In This Article:
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Earnings Per Share (EPS): $1.01 per diluted share, or $1.07 after adjusting for notable items.
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Net Revenue: $7 billion for the quarter; $27.5 billion for the year.
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Operating Leverage: 190 basis points of positive operating leverage on an adjusted basis year-over-year.
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CET1 Capital Ratio: Increased 10 basis points to 10.6%.
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Tangible Book Value Per Share: $24.63, an increase of 10.4% compared to the end of last year.
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Return on Tangible Common Equity: 18.3% on an adjusted basis.
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Efficiency Ratio: Improved to 59.9% in the fourth quarter.
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Fee Income: Over 40% of total net revenue in the fourth quarter.
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Net Interest Income: $4.18 billion on a fully taxable equivalent basis for the quarter.
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Noninterest Expense: $4.2 billion for the quarter as adjusted; $16.79 billion for the year as adjusted.
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Nonperforming Assets Ratio: 0.48% at December 31.
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Net Charge-Off Ratio: 0.60% for the fourth quarter.
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Allowance for Credit Losses: $7.9 billion, or 2.09% of period-end loans.
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Share Repurchases: Initial $100 million of share buybacks this quarter.
Release Date: January 16, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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U.S. Bancorp (NYSE:USB) reported a strong fourth quarter with $1.07 earnings per share after adjusting for notable items.
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Net revenue for the quarter was $7 billion, contributing to a total of $27.5 billion for the year, driven by growth in net interest income and non-interest income.
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The company achieved 190 basis points of positive operating leverage on an adjusted basis year-over-year.
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U.S. Bancorp's CET1 capital ratio increased to 10.6%, reflecting strong capital management.
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The company delivered an 18.3% return on tangible common equity and improved its efficiency ratio to 59.9% in the fourth quarter.
Negative Points
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The quarter included $109 million of notable expense items, impacting earnings.
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There was a slight decline in the average yield across both the investment portfolio and loan book due to variable rates.
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Noninterest income growth was partially offset by lower mortgage banking and seasonally lower payments revenue.
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The merchant acquiring yield contracted by 70 basis points year-over-year, indicating potential competitive pressures.
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The company expects modest loan and deposit growth for 2025, indicating potential challenges in expanding its balance sheet.
Q & A Highlights
Q: Can you discuss the drivers of the 3% to 5% expected full-year 2025 revenue growth, particularly the contributions from net interest income (NII) and fees? A: John Stern, CFO, explained that the 3% to 5% revenue growth is driven by both fee and NII growth. Fee growth is expected in areas like Trust and Investment Management, Payments, and Treasury Management, despite some headwinds in prepaid cards and ATM exits. NII growth will be supported by better asset mix, deposit normalization, and fixed asset repricing, particularly with the curve steepening, which will allow for higher returns on investments and loans.