U.S. Bancorp Keeps Credit Costs in Check
U.S. Bancorp saw net income slide 18% in the second quarter from the year-earlier period, but analysts and investors praised the firm for navigating through a difficult credit environment. The company earned $950 million in the second quarter, down from $1.16 billion a year earlier.
Credit costs continued to climb. Net charge-offs of $296 million for the quarter were 0.98% of average loans, while total nonperforming assets at the end of the quarter totaled a little over $1.1 billion, a 34% increase from the balance at the end of the first quarter for the bank. The company reported net charge-offs of $396 million. U.S. Bancorp added $200 million to its credit reserves, bringing the total loss allowance to 1.6% at June 30. The company said the increase in its credit loss provision was necessitated by "the continuing stress in residential real estate markets." (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/