Buffett’s Other Bank Stock: How U.S. Bancorp

New Post Public Reply Private Reply Replies (0) Message Board
Stock Buff

Buffett’s Other Bank Stock: How U.S. Bancorp Outperforms Wells Fargo and the Industry

Posted 8/13/2012 6:37 PM by Carla Fried from YCHARTS

It's no secret Warren Buffett likes the value proposition of Wells Fargo ( WFC ). The current market value of Berkshire Hathaway's ( BRK.B ) stake in Wells Fargo is about $13 billion. But Wells Fargo isn't his only bank crush. Berkshire Hathaway's stock investment portfolio also includes a chunk of U.S. Bancorp ( USB ) with a current market value of $2.6 billion.

Granted, that's not exactly an outsize bet given that Berkshire's investment portfolio had a market value of $89 billion at the end of the first quarter. But U.S. Bancorp, the parent of U.S. Bank National Association, the fifth largest commercial bank in the country, is actually outperforming Wells Fargo lately-and to be clear, Wells Fargo has been on a roll of its own, as seen in this stock chart .

undefined

USB data by YCharts

U.S. Bancorp even manages to best Wells Fargo on return on assets . . .

undefined

USB Return on Assets data by YCharts

. . .as well as return on equity.

USB Return on Equity data by YCharts

Management reiterated in its second quarter conference call that those ratios are at the low end of long-term targets of 1.6%-1.9% on return on assets and 16%-19% for return on equity.

In a lot of ways, U.S. Bancorp ($353 billion in total assets) is sort of the mini-me version of Wells Fargo ($1.336 total assets). Like Wells Fargo the focus at U.S. Bancorp is on old-fashioned banking -- bring in deposits, make loans , charge fees -- rather than looking to generate profits from aggressive in-house trading, à la JPMorgan ( JPM ).

The plain vanilla route seems to be a pretty good business model for U.S. Bancorp. In the second quarter it reported an 8% jump in net revenue and earnings per share rose 18.3%.

USB Revenue data by YCharts

Overall fee revenue increased 9.7% in the quarter. That's impressive given that it includes a near 18% decline in revenues from credit card and debit fees federal regulations, courtesy of new federal regulations.

U.S. Bancorp is also positioned to ride the housing recovery. Overall loan volume at U.S. Bancorp rose 7% in the second quarter compared to a year earlier; the residential mortgage slice grew at nearly three times that rate. And the charge-off rate for bad residential mortgages fell to 1.12% compared to 1.46% in the second quarter of 2011.

Financial Crisis? What financial crisis?

With a strong balance sheet, the Minneapolis based regional bank was able to use the financial crisis as a growth opportunity, taking failed banks off the FDIC's hands and making acquisitions as well.

undefined

USB Total Assets data by YCharts

And despite a solid increase in the company's value, it's still trading at a pretty low PE ratio .

USB PE Ratio data by YCharts

Just the sort of chart Buffett would love.

Carla Fried is an editor for the YCharts Pro Investor Service which includes professional stock charts , stock ratings and portfolio strategies .

Berkshire Hath Hld A (BRK.A) Stock Research Links

BRK.A Board Company Profile Buy Rating Time & Sales News Filings Financials
Scroll down for more posts ▼

Top 10 Most Recent News Articles

James Scott Farrin Secures 12th 'Best Law Firms' Honor

Updated Category News Views 39

Durham's Pride in Legal Excellence Just like ol' reliable clockwork, James Scott Farrin has clinched another honor that makes the legal landscape take note. This Durham-based law office, a heavyweight in the injury claims scene, isn't just shuffling papers; they're racking up accolades on the list of 'Best Law Firms' for the 12th year running. Now, that's no small feat....

Continue Reading
Warehouse Strike Over Pensions Jolts AGNE Operations

Updated Category News Views 111

AGNE Feels Heat as Teamsters Strike Over Pensions Damn near thought we'd seen it all, but here we are, bearings rattled by yet another strike at a time when disruption seems to be the tune of the day. Over 255 members of Teamsters Local 633 have locked horns with Associated Grocers Northeast (AGNE) in Pembroke, New Hampshire. It's not about nickel-and-diming over a pay...

Continue Reading
Intensity Therapeutics: Q3 Results Show Steady Progress

Updated Category News Views 104

Patient Enrollment Back on Track Today feels like we're talking about a company that's finally shaking off the cobwebs—Intensity Therapeutics is back in action with their cancer trials. After hitting the brakes back in March 2025 thanks to a cash crunch, it looks like Intensity is revving up once more, thanks to some better financial footing. They've got their Phase 3...

Continue Reading
Ensign Group Lawsuit: A Wake-Up Call for Investors

Updated Category News Views 27

The Lowdown on Ensign's Recent Troubles Alright, folks, here's the scoop that might have you reaching for the Maalox. If you've put your chips on The Ensign Group, Inc. (NASDAQ: ENSG), you might want to keep your eyes peeled. Schall, Brown & Schwartz LLP—or SBS, as the pros call 'em—is ringing the alarm bells with a securities fraud suit that's got the potential to...

