Cuộc họp báo cáo kết quả kinh doanh Q3 2026 của U.S. Bancorp (USB): Doanh thu kỷ lục và nâng triển vọng kinh doanh

Nội dung trọng tâm

• U.S. Bancorp ghi nhận doanh thu thuần kỷ lục trong quý 3/2026 đạt khoảng 8 tỷ USD, tăng 8,7% so với cùng kỳ năm ngoái, trong khi EPS pha loãng tăng khoảng 10% lên 1,34 USD.
• Thu nhập lãi thuần trên cơ sở tương đương chịu thuế đầy đủ (FTE) tăng 5,6% so với cùng kỳ năm ngoái và tăng 2,3% so với quý trước. Biên lãi thuần (NIM) mở rộng 5 điểm cơ bản lên 2,84%, và ban lãnh đạo dự kiến mức tăng tương tự trong quý 4.
• Thu nhập từ phí tăng 14,9% và chiếm 44% tổng doanh thu. BTIG đóng góp 226 triệu USD vào thu nhập từ phí trong quý 3, trong khi doanh thu từ mảng thị trường vốn hiện hữu tăng khoảng 10%.
• Dư nợ cho vay bình quân tăng 8,0% so với cùng kỳ năm ngoái và tăng 1,0% so với quý trước. Tiền gửi bình quân tăng 2,9% so với cùng kỳ năm ngoái và tăng 2,2% so với quý trước, nhờ tiền gửi khách hàng cá nhân đạt mức kỷ lục và dòng tiền gửi dựa trên quan hệ khách hàng.
• Các chỉ số tín dụng duy trì ổn định: tỷ lệ xóa nợ ròng giảm 2 điểm cơ bản so với quý trước xuống 0,51%, trong khi tài sản nợ xấu giảm 1,6%. Tỷ lệ vốn cổ phần phổ cấp 1 (CET1) không đổi ở mức 10,8%.
• U.S. Bancorp đã nâng triển vọng tăng trưởng doanh thu thuần cả năm 2026 lên 8%-9% và hiện dự kiến đòn bẩy hoạt động dương khoảng 300 điểm cơ bản.

Dữ liệu tài chính quan trọng

Kết quả kinh doanh và hoạt động

Thị trường vốn là động lực tăng trưởng chính. Doanh thu tăng 69% so với cùng kỳ năm ngoái, phản ánh đóng góp trọn một quý từ BTIG và mức tăng trưởng khoảng 10% của mảng kinh doanh hiện hữu. BTIG đã tạo ra 226 triệu USD thu nhập từ phí trong quý 3. Ban lãnh đạo mục tiêu nâng tỷ trọng mảng thị trường vốn từ 8% tổng doanh thu công ty lên ít nhất 10% trong 3 đến 5 năm tới thông qua tăng trưởng tự thân, tăng thị phần chi tiêu của khách hàng và bổ sung các năng lực sản phẩm mới.

Danh mục thẻ tín dụng doanh nghiệp nhỏ của Amazon đóng góp khoảng 900 triệu USD vào dư nợ cho vay bình quân quý 3 và 1,7 tỷ USD vào dư nợ cuối kỳ. U.S. Bancorp cũng triển khai hợp tác đồng thương hiệu với Amazon, mở rộng các sản phẩm Business Essentials và thành lập các đội ngũ ngân hàng mới tại các thị trường mở rộng.

Doanh thu thanh toán doanh nghiệp tăng khoảng 19% so với cùng kỳ năm ngoái, chủ yếu nhờ các hợp đồng kinh doanh mới và chi tiêu gia tăng từ khối doanh nghiệp và chính phủ. Mảng quản lý vốn tiếp tục tăng trưởng ở mức một chữ số tầm trung. Công ty cũng đã khởi động chương trình thử nghiệm stablecoin USB DC đầu tiên, dù ban lãnh đạo cho biết sự quan tâm hiện tại của khách hàng chủ yếu mang tính thăm dò thay vì phản ánh nhu cầu mạnh mẽ.

Bảng cân đối kế toán tiếp tục dịch chuyển sang các tài sản hướng tới quan hệ khách hàng và tài sản có lãi suất thả nổi. Dư nợ cho vay lãi suất thả nổi chiếm 36% tài sản sinh lời vào cuối quý, so với mức 32% của bốn năm trước đó. Tăng trưởng tiếp tục tập trung vào mảng thương mại & công nghiệp (C&I), thẻ tín dụng và bất động sản thương mại, trong khi nhu cầu thế chấp nhà ở vẫn ở mức trầm lắng.

Tăng trưởng tiền gửi dẫn đầu bởi số dư tiền gửi của khách hàng cá nhân và tiền gửi dựa trên quan hệ khách hàng. Chi phí tiền gửi tăng 7 điểm cơ bản so với quý trước, trong đó có khoảng 2 điểm cơ bản từ đợt tăng lãi suất tháng 9 của Cục Dự trữ Liên bang (Fed). Tổng chi phí vốn chỉ tăng 1 điểm cơ bản nhờ cơ cấu nguồn vốn được cải thiện.

Định hướng của ban lãnh đạo

Cho quý 4/2026, ban lãnh đạo dự kiến so với cùng kỳ năm ngoái:

• Thu nhập lãi thuần trên cơ sở tương đương chịu thuế đầy đủ tăng trưởng 6%-7%.
• Tổng thu nhập từ phí tăng trưởng 13%-14%, với khoảng một nửa mức tăng đến từ BTIG.
• Chi phí ngoài lãi tăng khoảng 8%, hoặc khoảng 4% nếu loại trừ BTIG.
• Biên lãi thuần tăng thêm khoảng 5 điểm cơ bản so với mức quý 3.

Đối với cả năm 2026, U.S. Bancorp hiện dự kiến tổng doanh thu thuần tăng trưởng 8%-9%, hoặc 6%-7% nếu loại trừ BTIG. Mức này cao hơn so với triển vọng 5%-7% đưa ra trước đó. Ban lãnh đạo cũng nâng đòn bẩy hoạt động dương kỳ vọng lên khoảng 300 điểm cơ bản, hoặc khoảng 400 điểm cơ bản nếu loại trừ BTIG.

