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U.S. Bancorp Reports Earnings For The Third Quarter Of 2013

Stocks in this article: USB

U.S. Bancorp (NYSE:USB) today reported net income of $1,468 million for the third quarter of 2013, or $.76 per diluted common share, compared with $1,474 million, or $.74 per diluted common share, in the third quarter of 2012. Highlights for the third quarter of 2013 included:

  • Industry-leading performance ratios, including:
    • Return on average assets of 1.65 percent
    • Return on average common equity of 15.8 percent
    • Efficiency ratio of 52.4 percent
  • Growth in average total loans of 5.7 percent over the third quarter of 2012 (7.5 percent excluding covered loans) and 1.9 percent on a linked quarter basis (2.2 percent excluding covered loans)
    • Growth in average total commercial loans of 9.4 percent over the third quarter of 2012 and 2.0 percent over the second quarter of 2013
    • Growth in average total commercial real estate loans of 5.1 percent over the third quarter of 2012 and 1.6 percent over the second quarter of 2013
    • Growth in average commercial and commercial real estate commitments of 9.9 percent year-over-year and 3.2 percent over the prior quarter
  • Strong new lending activity of $63.1 billion during the third quarter, including:
    • $37.8 billion of new and renewed commercial and commercial real estate commitments
    • $2.8 billion of lines related to new credit card accounts
    • $22.5 billion of mortgage and other retail loan originations
  • Continued strong growth in average total deposits of 5.5 percent over the third quarter of 2012 and 2.0 percent on a linked quarter basis.
    • Average low cost deposits, including noninterest-bearing and total savings deposits, grew by 8.5 percent year-over-year and 1.0 percent linked quarter
  • Net charge-offs declined on both a linked quarter and year-over-year basis. Provision for credit losses was $30 million less than net charge-offs
    • Net charge-offs were $64 million (16.3 percent) lower than the second quarter of 2013
    • Annualized net charge-offs to average total loans ratio declined to .57 percent
    • Allowance to period-end loans was 1.98 percent at September 30, 2013
  • Nonperforming assets declined on both a linked quarter and year-over-year basis
    • Nonperforming assets (excluding covered assets) decreased 2.1 percent from the second quarter of 2013
    • Allowance to nonperforming assets (excluding covered assets) was 235 percent at September 30, 2013, compared with 231 percent at June 30, 2013, and 213 percent at September 30, 2012
  • Capital generation continues to reinforce capital position and return. Ratios at September 30, 2013 were:
    • Tier 1 capital ratio of 11.2 percent
    • Total risk based capital ratio of 13.3 percent
    • Tier 1 common equity to risk-weighted assets ratio of 9.3 percent
    • Tier 1 common equity ratio of 8.6 percent estimated using final rules for Basel III standardized approach released July 2013
    • Returned 77 percent of third quarter earnings to shareholders through dividends and over 17 million in share buybacks
                                                 
EARNINGS SUMMARY                                   Table 1
($ in millions, except per-share data)                 Percent     Percent            
Change Change
3Q 2Q 3Q 3Q13 vs 3Q13 vs YTD YTD Percent
2013     2013     2012     2Q13     3Q12     2013     2012     Change
 
Net income attributable to U.S. Bancorp $1,468 $1,484 $1,474 (1.1 ) (.4 ) $4,380 $4,227 3.6
Diluted earnings per common share $.76 $.76 $.74 -- 2.7 $2.25 $2.12 6.1
 
Return on average assets (%) 1.65 1.70 1.70 1.67 1.66
Return on average common equity (%) 15.8 16.1 16.5 16.0 16.4
Net interest margin (%) 3.43 3.43 3.59 3.45 3.59
Efficiency ratio (%) 52.4 51.7 50.4 51.6 51.1
Tangible efficiency ratio (%) (a) 51.3 50.6 49.1 50.5 49.8
 
Dividends declared per common share $.230 $.230 $.195 -- 17.9 $.655 $.585 12.0
Book value per common share (period-end) $19.31 $18.94 $18.03 2.0 7.1
 
(a)   Computed as noninterest expense divided by the sum of net interest income on a taxable-equivalent basis and noninterest income excluding net securities gains (losses) and intangible amortization.
     

Net income attributable to U.S. Bancorp was $1,468 million for the third quarter of 2013, .4 percent lower than the $1,474 million for the third quarter of 2012, and 1.1 percent lower than the $1,484 million for the second quarter of 2013. Diluted earnings per common share of $.76 in the third quarter of 2013 were $.02 higher than the third quarter of 2012 and equal to the previous quarter. Return on average assets and return on average common equity were 1.65 percent and 15.8 percent, respectively, for the third quarter of 2013, compared with 1.70 percent and 16.5 percent, respectively, for the third quarter of 2012. The provision for credit losses was lower than net charge-offs by $30 million in the third quarter and the second quarter of 2013 and $50 million lower in the third quarter of 2012.

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