The company reported record quarterly revenue of $7.7 billion, driven by higher fee income, loan growth and continued expansion across its payments franchise. Chairman and CEO Gunjan Kedia said the results reflected execution across multiple businesses, not strength concentrated in any single line.
Payments emerged as one of the clearest storylines. Payment services revenue rose 5.7% year over year to $1.8 billion, or roughly 23% of total company revenue. Card issuing continued to accelerate and corporate payment products rebounded sharply, while merchant processing slowed on softer conditions in Europe. Credit card fee revenue grew 6.1% year over year, and corporate payment products and prepaid revenue climbed 11.8%.
Kedia acknowledged the payments business performed unevenly but said the bank continued to gain traction where it has been directing investment. “Our payments franchise remains an important source of diversification and client engagement across the company,” she said.
Digital Banking, Consumer Activity and Credit Stay in Focus
Management also devoted considerable attention to the consumer franchise, emphasizing that growth is no longer tied solely to the physical branch network.
Kedia noted that U.S. Bancorp now serves nearly 13 million consumer customers through a combination of digital and physical distribution, with roughly 18% of those customers living outside the bank’s traditional branch footprint. Multi-product relationships have risen to 42% of consumer households, while deposits in the Bank Smartly platform now exceed $84 billion. The company also plans to raise annual branch investment to roughly $300 million while continuing to expand digital distribution.
Shares were up 1.6% on Thursday.
Executives also suggested that consumer and commercial demand remains constructive.
Responding to analyst questions about whether artificial intelligence investment is driving commercial borrowing, Kedia noted that loan demand extends well beyond technology infrastructure.
“We do try to look through the motivations behind the loan demand, and it’s quite healthy right now,” the CEO said, adding that the bank is seeing activity across industries ranging from food and beverage to media, technology and power rather than only AI-related projects.
Artificial intelligence surfaced elsewhere during the Thursday analyst call as well. Kedia cited AI development as one contributor to broader economic activity but argued that customer confidence has widened beyond that theme after uncertainty tied to tariffs eased.
Chief Financial Officer John Stern said profitability and credit trends supported the company’s outlook. Stern said during the call that that “key credit quality metrics improved both sequentially and year-over-year, reflecting a stable economic backdrop and the continued fortitude of our clients.”
Those metrics backed up management’s assessment. Nonperforming assets fell nearly 20% from a year earlier, the net charge-off ratio improved to 0.53%, and 90-day delinquencies also declined. Average loans increased 7.1% year over year while deposits continued to expand, giving the bank room to raise its revenue outlook for the full year.
