- USB reports second-quarter earnings of 71 cents a share, beating the consensus estimate of 70 cents.
- Net interest income increases, but second-quarter net interest margin declines slightly from the first quarter, to 3.58%.
- Noninterest income increases 5% sequentially, with strong mortgage, card, and merchant processing revenue.
Based on quarterly payout of 19.5 cents, the shares have a dividend yield of 2.33%. The shares trade for 11 times the consensus 2013 EPS estimate of $3.00. The consensus 2012 EPS estimate is $2.79. Jefferies analyst Ken Usdin rates U.S. Bancorp a "Hold," with a $35 price target, and said after the earning announcement that "overall results should support future estimates," and that "highlights of the quarter include better-than-expected fee performance, strong loan growth, and continued deployment of capital." The analyst called U.S. Bancorp's "efficiency still best-in-class," because even though the company's expenses increased by $41 million during the second quarter, "efficiency actually improved in the quarter (51% vs. 52% in 1Q)." The efficiency ratio is, essentially, the number of pennies of overhead expense incurred for every dollar of revenue generated. FBR analyst Paul Miller rates U.S. Bancorp "Outperform," with a $36 price target, saying Wednesday that "while USB is relatively expensive compared with peers on a
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