Annual Report
2025
U.S. Bancorp
Gunjan Kedia
Chief Executive Officer
and President
Dear Shareholders
Nearly one year ago, I had the privilege of stepping into the chief
executive officer role at U.S. Bancorp. I am deeply grateful to my
predecessor, our executive chairman and former CEO, Andy Cecere,
who led us with distinction and an unwavering focus on long-term
stewardship. We are fortunate to be a trusted, exceptional banking
franchise because of his leadership, and on behalf of all U.S. Bankers,
I thank him for his service.
Our early priorities during my tenure were shaped by the
considerable time I spent with investors, clients, colleagues,
partners and our Board of Directors. I was touched by stories
I heard of the impact we have had over more than 162 years of
serving companies and families in so many communities. We are
deeply respected for our prudent risk management and admired
for our attractive business portfolio and culture. Yet, I saw we
needed to restore investor confidence in our strategy, execution
and ability to deliver strong financial results. That sentiment
became a rallying cry for our company.
Delivering strong results
Given the CEO leadership transition, we believed it was important
to reaffirm the targets we shared at our Investor Day in 2024.
We mobilized around them, and we are proud to report that by the
third quarter of 2025, we were operating fully within our medium-
term target ranges, and that performance drove solid earnings per
share growth of 16%1 on an adjusted basis in 2025. For instance:
Accelerating growth
We delivered record full-year net revenue of $28.7 billion,
representing 4% growth over 2024. Our fees grew 6.7%,
which was above our medium-term targets.
High returns
We achieved a return on tangible common equity of 18.1% for
the full year and improved our return on assets to 1.19% during
the fourth quarter. Our strong returns are particularly notable
given that we have grown our common equity tier 1 capital
ratio (CET1) by 1.9% in 2025 as we prepare for our transition
to a Category II banking organization.
Productivity
2025 was a strong year for productivity. We maintained
nearly flat expenses and achieved full-year positive operating
leverage of 370 basis points on an adjusted basis.1
Credit and capital
We remained true to our core risk management principles
and had net charge-offs of 57 basis points as a percentage of
average loans outstanding for the year, and our CET1 capital
ratio strengthened to 10.8%.
Although we are proud of the early progress against our financial
commitments, we have higher aspirations and remain focused on
delivering consistent industry-leading financial results going forward.
1
1. Non-GAAP; as adjusted for notable items; see Non-GAAP Financial Measures
beginning on page 54 for reconciliation.
2. See Non-GAAP Financial Measures beginning on page 54 for reconciliation.
2025
Financial
Highlights
$28.7B
in record net revenue
$4.62
earnings per share
16%1 increase year-
over-year (as adjusted)
6.7%
in fee revenue growth
year-over-year
18.1%
return on tangible
common equity2
1.12%
return on
average assets
$3.7B
in total capital return
370 bps
year-over-year
adjusted positive
operating leverage1
58.6%
efficiency ratio2
10.8%
CET1 ratio
20 bps
throughout 2025
tailored for this segment. For our institutional
clients, we integrated delivery of all services
for the healthcare and private capital industry
segments and accelerated growth in treasury
management, payments and investment services.
We introduced a broad array of capital markets
products and in early 2026 announced a
definitive agreement to buy BTIG, LLC,
which will augment our fixed income, foreign
exchange and derivatives capabilities with
equity trading and investment banking.
Further supporting organic growth, client
centricity and interconnected products
improved our loan book mix with commercial
and credit card loans making up 48% of loans
at year-end vs. 45% at the end of 2024. These
loans drive multi-product client relationships that
tend to deliver three times the revenue per client
compared with single-product clients. A similar
focus on consumers improved our funding mix,
and we achieved record consumer deposits in
the fourth quarter. These business strategies,
along with select balance sheet repositioning
actions, grew net interest income and
strengthened net interest margin to 2.77%.
Executing with urgency
We aligned behind three priorities to focus
our execution and drive our results in 2025:
organic growth, productivity, and payments
transformation. We also invested to
extend our competitive advantages in
key foundational areas.
Organic growth
I have long held the strong conviction that
sustainable organic growth comes from
delighting clients. As such, our strategy has
focused on delivering more interconnected
products that create unique value and deeper
relationships with our 15 million clients.
We have an attractive mix of fee-based
products that complement core banking in
beautiful ways. For our consumer segment,
we introduced Bank Smartly®, which enriched
card rewards based on deposits. For small
businesses, we introduced U.S. Bank
Business Essentials®, which interconnects
banking, card and merchant solutions. We
also streamlined credit underwriting and
introduced cash flow management capabilities
2 U.S. Bancorp Annual Report 2025 | usbank.com/AR2025
Productivity
During the past six years, we undertook an
ambitious effort to elevate our digital capabilities
from customer experiences to production
systems across custody, loan underwriting,
foreign exchange, mortgage, card, merchant
gateways, broker dealer and more. These legacy
investments – augmented by our cloud migration
and rapid deployment of artificial intelligence (AI)
capabilities – helped us achieve meaningful cost
savings within our core operations and essentially
maintain flat expenses, even as we invested more
than $2.5 billion in 2025 to drive organic growth.
Early in 2025, we organized our efforts around
four signature productivity programs: AI and
automation, location optimization, real estate
rationalization, and organizational simplicity.
These programs have further runway and will
continue into 2026.
Payments transformation
I often observe kids and their first experiences
with money. It’s mostly about paying for
something. Today, a payments product is often
the first and the most frequent interaction clients
have with banks, especially Gen Z customers.
Our payments transformation is a strategic, long-
term priority for the company and fundamental
to growing, deepening and delighting future
generations of clients. Card issuing – more
than two-thirds of our payments business –
3
is augmenting our legacy strength with new
and creative products tailored to attract affluent
clients. Further, our 2022 MUFG Union Bank
acquisition introduced an attractive, affluent
customer base; access to this important segment
has helped us deepen our California franchise
and extend our relationships, which have been
important growth drivers. We also are executing
a multi-year transformation within our merchant
business aimed at embedded payments, a defined
focus on five key verticals, and direct distribution.
As the transformation has hit its stride, we have
seen steadily strengthening growth rates for both
businesses through 2025.
Strong foundations
We are the largest non-GSIB commercial bank in
the United States, and we are close to becoming
a Category II banking organization. While we
are building capital toward this transition, we are
committed to our long-term capital distribution
target of 75% through dividends and our share
repurchase program, which is designed to
support sustainable growth for our clients,
protect the bank throughout economic cycles
and ensure our ability to deliver regular and
predictable shareholder returns. We are proud
to often be called best-in-class underwriters,
and we have reinforced our credit and risk
management disciplines as we scale and grow.
We will strengthen existing roots as we grow new
ones. In 2025, we built out in-house capabilities
in artificial intelligence, data management, and
digital assets, which will allow us to leverage the
potential of these imperatives and be ready to
reach new heights.
Reorienting the organization
for performance
Strong, positive cultures support long-term
differentiation and success for companies. I am
fortunate to inherit a culture steeped in integrity,
community investment, prudent stewardship,
and deep care for our people. It is my intention
to safeguard these strengths for the benefit
of future generations of U.S. Bankers.
4 U.S. Bancorp Annual Report 2025 | usbank.com/AR2025
Within that overall context, we are reshaping
the organization to have a sharper performance
edge. We intentionally shifted resources to
the company’s most important opportunities.
We aligned the organizational structure to
consolidate and elevate client-facing groups.
We eliminated duplication, simplified decision-
making, and replaced outdated or redundant
processes. This helped us achieve both greater
speed and expense reduction.
We infused new talent into the organization,
as well. For instance, nearly a quarter of our
top 150 leaders are new-to-bank or new-
to-role. We refreshed incentives – creating
tighter alignment between individual rewards
and company priorities – and drove higher
performance differentiation. Most importantly,
we rearticulated leadership expectations,
augmenting our traditional strengths in
stewardship, ethics, care and collaboration
with new expectations for urgency,
ambition, accountability, transparency
and interconnectivity.
Our leaders and teams have deep love and
respect for this organization. They accepted the
call to action and delivered strong momentum
and results in 2025. They will continue to lead
the charge into 2026 with care and resolve.
Looking ahead
Through our history, U.S. Bancorp's pivotal
strategic shifts and outperformance have
come during times of significant change in the
industry. In the 1990s, we grew scale through
bank acquisitions. In the deregulatory era of the
2000s, we acquired then-unusual capabilities
in payments, corporate trust and asset
management, which created a highly attractive
diversified fee portfolio. During and after the
financial crisis, we leveraged our strengths in
risk management to grow through a flight to
quality, and a decade ago, we emphasized a
digital-first strategy in response to significant
shifts in customer behavior.
Today, banking is at the precipice of
consequential change with broad re-examination
of our regulatory and supervisory constructs,
the rapid rise of artificial intelligence and
digital currency, and potential shifts in
industry composition with novel charters and
consolidation. We have deep confidence in our
strength and our ability to be successful amid
these winds of change. As we look ahead to
2026 and beyond, our strategy will be shaped by
the core principles that define and differentiate
us. We will keep clients at the center of
everything we do and meet them where they
are – in branches, offices or online, with a human
touch or AI agents, directly or through partners.
We will be known for a broad array of compelling
products that support the full cycle of life events
and diversify our business model. We will invest
and innovate around our strengths in capital
markets, payments and investment services to
capture the potential of digital assets and AI. We
will run our company efficiently, fully embracing
technology and simplicity. We will lead with
enduring values and ultimately deliver strong,
consistent, leading performance.
Our strategy is clear, our team is energized, and
our momentum is building. We have a renewed
commitment to you and deeply appreciate not
only your interest in us, but also your investment.
We honor it as our own. We expect a lot from
ourselves – and so should you.
My best to you with sincere thanks,
Gunjan Kedia
Gunjan Kedia
Chief Executive Officer and President
5
(a) See Non-GAAP Financial Measures beginning on page 54 for reconciliation.
(b) Calculated as U.S. Bancorp common shareholders' equity divided by common shares outstanding at end of the period.
(c) Based on a federal income tax rate of 21% for those assets and liabilities whose income or expense is not included for federal income tax purposes.
(d) Excludes unrealized gains and losses on available-for-sale investment securities.
Year Ended December 31
(Dollars and Shares in Millions, Except Per Share Data)
2025
2024
2023
SELECTED INCOME STATEMENT DATA
Total net revenue(a), (c) ..............................................................
$28,656
$27,455
$28,144
Noninterest expense .............................................................
16,837
17,188
18,873
Income before provision and income taxes ...........................
11,819
10,267
9,271
Provision for credit losses ......................................................
2,186
2,238
2,275
Net income attributable to U.S. Bancorp ...............................
7,570
6,299
5,429
PER COMMON SHARE
Diluted earnings per share .....................................................
$4.62
$3.79
$3.27
Dividends declared per share ................................................
2.04
1.98
1.93
Book value per share(b) ...........................................................
37.55
33.19
31.13
Tangible book value per share(a) .............................................
29.12
24.63
22.30
Market value per share ..........................................................
53.36
47.83
43.28
Average diluted common shares outstanding ........................
1,558
1,561
1,543
SELECTED RATIOS
Return on average assets .......................................................
1.12%
.95%
.82%
Return on average common equity ........................................
13.0
11.7
10.8
Return on tangible common equity(a) ......................................
18.1
17.2
16.9
Net interest margin (taxable-equivalent basis)(c) .....................
2.72
2.70
2.90
Efficiency ratio(a) .....................................................................
58.6
62.3
66.7
Common equity tier 1 capital ................................................
10.8
10.6
9.9
AVERAGE BALANCES
Loans .....................................................................................
$380,260
$373,875
$381,275
Investment securities(d) ..........................................................
172,376
166,634
162,757
Earning assets ........................................................................
615,360
606,641
605,199
Assets ....................................................................................
676,540
664,014
663,440
Deposits ................................................................................
509,118
509,515
505,663
PERIOD END BALANCES
Loans .....................................................................................
$391,335
$379,832
$373,835
Allowance for credit losses ...................................................
7,947
7,925
7,839
Investment securities ............................................................
167,008
164,626
153,751
Assets ...................................................................................
692,345
678,318
663,491
Deposits ................................................................................
522,216
518,309
512,312
Total U.S. Bancorp shareholders’ equity .................................
65,193
58,578
55,306
FINANCIAL SUMMARY
An exceptional banking franchise
Headquartered in Minneapolis, U.S. Bancorp is the parent company of U.S. Bank National Association,
the fifth-largest commercial bank in the United States. Our three major business lines serve 15 million
clients throughout the U.S., Canada and Europe, and our team of nearly 70,000 people invests our
hearts and minds to power human potential every day. Ranked 105th on the Fortune 500, we are
deeply respected for our culture and long-term stewardship and admired for our diversified business
mix and product capabilities.
How each business line
delivers for you
~13M
Consumer
clients
~1.4M
Business
clients
~500K
Wealth
clients
~48K
Corporate and
institutional
clients
Business line revenue percentages above for the year ended
December 31, 2025, are non-GAAP financial measures, are
given on a taxable-equivalent basis and exclude Treasury
and Corporate Support. See Non-GAAP Financial Measures
beginning on page 54 for reconciliation.
6 U.S. Bancorp Annual Report 2025 | usbank.com/AR2025
For the 12 months ended December 31, 2025,
on a taxable-equivalent basis.
Our clients
■ Wealth, Corporate, Commercial
and Institutional Banking
Asset Management and Institutional Services,
Commercial Real Estate, Equipment Finance,
Global Capital Markets, Global Corporate
Trust, Global Fund Services, Institutional
Client Group, U.S. Bancorp Impact Finance
and Wealth Management
■ Consumer and Business Banking
Consumer Banking, Consumer Lending
(mortgage, auto/recreational vehicle),
Business Banking and Business Lending
■ Payment Services
Retail Payment Solutions, Merchant
Payment Services and Corporate
Payment and Treasury Solutions
Additionally, fee income represents
~ 42%
of total net revenue
for U.S. Bancorp
OUR STRATEGY:
Creating value
through growth, capabilities
and transformation
Throughout 2025, our focus was on growing the business. We worked to attract
new clients, expand key areas of our business, and partner across the organization
to deliver interconnected solutions that differentiate us and bring the whole company
to our customers. We opened new branches as well as new client centers beyond
our 26-state branch footprint where local teams engage with clients. We also
introduced a broader suite of services to strengthen client relationships.
7
7
8 U.S. Bancorp Annual Report 2025 | usbank.com/AR2025
Adding new solutions for business owners
In 2025, we expanded our capabilities for small and medium businesses (SMBs) by connecting
banking, payments, and software solutions to address core needs like payroll, bill payments
and spend management.
Some examples include:
• U.S. Bank Business Essentials®, an all-in-one checking account that lets businesses accept
card payments with free same-day access to funds and a mobile card reader. It offers unlimited
digital transactions, no monthly fee, and integration with accounting software through
a streamlined application.
• Spend Management, a comprehensive platform for our business credit cards, giving owners more
control, reducing manual work, and saving time with features like real-time monitoring, adjustable
spending controls, easy receipt uploads and integrated accounting.
• Bill pay for business, available to all U.S. Bank business checking account holders, provides cash
flow management and flexible payment options. Businesses sync with accounting software, and the
system integrates seamlessly into our online banking platform.
• U.S. Bank® Payroll meets the need of the approximately 80% of small business owners who
want digital payroll solutions bundled with banking, payments, and operations tools. Launched
in the third quarter, it gives small business owners the ability to manage payroll and related tasks
within online banking.
Reaching clients with new services
Strategic focus on growing fee revenue
We have a diversified mix of fee businesses that in 2025 made
about 42% of our total net revenue. In 2025, we saw broad strength
across our fee businesses driven by new products, expanded sales,
and national marketing.
Areas where we saw strong full-year growth include:
• Trust and Investment Management
• Global Capital Markets
• Treasury Management
• Investment Products
• Payments
• Impact Finance
6.7%
increase in
fee revenue
year-over-year
9
Scaling through partnerships
Through our partnership with Edward Jones
and its network of 20,000 financial advisors,
U.S. Bank co-branded checking and credit
card products are now available to millions of
U.S.-based Edward Jones clients. This includes
Edward Jones® Everyday Solutions Powered
by U.S. Bank™, which offers rewards, flexible
benefits and fee waivers.
Adding capabilities
through BTIG acquisition
Looking ahead, U.S. Bancorp has agreed to
acquire BTIG, LLC, a financial services firm
specializing in investment banking, sales
and trading, research, and prime brokerage.
Founded in 2005, BTIG is a top U.S. broker
for equity execution and has completed over
1,275 investment banking deals since 2015.
The acquisition will expand our capital markets
capabilities. The deal is expected to close
in the second quarter of 2026, pending
regulatory approval.
American Banker recognized a
cross-functional team of women
across Business Banking,
Branch and Small Business
Banking, Payments, Sales and
Technology among their “The
Most Powerful Women in
Banking 2025: Top Teams”, for
their work bringing U.S. Bank
Business Essentials® to life.
U.S. Bank Smartly®: Combining
checking, savings and credit cards
Our complete set of interconnected U.S. Bank Smartly® products –
checking, savings, and credit card – is now available to consumers.
Clients who open all three products receive enhanced rewards and
benefits that increase with higher balances. Innovative products such
as Bank Smartly helped us build our customer base and deliver record
consumer deposits in the fourth quarter.
OUR PERFORMANCE:
Elevating capabilities
and driving productivity
We have a strong foundation, and we have an ambitious plan to guide us into
the future. To enable sustainable growth, we spent last year simplifying our
organizational structure, accelerating automation through artificial intelligence,
and optimizing our real estate. Those moves increased efficiency and
productivity and generated savings to invest back in the business.
10 U.S. Bancorp Annual Report 2025 | usbank.com/AR2025
AI: Increasing productivity,
improving client experiences
We've increased efficiency and enhanced client experiences by
investing in AI and machine learning. For example:
• Our engineers use AI tools to write and review code faster
and to automate processes. Our GenAI-powered code-review
assistant reduces review time by 75%, so our engineers can
focus on higher-value work.
• Our bilingual U.S. Bank Smart Assistant® is used 2.5 million times
monthly through our website and mobile app and leverages
advanced machine learning and conversational AI for seamless
client experiences, including checking balances, tracking credit
scores, and locking cards.
• A GenAI-powered assistant helps our contact center agents
provide better and faster assistance when a client calls.
Speed and simplicity
Four signature productivity programs helped us streamline and
simplify our organization's cost structure: AI and automation, location
optimization, real estate rationalization and organizational simplicity.
By the end of 2025, we reported nine consecutive quarters of stable
expenses and six consecutive quarters of positive operating leverage.
Our efficiency ratio improved for the full year to 58.6%.1
We partially reinvested our productivity to drive growth and build
capabilities for the future, in particular technology, sales, and marketing.
11
~36K
hours of code-
writing time
saved weekly
~75%
reduction
in code-
review time
1. See Non-GAAP Financial Measures beginning on page 54 for reconciliation.
OUR TRANSFORMATION:
Embedded payments,
focused strategies and
expanded distribution
The world is becoming more digitally connected than ever, and many people and
businesses are looking for ways to move money quickly and easily. We want to
be part of that interaction – whether it is tapping a card at a store, transferring
money to a smart device, or sending money to and from clients to businesses
instantly. Knowing that, we have made transforming our payments business
a priority and are committed to advancing the strategy to meet client needs.
12 U.S. Bancorp Annual Report 2025 | usbank.com/AR2025
Expanding the reach of Elan
In 2025, we expanded our multi-channel
distribution and the reach of our Elan Financial
Services credit card program through a new
partnership with Fiserv. Elan is now integrated
into the scaled banking platform Credit Choice,
which delivers a digital-first, branded agent-bank
credit card program for consumer and small
business cardholders.
Growing our services globally
We launched Global Transaction Services
to address clients’ international banking and
payment needs. This team collaborates across
multiple U.S. Bank businesses to help U.S.-
based clients reduce cross-border payment
costs by efficiently converting funds into over
60 currencies for transactions in more than
100 countries.
13
Early momentum in
payments transformation
We started the year by splitting our payments
business into two segments: one focused on
consumers and small businesses, and the other
on merchants and institutions. This sharpened
focus and increased accountability with
expanded leadership. Both organizations grew
fee revenue year-over-year, in all four quarters
of 2025, and by more than 5% in the second
half of the year vs. 2024.
Embedding payments
to help businesses grow
We are accelerating embedded payments
solutions across our owned and partner software
platforms to deliver seamless experiences.
In 2025, our expanded suite introduced secure,
efficient integrations for websites, apps,
enterprise systems and fintech platforms.
Additionally, our eCommerce offerings for SMBs
grew through key partnerships with WIX to
provide SMBs with tools to build sites, accept
payments, and grow digital storefronts through
multiple channels, and through WooCommerce
to enable North American merchants to quickly
access payment services and reach new markets.
Cryptocurrency, stablecoins
and other digital assets
With the growing demand for digital assets, we
created a new team to capture our share of the
market through products like stablecoin issuance,
cryptocurrency custody, asset tokenization,
and digital money movement. We also resumed
cryptocurrency custody services as an early
access program for clients. Our product set
helps support this ecosystem, and we are now
the custodian for reserves backing payment
stablecoins for Anchorage Digital Bank, the first
U.S. crypto-native bank with a federal charter.
14 U.S. Bancorp Annual Report 2025 | usbank.com/AR2025
OUR STRENGTHS:
Leaning into strengths
and building new
foundational capabilities
U.S. Bancorp continues to demonstrate strength and stability, earning the
trust of customers and stakeholders. Through proactive planning and ongoing
investments in infrastructure, we are well positioned for growth.
Strong capital position
We are preparing for our eventual transition to a Category II banking organization. Part of our planning
is building on our strong risk management capabilities, balance sheet management program and
“through-the-cycle” earnings power. Our capital base is strong and growing thanks to enhanced earnings
generation, and our CET1 capital ratio is 10.8% – up from 8.4% when the 2022 acquisition of Union Bank
closed. In addition, we have a strong liquidity coverage ratio and more than $300 billion of total available
liquidity at the end of 2025.
Best-in-class underwriting
We have routinely been recognized for our robust underwriting processes, which balance thorough risk
assessment with efficient decision-making. We use advanced analytics and experienced underwriters
to support sound credit judgments. By consistently upholding stringent standards, we maintain strong
portfolio quality and demonstrate reliability.
Establishing enterprise-wide areas of expertise
As we prepare for the future, we are continually looking across the enterprise to determine what
new skills and capabilities are needed to meet changing expectations and client demands. In 2025,
we created new internal organizations to provide centers of expertise in areas like data strategy
(which is linked to our artificial intelligence and digital teams) and digital assets.
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with, and do not endorse the products or services of, U.S. Bancorp.
U.S. Bank received the second highest numerical score in the J.D. Power 2025 U.S. National Banking Satisfaction Study, which measures customers’
satisfaction from nationwide banks in the United States. Visit jdpower.com/awards for more details.
Best New Product:
U.S. Bank
Business Essentials
Tearsheet, 2025
Best Bank for SMBs:
U.S. Bank
Tearsheet, 2025
Best-in-class Mobile Banking
and Online Banking
Javelin Strategy
& Research, 2025
#1
Mobile App
in Banking
Keynova Group, 2025
#2
In overall customer
satisfaction among
national banks
J.D. Power, 2025
15
OUR CULTURE:
Reorienting the
organization for performance
Our culture sets us apart. By fostering an environment that supports career growth,
partnering with local organizations, and access to financial services for all, we are
building a stronger company and helping to create more vibrant, thriving communities.
16 U.S. Bancorp Annual Report 2025 | usbank.com/AR2025
17
Delivering through Impact Finance
U.S. Bancorp Impact Finance had another record year,
delivering capabilities central to our fee income portfolio
and supporting clients and communities.
Through tax credit investments, syndications, and lending
solutions, the organization supports affordable housing,
economic growth, historic building restoration, renewable
energy, and community development financial institutions.
The highlights we were most proud of last year included
a 95-unit affordable housing build in Vancouver, Washington,
a factory rehab in St. Louis, and two solar projects in
California powering about 94,000 homes annually.
Continued growth in
small business lending
We invested in our communities and saw record growth in
U.S. Small Business Administration (SBA) lending in fiscal
year 2025. For the SBA fiscal year ending on Sept. 30, 2025,
we made 3,453 SBA 7(a) loans, ranking fourth in number
of loans. We increased our total volume of SBA 7(a) loans
by 23% from fiscal year 2024, totaling $871.2 million and
ranking sixth among all lenders.
A 43-unit affordable
housing development
for seniors in Huntington
Beach, California, which
celebrated a grand opening
in 2025. U.S. Bancorp
Impact Finance was the tax
credit investor and lender
on the project.
Life at U.S. Bank
Our people drive innovation, deliver exceptional experiences,
and help clients reach their goals. Investing in their growth
helps our business succeed.
In September, more than 10,600 team members participated
in Development Week, a company-wide skill-building initiative
that included sessions focused on topics like communications,
strategy and helping team members grow.
We also launched foundational AI courses in our online Skills
Academy, empowering team members to explore AI solutions
and use them responsibly. This supports our commitment to
continuous learning and high performance.
Community driven
+10K
team members
took part in
Development Week
$111.7M
in corporate contributions
and foundation grants
257K
of employee volunteer hours
2M
individuals served
with financial
education, with
focus on low- to
moderate-income
communities
$3.9B
in affordable housing
tax equity and loans
$722.5M
committed to CDFIs
and other intermediaries2
18 U.S. Bancorp Annual Report 2025 | usbank.com/AR2025
U.S. Bank Foundation Opportunity Fund grants
We support the communities we serve in various ways, including
through the U.S. Bank Foundation1, which awarded $15 million
in grants from the Opportunity Fund in 2025. This five-year, $75
million charitable fund aims to boost wealth-building for low- to
moderate-income communities by aiding nonprofits focused on
small businesses, homeownership, affordable housing, digital
access and workforce development.
In 2025, several grants funded nonprofit programs for disaster
relief in Los Angeles and St. Louis, helping communities affected by
wildfires and tornadoes. Supported organizations included Habitat
for Humanity, Neighborhood Housing Services Los Angeles County,
The Center by Lendistry, and Invest STL.
1. U.S. Bank Foundation is a tax-exempt private foundation under section 501(c)(3) of the Internal Revenue Code. The Foundation is funded primarily
through contributions from U.S. Bancorp’s affiliates and subsidiaries. The Foundation’s mission is to close the gaps between people and possibility
in the areas of work, home and play.
2. Figure represents total 2025 loans, equity investments, foundation grants and corporate contributions.
By the numbers
MANAGING COMMITTEE
Dominic V.
Venturo
Senior Executive
Vice President
and Chief
Digital Officer
John C.
Stern
Vice Chair
and Chief
Financial Officer
Mark G.
Runkel
Vice Chair, Head of
Payments: Merchant
and Institutional
Arijit Roy
Senior Executive
Vice President, Head
of Consumer and
Business Banking
Products
Stephen L.
Philipson
Vice Chair, Head of
Wealth, Corporate,
Commercial and
Institutional Banking
Jodi L. Richard
Vice Chair and Chief
Risk Officer
Felicia La Forgia
Senior Executive
Vice President,
Head of the
Institutional
Client Group
James L.
Chosy
Senior Executive
Vice President
and General
Counsel
Gregory G.
Cunningham
Senior Executive Vice
President and Chief
Community Impact
and Inclusion Officer
Venkatachari Dilip
Senior Executive Vice
President and Chief
Information and
Technology Officer
Souheil S. Badran
Senior Executive
Vice President
and Chief
Operations Officer
Gunjan Kedia
Chief Executive
Officer and
President
Elcio R.T. Barcelos
Senior Executive
Vice President
and Chief Human
Resources Officer
Sekou Kaalund
Senior Executive
Vice President, Head
of Branch and Small
Business Banking
Courtney E. Kelso
Senior Executive Vice
President, Head of
Payments: Consumer
and Small Business
Adam C. Graves
Senior Executive
Vice President,
Head of Enterprise
Strategy and
Administration
19
John P. Wiehoff
Retired Chairman
and Chief
Executive Officer,
C.H. Robinson
Worldwide, Inc.
Aleem Gillani
Retired Corporate
Executive Vice
President and Chief
Financial Officer,
SunTrust Banks, Inc.
Kimberly N.
Ellison-Taylor
Founder and Chief
Executive Officer,
KET Solutions, LLC
Roland A. Hernandez
Founding Principal
and Chief Executive
Officer, Hernandez
Media Ventures (Lead
Independent Director)
Loretta E. Reynolds
Founder and Chief
Executive Officer,
LEReynolds Group, LLC
Richard P.
McKenney
President and Chief
Executive Officer,
Unum Group
Yusuf I. Mehdi
Executive Vice
President, Consumer
Chief Marketing
Officer, Microsoft
Corporation
Andrew Cecere
Executive Chairman
and Former Chief
Executive Officer,
U.S. Bancorp
Gunjan Kedia
Chief Executive
Officer and
President,
U.S. Bancorp
Warner L. Baxter
Retired Executive
Chairman and Former
Chairman, President and
Chief Executive Officer,
Ameren Corporation
Alan B. Colberg
Retired President
and Chief
Executive Officer,
Assurant, Inc.
Dorothy Bridges
Chief Executive
Officer, Metropolitan
Economic
Development
Association (Meda)
Elizabeth L.
Buse
Former Chief
Executive Officer,
Monitise plc
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BOARD OF DIRECTORS
20 U.S. Bancorp Annual Report 2025 | usbank.com/AR2025
Website references and/or links throughout this report are provided for convenience only, and the content of such websites is not incorporated by reference
to this report.
The following information appears in accordance with the Private Securities Litigation Reform Act of 1995:
This report contains forward-looking statements about U.S.
Bancorp. Statements that are not historical or current facts,
including statements about beliefs and expectations, are forward-
looking statements and are based on the information available to,
and assumptions and estimates made by, management as of the
date hereof. These forward-looking statements cover, among other
things, future economic conditions and the anticipated future
revenue, expenses, financial condition, asset quality, capital and
liquidity levels, plans, prospects, targets, initiatives and operations
of U.S. Bancorp. Forward-looking statements often use words such
as “anticipates,” “targets,” “expects,” “hopes,” “estimates,”
“projects,” “forecasts,” “intends,” “plans,” “goals,” “believes,”
“continue” and other similar expressions or future or conditional
verbs such as “will,” “may,” “might,” “should,” “would” and “could.”
Forward-looking statements involve inherent risks and uncertainties
that could cause actual results to differ materially from those set
forth in forward-looking statements, including the following risks
and uncertainties:
• Deterioration in general business, political and economic
conditions or turbulence in domestic or global financial markets,
which could adversely affect U.S. Bancorp’s revenues and the
values of its assets and liabilities, reduce the availability of funding
to certain financial institutions, lead to a tightening of credit, and
increase stock price volatility;
• Changes to statutes, regulations, or regulatory policies or
practices, including capital and liquidity requirements and any
credit card interest rate caps, and the enforcement and
interpretation of such laws and regulations, and U.S. Bancorp’s
ability to address or satisfy those requirements and other
requirements or conditions imposed by regulatory entities;
• Changes in trade policy, including the imposition of tariffs or the
impacts of retaliatory tariffs;
• Changes in interest rates;
• Increases in unemployment rates;
• Deterioration in the credit quality of U.S. Bancorp's loan portfolios
or in the value of the collateral securing those loans;
• Changes in commercial real estate occupancy rates;
• Increases in Federal Deposit Insurance Corporation (“FDIC”)
assessments, including due to bank failures;
• Actions taken by governmental agencies to stabilize or reform the
financial system and the effectiveness of such actions;
• Turmoil and volatility in the financial services industry;
• Risks related to originating and selling mortgages, including
repurchase and indemnity demands, and related to U.S.
Bancorp’s role as a loan servicer;
• Impacts of current, pending or future litigation and governmental
proceedings;
• Increased competitive pressure;
• Effects of climate change and related physical and transition risks;
• Changes in customer behavior and preferences and the ability to
implement technological changes to respond to customer needs
and meet competitive demands;
• Breaches in data security;
• Failures or disruptions in or breaches of U.S. Bancorp’s
operational, technology or security systems or infrastructure, or
those of third parties, including as a result of cybersecurity
incidents;
• Failures to safeguard personal information;
• Impacts of pandemics, natural disasters, terrorist activities, civil
unrest, international hostilities and geopolitical events;
• Impacts of supply chain disruptions, rising inflation, slower growth
or a recession;
• Failure to execute on strategic or operational plans;
• Effects of mergers and acquisitions, such as the pending
acquisition of Condor Trading LP and its subsidiaries, including
BTIG, LLC (collectively, “BTIG”), and related integration, including
that the expected benefits may take longer than anticipated to
achieve or may not be achieved in entirety or at all and the costs
relating to the combination may be greater than expected;
• Effects of critical accounting policies and judgments;
• Effects of changes in or interpretations of tax laws and
regulations;
• Management’s ability to effectively manage credit risk, market
risk, operational risk, compliance risk, strategic risk, interest rate
risk and liquidity risk; and
• The risks and uncertainties more fully discussed in the section
entitled “Risk Factors” of this report.
Factors other than these risks also could adversely affect U.S.
Bancorp’s results, and the reader should not consider these risks to
be a complete set of all potential risks or uncertainties. Readers are
cautioned not to place undue reliance on any forward-looking
statements. Forward-looking statements speak only as of the date
hereof, and U.S. Bancorp undertakes no obligation to update them
in light of new information or future events.
Table of Contents
22 Management’s Discussion and Analysis
22 Overview
24 Statement of Income Analysis
27 Balance Sheet Analysis
31 Corporate Risk Profile
31 Overview
32 Credit Risk Management
44 Residual Value Risk Management
44 Operational Risk Management
44 Compliance Risk Management
44 Strategic Risk Management
45 Interest Rate Risk Management
46 Market Risk Management
47 Liquidity Risk Management
50 Capital Management
53 Business Segment Financial Review
54 Non-GAAP Financial Measures
57 Accounting Changes
57 Critical Accounting Policies
59 Controls and Procedures
60 Reports of Management and Independent Accountants
64 Consolidated Financial Statements and Notes
133 Consolidated Daily Average Balance Sheet and Related
Yields and Rates
134 Supplemental Financial Data
135 Company Information
135 Risk Factors
151 Managing Committee
153 Directors
21
Management’s Discussion and Analysis
Overview
U.S. Bancorp and its subsidiaries (the “Company”)
achieved new business momentum in 2025 and continued
to demonstrate its well-diversified business model.
Financial results for 2025 included fee revenue growth,
prudent expense management, and stable credit quality
and capital levels, which led to strong earnings per share
growth compared to the prior year. During 2025, the
Company continued to expand interconnectedness across
its businesses, resulting in strong organic growth and
deeper relationships with its customers.
Financial Performance The Company earned $7.6 billion
in 2025 compared with $6.3 billion in 2024.
Financial performance for 2025, compared with 2024,
included the following:
• Diluted earnings per common share of $4.62 in 2025,
representing a 21.9 percent increase compared with
2024;
• Net interest income increased $360 million (2.2 percent)
primarily due to loan growth, fixed asset repricing and
lower rates paid on interest-bearing deposits;
• Noninterest income increased $845 million (7.6 percent)
driven by higher revenue across most categories;
• Noninterest expense decreased $351 million (2.0
percent), reflecting the impact of merger and integration
charges in the prior year, lower compensation and
employee benefits expense and other noninterest
expense, partially offset by higher technology and
communications expense and marketing and business
development expense;
• Average loans increased $6.4 billion (1.7 percent) driven
by increases in commercial loans and credit card loans,
partially offset by decreases in commercial real estate
loans and other retail loans; and
• Average deposits decreased $397 million (0.1 percent),
driven by decreases in noninterest-bearing deposits and
time deposits, partially offset by an increase in total
savings deposits.
Credit Quality The Company maintained stable credit
quality during 2025.
• The allowance for credit losses was $7.9 billion at
December 31, 2025, relatively flat compared to
December 31, 2024. The ratio of the allowance for credit
losses to period-end loans improved to 2.03 percent at
December 31, 2025 compared to 2.09 percent at
December 31, 2024.
• The provision for credit losses decreased $52 million (2.3
percent), reflecting improved credit quality and the
impact of loan sales during the second quarter of 2025,
partially offset by loan growth.
• Nonperforming assets were $1.6 billion at December 31,
2025, a decrease of $242 million (13.2 percent)
compared with December 31, 2024, driven by lower
nonperforming commercial real estate loans.
• Net charge-offs were $2.2 billion in 2025, reflecting a $12
million (0.6 percent) increase compared to 2024.
• Total loan net charge-offs as a percentage of average
loans was 0.57 percent in 2025, compared with 0.58
percent in 2024.
Capital Management At December 31, 2025, all of the
Company’s regulatory capital ratios exceeded regulatory
“well-capitalized” requirements.
• The Company’s common equity tier 1 capital ratio was
10.8 percent at December 31, 2025, an increase of 20
basis points from December 31, 2024.
• The Company returned $3.7 billion of earnings to
shareholders in 2025 through dividends and share
repurchases.
Earnings Summary The Company reported net income
attributable to U.S. Bancorp of $7.6 billion in 2025, or $4.62
per diluted common share, compared with $6.3 billion, or
$3.79 per diluted common share, in 2024. Return on
average assets and return on average common equity were
1.12 percent and 13.0 percent, respectively, in 2025,
compared with 0.95 percent and 11.7 percent,
respectively, in 2024. The results for 2024 included the
impact of $400 million ($300 million net-of-tax) of notable
items, including $155 million of merger and integration
charges associated with the 2022 acquisition of MUFG
Union Bank, N.A. (“MUB”), $136 million of incremental FDIC
special assessment charges and $109 million of charges
related to lease impairments and operational efficiency
actions. Combined, these items decreased 2024 diluted
earnings per common share by $0.19.
Total net revenue for 2025 was $1.2 billion (4.4 percent)
higher than 2024, reflecting a 2.2 percent increase in net
interest income and a 7.6 percent increase in noninterest
income. The increase in net interest income from the prior
year was primarily due to loan growth, fixed asset repricing
and lower rates paid on interest-bearing deposits. The
increase in noninterest income was driven by higher
revenue across most categories.
Noninterest expense in 2025 was $351 million (2.0
percent) lower than 2024, primarily due to the impact of
merger and integration charges in the prior year, lower
compensation and employee benefits expense and other
noninterest expense, partially offset by higher technology
and communications expense and marketing and business
development expense.
22 U.S. Bancorp 2025 Annual Report
TABLE 1 Selected Financial Data
Year Ended December 31
(Dollars and Shares in Millions, Except Per Share Data)
2025
2024
2023
Condensed Income Statement
Net interest income
$ 16,649
$ 16,289
$ 17,396
Taxable-equivalent adjustment(a)
116
120
131
Net interest income (taxable-equivalent basis)(b)
16,765
16,409
17,527
Noninterest income
11,891
11,046
10,617
Total net revenue
28,656
27,455
28,144
Noninterest expense
16,837
17,188
18,873
Provision for credit losses
2,186
2,238
2,275
Income before taxes
9,633
8,029
6,996
Income taxes and taxable-equivalent adjustment
2,037
1,700
1,538
Net income
7,596
6,329
5,458
Net (income) loss attributable to noncontrolling interests
(26)
(30)
(29)
Net income attributable to U.S. Bancorp
$
7,570
$
6,299
$
5,429
Net income applicable to U.S. Bancorp common shareholders
$
7,194
$
5,909
$
5,051
Per Common Share
Earnings per share
$
4.62
$
3.79
$
3.27
Diluted earnings per share
4.62
3.79
3.27
Dividends declared per share
2.04
1.98
1.93
Book value per share(c)
37.55
33.19
31.13
Tangible book value per share(b)
29.12
24.63
22.30
Market value per share
53.36
47.83
43.28
Average diluted common shares outstanding
1,558
1,561
1,543
Financial Ratios
Return on average assets
1.12 %
.95 %
.82 %
Return on average common equity
13.0
11.7
10.8
Return on tangible common equity(b)
18.1
17.2
16.9
Net interest margin (taxable-equivalent basis)(a)
2.72
2.70
2.90
Efficiency ratio(b)
58.6
62.3
66.7
Average Balances
Loans
$ 380,260
$ 373,875
$ 381,275
Investment securities(d)
172,376
166,634
162,757
Assets
676,540
664,014
663,440
Deposits
509,118
509,515
505,663
Long-term debt
61,376
54,473
44,142
Period End Balances
Loans
$ 391,335
$ 379,832
$ 373,835
Investment securities
167,008
164,626
153,751
Assets
692,345
678,318
663,491
Deposits
522,216
518,309
512,312
Long-term debt
60,764
58,002
51,480
Total U.S. Bancorp shareholders’ equity
65,193
58,578
55,306
Credit Quality
Allowance for credit losses
$
7,947
$
7,925
$
7,839
Nonperforming assets
1,590
1,832
1,494
Net charge-offs as a percent of average loans outstanding
.57
.58
.50
Capital Ratios
Common equity tier 1 capital
10.8 %
10.6 %
9.9 %
Tier 1 capital
12.3
12.2
11.5
Total risk-based capital
14.2
14.3
13.7
Leverage
8.7
8.3
8.1
Total leverage exposure
7.1
6.8
6.6
Tangible common equity to tangible assets(b)
6.7
5.8
5.3
Tangible common equity to risk-weighted assets(b)
9.4
8.5
7.7
(a) Based on a federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes.
(b) See Non-GAAP Financial Measures beginning on page 54.
(c) Calculated as U.S. Bancorp common shareholders’ equity divided by common shares outstanding at end of the period.
(d) Excludes unrealized gains and losses on available-for-sale investment securities.
23
Results for 2024 Compared With 2023 For discussion
related to changes in financial condition and results of
operations for 2024 compared with 2023, refer to
“Management’s Discussion and Analysis” in the Company’s
Annual Report for the year ended December 31, 2024,
included as Exhibit 13 to the Company’s Form 10-K filed
with the Securities and Exchange Commission ("SEC") on
February 21, 2025.
Pending acquisition of BTIG In January 2026, the
Company announced that it entered into a definitive
agreement to acquire BTIG for a purchase price of up to $1
billion, consisting of a targeted amount of $725 million
($362.5 million of cash and 6,600,594 shares of the
Company’s common stock) to be paid at closing and up to
an additional $275 million of cash consideration payable
over three years, subject to achievement of defined
performance targets. BTIG is a global financial services
firm specializing in institutional trading, investment banking,
research and related brokerage services. The transaction is
expected to close in the second quarter of 2026, subject to
regulatory approvals and satisfaction of applicable closing
conditions.
Statement of Income Analysis
Net Interest Income Net interest income, on a taxable-
equivalent basis, was $16.8 billion in 2025, compared with
$16.4 billion in 2024. The $356 million (2.2 percent)
increase in 2025 compared with 2024 was primarily due to
loan growth, fixed asset repricing and lower rates paid on
interest-bearing deposits. Average earning assets were
$8.7 billion (1.4 percent) higher in 2025, compared with
2024, reflecting increases in loans, investment securities
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 2025 was 2.72
percent, compared with 2.70 percent in 2024. The increase
in the net interest margin in 2025, compared with 2024, was
primarily due to improved asset mix and fixed asset
repricing, partially offset by deposit mix. Refer to the
“Interest Rate Risk Management” section for further
information on the sensitivity of the Company’s net interest
income to changes in interest rates.
TABLE 2 Analysis of Net Interest Income(a)
Year Ended December 31 (Dollars in Millions)
2025
2024
2023
2025
v 2024
2024
v 2023
Components of Net Interest Income
Income on earning assets (taxable-equivalent basis)
$ 31,086
$ 31,789
$ 30,144
$
(703)
$ 1,645
Expense on interest-bearing liabilities (taxable-equivalent basis)
14,321
15,380
12,617
(1,059)
2,763
Net interest income (taxable-equivalent basis)(b)
$ 16,765
$ 16,409
$ 17,527
$
356
$ (1,118)
Net interest income, as reported
$ 16,649
$ 16,289
$ 17,396
$
360
$ (1,107)
Average Yields and Rates Paid
Earning assets yield (taxable-equivalent basis)
5.05 %
5.24 %
4.98 %
(.19) %
.26 %
Rate paid on interest-bearing liabilities (taxable-equivalent basis)
2.82
3.09
2.65
(.27)
.44
Gross interest margin (taxable-equivalent basis)
2.23 %
2.15 %
2.33 %
.08 %
(.18) %
Net interest margin (taxable-equivalent basis)
2.72 %
2.70 %
2.90 %
.02 %
(.20) %
Average Balances
Investment securities(c)
$ 172,376
$ 166,634
$ 162,757
$ 5,742
$ 3,877
Loans
380,260
373,875
381,275
6,385
(7,400)
Earning assets
615,360
606,641
605,199
8,719
1,442
Noninterest-bearing deposits
80,508
83,007
107,768
(2,499)
(24,761)
Interest-bearing deposits
428,610
426,508
397,895
2,102
28,613
Total deposits
509,118
509,515
505,663
(397)
3,852
Interest-bearing liabilities
508,331
498,182
476,178
10,149
22,004
(a) Interest and rates are presented on a fully taxable-equivalent basis based on a federal income tax rate of 21 percent.
(b) See Non-GAAP Financial Measures beginning on page 54.
(c) Excludes unrealized gains and losses on available-for-sale investment securities.
24 U.S. Bancorp 2025 Annual Report
Average total loans were $380.3 billion in 2025,
compared with $373.9 billion in 2024. The $6.4 billion (1.7
percent) increase was primarily due to higher commercial
loans and credit card loans, partially offset by lower
commercial real estate loans and other retail loans.
Average commercial loans increased $11.3 billion (8.5
percent), primarily due to growth in loans to financial
institutions. Average credit card loans increased $1.4 billion
(4.9 percent) primarily due to higher sales volume. Average
commercial real estate loans decreased $3.1 billion (6.1
percent), primarily due to payoffs and loan workout
activities. Average other retail loans decreased $2.3 billion
(5.4 percent), driven by lower automobile loans, including
the impact of a portfolio sale during the second quarter of
2025. Average residential mortgages decreased $882
million (0.8 percent), primarily due to a portfolio sale in the
second quarter of 2025.
Average investment securities in 2025 were $5.7 billion
(3.4 percent) higher than in 2024.
Average total deposits for 2025 were $397 million (0.1
percent) lower than 2024. Average noninterest-bearing
deposits were $2.5 billion (3.0 percent) lower in 2025,
compared with 2024, driven by lower balances within
Consumer and Business Banking, as well as Wealth,
Corporate, Commercial and Institutional Banking. Average
time deposits for 2025 were $2.1 billion (3.6 percent) lower
than 2024, primarily due to a decrease 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 total savings deposits were $4.2
billion (1.1 percent) higher in 2025, compared with 2024,
driven by an increase in Wealth, Corporate, Commercial
and Institutional Banking balances.
TABLE 3 Net Interest Income — Changes Due to Rate and Volume(a)
2025 v 2024
2024 v 2023
Year Ended December 31 (Dollars in Millions)
Volume Yield/Rate
Total
Volume Yield/Rate
Total
Increase (decrease) in
Interest Income
Investment securities
$
179 $
106 $
285 $
109 $
514 $
623
Loans held for sale
26
(34)
(8)
5
21
26
Loans
Commercial
738 (1,089)
(351)
(94)
149
55
Commercial real estate
(202)
(226)
(428)
(185)
127
(58)
Residential mortgages
(34)
113
79
41
231
272
Credit card
188
(62)
126
273
113
386
Other retail
(141)
69
(72)
(325)
345
20
Total loans
549 (1,195)
(646)
(290)
965
675
Interest-bearing deposits with banks
(389)
(488)
(877)
117
46
163
Other earning assets
176
367
543
130
28
158
Total earning assets
541 (1,244)
(703)
71
1,574
1,645
Interest Expense
Interest-bearing deposits
Interest checking
55
21
76
(41)
212
171
Money market savings
(728)
(1,292)
(2,020)
1,300
626
1,926
Savings accounts
81
754
835
(26)
101
75
Time deposits
(88)
(340)
(428)
375
366
741
Total interest-bearing deposits
(680)
(857)
(1,537)
1,608
1,305
2,913
Short-term borrowings
74
190
264
(981)
113
(868)
Long-term debt
327
(113)
214
436
282
718
Total interest-bearing liabilities
(279)
(780)
(1,059)
1,063
1,700
2,763
Increase (decrease) in net interest income
$
820 $
(464) $
356 $
(992) $
(126) $ (1,118)
(a) This table shows the components of the change in net interest income by volume and rate on a taxable-equivalent basis based on a federal income tax rate of 21 percent. This
table does not take into account the level of noninterest-bearing funding, nor does it fully reflect changes in the mix of assets and liabilities. The change in interest not solely due to
changes in volume or rates has been allocated on a pro-rata basis to volume and yield/rate.
25
Provision for Credit Losses The provision for credit losses
reflects changes in economic conditions and the size and
credit quality of the entire portfolio of loans. The Company
maintains an allowance for credit losses considered
appropriate by management for expected losses, based on
factors discussed in the “Analysis and Determination of the
Allowance for Credit Losses” section.
The provision for credit losses was $2.2 billion in 2025,
representing a $52 million (2.3 percent) decrease from
2024. The decrease from the prior year was primarily driven
by improved credit quality and the impact of loan sales
during the second quarter of 2025, partially offset by loan
growth. Net charge-offs increased $12 million (0.6 percent)
in 2025, compared with 2024, reflecting higher other retail
loan net charge-offs, partially offset by lower commercial
real estate 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 in 2025 was $11.9
billion, compared with $11.0 billion in 2024. The $845
million (7.6 percent) increase in 2025 from 2024 reflected
higher trust and investment management fees, payment
services revenue, capital markets revenue, other
noninterest income and lower losses on the sales of
investment securities. Trust and investment management
fees increased primarily due to business growth and
favorable market conditions. Payment services revenue
increased primarily driven by higher merchant processing
services revenue and card revenue, both driven by higher
sales volume. Capital markets revenue increased primarily
due to higher syndication activity, commercial loan fees
and trading revenue. Other noninterest income increased
primarily due to higher tax credit investment activity.
TABLE 4 Noninterest Income
Year Ended December 31 (Dollars in Millions)
2025
2024
2023
2025
v 2024
2024
v 2023
Card revenue
$ 1,735 $ 1,679 $ 1,630
3.3 %
3.0 %
Corporate payment products revenue
765
773
759
(1.0)
1.8
Merchant processing services
1,792
1,714
1,659
4.6
3.3
Trust and investment management fees
2,869
2,660
2,459
7.9
8.2
Service charges
1,302
1,253
1,306
3.9
(4.1)
Capital markets revenue
1,633
1,523
1,372
7.2
11.0
Mortgage banking revenue
645
627
540
2.9
16.1
Investment products fees
375
330
279
13.6
18.3
Other
836
641
758
30.4
(15.4)
Total fee revenue
11,952 11,200 10,762
6.7
4.1
Securities gains (losses), net
(61)
(154)
(145)
60.4
(6.2)
Total noninterest income
$11,891 $11,046 $10,617
7.6 %
4.0 %
TABLE 5 Noninterest Expense
Year Ended December 31 (Dollars in Millions)
2025
2024
2023
2025
v 2024
2024
v 2023
Compensation and employee benefits
$10,327
$10,554
$10,416
(2.2) %
1.3 %
Net occupancy and equipment
1,227
1,246
1,266
(1.5)
(1.6)
Professional services
468
491
560
(4.7)
(12.3)
Marketing and business development
705
619
726
13.9
(14.7)
Technology and communications
2,211
2,074
2,049
6.6
1.2
Other intangibles
498
569
636
(12.5)
(10.5)
Other
1,401
1,480
2,211
(5.3)
(33.1)
Total before merger and integration charges
16,837
17,033
17,864
(1.2)
(4.7)
Merger and integration charges
—
155
1,009
*
(84.6)
Total noninterest expense
$16,837
$17,188
$18,873
(2.0) %
(8.9) %
Efficiency ratio(a)
58.6 %
62.3 %
66.7 %
*
Not meaningful
(a) See Non-GAAP Financial Measures beginning on page 54.
26 U.S. Bancorp 2025 Annual Report
Noninterest Expense Noninterest expense in 2025 was
$16.8 billion, compared with $17.2 billion in 2024. The $351
million (2.0 percent) decrease in noninterest expense in
2025, compared to 2024, reflected the impact of merger
and integration charges in the prior year, lower
compensation and employee benefits expense and other
noninterest expense, partially offset by higher technology
and communications expense and marketing and business
development 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 in the prior year of the FDIC special
assessment. Technology and communications expense
increased primarily due to investments in infrastructure and
technology development. Marketing and business
development expense increased primarily due to increased
initiatives in 2025.
Income Tax Expense The provision for income taxes was
$1.9 billion (an effective rate of 20.2 percent) in 2025,
compared with $1.6 billion (an effective rate of 20.0
percent) in 2024.
For further information on income taxes, refer to Note 18
of the Notes to Consolidated Financial Statements.
Balance Sheet Analysis
Average earning assets were $615.4 billion in 2025,
compared with $606.6 billion in 2024. The increase in
average earning assets of $8.7 billion (1.4 percent) was
primarily due to increases in loans of $6.4 billion (1.7
percent), investment securities of $5.7 billion (3.4 percent)
and other earning assets of $3.5 billion (28.0 percent),
partially offset by a decrease in interest-bearing deposits
with banks of $7.3 billion (14.2 percent). For average
balance information, refer to "Net Interest Income" in the
Statement of Income Analysis section and Consolidated
Daily Average Balance Sheet and Related Yields and Rates
on page 133.
Loans The Company’s loan portfolio was $391.3 billion at
December 31, 2025, compared with $379.8 billion at
December 31, 2024. The increase of $11.5 billion (3.0
percent) was driven by higher commercial loans and credit
card loans, partially offset by lower residential mortgages
and other retail loans. Table 6 provides a summary of the
loan distribution by product type, while Table 7 provides a
summary of the selected loan maturity distribution by loan
category.
Commercial loans increased $14.5 billion (10.4 percent)
at December 31, 2025, compared with December 31, 2024,
primarily due to growth in loans to financial institutions.
Credit card loans increased $1.9 billion (6.2 percent) at
December 31, 2025, compared with December 31, 2024,
primarily driven by higher sales volume.
Commercial real estate loans were $48.9 billion at
December 31, 2025, relatively flat compared with
December 31, 2024.
Residential mortgages held in the loan portfolio
decreased $2.9 billion (2.5 percent) at December 31, 2025,
compared to December 31, 2024, primarily driven by a
portfolio sale in the second quarter of 2025. 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.
Other retail loans decreased $2.0 billion (4.7 percent) at
December 31, 2025, compared with December 31, 2024,
primarily due to a decrease in automobile loans, including
the impact of a portfolio sale during the second quarter of
2025.
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 $2.5 billion at December 31, 2025,
compared with $2.6 billion at December 31, 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”).
27
TABLE 6 Loan Portfolio Distribution
2025
2024
At December 31 (Dollars in Millions)
Amount
Percent
of Total
Amount
Percent
of Total
Commercial
Commercial
$ 149,522
38.2 % $ 135,254
35.6 %
Lease financing
4,436
1.2
4,230
1.1
Total commercial
153,958
39.4
139,484
36.7
Commercial Real Estate
Commercial mortgages
39,476
10.1
38,619
10.2
Construction and development
9,444
2.4
10,240
2.7
Total commercial real estate
48,920
12.5
48,859
12.9
Residential Mortgages
Residential mortgages
110,788
28.3
112,806
29.7
Home equity loans, first liens
5,097
1.3
6,007
1.6
Total residential mortgages
115,885
29.6
118,813
31.3
Credit Card
32,234
8.2
30,350
8.0
Other Retail
Retail leasing
3,524
.9
4,040
1.0
Home equity and second mortgages
14,025
3.6
13,565
3.6
Revolving credit
4,561
1.2
3,747
1.0
Installment
14,653
3.7
14,373
3.8
Automobile
3,575
.9
6,601
1.7
Total other retail
40,338
10.3
42,326
11.1
Total loans
$ 391,335
100.0 % $ 379,832
100.0 %
TABLE 7 Selected Loan Maturity Distribution
At December 31, 2025 (Dollars in Millions)
One Year
or Less
Over One
Through
Five Years
Over Five
Through
Fifteen Years
Over Fifteen
Years
Total
Commercial
$
39,316 $
97,074 $
17,220 $
348
$
153,958
Commercial real estate
13,820
21,572
4,914
8,614 (a)
48,920
Residential mortgages
265
2,967
5,794
106,859
115,885
Credit card
32,234
—
—
—
32,234
Other retail
1,453
6,531
14,263
18,091
40,338
Total loans
$
87,088 $
128,144 $
42,191 $
133,912
$
391,335
Total of loans due after one year with:
Predetermined
Interest Rates
Floating
Interest Rates
Commercial
$
15,158
$
99,484
Commercial real estate
10,493
24,607
Residential mortgages
57,173
58,447
Credit card
—
—
Other retail
25,502
13,383
Total
$
108,326
$
195,921
(a) Primarily represents construction loans for single-family residences or loans guaranteed by the Small Business Administration.
28 U.S. Bancorp 2025 Annual Report
TABLE 8 Investment Securities
2025
2024
At December 31 (Dollars in Millions)
Amortized
Cost
Fair Value
Weighted-
Average
Maturity in
Years
Weighted-
Average
Yield(e)
Amortized
Cost
Fair Value
Weighted-
Average
Maturity in
Years
Weighted-
Average
Yield(e)
Held-to-Maturity
U.S. Treasury and agencies
$
648 $
644
1.3
3.00 % $ 1,296 $ 1,275
1.3
2.85 %
Mortgage-backed securities(a)
75,235 66,146
8.0
2.34
77,094 64,753
8.8
2.19
Other
287
289
1.5
2.63
244
247
2.2
2.73
Total held-to-maturity
$ 76,170 $ 67,079
7.9
2.34 % $ 78,634 $ 66,275
8.7
2.20 %
Available-for-Sale
U.S. Treasury and agencies
$ 30,098 $ 28,770
4.0
2.61 % $ 30,467 $ 28,387
5.1
2.98 %
Mortgage-backed securities(a)
47,776 45,759
5.8
3.91
44,238 40,638
7.4
3.82
Asset-backed securities(a)
6,512
6,527
4.2
4.94
7,136
7,165
3.8
5.56
Obligations of state and political subdivisions(b)(c)
10,387
9,514
9.7
3.66
10,690
9,552
11.7
3.72
Other
265
268
1.3
4.63
249
250
1.5
4.79
Total available-for-sale(d)
$ 95,038 $ 90,838
5.5
3.55 % $ 92,780 $ 85,992
6.8
3.67 %
(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 $185 million and $13 million at December 31, 2025 and 2024, respectively.
(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.
Investment Securities The Company uses its investment
securities portfolio to manage interest rate risk, provide
liquidity (including the ability to meet regulatory
requirements), generate interest and dividend income, and
serve as collateral for public deposits and wholesale
funding sources. While the Company intends to hold its
investment securities indefinitely, it may sell available-for-
sale investment securities in response to structural changes
in the balance sheet and related interest rate risk and to
meet liquidity requirements, among other factors.
Investment securities totaled $167.0 billion at
December 31, 2025, compared with $164.6 billion at
December 31, 2024. The $2.4 billion (1.4 percent) increase
was primarily due to a favorable change in net unrealized
gains (losses) on available-for-sale investment securities.
Investment securities by type are shown in Table 8.
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 December 31,
2025, the Company’s net unrealized losses on available-for-
sale investment securities were $4.4 billion ($3.3 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 $4.7 billion at December 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 December 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 4 and 21 in the Notes to Consolidated
Financial Statements for further information on investment
securities.
Deposits Total deposits were $522.2 billion at
December 31, 2025, compared with $518.3 billion at
December 31, 2024. The $3.9 billion (0.8 percent) increase
in total deposits reflected an increase in total savings
deposits, partially offset by a decrease in time deposits.
Total savings deposits increased $10.7 billion (2.8
percent) at December 31, 2025, compared with
December 31, 2024. The increase was driven by higher
savings account and interest checking deposit balances,
partially offset by lower money market deposit balances.
Savings account balances increased $20.3 billion (44.8
percent), driven by higher Consumer and Business
Banking balances. Interest checking balances increased
$5.0 billion (4.0 percent) primarily due to higher Wealth,
Corporate, Commercial and Institutional Banking balances.
Money market deposit balances decreased $14.7 billion
(7.1 percent), primarily due to lower Consumer and
Business Banking balances.
29
Time deposits decreased $6.7 billion (12.3 percent) at
December 31, 2025 compared with December 31, 2024,
driven by lower Treasury and Corporate Support 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.
Noninterest-bearing deposits were $84.1 billion at
December 31, 2025, relatively flat compared to
December 31, 2024.
