U.S. Bancorp is seeing improved earnings across the board. A new report claims that increased interest income from higher mortgage rates are the driving factor.
"Revenues improved, aided by the rise in net interest, as well as fee income," according to a Zachs Equity Research report, reported National Mortgage News.
"But 'escalating expenses and lower mortgage banking revenues were major drags.'"
According to NMN mortgage banking revenue dipped $191 million in quarter two from $212 million just one year ago. Inversely, mortgage banking income had risen from the $184 million mark in just a single quarter.
"Lower mortgage origination volumes driven by the increase in rates over the past year are the main cause of the competition that has put downward pressure on mortgage revenue," according to the NMN report.
"But higher rates have had some upsides for the mortgage business as well, and a rate-driven gain in the net value of the U.S. Bancorp's mortgage servicing rights partially offset what otherwise have been a more pronounced decline in income for home loans at the company."
To learn more about the effects that higher mortgage rates had on U.S. Bancorp, click on the image above.