NEW YORK (Standard&Poor's) July 21, 2010--Standard&Poor's Ratings Services said today that U.S. Bancorp's (USB; A+/Stable/A-1) strong second-quarter earnings, given the current operating environment, will not affect the ratings. The company posted adjusted pretax earnings of $941 million, up 14.2% from the previous quarter ($824 million). Net charge-offs (NCOs) and provisions declined sequentially by 1.9% and 13.1%, respectively, although credit costs remain high historically. Nonperforming loans and early delinquencies also declined, and we believe that NCOs have likely peaked. Reserve releases may be possible by year-end 2010. The net interest margin stabilized at 3.90% and should remain at current levels for the remainder of 2010. Loan growth remained weak, with average loans down 0.9% sequentially (excluding acquisitions).
