US Bancorp : March 31, 2026 U.S. Bancorp

Published: 2026-05-07 14:10:12 ET USB

Published on 05/07/2026 at 02:10 pm EDT

Background 3

Overview 3

Corporate Governance 3

Internal Capital Adequacy Assessment Process ("ICAAP") 4

Regulatory Capital Adequacy Ratios 4

Regulatory Capital Ratios 5

Stress Capital Buffer 5

Non-GAAP Capital Ratios 5

Supplementary Leverage Ratio 6

Credit Risk Mitigation 7

Counterparty Credit Risk of OTC Derivative Contracts, Repo-Style Transactions and Eligible Margin Loans 7

Securitization 9

Equity Securities Not Subject to Market Risk Rule 10

Market Risk 11

Credit Risk: General Disclosures 11

Forward-Looking Statements 19

Appendix A - Disclosure Matrix A1

Basel III regulatory capital rules established the definition of regulatory capital elements and minimum capital ratios, regulatory capital buffers above those minimums, a common equity tier 1 ratio, a supplementary leverage ratio and the rules for calculating risk-weighted assets. Basel III includes two comprehensive methodologies for calculating risk-weighted assets: 1) a general standardized approach and 2) a more risk-sensitive advanced approaches. Effective December 31, 2019, with the passing of the "Prudential Standards for Large Bank Holding Companies, Savings and Loan Holding Companies, and Foreign Banking Organizations" rule, U.S. Bancorp (the "Company") is classified as a Category III banking organization. Therefore, the Company is only required to utilize the general standardized approach of the regulatory capital requirements.

The Company is a financial services holding company headquartered in Minneapolis, Minnesota, serving millions of local, national and global customers. The Company is registered as a bank holding company under the Bank Holding Company Act of 1956 (the "BHC Act"), and has elected to be treated as a financial holding company under the BHC Act. The Company provides a full range of financial services, including lending and depository services, cash management, capital markets, and trust and investment management services. It also engages in credit card services, merchant and ATM processing, mortgage banking, insurance, brokerage and leasing.

This document, and certain of the Company's public filings, present the Pillar 3 Disclosures in compliance with Basel III as described in Subsections 61-63 of the Capital Adequacy-Basel III Final Rule (the "Rule"). The Company's 2025 Annual Report ("Annual Report") included in the Company's Form 10-K for the year ended December 31, 2025 ("Form 10-K") and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 ("Form 10-Q") filed with the Securities and Exchange Commission contain management's discussion of the overall corporate risk profile of the Company and related management strategies. The Pillar 3 Disclosures should be read in conjunction with the Annual Report, Form 10-K, Form 10-Q, and the Consolidated Financial Statements for Bank Holding Companies - FR Y-9C. The Company's Pillar 3 Disclosures Matrix (see Appendix A) specifies where the disclosures required by the Rule are located. The Pillar 3 Disclosures have not been audited by the Company's external auditors. The Rule applies only to the consolidated Company, with the exception that subsidiary depository institutions must disclose capital ratios.

Managing risks is an essential part of successfully operating a financial services company. The Company's Board of Directors has approved a risk management framework that establishes governance and risk management requirements for all risk-taking activities. This framework includes Company and business line risk appetite statements that set boundaries for the types and amount of risk that may be undertaken in pursuing business objectives and initiatives. The Board of Directors, primarily through its Risk Management Committee, oversees performance relative to the risk management framework, risk appetite statements, and other policy requirements.

The Executive Risk Committee ("ERC"), which is chaired by the Chief Risk Officer and includes the Chief Executive Officer and other members of the executive management team, oversees execution against the risk management framework and risk appetite statements. The ERC focuses on current and emerging risks, including strategic risk, by directing timely and comprehensive actions. Senior operating committees have also been established, each responsible for overseeing a specified category of risk.

