U.S. Bancorp (NYSE:USB) is an interesting financial company that I have traded utilizing options in the past. It is a solid company whose stock is fairly cheap. The company itself provides a range of financial services solely in the United States. Its services include lending and depository, cash management, capital market, and trust and investment management services, as well as merchant and ATM processing, mortgage banking, and brokerage services.
The company’s lending services include traditional credit products, as well as credit card services, leasing, financing and import/export trade, asset-backed lending, agricultural finance, and other products. Its depository services comprise checking accounts, savings accounts, and time certificate contracts. The company also offers ancillary services, such as capital market, treasury management, and receivable lock-box collection services to corporate customers. It also offers a range of asset management and fiduciary services for individuals, estates, foundations, business corporations, and charitable organizations. In addition, it provides Visa corporate and purchasing card, and corporate trust services. Further, the company offers investment and insurance products to the company’s customers principally within its markets, as well as fund processing services to a range of mutual and other funds. It serves individuals, institutional organizations, governmental entities, estates, business corporations, foundations, charitable organizations, and other financial institutions. But can we buy the stock here? To answer this question, we have to examine the company’s recent performance and expectations for the future.
Well, the most recent quarter was very strong. The company reported record net income of $1.495 billion or $0.78 per diluted common share, compared with $1.484 billion, or $.76 per diluted common share, in the second quarter of 2013. The bank continues to grow. In the quarter U.S. Bancorp completed the acquisition of Chicago-area Charter One Bank franchise which includes $4.8 billion of deposits and $0.9 billion of loans. This nearly doubles U.S. Bancorp’s deposit market share in the Chicago area.
Further, the company’s loans are in great shape. It saw growth in average total loans of 6.8 percent over the second quarter of 2013 and growth of 2.0 percent versus the first quarter of 2014. Growth in average total commercial loans was 12.4 percent over the second quarter of 2013 and 5.9 percent over the first quarter of 2014. It also saw growth in average total commercial real estate loans of 6.9 percent over the second quarter of 2013 and 1.1 percent over the first quarter of 2014. These results are simply fantastic for a bank of this size.