USB

Looking back on diversified banks stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including U.S. Bancorp (NYSE:USB) and its peers. At their core, diversified banks take in deposits and engage in various forms of lending, which means revenue is generated through interest rate spreads (difference between loan and deposit rates) and fees. Other revenue comes from adjacent services such as wealth management, card and account fees, and products such as annuities. These institutions benefit from rising interest rates that improve NIMs (net interest margins), digital transformation reducing operational costs, and expanding wealth management services as populations age. However, they face headwinds including fintech competition disrupting traditional models (how disruptive is crypto?), stringent regulatory requirements increasing compliance costs, and cybersecurity threats requiring substantial technology investments. Economic downturns also pose risks through potential loan defaults and compressed margins during accommodative monetary policy periods. The 7 diversified banks stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 4.6%. In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results. With roots dating back to 1863 and a presence across 26 states primarily in the Midwest and West, U.S. Bancorp (NYSE:USB) is one of America's largest banks providing lending, deposit services, wealth management, payment processing, and merchant services to individuals and businesses. U.S. Bancorp reported revenues of $7.76 billion, up 9.9% year on year. This print exceeded analysts’ expectations by 2.1%. Despite the top-line beat, it was still a mixed quarter for the company with net interest income in line with analysts’ estimates but a miss of analysts’ tangible book value per share estimates. The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $62.53. Is now the time to buy U.S. Bancorp? Access our full analysis of the earnings results here, it’s free. With operations in nearly 160 countries and a history dating back to 1812, Citigroup (NYSE:C) is a global financial services company that provides banking, investment, wealth management, and payment solutions to consumers, corporations, and governments. Citigroup reported revenues of $24.79 billion, up 14.3% year on year, outperforming analysts’ expectations by 4.5%. The business had an exceptional quarter with an impressive beat of analysts’ net interest income estimates. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 5.9% since reporting. It currently trades at $132.45. Is now the time to buy Citigroup? Access our full analysis of the earnings results here, it’s free. Born from the 2019 merger of BB&T and SunTrust in one of the largest banking combinations since the 2008 financial crisis, Truist Financial (NYSE:TFC) is a bank holding company that offers a wide range of financial services including consumer and commercial banking, wealth management, insurance, and lending solutions. Truist Financial reported revenues of $5.31 billion, up 5.1% year on year, exceeding analysts’ expectations by 1.5%. Still, it was a mixed quarter as it posted a miss of analysts’ net interest income estimates. Truist Financial delivered the weakest performance against analyst estimates and slowest revenue growth among its peers. As expected, the stock is down 4.9% since the results and currently trades at $50.65. Read our full analysis of Truist Financial’s results here. Founded during the California Gold Rush in 1852 to provide banking and express delivery services to miners and merchants, Wells Fargo (NYSE:WFC) is a diversified financial services company that provides banking, lending, investment, and wealth management services to individuals and businesses. Wells Fargo reported revenues of $22.7 billion, up 8.6% year on year. This number topped analysts’ expectations by 3.9%. Overall, it was a very strong quarter as it also logged a beat of analysts’ EPS and tangible book value per share estimates. The stock is down 1.3% since reporting and currently trades at $86.54. Read our full, actionable report on Wells Fargo here, it’s free. Tracing its roots back to 1799 when its earliest predecessor was founded by Aaron Burr, JPMorgan Chase (NYSE:JPM) is a leading financial services company offering investment banking, consumer banking, commercial banking, and asset management services globally. JPMorgan Chase reported revenues of $58.02 billion, up 27% year on year. This print beat analysts’ expectations by 13%. It was a strong quarter as it also recorded a narrow beat of analysts’ tangible book value per share estimates and a beat of analysts’ EPS estimates. JPMorgan Chase achieved the biggest analyst estimate beat and fastest revenue growth of the whole group. The stock is up 6.9% since reporting and currently trades at $357.57. Read our full, actionable report on JPMorgan Chase here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

U.S. Bancorp trades at $62.69 and has moved in lockstep with the market. Its shares have returned 14.7% over the last six months while the S&P 500 has gained 11.7%. Is now the time to buy U.S. Bancorp, or should you be careful about including it in your portfolio? See what our analysts have to say in our full research report, it’s free. We’re sitting this one out for now. Here are three reasons you should be careful with USB, plus one stock we’d rather own. While banks generate revenue from multiple sources, investors view net interest income as a cornerstone — its predictable, recurring characteristics stand in sharp contrast to the volatility of one-time fees. U.S. Bancorp’s net interest income has grown at a 6.4% annualized rate over the last five years, worse than the broader banking industry and in line with its total revenue. Its growth was driven by both an increase in its outstanding loans and net interest margin, which represents how much a bank earns in relation to its outstanding loan book. Net interest margin (NIM) represents the unit economics of a bank by measuring the profitability of its interest-bearing assets relative to its interest-bearing liabilities. It’s a fundamental metric that investors use to assess lending premiums and returns. Over the past two years, we can see that U.S. Bancorp’s net interest margin averaged a weak 2.7%, reflecting its high servicing and capital costs. Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions. U.S. Bancorp’s EPS grew at a weak 1.4% compounded annual growth rate over the last five years, lower than its 5.4% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded. U.S. Bancorp isn’t a terrible business, but it doesn’t pass our quality test. That said, the stock currently trades at 1.5× forward P/B (or $62.69 per share). Investors with a higher risk tolerance might like the company, but we think the potential downside is too great. We’re pretty confident there are more exciting stocks to buy at the moment. We’d recommend looking at the most dominant software business in the world. WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.

DOW yields 4.45% after halving its dividend, and USB boosts its 3.33% yield as quarterly EPS climbed 22% year over year. Target's 50-year dividend streak continues, with digital comps up 9% and Marketplace GMV surging 40% funding future payout increases. All three stocks trade at forward P/E multiples at or below their trailing multiples, signaling analysts expect earnings growth to justify today's prices. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Target didn't make the cut. Grab the names FREE today. Wall Street loves a stock that gets cheaper the further you look out. Three NYSE-listed dividend payers currently fit that setup: their forward price-to-earnings multiples sit at or below their trailing multiples, meaning analysts expect earnings power to grow into today's price. The clearest example is Dow, which carries a forward P/E of 12 against a trailing multiple that is effectively unmeasurable because trailing EPS is negative. Here is how the income case stacks up for all three. Dow (NYSE:DOW) pays a quarterly dividend of $0.35 for an annual yield of 4.45%. Shares trade at a forward P/E of 12, well below where trailing earnings can support a multiple given a diluted TTM EPS of -$1.76. Dividend safety can be a real sticking point here. Dow cut its quarterly payout from $0.70 to $0.35 beginning with the August 29, 2025 ex-date, so the current level reflects a reset, not a streak. What has improved is coverage: Q2 2026 net sales of $12.1 billion rose 20% year over year, operating EBITDA reached $2.3 billion, and free cash flow was $692 million against $253 million returned via dividends. Management is guiding to roughly $1.7 billion of Q3 EBITDA and more than $1.3 billion of self-help benefits this year, with approximately $14 billion of total available liquidity and no substantive debt maturities until 2029. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Target didn't make the cut. Grab the names FREE today. For the bull case, a lower payout is a healthier payout, and Transform to Outperform is targeting a $2 billion opportunity by the end of next year that should widen dividend coverage as polyethylene margins normalize. On the other hand the risk is relatively straightforward: Dow is a global chemicals cyclical facing industry overcapacity and softer North American polyethylene pricing, so another leg down in the cycle would test the reset payout again. U.S. Bancorp (NYSE:USB) yields 3.33% on a $0.52 quarterly dividend, and trades at a forward P/E of 12 versus a trailing P/E of 12. Investors are paying slightly less for next year's earnings than for the last twelve months. Coverage looks solid. Trailing diluted EPS is $5.04 against a $2.08 annualized dividend, leaving room to grow the payout, which is exactly what management is doing. The Q3 2025 dividend rose from $0.50 to $0.52, and a further roughly 4% increase is planned for Q3 2026 pending board approval. Second-quarter fundamentals support that: EPS of $1.35 was up about 22% year over year, net interest income of $4.4 billion grew 7.5%, the CET1 ratio stood at 10.8%, and management sees a path toward a 3% net interest margin next year. For income investors, USB is the classic combination: a growing dividend, a payout ratio comfortably below half of EPS, and a business whose return on tangible common equity of 18.7% supports continued increases. The caveat here is credit with commercial real estate and office nonperforming loans remaining a watch item. Also, the $160 million reserve build tied to the Amazon small-business portfolio is a reminder that new balance-sheet exposure comes with new provisioning. Target (NYSE:TGT) yields 2.79% on a $1.16 quarterly dividend, and trades at a forward P/E of 17 versus a trailing P/E of 17. The gap is narrow, but it points in the right direction as earnings recover. The dividend track record is the anchor. Management pointed on the Q2 call to "our more than 50-year record of annual increases" and is targeting a 40% payout ratio over time. The recent bump from $1.14 to $1.16 per quarter continues a ladder of hikes going back years. Coverage is comfortable: trailing diluted EPS of $9.64 supports a $4.56 annualized dividend, and Target guided FY2026 EPS to a range of $9.90 to $10.90. FY25 operating cash flow was $6.56 billion, and Target paid $518 million in Q2 dividends while keeping capex funded. Traffic rose 3.6% in Q2, digital comps grew 8.7%, and higher-margin businesses like Roundel grew nearly 20% and Target Plus Marketplace GMV grew more than 40%, which is exactly the mix a dividend investor wants funding future raises. A 50-plus-year streak puts Target in rare company, and we ranked ten of those Dividend Kings by valuation in a free report here. The risk is that the $1.65 per share Q2 benefit from IEEPA tariff refunds is one-time, and management flagged that home and apparel recovery will extend into 2027 and beyond. Each of these three names shares the same setup: forward earnings support the current dividend more comfortably than trailing results do. Dow is the highest-yielding and most cyclical, rebuilding coverage after a payout reset. U.S. Bancorp offers the cleanest earnings growth story with a rising dividend on a mid-teens ROTCE. Target brings the deepest dividend history and a multiple that stops getting more expensive as EPS recovers. Investors focused on income should weight the mix by how much cyclicality they can tolerate to earn the extra yield. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Target didn't make the cut. Grab the names FREE today. Contact [email protected] for any questions or corrections.

Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St. U.S. Bancorp (USB) has just paired strong second quarter results with higher 2026 earnings guidance and ongoing bond issuance. This combination is drawing fresh attention to the stock’s recent move. See our latest analysis for U.S. Bancorp. At a share price of $63.49, U.S. Bancorp’s recent move has come after a steady run, with a 30‑day share price return of 4.24% and a 1‑year total shareholder return of 43.24%. This suggests that momentum has been building around the raised 2026 guidance and ongoing bond issuance. If this mix of earnings momentum and capital markets activity has your attention, it can be helpful to scan for other banks with similar balance sheet strength using our solid balance sheet and fundamentals stocks screener (49 results) For investors watching U.S. Bancorp after its recent jump and higher 2026 guidance, the choice is clear: Does the current valuation already capture that optimism, or is there still a margin that rewards getting in now instead of waiting? U.S. Bancorp last closed at $63.49, while the most followed narrative anchors fair value at $58.09. That gap is small enough that the underlying thesis matters more than the headline number. Read the complete narrative. Want to see what sits behind that slightly lower fair value for U.S. Bancorp? The narrative leans on specific revenue assumptions, margin targets and a future earnings multiple that together frame where this stock “should” trade. The full story is in how those moving parts fit with the bank’s current earnings power and guidance. Result: Fair Value of $58.09 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, U.S. Bancorp still faces risks if cost savings from the Fidelity transition underwhelm or if revenue growth assumptions behind that 9.3% premium prove optimistic. Find out about the key risks to this U.S. Bancorp narrative. The user narrative flags U.S. Bancorp as 9.3% overvalued at $63.49 versus a $58.09 fair value. The company’s own SWS DCF model points in the opposite direction, with U.S. Bancorp trading at a 37.3% discount to an estimated future cash flow value of $101.24. For you, that raises a clear question: Which set of assumptions feels more realistic for how this bank can convert its current earnings profile into long term cash flows? Look into how the SWS DCF model arrives at its fair value. Given the mixed signals around U.S. Bancorp’s valuation, it makes sense to look at the full picture of risks and rewards for yourself. To weigh both sides more clearly and see how other investors are thinking about the trade off, review the 4 key rewards and 1 important warning sign If U.S. Bancorp has sharpened your focus on quality, do not stop here. Broaden your watchlist now so you are not reacting after the next move. Target stable income by reviewing companies screened as potential 8 dividend fortresses that may appeal if you value consistent cash returns from your portfolio. Hunt for potential upside with a curated set of screener containing 20 high quality undiscovered gems that could sit under the radar yet still meet solid fundamental checks. Prioritise resilience by assessing 84 resilient stocks with low risk scores that score well on risk metrics and may help balance out more volatile holdings. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include USB. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Thursday, July 16, 2026, at 8:00 a.m. ET Chairman and Chief Executive Officer - Gunjan Kedia Vice Chair and Chief Financial Officer - John Stern Director of Investor Relations - Brian Mauney Operator: Welcome to the U.S. Bancorp second quarter 2026 earnings conference call. Following a review of the results, there will be a formal question and answer session. If you would like to ask a question, please press star then one on your phone. If you wish to withdraw your question, please press star then one again. This call will be recorded and available for replay beginning today at approximately 10:00 A.M. Central Time. I will now turn the conference over to Brian Mauney, Director of Investor Relations for U.S. Bancorp. Brian Mauney: Thank you, Krista, good morning, everyone. Today I'm joined by our Chairman and Chief Executive Officer, Gunjan Kedia, and Vice Chair and Chief Financial Officer, John Stern. In a moment, Gunjan and John will be referencing a slide presentation together with their prepared remarks. A copy of the presentation, our press release, and supplemental analyst schedules can be found on our website at ir.usbank.com. Please note that any forward-looking statements made during today's call are subject to risk and uncertainty. Factors that could materially change our current forward-looking assumptions are described on page two of today's earnings presentation, our press release, and reports on file with the SEC. Following our prepared remarks, Gunjan and John will be happy to take questions that you have. I will now turn the call over to Gunjan. Gunjan Kedia: Thank you, Brian, and welcome to our team. Good morning, everyone. Beginning on Slide 3, this quarter, we delivered earnings per share of $1.35, an increase of approximately 22% year-over-year. Record net revenue of $7.7 billion highlights the strength of our diversified business mix and improved execution. Results in the quarter reflect strong progress against our three strategic priorities. Revenue growth accelerated to 10.1% year-over-year. Expense discipline remains a hallmark for us, with 400 basis points of positive operating leverage this quarter. Our payments transformation is differentiating us and driving innovative client value propositions, especially for the Gen Z and younger generations. Importantly, we delivered these results while maintaining strong returns, credit performance, and capital levels. John will provide more details on our financial performance in his opening remarks. Turning to Slide 4. Fees rose to 44% of total revenue this quarter, with both scale and quality of our fee mix driving high returns, stable earnings, and enduring relationships. Fee growth has steadily accelerated; this is an important priority for us. While fee growth drives higher expenses, productivity initiatives helped improve our efficiency ratio and increased return on average assets. Moving to Slide 5. The successful completion of the BTIG acquisition marks a significant milestone in our strategic build-out of capital markets. In its first month as part of U.S. Bancorp, BTIG generated approximately $98 million of revenue, marking the strongest monthly revenue performance in BTIG's history and outpacing our earlier expectations from the deal. As integration progresses, we expect to capture more long-term strategic benefits of the combination. Our aim is to grow capital markets to more than 10% of total company revenue over time. On Slide 6, our payments franchise remains an important source of diversification and client engagement across the company. Total payment services revenue increased 5.7% year-over-year, compared with 4.7% growth in the prior year quarter. While merchant processing growth slowed during the quarter, card issuing continued to perform well, and corporate payments saw a strong rebound driven by core demand and new business installations. We are increasingly managing these products holistically at the client segment level and investing to be competitive as this space evolves. Turning to Slide 7. Our consumer franchise is a source of strength for the company and an important driver of long-term relationships and lower cost deposits. Given the increased interest we have seen in this space recently, we are spotlighting the strategy for the consumer franchise. We serve nearly 13 million consumers through a combination of digital and physical distribution. With approximately 18% residing outside of our traditional branch footprint today. In addition, we serve approximately 7 million customers through our card, co-brand, Elan, and partner platforms. Our core products benefit greatly from this expanded scale. 42% of our consumer clients are now multi-service, up approximately two percentage points over the past two years. These relationships are more durable, generate higher return, and strengthen engagement over our franchise. Slide 8 highlights the core strategies of our consumer franchise. We are seeing strong momentum from differentiated offerings like Bank Smartly, which we introduced in 2024, with balances across Smartly checking and savings now exceeding $84 billion. We have more recently introduced a similar interconnected product suite for small business called Business Essentials. Our branch expansion is focused on densifying our presence in approximately 10 markets within our footprint that have high rates of household formation. We expect our annual investment in branches to increase from approximately $200 million historically to $300 million annually. Importantly, these strategies are delivering strong results and have now driven a third consecutive quarter of record consumer deposits. Let me now turn the call over to John. John Stern: Thanks, Gunjan, good morning, everyone. This was another strong quarter for us as we continue to execute against our strategic priorities. We delivered meaningful revenue and fee growth, significant positive operating leverage, and improved profitability metrics that are well within our medium-term target ranges. If you turn to Slide 9, I'll start with some highlights, followed by a discussion of trends for the second quarter. We reported earnings per common share of $1.35 and generated record net revenue of $7.7 billion, representing 10.1% growth year-over-year. This quarter, we continued to see strong loan growth in areas like C&I, commercial real estate, and card, reflecting steady client activity across the franchise. Meanwhile, fee income growth accelerated across most line items. Notably, this includes one month of BTIG. However, fee growth was still approximately 10% excluding BTIG. Average total assets increased 0.9% linked quarter to $695 billion. Key credit quality metrics improved both sequentially and year-over-year, reflecting a stable economic backdrop and the continued fortitude of our clients. As of June 30th, our tangible book value per common share eclipsed $30 and increased more than 13% on a year-over-year basis. Slide 10 provides our key performance metrics. ROA, ROTCE, efficiency ratio, and NIM all improved both sequentially and year-over-year as results of a disciplined execution. We delivered strong returns, which includes a return on tangible common equity of 18.7% and a return on average assets of 1.26%. The efficiency ratio improved to 57.1%. Slide 11 provides a balance sheet summary. Total average deposits grew 2.4% year-over-year and were flat linked quarter. Consumer deposits reached another record this quarter, driven by our Smartly flagship product. The offset was typical seasonality in our wholesale and investment services businesses. Average loans totaled $405 billion, up 7.1% from the prior year quarter and 3.0% from the prior quarter. Growth was broad-based in strategic categories such as C&I, credit card, and commercial real estate, which brings ancillary fees with them. Turning to Slide 12. Net interest income on a fully taxable equivalent basis totaled $4.4 billion, an increase of 7.5% on a year-over-year basis above the range we had previously guided to, driven by stronger loan dynamics during the quarter. On a sequential basis, net interest income increased by $96 million, or 2.2%, driven by loan growth, recent investment portfolio repositioning, and ongoing benefits from fixed asset repricing. Net interest margin improved two basis points sequentially to 2.79%. Slide 13 highlights fee revenue trends within non-interest income. Total fee revenue accelerated during the quarter, reflecting broad-based strength across our businesses. Total fee income increased 