USB U.S. Bancorp 10-K 2025-12-31 section summaries

U.S. Bancorp — Business, Regulation and Risk

Business profile and strategic development

U.S. Bancorp is a diversified financial-services holding company. Its businesses include consumer and commercial banking, lending, payments, capital markets, wealth and asset management, mortgage banking, merchant processing, trust and fund administration. U.S. Bank National Association (USBNA) holds all consolidated deposits, totaling $522.2 billion at December 31, 2025. Lending is principally domestic, with targeted exposure to industries including healthcare, utilities, oil and gas, and state and municipal governments; foreign operations are not significant.

At year-end 2025, the company operated 2,075 branches across 26 states and 4,428 ATMs, with branches concentrated primarily in the Midwest and West. A significant percentage of consumer transactions are digital. U.S. Bancorp employed 68,520 people globally and reported more than 1.7 million hours of enterprise training in 2025, including initiatives to train employees on approved AI tools.

In January 2026, U.S. Bancorp agreed to acquire Condor Trading LP, whose subsidiary BTIG, LLC is a global institutional trading, investment banking, research and brokerage firm. The transaction is expected to close in Q2 2026, subject to regulatory approval and other conditions. Targeted closing consideration is $725 million—$362.5 million in cash and 6,600,594 U.S. Bancorp shares—with up to a further $275 million in cash payable over three years based on performance targets. BTIG will expand the company’s regulated securities activities and related compliance and capital requirements. Risks include integration challenges, delayed or unrealized benefits, and higher-than-expected combination costs.

Capital and regulatory constraints

U.S. Bancorp and USBNA are Category III banking organizations. With more than $100 billion in consolidated assets, the company is subject to enhanced prudential standards. It remains under Category III capital and liquidity requirements until average consolidated assets over the most recent four quarters reach $700 billion or average cross-jurisdictional activity reaches $75 billion. A move to Category II could bring more stringent standards, including full rather than 85% liquidity coverage ratio and net stable funding ratio requirements, daily rather than monthly liquidity reporting, and annual rather than biennial company-run stress tests.

At December 31, 2025, U.S. Bancorp exceeded applicable minimum capital, leverage and supplementary leverage requirements. Its stress capital buffer (SCB) declined to 2.6% from 3.1% a year earlier; with the 4.5% CET1 minimum, the current CET1 threshold is 7.1% before any countercyclical buffer, which is currently zero. Other stated minimums include tier 1 capital of 6.0%, total capital of 8.0%, tier 1 leverage of 4.0%, and a Category III supplementary leverage ratio of 3.0%. Falling below effective requirements can constrain dividends, buybacks and certain executive compensation.

FHC powers depend on remaining well-capitalized and well-managed and on USBNA maintaining at least a “satisfactory” Community Reinvestment Act rating; USBNA’s latest examination, covering 2016–2020, was “Outstanding.” Regulatory deficiencies can restrict acquisitions, distributions and activities. U.S. Bancorp must also act as a source of strength to USBNA, potentially providing capital; parent loans to the bank would rank behind deposits and certain other bank debts. USBNA dividends are subject to legal and supervisory restrictions, while parent operating funds typically depend substantially on subsidiary dividends.

Potential rule changes could further affect capital and liquidity. A revised Basel III Endgame proposal is expected after the 2023 proposal to change risk-capital calculations, potentially including unrealized available-for-sale securities gains and losses in regulatory capital. Other proposals address calculating the SCB using two years of stress-test results and long-term debt requirements for large banks. The OCC has proposed raising the asset threshold for heightened standards from $50 billion to $700 billion; final treatment remains uncertain.

Supervisory, compliance and operational risks

Supervisory downgrades or deficient resolution plans could lead to restrictions on growth, capital, liquidity or activities, additional approvals, or divestitures. U.S. Bancorp filed its triennial resolution plan in October 2025; USBNA filed an interim supplement in July 2025 and must submit its next full plan by July 1, 2026. USBNA’s recovery plan was approved in December 2025. In a covered holding-company insolvency, the FDIC could have broad authority to transfer assets and liabilities without creditor approval. In a bank resolution, domestic depositors and administrative claims generally have priority over other unsecured creditors, including publicly issued debt and non-domestic-office depositors.

FDIC assessment rates rose 2 basis points beginning in 2023. U.S. Bancorp recognized $136 million of additional noninterest expense in 2024 for the special assessment tied to 2023 bank failures. In December 2025, the FDIC reduced the eighth collection-quarter rate and said it would not continue collections under the rule, subject to possible offsets or further collections based on receivership losses. USBNA also faces enhanced deposit-recordkeeping and technology requirements.

Material compliance exposures include anti-money-laundering and sanctions requirements, consumer-protection enforcement, privacy and cybersecurity obligations, and restrictions on transactions between the bank and affiliates. A qualifying material cybersecurity incident must be reported to USBNA’s primary federal regulator within 36 hours. Consumer-data rules proposed by the CFPB would require electronic access and transfer interfaces without fees; enforcement is stayed while the CFPB considers revisions. CFPB staffing fell by over 80% in 2025, subject to litigation, while states and state attorneys general may increase enforcement. Digital-asset regulation is evolving following the July 2025 GENIUS Act; implementation and the effect on permitted activities remain dependent on future rules.

Other uncertainties include climate and sustainability disclosures, fair-access requirements, federal scrutiny of alleged debanking, incentive-compensation rules, litigation, and potential credit-card fee restrictions. The company also faces changing interest rates, credit deterioration, commercial-real-estate occupancy and collateral risks, higher insurance assessments, mortgage-related risks, geopolitical and trade-policy shifts, and competition from banks, fintechs and technology-enabled providers. Technology disruption, third-party outages, data privacy, talent retention and execution of strategic plans are additional risks.

Securities replacement covenants

Covenants restrict redemption, repayment or repurchase of certain preferred and trust securities before applicable dates unless qualifying replacement securities are issued and required regulatory approval is obtained. Covered transactions include $675.378 million of USB Capital IX trust securities issued in 2006, bearing 6.189% fixed-to-floating, alongside Series A preferred stock; 40 million Series B preferred depositary shares at $25 each; and 4,500 shares of USB Realty Corp. fixed-to-floating exchangeable Series A preferred stock. These instruments reference U.S. Bancorp’s 2.491% Fixed Rate Reset Subordinated Notes due November 3, 2036 as covered debt.

Cybersecurity

For FY2025, U.S. Bancorp reported that it had identified no specific cybersecurity threat risks that had materially affected, or were reasonably likely to materially affect, its business strategy, results of operations, or financial condition, apart from risks described in its Risk Factors. The company cautioned that it may not be able to prevent or mitigate a future incident that could have a material adverse effect.

Oversight and accountability

Cybersecurity risk is integrated into U.S. Bancorp’s broader risk framework. Information Security Services (ISS) is the first line of defense, responsible for security controls and threat management. Cybersecurity Risk Oversight within Operational Risk Management provides second-line monitoring, reporting, and escalation, while Internal Audit independently assesses governance, risk management, and controls.

At the management level, the Cybersecurity and Technology Governance Committee (CTGC), chaired by the co-CISOs and other technology-risk leaders, provides oversight and strategic direction. The CTGC and Executive Risk Committee generally meet at least monthly. The Board’s Risk Management Committee has primary oversight of cybersecurity, receives management reports quarterly, and monitors performance against Board-approved information-security risk metrics and limits. The Risk Management and Audit Committees jointly receive an annual briefing from the co-CISOs, and the Board also holds periodic cybersecurity education sessions. An annual executive crisis exercise tests cyber-response resilience and communications.

Following the CISO’s departure in November 2025, two Deputy CISOs are serving temporarily as co-CISOs while the company searches for a permanent CISO. They oversee defense capabilities and mitigation strategies and report to the Chief Information and Technology Officer.

Operations and incident response

Management described daily security-triage discussions, with issues and emerging threats escalated as appropriate. Security-related remediation is reviewed biweekly with the Chief Risk Officer and Chief Information and Technology Officer. Enterprise Crisis Management handles high- and very-high-severity incidents; the Cyber Security Incident Response Team handles lower-severity incidents.

Program and third-party controls

The cybersecurity program includes training for employees and contractors, remediation and escalation procedures, and use of external assessments and consultants. It is aligned with standards including the NIST Cybersecurity Framework (NIST CSF) and PCI DSS. For third parties, the company uses risk-based due diligence and monitoring, contractual security and incident-notification requirements, and, where appropriate, independent reviews and verification of provider controls.

