Weak Asset Sensitivity Offsetting Improving Efficiency At U.S. Bancorp

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About: U.S. Bancorp (USB), Includes: BAC, C, PNC, WFC
by: Stephen Simpson, CFA
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Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst
Summary

U.S Bancorp isn't getting any real traction from rising rates, and the bank's weak balance sheet growth is limiting revenue growth.

Second quarter results did show some signs of operating leverage, and it sounds as though loan growth could pick up the pace in the second half of the year.

Mid-single-digit earnings growth can support a fair value in the mid-$50's and there are opportunities for U.S. Bancorp to improve its earnings growth rate in the coming years.

Value-based calls on bank stocks don’t really lend themselves to quick outperformance, and U.S. Bancorp’s (USB) shares continue to muddle along as the bank works through some operating challenges in 2018. Although