US Bancorp (NYSE:USB) Q2 2020 Earnings Conference Call - Final Transcript
Jul 15, 2020 • 09:00 am ET
Welcome to US Bancorp's Second Quarter 2020 Earnings Conference Call. Following a review of the results by Andy Cecere, Chairman, President and Chief Executive Officer; and Terry Dolan, Vice Chair and Chief Financial Officer, there will be a formal question-and-answer session. [Operator Instructions] This call will be recorded and available for replay, beginning today at approximately 12 PM Eastern through Wednesday, July 22 at 12 Midnight Eastern.
I will now like to turn the conference call over to Jen Thompson, Director of Investor Relations and Economic Analysis for US Bancorp.
Thank you, Nechis and good morning everyone. With me today are Andy Cecere, our Chairman, President and CEO; and Terry Dolan, our Chief Financial Officer. Also joining us on the call today are our Chief Risk Officer, Jodi Richard; and our Chief Credit Officer, Mark Runkel. During their prepared remarks Andy and Terry will be referencing a slide presentation. A copy of the slide presentation as well as our earnings release and supplemental analyst schedules are available on our website at usbank.com. I would like to remind you that any forward-looking statements made during today's call are subject to risk and uncertainty. Factors that could materially change our current forward-looking assumptions are described on Page 2 of today's presentation, in our press release and in our Form 10-K and subsequent reports on file with the SEC.
I'll now turn the call over to Andy.
Thanks, Jen and good morning everyone. Thank you for joining our call. Following our prepared remarks Terry, Jodi, Mark and I will take any questions you have. I'll begin on slide 3. In the second quarter, we reported earnings per share of $0.41. Consistent with the industry, our performance is being impacted by the current economic environment. Loan growth reflected the impact of defensive draws by corporations in March and early April, strong mortgage loan growth and the impact of the Paycheck Protection Program, which supported small businesses impacted by the COVID-19 situation. Increased liquidity in the financial system and a flight to quality drove strong deposit growth in the quarter. Our healthy fee income growth this quarter is a testament to our diversified business model.
Some fee lines including our Payments businesses were negatively impacted by slower economic activity. However, we saw very strong growth in our Mortgage and Commercial Products businesses. And while consumer spend activity remains pressured compared with a year ago volume trends in each of our Payments businesses have improved as some economies have started to reopen. Expenses were held relatively flat compared with the first quarter. We continue to manage our cost structure prudently and in line with the slower revenue growth environment. Credit quality metrics in the second quarter reflected increased economic stress offset by the beneficial impact of government stimulus and forbearance and deferral programs.
During the quarter, we increased our allowance for loan losses in response to economic conditions. We believe our reserve level at June 30 is appropriate based on the information we have available. Changes in