US BANCORP DE

Overview

Earnings Summary U.S. Bancorp and its subsidiaries (the “Company”) reported net income attributable to U.S. Bancorp of $1.7 billion for the first quarter of 2025, or $1.03 per diluted common share, compared with $1.3 billion, or $0.78 per diluted common share, for the first quarter of 2024. Return on average assets and return on average common equity were 1.04 percent and 12.3 percent, respectively, for the first quarter of 2025, compared with 0.81 percent and 10.0 percent, respectively, for the first quarter of 2024. The results for the first quarter of 2024 included the impact of $265 million ($199 million net-of-tax) of notable items, including $155 million of merger and integration charges associated with the acquisition of MUFG Union Bank, N.A. (“MUB”) and $110 million of incremental FDIC special assessment charges, which decreased diluted earnings per common share for the first quarter of 2024 by $0.12.

Total net revenue for the first quarter of 2025 was $243 million (3.6 percent) higher than the first quarter of 2024, reflecting a 2.7 percent increase in net interest income and a 5.0 percent increase in noninterest income. The increase in net interest income from the first quarter of 2024 was primarily due to the mix of earning assets, fixed asset repricing and modest loan growth, partially offset by deposit mix. The increase in noninterest income was driven by higher trust and investment management fees, payment services revenue and other noninterest income.

Noninterest expense in the first quarter of 2025 was $227 million (5.1 percent) lower than the first quarter of 2024, primarily due to the impact of merger and integration charges in the prior year and lower compensation and employee benefits expense, partially offset by higher marketing and business development expense and technology and communications expense.

The provision for credit losses for the first quarter of 2025 was $16 million (2.9 percent) lower than the first quarter of 2024, driven by improved credit quality and loan portfolio mix, which contributed to a $10 million reserve release in the first quarter of 2025. Net charge-offs in the first quarter of 2025 were $547 million, compared with $488 million in the first quarter of 2024. Refer to “Corporate Risk Profile” for further information on the provision for credit losses, net charge-offs, nonperforming assets and other factors considered by the Company in assessing the credit quality of the loan portfolio and establishing the allowance for credit losses.

Statement of Income Analysis

Net Interest Income Net interest income, on a taxable-equivalent basis, was $4.1 billion in the first quarter of 2025, representing an increase of $107 million (2.7 percent) compared with the first quarter of 2024. The increase was primarily due to the mix of earning assets, fixed asset repricing and modest loan growth, partially offset by deposit mix. Average earning assets for the first quarter of 2025 were $14.1 billion (2.4 percent) higher than the first quarter of 2024, reflecting increases in investment securities, loans and other earning assets, partially offset by a decrease in interest-

bearing deposits with banks. The net interest margin, on a taxable-equivalent basis, in the first quarter of 2025 was 2.72 percent, compared with 2.70 percent in the first quarter of 2024. The increase in net interest margin from the first quarter of 2024 was primarily due to improved balance sheet mix, fixed asset repricing and modest loan growth, partially offset by deposit mix and higher earning assets. Refer to the “Consolidated Daily Average Balance Sheet and Related Yields and Rates” table for further information on net interest income.

Average total loans in the first quarter of 2025 were $8.0 billion (2.1 percent) higher than the first quarter of 2024. The increase was primarily due to higher commercial loans, residential mortgages and credit card loans, partially offset by lower commercial real estate loans and other retail loans. The increase in average commercial loans was primarily due to growth in loans to financial institutions. The increase in residential mortgages was primarily driven by originations. The increase in average credit card loans was primarily driven by customer account growth and higher spend volume. The decrease in average commercial real estate loans was primarily due to loan workout activities and payoffs exceeding a reduced level of new originations. The decrease in average other retail loans was driven by lower automobile loans.

Average investment securities in the first quarter of 2025 were $9.9 billion (6.2 percent) higher than the first quarter of 2024, primarily due to balance sheet positioning and liquidity management.

Average total deposits for the first quarter of 2025 were $3.5 billion (0.7 percent) higher than the first quarter of 2024. Average total savings deposits for the first quarter of 2025 were $8.2 billion (2.3 percent) higher than the first quarter of 2024, driven by increases in Wealth, Corporate, Commercial and Institutional Banking, and Consumer and Business Banking balances. Average time deposits for the first quarter of 2025 were $358 million (0.6 percent) higher than the first quarter of 2024, mainly due to increases in Consumer and Business Banking balances, partially offset by decreases in Wealth, Corporate, Commercial and Institutional Banking balances. Changes in time deposits are primarily related to those deposits managed as an alternative to other funding sources, based largely on relative pricing and liquidity characteristics. Average noninterest-bearing deposits for the first quarter of 2025 were $5.1 billion (6.0 percent) lower than the first quarter of 2024, driven by decreases in Wealth, Corporate, Commercial and Institutional Banking, and Consumer and Business Banking balances.

