U.S. Bancorp (USB) shares climbed Thursday after the Minneapolis-based lender delivered a second-quarter earnings beat that had a little bit of everything: record revenue, wider margins, stronger fee income, and a raised outlook for the rest of the year.

Adjusted earnings came in at $1.35 per share, topping the analyst consensus estimate of $1.28. Revenue rose to $7.69 billion, ahead of the $7.58 billion consensus estimate. Net income attributable to U.S. Bancorp increased 20% year over year to $2.18 billion, while earnings per share rose 22% from $1.11 a year earlier.

Record Revenue and a Wider Margin

Total net revenue reached a record $7.71 billion, up 10.1%, while taxable-equivalent net interest income rose 7.5% to $4.39 billion. Net interest margin expanded to 2.79% from 2.66%, a nice tailwind from higher rates and a shift in the deposit mix. Return on average assets improved to 1.26%, while return on tangible common equity reached 18.7%. The efficiency ratio improved to 57.1% from 59.2%, helping generate 400 basis points of positive operating leverage—meaning revenue grew faster than expenses.

Loans and Deposits: Steady Growth

Average loans increased 7.1% to $405.48 billion. Commercial loans rose 14.1%, commercial real estate loans grew 5.8%, and credit card balances increased 8.4%. On the deposit side, average deposits rose 2.4% to $515.08 billion and were broadly stable on a sequential basis. Consumer deposits reached a record for the third consecutive quarter. Savings balances climbed 26.7%, while time deposits fell 18.4% as customers shifted toward higher-yielding options.

Fee Revenue: Capital Markets Shine

Noninterest income rose 13.7% to $3.33 billion, while total fee revenue increased 13.2% to $3.37 billion. Excluding the contribution from BTIG, the brokerage firm U.S. Bancorp acquired earlier this year, fee revenue grew 9.9%. Capital markets revenue surged 62.5% to $512 million, reflecting strong advisory and underwriting activity. Trust and investment management fees rose 11.7%, while lending and deposit-related fees increased 11.2%. Payment Services revenue grew 5.7% to about $1.8 billion, though merchant processing remained soft in Europe.

BTIG: A Boost to Both Revenue and Costs

Noninterest expense increased 5.9% to $4.43 billion. Excluding BTIG, expenses rose 3.9%, reflecting investments in technology, marketing, and compensation. BTIG contributed about $98 million in June fee revenue and $84 million in expenses, producing an approximately 14% pretax margin—a solid start for the acquisition. Capital markets currently represent about 7% of company revenue and 15% of fee revenue. Management targets more than 10% of total revenue over time, so BTIG is a key piece of that strategy.

Credit Quality: Getting Better

The provision for credit losses rose 7.4% to $538 million, mainly due to loan growth, but fell 6.6% sequentially. The net charge-off ratio improved to 0.53% from 0.59%. Nonperforming assets declined 19.9% to $1.35 billion, while the nonperforming asset ratio improved to 0.33%. So credit quality is moving in the right direction, even as the bank continues to grow its loan book.

Capital and Returns

The CET1 capital ratio was 10.8%, and the total risk-based capital ratio reached 14.4%—both comfortably above regulatory minimums. Book value per share rose 11% to $38.91, while tangible book value per share increased 13.3% to $30.04. U.S. Bancorp returned $1.02 billion through dividends and share repurchases and declared a quarterly dividend of 52 cents per share.

Outlook: Raised and Confident

U.S. Bancorp raised its fiscal 2026 revenue guidance to $30.71 billion–$31.28 billion from $29.85 billion–$30.42 billion. The updated range compares with the $30.56 billion analyst estimate. Management maintained medium-term targets for mid-single-digit fee revenue growth, an efficiency ratio in the mid-to-high 50% range, and return on average assets of 1.15% to 1.35%.

Price Action

U.S. Bancorp shares were up 1.33% at $63.85 at the time of publication on Thursday.