Company: USB-PA
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0000036104-25-000055
Chunk: 192

Company: US BANCORP \DE\
Filing Date: 2025-08-07
Form: 10-Q
Chunk 192
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 for determining the appropriate allowance for credit losses also considers the imprecision inherent in the methodologies used and allocated to the various loan portfolios. As a result, amounts determined under the methodologies described above are adjusted by management to consider the potential impact of other qualitative factors not captured in the quantitative model adjustments which include, but are not limited to, the following: model imprecision, imprecision in economic scenario assumptions, and emerging risks related to either changes in the environment that are affecting specific portfolios, or changes in portfolio concentrations over time that may affect model performance. The consideration of these items results in adjustments to allowance amounts included in the Company’s allowance for credit losses for each loan portfolio.

The Company also assesses the credit risk associated with off-balance sheet loan commitments, letters of credit, investment securities and derivatives. Credit risk associated with derivatives is reflected in the fair values recorded for those positions. The liability for off-balance sheet credit exposure related to loan commitments and other credit guarantees is included in other liabilities. Because business processes and credit risks associated with unfunded credit commitments are essentially the same as for loans, the Company utilizes similar processes to estimate its liability for unfunded credit commitments.

The results of the analysis are evaluated quarterly to confirm the estimates are appropriate for each specific loan portfolio, as well as the entire loan portfolio, as the entire allowance for credit losses is available for the entire loan portfolio.

| U.S. Bancorp |     | 41 |

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

| Three Months Ended June 30           
 (Dollars in Millions)                
 2025                                 |     |   |       | Commercial | Commercial Real Estate |       |     | Residential Mortgages |     |     | Credit Card |       |     | Other Retail |     |     | Total Loans |       |
|:-------------------------------------|:----|:--|------:|:-----------|:-----------------------|------:|:----|:----------------------|----:|:----|:------------|------:|:----|:-------------|----:|:----|:------------|------:|
| Balance at beginning of period       |     | $ | 2,212 |            | $                      | 1,432 |     | $                     | 789 |     | $           | 2,644 |     | $            | 838 |     | $           | 7,915 |
| Add                                  |     |   |       |            |                        |       |     |                       |