8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 16, 2014

U.S. BANCORP

(Exact name of registrant as specified in its charter)

1-6880

(Commission File Number)

DELAWARE	41-0255900
(State or other jurisdiction	(I.R.S. Employer Identification
of incorporation)	Number)

800 Nicollet Mall

Minneapolis, Minnesota 55402

(Address of principal executive offices and zip code)

(651) 466-3000

(Registrant’s telephone number, including area code)

(not applicable)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 Under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On July 16, 2014 , U.S. Bancorp (the “Company”) issued a press release reporting quarter ended June 30, 2014 results, and posted on its website its 2Q14 Earnings Conference Call Presentation, which contains certain additional historical and forward-looking information relating to the Company. The press release is included as Exhibit 99.1 hereto and is incorporated herein by reference. The information included in the press release is considered to be “filed” under the Securities Exchange Act of 1934. The 2Q14 Earnings Conference Call Presentation is included as Exhibit 99.2 hereto and is incorporated herein by reference. The information included in the 2Q14 Earnings Conference Call Presentation is considered to be “furnished” under the Securities Exchange Act of 1934. The press release and 2Q14 Earnings Conference Call Presentation contain forward-looking statements regarding the Company and each includes a cautionary statement identifying important factors that could cause actual results to differ materially from those anticipated.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(c) Exhibits.

99.1 Press Release issued by U.S. Bancorp on July 16, 2014 , deemed “filed” under the Securities Exchange Act of 1934.

99.2 2Q14 Earnings Conference Call Presentation, deemed “furnished” under the Securities Exchange Act of 1934.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

U.S. BANCORP

By /s/    Craig E. Gifford      

Craig E. Gifford

Executive Vice President and
Controller

DATE: July 16, 2014

EX-99.1

Exhibit 99.1

	News Release
	Contacts:
	Teri Charest	Sean O’Connor
	Media	Investors/Analysts
	(612) 303-0732	(612) 303-0778

U.S. BANCORP REPORTS RECORD EARNINGS FOR THE SECOND QUARTER OF 2014

MINNEAPOLIS, July 16, 2014 — U.S. Bancorp (NYSE: USB) today reported record net income of $1,495 million for the second quarter of 2014, or $.78 per diluted common share, compared with $1,484 million, or $.76 per diluted common share, in the second quarter of 2013. The second quarter of 2014 included two previously disclosed notable items. The Company reached a settlement with the U.S. Department of Justice to resolve an investigation relating to the endorsement of mortgage loans under the Federal Housing Administration’s insurance program (“FHA DOJ settlement”) for $200 million. In addition, prior to the FHA DOJ settlement, the Company sold 3.0 million shares of the Class B common stock of Visa Inc. resulting in a net pretax gain of $214 million (“Visa sale”). Combined, these notable items had no impact to diluted earnings per common share for the current quarter.

Highlights for the second quarter of 2014 included:

• Acquisition of Chicago-area Charter One Bank franchise in late June 2014, including $4.8 billion of deposits and $ .9 billion of loans, nearly doubles deposit market share in the Chicago area

• Growth in average total loans of 6.8 percent over the second quarter of 2013 (6.7 percent excluding the Charter One acquisition and 8.3 percent excluding covered loans) and 2.0 percent on a linked quarter basis (1.9 percent excluding the Charter One acquisition and 2.2 percent excluding covered loans)

• Growth in average total commercial loans of 12.4 percent over the second quarter of 2013 and 5.9 percent over the first quarter of 2014

• Growth in average total commercial real estate loans of 6.9 percent over the second quarter of 2013 and 1.1 percent over the first quarter of 2014

• Growth in average commercial and commercial real estate commitments of 12.7 percent year-over-year and 3.1 percent over the prior quarter

• Strong new lending activity of $55.5 billion during the second quarter, including:

• $38.4 billion of new and renewed commercial and commercial real estate commitments

• $2.8 billion of lines related to new credit card accounts

• $14.3 billion of mortgage and other retail loan originations

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• Strong growth in average total deposits of 6.0 percent over the second quarter of 2013 (5.8 percent excluding the Charter One acquisition) and 1.9 percent on a linked quarter basis (1.7 percent excluding the Charter One acquisition)

• Average low cost deposits, including noninterest-bearing and total savings deposits, grew by 8.7 percent year-over-year and 2.6 percent on a linked quarter basis

• Industry-leading performance ratios, including:

• Return on average assets of 1.60 percent

• Return on average common equity of 15.1 percent

• Efficiency ratio of 53.1 percent (51.3 percent excluding notable items)

• Net charge-offs declined 11.0 percent on a year-over-year basis. Provision for credit losses was $25 million less than net charge-offs

• Allowance to period-end loans was 1.82 percent at June 30, 2014

• Annualized net charge-offs to average total loans ratio was .58 percent

• Nonperforming assets decreased on both a linked quarter and year-over-year basis

• Nonperforming assets (excluding covered assets) decreased 1.6 percent on a linked quarter basis and 8.1 percent from the second quarter of 2013

• Allowance to nonperforming assets (excluding covered assets) was 246 percent at June 30, 2014, compared with 243 percent at March 31, 2014, and 231 percent at June 30, 2013

• Capital generation continued to reinforce capital position and returns. Ratios at June 30, 2014, were:

• Basel III transitional standardized approach:

• Common equity tier 1 capital ratio of 9.6 percent

• Tier 1 capital ratio of 11.3 percent

• Total risk-based capital ratio of 13.2 percent

• Common equity tier 1 capital to risk-weighted assets estimated for the Basel III fully implemented standardized approach of 8.9 percent and for the Basel III fully implemented advanced approaches of 11.7 percent

• Returned 75 percent of second quarter earnings to shareholders through dividends and the buyback of 15 million common shares

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U.S. Bancorp Reports Second Quarter 2014 Results

July 16, 2014

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EARNINGS SUMMARY	Table 1
($ in millions, except per-share data)

	2Q 2014		1Q 2014		2Q 2013		Percent Change 2Q14 vs 1Q14		Percent Change 2Q14 vs 2Q13		YTD 2014		YTD 2013		Percent Change
Net income attributable to U.S. Bancorp	$	1,495	$	1,397	$	1,484		7.0		.7	$	2,892	$	2,912		(.7	)
Diluted earnings per common share	$	.78	$	.73	$	.76		6.8		2.6	$	1.51	$	1.49		1.3
Return on average assets (%)		1.60		1.56		1.70						1.58		1.68
Return on average common equity (%)		15.1		14.6		16.1						14.9		16.1
Net interest margin (%)		3.27		3.35		3.43						3.31		3.46
Efficiency ratio (%) (a)		53.1		52.9		51.7						53.0		51.2
Tangible efficiency ratio (%) (b)		52.1		51.9		50.6						52.0		50.1
Dividends declared per common share	$	.245	$	.230	$	.230		6.5		6.5	$	.475	$	.425		11.8
Book value per common share (period-end)	$	20.98	$	20.48	$	18.94		2.4		10.8

(a) Efficiency ratio excluding notable items of 51.3% for 2Q 2014 is computed as noninterest expense of $2,753 million less FHA DOJ settlement of $200 million divided by total net revenue of $5,188 million less Visa sale of $214 million.

(b) Computed as noninterest expense divided by the sum of net interest income on a taxable-equivalent basis and noninterest income excluding net securities gains (losses) and intangible amortization.

Net income attributable to U.S. Bancorp was $1,495 million for the second quarter of 2014, .7 percent higher than the $1,484 million for the second quarter of 2013, and 7.0 percent higher than the $1,397 million for the first quarter of 2014. Diluted earnings per common share of $.78 in the second quarter of 2014 were $.02 higher than the second quarter of 2013 and $.05 higher than the previous quarter. Return on average assets and return on average common equity were 1.60 percent and 15.1 percent, respectively, for the second quarter of 2014, compared with 1.70 percent and 16.1 percent, respectively, for the second quarter of 2013. The provision for credit losses was lower than net charge-offs by $25 million in the second quarter of 2014, $35 million lower than net charge-offs in the first quarter of 2014, and $30 million lower than net charge-offs in the second quarter of 2013.

U.S. Bancorp Chairman, President and Chief Executive Officer Richard K. Davis said, “Today, U.S Bancorp reported record second quarter earnings of $1.5 billion, or $.78 per diluted share, which reflects the overall strength and diversity of our business. Once again, we delivered strong performance across key metrics with returns on average assets and average common equity of 1.60 percent and 15.1 percent, respectively, and industry-leading efficiency. These results highlight the benefits of our diversified business strategy and prudent expense management philosophy as we continue to produce strong returns for our shareholders.

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U.S. Bancorp Reports Second Quarter 2014 Results

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“Average loan growth continued to be strong at 6.8 percent year-over-year and 2.0 percent on a linked quarter basis. Total commercial loans and commercial real estate loans were both strong, up 12.4 percent and 6.9 percent, respectively, compared with the prior year quarter. Growth in both of these categories highlights our Company’s ability to deepen and grow customer relationships, as well as gain new customers and market share. Line utilization turned slightly positive after an extended period of decline, a potentially encouraging sign for loan growth going forward.

“The second quarter of each year is typically one of our strongest for fee revenue growth and this year was no exception, as all of our fee-based businesses showed growth compared with the first quarter of 2014. Expenses remained well controlled. Credit quality continued to be strong, as the ratio of net charge-offs to average loans declined to .58 percent compared with .70 percent and .59 percent in the prior year quarter and linked quarter, respectively. In addition, nonperforming assets decreased compared to both the prior year quarter and on a linked quarter basis. We expect overall credit quality to remain relatively stable over the next few quarters.

“Last month, our board of directors approved a 6.5 percent increase in the dividend rate on our common stock to $.98 per share on an annualized basis. The higher dividend, combined with the repurchase of 15 million shares during the quarter resulted in a 75 percent return of earnings to shareholders, in line with our stated 60-80 percent objective. Once again, we met this objective while maintaining strong capital ratios, with a common equity tier 1 capital ratio of 8.9 percent estimated under the Basel III standardized approach as if fully implemented and 9.6 percent under the transition rules.

“We have frequently noted our company-wide focus on extending our advantage in every part of the business, across all geographies in which we operate. In line with that focus, we completed the acquisition of the Chicago-area Charter One Bank franchise in late June, which significantly expands our presence in that market and we welcome our new customers to U.S. Bank. I am excited to have new members of the U.S Bank team in Chicago join the over 67,000 people who have made U.S. Bank the great company it is today. With industry-leading financial strength and stability, widely recognized innovative products and services, and a talented and motivated team of exceptional people, we are well positioned to remain industry leaders.”

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U.S. Bancorp Reports Second Quarter 2014 Results

July 16, 2014

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INCOME STATEMENT HIGHLIGHTS	Table 2
(Taxable-equivalent basis, $ in millions, except per-share data)

	2Q 2014			1Q 2014			2Q 2013		Percent Change 2Q14 vs 1Q14			Percent Change 2Q14 vs 2Q13			YTD 2014			YTD 2013		Percent Change
Net interest income	$	2,744		$	2,706		$	2,672		1.4			2.7		$	5,450		$	5,381		1.3
Noninterest income		2,444			2,108			2,276		15.9			7.4			4,552			4,441		2.5
Total net revenue		5,188			4,814			4,948		7.8			4.9			10,002			9,822		1.8
Noninterest expense		2,753			2,544			2,557		8.2			7.7			5,297			5,027		5.4
Income before provision and taxes		2,435			2,270			2,391		7.3			1.8			4,705			4,795		(1.9	)
Provision for credit losses		324			306			362		5.9			(10.5	)		630			765		(17.6	)
Income before taxes		2,111			1,964			2,029		7.5			4.0			4,075			4,030		1.1
Taxable-equivalent adjustment		55			56			56		(1.8	)		(1.8	)		111			112		(.9	)
Applicable income taxes		547			496			529		10.3			3.4			1,043			1,087		(4.0	)
Net income		1,509			1,412			1,444		6.9			4.5			2,921			2,831		3.2
Net (income) loss attributable to noncontrolling interests		(14	)		(15	)		40		6.7			nm			(29	)		81		nm
Net income attributable to U.S. Bancorp	$	1,495		$	1,397		$	1,484		7.0			.7		$	2,892		$	2,912		(.7	)
Net income applicable to U.S. Bancorp common shareholders	$	1,427		$	1,331		$	1,405		7.2			1.6		$	2,758		$	2,763		(.2	)
Diluted earnings per common share	$	.78		$	.73		$	.76		6.8			2.6		$	1.51		$	1.49		1.3

Net income attributable to U.S. Bancorp for the second quarter of 2014 was $11 million (.7 percent) higher than the second quarter of 2013, and $98 million (7.0 percent) higher than the first quarter of 2014. The increase in net income year-over-year was principally due to an increase in total net revenue and a lower provision for credit losses. The increase in net income on a linked quarter basis was principally due to an increase in total net revenue.

Total net revenue on a taxable-equivalent basis for the second quarter of 2014 was $5,188 million; $240 million (4.9 percent) higher than the second quarter of 2013, reflecting a 2.7 percent increase in net interest income and a 7.4 percent increase in noninterest income. The increase in net interest income year-over-year was the result of an increase in average earning assets and continued growth in lower cost core deposit funding. Noninterest income increased year-over-year, primarily due to higher revenue in most fee businesses, and the Visa sale, partially offset by lower mortgage banking revenue. Total net revenue on a taxable-equivalent basis increased on a linked quarter basis, reflecting a 1.4 percent increase in net interest income, combined with a 15.9 percent increase in noninterest income, mainly due to seasonally higher fee revenue and the Visa sale.

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U.S. Bancorp Reports Second Quarter 2014 Results

July 16, 2014

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Total noninterest expense in the second quarter of 2014 was $2,753 million; $196 million (7.7 percent) higher than the second quarter of 2013 and $209 million (8.2 percent) higher than the first quarter of 2014. The increase in total noninterest expense year-over-year and on a linked quarter basis was due to the FHA DOJ settlement. Excluding this expense, noninterest expense was essentially flat year-over-year and on a linked quarter basis.

The Company’s provision for credit losses for the second quarter of 2014 was $324 million, $18 million (5.9 percent) higher than the prior quarter and $38 million (10.5 percent) lower than the second quarter of 2013. The provision for credit losses was lower than net charge-offs by $25 million in the second quarter of 2014, $35 million lower than net charge-offs in the first quarter of 2014, and $30 million lower than net charge-offs in the second quarter of 2013. Net charge-offs in the second quarter of 2014 were $349 million, compared with $341 million in the first quarter of 2014, and $392 million in the second quarter of 2013. Given current economic conditions, the Company expects the level of net charge-offs to remain relatively stable in the third quarter of 2014.

Nonperforming assets include assets originated or acquired by the Company, as well as loans and other real estate acquired under FDIC loss sharing agreements that substantially reduce the risk of credit losses to the Company (“covered assets”). Excluding covered assets, nonperforming assets were $1,766 million at June 30, 2014, compared with $1,794 million at March 31, 2014, and $1,921 million at June 30, 2013. The decrease in nonperforming assets, excluding covered assets, compared with a year ago was driven primarily by reductions in the commercial mortgage portfolio, as well as by improvement in construction and development and credit card loans. Covered nonperforming assets were $177 million at June 30, 2014, compared with $205 million at March 31, 2014, and $355 million at June 30, 2013. The ratio of the allowance for credit losses to period-end loans was 1.82 percent at June 30, 2014, compared with 1.89 percent at March 31, 2014, and 2.02 percent at June 30, 2013. The Company expects total nonperforming assets to remain relatively stable in the third quarter of 2014.

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U.S. Bancorp Reports Second Quarter 2014 Results

July 16, 2014

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NET INTEREST INCOME	Table 3
(Taxable-equivalent basis; $ in millions)

	2Q 2014			1Q 2014			2Q 2013			Change 2Q14 vs 1Q14			Change 2Q14 vs 2Q13			YTD 2014			YTD 2013			Change
Components of net interest income
Income on earning assets	$	3,104		$	3,078		$	3,095		$	26		$	9		$	6,182		$	6,263		$	(81	)
Expense on interest-bearing liabilities		360			372			423			(12	)		(63	)		732			882			(150	)
Net interest income	$	2,744		$	2,706		$	2,672		$	38		$	72		$	5,450		$	5,381		$	69
Average yields and rates paid
Earning assets yield		3.70	%		3.81	%		3.98	%		(.11	)%		(.28	)%		3.75	%		4.02	%		(.27	)%
Rate paid on interest-bearing liabilities		.58			.63			.74			(.05	)		(.16	)		.61			.77			(.16	)
Gross interest margin		3.12	%		3.18	%		3.24	%		(.06	)%		(.12	)%		3.14	%		3.25	%		(.11	)%
Net interest margin		3.27	%		3.35	%		3.43	%		(.08	)%		(.16	)%		3.31	%		3.46	%		(.15	)%
Average balances
Investment securities (a)	$	87,583		$	82,216		$	74,438		$	5,367		$	13,145		$	84,915		$	73,955		$	10,960
Loans		240,480			235,859			225,186			4,621			15,294			238,182			223,811			14,371
Earning assets		335,992			326,226			311,927			9,766			24,065			331,136			312,954			18,182
Interest-bearing liabilities		246,886			238,276			229,419			8,610			17,467			242,605			230,795			11,810

(a) Excludes unrealized gain (loss)

Net Interest Income

Net interest income on a taxable-equivalent basis in the second quarter of 2014 was $2,744 million, an increase of $72 million (2.7 percent) from the second quarter of 2013. The increase was the result of growth in average earning assets and growth in lower cost core deposit funding, partially offset by lower loan fees and lower rates on new loans and securities. Average earning assets were $24.1 billion (7.7 percent) higher than the second quarter of 2013, driven by increases of $15.3 billion (6.8 percent) in average total loans and $13.1 billion (17.7 percent) in average investment securities, partially offset by a decrease of $4.0 billion (64.3 percent) in average loans held for sale. Net interest income increased $38 million (1.4 percent) on a linked quarter basis, due to higher average earning assets and an additional day in the current quarter relative to the first quarter of 2014, partially offset by lower loan rates. The net interest margin in the second quarter of 2014 was 3.27 percent, compared with 3.43 percent in the second quarter of 2013, and 3.35 percent in the first quarter of 2014. The decline in the net interest margin on a year-over-year basis primarily reflected lower reinvestment rates on investment securities, as well as growth in the investment portfolio at lower average rates, and lower rates on new loans, partially offset by lower rates on deposits and short-term

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U.S. Bancorp Reports Second Quarter 2014 Results

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borrowings and a reduction in higher cost long-term debt. On a linked quarter basis, the reduction in net interest margin was principally due to growth in lower rate investment securities and lower rates on new loans, principally due to higher growth in wholesale as compared to retail loans.

AVERAGE LOANS	Table 4
($ in millions)

	2Q 2014		1Q 2014		2Q 2013		Percent Change 2Q14 vs 1Q14			Percent Change 2Q14 vs 2Q13			YTD 2014		YTD 2013		Percent Change
Commercial	$	69,920	$	65,645	$	61,507		6.5			13.7		$	67,794	$	60,718		11.7
Lease financing		5,100		5,189		5,255		(1.7	)		(2.9	)		5,145		5,316		(3.2	)
Total commercial		75,020		70,834		66,762		5.9			12.4			72,939		66,034		10.5
Commercial mortgages		32,001		32,049		31,371		(.1	)		2.0			32,025		31,192		2.7
Construction and development		8,496		8,001		6,513		6.2			30.4			8,250		6,361		29.7
Total commercial real estate		40,497		40,050		37,884		1.1			6.9			40,275		37,553		7.2
Residential mortgages		51,815		51,584		46,873		.4			10.5			51,700		45,996		12.4
Credit card		17,384		17,407		16,416		(.1	)		5.9			17,395		16,472		5.6
Retail leasing		6,014		5,979		5,653		.6			6.4			5,997		5,551		8.0
Home equity and second mortgages		15,327		15,366		15,989		(.3	)		(4.1	)		15,346		16,210		(5.3	)
Other		26,587		26,312		25,224		1.0			5.4			26,450		25,294		4.6
Total other retail		47,928		47,657		46,866		.6			2.3			47,793		47,055		1.6
Total loans, excluding covered loans		232,644		227,532		214,801		2.2			8.3			230,102		213,110		8.0
Covered loans		7,836		8,327		10,385		(5.9	)		(24.5	)		8,080		10,701		(24.5	)
Total loans	$	240,480	$	235,859	$	225,186		2.0			6.8		$	238,182	$	223,811		6.4

Average total loans were $15.3 billion (6.8 percent) higher in the second quarter of 2014 than the second quarter of 2013, driven by growth in commercial loans (13.7 percent), residential mortgages (10.5 percent), total commercial real estate (6.9 percent), retail leasing (6.4 percent), credit card (5.9 percent) and other retail loans (5.4 percent). These increases were partially offset by declines in home equity and second mortgages (4.1 percent), lease financing (2.9 percent) and covered loans (24.5 percent). Average total loans, excluding covered loans, were higher by 8.3 percent year-over-year. Average total loans were $4.6 billion (2.0 percent) higher in the second quarter of 2014 than the first quarter of 2014, driven by increases in commercial loans (6.5 percent), total commercial real estate (1.1 percent), other retail loans (1.0 percent), retail leasing (.6 percent) and residential mortgages (.4 percent), partially offset by decreases in lease financing (1.7 percent),

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U.S. Bancorp Reports Second Quarter 2014 Results

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home equity and second mortgages (.3 percent), credit card (.1 percent), and covered loans (5.9 percent). Excluding covered loans, average total loans grew by 2.2 percent on a linked quarter basis.

Average investment securities in the second quarter of 2014 were $13.1 billion (17.7 percent) higher year-over-year and $5.4 billion (6.5 percent) higher than the prior quarter. The increases were primarily due to purchases of U.S. government agency-backed securities, net of prepayments and maturities, in anticipation of final liquidity coverage ratio regulatory requirements.

AVERAGE DEPOSITS	Table 5
($ in millions)

							Percent			Percent
							Change			Change
	2Q		1Q		2Q		2Q14 vs			2Q14 vs			YTD		YTD		Percent
	2014		2014		2013		1Q14			2Q13			2014		2013		Change
Noninterest-bearing deposits	$	71,837	$	70,824	$	66,866		1.4			7.4		$	71,333	$	66,634		7.1
Interest-bearing savings deposits
Interest checking		52,989		51,305		48,403		3.3			9.5			52,152		48,404		7.7
Money market savings		61,370		59,244		55,368		3.6			10.8			60,313		54,238		11.2
Savings accounts		33,991		33,200		31,929		2.4			6.5			33,597		31,670		6.1
Total of savings deposits		148,350		143,749		135,700		3.2			9.3			146,062		134,312		8.7
Time deposits less than $100,000		10,971		11,443		13,152		(4.1	)		(16.6	)		11,206		13,380		(16.2	)
Time deposits greater than $100,000		31,193		31,463		31,667		(.9	)		(1.5	)		31,327		31,882		(1.7	)
Total interest-bearing deposits		190,514		186,655		180,519		2.1			5.5			188,595		179,574		5.0
Total deposits	$	262,351	$	257,479	$	247,385		1.9			6.0		$	259,928	$	246,208		5.6

Average total deposits for the second quarter of 2014 were $15.0 billion (6.0 percent) higher than the second quarter of 2013. Average noninterest-bearing deposits increased $5.0 billion (7.4 percent) year-over-year, mainly in corporate trust, commercial banking, and Consumer and Small Business Banking balances. Average total savings deposits were $12.7 billion (9.3 percent) higher year-over-year, the result of growth in Consumer and Small Business Banking, and in government banking and broker-dealer related balances. Time deposits less than $100,000 were $2.2 billion (16.6 percent) lower due to maturities, while time deposits greater than $100,000 decreased $474 million (1.5 percent), primarily due to a decline in Consumer and Small Business Banking and corporate trust balances, partially offset by an increase in Wholesale Banking and Commercial Real Estate balances. Time deposits greater than $100,000 are managed as an alternative to other funding sources, such as wholesale borrowing, based largely on relative pricing.

Average total deposits increased $4.9 billion (1.9 percent) over the first quarter of 2014. Average noninterest-bearing deposits increased $1.0 billion (1.4 percent) on a linked quarter basis, due to higher balances in corporate trust and Consumer and Small Business Banking, partially offset by lower balances in

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U.S. Bancorp Reports Second Quarter 2014 Results

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Wholesale Banking and Commercial Real Estate. Average total savings deposits increased $4.6 billion (3.2 percent), including increases in Consumer and Small Business Banking, corporate trust, government banking and broker-dealer balances. Compared with the first quarter of 2014, average time deposits less than $100,000 declined $472 million (4.1 percent) due to maturities. Average time deposits greater than $100,000 decreased $270 million (.9 percent) on a linked quarter basis, principally due to declines in Consumer and Small Business Banking and Wholesale Banking and Commercial Real Estate balances.

NONINTEREST INCOME	Table 6
($ in millions)

							Percent		Percent
							Change		Change
	2Q		1Q		2Q		2Q14 vs		2Q14 vs			YTD		YTD		Percent
	2014		2014		2013		1Q14		2Q13			2014		2013		Change
Credit and debit card revenue	$	259	$	239	$	244		8.4		6.1		$	498	$	458		8.7
Corporate payment products revenue		182		173		176		5.2		3.4			355		348		2.0
Merchant processing services		384		356		373		7.9		2.9			740		720		2.8
ATM processing services		82		78		83		5.1		(1.2	)		160		165		(3.0	)
Trust and investment management fees		311		304		284		2.3		9.5			615		562		9.4
Deposit service charges		171		157		160		8.9		6.9			328		313		4.8
Treasury management fees		140		133		140		5.3		—			273		274		(.4	)
Commercial products revenue		221		205		209		7.8		5.7			426		409		4.2
Mortgage banking revenue		278		236		396		17.8		(29.8	)		514		797		(35.5	)
Investment products fees		47		46		46		2.2		2.2			93		87		6.9
Securities gains (losses), net		—		5		6		nm		nm			5		11		(54.5	)
Other		369		176		159		nm		nm			545		297		83.5
Total noninterest income	$	2,444	$	2,108	$	2,276		15.9		7.4		$	4,552	$	4,441		2.5

Noninterest Income

Second quarter noninterest income was $2,444 million; $168 million (7.4 percent) higher than the second quarter of 2013 and $336 million (15.9 percent) higher than the first quarter of 2014. The year-over-year increase in noninterest income was principally due to an increase in other income due to the Visa sale, as well as increases in a majority of fee revenue categories, partially offset by a $118 million (29.8 percent) reduction in mortgage banking revenue due to lower origination and sales revenue. Credit and debit card revenue increased $15 million (6.1 percent) and corporate payment products revenue increased $6 million (3.4 percent) over the second quarter of 2013 primarily due to higher transaction volumes. Merchant processing services revenue was $11 million (2.9 percent) higher as a result of an increase in product fees and higher volumes, partially offset by lower rates. Trust and investment management fees increased $27

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million (9.5 percent) year-over-year, reflecting account growth, improved market conditions and business expansion. Deposit services charges were $11 million (6.9 percent) higher than a year ago due to account growth and pricing changes. Commercial products revenue increased $12 million (5.7 percent) over the prior year, principally due to an increase in bond underwriting fees and to a higher volume of tax-advantaged project fees.

Noninterest income was $336 million (15.9 percent) higher in the second quarter of 2014 than the first quarter of 2014, primarily due to the Visa sale and seasonally higher fee revenue, as well as higher mortgage banking revenue. Credit and debit card revenue increased $20 million (8.4 percent), corporate payment products revenue increased $9 million (5.2 percent), and merchant processing revenue increased $28 million (7.9 percent) on a linked quarter basis, principally due to seasonally higher transaction volumes. Trust and investment management fees were $7 million (2.3 percent) higher than the prior quarter due to improved market conditions and account growth, including business expansion. Deposit service charges increased $14 million (8.9 percent) and treasury management fees increased $7 million (5.3 percent) over the prior quarter, mainly due to seasonally higher transaction volumes. Commercial products revenue increased $16 million (7.8 percent) due to higher wholesale transaction activity, including standby letters of credit, and loan and bond underwriting fees. Mortgage banking revenue increased $42 million (17.8 percent), principally due to a $35 million favorable change in the valuation of mortgage servicing rights (“MSRs”), net of hedging activities.

NONINTEREST EXPENSE	Table 7
($ in millions)

							Percent			Percent
							Change			Change
	2Q		1Q		2Q		2Q14 vs			2Q14 vs			YTD		YTD		Percent
	2014		2014		2013		1Q14			2Q13			2014		2013		Change
Compensation	$	1,125	$	1,115	$	1,098		.9			2.5		$	2,240	$	2,180		2.8
Employee benefits		257		289		277		(11.1	)		(7.2	)		546		587		(7.0	)
Net occupancy and equipment		241		249		234		(3.2	)		3.0			490		469		4.5
Professional services		97		83		91		16.9			6.6			180		169		6.5
Marketing and business development		96		79		96		21.5			—			175		169		3.6
Technology and communications		214		211		214		1.4			—			425		425		—
Postage, printing and supplies		80		81		78		(1.2	)		2.6			161		154		4.5
Other intangibles		48		49		55		(2.0	)		(12.7	)		97		112		(13.4	)
Other		595		388		414		53.4			43.7			983		762		29.0
Total noninterest expense	$	2,753	$	2,544	$	2,557		8.2			7.7		$	5,297	$	5,027		5.4

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Noninterest Expense

Noninterest expense in the second quarter of 2014 totaled $2,753 million, an increase of $196 million (7.7 percent) over the second quarter of 2013, and a $209 million (8.2 percent) increase over the first quarter of 2014. The increase in total noninterest expense year-over-year was the result of the FHA DOJ settlement in the current quarter and higher compensation expense, reflecting the impact of merit increases and higher staffing for risk and compliance activities. Net occupancy and equipment expense increased $7 million (3.0 percent) year-over-year due to business initiatives as well as higher rent expense and maintenance costs. Professional services expense increased $6 million (6.6 percent) due mainly to mortgage servicing-related project costs. The $181 million (43.7 percent) increase in other expense reflected the FHA DOJ settlement, partially offset by lower costs related to investments in tax-advantaged projects related to a change in first quarter 2014 in accounting for affordable housing investments. Offsetting these increases was a $20 million (7.2 percent) reduction in employee benefits expense driven by lower pension costs and a $7 million (12.7 percent) decrease in other intangibles expense from the reduction or completion of the amortization of certain intangibles.

Noninterest expense increased $209 million (8.2 percent) on a linked quarter basis, driven by the FHA DOJ settlement. Compensation expense increased $10 million (.9 percent) reflecting the impact of merit increases and seasonal contract labor. Professional services expense was $14 million (16.9 percent) higher compared with the first quarter of 2014, mainly due to higher mortgage servicing-related project costs. Marketing and business development expense increased $17 million (21.5 percent) due to a current quarter charitable foundation contribution and the timing of various marketing programs in Payments Services and Consumer and Small Business Banking. Partially offsetting these increases was a $32 million (11.1 percent) decrease in employee benefits expense primarily resulting from seasonally lower payroll tax expense and an $8 million (3.2 percent) decrease in net occupancy and equipment expense due to seasonally lower maintenance and utilities costs.

Provision for Income Taxes

The provision for income taxes for the second quarter of 2014 resulted in a tax rate on a taxable-equivalent basis of 28.5 percent (effective tax rate of 26.6 percent), compared with 28.8 percent (effective tax rate of 26.8 percent) in the second quarter of 2013, and 28.1 percent (effective tax rate of 26.0 percent) in the first quarter of 2014.

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ALLOWANCE FOR CREDIT LOSSES	Table 8
($ in millions)

	2Q 2014			% (b)			1Q 2014			% (b)			4Q 2013			% (b)			3Q 2013			% (b)			2Q 2013			% (b)
Balance, beginning of period	$	4,497					$	4,537					$	4,578					$	4,612					$	4,708
Net charge-offs
Commercial		52			.30			34			.21			33			.21			18			.11			34			.22
Lease financing		3			.24			2			.16			3			.23			(7	)		(.53	)		4			.31
Total commercial		55			.29			36			.21			36			.21			11			.06			38			.23
Commercial mortgages		(6	)		(.08	)		(1	)		(.01	)		1			.01			2			.03			8			.10
Construction and development		2			.09			(2	)		(.10	)		(30	)		(1.58	)		(8	)		(.46	)		(25	)		(1.54	)
Total commercial real estate		(4	)		(.04	)		(3	)		(.03	)		(29	)		(.29	)		(6	)		(.06	)		(17	)		(.18	)
Residential mortgages		57			.44			57			.45			49			.38			57			.46			74			.63
Credit card		170			3.92			170			3.96			163			3.72			160			3.75			173			4.23
Retail leasing		1			.07			—			—			—			—			1			.07			(1	)		(.07	)
Home equity and second mortgages		23			.60			31			.82			37			.95			43			1.09			58			1.45
Other		45			.68			45			.69			52			.79			54			.83			48			.76
Total other retail		69			.58			76			.65			89			.75			98			.83			105			.90
Total net charge-offs, excluding covered loans		347			.60			336			.60			308			.55			320			.58			373			.70
Covered loans		2			.10			5			.24			4			.18			8			.33			19			.73
Total net charge-offs		349			.58			341			.59			312			.53			328			.57			392			.70
Provision for credit losses		324						306						277						298						362
Other changes (a)		(23	)					(5	)					(6	)					(4	)					(66	)
Balance, end of period	$	4,449					$	4,497					$	4,537					$	4,578					$	4,612
Components
Allowance for loan losses	$	4,132					$	4,189					$	4,250					$	4,258					$	4,312
Liability for unfunded credit commitments		317						308						287						320						300
Total allowance for credit losses	$	4,449					$	4,497					$	4,537					$	4,578					$	4,612
Gross charge-offs	$	432					$	422					$	429					$	450					$	506
Gross recoveries	$	83					$	81					$	117					$	122					$	114
Allowance for credit losses as a percentage of
Period-end loans, excluding covered loans		1.83						1.90						1.94						1.99						2.03
Nonperforming loans, excluding covered loans		294						293						297						294						287
Nonperforming assets, excluding covered assets		246						243						242						235						231
Period-end loans		1.82						1.89						1.93						1.98						2.02
Nonperforming loans		279						278						283						276						269
Nonperforming assets		229						225						223						207						203

(a) Includes net changes in credit losses to be reimbursed by the FDIC and reductions in the allowance for covered loans where the reversal of a previously recorded allowance was offset by an associated decrease in the indemnification asset.

