US Bancorp : Q1 2025 U.S. Bancorp Earnings Conference Call Earnings Release

Published: 2025-04-16 06:49:08 ET USB

1Q25 Key Financial Data

PROFITABILITY METRICS

1Q25

4Q24

1Q24

Return on average assets (%)

1.04

.98

.81

Return on average common equity (%)

12.3

12.1

10.0

Return on tangible common equity (%) (a)

17.5

17.4

15.1

Net interest margin (%)

2.72

2.71

2.70

Efficiency ratio (%) (a)

60.8

61.5

66.4

Tangible efficiency ratio (%) (a)

59.1

59.5

64.2

INCOME STATEMENT (b)

1Q25

4Q24

1Q24

Net interest income (taxable-equivalent basis)

$4,122

$4,176

$4,015

Noninterest income

$2,836

$2,833

$2,700

Noninterest expense

$4,232

$4,311

$4,459

Net income attributable to U.S. Bancorp

$1,709

$1,663

$1,319

Diluted earnings per common share

$1.03

$1.01

$.78

Dividends declared per common share

$.50

$.49

BALANCE SHEET (b)

1Q25

4Q24

1Q24

Average total loans

$379,028

$375,655

$371,070

Average total deposits

$506,534

$512,313

$503,061

Net charge-off ratio (%)

.59

.60

.53

Book value per common share (period end)

$34.16

$33.19

$31.26

Basel III standardized CET1 (%) (c)

10.8

10.6

10.0

1Q25 Financial Highlights

CEO Commentary

"In the first quarter we reported diluted earnings per share of $1.03 and delivered a return on tangible common equity of 17.5%. We managed expenses with discipline and delivered 270 basis points of positive operating leverage on an adjusted basis - our third consecutive quarter of year- over-year growth in revenues outpacing expenses. Total net revenue of approximately $7.0 billion was supported by slight margin expansion and year- over-year growth in fee revenue of 5%. Importantly, asset quality and capital levels are strong. This quarter, our net charge-off ratio improved modestly and common equity tier 1 capital ratio increased by 20 basis points to 10.8%. As we navigate macro economic uncertainties, we will continue to manage the bank with strong risk management capabilities. As I step into the role as Chief Executive Officer, I am excited to lead this exceptional banking franchise and confident in our ability to deliver strong and consistent financial results. I would like to thank my U.S. Bank colleagues for their dedication to our company. As we collectively mourn the loss of our dear friend and colleague, Terry Dolan, the U.S. Bank family truly appreciates the outpouring of support and heartfelt condolences we've received from far and wide. Our prayers continue to be with his family and friends during this most difficult time.

Finally, on behalf of the U.S. Bank team, I want to thank Andy Cecere for his 40+ years of thoughtful, dedicated, and steady leadership."

- Gunjan Kedia, President and CEO, U.S. Bancorp

Business and Other Highlights

U.S. Bank personal loans now available through State Farm

In the latest expansion of the State Farm and U.S. Bank alliance, State Farm customers can now apply for U.S. Bank personal loans for up to $50,000 working directly with their agent. To date, more than 900,000 State Farm customers have accessed a suite of U.S. Bank products including deposits, co- branded credit cards and business banking products and services. This is the latest expansion of the collaboration between U.S. Bank and State Farm, which began in 2020.

U.S. Bank introduces Spend Management for business owners U.S. Bank has introduced a new Spend Management platform to help businesses monitor, track and control their card-basedspending. This all-in-oneplatform is available through the bank's full portfolio of business credit cards, giving business owners an alternative to using multiple tools. Spend Management gives owners the ability to easily manage how employees use cards.

U.S. Bank Shield™ Visa® card offers 0 percent intro APR for 24 billing cycles

U.S. Bank announced the launch of the U.S. Bank Shield™ Visa® Card, a no annual fee card that provides great value for consumers. The card offers a market-leading introductory 0% APR on purchases and balance transfers for the first 24 billing cycles, and a variable APR thereafter. The card also includes an array of purchase protection and cash-back benefits.

U.S. Bank introduces all-in-one business checking plus payments acceptance

U.S. Bank has launched a premier all-in-one checking account combined with payments acceptance capabilities for small businesses, called Business Essentials. The account enables businesses to accept credit card payments with free same-day access to their funds and a free mobile card reader, in addition to checking with unlimited digital transactions and no monthly maintenance fee.

