Shares of U.S. Bank parent company, US Bancorp (NYSE:USB), rose in early trading on Friday, after the company reported an earnings beat for the first quarter on Thursday.

The company delivered positive operating leverage, with "broad-based fee income growth" driving revenue.

The US Bancorp Analyst: DA Davidson analyst Peter Winter reiterated a Buy rating and price target of $65.

The US Bancorp Thesis: The company reported earnings of $1.18 per share, topping consensus of $1.14 per share, with the beat driven by a lower provision and lower tax rate, Winter said in the note.

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US Bancorp's average loan growth accelerated to 2.4%, from 1.4% in the previous quarter, the analyst stated. NIM (net interest margin) remained unchanged sequentially at 2.77%, as strong loan growth was offset by tighter loan spreads, he added.

The highlight of the quarter was the company's broad-based fee income growth, Winter said. Fee income grew 6.9% year-on-year to $3.032 billion, coming in higher than DA Davidson's forecast of $3.002 billion.

“Well controlled” expenses were up 0.8% year-on-year to $4.265 billion, below DA Davidson's forecast of $4.279 billion, the analyst mentioned.  

"After 10 quarters of flat expenses, USB is starting to invest back in the business to drive revenue growth, which they discussed in January, but still have levers to manage expenses if revenues come in lower than expected," he further wrote.

US Bancorp delivered 440 basis points (bps) of positive operating leverage in the first quarter and is likely to deliver more than 300 bps in the second quarter, despite higher expense growth, Winter said in the note.

Management maintained 2026 total revenue growth guidance at 4%-6%. Average loan growth guidance increased to mid-single digit growth, from their earlier projection of 3%-4%.

That guidance implies average loan growth will moderate from the first-quarter levels, Winter says.

USB Price Action: Shares of US Bancorp had risen by 2.29% to $56.75 at the time of publication on Friday.

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