01—Abstract
Summary
Summary of the 10-K filed February 21, 2025. Cited figures are marked; the original filing is the authoritative source.
U.S. Bancorp (USB) closed 2024 with net income attributable to the company of $6.3 billiona, or $3.79 per diluted share, up from $5.4 billion, or $3.27 per diluted share, in 2023.
Results were driven by lower noninterest expense, which fell 8.9 percent to $17.2 billionb on the absence of 2023's large merger-integration and FDIC special assessment charges, while net interest income fell 6.4 percent to $16.3 billion as higher deposit costs compressed the net interest margin to 2.70 percent from 2.90 percent. Fee revenue grew 4.1 percent, led by trust and investment management, merchant processing and commercial products. Return on average assets improved to 0.95 percent from 0.82 percent and return on average common equity rose to 11.7 percent from 10.8 percent.
Credit quality showed modest deterioration. Net charge-offs rose 13.0 percent to $2.2 billionc, driven by credit card and commercial losses, and nonperforming assets increased 22.6 percent to $1.8 billion, concentrated in commercial and commercial real estate loans. The commercial real estate office sector, at 11.5 percent of CRE loans, remains a focal point of stress, with office nonperforming loans rising to 10.9 percent of office loans.
The allowance for credit losses was $7.9 billiond, or 2.09 percent of period-end loans. Capital strengthened, with the CET1 ratio reaching 10.6 percent, up 70 basis points.
The company resumed buybacks in the fourth quarter under a new $5.0 billion program, and the quarterly dividend was raised 2 percent to $0.50. The filing also flags regulatory uncertainty, including the proposed Basel III Endgame rules, a long-term debt proposal, and a stress capital buffer of 3.1 percent, alongside leadership transition, with Gunjan Kedia becoming CEO in April 2025 and Andrew Cecere moving to Executive Chairman.
02—Key points
Key Highlights
- Net income of $6.3 billion ($3.79 diluted EPS) rose 16 percent from 2023, aided by a $1.7 billion (8.9 percent) decline in noninterest expense to $17.2 billion.
- Net interest income fell 6.4 percent to $16.3 billion and net interest margin compressed to 2.70 percent from 2.90 percent due to higher deposit costs, though net interest income began expanding in the second half of 2024.
- Noninterest income rose 4.0 percent to $11.0 billion, led by trust and investment management fees (up 8.2 percent), commercial products revenue (up 11.0 percent) and merchant processing.
- Net charge-offs increased 13.0 percent to $2.2 billion and nonperforming assets rose 22.6 percent to $1.8 billion, with credit card net charge-offs at 4.28 percent of average balances.
- CET1 capital ratio improved to 10.6 percent (up 70 basis points), and the company resumed share repurchases under a new $5.0 billion authorization, with $4.9 billion remaining at year-end.
- Commercial real estate office loans, 11.5 percent of the CRE portfolio, remain under stress, with the allowance coverage for the office book at 11 percent.
- Regulatory and leadership transitions, including proposed Basel III Endgame capital rules, a long-term debt proposal, and Gunjan Kedia succeeding Andrew Cecere as CEO in April 2025, add uncertainty to the outlook.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 21, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $27.45B$28.14B | −2.4% |
| Net Income | $6.30B$5.43B | +16.0% |
| EPS (Basic) | $3.79$3.27 | +15.9% |
| EPS (Diluted) | $3.79$3.27 | +15.9% |
| Shares Outstanding (Basic) | 1.56B1.54B | +1.1% |
| Shares Outstanding (Diluted) | 1.56B1.54B | +1.2% |
05—Questions
Frequently Asked Questions
How did U.S. Bancorp's profitability change in 2024?
Net income attributable to U.S. Bancorp rose to $6.3 billion, or $3.79 per diluted share, from $5.4 billion, or $3.27, in 2023. Return on average assets increased to 0.95 percent from 0.82 percent, and return on average common equity rose to 11.7 percent from 10.8 percent. The improvement reflects lower merger-integration and FDIC special assessment charges, partially offset by lower net interest income.
Is the company's credit quality deteriorating?
Credit quality weakened modestly but remains stable overall. Net charge-offs were $2.2 billion, up 13.0 percent, mainly from credit cards and commercial loans, and nonperforming assets rose 22.6 percent to $1.8 billion. The allowance for credit losses of $7.9 billion covers 2.09 percent of loans, and management cited stabilizing economic and credit trends as the provision declined slightly.
What is the outlook for capital returns to shareholders?
The board raised the quarterly dividend 2 percent to $0.50 per share and authorized a $5.0 billion repurchase program effective September 2024, with buybacks resuming in Q4 2024. Capital distributions remain subject to board approval and regulatory requirements, and the stress capital buffer of 3.1 percent sets the effective minimum capital levels that govern how much can be returned.
What regulatory risks could affect USB's future earnings?
USB is a Category III institution facing potential changes including the Basel III Endgame proposal, which could raise regulatory capital requirements, and a proposed long-term debt requirement that could change its funding mix and pressure net interest margin. The filing also notes that the change in presidential administration may shift regulatory priorities, and the CFPB's proposed late-fee reduction could reduce card revenue.
06—Continue