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How Bancorp’s Credit Provision and Non-Performing Assets Looked in 4Q17

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Credit provision

Bancorp’s (USB) provision for credit losses for 4Q17 was $335 million, which was lower by $25 million, or 6.9%, over 3Q17 and lower by $7 million or 2% than 4Q16. This reduced provision is on account of stability in business as compared to 3Q17.

Total net charge-offs in 4Q17 were $325 million in comparison to $330 million in 3Q17 and $322 million in 4Q16. A decreased net charge-off of 1.5% in comparison to 3Q17 was mainly due to lower total commercial loans. Net charge-offs driven by higher recoveries were offset by higher total commercial real estate and credit card loans.

The increase of $3 million, or 0.9% in comparison to 4Q16, was due to higher total commercial real estate and credit card loan net charge-offs, offset by lower total commercial loans. The net charge-off ratio was 0.46% in 4Q17 in comparison to 0.47% in 3Q17 and 4Q16.

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Non-performing assets

Non-performing assets were $1,200 million in 4Q17 in comparison to $1,251 in 3Q17 and $1,603 in 4Q16. The ratio of non-performing assets to loans and other real estate was 0.43% in 4Q17 in comparison to 0.45% in 3Q17 and 0.59% in 4Q16.

Market capitalization for USB is $92.7 billion. For peers Wells Fargo (WFC), JP Morgan (JPM), Citigroup (C), and Bank of America (BAC), market capitalization stands at $281.4 billion, $391.6 billion, $198.3 billion, and $321.5 billion, respectively. USB forms 2.8% of the iShares U.S. Financial Services ETF (IYG).

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