This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

U.S. Bancorp Reports Strong Loan Growth (Update 1)

Stocks in this article: USB CMA KEY

  • Third-quarter EPS of 76 cents matches the consensus estimate.
  • Average loans, excluding acquired covered loans, up 2.2% from the second quarter.
  • Net interest income rises sequentially.
  • Net interest margin unchanged from the second quarter.
  • Mortgage banking revenue sinks 17% from the second quarter, 37% year over year.

Updated from 8:44 a.m. ET with market action and comment from Jefferies analyst Ken Usdin.

NEW YORK ( TheStreet) -- U.S. Bancorp (USB) on Wednesday reported very solid growth of average loans, at an annualized pace of nearly 9%.

The Minneapolis lender reported third-quarter earnings of $1.468 billion, or 76 cents a share, compared to $1.484 billion, or 74 cents a share, in the second quarter, and $1.474 billion, or 74 cents a share, in the third quarter of 2012.

Third-quarter EPS matched the consensus estimate among analysts polled by Thomson Reuters.

U.S. Bancorp is the sixth-largest bank holding company in the United States, with $360.7 billion in total assets as of Sept. 30.

The company's third-quarter net interest income came in at $2.714 billion, increasing from $2.672 billion the previous quarter but declining from $2.783 billion a year earlier. The net interest margin -- the spread between the average yield on loans and investments and the average cost for deposits and borrowings -- was 3.43% during the third quarter, which was stable from the second quarter but down from 3.59% in the third quarter of 2012. The year-over-year margin decline reflects the industry trend, as the Federal Reserve has kept the short-term federal funds rate in a range of zero to 0.25% since late 2008.

USB's noninterest income declined to $2.177 billion in the third quarter from $2.276 billion the previous quarter and $2.396 billion a year earlier. The main factor in this decline was the decline in mortgage banking revenue to $328 million in the third quarter, from $396 million in the second quarter and $519 million in the third quarter of 2012. This also follows the expected industry trend, as the mortgage loan refinancing wave has been curtailed by a significant rise in long-term interest rates over the past six months.

Another expected trend for major banks has been "reduced credit leverage," as banks see less of a benefit from improved loan quality. U.S. Bancorp's third-quarter provision for loan losses was $2.028 billion, declining very slightly from $2.029 billion in the second quarter and down from $2082 billion in the fourth quarter of 2012. The provision is the amount added to loan loss reserves.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs