Terms

Series

Series M Non-Cumulative Perpetual Preferred Stock

Liquidation Preference

$25.00

Coupon Rate

4%

Rate Type

Fixed

Annual Dividend

$1.00

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

April 15, 2026

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Indebtedness And Non-Equity Claims, Future Senior Preferred Stock (If Issued With Requisite Consent), Subsidiary Creditors (Structurally); Pari Passu With: Series A Non-Cumulative Perpetual Preferred Stock, Series B Non-Cumulative Perpetual Preferred Stock, Series C Non-Cumulative Perpetual Preferred Stock, Series F Non-Cumulative Perpetual Preferred Stock, Series I Non-Cumulative Perpetual Preferred Stock, Series J Non-Cumulative Perpetual Preferred Stock, Series K Non-Cumulative Perpetual Preferred Stock, Series L Non-Cumulative Perpetual 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

30,000,000

Prospectus Summary

U.S. Bancorp is offering 30,000,000 depositary shares (NYSE: USB PrR), each representing a 1/1,000th interest in a share of its Series M Non-Cumulative Perpetual Preferred Stock, with a liquidation preference of $25 per depositary share and a fixed annual dividend rate of 4.000% ($1.00/year or $0.25/quarter). The Series M Preferred Stock is non-cumulative, meaning that if the board of directors does not declare a dividend for any quarter, that dividend is permanently lost — it does not accrue or carry forward, and investors have no right to claim it in future periods. The stock is perpetual with no mandatory redemption date, callable at par on or after April 15, 2026. The Series M Preferred Stock ranks senior to U.S. Bancorp's common stock and pari passu with its existing Series A, B, C, F, I, J, K, and L preferred series. As a holding company instrument, it is structurally subordinated to all obligations of U.S. Bank National Association and other subsidiaries — approximately $465 billion in subsidiary deposit and borrowing liabilities effectively rank ahead of it. At the holding company level, it is junior to all of U.S. Bancorp's debt ($487 billion consolidated). A regulatory capital treatment event call allows full redemption prior to April 15, 2026 if a change in law causes the Series M to lose its additional Tier 1 capital qualification — a meaningful risk for long-term holders if the regulatory framework shifts. At the $25 offering price, the Series M Preferred Stock yields 4.00% annually, with quarterly payments on January 15, April 15, July 15, and October 15 (commencing April 15, 2021). Dividends are expected to qualify for the preferential 15%/20% qualified dividend income (QDI) rate for non-corporate U.S. holders and the dividends-received deduction (DRD) for corporate holders, provided U.S. Bancorp has sufficient current or accumulated earnings and profits. The dividend stopper prevents any dividends on common stock or junior securities if Series M dividends for the most recently completed period have not been paid in full; additionally, if U.S. Bancorp is in default or deferring payments on its junior subordinated debt securities, all Series M dividends and redemptions are blocked entirely.

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 M Preferred Stock for the most recently completed dividend period, it may not pay dividends on or repurchase common stock or other junior securities. Additionally, if U.S. Bancorp is deferring interest or in default on its junior subordinated debt, it is prohibited from paying dividends on or redeeming the Series M Preferred Stock.

Other Preferreds from U.S. Bancorp

Div Score Breakdown

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