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U.S. Bancorp reports 4Q earnings of $974 million

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Minneapolis-based U.S. Bancorp (NYSE: USB), which operates U.S. Bank branches locally, on Jan. 19 reported fourth-quarter net income of $974 million. Fourth-quarter earnings were driven by a record $4.7 million in total net revenue for the quarter, according to a U.S. Bancorp news release.

Also included in the fourth-quarter results was a $103 million gain – $41 million after taxes – from the exchange of the long-term asset management business of FAF Advisors Inc., a U.S. Bancorp affiliate, for an equity interest in Nuveen Investments and cash consideration. Other significant items were a provision for credit losses lower than net charge-offs by $25 million and net securities losses of $14 million, which combined, increased fourth-quarter diluted earnings per common share by 3 cents.

Other fourth-quarter highlights:
  • $65.6 billion in lending activity for the quarter – the highest level reported since before fourth-quarter 2008 - which included $16 billion in new commercial and commercial real estate commitments; $2 billion in lines related to new credit card accounts; and $26.1 billion in mortgage and other retail originations
  • 5.1 percent growth in average deposits, excluding acquisitions, compared to fourth-quarter 2009
  • Total net revenue growth of 7.9 percent
  • Net interest income growth of 5.9 percent from fourth-quarter 2009, driven by a 5.9 percent increase in average earning assets and growth in lower cost core deposit funding
  • Year-over-year growth in payments-related fee income, commercial products revenue and mortgage banking revenue, driven in part by a 7.3 percent increase in credit and debit cad revenue, a 4.2 percent uptick in corporate payment products and a 3.5 percent increase in merchant processing services.
“The results continued to reflect the benefits of our diversified business model, our recent investments and overall financial strength,” U.S. Bancorp Chairman, President and CEO Richard K. Davis said in the release.

Davis also pointed to the company’s ongoing efforts to generate capital and increase dividends, ending the year with a Tier I common equity ratio of 7.8 percent and a Tier 1 capital ratio of 10.5 percent.

“Our strong capital position and ability to generate capital each quarter through solid operating earnings, even under the most severe economic conditions, gives us confidence in our ability to increase our dividend in 2011,” he said. “Our shareholders deserve to be rewarded.”

U.S. Bancorp shares were trading at $26.44 at 11:17 a.m., compared to a 52-week range of $20.44 to $28.43.[[In-content Ad]]

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