U.S. Bancorp (US) reported fourth-quarter profit that beat analysts' estimates as the bank set aside less money for credit losses.

Net income rose 2.5% to $1.46 billion, or 76 cents a share, from $1.42 billion, or 72 cents, a year earlier, the Minneapolis bank said Wednesday. The average estimate of 31 analysts surveyed by Bloomberg was for adjusted earnings of 75 cents a share. Full-year net income increased 3.3 % to a record $5.8 billion.

U.S. Bancorp, run by Chief Executive Officer Richard Davis, joins other regional lenders whose attention is shifting from credit-crisis fallout to the nation's improving economy. The bank's provision for credit losses dropped 37% from a year earlier, to $277 million. The company, which said last month higher rates may prompt a decline in mortgage-banking revenue, outpaced larger peers in the first three quarters last year on metrics including return on equity, return on assets and cost controls.

"Credit quality continues to be strong," Davis, 55, said in a news release. "Fee-based revenue was negatively impacted this quarter on both a year-over-year and linked-quarter basis by the reduction in mortgage-banking activity, but the impact was muted by growth in other fee businesses and, overall, by prudent expense management."

Revenue in the fourth-quarter declined 4.4% to $4.89 billion, driven by a 51% drop in mortgage banking. Noninterest expenses fell less than 1% to $2.68 billion. The net interest margin, the difference between what a bank pays for deposits and charges for loans, decreased to 3.4% in the fourth quarter from 3.43% three months earlier.

"U.S. Bancorp has good growth prospects and largely remains insulated from the struggles the banking industry as a whole is facing," Paul Miller, an analyst at FBR Capital Markets Corp., said in a Jan. 10 research note.

Among its regional peers, fourth-quarter profit increased 53% at Pittsburgh-based PNC and 20% for Atlanta-based SunTrust Banks Inc. Earnings rose 1.9 % at Capital One Financial Corp. of McLean, Virginia.

U.S. Bancorp agreed Jan. 7 to buy the Chicago branches of Charter One Bank owned by RBS Citizens Financial Group. In November, the lender agreed to buy Quintillion Ltd., a Dublin-based hedge-fund administrator.

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