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 early progress.

• Organic growth targets for mid-single-digit fee increases and high returns are being met, especially in trust, investment, and capital markets fees.

• Payments business is central to future client acquisition and is being transformed through embedded payments, direct distribution, and industry prioritization, with expected steady growth and inflection in 2026-2027.

• Loan growth is strong in commercial and card segments, with a strategic shift toward higher-yielding categories and improved treasury management capabilities.

• Balance sheet repositioning includes growing consumer deposits, reducing high-cost deposits, and selling non-core portfolios, supporting a path to a 3% net interest margin by 2027.

Economic and industry outlook

• Consumer and corporate fundamentals remain strong, with healthy credit and spending, though consumer sentiment is subdued.

• Tariffs are not seen as consequential for most clients, who have mitigation strategies in place.

• Competitive environment for deposits remains intense, but unique value propositions and bundled products are driving higher consumer deposit growth.

Financial performance and guidance

• Net interest income and fee income are both tracking with a bias to the upside, supported by capital markets and impact finance strength.

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

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