U.S. Bancorp Profit Rises on Increased Loans, Deposits
July 15 2016 - 7:54AM
Dow Jones News
By Rachel Louise Ensign and Austen Hufford
U.S. Bancorp said its profit increased in the second quarter as
both loans and deposits rose.
Earnings beat Wall Street estimates.
The bank posted earnings of $1.52 billion, up from $1.48 billion
in the prior-year period. On a per-share basis, earnings rose to 83
cents from 80 cents.
Revenue at the Minneapolis-based bank rose 8.1% to $5.45
billion. Analysts had expected 80 cents a share in earnings and
$5.19 billion in revenue, according to Thomson Reuters.
Like other regional banks, U.S. Bank has remained under pressure
from low interest rates. That has intensified after the U.K.'s vote
to leave the European Union. After the Brexit vote, prospects for
near-term Federal Reserve rate increases dimmed and long-term bond
yields fell to record lows.
"We were positioned well to provide products and services to our
customers as they navigated through the recent market volatility,"
Chief Executive Richard Davis said.
Excluding an asset sale, noninterest revenue increased 4.4% due
to increases in credit and debit card revenue, trust and investment
management fees and commercial products revenue.
Net interest margin, an important measure of lending
profitability, fell to 3.02% from 3.06% in the first quarter due to
changes in the loan portfolio mix as well as lower average rates on
new securities purchases
Expenses rose 11.6% to $2.99 billion on higher variable
compensation expense, increased compliance costs and higher
marketing expense due to "brand investment." Marketing and business
development costs increased 55% in the quarter from the same period
a year earlier.
Average total loans rose by 8.1%, spurred by broad-based
increases across credit card, residential mortgages and commercial
loans. Deposits increased 7.6%.
Write to Rachel Louise Ensign at rachel.ensign@wsj.com and
Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
July 15, 2016 07:39 ET (11:39 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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