U.S. Bancorp (NYSE:USB) reported first-quarter results that beat expectations after it benefited from rising interest rates and the December 2022 acquisition of MUFG Union Bank (MUB).
The Minneapolis-based lender said net interest income grew 46% to $4.7 billion for the three months to March 31, 2023, from a year earlier, while non-interest income came in 4.6% up at $2.5 billion. Total net revenue jumped 28% to $7.2 billion, the first time it has exceeded $7 billion.
As interest rates rose and macroeconomic conditions deteriorated, the bank raised its provision for credit losses to $427 million from $112 million in 1Q 2022.
Average total deposit grew by 12.4% year-over-year, also supported by the MUB acquisition.
On an adjusted basis, net income jumped 21% from a year earlier to $1.8 billion, while diluted earnings per share (EPS) were 17% higher at $1.16 beating estimates for EPS of $1.10 to $1.12.
It raised its quarterly dividend to $0.48 from $0.46 in 1Q 2022 and reported a CET1 capital ratio of 8.5% at the end of March, compared with 8.4% on December 31, 2022.
“Our financial performance this quarter demonstrates how our scale, differentiated business mix, and through-the-cycle approach to risk management converge to drive industry-leading returns to shareholders anchored by a strong balance sheet,” chairman, president and CEO Andy Cecere said in a statement.
“The strength and stability of our balance sheet is foundational to the Company, and our commitment to managing the business with a long-term view is unwavering.”
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