(Bloomberg) — U.S. Bancorp (USB) raked in net interest income that topped analyst estimates as fixed-rate assets in its portfolio benefited from higher borrowing costs.
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The Minneapolis-based bank reported $4.14 billion of NII — what it generates from lending minus what it pays for deposits — in the third quarter, according to a statement Wednesday. That beat analysts’ estimates of almost $4.04 billion.
The results follow earnings from banks including midsize peer PNC Financial Services Group Inc. (PNC) and larger Wall Street rival JPMorgan Chase & Co. (JPM), which both pulled in more NII than analysts expected following the Fed’s 50-basis-point cut last month, its first in more than four years.
Citizens Financial Group Inc. (CFG) also reported earnings on Wednesday, with net interest income of $1.37 billion and $175.2 billion of deposits that both just missed analyst estimates.
Investors are eager for an early look into the impact of the Federal Reserve’s policy pivot. The NII metric is particularly important for regional lenders that lack the robust sales and trading operations of their bigger rivals.
“Net interest income and margin increased on a linked quarter basis benefiting from loan mix, continued repricing of fixed rate earning assets and disciplined liability management,” PNC Chief Executive Officer Andy Cecere said in the statement.
The bank’s shares are up about 8.6% this year, compared with a 25% jump for the S&P 500 Financials Index.
In the third quarter, PNC’s loans totaled $374 billion, missing estimates of $377 billion.
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