TABLE 9 Deposits
The composition of deposits was as follows:
2025
2024
At December 31 (Dollars in Millions)
Amount
Percent
of Total
Amount
Percent
of Total
Noninterest-bearing deposits
$
84,116
16.1 % $
84,158
16.2 %
Interest-bearing deposits
Interest checking
132,217
25.3
127,188
24.5
Money market savings
192,118
36.8
206,805
39.9
Savings accounts
65,733
12.6
45,389
8.8
Total savings deposits
390,068
74.7
379,382
73.2
Domestic time deposits less than $250,000
34,177
6.5
39,297
7.6
Domestic time deposits greater than $250,000
13,385
2.6
14,552
2.8
Foreign time deposits
470
.1
920
.2
Total interest-bearing deposits
438,100
83.9
434,151
83.8
Total deposits(a)
$ 522,216
100.0 % $ 518,309
100.0 %
(a) Includes $273.5 billion and $259.9 billion of deposits at December 31, 2025 and 2024, respectively, that are not subject to any federal, state or foreign deposit insurance program.
The maturity of domestic time deposits in excess of the insurance limit and those time deposits not subject to any federal, state
or foreign deposit insurance program at December 31, 2025 was as follows:
(Dollars in Millions)
Domestic
Time
Deposits
Greater Than
$250,000
Foreign Time
Deposits
Total
Three months or less
$
7,320 $
470 $
7,790
Three months through six months
4,958
—
4,958
Six months through one year
839
—
839
Thereafter
268
—
268
Total
$
13,385 $
470 $
13,855
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 December 31, 2025,
compared with $15.5 billion at December 31, 2024. The
$1.6 billion (10.6 percent) increase in short-term borrowings
at December 31, 2025, compared with December 31, 2024,
was primarily due to increases in repurchase agreement
balances and other short-term borrowing balances, partially
offset by a decrease in short-term Federal Home Loan Bank
(“FHLB”) advances.
Long-term debt was $60.8 billion at December 31, 2025,
compared with $58.0 billion at December 31, 2024. The
$2.8 billion (4.8 percent) increase was primarily due to $5.0
billion of medium-term note issuances, $2.0 billion of bank
note issuances and $1.3 billion of credit-linked bank note
issuances, partially offset by $3.8 billion of medium-term
note and $2.5 billion of bank note repayments and
maturities.
Refer to Notes 12 and 13 of the Notes to Consolidated
Financial Statements for additional information regarding
short-term borrowings and long-term debt, and the
“Liquidity Risk Management” section for discussion of
liquidity management of the Company.
30 U.S. Bancorp 2025 Annual Report
Corporate Risk Profile
Overview Managing risks is an essential part of
successfully operating a financial services company. The
Company’s Board of Directors has approved a risk
management framework that establishes governance and
risk management requirements for all risk-taking activities.
This framework includes Company and business line risk
appetite statements that set boundaries for the types and
amount of risk that may be undertaken in pursuing business
objectives and initiatives. The Board of Directors, primarily
through its Risk Management Committee, oversees
performance relative to the risk management framework,
risk appetite statements, and other policy requirements.
The Executive Risk Committee (“ERC”), which is chaired
by the Chief Risk Officer and includes the Chief Executive
Officer and other members of the executive management
team, oversees execution against the risk management
framework and risk appetite statements. The ERC focuses
on current and emerging risks, including strategic risk, by
directing timely and comprehensive actions. Senior
operating committees have also been established, each
responsible for overseeing a specified category of risk.
The Company’s most prominent risk exposures are
credit, interest rate, market, liquidity, operational,
compliance, strategic, and reputation. Credit risk is the risk
of loss associated with a change in the credit profile or the
failure of a borrower or counterparty to meet its contractual
obligations. Interest rate risk is the current or prospective
risk to earnings and capital, arising from the impact of
changes in interest rates. Market risk is the risk associated
with fluctuations in interest rates, foreign exchange rates,
commodities and credit spreads that may result in changes
in the values of financial instruments, such as trading
securities, mortgage loans held for sale (“MLHFS”) and
mortgage servicing rights (“MSRs”). Liquidity risk is the risk
that financial condition or overall safety and soundness is
adversely affected by the Company’s inability, or perceived
inability, to meet its cash flow obligations in a timely and
complete manner in either normal or stressed conditions.
Operational risk is the risk to current or projected financial
condition and resilience arising from inadequate or failed
internal processes or systems, people (including human
errors or misconduct), or adverse external events, including
the risk of loss resulting from breaches in data security.
Operational risk can also include the risk of loss due to
failures by third parties with which the Company does
business. Compliance risk is the risk that the Company may
suffer legal or regulatory sanctions, financial losses, and
damage to its brand if it fails to adhere to compliance
requirements and the Company’s compliance policies.
Strategic risk is the risk to current or projected financial
condition and resilience arising from adverse business
decisions, poor implementation of business decisions, or
lack of responsiveness to changes in the banking industry
and operating environment. Reputation risk is the risk to
current or projected financial condition and resilience
arising from negative public opinion. In addition to the risks
identified above, other risk factors exist that may impact the
Company. Refer to “Risk Factors” beginning on page 135
for a detailed discussion of these factors.
The Company’s Board and management-level
governance committees are supported by a “three lines of
defense” model for establishing effective checks and
balances. The first line of defense, the business lines,
manages risks in conformity with established limits and
policy requirements. In turn, business line leaders and their
risk officers establish programs to ensure conformity with
these limits and policy requirements. The second line of
defense, which includes the Chief Risk Officer’s
organization as well as policy and oversight activities of
corporate support functions, translates risk appetite and
strategy into actionable risk limits and policies. The second
line of defense monitors first line of defense conformity with
limits and policies and provides reporting and escalation of
emerging risks and other concerns to senior management
and the Risk Management Committee of the Board of
Directors. The third line of defense, internal audit, is
responsible for providing the Audit Committee of the Board
of Directors and senior management with independent
assessment and assurance regarding the effectiveness of
the Company’s governance, risk management and control
processes.
Management regularly provides reports to the Risk
Management Committee of the Board of Directors. The Risk
Management Committee discusses with management the
Company’s risk management performance and provides a
summary of key risks to the entire Board of Directors,
covering the status of existing matters, areas of potential
future concern and specific information on certain types of
loss events. The Risk Management Committee considers
quarterly reports by management assessing the Company’s
performance relative to the risk appetite statements and the
associated risk limits, including:
• Macroeconomic environment and other qualitative
considerations, such as regulatory and compliance
changes, litigation developments, geopolitical events,
and technology and cybersecurity;
• Credit measures, including adversely rated and
nonperforming loans, leveraged transactions, credit
concentrations and lending limits;
• Interest rate and market risk, including market value and
net income simulation, and trading-related Value at Risk
(“VaR”);
• Liquidity risk, including funding projections under various
stressed scenarios;
• Operational and compliance risk, including losses
stemming from events such as fraud, processing errors,
control breaches, breaches in data security or adverse
business decisions, as well as reporting on technology
performance, and various legal and regulatory
compliance measures;
• Capital ratios and projections, including regulatory
measures and stressed scenarios; and
• Strategic and reputation risk considerations, impacts and
responses.
31
Credit Risk Management The Company’s strategy for
credit risk management includes well-defined, centralized
credit policies, uniform underwriting criteria, and ongoing
risk monitoring and review processes for all commercial
and consumer credit exposures. The strategy also
emphasizes diversification on a geographic, industry and
customer level, regular credit examinations and
management reviews of loans exhibiting deterioration of
credit quality. The Risk Management Committee oversees
the Company’s credit risk management process.
In addition, credit quality ratings, as defined by the
Company, are an important part of the Company’s overall
credit risk management and evaluation of its allowance for
credit losses. Loans with a pass rating represent those
loans not classified on the Company’s rating scale for
problem credits, as minimal credit risk has been identified.
Loans with a special mention or classified rating
encompass all loans held by the Company that it considers
having a potential or well-defined weakness that may put
full collection of contractual cash flows at risk. These are
defined by individually graded credit quality ratings for
larger corporate loans or scored based credit quality
ratings in consumer lending and small business loans.
Scored based credits classified as problem credits are
typically 90 days or more past due and still accruing,
nonaccrual loans or loans in a junior lien position that are
current but are behind a first lien position on nonaccrual.
Refer to Notes 1 and 5 in the Notes to Consolidated
Financial Statements for further discussion of the
Company’s loan portfolios including internal credit quality
ratings.
The Company categorizes its loan portfolio into two
segments, which is the level at which it develops and
documents a systematic methodology to determine the
allowance for credit losses. The Company’s two loan
portfolio segments are commercial lending and consumer
lending.
The commercial lending segment includes loans and
leases made to small business, middle market, large
corporate, commercial real estate, financial institution, non-
profit and public sector customers. Key risk characteristics
relevant to commercial lending segment loans include the
industry and geography of the borrower’s business,
purpose of the loan, repayment source, borrower’s debt
capacity and financial flexibility, loan covenants, and nature
of pledged collateral, if any, as well as macroeconomic
factors such as unemployment rates, corporate bond
spreads, commercial property prices and long-term interest
rates. These risk characteristics, among others, are
considered in determining estimates about the likelihood of
default by the borrowers and the severity of loss in the
event of default. The Company considers these risk
characteristics in assigning internal risk ratings to, or
forecasting losses on, these loans, which are the significant
factors in determining the allowance for credit losses for
loans in the commercial lending segment.
The consumer lending segment represents loans and
leases made to consumer customers, including residential
mortgages, credit card loans, and other retail loans such as
revolving consumer lines, auto loans and leases and home
equity loans and lines. Key risk characteristics relevant to
consumer lending segment loans primarily relate to the
borrowers’ capacity and willingness to repay, customer
payment history and credit scores and consider
macroeconomic factors such as unemployment rates, asset
and property prices, household debt levels, real disposable
income, the effect of higher interest rates on variable rate or
adjustable rate loans, and in some cases, updated loan-to-
value (“LTV”) information reflecting current market
conditions on secured loans. These and other risk
characteristics are reflected in forecasts of losses which
are the primary factors in determining the allowance for
credit losses for the consumer lending segment.
The Company further disaggregates its loan portfolio
segments into various classes based on their underlying
risk characteristics. The two classes within the commercial
lending segment are commercial loans and commercial
real estate loans. The three classes within the consumer
lending segment are residential mortgages, credit card
loans and other retail loans.
The Company utilizes a similar analysis by portfolio
class to estimate its liability for unfunded credit
commitments that are not unconditionally cancellable. The
Company also engages in non-lending activities that may
give rise to credit risk, including derivative transactions for
balance sheet hedging purposes, foreign exchange
transactions, deposit overdrafts, commodity contracts and
interest rate contracts for customers, investments in
securities and other financial assets, and settlement risk,
including Automated Clearing House transactions and the
processing of credit card transactions for merchants. These
activities are subject to credit review, analysis and approval
processes.
Credit Diversification The Company manages its credit
risk, in part, through diversification of its loan portfolio which
is achieved through limit setting by product type criteria,
such as industry and geography, and identification of credit
concentrations. As part of its normal business activities, the
Company offers a broad array of traditional commercial
lending products and specialized products such as asset-
based lending, commercial lease financing, agricultural
credit, warehouse mortgage lending, small business
lending, commercial real estate lending, health care
lending and correspondent banking financing. The
Company also offers an array of consumer lending
products, including residential mortgages, credit card
loans, auto loans, retail leases, home equity loans and
lines, revolving credit arrangements and other consumer
loans. These consumer lending products are primarily
offered through the branch office network, home mortgage
and loan production offices, mobile and online banking,
and indirect distribution channels, such as auto and
recreational vehicle dealers. The Company monitors and
manages the portfolio diversification by industry, customer
and geography. The Company has significant loan
exposure within California given its strategic position in
those markets and size of the economy.
The commercial loan class is diversified among various
industries with higher percentages in credit intermediaries,
asset management and real estate related. The Company
32 U.S. Bancorp 2025 Annual Report
finances the operations of real estate developers and other
entities with operations related to real estate. These loans
are not secured directly by real estate but have similar
characteristics to commercial real estate loans. These loans
are included in the commercial loan category and totaled
$17.6 billion and $15.4 billion at December 31, 2025 and
2024, respectively. Table 10 provides a summary of
significant industry groups of commercial loans outstanding
at December 31, 2025 and 2024.
The commercial real estate loan class reflects the
Company’s focus on serving businesses within its core
geographic footprint, as well as regional and national
investment-based real estate owners and developers.
Within the commercial real estate loan class, different
property types have varying degrees of credit risk. Table 11
provides a summary of the significant property types and
geographical locations of commercial real estate loans
outstanding at December 31, 2025 and 2024. Commercial
real estate loans are diversified among various property
types with higher percentages in multi-family and business
owner-occupied properties. The commercial real estate
office sector, which represented 8.8 percent of commercial
real estate loans at December 31, 2025, has pressured
credit quality metrics in this loan class. The Company
continued to monitor the commercial real estate office
portfolio and maintained an allowance to loan coverage
ratio of 9 percent at December 31, 2025, compared with 11
percent at December 31, 2024.
TABLE 10 Commercial Loans by Industry Group
2025
2024
At December 31 (Dollars in Millions)
Loans
Percent
of Total
Loans
Percent
of Total
Industry Group
Credit intermediaries
$
21,331
13.9 % $
17,473
12.5 %
Asset management
18,341
11.9
14,006
10.0
Real estate related
17,608
11.4
15,413
11.1
Services
9,253
6.0
9,742
7.0
Healthcare
7,375
4.8
6,871
4.9
Media and entertainment
6,645
4.3
6,267
4.5
Capital goods
5,844
3.8
4,673
3.4
Retail
5,481
3.6
5,191
3.7
Food and beverage
5,291
3.4
4,927
3.5
Autos
4,668
3.0
4,451
3.2
Power
4,538
3.0
3,952
2.8
Technology
4,431
2.9
3,693
2.7
Energy
4,062
2.6
3,577
2.6
Transportation
3,850
2.5
4,052
2.9
Building materials
3,732
2.4
3,029
2.2
Metals and mining
3,550
2.3
3,543
2.5
Other
27,958
18.2
28,624
20.5
Total
$ 153,958
100.0 % $ 139,484
100.0 %
33
TABLE 11 Commercial Real Estate Loans by Property Type and Geography
2025
2024
At December 31 (Dollars in Millions)
Loans
Percent
of Total
Loans
Percent
of Total
Property Type
Multi-family
$
18,670
38.2 % $
17,678
36.2 %
Business owner occupied
10,044
20.5
10,500
21.5
Industrial
5,629
11.5
4,791
9.8
Office
4,307
8.8
5,601
11.5
Retail
4,185
8.6
3,498
7.2
Residential land and development
3,406
7.0
3,659
7.5
Lodging
1,155
2.4
1,156
2.4
Other
1,524
3.0
1,976
3.9
Total
$
48,920
100.0 % $
48,859
100.0 %
Geography
California
$
17,900
36.6 % $
17,990
36.8 %
Washington
3,842
7.9
4,607
9.4
Texas
2,463
5.0
2,366
4.8
Florida
2,436
5.0
1,726
3.5
Oregon
1,592
3.3
1,673
3.4
Illinois
1,424
2.9
1,431
2.9
Colorado
1,350
2.8
1,515
3.1
Georgia
1,279
2.6
832
1.7
Wisconsin
1,250
2.6
1,177
2.4
New Jersey
1,230
2.5
932
2.0
All other states
14,154
28.8
14,610
30.0
Total
$
48,920
100.0 % $
48,859
100.0 %
The Company’s consumer lending segment originates
consumer credit through several channels, including
traditional branch lending, mobile and online banking,
indirect lending, alliance partnerships and correspondent
banks. Each distinct underwriting and origination process
within consumer lending manages unique credit risk
characteristics and prices its loan production
commensurate with the differing risk profiles.
Residential mortgage originations are generally limited
to prime borrowers and are performed through the
Company’s branches, loan production offices, mobile and
online services, and a wholesale network of originators. The
Company may retain residential mortgage loans it
originates on its balance sheet or sell the loans into the
secondary market while retaining the servicing rights and
customer relationships. Utilizing the secondary markets
enables the Company to effectively reduce its credit and
other asset/liability risks. For residential mortgages that are
retained in the Company’s portfolio and for home equity
and second mortgages, credit risk is managed by
adherence to LTV and borrower credit criteria during the
underwriting process.
The Company estimates updated LTV information on its
outstanding residential mortgages quarterly, based on a
method that combines automated valuation model updates
and relevant home price indices. LTV is the ratio of the
loan’s outstanding principal balance to the current estimate
of property value. For home equity and second mortgages,
combined loan-to-value (“CLTV”) is the combination of the
first mortgage original principal balance and the second
lien outstanding principal balance, relative to the current
estimate of property value. Certain loans do not have an
LTV or CLTV, primarily due to lack of available relevant
automated valuation model and/or home price indices
values, or lack of necessary valuation data on acquired
loans.
34 U.S. Bancorp 2025 Annual Report
The following tables provide summary information of
residential mortgages and home equity and second
mortgages by LTV at December 31, 2025:
Residential Mortgages
(Dollars in Millions)
Interest
Only
Amortizing
Total
Percent
of Total
Loan-to-Value
Less than or
equal to 80%
$ 11,996 $ 89,299 $ 101,295
87.4 %
Over 80%
through 90%
224
5,256
5,480
4.7
Over 90%
through 100%
22
918
940
.8
Over 100%
5
413
418
.4
No LTV available
—
6
6
—
Loans
purchased
from GNMA
mortgage
pools(a)
—
7,746
7,746
6.7
Total
$ 12,247 $ 103,638 $ 115,885 100.0 %
(a) Represents loans purchased and loans that could be purchased from
Government National Mortgage Association (“GNMA”) mortgage pools under
delinquent loan repurchase options whose payments are primarily insured by the
Federal Housing Administration or guaranteed by the United States Department
of Veterans Affairs.
Home Equity and Second
Mortgages
(Dollars in Millions)
Lines
Loans
Total
Percent
of Total
Loan-to-Value / Combined Loan-to-Value
Less than or equal
to 80%
$ 10,502 $ 2,752 $ 13,254
94.5 %
Over 80% through
90%
512
141
653
4.7
Over 90% through
100%
60
17
77
.5
Over 100%
19
6
25
.2
No LTV/CLTV
available
16
—
16
.1
Total
$ 11,109 $ 2,916 $ 14,025 100.0 %
Credit card and other retail loans are diversified across
customer segments and geographies. Diversification in the
credit card portfolio is achieved with broad customer
relationship distribution through the Company’s and
financial institution partners’ branches, retail and affinity
partners, and digital channels.
The following table provides a summary of the Company’s
credit card loan balances disaggregated based upon
updated credit score at December 31, 2025:
Percent
of Total(a)
Credit score > 660
87 %
Credit score < 660
13
No credit score
—
(a) Credit score distribution excludes loans serviced by others.
Tables 12, 13 and 14 provide a geographical summary
of the residential mortgage, credit card and other retail loan
portfolios, respectively.
TABLE 12 Residential Mortgages by Geography
2025
2024
At December 31 (Dollars in Millions)
Loans
Percent
of Total
Loans
Percent
of Total
California
$
50,536
43.6 % $
53,682
45.2 %
Washington
6,899
6.0
6,829
5.8
Florida
4,028
3.5
3,947
3.3
Colorado
3,546
3.1
3,737
3.1
New York
3,508
3.0
3,129
2.6
Texas
3,388
2.9
3,312
2.8
Illinois
3,374
2.9
3,452
2.9
Minnesota
3,115
2.7
3,357
2.9
Arizona
3,071
2.7
3,088
2.6
Massachusetts
2,770
2.4
2,737
2.3
All other states
31,650
27.2
31,543
26.5
Total
$ 115,885
100.0 % $ 118,813
100.0 %
35
TABLE 13 Credit Card Loans by Geography
2025
2024
At December 31 (Dollars in Millions)
Loans
Percent
of Total
Loans
Percent
of Total
California
$
3,656
11.3 % $
3,289
10.8 %
Texas
1,950
6.0
1,819
6.0
Illinois
1,687
5.2
1,557
5.1
Florida
1,597
5.0
1,479
4.9
Ohio
1,550
4.8
1,468
4.8
Minnesota
1,436
4.5
1,371
4.5
Wisconsin
1,277
4.0
1,220
4.0
Missouri
1,026
3.2
960
3.2
Washington
1,019
3.2
947
3.1
Michigan
954
3.0
933
3.1
All other states
16,082
49.8
15,307
50.5
Total
$
32,234
100.0 % $
30,350
100.0 %
TABLE 14 Other Retail Loans by Geography
2025
2024
At December 31 (Dollars in Millions)
Loans
Percent
of Total
Loans
Percent
of Total
California
$
8,687
21.5 % $
9,179
21.7 %
Florida
2,818
7.0
2,675
6.3
Texas
2,594
6.4
2,995
7.1
Washington
1,772
4.4
1,746
4.1
Minnesota
1,548
3.8
1,742
4.1
Ohio
1,411
3.5
1,520
3.6
Illinois
1,318
3.3
1,435
3.4
Colorado
1,295
3.2
1,340
3.2
Oregon
1,259
3.1
1,259
3.0
New York
1,208
3.0
1,329
3.1
All other states
16,428
40.8
17,106
40.4
Total
$
40,338
100.0 % $
42,326
100.0 %
36 U.S. Bancorp 2025 Annual Report
TABLE 15 Delinquent Loan Ratios as a Percent of Ending Loan Balances
At December 31
90 days or more past due
2025
2024
Commercial
Commercial
.07 %
.07 %
Lease financing
—
—
Total commercial
.06
.07
Commercial Real Estate
Commercial mortgages
—
—
Construction and development
.13
.09
Total commercial real estate
.03
.02
Residential Mortgages(a)
.25
.17
Credit Card
1.26
1.43
Other Retail
Retail leasing
.06
.05
Home equity and second mortgages
.18
.25
Other
.11
.11
Total other retail
.13
.15
Total loans
.22 %
.21 %
At December 31
90 days or more past due and nonperforming loans
2025
2024
Commercial
.53 %
.55 %
Commercial real estate
1.09
1.70
Residential mortgages(a)
.38
.30
Credit card
1.26
1.43
Other retail
.53
.50
Total loans
.61 %
.69 %
(a) Delinquent loan ratios exclude $3.5 billion and $2.3 billion at December 31, 2025 and 2024, respectively, of loans purchased and loans that could be purchased from GNMA
mortgage pools under delinquent loan repurchase options whose repayments are primarily insured by the Federal Housing Administration or guaranteed by the United States
Department of Veterans Affairs. Including these loans, the ratio of residential mortgages 90 days or more past due and nonperforming to total residential mortgages was 3.37
percent and 2.28 percent at December 31, 2025 and 2024, respectively.
Loan Delinquencies Trends in delinquency ratios are an
indicator, among other considerations, of credit risk within
the Company’s loan portfolios. The entire balance of a loan
account is considered delinquent if the minimum payment
contractually required to be made is not received by the
date specified on the billing statement. Delinquent loans
purchased and loans that could be purchased from GNMA
mortgage pools under delinquent loan repurchase options,
whose repayments are primarily insured by the Federal
Housing Administration or guaranteed by the United States
Department of Veterans Affairs, are excluded from
delinquency statistics.
Accruing loans 90 days or more past due totaled $853
million at December 31, 2025, compared with $810 million
at December 31, 2024. Accruing loans 90 days or more
past due are not included in nonperforming assets and
continue to accrue interest because they are adequately
secured by collateral, are in the process of collection and
are reasonably expected to result in repayment or
restoration to current status, or are managed in
homogeneous portfolios with specified charge-off
timeframes adhering to regulatory guidelines. The ratio of
accruing loans 90 days or more past due to total loans was
0.22 percent at December 31, 2025, compared with 0.21
percent at December 31, 2024.
37
The following table provides summary delinquency
information for residential mortgages, credit card and other
retail loans included in the consumer lending segment:
At December 31
(Dollars in Millions)
Amount
As a Percent of
Ending
Loan Balances
2025
2024
2025
2024
Residential Mortgages(a)
30-89 days
$ 214 $ 188
.18 % .16 %
90 days or more
285 206
.25
.17
Nonperforming
151 152
.13
.13
Total
$ 650 $ 546
.56 % .46 %
Credit Card
30-89 days
$ 419 $ 428 1.30 % 1.41 %
90 days or more
405 435 1.26
1.43
Nonperforming
—
—
—
—
Total
$ 824 $ 863 2.56 % 2.84 %
Other Retail
Retail Leasing
30-89 days
$ 20 $ 25
.57 % .62 %
90 days or more
2
2
.06
.05
Nonperforming
7
7
.20
.17
Total
$ 29 $ 34
.82 % .84 %
Home Equity and Second
Mortgages
30-89 days
$ 57 $ 61
.41 % .45 %
90 days or more
25
34
.18
.25
Nonperforming
136 121
.97
.89
Total
$ 218 $ 216 1.55 % 1.59 %
Other(b)
30-89 days
$ 110 $ 143
.48 % .58 %
90 days or more
25
28
.11
.11
Nonperforming
18
19
.08
.08
Total
$ 153 $ 190
.67 % .77 %
(a) Excludes $606 million of loans 30-89 days past due and $3.5 billion of loans 90
days or more past due at December 31, 2025, purchased and that could be
purchased from GNMA mortgage pools under delinquent loan repurchase
options that continue to accrue interest, compared with $660 million and $2.3
billion at December 31, 2024, respectively.
(b) Includes revolving credit, installment and automobile loans.
Modified Loans The Company may modify loan terms to
support borrowers facing financial hardship, typically
through interest rate reductions, maturity extensions or
other concessions. Modified loans accrue interest if
borrowers meet revised terms over time. Modifications are
assessed case-by-case across loan types, with commercial
loans often involving maturity extensions and collateral
adjustments, and residential mortgages modified under
federal and internal programs to improve affordability.
Credit card and retail loan modifications follow structured
programs. Refer to Notes 1 and 5 of the Notes to
Consolidated Financial Statements for further information on
loan modifications to borrowers experiencing financial
difficulty.
The Company also makes short-term modifications, in
limited circumstances, to assist borrowers experiencing
temporary hardships. Short-term consumer lending
modification programs include payment reductions,
deferrals of up to three past due payments, and the ability
to return to current status if the borrower makes required
payments. The Company may also make short-term
modifications to commercial lending loans, with the most
common modification being an extension of the maturity
date of three months or less. Such extensions generally are
used when the maturity date is imminent and the borrower
is experiencing some level of financial stress, but the
Company believes the borrower will pay all contractual
amounts owed.
Nonperforming Assets The level of nonperforming assets
represents another indicator of the Company’s risk within
the loan portfolio. Nonperforming assets include nonaccrual
loans, modified loans not performing in accordance with
modified terms and not accruing interest, modified loans
that have not met the performance period required to return
to accrual status, other real estate owned (“OREO”) and
other nonperforming assets owned by the Company.
Interest payments collected from assets on nonaccrual
status are generally applied against the principal balance
and not recorded as income. However, interest income may
be recognized for interest payments received if the
remaining carrying amount of the loan is believed to be
collectible.
At December 31, 2025, total nonperforming assets were
$1.6 billion, compared to $1.8 billion at December 31,
2024. The $242 million (13.2 percent) decrease in
nonperforming assets was primarily due to the resolution of
nonperforming commercial real estate loans. The ratio of
total nonperforming assets to total loans and other real
estate was 0.41 percent at December 31, 2025, compared
with 0.48 percent at December 31, 2024.
OREO was $24 million at December 31, 2025,
compared with $21 million at December 31, 2024, and was
related to foreclosed properties that previously secured
loan balances. These balances exclude foreclosed GNMA
loans whose repayments are primarily insured by the
Federal Housing Administration or guaranteed by the
United States Department of Veterans Affairs.
38 U.S. Bancorp 2025 Annual Report
TABLE 16 Nonperforming Assets(a)
At December 31 (Dollars in Millions)
2025
2024
Commercial
Commercial
$
695
$
644
Lease financing
22
26
Total commercial
717
670
Commercial Real Estate
Commercial mortgages
504
789
Construction and development
14
35
Total commercial real estate
518
824
Residential Mortgages(b)
151
152
Credit Card
—
—
Other Retail
Retail leasing
7
7
Home equity and second mortgages
136
121
Other
18
19
Total other retail
161
147
Total nonperforming loans(1)
1,547
1,793
Other Real Estate(c)
24
21
Other Assets
19
18
Total nonperforming assets
$
1,590
$
1,832
Accruing loans 90 days or more past due(b)
$
853
$
810
Period-end loans(2)
$ 391,335
$ 379,832
Nonperforming loans to total loans(1)/(2)
.40 %
.47 %
Nonperforming assets to total loans plus other real estate(c)
.41 %
.48 %
Changes in Nonperforming Assets
(Dollars in Millions)
Commercial and
Commercial
Real Estate
Residential
Mortgages,
Credit Card and
Other Retail
Total
Balance December 31, 2024
$
1,494 $
338 $
1,832
Additions to nonperforming assets
New nonaccrual loans and foreclosed properties
1,217
187
1,404
Advances on loans
78
1
79
Total additions
1,295
188
1,483
Reductions in nonperforming assets
Paydowns, payoffs
(931)
(51)
(982)
Net sales
(39)
(23)
(62)
Return to performing status
(92)
(71)
(163)
Charge-offs(d)
(492)
(26)
(518)
Total reductions
(1,554)
(171)
(1,725)
Net additions to (reductions in) nonperforming assets
(259)
17
(242)
Balance December 31, 2025
$
1,235 $
355 $
1,590
(a) Throughout this document, nonperforming assets and related ratios do not include accruing loans 90 days or more past due.
(b) Excludes $3.5 billion and $2.3 billion at December 31, 2025 and 2024, respectively, of loans purchased and loans that could be purchased from GNMA mortgage pools under
delinquent loan repurchase options that are 90 days or more past due that continue to accrue interest, as their repayments are primarily insured by the Federal Housing
Administration or guaranteed by the United States Department of Veterans Affairs.
(c) Foreclosed GNMA loans of $65 million and $46 million at December 31, 2025 and 2024, respectively, continue to accrue interest and are recorded as other assets and excluded
from nonperforming assets because they are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs.
(d) Charge-offs exclude actions for certain card products and loan sales that were not classified as nonperforming at the time the charge-off occurred.
39
TABLE 17 Net Charge-offs as a Percent of Average Loans Outstanding
2025
2024
2023
Year Ended December 31
(Dollars in Millions)
Average
Loan
Balance
Net
Charge-offs
Percent
Average
Loan
Balance
Net
Charge-offs
Percent
Average
Loan
Balance
Net
Charge-offs
Percent
Commercial
Commercial
$ 140,474 $
528
.38 % $ 129,235 $
523
.40 % $ 130,544 $
293
.22 %
Lease financing
4,242
22
.52
4,177
29
.69
4,339
21
.48
Total commercial
144,716
550
.38
133,412
552
.41
134,883
314
.23
Commercial Real Estate
Commercial mortgages
38,475
152
.40
40,513
163
.40
42,894
265
.62
Construction
10,046
1
.01
11,144
2
.02
11,752
(2)
(.02)
Total commercial real estate
48,521
153
.32
51,657
165
.32
54,646
263
.48
Residential Mortgages
116,144
(4)
—
117,026
(9)
(.01)
115,922
109
.09
Credit Card
30,093
1,223
4.06
28,683
1,227
4.28
26,570
849
3.20
Other Retail
Retail leasing
3,786
57
1.51
4,097
21
.51
4,665
6
.13
Home equity and second mortgages
13,734
(2)
(.01)
13,181
(1)
(.01)
12,829
(2)
(.02)
Other
23,266
187
.80
25,819
197
.76
31,760
366
1.15
Total other retail
40,786
242
.59
43,097
217
.50
49,254
370
.75
Total loans
$ 380,260 $
2,164
.57 % $ 373,875 $
2,152
.58 % $ 381,275 $
1,905
.50 %
Analysis of Loan Net Charge-offs Total loan net charge-
offs were $2.2 billion in 2025, reflecting an increase of $12
million (0.6 percent) compared with 2024. The increase in
total net charge-offs reflected higher other retail loan net
charge-offs, partially offset by lower commercial real estate
loan net charge-offs. The ratio of total loan net charge-offs
to average loans outstanding was 0.57 percent in 2025,
compared with 0.58 percent in 2024.
Analysis and Determination of the Allowance for Credit
Losses The allowance for credit losses is established for
current expected credit losses on the Company’s loan and
lease portfolio, including unfunded credit commitments.
The allowance considers expected losses for the remaining
lives of the applicable assets, net of expected recoveries.
The allowance for credit losses is increased through
provisions charged to earnings and reduced by net
charge-offs.
Management evaluates the appropriateness of the
allowance for credit losses on a quarterly basis. Multiple
economic scenarios are considered over a three-year
reasonable and supportable forecast period, which
includes increasing consideration of historical loss
experience over years two and three. These economic
scenarios are constructed with interrelated projections of
multiple economic variables, and loss estimates are
produced that consider the historical correlation of those
economic variables with credit losses. After the forecast
period, the Company fully reverts to long-term historical
loss experience, adjusted for expected prepayments and
characteristics of the current loan and lease portfolio, to
estimate losses over the remaining life of the portfolio. The
economic scenarios are updated at least quarterly and are
designed to provide a range of reasonable estimates, both
better and worse than current expectations. Scenarios are
weighted based on the Company’s expectation of
economic conditions for the foreseeable future and reflect
significant judgment and consideration of economic
forecast uncertainty. Final loss estimates also consider
factors affecting credit losses not reflected in the scenarios,
due to the unique aspects of current conditions and
expectations. These factors may include, but are not limited
to, changes in borrower behavior or conditions in specific
lending segments, loan servicing practices, regulatory
guidance, fiscal and monetary policy actions, and/or other
emerging risks which may impact the portfolio.
Because business processes and credit risks
associated with unfunded credit commitments are
essentially the same as for loans, the Company utilizes
similar processes to estimate its liability for unfunded credit
commitments, which is included in other liabilities in the
Consolidated Balance Sheet. Both the allowance for loan
losses and the liability for unfunded credit commitments are
included in the Company’s analysis of credit losses and
reported reserve ratios.
The allowance recorded for credit losses utilizes
forward-looking expected loss models to consider a variety
of factors affecting lifetime credit losses. These factors are
aligned to the key risk characteristics of the commercial
and consumer lending segments and include, but are not
limited to, macroeconomic variables, loan characteristics
and borrower characteristics, For each loan portfolio,
including those loans modified under various loan
modification programs, model estimates are adjusted as
necessary to consider any relevant changes in portfolio
composition, lending policies, underwriting standards, risk
management practices, economic conditions or other
40 U.S. Bancorp 2025 Annual Report
factors that may affect the accuracy of the model. Expected
credit loss estimates also include consideration of
expected cash recoveries on loans previously charged-off
or expected recoveries on collateral-dependent loans
where recovery is expected through sale of the collateral at
fair value less selling costs.
For loans and leases that do not share similar risk
characteristics with a pool of loans, the Company
establishes individually assessed reserves. Reserves for
larger individual nonperforming loans in the commercial
lending segment are analyzed utilizing expected cash flows
discounted using the original effective interest rate, the
observable market price of the loan, or the fair value of the
collateral, less selling costs, for collateral-dependent loans
as appropriate.
When a loan portfolio is purchased, the acquired loans
are divided into those considered purchased with more
than insignificant credit deterioration (“PCD”) and those not
considered PCD. An allowance is established for each
population and considers product mix, risk characteristics
of the portfolio and delinquency status and refreshed LTV
ratios when possible. Considerations for PCD loans include
whether the loan has experienced a charge-off, bankruptcy
or significant deterioration since origination. The allowance
established for purchased loans not considered PCD is
recognized through provision expense upon acquisition,
whereas the allowance established for loans considered
PCD at acquisition is offset by an increase in the basis of
the acquired loans. Any subsequent increases and
decreases in the allowance related to purchased loans,
regardless of PCD status, are recognized through provision
expense, with charge-offs charged to the allowance. The
Company had a total net book balance of $1.5 billion of
loans assigned a PCD status, primarily related to the MUB
acquisition, included in its loan portfolio at December 31,
2025.
The Company’s methodology for determining the
appropriate allowance for credit losses also considers the
imprecision inherent in the methodologies used and
allocated to the various loan portfolios. As a result, amounts
determined under the methodologies described above are
adjusted by management to consider the potential impact
of other qualitative factors not captured in quantitative
model adjustments which include, but are not limited to, the
following: model imprecision, imprecision in economic
scenario assumptions, and emerging risks related to either
changes in the economic environment that are affecting
specific portfolios, or changes in portfolio concentrations
over time that may affect model performance. The
consideration of these items results in adjustments to
allowance amounts included in the Company’s allowance
for credit losses for each loan portfolio.
The results of the analysis are evaluated quarterly to
confirm the estimates are appropriate for each loan
portfolio. Table 18 shows the amount of the allowance for
credit losses by loan class and underlying portfolio
category.
Although the Company determined the amount of each
element of the allowance separately and considers this
process to be an important credit management tool, the
entire allowance for credit losses is available for the entire
loan portfolio. The actual amount of losses can vary
significantly from the estimated amounts.
At December 31, 2025, the allowance for credit losses
was $7.9 billion, reflecting an increase of $22 million (0.3
percent) compared with December 31, 2024. The increase
from the prior year was primarily driven by loan portfolio
growth, partially offset by improved credit quality. The
Company continued to monitor economic uncertainty
related to interest rates, inflationary pressures, including
those related to changing trade policy, geopolitical events,
and other economic factors that may affect the financial
strength of corporate and consumer borrowers.
The ratio of the allowance for credit losses to period-end
loans was 2.03 percent at December 31, 2025, compared
with 2.09 percent at December 31, 2024. The ratio of the
allowance for credit losses to nonperforming loans was 514
percent at December 31, 2025, compared with 442 percent
at December 31, 2024. The ratio of the allowance for credit
losses to annual loan net charge-offs at December 31,
2025, was 367 percent, compared with 368 percent at
December 31, 2024.
The allowance for credit losses related to commercial
lending segment loans decreased $84 million during the
year ended December 31, 2025, reflecting improved credit
quality and portfolio mix, partially offset by commercial loan
growth.
The allowance for credit losses related to consumer
lending segment loans increased $106 million during the
year ended December 31, 2025, due to credit card portfolio
growth, partially offset by the impact of loan sales during
the second quarter of 2025.
Economic forecasts considered in estimating the
allowance for credit losses at December 31, 2025 included
changes in projected gross domestic product and
unemployment levels. These factors were evaluated
through a combination of quantitative calculations using
multiple economic scenarios and additional qualitative
assessments that considered the degree of economic
uncertainty in the current environment. The projected
unemployment rates considered in the estimate ranged
from 3.7 percent to 9.4 percent, with a peak weighted-
average unemployment rate of 5.9 percent.
41
The following table summarizes the baseline forecast for key economic variables the Company used in its estimate of the
allowance for credit losses at December 31, 2025 and 2024:
December 31,
2025
December 31,
2024
United States unemployment rate for the three months ending(a)
December 31, 2025
4.5 %
4.3 %
June 30, 2026
4.5
4.4
December 31, 2026
4.4
4.3
United States real gross domestic product for the three months ending(b)
December 31, 2025
1.7 %
1.7 %
June 30, 2026
1.8
2.0
December 31, 2026
1.8
2.2
(a) Reflects quarterly average of forecasted reported United States unemployment rate.
(b) Reflects year-over-year growth rates.
TABLE 18 Allocation of the Allowance for Credit Losses
Allowance Amount
Allowance as a Percent of
Loans
At December 31 (Dollars in Millions)
2025
2024
2025
2024
Commercial
Commercial
$
2,245 $
2,090
1.50 %
1.55 %
Lease financing
66
85
1.49
2.01
Total commercial
2,311
2,175
1.50
1.56
Commercial Real Estate
Commercial mortgages
885
1,016
2.24
2.63
Construction and development
403
492
4.27
4.80
Total commercial real estate
1,288
1,508
2.63
3.09
Residential Mortgages
747
783
.64
.66
Credit Card
2,769
2,640
8.59
8.70
Other Retail
Retail leasing
108
93
3.06
2.30
Home equity and second mortgages
262
255
1.87
1.88
Other
462
471
2.03
1.91
Total other retail
832
819
2.06
1.93
Total allowance
$
7,947 $
7,925
2.03 %
2.09 %
42 U.S. Bancorp 2025 Annual Report
TABLE 19 Summary of Allowance for Credit Losses
(Dollars in Millions)
2025
2024
2023
Balance at beginning of year
$
7,925
$
7,839
$
7,404
Change in accounting principle(a)
—
—
(62)
Allowance for acquired credit losses(b)
—
—
127
Charge-Offs
Commercial
Commercial
638
615
357
Lease financing
32
37
32
Total commercial
670
652
389
Commercial real estate
Commercial mortgages
208
218
278
Construction and development
2
11
3
Total commercial real estate
210
229
281
Residential mortgages
15
13
129
Credit card
1,461
1,406
1,014
Other retail
Retail leasing
72
35
18
Home equity and second mortgages
7
9
12
Other
258
269
448
Total other retail
337
313
478
Total charge-offs(c)
2,693
2,613
2,291
Recoveries
Commercial
Commercial
110
92
64
Lease financing
10
8
11
Total commercial
120
100
75
Commercial real estate
Commercial mortgages
56
55
13
Construction and development
1
9
5
Total commercial real estate
57
64
18
Residential mortgages
19
22
20
Credit card
238
179
165
Other retail
Retail leasing
15
14
12
Home equity and second mortgages
9
10
14
Other
71
72
82
Total other retail
95
96
108
Total recoveries
529
461
386
Net Charge-Offs
Commercial
Commercial
528
523
293
Lease financing
22
29
21
Total commercial
550
552
314
Commercial real estate
Commercial mortgages
152
163
265
Construction and development
1
2
(2)
Total commercial real estate
153
165
263
Residential mortgages
(4)
(9)
109
Credit card
1,223
1,227
849
Other retail
Retail leasing
57
21
6
Home equity and second mortgages
(2)
(1)
(2)
Other
187
197
366
Total other retail
242
217
370
Total net charge-offs
2,164
2,152
1,905
Provision for credit losses(d)
2,186
2,238
2,275
Balance at end of year
$
7,947
$
7,925
$
7,839
Components
Allowance for loan losses
$
7,605
$
7,583
$
7,379
Liability for unfunded credit commitments
342
342
460
Total allowance for credit losses(1)
$
7,947
$
7,925
$
7,839
Period-end loans(2)
$ 391,335
$ 379,832
$ 373,835
Nonperforming loans(3)
1,547
1,793
1,449
Allowance for Credit Losses as a Percentage of
Period-end loans(1)/(2)
2.03 %
2.09 %
2.10 %
Nonperforming loans(1)/(3)
514
442
541
Nonperforming and accruing loans 90 days or more past due
331
304
365
Nonperforming assets
500
433
525
Net charge-offs
367
368
411
(a) Effective January 1, 2023, the Company adopted accounting guidance which removed the separate recognition and measurement of troubled debt restructurings.
(b) Allowance for purchased credit deteriorated and charged-off loans acquired from MUB.
(c) 2023 includes $91 million of charge-offs related to uncollectible amounts on acquired loans, as well as $309 million of charge-offs related to balance sheet repositioning and capital
management actions.
(d) 2023 includes provision for credit losses of $243 million related to balance sheet repositioning and capital management actions.
43
Residual Value Risk Management The Company
manages its risk to changes in the residual value of leased
vehicles, office and business equipment, and other assets
through disciplined residual valuation at the inception of a
lease, diversification of its leased assets, regular residual
asset valuation reviews and monitoring of residual value
gains or losses upon the disposition of assets. Lease
originations are subject to the same well-defined
underwriting standards referred to in the “Credit Risk
Management” section, which includes an evaluation of the
residual value risk. Retail lease residual value risk is
mitigated further by effective end-of-term marketing of off-
lease vehicles.
Included in the retail leasing portfolio was approximately
$2.7 billion of retail leasing residuals at December 31,
2025, compared with $3.1 billion at December 31, 2024.
The Company monitors concentrations of leases by
manufacturer and vehicle type. As of December 31, 2025,
vehicle lease residuals related to sport utility vehicles were
53.2 percent of the portfolio, while auto and truck classes
represented approximately 21.9 percent and 17.2 percent
of the portfolio, respectively. At year-end 2025, the
individual vehicle model with the largest residual value
outstanding represented 17.4 percent of the aggregate
residual value of all vehicles in the portfolio. At
December 31, 2025 and 2024, the weighted-average
origination term of the portfolio was 41 months. At
December 31, 2025, the commercial leasing portfolio had
$473 million of residuals, compared with $484 million at
December 31, 2024. At year-end 2025, lease residuals
related to trucks and other transportation equipment
represented 37.4 percent of the total residual portfolio,
while business and office equipment represented 27.7
percent.
Operational Risk Management The Company operates in
many different businesses in diverse markets and relies on
the ability of its employees and systems to process a high
number of transactions. Operational risk is inherent in all
business activities, and the management of this risk is
important to the achievement of the Company’s objectives.
Business lines have direct and primary responsibility and
accountability for identifying, controlling, and monitoring
operational risks embedded in their business activities,
including those additional or increased risks created by
economic and financial disruptions.
The Company maintains a system of controls with the
objectives of providing proper transaction authorization and
execution, proper system operations and proper oversight
of third parties with whom it does business, safeguarding of
assets from misuse or theft, and ensuring the reliability and
security of financial and other data. The Company also
maintains a cybersecurity risk program which provides
centralized planning and management of related and
interdependent work with a focus on risks from
cybersecurity threats. The Company's cybersecurity risk
program is integrated into the Company's overall business
and operational strategies and requires that the Company
allocate appropriate resources to maintain the program.
Refer to “Item 1C. Cybersecurity” in the Company’s Annual
Report on Form 10-K for the year ended December 31,
2025, for further discussion on the Company's
cybersecurity risk program.
Business continuation and disaster recovery planning is
also critical to effectively managing operational risks. Each
business unit of the Company is required to develop,
maintain and test these plans at least annually to ensure
that recovery activities, if needed, can support mission
critical functions, including technology, networks and data
centers supporting customer applications and business
operations.
While the Company strives to design processes to
minimize operational risks, the Company has experienced
and may continue to experience business disruptions and
operational losses from external events and internal control
breakdowns. On an ongoing basis, management makes
process changes and investments to enhance its systems
of internal controls and business continuity and disaster
recovery plans.
Compliance Risk Management The Company may suffer
legal or regulatory sanctions, material financial loss, or
damage to its brand if it fails to comply with laws,
regulations, rules, standards of good practice, and codes
of conduct, including those related to compliance with
Bank Secrecy Act/anti-money laundering requirements,
sanctions compliance requirements as administered by the
Office of Foreign Assets Control, consumer protection and
other requirements. The Company has controls and
processes in place for the assessment, identification,
monitoring, management and reporting of compliance risks
and issues, including those created or increased by
economic and financial disruptions. Refer to “Supervision
and Regulation” in the Company’s Annual Report on Form
10-K for the year ended December 31, 2025, for further
discussion of the regulatory framework applicable to bank
holding companies and their subsidiaries.
Strategic Risk Management The Board of Directors
oversees the Company’s strategic direction and approves
the strategic plan. Senior management develops and
executes strategic objectives, assessing internal
capabilities, market conditions, emerging risks, and
regulatory developments as part of the annual strategic
planning cycle. Strategic Risk Management (“SRM”),
operating as the second line of defense, provides
independent oversight of strategic initiatives and
associated risk exposures. SRM evaluates strategic
proposals, monitors key internal and external risk drivers,
and performs review and challenge of business lines to
ensure strategy execution aligns with the Company’s risk
appetite and governance expectations. The Company
conducts ongoing monitoring of strategic risk through
periodic reporting to senior management and the Board of
Directors. Reporting includes updates on strategic
initiatives, operating environment changes, risk indicators,
and emerging risks. Strategic risk insights are integrated
into enterprise risk assessments, risk appetite monitoring,
and strategic performance reviews. The Company
continuously enhances its strategic risk management
44 U.S. Bancorp 2025 Annual Report
practices to reflect changes in the operating environment
and evolving governance expectations.
Interest Rate Risk Management In the banking industry,
changes in interest rates are a significant risk that can
impact earnings as well as the safety and soundness of an
entity. The Company manages its exposure to changes in
interest rates through asset and liability management
activities within guidelines established by its Asset Liability
Management Committee (“ALCO”) and approved by the
Board of Directors. The ALCO has the responsibility for
approving and overseeing compliance with the ALCO
management policies, including interest rate risk exposure.
One way the Company measures and analyzes its interest
rate risk is through analysis of net interest income
sensitivities across a range of scenarios.
Net interest income sensitivity analysis includes
evaluating all of the Company’s assets and liabilities and
off-balance sheet instruments, inclusive of new business
activity, under various interest rate scenarios that differ in
the direction, amount and speed of change over time, as
well as the overall shape of the yield curve. The balance
sheet includes assumptions regarding loan and deposit
volumes and pricing which are based on quantitative
analysis, historical trends and management outlook and
strategies. Deposit balances, mix and pricing are dynamic
across interest rate scenarios and will change both with the
absolute level of rates as well as the assumed interest rate
shock. Deposit pricing changes, commonly referred to as
the deposit beta, represents the amount by which the
Company’s interest-bearing deposit rates have or will
change given a change in short-term market rates. Base
case and net interest income sensitivities are reviewed
monthly by the ALCO and are used to guide asset/liability
management strategies.
The Company also manages interest rate sensitivity by
utilizing market value of equity modeling, which measures
the degree to which the market values of the Company’s
assets and liabilities and off-balance sheet instruments will
change given a change in interest rates. Management
measures the impact of changes in market values due to
interest rates under a number of scenarios, including
immediate and sustained parallel shifts, and flattening or
steepening of the yield curve. The Company manages its
interest rate risk position by holding assets with desired
interest rate risk characteristics on its balance sheet,
executing certain pricing strategies for loans and deposits
and deploying investment portfolio, funding and derivative
strategies.
Table 20 summarizes the projected impact to net
interest income over the next 12 months of various potential
interest rate changes. The sensitivity of the projected
impact to net interest income over the next 12 months is
dependent on balance sheet growth, product mix,
customer behavior, deposit pricing and funding decisions.
From December 31, 2024 to December 31, 2025, changes
in net interest income sensitivities reflect updates to the
interest rate outlook, both the actual and projected balance
sheet, investment and hedging activities, as well as
enhancements to behavioral models made in the third
quarter of 2025. The Company periodically assesses
interest rate risk scenarios and behavioral assumptions,
such as deposit rotation, pricing sensitivity and mortgage
prepayment speeds, based on historical experience and
projected through-the-cycle dynamics. As of December 31,
2025, the Company remains relatively neutral to a parallel
50 basis point shift in interest rates, as asset and liability
repricing remains closely aligned. Under more significant
rate shock scenarios, certain assets and liabilities,
particularly mortgage assets and deposit products, are
expected to exhibit non-linear behavior, resulting in varying
impacts to net interest income. In higher rate scenarios, the
analysis anticipates deposit disintermediation and a mix
shift into higher yielding products, along with reduced
mortgage prepayments. Conversely, in lower rate
scenarios, the analysis assumes that deposits will shift into
lower yielding products, while mortgage paydowns
accelerate. While the Company’s interest rate risk models
incorporate historical data and expected customer
behaviors, actual outcomes may differ significantly due to
changes in macroeconomic conditions, competitive
dynamics and customer preferences.
TABLE 20 Sensitivity of Net Interest Income
December 31, 2025
December 31, 2024
Down 50 bps
Immediate
Up 50 bps
Immediate
Down 200 bps
Immediate
Up 200 bps
Immediate
Down 50 bps
Immediate
Up 50 bps
Immediate
Down 200 bps
Immediate
Up 200 bps
Immediate
Net interest income
(.02) %
(.07) %
(1.83) %
.80 %
.25 %
.17 %
.01 %
1.05 %
45
Use of Derivatives to Manage Interest Rate and Other
Risks To manage the sensitivity of earnings and capital to
interest rate, prepayment, credit, price and foreign
currency fluctuations (asset and liability management
positions), the Company enters into derivative transactions.
The Company uses derivatives for asset and liability
management purposes primarily in the following ways:
• To convert fixed-rate debt and available-for-sale
investment securities from fixed-rate payments to
floating-rate payments;
• To convert floating-rate loans and debt from floating-rate
payments to fixed-rate payments;
• To mitigate changes in value of the Company’s unfunded
mortgage loan commitments, funded MLHFS and MSRs;
• To mitigate remeasurement volatility of foreign currency
denominated balances; and
• To mitigate the volatility of the Company’s net investment
in foreign operations driven by fluctuations in foreign
currency exchange rates.
In addition, the Company enters into interest rate,
foreign exchange and commodity derivative contracts to
support the business requirements of its customers
(customer-related positions). The Company minimizes the
market, funding and liquidity risks of customer-related
positions by either entering into similar offsetting positions
with broker-dealers, or on a portfolio basis by entering into
other derivative or non-derivative financial instruments that
partially or fully offset the exposure from these customer-
related positions. The Company may enter into derivative
contracts that are either exchange-traded, centrally cleared
through clearinghouses or over-the-counter. The Company
does not utilize derivatives for speculative purposes.
The Company does not designate all of the derivatives
that it enters into for risk management purposes as
accounting hedges because of the inefficiency of applying
the associated accounting requirements and may instead
elect fair value accounting for the related hedged items. In
particular, the Company enters into interest rate swaps,
swaptions, forward commitments to buy to-be-announced
securities (“TBAs”), U.S. Treasury and Secured Overnight
Financing Rate (“SOFR”) futures and options on U.S.
Treasury futures to mitigate fluctuations in the value of its
MSRs, but does not designate those derivatives as
accounting hedges. Refer to Note 9 of the Notes to
Consolidated Financial Statements for additional
information regarding MSRs, including management of the
changes in fair value.
Additionally, the Company uses forward commitments to
sell TBAs and other commitments to sell residential
mortgage loans at specified prices to economically hedge
the interest rate risk in its residential mortgage loan
production activities. The forward commitments to sell and
the unfunded mortgage loan commitments on loans
intended to be sold are considered derivatives under the
accounting guidance related to accounting for derivative
instruments and hedging activities. The Company has
elected the fair value option for the MLHFS.
Derivatives are subject to credit risk associated with
counterparties to the contracts. Credit risk associated with
derivatives is measured by the Company based on the
probability of counterparty default. The Company manages
the credit risk of its derivative positions by diversifying its
positions among various counterparties, by entering into
master netting arrangements, and, where possible, by
requiring collateral arrangements. The Company may also
transfer counterparty credit risk related to interest rate
swaps to third parties through the use of risk participation
agreements. In addition, certain interest rate swaps,
interest rate forwards and credit contracts are required to
be centrally cleared through clearinghouses to further
mitigate counterparty credit risk. The Company also
mitigates the credit risk of its derivative positions, as well as
the credit risk on loans or lending portfolios, through the
use of credit contracts.
For additional information on derivatives and hedging
activities, refer to Notes 19 and 20 in the Notes to
Consolidated Financial Statements.
Market Risk Management In addition to interest rate risk,
the Company is exposed to other forms of market risk,
principally related to trading activities which support
customers’ strategies to manage their own foreign
currency, interest rate risk, commodities risk and funding
activities. For purposes of its internal capital adequacy
assessment process, the Company considers risk arising
from its trading activities, as well as the remeasurement
volatility of foreign currency denominated balances
included on its Consolidated Balance Sheet (collectively,
“Covered Positions”), employing methodologies consistent
with the requirements of regulatory rules for market risk.
The Company’s Market Risk Committee (“MRC”), within the
framework of the ALCO, oversees market risk management.
The MRC monitors and reviews the Company’s Covered
Positions and establishes policies for market risk
management, including exposure limits for each portfolio.
The Company uses a VaR approach to measure general
market risk. Theoretically, VaR represents the statistical risk
of loss the Company has to adverse market movements
over a one-day time horizon. The Company uses the
historical simulation method to calculate VaR for its
Covered Positions measured at the ninety-ninth percentile
using a one-year look-back period for distributions derived
from past market data. The market factors used in the
calculations include those pertinent to market risks inherent
in the underlying trading portfolios, principally those that
affect the Company’s corporate bond trading business,
foreign currency transaction business, client derivatives
business, loan trading business and municipal securities
business, as well as those inherent in the Company’s
foreign denominated balances and the derivatives used to
mitigate the related measurement volatility. On average, the
Company expects the one-day VaR to be exceeded by
actual losses two to three times per year related to these
positions. The Company monitors the accuracy of internal
VaR models and modeling processes by back-testing
model performance, regularly updating the historical data
used by the VaR models and regular model validations to
assess the accuracy of the models’ input, processing, and
reporting components. All models are required to be
independently reviewed and approved prior to being
46 U.S. Bancorp 2025 Annual Report
placed in use. If the Company were to experience market
losses in excess of the estimated VaR more often than
expected, the VaR models and associated assumptions
would be analyzed and adjusted.
The average, high, low and period-end one-day VaR
amounts for the Company’s Covered Positions were as
follows:
Year Ended December 31
(Dollars in Millions)
2025
2024
Average
$
4 $
3
High
22
4
Low
2
2
Period-end
4
2
The Company did not experience any actual losses for
its combined Covered Positions that exceeded VaR during
the years ended December 31, 2025 and 2024. The
Company stress tests its market risk measurements to
provide management with perspectives on market events
that may not be captured by its VaR models, including
worst case historical market movement combinations that
have not necessarily occurred on the same date.
The Company calculates Stressed VaR using the same
underlying methodology and model as VaR, except that a
historical continuous one-year look-back period is utilized
that reflects a period of significant financial stress
appropriate to the Company’s Covered Positions. The
period selected by the Company includes the significant
market volatility of the last four months of 2008.
The average, high, low and period-end one-day Stressed
VaR amounts for the Company’s Covered Positions were as
follows:
Year Ended December 31
(Dollars in Millions)
2025
2024
Average
$
14 $
10
High
64
16
Low
9
7
Period-end
14
11
Valuations of positions in client derivatives and foreign
currency activities are based on discounted cash flow or
other valuation techniques using market-based
assumptions. These valuations are compared to third-party
quotes or other market prices to determine if there are
significant variances. Significant variances are approved by
senior management in the Company’s corporate functions.
Valuation of positions in the corporate bond trading, loan
trading, asset-backed securities and municipal securities
businesses are based on trader marks. These trader marks
are evaluated against third-party prices, with significant
variances approved by senior management in the
Company’s corporate functions.
The Company also measures the market risk of its
hedging activities related to residential MLHFS and MSRs
using the historical simulation method. The VaRs are
measured at the ninety-ninth percentile and employ factors
pertinent to the market risks inherent in the valuation of the
assets and hedges. A one-year look-back period is used to
obtain past market data for the models.
The average, high and low VaR amounts for the residential
MLHFS and related hedges and the MSRs and related
hedges were as follows:
Year Ended December 31
(Dollars in Millions)
2025
2024
Residential Mortgage Loans Held For
Sale and Related Hedges
Average
$
1 $
2
High
2
3
Low
—
1
Mortgage Servicing Rights and Related
Hedges
Average
$
2 $
2
High
5
3
Low
1
1
Liquidity Risk Management The Company’s liquidity risk
management process is designed to identify, measure, and
manage the Company’s funding and liquidity risk to meet
its daily funding needs and to address expected and
unexpected changes in its funding requirements. The
Company engages in various activities to manage its
liquidity risk. These activities include diversifying its funding
sources, stress testing, and holding readily-marketable
assets which can be used as a source of liquidity if
needed. In addition, the Company’s profitable operations,
sound credit quality and strong credit ratings and capital
position have enabled it to develop a large and reliable
base of core deposit funding within its market areas and in
domestic and global capital markets.
The Company’s Board of Directors approves the
Company’s liquidity policy and liquidity risk appetite. The
Risk Management Committee of the Company’s Board of
Directors oversees the Company’s liquidity risk
management process and approves the Company’s
contingency funding plan. The ALCO reviews the
Company’s liquidity policy and limits, and regularly
assesses the Company’s ability to meet funding
requirements arising from adverse company-specific or
market events.
The Company maintains diversified wholesale funding
sources to avoid maturity, entity and market concentrations.
The Company operates a Cayman Islands branch for
issuing Eurodollar time deposits. In addition, the Company
has relationships with dealers to issue national market retail
and institutional savings certificates and short-term and
medium-term notes. The Company also maintains a
significant correspondent banking network and
relationships. Accordingly, the Company has access to
national federal funds, funding through repurchase
agreements and sources of stable certificates of deposit
and commercial paper.
The Company regularly projects its funding needs under
various stress scenarios and generally has access to
diversified sources of funding in both normal and potentially
47
adverse environments. The Company also maintains a
contingency funding plan and tests its capabilities to
access contingency funding through different channels.
