U.S. Bancorp beats forecasts with 6 percent jump in profit

MINNEAPOLIS—U.S. Bancorp got off to a strong start in 2017, reporting Wednesday a 6.3 percent jump in first-quarter profit and steady loan growth. The Minneapolis banking company, the nation’s fifth largest, continued to outpace most of its peers in key performance measures. Andy Cecere, who succeeded Richard Davis as U.S. Bank’s chief executive at the company’s annual meeting on Tuesday, said he was “excited for the future.” “We strive to continually improve upon our best-inclass performance, and we are well positioned to do so against the backdrop of an evolving economic and regulatory environment,” Cecere said in a statement. The company earned $1.47 billion in the first three months of the year, up from $1.39 billion in the same period a year earlier. The profit amounted to 82 cents a share, 2 cents above the consensus forecast of analysts surveyed by Zack’s Investment Research. Revenue rose 5.7 percent to $5.32 billion. Noninterest revenue grew 8.4 percent to $2.32 billion, while interest revenue rose 3.7 percent to $3 billion. The company’s loan portfolio grew 4.1 percent, slower than the 6.2 percent growth rate seen in the last three months of 2016. Commercial loans, one of the biggest components of its loan base, rose 4.4 percent. Real estate lending grew at 1.8 percent. Residential mortgages rose 6.8 percent. The company’s net interest margin, the difference between interest income and the amount of interest paid to depositors, fell 3 basis points to 3.03 percent from a year earlier and was up 5 basis points from 2.98 percent in the fourth quarter. Its return on equity was 13.3 percent and its efficiency ratio, a measure of the company’s ability to turn assets into revenue, was 55.6 percent, the best among the country’s largest banking firms.