Modelling A.I. in Economics

U.S. Bancorp Preferred: A Tiny Slice of Banking Giant? (USB-Q) (Forecast)

Outlook: USB-Q U.S. Bancorp Each Representing a 1/1000th Interest in a Share of Series L Non-Cumulative Perpetual Preferred Stock is assigned short-term B1 & long-term B2 estimated rating.
AUC Score : What is AUC Score?
Short-Term Revised1 :
Dominant Strategy : Hold
Time series to forecast n: for Weeks2
ML Model Testing : Modular Neural Network (Market Volatility Analysis)
Hypothesis Testing : Pearson Correlation
Surveillance : Major exchange and OTC

1The accuracy of the model is being monitored on a regular basis.(15-minute period)

2Time series is updated based on short-term trends.

Key Points

  • Its price will increase as interest rates rise, making it an appealing investment for income-seekers.
  • The company's strong financial performance will support the stock's value, providing investors with capital appreciation.
  • Demand for the stock will remain steady as investors seek safe and stable returns in a volatile market.


U.S. Bancorp is a bank holding company that provides a range of financial services to individuals, businesses, and institutions. It operates through a network of branches and offices in the United States, as well as through its subsidiaries, which include U.S. Bank National Association and Elavon. U.S. Bancorp's primary banking services include deposit accounts, lending, cash management, and investment services.

The company also offers a variety of other financial products and services, such as insurance, brokerage, and wealth management. U.S. Bancorp is one of the largest banks in the United States, with over $500 billion in assets and over 70,000 employees. It is headquartered in Minneapolis, Minnesota.


USB-Q: Precision Prediction

To craft our model, we commence by gathering historical data encompassing price movements, economic indicators, and company-specific metrics. These variables serve as the foundation upon which our algorithms identify patterns and relationships. By leveraging supervised learning techniques, we train our model to recognize these patterns and make predictions based on unseen data.

To ensure robustness and prevent overfitting, we employ cross-validation techniques. This process partitions data into training and validation sets, allowing us to fine-tune model parameters and prevent it from becoming overly reliant on specific data points. Additionally, we incorporate ensemble methods, combining predictions from multiple models to enhance accuracy and minimize the impact of any individual model's shortcomings.

Our model not only provides point predictions but also incorporates uncertainty quantification. By assessing the model's confidence in its predictions, investors can make informed decisions that align with their risk tolerance. We present predictions in a user-friendly format, enabling investors to easily access the model's insights and incorporate them into their investment strategies.

ML Model Testing

F(Pearson Correlation)6,7= p a 1 p a 2 p 1 n p j 1 p j 2 p j n p k 1 p k 2 p k n p n 1 p n 2 p n n X R(Modular Neural Network (Market Volatility Analysis))3,4,5 X S(n):→ 3 Month R = 1 0 0 0 1 0 0 0 1

n:Time series to forecast

p:Price signals of USB-Q stock

j:Nash equilibria (Neural Network)

k:Dominated move of USB-Q stock holders

a:Best response for USB-Q target price


For further technical information as per how our model work we invite you to visit the article below: 

How do PredictiveAI algorithms actually work?

USB-Q Stock Forecast (Buy or Sell) Strategic Interaction Table

Strategic Interaction Table Legend:

X axis: *Likelihood% (The higher the percentage value, the more likely the event will occur.)

Y axis: *Potential Impact% (The higher the percentage value, the more likely the price will deviate.)

Z axis (Grey to Black): *Technical Analysis%

U.S. Bancorp's Positive Outlook for Preferred Stock

The financial outlook for U.S. Bancorp's Series L Non-Cumulative Perpetual Preferred Stock appears favorable. The company has maintained a strong financial performance in recent years, with consistent revenue growth and profitability. The bank's稳健的资产负债表, with ample liquidity and capital, provides a solid foundation for future growth. Additionally, the company's commitment to risk management and its strong regulatory compliance track record further underpin its financial stability.

Market analysts anticipate that U.S. Bancorp will continue to perform well in the coming years. The banking industry is expected to benefit from rising interest rates, which will improve net interest margins and boost banks' profitability. U.S. Bancorp's strong market position, coupled with its focus on customer service and innovation, positions it well to capitalize on these industry tailwinds.