Item 15 — Exhibits and Financial Statement Schedules

This section is administrative and reports no current-period financial results, balance-sheet figures, cash flows, or quantified operating risks. It identifies U.S. Bancorp’s 2025 financial statements and related notes, including balance sheets for 2025 and 2024; income, comprehensive income, shareholders’ equity, and cash-flow statements for the three years presented; and unaudited average-balance and yield data and supplemental financial data. Financial statement schedules are included in the statements or notes, inapplicable, or not required.

Notable listed exhibits include an amendment to the 2024 Stock Incentive Plan; forms of executive restricted- and performance-stock-unit awards for grants after January 26, 2026; an Executive Change in Control Severance Plan filed January 29, 2026; and aircraft time-sharing and charter-flight reimbursement agreement forms filed in August 2025. The exhibit list also includes the incentive-based compensation recovery policy, executive compensation and deferred-compensation plans, subsidiaries, the auditor’s consent, and CEO/CFO certifications. The exhibit listings do not quantify the financial impact of these arrangements.

U.S. Bancorp states that instruments defining the rights of holders of long-term debt are not filed as exhibits, but copies will be provided to the SEC upon request. The report was signed February 23, 2026, by CEO and President Gunjan Kedia, CFO John C. Stern, Controller Lisa R. Stark, and directors; Kedia signed for the directors under powers of attorney.

U.S. Bancorp — FY2025 MD&A

Consolidated results

Revenue grew 4.4%, supported by higher fee income and a 2.2% increase in reported net interest income. On a taxable-equivalent basis, net interest income was $16.765B versus $16.409B in 2024 and $17.527B in 2023. The taxable-equivalent net interest margin edged up to 2.72% from 2.70%, as loan growth, fixed-asset repricing and lower deposit rates partly offset lower earning-asset yields and deposit-mix pressure. Average earning assets grew 1.4% to $615.360B.

Noninterest income growth reflected higher trust and investment-management fees, merchant processing and card sales, capital-markets activity and other income. Expenses fell 2.0%, helping improve the efficiency ratio to 58.6% from 62.3% (66.7% in 2023). The comparison benefited from the absence of $400M of 2024 pretax charges ($300M after tax) for merger/integration, the FDIC special assessment, lease impairments and efficiency actions; these charges reduced 2024 diluted EPS by $0.19. Lower compensation and other costs were partly offset by higher technology and marketing spending. Provision declined 2.3%, reflecting improved credit quality and Q2 loan sales, partly offset by loan growth.

Segment results

Payment Services growth came from higher loan balances, card and merchant volume, fees and lower funding costs. Banking revenue was pressured by funding and deposit mix, while Treasury and Corporate Support improved substantially with lower funding costs, investment portfolio repricing, higher capital-markets and tax-credit activity, and lower securities losses. Segment allocations and reporting methods may change; prior periods were recast for comparability.

Balance sheet, capital and funding

Tangible common equity to tangible assets improved to 6.7% from 5.8%. CET1 was 10.8% (2024: 10.6%); total risk-based capital was 14.2% (14.3%), leverage was 8.7% (8.3%), and supplementary leverage was 7.1% (6.8%). Capital ratios exceeded “well-capitalized” requirements. The company returned $3.7B to shareholders through dividends and repurchases; dividends declared per share were $2.04 versus $1.98.

Period-end loans increased 3.0%, led by commercial loans and leases, up 10.4% to $153.958B. Other major balances were CRE $48.920B ($48.859B), residential mortgages $115.885B ($118.813B), credit cards $32.234B ($30.350B), and other retail $40.338B ($42.326B); automobile loans declined to $3.575B from $6.601B. California is a significant exposure: it represented 36.6% of CRE and 43.6% of residential mortgages at year-end.

Deposits were up 0.8%; savings balances rose while time deposits declined 12.3% to $48.032B. Uninsured deposits were $273.5B, about 52% of total deposits. Short-term borrowings rose to $17.2B. Total available liquidity increased to $300.692B from $286.570B, including $205.120B of Federal Reserve/FHLB borrowing capacity. Average daily Q4 LCR was 106.5% (106.6%); the company was compliant with LCR and NSFR. Parent liquidity was sufficient for 24 months under normal conditions and 12 months under adverse conditions, without subsidiary dividends.

Credit quality and risk

The allowance comprised $7.605B for loan losses and $342M for unfunded commitments. Nonperforming assets fell mainly as CRE nonperforming loans declined to $518M from $824M; commercial nonperforming loans rose to $717M from $670M. CRE office loans declined to $4.307B from $5.601B but remained a credit pressure, with office allowance coverage of 9% versus 11%. Credit-card net charge-offs were $1.223B ($1.227B), or 4.06% of average loans (4.28%); other-retail charge-offs increased to $242M from $217M.

The allowance is a judgmental estimate based on forward-looking economic scenarios, borrower and portfolio factors, and qualitative adjustments. Management’s scenario sensitivity indicated the modeled allowance could be $1.0B lower or $2.5B higher. Key uncertainties include inflation, interest rates, real-estate values, unemployment and geopolitical risks.

Other notable matters

Trading Covered Positions average/high/low/period-end one-day VaR was $4M/$22M/$2M/$4M in 2025, versus $3M/$4M/$2M/$2M in 2024; no actual combined losses exceeded VaR in either year. U.S. Bancorp had $444.7B of contractual credit commitments and $11.3B of letters of credit, although many commitments expire undrawn or may be cancellable. In January 2026, it agreed to acquire BTIG for targeted closing consideration of $725M plus up to $275M of performance-based cash consideration; closing is expected in Q2 2026, subject to approvals and other conditions.

Management concluded internal controls were effective at year-end 2025; EY issued unqualified opinions on the financial statements and internal controls. EY identified the allowance for credit losses as a principal audit focus given its modeling and economic assumptions.

U.S. Bancorp — FY2025 Financial Statements

U.S. Bancorp’s FY2025 earnings improved as net interest and noninterest income increased and noninterest expense declined. Net interest income remained below FY2023, but earnings attributable to the company rose to a new three-year high among the periods provided. Balance-sheet growth was modest: loans grew faster than deposits, while cash declined.

Income and earnings

Net interest income increased 2.2% year over year, as interest expense fell to $14.321 billion from $15.377 billion despite lower interest income ($30.970 billion versus $31.666 billion). Deposit interest expense declined to $10.151 billion from $11.688 billion; expenses on short-term borrowings and long-term debt increased to $1.373 billion from $1.107 billion and $2.797 billion from $2.582 billion, respectively. Noninterest income rose 7.7%, bringing total revenue as defined above up 4.4%. Noninterest expense declined 2.0%, including no merger and integration charges compared with $155 million in FY2024. Net income attributable to U.S. Bancorp increased 20.2%.

Notable noninterest income lines were trust and investment management fees ($2.869 billion versus $2.660 billion), merchant processing ($1.792 billion versus $1.714 billion), and capital markets ($1.633 billion versus $1.523 billion). Securities losses narrowed to $61 million from $154 million.

Balance sheet

Loans increased by $11.503 billion, while deposits rose by $3.907 billion. The allowance for loan losses was broadly stable. Long-term debt and short-term borrowings both increased, while cash and due from banks fell.

Cash flows and shareholder returns

Operating cash flow declined year over year. Investing cash use included a larger net increase in loans outstanding, while deposit growth and financing cash provided were lower than in FY2024. Common shares outstanding were 1.560 billion at the start of FY2025 and 1.555 billion at year-end. Common dividends declared were $3.198 billion ($2.04 per share), versus $3.110 billion ($1.98 per share); common-stock repurchases were $490 million, compared with $173 million.

Other comprehensive income was $2.777 billion versus $332 million, principally reflecting a $2.355 billion improvement in unrealized available-for-sale securities gains and losses. Total comprehensive income attributable to U.S. Bancorp was $10.347 billion versus $6.631 billion.

Significant accounting policies

Credit losses and loan accounting

U.S. Bancorp estimates expected lifetime credit losses on loans and leases, net of expected recoveries, and maintains reserves for unfunded commitments. The allowance is updated quarterly using multiple economic scenarios across a three-year reasonable-and-supportable forecast. Management relies increasingly on historical loss experience in years two and three, then fully reverts to adjusted long-term historical experience. Scenario weighting and qualitative adjustments involve judgment and may reflect model or forecast limitations and emerging portfolio or economic risks. Estimates consider macroeconomic conditions, borrower and loan characteristics, collateral values, prepayments, and recoveries. Loans that do not share similar risk characteristics with pooled loans are assessed individually.

