U.S. Bancorp Profit Rises on Increased Mortgage Refinancing
October 19 2016 - 8:12AM
Dow Jones News
By Austen Hufford
U.S. Bancorp said profit and revenue increased in its third
quarter on increased mortgage refinancing.
The bank posted earnings of $1.5 billion, up from $1.49 billion
in the prior-year period. On a per-share basis, earnings rose to 84
cents from 81 cents.
Revenue, a combination of net interest income and fee-based
income, rose 4.7% to $5.39 billion. Analysts had expected 83 cents
a share in earnings and $5.35 billion in revenue, according to
Thomson Reuters.
At the Minneapolis-based bank average total loans grew 7.6% from
last year as average total deposits grew 10%.
Mortgage banking revenue increased 40% from last year on
increased refinancing activities driven by lower longer-term
interest rates.
Still, net interest margin, an important measure of lending
profitability, continued to fall, hitting 2.98% from 3.02% in the
second quarter and from 3.04% last year on higher average cash
balances.
Like other regional banks, U.S. Bank has remained under pressure
from low interest rates and a pressured economic recovery.
"The banking industry continues to face steady headwinds,
including persistently low interest rates, a flat yield curve, and
a slow economic recovery that caused some commercial customers to
pause investments in their businesses during the quarter," Chief
Executive Richard Davis said.
Fee-based income rose 4.5% due to higher mortgage banking
revenue, trust and investment management fees and card revenue.
Expenses rose 5.6% due to increased compensation and increased
hiring to support business growth and compliance, increased
technology and communications expense and a special FDIC
surcharge.
Shares, which have increased 2.5% in the last three months, were
inactive in premarket trading.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
October 19, 2016 07:57 ET (11:57 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
US Bancorp (NYSE:USB)
Historical Stock Chart
From Aug 2024 to Sep 2024
US Bancorp (NYSE:USB)
Historical Stock Chart
From Sep 2023 to Sep 2024