New York, NY, United States (4E) – U.S. Bancorp reported a drop of 2.2 percent in first quarter profit as the regional lender recorded lower mortgage banking revenue.
Low interest rates and less demand for refinancing have resulted to weaker mortgage revenue for U.S. Bancorp and other regional banks. Revenue from the bank’s mortgage banking business dropped 41 percent in the latest quarter from $236mn a year ago.
The regional bank said profit was down to $1.4bn from $1.43bn. On a per-share basis, earnings were flat at 73 cents, as a result of fewer shares outstanding during the period. Revenue fell 1.2 percent to $4.81bn.
Analysts forecast per-share earnings of 73 cents on $4.8bn revenue.
Like other banks in the industry, U.S. Bancorp is helped by stronger credit quality. Provisions for credit loss dropped 24 percent from $306mn a year ago.
U.S. Bancorp, which has over 3,000 branches across the Midwest and West regions in the U.S., doubled its presence in the Chicago area by purchasing RBS Citizens Financial Group Inc.’s 94 branches in Chicago. The lender indicated it will continue with its acquisitions.