Kedia Gunjan sold $1.7M of USB

Major U.S. banks, including JPMorgan, Bank of America, and Citigroup, raised their prime lending rates to 7% following the Federal Reserve's quarter-point increase in the federal funds rate to 3.75%-4%. The Fed cited persistent inflation. Bank stocks fell, reflecting mixed investor sentiment. The Fed projects further rate hikes, with implications for borrowers and the broader economy.

Truist Financial (TFC), U.S. Bancorp (USB), and Republic Bancorp (RBCAA) fell 3.9%, 3.8%, and 3% respectively after the Fed raised rates to 3.75%-4% and signaled more hikes, citing elevated inflation. Bank stocks declined on concerns about slower lending and economic activity. TFC is down 2.6% YTD and 13.2% from its 52-week high.

U.S. Bancorp (USB) reported progress in its business transformation, with fee growth and margin gains. The bank expects Q3 net interest income growth of 4-6% and fee revenue growth of 12-14%. Management highlighted strong revenue momentum, cost control, and a focus on payments and capital markets. USB shares trade at a P/E of 12.26, with revenue growth of nearly 7% over the last year.

PNC, USB, and Truist increased dividends, citing strong capital ratios and earnings. PNC raised its dividend 18% to $2.00 with a 9.9% CET1 ratio. USB increased its payout to $0.54 with an 18.7% return on tangible common equity. Truist offers a 4.13% yield but has the highest net charge-off ratio at 0.61%. All three banks maintained dividends despite Fed rate volatility.

U.S. Bancorp (USB) raised its quarterly dividend by 3.8% to $0.54 per share, supported by strong Q2 earnings. Revenue increased 10% YoY to $7.7B, net income rose 20% to $2.18B, and EPS grew 21.6% to $1.35. The bank's loan growth and solid capital position, with a CET1 ratio of 10.8%, underpin the dividend increase. Hedge-fund interest in USB has risen, with 57 funds holding shares in Q2.

U.S. Bancorp (USB) plans to launch its own stablecoin, USBDC, pegged 1:1 to the U.S. dollar. The bank completed a live cross-border payment using the stablecoin and is exploring broader applications. USB stock is up 27% over the past year, trading at $62.49. The move follows a trend of traditional financial institutions adopting stablecoins for payments and treasury management.