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Key Takeaways U.S. Bancorp beat Q2 earnings and revenue estimates on higher NII and broad-based fee income growth.USB's BTIG acquisition lifted capital markets revenues and expanded institutional capabilities.USB plans a 4% dividend increase after stress-test clearance and continued share repurchases. U.S. Bancorp (USB - Free Report) has reported second-quarter 2026 earnings per share of $1.35, topping the Zacks Consensus Estimate by 5.5%. The bottom line increased 21.6% from $1.11 in the year-ago quarter.

Results were supported by higher net interest income (NII), broad-based fee revenue growth and strong loan growth, while the company posted positive operating leverage of 400 basis points. The BTIG acquisition (completed in June 2026) also contributed to capital markets revenue growth and expanded the company’s institutional capabilities. However, a rise in provision was concerning.

Net income attributable to U.S. Bancorp was $2.18 billion, up 19.9% from the prior-year quarter.

USB Revenue Mix Improves on Higher NII & Fee GrowthNet revenues reached a record level of $7.71 billion in the second quarter, rising 10.1% year over year and surpassing the consensus estimate by 1.3%.

Tax-equivalent NII was $4.39 billion, up 7.5% 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 13 basis points year over year to 2.79%.

Non-interest income totaled $3.33 billion, rising 13.7% from the year-ago quarter. Growth was driven by higher revenues across all fee categories, including card revenues, corporate payment and treasury management revenues, trust and investment management fees, lending and deposit-related fees, and capital markets revenues. Capital markets revenues benefited from the BTIG acquisition, increased client-related derivative activity, higher corporate bond underwriting fees and favorable market conditions.

U.S. Bancorp Expenses Rise, Efficiency StrengthensNon-interest expenses were $4.43 billion, up 5.9% from the year-ago quarter. The impacts of the BTIG acquisition, higher compensation and employee benefits expenses, technology and communications expenses, marketing and business development initiatives, and other expenses led to the rise.

The company’s efficiency ratio declined to 57.1% from 59.2% a year ago, indicating improvement in profitability.

USB Balance Sheet Expands With Loan & Deposit GrowthAverage total loans increased 3% sequentially to $405.48 billion and advanced 7.1% year over year, reflecting broad-based growth in key categories.

Average total deposits were $515.08 billion, essentially flat with the prior quarter and up 2.4% year over year.

U.S. Bancorp Credit Trends: Mixed BagProvision for credit losses was $538 million, up 7.4% from the year-ago quarter, primarily reflecting loan portfolio growth. Total net charge-offs were $536 million, down from $554 million a year earlier, and the net charge-off ratio was 0.53% versus 0.59% in the prior-year quarter.

The allowance for credit losses increased to $7.98 billion as of June 30, 2026, from $7.86 billion a year earlier. Non-performing assets were $1.35 billion, down from $1.68 billion as of June 30, 2025.

U.S. Bancorp Capital Levels SolidCapital levels remained solid. The Basel III standardized CET1 capital ratio was 10.8% at the quarter end, up from 10.7% in the year-ago period.

The tier 1 capital ratio was 12.2%, down from 12.3% in the prior year. The leverage ratio was 8.9%, up from 8.5% in the year-ago quarter.

The tangible common equity to tangible assets ratio was 6.6%, up from the prior-year quarter’s 6.1%. 

During the quarter, U.S. Bancorp repurchased 3 million shares and continued repurchases under its $5-billion common stock repurchase authorization. Post clearing the 2026 stress test, the company also plans to increase its quarterly common stock dividend 4% to 54 cents per share in the third quarter of 2026, subject to board approval.

Our Take on USBU.S. Bancorp’s diversified revenue streams, solid loan growth and improving credit quality continue to support its strong financial performance. Growth in NII and non-interest income, coupled with improved efficiency, bodes well for future profitability. The completion of the BTIG acquisition expanded USB’s capital markets capabilities and provided opportunities to deepen relationships with corporate and institutional clients. Although provisions rose in the second quarter of 2026, U.S. Bancorp remains focused on delivering sustainable growth, attractive returns and long-term shareholder value.

