U.S. Bancorp, a Minneapolis-based bank, announced its quarterly results on Wednesday, surpassing expectations with elevated net interest income and better-than-expected revenue.
Strong Earnings and Adjusted Metrics
The bank reported earnings of 91 cents per share for the third quarter. However, when adjusted for the cost of acquiring MUFG Union Bank, National Association (ticker: MUB), earnings stood at $1.05 per share. This exceeded Wall Street’s forecasted earnings of 96 cents per share, according to FactSet.
Robust Net Interest Income
Net interest income, a crucial measure of profitability for banks, reached $4.27 billion in the third quarter, representing a 10% increase compared to the previous year. Although it slightly dipped by 4% from the second quarter, it still exceeded the bank’s guidance range of $4.2 billion to $4.4 billion. Notably, the metric has consistently remained above $4 billion for the past four quarters.
This growth can be attributed to rising interest rates, which generated higher income on assets, as well as the impact of the MUB acquisition.
Revenue Surpasses Expectations
U.S. Bancorp also witnessed an increase in net quarterly revenue. It rose from $6.33 billion to $7.03 billion compared to the same period last year. However, there was a slight decrease of 2% from the previous quarter. Nevertheless, this revenue figure was in line with analysts’ consensus forecast of $7.02 billion.
Following the announcement, U.S. Bancorp (USB) stock experienced a marginal decline of 0.6% to $34.68 during premarket trading. Meanwhile, S&P 500 futures contracts were down 0.3%.