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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

Q1 2026

Q4 2025

Q3 2025

Q2 2025

Q1 2025

Q4 2024

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

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U.S. Bancorp

u.s. bancorp

Welcome to the U. S. Bancorp 4th Quarter 2024 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 11 am Central Time.

I will now turn the conference over to George Anderson, Senior Vice President and Director of Investor Relations for U. S. Bancorp. Please go ahead.

Thank you, Audra, and good morning, everyone. Today, I'm joined by our Chairman and CEO, Andy Cecere President, Gunjan Kedija Vice Chair and CAO, Terry Dolan and Senior Executive Vice President and CFO, John Stern. In a moment, Andy and John will be referencing a slide presentation together with their prepared remarks. A copy of the presentation, our press release and all supplemental consolidated 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 2 of today's earnings release, press presentation, our press release and in reports on file with the SEC. Following our prepared remarks this morning, we will be happy to take any questions that you have. I will now turn the call over to Andy.

Thanks, George. Good morning, everyone, and thank you for joining our call. I'll begin on Slide 3. In the Q4, we reported $1.01 per diluted share or $1.07 after adjusting for notable items. John will discuss these one time charges in his prepared remarks.

Net revenue totaled $7,000,000,000 for the quarter $27,500,000,000 for the year, as we saw both sequential and year over year quarterly growth in net interest income and non interest income, driven by effective balance sheet management, earning asset repricing and mix and our highly diversified fee business offerings. Overall, the quarter was highlighted by top line revenue growth and continued expense discipline, which resulted in 190 basis points of positive operating leverage on an adjusted basis year over year. Turning to Slide 4. We had slight balance sheet growth this quarter with average earning assets increasing 1.2% driven by higher on balance sheet liquidity. This quarter, we had modest loan loss reserve release largely reflective of improved credit quality and a more favorable portfolio mix.

On the bottom right of the slide, you can see that our CET1 capital ratio increased 10 basis points from the prior quarter to 10.6%. Our tangible book value per share totaled $24.63 at December 31, an increase of 10.4% compared to the end of last year. During the quarter, we effectively balanced continued capital accretion with an initial $100,000,000 of share repurchases. Slide 5 provides key performance metrics. On an adjusted basis, we delivered an 18.3% return on tangible common equity and an improved efficiency ratio of 59.9 percent in the 4th quarter.

Turning to Slide 6, fee income represented over 40% of total net revenue in the 4th quarter. Results this quarter were driven by double digit year over year fee growth in commercial products, trust and investment management and investment product revenues. Slide 7 highlights a few of our key selected initiatives on interconnectedness across the franchise. Let me now turn over the call to John, who will provide more detail on the quarter as well as forward looking guidance.

Thanks, Andy. If you turn to Slide 8, I'll start with a more detailed earnings summary followed by a discussion of 4th quarter earnings trends. In the Q4, we reported earnings per diluted common share of $1.01 which included $109,000,000 of notable expense items or $82,000,000 net of tax. Notable items for the quarter included $60,000,000 related to operational efficiency initiatives and $49,000,000 from lease impairments associated with strategic real estate restructuring actions. After adjusting for these notable items, we delivered diluted earnings per common share of $1.07 this quarter.

Slide 9 provides a balance sheet summary. Total average deposits increased 0.7 percent on a linked quarter basis to $512,000,000,000 as we continue to prioritize relationship based deposits and maintained our pricing discipline. While total non interest bearing deposits increased slightly this quarter, this was largely driven by institutional deposit seasonality at the end of the quarter. Importantly, after accounting for this seasonality, our percentage of non interest bearing deposits to total deposits now looks to have stabilized in line with our earlier expectations. Average loans totaled $376,000,000,000 a modest increase of 0.4% on a linked quarter basis, driven by commercial lending initiatives, slower pay downs and new originations in residential mortgages, as well as higher seasonal credit card spend.

At December 31st, the ending balance on our investment portfolio increased slightly to $171,000,000,000 from opportunistic repurchases of securities. This quarter, we saw a slight decline in the average yield across both our investment portfolio and loan book as the impact of variable rates more than offset the benefits of fixed asset repricing. Turning to slide 10. Net interest income on a fully taxable equivalent basis totaled $4,180,000,000 which was stable to the 3rd quarter. For the year, total net interest income on a fully taxable equivalent basis was slightly better than our earlier guidance of $16,400,000,000 Slide 11 highlights trends in non interest income.

