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"Founded in 1863, U.S. Bancorp is a comprehensive financial services holding company operating in the United States. The company’s operations are divided into several key segments: wealth, corporate, commercial and institutional banking, consumer and business banking, payment services, and treasury and corporate support. 
U.S. Bancorp offers depository services including checking accounts, savings accounts, and time certificate contracts; as well as lending services including traditional credit products, credit card services, lease financing, import/export trade, asset-backed lending, and agricultural finance. U.S. Bancorp’s corporate and institutional services include capital markets, treasury management, and receivable lockbox collection services. In addition, the company offers asset management and fiduciary services for individuals, estates, foundations, business corporations, and charitable organizations. 
The company extends its portfolio with investment and insurance products, primarily within its domestic markets. It also provides fund administration services to mutual and other funds. Corporate and purchasing card services, as well as corporate trust services, are part of U.S. Bancorp’s extensive offerings."

Q2 2026

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Q4 2025

Q3 2025

Q2 2025

Q1 2025

Q4 2024

U.S. Bancorp (USB): Company Profile, Stock Price, News, Rankings

legacy

U.S. Bancorp

u.s. bancorp

Welcome to the U. S. Bancorp Second Quarter twenty twenty five Earnings Conference Call. Following a review of the results, there will be a formal question and answer session. This call will be recorded and available for replay beginning today at approximately ten a.

M. Central Time. I will now turn the conference over to George Anderson, Director of Investor Relations for U. S. Bancorp.

Thank you, JL, and good morning, everyone. Today, I'm joined by our President and Chief Executive Officer, Gunjan Kedia and Vice Chair and CFO, John Stern. In a minute, Gunjan and John will be referencing a slide presentation together with their prepared remarks. A copy of the presentation, our press release and all supplemental analyst schedules can be found on our website at ir.usbank.com. Please note that any forward looking statements made during today's call are subject to risk and uncertainty.

Factors that could materially change our current forward looking assumptions are described on Page two of today's earnings presentation, our press release and in reports on file with the SEC. Following our prepared remarks, and John will take any questions that you have. I will now turn the call over to Gunjan.

Thank you, George, and good morning, everyone. If I could please turn your attention to slide three. In the second quarter, we reported earnings per share of 1.11 on net income of $1.8 Core growth across our diversified fee income businesses and continued expense discipline more than offset a lighter spread income. We delivered strong year over year EPS growth as adjusted of approximately 13%. Total fee revenue growth of 4.6% year over year reflected broad based strength across our businesses and ongoing focus on execution and organic growth.

John will discuss how we are navigating the current higher for longer interest rate environment and taking action to strategically position our balance sheet for near term margin expansion. Notably, on an adjusted basis, we delivered two fifty basis points of year over year positive operating leverage, the fourth consecutive quarter of revenue growth outpacing expense growth. We generated an 18% return on tangible common equity, a return on average assets of 1.08% and improved to a high 50s efficiency ratio. Asset quality trends and credit metrics remain stable and capital levels came in well above regulatory capital minimums. Turning to Slide four, we provide a high level view of U.

S. Bancorp today. A few things to highlight for this quarter. Fee income now represents approximately 42% of total net revenue. We saw good sequential growth in total purchase volumes within payment services and a Fortune five hundred ranking improved from a year ago.

Slide five provides an update on expense stabilization. This is one of our three major priorities. On the left, you will see that we have successfully delivered now seven consecutive quarters of stable expenses on an adjusted basis. We are driving meaningful productivity while also self funding our investments in the franchise. For example, increases in payments and technology expenses were offset by reductions in personnel and occupancy costs.

On the right, we have highlighted a few of the digital investments we have made over the last five years to create modern, secure and scalable platforms. We are now harvesting these investments to drive long term productivity and sustainable positive operating leverage. Slide six profiles of businesses and the strategies we are deploying to drive organic growth, our second major priority. The businesses highlighted in light blue represent areas where we are pursuing new strategies or transformative approaches. In our capital markets business, we are focused on introducing new product capabilities that leverage our existing balance sheet such as ABS bonds, commodity hedging and repo.