Ban lãnh đạo tiếp tục nhìn thấy lộ trình hướng tới biên lãi thuần 3% vào một thời điểm nào đó trong năm 2027, được hỗ trợ bởi việc tái ấn định lãi suất tài sản cố định, cải thiện cơ cấu tài sản và nguồn vốn, cùng chính sách thu hút tiền gửi kỷ luật. Khoảng 10 tỷ USD tài sản lãi suất cố định được tái ấn định lãi suất mỗi quý với mức cải thiện lợi suất ước tính khoảng 125 điểm cơ bản. Công ty giả định hệ số beta tiền gửi ban đầu khoảng 50% cho các đợt tăng lãi suất tiềm năng trong tương lai.

U.S. Bancorp kỳ vọng các tỷ lệ vốn sẽ phục hồi và có kế hoạch tái khởi động việc mua lại cổ phiếu trong vòng một hoặc hai quý tới. Ban lãnh đạo nhấn mạnh rằng kỳ vọng này không phụ thuộc vào các lợi ích tiềm năng từ quy định Basel III endgame.

Rủi ro và các yếu tố cần theo dõi

Lãi suất Trái phiếu Kho bạc cao hơn và chênh lệch tín dụng mở rộng đã làm giảm tỷ lệ CET1 điều chỉnh theo AOCI khoảng 40 điểm cơ bản trong quý. Việc phân bổ vốn sẽ phụ thuộc một phần vào lãi suất, sự tăng trưởng tài sản tính theo rủi ro từ hoạt động cho vay và các thay đổi về quy định pháp lý.

Ban lãnh đạo xác định bất động sản thương mại là mảng cần tiếp tục theo dõi trong môi trường lãi suất cao hơn. Tăng trưởng bất động sản thương mại đã chậm lại, trong khi hoạt động thế chấp nhà ở vẫn trầm lắng.

Lộ trình hướng tới biên lãi thuần 3% có thể bị ảnh hưởng bởi những thay đổi của đường cong lợi suất và sự cạnh tranh tiền gửi. Tăng trưởng thu nhập từ phí thế chấp cũng dự kiến bị hạn chế trong quý 4 do lãi suất cao hơn.

Doanh thu xử lý thanh toán chấp nhận thẻ dự kiến sẽ đi ngang trong vài quý tới. Ban lãnh đạo cũng cho biết nhu cầu diện rộng của khách hàng đối với thanh toán doanh nghiệp bằng stablecoin vẫn chưa hình thành.

Điểm nhấn phiên Hỏi & Đáp với chuyên gia phân tích

Ban lãnh đạo cho biết lượng hồ sơ vay thương mại & công nghiệp (C&I) đang chờ xử lý vẫn rất tích cực trong các ngành thực phẩm & đồ uống, năng lượng và công nghệ. Số dư của một số tổ chức tài chính phi nhận tiền gửi đã giảm do các giao dịch mới không đáp ứng ngưỡng sinh lời, nhưng công ty dự kiến số dư cho vay C&I sẽ tăng trong quý 4.

Về việc hoàn trả vốn cho cổ đông, ban lãnh đạo dẫn chứng khả năng tạo lợi nhuận bình thường làm cơ sở để tái khởi động chương trình mua lại cổ phiếu. Ngân hàng đã tạo ra 33 điểm cơ bản vốn sau khi trả cổ tức trong quý và tiếp tục cam kết tỷ lệ phân phối vốn từ 70%-75% theo thời gian.

U.S. Bancorp có kế hoạch tăng đầu tư hàng năm cho mạng lưới chi nhánh từ khoảng 200 triệu USD lên 300 triệu USD. Trọng tâm ban đầu là tăng mật độ tại các thị trường hiện hữu, sau đó tiến tới mở rộng có chọn lọc ra ngoài phạm vi hiện tại. Các trung tâm khách hàng sẽ hỗ trợ các hoạt động thương mại toàn quốc, quản lý tài sản, thế chấp, thị trường vốn và doanh nghiệp nhỏ.

Ban lãnh đạo cho biết trí tuệ nhân tạo (AI) là một yếu tố đóng góp vào năng suất, bên cạnh các khoản đầu tư kỹ thuật số rộng lớn hơn và kỷ luật chi phí. Ngân hàng đang tập trung kiểm soát chi phí mô hình và áp dụng cách tiếp cận thận trọng hơn đối với AI giao tiếp trực tiếp với khách hàng do các cân nhắc về quyền riêng tư và niềm tin của khách hàng.

Công ty dự kiến cơ cấu dư nợ cho vay sẽ tiếp tục dịch chuyển sang thẻ tín dụng, thương mại & công nghiệp (C&I) và bất động sản thương mại. Thế chấp nhà ở có thể giảm từ mức khoảng 30% tổng dư nợ vào đầu năm 2026 xuống khoảng 25% theo thời gian, chủ yếu vì các danh mục khác đang tăng trưởng nhanh hơn.

Toàn văn biên bản cuộc họp báo cáo kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Welcome to the U.S. Bancorp Third Quarter 2026 Earnings Conference Call. [Operator Instructions] This call will be recorded and available for replay beginning today at approximately 10 a.m. Central Time.

I will now turn the conference call over to Brian Mauney, Director of Investor Relations for U.S. Bancorp.

Brian Mauney

Thank you operator, and good morning, everyone. Today, I'm joined by our Chairman and Chief Executive Officer, Gunjan Kedia; and Vice Chair and Chief Financial Officer, John Stern. In a moment, Gunjan and John will be referencing a slide presentation together with their prepared remarks. A copy of the presentation or press release and supplemental analyst schedules can be found on our website at ir.usbank.com.

Please note that any forward-looking statements made during today's call are subject to risk and uncertainty. Factors that could materially change our current forward-looking assumptions are described on Page 2 of today's earnings presentation, our press release and reports on file with the SEC. Following our prepared remarks, Gunjan and John will be happy to take any questions that you have.

I will now turn the call over to Gunjan.

Gunjan Kedia

Thank you, Brian. Good morning, everyone. Beginning on Slide 3. We delivered another strong quarter, highlighted by record net revenue of approximately $8 billion and diluted earnings per share of $1.34, up approximately 10% from a year ago. Results in the quarter reflect strong execution against our 3 strategic priorities. Net revenue grew 8.7% year-over-year; disciplined productivity drove 240 basis points of positive operating leverage; and in payments, our transformation efforts continued to gain traction with total payments revenue growing 6.5% year-over-year.