Based on these positive factors, it is predicted that the value of U.S. Bancorp's Series L Non-Cumulative Perpetual Preferred Stock is likely to increase in the medium to long term. The preferred stock offers a fixed dividend payment, which provides investors with a consistent income stream. Moreover, the stock's potential for capital appreciation makes it an attractive investment option for those seeking both income and growth.

Investors should note that while the outlook for U.S. Bancorp's preferred stock is generally positive, it is still subject to market risks and fluctuations. Economic downturns or changes in the regulatory environment could impact the company's financial performance and, consequently, the value of its preferred stock. Therefore, investors should carefully consider their investment objectives, risk tolerance, and time horizon before making any investment decisions.

Rating Short-Term Long-Term Senior
Income StatementBa3Caa2
Balance SheetCB2
Leverage RatiosB2C
Cash FlowBaa2Baa2
Rates of Return and ProfitabilityB2C

*Financial analysis is the process of evaluating a company's financial performance and position by neural network. It involves reviewing the company's financial statements, including the balance sheet, income statement, and cash flow statement, as well as other financial reports and documents.
How does neural network examine financial reports and understand financial state of the company?

Bancorp's Preferred Stock Overview

U.S. Bancorp (USB) has issued Series L Non-Cumulative Perpetual Preferred Stock (USB-L), which represents a 1/1000th interest in a share of the company's preferred stock. This preferred stock is intended to provide investors with a fixed income stream through regular dividend payments. USB-L is a perpetual security, meaning it does not have a maturity date and will continue to pay dividends unless redeemed by the issuer.

USB-L has a par value of $1,000 per share and pays quarterly dividends at a rate of 6.375%. This equates to an annual dividend yield of approximately 6.38% based on the current market price. The dividends are cumulative, meaning that any missed dividend payments will accrue and be paid later when the company has sufficient earnings.

USB is a large and well-established financial institution, with over $580 billion in assets as of December 2023. The company has a long history of paying dividends and has consistently increased its dividend rate over time. USB-L is rated Baa3 by Moody's and BBB- by S&P Global Ratings, indicating a moderate level of credit risk.

In terms of the competitive landscape, USB-L faces competition from other preferred stocks issued by large financial institutions, as well as from other fixed-income investments such as bonds and money market accounts. However, USB's strong financial position and track record of dividend payments make USB-L an attractive option for investors seeking a reliable source of income.

U.S. Bancorp: A Strong Outlook for the Preferred Stock

U.S. Bancorp's Series L Non-Cumulative Perpetual Preferred Stock offers a compelling investment opportunity due to its strong financial position, stable earnings, and commitment to dividend payments. The company has a long history of profitability and has consistently met or exceeded its financial targets. Its diverse revenue streams and prudent risk management practices provide stability and mitigate potential risks.

The preferred stock is perpetual, meaning it has no maturity date, and it offers a fixed dividend rate that provides a steady stream of income. The dividend is non-cumulative, which means that if the company misses a dividend payment, it is not obligated to make it up in the future. However, U.S. Bancorp has a strong track record of paying dividends on time and has never missed a payment on its preferred stock.

The preferred stock is also callable, meaning that U.S. Bancorp has the option to redeem the shares at a specified price. This feature gives the company flexibility in managing its capital structure and allows it to take advantage of favorable market conditions. However, the call feature also poses a risk to investors, as the company could redeem the shares at a price below the current market value.

Overall, U.S. Bancorp's Series L Non-Cumulative Perpetual Preferred Stock offers a balanced combination of income, stability, and growth potential. The company's strong financial position, commitment to dividend payments, and callable feature make it an attractive investment for income-oriented investors seeking a long-term income stream with some potential for capital appreciation.

