USB 10-K & 10-Q changes, risk factors and insider trading

Financial Performance U.S. Bancorp and its subsidiaries (the “Company”) reported net income attributable to U.S. Bancorp of $1.9$2.2 billion in the firstsecond quarter of 2026, compared with $1.7$1.8 billion in the firstsecond quarter of 2025. Financial performance for the firstsecond quarter of 2026, compared with the firstsecond quarter of 2025, included the following:

•Diluted earnings per common share of $1.18$1.35 in the firstsecond quarter of 2026, representing a 14.621.6 percent increase compared with the firstsecond quarter of 2025;

•Net interest income increased $171$310 million (4.27.7 percent) primarily due to loan growth, improved earning asset mix, and benefits from fixed asset repricing;

•Noninterest income increased $161$401 million (5.713.7 percent) driven by higher fee revenue across mostall categories and the contribution from the BTIG acquisition;

•Average loans increased $14.5$27.0 billion (3.87.1 percent) driven by higher commercial loans, commercial real estate loans and credit card loans, partially offset by lower residential mortgages and other retail loans; and

•Average deposits increased $8.6$12.2 billion (1.72.4 percent), driven by an increase in total savings deposits,account balances, partially offset by a decrease in time deposits.

•TheNet provisioninterest for credit lossesincome increased $39$481 million (7.35.9 percent), primarily due to loan growth.growth, improved earning asset mix, and fixed asset repricing;

•Nonperforming assets were $1.5$1.3 billion at MarchJune 31,30, 2026, a decrease of $62$244 million (3.915.3 percent) compared with December 31, 2025, driven by lower nonperforming commercial loans.

•Net charge-offs weredecreased $546$18 million in the second quarter of 2026 and $19 million in the first quartersix months of 2026, compared with $547the millionsame inperiods of the firstprior quarter of 2025,year, reflecting lower commercial real estate and credit card loan net charge-offs, mostlypartially offset by higher commercial loan net charge-offs.

•Total loan net charge-offs as a percentage of average loans was 0.560.53 percent in the second quarter of 2026 and 0.55 percent in the first quartersix months of 2026, compared with 0.59 percent infor both the second quarter and first quartersix months of 2025.

Capital Management At MarchJune 31,30, 2026, all of the Company’s regulatory capital ratios exceeded regulatory “well-capitalized” requirements.

•The Company’s common equity tier 1 capital ratio was 10.8 percent at both MarchJune 31,30, 2026 and December 31, 2025.

•The Company returned $1.1$1.0 billion and $2.1 billion of earnings to shareholders in the firstsecond quarter of 2026 and the first six months of 2026, respectively, through dividends and share repurchases.

PendingBTIG acquisition ofOn BTIGJune In January1, 2026, the Company announced that it entered into a definitive agreement to acquireacquired BTIG for a purchase price of up to $1 billion, consisting of aapproximately targeted amount of $725 million ($362.5$395 million of cash and 6,600,5946.6 million shares of the Company’s common stock) to be paid aton the closing anddate, with up to an additional $275 million of cash consideration payableto be paid over the next three years, subject to achievement of defined performance targets. BTIG is a global financial services firm specializing in institutional trading, investment banking, research and related brokerage services. The transactionacquisition is expected to closeadd infee revenue to the secondCompany’s quarterWealth, ofCorporate, 2026, subject to regulatory approvalsCommercial and satisfactionInstitutional ofBanking applicablebusiness closingsegment conditions.by expanding its current product offerings.

The Company reported net income attributable to U.S. Bancorp of $1.9$2.2 billion for the firstsecond quarter of 2026, or $1.18$1.35 per diluted common share, compared with $1.7$1.8 billion, or $1.03$1.11 per diluted common share, for the second quarter of 2025. The Company reported net income attributable to U.S. Bancorp of $4.1 billion for the first six months of 2026, or $2.53 per diluted common share, compared with $3.5 billion, or $2.14 per diluted common share, for the first quartersix months of 2025. The increaseincreases from the prior year waswere due to higher net interest income and noninterest income, partially offset by higher noninterest expense and higher provision for credit losses.

