“In the second quarter, we posted diluted earnings per share of $0.98 and delivered a return on tangible common equity of 18.6%, both as adjusted. This quarter we generated $6.9 billion in net revenue driven by improved linked quarter net interest income, supported by healthy deposit growth, and continued momentum in leveraging our diversified fee income platform to deepen relationships. We continued to invest for the future while managing our operating expenses prudently, with both linked quarter and year-over-year declines in noninterest expense. This quarter, credit metrics continued to perform in line with expectations, and we believe our reserve levels are appropriate for future losses. All capital and liquidity ratios remain strong, and we increased our CET1 ratio by 30 basis points to end the quarter at 10.3% - a year-over-year increase of 120 basis points. As we head into the back half of this year, we are well-positioned with national scale, an interconnected business model and superior digital capabilities, to continue our delivery of industry leading returns over the long term. I would like to thank all our employees for their continued focus on best serving our clients, communities, and shareholders.”

(a)2Q24 excludes a $26 million ($19 million net-of-tax) notable item for an increase in the FDIC special assessment. 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. 2Q23 excludes $575 million ($432 million net-of-tax) of notable items including: $(22) million of noninterest income related to balance sheet repositioning and capital management actions, $310 million of merger and integration-related charges and $243 million of provision for credit losses related to balance sheet repositioning and capital management actions.

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

(c)2024 excludes $291 million ($218 million net-of-tax) of notable items including: $155 million of merger and integration-related charges and $136 million for the increase in the FDIC special assessment. 2023 excludes $819 million ($615 million net-of-tax) of notable items including: $(22) million of noninterest income related to balance sheet repositioning and capital management actions, $554 million of merger and integration-related charges and $243 million of provision for credit losses related to balance sheet repositioning and capital management actions.

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

Net income attributable to U.S. Bancorp was $1,603 million for the second quarter of 2024, $242 million higher than the $1,361 million for the second quarter of 2023 and $284 million higher than the $1,319 million for the first quarter of 2024. Diluted earnings per common share was $0.97 in the second quarter of 2024, compared with $0.84 in the second quarter of 2023 and $0.78 in the first quarter of 2024. The second quarter of 2024 included $19 million, or ($0.01) per diluted common share, of notable item(s), net-of-tax, compared with $432 million or ($0.28) per diluted common share in the second quarter of 2023 and $199 million or ($0.12) per diluted common share in the first quarter of 2024. On an adjusted basis, excluding the impacts of these notable items, net income applicable to common shareholders for the second quarter of 2024 was $1,537 million, which was $173 million lower than the second quarter of 2023 and $130 million higher than the first quarter of 2024. Diluted earnings per common share was $0.98 in the second quarter of 2024, on an adjusted basis.

The increase in net income attributable to U.S. Bancorp year-over-year was primarily due to lower noninterest expense, a decline in notable items from the prior year quarter, and a decrease in the provision for credit losses, partially offset by lower total net revenue. Pretax income, excluding notable items, in the second quarter of 2024 decreased 10.6 percent compared with a year ago. Net interest income decreased 8.9 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 and balance sheet optimization activities. The net interest margin decreased to 2.67 percent in the second quarter of 2024 from 2.90 percent in the second quarter of 2023, driven by similar factors. Noninterest income increased 3.3 percent (2.4 percent excluding notable items in the prior year quarter) compared with a year ago driven by higher fee revenue across most categories. The current year quarter included losses on the sales of securities which was offset by a gain on the sale of mortgage servicing rights. Noninterest expense decreased 7.8 percent (1.7 percent excluding notable items) primarily due to prudent expense management, continued focus on operational efficiency, and synergies from the acquisition of MUFG Union Bank ("MUB"), partially offset by higher marketing and business development expense. The provision for credit losses decreased $253 million (30.8 percent) ($10 million (1.7 percent) excluding notable items in the prior year quarter) compared with the second quarter of 2023 largely driven by stabilization in both the economic and credit environment amidst stress in the commercial real estate portfolio.

