U.S. Bancorp, Northern Trust, Fifth Third Bancorp Q4 Results Top Estimates

(RTTNews) - Regional banks U.S. Bancorp, Inc. (USB) and Northern Trust Corp. (NTRS) reported Wednesday a profit for the fourth quarter that increased from last year, while profit declined at Fifth Third Bancorp (FITB). The results at all the three banks topped analysts' expectations.

"Our fourth quarter results were also solid with net income of $1.49 billion, or $.79 per diluted common share," U.S. Bancorp Chairman, President and CEO Richard Davis said.

Minneapolis, Minnesota-based U.S. Bancorp's reported net income applicable to common shareholders of $1.42 billion or $0.79 per share for the fourth quarter, higher than $1.39 billion or $0.76 per share in the prior-year quarter.

On average, 27 analysts polled by Thomson Reuters expected the company to report earnings of $0.77 per share for the quarter. Analysts' estimates typically exclude special items.

Total net revenue for the quarter on a taxable-equivalent basis increased 5.7 percent to $5.17 billion from $4.89 billion in the same quarter last year, and topped twenty-one Wall Street analysts' consensus estimate of $5.01 billion.

The revenue growth reflects a 9.9 percent increase in non-interest income to $2.37 billion, and a 2.4 percent rise in net interest income to $2.80 billion from the year-ago quarter.

Non-interest expense for the quarter grew 4.5 percent to $2.80 billion, and provision for credit losses rose 4 percent to $288 million from the prior-year quarter. The provision for credit losses was lower than net charge-offs by $20 million in the fourth quarter of 2014.

Net interest margin was 3.14 percent for the fourth quarter, compared to 3.40 percent in the same quarter last year.

"As we head into 2015, we remain committed to investing in a strategy centered on helping our retail, wholesale and institutional customers establish financially secure futures. We are well positioned for growth as the economic environment shows signs of improvement and our customers look for a strong and stable banking partner to help them achieve their distinct financial goals and objectives," Davis added.

Meanwhile, Chicago-based custodian bank Northern Trust reported net income of $230.7 million or $0.98 per share for the fourth quarter, higher than $167 million or $0.70 per share in the year-ago quarter. Excluding items, adjusted earnings for the quarter was $0.94 per share, compared to $0.75 per share in the prior-year quarter.

Consolidated revenues for the quarter grew 8 percent to $1.13 billion from $1.05 billion in the same quarter last year.

Street was looking for fourth-quarter earnings of $0.81 per share on revenues of $1.10 billion.

"Fourth quarter and full year results reflect a continued focus on serving the complex and evolving needs of our clients, while enhancing profitability and returns for our shareholders," Chairman and CEO Frederick Waddell noted.

Non-interest income increased 9 percent to $866.2 million, primarily reflecting higher trust, investment and other servicing fees, foreign exchange trading income and security commissions and trading income.

Net interest income on a fully taxable equivalent or FTE basis grew 5 percent to $270.9 million, due to higher levels of earning assets, partially offset by a decrease in the net interest margin.

Net interest margin on a fully taxable equivalent basis declined to 1.08 percent from last year's 1.12 percent. Provision for credit losses decreased to $3 million from last year's $5 million.

Total assets under custody increased 7 percent to $5.97 trillion, and assets under management increased 6 percent to $934.1 billion from last year.

Further, Fifth Third Bancorp reported fourth-quarter net income available to common shareholders of $362 million, down 6 percent from $383 million in the prior-year quarter, while earnings per share remained flat with last year at $0.43.

On average, 27 analysts polled by Thomson Reuters expected the company to report profit per share of $0.42 for the quarter.

Net interest income on a FTE basis declined 2 percent to $888 million, while total non-interest income decreased 7 percent to $653 million from the year-ago quarter. Nineteen Wall Street analysts were looking for revenue of $1.51 billion for the quarter.

Net interest margin on a FTE basis decreased to 2.96 percent from last year's 3.21 percent. Provision for credit losses nearly doubled to $99 million from last year's $53 million.

Total non-interest expense for the quarter declined 7 percent to $918 million from $989 million in the year-ago quarter.

USB closed Tuesday's regular session at $41.21, down $0.45 on a volume of 12.68 million shares, NTRS closed at $62.44, down $0.01 on a volume of 1.42 million shares, FITB closed at $18.08, down $0.46 on a volume of 10.92 million shares.