Net Interest Income Net interest income was $4.3$4.4 billion in the second quarter and $8.6 billion in the first quartersix months of 2026, representing an increaseincreases of $171$310 million (4.27.7 percent) and $481 million (5.9 percent), respectively, compared with the firstsame quarterperiods of 2025. The increaseincreases waswere primarily due to loan growth, improved earning asset mix, and fixed asset repricing. Average earning assets for the second quarter and the first quartersix months of 2026 were $13.9$15.7 billion (2.32.6 percent) higherand $14.8 billion (2.4 percent) higher, respectively, than the firstsame quarterperiods of 2025, reflecting increases in loans and other earning assets, partially offset by a decreasedecreases in interest-bearing deposits with banks.banks and investment securities. The net interest margin, on a taxable-equivalent basis, was 2.79 percent in the firstsecond quarter of 2026 wasand 2.77 percent, compared with 2.722.78 percent in the first quartersix months of 2026, compared with 2.66 percent and 2.69 percent, respectively, for the same periods of 2025. The increaseincreases waswere primarily due to the combined effects of loan growth, improved earning asset mix and benefits from fixed asset repricing. Refer to the “Consolidated Daily Average Balance Sheet and Related Yields and Rates” tabletables for further information on net interest income.

Average total loans in the second quarter and the first quartersix months of 2026 were $14.5$27.0 billion (3.87.1 percent) higherand $20.8 billion (5.5 percent) higher, respectively, than the firstsame quarterperiods of 2025. The increaseincreases waswere primarily due to higher commercial loans, commercial real estate loans and credit card loans, partially offset by lower residential mortgages and other retail loans. The increase in average commercial loans was primarily due to growthhigher incorporate loans and loans to financial institutions, partially offset by lower corporate loans.institutions. The increase in average credit card loans was primarily driven by higher sales volume. Average commercial real estate loans were higherincreased due to increasedhigher commercial mortgage loan originations. The decreases in average residential mortgages and other retail loans were primarily due to loan sales in the second quarter of 2025.

Average investment securities in the second quarter and the first quartersix months of 2026 were $293$2.3 millionbillion (0.21.3 percent) higherand $1.0 billion (0.6 percent) lower, respectively, than the firstsame quarterperiods of 2025.2025, primarily due to net investment securities sales and maturities.

Average total deposits for the second quarter and the first quartersix months of 2026 were $8.6$12.2 billion (1.72.4 percent) higherand $10.4 billion (2.1 percent) higher, respectively, than the firstsame quarterperiods of 2025. Average total savings deposits for the second quarter and the first quartersix months of 2026 were $16.5$15.5 billion (4.526.7 percent) higherand $16.8 billion (30.9 percent) higher, respectively, than the firstsame quarterperiods of 2025, primarily due to increasesan increase in Wealth, Corporate, Commercial and Institutional Banking, and Consumer and Business Banking balances. Average noninterest-bearing deposits for the second quarter and the first quartersix months of 2026 were $932$1.5 millionbillion (1.21.9 percent) higherand $1.2 billion (1.5 percent) higher, respectively, than the firstsame quarterperiods of 2025, driven by an increase in Wealth, Corporate, Commercial and Institutional Banking balances, partially offset by a decrease in Consumer and Business Banking balances. Average time deposits for the second quarter and the first quartersix months of 2026 were $8.9$10.5 billion (16.018.4 percent) lowerand $9.7 billion (17.2 percent) lower, respectively, than the firstsame quarterperiods of 2025, mainly due to decreases in Treasury and Corporate Support,Support balances, and Wealth, Corporate, Commercial and Institutional Banking balances. Changes in time deposits are primarily related to those deposits managed as an alternative to other funding sources, based largely on relative pricing and liquidity characteristics. Average money market deposits for the second quarter of 2026 were $4.9 billion (2.8 percent) higher than the second quarter of 2025, driven by an increase in Wealth, Corporate, Commercial and Institutional Banking balances, partially offset by a decrease in Consumer and Business Banking balances.

Provision for Credit Losses The provision for credit losses was $576$538 million in the second quarter and $1.1 billion in the first quartersix months of 2026, representing an increaseincreases of $39$37 million (7.4 percent) and $76 million (7.3 percent), respectively, from the firstsame quarterperiods of 2025, primarily due to loan growth. Net charge-offs decreased $1$18 million (0.23.2 percent) in the second quarter of 2026 and $19 million (1.7 percent) in the first quartersix months of 2026, compared with the firstsame quarterperiods of 2025,2025. The decreases were driven by lower commercial real estate loan and credit card loan net charge-offs, mostlypartially offset by higher commercial loan net charge-offs. Refer to “Corporate Risk Profile” for further information on the provision for credit losses, net charge-offs, nonperforming assets and other factors considered by the Company in assessing the credit quality of the loan portfolio and establishing the allowance for credit losses.

