U.S. Bancorp in Minneapolis reported higher quarterly profit boosted by increased fee revenue from credit and debit cards.
The $438 billion-asset company reported that its second-quarter earnings rose 3% from a year earlier to $1.5 billion. Earnings per share of 83 cents were 2 cents higher than the average estimate of analysts polled by Bloomberg.
Fee income rose 12% to $2.6 billion. The increase was driven, in part, by higher card transaction volumes. Equity gains from U.S. Bancorp's investment in Visa Europe, which was sold to Visa in June, also contributed.
Net interest income rose 5% to $2.9 billion. Total loans grew 8% to $268 billion on higher commercial and construction lending. The net interest margin compressed by 1 basis point to 3.02%.
Energy troubles continued to weigh on the company's loan book, as the loan-loss provision increased by 16% to $327 million.
Revenue gains helped to offset sharply higher costs. Noninterest expenses climbed 12% to $3 billion on a combination of compensation and marketing costs.
The efficiency ratio edged up to 54.9%, compared to 53.2% a year earlier.