13.2% year-over-year, driven by strong performance in capital markets, trust and investment management, payments, and other institutional fee businesses. In June, BTIG contributed approximately $98 million of capital markets fee revenue. Excluding BTIG, fee revenue grew 9.9% year-over-year. Capital markets revenue excluding BTIG increased approximately 31% year-over-year, reflecting strong client activity across foreign exchange, syndications, and corporate bond underwriting. Moving to Slide 14. Non-interest expense totaled approximately $4.4 billion and included approximately $84 million related to BTIG. Excluding BTIG, expenses grew roughly 1.9% sequentially and 3.9% versus the prior year. The increase in core expense primarily reflected continued investments in technology and marketing as well as higher incentive compensations associated with this quarter's strong revenue performance. These increases were partially offset by ongoing expense discipline across the franchise. Turning to Slide 15. This quarter highlights our ability to improve profitability while continuing to grow the franchise. Over the past several quarters, we have meaningfully improved profitability, significantly reducing our efficiency ratio from its recent peak. We remain committed to meaningful positive operating leverage as we fully integrate and normalize BTIG. While disciplined expense management remains an important contributor, we are increasingly seeing revenue growth become a larger driver of earnings growth. That combination of improving top-line momentum and ongoing expense discipline resulted in a year-over-year EPS growth of more than 20% this quarter. We remain confident in our ability to sustain strong profitability while continuing to invest for future growth. Slide 16 highlights our credit quality performance, which continues to improve. Our ratio of non-performing assets to loans and other real estate of 0.33% improved five basis points from the previous quarter and 11 basis points from a year ago. The second quarter net charge-off ratio was 0.53%, decreasing three basis points sequentially. Meanwhile, our allowance for credit losses remained steady at $8 billion, or 1.94% of period and loans. Turning to Slide 17. As of June 30th, our common equity Tier 1 capital ratio was 10.8%, or 9.4% including AOCI. Strong earnings generation this quarter supported capital distributions, strong loan growth, and 12 basis points of impact from the BTIG acquisition this quarter. On Slide 18, we provide a comparison of our second quarter results to our previous guidance, provide third quarter guidance, and update our full year 2026 outlook. Excluding BTIG, second quarter net interest income and fee revenue exceeded previous guidance, while non-interest expense came in as expected. Turning to forward-looking guidance for the third quarter and full year 2026, both of which are inclusive of BTIG and recently announced partnerships. For the third quarter, we expect net interest income growth of 4%-6% on a fully taxable equivalent basis compared to the third quarter of 2025. Total fee revenue growth in the range of 12%-14% compared to the third quarter of 2025, with contribution from BTIG of roughly $200 million per quarter in the back half of the year. Non-interest expense growth of approximately 8% compared to the third quarter of 2025. Excluding BTIG, we would expect our core expense growth to be approximately 3.5%. Additionally, we expect to recognize approximately $160 million of reserve build related to the Amazon Small Business Portfolio purchase, which we anticipate will close in mid-August. For the full year 2026, we now expect total net revenue growth of 7%-9% compared to the prior year, or in the range of 5%-7% excluding BTIG, up from our prior range of 4%-6%. We expect to deliver approximately 200 basis points of positive operating leverage this year and more than 300 basis points excluding the impact from BTIG. Moving to Slide 19. Second quarter results represented another consecutive quarter operating within all of our medium-term target ranges. We are encouraged by the momentum across the franchise and remain confident in our ability to continue to build on these results to deliver consistent, sustainable returns over time. Let me now hand it back to Gunjan for closing remarks. Gunjan Kedia: Thank you, John. As we look ahead, our focus remains on sustaining the strong return profile of the company while accelerating growth. With resilient fundamentals, strong execution momentum, and an increasingly interconnected franchise, we believe we are well-positioned for the next phase of profitable growth and long-term value creation. With that, we will now open the call for your questions. Operator: Thank you. We will now begin the question-and-answer session. As a reminder, if you would like to ask a question, please press star, then the number one on your telephone keypad. We will pause for just a moment to compile that roster. We do ask that you limit yourself to one question and one follow-up. For any additional questions, please re-queue. Your first question comes from Erika Najarian with UBS. Erika Najarian: Hi. Good morning. Thank you for taking my questions. Gunjan and John, fully appreciate the revenue upgrade. I'm wondering if you could unpack maybe the path from 4% to 6%, to 5% to 7%, and perhaps separate the discussion with regards to the net interest income trajectory. Particularly how you're viewing net interest margin from here with deposit costs coming up a little bit in the quarter. I'm going to pause there because that's already a lot. John Stern: Sure. Good morning, Erika. Thanks for the question. Let me just start. We do expect, as I mentioned, the full year revenue guide to go up to 7% to 9%, or 5% to 7% excluding BTIG, which is better than where we started the year when we mentioned 4% to 6%. That just reflects a lot of broad-based growth that we just commented on in our opening comments there. You mentioned net interest income, and maybe just to talk through that a bit. We started the year expecting mid-single digits. I would continue to expect mid-single digits on net interest income. Just given the momentum that we've had in the first half of the year, I would just say that we expect to be north of 5% for the full year. Obviously, a lot can happen. I think in terms of net interest income and net interest margin in particular, we do expect that to grow over the course of the year, and that's reflected in the guide. The deposits, we think that nothing's really changed on that front from a competitive nature standpoint. We still feel really good about where we're moving here. Erika Najarian: Just as a follow-up, I've already fielded investor questions on positive operating leverage. It feels so silly to even ask this, but I've been getting asked about the squiggly 200 versus the 200 plus. Anyway, I guess just to frame it for us, from your prepared remarks, it sounds like the fee generation ex-BTIG is better, right? Clearly that John Stern: Yeah Erika Najarian: Comes with it higher expenses. Also, it seems like consensus has to frame BTIG with that higher efficiency ratio. I guess, is that a fair read of how positive operating leverage is tracking? It's because fees are driving the upside and thereby that comes with it with expenses. Further, just sorry to sort of slip another one in, the $98 million in a month is clearly better than the 200. Given the ECM sort of largesse that's happening in the industry, do you expect the pacing of BTIG contributions to be closer to $300 million this year? John Stern: Sure. A lot to unpack there, I think maybe I'll start on. You talked about positive operating leverage just to start. I would say that we're firmly committed to positive operating leverage. That is something we have said repeatedly since the investor day back in 2024. We've obviously have been focusing more and more on fees, and you see that in the guide. We do expect our fees overall to be low teens from a full year perspective. Just likely over four points of that is going to be on the BTIG side of the equation. I think in terms of the squiggly line, as you call it, versus the 300 basis points or more that we signal. With BTIG, within that $200 million that we anticipate per quarter, we assume a 15% contribution margin. There's also about $60 million of integration costs that will likely come in that's embedded and that we'll call out obviously as we move forward. We're firmly positioned for positive operating leverage. I think from a BTIG perspective, we're really excited about that acquisition and the new team that we have there. We do expect the contribution margin to improve over time. Gunjan Kedia: I'll just add, Erika, that we are very comfortable with our expense and productivity runway on our programs. Like John said, very committed to a healthy positive operating leverage on the core. Just a reminder here that between BTIG and the Amazon deal, we are installing more than $1 billion of run rate revenue over a very short period of time, and there's a fair amount of one-time cost that we are absorbing within the 300+ POL as well. Just a reassurance that we are both committed to it and very confident in our plans there. Erika Najarian: Thank you. Operator: Your next question comes from the line of John Pancari with Evercore ISI. Please go ahead. Gunjan Kedia: Morning, John. John Stern: Morning. John Pancari: You've put up some good numbers on the fee side, you've acknowledged that fee growth has steadily accelerated, we certainly saw upside this quarter in card and corporate payments. I know in corporate payments you acknowledged the rebound that you're seeing. Can you maybe just give us a little bit more color? Given this, what is that growth rate that you believe is likely as for the overall fee component for the year? Also, maybe can you talk through what are you seeing as the greatest drivers of this accelerating growth in the fee trend that is materialized and that you expect to continue to play out? What are the biggest contributors? Thanks. John Stern: Yeah, sure. I think, John, thanks. The biggest drivers, we've seen a nice turn on the corporate payment side, you called that out. I think we've alluded to this at the beginning of the year. We mentioned that we see a lot of won, but not yet installed business, that is certainly the case here. We're experiencing that. We have a lot of what used to be headwinds in this business this year at this time are now tailwinds. I think that along with the new business is helping. I would say on the card side, we're also seeing the same thing. We've been seeing a lot of great account growth. The fee revenue has been steadily increasing. We're going to get the Amazon book loaded here in mid-August, we anticipate. We think there's just a lot of momentum on the fee side of the equation there. Gunjan Kedia: John, I'll add, this is a very important part of our strategy. It's a defining feature of our banking franchise. We closed this quarter; we were at 44% fee revenue. That gives us enormous stability, both of earnings and depth in our relationship. We are building this four-legged stool of fees, which are very well diversified. It's the capital markets that's become very significant now, the payments franchise, which was always great. The trust and investment franchise has grown very nicely for us and has lots of tailwinds right now with the capital markets. The traditional consumer fees. We expect that the fee complex overall will outpace NII, at least in the near term, very healthy growth across the board on all fee categories. By design and strategy, we are very focused on that part of the business. John Pancari: Based on that, Gunjan. Gunjan Kedia: Yeah John Pancari: How would you characterize the year-over-year growth expectation on the fee side? Yeah, I know you said should outpace, but anyway. John Stern: Yeah John Pancari: If you can help us with