USB-PH · U.S. Bancorp PERP PFD SER A

Net income for the first quarter of fiscal year 2026 totaled $1.9 billion, an increase of 13.8% compared to $1.7 billion in the same period last year. This growth was not attributable to one-time items or margin expansion, but rather to sustained execution across core balance sheet levers: loan growth, improved earning asset mix, and the mechanical benefit of fixed-rate asset repricing in a higher-rate environment. Management explicitly identifies these three factors as the primary drivers of higher net interest income — a point reinforced across disclosures in the filing’s Management’s Discussion and Analysis section.

The growth in average commercial loans reflects targeted expansion in lending to financial institutions, a segment where the Company has maintained disciplined underwriting and pricing discipline. That growth was partially offset by a reduction in corporate loans, suggesting a strategic reallocation rather than broad-based portfolio expansion. Similarly, the rise in average credit card loans stems directly from higher sales volume — a demand-driven outcome tied to consumer spending trends and competitive positioning in payment services. These dynamics are further corroborated by operational signals: merchant processing services benefited from favorable rate structures, and card revenue increased alongside credit card sales volume.

Diluted earnings per share rose to $1.18, up 14.6% year-over-year from $1.03. This aligns closely with the net income growth rate, indicating that share count changes — including repurchases disclosed in the Capital Management section on page 22 — did not materially dilute or amplify per-share results during the quarter. The consistency between net income and EPS growth reinforces that the earnings improvement reflects underlying operating performance, not capital structure adjustments.