The allowance methodology covers commercial and consumer lending, with classes including commercial loans, commercial real estate, residential mortgages, credit cards, and other retail loans. Originated held-for-investment loans are recorded at principal outstanding, adjusted for unearned interest, deferred fees and costs, and charge-offs. Purchased loans are initially recorded at fair value. For loans acquired on or after January 1, 2020, purchased credit-deteriorated (PCD) loans receive an allowance with a corresponding increase to loan basis; the initial allowance for non-PCD purchased loans is recognized through provision expense. Subsequent allowance changes affect provision expense for both.

Commercial loans are generally placed on nonaccrual at 90 days past due or when collection is doubtful. Unsecured loans are generally charged off in full; secured loans are written down to collateral fair value less selling costs. Residential mortgages and other retail loans secured by one-to-four-family properties are generally charged down to collateral value at 180 days past due. Junior-lien residential loans may enter nonaccrual at 120 days past due or when the senior lien becomes severely delinquent or nonaccrual. Credit cards are charged off at 180 days past due; other retail loans generally at 120 days, and revolving consumer lines at 180 days. Internal pass, special mention, and classified ratings support quarterly credit assessments. Nonaccrual generally reverses accrued interest, and later cash interest is usually applied to carrying value until collection is sufficiently supported.

Troubled-borrower modifications may extend maturities, change rates, add collateral or guarantees, or reduce consumer payments. Credit-card and other retail modifications may amortize balances over as long as 60 months and generally include fee waivers and reduced rates. Modification and redefault experience inform loss estimates; the Company says modifications generally do not materially change the allowance.

Securities, derivatives, and valuation

Trading securities are carried at fair value, with changes and realized gains or losses in noninterest income. Available-for-sale debt securities are carried at fair value, with unrealized changes in other comprehensive income (OCI) and credit-related declines, if any, recorded through an allowance. Held-to-maturity securities are carried at amortized historical cost. Resale and repurchase agreements are treated as collateralized financings, with collateral monitored continuously.

Derivatives are carried at fair value; changes generally enter earnings unless hedge accounting applies. Effective fair-value hedge changes and the offsetting changes in hedged items affect earnings, while effective cash-flow and net-investment hedge changes generally enter OCI. Hedge effectiveness is assessed at inception and at least quarterly. If a forecasted transaction ceases to be probable, accumulated cash-flow hedge gains or losses are recognized immediately in earnings, potentially increasing earnings volatility.

Mortgage banking revenue includes mortgage sale gains or losses, servicing revenue, fair-value changes in mortgage loans originated for sale and related derivatives, mortgage servicing rights (MSR) valuation changes, and risk-management results. MSRs are measured at fair value using estimated future cash flows and market-based assumptions, including prepayment rates and option-adjusted spreads; valuation changes flow through mortgage banking revenue. Earnings are therefore sensitive to rates, prepayments, spreads, and other valuation assumptions.

Revenue, investments, and property

Revenue is generally recognized when services or products are delivered, subject to policies applicable to financial assets and liabilities. Card and corporate payment revenue includes interchange and related fees, reduced by card rewards and certain partner or network payments. Merchant processing revenue is reported net of interchange, network assessments, and revenue sharing. Trust and investment-management fees depend on assets under management or administration, fixed account fees, or transactions. Deposit, ATM, and treasury-management charges are recognized as services are provided or fees charged; underwriting fees generally at securities issuance; and direct-financing lease sales at sale. Investment-product distribution fees are recognized when a significant reversal is remote, including when customers retain mutual-fund positions.

Equity-method accounting generally applies to investments with significant influence (typically 20%–50% ownership) and to limited partnerships or similar entities with ownership above 5%. Most other equity investments without readily determinable fair values are carried at cost, adjusted for observable transactions. Investments are assessed for impairment at least annually and more often when warranted.

Other real estate owned is initially carried at fair value less estimated selling costs; subsequent value declines and holding costs are recorded in noninterest expense. Loans held for sale are generally measured at the lower of cost or fair value by loan type, except those elected for fair-value accounting. U.S. Bancorp has elected fair value for substantially all mortgage loans held for sale, with changes in noninterest income. Under lower-of-cost-or-fair-value accounting, further declines are recognized in noninterest income, recoveries above cost are deferred until sale, and write-downs on transfer to held-for-sale are reflected in loan charge-offs.

As a lessor, the Company has retail automobile leases with terms up to five years and commercial leases, exposing it to residual-value risk. It manages this risk through disciplined residual assumptions, diversification, valuation reviews, insurance for retail residual exposure, and off-lease vehicle marketing. As lessee, it records right-of-use assets and lease liabilities for leases longer than 12 months.

Other estimates, compensation, and presentation

Goodwill is not amortized and is tested for impairment at least annually and when events indicate potential impairment. Acquired intangible assets, including core deposit benefits and customer relationships, are amortized over estimated useful lives and tested when impairment indicators arise.

Pension obligations depend on projected benefit cash flows and discount rates based on high-quality corporate bonds. Actuarial gains and losses are deferred; amounts above a 10% threshold are amortized over future service periods or participant life expectancies. Differences between actual and expected plan returns are spread over approximately 15 years for active employees and 30 years for inactive participants. Changes in funded status are recorded in OCI. Buildings may be depreciated over lives up to 40 years, and furniture and equipment over 3–25 years. Qualifying internal-use software costs are capitalized and generally amortized over 3–5 years, with useful lives up to 7 years, and are subject to impairment review.

Stock-based compensation is expensed over vesting, with recognition accelerated when employees become retirement-eligible even if they continue working. Related tax expense may be adjusted when awards are exercised, canceled, expire, or vest. EPS uses the two-class method for participating securities; diluted EPS reflects potentially dilutive securities.

Consolidated statements include subsidiaries and variable-interest entities when U.S. Bancorp has power over the activities most affecting economic performance and potentially significant exposure to losses or benefits. Prior-period amounts may be reclassified to conform to current presentation.

Accounting changes

• U.S. Bancorp’s retrospective adoption in 2025 of expanded income-tax disclosure guidance was not material to its financial statements.
• FASB guidance issued in November 2025 on hedge accounting is effective for annual periods beginning after December 15, 2026. The company expects to adopt it prospectively, with an option for existing hedging relationships, and expects no material financial-statement impact.
• Also issued in November 2025, new credit-loss guidance for certain purchased loans without credit deterioration—excluding credit cards—requires the acquisition-date allowance to be offset by an increase in the loans’ basis. It applies prospectively to loans acquired on or after adoption.
• September 2025 guidance on internal-use software, effective for annual periods beginning after December 15, 2027, updates when software costs qualify for capitalization. The company expects no material impact.

Reserve balances and cash held at financial institutions

Balances held at central banks and other financial institutions are included in cash and due from banks and are maintained to meet reserve requirements and for other purposes.

Investment securities

At December 31, 2025, U.S. Bancorp’s investment portfolio included substantial held-to-maturity (HTM) and available-for-sale (AFS) holdings. The HTM portfolio was predominantly U.S. government-supported securities and agency mortgage-backed securities (MBS).

Agency MBS accounted for $75.235B of HTM amortized cost and $66.146B of fair value at year-end 2025.

At year-end 2025, AFS fair value was concentrated in U.S. Treasury and agency securities ($28.770B) and MBS ($45.759B).

AFS securities in unrealized-loss positions had $53.274B fair value and $4.548B gross unrealized losses at December 31, 2025. Most losses were on securities held in loss positions for at least 12 months.

Management attributed the unrealized losses primarily to changes in interest rates and market spreads, rather than credit deterioration. It had no plans to sell the securities and considered it more likely than not that it would not be required to sell them before recovering amortized cost. The AFS credit-loss allowance was immaterial at both year-ends; no credit-loss allowance was recorded for HTM securities.

Interest income and realized gains and losses

Investment-securities interest income increased 5.6% in FY2025. Taxable interest income rose, while nontaxable interest income declined.

Maturities, yields and pledged securities

The portfolio remained long-dated, but weighted-average maturities shortened in 2025. HTM yield increased, while AFS yield declined. AFS maturity and yield measures reflect anticipated MBS prepayments where applicable.

Securities pledged for deposits, repurchase agreements and other contractual or legal purposes had $17.2B fair value at December 31, 2025, compared with $18.8B a year earlier. Of the pledged securities, $294M in 2025 and $320M in 2024 were subject to counterparties’ rights to sell or repledge.

