We also use non-GAAP financial measures, so it's important to review our GAAP results on page 3 and use the information about these measures and their reconciliation to GAAP in the appendix.
Overall, our fees were up 28% year-on-year and 19% sequential quarter.
With stable net interest income, total revenue was up 7% year-on-year and 6% sequential quarter.
We did a good job on expenses, which resulted in 5.9% positive operating leverage year-on-year, up 54.9% underlying efficiency ratio and PPNR growth of 15% year-on-year.
[Indecipherable] charge-offs as our credit cost in Q2 we had a record quarterly earnings of $1.14.
Our ACL to loans ratio is now 2.01% and that's 2.09% excluding PPP loans.
The strong PPNR generation and reduction in commercial line draws during the quarter helped improve our CET1 ratio to 9.6%, which is up from 9.4% in the first quarter.
We had a very liquid balance sheet during the quarter with average deposit growth of 12% sequential quarter, 8% spot.
Our spot LDR at quarter-end was 87.5% or 84.5% excluding PPP loans.
The resilience of the franchises is on display as we generated $0.55 of earnings per share on an underlying basis.
Net interest income was stable linked quarter given strong loan growth which offset a 22 basis point decline in margin.
We increased our allowance for credit losses to $2.5 billion, which translates to an ACL coverage ratio of 2.09% ex PPP, up from 1.73% last quarter.
We showed excellent balance sheet strength and in the quarter with a stronger CET1 ratio of 9.6%, up 20 basis points linked quarter.
Our liquidity ratio has also improved as we ended the quarter with an LDR of 84% excluding PPP loans and we remain in compliance with the LCR.
Also, our tangible book value per share is over $32 at quarter end, up 4% compared with a year ago.
Now, let me move to the highlights of our underlying results covered on pages 4 and 5.
Our earnings per share of $0.55 was down $0.41 year-over-year but up $0.46 linked quarter.
PPNR of $790 million was a record, up 15% year-over-year and 17% linked quarter.
Average loan growth was 6% in the quarter, reflecting PPP lending and the impact of the commercial line draws we saw last quarter, which benefited NII and helped offset the impact of the more challenging rate environment.
If we adjust for the sales, PPP and line draws, average loans were up 1% linked quarter.
Moving to page 6, I'll cover net interest income, which are quite well despite a lower margin.
Net interest income was stable linked quarter as the benefit of 8% interest earning asset growth and improved funding costs was offset by the impact of lower rates.
Net interest margin decreased 22 basis points linked quarter as the impact of lower rates and higher cash balances was partially offset by lower deposit costs and outsized growth in DDA and other lower cost deposits.
About 6 basis points of the margin decline related to higher cash balances in the quarter given strong deposit flows as consumers and small businesses benefited from government stimulus and corporate clients built liquidity.
We were especially pleased with our progress on deposit cost, which we drove down 37 basis points during the quarter, a more than 50% decline.
Our total interest-bearing deposit cost was 48 basis points at the end of the quarter.
That compares to 34 basis points back in 3Q 2015 at the end of the last [Indecipherable] period.
Moving to page 7, I'll discuss fees, which really shows the benefit from the work we've done to build capabilities and diversify our business.
Noninterest income was a record, up 19% on a linked quarter basis and 28% year-over-year.
On a sequential basis mortgage banking fees increased by 74% to $276 million reflecting continued strong refi lock volumes and record high gain on sale margins in particular.
Capital market fees of $61 million, increased $18 million from first quarter reflecting strong DCM activity and a $13 million mark-to-market recovery on loan trading assets.
Foreign exchange and interest rate product revenues increased 5% linked quarter before the impact of CVA.
CVA improvement was $8 million in the quarter.
Trust and investment services fees were lower by $8 million linked quarter given the rate environment and the effect of the equity market decline on managed money revenue.
On a positive note, we see debit card activity roughly back to pre-pandemic level and credit card activity in June only down about 10% compared with last year, a significant improvement from the over 30% declines we saw in early April.
Turning to page 8, underlying non-interest expense declined 2% linked quarter largely driven by seasonal impacts in Q1 on salaries and employee benefits.
Salaries and employee benefits declined $30 million or 6% linked quarter largely reflecting seasonally lower payroll taxes.
Next, let's discuss loan trends on page 9.
Average core loans were up 7% linked quarter primarily driven by the full quarter impact of the commercial line draws at the end of the first quarter and the $4.7 billion of PPP lending to our small business customers.
