U.S. Bancorp (USB) earned $974 million for the fourth quarter of 2010, or 49 cents per share, a 61.8% gain from a year earlier, driven by strong lending and declining credit costs. That compares to $602 million for the year-ago period, or 30 cents per share. The bank reported record revenue of $4.7 billion, up about 8% compared to $4.38 billion a year ago. For the full year, U.S. Bancorp earned $3.32 billion, up from $2.21 billion in 2009. Revenue for the year was $18.15 billion, up from $16.67 billion in 2009. Included in the fourth quarter results was a $103 million gain ($41 million after tax) from the exchange of U.S. Bancorp’s long-term asset management business FAF Advisors for an equity interest in Nuveen Investments. Mortgage production was $19.6 billion, a 14.7% increase in mortgage banking revenue over the year-ago quarter. However, U.S. Bancorp reported “continued stress in the residential mortgage portfolio,” and an increase in foreclosed properties compared with a year ago, which it attributed to the weak economy. Residential mortgage-related nonperforming assets were $1.7 billion at Dec. 31, down from $2 billion a year ago. The majority were considered credit-impaired at acquisition and were recorded at their estimated fair value at the date of acquisition, the bank said. The bank recorded $65.6 billion in lending during the fourth quarter, the highest level reported since before the fourth quarter of 2008, including:

• $16 billion of new commercial and commercial real estate commitments

• $21.5 billion of commercial and commercial real estate commitment renewals

• $2 billion of lines related to new credit card accounts

• $26.1 billion of mortgage and other retail originations

• $203.2 billion of new lending activity for the full year, 9.9% higher than 2009

“We are larger and stronger than we were at the beginning of this year and continue to gain momentum during this economic cycle,” said Chief Executive Officer Richard Davis. U.S. Bancorp completed two acquisitions during the year. One was the acquisition of a securitization trust administration business. This transaction included $1.1 trillion of assets under administration and provided U.S. Bank with approximately $8 billion of deposits at close. The other the exchange of  FAF Advisors for an equity stake in Nuveen Investments. Write to Kerry Curry. Follow her on Twitter @communicatorKLC The author holds no relevant investments.