The Company's most prominent risk exposures are credit, interest rate, market, liquidity, operational, compliance, strategic, and reputation. Credit risk is the risk of loss associated with a change in the credit profile or the failure of a borrower or counterparty to meet its contractual obligations. Interest rate risk is the current or prospective risk to earnings and capital, arising from the impact of changes in interest rates. Market risk is the risk associated with fluctuations in interest rates, foreign exchange rates, commodities and credit spreads that may result in changes in the values of financial instruments, such as trading securities, mortgage loans held for sale and mortgage servicing rights ("MSRs"). Liquidity risk is the risk that financial condition or overall safety and soundness is adversely affected by the Company's inability, or perceived inability, to meet its cash flow obligations in a timely and complete manner in either normal or stressed conditions. Operational risk is the risk to current or projected financial condition and resilience arising from inadequate or failed internal processes or systems, people (including human errors or misconduct), or adverse external events, including the risk of loss resulting from breaches in data security.

Operational risk can also include the risk of loss due to failures by third parties with which the Company does business. Compliance risk is the risk that the Company may suffer legal or regulatory sanctions, financial losses, and damage to its brand if it fails to adhere to compliance requirements and the Company's compliance policies.

Strategic risk is the risk to current or projected financial condition and resilience arising from adverse business decisions, poor implementation of business decisions, or lack of responsiveness to changes in the banking industry and operating environment. Reputation risk is the risk to current or projected financial condition and resilience arising from negative public opinion. In addition to the risks identified above, other risk factors exist that may impact the Company. Refer to the section entitled "Risk Factors" in the Annual Report for a detailed discussion of these factors.

The Company's Board of Directors and management-level governance committees are supported by a "three lines of defense" model for establishing effective checks and balances. The first line of defense, the business lines, manages risks in conformity with established limits and policy requirements. In turn, business line leaders and their risk officers establish programs to ensure conformity with these limits and policy requirements. The second line of defense, which includes the Chief Risk Officer's organization as well as policy and oversight activities of corporate support functions, translates risk appetite and strategy into actionable risk limits and policies. The second line of defense monitors first line of defense conformity with limits and policies and provides reporting and escalation of emerging risks and other concerns to senior management and the Risk Management Committee of the Board of Directors. The third line of defense, internal audit, is responsible for providing the Audit Committee of the Board of Directors and senior management with independent assessment and assurance regarding the effectiveness of the Company's governance, risk management, and control processes.

The Company's ICAAP is a component of its Basel Program. The Company manages its capital to multiple minimum thresholds and measures consistent with the Company's strategic objectives, business model and capital plan. Expectations of internal and external stakeholders are integral, and the capital goals and targets are calibrated considering internally developed models that ensure adequate coverage for all material quantitative and qualitative risks, minimum regulatory requirements, supervisory stress testing expectations and rating agency and counterparty perspectives.

The Company is committed to managing capital to maintain strong protection for depositors and creditors, and for maximum shareholder benefit in order to achieve the Company's broader goals, which are as follows:

Ensure the Company's safety and soundness;

Maintain access to the debt and capital markets so the Company may continue to provide exceptional service to its customers and fulfill, without interruption, its obligations as a credit intermediary;

Serve as a source of managerial and financial strength to its subsidiaries; and

Ensure that the Company continues to be in a position to conduct its business in an environment of economic or financial stress.

The Company's ICAAP, the identification of material risks and how those material risks inform capital adequacy, is conducted via the Company's stress testing program. During this process, the Company's material risks, informed by the risk identification process, are critical to the scenario design process and the development of the Company's internal stress scenario. The results of these forward-looking scenarios inform the Company's regulatory and internally defined capital adequacy relative to the Company's risk profile and risk appetite.

The Company also manages its capital to exceed regulatory capital requirements for well-capitalized financial institutions. The Company's applicable capital requirement for regulatory and supervisory purposes is based upon the ratios determined under the standardized approach.

