“In the first quarter we delivered a return on tangible common equity of 17.4%, net income of $1.5 billion, both as adjusted, and net revenue of $6.7 billion. Our common equity tier 1 ratio ended the quarter at 10.0%. Diluted earnings per share of $0.90, as adjusted, excluded $(0.12) of notable items that included the last of our merger and integration-related charges related to the acquisition of MUFG Union Bank and an anticipated increase in the FDIC special assessment. Our results benefited from good growth across our fee businesses driven by strong underlying client growth and activity, as well as prudent expense management. Despite a challenging interest rate environment and pressure on industry deposit levels, we again saw growth in consumer deposits during the quarter. We continue to strategically invest in our digital and payments capabilities, our historical risk discipline remains intact, and our capital and liquidity profile is strong. I would like to thank our dedicated U.S. Bank employees for all that they do to support our customers, communities and shareholders – it is because of them that we remain well-positioned to execute on our capital-efficient growth objectives and industry-leading returns.”

(a)1Q24 excludes $265 million ($199 million net-of-tax) of notable items including: $155 million of merger and integration-related charges and a $110 million charge for the increase in the FDIC special assessment. 4Q23 excludes $1.1 billion ($780 million net-of-tax, including a $70 million discrete tax benefit) of notable items including: $(118) million of noninterest income related to investment securities balance sheet repositioning and capital management actions, $171 million of merger and integration-related charges, $734 million of FDIC special assessment charges and a $110 million charitable contribution. 1Q23 excludes $244 million ($183 million net-of-tax) of merger and integration-related charges.

(b)See Non-GAAP Financial Measures reconciliation beginning on page 18

Net income attributable to U.S. Bancorp was $1,319 million for the first quarter of 2024, $379 million lower than the $1,698 million for the first quarter of 2023 and $472 million higher than the $847 million for the fourth quarter of 2023. Diluted earnings per common share was $0.78 in the first quarter of 2024, compared with $1.04 in the first quarter of 2023 and $0.49 in the fourth quarter of 2023. The first quarter of 2024 included $199 million, or ($0.12) per diluted common share, of notable items, net-of-tax, compared with $183 million or ($0.12) per diluted common share in the first quarter of 2023 and $780 million or ($0.50) per diluted common share in the fourth quarter of 2023. On an adjusted basis, excluding the impacts of these notable items, net income applicable to common shareholders for the first quarter of 2024 was $1,407 million, which was $366 million lower than the first quarter of 2023 and $134 million lower than the fourth quarter of 2023. Adjusted diluted earnings per common share was $0.90 in the first quarter of 2024.

The decrease in net income attributable to U.S. Bancorp year-over-year was primarily due to lower total net revenue and an increase in the provision for credit losses, partially offset by lower noninterest expense. Pretax income, excluding notable items, in the first quarter decreased 19.2 percent compared with a year ago. Net interest income decreased 14.0 percent on a year-over-year taxable-equivalent basis, due to the impact of higher interest rates on deposit mix and pricing, partially offset by higher rates on earning assets. The net interest margin decreased to 2.70 percent in the first quarter of 2024 from 3.10 percent in the first quarter of 2023 driven by similar factors. Noninterest income increased 7.7 percent compared with a year ago driven by higher fee revenue across most categories. Noninterest expense decreased 2.1 percent (2.7 percent excluding notable items) primarily due to prudent expense management, continued focus on operational efficiency, and synergies from the MUB acquisition, partially offset by higher compensation and employee benefits expense to support business growth. Provision for credit losses increased $126 million (29.5 percent) compared with the first quarter of 2023 largely driven by normalization in the credit environment, partially offset by relative stability in the economic outlook.