Noninterest Income Noninterest income was $3.0$3.3 billion in the second quarter of 2026 and $6.3 billion in the first quartersix months of 2026, representing an increaseincreases of $161$401 million (5.713.7 percent) and $562 million (9.8 percent), respectively, compared with the firstsame quarterperiods of 2025. The increaseincreases from the prior year reflected higher capitalfee marketsrevenue revenue,across trustmost and investment management fees, lending and deposit-related fees, merchant processing services and card revenue, partially offset by lower other noninterest income and losses from repositioning a portion of the investment securities portfolio.categories. Capital markets revenue increased primarily due to the contribution from BTIG following the acquisition in the second quarter of 2026, along with higher client-related derivative activity, corporate bond underwriting fees and favorable market conditions. Trust and investment management fees increased primarily due to business growth and favorable market conditions. Card revenue and corporate payment and treasury management revenue increased mainly due to higher sales volume. Lending and deposit-related fees increased primarily due to higher loan fees. Merchant processing services revenue increased due to favorable rates, while card revenue increased due to higher credit card sales volume.rates.

Effective January 1, 2026, the Company made changes and reclassifications to certain fee revenue items.items in order to align financial reporting with current management of the Company’s businesses. Prior period balancesamounts have been conformed to the current period presentation to reflect the reclassifications described below:presentation.

Noninterest Expense Noninterest expense was $4.3$4.4 billion in the second quarter and $8.7 billion in the first quartersix months of 2026, representing an increaseincreases of $33$247 million (0.85.9 percent) and $280 million (3.3 percent), respectively, from the firstsame quarterperiods of 2025. The increaseincreases from the prior year reflected the impact of the BTIG acquisition, higher technology and communications expenseexpense, andhigher marketing and business development expense, partially offset by lower other intangibles expense,higher compensation and employee benefits expenseexpense, and higher other noninterest expense. Technology and communications expense increased primarily due to investments in product and technology development. Marketing and business development expense increasedwas higher primarily due to increased initiatives. Compensation and employee benefits expense decreasedincreased primarily due to cost savings from operational efficiencies, partially offset by merit increases.increases and incentive compensation. Compensation and employee benefits expense also increased in the second quarter of 2026, compared with the second quarter of 2025, due to higher stock-based compensation expense.

Income Tax Expense The provision for income taxes was $469$537 million (an effective rate of 19.419.7 percent) for the second quarter of 2026 and $1.0 billion (an effective rate of 19.6 percent) for the first quartersix months of 2026, compared with $443$472 million (an effective rate of 20.520.6 percent) and $915 million (an effective rate of 20.6 percent) for the firstsame quarterperiods of 2025.2025, respectively.

Loans The Company’s loan portfolio was $399.8$410.3 billion at MarchJune 31,30, 2026, compared with $391.3 billion at December 31, 2025, an increase of $8.5$19.0 billion (2.24.8 percent). The increase was driven by higher commercial loans, residential mortgagesloans and commercial real estate loans.

Commercial loans increased $5.9$11.5 billion (4.07.8 percent) at MarchJune 31,30, 2026, compared with December 31, 2025, primarily due to growth in corporate loans.loans and loans to financial institutions.

Commercial real estate loans increased $1.1$3.4 billion (2.17.0 percent) at MarchJune 31,30, 2026, compared with December 31, 2025, primarily due to increased loancommercial mortgage originations.

Other retail loans increased $453$1.6 millionbillion (1.13.9 percent) at MarchJune 31,30, 2026, compared with December 31, 2025, primarily due to higher revolving credit balances and retail leasing balances.

Credit card loans decreasedincreased $377$1.0 millionbillion (1.02.8 percent) at MarchJune 31,30, 2026, compared with December 31, 2025, primarily asdue ato resulthigher ofsales customers seasonally paying down balances.volumes.

