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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.