Investor contact: George Andersen, [email protected] | Media contact: Jeff Shelman, [email protected]

U.S. Bancorp First Quarter 2025 Results

INCOME STATEMENT HIGHLIGHTS

($ in millions, except per share data)

ADJUSTED (a) (b)

Percent Change

1Q25 vs

2025

2024

4Q24

1Q24

2025

2024

4Q24

1Q24

Net interest income

$4,092

$4,146

$3,985

(1.3)

2.7

$4,092

$4,146

$3,985

(1.3)

2.7

Taxable-equivalent adjustment

Net interest income (taxable-equivalent basis)

4,122

4,176

4,015

(1.3)

2.7

4,122

4,176

4,015

(1.3)

2.7

Noninterest income

2,836

2,833

2,700

5.0

2,836

2,833

2,700

5.0

Total net revenue

6,958

7,009

6,715

(.7)

3.6

6,958

7,009

6,715

(.7)

3.6

Noninterest expense

4,232

4,311

4,459

(1.8)

(5.1)

4,232

4,202

4,194

Income before provision and income taxes

2,726

2,698

2,256

1.0

20.8

2,726

2,807

2,521

(2.9)

8.1

Provision for credit losses

537

560

553

(4.1)

(2.9)

537

560

553

(4.1)

(2.9)

Income before taxes

2,189

2,138

1,703

2.4

28.5

2,189

2,247

1,968

(2.6)

11.2

Income taxes and taxable-equivalent

adjustment

473

468

377

1.1

25.5

473

495

443

(4.4)

6.8

Net income

1,716

1,670

1,326

2.8

29.4

1,716

1,752

1,525

(2.1)

12.5

Net (income) loss attributable to noncontrolling

interests

(7)

Net income attributable to U.S. Bancorp

$1,709

$1,663

$1,319

2.8

29.6

$1,709

$1,745

$1,518

(2.1)

12.6

Net income applicable to U.S. Bancorp common

shareholders

$1,603

$1,581

$1,209

1.4

32.6

$1,603

$1,662

$1,407

(3.5)

13.9

Diluted earnings per common share

$1.03

$1.01

$.78

2.0

32.1

$1.03

$1.07

$.90

(3.7)

14.4

Net income attributable to U.S. Bancorp was $1,709 million for the first quarter of 2025, $390 million higher than the $1,319 million for the first quarter of 2024 and $46 million higher than the $1,663 million for the fourth quarter of 2024. Diluted earnings per common share was $1.03 in the first quarter of 2025, compared with $0.78 in the first quarter of 2024 and $1.01 in the fourth quarter of 2024. The first quarter of 2024 included notable items of $199 million or ($0.12) per diluted common share. The fourth quarter of 2024 included notable items of $82 million or ($0.06) per diluted common share. Excluding the impact of prior period notable items, net income attributable to U.S. Bancorp for the first quarter of 2025 was $191 million higher than the first quarter of 2024 and $36 million lower than the fourth quarter of 2024.

The increase in net income attributable to U.S. Bancorp year-over-year was primarily due to higher total net revenue, lower noninterest expense and lower provision for credit losses. Excluding notable items in the prior year quarter, net income attributable to U.S. Bancorp in the first quarter of 2025 increased 12.6 percent compared with the first quarter of 2024. Net interest income increased 2.7 percent on a year-over-year taxable-equivalent basis, due to the mix of earning assets, fixed asset repricing and modest loan growth, partially offset by deposit mix. The net interest margin increased to 2.72 percent in the first quarter of 2025 from 2.70 percent in the first quarter of 2024, driven by factors described above, partially offset by higher average earning assets. Noninterest income increased 5.0 percent compared with a year ago driven by higher payment services revenue, trust and investment management fees, and other revenue. Noninterest expense decreased 5.1 percent primarily due to lower compensation and employee benefits and the notable items in the prior year quarter, partially offset by higher marketing and business development expense, technology and communications expense and other noninterest expense. Excluding notable items in the prior year quarter, noninterest expense in the first quarter of 2025 increased 0.9 percent compared with the first quarter of 2024. The provision for credit losses decreased $16 million (2.9 percent) compared with the first quarter of 2024, largely driven by improved credit quality and portfolio mix.

