U.S. Bancorp's Margins Tighten
U.S. Bancorp said its net income slipped slightly compared with the second quarter of last year, with tighter net interest margins putting pressure on earnings.
The bank's net interest margin decreased to 3.44% in the second quarter of this year, down from 3.68% a year earlier and 3.51% in the first quarter.
The company's $146 billion balance sheet includes $22 billion of residential mortgages as well as nearly $16 billion of second mortgages and home-equity loans.
Mortgage banking revenue totaled $68 million in the second quarter, down from $75 million in the second quarter of last year.
However, mortgage banking income increased by $3 million from the first quarter, driven by higher gains on the sale of loans and higher mortgage servicing values.
U.S. Bancorp increased its allowance for loan losses slightly in the second quarter. The allowance stood at $2.26 billion, or 1.55% of all loans, at the end of the second quarter. (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.bondbuyer.com/ http://www.sourcemedia.com/