(b) Annualized and calculated on average loan balances

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Credit Quality

The allowance for credit losses was $4,449 million at June 30, 2014, compared with $4,497 million at March 31, 2014, and $4,612 million at June 30, 2013. Nonperforming assets declined on a linked quarter and year-over-year basis as economic conditions continued to slowly improve. Total net charge-offs in the second quarter of 2014 were $349 million, compared with $341 million in the first quarter of 2014, and $392 million in the second quarter of 2013. The $8 million (2.3 percent) increase in net charge-offs on a linked quarter basis was due to higher charge-offs in commercial loan portfolios, partially offset by improvements in the home equity and second mortgages portfolio, while the $43 million (11.0 percent) decrease in net charge-offs on a year-over-year basis reflected improvements in residential mortgages and home equity and second mortgages, partially offset by higher commercial loan charge-offs and lower recoveries in commercial real estate. The Company recorded $324 million of provision for credit losses in the current quarter, which was $25 million less than net charge-offs.

Commercial and commercial real estate loan net charge-offs were $51 million (.18 percent of average loans outstanding) in the second quarter of 2014, compared with $33 million (.12 percent of average loans outstanding) in the first quarter of 2014, and $21 million (.08 percent of average loans outstanding) in the second quarter of 2013.

Residential mortgage loan net charge-offs were $57 million (.44 percent of average loans outstanding) in the second quarter of 2014, compared with $57 million (.45 percent of average loans outstanding) in the first quarter of 2014, and $74 million (.63 percent of average loans outstanding) in the second quarter of 2013. Credit card loan net charge-offs were $170 million (3.92 percent of average loans outstanding) in the second quarter of 2014, compared with $170 million (3.96 percent of average loans outstanding) in the first quarter of 2014, and $173 million (4.23 percent of average loans outstanding) in the second quarter of 2013. Total other retail loan net charge-offs were $69 million (.58 percent of average loans outstanding) in the second quarter of 2014, compared with $76 million (.65 percent of average loans outstanding) in the first quarter of 2014, and $105 million (.90 percent of average loans outstanding) in the second quarter of 2013.

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The ratio of the allowance for credit losses to period-end loans was 1.82 percent (1.83 percent excluding covered loans) at June 30, 2014, compared with 1.89 percent (1.90 percent excluding covered loans) at March 31, 2014, and 2.02 percent (2.03 percent excluding covered loans) at June 30, 2013. The ratio of the allowance for credit losses to nonperforming loans was 279 percent (294 percent excluding covered loans) at June 30, 2014, compared with 278 percent (293 percent excluding covered loans) at March 31, 2014, and 269 percent (287 percent excluding covered loans) at June 30, 2013.

DELINQUENT LOAN RATIOS AS A PERCENT OF ENDING LOAN BALANCES	Table 9
(Percent)

	Jun 30		Mar 31		Dec 31		Sep 30		Jun 30
	2014		2014		2013		2013		2013
Delinquent loan ratios—90 days or more past due excluding nonperforming loans
Commercial		.06		.06		.08		.07		.09
Commercial real estate		.06		.06		.07		.02		.03
Residential mortgages		.49		.64		.65		.53		.53
Credit card		1.06		1.21		1.17		1.11		1.10
Other retail		.15		.18		.18		.16		.16
Total loans, excluding covered loans		.25		.30		.31		.27		.27
Covered loans		6.14		5.83		5.63		5.47		5.40
Total loans		.43		.49		.51		.48		.49
Delinquent loan ratios—90 days or more past due including nonperforming loans
Commercial		.30		.32		.27		.24		.24
Commercial real estate		.62		.73		.83		.94		1.13
Residential mortgages		2.06		2.14		2.16		1.99		1.96
Credit card		1.35		1.59		1.60		1.66		1.75
Other retail		.54		.58		.58		.60		.63
Total loans, excluding covered loans		.87		.95		.97		.94		.97
Covered loans		7.73		7.46		7.13		7.13		7.08
Total loans		1.08		1.17		1.19		1.20		1.24

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ASSET QUALITY	Table 10
($ in millions)

	Jun 30		Mar 31		Dec 31		Sep 30		Jun 30
	2014		2014		2013		2013		2013
Nonperforming loans
Commercial	$	174	$	174	$	122	$	104	$	91
Lease financing		16		14		12		12		14
Total commercial		190		188		134		116		105
Commercial mortgages		121		156		182		210		263
Construction and development		105		113		121		146		161
Total commercial real estate		226		269		303		356		424
Residential mortgages		818		777		770		732		685
Credit card		52		65		78		94		109
Other retail		191		188		191		206		222
Total nonperforming loans, excluding covered loans		1,477		1,487		1,476		1,504		1,545
Covered loans		119		132		127		156		168
Total nonperforming loans		1,596		1,619		1,603		1,660		1,713
Other real estate (a)		279		296		327		366		364
Covered other real estate (a)		58		73		97		176		187
Other nonperforming assets		10		11		10		10		12
Total nonperforming assets (b)	$	1,943	$	1,999	$	2,037	$	2,212	$	2,276
Total nonperforming assets, excluding covered assets	$	1,766	$	1,794	$	1,813	$	1,880	$	1,921
Accruing loans 90 days or more past due, excluding covered loans	$	581	$	695	$	713	$	591	$	580
Accruing loans 90 days or more past due	$	1,038	$	1,167	$	1,189	$	1,105	$	1,119
Performing restructured loans, excluding GNMA and covered loans	$	2,911	$	3,006	$	3,067	$	3,097	$	3,311
Performing restructured GNMA and covered loans	$	3,072	$	3,003	$	2,932	$	2,262	$	2,217
Nonperforming assets to loans plus ORE, excluding covered assets (%)		.75		.78		.80		.85		.88
Nonperforming assets to loans plus ORE (%)		.80		.84		.86		.95		1.00

(a) Includes equity investments in entities whose principal assets are other real estate owned.

(b) Does not include accruing loans 90 days or more past due.

Nonperforming assets at June 30, 2014, totaled $1,943 million, compared with $1,999 million at March 31, 2014, and $2,276 million at June 30, 2013. Total nonperforming assets at June 30, 2014, included $177 million of covered assets. The ratio of nonperforming assets to loans and other real estate was .80 percent (.75 percent excluding covered assets) at June 30, 2014, compared with .84 percent (.78 percent excluding covered assets) at March 31, 2014, and 1.00 percent (.88 percent excluding covered assets) at June 30, 2013. Total commercial nonperforming assets were $2 million (1.1 percent) higher on a linked quarter basis and

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$85 million (81.0 percent) higher year-over-year. Commercial real estate nonperforming assets declined by $43 million (16.0 percent) on a linked quarter basis and $198 million (46.7 percent) year-over-year. Residential mortgage nonperforming assets increased $41 million (5.3 percent) on a linked quarter basis and $133 million (19.4 percent) year-over-year. Credit card nonperforming assets were $13 million (20.0 percent) lower on a linked quarter basis and $57 million (52.3 percent) lower year-over-year. Other retail nonperforming assets increased $3 million (1.6 percent) on a linked quarter basis and decreased $31 million (14.0 percent) year-over-year.

Accruing loans 90 days or more past due were $1,038 million ($581 million excluding covered loans) at June 30, 2014, compared with $1,167 million ($695 million excluding covered loans) at March 31, 2014, and $1,119 million ($580 million excluding covered loans) at June 30, 2013.

COMMON SHARES	Table 11
(Millions)

	2Q 2014			1Q 2014			4Q 2013			3Q 2013			2Q 2013
Beginning shares outstanding		1,821			1,825			1,832			1,844			1,858
Shares issued for stock option and stock purchase plans, acquisitions and other corporate purposes		3			8			6			5			4
Shares repurchased		(15	)		(12	)		(13	)		(17	)		(18	)
Ending shares outstanding		1,809			1,821			1,825			1,832			1,844

Total U.S. Bancorp shareholders’ equity was $42.7 billion at June 30, 2014, compared with $42.1 billion at March 31, 2014, and $39.7 billion at June 30, 2013. During the second quarter, the Company returned 75 percent of second quarter earnings to shareholders, including $445 million in common stock dividends and $631 million of repurchased common stock.