Currently, U.S. Bancorp carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Dates & Expectations of Other StocksRegions Financial (RF - Free Report) is scheduled to release second-quarter 2026 earnings on July 17.

The consensus estimate for RF’s quarterly earnings has been unchanged at 64 cents per share over the past seven days. This indicates a 6.7% increase from the year-ago reported level.

Truist Financial (TFC - Free Report) is slated to report second-quarter 2026 results on July 17.

Over the past seven days, the Zacks Consensus Estimate for TFC’s quarterly earnings has been unchanged at $1.08 per share. This indicates an 18.7% increase from the year-ago reported level.

Key Takeaways USB passed the Fed's 2026 stress test, while its SCB will remain unchanged at 2.6% until Oct. 1, 2027.U.S. Bancorp intends to raise its quarterly dividend by 3.8% to 54 cents per share.USB's CET1 ratio of 10.8% exceeded the 7.1% minimum, supporting capital returns and growth. Following the release of the Federal Reserve's 2026 stress test, U.S. Bancorp (USB - Free Report) outlined its planned capital actions and reaffirmed its strong capital position. According to the Fed’s stress test results released yesterday, USB is among the 32 U.S. banks that successfully passed the test.

Based on the 2026 stress test results, USB's stress capital buffer (SCB) would have been subject to the regulatory floor of 2.5%. However, as announced by the Fed in February 2026, stress test-related capital buffer requirements will remain unchanged through 2027 while the agency reviews public feedback on its supervisory models. As such, the company's SCB will remain unchanged at 2.6% until Oct. 1, 2027.

Including the Basel III minimum common equity Tier 1 (CET1) capital requirement of 4.5%, USB is also required to maintain a CET1 ratio of at least 7.1%. As of March 31, 2026, the company's CET1 ratio was 10.8%, significantly above the required minimum level. This underlines the capital strength of USB and enables the bank to undertake organic growth initiatives and continue capital payouts.

As part of its planned capital actions, U.S. Bancorp intends to raise its quarterly common stock dividend by 3.8% to 54 cents per share from 52 cents, subject to board approval. The higher dividend is expected to become effective in the third quarter of 2026.

Based on yesterday's closing price of $60.10, its current dividend yield stands at 3.5% compared with the industry's 2.7%. Over the past five years, the company has increased its dividend five times.

Dividend Yield
Image Source: Zacks Investment Research

Apart from dividends, USB continues to return capital through share repurchases. In September 2024, the board authorized a share repurchase program of up to $5 billion of common stock. As of March 31, 2026, nearly $4.1 billion remained available under the authorization.

U.S. Bancorp also maintains a decent liquidity position. As of March 31, 2026, cash and due from banks were $48.4 billion, while short-term borrowings and long-term debt totaled $17.9 billion and $61.4 billion, respectively.

Driven by strong capital levels, earnings strength and solid liquidity, USB is expected to sustain its capital distribution activities and continue enhancing shareholder value. The planned dividend increase and significant remaining share repurchase capacity reflect management's confidence in the company's financial position and long-term growth prospects.

Other Firms Set to Raise Dividends After 2026 Stress TestSome other participants from the stress test that are enhancing capital distribution plans following the results are Wells Fargo (WFC - Free Report) and Goldman Sachs (GS - Free Report) .

Wells Fargo intends to raise its third-quarter 2026 common stock dividend by 11% to 50 cents per share from 45 cents, subject to board approval.  Goldman Sachs plans to increase its quarterly common dividend by 11% to $5 per share from $4.50 beginning July 1, 2026, subject to approval at its scheduled third-quarter board meeting.

USB’s Price Performance and Zacks RankOver the past six months, shares of US Bancorp have rallied 9.3% compared with the industry’s growth of 12.5%.

Price Performance
Image Source: Zacks Investment Research

Currently, the company carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.