Net income attributable to U.S. Bancorp increased on a linked quarter basis primarily due to a decline in notable items from the prior quarter. Pretax income, excluding notable items, decreased 9.1 percent on a linked quarter basis. Net interest income decreased 3.1 percent on a taxable-equivalent basis due to deposit mix and pricing, partially offset by higher rates on earning assets. The net interest margin decreased to 2.70 percent in the first quarter of 2024 from 2.78 percent in the fourth quarter of 2023 driven by similar factors. Noninterest income in the first quarter of 2024 decreased 1.4 percent, excluding notable items in the fourth quarter of 2023, primarily due to lower payment services revenue and other noninterest income, partially offset by higher commercial products revenue and mortgage banking revenue. Excluding notable items, noninterest expense decreased 0.2 percent on a linked quarter basis due to prudent expense management. The provision for credit losses increased $41 million (8.0 percent) compared with the fourth quarter of 2023 primarily due to continued normalization in the credit environment.

Net interest income on a taxable-equivalent basis in the first quarter of 2024 was $4,015 million, a decrease of $653 million (14.0 percent) from the first quarter of 2023. The decrease was primarily due to the impact of deposit mix and pricing, partially offset by higher rates on earning assets. Average earning assets were $11.5 billion (1.9 percent) lower than the first quarter of 2023, reflecting decreases of $15.7 billion (4.1 percent) in average total loans and $4.9 billion (2.9 percent) in average investment securities due to balance sheet repositioning and liquidity management, while average interest-bearing deposits with banks increased $7.6 billion (17.5 percent).

Net interest income on a taxable-equivalent basis decreased $127 million (3.1 percent) on a linked quarter basis primarily due to the impact of deposit mix and pricing. Average earning assets were $1.9 billion (0.3 percent) higher on a linked quarter basis, reflecting increases of $3.4 billion (7.1 percent) in average interest-bearing deposits with banks, partially offset by decreases in average total loans of $1.8 billion (0.5 percent) and average investment securities of $649 million (0.4 percent) reflecting balance sheet repositioning.

The net interest margin in the first quarter of 2024 was 2.70 percent, compared with 3.10 percent in the first quarter of 2023 and 2.78 percent in the fourth quarter of 2023. The decreases in the net interest margin from the prior year and the linked quarter were driven by deposit mix and pricing.

Average total loans for the first quarter of 2024 were $15.7 billion (4.1 percent) lower than the first quarter of 2023. The decrease was primarily due to lower total commercial loans (3.6 percent), total commercial real estate loans (4.6 percent) and total other retail loans (18.5 percent), partially offset by higher credit card loans (9.3 percent). The decrease in commercial loans was primarily due to decreased demand as corporate customers accessed the capital markets. The decrease in commercial real estate loans was primarily due to payoffs exceeding a reduced level of new originations. The decrease in other retail loans was primarily due to balance sheet repositioning and capital management activities. The increase in credit card loans was primarily driven by higher spend volume.

Average total loans were $1.8 billion (0.5 percent) lower than the fourth quarter of 2023. The decrease was primarily due to lower total commercial real estate loans (1.5 percent) and total other retail loans (2.9 percent). The decrease in total commercial real estate loans was primarily due to payoffs exceeding a reduced level of new originations. The decrease in other retail loans was primarily due to lower automobile loans.

Average total deposits for the first quarter of 2024 were $7.3 billion (1.4 percent) lower than the first quarter of 2023. Average noninterest-bearing deposits decreased $45.0 billion (34.6 percent) driven by decreases within Wealth, Corporate, Commercial and Institutional Banking and Consumer and Business Banking. The decrease was due to the impact of higher interest rates and a product change for certain MUB retail checking accounts into interest checking accounts at conversion to create a better customer experience. Average total savings deposits were $18.0 billion (5.2 percent) higher year-over-year driven by increases within Wealth, Corporate, Commercial and Institutional Banking and Consumer and Business Banking. Average time deposits were $19.7 billion (55.5 percent) higher than the first quarter of 2023 mainly within Consumer and Business Banking, partially offset by decreases within Wealth, Corporate, Commercial and Institutional Banking. Changes in time deposits are primarily related to those deposits managed as an alternative to other funding sources, based largely on relative pricing and liquidity characteristics.

