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U.S. BANCORP REPORTS STRONG THIRD QUARTER 1993 EARNINGS

 PORTLAND, Ore., Oct. 14 /PRNewswire/ -- The following was released today by U.S. Bancorp (NASDAQ: USBC):
 THIRD QUARTER 1993 HIGHLIGHTS:
 Net income up 58 percent from prior year to $65.8 million
 Loan growth continues for second consecutive quarter
 Net interest margin rises to 5.40 percent
 Provision for credit losses down 64 percent from prior year
 to $17.5 million
 Nonperforming asset reduction continues; down 9 percent from
 previous quarter
 Return on assets of 1.25 percent versus 0.84 percent from prior year
 Return on common equity of 15.74 percent versus 10.45 percent from
 prior year
 U.S. Bancorp reported net income totaling $65.8 million during the third quarter 1993, representing a 58 percent increase over the $41.6 million earned in the third quarter 1992. The third quarter 1993 net income equates to a return on average assets of 1.25 percent and a return on average common equity of 15.74 percent. Net income for the first nine months of 1993 totaled $190.9 million versus $142 million earned before accounting changes over the same period in 1992. Net income per common share for the quarter and nine months ended Sept. 30, 1993, totaled $0.63 and $1.83, respectively. These figures compared to $0.40 and $1.42 before accounting changes in the prior year periods.
 "We are pleased to report these strong results for the third quarter of 1993," stated Roger L. Breezley, chairman and chief executive officer. "We are experiencing diverse economic performance in the markets we serve, ranging from the strong growth areas of Nevada, Idaho and Oregon, to the slow or no growth regions in Washington and northern California. In this environment we have experienced moderate loan growth while simultaneously improving our credit quality. We have also developed a continually expanding noninterest revenue base. Due to the quiet economic environment, our focus as we plan for 1994 will be to slow our rate of expense growth to help ensure positive results in the future."
 Net interest income during the third quarter 1993 increased 3 percent over the previous quarter due to continued loan growth and an expanding net interest margin. Increased commercial and consumer demand in Oregon and Washington provided for over one percent growth in average loans from the second quarter 1993. The net interest margin rose to 5.40 percent for the quarter, up from 5.33 percent in the prior quarter and 5.14 percent in the third quarter 1992, with the increase primarily attributable to lower funding costs.
 Credit quality continues to improve as nonperforming assets dropped 9 percent from the previous quarter to $245.6 million, representing only 1.77 percent of total loans and foreclosed assets. Credit loss reserve coverage of nonperforming loans strengthened to 120 percent, while representing 1.91 percent of total loans and leases. Decreased net loan charge-offs made possible the lowest provision for credit losses in over three years, totaling $17.5 million. The lower charge-offs were evident in nearly all loan categories during the third quarter with improvement particularly apparent in the consumer and credit card portfolios.
 Noninterest revenue growth continued in the third quarter 1993, reaching $142.2 million. Included in the results was approximately $16 million in net gains in mortgage banking income principally associated with the sale of mortgage loan servicing rights. Record results were recorded in credit card revenue and exchange fees while credit reporting revenue remained quite strong. The third quarter total noninterest revenue represents a 16 percent increase over the previous quarter and a 42 percent increase over the third quarter 1992.
 Noninterest expense in the third quarter 1993 totaled $261.6 million. Included in the results was a $3 million non recurring write down of bank premises. The third quarter total noninterest expense represents an 11 percent increase over the previous quarter and a 24 percent increase over the third quarter 1992. For the first nine months of 1993, the efficiency ratio was 65.8 percent as compared to 65 percent in the same period of 1992.
 U.S. Bancorp is the largest bank holding company headquartered in the Northwest, with assets of $21 billion as of Sept. 30, 1993. U.S. Bancorp is one of the nations 35 largest bank holding companies, and has consistently ranked among the top tier of these companies in performance and capital strength. Banking subsidiaries include U.S. Bank of Oregon; U.S. Bank of Washington; U.S. Bank of California; U.S. Bank of Nevada; U.S. Bank of Idaho, U.S. Bank (Canada); and U.S. Bank, N.A. Other financial services businesses include U.S. Bancorp Mortgage Company; U.S. Bancorp Leasing and Financial; and U.S. Bancorp Securities and Trust Group.
