U.S. Bancorp said net income of $1,273 million for the third quarter of 2011 was up 40.2% compared to the $908 million for the same year-ago period. The bank said earnings were driven by year-over-year growth in total net revenue and a reduction in the provision for credit losses.

The bank said the provision for credit losses for the third quarter of 2011 was $150 million lower than net charge-offs, compared with a provision for credit losses that was $175 million lower than net charge-offs for the second quarter of 2011 and equal to net charge-offs for the third quarter of 2010.

The company’s provision for credit losses in the third quarter and first nine months were $519 million and $1.846 billion, respectively compared to $995 million and $3.44 billion for the same periods in 2010.

U.S. Bancorp chairman, president and chief executive officer Richard K. Davis said, “I am exceptionally proud of our third quarter results, as our company was able to achieve record earnings in what many would describe as a difficult and uncertain economic environment. The results were driven by record total net revenue and lower credit costs, as well as managed expense levels.”

Davis added, “As expected, credit quality continued to improve. Net charge-offs declined by over 10%, while nonperforming assets fell by nearly 7% in the third quarter versus the prior quarter. The improvement led to a reserve release of $150 million in the third quarter, slightly lower than the previous quarter, as the outlook for charge-offs in a number of the consumer loan categories is stabilizing. We expect both net charge-offs and nonperforming asset levels to improve in the fourth quarter.”

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