U.S. Bancorp (USB) beat the Street on Wednesday by growing its fourth-quarter profits by 39% as the regional bank capitalized on improvements in the credit markets and rising revenues.

The Minneapolis-based lender said it earned $1.35 billion, or 69 cents a share, last quarter, compared with a profit of $974 million, or 49 cents a share. Analysts had been calling for EPS of 63 cents.

Revenue increased 8.1% to $5.1 billion, hurdling above the Street’s view of $4.76 billion.

“Earnings for the quarter and 2011 were driven by record revenue, reduced credit costs and our on-going dedication to operating efficiency,” CEO Richard Davis said in a statement.

In a demonstration of the better credit picture, U.S. Bancorp said its provisions for credit losses decreased to $497 million from $912 million the year before and $519 million in the third quarter.

At the same time, net charge-offs fell 7% from the third quarter and nonperforming assets, excluding covered assets, dropped 15.2% quarter-over-quarter.

“Credit quality continued to improve this quarter, with both net charge-offs and nonperforming assets lower than the prior quarter. We expect that nonperforming assets will decline in the coming quarter as the economy slowly improves,” Davis said.

U.S. Bancorp also said it is lending more: average total loans increased 2.4%, including average total commercial loans rose 5.6%. New lending activity climbed 17.6% to $70 billion.

Separately, Wall Street giant Goldman Sachs (GS) reported on Wednesday a 58% decrease in fourth-quarter profits, but exceeded analyst expectations.

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