Linked quarter, we saw non interest income growth in the Trust and Investment Management and other revenue that was partially offset by lower mortgage banking and seasonally lower payments revenue. Importantly, excluding security losses, full year non interest income increased 3.9% compared to 2023, consistent with our 2024 guidance as we benefited from continued growth across our diversified and differentiated business mix. Turning to slide 12, non interest expense for the quarter totaled $4,200,000,000 as adjusted. For the year, total non interest expense was $16,790,000,000 as adjusted, which was just below or better than our full year guidance of $16,800,000,000 We remain focused on prudent expense management continue to benefit from operational efficiencies across the company. Slide 13 highlights our credit quality performance.

Asset quality metrics this quarter were in line with expectations and reflected ongoing macroeconomic stability. Our ratio of non performing assets to loans and other real estate was 0.48 percent at December 31, compared with 0.49% at September 30 and 0.40 percent a year ago. The 4th quarter net charge off ratio of 0.60 percent was flat to the 3rd quarter as expected and our allowance for credit losses totaled $7,900,000,000 or 2.09 percent of period end loans at December 31. Turning to slide 14. Our CET1 capital ratio of 10.6 percent as of December 31 increased 10 basis points net of distributions, which included an initial $100,000,000 of share buybacks this quarter.

Moving forward, we expect the level and pace of buybacks to remain modest in the near term as we balance continued capital accretion with distributions. I will now provide Q1 and full year 2025 forward looking guidance on slide 15. Starting with the Q1 2025 guidance. Net interest income is expected to be relatively stable to the Q4 of 2024, excluding the impact of fewer days. As a reminder, the Q1 has 2 fewer days than the 4th quarter.

Total non interest expense is expected to be relatively stable to the 4th quarter level of approximately $4,200,000,000 as adjusted. We expect to deliver positive operating leverage in the Q1 of 200 basis points or more on a year over year basis. I'll now provide full year 2025 guidance. Total revenue growth on an adjusted basis is estimated to be in the range of 3% to 5% compared to the full year 2024. We expect to achieve positive operating leverage excluding the impact of security gains or losses of greater than 200 basis points for the full year.

I'll now hand it back over to Andy for closing remarks.

Thanks, John. 2024 was a pivotal year for the company in many ways and it marked a very important inflection point in our story. Going into the year, there was much uncertainty with respect to the broader macroeconomic environment, persistent inflation, significant rate volatility, political and regulatory headwinds to name a few. But we effectively managed through the changes and most importantly executed on our strategic objectives. 4th quarter results showcase our commitment to execution, which was highlighted by our delivery of 190 basis points of positive operating leverage.

As credit quality continued to stabilize and we prudently manage our capital position, it was effective balance sheet management, our financial discipline and expanding interconnectedness across the franchise that enable us to fully deliver the strong results we did this quarter and fully expect that momentum to continue into 2025. Finally, I'd like to extend our thoughts to those impacted by the devastating and ongoing wildfires in Los Angeles. We are closely monitoring the situation and have teams across the bank involved in our collective response efforts to help best support our employees, customers and their communities. Let me close by thanking our employees for their continued dedication to our clients, communities and shareholders in what was a meaningful year for the company. We will now open up the call for Q and A.

Thank you. And we'll go first to Scott Siefers at Piper Sandler.

Good morning, guys. Thank you for taking my questions.

Hey. John, I was hoping maybe you could delve in

a little more to discuss the drivers of the 3% to 5% expected full year 2025 revenue growth. In other words, sort of how much comes from NII? How much ends up coming from fees? And maybe and then I guess a little clarification. When you're talking about the 1Q NII guide, I think you're saying flat excluding the day count difference.

So I just want to be certain, we're thinking, it would be down on a reported basis marginally just due to fewer days.

Right. Thanks, Scott, and good morning. So maybe let me take your last question first. Yes, excluding days about $40,000,000 would be lower on a reported basis. So stable excluding those 2 days of that $40,000,000 That's kind of that's how we're representing that.

On your on the sure, on the drivers on the 3% to 5% revenue growth, let me start with the fees and then I'll go over to into net interest income. We had really solid and healthy growth on the fee side of things. And we have a lot of momentum building and that's despite some headwinds that we saw, particularly on our prepaid, on the card side of things as well as freight. So some areas in the payments space that saw some headwinds. We also saw headwinds with the ATM exit of our cash servicing business.

So those things will abate or have abated here in 2024. And so we see obviously momentum in the core. At Investor Day, we talked about our expectation for the medium term for rate our expectations for 20262027 to be at mid single digits for fee growth. And that's a reasonable range for us to really think about as we think about 2025. And it really comes down to core areas of growth within our trust area.

