U.S. Bancorp’s (USB) first-quarter earnings rose 26% as the company said its credit-loss provisions fell to the lowest level since the fourth quarter of 2008.
The results were “driven by solid year-over-year growth in total net revenue, moderating credit costs and ongoing operational efficiency,” said Chairman and Chief Executive Richard Davis.
The parent company of U.S. Bank has in many ways weathered the financial crisis better than its bigger banking peers. It hasn’t seen the sky-high loan losses other lenders have endured, and Davis has credited the company’s expanding balance sheet and recent investments in its branch networks for profit gains.
The bank reported a profit of $669 million, or 34 cents a share, up from $529 million, or 24 cents, a year earlier. The most-recent quarter included a net 8 cents of charges. Analysts polled by Thomson Reuters had most recently forecast earnings of 34 cents.
Net revenue jumped 11% to $4.32 billion.
Credit-loss provisions were $1.31 billion, down from $1.32 billion a year earlier and $1.39 billion in the prior quarter. Net charge-offs, or loans the bank doesn’t think are collectible, were $1.14 billion, compared with $788 million and $1.11 billion, respectively.
Its shares were up 28 cents to $27.89 on Tuesday. The shares have climbed 23 percent this year.
Regional banks have surged roughly 30% this year, as many investors, if not analysts, are seeing these stocks as underappreciated and under-priced.
According to Thomson Reuters, the 11 regional banks listed in the S&P 500 are expected to post an aggregate loss of $972 million vs. a loss of $7.56 billion in the same period a year earlier, even with expected earnings growth of 205% in the overall financial sector.