Turning to Slide 4. Fees continued to grow nicely and contributed 44% of total revenue again this quarter. Our fee complex is diversified and deepens client relationships generates attractive returns and contributes to a more balanced earnings profile. While fee growth does come with higher expenses, productivity initiatives including from our AI programs helped improve our efficiency ratio and increased return on average assets year-over-year.

On Slide 5, the Spotlight Global Capital Markets an attractive growth opportunity across a range of economic scenarios. We closed the BTIG acquisition in June, and it contributed $226 million of fee revenue in the third quarter. The combined businesses are off to a wonderful start and already working very closely together to broaden how we serve our clients. We expect capital markets to grow from 8% to 10% or more of total company revenue over the next 3 to 5 years by focusing on 3 strategies. One, continue to drive robust core organic growth across both franchises in line with their historical performance. Second, deepen wallet share with our clients where we deploy significant balance sheet resources. The addition of BTIG strengthens our ability to serve a broader range of needs and capture greater fee revenue over time. And third, by adding product capabilities across both platforms.

We look forward to sharing more on our capital market strategy at a conference later this fall and are committed to providing more disclosures in due course as the business becomes a larger part of our revenue mix. With fees and expenses in a healthy place. This year, we have increasingly turned our attention to strengthening net interest income and margin. an important lever of this growth is expanding our consumer and small business franchise, which provides a highly attractive source of funding.

Slide 6 is a busy chart. It captures our footprint and expansion strategies. We are densifying our branch presence and leveraging client centers that have long supported our national businesses. We are supporting this ground game with targeted brand investments including through our NFL partnership and new brand ambassadors, such as Fernando Mendoza, Christian McCaffrey and most recently, Jessica Alba, for our small business segment.

Turning to Slide 7, we highlight small business banking. We serve more than 2 million small businesses through a scaled interconnected platform that contributes meaningfully to company revenue and is an invaluable source of stable, well-priced deposits. Over the past several years, we have built a unique foundation of banking, payments and cash management capabilities. This quarter, we launched several major initiatives to expand their reach with small businesses as we onboarded the Amazon co-brand partnership expanded the Business Essentials suite of products and establish new banking teams in expansion markets. We have a truly differentiated set of products and an enviable client footprint with small business, and this segment will be an important priority going into 2027.

Finally, on Slide 8, I want to spend a moment on corporate payments and treasury management. which together represent approximately 6% of our company revenues. The corporate payments landscape has the potential to be transformed by the growing convergence of treasury management rails like ACH and wires, card rails and new stable coins and tokenized deposits. These businesses have delivered a strong quarter benefiting from market share gains as well as tailwinds from fuel price increases in our fleet and freight businesses. Earlier this quarter, we launched our first USB DC stable corn pilot. While these trends are emerging, we are uniquely positioned to succeed in corporate payments, and we are investing to create interoperability across these rails to deliver both the benefits of new technologies and the safety and soundness of the banking system.

Let me now turn it over to John.

John Stern

Thanks, Gunjan, and good morning, everyone. Third quarter results reflected another strong quarter and demonstrated continued execution against our strategic priorities, generating meaningful revenue growth and significant positive operating leverage. Results remain firmly within all of our medium-term target ranges.

If you turn to Slide 9, we provide highlights for the third quarter. We reported earnings per common share of $1.34, with approximately $0.07 impact from reserve build this quarter. This equates to 10% year-over-year EPS growth or 16% excluding the reserve build. Revenue was a record $8 billion, up 8.7% from a year ago or up 6.4% adjusting for BTIG and securities losses. Meanwhile, expenses grew 7.1% year-over-year or 2.0% excluding BTIG, implying 440 basis points of positive operating leverage, excluding BTIG. Balance sheet trends remain constructive. Loans grew 1.0% and deposits grew 2.2% sequentially, while the net interest margin expanded 5 basis points to 2.84%. Credit quality metrics remained healthy across the board. Linked quarter nonperforming assets declined 1.6%, and net charge-offs declined 2 basis points to 51 basis points. CET1 ratio remained stable at 10.8% and tangible book value per share was up 5.4% year-over-year.

Slide 10 provides our key performance metrics. Our profitability metrics continued to move up and to the right, while our efficiency ratio improved toward the better end of our medium-term target range.

Slide 11 provides a summary of our loan and earning asset mix evolution. Average loans grew 8.0% year-over-year and 1.0% sequentially. Versus the prior year, growth continues to be driven by C&I, credit card and commercial real estate, categories that typically deepen relationships and deliver incremental fee opportunities. The Amazon small business credit card portfolio contributed approximately $900 million and $1.7 billion to the third quarter average and period end loans, respectively. Importantly, our focus in these loan growth areas is naturally positioning our balance sheet to become more asset sensitive. For example, floating rate loans comprised 36% of earning assets as of quarter end, up from 32% 4 years ago.

Slide 12 provides a summary of our deposits and funding mix. Total average deposits grew 2.9% year-over-year and 2.2% sequentially. Growth was driven by another record quarter of consumer deposits, along with strong growth in relationship-based deposits in businesses like investment services. Importantly, we achieved growth while staying disciplined with respect to pricing. Deposit costs increased 7 basis points sequentially, with approximately 2 basis points of impact from the September Fed rate hike. Notably, our total funding costs are up just 1 basis point quarter-over-quarter as our funding mix continues to improve.

Turning to Slide 13. Net interest income on a fully taxable equivalent basis increased 5.6% year-over-year and 2.3% linked quarter. The increase was driven by continued relationship-based loan and deposit growth and improving earning asset and funding mix and ongoing benefits from fixed asset repricing. Net interest margin improved 5 basis points sequentially to 2.84%, driven by improving loan yields and fixed asset repricing benefits. We currently expect net interest margin to increase by a similar amount in the fourth quarter.

Slide 14 highlights fee revenue trend within noninterest income. Total fee income increased 14.9% year-over-year, with broad-based strength across most fee categories. Capital Markets growth of 69% year-over-year reflects a full quarter contribution from BTIG and approximately 10% growth across legacy capital markets.

Moving to Slide 15. Noninterest expense increased 7.1% versus the prior year reflecting BTIG and continued investment in growth initiatives, marketing, technology as well as compensation associated with the strong revenue generation for this quarter. These increases were partially offset by ongoing expense discipline across the bank.

