20

23
Annual
Report
LETTER TO SHAREHOLDERS

Andy Cecere
Chairman, President and
Chief Executive Officer

Over the years, U.S. Bank has built a reputation for being a company
that does the right thing, delivers consistent results, and drives value for
and earns trust with our various stakeholders. We are keeping our focus
on the long term, while managing the short term effectively. We are proud
of our proven record of responding to the environment and ensuring that
our actions keep us on the right track for long-term success.

That commitment to being both responsive and proactive was

on full display throughout 2023.
LETTER TO SHAREHOLDERS

Optimism and confidence were high heading into As I look back on the year, there are four areas
the new year, on the heels of regulatory approval for which I am most proud of our efforts.
for and the closing of our Union Bank transaction.
Much of our early planning for 2023 focused Integrating and converting
on integration and conversion, and refining Union Bank
efforts we had introduced the prior year as
we accelerated our growth efforts. One of our biggest initiatives this year was
finalizing our Union Bank acquisition, which
That focus shifted quickly, however, when the involved many people across the company as
crisis of confidence in the banking industry that we migrated more than a million customers to
began with the failure of Silicon Valley Bank our systems and welcomed new employees
demanded our primary attention. The implications to our team. This was meaningful for the bank;
stemming from that catalyst drove refinements it was a strategic investment in our future that
to our strategic priorities, focusing our attention greatly expanded our reach and scale, and it
on client needs, a heightened regulatory enhanced our ability to support clients and
environment, and increased expectations communities in important ways. We began
within the industry around capital and liquidity to deliver the commitments of our multiyear,
requirements. More than ever, setting a clear multibillion dollar Community Benefits Plan.
direction for where, when and how we would Early indications of the potential to deepen
grow profitability while strengthening our relationships with legacy Union Bank’s
balance sheet and enabling and safeguarding loyal, affluent and diversified client base
our customers was important. are promising. We expect to realize revenue
Our strategic priorities evolved to keep pace with opportunities in 2024 and beyond, and we
the changes in the external environment. This remain on track to achieve about $900 million
kind of reflection always requires a certain level in cost synergies overall.
of give-and-take. We paused some efforts and
accelerated others. We put more energy into Demonstrating strength
areas of the business that provided near-term and stability
results given current customer needs, and we
pulled back – temporarily – on others that were Like many financial institutions, we needed to
more capital-intensive or with a longer runway for demonstrate our strength and stability, the health
return on investment. We pushed our teams for of our balance sheet, and our ability to manage
prudent expense management and optimization. deposit flows in the wake of the industry stress
of early 2023. We did all those things. At the end
Leading us through this time was a strong of 2023 our Common Equity Tier 1 capital ratio
management team, fortified by a succession plan was 9.9% – up from 9.7% at the end of the third
that we enacted as it was needed. Early in 2023, quarter and 8.4% at the end of last year. This 150
for instance, we announced several leadership basis point increase demonstrates our ability to
changes given the retirements of three of our accrete capital when needed, and it brings our
Managing Committee members. This afforded capital levels above where they were prior to
us the opportunity to elevate new leaders to our our acquisition of Union Bank.
executive leadership team, enhance the roles
others have, and leverage the moment to create
synergies within our structure.

1
LETTER TO SHAREHOLDERS

Consistent with this, the Federal Reserve notified this cross-company focus helped us bring the
us in October that they granted us full relief from best of the whole bank to clients to help them
an accelerated Category II commitment made in meet their financial needs. I would be remiss if
conjunction with the Union Bank acquisition given I did not take this opportunity to thank our more
our ability to further enhance our balance sheet than 70,000 employees for their dedication to
risk profile and achieve near-term capital actions. supporting the needs of our clients, communities
As a result, we are now subject to existing capital and shareholders.
rules or, if adopted, the same transition rules as
all other Category III banks related to enhanced Looking ahead into 2024, we expect near-
capital requirements under the Basel III proposals. term industry uncertainty, but we believe the
groundwork we have laid will help us navigate
it effectively. We have a strong business
Growing in capital-efficient ways profile and position, which will enable us to
We also continued to strategically execute be confident in the decisions we make and
capital-efficient growth opportunities across each actions we will take. It is likely that there will be
of our business lines. We are well positioned with strong deposit competition. We anticipate new
our enhanced earnings profile and diversified regulatory requirements related to increased
business mix to further increase our capital levels, capital to impact return profiles for us and other
continue our disciplined lending activities, and financial institutions, but we expect our approach
further strengthen our balance sheet. to capital management and operating discipline
will serve us well – and position us to be able to
A great benefit of our diversified business model move quickly.
is the balance between our spread and fee income
businesses that helps us reduce earnings volatility We will rely on our advantages to carry us
through a business cycle. As a result, we can forward. Our ready, willing and able team.
reinvest in our operations to position us for the Our diversified business mix. Our focus on
future. Within Payments Services, for example, leveraging our businesses holistically through
we invested in our digital capabilities, expanded the cycle for the benefit of our customers and
our payments ecosystem and optimized our to create value for our shareholders. Our ability
distribution. This led to further technology-led to overcome challenging environments with
growth across our merchant processing network. strength and stability – and more.
We also continue to make targeted investments We are proud of the position we are in, the trust
that leverage our scale and strategic marketing we have earned, and the opportunity we have
positioning across our corporate trust, mortgage to move confidently into a future that is as
banking and capital markets businesses, which dynamic as the environment in which we operate.
should enhance our already strong annualized Thank you for your investment in our company.
growth trajectories. We appreciate your belief and your support.

Building relationships and Sincerely,

creating new opportunities
Through it all, our team served customers, built
relationships and provided products and services
to meet the ever-changing needs of those who
Andy Cecere
relied on us. That took extraordinary effort and
a shared belief that we could do great things Chairman, President and Chief Executive Officer
together. From investment in innovation and new U.S. Bancorp
capabilities, to the basics of doing business right, February 2024

2 U.S. Bancorp 2023 Annual Report | usbank.com/AR2023

ABOUT US

U.S. Bancorp, with more than 70,000 employees and $663 billion in
assets as of December 31, 2023, is the parent company of U.S. Bank
National Association.
Headquartered in Minneapolis, the company serves millions of clients locally, nationally and globally
through a diversified mix of businesses including consumer banking, business banking, commercial banking,
institutional banking, payments and wealth management. U.S. Bancorp has been recognized for its approach
to digital innovation, community partnerships and customer service, including being named one of the 2023
World’s Most Ethical Companies® and most admired superregional bank by Fortune®.
Learn more at usbank.com/about.

Revenue mix by business line

2023 taxable-equivalent basis. Business line revenue percentages exclude Treasury and Corporate
Support. See Non-GAAP Financial Measures on page 59.

37% 38% 25%

Consumer and Wealth, Corporate, Payment Services:

Business Banking: Commercial and Retail Payment Solutions,
Branch Banking, Small Institutional Banking: Global Merchant
Business Banking, Consumer Wealth Management, Acquiring and Corporate
Lending, Mortgage Banking Asset Management, Capital Payment Systems
and Omnichannel Delivery Markets, Global Fund
Services, Corporate Banking,
Commercial Banking and
Commercial Real Estate

Our strategic pillars

Our strategy is how we will grow; it comes to life by activating our pillars.

Being the Most Driving One Striving for Creating the

Trusted Choice U.S. Bank Simplicity Future Now

usbank.com 3
FINANCIAL HIGHLIGHTS

$28.1B $900M
in record net revenue in full run-rate cost
(an increase of synergies achieved with
15.8% over 2022) Union Bank acquisition

14.3 %
increase in average total
9.4%
increase in average total
loans year-over-year deposits year-over-year

9.9%
Common Equity Tier 1 capital
12.3%
increase in non-interest
ratio (an increase of 150 basis income year-over-year
points throughout 2023)

21.7% 14.7%
1 2

return on tangible common equity increase in tangible book

value per share year-over-year

1. Return on tangible common equity excludes certain notable items, and is a non-GAAP financial metric. Please see Non-GAAP Financial Measures beginning
on page 59.
2. Tangible book value per share is a non-GAAP financial metric. Please see Non-GAAP Financial Measures beginning on page 59.

4 U.S. Bancorp 2023 Annual Report | usbank.com/AR2023

FINANCIAL SUMMARY
Year Ended December 31 2023 2022
(Dollars and Shares in Millions, Except Per Share Data) 2023 2022 2021 v 2022 v 2021

Net interest income ............................................................................ $17,396 $14,728 $12,494 18.1% 17.9%

Taxable-equivalent adjustment(a) ......................................................... 131 118 106 11.0 11.3
Net interest income (taxable-equivalent basis)(b) .............................. 17,527 14,846 12,600 18.1 17.8
Noninterest income ............................................................................ 10,617 9,456 10,227 12.3 (7.5)
Total net revenue ............................................................................. 28,144 24,302 22,827 15.8 6.5
Noninterest expense .......................................................................... 18,873 14,906 13,728 26.6 8.6
Provision for credit losses ................................................................... 2,275 1,977 (1,173) 15.1 *
Income taxes and taxable-equivalent adjustment .............................. 1,538 1,581 2,287 (2.7) (30.9)
Net income ...................................................................................... 5,458 5,838 7,985 (6.5) (26.9)
Net (income) loss attributable to noncontrolling interests ............... (29) (13) (22) * 40.9
Net income attributable to U.S. Bancorp ......................................... $5,429 $5,825 $7,963 (6.8) (26.8)
Net income applicable to U.S. Bancorp common shareholders ....... $5,051 $5,501 $7,605 (8.2) (27.7)

Per Common Share

Earnings per share .............................................................................. $3.27 $3.69 $5.11 (11.4)% (27.8)%
Diluted earnings per share .................................................................. 3.27 3.69 5.10 (11.4) (27.6)
Dividends declared per share ............................................................. 1.93 1.88 1.76 2.7 6.8
Book value per share(c)......................................................................... 31.13 28.71 32.71 8.4 (12.2)
Market value per share ....................................................................... 43.28 43.61 56.17 (.8) (22.4)
Average common shares outstanding ................................................ 1,543 1,489 1,489 3.6 --
Average diluted common shares outstanding .................................... 1,543 1,490 1,490 3.6 --

Financial Ratios
Return on average assets .................................................................... .82% .98% 1.43%
Return on average common equity ..................................................... 10.8 12.6 16.0
Net interest margin (taxable-equivalent basis)(a) .................................. 2.90 2.72 2.49
Efficiency ratio(b) ................................................................................. 66.7 61.4 60.4

Average Balances
Loans .................................................................................................. $381,275 $333,573 $296,965 14.3% 12.3%
Investment securities(d) ....................................................................... 162,757 169,442 154,702 (3.9) 9.5
Earning assets .................................................................................... 605,199 545,343 506,141 11.0 7.7
Assets ................................................................................................. 663,440 592,149 556,532 12.0 6.4
Deposits ............................................................................................. 505,663 462,384 434,281 9.4 6.5
Total U.S. Bancorp shareholders' equity .............................................. 53,660 50,416 53,810 6.4 (6.3)

Period End Balances

Loans .................................................................................................. $373,835 $388,213 $312,028 (3.7)% 24.4%
Allowance for credit losses ................................................................. 7,839 7,404 6,155 5.9 20.3
Investment securities .......................................................................... 153,751 161,650 174,821 (4.9) (7.5)
Assets ................................................................................................. 663,491 674,805 573,284 (1.7) 17.7
Deposits ............................................................................................. 512,312 524,976 456,083 (2.4) 15.1
Total U.S. Bancorp shareholders' equity .............................................. 55,306 50,766 54,918 8.9 (7.6)

Capital Ratios
Common equity tier 1 capital ............................................................. 9.9% 8.4% 10.0%
Tier 1 capital ...................................................................................... 11.5 9.8 11.6
Total risk-based capital ...................................................................... 13.7 11.9 13.4
Leverage ............................................................................................. 8.1 7.9 8.6
Total leverage exposure ...................................................................... 6.6 6.4 6.9
Tangible common equity to tangible assets(b) ...................................... 5.3 4.5 6.8
Tangible common equity to risk-weighted assets(b) ............................. 7.7 6.0 9.2
Common equity tier 1 capital to risk-weighted assets, reflecting the full
implementation of the current expected credit losses methodology(b) ...... 9.7 8.1 9.6

* Not meaningful
(a) Based on a federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes.
(b) See Non-GAAP Financial Measures beginning on page 59.
(c) Calculated as U.S. Bancorp common shareholders' equity divided by common shares outstanding at end of the period.
5
(d) Excludes unrealized gains and losses on available-for-sale investment securities and any premiums or discounts recorded related to the transfer of investment securities
at fair value from available-for-sale to held-to-maturity.
 MANAGING COMMITTEE

Andrew Cecere Souheil S. Badran

Chairman, President and Senior Executive Vice President
Chief Executive Officer and Chief Operations Officer

Elcio R.T. Barcelos James L. Chosy

Senior Executive Vice President and Senior Executive Vice President
Chief Human Resources Officer and General Counsel

Venkatachari Dilip
Gregory G. Cunningham
Senior Executive Vice President
Senior Executive Vice President
and Chief Information and
and Chief Diversity Officer
Technology Officer

Revathi N. Dominski
Terrance R. Dolan Senior Executive Vice President,
Vice Chair and Chief Chief Social Responsibility Officer,
Administration Officer and President, U.S. Bank Foundation

Gunjan Kedia
Shailesh M. Kotwal
Vice Chair, Wealth, Corporate,
Vice Chair, Payment Services
Commercial & Institutional Banking

Stephen L. Philipson
Senior Executive Vice President Jodi L. Richard
and Head of Global Markets and Vice Chair and Chief Risk Officer
Specialized Finance

Mark G. Runkel John C. Stern

Senior Executive Vice President Senior Executive Vice President
and Chief Transformation Officer and Chief Financial Officer

Dominic V. Venturo Timothy A. Welsh

Senior Executive Vice President Vice Chair, Consumer
and Chief Digital Officer and Business Banking

6 U.S. Bancorp 2023 Annual Report | usbank.com/AR2023

BOARD OF DIRECTORS

Warner L. Baxter
Andrew Cecere
Retired Executive Chairman and
Chairman, President and Chief
Former Chairman, President
Executive Officer, U.S. Bancorp
and CEO, Ameren Corporation

Dorothy J. Bridges
Elizabeth L. Buse
Chief Executive Officer,
Former Chief Executive Officer,
Metropolitan Economic Development
Monitise plc
Association (Meda)

Alan B. Colberg Kimberly N. Ellison-Taylor

Retired President and Chief Executive Founder and Chief Executive Officer,
Officer, Assurant, Inc. KET Solutions, LLC

Kimberly J. Harris Roland A. Hernandez

Retired President and Chief Executive Founding Principal and Chief Executive
Officer, Puget Energy, Inc. Officer, Hernandez Media Ventures
(Lead Independent Director)

Richard P. McKenney Yusuf I. Mehdi

President and Chief Executive Officer, Executive Vice President and
Unum Group Consumer Chief Marketing Officer,
Microsoft Corporation

Loretta E. Reynolds John P. Wiehoff

Founder and Chief Executive Officer, Retired Chairman and Chief Executive
LEReynolds Group, LLC Officer, C.H. Robinson Worldwide, Inc.

Scott W. Wine
Chief Executive Officer,
CNH Industrial N.V.

7
Maintaining our strength and
stability in unstable times
2023 tested the financial services industry with a heightened regulatory
environment and increased focus on capital levels, and the stress banks
felt was compounded by pressures in the broader economy. Despite the
challenges around us and this “new normal,” we achieved solid results –
thanks in large part to our strong foundation and financial discipline.

8 U.S. Bancorp 2023 Annual Report | usbank.com/AR2023

 A strong
deposit base

+50%
of our deposit base
consists of consumer
deposits

~50%
Strength in our financial position of our deposit base
consists of wholesale
Our debt ratings for both long-term senior debt and bank
deposits
deposits remained relatively strong, and we grew our
CET1 ratio 150 basis points throughout the year to 9.9%
as of Dec. 31, 2023 – above what it was shortly before
U.S. Bancorp closed on the acquisition of Union Bank.
Results of our Dodd-Frank Act Stress Test demonstrated Investment
that we are well-capitalized and remain prepared to withstand portfolio
an economic downturn. We’ve performed well on each
stress test since they were instituted a decade ago.

Strength in our liquidity position

We maintained strong capital and liquidity positions, along ~90%
with a disciplined asset liability management framework and of our investments are
sound balance sheet actions. Our investment portfolio also backed by the U.S.
remained well-balanced, with what we believe are appropriate government
levels of liquidity to help us be prepared for unexpected events.

Strength in our diversified business

Our diverse mix of businesses (seen on page 3 and throughout
this report) helped set us apart and provided varied sources
of revenue from both a geographical and client composition
perspective, which we believe helps us weather economic turns.

9
Our competitive advantage:
the diversity of our business
We’re strong and stable, and we stand out. Our business model isn’t like every
other bank, and that’s intentional. Within our three primary revenue lines, we
have more than 50 business areas generating “through cycle” earnings power.
That power extends to our clients. With unique offerings from Corporate
Payments and Corporate Trust to Capital Markets and Asset Management –
just to name a few – we’re able to bring the whole bank to our clients as
trusted consultants helping power potential.

10 U.S. Bancorp 2023 Annual Report | usbank.com/AR2023

 At a glance

#1
largest provider
of commercial card
payments to the U.S.
federal government1

#1
freight payment
provider ranked by
payment volume2

#6
U.S. merchant acquirer
based on volume3

G LOBAL ME RC HANT ACQ U IRING

The launch of U.S. Bank Avvance™,

#5
credit card issuer based
our new flexible financing solution on purchase volume4

#7
With payment methods and consumer expectations constantly
evolving, we introduced our new multichannel point-of-sale lending
solution, U.S. Bank Avvance™, in the fourth quarter of 2023. Avvance
enables businesses to offer consumer financing during checkout U.S. debit card issuer
with a quick application and instant decisioning. Additionally, the based on volume5
solution provides a transparent, convenient way to pay over time.
Loan offers are personalized, providing flexibility while making it easy
for customers to see how much they would pay. For business owners, 1. Based on year-end 2022 results
(most recent data available).
Avvance is embedded in the checkout process, enabling them to Source: GSA SmartPay® program.
offer their customers convenience from a trusted provider without
2. Based on full year 2022 results
the hassle of managing payments after the sale. (most recent data available) for
key competitors and analysis of
company reports.
R E TA I L PAY M E N T S O L U T I O N S
3. Based on Nilson Report (Issue 1238).
U.S. rank consolidates Joint Ventures.
U.S. Bank offers recycled plastic for Altitude Go Puerto Rico is included in U.S. rankings.
In September, we announced that U.S. Bank will issue credit cards 4. As of June 30, 2023 (most recent data
available). Based on Visa and Mastercard
made from recycled plastic for the entire U.S. Bank Altitude® Go purchase volume. Includes consumer,
Visa Signature® and U.S. Bank Altitude® Go Secured Visa® credit small business and commercial volume.
card lines, as well as U.S. Bank Altitude® Go World Elite Mastercard®. Source: Nilson Report 1249.
Additionally, cardholders can redeem earned points as a contribution 5. Ranking is for fiscal year 2022 (most
toward a variety of nonprofits listed in the Altitude Rewards Center. recent data available) and does not
include benefits from Union Bank
U.S. Bank will match each point donation made for Altitude Go acquisition. Source: Nilson Report #1240.
cardholders – doubling the value of donations to cardholders'
selected nonprofits.
11
 At a glance

#5
Treasury Management
bank nationally1

#3
U.S. commercial
card issuer ranked
C O R P O R AT E PAY M E N T A N D T R E A S U R Y S O L U T I O N S by spend volume2

35+
A new expense management solution
for middle market companies
With many companies looking for ways to simplify the time, countries where businesses
effort and dollars spent processing employee expense reports, can use our merchant
payment solutions
we continued our ramp up of digital payment solutions in 2023.

9
Together with our wholly owned subsidiary, TravelBank, we
developed the Commercial Rewards Card, an innovative solution
to help emerging middle market companies control and monitor
business expenses in real time. The solution integrates controls and major co-branded
workflows into one card, expense and travel management platform credit card partners with
designed especially for mid-size companies, helping them replace
time-consuming manual processes with a single, integrated tool
for business expense, travel and card management. Additionally,
~40,000 distribution points
real-time data gives clients greater control, improved productivity,

~1,300
visibility into business spending and an easier experience for
employees to track their expenses via a suite of integrated products.

financial institution clients

Accelerating business payment options that we issue credit cards for
Business clients of both U.S. Bank and Kyriba, a global leader of
cloud-based finance solutions, can now easily send instant payments
to vendors, customers, and employees from their U.S. Bank® 1. Based on fee-equivalent revenue.
accounts within their existing Kyriba dashboard thanks to our new Source: Ernst & Young 2022 Cash
Management Services Survey
API-powered payment connectors. The collaboration with Kyriba's (most recent data available).
Real-time API Connectivity Network integrates banks, enterprise
2. Based on analysis of Nilson Commercial
resource planning systems, trading portals, data services and Card report and company filings for 2022
payment apps using pre-built connectors to improve business (most recent data available).
continuity and minimize IT time and cost. For clients of U.S. Bank
and Kyriba, these connectors reduce time and resources required to
enable new payment methods. In addition to instant RTP® Network
payments, joint U.S. Bank and Kyriba clients can leverage the API
connectors to send Zelle® payments. The embedded payment
solution also provides businesses with real-time visibility into bank
account balance and transaction reporting, which helps improve
cash flow management.

12 U.S. Bancorp 2023 Annual Report | usbank.com/AR2023

 BUSINESS BANKING
Continued growth New initiative offers banking, payments
via our alliance and wealth management for small-to-midsize
with State Farm healthcare practices
In 2020, we teamed up We’ve served healthcare organizations for more than 100 years,
with State Farm to but in 2023, we began a new cross-business initiative to serve
provide banking solutions a growing and new-to-us segment of healthcare practices that
and services to consumers have up to $25 million in annual revenue. A specialized team with
and small businesses expertise from banking, payments and wealth management delivers
through State Farm a comprehensive suite of solutions for medical, dental and veterinary
agents. Three years later, practices and practice owners, as well as physician-owned medical
we continue to grow and diagnostic laboratories and outpatient care centers. The high-
our relationship. touch service is led by a healthcare banker who can bring solutions
and advice designed to strengthen the client’s practice, improve their

+875K current clients1

patient payment experience, and help them achieve their personal
financial goals. The services are designed to help simplify finances
and operations for these practices, so practitioners can spend more
time on patients and less time on administrative tasks.

+120K CONSUMER
new accounts
opened in 20231
Growing beyond branch markets
We made it easier to do business with U.S. Bank in 2023, with a
historic move in our deposits strategy. Clients and non-clients
in all 50 states now can open certificates of deposit (CDs), even
1. As of December 31, 2023.
if there isn’t a local branch in the area. This opportunity is a first in
our 160-year history. Previously, we had offered most consumer
deposit and banking products only to clients within our 26-state
branch network. The move follows several digital advancements,
alliances and new market entries that have accelerated our ability
to provide more products and services to a significantly larger
segment of the U.S. This includes a new branch presence in
Charlotte, North Carolina, with four new branch locations
opening over the last three years. Additionally, we expanded
corporate and commercial banking services to Texas.

13
 Growing our business with
first-to-the-market solutions
Among our 2023 highlights, we became the first
U.S. financial lender to offer a direct-to-consumer
recreational vehicle (RV) and boat purchasing
experience. U.S. Bank and Rollick teamed up
to provide consumers and dealerships with
a streamlined buying experience via the
U.S. Bank® RV and Boat Marketplace, where
shoppers can search dealer inventory and apply
for financing at participating dealers nationwide.
The marketplace – available on the U.S. Bank®
website and U.S. Bank® Mobile App – is
accessible to clients and non-clients of the bank,
and all boat and RV dealers using U.S. Bank as a
CONSUMER lender can participate in the program at no cost.
Building on U.S. Bank Access
Home with a new loan program The first bank to automate
direct deposit switching
In July, we expanded access to homeownership
with the launch of U.S. Bank Access Home™ Operational improvements directly impact
Loan, a mortgage Special Purpose Credit Program our clients, for the better. One example in
(SPCP) that provides up to $12,500 in down 2023 was our new DIY direct deposit feature,
payment assistance and up to an additional $5,000 which enables clients opening new U.S. Bank®
lender credit for home buyers to buy down their checking accounts to switch their payroll direct
interest rate. Access Home Loan provides financial deposit in just minutes, as part of the bank’s new
assistance for buyers in 11 pilot areas – including enhanced account onboarding experience. The
six in California – where the minority population is time-consuming and manual process of filling
more than 50% according to census tract data. We out paperwork and finding routing and account
closed the first program loan in 12 days for a single numbers is something clients can now do without.
mother who’d been renting for 16 years. We’ve
The secure and automated process is available on
committed $100 million over the next five years to
the U.S. Bank® Mobile App and online banking and
the program. The new offering is an extension of
reaches over 85% of the U.S. workforce, including
U.S. Bank Access™ Home and U.S. Bank Access
many companies within the gig economy. In
Commitment®, our long-term approach to help
just minutes, clients can search for their payroll
close the wealth gap for underserved communities.
provider, sign into their corresponding employer
account and receive confirmation that their
payroll direct deposit has been successfully
switched. Very few banks have a feature like
this, and U.S. Bank is the first large bank to fully
automate the process and provide clients with
instant confirmation that it was successful.

14 U.S. Bancorp 2023 Annual Report | usbank.com/AR2023

A new look for two of our business lines
In 2023, U.S. Bank Wealth Management, Corporate, Commercial At a glance
and Institutional Banking (WCIB) came together to form one unit.
This expansive franchise has talented professionals with client
relationships that sometimes go back 100 years, represent $10.6
trillion in assets under custody and administration, and $454 billion
+500K wealth clients
in assets under management. Its digitally innovative products across

+30K
banking, investing, and servicing capabilities serve clients across a
diverse set of industries from manufacturing to agriculture; hospitality
to governments; asset managers, insurance companies, universities
institutional and
and wealthy families – and more.
government clients

AS S E T MANAG E ME NT

Growing our outsourced chief 54%

of bank deposits are
investment officer business from WCIB clients1

46%
The increasing complexity of portfolios and regulatory requirements,
combined with market volatility, means that many institutions are
reevaluating their approach to managing investment portfolios and
choosing to “outsource” this expertise. As part of our steadily growing of bank loans are
outsourced chief investment officer (OCIO) business – a fee-based from WCIB clients1
revenue generator for U.S. Bancorp Asset Management Inc. – we
added a head of distribution for our institutional OCIO practice, housed
within our subsidiary, PFM Asset Management LLC. The team supports
the firm’s consultant relationships, as well as not-for-profit, corporate,
public sector and Taft-Hartley clients. ~90%
of Fortune 1000®
companies choose
W E A LT H M A N A G E M E N T U.S. Bank as their
banking partner 2
Understanding young investors’ needs
Gen Z and millennial investors are having a profound impact on our
society and on investing behavior. To best help this next generation
craft a plan for building wealth, we wanted to understand how they
define wealth, and how and why they invest, so we surveyed 4,000 1. Full-year average during the year ended
active and aspiring investors across all generations. December 31, 2023.
2. Fortune and Fortune 1000 are registered
We found Gen Z views wealth differently than older generations and trademarks of Fortune Media IP Limited
will sacrifice returns to invest in causes they believe in – but many and are used under license. Fortune
and Fortune Media IP Limited are not
are unsure of how to begin investing. You can learn more about the affiliated with, and do not endorse
survey at usbank.com/younginvestors. products or services of, U.S. Bank N.A.

15
 At a glance

#1or #2
in corporate trust
markets we serve1

#5
U.S. commercial bank2

#5
2023 U.S. overall
and investment
grade bookrunner,
INSTITUTIONAL syndicated loans3

Tailored portfolio optimization

now available to CLO clients
Collateralized loan obligation (CLO) clients now have access to
#6
U.S. custodian in
comprehensive insights for faster and more effective trading with transaction processing4
our new portfolio optimization capabilities. Using a set of criteria
selected by the client, Pivot Portfolio Optimization sorts through
tens of thousands of potential portfolio combinations to identify a 1. Based on number of deals and volume
combination of investments that best advance the client’s stated in dollars for U.S. and Europe as of
January 15, 2024. Source: Greenstreet
objective – typically, maximizing the weighted average spread of the ABAlert and Refinitiv.
CLO. U.S. Bank focused research and development on two priorities:
2. Based on insured U.S.-chartered
calculation speed and seamless execution, and U.S. Bank currently commercial banks that have consolidated
has one patent granted and another pending covering Pivot Portfolio assets of $300 million or more, ranked
by consolidated assets as of September
Optimization capabilities on these critical features.
30, 2023. Source: Federal Reserve
Statistical Release.
New ETF servicing capability 3. Based on number of deals.
Source: LSEG LPC 2023.
for clients in Europe 4. As of September 30, 2023 (most recent
In the spring of 2023, we launched our new exchange-traded fund data available), per FDIC; rankings
exclude non-bank custodians, foreign
(ETF) services in Europe, along with our first client for the offering. banks, and non-FDIC banks.
U.S. Bank supports Horizon Kinetics' European version of its Inflation
Beneficiaries ETF, an actively managed fund that seeks to address one
of the most important economic and investment drivers – inflation –
by identifying unique, scalable businesses that have the potential to
thrive in an inflationary environment. The fund is structured as a UCITS
ETF and trades on Euronext Amsterdam. U.S. Bank provides clients
with a holistic offering, including fund administration, transfer agency,
depositary and global custody solutions, as well as several specialized
European exchange-traded fund services.

16 U.S. Bancorp 2023 Annual Report | usbank.com/AR2023

The heart of our operations:
our employees
When it comes to assets, our people are our most significant: they’re vital to our
success and our clients' success. That’s why we’re proud to invest in the careers
of our more than 70,000 employees through programs that empower each of us
to bring our diverse perspectives to work every day.

17
We’re honored that our efforts to create a great place to work received
wide recognition yet again in 2023.

This is the ninth U.S. Bank is one of

consecutive year we’ve the 2023 Fortune®
received this honor, and World’s Most Admired
we’re one of only two Companies™ and the
U.S.-based banks honored. No. 1 Superregional
Bank for the 13th
consecutive year.1

J.D. Power ranked

U.S. Bank #1 in California
for Retail Banking
Customer Satisfaction.2

We’re the No. 1 ranked bank

on the Fair360, formerly
DiversityInc, Top 50
Companies for Diversity®
list and No. 11 on the overall
Top 50 list.

The 2023 Disability:IN Disability Equality Index

again gave us a score of 100.

The Human Rights Campaign

Foundation’s 2023 Corporate
Equality Index® gave us a
perfect score of 100 for
the 17th consecutive year.

“World’s Most Ethical Companies” and “Ethisphere” names and marks are registered trademarks of Ethisphere LLC.
1. Fortune, ©2023 Fortune Media IP Limited. All rights reserved. Used under license. Fortune ® is a registered trademark and Fortune World’s Most
Admired Companies™ is a trademark of Fortune Media IP Limited and are used under license. Fortune and Fortune Media IP Limited are not affiliated
with, and do not endorse the products or services of, U.S. Bancorp.
2. For J.D. Power 2023 award information, visit jdpower.com/awards.

18 U.S. Bancorp 2023 Annual Report | usbank.com/AR2023

Our impact in the communities we serve
As a financial services provider, we invest our human and financial resources to help people and the planet.
You can learn more about our progress in our 2022 ESG report, with a 2023 version expected later this year.
Below are some key advancements we made in 2023.

$96.4M 360,000 $17M

in corporate contributions and employee volunteer hours pledged to nonprofits
U.S. Bank Foundation giving through annual Employee
Giving Campaign

1.5M Outstanding
rating received by U.S. Bank
$555M
individuals received committed to community
from the most recent
financial education with development financial
Community Reinvestment
a focus on underserved institutions (CDFIs) and
Act (CRA) exam1
communities other intermediaries2

$3B 98% $3.2B

in affordable housing tax equity renewable electricity sourced in renewable energy tax equity
and debt commitments for our operations3 and debt commitments

1. Community Reinvestment Act (CRA) exam by the Office of the Comptroller of the Currency (OCC) is from January 1, 2016, to December 31, 2020.
2. Figure represents total 2023 debt commitment, foundation grants and corporate contributions.
3. As of year-end 2022 (most recent data available).

19
 In communities, we again teamed up with
Freedom Alliance, Operation Homefront and
others to give back to military families. With the
help of these partners, in 2023 we donated four
homes to veterans, including U.S. Army Sergeant
Xanthin Luptak and his family, who received a
mortgage-free home through the U.S. Bank®
HOME program. In total, we’ve donated 26 homes
to veteran families since 2013. Additionally, as
part of the Driven to Serve initiative, we helped
provide payment-free vehicles to two Gold Star
families of service members who were killed in
the line of duty, and a wheelchair-accessible van
to U.S. Army Staff Sergeant Jarid Clapp, marking
Supporting excellence our 68th vehicle donation to veterans since 2018.
for our veterans The donations represent a long-term commitment
In 2023, we continued our investment in to giving back to those who serve. Since 2013,
our veterans – both on our teams and in our U.S. Bank Impact Finance has supported a range
communities. We were honored to once again be of housing for veterans nationwide, totaling over
named to the annual Military Times Best for Vets: 3,600 units, $575 million in equity and $588
Employers list, which we’ve appeared on every million in debt commitments in investments –
year since it began in 2010. This year, we climbed and we expect to invest in more veteran-focused
to No. 3 on the list, which prioritizes recruitment projects in 2024.
and employment practices, as well as retention
and support programs, in its scoring and final
rankings. U.S. Bank actively recruits military and
veteran employees through partnerships with
Hiring Our Heroes and a dedicated careers page
that matches military skills and training to open
roles. We also support our military and veteran
employees through expansive leave policies, iPads
for families to stay connected during deployments
and our award-winning, 5,000-member Proud
to Serve business resource group. These efforts
also earned us recognition from Forbes® as one of
America's Best Employers for Veterans 2023.

Receive a digital copy of the Annual Report.

To help to reduce the use of environmental resources and promote environmental
stewardship, the past three years we’ve partnered with Arbor Day to donate
20
23 $1 for every shareholder who opts for electronic delivery of our Annual Report.
Each dollar supports the planting of a new tree. In 2023, we were able to donate
Annual
Report

$5,570 as a result – up from $3,200 the year prior – and we are continuing that
partnership again this year. If you haven’t already done so, you can sign up to
receive electronic versions of our Annual Report at usbank.com/ElectronicAR.

20 U.S. Bancorp 2023 Annual Report | usbank.com/AR2023

The following pages discuss in detail the financial results we achieved in 2023 –
results that reflect how we are creating the future now.
The following information appears in accordance with the Private Securities Litigation Reform Act of 1995:
This report contains forward-looking statements about • Impacts of pandemics, natural disasters, terrorist activities,
U.S. Bancorp. Statements that are not historical or current civil unrest, international hostilities and geopolitical events;
facts, including statements about beliefs and expectations, • Impacts of supply chain disruptions, rising inflation, slower
are forward-looking statements and are based on the information growth or a recession;
available to, and assumptions and estimates made by, management
• Failure to execute on strategic or operational plans;
as of the date hereof. These forward-looking statements cover,
among other things, future economic conditions and the anticipated • Effects of mergers and acquisitions and related integration;
future revenue, expenses, financial condition, asset quality, • Effects of critical accounting policies and judgments;
capital and liquidity levels, plans, prospects and operations of
• Effects of changes in or interpretations of tax laws and regulations;
U.S. Bancorp. Forward-looking statements often use words such
as “anticipates,” “targets,” “expects,” “hopes,” “estimates,” • Management’s ability to effectively manage credit risk, market risk,
“projects,” “forecasts,” “intends,” “plans,” “goals,” “believes,” operational risk, compliance risk, strategic risk, interest rate risk,
“continue” and other similar expressions or future or conditional liquidity risk and reputation risk; and
verbs such as “will,” “may,” “might,” “should,” “would” and “could.” • The risks and uncertainties more fully discussed in the section
Forward-looking statements involve inherent risks and uncertainties entitled “Risk Factors” of this report.
that could cause actual results to differ materially from those set In addition, U.S. Bancorp’s acquisition of MUFG Union Bank,
forth in forward-looking statements, including the following risks N.A. presents risks and uncertainties, including, among others:
and uncertainties: the risk that any revenue synergies and other anticipated benefits
• Deterioration in general business and economic conditions or of the acquisition may not be realized or may take longer than
turbulence in domestic or global financial markets, which could anticipated to be realized.
adversely affect U.S. Bancorp’s revenues and the values of its In addition, factors other than these risks also could adversely
assets and liabilities, reduce the availability of funding to certain affect U.S. Bancorp’s results, and the reader should not consider
financial institutions, lead to a tightening of credit, and increase these risks to be a complete set of all potential risks or uncertainties.
stock price volatility; Readers are cautioned not to place undue reliance on any forward-
• Turmoil and volatility in the financial services industry, including looking statements. Forward-looking statements speak only as
failures or rumors of failures of other depository institutions, of the date hereof, and U.S. Bancorp undertakes no obligation
which could affect the ability of depository institutions, including to update them in light of new information or future events.
U.S. Bank National Association, to attract and retain depositors,
22 Management’s Discussion and Analysis
and could affect the ability of financial services providers, including
U.S. Bancorp, to borrow or raise capital; 22 Overview
• Actions taken by governmental agencies to stabilize the financial 24 Statement of Income Analysis
system and the effectiveness of such actions; 28 Balance Sheet Analysis
• Changes to regulatory capital, liquidity and resolution-related 35 Corporate Risk Profile
requirements applicable to large banking organizations in response
to recent developments affecting the banking sector; 35 Overview

• Changes to statutes, regulations, or regulatory policies or 36 Credit Risk Management

practices, including capital and liquidity requirements, and the 48 Residual Value Risk Management
enforcement and interpretation of such laws and regulations, and 48 Operational Risk Management
U.S. Bancorp’s ability to address or satisfy those requirements and
other requirements or conditions imposed by regulatory entities; 49 Compliance Risk Management

• Changes in interest rates; 49 Interest Rate Risk Management

• Increases in unemployment rates; 50 Market Risk Management
• Deterioration in the credit quality of U.S. Bancorp's loan portfolios 51 Liquidity Risk Management
or in the value of the collateral securing those loans; 54 Capital Management
• Risks related to originating and selling mortgages, including 56 Line of Business Financial Review
repurchase and indemnity demands, and related to U.S. Bancorp’s
59 Non-GAAP Financial Measures
role as a loan servicer;
• Impacts of current, pending or future litigation and 61 Accounting Changes
governmental proceedings; 61 Critical Accounting Policies
• Increased competition from both banks and non-banks; 63 Controls and Procedures
• Effects of climate change and related physical and transition risks; 64 Reports of Management and Independent Accountants
• Changes in customer behavior and preferences and the ability to 68 Consolidated Financial Statements and Notes
implement technological changes to respond to customer needs
138 Consolidated Daily Average Balance Sheet and
and meet competitive demands;
Related Yields and Rates
• Breaches in data security;
139 Supplemental Financial Data
• Failures or disruptions in or breaches of U.S. Bancorp’s operational,
140 Company Information
technology or security systems or infrastructure,
or those of third parties; 156 Managing Committee
• Failures to safeguard personal information; 158 Directors

21
Management’s Discussion and Analysis
Overview
U.S. Bancorp and its subsidiaries (the “Company”) Financial performance for 2023, compared with 2022,
continued to demonstrate financial strength and stability as included the following:
2023 financial results showcased solid fee revenue growth, • Net interest income increased $2.7 billion (18.1 percent)
prudent expense management, and the accretion of due to higher interest rates on earning assets and the
common equity tier 1 capital of 150 basis points. Disruption MUB acquisition, partially offset by the impact of deposit
in the banking industry in early 2023 reinforced the mix and pricing;
Company's focus of maintaining a well-diversified business
• Noninterest income increased $1.2 billion (12.3 percent)
with an appropriate risk profile and diversified deposit base.
primarily due to higher commercial products revenue,
During 2023, the Company continued to prudently manage
payment services revenue, trust and investment
its balance sheet by reducing its exposure to certain capital-
management fees and other noninterest income, partially
intensive assets and focusing on capital-efficient growth.
offset by losses on investment securities;
MUFG Union Bank Acquisition On December 1, 2022, the • Noninterest expense increased $4.0 billion (26.6 percent),
Company acquired MUFG Union Bank N.A.’s core regional reflecting increased merger and integration charges and
banking franchise (“MUB”) from Mitsubishi UFJ Financial operating expenses related to the MUB acquisition,
Group, Inc. ("MUFG"). Pursuant to the terms of the Share including core deposit intangible amortization expense, as
Purchase Agreement, the Company acquired all of the well as increases in compensation and employee benefits
issued and outstanding shares of common stock of MUB for expense to support business growth and higher other
a purchase price consisting of $5.5 billion in cash and noninterest expense due to a Federal Deposit Insurance
approximately 44 million shares of the Company’s common Corporation ("FDIC") special assessment;
stock. The Company also received additional MUB cash of
• The provision for credit losses increased $298 million
$3.5 billion upon completion of the acquisition, which is
(15.1 percent), driven by normalizing credit losses and
required to be repaid to MUFG on or prior to the fifth
stress in commercial real estate, partially offset by relative
anniversary date of the completion of the purchase. On
stability in the economic outlook;
August 3, 2023, the Company completed a debt/equity
conversion with MUFG. As a result, the Company repaid • Average loans increased $47.7 billion (14.3 percent)
$936 million of its debt obligation from the proceeds of the primarily driven by the impact of the MUB acquisition and
issuance of 24 million shares of common stock of the growth in most loan categories; and
Company to an affiliate of MUFG (the “Debt/Equity • Average deposits increased $43.3 billion (9.4 percent),
Conversion”). After the Debt/Equity Conversion, the driven by increases in average total savings deposits and
Company had a remaining repayment obligation to MUFG of time deposits including the impact of the MUB acquisition,
$2.6 billion. On May 26, 2023, the Company merged MUB partially offset by a decrease in average noninterest
into U.S. Bank National Association ("USBNA"), the bearing deposits.
Company’s primary banking subsidiary. During 2023, the
Credit Quality The Company continues to prudently
Company successfully completed the integration of the MUB
manage credit underwriting.
business and system conversion. Additionally, as a
condition of the regulatory approval, the Company • The allowance for credit losses was $7.8 billion at
committed to meet requirements applicable to Category II December 31, 2023, an increase of $435 million
banking organizations by the earlier of (i) the date required compared with December 31, 2022. The increase was
under the federal banking regulators' Tailoring Rules; and primarily driven by normalizing credit losses, credit card
(ii) December 31, 2024, if the Federal Reserve notified the balance growth and commercial real estate credit quality.
Company by January 1, 2024, that the Company must • Nonperforming assets were $1.5 billion at December 31,
comply with those requirements. During 2023, the Company 2023, an increase of $478 million compared with
took several actions to optimize the balance sheet and December 31, 2022. The increase was primarily due to
reduce risk-weighted assets to enhance capital and reduce higher nonperforming commercial real estate and
the risk profile of the balance sheet. As a result, on October commercial loans, partially offset by a decrease in
16, 2023, the Federal Reserve granted the Company full nonperforming residential mortgages.
relief from this commitment. The Company’s 2023 results • Net charge-offs were $1.9 billion in 2023, an increase of
reflect the impacts of balance sheet and capital $842 million compared with 2022. The increase reflected
management actions and the full financial results of the higher charge-offs in most loan categories consistent with
acquired business. normalizing credit conditions and adverse conditions in
Financial Performance The Company earned $5.4 billion commercial real estate.
in 2023, or $3.27 per diluted common share, compared with
$5.8 billion, or $3.69 per diluted common share in 2022.

22 U.S. Bancorp 2023 Annual Report

 TABLE 1 Selected Financial Data
Year Ended December 31
(Dollars and Shares in Millions, Except Per Share Data) 2023 2022 2021
Condensed Income Statement
Net interest income $ 17,396 $ 14,728 $ 12,494
Taxable-equivalent adjustment(a) 131 118 106
Net interest income (taxable-equivalent basis)(b) 17,527 14,846 12,600
Noninterest income 10,617 9,456 10,227
Total net revenue 28,144 24,302 22,827
Noninterest expense 18,873 14,906 13,728
Provision for credit losses 2,275 1,977 (1,173)
Income before taxes 6,996 7,419 10,272
Income taxes and taxable-equivalent adjustment 1,538 1,581 2,287
Net income 5,458 5,838 7,985
Net (income) loss attributable to noncontrolling interests (29) (13) (22)
Net income attributable to U.S. Bancorp $ 5,429 $ 5,825 $ 7,963
Net income applicable to U.S. Bancorp common shareholders $ 5,051 $ 5,501 $ 7,605
Per Common Share
Earnings per share $ 3.27 $ 3.69 $ 5.11
Diluted earnings per share 3.27 3.69 5.10
Dividends declared per share 1.93 1.88 1.76
Book value per share(c) 31.13 28.71 32.71
Market value per share 43.28 43.61 56.17
Average common shares outstanding 1,543 1,489 1,489
Average diluted common shares outstanding 1,543 1,490 1,490
Financial Ratios
Return on average assets .82% .98% 1.43%
Return on average common equity 10.8 12.6 16.0
Net interest margin (taxable-equivalent basis)(a) 2.90 2.72 2.49
Efficiency ratio(b) 66.7 61.4 60.4
Net charge-offs as a percent of average loans outstanding .50 .32 .23
Average Balances
Loans $ 381,275 $ 333,573 $ 296,965
Loans held for sale 2,461 3,829 8,024
Investment securities(d) 162,757 169,442 154,702
Earning assets 605,199 545,343 506,141
Assets 663,440 592,149 556,532
Noninterest-bearing deposits 107,768 120,394 127,204
Deposits 505,663 462,384 434,281
Short-term borrowings 34,141 25,740 14,774
Long-term debt 44,142 33,114 36,682
Total U.S. Bancorp shareholders’ equity 53,660 50,416 53,810
Period End Balances
Loans $ 373,835 $ 388,213 $ 312,028
Investment securities 153,751 161,650 174,821
Assets 663,491 674,805 573,284
Deposits 512,312 524,976 456,083
Long-term debt 51,480 39,829 32,125
Total U.S. Bancorp shareholders’ equity 55,306 50,766 54,918
Asset Quality
Nonperforming assets $ 1,494 $ 1,016 $ 878
Allowance for credit losses 7,839 7,404 6,155
Allowance for credit losses as a percentage of period-end loans 2.10% 1.91% 1.97%
Capital Ratios
Common equity tier 1 capital 9.9% 8.4% 10.0%
Tier 1 capital 11.5 9.8 11.6
Total risk-based capital 13.7 11.9 13.4
Leverage 8.1 7.9 8.6
Total leverage exposure 6.6 6.4 6.9
Tangible common equity to tangible assets(b) 5.3 4.5 6.8
Tangible common equity to risk-weighted assets(b) 7.7 6.0 9.2
Common equity tier 1 capital to risk-weighted assets, reflecting the full implementation of the
current expected credit losses methodology(b) 9.7 8.1 9.6

(a) Based on a federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes.
(b) See Non-GAAP Financial Measures beginning on page 59.
(c) Calculated as U.S. Bancorp common shareholders’ equity divided by common shares outstanding at end of the period.
(d) Excludes unrealized gains and losses on available-for-sale investment securities and any premiums or discounts recorded related to the transfer of investment securities at fair
value from available-for-sale to held-to-maturity.

23
Capital Management At December 31, 2023, all of the Total net revenue for 2023 was $3.8 billion (15.8 percent)
Company’s regulatory capital ratios exceeded regulatory higher than 2022, reflecting an 18.1 percent increase in net
“well-capitalized” requirements. interest income and a 12.3 percent increase in noninterest
• The Company’s common equity tier 1 capital ratio was 9.9 income. The increase in net interest income from the prior
percent at December 31, 2023. year was primarily due to higher interest rates on earning
assets and the MUB acquisition, partially offset by the
The Company's financial strength, diversified business impact of deposit mix and pricing. The increase in
model and strong credit quality position it well for 2024. The noninterest income reflected higher commercial products
Company believes it is well positioned to continue to deliver revenue, payment services revenue, trust and investment
strong returns on tangible common equity, is appropriately management fees and other noninterest income, partially
reserved for a potential macroeconomic slowdown, and offset by losses on investment securities.
remains confident in its strategy for future growth and Noninterest expense in 2023 was $4.0 billion (26.6
expansion. The Company is seeing positive momentum percent) higher than 2022, reflecting increased merger and
across its fee-based businesses, as it deepens its most integration charges and operating expenses related to the
profitable client relationships and further executes on MUB acquisition, including core deposit intangible
revenue growth opportunities resulting from the MUB amortization expense, as well as increases in compensation
acquisition. The Company is working to effectively manage and employee benefits expense to support business growth
its balance sheet for continued capital-efficient growth as it and higher other noninterest expense due to the FDIC
maintains its disciplined, through-the-cycle approach to special assessment charges.
credit risk management. The Company's growth strategy
remains focused on supporting the needs of and creating Results for 2022 Compared With 2021 For discussion
value for its customers, communities and shareholders. related to changes in financial condition and results of
operations for 2022 compared with 2021, refer to
Earnings Summary The Company reported net income “Management’s Discussion and Analysis” in the Company’s
attributable to U.S. Bancorp of $5.4 billion in 2023, or $3.27 Annual Report for the year ended December 31, 2022,
per diluted common share, compared with $5.8 billion, or included as Exhibit 13 to the Company’s Form 10-K filed
$3.69 per diluted common share, in 2022. Return on with the Securities and Exchange Commission ("SEC") on
average assets and return on average common equity were February 27, 2023.
0.82 percent and 10.8 percent, respectively, in 2023,
compared with 0.98 percent and 12.6 percent, respectively, Statement of Income Analysis
in 2022. The results for 2023 included the full financial
results of the acquisition of MUB, while the results for 2022 Net Interest Income Net interest income, on a taxable-
reflected one month of operating results of MUB. The results equivalent basis, was $17.5 billion in 2023, compared with
for 2023 included the impacts of $1.0 billion of merger and $14.8 billion in 2022. The $2.7 billion (18.1 percent)
integration charges, $734 million of FDIC special increase in 2023 compared with 2022 was primarily due to
assessment charges, $243 million of provision for credit higher interest rates on earning assets and the acquisition of
losses related to balance sheet repositioning and capital MUB, partially offset by the impact of deposit mix and
management actions, $140 million of securities losses pricing. Average earning assets were $59.9 billion (11.0
related to balance sheet repositioning, a $110 million percent) higher in 2023, compared with 2022, reflecting
charitable contribution to support a community benefit plan increases in loans and interest-bearing deposits with banks,
related to the acquisition, and a $70 million discrete tax partially offset by a decrease in investment securities. The
benefit. Combined, these items decreased 2023 diluted net interest margin, on a taxable-equivalent basis, in 2023
earnings per common share by $1.04. The results for 2022 was 2.90 percent, compared with 2.72 percent in 2022. The
included $399 million of losses primarily resulting from increase in the net interest margin in 2023, compared with
interest rate economic hedges related to the MUB 2022, was primarily due to the impact of higher rates on
acquisition, $329 million of merger and integration charges, earning assets and the acquisition of MUB, partially offset
and $791 million of provision for credit losses related to by the impact of deposit mix and pricing. Refer to the
acquired loans and balance sheet repositioning and capital “Interest Rate Risk Management” section for further
management actions. Combined, these items decreased information on the sensitivity of the Company’s net interest
2022 diluted earnings per common share by $0.76. income to changes in interest rates.

24 U.S. Bancorp 2023 Annual Report

 TABLE 2 Analysis of Net Interest Income(a)
2023 2022
Year Ended December 31 (Dollars in Millions) 2023 2022 2021 v 2022 v 2021

Components of Net Interest Income

Income on earning assets (taxable-equivalent basis) $ 30,144 $ 18,066 $ 13,593 $ 12,078 $ 4,473
Expense on interest-bearing liabilities (taxable-equivalent basis) 12,617 3,220 993 9,397 2,227
Net interest income (taxable-equivalent basis)(b) $ 17,527 $ 14,846 $ 12,600 $ 2,681 $ 2,246
Net interest income, as reported $ 17,396 $ 14,728 $ 12,494 $ 2,668 $ 2,234
Average Yields and Rates Paid
Earning assets yield (taxable-equivalent basis) 4.98% 3.31% 2.69% 1.67% .62%
Rate paid on interest-bearing liabilities (taxable-equivalent basis) 2.65 .80 .28 1.85 .52
Gross interest margin (taxable-equivalent basis) 2.33% 2.51% 2.41% (.18)% .10%
Net interest margin (taxable-equivalent basis) 2.90% 2.72% 2.49% .18% .23%
Average Balances
Investment securities(c) $ 162,757 $ 169,442 $ 154,702 $ (6,685) $ 14,740
Loans 381,275 333,573 296,965 47,702 36,608
Earning assets 605,199 545,343 506,141 59,856 39,202
Noninterest-bearing deposits 107,768 120,394 127,204 (12,626) (6,810)
Interest-bearing deposits 397,895 341,990 307,077 55,905 34,913
Total deposits 505,663 462,384 434,281 43,279 28,103
Interest-bearing liabilities 476,178 400,844 358,533 75,334 42,311
(a) Interest and rates are presented on a fully taxable-equivalent basis based on a federal income tax rate of 21 percent.
(b) See Non-GAAP Financial Measures beginning on page 59.
(c) Excludes unrealized gains and losses on available-for-sale investment securities and any premiums or discounts recorded related to the transfer of investment securities at fair
value from available-for-sale to held-to-maturity.

Average total loans were $381.3 billion in 2023, primarily due to balance sheet repositioning and capital
compared with $333.6 billion in 2022. The $47.7 billion (14.3 management actions, along with lower installment loans.
percent) increase was due to growth in the Company's Average investment securities in 2023 were $6.7 billion
legacy loan portfolio as well as balances from the MUB (3.9 percent) lower than in 2022, primarily due to balance
acquisition. Increases in residential mortgages, commercial sheet repositioning and liquidity management.
real estate loans, commercial loans and credit card loans Average total deposits for 2023 were $43.3 billion (9.4
were partially offset by a decrease in other retail loans. percent) higher than 2022. Average total savings deposits
Average residential mortgages increased $31.2 billion (36.8 were $39.8 billion (12.8 percent) higher in 2023, compared
percent), driven by the impact of the MUB acquisition, with 2022, driven by increases in Wealth, Corporate,
partially offset by the impact of a sale of residential Commercial and Institutional Banking, and Consumer and
mortgages in the second quarter of 2023 as part of balance Business Banking balances, including the impact of the
sheet repositioning and capital management actions. MUB acquisition. Average time deposits for 2023 were
Average commercial real estate loans increased $13.5 $16.1 billion (52.7 percent) higher than 2022, mainly due to
billion (33.0 percent), primarily due to the impact of the MUB the acquisition of MUB and increases in Consumer and
acquisition. Average commercial loans increased $11.1 Business Banking balances. Changes in time deposits are
billion (9.0 percent), primarily due to higher utilization driven primarily related to those deposits managed as an
by working capital needs of corporate customers, slower alternative to other funding sources, based largely on
payoffs given higher volatility in the capital markets, as well relative pricing and liquidity characteristics. Average
as core growth and the impact related to the MUB noninterest-bearing deposits were $12.6 billion (10.5
acquisition. Average credit card loans increased $3.1 billion percent) lower in 2023, compared with 2022, driven by
(13.2 percent) primarily due to higher spend volume and decreases in Wealth, Corporate, Commercial and
lower payment rates. Average other retail loans decreased Institutional Banking balances, partially offset by the impact
$11.2 billion (18.5 percent), driven by lower auto loans of the MUB acquisition.

25
 TABLE 3 Net Interest Income — Changes Due to Rate and Volume(a)
2023 v 2022 2022 v 2021
Year Ended December 31 (Dollars in Millions) Volume Yield/Rate Total Volume Yield/Rate Total
Increase (decrease) in
Interest Income
Investment securities $ (136) $ 1,245 $ 1,109 $ 231 $ 792 $ 1,023
Loans held for sale (72) 18 (54) (121) 90 (31)
Loans
Commercial 389 3,933 4,322 547 1,109 1,656
Commercial real estate 546 1,183 1,729 73 363 436
Residential mortgages 1,019 511 1,530 336 (38) 298
Credit card 340 506 846 193 112 305
Other retail (424) 731 307 50 116 166
Total loans 1,870 6,864 8,734 1,199 1,662 2,861
Interest-bearing deposits with banks 313 1,709 2,022 (8) 525 517
Other earning assets 76 191 267 8 95 103
Total earning assets 2,051 10,027 12,078 1,309 3,164 4,473
Interest Expense
Interest-bearing deposits
Interest checking 28 1,029 1,057 3 250 253
Money market savings 388 4,046 4,434 16 1,005 1,021
Savings accounts (2) 82 80 1 2 3
Time deposits 192 1,140 1,332 23 252 275
Total interest-bearing deposits 606 6,297 6,903 43 1,509 1,552
Short-term borrowings 186 1,223 1,409 52 446 498
Long-term debt 259 826 1,085 (59) 236 177
Total interest-bearing liabilities 1,051 8,346 9,397 36 2,191 2,227
Increase (decrease) in net interest income $ 1,000 $ 1,681 $ 2,681 $ 1,273 $ 973 $ 2,246
(a) This table shows the components of the change in net interest income by volume and rate on a taxable-equivalent basis based on a federal income tax rate of 21 percent. This
table does not take into account the level of noninterest-bearing funding, nor does it fully reflect changes in the mix of assets and liabilities. The change in interest not solely due to
changes in volume or rates has been allocated on a pro-rata basis to volume and yield/rate.

Provision for Credit Losses The provision for credit losses 2022 included the impacts of recognizing an initial provision
reflects changes in economic conditions and the size and for credit losses related to the MUB acquisition and balance
credit quality of the entire portfolio of loans. The Company sheet optimization activities in the fourth quarter of 2022,
maintains an allowance for credit losses considered along with strong loan growth in the legacy portfolio and
appropriate by management for expected losses, based on increasing economic uncertainty. Net charge-offs increased
factors discussed in the “Analysis and Determination of $842 million (79.2 percent) in 2023, compared with 2022,
Allowance for Credit Losses” section. reflecting higher charge-offs in most loan categories
The provision for credit losses was $2.3 billion in 2023, consistent with normalizing credit conditions and adverse
compared with $2.0 billion in 2022. The $298 million (15.1 conditions in commercial real estate.
percent) increase was driven by normalizing credit losses Refer to “Corporate Risk Profile” for further information
and stress in commercial real estate, partially offset by on the provision for credit losses, net charge-offs,
relative stability in the economic outlook. The provision for nonperforming assets and other factors considered by the
credit losses in 2023 included the impact of balance sheet Company in assessing the credit quality of the loan portfolio
repositioning and capital management actions taken in the and establishing the allowance for credit losses.
second quarter of 2023. The provision for credit losses in

26 U.S. Bancorp 2023 Annual Report

 TABLE 4 Noninterest Income
2023 2022
Year Ended December 31 (Dollars in Millions) 2023 2022 2021 v 2022 v 2021
Card revenue $ 1,630 $ 1,512 $ 1,507 7.8% .3%
Corporate payment products revenue 759 698 575 8.7 21.4
Merchant processing services 1,659 1,579 1,449 5.1 9.0
Trust and investment management fees 2,459 2,209 1,832 11.3 20.6
Service charges 1,306 1,298 1,338 .6 (3.0)
Commercial products revenue 1,372 1,105 1,102 24.2 .3
Mortgage banking revenue 540 527 1,361 2.5 (61.3)
Investment products fees 279 235 239 18.7 (1.7)
Securities gains (losses), net (145) 20 103 * (80.6)
Other 758 273 721 * (62.1)
(a)
Total noninterest income $10,617 $ 9,456 $10,227 12.3 % (7.5)%
* Not meaningful
(a) Includes $399 million of losses primarily related to interest rate economic hedges, entered into after regulatory approval for the MUB acquisition was obtained, to manage the
impact of interest rate volatility on capital prior to closing the transaction.

Noninterest Income Noninterest income in 2023 was $10.6 with 2022, driven by a 7.8 percent increase in card revenue
billion, compared with $9.5 billion in 2022. The $1.2 billion and a 5.1 percent increase in merchant processing services
(12.3 percent) increase in 2023 from 2022 reflected higher revenue, both due to higher spend volume. Corporate
commercial products revenue, payment services revenue, payment products revenue increased 8.7 percent due to
trust and investment management fees and other product mix. Trust and investment management fees
noninterest income, partially offset by losses on the sale of increased 11.3 percent primarily due to the acquisition of
investment securities related to balance sheet repositioning. MUB and core business growth. Other noninterest income
Commercial products revenue increased 24.2 percent was higher in 2023, compared with 2022, primarily due to
primarily due to higher trading revenue, commercial loan the impact in 2022 of interest rate economic hedges related
fees, corporate bond fees and the acquisition of MUB. to the MUB acquisition.
Payment services revenue increased in 2023, compared

TABLE 5 Noninterest Expense

2023 2022
Year Ended December 31 (Dollars in Millions) 2023 2022 2021 v 2022 v 2021
Compensation and employee benefits $10,416 $ 9,157 $ 8,728 13.7% 4.9%
Net occupancy and equipment 1,266 1,096 1,048 15.5 4.6
Professional services 560 529 492 5.9 7.5
Marketing and business development 726 456 366 59.2 24.6
Technology and communications 2,049 1,726 1,728 18.7 (.1)
Other intangibles 636 215 159 * 35.2
Other 2,211 1,398 1,207 58.2 15.8
Total before merger and integration charges 17,864 14,577 13,728 22.5 6.2
Merger and integration charges 1,009 329 — * *
Total noninterest expense $18,873 $14,906 $13,728 26.6% 8.6%
Efficiency ratio(a) 66.7% 61.4% 60.4%
* Not meaningful
(a) See Non-GAAP Financial Measures beginning on page 59.

27
Noninterest Expense Noninterest expense in 2023 was Balance Sheet Analysis
$18.9 billion, compared with $14.9 billion in 2022. The
Company’s efficiency ratio was 66.7 percent in 2023, Average earning assets were $605.2 billion in 2023,
compared with 61.4 percent in 2022. The $4.0 billion (26.6 compared with $545.3 billion in 2022. The increase in
percent) increase in noninterest expense in 2023 over 2022 average earning assets of $59.9 billion (11.0 percent) was
reflected the impact of increased merger and integration primarily due to increases in loans of $47.7 billion (14.3
charges, as well as operating expenses related to the MUB percent) and interest-bearing deposits with banks of $17.6
acquisition, higher compensation and employee benefits billion (55.9 percent), partially offset by a decrease in
expense, and higher other intangibles and other noninterest investment securities of $6.7 billion (3.9 percent).
expense. Compensation and employee benefits expense For average balance information, refer to the "Net
increased 13.7 percent in 2023 over 2022, primarily due to Interest Income" section in Statement of Income Analysis
MUB expense as well as merit increases and hiring to and Consolidated Daily Average Balance Sheet and Related
support business growth. Other intangibles expense Yields and Rates on page 138.
increased primarily due to the core deposit intangible
Loans The Company’s loan portfolio was $373.8 billion at
created as a result of the MUB acquisition. Other
December 31, 2023, compared with $388.2 billion at
noninterest expense increased 58.2 percent primarily due to
December 31, 2022, a decrease of $14.4 billion (3.7
the $734 million FDIC special assessment charge.
percent). The decrease was driven by decreases in other
Income Tax Expense The provision for income taxes was retail loans of $10.5 billion (19.1 percent), commercial loans
$1.4 billion (an effective rate of 20.5 percent) in 2023, of $3.8 billion (2.8 percent), commercial real estate loans of
compared with $1.5 billion (an effective rate of 20.0 percent) $2.0 billion (3.7 percent) and residential mortgages of $315
in 2022. million (0.3 percent), partially offset by an increase in credit
For further information on income taxes, refer to Note 19 card loans of $2.3 billion (8.6 percent). Table 6 provides a
of the Notes to Consolidated Financial Statements. summary of the loan distribution by product type, while
Table 7 provides a summary of the selected loan maturity
distribution by loan category.

