Achieves Total Net Revenue of $4.7 Billion; Earns Over $1.2 Billion in Net Income
MINNEAPOLIS--(BUSINESS WIRE)--U.S. Bancorp (NYSE: USB) today reported net income of $1,203 million for the second quarter of 2011, or $.60 per diluted common share. Earnings for the second quarter of 2011 were driven by year-over-year growth in total net revenue and a reduction in the provision for credit losses. Highlights for the second quarter of 2011 included:
- Strong new lending activity of $52.7 billion (11.2 percent increase on a linked quarter basis) during the second quarter including:
- $16.1 billion of new commercial and commercial real estate commitments
- $21.6 billion of commercial and commercial real estate commitment renewals
- $2.0 billion of lines related to new credit card accounts
- $13.0 billion of mortgage and other retail originations
- Growth in average total loans of 4.0 percent (3.5 percent excluding acquisitions) over the second quarter of 2010
- Growth in average total commercial loans of 8.0 percent (7.8 percent excluding acquisitions) over the second quarter of 2010
- Growth in average total loans of .6 percent over the prior quarter (.5 percent excluding acquisitions), including average total commercial
loan growth of 2.8 percent - Quarterly average commercial and commercial real estate commitments increased 4.4 percent over the prior quarter
- Significant growth in average deposits of 14.2 percent (9.6 percent excluding acquisitions) over the second quarter of 2010, including:
- 22.1 percent growth in average noninterest-bearing deposits (21.1 percent excluding acquisitions)
- 15.1 percent growth in average total savings deposits (8.8 percent excluding acquisitions)
- Total net revenue growth of 3.8 percent over the second quarter of 2010
- Net interest income growth of 5.6 percent over the second quarter of 2010, driven by:
- Average earning assets growth of 12.2 percent, including anticipated growth in the investment securities portfolio (33.5 percent)
- Exceptionally strong growth in lower cost core deposit funding
- Net interest margin of 3.67 percent for the second quarter of 2011, compared with 3.90 percent for the second quarter of 2010, and 3.69 percent for the first quarter of 2011 (decline year-over-year principally due to higher investment securities portfolio balances and cash balances at the Federal Reserve)
- Strong year-over-year growth in payments-related fee income, driven by:
- Higher credit and debit card revenue (7.5 percent), corporate payment products revenue (3.9 percent) and merchant processing services revenue (5.6 percent)
- Managed expense levels
- Total noninterest expense increase of 2.0 percent year-over-year
- Efficiency ratio improved to 51.6 percent compared with 52.4 percent in the second quarter of 2010
- Net charge-offs and nonperforming assets declined on a linked quarter basis. Provision for credit losses was $175 million less than net charge-offs.
- Net charge-offs declined 7.2 percent from the first quarter of 2011
- Nonperforming assets (excluding covered assets) decreased 6.2 percent from the first quarter of 2011 (7.4 percent including covered assets)
- Early and late stage loan delinquencies as a percentage of ending loan balances declined in all loan categories on a linked quarter basis
- Allowance to nonperforming assets (excluding covered assets) was 159 percent at June 30, 2011, compared with 154 percent at March 31, 2011, and 146 percent at June 30, 2010
- Allowance to period-end loans (excluding covered loans) was 2.83 percent at June 30, 2011, compared with 2.97 percent at March 31, 2011, and 3.18 percent at June 30, 2010
- Strong capital generation continues to strengthen capital position; ratios at June 30, 2011 were:
- Tier 1 common equity ratio of 8.4 percent
- Tier 1 capital ratio of 11.0 percent
- Total risk based capital ratio of 13.9 percent
- Tier 1 common ratio of 8.1 percent under anticipated Basel III guidelines