Slide 16 highlights the broad-based favorable trends we are seeing in credit quality. On the right side of the page, we highlight the longer-term evolution of our credit card portfolio. Card balances have increased at a brisk pace in recent years as our payments transformation takes hold. At the same time, FICO bands have marginally improved and net charge-offs and delinquencies have trended lower. In short, we are growing the portfolio without compromising on underwriting standards.

Turning to capital on Slide 17. As of September 30, our common equity Tier 1 capital ratio was 10.8%, stable compared to the prior quarter. Adjusting for AOCI, the CET1 ratio declined 30 basis points to 9.1%.

On Slide 18, we break out the components that drove the sequential changes in the AOCI adjusted CET1 and tangible common equity ratios this quarter. As it pertains to the adjusted CET1 ratio, strong earnings generation, net of dividends, added approximately 30 basis points of capital. This is offset by $12 billion of risk-weighted asset growth associated with heavy loan demand in the quarter and impact from our recently onboarded strategic business partnership. Additionally, the significant increase in treasury rates and widening credit spreads during the third quarter impacted the ratio by an additional 40 basis points. Conversely, the tangible common equity ratio remained stable at 6.6% at quarter end. Strong earnings growth and lower ending assets offset the AOCI drag from higher rates. Despite a sharp move in rates this quarter, we maintained healthy capital levels and continue to have flexibility in how we manage the balance sheet. We expect our capital ratios to build from here, positioning us to resume share repurchases over the next quarter or 2.

Turning to forward-looking guidance on Slide 19 for the fourth quarter and full year 2026. For the fourth quarter, on a year-over-year basis, we expect net interest income growth of 6% to 7% on a fully taxable equivalent basis. Total fee revenue growth in the range of 13% to 14% with roughly half of the growth coming from BTIG and noninterest expense growth of approximately 8% or closer to 4%, excluding BTIG. For the full year 2026, we now expect total net revenue growth of 8% to 9% compared to the prior year or 6% to 7%, excluding BTIG. This has improved from our prior guidance range of 5% to 7%. We now expect to deliver approximately 300 basis points of positive operating leverage for the full year or approximately 400 basis points, excluding the impact from BTIG. This is up from prior guidance of 200 and 300 basis points, respectively.

Moving to Slide 20. This was another strong quarter for us, reflecting continued execution comfortably within all of our medium-term target ranges. We continue to see momentum across our business, which gives us confidence in our ability to build on these results and deliver consistent, sustainable returns over time.

Let me now hand it back to Gunjan for closing remarks.

Gunjan Kedia

Thank you, John. As we look to the end of 2026, we are executing well against the strategic priorities we outlined at the beginning of the year and seeing that progress translate into stronger performance across the bank. Our diversified business mix, customer-centric approach and disciplined execution position us to deliver attractive returns and long-term shareholder value.

With that, we'll now open the call for your questions.

Operator

[Operator Instructions] Your first question comes from the line of John McDonald from Truist Securities.

Phần hỏi đáp

John McDonald

Gunjan mentioned the increased focus on growing net interest income and strengthening the margin. John, could you unpack some of the drivers of your NII outlook from here, including what you see ahead for loan growth and deposit trends?

John Stern

Sure. We're going to see similar themes in the fourth quarter that we just saw in the third quarter. Loans have been strong, and they remain strong from a pipeline standpoint. So we expect similar type growth there. Of course, as a reminder, included in that, we have the Amazon small card book that we get the full quarter impact as well. Deposits are performing well. We continue to see nice growth in our consumer franchise as well as small business, and we see new trends there. And then in terms of the net interest margin, we've made the comment that margins should increase by a similar amount this next quarter, and that's going to be just aided by the funding and asset mix that we have. that is improving as we've been talking about. So there's a lot of momentum that we have, and that's going to be -- that's reflected in our guide and what we discussed.

John McDonald

And just to follow up on that, in terms of the net interest margin drivers, could you give us a little feel for how rates -- rising rates impact it, maybe an update on fixed asset reprice and your deposit beta assumptions.

John Stern

Sure. So we aim to be as neutral as we can be from an interest rate risk perspective. However, given this environment, we have been shifting more into asset sensitivity. And you're starting to see that come through. In terms of loans, we've been shifting more into C&I, commercial real estate and card, all predominantly floating rate assets, as you know. And then in the investment portfolio, that has been coming down and we've been doing more in cash. So we have been shifting there a bit. In terms of -- I think you asked about fixed asset repricing, I would say there that we continue to see about $10 billion or so of per quarter of fixed rate assets that reprice whether that's in the securities book or in the loan book, and that's coming on probably at about 125 basis point improvement or so that's improved a little bit just because of the backup in rates as we've seen. And then finally, you asked about deposit betas. We think that betas pick up right where they left off from the last rate hike. So we're assuming about a 50% or so deposit beta to start out with and likely to continue as we see a couple of hikes kind of coming up in our forecast. So those are kind of the main points.

Operator

Your next question comes from the line of Scott Siefers from TD Cowen.

Unknown Analyst

As first one, just sort of a top level it's ended up being a much better year. I think we knew it was going to be a good year from the standpoint of positive operating leverage. It looks like it's coming in even better than expected. I guess as you think about things looking ahead, maybe just sort of top-level thoughts on balance between profitability improvement, investment, just sort of top level how you're thinking about those things?

John Stern

Yes. Sure, Scott. Yes, I mean, from our seat, obviously, we had strong growth in revenue, and that has been increasing and gaining momentum as the years come on. And so that's going to be the fundamental driver for why the increase in operating leverage this year from that 200 basis points now up to 300 basis points. We obviously have been onboarding a lot of revenue with the Amazon card book. and BTIG coming online. That's north of $1 billion of revenue we've onboarded. And we signaled this at the beginning of the year, we said that operating leverage, we wanted to be more of a driver from revenue growth because we know we can manage the expense side. We have a lot of levers to do that. So as we look forward, and we're early in the budget process, so we're not giving any guidance, but we anticipate operating leverage next year just kind of given similar drivers that we're seeing this year.

Gunjan Kedia

And Scott, I would just add that we have runway on productivity initiatives. As you know, we have materially invested in our digital capabilities over 5 years. And that just delivers ongoing productivity, and we continue to be very intentional about how much we spend on technology investments. So all in all, I would say it's not a trade-off. We don't think about operating leverage for shareholders or investing into the business. The business model is capable of generating both of them in balance.