 CONSOLIDATED BALANCE SHEET - U. S. BANCORP AND SUBSIDIARIES
 (in thousands)
 Sept. 30, Sept.30,
 1993 1992
 Assets
 Cash and due from banks $ 1,137,643 $ 1,267,144
 Interest-bearing deposits with banks 1,129 12,987
 Federal funds sold and security
 resell agreements 322,908 432,454
 Other short-term investments 21,077 16,831
 Investment securities 3,358,585 3,173,936
 Trading account securities 322,177 174,530
 Investments available for sale 5,043 -
 Loans held for sale 744,780 886,486
 Loans and lease financing, net of
 unearned income
 Commercial 6,604,617 6,472,902
 Real estate construction 717,077 908,736
 Real estate mortgage 2,605,970 2,688,888
 Consumer 3,153,117 2,972,031
 Foreign 62,781 51,731
 Lease financing 742,575 768,246
 Total loans and lease financing 13,886,137 13,862,534
 Allowance for credit losses (264,781) (252,710)
 Net loans and lease financing 13,621,356 13,609,824
 Premises, furniture and equipment 511,086 462,597
 Other real estate and equipment owned 23,004 46,803
 Customers' liability on acceptances 180,130 230,989
 Other assets 729,295 736,460
 Total $20,978,213 $21,051,041
 Liabilities
 Deposits:
 Noninterest bearing deposits $ 3,732,766 $ 3,260,281
 Interest bearing demand, money market
 and savings accounts 6,840,934 6,460,390
 Time deposits 4,882,121 5,495,399
 Total deposits 15,455,821 15,216,070
 Federal funds purchased and security
 repurchase agreements 1,515,323 1,825,697
 Commercial paper 243,728 236,294
 Other short-term borrowings 327,446 269,011
 Long-term debt 1,092,312 1,298,501
 Accrued income taxes 89,038 56,624
 Acceptances outstanding 180,130 230,989
 Other liabilities 317,766 332,582
 Total liabilities 19,221,564 19,465,768
 Shareholders' equity
 Preferred stock 150,000 150,000
 Common stock 497,068 493,921
 Capital surplus 384,596 376,532
 Retained earnings 724,985 564,820
 Total shareholders' equity 1,756,649 1,585,273
 Total $20,978,213 $21,051,041
 CONSOLIDATED STATEMENT OF INCOME - U. S. BANCORP AND SUBSIDIARIES
 (in thousands, except per share data)
 Three Months Ended Nine Months Ended
 Sept. 30, Sept. 30,
 1993 1992 1993 1992
 Interest income
 Loans and lease
 financing $294,605 $308,558 $872,197 $947,383
 Loans held for sale 13,182 11,254 38,286 33,009
 Investment securities
 U. S. Treasury
 obligations 14,550 8,440 39,154 21,606
 State and municipal
 bonds 4,850 5,885 15,517 16,811
 U. S. government agency
 and other securities 30,230 28,651 99,072 75,461
 Trading account securities 2,398 2,874 6,303 6,550
 Investments available for
 sale 50 - 50 -
 Money market investments 2,277 3,434 8,235 11,990
 Total interest income 362,142 369,096 1,078,814 1,112,810
 Interest expense
 Deposits 89,206 107,459 280,661 342,296
 Short-term borrowings 15,290 20,212 42,590 71,225
 Long-term debt 19,017 24,515 62,650 70,789
 Total interest expense 123,513 152,186 385,901 484,310
 Net interest income 238,629 216,910 692,913 628,500
 Provision for credit
 losses 17,501 48,458 63,985 113,421
 Net interest income after
 provision for credit
 losses 221,128 168,452 628,928 515,079
 Noninterest revenue
 Service charges on deposit
 accounts 33,662 30,551 100,368 86,490
 Trust and investment
 administration 11,569 11,018 35,985 33,407
 Bank card revenue 16,087 13,119 42,321 35,559
 Credit reporting revenue 9,403 9,526 26,257 25,878
 Equity investment income 4,827 670 19,816 7,576
 Exchange fees 7,735 5,933 20,332 16,660
 Mortgage banking income 32,966 14,182 60,475 51,360
 Securities transactions - 830 3 1,137
 Other operating revenue 25,932 14,061 77,735 64,032
 Total noninterest
 revenue $142,181 $ 99,890 $ 383,292 $ 322,099
 Noninterest expense
 Employee compensation and
 benefits 130,926 105,960 365,604 320,816
 Net occupancy expense 19,289 14,173 49,473 40,841
 Equipment rentals,
 depreciation and
 maintenance 22,919 18,716 65,834 53,027
 Regulatory agency fees 9,982 9,049 31,304 25,974
 Long-term debt redemption
 expense - - - 6,668
 Other real estate owned
 expenses 1,905 6,495 7,101 19,811
 Telecommunications 6,606 6,287 19,454 17,723