Continue Reading
Rice Sets Course in Houston’s Thriving Innovation Hub

Updated Category News Views 50

Houston's Innovation Scene Expands The ground's barely settled and already Rice University is shaking up the scene in Houston’s Ion District with the Arc. At nearly 200,000 square feet, this powerhouse is set to bridge the gap between research, industry, and entrepreneurs, pushing ideas from discovery to reality. A Groundbreaking Investment For anyone with half an idea...

Continue Reading
Hello Group Gears Up for Q3 Earnings Release

Updated Category News Views 68

Anticipation Builds for Hello Group's Q3 Results Time flies when you're watching stocks, and believe me, December's about to get red hot for Hello Group Inc. (NASDAQ: MOMO). With their unaudited financial results for the third quarter of 2026 hitting the wire before the U.S. markets open on December 7, there's enough speculation cooking to rival a Thanksgiving feast....

Continue Reading
Workday: Dominating Cloud ERP with AI Prowess in 2026

Updated Category News Views 73

Workday: A Force in the Cloud ERP Arena Right on! Workday's making waves again in the world of Cloud ERP. In a move that seems to defy the competition, they've locked down their spot as a Leader in the 2026 Gartner Magic Quadrant for Cloud ERP for Service-Centric Enterprises for the fifth year running. Consistency isn’t a coincidence here, folks—this is pure strategy!...

Continue Reading
Truelink's Strategic Expansion: GES Acquires CSG Creative

Updated Category News Views 56

Truelink's Big Move in Creative Marketing I don't throw around the word 'synergy' lightly, but this Truelink Capital move has me grudgingly utter it. Picture this: GES, a big dog in event marketing, just grabbed CSG Creative, a firm with its teeth sunk deep into association and event organizer marketing. It sounds like the kind of match you only find lurking in the fancy...

Continue Reading
Coastal Financial Faces Class Action Suit Over Securities

Updated Category News Views 78

Securities Law Tangles: Coastal Financial Hits a Snag There's no dodging it—Coastal Financial Corporation's dogged by a class action lawsuit, and investors need to sit up and take notice. This kind of legal fracas can hit the stock price like a brick through a window, especially when alleged securities law violations crop up. DJS Law Group's got the reins on this one,...

Continue Reading
Class Action Targets Extremist Groups, Interference

Updated Category News Views 124

Legal Spar on the Horizon: Class Action Commences The legal world now sees a fresh duel as Impresa Legal Group rolls up its sleeves and files a class action lawsuit against certain extremist groups and foreign-funded entities. At the heart of this legal action are accusations that these outfits have orchestrated a campaign to intimidate data center workers while meddling...

Continue Reading

Top 5 Most Recently Viewed Articles

Analyzing the Future of Stock Market Gains Amid Economic Changes

Updated Category News Views 124

Understanding the Current State of the Equity Market By examining the varying dynamics within the stock market, it's essential to acknowledge how large technology companies have significantly influenced Wall Street's upward trajectory throughout the year. However, there is a notable shift occurring, driven by expectations of aggressive interest rate adjustments, allowing...

Continue Reading
TransMedics Set to Showcase Innovations at Major Conference

Updated Category News Views 105

TransMedics Announces Upcoming Conference Participation TransMedics Group, Inc. (Nasdaq: TMDX), a pioneering medical technology company, is gearing up to make a significant impact at a major upcoming event. The company, dedicated to revolutionizing organ transplant therapy for patients suffering from severe heart, lung, and liver conditions, has announced its...

Continue Reading
Pecan Tree Family Dentistry Expands Dental Services

Updated Category News Views 187

Pecan Tree Family Dentistry Introduces a Complete Range of Dental Services Pecan Tree Family Dentistry, a prominent dental practice, is thrilled to announce the launch of its extensive selection of dental services. This includes advanced cosmetic dentistry options such as veneers, teeth whitening, and Invisalign, all designed to provide families with a full spectrum of...

Continue Reading
Investors Should Seek Justice Against Blue Owl Capital Mismanagement

Updated Category News Views 152

Understanding the Situation with Blue Owl Capital Inc. For investors who have faced losses with Blue Owl Capital Inc. (NYSE: OWL), there’s crucial information to consider. This article addresses the implications of potentially misleading statements made by the company and highlights steps for affected investors to take. Who Should Take Action? If you acquired shares in...

Continue Reading
BigBear.ai Stock Insights: Navigating Recent Fluctuations

Updated Category News Views 216

Current Status of BigBear.ai (BBAI) Stock BigBear.ai Holdings Inc (NYSE: BBAI) is witnessing an upswing in its shares this week, rebounding after a tumultuous period that saw the stock decline by nearly 13% over just five days. This fluctuation included a notable 8% dip earlier in the week. Investors are showing caution as they await significant economic indicators and...

Continue Reading