Regional banks U.S. Bancorp, Inc. (USB), and Northern Trust Corp. (NTRS) reported Tuesday a higher profit for the first quarter. Earnings per share at U.S. Bancorp matched analysts' expectations, while it missed their estimates at Northern Trust.
U.S. Bancorp's results reflected declines in noninterest expense and provision for credit losses, while achieving positive operating leverage and an improved efficiency ratio. Meanwhile, Northern Trust's results reflected higher trust, investment and other servicing fees.
"Our first quarter earnings of $1.4 billion, or $.73 per diluted common share, reflected our Company's continuing ability to perform against the backdrop of a slow-growth, uncertain economic environment," U.S. Bancorp Chairman, President and CEO Richard Davis said in a statement.
Minneapolis, Minnesota-based U.S. Bancorp's reported net income applicable to common shareholders of $1.36 billion or $0.73 per share for the first quarter, higher than $1.29 billion or $0.67 per share in the prior-year quarter.
On average, 32 analysts polled by Thomson Reuters expected the company to report earnings of $0.73 per share for the quarter. Analysts' estimates typically exclude special items.
Total net revenue on a taxable-equivalent basis for the quarter declined 1.1 percent to $4.87 billion from $4.93 billion in the same quarter last year, and missed twenty-one Wall Street analysts' consensus estimate of $5.03 billion.
The revenue decline reflected a 3.3 percent decrease in noninterest income to $2.17 billion, partially offset by a 0.7 percent increase in net interest income to $2.71 billion from the year-ago quarter.
Noninterest expense for the quarter declined 3,5 percent to $2.47 billion, and provision for credit losses dropped 16.2 percent to $403 million from the prior-year quarter.
Net interest margin was 3.48 percent for the first quarter, compared to 3.60 percent in the same quarter last year.
Meanwhile, Chicago-based custodian bank Northern Trust reported net income of $161.5 million or $0.67 per share for the first quarter, higher than $160.0 million or $0.66 per share in the year-ago quarter.
Consolidated revenues for the quarter edged up 1 percent to $976.4 million from $965.4 million in the same quarter last year.
Street was looking for first-quarter earnings of $0.72 per share on revenues of $999.81 million.
"Our financial performance in the first quarter benefited from strong new business from both personal and institutional clients, as well as higher equity markets. Trust, investment and other servicing fees, which represent 65% of our revenue, grew 10% compared to last year and assets under custody and under management grew 9% and 13%, respectively, compared to last year," Chairman and CEO Frederick Waddell noted.
Non-interest income, which represented 77 percent of revenue, grew 6 percent from last year to $750.3 million, primarily reflecting a 10 percent growth in trust, investment and other servicing fees.
Net interest income on a fully taxable equivalent basis decreased 12 percent to $226.1 million from last year, primarily due to a continued decline in the net interest margin and lower average earning assets.
Net interest margin on a fully taxable equivalent basis declined to 1.15 percent from last year's 1.24 percent. Meanwhile, provision for credit losses remained flat with last year at $5.0 million.
Total assets under custody increased 9 percent to $5.024 trillion, and assets under management increased 13 percent to $810.2 billion from last year.
USB closed Monday's regular session at $33.31, down $0.67 on a volume of 15.10 million shares, and NTRS closed at $53.81, down $1.69 on a volume of 1.50 million shares.
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