U.S. Bancorp (NYSE:USB) reported stronger second-quarter 2026 results, with executives pointing to accelerated revenue growth, expanding fee income, improved profitability metrics and continued credit stability during the company’s earnings call.
Chairman and Chief Executive Officer Gunjan Kedia said the company delivered earnings per share of $1.35, up approximately 22% from a year earlier. Net revenue reached a record $7.7 billion, representing 10.1% year-over-year growth. Kedia said the quarter reflected progress against the bank’s strategic priorities, including revenue growth, expense discipline and payments transformation.
Fee Income Accelerates as BTIG Adds to Capital Markets Revenue
Fee income was a central theme of the call. Kedia said fees rose to 44% of total revenue in the quarter, adding that the scale and quality of the fee mix help drive “high returns, stable earnings, and enduring relationships.”
Total fee income increased 13.2% from the prior-year period, according to Stern. He said growth was broad-based across capital markets, trust and investment management, payments and other institutional fee businesses. Excluding BTIG, fee revenue still grew 9.9% year-over-year.
The company completed its acquisition of BTIG during the quarter. Kedia called the deal “a significant milestone” in U.S. Bancorp’s capital markets build-out. In its first month as part of the company, BTIG generated approximately $98 million of revenue, which Kedia said was the strongest monthly revenue performance in BTIG’s history and ahead of earlier expectations.
Stern said BTIG is expected to contribute roughly $200 million of revenue per quarter in the back half of 2026. In response to analyst questions, Stern said the company is assuming a 15% contribution margin for BTIG in the remainder of the year and expects about $60 million of merger-related costs in 2026, with a possible tail into early 2027. Kedia said the company does not expect it will need another capital markets bolt-on acquisition to reach its goal of growing capital markets to more than 10% of total company revenue over time.
Net Interest Income and Loans Rise
Net interest income on a fully taxable equivalent basis totaled $4.4 billion, up 7.5% year-over-year and above prior guidance. Stern said the result was driven by stronger loan dynamics, investment portfolio repositioning and ongoing benefits from fixed asset repricing. On a sequential basis, net interest income increased $96 million, or 2.2%.
Average loans totaled $405 billion, up 7.1% from the prior-year quarter and 3.0% from the prior quarter. Stern said loan growth was broad-based, including commercial and industrial loans, credit card and commercial real estate. In the question-and-answer session, he said pipelines continued to look strong across commercial categories, from large corporates to small business and SBA loans.
Average total deposits increased 2.4% year-over-year and were flat from the previous quarter. Stern said consumer deposits reached another record, supported by the Smartly product suite, while wholesale and investment services deposits reflected typical seasonality. Kedia said Smartly checking and savings balances now exceed $84 billion.
Payments and Consumer Banking Remain Strategic Focus Areas
Kedia said U.S. Bancorp’s payments franchise remains an important source of diversification and client engagement. Total payment services revenue increased 5.7% year-over-year, compared with 4.7% growth in the prior-year quarter. She said card issuing continued to perform well and corporate payments rebounded, while merchant processing growth slowed during the quarter.
During the Q&A session, Stern attributed merchant processing softness partly to Europe, including post-war impacts and the loss of some non-strategic distribution partners. He said the partner impact could continue for several quarters, while other parts of payments, including card and corporate payments, are performing well.
The company also highlighted its consumer franchise. Kedia said U.S. Bancorp serves nearly 13 million consumers through digital and physical distribution, with about 18% outside its traditional branch footprint. It also serves approximately 7 million customers through card, co-brand, Elan and partner platforms. She said 42% of consumer clients are now multi-service, up about two percentage points over the past two years.
Kedia said the bank plans to increase annual branch investment from about $200 million historically to $300 million, focused on densifying in roughly 10 markets within its footprint that have high household formation. In response to questions, she cited the Southwest, Arizona, Nashville, surrounding Tennessee markets, parts of Utah and areas around Boise as examples of focus areas.
Credit Quality and Capital Remain Stable
Stern said key credit quality metrics improved both sequentially and year-over-year. The ratio of non-performing assets to loans and other real estate was 0.33%, down five basis points from the prior quarter and 11 basis points from a year earlier. The net charge-off ratio was 0.53%, down three basis points sequentially.
The allowance for credit losses remained $8 billion, or 1.94% of period-end loans. Stern said the company expects to recognize approximately $160 million of reserve build related to the Amazon Small Business Portfolio purchase, which is expected to close in mid-August.
U.S. Bancorp’s common equity Tier 1 capital ratio was 10.8% as of June 30, or 9.4% including accumulated other comprehensive income. Stern said strong earnings supported capital distributions, loan growth and the impact of the BTIG acquisition. He said the company repurchased $200 million of stock during the quarter, flat with the prior quarter, and reiterated that management intends to increase buybacks as the company approaches an adjusted CET1 level of about 10%.
Company Raises 2026 Revenue Outlook
U.S. Bancorp raised its full-year 2026 revenue outlook. Stern said the company now expects total net revenue growth of 7% to 9% compared with the prior year, or 5% to 7% excluding BTIG, up from the prior 4% to 6% range.
For the third quarter, the company expects net interest income growth of 4% to 6% on a fully taxable equivalent basis compared with the third quarter of 2025. It also expects total fee revenue growth of 12% to 14%, including BTIG, and non-interest expense growth of approximately 8%. Excluding BTIG, core expense growth is expected to be approximately 3.5%.
Stern said the company expects to deliver about 200 basis points of positive operating leverage for 2026 and more than 300 basis points excluding BTIG. Kedia said management remains focused on sustaining the company’s return profile while accelerating growth, adding that U.S. Bancorp is positioned for “profitable growth and long-term value creation.”
About U.S. Bancorp (NYSE:USB)
U.S. Bancorp (NYSE: USB) is a bank holding company and the parent of U.S. Bank, a national commercial bank that provides a wide range of banking, investment, mortgage, trust and payment services. The company operates through consumer and business banking, commercial banking, payment services, and wealth management segments. Its product set includes deposit accounts, consumer and commercial lending, mortgage origination and servicing, credit and debit card services, treasury and cash management, merchant processing, and institutional and trust services.
Headquartered in Minneapolis, Minnesota, U.S.
