U.S. Bancorp (NYSE: USB) has reported the adjusted earnings per share growth of 82 cents in the fourth quarter 2016 ended 31st December, beating the analysts’ estimates for the adjusted earnings per share of 81 cents. The company had reported the adjusted revenue growth of $5.44 billion in the fourth quarter 2016, beating the analysts’ estimates for revenue of $5.35 billion. USB stock is trading at sideways today and slightly improved 0.1% on January 18th, 2017 (as of 11:06 AM EST; Source: Google finance).
Moreover, U.S. Bancorp has reported a 4.6 percent growth in the Net interest income (taxable-equivalent basis) in the fourth quarter of 2016, rising 2.1 percent yoy on a sequential basis. The Net interest margin was down 8 basis points to 2.98 percent from the corresponding quarter of 2015, primarily due to changes in the loan and investment portfolio mix and higher average cash balances.
Additionally, the average total loans grew 6.2 percent and the average total deposits grew 11.8 percent in the fourth quarter as compared to the corresponding quarter of 2015. The credit quality was stable in the Q4 2016 relative to the third quarter and year-over-year. Furthermore, U.S. Bancorp has a strong capital position. At December 31, 2016, the estimated common equity tier 1 capital to risk-weighted assets ratio was 9.1 percent by the use of the Basel III fully implemented standardized approach and was 11.7 percent by the use of the Basel III fully implemented advanced approaches method.
On the other hand, the nonperforming assets were $1,603 million at December 31st, 2016, as compared with $1,523 million in the corresponding quarter 2015 and $1,664 million at September 30th, 2016. Further, the decrease in nonperforming assets on a sequential quarter basis was due to the improvements in commercial loans, residential mortgages and another real estate. There is an $80 million increase in nonperforming assets on a year-over-year basis, which is driven by commercial loans within the energy portfolio, partially offset by improvements in the USB’s residential portfolio.
For the FY 16, U.S. Bancorp has reported the profit of $5.89 billion, diluted earnings per share of $3.24 and revenue of $21.3 billion. USB has returned 79 percent of 2016 earnings to shareholders through dividends and share buybacks. Meanwhile, USB has announced that the chairman and CEO Richard Davis will step down from his role as CEO at the bank’s annual meeting in April 2017, but will continue on as executive chairman of the board. The President and COO Andy Cecere of USB will succeed him on April 18th, 2017.
U.S. Bancorp stock has risen 29.71% in the last one year (as of January 17th, 2017; Source: Google Finance). According to tipranks.com, 7 analysts who covered the stock issued a consensus average price target of $56, which is a further upside of 11.51%.