U.S. Bancorp First Quarter 2025 Results

Net income attributable to U.S. Bancorp increased on a linked quarter basis primarily due to lower noninterest expense driven by notable items in the fourth quarter of 2024 and lower provision for credit losses, partially offset by a decrease in total net revenue. Excluding notable items in the fourth quarter of 2024, net income attributable to U.S. Bancorp in the first quarter of

2025 decreased 2.1 percent on a linked quarter basis. Net interest income decreased 1.3 percent on a linked quarter taxable- equivalent basis primarily driven by fewer days in the quarter and deposit seasonality. The net interest margin increased to 2.72 percent in the first quarter of 2025 from 2.71 percent in the fourth quarter of 2024, driven by lower average earning assets. Noninterest income in the first quarter of 2025 increased 0.1 percent from the fourth quarter of 2024 primarily due to higher mortgage banking revenue and capital markets revenue, partially offset by lower payment services revenue and lower trust and investment management fees. Noninterest expense in the first quarter of 2025 decreased by 1.8 percent from the fourth quarter of 2024 primarily due to fourth quarter 2024 notable items and lower professional services expense, partially offset by higher compensation and employee benefits expense, marketing and business development expense, and other noninterest expense. Excluding notable items in the fourth quarter of 2024, noninterest expense increased 0.7 percent on a linked quarter basis. The provision for credit losses decreased $23 million (4.1 percent) compared with the fourth quarter of 2024, largely driven by lower commercial real estate net charge-offs.

U.S. Bancorp First Quarter 2025 Results

NET INTEREST INCOME

(Taxable-equivalent basis; $ in millions)

Change

1Q25 vs

1Q 2025

4Q 2024

1Q 2024

4Q24

1Q24

Components of net interest income

Income on earning assets

7,546

7,862

7,795

(316)

(249)

Expense on interest-bearing liabilities

3,424

3,686

3,780

(262)

(356)

Net interest income

4,122

4,176

4,015

(54)

107

Average yields and rates paid

Earning assets yield

4.99

5.10

5.25

(.11) %

(.26) %

Rate paid on interest-bearing liabilities

2.75

2.91

3.12

(.16)

(.37)

Gross interest margin

2.24

2.19

2.13

.05

.11

Net interest margin

2.72

2.71

2.70

.01

.02

Average balances

Investment securities (a)

$171,178

$171,325

161,236

(147)

9,942

Loans

379,028

375,655

371,070

3,373

7,958

Interest-bearing deposits with banks

43,735

50,368

50,903

(6,633)

(7,168)

Other earning assets

14,466

13,911

10,924

555

3,542

Earning assets

610,230

614,268

596,135

(4,038)

14,095

Interest-bearing liabilities

504,023

504,439

487,351

(416)

16,672

(a) Excludes unrealized gain (loss)

Net interest income on a taxable-equivalent basis in the first quarter of 2025 was $4,122 million, an increase of $107 million (2.7 percent) from the first quarter of 2024. The increase was primarily due to the mix of earning assets, fixed asset repricing and modest loan growth, partially offset by deposit mix. Average earning assets were $14.1 billion (2.4 percent) higher than the first quarter of 2024, reflecting increases of $9.9 billion (6.2 percent) in average investment securities due to balance sheet repositioning and liquidity management, $8.0 billion (2.1 percent) in average total loans and $3.5 billion (32.4 percent) in other earning assets, partially offset by a decrease of $7.2 billion (14.1 percent) in average interest-bearing deposits with banks.

Net interest income on a taxable-equivalent basis decreased $54 million (1.3 percent) on a linked quarter basis primarily driven by fewer days in the quarter and deposit seasonality. Average earning assets were $4.0 billion (0.7 percent) lower on a linked quarter basis, reflecting decreases of $6.6 billion (13.2 percent) in average interest-bearing deposits with banks and $1.2 billion (39.4 percent) in loans held for sale, partially offset by an increase of $3.4 billion (0.9 percent) in average total loans.

The net interest margin in the first quarter of 2025 was 2.72 percent, compared with 2.70 percent in the first quarter of 2024 and

2.71 percent in the fourth quarter of 2024. The increase in the net interest margin from the prior year was driven by factors mentioned above, partially offset by higher average earning assets. The increase in the net interest margin from the prior quarter was driven by lower average earning assets.

