The Texas bank also capitalized on rising rates and a positive adjustment to deferred taxes tied to tax reform in reporting a double-digit gain to profits in the fourth quarter.
A plan by the largest U.S. bank to use part of its tax windfall to enter new markets (including Washington and Boston) could become a serious threat for banks of all sizes in those cities — or looked backed upon someday as a pricey over-expansion.
Consumer lending was a bright spot, but a series of one-time charges, capped by a writedown on its deferred tax assets, led to a nearly $1 billion loss.
The Los Angeles company said earnings fell 2% in the quarter as strong loan growth was offset by costs tied to its acquisition of CU Bancorp as well as a loss on the sale of a securities portfolio.
Merger- and tax-related charges took a bite out of fourth-quarter profits at the Cleveland company, but its CEO emphasized that a recent deal and tax reform are promising for growth.
Executives at U.S. Bancorp and Bank of America plan to use their tax savings to ramp up spending on new technology to stay competitive — but they sought to reassure investors that they would not abandon cost control.
Total loans rose 3% at the Minneapolis bank, but its net interest margin climbed 10 basis points. It also booked a one-time accounting gain of $910 million related to tax reform.
Though business owners are more optimistic about the direction of the economy since the tax law was passed, it's doubtful their borrowing will increase meaningfully until they see more signs of more robust growth, bankers say.
