U.S. Bancorp said profit dropped 3.1 percent in the first quarter as provisions for bad loans surged 25 percent, driven by a jump in downgrades on energy-related credits.
The nation’s largest regional lender said net income fell to $1.39 billion, or 76 cents a share, from $1.43 billion, or 76 cents a share, a year earlier.
Oil prices have plunged more than 60 percent since their 2014 peak, forcing banks to set aside billions of dollars to cover bad energy loans. Standard & Poor’s said in March that U.S. regional banks could suffer losses if oil prices continue to fall. U.S. Bancorp CEO Richard Davis has relied on fees from credit cards and auto financing to bolster earnings.