The Company’s primary liquidity sources include cash at
the Federal Reserve Bank and certain European central
banks, unencumbered liquid assets, and capacity to
borrow from the FHLB and at the Federal Reserve Bank’s
Discount Window. Unencumbered liquid assets in the
Company’s investment securities portfolio provide asset
liquidity through the Company’s ability to sell the securities
or pledge and borrow against them. Refer to Note 4 of the
Notes to Consolidated Financial Statements and “Balance
Sheet Analysis” for further information on investment
securities maturities and trends. Asset liquidity is further
enhanced by the Company’s practice of pledging loans to
access secured borrowing facilities through the FHLB and
Federal Reserve Bank.
The following table summarizes the Company's total
available liquidity from cash, available investment securities
and secured borrowing capacity:
(Dollars in Millions)
December 31,
2025
December 31,
2024
Cash held at the Federal Reserve
Bank and other central banks
$
39,206 $
47,434
Available investment securities
56,366
67,910
Borrowing capacity from the
Federal Reserve Bank and FHLB
205,120
171,226
Total available liquidity
$ 300,692 $ 286,570
The Company’s diversified deposit base provides a
sizeable source of relatively stable and low-cost funding,
while reducing the Company’s reliance on the wholesale
markets. Total deposits were $522.2 billion at
December 31, 2025, compared with $518.3 billion at
December 31, 2024. Average total deposits in 2025 and
2024 funded approximately 75 percent and 77 percent of
the Company’s total assets for these same periods,
respectively. Refer to Note 11 of the Notes to Consolidated
Financial Statements and “Balance Sheet Analysis” for
further information on the maturities, terms and trends of the
Company’s deposits.
Additional funding is provided by long-term debt and
short-term borrowings. Long-term debt was $60.8 billion at
December 31, 2025, and is an important funding source
because of its multi-year borrowing structure. Refer to Note
13 of the Notes to Consolidated Financial Statements for
information on the terms and maturities of the Company’s
long-term debt issuances and “Balance Sheet Analysis” for
discussion on long-term debt trends. Short-term borrowings
were $17.2 billion at December 31, 2025, and supplement
the Company’s other funding sources. Refer to Note 12 of
the Notes to Consolidated Financial Statements and
“Balance Sheet Analysis” for further information on the
terms and trends of the Company’s short-term borrowings.
The Company’s ability to raise negotiated funding at
competitive prices is influenced by rating agencies’ views
of the Company’s credit quality, liquidity, capital and
earnings. Table 21 details the rating agencies’ most recent
assessments as of December 31, 2025.
TABLE 21 Credit Ratings
Moody's
S&P Global Ratings
Fitch Ratings
DBRS Morningstar
U.S. Bancorp
Long-term issuer rating
A3
A
A+
AA (low)
Short-term issuer rating
N/A
A-1
F1
R-1 (middle)
Senior unsecured debt
A3
A
A
AA (low)
Subordinated debt
A3
A-
A-
A (high)
Junior subordinated debt
Baa1
N/A
N/A
N/A
Preferred stock
Baa2
BBB
BBB
A (low)
Commercial paper
P-2
N/A
F1
R-1 (middle)
U.S. Bank National Association
Long-term issuer rating
A2
A+
A+
AA
Short-term issuer rating
P-1
A-1
F1
R-1 (high)
Long-term deposits
Aa3
N/A
AA-
AA
Short-term deposits
P-1
N/A
F1+
N/A
Senior unsecured debt
A2
A+
A+
AA
Subordinated debt
A2
A
N/A
AA (low)
Commercial paper
P-1
A-1
N/A
R-1 (high)
Counterparty risk assessment
A1(cr)/P-1(cr)
Counterparty risk rating
A2/P-1
Baseline credit assessment
a2
48 U.S. Bancorp 2025 Annual Report
In addition to assessing liquidity risk on a consolidated
basis, the Company monitors the parent company’s
liquidity. The parent company’s routine funding
requirements consist primarily of operating expenses,
dividends paid to shareholders, debt service, repurchases
of common stock and funds used for acquisitions. The
parent company obtains funding to meet its obligations
from dividends collected from its subsidiaries and the
issuance of debt and capital securities. The Company
establishes limits for the minimal number of months into the
future where the parent company can meet existing and
forecasted obligations with cash and securities held that
can be readily monetized. The Company measures and
manages this limit in both normal and adverse conditions.
The Company maintains sufficient funding to meet
expected capital and debt service obligations for 24
months without the support of dividends from subsidiaries
and assuming access to the wholesale markets is
maintained. The Company maintains sufficient liquidity to
meet its capital and debt service obligations for 12 months
under adverse conditions without the support of dividends
from subsidiaries or access to the wholesale markets. The
parent company is currently in excess of required liquidity
minimums.
Under SEC rules, the parent company is classified as a
“well-known seasoned issuer,” which allows it to file a
registration statement that does not have a limit on
issuance capacity. “Well-known seasoned issuers”
generally include those companies with outstanding
common securities with a market value of at least
$700 million held by non-affiliated parties or those
companies that have issued at least $1 billion in aggregate
principal amount of non-convertible securities, other than
common equity, in the last three years. However, the parent
company’s ability to issue debt and other securities under a
registration statement filed with the SEC under these rules
is limited by the debt issuance authority granted by the
Company’s Board of Directors and/or the ALCO policy.
At December 31, 2025, parent company long-term debt
outstanding was $37.1 billion, compared with $35.3 billion
at December 31, 2024. The increase was primarily due to
$5.0 billion of medium-term note issuances, partially offset
by $3.8 billion of medium-term note repayments. As of
December 31, 2025, there was $2.5 billion of parent
company debt scheduled to mature in 2026. Future debt
maturities may be met through medium-term note and
capital security issuances and dividends from subsidiaries,
as well as from parent company cash and cash
equivalents.
Dividend payments to the Company by its subsidiary
bank are subject to regulatory review and statutory
limitations and, in some instances, regulatory approval. In
general, dividends to the parent company from its banking
subsidiary are limited by rules which compare dividends to
net income for regulatorily-defined periods. For further
information, see Note 24 of the Notes to Consolidated
Financial Statements.
The Company is subject to a regulatory Liquidity
Coverage Ratio (“LCR”) requirement which requires large
banking organizations to maintain an adequate level of
unencumbered high quality liquid assets to meet estimated
liquidity needs over a 30-day stressed period. The
Company’s average daily LCR was 106.5 percent and
106.6 percent, respectively, for the three months ended
December 31, 2025 and 2024. The Company was
compliant with this requirement for both of these periods.
The Company is also subject to a regulatory Net Stable
Funding Ratio (“NSFR”) requirement which requires large
banking organizations to maintain a minimum level of stable
funding based on the liquidity characteristics of their
assets, commitments, and derivative exposures over a one-
year time horizon. The Company was compliant with this
requirement at December 31, 2025 and December 31,
2024.
European Exposures The Company provides merchant
processing and corporate trust services in Europe either
directly or through banking affiliations in Europe. Revenue
generated from sources in Europe represented
approximately 2 percent of the Company’s total net revenue
for 2025. Operating cash for these businesses is deposited
on a short-term basis typically with certain European central
banks. For deposits placed at other European banks,
exposure is mitigated by the Company placing deposits at
multiple banks and managing the amounts on deposit at
any bank based on institution-specific deposit limits. At
December 31, 2025, the Company had an aggregate
amount on deposit with European banks of approximately
$6.4 billion, predominately with the Central Bank of Ireland
and Bank of England.
In addition, the Company provides financing to domestic
multinational corporations that generate revenue from
customers in European countries, transacts with various
European banks as counterparties to certain derivative-
related activities, and through a subsidiary, manages
money market funds that hold certain investments in
European sovereign debt. Any deterioration in economic
conditions in Europe, including the impacts resulting from
the Russia-Ukraine conflict, is not expected to have a
significant effect on the Company related to these activities.
Commitments, Contingent Liabilities and Other
Contractual Obligations The Company participates in
many different contractual arrangements which may or may
not be recorded on its balance sheet, with unrelated or
consolidated entities, under which the Company has an
obligation to pay certain amounts, provide credit or liquidity
enhancements or provide market risk support. These
arrangements also include any obligation related to a
variable interest held in an unconsolidated entity that
provides financing, liquidity, credit enhancement or market
risk support.
In the ordinary course of business, the Company enters
into contractual obligations that may require future cash
payments, including funding for customer loan requests,
customer deposit maturities and withdrawals, debt service,
leases for premises and equipment, and other cash
commitments. Refer to Notes 6, 11, 13, 16 and 22 in the
Notes to Consolidated Financial Statements for information
on the Company’s operating lease obligations, deposits,
49
long-term debt, benefit obligations and guarantees and
other commitments, respectively.
Commitments to extend credit are legally binding and
generally have fixed expiration dates or other termination
clauses. Many of the Company’s commitments to extend
credit expire without being drawn and, therefore, total
commitment amounts do not necessarily represent future
liquidity requirements or the Company’s exposure to credit
loss. Commitments to extend credit also include consumer
credit lines that are cancellable upon notification to the
consumer. Total contractual amounts of commitments to
extend credit at December 31, 2025 were $444.7 billion.
The Company also issues and confirms various types of
letters of credit, including standby and commercial. Total
contractual amounts of letters of credit at December 31,
2025 were $11.3 billion. For more information on the
Company’s commitments to extend credit and letters of
credit, refer to Note 22 in the Notes to Consolidated
Financial Statements.
The Company’s off-balance sheet arrangements with
unconsolidated entities primarily consist of private
investment funds or partnerships that make equity
investments, provide debt financing or support community-
based investments in tax-advantaged projects. In addition
to providing investment returns, these arrangements in
many cases assist the Company in complying with
requirements of the Community Reinvestment Act. The
investments in these entities generate a return primarily
through the realization of federal and state income tax
credits and other tax benefits, such as tax deductions from
operating losses of the investments, over specified time
periods. The entities in which the Company invests are
generally considered variable interest entities (“VIEs”). The
Company’s recorded investment in these entities, net of
contractual equity investment commitments of $5.8 billion,
was $4.0 billion at December 31, 2025.
The Company also has non-controlling financial
investments in private funds and partnerships considered
VIEs. The Company’s recorded investment in these entities
was approximately $312 million at December 31, 2025, and
the Company had unfunded commitments to invest an
additional $127 million. For more information on the
Company’s interests in unconsolidated VIEs, refer to Note 7
in the Notes to Consolidated Financial Statements.
Guarantees are contingent commitments issued by the
Company to customers or other third parties requiring the
Company to perform if certain conditions exist or upon the
occurrence or nonoccurrence of a specified event, such as
a scheduled payment to be made under contract. The
Company’s primary guarantees include commitments from
securities lending activities in which indemnifications are
provided to customers; indemnification or buy-back
provisions related to sales of loans and tax credit
investments; and merchant charge-back guarantees
through the Company’s involvement in providing merchant
processing services. For certain guarantees, the Company
may have access to collateral to support the guarantee, or
through the exercise of other recourse provisions, be able
to offset some or all of any payments made under these
guarantees.
The Company and certain of its subsidiaries, along with
other Visa U.S.A. Inc. member banks, have a contingent
guarantee obligation to indemnify Visa Inc. for potential
losses arising from antitrust lawsuits challenging the
practices of Visa U.S.A. Inc. and MasterCard International.
The indemnification by the Company and other Visa U.S.A.
Inc. member banks has no maximum amount. Refer to Note
22 in the Notes to Consolidated Financial Statements for
further details regarding guarantees, other commitments,
and contingent liabilities, including maximum potential
future payments and current carrying amounts.
Capital Management The Company is committed to a
balanced capital management approach in order to
maintain strong protection for depositors and creditors,
provide shareholder benefit and to exceed regulatory
capital requirements for banking organizations. To achieve
its capital goals, the Company employs a variety of capital
management tools, including dividends, common share
repurchases, and the issuance of subordinated debt, non-
cumulative perpetual preferred stock, common stock and
other capital instruments.
The Company announced on September 9, 2025 that its
Board of Directors had approved a regular quarterly
dividend of $0.52 per common share. This represented a 4
percent increase over the previous dividend rate per
common share of $0.50 per quarter.
The Company announced on September 12, 2024 that
its Board of Directors authorized a share repurchase
program to repurchase up to $5.0 billion of its common
stock, effective September 13, 2024. Capital distributions,
including dividends and stock repurchases, are subject to
the approval of the Company’s Board of Directors and
compliance with regulatory requirements. For a more
complete analysis of activities impacting shareholders’
equity and capital management programs, refer to Note 14
of the Notes to Consolidated Financial Statements.
Total U.S. Bancorp shareholders’ equity was $65.2
billion at December 31, 2025, compared with $58.6 billion
at December 31, 2024. The increase was primarily the
result of corporate earnings and changes in unrealized
gains and losses on available-for-sale investment securities
included in accumulated other comprehensive income
(loss), partially offset by dividends paid.
The regulatory capital requirements effective for the
Company follow Basel III, with the Company being subject
to calculating its capital adequacy as a percentage of risk-
weighted assets under the standardized approach. Under
Basel III, banking regulators define minimum capital
requirements for banks and financial services holding
companies. These requirements are expressed in the form
of a minimum common equity tier 1 capital ratio, tier 1
capital ratio, total risk-based capital ratio, tier 1 leverage
ratio and a tier 1 total leverage exposure, or supplementary
leverage ratio. The Company’s minimum required capital
ratios included a stress capital buffer of 2.6 percent at
December 31, 2025. The Company targets its regulatory
capital levels, at both the bank and bank holding company
level, to exceed the “well-capitalized” threshold under the
FDIC Improvement Act prompt corrective action provisions.
Refer to Note 14 of the Notes to Consolidated Financial
50 U.S. Bancorp 2025 Annual Report
Statements for further detail on the Company’s minimum
required capital ratios and the minimum “well-capitalized”
thresholds under the prompt corrective action framework.
Beginning in 2022, the Company began to phase into its
regulatory capital requirements the cumulative deferred
impact of its 2020 adoption of the accounting guidance
related to the impairment of financial instruments based on
the current expected credit losses (“CECL”) methodology
plus 25 percent of its quarterly credit reserve increases
during 2020 and 2021. This cumulative deferred impact
was phased into the Company’s regulatory capital during
2022 through 2024. Beginning January 1, 2025, the
regulatory capital requirements reflect the full
implementation of the CECL methodology.
Table 22 provides a summary of statutory regulatory
capital ratios in effect for the Company at December 31,
2025 and 2024. All regulatory ratios exceeded regulatory
“well-capitalized” requirements. As of December 31, 2025,
U.S. Bank National Association (“USBNA”) also met all
regulatory capital ratios to be considered “well-capitalized”.
There are no conditions or events since December 31,
2025 that management believes have changed the risk-
based category of USBNA.
In July 2023, the U.S. federal bank regulatory authorities
proposed a rule to refine the Basel III capital framework for
financial institutions. The proposal incorporates elements of
the international Basel Committee’s post-crisis reforms,
including the Fundamental Review of the Trading Book to
replace the existing market risk rule, and introduces new
standardized approaches for credit risk, operational risk
and credit valuation adjustment (CVA) risk. However, the
federal banking regulators have indicated they expect to
issue a revised proposal, which is expected to modify
aspects of the July 2023 proposal, including those
described above. The proposal’s finalization could revise
the risk-based capital measures applicable to the
Company; however, until the proposal is finalized the exact
impacts are unknown.
The Company believes certain other capital ratios are
useful in evaluating its capital utilization and adequacy.
Refer to “Non-GAAP Financial Measures” beginning on
page 54 for further information on these other capital ratios.
As an approved mortgage seller and servicer, USBNA,
through its mortgage banking division, is required to
maintain various levels of shareholder’s equity, as specified
by various agencies, including the United States
Department of Housing and Urban Development,
Government National Mortgage Association, Federal Home
Loan Mortgage Corporation and the Federal National
Mortgage Association. At December 31, 2025, USBNA met
these requirements.
TABLE 22 Regulatory Capital Ratios
At December 31 (Dollars in Millions)
2025
2024
Basel III standardized approach:
Common shareholders’ equity
$ 58,385
$ 51,770
Less intangible assets
Goodwill (net of deferred tax liability)
(11,603)
(11,508)
Other disallowed intangible assets (net of deferred tax liability)
(1,507)
(1,846)
Other(a)
6,390
9,461
Common equity tier 1 capital
51,665
47,877
Qualifying preferred stock
6,808
6,808
Noncontrolling interests eligible for tier 1 capital
450
450
Other
(6)
(6)
Tier 1 capital
58,917
55,129
Eligible portion of allowance for credit losses
5,970
5,616
Subordinated debt and noncontrolling interests eligible for tier 2 capital
3,200
3,630
Tier 2 capital
9,170
9,246
Total risk-based capital
$ 68,087
$ 64,375
Risk-weighted assets
$ 480,382
$ 450,498
Common equity tier 1 capital as a percent of risk-weighted assets
10.8 %
10.6 % (b)
Tier 1 capital as a percent of risk-weighted assets
12.3
12.2
Total risk-based capital as a percent of risk-weighted assets
14.2
14.3
Tier 1 capital as a percent of adjusted quarterly average assets (leverage ratio)
8.7
8.3
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure (total leverage exposure
ratio)
7.1
6.8
(a) Includes the impact of items included in other comprehensive income (loss), such as unrealized gains (losses) on available-for-sale securities, accumulated net gains on cash flow
hedges, pension liability adjustments, and the portion of deferred tax assets related to net operating loss and tax credit carryforwards not eligible for common equity tier 1 capital.
(b) The Company’s common equity tier 1 capital to risk-weighted assets ratio, reflecting the full implementation of the CECL methodology, was 10.5 percent at December 31, 2024. See
Non-GAAP Financial Measures beginning on page 54.
51
TABLE 23 Business Segment Financial Performance
Wealth, Corporate, Commercial and
Institutional Banking
Consumer and
Business Banking
Payment Services
Year Ended December 31
(Dollars in Millions)
2025
2024
Percent
Change
2025
2024
Percent
Change
2025
2024
Percent
Change
Condensed Income Statement
Net interest income (taxable-equivalent basis) $
7,214 $
7,613
(5.2)% $
7,248 $
7,625
(4.9)% $
3,048 $
2,831
7.7 %
Noninterest income
4,869
4,538
7.3
1,625
1,606
1.2
4,359
4,195
3.9
Total net revenue
12,083
12,151
(.6)
8,873
9,231
(3.9)
7,407
7,026
5.4
Noninterest expense
5,368
5,417
(.9)
6,337
6,532
(3.0)
4,126
3,962
4.1
Income (loss) before provision and income
taxes
6,715
6,734
(.3)
2,536
2,699
(6.0)
3,281
3,064
7.1
Provision for credit losses
546
385
41.8
238
182
30.8
1,570
1,614
(2.7)
Income (loss) before income taxes
6,169
6,349
(2.8)
2,298
2,517
(8.7)
1,711
1,450
18.0
Income taxes and taxable-equivalent
adjustment
1,543
1,588
(2.8)
575
630
(8.7)
429
363
18.2
Net income (loss)
4,626
4,761
(2.8)
1,723
1,887
(8.7)
1,282
1,087
17.9
Net (income) loss attributable to
noncontrolling interests
—
—
—
—
—
—
—
—
—
Net income (loss) attributable to U.S. Bancorp $
4,626 $
4,761
(2.8)
$
1,723 $
1,887
(8.7)
$
1,282 $
1,087
17.9
Average Balance Sheet
Loans
$ 183,254 $ 172,517
6.2
$ 148,543 $ 155,039
(4.2)
$ 42,689 $ 41,080
3.9
Goodwill
4,826
4,825
—
4,326
4,326
—
3,444
3,357
2.6
Other intangible assets
794
981
(19.1)
4,222
4,539
(7.0)
254
277
(8.3)
Assets
213,156
201,415
5.8
162,080
168,862
(4.0)
48,007
47,166
1.8
Noninterest-bearing deposits
55,920
56,814
(1.6)
19,461
20,770
(6.3)
2,524
2,685
(6.0)
Interest-bearing deposits
216,953
216,083
.4
201,223
199,155
1.0
95
95
—
Total deposits
272,873
272,897
—
220,684
219,925
.3
2,619
2,780
(5.8)
Total U.S. Bancorp shareholders’ equity
22,018
21,440
2.7
13,478
14,424
(6.6)
10,310
10,005
3.0
Treasury and
Corporate Support
Consolidated
Company
Year Ended December 31
(Dollars in Millions)
2025
2024
Percent
Change
2025
2024
Percent
Change
Condensed Income Statement
Net interest income (taxable-equivalent basis) $
(745) $ (1,660)
55.1 % $ 16,765 $ 16,409
2.2 %
Noninterest income
1,038
707
46.8
11,891
11,046
7.6
Total net revenue
293
(953)
*
28,656
27,455
4.4
Noninterest expense
1,006
1,277
(21.2)
16,837
17,188
(2.0)
Income (loss) before provision and income
taxes
(713)
(2,230)
68.0
11,819
10,267
15.1
Provision for credit losses
(168)
57
*
2,186
2,238
(2.3)
Income (loss) before income taxes
(545)
(2,287)
76.2
9,633
8,029
20.0
Income taxes and taxable-equivalent
adjustment
(510)
(881)
42.1
2,037
1,700
19.8
Net income (loss)
(35)
(1,406)
97.5
7,596
6,329
20.0
Net (income) loss attributable to
noncontrolling interests
(26)
(30)
13.3
(26)
(30)
13.3
Net income (loss) attributable to U.S. Bancorp $
(61) $ (1,436)
95.8
$
7,570 $
6,299
20.2
Average Balance Sheet
Loans
$
5,774 $
5,239
10.2
$ 380,260 $ 373,875
1.7
Goodwill
—
—
—
12,596
12,508
.7
Other intangible assets
7
9
(22.2)
5,277
5,806
(9.1)
Assets
253,297
246,571
2.7
676,540
664,014
1.9
Noninterest-bearing deposits
2,603
2,738
(4.9)
80,508
83,007
(3.0)
Interest-bearing deposits
10,339
11,175
(7.5)
428,610
426,508
.5
Total deposits
12,942
13,913
(7.0)
509,118
509,515
(.1)
Total U.S. Bancorp shareholders’ equity
16,145
11,337
42.4
61,951
57,206
8.3
*
Not meaningful
52 U.S. Bancorp 2025 Annual Report
Business Segment Financial Review
The Company’s major business segments are Wealth,
Corporate, Commercial and Institutional Banking,
Consumer and Business Banking, Payment Services, and
Treasury and Corporate Support.
Basis for Financial Presentation Business segment
results are derived from the Company’s business unit
profitability reporting systems by specifically attributing
managed balance sheet assets, deposits and other
liabilities and their related income or expense. Refer to Note
23 of the Notes to Consolidated Financial Statements for
further information on the business segments’ basis for
financial presentation.
Designations, assignments and allocations change from
time to time as management systems are enhanced,
methods of evaluating performance or product lines
change or business segments are realigned to better
respond to the Company’s diverse customer base. During
2025 and 2024, certain organization and methodology
changes were made, including revising the Company’s
business segment funds transfer-pricing methodology
related to deposits and loans during the second quarter of
2024. Prior period results were recast and presented on a
comparable basis.
Wealth, Corporate, Commercial and Institutional
Banking Wealth, Corporate, Commercial and Institutional
Banking provides core banking, specialized lending,
transaction and payment processing, capital markets, asset
management, and brokerage and investment related
services to wealth, middle market, large corporate,
commercial real estate, government and institutional
clients. Wealth, Corporate, Commercial and Institutional
Banking contributed $4.6 billion of the Company’s net
income in 2025, or a decrease of $135 million (2.8 percent),
compared with 2024.
Net revenue decreased $68 million (0.6 percent) in
2025, compared with 2024. Net interest income, on a
taxable-equivalent basis, decreased $399 million (5.2
percent) in 2025, compared with 2024, primarily due to
higher funding costs. Noninterest income increased $331
million (7.3 percent) in 2025, compared with 2024, primarily
due to business growth and favorable market conditions
impacting trust and investment management fees, and
higher service charges due to an increase in treasury
management fees.
Noninterest expense decreased $49 million (0.9
percent) in 2025, compared with 2024, primarily due to
lower net shared services expense. The provision for credit
losses increased $161 million (41.8 percent) in 2025,
compared with 2024, primarily due to loan growth and
increased reserves on certain assets.
Consumer and Business Banking Consumer and
Business Banking comprises consumer banking, small
business banking and consumer lending. Products and
services are delivered through banking offices, telephone
servicing and sales, online services, direct mail, ATMs,
mobile devices, distributed mortgage loan officers, and
intermediary relationships including auto dealerships,
mortgage banks, and strategic business partners.
Consumer and Business Banking contributed $1.7 billion of
the Company’s net income in 2025, or a decrease of
$164 million (8.7 percent), compared with 2024.
Net revenue decreased $358 million (3.9 percent) in
2025, compared with 2024. Net interest income, on a
taxable-equivalent basis, decreased $377 million (4.9
percent) in 2025, compared with 2024, primarily due to
changes in deposit mix, along with the impact of loan sales
in the second quarter of 2025. Noninterest income
increased $19 million (1.2 percent) in 2025, compared with
2024, primarily due to higher mortgage banking revenue
driven by gain on sale activity.
Noninterest expense decreased $195 million (3.0
percent) in 2025, compared with 2024, primarily due to
lower compensation and employee benefits expense. The
provision for credit losses increased $56 million (30.8
percent) in 2025, compared with 2024, primarily due to less
favorable trends in housing prices and higher net charge-
offs.
Payment Services Payment Services includes consumer
and business credit cards, stored-value cards, debit cards,
corporate, government and purchasing card services and
merchant processing. Payment Services contributed $1.3
billion of the Company’s net income in 2025, or an increase
of $195 million (17.9 percent), compared with 2024.
Net revenue increased $381 million (5.4 percent) in
2025, compared with 2024. Net interest income, on a
taxable-equivalent basis, increased $217 million (7.7
percent) in 2025, compared with 2024, primarily due to
higher average loan balances, higher loan fees and lower
funding costs. Noninterest income increased $164 million
(3.9 percent) in 2025, compared with 2024, driven by
higher merchant processing services and card revenue
mainly due to higher sales volume.
Noninterest expense increased $164 million (4.1
percent) in 2025, compared with 2024, reflecting higher
marketing and business development expense and net
shared services expense. The provision for credit losses
decreased $44 million (2.7 percent) in 2025, compared with
2024, primarily due to improved portfolio mix and stabilizing
credit quality.
Treasury and Corporate Support Treasury and Corporate
Support includes the Company’s investment portfolios,
funding, capital management, interest rate risk
management, income taxes not allocated to the business
lines, including most investments in tax-advantaged
projects, and the residual aggregate of those expenses
associated with corporate activities that are managed on a
consolidated basis. Treasury and Corporate Support
recorded a net loss of $61 million in 2025, compared with a
net loss of $1.4 billion in 2024.
Net revenue increased $1.2 billion in 2025, compared
with 2024. Net interest income, on a taxable-equivalent
basis, increased $915 million (55.1 percent) in 2025,
compared with 2024, primarily due to lower funding costs
as well as the impact of fixed asset repricing in the
investment securities portfolio. Noninterest income
increased $331 million (46.8 percent) in 2025, compared
53
with 2024, primarily due to higher capital markets revenue,
higher tax credit investment activity and lower net securities
losses.
Noninterest expense decreased $271 million (21.2
percent) in 2025, compared with 2024, primarily due to the
impacts in 2024 of merger and integration charges and the
FDIC special assessment charges, along with lower
compensation and employee benefits expense in 2025. The
provision for credit losses was $225 million lower in 2025,
compared with 2024, primarily due to stabilizing economic
conditions.
Income taxes are assessed to each business segment
at a managerial tax rate of 25.0 percent with the residual
tax expense or benefit to arrive at the consolidated effective
tax rate included in Treasury and Corporate Support.
Non-GAAP Financial Measures
In addition to capital ratios defined by banking regulators,
the Company considers various other measures when
evaluating capital utilization and adequacy, including:
• Tangible common equity to tangible assets,
• Tangible common equity to risk-weighted assets,
• Common equity tier 1 capital to risk-weighted assets,
reflecting the full implementation of the CECL
methodology,
• Tangible book value per common share, and
• Return on tangible common equity.
These capital measures are viewed by management as
useful additional methods of evaluating the Company’s
utilization of its capital held and the level of capital available
to withstand unexpected negative market or economic
conditions. Additionally, presentation of these measures
allows investors, analysts and banking regulators to assess
the Company’s capital position and use of capital relative to
other financial services companies. These capital measures
are not defined in generally accepted accounting principles
(“GAAP”) or in banking regulations. In addition, certain
capital measures related to prior periods are presented on
the same basis as those in the current period. The effective
capital ratios defined by banking regulations for these
periods were subject to certain transitional provisions for
the implementation of accounting guidance related to
impairment of financial instruments based on the CECL
methodology. As a result, these capital measures disclosed
by the Company may be considered non-GAAP financial
measures. Management believes this information helps
investors assess trends in the Company’s capital utilization
and adequacy.
The Company also discloses net interest income and
related ratios and analysis on a taxable-equivalent basis,
which may also be considered non-GAAP financial
measures. The Company believes this presentation to be
the preferred industry measurement of net interest income
as it provides a relevant comparison of net interest income
arising from taxable and tax-exempt sources. In addition,
certain performance measures utilize net interest income on
a taxable-equivalent basis, including the efficiency ratio
and net interest margin.
The Company also discloses percent of net revenue for
its business lines excluding Treasury and Corporate
Support to highlight the contributions to net revenue from
the Company's core revenue-producing businesses.
Adjusted noninterest expense, adjusted net income,
adjusted diluted earnings per common share, and adjusted
operating leverage exclude notable items. Management
uses these measures in their analysis of the Company’s
performance and believes these measures provide a
greater understanding of ongoing operations and enhance
comparability of results with prior periods.
There may be limits in the usefulness of these measures
to investors. As a result, the Company encourages readers
to consider the consolidated financial statements and other
financial information contained in this report in their entirety,
and not to rely on any single financial measure.
54 U.S. Bancorp 2025 Annual Report
The following tables show the Company’s calculation of these non-GAAP financial measures:
At December 31 (Dollars in Millions)
2025
2024
2023
Total equity
$ 65,651
$ 59,040
$ 55,771
Preferred stock
(6,808)
(6,808)
(6,808)
Noncontrolling interests
(458)
(462)
(465)
Common equity(1)
58,385
51,770
48,498
Goodwill (net of deferred tax liability)(a)
(11,603)
(11,508)
(11,480)
Intangible assets (net of deferred tax liability), other than mortgage servicing rights
(1,507)
(1,846)
(2,278)
Tangible common equity(2)
45,275
38,416
34,740
Common equity tier 1 capital, determined in accordance with transitional regulatory capital
requirements related to the CECL methodology implementation
47,877
44,947
Adjustments(b)
(433)
(866)
Common equity tier 1 capital, reflecting the full implementation of the CECL methodology(3)
47,444
44,081
Total assets(4)
692,345
678,318
663,491
Goodwill (net of deferred tax liability)(a)
(11,603)
(11,508)
(11,480)
Intangible assets (net of deferred tax liability), other than mortgage servicing rights
(1,507)
(1,846)
(2,278)
Tangible assets(5)
679,235
664,964
649,733
Risk-weighted assets, determined in accordance with prescribed regulatory capital
requirements effective for the Company(6)
480,382
450,498
453,390
Adjustments(c)
(368)
(736)
Risk-weighted assets, reflecting the full implementation of the CECL methodology(7)
450,130
452,654
Ratios
Common equity to assets(1)/(4)
8.4 %
7.6 %
7.3 %
Tangible common equity to tangible assets(2)/(5)
6.7
5.8
5.3
Tangible common equity to risk-weighted assets(2)/(6)
9.4
8.5
7.7
Common equity tier 1 capital to risk-weighted assets, reflecting the full implementation of the
CECL methodology(3)/(7)
10.5
9.7
(a) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements.
(b) Includes the estimated increase in the allowance for credit losses related to the adoption of the CECL methodology net of deferred taxes.
(c) Includes the impact of the estimated increase in the allowance for credit losses related to the adoption of the CECL methodology.
Year Ended December 31 (Dollars in Millions)
2025
2024
2023
Net interest income
$ 16,649
$ 16,289
$ 17,396
Taxable-equivalent adjustment(a)
116
120
131
Net interest income, on a taxable-equivalent basis
16,765
16,409
17,527
Net interest income, on a taxable-equivalent basis (as calculated above)
16,765
16,409
17,527
Noninterest income
11,891
11,046
10,617
Less: Securities gains (losses), net
(61)
(154)
(145)
Total net revenue, excluding net securities gains (losses)(1)
28,717
27,609
28,289
Noninterest expense(2)
16,837
17,188
18,873
Efficiency ratio(2)/(1)
58.6 %
62.3 %
66.7 %
(a) Based on federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes.
55
Year Ended December 31, 2025 (Dollars in Millions)
Net Revenue
Net Revenue as a
Percent of the
Consolidated Company
Net Revenue as a Percent of the
Consolidated Company
Excluding Treasury and
Corporate Support
Wealth, Corporate, Commercial and Institutional Banking
$
12,083
42 %
43 %
Consumer and Business Banking
8,873
31
31
Payment Services
7,407
26
26
Treasury and Corporate Support
293
1
Consolidated Company
28,656
100 %
Less: Treasury and Corporate Support
293
Consolidated Company excluding Treasury and Corporate Support
$
28,363
100 %
Year Ended December 31 (Dollars in Millions)
2025
2024
2023
Net income applicable to U.S. Bancorp common shareholders
$
7,194
$
5,909
$
5,051
Intangible amortization (net-of-tax)
393
450
502
Net income applicable to U.S. Bancorp common shareholders, excluding
intangibles amortization(1)
7,587
6,359
5,553
Average total equity
62,409
57,668
54,125
Average preferred stock
(6,808)
(6,808)
(6,808)
Average noncontrolling interests
(458)
(462)
(465)
Average goodwill (net of deferred tax liability)(a)
(11,566)
(11,485)
(11,485)
Average intangible assets (net of deferred tax liability), other than mortgage
servicing rights
(1,691)
(2,040)
(2,480)
Average tangible common equity(2)
41,886
36,873
32,887
Return on tangible common equity(1)/(2)
18.1 %
17.2 %
16.9 %
(a) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements.
At December 31 (Dollars in Millions, Except Per Share Data)
2025
2024
2023
Common equity
$
58,385 $
51,770 $
48,498
Goodwill (net of deferred tax liability)(a)
(11,603)
(11,508)
(11,480)
Intangible assets (net of deferred tax liability), other than mortgage servicing rights
(1,507)
(1,846)
(2,278)
Tangible common equity(1)
45,275
38,416
34,740
Common shares outstanding(2)
1,555
1,560
1,558
Tangible book value per common share(1)/(2)
$
29.12 $
24.63 $
22.30
(a) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements.
Year Ended December 31 (Dollars in Millions)
2025
2024
Percent Change
Net income applicable to U.S. Bancorp common shareholders(1)
$
7,194 $
5,909
Less: Notable items, including the impact of earnings allocated to participating stock awards(a)
—
(298)
Net income applicable to U.S. Bancorp common shareholders, excluding notable items(2)
7,194
6,207
Average diluted common shares outstanding(3)
1,558
1,561
Diluted earnings per common share(1)/(3)
$
4.62 $
3.79
21.9 %
Diluted earnings per common share, excluding notable items(2)/(3)
$
4.62 $
3.98
16.1 %
(a) Notable items of $400 million ($300 million net-of-tax) for the year ended December 31, 2024 included $109 million of lease impairments and operational efficiency actions, $155
million of merger and integration-related charges and $136 million for the increase in the FDIC special assessment instituted in 2023.
56 U.S. Bancorp 2025 Annual Report
Year Ended December 31 (Dollars in Millions)
2025
2024
Percent Change
Net interest income
$ 16,649
$
16,289
Taxable-equivalent adjustment(a)
116
120
Net interest income, on a taxable-equivalent basis
16,765
16,409
Net interest income, on a taxable-equivalent basis (as calculated above)
16,765
16,409
Noninterest income
11,891
11,046
Total net revenue
28,656
27,455
4.4 % (1)
Less: Securities gains (losses), net
(61)
(154)
Total net revenue, excluding securities gains (losses), net
28,717
27,609
4.0 % (2)
Noninterest expense
16,837
17,188
(2.0) % (3)
Less: Notable items(b)
—
400
Total noninterest expense, excluding notable items
16,837
16,788
.3 % (4)
Operating leverage(1)-(3)
6.4%
Operating leverage, excluding securities gains (losses) and notable items(2)-(4)
3.7%
(a) Based on a federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes.
(b) Notable items of $400 million ($300 million net-of-tax) for the year-ended December 31, 2024 included $109 million of lease impairments and operational efficiency actions, $155
million of merger and integration-related charges and $136 million for the increase in the FDIC special assessment instituted in 2023.
Accounting Changes
Note 2 of the Notes to Consolidated Financial Statements
discusses accounting standards recently issued but not yet
required to be adopted and the expected impact of these
changes in accounting standards. To the extent the
adoption of new accounting standards materially affects the
Company’s financial condition or results of operations, the
impacts are discussed in the applicable section(s) of
Management’s Discussion and Analysis and the Notes to
Consolidated Financial Statements.
Critical Accounting Policies
The accounting and reporting policies of the Company
comply with accounting principles generally accepted in
the United States and conform to general practices within
the banking industry. The preparation of financial
statements in conformity with GAAP requires management
to make estimates and assumptions. The Company’s
financial position and results of operations can be affected
by these estimates and assumptions, which are integral to
understanding the Company’s financial statements. Critical
accounting policies are those policies management
believes are the most important to the portrayal of the
Company’s financial condition and results, and require
management to make estimates that are difficult, subjective
or complex. Most accounting policies are not considered
by management to be critical accounting policies. Several
factors are considered in determining whether or not a
policy is critical in the preparation of financial statements.
These factors include, among other things, whether the
estimates are significant to the financial statements, the
nature of the estimates, the ability to readily validate the
estimates with other information (including third-party
sources or available prices), sensitivity of the estimates to
changes in economic conditions and whether alternative
accounting methods may be utilized under GAAP.
Management has discussed the development and the
selection of critical accounting policies with the Company’s
Audit Committee.
Significant accounting policies are discussed in Note 1
of the Notes to Consolidated Financial Statements. Those
policies considered to be critical accounting policies are
described below.
Allowance for Credit Losses Management’s evaluation of
the appropriate allowance for credit losses is often the most
critical of all the accounting estimates for a banking
institution. It is an inherently subjective process impacted
by many factors as discussed throughout the
Management’s Discussion and Analysis section of the
Annual Report.
The methods utilized to estimate the allowance for credit
losses, key assumptions and quantitative and qualitative
information considered by management in determining the
appropriate allowance for credit losses at December 31,
2025 are discussed in the “Credit Risk Management”
section. Although methodologies utilized to determine each
element of the allowance reflect management’s assessment
of credit risk, imprecision exists in these measurement tools
due in part to subjective judgments involved and an
inherent lag in the data available to quantify current
conditions and events that affect credit loss reserve
estimates.
Given the many quantitative variables and subjective
factors affecting the credit portfolio, changes in the
allowance for credit losses may not directly coincide with
changes in risk ratings or delinquency status within loan
and lease portfolios. This is in part due to the timing of the
risk rating process in relation to changes in the business
cycle, the exposure and mix of loans within risk rating
categories, levels of nonperforming loans and the timing of
charge-offs and expected recoveries. The allowance for
credit losses measures the expected loss content on the
remaining portfolio exposure, while nonperforming loans
57
and net charge-offs are measures of specific impairment
events that have already been confirmed. Therefore, the
degree of change in the forward-looking expected loss in
the allowance may differ from the level of changes in
nonperforming loans and net charge-offs. Management
maintains an appropriate allowance for credit losses by
updating allowance rates to reflect changes in expected
losses, including expected changes in economic or
business cycle conditions. Some factors considered in
determining the appropriate allowance for credit losses are
more readily quantifiable while other factors require
extensive qualitative judgment in determining the overall
level of the allowance for credit losses.
The Company considers a range of economic scenarios
in its determination of the allowance for credit losses. These
scenarios are constructed with interrelated projections of
multiple economic variables, and loss estimates are
produced that consider the historical correlation of those
economic variables with credit losses, and also the
expectation that conditions will eventually normalize over
the longer run. Scenarios worse than the Company’s
expected outcome at December 31, 2025 include risks of
persisting inflationary pressures, continued elevated
interest rates, declines in residential and commercial real
estate prices, high unemployment rates, supply shortages,
changing fiscal policy and geopolitical risks, which could
all precipitate a moderate to severe recession and result in
increased credit losses.
Under the range of economic scenarios considered, the
allowance for credit losses would have been lower by $1.0
billion or higher by $2.5 billion. This range reflects the
sensitivity of the allowance for credit losses specifically
related to the scenarios and weights considered as of
December 31, 2025, and does not consider other potential
adjustments that could increase or decrease loss estimates
calculated using alternative economic scenarios.
Because several quantitative and qualitative factors are
considered in determining the allowance for credit losses,
these sensitivity analyses do not necessarily reflect the
nature and extent of future changes in the allowance for
credit losses. They are intended to provide insights into the
impact of adverse changes in the economy on the
Company’s modeled loss estimates for the loan portfolio
and do not imply any expectation of future deterioration in
the risk rating or loss rates. Given current processes
employed by the Company, management believes the risk
ratings and loss model estimates currently assigned are
appropriate. It is possible that others, given the same
information, may at any point in time reach different
reasonable conclusions that could be significant to the
Company’s financial statements. Refer to the “Analysis and
Determination of the Allowance for Credit Losses” section
for further information.
Fair Value Estimates A portion of the Company’s assets
and liabilities are carried at fair value on the Consolidated
Balance Sheet, with changes in fair value recorded either
through earnings or other comprehensive income (loss) in
accordance with applicable accounting principles
generally accepted in the United States. These include all
of the Company’s available-for-sale investment securities,
derivatives and other trading instruments, MSRs, certain
time deposits and structured long-term notes and
substantially all MLHFS. The estimation of fair value also
affects other loans held for sale, which are recorded at the
lower-of-cost-or-fair value. The determination of fair value is
important for certain other assets that are periodically
evaluated for impairment using fair value estimates,
including goodwill.
Fair value is defined as the exchange price at which an
asset or liability could be exchanged in a current
transaction between willing, unrelated parties, other than in
a forced or liquidation sale. Fair value is based on quoted
market prices in an active market, or if market prices are
not available, is estimated using models employing
techniques such as matrix pricing or discounting expected
cash flows. The significant assumptions used in the
models, which include assumptions for interest rates,
discount rates, prepayments and credit losses, are
independently verified against observable market data
where possible. Where observable market data is not
available, the estimate of fair value becomes more
subjective and involves a high degree of judgment. In this
circumstance, fair value is estimated based on
management’s judgment regarding the value that market
participants would assign to the asset or liability. This
valuation process takes into consideration factors such as
market illiquidity. Imprecision in estimating these factors
can impact the amount recorded on the balance sheet for a
particular asset or liability with related impacts to earnings
or other comprehensive income (loss).
When available, trading and available-for-sale securities
are valued based on quoted market prices. However,
certain securities are traded less actively and, therefore,
quoted market prices may not be available. The
determination of fair value may require benchmarking to
similar instruments or performing a discounted cash flow
analysis using estimates of future cash flows and
prepayment, interest and default rates. For more
information on investment securities, refer to Note 4 of the
Notes to Consolidated Financial Statements.
As few derivative contracts are listed on an exchange,
the majority of the Company’s derivative positions are
valued using valuation techniques that use readily
observable market inputs. Certain derivatives, however,
must be valued using techniques that include unobservable
inputs. For these instruments, the significant assumptions
must be estimated and, therefore, are subject to judgment.
Note 19 of the Notes to Consolidated Financial Statements
provides a summary of the Company’s derivative positions.
Refer to Note 21 of the Notes to Consolidated Financial
Statements for additional information regarding estimations
of fair value.
Mortgage Servicing Rights MSRs are capitalized as
separate assets when loans are sold and servicing is
retained or if they are purchased from others. The
Company records MSRs at fair value. Because MSRs do
not trade in an active market with readily observable prices,
the Company determines the fair value by estimating the
present value of the asset’s future cash flows utilizing
market-based prepayment rates, option adjusted spread,
58 U.S. Bancorp 2025 Annual Report
and other assumptions validated through comparison to
trade information, industry surveys and independent third-
party valuations. Changes in the fair value of MSRs are
recorded in earnings during the period in which they occur.
Risks inherent in the valuation of MSRs include higher than
expected prepayment rates and/or delayed receipt of cash
flows. The Company utilizes derivatives, including interest
rate swaps, swaptions, forward commitments to buy TBAs,
U.S. Treasury and SOFR futures and options on U.S.
Treasury futures, to mitigate the valuation risk. Refer to
Notes 9 and 21 of the Notes to Consolidated Financial
Statements for additional information on the assumptions
used in determining the fair value of MSRs and an analysis
of the sensitivity to changes in interest rates of the fair value
of the MSRs portfolio and the related derivative instruments
used to mitigate the valuation risk.
Income Taxes The Company estimates income tax
expense based on amounts expected to be owed to the
various tax jurisdictions in which it operates, including
federal, state and local domestic jurisdictions, and an
insignificant amount to foreign jurisdictions. The estimated
income tax expense is reported in the Consolidated
Statement of Income. Accrued taxes are reported in other
assets or other liabilities on the Consolidated Balance
Sheet and represent the net estimated amount due to or to
be received from taxing jurisdictions either currently or
deferred to future periods. Deferred taxes arise from
differences between assets and liabilities measured for
financial reporting purposes versus income tax reporting
purposes. Deferred tax assets are recognized if, in
management’s judgment, their realizability is determined to
be more likely than not. Uncertain tax positions that meet
the more likely than not recognition threshold are measured
to determine the amount of benefit to recognize. An
uncertain tax position is measured at the largest amount of
benefit management believes is more likely than not to be
realized upon settlement. In estimating accrued taxes, the
Company assesses the relative merits and risks of the
appropriate tax treatment considering statutory, judicial and
regulatory guidance in the context of the tax position.
Because of the complexity of tax laws and regulations,
interpretation can be difficult and subject to legal judgment
given specific facts and circumstances. It is possible that
others, given the same information, may at any point in time
reach different reasonable conclusions regarding the
estimated amounts of accrued taxes.
Changes in the estimate of accrued taxes occur
periodically due to changes in tax rates, interpretations of
tax laws, the status of examinations being conducted by
various taxing authorities, and newly enacted statutory,
judicial and regulatory guidance that impacts the relative
merits and risks of tax positions. These changes, when they
occur, affect accrued taxes and can be significant to the
operating results of the Company. Refer to Note 18 of the
Notes to Consolidated Financial Statements for additional
information regarding income taxes.
Controls and Procedures
Under the supervision and with the participation of the
Company’s management, including its principal executive
officer and principal financial officer, the Company has
evaluated the effectiveness of the design and operation of
its disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)). Based
upon this evaluation, the principal executive officer and
principal financial officer have concluded that, as of the
end of the period covered by this report, the Company’s
disclosure controls and procedures were effective.
During the fourth quarter of 2025, there was no change
made in the Company’s internal control over financial
reporting (as defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act) that has materially affected, or is
reasonably likely to materially affect, the Company’s internal
control over financial reporting.
The annual report of the Company’s management on
internal control over financial reporting is provided on page
60. The audit report of Ernst & Young LLP, the Company’s
independent accountants, regarding the Company’s
internal control over financial reporting is provided on page
61.
59
Report of Management
Responsibility for the financial statements and other information presented throughout this Annual Report rests with the
management of U.S. Bancorp. The Company believes the consolidated financial statements have been prepared in conformity
with accounting principles generally accepted in the United States and present the substance of transactions based on the
circumstances and management’s best estimates and judgment.
In meeting its responsibilities for the reliability of the financial statements, management is responsible for establishing and
maintaining an adequate system of internal control over financial reporting as defined by Rules 13a-15(f) and 15d-15(f) under the
Securities Exchange Act of 1934, as amended. The Company’s system of internal control is designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of publicly filed financial statements in accordance
with accounting principles generally accepted in the United States.
To test compliance, the Company carries out an extensive audit program. This program includes a review for compliance with
written policies and procedures and a comprehensive review of the adequacy and effectiveness of the system of internal control.
Although control procedures are designed and tested, it must be recognized that there are limits inherent in all systems of
internal control, and, therefore, errors and irregularities may nevertheless occur. Projection of any evaluation of effectiveness to
future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
The Board of Directors of the Company has an Audit Committee composed of directors who are independent of U.S. Bancorp.
The Audit Committee meets periodically with management, the internal auditors and the independent accountants to consider
audit results and to discuss internal accounting control, auditing and financial reporting matters.
Management assessed the effectiveness of the Company’s system of internal control over financial reporting as of December 31,
2025. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission in its Internal Control—Integrated Framework (2013 framework). Based on its assessment and those
criteria, management believes the Company maintained effective internal control over financial reporting as of December 31,
2025.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2025 has been audited by Ernst
& Young LLP, an independent registered public accounting firm, as stated in their accompanying report appearing on page 61.
60 U.S. Bancorp 2025 Annual Report
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of U.S. Bancorp
Opinion on Internal Control Over Financial Reporting
We have audited U.S. Bancorp’s internal control over financial reporting as of December 31, 2025, based on criteria established
in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(2013 framework) (the COSO criteria). In our opinion, U.S. Bancorp (the Company) maintained, in all material respects, effective
internal control over financial reporting as of December 31, 2025, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated
statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period
ended December 31, 2025, and the related notes and our report dated February 23, 2026, expressed an unqualified opinion
thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management.
Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are
a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk,
and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Minneapolis, Minnesota
February 23, 2026
61
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of U.S. Bancorp
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of U.S. Bancorp (the Company) as of December 31, 2025 and
2024, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of
the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated
financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in
Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(2013 framework), and our report dated February 23, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was
communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are
material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The
communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as
a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit
matter or on the accounts or disclosures to which it relates.
Allowance for Credit Losses
Description of the
Matter
The Company’s loan and lease portfolio and the associated allowance for credit losses (ACL), were
$391.3 billion and $7.9 billion as of December 31, 2025, respectively. The provision for credit losses was
$2.2 billion for the year ended December 31, 2025. As discussed in Notes 1 and 5 to the financial
statements, the ACL is established for current expected credit losses on the Company’s loan and lease
portfolio, including unfunded credit commitments, by utilizing forward-looking expected loss models.
When determining expected losses, the Company uses multiple probability weighted economic
scenarios over a reasonable and supportable forecast period and then fully reverts to historical loss
experience to estimate losses over the remaining asset lives. Model estimates are adjusted to consider
any relevant changes in portfolio composition, lending policies, underwriting standards, risk
management practices, economic conditions or other factors that would affect the accuracy of the
model. Additionally, management may adjust the ACL for other qualitative factors such as model
imprecision, imprecision in economic scenario assumptions, and emerging risks related to either
changes in the environment that are affecting specific portfolio segments, or changes in portfolio
concentrations.
Auditing management’s ACL estimate and related provision for credit losses was complex due to the
nature of the expected credit loss models and related model adjustments and the subjectivity and
judgment inherent in the evaluation of the probability weighted economic scenarios and qualitative
factor adjustments.
62 U.S. Bancorp 2025 Annual Report
How We
Addressed the
Matter in Our
Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of the
Company’s controls over the ACL process, including management’s controls over: 1) development of
baseline economic scenario and selection of alternative economic scenarios, implementation of these
scenarios and selection of the probability weights assigned to them; 2) expected loss models, including
model validation, implementation, performance monitoring, the completeness and accuracy of key inputs
and assumptions used in the models, and management’s assessment of model estimates and related
adjustments; 3) adjustments to reflect management’s consideration of qualitative factors; 4) the ACL
methodology and governance process.
With the support of specialists, we assessed the economic scenarios and related probability weights by,
among other procedures, evaluating management’s methodology and agreeing a sample of key
economic variables used to external sources. We also performed and considered the results of various
sensitivity analyses and analytical procedures, including comparison of a sample of the key economic
variables to alternative external sources, historical statistics and peer bank information.
With respect to expected loss models, with the support of specialists, we evaluated model calculation
design and reperformed the calculation for a sample of models. We also tested the appropriateness of
key inputs and assumptions used in these models by agreeing a sample of inputs to internal and external
sources. As to model adjustments, with the support of specialists, we evaluated management’s estimate
methodology and assessment of factors that could potentially impact the accuracy of expected loss
models. We also recalculated a sample of model adjustments and tested internal and external data used
by agreeing a sample of inputs to internal and external sources.
Regarding the completeness of qualitative factors identified and incorporated into measuring the ACL,
with the support of specialists, we evaluated the potential impact of imprecision in the expected loss
models and economic scenario assumptions; emerging risks related to changes in the environment
impacting specific portfolio segments and portfolio concentrations. We also evaluated and tested internal
and external data used in the qualitative adjustments by agreeing significant inputs and underlying data to
internal and external sources.
We evaluated the overall ACL amount, including model estimates and adjustments, qualitative factors
adjustments, and whether the recorded ACL appropriately reflects expected credit losses on the loan and
lease portfolio and unfunded credit commitments. We reviewed historical loss statistics, peer-bank
information, subsequent events and transactions and considered whether they corroborate or contradict
the Company’s measurement of the ACL. We searched for and evaluated information that corroborates or
contradicts management’s forecasted assumptions and related probability weights as well as
identification and measurement of adjustments to model estimates and qualitative factors.
We have served as the Company’s auditor since 2003.
Minneapolis, Minnesota
February 23, 2026
63
Consolidated Financial Statements and Notes Table of Contents
Consolidated Financial Statements
Consolidated Balance Sheet
65
Consolidated Statement of Income
66
Consolidated Statement of Comprehensive Income
67
Consolidated Statement of Shareholders’ Equity
68
Consolidated Statement of Cash Flows
69
Notes to Consolidated Financial Statements
Note 1 — Significant Accounting Policies
70
Note 2 — Accounting Changes
76
Note 3 — Restrictions on Cash and Due From Banks
77
Note 4 — Investment Securities
78
Note 5 — Loans and Allowance for Credit Losses
81
Note 6 — Leases
89
Note 7 — Accounting for Transfers and Servicing of Financial Assets and Variable Interest Entities
91
Note 8 — Premises and Equipment
92
Note 9 — Mortgage Servicing Rights
93
Note 10 — Intangible Assets
94
Note 11 — Deposits
95
Note 12 — Short-Term Borrowings
96
Note 13 — Long-Term Debt
96
Note 14 — Shareholders’ Equity
97
Note 15 — Earnings Per Share
102
Note 16 — Employee Benefits
102
Note 17 — Stock-Based Compensation
106
Note 18 — Income Taxes
107
Note 19 — Derivative Instruments
110
Note 20 — Netting Arrangements for Certain Financial Instruments and Securities Financing Activities
115
Note 21 — Fair Values of Assets and Liabilities
118
Note 22 — Guarantees and Contingent Liabilities
124
Note 23 — Business Segments
127
Note 24 — U.S. Bancorp (Parent Company)
131
Note 25 — Subsequent Events
132
64 U.S. Bancorp 2025 Annual Report
U.S. Bancorp
Consolidated Balance Sheet
At December 31 (Dollars in Millions)
2025
2024
Assets
Cash and due from banks
$
46,890 $
56,502
Investment securities
Held-to-maturity (fair value $67,079 and $66,275, respectively)
76,170
78,634
Available-for-sale ($294 and $320 pledged as collateral, respectively)(a)
90,838
85,992
Loans held for sale (including $2,353 and $2,251 of mortgage loans carried at fair value, respectively)
2,538
2,573
Loans
Commercial
153,958
139,484
Commercial real estate
48,920
48,859
Residential mortgages
115,885
118,813
Credit card
32,234
30,350
Other retail
40,338
42,326
Total loans
391,335
379,832
Less allowance for loan losses
(7,605)
(7,583)
Net loans
383,730
372,249
Premises and equipment
3,768
3,565
Goodwill
12,635
12,536
Other intangible assets
4,904
5,547
Other assets (including $2,585 and $7,501 of trading securities at fair value pledged as collateral,
respectively)(a)
70,872
60,720
Total assets
$
692,345 $
678,318
Liabilities and Shareholders’ Equity
Deposits
Noninterest-bearing
$
84,116 $
84,158
Interest-bearing (including $718 and $5,754 of time deposits carried at fair value, respectively)
438,100
434,151
Total deposits
522,216
518,309
Short-term borrowings
17,162
15,518
Long-term debt (including $1,414 and $391 of long-term debt carried at fair value, respectively)
60,764
58,002
Other liabilities
26,552
27,449
Total liabilities
626,694
619,278
Shareholders’ equity
Preferred stock
6,808
6,808
Common stock, $.01 par value per share, authorized: 4,000,000,000 shares; issued: 2025 and 2024 —
2,125,725,742 shares
21
21
Capital surplus
8,728
8,715
Retained earnings
80,906
76,863
Less cost of common stock in treasury: 2025 — 570,328,105 shares; 2024 — 565,929,654 shares
(24,283)
(24,065)
Accumulated other comprehensive income (loss)
(6,987)
(9,764)
Total U.S. Bancorp shareholders’ equity
65,193
58,578
Noncontrolling interests
458
462
Total equity
65,651
59,040
Total liabilities and equity
$
692,345 $
678,318
(a) Includes only collateral pledged by the Company where counterparties have the right to sell or pledge the collateral.
See Notes to Consolidated Financial Statements.
65
U.S. Bancorp
Consolidated Statement of Income
Year Ended December 31 (Dollars and Shares in Millions, Except Per Share Data)
2025
2024
2023
Interest Income
Loans
$ 22,368 $ 23,009 $ 22,324
Loans held for sale
165
173
147
Investment securities
5,398
5,111
4,485
Other interest income
3,039
3,373
3,051
Total interest income
30,970
31,666
30,007
Interest Expense
Deposits
10,151
11,688
8,775
Short-term borrowings
1,373
1,107
1,971
Long-term debt
2,797
2,582
1,865
Total interest expense
14,321
15,377
12,611
Net interest income
16,649
16,289
17,396
Provision for credit losses
2,186
2,238
2,275
Net interest income after provision for credit losses
14,463
14,051
15,121
Noninterest Income
Card revenue
1,735
1,679
1,630
Corporate payment products revenue
765
773
759
Merchant processing services
1,792
1,714
1,659
Trust and investment management fees
2,869
2,660
2,459
Service charges
1,302
1,253
1,306
Capital markets revenue
1,633
1,523
1,372
Mortgage banking revenue
645
627
540
Investment products fees
375
330
279
Securities gains (losses), net
(61)
(154)
(145)
Other
836
641
758
Total noninterest income
11,891
11,046
10,617
Noninterest Expense
Compensation and employee benefits
10,327
10,554
10,416
Net occupancy and equipment
1,227
1,246
1,266
Professional services
468
491
560
Marketing and business development
705
619
726
Technology and communications
2,211
2,074
2,049
Other intangibles
498
569
636
Merger and integration charges
—
155
1,009
Other
1,401
1,480
2,211
Total noninterest expense
16,837
17,188
18,873
Income before income taxes
9,517
7,909
6,865
Applicable income taxes
1,921
1,580
1,407
Net income
7,596
6,329
5,458
Net (income) loss attributable to noncontrolling interests
(26)
(30)
(29)
Net income attributable to U.S. Bancorp
$
7,570 $
6,299 $
5,429
Net income applicable to U.S. Bancorp common shareholders
$
7,194 $
5,909 $
5,051
Earnings per common share
$
4.62 $
3.79 $
3.27
Diluted earnings per common share
$
4.62 $
3.79 $
3.27
Average common shares outstanding
1,557
1,560
1,543
Average diluted common shares outstanding
1,558
1,561
1,543
See Notes to Consolidated Financial Statements.
66 U.S. Bancorp 2025 Annual Report
U.S. Bancorp
Consolidated Statement of Comprehensive Income
Year Ended December 31 (Dollars in Millions)
2025
2024
2023
Net income
$
7,596 $
6,329 $
5,458
Other Comprehensive Income (Loss)
Changes in unrealized gains (losses) on investment securities available-for-sale
2,355
(60)
1,500
Changes in unrealized gains (losses) on derivative hedges
400
(676)
(252)
Changes in debit valuation adjustments
(15)
1
—
Foreign currency translation
1
18
21
Changes in unrealized gains (losses) on retirement plans
212
245
(262)
Reclassification to earnings of realized (gains) losses
777
910
748
Income taxes related to other comprehensive income (loss)
(953)
(106)
(444)
Total other comprehensive income (loss)
2,777
332
1,311
Comprehensive income (loss)
10,373
6,661
6,769
Comprehensive (income) loss attributable to noncontrolling interests
(26)
(30)
(29)
Comprehensive income (loss) attributable to U.S. Bancorp
$ 10,347 $
6,631 $
6,740
See Notes to Consolidated Financial Statements.
