USB Q3 2026 Earnings: Net Interest Margin Rises to 2.84%

U.S. Bancorp (USB) reported third-quarter 2026 earnings on October 15, 2026, through its Form 8-K earnings materials and earnings call, showing record total net revenue of $7.97 billion, up 8.7% year over year, for the quarter ended September 30 [1][2]. The USB Q3 2026 earnings strengthen the case that the bank's margin recovery and payments shift are working. Before the release, four operating questions mattered: whether the net interest margin could keep expanding while loans grew faster than deposits, whether card issuing and corporate payments could offset weaker merchant acquiring, whether BTIG could deliver about $200 million of revenue a quarter, and whether the provision for the Amazon small business card portfolio would stay within about $160 million [3].

The quarter answered most of those questions. Net interest margin rose to 2.84%, payments revenue growth accelerated to 6.5%, BTIG contributed $226 million, and the initial provision for the card portfolio was $135 million [1][2]. However, fee growth excluding BTIG slowed, the portfolio's revenue contribution has not been disclosed, and the company paused share repurchases in the third quarter.

U.S. Bancorp is a bank holding company headquartered in Minneapolis that provides lending, deposit, payments and investment services to individuals, businesses, institutions and governments. Most of its revenue comes from the spread between loans and deposits, and the rest comes from fees such as merchant processing and trust and investment management [4]. Fees made up about 44% of total revenue in the third quarter [2].

Net interest margin expanded for a second straight quarter

Net interest income growth landed at the top of guidance, and deposit growth supported the wider margin. The net interest margin was 2.79% in the second quarter, and the company had guided to 4% to 6% year-over-year growth in third-quarter net interest income [5][3]. Third-quarter net interest income on a fully taxable-equivalent basis was $4.49 billion, up 5.6% year over year, and the net interest margin was 2.84%, up 5 basis points from the prior quarter [1]. The company attributed the sequential improvement to fixed-rate assets repricing at higher rates and to the newly added card portfolio [1].

The bank did not rely on shrinking its balance sheet or on wholesale funding. Average deposits rose 2.9% year over year, faster than the 2.4% pace in the second quarter, and consumer deposits set another record [1][2]. The rate paid on interest-bearing deposits was 2.22%, down 21 basis points from a year earlier but up 7 basis points from the prior quarter, with about 2 basis points of that increase coming from the September Fed rate hike [6][2]. Management expects fourth-quarter net interest income to grow 6% to 7% year over year, the margin to rise by about another 5 basis points, and the margin to reach 3% in 2027; that path assumes deposit costs rise by about half of any policy-rate move [2]. The card portfolio's contribution to the margin was not quantified, so the size of the organic improvement remains uncertain.

Payments revenue accelerated while merchant acquiring turned negative

Card issuing and corporate payments carried payments growth. Total payments revenue grew 5.7% year over year in the second quarter [7], and third-quarter Payment Services total net revenue was $1.868 billion, up 6.5% [1]. Based on the supplemental schedules, credit card fee revenue rose about 7.5% and corporate payment products and prepaid fee revenue rose about 18.6% [6]. Management said corporate payments growth came mainly from new business and higher corporate and government spending [2].

Merchant acquiring remains the weak spot. Merchant processing revenue was $461 million, down 0.4% year over year, and management expects it to stay around 0% for the next couple of quarters [1][2]. Credit card fees and segment net interest income include a partial-period contribution from the co-brand card, which the company did not break out, so organic growth may be lower than the reported figures.

BTIG beat guidance while core fee growth slowed

BTIG contributed more than guided, but fee growth excluding BTIG slowed. The company had guided to 12% to 14% growth in third-quarter total fee revenue, and fee revenue excluding BTIG grew 9.9% in the second quarter [3][8]. In the third quarter, BTIG contributed $226 million, capital markets revenue rose 69.3% year over year, and total fee revenue reached $3.545 billion, up 14.9%, above the top of the guided range [2][1]. Based on the disclosed figures, fee revenue excluding BTIG grew about 7.6%; over the same period, mortgage banking revenue fell 13.9%, and other revenue included one-time equity investment gains [1][2]. The company guided to 13% to 14% total fee growth in the fourth quarter, with about half of it coming from BTIG [2]. BTIG integration costs were not broken out this quarter, so its profit contribution cannot be verified.

Conclusion

The report strengthens the view of U.S. Bancorp's growth and profit conversion, while capital returns have been pushed back. Third-quarter operating leverage was 240 basis points and the efficiency ratio was 55.9% [1]. The company raised its full-year total net revenue growth guidance to 8% to 9% and its operating leverage guidance to about 300 basis points [2]. About $12 billion of risk-weighted asset growth and unrealized losses from higher interest rates led the company to pause third-quarter buybacks, which it plans to resume within one or two quarters [2]. The card portfolio's provision came in below guidance, the overall net charge-off ratio fell to 0.51%, and the allowance rose to 1.97% of loans [1]. The next tests are whether the margin keeps expanding in the fourth quarter, whether merchant acquiring stabilizes, whether core fee growth recovers, and whether the card portfolio's expected $75 million to $85 million of quarterly revenue can be verified [3].

Sources

[1] USB 8-K filed 2026-10-15 · 3Q26 earnings release (Exhibit 99.1), 2026-10-15, 8-K, https://www.sec.gov/Archives/edgar/data/36104/000003610426000054/a3q26earningsrelease.htm

[2] USB Q3 2026 earnings call 2026-10-15, 2026-10-15, earnings-call, https://ir.usbank.com/financials/quarterly-earnings

[3] USB Q2 2026 earnings call — third-quarter and full-year guidance (USB 2026 年二季度电话会 — 三季度与全年指引), 2026-07-16, earnings-call, https://ir.usbank.com/financial-information/quarterly-results/default.aspx

[4] USB 2025 Form 10-K — composition of noninterest income (USB 2025 年 10-K — 非利息收入构成), 2026-02-23, 10-K, https://www.sec.gov/Archives/edgar/data/36104/000003610426000011/0000036104-26-000011-index.htm

[5] USB Q2 2026 earnings call — net interest income and net interest margin (USB 2026 年二季度电话会 — 净利息收入与净息差), 2026-07-16, earnings-call, https://ir.usbank.com/financial-information/quarterly-results/default.aspx

[6] USB 8-K filed 2026-10-15 · 3Q26 earnings supplement (Exhibit 99.2), 2026-10-15, 8-K, https://www.sec.gov/Archives/edgar/data/36104/000003610426000054/a3q26earningssupplement.htm

[7] USB Q2 2026 earnings call — payments business mix (USB 2026 年二季度电话会 — 支付业务结构), 2026-07-16, earnings-call, https://ir.usbank.com/financial-information/quarterly-results/default.aspx

[8] USB Q2 2026 earnings call — BTIG and capital markets (USB 2026 年二季度电话会 — BTIG 与资本市场), 2026-07-16, earnings-call, https://ir.usbank.com/financial-information/quarterly-results/default.aspx