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CAPITAL POSITION	Table 12
($ in millions)

	June 30 2014			Mar 31 2014			Dec 31 2013			Sep 30 2013			Jun 30 2013
Total U.S. Bancorp shareholders’ equity	$	42,700		$	42,054		$	41,113		$	40,132		$	39,683
Standardized Approach
Basel III transitional standardized approach/Basel I (a)
Common equity tier 1 capital	$	29,760		$	29,463		$	27,942		$	27,265		$	26,778
Tier 1 capital		34,924			34,627			33,386			32,707			32,219
Total risk-based capital		41,034			40,741			39,340			38,873			38,378
Common equity tier 1 capital ratio		9.6	%		9.7	%		9.4	%		9.3	%		9.2	%
Tier 1 capital ratio		11.3			11.4			11.2			11.2			11.1
Total risk-based capital ratio		13.2			13.5			13.2			13.3			13.3
Leverage ratio		9.6			9.7			9.6			9.6			9.5
Common equity tier 1 capital to risk-weighted assets estimated for the Basel III fully implemented standardized approach		8.9			9.0			8.8			8.6			8.6
Advanced Approaches
Common equity tier 1 capital to risk-weighted assets for the Basel III transitional advanced approaches		12.3
Common equity tier 1 capital to risk-weighted assets estimated for the Basel III fully implemented advanced approaches		11.7
Tangible common equity to tangible assets		7.5			7.8			7.7			7.4			7.5
Tangible common equity to risk-weighted assets		9.2			9.3			9.1			8.9			8.9

(a) 2014 amounts and ratios calculated under the Basel III transitional standardized approach; all prior periods under Basel I

Prior to 2014, the regulatory capital requirements effective for the Company followed Basel I. During 2013, U.S. banking regulators approved final regulatory capital rule enhancements, which implemented aspects of Basel III and the Dodd-Frank Act, such as redefining the regulatory capital elements and minimum capital ratios, introducing regulatory capital buffers above those minimums, revising rules for calculating risk-weighted assets and introducing a new common equity tier 1 ratio. Basel III includes two comprehensive methodologies for calculating risk-weighted assets, a general standardized approach and a more risk-sensitive advanced approaches. Beginning January 1, 2014, the regulatory capital requirements effective for the Company follow Basel III, subject to certain transition provisions from Basel I over the next four years to full implementation by January 1, 2018. In addition, as of April 1, 2014, the Company exited its parallel run qualification period, resulting in its capital adequacy now being evaluated against the Basel III methodology that is the most restrictive. Under the Basel III transitional standardized approach, the

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common equity tier 1 capital ratio was 9.6 percent at June 30, 2014, compared with 9.7 percent at March 31, 2014. The tier 1 capital ratio was 11.3 percent at June 30, 2014, compared with 11.4 percent at March 31, 2014, and 11.1 percent at June 30, 2013. Under the Basel III transitional advanced approaches, the common equity tier 1 capital to risk-weighted assets ratio was 12.3 percent at June 30, 2014. All regulatory ratios continue to be in excess of “well-capitalized” requirements. In addition, the common equity tier 1 capital to risk-weighted assets ratio estimated for the Basel III standardized approach as if fully implemented was 8.9 percent at June 30, 2014, compared with 9.0 percent at March 31, 2014, and 8.6 percent at June 30, 2013, and the common equity tier 1 capital to risk-weighted assets ratio estimated for the Basel III advanced approaches as if fully implemented was 11.7 percent at June 30, 2014. The tangible common equity to tangible assets ratio was 7.5 percent at June 30, 2014, compared with 7.8 percent at March 31, 2014, and 7.5 percent at June 30, 2013.

LINE OF BUSINESS FINANCIAL PERFORMANCE (a)	Table 13
($ in millions)

	Net Income Attributable to U.S. Bancorp						Percent Change					Net Income Attributable to U.S. Bancorp
Business Line	2Q 2014		1Q 2014		2Q 2013		2Q14 vs 1Q14		2Q14 vs 2Q13			YTD 2014		YTD 2013		Percent Change			2Q 2014 Earnings Composition
Wholesale Banking and Commercial Real Estate	$	281	$	281	$	319		—		(11.9	)	$	562	$	637		(11.8	)		19	%
Consumer and Small Business Banking		314		281		381		11.7		(17.6	)		595		735		(19.0	)		21
Wealth Management and Securities Services		56		52		48		7.7		16.7			108		85		27.1			4
Payment Services		284		237		269		19.8		5.6			521		479		8.8			19
Treasury and Corporate Support		560		546		467		2.6		19.9			1,106		976		13.3			37
Consolidated Company	$	1,495	$	1,397	$	1,484		7.0		.7		$	2,892	$	2,912		(.7	)		100	%

(a) preliminary data

Lines of Business

The Company’s major lines of business are Wholesale Banking and Commercial Real Estate, Consumer and Small Business Banking, Wealth Management and Securities Services, Payment Services, and Treasury and Corporate Support. These operating segments are components of the Company about which financial information is prepared and is evaluated regularly by management in deciding how to allocate resources and assess performance. Noninterest expenses incurred by centrally managed operations or business lines that

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directly support another business line’s operations are charged to the applicable business line based on its utilization of those services, primarily measured by the volume of customer activities, number of employees or other relevant factors. These allocated expenses are reported as net shared services expense within noninterest 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 2014, certain organization and methodology changes were made and, accordingly, prior period results were restated and presented on a comparable basis.

Wholesale Banking and Commercial Real Estate offers lending, equipment finance and small-ticket leasing, depository services, treasury management, capital markets, international trade services and other financial services to middle market, large corporate, commercial real estate, financial institution, non-profit and public sector clients. Wholesale Banking and Commercial Real Estate contributed $281 million of the Company’s net income in the second quarter of 2014, compared with $319 million in the second quarter of 2013 and $281 million in the first quarter of 2014. Wholesale Banking and Commercial Real Estate’s net income decreased $38 million (11.9 percent) from the same quarter of 2013 due to a higher provision for credit losses, higher total noninterest expense and a decrease in total net revenue. Total net revenue declined by $3 million (.4 percent), due to a 5.5 percent decrease in total noninterest income, partially offset by a 2.4 percent increase in net interest income. Net interest income increased $12 million (2.4 percent) year-over-year, primarily due to an increase in average total loans and deposits, partially offset by lower rates and fees on loans. Total noninterest income decreased by $15 million (5.5 percent), driven by lower wholesale transaction activity and loan-related fees, partially offset by an increase in bond underwriting fees and higher equity investment revenue. Total noninterest expense increased by $5 million (1.6 percent) over a year ago, primarily due to an increase in the FDIC insurance assessment allocation based on the level of commitments, partially offset by lower professional services expense. The provision for credit losses was $52 million higher year-over-year due to an increase in net charge-offs and an unfavorable change in the reserve allocation.

Wholesale Banking and Commercial Real Estate’s contribution to net income in the second quarter of 2014 was $281 million which was equal to the first quarter of 2014, as higher total net revenue was offset by an increase in the provision for credit losses. Total net revenue increased by $38 million (5.2 percent) compared with the prior quarter. Net interest income increased by $23 million (4.7 percent) on a linked quarter basis, primarily due to higher average loans and an additional day in the current quarter relative to the

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prior quarter, partially offset by lower loan rates. Total noninterest income increased by $15 million (6.1 percent), driven by higher equity investment revenue and a seasonal increase in treasury management fees. Total noninterest expense increased $6 million (1.9 percent) due to higher loan-related expenses and an increase in compensation and employee benefits expense, as an increase in production incentive costs was partially offset by a decrease in employee benefits expense due to seasonally lower payroll tax expense. The provision for credit losses increased by $33 million due to higher net charge-offs and an unfavorable change in the reserve allocation.

