Net income at the Minneapolis banking giant was $689 million, or 41 cents a share, down 62% from $1.82 billion, or $1.09, in the year-earlier period. Analysts surveyed by FactSet predicted per-share earnings of 32 cents for the latest quarter.
Revenue totaled $5.84 billion, edging up 0.3% from $5.82 billion a year earlier. Analysts had been looking for $5.58 billion in the latest quarter.
The profit slide was “primarily due to an increase in the provision for credit losses driven by deteriorating economic conditions caused by the impact of covid-19 on the U.S. and global economies,” the company said.
“Our second-quarter earnings results were reflective of a more challenging economic environment than we have seen in some time,” U.S. Bancorp Chief Executive Andy Cecere said in a statement.
“However, our diversified business mix generated healthy fee-revenue growth, expenses were essentially flat, and capital and liquidity positions ended the quarter in a strong position.”
U.S. Bancorp reported a $1.74 billion provision for credit losses, resulting in a $1.3 billion increase in the allowance for credit losses.
Net interest income decreased 3.2%, as the net interest margin narrowed 0.51 percentage point to 2.62%.
Major banks began reporting their earnings this week, and most have done fairly well, outside of Wells Fargo WFC.
U.S. Bancorp shares recently traded at $37.68, up 3.8%. The stock slumped 39% year to date through Tuesday, compared with a drop of 2% for the S&P 500.