Net income attributable to U.S. Bancorp increased on a linked quarter basis primarily due to higher total net revenue and a decline in notable items from the prior quarter. Pretax income, excluding notable items, increased 7.3 percent on a linked quarter basis. Net interest income increased 0.9 percent on a taxable-equivalent basis due to deposit and earning asset growth, earning asset repricing and mix as well as continued discipline of overall funding costs. The net interest margin decreased to 2.67 percent in the second quarter of 2024 from 2.70 percent in the first quarter of 2024 driven by a higher earning asset base partially offset by factors mentioned above. Noninterest income in the second quarter of 2024 increased 4.3 percent from the first quarter of 2024, primarily due to higher payment services revenue, while losses on the sales of securities was offset by a gain on the sale of mortgage servicing rights. Excluding notable items, noninterest expense decreased 0.1 percent on a linked quarter basis due to lower compensation and employee benefits expense, partially offset by higher marketing and business development expense. The provision for credit losses increased $15 million (2.7 percent) compared with the first quarter of 2024 primarily due to loan portfolio growth.

Net interest income on a taxable-equivalent basis in the second quarter of 2024 was $4,052 million, a decrease of $397 million (8.9 percent) from the second 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 $4.9 billion (0.8 percent) lower than the second quarter of 2023, reflecting decreases of $14.1 billion (3.6 percent) in average total loans, partially offset by increases of $7.2 billion (4.5 percent) in average investment securities due to balance sheet positioning and liquidity management and $1.1 billion (2.1 percent) in average interest-bearing deposits with banks.

Net interest income on a taxable-equivalent basis increased $37 million (0.9 percent) on a linked quarter basis primarily due to deposit and earning asset growth, earning asset repricing and mix as well as continued discipline of overall funding costs. Average earning assets were $12.8 billion (2.1 percent) higher on a linked quarter basis, reflecting increases in average investment securities of $5.8 billion (3.6 percent), average total loans of $3.6 billion (1.0 percent), and average interest-bearing deposits with banks of $2.2 billion (4.2 percent).

The net interest margin in the second quarter of 2024 was 2.67 percent, compared with 2.90 percent in the second quarter of 2023 and 2.70 percent in the first quarter of 2024. The decreases in the net interest margin from the prior year and the linked quarter were driven by the factors mentioned above, inclusive of changes in balance sheet composition. The yields on earning assets continue to expand as fixed-rate assets reprice at higher levels while deposit migration has been stabilizing and the rate of change in deposit pricing has moderated over the past several quarters.

Average total loans for the second quarter of 2024 were $14.1 billion (3.6 percent) lower than the second quarter of 2023. The decrease was primarily due to lower total commercial loans (2.7 percent), total commercial real estate loans (4.8 percent) and total other retail loans (17.1 percent), partially offset by higher credit card loans (8.8 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 executed in 2023. The increase in credit card loans was primarily driven by higher spend volume.

Average total loans were $3.6 billion (1.0 percent) higher than the first quarter of 2024. The increase was primarily due to higher total commercial loans (2.7 percent) and credit card loans (1.5 percent), partially offset by lower total commercial real estate loans (1.4 percent) and total other retail loans (1.0 percent). The increase in total commercial loans was primarily due to growth in corporate banking. The increase in credit card loans was primarily driven by higher spend volume. 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 second quarter of 2024 were $16.6 billion (3.3 percent) higher than the second quarter of 2023. Average noninterest-bearing deposits decreased $30.3 billion (26.7 percent) driven by balance decreases within Wealth, Corporate, Commercial and Institutional Banking and Consumer and Business Banking. The decrease was due in part 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 $33.1 billion (9.7 percent) higher year-over-year driven by increases within Wealth, Corporate, Commercial and Institutional Banking and Consumer and Business Banking. Average time deposits were $13.9 billion (31.9 percent) higher than the second quarter of 2023 mainly within Consumer and Business 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 $10.8 billion (2.2 percent) over the first quarter of 2024. On a linked quarter basis, average noninterest-bearing deposits decreased $1.4 billion (1.6 percent) driven by a decrease within Wealth, Corporate, Commercial and Institutional Banking due to the impact of higher interest rates. Average total savings deposits increased $9.8 billion (2.7 percent) driven by increases within Wealth, Corporate, Commercial and Institutional Banking and Consumer and Business Banking. Average time deposits were $2.4 billion (4.4 percent) higher on a linked quarter basis mainly within Consumer and Business 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.

