U.S. Bancorp (NYSE:USB) has reported a decline in fourth-quarter earnings after it booked several notable charges including $734 million to the Federal Deposit Insurance Corporation (FDIC).
The Minneapolis-based lender posted a 6.2% rise in revenue to $6.76 billion for the three months to December 31, 2023, while adjusted revenue came in 1.7% higher at $6.88 billion — beating analysts’ consensus of $6.85 billion.
Earnings per share (EPS) fell 14% to $0.49 due to the notable items. Stripping those out, adjusted EPS of $0.99, down from $1.20 a year earlier, were in line with estimates, according to Zacks Investment Research.
As well as the FDIC charge aimed at replenishing the fund after the small banks’ crisis of early 2023, other notable items included $118 million of balance sheet optimization charges, $171 million of merger and integration-related charges related to the December 2022 acquisition of MUFG Union Bank (MUB) and a $110 million charitable contribution to fund obligations under the Community Benefit Plan.
CEO Andy Cecere noted that the bank met its 2023 goal of achieving full run-rate cost synergies of $900 million with the Union Bank acquisition.
“Looking ahead, we are making good progress on revenue growth opportunities with Union Bank and effectively managing the balance sheet for continued capital-efficient growth as we maintain our disciplined, through-the-cycle approach to credit risk management,” Cecere commented in a statement.
Ahead of the opening bell, the lender’s shares were down 0.3% at $41.25.