Banking regulators define capital requirements for banks and financial services holding companies expressed in the form of a common equity tier 1 capital ratio, a tier 1 capital ratio, a total risk-based capital ratio, a leverage ratio and, for advanced approaches banks and Category III banks, a supplementary leverage ratio (defined as tier 1 capital divided by the total leverage exposure inclusive of both on- and off-balance sheet exposures). The current minimum

required levels for these ratios are 4.5 percent, 6.0 percent, 8.0 percent, 4.0 percent, and 3.0 percent, respectively, while the requirements for an insured depository institution to be considered "well-capitalized" are 6.5 percent, 8.0 percent, 10.0 percent, 5.0 percent, and 3.0 percent, respectively. Using the standardized approach, the Company's common equity tier 1 ratio was 10.8 percent at March 31, 2026.

A summary of the capital ratios under the standardized approach is shown in Table 1.

(Dollars in Millions, Unaudited)

U.S. Bancorp

U.S. Bank National Association

March 31, 2026 December 31, 2025

U.S. Bancorp

Common Equity Tier 1 capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $52,648 $51,665

Tier 1 capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,899 58,917

Total risk-based capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69,163 68,087

Common Equity Tier 1 capital as a percent of risk-weighted assets . . . . . . . . . . . . 10.8 % 10.8 % Tier 1 capital as a percent of risk-weighted assets . . . . . . . . . . . . . . . . . . . . . . . . . 12.3 % 12.3 %

Tier 1 risk-based capital as a percent of adjusted quarterly

average assets (leverage ratio) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.8 % 8.7 %

Tier 1 risk-based capital as a percent of total on and off balance sheet

average average exposures (supplementary leverage ratio) . . . . . . . . . . . . . . . . 7.2 % 7.1 % Total risk-based capital as a percent of risk-weighted assets . . . . . . . . . . . . . . . . . 14.2 % 14.2 %

Risk-Weighted Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $487,958 $480,382

$61,759 $61,376

62,203 61,820

71,763 71,277

12.9 % 13.0 %

13.0 % 13.1 %

9.4 % 9.4 %

7.6 % 7.6 %

15.0 % 15.1 %

$479,552 $471,419

The Company's total shareholders' equity was $65.8 billion at March 31, 2026, compared with $65.2 billion at December 31, 2025.The increase was primarily the result of corporate earnings, partially offset by dividends paid. In compliance with the Rule, the Company reviewed the aggregate amount of surplus capital of insurance subsidiaries included in the regulatory capital of the consolidated group and has determined it was not material. Refer to "Management's Discussion and Analysis-Capital Management" in the Annual Report and Form 10-Q for further discussion on capital management.

A company's Stress Capital Buffer ("SCB") is added to the minimum capital requirement noted above for the risk-based capital ratios and represents the level of capital where restrictions on distributions and discretionary bonuses begin. The SCB is calculated based on 1) a decrease in the Company's common equity tier 1 capital under the severely adverse scenario in the Federal Reserve Board's ("FRB") annual Dodd-Frank Act Stress Tests ("DFAST"), plus 2) four quarters of planned common stock dividends as a percentage of risk-weighted assets, subject to a floor of 2.5 percent. As of March 31, 2026, the Company was subject to an SCB requirement of 2.6 percent based on its 2025 stress results.

Any restrictions on distributions and discretionary bonuses would be based on a percentage of the Company's "eligible retained income." The Company calculates "eligible retained income" in accordance with regulatory requirements, which is defined as the greater of (1) the banking organization's net income for the four preceding calendar quarters, net of any distributions and associated tax effects not already reflected in net income, and (2) the average of the banking organization's net income over the preceding four quarters. The Company's eligible retained income at March 31, 2026, was $3.6 billion based on the Company's income net of distributions. The Company is not subject to payout limitations, including limitations on capital distributions and discretionary bonus payments.