28 U.S. Bancorp 2023 Annual Report

 TABLE 6 Loan Portfolio Distribution
2023 2022
Percent Percent
At December 31 (Dollars in Millions) Amount of Total Amount of Total

Commercial
Commercial $ 127,676 34.2% $ 131,128 33.8%
Lease financing 4,205 1.1 4,562 1.2
Total commercial 131,881 35.3 135,690 35.0
Commercial Real Estate
Commercial mortgages 41,934 11.2 43,765 11.3
Construction and development 11,521 3.1 11,722 3.0
Total commercial real estate 53,455 14.3 55,487 14.3
Residential Mortgages
Residential mortgages 108,605 29.0 107,858 27.8
Home equity loans, first liens 6,925 1.9 7,987 2.0
Total residential mortgages 115,530 30.9 115,845 29.8
Credit Card 28,560 7.6 26,295 6.8
Other Retail
Retail leasing 4,135 1.1 5,519 1.4
Home equity and second mortgages 13,056 3.5 12,863 3.3
Revolving credit 3,668 1.0 3,983 1.0
Installment 13,889 3.7 14,592 3.8
Automobile 9,661 2.6 17,939 4.6
Total other retail 44,409 11.9 54,896 14.1
Total loans $ 373,835 100.0% $ 388,213 100.0%

TABLE 7 Selected Loan Maturity Distribution

Over One Over Five
One Year Through Through Over Fifteen
At December 31, 2023 (Dollars in Millions) or Less Five Years Fifteen Years Years Total
Commercial $ 37,097 $ 85,548 $ 9,055 $ 181 $ 131,881
Commercial real estate 14,724 23,149 6,870 8,712 (a)
53,455
Residential mortgages 182 2,125 6,572 106,651 115,530
Credit card 28,560 — — — 28,560
Other retail 2,367 12,561 13,342 16,139 44,409
Total loans $ 82,930 $ 123,383 $ 35,839 $ 131,683 $ 373,835

Total of loans due after one year with:

Predetermined Floating
Interest Rates Interest Rates
Commercial $ 13,786 $ 80,998
Commercial real estate 12,585 26,147
Residential mortgages 63,080 52,267
Credit card — —
Other retail 29,359 12,683
Total $ 118,810 $ 172,095
(a) Primarily represents construction loans for single-family residences or loans guaranteed by the Small Business Administration.

29
 TABLE 8 Commercial Loans by Industry Group and Geography
2023 2022
Percent Percent
At December 31 (Dollars in Millions) Loans of Total Loans of Total

Industry Group
Financial institutions $ 20,016 15.2% $ 17,381 12.8%
Real-estate related 19,108 14.5 19,539 14.4
Personal, professional and commercial services 10,273 7.8 10,106 7.5
Healthcare 8,240 6.2 8,536 6.3
Automotive 6,678 5.1 7,154 5.3
Media and entertainment 6,265 4.8 5,867 4.3
Capital goods 5,315 4.0 5,332 3.9
Retail 4,970 3.8 5,128 3.8
Transportation 4,467 3.4 4,988 3.7
Food and beverage 4,053 3.1 5,574 4.1
Technology 3,963 3.0 5,425 4.0
Energy 3,744 2.8 3,811 2.8
Power 3,435 2.6 4,945 3.6
Metals and mining 3,332 2.5 3,700 2.7
Education and non-profit 3,330 2.5 3,609 2.7
State and municipal government 3,217 2.4 3,240 2.4
Building materials 3,008 2.3 3,293 2.4
Agriculture 1,778 1.3 1,909 1.4
Other 16,689 12.7 16,153 11.9
Total $ 131,881 100.0% $ 135,690 100.0%
Geography
California $ 21,275 16.1% $ 23,736 17.5%
New York 9,393 7.1 8,989 6.6
Texas 9,092 6.9 10,244 7.6
Illinois 6,861 5.2 7,626 5.6
Minnesota 6,365 4.8 6,707 4.9
Ohio 4,291 3.3 4,497 3.3
Wisconsin 4,129 3.1 4,112 3.0
Colorado 3,675 2.8 3,613 2.7
Washington 3,604 2.7 3,721 2.7
Missouri 3,454 2.6 3,503 2.6
All other states 59,742 45.4 58,942 43.5
Total $ 131,881 100.0% $ 135,690 100.0%

Commercial Commercial loans, including lease financing, decreased demand as corporate customers accessed the
decreased $3.8 billion (2.8 percent) at December 31, 2023, capital markets.
compared with December 31, 2022, primarily due to

30 U.S. Bancorp 2023 Annual Report

 TABLE 9 Commercial Real Estate Loans by Property Type and Geography
2023 2022
Percent Percent
At December 31 (Dollars in Millions) Loans of Total Loans of Total

Property Type
Multi-family $ 17,786 33.3% $ 16,722 30.1%
Business owner occupied 10,795 20.2 11,487 20.7
Office 6,948 13.0 7,239 13.1
Industrial 5,608 10.5 5,258 9.5
Residential land and development 4,419 8.3 4,454 8.0
Retail 3,806 7.1 4,011 7.2
Lodging 1,661 3.1 1,932 3.5
Other 2,432 4.5 4,384 7.9
Total $ 53,455 100.0% $ 55,487 100.0%
Geography
California $ 20,130 37.7% $ 22,250 40.1%
Washington 4,245 7.9 4,235 7.6
Texas 2,669 5.0 2,337 4.2
Florida 1,843 3.4 1,276 2.3
Oregon 1,809 3.4 1,622 2.9
Illinois 1,516 2.8 1,830 3.3
Minnesota 1,497 2.8 1,470 2.7
Colorado 1,476 2.8 1,648 3.0
New York 1,273 2.4 2,547 4.6
Wisconsin 1,266 2.4 1,236 2.2
All other states 15,731 29.4 15,036 27.1
Total $ 53,455 100.0% $ 55,487 100.0%

Commercial Real Estate The Company’s portfolio of $10.6 billion and $13.8 billion at December 31, 2023 and
commercial real estate loans, which includes commercial 2022, respectively.
mortgages and construction and development loans, The Company also finances the operations of real estate
decreased $2.0 billion (3.7 percent) at December 31, 2023, developers and other entities with operations related to real
compared with December 31, 2022. The decrease was estate. These loans are not secured directly by real estate
primarily due to payoffs exceeding a reduced level of new but have similar characteristics to commercial real estate
originations. Table 9 provides a summary of commercial real loans. These loans were included in the commercial loan
estate loans by property type and geographical location. category and totaled $19.1 billion and $19.5 billion at
The Company’s commercial mortgage and construction December 31, 2023 and 2022, respectively.
and development loans had unfunded commitments of

31
 TABLE 10 Residential Mortgages by Geography
2023 2022
Percent Percent
At December 31 (Dollars in Millions) Loans of Total Loans of Total
California $ 52,584 45.5% $ 53,967 46.6%
Washington 6,678 5.8 6,343 5.5
Colorado 3,881 3.4 4,192 3.6
Florida 3,767 3.3 3,946 3.4
Illinois 3,630 3.1 3,592 3.1
Minnesota 3,600 3.1 3,692 3.2
Texas 3,287 2.8 2,801 2.4
Arizona 3,134 2.7 3,178 2.7
New York 2,726 2.4 2,315 2.0
Massachusetts 2,680 2.3 2,536 2.2
All other states 29,563 25.6 29,283 25.3
Total $ 115,530 100.0% $ 115,845 100.0%

Residential Mortgages Residential mortgages held in the Other Retail Total other retail loans, which include retail
loan portfolio at December 31, 2023, decreased $315 million leasing, home equity and second mortgages and other retail
(0.3 percent) compared to December 31, 2022, driven by a loans, decreased $10.5 billion (19.1 percent) at
sale of residential mortgages in the second quarter of 2023 December 31, 2023, compared with December 31, 2022,
as part of balance sheet repositioning and capital driven by decreases in auto loans, retail leasing balances
management actions, partially offset by originations. and installment loans. The decrease in auto loans was
Residential mortgages originated and placed in the primarily driven by a sale of indirect auto loans as part of
Company’s loan portfolio include jumbo mortgages and balance sheet repositioning and capital management
branch-originated first lien home equity loans to borrowers actions taken in the second quarter of 2023. Tables 10, 11
with high credit quality. and 12 provide a geographic summary of residential
mortgages, credit card loans and other retail loans
Credit Card Total credit card loans increased $2.3 billion
outstanding, respectively, as of December 31, 2023 and
(8.6 percent) at December 31, 2023, compared with
2022.
December 31, 2022, primarily driven by higher spend
volume and lower payment rates.

TABLE 11 Credit Card Loans by Geography

2023 2022
Percent Percent
At December 31 (Dollars in Millions) Loans of Total Loans of Total
California $ 2,928 10.3% $ 2,609 9.9%
Texas 1,719 6.0 1,584 6.0
Illinois 1,472 5.2 1,330 5.1
Ohio 1,406 4.9 1,320 5.0
Florida 1,363 4.8 1,252 4.8
Minnesota 1,333 4.7 1,257 4.8
Wisconsin 1,177 4.1 1,029 3.9
Colorado 964 3.3 862 3.3
Michigan 948 3.3 925 3.5
Missouri 918 3.2 850 3.2
All other states 14,332 50.2 13,277 50.5
Total $ 28,560 100.0% $ 26,295 100.0%

32 U.S. Bancorp 2023 Annual Report

 TABLE 12 Other Retail Loans by Geography
2023 2022
Percent Percent
At December 31 (Dollars in Millions) Loans of Total Loans of Total
California $ 9,506 21.4% $ 11,098 20.2%
Texas 3,505 7.9 5,149 9.4
Florida 2,729 6.1 3,449 6.3
Minnesota 1,943 4.4 2,527 4.6
Washington 1,800 4.1 1,999 3.6
Ohio 1,752 3.9 2,083 3.8
Illinois 1,704 3.8 2,180 4.0
New York 1,444 3.3 1,878 3.4
Colorado 1,440 3.2 1,673 3.0
Oregon 1,313 3.0 1,414 2.6
All other states 17,273 38.9 21,446 39.1
Total $ 44,409 100.0% $ 54,896 100.0%

The Company generally retains portfolio loans through secondary market, were $2.2 billion at December 31, 2023
maturity; however, the Company’s intent may change over and December 31, 2022. Almost all of the residential
time based upon various factors such as ongoing asset/ mortgage loans the Company originates or purchases for
liability management activities, assessment of product sale follow guidelines that allow the loans to be sold into
profitability, credit risk, liquidity needs, and capital existing, highly liquid secondary markets, in particular in
implications. If the Company’s intent or ability to hold an government agency transactions and to government
existing portfolio loan changes, it is transferred to loans held sponsored enterprises (“GSEs”).
for sale.

Loans Held for Sale Loans held for sale, consisting

primarily of residential mortgages to be sold in the

TABLE 13 Investment Securities

2023 2022
Weighted- Weighted-
Average Weighted- Average Weighted-
Amortized Maturity in Average Amortized Maturity in Average
At December 31 (Dollars in Millions) Cost Fair Value Years Yield(e) Cost Fair Value Years Yield(e)
Held-to-maturity
U.S. Treasury and agencies $ 1,345 $ 1,310 2.3 2.85% $ 1,344 $ 1,293 3.3 2.85%
Mortgage-backed securities(a) 82,692 72,770 8.8 2.21 87,396 76,581 9.3 2.17
Other 8 8 2.8 2.56 — — — —
Total held-to-maturity $ 84,045 $ 74,088 8.7 2.22% $ 88,740 $ 77,874 9.2 2.18%
Available-for-sale
U.S. Treasury and agencies $ 21,768 $ 19,542 5.9 2.19% $ 24,801 $ 22,033 7.1 2.43%
(a)
Mortgage-backed securities 36,895 33,427 6.3 3.09 40,803 36,423 6.6 2.83
Asset-backed securities(a) 6,713 6,724 2.2 5.33 4,356 4,323 1.3 4.59
Obligations of state and political subdivisions(b)(c) 10,867 9,989 9.9 3.75 11,484 10,125 13.6 3.76
Other 24 24 1.7 4.51 6 6 0.1 1.99
Total available-for-sale (d) $ 76,267 $ 69,706 6.3 3.12% $ 81,450 $ 72,910 7.4 2.94%
(a) Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities that take into account anticipated future
prepayments.
(b) Information related to obligations of state and political subdivisions is presented based upon yield to first optional call date if the security is purchased at a premium, and yield to
maturity if the security is purchased at par or a discount.
(c) Maturity calculations for obligations of state and political subdivisions are based on the first optional call date for securities with a fair value above par and the contractual maturity
date for securities with a fair value equal to or below par.
(d) Amortized cost excludes portfolio level basis adjustments of $335 million at December 31, 2023.
(e) Weighted-average yields for obligations of state and political subdivisions are presented on a fully-taxable equivalent basis based on a federal income tax rate of 21 percent. Yields
on investment securities are computed based on amortized cost balances, excluding any premiums or discounts recorded related to the transfer of investment securities at fair
value from available-for-sale to held-to-maturity.

33
Investment Securities The Company uses its investment At December 31, 2023, the Company had no plans to sell
securities portfolio to manage interest rate risk, provide securities with unrealized losses, and believes it is more
liquidity (including the ability to meet regulatory likely than not that it would not be required to sell such
requirements), generate interest and dividend income, and securities before recovery of their amortized cost.
as collateral for public deposits and wholesale funding Refer to Notes 5 and 22 in the Notes to Consolidated
sources. While the Company intends to hold its investment Financial Statements for further information on investment
securities indefinitely, it may sell available-for-sale securities.
investment securities in response to structural changes in
Deposits Total deposits were $512.3 billion at
the balance sheet and related interest rate risk and to meet
December 31, 2023, compared with $525.0 billion at
liquidity requirements, among other factors.
December 31, 2022. The $12.7 billion (2.4 percent)
Investment securities totaled $153.8 billion at
decrease in total deposits reflected a decrease in
December 31, 2023, compared with $161.7 billion at
noninterest-bearing deposits, partially offset by increases in
December 31, 2022. The $7.9 billion (4.9 percent) decrease
time deposits and total savings deposits.
was primarily due to $10.5 billion of net investment sales
Noninterest-bearing deposits at December 31, 2023,
and maturities, partially offset by a $1.6 billion favorable
decreased $47.8 billion (34.7 percent) from December 31,
change in net unrealized gains (losses) on available-for-sale
2022. The decrease was driven by lower Wealth, Corporate,
investment securities. Investment securities by type are
Commercial and Institutional Banking, and Consumer and
shown in Table 13.
Business Banking balances.
The Company’s available-for-sale investment securities
Time deposits at December 31, 2023, increased $19.3
are carried at fair value with changes in fair value reflected
billion (58.7 percent), compared with December 31, 2022,
in other comprehensive income (loss) unless a portion of a
driven by higher Consumer and Business Banking balances.
security’s unrealized loss is related to credit and an
Changes in time deposits are primarily related to those
allowance for credit losses is necessary. At December 31,
deposits managed as an alternative to other funding
2023, the Company’s net unrealized losses on available-for-
sources, based largely on relative pricing and liquidity
sale investment securities were $6.9 billion ($5.2 billion net-
characteristics.
of-tax), compared with net unrealized losses of $8.5 billion
Interest-bearing savings deposits increased $15.8 billion
($6.4 billion net-of-tax) at December 31, 2022. The
(4.4 percent) at December 31, 2023, compared with
favorable change in net unrealized gains (losses) was
December 31, 2022. The increase was related to higher
primarily due to increases in the fair value of mortgage-
money market deposit balances, partially offset by lower
backed, U.S. Treasury and agencies and state and political
savings account and interest checking deposit balances.
subdivisions securities as a result of changes in interest
Money market deposit balances increased $51.4 billion
rates. Gross unrealized losses on available-for-sale
(34.7 percent), primarily due to higher Consumer and
investment securities totaled $7.1 billion at December 31,
Business Banking, and Wealth, Corporate, Commercial and
2023, compared with $8.6 billion at December 31, 2022.
Institutional Banking balances. Savings account balances
When evaluating credit losses, the Company considers
decreased $28.6 billion (39.8 percent), driven by lower
various factors such as the nature of the investment
Consumer and Business Banking balances. Interest
security, the credit ratings or financial condition of the
checking balances decreased $7.0 billion (5.2 percent)
issuer, the extent of the unrealized loss, expected cash
primarily due to lower Wealth, Corporate, Commercial and
flows of the underlying collateral, the existence of any
Institutional Banking balances.
government or agency guarantees, and market conditions.

34 U.S. Bancorp 2023 Annual Report

 TABLE 14 Deposits
The composition of deposits was as follows:
2023 2022
Percent Percent
At December 31 (Dollars in Millions) Amount of Total Amount of Total
Noninterest-bearing deposits $ 89,989 17.6% $ 137,743 26.2%
Interest-bearing deposits
Interest checking 127,453 24.9 134,491 25.6
Money market savings 199,378 38.9 148,014 28.2
Savings accounts 43,219 8.4 71,782 13.7
Total savings deposits 370,050 72.2 354,287 67.5
Domestic time deposits less than $250,000 35,700 7.0 16,329 3.1
Domestic time deposits greater than $250,000 15,336 3.0 11,999 2.3
Foreign time deposits 1,237 .2 4,618 .9
Total interest-bearing deposits 422,323 82.4 387,233 73.8
Total deposits(a) $ 512,312 100.0% $ 524,976 100.0%
(a) Includes $260.7 billion and $289.3 billion of deposits at December 31, 2023 and 2022, respectively, that are not subject to any federal, state or foreign deposit insurance program.

The maturity of domestic time deposits in excess of the insurance limit and those time deposits not subject to any federal, state or
foreign deposit insurance program at December 31, 2023 was as follows:
Domestic
Time
Deposits
Greater Than Foreign Time
(Dollars in Millions) $250,000 Deposits Total
Three months or less $ 5,538 $ 1,237 $ 6,775
Three months through six months 3,624 — 3,624
Six months through one year 4,247 — 4,247
Thereafter 1,927 — 1,927
Total $ 15,336 $ 1,237 $ 16,573

Borrowings The Company utilizes both short-term and Corporate Risk Profile
long-term borrowings as part of its asset/liability
management and funding strategies. Short-term borrowings, Overview Managing risks is an essential part of
which include federal funds purchased, commercial paper, successfully operating a financial services company. The
repurchase agreements, borrowings secured by high-grade Company’s Board of Directors has approved a risk
assets and other short-term borrowings, were $15.3 billion management framework which establishes governance and
at December 31, 2023, compared with $31.2 billion at risk management requirements for all risk-taking activities.
December 31, 2022. The $15.9 billion (51.1 percent) This framework includes Company and business line risk
decrease in short-term borrowings at December 31, 2023, appetite statements which set boundaries for the types and
compared with December 31, 2022, was primarily due to amount of risk that may be undertaken in pursuing business
decreases in short-term Federal Home Loan Bank (“FHLB”) objectives and initiatives. The Board of Directors, primarily
advances. through its Risk Management Committee, oversees
Long-term debt was $51.5 billion at December 31, 2023, performance relative to the risk management framework,
compared with $39.8 billion at December 31, 2022. The risk appetite statements, and other policy requirements.
$11.7 billion (29.3 percent) increase was primarily due to The Executive Risk Committee (“ERC”), which is chaired
$8.2 billion of medium-term note issuances, a $7.1 billion by the Chief Risk Officer and includes the Chief Executive
increase in FHLB advances, partially offset by $2.8 billion of Officer and other members of the executive management
bank note repayments and maturities and a $936 million team, oversees execution against the risk management
repayment of the Company's debt obligation to MUFG. framework and risk appetite statements. The ERC focuses
Refer to Notes 13 and 14 of the Notes to Consolidated on current and emerging risks, including strategic and
Financial Statements for additional information regarding reputation risks, by directing timely and comprehensive
short-term borrowings and long-term debt, and the “Liquidity actions. Senior operating committees have also been
Risk Management” section for discussion of liquidity established, each responsible for overseeing a specified
management of the Company. category of risk.
Upon closing of the MUB acquisition, the Company’s risk
management framework applied to the legal entities

35
acquired from MUFG, including MUB, up until its merger into corporate support functions, translates risk appetite and
USBNA. Updates were made to align the acquired entities strategy into actionable risk limits and policies. The second
with the Company’s risk appetite and connect the elements line of defense monitors first line of defense conformity with
of their respective risk governance and reporting into the limits and policies, and provides reporting and escalation of
Company’s existing risk management framework. Upon emerging risks and other concerns to senior management
completing the merger of MUB into USBNA, which occurred and the Risk Management Committee of the Board of
on May 26, 2023, the MUB risk governance and reporting Directors. The third line of defense, internal audit, is
framework is no longer applicable. responsible for providing the Audit Committee of the Board
The Company’s most prominent risk exposures are of Directors and senior management with independent
credit, interest rate, market, liquidity, operational, assessment and assurance regarding the effectiveness of
compliance, strategic, and reputation. Credit risk is the risk the Company’s governance, risk management and control
of loss associated with a change in the credit profile or the processes.
failure of a borrower or counterparty to meet its contractual Management regularly provides reports to the Risk
obligations. Interest rate risk is the current or prospective Management Committee of the Board of Directors. The Risk
risk to earnings and capital, or market valuations, arising Management Committee discusses with management the
from the impact of changes in interest rates. Market risk Company’s risk management performance, and provides a
arises from fluctuations in interest rates, foreign exchange summary of key risks to the entire Board of Directors,
rates, and security prices that may result in changes in the covering the status of existing matters, areas of potential
values of financial instruments, such as trading and future concern and specific information on certain types of
available-for-sale investment securities, mortgage loans loss events. The Risk Management Committee considers
held for sale (“MLHFS”), mortgage servicing rights ("MSRs") quarterly reports by management assessing the Company’s
and derivatives that are accounted for on a fair value basis. performance relative to the risk appetite statements and the
Liquidity risk is the risk that financial condition or overall associated risk limits, including:
safety and soundness is adversely affected by the
Company’s inability, or perceived inability, to meet its cash • Macroeconomic environment and other qualitative
flow obligations in a timely and complete manner in either considerations, such as regulatory and compliance
normal or stressed conditions. Operational risk is the risk to changes, litigation developments, geopolitical events, and
current or projected financial condition and resilience arising technology and cybersecurity;
from inadequate or failed internal processes or systems, • Credit measures, including adversely rated and
people (including human errors or misconduct), or adverse nonperforming loans, leveraged transactions, credit
external events, including the risk of loss resulting from concentrations and lending limits;
breaches in data security. Operational risk can also include • Interest rate and market risk, including market value and
the risk of loss due to failures by third parties with which the net income simulation, and trading-related Value at Risk
Company does business. Compliance risk is the risk that the (“VaR”);
Company may suffer legal or regulatory sanctions, financial
• Liquidity risk, including funding projections under various
losses, and reputational damage if it fails to adhere to
stressed scenarios;
compliance requirements and the Company’s compliance
policies. Strategic risk is the risk to current or projected • Operational and compliance risk, including losses
financial condition and resilience arising from adverse stemming from events such as fraud, processing errors,
business decisions, poor implementation of business control breaches, breaches in data security or adverse
decisions, or lack of responsiveness to changes in the business decisions, as well as reporting on technology
banking industry and operating environment. Reputation risk performance, and various legal and regulatory
is the risk to current or anticipated earnings, capital, or compliance measures;
franchise or enterprise value arising from negative public • Capital ratios and projections, including regulatory
opinion. This risk may impair the Company’s measures and stressed scenarios; and
competitiveness by affecting its ability to establish new • Strategic and reputation risk considerations, impacts and
relationships or services, or continue serving existing responses.
relationships. In addition to the risks identified above, other
risk factors exist that may impact the Company. Refer to Credit Risk Management The Company’s strategy for
“Risk Factors” beginning on page 140 for a detailed credit risk management includes well-defined, centralized
discussion of these factors. credit policies, uniform underwriting criteria, and ongoing
The Company’s Board and management-level risk monitoring and review processes for all commercial and
governance committees are supported by a “three lines of consumer credit exposures. The strategy also emphasizes
defense” model for establishing effective checks and diversification on a geographic, industry and customer level,
balances. The first line of defense, the business lines, regular credit examinations and management reviews of
manages risks in conformity with established limits and loans exhibiting deterioration of credit quality. The Risk
policy requirements. In turn, business line leaders and their Management Committee oversees the Company’s credit
risk officers establish programs to ensure conformity with risk management process.
these limits and policy requirements. The second line of In addition, credit quality ratings, as defined by the
defense, which includes the Chief Risk Officer’s Company, are an important part of the Company’s overall
organization as well as policy and oversight activities of credit risk management and evaluation of its allowance for

36 U.S. Bancorp 2023 Annual Report

credit losses. Loans with a pass rating represent those year draw period during which a minimum payment is
loans not classified on the Company’s rating scale for equivalent to the monthly interest, followed by a 20-year
problem credits, as minimal credit risk has been identified. amortization period. At December 31, 2023, substantially all
Loans with a special mention or classified rating, including of the Company’s home equity lines were in the draw
consumer lending and small business loans that are 90 period. Key risk characteristics relevant to consumer lending
days or more past due and still accruing, nonaccrual loans segment loans primarily relate to the borrowers’ capacity
and loans in a junior lien position that are current but are and willingness to repay and include unemployment rates,
behind a first lien position on nonaccrual, encompass all consumer bankruptcy filings and other macroeconomic
loans held by the Company that it considers to have a factors, customer payment history and credit scores, and in
potential or well-defined weakness that may put full some cases, updated loan-to-value (“LTV”) information
collection of contractual cash flows at risk. The Company’s reflecting current market conditions on real estate-based
internal credit quality ratings for consumer loans are loans. These and other risk characteristics are reflected in
primarily based on delinquency and nonperforming status, forecasts of delinquency levels, bankruptcies and losses
except for a limited population of larger loans within those which are the primary factors in determining the allowance
portfolios that are individually evaluated. For this limited for credit losses for the consumer lending segment.
population, the determination of the internal credit quality The Company further disaggregates its loan portfolio
rating may also consider collateral value and customer cash segments into various classes based on their underlying risk
flows. Refer to Notes 1 and 6 in the Notes to Consolidated characteristics. The two classes within the commercial
Financial Statements for further discussion of the lending segment are commercial loans and commercial real
Company’s loan portfolios including internal credit quality estate loans. The three classes within the consumer lending
ratings. segment are residential mortgages, credit card loans and
The Company categorizes its loan portfolio into two other retail loans.
segments, which is the level at which it develops and Because business processes and credit risks associated
documents a systematic methodology to determine the with unfunded credit commitments are essentially the same
allowance for credit losses. The Company’s two loan as for loans, the Company utilizes similar processes to
portfolio segments are commercial lending and consumer estimate its liability for unfunded credit commitments. The
lending. Company also engages in non-lending activities that may
The commercial lending segment includes loans and give rise to credit risk, including derivative transactions for
leases made to small business, middle market, large balance sheet hedging purposes, foreign exchange
corporate, commercial real estate, financial institution, non- transactions, deposit overdrafts and interest rate contracts
profit and public sector customers. Key risk characteristics for customers, investments in securities and other financial
relevant to commercial lending segment loans include the assets, and settlement risk, including Automated Clearing
industry and geography of the borrower’s business, purpose House transactions and the processing of credit card
of the loan, repayment source, borrower’s debt capacity and transactions for merchants. These activities are subject to
financial flexibility, loan covenants, and nature of pledged credit review, analysis and approval processes.
collateral, if any, as well as macroeconomic factors such as
unemployment rates, gross domestic product levels, Economic and Other Factors In evaluating its credit risk,
corporate bond spreads and long-term interest rates. These the Company considers changes, if any, in underwriting
risk characteristics, among others, are considered in activities, the loan portfolio composition (including product
determining estimates about the likelihood of default by the mix and geographic, industry or customer-specific
borrowers and the severity of loss in the event of default. concentrations), collateral values, trends in loan
The Company considers these risk characteristics in performance and macroeconomic factors, such as changes
assigning internal risk ratings to, or forecasting losses on, in unemployment rates, gross domestic product levels,
these loans, which are the significant factors in determining inflation, interest rates and consumer bankruptcy filings.
the allowance for credit losses for loans in the commercial During 2023, economic uncertainty and recession risk
lending segment. stabilized as inflation began to subside. Borrowers
The consumer lending segment represents loans and continued to experience the lagged impact of elevated
leases made to consumer customers, including residential interest rates on earnings potential. In addition to these
mortgages, credit card loans, and other retail loans such as broad economic factors, expected loss estimates consider
revolving consumer lines, auto loans and leases and home various factors including customer specific information
equity loans and lines. Home equity or second mortgage impacting changes in risk ratings, projected delinquencies
loans are junior lien closed-end accounts fully disbursed at and the impact of economic deterioration on selected
origination. These loans typically are fixed rate loans, borrowers’ liquidity and ability to repay.
secured by residential real estate, with a 10- or 15-year Credit Diversification The Company manages its credit
fixed payment amortization schedule. Home equity lines are risk, in part, through diversification of its loan portfolio which
revolving accounts giving the borrower the ability to draw is achieved through limit setting by product type criteria,
and repay balances repeatedly, up to a maximum such as industry, and identification of credit concentrations.
commitment, and are secured by residential real estate. As part of its normal business activities, the Company offers
These include accounts in either a first or junior lien a broad array of traditional commercial lending products and
position. Typical terms on home equity lines in the portfolio specialized products such as asset-based lending,
are variable rates benchmarked to the prime rate, with a 10- commercial lease financing, agricultural credit, warehouse

37
mortgage lending, small business lending, commercial real Residential mortgage originations are generally limited to
estate lending, health care lending and correspondent prime borrowers and are performed through the Company’s
banking financing. The Company also offers an array of branches, loan production offices, mobile and online
consumer lending products, including residential mortgages, services, and a wholesale network of originators. The
credit card loans, auto loans, retail leases, home equity Company may retain residential mortgage loans it originates
loans and lines, revolving credit arrangements and other on its balance sheet or sell the loans into the secondary
consumer loans. These consumer lending products are market while retaining the servicing rights and customer
primarily offered through the branch office network, home relationships. Utilizing the secondary markets enables the
mortgage and loan production offices, mobile and online Company to effectively reduce its credit and other asset/
banking, and indirect distribution channels, such as auto liability risks. For residential mortgages that are retained in
and recreational vehicle dealers. The Company monitors the Company’s portfolio and for home equity and second
and manages the portfolio diversification by industry, mortgages, credit risk is managed by adherence to LTV and
customer and geography. The Company has significant loan borrower credit criteria during the underwriting process.
exposure within California given its strategic position in The Company estimates updated LTV information on its
those markets and size of the economy. Table 6 provides outstanding residential mortgages quarterly, based on a
information with respect to the overall product diversification method that combines automated valuation model updates
and changes in the mix during 2023. and relevant home price indices. LTV is the ratio of the
The commercial loan class is diversified among various loan’s outstanding principal balance to the current estimate
industries with higher concentrations in financial institutions of property value. For home equity and second mortgages,
and real estate. Table 8 provides a summary of significant combined loan-to-value (“CLTV”) is the combination of the
industry groups and geographical locations of commercial first mortgage original principal balance and the second lien
loans outstanding at December 31, 2023 and 2022. outstanding principal balance, relative to the current
The commercial real estate loan class reflects the estimate of property value. Certain loans do not have an
Company’s focus on serving business owners within its local LTV or CLTV, primarily due to lack of availability of relevant
network, as well as regional and national investment-based automated valuation model and/or home price indices
real estate owners and developers. Within the commercial values, or lack of necessary valuation data on acquired
real estate loan class, different property types have varying loans.
degrees of credit risk. Table 9 provides a summary of the
The following tables provide summary information of
significant property types and geographical locations of
residential mortgages and home equity and second
commercial real estate loans outstanding at December 31,
mortgages by LTV at December 31, 2023:
2023 and 2022. Commercial real estate loans are diversified
among various property types with higher concentrations in Residential Mortgages Interest Percent
multi-family, business owner-occupied and office properties. (Dollars in Millions) Only Amortizing Total of Total
The commercial real estate office sector, which represented Loan-to-Value
13.0 percent of commercial real estate loans and 1.9
Less than or
percent of total loans at December 31, 2023, is driving equal to 80% $ 13,945 $ 86,758 $ 100,703 87.2%
stress in this sector. The Company believes it has prudently
Over 80%
monitored this portfolio and established an allowance to through 90% 255 6,326 6,581 5.7
loan coverage ratio of approximately 10 percent as of
Over 90%
December 31, 2023. Office nonperforming loans through 100% 30 1,062 1,092 .9
represented 7.6 percent of total office loans at December
Over 100% 6 370 376 .3
31, 2023. The Company's commercial real estate multi-
family portfolio is underwritten on the basis of current in No LTV available 1 10 11 —
place cash flows without consideration to any potential net Loans purchased
benefits of the ability to convert rent-stabilized units to from GNMA
market rate. The Company's exposure to rent-stabilized mortgage
pools(a) — 6,767 6,767 5.9
properties in the New York City market is de minimis.
The Company’s consumer lending segment utilizes Total $ 14,237 $ 101,293 $ 115,530 100.0%
several distinct business processes and channels to (a) Represents loans purchased and loans that could be purchased from
originate consumer credit, including traditional branch Government National Mortgage Association (“GNMA”) mortgage pools under
lending, mobile and online banking, indirect lending, alliance delinquent loan repurchase options whose payments are primarily insured by the
Federal Housing Administration or guaranteed by the United States Department
partnerships and correspondent banks. Each distinct of Veterans Affairs.
underwriting and origination activity manages unique credit
risk characteristics and prices its loan production
commensurate with the differing risk profiles.

38 U.S. Bancorp 2023 Annual Report

Home Equity and Second See the “Analysis and Determination of the Allowance for
Mortgages Percent Credit Losses” section for additional information on how the
(Dollars in Millions) Lines Loans Total of Total
Company determines the allowance for credit losses for
Loan-to-Value / Combined Loan-to-Value loans in a junior lien position.
Less than or equal Credit card and other retail loans are diversified across
to 80% $ 10,406 $ 1,904 $ 12,310 94.3% customer segments and geographies. Diversification in the
Over 80% through credit card portfolio is achieved with broad customer
90% 492 103 595 4.5 relationship distribution through the Company’s and financial
Over 90% through institution partners’ branches, retail and affinity partners,
100% 70 16 86 .7 and digital channels.
Over 100% 32 4 36 .3 Tables 10, 11 and 12 provide a geographical summary of
No LTV/CLTV the residential mortgage, credit card and other retail loan
available 29 — 29 .2 portfolios, respectively.
Total $ 11,029 $ 2,027 $ 13,056 100.0% The following table provides a summary of the
Company’s credit card loan balances disaggregated based
Home equity and second mortgages were $13.1 billion at upon updated credit score at December 31, 2023:
December 31, 2023, compared with $12.9 billion at
Percent
December 31, 2022, and included $2.6 billion of home of Total(a)
equity lines in a first lien position and $10.5 billion of home
Credit score > 660 86%
equity and second mortgage loans and lines in a junior lien
position. Loans and lines in a junior lien position at Credit score < 660 14
December 31, 2023, included approximately $3.1 billion of No credit score —
loans and lines for which the Company also serviced the (a) Credit score distribution excludes loans serviced by others.
related first lien loan, and approximately $7.4 billion where
the Company did not service the related first lien loan. The
Company was able to determine the status of the related
first liens using information the Company has as the servicer
of the first lien or information reported on customer credit
bureau files. The Company also evaluates other indicators
of credit risk for these junior lien loans and lines, including
delinquency, estimated average CLTV ratios and updated
weighted-average credit scores in making its assessment of
credit risk, related loss estimates and determining the
allowance for credit losses.

The following table provides a summary of delinquency

statistics and other credit quality indicators for the
Company’s junior lien positions at December 31, 2023:
Junior Liens Behind
Company
Owned Third
or Serviced Party
(Dollars in Millions) First Lien First Lien Total
Total $ 3,108 $ 7,351 $10,459
Percent 30 - 89 days
past due .38% .58% .52%
Percent 90 days or
more past due .05% .08% .07%
Weighted-average
CLTV 70% 68% 69%
Weighted-average
credit score 784 785 785

39
 TABLE 15 Delinquent Loan Ratios as a Percent of Ending Loan Balances
At December 31
90 days or more past due 2023 2022

Commercial
Commercial .09% .07%
Lease financing — —
Total commercial .09 .07
Commercial Real Estate
Commercial mortgages — —
Construction and development .03 .03
Total commercial real estate .01 .01
Residential Mortgages(a) .12 .08
Credit Card 1.31 .88
Other Retail
Retail leasing .05 .04
Home equity and second mortgages .26 .28
Other .11 .08
Total other retail .15 .12
Total loans .19% .13%

At December 31
90 days or more past due and nonperforming loans 2023 2022
Commercial .37% .19%
Commercial real estate 1.46 .62
(a)
Residential mortgages .25 .36
Credit card 1.31 .88
Other retail .46 .37
Total loans .57% .38%
(a) Delinquent loan ratios exclude $2.0 billion and $2.2 billion at December 31, 2023 and 2022, respectively, of loans purchased and loans that could be purchased from GNMA
mortgage pools under delinquent loan repurchase options whose repayments are primarily insured by the Federal Housing Administration or guaranteed by the United States
Department of Veterans Affairs. Including these loans, the ratio of residential mortgages 90 days or more past due and nonperforming to total residential mortgages was 2.00
percent and 2.28 percent at December 31, 2023 and 2022, respectively.

Loan Delinquencies Trends in delinquency ratios are an Accruing loans 90 days or more past due totaled $698
indicator, among other considerations, of credit risk within million at December 31, 2023, compared with $491 million
the Company’s loan portfolios. The entire balance of a loan at December 31, 2022. Accruing loans 90 days or more past
account is considered delinquent if the minimum payment due are not included in nonperforming assets and continue
contractually required to be made is not received by the to accrue interest because they are adequately secured by
date specified on the billing statement. Delinquent loans collateral, are in the process of collection and are
purchased and loans that could be purchased from GNMA reasonably expected to result in repayment or restoration to
mortgage pools under delinquent loan repurchase options current status, or are managed in homogeneous portfolios
whose repayments are primarily insured by the Federal with specified charge-off timeframes adhering to regulatory
Housing Administration or guaranteed by the United States guidelines. The ratio of accruing loans 90 days or more past
Department of Veterans Affairs, are excluded from due to total loans was 0.19 percent at December 31, 2023,
delinquency statistics. In addition, in certain situations, a compared with 0.13 percent at December 31, 2022.
consumer lending customer’s account may be re-aged to
remove it from delinquent status. Generally, the purpose of
re-aging accounts is to assist customers who have recently
overcome temporary financial difficulties and have
demonstrated both the ability and willingness to resume
regular payments. In addition, the Company may re-age the
consumer lending account of a customer who has
experienced longer-term financial difficulties and apply
modified, concessionary terms and conditions to the
account. Commercial lending loans are generally not subject
to re-aging policies.

40 U.S. Bancorp 2023 Annual Report

The following table provides summary delinquency The Company continues to work with customers to
information for residential mortgages, credit card and other modify loans for borrowers who are experiencing financial
retail loans included in the consumer lending segment: difficulties. Many of the Company’s loan modifications are
determined on a case-by-case basis in connection with
As a Percent of
Ending ongoing loan collection processes. The modifications vary
Amount Loan Balances within each of the Company’s loan classes. Commercial
At December 31 lending segment modifications generally include extensions
(Dollars in Millions) 2023 2022 2023 2022 of the maturity date and may be accompanied by an
(a)
Residential Mortgages increase or decrease to the interest rate. The Company may
30-89 days $ 169 $ 201 .15% .17% also work with the borrower to make other changes to the
loan to mitigate losses, such as obtaining additional
90 days or more 136 95 .12 .08
collateral and/or guarantees to support the loan.
Nonperforming 158 325 .14 .28 The Company has also implemented certain residential
Total $ 463 $ 621 .40% .54% mortgage loan modification programs. The Company
Credit Card modifies residential mortgage loans under Federal Housing
Administration, United States Department of Veterans
30-89 days $ 406 $ 283 1.42% 1.08%
Affairs, and its own internal programs. Under these
90 days or more 375 231 1.31 .88 programs, the Company offers qualifying homeowners the
Nonperforming — 1 — — opportunity to permanently modify their loan and achieve
Total $ 781 $ 515 2.73% 1.96% more affordable monthly payments. These modifications
may include adjustments to interest rates, conversion of
Other Retail
adjustable rates to fixed rates, extensions of maturity dates
Retail Leasing or deferrals of payments, capitalization of accrued interest
30-89 days $ 25 $ 27 .60% .49% and/or outstanding advances, or in limited situations, partial
90 days or more 2 2 .05 .04 forgiveness of loan principal. In most instances, participation
in residential mortgage loan modification programs requires
Nonperforming 8 8 .19 .14
the customer to complete a short-term trial period. A
Total $ 35 $ 37 .85% .67% permanent loan modification is contingent on the customer
Home Equity and Second successfully completing the trial period arrangement, and
Mortgages the loan documents are not modified until that time.
30-89 days $ 77 $ 65 .59% .51% Credit card and other retail loan modifications are
generally part of distinct modification programs providing
90 days or more 34 36 .26 .28
customers modification solutions over a specified time
Nonperforming 113 110 .87 .86 period, generally up to 60 months.
Total $ 224 $ 211 1.72% 1.64% The Company also makes short-term modifications, in
Other(b) limited circumstances, to assist borrowers experiencing
temporary hardships, including previously offering payment
30-89 days $ 176 $ 217 .65% .59%
relief to borrowers that experienced financial hardship
90 days or more 31 28 .11 .08 resulting directly from the effects of the COVID-19
Nonperforming 17 21 .06 .06 pandemic. Short-term consumer lending modification
Total $ 224 $ 266 .82% .73% programs include payment reductions, deferrals of up to
three past due payments, and the ability to return to current
(a) Excludes $595 million of loans 30-89 days past due and $2.0 billion of loans 90
days or more past due at December 31, 2023, purchased and that could be status if the borrower makes required payments. The
purchased from GNMA mortgage pools under delinquent loan repurchase Company may also make short-term modifications to
options that continue to accrue interest, compared with $647 million and $2.2
billion at December 31, 2022.
commercial lending loans, with the most common
(b) Includes revolving credit, installment and automobile loans. modification being an extension of the maturity date of three
months or less. Such extensions generally are used when
Modified Loans In certain circumstances, the Company
the maturity date is imminent and the borrower is
may modify the terms of a loan to maximize the collection of
experiencing some level of financial stress, but the
amounts due when a borrower is experiencing financial
Company believes the borrower will pay all contractual
difficulties or is expected to experience difficulties in the
amounts owed.
near-term. In most cases the modification is either a
concessionary reduction in interest rate, extension of the Nonperforming Assets The level of nonperforming assets
maturity date or reduction in the principal balance that would represents another indicator of the potential for future credit
otherwise not be considered. losses. Nonperforming assets include nonaccrual loans,
Modified loans accrue interest if the borrower complies modified loans not performing in accordance with modified
with the revised terms and conditions and has demonstrated terms and not accruing interest, modified loans that have
repayment performance at a level commensurate with the not met the performance period required to return to accrual
modified terms over several payment cycles, which is status, other real estate owned (“OREO”) and other
generally six months or greater. nonperforming assets owned by the Company. Interest
payments collected from assets on nonaccrual status are
generally applied against the principal balance and not

41
recorded as income. However, interest income may be assets to total loans and other real estate was 0.40 percent
recognized for interest payments if the remaining carrying at December 31, 2023, compared with 0.26 percent at
amount of the loan is believed to be collectible. December 31, 2022.
At December 31, 2023, total nonperforming assets were OREO was $26 million at December 31, 2023, compared
$1.5 billion, compared with $1.0 billion at December 31, with $23 million at December 31, 2022, and was related to
2022. The $478 million (47.0 percent) increase in foreclosed properties that previously secured loan balances.
nonperforming assets, from December 31, 2022 to These balances exclude foreclosed GNMA loans whose
December 31, 2023, was primarily due to higher repayments are primarily insured by the Federal Housing
nonperforming commercial real estate and commercial Administration or guaranteed by the United States
loans, partially offset by a decrease in nonperforming Department of Veterans Affairs.
residential mortgages. The ratio of total nonperforming

42 U.S. Bancorp 2023 Annual Report

 TABLE 16 Nonperforming Assets(a)
At December 31 (Dollars in Millions) 2023 2022

Commercial
Commercial $ 349 $ 139
Lease financing 27 30
Total commercial 376 169
Commercial Real Estate
Commercial mortgages 675 251
Construction and development 102 87
Total commercial real estate 777 338
Residential Mortgages(b) 158 325
Credit Card — 1
Other Retail
Retail leasing 8 8
Home equity and second mortgages 113 110
Other 17 21
Total other retail 138 139
Total nonperforming loans(1) 1,449 972
Other Real Estate(c) 26 23
Other Assets 19 21
Total nonperforming assets $ 1,494 $ 1,016
Accruing loans 90 days or more past due(b) $ 698 $ 491
Period-end loans(2) $ 373,835 $ 388,213
Nonperforming assets to total loans(1)/(2) .39% .25%
(c)
Nonperforming assets to total loans plus other real estate .40% .26%

Changes in Nonperforming Assets

Residential
Commercial and Mortgages,
Commercial Credit Card and
(Dollars in Millions) Real Estate Other Retail Total

Balance December 31, 2022 $ 509 $ 507 $ 1,016

Additions to nonperforming assets
New nonaccrual loans and foreclosed properties 1,403 174 1,577
Advances on loans 49 1 50
Acquired nonperforming assets — — —
Total additions 1,452 175 1,627
Reductions in nonperforming assets
Paydowns, payoffs (415) (109) (524)
Net sales (51) (23) (74)
Return to performing status (32) (199) (231)
Charge-offs(d) (308) (12) (320)
Total reductions (806) (343) (1,149)
Net additions to (reductions in) nonperforming assets 646 (168) 478
Balance December 31, 2023 $ 1,155 $ 339 $ 1,494
(a) Throughout this document, nonperforming assets and related ratios do not include accruing loans 90 days or more past due.
(b) Excludes $2.0 billion and $2.2 billion at December 31, 2023 and 2022, respectively, of loans purchased and loans that could be purchased from GNMA mortgage pools under
delinquent loan repurchase options that are 90 days or more past due that continue to accrue interest, as their repayments are primarily insured by the Federal Housing
Administration or guaranteed by the United States Department of Veterans Affairs.
(c) Foreclosed GNMA loans of $47 million and $53 million at December 31, 2023 and 2022, respectively, continue to accrue interest and are recorded as other assets and excluded
from nonperforming assets because they are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs.
(d) Charge-offs exclude actions for certain card products and loan sales that were not classified as nonperforming at the time the charge-off occurred.

43
 TABLE 17 Net Charge-offs as a Percent of Average Loans Outstanding
2023 2022 2021
Average Average Average
Year Ended December 31 Loan Net Loan Net Loan Net
(Dollars in Millions) Balance Charge-offs Percent Balance Charge-offs Percent Balance Charge-offs Percent

Commercial
Commercial $ 130,544 $ 293 .22% $ 118,967 $ 211 .18% $ 97,649 $ 97 .10%
Lease financing 4,339 21 .48 4,830 16 .33 5,206 6 .12
Total commercial 134,883 314 .23 123,797 227 .18 102,855 103 .10
Commercial real estate
Commercial mortgages 42,894 265 .62 30,890 17 .06 27,997 (14) (.05)
Construction 11,752 (2) (.02) 10,208 20 .20 10,784 16 .15
Total commercial real estate 54,646 263 .48 41,098 37 .09 38,781 2 .01
Residential mortgages 115,922 109 .09 84,749 (23) (.03) 74,629 (32) (.04)
Credit card 26,570 849 3.20 23,478 524 2.23 21,645 512 2.37
Other retail
Retail leasing 4,665 6 .13 6,459 3 .05 7,710 2 .03
Home equity and second mortgages 12,829 (2) (.02) 11,051 (7) (.06) 11,228 (10) (.09)
Other 31,760 366 1.15 42,941 302 .70 40,117 105 .26
Total other retail 49,254 370 .75 60,451 298 .49 59,055 97 .16
Total loans $ 381,275 $ 1,905 .50% $ 333,573 $ 1,063 .32% $ 296,965 $ 682 .23%

Analysis of Loan Net Charge-offs Total loan net Residential mortgage loan net charge-offs for 2023 were
charge-offs were $1.9 billion in 2023, compared with $1.1 $109 million (0.09 percent of average loans outstanding),
billion in 2022. The $842 million (79.2 percent) increase in compared with a net recovery of $23 million (0.03 percent of
total net charge-offs in 2023, compared with 2022, reflected average loans outstanding) in 2022. Credit card loan net
higher charge-offs in most loan categories consistent with charge-offs in 2023 were $849 million (3.20 percent of
normalizing credit conditions and adverse conditions in average loans outstanding), compared with $524 million
commercial real estate, along with the impacts of balance (2.23 percent of average loans outstanding) in 2022. Other
sheet repositioning and capital management actions in 2023 retail loan net charge-offs for 2023 were $370 million (0.75
and 2022. Net charge-offs in 2023 included charge-offs percent of average loans outstanding), compared with $298
related to balance sheet repositioning and capital million (0.49 percent of average loans outstanding) in 2022.
management actions taken in the second quarter of 2023, The increase in total residential mortgage, credit card and
along with charge-offs in the first quarter of 2023 related to other retail loan net charge-offs in 2023, compared with
the uncollectible amount of acquired loans, which were 2022, was driven by normalizing credit conditions along with
considered purchased credit deteriorated as of the date of charge-offs related to balance sheet repositioning and
the MUB acquisition. Net charge-offs in 2022 included capital management actions taken in 2023.
charge-offs in the fourth quarter of 2022 related to
Analysis and Determination of the Allowance for Credit
uncollectible amounts on acquired loans and balance sheet
Losses The allowance for credit losses is established for
optimization activities. The ratio of total loan net charge-offs
current expected credit losses on the Company’s loan and
to average loans outstanding was 0.50 percent in 2023,
lease portfolio, including unfunded credit commitments. The
compared with 0.32 percent in 2022. Excluding the impact
allowance considers expected losses for the remaining lives
of charge-offs related to the MUB acquisition and balance
of the applicable assets, inclusive of expected recoveries.
sheet repositioning and capital management actions, the
The allowance for credit losses is increased through
ratio of total loan net charge-offs to average loans
provisions charged to earnings and reduced by net charge-
outstanding was 0.39 percent in 2023, compared with 0.21
offs.
percent in 2022. See "Non-GAAP Financial Measures" for
Management evaluates the appropriateness of the
additional information.
allowance for credit losses on a quarterly basis. Multiple
Commercial and commercial real estate loan net charge-
economic scenarios are considered over a three-year
offs for 2023 were $577 million (0.30 percent of average
reasonable and supportable forecast period, which includes
loans outstanding), compared with $264 million (0.16
increasing consideration of historical loss experience over
percent of average loans outstanding) in 2022. The increase
years two and three. These economic scenarios are
in net charge-offs in 2023, compared with 2022, was driven
constructed with interrelated projections of multiple
primarily by normalizing credit conditions and adverse
economic variables, and loss estimates are produced that
conditions in commercial real estate.
consider the historical correlation of those economic
variables with credit losses. After the forecast period, the

44 U.S. Bancorp 2023 Annual Report

Company fully reverts to long-term historical loss the Company serviced the first lien on 30 percent of the
experience, adjusted for prepayments and characteristics of home equity loans and lines in a junior lien position. The
the current loan and lease portfolio, to estimate losses over Company also considers the status of first lien mortgage
the remaining life of the portfolio. The economic scenarios accounts reported on customer credit bureau files when the
are updated at least quarterly and are designed to provide a first lien is not serviced by the Company. Regardless of
range of reasonable estimates from better to worse than whether the Company services the first lien, an assessment
current expectations. Scenarios are weighted based on the is made of economic conditions, problem loans, recent loss
Company’s expectation of economic conditions for the experience and other factors in determining the allowance
foreseeable future and reflect significant judgment and for credit losses. Based on the available information, the
consideration of economic forecast uncertainty. Final loss Company estimated $204 million or 1.6 percent of its total
estimates also consider factors affecting credit losses not home equity portfolio at December 31, 2023, represented
reflected in the scenarios, due to the unique aspects of non-delinquent junior liens where the first lien was
current conditions and expectations. These factors may delinquent or modified.
include, but are not limited to, loan servicing practices, When a loan portfolio is purchased, the acquired loans
regulatory guidance, and/or fiscal and monetary policy are divided into those considered purchased with more than
actions. insignificant credit deterioration (“PCD”) and those not
Because business processes and credit risks associated considered PCD. An allowance is established for each
with unfunded credit commitments are essentially the same population and considers product mix, risk characteristics of
as for loans, the Company utilizes similar processes to the portfolio and delinquency status and refreshed LTV
estimate its liability for unfunded credit commitments, which ratios when possible. PCD loans also consider whether the
is included in other liabilities in the Consolidated Balance loan has experienced a charge-off, bankruptcy or significant
Sheet. Both the allowance for loan losses and the liability for deterioration since origination. The allowance established
unfunded credit commitments are included in the for purchased loans not considered PCD is recognized
Company’s analysis of credit losses and reported reserve through provision expense upon acquisition, whereas the
ratios. allowance established for loans considered PCD at
The allowance recorded for credit losses utilizes forward- acquisition is offset by an increase in the basis of the
looking expected loss models to consider a variety of factors acquired loans. Any subsequent increases and decreases in
affecting lifetime credit losses. These factors include, but the allowance related to purchased loans, regardless of
are not limited to, macroeconomic variables such as PCD status, are recognized through provision expense, with
unemployment rates, real estate prices, gross domestic charge-offs charged to the allowance. The Company had a
product levels, inflation, interest rates, and corporate bond total net book balance of $3.1 billion of PCD loans, primarily
spreads, as well as loan and borrower characteristics, such related to the MUB acquisition, included in its loan portfolio
as internal risk ratings on commercial loans and consumer at December 31, 2023.
credit scores, delinquency status, collateral type and The Company’s methodology for determining the
available valuation information, consideration of end-of-term appropriate allowance for credit losses also considers the
losses on lease residuals, and the remaining term of the imprecision inherent in the methodologies used and
loan, adjusted for expected prepayments. For each loan allocated to the various loan portfolios. As a result, amounts
portfolio, including those loans modified under various loan determined under the methodologies described above are
modification programs, model estimates are adjusted as adjusted by management to consider the potential impact of
necessary to consider any relevant changes in portfolio other qualitative factors not captured in quantitative model
composition, lending policies, underwriting standards, risk adjustments which include, but are not limited to, the
management practices, economic conditions or other factors following: model imprecision, imprecision in economic
that may affect the accuracy of the model. Expected credit scenario assumptions, and emerging risks related to either
loss estimates also include consideration of expected cash changes in the economic environment that are affecting
recoveries on loans previously charged-off or expected specific portfolios, or changes in portfolio concentrations
recoveries on collateral-dependent loans where recovery is over time that may affect model performance. The
expected through sale of the collateral at fair value less consideration of these items results in adjustments to
selling costs. Where loans do not exhibit similar risk allowance amounts included in the Company’s allowance for
characteristics, an individual analysis is performed to credit losses for each loan portfolio.
consider expected credit losses. The results of the analysis are evaluated quarterly to
The allowance recorded for individually evaluated loans confirm the estimates are appropriate for each loan portfolio.
greater than $5 million in the commercial lending segment is Table 19 shows the amount of the allowance for credit
based on an analysis utilizing expected cash flows losses by loan class and underlying portfolio category.
discounted using the original effective interest rate, the Although the Company determined the amount of each
observable market price of the loan, or the fair value of the element of the allowance separately and considers this
collateral, less selling costs, for collateral-dependent loans process to be an important credit management tool, the
as appropriate. entire allowance for credit losses is available for the entire
When evaluating the appropriateness of the allowance loan portfolio. The actual amount of losses can vary
for credit losses for any loans and lines in a junior lien significantly from the estimated amounts.
position, the Company considers the delinquency and At December 31, 2023, the allowance for credit losses
modification status of the first lien. At December 31, 2023, was $7.8 billion, compared with an allowance of $7.4 billion

45
at December 31, 2022. The allowance for credit losses at losses to annual loan net charge-offs at December 31,
December 31, 2023 included a $62 million decrease due to 2023, was 411 percent, compared with 697 percent at
a change in accounting principle adopted on January 1, December 31, 2022. Management determined the
2023 related to discontinuing the separate recognition and allowance for credit losses was appropriate on
measurement of troubled debt restructurings ("TDRs"). The December 31, 2023 and 2022.
increase in the allowance for credit losses of $435 million Economic conditions considered in estimating the
(5.9 percent) at December 31, 2023, compared with allowance for credit losses at December 31, 2023 included
December 31, 2022, was primarily driven by normalizing changes in projected gross domestic product and
credit losses, credit card balance growth and commercial unemployment levels. These factors are evaluated through
real estate credit quality. a combination of quantitative calculations using multiple
The ratio of the allowance for credit losses to period-end economic scenarios and additional qualitative assessments
loans was 2.10 percent at December 31, 2023, compared that consider the degree of economic uncertainty in the
with 1.91 percent at December 31, 2022. The ratio of the current environment. The projected unemployment rates for
allowance for credit losses to nonperforming loans was 541 2024 considered in the estimate range from 3.0 percent to
percent at December 31, 2023, compared with 762 percent 8.2 percent.
at December 31, 2022. The ratio of the allowance for credit

The following table summarizes the baseline forecast for key economic variables the Company used in its estimate of the
allowance for credit losses at December 31, 2023 and 2022:

December 31, December 31,

2023 2022
United States unemployment rate for the three months ending(a)
December 31, 2023 3.8% 4.2%
June 30, 2024 3.9 4.1
December 31, 2024 4.0 3.9
United States real gross domestic product for the three months ending(b)
December 31, 2023 2.5% 1.0%
June 30, 2024 2.0 1.9
December 31, 2024 1.3 2.5
(a) Reflects quarterly average of forecasted reported United States unemployment rate.
(b) Reflects year-over-year growth rates.

The allowance for credit losses related to commercial The allowance for credit losses related to consumer
lending segment loans increased $251 million during the lending segment loans increased $184 million during the
year ended December 31, 2023, reflecting the impact of year ended December 31, 2023, due to the impacts of
normalizing credit conditions and select commercial real normalizing credit performance, partially offset by reduced
estate loan deterioration, partially offset by declining portfolio exposures and a decrease related to a change in
commercial exposures. accounting principle.

46 U.S. Bancorp 2023 Annual Report

 TABLE 18 Summary of Allowance for Credit Losses
(Dollars in Millions) 2023 2022 2021
Balance at beginning of year $ 7,404 $ 6,155 $ 8,010
Change in accounting principle(a) (62) — —
Allowance for acquired credit losses(b) 127 336 —
Charge-Offs
Commercial
Commercial 357 294 206
Lease financing 32 25 16
Total commercial 389 319 222
Commercial real estate
Commercial mortgages 278 28 9
Construction and development 3 26 20
Total commercial real estate 281 54 29
Residential mortgages 129 13 18
Credit card 1,014 696 686
Other retail
Retail leasing 18 18 26
Home equity and second mortgages 12 9 12
Other 448 391 215
Total other retail 478 418 253
Total charge-offs(c) 2,291 1,500 1,208
Recoveries
Commercial
Commercial 64 83 109
Lease financing 11 9 10
Total commercial 75 92 119
Commercial real estate
Commercial mortgages 13 11 23
Construction and development 5 6 4
Total commercial real estate 18 17 27
Residential mortgages 20 36 50
Credit card 165 172 174
Other retail
Retail leasing 12 15 24
Home equity and second mortgages 14 16 22
Other 82 89 110
Total other retail 108 120 156
Total recoveries 386 437 526
Net Charge-Offs
Commercial
Commercial 293 211 97
Lease financing 21 16 6
Total commercial 314 227 103
Commercial real estate
Commercial mortgages 265 17 (14)
Construction and development (2) 20 16
Total commercial real estate 263 37 2
Residential mortgages 109 (23) (32)
Credit card 849 524 512
Other retail
Retail leasing 6 3 2
Home equity and second mortgages (2) (7) (10)
Other 366 302 105
Total other retail 370 298 97
Total net charge-offs 1,905 1,063 682
Provision for credit losses(d) 2,275 1,977 (1,173)
Other changes — (1) —
Balance at end of year $ 7,839 $ 7,404 $ 6,155
Components
Allowance for loan losses $ 7,379 $ 6,936 $ 5,724
Liability for unfunded credit commitments 460 468 431
Total allowance for credit losses(1) $ 7,839 $ 7,404 $ 6,155
Period-end loans(2) $ 373,835 $ 388,213 $ 312,028
Nonperforming loans(3) 1,449 972 834
Allowance for Credit Losses as a Percentage of
Period-end loans(1)/(2) 2.10% 1.91% 1.97%
Nonperforming loans(1)/(3) 541 762 738
Nonperforming and accruing loans 90 days or more past due 365 506 471
Nonperforming assets 525 729 701
Net charge-offs 411 697 902

(a) Effective January 1, 2023, the Company adopted accounting guidance which removed the separate recognition and measurement of troubled debt restructurings.
(b) Allowance for purchased credit deteriorated and charged-off loans acquired from MUB.
(c) 2023 includes $91 million of charge-offs related to uncollectible amounts on acquired loans, as well as $309 million of charge-offs related to balance sheet repositioning and capital
management actions. 2022 includes $179 million of charge-offs related to uncollectible amounts on acquired loans, as well as $189 million of charge-offs related to balance sheet
repositioning and capital management actions.
(d) 2023 includes provision for credit losses of $243 million related to balance sheet repositioning and capital management actions. 2022 includes provision for credit losses of $662
million related to the acquisition of MUB and $129 million related to balance sheet repositioning and capital management actions.

