U.S. Bancorp USB has reported second-quarter 2021 earnings per share of $1.28, which surpassed the Zacks Consensus Estimate of $1.14. The bottom line compared favorably with the prior-year quarter’s figure of 41 cents.Lower revenues along with escalating expenses were the key undermining factors. Nonetheless, reserve releases and loan balance growth favorably impacted results. Also, the capital position remained strong.Net income was $1.98 billion compared with the prior-year quarter’s $689 million.Revenues Decline, Costs Flare UpU.S. Bancorp’s net revenues were $5.78 billion in the second quarter, down 0.9% year over year. Nonetheless, the top line outpaced the Zacks Consensus Estimate of $5.63 billion.U.S. Bancorp’s tax-equivalent net interest income totaled $3.2 billion in the reported quarter, down 1.9% from the prior-year quarter. The decline mainly stemmed from lower rates and lower loan volumes, partially mitigated by deposit and funding mix, and elevated loan fees.Average earning assets climbed 1.3% year over year, supported by growth in average investment securities. However, the net interest margin of 2.53% shrunk 9 basis points, mainly affected by earning assets mix and higher premium amortization in the investment portfolio, partially offset by the funding mix and higher loan fees.U.S. Bancorp’s non-interest income improved slightly on a year-over-year basis to $2.62 billion. The rise was mainly owing to payment service revenue growth, higher deposit service charges, offset by a decline in mortgage banking revenues.Provision for credit losses in the reported quarter was a benefit of $170 million against provisions of $1.74 billion in the prior-year quarter.U.S. Bancorp’s average total loans improved marginally sequentially to $294 billion. This stemmed from higher commercial loans, other retail loans, partly offset by lower residential mortgages.Average total deposits were up marginally from the prior quarter to $429.2 billion. The uptick resulted from growth in non-interest-bearing deposits.U.S. Bancorp’s non-interest expenses climbed 2.1% year over year to $3.38 billion. The upswing mainly resulted from elevated compensation, marketing and business development, technology and communications, and employee benefits, partly muted by reduced net occupancy, and equipment and other non-interest expenses to some extent.Efficiency ratio was at 59%, higher than the year-ago quarter’s 57.6%. An increase in the ratio indicates a fall in profitability.Credit Quality StrongNet charge-offs were $180 million, down 59% year over year. On a year-over-year basis, the company witnessed improvement mainly in net charge-offs in the commercial real estate, commercial segments, credit card and other retail.U.S. Bancorp’s non-performing assets (excluding covered assets) were $1.05 billion, down 9.7% year over year. Total allowance for credit losses was $6.6 billion, down 16.2%.Healthy Capital PositionIn the second quarter, U.S. Bancorp maintained a solid capital position. The Tier 1 capital ratio came in at 11.5% compared with the prior-year quarter’s 10.6%. Common equity Tier 1 capital to risk-weighted assets ratio under the Basel III standardized approach fully implemented was 9.9% as of Jun 30, 2021, up from 9% reported in the year-ago quarter.All regulatory ratios of U.S. Bancorp continued to be in excess of well-capitalized requirements. In addition, reflecting the full implementation of the current expected credit losses methodology, the Tier 1 capital to risk-weighted assets ratio was 9.3 % as of Jun 30, 2021.The tangible common equity to tangible assets ratio was 6.8 % as of Jun 30, 2021, up from the prior-year quarter’s 6.7%.U.S. Bancorp posted an improvement in book value per share, which increased to $31.74 as of Jun 30, 2021, from $30.46 recorded at the end of the year-earlier quarter.ConclusionU.S. Bancorp put up a decent performance in the second quarter. The revenue decline, affected by margin contraction, is likely to continue. Though escalating expenses remain headwinds, the capital position is likely to stay decent.U.S. Bancorp Price, Consensus and EPS Surprise U.S. Bancorp price-consensus-eps-surprise-chart | U.S. Bancorp QuoteU.S. Bancorp currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.We now look forward to the earnings of KeyCorp KEY, BankUnited, Inc. BKU and BancorpSouth Bank BXS, which are slated to report quarterly results on Jul 20, Jul 22 and Jul 21, respectively. Bitcoin, Like the Internet Itself, Could Change Everything Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities. Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. See 3 crypto-related stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report U.S. Bancorp (USB): Free Stock Analysis Report KeyCorp (KEY): Free Stock Analysis Report BankUnited, Inc. (BKU): Free Stock Analysis Report BancorpSouth Bank (BXS): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research