Truist Financial Corp. and Fifth Third Bancorp. were among several regional banks that reported broadly stable deposits in the first quarter as lenders weathered the fallout from the collapse of three lenders in March.
(Bloomberg) — Truist Financial Corp. and Fifth Third Bancorp. were among several regional banks that reported broadly stable deposits in the first quarter as lenders weathered the fallout from the collapse of three lenders in March.
Deposits at Truist stood at $408 billion as of March 31 versus predictions for about $411 billion by analysts tracked by Bloomberg. For Fifth Third, average deposits were about $161 billion, roughly flat compared to the end of 2022. At Huntington Bancshares, they were around $146 billion, up slightly from the prior quarter.
“In a challenging and unique quarter for the banking industry, Truist demonstrated strength,” Truist Chief Executive Officer Bill Rogers said in the statement.
Regional banks were roiled by the March collapse of Silvergate Capital Corp., SVB Financial Group’s Silicon Valley Bank and Signature Bank. Since then, the Federal Reserve has set up a liquidity facility meant to calm depositors and provide banks with underwater bond holdings with access to funding.
Investors are now closely tracking the flow of money into or out of other regional banks to gauge their health. Fifth Third said in a presentation that it had added “as many new commercial relationships” over the weekend of Silicon Valley Bank’s failure as in a normal month. In a sign the turmoil took more of a toll, Comerica Inc. said deposits came in at $64.7 billion, missing estimates.
Shares in Truist, Fifth Third and Comerica slid in New York trading. Another lender, Cleveland, Ohio-based KeyCorp, fell more than 7% before paring some of those losses after it said it expects full-year NII to decline 1% to 3% from 2022, reversing the increase of as much as 4% it earlier predicted.
The firm, which earned $4.6 billion in NII last year, said that metric rose 8.4% year-over-year but was down 9.9% from the fourth quarter. The bank cited “higher interest-bearing deposit costs and a shift in funding mix.”
KeyCorp’s total average deposits fell 1.6% in the first quarter from the last three months of 2022. Bank notes and other short-term borrowings nearly doubled in the quarter to $10.1 billion, from $5.4 billion at year-end.
Net Interest Income
Truist reported net interest income of $3.92 billion, compared with $3.21 billion a year earlier. Earnings per share was $1.05 versus $0.99, according to the statement.
Truist was one of 11 banks that deposited a combined $30 billion at First Republic Bank in an effort to shore up the struggling lender. It also joined the ranks of peers trimming staff in recent months, cutting about 80 employees last week as it ends sales and trading of certain fixed-income securities.
Cincinnati-based Fifth Third’s net interest income came in at $1.5 billion in line with analyst estimates, compared to $1.2 billion in the same period a year ago. Earnings per share was $0.78 versus $0.69, according to the statement. The lender took a $164 million provision for credit losses, below an estimate of $180.6 million.
East West Bancorp Inc., set up 50 years ago to cater to the immigrant Chinese American community, reported earnings that didn’t stray too far from expectations. Deposit drain wasn’t a major concern at the bank, with average deposits largely flat from the prior quarter.
Still, the bank has been leaning on the new facility set up by the Federal Reserve, borrowing about $4.5 billion at a rate of 4.4% as of the end of March. It cited the recent banking industry volatility and a desire to maintain a conservative liquidity profile as the driver for that move.
U.S. Bancorp, the largest regional bank by assets, said Wednesday that average deposits climbed 12% in the first quarter, and held steady during March. Citizens Financial Group Inc. said its average deposits fell 2.6% in the first quarter from the prior period, while period-end deposits fell 4.7%.
Read More: U.S. Bancorp Says Deposits Rose Amid Bid to Boost Confidence
–With assistance from Sam Nagarajan, Hannah Levitt, Paige Smith and Keith Gerstein.
(Updates with earnings from East West, Huntington and shares from second paragraph.)
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