Investors Applaud U.S. Bancorp's Q2 Results

U.S. Bancorp USB reported 2.6 percent increase in net income for the second quarter driven by 8.1 percent growth in the top line. As a result, both earnings and revenue came in above the Street analysts' expectations.

Investors also greeted the results by lifting the stock 2.11 percent in pre-market trading on Friday.

U.S. Bancorp earned a profit of $1.52 billion for the second quarter compared to $1.42 billion in the year-ago quarter. Its earnings also grew 3.8 percent to $0.83 a share from $0.80 a share in the comparable period. The latest quarter results included special items of $0.01 share. Excluding that, it would have earned $0.82 a share, which exceeded the Street analysts' predictions of $0.80 a share.

The bank's total net revenue grew 8.1 percent to $5.45 billion from $5.04 billion in the previous year quarter and came in above the analysts' estimations of $5.19 billion. While net interest income grew 4.5 percent, non-interest income advanced 12.3 percent on YOY basis. Its net interest income expanded 0.3 percent on a linked quarter basis. However, its net interest margin slackened four basis points to 3.02 percent.

U.S. Bancorp Chairman and CEO, Richard Davis, commented about the results saying, "U.S. Bancorp reported strong second quarter results, delivering record revenue and net income in an economy that continues to be challenged by global concerns and low interest rates. Despite these economic headwinds we continued to effectively execute on our strategy to be the most trusted choice and to unify the customer experience. The second quarter was a record quarter for us as we once again delivered industry-leading returns, steady loan growth and strength in our fee-based businesses."

He continued, "Steady loan growth, demonstrated by continued strength in commercial loans and momentum in consumer loans, led to increased net interest income despite a decline in net interest margin. Growth in our fee revenue continued across many of our fee-based businesses, including our payments business lines. We also reported strong results in our capital markets business as we were positioned well to provide products and services to our customers as they navigated through the recent market volatility. And we managed our capital effectively, delivering 77 percent of our second quarter earnings back to shareholders through dividends and share buybacks."

U.S. Bancorp said it returned 77 percent its second quarter earnings to its shareholders by way of share repurchase and dividends. The company added that its non-performing assets fell 2.7 percent on a linked quarter basis.