The structured lending capabilities we are building are also delivering attractive growth in our C and I loans. In our payments business, which is our third key priority, consumer spend remains resilient, especially in the non discretionary spend where we are slightly overweight. Corporate and government spend was muted this quarter reflecting cushion around economic uncertainty. Merchant payment services revenue, which is less than 7% of total firm wide revenue grew 4.4% year over year, supported by our tech led strategy and strong focus on five strategic verticals. The businesses highlighted in dark blue are areas where we expect continued growth through a sharper and more urgent execution focus.

Finally, the mortgage auto and commercial real estate business portfolios highlighted on the slide in gray are core to our long term growth strategies and are well positioned to grow when macro pressures ease. On Slide seven, we provide a snap snapshot of how our fee mix has evolved over the last ten years in a positive way. While fee revenue as a percentage of total revenue was slightly higher a decade ago at about 45%, our revenue was skewed towards consumer fees, which have elevated exposure to market volatility and regulatory pressure. These dynamics contributed to fee income as a percentage of total revenue falling to 38% in 2023. We have been quite intentional in our strategy to invest in growing our trust and investment, wealth and capital market advisory services.

And today, institutional wealth and payments businesses collectively represent more than 75% of fee revenue. These are stable and profitable fees with underlying positive macro growth drivers, which support our sustainable revenue growth objectives. Turning to Slide eight. We are approaching the evolution of our balance sheet in an equally deliberate manner. At quarter end, C and I and credit card portfolios represented 47% of the balance sheet.

This is up from 43% at the end of twenty twenty three. This quarter, these average loans grew 6.6% year over year, vastly outpacing total loan growth. These portfolios also support a higher percentage of multi service clients at 51% and we are prioritizing growth in these segments. To further optimize the balance sheet, we divested approximately $6,000,000,000 in mortgage and auto loans this quarter, taking advantage of a favorable rate environment for these asset sales to strategically reposition the balance sheet both for stronger growth and in support of deeper client relationships. Let me now turn the call over to John who will provide more details on the quarter and forward looking guidance.

Thanks Gunjan, and good morning everyone. This is a good quarter for us as we made meaningful progress towards achieving our medium term financial targets and work to position ourselves for future growth. If you turn to Slide nine, I'll start with some highlights followed by a discussion of second quarter earnings trends. We reported earnings per share of $1.11 and generated $7,000,000,000 of net revenue on flat expenses. Ending assets of $686,000,000,000 were impacted by seasonally elevated quarter end deposit flows.

Credit quality metrics remained stable. A modest reserve release of $53,000,000 this quarter was largely reflective of favorable loan portfolio sales we executed to reposition the balance sheet. As of June 30, our CET1 capital level was 10.7%. Slide 10 provides key performance metrics. As the slide shows, we are making steady progress on our medium term profitability and efficiency targets.

Linked quarter, we delivered an improved return on average assets of 1.08% and saw our efficiency ratio fall to 59.2%. While net interest margin declined six basis points sequentially, approximately half of the decline was temporary in nature and will not carry into the third quarter. This decline was driven by strategic loan portfolio sales as well as high residential mortgage paydown activity in April. The remaining impact was driven by elevated deposit pricing pressures and rotation into higher rate products. Importantly, we remain focused on action and initiatives to strengthen net interest income and those efforts are fully reflected in our guidance.

Slide 11 provides a balance sheet summary. Total average deposits decreased 0.7% linked quarter to $5.00 $3,000,000,000 in line with seasonal tax payment outflows and our emphasis on relationship based deposits. Balance sheet management supported a funding mix that prioritized both non interest bearing and low cost consumer deposits. Average consumer deposit balances increased $2,400,000,000 or 1.1% linked quarter, while the percentage of non interest bearing to total deposits remained stable at approximately 16% and the deposit beta was 42%. Average loans totaled $379,000,000,000 a decrease of 0.1% on a linked quarter basis.

