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Home > BizTimes Daily > Archives > October 22, 2008
U.S. Bancrop still profitable
Published October 22, 2008 - BizTimes Daily
U.S. Bancorp, the Minneapolis-based parent company of U.S. Bank, reported third-quarter net income of $576 million, or 32 cents per share, down from $950 million, or 53 cents per share, in the same period a year ago.
U.S. Bancorp chairman, president and chief executive officer Richard Davis said, "U.S. Bancorp's third quarter results reflected the underlying strength of our banking franchise and business model, as well as the challenges presented to us by the current operating environment. Strong year-over-year growth in average loans and deposits, an expanded net interest margin and higher fee-based revenue, demonstrated our ability - and on-going opportunity - to provide banking products and services to our growing customer base."
Davis said market conditions led to valuation losses on certain investments and higher credit costs.
"As expected, credit costs were higher this quarter, reflecting stress in the residential mortgage portfolio and residential homebuilding and related businesses, as well as the overall economy. Net charge-offs of $498 million were higher than the previous quarter by 25.8 percent and equal to 1.19 percent of average loans outstanding. Nonperforming assets ended the quarter at $1,492 million, an increase of 31.5 percent over the second quarter of this year, and equal to .88 percent of outstanding loans plus other real estate," Davis said. "We began this credit cycle with a strong balance sheet and we intend to keep that balance sheet strong throughout, and beyond, the end of this cycle. Credit costs will continue to increase in the coming quarter, but we expect that increase to be manageable given the company's capacity to produce solid, core operating earnings."
