U.S. Bancorp (USB) Bundle
A Brief History of U.S. Bancorp
Company Overview
U.S. Bancorp, headquartered in Minneapolis, Minnesota, is the parent company of U.S. Bank National Association, the fifth-largest commercial bank in the United States. As of September 30, 2024, U.S. Bancorp reported total assets of approximately $686.5 billion, marking a 3.5% increase from $663.5 billion at December 31, 2023.
Financial Performance
For the third quarter of 2024, U.S. Bancorp posted a net income of $1.7 billion, or $1.03 per diluted common share, compared to $1.5 billion, or $0.91 per diluted common share, for the same quarter in 2023. The company's return on average assets and return on average common equity were 1.03% and 12.4%, respectively.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income | $1.7 billion | $1.5 billion |
| Earnings per Share | $1.03 | $0.91 |
| Return on Assets | 1.03% | 0.91% |
| Return on Common Equity | 12.4% | 11.9% |
Balance Sheet Highlights
As of September 30, 2024, U.S. Bancorp's total shareholders' equity stood at $58.9 billion, up from $55.3 billion at December 31, 2023. The company's total deposits increased to $521.1 billion, a 1.7% growth from $512.3 billion.
| Balance Sheet Item | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Assets | $686.5 billion | $663.5 billion |
| Total Shareholders' Equity | $58.9 billion | $55.3 billion |
| Total Deposits | $521.1 billion | $512.3 billion |
| Long-term Debt | $54.8 billion | $51.5 billion |
Allowance for Credit Losses
As of September 30, 2024, U.S. Bancorp's allowance for credit losses was $7.9 billion, reflecting a 1.1% increase from $7.8 billion at December 31, 2023. This increase was primarily driven by credit migration in consumer and small business portfolios.
Economic Factors and Forecasts
The company considers various economic conditions in estimating the allowance for credit losses, including projected GDP growth and unemployment rates. As of September 30, 2024, the projected U.S. unemployment rate was 4.2%, up from 4.0% at December 31, 2023.
| Economic Indicator | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Unemployment Rate | 4.2% | 4.0% |
| Projected GDP Growth | 2.2% | 1.1% |
Recent Developments
U.S. Bancorp continues to monitor economic uncertainties related to interest rates and inflation, which may impact the financial strength of borrowers. The company has maintained a strong capital position, with a common equity tier 1 capital ratio of 10.5% as of September 30, 2024.
A Who Owns U.S. Bancorp (USB)
Major Shareholders
As of 2024, U.S. Bancorp (USB) has a diverse ownership structure comprising institutional investors, mutual funds, and individual shareholders. The largest shareholders include:
| Shareholder Type | Shareholder Name | Percentage Owned | Number of Shares |
|---|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 8.3% | 130.8 million |
| Institutional Investor | BlackRock, Inc. | 7.1% | 113.4 million |
| Institutional Investor | State Street Corporation | 4.5% | 72.3 million |
| Mutual Fund | Fidelity Investments | 4.0% | 63.6 million |
| Individual Investor | Andrew J. Cecere (CEO) | 0.1% | 1.5 million |
Institutional Ownership
Institutional investors hold a significant portion of U.S. Bancorp's shares, which provides stability and influences corporate governance. As of September 30, 2024, institutional ownership stood at approximately 75% of total shares outstanding.
| Institution | Shares Held | Percentage of Total Shares |
|---|---|---|
| The Vanguard Group | 130.8 million | 8.3% |
| BlackRock, Inc. | 113.4 million | 7.1% |
| State Street Corporation | 72.3 million | 4.5% |
| Fidelity Investments | 63.6 million | 4.0% |
| Other Institutions | Approximately 60% of total shares | Approximately 60% |
Recent Shareholder Changes
In 2024, U.S. Bancorp experienced changes in its shareholder composition, with an increase in institutional ownership as retail investors adjusted their positions. The following table summarizes the changes in major shareholder percentages over the past year:
| Shareholder | 2023 Ownership % | 2024 Ownership % | Change % |
|---|---|---|---|
| The Vanguard Group | 8.0% | 8.3% | +0.3% |
| BlackRock, Inc. | 6.9% | 7.1% | +0.2% |
| State Street Corporation | 4.3% | 4.5% | +0.2% |
| Fidelity Investments | 3.9% | 4.0% | +0.1% |
Market Performance and Share Value
As of September 30, 2024, U.S. Bancorp's stock price has fluctuated, reflecting broader market trends and internal performance metrics. The following table illustrates key financial metrics relevant to shareholder value:
| Metric | Value |
|---|---|
| Current Share Price | $45.73 |
| Market Capitalization | $72.1 billion |
| Dividend Yield | 3.3% |
| Earnings Per Share (EPS) | $2.77 |
| Return on Average Equity (ROE) | 11.6% |
Conclusion on Ownership Dynamics
U.S. Bancorp's ownership is characterized by a strong presence of institutional investors, which significantly influences its governance and strategic direction. The company’s performance metrics continue to attract investors, maintaining a robust market position as of 2024.