We're seeing strong market share, fund formation. The macro is really strong there. Payments, we have good momentum in a number of areas, strategic initiatives that are underway. Treasury Management and Capital Markets continue to have strong growth in certain areas. A couple of areas that we're watching is mortgage.

Mortgages with these higher rates, it's hard to see volumes really persist or be a lot stronger than it was in the prior year and gain on sale is pretty stable as well. And then our other revenue will continue to be in that $125,000,000 to $150,000,000 range on an average basis per quarter. So put another way, we expect fees to grow. We have strong momentum and we think that is that mid single digit is a reasonable place for us to begin. As we think about net interest income, again, well positioned.

The balance sheet is in a great spot. We saw inflection in our throughout 2024. And we really think about 3 key drivers for net interest income. It's going to come from better asset mix, which we've seen more of a shift into higher returning assets. That shift will continue.

We've seen deposit normalization. That's the non interest bearing rotation is starting to slow down and really stabilize at this level. And then importantly, fixed asset repricing on our back book is going to be a meaningful driver this year, particularly with the curve steepening. We've seen since we were last on this call, the curve and I always look at SOFR versus 5 year treasury. That was meaningfully inverted back in September and now we're positive actually.

And so we think the back book is going to give us some nice trajectory. Just as an example, we have about $3,000,000,000 of an investment portfolio that reprises per quarter of $3,000,000,000 that runs off that can get replaced at 150 to 200 basis points of spread. And then on the other fixed rate assets that we have, which includes residential mortgage, commercial loans and auto loans and things like that, We have $5,000,000,000 to $7,000,000,000 on average that reprice again at that 150 to 200 basis points mark. And that's assuming kind of today's rates. So either way, we're very confident in our growth both on fees and the net interest income.

You put it all together and that's really where we come up with our 3% to 5% total revenue growth.

Perfect. All right, good. Appreciate all the detail, John. Thank you.

We'll move next to John McDonald at Truist Securities.

Hey guys. Wanted to ask 2 strategic questions. Maybe the first one is for Gunjan. Just on payments, you reorganized the business yesterday or this week you announced a new head to the consumer side. Maybe just kind of give us the plan for payments and what you hope the new organization and setup will do for the growth and opportunities there?

Good morning, John. Let me just remind you of some of the facts that we shared last time. Our payments franchise is a very strategic asset for us and our sense is that we can do more to interconnect that product set with our consumer franchise and our institutional franchise. So the OAK structure and splitting it into the 2 pieces that are more aligned with the two parts of the franchise is an expectation to accelerate execution. So it's not really a strategic focus.

We are very pleased to welcome 2 very high quality leaders. Mark Runkel, we announced earlier. Earlier in the year, he stepped into his role on the institutional side and Courtney Kelso joins us from Amex next month. So that was sort of the intention and the goal is to truly accelerate our execution around our vision for interconnectedness.

Okay. Thanks, Gunjan. And Andy, maybe broader, just kind of where have you planted seeds for offense across the company? I think in the retail bank, you're looking in the union franchise and maybe through your partners, Edward Jones and State Farm. But maybe just across the footprint, where are you excited about where U.

S. Bank has kind of invested for growth and you might be moving to the front foot?

Thanks, John, and good morning. I think it's across all of our business lines. And it's that concept that we talked about in an Investor Day, which is about interconnectedness. But if you think about the momentum that John articulated and Gunjan talked about, our payments business, our trust and investment management business, our commercial products business, our retail business, the growth in deposit activity, our commercial business with the growth in targeted loan activity, profitable loans. So we really have a lot of momentum going in that.

John coupled that with sort of the headwind that was the yield curve that John talked about, I think drives the positive momentum on net interest income. The fee categories we talked about, which I all think have positive momentum and all of that is coupled with a relatively flat expense for the last last quarters, which drives to this positive operating leverage that we talked about. So across all the categories of revenue, it's positive expenses well managed and that's going to deliver the positive operating leverage.

We'll go next to Betsy Graseck at Morgan Stanley.

I noticed that mine sounds very ticky tacky, but I just want to make sure I understand what forward curve your NII guide is based on. And I think you mentioned today, but I and the reason I ask is, as we all know, the forward curve has changed a lot between like beginning of December and today. So that's the first question.

Sure. So in terms of our curve, we do have 2 rate cut assumptions embedded. I think one's in May and one's in September. So that's kind of how we think about the short end of the curve. And the long end of the curve is at this level.

So right now, the 10 year treasury is at 4.65%. That's probably a good place. That's kind of where we're at kind of throughout the year. Of course, we know that it's volatile, it's been volatile. And that's why I say the curve does matter when we kind of look at these sorts of things.