Unknown Analyst

Perfect. Okay. And then, John, just maybe on the repurchase comment, there's been a lot of focus following just sort of the pause that you disclosed a month or so ago. It sounds like you'll restart either this quarter or next quarter. Maybe just thoughts on kind of the main factors you're thinking of -- thinking of as you anticipate returning to repurchase and maybe just sort of the balance between common equity Tier 1 build, TCE considerations, et cetera?

John Stern

Sure. Yes. So maybe just to recap, the third quarter had a lot of unique events in it for us. We had strong loan growth. We obviously had the Amazon book that added some capital demands and then obviously, the large rate move, which we all saw, of course. But given our unique position and just our prudent nature, we decided to pause, but we have a high degree of confidence in our ability to generate capital. I mean this quarter, after dividend distribution, we generated 33 basis points of capital. So we know we can build that back very quickly. I would just say what we're looking for this quarter is we're looking at loan demand? Where does that actually end up shaking out? Obviously, we believe that there will be growth, as I have mentioned in a previous comment, but interest rates, we're watching that very closely. And then obviously, you have the added component of regulation. We anticipate some new rules coming down. So the combination of all that, we are watching that will be the driver of whether it's this quarter or next. But in the meantime, we obviously are very much committed to the 70% to 75% payout from a capital distribution standpoint.

Operator

Your next question comes from the line of Manan Gosalia from Morgan Stanley.

Manan Gosalia

I wanted to ask on commercial loan balances. The average loan balances were essentially flat sequentially. And I think utilization rates declined slightly. Can you talk about what you're seeing in terms of underlying corporate borrowing demand given that rates are expected to go up, most of your clients are on the short end of the curve? Is there some reduction in demand overall or in terms of the slowed down this quarter, was any of that related to, I guess, capital levels and the ability to deploy capital given the shift in the long end of the curve?

John Stern

Sure. Thanks, Manan. What I would say is that the underlying core C&I growth was very healthy and strong. We did have some runoff in some balances related to more in that NDFI space. And some of this is just new deals coming to market didn't hurdle areas, and we've been more thoughtful on that of late. And so that's really the reason that you see the C&I component being pretty flat on a linked quarter basis. We do anticipate that to increase as we look into the fourth quarter. So the pipelines remain robust. And it's in all the areas that we've talked about in terms of food and beverage and energy and technology. Those are obviously very strong demand for loans at this point. So those are kind of the core things I'd say on the C&I line.

Gunjan Kedia

I would add that the only place we've seen a little slowdown is commercial real estate and residential mortgage continues to be very muted. But otherwise, C&I loan demand is quite robust and broad based.

Manan Gosalia

Got it. And can you unpack those comments you just made on the capital side a little bit more. So you mentioned the potential for regulators to change the tethering rules and how that might give you some flexibility. So I guess, are you saying that if the 10-year kind of stays where it is, plus you get some more color from the regulators on which way they're taking it that you can stock buybacks as soon as the fourth quarter?

John Stern

Yes. I mean that's a component. Obviously, we're going to -- we're all anxious for Basel III endgame. We've signaled that, that's about a 5% or so improvement to the RWA, but that's from the proposal. Things can change. So we need to see that. The [indiscernible] comments have been in the news. And so we're watching for that to see if anything comes online in that regard. So those are incremental pieces of information, but also it's going to be rates and RWA/loan growth. I mean those are the 3 main components. And we'll clearly update you. But it's clear. We're going to be -- we'll be starting that back up and we'll glide back up into that 70% to 75% as we just mentioned, we have a high degree of confidence in our capital build.

Operator

Your next question comes from the line of Ebrahim Poonawala from Bank of America.

Ebrahim Poonawala

I guess maybe is the first question, the Slide 6 where you have the national footprint. Just talk to us in terms of what the strategy around the client centers is, obviously, you've seen many of your peers announced significant branch expansion in new markets. Is this a precursor to adding a ton of branches? Or is this an indication that you don't see a ton of value adding hundreds of branches and the client centers allows you to achieve and reach the same outcomes? I would love just your strategic sort of thought process behind that?

Gunjan Kedia

So I'll just start by saying we do see value in branches, and we do see them as anchoring very high-quality customer relationships. Just to back up a little bit, we had been on a journey for really a decade to transform our branch network from what used to be a lot of small Tier 3 service outlets to more advice hubs with most of our products being represented there. That was the renovation strategy that is finishing up now, and we are beginning to lean into new branches. We have shared that our branch investment has increased from $200 million or thereabouts on average to $300 million, which is what we expect to do going forward. And those will be more new branches. Our first phase of that work is to densify within our own footprint. As you see from the blue dots, we are in a vast territory, and we have real meaningful opportunity to get to 8% to 10% branch share in those markets within our footprint that have high household formats.

There, our brand, is already known. We are our operations already established and the return is very high. It is fully our expectation that over time, we will inch out from that footprint to other branches. The client centers on the other hand, are an interim answer that is faster for us to establish national presence. This is not a new strategy. Our commercial teams, our wealth teams, our mortgage teams and our commercial real estate teams have been operating out of our footprint. The Northeast is a big site for capital markets type of businesses as well. And what we have done more recently is to say, small business can also operate out of client centers. So the strategy is both and it's a matter of sequencing.

Ebrahim Poonawala

Got it. So I guess, safe to say over time, those red dots, which feel quite lonely will get accompanied by more blue dots. .

Gunjan Kedia

We hope to make them less loan, Ebrahim, yes.

Ebrahim Poonawala

Understood. And just one separate question on the broad-based C&I growth. Obviously, even in the last week, your -- markets are once again questioning the AI CapEx build-out. To the extent you have visibility, just talk to us when you think about broad-based C&I growth, how much of that are you able to see is the second, third derivative of the data center build-out versus just other industries we are seeing growth, which may be less connected to the AI CapEx cycle?

John Stern

Thanks, Ebrahim. Yes, it's a topic that comes up frequently for us. We are looking to see if there's loose as to how much of growth and credit impact there is related to AI. I mean, obviously, you have adjacent sectors like energy and telecom and things like that, areas that are seeing benefit in loan growth. But then there's other other areas that are more broad-based that are beyond that in terms of retail and food and beverage and insurance and all these other sorts of things. So it is broad-based. And I would actually add on top of that small business with SBA loans and things like that. Just a lot of -- there's a lot of momentum in the business community to want to grow. And so, that is on our mindset right now. And so we're watching for that, but it is a topic we certainly look at.

