USB US Bancorp

By Orla McCaffrey 

U.S. Bancorp's fourth-quarter profit fell to its lowest level in two years, showing strain from three interest rate cuts last year.

The largest regional bank by assets reported net income of $1.49 billion on Wednesday, or 90 cents a share. That is down from $1.86 billion, or $1.10 per share, a year ago. Analysts polled by FactSet had expected $1.08 per share.

Revenue dropped 3% from the year-earlier period to $5.67 billion. It missed analysts' expectations of $5.8 billion.

The Minneapolis-based lender has remained competitive after three interest rate cuts in 2019 threatened lending profits. Its net interest income fell 3% from a year ago. Lower deposit-service charges and payments revenue pushed nonlending income down 2.5%.

The $495 billion asset bank's average loan growth was 3.9% from a year earlier, thanks to stronger residential and credit-card lending. Loan growth among regional banks is expected to slow alongside economic growth in 2020.

The earnings miss caps an end to a year that saw regional banks struggle to swallow the first interest rate cuts in more than a decade and the largest bank merger since the financial crisis.

Shares fell 0.2% in premarket trading.

(END) Dow Jones Newswires

January 15, 2020 08:15 ET (13:15 GMT)

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