U.S. Bancorp (USB) Mission Statement
Overview of Mission Statement
The mission statement of U.S. Bancorp emphasizes the company’s commitment to providing exceptional customer service, fostering a culture of inclusivity, and driving sustainable growth while maintaining robust risk management practices.
Financial Performance Metrics
In 2024, U.S. Bancorp reported significant financial metrics that reflect its operational performance and alignment with its mission. Key figures include:
| Metric | 2024 | 2023 |
|---|---|---|
| Net Income (in billions) | $4.636 | $4.582 |
| Earnings per Share (EPS) | $2.77 | $2.79 |
| Return on Average Assets | 0.94% | 0.92% |
| Return on Average Common Equity | 11.6% | 12.3% |
| Total Assets (in billions) | $686.469 | $663.491 |
| Total Deposits (in billions) | $521.131 | $512.312 |
Revenue Breakdown
U.S. Bancorp's revenue streams are diversified across various segments, aligning with its mission to serve different customer needs effectively.
| Segment | Net Revenue (in millions) | Year-over-Year Change (%) |
|---|---|---|
| Consumer and Business Banking | $5,737 | -14.8% |
| Wealth, Corporate, and Institutional Banking | $5,711 | -2.9% |
| Payment Services | $2,102 | 8.7% |
Noninterest Income and Expenses
U.S. Bancorp's noninterest income and expense management reflect its dedication to operational efficiency as part of its mission.
| Item | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Total Noninterest Income | $8,213 | $7,997 |
| Total Noninterest Expense | $12,877 | $13,654 |
| Efficiency Ratio | 62.5% | 63.8% |
Risk Management Framework
U.S. Bancorp's mission includes a strong emphasis on risk management, ensuring that all business lines adhere to established risk appetite statements.
The company reported an allowance for credit losses of $7.927 billion as of September 30, 2024, indicating its proactive approach to credit risk management.
Conclusion of Financial Data
As of September 30, 2024, U.S. Bancorp's total shareholders' equity stood at $58.859 billion, reinforcing its financial stability and capacity to fulfill its mission.
How U.S. Bancorp (USB) Works
Financial Overview
As of September 30, 2024, U.S. Bancorp reported net income attributable to the company of $4.6 billion, or $2.77 per diluted common share. This reflects a slight decrease from $4.6 billion, or $2.79 per diluted common share, for the same period in 2023. The return on average assets was 0.94% and return on average common equity was 11.6%, compared to 0.92% and 12.3% in the previous year.
Revenue Breakdown
Total net revenue for the first nine months of 2024 was $12.2 billion, showing a decrease of 4.4% compared to the same period in 2023. This was influenced by an 8.6% decline in net interest income, which was partially offset by a 2.7% increase in noninterest income.
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Net Income | $4.6 billion | $4.6 billion | 0.0% |
| Net Interest Income | $12.1 billion | $13.3 billion | -8.6% |
| Noninterest Income | $8.2 billion | $8.0 billion | 2.7% |
| Total Net Revenue | $20.6 billion | $21.4 billion | -3.7% |
Loan Portfolio and Asset Quality
As of September 30, 2024, U.S. Bancorp's loan portfolio totaled $374.2 billion, reflecting a marginal increase from $373.8 billion at the end of 2023. The residential mortgage segment increased by $2.5 billion, while commercial real estate loans decreased by $2.8 billion.
| Loan Type | Amount (in billions) | Change (%) |
|---|---|---|
| Residential Mortgages | $116.6 | +2.2% |
| Commercial Loans | $132.7 | +1.3% |
| Credit Card Loans | $28.4 | +1.7% |
| Commercial Real Estate Loans | $52.3 | -5.3% |
Expenses and Efficiency
Noninterest expenses for the first nine months of 2024 were $12.9 billion, a decrease of 5.7% from $13.7 billion in the same period of 2023. The efficiency ratio improved to 60.2% compared to 64.4% in the previous year.
| Expense Type | 2024 (in millions) | 2023 (in millions) | Change (%) |
|---|---|---|---|
| Compensation and Employee Benefits | $7,947 | $7,907 | 0.5% |
| Net Occupancy and Equipment | $929 | $950 | -2.2% |
| Professional Services | $356 | $402 | -11.4% |
| Total Noninterest Expense | $12,877 | $13,654 | -5.7% |
Capital Ratios
U.S. Bancorp maintained a Common Equity Tier 1 capital ratio of 10.5% as of September 30, 2024, compared to 9.9% at the end of 2023. The Tier 1 capital ratio was 12.2%, and the total risk-based capital ratio was 14.2%.
