U.S. Bancorp (USB) said its fourth-quarter earnings rose 2.5% as the lender benefited from lower tax costs and credit-loss provisions, offsetting a substantial drop in mortgage-banking revenue.
U.S. Bancorp reported a profit of $1.46 billion, or 76 cents a share, up from $1.42 billion, or 72 cents a share, a year earlier. Revenue sank 4.4% to $4.89 billion.
Analysts polled by Thomson Reuters had predicted earnings of 75 cents a share on revenue of $4.89 billion.
The major regional bank, with more than 3,000 branches across the Midwest and West, continues to struggle with a decline in refinancing activity that has battered the banking industry. The Minneapolis company in November warned of a sharp drop in mortgage-revenue in the fourth quarter from the third quarter due to both lower mortgage-servicing and loan-production revenue. For the latest period, mortgage-banking revenue slumped 51% from a year earlier and 30% from the third quarter to $231 million.
Credit-loss provisions totaled $277 million in the latest quarter, down from $443 million a year earlier and $298 million in the prior quarter. Noninterest expense was nearly flat from a year ago at $2.68 billion. Applicable income taxes dropped 27% from a year earlier.