Mortgage loans and fees helped U.S. Bancorp in Minneapolis offset margin pressures in the third quarter.
Net income for the $487.7 billion-asset company rose 5% year over year to $1.9 billion. Earnings per share were $1.15, or four cents higher than the mean estimate of analysts surveyed by FactSet Research Systems.
The bank’s noninterest income increased 8% from the year-earlier quarter to $2.6 billion, led by a 56% increase in mortgage banking revenues to $272 million. Commercial products revenue rose 11% to $240 million, lifted by stronger capital markets activity. Credit and debit card revenue increased 6.4% to $366 million.
“Mortgage revenue was particularly robust this quarter, reflecting both market conditions and the benefits of the investments we have made in our retail platform over the past several years,” Chairman and CEO Andy Cecere said in a press release Wednesday.
Meanwhile, net interest income rose slightly to $3.3 billion, and the net interest margin narrowed by 13 basis points.
Total loans grew 4% to $292.4 billion. Residential mortgages rose 10.6% to $68.6 billion. Commercial and industrial loans grew 4.7% to $103.7 billion. Credit card loans increased 8.8% to $23.7 billion. Meanwhile, loans for commercial real estate shrank 1.4% to $39 billion.
Total deposits rose 6% to $350 billion and continued to migrate into higher-cost accounts. Noninterest bearing deposits shrank 3.4% to $74.6 billion, while total interest-bearing deposits rose 9% to $275.3 billion.
Expenses increased 3.3% to $3.1 billion. Compensation increased 4.3% to $1.6 billion and employee benefits rose 10% to $324 million. Spending on technology and communications rose 12% to $277 million, and costs for professional services increased 19% to $114 million.