U.S. Bancorp Sees Strong Growth Amid High Interest Rates and Fee Income.

U.S. Bancorp reported higher-than-expected earnings in Q3 due to high interest rates and strong fee income. The bank achieved double-digit earnings growth, driven by higher net interest income and stable operating expenses. The bank's results exceeded analyst expectations, solidifying its position as a strong growth proposition in the regional banking sector.

U.S. Bancorp (NYSE: USB) reported robust third-quarter earnings, surpassing analyst expectations and demonstrating resilience in the face of high interest rates. The bank's adjusted earnings per share (EPS) of $1.22 exceeded the consensus estimate of $1.13, while quarterly sales of $7.30 billion surpassed the Street's view of $7.16 billion, according to a Benzinga report. The company's net income of $2.001 billion, a 16.7% year-over-year increase, underscores its strong performance, the report said.

The bank's CEO, Gunjan Kedia, attributed the growth to "solid net interest income growth and margin expansion, as well as continued momentum across our fee businesses and prudent expense management," the report quoted. U.S. Bancorp expects quarterly net interest income to remain stable in the fourth quarter, with total fee revenue anticipated at $3 billion. The bank also expects noninterest expenses to rise within a band of 1% to 5% compared to the third quarter of 2025, Benzinga added.

Following the earnings announcement, analysts have revised their price targets. B of A Securities analyst Ebrahim Poonawala maintained a Buy rating and raised the price target from $54 to $55. Wells Fargo analyst Mike Mayo maintained an Overweight rating and raised the price target from $50 to $52, the report noted.

U.S. Bancorp's Q3 results highlight its position as a strong growth proposition in the regional banking sector, driven by high interest rates and strong fee income. The bank's ability to manage expenses effectively and maintain profitability in a challenging interest rate environment further solidifies its standing.