Second quarter noninterest income of $2,815 million was $89 million (3.3 percent) higher than the second quarter of 2023 ($67 million (2.4 percent) excluding the balance sheet optimization impact of $(22) million in the second quarter of 2023). The increase was driven by higher payment services revenue, trust and investment management fees, commercial products revenue, mortgage banking revenue, and investment product fees, partially offset by securities losses. Payment services revenue increased $29 million (2.8 percent) compared with the second quarter of 2023. Within payment services revenue, merchant processing revenue increased $18 million (4.1 percent) due to favorable rates. Trust and investment management fees increased $28 million (4.5 percent) driven by business growth and favorable market conditions. Commercial products revenue increased $16 million (4.5 percent) driven by higher corporate bond fees and foreign currency activity. Mortgage banking revenue increased $29 million (18.0 percent) primarily driven by a $30 million gain on the sale of mortgage servicing rights in the current year quarter. Investment product fees increased $14 million (20.6 percent) due to business growth and favorable market conditions. These increases were partially offset by losses of $36 million on securities sales.

Noninterest income was $115 million (4.3 percent) higher in the second quarter of 2024 compared with the first quarter of 2024. The increase was driven by higher payment services revenue, and mortgage banking revenue, partially offset by a decrease in commercial products revenue and securities losses. Payment services revenue increased $100 million (10.2 percent) on a linked quarter basis primarily due to seasonally higher card revenue of $36 million (9.2 percent) and merchant processing revenue of $53 million (13.2 percent), driven by higher spend volume as well as favorable rates. Mortgage banking revenue increased $24 million (14.5 percent) primarily driven by a $30 million gain on the sale of mortgage servicing rights. These increases were partially offset by losses of $36 million on securities sales and a decrease in commercial products revenue of $14 million (3.6 percent) due to lower corporate bond fees.

Second quarter noninterest expense of $4,214 million was $355 million (7.8 percent) lower than the second quarter of 2023. Excluding notable items of $26 million in the second quarter of 2024 and $310 million in the second quarter of 2023, second quarter noninterest expense decreased $71 million (1.7 percent) compared with the second quarter of 2023, due to prudent expense management, continued focus on operational efficiency, and synergies from the MUB acquisition, partially offset by higher marketing and business development expense. Compensation and employee benefits expense decreased $27 million (1.0 percent) compared with the second quarter of 2023 primarily due to synergies from the MUB acquisition, partially offset by merit increases and higher performance-based incentives. Professional services expense decreased $25 million (17.7 percent) and technology and communications expense decreased $13 million (2.5 percent), both due to synergies from the MUB acquisition. Marketing and business development increased $36 million (29.5 percent) due to the timing of campaigns. Other noninterest expense decreased $25 million (7.1 percent) primarily due to a decline in the future delivery exposures for merchant and airline processing and other liabilities.

Noninterest expense decreased $245 million (5.5 percent) from the first quarter of 2024. Excluding notable items of $26 million in the second quarter of 2024 and $265 million in the first quarter of 2024, second quarter noninterest expense decreased $6 million (0.1 percent) on a linked quarter basis, primarily driven by lower compensation and employee benefits expense, partially offset by higher net occupancy and equipment expense and marketing and business development expense. Compensation and employee benefits expense decreased $72 million (2.7 percent) primarily due to seasonally higher employee benefits in the first quarter of 2024, partially offset by higher performance-based incentives. Net occupancy and equipment expense increased $20 million (6.8 percent) due to the timing of maintenance projects. Marketing and business development expense increased $22 million (16.2 percent) due to the timing of campaigns and higher travel expenses.

The provision for income taxes for the second quarter of 2024 resulted in a tax rate of 22.7 percent on a taxable-equivalent basis (effective tax rate of 21.6 percent), compared with 23.3 percent on a taxable-equivalent basis (effective tax rate of 21.8 percent) in the second quarter of 2023, and a tax rate of 22.1 percent on a taxable-equivalent basis (effective tax rate of 20.7 percent) in the first quarter of 2024.

The Company’s provision for credit losses for the second quarter of 2024 was $568 million, compared with $553 million in the first quarter of 2024 and $821 million in the second quarter of 2023. The provision for credit losses in the second quarter of 2023 included a notable item of $243 million for balance sheet optimization activities. The second quarter of 2024 provision was $15 million (2.7 percent) higher than the first quarter of 2024 and $253 million (30.8 percent) lower than the second quarter of 2023 ($10 million (1.7 percent) lower excluding the notable item), largely driven by stabilization in the economic and credit environment. The Company continues to monitor economic uncertainty related to high interest rates, persistent inflationary pressures, and other economic factors that may affect the financial strength of corporate and consumer borrowers.