47
 TABLE 19 Allocation of the Allowance for Credit Losses

Allowance as a Percent of
Allowance Amount Loans
At December 31 (Dollars in Millions) 2023 2022 2023 2022

Commercial
Commercial $ 2,038 $ 2,087 1.60% 1.59%
Lease financing 81 76 1.91 1.67
Total commercial 2,119 2,163 1.61 1.59
Commercial Real Estate
Commercial mortgages 1,068 878 2.55 2.01
Construction and development 552 447 4.79 3.81
Total commercial real estate 1,620 1,325 3.03 2.39
Residential Mortgages 827 926 .72 .80
Credit Card 2,403 2,020 8.41 7.68
Other Retail
Retail leasing 95 127 2.30 2.30
Home equity and second mortgages 321 298 2.46 2.32
Other 454 545 1.67 1.49
Total other retail 870 970 1.96 1.77
Total allowance $ 7,839 $ 7,404 2.10% 1.91%

Residual Value Risk Management The Company Operational Risk Management. The Company operates in
manages its risk to changes in the residual value of leased many different businesses in diverse markets and relies on
vehicles, office and business equipment, and other assets the ability of its employees and systems to process a high
through disciplined residual valuation at the inception of a number of transactions. Operational risk is inherent in all
lease, diversification of its leased assets, regular residual business activities, and the management of this risk is
asset valuation reviews and monitoring of residual value important to the achievement of the Company’s objectives.
gains or losses upon the disposition of assets. Lease Business lines have direct and primary responsibility and
originations are subject to the same well-defined accountability for identifying, controlling, and monitoring
underwriting standards referred to in the “Credit Risk operational risks embedded in their business activities,
Management” section, which includes an evaluation of the including those additional or increased risks created by
residual value risk. Retail lease residual value risk is economic and financial disruptions.
mitigated further by effective end-of-term marketing of off- The Company maintains a system of controls with the
lease vehicles. objective of providing proper transaction authorization and
Included in the retail leasing portfolio was approximately execution, proper system operations, proper oversight of
$3.4 billion of retail leasing residuals at December 31, 2023, third parties with whom it does business, safeguarding of
compared with $4.4 billion at December 31, 2022. The assets from misuse or theft, and ensuring the reliability and
Company monitors concentrations of leases by security of financial and other data. The Company also
manufacturer and vehicle type. As of December 31, 2023, maintains a cybersecurity risk program which provides
vehicle lease residuals related to sport utility vehicles were centralized planning and management of related and
53.5 percent of the portfolio, while truck and crossover utility interdependent work with a focus on risks from
vehicle classes represented approximately 21.4 percent and cybersecurity threats. The Company's cybersecurity risk
13.7 percent of the portfolio, respectively. At year-end 2023, program is integrated into the Company's overall business
the individual vehicle model with the largest residual value and operational strategies and requires that the Company
outstanding represented 27.0 percent of the aggregate allocate appropriate resources to maintain the program.
residual value of all vehicles in the portfolio. At Refer to “Item 1C. Cybersecurity” in the Company’s Annual
December 31, 2023, the weighted-average origination term Report on Form 10-K for the year ended December 31,
of the portfolio was 41 months, compared with 42 months at 2023, for further discussion on the Company's cybersecurity
December 31, 2022. At December 31, 2023, the commercial risk program.
leasing portfolio had $491 million of residuals, compared Business continuation and disaster recovery planning is
with $500 million at December 31, 2022. At year-end 2023, also critical to effectively managing operational risks. Each
lease residuals related to trucks and other transportation business unit of the Company is required to develop,
equipment represented 38.0 percent of the total residual maintain and test these plans at least annually to ensure
portfolio, while business and office equipment represented that recovery activities, if needed, can support mission
28.5 percent. critical functions, including technology, networks and data

48 U.S. Bancorp 2023 Annual Report

centers supporting customer applications and business measures the impact of changes in market values due to
operations. interest rates under a number of scenarios, including
While the Company strives to design processes to immediate and sustained parallel shifts, and flattening or
minimize operational risks, there is no absolute assurance steepening of the yield curve. The Company manages its
that business disruption or operational losses would not interest rate risk position by holding assets with desired
occur from an external event or internal control breakdown. interest rate risk characteristics on its balance sheet,
On an ongoing basis, management makes process changes executing certain pricing strategies for loans and deposits
and investments to enhance its systems of internal controls and deploying investment portfolio, funding and derivative
and business continuity and disaster recovery plans. strategies .
Table 20 summarizes the projected impact to net interest
Compliance Risk Management The Company may suffer
income over the next 12 months of various potential interest
legal or regulatory sanctions, material financial loss, or
rate changes. The sensitivity of the projected impact to net
damage to its reputation if it fails to comply with laws,
interest income over the next 12 months is dependent on
regulations, rules, standards of good practice, and codes of
balance sheet growth, product mix, deposit behavior, pricing
conduct, including those related to compliance with Bank
and funding decisions. From December 31, 2022 to
Secrecy Act/anti-money laundering requirements, sanctions
December 31, 2023, interest rate sensitivity decreased,
compliance requirements as administered by the Office of
primarily due to changes in deposit composition and rates
Foreign Assets Control, consumer protection and other
paid on deposits as interest rate hikes materialized
requirements. The Company has controls and processes in
throughout 2023. As of December 31, 2023, the Company
place for the assessment, identification, monitoring,
continues to be slightly asset sensitive to a parallel upward
management and reporting of compliance risks and issues,
move in interest rates with most of that impact coming from
including those created or increased by economic and
the short end of the yield curve. While the Company utilizes
financial disruptions. Refer to “Supervision and Regulation”
models and assumptions based on historical information
in the Company’s Annual Report on Form 10-K for the year
and expected behaviors, actual outcomes could vary
ended December 31, 2023, for further discussion of the
significantly.
regulatory framework applicable to bank holding companies
and their subsidiaries. Use of Derivatives to Manage Interest Rate and Other
Risks To manage the sensitivity of earnings and capital to
Interest Rate Risk Management In the banking industry,
interest rate, prepayment, credit, price and foreign currency
changes in interest rates are a significant risk that can
fluctuations (asset and liability management positions), the
impact earnings as well as the safety and soundness of an
Company enters into derivative transactions. The Company
entity. The Company manages its exposure to changes in
uses derivatives for asset and liability management
interest rates through asset and liability management
purposes primarily in the following ways:
activities within guidelines established by its Asset Liability
Management Committee (“ALCO”) and approved by the • To convert fixed-rate debt and available-for-sale
Board of Directors. The ALCO has the responsibility for investment securities from fixed-rate payments to floating-
approving and overseeing compliance with the ALCO rate payments;
management policies, including interest rate risk exposure. • To convert floating-rate loans and debt from floating-rate
One way the Company measures and analyzes its interest payments to fixed-rate payments;
rate risk is through analysis of net interest income • To mitigate changes in value of the Company’s unfunded
sensitivities across a range of scenarios. mortgage loan commitments, funded MLHFS and MSRs;
Net interest income sensitivity analysis includes
• To mitigate remeasurement volatility of foreign currency
evaluating all of the Company’s assets and liabilities and off-
denominated balances; and
balance sheet instruments, inclusive of new business
activity under various interest rate scenarios that differ in the • To mitigate the volatility of the Company’s net investment
direction, amount and speed of change over time, as well as in foreign operations driven by fluctuations in foreign
the overall shape of the yield curve. The balance sheet currency exchange rates.
includes assumptions regarding loan and deposit volumes In addition, the Company enters into interest rate, foreign
and pricing which are based on quantitative analysis, exchange and commodity derivative contracts to support the
historical trends and management outlook and strategies. business requirements of its customers (customer-related
Deposit balances and mix are dynamic across interest rate positions). The Company minimizes the market and liquidity
scenarios and will change both with the absolute level of risks of customer-related positions by either entering into
rates as well as the assumed interest rate shock. Base case similar offsetting positions with broker-dealers, or on a
and net interest income sensitivities are reviewed monthly portfolio basis by entering into other derivative or non-
by the ALCO and are used to guide asset/liability derivative financial instruments that partially or fully offset
management strategies. the exposure from these customer-related positions. The
The Company also manages interest rate sensitivity by Company may enter into derivative contracts that are either
utilizing market value of equity modeling, which measures exchange-traded, centrally cleared through clearinghouses
the degree to which the market values of the Company’s or over-the-counter. The Company does not utilize
assets and liabilities and off-balance sheet instruments will derivatives for speculative purposes.
change given a change in interest rates. Management

49
 TABLE 20 Sensitivity of Net Interest Income
December 31, 2023 December 31, 2022
Down 50 bps Up 50 bps Down 200 bps Up 200 bps Down 50 bps Up 50 bps Down 200 bps Up 200 bps
Immediate Immediate Gradual Gradual Immediate Immediate Gradual Gradual
Net interest income (.19)% .71% (.15)% .91% (.58)% .95% (2.02)% 1.44%

The Company does not designate all of the derivatives Positions”), employing methodologies consistent with the
that it enters into for risk management purposes as requirements of regulatory rules for market risk. The
accounting hedges because of the inefficiency of applying Company’s Market Risk Committee (“MRC”), within the
the accounting requirements and may instead elect fair framework of the ALCO, oversees market risk management.
value accounting for the related hedged items. In particular, The MRC monitors and reviews the Company’s Covered
the Company enters into interest rate swaps, swaptions, Positions and establishes policies for market risk
forward commitments to buy to-be-announced securities management, including exposure limits for each portfolio.
(“TBAs”), U.S. Treasury and Eurodollar futures and options The Company uses a VaR approach to measure general
on U.S. Treasury futures to mitigate fluctuations in the value market risk. Theoretically, VaR represents the statistical risk
of its MSRs, but does not designate those derivatives as of loss the Company has to adverse market movements
accounting hedges. Refer to Note 10 of the Notes to over a one-day time horizon. The Company uses the
Consolidated Financial Statements for additional information Historical Simulation method to calculate VaR for its
regarding MSRs, including management of the changes in Covered Positions measured at the ninety-ninth percentile
fair value. using a one-year look-back period for distributions derived
Additionally, the Company uses forward commitments to from past market data. The market factors used in the
sell TBAs and other commitments to sell residential calculations include those pertinent to market risks inherent
mortgage loans at specified prices to economically hedge in the underlying trading portfolios, principally those that
the interest rate risk in its residential mortgage loan affect the Company’s corporate bond trading business,
production activities. The forward commitments to sell and foreign currency transaction business, client derivatives
the unfunded mortgage loan commitments on loans business, loan trading business and municipal securities
intended to be sold are considered derivatives under the business, as well as those inherent in the Company’s
accounting guidance related to accounting for derivative foreign denominated balances and the derivatives used to
instruments and hedging activities. The Company has mitigate the related measurement volatility. On average, the
elected the fair value option for the MLHFS. Company expects the one-day VaR to be exceeded by
Derivatives are subject to credit risk associated with actual losses two to three times per year related to these
counterparties to the contracts. Credit risk associated with positions. The Company monitors the accuracy of internal
derivatives is measured by the Company based on the VaR models and modeling processes by back-testing model
probability of counterparty default. The Company manages performance, regularly updating the historical data used by
the credit risk of its derivative positions by diversifying its the VaR models and regular model validations to assess the
positions among various counterparties, by entering into accuracy of the models’ input, processing, and reporting
master netting arrangements, and, where possible, by components. All models are required to be independently
requiring collateral arrangements. The Company may also reviewed and approved prior to being placed in use. If the
transfer counterparty credit risk related to interest rate Company were to experience market losses in excess of the
swaps to third parties through the use of risk participation estimated VaR more often than expected, the VaR models
agreements. In addition, certain interest rate swaps, interest and associated assumptions would be analyzed and
rate forwards and credit contracts are required to be adjusted. VaR amounts reflected MUB beginning December
centrally cleared through clearinghouses to further mitigate 1, 2022, the day the acquisition transaction closed.
counterparty credit risk. The Company also mitigates the
The average, high, low and period-end one-day VaR
credit risk of its derivative positions, as well as the credit risk
amounts for the Company’s Covered Positions were as
on loans or lending portfolios, through the use of credit
follows:
contracts.
For additional information on derivatives and hedging Year Ended December 31
activities, refer to Notes 20 and 21 in the Notes to (Dollars in Millions) 2023 2022
Consolidated Financial Statements. Average $ 4 $ 2
Market Risk Management In addition to interest rate risk, High 7 7
the Company is exposed to other forms of market risk, Low 2 1
principally related to trading activities which support
Period-end 3 5
customers’ strategies to manage their own foreign currency,
interest rate risk, commodities risk and funding activities.
The Company did not experience any actual losses for
For purposes of its internal capital adequacy assessment
its combined Covered Positions that exceeded VaR during
process, the Company considers risk arising from its trading
the years ended December 31, 2023 and 2022. The
activities, as well as the remeasurement volatility of foreign
Company stress tests its market risk measurements to
currency denominated balances included on its
provide management with perspectives on market events
Consolidated Balance Sheet (collectively, “Covered
that may not be captured by its VaR models, including worst

50 U.S. Bancorp 2023 Annual Report

case historical market movement combinations that have Liquidity Risk Management The Company’s liquidity risk
not necessarily occurred on the same date. management process is designed to identify, measure, and
The Company calculates Stressed VaR using the same manage the Company’s funding and liquidity risk to meet its
underlying methodology and model as VaR, except that a daily funding needs and to address expected and
historical continuous one-year look-back period is utilized unexpected changes in its funding requirements. The
that reflects a period of significant financial stress Company engages in various activities to manage its
appropriate to the Company’s Covered Positions. The liquidity risk. These activities include diversifying its funding
period selected by the Company includes the significant sources, stress testing, and holding readily-marketable
market volatility of the last four months of 2008. assets which can be used as a source of liquidity if needed.
In addition, the Company’s profitable operations, sound
The average, high, low and period-end one-day Stressed
credit quality and strong credit ratings and capital position
VaR amounts for the Company’s Covered Positions were as
have enabled it to develop a large and reliable base of core
follows:
deposit funding within its market areas and in domestic and
global capital markets.
Year Ended December 31
(Dollars in Millions) 2023 2022 The Company’s Board of Directors approves the
Average $ 10 $ 10 Company’s liquidity policy. The Risk Management
Committee of the Company’s Board of Directors oversees
High 16 19
the Company’s liquidity risk management process and
Low 6 6 approves a contingency funding plan. The ALCO reviews
Period-end 8 13 the Company’s liquidity policy and limits, and regularly
assesses the Company’s ability to meet funding
Valuations of positions in client derivatives and foreign requirements arising from adverse company-specific or
currency activities are based on discounted cash flow or market events.
other valuation techniques using market-based The Company’s liquidity policy requires it to maintain
assumptions. These valuations are compared to third-party diversified wholesale funding sources to avoid maturity,
quotes or other market prices to determine if there are entity and market concentrations. The Company operates a
significant variances. Significant variances are approved by Cayman Islands branch for issuing Eurodollar time deposits.
senior management in the Company’s corporate functions. In addition, the Company has relationships with dealers to
Valuation of positions in the corporate bond trading, loan issue national market retail and institutional savings
trading and municipal securities businesses are based on certificates and short-term and medium-term notes. The
trader marks. These trader marks are evaluated against Company also maintains a significant correspondent
third-party prices, with significant variances approved by banking network and relationships. Accordingly, the
senior management in the Company’s corporate functions. Company has access to national federal funds, funding
The Company also measures the market risk of its through repurchase agreements and sources of stable
hedging activities related to residential MLHFS and MSRs certificates of deposit and commercial paper.
using the Historical Simulation method. The VaRs are The Company regularly projects its funding needs under
measured at the ninety-ninth percentile and employ factors various stress scenarios and maintains a contingency
pertinent to the market risks inherent in the valuation of the funding plan consistent with the Company’s access to
assets and hedges. A one-year look-back period is used to diversified sources of contingent funding. The Company
obtain past market data for the models. maintains a substantial level of total available liquidity in the
form of on-balance sheet and off-balance sheet funding
The average, high and low VaR amounts for the residential
sources. These liquidity sources include cash at the Federal
MLHFS and related hedges and the MSRs and related
Reserve Bank and certain European central banks,
hedges were as follows:
unencumbered liquid assets, and capacity to borrow from
Year Ended December 31 the FHLB and at the Federal Reserve Bank’s Discount
(Dollars in Millions) 2023 2022 Window. Unencumbered liquid assets in the Company’s
Residential Mortgage Loans Held For investment securities portfolio provide asset liquidity through
Sale and Related Hedges the Company’s ability to sell the securities or pledge and
Average $ 1 $ 2 borrow against them. Refer to Note 5 of the Notes to
Consolidated Financial Statements and “Balance Sheet
High 2 5
Analysis” for further information on investment securities
Low — — maturities and trends. Asset liquidity is further enhanced by
Mortgage Servicing Rights and Related the Company’s practice of pledging loans to access secured
Hedges borrowing facilities through the FHLB and Federal Reserve
Average $ 7 $ 8 Bank.
High 12 20
Low 2 3

51
The following table summarizes the Company's total Additional funding is provided by long-term debt and
available liquidity from on-balance sheet and off-balance short-term borrowings. Long-term debt was $51.5 billion at
sheet funding sources: December 31, 2023, and is an important funding source
because of its multi-year borrowing structure. Refer to Note
December 31, December 31, 14 of the Notes to Consolidated Financial Statements for
(Dollars in millions) 2023 2022
information on the terms and maturities of the Company’s
Cash held at the Federal Reserve
Bank and other central banks $ 52,403 $ 44,428 long-term debt issuances and “Balance Sheet Analysis” for
Available investment securities 34,220 131,962 discussion on long-term debt trends. Short-term borrowings
were $15.3 billion at December 31, 2023, and supplement
Borrowing capacity from the
Federal Reserve Bank and FHLB 215,763 114,775 the Company’s other funding sources. Refer to Note 13 of
Total available liquidity $ 302,386 $ 291,165 the Notes to Consolidated Financial Statements and
“Balance Sheet Analysis” for further information on the
The Company’s diversified deposit base provides a terms and trends of the Company’s short-term borrowings.
sizeable source of relatively stable and low-cost funding, The Company’s ability to raise negotiated funding at
while reducing the Company’s reliance on the wholesale competitive prices is influenced by rating agencies’ views of
markets. Total deposits were $512.3 billion at December 31, the Company’s credit quality, liquidity, capital and earnings.
2023, compared with $525.0 billion at December 31, 2022. Table 21 details the rating agencies’ most recent
Refer to Note 12 of the Notes to Consolidated Financial assessments as of December 31, 2023.
Statements and “Balance Sheet Analysis” for further
information on the maturities, terms and trends of the
Company’s deposits.

TABLE 21 Credit Ratings

Moody's S&P Global Ratings Fitch Ratings DBRS Morningstar

U.S. Bancorp
Long-term issuer rating A3 A A+ AA
Short-term issuer rating N/A A-1 F1 R-1 (middle)
Senior unsecured debt A3 A A AA
Subordinated debt A3 A- A- AA (low)
Junior subordinated debt Baa1 N/A N/A N/A
Preferred stock Baa2 BBB BBB A
Commercial paper P-2 N/A F1 N/A

U.S. Bank National Association

Long-term issuer rating A2 A+ A+ AA (high)
Short-term issuer rating P-1 A-1 F1 R-1 (high)
Long-term deposits Aa3 N/A AA- AA (high)
Short-term deposits P-1 N/A F1+ N/A
Senior unsecured debt A2 A+ A+ AA (high)
Subordinated debt A2 A N/A AA
Commercial paper P-1 A-1 N/A R-1 (high)
Counterparty risk assessment A1(cr)/P-1(cr)
Counterparty risk rating A2/P-1
Baseline credit assessment a2

In addition to assessing liquidity risk on a consolidated cash and securities held that can be readily monetized. The
basis, the Company monitors the parent company’s liquidity. Company measures and manages this limit in both normal
The parent company’s routine funding requirements consist and adverse conditions. The Company maintains sufficient
primarily of operating expenses, dividends paid to funding to meet expected capital and debt service
shareholders, debt service, repurchases of common stock obligations for 24 months without the support of dividends
and funds used for acquisitions. The parent company from subsidiaries and assuming access to the wholesale
obtains funding to meet its obligations from dividends markets is maintained. The Company maintains sufficient
collected from its subsidiaries and the issuance of debt and liquidity to meet its capital and debt service obligations for
capital securities. The Company establishes limits for the 12 months under adverse conditions without the support of
minimal number of months into the future where the parent dividends from subsidiaries or access to the wholesale
company can meet existing and forecasted obligations with

52 U.S. Bancorp 2023 Annual Report

markets. The parent company is currently in excess of amount on deposit with European banks of approximately
required liquidity minimums. $7.3 billion, predominately with the Central Bank of Ireland
Under SEC rules, the parent company is classified as a and Bank of England.
“well-known seasoned issuer,” which allows it to file a In addition, the Company provides financing to domestic
registration statement that does not have a limit on issuance multinational corporations that generate revenue from
capacity. “Well-known seasoned issuers” generally include customers in European countries, transacts with various
those companies with outstanding common securities with a European banks as counterparties to certain derivative-
market value of at least $700 million held by non-affiliated related activities, and through a subsidiary, manages money
parties or those companies that have issued at least $1 market funds that hold certain investments in European
billion in aggregate principal amount of non-convertible sovereign debt. Any deterioration in economic conditions in
securities, other than common equity, in the last three years. Europe, including the impacts resulting from the Russia-
However, the parent company’s ability to issue debt and Ukraine conflict, is not expected to have a significant effect
other securities under a registration statement filed with the on the Company related to these activities.
SEC under these rules is limited by the debt issuance
Commitments, Contingent Liabilities and Other
authority granted by the Company’s Board of Directors and/
Contractual Obligations The Company participates in
or the ALCO policy.
many different contractual arrangements which may or may
At December 31, 2023, parent company long-term debt
not be recorded on its balance sheet, with unrelated or
outstanding was $34.3 billion, compared with $27.0 billion at
consolidated entities, under which the Company has an
December 31, 2022. The increase was primarily due to
obligation to pay certain amounts, provide credit or liquidity
$8.2 billion of medium-term note issuances, partially offset
enhancements or provide market risk support. These
by a $936 million repayment of the Company's debt
arrangements also include any obligation related to a
obligation to MUFG. As of December 31, 2023, there was
variable interest held in an unconsolidated entity that
$5.6 billion of parent company debt scheduled to mature in
provides financing, liquidity, credit enhancement or market
2024. Future debt maturities may be met through medium-
risk support.
term note and capital security issuances and dividends from
In the ordinary course of business, the Company enters
subsidiaries, as well as from parent company cash and cash
into contractual obligations that may require future cash
equivalents.
payments, including funding for customer loan requests,
Dividend payments to the Company by its subsidiary
customer deposit maturities and withdrawals, debt service,
banks are subject to regulatory review and statutory
leases for premises and equipment, and other cash
limitations and, in some instances, regulatory approval. In
commitments. Refer to Notes 7, 12, 14, 17 and 23 in the
general, dividends to the parent company from its banking
Notes to Consolidated Financial Statements for information
subsidiaries are limited by rules which compare dividends to
on the Company’s operating lease obligations, deposits,
net income for regulatorily-defined periods. For further
long-term debt, benefit obligations and guarantees and
information, see Note 25 of the Notes to Consolidated
other commitments, respectively.
Financial Statements.
Commitments to extend credit are legally binding and
The Company is subject to a regulatory Liquidity
generally have fixed expiration dates or other termination
Coverage Ratio (“LCR”) requirement which requires large
clauses. Many of the Company’s commitments to extend
banking organizations to maintain an adequate level of
credit expire without being drawn and, therefore, total
unencumbered high quality liquid assets to meet estimated
commitment amounts do not necessarily represent future
liquidity needs over a 30-day stressed period. At
liquidity requirements or the Company’s exposure to credit
December 31, 2023, the Company was compliant with this
loss. Commitments to extend credit also include consumer
requirement.
credit lines that are cancellable upon notification to the
The Company is also subject to a regulatory Net Stable
consumer. Total contractual amounts of commitments to
Funding Ratio (“NSFR”) requirement which requires large
extend credit at December 31, 2023 were $400.5 billion.
banking organizations to maintain a minimum level of stable
The Company also issues and confirms various types of
funding based on the liquidity characteristics of their assets,
letters of credit, including standby and commercial. Total
commitments, and derivative exposures over a one-year
contractual amounts of letters of credit at December 31,
time horizon. At December 31, 2023, the Company was
2023 were $11.6 billion. For more information on the
compliant with this requirement.
Company’s commitments to extend credit and letters of
European Exposures The Company provides merchant credit, refer to Note 23 in the Notes to Consolidated
processing and corporate trust services in Europe either Financial Statements.
directly or through banking affiliations in Europe. Revenue The Company’s off-balance sheet arrangements with
generated from sources in Europe represented unconsolidated entities primarily consist of private
approximately 2 percent of the Company’s total net revenue investment funds or partnerships that make equity
for 2023. Operating cash for these businesses is deposited investments, provide debt financing or support community-
on a short-term basis typically with certain European central based investments in tax-advantaged projects. In addition to
banks. For deposits placed at other European banks, providing investment returns, these arrangements in many
exposure is mitigated by the Company placing deposits at cases assist the Company in complying with requirements
multiple banks and managing the amounts on deposit at any of the Community Reinvestment Act. The investments in
bank based on institution-specific deposit limits. At these entities generate a return primarily through the
December 31, 2023, the Company had an aggregate realization of federal and state income tax credits and other

53
tax benefits, such as tax deductions from operating losses January 1, 2021. The Company suspended all common
of the investments, over specified time periods. The entities stock repurchases at the beginning of the third quarter of
in which the Company invests are generally considered 2021, except for those done exclusively in connection with
variable interest entities (“VIEs”). The Company’s recorded its stock-based compensation programs, due to its
investment in these entities, net of contractual equity acquisition of MUB. The Company will evaluate its share
investment commitments of $3.6 billion, was $3.0 billion at repurchases in connection with the potential capital
December 31, 2023. requirements given proposed regulatory capital rules and
The Company also has non-controlling financial related landscape.
investments in private funds and partnerships considered Capital distributions, including dividends and stock
VIEs. The Company’s recorded investment in these entities repurchases, are subject to the approval of the Company’s
was approximately $219 million at December 31, 2023, and Board of Directors and compliance with regulatory
the Company had unfunded commitments to invest an requirements. For a more complete analysis of activities
additional $100 million. For more information on the impacting shareholders’ equity and capital management
Company’s interests in unconsolidated VIEs, refer to Note 8 programs, refer to Note 15 of the Notes to Consolidated
in the Notes to Consolidated Financial Statements. Financial Statements.
Guarantees are contingent commitments issued by the Total U.S. Bancorp shareholders’ equity was $55.3 billion
Company to customers or other third parties requiring the at December 31, 2023, compared with $50.8 billion at
Company to perform if certain conditions exist or upon the December 31, 2022. The increase was primarily the result of
occurrence or nonoccurrence of a specified event, such as a corporate earnings, the issuance of shares of common stock
scheduled payment to be made under contract. The and changes in unrealized gains and losses on available-
Company’s primary guarantees include commitments from for-sale investment securities included in other
securities lending activities in which indemnifications are comprehensive income (loss), partially offset by dividends
provided to customers; indemnification or buy-back paid. In the third quarter of 2023, the Company issued 24
provisions related to sales of loans and tax credit million shares of common stock of the Company to an
investments; and merchant charge-back guarantees through affiliate of MUFG for a purchase price of $936 million. The
the Company’s involvement in providing merchant proceeds of the issuance were used to repay a portion of
processing services. For certain guarantees, the Company the Company’s $3.5 billion debt obligation to MUFG. See
may have access to collateral to support the guarantee, or “MUFG Union Bank Acquisition” on page 22 for further
through the exercise of other recourse provisions, be able to information.
offset some or all of any payments made under these The regulatory capital requirements effective for the
guarantees. Company follow Basel III, with the Company being subject
The Company and certain of its subsidiaries, along with to calculating its capital adequacy as a percentage of risk-
other Visa U.S.A. Inc. member banks, have a contingent weighted assets under the standardized approach. Under
guarantee obligation to indemnify Visa Inc. for potential Basel III, banking regulators define minimum capital
losses arising from antitrust lawsuits challenging the requirements for banks and financial services holding
practices of Visa U.S.A. Inc. and MasterCard International. companies. These requirements are expressed in the form
The indemnification by the Company and other Visa U.S.A. of a minimum common equity tier 1 capital ratio, tier 1
Inc. member banks has no maximum amount. Refer to Note capital ratio, total risk-based capital ratio, tier 1 leverage
23 in the Notes to Consolidated Financial Statements for ratio and a tier 1 total leverage exposure, or supplementary
further details regarding guarantees, other commitments, leverage, ratio. The Company’s minimum required level for
and contingent liabilities, including maximum potential future these ratios at December 31, 2023, which include a stress
payments and current carrying amounts. capital buffer of 2.5 percent for the common equity tier 1
capital, tier 1 capital and total capital ratios, was 7.0 percent,
Capital Management The Company is committed to 8.5 percent, 10.5 percent, 4.0 percent, and 3.0 percent,
managing capital to maintain strong protection for respectively. The Company targets its regulatory capital
depositors and creditors and for maximum shareholder levels, at both the bank and bank holding company level, to
benefit. The Company also manages its capital to exceed exceed the “well-capitalized” threshold for these ratios under
regulatory capital requirements for banking organizations. the FDIC Improvement Act prompt corrective action
To achieve its capital goals, the Company employs a variety provisions that are applicable to all banks. At December 31,
of capital management tools, including dividends, common 2023, the minimum “well-capitalized” thresholds under the
share repurchases, and the issuance of subordinated debt, prompt corrective action framework for the common equity
non-cumulative perpetual preferred stock, common stock tier 1 capital ratio, tier 1 capital ratio, total risk-based capital
and other capital instruments. ratio, tier 1 leverage ratio, and tier 1 total leverage exposure
The Company announced on December 12, 2023 that its ratio was 6.5 percent, 8.0 percent, 10.0 percent, 5.0
Board of Directors had approved a regular quarterly percent, and 3.0 percent, respectively. Beginning in 2022,
dividend of $0.49 per common share. This represented a the Company began to phase into its regulatory capital
2.1 percent increase over the previous dividend rate per requirements the cumulative deferred impact of its 2020
common share of $0.48 per quarter. adoption of the accounting guidance related to the
The Company announced on December 22, 2020 that its impairment of financial instruments based on the current
Board of Directors had approved an authorization to expected credit losses (“CECL”) methodology plus 25
repurchase $3.0 billion of its common stock beginning percent of its quarterly credit reserve increases during 2020

54 U.S. Bancorp 2023 Annual Report

and 2021. This cumulative deferred impact will continue to considered “well-capitalized”. There are no conditions or
be phased into the Company’s regulatory capital over the events since December 31, 2023 that management believes
next year, culminating with a fully phased in regulatory have changed the risk-based category of USBNA.
capital calculation beginning in 2025. As of December 31,
2023, USBNA met all regulatory capital ratios to be

TABLE 22 Regulatory Capital Ratios

At December 31 (Dollars in Millions) 2023 2022
Basel III standardized approach:
Common shareholders’ equity $ 48,498 $ 43,958
Less intangible assets
Goodwill (net of deferred tax liability) (11,480) (11,395)
Other disallowed intangible assets (net of deferred tax liability) (2,278) (2,792)
(a)
Other 10,207 11,789
Common equity tier 1 capital 44,947 41,560
Qualifying preferred stock 6,808 6,808
Noncontrolling interests eligible for tier 1 capital 450 450
Other(b) (6) (5)
Tier 1 capital 52,199 48,813
Eligible portion of allowance for credit losses 5,645 5,682
Subordinated debt and noncontrolling interests eligible for tier 2 capital 4,077 4,520
Tier 2 capital 9,722 10,202
Total risk-based capital $ 61,921 $ 59,015
Risk-weighted assets $ 453,390 $ 496,500
Common equity tier 1 capital as a percent of risk-weighted assets 9.9% 8.4%
Tier 1 capital as a percent of risk-weighted assets 11.5 9.8
Total risk-based capital as a percent of risk-weighted assets 13.7 11.9
Tier 1 capital as a percent of adjusted quarterly average assets (leverage ratio) 8.1 7.9
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure (total leverage exposure ratio) 6.6 6.4
(a) Includes the impact of items included in other comprehensive income (loss), such as unrealized gains (losses) on available-for-sale securities, accumulated net gains on cash flow
hedges, pension liability adjustments, etc., and the portion of deferred tax assets related to net operating loss and tax credit carryforwards not eligible for common equity tier 1
capital.
(b) Includes the remaining portion of deferred tax assets not eligible for total tier 1 capital.

Table 22 provides a summary of statutory regulatory accordance with transitional regulatory capital requirements
capital ratios in effect for the Company at December 31, related to the CECL methodology under the standardized
2023 and 2022. All regulatory ratios exceeded regulatory approach, was 5.3 percent and 7.7 percent, respectively, at
“well-capitalized” requirements. December 31, 2023, compared with 4.5 percent and 6.0
In July 2023, the U.S. federal bank regulatory authorities percent at December 31, 2022, respectively. In addition, the
proposed a rule implementing the Basel Committee’s Company’s common equity tier 1 capital to risk-weighted
finalization of the post-crisis regulatory capital reforms. The assets ratio, reflecting the full implementation of the CECL
proposal provides for a July 1, 2025 effective date, subject methodology was 9.7 percent at December 31, 2023,
to a three-year transition period. The proposal includes the compared with 8.1 percent at December 31, 2022. Refer to
Fundamental Review of the Trading Book, which replaces “Non-GAAP Financial Measures” beginning on page 59 for
the market risk rule, and introduces new standardized further information on these other capital ratios.
approaches for credit risk, operational risk and credit As an approved mortgage seller and servicer, USBNA,
valuation adjustment (CVA) risk, which would replace the through its mortgage banking division, is required to
current models-based approaches. The Company is maintain various levels of shareholder’s equity, as specified
currently evaluating the impact of the proposed rule and by various agencies, including the United States
expects that any final rule would result in the Company Department of Housing and Urban Development,
being required to maintain increased levels of regulatory Government National Mortgage Association, Federal Home
capital. Loan Mortgage Corporation and the Federal National
The Company believes certain other capital ratios are Mortgage Association. At December 31, 2023, USBNA met
useful in evaluating its capital adequacy. The Company’s these requirements.
tangible common equity, as a percent of tangible assets and
as a percent of risk-weighted assets determined in

55
Line of Business Financial Review business banking and consumer lending. Products and
services are delivered through banking offices, telephone
The Company’s major lines of business are Wealth, servicing and sales, online services, direct mail, ATM
Corporate, Commercial and Institutional Banking, Consumer processing, mobile devices, distributed mortgage loan
and Business Banking, Payment Services, and Treasury officers, and intermediary relationships including auto
and Corporate Support. dealerships, mortgage banks, and strategic business
Basis for Financial Presentation Business line results are partners. Consumer and Business Banking contributed $2.2
derived from the Company’s business unit profitability billion of the Company’s net income in 2023, or an increase
reporting systems by specifically attributing managed of $378 million (20.6 percent), compared with 2022.
balance sheet assets, deposits and other liabilities and their Net revenue increased $1.7 billion (20.4 percent) in
related income or expense. Refer to Note 24 of the Notes to 2023, compared with 2022. Net interest income, on a
Consolidated Financial Statements for further information on taxable-equivalent basis, increased $1.6 billion (23.2
the business lines’ basis for financial presentation. percent) in 2023, compared with 2022, reflecting the
Designations, assignments and allocations change from favorable impact of higher rates on the margin benefit of
time to time as management systems are enhanced, deposits and the acquisition of MUB, partially offset by the
methods of evaluating performance or product lines change impact of deposit mix and pricing. Noninterest income
or business segments are realigned to better respond to the increased $126 million (8.2 percent) in 2023, compared with
Company’s diverse customer base. During 2023, certain 2022, primarily due to higher mortgage banking revenue
organization and methodology changes were made, driven by increases in MSR valuations, net of hedging
including the Company combining its Wealth Management activities, along with the impact of the MUB acquisition.
and Investment Services and Corporate and Commercial Noninterest expense increased $1.2 billion (20.5 percent)
Banking lines of businesses to create the Wealth, in 2023, compared with 2022, primarily due to increases in
Corporate, Commercial and Institutional Banking line of compensation and employee benefits expense and net
business. 2022 results were restated and presented on a shared services expense due to investments in digital
comparable basis. capabilities, and the impact of the MUB acquisition,
including intangible amortization driven by the core deposit
Wealth, Corporate, Commercial and Institutional intangible. The provision for credit losses increased $4
Banking Wealth, Corporate, Commercial and Institutional million (5.3 percent) in 2023, compared with 2022, due to
Banking provides core banking, specialized lending, normalizing credit conditions, partially offset by declining
transaction and payment processing, capital markets, asset loan balances.
management, and brokerage and investment related
services to wealth, middle market, large corporate, Payment Services Payment Services includes consumer
government and institutional clients. Wealth, Corporate, and business credit cards, stored-value cards, debit cards,
Commercial and Institutional Banking contributed $3.6 corporate, government and purchasing card services and
billion of the Company’s net income in 2023, or an increase merchant processing. Payment Services contributed $1.2
of $202 million (6.0 percent), compared with 2022. billion of the Company’s net income in 2023, or a decrease
Net revenue increased $1.5 billion (17.1 percent) in of $150 million (11.2 percent), compared with 2022.
2023, compared with 2022. Net interest income, on a Net revenue increased $460 million (7.3 percent) in
taxable-equivalent basis, increased $916 million (17.6 2023, compared with 2022. Net interest income, on a
percent) in 2023, compared with 2022, primarily due to the taxable-equivalent basis, increased $198 million (7.9
impact of higher rates on the margin benefit from deposits percent) in 2023, compared with 2022, primarily due to
and the acquisition of MUB, partially offset by the impact of higher loan yields driven by higher interest rates and lower
deposit mix and pricing. Noninterest income increased $582 payment rates, along with higher loan balances, partially
million (16.3 percent) in 2023, compared with 2022, offset by higher funding costs. Noninterest income
primarily due to higher trust and investment management increased $262 million (6.9 percent) in 2023, compared with
fees driven by the acquisition of MUB and core business 2022, driven by higher card revenue and merchant
growth, and higher commercial products revenue mainly processing services revenue due to higher spend volume,
due to higher trading revenue and corporate bond fees. along with higher corporate payment products revenue due
Noninterest expense increased $1.0 billion (25.3 percent) to product mix.
in 2023, compared with 2022, primarily due to higher FDIC Noninterest expense increased $247 million (7.0 percent)
insurance expense driven by an increase in the assessment in 2023, compared with 2022, reflecting higher net shared
base and rate along with the inclusion of MUB in the current services expense driven by investment in infrastructure and
year. Compensation and employee benefits expense and technology development, in addition to higher compensation
net shared services expense were also higher, driven by and employee benefits expense as a result of merit
investment in support of business growth and the impact of increases and core business growth. The provision for credit
the MUB acquisition, including intangible amortization driven losses increased $414 million (42.2 percent) in 2023,
by the core deposit intangible. The provision for credit compared with 2022, primarily due to normalizing credit
losses increased $180 million in 2023, compared with 2022, conditions exhibited through increasing delinquency and
primarily due to commercial real estate credit quality. credit loss rates.

Consumer and Business Banking Consumer and Treasury and Corporate Support Treasury and Corporate
Business Banking comprises consumer banking, small Support includes the Company’s investment portfolios,

56 U.S. Bancorp 2023 Annual Report

funding, capital management, interest rate risk Noninterest expense increased $1.5 billion in 2023,
management, income taxes not allocated to the business compared with 2022, primarily due to merger and integration
lines, including most investments in tax-advantaged charges and operating expenses related to the acquisition of
projects, and the residual aggregate of those expenses MUB, the FDIC special assessment charge, higher
associated with corporate activities that are managed on a compensation and employee benefits expense reflecting
consolidated basis. Treasury and Corporate Support merit increases and hiring to support business growth, and
recorded a net loss of $1.5 billion in 2023, compared with a higher marketing and business development expense as the
net loss of $716 million in 2022. Company continues to invest in its national brand and global
Net revenue increased $191 million (20.5 percent) in reach. These increases were partially offset by lower net
2023, compared with 2022. Noninterest income increased shared services expense. The provision for credit losses
$191 million (33.8 percent) in 2023, compared with 2022, was $300 million (39.1 percent) lower in 2023, compared
primarily due to the impacts of balance sheet repositioning with 2022, primarily due to the initial provision for credit
and capital management actions taken in the fourth quarter losses recorded in the fourth quarter of 2022 related to the
of 2022, partially offset by losses on the sale of investment MUB acquisition.
securities in the fourth quarter of 2023 related to balance Income taxes are assessed to each line of business at a
sheet repositioning. Net interest income, on a taxable- managerial tax rate of 25.0 percent with the residual tax
equivalent basis, was unchanged in 2023, compared with expense or benefit to arrive at the consolidated effective tax
2022, driven by higher funding costs, offset by higher yields rate included in Treasury and Corporate Support.
on the investment portfolio and cash balances.

57
 TABLE 23 Line of Business Financial Performance
Wealth, Corporate, Commercial and Consumer and
Institutional Banking Business Banking Payment Services
Year Ended December 31 Percent Percent Percent
(Dollars in Millions) 2023 2022 Change 2023 2022 Change 2023 2022 Change
Condensed Income Statement
Net interest income (taxable-equivalent
basis) $ 6,129 $ 5,213 17.6% $ 8,331 $ 6,764 23.2% $ 2,702 $ 2,504 7.9%
Noninterest income 4,143 3,561 16.3 1,662 1,536 8.2 4,056 3,794 6.9
Total net revenue 10,272 8,774 17.1 9,993 8,300 20.4 6,758 6,298 7.3
Noninterest expense 5,183 4,135 25.3 6,964 5,779 20.5 3,772 3,525 7.0
Income (loss) before provision and
income taxes 5,089 4,639 9.7 3,029 2,521 20.2 2,986 2,773 7.7
Provision for credit losses 334 154 * 79 75 5.3 1,394 980 42.2
Income (loss) before income taxes 4,755 4,485 6.0 2,950 2,446 20.6 1,592 1,793 (11.2)
Income taxes and taxable-equivalent
adjustment 1,190 1,122 6.1 738 612 20.6 398 449 (11.4)
Net income (loss) 3,565 3,363 6.0 2,212 1,834 20.6 1,194 1,344 (11.2)
Net (income) loss attributable to
noncontrolling interests — — — — — — — — —
Net income (loss) attributable to U.S.
Bancorp $ 3,565 $ 3,363 6.0 $ 2,212 $ 1,834 20.6 $ 1,194 $ 1,344 (11.2)
Average Balance Sheet
Loans $ 175,780 $ 150,512 16.8 $ 161,862 $ 144,441 12.1 $ 38,471 $ 34,627 11.1
Goodwill 4,682 3,634 28.8 4,466 3,250 37.4 3,327 3,305 .7
Other intangible assets 1,007 365 * 5,265 3,784 39.1 350 423 (17.3)
Assets 202,642 169,554 19.5 179,103 160,174 11.8 44,292 41,072 7.8
Noninterest-bearing deposits 70,977 82,671 (14.1) 31,082 31,719 (2.0) 2,981 3,410 (12.6)
Interest-bearing deposits 199,780 175,345 13.9 189,148 163,190 15.9 103 162 (36.4)
Total deposits 270,757 258,016 4.9 220,230 194,909 13.0 3,084 3,572 (13.7)
Total U.S. Bancorp shareholders’ equity 22,362 18,159 23.1 16,016 12,678 26.3 9,310 8,233 13.1
Treasury and Consolidated
Corporate Support Company
Year Ended December 31 Percent Percent
(Dollars in Millions) 2023 2022 Change 2023 2022 Change
Condensed Income Statement
Net interest income (taxable-equivalent
basis) $ 365 $ 365 —% $ 17,527 $ 14,846 18.1%
Noninterest income 756 565 33.8 10,617 9,456 12.3
Total net revenue 1,121 930 20.5 28,144 24,302 15.8
Noninterest expense 2,954 1,467 * 18,873 14,906 26.6
Income (loss) before provision and
income taxes (1,833) (537) * 9,271 9,396 (1.3)
Provision for credit losses 468 768 (39.1) 2,275 1,977 15.1
Income (loss) before income taxes (2,301) (1,305) (76.3) 6,996 7,419 (5.7)
Income taxes and taxable-equivalent
adjustment (788) (602) (30.9) 1,538 1,581 (2.7)
Net income (loss) (1,513) (703) * 5,458 5,838 (6.5)
Net (income) loss attributable to
noncontrolling interests (29) (13) * (29) (13) *
Net income (loss) attributable to U.S.
Bancorp $ (1,542) $ (716) * $ 5,429 $ 5,825 (6.8)
Average Balance Sheet
Loans $ 5,162 $ 3,993 29.3 $ 381,275 $ 333,573 14.3
Goodwill — — — 12,475 10,189 22.4
Other intangible assets 17 5 * 6,639 4,577 45.1
Assets 237,403 221,349 7.3 663,440 592,149 12.0
Noninterest-bearing deposits 2,728 2,594 5.2 107,768 120,394 (10.5)
Interest-bearing deposits 8,864 3,293 * 397,895 341,990 16.3
Total deposits 11,592 5,887 96.9 505,663 462,384 9.4
Total U.S. Bancorp shareholders’ equity 5,972 11,346 (47.4) 53,660 50,416 6.4
*Not meaningful

58 U.S. Bancorp 2023 Annual Report

Non-GAAP Financial Measures The Company discloses the return on tangible common
equity ratio and tangible book value per share as it believes
In addition to capital ratios defined by banking regulators, they are useful financial measures to assess the Company's
the Company considers various other measures when use of equity.
evaluating capital utilization and adequacy, including: The Company also discloses net interest income and
• Tangible common equity to tangible assets, related ratios and analysis on a taxable-equivalent basis,
which may also be considered non-GAAP financial
• Tangible common equity to risk-weighted assets, and
measures. The Company believes this presentation to be
• Common equity tier 1 capital to risk-weighted assets, the preferred industry measurement of net interest income
reflecting the full implementation of the CECL as it provides a relevant comparison of net interest income
methodology. arising from taxable and tax-exempt sources. In addition,
These capital measures are viewed by management as certain performance measures, including the efficiency ratio
useful additional methods of evaluating the Company’s and net interest margin utilize net interest income on a
utilization of its capital held and the level of capital available taxable-equivalent basis.
to withstand unexpected negative market or economic The Company also discloses the net charge-off ratio and
conditions. Additionally, presentation of these measures return on tangible common equity ratio excluding notable
allows investors, analysts and banking regulators to assess items related to the acquisition of MUB, and other balance
the Company’s capital position relative to other financial sheet repositioning and capital management actions taken
services companies. These capital measures are not by the Company. Management believes these measures
defined in generally accepted accounting principles enhance comparability with prior periods.
(“GAAP”), or are not currently effective or defined in banking The Company also discloses percent of net revenue for
regulations. In addition, certain of these measures differ its business lines excluding Treasury and Corporate Support
from currently effective capital ratios defined by banking to highlight the contributions to net revenue from the
regulations principally in that the currently effective ratios, Company's core revenue-producing businesses.
which are subject to certain transitional provisions, There may be limits in the usefulness of these measures
temporarily exclude the impact of the 2020 adoption of to investors. As a result, the Company encourages readers
accounting guidance related to impairment of financial to consider the consolidated financial statements and other
instruments based on the CECL methodology. As a result, financial information contained in this report in their entirety,
these capital measures disclosed by the Company may be and not to rely on any single financial measure.
considered non-GAAP financial measures. Management
believes this information helps investors assess trends in
the Company’s capital adequacy.

59
The following tables show the Company’s calculation of these non-GAAP financial measures:

At December 31 (Dollars in Millions) 2023 2022 2021

Total equity $ 55,771 $ 51,232 $ 55,387
Preferred stock (6,808) (6,808) (6,371)
Noncontrolling interests (465) (466) (469)
Goodwill (net of deferred tax liability)(a) (11,480) (11,395) (9,323)
Intangible assets (net of deferred tax liability), other than mortgage servicing rights (2,278) (2,792) (785)
Tangible common equity(1) 34,740 29,771 38,439
Common equity tier 1 capital, determined in accordance with transitional regulatory capital
requirements related to the CECL methodology implementation 44,947 41,560 41,701
(b)
Adjustments (866) (1,299) (1,733)
(2)
Common equity tier 1 capital, reflecting the full implementation of the CECL methodology 44,081 40,261 39,968
Total assets 663,491 674,805 573,284
Goodwill (net of deferred tax liability)(a) (11,480) (11,395) (9,323)
Intangible assets (net of deferred tax liability), other than mortgage servicing rights (2,278) (2,792) (785)
(3)
Tangible assets 649,733 660,618 563,176
Risk-weighted assets, determined in accordance with prescribed regulatory capital
requirements effective for the Company(4) 453,390 496,500 418,571
Adjustments(c) (736) (620) (357)
(5)
Risk-weighted assets, reflecting the full implementation of the CECL methodology 452,654 495,880 418,214
Ratios
Tangible common equity to tangible assets(1)/(3) 5.3% 4.5% 6.8%
(1)/(4)
Tangible common equity to risk-weighted assets 7.7 6.0 9.2
Common equity tier 1 capital to risk-weighted assets, reflecting the full implementation of the
CECL methodology(2)/(5) 9.7 8.1 9.6
(a) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements.
(b) Includes the estimated increase in the allowance for credit losses related to the adoption of the CECL methodology net of deferred taxes.
(c) Includes the impact of the estimated increase in the allowance for credit losses related to the adoption of the CECL methodology.

Year Ended December 31 (Dollars in Millions) 2023 2022 2021

Net interest income $ 17,396 $ 14,728 $ 12,494
Taxable-equivalent adjustment(a) 131 118 106
Net interest income, on a taxable-equivalent basis 17,527 14,846 12,600

Net interest income, on a taxable-equivalent basis (as calculated above) 17,527 14,846 12,600
Noninterest income 10,617 9,456 10,227
Less: Securities gains (losses), net (145) 20 103
Total net revenue, excluding net securities gains (losses)(1) 28,289 24,282 22,724
Noninterest expense(2) 18,873 14,906 13,728
Efficiency ratio(2)/(1) 66.7% 61.4% 60.4%
(a) Based on federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes.

Net Revenue as a Net Revenue as a Percent of the

Percent of the Consolidated Company Excluding
Year Ended December 31, 2023 (Dollars in Millions) Net Revenue Consolidated Company Treasury and Corporate Support
Wealth, Corporate, Commercial and Institutional Banking $ 10,272 36% 38%
Consumer and Business Banking 9,993 36 37
Payment Services 6,758 24 25
Treasury and Corporate Support 1,121 4
Consolidated Company 28,144 100%
Less: Treasury and Corporate Support 1,121
Consolidated Company excluding Treasury and Corporate Support $ 27,023 100%

60 U.S. Bancorp 2023 Annual Report

 Year Ended December 31 (Dollars in Millions) 2023
Net income applicable to U.S. Bancorp common shareholders $ 5,051
Intangible amortization (net-of-tax) 502
Net income applicable to U.S. Bancorp common shareholders, excluding intangibles amortization(1) 5,553
Less: Notable items(a) (1,597)
Net income applicable to U.S. Bancorp common shareholders, excluding intangibles amortization and notable
items(2) 7,150

Average total equity 54,125

Average preferred stock (6,808)
Average noncontrolling interests (465)
Average goodwill (net of deferred tax liability)(b) (11,485)
Average intangible assets (net of deferred tax liability), other than mortgage servicing rights (2,480)
Average tangible equity(3) 32,887
Return on tangible common equity(1)/(3) 16.9%
Return on tangible common equity, excluding notable items(2)/(3) 21.7%
(a) Notable items of $2.2 billion ($1.6 billion net-of-tax, including a $70 million discrete tax benefit) for the year ended December 31, 2023 included $(140) million of noninterest income
related to investment securities balance sheet repositioning and capital management actions, $1.0 billion of merger and integration-related charges, $734 million of FDIC special
assessment charges, a $110 million charitable contribution and $243 million of provision for credit losses related to balance sheet repositioning and capital management actions.
(b) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements.

Year Ended December 31 (Dollars in Millions) 2023 2022

Net charge-offs $ 1,905 $ 1,063

Less: Notable items(a) 400 368
(1)
Net charge-offs, excluding notable items 1,505 695
Average loan balances(2) 381,275 333,573
Net charge-off ratio, excluding notable items(1)/(2) .39% .21%
(a) Notable items for the year ended December 31, 2023 included $309 million of net charge-offs related to balance sheet repositioning and capital management actions and $91
million of net charge-offs related to the uncollectible amount of acquired MUB loans, which were considered purchased credit deteriorated as of the date of acquisition. Notable
items for the year ended December 31, 2022 included $179 million of net charge-offs related to uncollectible MUB acquired loans as well as $189 million of net charge-offs related
to balance sheet repositioning and capital management actions.

Percent
At December 31 (Dollars in Millions, Except Per Share Data) 2023 2022 Change
Common equity $ 48,498 $ 43,958
(a)
Goodwill (net of deferred tax liability) (11,480) (11,395)
Intangible assets (net of deferred tax liability), other than mortgage servicing rights (2,278) (2,792)
Tangible common equity(1) 34,740 29,771
Common shares outstanding(2) 1,558 1,531
Tangible book value per common share(1)/(2) $ 22.30 $ 19.45 14.7%
(a) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements.

Accounting Changes conformity with GAAP requires management to make

estimates and assumptions. The Company’s financial
Note 2 of the Notes to Consolidated Financial Statements
position and results of operations can be affected by these
discusses accounting standards recently issued but not yet
estimates and assumptions, which are integral to
required to be adopted and the expected impact of these
understanding the Company’s financial statements. Critical
changes in accounting standards. To the extent the
accounting policies are those policies management believes
adoption of new accounting standards materially affects the
are the most important to the portrayal of the Company’s
Company’s financial condition or results of operations, the
financial condition and results, and require management to
impacts are discussed in the applicable section(s) of the
make estimates that are difficult, subjective or complex.
Management’s Discussion and Analysis and the Notes to
Most accounting policies are not considered by
Consolidated Financial Statements.
management to be critical accounting policies. Several
Critical Accounting Policies factors are considered in determining whether or not a
policy is critical in the preparation of financial statements.
The accounting and reporting policies of the Company These factors include, among other things, whether the
comply with accounting principles generally accepted in the estimates are significant to the financial statements, the
United States and conform to general practices within the nature of the estimates, the ability to readily validate the
banking industry. The preparation of financial statements in estimates with other information (including third-party

61
sources or available prices), sensitivity of the estimates to inflationary pressures, continually elevated high interest
changes in economic conditions and whether alternative rates, declines in residential and commercial real estate
accounting methods may be utilized under GAAP. prices, high unemployment rates, supply shortages,
Management has discussed the development and the geopolitical risks, bank tightening and lingering concerns of
selection of critical accounting policies with the Company’s future bank failures, which could all precipitate a moderate
Audit Committee. to severe recession and result in increased credit losses.
Significant accounting policies are discussed in Note 1 of Under the range of economic scenarios considered, the
the Notes to Consolidated Financial Statements. Those allowance for credit losses would have been lower by
policies considered to be critical accounting policies are $1.1 billion or higher by $2.3 billion. This range reflects the
described below. sensitivity of the allowance for credit losses specifically
related to the scenarios and weights considered as of
Allowance for Credit Losses Management’s evaluation of
December 31, 2023, and does not consider other potential
the appropriate allowance for credit losses is often the most
adjustments that could increase or decrease loss estimates
critical of all the accounting estimates for a banking
calculated using alternative economic scenarios.
institution. It is an inherently subjective process impacted by
Because several quantitative and qualitative factors are
many factors as discussed throughout the Management’s
considered in determining the allowance for credit losses,
Discussion and Analysis section of the Annual Report.
these sensitivity analyses do not necessarily reflect the
The methods utilized to estimate the allowance for credit
nature and extent of future changes in the allowance for
losses, key assumptions and quantitative and qualitative
credit losses. They are intended to provide insights into the
information considered by management in determining the
impact of adverse changes in the economy on the
appropriate allowance for credit losses at December 31,
Company’s modeled loss estimates for the loan portfolio
2023 are discussed in the “Credit Risk Management”
and do not imply any expectation of future deterioration in
section. Although methodologies utilized to determine each
the risk rating or loss rates. Given current processes
element of the allowance reflect management’s assessment
employed by the Company, management believes the risk
of credit risk, imprecision exists in these measurement tools
ratings and loss model estimates currently assigned are
due in part to subjective judgments involved and an inherent
appropriate. It is possible that others, given the same
lag in the data available to quantify current conditions and
information, may at any point in time reach different
events that affect credit loss reserve estimates.
reasonable conclusions that could be significant to the
Given the many quantitative variables and subjective
Company’s financial statements. Refer to the “Analysis and
factors affecting the credit portfolio, changes in the
Determination of the Allowance for Credit Losses” section
allowance for credit losses may not directly coincide with
for further information.
changes in risk ratings or delinquency status within loan and
lease portfolios. This is in part due to the timing of the risk Fair Value Estimates A portion of the Company’s assets
rating process in relation to changes in the business cycle, and liabilities are carried at fair value on the Consolidated
the exposure and mix of loans within risk rating categories, Balance Sheet, with changes in fair value recorded either
levels of nonperforming loans and the timing of charge-offs through earnings or other comprehensive income (loss) in
and expected recoveries. The allowance for credit losses accordance with applicable accounting principles generally
measures the expected loss content on the remaining accepted in the United States. These include all of the
portfolio exposure, while nonperforming loans and net Company’s available-for-sale investment securities,
charge-offs are measures of specific impairment events that derivatives and other trading instruments, MSRs and
have already been confirmed. Therefore, the degree of MLHFS. The estimation of fair value also affects other loans
change in the forward-looking expected loss in the held for sale, which are recorded at the lower-of-cost-or-fair
allowance may differ from the level of changes in value. The determination of fair value is important for certain
nonperforming loans and net charge-offs. Management other assets that are periodically evaluated for impairment
maintains an appropriate allowance for credit losses by using fair value estimates, including goodwill. Refer to Note
updating allowance rates to reflect changes in expected 3 of the Notes to Consolidated Financial Statements for
losses, including expected changes in economic or business additional information on fair value estimates of assets and
cycle conditions. Some factors considered in determining liabilities assumed in the MUB acquisition.
the appropriate allowance for credit losses are more readily Fair value is generally defined as the exit price at which
quantifiable while other factors require extensive qualitative an asset or liability could be exchanged in a current
judgment in determining the overall level of the allowance transaction between willing, unrelated parties, other than in
for credit losses. a forced or liquidation sale. Fair value is based on quoted
The Company considers a range of economic scenarios market prices in an active market, or if market prices are not
in its determination of the allowance for credit losses. These available, is estimated using models employing techniques
scenarios are constructed with interrelated projections of such as matrix pricing or discounting expected cash flows.
multiple economic variables, and loss estimates are The significant assumptions used in the models, which
produced that consider the historical correlation of those include assumptions for interest rates, discount rates,
economic variables with credit losses, and also the prepayments and credit losses, are independently verified
expectation that conditions will eventually normalize over against observable market data where possible. Where
the longer run. Scenarios worse than the Company’s observable market data is not available, the estimate of fair
expected outcome at December 31, 2023 include risks of value becomes more subjective and involves a high degree
later than expected cuts in the federal funds rate, persisting of judgment. In this circumstance, fair value is estimated

62 U.S. Bancorp 2023 Annual Report

based on management’s judgment regarding the value that assets or other liabilities on the Consolidated Balance Sheet
market participants would assign to the asset or liability. and represent the net estimated amount due to or to be
This valuation process takes into consideration factors such received from taxing jurisdictions either currently or deferred
as market illiquidity. Imprecision in estimating these factors to future periods. Deferred taxes arise from differences
can impact the amount recorded on the balance sheet for a between assets and liabilities measured for financial
particular asset or liability with related impacts to earnings or reporting purposes versus income tax reporting purposes.
other comprehensive income (loss). Deferred tax assets are recognized if, in management’s
When available, trading and available-for-sale securities judgment, their realizability is determined to be more likely
are valued based on quoted market prices. However, certain than not. Uncertain tax positions that meet the more likely
securities are traded less actively and, therefore, quoted than not recognition threshold are measured to determine
market prices may not be available. The determination of the amount of benefit to recognize. An uncertain tax position
fair value may require benchmarking to similar instruments is measured at the largest amount of benefit management
or performing a discounted cash flow analysis using believes is more likely than not to be realized upon
estimates of future cash flows and prepayment, interest and settlement. In estimating accrued taxes, the Company
default rates. For more information on investment securities, assesses the relative merits and risks of the appropriate tax
refer to Note 5 of the Notes to Consolidated Financial treatment considering statutory, judicial and regulatory
Statements. guidance in the context of the tax position. Because of the
As few derivative contracts are listed on an exchange, complexity of tax laws and regulations, interpretation can be
the majority of the Company’s derivative positions are difficult and subject to legal judgment given specific facts
valued using valuation techniques that use readily and circumstances. It is possible that others, given the same
observable market inputs. Certain derivatives, however, information, may at any point in time reach different
must be valued using techniques that include unobservable reasonable conclusions regarding the estimated amounts of
inputs. For these instruments, the significant assumptions accrued taxes.
must be estimated and, therefore, are subject to judgment. Changes in the estimate of accrued taxes occur
Note 20 of the Notes to Consolidated Financial Statements periodically due to changes in tax rates, interpretations of
provides a summary of the Company’s derivative positions. tax laws, the status of examinations being conducted by
Refer to Note 22 of the Notes to Consolidated Financial various taxing authorities, and newly enacted statutory,
Statements for additional information regarding estimations judicial and regulatory guidance that impacts the relative
of fair value. merits and risks of tax positions. These changes, when they
occur, affect accrued taxes and can be significant to the
Mortgage Servicing Rights MSRs are capitalized as
operating results of the Company. Refer to Note 19 of the
separate assets when loans are sold and servicing is
Notes to Consolidated Financial Statements for additional
retained, or may be purchased from others. The Company
information regarding income taxes.
records MSRs at fair value. Because MSRs do not trade in
an active market with readily observable prices, the
Company determines the fair value by estimating the
Controls and Procedures
present value of the asset’s future cash flows utilizing Under the supervision and with the participation of the
market-based prepayment rates, option adjusted spread, Company’s management, including its principal executive
and other assumptions validated through comparison to officer and principal financial officer, the Company has
trade information, industry surveys and independent third- evaluated the effectiveness of the design and operation of
party valuations. Changes in the fair value of MSRs are its disclosure controls and procedures (as defined in Rules
recorded in earnings during the period in which they occur. 13a-15(e) and 15d-15(e) under the Securities Exchange Act
Risks inherent in the valuation of MSRs include higher than of 1934 (the “Exchange Act”)). Based upon this evaluation,
expected prepayment rates and/or delayed receipt of cash the principal executive officer and principal financial officer
flows. The Company utilizes derivatives, including interest have concluded that, as of the end of the period covered by
rate swaps, swaptions, forward commitments to buy TBAs, this report, the Company’s disclosure controls and
U.S. Treasury and Eurodollar futures and options on U.S. procedures were effective.
Treasury futures, to mitigate the valuation risk. Refer to During the most recently completed fiscal quarter, there
Notes 10 and 22 of the Notes to Consolidated Financial was no change made in the Company’s internal control over
Statements for additional information on the assumptions financial reporting (as defined in Rules 13a-15(f) and
used in determining the fair value of MSRs and an analysis 15d-15(f) under the Exchange Act) that has materially
of the sensitivity to changes in interest rates of the fair value affected, or is reasonably likely to materially affect, the
of the MSRs portfolio and the related derivative instruments Company’s internal control over financial reporting.
used to mitigate the valuation risk. The annual report of the Company’s management on
Income Taxes The Company estimates income tax internal control over financial reporting is provided on page
expense based on amounts expected to be owed to the 64. The audit report of Ernst & Young LLP, the Company’s
various tax jurisdictions in which it operates, including independent accountants, regarding the Company’s internal
federal, state and local domestic jurisdictions, and an control over financial reporting is provided on page 65.
insignificant amount to foreign jurisdictions. The estimated
income tax expense is reported in the Consolidated
Statement of Income. Accrued taxes are reported in other

63
Report of Management
Responsibility for the financial statements and other information presented throughout this Annual Report rests with the
management of U.S. Bancorp. The Company believes the consolidated financial statements have been prepared in conformity
with accounting principles generally accepted in the United States and present the substance of transactions based on the
circumstances and management’s best estimates and judgment.

In meeting its responsibilities for the reliability of the financial statements, management is responsible for establishing and
maintaining an adequate system of internal control over financial reporting as defined by Rules 13a-15(f) and 15d-15(f) under the
Securities Exchange Act of 1934. The Company’s system of internal control is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of publicly filed financial statements in accordance with
accounting principles generally accepted in the United States.

To test compliance, the Company carries out an extensive audit program. This program includes a review for compliance with
written policies and procedures and a comprehensive review of the adequacy and effectiveness of the system of internal control.
Although control procedures are designed and tested, it must be recognized that there are limits inherent in all systems of internal
control and, therefore, errors and irregularities may nevertheless occur. Projection of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.

The Board of Directors of the Company has an Audit Committee composed of directors who are independent of U.S. Bancorp. The
Audit Committee meets periodically with management, the internal auditors and the independent accountants to consider audit
results and to discuss internal accounting control, auditing and financial reporting matters.

Management assessed the effectiveness of the Company’s system of internal control over financial reporting as of December 31,
2023. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission in its Internal Control—Integrated Framework (2013 framework). Based on its assessment and those
criteria, management believes the Company maintained effective internal control over financial reporting as of December 31, 2023.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2023 has been audited by Ernst &
Young LLP, an independent registered public accounting firm, as stated in their accompanying report appearing on page 65.

64 U.S. Bancorp 2023 Annual Report

Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of U.S. Bancorp

Opinion on Internal Control Over Financial Reporting

We have audited U.S. Bancorp’s internal control over financial reporting as of December 31, 2023, based on criteria established in
Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(2013 framework) (the COSO criteria). In our opinion, U.S. Bancorp (the Company) maintained, in all material respects, effective
internal control over financial reporting as of December 31, 2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated
statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended
December 31, 2023, and the related notes and our report dated February 20, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management.
Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a
public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material
respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of
the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Minneapolis, Minnesota
February 20, 2024

65
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of U.S. Bancorp

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of U.S. Bancorp (the Company) as of December 31, 2023 and
2022, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the
three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial
statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of
the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in
the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company’s internal control over financial reporting as of December 31, 2023 based on criteria established in
Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013
framework), and our report dated February 20, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the
Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required
to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements,
whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a
test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the
financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was
communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are
material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The
communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as
a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter
or on the accounts or disclosures to which it relates.

