U.S. Bancorp reports EPS in-line, misses on revs; NIM unchanged at 3.43% QoQ
Reports Q3 (Sep) earnings of $0.76 per share, in-line with the Capital IQ Consensus Estimate consensus of $0.76; revenues fell 5.6% year/year to $4.89 bln vs the $4.95 bln consensus. •Total net revenue on a taxable-equivalent basis for the third quarter of 2013 was $4,891 mln; $288 mln (5.6 percent) lower than the third quarter of 2012, reflecting a 2.5 percent decrease in net interest income and a 9.1 percent decrease in noninterest income. •USB reported 22.5 bln of mortgage and other retail loan originations. •The net interest margin in the third quarter of 2013 was 3.43 percent, compared with 3.59 percent in the third quarter of 2012, and 3.43 percent in the second quarter of 2013. •Net interest income declined year-over-year, as an increase in average earning assets was offset by a decrease in the net interest margin. Noninterest income declined year-over-year, primarily due to lower mortgage banking revenue. •The Company's provision for credit losses for the third quarter of 2013 was $298 mln, $64 mln lower than the prior quarter and $190 mln lower than the third quarter of 2012. •Average total loans were $12.4 bln (5.7 percent) higher in the third quarter of 2013 than the third quarter of 2012, driven by growth in residential mortgages (19.9 percent), commercial loans (10.9 percent), retail leasing (7.8 percent), total commercial real estate (5.1 percent), credit card (2.3 percent) and other retail loans (1.1 percent). •On a linked quarter basis, net charge-offs decreased $64 mln (16.3 percent), and nonperforming assets, excluding covered assets, decreased $41 mln (2.1 percent). The allowance for credit losses was $4,578 mln at September 30, 2013, compared with $4,612 mln at June 30, 2013, and $4,771 mln at September 30, 2012. •USB reports Tier 1 common equity ratio of 8.6 percent estimated using final rules for Basel III standardized approach released July 2013. •"The Company's third quarter earnings of $1.5 bln, or $.76 per diluted common share, reflected our continuing ability to manage through the current uncertain and slow-growing economy. Our Company produced industry-leading performance metrics, including return on average assets of 1.65 percent, return on average common equity of 15.8 percent and an efficiency ratio of 52.4 percent, as our diversified mix of businesses mitigated the impact of the pull-back in mortgage banking activity."