Average total deposits increased $279 million (0.1 percent) from the fourth quarter of 2023. On a linked quarter basis, average noninterest-bearing deposits decreased $5.8 billion (6.4 percent) driven by decreases within Wealth, Corporate, Commercial and Institutional Banking and Consumer and Business Banking due to the impact of higher interest rates. Average total savings deposits increased $3.7 billion (1.0 percent) driven by increases within Wealth, Corporate, Commercial and Institutional Banking and Consumer and Business Banking. Average time deposits were $2.4 billion (4.6 percent) higher on a linked quarter basis mainly within Consumer and Business Banking, partially offset by decreases in Wealth, Corporate, Commercial and Institutional Banking. Changes in time deposits are primarily related to those deposits managed as an alternative to other funding sources, based largely on relative pricing and liquidity characteristics.

First quarter noninterest income of $2,700 million was $193 million (7.7 percent) higher than the first quarter of 2023 driven by higher payment services revenue, trust and investment management fees, commercial products revenue, and mortgage banking revenue, partially offset by lower other noninterest income. Payment services revenue increased $41 million (4.4 percent) compared with the first quarter of 2023. Within payment services revenue, card revenue increased $32 million (8.9 percent) driven by higher spend volume and favorable rates, and merchant processing revenue increased $14 million (3.6 percent) due to higher sales volume. Trust and investment management fees increased $51 million (8.6 percent) driven by business growth and favorable market conditions. Commercial products revenue increased $54 million (16.2 percent) driven by higher corporate bond fees. Mortgage banking revenue increased $38 million (29.7 percent) primarily driven by higher gain on sale margins. Other revenue decreased $25 million (15.7 percent).

Noninterest income was $80 million (3.1 percent) higher in the first quarter of 2024 compared with the fourth quarter of 2023. Excluding the balance sheet optimization impact in the fourth quarter of 2023, first quarter noninterest income seasonally declined $38 million (1.4 percent) compared with the fourth quarter of 2023. Payment services revenue decreased $50 million (4.9 percent) compared with the fourth quarter of 2023, primarily due to seasonally lower spend volume in card revenue of $44 million (10.1 percent). Merchant processing revenue was also seasonally lower by $8 million (2.0 percent). Commercial products revenue increased $62 million (19.0 percent) due to higher corporate bond fees given strong capital markets activities. Mortgage banking revenue increased $29 million (21.2 percent) primarily driven by higher gain on sale margins. Other revenue decreased $94 million (41.2 percent) principally driven by seasonally lower tax credit investment activity.

First quarter noninterest expense of $4,459 million was $96 million (2.1 percent) lower than the first quarter of 2023. Excluding notable items of $265 million in the first quarter of 2024 and $244 million in the first quarter of 2023, first quarter noninterest expense decreased $117 million (2.7 percent) compared with the first quarter of 2023, due to prudent expense management, continued focus on operational efficiency, and synergies from the MUB acquisition, partially offset by higher compensation and employee benefits expense. Compensation and employee benefits expense increased $45 million (1.7 percent) compared with the first quarter of 2023 primarily due to merit increases, higher performance-based incentives, and higher employee benefits. Net occupancy and equipment decreased $25 million (7.8 percent) and professional services expense decreased $24 million (17.9 percent) due to prudent expense management, continued focus on operational efficiency, and synergies from the MUB acquisition. Other noninterest expense decreased $117 million (27.5 percent) primarily due to lower FDIC insurance expense, a decline in the future delivery exposures for merchant and airline processing and other liabilities.

