U.S. Bancorp Raises 2026 Revenue Growth Outlook to 8%-9%

U.S. Bancorp (NYSE: USB ) stock traded lower Thursday after the bank reported third-quarter 2026 results that beat earnings expectations, while revenue fell slightly short of Wall Street estimates. Adjusted earnings of $1.34 per share beat the analyst consensus estimate of $1.33. Revenue rose to $7.95 billion, slightly below the consensus estimate of $8.01 billion.

Net income attributable to U.S. Bancorp increased 10% year over year to $2.2 billion. Earnings per share rose 9.8% from $1.22 a year earlier. U.S.

Bancorp Reports Record Revenue, Higher Margins The bank reported record total net revenue of $7.97 billion, up 8.7% year over year. Taxable-equivalent net interest income increased 5.6% to $4.49 billion. Growth was supported by a 5.6% increase in net interest income and a 14.9% rise in fee revenue. Net interest margin expanded by 9 basis points to 2.84% from 2.75% a year earlier.

The improvement reflected benefits from fixed asset repricing and a better asset mix. Return on average assets improved to 1.25%, while return on tangible common equity reached 18.5%. The efficiency ratio stood at 55.9%, reflecting positive operating leverage of 240 basis points from a year earlier. Loans And Deposits Show Steady Growth Average loans increased 8% to $409.55 billion.

Total commercial loans, including lease financing, rose 12.3%, commercial real estate loans grew 9.8%, and credit card balances climbed 11.5%. Meanwhile, average deposits increased 2.9% to $526.60 billion. Growth came from higher savings balances in Consumer and Business Banking and increased money market deposits in Wealth, Corporate, Commercial and Institutional Banking. Savings balances jumped 26.2%, while time deposits declined 19.3%.

Capital Markets Revenue Surges Nearly 70% Noninterest income increased 13.1% to $3.48 billion, while total fee revenue climbed 14.9% to $3.55 billion. Capital markets revenue surged 69.3% to $640 million. Trust and investment management fees rose 9.9%, while corporate payment and treasury management revenue increased 12.3%. However, merchant processing services revenue slipped 0.4%, reflecting seasonal factors.

Payment Services segment revenue grew 6.5% to approximately $1.87 billion, supported by higher loan balances and payment volumes. See More: Top Value Stocks BTIG Acquisition Boosts Fee Revenue BTIG contributed $223 million to the bank's $640 million in capital markets fee revenue during the quarter. Capital markets fee revenue accounted for approximately 8% of total net revenue. Management aims to increase that contribution to more than 10% over the next three to five years.

However, BTIG also added $213 million in noninterest expenses, including $22 million in merger-related integration and intangible amortization costs. Credit Quality Improves Despite Higher Provisions The provision for credit losses rose 14.5% to $654 million, including $135 million tied to the acquisition of a small-business credit card portfolio. However, a stronger economic outlook and favorable credit performance partly offset the increase. The net charge-off ratio improved to 0.51% from 0.56% a year earlier.

Nonperforming assets declined 20% to $1.32 billion, while the nonperforming asset ratio improved to 0.32%. Capital Position Remains Strong U.S. Bancorp reported a Common Equity Tier 1 capital ratio of 10.8% and a total risk-based capital ratio of 14.3%. Book value per share increased 5.3% to $38.27, while tangible book value per share rose 5.4% to $29.34.

The bank also declared a quarterly dividend of 54 cents per share. U.S. Bancorp Raises 2026 Revenue Outlook U.S. Bancorp raised its full-year 2026 revenue growth outlook to 8% to 9%, up from its previous forecast of 7% to 9%.

The updated outlook implies revenue of approximately $30.996 billion to $31.283 billion, compared with the analyst consensus estimate of $31.075 billion. Management expects positive operating leverage of approximately 300 basis points, rising to nearly 400 basis points excluding BTIG. The bank also expects BTIG to contribute nearly $200 million in quarterly net revenue during the fourth quarter. Meanwhile, management maintained its medium-term targets for mid-single-digit fee revenue growth, an efficiency ratio in the mid-to-high 50% range, and return on average assets of 1.15% to 1.35%.

Chairman and CEO Gunjan Kedia attributed the quarterly performance to the bank's diversified business model, record consumer deposits and disciplined execution. Kedia also highlighted continued growth in capital markets and payments, alongside efforts to expand the bank's small-business operations. Separately, the bank completed a live pilot transaction using its USBDC stablecoin. USB Stock Price Activity USB Price Action: U.S.

Bancorp shares were trading down 1.55% at $55.39 during premarket trading on Thursday, according to Pro data. Image via Shutterstock Read Also: Google Search's $250 Billion Business Faces a New AI Threat: Why Gene Munster Thinks Meta's Muse May Be More Dangerous Than ChatGPT