Loans and credit quality

Total loans rose 3.0% to $391.335 billion at December 31, 2025, primarily reflecting growth in commercial and credit card lending. Commercial real estate was essentially unchanged, while residential mortgages and other retail loans declined.

Loans pledged to the FHLB were $127.8 billion at year-end 2025, compared with $127.6 billion in 2024; loans pledged to the Federal Reserve were $90.0 billion, versus $85.1 billion.

Allowance, provision and net charge-offs

The allowance for credit losses (ACL) was nearly flat year over year; its small increase was attributed primarily to loan portfolio growth. The provision declined, while net loan charge-offs were slightly higher.

Credit card loans—predominantly revolving—accounted for the largest share of charge-offs. Residential mortgages had net recoveries of $4 million in 2025, compared with $9 million in 2024.

Delinquencies, nonperforming assets and criticized loans

Nonperforming assets and nonperforming loans declined. However, accruing loans 90 or more days past due increased. Interest recognized on nonperforming loans remained well below the contractual interest amount.

Total criticized loans fell to $8.420 billion from $10.780 billion, with reductions in both special-mention and classified loans. Criticized commercial real estate and commercial loans also declined.

Certain delinquent GNMA-pool mortgage loans eligible for repurchase and covered by FHA insurance or VA guarantees are classified as current. These included $3.5 billion of loans 90 or more days past due at year-end 2025, compared with $2.3 billion in 2024; this treatment is relevant when interpreting reported mortgage delinquency and credit ratings.

Loan modifications and measurement

Modified loans totaled $4.398 billion, or 1.1% of loans, at year-end 2025, compared with $4.423 billion, or 1.2%, in 2024. Term extensions were the largest modification type. Modified loans 90 or more days past due at year-end totaled $204 million for 2025 modifications, versus $537 million for 2024 modifications. The company had $410 million of commitments to lend additional funds to borrowers with modified outstanding balances.

Originated loans are carried at principal outstanding, net of unearned interest, deferred fees and costs, and partial charge-offs; purchased loans are recorded at acquisition-date fair value. Net unearned interest and deferred fees and costs on originated loans, together with unamortized premiums and discounts on purchased loans, were $2.0 billion at December 31, 2025, compared with $2.5 billion a year earlier. Commercial and commercial real estate loans may be secured by securities, receivables, inventory, equipment, real estate or related property.

Lease activities

U.S. Bancorp is both a lessor and a lessee. Its lessor revenue, primarily interest income from sales-type and direct financing leases, increased in FY2025. Its lessee costs declined, while operating-lease right-of-use (ROU) assets rose modestly and reported lease liabilities were broadly unchanged.

Lessor results and balances

Lessor revenue grew 2.2% in FY2025, following 5.0% growth in FY2024. At year-end 2025, contractual receipts on sales-type and direct financing leases were $8.118B, including $841M of interest and resulting in $7.277B of lease receivables. Contractual receipts on operating leases totaled $532M.

Lessee costs, balances and cash flows

The Company primarily leases branches, operations centers and other corporate locations. Lessee costs, principally contractual operating-lease payments, are included in net occupancy and equipment expense.

At December 31, 2025, future lessee obligations were $1.748B for operating leases and $142M for finance leases. After $329M and $17M of interest, respectively, the recorded liabilities were $1.419B for operating leases and $125M for finance leases.

Lease terms and rates

The Company reported no significant lease covenants or other restrictions.

Transfers, servicing and securitizations

USB’s transfers primarily involve residential mortgages sold to government-sponsored enterprises, tax-advantaged investments, commercial loan participations, and other loan and securities sales. Continuing involvement is generally limited to servicing, customary representations and warranties, and, in some cases, performance-based guarantees. Servicing assets and retained interests are initially recognized at fair value.

USB regularly issues GNMA securities and sponsors and services an off-balance-sheet auto-loan securitization, retaining a risk-retention security. It reports no other off-balance-sheet asset securitizations or similar financing arrangements. Packaging high-grade corporate bonds for select customers is limited and generally involves no continuing involvement.

Tax-advantaged investments and VIEs

Affordable-housing, community-development and renewable-energy investments generate returns mainly through federal and state tax credits and other tax benefits; some also support Community Reinvestment Act compliance.

Investment expenses were primarily included in tax expense.

At year-end, unconsolidated community-development and tax-advantaged VIE exposures were:

Maximum exposure includes recorded investments net of unfunded commitments and previously recognized tax credits subject to possible recapture. USB considers potential losses remote. Its stress scenario assumes projects fail and do not meet government compliance requirements, triggering tax-credit recapture. VIE creditors generally have no recourse to USB, and VIE assets are restricted to settling VIE obligations.

Other unconsolidated VIE exposures included:

Separately, available-for-sale senior notes issued by unconsolidated third-party securitization VIEs were $1.7 billion at December 31, 2025, compared with $3.2 billion a year earlier; they were backed by $1.9 billion of indirect auto loans, down from $3.6 billion. Individual net investments in unconsolidated VIEs ranged from less than $1 million to $299 million at year-end 2025, compared with less than $1 million to $79 million at year-end 2024.

Community-development and tax-advantaged investment VIEs consolidated by USB had approximately $6.2 billion of assets and $3.8 billion of liabilities at December 31, 2025, versus $6.4 billion and $4.2 billion, respectively, a year earlier. Assets were primarily reported in other assets; liabilities were in long-term debt and other liabilities. VIE assets are the primary repayment source, and creditors have no recourse to USB’s general credit. USB’s exposure is generally limited to the carrying value of its variable interests plus related tax credits previously recognized or transferred with a guarantee.

Premises and equipment

Mortgage servicing rights

At December 31, 2025, U.S. Bancorp serviced $216.3B of residential mortgage loans for others, compared with $216.6B a year earlier; totals include subserviced mortgages without a corresponding MSR asset. The portfolio with a corresponding MSR asset was $207.237B, down from $216.374B. MSRs are carried at fair value, with changes recognized in earnings.

FY2025’s other fair-value losses primarily reflected passage of time and realized cash flows (“decay”), and also included certain non-rate-related expected cash-flow changes.

Portfolio composition and valuation

MSR fair value was 152 bps of the related servicing portfolio, versus 156 bps in 2024; the valuation multiple was 5.03x weighted-average servicing fees, down from 5.17x. Portfolios are predominantly fixed-rate agency loans, with limited adjustable-rate or jumbo exposure. HFA loans support first-time and low- to moderate-income homebuyers through state and local housing programs.

Interest-rate sensitivity

Derivative hedges substantially offset modeled MSR rate sensitivity, though not fully in every scenario.

Goodwill and other intangible assets

Goodwill increased $99M in FY2025: $46M from acquisitions and $53M from foreign-exchange translation and other changes. Amortization expense was $498M in FY2025 ($383M for core deposit benefits and $115M for other identified intangibles), compared with $569M in FY2024 and $636M in FY2023. Estimated future amortization is $435M in 2026, $366M in 2027, $302M in 2028, $235M in 2029, and $172M in 2030.

Deposits and short-term funding

Of year-end 2025 time deposits, $46.873B mature in 2026.

Long-term debt

U.S. Bancorp’s long-term debt—debt with original maturities over one year—was $60.764B at December 31, 2025, up $2.762B (4.8%) from $58.002B a year earlier. Parent-company debt increased to $37.057B from $35.257B, while subsidiary debt increased to $23.707B from $22.745B.

Debt by issuer and instrument

Parent subordinated notes totaled $4.799B in both years: $199M at 7.500% due 2026; $1.000B at 3.100% due 2026; $1.000B at 3.000% due 2029; $1.300B at 4.967% due 2033; and $1.300B at 2.491% due 2036. Fixed-rate parent medium-term notes carry rates of 1.375%–6.787% and mature in 2026–2045. Floating-rate parent medium-term notes carry a rate of 2.866% and are due in 2028.

Fixed-rate FHLB advances carry rates of 1.860%–5.260% and mature in 2026–2027; floating-rate advances carry rates of 4.130%–4.590% and mature in 2026–2027. Fixed-rate bank notes carry rates of 3.966%–5.550% and mature in 2027–2032; floating-rate bank notes carry rates of 0%–4.564% and mature in 2027–2065. Weighted-average rates were 4.60% for medium-term notes, 4.41% for FHLB advances, and 3.44% for bank notes.

