Terms

Series

Series L Non-Cumulative Perpetual Preferred Stock

Liquidation Preference

$25.00

Coupon Rate

3.75%

Rate Type

Fixed

Annual Dividend

$0.9375

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

January 15, 2026

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Indebtedness And Non-Equity Claims Of U.S. Bancorp, All Liabilities Of U.S. Bank National Association And Other Subsidiaries, Any Future Senior Preferred Stock (With Requisite Holder Consent); Pari Passu With: Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock (If Issued), Series F Preferred Stock, Series H Preferred Stock, Series I Preferred Stock, Series J Preferred Stock, Series K Preferred Stock; Senior To: Common Stock, All Junior Stock

Regulatory (Basel III) Call

Yes

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.001

Shares Offered

20,000,000

Prospectus Summary

U.S. Bancorp (NYSE: USB) is offering 20,000,000 depositary shares, each representing a 1/1,000th interest in a share of its Series L Non-Cumulative Perpetual Preferred Stock, priced at $25.00 per depositary share with a liquidation preference of $25.00 per depositary share. The fixed dividend rate is 3.750% per annum (approximately $0.234375 per depositary share per quarter, or $0.9375 annually), payable quarterly on January 15, April 15, July 15, and October 15, commencing January 15, 2021. Critically, this is non-cumulative preferred stock: if the board does not declare a dividend for any quarter, that dividend is permanently lost — it does not accrue or carry forward, and holders have no claim to it in future periods. The Series L Preferred Stock sits above common stock but below all of U.S. Bancorp's debt and non-equity obligations in the capital stack; as a holding company issue, it is also structurally subordinated to approximately $473 billion in liabilities at the subsidiary (U.S. Bank National Association) level. It ranks pari passu with Series A, B, C (if issued), F, H, I, J, and K Preferred Stock. The stock carries a regulatory capital call: prior to January 15, 2026, USB may redeem the entire issue (not in part) if a 'regulatory capital treatment event' occurs — i.e., a change in law or regulation causes or is likely to cause the Series L Preferred Stock to cease qualifying as additional Tier 1 capital under Federal Reserve rules. This matters because investors would be called out at par ($25) potentially in a declining-rate environment if regulators reclassify the instrument. At the $25.00 offering price, the Series L Preferred Stock yields exactly 3.750% annually. Dividends are expected to qualify for the preferential 15%/20% qualified dividend income (QDI) tax rate for non-corporate U.S. holders and for the dividends-received deduction (DRD) for corporate holders, provided USB has sufficient current or accumulated earnings and profits — which it currently does, though this is not guaranteed in future years. Dividend payments can be interrupted if USB fails to declare them (non-cumulative, so no catch-up), if full dividends on all parity preferred are not paid (proportional reduction applies), or if USB is deferring or in default on its junior subordinated debt securities (which contractually prohibits any preferred dividend payments or redemptions).

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If U.S. Bancorp has not paid full dividends on the Series L Preferred Stock for the current period, it cannot pay dividends on or repurchase common stock or other junior securities; additionally, if USB is deferring or in default on its junior subordinated debt, it is prohibited from paying any dividends on or redeeming the Series L Preferred Stock.

Other Preferreds from U.S. Bancorp

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 69 (Strong)