Regional banks U.S. Bancorp Inc. (USB: Quote), M&T Bank Corp. (MTB: Quote) and Northern Trust Corp. (NTRS: Quote) on Wednesday reported higher profit for the fourth quarter, reflecting increase in revenues and lower provision for credit losses. U.S. Bancorp and M&T Bank also recorded higher mortgage banking revenue in the quarter.
U.S. Bancorp reported a 3 percent increase in fourth-quarter profit, while M&T Bank's profit more than doubled from last year. Northern Trust's profit increased 29 percent, reflecting higher trust, investment and other servicing fees that was partially offset by lower foreign exchange trading income.
Minneapolis, Minnesota-based U.S. Bancorp's fourth-quarter net income grew to $1.35 billion or $0.72 per share from $1.31 billion or $0.69 per share in the prior-year period.
The latest quarter's results include a previously disclosed expense accrual of $80 million for a mortgage foreclosure-related regulatory settlement that reduced earnings per share by $0.03.
On average, 22 analysts polled by Thomson Reuters expected the company to earn $0.75 per share for the quarter. Analysts' estimates typically exclude special items.
Total net revenue on a taxable-equivalent basis edged up to $5.11 billion from $5.10 billion in the year-ago period, but missed analysts' consensus estimate of $5.16 billion.
U.S. Bancorp's net interest income on a taxable-equivalent basis increased 4 percent to $2.78 billion, reflecting higher average earning assets growth in lower cost core-deposit funding and the positive impact from long-term debt repricing.
Meanwhile, non-interest income declined 3 percent to $2.33 billion, primarily due a $263 million merchant settlement gain in the year-ago period that was partly offset by higher mortgage banking revenue in the latest quarter.
Mortgage banking revenue surged 57 percent from last year to $476 million.The company's provision for credit losses declined 11 percent from last year to $443 million.
For fiscal year 2012, U.S. Bancorp's net income rose to $5.38 billion or $2.84 per share from $4.72 billion or $2.46 per share last year. Total net revenue for the year grew 6 percent to $20.29 billion from $19.11 billion in the prior year.
Analysts expected the company to earn $2.86 per share for the year on revenues of $20.29 billion.
Meanwhile, M&T Bank's fourth-quarter net income rose to $276.61 million or $2.16 per share from $129.80 million or $1.04 per share in the prior-year period.
Excluding items, net operating earnings per share were $2.23, compared to $1.20 in the prior-year quarter. On average, 23 analysts expected the company to earn $2.18 per share.
Net interest income increased 8 percent from last year to $667.42 million, while total other income rose 14 percent to $453.16 million as mortgage banking revenues almost tripled to $116.55 million. Analysts had a consensus revenue estimate of $1.12 billion.
Trust income grew 3 percent, brokerage services income increased 11 percent, and service charges on deposit accounts rose 8 percent.
Provision for credit losses declined 34 percent from the year-ago period to $49 million.
For fiscal year 2012, M&T Bank's net income grew to $953.43 million or $7.54 per share from $781.77 million or $6.35 per share in the previous year. Net operating earnings per share were $7.88, compared to $6.55 last year.
Net interest income for the year rose 9 percent to $2.60 billion, while total other income increased 5 percent to $1.67 billion.
Analysts expected the company to earn $7.57 per share for the year on revenues of $4.28 billion.
Meanwhile, Chicago-based custody bank Northern Trust's fourth-quarter net income was $167.7 million or $0.69 per share, up from $130.2 million or $0.53 per share in the year-ago period.
Consolidated revenue for the quarter edged up 1 percent to $969.7 million from $955.6 million in the prior-year quarter.
Analysts expected the company to earn $0.75 per share for the quarter on revenue of $985.10 million.
Non-interest income, which represented 76 percent of revenue, rose 8 percent from last year to $735.5 million. This was aided by a 15 percent increase in trust, investment and other servicing fees to $622.6 million, partly offset by a 43 percent decline in foreign exchange trading income to $40.8 million.
Net interest income on a fully taxable equivalent basis decreased 13 percent to $243.6 million, primarily due to lower average earning assets and a continued decline in the net interest margin.
Provision for credit losses declined 60 percent from last year to $5.0 million.
Total assets under custody rose 13 percent from last year to $4.805 trillion, while assets under management grew 14 percent to $758.9 billion.
For fiscal year 2012, Northern Trust's net income rose to $687.3 million or $2.81 per share from $603.6 million or $2.47 per share in the prior year. Total revenue grew 3 percent to $3.90 billion from $3.77 billion in the previous year.
Street expected the company to earn $2.88 per share for the year on revenues of $3.93 billion.
In Wednesday's regular session, USB is trading at $33.02 0.26 0.78 percent on a volume of 54,104 shares. MTB is trading at $104.16, up $0.71 or 0.69 percent on a volume of 4,634 shares.
NTRS is down $1.58 or 2.99 percent to $51.23 on a volume of 81,125 shares.
by RTT Staff Writer
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