Noninterest expense decreased $760 million (14.6 percent) on a linked quarter basis. Excluding notable items of $265 million in the first quarter of 2024 and $1,015 million in the fourth quarter of 2023, first quarter noninterest expense decreased $10 million (0.2 percent) from the fourth quarter of 2023 driven by prudent expense management and continued focus on operational efficiency, partially offset by higher compensation expense. Compensation expense increased $182 million (7.3 percent) primarily due to higher performance-based incentives, variable compensation, and employee benefits. Net occupancy and equipment decreased $20 million (6.3 percent) and professional services decreased $48 million (30.4 percent) due to prudent expense management and continued focus on operational efficiency. Marketing and business development decreased $60 million (30.6 percent) due to the timing of campaigns. Other noninterest expense decreased $48 million (13.5 percent) primarily due to lower costs related to tax-advantaged projects.

The provision for income taxes for the first quarter of 2024 resulted in a tax rate of 22.1 percent on a taxable-equivalent basis (effective tax rate of 20.7 percent), compared with 22.3 percent on a taxable-equivalent basis (effective tax rate of 21.1 percent) in the first quarter of 2023, and a tax rate of 16.5 percent on a taxable-equivalent basis (effective tax rate of 13.9 percent) in the fourth quarter of 2023. Excluding the impact of notable items, the first quarter of 2024 tax rate was 22.5 percent on a taxable-equivalent basis, compared with 22.6 percent on a taxable-equivalent basis in the first quarter of 2023, and 24.2 percent on a taxable-equivalent basis in the fourth quarter of 2023. The fourth quarter of 2023 included $70 million of favorable tax settlements.

The Company’s provision for credit losses for the first quarter of 2024 was $553 million, compared with $512 million in the fourth quarter of 2023 and $427 million in the first quarter of 2023. The first quarter of 2024 provision was $41 million (8.0 percent) higher than the fourth quarter of 2023 and $126 million (29.5 percent) higher than the first quarter of 2023, largely driven by normalization in the credit environment, partially offset by relative stability in the economic outlook relative to the year-over-year period. The Company continues to monitor economic uncertainty related to high interest rates, persistent inflationary pressures, and other economic factors that affect the financial strength of corporate and consumer borrowers. Commercial real estate valuations are also affected by rising interest rates and the changing demand for office properties.

Total net charge-offs in the first quarter of 2024 were $488 million, compared with $463 million in the fourth quarter of 2023 and $373 million in the first quarter of 2023. Net charge-offs for the first quarter of 2023 included a notable item of $91 million of charge-offs related to uncollectible amounts on acquired loans associated with the acquisition of MUB. The net charge-off ratio was 0.53 percent in the first quarter of 2024, compared with 0.49 percent in the fourth quarter of 2023 and 0.39 percent in the first quarter of 2023 (0.30 percent excluding the impact of the first quarter of 2023 notable item). Net charge-offs, excluding the impact of the first quarter of 2023 notable item, increased $206 million on a year-over-year basis reflecting higher charge-offs in most loan categories consistent with normalizing credit conditions.

The allowance for credit losses was $7,904 million at March 31, 2024, compared with $7,839 million at December 31, 2023, and $7,523 million at March 31, 2023. The linked quarter increase in the allowance for credit losses was primarily driven by credit migration in consumer and small business cards. The ratio of the allowance for credit losses to period-end loans was 2.11 percent at March 31, 2024, compared with 2.10 percent at December 31, 2023, and 1.94 percent at March 31, 2023. The ratio of the allowance for credit losses to nonperforming loans was 454 percent at March 31, 2024, compared with 541 percent at December 31, 2023, and 660 percent at March 31, 2023.

Nonperforming assets were $1,786 million at March 31, 2024, compared with $1,494 million at December 31, 2023, and $1,181 million at March 31, 2023. The ratio of nonperforming assets to loans and other real estate was 0.48 percent at March 31, 2024, compared with 0.40 percent at December 31, 2023, and 0.30 percent at March 31, 2023. The increase in nonperforming assets on a linked quarter basis was primarily due to higher commercial and commercial real estate nonperforming loans. The increase in nonperforming assets on a year-over year basis was primarily due to higher commercial and commercial real estate nonperforming loans, partially offset by lower nonperforming residential mortgages. Accruing loans 90 days or more past due were $714 million at March 31, 2024, compared with $698 million at December 31, 2023, and $494 million at March 31, 2023.