U.S. Bancorp First Quarter 2025 Results

AVERAGE LOANS

($ in millions)

Percent Change

1Q25 vs

1Q 2025

4Q 2024

1Q 2024

4Q24

1Q24

Commercial

$135,931

$131,180

$126,602

3.6

7.4

Lease financing

4,199

4,204

4,165

(.1)

Total commercial

140,130

135,384

130,767

3.5

7.2

Commercial mortgages

38,624

39,308

41,545

(1.7)

(7.0)

Construction and development

10,266

10,563

11,492

(2.8)

(10.7)

Total commercial real estate

48,890

49,871

53,037

(2.0)

(7.8)

Residential mortgages

118,844

118,406

115,639

2.8

Credit card

29,404

29,438

27,942

(.1)

5.2

Retail leasing

3,990

4,035

4,082

(1.1)

(2.3)

Home equity and second mortgages

13,542

13,446

12,983

4.3

Other

24,228

25,075

26,620

(3.4)

(9.0)

Total other retail

41,760

42,556

43,685

(1.9)

(4.4)

Total loans

$379,028

$375,655

$371,070

2.1

Average total loans for the first quarter of 2025 were $8.0 billion (2.1 percent) higher than the first quarter of 2024. The increase was primarily due to higher total commercial loans (7.2 percent), residential mortgages (2.8 percent) and credit card loans (5.2 percent), partially offset by lower total commercial real estate loans (7.8 percent) and total other retail loans (4.4 percent). The increase in commercial loans was primarily due to growth in loans to financial institutions. The increase in residential mortgages was primarily driven by originations. The increase in credit card loans was primarily driven by customer account growth and higher spend volume. The decrease in commercial real estate loans was primarily due to loan workout activities and payoffs exceeding a reduced level of new originations. The decrease in other retail loans was primarily due to lower automobile loans.

Average total loans were $3.4 billion (0.9 percent) higher than the fourth quarter of 2024. The increase was primarily due to higher total commercial loans (3.5 percent) and residential mortgages (0.4 percent), partially offset by lower total commercial real estate loans (2.0 percent) and total other retail loans (1.9 percent). Linked quarter changes were primarily driven by similar factors as the year-over-year changes.

U.S. Bancorp First Quarter 2025 Results

AVERAGE DEPOSITS

($ in millions)

Percent Change

1Q25 vs

1Q 2025

4Q 2024

1Q 2024

4Q24

1Q24

Noninterest-bearing deposits

$79,696

$82,909

$84,787

(3.9)

(6.0)

Interest-bearing savings deposits

Interest checking

125,651

125,111

125,011

Money market savings

195,442

206,557

196,502

(5.4)

(.5)

Savings accounts

50,271

41,200

41,645

22.0

20.7

Total savings deposits

371,364

372,868

363,158

(.4)

2.3

Time deposits

55,474

56,536

55,116

(1.9)

Total interest-bearing deposits

426,838

429,404

418,274

(.6)

2.0

Total deposits

$506,534

$512,313

$503,061

(1.1)

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

Average total deposits decreased $5.8 billion (1.1 percent) from the fourth quarter of 2024. Average noninterest-bearing deposits decreased $3.2 billion (3.9 percent) reflecting balance decreases within Wealth, Corporate, Commercial and Institutional Banking and Consumer and Business Banking. Average total savings deposits decreased $1.5 billion (0.4 percent) driven by decreases within Wealth, Corporate, Commercial and Institutional Banking, partially offset by increases in Consumer and Business Banking. Average time deposits were $1.1 billion (1.9 percent) lower on a linked quarter basis due to decreases within Wealth, Corporate, Commercial and Institutional Banking and Consumer and Business Banking.

U.S. Bancorp First Quarter 2025 Results

NONINTEREST INCOME

($ in millions)

Percent Change

1Q25 vs

2025

2024

4Q24

1Q24

Card revenue

$398

$433

$392

(8.1)

1.5

Corporate payment products revenue

189

191

184

(1.0)

2.7

Merchant processing services

415

419

401

(1.0)

3.5

Trust and investment management fees

680

703

641

(3.3)

6.1

Service charges

315

314

315

Capital markets revenue

382

364

388

4.9

(1.5)

Mortgage banking revenue

173

116

166

49.1

4.2

Investment products fees

13.0

Securities gains (losses), net

(1)

Other

197

207

134

(4.8)

47.0

Total noninterest income

$2,836

$2,833

$2,700

5.0

First quarter noninterest income of $2,836 million was $136 million (5.0 percent) higher than the first quarter of 2024. The increase was driven by higher payment services revenue, trust and investment management fees and other revenue. Payment services revenue increased $25 million (2.6 percent) compared with the first quarter of 2024, primarily due to increases across all categories due to business volume growth. Card revenue was impacted by a reduction in prepaid card volumes from a year ago. Trust and investment management fees increased $39 million (6.1 percent) driven by business growth and favorable market conditions. Other revenue increased $63 million (47.0 percent) due to higher tax credit investment activity and the impact of other favorable items.

