Rough seas for even the best of banks
Placing a value on US Bancorp depends a lot on the future of the banking sector.
- Provisions for credit losses dropped by $475 million.
- Net interest income (what the bank earns on the difference between what it pays for the funds it needs and what it charges on the loans it makes) grew by 5.9% year-to-year.
- Non-interest income (the fees for payments, service charges, commercial products, and trust management) edged up by 2.9%.
- Average loan growth rose by 4.5% (excluding acquisitions) year-to-year. This may not sound like much of a growth rate, but it's the highest growth rate for loans I’ve seen from a bank this earnings season.
- Average total deposits grew 13.2% (again, excluding acquisitions) year-to-year.
- What’s called average low-cost deposits grew by 23%. These are deposits in accounts such as non-interest bearing checking accounts that don’t pay much interest. They’re a key bank strength these days, when many banks are forced to raise capital rather than borrow funds in the short-term markets.
- Charge-offs on bad debt was lower than expected, at $669 million (instead of $750 million) and down 10.4% from the second quarter. Nonperforming assets were just 1.6% of loans.
- Tier 1 core capital was 10.8% at the end of the quarter.
MSN Money is headed for the World MoneyShow in Chicago, Oct. 20-22, and we have a couple of invitations for you:
· First, attend the show at the Hilton Chicago Hotel for free and hear MSN Money columnist Jim Jubak and dozens of other financial pros as they share investment strategies and trading tips designed to help you build a plan for profit in 2012 and beyond. Admission is free for MSN Money readers; just click here to register or phone 800-970-4355 and mention Priority Code 024252.
· Second, if you’re attending the show or will be in the Chicago area on Oct. 20, we’re looking for investors who use financial Web sites to take a close look at what we offer and to help plan our future. We’ll work in small groups to review changes we’ve made recently, what’s coming and what we can add to help you make your financial decisions. Participants will be paid a nominal sum. If you’re interested, email firstname.lastname@example.org for a questionnaire.
MORE ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
Is it possible to have yield and growth? With these picks, we say yes.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.