How did U.S. Bancorp's profitability change in the first quarter of 2025?

Net income attributable to U.S. Bancorp rose to $1,709 million from $1,319 million a year earlier, and diluted EPS was $1.03 versus $0.78. Much of the year-over-year gain reflects the absence of $199 million of notable items in 1Q24, but excluding those items EPS still grew 14.4%, driven by revenue growth and disciplined expenses.

Is U.S. Bancorp's expense discipline holding up?

Yes. Noninterest expense fell 5.1% YoY on a reported basis to $4,232 million and rose only 0.9% when adjusted for prior-year notable items. Management cited cost savings from operational efficiencies, though 1Q25 compensation and marketing expenses rose sequentially, and it expects 2Q25 expenses of $4.1-4.2 billion.

What is the outlook for net interest income and margins?

Management guided 2Q25 net interest income to $4.2 billion or lower on a taxable-equivalent basis and targets a medium-term NIM above 3.00% for 2026-2027, supported by loan growth and mix, fixed-asset repricing, investment portfolio management, and deposit funding optimization. Deposit mix shifts and lower average earning assets are near-term headwinds.

Are credit quality and capital adequate?

Credit quality was stable, with a $537 million provision (lower YoY and QoQ), an allowance of 2.07% of period-end loans, and nonperforming assets of $1,727 million, down 5.7% QoQ. The CET1 ratio of 10.8% is above well-capitalized requirements, though the net charge-off ratio of 0.59% is higher than a year ago and management flagged ongoing commercial real estate office stress and macroeconomic uncertainty.

What changed in leadership and strategy?

Gunjan Kedia became President and CEO, succeeding Andy Cecere, who led the company for more than 40 years of combined service. Management reiterated medium-term targets of ROA of 1.15%-1.35%, ROTCE in the high teens, fee income growth in the mid-single digits, and an efficiency ratio in the mid-to-high 50s, with a payments transformation and expense initiatives as key priorities.

US BANCORP \DE\ 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed April 16, 2025. Cited figures are marked; the original filing is the authoritative source.

U.S. Bancorp (USB) reported first-quarter 2025 results on April 16, 2025, showing net income attributable to the company of $1,709 million^a and diluted EPS of $1.03, up from $0.78 a year earlier (+32.1%) and up 2.0% from $1.01 in 4Q24.

Excluding notable items in the prior-year period, EPS grew 14.4% year over year. Return on tangible common equity was 17.5% and the efficiency ratio improved to 60.8% from 66.4%. Management highlighted 270 basis points of positive operating leverage on an adjusted basis, the third consecutive quarter of revenue growth outpacing expense growth, and total net revenue of $6,958 million^b, up 3.6% year over year.

Credit and capital metrics were stable to improving. The net charge-off ratio was 0.59% versus 0.53% a year ago but slightly better than 0.60% in 4Q24. The CET1 ratio rose 20 basis points sequentially to 10.8%, and the company repurchased $100 million^c of common stock during the quarter.

The allowance for credit losses was 2.07% of period-end loans, and nonperforming assets declined to $1,727 million^d. Net interest margin edged up to 2.72%, while average total loans grew 2.1% year over year. Average deposits rose only 0.7% year over year and fell 1.1% sequentially, with noninterest-bearing deposits down 6.0% year over year.

The filing also marked a leadership transition, with Gunjan Kedia now serving as President and CEO succeeding Andy Cecere. Management reiterated medium-term targets for 2026-2027 (ROA of 1.15%-1.35%, ROTCE in the high teens, mid-to-high 50s efficiency ratio, and NIM of 3.00%+), and guided to 2Q25 net interest income of $4.1-4.2 billion, noninterest expense of $4.1-4.2 billion, and positive operating leverage of 200+ basis points. Investors should note that the quarter benefited from lower compensation and a favorable tax rate, while headwinds include deposit mix shifts, the tariff and macroeconomic uncertainty flagged in the filing, and a regulatory path that is not expected to move the company into Category II before 2027.

02—Key points

Key Highlights

Net income attributable to U.S. Bancorp of $1,709M, up 29.6% YoY and 2.8% QoQ; diluted EPS of $1.03 vs. $0.78 a year ago.
Efficiency ratio improved to 60.8% from 66.4% YoY; ROTCE of 17.5% vs. 15.1% a year earlier.
Positive operating leverage of 270 bps YoY on an adjusted basis, with noninterest expense up only 0.9% YoY excluding prior-period notable items.
Total net revenue of $6,958M (+3.6% YoY); net interest margin of 2.72% and noninterest income up 5.0% YoY, driven by payment services and trust fees.
CET1 ratio of 10.8%, up 20 bps QoQ, with $100M of common stock repurchased in the quarter.
Net charge-off ratio of 0.59% (vs. 0.53% YoY) and nonperforming assets down to $1,727M; provision for credit losses of $537M, lower YoY.
Average deposits up only 0.7% YoY and down 1.1% QoQ, with noninterest-bearing deposits down 6.0% YoY; Gunjan Kedia took over as CEO from Andy Cecere.

03—Questions

Frequently Asked Questions

How did U.S. Bancorp's profitability change in the first quarter of 2025?
Net income attributable to U.S. Bancorp rose to $1,709 million from $1,319 million a year earlier, and diluted EPS was $1.03 versus $0.78. Much of the year-over-year gain reflects the absence of $199 million of notable items in 1Q24, but excluding those items EPS still grew 14.4%, driven by revenue growth and disciplined expenses.
Is U.S. Bancorp's expense discipline holding up?
Yes. Noninterest expense fell 5.1% YoY on a reported basis to $4,232 million and rose only 0.9% when adjusted for prior-year notable items. Management cited cost savings from operational efficiencies, though 1Q25 compensation and marketing expenses rose sequentially, and it expects 2Q25 expenses of $4.1-4.2 billion.
What is the outlook for net interest income and margins?
Management guided 2Q25 net interest income to $4.2 billion or lower on a taxable-equivalent basis and targets a medium-term NIM above 3.00% for 2026-2027, supported by loan growth and mix, fixed-asset repricing, investment portfolio management, and deposit funding optimization. Deposit mix shifts and lower average earning assets are near-term headwinds.
Are credit quality and capital adequate?
Credit quality was stable, with a $537 million provision (lower YoY and QoQ), an allowance of 2.07% of period-end loans, and nonperforming assets of $1,727 million, down 5.7% QoQ. The CET1 ratio of 10.8% is above well-capitalized requirements, though the net charge-off ratio of 0.59% is higher than a year ago and management flagged ongoing commercial real estate office stress and macroeconomic uncertainty.
What changed in leadership and strategy?
Gunjan Kedia became President and CEO, succeeding Andy Cecere, who led the company for more than 40 years of combined service. Management reiterated medium-term targets of ROA of 1.15%-1.35%, ROTCE in the high teens, fee income growth in the mid-single digits, and an efficiency ratio in the mid-to-high 50s, with a payments transformation and expense initiatives as key priorities.

04—Continue

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