Parent-company “other” debt primarily includes $2.3B at December 31, 2025 ($2.2B at December 31, 2024) of discounted, noninterest-bearing additional cash received in the 2022 MUFG acquisition. It is due to MUFG on or before December 1, 2027, creating a substantial scheduled obligation apart from stated-interest debt.

Contractual maturities and borrowing capacity

The concentration of maturities in 2026–2027 creates near-term refinancing and funding needs. At December 31, 2025, the Company also had $205.1B of additional borrowing capacity from FHLB and Federal Reserve Bank arrangements, up from $171.2B a year earlier; this is available capacity, not outstanding debt.

U.S. Bancorp shareholders’ equity and capital

Shares, preferred stock and repurchases

All preferred series are perpetual and non-cumulative. Series N’s 3.70% dividend rate resets in January 2027 to the five-year Treasury rate plus 2.541%; Series J’s 5.30% rate resets in April 2027 to three-month CME Term SOFR plus 2.914% and a 0.26161% credit spread adjustment. Series O pays 4.50%, Series M 4.00%, Series L 3.75% and Series K 5.50%, if declared. Several series have optional redemption dates beginning in 2026–2027; certain earlier redemptions are permitted following regulatory changes affecting Tier 1 capital treatment.

Approximately $4.4 billion remained available under the current repurchase authorization at December 31, 2025. Repurchases remain subject to board approval and regulatory requirements.

Regulatory capital

U.S. Bancorp’s stress capital buffer requirement declined to 2.6% from 3.1%; the bank subsidiary’s capital conservation buffer remained 2.5%. Regulatory capital reflected full implementation of CECL beginning January 1, 2025, following the 2022–2024 phase-in.

Accumulated other comprehensive loss

Items reclassified from AOCI reduced 2025 net income by $579 million, compared with $678 million in 2024.

Earnings attributable to shareholders

2025 net income applicable to common shareholders followed $329 million of preferred dividends and $47 million of allocations to participating stock awards. One million options were excluded as antidilutive at year-end 2025.

Employee benefits

Defined contribution plan

The company matches 100% of employee contributions up to 4% of eligible compensation; matching contributions vest immediately.

Qualified pension plans

The qualified pension plans had a funded surplus at year-end 2025, which increased from 2024. The projected benefit obligation rose primarily because the discount rate was lower, partly offset by year-end plan amendments that aligned the benefit-crediting formula for a subset of employees with the formula used for other employees. The amendments generated a $261 million prior-service credit.

Plan-asset returns were $945 million in 2025, compared with $381 million in 2024. The pension-plan rollforward reported $39 million of employer contributions; separately, the company stated that it made no contributions to qualified pension plans in 2025 or 2024 and expects none in 2026.

At year-end 2025, pretax accumulated OCI included a $1.407 billion net actuarial loss and a $286 million net prior-service credit, for a net recognized loss of $1.121 billion, compared with $1.329 billion in 2024.

Contributions and expected benefit payments

The company expects to contribute approximately $55 million to its unfunded nonqualified pension plans in 2026, equal to expected benefit payments.

Postretirement welfare plan

The welfare plan is closed to new participants. Its assets were $47 million at both year-ends, while its projected benefit obligation declined.

The company expects no contribution to the plan in 2026. The plan recorded a net periodic benefit of $6 million in 2025, compared with $7 million in 2024 and $10 million in 2023.

Assumptions and investment strategy

The pension-obligation discount rate was 5.44% at year-end 2025, down from 5.77% in 2024. The assumed long-term return on plan assets used for pension cost was 7.00% in both 2025 and 2024, compared with 6.75% in 2023. The target allocation is 35% long-duration bonds, 30% global equities, 10% real assets, 10% private equity, and 5% each in domestic mid-/small-cap equities, emerging-market equities, and hedge funds. Most plan assets are valued using fund-provided net asset values rather than classified in the fair-value hierarchy. Related-party asset-management investments totaled $105 million at year-end 2025, up from $63 million in 2024.

Stock-based compensation

At December 31, 2025, U.S. Bancorp had 41 million shares available for grant under its stock incentive plan. Most restricted stock and unit awards vest over three to five years and may be forfeited if vesting requirements are not met.

Restricted shares and units

Compensation expense and vested-award value

At year-end 2025, $177 million of compensation cost remained unrecognized, expected to be expensed over a weighted-average 1.8 years.

Stock options

Outstanding options declined to fewer than 1 million at December 31, 2025, from approximately 2 million a year earlier. The remaining options had a weighted-average exercise price of $53.29 and a weighted-average contractual maturity of 1.0 year.

Income taxes

Pretax income increased 20.3% year over year, while income tax expense rose 21.6%. The effective tax rate was 20.5% in FY2023.

Cash taxes

FY2025 cash taxes were $645M in FY2023 and comprised $338M federal, $170M state and local, and $36M foreign. Cash payments were materially below reported tax expense.

Deferred taxes and realization

The decline in net deferred tax assets reflected lower gross deferred tax assets, partly offset by lower gross deferred tax liabilities. The company considers other net deferred tax assets more likely than not realizable through carrybacks, reversals of taxable temporary differences, and future taxable income.

Realization risks include approximately $142M of deferred tax assets from U.S. federal, state and foreign NOL carryforwards, which begin expiring in 2026. A substantial portion relates to state NOLs subject to a full valuation allowance because realization is not expected within the carryforward period. The company also has $1.3B of U.S. federal and state credit carryforwards expiring through 2045; some are subject to valuation allowances because management does not expect to use them within the carryforward period.

Uncertain tax positions and other exposures

The FY2025 balance included $39M of accrued interest and penalties and reflected $15M of additions, partly offset by $3M from examination resolutions and statute expirations. Interest and penalty expense was approximately $12M in FY2025, compared with benefits of $13M in FY2024 and $11M in FY2023. IRS examinations for tax years 2021–2022 remain open; federal examinations through 2020 are resolved. The company notes that differing interpretations of tax law and multi-year examinations may result in adjustments.

Retained earnings included approximately $102M of acquired thrift institutions’ base-year reserves for which no deferred federal tax liability was recognized. These reserves could be recaptured if relevant subsidiaries lose bank tax status or upon certain stock redemptions or excess distributions.

Derivative instruments

U.S. Bancorp uses derivatives to manage interest-rate, foreign-exchange, credit, mortgage-servicing-rights and customer-related risks. Derivatives are carried at fair value. Customer positions are generally offset with broker-dealers or other instruments, but the company retains market, counterparty, funding and liquidity risks. Notional amounts indicate contractual scale, not the amount at risk.

Derivative positions at year-end

Customer activity is concentrated in interest-rate and foreign-exchange contracts. At Dec. 31, 2025, customer interest-rate swaps had $845.456B notional, foreign-exchange forwards, spots and swaps had $137.555B, and commodity swaps had $18.068B. The company manages associated exposures using offsets, netting, collateral and market-risk limits.

Hedge accounting and related balances

All cash-flow hedges were highly effective in FY2025. U.S. Bancorp expects to reclassify a further $76M net-of-tax loss from OCI into earnings over the next 12 months.

For net-investment hedges, the carrying amount of designated non-derivative debt was $1.7B at Dec. 31, 2025, compared with $1.3B a year earlier. FY2025 OCI included losses of $33M on foreign-exchange forwards and $195M on non-derivative debt; FY2024 had gains of $121M and $85M, respectively.

Under the portfolio-layer method, closed-portfolio amortized cost was $20.7B, of which $9.2B was designated as hedged in 2025. The associated cumulative basis adjustment was $175M, compared with $13M in 2024.

Economic-hedge earnings

Collateral and counterparty risk

At Dec. 31, 2025, derivatives in a net-liability position under collateral arrangements had $1.7B fair value, and U.S. Bancorp had posted $1.5B of cash collateral. Agreements may require additional, potentially full, collateralization if the company’s credit ratings fall below specified thresholds, creating a potential liquidity demand. The company mitigates counterparty risk through diversification, central clearing, master netting and collateral agreements.

Visa-related swap agreements, included in other asset/liability-management derivatives, had $995M notional and $99M fair value at Dec. 31, 2025, compared with $1.0B notional and $78M fair value a year earlier.

Netting arrangements and securities financing

At December 31, 2025, U.S. Bancorp’s derivative notional was approximately $1.4 trillion: $649.4 billion bilateral OTC, $725.5 billion centrally cleared, and $69.8 billion exchange-traded. Contracts generally permit counterparty netting. Derivative fair values and collateral requirements are assessed daily, and collateral is typically cash. Securities received as collateral generally are not recorded unless the counterparty defaults; securities pledged remain on the balance sheet.