In addition to capital ratios defined by banking regulators, the Company considers various other measures when evaluating capital utilization and adequacy, including: tangible common equity to tangible assets and tangible common equity to risk-weighted assets. These capital measures are viewed by management as useful additional methods of evaluating the Company's utilization of its capital held and the level of capital available to withstand unexpected negative market or economic conditions. Additionally, presentation of these measures allows investors, analysts and banking regulators to assess the Company's capital position and use of capital relative to other financial services companies. These capital measures are not defined in generally accepted accounting principles ("GAAP") or in banking regulations. As a result, these capital measures disclosed by the Company may be considered non-GAAP financial measures.

(Unaudited) March 31, 2026 December 31, 2025

Common equity to assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.4

Tangible common equity to tangible assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.7

Tangible common equity to risk-weighted assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.4

Refer to "Management's Discussion and Analysis-Non-GAAP Financial Measures" in the Annual Report and Form 10-Q for further discussion on these non-GAAP capital ratios and a reconciliation to measures calculated in accordance with GAAP.

Advanced approaches banks and Category III banks are required to report the Supplementary Leverage Ratio ("SLR"). As a Category III banking organization, the Company is required to maintain an SLR of at least 3.0 percent. At March 31, 2026, the Company's and U.S. Bank National Association's SLR exceeded the requirement with ratios of 7.2 and 7.6 percent, respectively, compared to 7.1 percent and 7.6 percent, respectively, at December 31, 2025.

U.S. Bancorp

U.S. Bank National

Association

(Dollars in millions, Unaudited)

March 31, 2026

Summary Comparison of Accounting Assets and Total Leverage Exposure

Total Consolidated Assets as reported in published financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjustment for investments in banking, financial, insurance or commercial entities that are consolidated for accounting purposes but outside the scope of regulatory consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$700,998

$683,380

Adjustments for fiduciary assets recognized on balance sheet but excluded from total leverage exposure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Adjustment for derivative exposures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,190

24,090

Adjustment for repo-style transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,995

1,997

Adjustment for off-balance sheet exposures (credit equivalent) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

131,645

131,559

Less Other adjustments

Adjustments for deductions from Tier 1 Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13,551

13,386

Adjustments for frequency calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,565

11,687

Total Leverage Exposure banking organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

834,712

815,953

Supplementary Leverage Ratio On-balance sheet exposures

On-balance sheet assets (excluding on-balance sheet assets for repo-style transactions and derivative exposures, but including cash collateral

received in derivative transactions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

683,433

671,693

LESS: Deductions from common equity tier 1 capital and additional tier 1 capital (report as a positive value) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13,551

13,386

Total on-balance sheet exposures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

669,882

658,307

Derivative exposures

Replacement cost for derivative exposures (net of cash variation margin) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,906

3,949

Add-on amounts for potential future exposure (PFE) for derivatives exposures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,806

10,663

Gross-up for cash collateral posted if deducted from the on-balance sheet assets, except for cash variation margin. . . . . . . . . . . . . . . . . . . . . . . .

LESS: Deductions of receivable assets for cash variation margin posted in derivatives transactions, if included in on-balance sheet assets (report as a positive value) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

159

LESS: Exempted CCP leg of client-cleared transactions (report as a positive value). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Effective notional principal amount of sold credit protection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,319

LESS: Effective notional principal amount offsets and PFE adjustments for sold credit protection (report as a positive value). . . . . . . . . . . . . . . .

Total derivative exposures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,190

24,090

Repo-style transactions

On-balance sheet assets for repo-style transactions, include the gross value of receivables for reverse repurchase transactions. . . . . . . . . . . . .

LESS: Reduction of the gross value of receivables in reverse repurchase transactions by cash payables in repurchase transactions under netting agreements (report as a positive value) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

56,674

47,928

1,941

Counterparty credit risk for all repo-style transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

193

Exposure for repo-style transactions where a banking organization acts as an agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total exposures for repo-style transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,995

1,997

Other off-balance sheet exposures

Off-balance sheet exposures at gross notional amounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

462,868

462,689

LESS: Adjustments for conversion to credit equivalent amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

331,223

331,130

Off-balance sheet exposures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

131,645

131,559

Capital and total leverage exposures

Tier 1 Capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

59,899

62,203

Total leverage exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . .

$834,712

$815,953

Supplementary Leverage Ratio

Supplementary Leverage Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2% 7.6%

Risk-weighted assets ("RWA") represent an institution's assets and off-balance sheet exposures, weighted according to the risk associated with each exposure category. The risk-weighted asset calculation is used in determining the institution's capital requirements.

The standardized approach defines a risk-weight to assign to each credit exposure.

Standardized approach RWA was $488.0 billion at March 31, 2026, compared with $480.4 billion at December 31, 2025. The increase in RWA was primarily driven by an increase in other assets, corporate exposures, off-balance sheet commitments, securitization exposures and derivatives, partially offset by a decrease in equity exposures.

Table 4 Risk-Weighted Assets

(Dollars in Millions, Unaudited)

March 31, 2026

December 31, 2025

$ Change

Percent Change

Credit risk

Exposures to Sovereign Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ -

- %

Exposures to Depository Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

738

763

(25)

(3.3)

PSE Exposures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,825

18,151

(326)

(1.8)

Corporate Exposures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

146,792

145,267

1,525

1.0

Residential Mortgage Exposures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

74,071

73,551

520

0.7

HVCRE loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

608

542

12.2

Past Due Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,482

2,614

(132)

(5.0)

Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

115,919

113,020

2,899

2.6

Cleared Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Default Fund Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

260

258

N/M

Unsettled Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37.5

Securitization Exposures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,742

7,646

1,096

14.3

Equity Exposures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,423

18,186

(763)

(4.2)

Off-balance Sheet Exposures

Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,669

7,193

476

6.6

Off-balance sheet commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

78,655

77,436

1,219

1.6

Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,138

7,207

931

12.9

Securitizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,967

3,396

(429)

(12.6)

Other Off-balance Sheet Exposures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,971

2,640

331

12.5

Market risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,583

4,717

(134)

(2.8)

Excess Allowance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,896) (1,957) 61 (3.1)

Total risk-weighted assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $487,958 $480,382 $7,576 1.6 %

The Company takes into account the risk-reducing effects of collateral in support of exposures including, but not limited to, cash, working capital, depreciable assets and real estate. Unsecured exposures generally result in larger losses compared to secured exposures. Credit derivatives and other instruments are used to manage the credit risk of certain lending exposures and are subject to credit risk associated with the counterparties to the contracts.

Credit risk mitigants, including credit derivatives, are valued to monitor and ensure they continue to provide the secure repayment source anticipated at the time they were entered into. Company policy prescribes the frequency of valuation based on the volatility of the collateral. Valuation methods range from the use of market indices to individual professional inspection.

Counterparty exposure arises from OTC derivatives, repurchase agreements, securities lending and borrowing and other similar products and activities. The exposure amount depends on the value of underlying market factors (e.g., interest rates, foreign exchange rates and commodity prices), which can be volatile and uncertain in nature.

The Company uses the current and potential future exposure to calculate exposure at default ("EAD") and determine risk-weighted assets and capital requirements for counterparty risk. EAD is calculated for each counterparty with an International Swaps and Derivatives Association ("ISDA") Master Agreement with the Company using the collateral haircut approach in the current exposure methodology.

For further information on counterparty credit risk, refer to the "Use of Derivatives to Manage Interest Rate and Other Risks" subsection in the "Management's Discussion and Analysis" section of the Annual Report and Form 10-Q.

Collateral To calculate a counterparty's net risk position for counterparty credit risk, the Company revalues all financial instruments and associated collateral positions on a daily basis. Collateral positions are monitored by a dedicated group who manages a process to ensure calls for collateral and exposure reductions are made promptly. Processes exist for the resolution of trades where the level of collateral is disputed, or the collateral called is not received.

