U.S. Banks 3Q20: Materially Lower Loan Loss Provisions Drive Improved Earnings

DBRS, Inc. (DBRS Morningstar) published a commentary highlighting the 3Q20 results of U.S. banks. Following the massive reserve builds in the previous two quarters, 3Q20 results included modest reserve builds, or reserve releases in certain cases, reflecting the procyclical nature of the Current Expected Credit Loss (CECL) accounting standard that requires banks to recognize expected life-of-loan losses on day one.