U.S. Bancorp Doing Fine, With Opportunities To Counterbalance Spread Pressure

For the most part, U.S. Bancorp (USB) thrives on consistency. That makes quarter-to-quarter reporting a little less exciting, but if you want excitement, U.S. Bancorp really isn't the stock for you anyway. Second quarter results were another solid performance from a reliably solid bank, and U.S. Bancorp's combination of low spread compression and healthy fee-based revenue growth was encouraging relative to increasing spread pressure.

U.S. Bancorp might have more going for it than you'd think at first glance. With net interest margins likely to narrow even more over the next year, investors will do well to find banks that can offset that pressure. For U.S. Bancorp, growing fee-based businesses, organic de novo branch growth, and branch consolidation can all help offset that pressure. Like PNC Financial (PNC), which also has some valuable spread counterweights, U.S. Bancorp isn't particularly cheap, but the shares still look like a decent hold here.

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U.S. Bancorp Doing Fine, With Opportunities To Counterbalance Spread Pressure