...Standard & Poor's Ratings Services believes that U.S. Bancorp (USB) will continue to outperform its peer group of large regional and large complex banks because of its relatively low-risk business mix and growth strategy. However, the weakness of the economic rebound and continued elevated credit costs could weigh on the bank's earnings prospects. The bank's capital and market-confidence strengths in relation to peers' should give USB an advantage in competing for depositors and clients. In addition, the bank took advantage of propitious terms from the Federal Deposit Insurance Corp. (FDIC) to expand its market share by purchasing failing financial institutions while taking on minimal risk. Although USB's results have deteriorated in the current challenging economic environment (adjusted pretax profit margin of 21.2% for second-quarter 2010), they have remained better than peers'. This is largely because of its strong base of core deposits, a broad array of fee-based revenue sources, and...
