Company: USB-PA
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0000036104-25-000055
Chunk: 24

Company: US BANCORP \DE\
Filing Date: 2025-08-07
Form: 10-Q
Item: Item 7
Chunk 24
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 .79 26,306 96 .73 Total other retail41,398 116 .57 43,458 103 .48 Total loans$378,777 $1,101 .59 %$372,878 $1,026 .55 %

Analysis of Loan Net Charge-offs Total loan net charge-offs were $554 million for the second quarter and $1.1 billion for the first six months of 2025, compared with $538 million and $1.0 billion, respectively, for the same periods of 2024. The increase in net charge-offs in the second quarter of 2025, compared with the second quarter of 2024, was driven by higher commercial real estate loan net charge-offs, partially offset by lower commercial loan net charge-offs. The increase in net charge-offs in the first six months of 2025, compared with the first six months of 2024, was primarily due to higher commercial and credit card loan net charge-offs. The ratio of total loan net charge-offs to average loans outstanding on an annualized basis for both the second quarter and first six 

16U.S. Bancorp

months of 2025 was 0.59 percent, compared with 0.58 percent and 0.55 percent, respectively, for the same periods of 2024.Analysis and Determination of the Allowance for Credit Losses The allowance for credit losses is established for current expected credit losses on the Company’s loan and lease portfolio, including unfunded credit commitments. The allowance considers expected losses for the remaining lives of the applicable assets, net of expected recoveries. The allowance for credit losses is increased through provisions charged to earnings and reduced by net charge-offs. Management evaluates the appropriateness of the allowance for credit losses on a quarterly basis. Multiple economic scenarios are considered over a three-year reasonable and supportable forecast period, which includes increasing consideration of historical loss experience over years two and three. These economic scenarios are constructed with interrelated projections of multiple economic variables, and loss estimates are produced that consider the historical correlation of those economic variables with credit losses. After the forecast period, the Company fully reverts to long-term historical loss experience, adjusted for expected prepayments and characteristics of the current loan and lease portfolio, to estimate losses over the remaining life of the portfolio. The economic scenarios are updated at least quarterly and are designed to provide a range of reasonable estimates, both better and worse than current expectations. Scenarios are weighted based