that. John Stern: Sure. Yeah, we expect full year low teens on the fee side of the equation. That's going to include about four points. A little over four points will be BTIG-driven. Again, we assume $200 million per quarter on the back half of the year. Then inclusive, obviously, of the $100 that they did in June. That's how we think about it. As Gunjan said, it's strength in the capital markets, investment services, and payments that are really going to drive it. John Pancari: Yeah. Thank you. I know you gave that low teen detail before. Lastly, just around loans at the end. I want to see if you can give us a bit more detail on what you're seeing there as trends came in pretty solid for the quarter. Thanks. John Stern: On loans? Sure, yeah. On loan growth, a very strong quarter for us. The pipelines continue to look very good, particularly on the commercial and commercial real estate side. Commercial real estate saw some nice uptick this quarter. We continue to see that improve. It's in virtually all the categories that we talked about last quarter. Pretty much every category in the commercial side is green from a growth standpoint. Everything from large corporates down to small business and SBA loans and things of that variety. I know we talked about mid-single digit growth last time at this time. We anticipate to be through that. Of course, we have the Amazon, the $1.6 billion that we, as I mentioned, that will come online in the August timeframe. Excuse me. John Pancari: Got it. All right. Thanks for taking my questions, John. John Stern: Thank you. Operator: Your next question comes from the line of John McDonald with Truist Securities. Please go ahead. Gunjan Kedia: Morning, John. John McDonald: Thanks. Good morning. Thank you. Could you give us some color, John, on what you saw in terms of deposit trends this quarter and how you're thinking about the back half of the year in terms of deposit growth, costs, and mix? John Stern: Sure. Maybe just to start with the quarter. This is a pretty typical second quarter for us. I would say over long periods of time on the commercial side, we always see seasonal outflow, and that's a reflection of just the tax seasonality. We anticipated that we would have lower balances on the commercial side. We did see nice growth on the consumer side, and that's by design. We've been very much focused on growing our consumer deposits. As I look ahead, clearly, we've already, as we look at the trends here, starting in the third quarter, we've already made good progress on deposit growth. A lot of that just comes back over the course of late second quarter and into third for us. I would expect as loan growth continues to go, deposit growth will grow with some sort of parity there. I think from a deposit rate standpoint, I think you mentioned that as well. We're up a couple basis points this quarter. In terms of how we're looking at it going forward, that rate is going to be dependent on just how strong loan growth is. I think the stronger the loan growth is, potential rates might go up on that deposit side. We just anticipate some of that in our guidance as well. Those are kind of the puts and takes right now as I think about deposits. John McDonald: Okay. Just following up on that, could you remind us of the broader drivers of the NIM expansion story and your thoughts on getting into that 3% range next year that you've talked about on the NIM? John Stern: Yeah. Sure, absolutely. We continue to see a path on the 3% journey here at some point in 2027. Not much has changed really since I think the last time we talked here some time ago. It was good to see the NIM go up this quarter. We expect that to continue to progress. The positives, of course, are going to be on the asset mix side as well as just the continual fixed repricing. I think, John, what it's going to come down to in terms of the speed in which we go that way is going to be on the deposit side of the equation, as I just mentioned some points there. Also, the slope of the curve. Obviously, there's some talk of rate hikes and things like that. The hikes in and of themselves are not consequential. It's more, what's the shape of the curve after that? That's what we're going to be focused on as we move forward. John McDonald: Okay, great. Thank you. Operator: Your next question comes from the line of Ebrahim Poonawala with Bank of America. Please go ahead. Gunjan Kedia: Morning, Ebrahim. John Stern: Morning. Gunjan Kedia: Morning. I guess maybe one just big picture question on Slide 19. When we look at your returns for the second quarter and for the first half, like ROA, ROTCE, ROA in the midpoint of the guidance, maybe just talk to us. I mean, obviously all banks want to use a strong revenue backdrop to invest in the business. When you think about just if we can pick on the return on assets at 1.26%, the higher end of the guidance, 1.35%, how do you think about it? Do you think this should move towards that 1.35%, or are you happy operating at this midpoint? John Stern: Hey, Ebrahim. Thank you. First of all, we're pleased with where we're at this part of the journey. It's good to see that we're well established in our medium-term targets that we had talked to you about back in 2024. Yes, of course, our hope is and expectation is to continue to improve. That's where we want to go. We started at the beginning of the year or late last year, actually, at the lower end of the range. Not just ROA, but some of these other metrics as well. Our continual push is to continue to improve these metrics as we progress. Gunjan Kedia: Ebrahim, we think about it in waves. We published these medium-term targets at Investor Day in 2024. The first goal was to get into the ranges across the board. The metrics have been very thoughtfully selected to balance growth, productivity, and returns, which is how we think about the metrics. The first thing we made progress on was capital. You'll remember we were very low on capital coming out of the Union Bank acquisition. We're feeling very good about that, very ready for a Category II transition that's upcoming. Expenses was the next thing that we were able to very quickly make a difference on, then fee revenue growth, and right now we are very focused on NII expansion, which will help the ROA. Broadly speaking, move towards the right on the ranges is the way we are managing the bank. Got it. Maybe just on the capital front, maybe if we can revisit in terms of timing. You've talked about wanting to get to a 10% adjusted CET1 before we see a ramp-up in buybacks. Is that still the case? Beyond that, are there additional BTIGs out there in terms of small tuck-in deals that would make sense? John Stern: I'll start on the capital question. We've made tremendous progress over the last couple of years. We've grown capital over 30% just in those last two years, we think we're on the last lap certainly of capital build right now. Our first priority is going to be supporting loan growth. That's something that we clearly did this time along with BTIG, we're pleased to see our capital levels actually flatten and at the same time making progress in our Category II. Ebrahim, I would say that we would anticipate to increase the buybacks and glide into that 70%-75% range, which we're very committed to as we approach approximately that 10% level. This quarter we had $200 million of repurchases that was flat versus the prior quarter, we had a lot of loan growth and the BTIG acquisition. If we continue to see those sorts of opportunities, we'll pause for share repurchase or keep it at these particular levels. We intend to glide up into that level. Gunjan Kedia: Ebrahim, on your second question, are there other BTIGs? We do steadily look at a lot of smaller bolt-on deals. It would not be our expectation that we would need to do a bolt-on capital markets. BTIG brought equity trading and advisory businesses to complement our FIC business. We have a complete offering now. It's about 7% of our total revenue. That puts us roughly in line with our regional peers, but with a lot of headroom relative to G-SIBs. We think we have a nice platform to grow organically and get to the 10% revenue, which would really give us sort of the right portfolio mix. The broader question on the bolt-on, our thought process always is to create a very accretive, financially attractive way of creating localized scale in one or two of our products. We do look at those, and again, I think of them very much as organic growth because these are sort of tuck-in deals. I hope that answers your question. Yep. Super clear. Thank you so much. Operator: Your next question comes from the line of Mike Mayo with Wells Fargo. Please go ahead. Gunjan Kedia: Morning, Mike. Mike Mayo: Hi. I think the key phrase here is fee complex. You keep mentioning fees in many different ways. What's the output of all your plans here? Like fees over 50% or up to 50%. Then as a component of that, how do you plan to get that capital markets number higher, investing in legacy U.S. Bancorp or BTIG relates to cards, in terms of by the way, is Amazon in the guide for the year and then corporate payments? What's really the plan for the fee complex as a whole, and how does that overlay with your existing business relationships? Gunjan Kedia: Well, thank you, Mike. I do call it the fee complex, don't I? Because the quality and the mix is an important part of our, we don't want to be a single sort of business name. The four categories are very diversified with each other, and they are underpinned by some faster-growing markets. We would aspire to be in the higher 40s as a total percentage. We were at 45 at one point, if we can keep our efficiency ratio to the mid to the 55-57 range and grow fees at that level, I think it makes for a very enduring franchise. That's not just financially. We think about fees as the hooks that create enduring relationships that also bring high-quality deposits, both on the consumer side and the corporate side. The intent here is not just the business portfolio, but the consumer relationship being very deep and multi-product. The strategies are all anchored around each of those four big pillars. Having enough nourishment and enough investments to grow alongside the bank. I'll let John answer the questions in the outlook for CPS. John Stern: I would just maybe add to that, Gunjan. We talk a lot about here, leveraging the balance sheet, the growth that we have, either in the loan book, et cetera, to help with the fee categories, whether that is capital markets or investment services. That's why the fee complex is so important. We have a lot of different products that we can apply to clients that have balance sheet usage for us. We're really leveraging that component. Yes, the Amazon components is in the guide. We talked about $75 million-$85 million of revenue. A majority of that is in net interest income, so there'll be some split between NII and fees on that. Of course, just as a reminder, we anticipate $160 million reserve build that will occur with the closing that we anticipate to be mid-August. Mike Mayo: As far as how you intend to go from 7%-10% in capital markets as a percentage of revenues, will you be hiring more people through BTIG, or is it through legacy U.S. Bancorp or other means, or do you have in the back of your mind, maybe you will find a small bolt-on? Gunjan Kedia: Thank you for that. Yes, you did ask that. We are not anticipating a small bolt-on needed to get to the 10-ish percent. This is organic growth from just leveraging the relationship and the product capabilities on both sides. What we are seeing, Mike, even in the first month, and we're just getting started here, is the balance sheet that is already being deployed has room to earn some fee revenue just from the relationships we have. BTIG is being invited into the relationships we already have. The organic growth does not really anticipate a massive expansion of