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U.S. Bancorp's USB fourth-quarter 2024 adjusted earnings per share of $1.07 surpassed the Zacks Consensus Estimate of $1.06. Also, the figure reflected a jump of 8.1% from the prior-year quarter.
Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.
U.S. Bancorp Price, Consensus and EPS Surprise
U.S. Bancorp price-consensus-eps-surprise-chart | U.S. Bancorp Quote
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%. The primary driver for the upside was higher non-interest income and lower expenses. A rise in net interest income (NII) and strong capital position were other tailwinds.
However, investors seem to have turned bearish on the stable outlook for the first quarter of 2025 despite the operating backdrop turning gradually favorable. Also, the continued deterioration of asset quality disappointed investors. This led the stock to fall 4.8% during yesterday’s trading session.
Increase in Non-Interest Income Aids USB’s Q4 Results
U.S. Bancorp’s non-interest income increased 8.1% year over year to $2.83 billion. Higher trust and investment management fees, and commercial product revenues drove the upside.
Likewise, Synovus Financial Corp. SNV and Wells Fargo & Company WFC witnessed an increase in non-interest income in the fourth quarter of 2024.
SNV’s non-interest revenues were $125.6 million, which rose significantly from $51.5 million posted a year ago. WFC’s non-interest income also moved up 11% year over year to $8.54 billion.
USB’s 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.
Non-interest expenses declined 17.4% year over year to $4.31 billion in the fourth quarter of 2024. 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.
USB’s Weak Asset Quality Dulls Q4 Performance
U.S. Bancorp’s credit quality deteriorated in the quarter. As of Dec. 31, 2024, the company’s non-performing assets amounted to $1.83 billion, up 22.6% from the year-ago period. Total allowance for credit losses was $7.92 billion, up 1.1% year over year.
The provision for credit losses in the reported quarter was $560 million, up 9.4% from the prior-year quarter. Net charge-offs were $562 million, up from $463 million in the year-ago quarter.
Management projects the first quarter 2025 NII to be stable compared with the fourth quarter 2024 figure of $4.18 billion. Also, total non-interest expenses for first quarter 2025 is expected to be stable compared with the fourth quarter 2024 reported level.