U.S. Bancorp (NYSE:USB) released the earnings results from its most recently completed quarter this morning, posting 73 cents per share in net income. That’s flat with last year’s first quarter and in line with what analysts had been expecting.
Breaking down US. Bancorp’s earnings results
The bank reported a 6% increase in average total loans year over year and a 1.3% growth sequentially. Total commercial loans grew 8.5%, while average total commercial real estate loans increased 7.6%. Average commercial and commercial real estate commitments increased 11.7%. U.S. Bancorp (NYSE:USB)’s new lending activity reached $41 billion during the quarter, including $26.9 billion in new and renewed commercial and commercial real estate commitments. The bank also issued $2.6 billion worth of new credit card accounts and reported $11.5 billion in mortgage and other retail loan originations.
The U.S. Federal Reserve is treading carefully with raising rates amid the widespread economic, macro and geopolitical uncertainties sweeping around the world. The Fed raised its target level as high as 20% in the early 1980s to deal with runaway inflation, but we're a far cry from that today — a time when inflation threatens Read More
U.S. Bancorp (NYSE:USB) also reported a 5.1% increase in average total deposits, including a 7.7% increase in average low cost deposits. The bank also reported a 1.56% return on average assets and a 14.6% return on average common equity, as well as a 52.9% efficiency ratio.
Net charge-offs fell 21.2% year over year, and provision for credit losses was $35 million lower than net charge-offs. The bank’s allowance to period-end loans was 1.9% at the end of March, and its annualized net charge-offs to total loans ratio was .59%. Nonperforming assets fell 1% sequentially and 11.6% year over year.
U.S. Bancorp updates capital numbers
U.S. Bancorp (NYSE:USB) reported a Common equity Tier 1 ratio of 9.7% under Basel III and a Tier 1 capital ratio of 11.4%. The bank’s total risk-based capital ratio was 13.5%. Its common equity Tier 1 capital to risk-weighted assets was 9% under the standardized approach.
The bank distributed 67% of its first quarter earnings to shareholders by repurchasing 12 million common shares and paying dividends. U.S. Bancorp (NYSE:USB) also received non-objection from the Federal Reserve for its capital plan, including a new share buyback authorization of $2.3 billion, which became effective at the beginning of this month.
The bank expects to recommend a dividend of 24.5 cents per common share for the second quarter, which would be a 6.5% increase from the current rate.