U.S. banks reported positive loan loss provisions in the 2022 fourth quarter, demonstrating caution in the face of an uncertain macro environment.
Almost half of the 51 banks with assets between $10 billion and $50 billion that announced fourth-quarter 2022 earnings between Jan. 23 and Jan. 27 increased provisions sequentially, while 41 reported an overall increase, according to S&P Global Market Intelligence data.
Provisions at $10B-$50B banks
At $47.1 million, Winter Haven, Fla.-based SouthState Corp. recorded the highest provisions in the group, up $23.3 million from the previous three months.
"We strengthened our reserves in 2022 to prepare for a likely economic slowdown in 2023," SouthState CEO John Corbett said during the fourth-quarter earnings call.
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In second place was Houston-based Stellar Bancorp Inc., with $44.8 million in provisions in the fourth quarter of 2022. The lender topped the list of highest sequential provisions, with an increase of $42.8 million from the previous three months.
The higher provisions during the quarter are "reflective of our more conservative view on credit given the increasing economic uncertainty, loan growth, and changes in specific reserves," Stellar CFO Paul Egge said during a fourth-quarter earnings call.
At $32.9 million each, Atlanta-based Ameris Bancorp and Portland, Ore.-based Umpqua Holdings Corp. had the third-highest provisions.
The only bank in the sample to record negative provisions for credit loss during the quarter was Oak Ridge, N.J.-based Lakeland Bancorp Inc. It reported $2.8 million in negative provisions, down $4.1 million from the previous quarter.
Provisions at large banks
Among the nine banks with over $50 billion in total assets that reported fourth-quarter earnings 2022 through Jan. 27, six increased provisions sequentially, while three posted a quarter-over-quarter decline.
At $1.19 billion, U.S. Bancorp had the most provisions, up $830.0 million from the previous quarter and $1.21 billion from the corresponding quarter of 2021.
First Citizens BancShares Inc. was a distant second, reporting $79.0 million in provisions, $19.0 million higher than in the previous quarter.
Zions Bancorp. NA, Western Alliance Bancorp. and East West Bancorp Inc. all posted sequential declines in credit loss provisions.
