Q1 2025 US Bancorp Earnings Call Transcript
Key Points
- U.S. Bancorp (USB) reported earnings per share of $1.03 and a return on tangible common equity of 17.5% for the first quarter.
- The company achieved year-over-year positive operating leverage of 270 basis points on an adjusted basis.
- USB's credit quality and capital levels are strong, with an improved net charge-off ratio and continued capital building.
- The company has a diversified mix of fee-generating businesses, with fee income representing 41% of total net revenue.
- USB's payments business is a key growth area, with $42 billion in attractive average loan balances and a focus on affluent customers.
- The macroeconomic environment remains uncertain, with ongoing discussions around tariffs and potential impacts on the business.
- USB's total average deposits decreased by 1.1% on a linked quarter basis, reflecting seasonal patterns and pricing discipline.
- The company's net interest income was relatively stable compared to the fourth quarter, indicating limited growth in this area.
- Non-interest income was impacted by seasonal declines in Payment Services and less favorable market conditions for Trust and Investment Management fees.
- USB's Merchant Acquiring business, while a differentiator, contributes just over 5% of total revenue and is undergoing a multiyear transformation.
Welcome to the U.S. Bancorp first-quarter 2025 earnings conference call. (Operator Instructions)
This call will be recorded and available for replay beginning today at approximately 11:00 AM Central Time.
I will now turn the conference call over to George Andersen, Director of Investor Relations for U.S. Bancorp.
Thank you, Julianne, and good morning, everyone. Today, I'm joined by our President and New Chief Executive Officer, Gunjan Kedia; and Senior Executive Vice President and CFO, 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 all 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 2 of today's earnings
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