Like a growing number of other banks, U.S. Bank is eliminating some of its overdraft fees.

Earlier this month, it stopped charging customers fees for non-sufficient funds in checking accounts.

By early this summer, it will also reduce the amount an account can be overdrawn from $5 to $50 before a fee is charged. In addition, it will also begin giving customers a full day to deposit funds to avoid an overdraft fee, which at U.S. Bank is $36.

The Minneapolis-based bank, the fifth-largest in the U.S., announced the changes Wednesday when it also reported lower-than-expected fourth-quarter earnings. The company’s shares fell nearly 8% on Wednesday as investors also reacted to a decline in revenue and increase in expenses.

Under pressure from regulators and policymakers, banks such as Wells Fargo and Bank of America in recent weeks have also been announcing changes to their overdraft fees. Those fees have been criticized for boosting the revenue of banks at the expense of lower-income consumers who are most likely to incur them and often puts them into further financial turmoil.

“We believe this is not only the right thing to do for customers, but it’s a smart business decision,” Terry Dolan, U.S. Bank’s chief financial officer said on a call with analysts.

In an interview, he noted that the changes also makes sense in a digital world in which customers have more tools to keep track of their finances.

Overdraft fees accounted for for $340 million, or a little less than 2%, of U.S. Bancorp’s revenue in 2021. Reducing them with these changes will lead to a drop of $160 million to $170 million in annual revenue, but that may be partly offset by other revenue streams, Dolan said.

In the fourth quarter, U.S. Bancorp’s profit rose 10% to $1.67 billion from $1.52 billion a year earlier. That amounted to $1.07 a share, which was slightly lower than analysts’ expectations.

Nearly all of the $150 million increase came from the release of $145 million of loan-loss reserves that it set aside earlier in the pandemic.

U.S. Bank’s total revenue dropped 1.2% to $5.68 billion. Net interest income, which accounts for nearly two-thirds of revenue, decreased 1.6%. Noninterest income was down 0.6%, shaped by a steep drop in mortgage banking.

Average deposits grew 6.5% over the year to $27.4 billion. And average total loans were up slightly mostly because of a growth in credit card balances and in retail loans, which was primarily due to increase auto and recreational vehicle lending.

U.S. Bancorp executives forecast revenue growth of 3% to 4% this year.

“The economy looks strong,” Dolan said. “We’re optimistic about loan growth, both in terms of consumer as well as corporate, and we’re very optimistic that spending trends in terms of businesses and consumers is going to continue to be pretty strong.”

Andy Cecere, the company’s chief executive, noted that the bank is also positioned to benefit as the Federal Reserve is poised to raise rates at least three times this year. In the meantime, the bank is monitoring the impact of omicron variant of COVID-19.

“Due to the omicron surge, year over year sales growth has slowed somewhat in the past few weeks from the exceptionally strong pace we saw in the second half of 2021,” he said. “However, growth rates remain strong and we believe this will likely prove to be a speed bump rather than an extended slowdown.”

As for its pending $8 billion acquisition of MUFG Union Bank’s consumer business, some analysts raised concerns that the deal could be delayed due to leadership turnover at the Fed.

But Cecere said he still expects the deal to close in the first half of this year — with conversion of MUFG Union’s branches on track for September or October.

“We’re preparing for that timeframe,” he said.

U.S. Bancorp submitted an application for the deal in early October and has been responding to regulators’ questions while integration teams at both companies are working through details, he said.