Ebrahim Poonawala

Your next question comes from the line of John Pancari from Evercore ISI.

John Pancari

If you can maybe unpack a little bit of the trends you're seeing within the fee income space, particularly around treasury management and processing and corporate payments. Just some of the business color that you're seeing in terms of demand as well as kind of as you look going into 2027, what's a good reasonable pace of growth as you continue to emphasize those businesses? And then maybe a similar color around the underlying pipeline that you're seeing in the capital markets side.

John Stern

Sure. So yes, a couple of things there. So I'll start on the treasury management and corporate payments side. Obviously, you saw some very strong growth on that side of the equation. The -- there's -- obviously, on the corporate payment side, we saw about 19% year-on-year growth. Most of that is new business as well as the spending from corporates and government is up quite a bit from last year at this time. I recall this time last year, there was the impacts of tariffs and all that sort of things. So that -- we've lapped all that, and so there's good growth there. There's a little bit of fuel spend as well in there, but that's -- that's pretty nominal in terms of the growth rate. So we do expect continued growth in the or corporate payments side of the equation.

And then the treasury management side is continuing to see nice growth in that mid-single-digit area. It's an important business. We've been making a lot of investments of late. And so we are doing a lot in terms of the payable and digital channels and capabilities. And so going forward, we have high hopes in these 2 areas for sure.

On the capital markets side, we continue to see strong growth there into the next quarter. Obviously, we had a very strong growth of 69% or so this quarter. And on the -- and we -- BTIG will continue to be a strong component of that at about $200 million or so. But our core FICC or legacy capital markets led by commodities, foreign exchange and impact finance are really showing some nice growth, and that's going to help us get some more in the double-digit type of growth on a year-over-year basis. So we feel very good about those areas.

John Pancari

Okay. That's helpful. And then on the margin side, just looking for a little bit more color just what you're seeing in terms of competition. Like I heard you on the deposit beta commentary. What do you see there on deposit pricing in terms of market trends and how that's influencing your actions on the deposit side? And then similarly, on the loan side, I know you mentioned little earlier that within the C&I book, a couple of deals didn't hurdle, but you expect to pick up. What are you seeing, I guess, in terms of pressures on spreads and loan pricing on the lending side?

John Stern

Sure. The answer is going to be pretty boring. We're not seeing a whole lot of change in both deposit and the loan side of the equation from a pricing standpoint. The post hike, the pricing that we are seeing is very consistent with what you would expect. There's nothing out of the ordinary. And I would say, similar on the loan side, there are loan spreads by and large, tend to be pretty stable, and it's competitive, of course, but it's completely -- it's manageable.

On the C&I side of the equation, as I just mentioned, some of those things just didn't hurdle. And that -- some of that is a little bit more. We've been more prescriptive with the businesses in terms of making sure that things hurdle. And so it's a little bit of a dial turn for us that, that occurred. But we see broad-based growth in the C&I portfolio.

Operator

Your next question comes from the line of Ken Usdin from Autonomous Research.

Kenneth Usdin

John, can I just ask you to just walk through a couple of more things on fees. So obviously, the guide implies sequentially lower fees for the fourth quarter, and I know a lot of that is seasonal. Can you just kind of remind us what usually happens in the payment lines does capital markets hold up at the third quarter level? I know you're saying $200 million of BTIG versus $226 million and then can you size the amount of equity gain that were in the other line and what that line should usually look like?

John Stern

Sure. Yes. So we are -- the fourth quarter from a year-over-year growth standpoint, is going to look a lot like the third quarter with a couple of exceptions, which explains the slightly down growth rate, although it's still very, very strong. Mortgage is going to be impacted by higher rates. And so we anticipate there to be more of a limited or low year-on-year growth, if any. And then other revenue, we did have some gains that were more unique to that this quarter. And so our other revenue tends to be in that $125 million to $150 million range. So we anticipate that to kind of normalize into that. .

Other than that, I think things like Corporate Trust continues to be very strong. I talked about capital markets and many of the payments lines. We see strong growth in corporate as well as retail cards. Merchant will probably be still in that 0% area for the next couple of quarters, as we've talked about. And then all the other areas are about as expected. So it's shaping up to be a lot of momentum for us in the fee side of the equation.

Kenneth Usdin

Perfect. And then secondly, with the NIM up 5% this quarter and you're saying about the same amount, it's a [ 290-ish ] exit. Can you just talk about, I know balance sheet size and mix will be an important part of this answer. But your comments previously about getting to a 3% NIM in '27. Can you talk about just how that looks and what needs to happen in terms of the mix and size of the balance sheet vis-a-vis prior questions on rates and such?

John Stern

Yes. Ken, we see -- continue to see a path on the 3% NIM at some point in 2027. You're starting to see that thesis play out as we've talked about. It's a constant formula of just consistent asset repricing as we've -- as I just mentioned, obviously, the asset and funding mix is continuing to improve. And then we're just being thoughtful in terms of deposit acquisition versus cost. So those are the formula -- that's the formula and the ingredients that we need to continue to do what we're doing on the NIM side. Obviously, the curve and deposit competition may have something to say about that in the end. But we're we have a lot to like about in terms of the trajectory we are making on that path. So we feel good about it.

Gunjan Kedia

I'll add one thing that we are very disciplined about improving both the deposit mix and the loan mix, which is helping the NIM situation. And for the fourth quarter, we have the full year impact of the Amazon deal, which is a nice tailwind. But we are continuing to focus on credit card receivables, which are growing very well, the C&I loan and CRE. And as that becomes a bigger part of our loan book and deposits become more relationship-oriented, it gives us it gives us strengthening NIM and NII growth for some time.

Operator

Your next question comes from the line of Chris McGratty from KBW.

Christopher McGratty

Maybe a question on credit, maybe the higher rate environment. Any comments from the team on the impact you've seen so far in consumer and also health of the commercial customer. I know you talked about moving some of the DFI lending out in the quarter.