headcount. It's just cross-selling and getting a fair share of the fee revenue from the book, from a balance sheet that has been deployed against the commercial side. That's the plan, and we have some confidence that gets us to about 10% of the total revenue. Mike Mayo: All right. Thank you. Gunjan Kedia: Thank you, Mike. Operator: Your next question comes from the line of Ken Usdin with Autonomous Research. Please go ahead. Gunjan Kedia: Morning, Ken. John Stern: Morning. Ken Usdin: Hi, good morning. I was just wondering if I could just clean up a couple of these acquisition-related math things. First of all, I guess on BTIG, you mentioned you've got the $60 million of restructuring. That's all in the second half. Will that be the end of it? You see kind of like an improvement in the incremental margin post the end of the year as we go forward? John Stern: Yeah, Ken, that's right. $60 million would be just the merger-related items that we would anticipate this year. There'll be a tail or so, probably early 2027. We'll update you as we progress. Yes, the contribution margin we anticipate being the remainder of this year, kind of that 15%- Ken Usdin: Okay John Stern: for this business, we anticipate that to build out. I have 20% in my head, or how we're thinking about it right now, with hopeful room for improvement, that's how we're progressing. Ken Usdin: On BTIG, so they just did a $300 run rate in June. John Stern: Yeah Ken Usdin: As you mentioned, almost $100, but you're only building in $200 into the forward guide from here. Was there something extraordinary? Obviously, second quarter. John Stern: Yeah Ken Usdin: wasn't extraordinary for capital markets. I was just wondering, maybe you could just help us understand, what's a right run rate for that capital markets line, once we kind of get to the right place and fully run rate type of thing? John Stern: Yeah. Well, a couple things. Yeah, just to be clear, $200 per quarter. Ken Usdin: Right John Stern: is what we anticipate. I think there's some seasonality in the third and fourth. They had a record month in June. A lot of transactions. Could it go higher than 200? It could. Capital markets fees can swing and things of that nature. We'll see how that goes. Going back, I would just point back to Gunjan's comments she just made on, we're 7% of revenue right now, anticipating to get to 10. I think that's the right trajectory. We expect strong growth. Organically, the capital markets grew 30% both first and second quarter. I don't anticipate being that strong in the back half of the year, but it's still going to be strong. Based on everything we see and based on the new business and all the different pieces that we've been building on our legacy products, not to mention the BTIG synergies that we anticipate. That's what gives us all that positivity and momentum that we think for this business. Ken Usdin: Okay. The third one, thanks for mentioning the $75, $85 on Amazon. Just want to make clear again, that's an annualized number, would you expect that to be fully run rated in the fourth quarter? John Stern: Yeah. That's a per quarter number, that would be then, we would anticipate getting. Ken Usdin: Per quarter John Stern: approximately half of that for the third quarter, and then that would be fully in for the fourth quarter. Ken Usdin: Okay. That's a quarterly-- More like $300-ish on an annual perspective. John Stern: Yeah, that's right. Ken Usdin: Okay. Yeah. John Stern: Back to link all these things together, Gunjan mentioned of adding $1 billion. If we think about 200- Ken Usdin: Yep John Stern: per quarter and $75 million-$85 million for Amazon, that's going to be north of $1 billion for revenues that we're installing based on these acquisitions, which we're excited about. Ken Usdin: Got it. Yep. That's what I wanted to get through. Thank you, John. John Stern: Great. Operator: Your next question comes from the line of Gerard Cassidy with RBC Capital Markets. Please go ahead. Gunjan Kedia: Morning. Gerard Cassidy: Hi, Gunjan. Morning. Hi, John. Can you guys share with us the build-out of the consumer branches that you mentioned, Gunjan? I think you said you're going to spend $300 million up from $200 million. How much of that is for new branches and versus just rehabbing existing branches? Then second, how long does it take when you do build a new branch in your markets, does it take to reach breakeven and then to a profitability level that you're satisfied with? Gunjan Kedia: Yeah. Thank you, Gerard. We spotlighted that business because having sort of really worked on our expenses and fees last year, we are very focused now on the consumer deposit franchise in particular. These consumer relationships are increasingly driving card and our wealth business as well because we've gotten quite good at it. It's a very important part of our strategy as we look forward. Hence the higher investment into the branches. It's not a one-time step up. It's just something we have been gradually leaning into. For context, for the last 10-ish years now, we have been reshaping our branch network to go from what it was, which was a lot of Tier 3 markets, smaller service branches, many of them in-store locations, to modern technology-enabled multi-product hubs in attractive Tier 2-like markets. That's been the journey all along. We are at a point when the refurbishment part of our branch network is largely done, we are now leaning into new builds and a new growth focus. Our first set of focus is on densifying within our region. The returns on that investments are very quick because the brand is known, the customers are going back and forth from those geographies. We tend to arrive at our sort of attractive target numbers very quickly. When you inch out to brand-new locations, it's a slightly longer runway. That's why we look for a strategy where we've already planted a flag through our client centers, and those are important aspects for us as well. The client center houses our wealth teams, our commercial teams, our mortgage teams, increasingly small business, and they are also anchored around some of our partnership relationships. We would expect that for the next few years the focus will be on the densification. The returns are very good there on the investments, then the inch outs are more strategic in nature. Gerard Cassidy: I see. Gunjan, have you identified the number of branches per year over the next two or three years that you might be building? John Stern: Yeah, I mean, Gerard, we anticipate accelerating that. Part of this as well is we've been spending some time in how to drive the cost down of branch build-out, how we do it faster. That's all going to be incorporated. We don't have a specific number in mind. It's going to ramp though as we continue here. The densification, as Gunjan mentioned, that's kind of our first priority as the refurbishments have largely taken hold. Obviously, we'll have refurbishments ongoing. That's just kind of the care and feeding of the network that we want to make sure that we do. Also, it's important that we have the product set with the Smartly suite and the products we have now and the pricing models that we have associated with it. We have an area where we can equip the frontline branch folks with the tools to help us grow and drive down that breakeven time which is what we're really focused on. Gerard Cassidy: Very good. As a follow-up question, this may be tough to answer. We see in this country the benefits of the build-out of AI, both in data centers and all the capital expenditures that are being done. Have you guys been able to look at your second derivative exposures or what the benefits are that you might be seeing? John, I think you touched on your commercial loan growth was quite good across the different-sized companies. We've been asking on these calls what kind of impact is this having on the numbers, not just in lending, but BTIG's, probably volumes we saw with the big investment banks. The trading volumes were phenomenal in this quarter, and a lot of it had to do with the hyperscalers and the semiconductor stocks. Have you guys been able to, or have you started to look at what kind of presence is this new industry having on your business? Should it ever slow down, what it might do to the impact on some of the growth you're experiencing? John Stern: That's a good question, Gerard. I think there's more direct impact with the capital market space. I'll tell you, the very biggest headlines we may not be as involved in. There's a number of just activities that are going on with our clients across. I understand the AI, the build of all that, and how that certainly is helping the U.S. GDP. I think the way we talk to our clients, they are growing their businesses, and it's in all areas. It's in food and beverage, it's in media and technology, it's in power. Some of that clearly has more tangential to the AI build, others are not. I just think people are feeling very optimistic. They want to grow their business, and we're here to support them. I think those are the broad themes we think about right now. Gunjan Kedia: I would just add, Gerard, for us, the data center loans in particular are not very large in terms of on our balance sheet. Sentiment rebound from the pause with tariffs last year has been the story. We've heard it certainly in the Middle American footprint that we've had. A lot of people who had paused last year to say, "Where is all of this going?" are seeing a very resilient consumer and a lot of demand, and are beginning to lean into that in a fair way. It's more broad-based and healthier loan growth and loan demand than just a concentrated AI trade. You're right, we do try to look through the motivations behind the loan demand, and its quite healthy right now. Gerard Cassidy: Thank you. I appreciate the color. Operator: Your next question comes from the line of Manan Gosalia with Morgan Stanley. Please go ahead. Gunjan Kedia: Good morning. Manan Gosalia: Hi. Good morning. John Stern: Good morning. Manan Gosalia: Good morning. You mentioned that deposit rates might go up a little bit as loan growth is stronger. I guess the question is there a difference in how proactive you want to be here? We're hearing from several banks that loan growth has been a little stronger than expected. Your loan growth outlook from here is pretty good. Rates have been fairly volatile. We're going to get less forward-looking color from the Fed. I guess, is there anything different that you're doing here that you weren't doing at the start of the year, maybe in terms of promo balances, marketing incentives to just get ahead of what could be a little bit more volatility on the deposit side? John Stern: Yeah. Thanks for the question, Manan. I think largely speaking, our strategy on deposits remains on track. The consumer deposits we continue to focus on. We've had three quarters there in a row of record deposit growth on the consumer franchise. The commercial side was a little light seasonally this quarter, but we anticipate that to continue to go up. I would say from our seat, the commercial deposits will help fill any gap that we need from a loan growth perspective. The pricing on the commercial side is well understood by us, whereas the consumer side added tools and added models to help, again, our front-line folks in the network really can help us price that appropriately. We always see different pockets of pricing in different geographies and things like that. That sort of episodes happen all the time. I don't think there's anything here any different than any other environment. I would say largely our strategy is intact. Manan Gosalia: Got it. Okay, perfect. Maybe just a follow-up to Gerard's question. Can you remind us which geographies you're focused on in terms of branch expansion, and I guess what level of densification you expect to reach in these new markets? Is there a specific branch share number or rank or