U.S. Bancorp Weathering the Credit Storm

While headlines this morning are bemoaning US Bancorp's(USB Quote) drop in year-over-year earnings, at this point in the credit cycle it is silly to dwell on comparison to much better times.

Shares were down 3.8% in late morning trading to $23.29, as the company came in slightly under consensus expectations. It is common knowledge that banks have suffered over the past year, but the real story for US Bancorp is what it has achieved under tough conditions. The company posted a 7.5% increase in net revenue year-over-year, as it grew its balance sheet 11% and improved its net interest margin to 3.61% for the second quarter, compared to 3.55% last quarter and 3.44% in the second quarter of 2007.

That's rather impressive. At least through the first quarter of 2008, many large regional holding companies reported narrowing net interest margins over the past year. These included SunTrust(STI Quote), National City(NCC Quote) and Regions Financial(RF Quote). We'll see how margins for this group fare when they release second quarter earnings results. ...