John Stern

Sure. Chris, so on the credit side, we haven't really seen a whole lot of change in that. It's obviously a watch item when we think about the impacts of higher rates. Right now, we're not seeing anything on the consumer side. Spend levels are high, employment is strong. So there just continues to be strong patterns there despite sentiment and things of that variety. So -- and then on the commercial side, and commercial clients are well managed. They have strong balance sheets. They've been going through a lot over the last several years, and they've been very nimble. I think the area we are watching, obviously, is going to be in the commercial real estate side. You always want to watch when rates go up. And obviously, when we underwrite, we build in cushion for a rate move. So it's well understood and managed. But we -- but it's going to be an area that we watch, but nothing at this point to call out.

Christopher McGratty

Okay. I think I may have asked this in prior quarters. But just in the broader balance sheet optimization discussion today with where rates have moved and the growth that's occurred, anything additionally, that might be ripe for optimization, whether it be the funding base, perhaps syndicating more production into the capital markets for a quarter or 2? Anything we should be aware of there?

John Stern

Yes. I think we're doing the actions, and we -- I would just anticipate continued action from us. We -- in this environment, you want to be very active in your management of the balance sheet. And I've already mentioned several of those things that we've done. Maybe some other things you probably noticed, you've seen that our long-term debt fell a few -- a couple of billion dollars as well as the investment portfolio. We did repay some home loan bank advances that were long-term debt, but really, there wasn't much maturity left in them. So we're just being -- and as I mentioned, the investment portfolio, we've been lowering that amount and put going more into cash. So we're just doing a lot of things to kind of optimize the balance sheet for the rate environment that we're entering, and we feel good about taking action as needed.

Operator

Your next question comes from the line of Gerard Cassidy from RBC.

Gerard Cassidy

Back in your Investor Day, Gunjan, I guess it was the fall of '24, you talked a lot about interconnectedness. And when you look at your Slide 5 on the BTIG, you talked about deepening the client base. Can you share with us how that opportunity for the cross-sell into your existing client base for BTIG products and vice versa? How is that proceeding? And what are the opportunities that you folks see for growing that business through that interconnectedness?

Gunjan Kedia

Thank you, Gerard. It's actually gone very well. As you know, when we did the BTIG deal, the biggest questions were around cultural fit and the chemistry is very good and the substantive ability to deepen relationships is very good. As you know, we deploy a very significant balance sheet to our corporate relationships and having more product to get your fair share of fee revenue is an important part of the interconnected thesis, and it's coming through very nicely. It's also been very encouraging to see it on the other side. We have developed a very sizable relation -- book in leveraged ETS. And a lot of the trading opportunity that comes from that helps BTIG too. So we expect that this will be a very good deal for us, and we are very confident in getting the combined capital markets business to about 10% of total net revenue or more over time. And that completes the product set. .

I'll ask -- I'll also answer a broader question on interconnectivity, which is really playing out with deposits. right now. There's a lot of discussion around deposit cost, deposit betas and the smartly product that we launched about 2 years back now just around the Investor Day, connects our banking products to our credit card products. and allows a person to optimize their card rewards based on their deposit relationships. That product has been very successful for us using the funding mix improvements based on that. And that's exactly the thesis we are taking now to small business. So this theme of interconnectedness is very present in the company. It takes incentive changes, some changes to oak structures, some development of skill sets. But we've had a lot of momentum there and will continue to be a very big part of our strategy even into next year.

Gerard Cassidy

Very good. And then as a follow-up, obviously, maybe you can update us since you've been very active in doing some bolt-on acquisitions, just at BTIG, for example, as well as the portfolio acquisition, where are you guys standing out in terms of either more bolt-on acquisitions as you look out into the future or possibly even in depository acquisition.

Gunjan Kedia

Sure. Our point of view remains consistent. We like bolt-on acquisitions. We are good at it and they give us local scale and products. And we don't think of them as fundamentally different from investing organically into our business. On deposit reacquisition, we find our organic strategies to have compelling strategic financial and execution characteristics. And we are very, very focused on that part of the strategy and have a lot of momentum there.

Operator

Your next question comes from the line of Mike Mayo from Wells Fargo.

Michael Mayo

So you increased your guide for operating leverage this year by 100 basis points. And I think you said one reason related to AI and that's a little surprising because it's hard for banks to actually quantify benefits and banks usually talk about AI benefits more general terms and productivity and stuff like that. Were you talking in a more general sense? Or do you actually have numbers around it? And how are you using AI? And why do you think it's helping to improve your efficiency?

Gunjan Kedia

So I think AI is one, not the only reason to drive good productivity, but it is an important lever and as growing momentum and growing use cases for productivity within our world, and we do continue to expect it to be a contributor to productivity. Some of the discussions around whether the token costs are overtaking returns. Is the relevant discussion we have invested in developing the capabilities to swap out expensive models for cheaper models? And we have some confidence over time we'll continue to get positive returns from our AI program on productivity. More broadly, though, the place where we are being more measured is on client-facing applications just as we fully understand the concerns around privacy and some of the customer confidence issues around it. These things will get resolved in due course we remain quite focused on the AI program and do have confidence around its contribution to our productivity.

Michael Mayo

And as it relates to the cash sorting concerns that personal AI agents will drain deposits from the banking industry, how do you think about that potential threat and the value that U.S. Bancorp provides to depositors, say, for privacy and trust?

Gunjan Kedia

So Mike, just first, we haven't seen any AI cash sorting third-party agents try to interact with the bank. The logistics of doing something like this are very complicated. So we do not expect it to be a near-term impact to us. Our customer base is very digitally savvy. The adoption rates are very high. Our digital tools allow a fairly high amount of deposit price discovery and the ability to optimize automatically should a depositor choose to do that. All of these capabilities will strengthen with AI over time. We are not counting on it not to be that. But again, our strategy is not to attract depositors only through deposit price have invested a lot in creating meaningful value propositions that help people manage their lives and manage the transactions. And we are quite comfortable with transparency around deposit pricing. So I would say a lot of discussion around that topic. We do not see it yet in day-to-day life.

Operator

Your next question comes from the line of Erika Najarian from UBS.

L. Erika Penala

Just wondering, I had a few follow-up questions. Going back to the exit rate on the net interest margin, and I just wanted to drill down on this Gunjan's remarks about focusing on strengthening NII. John, in the past, you mentioned that you're liability sensitive to the short end. So as we think about the path from the fourth quarter to that is the optimization on the funding side and the asset remix enough to offset that sort of initial liability sensitivity assuming the curve flattens from the rate hikes. In other words, does that balance sheet optimization overwhelm that static positioning on the short end?