Balance-sheet netting and residual exposure

Amounts are at December 31; dollar figures are in billions unless noted. “Final net” reflects eligible financial-instrument offsets and collateral.

The sharp expansion in repo and reverse-repo activity drove the increase in recognized balances and balance-sheet offsets. Despite the larger financing activity, eligible offsets and collateral reduced the reported residual amounts substantially. USB elects balance-sheet offsetting for most derivative counterparties and certain repo and reverse-repo counterparties, but not for securities-borrowed or securities-loaned transactions. Master netting agreements permit daily net settlement and close-out netting upon default. Cash collateral payables netted against derivative assets were $1.2 billion in 2025 versus $1.9 billion in 2024; cash collateral receivables netted against derivative liabilities were $1.5 billion versus $1.9 billion.

Repo funding and collateral reuse

Of 2025 repo liabilities, $100 million was due in less than 30 days. Repo collateral included $54.117 billion of U.S. Treasury and agency securities, $3.115 billion of corporate debt, $419 million of asset-backed securities, and $293 million of residential agency MBS.

The fair value of collateral received with a contractual right to sell or repledge increased to $62.6 billion from $7.8 billion; $56.6 billion was sold or repledged, compared with $7.6 billion in 2024. These transactions create counterparty exposure. USB describes controls including independent counterparty assessments, concentration limits, and daily collateral valuation and margin maintenance.

Recurring fair-value measurements

At December 31, 2025, U.S. Bancorp’s recurring fair-value assets rose to $102.836 billion from $97.259 billion a year earlier, while recurring fair-value liabilities declined to $8.045 billion from $13.291 billion. Most recurring fair-value assets were Level 2. Available-for-sale securities were the largest category; mortgage servicing rights (MSRs) and certain derivatives were Level 3.

Level 3 net derivative assets and liabilities generated a $1.145 billion net loss in 2025, compared with a $3.829 billion net loss in 2024. The 2025 loss included approximately $1.3 billion of capital markets revenue losses, partly offset by $237 million of mortgage banking revenue gains, and $116 million of losses in other noninterest income. The net Level 3 derivative position ended 2025 at a $212 million net liability, versus a $1.800 billion net liability at year-end 2024. Before netting, Level 3 derivative assets were $1.970 billion (with $3.151 billion of netting), and liabilities were $2.182 billion (with $3.392 billion of netting).

MSRs recorded a $355 million fair-value loss in 2025, compared with a $97 million loss in 2024; $276 million of MSRs were capitalized in each year. Their valuation depends on unobservable assumptions: expected prepayment ranged from 6% to 20% (weighted average 9%) and option-adjusted spreads from 5% to 11% (weighted average 6%). Increases in either assumption reduce MSR fair value. Level 3 mortgage commitments used expected loan-close rates of 4% to 100% (weighted average 83%) and embedded MSR values of 57 to 214 basis points per loan (weighted average 125 basis points). For certain Level 3 derivatives, credit valuation adjustments ranged from 0% to 2,431% of counterparties’ pre-adjustment net derivative fair value, with a 2% weighted average. Level 3 Visa swap valuations depend on management estimates of litigation outcomes and timing; adverse or delayed outcomes could increase the derivative liability.

Other fair-value effects and nonrecurring measurements

Nonrecurring measurements primarily reflected collateral-based loan values and appraisals or broker price opinions for foreclosed properties. Fair-value-option mortgage loans held for sale produced a $30 million net gain in mortgage banking revenue in 2025, after net losses of $15 million in 2024 and $46 million in 2023. Fair-value-option time deposits generated an $8 million net loss in deposit interest expense in 2025, compared with a $4 million net gain in 2024. Structured long-term notes had a $15 million net debit valuation adjustment loss in OCI in 2025, versus a $1 million gain in 2024; other fair-value changes produced a $2 million net gain in interest expense, compared with a $17 million gain in 2024.

Fair-value-option balances

Fair-value carrying amount exceeded contractual principal for loans by $28 million in 2025 and $8 million in 2024. Long-term debt carrying amount was below principal by $5 million and $18 million, respectively. Nonaccrual and 90-days-past-due loans subject to the option were very small.

Financial instruments carried at amortized cost

Amounts are carrying amount / estimated fair value, in $ billions.

The estimated fair-value discount on held-to-maturity securities narrowed to $9.091 billion from $12.359 billion; the discount on loans, net of allowance, narrowed to $407 million from $6.621 billion.

Fair-value estimates were predominantly Level 2; major Level 3 amounts included loans and other financial assets, and “other” financial liabilities. For unfunded commitments, deferred non-yield-related loan fees, standby letters of credit and other guarantees, fair value was approximately equal to carrying value. Carrying values for the first group were $377 million in 2025 and $376 million in 2024; other guarantees were $187 million and $194 million, respectively. Disclosed estimates exclude specified nonfinancial and financial items, including deposits without defined or contractual maturities, and therefore do not represent a full fair-value remeasurement of the balance sheet. The company reported no significant changes in valuation techniques during 2023–2025.

Guarantees and contingent liabilities

Unfunded credit commitments

At December 31, 2025, the following amounts represent contractual/notional potential credit exposure, not expected funding needs (dollars in millions):

Corporate and purchasing card and retail credit card commitments are primarily cancellable at U.S. Bancorp’s discretion. The company expects many commitments to expire unused and applies underwriting and collateral practices similar to those for loans. Separately, unfunded broker-dealer commitments were $8.5 billion for reverse repurchase agreements and $4.8 billion for repurchase agreements.

Guarantees and contingent exposures

At December 31, 2025, maximum potential future payments were contractual or estimated exposures, not expected losses; collateral, recourse, and the probability of triggering events may reduce actual exposure (dollars in millions):

Standby letters of credit had an estimated fair value of $23 million, with a weighted-average term of approximately 16 months; $6.958 billion was due within one year and $4.063 billion thereafter. Commercial letters of credit totaled $285 million, comprising $255 million due within one year and $30 million beyond one year.

Asset-sale guarantees consist mainly of loan-portfolio and tax-advantaged-investment buy-back or make-whole provisions. The company held a $111 million reserve for potential losses on tax-advantaged investments. Separately, the reserve for GSE mortgage representation-and-warranty obligations was $7 million at December 31, 2025, down from $9 million at December 31, 2024; unresolved GSE claims were $13 million, versus $15 million a year earlier. Actual repurchase losses are expected to be below maximum exposures, with reserves estimated using loan-level credit, borrower, historical-loss, and collateral factors.

Merchant-processing maximum exposure approximates eligible card transactions processed during the final four months of 2025. While losses are considered unlikely for most transactions, future-delivery merchants pose greater risk. Airline tickets purchased for future delivery totaled $15.1 billion; related collateral and credit enhancements were $747 million, and the liability for implied guarantees was $30 million. For unresolved charge-backs, merchant escrow deposits were $113 million and the recorded liability was $19 million. If merchants fail to deliver goods or services, U.S. Bancorp may have to refund cardholders and may be unable to recover the amounts from merchants.

USB Capital IX had $684 million of assets, primarily U.S. Bancorp Series A Preferred Stock. U.S. Bancorp effectively guarantees $683 million of the trust’s payment obligations to third-party investors on a junior-subordinated basis; all company debentures issued to the trust had matured or been retired. Other subsidiary-related financial performance guarantees and commitments had maximum potential payments of approximately $2.3 billion.

Litigation and regulatory matters

U.S. Bancorp had sold substantially all of its Visa Class B shares by December 31, 2025. Visa U.S.A. member banks’ indemnification obligation to Visa Inc. for potential antitrust-litigation losses has no specified maximum. Visa funded an escrow for member institutions using IPO proceeds and reductions to the Class B share conversion ratio. The damages action in the merchant interchange litigation is resolved, although some opt-out merchant cases remain. In November 2025, Visa and plaintiffs submitted a superseding settlement in the injunctive action proposing lower U.S. merchant interchange fees and other rule changes; preliminary approval was pending.

Other matters include long-running residential mortgage-backed securities trustee litigation alleging failures to enforce loan repurchases and meet standards of care after defaults, as well as continuing regulatory examinations and investigations involving compliance, risk management, third-party risk, and consumer protection. Outcomes could include fines, penalties, restitution, or business-practice changes that increase costs or reduce revenue. The company does not expect aggregate reasonably possible losses above reserves for matters where loss is probable to be material to its financial condition, results, or cash flows, but individual matters could materially affect results in a particular period, and estimates may differ significantly from actual outcomes.

