US Bancorp Disappoints: Fool by Numbers

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On July 17, US Bancorp (NYSE: USB) released second-quarter earnings for the period ended June 30.

• The flat yield curve and US Bancorp's commitment to credit quality squeezed net interest margins by 24 basis points year over year, and 17 basis points sequentially.
  
  
• Non-interest expenses increased 7.2% year over year, compared to flat revenue growth. The company spent money ramping up growth initiatives, resulting in some front-loaded expenses.
  
  
• Despite its mediocre results, the company continues to perform well, with returns on assets and equity of 2.1% and 23%, respectively.
  
  
• In Motley Fool CAPS, the bank currently sports a so-so three-star rating. CAPS players must feel pretty average about the space, since fellow banks such as Wells Fargo (NYSE: WFC) and Bank of America (NYSE: BAC) also rate three stars.

(Figures in millions, except per-share data)

Income Statement Highlights

	Q2 2007	Q2 2006	Change
Total Revenue	$3,505	$3,452	1.5%
Net Interest Income	$1,650	$1,697	(2.8%)
Net Profit	$1,156	$1,201	(3.7%)
EPS	$0.65	$0.66	(1.5%)

Get back to basics with the income statement.

Margin Checkup

	Q2 2007	Q2 2006	Change*
Net Interest Margin	3.4%	3.7%	(0.2%)
Efficiency Ratio**	44.1%	41.8%	2.3%
Nonperforming Assets / Assets	0.4%	0.4%	0%
Return on Average Assets	2.1%	2.3%	(0.2%)
Return on Average Equity	23%	24.3%	(1.3%)

*Expressed in percentage points.
** Tangible efficiency ratio.

Margins are the earnings engine.

Balance Sheet Highlights

Assets	Q2 2007	Q2 2006	Change
Cash & Investments	$46,048	$45,696	0.8%
Loans	$148,232	$141,932	4.4%

Liabilities	Q2 2007	Q2 2006	Change
Deposits	$119,702	$122,719	(2.5%)
Total Liabilities	$202,200	$192,990	4.8%

The balance sheet reflects the company's health.

Bank on further Foolishness:

• Money in the US Bancorp
• Warren Buffett's Priceless Investment Advice
• Fool on the Street: US Bancorp Holding Steady

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

US Bancorp and Bank of America are Motley Fool Income Investor recommendations. Dividend-loving investors can try the service risk-free for 30 days.

Fool contributor Emil Lee is an analyst and a disciple of value investing. He doesn't own shares in any of the companies mentioned above. Emil appreciates your comments, concerns, and complaints. The Motley Fool's disclosure policy won't nickel-and-dime you.