U.S. Bancorp's profits swelled in the second quarter as it released more of the money it put aside in the early days of the pandemic to cover potential losses as the economy soured.
The Minneapolis-based bank's net income, which beat analysts' expectations, grew to $1.98 billion, or $1.28 a share, up from $689 million, or 41 cents a share in the same period a year ago. Its shares rose 2% after the markets opened this morning.
The nation's largest banks, which reported their results earlier this week, also saw big jumps in the profits this quarter amid a brightening economy and as they have also released more of their reservefunds. In the case of U.S. Bancorp, it freed up about $350 million in such reserves in the second quarter.
However, U.S. Bancorp's overall revenue declined, as it also did at some other banks.
Its net interest income dropped 1.9% to $3.16 billion over the last year mostly due to lower interest rates and lower average loan balances.
Meanwhile, its noninterest income, which is derivedfrom its fee-based services, increased 0.2% to $2.26 billion, driven by improvements in paymentservices revenue and deposit service charges.
"Our second quarter results were indicative of steadily improving economic conditions and continued execution of our strategic growth plan across our business lines and markets," Andy Cecere, the company's CEO, said in a statement. "As of late June, total sales volumes for each of our three payments businesses exceeded 2019 levels for the first time since the beginning of the pandemic."
He added that, heading into the second half of 2021, the company is well positioned to benefit from improving economic conditions as well as other growth opportunities it sees.
