U.S. Bancorp PERP PFD SER A

Strong earnings beat + momentum (what’s good/surprising): U.S. Bancorp reported record net revenue ~ $8.0B and diluted EPS $1.34 in 3Q26, ~10% YoY EPS growth (with ~$0.07 reserve build impact; ~16% EPS growth excluding reserve build). Revenue +8.7% YoY (or ~+6.4% excluding BTIG + securities losses). Operating leverage was strong: expenses +7.1% YoY, implying ~440 bps positive operating leverage (excluding BTIG).

Near-term outlook (forecast): NII/margin + fees supported; targets raised: For 4Q26, management guided NII growth ~6%–7% YoY (FTE), total fee revenue +13%–14% YoY (about half from BTIG), and noninterest expense ~8% YoY (or ~4% excluding BTIG). For full-year 2026, they raised total net revenue growth to ~8%–9% (or 6%–7% excluding BTIG), and increased expected positive operating leverage to ~300 bps (or ~400 bps excluding BTIG). They also expect NIM to rise by a similar amount in 4Q (after 5 bps sequential NIM improvement to 2.84%).

Balance sheet + credit are healthy; key risks acknowledged: Loans +1.0% sequential and deposits +2.2% sequential; CET1 stable at 10.8%. Credit quality remains strong: linked-quarter NPA down ~1.6% and net charge-offs ~51 bps (down slightly). Watch items: They’re most focused on potential commercial real estate stress as rates remain higher, but said no material consumer deterioration so far (strong spend + employment; “not seeing a whole lot of change” in credit).