U.S. Bancorp results lift stock price despite red ink in broad market

US Bancorp stock rose 5.7%, even as the S&P 500 moved lower by 1.3% on Wednesday.

The bank completed its acquisition of Mitsubishi UFJ Financial Group for $5.5 billion in cash and 44 million shares on Dec. 1 and said the business will add 8% to 9% to its 2023 earnings per share.

Also Read: Why the recent wave of regional bank mergers is far from over — and you could profit from it

Looking ahead at the first quarter, U.S. Bancorp said total revenue is estimated to be in a range of $7.1 billion to $7.3 billion, including approximately $100 million of purchase accounting accretion. Wall Street analysts currently expect revenue of $7.05 billion, according to FactSet data.

For 2023, U.S. Bancorp anticipates revenue of $29 billion to $31 billion, compared to the analyst estimate of $29 billion.

For the fourth quarter, U.S. Bancorp said its net income fell by 50% to $853 million, or 57 cents a share, from $1.58 billion, or $1.07 a share, in the year-ago quarter.

Revenue rose to $6.37 billion from $5.68 billion.

Analysts expected fourth-quarter earnings of $1.12 a share on revenue of $6.62 billion, according to FactSet data.

Oppenheimer analyst Chris Kotowski said the bank’s fourth-quarter profit included several one-time costs related to its MUFG acquisition including $399 million of balance sheet optimization impacts against revenues, $90 million of merger and integration expenses and a $791 million impact to its provision for credit losses.

Breaking out these items, U.S. Bancorp would have earned $1.26 a share, close to his estimate of $1.28 a share, Kotowski said.

Including Wednesday’s boost, U.S. Bancorp stock is up 13.3% in 2023, compared to a rise of 3.8% by the S&P 500

Also Read: Private-equity firm Compass widens reach into healthcare as a bright spot in moribund M&A market