The companies that run Minnesota’s two largest banks, Wells Fargo & Co. and U.S. Bancorp, ended 2015 with solid profits, although both saw pressures on fourth-quarter earnings.

Wells Fargo is one of the biggest lenders to oil and gas explorers, which have been hurt by plunging prices, and it reported a $118 million loss on loans to them, leading to a flat profit in the last three months of the year.

By contrast, the energy sector accounts for only about 1 percent of U.S. Bancorp’s loan portfolio and the firm hasn’t seen a major impact from the industry. Its fourth-quarter profit fell slightly due to some credit provision costs and a difficult comparison against a year-ago period when it recorded a one-time gain from its stake in an investment firm.

For both firms — San Francisco-based Wells Fargo runs Minnesota’s largest bank and Minneapolis-based U.S. Bancorp runs the second — the quarter yielded growth in loans, deposits and income. Wells Fargo, which has been on a buying spree, passed Citigroup Inc. to become the nation’s third largest banking firm by assets.

U.S. Bancorp, which is fifth in asset size, in the quarter reached positive operating leverage, meaning revenue grew faster than expenses, a metric that executives didn’t think would happen until later in 2016.

“The result of our efficiency efforts, loan growth more than anticipated and continued strength in payments business got us to end the year in a really good spot from an operating leverage standpoint,” said Kathy Rogers, the company’s chief financial officer.

U.S. Bancorp said it earned $1.48 billion in the October to December period, down about 1 percent from $1.49 billion in the same period a year earlier. Revenue rose about 1 percent to $5.21 billion, driven by a 2.6 percent jump in interest income.

The company earned a record $5.93 billion for the year, up about a half-percent from 2014.

Chief Executive Richard Davis called the company’s overall performance for 2015 “remarkable” in the face of low interest rates, modest economic growth and more regulations. He said last month’s quarter-point increase in interest rates — the first move upward since the Fed cut rates to near zero in 2009 — would not have a big effect on the company’s interest margin. The company has made its plans for 2016 with the assumption that the Fed will raise rates once during the year.

“I’m concerned less about the rate itself than the fact that rates moving up will continue to reflect that the Fed believes the economy is stronger,” Davis said. “What we care most about is a strong economy.”

Wells Fargo reported a profit of $5.71 billion in the quarter, flat with last year.

Wells Fargo’s Minneapolis-based mortgage business, the largest in the U.S. by volume, earned $1.7 billion in fees during the quarter, a 10 percent jump from a year ago.

Mortgage originations slowed to $47 billion, mostly due to seasonality.


The Associated Press contributed to this report.