Allowance for Credit Losses

Description of the The Company’s loan and lease portfolio and the associated allowance for credit losses (ACL), were
Matter $373.8 billion and $7.8 billion as of December 31, 2023, respectively. The provision for credit losses was
$2.3 billion for the year ended December 31, 2023. As discussed in Notes 1 and 6 to the financial
statements, the ACL is established for current expected credit losses on the Company’s loan and lease
portfolio, including unfunded credit commitments, by utilizing forward-looking expected loss models.
When determining expected losses, the Company uses multiple probability weighted economic scenarios
over a reasonable and supportable forecast period and then fully reverts to historical loss experience to
estimate losses over the remaining asset lives. Model estimates are adjusted to consider any relevant
changes in portfolio composition, lending policies, underwriting standards, risk management practices or
economic conditions that would affect the accuracy of the model. Additionally, management may adjust
ACL for other qualitative factors such as model imprecision, imprecision in economic scenario
assumptions, and emerging risks related to either changes in the environment that are affecting specific
portfolio segments, or changes in portfolio concentrations.

Auditing management’s ACL estimate and related provision for credit losses was complex due to the
highly judgmental nature of the probability weighted economic scenarios, expected loss models, as well
as model and qualitative factor adjustments.

66 U.S. Bancorp 2023 Annual Report

How We We obtained an understanding, evaluated the design and tested the operating effectiveness of the
Addressed the Company’s process for establishing the ACL, including management’s controls over: 1) selection and
Matter in Our implementation of forward-looking economic scenarios and the probability weights assigned to them; 2)
Audit expected loss models, including model validation, implementation, monitoring, the completeness and
accuracy of key inputs and assumptions used in the models, and management’s output assessment and
related adjustments; 3) adjustments to reflect management’s consideration of qualitative factors; 4) the ACL
methodology and governance process.

With the support of specialists, we assessed the economic scenarios and related probability weights by,
among other procedures, evaluating management’s methodology and agreeing a sample of key economic
variables used to external sources. We also performed and considered the results of various sensitivity
analyses and analytical procedures, including comparison of a sample of the key economic variables to
alternative external sources, historical statistics and peer bank information.

With respect to expected loss models, with the support of specialists, we evaluated model calculation
design and reperformed the calculation for a sample of models. We also tested the appropriateness of key
inputs and assumptions used in these models by agreeing a sample of inputs to internal and external
sources. As to model adjustments, with the support of specialists, we evaluated management’s estimate
methodology and assessment of factors that could potentially impact the accuracy of expected loss
models. We also recalculated a sample of model adjustments and tested internal and external data used by
agreeing a sample of inputs to internal and external sources.

Regarding the completeness of qualitative factors identified and incorporated into measuring the ACL, we
evaluated the potential impact of imprecision in the expected loss models and economic scenario
assumptions; emerging risks related to changes in the environment impacting specific portfolio segments
and portfolio concentrations. We also evaluated and tested internal and external data used in the qualitative
adjustments by agreeing significant inputs and underlying data to internal and external sources.

We evaluated the overall ACL amount, including model estimates and adjustments, qualitative factors
adjustments, and whether the recorded ACL appropriately reflects expected credit losses on the loan and
lease portfolio and unfunded credit commitments. We reviewed historical loss statistics, peer-bank
information, subsequent events and transactions and considered whether they corroborate or contradict the
Company’s measurement of the ACL. We searched for and evaluated information that corroborates or
contradicts management’s forecasted assumptions and related probability weights as well as identification
and measurement of adjustments to model estimates and qualitative factors.

We have served as the Company’s auditor since 2003.

Minneapolis, Minnesota
February 20, 2024

67
Consolidated Financial Statements and Notes Table of Contents
Consolidated Financial Statements
Consolidated Balance Sheet 69
Consolidated Statement of Income 70
Consolidated Statement of Comprehensive Income 71
Consolidated Statement of Shareholders’ Equity 72
Consolidated Statement of Cash Flows 73
Notes to Consolidated Financial Statements
Note 1 — Significant Accounting Policies 74
Note 2 — Accounting Changes 80
Note 3 — Business Combinations 81
Note 4 — Restrictions on Cash and Due From Banks 84
Note 5 — Investment Securities 85
Note 6 — Loans and Allowance for Credit Losses 88
Note 7 — Leases 95
Note 8 — Accounting for Transfers and Servicing of Financial Assets and Variable Interest Entities 96
Note 9 — Premises and Equipment 98
Note 10 — Mortgage Servicing Rights 98
Note 11 — Intangible Assets 99
Note 12 — Deposits 100
Note 13 — Short-Term Borrowings 101
Note 14 — Long-Term Debt 101
Note 15 — Shareholders’ Equity 102
Note 16 — Earnings Per Share 107
Note 17 — Employee Benefits 107
Note 18 — Stock-Based Compensation 112
Note 19 — Income Taxes 114
Note 20 — Derivative Instruments 116
Note 21 — Netting Arrangements for Certain Financial Instruments and Securities Financing Activities 121
Note 22 — Fair Values of Assets and Liabilities 124
Note 23 — Guarantees and Contingent Liabilities 130
Note 24 — Business Segments 133
Note 25 — U.S. Bancorp (Parent Company) 136
Note 26 — Subsequent Events 137

68 U.S. Bancorp 2023 Annual Report

U.S. Bancorp
Consolidated Balance Sheet
At December 31 (Dollars in Millions) 2023 2022

Assets
Cash and due from banks $ 61,192 $ 53,542
Investment securities
Held-to-maturity (fair value $74,088 and $77,874, respectively) 84,045 88,740
Available-for-sale ($338 and $858 pledged as collateral, respectively)(a) 69,706 72,910
Loans held for sale (including $2,011 and $1,849 of mortgage loans carried at fair value, respectively) 2,201 2,200
Loans
Commercial 131,881 135,690
Commercial real estate 53,455 55,487
Residential mortgages 115,530 115,845
Credit card 28,560 26,295
Other retail 44,409 54,896
Total loans 373,835 388,213
Less allowance for loan losses (7,379) (6,936)
Net loans 366,456 381,277
Premises and equipment 3,623 3,858
Goodwill 12,489 12,373
Other intangible assets 6,084 7,155
Other assets (including $3,548 and $702 of trading securities at fair value pledged as collateral,
respectively)(a) 57,695 52,750
Total assets $ 663,491 $ 674,805

Liabilities and Shareholders’ Equity

Deposits
Noninterest-bearing $ 89,989 $ 137,743
Interest-bearing (including $2,818 of time deposits carried at fair value at December 31, 2023) 422,323 387,233
Total deposits 512,312 524,976
Short-term borrowings 15,279 31,216
Long-term debt 51,480 39,829
Other liabilities 28,649 27,552
Total liabilities 607,720 623,573
Shareholders’ equity
Preferred stock 6,808 6,808
Common stock, par value $0.01 a share — authorized: 4,000,000,000 shares; issued: 2023 and 2022—
2,125,725,742 shares 21 21
Capital surplus 8,673 8,712
Retained earnings 74,026 71,901
Less cost of common stock in treasury: 2023 — 567,732,687 shares; 2022 — 594,747,484 shares (24,126) (25,269)
Accumulated other comprehensive income (loss) (10,096) (11,407)
Total U.S. Bancorp shareholders’ equity 55,306 50,766
Noncontrolling interests 465 466
Total equity 55,771 51,232
Total liabilities and equity $ 663,491 $ 674,805
(a) Includes only collateral pledged by the Company where counterparties have the right to sell or pledge the collateral.
See Notes to Consolidated Financial Statements.

69
U.S. Bancorp
Consolidated Statement of Income
Year Ended December 31 (Dollars and Shares in Millions, Except Per Share Data) 2023 2022 2021

Interest Income
Loans $ 22,324 $ 13,603 $ 10,747
Loans held for sale 147 201 232
Investment securities 4,485 3,378 2,365
Other interest income 3,051 763 143
Total interest income 30,007 17,945 13,487
Interest Expense
Deposits 8,775 1,872 320
Short-term borrowings 1,971 565 70
Long-term debt 1,865 780 603
Total interest expense 12,611 3,217 993
Net interest income 17,396 14,728 12,494
Provision for credit losses 2,275 1,977 (1,173)
Net interest income after provision for credit losses 15,121 12,751 13,667
Noninterest Income
Card revenue 1,630 1,512 1,507
Corporate payment products revenue 759 698 575
Merchant processing services 1,659 1,579 1,449
Trust and investment management fees 2,459 2,209 1,832
Service charges 1,306 1,298 1,338
Commercial products revenue 1,372 1,105 1,102
Mortgage banking revenue 540 527 1,361
Investment products fees 279 235 239
Securities gains (losses), net (145) 20 103
Other 758 273 721
Total noninterest income 10,617 9,456 10,227
Noninterest Expense
Compensation and employee benefits 10,416 9,157 8,728
Net occupancy and equipment 1,266 1,096 1,048
Professional services 560 529 492
Marketing and business development 726 456 366
Technology and communications 2,049 1,726 1,728
Other intangibles 636 215 159
Merger and integration charges 1,009 329 —
Other 2,211 1,398 1,207
Total noninterest expense 18,873 14,906 13,728
Income before income taxes 6,865 7,301 10,166
Applicable income taxes 1,407 1,463 2,181
Net income 5,458 5,838 7,985
Net (income) loss attributable to noncontrolling interests (29) (13) (22)
Net income attributable to U.S. Bancorp $ 5,429 $ 5,825 $ 7,963
Net income applicable to U.S. Bancorp common shareholders $ 5,051 $ 5,501 $ 7,605
Earnings per common share $ 3.27 $ 3.69 $ 5.11
Diluted earnings per common share $ 3.27 $ 3.69 $ 5.10
Average common shares outstanding 1,543 1,489 1,489
Average diluted common shares outstanding 1,543 1,490 1,490

See Notes to Consolidated Financial Statements.

70 U.S. Bancorp 2023 Annual Report

U.S. Bancorp
Consolidated Statement of Comprehensive Income
Year Ended December 31 (Dollars in Millions) 2023 2022 2021
Net income $ 5,458 $ 5,838 $ 7,985
Other Comprehensive Income (Loss)
Changes in unrealized gains (losses) on investment securities available-for-sale 1,500 (13,656) (3,698)
Changes in unrealized gains (losses) on derivative hedges (252) (75) 125
Foreign currency translation 21 (10) 35
Changes in unrealized gains (losses) on retirement plans (262) 526 400
Reclassification to earnings of realized (gains) losses 748 544 104
Income taxes related to other comprehensive income (loss) (444) 3,207 769
Total other comprehensive income (loss) 1,311 (9,464) (2,265)
Comprehensive income (loss) 6,769 (3,626) 5,720
Comprehensive (income) loss attributable to noncontrolling interests (29) (13) (22)
Comprehensive income (loss) attributable to U.S. Bancorp $ 6,740 $ (3,639) $ 5,698
See Notes to Consolidated Financial Statements.

71
U.S. Bancorp
Consolidated Statement of Shareholders’ Equity
U.S. Bancorp Shareholders
Accumulated Total U.S.
Common Other Bancorp
(Dollars and Shares in Millions, Shares Preferred Common Capital Retained Treasury Comprehensive Shareholders’ Noncontrolling Total
Except Per Share Data) Outstanding Stock Stock Surplus Earnings Stock Income (Loss) Equity Interests Equity
Balance December 31, 2020 1,507 $ 5,983 $ 21 $ 8,511 $ 64,188 $ (25,930) $ 322 $ 53,095 $ 630 $ 53,725
Net income (loss) 7,963 7,963 22 7,985
Other comprehensive income (loss) (2,265) (2,265) (2,265)
Preferred stock dividends(a) (303) (303) (303)
Common stock dividends ($1.76
per share) (2,630) (2,630) (2,630)
Issuance of preferred stock 2,221 2,221 2,221
Call and redemption of preferred
stock (1,833) (17) (1,850) (1,850)
Issuance of common and treasury
stock 5 (169) 215 46 46
Purchase of treasury stock (28) (1,556) (1,556) (1,556)
Distributions to noncontrolling
interests — (20) (20)
Purchase of noncontrolling
interests — (167) (167)
Net other changes in noncontrolling
interests — 4 4
Stock option and restricted stock
grants 197 197 197
Balance December 31, 2021 1,484 $ 6,371 $ 21 $ 8,539 $ 69,201 $ (27,271) $ (1,943) $ 54,918 $ 469 $ 55,387
Net income (loss) 5,825 5,825 13 5,838
Other comprehensive income (loss) (9,464) (9,464) (9,464)
Preferred stock dividends(b) (296) (296) (296)
Common stock dividends ($1.88
per share) (2,829) (2,829) (2,829)
Issuance of preferred stock 437 437 437
Issuance of common and treasury
stock 48 (32) 2,071 2,039 2,039
Purchase of treasury stock (1) (69) (69) (69)
Distributions to noncontrolling
interests — (13) (13)
Net other changes in noncontrolling
interests — (3) (3)
Stock option and restricted stock
grants 205 205 205
Balance December 31, 2022 1,531 $ 6,808 $ 21 $ 8,712 $ 71,901 $ (25,269) $ (11,407) $ 50,766 $ 466 $ 51,232
Change in accounting principle(c) 46 46 46
Net income (loss) 5,429 5,429 29 5,458
Other comprehensive income (loss) 1,311 1,311 1,311
Preferred stock dividends(d) (350) (350) (350)
Common stock dividends ($1.93
per share) (3,000) (3,000) (3,000)
Issuance of common and treasury
stock 28 (264) 1,205 941 941
Purchase of treasury stock (1) (62) (62) (62)
Distributions to noncontrolling
interests — (29) (29)
Net other changes in noncontrolling
interests — (1) (1)
Stock option and restricted stock
grants 225 225 225
Balance December 31, 2023 1,558 $ 6,808 $ 21 $ 8,673 $ 74,026 $ (24,126) $ (10,096) $ 55,306 $ 465 $ 55,771
(a) Reflects dividends declared per share on the Company’s Series A, Series B, Series F, Series I, Series J, Series K, Series L, Series M, and Series N Non-Cumulative Perpetual
Preferred Stock of $3,548.61, $887.153, $1,625.00, $232.953, $1,325.00, $1,375.00, $937.50, $952.778, $202.986, respectively.
(b) Reflects dividends declared per share on the Company’s Series A, Series B, Series J, Series K, Series L, Series M, Series N, and Series O Non-Cumulative Perpetual Preferred
Stock of $3,965.458, $962.487, $1,325.00, $1,375.00, $937.50, $1,000.00, $925.00, and $1,050.00, respectively.
(c) Effective January 1, 2023, the Company adopted accounting guidance which removed the separate recognition and measurement of troubled debt restructurings. Upon adoption,
the Company reduced its allowance for credit losses and increased retained earnings net of deferred taxes through a cumulative-effect adjustment
(d) Reflects dividends declared per share on the Company’s Series A, Series B, Series J, Series K, Series L, Series M, Series N and Series O Non-Cumulative Perpetual Preferred
Stock of $6,439.904, $1,503.518, $1,325.00, $1,375.00, $937.50, $1,000.00, $925.00, and $1,125.00, respectively.
See Notes to Consolidated Financial Statements.

72 U.S. Bancorp 2023 Annual Report

U.S. Bancorp
Consolidated Statement of Cash Flows
Year Ended December 31 (Dollars in Millions) 2023 2022 2021

Operating Activities
Net income attributable to U.S. Bancorp $ 5,429 $ 5,825 $ 7,963
Adjustments to reconcile net income to net cash provided by operating activities
Provision for credit losses 2,275 1,977 (1,173)
Depreciation and amortization of premises and equipment 382 345 338
Amortization of intangibles 636 215 159
(Gain) loss on sale of loans held for sale 7 387 (1,135)
(Gain) loss on sale of securities and other assets 119 (188) (398)
Loans originated for sale, net of repayments (26,936) (33,127) (72,627)
Proceeds from sales of loans held for sale 26,686 38,895 74,315
Other, net (151) 6,790 2,428
Net cash provided by operating activities 8,447 21,119 9,870
Investing Activities
Proceeds from sales of available-for-sale investment securities 11,209 36,391 16,075
Proceeds from maturities of held-to-maturity investment securities 6,164 5,759 1,093
Proceeds from maturities of available-for-sale investment securities 6,314 14,927 41,199
Purchases of held-to-maturity investment securities (932) (7,091) (1,088)
Purchases of available-for-sale investment securities (8,342) (24,592) (99,045)
Net decrease (increase) in loans outstanding 3,829 (27,318) (17,459)
Proceeds from sales of loans 5,707 4,420 6,183
Purchases of loans (1,106) (2,113) (4,466)
Net (increase) decrease in securities purchased under agreements to resell (2,404) 252 18
Net cash (paid for) received from acquisitions (330) 12,257 (661)
Other, net (1,184) (5,392) 664
Net cash provided by (used in) investing activities 18,925 7,500 (57,487)
Financing Activities
Net (decrease) increase in deposits (12,291) (17,215) 26,313
Net (decrease) increase in short-term borrowings (16,508) 15,213 30
Proceeds from issuance of long-term debt 15,583 8,732 2,626
Principal payments or redemption of long-term debt (4,084) (6,926) (11,432)
Proceeds from issuance of preferred stock — 437 2,221
Proceeds from issuance of common stock 951 21 43
Repurchase of preferred stock — (1,100) (1,250)
Repurchase of common stock (62) (69) (1,555)
Cash dividends paid on preferred stock (341) (299) (308)
Cash dividends paid on common stock (2,970) (2,776) (2,579)
Purchase of noncontrolling interests — — (167)
Net cash (used in) provided by financing activities (19,722) (3,982) 13,942
Change in cash and due from banks 7,650 24,637 (33,675)
Cash and due from banks at beginning of period 53,542 28,905 62,580
Cash and due from banks at end of period $ 61,192 $ 53,542 $ 28,905

Supplemental Cash Flow Disclosures

Cash paid for income taxes $ 645 $ 767 $ 535
Cash paid for interest 12,282 2,717 1,061
Noncash transfer of available-for-sale investment securities to held-to-maturity — 40,695 41,823
Net noncash transfers to foreclosed property 26 23 14
Acquisitions
Assets (sold) acquired $ (83) $ 106,209 $ 749
Liabilities sold (assumed) 413 (95,753) (88)
Net $ 330 $ 10,456 $ 661
See Notes to Consolidated Financial Statements.

73
Notes to Consolidated Financial Statements
Expected credit losses, if any, are recorded through the
NOTE 1 Significant Accounting Policies establishment of an allowance for credit losses.

Securities Purchased Under Agreements to Resell and

U.S. Bancorp is a financial services holding company
Securities Sold Under Agreements to Repurchase
headquartered in Minneapolis, Minnesota, serving millions
Securities purchased under agreements to resell and
of local, national and global customers. U.S. Bancorp and its
securities sold under agreements to repurchase are
subsidiaries (the “Company”) provide a full range of financial
accounted for as collateralized financing transactions with a
services, including lending and depository services through
receivable or payable recorded at the amounts at which the
banking offices principally in the Midwest and West regions
securities were acquired or sold, plus accrued interest.
of the United States, through online services, over mobile
Collateral requirements are continually monitored and
devices and through other distribution channels. The
additional collateral is received or provided as required. The
Company also engages in credit card, merchant, and ATM
Company records a receivable or payable for cash collateral
processing, mortgage banking, cash management, capital
paid or received.
markets, insurance, trust and investment management,
brokerage, and leasing activities, principally in domestic
markets.
Equity Investments
Equity investments in entities where the Company has a
Basis of Presentation The consolidated financial
significant influence (generally between 20 percent and 50
statements include the accounts of the Company and its
percent ownership), but does not control the entity, are
subsidiaries and all VIEs for which the Company has both
accounted for using the equity method. Investments in
the power to direct the activities of the VIE that most
limited partnerships and similarly structured limited liability
significantly impact the VIE’s economic performance, and
companies where the Company’s ownership interest is
the obligation to absorb losses or right to receive benefits of
greater than 5 percent are accounted for using the equity
the VIE that could potentially be significant to the VIE.
method. Equity investments not using the equity method are
Consolidation eliminates intercompany accounts and
accounted for at fair value with changes in fair value and
transactions. Certain items in prior periods have been
realized gains or losses reported in noninterest income,
reclassified to conform to the current period presentation.
unless fair value is not readily determinable, in which case
Uses of Estimates The preparation of financial statements the investment is carried at cost subject to adjustments for
in conformity with accounting principles generally accepted any observable market transactions on the same or similar
in the United States requires management to make instruments of the investee. Most of the Company’s equity
estimates and assumptions that affect the amounts reported investments do not have readily determinable fair values. All
in the financial statements and accompanying notes. Actual equity investments are evaluated for impairment at least
experience could differ from those estimates and annually and more frequently if certain criteria are met.
assumptions.
Loans
Securities The Company offers a broad array of lending products and
Realized gains or losses on securities are determined on a categorizes its loan portfolio into two segments, which is the
trade date basis based on the specific amortized cost of the level at which it develops and documents a systematic
investments sold. methodology to determine the allowance for credit losses.
The Company’s two loan portfolio segments are commercial
Trading Securities Securities held for resale are classified
lending and consumer lending. The Company further
as trading securities and are included in other assets and
disaggregates its loan portfolio segments into various
reported at fair value. Changes in fair value and realized
classes based on their underlying risk characteristics. The
gains or losses are reported in noninterest income.
two classes within the commercial lending segment are
Available-for-sale Securities Debt securities that are not commercial loans and commercial real estate loans. The
trading securities but may be sold before maturity in three classes within the consumer lending segment are
response to changes in the Company’s interest rate risk residential mortgages, credit card loans and other retail
profile, funding needs, demand for collateralized deposits by loans.
public entities or other reasons, are carried at fair value with
Originated Loans Held for Investment Loans the
unrealized net gains or losses reported within other
Company originates as held for investment are reported at
comprehensive income (loss). Declines in fair value related
the principal amount outstanding, net of unearned interest
to credit, if any, are recorded through the establishment of
income and deferred fees and costs, and any direct principal
an allowance for credit losses.
charge-offs. Interest income is accrued on the unpaid
Held-to-maturity Securities Debt securities for which the principal balances as earned. Loan and commitment fees
Company has the positive intent and ability to hold to and certain direct loan origination costs are deferred and
maturity are reported at historical cost adjusted for recognized over the life of the loan and/or commitment
amortization of premiums and accretion of discounts. period as yield adjustments.

74 U.S. Bancorp 2023 Annual Report

Purchased Loans All purchased loans are recorded at fair The allowance recorded for credit losses utilizes forward-
value at the date of purchase and those acquired on or after looking expected loss models to consider a variety of factors
January 1, 2020 are divided into those considered PCD and affecting lifetime credit losses. These factors include, but
those not considered PCD. An allowance for credit losses is are not limited to, macroeconomic variables such as
established for each population and considers product mix, unemployment rates, real estate prices, gross domestic
risk characteristics of the portfolio, delinquency status and product levels, inflation, interest rates and corporate bonds
refreshed loan-to-value ratios when possible. The allowance spreads, as well as loan and borrower characteristics, such
established for purchased loans not considered PCD is as internal risk ratings on commercial loans and consumer
recognized through provision expense upon acquisition, credit scores, delinquency status, collateral type and
whereas the allowance established for loans considered available valuation information, consideration of end-of-term
PCD at acquisition is offset by an increase in the basis of losses on lease residuals, and the remaining term of the
the acquired loans. Any subsequent increases and loan, adjusted for expected prepayments. For each loan
decreases in the allowance related to purchased loans, portfolio, including those loans modified under various loan
regardless of PCD status, are recognized through provision modification programs, model estimates are adjusted as
expense, with charge-offs charged to the allowance. necessary to consider any relevant changes in portfolio
composition, lending policies, underwriting standards, risk
Commitments to Extend Credit Unfunded commitments
management practices, economic conditions or other factors
for residential mortgage loans intended to be held for sale
that would affect the accuracy of the model. Expected credit
are considered derivatives and recorded in other assets and
loss estimates also include consideration of expected cash
other liabilities on the Consolidated Balance Sheet at fair
recoveries on loans previously charged-off or expected
value with changes in fair value recorded in noninterest
recoveries on collateral dependent loans where recovery is
income. All other unfunded loan commitments are not
expected through sale of the collateral at fair value less
considered derivatives and are not reported on the
selling costs. Where loans do not exhibit similar risk
Consolidated Balance Sheet. Reserves for credit exposure
characteristics, an individual analysis is performed to
on all other unfunded credit commitments are recorded in
consider expected credit losses. The allowance recorded for
other liabilities.
individually evaluated loans greater than $5 million in the
Allowance for Credit Losses The allowance for credit commercial lending segment is based on an analysis
losses is established for current expected credit losses on utilizing expected cash flows discounted using the original
the Company’s loan and lease portfolio, including unfunded effective interest rate, the observable market price of the
credit commitments. The allowance considers expected loan, or the fair value of the collateral, less selling costs, for
losses for the remaining lives of the applicable assets, collateral-dependent loans as appropriate. For smaller
inclusive of expected recoveries. The allowance for credit commercial loans collectively evaluated for impairment,
losses is increased through provisions charged to earnings historical loss experience is also incorporated into the
and reduced by net charge-offs. Management evaluates the allowance methodology applied to this category of loans.
appropriateness of the allowance for credit losses on a The Company’s methodology for determining the
quarterly basis. appropriate allowance for credit losses also considers the
Multiple economic scenarios are considered over a imprecision inherent in the methodologies used and
three-year reasonable and supportable forecast period, allocated to the various loan portfolios. As a result, amounts
which includes increasing consideration of historical loss determined under the methodologies described above are
experience over years two and three. These economic adjusted by management to consider the potential impact of
scenarios are constructed with interrelated projections of other qualitative factors not captured in the quantitative
multiple economic variables, and loss estimates are model adjustments which include, but are not limited to, the
produced that consider the historical correlation of those following: model imprecision, imprecision in economic
economic variables with credit losses. After the forecast scenario assumptions, and emerging risks related to either
period, the Company fully reverts to long-term historical loss changes in the environment that are affecting specific
experience, adjusted for prepayments and characteristics of portfolios, or changes in portfolio concentrations over time
the current loan and lease portfolio, to estimate losses over that may affect model performance. The consideration of
the remaining life of the portfolio. The economic scenarios these items results in adjustments to allowance amounts
are updated at least quarterly and are designed to provide a included in the Company’s allowance for credit losses for
range of reasonable estimates, from better to worse than each loan portfolio.
current expectations. Scenarios are weighted based on the The Company also assesses the credit risk associated
Company’s expectation of economic conditions for the with off-balance sheet loan commitments, letters of credit,
foreseeable future and reflect significant judgment and investment securities and derivatives. Credit risk associated
consideration of economic forecast uncertainty. Final loss with derivatives is reflected in the fair values recorded for
estimates also consider factors affecting credit losses not those positions. The liability for off-balance sheet credit
reflected in the scenarios, due to the unique aspects of exposure related to loan commitments and other credit
current conditions and expectations. These factors may guarantees is included in other liabilities. Because business
include, but are not limited to, loan servicing practices, processes and credit risks associated with unfunded credit
regulatory guidance, and/or fiscal and monetary policy commitments are essentially the same as for loans, the
actions. Company utilizes similar processes to estimate its liability
for unfunded credit commitments.

75
 The results of the analysis are evaluated quarterly to believed to be collectible. In certain circumstances, loans in
confirm the estimates are appropriate for each specific loan any class may be restored to accrual status, such as when a
portfolio, as well as the entire loan portfolio, as the entire loan has demonstrated sustained repayment performance
allowance for credit losses is available for the entire loan or no amounts are past due and prospects for future
portfolio. payment are no longer in doubt; or when the loan becomes
well secured and is in the process of collection. Loans
Credit Quality The credit quality of the Company’s loan
where there has been a partial charge-off may be returned
portfolios is assessed as a function of net credit losses,
to accrual status if all principal and interest (including
levels of nonperforming assets and delinquencies, and
amounts previously charged-off) is expected to be collected
credit quality ratings as defined by the Company.
and the loan is current.
For all loan portfolio classes, loans are considered
The Company classifies its loan portfolio classes using
past due based on the number of days delinquent except for
internal credit quality ratings on a quarterly basis. These
monthly amortizing loans which are classified delinquent
ratings include pass, special mention and classified, and are
based upon the number of contractually required payments
an important part of the Company’s overall credit risk
not made (for example, two missed payments is considered
management process and evaluation of the allowance for
30 days delinquent). When a loan is placed on nonaccrual
credit losses. Loans with a pass rating represent those
status, unpaid accrued interest is reversed, reducing interest
loans not classified on the Company’s rating scale for
income in the current period.
problem credits, as minimal credit risk has been identified.
Commercial lending segment loans are generally placed
Special mention loans are those loans that have a potential
on nonaccrual status when the collection of principal and
weakness deserving management’s close attention.
interest has become 90 days past due or is otherwise
Classified loans are those loans where a well-defined
considered doubtful. Commercial lending segment loans are
weakness has been identified that may put full collection of
generally fully charged down if unsecured by collateral or
contractual cash flows at risk. It is possible that others,
partially charged down to the fair value of the collateral
given the same information, may reach different reasonable
securing the loan, less costs to sell, when the loan is placed
conclusions regarding the credit quality rating classification
on nonaccrual.
of specific loans.
Consumer lending segment loans are generally charged-
off at a specific number of days or payments past due. Loan Modifications In certain circumstances, the Company
Residential mortgages and other retail loans secured by 1-4 may modify the terms of a loan to maximize the collection of
family properties are generally charged down to the fair amounts due when a borrower is experiencing financial
value of the collateral securing the loan, less costs to sell, at difficulties or is expected to experience difficulties in the
180 days past due. Residential mortgage loans and lines in near-term. The Company recognizes interest on modified
a first lien position are placed on nonaccrual status in loans if full collection of contractual principal and interest is
instances where a partial charge-off occurs unless the loan expected. The effects of modifications on credit loss
is well secured and in the process of collection. Residential expectations, such as improved payment capacity, longer
mortgage loans and lines in a junior lien position secured by expected lives and other factors, are considered when
1-4 family properties are placed on nonaccrual status at 120 measuring the allowance for credit losses. Modification
days past due or when they are behind a first lien that has performance, including redefault rates and how these
become 180 days or greater past due or placed on compare to historical losses, are also considered.
nonaccrual status. Any secured consumer lending segment Modifications generally do not result in significant changes
loan whose borrower has had debt discharged through to the Company’s allowance for credit losses.
bankruptcy, for which the loan amount exceeds the fair For the commercial lending segment, modifications
value of the collateral, is charged down to the fair value of generally result in the Company working with borrowers on
the related collateral and the remaining balance is placed on a case-by-case basis. Commercial and commercial real
nonaccrual status. Credit card loans continue to accrue estate modifications generally include extensions of the
interest until the account is charged-off. Credit cards are maturity date and may be accompanied by an increase or
charged-off at 180 days past due. Other retail loans not decrease to the interest rate. In addition, the Company may
secured by 1-4 family properties are charged-off at 120 days work with the borrower in identifying other changes that
past due; and revolving consumer lines are charged-off at mitigate loss to the Company, which may include additional
180 days past due. Similar to credit cards, other retail loans collateral or guarantees to support the loan. To a lesser
are generally not placed on nonaccrual status because of extent, the Company may provide an interest rate reduction.
the relative short period of time to charge-off. Certain retail Modifications for the consumer lending segment are
customers having financial difficulties may have the terms of generally part of programs the Company has initiated. The
their credit card and other loan agreements modified to Company modifies residential mortgage loans under
require only principal payments and, as such, are reported Federal Housing Administration, United States Department
as nonaccrual. of Veterans Affairs, or its own internal programs. Under
For all loan classes, interest payments received on these programs, the Company offers qualifying homeowners
nonaccrual loans are generally recorded as a reduction to a the opportunity to permanently modify their loan and
loan’s carrying amount while a loan is on nonaccrual and achieve more affordable monthly payments. These
are recognized as interest income upon payoff of the loan. modifications may include adjustments to interest rates,
However, interest income may be recognized for interest conversion of adjustable rates to fixed rates, extension of
payments if the remaining carrying amount of the loan is maturity dates or deferrals of payments, capitalization of

76 U.S. Bancorp 2023 Annual Report

accrued interest and/or outstanding advances, or in limited Company’s leases do not include significant variable lease
situations, partial forgiveness of loan principal. In most payments.
instances, participation in residential mortgage loan Certain of the Company’s real estate leases include
restructuring programs requires the customer to complete a options to extend. Lease extension options are generally
short-term trial period. A permanent loan modification is exercisable at market rates. Such option periods do not
contingent on the customer successfully completing the trial provide a significant incentive, and their exercise is not
period arrangement, and the loan documents are not reasonably certain. Accordingly, the Company does not
modified until that time. generally recognize payments occurring during option
Credit card and other retail loan modifications are periods in the calculation of its ROU assets and lease
generally part of distinct modification programs providing liabilities.
customers experiencing financial difficulty with modifications
Other Real Estate OREO is included in other assets, and is
whereby balances may be amortized up to 60 months, and
property acquired through foreclosure or other proceedings
generally include waiver of fees and reduced interest rates.
on defaulted loans. OREO is initially recorded at fair value,
Leases The Company, as a lessor, originates retail and less estimated selling costs. The fair value of OREO is
commercial leases either directly to the consumer or evaluated regularly and any decreases in value along with
indirectly through dealer networks. Retail leases, primarily holding costs, such as taxes and insurance, are reported in
automobiles, have terms up to 5 years. Commercial leases noninterest expense.
may include high dollar assets such as aircraft or lower cost
items such as office equipment. At lease inception, retail Loans Held For Sale
lease customers may be provided with an end-of-term
Loans held for sale (“LHFS”) represent mortgage loans
purchase option, which is based on the contractual residual
intended to be sold in the secondary market and other loans
value of the automobile at the expiration of the lease.
that management has an active plan to sell. LHFS are
Automobile leases do not typically contain options to extend
carried at the lower-of-cost-or-fair value as determined on
or terminate the lease. Equipment leases may contain
an aggregate basis by type of loan with the exception of
various types of purchase options. Some option amounts
loans for which the Company has elected fair value
are a stated value, while others are determined using the
accounting, which are carried at fair value. Any writedowns
fair market value at the time of option exercise.
to fair value upon the transfer of loans to LHFS are reflected
Residual values on leased assets are reviewed regularly
in loan charge-offs.
for impairment. Residual valuations for retail leases are
Where an election is made to carry the LHFS at fair
based on independent assessments of expected used
value, any change in fair value is recognized in noninterest
automobile sale prices at the end of the lease term.
income. Where an election is made to carry LHFS at lower-
Impairment tests are conducted based on these valuations
of-cost-or-fair value, any further decreases are recognized
considering the probability of the lessee returning the asset
in noninterest income and increases in fair value above the
to the Company, re-marketing efforts, insurance coverage
loan cost basis are not recognized until the loans are sold.
and ancillary fees and costs. Valuations for commercial
Fair value elections are made at the time of origination or
leases are based upon external or internal management
purchase based on the Company’s fair value election policy.
appraisals. The Company manages its risk to changes in
The Company has elected fair value accounting for
the residual value of leased vehicles, office and business
substantially all its MLHFS.
equipment, and other assets through disciplined residual
valuation setting at the inception of a lease, diversification of
its leased assets, regular residual asset valuation reviews
Derivative Financial Instruments
and monitoring of residual value gains or losses upon the In the ordinary course of business, the Company enters into
disposition of assets. Retail lease residual value risk is derivative transactions to manage various risks and to
mitigated further by the purchase of residual value accommodate the business requirements of its customers.
insurance coverage and effective end-of-term marketing of Derivative instruments are reported in other assets or other
off-lease vehicles. liabilities at fair value. Changes in a derivative’s fair value
The Company, as lessee, leases certain assets for use in are recognized currently in earnings unless specific hedge
its operations. Leased assets primarily include retail accounting criteria are met.
branches, operations centers and other corporate locations, All derivative instruments that qualify and are designated
and, to a lesser extent, office and computer equipment. For for hedge accounting are recorded at fair value and
each lease with an original term greater than 12 months, the classified as either a hedge of the fair value of a recognized
Company records a lease liability and a corresponding right asset or liability (“fair value hedge”); a hedge of a forecasted
of use (“ROU”) asset. The Company accounts for the lease transaction or the variability of cash flows to be received or
and non-lease components in the majority of its lease paid related to a recognized asset or liability (“cash flow
contracts as a single lease component, with the hedge”); or a hedge of the volatility of a net investment in
determination of the lease liability at lease inception based foreign operations driven by changes in foreign currency
on the present value of the consideration to be paid under exchange rates (“net investment hedge”). Changes in the
the contract. The discount rate used by the Company is fair value of a derivative that is highly effective and
determined at commencement of the lease using a secured designated as a fair value hedge, and the offsetting changes
rate for a similar term as the period of the lease. The in the fair value of the hedged item, are recorded in
earnings. Changes in the fair value of a derivative that is

77
highly effective and designated as a cash flow hedge are and other transaction and account management fees
recorded in other comprehensive income (loss) until cash charged to merchants for the electronic processing of card
flows of the hedged item are realized. Changes in the fair association network transactions, less interchange paid to
value of net investment hedges that are highly effective are the card-issuing bank, card association assessments, and
recorded in other comprehensive income (loss). The revenue sharing amounts. All of these are recognized at the
Company performs an assessment, at inception and, at a time the merchant’s services are performed. The Company
minimum, quarterly thereafter, to determine the may enter into revenue sharing agreements with referral
effectiveness of the derivative in offsetting changes in the partners or in connection with purchases of merchant
value or cash flows of the hedged item(s). contracts from sellers. The revenue sharing amounts are
If a derivative designated as a cash flow hedge is determined primarily on sales volume processed or revenue
terminated or ceases to be highly effective, the gain or loss generated for a particular group of merchants. Merchant
in other comprehensive income (loss) is amortized to processing revenue also includes revenues related to point-
earnings over the period the forecasted hedged transactions of-sale equipment recorded as sales when the equipment is
impact earnings. If a hedged forecasted transaction is no shipped or as earned for equipment rentals. The Company
longer probable, hedge accounting is ceased and any gain records merchant processing services revenue within the
or loss included in other comprehensive income (loss) is Payment Services line of business.
reported in earnings immediately, unless the forecasted
Trust and Investment Management Fees Trust and
transaction is at least reasonably possible of occurring,
investment management fees are recognized over the
whereby the amounts remain within other comprehensive
period in which services are performed and are based on a
income (loss).
percentage of the fair value of the assets under
management or administration, fixed based on account
Revenue Recognition
type, or transaction-based fees. Services provided to clients
In the ordinary course of business, the Company recognizes include trustee, transfer agent, custodian, fiscal agent,
income derived from various revenue generating activities. escrow, fund accounting and administration services.
Certain revenues are generated from contracts where they Services provided to mutual funds may include selling,
are recognized when, or as services or products are distribution and marketing services. Trust and investment
transferred to customers for amounts the Company expects management fees are predominately recorded within the
to be entitled. Revenue generating activities related to Wealth, Corporate, Commercial and Institutional Banking
financial assets and liabilities are also recognized, including line of business.
mortgage servicing fees, loan commitment fees, foreign
currency remeasurements, and gains and losses on Service Charges Service charges include fees received on
securities, equity investments and unconsolidated deposit accounts under depository agreements with
subsidiaries. Certain specific policies include the following: customers to provide access to deposited funds, serve as a
custodian of funds, and when applicable, pay interest on
Card Revenue Card revenue includes interchange from deposits. Checking or savings accounts may contain fees
credit, debit and stored-value cards processed through card for various services used on a day-to-day basis by a
association networks, annual fees, and other transaction customer. Fees are recognized as services are delivered to
and account management fees. Interchange rates are and consumed by the customer, or as fees are charged.
generally set by the card associations and based on Service charges also include revenue generated from ATM
purchase volumes and other factors. The Company records transaction processing and settlement services which is
interchange as services are provided. Transaction and recognized at the time the services are performed. Certain
account management fees are recognized as services are payments to partners and card associations related to ATM
provided, except for annual fees which are recognized over processing services are also recorded within service
the applicable period. Costs for rewards programs and charges as services are provided. Further, revenue
certain payments to partners and card associations are also generated from treasury management services are included
recorded within card revenue when services are provided. in service charges and include fees for a broad range of
The Company predominately records card revenue within products and services that enable customers to manage
the Payment Services line of business. their cash more efficiently. These products and services
include cash and investment management, receivables
Corporate Payment Products Revenue Corporate
management, disbursement services, funds transfer
payment products revenue primarily includes interchange
services, and information reporting. Treasury management
from commercial card products processed through card
revenue is recognized as products and services are
association networks and revenue from proprietary network
provided to customers. The Company reflects a discount
transactions. The Company records corporate payment
calculated on monthly average collected customer balances.
products revenue as services are provided. Certain
Service charges are reported primarily within the Wealth,
payments to card associations and customers are also
Corporate, Commercial and Institutional Banking, and
recorded within corporate payment products revenue as
Consumer and Business Banking lines of business.
services are provided. Corporate payment products revenue
is recorded within the Payment Services line of business. Commercial Products Revenue Commercial products
revenue primarily includes revenue related to ancillary
Merchant Processing Services Merchant processing
services provided to Wealth, Corporate, Commercial and
services revenue consists principally of merchant discount

78 U.S. Bancorp 2023 Annual Report

Institutional Banking, and Consumer and Business Banking impairment, if any, includes assessing whether the carrying
customers, including standby letter of credit fees, non-yield value of a reporting unit exceeds its fair value. Other
related loan fees, capital markets related revenue, sales of intangible assets are recorded at their fair value upon
direct financing leases, and loan and syndication fees. Sales completion of a business acquisition or certain other
of direct financing leases are recognized at the point of sale. transactions, and generally represent the value of customer
In addition, the Company may lead or participate with a contracts or relationships. Other intangible assets are
group of underwriters in raising investment capital on behalf amortized over their estimated useful lives, using straight-
of securities issuers and charge underwriting fees. These line and accelerated methods and are reviewed for
fees are recognized at securities issuance. The Company, impairment when indicators of impairment are present.
in its role as lead underwriter, arranges deal structuring and Determining the amount of other intangible asset
use of outside vendors for the underwriting group. The impairment, if any, includes assessing the present value of
Company recognizes only those fees and expenses related the estimated future cash flows associated with the
to its underwriting commitment. intangible asset and comparing it to the carrying amount of
the asset.
Mortgage Banking Revenue Mortgage banking revenue
includes revenue derived from mortgages originated and Income Taxes Deferred taxes are recorded to reflect the
subsequently sold, generally with servicing retained. The tax consequences on future years of differences between
primary components include: gains and losses on mortgage the tax basis of assets and liabilities and their financial
sales; servicing revenue; changes in fair value for mortgage reporting carrying amounts. The Company uses the deferral
loans originated with the intent to sell and measured at fair method of accounting on investments that generate
value under the fair value option; changes in fair value for investment tax credits. Under this method, the investment
derivative commitments to purchase and originate mortgage tax credits are recognized as a reduction to the related
loans; changes in the fair value of MSRs; and the impact of asset. For investments in qualified affordable housing
risk management activities associated with the mortgage projects and certain other tax-advantaged investments, the
origination pipeline, funded loans and MSRs. Net interest Company presents the expense in tax expense rather than
income from mortgage loans is recorded in interest income. noninterest expense.
Refer to Other Significant Policies in Note 1, as well as Note
Mortgage Servicing Rights MSRs are capitalized as
10 and Note 22 for a further discussion of MSRs. Mortgage
separate assets when loans are sold and servicing is
banking revenue is reported within the Consumer and
retained or if they are purchased from others. MSRs are
Business Banking line of business.
recorded at fair value. The Company determines the fair
Investment Products Fees Investment products fees value by estimating the present value of the asset’s future
include commissions related to the execution of requested cash flows utilizing market-based prepayment rates, option
security trades, distribution fees from sale of mutual funds, adjusted spread, and other assumptions validated through
and investment advisory fees. Commissions and investment comparison to trade information, industry surveys and
advisory fees are recognized as services are delivered to independent third-party valuations. Changes in the fair value
and utilized by the customer. Distribution fees are received of MSRs are recorded in earnings as mortgage banking
over time, are dependent on the consumer maintaining their revenue during the period in which they occur.
mutual fund asset position and the value of such position.
Pensions For purposes of its pension plans, the Company
These revenues are estimated and recognized at the point a
utilizes its fiscal year-end as the measurement date. At the
significant reversal of revenue becomes remote. Investment
measurement date, plan assets are determined based on
products fees are predominately reported within the Wealth,
fair value, generally representing observable market prices
Corporate, Commercial and Institutional Banking line of
or the net asset value provided by the funds’ trustee or
business.
administrator. The actuarial cost method used to compute
Other Noninterest Income Other noninterest income is the pension liabilities and related expense is the projected
primarily related to financial assets including income on unit credit method. The projected benefit obligation is
unconsolidated subsidiaries and equity method investments, principally determined based on the present value of
gains on sale of other investments and corporate owned life projected benefit distributions at an assumed discount rate.
insurance proceeds. The Company reports other noninterest The discount rate utilized is based on the investment yield of
income across all lines of business. high quality corporate bonds available in the marketplace
with maturities equal to projected cash flows of future
Other Significant Policies benefit payments as of the measurement date. Periodic
pension expense (or income) includes service costs, interest
Goodwill and Other Intangible Assets Goodwill is
costs based on the assumed discount rate, the expected
recorded on acquired businesses if the purchase price
return on plan assets based on an actuarially derived
exceeds the fair value of the net assets acquired. Goodwill
market-related value and amortization of actuarial gains and
is not amortized but is subject, at a minimum, to annual
losses. Service cost is included in compensation and
tests for impairment at a reporting unit level. In certain
employee benefits expense on the Consolidated Statement
situations, an interim impairment test may be required if
of Income, with all other components of periodic pension
events occur or circumstances change that would more
expense included in other noninterest expense on the
likely than not reduce the fair value of a reporting unit below
Consolidated Statement of Income. Pension accounting
its carrying amount. Determining the amount of goodwill

79
reflects the long-term nature of benefit obligations and the adjustment to tax expense, depending on the market price
investment horizon of plan assets, and can have the effect of the Company’s common stock at that time.
of reducing earnings volatility related to short-term changes
Per Share Calculations Earnings per common share is
in interest rates and market valuations. Actuarial gains and
calculated using the two-class method under which earnings
losses include the impact of plan amendments and various
are allocated to common shareholders and holders of
unrecognized gains and losses which are deferred, and to
participating securities. Unvested stock-based
the extent exceed 10 percent of the greater of the projected
compensation awards that contain nonforfeitable rights to
benefit obligation or the market-related value of plan assets,
dividends or dividend equivalents are considered
are amortized over the future service periods of active
participating securities under the two-class method. Net
employees or the remaining life expectancies of inactive
income applicable to U.S. Bancorp common shareholders is
participants. The market-related value utilized to determine
then divided by the weighted-average number of common
the expected return on plan assets is based on fair value
shares outstanding to determine earnings per common
adjusted for the difference between expected returns and
share. Diluted earnings per common share is calculated by
actual performance of plan assets. The unrealized
adjusting income and outstanding shares, assuming
difference between actual experience and expected returns
conversion of all potentially dilutive securities.
is included in expense over a period of approximately 15
years for active employees and approximately 30 years for
inactive participants. The overfunded or underfunded status
NOTE 2 Accounting Changes
of each plan is recorded as an asset or liability on the
Consolidated Balance Sheet, with changes in that status Reference Interest Rate Transition In March 2020, the
recognized through other comprehensive income (loss). Financial Accounting Standards Board (“FASB”) issued
accounting guidance, providing temporary optional
Premises and Equipment Premises and equipment are expedients and exceptions to the guidance in United States
stated at cost less accumulated depreciation and generally accepted accounting principles on contract
depreciated primarily on a straight-line basis over the modifications and hedge accounting, to ease the financial
estimated life of the assets. Estimated useful lives range up reporting burdens related to the expected market transition
to 40 years for newly constructed buildings and from 3 to 25 from the London Interbank Offered Rate (“LIBOR”) and
years for furniture and equipment. other interbank offered rates to alternative reference rates.
The Company, as lessee, records an ROU asset for Under the guidance, a company can elect not to apply
each lease with an original term greater than 12 months. certain modification accounting requirements to contracts
ROU assets are included in premises and equipment, with affected by reference rate transition, if certain criteria are
the corresponding lease liabilities included in long-term debt met. A company that makes this election would not be
and other liabilities. required to remeasure the contracts at the modification date
or reassess a previous accounting determination. This
Capitalized Software The Company capitalizes certain
guidance also permits a company to elect various optional
costs associated with the acquisition or development of
expedients that would allow it to continue applying hedge
internal-use software. Once the software is ready for its
accounting for hedging relationships affected by reference
intended use, these costs are amortized on a straight-line
rate transition, if certain criteria are met. The guidance is
basis over the software’s expected useful life and reviewed
effective upon issuance and generally can be applied
for impairment on an ongoing basis. Estimated useful lives
through December 31, 2024. The Company is applying
are generally 3 to 5 years, but may range up to 7 years.
certain optional expedients and exceptions for cash flow
Stock-Based Compensation The Company grants stock- hedges and will continue to evaluate these for eligible
based awards, which may include restricted stock, restricted contract modifications and hedging relationships.
stock units and options to purchase common stock of the
Fair Value Hedging – Portfolio Layer Method Effective
Company. Stock option grants are for a fixed number of
January 1, 2023, the Company adopted accounting
shares to employees and directors with an exercise price
guidance, issued by the FASB in March 2022, related to fair
equal to the fair value of the shares at the date of grant.
value hedge accounting of portfolios of financial assets. This
Restricted stock and restricted stock unit grants are
guidance permits a company to designate multiple hedging
awarded at no cost to the recipient. Stock-based
relationships on a single closed portfolio, resulting in a
compensation for awards is recognized in the Company’s
larger portion of the interest rate risk associated with such a
results of operations over the vesting period. The Company
portfolio being eligible to be hedged. The guidance also
immediately recognizes compensation cost of awards to
expands the scope of the method to include non-prepayable
employees that meet retirement status, despite their
financial assets and clarifies other technical questions from
continued active employment. The amortization of stock-
the original accounting guidance. The adoption of this
based compensation reflects estimated forfeitures adjusted
guidance is not material to the Company’s financial
for actual forfeiture experience. As compensation expense
statements.
is recognized, a deferred tax asset is recorded that
represents an estimate of the future tax deduction from Financial Instruments – Troubled Debt Restructurings
exercise or release of restrictions. At the time stock-based and Vintage Disclosures Effective January 1, 2023, the
awards are exercised, cancelled, expire, or restrictions are Company adopted accounting guidance on a modified
released, the Company may be required to recognize an retrospective basis, issued by the FASB in March 2022,

80 U.S. Bancorp 2023 Annual Report

related to the recognition and measurement of TDRs by Income Taxes – Improvements to Income Tax
creditors. This guidance removes the separate recognition Disclosures In December 2023, the FASB issued
and measurement requirements for TDRs by replacing them guidance, effective for the Company for annual reporting
with a requirement for a company to apply existing periods beginning after December 15, 2024, related to
accounting guidance to determine whether a modification income tax disclosures. This guidance requires additional
results in a new loan or a continuation of an existing loan. information in income tax rate reconciliation disclosures and
This guidance also replaces existing TDR disclosures with additional disclosures about income taxes paid. The
similar but more expansive disclosures for certain guidance is required, at a minimum, to be adopted on a
modifications of receivables made to borrowers prospective basis, with an option to apply it retrospectively.
experiencing financial difficulty. Further, this guidance also The Company expects the adoption of this guidance will not
requires companies to disclose current-period gross write- be material to its financial statements.
offs by year of origination for financing receivables. The
Segment Reporting – Improvements to Reportable
adoption of this guidance is not material to the Company’s
Segment Disclosures In November 2023, the FASB issued
financial statements.
guidance, effective for the Company for annual reporting
Accounting for Tax Credit Investments Using the periods beginning after December 15, 2023, related to
Proportional Amortization Method Effective January 1, segment disclosures. This guidance requires disclosures of
2023, the Company adopted accounting guidance on a significant segment expenses and other segment items and
modified retrospective basis, issued by the FASB in March expands interim period disclosure requirements to include
2023, related to the accounting for tax credit investments. segment profit or loss and assets, which are currently only
This guidance allows the Company to elect to account for required to be disclosed annually. The guidance is required
tax credit investments using the proportional amortization to be adopted retrospectively to all periods presented in the
method on a program-by-program basis if certain conditions financial statements. The Company expects the adoption of
are met, regardless of the program from which the income this guidance will not be material to its financial statements.
tax credits are received. The adoption of this guidance was
not material to the Company’s financial statements.

NOTE 3 Business Combinations

MUFG Union Bank Acquisition On December 1, 2022, the Company to an affiliate of MUFG. The acquisition has been
Company acquired MUB’s core regional banking franchise accounted for as a business combination. Accordingly, the
from MUFG. Pursuant to the terms of the Share Purchase assets acquired and liabilities assumed from MUB were
Agreement, the Company acquired all of the issued and recorded at fair value as of the acquisition date. The
outstanding shares of common stock of MUB for a purchase determination of fair value requires management to make
price consisting of $5.5 billion in cash and approximately 44 estimates about discount rates, future expected cash flows,
million shares of common stock of the Company. Under the market conditions and other future events that are highly
terms of the Share Purchase Agreement, the purchase price subjective in nature and subject to change. Fair value
was based on MUB having a tangible book value of $6.25 estimates related to the assets and liabilities from MUB
billion at the closing of the acquisition. At the closing of the were subject to adjustment for up to one year after the
acquisition, MUB had $3.5 billion of tangible book value over closing date of the acquisition as additional information
the $6.25 billion target, consisting of additional cash. The became available. The Company merged MUB into USBNA
additional cash received is required to be repaid to MUFG during 2023.
on or prior to the fifth anniversary date of the completion of In connection with the transaction, the Company
the purchase, in accordance with the terms of the Share recorded within noninterest expense nonrecurring merger
Purchase Agreement. As such, it is recognized as debt at and integration charges of $1.0 billion and $329 million
the parent company. During 2023, the Company repaid during 2023 and 2022, respectively. These expenses were
$936 million of its debt obligation from the proceeds of the primarily comprised of personnel, legal, advisory and
issuance of 24 million shares of common stock of the technology related costs.

81
The following table includes the fair value of consideration transferred and the fair value of the identifiable tangible and intangible
assets and liabilities from MUB:

December 1, 2022 (Dollars in Millions)

Acquisition consideration
Cash $ 5,500
Market value of shares of common stock 2,014
Total consideration transferred at acquisition close date 7,514
Discounted liability to MUFG(a) 2,944
Total $ 10,458
Fair Value of MUB assets and liabilities
Assets
Cash and due from banks $ 17,754
Investment securities 22,725
Loans held for sale 2,220
Loans 53,395
Less allowance for loan losses (463)
Net loans 52,932
Premises and equipment 646
Other intangible assets (excluding goodwill) 2,808
Other assets 4,764
Total assets $ 103,849
Liabilities
Deposits $ 86,110
Short-term borrowings 4,777
Long-term debt 2,584
Other liabilities 2,243
Total liabilities 95,714
Less: Net assets $ 8,135
Goodwill $ 2,323
(a) Represents $3.5 billion of noninterest-bearing additional cash held by MUB upon close of the acquisition to be delivered to MUFG on or prior to December 1, 2027, discounted at
the Company’s 5-year unsecured borrowing rate as of the acquisition date, per authoritative accounting guidance.

Goodwill of $2.3 billion recorded in connection with the amount of goodwill allocated to each business segment in
transaction resulted from the reputation, operating model connection with the transaction.
and expertise of MUB. The amount of goodwill recorded During 2023, the Company completed the divestiture of
reflects the increased market share and related synergies three MUB branches to HomeStreet Bank, a wholly owned
that are expected to result from the acquisition, and subsidiary of HomeStreet, Inc., to satisfy regulatory
represents the excess purchase price over the estimated requirements related to the acquisition. There were
fair value of the net assets from MUB. The goodwill was approximately $400 million in deposits and $22 million in
allocated to the Company’s business segments and is not loans divested as part of this transaction.
deductible for income tax purposes. Refer to Note 11 for the

82 U.S. Bancorp 2023 Annual Report

The following table includes the fair value and unpaid principal balance of the loans from the MUB acquisition:
Unpaid
Principal
December 1, 2022 (Dollars in Millions) Balance Fair Value
Commercial $ 11,771 $ 11,366
Commercial real estate 14,397 13,737
Residential mortgages 28,256 26,247
Credit card 299 212
Other retail 1,397 1,370
Total loans $ 56,120 $ 52,932

Other intangible assets from the MUB acquisition, as of December 1, 2022, consisted of the following:

Weighted-Average Amortization
(Dollars in Millions) Estimated Life Method Fair Value
Mortgage servicing rights — (a) $ 147
Core deposit benefits 10 years Accelerated 2,635
Other 11 years Accelerated 26
Total other intangible assets (excluding goodwill) $ 2,808
(a) Mortgage servicing rights are recorded at fair value and are not amortized.

Valuation Methodologies and other market factors, such as liquidity, from the
perspective of a market participant. Loan cash flows were
The methods used to determine the fair values of the generated on an individual loan basis. The probability of
significant assets acquired and liabilities assumed as part of default, loss given default, exposure at default and
the MUB acquisition are described below. prepayment assumptions were the key factors in
determining expected credit losses which were embedded
Cash and Due from Banks The carrying amount of these
into the estimated cash flows.
assets is a reasonable estimate of fair value based on the
short-term nature of these assets. Core Deposit Benefits This intangible asset represents the
economic benefit created by certain client deposit
Investment Securities Fair value estimates for the
relationships by way of favorable funding relative to
investment securities were determined by using quoted
alternative sources. The fair value was estimated utilizing
market prices for identical securities in active markets when
the after-tax cost savings method of the income approach.
available. For certain securities where quoted market prices
Appropriate consideration was given to deposit costs
were not readily available, the Company utilized a third-
including cost of funds, net maintenance costs or servicing
party pricing service. The third-party pricing service used a
costs, client retention and alternative funding source costs
variety of methods that incorporated relevant market data to
at the time of acquisition. The discount rate used was
arrive at an estimate of what a buyer in the marketplace
derived taking into account the estimated cost of equity,
would have paid for these securities under current market
risk-free return rate and risk premium for the market and
conditions. These methods included the use of quoted
specific risk related to the asset’s cash flows.
prices for similar securities, inactive transaction prices and
broker quotes, as well as discounted cash flow Other Assets Included in other assets are tax-advantaged
methodologies. investments promoting affordable housing. The fair value of
these investments was estimated based on the value of the
Loans Held for Sale Fair value estimates for loans held for
expected future benefits.
sale were valued based on quoted market prices, where
available, and by comparison to instruments with similar Deposits and Borrowed Funds The fair values for
collateral and risk profiles. deposits, short-term borrowings and long-term debt were
estimated by discounting contractual cash flows using
Loans Fair value estimates for loans were based on
current market rates for instruments with similar maturities.
discounted cash flow methodologies that considered credit
loss and prepayment expectations, market interest rates

83
The following table presents financial results of MUB included in the Consolidated Statement of Income from the date of
acquisition through December 31, 2022.

One Month Ended

(Dollars in Millions) December 31, 2022
Net interest income $ 255
Noninterest income (38) (a)

Net income (loss) (562)

(a) Includes realized losses on investment securities sold.

The following table presents unaudited pro forma results as if the acquisition of MUB by the Company occurred on January 1,
2021 and includes the impact of amortizing and accreting certain estimated purchase accounting adjustments such as intangible
assets as well as fair value adjustments to investment securities, loans, deposits and long-term debt. The pro forma information
does not necessarily reflect the results that would have occurred had the Company acquired MUB on January 1, 2021.
Year Ended December 31 (Dollars in Millions) 2022 2021
Net interest income $ 17,541 $ 14,958
Noninterest income 10,068 11,071
Net income 7,184 7,187

The Company initially measures the amortized cost of a with unpaid principal balances of $51.0 billion and $5.1
PCD loan by adding the acquisition date estimate of billion, respectively. In accordance with authoritative
expected credit losses to the loan’s purchase price. The accounting guidance, there was no carryover of the
allowance for credit losses for PCD loans of $463 million allowance for credit losses that had been previously
was established through an adjustment to the MUB loan recorded by MUB. Subsequent to acquisition, the Company
balance reflected in the related purchase accounting mark. recorded an allowance for credit losses primarily on non-
Non-PCD loans and PCD loans had a fair value of $48.5 PCD loans of $662 million through an increase to the
billion and $4.4 billion, respectively, at the acquisition date provision for credit losses in 2022.

The following table provides information about the determination of the purchase price of PCD loans at the acquisition date:

December 1, 2022 (Dollars in Millions)

Principal balance $ 5,097
Allowance for credit losses at acquisition (463)
Non-credit discount (213)
Purchase price $ 4,421

NOTE 4 Restrictions on Cash and Due from Banks

Banking regulators require bank subsidiaries to maintain held balances at central banks and other financial
minimum average reserve balances, either in the form of institutions of $49.5 billion and $41.6 billion at
vault cash or reserve balances held with central banks or December 31, 2023 and 2022, respectively, to meet these
other financial institutions. The amount of required reserve requirements and for other purposes. These balances are
balances were approximately $53 million and $45 million at included in cash and due from banks on the Consolidated
December 31, 2023 and 2022, respectively. The Company Balance Sheet.

84 U.S. Bancorp 2023 Annual Report

 NOTE 5 Investment Securities
The Company’s held-to-maturity investment securities are value with unrealized net gains or losses reported within
carried at historical cost, adjusted for amortization of accumulated other comprehensive income (loss) in
premiums and accretion of discounts. The Company’s shareholders’ equity.
available-for-sale investment securities are carried at fair

The amortized cost, gross unrealized holding gains and losses, and fair value of held-to-maturity and available-for-sale investment
securities at December 31 were as follows:
2023 2022
Amortized Unrealized Unrealized Amortized Unrealized Unrealized
(Dollars in Millions) Cost Gains Losses Fair Value Cost Gains Losses Fair Value

Held-to-maturity
U.S. Treasury and agencies $ 1,345 $ — $ (35) $ 1,310 $ 1,344 $ — $ (51) $ 1,293
Mortgage-backed securities
Residential agency 80,997 6 (9,929) 71,074 85,693 2 (10,810) 74,885
Commercial agency 1,695 6 (5) 1,696 1,703 1 (8) 1,696
Other 8 — — 8 — — — —
Total held-to-maturity $ 84,045 $ 12 $ (9,969) $ 74,088 $ 88,740 $ 3 $(10,869) $ 77,874
Available-for-sale
U.S. Treasury and agencies $ 21,768 $ 8 $ (2,234) $ 19,542 $ 24,801 $ 1 $ (2,769) $ 22,033
Mortgage-backed securities
Residential agency 28,185 104 (2,211) 26,078 32,060 8 (2,797) 29,271
Commercial
Agency 8,703 — (1,360) 7,343 8,736 — (1,591) 7,145
Non-agency 7 — (1) 6 7 — — 7
Asset-backed securities 6,713 25 (14) 6,724 4,356 5 (38) 4,323
Obligations of state and political subdivisions 10,867 36 (914) 9,989 11,484 12 (1,371) 10,125
Other 24 — — 24 6 — — 6
Total available-for-sale, excluding portfolio level
basis adjustments 76,267 173 (6,734) 69,706 81,450 26 (8,566) 72,910
Portfolio level basis adjustments (a) 335 — (335) — — — — —
Total available-for-sale $ 76,602 $ 173 $ (7,069) $ 69,706 $ 81,450 $ 26 $ (8,566) $ 72,910
(a) Represents fair value hedge basis adjustments related to active portfolio layer method hedges of available-for-sale investment securities, which are not allocated to individual
securities in the portfolio. For additional information, refer to Note 20.

