U.S. Bancorp (USB) Q4 Earnings Meet Estimates, Revenues Up Y/Y

U.S. Bancorp (USB Quick Quote USB - Free Report) reported fourth-quarter 2020 earnings per share of 95 cents, in line with the Zacks Consensus Estimate. Results, however, compare unfavorably with the prior-year quarter’s figure of $1.08.

Higher revenues, along with deposit growth, were the driving factors. Though lower net interest income, along with escalating expenses and provisions disappointed, higher fee income acted as a tailwind.

Including certain one-time items, net income came in at $1.53 billion compared with the prior-year quarter’s $1.49 billion.

For full-year 2020, earnings per share came in at $3.06 per share, in line with the Zacks Consensus Estimate. The earnings figure compares unfavorably with the prior-year tally of $4.16 per share.

Revenues & Deposits Grow, Costs & Provisions Flare Up

For 2020, the company reported net revenues of $23.3 billion, up 1.5% year over year. The revenue figure is in line with the Zacks Consensus Estimate.

U.S. Bancorp’s net revenues came in at $5.8 billion in the fourth quarter, up 1.5% year on year. Increase in non-interest income, partly offset by reduced net interest income, led to this upside. Revenues came in line with the Zacks Consensus Estimate.

U.S. Bancorp’s tax-equivalent net interest income totaled $3.2 billion in the reported quarter, down 0.9% from the prior-year quarter. This decline mainly stemmed from lower rates, partially mitigated by deposit and funding mix, loan growth, and elevated loan fees.

Average earning assets climbed 13.1% year over year, supported by growth in average total loans, average investment securities, and average other earning assets. However, net interest margin of 2.57% was down 35 basis points year on year, mainly impacted by a lower yield curve and higher cash balances for liquidity, partially negated by deposit and funding mix.

U.S. Bancorp’s non-interest income climbed 4.7% on a year-over-year basis to $2.6 billion. The upsurge was mainly owing to a rise in mostly all components of income, partially offset by lower deposit service charges, credit and debit card revenue, merchant processing services, and corporate payment product revenues.

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