U.S. Bancorp

Thank you, Julianne, and good morning, everyone. Today, I'm joined by our president and new chief executive officer, Gunjan Ketia, and senior executive vice president and CFO, John Stern. In a moment, Gunjan and John will be referencing a slide presentation together with their prepared remarks. A copy of the presentation, our press release, and all supplemental analyst schedules can be found on our website at ir.usbank.com. Please note that any forward-looking statements made during today's call are subject to risk and uncertainty. Factors that can materially change our current forward-looking assumptions are described on page two of today's earnings presentation, our press release, and reports on file with the SEC. Following Gunjan and John's prepared remarks, we will be happy to take any questions that you have. I will now turn the call over to Gunjan.

Thank you, George, and good morning, everyone. As we begin the call today, I want to first take a moment to acknowledge the loss of our friend and colleague, Terry Dolan, who most recently served as our Chief Administration Officer. We have truly appreciated the outpouring of support we have received from the investment community since his tragic passing last month, and our thoughts remain with his friends and family. If I could turn your attention to slide three, In the first quarter, we reported earnings per share of $1.03 and delivered a return on tangible common equity of 17.5%. We are pleased with the progress we have made on our strategic priorities and achieved year-over-year positive operating leverage of 270 basis points this quarter on an adjusted basis. Our continued discipline on expenses, good momentum across our fee businesses, and modest margin expansion all contributed to us achieving our third consecutive quarter of revenues outpacing expenses on an adjusted basis. Importantly, our credit quality and capital levels are strong. This quarter, our net charge-off ratio improved modestly and we continued to build capital. We are in an environment of intense market and economic volatility. However, our management team has successfully navigated through a wide range of conditions over the years, and we are prepared for a variety of possible scenarios. Our consistent and deep culture of risk management will continue to be a competitive advantage as we go forward. Slide four is a snapshot of U.S. Bancorp today. As the largest non-GSEP bank in the country, we operate at considerable scale in the markets we serve. Our franchise is quite unique. Fee income represents 41% of total net revenue and is driven by an extensive and diversified product set. Today, two-thirds of our businesses operate nationally. through an optimized digital and physical distribution model. Our client franchise of almost 15 million clients has strong loyalty and depth with us. These advantages are important to our unique and ongoing growth story. I'll turn you to slide five. As I step into my role as Chief Executive Officer of U.S. Bancorp, I want to reaffirm my commitment to our medium-term targets. The macroeconomic backdrop has shifted since our investor day in September, and I acknowledge that there is still considerable uncertainty to the outlook. However, a wide range of plausible forward-looking macroeconomic scenarios still support our targets. I have three immediate strategic priorities to achieve our goals. Tightly manage our expenses. drive organic growth across our business, and transform our payments business. It is important to emphasize that while we are focused on organic growth, we remain deeply committed to high returns and a disciplined risk management culture. Slide six gives you more color on our expense management program. We have been actively focused on reducing expenses since early 2024. Our investment spend has stabilized and is increasingly shifting to growth-oriented investments. In addition, we are structurally driving productivity through all our operations. As the chart on the left shows, we have now delivered six consecutive quarters of expense discipline on an adjusted basis. This has been an important funding mechanism for organic growth and a significant driver of the positive operating leverage we have delivered. On the right are our four expense programs. These are well underway. These initiatives are designed to improve sustainable productivity and balance that with high-quality client service and operating effectiveness. Notably, we have additional levers we can pull and are watching the revenue environment closely to appropriately balance and flex our expense programs. On slide seven, a diversified mix of fee-generating businesses is truly a competitive advantage for us. On the left, we are disaggregating the dynamics of our fee growth last year. Confidence in our medium-term fee growth targets is supported by the strength we have in our core businesses like Trust and Investment Management and capital markets fee businesses, as well as the execution momentum we have across our other organic growth initiatives. Headwinds around consumer fees and the sale of our ATM cash provisioning business are also dissipating and support stronger fee growth going forward. We are focused on leveraging a broad range of products and digital capabilities to deepen relationships with our clients and expand our reach through partnerships. I'll move to slide eight. We have an opportunity to do better with our payments businesses. Money movement capabilities are critical to anchoring client relationships, and we are committed to building a vibrant payments franchise. Our payments business drives both fee income as well as net interest income with $42 billion in attractive average loan balances. Net interest income is an important part of our payment story. And as you can see on the left, we have grown our average loan balances in line with or better than the industry. Our loan growth has benefited from a range of competitive products that offer quite attractive value proposition, especially to borrowers. Total purchase volumes across all of our payments businesses were at $925 billion this quarter for the trailing 12-month period. The growth here could be stronger, and our target is to be more in line with the market. We have a greater focus on the affluent customer, and products like BankSmartly were designed specifically to target this segment. As I look ahead, With two new leaders in place since the start of the new year, we are actively redeploying expense saves to scale up our execution, our sales and marketing efforts and payments. Some areas of focus are California, where our acquisition of Union Bank has given us access to a large and affluent consumer and small business base, and the expansion of our Elan franchise, which currently serves over 1,200 financial institutions across the US. Finally, while our merchant acquiring business contributes just over 5% of total US bank revenue, it is a unique part of our portfolio, and I know one that garners a lot of attention from the investment community, as it is a key differentiator for the company. We are in the middle of a multi-year transformation here to reposition this business in three ways. The first is greater interconnectivity across the bank. The second is a sharper focus on five industry verticals. And the third is a strategic shift to a tech-led operating model that is more consistent with the buying behavior of consumers today. Tech-led represents over one-third of total merchant processing revenue, and most of our revenue generation is now concentrated in our five targeted verticals. We have most recently moved up to number five in Nielsen's 2025 report ranking for processing volume, and we do have more room to grow here. Our medium term fee growth targets for the overall bank expect a mid single digit growth rates for payments with more upside beyond that timeframe. Finally, before I hand it over to John, I want to highlight a simpler management structure on slide nine. We are very fortunate to have a deep management bench, and I am confident we will execute with urgency on our priorities. Now, let me turn the call over to John, who will provide more detail on the quota as well as forward-looking guidance.

