US Bancorp (USB) posted record third quarter net income and net revenues on Wednesday as results matched analysts’ consensus expectations, bolstered by loan growth and higher interest rates.
The seventh largest US bank by asset size posted net income of $1.56 billion for the third quarter of 2017, or $0.88 per diluted common share, compared with $1.50 billion, or $0.84 per diluted common share, in the third quarter of 2016. Both metrics were in line with the forecast of analysts polled by Capital IQ.
Net revenue rose to $5.61 billion, up from $5.39 billion in the same quarter of 2016 driven by higher net interest income. Analysts polled by Capital IQ were looking for revenue of $5.6 billion.
Net interest income increased 8.3% to $3.19 billion on a taxable-equivalent basis mainly as a result of loan growth and the impact of rising interest rates.
Average total loans increased by $8.0 billion, 3% higher than the third quarter of 2016, according to the bank, which said that the increase was due to growth in total commercial loans, up 4.6%, residential mortgages, up 4.9%, retail leasing, up 34.5%, and other retail loans, up 4.6%. These increases were partially offset by a decrease in total commercial real estate loans of 4%.
“Our strong revenue base and financial discipline positions us for growth heading into the next year,” said Andy Cecere, chief executive officer of US Bancorp, said.