Balances were impacted by the sale of approximately $4,500,000,000 of residential mortgages and approximately $1,000,000,000 of auto loans. Excluding these sales, average loan growth was approximately 0.4% sequentially and 1.6% year over year. Notably, we strategically grew our C and I and credit card average loan portfolios 7.14.4% respectively on a year over year basis. At June 30, the ending balance on our investment securities portfolio was $174,000,000,000 an increase of $3,000,000,000 from the prior quarter end. Fixed asset repricing and reinvestment of proceeds from our residential mortgage sale into investment securities resulted in an eight basis point increase to the average investment portfolio yield.

Consistent with efforts to reposition the balance sheet, we opportunistically restructured approximately $1,250,000,000 of investment securities this quarter resulting in a $57,000,000 loss. The payback period on this transaction was less than two years and enhanced our net interest income trajectory. Turning to slide 12. Net interest income on a fully taxable equivalent basis totaled $4,080,000,000 Linked quarter, the competitive deposit environment more than offset the benefits of fixed asset repricing. Slide 13 highlights trends in noninterest income.

Total noninterest income totaled 2,900,000,000 reflecting security losses of $57,000,000 from the repositioning of the securities portfolio. Excluding security losses, total fee revenue of approximately $3,000,000,000 increased 4.6% year over year. This was driven by core growth and new business momentum across payments, trust and investment management and other fee revenue. Turning to slide 14, non interest expense was $4,180,000,000 as we prudently managed expenses and further captured operational efficiencies across the business. Slide 15 highlights our credit quality performance.

The ratio of non performing assets to loans and other real estate was 0.44% at June 30, an improvement of one basis point linked quarter and five basis points better than a year ago. The second quarter net charge off ratio of 0.59% and allowance for credit losses of 7,900,000,000 or 2.07% of period end loans remained stable sequentially. Turning to Slide 16. As of June 30, our CET1 capital ratio was 10.7%, a two basis point decline linked quarter. Given strong capital levels and earnings accretion, we elected not to replenish a maturing credit risk transfer, keeping our CET1 capital ratio flat sequentially.

Results of this year's stress test, which revised our preliminary stress capital buffer to 2.6%, further demonstrated the company's ability to withstand a severe economic downturn, which is a testament to the strength, quality and diversity of our balance sheet and prudent approach to risk management. Importantly, our CET1 capital ratio, including AOCI, improved to 8.9%. At the top of slide 17, we show a comparison of second quarter results to our earlier guidance. As expected, slightly lower net interest income was more than offset by better than expected fee income of approximately $3,000,000,000 and prudent expense management. I'll now provide forward looking guidance for the third quarter and full year 2025.

Starting with the third quarter twenty twenty five guidance, We expect net interest income for the third quarter on a fully taxable equivalent basis to be in the range of 4,100,000,000.0 to $4,200,000,000 Total fee revenue is expected to be approximately $3,000,000,000 This compares to the second quarter total fee revenue of $2,980,000,000 Total non interest expense is expected to be $4,200,000,000 or lower in the third quarter. We expect to deliver positive operating leverage of 200 basis points or more on an adjusted basis. I'll now provide full year 2025 guidance which is consistent with our previous guidance. Compared to full year 2024, we expect total net revenue growth on an adjusted basis at the lower end of our 3% to 5% range. Our guidance assumes two rate cuts in 2025.

For the full year, we expect to deliver positive operating leverage of 200 basis points or more on an adjusted basis. Turning to slide 18. We continue to make measurable progress towards achieving our medium term targets. As you can see on this slide, year over year we have improved both our return on average assets and efficiency ratio while delivering high teens return on tangible common equity and mid single digit fee growth. Let me now hand it back to Gunjan for closing remarks.

