(Includes information from earnings conference call, updated share prices.)

US Bancorp's ( USB) shares climbed as much as 5.4% Wednesday after beating earnings estimates for the second quarter.

The Minneapolis-based bank managed to record earnings of 12 cents a share, beating consensus estimates by 2 cents a share. Revenue rose 9.4% from the year-earlier period to $4.2 billion, a record for the company, it said. The stock was recently adding 98 cents to $19.25.

Like other banks, US Bancorp was required to pay a special assessment to the Federal Deposit Insurance Corp. that equaled 5 cents a share, the company said. It also was one of the nine banks to repay government bailout funds in the quarter, which cost it 8 cents a share.

Still, credit costs ate up the largest portion of the quarter's earnings. US Bancorp recorded a provision of $1.39 billion, $466 million of which -- the provision in excess of net charge-offs -- cost it 20 cents a share.

As a result, US Bancorp's profit was dramatically lower compared to the same time last year. Net income applicable to shareholders fell by 76% to $221 million from $926 million, or 53 cents a share, a year earlier.

"Overall, while US Bancorp is of course being impacted by the credit cycle, we thought the company's performance was certainly among the best we have seen this quarter, and it reinforced the bank's position as one of the strongest large banks in the country," Sandler O'Neill & Partners analyst Scoff Siefers writes in a note.

US Bancorp CEO Richard Davis said in a press release that the company "achieved record net revenue of $4.2 billion in the second quarter," as it built its balance sheet and fee-based businesses.

"Our balance sheet businesses have capitalized on the 'flight to quality' over the past number of quarters, adding loan and deposit customers and balances, leading to growth in net interest income," Davis said.

The company also had "record" mortgage loan production of $16.3 billion in the second quarter, originating $4.1 billion of new consumer loans and over $25 billion of new and renewed commercial and commercial real estate commitments in the quarter.

Still, US Bancorp said the increase in credit losses reflects the continued stress in residential real estate markets, as well as deteriorating economic conditions and the "corresponding impact on the commercial, commercial real estate and consumer loan portfolios."

Net charge offs rose from the first quarter by 18% to $929 million. US Bancorp expects charge-offs to remain "elevated" for 2009. It also expects nonperforming assets to continue to increase this year as weak economic conditions "affect an increasing number of borrowers in both the commercial and consumer loan categories," the company said.

"Although credit costs rose and continued to exert pressure on earnings, we see some signs that deterioration in the portfolio is slowing, at least in the consumer books, where delinquencies rose more slowly than in the previous quarter," Standard & Poor's analysts said. "Commercial real estate delinquencies are occurring more rapidly, however."

Other regional banks that reported second-quarter results on Wednesday are also showing continued strains in their loan portfolios, both on the consumer side, as the weak economy drags on, and increasingly so in the commercial sector.

Wells Fargo ( WFC) shares sunk nearly 6% on Wednesday on worries about the company's escalating credit problems, despite a huge profit beat.

KeyCorp ( KEY) shares also slumped 2% after it said losses attributable to common shareholders amounted to $390 million in the second quarter, or 68 cents per share. That far surpasses the analyst consensus estimate of a loss of 41 cents a share.

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