U.S. Bancorp ( USB Quick Quote USB - Free Report) reported fourth-quarter 2021 earnings per share of $1.07, which missed the Zacks Consensus Estimate of $1.11. Results, however, compare favorably with the prior-year quarter’s figure of 95 cents. Though lower revenues and escalating expenses were disappointing factors, credit quality acted as a tailwind. Growth in loan and deposit balance and a strong capital position were encouraging factors. Moreover, U.S. Bancorp has closed the acquisition of San Francisco-based fintech firm, TravelBank, which offers technology-driven cost and travel management solutions. Including certain one-time items, net income came in at $1.67 billion compared with the prior-year quarter’s $1.53 billion. For full-year 2021, earnings per share came in at $5.10 per share, marginally missing the Zacks Consensus Estimate of $5.13. Nonetheless, the earnings figure compares favorably with the prior-year tally of $3.06 per share. Revenues Decline, Costs Flare Up In the fourth quarter, U.S. Bancorp’s total revenues were $5.6 billion, down 1.2% year over year. Nonetheless, the top line marginally missed the Zacks Consensus Estimate of $5.76 billion. U.S. Bancorp’s tax-equivalent NII totaled $3.2 billion in the reported quarter, down 1.6% from the prior-year quarter. The decline mainly stemmed due to lower loan spreads and mix of earning assets, partially mitigated by deposit and funding mix, and by higher investment portfolio balance. Average earning assets climbed 5% year over year, supported by growth in average investment securities and average other earning assets, primarily driven by higher cash balances. However, the NIM of 2.4% shrunk 17 basis points, mainly due to mix of loans, lower loan spreads and higher investment portfolio balances, partially offset by the net benefit of funding composition. U.S. Bancorp’s non-interest income decreased marginally on a year-over-year basis to $2.53 billion. The fall was mainly owing to lower mortgage banking revenue, other noninterest income and securities gains offset by strong growth in payments revenue, trust and investment management fees, deposit service charges, and commercial products revenue. U.S. Bancorp’s non-interest expenses climbed 5% year over year to $3.53 billion. The rise mainly resulted from elevated compensation expense, employee benefits expense, professional services expense, and marketing and business development. However, this was partly muted by reduced other non-interest expenses to some extent. Efficiency ratio was at 62.3%, higher than the year-ago quarter’s 58.8%. An increase in the ratio indicates a fall in profitability. U.S. Bancorp’s average total loans improved 2% sequentially to $302.8 billion. This stemmed from higher credit card loans and other retail loans. Average total deposits were up 6.5% from the prior quarter to $449.8 billion. The uptick was driven by Wealth Management and Investment Services, and Corporate and Commercial Banking. Credit Quality Strong Provision for credit losses in the reported quarter was a benefit of $13 million against provisions of $441 million in the prior-year quarter. Net charge-offs were $132 million, down 71% year over year. Total allowance for credit losses was $6.2 billion, down 23.2%. However, U.S. Bancorp’s non-performing assets were $701 million, up 13.6% year over year. Healthy Capital Position In the fourth quarter, U.S. Bancorp maintained a solid capital position. The Tier 1 capital ratio came in at 11.6% compared with the prior-year quarter’s 11.3%. Common Equity Tier 1 capital to risk-weighted assets ratio under the Basel III standardized approach fully implemented was 10% as of Dec 31, 2021, up from 9.7% reported in the year-ago quarter. All regulatory ratios of U.S. Bancorp continued to be more than well-capitalized requirements. In addition, reflecting the full implementation of the current expected credit losses methodology, the Tier 1 capital to risk-weighted assets ratio was 9.6 % as of Dec 31, 2021. U.S. Bancorp posted an improvement in book value per share, which increased to $32.71 as of Dec 31, 2021, from $31.26 recorded at the end of the year-earlier quarter. However, the tangible common equity to tangible assets ratio was 6.8 % as of Dec 31, 2021, down from the prior-year quarter’s 6.9%. Our Take The bank’s improving balance-sheet position and a healthy capital position are positives. Sound credit quality is expected to continue supporting its financials. However, continued escalating expenses are downsides. Also, strong deposit flows have been boosting excess cash balances, negatively impacting the margins. Currently, U.S. Bancorp carries a Zacks Rank #3 (Hold). You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here Performance of Other Banks Bank of New York Mellon Corporation’s ( BK Quick Quote BK - Free Report) fourth-quarter 2021 adjusted earnings of $1.04 per share surpassed the Zacks Consensus Estimate of $1.02. The bottom line represents a rise of 8.3% from the prior-year quarter’s level. For 2021, BK’s earnings per share (GAAP basis) of $4.14 increased 8% from the 2020 figure. The Zacks Consensus Estimate for earnings was $4.17 per share. Net income applicable to common shareholders was $3.55 billion, up 4% year over year. First Republic Bank’s ( FRC Quick Quote FRC - Free Report) fourth-quarter 2021 earnings per share of $2.02 surpassed the Zacks Consensus Estimate of $1.91. Additionally, the bottom line improved 26.3% from the year-ago quarter’s level. FRC’s quarterly results were supported by an increase in net interest income and non-interest income. Moreover, First Republic’s balance-sheet position was strong in the quarter. However, higher expenses and elevated net loan charge-offs were the offsetting factors. Citigroup ( C Quick Quote C - Free Report) delivered an earnings surprise of 5.04% in fourth-quarter 2021. Income from continuing operations per share of $1.46 handily outpaced the Zacks Consensus Estimate of $1.39. However, the reported figure declined 24% from the prior-year quarter’s level. Citigroup’s investment banking revenues jumped in the quarter under review, driven by equity underwriting as well as growth in advisory revenues. However, fixed-income revenues were down due to declining rates and spread products.