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Dec 31, 2020
US Bancorp Q4 2020 Earnings Report
Reported fourth quarter and full year results, demonstrating resilience amidst economic challenges.
Key Takeaways
U.S. Bancorp reported a net income of $1,519 million and diluted earnings per share of $0.95 for Q4 2020. The results reflected the strength of the diversified business model, delivering industry-leading results despite economic headwinds. Full year revenue reached a record $23.3 billion, with net income of $4.959 billion.
Net income attributable to U.S. Bancorp was $1,519 million for the fourth quarter of 2020, 2.2 percent higher than the fourth quarter of 2019.
Diluted earnings per common share were $0.95 in the fourth quarter of 2020, compared with $0.90 in the fourth quarter of 2019.
Net revenue was $5,751 million, including $3,201 million of net interest income and $2,550 million of noninterest income in 4Q20.
The company's CET1 capital ratio increased to 9.7% at December 31, 2020, compared with 9.1% at December 31, 2019.
US Bancorp
US Bancorp
Forward Guidance
U.S. Bancorp anticipates continued investment in digital capabilities, technology, and people to drive revenue growth and efficiency improvement in 2021.
Positive Outlook
- Maintaining its current quarterly dividend of $0.42 per common share.
- Beginning repurchasing common shares in the first quarter of 2021 under a previously announced $3 billion common stock repurchase program.
- The company's results for the December 2020 stress test reflected the strength of its balance sheet, its diverse businesses and strong financial discipline.
- The company remains subject to the minimum stress capital buffer of 2.5 percent.
- U.S. Bank Mobile App was ranked No. 1 in customer service features in Business Insider Intelligence’s fourth annual US Mobile Banking Competitive Edge Study.
Challenges Ahead
- COVID-19 environment resulting in significantly lower interest rates and consumer and business spending activities.
- Changes in credit quality due to COVID-19.
- Net interest margin declined from a year ago to 2.57 percent in the fourth quarter of 2020 primarily due to the impact of a lower yield curve, loan mix, decisions to maintain higher levels of liquidity, and higher premium amortization within the investment portfolio, partially offset by the net benefit of deposit repricing and funding composition.
- Noninterest expense decreased 1.1 percent despite approximately $22 million of costs related to the COVID-19 environment and an increase in revenue-related production expenses of approximately $96 million in the fourth quarter of 2020.
- Nonperforming assets are expected to remain elevated and volatility in net charge-offs is expected given current economic conditions.