67
U.S. Bancorp
Consolidated Statement of Shareholders’ Equity
U.S. Bancorp Shareholders
(Dollars and Shares in Millions, Except Per
Share Data)
Common
Shares
Outstanding
Preferred
Stock
Common
Stock
Capital
Surplus
Retained
Earnings
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss)
Total U.S.
Bancorp
Shareholders’
Equity
Noncontrolling
Interests
Total
Equity
Balance December 31, 2022
1,531 $ 6,808 $
21 $ 8,712 $ 71,901 $ (25,269) $
(11,407) $
50,766 $
466 $ 51,232
Change in accounting principle(a)
46
46
46
Net income (loss)
5,429
5,429
29
5,458
Other comprehensive income (loss)
1,311
1,311
1,311
Preferred stock dividends(b)
(350)
(350)
(350)
Common stock dividends ($1.93 per
share)
(3,000)
(3,000)
(3,000)
Issuance of common and treasury stock
28
(264)
1,205
941
941
Purchase of treasury stock
(1)
(62)
(62)
(62)
Distributions to noncontrolling interests
—
(29)
(29)
Net other changes in noncontrolling
interests
—
(1)
(1)
Stock option and restricted stock grants
225
225
225
Balance December 31, 2023
1,558 $ 6,808 $
21 $ 8,673 $ 74,026 $ (24,126) $
(10,096) $
55,306 $
465 $ 55,771
Net income (loss)
6,299
6,299
30
6,329
Other comprehensive income (loss)
332
332
332
Preferred stock dividends(c)
(352)
(352)
(352)
Common stock dividends ($1.98 per
share)
(3,110)
(3,110)
(3,110)
Issuance of common and treasury stock
6
(199)
234
35
35
Purchase of treasury stock
(4)
(173)
(173)
(173)
Distributions to noncontrolling interests
—
(30)
(30)
Net other changes in noncontrolling
interests
—
(3)
(3)
Stock option and restricted stock grants
241
241
241
Balance December 31, 2024
1,560 $ 6,808 $
21 $ 8,715 $ 76,863 $ (24,065) $
(9,764) $
58,578 $
462 $ 59,040
Net income (loss)
7,570
7,570
26
7,596
Other comprehensive income (loss)
2,777
2,777
2,777
Preferred stock dividends(d)
(329)
(329)
(329)
Common stock dividends ($2.04 per
share)
(3,198)
(3,198)
(3,198)
Issuance of common and treasury stock
6
(226)
272
46
46
Purchase of treasury stock
(11)
(490)
(490)
(490)
Distributions to noncontrolling interests
—
(26)
(26)
Net other changes in noncontrolling
interests
—
(4)
(4)
Stock option and restricted stock grants
239
239
239
Balance December 31, 2025
1,555 $ 6,808 $
21 $ 8,728 $ 80,906 $ (24,283) $
(6,987) $
65,193 $
458 $ 65,651
(a) Effective January 1, 2023, the Company adopted accounting guidance which removed the separate recognition and measurement of troubled debt restructurings. Upon adoption,
the Company reduced its allowance for credit losses and increased retained earnings net of deferred taxes through a cumulative-effect adjustment.
(b) Reflects dividends declared per share on the Company’s Series A, Series B, Series J, Series K, Series L, Series M, Series N, and Series O Non-Cumulative Perpetual Preferred
Stock of $6,439.904, $1,503.518, $1,325.00, $1,375.00, $937.50, $1,000.00, $925.00, and $1,125.00, respectively.
(c) Reflects dividends declared per share on the Company’s Series A, Series B, Series J, Series K, Series L, Series M, Series N, and Series O Non-Cumulative Perpetual Preferred
Stock of $6,537.806, $1,527.702, $1,325.00, $1,375.00, $937.50, $1,000.00, $925.00, and $1,125.00, respectively.
(d) Reflects dividends declared per share on the Company’s Series A, Series B, Series J, Series K, Series L, Series M, Series N and Series O Non-Cumulative Perpetual Preferred
Stock of $5,551.953, $1,281.530, $1,325.00, $1,375.00, $937.50, $1,000.00, $925.00, and $1,125.00, respectively.
See Notes to Consolidated Financial Statements.
68 U.S. Bancorp 2025 Annual Report
U.S. Bancorp
Consolidated Statement of Cash Flows
Year Ended December 31 (Dollars in Millions)
2025
2024
2023
Operating Activities
Net income attributable to U.S. Bancorp
$
7,570 $
6,299 $
5,429
Adjustments to reconcile net income to net cash provided by operating activities
Provision for credit losses
2,186
2,238
2,275
Depreciation and amortization of premises and equipment
377
370
382
Amortization of intangibles
498
569
636
(Gain) loss on sale of loans held for sale
(257)
(184)
7
(Gain) loss on sale of securities and other assets
1
123
119
Loans originated for sale, net of repayments
(22,116)
(24,225)
(26,936)
Proceeds from sales of loans held for sale
22,019
24,008
26,686
Other, net
(2,308)
2,152
(205)
Net cash provided by operating activities
7,970
11,350
8,393
Investing Activities
Proceeds from sales of available-for-sale investment securities
7,118
13,125
11,209
Proceeds from maturities of held-to-maturity investment securities
6,940
6,161
6,164
Proceeds from maturities of available-for-sale investment securities
6,981
6,006
6,314
Purchases of held-to-maturity investment securities
(3,956)
(246)
(932)
Purchases of available-for-sale investment securities
(15,858)
(35,886)
(8,342)
Net (increase) decrease in loans outstanding
(18,043)
(7,278)
3,829
Proceeds from sales of loans
6,797
645
5,707
Purchases of loans
(1,532)
(1,264)
(1,106)
Net increase in securities purchased under agreements to resell
(5,988)
(3,859)
(2,404)
Net cash paid for acquisitions
(36)
(103)
(330)
Other, net
(2,961)
(1,835)
(1,184)
Net cash (used in) provided by investing activities
(20,538)
(24,534)
18,925
Financing Activities
Net increase (decrease) in deposits
3,330
6,251
(12,567)
Net increase (decrease) in short-term borrowings
1,644
239
(16,508)
Proceeds from issuance of long-term debt
10,360
12,017
15,583
Principal payments or redemption of long-term debt
(9,052)
(6,042)
(4,084)
Proceeds from issuance of common stock
45
32
951
Repurchase of common stock
(489)
(173)
(62)
Cash dividends paid on preferred stock
(334)
(356)
(341)
Cash dividends paid on common stock
(3,168)
(3,092)
(2,970)
Other, net
(86)
(55)
—
Net cash provided by (used in) financing activities
2,250
8,821
(19,998)
Effect of exchange rate changes on cash and due from banks
706
(327)
330
Change in cash and due from banks
(9,612)
(4,690)
7,650
Cash and due from banks at beginning of period
56,502
61,192
53,542
Cash and due from banks at end of period
$
46,890 $
56,502 $
61,192
Supplemental Cash Flow Disclosures
Cash paid for income taxes
$
544 $
499 $
645
Cash paid for interest
14,388
15,382
12,282
Net noncash transfers to foreclosed property
27
24
26
Acquisitions
Assets acquired (sold)
$
43 $
106 $
(83)
Liabilities (assumed) sold
(7)
(3)
413
Net
$
36 $
103 $
330
See Notes to Consolidated Financial Statements.
69
Notes to Consolidated Financial Statements
NOTE 1 Significant Accounting Policies
U.S. Bancorp is a financial services holding company
headquartered in Minneapolis, Minnesota, serving millions
of local, national and global customers. U.S. Bancorp and
its subsidiaries (the “Company”) provide a full range of
financial services, including lending and depository
services through banking offices principally in the Midwest
and West regions of the United States, through online
services, over mobile devices and through other
distribution channels. The Company also engages in credit
card, merchant, and ATM processing, mortgage banking,
cash management, capital markets, insurance, trust and
investment management, brokerage, and leasing activities,
principally in domestic markets.
Basis of Presentation The consolidated financial
statements include the accounts of the Company and its
subsidiaries and all VIEs for which the Company has both
the power to direct the activities of the VIE that most
significantly impact the VIE’s economic performance, and
the obligation to absorb losses or right to receive benefits
of the VIE that could potentially be significant to the VIE.
Consolidation eliminates intercompany accounts and
transactions. Certain items in prior periods have been
reclassified to conform to the current period presentation.
Uses of Estimates The preparation of financial statements
in conformity with accounting principles generally accepted
in the United States requires management to make
estimates and assumptions that affect the amounts
reported in the financial statements and accompanying
notes. Actual experience could differ from those estimates
and assumptions.
Securities
Realized gains or losses on securities are determined on a
trade date basis based on the specific amortized cost of
the investments sold.
Trading Securities Securities held for resale are classified
as trading securities and are included in other assets and
reported at fair value. Changes in fair value and realized
gains or losses are reported in noninterest income.
Available-for-sale Securities Debt securities that are not
trading securities but may be sold before maturity in
response to changes in the Company’s interest rate risk
profile, funding needs, demand for collateralized deposits
by public entities or other reasons are carried at fair value
with unrealized net gains or losses reported within other
comprehensive income (loss). Declines in fair value related
to credit, if any, are recorded through the establishment of
an allowance for credit losses.
Held-to-maturity Securities Debt securities for which the
Company has the positive intent and ability to hold to
maturity are reported at historical cost adjusted for
amortization of premiums and accretion of discounts.
Expected credit losses, if any, are recorded through the
establishment of an allowance for credit losses.
Securities Purchased Under Agreements to Resell and
Securities Sold Under Agreements to Repurchase
Securities purchased under agreements to resell and
securities sold under agreements to repurchase are
accounted for as collateralized financing transactions with
a receivable or payable recorded at the amounts at which
the securities were acquired or sold, plus accrued interest.
Collateral requirements are continually monitored and
additional collateral is received or provided as required.
The Company records a receivable or payable for cash
collateral paid or received.
Equity Investments
Equity investments in entities where the Company has a
significant influence (generally between 20 percent and 50
percent ownership), but does not control the entity, are
accounted for using the equity method. Investments in
limited partnerships and similarly structured limited liability
companies where the Company’s ownership interest is
greater than 5 percent are accounted for using the equity
method. Equity investments not using the equity method
are accounted for at fair value with changes in fair value
and realized gains or losses reported in noninterest
income, unless fair value is not readily determinable, in
which case the investment is carried at cost subject to
adjustments for any observable market transactions on the
same or similar instruments of the investee. Most of the
Company’s equity investments do not have readily
determinable fair values. All equity investments are
evaluated for impairment at least annually and more
frequently if certain criteria are met.
Loans
The Company offers a broad array of lending products and
categorizes its loan portfolio into two segments, which is
the level at which it develops and documents a systematic
methodology to determine the allowance for credit losses.
The Company’s two loan portfolio segments are
commercial lending and consumer lending. The Company
further disaggregates its loan portfolio segments into
various classes based on their underlying risk
characteristics. The two classes within the commercial
lending segment are commercial loans and commercial
real estate loans. The three classes within the consumer
lending segment are residential mortgages, credit card
loans and other retail loans.
Originated Loans Held for Investment Loans the
Company originates as held for investment are reported at
the principal amount outstanding, net of unearned interest
income and deferred fees and costs, and any direct
principal charge-offs. Interest income is accrued on the
unpaid principal balances as earned. Loan and
commitment fees and certain direct loan origination costs
70 U.S. Bancorp 2025 Annual Report
are deferred and recognized over the life of the loan and/or
commitment period as yield adjustments.
Purchased Loans All purchased loans are recorded at fair
value at the date of purchase and those acquired on or
after January 1, 2020 are divided into those considered
PCD and those not considered PCD. An allowance for
credit losses is established for each population and
considers product mix, risk characteristics of the portfolio,
delinquency status and refreshed loan-to-value ratios when
possible. The allowance established for purchased loans
not considered PCD is recognized through provision
expense upon acquisition, whereas the allowance
established for loans considered PCD at acquisition is
offset by an increase in the basis of the acquired loans. Any
subsequent increases and decreases in the allowance
related to purchased loans, regardless of PCD status, are
recognized through provision expense, with charge-offs
charged to the allowance.
Commitments to Extend Credit Unfunded commitments
for residential mortgage loans intended to be held for sale
are considered derivatives and recorded in other assets
and other liabilities on the Consolidated Balance Sheet at
fair value with changes in fair value recorded in noninterest
income. All other unfunded loan commitments are not
considered derivatives and are not reported on the
Consolidated Balance Sheet. Reserves for credit exposure
on all other unfunded credit commitments are recorded in
other liabilities.
Allowance for Credit Losses The allowance for credit
losses is established for current expected credit losses on
the Company’s loan and lease portfolio, including unfunded
credit commitments. The allowance considers expected
losses for the remaining lives of the applicable assets, net
of expected recoveries. The allowance for credit losses is
increased through provisions charged to earnings and
reduced by net charge-offs. Management evaluates the
appropriateness of the allowance for credit losses on a
quarterly basis.
Multiple economic scenarios are considered over a
three-year reasonable and supportable forecast period,
which includes increasing consideration of historical loss
experience over years two and three. These economic
scenarios are constructed with interrelated projections of
multiple economic variables, and loss estimates are
produced that consider the historical correlation of those
economic variables with credit losses. After the forecast
period, the Company fully reverts to long-term historical
loss experience, adjusted for expected prepayments and
characteristics of the current loan and lease portfolio, to
estimate losses over the remaining life of the portfolio. The
economic scenarios are updated at least quarterly and are
designed to provide a range of reasonable estimates, both
better and worse than current expectations. Scenarios are
weighted based on the Company’s expectation of
economic conditions for the foreseeable future and reflect
significant judgment and consideration of economic
forecast uncertainty. Final loss estimates also consider
factors affecting credit losses not reflected in the scenarios,
due to the unique aspects of current conditions and
expectations. These factors may include, but are not limited
to, loan servicing practices, regulatory guidance, and/or
fiscal and monetary policy actions.
The allowance recorded for credit losses utilizes
forward-looking expected loss models to consider a variety
of factors affecting lifetime credit losses. These factors
include, but are not limited to, macroeconomic variables
such as unemployment rates, real estate prices, gross
domestic product levels, inflation, interest rates and
corporate bonds spreads, as well as loan and borrower
characteristics, such as internal risk ratings on commercial
loans and consumer credit scores, delinquency status,
collateral type and available valuation information,
consideration of end-of-term losses on lease residuals, and
the remaining term of the loan, adjusted for expected
prepayments. For each loan portfolio, including those loans
modified under various loan modification programs, model
estimates are adjusted as necessary to consider any
relevant changes in portfolio composition, lending policies,
underwriting standards, risk management practices,
economic conditions or other factors that would affect the
accuracy of the model. Expected credit loss estimates also
include consideration of expected cash recoveries on loans
previously charged-off or expected recoveries on collateral
dependent loans where recovery is expected through sale
of the collateral at fair value less selling costs. Where loans
do not exhibit similar risk characteristics, an individual
analysis is performed to consider expected credit losses.
For loans and leases that do not share similar risk
characteristics with a pool of loans, the Company
establishes individually assessed reserves. Reserves for
larger individual nonperforming loans in the commercial
lending segment are analyzed utilizing expected cash flows
discounted using the original effective interest rate, the
observable market price of the loan, or the fair value of the
collateral, less selling costs, for collateral-dependent loans
as appropriate. For smaller commercial loans collectively
evaluated for impairment, historical loss experience is also
incorporated into the allowance methodology applied to
this category of loans.
The Company’s methodology for determining the
appropriate allowance for credit losses also considers the
imprecision inherent in the methodologies used and
allocated to the various loan portfolios. As a result, amounts
determined under the methodologies described above are
adjusted by management to consider the potential impact
of other qualitative factors not captured in the quantitative
model adjustments which include, but are not limited to, the
following: model imprecision, imprecision in economic
scenario assumptions, and emerging risks related to either
changes in the environment that are affecting specific
portfolios, or changes in portfolio concentrations over time
that may affect model performance. The consideration of
these items results in adjustments to allowance amounts
included in the Company’s allowance for credit losses for
each loan portfolio.
The Company also assesses the credit risk associated
with off-balance sheet loan commitments and letters of
credit. The liability for off-balance sheet credit exposure
related to loan commitments and other credit guarantees is
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included in other liabilities. Because business processes
and credit risks associated with unfunded credit
commitments are essentially the same as for loans, the
Company utilizes similar processes to estimate its liability
for unfunded credit commitments.
The results of the analysis are evaluated quarterly to
confirm the estimates are appropriate for each specific loan
portfolio, as well as the entire loan portfolio, as the entire
allowance for credit losses is available for the entire loan
portfolio.
Credit Quality The credit quality of the Company’s loan
portfolios is assessed as a function of net credit losses,
levels of nonperforming assets and delinquencies, and
credit quality ratings as defined by the Company.
For all loan portfolio classes, loans are considered
past due based on the number of days delinquent except
for monthly amortizing loans which are classified delinquent
based upon the number of contractually required payments
not made (for example, two missed payments is considered
30 days delinquent). When a loan is placed on nonaccrual
status, unpaid accrued interest is reversed, reducing
interest income in the current period.
Commercial lending segment loans are generally placed
on nonaccrual status when the collection of principal and
interest has become 90 days past due or is otherwise
considered doubtful. Commercial lending segment loans
are generally fully charged down if unsecured by collateral
or partially charged down to the fair value of the collateral
securing the loan, less costs to sell, when the loan is
placed on nonaccrual.
Consumer lending segment loans are generally
charged-off at a specific number of days or payments past
due. Residential mortgages and other retail loans secured
by 1-4 family properties are generally charged down to the
fair value of the collateral securing the loan, less costs to
sell, at 180 days past due. Residential mortgage loans and
lines in a first lien position are placed on nonaccrual status
in instances where a partial charge-off occurs unless the
loan is well secured and in the process of collection.
Residential mortgage loans and lines in a junior lien
position secured by 1-4 family properties are placed on
nonaccrual status at 120 days past due or when they are
behind a first lien that has become 180 days or greater past
due or placed on nonaccrual status. Any secured
consumer lending segment loan whose borrower has had
debt discharged through bankruptcy, for which the loan
amount exceeds the fair value of the collateral, is charged
down to the fair value of the related collateral and the
remaining balance is placed on nonaccrual status. Credit
card loans continue to accrue interest until the account is
charged-off. Credit cards are charged-off at 180 days past
due. Other retail loans not secured by 1-4 family properties
are charged-off at 120 days past due, and revolving
consumer lines are charged-off at 180 days past due.
Similar to credit cards, other retail loans are generally not
placed on nonaccrual status because of the relative short
period of time to charge-off. Certain retail customers having
financial difficulties may have the terms of their credit card
and other loan agreements modified to require only
principal payments and, as such, are reported as
nonaccrual.
For all loan classes, interest payments received on
nonaccrual loans are generally recorded as a reduction to
a loan’s carrying amount while a loan is on nonaccrual and
are recognized as interest income upon payoff of the loan.
However, interest income may be recognized for interest
payments if the remaining carrying amount of the loan is
believed to be collectible. In certain circumstances, loans
in any class may be restored to accrual status, such as
when a loan has demonstrated sustained repayment
performance or no amounts are past due and prospects for
future payment are no longer in doubt or when the loan
becomes well secured and is in the process of collection.
Loans where there has been a partial charge-off may be
returned to accrual status if all principal and interest
(including amounts previously charged-off) is expected to
be collected and the loan is current.
The Company classifies its loan portfolio classes using
internal credit quality ratings on a quarterly basis. These
ratings include pass, special mention and classified, and
are an important part of the Company’s overall credit risk
management process and evaluation of the allowance for
credit losses. Loans with a pass rating represent those
loans not classified on the Company’s rating scale for
problem credits, as minimal credit risk has been identified.
Special mention loans are those loans that have a potential
weakness deserving management’s close attention.
Classified loans are those loans where a well-defined
weakness has been identified that may put full collection of
contractual cash flows at risk. It is possible that others,
given the same information, may reach different reasonable
conclusions regarding the credit quality rating classification
of specific loans.
Loan Modifications In certain circumstances, the
Company may modify the terms of a loan to maximize the
collection of amounts due when a borrower is experiencing
financial difficulties or is expected to experience difficulties
in the near-term. The Company recognizes interest on
modified loans if full collection of contractual principal and
interest is expected. The effects of modifications on credit
loss expectations, such as improved payment capacity,
longer expected lives and other factors, are considered
when measuring the allowance for credit losses.
Modification performance, including redefault rates and
how these compare to historical losses, are also
considered. Modifications generally do not result in
significant changes to the Company’s allowance for credit
losses.
For the commercial lending segment, modifications
generally result in the Company working with borrowers on
a case-by-case basis. Commercial and commercial real
estate modifications generally include extensions of the
maturity date and may be accompanied by an increase or
decrease to the interest rate. In addition, the Company may
work with the borrower in identifying other changes that
mitigate loss to the Company, which may include additional
collateral or guarantees to support the loan. To a lesser
extent, the Company may provide an interest rate
reduction.
72 U.S. Bancorp 2025 Annual Report
Modifications for the consumer lending segment are
generally part of programs the Company has initiated. The
Company modifies residential mortgage loans under
Federal Housing Administration, United States Department
of Veterans Affairs, or its own internal programs. Under
these programs, the Company offers qualifying
homeowners the opportunity to permanently modify their
loan and achieve more affordable monthly payments.
These modifications may include adjustments to interest
rates, conversion of adjustable rates to fixed rates,
extension of maturity dates or deferrals of payments,
capitalization of accrued interest and/or outstanding
advances, or in limited situations, partial forgiveness of loan
principal. In some instances, participation in residential
mortgage loan modification programs requires the
customer to complete a short-term trial period. A
permanent loan modification is contingent on the customer
successfully completing the trial period arrangement, and
the loan documents are not modified until that time.
Credit card and other retail loan modifications are
generally part of distinct modification programs providing
customers experiencing financial difficulty with
modifications whereby balances may be amortized up to 60
months, and generally include waiver of fees and reduced
interest rates.
Leases The Company, as a lessor, originates retail and
commercial leases either directly to the consumer or
indirectly through dealer networks. Retail leases, primarily
automobiles, have terms up to 5 years. Commercial leases
may include high dollar assets such as aircraft or lower
cost items such as office equipment. At lease inception,
retail lease customers may be provided with an end-of-term
purchase option, which is based on the contractual residual
value of the automobile at the expiration of the lease.
Automobile leases do not typically contain options to
extend or terminate the lease. Equipment leases may
contain various types of purchase options. Some option
amounts are a stated value, while others are determined
using the fair market value at the time of option exercise.
Residual values on leased assets are reviewed regularly
for impairment. Residual valuations for retail leases are
based on independent assessments of expected used
automobile sale prices at the end of the lease term.
Impairment tests are conducted based on these valuations
considering the probability of the lessee returning the asset
to the Company, re-marketing efforts, insurance coverage
and ancillary fees and costs. Valuations for commercial
leases are based upon external or internal management
appraisals. The Company manages its risk to changes in
the residual value of leased vehicles, office and business
equipment, and other assets through disciplined residual
valuation setting at the inception of a lease, diversification
of its leased assets, regular residual asset valuation reviews
and monitoring of residual value gains or losses upon the
disposition of assets. Retail lease residual value risk is
mitigated further by the purchase of residual value
insurance coverage and effective end-of-term marketing of
off-lease vehicles.
The Company, as lessee, leases certain assets for use
in its operations. Leased assets primarily include retail
branches, operations centers and other corporate
locations, and, to a lesser extent, office and computer
equipment. For each lease with an original term greater
than 12 months, the Company records a lease liability and
a corresponding right of use (“ROU”) asset. The Company
accounts for the lease and non-lease components in the
majority of its lease contracts as a single lease component,
with the determination of the lease liability at lease
inception based on the present value of the consideration
to be paid under the contract. The discount rate used by
the Company is determined at commencement of the lease
using a secured rate for a similar term as the period of the
lease. The Company’s leases do not include significant
variable lease payments.
Certain of the Company’s real estate leases include
options to extend. Lease extension options are generally
exercisable at market rates. Option periods that the
Company is reasonably certain that it will exercise are
included in the calculation of its ROU assets and lease
liabilities.
Other Real Estate OREO is included in other assets, and is
property acquired through foreclosure or other proceedings
on defaulted loans. OREO is initially recorded at fair value,
less estimated selling costs. The fair value of OREO is
evaluated regularly and any decreases in value along with
holding costs, such as taxes and insurance, are reported in
noninterest expense.
Loans Held For Sale
Loans held for sale (“LHFS”) represent mortgage loans
intended to be sold in the secondary market and other
loans that management has an active plan to sell. LHFS are
carried at the lower-of-cost-or-fair value as determined on
an aggregate basis by type of loan with the exception of
loans for which the Company has elected fair value
accounting, which are carried at fair value. Any writedowns
to fair value upon the transfer of loans to LHFS are reflected
in loan charge-offs.
Where an election is made to carry the LHFS at fair
value, any change in fair value is recognized in noninterest
income. Where an election is made to carry LHFS at lower-
of-cost-or-fair value, any further decreases are recognized
in noninterest income and increases in fair value above the
loan cost basis are not recognized until the loans are sold.
Fair value elections are made at the time of origination or
purchase based on the Company’s fair value election
policy. The Company has elected fair value accounting for
substantially all its MLHFS.
Derivative Financial Instruments
In the ordinary course of business, the Company enters into
derivative transactions to manage various risks and to
accommodate the business requirements of its customers.
Derivative instruments are reported in other assets or other
liabilities at fair value. Changes in a derivative’s fair value
are recognized currently in earnings unless specific hedge
accounting criteria are met.
All derivative instruments that qualify and are
designated for hedge accounting are recorded at fair value
73
and classified as either a hedge of the fair value of a
recognized asset or liability (“fair value hedge”); a hedge of
a forecasted transaction or the variability of cash flows to
be received or paid related to a recognized asset or liability
(“cash flow hedge”); or a hedge of the volatility of a net
investment in foreign operations driven by changes in
foreign currency exchange rates (“net investment hedge”).
Changes in the fair value of a derivative that is highly
effective and designated as a fair value hedge, and the
offsetting changes in the fair value of the hedged item, are
recorded in earnings. Changes in the fair value of a
derivative that is highly effective and designated as a cash
flow hedge are recorded in other comprehensive income
(loss) until cash flows of the hedged item are realized.
Changes in the fair value of net investment hedges that are
highly effective are recorded in other comprehensive
income (loss). The Company performs an assessment, at
inception and, at a minimum, quarterly thereafter, to
determine the effectiveness of the derivative in offsetting
changes in the value or cash flows of the hedged item(s).
If a derivative designated as a cash flow hedge is
terminated or ceases to be highly effective, the gain or loss
in other comprehensive income (loss) is amortized to
earnings over the period the forecasted hedged
transactions impact earnings. If a hedged forecasted
transaction is no longer probable, hedge accounting is
ceased and any gain or loss included in other
comprehensive income (loss) is reported in earnings
immediately, unless the forecasted transaction is at least
reasonably possible of occurring, whereby the amounts
remain within other comprehensive income (loss).
Revenue Recognition
In the ordinary course of business, the Company
recognizes income derived from various revenue
generating activities. Certain revenues are generated from
contracts where they are recognized when, or as services
or products are transferred to customers for amounts the
Company expects to be entitled. Revenue generating
activities related to financial assets and liabilities are also
recognized, including mortgage servicing fees, loan
commitment fees, foreign currency remeasurements, and
gains and losses on securities, equity investments and
unconsolidated subsidiaries. Certain specific policies
include the following:
Card Revenue Card revenue includes interchange from
credit, debit and stored-value cards processed through
card association networks, annual fees, and other
transaction and account management fees. Interchange
rates are generally set by the card associations and based
on purchase volumes and other factors. The Company
records interchange as services are provided. Transaction
and account management fees are recognized as services
are provided, except for annual fees which are recognized
over the applicable period. Costs for rewards programs
and certain payments to partners and card associations are
also recorded within card revenue when services are
provided. The Company predominately records card
revenue within the Payment Services business segment.
Corporate Payment Products Revenue Corporate
payment products revenue primarily includes interchange
from commercial card products processed through card
association networks and revenue from proprietary network
transactions. The Company records corporate payment
products revenue as services are provided. Certain
payments to card associations and customers are also
recorded within corporate payment products revenue as
services are provided. Corporate payment products
revenue is recorded within the Payment Services business
segment.
Merchant Processing Services Merchant processing
services revenue consists principally of merchant discount
and other transaction and account management fees
charged to merchants for the electronic processing of card
association network transactions, less interchange paid to
the card-issuing bank, card association assessments, and
revenue sharing amounts. All of these are recognized at the
time the merchant’s services are performed. The Company
may enter into revenue sharing agreements with referral
partners or in connection with purchases of merchant
contracts from sellers. The revenue sharing amounts are
determined primarily on sales volume processed or
revenue generated for a particular group of merchants.
Merchant processing revenue also includes revenues
related to point-of-sale equipment recorded as sales when
the equipment is shipped or as earned for equipment
rentals. The Company records merchant processing
services revenue within the Payment Services business
segment.
Trust and Investment Management Fees Trust and
investment management fees are recognized over the
period in which services are performed and are based on a
percentage of the fair value of the assets under
management or administration, fixed based on account
type, or transaction-based fees. Services provided to
clients include trustee, transfer agent, custodian, fiscal
agent, escrow, fund accounting and administration
services. Services provided to mutual funds may include
selling, distribution and marketing services. Trust and
investment management fees are predominately recorded
within the Wealth, Corporate, Commercial and Institutional
Banking business segment.
Service Charges Service charges include fees received on
deposit accounts under depository agreements with
customers to provide access to deposited funds, serve as
a custodian of funds, and when applicable, pay interest on
deposits. Checking or savings accounts may contain fees
for various services used on a day-to-day basis by a
customer. Fees are recognized as services are delivered to
and consumed by the customer, or as fees are charged.
Service charges also include revenue generated from ATM
transaction processing and settlement services which is
recognized at the time the services are performed. Certain
payments to partners and card associations related to ATM
processing services are also recorded within service
charges as services are provided. Further, revenue
generated from treasury management services are
included in service charges and include fees for a broad
74 U.S. Bancorp 2025 Annual Report
range of products and services that enable customers to
manage their cash more efficiently. These products and
services include cash and investment management,
receivables management, disbursement services, funds
transfer services, and information reporting. Treasury
management revenue is recognized as products and
services are provided to customers. The Company reflects
a discount calculated on monthly average collected
customer balances. Service charges are reported primarily
within the Wealth, Corporate, Commercial and Institutional
Banking, and Consumer and Business Banking business
segments.
Capital Markets Revenue Capital markets revenue
primarily includes revenue related to ancillary services
provided to Wealth, Corporate, Commercial and
Institutional Banking, and Consumer and Business Banking
customers, including underwriting fees, standby letter of
credit fees, non-yield related loan fees, loan and
syndication fees, and revenue recognized on customer-
related derivatives and sales of direct financing leases. The
Company charges underwriting fees when leading or
participating with a group of underwriters in raising
investment capital on behalf of securities issuers. These
fees are recognized at securities issuance. The Company,
in its role as lead underwriter, arranges deal structuring and
use of outside vendors for the underwriting group. The
Company recognizes only those fees and expenses related
to its underwriting commitment. Sales of direct financing
leases are recognized at point of sale.
Mortgage Banking Revenue Mortgage banking revenue
includes revenue derived from mortgages originated and
subsequently sold, generally with servicing retained. The
primary components include: gains and losses on
mortgage sales; servicing revenue; changes in fair value for
mortgage loans originated with the intent to sell and
measured at fair value under the fair value option; changes
in fair value for derivative commitments to purchase and
originate mortgage loans; changes in the fair value of
MSRs; and the impact of risk management activities
associated with the mortgage origination pipeline, funded
loans and MSRs. Net interest income from mortgage loans
is recorded in interest income. Refer to Other Significant
Policies in Note 1, as well as Note 9 and Note 21 for a
further discussion of MSRs. Mortgage banking revenue is
reported within the Consumer and Business Banking
business segment.
Investment Products Fees Investment products fees
include commissions related to the execution of requested
security trades, distribution fees from sale of mutual funds,
and investment advisory fees. Commissions and investment
advisory fees are recognized as services are delivered to
and utilized by the customer. Distribution fees are received
over time, are dependent on the consumer maintaining their
mutual fund asset position and the value of such position.
These revenues are estimated and recognized at the point
a significant reversal of revenue becomes remote.
Investment products fees are predominately reported within
the Wealth, Corporate, Commercial and Institutional
Banking business segment.
Other Noninterest Income Other noninterest income is
primarily related to financial assets including income on
unconsolidated subsidiaries and equity method
investments, gains on sale of other investments and
corporate owned life insurance proceeds. The Company
reports other noninterest income across all business
segments.
Other Significant Policies
Goodwill and Other Intangible Assets Goodwill is
recorded on acquired businesses if the purchase price
exceeds the fair value of the net assets acquired. Goodwill
is not amortized but is subject, at a minimum, to annual
tests for impairment at a reporting unit level. In certain
situations, an interim impairment test may be required if
events occur or circumstances change that would more
likely than not reduce the fair value of a reporting unit below
its carrying amount. Determining the amount of goodwill
impairment, if any, includes assessing whether the carrying
value of a reporting unit exceeds its fair value. Other
intangible assets are recorded at their fair value upon
completion of a business acquisition or certain other
transactions, and include core deposits benefits and the
value of customer contracts or relationships. Other
intangible assets are amortized over their estimated useful
lives, using straight-line and accelerated methods and are
reviewed for impairment when indicators of impairment are
present. Determining the amount of other intangible asset
impairment, if any, includes assessing the present value of
the estimated future cash flows associated with the
intangible asset and comparing it to the carrying amount of
the asset.
Income Taxes Deferred taxes are recorded to reflect the
tax consequences on future years of differences between
the tax basis of assets and liabilities and their financial
reporting carrying amounts. The Company uses the deferral
method of accounting on investments that generate
investment tax credits. Under this method, the investment
tax credits are recognized as a reduction to the related
asset. For investments in qualified affordable housing
projects and certain other tax-advantaged investments, the
Company presents the expense in tax expense rather than
noninterest expense.
Mortgage Servicing Rights MSRs are capitalized as
separate assets when loans are sold and servicing is
retained or if they are purchased from others. MSRs are
recorded at fair value. The Company determines the fair
value by estimating the present value of the asset’s future
cash flows utilizing market-based prepayment rates, option
adjusted spread, and other assumptions validated through
comparison to trade information, industry surveys and
independent third-party valuations. Changes in the fair
value of MSRs are recorded in earnings as mortgage
banking revenue during the period in which they occur.
Pensions For purposes of its pension plans, the Company
utilizes its fiscal year-end as the measurement date. At the
measurement date, plan assets are determined based on
fair value, generally representing observable market prices
75
or the net asset value provided by the funds’ trustee or
administrator. The actuarial cost method used to compute
the pension liabilities and related expense is the projected
unit credit method. The projected benefit obligation is
principally determined based on the present value of
projected benefit distributions at an assumed discount rate.
The discount rate utilized is based on the investment yield
of high quality corporate bonds available in the
marketplace with maturities equal to projected cash flows
of future benefit payments as of the measurement date.
Periodic pension expense (or income) includes service
costs, interest costs based on the assumed discount rate,
the expected return on plan assets based on an actuarially
derived market-related value and amortization of actuarial
gains and losses. Service cost is included in compensation
and employee benefits expense on the Consolidated
Statement of Income, with all other components of periodic
pension expense included in other noninterest expense on
the Consolidated Statement of Income.
Pension accounting reflects the long-term nature of
benefit obligations and the investment horizon of plan
assets, and can have the effect of reducing earnings
volatility related to short-term changes in interest rates and
market valuations. Actuarial gains and losses include the
impact of plan amendments and various unrecognized
gains and losses which are deferred, and to the extent
exceed 10 percent of the greater of the projected benefit
obligation or the market-related value of plan assets, are
amortized over the future service periods of active
employees or the remaining life expectancies of inactive
participants. The market-related value utilized to determine
the expected return on plan assets is based on fair value
adjusted for the difference between expected returns and
actual performance of plan assets. The unrealized
difference between actual experience and expected
returns is included in expense over a period of
approximately 15 years for active employees and
approximately 30 years for inactive participants. The
overfunded or underfunded status of each plan is recorded
as an asset or liability on the Consolidated Balance Sheet,
with changes in that status recognized through other
comprehensive income (loss).
Premises and Equipment Premises and equipment are
stated at cost less accumulated depreciation and
depreciated primarily on a straight-line basis over the
estimated life of the assets. Estimated useful lives range up
to 40 years for newly constructed buildings and from 3 to
25 years for furniture and equipment.
The Company, as lessee, records an ROU asset for
each lease with an original term greater than 12 months.
ROU assets are included in premises and equipment, with
the corresponding lease liabilities included in long-term
debt and other liabilities.
Capitalized Software The Company capitalizes certain
costs associated with the acquisition or development of
internal-use software. Once the software is ready for its
intended use, these costs are amortized on a straight-line
basis over the software’s expected useful life and reviewed
for impairment on an ongoing basis. Estimated useful lives
are generally 3 to 5 years, but may range up to 7 years.
Capitalized software costs are included in other assets.
Stock-Based Compensation The Company grants stock-
based awards, which may include restricted stock,
restricted stock units and options to purchase common
stock of the Company. Restricted stock and restricted stock
unit grants are awarded at no cost to the recipient. Stock
option grants are for a fixed number of shares to employees
and directors with an exercise price equal to the fair value
of the shares at the date of grant. Stock-based
compensation for awards is recognized in the Company’s
results of operations over the vesting period. The Company
accelerates recognition of compensation cost on awards to
employees that meet retirement status, despite their
continued active employment. Previously recognized
compensation on forfeited awards is reversed in the period
the awards are forfeited. As compensation expense is
recognized, a deferred tax asset is recorded that
represents an estimate of the future tax deduction from
exercise or release of restrictions. At the time stock-based
awards are exercised, cancelled, expire, or restrictions are
released, the Company may be required to recognize an
adjustment to tax expense, depending on the market price
of the Company’s common stock at that time.
Per Share Calculations Earnings per common share is
calculated using the two-class method under which
earnings are allocated to common shareholders and
holders of participating securities. Unvested stock-based
compensation awards that contain nonforfeitable rights to
dividends or dividend equivalents are considered
participating securities under the two-class method. Net
income applicable to U.S. Bancorp common shareholders
is then divided by the weighted-average number of
common shares outstanding to determine earnings per
common share. Diluted earnings per common share is
calculated by adjusting income and outstanding shares,
assuming conversion of all potentially dilutive securities.
NOTE 2 Accounting Changes
Income Taxes – Improvements to Income Tax
Disclosures Effective with the 2025 annual reporting
period, the Company adopted guidance on a retrospective
basis, issued by the Financial Accounting Standards Board
(“FASB”) in December 2023, related to income tax
disclosures. This guidance requires additional information
in income tax rate reconciliation disclosures and additional
disclosures about income taxes paid. The adoption of this
guidance was not material to the Company’s financial
statements.
Hedge Accounting Improvements In November 2025, the
FASB issued guidance, effective for the Company for
annual reporting periods beginning after December 15,
2026, related to hedge accounting. This guidance seeks to
align hedge accounting with the economics of an entity’s
risk management activities. The guidance is to be adopted
on a prospective basis with an election to adopt the
guidance for hedging relationships that exist on the date of
76 U.S. Bancorp 2025 Annual Report
adoption. The Company expects the adoption of this
guidance will not be material to its financial statements.
Accounting for Credit Losses on Purchased Loans In
November 2025, the FASB issued guidance, effective for
the Company for annual reporting periods beginning after
December 15, 2026, related to accounting for credit losses
on purchased loans. This guidance requires the allowance
established for certain loans that are acquired without
credit deterioration, excluding credit cards, be offset by an
increase in the basis of the acquired loans at acquisition.
The guidance is to be adopted on a prospective basis to
loans that are acquired on or after the adoption date.
Targeted Improvements to the Accounting for Internal-
Use Software In September 2025, the FASB issued
guidance, effective for the Company for annual reporting
periods beginning after December 15, 2027, related to
accounting for internal-use software. This guidance makes
targeted improvements to modernize accounting for
software costs, including when determining the starting
point for capitalization. The guidance allows adoption using
several transition methods. The Company expects the
adoption of this guidance will not be material to its financial
statements.
NOTE 3 Restrictions on Cash and Due
from Banks
Banking regulators require bank subsidiaries to maintain
minimum average reserve balances, either in the form of
vault cash or reserve balances held with central banks or
other financial institutions. The amount of required reserve
balances were approximately $51 million and $53 million at
December 31, 2025 and 2024, respectively. The Company
held balances at central banks and other financial
institutions of $40.4 billion and $48.4 billion at
December 31, 2025 and 2024, respectively, to meet these
requirements and for other purposes. These balances are
included in cash and due from banks on the Consolidated
Balance Sheet.
77
NOTE 4 Investment Securities
The Company’s held-to-maturity investment securities are
carried at historical cost, adjusted for amortization of
premiums and accretion of discounts. The Company’s
available-for-sale investment securities are carried at fair
value with unrealized net gains or losses reported within
accumulated other comprehensive income (loss) in
shareholders’ equity.
The amortized cost, gross unrealized holding gains and losses, and fair value of held-to-maturity and available-for-sale
investment securities at December 31 were as follows:
2025
2024
(Dollars in Millions)
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
Held-to-Maturity
U.S. Treasury and agencies
$
648 $
— $
(4) $
644 $ 1,296 $
— $
(21) $
1,275
Mortgage-backed securities
Residential agency
73,591
72 (9,184)
64,479 75,392
3 (12,317)
63,078
Commercial agency
1,644
25
(2)
1,667
1,702
—
(27)
1,675
Other
287
2
—
289
244
3
—
247
Total held-to-maturity
$ 76,170 $
99 $ (9,190) $ 67,079 $ 78,634 $
6 $(12,365) $ 66,275
Available-for-Sale
U.S. Treasury and agencies
$ 30,098 $
32 $ (1,360) $ 28,770 $ 30,467 $
1 $ (2,081) $ 28,387
Mortgage-backed securities
Residential agency
39,066
286 (1,342)
38,010 35,558
13 (2,290)
33,281
Commercial
Agency
8,703
—
(961)
7,742
8,673
—
(1,322)
7,351
Non-agency
7
—
—
7
7
—
(1)
6
Asset-backed securities
6,512
16
(1)
6,527
7,136
30
(1)
7,165
Obligations of state and political subdivisions
10,387
11
(884)
9,514 10,690
13 (1,151)
9,552
Other
265
3
—
268
249
1
—
250
Total available-for-sale, excluding portfolio level
basis adjustments
95,038
348 (4,548)
90,838 92,780
58 (6,846)
85,992
Portfolio level basis adjustments(a)
185
—
(185)
—
13
—
(13)
—
Total available-for-sale
$ 95,223 $
348 $ (4,733) $ 90,838 $ 92,793 $
58 $ (6,859) $ 85,992
(a) Represents fair value hedge basis adjustments related to active portfolio layer method hedges of available-for-sale investment securities, which are not allocated to individual
securities in the portfolio. For additional information, refer to Note 19.
Investment securities with a fair value of $17.2 billion at
December 31, 2025, and $18.8 billion at December 31,
2024, were pledged to secure public, private and trust
deposits, repurchase agreements and for other purposes
required by contractual obligation or law. Included in these
amounts were securities where the Company and certain
counterparties have agreements granting the
counterparties the right to sell or pledge the securities.
Investment securities securing these types of arrangements
had a fair value of $294 million at December 31, 2025, and
$320 million at December 31, 2024.
The following table provides information about the amount of interest income from taxable and non-taxable investment securities:
Year Ended December 31 (Dollars in Millions)
2025
2024
2023
Taxable
$
5,101 $
4,808 $
4,171
Non-taxable
297
303
314
Total interest income from investment securities
$
5,398 $
5,111 $
4,485
78 U.S. Bancorp 2025 Annual Report
The following table provides information about the amount of gross gains and losses realized through the sales of available-for-
sale investment securities:
Year Ended December 31 (Dollars in Millions)
2025
2024
2023
Realized gains
$
21 $
147 $
74
Realized losses
(82)
(301)
(219)
Net realized gains (losses)
$
(61) $
(154) $
(145)
Income tax expense (benefit) on net realized gains (losses)
$
(15) $
(39) $
(37)
The Company conducts a regular assessment of its
available-for-sale investment securities with unrealized
losses to determine whether all or some portion of a
security’s unrealized loss is related to credit and an
allowance for credit losses is necessary. If the Company
intends to sell or it is more likely than not the Company will
be required to sell an investment security, the amortized
cost of the security is written down to fair value. 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 underlying
collateral, the existence of any government or agency
guarantees, and market conditions. The Company
measures the allowance for credit losses using market
information where available and discounting the cash flows
at the original effective rate of the investment security. The
allowance for credit losses is adjusted each period through
earnings and can be subsequently recovered. The
allowance for credit losses on the Company’s available-for-
sale investment securities was immaterial at December 31,
2025 and December 31, 2024.
At December 31, 2025, certain investment securities had a fair value below amortized cost. The following table shows the gross
unrealized losses excluding portfolio level basis adjustments and fair value of the Company’s available-for-sale investment
securities with unrealized losses, aggregated by investment category and length of time the individual investment securities have
been in continuous unrealized loss positions, at December 31, 2025:
Less Than 12 Months
12 Months or Greater
Total
(Dollars in Millions)
Fair Value
Unrealized
Losses
Fair Value
Unrealized
Losses
Fair Value
Unrealized
Losses
U.S. Treasury and agencies
$
200 $
— $
17,884 $
(1,360) $
18,084 $
(1,360)
Mortgage-backed securities
Residential agency
841
(1)
17,248
(1,341)
18,089
(1,342)
Commercial
Agency
—
—
7,742
(961)
7,742
(961)
Non-agency
—
—
7
—
7
—
Asset-backed securities
907
(1)
—
—
907
(1)
Obligations of state and political subdivisions
307
(5)
8,138
(879)
8,445
(884)
Total investment securities
$
2,255 $
(7) $
51,019 $
(4,541) $
53,274 $
(4,548)
These unrealized losses primarily relate to changes in
interest rates and market spreads subsequent to purchase
of these available-for-sale investment securities. U.S.
Treasury and agencies securities and agency mortgage-
backed securities are issued, guaranteed or otherwise
supported by the United States government. The
Company’s obligations of state and political subdivisions
are generally high grade. Accordingly, the Company does
not consider these unrealized losses to be credit-related
and an allowance for credit losses is not necessary. In
general, the issuers of the investment securities are
contractually prohibited from prepayment at less than par,
and the Company did not pay significant purchase
premiums for these investment securities. At December 31,
2025, the Company had no plans to sell investment
securities with unrealized losses, and believes it is more
likely than not it would not be required to sell such
investment securities before recovery of their amortized
cost.
During the years ended December 31, 2025 and 2024,
the Company did not purchase any investment securities
that had more-than-insignificant credit deterioration.
Predominantly all of the Company’s held-to-maturity
investment securities are U.S. Treasury and agencies
securities and highly rated agency mortgage-backed
securities that are guaranteed or otherwise supported by
the United States government and have no history of credit
losses. Accordingly the Company does not expect to incur
any credit losses on held-to-maturity investment securities
and has no allowance for credit losses recorded for these
securities.
79
The following table provides information about the amortized cost, fair value and yield by maturity date of the investment
securities outstanding at December 31, 2025:
(Dollars in Millions)
Amortized
Cost
Fair Value
Weighted-
Average
Maturity in
Years
Weighted-
Average
Yield(e)
Held-to-Maturity
U.S. Treasury and agencies
Maturing in one year or less
$
— $
—
—
— %
Maturing after one year through five years
648
644
1.3
3.00
Maturing after five years through ten years
—
—
—
—
Maturing after ten years
—
—
—
—
Total
$
648 $
644
1.3
3.00 %
Mortgage-backed securities(a)
Maturing in one year or less
$
224 $
226
0.7
4.80 %
Maturing after one year through five years
4,283
4,356
3.6
5.12
Maturing after five years through ten years
70,721
61,557
8.3
2.16
Maturing after ten years
7
7
18.1
1.81
Total
$
75,235 $
66,146
8.0
2.34 %
Other
Maturing in one year or less
$
73 $
73
0.6
2.71 %
Maturing after one year through five years
214
216
1.8
2.63
Maturing after five years through ten years
—
—
—
—
Maturing after ten years
—
—
—
—
Total
$
287 $
289
1.5
2.63 %
Total held-to-maturity(b)
$
76,170 $
67,079
7.9
2.34 %
Available-for-Sale
U.S. Treasury and agencies
Maturing in one year or less
$
1,725 $
1,701
0.8
1.88 %
Maturing after one year through five years
20,649
20,175
3.3
2.79
Maturing after five years through ten years
7,724
6,894
6.7
2.30
Maturing after ten years
—
—
—
—
Total
$
30,098 $
28,770
4.0
2.61 %
Mortgage-backed securities(a)
Maturing in one year or less
$
361 $
357
0.5
1.94 %
Maturing after one year through five years
20,522
19,967
4.2
3.95
Maturing after five years through ten years
26,713
25,260
7.0
3.91
Maturing after ten years
180
175
10.8
5.06
Total
$
47,776 $
45,759
5.8
3.91 %
Asset-backed securities(a)
Maturing in one year or less
$
— $
—
—
— %
Maturing after one year through five years
2,596
2,606
2.4
4.80
Maturing after five years through ten years
3,916
3,921
5.4
5.03
Maturing after ten years
—
—
—
—
Total
$
6,512 $
6,527
4.2
4.94 %
Obligations of state and political subdivisions(c)(d)
Maturing in one year or less
$
959 $
957
0.5
4.14 %
Maturing after one year through five years
2,188
2,171
2.2
4.30
Maturing after five years through ten years
1,279
1,212
7.4
3.39
Maturing after ten years
5,961
5,174
14.3
3.41
Total
$
10,387 $
9,514
9.7
3.66 %
Other
Maturing in one year or less
$
109 $
109
0.3
4.96 %
Maturing after one year through five years
156
159
2.1
4.40
Maturing after five years through ten years
—
—
—
—
Maturing after ten years
—
—
—
—
Total
$
265 $
268
1.3
4.63 %
Total available-for-sale(b)(f)
$
95,038 $
90,838
5.5
3.55 %
(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) The weighted-average maturity of total held-to-maturity investment securities was 8.7 years at December 31, 2024, with a corresponding weighted-average yield of 2.20 percent.
The weighted-average maturity of total available-for-sale investment securities was 6.8 years at December 31, 2024, with a corresponding weighted-average yield of 3.67 percent.
(c) 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.
(d) 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.
(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.
(f) Amortized cost excludes portfolio level basis adjustments of $185 million.
80 U.S. Bancorp 2025 Annual Report
NOTE 5 Loans and Allowance for Credit Losses
The composition of the loan portfolio at December 31, by class and underlying specific portfolio type, was as follows:
(Dollars in Millions)
2025
2024
Commercial
Commercial
$ 149,522 $ 135,254
Lease financing
4,436
4,230
Total commercial
153,958
139,484
Commercial Real Estate
Commercial mortgages
39,476
38,619
Construction and development
9,444
10,240
Total commercial real estate
48,920
48,859
Residential Mortgages
Residential mortgages
110,788
112,806
Home equity loans, first liens
5,097
6,007
Total residential mortgages
115,885
118,813
Credit Card
32,234
30,350
Other Retail
Retail leasing
3,524
4,040
Home equity and second mortgages
14,025
13,565
Revolving credit
4,561
3,747
Installment
14,653
14,373
Automobile
3,575
6,601
Total other retail
40,338
42,326
Total loans
$ 391,335 $ 379,832
The Company had loans of $127.8 billion at
December 31, 2025, and $127.6 billion at December 31,
2024, pledged at the FHLB, and loans of $90.0 billion at
December 31, 2025, and $85.1 billion at December 31,
2024, pledged at the Federal Reserve Bank.
The Company offers a broad array of lending products
to consumer and commercial customers, in various
industries, across several geographical locations,
predominately in the states in which it has Consumer and
Business Banking offices. Collateral for commercial and
commercial real estate loans may include marketable
securities, accounts receivable, inventory, equipment, real
estate, or the related property.
Originated loans are reported at the principal amount
outstanding, net of unearned interest and deferred fees and
costs, and any partial charge-offs recorded. Purchased
loans are recorded at fair value at the date of purchase. Net
unearned interest and deferred fees and costs on
originated loans and unamortized premiums and discounts
on purchased loans amounted to $2.0 billion at
December 31, 2025 and $2.5 billion at December 31, 2024.
The Company evaluates purchased loans for more-than-
insignificant deterioration at the date of purchase in
accordance with applicable authoritative accounting
guidance. Purchased loans that have experienced more-
than-insignificant deterioration from origination are
considered purchased credit deteriorated loans. All other
purchased loans are considered non-purchased credit
deteriorated loans.
Allowance for Credit Losses The allowance for credit
losses is established for current expected credit losses on
the Company’s loan and lease portfolio, including unfunded
credit commitments. The allowance considers expected
losses for the remaining lives of the applicable assets,
inclusive of expected recoveries. The allowance for credit
losses is increased through provisions charged to earnings
and reduced by net charge-offs.
81
Activity in the allowance for credit losses by portfolio class was as follows:
(Dollars in Millions)
Commercial
Commercial
Real Estate
Residential
Mortgages
Credit
Card
Other
Retail
Total
Loans
Balance at December 31, 2024
$
2,175 $
1,508 $
783 $
2,640 $
819 $
7,925
Add
Provision for credit losses
686
(67)
(40)
1,352
255
2,186
Deduct
Loans charged-off
670
210
15
1,461
337
2,693
Less recoveries of loans charged-off
(120)
(57)
(19)
(238)
(95)
(529)
Net loan charge-offs (recoveries)
550
153
(4)
1,223
242
2,164
Balance at December 31, 2025
$
2,311 $
1,288 $
747 $
2,769 $
832 $
7,947
Balance at December 31, 2023
$
2,119 $
1,620 $
827 $
2,403 $
870 $
7,839
Add
Provision for credit losses
608
53
(53)
1,464
166
2,238
Deduct
Loans charged-off
652
229
13
1,406
313
2,613
Less recoveries of loans charged-off
(100)
(64)
(22)
(179)
(96)
(461)
Net loan charge-offs (recoveries)
552
165
(9)
1,227
217
2,152
Balance at December 31, 2024
$
2,175 $
1,508 $
783 $
2,640 $
819 $
7,925
Balance at December 31, 2022
$
2,163 $
1,325 $
926 $
2,020 $
970 $
7,404
Add
Change in accounting principle(a)
—
—
(31)
(27)
(4)
(62)
Allowance for acquired credit losses(b)
—
127
—
—
—
127
Provision for credit losses
270
431
41
1,259
274
2,275
Deduct
Loans charged-off
389
281
129
1,014
478
2,291
Less recoveries of loans charged-off
(75)
(18)
(20)
(165)
(108)
(386)
Net loan charge-offs (recoveries)
314
263
109
849
370
1,905
Balance at December 31, 2023
$
2,119 $
1,620 $
827 $
2,403 $
870 $
7,839
(a) Effective January 1, 2023, the Company adopted accounting guidance which removed the separate recognition and measurement of troubled debt restructurings.
(b) Represents allowance for credit deteriorated and charged-off loans acquired from MUB.
The increase in the allowance for credit losses from December 31, 2024 to December 31, 2025, was primarily driven by loan
portfolio growth.
82 U.S. Bancorp 2025 Annual Report
The following table provides a summary of loans charged-off by portfolio class and year of origination for the years ended
December 31:
(Dollars in Millions)
Commercial
Commercial
Real Estate(a)
Residential
Mortgage(b) Credit Card(c)
Other Retail(d)
Total Loans
2025
Originated in 2025
$
46 $
— $
— $
— $
8 $
54
Originated in 2024
151
44
—
—
44
239
Originated in 2023
60
55
—
—
65
180
Originated in 2022
58
99
2
—
48
207
Originated in 2021
17
1
1
—
43
62
Originated prior to 2021
44
5
12
—
34
95
Revolving
294
6
—
1,461
95
1,856
Total charge-offs
$
670 $
210 $
15 $
1,461 $
337 $
2,693
2024
Originated in 2024
$
30 $
117 $
— $
— $
13 $
160
Originated in 2023
84
51
—
—
47
182
Originated in 2022
178
55
3
—
52
288
Originated in 2021
32
1
—
—
40
73
Originated in 2020
12
1
—
—
21
34
Originated prior to 2020
41
4
10
—
35
90
Revolving
275
—
—
1,406
105
1,786
Total charge-offs
$
652 $
229 $
13 $
1,406 $
313 $
2,613
2023
Originated in 2023
$
48 $
63 $
— $
— $
57 $
168
Originated in 2022
63
88
1
—
130
282
Originated in 2021
30
69
6
—
83
188
Originated in 2020
17
2
8
—
38
65
Originated in 2019
15
3
16
—
31
65
Originated prior to 2019
53
56
98
—
31
238
Revolving
163
—
—
1,014
80
1,257
Revolving converted to term
—
—
—
—
28
28
Total charge-offs
$
389 $
281 $
129 $
1,014 $
478 $
2,291
Note: Year of origination is based on the origination date of a loan, or for existing loans the date when the maturity date, pricing or commitment amount is amended. Predominantly all
current year and near term loan origination years for gross charge-offs relate to existing loans that have had recent maturity date, pricing or commitment amount amendments.
(a) Includes $91 million of 2023 charge-offs related to uncollectible amounts on acquired loans.
(b) Includes $117 million of 2023 charge-offs related to balance sheet repositioning and capital management actions.
(c) Predominantly all credit card loans are considered revolving loans. Includes an immaterial amount of charge-offs related to revolving converted to term loans
(d) Includes $192 million of 2023 charge-offs related to balance sheet repositioning and capital management actions..
83
Credit Quality The credit quality of the Company’s loan portfolios is assessed as a function of net credit losses, levels of
nonperforming assets and delinquencies, and credit quality ratings as defined by the Company. These credit quality ratings are
an important part of the Company’s overall credit risk management process and evaluation of the allowance for credit losses.
The following table provides a summary of loans by portfolio class, including the delinquency status of those that continue to
accrue interest, and those that are nonperforming:
Accruing
(Dollars in Millions)
Current
30-89 Days
Past Due
90 Days or
More Past Due Nonperforming(b)
Total
December 31, 2025
Commercial
$
152,704 $
439 $
98 $
717 $
153,958
Commercial real estate
48,340
49
13
518
48,920
Residential mortgages(a)
115,235
214
285
151
115,885
Credit card
31,410
419
405
—
32,234
Other retail
39,938
187
52
161
40,338
Total loans
$
387,627 $
1,308 $
853 $
1,547 $
391,335
December 31, 2024
Commercial
$
138,362 $
356 $
96 $
670 $
139,484
Commercial real estate
47,948
78
9
824
48,859
Residential mortgages(a)
118,267
188
206
152
118,813
Credit card
29,487
428
435
—
30,350
Other retail
41,886
229
64
147
42,326
Total loans
$
375,950 $
1,279 $
810 $
1,793 $
379,832
(a) At December 31, 2025, $606 million of loans 30–89 days past due and $3.5 billion of loans 90 days or more past due purchased and that could be purchased from GNMA
mortgage pools under delinquent loan repurchase options whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of
Veterans Affairs, were classified as current, compared with $660 million and $2.3 billion at December 31, 2024, respectively.
(b) The Company recognized interest income on nonperforming loans of $22 million and $29 million for the years ended December 31, 2025 and 2024, respectively, compared to what
would have been recognized at the original contractual terms of the loans of $55 million and $66 million, respectively.
At December 31, 2025, total nonperforming assets held
by the Company were $1.6 billion, compared with $1.8
billion at December 31, 2024. Total nonperforming assets
included $1.5 billion of nonperforming loans, $24 million of
OREO and $19 million of other nonperforming assets
owned by the Company at December 31, 2025, compared
with $1.8 billion, $21 million and $18 million, respectively, at
December 31, 2024.
At December 31, 2025, the amount of foreclosed
residential real estate held by the Company, and included
in OREO, was $24 million, compared with $21 million at
December 31, 2024. These amounts excluded $65 million
and $46 million at December 31, 2025 and December 31,
2024, respectively, of foreclosed residential real estate
related to mortgage loans whose payments are primarily
insured by the Federal Housing Administration or
guaranteed by the United States Department of Veterans
Affairs. In addition, the amount of residential mortgage
loans secured by residential real estate in the process of
foreclosure at December 31, 2025 and December 31, 2024,
was $705 million and $576 million, respectively, of which
$458 million and $354 million, respectively, related to loans
purchased and that could be purchased from GNMA
mortgage pools under delinquent loan repurchase options
whose repayments are insured by the Federal Housing
Administration or guaranteed by the United States
Department of Veterans Affairs.