something you're targeting in the new markets you're expanding in? Gunjan Kedia: Yes. Thank you, Manan. We are looking to be more than 8% of the branch count, which gets you into a sweet spot to be the top 4 depositor in the region, which is what our goal is. Obviously, to be up higher than that as well, but at that number, it's pretty good. Right now, our focus very much has been on the Southwest. We've been growing out our Arizona footprint. Nashville, and our surrounding Tennessee markets have been very good for us. Everything else is not a book state focus necessarily, but for example, parts of Utah are very high growth, even in and around Boise. We are very surgical about how we think about permits that are being filed many years into advancement where the shopping is growing. We have a very good sense of where sort of household formation is higher. I must say that since COVID, we have seen many areas within our footprint really revive in terms of affluence and in terms of younger generations moving in. All of those, the quality of the household formation is very important to us, too. Those are the 10-ish markets that are just the focus right now to get it above a certain branch density. Manan Gosalia: Great. Thank you. Operator: Your next question comes from the line of Chris McGratty with KBW. Please go ahead. Chris McGratty: Good morning. Thanks for the question. John, on the fixed rate asset repricing, maybe remind us the pick-up on both the loans and security side. Thanks. John Stern: Sure. Yeah. I think what's been going on is as we've been getting bigger, the volumes have picked up in terms of the amount. I think that we have more like $10 billion to $11 billion per quarter that really come through in terms of repricing. You can think of about three to four to that is on the investment portfolio versus the balance being on the loan side. I would say we're kind of in that 100 to 125 basis point. It depends on what's rolling off and what the rate is at the time of coming on, and that's obviously very fluid. It's been helpful. The Fed funds versus five-year Treasuries around 60 basis points or so. That's been hanging in there. We obviously watch the forwards; we know that forward curve is flattening as you look out. To the extent that it stays around here, we feel really good that hopefully we can keep at that level or expand as we move forward. Chris McGratty: Okay, great. Thanks for that. Given the positive commentary on loan growth The focus on the deposit, the branches that we've been talking about. Is there any scenario where you might consider a depository acquisition over the medium term? I know the message has been no recently. Gunjan Kedia: Good one. Nothing has changed really about. We're very targeted with our organic build on the deposit quality and the customer franchise quality. Yes, nothing has changed about our stance really focused on the organic growth aspects here. Chris McGratty: Great. Thank you. Gunjan Kedia: You're welcome. Operator: Your next question comes from the line of Saul Martinez with HSBC. Please go ahead. Gunjan Kedia: Hi, Saul. Saul Martinez: Hey, good morning. John Stern: Hello. Saul Martinez: Morning. Good morning. I apologize in advance. I'm going to get into the weeds on some of the numbers with some of these questions again. On your NII guidance, that does include Amazon, $80 million, $75 million-$85 million a quarter. That's half a quarter. That's about one percentage point of benefit in terms of the year-over-year growth. Four to six is organically maybe 3%-5%. If I look at it on a sequential basis, kind of implies flattish to about up 2%, which isn't really suggestive of much NIM expansion. I'm just curious, given everything else you guys are talking about and good underlying trends, loan growth, controlled deposit costs, fixed asset repricing, whether there's an element of conservatism in this guide, and I'm just curious how you think about all that? John Stern: Sure. Thanks. Just want to reiterate that the $75 million-$85 million is a total revenue number. A majority of that is going to be NII. I know I said majority, but it's probably, I would say two-thirds is going to be NII, to one-third fee is going to be roughly what it is, but that can move. Saul Martinez: Okay. John Stern: That maybe helps there a little bit. Of course, in the third quarter, we gave you a guide for 4%-6%, and that includes a half a quarter assumed for the Amazon. There's pieces of it before it kind of ramps up fully in the fourth quarter. That's why we anticipate, as I mentioned earlier, our trajectory of NIM and net interest income kind of growing throughout the course of the year, in part due to the Amazon. Of course, we have momentum in other places. The loan growth, as we've talked about, is positive. I just answered a question on the fixed asset repricing. Those are the positive items, obviously, that will continue to manifest. The things that we're watching is the deposit side as well as the shape of the curve. Those are kind of the things that can move, and we'll watch that obviously very closely. Saul Martinez: Okay. That's helpful. Just to go back to the BTIG numbers and follow up on some of the questions there. Make sure I have them straight here. $200 a quarter, and then $100 in June, so that's about $500 million. You have $60 million of integration costs built into that and the 15% margin. That margin is net, my understanding, net of those integration costs, which would imply, $60 million on $500 million, that's a big number, that the sort of the cleaner margin on this is much higher, mid-20% kind of margin. Am I thinking about that right? You also said 20% was what you had in your head, but it does imply, at a 15% margin with $60 million of integration costs, it would imply that the margin is much higher than that. John Stern: Yeah. Thanks, Saul. Just to clarify, the $60 is kind of outside of the 15% contribution. Saul Martinez: Okay. John Stern: The $200, I'd multiply that by 85% to get the expense rate, and that's kind of our core operating model at this particular juncture. I would anticipate $60 million or so, $30 or so per quarter here in the third and fourth quarter. There might be some trailing components of that in the first quarter. We'll see as we kind of progress. In terms of the contribution margin, that 15% is a good core base run rate. That's why we gave it to you in that sense. Obviously over time, we look to improve that, as I mentioned. Saul Martinez: Okay. Got it. Thank you so much. John Stern: You bet. Operator: Your next question comes from the line of David Chiaverini with Jefferies. Please go ahead. Gunjan Kedia: Morning. David Chiaverini: Hi, thanks for taking the questions. John Stern: Morning. David Chiaverini: Wanted to ask on Slide 6, you highlight the payments businesses. Good trends overall, you do show the merchant processing, the middle chart showing a slowdown. You cited the softness in Europe. Anything else that's driving that? What's the outlook for the merchant processing business going forward? John Stern: Yeah. Good morning. Thank you. On the merchant side, yes, certainly Europe had an impact on the business. We just saw slowness, post-war impacts that gave us that sort of thing. We also had loss of some non-strategic distribution partners over there; we will feel that impact for the next three quarters or so. While the European macro component will come back, the distribution component or the partner aspect will hang for a few quarters. This is just part of the transformation, as Gunjan has talked about. It's a very big priority for us. While we anticipate perhaps lower growth rates in the near term here for merchant, we do expect the other parts of the payment complex to really improve. All the cards are doing very well. As we've talked about, corporate, retail, and small business are doing quite well. Gunjan Kedia: I would just add for the total payment business, which is quite sizable for us, about 23% of our total revenue this quarter. The revenue grew very healthily to 5.7%, well within our mid-single digit expectations from a medium-term target standpoint, quite strengthened from last year. Last year, we were really looking at the corporate side dragging because of slowness in corporate and government spend, they have come back very much. The diversification benefits are real, we absolutely feel confident in the mid-single digit number for the overall payments complex, on the better side of that range as we go forward. David Chiaverini: Great. Thanks for that. Shifting to a housekeeping question on Amazon. How much in one-time costs, if any, related to Amazon are embedded in the expense guide? John Stern: Yeah. We've embedded some of that already in our run rate, and so there has been some costs, some of the other expense and so on and so forth that you're seeing, but that's already been largely embedded. There might be some other ongoing, but that's all embedded into our guide that we've been talking about. David Chiaverini: Are you able to quantify that impact or no? John Stern: There's probably $20 million-$30 million or so this quarter, and there's been a little bit prior to that. It hasn't been worth mentioning as it's been pretty immaterial. David Chiaverini: Very helpful. Thank you. Operator: Your next question comes from the line of Vivek Juneja with J.P. Morgan. Please go ahead. Gunjan Kedia: Morning. Vivek Juneja: Hi. John Stern: Morning. Vivek Juneja: Morning. Thank you. A question on BTIG. What are your plans for expanding that in terms of growing its monopoly of products or capabilities, such as research, sales, et cetera? Also, what are your plans and what have you factored in terms of adding to risk and controls and regulatory, given that it's now part of a bank umbrella and it's a very widespread franchise all the way from Norway to Australia and Hong Kong? Gunjan Kedia: Yeah. Thank you, Vivek. Broadly speaking, our sense is their product capabilities are helpful to the franchise, and the focus is on leveraging those within our existing client base rather than building the franchise out over time. The product build is not a big part of our immediate plans. The risk and control overlays are very important, and they're already in place because we've anticipated this deal for some time. We were building those out here earlier in the year, and from day one, all of that infrastructure is fully in place at this point. Vivek Juneja: Thank you. Operator: Your next question comes from the line of Matt O'Connor with Deutsche Bank. Please go ahead. Gunjan Kedia: Hi, Matt. Matt O'Connor: Good morning. Gunjan Kedia: Yep. Matt O'Connor: Hi. I know period-end balance sheets can be a little quirky, but you had a big increase in cash, lower securities maybe from the restructuring, and then a big increase in short-term borrowings. Is that the BTIG deal? Something else going on? Just kind of quarter-end oddities? John Stern: Yeah. It's more the latter, Matt. Thanks for the question. June 30 and December 30 are very intense, heightened activities for our clients, especially given our investment services businesses and things of that variety. While obviously ending balance sheets are important, I always stress to investors that the averages are the best place to look. You do have some elevation there. However, I would say on the investment portfolio because of the sale, we had $1.6 billion of sales this quarter as we did there. I do anticipate that the investment portfolio will kind of keep at this level or so as we kind of have been trading the securities book balances for more loan balances, which we think is a healthy thing to do from a balance sheet perspective. Matt O'Connor: Okay. That's helpful. Then just separately, kind of a more big picture question on the Amex or the Amazon deal that came from Amex. I guess what's the kind of opportunity over time here? It's $1.6 billion. It seems like a pretty meaningful