U.S. Bancorp (USB) Q2 2024 earnings summary

Executive summary

• Net income attributable to common shareholders rose to $1.52 billion–$1,603 million in Q2 2024, up 17.8%–18.5% year-over-year, with diluted EPS of $0.97 and adjusted EPS of $0.98, driven by lower noninterest expense and provision for credit losses, despite lower net interest income.

• Return on average assets improved to 0.97% and return on average common equity increased to 12.4%, with return on tangible common equity at 18.6% (adjusted).

• Diversified fee income businesses provided earnings consistency, with over 40% of net revenue from fees.

• Credit quality stabilized, with allowance for credit losses to period-end loans at 2.11% and tangible book value per share up 2.8% sequentially and 10.1% year-over-year.

• Notable items included a $26 million FDIC special assessment, and management changes with a new president appointed.

Financial highlights

• Total net revenue for Q2 2024 was $6.87–$6.9 billion; net interest income (taxable equivalent) was $4.05 billion, up 0.9% sequentially but down 8.9% year-over-year.

• Noninterest income grew 3.3% year-over-year and 4.3% sequentially, led by payments and mortgage banking.

• Noninterest expense (adjusted) decreased 0.1% sequentially and 1.7% year-over-year, reflecting cost synergies and operational efficiencies.

• Net charge-off ratio was 0.58%, up from 0.53% in Q1, with allowance for credit losses at $7.9 billion (2.1% of loans).

• Tangible book value per share reached $23.15.

Outlook and guidance

• Q3 net interest income expected to be stable; full-year 2024 NII guidance is $16.1–$16.4 billion.

• Full-year noninterest income (adjusted) expected to grow mid-single digits; noninterest expense (adjusted) to be $16.8 billion or lower.

• Positive operating leverage targeted for the second half of 2024 and into 2025.

• Assumptions include two rate cuts (September and December) in projections.

• Management expects continued delivery of industry-leading returns, supported by national scale and digital capabilities.