U.S. Bancorp said on Wednesday that its fourth-quarter profit more than doubled from a year ago, as mortgage banking revenue grew.
The bank also benefited from growth in traditional deposits, giving it a cheap source of money for loans.
It still wrote off more bad loans during the quarter, and expects those write-offs will increase in this quarter as well, because of economic conditions and weak home prices.
Net loan charge-offs were $1.11 billion, up 6.6 percent from the third quarter. It said the upward trends in charge-offs and bad loans "continue to moderate and credit costs overall remain very manageable."
In a hopeful sign, the bank said the percentage of loans in the early stages of delinquency (running 30 to 89 days late) fell compared to the third quarter.
Its shares rose 40 cents to $24.89 in premarket trading.
U.S. Bancorp said it earned $580 million, or 30 cents a share, for the last three months of 2009, up from $259 million, or 15 cents a share, a year ago.
The profit and its $4.38 billion in revenue were better than analysts expected.
U.S. Bancorp, based in Minneapolis, has been under pressure to raise its quarterly dividend from the current 5 cents per share. It's taking a wait-and-see approach, though.
CEO Richard Davis said that before the dividend is raised the bank needs a better sense of its future profits, and it needs to know what new regulations the government plans. President Barack Obama has proposed a 0.15 percent tax on bank liabilities to get back the government's bailout money. Like several other big banks, U.S. Bancorp repaid its bailout money in June.
"We are profitable, our businesses are performing well, credit costs are moderating and we expect to continue to generate significant capital," he said in a prepared statement. "There remains, however, a great deal of uncertainty in the banking industry due to potential legislative and regulatory changes, as well as the timing and scope of the economic recovery."
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