U.S. Bancorp Sees Strong Quarter as Fees, Deposits and Capital Markets Accelerate

U.S. Bancorp expects a strong third quarter , with net interest income and fee-revenue growth tracking the high end of prior guidance. The bank also expects to finish the year near the top of its 7%–9% revenue-growth outlook. Deposits are projected to grow strongly—potentially faster than loans—while full-year loan growth remains targeted at approximately 6%–7%. Management cited disciplined lending standards and continued competition for deposits. Fee businesses remain central to the growth strategy: payments and capital markets are expanding, with BTIG expected to boost fee growth, while the bank is investing in branches, digital assets and technology. Share repurchases were temporarily paused to support capital needs but are expected to resume. MarketBeat previews the top five stocks to own by October 1st . Smart Money Shifts: U.S. Bancorp Pairs Tech With Yield U.S. Bancorp NYSE: USB executives said the bank expects another strong quarter, supported by growth in net interest income, fee revenue and deposits, while outlining plans to expand its consumer franchise, payments capabilities and capital-markets business. Chief Executive Officer Gunjan Kedia said the bank’s progress during her first year as CEO has been driven by a sharper focus on expense management, organic growth and payments transformation. She said the company made organizational changes, elevated revenue-facing roles and refreshed talent, with nearly a quarter of its top 200 roles filled by people new to the bank or new to their positions. Get U.S. Bancorp alerts: Sign Up Wintrust: A Quiet Regional Bank Posting Loud Results Kedia said the bank has operated within its medium-term financial guidance for four quarters and has narrowed its valuation gap with peers. However, she identified mortgage and auto lending as areas that have underperformed expectations because demand has remained muted amid less rate moderation than the bank had anticipated. Quarterly Outlook Points to Higher-End Growth Chief Financial Officer John Stern said U.S. Bancorp expects net interest income growth to come in at the high end of its previously stated 4% to 6% year-over-year range for the third quarter. Fee revenue growth is also expected to reach the high end of the company’s 12% to 14% outlook, and could exceed that range depending on the timing of capital-markets transactions. 3 Regional Bank Stocks That Crushed Q3 Earnings Stern said expenses are expected to rise about 8%, in line with prior expectations, while charge-offs remain stable. Based on third-quarter trends, he said the company expects to finish the year at the higher end of its full-year 7% to 9% revenue-growth outlook. The bank continues to expect full-year loan growth of approximately 6% to 7%, Stern said. While loan demand remains strong, particularly for capital expenditures and financing needs, he said the company has become more disciplined around return hurdles and exceptions after strong loan growth in the first half. On deposits, Stern said the bank expects strong growth during the quarter, potentially exceeding loan growth. He cited another expected quarter of record consumer deposits and a return of some seasonal commercial deposit activity. He also noted that competition for deposits remains active, including promotional certificates of deposit and new-account incentives offered by competitors. Fee Businesses Remain a Strategic Differentiator Kedia said fee revenue accounts for roughly 44% to 45% of U.S. Bancorp’s revenue and remains a central differentiator for the company. The fee complex includes payments, trust and investment services, capital markets and consumer fees. She identified payments and capital markets as the two largest future growth opportu...