U.S. Bancorp ended a year of record financial results with its foot off the gas, announcing Wednesday a marginal jump in net profit and reduced pace of revenue growth in the fourth quarter.
The Minneapolis banking company, the nation's fifth largest, continued to outpace most of its peers in loan growth. And executives were upbeat about the 2017 economic outlook and prospect that regulatory expenses would ease.
"We think 2017 is an inflection year in the sense that the company and industry will start to see stronger economic growth and some movement up in interest rates and the positive things that come with that," said Chief Financial Officer Terry Dolan.
The company said it earned $1.48 billion during the last three months of 2016, flat with a year ago. A change was visible on a per-share basis as its profit was 82 cents a share, up from 80 cents a year ago.
Revenue rose 4.3 percent to $5.4 billion, led by a 4.6 percent jump in interest income.
The company announced the results a day after revealing that it would complete its leadership transition in April, with Richard Davis ending a decade as chief executive and handing the baton to Andy Cecere, a longtime executive who has been chief operating officer for the last two years.
In a statement accompanying the results, Davis praised U.S. Bank employees for producing a record $5.9 billion profit for 2016. "As importantly, the fundamental elements of our core business are solid and we are well positioned for growth as we enter 2017," he said.
Average total loans at U.S. Bank grew 1.1 percent in the last three months of the year from the third quarter. They were up 6.2 percent from the fourth quarter of 2015, among the fastest growth of the major banks to have announced so far.
The greatest activity was in the company's commercial loan business. The company's credit card and retail leasing also showed sizable gains, though from smaller bases.
U.S. Bank's net interest margin, the difference between interest income and the amount of interest paid to depositors, fell 8 basis points to 2.98 percent from a year earlier. Its return on equity was 13.4 percent.
The company's noninterest expenses rose nearly 7 percent chiefly because of higher compensation and spending on professional services and marketing. The company cited spending on compliance programs for a portion of that increase, but Dolan said those costs will level out this year.
For the full year, U.S. Bank earned $3.24 a share, up 2.5 percent from last year and a record for the firm. Full-year revenue grew 4.9 percent and interest income grew 4.8 percent.
U.S. Bancorp shares were little changed Wednesday, closing at $50.56, up 25 cents.
Evan Ramstad • 612-673-4241
