CORRECTED – WRAPUP 2-Wells Fargo profit falls but loan losses decline

(Corrects headline, deleting “stock slumps”)

* Wells Fargo Q2 EPS $0.55 vs year earlier $0.57

* US Bancorp Q2 EPS $0.45 vs Street view $0.38

* Comerica Q2 EPS $0.39 vs Street View $0.23

* Wells Fargo, US Bancorp shares higher in premarket
(Recasts, adds Wells Fargo results, details on US Bancorp
loan book, CEO comment on credit)

By Elinor Comlay

NEW YORK, July 21 (BestGrowthStock) – Wells Fargo & Co (WFC.N: ), the
fourth-largest U.S. bank, reported lower second-quarter profit (Read more your timing to make a profit.),
but losses on commercial and consumer loans declined from the
first quarter.

The bank said mortgage hedging results were down.

Minneapolis-based US Bancorp (USB.N: ) said profit soared as
new lending boosted revenue.

U.S. banks, recovering from the financial crisis, are now
grappling with a dip in consumer sentiment and worries about
how their business will be affected by the financial reform
bill due to be signed into law by U.S. President Barack Obama
later on Wednesday.

“A number of provisions within this legislation will impact
our company by either lowering revenue, increasing expense
and/or raising capital requirements,” US Bancorp Chief
Executive Richard Davis said in a statement.

The banks are also struggling as consumer sentiment remains
low and U.S. unemployment hovers around 10 percent.

LOANS

Bucking a trend among its larger rivals, US Bancorp said it
made more new loans in the second quarter compared with a year
earlier.

Its loan book grew 4 percent from the 2009 quarter to
$191.2 billion as credit card issuance and residential
mortgages increased. Quarterly revenue climbed almost 9 percent
to $4.5 billion.

Loan losses increased slightly, to $1.11 billion from $929
million, but losses on commercial loans, home equity and
residential mortgages broadly fell.

The bank put aside $1.13 billion against bad loans, down
from $1.4 billion a year earlier.

“We believe the company has reached the inflection point in
credit quality and we expect net charge-offs and nonperforming
assets to be lower in the third quarter than the current
quarter,” Davis said in a statement.

Bank of America Corp (BAC.N: ), JPMorgan Chase & Co (JPM.N: )
and Citigroup Inc (C.N: ) all reported earnings last week that
were boosted by reserve releases after their credit costs
eased.

Wells Fargo reported first quarter earnings of $3.06
billion, or 55 cents a share, compared with $3.17 billion, or
57 cents a share, a year earlier.

Analysts on average expected earnings of 48 cents a share,
according to Thomson Reuters I/B/E/S. It could not immediately
be determined if that figure compared directly to Wells Fargo’s
figure of 55 cents a share.

US Bancorp’s second-quarter profit (Read more your timing to make a profit.) was $766 million, or 45
cents a share, compared with $471 million, or 12 cents a share,
a year earlier.

Excluding one-items, it earned 40 cents a share, above
analysts’ average estimate of 38 cents, according to Thomson
Reuters I/B/E/S.

A smaller regional bank, Dallas-based Comerica Inc (CMA.N: ),
also beat Wall Street earnings estimates on Wednesday, helped
by lower credit losses. [ID:nSGE66K0EL]

Comerica reported second-quarter net income attributable to
common shares was $69 million, or 39 cents a share, compared
with a loss of $16 million, or 11 cents a share, last year.

US Bancorp shares were up 2 percent to $23.62 in premarket
trading.

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(Reporting by Elinor Comlay; editing by John Wallace)

CORRECTED – WRAPUP 2-Wells Fargo profit falls but loan losses decline