Noninterest income was $3 million (0.1 percent) higher in the first quarter of 2025 compared with the fourth quarter of 2024. The increase was driven by higher mortgage banking revenue and capital markets revenue. Mortgage banking revenue increased $57 million (49.1 percent) primarily driven by the change in fair value of mortgage servicing rights, net of hedging activities. Capital markets revenue increased $18 million (4.9 percent) mainly due to higher corporate bond fees, partially offset by lower customer-related derivative activity. Partially offsetting these increases were lower payment services revenue, trust and investment management fees and other revenue. Payment services revenue decreased $41 million (3.9 percent) compared with the fourth quarter of 2024, primarily due to a decrease in card revenue of $35 million (8.1 percent) due to seasonally lower spend volume. Trust and investment management fees decreased $23 million (3.3 percent) due to less favorable market conditions than the fourth quarter of 2024. Other revenue decreased $10 million (4.8 percent) principally driven by seasonally lower tax credit investment activity.

U.S. Bancorp First Quarter 2025 Results

NONINTEREST EXPENSE

($ in millions)

Percent Change

1Q25 vs

2025

2024

4Q24

1Q24

Compensation and employee benefits

$2,637

$2,607

$2,691

1.2

(2.0)

Net occupancy and equipment

306

317

296

(3.5)

3.4

Professional services

135

110

(27.4)

(10.9)

Marketing and business development

182

160

136

13.8

33.8

Technology and communications

533

534

507

(.2)

5.1

Other intangibles

123

139

146

(11.5)

(15.8)

Other

353

310

308

13.9

14.6

Total before notable items

4,232

4,202

4,194

Notable items

109

265

Total noninterest expense

$4,232

$4,311

$4,459

(1.8)

(5.1)

First quarter noninterest expense of $4,232 million was $227 million (5.1 percent) lower than the first quarter of 2024. Excluding notable items of $265 million in the first quarter of 2024, first quarter of 2025 noninterest expense increased $38 million (0.9 percent) compared with the first quarter of 2024. The increase was driven by higher marketing and business development expense, technology and communications expense, and other noninterest expense, partially offset by lower compensation and employee benefits expense and other intangibles expense. Marketing and business development expense increased $46 million (33.8 percent) primarily due to a higher charitable foundation contribution. Technology and communications expense increased $26 million (5.1 percent) due to investments in infrastructure and technology development. These increases were partially offset by a $54 million (2.0 percent) decrease in compensation and employee benefits expense primarily due to cost savings from operational efficiencies, partially offset by merit increases.

Noninterest expense decreased $79 million (1.8 percent) from the fourth quarter of 2024. Excluding notable items of $109 million in the fourth quarter of 2024, first quarter of 2025 noninterest expense increased $30 million (0.7 percent) on a linked quarter basis, primarily driven by higher compensation and employee benefits expense, marketing and business development expense and other noninterest expense, partially offset by lower professional services expense. Compensation and employee benefits expense increased $30 million (1.2 percent) primarily due to seasonally higher stock-based compensation, higher performance- based incentives, variable compensation, and merit increases, partially offset by cost savings from operational efficiencies. Marketing and business development expense increased $22 million (13.8 percent) primarily due to a higher charitable foundation contribution.

Provision for Income Taxes

The provision for income taxes for the first quarter of 2025 resulted in a tax rate of 21.6 percent on a taxable-equivalent basis (effective tax rate of 20.5 percent), compared with 22.1 percent on a taxable-equivalent basis (effective tax rate of 20.7 percent) in the first quarter of 2024, and 21.9 percent on a taxable-equivalent basis (effective tax rate of 20.8 percent) in the fourth quarter of 2024.