Eligible collateral types are documented by a CSA to the ISDA Master Agreement and are controlled under the Company's general credit policies. A valuation haircut policy reflects the fact collateral may fall in value between the date the collateral is called and the date of liquidation or enforcement. In practice, most of the Company's collateral held as credit risk mitigation under a CSA is either cash or U.S. government securities.

Credit ratings downgrade Certain CSAs to master arrangements provide for rating dependent triggers requiring additional collateral if a counterparty's rating is downgraded. The Company also enters into master arrangements providing for termination upon a party's rating downgrade.

The Company analyzes and monitors its potential contingent payment obligations resulting from a rating downgrade in its stress testing approach for liquidity risk on an ongoing basis. At March 31, 2026, the additional collateral required to be posted for a three-notch downgrade of U.S. Bank National Association would be $57.3 million. No additional collateral would be required for a three-notch downgrade of the parent company, U.S. Bancorp.

The following table summarizes the netting and collateral positions of the Company's derivatives and securities financing transactions ("SFT") using the Current Exposure Method. As defined by the Rule, the gross current credit exposure is calculated as the greater of the positive mark-to-market of the derivative or zero (asset derivatives).

(Dollars in Millions, Unaudited)

March 31, 2026

December 31, 2025

Derivatives

Gross positive fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$7,677

$6,852

Netting benefit (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,431

3,151

Net derivatives credit exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$4,246

$3,701

Securities financing transactions

Gross positive fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$15,917

$20,088

Collateral held for risk mitigation (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6,865)

(6,048)

Excess collateral (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(66)

184

Net SFT credit exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$8,986

$14,224

Represents netting of derivative asset and liability balances, and related collateral, with the same counterparty subject to master netting agreements.

Collateral is primarily cash or government securities.

Certain counterparties have provided collateral in excess of the fair value of the related contracts.

The distribution of gross current credit exposure is shown below:

(Dollars in Millions, Unaudited) March 31, 2026 December 31, 2025

Derivatives

Gross Current

Credit Exposure

Exposure at

Default (a)

Gross Current Credit

Exposure

Exposure at

Default (a)

Credit derivatives (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$966

$971

Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,010

7,318

4,113

6,239

Foreign exchange forwards and options . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,607

3,716

2,715

3,474

Mortgage derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

101

Total derivative gross current credit exposure (c) . . . . . . . . . . . . . . . . . . .

$7,677

$12,100

$6,852

$10,706

Securities financing transactions

Repo-Style Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$15,917

$4,208

$20,058

$4,207

Eligible margin loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total SFT gross current credit exposure (c) . . . . . . . . . . . . . . . . . . . . . . . .

$15,917

$4,208

$20,088

$4,237

In addition to the current fair value for asset derivatives, EAD includes amounts for the potential future exposure which is calculated on both asset and liability derivatives.

The notional amount of credit derivatives was $17.8 billion at March 31, 2026 and $16.9 billion at December 31, 2025.

The gross positive fair value of derivative contracts averaged $7.4 billion for the first quarter of 2026 and $6.9 billion for the fourth quarter of 2025. The gross positive fair value of SFT contracts averaged $7.4 billion for the first quarter of 2026 and $6.8 billion for the fourth quarter of 2025.

Securitization exposures held in the banking book include asset-backed securities, loans and lines of credit. The Company has transferred credit risk of certain lending portfolios synthetically using derivatives and recognizes the credit risk mitigation benefits accordingly.

The Company calculates the regulatory capital requirement for securitization exposures in accordance with the hierarchy of approaches prescribed in the Rule. The Company utilizes the Simplified Supervisory Formula Approach ("SSFA") to determine RWA for the majority of its securitization exposures. The SSFA framework considers the Company's seniority in the securitization structure and risk factors inherent in the underlying assets.

As presented in Table 6 below, the Company's total securitization exposure at March 31, 2026, was $54.9 billion compared to $53.4 billion at December 31, 2025.