Loans Held for Sale Loans held for sale, consisting primarily of residential mortgages to be sold in the secondary market, were $2.9$3.0 billion at MarchJune 31,30, 2026, compared with $2.5 billion at December 31, 2025. The increase was driven primarily by athe higher leveltiming of residential mortgage loan closingssales in the firstsecond quarter of 2026, compared with the fourth quarter of 2025.2026. Almost all of the residential mortgage loans the Company originates or purchases for sale follow guidelines that allow the loans to be sold into existing, highly liquid secondary markets, in particular in government agency transactions and to government sponsored enterprises (“GSEs”).

Investment Securities Investment securities totaled $168.9$163.2 billion at MarchJune 31,30, 2026, compared with $167.0 billion at December 31, 2025. The $1.9$3.8 billion (1.12.3 percent) increasedecrease was primarily due to net investment purchases,securities partiallysales offsetand by an unfavorable change in net unrealized gains (losses) on available-for-sale investment securities.maturities.

The Company’s available-for-sale investment securities are carried at fair value with changes in fair value reflected in other comprehensive income (loss) unless a portion of a security’s unrealized loss is related to credit and an allowance for credit losses is necessary. At Marchboth June 30, 2026 and December 31, 2026,2025, the Company’s net unrealized losses on available-for-sale investment securities were $4.7 billion ($3.5 billion net-of-tax), compared with net unrealized losses of $4.4 billion ($3.3 billion net-of-tax) at December 31, 2025. The unfavorable change in net unrealized gains (losses) was primarily due to decreases in the fair value of obligations of state and political subdivisions and mortgage-backed securities as a result of changes in interest rates.. Gross unrealized losses on available-for-sale investment securities totaled $4.9$4.7 billion at MarchJune 31,30, 2026,2026 compared with $4.7 billion atand December 31, 2025. When evaluating credit losses, the Company considers various factors such as the nature of the investment security, the credit ratings or financial condition of the issuer, the extent of the unrealized loss, expected cash flows of the underlying collateral, the existence of any government or agency guarantees, and market conditions. At MarchJune 31,30, 2026, the Company had no plans to sell securities with unrealized losses, and believed it was more likely than not that it would not be required to sell such securities before recovery of their amortized cost.

Deposits Total deposits were $528.2$532.1 billion at MarchJune 31,30, 2026, compared with $522.2 billion at December 31, 2025. The $6.0$9.9 billion (1.11.9 percent) increase in total deposits was driven by increases in total savings depositsaccount balances, interest checking balances and noninterest-bearing deposits, partially offset by a decreasedecreases in time deposits and money market deposits. Savings account balances increased $6.1$10.0 billion (9.315.2 percent), driven by higher Consumer and Business Banking balances. Interest checking balances increased $772$3.8 millionbillion (0.6 percent), primarily due to higher Consumer and Business Banking balances, partially offset by lower Wealth, Corporate, Commercial and Institutional Banking balances. Money market deposit balances increased $678 million (0.42.9 percent), primarily due to higher Wealth, Corporate, Commercial and Institutional Banking balances, partially offset by lower Consumer and Business Banking balances. Noninterest-bearing deposits increased $1.2$1.7 billion (1.42.0 percent) at MarchJune 31,30, 2026, compared with December 31, 2025, primarily driven by an increase in TreasuryWealth, Corporate, Commercial, and CorporateInstitutional SupportBanking balances. Money market deposit balances decreased $4.1 billion (2.2 percent), primarily due to lower Consumer and Business Banking balances. Time deposits decreased $2.8$1.5 billion (5.83.2 percent) at MarchJune 31,30, 2026, compared with December 31, 2025, driven by decreaseslower acrossConsumer mostand businessBusiness segments.Banking balances and lower Treasury and Corporate Support balances. Changes in time deposits are primarily related to those deposits managed as an alternative to other funding sources, based largely on relative pricing and liquidity characteristics.

