US BANCORP \DE\ (USB)

Management’s Discussion and Analysis

Overview

Financial Performance U.S. Bancorp and its subsidiaries (the “Company”) reported net income attributable to U.S. Bancorp of $2.2 billion in the second quarter of 2026, compared with $1.8 billion in the second quarter of 2025. Financial performance for the second quarter of 2026, compared with the second quarter of 2025, included the following:

•Diluted earnings per common share of $1.35 in the second quarter of 2026, representing a 21.6 percent increase compared with the second quarter of 2025;

•Net interest income increased $310 million (7.7 percent) primarily due to loan growth, improved earning asset mix, and benefits from fixed asset repricing;

•Noninterest income increased $401 million (13.7 percent) driven by higher fee revenue across all categories and the contribution from the BTIG acquisition;

•Noninterest expense increased $247 million (5.9 percent), reflecting the impact of the BTIG acquisition, higher compensation and employee benefits expense, higher technology and communications expense, and higher marketing and business development expense;

•Average loans increased $27.0 billion (7.1 percent) driven by higher commercial loans, commercial real estate loans and credit card loans; and

•Average deposits increased $12.2 billion (2.4 percent), driven by an increase in savings account balances, partially offset by a decrease in time deposits.

The Company reported net income attributable to U.S. Bancorp of $4.1 billion in the first six months of 2026, compared with $3.5 billion in the first six months of 2025. Financial performance for the first six months of 2026, compared with the first six months of 2025, included the following:

•Diluted earnings per common share of $2.53 in the first six months of 2026, representing an 18.2 percent increase compared with the first six months of 2025;

•Net interest income increased $481 million (5.9 percent) primarily due to loan growth, improved earning asset mix, and fixed asset repricing;

•Noninterest income increased $562 million (9.8 percent) driven by higher revenue across most categories and the contribution from the BTIG acquisition;

•Noninterest expense increased $280 million (3.3 percent), reflecting the impact of the BTIG acquisition, higher technology and communications expense, higher marketing and business development expense and higher compensation and employee benefits expense;

•Average loans increased $20.8 billion (5.5 percent) driven by higher commercial loans, credit card loans and commercial real estate loans; and

•Average deposits increased $10.4 billion (2.1 percent), driven by an increase in savings account balances, partially offset by a decrease in time deposits.

Credit Quality The Company maintained stable credit quality during the first six months of 2026.

•The allowance for credit losses was $8.0 billion at June 30, 2026, compared to $7.9 billion at December 31, 2025. The ratio of the allowance for credit losses to period-end loans was 1.94 percent at June 30, 2026 compared to 2.03 percent at December 31, 2025.

•The provision for credit losses increased $37 million (7.4 percent) in the second quarter of 2026 and $76 million (7.3 percent) in the first six months of 2026, compared with the same periods of 2025, primarily due to loan growth.

•Nonperforming assets were $1.3 billion at June 30, 2026, a decrease of $244 million (15.3 percent) compared with December 31, 2025, driven by lower nonperforming commercial loans.

•Net charge-offs decreased $18 million in the second quarter of 2026 and $19 million in the first six months of 2026, compared with the same periods of the prior year, reflecting lower commercial real estate and credit card loan net charge-offs, partially offset by higher commercial loan net charge-offs.

•Total loan net charge-offs as a percentage of average loans was 0.53 percent in the second quarter of 2026 and 0.55 percent in the first six months of 2026, compared with 0.59 percent for both the second quarter and first six months of 2025.

Capital Management At June 30, 2026, 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 both June 30, 2026 and December 31, 2025.

•The Company returned $1.0 billion and $2.1 billion of earnings to shareholders in the second quarter of 2026 and the first six months of 2026, respectively, through dividends and share repurchases.

•The increase in shareholders’ equity during the second quarter and first six months of 2026 included the impact of common shares issued as consideration for the acquisition of BTIG.

BTIG acquisition On June 1, 2026, the Company acquired BTIG for a purchase price consisting of approximately $395 million of cash and 6.6 million shares of the Company’s common stock paid on the closing date, with up to an additional $275 million of cash consideration to be paid over the next 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 revenue to the Company’s Wealth, Corporate, Commercial and Institutional Banking business segment by expanding its current product offerings.

Statement of Income Analysis

The Company reported net income attributable to U.S. Bancorp of $2.2 billion for the second quarter of 2026, or $1.35 per diluted common share, compared with $1.8 billion, or $1.11 per diluted common share, for the second quarter of 2025. The Company reported net income attributable to U.S. Bancorp of $4.1 billion for the first six months of 2026, or $2.53 per diluted common share, compared with $3.5 billion, or $2.14 per diluted common share, for the first six months of 2025. The increases were due to higher net interest income and noninterest income, partially offset by higher noninterest expense and higher provision for credit losses.

