09:24 AM EDT, 10/16/2024 (MT Newswires) -- US Bancorp's ( USB ) third-quarter results fell year over year but earnings topped market estimates as the company saw lower expenses in the period.

Adjusted earnings came in at $1.03 per share for the September quarter, down from $1.05 the year before but ahead of the Capital IQ-polled consensus of $0.99. The stock was up 2.3% in premarket activity.

Revenue, made up of net interest and noninterest income but excluding the fully taxable equivalent adjustment, declined to $6.83 billion from $7 billion in the prior-year quarter, according to MT Newswires' calculations. That was below the Street's view for $6.91 billion.

On a taxable-equivalent basis, net interest income decreased 2.4% to $4.17 billion due to the impact of higher interest rates on deposit mix and pricing, partially offset by higher rates on earning assets and balance sheet composition changes, according to the bank. Noninterest income fell to nearly $2.7 billion from $2.76 billion last year amid net losses on the sales of securities, lower service charges and lower other revenue.

"Our expense levels decreased year-over-year which supported modest positive operating leverage, excluding net securities losses and prior year notable items," Chief Executive Andy Cecere said in a statement. "Net interest income and margin increased on a linked quarter basis benefiting from loan mix, continued repricing of fixed rate earning assets and disciplined liability management."

US Bancorp's ( USB ) noninterest expense declined 1% year over year on an adjusted basis amid "prudent expense management initiatives and the identification of operational efficiencies across the company," Chief Financial Officer John Stern said in an earnings call with analysts, according to a Capital IQ transcript.

Provision for credit losses rose to $557 million from $515 million the year before amid higher losses on credit card, commercial and commercial real estate loans, the lender said.

For the fourth quarter, net interest income on a taxable-equivalent basis is set to be "relatively stable" versus the prior three-month period, US Bancorp ( USB ) said in an earnings presentation. "We expect positive operating leverage to expand in the fourth quarter and into 2025," according to Cecere.

The bank projects taxable-equivalent net interest income to be in a range of $16.1 billion to $16.4 billion for 2024, the presentation showed.

"We are committed to balancing capital growth through earnings accretion with capital distributions and expect to resume share buybacks in the near term," Cecere said.

Price: 48.10, Change: +1.10, Percent Change: +2.34