84 U.S. Bancorp 2025 Annual Report
The following table provides a summary of loans by portfolio class and the Company’s internal credit quality rating:
December 31, 2025
December 31, 2024
Criticized
Criticized
(Dollars in Millions)
Pass
Special
Mention Classified(a)
Total
Criticized
Total
Pass
Special
Mention Classified(a)
Total
Criticized
Total
Commercial
Originated in 2025
$ 72,408 $
219 $
762 $
981 $ 73,389 $
— $
— $
— $
— $
—
Originated in 2024
24,342
168
637
805
25,147
57,578
503
1,034
1,537
59,115
Originated in 2023
7,532
47
278
325
7,857
19,128
173
564
737
19,865
Originated in 2022
10,044
23
287
310
10,354
19,718
231
370
601
20,319
Originated in 2021
2,848
2
11
13
2,861
4,677
60
92
152
4,829
Originated prior to 2021
4,083
21
73
94
4,177
6,812
76
143
219
7,031
Revolving(b)
29,227
484
462
946
30,173
27,344
169
812
981
28,325
Total commercial
150,484
964
2,510
3,474
153,958
135,257
1,212
3,015
4,227
139,484
Commercial real estate
Originated in 2025
15,466
143
981
1,124
16,590
—
—
—
—
—
Originated in 2024
6,368
88
338
426
6,794
9,652
261
1,772
2,033
11,685
Originated in 2023
3,232
65
444
509
3,741
5,213
42
760
802
6,015
Originated in 2022
5,211
242
613
855
6,066
9,047
661
913
1,574
10,621
Originated in 2021
4,543
99
134
233
4,776
6,515
100
196
296
6,811
Originated prior to 2021
8,241
202
424
626
8,867
10,822
148
608
756
11,578
Revolving
1,991
82
7
89
2,080
2,078
—
68
68
2,146
Revolving converted to term
5
—
1
1
6
3
—
—
—
3
Total commercial real estate
45,057
921
2,942
3,863
48,920
43,330
1,212
4,317
5,529
48,859
Residential mortgages(c)
Originated in 2025
11,917
—
1
1
11,918
—
—
—
—
—
Originated in 2024
7,249
—
14
14
7,263
10,291
—
—
—
10,291
Originated in 2023
7,758
—
35
35
7,793
8,764
—
11
11
8,775
Originated in 2022
24,620
—
61
61
24,681
28,484
—
43
43
28,527
Originated in 2021
30,991
—
57
57
31,048
34,694
—
35
35
34,729
Originated prior to 2021
32,900
—
282
282
33,182
36,211
—
280
280
36,491
Total residential mortgages
115,435
—
450
450
115,885
118,444
—
369
369
118,813
Credit card(d)
31,829
—
405
405
32,234
29,915
—
435
435
30,350
Other retail
Originated in 2025
6,290
—
4
4
6,294
—
—
—
—
—
Originated in 2024
5,075
—
10
10
5,085
7,398
—
3
3
7,401
Originated in 2023
2,720
—
11
11
2,731
3,966
—
9
9
3,975
Originated in 2022
2,571
—
11
11
2,582
4,085
—
11
11
4,096
Originated in 2021
3,937
—
9
9
3,946
6,537
—
14
14
6,551
Originated prior to 2021
3,938
—
17
17
3,955
5,543
—
21
21
5,564
Revolving
14,780
—
123
123
14,903
13,846
—
120
120
13,966
Revolving converted to term
799
—
43
43
842
731
—
42
42
773
Total other retail
40,110
—
228
228
40,338
42,106
—
220
220
42,326
Total loans
$ 382,915 $ 1,885 $
6,535 $ 8,420 $ 391,335 $ 369,052 $ 2,424 $
8,356 $ 10,780 $ 379,832
Total outstanding
commitments
$ 828,343 $ 3,094 $
8,348 $ 11,442 $ 839,785 $ 778,155 $ 3,875 $ 10,441 $ 14,316 $ 792,471
Note: Year of origination is based on the origination date of a loan, or for existing loans the date when the maturity date, pricing or commitment amount is amended. Predominantly all
current year and nearer term loan origination years for criticized loans relate to existing loans that have had recent maturity date, pricing or commitment amount amendments.
(a) Classified rating on consumer loans primarily based on delinquency status.
(b) Includes an immaterial amount of revolving converted to term loans.
(c) At December 31, 2025, $3.5 billion of GNMA loans 90 days or more past due and $1.3 billion of modified GNMA loans whose repayments are insured by the Federal Housing
Administration or guaranteed by the United States Department of Veterans Affairs were classified with a pass rating, compared with $2.3 billion and $1.4 billion at December 31,
2024, respectively.
(d) Predominately all credit card loans are considered revolving loans. Includes an immaterial amount of revolving converted to term loans.
85
Loan Modifications In certain circumstances, the Company may modify the terms of a loan to maximize the collection of
amounts due when a borrower is experiencing financial difficulties or is expected to experience difficulties in the near-term. The
following table provides a summary of period-end balances of loans modified during the periods presented, by portfolio class
and modification granted:
Year Ended December 31 (Dollars in Millions)
Interest Rate
Reduction Payment Delay Term Extension
Multiple
Modifications(a)
Total
Modifications
Percent of
Class Total
2025
Commercial
$
93 $
2 $
595 $
64 $
754
.5 %
Commercial real estate
—
—
824
31
855
1.7
Residential mortgages(b)
—
303
14
26
343
.3
Credit card
449
12
—
—
461
1.4
Other retail
6
9
90
6
111
.3
Total loans, excluding loans purchased from
GNMA mortgage pools
548
326
1,523
127
2,524
.6
Loans purchased from GNMA mortgage pools(b)
—
1,057
397
420
1,874
1.6
Total loans
$
548 $
1,383 $
1,920 $
547 $
4,398
1.1 %
2024
Commercial
$
77 $
2 $
526 $
— $
605
.4 %
Commercial real estate
43
—
1,107
70
1,220
2.5
Residential mortgages(b)
—
79
17
23
119
.1
Credit card
414
11
—
—
425
1.4
Other retail
7
3
125
4
139
.3
Total loans, excluding loans purchased from
GNMA mortgage pools
541
95
1,775
97
2,508
.7
Loans purchased from GNMA mortgage pools(b)
1
1,215
292
407
1,915
1.6
Total loans
$
542 $
1,310 $
2,067 $
504 $
4,423
1.2 %
2023
Commercial
$
46 $
— $
286 $
33 $
365
.3 %
Commercial real estate
—
—
645
72
717
1.3
Residential mortgages(b)
—
234
26
20
280
.2
Credit card
349
1
—
—
350
1.2
Other retail
7
21
144
3
175
.4
Total loans, excluding loans purchased from
GNMA mortgage pools
402
256
1,101
128
1,887
.5
Loans purchased from GNMA mortgage pools(b)
—
1,263
255
321
1,839
1.6
Total loans
$
402 $
1,519 $
1,356 $
449 $
3,726
1.0 %
(a) Includes $239 million of total loans receiving a payment delay and term extension, $243 million of total loans receiving an interest rate reduction and term extension and $65 million
of total loans receiving an interest rate reduction, payment delay and term extension for the year ended December 31, 2025, compared with $310 million, $155 million and $39
million for the year ended December 31, 2024, respectively, and $329 million, $112 million, and $8 million for the year ended December 31, 2023, respectively.
(b) Percent of class total amounts expressed as a percent of total residential mortgage loan balances.
Loan modifications included in the table above exclude
trial period arrangements offered to customers and secured
loans to consumer borrowers that have had debt
discharged through bankruptcy where the borrower has not
reaffirmed the debt during the periods presented. At
December 31, 2025, the balance of loans modified in trial
period arrangements was $449 million, while the balance of
secured loans to consumer borrowers that have had debt
discharged through bankruptcy was not material.
86 U.S. Bancorp 2025 Annual Report
The following table summarizes the effects of loan modifications made to borrowers on loans modified:
Year Ended December 31
Weighted-Average
Interest Rate
Reduction
Weighted-Average
Months of Term
Extension
2025
Commercial(a)
11.8 %
13
Commercial real estate
2.7
12
Residential mortgages
1.2
86
Credit card
16.1
—
Other retail
6.4
7
Loans purchased from GNMA mortgage pools
.4
103
2024
Commercial(a)
20.3
11
Commercial real estate
3.2
13
Residential mortgages
1.1
90
Credit card
16.4
—
Other retail
7.7
5
Loans purchased from GNMA mortgage pools
.6
110
2023
Commercial(a)
13.0
12
Commercial real estate
3.5
11
Residential mortgages
1.2
98
Credit card
15.4
—
Other retail
7.9
4
Loans purchased from GNMA mortgage pools
.6
103
Note: The weighted-average payment deferral for all portfolio classes was less than $1 million for the years ended December 31, 2025, 2024, and 2023. Forbearance payments are
required to be paid at the end of the original term loan.
(a) The weighted-average interest rate reduction was primarily driven by commercial cards.
Loans that receive a forbearance plan generally remain
in default until they are no longer delinquent as the result of
the payment of all past due amounts or the borrower
receiving a term extension or modification. Therefore, loans
only receiving forbearance plans are not included in the
table below.
87
The following table provides a summary of loan balances as of December 31, which were modified during the prior twelve
months, by portfolio class and delinquency status:
(Dollars in Millions)
Current
30-89 Days
Past Due
90 Days or
More Past
Due
Total
2025
Commercial
$
598 $
19 $
134 $
751
Commercial real estate
842
—
12
854
Residential mortgages(a)
1,289
4
10
1,303
Credit card
328
79
42
449
Other retail
83
14
6
103
Total loans
$
3,140 $
116 $
204 $
3,460
2024
Commercial
$
395 $
26 $
167 $
588
Commercial real estate
875
26
319
1,220
Residential mortgages(a)
1,469
4
6
1,479
Credit card
302
73
39
414
Other retail
112
19
6
137
Total loans
$
3,153 $
148 $
537 $
3,838
(a) At December 31, 2025, $371 million of loans 30-89 days past due and $386 million of loans 90 days or more past due purchased and that could be purchased from GNMA
mortgage pools under delinquent loan repurchase options whose payments are insured by the Federal Housing Administration or guaranteed by the United States Department of
Veterans Affairs, were classified as current, compared with $442 million and $324 million at December 31, 2024, respectively.
The following table provides a summary of loans that defaulted (fully or partially charged-off or became 90 days or more past
due) that were modified within twelve months prior to default.
Year Ended December 31 (Dollars in Millions)
Interest Rate
Reduction Payment Delay Term Extension
Multiple
Modifications(a)
2025
Commercial
$
40 $
— $
9 $
14
Commercial real estate
—
—
—
—
Residential mortgages
—
—
2
4
Credit card
141
—
—
—
Other retail
2
—
19
—
Total loans, excluding loans purchased from GNMA mortgage pools
183
—
30
18
Loans purchased from GNMA mortgage pools
—
144
119
148
Total loans
$
183 $
144 $
149 $
166
2024
Commercial
$
30 $
— $
45 $
—
Commercial real estate
43
—
137
—
Residential mortgages
—
3
—
3
Credit card
128
—
—
—
Other retail
2
—
20
—
Total loans, excluding loans purchased from GNMA mortgage pools
203
3
202
3
Loans purchased from GNMA mortgage pools
1
168
78
89
Total loans
$
204 $
171 $
280 $
92
(a) Includes $79 million of total loans receiving a payment delay and term extension, $77 million of total loans receiving an interest rate reduction and term extension and $10 million of
total loans receiving an interest rate reduction, payment delay and term extension for the year ended December 31, 2025, compared with $81 million, $8 million and $3 million for
the year ended December 31, 2024, respectively.
88 U.S. Bancorp 2025 Annual Report
The following table provides a summary of loans that defaulted (fully or partially charged-off or became 90 days or more past
due) that were modified on or after January 1, 2023, the date the Company adopted accounting guidance which removed the
separate recognition and measurement of troubled debt restructurings, through December 31, 2023:
Year Ended December 31 (Dollars in Millions)
Interest Rate
Reduction Payment Delay Term Extension
Multiple
Modifications(a)
2023
Commercial
$
7 $
— $
— $
—
Commercial real estate
—
—
1
—
Residential mortgages
—
8
2
1
Credit card
35
—
—
—
Other retail
1
1
11
—
Total loans, excluding loans purchased from GNMA mortgage pools
43
9
14
1
Loans purchased from GNMA mortgage pools
—
67
30
37
Total loans
$
43 $
76 $
44 $
38
(a) Represents loans receiving a payment delay and term extension.
As of December 31, 2025, the Company had $410 million of commitments to lend additional funds to borrowers whose terms
of their outstanding owed balances have been modified.
NOTE 6 Leases
The Company, as a lessor, originates retail and commercial
leases either directly to the consumer or indirectly through
dealer networks. Retail leases consist primarily of
automobiles, while commercial leases may include high
dollar assets such as aircraft or lower cost items such as
office equipment.
The components of the net investment in sales-type and direct financing leases, at December 31, were as follows:
(Dollars in Millions)
2025
2024
Lease receivables
$ 7,277 $ 7,328
Unguaranteed residual values accruing to the lessor’s benefit
653
911
Total net investment in sales-type and direct financing leases
$ 7,930 $ 8,239
The Company, as a lessor, recorded $792 million, $775
million and $738 million of revenue on its Consolidated
Statement of Income for the years ended December 31,
2025, 2024 and 2023, respectively, primarily consisting of
interest income on sales-type and direct financing leases.
The contractual future lease payments to be received by the Company, at December 31, 2025, were as follows:
(Dollars in Millions)
Sales-type and
Direct Financing
Leases
Operating
Leases
2026
$
2,611 $
145
2027
2,524
123
2028
1,612
93
2029
735
63
2030
294
41
Thereafter
342
67
Total lease payments
8,118 $
532
Amounts representing interest
(841)
Lease receivables
$
7,277
89
The Company, as lessee, leases certain assets for use
in its operations. Leased assets primarily include retail
branches, operations centers and other corporate
locations, and, to a lesser extent, office and computer
equipment. For each lease with an original term greater
than 12 months, the Company records a lease liability and
a corresponding ROU asset. At December 31, 2025, the
Company’s ROU assets included in premises and
equipment and lease liabilities included in long-term debt
and other liabilities were $1.5 billion and $1.5 billion,
respectively, compared with $1.4 billion of ROU assets and
$1.5 billion of lease liabilities at December 31, 2024,
respectively.
Total costs incurred by the Company, as a lessee, were
$446 million, $529 million and $496 million for the years
ended December 31, 2025, 2024 and 2023, respectively,
and principally related to contractual lease payments on
operating leases and included in net occupancy and
equipment expense. The Company’s leases do not impose
significant covenants or other restrictions on the Company.
The following table presents amounts relevant to the Company’s assets leased for use in its operations for the years ended
December 31:
(Dollars in Millions)
2025
2024
2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases
$ 339 $ 389 $ 409
Operating cash flows from finance leases
7
7
7
Financing cash flows from finance leases
51
62
49
Right of use assets obtained in exchange for new operating lease liabilities
275
268
230
Right of use assets obtained in exchange for new finance lease liabilities
14
59
25
The following table presents the weighted-average remaining lease terms and discount rates of the Company’s assets leased for
use in its operations at December 31:
2025
2024
Weighted-average remaining lease term of operating leases (in years)
7.1
6.7
Weighted-average remaining lease term of finance leases (in years)
8.4
8.1
Weighted-average discount rate of operating leases
4.1 %
4.0 %
Weighted-average discount rate of finance leases
6.7 %
7.3 %
The contractual future lease obligations of the Company at December 31, 2025, were as follows:
(Dollars in Millions)
Operating
Leases
Finance
Leases
2026
$
326 $
43
2027
304
31
2028
266
20
2029
225
12
2030
164
9
Thereafter
463
27
Total lease payments
1,748
142
Amounts representing interest
(329)
(17)
Lease liabilities
$
1,419 $
125
90 U.S. Bancorp 2025 Annual Report
NOTE 7 Accounting for Transfers and Servicing of Financial Assets and Variable
Interest Entities
The Company transfers financial assets in the normal
course of business. The majority of the Company’s financial
asset transfers are residential mortgage loan sales primarily
to GSEs, transfers of tax-advantaged investments,
commercial loan sales through participation agreements,
and other individual or portfolio loan and securities sales. In
accordance with the accounting guidance for asset
transfers, the Company considers any ongoing involvement
with transferred assets in determining whether the assets
can be derecognized from the balance sheet. Guarantees
provided to certain third parties in connection with the
transfer of assets are further discussed in Note 22.
For loans sold under participation agreements, the
Company also considers whether the terms of the loan
participation agreement meet the accounting definition of a
participating interest. With the exception of servicing and
certain performance-based guarantees, the Company’s
continuing involvement with financial assets sold is minimal
and generally limited to market customary representation
and warranty clauses. Any gain or loss on sale depends on
the previous carrying amount of the transferred financial
assets, the consideration received, and any liabilities
incurred in exchange for the transferred assets. Upon
transfer, any servicing assets and other interests that
continue to be held by the Company are initially recognized
at fair value. For further information on MSRs, refer to Note
9. On a limited basis, the Company may acquire and
package high-grade corporate bonds for select corporate
customers, in which the Company generally has no
continuing involvement with these transactions. The
Company also is an authorized GNMA issuer and issues
GNMA securities on a regular basis. Additionally, the
Company originated auto loans that were sold and
securitized through an off-balance sheet special purpose
vehicle. In connection with the auto securitization, the
Company is the sponsor of the transaction, retains a risk
retention security in compliance with SEC rules, and is the
servicer for the auto loans that were sold and securitized.
The Company has no other asset securitizations or similar
asset-backed financing arrangements that are off-balance
sheet.
The Company is involved in various entities that are
considered to be VIEs. The Company’s investments in VIEs
are primarily related to investments promoting affordable
housing, community development and renewable energy
sources. Some of these tax-advantaged investments
support the Company’s regulatory compliance with the
Community Reinvestment Act. The Company’s investments
in these entities generate a return primarily through the
realization of federal and state income tax credits, and
other tax benefits, such as tax deductions from operating
losses of the investments, over specified time periods.
These tax credits are recognized as a reduction of tax
expense or, for investments qualifying as investment tax
credits, as a reduction to the related investment asset. The
Company recognized federal and state income tax credits
related to its affordable housing and other tax-advantaged
investments in tax expense of $643 million, $585 million and
$576 million for the years ended December 31, 2025, 2024
and 2023, respectively. The Company recognized $599
million, $573 million and $582 million of expenses related to
all of these investments for the years ended December 31,
2025, 2024 and 2023, respectively, which were primarily
included in tax expense.
The Company is not required to consolidate VIEs in
which it has concluded it does not have a controlling
financial interest, and thus is not the primary beneficiary. In
such cases, the Company does not have both the power to
direct the entities’ most significant activities and the
obligation to absorb losses or the right to receive benefits
that could potentially be significant to the VIEs. The assets
of each unconsolidated VIE can only be used to settle the
VIE’s obligations and if the VIE defaults on its obligations,
creditors do not have general recourse to the Company.
The Company’s investments in these unconsolidated
VIEs are carried in other assets on the Consolidated
Balance Sheet. The Company’s unfunded capital and other
commitments related to these unconsolidated VIEs are
generally carried in other liabilities on the Consolidated
Balance Sheet. The Company’s maximum exposure to loss
from these unconsolidated VIEs include the investment
recorded on the Company’s Consolidated Balance Sheet,
net of unfunded capital commitments, and previously
recorded tax credits which remain subject to recapture by
taxing authorities based on compliance features required to
be met at the project level. While the Company believes
potential losses from these investments are remote, the
maximum exposure was determined by assuming a
scenario where the community-based business and
housing projects completely fail and do not meet certain
government compliance requirements resulting in
recapture of the related tax credits.
The following table provides a summary of investments in
community development and tax-advantaged VIEs that the
Company has not consolidated:
At December 31 (Dollars in Millions)
2025
2024
Investment carrying amount
$ 9,712 $ 8,107
Unfunded capital and other
commitments
5,761
5,032
Maximum exposure to loss
9,338
8,435
The Company also has noncontrolling financial
investments in private investment funds and partnerships
considered to be VIEs, which are not consolidated. The
Company’s recorded investment in these entities, carried in
other assets on the Consolidated Balance Sheet, was
approximately $312 million at December 31, 2025 and $264
million at December 31, 2024. The maximum exposure to
loss related to these VIEs was $439 million at December 31,
2025 and $382 million at December 31, 2024, representing
the Company’s investment balance and its unfunded
commitments to invest additional amounts.
91
The Company also held senior notes of $1.7 billion as
available-for-sale investment securities at December 31,
2025, compared with $3.2 billion at December 31, 2024.
These senior notes were issued by third-party securitization
vehicles that held $1.9 billion at December 31, 2025 and
$3.6 billion at December 31, 2024 of indirect auto loans that
collateralize the senior notes. These VIEs are not
consolidated by the Company.
The Company’s individual net investments in
unconsolidated VIEs, which exclude any unfunded capital
commitments, ranged from less than $1 million to $299
million at December 31, 2025, compared with less than $1
million to $79 million at December 31, 2024.
The Company is required to consolidate VIEs in which it
has concluded it has a controlling financial interest. The
Company sponsors entities to which it transfers its interests
in tax-advantaged investments to third parties. At
December 31, 2025, approximately $6.2 billion of the
Company’s assets and $3.8 billion of its liabilities included
on the Consolidated Balance Sheet were related to
community development and tax-advantaged investment
VIEs which the Company has consolidated, primarily
related to these transfers. These amounts compared to $6.4
billion and $4.2 billion, respectively, at December 31, 2024.
The majority of the assets of these consolidated VIEs are
reported in other assets, and the liabilities are reported in
long-term debt and other liabilities. The assets of a
particular VIE are the primary source of funds to settle its
obligations. The creditors of the VIEs do not have recourse
to the general credit of the Company. The Company’s
exposure to the consolidated VIEs is generally limited to the
carrying value of its variable interests plus any related tax
credits previously recognized or transferred to others with a
guarantee.
NOTE 8 Premises and Equipment
Premises and equipment at December 31 consisted of the following:
(Dollars in Millions)
2025
2024
Land
$
471 $
498
Buildings and improvements
3,221
3,121
Furniture, fixtures and equipment
3,199
3,010
Right of use assets on operating leases
1,195
1,114
Right of use assets on finance leases
317
314
Construction in progress
68
96
Total premises and equipment, gross
8,471
8,153
Less accumulated depreciation and amortization
(4,703)
(4,588)
Total premises and equipment, net
$ 3,768 $ 3,565
92 U.S. Bancorp 2025 Annual Report
NOTE 9 Mortgage Servicing Rights
The Company capitalizes MSRs as separate assets when
loans are sold and servicing is retained. MSRs may also be
purchased from others. The Company carries MSRs at fair
value, with changes in the fair value recorded in earnings
during the period in which they occur. The Company
serviced $216.3 billion of residential mortgage loans for
others at December 31, 2025, and $216.6 billion at
December 31, 2024, including subserviced mortgages with
no corresponding MSR asset. Included in mortgage
banking revenue are the MSR fair value changes arising
from market rate and model assumption changes, net of the
value change in derivatives used to economically hedge
MSRs. These changes resulted in net losses of $1 million,
$2 million and $41 million for the years ended
December 31, 2025, 2024 and 2023, respectively. Loan
servicing and ancillary fees, not including valuation
changes, included in mortgage banking revenue were $682
million, $699 million and $733 million for the years ended
December 31, 2025, 2024 and 2023, respectively.
Changes in fair value of capitalized MSRs are summarized as follows:
(Dollars in Millions)
2025
2024
2023
Balance at beginning of period
$ 3,369 $ 3,377 $ 3,755
Rights purchased
—
1
5
Rights capitalized
276
276
373
Rights sold
(131)
(188)
(440)
Changes in fair value of MSRs
Due to fluctuations in market interest rates(a)
(6)
235
66
Due to revised assumptions or models(b)
15
43
12
Other changes in fair value(c)
(364)
(375)
(394)
Balance at end of period
$ 3,159 $ 3,369 $ 3,377
(a) Includes changes in MSR value associated with changes in market interest rates, including estimated prepayment rates and anticipated earnings on escrow deposits.
(b) Includes changes in MSR value not caused by changes in market interest rates, such as changes in assumed cost to service, ancillary income and option adjusted spread, as well
as the impact of any model changes.
(c) Primarily the change in MSR value from passage of time and cash flows realized (decay), but also includes the impact of changes to expected cash flows not associated with
changes in market interest rates, such as the impact of delinquencies.
The estimated sensitivity to changes in interest rates of the fair value of the MSR portfolio and the related derivative instruments
as of December 31 follows:
2025
2024
(Dollars in Millions)
Down
100 bps
Down
50 bps
Down
25 bps
Up
25 bps
Up
50 bps
Up
100 bps
Down
100 bps
Down
50 bps
Down
25 bps
Up
25 bps
Up
50 bps
Up
100 bps
MSR portfolio
$ (369) $ (176) $ (86) $
81 $ 155 $
284 $ (310) $ (144) $ (69) $
63 $ 120 $
217
Derivative instrument hedges
397
188
89
(79)
(153)
(297)
325
147
69
(61)
(118)
(220)
Net sensitivity
$
28 $
12 $
3 $
2 $
2 $
(13) $
15 $
3 $
— $
2 $
2 $
(3)
93
The fair value of MSRs and their sensitivity to changes in
interest rates is influenced by the mix of the servicing
portfolio and characteristics of each segment of the
portfolio. The Company’s servicing portfolio consists of the
distinct portfolios of government-insured mortgages,
conventional mortgages and Housing Finance Agency
(“HFA”) mortgages. The servicing portfolios are
predominantly comprised of fixed-rate agency loans with
limited adjustable-rate or jumbo mortgage loans. The HFA
servicing portfolio is comprised of loans originated under
state and local housing authority program guidelines which
assist purchases by first-time or low- to moderate-income
homebuyers through a favorable rate subsidy, down
payment and/or closing cost assistance on government-
and conventional-insured mortgages.
A summary of the Company’s MSRs and related characteristics by portfolio as of December 31 follows:
2025
2024
(Dollars in Millions)
HFA
Government
Conventional(d)
Total
HFA
Government
Conventional(d)
Total
Servicing portfolio(a)
$56,993
$ 23,630
$ 126,614
$207,237
$52,807
$ 25,139
$ 138,428
$216,374
Fair value
$
849
$
465
$
1,845
$ 3,159
$
856
$
512
$
2,001
$ 3,369
Value (bps)(b)
149
197
146
152
162
204
145
156
Weighted-average servicing fees
(bps)
35
45
25
30
35
45
25
30
Multiple (value/servicing fees)
4.22
4.41
5.75
5.03
4.57
4.56
5.69
5.17
Weighted-average note rate
5.17 %
4.41 %
4.04 %
4.39 %
4.92 %
4.35 %
3.87 %
4.18 %
Weighted-average age (in years)
4.8
6.8
5.7
5.6
4.5
6.1
5.0
5.0
Weighted-average expected
prepayment (constant
prepayment rate)
10.2 %
10.1 %
8.2 %
9.0 %
9.9 %
10.2 %
7.8 %
8.6 %
Weighted-average expected life
(in years)
7.4
6.7
7.2
7.2
7.5
6.8
7.4
7.4
Weighted-average option
adjusted spread(c)
7.3 %
6.9 %
5.1 %
5.9 %
5.8 %
6.2 %
5.6 %
5.7 %
(a) Represents principal balance of mortgages having corresponding MSR asset.
(b) Calculated as fair value divided by the servicing portfolio.
(c) Option adjusted spread is the incremental spread added to the risk-free rate to reflect optionality and other risk inherent in the MSRs.
(d) Represents loans sold primarily to GSEs.
NOTE 10 Intangible Assets
Intangible assets consisted of the following:
At December 31 (Dollars in Millions)
2025
2024
Goodwill
$ 12,635 $ 12,536
Core deposit benefits
1,319
1,702
Mortgage servicing rights
3,159
3,369
Other identified intangibles
426
476
Total
$ 17,539 $ 18,083
Aggregate amortization expense consisted of the following:
Year Ended December 31 (Dollars in Millions)
2025
2024
2023
Core deposit benefits
$
383 $
432 $
481
Other identified intangibles
115
137
155
Total
$
498 $
569 $
636
94 U.S. Bancorp 2025 Annual Report
The estimated amortization expense for the next five years is as follows:
(Dollars in Millions)
2026
$
435
2027
366
2028
302
2029
235
2030
172
The following table reflects the changes in the carrying value of goodwill for the years ended December 31, 2025, 2024 and
2023:
(Dollars in Millions)
Wealth,
Corporate,
Commercial and
Institutional
Banking
Consumer and
Business
Banking
Payment
Services
Treasury and
Corporate
Support
Consolidated
Company
Balance at December 31, 2022
$
4,589 $
4,465 $
3,319 $
— $
12,373
Goodwill acquired
235
(139)
—
—
96
Foreign exchange translation and other
1
—
19
—
20
Balance at December 31, 2023
$
4,825 $
4,326 $
3,338 $
— $
12,489
Goodwill acquired
—
—
80
—
80
Foreign exchange translation and other
(2)
—
(31)
—
(33)
Balance at December 31, 2024
$
4,823 $
4,326 $
3,387 $
— $
12,536
Goodwill acquired
—
—
46
—
46
Foreign exchange translation and other
3
—
50
—
53
Balance at December 31, 2025
$
4,826 $
4,326 $
3,483 $
— $
12,635
NOTE 11 Deposits
The composition of deposits at December 31 was as follows:
(Dollars in Millions)
2025
2024
Noninterest-bearing deposits
$
84,116 $
84,158
Interest-bearing deposits
Interest checking
132,217
127,188
Money market savings
192,118
206,805
Savings accounts
65,733
45,389
Time deposits
48,032
54,769
Total interest-bearing deposits
438,100
434,151
Total deposits
$ 522,216 $ 518,309
The maturities of time deposits outstanding at December 31, 2025 were as follows:
(Dollars in Millions)
2026
$ 46,873
2027
638
2028
178
2029
117
2030
222
Thereafter
4
Total
$ 48,032
95
NOTE 12 Short-Term Borrowings
Short-term borrowings at December 31 consisted of the following:
(Dollars in Millions)
2025
2024
Federal funds purchased
$
285 $
252
Securities sold under agreements to repurchase
9,228
7,642
Commercial paper
4,341
4,288
Other short-term borrowings
3,308
3,336
Total
$ 17,162 $ 15,518
NOTE 13 Long-Term Debt
Long-term debt (debt with original maturities of more than one year) at December 31 consisted of the following:
(Dollars in Millions)
Rate Type
Rate(a)
Maturity Date
2025
2024
U.S. Bancorp (Parent Company)
Subordinated notes
Fixed
7.500 %
2026 $
199 $
199
Fixed
3.100 %
2026
1,000
1,000
Fixed
3.000 %
2029
1,000
1,000
Fixed
4.967 %
2033
1,300
1,300
Fixed
2.491 %
2036
1,300
1,300
Medium-term notes
Fixed
1.375% - 6.787%
2026 - 2045
29,285
27,939
Floating
2.866 %
2028
588
519
Other(b)
2,385
2,000
Subtotal
37,057
35,257
Subsidiaries
Federal Home Loan Bank advances
Fixed
1.860% - 5.260%
2026 - 2027
11,550
12,550
Floating
4.130% - 4.590%
2026 - 2027
3,500
3,000
Bank notes
Fixed
3.966% - 5.550%
2027 - 2032
3,097
3,405
Floating
—% - 4.564%
2027 - 2065
2,892
1,813
Other(c)
2,668
1,977
Subtotal
23,707
22,745
Total
$ 60,764 $ 58,002
(a) Weighted-average interest rates of medium-term notes, Federal Home Loan Bank advances and bank notes were 4.60 percent, 4.41 percent and 3.44 percent, respectively.
(b) Includes $2.3 billion and $2.2 billion at December 31, 2025 and 2024, respectively, of discounted noninterest-bearing additional cash received by the Company upon close of its
2022 acquisition of MUB from Mitsubishi UFJ Financial Group ("MUFG") to be delivered to MUFG on or prior to December 1, 2027, discounted at the Company’s 5-year unsecured
borrowing rate as of the acquisition date, as well as debt issuance fees and unrealized gains and losses and deferred amounts relating to derivative instruments.
(c) Includes consolidated community development and tax-advantaged investment VIEs, finance lease obligations, debt issuance fees, and unrealized gains and losses and deferred
amounts relating to derivative instruments.
The Company has arrangements with the Federal Home
Loan Bank and Federal Reserve Bank whereby the
Company could have borrowed an additional $205.1 billion
and $171.2 billion at December 31, 2025 and 2024,
respectively.
Maturities of long-term debt outstanding at December 31,
2025, were:
(Dollars in Millions)
Parent
Company Consolidated
2026
$
2,428 $
15,402
2027
5,355
11,645
2028
4,001
5,773
2029
4,571
4,554
2030
4,244
4,264
Thereafter
16,458
19,126
Total
$
37,057 $
60,764
96 U.S. Bancorp 2025 Annual Report
NOTE 14 Shareholders' Equity
At December 31, 2025 and 2024, the Company had
authority to issue 4 billion shares of common stock and 50
million shares of preferred stock. The Company had 1.6
billion shares of common stock outstanding at
December 31, 2025 and 2024. The Company had 52 million
shares reserved for future issuances, primarily under its
stock incentive plans at December 31, 2025.
The number of shares issued and outstanding and the carrying amount of each outstanding series of the Company’s preferred
stock at December 31 were as follows:
2025
2024
(Dollars in Millions)
Shares
Issued and
Outstanding
Liquidation
Preference
Discount
Carrying
Amount
Shares
Issued and
Outstanding
Liquidation
Preference
Discount
Carrying
Amount
Series A
12,510 $
1,251 $
145 $
1,106
12,510 $
1,251 $
145 $
1,106
Series B
40,000
1,000
—
1,000
40,000
1,000
—
1,000
Series J
40,000
1,000
7
993
40,000
1,000
7
993
Series K
23,000
575
10
565
23,000
575
10
565
Series L
20,000
500
14
486
20,000
500
14
486
Series M
30,000
750
21
729
30,000
750
21
729
Series N
60,000
1,500
8
1,492
60,000
1,500
8
1,492
Series O
18,000
450
13
437
18,000
450
13
437
Total preferred stock(a)
243,510 $
7,026 $
218 $
6,808
243,510 $
7,026 $
218 $
6,808
(a) The par value of all shares issued and outstanding at December 31, 2025 and 2024, was $1.00 per share.
During 2022, the Company issued depositary shares
representing an ownership interest in 18,000 shares of
Series O Non-Cumulative Perpetual Preferred Stock with a
liquidation preference of $25,000 per share (the “Series O
Preferred Stock”). The Series O Preferred Stock has no
stated maturity and will not be subject to any sinking fund
or other obligation of the Company. Dividends, if declared,
will accrue and be payable quarterly, in arrears, at a rate
per annum equal to 4.50 percent. The Series O Preferred
Stock is redeemable at the Company’s option, in whole or
in part, on or after April 15, 2027. The Series O Preferred
Stock is redeemable at the Company’s option, in whole, but
not in part, prior to April 15, 2027 within 90 days following
an official administrative or judicial decision, amendment to,
or change in the laws or regulations that would not allow the
Company to treat the full liquidation value of the Series O
Preferred Stock as Tier 1 capital for purposes of the capital
adequacy guidelines of the Board of Governors of the
Federal Reserve System (the “Federal Reserve Board”).
During 2021, the Company issued depositary shares
representing an ownership interest in 60,000 shares of
Series N Fixed Rate Reset Non-Cumulative Perpetual
Preferred Stock with a liquidation preference of $25,000 per
share (the “Series N Preferred Stock”). The Series N
Preferred Stock has no stated maturity and will not be
subject to any sinking fund or other obligation of the
Company. Dividends, if declared, will accrue and be
payable quarterly, in arrears, at a rate per annum equal to
3.70 percent from the date of issuance to, but excluding,
January 15, 2027, and thereafter will accrue and be
payable quarterly at a floating rate per annum equal to the
five-year treasury rate plus 2.541 percent. The Series N
Preferred Stock is redeemable at the Company’s option, in
whole or in part, on or after January 15, 2027. The Series N
Preferred Stock is redeemable at the Company’s option, in
whole, but not in part, prior to January 15, 2027 within 90
days following an official administrative or judicial decision,
amendment to, or change in the laws or regulations that
would not allow the Company to treat the full liquidation
value of the Series N Preferred Stock as Tier 1 capital for
purposes of the capital adequacy guidelines of the Federal
Reserve Board.
During 2021, the Company issued depositary shares
representing an ownership interest in 30,000 shares of
Series M Non-Cumulative Perpetual Preferred Stock with a
liquidation preference of $25,000 per share (the “Series M
Preferred Stock”). The Series M Preferred Stock has no
stated maturity and will not be subject to any sinking fund
or other obligation of the Company. Dividends, if declared,
will accrue and be payable quarterly, in arrears, at a rate
per annum equal to 4.00 percent. The Series M Preferred
Stock is redeemable at the Company’s option, in whole or
in part, on or after April 15, 2026. The Series M Preferred
Stock is redeemable at the Company’s option, in whole, but
not in part, prior to April 15, 2026 within 90 days following
an official administrative or judicial decision, amendment to,
or change in the laws or regulations that would not allow the
Company to treat the full liquidation value of the Series M
Preferred Stock as Tier 1 capital for purposes of the capital
adequacy guidelines of the Federal Reserve Board.
During 2020, the Company issued depositary shares
representing an ownership interest in 20,000 shares of
Series L Non-Cumulative Perpetual Preferred Stock with a
liquidation preference of $25,000 per share (the “Series L
Preferred Stock”). The Series L Preferred Stock has no
stated maturity and will not be subject to any sinking fund
or other obligation of the Company. Dividends, if declared,
will accrue and be payable quarterly, in arrears, at a rate
per annum equal to 3.75 percent. The Series L Preferred
97
Stock is redeemable at the Company’s option, in whole or
in part.
During 2018, the Company issued depositary shares
representing an ownership interest in 23,000 shares of
Series K Non-Cumulative Perpetual Preferred Stock with a
liquidation preference of $25,000 per share (the “Series K
Preferred Stock”). The Series K Preferred Stock has no
stated maturity and will not be subject to any sinking fund
or other obligation of the Company. Dividends, if declared,
will accrue and be payable quarterly, in arrears, at a rate
per annum equal to 5.50 percent. The Series K Preferred
Stock is redeemable at the Company’s option, in whole or
in part.
During 2017, the Company issued depositary shares
representing an ownership interest in 40,000 shares of
Series J Non-Cumulative Perpetual Preferred Stock with a
liquidation preference of $25,000 per share (the “Series J
Preferred Stock”). The Series J Preferred Stock has no
stated maturity and will not be subject to any sinking fund
or other obligation of the Company. Dividends, if declared,
will accrue and be payable semiannually, in arrears, at a
rate per annum equal to 5.30 percent from the date of
issuance to, but excluding, April 15, 2027, and thereafter
will accrue and be payable quarterly at a floating rate per
annum equal to 2.914 percent above the three-month CME
Term SOFR plus a credit spread adjustment of 0.26161
percent. The Series J Preferred Stock is redeemable at the
Company’s option, in whole or in part, on or after April 15,
2027. The Series J Preferred Stock is redeemable at the
Company’s option, in whole, but not in part, prior to April
15, 2027 within 90 days following an official administrative
or judicial decision, amendment to, or change in the laws or
regulations that would not allow the Company to treat the
full liquidation value of the Series J Preferred Stock as Tier
1 capital for purposes of the capital adequacy guidelines of
the Federal Reserve Board.
During 2010, the Company issued depositary shares
representing an ownership interest in 5,746 shares of
Series A Non-Cumulative Perpetual Preferred Stock (the
“Series A Preferred Stock”) to investors, in exchange for
their portion of USB Capital IX Income Trust Securities.
During 2011, the Company issued depositary shares
representing an ownership interest in 6,764 shares of
Series A Preferred Stock to USB Capital IX, thereby settling
the stock purchase contract established between the
Company and USB Capital IX as part of the 2006 issuance
of USB Capital IX Income Trust Securities. The preferred
shares were issued to USB Capital IX for the purchase
price specified in the stock forward purchase contract. The
Series A Preferred Stock has a liquidation preference of
$100,000 per share, no stated maturity and will not be
subject to any sinking fund or other obligation of the
Company. Dividends, if declared, will accrue and be
payable quarterly, in arrears, at a rate per annum equal to
the greater of 1.02 percent above three-month CME Term
SOFR plus a credit spread adjustment of 0.26161 percent,
or 3.50 percent. The Series A Preferred Stock is
redeemable at the Company’s option, subject to prior
approval by the Federal Reserve Board.
During 2006, the Company issued depositary shares
representing an ownership interest in 40,000 shares of
Series B Non-Cumulative Perpetual Preferred Stock with a
liquidation preference of $25,000 per share (the “Series B
Preferred Stock”). The Series B Preferred Stock has no
stated maturity and will not be subject to any sinking fund
or other obligation of the Company. Dividends, if declared,
will accrue and be payable quarterly, in arrears, at a rate
per annum equal to the greater of 0.60 percent above
three-month CME Term SOFR plus a credit spread
adjustment of 0.26161 percent, or 3.50 percent. The Series
B Preferred Stock is redeemable at the Company’s option,
subject to the prior approval of the Federal Reserve Board.
During 2025, 2024 and 2023, the Company repurchased
shares of its common stock under various authorizations
approved by its Board of Directors. As of December 31,
2025, the approximate dollar value of shares that may yet
be purchased by the Company under the current Board of
Directors approved authorization was $4.4 billion. Share
repurchases are subject to the approval of the Company's
Board of Directors and compliance with regulatory
requirements.
The following table summarizes the Company’s common
stock repurchased in each of the last three years:
(Dollars and Shares in Millions)
Shares
Value
2025
11 $ 490
2024
4
173
2023
1
62
98 U.S. Bancorp 2025 Annual Report
Shareholders’ equity is affected by transactions and valuations of asset and liability positions that require adjustments to
accumulated other comprehensive income (loss). The reconciliation of the transactions affecting accumulated other
comprehensive income (loss) included in shareholders’ equity for the years ended December 31, is as follows:
(Dollars in Millions)
Unrealized
Gains
(Losses) on
Investment
Securities
Available-
For-Sale
Unrealized
Gains
(Losses) on
Investment
Securities
Transferred
From
Available-
For-Sale to
Held-To-
Maturity
Unrealized
Gains
(Losses) on
Derivative
Hedges
Unrealized
Gains
(Losses) on
Retirement
Plans
Debit
Valuation
Adjustments
Foreign
Currency
Translation
Total
2025
Balance at beginning of period
$ (5,078) $ (3,165) $
(553) $
(955) $
1 $
(14) $ (9,764)
Changes in unrealized gains (losses)
2,355
—
400
212
(15)
—
2,952
Foreign currency translation adjustment(a)
—
—
—
—
—
1
1
Reclassification to earnings of realized (gains) losses
61
470
251
(5)
—
—
777
Applicable income taxes
(616)
(121)
(167)
(53)
4
—
(953)
Balance at end of period
$ (3,278) $ (2,816) $
(69) $
(801) $
(10) $
(13) $ (6,987)
2024
Balance at beginning of period
$ (5,151) $ (3,537) $
(242) $ (1,138) $
— $
(28) $ (10,096)
Changes in unrealized gains (losses)
(60)
—
(676)
245
1
—
(490)
Foreign currency translation adjustment(a)
—
—
—
—
—
18
18
Reclassification to earnings of realized (gains) losses
154
499
258
(1)
—
—
910
Applicable income taxes
(21)
(127)
107
(61)
—
(4)
(106)
Balance at end of period
$ (5,078) $ (3,165) $
(553) $
(955) $
1 $
(14) $ (9,764)
2023
Balance at beginning of period
$ (6,378) $ (3,933) $
(114) $
(939) $
— $
(43) $ (11,407)
Changes in unrealized gains and losses
1,500
—
(252)
(262)
—
—
986
Foreign currency translation adjustment(a)
—
—
—
—
—
21
21
Reclassification to earnings of realized (gains) losses
145
530
80
(7)
—
—
748
Applicable income taxes
(418)
(134)
44
70
—
(6)
(444)
Balance at end of period
$ (5,151) $ (3,537) $
(242) $ (1,138) $
— $
(28) $ (10,096)
(a) Represents the impact of changes in foreign currency exchange rates on the Company’s investment in foreign operations and related hedges.
99
Additional detail about the impact to net income for items reclassified out of accumulated other comprehensive income (loss)
and into earnings for the years ended December 31 is as follows:
Impact to Net Income
Affected Line Item in the
Consolidated Statement of Income
(Dollars in Millions)
2025
2024
2023
Unrealized gains (losses) on investment securities available-for-sale
Realized gains (losses) on sales of investment securities
$
(61) $
(154) $
(145) Securities gains (losses), net
15
39
37 Applicable income taxes
(46)
(115)
(108) Net-of-tax
Unrealized gains (losses) on investment securities transferred from
available-for-sale to held-to-maturity
Amortization of unrealized gains (losses)
(470)
(499)
(530) Interest income
121
127
134 Applicable income taxes
(349)
(372)
(396) Net-of-tax
Unrealized gains (losses) on derivative hedges
Realized gains (losses) on derivative hedges
(251)
(258)
(80) Net interest income
63
66
21 Applicable income taxes
(188)
(192)
(59) Net-of-tax
Unrealized gains (losses) on retirement plans
Actuarial gains (losses) and prior service cost (credit) amortization
5
1
7 Other noninterest expense
(1)
—
(2) Applicable income taxes
4
1
5 Net-of-tax
Total impact to net income
$
(579) $
(678) $
(558)
Regulatory Capital The Company uses certain measures
defined by bank regulatory agencies to assess its capital.
The regulatory capital requirements effective for the
Company follow Basel III, with the Company being subject
to calculating its capital adequacy as a percentage of risk-
weighted assets under the standardized approach.
Tier 1 capital is considered core capital and includes
common shareholders’ equity adjusted for the aggregate
impact of certain items included in other comprehensive
income (loss) (“common equity tier 1 capital”), plus
qualifying preferred stock, trust preferred securities and
noncontrolling interests in consolidated subsidiaries subject
to certain limitations. Total risk-based capital includes Tier 1
capital and other items such as subordinated debt and the
allowance for credit losses. Capital measures are stated as
a percentage of risk-weighted assets, which are measured
based on their perceived credit risks and include certain
off-balance sheet exposures, such as unfunded loan
commitments, letters of credit, and derivative contracts.
Beginning in 2022, the Company began to phase into its
regulatory capital requirements the cumulative deferred
impact of its 2020 adoption of the accounting guidance
related to the impairment of financial instruments based on
the CECL methodology plus 25 percent of its quarterly
credit reserve increases during 2020 and 2021. This
cumulative deferred impact was phased into the
Company’s regulatory capital during 2022 through 2024.
Beginning January 1, 2025, the regulatory capital
requirements reflect the full implementation of the CECL
methodology.
The Company is also subject to leverage ratio
requirements, which is defined as Tier 1 capital as a
percentage of adjusted average assets under the
standardized approach and Tier 1 capital as a percentage
of total on- and off-balance sheet leverage exposure under
more risk-sensitive advanced approaches.
100 U.S. Bancorp 2025 Annual Report
The following table provides a summary of the regulatory capital requirements in effect, along with the actual components and
ratios for the Company and its bank subsidiaries:
U.S. Bancorp
U.S. Bank National Association
At December 31 (Dollars in Millions)
2025
2024
2025
2024
Basel III Standardized Approach:
Common equity tier 1 capital
$ 51,665
$ 47,877
$ 61,376
$ 59,866
Tier 1 capital
58,917
55,129
61,820
60,311
Total risk-based capital
68,087
64,375
71,277
69,947
Risk-weighted assets
480,382
450,498
471,419
443,426
Common equity tier 1 capital as a percent of risk-weighted assets
10.8 %
10.6 %
13.0 %
13.5 %
Tier 1 capital as a percent of risk-weighted assets
12.3
12.2
13.1
13.6
Total risk-based capital as a percent of risk-weighted assets
14.2
14.3
15.1
15.8
Tier 1 capital as a percent of adjusted quarterly average assets (leverage ratio)
8.7
8.3
9.4
9.3
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure
(total leverage exposure ratio)
7.1
6.8
7.6
7.6
U.S. Bancorp
U.S. Bank National Association
December 31, 2025
Minimum(a)
Well-
Capitalized(b)
Minimum(a)
Well-
Capitalized(b)
Bank Regulatory Capital Requirements
Common equity tier 1 capital as a percent of risk-weighted assets
7.1 %
7.0 %
6.5 %
Tier 1 capital as a percent of risk-weighted assets
8.6
6.0
8.5
8.0
Total risk-based capital as a percent of risk-weighted assets
10.6
10.0
10.5
10.0
Tier 1 capital as a percent of adjusted quarterly average assets (leverage ratio)
4.0
4.0
5.0
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure
(total leverage exposure ratio)(b)
3.0
3.0
(a) Banks and financial services holding companies must maintain minimum regulatory capital ratio requirements and meet their applicable capital buffer requirements to avoid
limitations on capital distributions and certain discretionary compensation payments. As of December 31, 2025, U.S. Bancorp’s minimum requirements included a stress capital
buffer requirement of 2.6 percent, compared to 3.1 percent at December 31, 2024. U.S. Bank National Association was subject to a capital conservation buffer requirement of 2.5
percent at both December 31, 2025 and 2024.
(b) U.S. Bancorp is subject to the Federal Reserve’s well-capitalized requirements at the tier 1 capital and total risk-based capital thresholds, while U.S. Bank National Association is
subject to the Office of the Comptroller of the Currency’s (“OCC”) well-capitalized requirements for common equity tier 1 capital, tier 1 capital, total risk-based capital, and tier 1
leverage ratios.
Noncontrolling interests principally represent third-party
investors’ interests in consolidated entities, including
preferred stock of consolidated subsidiaries. During 2006,
the Company’s banking subsidiary formed USB Realty
Corp., a real estate investment trust, for the purpose of
issuing 5,000 shares of Fixed-to-Floating Rate
Exchangeable Non-cumulative Perpetual Series A Preferred
Stock with a liquidation preference of $100,000 per share
(“Series A Preferred Securities”) to third-party investors.
Dividends on the Series A Preferred Securities, if declared,
will accrue and be payable quarterly, in arrears, at a rate
per annum equal to 1.147 percent above three-month CME
Term SOFR plus a credit spread adjustment of 0.26161
percent. If USB Realty Corp. has not declared a dividend
on the Series A Preferred Securities before the dividend
payment date for any dividend period, such dividend shall
not be cumulative and shall cease to accrue and be
payable, and USB Realty Corp. will have no obligation to
pay dividends accrued for such dividend period, whether
or not dividends on the Series A Preferred Securities are
declared for any future dividend period.
The Series A Preferred Securities will be redeemable, in
whole or in part, at the option of USB Realty Corp. on each
fifth anniversary after the dividend payment date occurring
in January 2012. Any redemption will be subject to the
approval of the OCC. During 2016, the Company
purchased 500 shares of the Series A Preferred Securities
held by third-party investors. As of December 31, 2025,
4,500 shares of the Series A Preferred Securities remain
outstanding.
101
NOTE 15 Earnings Per Share
The components of earnings per share were:
Year Ended December 31
(Dollars and Shares in Millions, Except Per Share Data)
2025
2024
2023
Net income attributable to U.S. Bancorp
$
7,570 $
6,299 $
5,429
Preferred dividends
(329)
(352)
(350)
Earnings allocated to participating stock awards
(47)
(38)
(28)
Net income applicable to U.S. Bancorp common shareholders
$
7,194 $
5,909 $
5,051
Average common shares outstanding
1,557
1,560
1,543
Net effect of the exercise and assumed purchase of stock awards
1
1
—
Average diluted common shares outstanding
1,558
1,561
1,543
Earnings per common share
$
4.62 $
3.79 $
3.27
Diluted earnings per common share
$
4.62 $
3.79 $
3.27
Options outstanding at December 31, 2025, 2024 and 2023, to purchase 1 million, 1 million and 3 million common shares,
respectively, were not included in the computation of diluted earnings per share for the years ended December 31, 2025, 2024
and 2023, because they were antidilutive.
NOTE 16 Employee Benefits
Employee Retirement Savings Plan The Company has a
defined contribution retirement savings plan that covers
substantially all its employees. Qualified employees are
allowed to contribute up to 75 percent of their annual
compensation, subject to Internal Revenue Service limits,
through salary deductions under Section 401(k) of the
Internal Revenue Code. Employee contributions are
invested at their direction among a variety of investment
alternatives. Employee contributions are 100 percent
matched by the Company, up to four percent of each
employee’s eligible annual compensation. The Company’s
matching contribution vests immediately and is invested in
the same manner as each employee’s future contribution
elections. Total expense for the Company’s matching
contributions was $249 million, $262 million and $254
million in 2025, 2024 and 2023, respectively.
Pension and Postretirement Welfare Plans The Company
has tax qualified noncontributory defined benefit pension
plans, nonqualified pension plans and a postretirement
welfare plan.
Pension Plans The funded tax qualified noncontributory
defined benefit pension plans provide benefits to
substantially all the Company’s employees. Participants
receive annual cash balance pay credits based on eligible
pay multiplied by a percentage determined by their age
and/or years of service, as defined by the plan documents.
Participants also receive an annual interest credit.
Generally, employees become vested upon completing
three years of vesting service. The Company did not
contribute to its qualified pension plans in 2025 and 2024
and does not expect to contribute to the plans in 2026.
The Company also maintains two non-qualified plans
that are unfunded and provide benefits to certain
employees. The assumptions used in computing the
accumulated benefit obligation, the projected benefit
obligation and net pension expense are substantially
consistent with those assumptions used for the funded
qualified plans. In 2026, the Company expects to contribute
approximately $55 million to its non-qualified pension plans,
which equals the 2026 expected benefit payments.
Postretirement Welfare Plan In addition to providing
pension benefits, the Company has a funded
postretirement welfare plan available to certain eligible
participants based on their hire or retirement date. The plan
is closed to new participants. In 2026, the Company does
not expect to contribute to its postretirement welfare plan.
102 U.S. Bancorp 2025 Annual Report
The following table summarizes the changes in benefit obligations and plan assets for the years ended December 31, and the
funded status and amounts recognized in the Consolidated Balance Sheet at December 31 for the pension plans:
(Dollars in Millions)
2025
2024
Change In Projected Benefit Obligation(a)
Benefit obligation at beginning of measurement period
$
7,069 $
7,278
Service cost
213
219
Interest cost
409
376
Plan amendments
(261)
—
Actuarial (gain) loss
413
(443)
Lump sum settlements
(125)
(118)
Benefit payments
(258)
(243)
Benefit obligation at end of measurement period(b)
$
7,460 $
7,069
Change In Fair Value Of Plan Assets
Fair value at beginning of measurement period
$
7,834 $
7,779
Actual return on plan assets
945
381
Employer contributions
39
35
Lump sum settlements
(125)
(118)
Benefit payments
(258)
(243)
Fair value at end of measurement period
$
8,435 $
7,834
Funded Status
$
975 $
765
Components Of The Consolidated Balance Sheet
Noncurrent benefit asset
$
1,575 $
1,329
Current benefit liability
(53)
(48)
Noncurrent benefit liability
(547)
(516)
Recognized amount
$
975 $
765
Accumulated Other Comprehensive Income (Loss), Pretax
Net actuarial loss
$
(1,407) $
(1,359)
Net prior service credit
286
30
Recognized amount
$
(1,121) $
(1,329)
Note: At December 31, 2025 and 2024, the postretirement welfare plan projected benefit obligation was $35 million and $41 million, respectively. At both December 31, 2025 and
2024, the fair value of plan assets was $47 million and the amount recognized in accumulated other comprehensive income (loss), pretax was $51 million.
(a) The increase in the projected benefit obligation for 2025 was primarily due to a lower discount rate, partially offset by the impact of plan amendments effective at the end of the year
to align the benefit crediting formula of a subset of employees with that of all other employees. The decrease in the projected benefit obligation for 2024 was primarily due to a
higher discount rate.
(b) At December 31, 2025 and 2024, the accumulated benefit obligation for all pension plans was $7.2 billion and $6.6 billion, respectively.
The following table provides information for pension plans with benefit obligations in excess of plan assets at December 31:
(Dollars in Millions)
2025
2024
Plans with Projected Benefit Obligations in Excess of Plan Assets
Projected benefit obligation
$
600 $
564
Fair value of plan assets
—
—
Plans with Accumulated Benefit Obligations in Excess of Plan Assets
Accumulated benefit obligation
$
568 $
525
Fair value of plan assets
—
—
103
The following table sets forth the components of net periodic pension cost and other amounts recognized in accumulated other
comprehensive income (loss) for the years ended December 31 for the pension plans:
(Dollars in Millions)
2025
2024
2023
Components Of Net Periodic Pension Cost
Service cost
$
213 $
219 $
223
Interest cost
409
376
370
Expected return on plan assets
(586)
(585)
(546)
Prior service credit amortization
(4)
(4)
(1)
Actuarial loss amortization
5
9
5
Net periodic pension cost
$
37 $
15 $
51
Other Changes In Plan Assets And Benefit Obligations Recognized In Other
Comprehensive Income (Loss)
Net actuarial (loss) gain arising during the year
$
(54) $
239 $
(286)
Net actuarial loss amortized during the year
5
9
5
Net prior service credit (cost) arising during the year
261
—
23
Net prior service credit amortized during the year
(4)
(4)
(1)
Total recognized in other comprehensive income (loss)
$
208 $
244 $
(259)
Total recognized in net periodic pension cost and other comprehensive income (loss)
$
171 $
229 $
(310)
Note: The net periodic benefit for the postretirement welfare plan was $6 million, $7 million and $10 million for the years end December 31, 2025, 2024 and 2023, respectively. The total
of other amounts recognized as other comprehensive income (loss) netted to less than $1 million, $(1) million and $(10) million for the years ended December 31, 2025, 2024 and
2023, respectively.
The following table sets forth weighted-average assumptions used to determine the pension plans projected benefit obligations
at December 31:
2025
2024
Discount rate
5.44 %
5.77 %
Cash balance interest crediting rate
3.58
3.71
Rate of compensation increase(a)
4.00
3.52
(a) Determined on an active liability-weighted basis.
The following table sets forth weighted-average assumptions used to determine net periodic pension cost for the years ended
December 31:
2025
2024
2023
Discount rate
5.77 %
5.12 %
5.55 %
Cash balance interest crediting rate
3.71
3.04
3.36
Expected return on plan assets(a)
7.00
7.00
6.75
Rate of compensation increase(b)
3.52
3.72
4.13
(a) With the help of an independent pension consultant, the Company considers several sources when developing its expected long-term rates of return on plan assets assumptions,
including, but not limited to, past returns and estimates of future returns given the plans' asset allocation, economic conditions, and peer group long-term rate of return information.
The Company determines its expected long-term rates of return reflecting current economic conditions and plan assets.
(b) Determined on an active liability-weighted basis.
104 U.S. Bancorp 2025 Annual Report
Investment Policies and Asset Allocation In establishing
its investment policies and asset allocation strategies, the
Company considers expected returns and the volatility
associated with different strategies. An independent
consultant performs modeling that projects numerous
outcomes using a broad range of possible scenarios,
including a mix of possible rates of inflation and economic
growth. Starting with current economic information, the
model bases its projections on past relationships between
inflation, fixed income rates and equity returns when these
types of economic conditions have existed over the
previous 30 years, both in the United States and in foreign
countries. Estimated future returns and other actuarially
determined adjustments are also considered in calculating
the estimated return on assets.
Generally, based on historical performance of the
various investment asset classes, investments in equities
have outperformed other investment classes but are
subject to higher volatility. In an effort to minimize volatility,
while recognizing the long-term up-side potential of
investing in equities, the Company’s Compensation and
Human Resources Committee has determined that a target
asset allocation of 35 percent long duration bonds, 30
percent global equities, 10 percent real assets, 10 percent
private equity funds, 5 percent domestic mid-small cap
equities, 5 percent emerging markets equities, and 5
percent hedge funds is appropriate.
At December 31, 2025 and 2024, plan assets included
an asset management arrangement with a related party
totaling approximately $105 million and $63 million,
respectively.
The assets of the qualified pension plans primarily
include funds that do not have readily determinable fair
values. These funds are valued based on net asset values
provided by the fund trustee or administrator. Plan assets
also include cash and cash equivalents and U.S. Treasury
securities with readily determinable fair values. The fair
values of U.S. Treasury securities are determined based on
quoted prices in active markets. The Company classified
these assets within Level 1 of the fair value hierarchy. Refer
to Note 21 for further discussion of the fair value hierarchy,
including the levels within the fair value hierarchy.