Net Interest Income Net interest income was $4.4 billion in the second quarter and $8.6 billion in the first six months of 2026, representing increases of $310 million (7.7 percent) and $481 million (5.9 percent), respectively, compared with the same periods of 2025. The increases were primarily due to loan growth, improved earning asset mix, and fixed asset repricing. Average earning assets for the second quarter and the first six months of 2026 were $15.7 billion (2.6 percent) and $14.8 billion (2.4 percent) higher, respectively, than the same periods of 2025, reflecting increases in loans and other earning assets, partially offset by decreases in interest-bearing deposits with banks and investment securities. The net interest margin, on a taxable-equivalent basis, was 2.79 percent in the second quarter of 2026 and 2.78 percent in the first six months of 2026, compared with 2.66 percent and 2.69 percent, respectively, for the same periods of 2025. The increases were primarily due to the combined effects of loan growth, improved earning asset mix and benefits from fixed asset repricing. Refer to the “Consolidated Daily Average Balance Sheet and Related Yields and Rates” tables for further information on net interest income.

Average total loans in the second quarter and the first six months of 2026 were $27.0 billion (7.1 percent) and $20.8 billion (5.5 percent) higher, respectively, than the same periods of 2025. The increases were primarily due to higher commercial loans, commercial real estate loans and credit card loans. The increase in average commercial loans was primarily due to higher corporate loans and loans to financial institutions. The increase in average credit card loans was primarily driven by higher sales volume. Average commercial real estate loans increased due to higher commercial mortgage loan originations.

Average investment securities in the second quarter and the first six months of 2026 were $2.3 billion (1.3 percent) and $1.0 billion (0.6 percent) lower, respectively, than the same periods of 2025, primarily due to net investment securities sales and maturities.

Average total deposits for the second quarter and the first six months of 2026 were $12.2 billion (2.4 percent) and $10.4 billion (2.1 percent) higher, respectively, than the same periods of 2025. Average savings deposits for the second quarter and the first six months of 2026 were $15.5 billion (26.7 percent) and $16.8 billion (30.9 percent) higher, respectively, than the same periods of 2025, primarily due to

an increase in Consumer and Business Banking balances. Average noninterest-bearing deposits for the second quarter and the first six months of 2026 were $1.5 billion (1.9 percent) and $1.2 billion (1.5 percent) higher, respectively, than the same periods of 2025, driven by an increase in Wealth, Corporate, Commercial and Institutional Banking balances, partially offset by a decrease in Consumer and Business Banking balances. Average time deposits for the second quarter and the first six months of 2026 were $10.5 billion (18.4 percent) and $9.7 billion (17.2 percent) lower, respectively, than the same periods of 2025, mainly due to decreases in Treasury and Corporate Support balances, and 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 money market deposits for the second quarter of 2026 were $4.9 billion (2.8 percent) higher than the second quarter of 2025, driven by an increase in Wealth, Corporate, Commercial and Institutional Banking balances, partially offset by a decrease in Consumer and Business Banking balances.

Provision for Credit Losses The provision for credit losses was $538 million in the second quarter and $1.1 billion in the first six months of 2026, representing increases of $37 million (7.4 percent) and $76 million (7.3 percent), respectively, from the same periods of 2025, primarily due to loan growth. Net charge-offs decreased $18 million (3.2 percent) in the second quarter of 2026 and $19 million (1.7 percent) in the first six months of 2026, compared with the same periods of 2025. The decreases were driven by lower commercial real estate loan and credit card loan net charge-offs, partially offset by higher commercial loan net charge-offs. Refer to “Corporate Risk Profile” for further information on the provision for credit losses, net charge-offs, nonperforming assets and other factors considered by the Company in assessing the credit quality of the loan portfolio and establishing the allowance for credit losses.

Noninterest Income Noninterest income was $3.3 billion in the second quarter of 2026 and $6.3 billion in the first six months of 2026, representing increases of $401 million (13.7 percent) and $562 million (9.8 percent), respectively, compared with the same periods of 2025. The increases from the prior year reflected higher fee revenue across most categories. Capital markets revenue increased due to the contribution from BTIG following the acquisition in the second quarter of 2026, along with higher client-related derivative activity, corporate bond underwriting fees and favorable market conditions. Trust and investment management fees increased primarily due to business growth and favorable market conditions. Card revenue and corporate payment and treasury management revenue increased mainly due to higher sales volume. Lending and deposit-related fees increased primarily due to higher loan fees. Merchant processing services revenue increased due to favorable rates.

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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

(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.

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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.

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