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Key Takeaways
- U.S. Bancorp’s stock dipped Wednesday as the regional bank posted lower first-quarter revenue, increased its provision for credit losses, and cut its guidance.
- Net interest income declined 14% year-over-year, while its provision for credit losses went up 30%.
- The U.S. Bank parent reduced its full-year net interest income outlook by at least $200 million from its previous estimate.
U.S. Bancorp (USB) shares dipped Wednesday as the regional bank posted lower first-quarter revenue, increased its provision for credit losses, and cut its guidance.
The U.S. Bank parent reported quarterly revenue declined 6.4% year-over-year to $6.72 billion, missing estimates. Adjusted earnings per share (EPS) of $0.90 came in better than forecasts.
U.S. Bancorp’s net interest income tumbled 14% to $3.99 billion. The amount of money it put aside for bad loans rose 30% from a year ago to $553 million. The company noted it paid a $110 million in a special assessment by the Federal Deposit Insurance Corporation (FDIC) to cover the costs of the federal takeover of failed banks.
Chief Executive Officer (CEO) Andy Cecere said that despite “a challenging interest rate environment and pressure on industry deposit levels,” the bank’s consumer deposits increased. He added that U.S. Bancorp’s fee business expanded, “driven by strong underlying client growth and activity, as well as prudent expense management.”
The firm lowered its guidance for full-year net interest income to a range of $16.1 billion to $16.4 billion from the previous projection of at least $16.6 billion.
Shares of U.S. Bancorp slipped 4.8% to $39.04 as of 11:45 a.m. ET Wednesday. They earlier traded at $38.79, their lowest level this year.