2025 business segment results

Segment revenue is total net revenue; segment profit is income before income taxes. Dollars are in billions unless otherwise noted.

Payment Services was the strongest growth contributor: revenue rose 5.4% and pretax income increased 18.0%. Its noninterest income is reported net of rewards, rebates and certain partner payments, which totaled $3.1 billion in both years. Wealth, Corporate, Commercial and Institutional Banking and Consumer and Business Banking both recorded lower revenue and pretax income. Consumer and Business Banking continued a multiyear contraction: its revenue was $10.295 billion and net interest income was $8.658 billion in 2023, compared with $9.231 billion and $7.625 billion, respectively, in 2024. Payment Services revenue increased from $6.665 billion in 2023, while its credit-loss provision remained elevated.

Treasury and Corporate Support’s pretax loss narrowed from 2024 and from $3.854 billion in 2023. This segment includes centrally managed funding, investment portfolios, asset/liability management, unallocated taxes and corporate costs, so its results reflect centrally managed items as well as corporate support activities.

Consolidated results

Revenue increased 4.4%, while lower noninterest expense and provision for credit losses accompanied the increase in pretax income. The 2025 taxable-equivalent adjustment was $116 million.

Credit provision by segment

Payment Services had the largest segment provision in both years, although its provision declined in 2025. Provisions increased in both the Wealth/Commercial/Institutional and Consumer/Business Banking segments.

Average loans and deposits

Average consolidated loans rose while average deposits were essentially flat. Average loans grew in Wealth/Corporate/Commercial/Institutional Banking and Payment Services, but fell in Consumer and Business Banking. Average deposits were concentrated in Wealth/Corporate/Commercial/Institutional Banking ($272.873 billion) and Consumer and Business Banking ($220.684 billion).

Segment reporting and comparability

Management evaluates segment performance using taxable-equivalent net interest income, noninterest income and pretax income. Segment results reflect allocations of assets, liabilities, funding costs and credits, shared services, and credit-loss expense; changes in economic forecasts are recorded in Treasury and Corporate Support. The company revised deposit and loan funds-transfer pricing in Q2 2024 and made other organizational and methodology changes during 2025, 2024 and 2023; prior periods were recast for comparability.

U.S. Bancorp parent company

Balance sheet

Parent-company income

Parent-company cash flows

The parent issued $4.968B of long-term debt and paid or redeemed $3.750B during FY 2025. Cash and due from banks increased $498M during FY 2025, compared with a $2.208B decrease in FY 2024.

Liquidity constraints and subsequent event

Transfers from the bank subsidiary to the parent are restricted. Federal law generally limits loans to the parent or an individual affiliate to 10% of the bank’s unimpaired capital and surplus, with loans to the parent and all affiliates collectively capped at 20%. Bank-subsidiary dividends are also subject to statutory limits, regulatory review and, in some cases, regulatory approval; minimum capital requirements further constrain distributions. These restrictions can limit the parent’s access to subsidiary funds for debt service, dividends and other needs.

In January 2026, U.S. Bancorp agreed to acquire BTIG, a global institutional trading, investment banking, research and brokerage firm, for up to $1.0B. The targeted closing consideration is $725M—$362.5M in cash and 6,600,594 U.S. Bancorp common shares—with up to $275M of additional cash payable over three years subject to performance targets. The acquisition is intended to expand capital-markets offerings and add fee revenue; the company does not expect a material impact on its consolidated balance sheet. Closing is expected in Q2 2026, subject to regulatory approval and other conditions.

U.S. Bancorp — annual daily-average balances and related results

The figures below are annual daily averages, not period-end balance-sheet totals. Interest income, interest expense, and rates are presented on a fully taxable-equivalent (FTE) basis unless noted. FY2025 shows modest growth in average assets and loans, lower funding costs, and a slight improvement in net interest margin (NIM); however, loan yields and net interest income remained below FY2023 levels.

Scale and net interest performance

FTE net interest income increased 2.2% from FY2024, while NIM improved slightly; both remained below FY2023 levels.

Average loans and loan yields

Average total loans rose 1.7%, but loan interest income declined 2.8% as the average loan yield fell. Commercial balances increased while commercial yields and interest income decreased. Credit-card balances and income grew, with the yield remaining high but easing slightly. Residential mortgage balances were nearly flat, with income and yield higher.

Securities and other earning assets

Securities balances, income, and yield rose. Bank deposits and their associated income and yield declined. Other earning assets increased; the filing notes that 2025 balance-sheet netting affects their reported balances and yields.

Funding and interest expense

Despite growth in average interest-bearing liabilities, interest expense and the average funding cost declined. Lower money-market savings balances and costs contributed to the decline, while savings-account balances and costs increased. Long-term debt balances and expense also rose. After netting related interest income and expense for specified repo/reverse-repo arrangements, FY2025 yields were 4.98% on total earning assets and 2.73% on total interest-bearing liabilities, compared with reported rates of 5.05% and 2.82%, respectively.

Equity, per-share results, and shareholder returns

FY2025 common dividends declared totaled $3.198B. Period-end common shares outstanding were 1.555B at FY2025 year-end, compared with 1.560B at FY2024 year-end. Over the five years through 2025, the cumulative total shareholder return index rose to 142 from a 2020 base of 100, trailing the S&P 500 and KBW Bank Index, both at 196. Historical returns are not a forecast.

Company Overview

U.S. Bancorp is a Minneapolis-based financial services holding company that operates through U.S. Bank National Association (USBNA) and other subsidiaries. USBNA held all of the company’s consolidated deposits, totaling $522.2 billion as of December 31, 2025.

The company provides consumer and commercial banking, lending, payments and merchant processing, mortgage banking, capital markets, trust and asset management, insurance, brokerage, leasing, and fund administration. Its lending is principally focused on domestic markets, domestic customers with foreign operations, and large national customers in targeted industries, including healthcare, utilities, oil and gas, and state and municipal government. Loan and financing products include traditional loans, credit cards, lease financing, trade finance, asset-backed lending, and agricultural finance. Subsidiaries also offer investment and insurance products and fiduciary services.

Distribution and Geographic Reach

At December 31, 2025, U.S. Bancorp operated 2,075 branches across 26 states, concentrated primarily in the Midwest and West, and 4,428 ATMs. A significant percentage of consumer transactions are conducted through online and mobile banking.

The company is one of the largest U.S. providers of corporate and purchasing card services and corporate trust services. Merchant processing reaches Canada and parts of Europe; corporate trust and fund administration services are also provided in Europe. U.S. Bancorp characterizes its foreign operations as not significant to the company.

Employees

U.S. Bancorp employed approximately 70,000 people at December 31, 2025.

U.S. Bancorp — Risk Factors

U.S. Bancorp’s results, liquidity, capital and reputation are exposed to interconnected economic, credit, funding, regulatory, technology and operational risks. Many could reinforce one another: economic or market stress may weaken borrowers and collateral, while deposit outflows, higher funding costs or reduced access to liquidity could constrain the Company’s ability to respond.

Economic, credit and market risks

A weakening U.S. or global economy—including recession, inflation, unemployment, elevated interest rates, trade uncertainty, geopolitical conflict or local real-estate stress—could reduce loan demand and utilization while impairing borrowers’ ability to repay or refinance. Deterioration in credit quality could increase delinquencies, defaults, nonperforming assets, charge-offs and credit-loss provisions, and reduce demand for fee-based products. Losses could be amplified by concentrations in particular loan types, industries, borrowers or geographies. Commercial-property vacancies may depress collateral values; California real-estate deterioration, wildfires and other disasters may also affect borrowers and collateral. Non-depository financial institution borrowers may be especially sensitive to market volatility, and their financial collateral may not prevent repayment deterioration. Credit allowances and underwriting depend in part on forecasts and models that may prove inaccurate or insufficient.

Volatile or illiquid markets can make securities, derivatives and other instruments difficult to value, and eventual sale proceeds may fall materially below current fair value. Falling asset values can undermine confidence even when losses do not immediately affect earnings or capital; uninsured or uncollateralized depositors may question the stability of USBNA and withdraw funds. Leased assets also carry residual-value risk if their value at lease end is below the recorded amount.

Trade policy is another source of uncertainty. Tariffs and possible retaliation can raise customers’ costs, weaken demand and margins, affect investment and borrowing plans, and impair household or business debt repayment. Further policy changes, including those associated with court decisions, could adversely affect credit quality and results.