Total U.S. Bancorp shareholders’ equity was $55.6 billion at March 31, 2024, compared with $55.3 billion at December 31, 2023 and $53.0 billion at March 31, 2023. The Company suspended all common stock repurchases at the beginning of the third quarter of 2021, except for those done exclusively in connection with its stock-based compensation programs, due to its acquisition of MUB. The Company will evaluate its share repurchases in connection with the potential capital requirements given proposed regulatory capital rules and related landscape.

All regulatory ratios continue to be in excess of “well-capitalized” requirements. The common equity tier 1 capital to risk-weighted assets ratio using the Basel III standardized approach was 10.0 percent at March 31, 2024, compared with 9.9 percent at December 31, 2023, and 8.5 percent at March 31, 2023. The common equity tier 1 capital to risk-weighted assets ratio, reflecting the full implementation of the current expected credit losses methodology was 9.9 percent at March 31, 2024, compared with 9.7 percent at December 31, 2023, and 8.3 percent at March 31, 2023.

On Wednesday, April 17, 2024 at 7 a.m. CT, Chairman, President and Chief Executive Officer Andy Cecere and Senior Executive Vice President and Chief Financial Officer John Stern will host a conference call to review the financial results. The live conference call will be available online or by telephone. To access the webcast and presentation, visit the U.S. Bancorp website at usbank.com and click on “About us”, “Investor relations”, "News and events" and “Webcasts & presentations.” To access the conference call from locations within the United States and Canada, please dial 888-210-4659. Participants calling from outside the United States and Canada, please dial 646-960-0383. The access code for all participants is 7269933. For those unable to participate during the live call, a replay will be available at approximately 10 a.m. CT on Wednesday, April 17, 2024. To access the replay, please visit the U.S. Bancorp website at usbank.com and click on “About us”, “Investor relations”, "News and events" and “Webcasts & presentations.”

U.S. Bancorp, with more than 70,000 employees and $684 billion in assets as of March 31, 2024, is the parent company of U.S. Bank National Association. Headquartered in Minneapolis, the company serves millions of customers locally, nationally and globally through a diversified mix of businesses including consumer banking, business banking, commercial banking, institutional banking, payments and wealth management. U.S. Bancorp has been recognized for its approach to digital innovation, community partnerships and customer service, including being named one of the 2024 World’s Most Ethical Companies and Fortune’s most admired superregional bank. Learn more at usbank.com/about.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:

This press release contains forward-looking statements about U.S. Bancorp. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements and are based on the information available to, and assumptions and estimates made by, management as of the date hereof. These forward-looking statements cover, among other things, future economic conditions and the anticipated future revenue, expenses, financial condition, asset quality, capital and liquidity levels, plans, prospects and operations of U.S. Bancorp. Forward-looking statements often use words such as “anticipates,” “targets,” “expects,” “hopes,” “estimates,” “projects,” “forecasts,” “intends,” “plans,” “goals,” “believes,” “continue” and other similar expressions or future or conditional verbs such as “will,” “may,” “might,” “should,” “would” and “could.”

Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those set forth in forward-looking statements, including the following risks and uncertainties:

•Deterioration in general business and economic conditions or turbulence in domestic or global financial markets, which could adversely affect U.S. Bancorp’s revenues and the values of its assets and liabilities, reduce the availability of funding to certain financial institutions, lead to a tightening of credit, and increase stock price volatility;

•Turmoil and volatility in the financial services industry, including failures or rumors of failures of other depository institutions, which could affect the ability of depository institutions, including U.S. Bank National Association, to attract and retain depositors, and could affect the ability of financial services providers, including U.S. Bancorp, to borrow or raise capital;

•Increases in FDIC assessments due to bank failures;

•Actions taken by governmental agencies to stabilize the financial system and the effectiveness of such actions;