Thank you, John. And let me close on slide 19. Second quarter results were supported by a unique mix of diversified businesses that delivered strong sequential and year over year EPS growth this quarter. The resiliency of our business model offset some rate driven softness in spread income with good growth in fees and continued expense discipline. Notably, we executed on our key expense initiatives and delivered meaningful positive operating leverage for the fourth consecutive quarter.

We are intentionally evolving our business mix to be more fee intensive and attractive to greater diversification, while also shifting the balance sheet to support a higher percentage of multi service clients and improved spread revenue. As we head into the back half of the year, we are well positioned and executing with urgency on our three key priorities: expense discipline, organic growth and transformation of our payments business. Efforts this quarter supported meaningful progress towards our medium term financial targets and ability to deliver sustainable EPS growth. I'm often reminded that the true strength of this company is driven by the day to day actions and choices of our talented teams. So on behalf of all my U.

S. Bank colleagues, I would like to thank our clients and our shareholders for their loyalty and support of our exceptional company. With that, we will now open the call for your questions.

Thank you. Your first question comes from the line of Scott Siefers of Piper Sandler. Your line is open.

Morning, everyone. Thank you for taking the question. John, I was hoping to start out on some NII dynamics. Maybe if you could spend a moment discussing where the margin goes from here off the 2.66% base. I think you mentioned part of the linked quarter decline was sort of transitory based on the actions you took in the second quarter.

So what do you see as the best launching point? And kind of what would it take to move it higher or lower from here? In other words, the main puts and takes. And I guess the final piece of it is maybe where we stand on the 3% medium term margin aspiration?

Sure. Thank you, Scott, and good morning. First of all, yes, you're right on the net interest margin, we had three basis points of the six was really attributed to transitory things related to the sale that mentioned kind of a grossing up of balance sheet. So we expect that to reverse. I also expect sequential net interest income growth here in the third and fourth quarters as we move forward.

We have a lot of positive momentum on the asset side driven by a lot of strategic actions that we mentioned throughout our remarks. We do have fixed asset repricing that will accelerate and be better than the first half of the year. We do the strategic actions we took in terms of the loan sales as well as the investment portfolio repositioning is going to help in net interest income trajectory for the next several quarters. And then loan growth, we feel the pipelines are strong on C and I and card. We've been growing C and I at a 7% year over year clip, card at 4% to 5% year over year clip and CRE is starting to turn the tide there in terms of not being as much of a drag in terms of growth.

And in terms of deposits, we're being active in remixing our deposit mix. We are intentionally we moved out of some high cost corporate and single serve client and we had moved into more of our consumer deposit base with our highlighted with our bank smartly products. So we feel very good about the trajectory of all these moves. And so that's going to help us both on the net interest income and margin side of things go forward. And I would just say in terms of our 3% there's no change.

Obviously, know the margin dip this quarter but it's never linear and we have those drivers that I just mentioned that are going to help us see through that 3% over the medium term.

And Scott, let me add one other point. Even on deposit mix, on our institutional side, you will observe very healthy growth in treasury management fees and our corporate trust fees. These are processing business that bring operational deposits that are also favorable to our mix. So that is also that focus will also help our NIM trajectory.

Perfect. Okay, good. Thank you for that color. And then maybe as the follow-up, John, when you talk about Organsen, when you talk about expenses being I think $4,200,000,000 or lower in the third quarter, maybe just a second on where that flex could come from if necessary. And more kind of more broadly, I guess one of the concerns I hear from investors is that cutting costs to meet the operating leverage targets might just be preventing some necessary investments.

Can you just sort of address that? I'm certain you all don't feel that way, but maybe if you could spend a moment addressing it,

Sure. We certainly don't feel that way. We feel all the initiatives and investments we've made, we are harvesting that for all these sorts of things. And as Gunjan mentioned in her comments, we are self funding in a number of the initiatives that we have. And so we feel very good about the levers that we had.