refresh switching over to Mastercard. I assume Amazon picked you over where they've been kind of for a reason, and I would assume optimism to grow it. Just talk about, is this a book that can grow 5%, 10%, or we're going to walk in a couple of years and it's just significantly bigger for kind of obvious reasons? Gunjan Kedia: Yeah. Thank you. It's a very strategic deal for us. Certainly, economically very, very attractive, but it introduces us to the small business segment around a partner that has a long-standing reputation of growing quite robustly. Their vision for this product set and this partnership is to do anything they can to support a very large ecosystem of small businesses around their platform. They think expansively about how to provide financial services to them, very keen on exploring our Business Essentials, Smartly-like product platform to figure out how card and banking and some amount of ancillary services, even around the payments, can be fully provided to the base. We expect that this will be a visionary set of product development. Of course, we hope the book will grow. We don't have experience with this yet. We'll convert it, then we'll get a sense of how it grows. It joins a pretty robust co-brand platform for us, which is providing a lot of scale to our existing products. We reuse almost all parts of the business. We are anticipating it'll create a strategic platform that will be leveraged with our own small businesses and perhaps with our other deals. More to come. Once we experience the book, we experience the nature of the relationship, we'll know more next earnings quarter. Matt O'Connor: Okay. More than just kind of targeting the credit card balances. Gunjan Kedia: Yeah. Matt O'Connor: I mean, have you thought about also going after the kind of primary small business checking accounts or accounts? Is that part of the thought process when you say traditional banking as well? Gunjan Kedia: It is because we've had a partnership platform with State Farm, then we improved with Edward Jones, that brings banking and credit card together in a branded name for the partner. That's the platform that we are now enhancing for the small business because it was built for consumer. We know how to do it. All the operational processes around how do you bank a credit card and a banking customer out of a footprint through digital means are all now in place. We've had two or three years of experience running that. The expansion of the partner platform to small business could be sort of a strategy we grow out over time. Very exciting. Matt O'Connor: Okay. Gunjan Kedia: Yeah. Matt O'Connor: Okay. Makes sense. Thank you. Operator: There are no further questions at this time. Mr. Mauney, I'll turn the call back over to you. Brian Mauney: All right. Thank you to everyone who joined our call this morning. Please contact the investor relations department if you have any follow-up questions. Krista, you may now disconnect. Operator: Ladies and gentlemen, this does conclude today's call. You may now disconnect. Before you buy stock in U.S. Bancorp, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and U.S. Bancorp wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $370,332!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,272,280!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of July 23, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends U.S. Bancorp. The Motley Fool has a disclosure policy. U.S. Bancorp (USB) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Northern Trust Corporation NTRS second-quarter 2026 adjusted earnings per share (EPS) of $2.97 beat the Zacks Consensus Estimate of $2.68. The figure increased 40% from $2.13 in the prior-year quarter. NTRS’ results benefited from a rise in net interest income (NII) and trust, investment and other servicing fees. An increase in total assets under custody (AUC) and assets under management (AUM) balances also supported the financials. However, elevated expenses were concerning. Results excluded certain notable items. After considering this, net income (GAAP basis) was $792.2 million, up 88% from the prior-year quarter. Quarterly total revenues of $2.62 billion increased 31% year over year. The top line beat the Zacks Consensus Estimate of $2.20 billion by 19%. NII was $675.5 million in the quarter under review, up 11% year over year. The net interest margin was 1.79%, up 11 basis points from the prior-year quarter. Trust, investment and other servicing fees totaled $1.35 billion, up 10% year over year. Other non-interest income increased to $673 million from $156.3 million in the year-ago quarter. Non-interest expenses rose 16% year over year to $1.64 billion in the reported quarter. Asset Servicing income before income taxes (FTE basis) was $323.3 million, up 19% year over year. The segment’s pre-tax margin was 23.7% compared with 23.2% in the prior-year quarter. Wealth Management income before income taxes was $333.5 million, up 8% year over year. The segment’s pre-tax margin was 37.4% compared with 37.2% in the year-ago quarter. The Other segment recorded income before income taxes of $415.5 million against a loss of $11.5 million in the prior-year quarter. As of June 30, 2026, Northern Trust’s total AUC increased 12% year over year to $15.9 trillion. Also, total AUM increased 16% year over year to $1.9 trillion. The increase in AUC were primarily driven by favorable markets, partly offset by unfavorable currency translation. The rise in AUM mainly reflected favorable markets and net client inflows. Total allowance for credit losses was $190.3 million, down 15% year over year. Total non-accrual assets were $71.3 million as of June 30, 2026, compared with $92.8 million in the year-ago period. NTRS reported provision benefits of $5.3 million in the second quarter against provision for credit losses of $16.5 million in the year-ago quarter. The provision benefit reflected a decrease in the collective reserve, partly offset by an increase in individual reserves. Under the Standardized Approach, as of June 30, 2026, the Common Equity Tier 1 capital ratio was 12.2%, unchanged from the prior-year quarter. The total capital ratio was 15.5% compared with 14.8% in the year-ago quarter. The Tier 1 leverage ratio was 7.6%, unchanged from the prior-year quarter. The return on average common equity was 25.9% compared with the year-earlier quarter’s 14.2%. During the reported quarter, Northern Trust returned $499.4 million to common shareholders through share repurchases and dividends. The company repurchased 2.1 million shares for $350.6 million at an average price of $164.65 per share and paid $148.8 million in common stock dividends. Following the successful completion of the Federal Reserve’s 2026 stress test, Northern Trust’s board of directors approved an increase in the quarterly common stock dividend at its July 21, 2026 meeting. The quarterly dividend was raised by 10% to 88 cents per share from 80 cents. A rise in NII, trust fees and capital markets income drove Northern Trust’s performance, while increasing AUC and AUM balances are likely to support financials. The planned sale of its guardianship services business reflects its strategy of concentrating resources on wealth management, asset servicing and asset management. However, elevated expenses will likely impede growth. Northern Trust Corporation price-consensus-eps-surprise-chart | Northern Trust Corporation Quote Currently, NTRS carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Regions Financial Corporation RF has posted adjusted second-quarter 2026 earnings of 68 cents per share, beating the Zacks Consensus Estimate of 64 cents. Also, this compares favorably with earnings of 60 cents in the year-ago quarter. Increases in net interest income, wealth management income, service charges and lower provisions supported RF’s results. However, higher non-interest expenses and securities losses played spoilsport. U.S. Bancorp USB 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. USB’s results were supported by higher net interest income, 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 provisions was concerning. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Northern Trust Corporation (NTRS) : Free Stock Analysis Report Regions Financial Corporation (RF) : Free Stock Analysis Report U.S. Bancorp (USB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Thursday, July 16th, 2026Pre-market futures were mixed ahead of this morning’s group of economic reports — all of which were as good, or better, than expected. This follows gains across the board of major indexes Wednesday, from +0.3% on the blue-chip Dow to +0.6% on the tech-heavy Nasdaq. This morning, the S&P 500 has remained consistent, -40 points, and the Nasdaq has given back -320, but the Dow moved from +40 points after jobless claims, retail sales and Philly manufacturing data to -10 points currently. June Retail Sales reported in-line with expectations this morning, +0.2%, down from an upwardly revised +1.0% the previous month. Strip out big-ticket auto sales and this number flips to -0.2%, but back up to an in-line +0.4% when we subtract autos & gasoline sales. The Control number, which brings monthly retail tallies to overall monthly GDP, came in at a perfectly reasonable +0.5%, even if it is down -30 basis points (bps) from the May number.This headline pulls back from the average +1.0% in Retail Sales growth over the past four months, which is the strongest such run in four years. While June did see some relief at the gas pump in terms of pricing, the cumulative weight of inflation did appear under the hood in today’s report: gas station sales came in lower month over month but +20% year over year. Health and personal care sales dropped -0.8% in June. Welcome lower numbers on weekly jobless claims also greeted us this Thursday morning, with Initial Claims dipping -10K from expectations to +208K, following a slight upward revision the prior week to +216K. Continuing Claims, reported a week in arrears from new claims, shrank to +1.805 million from an upwardly revised +1.821 million from the week earlier.Jobless claims have remained remarkably consistent over the past year or so, especially on the longer-term side. While we’ve now spent the past five weeks above 1.8 million, this is still an historically very low number. Initial claims reached their lowest level since +199K reported in early May, but have bandied about the 210K level nearly every week of 2026 so far. Regional manufacturing survey Philly Fed this morning brought forth July numbers, with the headline coming in roughly 4x higher than expectations at 41.4. This is the strongest month for business for the region stretching from central Pennsylvania to New Jersey and Delaware since November of 2021, when the country was recovering from the Covid shutdown with the Great Reopening. It’s also the fastest expansion since January of 2025.Massive data-center build-outs back up these results, from the Amazon Web Services (AWS) tech campus taking over the former U.S. Steel plant and DataOne expending its facilities at Vineland in Cumberland County, NJ. More data center plans are making their way through state legislatures, though some pushback has been experienced on environmental concerns. The spigot is not fully open for Q2 earnings season quite yet, but the stream of companies reporting results is increasing, and expending beyond big finance corporations and major airlines. Taiwan Semiconductor TSM posted a +11.4% positive earnings surprise at $4.31 per share, though steeper capex initiatives are helping investors move the share price -4% lower in today’s pre-market.UnitedHealthcare UNH blasted the Zacks consensus on earnings in its Q2 this morning, with $6.38 per share skyrocketing past the $4.98 anticipated, for a +29% positive earnings surprise. Share are up over +7% on the news this morning, as the major health insurer cuts costs and