The following table summarizes the pension plans investment assets at December 31:
(Dollars in Millions)
2025
2024
Cash and cash equivalents
$
105 $
63
U.S Treasury securities
951
—
Investment assets not classified in fair value hierarchy(a)
Collective investment funds
Domestic equity securities
1,827
1,788
Mid-small cap equity securities
536
474
International equity securities
1,127
968
Real estate securities
178
171
Fixed income
1,183
1,958
Real estate funds(b)
770
733
Hedge funds(c)
468
354
Private equity funds(d)
1,290
1,325
Total plan investment assets at fair value
$
8,435 $
7,834
(a) These investment assets are valued based on net asset values as a practical expedient and as a result, are not classified in the fair value hierarchy.
(b) This category consists of several investment strategies diversified across several real estate fund managers.
(c) This category consists of several investment strategies diversified across several hedge fund managers.
(d) This category consists of several investment strategies diversified across several private equity fund managers.
The following benefit payments are expected to be paid from the pension plans for the years ended December 31:
(Dollars in Millions)
2026
$
420
2027
426
2028
450
2029
486
2030
494
2031-2035
2,719
105
NOTE 17 Stock-Based Compensation
As part of its employee and director compensation
programs, the Company currently may grant certain stock
awards under the provisions of its stock incentive plan. The
plan provides for grants of shares of common stock or
stock units that are subject to restriction on transfer prior to
vesting. Most stock and unit awards vest over three to five
years and are subject to forfeiture if certain vesting
requirements are not met. In addition, the plan provides for
grants of options to purchase shares of common stock at a
fixed price equal to the fair value of the underlying stock at
the date of grant. Option grants are generally exercisable
up to ten years from the date of grant. Stock incentive plans
of acquired companies are generally terminated at the
merger closing dates. Participants under such plans
receive the Company’s common stock, options to buy the
Company’s common stock, or long term cash incentives,
based on the conversion terms of the various merger
agreements. At December 31, 2025, there were 41 million
shares (subject to adjustment for forfeitures) available for
grant under the Company’s stock incentive plan.
Restricted Stock and Unit Awards
A summary of the status of the Company’s restricted shares of stock and unit awards is presented below:
2025
2024
2023
Year Ended December 31
Shares
Weighted-
Average Grant-
Date Fair Value
Shares
Weighted-
Average Grant-
Date Fair Value
Shares
Weighted-
Average Grant-
Date Fair Value
Outstanding at beginning of period
9,241,387 $
44.45
8,316,571 $
48.42
6,880,826 $
52.59
Granted
5,815,879
46.25
6,107,976
42.12
5,565,634
45.87
Vested
(5,272,319)
47.05 (4,680,480)
48.52 (3,872,874)
52.05
Cancelled
(507,322)
44.48
(502,680)
44.06
(257,015)
50.00
Outstanding at end of period
9,277,625 $
44.10
9,241,387 $
44.45
8,316,571 $
48.42
The total fair value of shares vested was $252 million,
$208 million and $180 million for the years ended
December 31, 2025, 2024 and 2023, respectively. Stock-
based compensation expense was $235 million, $232
million and $224 million for the years ended December 31,
2025, 2024 and 2023, respectively. On an after-tax basis,
stock-based compensation was $177 million, $173 million
and $167 million for the years ended December 31, 2025,
2024 and 2023, respectively. As of December 31, 2025,
there was $177 million of total unrecognized compensation
cost related to nonvested share-based arrangements
granted under the plans. That cost is expected to be
recognized over a weighted-average period of 1.8 years as
compensation expense.
Stock Option Awards
The number of outstanding stock options was less than
1 million as of December 31, 2025, compared with
approximately 2 million at December 31, 2024. The
weighted-average exercise price and remaining contractual
maturity of the outstanding stock options as of December
31, 2025 were $53.29 and 1.0 years, respectively.
106 U.S. Bancorp 2025 Annual Report
NOTE 18 Income Taxes
The components of income before income taxes and income tax expense (benefit) were as follows:
Year Ended December 31 (Dollars in Millions)
2025
2024
2023
Income before income taxes
U.S.
$
9,330 $
7,786 $
6,738
Foreign
187
123
127
Total
$
9,517 $
7,909 $
6,865
Income tax expense (benefit)
Current tax expense (benefit)
U.S. Federal
$
1,183 $
1,252 $
1,418
U.S. State and local
394
279
482
Foreign
36
20
16
Total current tax expense (benefit)
1,613
1,551
1,916
Deferred tax expense (benefit)
U.S. Federal
209
(5)
(342)
U.S. State and local
99
35
(183)
Foreign
—
(1)
16
Total deferred tax expense (benefit)
308
29
(509)
Total income tax expense (benefit)
U.S. Federal
1,392
1,247
1,076
U.S. State and local
493
314
299
Foreign
36
19
32
Total income tax expense (benefit)
$
1,921 $
1,580 $
1,407
A reconciliation of expected income tax expense at the U.S. federal statutory rate of 21 percent to the Company’s applicable
income tax expense follows:
Year Ended December 31 (Dollars in Millions)
2025
2024
2023
Amount
Percent
Amount
Percent
Amount
Percent
Tax at U.S. Federal statutory tax rate
$
1,999
21.0 % $
1,661
21.0 % $
1,442
21.0 %
State income and local taxes, net of U.S. federal tax benefit(a)
446
4.7
320
4.0
266
3.9
Foreign tax effects
2
—
—
—
4
.1
Effect of cross-border tax laws
11
.1
6
.1
(3)
—
Tax credits
Renewable energy
(378)
(4.0)
(230)
(2.9)
(119)
(1.7)
Other
(139)
(1.5)
(119)
(1.5)
(106)
(1.5)
Changes in valuation allowances
33
.3
—
—
—
—
Nontaxable or nondeductible items
Tax-exempt income
(151)
(1.6)
(144)
(1.8)
(142)
(2.1)
Nondeductible legal and regulatory expenses
46
.5
57
.7
76
1.1
Other
32
.3
35
.4
34
.5
Changes in unrecognized tax benefits
21
.2
(65)
(.8)
(52)
(.8)
Other adjustments
(1)
—
59
.7
7
.1
Applicable income taxes
$
1,921
20.2 % $
1,580
20.0 % $
1,407
20.5 %
(a) The majority of this category (greater than 50 percent) consists of California state taxes, California and Minnesota state taxes and California, Minnesota and New York state taxes for
2025, 2024 and 2023, respectively.
107
The components of cash paid for income taxes were:
Year Ended December 31 (Dollars in Millions)
2025
2024
2023
U.S. Federal
$
338 $
355 $
517
U.S. State and Local
California
120
85
44
New York
*
28
*
Other
50
15
64
Total U.S. State and local
170
128
108
Foreign
36
16
20
Total cash paid for income taxes
$
544 $
499 $
645
* The amount of cash paid for income taxes was less than 5 percent of total cash paid for income taxes for all jurisdictions during the period.
The tax effects of fair value adjustments on securities
available-for-sale, derivative instruments in cash flow
hedges, foreign currency translation adjustments, and
pension and post-retirement plans are recorded directly to
shareholders’ equity as part of other comprehensive
income (loss).
In preparing its tax returns, the Company is required to
interpret complex tax laws and regulations and utilize
income and cost allocation methods to determine its
taxable income. On an ongoing basis, the Company is
subject to examinations by U.S. federal, state, local and
foreign taxing authorities that may give rise to differing
interpretations of these complex laws, regulations and
methods. Due to the nature of the examination process, it
generally takes years before these examinations are
completed and matters are resolved. U.S. federal tax
examinations for all years ending through December 31,
2020 are completed and resolved. The Company’s tax
returns for the years ended December 31, 2021 through
December 31, 2022 are under examination by the Internal
Revenue Service. The years open to examination by
foreign, state and local government authorities vary by
jurisdiction.
A reconciliation of the changes in the U.S. federal, state and foreign uncertain tax position balances are summarized as follows:
Year Ended December 31 (Dollars in Millions)
2025
2024
2023
Balance at beginning of period
$
256 $
350 $
513
Additions for tax positions taken in prior years
8
32
141
Additions for tax positions taken in the current year
7
6
3
Exam resolutions
(3)
(131)
(302)
Statute expirations
(1)
(1)
(5)
Balance at end of period
$
267 $
256 $
350
The total amount of uncertain tax positions that, if
recognized, would impact the effective income tax rate as
of December 31, 2025, 2024 and 2023, were $215 million,
$206 million and $276 million, respectively. The Company
classifies interest and penalties related to uncertain tax
positions as a component of income tax expense. At
December 31, 2025, the Company’s uncertain tax position
balance included $39 million of accrued interest and
penalties. During the years ended December 31, 2025,
2024 and 2023 the Company recorded approximately $12
million, $(13) million and $(11) million, respectively, in
interest and penalties on uncertain tax positions.
Deferred income tax assets and liabilities reflect the tax
effect of estimated temporary differences between the
carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for the same
items for income tax reporting purposes.
108 U.S. Bancorp 2025 Annual Report
The significant components of the Company’s net deferred tax asset (liability) follows:
At December 31 (Dollars in Millions)
2025
2024
Deferred Tax Assets
U.S. federal, state and foreign net operating loss, credit carryforwards and other carryforwards
$
2,521 $
2,772
Securities available-for-sale and financial instruments
2,168
3,129
Allowance for credit losses
2,068
2,086
Accrued expenses
638
767
Loans
622
869
Obligation for operating leases
349
341
Partnerships and other investment assets
321
264
Stock compensation
84
89
Fixed assets
38
—
Other deferred tax assets, net
331
383
Gross deferred tax assets
9,140
10,700
Deferred Tax Liabilities
Goodwill and other intangible assets
(1,272)
(1,362)
Leasing activities
(1,087)
(1,273)
Mortgage servicing rights
(760)
(789)
Right of use operating leases
(311)
(297)
Pension and postretirement benefits
(241)
(184)
Fixed assets
—
(28)
Other deferred tax liabilities, net
(48)
(125)
Gross deferred tax liabilities
(3,719)
(4,058)
Valuation allowance
(432)
(389)
Net Deferred Tax Asset
$
4,989 $
6,253
The Company has approximately $142 million of
deferred tax assets related to U.S. federal, state and
foreign net operating loss carryforwards which expire at
various times beginning in 2026. A substantial portion of
these carryforwards relate to state-only net operating
losses, for which the related deferred tax asset is subject to
a full valuation allowance as the carryforwards are not
expected to be realized within the carryforward period.
In addition, the Company has $1.3 billion of U.S.
federal and state credit carryforwards which expire at
various times through 2045. Certain of these carryforwards
are subject to a valuation allowance as management
believes that it is more likely than not that the credits will not
be utilized within the carryforward period.
Management has determined it is more likely than not
the other net deferred tax assets could be realized through
carry back to taxable income in prior years, future reversals
of existing taxable temporary differences and future taxable
income.
At December 31, 2025, retained earnings included
approximately $102 million of base year reserves of
acquired thrift institutions, for which no deferred U.S.
federal income tax liability has been recognized. These
base year reserves would be recaptured if certain
subsidiaries of the Company cease to qualify as a bank for
U.S. federal income tax purposes. The base year reserves
also remain subject to income tax penalty provisions that, in
general, require recapture upon certain stock redemptions
of, and excess distributions to, stockholders.
109
NOTE 19 Derivative Instruments
In the ordinary course of business, the Company enters into
derivative transactions to manage various risks and to
accommodate the business requirements of its customers.
The Company recognizes all derivatives on the
Consolidated Balance Sheet at fair value in other assets or
in other liabilities. On the date the Company enters into a
derivative contract, the derivative is designated as either a
fair value hedge, cash flow hedge, net investment hedge,
or a designation is not made as it is a customer-related
transaction, an economic hedge for asset/liability risk
management purposes or another stand-alone derivative
created through the Company’s operations (“free-standing
derivative”). When a derivative is designated as a fair value,
cash flow or net investment hedge, the Company performs
an assessment, at inception and, at a minimum, quarterly
thereafter, to determine the effectiveness of the derivative in
offsetting changes in the value or cash flows of the hedged
item(s).
Fair Value Hedges These derivatives are interest rate
swaps the Company uses to hedge the change in fair value
related to interest rate changes of its underlying available-
for-sale investment securities and fixed-rate debt. Changes
in the fair value of derivatives designated as fair value
hedges, and changes in the fair value of the hedged items,
are recorded in earnings.
Cash Flow Hedges These derivatives are interest rate
swaps the Company uses to hedge the forecasted cash
flows from its underlying variable-rate loans and debt.
Changes in the fair value of derivatives designated as cash
flow hedges are recorded in other comprehensive income
(loss) until the cash flows of the hedged items are realized.
If a derivative designated as a cash flow hedge is
terminated or ceases to be highly effective, the gain or loss
in other comprehensive income (loss) is amortized to
earnings over the period the forecasted hedged
transactions impact earnings. If a hedged forecasted
transaction is no longer probable, hedge accounting is
ceased and any gain or loss included in other
comprehensive income (loss) is reported in earnings
immediately, unless the forecasted transaction is at least
reasonably possible of occurring, whereby the amounts
remain within other comprehensive income (loss). At
December 31, 2025, the Company had $69 million (net-of-
tax) of realized and unrealized losses on derivatives
classified as cash flow hedges recorded in other
comprehensive income (loss), compared with $553 million
(net-of-tax) of realized and unrealized losses at
December 31, 2024. The estimated amount to be
reclassified from other comprehensive income (loss) into
earnings during the next 12 months is a loss of $76 million
(net-of-tax). All cash flow hedges were highly effective for
the year ended December 31, 2025.
Net Investment Hedges The Company uses forward
commitments to sell specified amounts of certain foreign
currencies, and non-derivative debt instruments, to hedge
the volatility of its net investment in foreign operations
driven by fluctuations in foreign currency exchange rates.
The carrying amount of non-derivative debt instruments
designated as net investment hedges was $1.7 billion and
$1.3 billion at December 31, 2025 and December 31, 2024,
respectively.
Other Derivative Positions The Company enters into free-
standing derivatives to mitigate interest rate risk and for
other risk management purposes. These derivatives include
forward commitments to sell TBAs and other commitments
to sell residential mortgage loans, which are used to
economically hedge the interest rate risk related to MLHFS
and unfunded mortgage loan commitments. The Company
also enters into interest rate swaps, swaptions, forward
commitments to buy TBAs, U.S. Treasury and SOFR futures
and options on U.S. Treasury futures to economically
hedge the change in the fair value of the Company’s MSRs.
The Company enters into foreign currency forwards to
economically hedge remeasurement gains and losses the
Company recognizes on foreign currency denominated
assets and liabilities. The Company also enters into interest
rate swaps as economic hedges of fair value option elected
deposits and long-term debt. In addition, the Company acts
as a seller and buyer of interest rate, foreign exchange and
commodity contracts for its customers. The Company
mitigates the market, funding and liquidity risk associated
with these customer derivatives by entering into similar
offsetting positions with broker-dealers, or on a portfolio
basis by entering into other derivative or non-derivative
financial instruments that partially or fully offset the
exposure to earnings from these customer-related
positions. The Company’s customer derivatives and related
hedges are monitored and reviewed by the Company’s
Market Risk Committee, which establishes policies for
market risk management, including exposure limits for each
portfolio. The Company also has derivative contracts that
are created through its operations, including certain
unfunded mortgage loan commitments and swap
agreements related to the sale of a portion of its Class B
common and preferred shares of Visa Inc. Refer to Note 21
for further information on these swap agreements. The
Company uses credit derivatives to economically hedge
the credit risk on its derivative positions and loan portfolios.
110 U.S. Bancorp 2025 Annual Report
The following table summarizes the asset and liability management derivative positions of the Company at December 31:
2025
2024
Notional
Value
Fair Value
Notional
Value
Fair Value
(Dollars in Millions)
Assets
Liabilities
Assets
Liabilities
Fair value hedges
Interest rate contracts
Receive fixed/pay floating swaps
$
7,950 $
— $
— $
10,600 $
— $
—
Pay fixed/receive floating swaps
25,154
—
—
29,739
—
—
Cash flow hedges
Interest rate contracts
Receive fixed/pay floating swaps
25,350
—
—
28,550
—
—
Pay fixed/receive floating swaps
1,000
—
—
—
—
—
Net investment hedges
Foreign exchange forward contracts
759
—
2
870
7
—
Other economic hedges
Interest rate contracts
Futures and forwards
Buy
3,235
10
1
5,436
8
30
Sell
3,583
1
10
2,711
10
1
Options
Purchased
8,930
131
—
7,810
186
—
Written
2,553
13
58
1,991
8
47
Receive fixed/pay floating swaps
5,318
14
30
9,977
45
23
Pay fixed/receive floating swaps
2,479
—
—
2,371
—
—
Foreign exchange forward contracts
940
3
3
702
4
4
Equity contracts
334
2
1
293
—
9
Credit contracts
2,265
—
18
3,558
—
29
Other(a)
1,085
6
99
1,084
7
78
Total
$
90,935 $
180 $
222 $ 105,692 $
275 $
221
(a) Includes derivative liability swap agreements related to the sale of a portion of the Company’s Class B common and preferred shares of Visa Inc. The Visa swap agreements had
a total notional value and fair value of $995 million and $99 million at December 31, 2025, respectively, compared to $1.0 billion and $78 million at December 31, 2024,
respectively.
111
The following table summarizes the customer-related derivative positions of the Company at December 31:
2025
2024
Notional
Value
Fair Value
Notional
Value
Fair Value
(Dollars in Millions)
Assets
Liabilities
Assets
Liabilities
Interest rate contracts
Receive fixed/pay floating swaps
$ 459,357 $
1,326 $
2,134 $ 413,841 $
462 $
4,485
Pay fixed/receive floating swaps
386,099
1,142
449
363,837
2,342
153
Other(a)
66,014
19
33
72,503
17
34
Options
Purchased
148,778
222
8
96,238
414
2
Written
106,749
24
291
90,572
12
574
Futures
Buy
3,974
—
—
—
—
—
Sell
527
—
—
—
—
—
Foreign exchange rate contracts
Forwards, spots and swaps
137,555
2,688
2,575
113,718
2,441
2,232
Options
Purchased
1,101
20
2
497
14
—
Written
1,101
4
19
497
—
14
Commodity contracts
Swaps
18,068
810
705
8,224
199
180
Options
Purchased
4,545
278
2
3,921
233
2
Written
4,539
1
278
3,921
3
233
Futures
Buy
—
—
—
1
—
—
Sell
631
138
71
166
25
27
Credit contracts
14,683
—
3
13,670
—
3
Total
$1,353,721 $
6,672 $
6,570 $1,181,606 $
6,162 $
7,939
(a) Primarily represents floating rate interest rate swaps that pay based on differentials between specified interest rate indexes.
The table below shows the effective portion of the gains (losses) recognized in other comprehensive income (loss) and the gains
(losses) reclassified from other comprehensive income (loss) into earnings (net-of-tax) for the years ended December 31:
Gains (Losses) Recognized
in Other Comprehensive
Income (Loss)
Gains (Losses) Reclassified
from Other Comprehensive
Income (Loss) into Earnings
(Dollars in Millions)
2025
2024
2023
2025
2024
2023
Asset and Liability Management Positions
Cash flow hedges
Interest rate contracts
$ 296 $ (503) $ (187) $ (188) $ (192) $ (59)
Net investment hedges
Foreign exchange forward contracts
(33)
121
(11)
—
—
—
Non-derivative debt instruments
(195)
85
(33)
—
—
—
Note: The Company does not exclude components from effectiveness testing for cash flow and net investment hedges.
112 U.S. Bancorp 2025 Annual Report
The table below shows the effect of fair value and cash flow hedge accounting on the Consolidated Statement of Income for the
years ended December 31:
Interest Income
Interest Expense
(Dollars in Millions)
2025
2024
2023
2025
2024
2023
Total amount of income and expense line items presented in the
Consolidated Statement of Income in which the effects of fair value
or cash flow hedges are recorded
$ 30,970 $ 31,666 $ 30,007 $ 14,321 $ 15,377 $ 12,611
Asset and Liability Management Positions
Fair value hedges
Interest rate contract derivatives
(521)
508
(430)
(105)
95
(458)
Hedged items
522
(508)
427
92
(98)
461
Cash flow hedges
Interest rate contract derivatives
(230)
(230)
(52)
21
28
28
Note: The Company does not exclude components from effectiveness testing for fair value and cash flow hedges. The Company reclassified losses of $21 million, $28 million and $28
million into earnings during the years ended December 31, 2025, 2024 and 2023, respectively, as a result of realized cash flows on discontinued cash flow hedges. No amounts
were reclassified into earnings on discontinued cash flow hedges because it is probable the original hedged forecasted cash flows will not occur.
The table below shows cumulative hedging adjustments and the carrying amount of assets and liabilities currently designated in fair
value hedges at December 31:
Carrying Amount of
the Hedged Assets
and Liabilities
Cumulative Hedging
Adjustment
(Dollars in Millions)
2025
2024
2025
2024
Line Item in the Consolidated Balance Sheet
Available-for-sale investment securities(a)
$25,062 $29,005 $
75 $
(464)
Long-term debt
8,091 10,632
153
39
Note: The table above excludes the cumulative hedging adjustment related to discontinued hedging relationships on available-for-sale investment securities and long-term debt of
$57 million and $(33) million, respectively, at December 31, 2025, compared with $(72) million and $(149) million at December 31, 2024, respectively. The carrying amount of
available-for-sale investment securities and long-term debt related to discontinued hedging relationships was $11.8 billion and $16.6 billion, respectively, at December 31,
2025, compared with $6.8 billion and $14.9 billion at December 31, 2024, respectively.
(a)
Includes amounts related to available-for-sale investment securities currently designated as the hedged item in a fair value hedge using the portfolio layer method. At
December 31, 2025, the amortized cost of the closed portfolios used in these hedging relationships was $20.7 billion, of which $9.2 billion was designated as hedged. At
December 31, 2025, the cumulative amount of basis adjustments associated with these hedging relationships was $175 million. At December 31, 2024, the amortized cost of
the closed portfolios used in these hedging relationships was $17.5 billion, of which $11.6 billion was designated as hedged. At December 31, 2024, the cumulative amount of
basis adjustments associated with these hedging relationships was $13 million.
113
The table below shows the gains (losses) recognized in earnings for other economic hedges and the customer-related positions for the
years ended December 31:
(Dollars in Millions)
Location of Gains (Losses)
Recognized in Earnings
2025
2024
2023
Asset and Liability Management Positions
Other economic hedges
Interest rate contracts
Futures and forwards
Mortgage banking revenue $
68 $
5 $
71
Purchased and written options
Mortgage banking revenue
156
195
89
Swaps
Mortgage banking revenue/Interest
expense
37
(201)
(19)
Foreign exchange forward contracts
Other noninterest income
(6)
23
(7)
Equity contracts
Compensation expense
33
(4)
(8)
Credit contracts
Other noninterest income
4
(21)
—
Other
Other noninterest income
(114)
(147)
1
Customer-Related Positions
Interest rate contracts
Swaps
Capital markets revenue
201
280
185
Purchased and written options
Capital markets revenue
9
(58)
45
Futures
Capital markets revenue
3
—
(1)
Foreign exchange rate contracts
Forwards, spots and swaps
Capital markets revenue
238
215
195
Purchased and written options
Capital markets revenue
2
—
1
Commodity contracts
Swaps
Capital markets revenue
(74)
16
6
Purchased and written options
Capital markets revenue
15
6
—
Futures
Capital markets revenue
108
—
—
Credit contracts
Capital markets revenue
(12)
(3)
1
Derivatives are subject to credit risk associated with
counterparties to the derivative contracts. The Company
measures that credit risk using a credit valuation
adjustment and includes it within the fair value of the
derivative. The Company manages counterparty credit risk
through diversification of its derivative positions among
various counterparties, by entering into derivative positions
that are centrally cleared through clearinghouses, by
entering into master netting arrangements and, where
possible, by requiring collateral arrangements. A master
netting arrangement allows two counterparties, who have
multiple derivative contracts with each other, the ability to
net settle amounts under all contracts, including any related
collateral, through a single payment and in a single
currency. Collateral arrangements generally require the
counterparty to deliver collateral (typically cash or U.S.
Treasury and agency securities) equal to the Company’s
net derivative receivable, subject to minimum transfer and
credit rating requirements.
The Company’s collateral arrangements are
predominately bilateral and, therefore, contain provisions
that require collateralization of the Company’s net liability
derivative positions. Required collateral coverage is based
on net liability thresholds and may be contingent upon the
Company’s credit rating from two of the nationally
recognized statistical rating organizations. If the Company’s
credit rating were to fall below credit ratings thresholds
established in the collateral arrangements, the
counterparties to the derivatives could request immediate
additional collateral coverage up to and including full
collateral coverage for derivatives in a net liability position.
The aggregate fair value of all derivatives under collateral
arrangements that were in a net liability position at
December 31, 2025, was $1.7 billion. At December 31,
2025, the Company had $1.5 billion of cash posted as
collateral against this net liability position.
114 U.S. Bancorp 2025 Annual Report
NOTE 20 Netting Arrangements for Certain Financial Instruments and Securities
Financing Activities
The Company’s derivative portfolio consists of bilateral
over-the-counter trades, certain interest rate derivatives
and credit contracts required to be centrally cleared
through clearinghouses per current regulations, and
exchange-traded positions which may include U.S.
Treasury and SOFR futures or options on U.S. Treasury
futures. Of the Company’s $1.4 trillion total notional amount
of derivative positions at December 31, 2025, $649.4 billion
related to bilateral over-the-counter trades, $725.5 billion
related to those centrally cleared through clearinghouses
and $69.8 billion related to those that were exchange-
traded. The Company’s derivative contracts typically
include offsetting rights (referred to as netting
arrangements), and depending on expected volume, credit
risk, and counterparty preference, collateral maintenance
may be required. For all derivatives under collateral support
arrangements, fair value is determined daily and,
depending on the collateral maintenance requirements, the
Company and a counterparty may receive or deliver
collateral, based upon the net fair value of all derivative
positions between the Company and the counterparty.
Collateral is typically cash, but securities may be allowed
under collateral arrangements with certain counterparties.
Receivables and payables related to cash collateral are
included in other assets and other liabilities on the
Consolidated Balance Sheet, along with the related
derivative asset and liability fair values. Any securities
pledged to counterparties as collateral remain on the
Consolidated Balance Sheet. Securities received from
counterparties as collateral are not recognized on the
Consolidated Balance Sheet, unless the counterparty
defaults. In general, securities used as collateral can be
sold, repledged or otherwise used by the party in
possession. No restrictions exist on the use of cash
collateral by either party. Refer to Note 19 for further
discussion of the Company’s derivatives, including
collateral arrangements.
As part of the Company’s treasury and broker-dealer
operations, the Company executes transactions that are
treated as securities sold under agreements to repurchase
or securities purchased under agreements to resell, both of
which are accounted for as collateralized financings.
Securities sold under agreements to repurchase include
repurchase agreements and securities loaned transactions.
Securities purchased under agreements to resell include
reverse repurchase agreements and securities borrowed
transactions. For securities sold under agreements to
repurchase, the Company records a liability for the cash
received, which is included in short-term borrowings on the
Consolidated Balance Sheet. For securities purchased
under agreements to resell, the Company records a
receivable for the cash paid, which is included in other
assets on the Consolidated Balance Sheet.
Securities transferred to counterparties under
repurchase agreements and securities loaned transactions
continue to be recognized on the Consolidated Balance
Sheet, are measured at fair value, and are included in
investment securities or other assets. Securities received
from counterparties under reverse repurchase agreements
and securities borrowed transactions are not recognized on
the Consolidated Balance Sheet unless the counterparty
defaults. The securities transferred under repurchase and
reverse repurchase transactions typically are U.S. Treasury
and agency securities, residential agency mortgage-
backed securities, corporate debt securities or asset-
backed securities. The securities loaned or borrowed
typically are corporate debt securities traded by the
Company’s primary broker-dealer subsidiary. In general,
the securities transferred can be sold, repledged or
otherwise used by the party in possession. At
December 31, 2025 and December 31, 2024, the fair value
of collateral received where the Company has the
contractual right to sell or repledge was $62.6 billion and
$7.8 billion, respectively, of which $56.6 billion and $7.6
billion had been sold or repledged. No restrictions exist on
the use of cash collateral by either party. Repurchase/
reverse repurchase and securities loaned/borrowed
transactions expose the Company to counterparty risk. The
Company manages this risk by performing assessments,
independent of business line managers, and establishing
concentration limits on each counterparty. Additionally,
these transactions include collateral arrangements that
require the fair values of the underlying securities to be
determined daily, resulting in cash being obtained from or
refunded to counterparties to maintain specified collateral
levels.
115
The following table summarizes the maturities by category of collateral pledged for repurchase agreements and securities
loaned transactions:
(Dollars in Millions)
Overnight and
Continuous
Less Than 30
Days
30-89 Days
Greater Than
90 Days
Total
December 31, 2025
Repurchase agreements
U.S. Treasury and agencies
$
54,117 $
— $
— $
— $
54,117
Residential agency mortgage-backed securities
293
—
—
—
293
Corporate debt securities
3,015
100
—
—
3,115
Asset-backed securities
419
—
—
—
419
Total repurchase agreements
57,844
100
—
—
57,944
Securities loaned
Corporate debt securities
84
—
—
—
84
Total securities loaned
84
—
—
—
84
Gross amount of recognized liabilities
$
57,928 $
100 $
— $
— $
58,028
December 31, 2024
Repurchase agreements
U.S. Treasury and agencies
$
5,918 $
— $
— $
— $
5,918
Residential agency mortgage-backed securities
319
—
—
—
319
Corporate debt securities
1,116
—
—
—
1,116
Asset-backed securities
270
22
—
—
292
Total repurchase agreements
7,623
22
—
—
7,645
Securities loaned
Corporate debt securities
90
—
—
—
90
Total securities loaned
90
—
—
—
90
Gross amount of recognized liabilities
$
7,713 $
22 $
— $
— $
7,735
The Company executes its derivative, repurchase/
reverse repurchase and securities loaned/borrowed
transactions under the respective industry standard
agreements. These agreements include master netting
arrangements that allow for multiple contracts executed
with the same counterparty to be viewed as a single
arrangement. This allows for net settlement of a single
amount on a daily basis. In the event of default, the master
netting arrangement provides for close-out netting, which
allows all of these positions with the defaulting counterparty
to be terminated and net settled with a single payment
amount.
The Company has elected to offset the assets and
liabilities under netting arrangements for the balance sheet
presentation of the majority of its derivative counterparties.
The netting occurs at the counterparty level, and includes
all assets and liabilities related to the derivative contracts,
including those associated with cash collateral received or
delivered. The Company has also elected to offset the
assets and liabilities under netting arrangements for the
balance sheet presentation of repurchase/reverse
repurchase transactions with certain counterparties, but
has not made the election for securities loaned/borrowed
transactions.
116 U.S. Bancorp 2025 Annual Report
The following tables provide information on the Company’s netting adjustments, and items not offset on the Consolidated
Balance Sheet but available for offset in the event of default:
(Dollars in Millions)
Gross
Recognized
Assets
Gross Amounts
Offset on the
Consolidated
Balance Sheet(a)
Net Amounts
Presented on the
Consolidated
Balance Sheet
Gross Amounts Not Offset on the
Consolidated Balance Sheet
Financial
Instruments(b)
Collateral
Received(c)
Net Amount
December 31, 2025
Derivative assets(d)
$
6,832 $
(3,151) $
3,681 $
(116) $
(23) $
3,542
Reverse repurchase agreements
61,078
(48,708)
12,370
(454)
(11,888)
28
Securities borrowed
1,844
—
1,844
—
(1,769)
75
Total
$
69,754 $
(51,859) $
17,895 $
(570) $
(13,680) $
3,645
December 31, 2024
Derivative assets(d)
$
6,422 $
(2,979) $
3,443 $
(177) $
(5) $
3,261
Reverse repurchase agreements
6,383
—
6,383
(851)
(5,508)
24
Securities borrowed
1,516
—
1,516
—
(1,453)
63
Total
$
14,321 $
(2,979) $
11,342 $
(1,028) $
(6,966) $
3,348
(a) Includes $1.2 billion and $1.9 billion of cash collateral related payables that were netted against derivative assets at December 31, 2025 and 2024, respectively.
(b) For derivative assets this includes any derivative liability fair values that could be offset in the event of counterparty default; for reverse repurchase agreements this includes any
repurchase agreement payables that could be offset in the event of counterparty default; for securities borrowed this includes any securities loaned payables that could be offset in
the event of counterparty default.
(c) Includes the fair value of securities received by the Company from the counterparty. These securities are not included on the Consolidated Balance Sheet unless the counterparty
defaults.
(d) Excludes $20 million and $15 million at December 31, 2025 and 2024, respectively, of derivative assets not subject to netting arrangements.
(Dollars in Millions)
Gross
Recognized
Liabilities
Gross Amounts
Offset on the
Consolidated
Balance Sheet(a)
Net Amounts
Presented on the
Consolidated
Balance Sheet
Gross Amounts Not Offset on the
Consolidated Balance Sheet
Net Amount
Financial
Instruments(b)
Collateral
Pledged(c)
December 31, 2025
Derivative liabilities(d)
$
6,692 $
(3,392) $
3,300 $
(116) $
— $
3,184
Repurchase agreements
57,944
(48,708)
9,236
(454)
(8,779)
3
Securities loaned
84
—
84
—
(82)
2
Total
$
64,720 $
(52,100) $
12,620 $
(570) $
(8,861) $
3,189
December 31, 2024
Derivative liabilities(d)
$
8,081 $
(2,949) $
5,132 $
(177) $
— $
4,955
Repurchase agreements
7,645
—
7,645
(851)
(6,787)
7
Securities loaned
90
—
90
—
(88)
2
Total
$
15,816 $
(2,949) $
12,867 $
(1,028) $
(6,875) $
4,964
(a) Includes $1.5 billion and $1.9 billion of cash collateral related receivables that were netted against derivative liabilities at December 31, 2025 and 2024, respectively.
(b) For derivative liabilities this includes any derivative asset fair values that could be offset in the event of counterparty default; for repurchase agreements this includes any reverse
repurchase agreement receivables that could be offset in the event of counterparty default; for securities loaned this includes any securities borrowed receivables that could be
offset in the event of counterparty default.
(c) Includes the fair value of securities pledged by the Company to the counterparty. These securities are included on the Consolidated Balance Sheet unless the Company defaults.
(d) Excludes $100 million and $79 million at December 31, 2025 and 2024, respectively, of derivative liabilities not subject to netting arrangements.
117
NOTE 21 Fair Values of Assets and Liabilities
The Company uses fair value measurements for the initial
recording of certain assets and liabilities, periodic
remeasurement of certain assets and liabilities, and
disclosures. Derivatives, trading and available-for-sale
investment securities, MSRs, certain time deposits and
structured long-term notes, and substantially all MLHFS are
recorded at fair value on a recurring basis. Additionally,
from time to time, the Company may be required to record
at fair value other assets on a nonrecurring basis, such as
loans held for sale, loans held for investment and certain
other assets. These nonrecurring fair value adjustments
typically involve application of lower-of-cost-or-fair value
accounting or impairment write-downs of individual assets.
Other financial instruments, such as held-to-maturity
investment securities, loans, the majority of time deposits,
short-term borrowings and long-term debt, are accounted
for at amortized cost. See “Fair Value of Financial
Instruments” in this Note for further information on the
estimated fair value of these other financial instruments. In
accordance with disclosure guidance, certain financial
instruments, such as deposits with no defined or
contractual maturity, receivables and payables due in one
year or less, insurance contracts and equity investments
not accounted for at fair value, are excluded from this Note.
Fair value is defined as the exchange price that would
be received for an asset or paid to transfer a liability (an
exit price) in the principal or most advantageous market for
the asset or liability in an orderly transaction between
market participants on the measurement date. A fair value
measurement reflects all of the assumptions that market
participants would use in pricing the asset or liability,
including assumptions about the risk inherent in a particular
valuation technique, the effect of a restriction on the sale or
use of an asset and the risk of nonperformance.
The Company groups its assets and liabilities
measured at fair value into a three-level hierarchy for
valuation techniques used to measure financial assets and
financial liabilities at fair value. This hierarchy is based on
whether the valuation inputs are observable or
unobservable. These levels are:
• Level 1 — Quoted prices in active markets for identical
assets or liabilities. Level 1 includes U.S. Treasury
securities, as well as exchange-traded instruments.
• Level 2 — Observable inputs other than Level 1 prices,
such as quoted prices for similar assets or liabilities;
quoted prices in markets that are not active; or other
inputs that are observable or can be corroborated by
observable market data for substantially the full term of
the assets or liabilities. Level 2 includes debt securities
that are traded less frequently than exchange-traded
instruments and which are typically valued using third
party pricing services; derivative contracts and other
assets and liabilities, including securities, certain time
deposits, and structured long-term notes, whose value is
determined using a pricing model with inputs that are
observable in the market or can be derived principally
from or corroborated by observable market data; and
MLHFS whose values are determined using quoted
prices for similar assets or pricing models with inputs that
are observable in the market or can be corroborated by
observable market data.
• Level 3 — Unobservable inputs that are supported by
little or no market activity and that are significant to the
fair value of the assets or liabilities. Level 3 assets and
liabilities include financial instruments whose values are
determined using pricing models, discounted cash flow
methodologies, or similar techniques, as well as
instruments for which the determination of fair value
requires significant management judgment or estimation.
This category includes MSRs and certain derivative
contracts.
Valuation Methodologies
The valuation methodologies used by the Company to
measure financial assets and liabilities at fair value are
described below. In addition, the following section includes
an indication of the level of the fair value hierarchy in which
the assets or liabilities are classified. Where appropriate,
the descriptions include information about the valuation
models and key inputs to those models. During the years
ended December 31, 2025, 2024 and 2023, there were no
significant changes to the valuation techniques used by the
Company to measure fair value.
Available-for-Sale Investment Securities When quoted
market prices for identical securities are available in an
active market, these prices are used to determine fair value
and these securities are classified within Level 1 of the fair
value hierarchy. Level 1 investment securities include U.S.
Treasury and exchange-traded securities.
For other securities, quoted market prices may not be
readily available for the specific securities. When possible,
the Company determines fair value based on market
observable information, including quoted market prices for
similar securities, inactive transaction prices, and broker
quotes. These securities are classified within Level 2 of the
fair value hierarchy. Level 2 valuations are generally
provided by a third-party pricing service. Level 2
investment securities are predominantly agency mortgage-
backed securities, certain other asset-backed securities,
obligations of state and political subdivisions and agency
debt securities.
Mortgage Loans Held For Sale MLHFS measured at fair
value, for which an active secondary market and readily
available market prices exist, are initially valued at the
transaction price and are subsequently valued by
comparison to instruments with similar collateral and risk
profiles. MLHFS are classified within Level 2. Included in
mortgage banking revenue was a net gain of $30 million
and net losses of $15 million and $46 million for the years
ended December 31, 2025, 2024 and 2023, respectively,
from the changes to fair value of these MLHFS under fair
value option accounting guidance. Changes in fair value
due to instrument specific credit risk were immaterial.
118 U.S. Bancorp 2025 Annual Report
Interest income for MLHFS is measured based on
contractual interest rates and reported as interest income
on the Consolidated Statement of Income. Electing to
measure MLHFS at fair value reduces certain timing
differences and better matches changes in fair value of
these assets with changes in the value of the derivative
instruments used to economically hedge them without the
burden of complying with the requirements for hedge
accounting.
Time Deposits The Company elects the fair value option to
account for certain time deposits that are hedged with
derivatives that do not qualify for hedge accounting.
Electing to measure these time deposits at fair value
reduces certain timing differences and better matches
changes in fair value of these deposits with changes in the
value of the derivative instruments used to economically
hedge them. The time deposits measured at fair value are
valued using a discounted cash flow model that utilizes
market observable inputs and are classified within Level 2.
Included in interest expense on deposits was a net loss of
$8 million and a net gain of $4 million for the years ended
December 31, 2025 and 2024, respectively, from the
changes in fair value of time deposits under fair value
option accounting guidance.
Long-term Debt The Company elects the fair value option
to account for certain structured notes that are hedged with
derivatives that do not qualify for hedge accounting.
Electing to measure these structured notes at fair value
reduces certain timing differences and better matches
changes in fair value of these notes with changes in the
value of the derivative instruments used to economically
hedge them. The structured notes measured at fair value
are valued using a discounted cash flow model that utilizes
market observable inputs and are classified within Level 2.
The discount rate used in the discounted cash flow model
incorporates the impact of the Company's credit spread,
which is based on observable spreads in the secondary
bond market. Changes in fair value attributable to
instrument specific credit risk are recorded as debit
valuation adjustments (“DVA”) in other comprehensive
income (loss) with all other changes in fair value recorded
in interest expense. Included in other comprehensive
income (loss) and interest expense on long-term debt was
a net DVA loss of $15 million and a gain of $1 million for the
years ended December 31, 2025 and 2024, respectively,
and net gains of $2 million and $17 million for the years
ended December 31, 2025 and 2024, respectively, from the
changes in fair value of structured notes under fair value
option account guidance.
Mortgage Servicing Rights MSRs are valued using a
discounted cash flow methodology, and are classified
within Level 3. The Company determines fair value of the
MSRs by projecting future cash flows for different interest
rate scenarios using prepayment rates and other
assumptions, and discounts these cash flows using a risk
adjusted rate based on option adjusted spread levels.
There is minimal observable market activity for MSRs on
comparable portfolios and, therefore, the determination of
fair value requires significant management judgment. Refer
to Note 9 for further information on MSR valuation
assumptions.
Derivatives The majority of derivatives held by the
Company are executed over-the-counter or centrally
cleared through clearinghouses and are valued using
market standard cash flow valuation techniques. The
models incorporate inputs, depending on the type of
derivative, including interest rate curves, foreign exchange
rates and volatility. All derivative values incorporate an
assessment of the risk of counterparty nonperformance,
measured based on the Company’s evaluation of credit risk
including external assessments of credit risk. The Company
monitors and manages its nonperformance risk by
considering its ability to net derivative positions under
master netting arrangements, as well as collateral received
or provided under collateral arrangements. Accordingly,
the Company has elected to measure the fair value of
derivatives, at a counterparty level, on a net basis. The
majority of the derivatives are classified within Level 2 of the
fair value hierarchy, as the significant inputs to the models,
including nonperformance risk, are observable. However,
certain derivative transactions are with counterparties
where risk of nonperformance cannot be observed in the
market and, therefore, the credit valuation adjustments
result in these derivatives being classified within Level 3 of
the fair value hierarchy.
The Company also has other derivative contracts that
are created through its operations, including commitments
to purchase and originate mortgage loans and swap
agreements executed in conjunction with the sale of a
portion of its Class B common and preferred shares of Visa
Inc. (the “Visa swaps”). The mortgage loan commitments
are valued by pricing models that include market
observable and unobservable inputs, which result in the
commitments being classified within Level 3 of the fair
value hierarchy. The unobservable inputs include
assumptions about the percentage of commitments that
actually become a closed loan and the MSR value that is
inherent in the underlying loan value. The Visa swaps
require payments by either the Company or the purchaser
of the Visa Inc. Class B common and preferred shares
when there are changes in the conversion rate of the Visa
Inc. Class B common and preferred shares to Visa Inc.
Class A common and preferred shares, respectively, as
well as quarterly payments to the purchaser based on
specified terms of the agreements. Management reviews
and updates the Visa swaps fair value in conjunction with
its review of Visa Inc. related litigation contingencies, and
the associated escrow funding. The expected litigation
resolution impacts the Visa Inc. Class B common share to
Visa Inc. Class A common share conversion rate, as well as
the ultimate termination date for the Visa swaps.
Accordingly, the Visa swaps are classified within Level 3.
Refer to Note 22 for further information on the Visa Inc.
restructuring and related card association litigation.
119
Significant Unobservable Inputs of
Level 3 Assets and Liabilities
The following section provides information to facilitate an
understanding of the uncertainty in the fair value
measurements for the Company’s Level 3 assets and
liabilities recorded at fair value on the Consolidated
Balance Sheet. This section includes a description of the
significant inputs used by the Company and a description
of any interrelationships between these inputs. The
discussion below excludes nonrecurring fair value
measurements of collateral value used for impairment
measures for loans and OREO. These valuations utilize
third party appraisal or broker price opinions, and are
classified as Level 3 due to the significant judgment
involved.
Mortgage Servicing Rights The significant unobservable
inputs used in the fair value measurement of the
Company’s MSRs are expected prepayments and the
option adjusted spread that is added to the risk-free rate to
discount projected cash flows. Significant increases in
either of these inputs in isolation would have resulted in a
significantly lower fair value measurement. Significant
decreases in either of these inputs in isolation would have
resulted in a significantly higher fair value measurement.
There is no direct interrelationship between prepayments
and option adjusted spread. Prepayment rates generally
move in the opposite direction of market interest rates.
Option adjusted spread is generally impacted by changes
in market return requirements.
The following table shows the significant valuation assumption ranges for MSRs at December 31, 2025:
Minimum
Maximum
Weighted-
Average(a)
Expected prepayment
6 %
20 %
9 %
Option adjusted spread
5
11
6
(a) Determined based on the relative fair value of the related mortgage loans serviced.
Derivatives The Company has two distinct Level 3
derivative portfolios: (i) the Company’s commitments to
purchase and originate mortgage loans that meet the
requirements of a derivative and (ii) the Company’s asset/
liability and customer-related derivatives that are Level 3
due to unobservable inputs related to measurement of risk
of nonperformance by the counterparty. In addition, the
Company’s Visa swaps are classified within Level 3.
The significant unobservable inputs used in the fair
value measurement of the Company’s derivative
commitments to purchase and originate mortgage loans
are the percentage of commitments that actually become a
closed loan and the MSR value that is inherent in the
underlying loan value. A significant increase in the rate of
loans that close would have resulted in a larger derivative
asset or liability. A significant increase in the inherent MSR
value would have resulted in an increase in the derivative
asset or a reduction in the derivative liability. Expected loan
close rates and the inherent MSR values are directly
impacted by changes in market rates and will generally
move in the same direction as interest rates.
The following table shows the significant valuation assumption ranges for the Company’s derivative commitments to purchase
and originate mortgage loans at December 31, 2025:
Minimum
Maximum
Weighted-
Average(a)
Expected loan close rate
4 %
100 %
83 %
Inherent MSR value (basis points per loan)
57
214
125
(a) Determined based on the relative fair value of the related mortgage loans.
The significant unobservable input used in the fair value
measurement of certain of the Company’s asset/liability and
customer-related derivatives is the credit valuation
adjustment related to the risk of counterparty
nonperformance. A significant increase in the credit
valuation adjustment would have resulted in a lower fair
value measurement. A significant decrease in the credit
valuation adjustment would have resulted in a higher fair
value measurement. The credit valuation adjustment is
impacted by changes in market rates, volatility, market
implied credit spreads, and loss recovery rates, as well as
the Company’s assessment of the counterparty’s credit
position. At December 31, 2025, the minimum, maximum
and weighted-average credit valuation adjustment as a
percentage of the net fair value of the counterparty’s
derivative contracts prior to adjustment was 0 percent,
2,431 percent and 2 percent, respectively.
The significant unobservable inputs used in the fair
value measurement of the Visa swaps are management’s
estimate of the probability of certain litigation scenarios
occurring, and the timing of the resolution of the related
litigation loss estimates in excess, or shortfall, of the
Company’s proportional share of escrow funds. An
increase in the loss estimate or a delay in the resolution of
the related litigation would have resulted in an increase in
the derivative liability. A decrease in the loss estimate or an
acceleration of the resolution of the related litigation would
have resulted in a decrease in the derivative liability.
120 U.S. Bancorp 2025 Annual Report
The following table summarizes the balances of assets and liabilities measured at fair value on a recurring basis:
(Dollars in Millions)
Level 1
Level 2
Level 3
Netting
Total
December 31, 2025
Available-for-sale securities
U.S. Treasury and agencies
$
24,038 $
4,732 $
— $
— $
28,770
Mortgage-backed securities
Residential agency
—
38,010
—
—
38,010
Commercial
Agency
—
7,742
—
—
7,742
Non-agency
—
7
—
—
7
Asset-backed securities
—
6,527
—
—
6,527
Obligations of state and political subdivisions
—
9,514
—
—
9,514
Other
—
268
—
—
268
Total available-for-sale
24,038
66,800
—
—
90,838
Mortgage loans held for sale
—
2,353
—
—
2,353
Mortgage servicing rights
—
—
3,159
—
3,159
Derivative assets
147
4,735
1,970
(3,151)
3,701
Other assets
524
2,261
—
—
2,785
Total
$
24,709 $
76,149 $
5,129 $
(3,151) $
102,836
Time deposits
$
— $
718 $
— $
— $
718
Long-term debt
—
1,414
—
—
1,414
Derivative liabilities
72
4,538
2,182
(3,392)
3,400
Short-term borrowings and other liabilities(a)
717
1,796
—
—
2,513
Total
$
789 $
8,466 $
2,182 $
(3,392) $
8,045
December 31, 2024
Available-for-sale securities
U.S. Treasury and agencies
$
23,891 $
4,496 $
— $
— $
28,387
Mortgage-backed securities
Residential agency
—
33,281
—
—
33,281
Commercial
Agency
—
7,351
—
—
7,351
Non-agency
—
6
—
—
6
Asset-backed securities
—
7,165
—
—
7,165
Obligations of state and political subdivisions
—
9,552
—
—
9,552
Other
—
250
—
—
250
Total available-for-sale
23,891
62,101
—
—
85,992
Mortgage loans held for sale
—
2,251
—
—
2,251
Mortgage servicing rights
—
—
3,369
—
3,369
Derivative assets
27
5,208
1,202
(2,979)
3,458
Other assets
420
1,769
—
—
2,189
Total
$
24,338 $
71,329 $
4,571 $
(2,979) $
97,259
Time deposits
$
— $
5,754 $
— $
— $
5,754
Long-term debt
—
391
—
—
391
Derivative liabilities
27
5,131
3,002
(2,949)
5,211
Short-term borrowings and other liabilities(a)
475
1,460
—
—
1,935
Total
$
502 $
12,736 $
3,002 $
(2,949) $
13,291
Note: Excluded from the table above are equity investments without readily determinable fair values. The Company has elected to carry these investments at historical cost, adjusted
for impairment and any changes resulting from observable price changes for identical or similar investments of the issuer. The aggregate carrying amount of these equity investments
was $203 million and $159 million at December 31, 2025 and 2024, respectively, and reflect no impairment or observable price change adjustment at December 31, 2025. The
Company did not record any adjustments for observable price changes during 2025 and 2024.
(a) Primarily represents the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.
121
The following table presents the changes in fair value for all assets and liabilities measured at fair value on a recurring basis
using significant unobservable inputs (Level 3) for the years ended December 31:
(Dollars in Millions)
Beginning
of Period
Balance
Net Gains
(Losses)
Included
in Net
Income
Purchases
Sales
Principal
Payments Issuances
Settlements
End of
Period
Balance
Net Change in
Unrealized
Gains (Losses)
Relating to
Assets and
Liabilities Held
at End of Period
2025
Mortgage servicing rights
$ 3,369 $ (355) (a) $
— $ (131) $
— $
276 (c) $
— $ 3,159 $
(355) (a)
Net derivative assets and liabilities
(1,800) (1,145) (b)
945
(11)
—
1
1,798
(212)
994 (d)
2024
Mortgage servicing rights
$ 3,377 $
(97) (a) $
1 $ (188) $
— $
276 (c) $
— $ 3,369 $
(97) (a)
Net derivative assets and liabilities
(1,885) (3,829) (e)
1,076
(18)
—
1
2,855
(1,800)
(492) (f)
2023
Available-for-sale securities
Obligations of state and political
subdivisions
$
1 $
—
$
— $
— $
(1) $
—
$
— $
— $
—
Total available-for-sale
1
—
—
—
(1)
—
—
—
—
Mortgage servicing rights
3,755
(316) (a)
5
(440)
—
373 (c)
—
3,377
(316) (a)
Net derivative assets and liabilities
(3,199) (2,696) (g)
552
(45)
—
1
3,502
(1,885)
(183) (h)
(a) Included in mortgage banking revenue.
(b) Approximately $237 million, $(1.3) billion and $(116) million included in mortgage banking revenue, capital markets revenue and other noninterest income, respectively.
(c) Represents MSRs capitalized during the period.
(d) Approximately $13 million, $1.1 billion and $(116) million included in mortgage banking revenue, capital markets revenue and other noninterest income, respectively.
(e) Approximately $200 million, $(3.9) billion and $(147) million included in mortgage banking revenue, capital markets revenue and other noninterest income, respectively.
(f) Approximately $7 million, $(352) million and $(147) million included in mortgage banking revenue, capital markets revenue and other noninterest income, respectively.
(g) Approximately $182 million, $(2.9) billion and $1 million included in mortgage banking revenue, capital markets revenue and other noninterest income, respectively.
(h) Approximately $15 million, $(199) million and $1 million included in mortgage banking revenue, capital markets revenue and other noninterest income, respectively.
The Company is also required periodically to measure certain other financial assets at fair value on a nonrecurring basis.
These measurements of fair value usually result from the application of lower-of-cost-or-fair value accounting or write-downs of
individual assets.
The following table summarizes the balances as of the measurement date of assets measured at fair value on a nonrecurring
basis, and still held as of December 31:
2025
2024
(Dollars in Millions)
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Loans(a)
$
— $
— $
763 $
763 $
— $
— $
636 $
636
Other assets(b)
—
—
51
51
—
—
25
25
(a) Represents the carrying value of loans for which adjustments were based on the fair value of the collateral, excluding loans fully charged-off.
(b) Primarily represents the fair value of foreclosed properties that were measured at fair value based on an appraisal or broker price opinion of the collateral subsequent to their initial
acquisition.
The following table summarizes losses recognized related to nonrecurring fair value measurements of individual assets or
portfolios for the years ended December 31:
(Dollars in Millions)
2025
2024
2023
Loans(a)
$
386 $
399 $
368
Other assets(b)
9
12
32
(a) Represents write-downs of loans which were based on the fair value of the collateral, excluding loans fully charged-off.
(b) Primarily represents related losses of foreclosed properties that were measured at fair value subsequent to their initial acquisition.
122 U.S. Bancorp 2025 Annual Report
Fair Value Option
The following table summarizes the differences between the aggregate fair value carrying amount of the assets and liabilities for
which the fair value option has been elected and the aggregate remaining contractual principal balance outstanding as of
December 31:
2025
2024
(Dollars in Millions)
Fair Value
Carrying
Amount
Contractual
Principal
Outstanding
Carrying
Amount Over
(Under)
Contractual
Principal
Outstanding
Fair Value
Carrying
Amount
Contractual
Principal
Outstanding
Carrying
Amount Over
(Under)
Contractual
Principal
Outstanding
Total loans(a)
$
2,353 $
2,325 $
28 $
2,251 $
2,243 $
8
Time deposits
718
718
—
5,754
5,762
(8)
Long-term debt
1,414
1,419
(5)
391
409
(18)
(a) Includes nonaccrual loans of $1 million carried at fair value with contractual principal outstanding of $1 million at December 31, 2025 and $1 million carried at fair value with
contractual principal outstanding of $1 million at December 31, 2024. Includes loans 90 days or more past due of $5 million carried at fair value with contractual principal
outstanding of $5 million at December 31, 2025 and $4 million carried at fair value with contractual principal outstanding of $4 million at December 31, 2024.
Fair Value of Financial Instruments
The following section summarizes the estimated fair value
for financial instruments accounted for at amortized cost as
of December 31, 2025 and 2024. In accordance with
disclosure guidance related to fair values of financial
instruments, the Company did not include assets and
liabilities that are not financial instruments, such as the
value of goodwill, long-term relationships with deposit,
credit card, merchant processing and trust customers,
other purchased intangibles, premises and equipment,
deferred taxes and other liabilities. Additionally, in
accordance with the disclosure guidance, receivables and
payables due in one year or less, insurance contracts,
equity investments not accounted for at fair value, and
deposits with no defined or contractual maturities are
excluded.
The estimated fair values of the Company’s financial instruments as of December 31, are shown in the table below:
2025
2024
Carrying
Amount
Fair Value
Carrying
Amount
Fair Value
(Dollars in Millions)
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Financial Assets
Cash and due from banks
$46,890 $46,890 $
— $
— $46,890 $56,502 $56,502 $
— $
— $56,502
Federal funds sold and securities
purchased under resale agreements
12,359
— 12,359
—
12,359 6,380
—
6,380
—
6,380
Investment securities held-to-maturity
76,170
644 66,435
—
67,079 78,634 1,275 65,000
—
66,275
Loans held for sale(a)
185
—
—
185
185
322
—
—
322
322
Loans, net of allowance for losses
383,730
—
— 383,323 383,323 372,249
—
— 365,628 365,628
Other(b)
2,074
—
1,641
433 2,074 2,482
—
1,767
715 2,482
Financial Liabilities
Time deposits(c)
47,314
— 47,391
—
47,391 49,015
— 49,156
—
49,156
Short-term borrowings(d)
14,649
— 14,490
—
14,490 13,583
— 13,419
—
13,419
Long-term debt(e)
59,350
— 59,149
—
59,149 57,611
— 56,441
—
56,441
Other(f)
4,940
—
1,419 3,521 4,940 5,220
—
1,369 3,851 5,220
(a) Excludes mortgages held for sale for which the fair value option under applicable accounting guidance was elected.
(b) Includes investments in Federal Reserve Bank and FHLB stock and tax-advantaged investments.
(c) Excludes time deposits for which the fair value option under applicable accounting guidance was elected.
(d) Excludes the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.
(e) Excludes structured long-term notes for which the fair value option under applicable accounting guidance was elected.
(f) Includes operating lease liabilities and liabilities related to tax-advantaged investments.
The fair value of unfunded commitments, deferred non-
yield related loan fees, standby letters of credit and other
guarantees is approximately equal to their carrying value.
The carrying value of unfunded commitments, deferred
non-yield related loan fees and standby letters of credit was
$377 million and $376 million at December 31, 2025 and
2024, respectively. The carrying value of other guarantees
was $187 million and $194 million at December 31, 2025
and 2024, respectively.
123
NOTE 22 Guarantees and Contingent Liabilities
Visa Restructuring and Card Association Litigation The
Company’s Payment Services business issues credit and
debit cards and acquires credit and debit card transactions
through the Visa U.S.A. Inc. card association or its affiliates
(collectively “Visa”). In 2007, Visa completed a restructuring
and issued shares of Visa Inc. common stock to its financial
institution members in contemplation of its initial public
offering (“IPO”) completed in the first quarter of 2008 (the
“Visa Reorganization”). As a part of the Visa
Reorganization, the Company received its proportionate
number of shares of Visa Inc. common stock, which were
subsequently converted to Class B shares of Visa Inc.
(“Class B shares”). As of December 31, 2025, the Company
has sold substantially all of its Class B shares.
Visa U.S.A. Inc. (“Visa U.S.A.”) and MasterCard
International (collectively, the “Card Brands”) are
defendants in antitrust lawsuits challenging the practices of
the Card Brands (the “Visa Litigation”). Visa U.S.A. member
banks have a contingent obligation to indemnify Visa Inc.
under the Visa U.S.A. bylaws (which were modified at the
time of the restructuring in October 2007) for potential
losses arising from the Visa Litigation. The indemnification
by the Visa U.S.A. member banks has no specific maximum
amount. Using proceeds from its IPO and through
reductions to the conversion ratio applicable to the Class B
shares held by Visa U.S.A. member banks, Visa Inc. has
funded an escrow account for the benefit of member
financial institutions to fund their indemnification obligations
associated with the Visa Litigation.
In October 2012, Visa signed a settlement agreement to
resolve merchant class action claims associated with the
multidistrict interchange litigation pending in the United
States District Court for the Eastern District of New York (the
“Multi-District Litigation”). The U.S. Court of Appeals for the
Second Circuit reversed the approval of that settlement and
remanded the matter to the district court. Thereafter, the
case was split into two putative class actions, one seeking
damages (the “Damages Action”) and a separate class
action seeking injunctive relief only (the “Injunctive Action”).
The Damages Action was settled and is fully resolved. A
number of merchants opted out of the Damages Action
class settlement and filed individual cases in various
federal district courts. Some of those cases have been
settled and others are still being litigated. In March 2024,
Visa signed a settlement agreement to resolve the
Injunctive Action. In June 2024, the court declined to grant
preliminary approval of the proposed settlement. In
November 2025, the parties notified the court of a new
settlement and submitted for preliminary approval a
Superseding and Amended Class Settlement Agreement,
which provides for lower interchange fees and various other
rule changes for U.S. merchants. The motion for preliminary
approval is pending.