Investment securities with a fair value of $20.5 billion at counterparties have agreements granting the counterparties
December 31, 2023, and $15.3 billion at December 31, the right to sell or pledge the securities. Investment
2022, were pledged to secure public, private and trust securities securing these types of arrangements had a fair
deposits, repurchase agreements and for other purposes value of $338 million at December 31, 2023, and $858
required by contractual obligation or law. Included in these million at December 31, 2022.
amounts were securities where the Company and certain

The following table provides information about the amount of interest income from taxable and non-taxable investment securities:

Year Ended December 31 (Dollars in Millions) 2023 2022 2021

Taxable $ 4,171 $ 3,081 $ 2,103
Non-taxable 314 297 262
Total interest income from investment securities $ 4,485 $ 3,378 $ 2,365

85
The following table provides information about the amount of gross gains and losses realized through the sales of available-for-
sale investment securities:

Year Ended December 31 (Dollars in Millions) 2023 2022 2021

Realized gains $ 74 $ 163 $ 122
Realized losses (219) (143) (19)
Net realized gains (losses) $ (145) $ 20 $ 103
Income tax expense (benefit) on net realized gains (losses) $ (37) $ 5 $ 26

The Company conducts a regular assessment of its of the unrealized loss, expected cash flows of underlying
available-for-sale investment securities with unrealized collateral, the existence of any government or agency
losses to determine whether all or some portion of a guarantees, and market conditions. The Company
security’s unrealized loss is related to credit and an measures the allowance for credit losses using market
allowance for credit losses is necessary. If the Company information where available and discounting the cash flows
intends to sell or it is more likely than not the Company will at the original effective rate of the investment security. The
be required to sell an investment security, the amortized allowance for credit losses is adjusted each period through
cost of the security is written down to fair value. When earnings and can be subsequently recovered. The
evaluating credit losses, the Company considers various allowance for credit losses on the Company’s available-for-
factors such as the nature of the investment security, the sale investment securities was immaterial at December 31,
credit ratings or financial condition of the issuer, the extent 2023 and December 31, 2022.

At December 31, 2023, certain investment securities had a fair value below amortized cost. The following table shows the gross
unrealized losses excluding portfolio level basis adjustments and fair value of the Company’s available-for-sale investment
securities with unrealized losses, aggregated by investment category and length of time the individual investment securities have
been in continuous unrealized loss positions, at December 31, 2023:
Less Than 12 Months 12 Months or Greater Total
Unrealized Unrealized Unrealized
(Dollars in Millions) Fair Value Losses Fair Value Losses Fair Value Losses
U.S. Treasury and agencies $ 874 $ (3) $ 17,270 $ (2,231) $ 18,144 $ (2,234)
Mortgage-backed securities
Residential agency 519 (8) 21,356 (2,203) 21,875 (2,211)
Commercial
Agency — — 7,343 (1,360) 7,343 (1,360)
Non-agency — — 6 (1) 6 (1)
Asset-backed securities 2,235 (14) — — 2,235 (14)
Obligations of state and political subdivisions 544 (3) 7,464 (911) 8,008 (914)
Other — — 4 — 4 —
Total investment securities $ 4,172 $ (28) $ 53,443 $ (6,706) $ 57,615 $ (6,734)

These unrealized losses primarily relate to changes in unrealized losses, and believes it is more likely than not it
interest rates and market spreads subsequent to purchase would not be required to sell such investment securities
of these available-for-sale investment securities. U.S. before recovery of their amortized cost.
Treasury and agencies securities and agency mortgage- During the years ended December 31, 2023 and 2022,
backed securities are issued, guaranteed or otherwise the Company did not purchase any investment securities
supported by the United States government. The that had more-than-insignificant credit deterioration.
Company’s obligations of state and political subdivisions are Predominantly all of the Company’s held-to-maturity
generally high grade. Accordingly, the Company does not investment securities are U.S. Treasury and agencies
consider these unrealized losses to be credit-related and an securities and highly rated agency mortgage-backed
allowance for credit losses is not necessary. In general, the securities that are guaranteed or otherwise supported by the
issuers of the investment securities are contractually United States government and have no history of credit
prohibited from prepayment at less than par, and the losses. Accordingly the Company does not expect to incur
Company did not pay significant purchase premiums for any credit losses on held-to-maturity investment securities
these investment securities. At December 31, 2023, the and has no allowance for credit losses recorded for these
Company had no plans to sell investment securities with securities.

86 U.S. Bancorp 2023 Annual Report

The following table provides information about the amortized cost, fair value and yield by maturity date of the investment securities
outstanding at December 31, 2023:
Weighted-
Average Weighted-
Amortized Maturity in Average
(Dollars in Millions) Cost Fair Value Years Yield(e)

Held-to-maturity
U.S. Treasury and Agencies
Maturing in one year or less $ 50 $ 50 0.3 2.67%
Maturing after one year through five years 1,295 1,260 2.4 2.85
Maturing after five years through ten years — — — —
Maturing after ten years — — — —
Total $ 1,345 $ 1,310 2.3 2.85%
Mortgage-Backed Securities(a)
Maturing in one year or less $ 22 $ 22 0.7 4.43%
Maturing after one year through five years 1,268 1,266 2.5 4.52
Maturing after five years through ten years 75,984 67,094 8.8 2.19
Maturing after ten years 5,418 4,388 10.2 1.91
Total $ 82,692 $ 72,770 8.8 2.21%
Other
Maturing in one year or less $ — $ — — —%
Maturing after one year through five years 8 8 2.8 2.56
Maturing after five years through ten years — — — —
Maturing after ten years — — — —
Total $ 8 $ 8 2.8 2.56%
Total held-to-maturity(b) $ 84,045 $ 74,088 8.7 2.22%
Available-for-sale
U.S. Treasury and Agencies
Maturing in one year or less $ 9 $ 9 0.3 5.28%
Maturing after one year through five years 8,882 8,378 3.7 2.35
Maturing after five years through ten years 11,165 9,827 6.8 2.08
Maturing after ten years 1,712 1,328 10.8 2.02
Total $ 21,768 $ 19,542 5.9 2.19%
Mortgage-Backed Securities(a)
Maturing in one year or less $ 83 $ 81 0.8 2.26%
Maturing after one year through five years 11,196 10,860 3.5 3.80
Maturing after five years through ten years 24,455 21,483 7.3 2.76
Maturing after ten years 1,161 1,003 10.9 3.43
Total $ 36,895 $ 33,427 6.3 3.09%
Asset-Backed Securities (a)
Maturing in one year or less $ — $ — — —%
Maturing after one year through five years 5,834 5,844 1.7 5.05
Maturing after five years through ten years 879 880 5.8 7.15
Maturing after ten years — — — —
Total $ 6,713 $ 6,724 2.2 5.33%
Obligations of State and Political Subdivisions(c) (d)
Maturing in one year or less $ 225 $ 225 0.4 5.52%
Maturing after one year through five years 3,546 3,536 3.0 4.55
Maturing after five years through ten years 1,453 1,414 7.3 3.86
Maturing after ten years 5,643 4,814 15.3 3.14
Total $ 10,867 $ 9,989 9.9 3.75%
Other
Maturing in one year or less $ — $ — — —%
Maturing after one year through five years 24 24 1.7 4.51
Maturing after five years through ten years — — — —
Maturing after ten years — — — —
Total $ 24 $ 24 1.7 4.51%
Total available-for-sale(b) (f) $ 76,267 $ 69,706 6.3 3.12%
(a) Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities that take into account anticipated future
prepayments.
(b) The weighted-average maturity of total held-to-maturity investment securities was 9.2 years at December 31, 2022, with a corresponding weighted-average yield of 2.18 percent.
The weighted-average maturity of total available-for-sale investment securities was 7.4 years at December 31, 2022, with a corresponding weighted-average yield of 2.94 percent.
(c) Information related to obligations of state and political subdivisions is presented based upon yield to first optional call date if the security is purchased at a premium, and yield to
maturity if the security is purchased at par or a discount.
(d) Maturity calculations for obligations of state and political subdivisions are based on the first optional call date for securities with a fair value above par and the contractual maturity
date for securities with a fair value equal to or below par.
(e) Weighted-average yields for obligations of state and political subdivisions are presented on a fully-taxable equivalent basis based on a federal income tax rate of 21 percent. Yields
on investment securities are computed based on amortized cost balances, excluding any premiums or discounts recorded related to the transfer of investment securities at fair
value from available-for-sale to held-to maturity.
(f) Amortized cost excludes portfolio level basis adjustments of $335 million.

87
 NOTE 6 Loans and Allowance for Credit Losses
The composition of the loan portfolio at December 31, by class and underlying specific portfolio type, was as follows:

(Dollars in Millions) 2023 2022

Commercial
Commercial $ 127,676 $ 131,128
Lease financing 4,205 4,562
Total commercial 131,881 135,690
Commercial Real Estate
Commercial mortgages 41,934 43,765
Construction and development 11,521 11,722
Total commercial real estate 53,455 55,487
Residential Mortgages
Residential mortgages 108,605 107,858
Home equity loans, first liens 6,925 7,987
Total residential mortgages 115,530 115,845
Credit Card 28,560 26,295
Other Retail
Retail leasing 4,135 5,519
Home equity and second mortgages 13,056 12,863
Revolving credit 3,668 3,983
Installment 13,889 14,592
Automobile 9,661 17,939
Total other retail 44,409 54,896
Total loans $ 373,835 $ 388,213

The Company had loans of $123.1 billion at purchased loans amounted to $2.7 billion at December 31,
December 31, 2023, and $134.6 billion at December 31, 2023 and $3.1 billion at December 31, 2022. The Company
2022, pledged at the Federal Home Loan Bank, and loans evaluates purchased loans for more-than-insignificant
of $82.8 billion at December 31, 2023, and $85.8 billion at deterioration at the date of purchase in accordance with
December 31, 2022, pledged at the Federal Reserve Bank. applicable authoritative accounting guidance. Purchased
The Company offers a broad array of lending products to loans that have experienced more-than-insignificant
consumer and commercial customers, in various industries, deterioration from origination are considered purchased
across several geographical locations, predominately in the credit deteriorated loans. All other purchased loans are
states in which it has Consumer and Business Banking considered non-purchased credit deteriorated loans.
offices. Collateral for commercial and commercial real
Allowance for Credit Losses The allowance for credit
estate loans may include marketable securities, accounts
losses is established for current expected credit losses on
receivable, inventory, equipment, real estate, or the related
the Company’s loan and lease portfolio, including unfunded
property.
credit commitments. The allowance considers expected
Originated loans are reported at the principal amount
losses for the remaining lives of the applicable assets,
outstanding, net of unearned interest and deferred fees and
inclusive of expected recoveries. The allowance for credit
costs, and any partial charge-offs recorded. Purchased
losses is increased through provisions charged to earnings
loans are recorded at fair value at the date of purchase. Net
and reduced by net charge-offs.
unearned interest and deferred fees and costs on originated
loans and unamortized premiums and discounts on

88 U.S. Bancorp 2023 Annual Report

Activity in the allowance for credit losses by portfolio class was as follows:

Commercial Residential Credit Other Total

(Dollars in Millions) Commercial Real Estate Mortgages Card Retail Loans

Balance at December 31, 2022 $ 2,163 $ 1,325 $ 926 $ 2,020 $ 970 $ 7,404
Add
Change in accounting principle(a) — — (31) (27) (4) (62)
Allowance for acquired credit losses(b) — 127 — — — 127
Provision for credit losses 270 431 41 1,259 274 2,275
Deduct
Loans charged-off 389 281 129 1,014 478 2,291
Less recoveries of loans charged-off (75) (18) (20) (165) (108) (386)
Net loan charge-offs (recoveries) 314 263 109 849 370 1,905
Balance at December 31, 2023 $ 2,119 $ 1,620 $ 827 $ 2,403 $ 870 $ 7,839
Balance at December 31, 2021 $ 1,849 $ 1,123 $ 565 $ 1,673 $ 945 $ 6,155
Add
Allowance for acquired credit losses(b) 163 87 36 45 5 336
Provision for credit losses(c) 378 152 302 826 319 1,977
Deduct
Loans charged-off(d) 319 54 13 696 418 1,500
Less recoveries of loans charged-off (92) (17) (36) (172) (120) (437)
Net loan charge-offs (recoveries) 227 37 (23) 524 298 1,063
Other Changes — — — — (1) (1)
Balance at December 31, 2022 $ 2,163 $ 1,325 $ 926 $ 2,020 $ 970 $ 7,404
Balance at December 31, 2020 $ 2,423 $ 1,544 $ 573 $ 2,355 $ 1,115 $ 8,010
Add
Provision for credit losses (471) (419) (40) (170) (73) (1,173)
Deduct
Loans charged-off 222 29 18 686 253 1,208
Less recoveries of loans charged-off (119) (27) (50) (174) (156) (526)
Net loan charge-offs (recoveries) 103 2 (32) 512 97 682
Balance at December 31, 2021 $ 1,849 $ 1,123 $ 565 $ 1,673 $ 945 $ 6,155
(a) Effective January 1, 2023, the Company adopted accounting guidance which removed the separate recognition and measurement of troubled debt restructurings.
(b) Represents allowance for credit deteriorated and charged-off loans acquired from MUB.
(c) Includes $662 million of provision for credit losses related to the acquisition of MUB.
(d) Includes $179 million of total charge-offs primarily on loans previously charged-off by MUB, which were written up upon acquisition to unpaid principal balance as required by
purchase accounting.

The increase in the allowance for credit losses from December 31, 2022 to December 31, 2023 was primarily driven by
normalizing credit losses, credit card balance growth and commercial real estate credit quality.

89
The following table provides a summary of loans charged-off during the year ended December 31, 2023, by portfolio class and
year of origination:
Commercial Residential
(Dollars in Millions) Commercial Real Estate(a) Mortgages(b) Credit Card(c) Other Retail(d) Total Loans
Originated in 2023 $ 48 $ 63 $ — $ — $ 57 $ 168
Originated in 2022 63 88 1 — 130 282
Originated in 2021 30 69 6 — 83 188
Originated in 2020 17 2 8 — 38 65
Originated in 2019 15 3 16 — 31 65
Originated prior to 2019 53 56 98 — 31 238
Revolving 163 — — 1,014 80 1,257
Revolving converted to term — — — — 28 28
Total charge-offs $ 389 $ 281 $ 129 $ 1,014 $ 478 $ 2,291
Note: Year of origination is based on the origination date of a loan, or for existing loans the date when the maturity date, pricing or commitment amount is amended.
(a) Includes $91 million in charge-offs related to uncollectible amounts on acquired loans.
(b) Includes $117 million of charge-offs related to balance sheet repositioning and capital management actions.
(c) Predominantly all credit card loans are considered revolving loans. Includes an immaterial amount of charge-offs related to revolving converted to term loans.
(d) Includes $192 million of charge-offs related to balance sheet repositioning and capital management actions.

Credit Quality The credit quality of the Company’s loan portfolios is assessed as a function of net credit losses, levels of
nonperforming assets and delinquencies, and credit quality ratings as defined by the Company. These credit quality ratings are an
important part of the Company’s overall credit risk management process and evaluation of the allowance for credit losses.

The following table provides a summary of loans by portfolio class, including the delinquency status of those that continue to
accrue interest, and those that are nonperforming:
Accruing
30-89 Days 90 Days or
(Dollars in Millions) Current Past Due More Past Due Nonperforming(b) Total

December 31, 2023

Commercial $ 130,925 $ 464 $ 116 $ 376 $ 131,881
Commercial real estate 52,619 55 4 777 53,455
Residential mortgages(a) 115,067 169 136 158 115,530
Credit card 27,779 406 375 — 28,560
Other retail 43,926 278 67 138 44,409
Total loans $ 370,316 $ 1,372 $ 698 $ 1,449 $ 373,835
December 31, 2022
Commercial $ 135,077 $ 350 $ 94 $ 169 $ 135,690
Commercial real estate 55,057 87 5 338 55,487
(a) 115,224 201 95 325 115,845
Residential mortgages
Credit card 25,780 283 231 1 26,295
Other retail 54,382 309 66 139 54,896
Total loans $ 385,520 $ 1,230 $ 491 $ 972 $ 388,213
(a) At December 31, 2023, $595 million of loans 30–89 days past due and $2.0 billion of loans 90 days or more past due purchased and that could be purchased from Government
National Mortgage Association (“GNMA”) mortgage pools under delinquent loan repurchase options whose repayments are insured by the Federal Housing Administration or
guaranteed by the United States Department of Veterans Affairs, were classified as current, compared with $647 million and $2.2 billion at December 31, 2022, respectively.
(b) Substantially all nonperforming loans at December 31, 2023 and 2022, had an associated allowance for credit losses. The Company recognized interest income on nonperforming
loans of $22 million and $19 million for the years ended December 31, 2023 and 2022, respectively, compared to what would have been recognized at the original contractual
terms of the loans of $49 million and $34 million, respectively.

At December 31, 2023, total nonperforming assets held related to mortgage loans whose payments are primarily
by the Company were $1.5 billion, compared with $1.0 insured by the Federal Housing Administration or
billion at December 31, 2022. Total nonperforming assets guaranteed by the United States Department of Veterans
included $1.4 billion of nonperforming loans, $26 million of Affairs. In addition, the amount of residential mortgage loans
OREO and $19 million of other nonperforming assets owned secured by residential real estate in the process of
by the Company at December 31, 2023, compared with foreclosure at December 31, 2023 and December 31, 2022,
$972 million, $23 million and $21 million, respectively, at was $728 million and $1.1 billion, respectively, of which
December 31, 2022. $487 million and $830 million, respectively, related to loans
At December 31, 2023, the amount of foreclosed purchased and that could be purchased from GNMA
residential real estate held by the Company, and included in mortgage pools under delinquent loan repurchase options
OREO, was $26 million, compared with $23 million at whose repayments are insured by the Federal Housing
December 31, 2022. These amounts excluded $47 million Administration or guaranteed by the United States
and $54 million at December 31, 2023 and December 31, Department of Veterans Affairs.
2022, respectively, of foreclosed residential real estate

90 U.S. Bancorp 2023 Annual Report

The following table provides a summary of loans by portfolio class and the Company’s internal credit quality rating:
December 31, 2023 December 31, 2022
Criticized Criticized
Special Total Special Total
(Dollars in Millions) Pass Mention Classified(a) Criticized Total Pass Mention Classified(a) Criticized Total
Commercial
Originated in 2023 $ 43,023 $ 827 $ 856 $ 1,683 $ 44,706 $ — $ — $ — $ — $ —
Originated in 2022 40,076 274 632 906 40,982 61,229 245 315 560 61,789
Originated in 2021 9,219 117 154 271 9,490 26,411 159 78 237 26,648
Originated in 2020 3,169 92 71 163 3,332 7,049 68 138 206 7,255
Originated in 2019 1,340 18 103 121 1,461 3,962 51 210 261 4,223
Originated prior to 2019 3,963 12 106 118 4,081 8,986 64 129 193 9,179
Revolving(b) 26,213 362 1,254 1,616 27,829 25,888 344 364 708 26,596
Total commercial 127,003 1,702 3,176 4,878 131,881 133,525 931 1,234 2,165 135,690
Commercial real estate
Originated in 2023 8,848 465 2,206 2,671 11,519 — — — — —
Originated in 2022 11,831 382 1,141 1,523 13,354 14,527 206 519 725 15,252
Originated in 2021 9,235 500 385 885 10,120 13,565 171 99 270 13,835
Originated in 2020 3,797 51 87 138 3,935 6,489 97 117 214 6,703
Originated in 2019 4,749 336 359 695 5,444 6,991 251 304 555 7,546
Originated prior to 2019 6,010 122 260 382 6,392 9,639 138 875 1,013 10,652
Revolving 2,613 6 70 76 2,689 1,489 — 10 10 1,499
Revolving converted to term 2 — — — 2 — — — — —
Total commercial real estate 47,085 1,862 4,508 6,370 53,455 52,700 863 1,924 2,787 55,487
Residential mortgages(c)
Originated in 2023 9,734 — 5 5 9,739 — — — — —
Originated in 2022 29,146 — 17 17 29,163 28,452 — — — 28,452
Originated in 2021 36,365 — 16 16 36,381 39,527 — 7 7 39,534
Originated in 2020 14,773 — 9 9 14,782 16,556 — 8 8 16,564
Originated in 2019 5,876 — 16 16 5,892 7,222 — 18 18 7,240
Originated prior to 2019 19,326 — 246 246 19,572 23,658 — 397 397 24,055
Revolving 1 — — — 1 — — — — —
Total residential mortgages 115,221 — 309 309 115,530 115,415 — 430 430 115,845
Credit card(d) 28,185 — 375 375 28,560 26,063 — 232 232 26,295
Other retail
Originated in 2023 5,184 — 4 4 5,188 — — — — —
Originated in 2022 5,607 — 12 12 5,619 9,563 — 6 6 9,569
Originated in 2021 10,398 — 15 15 10,413 15,352 — 12 12 15,364
Originated in 2020 4,541 — 9 9 4,550 7,828 — 11 11 7,839
Originated in 2019 1,793 — 7 7 1,800 3,418 — 13 13 3,431
Originated prior to 2019 2,215 — 13 13 2,228 3,689 — 31 31 3,720
Revolving 13,720 — 104 104 13,824 14,029 — 98 98 14,127
Revolving converted to term 735 — 52 52 787 800 — 46 46 846
Total other retail 44,193 — 216 216 44,409 54,679 — 217 217 54,896
Total loans $ 361,687 $ 3,564 $ 8,584 $ 12,148 $ 373,835 $ 382,382 $ 1,794 $ 4,037 $ 5,831 $ 388,213
Total outstanding
commitments $ 762,869 $ 5,053 $ 10,470 $ 15,523 $ 778,392 $ 772,804 $ 2,825 $ 5,041 $ 7,866 $ 780,670
Note: Year of origination is based on the origination date of a loan, or for existing loans the date when the maturity date, pricing or commitment amount is amended. Predominantly all
current year and nearer term loan origination years for criticized loans relate to existing loans that have had recent maturity date, pricing or commitment amount amendments.
(a) Classified rating on consumer loans primarily based on delinquency status.
(b) Includes an immaterial amount of revolving converted to term loans.
(c) At December 31, 2023, $2.0 billion of GNMA loans 90 days or more past due and $1.2 billion of modified GNMA loans whose repayments are insured by the Federal Housing
Administration or guaranteed by the United States Department of Veterans Affairs were classified with a pass rating, compared with $2.2 billion and $1.0 billion at December 31,
2022, respectively.
(d) Predominately all credit card loans are considered revolving loans. Includes an immaterial amount of revolving converted to term loans.

91
Loan Modifications In certain circumstances, the Company may modify the terms of a loan to maximize the collection of amounts
due when a borrower is experiencing financial difficulties or is expected to experience difficulties in the near-term. The following
table provides a summary of loan balances at December 31, 2023, which were modified during the year ended December 31,
2023, by portfolio class and modification granted:

Interest Rate Term Multiple Total Percent of

(Dollars in Millions) Reduction Payment Delay Extension Modifications(a) Modifications Class Total
Commercial $ 46 $ — $ 286 $ 33 $ 365 .3%
Commercial real estate — — 645 72 717 1.3
Residential mortgages(b) — 234 26 20 280 .2
Credit card 349 1 — — 350 1.2
Other retail 7 21 144 3 175 .4
Total loans, excluding loans purchased from
GNMA mortgage pools 402 256 1,101 128 1,887 .5
Loans purchased from GNMA mortgage pools(b) — 1,263 255 321 1,839 1.6
Total loans $ 402 $ 1,519 $ 1,356 $ 449 $ 3,726 1.0%
(a) Includes $329 million of total loans receiving a payment delay and term extension, $112 million of total loans receiving an interest rate reduction and term extension and $8 million
of total loans receiving an interest rate reduction, payment delay and term extension for the year ended December 31, 2023.
(b) Percent of class total amounts expressed as a percent of total residential mortgage loan balances.

Loan modifications included in the table above exclude 2023, the balance of loans modified in trial period
trial period arrangements offered to customers and secured arrangements was $39 million, while the balance of secured
loans to consumer borrowers that have had debt discharged loans to consumer borrowers that have had debt discharged
through bankruptcy where the borrower has not reaffirmed through bankruptcy was not material.
the debt during the periods presented. At December 31,

The following table summarizes the effects of loan modifications made to borrowers on loans modified during the year ended
December 31, 2023:
Weighted-Average Weighted-Average
Interest Rate Months of Term
(Dollars in Millions) Reduction Extension

Commercial 13.0 % 12
Commercial real estate 3.5 11
Residential mortgages 1.2 98
Credit card 15.4 —
Other retail 7.9 4
Loans purchased from GNMA mortgage pools .6 103
Note: The weighted-average payment deferral for all portfolio classes was less than $1 million for the year ended December 31, 2023. Forbearance payments are required to be paid
at the end of the original term loan.

Loans that receive a forbearance plan generally remain receiving a term extension or modification. Therefore, loans
in default until they are no longer delinquent as the result of only receiving forbearance plans are not included in the
the payment of all past due amounts or the borrower table below.

The following table provides a summary of loan balances at December 31, 2023, which were modified during the year ended
December 31, 2023, by portfolio class and delinquency status:
90 Days or
30-89 Days More Past
(Dollars in Millions) Current Past Due Due Total

Commercial $ 255 $ 12 $ 98 $ 365

Commercial real estate 524 — 193 717
(a)
Residential mortgages 1,385 24 16 1,425
Credit card 251 67 32 350
Other retail 133 21 8 162
Total loans $ 2,548 $ 124 $ 347 $ 3,019
(a) At December 31, 2023, $372 million of loans 30-89 days past due and $175 million of loans 90 days or more past due purchased and that could be purchased from GNMA
mortgage pools under delinquent loan repurchase options whose payments are insured by the Federal Housing Administration or guaranteed by the United States Department of
Veterans Affairs, were classified as current.

92 U.S. Bancorp 2023 Annual Report

The following table provides a summary of loans that defaulted (fully or partially charged-off or became 90 days or more past due)
that were modified during the year ended December 31, 2023.

Interest Rate Term Multiple

(Dollars in Millions) Reduction Payment Delay Extension Modifications(a)

Commercial $ 7 $ — $ — $ —
Commercial real estate — — 1 —
Residential mortgages — 8 2 1
Credit card 35 — — —
Other retail 1 1 11 —
Total loans, excluding loans purchased from GNMA mortgage pools 43 9 14 1
Loans purchased from GNMA mortgage pools — 67 30 37
Total loans $ 43 $ 76 $ 44 $ 38
(a) Represents loans receiving a payment delay and term extension.

As of December 31, 2023, the Company had $283 million of commitments to lend additional funds to borrowers whose terms of
their outstanding owed balances have been modified.

Prior Period Troubled Debt Restructuring Information

The following table provides a summary of loans modified as troubled debt restructurings for the years ended December 31, by
portfolio class:
Pre-Modification Post-Modification
Number of Outstanding Outstanding
(Dollars in Millions) Loans Loan Balance Loan Balance

2022
Commercial 2,259 $ 148 $ 134
Commercial real estate 75 50 47
Residential mortgages 1,699 475 476
Credit card 44,470 243 246
Other retail 2,514 89 85
Total loans, excluding loans purchased from GNMA mortgage pools 51,017 1,005 988
Loans purchased from GNMA mortgage pools 1,640 226 230
Total loans 52,657 $ 1,231 $ 1,218
2021
Commercial 2,156 $ 140 $ 127
Commercial real estate 112 193 179
Residential mortgages 977 329 328
Credit card 25,297 144 146
Other retail 2,576 74 67
Total loans, excluding loans purchased from GNMA mortgage pools 31,118 880 847
Loans purchased from GNMA mortgage pools 2,311 334 346
Total loans 33,429 $ 1,214 $ 1,193

93
The following table provides a summary of troubled debt restructured loans that defaulted (fully or partially charged-off or became
90 days or more past due) for the years ended December 31, that were modified as troubled debt restructurings within 12 months
previous to default:
Number of Amount
(Dollars in Millions) Loans Defaulted

2022
Commercial 767 $ 24
Commercial real estate 20 11
Residential mortgages 235 28
Credit card 7,904 42
Other retail 307 5
Total loans, excluding loans purchased from GNMA mortgage pools 9,233 110
Loans purchased from GNMA mortgage pools 282 59
Total loans 9,515 $ 169
2021
Commercial 1,084 $ 32
Commercial real estate 16 7
Residential mortgages 81 9
Credit card 7,700 43
Other retail 714 11
Total loans, excluding loans purchased from GNMA mortgage pools 9,595 102
Loans purchased from GNMA mortgage pools 176 26
Total loans 9,771 $ 128

94 U.S. Bancorp 2023 Annual Report

 NOTE 7 Leases
The Company, as a lessor, originates retail and commercial automobiles, while commercial leases may include high
leases either directly to the consumer or indirectly through dollar assets such as aircraft or lower cost items such as
dealer networks. Retail leases consist primarily of office equipment.

The components of the net investment in sales-type and direct financing leases, at December 31, were as follows:
(Dollars in Millions) 2023 2022
Lease receivables $ 7,239 $ 8,731
Unguaranteed residual values accruing to the lessor’s benefit 1,082 1,323
Total net investment in sales-type and direct financing leases $ 8,321 $10,054

The Company, as a lessor, recorded $738 million, $764 2023, 2022 and 2021, respectively, primarily consisting of
million and $888 million of revenue on its Consolidated interest income on sales-type and direct financing leases.
Statement of Income for the years ended December 31,

The contractual future lease payments to be received by the Company, at December 31, 2023, were as follows:
Sales-type and
Direct Financing Operating
(Dollars in Millions) Leases Leases

2024 $ 3,069 $ 138

2025 2,182 110
2026 1,333 66
2027 690 42
2028 260 27
Thereafter 369 57
Total lease payments 7,903 $ 440
Amounts representing interest (664)
Lease receivables $ 7,239

The Company, as lessee, leases certain assets for use in billion and $1.6 billion, respectively, compared with $1.6
its operations. Leased assets primarily include retail billion of ROU assets and $1.7 billion of lease liabilities at
branches, operations centers and other corporate locations, December 31, 2022, respectively.
and, to a lesser extent, office and computer equipment. For Total costs incurred by the Company, as a lessee, were
each lease with an original term greater than 12 months, the $496 million, $390 million and $364 million for the years
Company records a lease liability and a corresponding ROU ended December 31, 2023, 2022 and 2021, respectively,
asset. At December 31, 2023, the Company’s ROU assets and principally related to contractual lease payments on
included in premises and equipment and lease liabilities operating leases. The Company’s leases do not impose
included in long-term debt and other liabilities, were $1.4 significant covenants or other restrictions on the Company.

The following table presents amounts relevant to the Company’s assets leased for use in its operations for the years ended
December 31:

(Dollars in Millions) 2023 2022 2021

Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases $ 409 $ 294 $ 288
Operating cash flows from finance leases 7 4 5
Financing cash flows from finance leases 49 14 12
Right of use assets obtained in exchange for new operating lease liabilities 230 239 164
Right of use assets obtained in exchange for new finance lease liabilities 25 91 75

95
The following table presents the weighted-average remaining lease terms and discount rates of the Company’s assets leased for
use in its operations at December 31:
2023 2022
Weighted-average remaining lease term of operating leases (in years) 6.4 6.8
Weighted-average remaining lease term of finance leases (in years) 8.3 8.5
Weighted-average discount rate of operating leases 3.7% 3.3%
Weighted-average discount rate of finance leases 7.7% 7.9%

The contractual future lease obligations of the Company at December 31, 2023, were as follows:

Operating Finance
(Dollars in Millions) Leases Leases
2024 $ 377 $ 41
2025 295 38
2026 245 36
2027 196 22
2028 144 8
Thereafter 360 23
Total lease payments 1,617 168
Amounts representing interest (211) (18)
Lease liabilities $ 1,406 $ 150

NOTE 8 Accounting for Transfers and Servicing of Financial Assets and Variable
Interest Entities
The Company transfers financial assets in the normal other asset securitizations or similar asset-backed financing
course of business. The majority of the Company’s financial arrangements that are off-balance sheet.
asset transfers are residential mortgage loan sales primarily The Company previously provided financial support
to GSEs, transfers of tax-advantaged investments, primarily through the use of waivers of trust and investment
commercial loan sales through participation agreements, management fees associated with various unconsolidated
and other individual or portfolio loan and securities sales. In registered money market funds it manages. The Company
accordance with the accounting guidance for asset discontinued providing this support beginning in the third
transfers, the Company considers any ongoing involvement quarter of 2022 due to rising interest rates in 2022. The
with transferred assets in determining whether the assets Company provided $65 million and $250 million of support
can be derecognized from the balance sheet. Guarantees to the funds during the years ended December 31, 2022 and
provided to certain third parties in connection with the 2021, respectively.
transfer of assets are further discussed in Note 23. The Company is involved in various entities that are
For loans sold under participation agreements, the considered to be VIEs. The Company’s investments in VIEs
Company also considers whether the terms of the loan are primarily related to investments promoting affordable
participation agreement meet the accounting definition of a housing, community development and renewable energy
participating interest. With the exception of servicing and sources. Some of these tax-advantaged investments
certain performance-based guarantees, the Company’s support the Company’s regulatory compliance with the
continuing involvement with financial assets sold is minimal Community Reinvestment Act. The Company’s investments
and generally limited to market customary representation in these entities generate a return primarily through the
and warranty clauses. Any gain or loss on sale depends on realization of federal and state income tax credits, and other
the previous carrying amount of the transferred financial tax benefits, such as tax deductions from operating losses
assets, the consideration received, and any liabilities of the investments, over specified time periods. These tax
incurred in exchange for the transferred assets. Upon credits are recognized as a reduction of tax expense or, for
transfer, any servicing assets and other interests that investments qualifying as investment tax credits, as a
continue to be held by the Company are initially recognized reduction to the related investment asset. The Company
at fair value. For further information on MSRs, refer to Note recognized federal and state income tax credits related to its
10. On a limited basis, the Company may acquire and affordable housing and other tax-advantaged investments in
package high-grade corporate bonds for select corporate tax expense of $576 million, $461 million and $508 million
customers, in which the Company generally has no for the years ended December 31, 2023, 2022 and 2021,
continuing involvement with these transactions. Additionally, respectively. The Company also recognized $318 million,
the Company is an authorized GNMA issuer and issues $527 million and $418 million of investment tax credits for
GNMA securities on a regular basis. The Company has no the years ended December 31, 2023, 2022 and 2021,
respectively. The Company recognized $582 million, $424

96 U.S. Bancorp 2023 Annual Report

million and $468 million of expenses related to all of these commitments, ranged from less than $1 million to $86
investments for the years ended December 31, 2023, 2022 million at December 31, 2023, compared with less than $1
and 2021, respectively, which were primarily included in tax million to $116 million at December 31, 2022.
expense. The Company is required to consolidate VIEs in which it
The Company is not required to consolidate VIEs in has concluded it has a controlling financial interest. The
which it has concluded it does not have a controlling Company sponsors entities to which it transfers its interests
financial interest, and thus is not the primary beneficiary. In in tax-advantaged investments to third parties. At
such cases, the Company does not have both the power to December 31, 2023, approximately $6.1 billion of the
direct the entities’ most significant activities and the Company’s assets and $4.4 billion of its liabilities included
obligation to absorb losses or the right to receive benefits on the Consolidated Balance Sheet were related to
that could potentially be significant to the VIEs. community development and tax-advantaged investment
The Company’s investments in these unconsolidated VIEs which the Company has consolidated, primarily related
VIEs are carried in other assets on the Consolidated to these transfers. These amounts compared to $5.9 billion
Balance Sheet. The Company’s unfunded capital and other and $4.2 billion, respectively, at December 31, 2022. The
commitments related to these unconsolidated VIEs are majority of the assets of these consolidated VIEs are
generally carried in other liabilities on the Consolidated reported in other assets, and the liabilities are reported in
Balance Sheet. The Company’s maximum exposure to loss long-term debt and other liabilities. The assets of a
from these unconsolidated VIEs include the investment particular VIE are the primary source of funds to settle its
recorded on the Company’s Consolidated Balance Sheet, obligations. The creditors of the VIEs do not have recourse
net of unfunded capital commitments, and previously to the general credit of the Company. The Company’s
recorded tax credits which remain subject to recapture by exposure to the consolidated VIEs is generally limited to the
taxing authorities based on compliance features required to carrying value of its variable interests plus any related tax
be met at the project level. While the Company believes credits previously recognized or transferred to others with a
potential losses from these investments are remote, the guarantee.
maximum exposure was determined by assuming a In addition, the Company sponsors a municipal bond
scenario where the community-based business and housing securities tender option bond program. The Company
projects completely fail and do not meet certain government controls the activities of the program’s entities, is entitled to
compliance requirements resulting in recapture of the the residual returns and provides liquidity and remarketing
related tax credits. arrangements to the program. As a result, the Company has
consolidated the program’s entities. At December 31, 2023,
The following table provides a summary of investments in $607 million of available-for-sale investment securities and
community development and tax-advantaged VIEs that the $381 million of short-term borrowings on the Consolidated
Company has not consolidated: Balance Sheet were related to the tender option bond
At December 31 (Dollars in Millions) 2023 2022 program, compared with $1.5 billion of available-for-sale
Investment carrying amount $ 6,659 $ 5,452 investment securities and $1.0 billion of short-term
borrowings at December 31, 2022.
Unfunded capital and other
commitments 3,619 2,416
Maximum exposure to loss 9,002 9,761

The Company also has noncontrolling financial

investments in private investment funds and partnerships
considered to be VIEs, which are not consolidated. The
Company’s recorded investment in these entities, carried in
other assets on the Consolidated Balance Sheet, was
approximately $219 million at December 31, 2023 and $177
million at December 31, 2022. The maximum exposure to
loss related to these VIEs was $319 million at December 31,
2023 and $310 million at December 31, 2022, representing
the Company’s investment balance and its unfunded
commitments to invest additional amounts.
The Company also held senior notes of $5.3 billion as
available-for-sale investment securities at December 31,
2023, compared with $3.4 billion at December 31, 2022.
These senior notes were issued by third-party securitization
vehicles that held $6.1 billion at December 31, 2023 and
$4.0 billion at December 31, 2022 of indirect auto loans that
collateralize the senior notes. These VIEs are not
consolidated by the Company.
The Company’s individual net investments in
unconsolidated VIEs, which exclude any unfunded capital

97
 NOTE 9 Premises and Equipment
Premises and equipment at December 31 consisted of the following:
(Dollars in Millions) 2023 2022
Land $ 515 $ 535
Buildings and improvements 3,239 3,296
Furniture, fixtures and equipment 3,013 3,485
Right of use assets on operating leases 1,149 1,296
Right of use assets on finance leases 275 269
Construction in progress 68 46
8,259 8,927
Less accumulated depreciation and amortization (4,636) (5,069)
Total $ 3,623 $ 3,858

NOTE 10 Mortgage Servicing Rights

The Company capitalizes MSRs as separate assets when rate and model assumption changes, net of the value
loans are sold and servicing is retained. MSRs may also be change in derivatives used to economically hedge MSRs.
purchased from others. The Company carries MSRs at fair These changes resulted in net losses of $41 million, $45
value, with changes in the fair value recorded in earnings million and $183 million for the years ended December 31,
during the period in which they occur. The Company 2023, 2022 and 2021, respectively. Loan servicing and
serviced $233.4 billion of residential mortgage loans for ancillary fees, not including valuation changes, included in
others at December 31, 2023, and $243.6 billion at mortgage banking revenue were $733 million, $754 million
December 31, 2022, including subserviced mortgages with and $725 million for the years ended December 31, 2023,
no corresponding MSR asset. Included in mortgage banking 2022 and 2021, respectively.
revenue are the MSR fair value changes arising from market

Changes in fair value of capitalized MSRs are summarized as follows:

(Dollars in Millions) 2023 2022 2021
Balance at beginning of period $ 3,755 $ 2,953 $ 2,210
Rights purchased 5 156 42
Rights capitalized 373 590 1,136
Rights sold(a) (440) (255) 2
Changes in fair value of MSRs
Due to fluctuations in market interest rates(b) 66 804 272
Due to revised assumptions or models(c) 12 (29) (196)
Other changes in fair value(d) (394) (464) (513)
Balance at end of period $ 3,377 $ 3,755 $ 2,953
(a) MSRs sold include those having a negative fair value, resulting from the loans being severely delinquent.
(b) Includes changes in MSR value associated with changes in market interest rates, including estimated prepayment rates and anticipated earnings on escrow deposits.
(c) Includes changes in MSR value not caused by changes in market interest rates, such as changes in assumed cost to service, ancillary income and option adjusted spread, as well
as the impact of any model changes.
(d) Primarily the change in MSR value from passage of time and cash flows realized (decay), but also includes the impact of changes to expected cash flows not associated with
changes in market interest rates, such as the impact of delinquencies.

The estimated sensitivity to changes in interest rates of the fair value of the MSR portfolio and the related derivative instruments as
of December 31 follows:
2023 2022
Down Down Down Up Up Up Down Down Down Up Up Up
(Dollars in Millions) 100 bps 50 bps 25 bps 25 bps 50 bps 100 bps 100 bps 50 bps 25 bps 25 bps 50 bps 100 bps
MSR portfolio $ (370) $ (173) $ (84) $ 77 $ 147 $ 268 $ (334) $ (153) $ (73) $ 66 $ 125 $ 224
Derivative instrument hedges 381 178 86 (79) (152) (289) 337 153 73 (67) (127) (236)
Net sensitivity $ 11 $ 5 $ 2 $ (2) $ (5) $ (21) $ 3 $ — $ — $ (1) $ (2) $ (12)

98 U.S. Bancorp 2023 Annual Report

 The fair value of MSRs and their sensitivity to changes in rate or jumbo mortgage loans. The HFA servicing portfolio is
interest rates is influenced by the mix of the servicing comprised of loans originated under state and local housing
portfolio and characteristics of each segment of the portfolio. authority program guidelines which assist purchases by first-
The Company’s servicing portfolio consists of the distinct time or low- to moderate-income homebuyers through a
portfolios of government-insured mortgages, conventional favorable rate subsidy, down payment and/or closing cost
mortgages and Housing Finance Agency (“HFA”) assistance on government- and conventional-insured
mortgages. The servicing portfolios are predominantly mortgages.
comprised of fixed-rate agency loans with limited adjustable-

A summary of the Company’s MSRs and related characteristics by portfolio as of December 31 follows:

2023 2022

(Dollars in Millions) HFA Government Conventional(d) Total HFA Government Conventional(d) Total
(a)
Servicing portfolio $48,286 $ 25,996 $ 151,056 $225,338 $44,071 $ 23,141 $ 172,541 $239,753
Fair value $ 769 $ 507 $ 2,101 $ 3,377 $ 725 $ 454 $ 2,576 $ 3,755
Value (bps)(b) 159 195 139 150 165 196 149 157
Weighted-average servicing fees
(bps) 36 44 26 30 36 42 27 30
Multiple (value/servicing fees) 4.45 4.41 5.41 5.00 4.56 4.69 5.52 5.20
Weighted-average note rate 4.56% 4.23% 3.81% 4.02% 4.16% 3.81% 3.52% 3.67%
Weighted-average age (in years) 4.3 5.5 4.3 4.4 4.0 5.7 3.7 3.9
Weighted-average expected
prepayment (constant
prepayment rate) 10.5% 11.1% 9.1% 9.6% 7.4% 8.5% 7.8% 7.8%
Weighted-average expected life
(in years) 7.2 6.5 7.0 7.0 8.8 7.6 7.5 7.7
Weighted-average option
adjusted spread(c) 5.4% 5.9% 4.6% 4.9% 7.6% 6.9% 5.1% 5.8%
(a) Represents principal balance of mortgages having corresponding MSR asset.
(b) Calculated as fair value divided by the servicing portfolio.
(c) Option adjusted spread is the incremental spread added to the risk-free rate to reflect optionality and other risk inherent in the MSRs.
(d) Represents loans sold primarily to GSEs.

NOTE 11 Intangible Assets

Intangible assets consisted of the following:

At December 31 (Dollars in Millions) 2023 2022

Goodwill $ 12,489 $ 12,373
Merchant processing contracts 124 155
Core deposit benefits 2,134 2,706
Mortgage servicing rights 3,377 3,755
Trust relationships 41 50
Other identified intangibles 408 489
Total $ 18,573 $ 19,528

Aggregate amortization expense consisted of the following:

Year Ended December 31 (Dollars in Millions) 2023 2022 2021
Merchant processing contracts $ 31 $ 38 $ 45
Core deposit benefits 481 53 15
Trust relationships 10 12 10
Other identified intangibles 114 112 89
Total $ 636 $ 215 $ 159

99
The estimated amortization expense for the next five years is as follows:
(Dollars in Millions)
2024 $ 566
2025 484
2026 415
2027 344
2028 281

The following table reflects the changes in the carrying value of goodwill for the years ended December 31, 2023, 2022 and 2021:

Wealth,
Corporate,
Commercial and Consumer and Treasury and
Institutional Business Payment Corporate Consolidated
(Dollars in Millions) Banking Banking Services Support Company
Balance at December 31, 2020 $ 3,266 $ 3,475 $ 3,177 $ — $ 9,918
Goodwill acquired 144 35 192 — 371
Foreign exchange translation and other 263 (265) (25) — (27)
Balance at December 31, 2021 $ 3,673 $ 3,245 $ 3,344 $ — $ 10,262
Goodwill acquired 918 1,220 11 — 2,149
Foreign exchange translation and other (2) — (36) — (38)
Balance at December 31, 2022 $ 4,589 $ 4,465 $ 3,319 $ — $ 12,373
Goodwill acquired 235 (139) — — 96
Foreign exchange translation and other 1 — 19 — 20
Balance at December 31, 2023 $ 4,825 $ 4,326 $ 3,338 $ — $ 12,489

NOTE 12 Deposits
The composition of deposits at December 31 was as follows:

(Dollars in Millions) 2023 2022

Noninterest-bearing deposits $ 89,989 $ 137,743
Interest-bearing deposits
Interest checking 127,453 134,491
Money market savings 199,378 148,014
Savings accounts 43,219 71,782
Time deposits 52,273 32,946
Total interest-bearing deposits 422,323 387,233
Total deposits $ 512,312 $ 524,976

The maturities of time deposits outstanding at December 31, 2023 were as follows:
(Dollars in Millions)
2024 $ 44,570
2025 6,448
2026 798
2027 252
2028 197
Thereafter 8
Total $ 52,273

100 U.S. Bancorp 2023 Annual Report

 NOTE 13 Short-Term Borrowings
Short-term borrowings at December 31 consisted of the following:
(Dollars in Millions) 2023 2022
Federal funds purchased $ 248 $ 226
Securities sold under agreements to repurchase 3,576 1,431
Commercial paper 7,773 8,145
Other short-term borrowings 3,682 21,414 (a)

Total $ 15,279 $ 31,216

(a) Balance primarily includes short-term FHLB advances.

NOTE 14 Long-Term Debt

Long-term debt (debt with original maturities of more than one year) at December 31 consisted of the following:

(Dollars in Millions) Rate Type Rate(a) Maturity Date 2023 2022

U.S. Bancorp (Parent Company)

Subordinated notes Fixed 3.600% 2024 $ 1,000 $ 1,000
Fixed 7.500% 2026 199 199
Fixed 3.100% 2026 1,000 1,000
Fixed 3.000% 2029 1,000 1,000
Fixed 4.967% 2033 1,300 1,300
Fixed 2.491% 2036 1,300 1,300
Medium-term notes Fixed .850% - 6.787% 2024 - 2034 26,618 18,468
Other(b) 1,915 2,716
Subtotal 34,332 26,983
Subsidiaries
Federal Home Loan Bank advances Fixed 1.860% - 8.250% 2025 - 2026 9,051 2,051
Floating 6.080% - 6.100% 2025 - 2026 3,000 3,000
Bank notes Fixed 2.050% - 5.550% 2025 - 2032 2,289 4,800
Floating —% - 5.398% 2046 - 2062 1,324 1,352
Other(c) 1,484 1,643
Subtotal 17,148 12,846
Total $ 51,480 $ 39,829

(a) Weighted-average interest rates of medium-term notes, Federal Home Loan Bank advances and bank notes were 3.89 percent, 4.94 percent and 3.27 percent, respectively.
(b) Includes $2.1 billion and $2.9 billion at December 31, 2023 and 2022, respectively, of discounted noninterest-bearing additional cash received by the Company upon close of the
MUB acquisition to be delivered to MUFG on or prior to December 1, 2027, discounted at the Company’s 5-year unsecured borrowing rate as of the acquisition date, as well as
debt issuance fees and unrealized gains and losses and deferred amounts relating to derivative instruments.
(c) Includes consolidated community development and tax-advantaged investment VIEs, finance lease obligations, debt issuance fees, and unrealized gains and losses and deferred
amounts relating to derivative instruments.

The Company has arrangements with the Federal Home Maturities of long-term debt outstanding at December 31,
Loan Bank and Federal Reserve Bank whereby the 2023, were:
Company could have borrowed an additional $215.8 billion
and $114.8 billion at December 31, 2023 and 2022, Parent
(Dollars in Millions) Company Consolidated
respectively.
2024 $ 5,475 $ 6,663
2025 2,030 6,559
2026 3,906 13,381
2027 4,763 4,796
2028 3,824 3,835
Thereafter 14,334 16,246
Total $ 34,332 $ 51,480

101
 NOTE 15 Shareholders' Equity
At December 31, 2023 and 2022, the Company had December 31, 2023 and 2022, respectively. The Company
authority to issue 4 billion shares of common stock and 50 had 27 million shares reserved for future issuances,
million shares of preferred stock. The Company had 1.6 primarily under its stock incentive plans at December 31,
billion and 1.5 billion shares of common stock outstanding at 2023.

The number of shares issued and outstanding and the carrying amount of each outstanding series of the Company’s preferred
stock at December 31 were as follows:
2023 2022
Shares Shares
Issued and Liquidation Carrying Issued and Liquidation Carrying
(Dollars in Millions) Outstanding Preference Discount Amount Outstanding Preference Discount Amount
Series A 12,510 $ 1,251 $ 145 $ 1,106 12,510 $ 1,251 $ 145 $ 1,106
Series B 40,000 1,000 — 1,000 40,000 1,000 — 1,000
Series J 40,000 1,000 7 993 40,000 1,000 7 993
Series K 23,000 575 10 565 23,000 575 10 565
Series L 20,000 500 14 486 20,000 500 14 486
Series M 30,000 750 21 729 30,000 750 21 729
Series N 60,000 1,500 8 1,492 60,000 1,500 8 1,492
Series O 18,000 450 13 437 18,000 450 13 437
(a)
Total preferred stock 243,510 $ 7,026 $ 218 $ 6,808 243,510 $ 7,026 $ 218 $ 6,808
(a) The par value of all shares issued and outstanding at December 31, 2023 and 2022, was $1.00 per share.

Prior to July 1, 2023, dividends for the Company’s excluding, January 15, 2027, and thereafter will accrue and be
outstanding Series A Preferred Stock, Series B Preferred payable quarterly at a floating rate per annum equal to the
Stock and Series J Preferred Stock (each as defined below) five-year treasury rate plus 2.541 percent. The Series N
were calculated based on LIBOR. On July 1, 2023, the interest Preferred Stock is redeemable at the Company’s option, in
rate on these series of preferred stock transitioned from a whole or in part, on or after January 15, 2027. The Series N
LIBOR-based rate to a rate based on the Secured Overnight Preferred Stock is redeemable at the Company’s option, in
Financing Rate (“SOFR”), including a credit spread whole, but not in part, prior to January 15, 2027 within 90 days
adjustment, pursuant to the Adjustable Interest Rate (LIBOR) following an official administrative or judicial decision,
Act. amendment to, or change in the laws or regulations that would
During 2022, the Company issued depositary shares not allow the Company to treat the full liquidation value of the
representing an ownership interest in 18,000 shares of Series Series N Preferred Stock as Tier 1 capital for purposes of the
O Non-Cumulative Perpetual Preferred Stock with a liquidation capital adequacy guidelines of the Federal Reserve Board.
preference of $25,000 per share (the “Series O Preferred During 2021, the Company issued depositary shares
Stock”). The Series O Preferred Stock has no stated maturity representing an ownership interest in 30,000 shares of Series
and will not be subject to any sinking fund or other obligation M Non-Cumulative Perpetual Preferred Stock with a liquidation
of the Company. Dividends, if declared, will accrue and be preference of $25,000 per share (the “Series M Preferred
payable quarterly, in arrears, at a rate per annum equal to 4.50 Stock”). The Series M Preferred Stock has no stated maturity
percent. The Series O Preferred Stock is redeemable at the and will not be subject to any sinking fund or other obligation
Company’s option, in whole or in part, on or after April 15, of the Company. Dividends, if declared, will accrue and be
2027. The Series O Preferred Stock is redeemable at the payable quarterly, in arrears, at a rate per annum equal to 4.00
Company’s option, in whole, but not in part, prior to April 15, percent. The Series M Preferred Stock is redeemable at the
2027 within 90 days following an official administrative or Company’s option, in whole or in part, on or after April 15,
judicial decision, amendment to, or change in the laws or 2026. The Series M Preferred Stock is redeemable at the
regulations that would not allow the Company to treat the full Company’s option, in whole, but not in part, prior to April 15,
liquidation value of the Series O Preferred Stock as Tier 1 2026 within 90 days following an official administrative or
capital for purposes of the capital adequacy guidelines of the judicial decision, amendment to, or change in the laws or
Federal Reserve Board. regulations that would not allow the Company to treat the full
During 2021, the Company issued depositary shares liquidation value of the Series M Preferred Stock as Tier 1
representing an ownership interest in 60,000 shares of Series capital for purposes of the capital adequacy guidelines of the
N Fixed Rate Reset Non-Cumulative Perpetual Preferred Federal Reserve Board.
Stock with a liquidation preference of $25,000 per share (the During 2020, the Company issued depositary shares
“Series N Preferred Stock”). The Series N Preferred Stock has representing an ownership interest in 20,000 shares of Series
no stated maturity and will not be subject to any sinking fund L Non-Cumulative Perpetual Preferred Stock with a liquidation
or other obligation of the Company. Dividends, if declared, will preference of $25,000 per share (the “Series L Preferred
accrue and be payable quarterly, in arrears, at a rate per Stock”). The Series L Preferred Stock has no stated maturity
annum equal to 3.70 percent from the date of issuance to, but and will not be subject to any sinking fund or other obligation

102 U.S. Bancorp 2023 Annual Report

of the Company. Dividends, if declared, will accrue and be interest in 6,764 shares of Series A Preferred Stock to USB
payable quarterly, in arrears, at a rate per annum equal to 3.75 Capital IX, thereby settling the stock purchase contract
percent. The Series L Preferred Stock is redeemable at the established between the Company and USB Capital IX as part
Company’s option, in whole or in part, on or after January 15, of the 2006 issuance of USB Capital IX Income Trust
2026. The Series L Preferred Stock is redeemable at the Securities. The preferred shares were issued to USB Capital
Company’s option, in whole, but not in part, prior to January IX for the purchase price specified in the stock forward
15, 2026 within 90 days following an official administrative or purchase contract. The Series A Preferred Stock has a
judicial decision, amendment to, or change in the laws or liquidation preference of $100,000 per share, no stated
regulations that would not allow the Company to treat the full maturity and will not be subject to any sinking fund or other
liquidation value of the Series L Preferred Stock as Tier 1 obligation of the Company. Dividends, if declared, will accrue
capital for purposes of the capital adequacy guidelines of the and be payable quarterly, in arrears, at a rate per annum equal
Federal Reserve Board. to the greater of 1.02 percent above three-month CME Term
During 2018, the Company issued depositary shares SOFR plus a credit spread adjustment of 0.26161 percent, or
representing an ownership interest in 23,000 shares of Series 3.50 percent. The Series A Preferred Stock is redeemable at
K Non-Cumulative Perpetual Preferred Stock with a liquidation the Company’s option, subject to prior approval by the Federal
preference of $25,000 per share (the “Series K Preferred Reserve Board.
Stock”). The Series K Preferred Stock has no stated maturity During 2006, the Company issued depositary shares
and will not be subject to any sinking fund or other obligation representing an ownership interest in 40,000 shares of Series
of the Company. Dividends, if declared, will accrue and be B Non-Cumulative Perpetual Preferred Stock with a liquidation
payable quarterly, in arrears, at a rate per annum equal to 5.50 preference of $25,000 per share (the “Series B Preferred
percent. The Series K Preferred Stock is redeemable at the Stock”). The Series B Preferred Stock has no stated maturity
Company’s option, in whole or in part. and will not be subject to any sinking fund or other obligation
During 2017, the Company issued depositary shares of the Company. Dividends, if declared, will accrue and be
representing an ownership interest in 40,000 shares of Series payable quarterly, in arrears, at a rate per annum equal to the
J Non-Cumulative Perpetual Preferred Stock with a liquidation greater of 0.60 percent above three-month CME Term SOFR
preference of $25,000 per share (the “Series J Preferred plus a credit spread adjustment of 0.26161 percent, or 3.50
Stock”). The Series J Preferred Stock has no stated maturity percent. The Series B Preferred Stock is redeemable at the
and will not be subject to any sinking fund or other obligation Company’s option, subject to the prior approval of the Federal
of the Company. Dividends, if declared, will accrue and be Reserve Board.
payable semiannually, in arrears, at a rate per annum equal to During 2023, 2022 and 2021, the Company repurchased
5.300 percent from the date of issuance to, but excluding, April shares of its common stock under various authorizations
15, 2027, and thereafter will accrue and be payable quarterly approved by its Board of Directors. The Company suspended
at a floating rate per annum equal to 2.914 percent above all common stock repurchases at the beginning of the third
three-month CME Term SOFR plus a credit spread adjustment quarter of 2021, except for those done exclusively in
of 0.26161 percent. The Series J Preferred Stock is connection with its stock-based compensation programs, due
redeemable at the Company’s option, in whole or in part, on or to its acquisition of MUB. The Company will evaluate its future
after April 15, 2027. The Series J Preferred Stock is share repurchases in connection with potential capital
redeemable at the Company’s option, in whole, but not in part, requirements given proposed regulatory capital rules and the
prior to April 15, 2027 within 90 days following an official related landscape.
administrative or judicial decision, amendment to, or change in
the laws or regulations that would not allow the Company to The following table summarizes the Company’s common stock
treat the full liquidation value of the Series J Preferred Stock repurchased in each of the last three years:
as Tier 1 capital for purposes of the capital adequacy
guidelines of the Federal Reserve Board. (Dollars and Shares in Millions) Shares Value
During 2010, the Company issued depositary shares 2023 1 $ 62
representing an ownership interest in 5,746 shares of Series A
2022 1 69
Non-Cumulative Perpetual Preferred Stock (the “Series A
Preferred Stock”) to investors, in exchange for their portion of 2021 28 1,556
USB Capital IX Income Trust Securities. During 2011, the
Company issued depositary shares representing an ownership

103
Shareholders’ equity is affected by transactions and valuations of asset and liability positions that require adjustments to
accumulated other comprehensive income (loss). The reconciliation of the transactions affecting accumulated other
comprehensive income (loss) included in shareholders’ equity for the years ended December 31, is as follows:

Unrealized
Gains
(Losses) on
Investment
Securities
Unrealized Transferred
Gains From
(Losses) on Unrealized Unrealized
Investment Available- Gains Gains
Securities For-Sale to (Losses) on (Losses) on Foreign
Available- Held-To- Derivative Retirement Currency
(Dollars in Millions) For-Sale Maturity Hedges Plans Translation Total

2023
Balance at beginning of period $ (6,378) $ (3,933) $ (114) $ (939) $ (43) $ (11,407)
Changes in unrealized gains (losses) 1,500 — (252) (262) — 986
Foreign currency translation adjustment(a) — — — — 21 21
Reclassification to earnings of realized (gains) losses 145 530 80 (7) — 748
Applicable income taxes (418) (134) 44 70 (6) (444)
Balance at end of period $ (5,151) $ (3,537) $ (242) $ (1,138) $ (28) $ (10,096)
2022
Balance at beginning of period $ 540 $ (935) $ (85) $ (1,426) $ (37) $ (1,943)
Changes in unrealized gains (losses) (13,656) — (75) 526 — (13,205)
Transfer of securities from available-for-sale to held-to-maturity 4,413 (4,413) — — — —
Foreign currency translation adjustment(a) — — — — (10) (10)
Reclassification to earnings of realized (gains) losses (20) 400 36 128 — 544
Applicable income taxes 2,345 1,015 10 (167) 4 3,207
Balance at end of period $ (6,378) $ (3,933) $ (114) $ (939) $ (43) $ (11,407)
2021
Balance at beginning of period $ 2,417 $ — $ (189) $ (1,842) $ (64) $ 322
Changes in unrealized gains and losses (3,698) — 125 400 — (3,173)
Transfer of securities from available-for-sale to held-to-maturity 1,289 (1,289) — — — —
Foreign currency translation adjustment(a) — — — — 35 35
Reclassification to earnings of realized (gains) losses (103) 36 14 157 — 104
Applicable income taxes 635 318 (35) (141) (8) 769
Balance at end of period $ 540 $ (935) $ (85) $ (1,426) $ (37) $ (1,943)
(a) Represents the impact of changes in foreign currency exchange rates on the Company’s investment in foreign operations and related hedges.

104 U.S. Bancorp 2023 Annual Report

Additional detail about the impact to net income for items reclassified out of accumulated other comprehensive income (loss) and
into earnings for the years ended December 31 is as follows:

Impact to Net Income

Affected Line Item in the
(Dollars in Millions) 2023 2022 2021 Consolidated Statement of Income
Unrealized gains (losses) on investment securities available-for-sale
Realized gains (losses) on sale of investment securities $ (145) $ 20 $ 103 Securities gains (losses), net
37 (5) (26) Applicable income taxes
(108) 15 77 Net-of-tax
Unrealized gains (losses) on investment securities transferred from
available-for-sale to held-to-maturity
Amortization of unrealized gains (losses) (530) (400) (36) Interest income
134 119 9 Applicable income taxes
(396) (281) (27) Net-of-tax
Unrealized gains (losses) on derivative hedges
Realized gains (losses) on derivative hedges (80) (36) (14) Net interest income
21 9 4 Applicable income taxes
(59) (27) (10) Net-of-tax
Unrealized gains (losses) on retirement plans
Actuarial gains (losses) and prior service cost (credit) amortization 7 (128) (157) Other noninterest expense
(2) 33 40 Applicable income taxes
5 (95) (117) Net-of-tax
Total impact to net income $ (558) $ (388) $ (77)

Regulatory Capital The Company uses certain measures exposures, such as unfunded loan commitments, letters of
defined by bank regulatory agencies to assess its capital. The credit, and derivative contracts. Beginning in 2022, the
regulatory capital requirements effective for the Company Company began to phase into its regulatory capital
follow Basel III, with the Company being subject to calculating requirements the cumulative deferred impact of its 2020
its capital adequacy as a percentage of risk-weighted assets adoption of the accounting guidance related to the impairment
under the standardized approach. of financial instruments based on the CECL methodology plus
Tier 1 capital is considered core capital and includes 25 percent of its quarterly credit reserve increases over the
common shareholders’ equity adjusted for the aggregate past two years. This cumulative deferred impact will be phased
impact of certain items included in other comprehensive into the Company’s regulatory capital through 2024,
income (loss) (“common equity tier 1 capital”), plus qualifying culminating with a fully phased in regulatory capital calculation
preferred stock, trust preferred securities and noncontrolling beginning in 2025.
interests in consolidated subsidiaries subject to certain The Company is also subject to leverage ratio
limitations. Total risk-based capital includes Tier 1 capital and requirements, which is defined as Tier 1 capital as a
other items such as subordinated debt and the allowance for percentage of adjusted average assets under the standardized
credit losses. Capital measures are stated as a percentage of approach and Tier 1 capital as a percentage of total on- and
risk-weighted assets, which are measured based on their off-balance sheet leverage exposure under more risk-sensitive
perceived credit risks and include certain off-balance sheet advanced approaches.

105
The following table provides a summary of the regulatory capital requirements in effect, along with the actual components and
ratios for the Company and its bank subsidiaries, at December 31:
MUFG Union
Bank National
U.S. Bancorp U.S. Bank National Association Association(a)
(Dollars in Millions) 2023 2022 2023 2022 2022

Basel III Standardized Approach:

Common equity tier 1 capital $ 44,947 $ 41,560 $ 58,194 $ 46,681 $ 10,888
Tier 1 capital 52,199 48,813 58,638 47,127 10,888
Total risk-based capital 61,921 59,015 68,817 56,736 11,565
Risk-weighted assets 453,390 496,500 445,829 436,764 58,641
Common equity tier 1 capital as a percent of risk-weighted assets 9.9% 8.4% 13.1% 10.7% 18.6%
Tier 1 capital as a percent of risk-weighted assets 11.5 9.8 13.2 10.8 18.6
Total risk-based capital as a percent of risk-weighted assets 13.7 11.9 15.4 13.0 19.7
Tier 1 capital as a percent of adjusted quarterly average assets
(leverage ratio) 8.1 7.9 9.2 8.1 10.9
Tier 1 capital as a percent of total on- and off-balance sheet
leverage exposure (total leverage exposure ratio) 6.6 6.4 7.5 6.5 10.1

Well-
Minimum(b) Capitalized

Bank Regulatory Capital Requirements

Common equity tier 1 capital as a percent of risk-weighted assets 7.0% 6.5%
Tier 1 capital as a percent of risk-weighted assets 8.5 8.0
Total risk-based capital as a percent of risk-weighted assets 10.5 10.0
Tier 1 capital as a percent of adjusted quarterly average assets (leverage ratio) 4.0 5.0
Tier 1 capital as a percent of total on- and off-balance sheet leverage exposure (total leverage exposure ratio)(c) 3.0 3.0
(a) MUFG Union Bank National Association merged into U.S. Bank National Association during 2023.
(b) The minimum common equity tier 1 capital, tier 1 capital and total risk-based capital ratio requirements reflect a stress capital buffer requirement of 2.5 percent. Banks and financial
services holding companies must maintain minimum capital levels, including a stress capital buffer requirement, to avoid limitations on capital distributions and certain discretionary
compensation payments.
(c) A minimum "well-capitalized" threshold does not apply to U.S. Bancorp for this ratio as it is not formally defined under applicable banking regulations for bank holding companies.

