U.S. Bancorp USB has reported first-quarter 2026 earnings per share of $1.18, topping the Zacks Consensus Estimate by 3.4%. The bottom line increased 14.6% from $1.03 in the year-ago quarter.
Results were supported by higher net interest income (NII) and solid fee revenue growth, while the company has posted positive operating leverage of 440 basis points. However, a rise in provision was concerning.
Net income attributable to U.S. Bancorp was $1.95 billion, up 13.8% from the prior-year quarter.
USB Revenue Mix Improves on Higher NII & Fee Growth
Net revenues of $7.29 billion in the first quarter rose 4.7% year over year but missed the consensus estimate of $7.31 billion.
Tax-equivalent NII was $4.29 billion, up 4.1% from the prior-year period. Management attributed the improvement to loan growth, a better earning-asset mix and fixed-asset repricing benefits.
The net interest margin expanded 5 basis points year over year to 2.77%, reflecting the same fixed-asset repricing tailwind.
Non-interest income totaled $2.9 billion, rising 5.7% from the year-ago quarter. Growth was driven by higher card revenues, stronger merchant processing, increased investment and trust fees, higher lending and deposit fees, and solid capital markets performance. This was partly offset by lower other revenues and losses from repositioning part of the securities portfolio.
U.S. Bancorp Expenses Rise Modestly, Efficiency Strengthens
Non-interest expenses were $4.27 billion, up a modest 0.8% from the year-ago quarter. Higher marketing and business development expenses, technology and communications expenses, and compensation and employee benefits led to the rise.
The company’s efficiency ratio improved to 58.2% from 60.8% a year ago, indicating improvement in profitability.
USB Balance Sheet Expands With Loan Growth, Deposits Steady
Average total loans increased 2.4% sequentially to $393.56 billion, reflecting broad-based growth in key categories.
Average total deposits were $515.12 billion, essentially flat with the prior quarter.
U.S. Bancorp Credit Trends Stable With Solid Capital Levels
Provision for credit losses was $576 million, up 7.3% from the year-ago quarter, primarily reflecting loan portfolio growth. Total net charge-offs were $546 million, essentially stable year over year, and the net charge-off ratio was 0.56% versus 0.59% in the prior-year quarter.
The allowance for credit losses increased to $7.98 billion at March 31, 2026, from $7.92 billion a year earlier. Non-performing assets were $1.53 billion, down from $1.73 billion at March 31, 2025.
Capital levels remained steady. The Basel III standardized CET1 capital ratio was 10.8% at the quarter end, unchanged from the year-ago level.
The tier 1 capital ratio was 12.3%, down from 12.4% in the prior year. The leverage ratio was 8.8%, up from 8.4% in the year-ago quarter.
The tangible common equity to tangible assets ratio was 6.7%, up from the prior-year quarter’s 6%.
Our Take on USB
U.S. Bancorp’s diversified revenue streams and solid balance sheet continue to support its strong financial performance. Growth in NII and non-interest income, coupled with improved efficiency, bodes well for future profitability. In January 2026, USB agreed to acquire BTIG, LLC. The transaction is expected to close in the second quarter of 2026, marking a significant step in USB’s efforts to expand its capital markets capabilities and deepen relationships with institutional clients. Although provisions rose in the first quarter of 2026, U.S. Bancorp remains well-positioned to maintain positive operating leverage in the upcoming quarters.
U.S. Bancorp Price, Consensus and EPS Surprise
U.S. Bancorp price-consensus-eps-surprise-chart | U.S. Bancorp Quote
Currently, U.S. Bancorp carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Dates & Expectations of Bank Stocks
Fifth Third Bancorp FITB is scheduled to release first-quarter 2026 earnings on April 17. The consensus estimate for FITB’s quarterly earnings has been revised lower to 84 cents per share over the past seven days. This indicates a rise of 15.1% from the year-ago reported level.
Huntington Bancshares Inc. HBAN is slated to report first-quarter 2026 earnings on April 23. Over the past seven days, the Zacks Consensus Estimate for HBAN’s quarterly earnings has been unchanged at 36 cents per share. This indicates a rise of 5.9% from the year-ago reported level.
Zacks' Research Chief Picks Stock Most Likely to "At Least Double"
Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren’t winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%.
See Our Top Stock to Double (Plus 4 Runners Up) >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Fifth Third Bancorp (FITB): Free Stock Analysis Report
U.S. Bancorp (USB): Free Stock Analysis Report
Huntington Bancshares Incorporated (HBAN): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).