Okay, great. And can you help us understand how your projections would move in the event that you've got fewer rate cuts or the long end went up more? Yes.

Exactly. So again, we have continued to be neutral from an interest rate risk standpoint. So as I mentioned, we expect 2 cuts, but if those cuts don't manifest or the Fed even hikes or there's more cuts, which we know the cycles, right, things will shift, we want to be as neutral as possible to those particular movements from the Fed on the short end of the curve. Where there is can be some change is really on the shape of the curve. So steeper curve, the better off we are.

If it's more inverted, then that would put a little bit more pressure on the net interest income. So at a high level, those are kind of the puts and takes.

And as we roll through the year, can you just give us a sense as to that fixed asset repricing? Is it coming through kind of quarterly cadence the same or is there any acceleration or de deceleration during the year that we should be thinking about?

It's pretty consistent. So I mentioned the $5,000,000,000 to $7,000,000,000 per quarter. I mean, it's going to range in that corridor each quarter, but it doesn't accelerate, it doesn't tail off. It's pretty consistent throughout the course of the year, same on the investment portfolio, pretty consistent.

We'll move to our next question from Ebrahim Poonawala with Bank of America.

Sorry if I missed this in your prepared remarks. When we think about the NII guidance for the year or your revenue outlook, What's underpinning that from a loan growth perspective? Like, 1, so yes, what's the assumption on loan and deposit growth? And are we seeing any green shoots of a pickup in lending demand?

Sure. Thanks, Ebrahim. So, we did not comment yet on loans, but I would just say in terms for purposes of our forecast, how we're thinking about 2025, we have pretty modest loan and deposit growth for the full year. Now, in terms of sentiment and things of that variety, clearly, there's a lot of positivity. Our client base is excited.

I think there's a lot of momentum clearly in our pipelines that we can see has not yet translated into elevated loan growth at this point. But perhaps that changes we're thinking hopefully it's in the back half of the year we can see that pickup in loan growth. But in terms of our forecast and our projections we anticipate modest for the year.

Got it. And I guess maybe just talk about I think you addressed a little bit around the payments business. As we think about the fee revenue sort of categories across payments, if you can sort of drill into expectations around that year over year in context of your overall revenue guide and obviously you brought in a new head of payments yesterday. Remind us of the market positioning, are we winning share, losing market share and what the ambition is there going forward? Thank you.

Sure. So, as I mentioned in payments earlier, we have momentum on the core side. We had had some headwinds there. So if I just kind of go through the different categories, on the card side of things, we had strong sales on the credit card side, 5 just over nearly 6% really. And total revenue was hurt in prepaid this quarter by about 4 percentage points, given the exiting some of our prepaid revenue.

That's going to impact us again in the Q1, but then we'll fully lap that in the second quarter. But continuing in the card side, we anticipate growth there and we have a lot of momentum in different products. We have our Smartly card that is coming online. We have a lot of excitement around that. Our Union acquisition increasing that penetration.

So we continue to expect that mid single digit growth in terms of on the retail card side of things. On the merchant side of things, we've had again strong sales. Our tech led formation and growth there has been really strong. We've been making investments. We expect travel to improve, same store sales to improve.

Clearly, our growth rate in 2024 was below our expectations. And as we see a lot more high volume, lower margin type clients continuing their pace, We're looking at the growth rate as better than of course 2024, but it may not be at our aspiration of high single digits for 2025. And then on the CPS side of things, strong quarter lead growth that we had, they had their best year. We've been making a lot of investments there. The pipelines are strong.

Freight, we have lapped. So a lot of positive things there. And again, the union penetration is going to be really paying off for us as well. And so we see high single digits there as well.

morning. You did announce that $5,000,000,000 share repurchase authorization during Investor Day, and I think the market got quite excited about that. In terms of the pacing of the buybacks, you did $100,000,000 this quarter. I guess, I heard you guys loud and clear during the prepared remarks, but what are the puts and takes that you're considering in terms of thinking about that pacing? I know that you're looking for modest pace to begin with.

But if loan growth is a little soft and that it seems like you have conservative guidance embedded in your revenue guide for balance sheet growth. What are the puts and takes in terms of the more modest start to buybacks?

Sure. At a high level, Erica, it's really the balance between growing our capital to get to where we need to be from a Category 2 perspective. We talked about 10% being our approximate level of where we want to be on a CAT II basis. And obviously, we don't expect to be a CAT II bank until 2027 or thereabouts. So that's really the one side of it.

The other side is, as you said, loan growth, if it's weaker, then there's an opportunity for deployment. But we're going to be we're going to as we just started, we're stepping into this, and we talked about the next quarter and the pace thereafter is just going to be dictated on those factors that I just mentioned.