expands its earnings guidance.GE Aerospace GE posted earnings of $2.02 per share this morning, an +8.6% positive surprise over the $1.86 projected. Investors are selling the news, however, as the impressive order growth of previous quarters has shown signs of cooling. GE shares are down -4% ahead of the open.U.S. Bancorp USB shares had been up +4.6% this morning after a healthy earnings beat in its Q2 report ahead of the open: $1.35 per share versus expectations for $1.28. Lending revenue numbers were up in the quarter, but shares have flattened ahead of the opening bell.After today’s close, Netflix NFLX posts quarterly numbers that are expected to have increased +9.7% year over year on +13.5% in revenues. The leader in streaming entertainment has missed earnings estimates twice in the past four quarters, including a -7.9% miss in Q1 2026.Questions or comments about this article and/or author? Click here>> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report GE Aerospace (GE) : Free Stock Analysis Report UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report Netflix, Inc. (NFLX) : Free Stock Analysis Report U.S. Bancorp (USB) : Free Stock Analysis Report Taiwan Semiconductor Manufacturing Company Ltd. (TSM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by record net revenue of $7.7 billion, reflecting a deliberate shift toward a more diversified, fee-heavy business mix. The successful integration of BTIG significantly bolstered capital markets capabilities, contributing $98 million in its first month and outpacing initial expectations. Management attributed strong positive operating leverage to disciplined expense management coupled with accelerating revenue growth in payments and card issuing. The consumer franchise reached record deposit levels, driven by the 'Bank Smartly' product suite which has successfully deepened multi-service client engagement. Strategic focus is shifting toward 'densifying' the branch network in high-growth markets to capture lower-cost deposits and long-term relationships. Operational execution remains centered on a 'four-legged stool' of fees—capital markets, payments, trust/investment management, and consumer fees—to ensure earnings stability. Full-year 2026 revenue growth guidance was raised to 7%-9%, assuming continued momentum in fee income and broad-based loan growth. Management expects net interest margin to expand through 2027, targeting a 3% range driven by fixed-asset repricing and optimized asset mix. The Amazon Small Business Portfolio acquisition is expected to close in mid-August, contributing approximately $75 million to $85 million in quarterly revenue. Capital markets revenue is targeted to reach 10% of total company revenue over time through organic cross-selling and leveraging the BTIG platform. Guidance assumes a $160 million reserve build in Q3 related to the Amazon portfolio purchase, reflecting conservative credit positioning. The BTIG acquisition impacted capital levels by 12 basis points this quarter, though management remains committed to a 10% CET1 target. Merchant processing growth slowed due to macroeconomic headwinds in Europe and the strategic exit of certain non-strategic distribution partners. Annual branch investment is increasing from $200 million to $300 million to support physical expansion in high-household-formation markets. Management noted approximately $60 million in merger-related integration costs for BTIG expected to be recognized primarily in the second half of 2026. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed a firm commitment to positive operating leverage, expecting 300 basis points excluding BTIG impacts. The higher expense base is viewed as a productive trade-off for low-teens fee growth and the installation of over $1 billion in run-rate revenue. The bank is in the 'last lap' of capital building and intends to glide into a 70%-75% payout ratio as it approaches a 10% CET1 ratio. Current priority for capital remains supporting robust organic loan growth and integrating recent acquisitions over aggressive repurchases. The deal provides a platform to offer a full suite of 'Business Essentials' products to a massive ecosystem of small businesses. Management views this as a visionary partnership that goes beyond credit card balances to include potential banking and payment services. While loan growth may necessitate slightly higher deposit rates, management expects commercial deposits to fill funding gaps seasonally. The shape of the yield curve is cited as a more critical variable for NIM expansion than the absolute number of Fed rate hikes.

U.S. Bancorp USB 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. Net 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. Non-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. Average 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. Provision 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. Capital 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. U.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. U.S. Bancorp price-consensus-eps-surprise-chart | U.S. Bancorp Quote 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. Regions Financial RF 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 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. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Regions Financial Corporation (RF) : Free Stock Analysis Report U.S. Bancorp (USB) : Free Stock Analysis Report Truist Financial Corporation (TFC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Earnings Per Share (EPS): $1.35, an increase of approximately 22% year over year. Net Revenue: $7.7 billion, representing a 10.1% growth year over year. Operating Leverage: 400 basis points of positive operating leverage. Fee Revenue: 44% of total revenue, with a growth of 13.2% year over year. BTIG Acquisition Revenue: $98 million in its first month as part of US Bancorp. Total Payment Services Revenue: Increased 5.7% year over year. Consumer Deposits: Record levels driven by Smartly flagship product. Average Loans: $405 billion, up 7.1% from the prior year quarter. Net Interest Income: $4.4 billion, an increase of 7.5% year over year. Net Interest Margin (NIM): Improved to 2.79%. Return on Tangible Common Equity (ROTCE): 18.7%. Return on Average Assets (ROA): 1.26%. Efficiency Ratio: Improved to 57.1%. Nonperforming Assets Ratio: 0.33%, improved 5 basis points from the previous quarter. Common Equity Tier 1 Capital Ratio: 10.8%. Warning! GuruFocus has detected 7 Warning Signs with USB. Is USB fairly valued? Test your thesis with our free DCF calculator. Release Date: July 16, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. U.S. Bancorp (NYSE:USB) reported a 22% year-over-year increase in earnings per share, reaching $1.35. The company achieved record net revenue of $7.7 billion, highlighting strong performance across its diversified business mix. Fee revenue rose to 44% of total revenue, driven by strong performance in capital markets, trust and investment management, and payments. The successful integration of BTIG contributed approximately $98 million in revenue in its first month, exceeding expectations. U.S. Bancorp's consumer franchise continues to grow, with record consumer deposits and a focus on expanding branch presence in high-growth markets. Merchant processing growth slowed due to softness in Europe and the loss of nonstrategic distribution partners. The integration of BTIG involves approximately $60 million in restructuring costs, impacting short-term profitability. Deposit costs are expected to rise slightly as loan growth strengthens, potentially affecting net interest margin. The company faces ongoing challenges in maintaining positive operating leverage amid rising expenses associated with fee growth. The Amazon Small Business portfolio acquisition will require a $160 million reserve build, impacting near-term financials. Q: Can you explain the revenue upgrade from 4%-6% to 5%-7% and discuss the net interest income trajectory, especially with deposit costs rising? A: John Stern, CFO, explained that the revenue guide increased to 7%-9% or 5%-7% excluding BTIG, reflecting broad-based growth. Net interest income is expected to grow mid-single digits, likely above 5% for the full year. The net interest margin is expected to grow, with deposit costs remaining competitive. Q: How is positive operating leverage tracking, considering the fee generation excluding BTIG is better? A: John Stern, CFO, emphasized the commitment to positive operating leverage, driven by strong fee growth, including BTIG's contribution. The company expects a 15% contribution margin from BTIG, with integration costs of about $60 million. Gunjan Kedia, CEO, added that they are confident in their expense and productivity plans, absorbing onetime costs from BTIG and the Amazon deal. Q: What are the greatest drivers of the accelerating fee growth trend, and what is the expected growth rate for the overall fee component? A: John Stern, CFO, highlighted strong corporate payments and card growth as key drivers. The company expects low teens fee growth for the full year, with over 4 points driven by BTIG. Gunjan Kedia, CEO, noted that the fee complex is diversified across capital markets, payments, trust and investment management, and consumer fees. Q: Could you provide more detail on deposit trends this quarter and expectations for the rest of the year? A: John Stern, CFO, noted typical seasonal outflows in commercial deposits due to tax seasonality, with strong growth in consumer deposits. The company expects deposit growth to align with loan growth, with deposit rates potentially rising depending on loan growth strength. Q: What are the plans for expanding BTIG's capabilities and ensuring risk and control measures are in place? A: Gunjan Kedia, CEO, stated that the focus is on leveraging BTIG's existing product capabilities within US Bancorp's client base rather than expanding the franchise. Risk and control measures are already in place, having been built out earlier in the year. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

U.S. Bancorp (USB) came out with quarterly earnings of $1.35 per share, beating the Zacks Consensus Estimate of $1.28 per share. This compares to earnings of $1.11 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +5.47%. A quarter ago, it was expected that this company would post earnings of $1.14 per share when it actually produced earnings of $1.18, delivering a surprise of +3.51%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. U.S. Bancorp, which belongs to the Zacks Banks - Major Regional industry, posted revenues of $7.71 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.26%. This compares to year-ago revenues of $7 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. U.S. Bancorp shares have added about 18.1% since the beginning of the year versus the S&P 500's gain of 10.6%. While U.S. Bancorp has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for U.S. Bancorp was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.31 on $7.85 billion in revenues for the coming quarter and $5.11 on $30.65 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Major Regional is currently in the top 11% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Fifth Third Bancorp (FITB), has yet to report results for the quarter ended June 2026. The results are expected to be released on July 17. This company is expected to post quarterly earnings of $0.98 per share in its upcoming report, which represents a year-over-year change of +8.9%. The consensus EPS estimate for the quarter has been revised 0.4% higher over the last 30 days to the current level. Fifth Third Bancorp's revenues are expected to be $3.25 billion, up 44.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report U.S. Bancorp (USB) : Free Stock Analysis Report Fifth Third Bancorp (FITB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research