In a decade of owning U.S. Bancorp shares, William Reinhardt never seriously considered attending the bank's annual shareholders' meeting.

But that changed in March, when the Minneapolis bank slashed its dividend by 88 percent. On Tuesday, the 82-year-old Oakdale resident rose to his feet at the U.S. Bancorp annual shareholders meeting Tuesday and calmly asked why the bank's stock had fallen so precipitously.

"When things are going bad, you get more interested in everything that has to do with your investments," Reinhardt, who owns about 4,000 shares of U.S. Bancorp, said after the meeting.

The U.S. Bancorp annual shareholders' meeting is never a raucous affair, and despite unusually large attendance, this year was no exception. Most of the 700-plus shareholders who gathered in an auditorium at the Minneapolis Convention Center sat stone silent, or clapped politely, as CEO Richard Davis discussed the bank's performance.

Even as the stock was surging on better-than-expected quarterly results released that morning, Davis at times seemed apologetic as he tried to explain the bank's decisions. "I apologize for that; I apologize for that," he said of cutting the dividend 88 percent.

Perhaps because of the conciliatory tone, the meeting had none of the drama of Citigroup's annual gathering -- held Tuesday in New York -- where shareholders took to the microphone to vent their frustrations about the bank's stock price and to orally assail top executives.

Davis was pointed in his core message, as well: While U.S. Bancorp may be struggling, it is still performing much better than its rivals.

On Tuesday, on the same day that more than a half-dozen regional banks posted quarterly losses, U.S. Bancorp said it earned $419 million, or 24 cents a share, during the quarter ended March 31. That was down from $1.08 billion, or 62 cents a share, a year ago, as a result of rising losses from bad loans. But earnings were higher than in the previous quarter and surpassed analysts' expectations -- signs, according to some analysts, that the bank's fortunes might be improving.

Shares of the bank surged $3.33, or nearly 21 percent, to $19.27 a share. The stock has more than doubled since hitting a 52-week low of $8.82 a share March 6, while still well below October levels of more than $35 a share.

Although U.S. Bancorp executives said they expect loan losses to continue rising, they reassured investors by noting that the pace of those losses now is predictable -- and thus more manageable.

"I'm happy to report that our last few quarters including this quarter are very consistent with what we've expected along this cycle, and we're looking the same for the next couple of quarters," Davis said. "The kind of trajectory you've seen in both the increase in charge-offs ... [is] not expected to be very different than the last few quarters."

In the first quarter, U.S. Bancorp's gross charge-offs for bad loans more than doubled to $840 million from $348 million a year earlier. The higher losses forced the bank to set aside $1.32 billion in reserves during the quarter to cover future losses.

So, while credit quality continues to worsen, analysts took Davis's statements as an indication that the bank doesn't expect a big spike in problem loans -- and that it should benefit once the credit cycle begins to turn and fewer borrowers default.

"They clearly have their arms around the direction of the credit cycle," said Jon Arfstrom, a bank analyst at RBC Capital Markets. "The great fear is that some banks aren't comfortable enough to say that."

The bank continued to post revenue gains, as its mortgage banking division originated $13.4 billion in loans for the quarter as low interest rates spurred more refinancing activity. Revenue during the quarter increased to $3.88 billion, from $3.87 billion a year earlier.

Reinhardt, the longtime shareholder, said he takes comfort in the fact that the bank continues to expand and make more loans, despite the weak economy. Asked if he would sell his shares, he responded, "Definitely not. I have confidence that when things get better, they will outperform."

Chris Serres • 612-673-4308