U.S. Bancorp (NYSE: USB) reported fourth-quarter earnings that exceeded expectations, supported by record net revenue and improved operating efficiency, sending shares more than 1% higher intra-day on Tuesday.

The Minneapolis-based lender posted adjusted earnings per share of $1.26, topping analyst estimates of $1.19. Net revenue reached a record $7.37 billion, up 5.1% year over year, while fee revenue climbed 7.6%. Net income rose 23% year over year to $2.05 billion.

Net interest margin improved to 2.77%, up 6 basis points from a year earlier and 2 basis points sequentially. The bank delivered positive adjusted operating leverage of 440 basis points, and its efficiency ratio improved to 57.4% from 61.5% in the prior-year quarter.

Total loans increased 2.3% year over year to $384.3 billion, driven by a 10.1% rise in commercial lending and a 5.7% increase in credit card balances. Credit quality improved, with the net charge-off ratio declining to 0.54% from 0.60% in the fourth quarter of 2024.