U.S. Bancorp (USB)

U.S. Bancorp is a large regional bank with an unusually high share of fee income.

Half the result is ordinary banking: deposits, loans to businesses and households, interest margin. The other half sets it apart from peers: merchant payment processing, corporate cards, trust services and fund administration. That revenue is rate-independent and smooths the interest cycle.

It is the payments arm that makes the bank closer to financial infrastructure than to a classic lender: fees are charged on merchant turnover and grow with consumer spending rather than with the size of the loan book. That is why the bank's results hold up better than peers' when rates fall and the interest margin compresses.

The risks are a regional bank's standard ones: loan book quality, commercial real estate exposure, deposit stability and capital requirements. U.S. Bancorp pays a dividend with a long payment history.