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U.S. Bancorp (NYSE:USB) stock gained 1.2% in Wednesday premarket trading after it posted better-than-expected Q4 2022 earnings and guided for revenue exceeding the Wall Street consensus estimates for both Q1 and full-year 2023.
For the full-year 2022, earnings were bolstered by solid net interest income, wider net interest margin, and positive operating leverage of more than 230 basis points, Chairman, President and CEO Andy Cecere said. On Dec. 1, U.S. Bancorp (USB) completed its acquisition of MUFG Union Bank, which is expected to add 8%-9% to 2023 EPS, he added.The company expects Q1 revenue to increase to $7.1B-$7.3B compared with the $7.08B consensus. For the year, it expects adjusted total revenue of $29B-$31B vs. the average analyst estimate of $29.03B.
The company guides for net interest margin for the quarter and for the year rising 5-10 basis points from Q4 2022’s 3.01% level, U.S. Bancorp (USB) said in its earnings slides.
Average earnings assets are expected to grow to $605B-$610B in Q1 and to $610B-$620B at the end of the year vs. $573B at the end of Q4 2022.
Adjusted total adjusted noninterest expense for the quarter is expected to rise to $4.3B-$4.4B vs. $4.0B in Q4, vs. $3.71B Visible Alpha consensus. For the year, it’s expected to be $17B-$17.5B vs. $15.3B Visible Alpha consensus. The noninterest expense guidance includes core deposit intangibles related to Union Bank amounting to ~$125M in Q1 2023 and ~$500M for the year.
Q4 2022 adjusted EPS of $1.20, beating the $1.14 average analyst estimate, rose from $1.18 in Q3 and $ in Q4 2021.
Its provision for credit losses climbed to $1.19B, including $129M for balance sheet optimization and $662M for acquisition impact of initial provision. The PCL was $362M in Q3 and a benefit of $13M in Q42021.
Q3 net interest income on taxable equivalent basis increased to $4.33B from $3.86B in the prior quarter and $3.15B in the year-ago period. Adjusted net interest margin of 3.01% vs. 2.83% in the prior quarter and 2.40% in the year-ago quarter.
Adjusted noninterest income slipped to $2.44B from $2.47B in Q3 and from $2.53B in Q4 2021.
Q4 total adjusted noninterest expense of $4.04B rose from $3.64B in the prior quarter and from $3.53B in the year-ago quarter.
Average total loans of $359.8B vs. $336.8B in Q3; average deposits of $481.8B vs. $456.8B in the prior quarter.
Conference call at 9:00 AM ET.
Earlier, U.S. Bancorp (USB) non-GAAP EPS of $1.20 beats by $0.06, revenue of $6.37B misses by $240M.
