U.S. Bancorp recorded better than expected results for the third quarter, benefiting from a solid uptick in income from loans while expenses and credit losses fell.

The results — like those of several industry peers including JPMorgan Chase — handily beat Wall Street estimates.

Net interest income, which is the difference between expenses for deposits and income generated from lending, was $4.14 billion for the quarter ending Sept. 30, when analysts expected $4.04 billion. And net earnings grew to $1.7 billion, or $1.03 a share, when analysts were expecting $1 a share.

The quarter also was marked by a 7% drop in non-interest expenses for the Minneapolis-based company, which runs U.S. Bank.

CEO Andy Cecere said the bank has seen expenses drop for the full year, which supports modest but positive operating leverage that he expects will “expand in the fourth quarter and into 2025.”

U.S. Bank’s shares were up nearly 5% in late morning trading after the Wednesday morning announcement.

Cecere said he now expects net interest income will be “stable” during the fourth quarter given the modest loan growth environment. Income, however, is expected to reach the higher end of the $16.1 billion to $16.4 billion range for full year 2024.

Cecere also expects single-digit growth to non-interest income and for full year non-interest expense to reach $10.8 billion.

For the third quarter, net interest income on loans and investments rose from the second quarter but fell 2.4% from a year ago to $4.17 billion. The decline was mostly due to the impact of higher interest rates on deposits.

Non-interest income, mostly from fees, also fell 2.4% to $2.7 billion from a year ago. The drop meant the bank did not enjoy a repeat of the surprise jump seen during the second quarter. Prior to then, fee income had fallen for five consecutive quarters.

Still, the quarter held good news.

While overall non-interest income fell, the bank saw a double digit spike in fees from commercial and investment products and “saw good year-over-year growth in trust and investment management, payment services, mortgage banking and treasury management fee revenue,” Cecere told analysts, adding that the bank also benefited from improved underlying market conditions and expanded distribution channels.

Cecere and Chief Financial Officer John Stern noted the bank remains committed to balancing its capital growth and expects to soon resume share buybacks.

During the quarter the bank announced a new strategic partnership to serve Edward Jones’ clients’ with select and credit card solutions. It also announced that it acquired Salucro Healthcare Solutions, which provides health care financial technology, focused on online patient payments and billing.

U.S. Bancorp’s newly promoted president, Gunjan Kedia, told analysts the bank has become adept at partnering with various outside entities such as State Farm and now Edward Jones. The bank has set up digital and the operational capabilities to serve the clientele of its new partners and so far it’s working.

The efforts are showing “good early successes and good momentum as a starting point to get your name and your brand in areas that we are not in today,” she said.

When asked by analysts whether U.S. Bank had any interest in acquiring other banks, Cecere firmly stated “No. The M&A environment is so uncertain right now that it would not be a good place to invest.”

Cecere and Stern also noted that the bank has shifted some of its investments and so the impact from the overall problematic office real estate environment was “flat” within the bank as the bank had “reduced its exposure.”

U.S. Bank’s stock rose by $2.24 a share to $49.24 a share in midday trading. The stock, which temporarily hit a one year high of $50.11 a share Wednesday before slipping slightly, is up considerably from its $32 a share price tag one year ago.

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