Total net charge-offs in the second quarter of 2024 were $538 million, compared with $488 million in the first quarter of 2024 and $649 million in the second quarter of 2023. Net charge-offs for the second quarter of 2023 included a notable item of $309 million of charge-offs related to balance sheet optimization activities. The net charge-off ratio was 0.58 percent in the second quarter of 2024, compared with 0.53 percent in the first quarter of 2024 and 0.67 percent in the second quarter of 2023 (0.35 percent excluding the impact of the second quarter of 2023 notable item). Net charge-offs, excluding the impact of the second quarter of 2023 notable item, increased $198 million (58.2 percent) on a year-over-year basis primarily reflecting higher charge-offs in credit cards and commercial loans.

The allowance for credit losses was $7,934 million at June 30, 2024, compared with $7,904 million at March 31, 2024, and $7,695 million at June 30, 2023. The linked quarter increase in the allowance for credit losses was primarily driven by portfolio growth. The ratio of the allowance for credit losses to period-end loans was 2.11 percent at June 30, 2024, and at March 31, 2024, compared with 2.03 percent at June 30, 2023. The ratio of the allowance for credit losses to nonperforming loans was 438 percent at June 30, 2024, compared with 454 percent at March 31, 2024, and 739 percent at June 30, 2023.

Nonperforming assets were $1,852 million at June 30, 2024, compared with $1,786 million at March 31, 2024, and $1,085 million at June 30, 2023. The ratio of nonperforming assets to loans and other real estate was 0.49 percent at June 30, 2024, compared with 0.48 percent at March 31, 2024, and 0.29 percent at June 30, 2023. The increase in nonperforming assets on a linked quarter basis was primarily due to higher commercial real estate office 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 $701 million at June 30, 2024, compared with $714 million at March 31, 2024, and $474 million at June 30, 2023.

Total U.S. Bancorp shareholders’ equity was $56.4 billion at June 30, 2024, compared with $55.6 billion at March 31, 2024 and $53.0 billion at June 30, 2023. The Company has currently suspended all common stock repurchases, except for those done exclusively in connection with its stock-based compensation programs. The Company will continue to 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 10.3 percent at June 30, 2024, compared with 10.0 percent at March 31, 2024, and 9.1 percent at June 30, 2023. The common equity tier 1 capital to risk-weighted assets ratio, reflecting the full implementation of the current expected credit losses methodology was 10.2 percent at June 30, 2024, compared with 9.9 percent at March 31, 2024, and 8.9 percent at June 30, 2023.

On Wednesday, July 17, 2024 at 7 a.m. CT, Chairman 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 & 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, July 17, 2024. To access the replay, please visit the U.S. Bancorp website at usbank.com and click on “About us”, “Investor relations”, "News & events" and “Webcasts & presentations.”

U.S. Bancorp, with more than 70,000 employees and $680 billion in assets as of June 30, 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;

•Changes in commercial real estate occupancy rates;

•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.

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, U.S. Bancorp (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 full 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 utilize net interest income on a taxable-equivalent basis, including the efficiency ratio, tangible efficiency ratio, net interest margin, and tax rate.

The adjusted return on average assets, adjusted return on tangible common equity, adjusted efficiency ratio, adjusted net income, adjusted diluted earnings per common share, and adjusted net charge-off ratio 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 for the three months ended June 30, 2024 included a $26 million ($19 million net-of-tax) charge for the increase in FDIC special assessment. 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 $575 million ($432 million net-of-tax) for the three months ended June 30, 2023 included $(22) million of noninterest income related to balance sheet repositioning and capital management actions, $310 million of merger and integration-related charges and $243 million of provision for credit losses related to balance sheet repositioning and capital management actions.

(2)Notable items of $291 million ($218 million net-of-tax) for the six months ended June 30, 2024 included $155 million of merger and integration-related charges and a $136 million charge for the increase in FDIC special assessment. Notable items of $819 million ($615 million net-of-tax) for the six months ended June 30, 2023 included $(22) million of noninterest income related to balance sheet repositioning and capital management actions, $554 million of merger and integration-related charges and $243 million of provision for credit losses related to balance sheet repositioning and capital management actions.

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

(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.

(5)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.

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 revising the Company's line of business funds transfer-pricing methodology related to deposits and loans during the second quarter of 2024 and 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.