Noncontrolling interests principally represent third-party Realty Corp. has not declared a dividend on the Series A
investors’ interests in consolidated entities, including preferred Preferred Securities before the dividend payment date for any
stock of consolidated subsidiaries. During 2006, the dividend period, such dividend shall not be cumulative and
Company’s banking subsidiary formed USB Realty Corp., a shall cease to accrue and be payable, and USB Realty Corp.
real estate investment trust, for the purpose of issuing 5,000 will have no obligation to pay dividends accrued for such
shares of Fixed-to-Floating Rate Exchangeable Non- dividend period, whether or not dividends on the Series A
cumulative Perpetual Series A Preferred Stock with a Preferred Securities are declared for any future dividend
liquidation preference of $100,000 per share (“Series A period.
Preferred Securities”) to third-party investors. Dividends on the The Series A Preferred Securities will be redeemable, in
Series A Preferred Securities, if declared, will accrue and be whole or in part, at the option of USB Realty Corp. on each
payable quarterly, in arrears, at a rate per annum equal to fifth anniversary after the dividend payment date occurring in
1.147 percent above three-month CME Term SOFR plus a January 2012. Any redemption will be subject to the approval
credit spread adjustment of 0.26161 percent. Prior to July 1, of the Office of the Comptroller of the Currency (“OCC”).
2023, dividends for the Series A Preferred Securities were During 2016, the Company purchased 500 shares of the
calculated based on LIBOR. On July 1, 2023, the interest rate Series A Preferred Securities held by third-party investors. As
on these securities transitioned from a LIBOR-based rate to a of December 31, 2023, 4,500 shares of the Series A Preferred
SOFR-based rate, including a credit spread adjustment, Securities remain outstanding.
pursuant to the Adjustable Interest Rate (LIBOR) Act. If USB

106 U.S. Bancorp 2023 Annual Report

 NOTE 16 Earnings Per Share
The components of earnings per share were:
Year Ended December 31
(Dollars and Shares in Millions, Except Per Share Data) 2023 2022 2021
Net income attributable to U.S. Bancorp $ 5,429 $ 5,825 $ 7,963
Preferred dividends (350) (296) (303)
Impact of preferred stock call and redemption — — (17) (a)

Earnings allocated to participating stock awards (28) (28) (38)

Net income applicable to U.S. Bancorp common shareholders $ 5,051 $ 5,501 $ 7,605
Average common shares outstanding 1,543 1,489 1,489
Net effect of the exercise and assumed purchase of stock awards — 1 1
Average diluted common shares outstanding 1,543 1,490 1,490
Earnings per common share $ 3.27 $ 3.69 $ 5.11
Diluted earnings per common share $ 3.27 $ 3.69 $ 5.10
(a) Represents stock issuance costs originally recorded in preferred stock upon the issuance of the Company’s Series I and Series F Preferred Stock that were reclassified to retained
earnings on the date the Company announced its intent to redeem the outstanding shares.

Options outstanding at December 31, 2023 and 2022, to purchase 3 million and 1 million common shares, respectively, were
not included in the computation of diluted earnings per share for the years ended December 31, 2023 and 2022, because they
were antidilutive.

NOTE 17 Employee Benefits

Employee Retirement Savings Plan The Company has a cash balance pay credits based on eligible pay multiplied by a
defined contribution retirement savings plan that covers percentage determined by their age and/or years of service, as
substantially all its employees. Qualified employees are defined by the plan documents. Participants also receive an
allowed to contribute up to 75 percent of their annual annual interest credit. Generally, employees become vested
compensation, subject to Internal Revenue Service limits, upon completing three years of vesting service. The Company
through salary deductions under Section 401(k) of the Internal did not contribute to its qualified pension plans in 2023 and
Revenue Code. Employee contributions are invested at their 2022 and does not expect to contribute to the plans in 2024.
direction among a variety of investment alternatives. Employee The Company also maintains two non-qualified plans that
contributions are 100 percent matched by the Company, up to are unfunded and provide benefits to certain employees. The
four percent of each employee’s eligible annual compensation. assumptions used in computing the accumulated benefit
The Company’s matching contribution vests immediately and obligation, the projected benefit obligation and net pension
is invested in the same manner as each employee’s future expense are substantially consistent with those assumptions
contribution elections. Total expense for the Company’s used for the funded qualified plans. In 2024, the Company
matching contributions was $254 million, $211 million and expects to contribute approximately $27 million to its non-
$213 million in 2023, 2022 and 2021, respectively. qualified pension plans, which equals the 2024 expected
benefit payments.
Pension and Postretirement Welfare Plans The Company
has tax qualified noncontributory defined benefit pension Postretirement Welfare Plans In addition to providing
plans, nonqualified pension plans and postretirement welfare pension benefits, the Company has funded and unfunded
plans. postretirement welfare plans available to certain eligible
participants based on their hire or retirement date. The plans
Pension Plans The funded tax qualified noncontributory
are closed to new participants. In 2024, the Company does not
defined benefit pension plans provide benefits to substantially
expect to contribute to its postretirement welfare plans.
all the Company’s employees. Participants receive annual

107
The following table summarizes the changes in benefit obligations and plan assets for the years ended December 31, and the
funded status and amounts recognized in the Consolidated Balance Sheet at December 31 for the pension plans:
(Dollars in Millions) 2023 2022
(a)
Change In Projected Benefit Obligation
Benefit obligation at beginning of measurement period $ 6,617 $ 8,030
Service cost 223 280
Interest cost 370 248
Plan amendments (23) 2
Actuarial (gain) loss 398 (2,250)
Lump sum settlements (94) (76)
Benefit payments (213) (195)
Acquisitions — 578
(b)
Benefit obligation at end of measurement period $ 7,278 $ 6,617
Change In Fair Value Of Plan Assets
Fair value at beginning of measurement period $ 7,375 $ 8,113
Actual return on plan assets 658 (1,245)
Employer contributions 28 28
Lump sum settlements (94) (76)
Benefit payments (213) (195)
Acquisitions(c) 25 750
Fair value at end of measurement period $ 7,779 $ 7,375
Funded Status $ 501 $ 758
Components Of The Consolidated Balance Sheet
Noncurrent benefit asset $ 1,072 $ 1,286
Current benefit liability (26) (25)
Noncurrent benefit liability (545) (503)
Recognized amount $ 501 $ 758
Accumulated Other Comprehensive Income (Loss), Pretax
Net actuarial loss $ (1,607) $ (1,326)
Net prior service credit 34 12
Recognized amount $ (1,573) $ (1,314)
Note: At December 31, 2023 and 2022, the postretirement welfare plans projected benefit obligation was $49 million and $51 million, respectively, the fair value of plan assets was
$45 million and $42 million, respectively, and the amount recognized in accumulated other comprehensive income (loss), pretax was $52 million and $62 million, respectively.
(a) The increase in the projected benefit obligation for 2023 was primarily due to a lower discount rate, and the decrease for 2022 was primarily due to a higher discount rate partially
offset by the acquired MUB benefit obligations.
(b) At December 31, 2023 and 2022, the accumulated benefit obligation for all pension plans was $6.8 billion and $5.0 billion, respectively.
(c) The increase in plan assets was related to the 2022 MUB acquisition.

The following table provides information for pension plans with benefit obligations in excess of plan assets at December 31:
(Dollars in Millions) 2023 2022

Plans with Projected Benefit Obligations in Excess of Plan Assets

Projected benefit obligation $ 571 $ 528
Fair value of plan assets — —
Plans with Accumulated Benefit Obligations in Excess of Plan Assets
Accumulated benefit obligation $ 530 $ 487
Fair value of plan assets — —

108 U.S. Bancorp 2023 Annual Report

The following table sets forth the components of net periodic pension cost and other amounts recognized in accumulated other
comprehensive income (loss) for the years ended December 31 for the pension plans:
(Dollars in Millions) 2023 2022 2021

Components Of Net Periodic Pension Cost

Service cost $ 223 $ 280 $ 265
Interest cost 370 248 219
Expected return on plan assets (546) (481) (450)
Prior service credit amortization (1) (2) (2)
Actuarial loss amortization 5 140 169
Net periodic pension cost $ 51 $ 185 $ 201
Other Changes In Plan Assets And Benefit Obligations Recognized In Other
Comprehensive Income (Loss)
Net actuarial (loss) gain arising during the year $ (286) $ 523 $ 398
Net actuarial loss amortized during the year 5 140 169
Net prior service credit (cost) arising during the year 23 (2) —
Net prior service credit amortized during the year (1) (2) (2)
Total recognized in other comprehensive income (loss) $ (259) $ 659 $ 565
Total recognized in net periodic pension cost and other comprehensive income (loss) $ (310) $ 474 $ 364
Note: The net periodic benefit for the postretirement welfare plans was $10 million, $9 million and $9 million for the years end December 31, 2023, 2022 and 2021, respectively. The
total of other amounts recognized as other comprehensive loss was $10 million, $5 million and $8 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The following table sets forth weighted-average assumptions used to determine the pension plans projected benefit obligations at
December 31:
2023 2022
Discount rate 5.12% 5.55%
Cash balance interest crediting rate 3.04 3.36
Rate of compensation increase(a) 3.72 4.13
(a) Determined on an active liability-weighted basis.

The following table sets forth weighted-average assumptions used to determine net periodic pension cost for the years ended
December 31:
2023 2022 2021
Discount rate 5.55% 3.00% 2.75%
Cash balance interest crediting rate 3.36 3.00 3.00
Expected return on plan assets(a) 6.75 6.50 6.50
Rate of compensation increase(b) 4.13 3.56 3.56
(a) With the help of an independent pension consultant, the Company considers several sources when developing its expected long-term rates of return on plan assets assumptions,
including, but not limited to, past returns and estimates of future returns given the plans’ asset allocation, economic conditions, and peer group long-term rate of return information.
The Company determines its expected long-term rates of return reflecting current economic conditions and plan assets.
(b) Determined on an active liability-weighted basis.

109
Investment Policies and Asset Allocation In establishing At December 31, 2023 and 2022, plan assets included
its investment policies and asset allocation strategies, the an asset management arrangement with a related party
Company considers expected returns and the volatility totaling $62.6 million and $87.8 million, respectively.
associated with different strategies. An independent In accordance with authoritative accounting guidance,
consultant performs modeling that projects numerous the Company groups plan assets into a three-level hierarchy
outcomes using a broad range of possible scenarios, for valuation techniques used to measure their fair value
including a mix of possible rates of inflation and economic based on whether the valuation inputs are observable or
growth. Starting with current economic information, the unobservable. Refer to Note 22 for further discussion on
model bases its projections on past relationships between these levels.
inflation, fixed income rates and equity returns when these The assets of the qualified pension plans include
types of economic conditions have existed over the previous investments in equity and U.S. Treasury securities whose
30 years, both in the United States and in foreign countries. fair values are determined based on quoted prices in active
Estimated future returns and other actuarially determined markets and are classified within Level 1 of the fair value
adjustments are also considered in calculating the estimated hierarchy. The qualified pension plans also invest in U.S.
return on assets. agency, corporate and municipal debt securities, which are
Generally, based on historical performance of the various all valued based on observable market prices or data by
investment asset classes, investments in equities have third party pricing services, and mutual funds which are
outperformed other investment classes but are subject to valued based on quoted net asset values provided by the
higher volatility. In an effort to minimize volatility, while trustee of the fund; these assets are classified as Level 2.
recognizing the long-term up-side potential of investing in Additionally, the qualified pension plans invest in certain
equities, the Committee has determined that a target asset assets that are valued based on net asset values as a
allocation of 35 percent long duration bonds, 30 percent practical expedient, including investments in collective
global equities, 10 percent real assets, 10 percent private investment funds, hedge funds, and private equity funds; the
equity funds, 5 percent domestic mid-small cap equities, 5 net asset values are provided by the fund trustee or
percent emerging markets equities, and 5 percent hedge administrator and are not classified in the fair value
funds is appropriate. hierarchy.

The following table summarizes qualified pension plans investment assets measured at fair value at December 31:

2023 2022
(Dollars in Millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Cash and cash equivalents $ 68 $ — $ — $ 68 $ 202 $ — $ — $ 202
Debt securities — — — — 961 855 — 1,816
Mutual funds
Debt securities — — — — — 382 — 382
Emerging markets equity securities — — — — — 156 — 156
Other — — — — — — 6 6
$ 68 $ — $ — 68 $ 1,163 $ 1,393 $ 6 2,562
Plan investment assets not classified in fair value
hierarchy(a):
Collective investment funds
Domestic equity securities 1,546 1,494
Domestic mid-small cap equity securities 406 313
International equity securities 981 620
Domestic real estate securities 142 144
Fixed income 2,295 —
Real estate funds(b) 746 763
Hedge funds(c) 412 451
(d)
Private equity funds 1,183 1,028
Total plan investment assets at fair value $ 7,779 $ 7,375
(a) These investments are valued based on net asset value per share as a practical expedient; fair values are provided to reconcile to total investment assets of the plans at fair value.
(b) This category consists of several investment strategies diversified across several real estate managers.
(c) This category consists of several investment strategies diversified across several hedge fund managers.
(d) This category consists of several investment strategies diversified across several private equity fund managers.

110 U.S. Bancorp 2023 Annual Report

The following table summarizes the changes in fair value for qualified pension plans investment assets measured at fair value
using significant unobservable inputs (Level 3) for the years ended December 31:
2023 2022 2021
(Dollars in Millions) Other Other Other
Balance at beginning of period $ 6 $ 4 $ 6
Unrealized gains (losses) relating to assets still held at end of year — 2 (2)
Purchases, sales, and settlements, net (6) — —
Balance at end of period $ — $ 6 $ 4

The following benefit payments are expected to be paid from the pension plans for the years ended December 31:
(Dollars in Millions)
2024 $ 332
2025 383
2026 391
2027 416
2028 430
2029-2033 2,439

111
 NOTE 18 Stock-Based Compensation
As part of its employee and director compensation over three to five years and are subject to forfeiture if certain
programs, the Company currently may grant certain stock vesting requirements are not met. Stock incentive plans of
awards under the provisions of its stock incentive plan. The acquired companies are generally terminated at the merger
plan provides for grants of options to purchase shares of closing dates. Participants under such plans receive the
common stock at a fixed price equal to the fair value of the Company’s common stock, options to buy the Company’s
underlying stock at the date of grant. Option grants are common stock, or long term cash incentives, based on the
generally exercisable up to ten years from the date of grant. conversion terms of the various merger agreements. At
In addition, the plan provides for grants of shares of December 31, 2023, there were 15 million shares (subject to
common stock or stock units that are subject to restriction adjustment for forfeitures) available for grant under the
on transfer prior to vesting. Most stock and unit awards vest Company’s stock incentive plan.

Stock Option Awards

The following is a summary of stock options outstanding and exercised under prior and existing stock incentive plans of the
Company:
Weighted-
Average
Stock Weighted- Remaining Aggregate
Options/ Average Contractual Intrinsic Value
Year Ended December 31 Shares Exercise Price Term (in millions)

2023
Number outstanding at beginning of period 3,253,090 $ 44.42
Exercised (399,329) 38.15
Cancelled(a) (15,476) 47.88
Number outstanding at end of period(b) 2,838,285 $ 45.28 2.0 $ —
Exercisable at end of period 2,838,285 $ 45.28 2.0 $ —
2022
Number outstanding at beginning of period 3,890,131 $ 42.58
Exercised (624,729) 32.87
Cancelled(a) (12,312) 50.97
Number outstanding at end of period(b) 3,253,090 $ 44.42 2.7 $ —
Exercisable at end of period 3,253,090 $ 44.42 2.7 $ —
2021
Number outstanding at beginning of period 5,180,391 $ 40.38
Exercised (1,281,646) 33.66
Cancelled(a) (8,614) 48.20
Number outstanding at end of period(b) 3,890,131 $ 42.58 3.3 $ 53
Exercisable at end of period 3,890,131 $ 42.58 3.3 $ 53
Note: The Company did not grant any stock option awards during 2023, 2022, and 2021.
(a) Options cancelled include both non-vested (i.e., forfeitures) and vested options.
(b) Outstanding options include stock-based awards that may be forfeited in future periods. The impact of the estimated forfeitures is reflected in compensation expense.

Stock-based compensation expense is based on the characteristics that differ from those of traded options,
estimated fair value of the award at the date of grant or including vesting provisions and trading limitations that
modification. The fair value of each option award is impact their liquidity, the determined value used to measure
estimated on the date of grant using the Black-Scholes compensation expense may vary from the actual fair value
option-pricing model, requiring the use of subjective of the employee stock options. To satisfy option exercises,
assumptions. Because employee stock options have the Company predominantly uses treasury stock.

112 U.S. Bancorp 2023 Annual Report

The following summarizes certain stock option activity of the Company:

Year Ended December 31 (Dollars in Millions) 2023 2022 2021

Fair value of options vested $ — $ — $ 3
Intrinsic value of options exercised 2 15 27
Cash received from options exercised 15 21 43
Tax benefit realized from options exercised 1 4 7

Additional information regarding stock options outstanding as of December 31, 2023, is as follows:
Outstanding Options Exercisable Options
Weighted-
Average Weighted- Weighted-
Remaining Average Average
Contractual Exercise Exercise
Range of Exercise Prices Shares Life (Years) Price Shares Price
$35.01—$40.00 1,008,046 2.1 $ 39.49 1,008,046 $ 39.49
$40.01—$45.00 988,880 0.8 42.95 988,880 42.95
$45.01—$50.00 — — — — —
$50.01—$55.01 841,359 3.1 54.96 841,359 54.96

2,838,285 2.0 $ 45.28 2,838,285 $ 45.28

Restricted Stock and Unit Awards

A summary of the status of the Company’s restricted shares of stock and unit awards is presented below:
2023 2022 2021
Weighted- Weighted- Weighted-
Average Grant- Average Grant- Average Grant-
Date Fair Date Fair Date Fair
Year Ended December 31 Shares Value Shares Value Shares Value
Outstanding at beginning of period 6,880,826 $ 52.59 6,812,753 $ 51.04 6,343,313 $ 51.38
Granted 5,565,634 45.87 4,109,793 55.62 4,512,995 52.54
Vested (3,872,874) 52.05 (3,690,666) 52.88 (3,793,978) 53.27
Cancelled (257,015) 50.00 (351,054) 54.95 (249,577) 52.83
Outstanding at end of period 8,316,571 $ 48.42 6,880,826 $ 52.59 6,812,753 $ 51.04

The total fair value of shares vested was $180 million, and $155 million for the years ended December 31, 2023,
$198 million and $191 million for the years ended 2022 and 2021, respectively. As of December 31, 2023,
December 31, 2023, 2022 and 2021, respectively. Stock- there was $175 million of total unrecognized compensation
based compensation expense was $224 million, $202 cost related to nonvested share-based arrangements
million and $207 million for the years ended December 31, granted under the plans. That cost is expected to be
2023, 2022 and 2021, respectively. On an after-tax basis, recognized over a weighted-average period of 1.8 years as
stock-based compensation was $167 million, $152 million compensation expense.

113
 NOTE 19 Income Taxes
The components of income tax expense were:

Year Ended December 31 (Dollars in Millions) 2023 2022 2021

Federal
Current $ 1,434 $ 1,366 $ 1,203
Deferred (326) (108) 469
Federal income tax 1,108 1,258 1,672
State
Current 482 401 398
Deferred (183) (196) 111
State income tax 299 205 509
Total income tax provision $ 1,407 $ 1,463 $ 2,181

A reconciliation of expected income tax expense at the federal statutory rate of 21 percent to the Company’s applicable income tax
expense follows:
Year Ended December 31 (Dollars in Millions) 2023 2022 2021
Tax at statutory rate $ 1,442 $ 1,533 $ 2,135
State income tax, at statutory rates, net of federal tax benefit 322 305 439
Tax effect of
Tax credits and benefits, net of related expenses (272) (273) (331)
Tax-exempt income (142) (121) (114)
Revaluation of tax related assets and liabilities(a) 15 (79) —
Nondeductible legal and regulatory expenses 76 37 24
Other items (34) 61 28
Applicable income taxes $ 1,407 $ 1,463 $ 2,181
(a) The 2022 acquisition of MUB resulted in an increase in the Company’s state effective tax rate, requiring the Company to revalue its state deferred tax assets and liabilities. As a
result of this revaluation, the Company recorded an estimated net tax benefit of $79 million during 2022.

The tax effects of fair value adjustments on securities authorities that may give rise to differing interpretations of
available-for-sale, derivative instruments in cash flow these complex laws, regulations and methods. Due to the
hedges, foreign currency translation adjustments, and nature of the examination process, it generally takes years
pension and post-retirement plans are recorded directly to before these examinations are completed and matters are
shareholders’ equity as part of other comprehensive income resolved. Federal tax examinations for all years ending
(loss). through December 31, 2016 are completed and resolved.
In preparing its tax returns, the Company is required to The Company’s tax returns for the years ended December
interpret complex tax laws and regulations and utilize 31, 2017 through December 31, 2020 are under
income and cost allocation methods to determine its taxable examination by the Internal Revenue Service. The years
income. On an ongoing basis, the Company is subject to open to examination by foreign, state and local government
examinations by federal, state, local and foreign taxing authorities vary by jurisdiction.

A reconciliation of the changes in the federal, state and foreign uncertain tax position balances are summarized as follows:
Year Ended December 31 (Dollars in Millions) 2023 2022 2021
Balance at beginning of period $ 513 $ 487 $ 474
Additions for tax positions taken in prior years 141 35 14
Additions for tax positions taken in the current year 3 3 7
Exam resolutions (302) (8) (1)
Statute expirations (5) (4) (7)
Balance at end of period $ 350 $ 513 $ 487

114 U.S. Bancorp 2023 Annual Report

 The total amount of uncertain tax positions that, if 2022 and 2021 the Company recorded approximately $(11)
recognized, would impact the effective income tax rate as of million, $7 million and $5 million, respectively, in interest and
December 31, 2023, 2022 and 2021, were $276 million, penalties on uncertain tax positions.
$294 million and $285 million, respectively. The Company Deferred income tax assets and liabilities reflect the
classifies interest and penalties related to uncertain tax tax effect of estimated temporary differences between the
positions as a component of income tax expense. At carrying amounts of assets and liabilities for financial
December 31, 2023, the Company’s uncertain tax position reporting purposes and the amounts used for the same
balance included $40 million of accrued interest and items for income tax reporting purposes.
penalties. During the years ended December 31, 2023,

The significant components of the Company’s net deferred tax asset (liability) follows:

At December 31 (Dollars in Millions) 2023 2022

Deferred Tax Assets

Securities available-for-sale and financial instruments $ 3,231 $ 3,992
Federal, state and foreign net operating loss, credit carryforwards and other carryforwards 2,836 2,677
Allowance for credit losses 2,051 1,980
Loans 1,013 1,287
Accrued expenses 838 618
Obligation for operating leases 348 368
Partnerships and other investment assets 271 112
Stock compensation 87 81
Other deferred tax assets, net 370 501
Gross deferred tax assets 11,045 11,616
Deferred Tax Liabilities
Leasing activities (1,455) (1,813)
Goodwill and other intangible assets (1,450) (1,575)
Mortgage servicing rights (758) (815)
Right of use operating leases (301) (325)
Pension and postretirement benefits (115) (172)
Fixed assets (44) (125)
Other deferred tax liabilities, net (168) (234)
Gross deferred tax liabilities (4,291) (5,059)
Valuation allowance (364) (263)
Net Deferred Tax Asset $ 6,390 $ 6,294

The Company has approximately $2.7 billion of federal, At December 31, 2023, retained earnings included
state and foreign net operating loss carryforwards which approximately $102 million of base year reserves of
expire at various times beginning in 2024. A substantial acquired thrift institutions, for which no deferred federal
portion of these carryforwards relate to state-only net income tax liability has been recognized. These base year
operating losses, for which the related deferred tax asset is reserves would be recaptured if certain subsidiaries of the
subject to a full valuation allowance as the carryforwards are Company cease to qualify as a bank for federal income tax
not expected to be realized within the carryforward period. purposes. The base year reserves also remain subject to
Management has determined it is more likely than not the income tax penalty provisions that, in general, require
other net deferred tax assets could be realized through carry recapture upon certain stock redemptions of, and excess
back to taxable income in prior years, future reversals of distributions to, stockholders.
existing taxable temporary differences and future taxable
income.
In addition, the Company has $1.3 billion of federal
credit carryforwards which expire at various times through
2043 which are not subject to a valuation allowance as
management believes that it is more likely than not that the
credits will be utilized within the carryforward period.

115
NOTE 20 Derivative Instruments
In the ordinary course of business, the Company enters into $78 million (net-of-tax). All cash flow hedges were highly
derivative transactions to manage various risks and to effective for the twelve months ended December 31, 2023.
accommodate the business requirements of its customers.
Net Investment Hedges The Company uses forward
The Company recognizes all derivatives on the Consolidated
commitments to sell specified amounts of certain foreign
Balance Sheet at fair value in other assets or in other
currencies, and non-derivative debt instruments, to hedge the
liabilities. On the date the Company enters into a derivative
volatility of its net investment in foreign operations driven by
contract, the derivative is designated as either a fair value
fluctuations in foreign currency exchange rates. The carrying
hedge, cash flow hedge, net investment hedge, or a
amount of non-derivative debt instruments designated as net
designation is not made as it is a customer-related transaction,
investment hedges was $1.3 billion at December 31, 2023 and
an economic hedge for asset/liability risk management
December 31, 2022.
purposes or another stand-alone derivative created through
the Company’s operations (“free-standing derivative”). When a Other Derivative Positions The Company enters into free-
derivative is designated as a fair value, cash flow or net standing derivatives to mitigate interest rate risk and for other
investment hedge, the Company performs an assessment, at risk management purposes. These derivatives include forward
inception and, at a minimum, quarterly thereafter, to determine commitments to sell TBAs and other commitments to sell
the effectiveness of the derivative in offsetting changes in the residential mortgage loans, which are used to economically
value or cash flows of the hedged item(s). hedge the interest rate risk related to MLHFS and unfunded
mortgage loan commitments. The Company also enters into
Fair Value Hedges These derivatives are interest rate swaps
interest rate swaps, swaptions, forward commitments to buy
the Company uses to hedge the change in fair value related to
TBAs, U.S. Treasury and Eurodollar futures and options on
interest rate changes of its underlying available-for-sale
U.S. Treasury futures to economically hedge the change in the
investment securities and fixed-rate debt. Changes in the fair
fair value of the Company’s MSRs. The Company enters into
value of derivatives designated as fair value hedges, and
foreign currency forwards to economically hedge
changes in the fair value of the hedged items, are recorded in
remeasurement gains and losses the Company recognizes on
earnings.
foreign currency denominated assets and liabilities. The
Cash Flow Hedges These derivatives are interest rate swaps Company also enters into interest rate swaps as economic
the Company uses to hedge the forecasted cash flows from its hedges of fair value option elected deposits. In addition, the
underlying variable-rate loans and debt. Changes in the fair Company acts as a seller and buyer of interest rate, foreign
value of derivatives designated as cash flow hedges are exchange and commodity contracts for its customers. The
recorded in other comprehensive income (loss) until the cash Company mitigates the market and liquidity risk associated
flows of the hedged items are realized. If a derivative with these customer derivatives by entering into similar
designated as a cash flow hedge is terminated or ceases to be offsetting positions with broker-dealers, or on a portfolio basis
highly effective, the gain or loss in other comprehensive by entering into other derivative or non-derivative financial
income (loss) is amortized to earnings over the period the instruments that partially or fully offset the exposure to
forecasted hedged transactions impact earnings. If a hedged earnings from these customer-related positions. The
forecasted transaction is no longer probable, hedge Company’s customer derivatives and related hedges are
accounting is ceased and any gain or loss included in other monitored and reviewed by the Company’s Market Risk
comprehensive income (loss) is reported in earnings Committee, which establishes policies for market risk
immediately, unless the forecasted transaction is at least management, including exposure limits for each portfolio. The
reasonably possible of occurring, whereby the amounts remain Company also has derivative contracts that are created
within other comprehensive income (loss). At December 31, through its operations, including certain unfunded mortgage
2023, the Company had $242 million (net-of-tax) of realized loan commitments and swap agreements related to the sale of
and unrealized losses on derivatives classified as cash flow a portion of its Class B common and preferred shares of Visa
hedges recorded in other comprehensive income (loss), Inc. Refer to Note 23 for further information on these swap
compared with $114 million (net-of-tax) of realized and agreements. The Company uses credit derivatives to
unrealized losses at December 31, 2022. The estimated economically hedge the credit risk on its derivative positions
amount to be reclassified from other comprehensive income and loan portfolios.
(loss) into earnings during the next 12 months is a loss of

116 U.S. Bancorp 2023 Annual Report

The following table summarizes the asset and liability management derivative positions of the Company at December 31:

2023 2022

Fair Value Fair Value

Notional Notional
(Dollars in Millions) Value Assets Liabilities Value Assets Liabilities
Fair value hedges
Interest rate contracts
Receive fixed/pay floating swaps $ 12,100 $ — $ 16 $ 17,400 $ — $ 9
Pay fixed/receive floating swaps 24,139 — — 5,542 — —
Cash flow hedges
Interest rate contracts
Receive fixed/pay floating swaps 18,400 — — 14,300 — —
Net investment hedges
Foreign exchange forward contracts 854 — 10 778 — —
Other economic hedges
Interest rate contracts
Futures and forwards
Buy 5,006 29 5 3,546 10 18
Sell 4,501 7 34 7,522 20 38
Options
Purchased 6,085 237 — 11,434 346 —
Written 3,696 14 75 7,849 7 148
Receive fixed/pay floating swaps 7,029 9 3 9,215 — 3
Pay fixed/receive floating swaps 3,801 — — 9,616 — —
Foreign exchange forward contracts 734 2 5 962 2 6
Equity contracts 227 2 — 361 — 10
Credit contracts 2,620 1 — 330 — —
Other (a) 2,136 11 93 1,908 11 190
Total $ 91,328 $ 312 $ 241 $ 90,763 $ 396 $ 422
(a) Includes derivative liability swap agreements related to the sale of a portion of the Company’s Class B common and preferred shares of Visa Inc. The Visa swap agreements had a
total notional value and fair value of $2.0 billion and $91 million at December 31, 2023, respectively, compared to $1.8 billion and $190 million at December 31, 2022, respectively.
In addition, includes short-term underwriting purchase and sale commitments with total notional values of $28 million at December 31, 2023, and $13 million at December 31, 2022.

117
The following table summarizes the customer-related derivative positions of the Company at December 31:

2023 2022

Fair Value Fair Value

Notional Notional
(Dollars in Millions) Value Assets Liabilities Value Assets Liabilities
Interest rate contracts
Receive fixed/pay floating swaps $ 363,375 $ 791 $ 4,395 $ 301,690 $ 309 $ 5,689
Pay fixed/receive floating swaps 330,539 1,817 280 316,133 2,323 206
Other(a) 82,209 17 51 40,261 3 16
Options
Purchased 102,423 1,026 18 103,489 1,794 5
Written 97,690 20 1,087 99,923 6 1,779
Futures
Buy — — — 3,623 — 4
Sell — — — 2,376 8 —
Foreign exchange rate contracts
Forwards, spots and swaps 121,119 2,252 1,942 134,666 3,010 2,548
Options
Purchased 1,532 28 — 954 22 —
Written 1,532 — 28 954 — 22
Commodity contracts
Swaps 2,498 116 110 — — —
Options
Purchased 1,936 151 — — — —
Written 1,936 — 151 — — —
Credit contracts 13,053 1 6 10,765 1 8
Total $1,119,842 $ 6,219 $ 8,068 $1,014,834 $ 7,476 $ 10,277
(a) Primarily represents floating rate interest rate swaps that pay based on differentials between specified interest rate indexes.

The table below shows the effective portion of the gains (losses) recognized in other comprehensive income (loss) and the gains
(losses) reclassified from other comprehensive income (loss) into earnings (net-of-tax) for the years ended December 31:

Gains (Losses) Recognized Gains (Losses) Reclassified

in Other Comprehensive from Other Comprehensive
Income (Loss) Income (Loss) into Earnings

(Dollars in Millions) 2023 2022 2021 2023 2022 2021

Asset and Liability Management Positions

Cash flow hedges
Interest rate contracts $ (187) $ (56) $ 94 $ (59) $ (27) $ (10)
Net investment hedges
Foreign exchange forward contracts (11) 42 19 — — —
Non-derivative debt instruments (33) 59 84 — — —
Note: The Company does not exclude components from effectiveness testing for cash flow and net investment hedges.

118 U.S. Bancorp 2023 Annual Report

The table below shows the effect of fair value and cash flow hedge accounting on the Consolidated Statement of Income for the
years ended December 31:

Interest Income Interest Expense

(Dollars in Millions) 2023 2022 2021 2023 2022 2021

Total amount of income and expense line items presented in the
Consolidated Statement of Income in which the effects of fair value
or cash flow hedges are recorded $ 30,007 $ 17,945 $ 13,487 $ 12,611 $ 3,217 $ 993
Asset and Liability Management Positions
Fair value hedges
Interest rate contract derivatives (430) 138 17 (458) 482 232
Hedged items 427 (139) (19) 461 (486) (232)
Cash flow hedges
Interest rate contract derivatives (52) — — 28 — 14
Note: The Company does not exclude components from effectiveness testing for fair value and cash flow hedges. The Company reclassified losses of $28 million, $36 million and $53
million into earnings during the years ended December 31, 2023, 2022 and 2021, respectively, as a result of realized cash flows on discontinued cash flow hedges. No amounts were
reclassified into earnings on discontinued cash flow hedges because it is probable the original hedged forecasted cash flows will not occur.

The table below shows cumulative hedging adjustments and the carrying amount of assets and liabilities designated in fair value hedges at
December 31:
Carrying Amount of
the Hedged Assets Cumulative Hedging
and Liabilities Adjustment (a)

(Dollars in Millions) 2023 2022 2023 2022

Line Item in the Consolidated Balance Sheet

Available-for-sale investment securities(b) $11,795 $ 4,937 $ (448) $ (552)
Long-term debt 11,987 17,190 (148) (142)
(a) The cumulative hedging adjustment related to discontinued hedging relationships on available-for-sale investment securities and long-term debt was $(379) million and $(68)
million, respectively, at December 31, 2023, compared with $(392) million and $399 million at December 31, 2022, respectively.
(b) Includes amounts related to available-for-sale investment securities currently designated as the hedged item in a fair value hedge using the portfolio layer method. At December
31, 2023, the amortized cost of the closed portfolios used in these hedging relationships was $15.6 billion, of which $9.1 billion was designated as hedged. At December 31, 2023,
the cumulative amount of basis adjustments associated with these hedging relationships was $(335) million.

119
The table below shows the gains (losses) recognized in earnings for other economic hedges and the customer-related positions for the
years ended December 31:
Location of Gains (Losses)
(Dollars in Millions) Recognized in Earnings 2023 2022 2021

Asset and Liability Management Positions

Other economic hedges
Interest rate contracts
Futures and forwards Mortgage banking revenue $ 71 $ 407 $ 511
Purchased and written options Mortgage banking revenue 89 1 527
Swaps Mortgage banking revenue/Other
noninterest income/Interest expense (19) (1,010) (197)
Foreign exchange forward contracts Other noninterest income (7) (1) 1
Equity contracts Compensation expense (8) (8) 7
Other Other noninterest income 1 (181) 5
Customer-Related Positions
Interest rate contracts
Swaps Commercial products revenue 185 98 110
Purchased and written options Commercial products revenue 45 20 (5)
Futures Commercial products revenue (1) 30 3
Foreign exchange rate contracts
Forwards, spots and swaps Commercial products revenue 195 100 93
Purchased and written options Commercial products revenue 1 1 1
Commodity contracts
Swaps Commercial products revenue 6 — —
Credit contracts Commercial products revenue 1 20 (7)

Derivatives are subject to credit risk associated with The Company’s collateral arrangements are
counterparties to the derivative contracts. The Company predominately bilateral and, therefore, contain provisions
measures that credit risk using a credit valuation adjustment that require collateralization of the Company’s net liability
and includes it within the fair value of the derivative. The derivative positions. Required collateral coverage is based
Company manages counterparty credit risk through on net liability thresholds and may be contingent upon the
diversification of its derivative positions among various Company’s credit rating from two of the nationally
counterparties, by entering into derivative positions that are recognized statistical rating organizations. If the Company’s
centrally cleared through clearinghouses, by entering into credit rating were to fall below credit ratings thresholds
master netting arrangements and, where possible, by established in the collateral arrangements, the
requiring collateral arrangements. A master netting counterparties to the derivatives could request immediate
arrangement allows two counterparties, who have multiple additional collateral coverage up to and including full
derivative contracts with each other, the ability to net settle collateral coverage for derivatives in a net liability position.
amounts under all contracts, including any related collateral, The aggregate fair value of all derivatives under collateral
through a single payment and in a single currency. arrangements that were in a net liability position at
Collateral arrangements generally require the counterparty December 31, 2023, was $2.0 billion. At December 31,
to deliver collateral (typically cash or U.S. Treasury and 2023, the Company had $1.7 billion of cash posted as
agency securities) equal to the Company’s net derivative collateral against this net liability position.
receivable, subject to minimum transfer and credit rating
requirements.

120 U.S. Bancorp 2023 Annual Report

 NOTE 21 Netting Arrangements for Certain Financial Instruments and Securities
Financing Activities
The Company’s derivative portfolio consists of bilateral over- which are accounted for as collateralized financings.
the-counter trades, certain interest rate derivatives and Securities sold under agreements to repurchase include
credit contracts required to be centrally cleared through repurchase agreements and securities loaned transactions.
clearinghouses per current regulations, and exchange- Securities purchased under agreements to resell include
traded positions which may include U.S. Treasury and reverse repurchase agreements and securities borrowed
Eurodollar futures or options on U.S. Treasury futures. Of transactions. For securities sold under agreements to
the Company’s $1.2 trillion total notional amount of repurchase, the Company records a liability for the cash
derivative positions at December 31, 2023, $548.9 billion received, which is included in short-term borrowings on the
related to bilateral over-the-counter trades, $660.4 billion Consolidated Balance Sheet. For securities purchased
related to those centrally cleared through clearinghouses under agreements to resell, the Company records a
and $1.9 billion related to those that were exchange-traded. receivable for the cash paid, which is included in other
The Company’s derivative contracts typically include assets on the Consolidated Balance Sheet.
offsetting rights (referred to as netting arrangements), and Securities transferred to counterparties under repurchase
depending on expected volume, credit risk, and agreements and securities loaned transactions continue to
counterparty preference, collateral maintenance may be be recognized on the Consolidated Balance Sheet, are
required. For all derivatives under collateral support measured at fair value, and are included in investment
arrangements, fair value is determined daily and, depending securities or other assets. Securities received from
on the collateral maintenance requirements, the Company counterparties under reverse repurchase agreements and
and a counterparty may receive or deliver collateral, based securities borrowed transactions are not recognized on the
upon the net fair value of all derivative positions between Consolidated Balance Sheet unless the counterparty
the Company and the counterparty. Collateral is typically defaults. The securities transferred under repurchase and
cash, but securities may be allowed under collateral reverse repurchase transactions typically are U.S. Treasury
arrangements with certain counterparties. Receivables and and agency securities, residential agency mortgage-backed
payables related to cash collateral are included in other securities, corporate debt securities or asset-backed
assets and other liabilities on the Consolidated Balance securities. The securities loaned or borrowed typically are
Sheet, along with the related derivative asset and liability corporate debt securities traded by the Company’s primary
fair values. Any securities pledged to counterparties as broker-dealer subsidiary. In general, the securities
collateral remain on the Consolidated Balance Sheet. transferred can be sold, repledged or otherwise used by the
Securities received from counterparties as collateral are not party in possession. No restrictions exist on the use of cash
recognized on the Consolidated Balance Sheet, unless the collateral by either party. Repurchase/reverse repurchase
counterparty defaults. In general, securities used as and securities loaned/borrowed transactions expose the
collateral can be sold, repledged or otherwise used by the Company to counterparty risk. The Company manages this
party in possession. No restrictions exist on the use of cash risk by performing assessments, independent of business
collateral by either party. Refer to Note 20 for further line managers, and establishing concentration limits on each
discussion of the Company’s derivatives, including collateral counterparty. Additionally, these transactions include
arrangements. collateral arrangements that require the fair values of the
As part of the Company’s treasury and broker-dealer underlying securities to be determined daily, resulting in
operations, the Company executes transactions that are cash being obtained or refunded to counterparties to
treated as securities sold under agreements to repurchase maintain specified collateral levels.
or securities purchased under agreements to resell, both of

121
The following table summarizes the maturities by category of collateral pledged for repurchase agreements and securities loaned
transactions:

Overnight Greater
and Less Than 30-89 Than 90
(Dollars in Millions) Continuous 30 Days Days Days Total

December 31, 2023

Repurchase agreements
U.S. Treasury and agencies $ 2,375 $ — $ — $ — $ 2,375
Residential agency mortgage-backed securities 338 — — — 338
Corporate debt securities 821 — — — 821
Asset-backed securities — 45 — — 45
Total repurchase agreements 3,534 45 — — 3,579
Securities loaned
Corporate debt securities 290 — — — 290
Total securities loaned 290 — — — 290
Gross amount of recognized liabilities $ 3,824 $ 45 $ — $ — $ 3,869
December 31, 2022
Repurchase agreements
U.S. Treasury and agencies $ 147 $ — $ — $ — $ 147
Residential agency mortgage-backed securities 846 — — — 846
Corporate debt securities 439 — — — 439
Total repurchase agreements 1,432 — — — 1,432
Securities loaned
Corporate debt securities 120 — — — 120
Total securities loaned 120 — — — 120
Gross amount of recognized liabilities $ 1,552 $ — $ — $ — $ 1,552

The Company executes its derivative, repurchase/ The Company has elected to offset the assets and
reverse repurchase and securities loaned/borrowed liabilities under netting arrangements for the balance sheet
transactions under the respective industry standard presentation of the majority of its derivative counterparties.
agreements. These agreements include master netting The netting occurs at the counterparty level, and includes all
arrangements that allow for multiple contracts executed with assets and liabilities related to the derivative contracts,
the same counterparty to be viewed as a single including those associated with cash collateral received or
arrangement. This allows for net settlement of a single delivered. The Company has not elected to offset the assets
amount on a daily basis. In the event of default, the master and liabilities under netting arrangements for the balance
netting arrangement provides for close-out netting, which sheet presentation of repurchase/reverse repurchase and
allows all of these positions with the defaulting counterparty securities loaned/borrowed transactions.
to be terminated and net settled with a single payment
amount.

122 U.S. Bancorp 2023 Annual Report

The following tables provide information on the Company’s netting adjustments, and items not offset on the Consolidated Balance
Sheet but available for offset in the event of default:
Gross Amounts
Net Amounts Gross Amounts Not Offset on the
Offset on the Presented on Consolidated Balance Sheet
Gross Consolidated the
Recognized Balance Consolidated Financial Collateral
(Dollars in Millions) Assets Sheet(a) Balance Sheet Instruments(b) Received(c) Net Amount
December 31, 2023
Derivative assets(d) $ 6,504 $ (3,666) $ 2,838 $ (141) $ (3) $ 2,694
Reverse repurchase agreements 2,513 — 2,513 (568) (1,941) 4
Securities borrowed 1,802 — 1,802 (14) (1,717) 71
Total $ 10,819 $ (3,666) $ 7,153 $ (723) $ (3,661) $ 2,769
December 31, 2022
Derivative assets(d) $ 7,852 $ (5,427) $ 2,425 $ (231) $ (80) $ 2,114
Reverse repurchase agreements 107 — 107 (102) (5) —
Securities borrowed 1,606 — 1,606 — (1,548) 58
Total $ 9,565 $ (5,427) $ 4,138 $ (333) $ (1,633) $ 2,172
(a) Includes $1.6 billion and $3.0 billion of cash collateral related payables that were netted against derivative assets at December 31, 2023 and 2022, respectively.
(b) For derivative assets this includes any derivative liability fair values that could be offset in the event of counterparty default; for reverse repurchase agreements this includes any
repurchase agreement payables that could be offset in the event of counterparty default; for securities borrowed this includes any securities loaned payables that could be offset in
the event of counterparty default.
(c) Includes the fair value of securities received by the Company from the counterparty. These securities are not included on the Consolidated Balance Sheet unless the counterparty
defaults.
(d) Excludes $27 million and $20 million at December 31, 2023 and 2022, respectively, of derivative assets not subject to netting arrangements.

Gross Amounts Net Amounts Gross Amounts Not Offset on the

Offset on the Presented on Consolidated Balance Sheet
Gross Consolidated the
Recognized Balance Consolidated Financial Collateral
(Dollars in Millions) Liabilities Sheet(a) Balance Sheet Instruments(b) Pledged(c) Net Amount
December 31, 2023
Derivative liabilities(d) $ 8,217 $ (3,720) $ 4,497 $ (141) $ — $ 4,356
Repurchase agreements 3,579 — 3,579 (568) (3,008) 3
Securities loaned 290 — 290 (14) (270) 6
Total $ 12,086 $ (3,720) $ 8,366 $ (723) $ (3,278) $ 4,365
December 31, 2022
Derivative liabilities(d) $ 10,506 $ (4,551) $ 5,955 $ (231) $ — $ 5,724
Repurchase agreements 1,432 — 1,432 (102) (1,325) 5
Securities loaned 120 — 120 — (118) 2
Total $ 12,058 $ (4,551) $ 7,507 $ (333) $ (1,443) $ 5,731
(a) Includes $1.7 billion and $2.1 billion of cash collateral related receivables that were netted against derivative liabilities at December 31, 2023 and 2022, respectively.
(b) For derivative liabilities this includes any derivative asset fair values that could be offset in the event of counterparty default; for repurchase agreements this includes any reverse
repurchase agreement receivables that could be offset in the event of counterparty default; for securities loaned this includes any securities borrowed receivables that could be
offset in the event of counterparty default.
(c) Includes the fair value of securities pledged by the Company to the counterparty. These securities are included on the Consolidated Balance Sheet unless the Company defaults.
(d) Excludes $92 million and $193 million at December 31, 2023 and 2022, respectively, of derivative liabilities not subject to netting arrangements.

123
 NOTE 22 Fair Values of Assets and Liabilities
The Company uses fair value measurements for the initial
recording of certain assets and liabilities, periodic using quoted prices for similar assets or pricing models
remeasurement of certain assets and liabilities, and with inputs that are observable in the market or can be
disclosures. Derivatives, trading and available-for-sale corroborated by observable market data.
investment securities, MSRs, certain time deposits and • Level 3 — Unobservable inputs that are supported by little
substantially all MLHFS are recorded at fair value on a or no market activity and that are significant to the fair
recurring basis. Additionally, from time to time, the Company value of the assets or liabilities. Level 3 assets and
may be required to record at fair value other assets on a liabilities include financial instruments whose values are
nonrecurring basis, such as loans held for sale, loans held determined using pricing models, discounted cash flow
for investment and certain other assets. These nonrecurring methodologies, or similar techniques, as well as
fair value adjustments typically involve application of lower- instruments for which the determination of fair value
of-cost-or-fair value accounting or impairment write-downs requires significant management judgment or estimation.
of individual assets. Other financial instruments, such as This category includes MSRs and certain derivative
held-to-maturity investment securities, loans, the majority of contracts.
time deposits, short-term borrowings and long-term debt,
are accounted for at amortized cost. See “Fair Value of Valuation Methodologies
Financial Instruments” in this Note for further information on
the estimated fair value of these other financial instruments. The valuation methodologies used by the Company to
In accordance with disclosure guidance, certain financial measure financial assets and liabilities at fair value are
instruments, such as deposits with no defined or contractual described below. In addition, the following section includes
maturity, receivables and payables due in one year or less, an indication of the level of the fair value hierarchy in which
insurance contracts and equity investments not accounted the assets or liabilities are classified. Where appropriate, the
for at fair value, are excluded from this Note. In addition, descriptions include information about the valuation models
refer to Note 3 regarding the fair value of assets and and key inputs to those models. During the years ended
liabilities acquired in the MUB acquisition. December 31, 2023, 2022 and 2021, there were no
Fair value is defined as the exchange price that would be significant changes to the valuation techniques used by the
received for an asset or paid to transfer a liability (an exit Company to measure fair value.
price) in the principal or most advantageous market for the
Available-For-Sale Investment Securities When quoted
asset or liability in an orderly transaction between market
market prices for identical securities are available in an
participants on the measurement date. A fair value
active market, these prices are used to determine fair value
measurement reflects all of the assumptions that market
and these securities are classified within Level 1 of the fair
participants would use in pricing the asset or liability,
value hierarchy. Level 1 investment securities include U.S.
including assumptions about the risk inherent in a particular
Treasury and exchange-traded securities.
valuation technique, the effect of a restriction on the sale or
For other securities, quoted market prices may not be
use of an asset and the risk of nonperformance.
readily available for the specific securities. When possible,
The Company groups its assets and liabilities
the Company determines fair value based on market
measured at fair value into a three-level hierarchy for
observable information, including quoted market prices for
valuation techniques used to measure financial assets and
similar securities, inactive transaction prices, and broker
financial liabilities at fair value. This hierarchy is based on
quotes. These securities are classified within Level 2 of the
whether the valuation inputs are observable or
fair value hierarchy. Level 2 valuations are generally
unobservable. These levels are:
provided by a third-party pricing service. Level 2 investment
• Level 1 — Quoted prices in active markets for identical securities are predominantly agency mortgage-backed
assets or liabilities. Level 1 includes U.S. Treasury securities, certain other asset-backed securities, obligations
securities, as well as exchange-traded instruments. of state and political subdivisions and agency debt
securities.
• Level 2 — Observable inputs other than Level 1 prices,
such as quoted prices for similar assets or liabilities; Mortgage Loans Held For Sale MLHFS measured at fair
quoted prices in markets that are not active; or other value, for which an active secondary market and readily
inputs that are observable or can be corroborated by available market prices exist, are initially valued at the
observable market data for substantially the full term of transaction price and are subsequently valued by
the assets or liabilities. Level 2 includes debt securities comparison to instruments with similar collateral and risk
that are traded less frequently than exchange-traded profiles. MLHFS are classified within Level 2. Included in
instruments and which are typically valued using third mortgage banking revenue were net losses of $46 million,
party pricing services; derivative contracts and other $450 million and $145 million for the years ended
assets and liabilities, including securities, and certain time December 31, 2023, 2022 and 2021, respectively, from the
deposits, whose value is determined using a pricing changes to fair value of these MLHFS under fair value
model with inputs that are observable in the market or can option accounting guidance. Changes in fair value due to
be derived principally from or corroborated by observable instrument specific credit risk were immaterial. Interest
market data; and MLHFS whose values are determined income for MLHFS is measured based on contractual

124 U.S. Bancorp 2023 Annual Report

interest rates and reported as interest income on the to purchase and originate mortgage loans and swap
Consolidated Statement of Income. Electing to measure agreements executed in conjunction with the sale of a
MLHFS at fair value reduces certain timing differences and portion of its Class B common and preferred shares of Visa
better matches changes in fair value of these assets with Inc. (the “Visa swaps”). The mortgage loan commitments
changes in the value of the derivative instruments used to are valued by pricing models that include market observable
economically hedge them without the burden of complying and unobservable inputs, which result in the commitments
with the requirements for hedge accounting. being classified within Level 3 of the fair value hierarchy.
The unobservable inputs include assumptions about the
Time Deposits The Company elects the fair value option to
percentage of commitments that actually become a closed
account for certain time deposits that are hedged with
loan and the MSR value that is inherent in the underlying
derivatives that do not qualify for hedge accounting. Electing
loan value. The Visa swaps require payments by either the
to measure these time deposits at fair value reduces certain
Company or the purchaser of the Visa Inc. Class B common
timing differences and better matches changes in fair value
and preferred shares when there are changes in the
of these deposits with changes in the value of the derivative
conversion rate of the Visa Inc. Class B common and
instruments used to economically hedge them. The time
preferred shares to Visa Inc. Class A common and preferred
deposits measured at fair value are valued using a
shares, respectively, as well as quarterly payments to the
discounted cash flow model that utilizes market observable
purchaser based on specified terms of the agreements.
inputs and are classified within Level 2. Included in interest
Management reviews and updates the Visa swaps fair value
expense on deposits were net gains of $4 million for the
in conjunction with its review of Visa Inc. related litigation
year ended December 31, 2023 from the changes in fair
contingencies, and the associated escrow funding. The
value of time deposits under fair value option accounting
expected litigation resolution impacts the Visa Inc. Class B
guidance.
common share to Visa Inc. Class A common share
Mortgage Servicing Rights MSRs are valued using a conversion rate, as well as the ultimate termination date for
discounted cash flow methodology, and are classified within the Visa swaps. Accordingly, the Visa swaps are classified
Level 3. The Company determines fair value of the MSRs by within Level 3. Refer to Note 23 for further information on
projecting future cash flows for different interest rate the Visa Inc. restructuring and related card association
scenarios using prepayment rates and other assumptions, litigation.
and discounts these cash flows using a risk adjusted rate
based on option adjusted spread levels. There is minimal Significant Unobservable Inputs of
observable market activity for MSRs on comparable
Level 3 Assets and Liabilities
portfolios and, therefore, the determination of fair value
requires significant management judgment. Refer to Note 10 The following section provides information to facilitate an
for further information on MSR valuation assumptions. understanding of the uncertainty in the fair value
measurements for the Company’s Level 3 assets and
Derivatives The majority of derivatives held by the
liabilities recorded at fair value on the Consolidated Balance
Company are executed over-the-counter or centrally cleared
Sheet. This section includes a description of the significant
through clearinghouses and are valued using market
inputs used by the Company and a description of any
standard cash flow valuation techniques. The models
interrelationships between these inputs. The discussion
incorporate inputs, depending on the type of derivative,
below excludes nonrecurring fair value measurements of
including interest rate curves, foreign exchange rates and
collateral value used for impairment measures for loans and
volatility. All derivative values incorporate an assessment of
OREO. These valuations utilize third party appraisal or
the risk of counterparty nonperformance, measured based
broker price opinions, and are classified as Level 3 due to
on the Company’s evaluation of credit risk including external
the significant judgment involved.
assessments of credit risk. The Company monitors and
manages its nonperformance risk by considering its ability to Mortgage Servicing Rights The significant unobservable
net derivative positions under master netting arrangements, inputs used in the fair value measurement of the Company’s
as well as collateral received or provided under collateral MSRs are expected prepayments and the option adjusted
arrangements. Accordingly, the Company has elected to spread that is added to the risk-free rate to discount
measure the fair value of derivatives, at a counterparty level, projected cash flows. Significant increases in either of these
on a net basis. The majority of the derivatives are classified inputs in isolation would have resulted in a significantly
within Level 2 of the fair value hierarchy, as the significant lower fair value measurement. Significant decreases in
inputs to the models, including nonperformance risk, are either of these inputs in isolation would have resulted in a
observable. However, certain derivative transactions are significantly higher fair value measurement. There is no
with counterparties where risk of nonperformance cannot be direct interrelationship between prepayments and option
observed in the market and, therefore, the credit valuation adjusted spread. Prepayment rates generally move in the
adjustments result in these derivatives being classified opposite direction of market interest rates. Option adjusted
within Level 3 of the fair value hierarchy. spread is generally impacted by changes in market return
The Company also has other derivative contracts that requirements.
are created through its operations, including commitments

125
The following table shows the significant valuation assumption ranges for MSRs at December 31, 2023:
Weighted-
Minimum Maximum Average(a)
Expected prepayment 7% 23% 10%
Option adjusted spread 4 11 5
(a) Determined based on the relative fair value of the related mortgage loans serviced.

Derivatives The Company has two distinct Level 3 of commitments that actually become a closed loan and the
derivative portfolios: (i) the Company’s commitments to MSR value that is inherent in the underlying loan value. A
purchase and originate mortgage loans that meet the significant increase in the rate of loans that close would
requirements of a derivative and (ii) the Company’s asset/ have resulted in a larger derivative asset or liability. A
liability and customer-related derivatives that are Level 3 significant increase in the inherent MSR value would have
due to unobservable inputs related to measurement of risk resulted in an increase in the derivative asset or a reduction
of nonperformance by the counterparty. In addition, the in the derivative liability. Expected loan close rates and the
Company’s Visa swaps are classified within Level 3. inherent MSR values are directly impacted by changes in
The significant unobservable inputs used in the fair value market rates and will generally move in the same direction
measurement of the Company’s derivative commitments to as interest rates.
purchase and originate mortgage loans are the percentage

The following table shows the significant valuation assumption ranges for the Company’s derivative commitments to purchase and
originate mortgage loans at December 31, 2023:
Weighted-
Minimum Maximum Average(a)
Expected loan close rate 17% 99% 74%
Inherent MSR value (basis points per loan) 48 177 97
(a) Determined based on the relative fair value of the related mortgage loans.

The significant unobservable input used in the fair value percentage of the net fair value of the counterparty’s
measurement of certain of the Company’s asset/liability and derivative contracts prior to adjustment was 0 percent, 507
customer-related derivatives is the credit valuation percent and 2 percent, respectively.
adjustment related to the risk of counterparty The significant unobservable inputs used in the fair value
nonperformance. A significant increase in the credit measurement of the Visa swaps are management’s
valuation adjustment would have resulted in a lower fair estimate of the probability of certain litigation scenarios
value measurement. A significant decrease in the credit occurring, and the timing of the resolution of the related
valuation adjustment would have resulted in a higher fair litigation loss estimates in excess, or shortfall, of the
value measurement. The credit valuation adjustment is Company’s proportional share of escrow funds. An increase
impacted by changes in market rates, volatility, market in the loss estimate or a delay in the resolution of the related
implied credit spreads, and loss recovery rates, as well as litigation would have resulted in an increase in the derivative
the Company’s assessment of the counterparty’s credit liability. A decrease in the loss estimate or an acceleration
position. At December 31, 2023, the minimum, maximum of the resolution of the related litigation would have resulted
and weighted-average credit valuation adjustment as a in a decrease in the derivative liability.

126 U.S. Bancorp 2023 Annual Report

The following table summarizes the balances of assets and liabilities measured at fair value on a recurring basis:

(Dollars in Millions) Level 1 Level 2 Level 3 Netting Total

December 31, 2023

Available-for-sale securities
U.S. Treasury and agencies $ 14,787 $ 4,755 $ — $ — $ 19,542
Mortgage-backed securities
Residential agency — 26,078 — — 26,078
Commercial
Agency — 7,343 — — 7,343
Non-agency — 6 — — 6
Asset-backed securities — 6,724 — — 6,724
Obligations of state and political subdivisions — 9,989 — — 9,989
Other — 24 — — 24
Total available-for-sale 14,787 54,919 — — 69,706
Mortgage loans held for sale — 2,011 — — 2,011
Mortgage servicing rights — — 3,377 — 3,377
Derivative assets — 5,078 1,453 (3,666) 2,865
Other assets 550 1,991 — — 2,541
Total $ 15,337 $ 63,999 $ 4,830 $ (3,666) $ 80,500
Time deposits $ — $ 2,818 $ — $ — $ 2,818
Derivative liabilities 16 4,955 3,338 (3,720) 4,589
Short-term borrowings and other liabilities(a) 517 1,786 — — 2,303
Total $ 533 $ 9,559 $ 3,338 $ (3,720) $ 9,710
December 31, 2022
Available-for-sale securities
U.S. Treasury and agencies $ 13,723 $ 8,310 $ — $ — $ 22,033
Mortgage-backed securities
Residential agency — 29,271 — — 29,271
Commercial
Agency — 7,145 — — 7,145
Non-agency — 7 — — 7
Asset-backed securities — 4,323 — — 4,323
Obligations of state and political subdivisions — 10,124 1 — 10,125
Other — 6 — — 6
Total available-for-sale 13,723 59,186 1 — 72,910
Mortgage loans held for sale — 1,849 — — 1,849
Mortgage servicing rights — — 3,755 — 3,755
Derivative assets 9 6,608 1,255 (5,427) 2,445
Other assets 248 1,756 — — 2,004
Total $ 13,980 $ 69,399 $ 5,011 $ (5,427) $ 82,963
Derivative liabilities $ 4 $ 6,241 $ 4,454 $ (4,551) $ 6,148
Short-term borrowings and other liabilities(a) 125 1,564 — — 1,689
Total $ 129 $ 7,805 $ 4,454 $ (4,551) $ 7,837
Note: Excluded from the table above are equity investments without readily determinable fair values. The Company has elected to carry these investments at historical cost, adjusted
for impairment and any changes resulting from observable price changes for identical or similar investments of the issuer. The aggregate carrying amount of these equity investments
was $133 million and $104 million at December 31, 2023 and 2022, respectively. The Company recorded a $5 million impairment on these equity investments during 2023, and the
cumulative impairment on these equity investments is $5 million at December 31, 2023. The Company has not recorded adjustments for observable price changes on these equity
investments during 2023 and 2022, or on a cumulative basis.
(a) Primarily represents the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.

127
The following table presents the changes in fair value for all assets and liabilities measured at fair value on a recurring basis using
significant unobservable inputs (Level 3) for the years ended December 31:

Net Gains Net Change in

Net Gains (Losses) Unrealized Gains
(Losses) Included in (Losses) Relating to
Beginning Included Other End of Assets and Liabilities
of Period in Net Comprehensive Principal Period Held at End of
(Dollars in Millions) Balance Income Income (Loss) Purchases Sales Payments Issuances Settlements Balance Period

2023
Available-for-sale securities
Obligations of state and
political subdivisions $ 1 $ — $ — $ — $ — $ (1) $ — $ — $ — $ —
Total available-for-
sale 1 — — — — (1) — — — —
(a) (c) (a)
Mortgage servicing rights 3,755 (316) — 5 (440) — 373 — 3,377 (316)
Net derivative assets and
(b) (d)
liabilities (3,199) (2,696) — 552 (45) — 1 3,502 (1,885) (183)

2022
Available-for-sale securities
Asset-backed securities $ 7 $ — $ (3) $ — $ (4) $ — $ — $ — $ — $ —
Obligations of state and
political subdivisions 1 — — — — — — — 1 —
Total available-for-
sale 8 — (3) — (4) — — — 1 —
(a) (c) (a)
Mortgage servicing rights 2,953 311 — 156 (255) — 590 — 3,755 311
Net derivative assets and
(e) (f)
liabilities 799 (5,940) — 716 (36) — 11 1,251 (3,199) (3,538)

2021
Available-for-sale securities
Asset-backed securities $ 7 $ — $ 1 $ — $ — $ (1) $ — $ — $ 7 $ 1
Obligations of state and
political subdivisions 1 — — — — — — — 1 —
Total available-for-
sale 8 — 1 — — (1) — — 8 1
(a) (c) (a)
Mortgage servicing rights 2,210 (437) — 42 2 — 1,136 — 2,953 (437)
Net derivative assets and
(g) (h)
liabilities 2,326 (924) — 337 (3) — — (937) 799 (968)
(a) Included in mortgage banking revenue.
(b) Approximately $182 million, $(2.9) billion and $1 million included in mortgage banking revenue, commercial products revenue and other non-interest income, respectively.
(c) Represents MSRs capitalized during the period.
(d) Approximately $15 million, $(199) million and $1 million included in mortgage banking revenue, commercial products revenue and other non-interest income, respectively.
(e) Approximately $(141) million, $(5.6) billion and $(181) million included in mortgage banking revenue, commercial products revenue and other non-interest income, respectively.
(f) Approximately $5 million, $(3.4) billion and $(181) million included in mortgage banking revenue, commercial products revenue and other non-interest income, respectively.
(g) Approximately $666 million, $(1.6) billion and $5 million included in mortgage banking revenue, commercial products revenue and other non-interest income, respectively.
(h) Approximately $42 million, $(1.0) billion and $5 million included in mortgage banking revenue, commercial products revenue and other non-interest income, respectively.

