IBOS member U.S. Bank has announced their financial earnings of Q3 2016, ended 30 September 2016, in a report released on 19 October 2016.
U.S. Bancorp, also known as U.S. Bank, has reported a net income of $1,502 million for the third quarter of 2016, or $0.84 per diluted common shared, compared with $1,489 million, or $0.81 per diluted common shore, in the third quarter of 2015.
The increase in net income was primarily due to total net revenue growth, including an increase in net interest income of 4.3% on a taxable-equivalent basis, mainly a result of loan growth and non-interest income growth of 5.1%, driven by higher mortgage banking revenue, trust and investment management fees, and credit and debit card revenue. The increase was partially offset by higher non-interest expenses, along with continued brand marketing and a special FDIC surcharge that began in the third quarter of 2016.
The net interest margin in the third quarter of 2016 was 2.98%, compared with 3.04% in the third quarter of 2015, and 3.02% in the second quarter of 2016. The decrease in net interest margin primarily reflected higher average cash balances as well as lower average rates on new securities purchases and lower reinvestment rates on maturing securities, partially offset by the benefit of higher Libor rates for loans throughout the quarter.
“U.S. Bancorp reported solid, industry-leading financial results in the third quarter. The banking industry continues to face steady headwinds, including persistently low interest rates, a flat yield curve, and a slow economic recovery that caused some commercial customers to pause investments in their businesses during the quarter. Despite the operating environment, we announced record earnings per share and solid revenue growth, particularly with our fee-based businesses,” said Richard K. Davis, U.S. Bancorp, CEO and Chairman. “In this challenging operating environment, we remain focused on doing the right thing for our customers, our communities and our shareholders, and investing in our businesses in order to create value over the long term.”
Below are the highlights of our third quarter 2016 results, compared to Q3 2015:
- Industry-leading return on average assets of 1.36%, return on average common equity of 13.5%and efficiency ratio of 54.5%
- Returned 79% of third quarter earnings to shareholders through dividends and share buybacks
- Average total loans grew 1.1% on a linked quarter basis and 7.6% over the third quarter of 2015 (6.4% year-over-year, excluding the credit card portfolio acquisition at the end of the fourth quarter of 2015 and student loans, which were transferred from held for sale to held for investment in the third quarter of 2015)
- Average total deposits grew 3.6% on a linked quarter basis and 10.0% over the third quarter of 2015
- Net interest income (taxable-equivalent basis) grew 1.6% on a linked quarter basis and 4.3% year-over-year
- Average earning assets grew 2.2% on a linked quarter basis and 6.6% year-over-year
- Net interest margin of 2.98% for the third quarter of 2016, impacted by higher average cash balances, was down 4 basis points from 3.02% in the second quarter of 2016, and down 6 basis points from 3.04% in the third quarter of 2015
- Mortgage banking revenue increased 31.9% linked quarter and 40.2% year-over-year driven by strong refinancing activities due to lower longer-term interest rates during the third quarter of 2016
- Credit quality was relatively stable
- Nonperforming assets and net charge-offs decreased slightly on a linked quarter basis
- Strong capital position. At September 30, 2016, the estimated common equity tier 1 capital to risk-weighted assets ratio was 9.3% using the Basel III fully implemented standardized approach and was 12.1% using the Basel III fully implemented advanced approaches method
Access the full report, via U.S. Bank’s website, here.