U.S. Bancorp, the nation’s largest regional lender, reported third-quarter profit that matched analysts’ estimates as expenses rose.
Net income climbed 1.2 percent to $1.49 billion, or $81 cents a share, from $1.47 billion, or 78 cents, a year earlier, the Minneapolis-based bank said Thursday in a statement. Revenue rose 3.1 percent to $5.15 billion, while expenses increased 6.2 percent to $2.78 billion.
Chief Executive Officer Richard Davis said last month that third-quarter expenses would be “elevated" because of compliance and personnel costs and would decline in the final period as he institutes a hiring freeze. U.S. Bancorp joins lenders including JPMorgan Chase & Co. and Bank of America Corp. as being under pressure to cut expenses as continued record-low U.S. interest rates hurt profit.
“I don’t have to care anymore whether interest rates move," Davis said on a Sept. 17 conference call. “We can control our own destiny by watching expenses across the board, as we will, and make sure that revenue is bigger and higher than that almost no matter what the scenario."
U.S. Bancorp shares have fallen 9.9 percent this year, compared with the 6.7 percent decline of the 24-company KBW Bank Index.
The lender said last month that it would take a charge of as much as $60 million in the third quarter after canceling the sale of $3 billion in student loans because the bids were too low. U.S. Bancorp said three years ago it was getting out of originating student loans as the business faced increased regulatory scrutiny as well as what Davis described as “moral hazard.”
PNC Financial Services Group Inc., the second-largest U.S. regional bank, reported third-quarter profit Wednesday that beat analysts’ estimates as the lender cut costs to counter a decline in revenue. Wells Fargo & Co. posted a third-quarter profit Wednesday that beat analysts’ estimates on gains in interest income from asset purchases and new loans, while Bank of America Corp. swung to a profit of $4.51 billion as litigation expenses tumbled and loan growth pushed revenue above analysts’ estimates.