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Bank Mutual second quarter profit down 11.6 percent; U.S. Bank second quarter profit down 50 percent

Bank Mutual second quarter profit down 11.6 percent
The recession is cutting into the profits for Brown Deer-based Bank Mutual Corp., which reported second quarter net income of $3.8 million, or 8 cents per diluted share, down 11.6 percent compared to second quarter 2008 net income of $4.3 million, or 9 cents per diluted share.
However, the company’s profits are up for the first half of the year. For the first 6 months of 2009 Bank Mutual said it had net income of $11 million, or 23 cents per diluted share, up 15.5 percent compared to net income of $9.3 million, or 19 cents per diluted share, for the first half of 2008.
"Our second quarter results of operations benefited from strong mortgage loan originations and sales activity, as well as additional gains on sales of certain long-term, fixed-rate securities," said Michael Crowley, chairman, president and chief executive officer of Bank Mutual. "Recent increases in interest rates, however, may limit, future earnings from both of these sources. As we expected, though, our net interest income declined in the second quarter relative to both the previous quarter and the second quarter of last year. Our operating results continued to be impacted by high levels of liquidity, reduced loan demand, and lower yields on reinvested cash flows as we prepare Bank Mutual for what we believe will be higher rates in the future."

U.S. Bank second quarter profit down 50 percent
The recession has cut deeply into the profits of Minneapolis-based U.S. Bancorp, but the company remains profitable.
U.S. Bank, which has substantial operations in Wisconsin, reported second quarter net income of $471 million, or 12 cents diluted earnings per share, down 50 percent compared to 2008 second quarter net income of $950 million, or 53 cents per diluted share.
Although the nation’s banks have dramatically tightened lending standards during the recession and credit crunch, U.S. Bank reported average loan growth of 12.8 percent (5.3 percent excluding acquisitions) compared to the second quarter of 2008, driven by average retail loan growth of 11.1 percent, led by credit card balances, home equity lines and student loans.
The company said its new lending activity during the second quarter included:

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  • $8.9 billion of new commercial and commercial real estate commitments.
  • $16.6 billion of commercial and commercial real estate commitment renewals.
  • $2.5 billion of lines related to new credit card accounts.
  • $4.1 billion of other retail originations.

“I am proud of our earnings for the second quarter, but I am more proud of the company’s ability to produce these results while navigating through the regulatory and market hurdles necessary to emerge as one of the country’s strongest institutions," said U.S. Bancorp chairman, president and CEO Richard K. Davis. “The company achieved record net revenue of $4.2 billion in the second quarter, as we experienced growth in our balance sheet and fee-based businesses. During the second quarter, a number of events occurred that were of particular significance to our shareholders, customers, and, in fact, our company as a whole, and the sequence of these events culminated on June 17th with the redemption of the $6.6 billion of preferred stock issued to the U.S. Treasury under the Capital Purchase Program. Prior to obtaining permission to redeem the TARP funds, our company was required to complete a number of prescribed steps, including passing the Supervisory Capital Assessment Program, or “stress test,” issuing non-guaranteed debt and completing a common stock offering. On May 8th we announced that we had passed the stress test and within a week of that announcement successfully issued $1 billion of non-guaranteed debt and approximately $2.7 billion of new common equity. I am exceedingly proud of our company’s stress test results, which were ranked the best among our peers in the categories of “Resources to Absorb Losses to Risk-Weighted Assets” and “Total Loan Loss Rates,” as well as the success we had in raising non-guaranteed debt at very attractive spreads and, finally, our ability to raise common equity in a well-received offering. Lastly, on July 15th, we repurchased the 10-year warrant that was issued in conjunction with the preferred stock, effectively concluding our participation in the Treasury’s Capital Purchase Program. All of these significant events and successful outcomes further validated the strength and stability of U.S. Bancorp."

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