Please ensure Javascript is enabled for purposes of website accessibility

U.S. Bancorp Q4 Earnings Meet Profit Expectations But Miss on Revenue

By Bram Berkowitz - Jan 21, 2021 at 4:36PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Asset quality remained stable and the bank did not build reserves for the first time in four quarters.

The $553 billion asset U.S. Bancorp (USB 0.29%) delivered earnings in the fourth quarter of 2020 that met analysts' profit estimates, but missed on revenue expectations.

The bank reported net income of $1.5 billion in the quarter, or $0.95 diluted earnings per common share, which is up from the fourth quarter of 2019 and essentially almost exactly what analysts were projecting.

Revenue at the bank came in at nearly $5.8 billion, missing just slightly on expectations. For the full year 2020, U.S. Bancorp reported net income of nearly $5 billion, down nearly 28% from 2019, on total revenue of $23.3 billion.

The exterior of a U.S. Bank branch

Image source: U.S. Bancorp.

Both full-year earnings and revenue in 2020 slightly beat out average analyst estimates.

"Our fourth quarter and full year results highlighted the value of our diversified business model, which allowed us to deliver industry leading results for our shareholders despite the economic headwinds the entire banking industry faced," U.S. Bancorp President and CEO Andrew Cecere said in a statement.

Net interest income in the quarter declined slightly as the net interest margin also continued to face pressure, dropping another 10 basis points (0.10%) from the third quarter of 2020 and settling at 2.57%.

Non-interest income also declined compared to the third quarter, but was still up from the fourth quarter of 2019. 

For the first time in 2020, U.S. Bancorp did not build reserves in the fourth quarter to prepare for more loan losses, and reported a provision for credit losses more in line with the fourth quarter of 2019, albeit higher.

Net charge-offs (debt unlikely to be collected) dropped from the linked quarter and non-performing assets remained stable, only rising slightly from the linked third quarter of 2020.

 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

U.S. Bancorp Stock Quote
U.S. Bancorp
USB
$51.19 (0.29%) $0.15

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
322%
 
S&P 500 Returns
116%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.