John Stern

Sure. So on the mix and all this sort of thing, we have continued to and want to improve our asset mix to be more floating rate. That has been an area that what we've talked about here and even put a slide in to show how much we've moved over the last couple of years and been methodical about that. So the answer is yes. We think that the funding and the asset mix and the fixed asset repricing are enough to offset any competition on the beta side. That is our -- that is what we're developing on the balance sheet side of the equation. And that's what gives us confidence, as I mentioned, just in terms of NIM path and all that sort of thing. Obviously, we'll watch the curve shipping what that looks like and how deposit competition pans out, but that's what our assumptions are at this particular juncture.

L. Erika Penala

Got it. And just a follow-up question. You're certainly in a unique position in terms of category 2, and there's a big difference between sort of a cliff vest of your AOCI and a 5-year phase in. And we're hearing that Basel III endgame will be finalized by year-end. And it just feels like tailor has to come with it, right, just given the phase-in component. And I guess do you have a sense on whether or not if we do get finalization of Basel III endgame, if that would be sort of the superseding rule for you versus the "cliff vest on AOCI." In other words, you get to enjoy a 5-year phase-in versus the cliff vest. And if so, does that change anything in terms of how you're thinking about buybacks from either a timing or magnitude perspective?

John Stern

Yes. I'll go back to my comments that we're looking certainly at the regulation as a component of deciding on buybacks. But it's going to be probably more dependent on RWA demands as well as interest rates, particularly in the short run. We are very much interested in rural changes that we expect to see here in the fourth quarter that can shift what our ultimate RWA and capital demands are or what that looks like. We're also interested, obviously, if there's tailoring and how that gets applied it's speculation at this point, right? We know just as much as you do and what we see in the press. And -- but we're not planning on it. We're planning on growing our capital base. We're planning on all the things that we talked about in terms of balance sheet, stewardship and optimization and all these things that are going to help us on our path.

Gunjan Kedia

And Erika, I just want to double underline that. We are fully ready to transition into Cat II regardless of the timing of the Basel III endgame. We've been preparing for it for a long time. And when John talks about starting buybacks in the next 1 or 2 quarters, we are not counting on any benefit from Basel III endgame. This is just capital accretion we get based on normal course business.

Operator

Your next question comes from the line of Ben Gerlinger from Citi.

Benjamin Gerlinger

I just want to call it's helpful to hear the thoughts on overall growth and then kind of bolt-on opportunities if they do arise. If you do go that route. Just kind of thinking about the loan portfolio itself, you kind of had some organic growth and you've had some remixing with the card. Just kind of not necessarily a fourth quarter comment or even '27 comment, but just down the road, how should we think about the relative mix and weighting between some of the loan categories in the areas that you would see more appealing today?

John Stern

Sure. Ben, I can start on that. I think what you've been seeing on the loan side of the equation, you'll -- over the past several quarters, you'll continue to see for the next several quarters in terms of leaning in on card, lean in on C&I and commercial real estate. Now there may be some bumps like commercial real estate may not be as robust in the next quarter or 2, just given the backup in rates all in, we're focusing in that way. When we started the year, I believe our mortgage -- residential mortgage area of loans -- was in the 30% area in terms of loan mix. We do see that coming down and more because of the growth in the other categories. So we're growing into it. So we anticipate the mortgage area will probably be in the mid-20s at some point over time. But again, it's going to be because of the growth in the other areas, not because we're diminishing our focus on the residential mortgage book, we continue to think that's a strong business over the fullness of time.

Gunjan Kedia

Ben, our thought process very much is that it's a relationship loan, where you get fee revenue, you get deep relationships, you get sticky deposits. That's where we want to extend our balance sheet. And the categories that lend themselves to this are credit cards. It's a big fee-based business. The C&I loans with our corporate payments, our treasury management and our investment services products makes that a very attractive loan. And then as we build out the capital markets, becomes a good use of balance sheet as well. So the categories that we would be more measured on would then become auto, mortgage and some of these more stand-alone, which over time will still be very important products for us. But as John said just become more measured.

Operator

Your next question comes from the line of David Chiaverini from Jefferies.

David Chiaverini

I wanted to ask about the efficiency ratio outlook. Your guide mid- to high 50s what could take U.S. Bancorp to the high end versus the low end? And to what extent does the interest rate environment influence that?

John Stern

Sure. So right now, obviously, we're around 56, just under that, which we're very proud of in terms of making good progress there. And it's been obviously the operating leverage has helped with the revenue growth that we've seen. We continue to anticipate strong growth and continuing that operating leverage. And so our desire is to get into closer to that mid part of the -- versus the mid- to high 50s, that's an area that we're focused on. Obviously, the rate environment and the macro will drive things here and there, but that's been our focus and what we've been talking about.

Gunjan Kedia

I would say the high end will be if capital markets growth turns out to be very robust, and it will be a good reason to be on a high end, that's a high efficiency ratio business. And the low end will be our AI program. There's a lot to be discovered there. There's a lot of potential there, and it's quite -- you can see a path where that accelerates and really begins to impact the productivity of the phone.

David Chiaverini

And then I wanted to ask about USB DC, you mentioned about how it launched in September. Did you launch this due to strong client demand? Or is this more of getting the capability up and running in anticipation of increased client demand down the road?

Gunjan Kedia

It's certainly the latter. I very clearly have to say there is not much client demand at all. What there is now is client curiosity even from 2 quarters back, we have quite a few clients wanting to experiment with us on what this might do. The launch, as you know, is a pilot. We are -- the actual launch of the product will take some regulatory approvals here. We do think that as companies think about combining the benefits of the banking system, which they do really appreciate. With some of the shortcomings, mostly what we've heard is 24/7 real-time availability, especially over the weekends, cross-border. Most central banks don't have that kind of capability. So we are building out products in anticipation of being able to do something that creates value to customers, but we would not say that there is very robust demand just yet that has developed. And most of the conversations are around the corporate payment space.

Operator

There are no further questions at this time. Mr. Mauney, I turn the call back over to you.

Brian Mauney

Yes. Thank you to everyone who joined our call this morning. Please contact the Investor Relations department if you have any follow-up questions. Rob, you may now disconnect.

Operator

This concludes today's conference call. You may now disconnect.