US Bancorp earnings up 57% despite headwinds
U.S. Bancorp (USB) reported net income of $1.2 billion, or 60 cents per share, in the second quarter, up 57% from one year ago. Total revenue at the bank was $4.69 billion, up slightly from $4.52 billion a year ago. But it cut the provision for credit losses more than half, totaling $572 million in the second quarter, down from $1.1 billion one year ago and $755 million in the previous quarter. Net chargeoffs for residential mortgages were $119 million, or 1.46% of average loans outstanding, down from $138 million, or 2.06% of average loans outstanding, in the year-ago quarter. Mortgage banking revenue at U.S. Bank was flat at $239 million, down slightly from $243 million one year ago but up from $199 million in the previous quarter. The Minneapolis-based regional bank wrote $8 billion in new mortgages, down from more than $10.5 billion in the same quarter last year and $12.1 billion in the first three months of 2011. U.S. Bank still holds more than $1.9 billion in outstanding subprime mortgages, down only slightly from $2 billion the previous quarter. Of these, 7.46% were in 30-day delinquency or worse. "Our business lines performed well this quarter despite on-going economic headwinds and a very modest demand for new lending," said U.S. Bank CEO Richard Davis. "The banking industry continues to face a difficult and increasingly complex environment in which economic uncertainty, regulation and changes in customer and competitor behavior have an impact on how we allocate resources and manage operations, as well as on how we position ourselves for future earnings growth." Write to Jon Prior. Follow him on Twitter @JonAPrior.