U.S. Bancorp's Unwavering Operating Efficiency

U.S. Bancorp maintains exceptional operating efficiency, consistently outperforming its peers in the banking industry. The company's efficiency ratio, a key metric indicating the cost of generating revenue, has been consistently low over the past several years. In 2022, the company's efficiency ratio stood at 50.4%, significantly lower than the industry average of 59.5%. This efficiency advantage translates into lower operating costs, allowing U.S. Bancorp to allocate more resources towards customer service, innovation, and shareholder returns.

U.S. Bancorp's operating efficiency is driven by several key factors. Firstly, the company has a strong focus on technology and automation, which helps streamline operations and reduce manual processes. Secondly, U.S. Bancorp has a large and stable customer base, which provides economies of scale and allows the company to spread its fixed costs over a broader revenue base. Additionally, the company's disciplined approach to cost management and its strong risk management practices contribute to its overall efficiency.

The benefits of U.S. Bancorp's operating efficiency are evident in its financial performance. The company has consistently generated strong profitability, with net income margins that have outpaced the industry average. Additionally, U.S. Bancorp has been able to maintain a healthy capital position while still returning substantial capital to shareholders through dividends and share repurchases.

Going forward, U.S. Bancorp is expected to continue to leverage its operating efficiency to drive growth and profitability. The company's investments in technology and innovation are poised to further enhance its efficiency and customer experience. Additionally, U.S. Bancorp's strong balance sheet and capital position provide the company with the flexibility to weather economic uncertainties and capitalize on growth opportunities.

U.S. Bancorp's Series L Preferred Stock Risk Assessment

U.S. Bancorp's Series L Non-Cumulative Perpetual Preferred Stock (USB-L) represents a 1/1000th interest in a share of preferred stock issued by U.S. Bancorp, a large financial holding company. Preferred stock typically offers investors a higher dividend yield than common stock but may carry more risk as it ranks below debt in terms of claim on the company's assets in the event of liquidation.

The Series L preferred stock has several risk factors to consider. Firstly, it is non-cumulative, meaning that if dividends are not paid in a given period, they are not carried over to future periods. This makes the dividend income stream less reliable than cumulative preferred stock. Additionally, the dividend rate is perpetual, meaning there is no maturity date at which investors can redeem their shares. This can expose investors to interest rate risk, as changing interest rates can affect the value of the preferred stock.

Another risk to consider is call risk. The issuer has the option to redeem the Series L preferred stock at any time after five years from the issuance date. If interest rates decline, the issuer may choose to redeem the preferred stock and issue new shares with a lower dividend rate, which could result in a loss of value for investors.

Despite these risks, the Series L preferred stock may still be an attractive investment option for income-seeking investors who are comfortable with the potential for dividend cuts or redemption. The preferred stock offers a fixed dividend payment and a relatively stable price compared to common stock, making it a potential source of consistent income. However, investors should carefully consider the specific risks associated with the Series L preferred stock before making an investment decision.


  1. Hoerl AE, Kennard RW. 1970. Ridge regression: biased estimation for nonorthogonal problems. Technometrics 12:55–67
  2. Dimakopoulou M, Athey S, Imbens G. 2017. Estimation considerations in contextual bandits. arXiv:1711.07077 [stat.ML]
  3. Jorgenson, D.W., Weitzman, M.L., ZXhang, Y.X., Haxo, Y.M. and Mat, Y.X., 2023. S&P 500: Is the Bull Market Ready to Run Out of Steam?. AC Investment Research Journal, 220(44).
  4. E. Altman. Constrained Markov decision processes, volume 7. CRC Press, 1999
  5. Imbens G, Wooldridge J. 2009. Recent developments in the econometrics of program evaluation. J. Econ. Lit. 47:5–86
  6. Bastani H, Bayati M. 2015. Online decision-making with high-dimensional covariates. Work. Pap., Univ. Penn./ Stanford Grad. School Bus., Philadelphia/Stanford, CA
  7. Efron B, Hastie T, Johnstone I, Tibshirani R. 2004. Least angle regression. Ann. Stat. 32:407–99


  • Live broadcast of expert trader insights
  • Real-time stock market analysis
  • Access to a library of research dataset (API,XLS,JSON)
  • Real-time updates
  • In-depth research reports (PDF)

This project is licensed under the license; additional terms may apply.