U.S. Bancorp said third-quarter profit was little changed as revenue fell and the bank set aside less money for bad loans.
Net income dropped 0.4 percent to $1.468 billion, or 76 cents a share, from $1.474 billion, or 74 cents, a year earlier, the Minneapolis-based bank said today in a statement. The average estimate of 34 analysts surveyed by Bloomberg was for earnings of 76 cents.
Chief Executive Officer Richard Davis told investors at a conference last month that the company was having a "very good quarter" amid loan growth from the previous three-month period. The company is also focusing on bolstering fees from businesses including wealth management and trust. U.S. Bancorp set aside $298 million for its loan-loss provision in the third quarter, or 39 percent less than a year earlier.
The results "reflected our continuing ability to manage through the current uncertain and slow-growing economy," Davis, 55, said in today's statement.
Total revenue declined 5.6 percent from a year earlier to $4.89 billion, led by a 37 percent drop in mortgage banking revenue, which fell to $328 million. Net interest margin, the difference between what a bank pays for deposits and charges for loans, narrowed to 3.43 percent from 3.59 percent a year earlier.
During the third quarter, the company repurchased $659 million of common shares.
A jump in the 10-year Treasury yield last quarter prompted a decline in mortgage revenues at the biggest U.S. banks as fewer borrowers refinanced loans. JPMorgan Chase & Co., the largest U.S. lender, said last week that mortgage fees and related revenue plunged 65 percent to $839 million in the third quarter. Mortgage banking revenue at Wells Fargo & Co. declined 43 percent to $1.61 billion, the San Francisco-based lender said.
U.S. Bancorp Chief Financial Officer Andrew Cecere said last month mortgage applications would fall 40 percent in the third quarter, mortgage production would decline 20 percent and mortgage revenue would drop 20 percent.
U.S. Bancorp gained 15 percent this year through yesterday, trailing the 24 percent advance of the 24-company KBW Bank Index.
