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US Bancorp posts higher EPS, NIM YOY

Minneapolis-based U.S. Bancorp on Oct. 18 posted net income applicable to common shares of $1.49 billion, or 88 cents per share, up from net income of $1.43 billion, or 84 cents per share, in the third quarter of the prior year.

The S&P Capital IQ consensus mean estimate for third-quarter normalized EPS was 88 cents.

Net revenue was $5.61 billion, up from $5.49 billion in the prior quarter and $5.39 billion in the third quarter of 2016.

The bank's net interest margin for the quarter was 3.10%, up from 3.04% in the linked quarter and 2.98% a year ago. The increase in net margin was driven by higher interest rates and changes in the loan portfolio mix, partially offset by higher funding costs.

The efficiency ratio for the third quarter was 54.3%, an improvement from the prior quarter's 55.4% and the year-ago quarter's 54.5%.

Average investment securities were 3.4% higher year over year due to purchases of U.S. Treasury and U.S. government mortgage-backed securities, net of prepayments and maturities.

The bank recorded a provision for credit losses of $360 million, up from $350 million in the previous quarter and $325 million a year earlier.

Net charge-offs totaled $330 million, compared to net charge-offs of $340 million in the linked quarter and $315 million in the prior-year quarter.

Nonperforming assets at the end of the third quarter were $1.25 billion, as compared to $1.35 billion in the linked quarter and $1.66 billion a year ago.