By Dave Sebastian

 

U.S. Bancorp said its profit for the third quarter rose due to lower provision for credit losses driven by a reserve release as the global economy improved, as well as strong credit and collateral performance.

The Minneapolis-based bank company, the parent of U.S. Bank, on Thursday posted net income attributable to the company of $2.03 billion, compared with $1.58 billion in the same period last year. Earnings were $1.30 a share, compared with 99 cents a share in the prior year. Analysts polled by FactSet were expecting $1.15 a share.

Net interest income was $3.17 billion, down from $3.23 billion in the comparable period last year. Analysts were expecting $3.18 billion. The metric fell due to changes in loan portfolio composition and lower average loan balances primarily due to commercial loan paydowns by corporate customers accessing the capital markets and the Small Business Administration Paycheck Protection Program, the company said.

Net revenue was $5.89 billion, down from $5.96 billion in the prior year. Analysts were looking for $5.76 billion.

Provision for credit losses was a benefit of $163 million, compared with $635 million set aside for possible bad loans in the year-ago period. Net charge-offs were $147 million, down from $515 million in the third quarter of 2020.

In 2021, the company said additional government stimulus, widespread vaccine availability in the U.S. and lower levels of new virus cases have contributed to economic recovery. But economic uncertainty remains tied to rising inflationary concerns, additional virus variants and lack of clear path to government funding, the company said.

 

Write to Dave Sebastian at dave.sebastian@wsj.com

 

(END) Dow Jones Newswires

October 14, 2021 07:20 ET (11:20 GMT)

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