•Uncertainty regarding the content, timing and impact of changes to regulatory capital, liquidity and resolution-related requirements applicable to large banking organizations in response to adverse developments affecting the banking sector;

•Changes to statutes, regulations, or regulatory policies or practices, including capital and liquidity requirements, and the enforcement and interpretation of such laws and regulations, and U.S. Bancorp’s ability to address or satisfy those requirements and other requirements or conditions imposed by regulatory entities;

•Changes in interest rates;

•Increases in unemployment rates;

•Deterioration in the credit quality of U.S. Bancorp's loan portfolios or in the value of the collateral securing those loans;

•Risks related to originating and selling mortgages, including repurchase and indemnity demands, and related to U.S. Bancorp’s role as a loan servicer;

•Impacts of current, pending or future litigation and governmental proceedings;

•Increased competition from both banks and non-banks;

•Effects of climate change and related physical and transition risks;

•Changes in customer behavior and preferences and the ability to implement technological changes to respond to customer needs and meet competitive demands;

•Breaches in data security;

•Failures or disruptions in or breaches of U.S. Bancorp’s operational, technology or security systems or infrastructure, or those of third parties, including as a result of cybersecurity incidents;

•Failures to safeguard personal information;

•Impacts of pandemics, natural disasters, terrorist activities, civil unrest, international hostilities and geopolitical events;

•Impacts of supply chain disruptions, rising inflation, slower growth or a recession;

•Failure to execute on strategic or operational plans;

•Effects of mergers and acquisitions and related integration;

•Effects of critical accounting policies and judgments;

•Effects of changes in or interpretations of tax laws and regulations;

•Management’s ability to effectively manage credit risk, market risk, operational risk, compliance risk, strategic risk, interest rate risk, liquidity risk and reputation risk; and

•The risks and uncertainties more fully discussed in the section entitled “Risk Factors” of U.S. Bancorp’s Form 10-K for the year ended December 31, 2023, and subsequent filings with the Securities and Exchange Commission.

In addition, U.S. Bancorp’s acquisition of MUB presents risks and uncertainties, including, among others, the risk that any revenue synergies and other anticipated benefits of the acquisition may not be realized or may take longer than anticipated to be realized.

In addition, factors other than these risks also could adversely affect U.S. Bancorp’s results, and the reader should not consider these risks to be a complete set of all potential risks or uncertainties. Readers are cautioned not to place undue reliance on any forward-looking statements. Forward-looking statements speak only as of the date hereof, and U.S. Bancorp undertakes no obligation to update them in light of new information or future events.

In addition to capital ratios defined by banking regulators, the Company considers various other measures when evaluating capital utilization and adequacy, including: 

•Tangible common equity to tangible assets

•Tangible common equity to risk-weighted assets

•Common equity tier 1 capital to risk-weighted assets, reflecting the full implementation of the current expected credit losses methodology, and

•Return on tangible common equity.

These measures are viewed by management as useful additional methods of evaluating the Company’s utilization of its capital held and the level of capital available to withstand unexpected negative market or economic conditions. Additionally, presentation of these measures allows investors, analysts and banking regulators to assess the Company’s capital position and use of capital relative to other financial services companies. These measures are not defined in generally accepted accounting principles (“GAAP”) or are not currently effective or defined in banking regulations. In addition, certain of these measures differ from currently effective capital ratios defined by banking regulations principally in that the currently effective ratios, which are subject to certain transitional provisions, temporarily exclude the impact of the 2020 adoption of accounting guidance related to impairment of financial instruments based on the current expected credit losses methodology. As a result, these measures disclosed by the Company may be considered non-GAAP financial measures. Management believes this information helps investors assess trends in the Company’s capital utilization and adequacy.

The Company also discloses net interest income and related ratios and analysis on a taxable-equivalent basis, which may also be considered non-GAAP financial measures. The Company believes this presentation to be the preferred industry measurement of net interest income as it provides a relevant comparison of net interest income arising from taxable and tax-exempt sources. In addition, certain performance measures, including the efficiency ratio, tangible efficiency ratio and net interest margin, utilize net interest income on a taxable-equivalent basis.