Provision for Credit Losses The provision for credit losses was $537 million in the first quarter of 2025, representing a decrease of $16 million (2.9 percent) from the first quarter of 2024, primarily driven by improved credit quality and loan portfolio mix, which contributed to a $10 million reserve release in the first quarter of 2025. Net charge-offs increased $59 million (12.1 percent) in the first quarter of 2025, compared with the first quarter of 2024, reflecting higher commercial and credit card loan net charge-offs. Refer to

“Corporate Risk Profile” for further information on the provision for credit losses, net charge-offs, nonperforming assets and other factors considered by the Company in assessing the credit quality of the loan portfolio and establishing the allowance for credit losses.

Noninterest Income Noninterest income was $2.8 billion in the first quarter of 2025, representing an increase of $136 million (5.0 percent) compared with the first quarter of 2024. The increase in noninterest income in the first quarter of 2025, compared with the first quarter of 2024, was primarily driven by higher trust and investment management fees, payment services revenue and other noninterest income. Trust and investment management fees increased primarily due to business growth and favorable market conditions. Payment services revenue increased primarily due to increases across all categories due to business volume growth. The increase in card revenue was partially offset by a reduction in prepaid card volumes from the prior year. Other noninterest income increased primarily due to higher tax credit investment activity and the impact of other favorable items.

Noninterest Expense Noninterest expense was $4.2 billion in the first quarter of 2025, representing a decrease of $227

million (5.1 percent) from the first quarter of 2024. The decrease in noninterest expense reflected the impact of merger and integration charges in the prior year, along with lower compensation and employee benefits expense and lower other noninterest expense, partially offset by higher marketing and business development expense and higher technology and communications expense. Compensation and employee benefits expense decreased primarily due to cost savings from operational efficiencies, partially offset by merit increases. Other noninterest expense decreased primarily due to the impact of the FDIC special assessment in the prior year. Marketing and business development expense increased primarily due to a higher charitable foundation contribution. Technology and communications expense increased primarily due to investments in infrastructure and technology development.

Income Tax Expense The provision for income taxes was $443 million (an effective rate of 20.5 percent) for the first quarter of 2025, compared with $347 million (an effective rate of 20.7 percent) for the first quarter of 2024. For further information on income taxes, refer to Note 11 of the Notes to Consolidated Financial Statements.

(a)See Non-GAAP Financial Measures beginning on page 27.

Balance Sheet Analysis

Loans The Company’s loan portfolio was $381.8 billion at March 31, 2025, compared with $379.8 billion at December 31, 2024, an increase of $2.0 billion (0.5 percent). The increase was driven by higher commercial loans, partially offset by lower credit card loans and other retail loans.

Commercial loans increased $4.6 billion (3.3 percent) at March 31, 2025, compared with December 31, 2024, primarily due to growth in loans to financial institutions.

Residential mortgages held in the loan portfolio increased $94 million (0.1 percent) at March 31, 2025, compared with December 31, 2024, driven by originations. Residential mortgages originated and placed in the Company’s loan portfolio include jumbo mortgages and branch-originated first lien home equity loans to borrowers with high credit quality.

Credit card loans decreased $1.1 billion (3.7 percent) at March 31, 2025, compared with December 31, 2024, primarily the result of customers seasonally paying down balances.

Other retail loans decreased $1.1 billion (2.5 percent) at March 31, 2025, compared with December 31, 2024, primarily due to a decrease in automobile loans.

Commercial real estate loans decreased $525 million (1.1 percent) at March 31, 2025, compared with December 31, 2024, primarily due to loan workout activities and payoffs exceeding a reduced level of new originations.

The Company generally retains portfolio loans through maturity; however, the Company’s intent may change over time based upon various factors such as ongoing asset/liability management activities, assessment of product profitability, credit risk, liquidity needs, and capital implications. If the Company’s intent or ability to hold an existing portfolio loan changes, it is transferred to loans held for sale.

Loans Held for Sale Loans held for sale, consisting primarily of residential mortgages to be sold in the secondary market, were $1.7 billion at March 31, 2025, compared with $2.6 billion at December 31, 2024. The decrease in loans held for sale was principally due to a lower level of mortgage loan closings

in the first quarter of 2025, compared with the fourth quarter of 2024. Almost all of the residential mortgage loans the Company originates or purchases for sale follow guidelines that allow the loans to be sold into existing, highly liquid secondary markets, in particular in government agency transactions and to government sponsored enterprises (“GSEs”).