It's coming from things like the real estate that's going to be a continual driver. The combining of certain areas have found us efficiencies within our operations and other sorts of technology like groups. The productivity changes we've made and platform enhancements we've made. AI is certainly a buzzword, but there are things that we are deploying that is being helpful and will continue to be helpful going forward. There's just a lot of efficiencies and things that we are executing on the expense side that's been helpful to us.

And we have continued our investment. We continued our investment in terms of our tech spend, in terms of our investments in the business that has not changed and we feel really good about these things being pointed at our strategic objectives where we want to grow.

And I'll just add Scott, you've covered our company for a long time and you've seen us operate very effectively at efficiency ratio much different from where we are today. It's a very streamlined simple business mix. We are quite big in the businesses we are in. So our conviction that we can operate the company and invest in the future growth at a slightly lower efficiency ratio is very real. And in addition to the digital investments that John talked about, I do want to say that the real productivity that is coming from having spent more than five billion dollars in digital investments over the last five years is very real.

And you will observe certain line items over time increase like technology, sales and marketing expenses, investments in our payments businesses because those are our strategic areas and the real productive will be in some other categories. So we very much take the question that the productivity is not coming out of under investing in future growth.

Your next question comes from the line of Steven Alexopoulos of TD Cowen. Your line is open.

I wanted to start so Gunjan for you a bigger picture question if you will. So if we look at the guidance you provided to the market, hold expenses flattish, deliver positive operating leverage 200 basis points or better, that's been the guide. You look at this quarter, you basically did that, right, two fifty bps POL, maintain the outlook. Despite that, the stock, we'll see where it goes, is down 4% right now premarket. When you think of the financial targets, right, the desire to create shareholder value, is 200 basis points enough of an objective to get the stock working?

And do you need to do more on the revenue side, right, to start moving the POL needle?

It's a very thoughtful question. Thank you. 200 basis points of positive operating leverage is very healthy in the long term. The opportunity is in revenue growth. If you look at our portfolio and we really try to disaggregate some of our business lines, so you can see the underlying strength of how we have evolved the portfolio.

The opportunities are for growth are very, very real. And that's where you will see us sort of flex the EPS growth. The expense side was an important area of focus for us just to get the positive operating leverage in place. And I look back and reflect also on why the stock reaction. And it's less about the targets not being appropriate, but whether there is enough sustainability and consistency of delivery against it, which is why we report out sort of how we are progressing towards our medium term target.

We are very confident that as the confidence grows in our ability to march towards our medium term targets in a consistent fashion, the stock would react to that.

Okay. That's fair. Maybe for John, even though loan growth was negatively impacted by the mortgage sales, you guys did a very solid underlying C and I growth. And I guess this goes to Scotty's question a minute ago. But if we look at your funding, right, assuming C and I loan growth continues to be strong, which is what we saw out of P and C yesterday, M and T, same thing.

Talk about what is going to change from what happened this quarter where you saw a migration to higher cost deposit products. How can you fund that with lower cost deposits and drive NIM expansion say at the back half of this year? Thanks.

Great. Yes, question. Stephen, I think the your observation is correct and we do expect as I've mentioned the previous question growth in C and I and card and things like that that are going to position us for higher growth on the asset side coupled with all the other things that I said. So there's certainly the asset side we feel good about. On the deposit side, yes, we saw an increase of cost in that.

But I think what we're leaning in is on the consumer side, which is appropriate because what we're doing is we're looking at things like our BankSmartly product which is a fantastic product for us. It's a product where clients set up both a card and a checking and or savings account. And we have seen through this a over 50% of the people that use this product is new to bank. We see that the multi service client statistics on the Sider product are 3x what we would normally have on the retail side. And our acquisition cost is a lot lower, nearly a third of the cost we can take out in terms of acquisition with this product value proposition that we give to the clients.

And so over time what we are seeing is an improvement in our deposit portfolio and improved flexibility of our ability to price as we move forward. And that's really going to be the drivers of how we will manage over the long term our funding costs.