Consumer and Small Business Banking delivers products and services through banking offices, telephone servicing and sales, on-line services, direct mail, ATM processing and mobile devices, such as mobile phones and tablet computers. It encompasses community banking, metropolitan banking, in-store banking, small business banking, consumer lending, mortgage banking, workplace banking, student banking and 24-hour banking. Consumer and Small Business Banking contributed $314 million of the Company’s net income in the second quarter of 2014, a $67 million (17.6 percent) decrease from the second quarter of 2013 and a $33 million (11.7 percent) increase over the prior quarter. Within Consumer and Small Business Banking, the retail banking division reported a 6.1 percent decrease in its contribution from the same quarter of last year, principally due to lower total net revenue and an increase in total noninterest expense. Retail banking’s total net revenue was .8 percent lower than the second quarter of 2013. Net interest income decreased 4.2 percent, primarily due to lower rates and fees on loans and the impact of lower rates on the margin benefit from deposits, partially offset by higher average loan and deposit balances. Total noninterest income for the retail banking division increased 7.9 percent over a year ago, principally due to an increase in retail lease revenue and higher deposit service charges. Total noninterest expense for the retail banking division in the second quarter of 2014 increased 2.4 percent over the same quarter of the prior year, largely due to higher compensation and employee benefits expense and litigation-related expense, partially offset by lower FDIC insurance assessments and marketing expenses. The provision for credit losses for the retail banking division decreased 9.8 percent on a year-over-year basis, principally due to lower net charge-offs, partially offset by an unfavorable change in the reserve allocation. The contribution of the mortgage banking division was lower by 29.7 percent than the second quarter of 2013, reflecting a decrease in total net revenue, partially offset by a reduction in total noninterest expense and in the provision for credit losses. The division’s 26.6 percent decrease in total net revenue was due to a 31.5 percent decrease in total noninterest income, driven by lower mortgage origination and sales revenue, as well as a 15.1 percent decrease in net interest income, primarily the result of lower average loans held for sale. Total noninterest expense was 6.0

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percent lower than the prior year, primarily reflecting lower incentive compensation. The favorable change in the provision for credit losses for the mortgage banking division was due to lower net charge-offs and a favorable change in the reserve allocation.

Consumer and Small Business Banking’s contribution in the second quarter of 2014 was $33 million (11.7 percent) higher than the first quarter of 2014, due to higher total net revenue and a lower provision for credit losses, partially offset by an increase in total noninterest expense. Within Consumer and Small Business Banking, the retail banking division’s contribution increased 18.7 percent, mainly due to a decrease in the provision for credit losses and higher total net revenue. Total net revenue for the retail banking division increased 1.0 percent compared with the previous quarter. Net interest income was 1.1 percent lower, primarily due to lower rates and fees on loans, partially offset by higher average loan and deposit balances and one additional day in the current quarter relative to the prior quarter. Total noninterest income was 5.9 percent higher on a linked quarter basis, driven by higher deposit service charges. Total noninterest expense for the retail banking division was essentially flat on a linked quarter basis, as an increase in professional services, marketing and litigation-related expenses was offset by lower net shared services costs and a decrease in compensation and employee benefits expense due to seasonally lower payroll taxes. The provision for credit losses decreased 18.4 percent on a linked quarter basis due to a favorable change in the reserve allocation and lower net charge-offs in the current quarter. The contribution of the mortgage banking division increased 3.2 percent over the first quarter of 2014 due to an increase in total net revenue, partially offset by higher noninterest expense and a higher provision for credit losses. Total net revenue increased 9.4 percent due to a 16.5 percent increase in noninterest income, primarily the result of increased mortgage origination and sales revenue and a favorable change in the valuation of MSRs, net of hedging activities, partially offset by a 2.1 percent decrease in net interest income, primarily due to lower loan rates. Total noninterest expense increased 7.4 percent, primarily reflecting higher professional services and mortgage servicing-related expense, partially offset by lower employee benefits expense. The provision for credit losses for the mortgage banking division increased on a linked quarter basis due to an unfavorable change in the reserve allocation.

Wealth Management and Securities Services provides private banking, financial advisory services, investment management, retail brokerage services, insurance, trust, custody and fund servicing through five businesses: Wealth Management, Corporate Trust Services, U.S. Bancorp Asset Management, Institutional Trust & Custody and Fund Services. Wealth Management and Securities Services contributed $56 million of the Company’s net income in the second quarter of 2014, compared with $48 million in the second quarter of

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2013 and $52 million in the first quarter of 2014. The business line’s contribution was $8 million (16.7 percent) higher than the same quarter of 2013, as an increase in total net revenue was partially offset by higher total noninterest expense. Total net revenue increased by $33 million (8.1 percent) year-over-year, driven by a $29 million (9.1 percent) increase in total noninterest income, reflecting the impact of account growth, improved market conditions, and business expansion. Net interest income increased $4 million (4.6 percent), principally due to higher average loan and deposit balances. Total noninterest expense increased by $15 million (4.6 percent) primarily as a result of higher compensation and employee benefits expense, including the impact of business expansion. The provision for credit losses increased $5 million mainly due to higher net charge-offs.

The business line’s contribution in the second quarter of 2014 was $4 million (7.7 percent) higher than the prior quarter. Total net revenue increased on a linked quarter basis, reflecting an increase in net interest income (9.6 percent), principally due to higher average deposit balances and the impact of higher rates on the margin benefit from deposits. In addition, an increase in total noninterest income (2.4 percent) was due to higher trust and investment management fees, resulting from improved market conditions and account growth, including business expansion. Total noninterest expense was flat compared with the prior quarter, as higher professional services costs were offset by lower net shared services expense. The provision for credit losses increased $10 million on a linked quarter basis due to higher net charge-offs and an unfavorable change in the reserve allocation.

Payment Services includes consumer and business credit cards, stored-value cards, debit cards, corporate and purchasing card services, consumer lines of credit and merchant processing. Payment Services contributed $284 million of the Company’s net income in the second quarter of 2014, compared with $269 million in the second quarter of 2013 and $237 million in the first quarter of 2014. The $15 million (5.6 percent) increase in the business line’s contribution from the prior year was due to an increase in total net revenue, partially offset by an increase in total noninterest expense and a higher provision for credit losses. Total net revenue increased by $32 million (2.6 percent) year-over-year. Net interest income increased by $28 million (7.2 percent), primarily due to higher average loan balances and improved loan rates. Total noninterest income was $4 million (.5 percent) higher year-over-year, due to an increase in credit and debit card revenue on higher transaction volumes, and higher merchant processing services revenue, the result of seasonally higher transaction volumes, partially offset by lower other revenue due to the impact of a small merchant contract termination gain recorded in the second quarter of 2013. Total noninterest expense increased by $4 million (.7 percent) over the second quarter of 2013, primarily due to higher compensation

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and employee benefits expense, including the impact of business initiatives, partially offset by reductions in technology and communications expense and other intangibles expense. The provision for credit losses increased by $6 million (3.4 percent) due to an unfavorable change in the reserve allocation, partially offset by lower net charge-offs.

Payment Services’ contribution in the second quarter of 2014 increased $47 million (19.8 percent) over the first quarter of 2014. Total net revenue increased $58 million (4.9 percent) on a linked quarter basis driven by higher noninterest income. Net interest income was relatively flat compared with prior quarter. Total noninterest income increased by $57 million (7.4 percent), reflecting an increase in merchant processing revenue due to higher product fees and volumes, and an increase in credit and debit card revenue due to higher transaction volumes, along with an increase in corporate payment products revenue on higher volumes. Total noninterest expense increased by $2 million (.3 percent), primarily due to higher merchant processing-related costs and net shared services expense, partially offset by a decrease in employee benefits expense, principally due to lower payroll taxes. The provision for credit losses was $19 million (9.5 percent) lower on a linked quarter basis primarily due to a favorable change in the reserve allocation.

Treasury and Corporate Support includes the Company’s investment portfolios, most covered commercial and commercial real estate loans and related other real estate owned, funding, capital management, interest rate risk management, the net effect of transfer pricing related to average balances, income taxes not allocated to business lines, including most investments in tax-advantaged projects, and the residual aggregate of those expenses associated with corporate activities that are managed on a consolidated basis. Treasury and Corporate Support recorded net income of $560 million in the second quarter of 2014, compared with $467 million in the second quarter of 2013 and $546 million in the first quarter of 2014. Net interest income increased by $94 million (17.0 percent) over the second quarter of 2013, principally due to an increase in average balances in the investment portfolio and lower rates on short-term borrowings. Total noninterest income increased by $243 million over the second quarter of last year, mainly due to the Visa sale. Total noninterest expense increased by $163 million (89.1 percent), principally due to the FHA DOJ settlement, partially offset by a decrease in employee benefits expense resulting from lower pension costs and lower costs related to investments in tax-advantaged projects related to a change in accounting for affordable housing investments in the first quarter of 2014. The provision for credit losses was $39 million lower year-over-year, due to a favorable change in the reserve allocation and lower net charge-offs.

Net income in the second quarter of 2014 was $14 million (2.6 percent) higher on a linked quarter basis, driven by higher total net revenue, partially offset by higher total noninterest expense. Total net revenue was

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$214 million (28.1 percent) higher than the prior quarter, driven by the Visa sale, partially offset by lower equity investment revenue. A $192 million increase in total noninterest expense was primarily due to the FHA DOJ settlement and a current quarter charitable foundation contribution, partially offset by a decrease in compensation and employee benefits expense. The provision for credit losses was $7 million higher compared with the first quarter of 2014, primarily due to an unfavorable change in the reserve allocation.