Securitizations by exposure type are shown below:

March 31, 2026 December 31, 2025

(Dollars in Millions, Unaudited)

On Balance Sheet

Exposure

Off Balance

Sheet Exposure Total Exposure

On Balance Sheet Exposure

Off Balance

Sheet Exposure Total Exposure

Mortgage-backed securities. . . . . . . . . . . . . . . . . . . . .

Asset-backed securities. . . . . . . . . . . . . . . . . . . . . . . . Other (b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,464

32,687

-15,776

6,464

48,463

6,488

29,609

-17,283

6,488

46,892

Total securitization exposure. . . . . . . . . . . . . . . . . .

$39,151

$15,776

$54,927

$36,097

$17,283

$53,380

Securitizations by capital treatment and underlying exposure type are shown below:

March 31, 2026 December 31, 2025

(Dollars in Millions, Unaudited)

Notional Amount

SSFA Risk Weighted Assets

1250% Risk Weighted

Notional Amount

SSFA Risk Weighted Assets

1250% Risk Weighted

Mortgage-backed securities . . . . . . . . . . . . . . . . . . . .

Asset-backed securities . . . . . . . . . . . . . . . . . . . . . . .

6,464

1,294

6,488

1,296

Other (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48,463

10,460

46,892

9,805

Total securitization exposure . . . . . . . . . . . . . . . . .

$54,927

$11,754

$25

$53,380

$11,101

$29

Securitizations by capital treatment and risk-weight bands are summarized below:

March 31, 2026 December 31, 2025

(Dollars in Millions, Unaudited)

SSFA Risk Notional Amount Weighted Assets

1250% Risk Weighted

Capital impact of RWA (c)

Notional Amount

SSFA Risk Weighted Assets

1250% Risk Weighted

Capital impact of RWA (c)

Securitizations

Zero to 250% risk weighting . . . . . . . . . . . . . . . . .

$54,844 $10,741

$859

$53,354

$10,824

$866

251% to 500% risk weighting . . . . . . . . . . . . . . . .

- -

501% to 1250% risk weighting . . . . . . . . . . . . . . .

83 1,012

269

Resecuritizations

Zero to 250% risk weighting . . . . . . . . . . . . . . . . .

251% to 500% risk weighting . . . . . . . . . . . . . . . . .

501% to 1250% risk weighting . . . . . . . . . . . . . . . .

Total securitization exposures . . . . . . . . . . . . . . . . . .

$54,927

$11,754

$25

$942

$53,380

$11,101

$29

$890

Table related to the Company as an investor/originator in the securitization.

Includes loans, lines of credit, and liquidity facilities.

The capital impact of RWA is calculated by multiplying risk weighted assets by the minimum total risk-based capital ratio of 8%.

$24.8 billion, with $18.8 billion in individual equities and $6.0 billion in equity funds at March 31, 2026. The majority of the individual equity investments are related to the Company's community reinvestment activities, including tax-advantaged investments made through U.S. Bancorp Impact Finance. The Company uses the Simple Risk-Weight Approach for its individual equity securities.

Equity exposures in equity funds consist of Bank Owned Life Insurance ("BOLI"), private equity, money market and other equity funds. The Company uses the Full Look-Through Approach for BOLI assets in separate and hybrid accounts. Investment guidelines specify objectives and constraints for separate and hybrid account BOLI investment funds, requirements, and duration parameters. In compliance with these guidelines, underlying investment exposures include Treasury, agency, asset-backed, and mortgage-backed securities and corporate notes and bonds.

Non-marketable equity securities are generally recorded either at historical cost or by using the equity method. Details of the Company's accounting policy for equity investments and the valuation of financial instruments are provided in Note 1-Significant Accounting Policies in the Annual Report.

Marketable equity securities are generally recorded as available-for-sale and carried at fair value with unrealized net gains or losses reported within accumulated other comprehensive income (loss) in shareholders' equity. For regulatory capital purposes unrealized gains are excluded from tier 1 capital.

Disclaimer

U.S. Bancorp published this content on May 07, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 07, 2026 at 18:09 UTC.