The adjusted return on average assets, adjusted return on tangible common equity, adjusted efficiency ratio, adjusted net income and adjusted diluted earnings per common share exclude notable items. Management uses these measures in their analysis of the Company’s performance and believes these measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods.

There may be limits in the usefulness of these measures to investors. As a result, the Company encourages readers to consider the consolidated financial statements and other financial information contained in this press release in their entirety, and not to rely on any single financial measure. A table follows that shows the Company’s calculation of these non-GAAP financial measures.

(1)Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements.

(2)Includes the estimated increase in the allowance for credit losses related to the adoption of the current expected credit losses methodology net of deferred taxes.

(3)Includes the impact of the estimated increase in the allowance for credit losses related to the adoption of the current expected credit losses methodology.

(4)Based on a federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes.

(1)Notable items of $265 million ($199 million net-of-tax) for the three months ended March 31, 2024 included $155 million of merger and integration-related charges and a $110 million charge for the increase in the FDIC special assessment. Notable items of $1.1 billion ($780 million net-of-tax, including a $70 million discrete tax benefit) for the three months ended December 31, 2023 included $(118) million of noninterest income related to investment securities balance sheet repositioning and capital management actions, $171 million of merger and integration-related charges, $734 million of FDIC special assessment charges and a $110 million charitable contribution. Notable items for the three months ended March 31, 2023 included $244 million ($183 million net-of-tax) of merger and integration-related charges.

(2)Based on a federal income tax rate of 21 percent for those assets and liabilities whose income or expense is not included for federal income tax purposes.

(3)Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements.

(4)Notable items for the three months ended June 30, 2023 included $309 million of net charge-offs related to balance sheet repositioning and capital management actions. Notable items for the three months ended March 31, 2023 included $91 million of net charge-offs related to uncollectible acquired loans, considered purchase credit deteriorated as of the date of the acquisition.

Lines of Business

The Company’s major lines of business are Wealth, Corporate, Commercial and Institutional Banking, Consumer and Business Banking, Payment Services, and Treasury and Corporate Support. Business line results are derived from the Company’s business unit profitability reporting systems by specifically attributing managed balance sheet assets, deposits and other liabilities and their related income or expense. Designations, assignments and allocations change from time to time as management systems are enhanced, methods of evaluating performance or product lines change or business segments are realigned to better respond to the Company’s diverse customer base. During 2024 and 2023, certain organization and methodology changes were made, including the Company combining its Wealth Management and Investment Services and Corporate and Commercial Banking lines of businesses to create the Wealth, Corporate, Commercial and Institutional Banking line of business during the third quarter of 2023. Prior period results were restated and presented on a comparable basis.

Wealth, Corporate, Commercial and Institutional Banking provides core banking, specialized lending, transaction and payment processing, capital markets, asset management, and brokerage and investment related services to wealth, middle market, large corporate, government and institutional clients.

Wealth, Corporate, Commercial and Institutional Banking generated $1,006 million of income before provision and taxes in the first quarter of 2024, compared with $1,230 million in the first quarter of 2023, and contributed $651 million of the Company’s net income in the first quarter of 2024. The provision for credit losses increased $164 million compared with the first quarter of 2023 primarily due to commercial real estate credit quality and select commercial downgrades. Total net revenue was $192 million (7.5 percent) lower in the first quarter of 2024 due to a decrease of $285 million (18.4 percent) in net interest income partially offset by an increase of $93 million (9.1 percent) in total noninterest income. Net interest income decreased due to the impact of deposit mix and pricing, partially offset by higher rates on earning assets. Total noninterest income increased primarily due to higher trust and investment management fees driven by business growth and favorable market conditions, and higher commercial products revenue mainly due to higher corporate bond fees. Total noninterest expense increased $32 million (2.4 percent) compared with the first quarter of 2023 primarily due to higher compensation expense.