And just as a follow-up here and maybe this is for Andy. The way you laid out your projection on Slide 15 in terms of the revenue guide and then positive operating leverage, If net interest income or payments swing one way or the other, either to the better or maybe softer, is the message here that there's you're now to a point where there's enough flex where regardless of the revenue environment that 200 plus basis points is going to be sort of the baseline for what you can deliver in 2025?

Sure, Erica. Short answer, Erica, is yes. It's 200 basis points plus on positive operating leverage. We do have flex on expense. I'm going to ask John to highlight some of the areas.

But we've been managing to a flat expense base for a number of quarters. This is our 5th quarter of the flat expenses. We're still investing in the company, but we're managing across many different areas. And we are very confident in that positive operating leverage regardless of what the revenue environment is. And John, why don't you talk about some of the levers?

Yes. Clearly, we've done a lot of work on the expense. We're very proud of the efforts that the teams have made thus far. But we have continued to see different levers that we're looking at and we'll kind of throughout the year kind of talk more about. But obviously, we had a notable item on the real estate side of things.

There's continued to be optimization there. Procurement and third party spend actions, we see opportunity as well as organizational simplicity and bringing fragmented groups together and centralizing certain aspects. And then just automation of processes, we have a lot of the investments that we've been talking about over Investor Day help us manage that expense by automating certain processes. And then that inflection point that we talked about in terms of investment in our digital capabilities, so the stabilization of that digital investment, we've increased that amount all along the J curve, if you will, and now we're at a flat place and we're bending that cost curve on the digital side, which we're really excited about. So, those are kind of the main pieces.

There's others. We have a lot of different initiatives, but those are the different levers that we look at.

We'll take our next question from John Pancari at Evercore ISI.

Good morning. Just appreciate the color, the breakout of the revenue growth outlook by fees and then your commentary around net interest income. Just behind that net interest income commentary and some of the drivers you mentioned around fixed asset repricing and deposit normalization.

Could you give us maybe your thoughts around the net interest margin trajectory as we look through the year? And perhaps maybe even help us with how the where the margin could end up as an exit rate coming out of 2025, just to help get us a better color around the what it means for the medium term trends? Thanks.

Sure. Thanks, John. And we anticipate given the drivers, we do anticipate net interest margin to follow net interest income and increase. We certainly, from a management standpoint, we don't manage to net interest margin. As an example, this quarter, it fell 3 basis points entirely due to liquidity, right?

So, I mean, there's always going to be transitional puts and takes to it. But directionally, it should follow. We talked about at Investor Day about how not that there's anything magical about 3%, but I mean there's certainly a lot of momentum in all those categories and drivers that I just mentioned really to kind of get us into that level over time. I think the big things that can move it are really loan growth as that goes up and down, deposit management and then the shape of the curve which impacts our fixed asset or our back book repricing. So those are going to be the components, but certainly expect directionally the net interest margin to improve as we march through time.

Got it. All right, John. Thank you for that. And then separately back to capital. On the M and A front, I know post the Investor Day, you've been clear that larger whole bank M and A would only be more of a consideration longer term as you look at your franchise versus the near term opportunity.

I guess, Andy, has that or Gunjan, has that changed at all or just given the election results and how comprehensively we expect a regulatory supervisory role change across the different regulators? And then does it I guess another question would be what would change your view in terms of possibly putting M and A options more in the near term view? Thanks.

So John, our perspective is the same, which is not a priority for us right now. The combination of the purchase accounting marks, the regulatory approval process, which may improve but isn't clear yet and the current bank valuations all factor into this. So while it may return large bank M and A may return over the longer term, we're very focused on our organic growth opportunities because we have a lot of them. And that's where we're putting our efforts and priorities right now. And Gunja, maybe you can highlight a couple of them because I think that emphasis is because of the opportunities that we have in front of us.

Very true. Good morning, John. I'll add that while the regulatory environment is very attractive for our organic growth opportunities too, we saw a very significant acceleration of our trust and investment fees and our capital markets fees because investor confidence and consumer confidence is very high. So the ability to drive a real inflection in organic growth with positive operating leverage is very much our focus and it's across many, many parts of our business. On the product side, we have a balance sheet that would support a much bigger capital markets business.

So we are very focused on that. We're introducing new capabilities there at quite a good pace. And the interconnectivity across our product sets is really deepening the franchise as well. So it's a very good strategy to drive growth with positive operating leverage and that is our focus right now.

U.S. Bancorp (USB) Q4 2024 Earnings Call Transcript

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