The Company is also required periodically to measure certain other financial assets at fair value on a nonrecurring basis.
These measurements of fair value usually result from the application of lower-of-cost-or-fair value accounting or write-downs of
individual assets.

The following table summarizes the balances as of the measurement date of assets measured at fair value on a nonrecurring
basis, and still held as of December 31:
2023 2022
(Dollars in Millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Loans(a) $ — $ — $ 354 $ 354 $ — $ — $ 97 $ 97
(b)
Other assets — — 27 27 — — 21 21
(a) Represents the carrying value of loans for which adjustments were based on the fair value of the collateral, excluding loans fully charged-off.
(b) Primarily represents the fair value of foreclosed properties that were measured at fair value based on an appraisal or broker price opinion of the collateral subsequent to their initial
acquisition.

128 U.S. Bancorp 2023 Annual Report

The following table summarizes losses recognized related to nonrecurring fair value measurements of individual assets or
portfolios for the years ended December 31:

(Dollars in Millions) 2023 2022 2021

Loans(a) $ 368 $ 40 $ 60
Other assets(b) 32 20 25
(a) Represents write-downs of loans which were based on the fair value of the collateral, excluding loans fully charged-off.
(b) Primarily represents related losses of foreclosed properties that were measured at fair value subsequent to their initial acquisition.

Fair Value Option

The following table summarizes the differences between the aggregate fair value carrying amount of the assets and liabilities for
which the fair value option has been elected and the aggregate remaining contractual principal balance outstanding as of
December 31:
2023 2022
Carrying Carrying
Amount Over Amount Over
(Under) (Under)
Fair Value Contractual Contractual Fair Value Contractual Contractual
Carrying Principal Principal Carrying Principal Principal
(Dollars in Millions) Amount Outstanding Outstanding Amount Outstanding Outstanding
Total loans(a) $ 2,011 $ 1,994 $ 17 $ 1,849 $ 1,848 $ 1
Time deposits 2,818 2,822 (4) — — —
(a) Includes nonaccrual loans of $1 million carried at fair value with contractual principal outstanding of $1 million at December 31, 2023 and $1 million carried at fair value with
contractual principal outstanding of $1 million at December 31, 2022. Includes loans 90 days or more past due of $4 million carried at fair value with contractual principal
outstanding of $4 million at December 31, 2023 and $1 million carried at fair value with contractual principal outstanding of $1 million at December 31, 2022.

Fair Value of Financial Instruments value of goodwill, long-term relationships with deposit, credit
card, merchant processing and trust customers, other
The following section summarizes the estimated fair value purchased intangibles, premises and equipment, deferred
for financial instruments accounted for at amortized cost as taxes and other liabilities. Additionally, in accordance with
of December 31, 2023 and 2022. In accordance with the disclosure guidance, receivables and payables due in
disclosure guidance related to fair values of financial one year or less, insurance contracts, equity investments
instruments, the Company did not include assets and not accounted for at fair value, and deposits with no defined
liabilities that are not financial instruments, such as the or contractual maturities are excluded.

The estimated fair values of the Company’s financial instruments as of December 31, are shown in the table below:

2023 2022
Fair Value Fair Value
Carrying Carrying
(Dollars in Millions) Amount Level 1 Level 2 Level 3 Total Amount Level 1 Level 2 Level 3 Total

Financial Assets
Cash and due from banks $61,192 $61,192 $ — $ — $61,192 $53,542 $53,542 $ — $ — $53,542
Federal funds sold and securities
purchased under resale agreements 2,543 — 2,543 — 2,543 356 — 356 — 356
Investment securities held-to-maturity 84,045 1,310 72,778 — 74,088 88,740 1,293 76,581 — 77,874
Loans held for sale(a) 190 — — 190 190 351 — — 351 351
Loans 366,456 — — 362,849 362,849 381,277 — — 368,874 368,874
Other(b) 2,377 — 1,863 514 2,377 2,962 — 2,224 738 2,962
Financial Liabilities
Time deposits(c) 49,455 — 49,607 — 49,607 32,946 — 32,338 — 32,338
Short-term borrowings(d) 12,976 — 12,729 — 12,729 29,527 — 29,145 — 29,145
Long-term debt 51,480 — 49,697 — 49,697 39,829 — 37,622 — 37,622
(e)
Other 5,432 — 1,406 4,026 5,432 5,137 — 1,500 3,637 5,137
(a) Excludes mortgages held for sale for which the fair value option under applicable accounting guidance was elected.
(b) Includes investments in Federal Reserve Bank and Federal Home Loan Bank stock and tax-advantaged investments.
(c) Excludes time deposits for which the fair value option under applicable accounting guidance was elected.
(d) Excludes the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.
(e) Includes operating lease liabilities and liabilities related to tax-advantaged investments.

129
 The fair value of unfunded commitments, deferred non- $489 million and $498 million at December 31, 2023 and
yield related loan fees, standby letters of credit and other 2022, respectively. The carrying value of other guarantees
guarantees is approximately equal to their carrying value. was $198 million and $241 million at December 31, 2023
The carrying value of unfunded commitments, deferred non- and 2022, respectively.
yield related loan fees and standby letters of credit was

NOTE 23 Guarantees and Contingent Liabilities

Visa Restructuring and Card Association Litigation The loans. Collateral is obtained to secure commitments based
Company’s Payment Services business issues credit and on management’s credit assessment of the borrower. The
debit cards and acquires credit and debit card transactions collateral may include marketable securities, receivables,
through the Visa U.S.A. Inc. card association or its affiliates inventory, equipment and real estate. Since the Company
(collectively “Visa”). In 2007, Visa completed a restructuring expects many of the commitments to expire without being
and issued shares of Visa Inc. common stock to its financial drawn, total commitment amounts do not necessarily
institution members in contemplation of its initial public represent the Company’s future liquidity requirements. In
offering (“IPO”) completed in the first quarter of 2008 (the addition, the commitments include consumer credit lines
“Visa Reorganization”). As a part of the Visa that are cancelable upon notification to the consumer.
Reorganization, the Company received its proportionate
The contract or notional amounts of unfunded commitments
number of shares of Visa Inc. common stock, which were
to extend credit at December 31, 2023, excluding those
subsequently converted to Class B shares of Visa Inc.
commitments considered derivatives, were as follows:
(“Class B shares”). As of December 31, 2023, the Company
has sold substantially all of its Class B shares.
Term
Visa U.S.A. Inc. (“Visa U.S.A.”) and MasterCard
International (collectively, the “Card Brands”) are defendants Greater
in antitrust lawsuits challenging the practices of the Card Less Than Than One
(Dollars in Millions) One Year Year Total
Brands (the “Visa Litigation”). Visa U.S.A. member banks
have a contingent obligation to indemnify Visa Inc. under the Commercial and commercial
real estate loans $ 43,385 $137,155 $180,540
Visa U.S.A. bylaws (which were modified at the time of the
restructuring in October 2007) for potential losses arising Corporate and purchasing
card loans(a) 34,943 — 34,943
from the Visa Litigation. The indemnification by the Visa
U.S.A. member banks has no specific maximum amount. Residential mortgages 114 — 114
Using proceeds from its IPO and through reductions to the Retail credit card loans (a)
134,297 — 134,297
conversion ratio applicable to the Class B shares held by Other retail loans 15,616 27,430 43,046
Visa U.S.A. member banks, Visa Inc. has funded an escrow
Other 7,585 — 7,585
account for the benefit of member financial institutions to
fund their indemnification obligations associated with the (a) Primarily cancellable at the Company’s discretion.

Visa Litigation. The receivable related to the escrow account

is classified in other liabilities and fully offsets the related Other Guarantees and Contingent
Visa Litigation contingent liability. Liabilities
In October 2012, Visa signed a settlement agreement to
resolve class action claims associated with the multidistrict The following table is a summary of other guarantees and
interchange litigation pending in the United States District contingent liabilities of the Company at December 31, 2023:
Court for the Eastern District of New York (the “Multi-District
Litigation”). The U.S. Court of Appeals for the Second Maximum
Potential
Circuit reversed the approval of that settlement and Collateral Carrying Future
remanded the matter to the district court. Thereafter, the (Dollars in Millions) Held Amount Payments

case was split into two putative class actions, one seeking Standby letters of credit $ — $ 20 $ 10,999
damages (the “Damages Action”) and a separate class Third party borrowing
action seeking injunctive relief only (the “Injunctive Action”). arrangements — — 5
In September 2018, Visa signed a new settlement Securities lending
agreement, superseding the original settlement agreement, indemnifications 6,924 — 6,679
to resolve the Damages Action. The Damages Action Asset sales — 106 10,263
settlement has received final court approval and is now
Merchant processing 815 71 140,288
resolved. The Injunctive Action, which generally seeks
changes to Visa rules, is still pending. Tender option bond program
guarantee 607 — 589
Commitments to Extend Credit Commitments to extend Other — 21 2,696
credit are legally binding and generally have fixed expiration
dates or other termination clauses. The contractual amount Letters of Credit Standby letters of credit are commitments
represents the Company’s exposure to credit loss, in the the Company issues to guarantee the performance of a
event of default by the borrower. The Company manages customer to a third party. The guarantees frequently support
this credit risk by using the same credit policies it applies to

130 U.S. Bancorp 2023 Annual Report

public and private borrowing arrangements, including value of the securities lent to third parties. At December 31,
commercial paper issuances, bond financings and other 2023, the Company held $6.9 billion of cash as collateral for
similar transactions. The Company also issues and confirms these arrangements.
commercial letters of credit on behalf of customers to
Asset Sales The Company has provided guarantees to
ensure payment or collection in connection with trade
certain third parties in connection with the sale or
transactions. In the event of a customer’s or counterparty’s
syndication of certain assets, primarily loan portfolios and
nonperformance, the Company’s credit loss exposure is
tax-advantaged investments. These guarantees are
similar to that in any extension of credit, up to the letter’s
generally in the form of asset buy-back or make-whole
contractual amount. Management assesses the borrower’s
provisions that are triggered upon a credit event or a change
credit to determine the necessary collateral, which may
in the tax-qualifying status of the related projects, as
include marketable securities, receivables, inventory,
applicable, and remain in effect until the loans are collected
equipment and real estate. Since the conditions requiring
or final tax credits are realized, respectively. The maximum
the Company to fund letters of credit may not occur, the
potential future payments guaranteed by the Company
Company expects its liquidity requirements to be less than
under these arrangements were approximately $10.3 billion
the total outstanding commitments. The maximum potential
at December 31, 2023, and represented the proceeds
future payments guaranteed by the Company under standby
received from the buyer or the guaranteed portion in these
letter of credit arrangements at December 31, 2023, were
transactions where the buy-back or make-whole provisions
approximately $11.0 billion with a weighted-average term of
have not yet expired. At December 31, 2023, the Company
approximately 16 months. The estimated fair value of
had reserved $93 million for potential losses related to the
standby letters of credit was approximately $20 million at
sale or syndication of tax-advantaged investments.
December 31, 2023.
The maximum potential future payments do not include
The contract or notional amount of letters of credit at loan sales where the Company provides standard
December 31, 2023, were as follows: representation and warranties to the buyer against losses
related to loan underwriting documentation defects that may
Term have existed at the time of sale that generally are identified
Greater after the occurrence of a triggering event such as
Less Than Than One delinquency. For these types of loan sales, the maximum
(Dollars in Millions) One Year Year Total
potential future payments is generally the unpaid principal
Standby $ 6,444 $ 4,555 $ 10,999 balance of loans sold measured at the end of the current
Commercial 559 59 618 reporting period. Actual losses will be significantly less than
the maximum exposure, as only a fraction of loans sold will
Guarantees Guarantees are contingent commitments have a representation and warranty breach, and any losses
issued by the Company to customers or other third parties. on repurchase would generally be mitigated by any
The Company’s guarantees primarily include parent collateral held against the loans.
guarantees related to subsidiaries’ third party borrowing The Company regularly sells loans to GSEs as part of its
arrangements; third party performance guarantees inherent mortgage banking activities. The Company provides
in the Company’s business operations, such as indemnified customary representations and warranties to GSEs in
securities lending programs and merchant charge-back conjunction with these sales. These representations and
guarantees; and indemnification or buy-back provisions warranties generally require the Company to repurchase
related to certain asset sales. For certain guarantees, the assets if it is subsequently determined that a loan did not
Company has recorded a liability related to the potential meet specified criteria, such as a documentation deficiency
obligation, or has access to collateral to support the or rescission of mortgage insurance. If the Company is
guarantee or through the exercise of other recourse unable to cure or refute a repurchase request, the Company
provisions can offset some or all of the maximum potential is generally obligated to repurchase the loan or otherwise
future payments made under these guarantees. reimburse the GSE for losses. At December 31, 2023, the
Company had reserved $13 million for potential losses from
Third Party Borrowing Arrangements The Company
representation and warranty obligations, compared with $17
provides guarantees to third parties as a part of certain
million at December 31, 2022. The Company’s reserve
subsidiaries’ borrowing arrangements. The maximum
reflects management’s best estimate of losses for
potential future payments guaranteed by the Company
representation and warranty obligations. The Company’s
under these arrangements were approximately $5 million at
repurchase reserve is modeled at the loan level, taking into
December 31, 2023.
consideration the individual credit quality and borrower
Commitments from Securities Lending The Company activity that has transpired since origination. The model
participates in securities lending activities by acting as the applies credit quality and economic risk factors to derive a
customer’s agent involving the loan of securities. The probability of default and potential repurchase that are
Company indemnifies customers for the difference between based on the Company’s historical loss experience, and
the fair value of the securities lent and the fair value of the estimates loss severity based on expected collateral value.
collateral received. Cash collateralizes these transactions. The Company also considers qualitative factors that may
The maximum potential future payments guaranteed by the result in anticipated losses differing from historical loss
Company under these arrangements were approximately trends.
$6.7 billion at December 31, 2023, and represent the fair

131
 As of December 31, 2023 and 2022, the Company had financial institutions, and liens on various assets. In addition
$18 million and $39 million, respectively, of unresolved to specific collateral or other credit enhancements, the
representation and warranty claims from GSEs. The Company maintains a liability for its implied guarantees
Company does not have a significant amount of unresolved associated with future delivery. At December 31, 2023, the
claims from investors other than GSEs. liability was $50 million primarily related to these airline
processing arrangements.
Merchant Processing The Company, through its
In the normal course of business, the Company has
subsidiaries, provides merchant processing services. Under
unresolved charge-backs. The Company assesses the
the rules of credit card associations, a merchant processor
likelihood of its potential liability based on the extent and
retains a contingent liability for credit card transactions
nature of unresolved charge-backs and its historical loss
processed. This contingent liability arises in the event of a
experience. At December 31, 2023, the Company held $135
billing dispute between the merchant and a cardholder that
million of merchant escrow deposits as collateral and had a
is ultimately resolved in the cardholder’s favor. In this
recorded liability for potential losses of $21 million.
situation, the transaction is “charged-back” to the merchant
and the disputed amount is credited or otherwise refunded Tender Option Bond Program Guarantee As discussed in
to the cardholder. If the Company is unable to collect this Note 8, the Company sponsors a municipal bond securities
amount from the merchant, it bears the loss for the amount tender option bond program and consolidates the program’s
of the refund paid to the cardholder. entities on its Consolidated Balance Sheet. The Company
A cardholder, through its issuing bank, generally has provides financial performance guarantees related to the
until the later of up to four months after the date the program’s entities. At December 31, 2023, the Company
transaction is processed or the receipt of the product or guaranteed $589 million of borrowings of the program’s
service to present a charge-back to the Company as the entities, included on the Consolidated Balance Sheet in
merchant processor. The absolute maximum potential short-term borrowings. The Company also included on its
liability is estimated to be the total volume of credit card Consolidated Balance Sheet the related $607 million of
transactions that meet the associations’ requirements to be available-for-sale investment securities serving as collateral
valid charge-back transactions at any given time. for this arrangement.
Management estimates that the maximum potential
Other Guarantees and Commitments As of December 31,
exposure for charge-backs would approximate the total
2023, the Company sponsored, and owned 100 percent of
amount of merchant transactions processed through the
the common equity of, USB Capital IX, a wholly-owned
credit card associations for the last four months. For the last
unconsolidated trust, formed for the purpose of issuing
four months of 2023 this amount totaled approximately
redeemable Income Trust Securities (“ITS”) to third-party
$140.3 billion. In most cases, this contingent liability is
investors, originally investing the proceeds in junior
unlikely to arise, as most products and services are
subordinated debt securities (“Debentures”) issued by the
delivered when purchased and amounts are refunded when
Company and entering into stock purchase contracts to
items are returned to merchants. However, where the
purchase the Company’s preferred stock in the future. As of
product or service has been purchased but is not provided
December 31, 2023, all of the Debentures issued by the
until a future date (“future delivery”), the potential for this
Company have either matured or been retired. Total assets
contingent liability increases. To mitigate this risk, the
of USB Capital IX were $686 million at December 31, 2023,
Company may require the merchant to make an escrow
consisting primarily of the Company’s Series A Preferred
deposit, place maximum volume limitations on future
Stock. The Company’s obligations under the transaction
delivery transactions processed by the merchant at any
documents, taken together, have the effect of providing a
point in time, or require various credit enhancements
full and unconditional guarantee by the Company, on a
(including letters of credit and bank guarantees). Also,
junior subordinated basis, of the payment obligations of the
merchant processing contracts may include event triggers to
trust to third-party investors totaling $685 million at
provide the Company more financial and operational control
December 31, 2023.
in the event of financial deterioration of the merchant.
The Company has also made other financial
The Company currently processes card transactions in
performance guarantees and commitments primarily related
the United States, Canada and Europe through wholly-
to the operations of its subsidiaries. At December 31, 2023,
owned subsidiaries. In the event a merchant was unable to
the maximum potential future payments guaranteed or
fulfill product or services subject to future delivery, such as
committed by the Company under these arrangements were
airline tickets, the Company could become financially liable
approximately $2.0 billion.
for refunding the purchase price of such products or
services purchased through the credit card associations
Litigation and Regulatory Matters
under the charge-back provisions. Charge-back risk related
to these merchants is evaluated in a manner similar to credit The Company is subject to various litigation and regulatory
risk assessments and, as such, merchant processing matters that arise from the conduct of its business activities.
contracts contain various provisions to protect the Company The Company establishes reserves for such matters when
in the event of default. At December 31, 2023, the value of potential losses become probable and can be reasonably
airline tickets purchased to be delivered at a future date estimated. The Company believes the ultimate resolution of
through card transactions processed by the Company was existing legal and regulatory matters will not have a material
$13.1 billion. The Company held collateral of $679 million in adverse effect on the financial condition, results of
escrow deposits, letters of credit and indemnities from

132 U.S. Bancorp 2023 Annual Report

operations or cash flows of the Company. However, in light all pending examinations, inquiries and investigations, any
of the uncertainties inherent in these matters, it is possible of which could lead to administrative or legal proceedings or
that the ultimate resolution of one or more of these matters settlements. Remedies in these proceedings or settlements
may have a material adverse effect on the Company’s may include fines, penalties, restitution or alterations in the
results of operations for a particular period, and future Company’s business practices (which may increase the
changes in circumstances or additional information could Company’s operating expenses and decrease its revenue).
result in additional accruals or resolution in excess of On December 19, 2023, USBNA agreed to the issuance
established accruals, which could adversely affect the of consent orders with the OCC and the Consumer Financial
Company’s results of operations, potentially materially. Protection Bureau (“CFPB”) resolving the previously
disclosed investigations of the Company's administration of
Residential Mortgage-Backed Securities Litigation
unemployment insurance benefit prepaid debit cards during
Starting in 2011, the Company and other large financial
the pandemic timeframe. Also, on February 9, 2024, the
institutions have been sued in their capacity as trustee for
SEC announced a settlement with U.S. Bancorp
residential mortgage–backed securities trusts for losses
Investments, Inc., resolving the previously disclosed inquiry
arising out of the 2008 financial crisis. In the lawsuits
regarding record retention requirements relating to
brought against the Company, the investors allege that the
electronic business communications. The Commodity
Company’s banking subsidiary, USBNA, as trustee caused
Futures Trading Commission (“CFTC”) has conducted an
them to incur substantial losses by failing to enforce loan
inquiry concerning similar issues and the Company is
repurchase obligations and failing to abide by appropriate
currently in resolution discussions with the CFTC on that
standards of care after events of default allegedly occurred.
matter. The financial impact of the resolution of these
The plaintiffs in these matters seek monetary damages in
matters was not material to the Company's financial
unspecified amounts and most also seek equitable relief.
condition, results of operations or cash flows and the
Regulatory Matters The Company is continually subject to anticipated resolution of the CFTC matter is also not
examinations, inquiries, investigations and other forms of expected to be material.
regulatory and governmental inquiry or scrutiny covering a Outlook Due to their complex nature, it can be years before
wide range of issues in its financial services businesses litigation and regulatory matters are resolved. The Company
including in areas of heightened regulatory scrutiny, such as may be unable to develop an estimate or range of loss
compliance, risk management, third-party risk management where matters are in early stages, there are significant
and consumer protection. In some cases, these matters are factual or legal issues to be resolved, damages are
part of reviews of specified activities at multiple industry unspecified or uncertain, or there is uncertainty as to a
participants; in others, they are directed at the Company litigation class being certified or the outcome of pending
individually. For example, the Division of Enforcement of the motions, appeals or proceedings. For those litigation and
SEC has been investigating U.S. Bancorp Fund Services, regulatory matters where the Company has information to
LLC (“USBFS”), a subsidiary of USBNA, relating to its role develop an estimate or range of loss, the Company believes
providing fund administration services to a third-party the upper end of the range of reasonably possible losses in
investment fund. This investment fund was advised by an aggregate, in excess of any reserves established for matters
investment adviser who engaged in fraud, and USBFS was where a loss is considered probable, will not be material to
not affiliated with the investment adviser and did not provide its financial condition, results of operations or cash flows.
any advisory services to the fund. The Division of The Company’s estimates are subject to significant
Enforcement has made a preliminary determination to judgment and uncertainties, and the matters underlying the
recommend that the SEC file an enforcement action against estimates will change from time to time. Actual results may
USBFS, and USBFS is in the process of responding to the vary significantly from the current estimates.
SEC on this matter. The Company is cooperating fully with

NOTE 24 Business Segments

Within the Company, financial performance is measured by services to wealth, middle market, large corporate,
major lines of business based on the products and services government and institutional clients.
provided to customers through its distribution channels.
Consumer and Business Banking Consumer and
These operating segments are components of the Company
Business Banking comprises consumer banking, small
about which financial information is prepared and is
business banking and consumer lending. Products and
evaluated regularly by management in deciding how to
services are delivered through banking offices, telephone
allocate resources and assess performance. The Company
servicing and sales, online services, direct mail, ATM
has the following reportable operating segments:
processing, mobile devices, distributed mortgage loan
Wealth, Corporate, Commercial and Institutional officers, and intermediary relationships including auto
Banking Wealth, Corporate, Commercial and Institutional dealerships, mortgage banks, and strategic business
Banking provides core banking, specialized lending, partners.
transaction and payment processing, capital markets, asset
Payment Services Payment Services includes consumer
management, and brokerage and investment related
and business credit cards, stored-value cards, debit cards,

133
corporate, government and purchasing card services and and Corporate Support. Noninterest income and expenses
merchant processing. directly managed by each business segment, including fees,
service charges, salaries and benefits, and other direct
Treasury and Corporate Support Treasury and Corporate
revenues and costs are accounted for within each
Support includes the Company’s investment portfolios,
segment’s financial results in a manner similar to the
funding, capital management, interest rate risk
consolidated financial statements. Occupancy costs are
management, income taxes not allocated to business
allocated based on utilization of facilities by the business
segments, including most investments in tax-advantaged
segments. Generally, operating losses are charged to the
projects, and the residual aggregate of those expenses
business segment when the loss event is realized in a
associated with corporate activities that are managed on a
manner similar to a loan charge-off. Noninterest expenses
consolidated basis.
incurred by centrally managed operations or business
Basis of Presentation Business segment results are segments that directly support another business segment’s
derived from the Company’s business unit profitability operations are charged to the applicable business segment
reporting systems by specifically attributing managed based on its utilization of those services, primarily measured
balance sheet assets, deposits and other liabilities and their by the volume of customer activities, number of employees
related income or expense. The allowance for credit losses or other relevant factors. These allocated expenses are
and related provision expense are allocated to the business reported as net shared services expense within noninterest
segments according to the volume and credit quality of the expense. Certain activities that do not directly support the
loan balances managed, but with the impact of changes in operations of the business segments or for which the
economic forecasts recorded in Treasury and Corporate business segments are not considered financially
Support. Goodwill and other intangible assets are assigned accountable in evaluating their performance are not charged
to the business segments based on the mix of business of to the business segments. The income or expenses
an entity acquired by the Company. Within the Company, associated with these corporate activities, including merger
capital levels are evaluated and managed centrally; and integration charges, are reported within the Treasury
however, capital is allocated to the business segments to and Corporate Support business segment. Income taxes are
support evaluation of business performance. Business assessed to each business segment at a standard tax rate
segments are allocated capital on a risk-adjusted basis with the residual tax expense or benefit to arrive at the
considering economic and regulatory capital requirements. consolidated effective tax rate included in Treasury and
Generally, the determination of the amount of capital Corporate Support.
allocated to each business segment includes credit Designations, assignments and allocations change from
allocations following a Basel III regulatory framework. time to time as management systems are enhanced,
Interest income and expense is determined based on the methods of evaluating performance or product lines change
assets and liabilities managed by the business segment. or business segments are realigned to better respond to the
Because funding and asset/liability management is a central Company’s diverse customer base. During 2023, certain
function, funds transfer-pricing methodologies are utilized to organization and methodology changes were made,
allocate a cost of funds used or credit for funds provided to including the Company combining its Wealth Management
all business segment assets and liabilities, respectively, and Investment Services and Corporate and Commercial
using a matched funding concept. Also, each business unit Banking lines of businesses to create the Wealth,
is allocated the taxable-equivalent benefit of tax-exempt Corporate, Commercial and Institutional Banking line of
products. The residual effect on net interest income of business during the third quarter. Prior period results were
asset/liability management activities is included in Treasury restated and presented on a comparable basis.

134 U.S. Bancorp 2023 Annual Report

Business segment results for the years ended December 31 were as follows:
Wealth, Corporate,
Commercial and Consumer and Business
Institutional Banking Banking Payment Services
(Dollars in Millions) 2023 2022 2023 2022 2023 2022

Condensed Income Statement

Net interest income (taxable-equivalent basis) $ 6,129 $ 5,213 $ 8,331 $ 6,764 $ 2,702 $ 2,504
(a) (a)
Noninterest income 4,143 3,561 1,662 1,536 4,056 3,794
Total net revenue 10,272 8,774 9,993 8,300 6,758 6,298
Noninterest expense 5,183 4,135 6,964 5,779 3,772 3,525
Income (loss) before provision and income taxes 5,089 4,639 3,029 2,521 2,986 2,773
Provision for credit losses 334 154 79 75 1,394 980
Income (loss) before income taxes 4,755 4,485 2,950 2,446 1,592 1,793
Income taxes and taxable-equivalent adjustment 1,190 1,122 738 612 398 449
Net income (loss) 3,565 3,363 2,212 1,834 1,194 1,344
Net (income) loss attributable to noncontrolling interests — — — — — —
Net income (loss) attributable to U.S. Bancorp $ 3,565 $ 3,363 $ 2,212 $ 1,834 $ 1,194 $ 1,344

Average Balance Sheet

Loans $175,780 $150,512 $161,862 $144,441 $38,471 $34,627
Other earning assets 6,615 4,771 2,388 3,117 97 634
Goodwill 4,682 3,634 4,466 3,250 3,327 3,305
Other intangible assets 1,007 365 5,265 3,784 350 423
Assets 202,642 169,554 179,103 160,174 44,292 41,072
Noninterest-bearing deposits 70,977 82,671 31,082 31,719 2,981 3,410
Interest-bearing deposits 199,780 175,345 189,148 163,190 103 162
Total deposits 270,757 258,016 220,230 194,909 3,084 3,572
Total U.S. Bancorp shareholders’ equity 22,362 18,159 16,016 12,678 9,310 8,233

Treasury and Corporate

Support Consolidated Company
(Dollars in Millions) 2023 2022 2023 2022

Condensed Income Statement

Net interest income (taxable-equivalent basis) $ 365 $ 365 $ 17,527 $ 14,846
Noninterest income 756 565 10,617 (b) 9,456 (b)

Total net revenue 1,121 930 28,144 24,302

Noninterest expense 2,954 1,467 18,873 14,906
Income (loss) before provision and income taxes (1,833) (537) 9,271 9,396
Provision for credit losses 468 768 2,275 1,977
Income (loss) before income taxes (2,301) (1,305) 6,996 7,419
Income taxes and taxable-equivalent adjustment (788) (602) 1,538 1,581
Net income (loss) (1,513) (703) 5,458 5,838
Net (income) loss attributable to noncontrolling interests (29) (13) (29) (13)
Net income (loss) attributable to U.S. Bancorp $ (1,542) $ (716) $ 5,429 $ 5,825

Average Balance Sheet

Loans $ 5,162 $ 3,993 $381,275 $333,573
Other earning assets 214,824 203,248 223,924 211,770
Goodwill — — 12,475 10,189
Other intangible assets 17 5 6,639 4,577
Assets 237,403 221,349 663,440 592,149
Noninterest-bearing deposits 2,728 2,594 107,768 120,394
Interest-bearing deposits 8,864 3,293 397,895 341,990
Total deposits 11,592 5,887 505,663 462,384
Total U.S. Bancorp shareholders’ equity 5,972 11,346 53,660 50,416
(a) Presented net of related rewards and rebate costs and certain partner payments of $3.0 billion and $2.9 billion for 2023 and 2022, respectively.
(b) Includes revenue generated from certain contracts with customers of $8.8 billion and $8.0 billion for 2023 and 2022, respectively.

135
NOTE 25 U.S. Bancorp (Parent Company)

Condensed Balance Sheet

At December 31 (Dollars in Millions) 2023 2022

Assets
Due from banks, principally interest-bearing $ 11,585 $ 5,288
Available-for-sale investment securities 662 672
Investments in bank subsidiaries 61,495 59,202
Investments in nonbank subsidiaries 3,884 3,575
Advances to bank subsidiaries 12,100 9,100
Advances to nonbank subsidiaries 159 150
Other assets 974 1,101
Total assets $ 90,859 $ 79,088
Liabilities and Shareholders’ Equity
Long-term debt $ 34,332 $ 26,983
Other liabilities 1,221 1,339
Shareholders’ equity 55,306 50,766
Total liabilities and shareholders’ equity $ 90,859 $ 79,088

Condensed Income Statement

Year Ended December 31 (Dollars in Millions) 2023 2022 2021

Income
Dividends from bank subsidiaries $ 4,869 $ 4,750 $ 7,000
Dividends from nonbank subsidiaries 11 105 2
Interest from subsidiaries 606 119 112
Other income 51 31 46
Total income 5,537 5,005 7,160
Expense
Interest expense 1,336 505 348
Other expense 137 162 154
Total expense 1,473 667 502
Income before income taxes and equity in undistributed income of subsidiaries 4,064 4,338 6,658
Applicable income taxes (170) (138) (53)
Income of parent company 4,234 4,476 6,711
Equity in undistributed income of subsidiaries 1,195 1,349 1,252
Net income attributable to U.S. Bancorp $ 5,429 $ 5,825 $ 7,963

136 U.S. Bancorp 2023 Annual Report

Condensed Statement of Cash Flows
Year Ended December 31 (Dollars in Millions) 2023 2022 2021

Operating Activities
Net income attributable to U.S. Bancorp $ 5,429 $ 5,825 $ 7,963
Adjustments to reconcile net income to net cash provided by operating activities
Equity in undistributed income of subsidiaries (1,195) (1,349) (1,252)
Other, net 83 (398) (85)
Net cash provided by operating activities 4,317 4,078 6,626
Investing Activities
Proceeds from sales and maturities of investment securities 25 423 200
Investments in subsidiaries — (5,030) —
Net (increase) decrease in short-term advances to subsidiaries (9) 557 411
Long-term advances to subsidiaries (7,500) (2,000) (7,000)
Principal collected on long-term advances to subsidiaries 4,500 2,500 1,250
Cash paid for acquisition — (5,500) —
Other, net 172 (173) (269)
Net cash used in investing activities (2,812) (9,223) (5,408)
Financing Activities
Proceeds from issuance of long-term debt 8,150 8,150 1,300
Principal payments or redemption of long-term debt (936) (2,300) (3,000)
Proceeds from issuance of preferred stock — 437 2,221
Proceeds from issuance of common stock 951 21 43
Repurchase of preferred stock — (1,100) (1,250)
Repurchase of common stock (62) (69) (1,555)
Cash dividends paid on preferred stock (341) (299) (308)
Cash dividends paid on common stock (2,970) (2,776) (2,579)
Net cash provided by (used in) financing activities 4,792 2,064 (5,128)
Change in cash and due from banks 6,297 (3,081) (3,910)
Cash and due from banks at beginning of year 5,288 8,369 12,279
Cash and due from banks at end of year $ 11,585 $ 5,288 $ 8,369

Transfer of funds (dividends, loans or advances) from bank Dividend payments to the Company by its subsidiary bank
subsidiaries to the Company is restricted. Federal law requires are subject to regulatory review and statutory limitations and,
loans to the Company or its affiliates to be secured and in some instances, regulatory approval. In general, dividends
generally limits loans to the Company or an individual affiliate by the Company’s bank subsidiary to the parent company are
to 10 percent of each bank’s unimpaired capital and surplus. In limited by rules which compare dividends to net income for
the aggregate, loans to the Company and all affiliates cannot regulatorily-defined periods. Furthermore, dividends are
exceed 20 percent of each bank’s unimpaired capital and restricted by minimum capital constraints for all national banks.
surplus.

NOTE 26 Subsequent Events

none of these events were required to be recognized or
The Company has evaluated the impact of events that have
disclosed in the consolidated financial statements and
occurred subsequent to December 31, 2023 through the
related notes.
date the consolidated financial statements were filed with
the SEC. Based on this evaluation, the Company has
determined

137
U.S. Bancorp
Consolidated Daily Average Balance Sheet and Related Yields and Rates(a)
(Unaudited)
2023 2022 2021
Yields Yields Yields
Year Ended December 31 Average and Average and Average and
(Dollars in Millions) Balances Interest Rates Balances Interest Rates Balances Interest Rates
Assets
Investment securities $162,757 $ 4,566 2.81% $169,442 $ 3,457 2.04% $154,702 $ 2,434 1.57%
Loans held for sale 2,461 147 5.98 3,829 201 5.26 8,024 232 2.89
Loans(b)
Commercial 134,883 8,662 6.42 123,797 4,340 3.51 102,855 2,684 2.61
Commercial real estate 54,646 3,384 6.19 41,098 1,655 4.03 38,781 1,219 3.14
Residential mortgages 115,922 4,305 3.71 84,749 2,775 3.27 74,629 2,477 3.32
Credit card 26,570 3,429 12.91 23,478 2,583 11.00 21,645 2,278 10.52
Other retail 49,254 2,599 5.28 60,451 2,292 3.79 59,055 2,126 3.60
Total loans 381,275 22,379 5.87 333,573 13,645 4.09 296,965 10,784 3.63
Interest-bearing deposits with banks 49,000 2,581 5.27 31,425 559 1.78 39,914 42 .10
Other earning assets 9,706 471 4.85 7,074 204 2.89 6,536 101 1.55
Total earning assets 605,199 30,144 4.98 545,343 18,066 3.31 506,141 13,593 2.69
Allowance for loan losses (7,138) (5,880) (6,326)
Unrealized gain (loss) on investment securities (7,985) (6,914) 1,174
Other assets 73,364 59,600 55,543
Total assets $663,440 $592,149 $556,532
Liabilities and Shareholders’ Equity
Noninterest-bearing deposits $107,768 $120,394 $127,204
Interest-bearing deposits
Interest checking 129,341 1,334 1.03 117,471 277 .24 103,198 24 .02
Money market savings 166,272 5,654 3.40 126,221 1,220 .97 117,093 199 .17
Savings accounts 55,590 90 .16 67,722 10 .02 62,294 7 .01
Time deposits 46,692 1,697 3.63 30,576 365 1.19 24,492 90 .37
Total interest-bearing deposits 397,895 8,775 2.21 341,990 1,872 .55 307,077 320 .10
Short-term borrowings
Federal funds purchased 435 21 4.72 687 8 1.12 1,507 2 .10
Securities sold under agreements to
repurchase 3,103 125 4.04 2,037 20 1.00 1,790 2 .13
Commercial paper 7,800 268 3.44 7,186 69 .96 7,228 1 .01
Other short-term borrowings 22,803 1,563 6.85 15,830 471 2.98 4,249 65 1.54
Total short-term borrowings 34,141 1,977 5.79 25,740 568 2.21 14,774 70 .47
Long-term debt 44,142 1,865 4.22 33,114 780 2.35 36,682 603 1.64
Total interest-bearing liabilities 476,178 12,617 2.65 400,844 3,220 .80 358,533 993 .28
Other liabilities 25,369 20,029 16,353
Shareholders’ equity
Preferred equity 6,808 6,761 6,255
Common equity 46,852 43,655 47,555
Total U.S. Bancorp shareholders’ equity 53,660 50,416 53,810
Noncontrolling interests 465 466 632
Total equity 54,125 50,882 54,442
Total liabilities and equity $663,440 $592,149 $556,532
Net interest income $17,527 $14,846 $12,600
Gross interest margin 2.33% 2.51% 2.41%
Gross interest margin without taxable-
equivalent increments 2.31% 2.49% 2.39%
Percent of Earning Assets
Interest income 4.98% 3.31% 2.69%
Interest expense 2.08 .59 .20
Net interest margin 2.90% 2.72% 2.49%
Net interest margin without taxable-equivalent
increments 2.88% 2.70% 2.47%
(a) Interest and rates are presented on a fully taxable-equivalent basis based on a federal income tax rate of 21 percent.
(b) Interest income and rates on loans include loan fees. Nonaccrual loans are included in average loan balances.

138 U.S. Bancorp 2023 Annual Report

U.S. Bancorp
Supplemental Financial Data (Unaudited)
Earnings Per Common Share Summary 2023 2022 2021

Earnings per common share $ 3.27 $ 3.69 $ 5.11

Diluted earnings per common share 3.27 3.69 5.10
Dividends declared per common share 1.93 1.88 1.76
Other Statistics (Dollars and Shares in Millions)

Common shares outstanding(a) 1,558 1,531 1,484

Average common shares outstanding and common stock equivalents
Earnings per common share 1,543 1,489 1,489
Diluted earnings per common share 1,543 1,490 1,490
Number of shareholders(b) 29,094 30,280 31,111
Common dividends declared $ 3,000 $ 2,829 $ 2,630
(a) Defined as total common shares issued less common stock held in treasury at December 31.
(b) Based on number of common stock shareholders of record at December 31.

The common stock of U.S. Bancorp is traded on the New York Stock Exchange, under the ticker symbol “USB.” At January 31,
2024, there were 29,006 holders of record of the Company’s common stock.

Stock Performance Chart

The following chart compares the cumulative total shareholder return on the Company’s common stock during the five years
ended December 31, 2023, with the cumulative total return on the Standard & Poor’s 500 Index and the KBW Bank Index. The
comparison assumes $100 was invested on December 31, 2018, in the Company’s common stock and in each of the foregoing
indices and assumes the reinvestment of all dividends. The comparisons in the graph are based upon historical data and are not
indicative of, nor intended to forecast, future performance of the Company’s common stock.

Total Return
220

200 207
200

180
169
164
156
160

136 136
140 133 132
134
122
131 116
120
110

100
110
100
2018 2019 2020 2021 2022 2023

USB S&P 500 KBW Bank Index (BKX)

139
 Company’s wholly-owned subsidiary, Elavon, Inc.
Company Information (“Elavon”), provides domestic merchant processing services
directly to merchants. Wholly-owned subsidiaries of Elavon
General Business Description U.S. Bancorp is a financial provide similar merchant services in Canada and segments
services holding company headquartered in Minneapolis, of Europe. The Company also provides corporate trust and
Minnesota, serving millions of local, national and global fund administration services in Europe. These foreign
customers. U.S. Bancorp is registered as a bank holding operations are not significant to the Company.
company under the Bank Holding Company Act of 1956 (the As of December 31, 2023, U.S. Bancorp employed more
“BHC Act”), and has elected to be treated as a financial than 75,000 people.
holding company under the BHC Act. The Company
provides a full range of financial services, including lending Risk Factors
and depository services, cash management, capital An investment in the Company involves risk, including the
markets, and trust and investment management services. It possibility that the value of the investment could fall
also engages in credit card services, merchant and ATM substantially and that dividends or other distributions on the
processing, mortgage banking, insurance, brokerage and investment could be reduced or eliminated. Below are
leasing. material risk factors that make an investment in the
U.S. Bancorp’s banking subsidiary, USBNA, is engaged Company speculative or risky.
in the general banking business, principally in domestic
markets, and holds all of the Company's consolidated Economic and Market Conditions Risk
deposits of $512.3 billion at December 31, 2023. USBNA
provides a wide range of products and services to Deterioration in business and economic conditions
individuals, businesses, institutional organizations, could adversely affect the Company’s lending business
governmental entities and other financial institutions. and the value of loans and debt securities it holds The
Commercial and consumer lending services are principally Company’s business activities and earnings are affected by
offered to customers within the Company’s domestic general business conditions in the United States and
markets, to domestic customers with foreign operations and abroad, including factors such as the level and volatility of
to large national customers operating in specific industries short-term and long-term interest rates, inflation, home
targeted by the Company, such as healthcare, utilities, oil prices, unemployment and under-employment levels,
and gas, and state and municipal government. Lending bankruptcies, household income, consumer spending,
services include traditional credit products as well as credit fluctuations in both debt and equity capital markets, liquidity
card services, lease financing and import/export trade, of the global financial markets, the availability and cost of
asset-backed lending, agricultural finance and other capital and credit, investor sentiment and confidence in the
products. Depository services include checking accounts, financial markets, the strength of the domestic and global
savings accounts and time certificate contracts. Ancillary economies in which the Company operates, and customer
services such as capital markets, treasury management and deposit behavior. These conditions can change suddenly
receivable lock-box collection are provided to corporate and and negatively. For example, changes in these conditions
governmental entity customers. U.S. Bancorp’s bank and caused by the COVID-19 pandemic adversely affected the
trust subsidiaries provide a full range of asset management Company’s consumer and commercial businesses and
and fiduciary services for individuals, estates, foundations, securities portfolios, its level of charge-offs and provision for
business corporations and charitable organizations. credit losses, and its results of operations from the start of
Other U.S. Bancorp non-banking subsidiaries offer the pandemic in early 2020 through 2022, and changes in
investment and insurance products to the Company’s these conditions caused by Russia’s invasion of Ukraine
customers principally within its domestic markets, and fund impacted the Company’s results of operations in 2022 and
administration services to a broad range of mutual and other 2023. Inflation continued to impact the Company’s financial
funds. condition in 2023, as the COVID-19 era fiscal and monetary
Banking and investment services are provided through a stimulus as well as geopolitical pressures continued to drive
network of 2,274 banking offices across 26 states as of inflationary pressure. Further, recent bank failures prompted
December 31, 2023, principally operating in the Midwest by sudden and significant withdrawals of deposits at the
and West regions of the United States. A significant failing banks resulted in significant volatility in the stock
percentage of consumer transactions are completed using prices of certain financial services institutions. In addition,
USBNA's digital banking services, both online and through volatility due to failures of other banks or general uncertainty
its digital app. The Company operates a network of 4,524 regarding the health of banks may affect customer deposit
ATMs as of December 31, 2023, and provides 24-hour, behavior and cause deposit withdrawals. Other future
seven day a week telephone customer service. Mortgage changes in these conditions, whether related to a pandemic,
banking services are provided through banking offices and the war in Ukraine, conflict in the Middle East, the threat or
loan production offices throughout the Company’s domestic occurrence of a U.S. sovereign default or government
markets. Lending products may be originated through shutdown, disruptions in the financial services industry or
banking offices, indirect correspondents, brokers or other otherwise, could have additional adverse effects on the
lending sources. The Company is also one of the largest Company and its businesses.
providers of corporate and purchasing card services and Given the high percentage of the Company’s assets
corporate trust services in the United States. The represented directly or indirectly by loans, and the

140 U.S. Bancorp 2023 Annual Report

importance of lending to its overall business, weak of federal insurance premiums. This may cause USBNA to
economic conditions have in the past negatively affected, lose some of its low-cost deposit funding. Customers may
and may continue to negatively affect, the Company’s also continue to move noninterest-bearing deposits into
business and results of operations, including new loan interest-bearing accounts, thus increasing overall deposit
origination activity, existing loan utilization rates and costs. Higher funding costs may reduce the Company’s net
delinquencies, defaults and the ability of customers to meet interest margin and net interest income. A prolonged period
obligations under the loans. In addition, future deterioration of high or increasing interest rates may cause the Company
in economic conditions could have adverse effects on loan to experience an acceleration of deposit migration, which
origination activity, loan utilization rates and delinquencies, could adversely affect the Company’s operations and
defaults and the ability of customers to meet loan liquidity. This risk is exacerbated by technological
obligations. The value to the Company of other assets such developments and trends in customer behavior, including
as investment securities, most of which are debt securities the ease and speed with which deposits may be transferred
or other financial instruments supported by loans, similarly electronically, particularly by a growing number of
have been, and would be, negatively impacted by customers who maintain accounts with multiple banks.
widespread decreases in credit quality resulting from a United States interest rates fell dramatically during the
weakening of the economy. first quarter of 2020 and remained low through 2021, which
In addition, volatility and uncertainty related to inflation or adversely affected the Company’s net interest income. The
a possible recession and their effects, which could Federal Reserve Board raised benchmark interest rates
potentially continue to contribute to poor economic throughout 2022 and 2023, and may continue to raise
conditions, may contribute to or enhance some of the risks interest rates in response to economic conditions,
described herein. For example, higher inflation, slower particularly inflationary pressures, or may lower interest
growth or a recession could reduce demand for the rates in future periods.
Company’s products, adversely affect the creditworthiness When interest rates are increasing, the Company can
of its borrowers or result in lower values for its interest- generally be expected to earn higher net interest income,
earning assets and investment securities. In 2023, demand and conversely, decreasing interest rates can adversely
for borrowing from both corporate and consumer customers, impact the Company's net interest income. However, higher
specifically for residential mortgage and auto loans, slowed interest rates can also lead to fewer originations of loans,
as borrowing costs rose due to increased interest rates. less liquidity in the financial markets, and higher funding
Any of these effects, or others that the Company is not able costs, each of which could adversely affect the Company’s
to predict, could adversely affect its financial condition or revenues and its liquidity and capital levels. In 2022 and
results of operations. 2023, as a result of the high interest rate environment, the
Any deterioration in global economic conditions could Company earned higher net interest income but
damage the domestic economy or negatively affect the experienced fewer originations of mortgage loans and
Company’s borrowers or other counterparties that have higher funding costs, and the Company expects these
direct or indirect exposure to these regions. Such global effects to continue in the future if interest rates remain
disruptions, including disruptions in supply chains or elevated or increase further. Higher interest rates can also
geopolitical risk, can undermine investor confidence, cause negatively affect the payment performance on loans that are
a contraction of available credit, or create market volatility, linked to variable interest rates. If borrowers of variable rate
any of which could have material adverse effects on the loans are unable to afford higher interest payments, those
Company’s businesses, results of operations, financial borrowers may reduce or stop making payments, thereby
condition and liquidity, even if the Company’s direct causing the Company to incur losses and increased
exposure to the affected region is limited. Global political operational costs related to servicing a higher volume of
trends toward nationalism and isolationism could increase delinquent loans.
the probability of a deterioration in global economic
The Company’s results may be materially affected by
conditions.
market fluctuations and significant changes in the value
Changes in interest rates have in the past reduced, and of financial instruments The value of securities,
could in the future reduce, the Company’s net interest derivatives and other financial instruments which the
income The Company’s earnings are dependent to a large Company owns or in which it makes markets can be
degree on net interest income, which is the difference materially affected by market fluctuations. Market volatility,
between interest income from loans and investments and illiquid market conditions and other disruptions in the
interest expense on deposits and borrowings. Net interest financial markets may make it extremely difficult to value
income is significantly affected by market rates of interest, certain financial instruments. Subsequent valuations of
which in turn are affected by prevailing economic conditions, financial instruments in future periods, in light of factors then
by the fiscal and monetary policies of the federal prevailing, may result in significant changes in the value of
government and by the policies of various regulatory these instruments. In addition, at the time of any disposition
agencies. Volatility in interest rates can also result in the of these financial instruments, the price that the Company
flow of funds away from financial institutions into direct ultimately realizes will depend on the demand and liquidity
investments. Direct investments, such as United States in the market at that time and may be materially lower than
government and corporate securities and other investment their current fair value. Any of these factors could cause a
vehicles (including mutual funds), generally pay higher rates decline in the value of financial instruments that the
of return than financial institutions because of the absence Company owns or in which it makes markets, which may

141
have an adverse effect on the Company’s results of Third parties that facilitate the Company’s business
operations. In addition, losses in the value of the Company’s activities, including exchanges, clearinghouses, payment
investment securities or loan portfolio could affect market and ATM networks, financial intermediaries and vendors
perception of the Company and create volatility in the that provide services or technology solutions for the
Company’s stock price. Losses in the value of the Company’s operations, are also sources of operational and
Company’s investment securities, even if they do not affect security risks to the Company due to operational or
earnings or capital, could also cause some depositors, technical failures of their systems, misconduct or negligence
particularly those who maintain uninsured and by their employees or cyber attacks that could affect their
uncollateralized deposits, to question the stability of USBNA ability to deliver a product or service to the Company,
and to move their deposits away from USBNA. Such events resulting in lost or compromised Company or customer
could negatively affect the Company’s liquidity, financial information. Furthermore, a third party may not reveal an
condition and results of operations. attack or system failure to the Company in a timely manner,
The Company’s risk management and monitoring which could compromise the Company’s ability to respond
processes, including its stress testing framework, seek to effectively. Some of these third parties may engage vendors
quantify and control the Company’s exposure to more of their own, which introduces the risk that the third party’s
extreme market moves. However, the Company’s hedging vendors and subcontractors could be the source of
and other risk management strategies may not be effective, operational and security failures. In addition, if a third party
and it could incur significant losses in the event of obtains access to the customer account data on the
unexpected or unmitigated market volatility. Company’s systems, and that party experiences a breach
via an external or internal threat or misappropriates such
Operations and Business Risk data, the Company and its customers could suffer material
harm, including heightened risk of fraudulent transactions,
A breach in the security of the Company’s information
losses from fraudulent transactions, increased operational
systems, or the information systems of certain third
costs to remediate any security breach and reputational
parties, could disrupt the Company’s businesses, result
harm. These risks are expected to continue to increase as
in the disclosure of confidential information, damage its
the Company expands its interconnectivity with its
reputation and create significant financial and legal
customers and other third parties.
exposure The Company continues to experience an
Within the past several years, multiple companies have
increasing number of attempted attacks on its information
disclosed significant cybersecurity breaches affecting debit
systems, software, networks and other technologies.
and credit card accounts of their customers, some of whom
Although the Company devotes significant resources to
were the Company’s cardholders and who may experience
maintain, improve, and regularly upgrade its systems and
fraud on their card accounts because of the breach. The
processes that are designed to protect the security of the
Company has suffered, and will in the future suffer, losses
Company’s computer systems, software, networks,
associated with reimbursing its customers for such
technologies and intellectual property, and to protect the
fraudulent transactions and for other costs related to data
confidentiality, integrity and availability of information
security compromise events, such as replacing cards
belonging to the Company, its employees, and its
associated with compromised card accounts. These attacks
customers, the Company’s security measures may not be
involving Company cards are likely to continue and could,
effective against new threats. Malicious actors continue to
individually or in the aggregate, have a material adverse
develop increasingly sophisticated cyber attacks that could
effect on the Company’s financial condition or results of
impact the Company. Many financial institutions, retailers
operations.
and other companies engaged in data processing, including
The Company may not be able to anticipate or to
software and information technology service providers, have
implement effective preventive measures against all
reported cyber attacks, some of which involved
cyberattacks because malicious actor methods and
sophisticated and targeted attacks intended to obtain
techniques change frequently, increase in sophistication,
unauthorized access to confidential information, destroy
often are not recognized until launched, sometimes go
data, disable or degrade service, or sabotage systems,
undetected even when successful, and originate from a
often through the introduction of software that is intentionally
wide variety of sources, including organized crime, hackers,
included or inserted in an information system for a harmful
terrorists, activists, hostile foreign governments and other
purpose (malware).
external parties. Those parties may also attempt to
Attacks on financial or other institutions important to the
fraudulently induce employees, customers or other users of
overall functioning of the financial system could also
the Company’s systems to disclose sensitive information to
adversely affect, directly or indirectly, aspects of the
gain access to the Company’s data or that of its customers
Company’s businesses. The increasing consolidation,
or clients, such as through “phishing” and other social
interdependence and complexity of financial entities and
engineering schemes. For example, recent advances in
technology systems increases the risk of operational failure,
artificial intelligence may allow a bad actor to create so-
both for the Company and on an industry-wide basis, and
called “deep fakes” to impersonate the voice or likeness of
means that a technology failure, cyber attack, or other
another individual, which could be used in social
information or security breach that significantly degrades,
engineering schemes that may be more difficult to detect
deletes or compromises the systems or data of one or more
than other social engineering efforts. Other types of attacks
financial entities could materially affect the Company,
may include the introduction of computer viruses and/or
counterparties or other market participants.

142 U.S. Bancorp 2023 Annual Report

malicious or destructive code, denial-of-service attacks significant disruption to the operating systems that support
(DDoS), and cyber extortion with accompanying ransom its businesses and customers. The Company’s backup
demands. The Company’s information security risks may systems could become compromised, which could
increase in the future as the Company continues to increase negatively impact the ability to back up data.
its mobile and internet-based product offerings and expands The Company could also incur losses resulting from the
its internal usage of web-based products and applications. risk of human error by employees, misconduct or fraud by
In addition, the Company’s customers often use their own employees or persons outside the Company, unauthorized
devices, such as computers, smart phones and tablet access to its computer systems, the execution of
computers, to make payments and manage their accounts, unauthorized transactions by employees, errors relating to
and are subject to “phishing,” scam websites, and other transaction processing and technology, breaches of the
attempts from cyber criminals to compromise or deny internal control system and compliance requirements, and
access to their accounts. The Company has limited ability to failures of business continuation and disaster recovery
assure the safety and security of its customers’ transactions processes and systems. This risk of loss also includes
with the Company to the extent they are using their own customer remediation costs, potential legal actions, fines or
devices, which have been, and likely will continue to be, civil money penalties that could arise resulting from an
subject to such threats. operational deficiency or noncompliance with applicable
If the Company’s physical or cybersecurity systems are regulatory standards, adverse business decisions or their
penetrated or circumvented, or an authorized user implementation, and customer attrition due to potential
intentionally or unintentionally removes, loses or destroys negative publicity.
critical business data, serious negative consequences for Third parties provide key components of the Company’s
the Company can follow, including significant disruption of business infrastructure, such as internet connections, cloud
the Company’s operations, misappropriation of confidential services, network access and mutual fund distribution. Any
Company and/or customer information, or damage to the problems caused by third-party service providers, including
Company’s, customers’ or counterparties’ computers or failing to comply with their contractual obligations or
systems. These consequences could result in violations of performing their services negligently, could adversely affect
applicable privacy and other laws; financial loss to the the Company’s ability to deliver products and services to the
Company or to its customers; loss of confidence in the Company’s customers and otherwise to conduct its
Company’s security measures; customer dissatisfaction; business. Replacing third-party service providers could also
significant litigation exposure; regulatory investigations, entail significant delay and expense. In addition, failure of
fines, penalties or intervention; reimbursement or other third-party service providers to handle current or higher
compensatory costs (including the costs of credit monitoring volumes of use could adversely affect the Company’s ability
services); additional compliance costs; and harm to the to deliver products and services to clients and otherwise to
Company’s reputation, all of which could adversely affect conduct business. Technological or financial difficulties of a
the Company. third-party service provider could adversely affect the
Because the investigation of any information security Company’s businesses to the extent those difficulties result
breach is inherently unpredictable and would require in the interruption or discontinuation of services provided by
substantial time to complete, the Company may not be able that party.
to quickly remediate the consequences of any breach, which Operational risks for large financial institutions such as
may increase the costs of, and enhance the negative the Company have generally increased in recent years, in
consequences associated with, a breach. In addition, to the part because of the proliferation of new technologies,
extent the Company’s insurance covers aspects of any implementation of work-from-home and hybrid work
breach, such insurance may not be sufficient to cover all the arrangements, the use of internet services and
Company’s losses. telecommunications technologies to conduct financial
transactions, the increased number and complexity of
The Company relies on its employees, systems and
transactions being processed, and the increased
third parties to conduct its business, and certain
sophistication and activities of organized crime, hackers,
failures by systems or misconduct by employees or
terrorists, activists, and other external parties. In the event
third parties could adversely affect its operations The
of a breakdown in the internal control system, improper
Company operates in many different businesses in diverse
operation of systems or improper employee or third-party
markets and relies on the ability of its employees and
actions, the Company could suffer financial loss, face legal
systems to process a high number of transactions. The
or regulatory action and suffer damage to its reputation.
Company’s business, financial, accounting, data processing,
and other operating systems and facilities may stop The Company could face material legal and reputational
operating properly or become disabled or damaged due to a harm if it fails to safeguard personal information The
number of factors, including events that are out of its Company is subject to complex and evolving laws and
control. In addition to the risks posed by information security regulations, both inside and outside the United States,
breaches, as discussed above, such systems could be governing the privacy and protection of personal
compromised because of spikes in transaction volume, information. Individuals whose personal information may be
electrical or telecommunications outages, degradation or protected by law can include the Company’s customers and
loss of internet or website availability, natural disasters, their customers, prospective customers, job applicants,
political or social unrest, and terrorist acts. The Company’s current and former employees, employees of the
business operations may be adversely affected by Company’s suppliers, and other individuals. Complying with

143
laws and regulations applicable to the Company’s collection, collected from them and the use of such information; to
use, transfer and storage of personal information can receive, document, and honor the privacy preferences
increase operating costs, impact the development and expressed by the Company’s customers; to protect personal
marketing of new products or services, and reduce information from unauthorized disclosure; or to maintain
operational efficiency. Any mishandling or misuse of proper training on privacy practices for all employees or
personal information by the Company or its suppliers could third parties who have access to personal information.
expose the Company to litigation or regulatory fines, Concerns regarding the effectiveness of the Company’s
penalties or other sanctions. For example, a state attorney measures to safeguard personal information and abide by
general recently announced an action against a bank for privacy preferences, or even the perception that those
alleged failure to protect consumer accounts from fraud. measures are inadequate or that the Company does not
In the United States, several states have enacted abide by such privacy preferences, could cause the
consumer privacy laws that impose compliance obligations Company to lose existing or potential customers and
with respect to personal information. In particular, the thereby reduce its revenues. In addition, any failure or
California Consumer Privacy Act (the “CCPA”), as amended perceived failure by the Company to comply with applicable
by the California Privacy Rights Act, and its implementing privacy or data protection laws and regulations could result
regulations impose significant requirements on covered in requirements to modify or cease certain operations or
businesses with respect to consumer data privacy rights. practices, and/or in material liabilities or regulatory fines,
Compliance with the CCPA and other state statutes, penalties, or other sanctions. Refer to “Supervision and
common law, or regulations designed to protect personal Regulation” in the Company’s Annual Report on Form 10-K
information could potentially require substantive technology for additional information regarding data privacy laws and
infrastructure and process changes across many of the regulations. Any of these outcomes could materially damage
Company’s businesses. Non-compliance with the CCPA or the Company’s reputation and otherwise adversely affect its
similar laws and regulations could lead to substantial business.
regulatory fines and penalties, damages from private causes
The Company could lose market share and experience
of action, compelled changes to the Company’s business
increased costs if it does not effectively develop and
practices, and/or reputational harm. The Company cannot
implement new technology The financial services industry
predict whether any pending or future state or federal
is continually undergoing rapid technological change with
legislation will be adopted, or the impact of any such
frequent introductions of new technology-driven products
adopted legislation on the Company. Future legislation
and services, including innovative ways that customers can
could result in substantial costs to the Company and could
make payments or manage their accounts, such as through
have an adverse effect on its business, financial condition,
the use of mobile payments, digital wallets or digital
and results of operations.
currencies. The Company believes its success depends, in
In addition, legal requirements for cross-border personal
part, upon its ability to address customer needs by using
data transfers are constantly changing, including the
technology to provide products and services and create
revisions made by the European Economic Area (“EEA”)
additional efficiencies in the Company’s operations. When
that require the use of revised Standard Contractual
launching a new product or service or introducing a new
Clauses (“SCCs”) for international data transfers from the
platform for the delivery of products and services, the
EEA. The SCCs are required to be used for new
Company might not identify or fully appreciate new
agreements involving the cross-border transfer of personal
operational risks arising from those innovations or might
data from the EEA and must be supplemented by an
inadvertently fail to implement adequate controls to mitigate
assessment and due diligence of the legal and regulatory
those risks. Developing and deploying new technology-
landscape of the jurisdiction of the data importer, the
driven products and services can also involve costs that the
channels used to transmit personal data and any sub-
Company may not recover and divert resources away from
processors that may receive personal data. The United
other product development efforts. The Company may not
Kingdom has developed its own set of SCCs that must be
be able to effectively develop and implement profitable new
used for transfers of personal data from the United Kingdom
technology-driven products and services or be successful in
to the United States. In July 2023, the European
marketing these products and services to its customers.
Commission announced a final adequacy decision for the
Failure to successfully keep pace with technological change
EU-U.S. Data Privacy Framework, a cross-border data
affecting the financial services industry, including because
transfer mechanism that replaced the EU-U.S. Privacy
larger competitors may have more resources to spend on
Shield that was invalidated in 2020. Compliance with this
developing new technologies or because non-bank
changing landscape of privacy requirements could
competitors have a lower cost structure and more flexibility,
potentially compel the Company to make significant
could harm the Company’s competitive position and
technological and operational changes, any of which could
negatively affect its revenue and profit.
result in substantial costs to the Company, and failure to
comply with applicable data transfer or privacy requirements The use of new technologies, including artificial
could subject the Company to fines or regulatory intelligence (“AI”) and machine learning, may result in
investigation or oversight. reputational harm, increased regulatory scrutiny and
Additional risks could arise from the failure of the increased liability The banking industry is subject to rapid
Company or third parties to provide adequate notice to the and significant technological change. To compete
Company’s customers about the personal information effectively, the Company may use new and evolving

