US Bancorp Depositary Shares (USB-PS) delivered a resilient Q3 2024 performance characterized by a solid rise in net interest income and margin expansion, supported by disciplined deposit pricing and asset mix post a 50 bp Federal Reserve rate cut. Diluted EPS reached $1.03 with total net revenue of $6.9 billion, reflecting strength in fee-based businesses and ongoing expense discipline. Management highlighted a 7 bp QoQ NIM expansion to 2.74% and a 2.8% QoQ increase in taxable equivalent net interest income to roughly $4.17 billion, underscoring the benefits of asset repricing, card-related momentum, and portfolio actions. The quarter also featured $119 million of after-tax net security losses from securities rebalancing, partially offset by tax benefits, and a continued focus on liquidity, capital accretion, and risk management.
The balance sheet remained robust: common equity tier 1 (CET1) at 10.5% (up 20 bps QoQ), tangible book value per share at $24.71 (up 6.7% QoQ; +18.5% YoY), and a well-capitalized liquidity position. Asset quality held steady, with an NCO ratio of 0.60% and NPA ratio around 0.49% of loans and real estate, while the allowance for credit losses stood at $7.9 billion (2.1% of period-end loans).
Guidance reinforces a constructive 2024 close and an aspirational 2025 path: fourth-quarter net interest income is expected to be relatively stable versus the current quarter, with full-year 2024 NII at the high end of the $16.1–$16.4 billion range. Non-interest income is projected to grow in the mid-single digits for the year, while non-interest expense is guided to about $16.8 billion. Management signaled ongoing capital accretion of roughly 20–25 basis points per quarter and a modest near-term share repurchase program. The bank intends to pursue organic growth opportunities, deepen client relationships, and advance digital/payments initiatives (including Southeast expansion and partnerships) while deemphasizing large-bank M&A given current market conditions. Investors should monitor rate cuts' continuation, deposit pricing dynamics, loan growth, and the pace of operating leverage expansion into 2025.