As profits rise, U.S. Bancorp remains vigilant for looming economic uncertainty

U.S. Bancorp, the nation’s fifth-largest bank, posted first-quarter profits with solid returns on fees and net interest income as executives warned of broader uncertainty looming over global trade, consumer confidence and health of the national economy.

CEO Gunjan Kedia, who took the reins as chief executive on Tuesday, said during an analyst call Wednesday that the company remains confident in the face of looming uncertainty, reaffirming the bank’s target of between 3% and 5% growth for the full year.

The bank’s stock closed down 2% Wednesday, mirroring the decline in the S&P 500.

Kedia said U.S. Bank is committed to building a vibrant franchise around its payments business, which includes fees and net interest income for debit cards, stored-value cards, consumer and business credit cards, government and purchasing card services and merchant processing. On the loan side, Kedia said growth has benefited from competitive products attractive to borrowers.

She acknowledged “an environment of intense market and economic volatility,” but said the company’s consistent record on managing risk will continue to offer “a competitive advantage as we go forward.”

U.S. Bank reported $1.7 billion in net income on $6.96 billion in revenue for the first quarter of 2025, outpacing Wall Street estimates. Earnings per share arrived at $1.03, beating a 99-cent consensus estimate from analysts polled by Zacks Investment Research. The company recorded a gain of 78 cents per share during the same period in 2024.

Meantime, income generated through fees notched $2.4 billion, a 5% increase over 2024. Executives pointed to strength in its payments business, though identified some opportunities for improvement.

Big picture, Kedia said the company is coming off two years of heavy focus on its integration of California-based Union Bank into the Bancorp franchise and building back capital following the 2023 banking failures. U.S. Bank, alongside its industry peers, were hit with soaring deposit costs after the abrupt failures at Silicon Valley Bank and First Republic Bank in California.

“We are now focused on organic growth,” Kedia said. “Our momentum on expenses is timely as we navigate a highly uncertain environment, and that gives us strategic flexibility. Moving forward, my top priority is to restore investor confidence in our story and our execution.”

One item bank analysts are watching is consumer spending and the profits generated by charges and fees on credit cards. Although some distress flares have gone up in the form of lackluster consumer confidence surveys and a roller coaster stock market in the face of tariffs, U.S. Bank executives say spending is stable from their viewpoint.

During an interview Wednesday, Chief Financial Officer John Stern said customers are behaving in normal patterns, showing a resilient economy despite uncertainty. Broader economic downturn could come and stagnation is perhaps a greater risk at some point, he said, “but at this point, we’re just not seeing it.”

“We are mindful of it, and we’re watching our client activity, and we are monitoring it, but we feel good about the where we’re at right now and how we’re positioned for any outcome,” Stern said.

Precise effects stemming from tariffs — which generally stand at 10% for most U.S. trading partners, 145% for China — will vary based on the needs of specific clients. One challenge unique to predicting any impact is how, unlike shutdowns during the pandemic, businesses will feel effects in different ways.

“We’re going to have to see how things play out and what the reaction function is of our clients, as well as the overall economy and how it performs over this time,” Stern said.

On the minds of executives and analysts Wednesday was Terry Dolan, U.S. Bancorp’s chief administrative officer, who joined the company in 1998 and previously served as CFO. Dolan died when the private plane he was piloting crashed in the Twin Cities suburbs last month. Kedia said the company has appreciated an outpouring of support “and our thoughts remain with his friends and family.”

U.S. Bancorp managed $676 billion in total assets as of March 31. The company employs more than 70,000 people, including approximately 11,000 in the Twin Cities.