U.S. Bancorp reported Q3/16 net income of $1,502 million compared with $1,489 million in Q3/15 as net revenue of $5,388 million was up 4.7% or $242 million from $5,147 million a year earlier. Earnings per share of $0.84 were in line with analysts’ expectations.

The following highlights were excerpted from the news release:

• Average lease financing assets in Q3/16 of $5,302 million were up 1.6% or $84 million from $5,218 million in Q3/15.
• The provision for loan losses in Q3/16 was $325 million, up 15.2% or $43 million compared to $282 million in Q3/15. The bank noted net charge-offs increased $23 million in Q3/16 compared to Q3/15 due to higher commercial loan net charge-offs, partially offset by lower charge offs related to residential mortgages.
• The net interest margin of 2.98% in Q3/16 was down 6 basis-points from 3.04% in Q3/15. The bank noted margins were impacted by higher average cash balances.
• Nonperforming commercial loans, including lease financing assets, were $517 million at the end of Q3/16 up $348 million compared to $169 million at the end of Q3/15. The bank noted the increase was driven by commercial loans within the energy portfolio, partially offset by improvements in the company’s residential and commercial real estate portfolios.

U.S. Bancorp Chairman and CEO Richard K. Davis said, “U.S. Bancorp reported solid, industry-leading financial results in the third quarter. The banking industry continues to face steady headwinds, including persistently low interest rates, a flat yield curve and a slow economic recovery that caused some commercial customers to pause investments in their businesses during the quarter. Despite the operating environment, we announced record earnings per share and solid revenue growth, particularly with our fee-based businesses.”