U.S. Bank indirect loan originations drop 29% YoY

U.S. Bank 's indirect loan originations plummeted in the second quarter as regional and national banks reported improvements in credit performance. Minneapolis-based U.S. Bank’s indirect loan and lease production, which primarily includes auto originations, fell 29.1% year over year to $1.4 billion, up 19.8% quarter over quarter, according to the company’s earnings supplement, which was released today. The bank’s originations growth resembles Q2 origination growth reported by larger banks including Wells Fargo and Chase Auto . U.S. Bank’s auto outstandings sat at $4.3 billion for Q2 and made up 1.1% of the bank’s total loans, according to the supplement. The auto portfolio decreased 46.5% YoY and 26.4% QoQ. Auto accounted for 13% of the bank’s $41 billion other retail portfolio, according to the earnings presentation. The bank is being deliberate in how it’s approaching balance sheet mix, Chief Executive Gunjan Kedia said during today’s earnings call, noting that credit card and commercial and industrial portfolios represented a larger share of the balance sheet compared to yearend 2023. “To further optimize our balance sheet, we divested approximately $6 billion in mortgage and auto loans this quarter, taking advantage of a favorable rate environment for these asset sales to strategically reposition the balance sheet, both for stronger growth and in support of deeper client relationships,” Kedia said. U.S. Bank’s overall net income was $1.8 billion, up 13% YoY and 6.1% QoQ. Share of U.S. Bank [NYSE:USB] sat at $45.21 at market close today, down 1% from market open. U.S. bank has a market cap of $70.4 billion. PNC auto credit losses decline YoY Pittsburgh-based PNC Financial 's auto credit performance improved YoY in Q2, according to the bank’s July 16 earnings supplement, with: Auto accounts 30- to 59-days past due at 0.47% of outstandings, down 15 basis points (bps) YoY and 1 bps QoQ; The rate of auto loans 60- to 89-days past due at 0.12% of outstandings, down 3 bps YoY but flat QoQ; and Accounts greater than 90 days past due at 0.03% of outstandings, down 37 bps YoY and 43 bps QoQ. Net charge-offs and credit losses also trended downward. Net charge-offs hit 0.04%, down 1 bps YoY and 4 bps QoQ, while the allowance for auto credit losses came in at $151 million, or a coverage ratio of 0.95%, down 15 bps YoY and 14 bps QoQ. Auto outstandings rose 7.2% YoY and 3.7% QoQ to $15.9 billion. “Our auto book has been growing largely because we didn't run for the hills in the slight bubble of the economy earlier last year,” Chief Executive and Chairman William Demchak said on the July 16 earnings call. The bank’s net income and revenue also improved. Net income increased 11.2% YoY and 9.6% QoQ to $1.6 billion, while total revenue climbed 4.6% YoY and 3.8% QoQ to $5.7 billion. Shares of PNC Financial [NYSE: PNC] sat at $196.05 at market close today, up 1.1% from market open. PNC has a market cap of $77.6 billion. Fifth Third’s delinquencies improve Credit performance across Fifth Third Bank ’s indirect secured consumer loan portfolio, of which auto made up 83% and RV and marine lending made up 17% in Q2, improved during the quarter. The rate of auto loans 30 to 89 days delinquent was 0.7%, down 13 bps YoY but up 2 bps QoQ, according to the bank’s earnings presentation published today. Net charge-offs sat at 0.37%, down 9 bps YoY and 16 bps QoQ. The bank’s indirect secured consumer loan portfolio sat at $17.6 billion in Q2, up 13.9% YoY and 4.7% QoQ. The weighted average FICO score for indirect secured loans rose to 773 in Q2, up 3 points YoY and 1 point QoQ. The weighted average loan-to-value ratio remained steady at 88%. “We saw growth in every major consumer lending category led by continued strength in our secured lending products, such as auto and home equity lending,” Executive Vice President and Chief Financial Officer Bryan Preston said on the company’s earnings call today. Fifth Third’s overall net income was $628 million, up 4.5% YoY and 21.9% QoQ, according to the earnings release. Shares of Fifth Third Bank [NASDAQ: FITB] sat at $42.61 at market close today, down 1% from market open. Fifth Third has a market cap of $28.4 billion. Citizens Bank auto NCOs decline Citizens Bank ’s auto portfolio stood at $3.4 billion in Q2, representing declines of 46.6% YoY drop and 15.8% QoQ, as the bank continued to run off its auto portfolio following its exit from indirect auto in 2023 , according to its supplement released July 16. The Providence, R.I.-based bank’s auto net charge-offs sat at 0.36%, up 9 bps YoY but down 37 bps QoQ. Citizens’ overall net income rose 11.2% YoY and 16.9% QoQ to $436 million. Total revenue increased 3.8% YoY and 5.3% QoQ to $2 billion. Auto Finance Summit, the premier industry event for auto lending and leasing, returns Oct. 15-17 at the Bellagio Las Vegas. To learn more about the 2025 event and register, visit www.AutoFinance.live/AFS .

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