US Bancorp Q2 Earnings: Net Interest Income Dips, But Fee Income Grows

U.S. Bancorp USB shares are trading higher after it reported second-quarter FY24 results.

Revenue stood at $6.867 billion (-4.3% Y/Y), beating the consensus of $6.795 billion.

Net interest income (taxable-equivalent basis) fell 8.9% Y/Y to $4.05 billion owing to the impact of higher interest rates on deposit mix and pricing.

The net interest margin decreased to 2.67% in the second quarter of 2024 from 2.90% in the year-ago quarter.

Meanwhile, non-interest income rose 3.3% Y/Y to $2.8 billion, aided by higher fee revenue across most categories.

Adjusted earnings per share totaled $0.98, beating the consensus of $0.94.

The provision for credit losses for the second quarter of 2024 was $568 million, down 30.8% Y/Y, due to stabilization in the economic and credit environment.

The company recorded an average total loan increase of 1.0% Y/Y and an average total deposit growth of 2.2% on a linked quarter basis.

The company reported a CET1 capital ratio of 10.3% as of June end, compared with 10.0% at March end.

Andy Cecere, Chairman, President and CEO, said, “This quarter we generated $6.9 billion in net revenue driven by improved linked quarter net interest income, supported by healthy deposit growth, and continued momentum in leveraging our diversified fee income platform to deepen relationships.”

“We continued to invest for the future while managing our operating expenses prudently, with both linked quarter and year-over-year declines in noninterest expense.”

Outlook: USB reiterated FY24 net interest income (taxable-equivalent basis) guidance at $16.1 billion-$16.4 billion.

For the third quarter, USB expects net interest income (taxable-equivalent basis) to be relatively stable sequentially.

Investors can gain exposure to the stock via IShares U.S. Regional Banks ETF IAT and First Trust Nasdaq Bank ETF FTXO.

Price Action: USB shares are up 1.41% at $43.90 premarket at the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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