Minnesota’s Two Largest Banks Edge Past Expectations In Fourth Quarter

Both U.S. Bancorp and Wells Fargo posted earnings per share that beat out analyst expectations.

Minnesota’s Two Largest Banks Edge Past Expectations In Fourth Quarter
The two largest banks in Minnesota, U.S. Bancorp and Wells Fargo, reported better-than-expected fourth quarter results on Friday.
Minneapolis-based U.S. Bancorp, the state’s second largest bank and fifth-largest in the nation, said it achieved a record full-year profit increase of 2.5 percent. As for the three-month quarter ending December 31, the bank earned $1.48 billion—a slight decrease from the $1.49 billion it earned in the same period last year.
U.S. Bancorp’s earnings inched forward by a penny to 80 cents per share. Analysts at Thomson Reuters anticipated earnings of 79 cents per share with $5.12 billion in revenue. Instead, the Minneapolis bank edged past expectations again with a reported $5.21 billion in revenue.
Its gains, the company said, were a result of provisions for credit card losses, which rose nearly 6 percent year-to-year during the fourth quarter. In that same frame of time, fees from debit and credit cards increased by more 8 percent as well. U.S. Bancorp’s largest year-to-year declines were in mortgage banking and investment product revenue, both of which fell by more than 10 percent.
“U.S. Bancorp delivered a remarkable performance in 2015; a year underscored by persistent and historically low interest rates, modest economic growth, and increasing regulatory requirements,” said U.S. Bancorp CEO Richard Davis in a statement. Moving into 2016, he believes the bank is “well positioned” and feels “optimistic about the momentum building.”
San Francisco-based Wells Fargo, which stands as Minnesota’s largest bank and the largest in the nation by market value, posted positive revenue growth but a flat year-to-year profit margin in the fourth quarter.
From October to the end of December, Wells Fargo’s revenue rose by $200 million, from $21.4 billion last year to $21.6 billion most recently. Its $5.71 billion in fourth quarter profits did not change from last year, although its earnings per share increased by a penny to $1.03 a share compared to the same timeframe in 2014. Thomson Reuters analysts predicted earnings of $1.02 per share, just short of what Wells Fargo posted. The California bank’s revenue, however, did not reach the $21.8 billion result that analysts anticipated.
In a statement, Wells Fargo CEO John Stumpf said its results “demonstrated the benefit of our diversified business model.” In regards to its 2015 investments on energy companies like General Electric, he said the bank “again generated strong financial results, maintained our risk discipline and continued to invest across the company for future growth.”
Stocks for both banks tumbled in early morning trading, yet appear to be rebounding. As of mid-morning Friday, U.S. Bank was positioned at $38.58 after opening at $38.01, while Wells Fargo was at $48.99 after opening at $48.59.
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