U.S. Bancorp Q3 Earnings Rise, Match Estimates
MINNEAPOLIS (dpa-AFX) - U.S. Bancorp (USB) reported Wednesday a slight increase in third-quarter profit with strong revenue growth, despite higher provision for credit losses.
Earnings per share matched analysts' estimates. Mortgage banking revenues were strong, while net interest margin was weak.
Chairman and Chief Executive Officer Richard Davis said, "The continuing momentum in consumer lending led to growth in net interest income despite a decline in net interest margin. Fee-based revenues grew year over year across most categories including payments, mortgage banking and wealth management while capital markets continued to have solid performance in the third quarter."
For the third quarter, net income attributable to shareholders edged up 0.8 percent to $1.434 billion from last year's $1.422 billion. Earnings per share grew 3.7 percent to $0.84 from $0.81 a year ago.
On average, 29 analysts polled by Thomson Reuters expected earnings of $0.84 per share. Analysts' estimates typically exclude special items.
Sequentially, net income declined 1.3 percent, while earnings per share grew 1.2 percent.
Total net revenue increased 4.7 percent to $5.39 billion from last year's $5.15 billion. Analysts were looking for revenues of $5.35 billion. Sequentially, revenues declined 1.1 percent.
Third-quarter net interest income on a taxable-equivalent basis grew 4.3 percent year-over-year to $2.94 billion mainly on loan growth. Meanwhile, net interest margin of 2.98 percent dropped 6 basis points from prior year's 3.04 percent, impacted by higher average cash balances.
Noninterest income grew 5.1 percent from last year to $2.45 billion, driven by higher mortgage banking revenue, trust and investment management fees, and credit and debit card revenue.
The company noted that mortgage banking revenue increased 40.2 percent year-over-year driven by strong refinancing activities due to lower longer-term interest rates.
Provision for credit losses climbed 15.2 percent to $325 million from last year's $282 million.
Average earning assets grew 6.6 percent year-over-year. Average total loans grew 7.6 percent from last year, and average total deposits grew 10 percent.
On the NYSE, USB shares settled at $43.01 on Tuesday, up 0.68 percent. The shares gained 0.12 percent further in the extended trading.
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