At Bank of Utah, our passion for building a better community is what drives us. In the midst of this pandemic, we continue to support and bolster our neighbors and local businesses. We are the economic first responders in the communities in which we live and work. Our commitment to relationship building, combined with our solid financial foundation, allows us to grow, even in uncertain times, and to reaffirm our role as a source of strength for our customers when they need it most.
Let me give you an example. In the second quarter, we funded over $170 million in Paycheck Protection Program (PPP) loans. These loans were able to keep over 23,000 local employees on the payroll. Without this lifeline, many businesses and nonprofit organizations would have had to shut their doors and lay off their employees. During this time of crisis, our strong deposit growth and earnings enabled us to fund loans from our own liquidity. Due to our thoughtful approach to managing the Bank’s operations, we had the capital and liquidity available. That means our customers can trust us as a source of financial stability—and trust is more important now than ever.
In addition to our strong capital and liquidity position, we accelerated growth and delivered positive results in other areas. The commercial loan portfolio grew by 20.1 percent from the previous quarter, and average deposits increased by 12.5 percent from Q1 2020. Mortgage production soared 59.4 percent over Q1 2020, and corporate trust revenue increased 13.8 percent over the previous year.
Consolidated Net Income for Q2 2020 was $7.3 million, compared to $6.4 million for Q1 2020 and $7.2 million for Q2 2019, an increase of 12.8 percent and 0.7 percent, respectively.
Return on Average Equity for Q2 2020 was 13.8 percent, compared to 12.5 percent for the previous quarter and 15.6 percent for Q2 2019.
Net Interest Income (NII) and Net Interest Margin (NIM) on a fully taxable equivalent basis (FTE) for Q2 2020 was $14.8 million and 3.84 percent, compared to $14.7 million and 4.28 percent respectively, in the previous quarter.
Noninterest Income and Expense Noninterest Income surged to $8.6 million in Q2, a 48.0% increase from the previous quarter and 58.0% increase from the second quarter of 2019. Expenses increased by 4.0 percent from the previous quarter and only 0.9 percent from Q2 2019.
As I reflect back on the second quarter, I remember the uncertainty we felt with shortages of toilet paper, canned food and disinfectant—wondering what would be next. As I look ahead, I realize that uncertainties remain, but supply chains are improving, we are taking measures to stay safe while keeping our economy open. We are responding with essential financial aid. And, I can ensure this: Our community can continue to rely on us, just as it has for the past 67 years.
Douglas L. DeFries
President and CEO