beat the Zacks Consensus Estimate of $1.06 per share. However, the bottom line increased 8.1% from the prior-year quarter.

Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.

Results have benefited from lower expenses and higher non-interest income. Also, a rise in net interest income (NII) and strong capital position were tailwinds. However, weak asset quality was concerning.

Net income (GAAP basis) attributable to U.S. Bancorp was $1.66 billion, up 96.3% from the prior-year quarter.

In 2024, adjusted earnings of $3.98 per share surpassed the consensus estimate of $3.91, but it fell from $4.31 in 2023. Net income was $6.6 billion, down 6.2% from the prior-year quarter.

USB’s Q4 Revenues Rise, Expenses Decline

Total revenues in the reported quarter were $6.98 billion, up 3.7% year over year. The top line missed the Zacks Consensus Estimate by 0.6%.

For 2024, total revenues were $27.33 billion, which marginally missed the Zacks Consensus Estimate of $27.37 billion. Also, the top line declined 2.5% year over year.

Tax-equivalent NII totaled $4.18 billion, up 0.8% from the year-ago quarter. The increase primarily resulted from the impacts of higher rates on earning assets and balance sheet growth, partially offset by higher funding costs due to interest rates on deposits, mix and pricing.

The net interest margin of 2.7% contracted 7 basis points year over year.

Non-interest income moved up 8.1% year over year to $2.83 billion. The upside was driven by higher trust and investment management fees and commercial products revenue, partially offset by lower mortgage banking revenues and other revenues.

Non-interest expenses declined 17.4% year over year to $4.31 billion. The fall was due to lower professional services, marketing and business development, and other non-interest expenses, partially offset by higher compensation and employee benefits expenses.

The efficiency ratio was 61.5%, lower than the year-ago quarter’s 75.9%. A decline in the ratio indicates an improvement in profitability.

U.S. Bancorp’s Loans & Deposit Balances Increase

Average total loans increased marginally to $375.7 billion from the previous quarter. Average total deposits increased 0.7% from the previous quarter to $512.3 billion.

USB’s Credit Quality Deteriorates

Total allowance for credit losses was $7.92 billion, up 1.1% year over year. As of Dec. 31, 2024, U.S. Bancorp’s non-performing assets amounted to $1.83 billion, up 22.6% from the year-ago period.

Net charge-offs were $562 million, up from $463 million in the year-ago quarter.

The provision for credit losses in the reported quarter was $560 million, up 9.4% from the prior-year quarter.

U.S. Bancorp’s Capital Ratios Improve

The Tier 1 capital ratio was 12.2% as of Dec. 31, 2024, up from 11.5% in the prior-year quarter. The Common Equity Tier 1 capital ratio under the Basel III standardized approach was 10.6% as of Dec. 31, 2024, up from 9.9% in the year-ago quarter.

The tangible common equity to tangible assets ratio was 5.8%, up from the prior-year quarter’s 5.3%.

Our Take on U.S. Bancorp

USB’s solid business model and diverse revenue streams are likely to keep aiding its financials in the upcoming period. An improving NII looks encouraging. Moving into 2025, USB is well-positioned to deliver solid returns on tangible common equity and positive operating leverage. However, a rise in provision and weakening asset quality are major concerns.

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 #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Dates & Expectations of Bank Stocks

Citizens Financial Group, Inc. CFG is slated to report fourth-quarter 2024 results on Jan. 17. It has a Zacks Rank #3 (Hold) at present.

Over the past seven days, the Zacks Consensus Estimate for CFG’s quarterly earnings per share has been unchanged at 83 cents.

Fifth Third Bancorp FITB is scheduled to release fourth-quarter 2024 earnings on Jan. 21. The company carries a Zacks Rank #3 (Hold) at present.

The consensus estimate for FITB’s quarterly earnings has been unchanged at 87 cents per share over the past seven days.

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