Interest rates, deposits and liquidity

Net interest income is a major earnings driver and is sensitive to market rates, Federal Reserve actions and the yield curve. Higher rates may support NII but can also reduce loan demand, weaken borrowers with variable-rate or maturing debt, and increase deposit and borrowing costs. Customers may move noninterest-bearing deposits into interest-bearing accounts or higher-yielding investments; USBNA may need to offer more competitive rates to retain funding. Deposit losses or migration to alternatives can raise funding costs and pressure net interest margin and NII. Lower rates or a flatter or inverted yield curve have historically reduced NII.

Competition from banks and nonbanks, prolonged high rates, mobile banking and rapid online rumors may accelerate deposit withdrawals. Cryptocurrencies and digital assets may offer additional alternatives; payment stablecoins could become closer substitutes for deposits under the framework established by the July 2025 GENIUS Act, though its effects remain uncertain pending implementation. Rapid outflows could increase funding costs, cause losses and constrain access to capital. Access to Federal Reserve or Federal Home Loan Bank facilities may depend on supervisory assessments of financial condition. The parent company also relies significantly on subsidiary dividends for its own dividends and debt service; restrictions on upstream payments and subsidiary creditors’ prior claims could limit parent-company liquidity. Government support in a systemic event is not assured. A credit-rating downgrade could further prompt outflows, raise funding costs and restrict capital-markets access.

Stress or perceived weakness at other financial institutions can trigger industry-wide withdrawals, counterparty losses and volatility. Prior bank failures increased USBNA’s FDIC insurance assessments; further failures or deposit-insurance changes could lead to higher assessments, special charges or prepayments. A counterparty default, or inability to realize on collateral at adequate value, could also disrupt merchant processing, corporate trust, fund administration and other businesses.

Regulation, legal exposure and capital constraints

Extensive and changing banking supervision can raise compliance costs, constrain products and activities, lending, investments, capital distributions and acquisitions, and require prior approval. Shifting agency priorities, personnel and interpretations, court challenges and differing international rules add uncertainty. New requirements or supervisory downgrades may restrict expansion, require additional approvals, reduce product profitability or revenue, or constrain dividends and repurchases. Large banks may face stricter requirements than smaller institutions and nonbank competitors. Future capital or liquidity rules could require additional capital or liquid assets, divestitures or other balance-sheet changes; potential long-term-debt requirements could alter funding mix and pressure NII. Limits on interchange fees or eligible transactions could materially reduce fee revenue.

USB faces litigation, government claims and class actions whose damages or penalties may exceed recorded accruals. Supervisory scrutiny includes consumer protection, fees, mortgage and fair-lending practices, sales incentives, student lending, BSA/AML and sanctions. A single matter may prompt overlapping investigations; violations can bring substantial penalties, monitors, admissions, restrictions on business activities, customer losses and reputational damage. The filing cites a 2018 enforcement action against U.S. Bancorp and USBNA. Crypto and stablecoin activity adds KYC and transaction-monitoring complexity. Mortgage-loan sale representations and warranties may require repurchases or indemnification; servicing loans for others can create obligations for advances or reimbursements that may not be recoverable. Servicing-rule changes may require additional work without higher fees, while failures could cause contract termination, lost fees and reputational harm. Intellectual-property disputes may also generate costs, damages, licensing fees or limits on business activities.

Mortgage-market conditions can make mortgage banking revenue volatile. Mortgage servicing rights had a fair value of $3.2 billion at December 31, 2025. Falling rates may accelerate refinancing and reduce MSR value and earnings; weak housing markets may limit originations that could offset the decline. Reduced access to or purchases by government-sponsored enterprises could constrain mortgage funding and reduce origination and servicing revenue; potential GSE reforms remain uncertain.

Technology, operations and data

USB faces frequent cyberattacks and cannot ensure its controls will prevent increasingly sophisticated threats. AI-enabled attacks—including automated vulnerability discovery and convincing deepfakes or other social engineering—raise the threat. Breaches or technology failures at USB, financial-system participants or vendors may disrupt services, expose data, enable fraud, and lead to reimbursement, remediation, card-replacement and compliance costs, litigation, regulatory action, fines and brand damage. Investigations may take time, delaying remediation. Third-party breaches can also generate fraud losses on USBNA-issued cards.

The Company depends on employees, systems and vendors—including cloud, network, internet and payment providers—for high-volume processing and critical infrastructure. Outages, disasters, capacity constraints, control failures, fraud, processing errors or provider failures may interrupt operations and impair recovery; replacing providers can be costly and slow. Operational risk has increased with new technologies, remote and mobile work, transaction complexity and more sophisticated external actors, and system disruptions have adversely affected USB.

Models inform credit, market and other risk measurement, stress testing, fraud detection, reserves and valuation. Errors in design, assumptions, data, implementation or use—including AI-related bias, accuracy, reliability and explainability limitations—could cause poor decisions, unreliable reporting, customer harm or regulatory consequences. Deficiencies in data quality, timeliness or controls may impair risk management, compliance, operations and strategic decisions. Risk-management processes and oversight may fail to identify or mitigate exposures.

Competition, strategy and other risks

Fintechs, technology companies and embedded-finance providers may compete with lower costs or fewer regulatory constraints. Digital wallets, payments, digital assets, blockchain and generative AI require continued investment and may create operational challenges; unsuccessful launches, vendor dependence, higher vendor charges or investments that fail to deliver could divert resources and pressure margins or fee revenue. If USBNA cannot develop stablecoin technology meeting customer demand, deposits could decline. The GENIUS Act and fintech firms’ pursuit of national bank trust charters may intensify competition.

Failure to execute strategic initiatives or acquisitions could weaken growth and competitiveness. Acquisitions may face regulatory delays or conditions, including branch divestitures, and may not deliver expected benefits; integration could cause deposit or customer attrition, employee departures, technology disruption, added costs and management distraction. The pending BTIG acquisition depends on closing conditions and may distract employees or reduce morale; after closing, operations in additional non-U.S. jurisdictions would bring unfamiliar regulatory and enforcement risks. Expected benefits are not assured.

Reputation may be harmed by privacy or cybersecurity incidents, customer treatment and servicing practices, sales or compliance failures, employee conduct, community issues, unmet commitments, or differing stakeholder expectations on environmental, social and inclusion matters. Natural disasters, pandemics, terrorism, civil unrest, international hostilities and climate-related physical and transition risks may disrupt operations, damage collateral, increase insurance costs, weaken borrowers and raise expenses, credit losses or regulatory exposure. Finally, critical accounting estimates—including credit allowances, fair values, MSRs and income taxes—may differ materially from actual outcomes; tax-credit investments may lose benefits or face recapture if projects fail requirements or laws change. Competition for skilled employees and rising compensation costs may also affect expenses and execution.

Leadership transition and organization

Gunjan Kedia became U.S. Bancorp’s CEO in April 2025, after serving as President since May 2024. She is also a director and is scheduled to become Board Chairman in April 2026. Andrew Cecere is identified as Chairman and retired CEO, with the planned chair transition to Kedia.

Several senior leaders assumed expanded or revised responsibilities in 2024–2025. Stephen Philipson became Vice Chair in April 2025 and leads Wealth, Corporate, Commercial and Institutional Banking (WCIB). Mark Runkel became Vice Chair that month and leads Merchant and Institutional Payments, following his role as Chief Transformation Officer. John Stern also became Vice Chair in April 2025 and continues as CFO, a role he has held since September 2023.

Other leadership appointments include Courtney Kelso, who joined in February 2025 to lead Consumer and Small Business Payments; Adam Graves, who became Head of Enterprise Strategy and Administration in April 2025; and Sekou Kaalund, who has led Branch and Small Business Banking since joining in December 2022. Felicia La Forgia has led the Institutional Client Group since June 2024, while Arijit Roy has led Consumer and Business Banking Products since July 2024. In May 2025, Gregory Cunningham’s title and remit shifted from Chief Diversity Officer to Chief Community Impact and Inclusion Officer.

Oversight and governance

Key oversight roles include Jodi Richard, Vice Chair and Chief Risk Officer since October 2018, and Dilip Venkatachari, Chief Information and Technology Officer since 2018. The executive team reflects a mix of internal leadership continuity and external hires from financial services, technology, insurance and other sectors.

The Board comprises 13 directors, including Kedia, with committee responsibilities spanning audit, compensation and human resources, governance, risk management, and technology.