U.S. Bancorp (USB): Mixed 3Q: Muddied By Acqns; Good Non-Int Income, Controlled Expenses Offset Tepid Core Net Int Income

USB posted 3Q core EPS of $1.37 by our calculations, reported EPS was $1.34. 3Q results and trends were muddied by two acquisitions: BTIG, which was included for the full quarter for the first time, and the Amazon card portfolio, which was included for half the quarter. USB is doing a good job of managing expenses, which was the key driver in 3Q, adjusting for acquisitions. Capital markets is a key driver of good fee revenue growth but core growth qoq in 3Q was tempered by seasonality and volatile markets. The bank is restructuring its balance sheet to reduce borrowings and fund loan growth via shrinkage of securities and liquid assets, which raised its NIM but likely gave up a tad of NII. NII rose 2.3% qoq and NIM rose 5bp qoq to 2.84%;