U.S. Bancorp earnings decline 2% in 1Q

Net income for the company was $1.13 billion for the quarter, down 2 percent from $1.15 billion in first-quarter 2006.

The return on average assets was 2.09 percent, and return on average common equity was 22.4 percent, both down slightly from a year before.

U.S. Bancorp’s fee-based businesses continued to show growth, but its net interest margin declined 3.51 percent, reflecting a 29 basis point decline from first-quarter 2006 and a 5 basis point decline from the previous quarter.

“On a linked quarter basis, the 5 basis point reduction was slightly more than we had expected for a number of reasons, one of which was an accelerated stock repurchase agreement that the company initiated in February,” said CEO and President Richard K. Davis, in a news release. “We do expect the margin to decline slightly over the next few quarters, but our fee-based businesses, efficient operations, balance sheet growth and strong credit quality should mitigate the impact of the margin pressure.”

Growth in fee-based revenues also was more than offset by increased credit costs resulting from changes in bankruptcy laws, lower net interest income due to the current yield curve and operating costs of acquired businesses, according to the release.

U.S. Bancorp shares (NYSE: USB) closed Tuesday at $34.13, and were trading at $34.47 as of 2 p.m. today. The 52-week range is $30.27 to $36.85.[[In-content Ad]]