Before the impact of loan sales, line draws and PPP loans, core commercial loan growth was up approximately 1% linked quarter.
The $7.2 billion of post-COVID commercial line draws in March have been substantially repaid, and were down to $1.8 billion by the end of the second quarter.
Overall utilization is down to approximately 40% from 50% at the end of the first quarter.
Core retail loans on a linked quarter basis were stable with growth in education and other retail offset by lower home equity balances and the transfer of approximately $900 million of education loans held for sale.
Moving to page 10, deposit growth was exceptionally strong in the quarter.
We saw robust average deposit growth of 12% linked quarter and 15 % year-over-year, outpacing loan growth and driving our average LDR down to 89% excluding PPP as consumers and small businesses benefited from government stimulus and clients built liquidity.
These strong deposit flows came in lower cost categories with average DDA growth up 25% on a linked quarter basis and 33% year-over-year.
We were able to cut our interest-bearing deposit costs by roughly half this quarter, down 46 basis points to 48 basis points, and down 82 basis points year-over-year.
Let's move to page 11 and cover credit.
Net charge-offs were stable at 46 basis points linked quarter as increases in commercial were partially offset by improvement in retail reflecting the impact of forbearance.
Non-performing loans increased 27% linked quarter driven by $192 million increase in commercial, reflecting COVID lockdown impacts and an $18 million increase in retail.
The non-performing loan ratio of 79 basis point increased 18 basis point linked quarter and 17 basis points year-over-year.
However, in spite of this increase the non-accrual coverage ratio remained strong at 255% at June 30.
We increased our CECL credit reserve coverage ratio from 1.73% in 1Q to 2.09% in 2Q excluding the PPP loans.
This 46 basis points increase was primarily driven by a net reserve build of $317 million.
In addition, approximately $100 million of reserves associated with a planned sale of student loans were reallocated to the remaining loan portfolio.
In effect the reserve build was $417 million or 99% of the Q1 build.
On page 12, we provide detail on customer forbearance and the PPP lending program.
The average FICO score of our retail forbearance customers remains high at 725.
And approximately 93% of these loans were current when they entered forbearance.
I'm also pleased to say that through June 30, our customers received $4.7 billion in PPP loans, which has allowed us to help support over 540,000 jobs.
84% of loans made were below $100,000.
Moving to page 13 to discuss our CECL methodology and reserves; we have summarized the key aspects of our macroeconomic scenario, which is a foundational element of the CECL reserve estimate.
On page 14, as I mentioned earlier, we feel well positioned to manage through the current environment with strong capital and liquidity positions.
Our CET1 ratio improved to 9.6%, up 20 basis points linked quarter given our strong results and a reduction in risk-weighted assets.
Additionally, during the quarter, we issued 400 million of Q1 qualifying preferred stocks, which in combination with the increase in CET1 drove a 40 basis point increase in Tier 1 capital.
Strong deposit growth outpaced loan growth, which improved our liquidity metrics and drove the spot LDR excluding PPP loans down to 84%.
Turning to page 15, let's look at reserves and capital versus stress losses.
Our ACL of $2.5 billion represents a very strong 52%% of our modeled losses using the Fed scenario and is now 38% of the stress losses in the Fed's 2020 DFAST. In addition, when adding excess capital above our preliminary SCB of $3.4 billion to our ACL, the resulting $5.9 billion is 120% of our estimate and 88% of the Fed loss estimates.
On average, we've generated approximately 35 basis points of CET1 capacity per quarter over the last six quarters.
On page 16, we show a summary of the Fed's stress test results.
The Fed estimated our PPNR at 2.3% of average assets, which is well below the peer median of 3.3%.
For example, our PPNR to assets for 2019 has improved by approximately 37% since the IPO to 3.7%.
Importantly, this compares to a stable 3.7% in actual PPNR to assets during the first six months realized stress in 2020.
The Fed's estimate of our credit losses at 5.6% was right on top of the peer median and down from 6.1% in 2018.
However, our estimated company run severely adverse credit loss rate of 4.2% is significantly lower.
We believe that the Fed's modeled results and the 3.4% preliminary SCB is elevated above what our business model would imply.
On page 17, I want to highlight some exciting things that are happening across the company.
Moving to page 18, we provide some commentary on how key categories are shaping up for full year 2020 compared to the prior year.
Now, let's move to page 19 for some high-level commentary on the third quarter.

Summary:
With stable net interest income, total revenue was up 7% year-on-year and 6% sequential quarter.
This 46 basis points increase was primarily driven by a net reserve build of $317 million.