Borrowings The Company utilizes both short-term and long-term borrowings as part of its asset/liability management and funding strategies. Short-term borrowings, which include federal funds purchased, commercial paper, repurchase agreements, borrowings secured by high-grade assets and other short-term borrowings, were $17.9$37.3 billion at MarchJune 31,30, 2026, compared with $17.2 billion at December 31, 2025. The $697$20.2 million (4.1 percent)billion increase in short-term borrowings was primarily due to higher repurchaseshort-term agreementFederal Home Loan Bank (“FHLB”) balances. Long-term debt was $61.4$58.7 billion at MarchJune 31,30, 2026, compared with $60.8 billion at December 31, 2025. The $597$2.1 millionbillion (1.03.4 percent) increasedecrease was primarily due to $2.6an $8.0 billion decrease in FHLB advances and $1.2 billion of subordinated note maturities, partially offset by $2.8 billion of medium-term note, $2.1 billion of bank note, $1.3 billion of subordinated note issuances,and $563$1.2 millionbillion of credit-linked bank note issuances and $157 million of bank note issuances, partially offset by a $3.0 billion decrease in Federal Home Loan Bank (“FHLB”) advances.issuances. Refer to the “Liquidity Risk Management” section for discussion of liquidity management of the Company.

(d)Amortized cost excludes portfolio level basis adjustments of $93$3 million at MarchJune 31,30, 2026 and $185 million at December 31, 2025.

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

The Company’s most prominent risk exposures are credit, interest rate, market, liquidity, operational, compliance, strategic, and reputation. Credit risk is the risk of loss associated with a change in the credit profile or the failure of a borrower or counterparty to meet its contractual obligations. Interest rate risk is the current or prospective risk to earnings and capital arising from the impact of changes in interest rates. Market risk is the risk associated with fluctuations in interest rates, foreign exchange rates, commodities and credit spreads that may result in changes in the values of financial instruments, such as trading securities, mortgage loans held for sale (“MLHFS”) and mortgage servicing rights (“MSRs”). Liquidity risk is the risk that financial condition or overall safety and soundness is adversely affected by the Company’s inability, or perceived inability, to meet its cash flow obligations in a timely and complete manner in either normal or stressed conditions. Operational risk is the risk to current or projected financial condition and resilience arising from inadequate or failed internal processes or systems, people (including human errors or misconduct), or adverse external events, including the risk of loss resulting from breaches in data security. Operational risk can also include the risk of loss due to failures by third parties with which the Company does business. Compliance risk is the risk that the Company may suffer legal or regulatory sanctions, financial losses, and damage to its brand if it fails to adhere to compliance requirements and the Company’s compliance policies. Strategic risk is the risk to current or projected financial condition and resilience arising from adverse business decisions, poor implementation of business decisions, or lack of responsiveness to changes in the banking industry and operating environment. Reputation risk is the risk to current or projected financial condition and resilience arising from negativeactions, publicdecisions, opinion.or events that diminish the trust and confidence of key stakeholders. In addition to the risks identified above, other risk factors exist that may impact the Company. Refer to “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, for a detailed discussion of these factors.

In addition, credit quality ratings, as defined by the Company, are an important part of the Company’s overall credit risk management and evaluation of its allowance for credit losses. Loans with a pass rating represent those loans not classified on the Company’s rating scale for problem credits, as minimal credit risk has been identified. Loans with a special mention or classified rating encompass all loans held by the Company that it considers having a potential or well-defined weakness that may put full collection of contractual cash flows at risk. These are defined by individually graded credit quality ratings for larger corporate loans or scoredscored- based credit quality ratings in consumer lending and small business loans. ScoredScored-based based creditsloans classified as problem creditsloans are typically 90 days or more past due and still accruing, nonaccrual loans or loans in a junior lien position that are current but are behind a first lien position on nonaccrual. Refer to Note 5 in the Notes to Consolidated Financial Statements for further discussion of the Company’s loan portfolios including internal credit quality ratings. In addition, refer to “Management’s Discussion and Analysis — Credit Risk Management” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, for a more detailed discussion on credit risk management processes.

The commercial lending segment includes loans and leases made to small business, middle market, large corporate, commercial real estate, financial institution, non-profit and public sector customers. Key risk characteristics relevant to commercial lending segment loans include the industry and geography of the borrower’s business, purpose of the loan, repayment source, borrower’s debt capacity and financial flexibility, loan covenants, and nature of pledged collateral, if any, as well as macroeconomic factors such as unemployment rates, corporate bond spreads, commercial property prices and long-term interest rates. These risk characteristics, among others, are considered in determining estimates about the likelihood of default by the borrowers and the severity of loss in the event of default. The Company considers these risk characteristics in assigning internal risk ratings to, or forecasting losses on, these loans, which are the significant factors in determining the allowance for credit losses for loans in the commercial lending segment.