US Bancorp (NYSE:USB) stock rose 4.15% (As on Apr 15, 6:35:30 AM UTC-4, Source: Google Finance) after the company posted better than expected result for the first quarter of FY 22. Net income attributable to U.S. Bancorp was $1,557 million for the first quarter of 2022, which was $723 million lower than the $2,280 million for the first quarter of 2021, and $116 million lower than the $1,673 million for the fourth quarter of 2021. The decrease in net income year-over-year was primarily due to a higher provision for credit losses. Pretax income before the provision for credit losses was essentially flat compared to a year ago. Net interest income increased 3.6 percent on a year-over-year taxable-equivalent basis due to higher loan and investment securities balances and favorable deposit and funding mix due in part to higher noninterest-bearing deposits, partially offset by lower loan yields and mix as well as lower loan fees driven by the impact of loan forgiveness related to the SBA Paycheck Protection Program (“PPP”) in the first quarter of 2021. The net interest margin declined from 2.50 percent in the first quarter of 2021 to 2.44 percent in the current quarter primarily due to changes in loan mix and lower loan spreads within fixed-rate portfolios from a year ago, partially offset by funding and yield curve favorability.

USB in the first quarter of FY 22 has reported the adjusted earnings per share of 99 cents, beating the analysts’ estimates for the adjusted earnings per share of 95 cents. The company had reported the adjusted revenue of $5.6 billion in the first quarter of FY 22, beating the analysts’ estimates for revenue of $5.58 billion.

Moreover, the average total loans for the first quarter of 2022 were $19.0 billion (6.5 percent) higher than the first quarter of 2021. The increase was primarily due to growth in commercial loans (11.4 percent), residential mortgages (3.0 percent) and other retail loans (20.5 percent), partially offset by lower home equity and second mortgages (13.8 percent). The strong growth in other retail loans was driven by auto and recreational vehicle lending during 2021. The increase in commercial loans was due to higher utilization driven by working capital needs of corporate customers, slower pay-offs given higher volatility in the capital markets and core growth, partly offset by expected reductions related to the forgiveness of loans in the SBA Paycheck Protection Program. The increase in residential mortgages was driven by stronger on-balance sheet loan activities and slower refinance activity. In addition, credit card loans increased 7.9 percent on a year-over-year basis, adjusting for the impact of a card portfolio transferred to loans held-for-sale during the fourth quarter of 2021.