U.S. Bancorp was a leader in commercial loan growth in 2011, but it is forecasting a slowdown in the first half of 2012.

The Minneapolis banking company on Wednesday reported a 2.4% increase in average total loans in the fourth quarter from the previous quarter, including a 5.6% improvement in commercial and industrial lending.

"We will continue to grow our loans. It will be something less than [that] this quarter but more like last year in the first quarter, because we don't see that same robustness," said Richard K. Davis, the chairman and chief executive of the $340 billion-asset company, toward the end of its quarterly conference call. "But I am not trying to telegraph we won't have growth. I am just telling you that the 2.4% total book was probably a high-water mark for last year and we won't see that again until later this year when the year ages and things become a little more normal."

Other big banks have reported wide-ranging results in this category for the fourth quarter. JPMorgan Chase & Co. had $112 billion of commercial loans, up 4.7% from the third quarter. Wells Fargo's commercial loans totaled $345 million, up 1.6% from the third quarter.

Davis' warning was not a necessarily a sign of a stalling economy, he said.

"The fact that there is loan growth at all says that the economy is doing pretty well," Davis said.

Davis' remarks were in response to a question about accelerated depreciation on capital expenditures, a tax advantage extended to borrowers in 2011 that is not available in 2012. An analyst wanted to know if the fourth-quarter loan growth was at least partially driven by borrowers seeking the advantage. That was a part of the reason, Davis replied. Essentially, this quarter's growth prospects were a bit cannibalized by tax advantages in the fourth quarter.

There is a seasonal effect at work, too, U.S. Bancorp executives say, as borrowers are slower to act in the first quarter than they are in the fourth quarter.

Still, in this fragile economy where analysts and investors are hungry for any signs of growth and skittish when any numbers fall, it is important to manage expectations.

"The [larger banks] overall have gained a lot of momentum and it is important to make sure that market expectations don't get ahead of fundamentals," said R. Scott Siefers, an analyst with Sandler O'Neill & Partners L.P. "When you generate such strong loan growth like U.S. Bank, you have to be prudent in setting realistic expectations."

Marty Mosby, an analyst with Guggenheim Partners LLC, added that it was unrealistic for observers to expect loan growth to continue at the same clip.

"They grew loans 25% annualized," Mosby said. "That would not be sustainable in an economy that is growing at 2% to 3%."

Despite the tempering, Davis discussed how the company achieved its loan growth largely through taking market share from other players, particularly in corporate business. U.S. Bancorp's capital markets division is relatively young.

"A lot of the growth is coming from companies doing refinancings. And while that typically would sound like a code word for just rotating your own book, in the position that we are in — where we are continuing to gain market share — we are invited to those refinances," Davis said. "So a lot of our growth is coming from honest-to-God market share improvement by getting into other companies that we weren't part of before."

Though the company has had success in finding borrowers, with originations up 7.2% from the third quarter, utilizations remained flat at about 25%.

"So it's good news when things pop … but it doesn't really put any money in the bank except for the origination fee," Davis said in reference to unused loan commitments.

In an interview, Andrew Cecere, vice chairman and chief financial officer, said the normal level of utilization is between 35% and 40%.

So, how do banks get eligible borrowers to actually borrow?

"The companies need to have those investment opportunities in front of them — things like new plants or increased inventory. We are seeing some signs of that," Cecere said. "When we talk to our customers, they tell us they are feeling good about their business, but the principal level of uncertainty is the larger economy."

In the meantime, customers are using cash to bankroll projects.

"Cash is typically the first place they go," Cecere said, adding that customers have built their cash reserves up over the last few years as they cut expenses. He, however, does not see the deleveraged customers as a societal shift. "I don't expect it to be a long-term phenomenon."

U.S. Bancorp's fourth-quarter earnings jumped 39% as the lender again reduced funds set aside to cover potentially risky loans and benefited from growth in lending.

"Our company achieved record net income for 2011 driven by record net revenue in the fourth quarter and for the full year," Davis said during his prepared remarks. "We accomplished this during a very challenging and uncertain economic and regulatory environment."

The bank has logged solid results in recent quarters thanks to credit conditions in the U.S. that continue to improve.

Provisions for loan losses in the fourth quarter were $497 million, down from $912 million a year earlier and $519 million in the third quarter.

U.S. Bancorp reported a profit of $1.35 billion, or 69 cents a share, up from $974 million, or 49 cents a share, a year earlier.

The latest period included a $263 million merchant settlement gain, partially offset by a $130 million accrual related to mortgage servicing matters. Together, the two items increased per-share earnings in the latest period by a net 5 cents. Analysts polled by Thomson Reuters expected earnings of 63 cents a share.

Revenue improved 8.1% to $5.1 billion, exceeding analyst expectations for revenue of $4.76 billion.

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