| Capital Ratio | 2024 | 2023 |
|---|---|---|
| Common Equity Tier 1 Capital Ratio | 10.5% | 9.9% |
| Tier 1 Capital Ratio | 12.2% | 11.5% |
| Total Risk-Based Capital Ratio | 14.2% | 13.7% |
Provision for Credit Losses
The provision for credit losses was $1.7 billion for the first nine months of 2024, reflecting an increase compared to $1.5 billion for the same period in 2023. The allowance for credit losses was $7.9 billion as of September 30, 2024, up from $7.8 billion at the end of 2023.
| Metric | 2024 (in billions) | 2023 (in billions) |
|---|---|---|
| Provision for Credit Losses | $1.7 | $1.5 |
| Allowance for Credit Losses | $7.9 | $7.8 |
How U.S. Bancorp (USB) Makes Money
Overview of Revenue Sources
U.S. Bancorp generates revenue primarily through two main avenues: net interest income and noninterest income. As of the first nine months of 2024, total net revenue was reported at $20.4 billion, reflecting a decrease from the previous year's $21.4 billion.
| Revenue Source | 2024 (9 months) | 2023 (9 months) | Percent Change |
|---|---|---|---|
| Net Interest Income | $12.2 billion | $13.4 billion | -8.6% |
| Noninterest Income | $8.2 billion | $7.9 billion | 3.8% |
| Total Net Revenue | $20.4 billion | $21.4 billion | -4.7% |
Net Interest Income
Net interest income is derived from the difference between interest earned on loans and interest paid on deposits. In the third quarter of 2024, net interest income was reported at $4.2 billion, down from $4.5 billion in the same quarter of 2023.
The decrease in net interest income in 2024 has been attributed to higher interest rates affecting deposit pricing and mix, which led to an overall net interest margin of 2.74% for the first nine months of 2024, compared to 2.94% in 2023.
Noninterest Income
Noninterest income includes various fees and service charges, which have shown resilience despite overall revenue challenges. The major categories contributing to noninterest income include:
| Noninterest Income Component | 2024 (9 months) | 2023 (9 months) | Percent Change |
|---|---|---|---|
| Trust and Investment Management Fees | $1.96 billion | $1.84 billion | 6.5% |
| Service Charges | $939 million | $982 million | -4.4% |
| Mortgage Banking Revenue | $511 million | $403 million | 26.8% |
| Commercial Products Revenue | $1.16 billion | $1.05 billion | 10.8% |
| Card Revenue | $1.25 billion | $1.19 billion | 5.0% |
Business Segments
U.S. Bancorp operates through several key segments, each contributing to its overall financial performance. The performance of these segments for the first nine months of 2024 is summarized below:
| Segment | Net Income (2024) | Net Income (2023) | Percent Change |
|---|---|---|---|
| Wealth, Corporate, Commercial and Institutional Banking | $3.47 billion | $3.50 billion | -0.9% |
| Consumer and Business Banking | $1.42 billion | $2.04 billion | -30.3% |
| Payment Services | $792 million | $867 million | -8.7% |
Expense Management
Noninterest expenses are a significant component of U.S. Bancorp's financials, impacting its profitability. For the first nine months of 2024, noninterest expense was $12.9 billion, a decrease compared to $13.7 billion in the previous year.
The breakdown of major noninterest expenses for 2024 is as follows:
| Expense Category | 2024 (9 months) | 2023 (9 months) | Percent Change |
|---|---|---|---|
| Compensation and Employee Benefits | $7.95 billion | $7.91 billion | 0.5% |
| Technology and Communications | $1.54 billion | $1.54 billion | 0.3% |
| Marketing and Business Development | $459 million | $420 million | 9.3% |
| Professional Services | $356 million | $402 million | -11.4% |
Credit Loss Provisioning
U.S. Bancorp has seen fluctuations in its provision for credit losses, which for the first nine months of 2024 stood at $1.68 billion, compared to $1.76 billion in the same period of 2023. The increase in net charge-offs was a contributing factor, with $1.6 billion in charge-offs reported in 2024, up from $1.4 billion in 2023.
Conclusion of Financial Performance
As of the third quarter of 2024, U.S. Bancorp's total assets were $664.6 billion, with total deposits amounting to $521.1 billion. The company continues to adapt its strategies in response to changing market conditions and economic factors.
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Updated on 16 Nov 2024
Resources:
- U.S. Bancorp (USB) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of U.S. Bancorp (USB)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View U.S. Bancorp (USB)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.