Commitments to Extend Credit Commitments to extend
credit are legally binding and generally have fixed
expiration dates or other termination clauses. The
contractual amount represents the Company’s exposure to
credit loss, in the event of default by the borrower. The
Company manages this credit risk by using the same credit
policies it applies to loans. Collateral is obtained to secure
commitments based on management’s credit assessment
of the borrower. The collateral may include marketable
securities, receivables, inventory, equipment and real
estate. Since the Company expects many of the
commitments to expire without being drawn, total
commitment amounts do not necessarily represent the
Company’s future liquidity requirements. In addition, the
commitments include consumer credit lines that are
cancelable upon notification to the consumer.
The contract or notional amounts of unfunded commitments
to extend credit at December 31, 2025, excluding those
commitments considered derivatives, were as follows:
Term
(Dollars in Millions)
Less Than
One Year
Greater
Than One
Year
Total
Commercial and
commercial real estate
loans
$ 56,151 $155,296 $211,447
Corporate and purchasing
card loans(a)
38,247
—
38,247
Residential mortgages
500
—
500
Retail credit card loans(a)
143,354
—
143,354
Other retail loans
19,810
23,786
43,596
Other
7,565
—
7,565
(a) Primarily cancellable at the Company’s discretion.
Other Commitments As part of the Company’s broker-
dealer operations, the Company has commitments to enter
into reverse repurchase agreements and repurchase
agreements. The amount of unfunded contractual
commitments for reverse repurchase agreements and
repurchase agreements was $8.5 billion and $4.8 billion,
respectively, at December 31, 2025.
Other Guarantees and Contingent
Liabilities
The following table is a summary of other guarantees and
contingent liabilities of the Company at December 31,
2025:
(Dollars in Millions)
Collateral
Held
Carrying
Amount
Maximum
Potential
Future
Payments
Standby letters of credit
$
— $
23 $ 11,021
Securities lending
indemnifications
6,048
—
5,864
Asset sales
—
118
16,284
Merchant processing
860
49 146,148
Other
—
20
2,975
124 U.S. Bancorp 2025 Annual Report
Letters of Credit Standby letters of credit are commitments
the Company issues to guarantee the performance of a
customer to a third party. The guarantees frequently
support public and private borrowing arrangements,
including commercial paper issuances, bond financings
and other similar transactions. The Company also issues
and confirms commercial letters of credit on behalf of
customers to ensure payment or collection in connection
with trade transactions. In the event of a customer’s or
counterparty’s nonperformance, the Company’s credit loss
exposure is similar to that in any extension of credit, up to
the letter’s contractual amount. Management assesses the
borrower’s credit to determine the necessary collateral,
which may include marketable securities, receivables,
inventory, equipment and real estate. Since the conditions
requiring the Company to fund letters of credit may not
occur, the Company expects its liquidity requirements to be
less than the total outstanding commitments. The maximum
potential future payments guaranteed by the Company
under standby letter of credit arrangements at
December 31, 2025, were approximately $11.0 billion with
a weighted-average term of approximately 16 months. The
estimated fair value of standby letters of credit was
approximately $23 million at December 31, 2025.
The contract or notional amount of letters of credit at
December 31, 2025, were as follows:
Term
(Dollars in Millions)
Less Than
One Year
Greater
Than One
Year
Total
Standby
$
6,958 $
4,063 $ 11,021
Commercial
255
30
285
Guarantees Guarantees are contingent commitments
issued by the Company to customers or other third parties.
The Company’s guarantees primarily include third party
performance guarantees inherent in the Company’s
business operations, such as indemnified securities lending
programs and merchant charge-back guarantees and
indemnification or buy-back provisions related to certain
asset sales. For certain guarantees, the Company has
recorded a liability related to the potential obligation, or has
access to collateral to support the guarantee or through the
exercise of other recourse provisions can offset some or all
of the maximum potential future payments made under
these guarantees.
Commitments from Securities Lending The Company
participates in securities lending activities by acting as the
customer’s agent involving the loan of securities. The
Company indemnifies customers for the difference between
the fair value of the securities lent and the fair value of the
collateral received. Cash collateralizes these transactions.
The maximum potential future payments guaranteed by the
Company under these arrangements were approximately
$5.9 billion at December 31, 2025, and represent the fair
value of the securities lent to third parties. At December 31,
2025, the Company held $6.0 billion of cash as collateral
for these arrangements.
Asset Sales The Company has provided guarantees to
certain third parties in connection with the sale or
syndication of certain assets, primarily loan portfolios and
tax-advantaged investments. These guarantees are
generally in the form of asset buy-back or make-whole
provisions that are triggered upon a credit event or a
change in the tax-qualifying status of the related projects,
as applicable, and remain in effect until the loans are
collected or final tax credits are realized, respectively. The
maximum potential future payments guaranteed by the
Company under these arrangements were approximately
$16.3 billion at December 31, 2025, and represented the
proceeds received from the buyer or the guaranteed
portion in these transactions where the buy-back or make-
whole provisions have not yet expired. At December 31,
2025, the Company had reserved $111 million for potential
losses related to the sale or syndication of tax-advantaged
investments.
The maximum potential future payments do not include
loan sales where the Company provides standard
representations and warranties to the buyer against losses
related to loan underwriting documentation defects that
may have existed at the time of sale that generally are
identified after the occurrence of a triggering event such as
delinquency. For these types of loan sales, the maximum
potential future payments is generally the unpaid principal
balance of loans sold measured at the end of the current
reporting period. Actual losses will be significantly less than
the maximum exposure, as only a fraction of loans sold will
have a representation and warranty breach, and any losses
on repurchase would generally be mitigated by any
collateral held against the loans.
The Company regularly sells loans to GSEs as part of its
mortgage banking activities. The Company provides
customary representations and warranties to GSEs in
conjunction with these sales. These representations and
warranties generally require the Company to repurchase
assets if it is subsequently determined that a loan did not
meet specified criteria, such as a documentation deficiency
or rescission of mortgage insurance. If the Company is
unable to cure or refute a repurchase request, the
Company is generally obligated to repurchase the loan or
otherwise reimburse the GSE for losses. At December 31,
2025, the Company had reserved $7 million for potential
losses from representation and warranty obligations,
compared with $9 million at December 31, 2024. The
Company’s reserve reflects management’s best estimate of
losses for representation and warranty obligations. The
Company’s repurchase reserve is modeled at the loan
level, taking into consideration the individual credit quality
and borrower activity that has transpired since origination.
The model applies credit quality and economic risk factors
to derive a probability of default and potential repurchase
that are based on the Company’s historical loss
experience, and estimates loss severity based on expected
collateral value. The Company also considers qualitative
factors that may result in anticipated losses differing from
historical loss trends.
As of December 31, 2025 and 2024, the Company had
$13 million and $15 million, respectively, of unresolved
125
representation and warranty claims from GSEs. The
Company does not have a significant amount of unresolved
claims from investors other than GSEs.
Merchant Processing The Company, through its
subsidiaries, provides merchant processing services.
Under the rules of credit card associations, a merchant
processor retains a contingent liability for credit card
transactions processed. This contingent liability arises in
the event of a billing dispute between the merchant and a
cardholder that is ultimately resolved in the cardholder’s
favor. In this situation, the transaction is “charged-back” to
the merchant and the disputed amount is credited or
otherwise refunded to the cardholder. If the Company is
unable to collect this amount from the merchant, it bears
the loss for the amount of the refund paid to the cardholder.
A cardholder, through its issuing bank, generally has
until the later of up to four months after the date the
transaction is processed or the receipt of the product or
service to present a charge-back to the Company as the
merchant processor. The absolute maximum potential
liability is estimated to be the total volume of credit card
transactions that meet the associations’ requirements to be
valid charge-back transactions at any given time.
Management estimates that the maximum potential
exposure for charge-backs would approximate the total
amount of merchant transactions processed through the
credit card associations for the last four months. For the last
four months of 2025 this amount totaled approximately
$146.1 billion. In most cases, this contingent liability is
unlikely to arise, as most products and services are
delivered when purchased and amounts are refunded
when items are returned to merchants. However, where the
product or service has been purchased but is not provided
until a future date (“future delivery”), the potential for this
contingent liability increases. To mitigate this risk, the
Company may require the merchant to make an escrow
deposit, place maximum volume limitations on future
delivery transactions processed by the merchant at any
point in time, or require various credit enhancements
(including letters of credit and bank guarantees). Also,
merchant processing contracts may include event triggers
to provide the Company more financial and operational
control in the event of financial deterioration of the
merchant.
The Company currently processes card transactions in
the United States, Canada and Europe through wholly-
owned subsidiaries. In the event a merchant was unable to
fulfill product or services subject to future delivery, such as
airline tickets, the Company could become financially liable
for refunding the purchase price of such products or
services purchased through the credit card associations
under the charge-back provisions. Charge-back risk
related to these merchants is evaluated in a manner similar
to credit risk assessments and, as such, merchant
processing contracts contain various provisions to protect
the Company in the event of default. At December 31,
2025, the value of airline tickets purchased to be delivered
at a future date through card transactions processed by the
Company was $15.1 billion. The Company held collateral of
$747 million in escrow deposits, letters of credit and
indemnities from financial institutions, and liens on various
assets related to these airline processing arrangements. In
addition to specific collateral or other credit enhancements,
the Company maintains a liability for its implied guarantees
associated with future delivery. At December 31, 2025, the
liability was $30 million primarily related to these airline
processing arrangements.
In the normal course of business, the Company has
unresolved charge-backs. The Company assesses the
likelihood of its potential liability based on the extent and
nature of unresolved charge-backs and its historical loss
experience. At December 31, 2025, the Company held
$113 million of merchant escrow deposits as collateral and
had a recorded liability for potential losses of $19 million
related to these charge-backs.
Other Guarantees and Commitments As of December 31,
2025, the Company sponsored, and owned 100 percent of
the common equity of, USB Capital IX, a wholly-owned
unconsolidated trust, formed for the purpose of issuing
redeemable Income Trust Securities (“ITS”) to third-party
investors, originally investing the proceeds in junior
subordinated debt securities (“Debentures”) issued by the
Company and entering into stock purchase contracts to
purchase the Company’s preferred stock in the future. As of
December 31, 2025, all of the Debentures issued by the
Company have either matured or been retired. Total assets
of USB Capital IX were $684 million at December 31, 2025,
consisting primarily of the Company’s Series A Preferred
Stock. The Company’s obligations under the transaction
documents, taken together, have the effect of providing a
full and unconditional guarantee by the Company, on a
junior subordinated basis, of the payment obligations of the
trust to third-party investors totaling $683 million at
December 31, 2025.
The Company has also made other financial
performance guarantees and commitments primarily
related to the operations of its subsidiaries. At
December 31, 2025, the maximum potential future
payments guaranteed or committed by the Company under
these arrangements were approximately $2.3 billion.
Litigation and Regulatory Matters
The Company is subject to various litigation and regulatory
matters that arise from the conduct of its business activities.
The Company establishes reserves for such matters when
potential losses become probable and can be reasonably
estimated. The Company believes the ultimate resolution of
existing legal and regulatory matters will not have a material
adverse effect on the financial condition, results of
operations or cash flows of the Company. However, in light
of the uncertainties inherent in these matters, it is possible
that the ultimate resolution of one or more of these matters
may have a material adverse effect on the Company’s
results of operations for a particular period, and future
changes in circumstances or additional information could
result in additional accruals or resolution in excess of
established accruals, which could adversely affect the
Company’s results of operations, potentially materially.
126 U.S. Bancorp 2025 Annual Report
Residential Mortgage-Backed Securities Litigation
Starting in 2011, the Company and other large financial
institutions have been sued in their capacity as trustee for
residential mortgage–backed securities trusts for losses
arising out of the 2008 financial crisis. In the lawsuits
brought against the Company, the investors allege that the
Company’s banking subsidiary, USBNA, as trustee caused
them to incur substantial losses by failing to enforce loan
repurchase obligations and failing to abide by appropriate
standards of care after events of default allegedly
occurred. The plaintiffs in these matters seek monetary
damages generally in unspecified amounts and most also
seek equitable relief.
Regulatory Matters The Company is continually subject to
examinations, inquiries, investigations and other forms of
regulatory and governmental inquiry or scrutiny covering a
wide range of issues in its financial services businesses
including in areas of heightened regulatory scrutiny, such
as compliance, risk management, third-party risk
management and consumer protection. In some cases,
these matters are part of reviews of specified activities at
multiple industry participants; in others, they are directed at
the Company individually. The Company is cooperating
fully with all pending examinations, inquiries and
investigations, any of which could lead to administrative or
legal proceedings or settlements. Remedies in these
proceedings or settlements may include fines, penalties,
restitution or alterations in the Company’s business
practices (which may increase the Company’s operating
expenses and decrease its revenue).
Outlook Due to their complex nature, it can be years
before litigation and regulatory matters are resolved. The
Company may be unable to develop an estimate or range
of loss where matters are in early stages, there are
significant factual or legal issues to be resolved, damages
are unspecified or uncertain, or there is uncertainty as to a
litigation class being certified or the outcome of pending
motions, appeals or proceedings. For those litigation and
regulatory matters where the Company has information to
develop an estimate or range of loss, the Company
believes the upper end of the range of reasonably possible
losses in aggregate, in excess of any reserves established
for matters where a loss is considered probable, will not be
material to its financial condition, results of operations or
cash flows. The Company’s estimates are subject to
significant judgment and uncertainties, and the matters
underlying the estimates will change from time to time.
Actual results may vary significantly from the current
estimates.
NOTE 23 Business Segments
The Company's management reporting is organized into
three reportable operating segments aligned by major lines
of business based on the products and services provided
to customers through its distribution channels. All other
business activities not included in the reportable operating
segments are included in the Treasury and Corporate
Support business segment. The chief operating decision
maker uses net interest income on a taxable-equivalent
basis, noninterest income and net income (loss) before
income taxes for all reportable segments in deciding how to
allocate resources during the annual budget and monthly
forecasting process. The chief operating decision maker
considers variances in reported results to forecasts and
variances to prior periods to assess performance. The
Company’s chief operating decision maker is the Chief
Executive Officer. The Company has the following
reportable operating and other business segments:
Wealth, Corporate, Commercial and Institutional
Banking Wealth, Corporate, Commercial and Institutional
Banking provides core banking, specialized lending,
transaction and payment processing, capital markets, asset
management, and brokerage and investment related
services to wealth, middle market, large corporate,
commercial real estate, government and institutional
clients.
Consumer and Business Banking Consumer and
Business Banking comprises consumer banking, small
business banking and consumer lending. Products and
services are delivered through banking offices, telephone
servicing and sales, online services, direct mail, ATMs,
mobile devices, distributed mortgage loan officers, and
intermediary relationships including auto dealerships,
mortgage banks, and strategic business partners.
Payment Services Payment Services includes consumer
and business credit cards, stored-value cards, debit cards,
corporate, government and purchasing card services and
merchant processing.
Treasury and Corporate Support Treasury and Corporate
Support includes the Company’s investment portfolios,
funding, capital management, interest rate risk
management, income taxes not allocated to business
segments, including most investments in tax-advantaged
projects, and the residual aggregate of those expenses
associated with corporate activities that are managed on a
consolidated basis.
Basis of Presentation Business segment results are
derived from the Company’s business unit profitability
reporting systems by specifically attributing managed
balance sheet assets, deposits and other liabilities and
their related income or expense. The allowance for credit
losses and related provision expense are allocated to the
business segments according to the volume and credit
quality of the loan balances managed, but with the impact
of changes in economic forecasts recorded in Treasury and
Corporate Support. Goodwill and other intangible assets
are assigned to the business segments based on the mix of
business of an entity acquired by the Company. Within the
Company, capital levels are evaluated and managed
centrally; however, capital is allocated to the business
segments to support evaluation of business performance.
127
Business segments are allocated capital on a risk-adjusted
basis considering economic and regulatory capital
requirements. Generally, the determination of the amount of
capital allocated to each business segment includes credit
allocations following a Basel III regulatory framework.
Interest income and expense is determined based on the
assets and liabilities managed by the business segment.
Because funding and asset/liability management is a
central function, funds transfer-pricing methodologies are
utilized to allocate a cost of funds used or credit for funds
provided to all business segment assets and liabilities,
respectively, using a matched funding concept. Also, each
business unit is allocated the taxable-equivalent benefit of
tax-exempt products. The residual effect on net interest
income of asset/liability management activities is included
in Treasury and Corporate Support. Noninterest income
and expenses directly managed by each business
segment, including fees, service charges, salaries and
benefits, and other direct revenues and costs, are
accounted for within each segment’s financial results in a
manner similar to the consolidated financial statements.
Occupancy costs are allocated based on utilization of
facilities by the business segments. Generally, operating
losses are charged to the business segment when the loss
event is realized in a manner similar to a loan charge-off.
Noninterest expenses incurred by centrally managed
operations or business segments that directly support
another business segment’s operations are charged to the
applicable business segment based on its utilization of
those services, primarily measured by the volume of
customer activities, number of employees or other relevant
factors. These allocated expenses are reported as net
shared services expense within noninterest expense.
Certain activities that do not directly support the operations
of the business segments or for which the business
segments are not considered financially accountable in
evaluating their performance are not charged to the
business segments. The income or expenses associated
with these corporate activities, including merger and
integration charges, are reported within the Treasury and
Corporate Support business segment. Income taxes are
assessed to each business segment at a standard tax rate
with the residual tax expense or benefit to arrive at the
consolidated effective tax rate included in Treasury and
Corporate Support.
Designations, assignments and allocations change from
time to time as management systems are enhanced,
methods of evaluating performance or product lines
change or business segments are realigned to better
respond to the Company’s diverse customer base. During
2025, 2024, and 2023, certain organization and
methodology changes were made, including revising the
Company’s business segment funds transfer-pricing
methodology related to deposits and loans during the
second quarter of 2024. Prior period results were recast
and presented on a comparable basis.
128 U.S. Bancorp 2025 Annual Report
Condensed income statement results by business segment for the years ended December 31 were as follows:
Wealth, Corporate, Commercial and
Institutional Banking
Consumer and Business Banking
Payment Services
(Dollars in Millions)
2025
2024
2023
2025
2024
2023
2025
2024
2023
Net interest income (taxable-equivalent
basis)(a)
$ 7,214 $ 7,613 $ 7,812 $ 7,248 $ 7,625 $ 8,658 $ 3,048 $ 2,831 $ 2,609
Noninterest income(b)(c)
4,869
4,538
4,145
1,625
1,606
1,637
4,359
4,195
4,056
Total net revenue
12,083 12,151 11,957
8,873
9,231 10,295
7,407
7,026
6,665
Compensation and employee benefits
2,121
2,127
2,082
2,109
2,212
2,303
891
856
832
Other intangibles
184
206
229
236
266
291
78
97
115
Net shared services
2,094
2,147
2,170
2,750
2,768
2,957
2,145
2,094
2,007
Other direct expenses(d)
969
937
1,022
1,242
1,286
1,332
1,012
915
915
Total noninterest expense
5,368
5,417
5,503
6,337
6,532
6,883
4,126
3,962
3,869
Income (loss) before provision and
income taxes
6,715
6,734
6,454
2,536
2,699
3,412
3,281
3,064
2,796
Provision for credit losses
546
385
340
238
182
78
1,570
1,614
1,394
Income (loss) before income taxes
6,169
6,349
6,114
2,298
2,517
3,334
1,711
1,450
1,402
Income taxes and taxable-equivalent
adjustment
1,543
1,588
1,529
575
630
834
429
363
351
Net income (loss)
4,626
4,761
4,585
1,723
1,887
2,500
1,282
1,087
1,051
Net (income) loss attributable to
noncontrolling interests
—
—
—
—
—
—
—
—
—
Net income (loss) attributable to U.S.
Bancorp
$ 4,626 $ 4,761 $ 4,585 $ 1,723 $ 1,887 $ 2,500 $ 1,282 $ 1,087 $ 1,051
Treasury and Corporate Support
Consolidated Company
(Dollars in Millions)
2025
2024
2023
2025
2024
2023
Net interest income (taxable-equivalent
basis)(a)
$
(745) $ (1,660) $ (1,552) $ 16,765 $ 16,409 $ 17,527
Noninterest income(b)(c)
1,038
707
779 11,891 11,046 10,617
Total net revenue
293
(953)
(773)
28,656 27,455 28,144
Compensation and employee benefits
5,206
5,359
5,199 10,327 10,554 10,416
Other intangibles
—
—
1
498
569
636
Net shared services
(6,989)
(7,009)
(7,134)
—
—
—
Other direct expenses(d)
2,789
2,927
4,552
6,012
6,065
7,821
Total noninterest expense
1,006
1,277
2,618 16,837 17,188 18,873
Income (loss) before provision and
income taxes
(713)
(2,230)
(3,391)
11,819 10,267
9,271
Provision for credit losses
(168)
57
463
2,186
2,238
2,275
Income (loss) before income taxes
(545)
(2,287)
(3,854)
9,633
8,029
6,996
Income taxes and taxable-equivalent
adjustment
(510)
(881)
(1,176)
2,037
1,700
1,538
Net income (loss)
(35)
(1,406)
(2,678)
7,596
6,329
5,458
Net (income) loss attributable to
noncontrolling interests
(26)
(30)
(29)
(26)
(30)
(29)
Net income (loss) attributable to U.S.
Bancorp
$
(61) $ (1,436) $ (2,707) $ 7,570 $ 6,299 $ 5,429
(a) Total net interest income includes a taxable-equivalent adjustment of $116 million, $120 million and $131 million for 2025, 2024 and 2023, respectively. See Non-GAAP Financial
Measures beginning on page 54.
(b) Payment services noninterest income presented net of related rewards and rebate costs and certain partner payments of $3.1 billion, $3.1 billion and $3.0 billion for 2025, 2024 and
2023, respectively.
(c) Total noninterest income includes revenue generated from certain contracts with customers of $9.7 billion, $9.2 billion and $8.8 billion for 2025, 2024 and 2023, respectively.
(d) Other direct expenses for each reportable segment includes: net occupancy and equipment, professional services, marketing and business development, technology and
communications, and other.
129
Average balances by business segment for the years ended December 31 were as follows:
Wealth, Corporate, Commercial and
Institutional Banking
Consumer and Business Banking
Payment Services
(Dollars in Millions)
2025
2024
2023
2025
2024
2023
2025
2024
2023
Loans
$183,254 $172,517 $175,870 $148,543 $155,039 $162,017 $ 42,689 $ 41,080 $ 38,470
Goodwill
4,826
4,825
4,682
4,326
4,326
4,465
3,444
3,357
3,328
Other intangible assets
794
981
1,007
4,222
4,539
5,264
254
277
351
Assets
213,156 201,415 202,735 162,080 168,862 179,252
48,007
47,166
44,289
Noninterest-bearing deposits
55,920
56,814
71,012
19,461
20,770
30,882
2,524
2,685
2,981
Interest-bearing deposits
216,953 216,083 203,995 201,223 199,155 184,758
95
95
102
Total deposits
272,873 272,897 275,007 220,684 219,925 215,640
2,619
2,780
3,083
Total U.S. Bancorp shareholders’
equity
22,018
21,440
22,367
13,478
14,424
16,026
10,310
10,005
9,310
Treasury and Corporate Support
Consolidated Company
(Dollars in Millions)
2025
2024
2023
2025
2024
2023
Loans
$
5,774 $
5,239 $
4,918 $380,260 $373,875 $381,275
Goodwill
—
—
—
12,596
12,508
12,475
Other intangible assets
7
9
17
5,277
5,806
6,639
Assets
253,297 246,571 237,164 676,540 664,014 663,440
Noninterest-bearing deposits
2,603
2,738
2,893
80,508
83,007 107,768
Interest-bearing deposits
10,339
11,175
9,040 428,610 426,508 397,895
Total deposits
12,942
13,913
11,933 509,118 509,515 505,663
Total U.S. Bancorp shareholders’
equity
16,145
11,337
5,957
61,951
57,206
53,660
130 U.S. Bancorp 2025 Annual Report
NOTE 24 U.S. Bancorp (Parent Company)
Condensed Balance Sheet
At December 31 (Dollars in Millions)
2025
2024
Assets
Due from banks, principally interest-bearing
$
9,875 $
9,377
Available-for-sale investment securities
663
649
Investments in bank subsidiary
68,101
63,680
Investments in nonbank subsidiaries
4,192
4,031
Advances to bank subsidiary
19,600
16,100
Advances to nonbank subsidiaries
295
401
Other assets
967
945
Total assets
$103,693 $ 95,183
Liabilities and Shareholders’ Equity
Long-term debt
$ 37,057 $ 35,257
Other liabilities
1,443
1,348
Shareholders’ equity
65,193
58,578
Total liabilities and shareholders’ equity
$103,693 $ 95,183
Condensed Income Statement
Year Ended December 31 (Dollars in Millions)
2025
2024
2023
Income
Dividends from bank subsidiary
$
6,250 $
4,800 $
4,869
Dividends from nonbank subsidiaries
10
11
11
Interest from subsidiaries
1,340
1,224
606
Other income
7
24
51
Total income
7,607
6,059
5,537
Expense
Interest expense
1,774
1,663
1,336
Other expense
179
178
137
Total expense
1,953
1,841
1,473
Income before income taxes and equity in undistributed income of subsidiaries
5,654
4,218
4,064
Applicable income taxes
(106)
(95)
(170)
Income of parent company
5,760
4,313
4,234
Equity in undistributed income of subsidiaries
1,810
1,986
1,195
Net income attributable to U.S. Bancorp
$
7,570 $
6,299 $
5,429
131
Condensed Statement of Cash Flows
Year Ended December 31 (Dollars in Millions)
2025
2024
2023
Operating Activities
Net income attributable to U.S. Bancorp
$
7,570 $
6,299 $
5,429
Adjustments to reconcile net income to net cash provided by operating activities
Equity in undistributed income of subsidiaries
(1,810)
(1,986)
(1,195)
Other, net
853
385
83
Net cash provided by operating activities
6,613
4,698
4,317
Investing Activities
Proceeds from sales and maturities of investment securities
19
11
25
Net (increase) decrease in short-term advances to subsidiaries
106
(242)
(9)
Long-term advances to subsidiaries
(6,500)
(5,500)
(7,500)
Principal collected on long-term advances to subsidiaries
3,000
1,500
4,500
Other, net
(12)
16
172
Net cash used in investing activities
(3,387)
(4,215)
(2,812)
Financing Activities
Proceeds from issuance of long-term debt
4,968
6,516
8,150
Principal payments or redemption of long-term debt
(3,750)
(5,618)
(936)
Proceeds from issuance of common stock
45
32
951
Repurchase of common stock
(489)
(173)
(62)
Cash dividends paid on preferred stock
(334)
(356)
(341)
Cash dividends paid on common stock
(3,168)
(3,092)
(2,970)
Net cash provided by (used in) financing activities
(2,728)
(2,691)
4,792
Change in cash and due from banks
498
(2,208)
6,297
Cash and due from banks at beginning of year
9,377
11,585
5,288
Cash and due from banks at end of year
$
9,875 $
9,377 $ 11,585
Transfer of funds (dividends, loans or advances) to the
Company from its bank subsidiary is restricted. Federal law
requires loans to the Company or its affiliates to be secured
and generally limits loans to the Company or an individual
affiliate to 10 percent of the bank’s unimpaired capital and
surplus. In the aggregate, loans to the Company and all
affiliates cannot exceed 20 percent of the bank’s
unimpaired capital and surplus.
Dividend payments to the Company by its bank
subsidiary are subject to regulatory review and statutory
limitations and, in some instances, regulatory approval. In
general, dividends by the Company’s bank subsidiary to
the parent company are limited by rules which compare
dividends to net income for regulatorily-defined periods.
Furthermore, dividends are restricted by minimum capital
constraints for all national banks.
NOTE 25 Subsequent Events
In January 2026, the Company announced that it entered
into a definitive agreement to acquire BTIG for a purchase
price of up to $1 billion, consisting of a targeted amount of
$725 million ($362.5 million of cash and 6,600,594 shares
of the Company’s common stock) to be paid at closing and
up to an additional $275 million of cash consideration
payable over three years, subject to achievement of
defined performance targets. BTIG is a global financial
services firm specializing in institutional trading, investment
banking, research and related brokerage services.
The acquisition is expected to add fee revenues to the
Company’s capital markets business by expanding its
current product offerings and is not expected to have a
material impact to the Company’s consolidated balance
sheet. The transaction is expected to close in the second
quarter of 2026, subject to regulatory approvals and
satisfaction of applicable closing conditions.
132 U.S. Bancorp 2025 Annual Report
U.S. Bancorp
Consolidated Daily Average Balance Sheet and Related Yields and Rates(a) (Unaudited)
2025
2024
2023
Year Ended December 31
(Dollars in Millions)
Average
Balances
Interest
Yields
and Rates
Average
Balances
Interest
Yields
and Rates
Average
Balances
Interest
Yields
and Rates
Assets
Investment securities(b)
$ 172,376 $ 5,474
3.18 % $ 166,634 $ 5,189
3.11 % $ 162,757 $ 4,566
2.81 %
Loans held for sale
2,924
165
5.65
2,539
173
6.82
2,461
147
5.98
Loans(c)
Commercial
144,716
8,366
5.78
133,412
8,717
6.53
134,883
8,662
6.42
Commercial real estate
48,521
2,898
5.97
51,657
3,326
6.44
54,646
3,384
6.19
Residential mortgages
116,144
4,656
4.01
117,026
4,577
3.91
115,922
4,305
3.71
Credit card
30,093
3,941
13.10
28,683
3,815
13.30
26,570
3,429
12.91
Other retail
40,786
2,547
6.24
43,097
2,619
6.08
49,254
2,599
5.28
Total loans
380,260
22,408
5.89
373,875
23,054
6.17
381,275
22,379
5.87
Interest-bearing deposits with banks
43,961
1,867
4.25
51,215
2,744
5.36
49,000
2,581
5.27
Other earning assets(d)
15,839
1,172
7.40
12,378
629
5.08
9,706
471
4.85
Total earning assets(d)
615,360
31,086
5.05
606,641
31,789
5.24
605,199
30,144
4.98
Allowance for loan losses
(7,590)
(7,541)
(7,138)
Unrealized gain (loss) on investment securities
(5,862)
(6,820)
(7,985)
Other assets
74,632
71,734
73,364
Total assets
$ 676,540
$ 664,014
$ 663,440
Liabilities and Shareholders’ Equity
Noninterest-bearing deposits
$ 80,508
$ 83,007
$ 107,768
Interest-bearing deposits
Interest checking
129,915
1,581
1.22
125,365
1,505
1.20
129,341
1,334
1.03
Money market savings
184,892
5,560
3.01
204,509
7,580
3.71
166,272
5,654
3.40
Savings accounts
58,860
1,000
1.70
39,625
165
.42
55,590
90
.16
Time deposits
54,943
2,010
3.66
57,009
2,438
4.28
46,692
1,697
3.63
Total interest-bearing deposits
428,610
10,151
2.37
426,508
11,688
2.74
397,895
8,775
2.21
Short-term borrowings
Federal funds purchased
616
25
4.09
330
16
4.88
435
21
4.72
Securities sold under agreements to repurchase(d)
8,839
826
9.34
6,658
326
4.89
3,103
125
4.04
Commercial paper
4,392
120
2.74
6,718
258
3.85
7,800
268
3.44
Other short-term borrowings(e)
4,498
402
8.93
3,495
509
14.56
22,803
1,563
6.85
Total short-term borrowings(d)
18,345
1,373
7.48
17,201
1,109
6.45
34,141
1,977
5.79
Long-term debt
61,376
2,797
4.56
54,473
2,583
4.74
44,142
1,865
4.22
Total interest-bearing liabilities(d)
508,331
14,321
2.82
498,182
15,380
3.09
476,178
12,617
2.65
Other liabilities
25,292
25,157
25,369
Shareholders’ equity
Preferred equity
6,808
6,808
6,808
Common equity
55,143
50,398
46,852
Total U.S. Bancorp shareholders’ equity
61,951
57,206
53,660
Noncontrolling interests
458
462
465
Total equity
62,409
57,668
54,125
Total liabilities and equity
$ 676,540
$ 664,014
$ 663,440
Net interest income
$ 16,765
$ 16,409
$ 17,527
Gross interest margin
2.23%
2.15%
2.33%
Gross interest margin without taxable-equivalent increments
2.21%
2.13%
2.31%
Percent of Earning Assets
Interest income
5.05%
5.24%
4.98%
Interest expense
2.33
2.54
2.08
Net interest margin
2.72%
2.70%
2.90%
Net interest margin without taxable-equivalent increments
2.70%
2.68%
2.88%
(a) Interest and rates are presented on a fully taxable-equivalent basis based on a federal income tax rate of 21 percent.
(b) 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. Yields include impacts of hedge accounting, including portfolio level basis adjustments.
(c) Interest income and rates on loans include loan fees. Nonaccrual loans are included in average loan balances.
(d) Average balances for the year ended December 31, 2025, reflect the impact of balance sheet netting of certain repurchase/reverse repurchase transactions under enforceable
netting agreements, exclusive of the related interest income and expense. Reflecting the impact of netting the related interest income and expense for these arrangements, the
average yields earned on other earning assets and total earning assets were 4.57% and 4.98%, respectively, and average rates paid on securities sold under agreements to
repurchase, total short-term borrowings and total interest-bearing liabilities were 4.27%, 5.04% and 2.73%, respectively, for the year ended December 31, 2025.
(e) Interest expense and rates includes interest paid on collateral associated with derivative positions.
133
U.S. Bancorp
Supplemental Financial Data (Unaudited)
Earnings Per Common Share Summary
2025
2024
2023
Earnings per common share
$
4.62 $
3.79 $
3.27
Diluted earnings per common share
4.62
3.79
3.27
Dividends declared per common share
2.04
1.98
1.93
Other Statistics (Dollars and Shares in Millions)
Common shares outstanding(a)
1,555
1,560
1,558
Average common shares outstanding and common stock equivalents
Earnings per common share
1,557
1,560
1,543
Diluted earnings per common share
1,558
1,561
1,543
Number of shareholders(b)
26,081
27,517
29,094
Common dividends declared
$ 3,198 $ 3,110 $ 3,000
(a) Defined as total common shares issued less common stock held in treasury at December 31.
(b) Based on number of common stock shareholders of record at December 31.
The common stock of U.S. Bancorp is traded on the New York Stock Exchange, under the ticker symbol “USB.” At January 31,
2026, there were 25,992 holders of record of the Company’s common stock.
Stock Performance Chart
The following chart compares the cumulative total shareholder return on the Company’s common stock during the five years
ended December 31, 2025, with the cumulative total return on the Standard & Poor’s 500 Index and the KBW Bank Index. The
comparison assumes $100 was invested on December 31, 2020, in the Company’s common stock and in each of the foregoing
indices and assumes the reinvestment of all dividends. The comparisons in the graph are based upon historical data and are not
indicative of, nor intended to forecast, future performance of the Company’s common stock.
134 U.S. Bancorp 2025 Annual Report
Company Information
General Business Description U.S. Bancorp is a financial
services holding company headquartered in Minneapolis,
Minnesota, serving millions of local, national and global
customers. U.S. Bancorp is registered as a bank holding
company under the Bank Holding Company Act of 1956
(the “BHC Act”), and has elected to be treated as a
financial holding company under the BHC Act. The
Company provides a full range of financial services,
including lending and depository services, cash
management, capital markets, and trust and investment
management services. It also engages in credit card
services, merchant and ATM processing, mortgage
banking, insurance, brokerage and leasing.
U.S. Bancorp’s banking subsidiary, USBNA, is engaged
in the general banking business, principally in domestic
markets, and holds all of the Company’s consolidated
deposits of $522.2 billion at December 31, 2025. USBNA
provides a wide range of products and services to
individuals, businesses, institutional organizations,
governmental entities and other financial institutions.
Commercial and consumer lending services are principally
offered to customers within the Company’s domestic
markets, to domestic customers with foreign operations and
to large national customers operating in specific industries
targeted by the Company, such as healthcare, utilities, oil
and gas, and state and municipal government. Lending
services include traditional credit products as well as credit
card services, lease financing and import/export trade,
asset-backed lending, agricultural finance and other
products. Depository services include checking accounts,
savings accounts and time certificate contracts. Ancillary
services such as capital markets, treasury management
and receivable lock-box collection are provided to
corporate and governmental entity customers. U.S.
Bancorp’s bank and trust subsidiaries provide a full range
of asset management and fiduciary services for individuals,
estates, foundations, business corporations and charitable
organizations.
Other U.S. Bancorp non-banking subsidiaries offer
investment and insurance products to the Company’s
customers principally within its domestic markets, and fund
administration services to a broad range of mutual and
other funds.
Banking and investment services are provided through a
network of branches and banking offices across the United
States, primarily in the Midwest and West regions, including
2,075 branches across 26 states as of December 31, 2025.
A significant percentage of consumer transactions are
completed using USBNA's digital banking services, both
online and through its digital app. The Company operates a
network of 4,428 ATMs as of December 31, 2025, and
provides 24-hour, seven day a week telephone customer
service. Mortgage banking services are provided through
banking offices and loan production offices throughout the
Company’s domestic markets. Lending products may be
originated through banking offices, indirect
correspondents, brokers or other lending sources. The
Company is also one of the largest providers of corporate
and purchasing card services and corporate trust services
in the United States. The Company’s subsidiaries provide
domestic merchant processing services directly to
merchants, as well as similar merchant services in Canada
and segments of Europe. The Company also provides
corporate trust and fund administration services in Europe.
These foreign operations are not significant to the
Company.
As of December 31, 2025, U.S. Bancorp employed
approximately 70,000 people.
Risk Factors
An investment in the Company involves risk, including the
possibility that the value of the investment could fall
substantially and that dividends or other distributions on the
investment could be reduced or eliminated. Below are
material risk factors that make an investment in the
Company speculative or risky.
Economic and Market Conditions Risk
Deterioration in business and economic conditions
could adversely affect the Company’s business and the
value of the assets it holds The Company’s business
activities and earnings are affected by general business
and economic conditions in the United States and abroad,
including factors such as the level and volatility of short-
term and long-term interest rates, inflation, real estate
prices, unemployment and under-employment levels,
bankruptcies, household income, consumer spending,
fluctuations in both debt and equity capital markets,
liquidity of the global financial markets, the availability and
cost of capital and credit, investor sentiment and
confidence in the financial markets, the strength of the
domestic and global economies in which the Company
operates, and customer deposit behavior, including the
impact of financial innovation. These conditions are subject
to sudden and potentially negative changes. Future
changes in these conditions, whether related to a
pandemic, geopolitical conflict, the threat or occurrence of
a U.S. sovereign default or government shutdown, bank
failures, other disruptions in the financial services industry
or otherwise, could have adverse effects on the Company
and its businesses.
Weak economic conditions have in the past negatively
affected, and may in the future negatively affect, the
Company’s lending business, including new loan
origination activity, existing loan utilization rates,
delinquencies, defaults and the ability of customers to meet
obligations under the loans, which negatively affects the
Company’s results of operations due to the high
percentage of the Company’s assets represented directly
or indirectly by loans and the importance of lending to its
overall business. The value to the Company of other assets
such as investment securities, most of which are debt
securities or other financial instruments supported by loans,
similarly have been, and would be, negatively impacted by
widespread deterioration in credit quality resulting from a
weakening of the economy.
In addition, volatility and uncertainty related to inflation
or a possible recession and their effects may contribute to
or enhance some of the risks described herein. For
135
example, higher inflation, slower growth or a recession has
in the past reduced demand for borrowing from both
corporate and consumer customers and could in the future
reduce demand for the Company’s products, adversely
affect the creditworthiness of its borrowers or result in lower
values for its interest-earning assets and investment
securities. Any future economic deterioration that affects
household or corporate incomes, or that causes or
amplifies concerns regarding recessionary conditions,
could result in reduced demand for credit or fee-based
products and services. Any of these effects could
adversely affect the Company’s financial condition or
results of operations.
Any deterioration in global economic conditions could
damage the domestic economy or negatively affect the
Company’s borrowers or other counterparties that have
direct or indirect exposure to these regions. Such global
disruptions, including disruptions in supply chains or
geopolitical conflict, can undermine investor confidence,
cause a contraction of available credit, or create market
volatility, any of which could have material adverse effects
on the Company’s businesses, results of operations,
financial condition and liquidity, even if the Company’s
direct exposure to the affected region is limited.
Changes in domestic economic, labor, trade,
immigration or tax policies may arise from political
leadership in the United States. Such policy changes could
disrupt economic conditions, cause uncertainty, erode
consumer confidence levels, cause adverse changes in
payment patterns, lead to increases in delinquencies and
default rates in certain industries or regions, or have other
negative market or customer impacts. Any of these
developments could increase the Company’s loan charge-
offs and provision for credit losses.
Changes in interest rates have in the past reduced, and
could in the future reduce, the Company’s net interest
income The Company’s earnings are dependent to a large
degree on net interest income, which is the difference
between interest income from loans and investments and
interest expense on deposits and borrowings. Net interest
income is significantly affected by market rates of interest,
which in turn are affected by prevailing economic
conditions, the fiscal and monetary policies and actions of
the federal government, such as balance sheet actions
taken by the Federal Reserve Board like quantitative
tightening, quantitative easing, or other reserve
management activities or inactivity, and the policies of
various regulatory agencies. Volatility in interest rates can
also result in the flow of funds away from financial
institutions into direct investments. Direct investments, such
as United States government and corporate securities and
other investment vehicles (including mutual funds),
generally pay higher rates of return than financial
institutions pay on deposits. To prevent outflows and
compete for deposits, USBNA historically has increased,
and may in the future increase, deposit rates, which could
decrease net interest income. Customers may also move
noninterest-bearing deposits into interest-bearing accounts,
thus increasing overall deposit costs. If USBNA cannot
prevent outflows or effectively compete for deposits,
USBNA will lose a source of lower-cost funding. Higher
funding costs reduce the Company’s net interest margin
and net interest income.
Historically, when interest rates are increasing, or when
long-term rates are elevated relative to short-term rates, the
Company has earned higher net interest income.
Conversely, when interest rates are decreasing, or when
long-term rates are lower relative to short-term rates, the
Company has earned less net interest income. However,
higher interest rates can also lead to fewer originations of
loans, less liquidity in the financial markets, and higher
funding costs, each of which could adversely affect the
Company’s revenues, liquidity and capital levels. Higher
interest rates could also negatively affect the payment
performance on loans that are scheduled to mature or are
linked to variable interest rates. If borrowers of variable rate
loans are unable to afford higher interest payments, those
borrowers may reduce or stop making payments, causing
the Company to incur losses and increased operational
costs related to servicing a higher volume of delinquent
loans.
The Company’s results may be materially affected by
market fluctuations and significant changes in the value
of financial instruments and other assets The value of
securities, derivatives and other financial instruments that
the Company owns or in which it makes markets can be
materially affected by market fluctuations. Market volatility,
illiquid market conditions and other disruptions in the
financial markets may make it extremely difficult to value
certain financial instruments. Subsequent valuations of
financial instruments in future periods, in light of factors
then prevailing, may result in significant changes in the
value of these instruments. In addition, at the time of any
disposition of these financial instruments, the price that the
Company ultimately realizes will depend on the demand
and liquidity in the market at that time and may be
materially lower than their current fair value. Any of these
factors could cause a decline in the value of financial
instruments that the Company owns or in which it makes
markets, which may have an adverse effect on the
Company’s results of operations.
In addition, losses in the value of the Company’s
investment securities or loan portfolio could affect market
perception of the Company and create volatility in the
Company’s stock price. Losses in the value of the
Company’s investment securities, even if they do not affect
earnings or capital, could also cause some depositors,
particularly those who maintain uninsured and
uncollateralized deposits, to question the stability of
USBNA and to move their deposits away from USBNA.
Such events could negatively affect the Company’s
liquidity, financial condition and results of operations.
In addition, the Company engages in leasing activities
and is subject to the risk that the residual value of the
property under lease will be less than the Company’s
recorded asset value. Adverse changes in the residual
value of leased assets can have a negative impact on the
Company’s financial results. The risk of changes in the
realized value of the leased assets compared to recorded
residual values depends on many factors outside of the
Company’s control, including supply and demand for the
136 U.S. Bancorp 2025 Annual Report
assets, condition of the assets at the end of the lease term,
and other factors.
Changes in United States trade policies, including the
imposition of tariffs and retaliatory tariffs, may
adversely impact the Company’s business, financial
condition and results of operations There have been
significant changes to trade policies and tariffs in the
United States in recent periods, as well as the imposition of
retaliatory tariffs by other countries against the United
States, and there could be additional changes and
uncertainty with respect to these matters in the future. The
Company expects additional changes to trade policy and
tariffs in the future as a result of federal judicial decisions,
including by the U.S. Supreme Court in February 2026,
regarding the power of the executive branch of the federal
government to set tariff policy. Such tariffs, retaliatory tariffs
or other trade restrictions on products and materials that
the Company’s customers import or export have caused,
and in the future could cause, the prices of its customers’
products to increase, which could reduce demand for, or
margins on, such products. These effects have adversely
affected, and in the future could adversely affect, the ability
of the Company’s customers to service debt. Additionally, if
prices of consumer goods increase materially as a result of
tariffs, the ability of individual households to service debt
may be negatively affected. If the Company’s customers
are unable to service their debt, it would adversely affect
the Company’s financial condition and results of operations.
In addition, uncertainty regarding future tariffs and trade
policy changes complicates business planning for the
Company’s customers in certain industries, which may
adversely affect the Company’s financial results if such
customers change their spending and borrowing patterns
in response to such uncertainty.
Operations and Business Risk
A breach in the security of the Company’s information
systems, or the information systems of certain third
parties, or a critical technology failure could disrupt the
Company’s businesses, result in the disclosure of
confidential information, damage its brand and create
significant financial and legal risk The Company
continues to experience a high number of attacks on its
information systems, software, networks and other
technologies. The Company’s security measures may not
be effective against all threats, including new and emerging
threats. Malicious actors continue to develop increasingly
sophisticated methods of attack that could impact the
Company. Cyber attacks can involve sophisticated and
targeted attacks intended to obtain unauthorized access to
confidential information, destroy or ransom data, disable or
degrade service, or sabotage systems, often through the
introduction of software that is included or inserted in an
information system for a harmful purpose (malware).
Additionally, the rapid advancement of artificial intelligence
(“AI”) technologies has enabled malicious actors to
develop more sophisticated and adaptive cyber attack
methods. AI-driven tools can automate large-scale attacks,
identify system vulnerabilities faster, and create highly
convincing social engineering schemes, such as deepfake
impersonations, which may significantly increase the
likelihood of successful attacks and reduce the
effectiveness of traditional security measures. Due to the
increasing sophistication of cyber attacks, the Company
may not become aware of a cyber attack immediately,
which could adversely affect the Company’s ability to stop
or respond to the cyber attack.
Attacks on government institutions, financial institutions,
technology service providers, or other institutions important
to the overall functioning of the financial system could also
adversely affect, directly or indirectly, the Company’s
businesses. The increasing consolidation, interdependence
and complexity of financial entities and technology systems
heighten the risk of operational failure, both for the
Company and on an industry-wide basis, and could result
in a technology failure, successful cyber attack, or other
incident that significantly degrades, deletes or
compromises the systems or data of one or more financial
entities materially affecting the Company, its counterparties
or other market participants.
Third parties that facilitate the Company’s business
activities, including exchanges, clearinghouses, payment
and ATM networks, financial intermediaries and vendors
that provide services or technology solutions for the
Company’s operations, are also sources of operational and
security risks to the Company. For these third parties,
operational or technical failures of their systems,
misconduct or negligence by their employees or cyber
attacks could affect their ability to deliver a product or
service to the Company, which may result in disruption to
the Company’s business or lost or compromised Company
or customer information. Furthermore, a third party may not
reveal an attack or system failure to the Company in a
timely manner, which could compromise the Company’s
ability to respond effectively. Some of these third parties
may engage vendors of their own, which introduces the risk
that the third party’s vendors and subcontractors could be
the source of operational and security failures. In addition, if
a third party obtains access to the customer account data
on the Company’s systems, and that party experiences a
breach via an external or internal threat or misappropriates
such data, the Company and its customers could suffer
material harm, including heightened risk of fraudulent
transactions, losses from fraudulent transactions, increased
operational costs to remediate the breach, legal harm and
damage to the Company’s brand. These risks are expected
to continue to increase as the Company expands its
interconnectivity with its customers and other third parties.
The Company is also negatively impacted by
cybersecurity incidents at other companies where the
cardholder information of their customers is exposed and
the debit or credit card accounts are held at USBNA, and
those cardholders may experience fraud on their card
accounts because of the breach. The Company has
suffered, and expects to suffer in the future, losses
associated with reimbursing its customers for such
fraudulent transactions and for other costs related to data
security compromise events, such as replacing cards
associated with compromised card accounts. These
attacks are expected to continue and could, individually or
in the aggregate, have a material adverse effect on the
Company’s financial condition or results of operations.
137
The Company may not be able to anticipate or
implement effective preventive measures against cyber
attacks because malicious actor methods and techniques
change frequently, increase in sophistication, often are not
recognized or detected, and originate from a wide variety
of sources, including organized crime, hackers, terrorists,
activists, hostile foreign governments and other external
parties. Those parties may attempt to place their
information technology workers as employees or
contractors of the Company or the Company’s third-party
vendors to attempt to gain access to the Company’s
systems. Those parties may also attempt to fraudulently
induce employees, customers or other users of the
Company’s systems to disclose sensitive information to
gain access to the Company’s data or that of its customers
or clients, such as through “phishing” and other social
engineering schemes. Attack methods may include the
introduction of computer viruses and/or malicious or
destructive code, denial-of-service attacks, and cyber
extortion with accompanying ransom demands. The
Company’s information security risks are increasing as the
Company continues to expand its mobile and internet-
based product offerings and its internal usage of web-
based products, data storage and other applications. In
addition, the Company’s customers often use their own
devices, such as computers, smart phones and tablets, to
make payments and manage their accounts, and are
subject to social engineering schemes, scam websites, and
other attempts from cyber criminals to compromise or deny
access to their accounts. The Company has limited ability
to assure the safety and security of its customers’
transactions with the Company to the extent they are using
their own devices, which are subject to such threats.
If the Company’s physical or cybersecurity systems are
penetrated or circumvented, or an authorized user
intentionally or unintentionally removes, loses or destroys
critical business data, serious negative consequences for
the Company can follow, including significant disruption of
the Company’s operations, misappropriation of confidential
Company or customer information, or damage to the
Company’s, customers’ or counterparties’ computers or
systems. These consequences could result in violations of
privacy and other applicable laws; financial loss to the
Company or to its customers; loss of confidence in the
Company’s security measures; customer dissatisfaction;
significant litigation exposure; regulatory investigations,
fines, penalties or intervention; reimbursement or other
compensatory costs (including the costs of credit
monitoring services); additional compliance costs; and
harm to the Company’s brand, all of which could adversely
affect the Company.
Because the investigation of any cybersecurity incident
is inherently unpredictable and would require substantial
time to complete, the Company may not be able to quickly
remediate the consequences of any incident, which may
increase the costs of, and enhance the negative
consequences associated with, an incident.
The Company relies on its employees, systems and
third parties to conduct its businesses, and certain
failures by systems or misconduct by employees or
third parties could adversely affect its operations The
Company operates in many different businesses in diverse
markets and relies on the ability of its employees and
systems to process a high number of transactions. The
Company’s businesses, financial, accounting, data
processing, and other operating systems and facilities may
stop operating properly or become disabled or damaged
due to many factors, including events that are out of its
control. In addition to the risks posed by cybersecurity
incidents, as discussed above, such systems could be
compromised because of spikes in transaction volume,
electrical or telecommunications outages, critical
technology failures, degradation or loss of internet or
website availability, natural disasters, political or social
unrest, and terrorist acts. The Company continues to
experience adverse affects to its business operations due
to disruptions to the operating systems that support its
businesses and customers caused by the factors noted
above. The Company’s resiliency systems could also
become compromised, which could negatively impact the
ability to back up data.
The Company could also incur losses resulting from the
risk of human error by employees, unauthorized access to
its computer systems, the execution of unauthorized
transactions by employees, errors relating to transaction
processing and technology, breaches of internal control
systems and compliance requirements, failures of business
continuation and disaster recovery processes and systems,
and misconduct or fraud by employees, customers or other
persons outside the Company. The increasing
sophistication in AI technologies may increase the risk of
fraud, such as through identity theft and bypassing
controls, and may make it more difficult to detect fraud.
This risk of loss also includes customer remediation costs;
potential legal actions, fines or civil money penalties that
could arise resulting from an operational deficiency or
noncompliance with applicable regulatory standards,
adverse business decisions or their implementation; and
harm to the Company’s brand and customer attrition due to
negative publicity.
Third parties provide key components of the Company’s
business infrastructure, such as internet connections, cloud
services, network access and mutual fund distribution. Any
problems caused by third-party service providers,
including failing to comply with their contractual obligations,
performing their services negligently causing critical
technology failures, or failure to handle current or higher
volumes of use, could adversely affect the Company’s
ability to deliver products and services to the Company’s
customers and otherwise conduct its business.
Technological or financial difficulties of a third-party service
provider could adversely affect the Company’s businesses
to the extent those difficulties result in the interruption or
discontinuation of services provided by that party.
Replacing third-party service providers could also entail
significant delay and expense.
Operational risks for large financial institutions such as
the Company have generally increased in recent years, in
part because of the proliferation of new technologies, the
ability for employees to work from home, while traveling and
through mobile devices, the use of internet services and
telecommunications technologies to conduct financial
138 U.S. Bancorp 2025 Annual Report
transactions, the increased number and complexity of
transactions being processed, and the increased
sophistication and activities of organized crime, hackers,
terrorists, activists, and other external parties. In the event
of a breakdown in the Company’s internal control systems,
improper operation of systems or improper employee or
third-party actions, the Company could suffer financial loss,
face legal or regulatory action and suffer damage to its
brand.
The Company could face material legal harm and
damage to its brand if it fails to safeguard personal
information The Company is subject to complex and
evolving laws and regulations, both inside and outside the
United States, governing the privacy and protection of
personal information. Individuals whose personal
information may be protected by law include the
Company’s customers and their customers, prospective
customers, job applicants, current and former employees,
employees of the Company’s suppliers, and other
individuals. Complying with laws and regulations applicable
to the Company’s collection, use, transfer, storage, and
destruction of personal information can increase operating
costs, impact the development and marketing of new
products or services, and reduce operational efficiency.
Mishandling or misuse of personal information by the
Company or its suppliers, including data breaches at third
parties exposing personal information, has resulted in
litigation against the Company and could result in
additional litigation or regulatory fines, penalties or other
sanctions in the future.
In the United States, states have enacted consumer
privacy laws that impose compliance obligations with
respect to personal information. In addition, legal
requirements for cross-border personal data transfers vary
across jurisdictions, such as in the European Economic
Area and the United Kingdom, and are evolving rapidly.
Compliance with state or international statutes, common
law, or regulations designed to protect personal information
could require substantial technology infrastructure and
process changes across many of the Company’s
businesses, which could result in substantial costs to the
Company. Non-compliance with such laws and regulations
could lead to substantial regulatory fines and penalties,
regulatory investigation or oversight, damages from
litigation, compelled changes to the Company’s business
practices, and harm to the Company’s brand. Future state
or federal legislation could result in substantial costs to the
Company and could have an adverse effect on its
business, financial condition, and results of operations.
Additional risks could arise from the failure of the
Company or third parties to provide adequate notice to the
Company’s customers about the personal information
collected from them and the use of such information; to
receive, document, and honor the privacy preferences
expressed by the Company’s customers; to protect
personal information from unauthorized disclosure; or to
maintain proper training on privacy practices for all
employees or third parties who have access to personal
information. Concerns regarding the effectiveness of the
Company’s measures to safeguard personal information
and abide by privacy preferences, or even the perception
that those measures are inadequate or that the Company
does not abide by such privacy preferences, could cause
the Company to lose existing or potential customers and
thereby reduce its revenues. In addition, any failure or
perceived failure by the Company to comply with
applicable privacy or data protection laws and regulations
has subjected, and may in the future subject, the Company
to litigation and could result in requirements to modify or
cease certain operations or practices or regulatory fines,
penalties, or other sanctions. Refer to “Supervision and
Regulation” in the Company’s Annual Report on Form 10-K
for additional information regarding data privacy laws and
regulations. Any of these outcomes could materially
damage the Company’s brand and otherwise adversely
affect its businesses.
The Company’s businesses may be adversely affected
if the models it uses perform poorly, provide inadequate
information, or are used improperly The Company relies
on many models to measure risks, estimate values of
financial instruments, and inform certain business
decisions. Models may be used in processes such as
assessing loan credit quality, measuring interest rate and
other market risks, estimating potential revenue or losses,
assessing capital adequacy and conducting capital stress
testing, supporting detection of financial crimes, fraud, and
cybersecurity and other threats, evaluating the allowance
for credit losses and estimating the value of financial
instruments and balance sheet items. The Company also
uses several models that employ methodologies based on
AI or machine learning, which bring unique complexities,
such as the need for large datasets for training, the
potential for algorithmic bias, and the need for greater
explainability in interpreting model decisions. These
complexities may cause the models to be less accurate or
less reliable if any of the required inputs are flawed or
incorporate unreliable data.
Models can be useful tools to assist in processes but
are inherently limited due to historical experience, potential
design flaws, and reliance on assumptions. There is no
assurance that the Company’s models will appropriately or
sufficiently capture all relevant risks or accurately predict
future events or exposures. The historical data the
Company uses to train its models may not be comparable
for the future period being modeled. If the models have
fundamental design flaws, invalid assumptions, or
erroneous data, if the models are implemented incorrectly,
or if the models are used in a manner inconsistent with their
purposes, then business decisions informed by the models
could be adversely affected, and the information provided
by the Company to the public or to its regulators could be
inaccurate or misleading.
Certain decisions that the Company’s regulators make,
including those related to capital distributions to the
Company’s shareholders, could be adversely affected if
they perceive that the models used to generate the relevant
information are unreliable or inadequate. Flaws in the
Company’s models, or the use of models in a manner
inconsistent with their purposes, can negatively impact the
Company’s customers or the Company’s ability to comply
with applicable laws and regulations. This could negatively
139
affect the Company’s brand or result in fines and penalties
from its regulators.
Failure to properly manage data may adversely affect
the Company’s ability to manage risk and business
needs, and result in errors in its operations, reporting
and decision-making, and non-compliance with legal
requirements The Company relies on accurate, timely and
complete data to effectively operate its systems and
processes. The Company’s data management processes
may not be effective and are subject to vulnerabilities and
failures, including human error, data limitations, process
delays, system failure or failed controls. Failure to
effectively manage data may adversely impact its quality
and reliability and the Company’s ability to manage current
and emerging risks, produce accurate financial,
nonfinancial, regulatory, and operational reporting, detect
or surveil potential misconduct or non-compliance with
legal requirements, and manage its business needs,
strategic decision-making, resolution strategy and
operations. The failure to establish and maintain effective,
efficient and controlled data management could adversely
impact the Company’s development of products and client
relationships and increase operational losses, regulatory
risk and risk to the Company’s brand.
The Company could lose market share and experience
increased costs if it does not effectively develop and
implement new technology The financial services industry
is continually undergoing rapid technological change with
frequent introductions of new technology-driven products
and services, including innovative ways that customers can
make payments, manage their accounts, or manage their
assets such as through the use of mobile payments, digital
wallets, digital assets, digital currencies, and other
emerging technologies. The Company believes its success
depends, in part, upon its ability to address customer
needs by using technology to provide products and
services and create additional efficiencies in the
Company’s operations. When launching a new product or
service or introducing a new platform for the delivery of
products and services, the Company might not identify or
fully appreciate the operational risks arising from those
innovations or might inadvertently fail to implement
adequate controls to mitigate those risks. Developing and
deploying new technology-driven products and services
can also involve costs that the Company may not recover
and divert resources away from other product development
efforts. The Company’s products and services may also
rely on certain hardware, software, or service companies
for which there are few alternatives, and the costs charged
by these vendors may increase significantly year to year.
The Company may not be able to effectively develop and
implement profitable new technology-driven products and
services or be successful in marketing these products and
services to its customers. Failure to successfully keep pace
with technological change affecting the financial services
industry, including because competitors may spend more
resources on developing new technologies or because
non-bank competitors have a lower cost structure and more
flexibility, could harm the Company’s competitive position
and negatively affect its revenue and profit.
In July 2025, the President signed into law the “Guiding
and Establishing National Innovation for U.S. Stablecoins
Act” or the “GENIUS Act”, which establishes a regulatory
framework for “payment stablecoins” and their issuers. If
USBNA is unable develop stablecoin technologies to meet
customer demand for deposit alternatives, USBNA could
experience reduced deposit levels. In addition,
technological changes and related changes in the bank
regulatory environment have resulted in fintechs and other
companies engaged in digital asset activities obtaining
national bank trust charters. The number of companies
seeking to obtain such charters may continue to increase,
which could further increase competition for USBNA’s
products and services and exacerbate the risks described
above.
