US Bancorp’s (NYSE:USB) shares were lower in early trading although the country’s biggest regional bank saw new tax laws help boost its fourth-quarter earnings, with the stock unsettled by the firm setting aside monies for “regulatory and legal matters”.
The Minneapolis-based bank said its quarterly profit rose by 13% to US$1.69bn, up from US$1.49bn a year earlier, with earnings per share (EPS) at 97 US cents.
On an adjusted basis, stripping out a tax-related gain, the group’s EPS would have been 88 US cents, just beating the consensus forecast for 87 US cents.
The firm’s revenue rose by 4% to US$5.64bn helped by rising interest rates and increased lending, with its average loans growing by 2.6% over the year, driven by consumer lending.
The bank also disclosed it had set aside US$608mln for regulatory and legal matters including a potential settlement related to its anti-money-laundering program.
In early New York trading, U.S. Bancorp shares were down over 2% at US$56.05.
The new tax law is expected to help banks over the long term but is having a disparate impact across bank earnings this quarter, with some receiving a short-term earnings boost, but others seeing quarterly earnings wiped out by the changes.