U.S. Bancorp (USB) investor relations material

Strategic priorities and progress

• Focused on expense control, organic growth, and payments transformation, with eight quarters of flat expenses and strong fee growth; payments transformation remains a long-term priority with ongoing progress.

• Fee mix is a core strength, with trust and investment fees, capital markets, and payments as key pillars; consumer fees expected to be a smaller part due to volatility and regulation.

• Payments business is being transformed through embedded payments, direct distribution, and industry prioritization, with growth expected to accelerate toward the end of 2026 and into 2027.

• Loan growth is strong in commercial and card segments, with commercial real estate showing signs of stabilization; treasury management and digital investments are driving above-market C&I growth.

• Balance sheet repositioning includes growing consumer and operational deposits, selling non-core portfolios, and targeting a 3% net interest margin by 2027.

Economic and industry outlook

• Consumer credit and spending remain healthy, with positive holiday trends and stable delinquencies; corporate sentiment has improved since April, with cautious optimism in AI and M&A-driven loan appetite.

• Tariffs are viewed as a manageable challenge for most clients, with mitigation strategies in place and limited overall impact.

• Deposit competition remains high, but unique value propositions and bundled products are increasing consumer deposit share.

Financial performance and guidance

• Net interest income and fee income are both tracking with a bias to the upside for the fourth quarter, supported by loan growth, deposit pricing, and capital markets strength.

• Expenses are expected to grow 1%-1.5% quarter-over-quarter, with at least 200 basis points of positive operating leverage.

• Investment spend is steady at $2.5 billion, with improved efficiency from technology advancements; future operating leverage will be driven more by revenue growth.