Got it. And John, I'm newer to your story. Why didn't that help this quarter, the Smartly product? Like why is it going to help next quarter but didn't help this quarter?

There was the deposits side was all it was in the commercial and retail side. So I'm not going to say it's just all retail. This is a deposit story. But what I'm referring to is I think about the go forward deposit portfolio position, it's really about our flexibility and to move pricing as we think about the different deposit levers that we have whether it's CD or the savings rate as the Fed moves rates and things like that. We have more ability than we would have otherwise in our retail book as a result of this.

And then on the commercial side, we have a high beta already a high beta type of product. So when the Fed does move, we can cut those rates or move those rates appropriately.

Your next question comes from the line of Betsy Graseck of Morgan Stanley. Your line is open.

Hi, morning. Couple One of follow ups is on the C and I book. And can you give us some color on the driver of that acceleration in growth and where we stand now with line utilizations, Q2? That would be helpful.

Yes. Betsy, was the growth really in C and I was everywhere. It was very good to see I could give you the laundry list, but the highlights would be the utilization rate did tick up a little bit, it's about thirty, forty basis points and it's a continuation of what the trends that we saw last quarter. We saw strength in our ABS lending portfolios. We saw strength in small business led by healthcare and things of that variety, SBA as well.

Our expansion markets, middle market that we've been growing in various areas have been providing us nice growth year on year. And so there's just been a lot of good growth and we have a lot of momentum and the pipelines are strong.

And Betsy, let me add just one other thing to your question. For the last few years, we've been very intentional with also introducing new product capabilities, more structured credit capabilities, just reflecting a more sophisticated client base and their needs. So you're seeing the impact in these recent quarters of the groundwork that was laid over the last few years. Similarly with Go credit cards

So that's advancing the private credit side of the business. Is that partly what's going on with the structured credit?

Helping as well. But it's broader than that.

Okay. And then just a ticky tacky question, but were there any gains or losses on the asset sales you did?

No. There's nothing meaningful other than the reserve release that you saw this quarter.

Your next question comes from the line of Michael Mayo of Wells Fargo. Your line is open.

Hey, I think these are for you, John. Just still on the NIM, did you say there was deposit competition that was one of the drags on the NIM? And also, I think I see RWA up $9,000,000,000 in a quarter when loans were flat and didn't quite understand why that happened. Thanks.

Sure. Let me go to your second question first on the RWA. Yes, 9,000,000,000 up. I commented, and just to reiterate we had a couple of things happen. One, we elected to have some of the credit risk transfers that we've done in the past to roll off that was about half and the other half was commercial loan growth that we saw at the end of the quarter.

We saw strengthening which is why we're commenting on C and I growth and saying that the pipelines are strong. There's a lot of activity. We felt like confidence improved throughout the quarter. So that's those are the underlying drivers for the RWA component. On the net interest margin side of the equation, I would say the deposit market is competitive.

It has been for some time. I don't think anything is unique about this quarter versus others. Obviously, there was the market turmoil that started at the beginning of the quarter, but very quickly people bounced. The clients have been very much resilient and we feel like the pricing is appropriate and rational.

All right. Now just because we hear from some others that yield seeking behavior has really died down quite a bit. But pulling the lens out just on asset liability management generally, I get you're not running the firm just for the NIM or NII, you're running it for revenues and value creation over time. I get it. But is there anything that you need to change holistically with asset liability management or that you've done over the past year that may show some results?

I guess I'm just looking back a couple of years and you guys were caught with the unrealized securities losses and that was an issue and now here it's NIM falling short and it's deposits and it just seems a little bit not in sync with the industry. Maybe as you said, it's going to pick up the next couple of quarters and this thing will be in the past. But just any general thoughts about the process of AOM at USC?

