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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