Update: U.S. Bancorp

As of third-quarter 2023, USB's common equity Tier 1 (CET1) ratio was 9.7%, up 60 basis points (bps) from the previous quarter and 270 bps above its regulatory minimum. As of Sept. 30, 2023, USB's net unrealized losses on available-for-sale investment securities (fair value of $67.2 billion) were $9.6 billion, compared with $722 million of net unrealized gains on Dec. 31, 2021. If AOCI had been included in the CET1 ratio, it would have been lower by 270 bps. The effective duration of USB's available-for-sale portfolio as of the third quarter was 3.5 years, down from 3.8 years in the first quarter. USB's funding and liquidity have also remained solid throughout 2023. Specifically, its available liquidity totaled $319 billion as

...U.S. Bancorp should continue to perform well into 2024, notwithstanding the Federal Reserve's tight monetary policy and difficult market conditions. U.S. Bancorp (USB) remains among the highest-rated regional banks with its outperformance of bank industry averages and its top-tier return and efficiency metrics over an extended period of time. Still, in May 2023, we lowered our rating on USB by one notch to indicate that its performance advantage over large regional peers isn't as wide as it used to be. USB will ultimately need to meet stricter regulatory capital requirements, but its timeline to do so has been extended. USB is a category III firm under the tailoring rules governing regulatory standards for large banks. Because of that, USB currently doesn't include accumulated other comprehensive income (AOCI)--inclusive of unrealized losses in its available-for-sale securities portfolio--in its capital ratios. It had previously faced the possibility of including such losses by December...

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