Like many of the biggest banks in the U.S., Minneapolis-based U.S. Bancorp posted solid first-quarter results from recent months despite two high-profile bank failures and related fallout in the banking industry.
Profits for the nation's fifth-largest bank increased 9.1% to $1.7 billion. When adjusted for merger and integration-charges, its earnings per share came in at $1.16, better than the $1.12 per share analysts expected.
Its total revenue grew 28% to $7.2 billion, which a 45.9% jump in net interest income from a year ago drove, reflecting the impact of rising interest rates on its loans.
Its shares rose 2% in pre-marking trading.
Amid the bank runs and subsequent collapse of Silicon Valley Bank and Signature Bank, some consumers and businesses began moving their deposits out of smaller and regional banks to big banks in the hopes they would be safer there. As a result, the deposit flows of banks have drawn increased scrutiny this earnings season.
While its total deposits decreased 3.6% from the end of the fourth quarter to the end of the first quarter, U.S. Bancorp noted in a slide presentation deck it planned to use during an earnings call with analysts later Wednesday morning that was mostly from seasonal outflows and in relation to the merger with MUFG Union Bank.
After March 8, when Silicon Valley Bank began seeing a bank run, U.S. Bancorp said it saw a net inflow of deposits, increased customer inquiries, new accounts and money market inflows.
The company also noted deposit balances were "relatively stable" after March 8.
Executives at many of the biggest banks in the U.S. — including JPMorgan, Citigroup and Wells Fargo — have said as they've recently reported quarterly results they have seen an uptick in deposits amid the banking turmoil later in the quarter. Others, like Charles Schwab and State Street, reported quarter-to-quarter deposit declines.
U.S. Bancorp's first quarter is the first time period to fully reflect the integration of MUFG Union Bank, an $8 billion acquisition that closed in December. It also recorded $244 million in merger and integration-related charges in the quarter.
The bank said the transition is progressing as planned, and it remains on track to convert Union Bank to the U.S. Bank brand during Memorial Day weekend.
