U.S. Bancorp (USB) Q2 Results Surprise to the Upside

July 21, 2010 9:30 AM EDT
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U.S. Bancorp (NYSE: USB) announced Wednesday that its second-quarter profit nearly quadrupled, despite write-offs from bad loan increasing from the same time last year.

The parent company of U.S. Bank reported second-quarter earnings of $766 million or 45 cents per share, up from $471 million or 12 cents per share in the same quarter last year.

Excluding one-time gains, the bank earned 50 cents per share in the period, 12 cents better than the analyst estimate of 38 cents per share.

Revenue for U.S. Bancorp rose 8.7 percent to $4.52 in the three month period ended in June, beating the market consensus of $4.35 billion.

"On-going investments and business line growth initiatives, as well as recent acquisitions, contributed to the increase in net revenue. Growth in earning assets and deposits, coupled with an expanded net interest margin, led to a 14.5 percent increase in net interest income year-over-year, while strong results from our payments businesses and corporate banking group benefited total noninterest income."

U.S. Bancorp Chairman, President and CEO Richard K. Davis said. "Credit quality showed marked improvement in the second quarter, as net charge-offs and nonperforming assets declined from the levels recorded in the first quarter of 2010."

The company said that loan loss provisions fell from $1.4 billion last year to $1.14 billion in the quarter, while both net charge-offs and nonperforming loans fell sequentially. Total loans increased 4 percent, while deposits jumped 12 percent for the bank in the quarter.

Shares of U.S. Bancorp are up 3.67 percent to $24.00 in premarket trade Wednesday.

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