I think I acknowledge your comments Mike. But I think that what we're doing is a lot of the actions that we're taking right now are about positioning for the future. Some of the sales that we talked about the positioning on the securities book and everything like that. These are active actions that we're taking to move ourselves forward to get our we had some charts there about where we want to take the balance sheet and how that has grown into more support multi service clients and things of that variety. We have the ALM processes in terms of managing interest rate risk and things of that variety. So we feel very good about those capabilities.

I'd just also add Mike that we are strategically evolving both sides of the balance sheet to support a higher NII trajectory. So we have a very big mortgage book. It grew a lot during the post COVID era and that's why the focus on credit cards and commercial C and I loans, which have a better yield characteristic. On the deposit side, we are in addition to the consumer deposit focus, you see we are defending those and defending market share there. We're also really growing out the treasury management and the corporate trust franchise so that the institutional deposit profile is very good.

So there's a lot of strategic efforts to create a faster NII trajectory.

And just lastly, the 3% NIM, is that something that could be seen in a year, two years, five years, any sense?

Well, for all the drivers that we talked about, we continue to expect that to be in the medium term. I would say that we have about four cuts over the cycle remaining within that assumption. More cuts are more helpful. Fewer cuts make it a little bit more of a slower pace. So those are kind of puts and takes to how we think about it.

Otherwise, the initiatives that we're talking about here are positioning ourselves for that net interest income trajectory going forward.

Your next question comes from the line of John Pancari of Evercore ISI. Your line is open.

Just on the balance sheet trends, I appreciate the loan growth color you gave and some of the deposit dynamics. In terms of the growth outlook from here, is it I know previously you had pretty much described it as modest growth on both fronts, I believe, on loan growth and deposits. Can you maybe just update us how you're thinking about it now, particularly since you're seeing some acceleration in the underlying trends within commercial and you're seeing some growth in card. How are you thinking about that now? Thanks.

Yes. Thanks, John. I think certainly when we started the year, as we were thinking about the budgeting, we looked out and assumed a modest pace of loan growth that more or less has transpired. But what we're saying and seeing is that there's been acceleration of and focused strategic focus on C and I and card for us which you are seeing play out in terms of our 7% C and I year over year growth and we continue to see that and expect that to continue. The card growth, we continue to expect to see that as well.

We're as I sit here today, we're better positioned on the loan growth side or we see better growth opportunities than we did at the beginning of the year.

Okay. All right. Thanks. And then in terms of your revision to the 3% to 5% revenue guide, I know you cited the lower end now. How much of that decision to revise that was coming from the NII headwinds?

And I guess also put the other way, what are you seeing in terms of your growth expectation as you look at the trends in payments and fees? Are you comfortable still at the mid single digit growth level for overall fees and within the payments businesses as well?

Sure, absolutely. Yes, let me start. So total revenue obviously is the two parts and I'll start on the fee side. We feel very good about the momentum that we're building. Gunjan highlighted a number of those items on her comments.

On the institutional businesses side, trust and fund services, we continue to gain market share, market activity, so that's going well. Treasury management, Gunjin highlighted with our newer capabilities. Merchant processing, we feel very good. They've had a couple of quarters now of increased year over year growth. We continue to or we expect to see that to continue to improve given the strategies that we're putting in place there.

Our tax credit activities within the other revenue have been growing very nicely for us this year. And I would expect our other revenue to be north of $150,000,000 for the remainder of the year. And so all these things are really that plus the things in capital markets and other areas, we feel very good about our fee trajectory going forward and that's embedded in the guide that we provided to you. On the net interest income side, think, sure, it's been a little slower than at the beginning of the year, but we think that there is acceleration that it can grow because of the things that we talked about. It's embedded in our guide for the third quarter.

And I'm not going to repeat all those things again, but that's the essence of it and why we feel like we'll be at the lower end of the range.

Right. And then thanks for that John. The back to the fees and payments, so still comfortable with the mid single digit range?

U.S. Bancorp (USB) Q2 2025 Earnings Call Transcript

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