U.S. Bancorp ( USB) became the latest regional bank to take a big hit to fourth-quarter earnings, but nonetheless still raised its
dividend . In the final three months of the year, U.S. Bancorp made $942 million, or 53 cents a share, down 21% compared to $1.19 billion, or 62 cents a share, in the year earlier period. Analysts on average expected the Minneapolis-based bank to earn 59 cents a share. Revenue met analysts' expectations at $3.5 billion, which was basically flat from the year-ago period. In the fourth quarter, the company recognized a $107 million writedown, or 4 cents a share, due to the purchase of certain asset-backed commercial paper holdings from money market funds managed by its subsidiary, FAF Advisors. It also recorded a charge of $215 million, or 9 cents a share, for its share of litigation brought by American Express ( AXP) against Visa and a host of member banks for allegedly conspiring to keep American Express out of the bank-issued credit card business. U.S. Bancorp had warned in December of the charges. U.S. Bancorp, a traditionally more conservative lender and with significant fee-based businesses primarily in wealth management and payment processing, increased its dividend to 42.5 cents from 40 cents. It is likely to be one of the few banks to do so in the tough current banking environment, as many financial companies look for ways to preserve capital. "The company produced strong core revenue growth in the fourth quarter on both a year-over-year and linked quarter basis," according to Chairman and CEO Richard Davis. "This growth was driven by our fee-based businesses, including payments and trust and investment management, but it also benefited from an increase in net interest income." "Our company's credit quality remains sound," Davis continued. "Both net charge-offs and nonperforming assets increased during the fourth quarter, but the growth was moderate and as expected. We will not be immune to the current stress in the residential real estate markets and mortgage-related industries, but given the company's overall risk profile, increases in net charge-offs and nonperforming assets in the coming year will be manageable." Earnings at U.S. Bancorp don't appear as grim when compared to banking giant Citigroup's ( C) fourth-quarter net loss of nearly $10 billion, also announced on Tuesday. Citi's $18.1 billion in writedowns has forced the New York banking titan to slash its dividend and seek additional capital in order to steady its business. On Monday, Buffalo-based M&T Bank ( MTB) reported a 70% drop in quarterly earnings from a combination of sour investments in mortgage-tainted collateralized debt obligations, or CDOs, and provisions for future losses and litigation. U.S. Bancorp shares fell about 1.1% at the market's open Tuesday to $29.98.