U.S. Bancorp First Quarter 2025 Results

ALLOWANCE FOR CREDIT LOSSES

($ in millions)

2025

% (a)

2024

% (a)

2024

% (a)

2024

% (a)

2024

% (a)

Balance, beginning of period

$7,925

$7,927

$7,934

$7,904

$7,839

Net charge-offs

Commercial

159

.47

140

.42

139

.43

135

.42

109

.35

Lease financing

.39

.57

.77

.68

Total commercial

163

.47

146

.43

147

.44

143

.43

116

.36

Commercial mortgages

(5)

(.05)

.45

.68

.34

.15

Construction and development

.04

(6)

(.23)

.04

.21

Total commercial real estate

(4)

(.03)

.30

.54

.28

.16

Residential mortgages

(2)

(.01)

(3)

(.01)

(4)

(.01)

Credit card

325

4.48

317

4.28

299

4.10

315

4.47

296

4.26

Retail leasing

1.32

.79

.49

.29

.49

Home equity and second mortgages

(1)

(.03)

.03

(1)

(.03)

(1)

(.03)

Other

.85

.86

.73

.71

.76

Total other retail

.61

.59

.47

.45

.51

Total net charge-offs

547

.59

562

.60

564

.60

538

.58

488

.53

Provision for credit losses

537

560

557

568

553

Balance, end of period

$7,915

$7,925

$7,927

$7,934

$7,904

Components

Allowance for loan losses

$7,584

$7,583

$7,560

$7,549

$7,514

Liability for unfunded credit commitments

331

342

367

385

390

Total allowance for credit losses

$7,915

$7,925

$7,927

$7,934

$7,904

Gross charge-offs

$690

$697

$669

$652

$595

Gross recoveries

$143

$135

$105

$114

$107

Allowance for credit losses as a percentage of

Period-end loans (%)

2.07

2.09

2.12

2.11

Nonperforming loans (%)

470

442

438

454

Nonperforming assets (%)

458

433

429

428

443

(a) Annualized and calculated on average loan balances

U.S. Bancorp First Quarter 2025 Results

The Company's provision for credit losses for the first quarter of 2025 was $537 million, compared with $560 million in the fourth quarter of 2024 and $553 million in the first quarter of 2024. The first quarter of 2025 provision was $23 million (4.1 percent) lower than the fourth quarter of 2024 and $16 million (2.9 percent) lower than the first quarter of 2024. The decrease in provision expense on a year-over-year basis was primarily driven by improved credit quality and portfolio mix. The decrease in provision expense on a linked quarter basis reflected lower commercial real estate net charge-offs. The Company continues to monitor economic uncertainty related to interest rates, inflationary pressures, including those related to changing tariff policies, and other economic factors that may affect the financial strength of corporate and consumer borrowers.

Total net charge-offs in the first quarter of 2025 were $547 million, compared with $562 million in the fourth quarter of 2024 and $488 million in the first quarter of 2024. The net charge-off ratio was 0.59 percent in the first quarter of 2025 compared with 0.60 percent in the fourth quarter of 2024, and 0.53 percent in the first quarter of 2024. The decrease in net charge-offs on a linked quarter basis was primarily due to lower net charge-offs on commercial real estate loans. The increase in net charge-offs on a year-over-year basis primarily reflected higher net charge-offs on commercial and credit card loans.

The allowance for credit losses was $7,915 million at March 31, 2025, compared with $7,925 million at December 31, 2024, and $7,904 million at March 31, 2024. The increase in the allowance for credit losses on a year-over-year basis was primarily driven by portfolio growth. The decrease in allowance for credit losses on a linked quarter basis was primarily driven by improved credit quality and portfolio mix. The ratio of the allowance for credit losses to period-end loans was 2.07 percent at March 31, 2025, compared with 2.09 percent at December 31, 2024, and 2.11 percent at March 31, 2024. The ratio of the allowance for credit losses to nonperforming loans was 470 percent at March 31, 2025, compared with 442 percent at December 31, 2024, and 454 percent at March 31, 2024.

Nonperforming assets were $1,727 million at March 31, 2025, compared with $1,832 million at December 31, 2024, and $1,786 million at March 31, 2024. The ratio of nonperforming assets to loans and other real estate was 0.45 percent at March 31, 2025, compared with 0.48 percent at December 31, 2024, and at March 31, 2024. The decrease in nonperforming assets on a year-over year basis was primarily due to lower commercial real estate nonperforming loans, partially offset by higher commercial nonperforming loans. Accruing loans 90 days or more past due were $796 million at March 31, 2025, compared with $810 million at December 31, 2024, and $714 million at March 31, 2024.

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U.S. Bancorp published this content on April 16, 2025, and is solely responsible for the information contained herein. Distributed via , unedited and unaltered, on April 16, 2025 at 10:48 UTC.