 Other operating expense 69,948 50,611 187,245 151,249
 Total noninterest expense 261,575 211,291 726,015 636,109
 Income before income
 taxes 101,734 57,051 286,205 201,069
 Provision for income taxes 35,898 15,411 95,318 59,072
 Income before cumulative
 effect of accounting
 changes 65,836 41,640 190,887 141,997
 Cumulative effect of
 accounting changes - - - (59,890)
 Net income $ 65,836 $ 41,640 $190,887 $ 82,107
 Amounts applicable to
 common stock
 Income before cumulative
 effect of accounting
 changes $ 62,789 $ 39,338 $181,746 $ 139,695
 Net income 62,789 39,338 181,746 79,805
 Average number of common
 shares outstanding 99,385 98,751 99,284 98,567
 Per common share
 Income before cumulative
 effect of accounting
 changes $.63 $.40 $1.83 $1.42
 Net income .63 .40 1.83 .82
 Cash dividends declared .22 .19 .63 .57
 U. S. BANCORP AND SUBSIDIARIES
 CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
 (in thousands)
 Nine Months Ended
 Sept. 30,
 1993 1992
 Shareholders' equity at beginning
 of period $1,631,308 $1,406,380
 Net income 190,887 82,107
 Stock options exercised 3,560 6,273
 Dividends reinvested and other transactions 2,601 2,687
 Preferred dividends declared (9,140) (745)
 Common dividends declared (62,567) (56,219)
 Insurance of preferred stock, net of expense - 144,790
 Shareholders' equity at end of period $1,756,649 $1,585,273
 (In thousands except per share data)
 Three Months Ended Nine Months Ended
 Sept. 30, Sept.30,
 1993 1992 1993 1992
 Return on average common
 equity (in percent)(A) 15.74 10.45 15.79 12.82
 Return on average total
 equity (A) 15.07 10.29 15.11 12.70
 Return on average assets (A) 1.25 .84 1.24 1.00
 Period end shares outstanding - - 99,414 98,778
 Book value per common share $16.16 $14.53
 Risk-based capital (1993
 estimate) (in percent)
 Tier 1 8.63 8.12
 Total capital 11.66 11.09
 Tax-equivalent net interest margin
 Average rate earned on
 interest earning assets
 (in percent) 8.08 8.61 8.17 8.98
 Cost of funds supporting
 earning assets 2.68 3.47 2.85 3.82
 Net interest margin (in percent) 5.40 5.14 5.32 5.16
 Tax-equivalent adjustment $ 9,767 $ 8,541 $26,505 $27,855
 Net interest income-fully
 taxable $248,396 $225,45 $719,418 $656,355
 (In millions)
 Average loans $13,721 $13,806 $13,545 $13,753
 Average earning assets 18,311 17,494 18,079 16,948
 Average assets 20,813 19,688 20,519 19,055
 Average deposits 15,341 13,920 15,188 13,484
 Average total shareholders'
 equity 1,733 1,550 1,689 1,434
 Average common equity 1,583 1,438 1,539 1,396
 Nonaccrual loans $221,053 $283,077
 Restructured loans 1,503 5,924
 Other real estate and
 equipment owned 23,004 46,803
 Total nonperforming assets $245,560 $335,804
 Accruing loans past due 90
 days or more $18,926 $19,682
 Three Months Ended Nine Months Ended
 Sept., 30 Sept. 30,
 1993 1992 1993 1992
 Allowance for credit losses,
 beginning of period $262,445 $244,395 $259,155 $230,101
 Acquisitions 81 7,523 81 7,523
 Provision for credit
 losses 17,501 48,458 63,985 113,421
 Charge-offs (23,036) (54,758) (80,438) (118,889)
 Recoveries 7,790 7,092 21,998 20,554
 Net charge-offs (15,246) (47,666) (58,440) (98,335)
 Allowance for credit losses,
 end of period $264,781 $252,710 $264,781 $252,710
 Ratios (in percent):
 Net charge-offs to
 average loans(B) .44 1.37 .58 .96
 Allowance for credit losses
 to end of period loans 1.91 1.83
 Allowance to nonperforming loans 1.19 .97
 Total nonperforming assets
 as a percent of outstanding
 loans and other real
 estate and equipment owned 1.77 2.41
 (A) Calculated before accounting changes.
 (B) Net loan charge-offs were annualized.
 -0- 10/14/93
 /CONTACT: Analysts & shareholders, Donald F. Bowler 503-275-5702, or Laura E. Klein, 503-275-5773, or Mark R. Patterson, 503-275-6524, or media contact, Mary B. Ruble, 503-275-6200, all of U.S. Bancorp/
 (USBC)


CO: U.S. Bancorp ST: Oregon, Washington, California, Nevada, Idaho IN: FIN SU: ERN

IC -- SE006 -- 1979 10/14/93 07:46 EDT
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Date:Oct 14, 1993
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