MINNEAPOLIS (AP) - U.S. Bancorp said Tuesday its first-quarter earnings fell 4 percent due to losses stemming from the mortgage crunch but declared its credit problems will continue to be manageable.
The Minneapolis-based bank said it earned $1.09 billion, or 62 cents per share, down from $1.13 billion, or 63 cents per share, during the same period last year. Revenues were $3.87 billion, up 14 percent from $3.39 billion in the first quarter of 2007.
Analysts polled by Thomson Financial had expected earnings of 61 cents per share on revenue of $3.66 billion.
In morning trading, U.S. Bancorp shares advanced 27 cents, or 0.8 percent, to $31.94.
U.S. Bancorp, the country's seventh-largest bank, has avoided many of the mortgage and credit-related problems of some of its peers.
Richard K. Davis, the chairman, president and chief executive, said in a statement that the results "reflected the disciplined approach we have taken toward managing credit and operating risk" and that "our core operating results were solid."
U.S. Bancorp increased its loan-loss provision to $485 million, a $260 million increase over the fourth quarter of 2007, to combat rising delinquencies and defaults in the residential real estate markets. Net charge-offs were $293 million in the first quarter, compared with $225 million in the fourth quarter and $177 million in the first quarter of 2007.
"Declining home prices in many of our markets, in addition to stress in the residential home building and mortgage-related industries, are expected to continue through the balance of the year," Davis said. "Given our company's overall credit risk profile, however, we anticipate that expected increases in net charge-offs and nonperforming assets in the near term will continue to be manageable."
Echoing an assurance he made when the company released its fourth-quarter earnings in January, Davis said, "Our capital position is strong and the company remains well-capitalized."
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