Achieves Record Total Net Revenue of $4.7 Billion
MINNEAPOLIS--(BUSINESS WIRE)--U.S. Bancorp (NYSE: USB) today reported net income of $974 million for the fourth quarter of 2010, or $.49 per diluted common share. Earnings for the fourth quarter of 2010 were driven by record total net revenue of $4.7 billion. Included in the fourth quarter of 2010 results was a $103 million gain ($41 million after tax) from the exchange of the long-term asset management business of FAF Advisors, Inc., an affiliate of the Company, for an equity interest in Nuveen Investments and cash consideration (“Nuveen Gain”). Additional significant items included a provision for credit losses lower than net charge-offs by $25 million and net securities losses of $14 million. In total, these items increased fourth quarter 2010 diluted earnings per common share by $.03. Highlights for the fourth quarter of 2010 included:
- Strong new lending activity of $65.6 billion during the fourth quarter, the highest level reported since before the fourth quarter of 2008, including:
- $16.0 billion of new commercial and commercial real estate commitments
- $21.5 billion of commercial and commercial real estate commitment renewals
- $2.0 billion of lines related to new credit card accounts
- $26.1 billion of mortgage and other retail originations
- $203.2 billion of new lending activity for the full year, 9.9 percent higher than 2009
- Average total loan growth of 2.0 percent (.9 percent excluding acquisitions) over the fourth quarter of 2009
- Average total loan growth of 1.5 percent over the third quarter of 2010
- Average total commercial loan growth of 2.0 percent over the prior quarter
- Significant growth in average deposits of 5.2 percent (5.1 percent excluding acquisitions) over the fourth quarter of 2009, including:
- 4.8 percent growth in average noninterest-bearing deposits
- 11.5 percent growth in average total savings deposits
- Total net revenue growth of 7.9 percent over the fourth quarter of 2009, resulting in record total net revenue of $4.7 billion
- Net interest income growth of 5.9 percent over the fourth quarter of 2009, driven by a 5.9 percent increase in average earning assets and growth in lower cost core deposit funding
- Net interest margin of 3.83 percent for the fourth quarter of 2010, equal to the fourth quarter of 2009, and lower than the 3.91 percent in the third quarter of 2010
- Strong year-over-year growth in payments-related fee income, commercial products revenue and mortgage banking revenue, driven by:
- Higher credit and debit card revenue (7.3 percent), corporate payment products revenue (4.2 percent) and merchant processing services revenue (3.5 percent)
- A 12.4 percent increase in commercial products revenue (principally syndication revenue, standby letters of credit fees and commercial loan fees)
- Mortgage production of $19.6 billion, leading to a 14.7 percent increase in mortgage banking revenue
- Net charge-offs and nonperforming assets declined on a linked quarter basis. Provision for credit losses was $25 million less than net charge-offs.
- Fifth consecutive quarterly decrease in the provision for credit losses
- Net charge-offs declined 5.8 percent from the third quarter of 2010
- Nonperforming assets (excluding covered assets) decreased 6.0 percent from the third quarter of 2010
- Early and late stage loan delinquencies (excluding covered loans) as a percentage of ending loan balances declined in most loan categories on a linked quarter basis
- Allowance to period-end loans (excluding covered loans) was 3.03 percent at December 31, 2010, compared with 3.10 percent at September 30, 2010, and 3.04 percent at December 31, 2009
- Allowance to nonperforming assets (excluding covered assets) was 162 percent at December 31, 2010, compared with 153 percent at September 30, 2010, and 135 percent at December 31, 2009
- Strong capital generation continues to strengthen capital position; ratios at December 31, 2010 were:
- Tier 1 common equity ratio of 7.8 percent
- Tier 1 capital ratio of 10.5 percent
- Total risk based capital ratio of 13.3 percent
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