U.S. Bancorp on Wednesday reported a 72 percent drop in earnings in the final three months of last year — its eighth straight quarterly profit decline — as credit costs and securities losses climbed.
For the fourth quarter of 2008, the Minneapolis-based bank reported net income applicable to common shareholders of $260 million, or 15 cents per share, down from $927 million, or 53 cents per share, a year earlier.
Analysts polled by Thomson Reuters, on average, were expecting earnings of 22 cents per share.
Results suffered as the company set aside $1.27 billion during the quarter to cover bad loans. This is up from just $225 million in the fourth quarter of 2007, and $748 million in the third quarter of last year.
Total revenue inched up 1 percent to $3.62 billion, driven by strong growth in net interest income. But this was offset by lower fee-based revenue and securities losses.
Net interest income, or the difference between how much it costs a bank to borrow money and how much it receives from lending money to customers, rose 23 percent to $2.16 billion from $1.76 billion in the prior-year quarter.
Noninterest income, or income earned from fees and other charges, fell 19 percent to $1.46 billion.
For the full year, the bank earned $2.82 billion, or $1.61 per share, down 34 percent from $4.26 billion, or $2.43 per share, in 2007.
