U.S. Bancorp Exceeds Expectations with 29% Jump In Adjusted Net Interest Income, Well-Positioned For Revenue Growth Strategies

U.S. Bancorp USB clocked a second-quarter total adjusted net revenue growth of 19.7% year-over-year to $7.197 billion. Net interest income plus Noninterest income totaled $7.141 billion. This compares to the consensus of $7.150 billion.

Adjusted net interest income jumped 28.5% to $4.42 billion, while adjusted noninterest income rose 7.8% to $2.75 billion.

Adjusted provision for credit losses in the quarter jumped to $578 million, compared with $311 million in the year-ago period. This was driven by the acquisition of MUFG Union Bank ("MUB") and continued economic uncertainty.

The company registered average total loan growth of 19.9% Y/Y and 0.5% sequentially. 

Adjusted earnings per share totaled $1.12, in line with the consensus.

The net interest margin in the first quarter of 2023 was 2.90%, compared with 2.59% in the second quarter of 2022, primarily due to the impact of higher rates on earning assets and the acquisition of MUB.

"In the second quarter, we successfully completed our conversion of Union Bank and further accelerated our accretion of capital, ending the quarter with a common equity tier 1 ratio of 9.1%. We posted diluted earnings per common share of $1.12, as adjusted, driven by continued momentum across our businesses supplemented by positive operating leverage on a linked quarter basis...Entering the second half of this year, we are well-positioned as a national bank with greater scale and the opportunity to capture significant cost synergies from Union Bank and to execute on revenue growth strategies that leverage our digital offerings, payment services, capabilities, and broad product set," said Andy Cecere, Chairman, President and CEO, U.S. Bancorp.

Price Action: USB shares are trading lower by 1.48% at $36.01 during the premarket session on the last check Wednesday.