U.S. Bancorp (NYSE: USB), a financial service holding company, provides various financial services to individuals, businesses, institutional organizations, governmental entities and other financial institutions in the United States. It operates in Corporate and Commercial Banking, Consumer and Business Banking, Wealth Management and Investment Services, Payment Services, and Treasury and Corporate Support segments. The company offers depository services, including checking accounts, savings accounts, and time certificate contracts; lending services, such as traditional credit products; and credit card services, lease financing and import/export trade, asset-backed lending, agricultural finance, and other products. In addition, it provides ancillary services comprising capital markets, treasury management, and receivable lock-box collection services to corporate and governmental entity customers. Further, the company offers asset management and fiduciary services for individuals, estates, foundations, business corporations, and charitable organizations. Additionally, it provides investment and insurance products to its customers principally within its markets, as well as fund administration services to mutual and other funds. Furthermore, the company provides corporate and purchasing card, and corporate trust services. The company offers merchant processing, investment management, ATM processing, mortgage banking, insurance, and brokerage and leasing services. U.S. Bancorp was founded in 1863 and is headquartered in Minneapolis, Minnesota.
- Market Cap: 60.489 billion
- PE Ratio: 10.99
- EPS: 3.59
- Dividend Yield: 4.87%
US Bancorp, better known by its U.S. Bank brand, is the largest regional bank and the fifth largest bank in the U.S. U.S. Bank makes the bulk (about two-thirds) of its revenue from net interest income. The bank has $387 billion in outstanding loan balances as of March 2023, with large concentrations in commercial loans and mortgages, but with a substantial credit card portfolio as well. It also has a significant portion of its $510 billion deposit base in the form of noninterest-bearing deposits, which gives it somewhat of a cost advantage over many peers. Top sources of noninterest income include credit card revenue and payment processing fees, investment management fees, service charges, and mortgage revenue.
U.S. Bank is consistently profitable and has historically traded at a valuation premium to other large banks due to its top-notch asset quality and risk management. With about $680 billion in total assets, U.S. Bank is considered a systemically important financial institution, which is often informally referred to as “too big to fail.” This means that U.S. Bank is subject to more regulatory oversight than smaller banks and that its deposits (even the uninsured portion) are considered to be completely safe. This could actually work in U.S. Bank’s favor in the recent regional banking turmoil, as many large-balance accounts have flowed out of smaller banks in favor of the safety of larger institutions. Therefore, US Bancorp is the best stock to own for long-term investors.