Investment Securities Investment securities totaled $164.8 billion at March 31, 2025, compared with $164.6 billion at December 31, 2024. The $156 million (0.1 percent) increase was primarily due to a $508 million favorable change in net unrealized gains (losses) on available-for-sale investment securities, partially offset by net investment securities sales driven by balance sheet positioning and liquidity management.

The Company’s available-for-sale investment securities are carried at fair value with changes in fair value reflected in other comprehensive income (loss) unless a portion of a security’s unrealized loss is related to credit and an allowance for credit losses is necessary. At March 31, 2025, the Company’s net unrealized losses on available-for-sale investment securities were $6.3 billion ($4.7 billion net-of-tax), compared with net unrealized losses of $6.8 billion ($5.1 billion net-of-tax) at December 31, 2024. The favorable change in net unrealized gains (losses) was primarily due to increases in the fair value of U.S. treasury and mortgage-backed securities as a result of changes in interest rates. Gross unrealized losses on available-for-sale investment securities totaled $6.4 billion at March 31, 2025, compared with $6.9 billion at December 31, 2024. When evaluating credit losses, the Company considers various factors such as the nature of the investment security, the credit ratings or financial condition of the issuer, the extent of the unrealized loss, expected cash flows of the underlying collateral, the existence of any government or agency guarantees, and market conditions. At March 31, 2025, the Company had no plans to sell securities with unrealized losses, and believed it was more likely than not that it would not be required to sell such securities before recovery of their amortized cost.

Refer to Notes 3 and 14 in the Notes to Consolidated Financial Statements for further information on investment securities.

Deposits Total deposits were $512.5 billion at March 31, 2025, compared with $518.3 billion at December 31, 2024. The $5.8 billion (1.1 percent) decrease in total deposits reflected decreases in total savings deposits and noninterest-bearing deposits, partially offset by an increase in time deposits. Money market deposit balances decreased $21.1 billion (10.2 percent), primarily due to lower Wealth, Corporate, Commercial and Institutional Banking, and Consumer and Business Banking balances. Savings account balances increased $10.0 billion (22.0 percent), driven by higher Consumer and Business Banking balances. Interest checking balances increased $4.9 billion (3.8 percent), primarily due to higher Wealth, Corporate, Commercial and Institutional Banking, and Consumer and Business Banking balances. Noninterest-bearing deposits decreased $72 million (0.1 percent) at March 31, 2025, compared with December 31, 2024, primarily driven by a decrease in Wealth, Corporate, Commercial and Institutional Banking balances, partially offset by an increase in Consumer and Business Banking balances. Time deposits increased $476 million (0.9 percent) at

March 31, 2025, compared with December 31, 2024, driven by higher Consumer and Business Banking balances. Changes in time deposits are primarily related to those deposits managed as an alternative to other funding sources, based largely on relative pricing and liquidity characteristics.

Borrowings The Company utilizes both short-term and long-term borrowings as part of its asset/liability management and funding strategies. Short-term borrowings, which include federal funds purchased, commercial paper, repurchase agreements, borrowings secured by high-grade assets and other short-term borrowings, were $17.2 billion at March 31, 2025, compared with $15.5 billion at December 31, 2024. The $1.6 billion (10.6 percent) increase in short-term borrowings was primarily due to increases in repurchase agreement balances, partially offset by a decrease in short-term Federal Home Loan Bank (“FHLB”) advances. Long-term debt was $59.9 billion at March 31, 2025, compared with $58.0 billion at December 31, 2024. The $1.9 billion (3.2 percent) increase was primarily due to $3.0 billion of medium-term note and $625 million of credit-linked bank note issuances, partially offset by $2.0 billion of bank note repayments. Refer to the “Liquidity Risk Management” section for discussion of liquidity management of the Company.

(a)Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities that take into account anticipated future prepayments.

(b)Information related to obligations of state and political subdivisions is presented based upon yield to first optional call date if the security is purchased at a premium, and yield to maturity if the security is purchased at par or a discount.

(c)Maturity calculations for obligations of state and political subdivisions are based on the first optional call date for securities with a fair value above par and the contractual maturity date for securities with a fair value equal to or below par.

(d)Amortized cost excludes portfolio level basis adjustments of $204 million at March 31, 2025 and $13 million at December 31, 2024.

(e)Weighted-average yields for obligations of state and political subdivisions are presented on a fully-taxable equivalent basis based on a federal income tax rate of 21 percent. Yields on investment securities are computed based on amortized cost balances, excluding any premiums or discounts recorded related to the transfer of investment securities at fair value from available-for-sale to held-to-maturity.