144 U.S. Bancorp 2023 Annual Report

technologies, including AI and machine learning, to help and community organizations in response to that conduct.
improve its customer service and products and to automate Additionally, the Company’s stakeholders often hold
certain business decisions or risk management practices. differing views on how the Company should address
The Company's use of AI and machine learning is subject to environmental, social and governance (“ESG”) goals as it
risks that algorithms and datasets are flawed or may be relates to serving customers, including certain “anti-ESG”
insufficient or contain biased information. In addition, the sentiment among some individuals and government
models and processes relating to AI and machine learning institutions. The Company’s approach to ESG and
are not always transparent, which could increase the risk of customers may result in negative attention in traditional and
unintended deficiencies. These deficiencies could result in social media, resulting in a negative perception of the
inaccurate or ineffective decisions, predictions or analysis, Company depending on an individual’s view. In addition,
which could subject the Company to competitive harm, legal failure to deliver against established ESG goals and
liability, increased regulatory scrutiny, reputational harm or objectives could present reputational and financial harm to
other consequences that the Company may not be able to the Company. The Company may also be targeted by
predict, any of which could negatively affect the Company's groups or influential individuals who disagree with its public
financial condition and results of operations. positions on social or environmental issues, which could
result in reduced revenue or reputational harm. If the
The Company may not realize the full value of its
Company is unable to design or execute against business
strategic plans and initiatives As the Company develops
strategies that balance conflicting views on how it supports
its strategic initiatives, it scans the internal and external
ESG initiatives, while continuing to support customers from
environment to inform any changes required, take
differing industries, reputational damage could result,
advantage of new opportunities and/or respond to
leading to a loss of customers or negative investor
unexpected challenges. Initiatives include focusing on
sentiment. As a large diversified financial services company
customer growth with tailored products and experiences that
with a high industry profile, the Company is inherently
meet customer needs; executing disciplined strategies to
exposed to this risk.
grow and maintain sufficient capital levels as part of
In addition, environmental matters have been the subject
preserving the Company’s financial excellence and risk
of increased focus by regulators, particularly with respect to
appetite; acquiring and integrating financial services
the accuracy of statements made by issuers regarding their
businesses or assets; cultivating a future-focused and
ESG practices, initiatives and investment strategies. The
diverse talent strategy; and increasing access to banking
SEC has established an enforcement task force to examine
services and economic empowerment. The Company’s
ESG practices and disclosures by public companies and
initiatives are impacted by internal factors, rapid pace of
identify inaccurate or misleading statements, often referred
change from an evolving competitive landscape, increased
to as “greenwashing.” There have been enforcement actions
cybersecurity threats, accelerated digitalization, and
relating to ESG disclosures and policies and procedures
emerging technologies. In addition, execution is impacted by
failures, and the Company expects that there will be a
the Company’s response to external economic conditions,
greater level of enforcement activity in the future. A
global uncertainty, and regulatory factors that are beyond its
perception or accusation of greenwashing could damage the
control. The Company’s future growth and the value of its
Company’s reputation, result in litigation or enforcement
stock will depend, in part, on its ability to effectively
actions, or adversely affect the Company’s ability to raise
implement its business strategy. If the Company is not able
capital and attract and retain customers.
to successfully execute its business strategy, then the
Company’s competitive position, reputation, prospects for The Company’s business and financial performance
growth, and results of operations may be adversely affected. could be adversely affected, directly or indirectly, by
natural disasters, pandemics, terrorist activities, civil
Damage to the Company’s reputation could adversely
unrest or international hostilities Neither the occurrence
impact its business and financial results Reputation risk,
nor the potential impact of natural disasters, pandemics,
or the risk to the Company’s business, earnings and capital
terrorist activities, civil unrest or international hostilities can
from negative public opinion, is inherent in the Company’s
be predicted. However, these occurrences could impact the
business. Negative public opinion about the financial
Company directly (for example, by interrupting the
services industry generally or the Company specifically
Company’s systems, which could prevent the Company
could adversely affect the Company’s ability to retain and
from obtaining deposits, originating loans and processing
attract stakeholders such as customers, investors, and
and controlling its flow of business; causing significant
employees and could expose the Company to litigation and
damage to the Company’s facilities; or otherwise preventing
regulatory action. Negative public opinion can result from
the Company from conducting business in the ordinary
the Company’s actual or alleged conduct in any number of
course), or indirectly as a result of their impact on the
activities, including lending practices, cybersecurity
Company’s borrowers, depositors, other customers, vendors
breaches, failures to safeguard personal information,
or other counterparties (for example, by damaging
inability to meet community and other stakeholder
properties pledged as collateral for the Company’s loans or
commitments, discriminating or harassing behavior of
impairing the ability of certain borrowers to repay their
employees toward other employees or customers, mortgage
loans). The Company has also suffered, and could in the
servicing and foreclosure practices, compensation practices,
future suffer, adverse consequences to the extent that
sales practices, regulatory compliance, mergers and
natural disasters, pandemics, including the COVID-19
acquisitions, and actions taken by government regulators
pandemic, terrorist activities, civil unrest or international

145
hostilities, including Russia’s invasion of Ukraine and The Company’s business strategy, operations, financial
conflict in the Middle East, affect the financial markets or the performance and customers could be materially
economy in general or in any particular region. adversely affected by the impacts related to climate
For example, the COVID-19 pandemic created economic change There is an increasing concern over the risks of
and financial disruptions that have adversely affected, and climate change and the impact that climate change may
may in the future adversely affect, the Company’s business, have on the Company and its customers and communities.
financial condition, capital and results of operations. During The physical risks of climate change include increasing
the COVID-19 pandemic, the Company experienced average global temperatures, rising sea levels and an
significant disruptions to its normal operations, including the increase in the frequency and severity of extreme weather
temporary closing of branches and a sudden increase in the events and natural disasters, including wildfires, floods,
volume of work-from-home arrangements. In addition, the tornadoes and hurricanes. Climate shifts and the increasing
Company has been indirectly negatively affected by the frequency and severity of natural disasters reduce the
pandemic’s effects on the Company’s borrowers and other Company’s ability to predict accurately the effects of natural
customers, and by its effects on global financial markets. disasters. Such disasters and chronic shifts caused by
The COVID-19 pandemic caused, and other future natural climate change, such as rising sea levels, could disrupt the
disasters, pandemics, terrorist activities, civil unrest or Company’s operations or the operations of customers or
international hostilities, may cause, an increase in third parties on which the Company relies, particularly with
delinquencies, bankruptcies or defaults that could result in respect to customers located in low-lying areas and
the Company experiencing higher levels of nonperforming coastlines that are more prone to flooding or other areas
assets, net charge-offs and provisions for credit losses. that are prone to wildfires and other disasters. Such
Depending on the lingering impact of the pandemic and disasters could also result in market volatility, negatively
the impact of current international hostilities on general impact customers’ ability to pay outstanding loans and fulfill
economic and market conditions, there is a risk that adverse other contractual obligations, reduce future relationship
conditions could occur or worsen, including supply chain opportunities with clients, damage collateral or result in the
disruptions; higher inflation; a possible recession; decreased deterioration of the value of collateral. Such disasters may
demand for the Company’s products and services or those also result in reduced availability or increased costs of
of its borrowers, which could increase credit risk; challenges insurance, including insurance that protects property
related to maintaining sufficient qualified personnel due to pledged as collateral for Company loans, which could
labor shortages, talent attrition, employee illness, or negatively affect the Company’s ability to predict credit
willingness to return to work; increased risk of cyber attacks; losses accurately.
increased volatility in commodity, currency and other Additionally, climate change concerns could result in
financial markets; and disruptions to business operations at transition risk. Transition risks could include changes in
the Company and at counterparties, vendors and other consumer preferences, new technologies, and additional
service providers. legislation and regulatory requirements, including those
The United States has in recent years faced periods of associated with the transition to a low-carbon economy.
significant civil unrest. Although civil unrest has not New regulations or laws could result in significant costs as
materially affected the Company’s businesses to date, the Company implements compliance, disclosure and other
similar events could, directly or indirectly, have a material programs. Failure to comply with any new laws or
adverse effect on the Company’s operations (for example, regulations could result in legal or regulatory sanctions and
by causing shutdowns of branches or working locations of harm to the Company’s reputation. The transition to a low-
vendors or other counterparties or damaging property carbon economy could also negatively affect the business of
pledged as collateral for the Company’s loans). customers in carbon-intensive industries and reduce their
The Company’s ability to mitigate the adverse creditworthiness.
consequences of these occurrences is in part dependent on These physical risks and transition risks could increase
the quality of the Company’s resiliency planning, and the expenses or otherwise adversely impact the Company’s
Company’s ability, if any, to anticipate the nature of any business strategy, operations, financial performance and
such event that occurs. The adverse effects of natural customers. In particular, new regulations or guidance, or the
disasters, pandemics, terrorist activities, civil unrest or attitudes of regulators, shareholders and employees
international hostilities also could be increased to the extent regarding climate change, may affect the activities in which
that there is a lack of preparedness on the part of national or the Company engages and the products that the Company
regional emergency responders or on the part of other offers. An inability to adjust the Company’s business to
organizations and businesses that the Company transacts mitigate the effects of physical and transition risks could
with, particularly those that it depends upon, but has no result in higher operational and credit losses. In addition, an
control over. Additionally, both the frequency and severity of increasing perspective that financial institutions, including
some kinds of natural disasters, including wildfires, flooding, the Company, play an important role in managing risks
tornadoes and hurricanes, have increased, and the related to climate change, including indirectly with respect to
Company expects will continue to increase, as a result of their customers, may result in increased pressure on the
climate change. Company to take additional steps to disclose and manage
its climate risks and related lending and other activities, and
the Company could suffer reputational harm related to the
environmental impacts of industries in which certain of the

146 U.S. Bancorp 2023 Annual Report

Company’s customers do business. The Company could non-banks to offer competing financial services and
also experience increased expenses resulting from strategic products.
planning, litigation and technology and market changes, and Changes to statutes, regulations or regulatory policies, or
reputational harm as a result of negative public sentiment, their interpretation or implementation, and/or regulatory
regulatory scrutiny and reduced investor and stakeholder practices, requirements or expectations, could affect the
confidence due to the Company’s response to climate Company in substantial and unpredictable ways. For
change and the Company’s climate change strategy. example, the Inflation Reduction Act of 2022 imposed a new
Risks associated with climate change are continuing to one percent excise tax on corporate stock repurchases,
evolve rapidly, making it difficult to assess the effects of which could impact the extent of the Company’s common
climate change on the Company, and the Company expects stock repurchases, preferred stock redemptions, and
that climate change-related risks will continue to evolve and mergers and acquisitions activity, as well as increase the
increase over time. Company’s tax liability and reduce the Company’s net
income in connection with these activities. More recently,
Regulatory and Legal Risk U.S. banking regulators issued proposed capital rules,
commonly referred to as “Basel III Endgame”, that would
The Company is subject to extensive and evolving
result in significant changes to the U.S. regulatory capital
government regulation and supervision, which can
rules for banking organizations with total consolidated
increase the cost of doing business, limit the
assets of $100 billion or more, including the Company. The
Company’s ability to make investments and generate
FDIC also issued its final rulemaking for special deposit
revenue, and lead to costly enforcement actions
insurance assessments to recover losses to the Deposit
Banking regulations are primarily intended to protect
Insurance Fund arising from the protection of uninsured
depositors’ funds, the federal Deposit Insurance Fund, and
deposits in connection with the closures of three banks in
the United States financial system as a whole, and not the
early 2023, which resulted in a significant expense for the
Company’s debt holders or shareholders. These
Company. Complying with regulatory changes has at times
regulations, and the Company’s inability to act in certain
resulted in significant expense for the Company, and these
instances without receiving prior regulatory approval, affect
and other future regulatory changes could result in further
the Company’s lending practices, capital structure,
significant expenses which could materially affect the
investment practices, dividend policy, ability to repurchase
Company’s financial condition and results of operations. In
common stock, and ability to pursue strategic acquisitions,
addition, failure to comply with any new law or regulation
among other activities.
could result in litigation, regulatory enforcement actions and
The Company expects that its business will remain
harm to the Company’s reputation.
subject to extensive regulation and supervision and that the
General regulatory practices, such as longer time frames
level of scrutiny and the enforcement environment may
to obtain regulatory approvals for acquisitions and other
fluctuate over time, based on numerous factors, including
activities (and the resultant impact on businesses the
recent bank failures, changes in the United States
Company may seek to acquire), could affect the Company’s
presidential administration or one or both houses of
ability or willingness to make certain acquisitions or
Congress and public sentiment regarding financial
introduce new products or services. In addition, the Biden
institutions (which can be influenced by scandals and other
Administration has called on all regulatory agencies to
incidents that involve participants in the industry). In
reduce or eliminate certain fees relating to a number of
particular, changes in administration may result in the
services, including banking services. Similarly, the CFPB
Company and other large financial institutions becoming
launched an initiative to reduce the amounts and types of
subject to increased scrutiny and/or more extensive legal
fees financial institutions may charge, including by issuing a
and regulatory requirements than under prior presidential
proposed rule that would significantly reduce the permissible
and congressional regimes. In addition, changes in key
amount of credit card late fees. These and other changes
personnel at the agencies that regulate the Company,
could affect the Company’s ability or willingness to provide
including the federal banking regulators, may result in
certain products or services, necessitate changes to the
differing interpretations of existing rules and guidelines and
Company’s business practices or reduce the Company’s
potentially more stringent enforcement and more severe
revenues.
penalties than previously experienced. New regulations or
Federal law grants substantial supervisory and
modifications to existing regulations and supervisory
enforcement powers to federal banking regulators and law
expectations have increased, and may in the future
enforcement agencies, including, among other things, the
increase, the Company’s costs over time and necessitate
ability to assess significant civil or criminal monetary
changes to the Company’s existing regulatory compliance
penalties, fines, or restitution; to issue cease and desist or
and risk management infrastructure. In addition, regulatory
removal orders; and to initiate injunctive actions against
changes may reduce the Company’s revenues (including by
banking organizations and institution-affiliated parties. The
limiting the fees the Company may charge), limit the types
financial services industry continues to face scrutiny from
of financial services and products it may offer, alter the
bank supervisors in the examination process and stringent
investments it makes, affect the manner in which it operates
enforcement of regulations on both the federal and state
its businesses, increase its litigation and regulatory costs
levels, including with respect to mortgage-related practices,
should it fail to appropriately comply with new or modified
fair lending practices, fees charged by banks, student
laws and regulatory requirements, and increase the ability of
lending practices, sales practices and related incentive

147
compensation programs, and other consumer compliance factors. Large institutions, such as the Company, often are
matters, as well as compliance with Bank Secrecy Act/anti- subject to more stringent regulatory requirements and
money laundering (“BSA/AML”) requirements and sanctions supervision than smaller institutions. In addition, financial
compliance requirements as administered by the Office of technology companies and other non-bank competitors may
Foreign Assets Control, and consumer protection issues not be subject to the prudential and consumer protection
more generally. This regulatory scrutiny, or the results of an regulatory framework that applies to banks, or may be
investigation or examination, may lead to additional regulated by a national or state agency that does not have
regulatory investigations or enforcement actions. There is the same regulatory priorities or supervisory requirements
no assurance that those actions will not result in regulatory as the Company’s regulators. These differences in
settlements or other enforcement actions against the regulation can impair the Company’s ability to compete
Company or any of the Company’s subsidiaries (including effectively with competitors that are less regulated and that
USBNA), which could cause the Company material financial do not have similar compliance costs or restrictions on
and reputational harm. Furthermore, a single event involving activities.
a potential violation of law or regulation may give rise to
Stringent requirements related to capital and liquidity
numerous and overlapping investigations and proceedings,
are applicable to larger banking organizations,
either by multiple federal and state agencies and officials in
including the Company, that may limit the Company’s
the United States or, in some instances, regulators and
ability to return earnings to shareholders or operate or
other governmental officials in foreign jurisdictions. In
invest in its business The Basel III Endgame rules,
addition, another financial institution’s violation of law or
discussed above, would result in significant changes to
regulation relating to a business activity or practice often will
regulatory capital rules for banking organizations with total
give rise to an investigation of the same or similar activities
consolidated assets of $100 billion or more, such as the
or practices of the Company.
Company. The Company expects that the final rules will
In general, the amounts paid by financial institutions in
result in requirements for the Company to hold significantly
settlement of proceedings or investigations and the severity
more capital than is required under current regulations. In
of other terms of regulatory settlements are likely to remain
addition, in response to bank failures that occurred in 2023,
elevated. In some cases, governmental authorities have
the Federal Reserve Vice Chair for Supervision and the
required criminal pleas or other extraordinary terms,
Acting Comptroller of the Currency have indicated that the
including admissions of wrongdoing and the imposition of
Federal Reserve and OCC, respectively, are considering
monitors, as part of such settlements, which could have
additional liquidity risk management rules that they may
significant consequences for a financial institution, including
propose in 2024. These and other future changes to the
loss of customers, reputational harm, increased exposure to
implementation of these rules including the stress capital
civil litigation, restrictions on the ability to access the capital
buffer, or additional capital- and liquidity-related rules, could
markets, and the inability to operate certain businesses or
require the Company to take further steps to increase its
offer certain products for a period of time.
capital, increase its investment security holdings, divest
Non-compliance with sanctions laws and/or BSA/AML
assets or operations, or otherwise change aspects of its
laws or failure to maintain an adequate BSA/AML
capital and/or liquidity measures, including in ways that may
compliance program can lead to significant monetary
be dilutive to shareholders or could limit the Company’s
penalties and reputational damage. In addition, federal
ability to pay common stock dividends, repurchase its
regulators evaluate the effectiveness of an applicant in
common stock, invest in its businesses or provide loans to
combating money laundering when determining whether to
its customers.
approve a proposed bank merger, acquisition, restructuring,
The effects of the COVID-19 pandemic and actions by
or other expansionary activity. There have been a number of
the Federal Reserve Board have in the past limited and may
significant enforcement actions against banks, broker-
in the future limit capital distributions, including suspension
dealers and non-bank financial institutions with respect to
of the Company’s share repurchase program or reduction or
sanctions laws and BSA/AML laws, and some have resulted
suspension of the Company’s common stock dividend. In
in substantial penalties, including against the Company and
addition, recent events in the banking industry, including
USBNA in 2018.
three high-profile bank failures in 2023, and the results of
Violations of laws and regulations or deemed
regulatory investigations into the failures could result in
deficiencies in risk management practices or consumer
increased regulatory scrutiny and heightened regulatory
compliance also may be incorporated into the Company’s
requirements, any of which could require the Company to
confidential supervisory ratings. A downgrade in these
expend significant time and effort to implement appropriate
ratings, or these or other regulatory actions and settlements,
compliance procedures or to incur other expenses, and
could limit the Company’s ability to conduct expansionary
could negatively affect the Company’s financial condition or
activities for a period of time and require new or additional
results of operations.
regulatory approvals before engaging in certain other
Further, in August 2023, the Federal Reserve Board,
business activities.
OCC and FDIC issued a proposed rule that would require,
Differences in regulation can affect the Company’s among other institutions, each Category III U.S. bank
ability to compete effectively The content and application holding company, including the Company, and each insured
of laws and regulations applicable to financial institutions depository institution with $100 billion or more in total
vary according to the size of the institution, the jurisdictions consolidated assets that is a consolidated subsidiary of a
in which the institution is organized and operates and other Category III U.S. bank holding company, such as USBNA,

148 U.S. Bancorp 2023 Annual Report

to have minimum levels of outstanding long-term debt. The measures in the future. Such measures may conflict with
proposed rule is intended to improve the resolvability of the other regulatory requirements or the expectations of the
banking organizations covered by the rule. The Company Company's customers and shareholders. If the Company
continues to evaluate the potential effects of the proposed fails to comply with evolving, and possibly conflicting, legal
rule. Although any effects on the Company and USBNA will and regulatory requirements, it could harm the Company’s
depend on the final form of any rulemaking, the Company ability to continue to conduct business in one or more of the
may need to change its current funding mix, including being jurisdictions in which the Company currently operates, or
required to raise additional long-term debt, which could could otherwise harm the Company’s business.
adversely impact net interest margin and net interest The Company assumed MUB’s liabilities as part of the
income. acquisition, which includes ensuring ongoing compliance
Refer to “Supervision and Regulation” in the Company’s with an OCC consent order relating to MUB’s technology
Annual Report on Form 10-K for additional information and operational risk management, and could also include
regarding the Company’s capital and liquidity requirements. other liabilities related to MUB’s compliance with banking
law. Although the Company may be entitled to
The Company is subject to significant financial and
indemnification from Mitsubishi UFJ Financial Group, Inc. for
reputation risks from potential legal liability and
certain losses, such liabilities could result in additional
governmental actions The Company faces significant legal
regulatory scrutiny, constraints on the Company’s business,
risks in its businesses, and the volume of claims and
or enforcement actions, including civil money penalties or
amount of damages and penalties claimed in litigation and
fines. Any of those events could have a material adverse
governmental proceedings against it and other financial
impact on the Company’s future operations, financial
institutions are substantial. Customers, clients and other
condition, growth, or other aspects of its business.
counterparties are making claims for substantial or
indeterminate amounts of damages, while banking The Company may be required to repurchase mortgage
regulators and certain other governmental authorities have loans or indemnify mortgage loan purchasers as a
focused on enforcement. The Company is named as a result of breaches in contractual representations and
defendant or is otherwise involved in many legal warranties When the Company sells mortgage loans that it
proceedings, including class actions and other litigation. As has originated to various parties, including GSEs, it is
a participant in the financial services industry, it is likely that required to make customary representations and warranties
the Company will continue to experience a high level of to the purchaser about the mortgage loans and the manner
litigation and government scrutiny related to its businesses in which they were originated. The Company may be
and operations in the future. Substantial legal liability or required to repurchase mortgage loans or be subject to
significant governmental action against the Company could indemnification claims in the event of a breach of
materially impact the Company’s financial condition and contractual representations or warranties that is not
results of operations (including because such matters may remedied within a certain period. Contracts for residential
be resolved for amounts that exceed established accruals mortgage loan sales to the GSEs include various types of
for a particular period) or cause significant reputational harm specific remedies and penalties that could be applied if the
to the Company. Company does not adequately respond to repurchase
For example, banking organizations have been subject requests. If economic conditions and the housing market
to claims regarding patent infringement or other violations of deteriorate or the GSEs increase their claims for breached
intellectual property rights in recent years which, in some representations and warranties, the Company could have
cases, have resulted in large judgments against the banks. increased repurchase obligations and increased losses on
Such claims have in the past been brought against the repurchases, requiring material increases to its repurchase
Company, and if the Company is not successful in reserve.
defending such claims or if new claims are brought or
The Company’s failure to satisfy its obligations as
damages sought increase, the Company may incur
servicer for automobile loan securitizations and
substantial costs in defending such claims, regardless of
residential mortgage loans owned by other entities, and
their merit. If such claims are successful, the Company
other losses the Company could incur as servicer,
could be required to pay substantial damages and could
could adversely impact the Company’s reputation,
suffer reputational and other harm.
servicing costs or results of operations The Company
Additionally, the previously disclosed discontinuance of
services automobile loans on behalf of third-party
LIBOR and the complex transition of relevant contracts from
securitization vehicles and also acts as servicer and master
LIBOR to alternative rates could still have a range of
servicer for mortgage loans included in securitizations and
adverse impacts on the Company's business and results of
for unsecuritized mortgage loans owned by investors. As a
operations as a result of future disputes, litigation or other
servicer or master servicer for those loans, the Company
actions with clients, counterparties or investors related to
has certain contractual obligations to the securitization
the transition. The transition may also result in additional
trusts, investors, or other third parties. As a servicer, the
inquiries or other actions from regulators regarding the
Company’s obligations include foreclosing on defaulted
Company's replacement of LIBOR.
loans or, to the extent consistent with the applicable
In addition, there is an increasing focus from lawmakers
securitization or other investor agreement, considering
and regulators concerning ESG matters. Some states in
alternatives to foreclosure such as loan modifications or
which the Company does business have implemented “anti-
short sales, as applicable. In the Company’s capacity as a
ESG” measures and may seek to implement additional

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master servicer, obligations include overseeing the servicing accounting guidance, under which the allowance for credit
of mortgage loans by the servicer. Generally, the losses reflects the Company’s expected lifetime loss
Company’s servicing obligations are set by contract, for estimates of the portfolio. The allowance for credit losses is
which the Company receives a contractual fee. However, constructed based on an evaluation of the risks associated
with respect to mortgage loans, GSEs can amend their with its loan portfolio, including the size and composition of
servicing guidelines, which can increase the scope or costs the loan portfolio, the portfolio’s historical loss experience,
of the services required without any corresponding increase current and foreseeable economic conditions and borrower
in the Company’s servicing fee. As a servicer, the Company and collateral quality. These forecasts and estimates require
also advances expenses on behalf of investors which it may difficult, subjective, and complex judgments, including
be unable to collect. A material breach of the Company’s forecasts of economic conditions and how these economic
obligations as servicer or master servicer may result in predictions might impair the ability of the Company’s
contract termination if the breach is not cured within a borrowers to repay their loans. The Company may not be
specified period of time following notice. In addition, the able to accurately predict these economic conditions and/or
Company may be required to indemnify the securitization some or all of their effects, which may, in turn, negatively
trustee against losses from any failure by the Company, as impact the reliability of the process. The Company also
a servicer or master servicer, to perform the Company’s makes loans to borrowers where it does not have or service
servicing obligations or any act or omission on the the loan with the first lien on the property securing its loan.
Company’s part that involves willful misfeasance, bad faith, For loans in a junior lien position, the Company may not
or gross negligence. For certain investors and certain have access to information on the position or performance
transactions, the Company may be contractually obligated of the first lien when it is held and serviced by a third party,
to repurchase a loan or reimburse the investor for credit which may adversely affect the accuracy of the loss
losses incurred on the loan as a remedy for servicing errors estimates for loans of these types. Increases in the
with respect to the loan. The Company may be subject to Company’s allowance for loan losses may not be adequate
increased repurchase obligations as a result of claims made to cover actual loan losses, and future provisions for loan
that the Company did not satisfy its obligations as a servicer losses could materially and adversely affect its financial
or master servicer. The Company may also experience results. In addition, the Company’s ability to assess the
increased loss severity on repurchases, which may require creditworthiness of its customers may be impaired if the
a material increase to the Company’s repurchase reserve. models and approaches it uses to select, manage, and
The Company has and may continue to receive underwrite its customers become less predictive of future
indemnification requests related to the Company’s servicing behaviors.
of mortgage loans owned or insured by other parties,
A concentration of credit and market risk in the
primarily GSEs.
Company’s loan portfolio could increase the potential
for significant losses The Company may have higher
Credit and Mortgage Business Risk credit risk, or experience higher credit losses, to the extent
Heightened credit risk could require the Company to its loans are concentrated by loan type, industry segment,
increase its provision for credit losses, which could borrower type, or location of the borrower or collateral. For
have a material adverse effect on the Company’s results example, high vacancy rates in commercial properties may
of operations and financial condition When the Company affect the value of commercial real estate, including by
lends money, or enters into commitments to lend money, it causing the value of properties securing commercial real
incurs credit risk, or the risk of loss if its borrowers do not estate loans to be less than the amounts owed on such
repay their loans. The credit performance of the Company’s loans. In addition, elevated interest rates may make it more
loan portfolios significantly affects its financial results and difficult for borrowers to refinance maturing loans. Any of
condition. If the current economic environment were to these or other events could increase the level of defaults on
worsen, the Company’s customers may have more difficulty commercial real estate loans and result in higher credit
in repaying their loans or other obligations, which could losses to the Company. The Company’s credit risk and
result in a higher level of credit losses and higher provisions credit losses can also increase if borrowers who engage in
for credit losses. Stress on the United States economy or similar activities are uniquely or disproportionately affected
the local economies in which the Company does business, by economic or market conditions, or by regulation, such as
including the economic stress caused by the pandemic, high regulation related to climate change. Deterioration in
commercial real estate vacancy rates, escalating economic conditions or real estate values in states or
geopolitical tensions and elevated interest rates and regions where the Company has relatively larger
inflation, has resulted, and in the future may result, in, concentrations of residential or commercial real estate could
among other things, borrowers’ inability to refinance loans at result in higher credit costs. For example, the Company’s
maturity and unexpected deterioration in credit quality of the acquisition of MUB increased the Company’s exposure to
loan portfolio or in the value of collateral securing those the markets in California. Deterioration in real estate values
loans, which has caused, and in the future could cause, the and underlying economic conditions in California could
Company to establish higher provisions for credit losses. result in higher credit losses to the Company.
The Company reserves for credit losses by establishing
an allowance through a charge to earnings to provide for
loan defaults and nonperformance. The Company’s
allowance for credit losses is compliant with CECL

150 U.S. Bancorp 2023 Annual Report

Changes in interest rates can impact the value of the that are unrelated to USBNA have increased, and may in
Company’s mortgage servicing rights and mortgages the future increase, USBNA’s deposit insurance
held for sale, and can make its mortgage banking assessments, such as the FDIC’s special assessment
revenue volatile from quarter to quarter, which can relating to bank failures that occurred in 2023, and
reduce its earnings The Company has a portfolio of MSRs, customers and others may seek to make comparisons
which is the right to service a mortgage loan—collect between failed or failing banks and USBNA, which, even if
principal, interest and escrow amounts—for a fee. The unfounded, can spread quickly through social media or
Company’s MSR portfolio had a fair value of $3.4 billion as other online channels. Such comparisons could affect
of December 31, 2023. The Company initially carries its customer confidence in USBNA and lead to deposit
MSRs using a fair value measurement of the present value withdrawals or other negative effects the Company is unable
of the estimated future net servicing income, which includes to predict, any of which could materially and negatively
assumptions about the likelihood of prepayment by affect the Company’s results of operations and financial
borrowers. Changes in interest rates can affect prepayment condition.
assumptions and thus fair value. When interest rates fall, Financial services institutions are interrelated as a result
prepayments tend to increase as borrowers refinance, and of trading, clearing, counterparty or other relationships. The
the fair value of MSRs can decrease, which in turn reduces Company has exposure to many different counterparties,
the Company’s earnings. Further, it is possible that, and the Company routinely executes and settles
because of economic conditions such as a weak or transactions with counterparties in the financial services
deteriorating housing market, even when interest rates fall, industry, including brokers and dealers, commercial banks,
mortgage originations may fall or any increase in mortgage investment banks, mutual and hedge funds, and other
originations may not be enough to offset the decrease in the institutional clients. As a result, defaults by, or even rumors
MSRs’ value caused by the lower rates. or questions about, the soundness, strength or stability of
one or more financial services institutions, or the financial
The Company relies on the mortgage secondary market
services industry generally, could lead to losses or defaults
and GSEs for some of the Company’s revenue and
by the Company or by other institutions and impact the
liquidity The Company sells a portion of the mortgage
Company’s predominately United States–based businesses
loans that it originates to increase revenue through
or the less significant merchant processing, corporate trust
origination fees and ongoing servicing of such loans and to
and fund administration services businesses it operates in
provide funding capacity for originating additional loans.
foreign countries. Many of these transactions expose the
GSEs could limit their purchases of conforming loans due to
Company to credit risk in the event of a default by a
capital constraints, other changes in their criteria for
counterparty or client. In addition, the Company’s credit risk
conforming loans or other reasons. This potential reduction
may be further increased when the collateral held by the
in purchases could limit the Company’s ability to fund new
Company cannot be realized upon or is liquidated at prices
loans. In addition, if GSEs limited their purchases of
not sufficient to recover the full amount of the financial
conforming loans, the Company may limit its originations of
instrument exposure due the Company. Any such losses
mortgage loans that it intends to sell, which could reduce
could adversely affect the Company’s results of operations.
the Company’s revenue from origination fees of such loans
and the ongoing servicing fees it receives from such loans. Change in residual value of leased assets may have an
Proposals have been presented to reform the housing adverse impact on the Company’s financial results The
finance market in the U.S., including the role of the GSEs in Company engages in leasing activities and is subject to the
the housing finance market. The extent and timing of any risk that the residual value of the property under lease will
such regulatory reform of the housing finance market and be less than the Company’s recorded asset value. Adverse
the GSEs, as well as any effect on the Company’s business changes in the residual value of leased assets can have a
and financial results, are uncertain. negative impact on the Company’s financial results. The risk
of changes in the realized value of the leased assets
A decline in the soundness, strength or stability of
compared to recorded residual values depends on many
other financial institutions could adversely affect the
factors outside of the Company’s control, including supply
Company’s results of operations Actual or perceived
and demand for the assets, condition of the assets at the
issues with, or rumors or questions about, one or more
end of the lease term, and other economic factors.
financial institutions, or about the financial services industry
more generally, have recently lead to, and may in the future
lead to, among other things, (i) market-wide liquidity Liquidity Risk
problems; (ii) rapid and significant deposit withdrawals at If the Company does not effectively manage its liquidity,
certain institutions, particularly those with elevated levels of its business could suffer The Company’s liquidity is
uninsured deposits; (iii) losses or defaults by certain essential for the operation of its business. Market
institutions, up to and including failures of certain banks; and conditions, the threat or occurrence of a U.S. sovereign
(iv) significant volatility in the stock of financial services default, unforeseen outflows of funds or other events could
institutions. In addition, the Company’s ability to engage in negatively affect the Company’s level or cost of funding,
routine funding or settlement transactions could be affecting its ongoing ability to accommodate liability
adversely affected by any of these events or by other events maturities and deposit withdrawals, meet contractual
that affect the commercial soundness of other domestic or obligations, and fund asset growth and new business
foreign financial institutions. Failures of one or more banks transactions at a reasonable cost and in a timely manner. If

151
the Company’s access to stable and low-cost sources of were to experience a significant outflow of deposits, the
funding, such as customer deposits, is reduced, the Company may face significantly increased funding costs,
Company might need to use alternative funding, which could suffer significant losses and have a significantly reduced
be more expensive or of limited availability. Any substantial, ability to raise new capital.
unexpected or prolonged changes in the level or cost of
The Company could lose access to sources of liquidity
liquidity could materially and adversely affect the Company’s
if it were to experience financial or regulatory issues
business.
The Company relies on sources of liquidity provided by the
In addition, recent bank failures led to significant volatility
Federal Reserve Bank, such as the Federal Reserve Bank
in the financial services industry and to liquidity problems at
discount window and other liquidity facilities that the Federal
certain institutions. Although governmental support was
Reserve Board may establish from time to time, as well as
provided in connection with recent bank failures, including
liquidity provided by the Federal Home Loan Bank of Des
the FDIC’s invoking the systemic risk exception to
Moines (the “FHLB”). To access these sources of liquidity,
guarantee uninsured deposits, there can be no guarantee
the Federal Reserve Board or FHLB may impose conditions
that the FDIC will invoke the systemic risk exception in
that the Company and USBNA are in sound financial
connection with any future bank failures or that the
condition (as determined by the Federal Reserve Board or
government would otherwise take any action to provide
FHLB) or that the Company and USBNA maintain minimum
liquidity to troubled institutions. Further, even if
supervisory ratings. If the Company or USBNA were to
governmental support for financial institutions is available in
experience financial or regulatory issues, it could affect the
the future, it may not be sufficient to address systemic risks.
Company’s or USBNA's ability to access liquidity facilities,
Loss of customer deposits could increase the including at times when the Company or USBNA needs
Company’s funding costs The Company relies on bank additional liquidity for the operation of its business. If the
deposits to be a low-cost and stable source of funding. The Company or USBNA were to lose access to these liquidity
Company competes with banks and other financial services sources, it could have a material adverse effect on the
companies for deposits, including those that offer online Company’s operations and financial condition.
channels. Recent increases in short-term interest rates have
The Company relies on dividends from its subsidiaries
resulted in and are expected to continue to result in more
for its liquidity needs, and the payment of those
intense competition in deposit pricing. Competition and
dividends is limited by laws and regulations The
increasing interest rates have caused the Company to
Company is a separate and distinct legal entity from USBNA
increase the interest rates it pays on deposits. If the
and the Company’s non-bank subsidiaries. The Company
Company’s competitors raise the interest rates they pay on
receives a significant portion of its cash from dividends paid
deposits, the Company’s funding costs may increase, either
by its subsidiaries. These dividends are the principal source
because the Company raises the interest rates it pays on
of funds to pay dividends on the Company’s stock and
deposits to avoid losing deposits to competitors or because
interest and principal on its debt. Various federal and state
the Company loses deposits to competitors and must rely
laws and regulations limit the amount of dividends that
on more expensive sources of funding. Higher funding costs
USBNA and certain of the Company’s non-bank subsidiaries
reduce the Company’s net interest margin and net interest
may pay to the Company without regulatory approval. Also,
income.
the Company’s right to participate in a distribution of assets
Checking and savings account balances and other
upon a subsidiary’s liquidation or reorganization is subject to
forms of customer deposits may decrease when customers
prior claims of the subsidiary’s creditors, except to the
perceive alternative investments, such as the stock market,
extent that any of the Company’s claims as a creditor of that
as providing a better risk/return tradeoff. When customers
subsidiary may be recognized. Refer to “Supervision and
move money out of bank deposits and into other
Regulation” in the Company’s Annual Report on Form 10-K
investments, the Company may lose a relatively low-cost
for additional information regarding limitations on the
source of funds, increasing the Company’s funding costs
amount of dividends USBNA may pay.
and reducing the Company’s net interest income. In
addition, mass withdrawals of deposits occurred at certain
banks that failed in 2023, seemingly triggered by losses in Competitive and Strategic Risk
the banks’ investment securities portfolios and concerns The financial services industry is highly competitive,
about uninsured and uncollateralized deposits. A loss in the and competitive pressures could intensify and
value of the Company’s investment or loan portfolio, adversely affect the Company’s financial results The
perceived concerns regarding the Company’s and USBNA’s Company operates in a highly competitive industry that
capital positions or perceived concerns regarding the level could become even more competitive as a result of
of USBNA’s uninsured and uncollateralized deposits could legislative, regulatory and technological changes, as well as
cause rapid and significant deposit outflows. This risk is continued industry consolidation, which may increase in
exacerbated by technological developments and changes in connection with current economic and market conditions.
banking relationships, such as customers maintaining This consolidation may produce larger, better-capitalized
accounts at multiple banks, which increase the ease and and more geographically diverse companies that are
speed with which depositors are able to move their deposits, capable of offering a wider array of financial products and
as well as by the way information, including false services at more competitive prices. The Company
information or unfounded rumors, can be spread quickly competes with other commercial banks, savings and loan
through social media and other online channels. If USBNA

152 U.S. Bancorp 2023 Annual Report

associations, mutual savings banks, finance companies, introducing new products and services, adapting to
mortgage banking companies, credit unions, investment changing customer preferences and spending and saving
companies, credit card companies, and a variety of other habits (which may be altered significantly and with little
financial services and advisory companies. Legislative or warning), achieving market acceptance of its products and
regulatory changes also could lead to increased competition services, or sufficiently developing and maintaining loyal
in the financial services sector. customer relationships.
The adoption and rapid growth of new technologies,
The Company may not be able to complete future
including generative artificial intelligence, cryptocurrencies
acquisitions, and completed acquisitions may not
and blockchain and other distributed ledger technologies,
produce revenue enhancements or cost savings at
have required the Company to invest resources to adapt its
levels or within timeframes originally anticipated, may
systems, products and services, and it expects to continue
result in unforeseen integration difficulties, and may
to make similar investments. In addition, technology has
dilute existing shareholders’ interests The Company
lowered barriers to entry and made it possible for non-banks
regularly explores opportunities to acquire financial services
to offer products and services, such as loans and payment
businesses or assets and may also consider opportunities to
services, that traditionally were banking products, and made
acquire other banks or financial institutions. The Company
it possible for technology companies to compete with
cannot predict the number, size or timing of acquisitions it
financial institutions in providing electronic, internet-based,
might pursue.
and mobile phone–based financial solutions. Competition
The Company must generally receive federal regulatory
with non-banks, including technology companies, to provide
approval before it can acquire a bank or bank holding
financial products and services is intensifying. In particular,
company. The Company’s ability to pursue or complete an
the activity of financial technology companies (“fintechs”)
attractive acquisition could be negatively impacted by
has grown significantly over recent years and is expected to
regulatory delay or other regulatory issues. The Company
continue to grow. Fintechs have and may continue to offer
cannot be certain when or if, or on what terms and
bank or bank-like products. For example, a number of
conditions, any required regulatory approvals will be
fintechs have applied for bank or industrial loan charters,
granted. For example, the Company may be required to sell
which, in some cases, have been granted. In addition, other
branches as a condition to receiving regulatory approval for
fintechs have partnered with existing banks to allow them to
bank acquisitions. If the Company commits certain
offer deposit products or payment services to their
regulatory violations, including those that result in a
customers. Many of these companies, including the
downgrade in certain of the Company’s bank regulatory
Company’s competitors, have fewer regulatory constraints,
ratings, governmental authorities could, as a consequence,
and some have lower cost structures, in part due to lack of
preclude it from pursuing future acquisitions for a period of
physical structures. Also, the potential need to adapt to
time. In addition, the Company’s ability to complete future
industry changes in information technology systems, on
acquisitions may depend on factors outside its control,
which the Company and financial services industry are
including changes in the presidential administration or in
highly dependent, could present operational issues and
one or both houses of Congress and public sentiment
require capital spending. The Company’s ability to compete
regarding bank mergers. Acquisition activity by large
successfully depends on a number of factors, including,
banking organizations, such as the Company, continues to
among others, its ability to develop and execute strategic
draw regulatory and policy focus, and future changes could
plans and initiatives; developing, maintaining and building
impact consideration of and regulatory approval processes
long-term customer relationships based on quality service,
for certain acquisitions. In addition, acquisitions by large
competitive prices, high ethical standards and safe, sound
banking organizations such as the Company may receive
assets; and industry and general economic trends. A failure
negative coverage in the media or negative attention by
to compete effectively could contribute to downward price
certain members of Congress or other policymakers. If the
pressure on the Company’s products or services or a loss of
Company were to receive significant negative publicity in
market share.
connection with a proposed acquisition, it could damage the
The Company may need to lower prices on existing Company’s reputation and impede the Company’s ability to
products and services and develop and introduce new complete the acquisition.
products and services to maintain market share The There can be no assurance that acquisitions the
Company’s success depends, in part, on its ability to adapt Company completes, including its recently completed
its products and services to evolving industry standards. acquisition of MUB, will have the anticipated positive results,
There is increasing pressure to provide products and including results related to expected revenue increases,
services at lower prices. Lower prices can reduce the cost savings, increases in geographic or product presence,
Company’s net interest margin and revenues from its fee- and/or other projected benefits. The Company may incur
based products and services. In addition, the adoption of substantial expenses related to acquisitions and integration
new technologies or further developments in current of acquired companies. Successful integration of an
technologies require the Company to make substantial acquired company has in the past presented and may in the
expenditures to modify or adapt its existing products and future present challenges due to differences in systems,
services. Also, these and other capital investments in the operations, policies and procedures, management teams
Company’s businesses may not produce expected growth in and corporate cultures and may be more costly or difficult to
earnings anticipated at the time of the expenditure. The complete than anticipated or have unanticipated adverse
Company might not be successful in developing or results. Integration efforts could divert management’s

153
attention and resources, which could adversely affect the The Company’s investments in certain tax-advantaged
Company’s operations or results. Integration efforts could projects may not generate returns as anticipated and
result in higher than expected customer loss, deposit may have an adverse impact on the Company’s
attrition, loss of key employees, issues with systems and financial results The Company invests in certain tax-
technology, disruption of the Company’s businesses or the advantaged projects promoting affordable housing,
businesses of the acquired company, or otherwise community development and renewable energy resources.
adversely affect the Company’s ability to maintain The Company’s investments in these projects are designed
relationships with customers and employees or achieve the to generate a return primarily through the realization of
anticipated benefits of the acquisition. Also, the negative federal and state income tax credits, and other tax benefits,
effect of any divestitures required by regulatory authorities in over specified time periods. The Company is subject to the
acquisitions or business combinations may be greater than risk that previously recorded tax credits, which remain
expected. In addition, future acquisitions may also expose subject to recapture by taxing authorities based on
the Company to increased legal or regulatory risks. Finally, compliance features required to be met at the project level,
future acquisitions could be material to the Company, and it will fail to meet certain government compliance
may issue additional shares of stock to pay for those requirements and will not be able to be realized. The
acquisitions, which would dilute current shareholders’ possible inability to realize these tax credit and other tax
ownership interests. benefits can have a negative impact on the Company’s
financial results. The risk of not being able to realize the tax
Accounting and Tax Risk credits and other tax benefits depends on many factors
outside of the Company’s control, including changes in the
The Company’s reported financial results depend on
applicable tax code and the ability of the projects to be
management’s selection of accounting methods and
completed.
certain assumptions and estimates, which, if incorrect,
could cause unexpected losses in the future The
Company’s accounting policies and methods are General Risk Factors
fundamental to how the Company records and reports its The Company’s framework for managing risks may not
financial condition and results of operations. The Company’s be effective in mitigating risk and loss to the Company
management must exercise judgment in selecting and The Company’s risk management framework seeks to
applying many of these accounting policies and methods, so mitigate risk and loss. The Company has established
they comply with generally accepted accounting principles processes and procedures intended to identify, measure,
and reflect management’s judgment regarding the most monitor, report, and analyze the types of risk to which it is
appropriate manner to report the Company’s financial subject, including liquidity risk, credit risk, market risk,
condition and results of operations. In some cases, interest rate risk, compliance risk, strategic risk, reputation
management must select the accounting policy or method to risk, and operational risk related to its employees, systems
apply from two or more alternatives, any of which might be and vendors, among others. However, as with any risk
reasonable under the circumstances, yet might result in the management framework, there are inherent limitations to the
Company’s reporting materially different results than would Company’s risk management strategies as there may exist,
have been reported under a different alternative. or develop in the future, risks that it has not appropriately
Certain accounting policies are critical to presenting the anticipated or identified. In addition, the Company relies on
Company’s financial condition and results of operations. quantitative models to measure certain risks and to estimate
They require management to make difficult, subjective or certain financial values, and these models could fail to
complex judgments about matters that are uncertain. predict future events or exposures accurately. The
Materially different amounts could be reported under Company must also develop and maintain a culture of risk
different conditions or using different assumptions or management among its employees, as well as manage risks
estimates. These critical accounting policies include the associated with third parties, and could fail to do so
allowance for credit losses, estimations of fair value, the effectively. If the Company’s risk management framework
valuation of MSRs, and income taxes. Because of the proves ineffective, the Company could incur litigation and
uncertainty of estimates involved in these matters, the negative regulatory consequences, and suffer unexpected
Company may be required to do one or more of the losses that could affect its financial condition or results of
following: significantly increase the allowance for credit operations.
losses and/or sustain credit losses that are significantly
The Company’s business could suffer if it fails to attract
higher than the reserve provided, recognize significant
and retain skilled employees The Company’s success
losses on the remeasurement of certain asset and liability
depends, in large part, on its ability to attract and retain key
balances, or significantly increase its accrued taxes liability.
employees. Competition for the best people in most
For more information, refer to “Critical Accounting Policies”
activities the Company engages in can be intense.
in this Annual Report. In addition, the FASB, SEC and other
The employment market has continued to evolve,
regulatory agencies may issue new or amend existing
influenced by macroeconomic shifts, changes in social
accounting and reporting standards or change existing
norms post-pandemic and technology advancements.
interpretations of those standards that could materially affect
Heightened pressures on competitive pay levels and flexible
the Company's financial statements.
work arrangements continue to be main focus areas.

154 U.S. Bancorp 2023 Annual Report

 Employees have also shifted their focus to expectations A downgrade in the Company’s credit ratings could
that extend beyond traditional compensation and benefits, have a material adverse effect on its liquidity, funding
including better work-life balance, improved advancement costs and access to capital markets The Company’s
opportunities and improved training, and many businesses, credit ratings, which are subject to credit agencies’ ongoing
including the Company, have had to adapt quickly to the review of a number of factors, including factors not within
changing environment. The Company’s ability to compete the Company’s control, are important to the Company’s
successfully for talent has been and may continue to be liquidity. A reduction in one or more of the Company’s credit
affected by its ability to adapt quickly to such shifts in ratings could adversely affect its liquidity, increase its
employee focus, and there is no assurance that these funding costs or limit its access to the capital markets.
developments will not cause increased turnover or impede Further, a downgrade could decrease the number of
the Company’s ability to retain and attract the highest investors and counterparties willing or able, contractually or
caliber employees. otherwise, to do business with or lend to the Company,
thereby adversely affecting the Company’s competitive
position. There can be no assurance that the Company will
maintain its current ratings and outlooks or whether or when
any downgrades could occur.

155
Managing Committee was Vice President and Associate General Counsel of U.S.
Bancorp, having also served as Assistant Secretary of U.S.
Bancorp from 1995 through 2000 and as Secretary from
Andrew Cecere 2000 until 2001.

Mr. Cecere is Chairman, President and Chief Executive Gregory G. Cunningham

Officer of U.S. Bancorp. Mr. Cecere, 63, has served as
Mr. Cunningham is Senior Executive Vice President and
President of U.S. Bancorp since January 2016, Chief
Chief Diversity Officer of U.S. Bancorp. Mr. Cunningham,
Executive Officer since April 2017 and Chairman since April
60, has served in this position since July 2020. From July
2018. He also served as Vice Chairman and Chief
2019 until July 2020, he served as Senior Vice President
Operating Officer from January 2015 to January 2016 and
and Chief Diversity Officer of U.S. Bancorp, having served
was U.S. Bancorp’s Vice Chairman and Chief Financial
as Vice President of Customer Engagement of U.S.
Officer from February 2007 until January 2015. Until that
Bancorp from October 2015, when he joined U.S. Bancorp,
time, he served as Vice Chairman, Wealth Management and
until July 2019. Previously, Mr. Cunningham served in
Investment Services, of U.S. Bancorp since the merger of
various roles in the marketing department of Target
Firstar Corporation and U.S. Bancorp in February 2001.
Corporation from January 1998 until March 2015.
Previously, he had served as an executive officer of the
former U.S. Bancorp, including as Chief Financial Officer Venkatachari Dilip
from 2000 through 2001.
Mr. Dilip is Senior Executive Vice President and Chief
Souheil S. Badran Information and Technology Officer of U.S. Bancorp. Mr.
Dilip, 64, previously was an Executive Vice President from
Mr. Badran is Senior Executive Vice President and Chief
September 2018 to April 2023 and has served as Chief
Operations Officer of U.S. Bancorp. Mr. Badran, 59, has
Information and Technology Officer since September 2018,
served in this position since joining U.S. Bancorp in
when he joined U.S. Bancorp. From May 2014 until July
December 2022. From January 2019 until November 2022,
2017, he served as Vice President at McKinsey Digital
he served as Executive Vice President and Chief Operating
where he helped banks accelerate their digital
Officer at Northwestern Mutual, having also served as Chief
transformation. From April 2009 to September 2013, he
Innovation Officer from January 2019 until September 2019.
served as CEO at Compass Labs leading an innovative
Previously Mr. Badran served as President of Alibaba’s
marketing analytics company. From March 2006 until April
Alipay business in the Americas from August 2016 until
2008, he served as Director of Products at Google where he
August 2018. From 2015 to 2016, Mr. Badran served as
led product teams for mobile ads and Google Checkout.
CEO at Edo Interactive, and from 2011 to 2015, he served
From March 2004 until March 2006, he served as Vice
as Senior Vice President and General Manager at Digital
President of PayPal/eBay and on the Board of PayPal
River.
Europe, where he was responsible for Payments Services,
Elcio R.T. Barcelos Risk and Fraud Management. Previously, Mr. Dilip co-
founded and led startup companies CashEdge and
Mr. Barcelos is Senior Executive Vice President and Chief CommerceSoft from 1996 until 2003.
Human Resources Officer of U.S. Bancorp. Mr. Barcelos,
53, has served in this position since joining U.S. Bancorp in Terrance R. Dolan
September 2020. From April 2018 until August 2020, he
Mr. Dolan is Vice Chair and Chief Administration Officer of
served as Senior Vice President and Chief People and
U.S. Bancorp. Mr. Dolan, 62, has served in this position
Places Officer of the Federal National Mortgage Association
since September 2023. From August 2016 to August 2023,
(Fannie Mae), having served as Senior Vice President,
he served as Vice Chair and Chief Financial Officer of U.S.
Human Resources of the DXC Technology Company from
Bancorp. From July 2010 to July 2016, he served as Vice
April 2017 to March 2018. Previously, Mr. Barcelos served
Chair, Wealth Management and Investment Services, of
as Senior Vice President and Head of Human Resources for
U.S. Bancorp. From September 1998 to July 2010, Mr.
the Enterprise Services business of Hewlett Packard
Dolan served as U.S. Bancorp’s Controller. He additionally
Enterprise Company from June 2015 to April 2017, and in
held the title of Executive Vice President from January 2002
other human resources senior leadership positions at
until June 2010 and Senior Vice President from September
Hewlett-Packard Company and Hewlett Packard Enterprise
1998 until January 2002.
Company from July 2009 to June 2015. He previously
served in various leadership roles at Wells Fargo and Bank Revathi N. Dominski
of America.
Ms. Dominski is Senior Executive Vice President and Chief
James L. Chosy Social Responsibility Officer of U.S. Bancorp and President
of the U.S. Bank Foundation. Ms. Dominski, 53, has served
Mr. Chosy is Senior Executive Vice President and General
as Senior Executive Vice President and Chief Social
Counsel of U.S. Bancorp. Mr. Chosy, 60, has served in this
Responsibility Officer since April 2023. She joined U.S.
position since March 2013. He also served as Corporate
Bancorp in June 2015 as President of the U.S. Bank
Secretary of U.S. Bancorp from June 2022 until December
Foundation and Senior Vice President of Corporate Social
2023 and from March 2013 until April 2016. From 2001 to
Responsibility. Before joining U.S. Bancorp, Ms. Dominski
2013, he served as the General Counsel and Secretary of
spent 21 years with Target Corporation in leadership
Piper Jaffray Companies. From 1995 to 2001, Mr. Chosy
positions including sourcing, merchandising, merchandise

156 U.S. Bancorp 2023 Annual Report

planning and operations before moving to Target's Mark G. Runkel
Corporate Social Responsibility team, where she served as
Senior Director of Education and Community Relations. Mr. Runkel is Senior Executive Vice President and Chief
Transformation Officer of U.S. Bancorp. Mr. Runkel, 47, has
Gunjan Kedia served in this position since August 2021. From December
2013 to August 2021, he served as Senior Executive Vice
Ms. Kedia is Vice Chair, Wealth, Corporate, Commercial
President and Chief Credit Officer. From February 2011 until
and Institutional Banking, of U.S. Bancorp. Ms. Kedia, 53,
December 2013, he served as Senior Vice President and
has served in this position since June 2023. From
Credit Risk Group Manager of U.S. Bancorp Retail and
December 2016 to June 2023, she served as Vice Chair,
Payment Services Credit Risk Management, having served
Wealth Management and Investment Services, of U.S.
as Senior Vice President and Risk Manager of U.S. Bancorp
Bancorp. From October 2008 until May 2016, she served as
Retail and Small Business Credit Risk Management from
Executive Vice President of State Street Corporation where
June 2009 until February 2011. From March 2005 until May
she led the core investment servicing business in North and
2009, he served as Vice President and Risk Manager of
South America and served as a member of State Street’s
U.S. Bancorp.
management committee, its senior most strategy and policy
committee. Previously, Ms. Kedia was an Executive Vice John C. Stern
President of global product management at Bank of New
York Mellon from 2004 to 2008 and a Partner and associate Mr. Stern is Senior Executive Vice President and Chief
at McKinsey from 1996 to 2004. Financial Officer of U.S. Bancorp. Mr. Stern, 46, has served
as Senior Executive Vice President since April 2023 and
Shailesh M. Kotwal Chief Financial Officer since September 2023. He also
served as Head of Finance from May 2023 to August 2023.
Mr. Kotwal is Vice Chair, Payment Services, of U.S.
He served as Executive Vice President from July 2013
Bancorp. Mr. Kotwal, 59, has served in this position since
through April 2023. From May 2021 until May 2023, he
joining U.S. Bancorp in March 2015. From July 2008 until
served as President of the Global Corporate Trust and
May 2014, he served as Executive Vice President of TD
Custody business of U.S. Bancorp. Previously, he served as
Bank Group with responsibility for retail banking products
Treasurer from July 2013 to May 2021 and has held various
and services and as Chair of its enterprise payments
other leadership positions in his nearly 25 years at U.S.
council. From 2006 until 2008, he served as President,
Bancorp.
International, of eFunds Corporation. Previously, Mr. Kotwal
served in various leadership roles at American Express Dominic V. Venturo
Company from 1989 until 2006, including responsibility for
operations in North and South America, Europe and the Mr. Venturo is Senior Executive Vice President and Chief
Asia-Pacific regions. Digital Officer of U.S. Bancorp. Mr. Venturo, 57, has served
in this position since July 2020. From January 2015 until
Stephen L. Philipson July 2020, he served as Executive Vice President and Chief
Innovation Officer of U.S. Bancorp, having served as Senior
Mr. Philipson is Senior Executive Vice President and Head
Vice President and Chief Innovation Officer of U.S. Bancorp
of Global Markets and Specialized Finance of U.S. Bancorp.
Payment Services from January 2010 until January 2015.
Mr. Philipson, 45, has served in this position since April
From January 2007 to December 2009, Mr. Venturo served
2023. From October 2017 to April 2023, he served as head
as Senior Vice President and Chief Innovation Officer of
of Fixed Income and Capital Markets. Previously, he led
U.S. Bancorp Retail Payment Solutions. Prior to that time,
Credit & Municipal Fixed Income at U.S. Bank and, prior to
he served as Senior Vice President and held product
that, held roles in fixed income and capital markets at
management positions in various U.S. Bancorp Payment
Wachovia/Wells Fargo Securities and Morgan Stanley.
Services business lines from December 1998 to December
Jodi L. Richard 2006.

Ms. Richard is Vice Chair and Chief Risk Officer of U.S. Timothy A. Welsh
Bancorp. Ms. Richard, 55, has served in this position since
Mr. Welsh is Vice Chair, Consumer and Business Banking,
October 2018. She served as Executive Vice President and
of U.S. Bancorp. Mr. Welsh, 58, has served in this position
Chief Operational Risk Officer of U.S. Bancorp from January
since March 2019. Prior to that, he served as Vice Chair,
2018 until October 2018, having served as Senior Vice
Consumer Banking Sales and Support since joining U.S.
President and Chief Operational Risk Officer from 2014 until
Bancorp in July 2017. From July 2006 until June 2017, he
January 2018. Prior to that time, Ms. Richard held various
served as a Senior Partner at McKinsey & Company where
senior leadership roles at HSBC from 2003 until 2014,
he specialized in financial services and the consumer
including Executive Vice President and Head of Operational
experience. Previously, Mr. Welsh served as a Partner at
Risk and Internal Control at HSBC North America from 2008
McKinsey from 1999 to 2006.
to 2014. Ms. Richard started her career at the Office of the
Comptroller of the Currency in 1990 as a national bank
examiner.

157
Directors

Andrew Cecere1,6 Roland A. Hernandez1,3,4

Chairman, President and Chief Executive Officer Founding Principal and Chief Executive Officer
U.S. Bancorp Hernandez Media Ventures
(Media)
1,2,3
Warner L. Baxter
Retired Executive Chairman and Former Chairman, Richard P. McKenney1,4,6
President and Chief Executive Officer President and Chief Executive Officer
Ameren Corporation Unum Group
(Energy) (Financial protection benefits)

Dorothy J. Bridges1,5,6 Yusuf I. Mehdi5,6

Chief Executive Officer Executive Vice President,
Metropolitan Economic Development Association (Meda) Consumer Chief Marketing Officer
(Economic Development) Microsoft Corporation
(Technology)
2,6
Elizabeth L. Buse
Former Chief Executive Officer Loretta E. Reynolds6
Monitise plc Founder and Chief Executive Officer
(Financial services) LEReynolds Group, LLC
(Information Technology)
2,5
Alan B. Colberg
Retired President and Chief Executive Officer John P. Wiehoff6
Assurant, Inc. Retired Chairman and Chief Executive Officer
(Financial services and specialty insurance) C.H. Robinson Worldwide, Inc.
(Transportation and logistics services)
2,5
Kimberly N. Ellison-Taylor
Founder and Chief Executive Officer Scott W. Wine1,3,4
KET Solutions, LLC Chief Executive Officer
(Technology) CNH Industrial N.V.
(Agricultural machinery)
1,3,4
Kimberly J. Harris
Retired President and Chief Executive Officer
Puget Energy, Inc.
(Energy)

1. Executive Committee
2. Audit Committee
3. Compensation and Human Resources Committee
4. Governance Committee
5. Public Responsibility Committee
6. Risk Management Committee

158 U.S. Bancorp 2023 Annual Report

C O R P O R AT E I N F O R M AT I O N
Executive offices Investor relations contact Ethics
U.S. Bancorp George Andersen At U.S. Bancorp, our commitment to high
800 Nicollet Mall Senior Vice President ethical standards guides everything we do.
Minneapolis, MN 55402 Director of Investor Relations Demonstrating this commitment through
george.andersen@usbank.com our words and actions is how each of us
Common stock transfer Phone: 612-303-3620 does the right thing every day for our
customers, shareholders, communities and
agent and registrar
Financial information each other. Our ethical culture has been
Computershare acts as our transfer agent recognized by the Ethisphere® Institute,
and registrar, dividend paying agent and U.S. Bancorp news and financial results are which named us to its World’s Most Ethical
available through our website and by mail. Companies® list for the ninth time in 2023.
dividend reinvestment plan administrator
and maintains all shareholder records Website: For information about Each year, every employee certifies
for the Company. Inquiries related to U.S. Bancorp, including news, financial compliance with the letter and spirit of our
shareholder records, stock transfers, results, annual reports and other Code of Ethics and Business Conduct.
changes of ownership, lost stock documents filed with the Securities
certificates, changes of address and Exchange Commission, visit For details about our Code of Ethics and
and dividend payment should be usbank.com and click on About Us. Business Conduct, visit usbank.com
directed to the transfer agent at: and click on About Us and then Investor
Mail: At your request, we will mail to you
Relations and then Corporate Governance
Computershare our quarterly earnings, news releases,
quarterly financial data reported on Form and then Governance Documents.
P.O. Box 505000
Louisville, KY 40233 10-Q, Form 10-K and additional copies
Phone: 888-778-1311 or of our annual reports. Please contact: Diversity, equity and inclusion
201-680-6578 (international calls) U.S. Bancorp Investor Relations At U.S. Bancorp, embracing diversity,
championing equity and fostering inclusion
computershare.com/investor 800 Nicollet Mall
are business imperatives. We view everything
Minneapolis, MN 55402
Registered or Certified Mail: we do through a diversity, equity and
investorrelations@usbank.com
Computershare inclusion lens to deepen our relationships
Phone: 866-775-9668
462 South 4th Street, Suite 1600 with our stakeholders: our employees,
Louisville, KY 40202 customers, shareholders and communities.
Media requests
Telephone representatives are available Our employees bring their whole selves to
David R. Palombi
weekdays from 8 a.m. to 6 p.m., Central work. We respect and value each other’s
Executive Vice President
Time, and automated support is available differences, strengths and perspectives,
Chief Communications Officer
24 hours a day, seven days a week. and we embrace the communities we serve.
Specific information about your account Public Affairs and Communications
This makes us stronger, more innovative and
is available on Computershare’s david.palombi@usbank.com
more responsive to our customers’ needs.
Investor Center website. Phone: 612-303-3167
To learn more about our commitment
Independent auditor Privacy to diversity, equity and inclusion, visit
U.S. Bancorp is committed to usbank.com/diversity.
Ernst & Young LLP serves as the
independent auditor for U.S. Bancorp. respecting the privacy of our customers
and safeguarding the financial and Equal opportunity
Common stock personal information provided to us. and affirmative action
To learn more about the U.S. Bancorp
listing and trading commitment to protecting privacy, visit
U.S. Bancorp and our subsidiaries are
committed to providing Equal Employment
U.S. Bancorp common stock is listed and usbank.com and click on Privacy. Opportunity to all employees and applicants
traded on the New York Stock Exchange for employment. In keeping with this
under the ticker symbol USB. Accessibility commitment, employment decisions are
U.S. Bancorp is committed to providing made based on abilities, not race, color,
Dividends and ready access to our products and services religion, creed, citizenship, national
reinvestment plan so all of our customers, including people origin or ancestry, gender, age, disability,
with disabilities, can succeed financially. veteran status, sexual orientation, marital
U.S. Bancorp currently pays quarterly
To learn more, visit usbank.com and click status, gender identity or expression,
dividends on our common stock on or genetic information or any other factors
about the 15th day of January, April, on Accessibility.
protected by law. The Company complies
July and October, subject to approval with municipal, state and federal fair
by our Board of Directors. U.S. Bancorp employment laws, including regulations
shareholders can choose to participate applying to federal contractors.
in a plan that provides automatic
reinvestment of dividends and/or U.S. Bancorp, including each of our
optional cash purchase of additional subsidiaries, is an equal opportunity
employer committed to creating a
shares of U.S. Bancorp common stock.
diverse workforce.
For more information, please contact
our transfer agent, Computershare. ©2024 U.S. Bancorp
 800 Nicollet Mall
Minneapolis, MN 55402
800-USBANKS (872-2657)
usbank.com