U.S. Bancorp Profit Jumps 56% on Higher Revenue
Minneapolis-based U.S. Bancorp on Tuesday reported first-quarter earnings of $1.05 billion, or 52 cents per share-marking a 56 percent jump over the same period one year ago.
Analysts polled by Thomson Reuters expected the company to earn 49 cents per share.
The bank holding company attributed its surge in earnings to significant revenue growth-which rose 4.6 percent to $4.5 billion-and reduced funds allocated to losses related to loans. The company's provision for credit losses was $755 million, or 42 percent less than during the first quarter of 2010.
The quarter was also positively affected by the company's acquisition of First Community Bank of New Mexico.
U.S. Bancorp reported an increase in new lending activity across multiple areas, including $17.7 billion in mortgage and other retail originations; $11.9 billion of new commercial and commercial real estate commitments; and $15.9 billion of commercial and commercial real estate commitment renewals. But total loans, excluding acquisitions, grew only 0.7 percent during the quarter.
President and CEO Richard K. Davis said in a statement that the results reflect the company's “proven business model during a recovering, yet still uncertain, economic environment.”
“The economy is slowly recovering,” Davis continued. “We can see it in our customers' actions-from growth in small business lending to higher payment processing transaction volumes to improving credit metrics-and, importantly, in our customers' outlook.”
News of increased profits wasn't enough to generate a favorable response from Wall Street: The company's stock price slid about 2 percent following the announcement to close at $25.25 per share on Tuesday.
With $308 billion in assets as of the end of 2010, U.S. Bancorp is Minnesota's largest bank-holding company.