Thanks, Gunjan. If you turn to slide 10, I'll start with some highlights for the quarter followed by a discussion of first quarter earning trends. In the first quarter, we reported earnings per share of $1.03 with year-over-year top-line revenue growth and disciplined expense management. On the right-hand side of this slide, you can see that most credit quality metrics and capital levels improved both sequentially and year-over-year. This quarter, a more favorable portfolio mix and improved asset quality resulted in a small reserve release of $10 million. The allowance this quarter also included some incremental qualitative reserves to reflect increased tariff-induced macroeconomic uncertainty. Our loan portfolio is well diversified, and we are appropriately reserved and prepared for a wide range of potentially adverse macroeconomic conditions. Our CET1 capital ratio increased 20 basis points to 10.8% this quarter, as we continue to balance ongoing capital accretion with modest share repurchases. Our tangible book value per share was $25.64 at March 31st, up 13.8% year over year. Slide 11 provides key performance metrics. Our return on average assets and net interest margin improved link quarter from solid financial performance, continued expense discipline, and efficient balance sheet management. Slide 12 provides a balance sheet summary. Total average deposits decreased 1.1% on a linked quarter basis to $507 billion in line with seasonal patterns and continued prioritization of relationship-based deposits in pricing discipline. Both our mid-40s cumulative deposit beta and percentage of non-interest bearing to total deposits of approximately 16% remain in line with expectations. Average loans totaled $379 billion, a modest increase of 0.9% on a linked quarter basis, driven by commercial lending initiatives that were partially offset by higher paydowns within our commercial real estate portfolio and continued runoff of auto loans. At March 31st, the ending balance on our investment portfolio was flat at $171 billion. This quarter... The average yield across both our investment portfolio and loan book were impacted by lower short-end rates, which more than offset the benefits of fixed asset repricing and improved asset mix. Turning to slide 13. Net interest income on a fully taxable equivalent basis totaled $4.12 billion, relatively stable to the fourth quarter after adjusting for two fewer days as expected. Slide 14 highlights trends in non-interest income. Non-interest income totaled $2.8 billion, an increase of 5.0% on a year-over-year basis, driven by payments and trust and investment management fees. Link quarter revenue was impacted by seasonal declines in both payment services and other revenue, while our decline in trust and investment management fees resulted from less favorable market conditions. Turning to slide 15, non-interest expense for the quarter totaled $4.2 billion. stable with adjusted non-interest expense in the fourth quarter and consistent with our previous guidance. Continued expense discipline and operational efficiencies partially offset seasonal increases in performance-based incentives and merit, as well as a higher charitable foundation contribution. Slide 16 highlights our credit quality performance on a linked quarter and year-over-year basis. Our ratio of non-performing assets to loans and other real estate was 0.45% at March 31st, an improvement from the previous quarter and a year ago. The first quarter net charge-off ratio of 0.59% improved one basis point link quarter, and our allowance for credit losses totaled $7.9 billion, or 2.07% of period end loans at March 31st. On slide 17, our common equity Tier 1 capital ratio increased 20 basis points to 10.8% as of March 31st net of distributions. Our CET1 ratio, including AOCI, was 8.8%. During the quarter, we completed $100 million of share repurchases, and moving forward, we expect the level and pace of buybacks to remain modest as we balance continued capital accretion with distributions and further evaluate broader macroeconomic conditions. Turning to slide 18, we wanted to provide some additional clarity on our projected balance sheet trajectory and the drivers of net interest margin expansion. These drivers are supportive of our medium-term target. As the slide shows, we do not expect to become a Category 2 bank before 2027. Further, we expect that our trajectory will benefit from an improved asset mix, fixed asset repricing, and continued optimization of our funding mix. The timing and ultimately where we land within the range provided will depend on several factors, including the path of interest rates and loan growth. Moving to slide 19, our first quarter results met the guidance we provided in mid-January. We are monitoring the ongoing discussions around tariffs and recognize that uncertainties remain. I'll now provide second quarter and full year 2025 forward-looking guidance based on our current expectations. starting with the second quarter 2025 guidance. We expect net interest income for the second quarter on a fully taxable equivalent basis to be in the range of 4.1 to $4.2 billion. Total non-interest income is expected to be approximately $2.9 billion. We expect total non-interest expense to be $4.2 billion or lower in the second quarter. And we expect to deliver positive operating leverage in the second quarter of 200 basis points or more on a year-over-year adjusted basis. I'll now provide full-year 2025 guidance, which is consistent with our previous guidance. Total net revenue growth on an adjusted basis is estimated to be in the range of 3% to 5% compared to the full year 2024. We expect to achieve positive operating leverage of greater than 200 basis points for the full year. Slide 20 shows that we have made measurable progress toward achieving our medium-term targets. Compared to the first quarter of 2024, we have improved both our profitability and efficiency ratios and have continued to enhance our capital positioning and operating leverage trajectory. We have more work to do, but we are pleased with our progress to date. I'll now hand it back over to Gunjan for closing remarks.