First-quarter earnings reports delivered on expectations that the four biggest US banks would emerge as relative winners from the March turmoil.

The banks confirmed that they had been recipients of large deposit shifts after last month's failures, though they tended to deny that the inflows were decisive for their performance.

Still, the intensification of deposit competition that has prompted cuts to net interest income (NII) forecasts at some superregional and regional peers did not appear to knock the Big Four off course.

JPMorgan Chase & Co. lifted its NII guidance for the year by about 10%, citing expectations that rate cuts later this year could relieve pressure on funding costs. Wells Fargo & Co. and Citigroup Inc. both maintained their NII guidance, which analysts at Jefferies, Keefe Bruyette & Woods (KBW) and Piper Sandler called conservative. Bank of America Corp.'s first-quarter NII came in a bit ahead of its guidance, and it said it was comfortable with the consensus analyst forecast for the year.

Steady credit provisions

Credit expenses across the Big Four were relatively stable, with sequential increases at Citi and Wells Fargo, and declines at Bank of America and JPMorgan Chase.

Wells Fargo added to its reserves over concerns about office real estate. The bank's reserve coverage ratio for office loans of 5.7% is strong, KBW analyst David Konrad said in an April 16 note, though his estimates assume that the ratio increases to 9% in 2023.

Bank of America added $124 million to its credit loss reserve in the first quarter, down from $403 million the previous quarter. It said the build reflected an "ever so slightly better" macroeconomic outlook and modest loan growth.

JPMorgan Chase CFO Jeremy Barnum said the rate at which consumer credit losses are normalizing remains "really quite modest."

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Tangible book value gains

A silver lining from the events in March is that they helped push down medium- and long-term interest rates, which undid some of the damage to the market value of banks' bond portfolios. Bond prices and interest rates move inversely.

Accumulated other comprehensive income captures changes in the market value of available-for-sale securities and improved by $790 million to $2.92 billion sequentially in the first quarter at each of the Big Four. That helped push up their tangible book value per share by 2.6% to 4.8% sequentially.

Bank of America, JPMorgan Chase and Wells Fargo all repurchased stock in the first quarter. However, JPMorgan Chase Chairman and CEO Jamie Dimon noted economic uncertainties and expectations for tougher regulatory capital standards and said, "We don't mind keeping our powder dry."