Wells Fargo (WFC -6.02%) was the laggard among the three major U.S. banks reporting second-quarter earnings Tuesday morning. In contrast to peers JPMorgan Chase and Citigroup, it missed estimates badly on both the top and bottom lines.

The bank took in $17.8 billion in revenue in Q2, down almost 18% year over year. Its net loss deepened to almost $2.4 billion ($0.66 per share), a dramatic flip from its net profit of $6.2 billion a year earlier. This was on the back of a 1.5% drop in total loans to $935 billion, and a 9% rise in average deposits to nearly $1.4 trillion.

A Wells Fargo branch.

Image source: Wells Fargo.

On average, analysts tracking the bank had been modeling for $18.4 billion in revenue and a net loss of only $0.20 per share.

The main reason for Wells Fargo's dive into the red on the bottom line was loan-loss provisioning in anticipation of the looming spike in loan defaults as the coronavirus-driven recession extends.

Following the pattern it (and most other lenders) set in Q1, the bank again significantly ramped up the amount of money it allocated to cover those expected losses. For Q2, its loan-loss provisions totaled $3.38 billion; a year ago, they were only $479 million.

As was widely expected, the struggling bank also cut its next quarterly dividend to $0.10 per share, an 80% chop from the previous $0.51 payout. At the current stock price, the new dividend yields about 1.6%.

In the wake of the earnings release on Tuesday, Wells Fargo shares were down by nearly 6% in mid-afternoon trading, while the broader stock market was up fractionally.