UBS states that U.S. Bancorp’s announcement that that they no longer will be considered a Category II bank by the Federal Reserve is a “game changer” as it releases the company from Cat. II standards and represents a “major, unexpected regulatory victory”. The release means that U.S. Bancorp would no longer have to run AOCI through regulatory capital by Q4 of 2024, and can be grouped with other greater than$100B asset peers in terms of phasing in the impacts from AOCI, the analyst tells investors in a research note. The firm is still keeping its Neutral rating and $35 price target on the stock.
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