US Bank Q220 net income is down by 62% from the year ago quarter to $689m ($1.82bn).
But despite the drop in net income, the results are ahead of analyst forecasts.
Go deeper with GlobalData
Total net revenue for the quarter of $5.84bn is flat year-on-year.
Net interest income is down by 3.2% y-o-y, primarily due to the impact of declining interest rates. But this is partially offset by deposit and funding mix and loan growth.
The US Bank Q220 net interest margin is 2.62%. This compares with 3.13% in the year ago quarter and 2.91% in Q120.
The decrease in the net interest margin year-over-year is primarily due to the impact of the lower yield curve and higher cash balances to maintain liquidity given the environment.
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By GlobalDataNon-interest income is down by 5.0% compared with a year ago. This is driven by significant growth in mortgage banking revenue due to refinancing activities. In addition, there is strong growth in commercial products revenue, and an increase in gains on the sale of securities.
Growth in these fee categories is partially offset by a decline in payment services revenue and deposit service charges related to lower consumer and commercial spending as well as higher fee waivers related to customers impacted by Covid.
US Bank Q220: deposits +16.8% year-over-year
Average total loans grow by 6.9% on a linked quarter basis and 10.0% year-over-year. Meantime, average total deposits rise by 11.2% on a linked quarter basis and 16.8% year-over-year.
On the other hand, less positive metrics include non-performing assets increasing by 24.0% on a linked quarter basis and 23.1% year-over-year.
Provision for credit losses increase almost four-fold to $1.74bn, reflecting the current economic environment.
“Our second quarter earnings results are reflective of a more challenging economic environment than we have seen in some time. However, our diversified business mix generate healthy fee revenue growth. Expenses are essentially flat, and capital and liquidity positions end the quarter in a strong position,” says Andy Cecere, CEO, US Bancorp.
Digital highlights
US Bank ends the quarter with 77% of active customers digitally active, up from 72% a year ago. Active mobile banking customers now represent 55% of customers, up from 50% a year ago. Around 46% of loan sales in the second quarter are sold via digital channels, up from 35% in the year ago quarter.
