U.S. Bancorp reported a 11.5% year-over-year increase in average credit card loans, reaching $40.2 billion. This growth was partially driven by the acquisition of a small business credit card portfolio and the onboarding of the Amazon co-brand card portfolio.
The bank's net charge-off rate for credit cards decreased to 3.29% from 3.83% in the second quarter. Conversely, the 30-to-89-day delinquency rate rose to 1.35% from 1.17% in the previous quarter, a shift the company attributed to seasonal factors and portfolio acquisitions.
Average deposits grew 2.9% year-over-year, with consumer deposits hitting a new quarterly record. Despite this growth, total deposit costs increased, with seven basis points added since the second quarter. Management noted that two basis points of this rise resulted from the September Federal Reserve rate hike.
Regarding the role of artificial intelligence, CEO Gunjan Kedia stated that the bank has not observed third-party AI agents automatically shifting consumer deposits between institutions. The company does not anticipate a near-term impact from such technology due to the complexity of the logistics involved.
U.S. Bancorp continues to integrate AI internally to enhance productivity. The bank also offers its own digital tools for deposit price discovery and automated optimization, which are currently available to its customers.