The use of new technologies, including AI and machine
learning, may result in harm to the Company’s brand,
increased regulatory scrutiny and increased liability The
Company uses new and evolving technologies, including AI
and machine learning, throughout the Company’s
businesses. The Company's use of AI and machine
learning is subject to risks that algorithms and datasets are
flawed or insufficient or contain biased information. In
addition, the models and processes relating to AI and
machine learning are not always transparent, which could
increase the risk of unintended deficiencies. These flaws
could result in inaccurate or ineffective decisions,
predictions or analysis, which could subject the Company
to competitive harm, legal liability, increased regulatory
scrutiny, harm to the Company’s brand or other
consequences, any of which could negatively affect the
Company's financial condition and results of operations.
Furthermore, the legal and regulatory landscape impacting
new technologies such as AI is evolving rapidly, and the
inability to predict how this regulation will take shape and
the absence of a uniform regulatory framework for AI may
present unforeseen challenges in applying and relying on
existing compliance systems. Complying with existing and
new AI and data usage laws, and inconsistencies in
regulation from jurisdiction to jurisdiction, could increase
expenses and exposure to litigation and regulatory action.
Damage to the Company’s brand could adversely
impact its business and financial results The risk to
current or projected financial condition and resilience
arising from negative public opinion is inherent in the
Company’s business. Negative public opinion about the
financial services industry generally or the Company
specifically could adversely affect the Company’s ability to
retain and attract stakeholders such as customers,
investors, and employees and could expose the Company
to litigation and regulatory action. Negative public opinion
can result from the Company’s actual or alleged conduct in
any number of activities, including lending practices,
cybersecurity incidents, misuse or failure to safeguard
personal information, inability to meet community and other
stakeholder expectations, corporate responsibility and
sustainability practices and failure to deliver against
announced goals and plans, discriminating or harassing
behavior of employees toward other employees or
customers, loan servicing practices (including, as
140 U.S. Bancorp 2025 Annual Report
applicable, collections, repossessions, and mortgage
foreclosures), compensation practices, sales practices,
regulatory compliance, mergers and acquisitions, and
actions taken by government regulators and community
organizations in response to that conduct.
Additionally, the Company’s stakeholders often hold
differing views on how the Company should address
environmental, social and sustainability matters, including
inclusion-related matters, and the Company may not be
able to meet the diverging expectations of different
stakeholder groups, which could result in negative attention
in traditional and social media, resulting in a negative
perception of the Company depending on an individual’s
view. If the Company is unable to design or execute against
business strategies, damage to the Company’s brand
could result, leading to a loss of customers or negative
investor sentiment.
The Company’s business and financial performance
could be adversely affected, directly or indirectly, by
natural disasters, pandemics, terrorist activities, civil
unrest or international hostilities The occurrence of
natural disasters, pandemics, terrorist activities, civil unrest
or international hostilities could impact the Company
directly (for example, by interrupting the Company’s
systems, which could prevent the Company from obtaining
deposits, originating loans and processing and controlling
its flow of business; causing significant damage to the
Company’s facilities; causing shutdowns of branches or
working locations of vendors or other counterparties; or
otherwise preventing the Company from conducting
business in the ordinary course), or indirectly as a result of
their impact on the Company’s borrowers, depositors, other
customers, vendors or other counterparties (for example,
by damaging properties pledged as collateral for the
Company’s loans or impairing the ability of certain
borrowers to repay their loans). The Company has also
suffered, and could in the future suffer, adverse
consequences to the extent that natural disasters,
pandemics, terrorist activities, civil unrest or international
hostilities, including the ongoing war in Ukraine and conflict
in the Middle East, affect the financial markets or the
economy in general or in any particular region. These
occurrences have caused, and may in the future cause,
operational disruptions and increases in delinquencies,
bankruptcies or defaults that could result in the Company
experiencing higher levels of nonperforming assets, net
charge-offs and provisions for credit losses.
The Company’s ability to mitigate the adverse
consequences of these events is in part dependent on the
quality of the Company’s resiliency planning and the
Company’s ability, if any, to anticipate the nature of any
such event that occurs. The adverse effects of these
occurrences also could be amplified to the extent there is a
lack of preparedness on the part of national or regional
emergency responders or on the part of other organizations
and businesses that the Company transacts with.
The Company’s business strategy, operations, financial
performance and customers could be materially
adversely affected by the impacts related to climate
change Risks associated with climate change have
affected, and may continue to affect, the Company and its
customers and communities. The physical risks of climate
change include chronic shifts in the climate, such as
increasing average global temperatures, rising sea levels
and an increase in the frequency and severity of weather
events and natural disasters, including wildfires, floods,
tornadoes and hurricanes. The financial costs related to
natural disasters have increased in recent years and may
continue to do so in the future based on multiple factors.
Such chronic shifts and disasters could disrupt the
Company’s businesses and operations, impact the safety of
the Company’s employees, result in large-scale technology
failures, or disrupt the businesses and operations of the
Company’s customers, vendors or counterparties,
particularly with respect to those located in low-lying areas
and coastlines that are more prone to flooding or areas that
are prone to wildfires and other disasters. Such chronic
shifts and disasters could also adversely affect the
Company’s business strategy and financial performance
by, among other impacts, causing market volatility,
negatively impacting customers’ ability to pay outstanding
loans or fulfill other contractual obligations, damaging or
deteriorating the value of collateral, or reducing availability
or increasing costs of insurance, including insurance that
protects property pledged as collateral for Company loans.
In addition, the physical risks of climate change may affect
certain regions or areas more severely or with greater
frequency than other areas, whether due to particular
vulnerabilities of those areas or otherwise. To the extent the
Company has a concentration of collateral or business
operations in such areas, the Company’s financial results
and business operations may be more severely impacted
by climate change.
Transition risks may arise from changes in consumer
preferences, technologies, public policies, and legal and
regulatory requirements. New laws and regulations could
result in significant costs as the Company implements
compliance, disclosure and other programs. Failure to
comply with any applicable laws or regulations could result
in legal or regulatory sanctions, financial losses and harm
to the Company’s brand. Failure to adequately consider
transition risks in the Company’s operations could lead to a
loss of market share, lower revenues, decreased asset
values and higher credit costs.
These physical risks and transition risks could increase
expenses or otherwise adversely impact the Company’s
business strategy, operations, financial performance and
customers. In particular, new laws, regulations or guidance,
or the attitudes of regulators, shareholders, employees and
customers regarding climate change, may affect the
activities in which the Company engages and the products
that the Company offers. An inability to adjust the
Company’s business to mitigate the effects of physical and
transition risks could result in higher operational costs and
credit losses. In addition, the Company’s stakeholders’
views on climate change are diverse, dynamic, and rapidly
changing, and the Company may not be able to meet the
diverging expectations and priorities of different
stakeholder groups, including regulators in different
jurisdictions. The Company could also experience
increased expenses resulting from strategic planning,
141
litigation and technology and market changes, and harm to
the Company’s brand as a result of negative public
sentiment, regulatory scrutiny and reduced investor and
stakeholder confidence due to the Company’s response to
climate change and the Company’s climate change
strategy.
Risks associated with climate change are continuing to
evolve rapidly, and the Company expects that climate
change-related risks will continue to evolve and increase
over time.
Regulatory and Legal Risk
The Company is subject to extensive and evolving
government regulation and supervision, which can
increase the cost of doing business, restrict the
Company’s operations, limit the Company’s ability to
take strategic actions, and lead to costly enforcement
actions Banking regulations are primarily intended to
protect depositors’ funds, the federal Deposit Insurance
Fund, and the United States financial system as a whole,
and not the Company’s debt holders or shareholders.
These regulations, and the Company’s inability to act in
certain instances without receiving prior regulatory
approval, affect the Company’s lending practices, capital
structure, investment practices, dividend policy, ability to
repurchase common stock, and ability to pursue strategic
acquisitions, among other activities.
The Company expects that its business will remain
subject to extensive regulation and supervision and that the
level of scrutiny and the enforcement environment may
fluctuate over time based on numerous factors, including
bank failures, changes in the United States presidential
administration or one or both houses of Congress and
public sentiment regarding financial institutions (which can
be influenced by scandals and other incidents that involve
participants in the industry). In particular, the current
presidential administration has been implementing a
regulatory reform agenda that is significantly different than
that of the prior administration, impacting the rulemaking,
supervision, examination and enforcement priorities of the
federal banking agencies. Any potential new regulations or
modifications to existing regulations and supervisory
expectations may necessitate changes to the Company’s
existing regulatory compliance and risk management
infrastructure. The Company could also be impacted by
changes in the international capital accords or differences
in the application of those accords due to differences in
national law. In addition, changes in key personnel at the
agencies that regulate the Company, including federal
banking regulators, may result in differing interpretations of
existing rules and guidelines and potentially more stringent
enforcement and more severe penalties than previously
experienced. There may also be increased challenges in
court to agency regulations, whether as a result of changes
in judicial deference to regulatory agencies, questions
regarding the legitimacy of governmental actions or
otherwise, which results in additional regulatory uncertainty.
New or changes to existing federal or state statutes,
regulations or regulatory policies, or their interpretation or
implementation, or regulatory practices, priorities,
requirements or expectations could affect the Company in
substantial and unpredictable ways. Complying with
regulatory changes has negatively impacted, and may in
the future negatively impact, the Company’s revenue, which
could materially affect the Company’s financial condition
and results of operations. For example, regulatory changes
could require changes to the Company’s operations and
increase compliance costs. Regulatory changes may also
limit the types of financial services and products the
Company may offer or reduce their profitability, alter the
investments it makes, impact its targeted capital levels,
affect the manner in which it operates its businesses,
increase the ability of non-banks to offer competing
financial services and products, and increase its litigation
and regulatory costs should it fail to appropriately comply
with new or modified laws and regulatory requirements. For
example, statutes, regulations, settlements or agreements
that limit or prohibit the amount of interchange fees that the
Company may collect, or the types of transactions on which
the Company can collect interchange fees, could materially
reduce the Company’s fee revenue. Failure to comply with
any new law or regulation could result in litigation,
regulatory enforcement actions and harm to the Company’s
brand.
General regulatory practices, such as longer time
frames to obtain regulatory approvals for acquisitions and
other activities (and the resultant impact on businesses the
Company may seek to acquire) and initiatives to reduce
fees on certain products, could affect the Company’s ability
or willingness to make certain acquisitions or introduce new
products or services, necessitate changes to the
Company’s business practices or reduce the Company’s
revenues.
Federal law grants substantial supervisory and
enforcement powers to federal banking regulators and law
enforcement agencies, including, among other things, the
ability to assess significant civil or criminal monetary
penalties, fines, or restitution; to issue cease and desist or
removal orders; and to initiate injunctive actions against
banking organizations and institution-affiliated parties. The
financial services industry continues to face scrutiny from
bank supervisors in the examination process and stringent
enforcement of regulations on both the federal and state
levels, including with respect to mortgage-related
practices, fair lending practices, fees charged by banks,
student lending practices, sales practices and related
incentive compensation programs, other consumer
compliance matters, foreign investment compliance,
compliance with Bank Secrecy Act/anti-money laundering
(“BSA/AML”) requirements, sanctions compliance
requirements as administered by the Office of Foreign
Assets Control, and consumer protection issues. This
regulatory scrutiny, or the results of an investigation or
examination, may lead to additional regulatory
investigations or enforcement actions. Furthermore, a single
event involving a potential violation of law or regulation may
give rise to numerous and overlapping investigations and
proceedings, either by multiple federal and state agencies
and officials in the United States or, in some instances,
regulators and other governmental officials in foreign
jurisdictions. In addition, another financial institution’s
violation of law or regulation relating to a business activity
142 U.S. Bancorp 2025 Annual Report
or practice may increase regulatory scrutiny around the
same or similar activities or practices of the Company.
In particular, non-compliance with sanctions laws or
BSA/AML laws or failure to maintain an adequate BSA/AML
compliance program can have a material impact on a
financial institution, and these risks are evolving. Significant
enforcement actions against banks, broker-dealers and
non-bank financial institutions with respect to sanctions
laws and BSA/AML laws have resulted in substantial
penalties, including significant monetary penalties, such as
the action against the Company and USBNA in 2018, and
these enforcement actions can result in damage to the
Company’s brand. In addition, federal regulators evaluate
the effectiveness of an applicant in combating money
laundering when determining whether to approve a
proposed bank merger, acquisition, restructuring, or other
expansionary activity. Further, the adoption of
cryptocurrency and other new forms of payment has
resulted in increased BSA/AML compliance risks,
particularly with respect to “know-your-customer” and
transaction monitoring requirements, and this risk and
complexity is expected to increase as the use of
stablecoins expands as a result of recent regulatory
changes.
Regulatory settlements or other enforcement actions
against the Company or any of the Company’s subsidiaries
(including USBNA) could cause material financial harm to
the Company and damage the Company’s brand. In
general, the amounts paid by financial institutions in
settlement of proceedings or investigations and the severity
of other terms of regulatory settlements are likely to remain
elevated. In some cases, governmental authorities have
required criminal pleas or other extraordinary terms,
including admissions of wrongdoing and the imposition of
monitors, as part of such settlements, which could have
significant consequences for a financial institution,
including loss of customers, harm to the Company’s brand,
increased exposure to civil litigation, restrictions on the
ability to access the capital markets, and the inability to
operate certain businesses or offer certain products for a
period of time.
Violations of laws and regulations or deemed
deficiencies in risk management practices or consumer
compliance also may be incorporated into the Company’s
confidential supervisory ratings. A downgrade in these
ratings, or other regulatory actions and settlements, could
limit the Company’s ability to conduct expansionary
activities for a period of time and require new or additional
regulatory approvals before engaging in certain business
activities.
Differences in regulation can affect the Company’s
ability to compete effectively The content and application
of laws and regulations applicable to financial institutions
vary according to the size of the institution, the jurisdictions
in which the institution is organized and operates and other
factors. Large institutions, such as the Company, often are
subject to more stringent regulatory requirements and
supervision than smaller institutions. In addition, financial
technology companies and other non-bank competitors
may not be subject to the prudential and consumer
protection regulatory framework that applies to banks, or
may be regulated by a national or state agency that does
not have the same regulatory priorities or supervisory
requirements as the Company’s regulators. These
differences in regulation can impair the Company’s ability
to compete effectively with competitors that are less
regulated and that do not have similar compliance costs or
restrictions on activities.
The Company is subject to stringent requirements
related to capital and liquidity that may limit the
Company’s ability to return earnings to shareholders or
operate or invest in its business United States banking
regulators have adopted stringent capital- and liquidity-
related standards applicable to larger banking
organizations, including the Company. The rules require
banks and bank holding companies to hold more and
higher quality capital as well as sufficient unencumbered
liquid assets to meet certain stress scenarios defined by
regulation. Future changes to the implementation of these
rules, including the stress capital buffer, or additional
capital- and liquidity-related rules, could require the
Company to take further steps to increase its capital,
increase its investment security holdings, divest assets or
operations, or otherwise change aspects of its capital and/
or liquidity measures, including in ways that may be dilutive
to shareholders or could limit the Company’s ability to pay
common stock dividends, repurchase its common stock,
invest in its businesses or provide loans to its customers.
The effects of external events and actions by the Federal
Reserve Board have in the past limited, and may in the
future limit, capital distributions, including suspension of the
Company’s share repurchase program or reduction or
suspension of the Company’s common stock dividend.
Further, any new regulations that would require the
Company to have minimum levels of outstanding long-term
debt may require the Company to change its current
funding mix, including being required to raise additional
long-term debt, which could adversely impact net interest
margin and net interest income.
Refer to “Supervision and Regulation” in the Company’s
Annual Report on Form 10-K for additional information
regarding the Company’s capital and liquidity
requirements.
The Company is subject to significant financial risks
and significant risks to its brand from potential legal
liability and governmental actions The Company faces
significant legal risks in its businesses. The Company is
named as a defendant or is otherwise involved in many
legal proceedings, including class actions and other
litigation, and the volume of claims and amount of damages
and penalties claimed in litigation and governmental
proceedings against it are substantial. Customers, clients
and other counterparties make claims for substantial or
indeterminate amounts of damages, while banking
regulators and certain other governmental authorities have
focused on enforcement. As a participant in the financial
services industry, it is likely that the Company will continue
to experience a high level of litigation and government
scrutiny related to its businesses and operations in the
future. Substantial legal liability or significant governmental
action against the Company could materially impact the
143
Company’s financial condition and results of operations
(including because such matters may be resolved for
amounts that exceed established accruals for a particular
period) or cause significant harm to the Company’s brand.
For example, the Company has been, and in the future
may be, subject to claims, disputes and litigation regarding
patent infringement or that its use of certain intellectual
property infringes on rights owned by others. The Company
may incur substantial costs in defending such claims,
regardless of their merit. If such claims are successful, the
Company could be required to pay substantial damages
and substantial fees to continue to engage in these
activities in the future and could suffer damage to its brand
and other harm. The Company may also be unable to
acquire rights to use certain intellectual property that is
important for its business and may be unable to effectively
engage in critical business activities.
In addition, lawmakers and regulators at state, federal
and international levels have proposed or adopted
requirements on certain environmental, social and
sustainability matters. These requirements are emerging
and evolving rapidly, and in some cases conflict with the
requirements of other governmental entities. If the
Company fails to comply with evolving, and possibly
conflicting, legal and regulatory requirements, it could harm
the Company’s ability to continue to conduct business in
one or more of the jurisdictions in which the Company
currently operates, or could otherwise harm the Company’s
business.
The Company may be required to repurchase mortgage
loans or indemnify mortgage loan purchasers as a
result of breaches in contractual representations and
warranties When the Company sells mortgage loans that it
has originated to various parties, including GSEs, it is
required to make customary representations and warranties
to the purchaser about the mortgage loans and the manner
in which they were originated. The Company may be
required to repurchase mortgage loans or be subject to
indemnification claims in the event of a breach of
contractual representations or warranties that is not
remedied within a certain period. Contracts for residential
mortgage loan sales to GSEs include various types of
specific remedies and penalties that could be applied if the
Company does not adequately respond to repurchase
requests. If economic conditions and the housing market
deteriorate or the loan purchasers increase their claims for
breached representations and warranties, the Company
could have increased repurchase obligations and
increased losses on repurchases, requiring material
increases to its repurchase reserve, which could adversely
impact the Company’s results of operations.
The Company’s failure to satisfy its obligations as
servicer for consumer loan securitizations and
residential mortgage loans owned by other entities, and
other losses the Company could incur as servicer,
could adversely impact the Company’s brand, servicing
costs and results of operations The Company services
both automobile and unsecured consumer installment loans
on behalf of third-party securitization vehicles and also acts
as servicer and master servicer for mortgage loans
included in securitizations and for unsecuritized mortgage
loans owned by investors. As a servicer, the Company’s
obligations include collecting all payments due by the
borrower consistent with accepted servicing practices and
applicable law, which in the case of borrower delinquency
or default may include, as applicable to the loan,
considering alternatives to repossession or foreclosure
upon the collateral securing the loan, such as loan
modifications or short sales. In the Company’s capacity as
a master servicer, obligations include overseeing the
servicing of mortgage loans by the servicer. Generally, the
Company’s servicing obligations are set by contract, for
which the Company receives a contractual fee. However,
with respect to mortgage loans, GSEs can amend their
servicing guidelines, which can increase the scope or costs
of the services required without any corresponding
increase in the Company’s servicing fee. As a servicer, the
Company may also make advances on behalf of investors,
but there is no assurance of recovery on such advances. A
material breach of the Company’s obligations as servicer or
master servicer may result in contract termination if the
breach is not cured within a specified period of time
following notice, which would negatively impact the
Company’s ongoing servicing fee compensation and could
adversely impact the Company’s brand.
In addition, the Company may be required to indemnify
other parties against losses from any failure by the
Company to perform the Company’s servicing obligations
or from certain acts or omissions by the Company. The
Company has received and may continue to receive
indemnification requests related to the Company’s
servicing of loans owned or insured by other parties,
primarily GSEs. In addition, for certain investors and certain
transactions, the Company may be contractually obligated
to repurchase a loan or reimburse the investor for credit
losses incurred on the loan as a remedy for servicing errors
with respect to the loan or as a result of claims made that
the Company did not satisfy its obligations as a servicer or
master servicer. The Company may also experience
increased loss severity on repurchases, which may require
a material increase to the Company’s repurchase reserve.
Any of these impacts could negatively impact the
Company’s results of operations.
Credit and Mortgage Business Risk
Heightened credit risk could require the Company to
increase its provision for credit losses, which could
have a material adverse effect on the Company’s results
of operations and financial condition When the Company
lends money, or enters into commitments to lend money, it
incurs credit risk, or the risk of loss if its borrowers do not
repay their loans. The credit performance of the Company’s
loan portfolios significantly affects its financial results and
condition. If the economic environment worsens, the
Company’s customers may have more difficulty in repaying
their loans or other obligations, which could result in a
higher level of credit losses and higher provisions for credit
losses. Stress on the United States economy or the local
economies in which the Company does business, including
the economic stress caused by high commercial real estate
vacancy rates, geopolitical conflicts, trade policies, tariffs
144 U.S. Bancorp 2025 Annual Report
or other fiscal policies, elevated interest rates and inflation,
has resulted, and in the future may result, in, among other
things, borrowers’ inability to refinance loans at maturity
and unexpected deterioration in the credit quality of the
loan portfolio or in the value of collateral securing those
loans, which has caused, and in the future could cause, the
Company to establish higher provisions for credit losses.
In addition, a portion of the Company’s commercial loan
portfolio includes loans to non-depository financial
institutions (“NDFIs”). NDFIs are comprised of a variety of
financial entity types that provide bank-like credit and
financing services but do not accept deposits and are not
regulated by federal banking agencies. NDFI entities are
supported by financial collateral assets, making
performance potentially more sensitive to broader
macroeconomic conditions. If the economic environment
worsens or if market conditions are volatile, it could
negatively affect the ability of NDFI borrowers to repay their
loans, which could affect the Company’s results of
operations and cause the Company to establish higher
provisions for credit losses.
The Company reserves for credit losses by establishing
an allowance through a charge to earnings to provide for
loan defaults and nonperformance. The allowance for credit
losses is constructed based on an evaluation of the risks
associated with the Company’s loan portfolio, including the
size and composition of the loan portfolio, the portfolio’s
historical loss experience, current and foreseeable
economic conditions, borrower financial condition and
collateral value. These forecasts and estimates require
difficult, subjective, and complex judgments, including
forecasts of economic conditions and how these economic
predictions might impair the ability of the Company’s
borrowers to repay their loans. The Company may not be
able to accurately predict these economic conditions or
some or all of their effects, which may, in turn, negatively
impact the reliability of the process. Increases in the
Company’s allowance for loan losses may not be adequate
to cover actual loan losses, and future provisions for loan
losses could materially and adversely affect its financial
results. In addition, the Company’s ability to assess the
creditworthiness of its customers may be impaired if the
models and approaches it uses to select, manage, and
underwrite its customers become less predictive of future
behaviors.
A concentration of credit and market risk in the
Company’s loan portfolio could increase the potential
for significant losses The Company may have higher
credit risk, or experience higher credit losses, to the extent
its loans are concentrated by loan type, industry segment,
borrower type, or location of the borrower or collateral. For
example, a prolonged period of high vacancy rates in
commercial properties may affect the value of commercial
real estate, including by causing the value of properties
securing commercial real estate loans to be less than the
amounts owed on such loans, which could result in an
increase in the level of defaults in the commercial real
estate loan portfolio and result in higher credit losses to the
Company. The Company’s credit risk and credit losses can
also increase if borrowers who engage in similar activities
are uniquely or disproportionately affected by economic or
market conditions or by regulation. Deterioration in
economic conditions or real estate values in states or
regions where the Company has relatively larger
concentrations of residential or commercial real estate,
such as California, could result in higher credit losses.
Deterioration in real estate or collateral values and
underlying economic conditions in California, including as a
result of wildfires or other natural disasters, could result in
higher credit losses to the Company.
Changes in interest rates can impact the value of the
Company’s mortgage servicing rights and mortgages
held for sale, and can make its mortgage banking
revenue volatile from quarter to quarter, which can
reduce its earnings The Company has a portfolio of MSRs,
which is the right to service a mortgage loan—collect
principal, interest and escrow amounts—for a fee. The
Company’s MSR portfolio had a fair value of $3.2 billion as
of December 31, 2025. The Company initially carries its
MSRs using a fair value measurement of the present value
of the estimated future net servicing income, which
includes assumptions about the likelihood of prepayment
by borrowers. Changes in interest rates can affect
prepayment assumptions and thus fair value. When interest
rates fall, prepayments tend to increase as borrowers
refinance, and the fair value of MSRs can decrease, which
in turn reduces the Company’s earnings. Further, even
when interest rates decrease, economic conditions such as
a weak or deteriorating housing market may cause
mortgage originations to fall or any increase in mortgage
originations may not be enough to offset the decrease in
the MSRs’ value caused by the lower rates.
Decreased purchase volume by GSEs or limits on the
Company’s access to the mortgage secondary market
and GSEs could adversely affect the Company’s
revenue and capacity to fund new loans The Company
sells a portion of the mortgage loans that it originates to
increase revenue through origination fees and ongoing
servicing of such loans and to provide funding capacity for
originating additional loans. A large portion of such
mortgage loan sales are to GSEs, which serve as important
liquidity providers in the mortgage secondary market. GSEs
could limit their purchases of conforming loans due to
capital constraints, other changes in their criteria for
conforming loans or other reasons. This potential reduction
in purchases could limit the Company’s ability to fund new
loans. In addition, if GSEs limit their purchases of
conforming loans, the Company may limit its originations of
mortgage loans that it intends to sell, which could reduce
the Company’s revenue from origination fees of such loans
and the ongoing servicing fees it receives from such loans.
Proposals have been presented to reform the housing
finance market in the U.S., including the role and status of
GSEs in the residential finance market, such as proposals
to privatize GSEs. The extent and timing of any such reform
of the housing finance market and role and status of GSEs
in such market, as well as any effect on the Company’s
business and financial results, are uncertain.
A decline in the soundness, strength or stability of
other financial institutions could adversely affect the
Company’s businesses and results of operations Actual
145
or perceived issues with, or rumors or questions about, one
or more financial institutions, or about the financial services
industry generally, have led to, and may in the future lead
to, among other things: market-wide liquidity problems;
rapid and significant deposit withdrawals at certain
institutions, particularly those with elevated levels of
uninsured deposits; losses or defaults by certain
institutions, up to and including failures of banks and other
financial institutions; significant volatility in the stock of
financial services institutions; and an increase in fear or
skepticism of the safety of banks generally. Failures of
banks have increased USBNA’s deposit insurance
assessments in the past, and the FDIC may require USBNA
to pay higher FDIC assessments than it currently does or
may charge additional special assessments or future
prepayments if, for example, there are financial institution
failures in the future or if there are reforms in deposit
insurance requirements. In addition, customers and others
may seek to make comparisons between failed or failing
banks and USBNA, which, even if unfounded, can spread
quickly through social media or other online channels. Such
comparisons could affect customer confidence in USBNA
and lead to deposit withdrawals or other negative effects,
any of which could materially and negatively affect the
Company’s results of operations and financial condition.
Due to the prevalence of mobile banking, deposits can be
withdrawn at a significantly faster pace than in the past.
Financial services institutions are interrelated as a result
of trading, clearing, counterparty or other relationships. The
Company has exposure to many different counterparties,
and the Company routinely executes, funds and settles
transactions with counterparties in the financial services
industry, including brokers and dealers, commercial banks,
investment banks, mutual and hedge funds, and other
institutional counterparties. As a result, defaults by, or even
rumors or questions about the soundness, strength or
stability of, one or more financial services institutions, or the
financial services industry generally, could lead to losses or
defaults by the Company or by other institutions and impact
the Company’s businesses, including merchant
processing, corporate trust and fund administration
services businesses. Many of these transactions expose
the Company to credit risk in the event of a default by a
counterparty or client. In addition, the Company’s credit risk
may be further increased when the collateral held by the
Company cannot be realized upon or is liquidated at prices
not sufficient to recover the full amount of the financial
instrument exposure due to the Company. Any such losses
could adversely affect the Company’s results of operations.
Liquidity Risk
If the Company does not effectively manage its liquidity,
its business could suffer The Company’s liquidity is
essential for the operation of its businesses. Market or
economic conditions, the threat or occurrence of a U.S.
sovereign default, unforeseen outflows of funds or other
events could negatively affect the Company’s level or cost
of funding, in turn affecting its ongoing ability to
accommodate liability maturities and deposit withdrawals,
meet contractual obligations, and fund asset growth and
new business transactions at a reasonable cost and in a
timely manner. If the Company’s access to stable and low-
cost sources of funding, such as customer deposits, is
reduced, the Company might need to use alternative
funding, which could be more expensive or of limited
availability. Any substantial, unexpected or prolonged
changes in the level or cost of liquidity could materially and
adversely affect the Company’s businesses.
Although governmental support may be available to
provide liquidity during adverse circumstances, such as
through the FDIC invoking the systemic risk exception to
guarantee uninsured deposits, there can be no guarantee
that governmental action will be taken to provide liquidity to
troubled institutions or that such governmental support will
be sufficient to address systemic risks.
Loss of customer deposits could increase the
Company’s funding costs The Company relies on
customer deposits as a low-cost and stable source of
funding. The Company competes for deposits with banks
and other financial services companies, including those
that offer online channels, and as a result, the Company
could lose deposits in the future, clients may shift their
deposits into higher yielding or alternate savings vehicles,
or the Company may need to raise interest rates to avoid
deposit attrition. If the Company’s competitors raise the
interest rates they pay on deposits, or lower the interest
rates they pay on deposits by less than the Company, the
Company’s funding costs may increase, either because the
Company raises the interest rates it pays on deposits to
avoid losing deposits to competitors or because the
Company loses deposits to competitors and must rely on
more expensive sources of funding. Higher funding costs
reduce the Company’s net interest margin and net interest
income. A prolonged period of high or increasing interest
rates may cause the Company to experience an
acceleration of deposit migration, which could adversely
affect the Company’s operations and liquidity.
Checking and savings account balances and other
forms of customer deposits may decrease when customers
perceive alternative investments, such as the stock market,
as providing a better risk/return tradeoff or if customers
choose to hold cryptocurrencies, stablecoins or other
digital assets as an alternative to holding funds in a deposit
account. When customers move money out of bank
deposits and into other investments or digital assets, the
Company may lose a relatively low-cost source of funds,
increasing the Company’s funding costs and reducing the
Company’s net interest income. In addition, mass
withdrawals of deposits could occur due to perceived
concerns regarding the Company’s and USBNA’s capital
positions or perceived concerns regarding the level of
USBNA’s uninsured and uncollateralized deposits. This risk
is exacerbated by technological developments and
changes in banking relationships, such as customers
maintaining accounts at multiple banks, which increase the
ease and speed with which depositors are able to move
their deposits. The potential speed of deposit withdrawals
may be further accelerated due to the way information,
including false information or unfounded rumors, can be
spread quickly through social media and other online
channels. If USBNA were to experience a significant
outflow of deposits, the Company may face increased
146 U.S. Bancorp 2025 Annual Report
funding costs, suffer losses and have a reduced ability to
raise new capital.
As a result of the GENIUS Act as discussed above,
consumers and businesses may view payment stablecoins
as a substitute for traditional bank deposits, which could
result in deposit withdrawals and increased competition
with USBNA’s deposit products. The GENIUS Act requires
the Treasury Department and federal and state regulators
to issue regulations on numerous topics to interpret and
implement the statute. The effect of the GENIUS Act on the
Company and USBNA will depend on the final form of any
regulations and cannot be predicted at this time.
The Company could lose access to sources of liquidity
if it were to experience financial or regulatory issues
The Company has access to sources of liquidity provided
by the Federal Reserve Bank, such as the Federal Reserve
Bank discount window and other liquidity facilities that the
Federal Reserve Board may establish from time to time, as
well as liquidity provided by the FHLB. To access these
sources of liquidity, the Federal Reserve Board or FHLB
may impose conditions that the Company and USBNA are
in sound financial condition (as determined by the Federal
Reserve Board or FHLB) or that the Company and USBNA
maintain minimum supervisory ratings. If the Company or
USBNA were to experience financial or regulatory issues, it
could affect the Company’s or USBNA's ability to access
liquidity facilities, including at times when the Company or
USBNA needs additional liquidity for the operation of its
business. If the Company or USBNA were to lose access
to these liquidity sources, it could have a material adverse
effect on the Company’s operations and financial condition.
The Company relies on dividends from its subsidiaries
for its liquidity needs, and the payment of those
dividends is limited by laws and regulations The
Company is a separate and distinct legal entity from
USBNA and the Company’s non-bank subsidiaries. The
Company receives a significant portion of its cash from
dividends paid by its subsidiaries. These dividends are the
principal source of funds to pay dividends on the
Company’s stock and interest and principal on its debt.
Various federal and state laws and regulations limit the
amount of dividends that USBNA and certain of the
Company’s non-bank subsidiaries may pay to the Company
without regulatory approval. Also, the Company’s right to
participate in a distribution of assets upon a subsidiary’s
liquidation or reorganization is subject to prior claims of the
subsidiary’s creditors, except to the extent that any of the
Company’s claims as a creditor of that subsidiary may be
recognized. Refer to “Supervision and Regulation” in the
Company’s Annual Report on Form 10-K for additional
information regarding limitations on the amount of
dividends USBNA may pay. Any inability of the Company’s
subsidiaries to transfer funds, pay dividends or make
payments to the Company may adversely affect the
Company’s liquidity, ability to pay dividends on stock or
interest and principal on its debt and ability to engage in
share repurchases.
Competitive and Strategic Risk
The financial services industry is highly competitive,
and competitive pressures could intensify and
adversely affect the Company’s financial results The
Company operates in a highly competitive industry that
could become even more competitive as a result of
legislative, regulatory and technological changes, as well
as continued industry consolidation. This consolidation may
produce larger, better-capitalized and more geographically
diverse companies that are capable of offering a wider
array of financial products and services at more
competitive prices. The Company competes with a variety
of financial services, advisory and technology companies.
The adoption and rapid growth of new technologies,
including generative AI, cryptocurrencies, stablecoins,
other digital assets, blockchain and other distributed ledger
technologies, have required, and will continue to require,
the Company to incur substantial expense to adapt its
systems, products and services and could present
operational issues. In addition, technology has lowered
barriers to entry and made it possible for non-banks to offer
products and services, such as loans and payment
services, that traditionally were banking products, and
made it possible for technology companies to compete with
financial institutions in providing electronic, internet-based,
and mobile phone–based financial solutions. Competition
with non-banks, including technology companies, to
provide financial products and services continues to
intensify. In particular, the number of financial technology
companies (“fintechs”) and companies that offer
embedded finance solutions has grown significantly over
recent years, and fintechs offer bank or bank-like products.
For example, a number of fintechs have applied for bank,
non-depository national bank or industrial loan charters,
which, in some cases, have been granted. Under the
current administration, certain U.S. banking regulators have
indicated a desire to process charter applications on an
accelerated timeline, including applications filed by
fintechs. In addition, other fintechs have partnered with
existing banks to allow them to offer deposit products or
payment services to their customers. Many of these
companies have fewer regulatory constraints, and some
have lower cost structures, in part due to lack of physical
structures. In addition, future regulatory developments may
increase the ability of fintechs and other competitors to
compete with traditional banks, including through the use of
cryptocurrency, stablecoins and other digital assets or
alternative payment systems. The Company’s ability to
compete successfully depends on a number of factors,
including, among others, its ability to develop and execute
strategic plans and initiatives; developing, maintaining and
building long-term customer relationships based on quality
service, competitive prices, high ethical standards and
safe, sound assets; the development of a comparable
regulatory framework that addresses the risks of fintech
activities; and industry and general economic trends. A
failure to compete effectively could contribute to downward
price pressure on the Company’s products or services or a
loss of market share, which would adversely impact the
Company’s results of operations.
147
The Company may need to lower prices on existing
products and services and develop and introduce new
products and services to maintain or increase its
market share The Company’s success depends, in part,
on its ability to adapt its products and services to evolving
customer preferences and industry standards. There is
increasing pressure on the Company to provide products
and services at lower prices to compete with competitors.
Lower prices can reduce the Company’s net interest
margin and revenues from its fee-based products and
services. In addition, the adoption of new technologies and
further developments in current technologies require the
Company to make substantial expenditures to modify or
adapt its existing products and services and to develop
new products and services to keep pace with technological
developments. These capital investments in the Company’s
businesses may not produce the expected growth in
earnings anticipated at the time of the expenditure. The
Company might not be successful in developing or
introducing new products and services, adapting to
changing customer preferences and spending and saving
habits (which may be altered significantly and with little
warning), achieving market acceptance of its products and
services, or sufficiently developing and maintaining loyal
customer relationships. These risks may affect the
Company’s ability to maintain or increase its market share
and could reduce its revenue.
The Company may not realize the full value of its
strategic plans and initiatives As the Company develops
its strategic initiatives, it reviews the internal and external
environment to inform any changes required, take
advantage of new opportunities and/or respond to
unexpected challenges. The Company’s initiatives are
impacted by internal factors, rapid pace of change from an
evolving competitive landscape, increased cybersecurity
threats, accelerated digitalization, and emerging
technologies. Execution of these initiatives is also impacted
by the Company’s response to external economic
conditions, global political and economic uncertainty, and
regulatory factors that are beyond its control. The
Company’s future growth and the value of its businesses
will depend, in part, on its ability to effectively implement its
business strategy. If the Company is not able to
successfully execute its business strategy, then the
Company’s competitive position, brand, prospects for
growth, and results of operations may be adversely
affected.
The Company may not be able to complete future
acquisitions it decides to pursue, and completed
acquisitions may not produce revenue enhancements
or cost savings at levels or within timeframes originally
anticipated, may result in unforeseen integration
difficulties, and may dilute existing shareholders’
interests The Company regularly explores opportunities to
acquire financial services businesses or assets and also
considers opportunities to acquire other banks or financial
institutions from time to time, depending on market
conditions and current business strategies and priorities.
Market conditions may change quickly, and the Company
may act opportunistically to acquire a bank or financial
institution based on the opportunity, market conditions and
other factors. The Company cannot predict the number,
size or timing of acquisitions it might pursue.
The Company must generally receive federal regulatory
approval before it can acquire a bank or bank holding
company, and the Company may also be required to obtain
approval from other regulatory authorities before it can
acquire certain other types of regulated entities. The
Company’s ability to pursue or complete an attractive
acquisition could be negatively impacted by regulatory
delay, including as a result of a government shutdown, or
other regulatory issues. The Company cannot be certain
when or if, or on what terms and conditions, any required
regulatory approvals will be granted. For example, the
Company may be required to sell branches as a condition
to receiving regulatory approval for bank acquisitions. If the
Company commits certain regulatory violations, including
those that result in a downgrade in certain of the
Company’s bank regulatory ratings, governmental
authorities could, as a consequence, preclude it from
pursuing future acquisitions for a period of time. In addition,
the Company’s ability to complete future acquisitions may
depend on factors outside its control, including changes in
the presidential administration or in one or both houses of
Congress, changes in regulatory policies or practices and
changes in public sentiment regarding bank mergers.
Acquisition activity by large banking organizations, such as
the Company, continues to draw regulatory and policy
focus, and consideration of and regulatory approval
processes for certain acquisitions could change in the
future. In addition, acquisitions by large banking
organizations such as the Company may receive negative
coverage in the media or negative attention by certain
members of Congress or other policymakers. If the
Company were to receive significant negative publicity in
connection with a proposed acquisition, it could damage
the Company’s brand and impede the Company’s ability to
complete the acquisition.
There can be no assurance that acquisitions the
Company completes (including the pending acquisition of
BTIG) will have the anticipated positive results, including
results related to expected revenue increases, cost
savings, increases in geographic or product presence, and
other projected benefits. The Company may incur
substantial expenses related to acquisitions and integration
of acquired companies. Successful integration of an
acquired company has presented, and may in the future
present, challenges due to differences in systems,
operations, policies, procedures, management teams and
corporate cultures and may be more costly or difficult to
complete than anticipated or have unanticipated adverse
results. Integration efforts could divert management’s
attention and resources, which could adversely affect the
Company’s operations or results. Integration efforts could
result in higher than expected customer loss, deposit
attrition, loss of key employees, issues with systems and
technology, disruption of the Company’s businesses or the
businesses of the acquired company, or otherwise
adversely affect the Company’s ability to maintain
relationships with customers and employees or achieve the
anticipated benefits of the acquisition. Also, the negative
148 U.S. Bancorp 2025 Annual Report
effect of any divestitures required by regulatory authorities
in acquisitions or business combinations may be greater
than expected. Future acquisitions may also expose the
Company to increased legal or regulatory risks. Finally,
future acquisitions could be material to the Company, and it
may issue additional shares of stock to pay for acquisitions,
which would dilute current shareholders’ ownership
interests.
The Company may not close its acquisition of BTIG,
may not realize the benefits of the acquisition and may
be subject to additional risks due to the cross border
nature of the acquisition The completion of the
Company’s acquisition of BTIG is subject to the satisfaction
or waiver of certain applicable closing conditions, and there
can be no assurance these conditions will be satisfied or
waived. In addition, the announcement and pendency of
the acquisition may cause distraction, reduced productivity,
or decreased morale among employees, which could
negatively affect business performance prior to and
following completion of the acquisition, and could result in
the loss of key employees, which could adversely affect the
anticipated benefits of the acquisition.
Following the acquisition of BTIG, the Company will
operate in additional non-U.S. jurisdictions. Operating in
new jurisdictions may subject the Company to unfamiliar
regulatory regimes and enforcement practices, including
heightened scrutiny by local authorities and increased risk
of fines, penalties, or operational restrictions for non-
compliance, any of which could adversely affect the
Company’s results of operations and affect the anticipated
benefits of the acquisition.
Accounting and Tax Risk
The preparation of the Company’s financial statements
depends on management’s selection of accounting
methods and certain assumptions and estimates
that may vary from actual results and materially impact
the Company’s financial condition and results of
operations The Company’s accounting policies and
methods are fundamental to how the Company records and
reports its financial condition and results of operations. The
Company’s management must exercise judgment in
selecting and applying certain of these accounting policies
and methods to comply with generally accepted
accounting principles and reflect management’s judgment
regarding the most appropriate manner to report the
Company’s financial condition and results of operations. In
some cases, management must select the accounting
policy or method to apply from two or more alternatives,
any of which might be reasonable under the
circumstances, yet might result in the Company’s reporting
materially different results than would have been reported
under a different alternative.
Certain accounting policies are critical to presenting the
Company’s financial condition and results of operations.
They require management to make difficult, subjective or
complex judgments about matters that are uncertain.
Materially different amounts could be reported under
different conditions or using different assumptions or
estimates. These critical accounting policies include the
allowance for credit losses, estimations of fair value, the
valuation of MSRs, and income taxes. Because of the
uncertainty of estimates involved in these matters, the
Company may be required to significantly increase the
allowance for credit losses, sustain credit losses that are
significantly higher than the reserve provided, recognize
significant losses on the remeasurement of certain asset
and liability balances, or significantly increase its accrued
taxes liability. For more information, refer to “Critical
Accounting Policies” in this Annual Report. In addition, the
FASB, SEC and other regulatory agencies may issue new
or amend existing accounting and reporting standards or
change existing interpretations of those standards that
could materially affect the Company's financial statements.
The Company’s investments in certain tax-advantaged
projects may not generate returns as anticipated and
may have an adverse impact on the Company’s
financial results The Company invests in certain tax-
advantaged projects promoting affordable housing,
community development and renewable energy resources.
The Company’s investments in these projects are designed
to generate a return primarily through the realization of
federal and state income tax credits, and other tax benefits,
over specified time periods. The Company is subject to the
risk that previously recorded tax credits, which remain
subject to recapture by taxing authorities based on
compliance features required to be met at the project level,
will fail to meet certain government compliance
requirements and will not be able to be realized. The
possible inability to realize these tax credit and other tax
benefits can have a negative impact on the Company’s
financial results. The risk of not being able to realize the tax
credits and other tax benefits depends on many factors
outside of the Company’s control, including changes in the
applicable tax code and the ability of the projects to be
completed.
General Risk Factors
The Company’s framework for managing risks may not
be effective in mitigating risk and loss to the Company
The Company’s risk management framework seeks to
mitigate risk and loss. The Company has established
processes and procedures intended to identify, measure,
monitor, report, and analyze the types of risk to which it is
subject, including liquidity risk, credit risk, market risk,
interest rate risk, compliance risk, strategic risk, and
operational risk related to its employees, systems and
vendors, among others. However, as with any risk
management framework, there are inherent limitations to
the Company’s risk management strategies due to risks,
either currently existing or that develop in the future, that
the Company has not appropriately anticipated or
identified. In addition, the Company relies on quantitative
models to measure certain risks and to estimate certain
financial values, and these models could fail to predict
future events or exposures accurately. The Company must
also develop and maintain a culture of risk management
among its employees, as well as manage risks associated
with third parties, and could fail to do so effectively. If the
Company’s risk management framework proves ineffective,
the Company could incur litigation and negative regulatory
149
consequences and suffer unexpected losses that could
affect its financial condition or results of operations.
The Company’s business could suffer if it fails to attract
and retain skilled employees The Company’s success
depends, in large part, on its ability to attract and retain key
employees. Competition for the best people in most
activities the Company engages in can be intense and
requires the Company to make investments to provide
compensation and benefits at market levels. Rising wages,
as well as inflation, may cause the Company to increase
these investments, which would increase the Company’s
expenses. The employment market has continued to
evolve, influenced by macroeconomic shifts, changes in
social norms and technology advancements. Continued
pressures on competitive compensation, benefits and
flexible work arrangements continue to be focus areas for
the Company.
Employees have also continued to shift their focus to
better work-life balance, improved advancement
opportunities and skill specific development, and many
businesses, including the Company, have had to adapt
quickly to the changing environment. The Company’s ability
to compete successfully for talent has been and may
continue to be affected by its ability to adapt quickly to
such shifts in employee focus, and there is no assurance
that these developments will not cause increased turnover
or impede the Company’s ability to retain and attract high
caliber employees. If the Company is unable to attract and
retain qualified employees, or do so at rates necessary to
maintain its competitive position, or if compensation costs
required to attract and retain employees become more
expensive, the Company’s performance, including its
competitive position, could be materially adversely
affected.
A downgrade in the Company’s credit ratings could
have a material adverse effect on its liquidity, funding
costs and access to capital markets The Company’s
credit ratings, which are subject to credit agencies’
ongoing review of several factors, including factors not
within the Company’s control, are important to the
Company’s liquidity. A reduction in one or more of the
Company’s credit ratings could adversely affect its liquidity,
lead to deposit outflows, increase its funding costs or limit
its access to the capital markets. Further, a downgrade
could decrease the number of investors and counterparties
willing or able, contractually or otherwise, to do business
with or lend to the Company, thereby adversely affecting
the Company’s competitive position. There can be no
assurance that the Company will maintain its current ratings
and outlooks or whether or when any downgrades could
occur.
150 U.S. Bancorp 2025 Annual Report
Managing Committee
Gunjan Kedia
Ms. Kedia, 55, is Chief Executive Officer and President of
U.S. Bancorp and a member of U.S. Bancorp’s Board of
Directors. Ms. Kedia has served as Chief Executive Officer
since April 2025 and has served as President since May
2024. From June 2023 to May 2024, she served as Vice
Chair, Wealth, Corporate, Commercial and Institutional
Banking, of U.S. Bancorp. From December 2016 to June
2023, she served as Vice Chair, Wealth Management and
Investment Services, of U.S. Bancorp. In April 2026, she will
assume the additional role of Chairman of U.S. Bancorp’s
Board of Directors.
Souheil S. Badran
Mr. Badran, 61, is Senior Executive Vice President and
Chief Operations Officer of U.S. Bancorp. Mr. Badran has
served in this position since joining U.S. Bancorp in
December 2022. From January 2019 until November 2022,
he served as Executive Vice President and Chief Operating
Officer at Northwestern Mutual, having also served as Chief
Innovation Officer from January 2019 until September 2019.
Elcio R.T. Barcelos
Mr. Barcelos, 55, is Senior Executive Vice President and
Chief Human Resources Officer of U.S. Bancorp. Mr.
Barcelos has served in this position since joining U.S.
Bancorp in September 2020. Prior to joining U.S. Bancorp,
he served in a leadership role at Federal National Mortgage
Association (Fannie Mae).
James L. Chosy
Mr. Chosy, 62, is Senior Executive Vice President and
General Counsel of U.S. Bancorp. Mr. Chosy has served in
this position since March 2013. He also served as
Corporate Secretary of U.S. Bancorp from June 2022 until
December 2023 and from March 2013 until April 2016.
Gregory G. Cunningham
Mr. Cunningham, 62, is Senior Executive Vice President
and Chief Community Impact and Inclusion Officer of U.S.
Bancorp. Mr. Cunningham has served in this position since
May 2025. From July 2020 until May 2025, he served as
Chief Diversity Officer of U.S. Bancorp. From July 2019 until
July 2020, he served as Senior Vice President and Chief
Diversity Officer of U.S. Bancorp, having served as Vice
President of Customer Engagement of U.S. Bancorp from
October 2015, when he joined U.S. Bancorp, until July
2019.
Venkatachari Dilip
Mr. Dilip, 66, is Senior Executive Vice President and Chief
Information and Technology Officer of U.S. Bancorp. Mr.
Dilip previously was an Executive Vice President from
September 2018 to April 2023 and has served as Chief
Information and Technology Officer since September 2018,
when he joined U.S. Bancorp.
Adam Graves
Mr. Graves, 48, is Senior Executive Vice President and
Head of Enterprise Strategy and Administration of U.S.
Bancorp. Mr. Graves has served in this position since April
2025. From September 2023 until April 2025, he served as
Executive Vice President and Head of Strategy and
Corporate Development of U.S. Bancorp, having also
served as Head of Finance Strategy and Corporate
Development of U.S. Bancorp from February 2018 until
September 2023.
Sekou Kaalund
Mr. Kaalund, 50, is Senior Executive Vice President, Head
of Branch and Small Business Banking of U.S. Bancorp. Mr.
Kaalund previously was Executive Vice President from
December 2022 to January 2025 and has served as Head
of Branch and Small Business Banking since joining U.S.
Bancorp in December 2022. Prior to joining U.S. Bancorp,
he served as the Head of Consumer Banking for the
Northeast Division at JPMorgan Chase from September
2020 to December 2022. He served as Managing Director
and Head of Advancing Black Pathways at JPMorgan
Chase from August 2018 to September 2020 and was a
Managing Director across several areas in the Corporate
Investment Bank at JPMorgan Chase, including U.S. Public
and Corporate Pensions and Global Private Equity and Real
Estate Fund Services, from July 2007 to September 2020.
Courtney Kelso
Ms. Kelso, 48, is Senior Executive Vice President, Head of
Payments: Consumer and Small Business of U.S. Bancorp.
Ms. Kelso has served in this position since joining U.S.
Bancorp in February 2025. Prior to joining U.S. Bancorp,
she served as Executive Vice President and Head of Card
Products, Global Commercial Services at American
Express from February 2021 to February 2024. From
February 2018 to February 2021, she served as Senior Vice
President of US Small Business, Co-Brand and Corporate
Cards, Global Commercial Services at American Express.
151
Felicia La Forgia
Ms. La Forgia, 57, is Senior Executive Vice President, Head
of the Institutional Client Group (ICG) of U.S. Bancorp. Ms.
La Forgia previously was Executive Vice President from
July 2016 to January 2025 and has served as Head of ICG
since June 2024. From June 2020 to June 2024, she served
as Head of Corporate Banking of U.S. Bancorp.
Stephen L. Philipson
Mr. Philipson, 47, is Vice Chair and Head of Wealth,
Corporate, Commercial and Institutional Banking (WCIB).
Mr. Philipson has served as Vice Chair since April 2025 and
Head of WCIB since June 2024. He served as Senior
Executive Vice President from April 2023 through April
2025. From April 2023 to June 2024, he served as Head of
Global Markets and Specialized Finance of U.S. Bancorp.
From October 2017 to April 2023, he served as Head of
Fixed Income and Capital Markets of U.S. Bancorp.
Jodi L. Richard
Ms. Richard, 57, is Vice Chair and Chief Risk Officer of U.S.
Bancorp. Ms. Richard has served in this position since
October 2018. She served as Executive Vice President and
Chief Operational Risk Officer of U.S. Bancorp from
January 2018 until October 2018.
Arijit Roy
Mr. Roy, 49, is Senior Executive Vice President, Head of
Consumer and Business Banking Products of U.S.
Bancorp. Mr. Roy previously was Executive Vice President
from August 2023 to October 2024 and has served as
Head of Consumer and Business Banking Products since
July 2024. Prior to July 2024, he served as Head of
Consumer and Segment Solutions since joining U.S.
Bancorp in July 2022. Prior to joining U.S. Bancorp, he held
various leadership positions at Truist, including Executive
Vice President and Head of Consumer Products from April
2022 to July 2022, Executive Vice President of Deposits,
Small Business Banking, Strategy and Analytics from July
2021 to April 2022, and Senior Vice President of Strategy,
Digital Integration and Transformation from September
2019 to July 2021.
Mark G. Runkel
Mr. Runkel, 49, is Vice Chair and Head of Payments:
Merchant and Institutional. Mr. Runkel has served as Vice
Chair since April 2025 and Head of Payments: Merchant
and Institutional since January 2025. From August 2021 to
January 2025, he served as Senior Executive Vice
President and Chief Transformation Officer of U.S. Bancorp.
From December 2013 to August 2021, he served as Senior
Executive Vice President and Chief Credit Officer of U.S.
Bancorp.
John C. Stern
Mr. Stern, 47, is Vice Chair and Chief Financial Officer of
U.S. Bancorp. Mr. Stern has served as Vice Chair since
April 2025 and Chief Financial Officer since September
2023. He served as Senior Executive Vice President from
April 2023 until April 2025. He also served as Head of
Finance of U.S. Bancorp from May 2023 to August 2023.
He served as Executive Vice President of U.S. Bancorp
from July 2013 through April 2023. From May 2021 until
May 2023, he served as President of the Global Corporate
Trust and Custody business of U.S. Bancorp. Previously, he
served as Treasurer of U.S. Bancorp from July 2013 to May
2021.
Dominic V. Venturo
Mr. Venturo, 59, is Senior Executive Vice President and
Chief Digital Officer of U.S. Bancorp. Mr. Venturo has
served in this position since July 2020. From January 2015
until July 2020, he served as Executive Vice President and
Chief Innovation Officer of U.S. Bancorp.
152 U.S. Bancorp 2025 Annual Report
Directors
Andrew Cecere1,5
Chairman and Retired Chief Executive Officer
U.S. Bancorp
Warner L. Baxter1,2,3
Retired Executive Chairman and Former Chairman,
President and Chief Executive Officer
Ameren Corporation
(Energy)
Dorothy Bridges5,6
Chief Executive Officer
Metropolitan Economic Development Association (Meda)
(Economic Development)
Elizabeth L. Buse3,5
Former Chief Executive Officer
Monitise plc
(Financial services)
Alan B. Colberg2,4
Retired President and Chief Executive Officer
Assurant, Inc.
(Financial services and specialty insurance)
Kimberly N. Ellison-Taylor2,6
Founder and Chief Executive Officer
KET Solutions, LLC
(Technology)
Aleem Gillani2,5
Retired Corporate Executive Vice President and
Chief Financial Officer
SunTrust Banks, Inc.
(Financial services)
Roland A. Hernandez1,3,4
Founding Principal and Chief Executive Officer
Hernandez Media Ventures
(Media)
Gunjan Kedia1
Chief Executive Officer and President
U.S. Bancorp
Richard P. McKenney1,3,4
President and Chief Executive Officer
Unum Group
(Financial protection benefits)
Yusuf I. Mehdi1,5,6
Executive Vice President,
Consumer Chief Marketing Officer
Microsoft Corporation
(Technology)
Loretta E. Reynolds5,6
Founder and Chief Executive Officer
LEReynolds Group, LLC
(Information Technology)
John P. Wiehoff1,4,5
Retired Chairman and Chief Executive Officer
C.H. Robinson Worldwide, Inc.
(Transportation and logistics services)
1. Executive Committee
2. Audit Committee
3. Compensation and Human Resources Committee
4. Governance Committee
5. Risk Management Committee
6. Technology Committee
153
©2026 U.S. Bancorp
Executive offices
U.S. Bancorp
800 Nicollet Mall
Minneapolis, MN 55402
Common stock transfer
agent and registrar
Computershare acts as our transfer agent
and registrar, dividend paying agent and
dividend reinvestment plan administrator
and maintains all shareholder records
for the Company. Inquiries related to
shareholder records, stock transfers,
changes of ownership, lost stock
certificates, changes of address
and dividend payments should be
directed to the transfer agent at:
Computershare
P.O. Box 505000
Louisville, KY 40233
Phone: 888-778-1311 or
201-680-6578 (international calls)
computershare.com/investor
Registered or Certified Mail:
Computershare
462 South 4th Street, Suite 1600
Louisville, KY 40202
Telephone representatives are available
weekdays from 8 a.m. to 6 p.m., Central
Time, and automated support is available
24 hours a day, seven days a week.
Specific information about your account
is available on Computershare’s
Investor Center website.
Independent auditor
Ernst & Young LLP serves as the
independent auditor for U.S. Bancorp.
Common stock
listing and trading
U.S. Bancorp common stock is listed and
traded on the New York Stock Exchange
under the ticker symbol USB.
Dividends and
reinvestment plan
U.S. Bancorp currently pays quarterly
dividends on our common stock on or
about the 15th day of January, April,
July and October, subject to approval
by our Board of Directors. U.S. Bancorp
shareholders can choose to participate
in a plan that provides automatic
reinvestment of dividends and/or
optional cash purchase of additional
shares of U.S. Bancorp common stock.
For more information, please contact
our transfer agent, Computershare.
Investor relations contact
Angie Jeyaraj
Senior Vice President
Deputy Director of Investor Relations
angie.jeyaraj@usbank.com
612-303-4191
Financial information
U.S. Bancorp news and financial results are
available through our website and by mail.
Website: For information about
U.S. Bancorp, including news, financial
results, annual reports and other
documents filed with the Securities
and Exchange Commission, visit
usbank.com and click on About
Us and then Investor Relations.
Mail: At your request, we will mail to you
our quarterly earnings, news releases,
quarterly financial data reported on Form
10-Q, Form 10-K and additional copies
of our annual reports. Please contact:
U.S. Bancorp Investor Relations
800 Nicollet Mall
Minneapolis, MN 55402
investorrelations@usbank.com
Phone: 866-775-9668
Media requests
David R. Palombi
Executive Vice President
Chief Communications Officer
Public Affairs and Communications
david.palombi@usbank.com
Phone: 612-303-3167
Privacy
U.S. Bancorp is committed to
respecting the privacy of our customers
and safeguarding the financial and
personal information provided to us.
To learn more about the U.S. Bancorp
commitment to protecting privacy, visit
usbank.com and click on Privacy.
Accessibility
U.S. Bancorp is committed to providing
ready access to our products and services
so all of our customers, including people
with disabilities, can succeed financially.
To learn more, visit usbank.com and click
on Accessibility.
Ethics
At U.S. Bancorp, our commitment to high
ethical standards guides everything we do.
Demonstrating this commitment through
our words and actions is how each of us
does the right thing every day for our
customers, shareholders, communities and
each other. Our ethical culture has been
recognized by the Ethisphere® Institute,
which named us to its World’s Most Ethical
Companies® list for the 11th time in 2025.
Each year, every employee certifies
compliance with the letter and spirit of our
Code of Ethics and Business Conduct.
For details about our Code of Ethics and
Business Conduct, visit usbank.com/
about-us-bank/ethics and click on
Code of Ethics and Business Conduct.
To learn more, visit
usbank.com/about-us-bank.
Equal opportunity
U.S. Bancorp and our subsidiaries are
committed to providing Equal Employment
Opportunity to all employees and applicants
for employment. In keeping with this
commitment, employment decisions are
made based on abilities, not race, color,
religion, creed, citizenship, national
origin or ancestry, gender, age, disability,
veteran status, sexual orientation, marital
status, gender identity or expression,
genetic information or any other factors
protected by law. The Company complies
with municipal, state and federal fair
employment laws, including regulations
applying to federal contractors.
U.S. Bancorp, including each
of our subsidiaries, is an equal
opportunity employer.
CORPORATE INFORMATION
800 Nicollet Mall
Minneapolis, MN 55402
800-USBANKS (872-2657)
usbank.com
800 Nicollet Mall
Minneapolis, MN 55402
800-USBANKS (872-2657)
usbank.com