US Bancorp 4Q Profit Up 64 Percent

MINNEAPOLIS (AP) — U.S. Bancorp said its fourth-quarter profit jumped 64 percent as it wrote off fewer bad loans. The bank said new lending of $65.6 billion was at its highest level since before the financial panic that began in late 2008.

The bank said its net income available to its shareholders rose to $951 million, or 49 cents per share, for the quarter, up from $580 million, or 30 cents per share, a year ago.

Revenue rose 7.9 percent to $4.72 billion from $4.38 billion a year earlier.

Analysts surveyed by FactSet, who were expecting 45 cents per share on revenue of $4.54 billion, but typically exclude one-time items from their estimates.

The bank said its results were boosted by 3 cents per share by special items including a gain on trading away the asset management business FAF Advisors Inc. in exchange for a stake in Nuveen Investments. Excluding special items, its adjusted earnings would have only been a penny a share above analysts’ estimates.

Nonetheless, U.S. Bancorp shares fell 78 cents, or 2.9 percent, to $26.53 in morning trading.

The company wrote off $937 million in bad loans during the quarter, down from $1.11 billion a year earlier, and down from $995 million during the third quarter. U.S. Bancorp said it expects the trend of writing off fewer bad loans to continue during the first quarter.

As of Dec. 31, the bank had $3.35 billion in loans where the borrower was missing payments, down from $3.9 billion at the end of 2009. That figure doesn’t include loans the bank has acquired under loss-sharing agreements with the federal government.

The bank ended the year with $5.53 billion set aside for bad loans, up from $5.26 billion at the end of 2009. During the fourth quarter it set aside $912 million for bad loans, down from $1.39 billion during the fourth quarter of 2009.

The net effect was that it released $25 million from loan reserves during the quarter — the first time it has done so since the financial crisis began.

“Credit quality continued to improve in the fourth quarter,” Chairman, President and CEO Richard K. Davis said.

Banks submitted capital plans to the Federal Reserve earlier this month. U.S. Bancorp has said it would like to raise its nickel-per-share dividend but has been prevented from doing so until the review was done. On Wednesday it said that raising the dividend “remains a top priority … our shareholders deserve to be rewarded.”

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  • TMH

    So why does one party say TARP did not work? Why do they say that goverment bailouts by big government spending politian’s (that we certainly are not and never would ever consider such a thing, ever, never) are destroying this country economically if we don’t stop them? (Wasn’t TARP was initiated by the Bush administration?) This shows yet another TARP success and another foot in that parties mouths.

  • M

    US Bank never wanted TARP money. They were FORCED to take it. They were one of the first banks to repay the money they never wanted.

  • TMH

    You’re right M. I was mistaken. TARP did work and all of it but a small portion has been paid back.

  • Dan

    Tarp did not work. One might think it worked in the sense that many banks, such as US Bancorp, borrowed – forcibly or not – money from the Treasury and paid it back, even at some interest. But it definitely did not work given the prescribed and pundit-sold notion that we, the taxpayers, would give these “too big to fail” banks between $600 and $700 billion in “bailout” TARP funds and they would, in turn, begin lending again which would reinvigorate the economy and put the average worker/taxpayer back to work. This has not happened. Instead big banks (financial services companies included) used taxpayer money to reinvigorate themselves, within two years boasting record profits while the economy feels little to nothing of the anticipated benefits. Unemployment remains high, deficits continue to plague the federal govt as well as states. And still, even as corporations such as Bank of America pay absolutely nothing in taxes (thanks to 115 offshore tax havens and paltry regulation), public services and employee wages decline. Even if US bancorp was not a primary culprit they nonetheless act in much the same way as any other corporation in a free market system – putting profit over people, even if those very people picked them up when they were down. Indeed, TARP has NOT worked, at least not for the American people. And whatever the government may have made off those TARP loans repaid, such as the $334 million or so (If memory serves) they made of US Bancorp, you can bet they didn’t spend it on the people. If anything it just goes to serve the money lost by the Bush era tax cuts or to feed the Pentagon’s gargantuan war budget.

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