Current Issue
US Bancorp (USB: 23.45 -0.17%) earned net income of $603m, or $0.30 per share, in Q309, up from $576m in Q308.
The company recorded net revenue of $4.3bn, driven by growth in net interest income and fee revenue. Revenue was impacted by three major items, the bank said — a $415m provision for credit losses in excess of net charge-offs, $76m of net securities losses and a $39m gain related to the company’s investment in credit card company Visa (V: 83.47 +0.51%), resulting in a $0.19 net per-share decline in quarter earnings.
The bank experienced a $215m increase in mortgage banking revenue compared to Q308 that it credited to loan production volume of $14.8bn and loan applications totaling $15.5bn. Residential mortgage lending increased 1.8% from Q209 to Q309.
The allowance for residential mortgage credit losses was $129m, up from $116m in Q209 and $71m inQ308.
“Both net interest income and noninterest income increased over the same quarter of 2008 and the prior quarter, as the company continued to experience a ‘flight to quality’ in its traditional balance sheet businesses, evidenced by the quarter’s significant growth in core deposits, as well as positive results from its fee-based business lines and recent growth initiatives,” US Bancorp president and CEO Richard Davis said in the company’s quarterly report.
During Q209, US Bancorp repaid its $6.6bn Troubled Asset Relief Program (TARP) loan, and in Q309, repurchased the 10-year warrant issued to the US Treasury at a cost of $139m, “effectively concluding our participation in TARP,” Davis said.
“We now move forward with the capacity to continue to invest, unencumbered, in our franchise and fee-based businesses, as we remain profitable during this difficult business cycle, generating capital for growth opportunities and our shareholders,” he added.
Write to Austin Kilgore.