Additional schedules containing more detailed information about the Company’s business line results are available on the web at usbank.com or by calling Investor Relations at 612-303-4328.

On Wednesday, July 16, 2014, at 8:30 a.m. (CDT) Richard K. Davis, chairman, president and chief executive officer, and Andrew Cecere, vice chairman and chief financial officer, will host a conference call to review the financial results. The conference call will be available by telephone or on the Internet. A presentation will be used during the call and will be available on the Company’s website at www.usbank.com. To access the conference call from locations within the United States and Canada, please dial 866-316-1409. Participants calling from outside the United States and Canada, please dial 706-634-9086. The conference ID number for all participants is 56869225. For those unable to participate during the live call, a recording of the call will be available approximately two hours after the conference call ends on Wednesday, July 16th, and will run through Wednesday, July 23rd, at 11:00 p.m. (CDT). To access the recorded message within the United States and Canada, dial 855-859-2056. If calling from outside the United States and Canada, please dial 404-537-3406 to access the recording. The conference ID is 56869225. To access the webcast and presentation go to www.usbank.com and click on “About U.S. Bank.” The “Webcasts & Presentations” link can be found under the Investor/Shareholder information heading, which is at the left side of the bottom of the page.

Minneapolis-based U.S. Bancorp (“USB”), with $389 billion in assets as of June 30, 2014, is the parent company of U.S. Bank National Association, the 5th largest commercial bank in the United States. The Company operates 3,174 banking offices in 25 states and 5,005 ATMs and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. Visit U.S. Bancorp on the web at usbank.com.

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Forward-Looking Statements

The following information appears in accordance with 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, anticipated future revenue and expenses and the future plans and prospects of U.S. Bancorp. Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated. A reversal or slowing of the current moderate economic recovery or another severe contraction could adversely affect U.S. Bancorp’s revenues and the values of its assets and liabilities. Global financial markets could experience a recurrence of significant turbulence, which could reduce the availability of funding to certain financial institutions and lead to a tightening of credit, a reduction of business activity, and increased market volatility. Continued stress in the commercial real estate markets, as well as a delay or failure of recovery in the residential real estate markets could cause additional credit losses and deterioration in asset values. In addition, U.S. Bancorp’s business and financial performance is likely to be negatively impacted by recently enacted and future legislation and regulation. U.S. Bancorp’s results could also be adversely affected by deterioration in general business and economic conditions; changes in interest rates; deterioration in the credit quality of its loan portfolios or in the value of the collateral securing those loans; deterioration in the value of securities held in its investment securities portfolio; legal and regulatory developments; increased competition from both banks and non-banks; changes in customer behavior and preferences; effects of mergers and acquisitions and related integration; effects of critical accounting policies and judgments; and management’s ability to effectively manage credit risk, residual value risk, market risk, operational risk, interest rate risk and liquidity risk.

For discussion of these and other risks that may cause actual results to differ from expectations, refer to U.S. Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2013, on file with the Securities and Exchange Commission, including the sections entitled “Risk Factors” and “Corporate Risk Profile” contained in Exhibit 13, and all subsequent filings with the Securities and Exchange Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934. However, factors other than these also could adversely affect U.S. Bancorp’s results, and the reader should not consider these factors to be a complete set of all potential risks or uncertainties. 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.

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Non-GAAP Financial Measures

In addition to capital ratios defined by banking regulators, 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 estimated for the Basel III fully implemented standardized approach,

• Common equity tier 1 capital to risk-weighted assets estimated for the Basel III fully implemented advanced approaches, and for additional information,

• Tier 1 common equity to risk-weighted assets using Basel I definition.

These measures are viewed by management as useful additional methods of reflecting the level of capital available to withstand unexpected market or economic conditions. Additionally, presentation of these measures allows investors, analysts and banking regulators to assess the Company’s capital position relative to other financial services companies. These measures differ from currently effective capital ratios defined by banking regulations principally in that the numerator includes unrealized gains and losses related to available-for-sale securities and excludes preferred securities, including preferred stock, the nature and extent of which varies among different financial services companies. These measures are not defined in generally accepted accounting principles (“GAAP”), or are not currently effective or defined in federal banking regulations. As a result, these measures disclosed by the Company may be considered non-GAAP financial measures.

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.

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U.S. Bancorp

Consolidated Statement of Income

	Three Months Ended					Six Months Ended
(Dollars and Shares in Millions, Except Per Share Data)	June 30,					June 30,
(Unaudited)	2014			2013		2014			2013
Interest Income
Loans	$	2,532		$	2,552	$	5,054		$	5,114
Loans held for sale		24			54		51			126
Investment securities		461			392		902			802
Other interest income		30			40		62			107
Total interest income		3,047			3,038		6,069			6,149
Interest Expense
Deposits		114			144		233			299
Short-term borrowings		63			87		132			172
Long-term debt		181			191		365			409
Total interest expense		358			422		730			880
Net interest income		2,689			2,616		5,339			5,269
Provision for credit losses		324			362		630			765
Net interest income after provision for credit losses		2,365			2,254		4,709			4,504
Noninterest Income
Credit and debit card revenue		259			244		498			458
Corporate payment products revenue		182			176		355			348
Merchant processing services		384			373		740			720
ATM processing services		82			83		160			165
Trust and investment management fees		311			284		615			562
Deposit service charges		171			160		328			313
Treasury management fees		140			140		273			274
Commercial products revenue		221			209		426			409
Mortgage banking revenue		278			396		514			797
Investment products fees		47			46		93			87
Securities gains (losses), net		—			6		5			11
Other		369			159		545			297
Total noninterest income		2,444			2,276		4,552			4,441
Noninterest Expense
Compensation		1,125			1,098		2,240			2,180
Employee benefits		257			277		546			587
Net occupancy and equipment		241			234		490			469
Professional services		97			91		180			169
Marketing and business development		96			96		175			169
Technology and communications		214			214		425			425
Postage, printing and supplies		80			78		161			154
Other intangibles		48			55		97			112
Other		595			414		983			762
Total noninterest expense		2,753			2,557		5,297			5,027
Income before income taxes		2,056			1,973		3,964			3,918
Applicable income taxes		547			529		1,043			1,087
Net income		1,509			1,444		2,921			2,831
Net (income) loss attributable to noncontrolling interests		(14	)		40		(29	)		81
Net income attributable to U.S. Bancorp	$	1,495		$	1,484	$	2,892		$	2,912
Net income applicable to U.S. Bancorp common shareholders	$	1,427		$	1,405	$	2,758		$	2,763
Earnings per common share	$	.79		$	.76	$	1.52		$	1.49
Diluted earnings per common share	$	.78		$	.76	$	1.51		$	1.49
Dividends declared per common share	$	.245		$	.230	$	.475		$	.425
Average common shares outstanding		1,811			1,843		1,815			1,851
Average diluted common shares outstanding		1,821			1,853		1,825			1,860

Page 28

U.S. Bancorp

Consolidated Ending Balance Sheet

	June 30,			December 31,			June 30,
(Dollars in Millions)	2014			2013			2013
	(Unaudited)						(Unaudited)
Assets
Cash and due from banks	$	12,636		$	8,477		$	6,618
Investment securities
Held-to-maturity		41,995			38,920			34,668
Available-for-sale		48,389			40,935			40,307
Loans held for sale		3,018			3,268			4,766
Loans
Commercial		77,454			70,033			68,185
Commercial real estate		40,797			39,885			38,298
Residential mortgages		51,965			51,156			47,753
Credit card		17,642			18,021			16,649
Other retail		48,568			47,678			47,105
Total loans, excluding covered loans		236,426			226,773			217,990
Covered loans		7,448			8,462			9,985
Total loans		243,874			235,235			227,975
Less allowance for loan losses		(4,132	)		(4,250	)		(4,312	)
Net loans		239,742			230,985			223,663
Premises and equipment		2,614			2,606			2,622
Goodwill		9,422			9,205			9,156
Other intangible assets		3,337			3,529			3,287
Other assets		27,912			26,096			28,328
Total assets	$	389,065		$	364,021		$	353,415
Liabilities and Shareholders’ Equity
Deposits
Noninterest-bearing	$	80,266		$	76,941		$	70,632
Interest-bearing		166,531			156,165			147,693
Time deposits greater than $100,000		29,465			29,017			33,243
Total deposits		276,262			262,123			251,568
Short-term borrowings		29,101			27,608			26,179
Long-term debt		25,891			20,049			19,724
Other liabilities		14,425			12,434			14,894
Total liabilities		345,679			322,214			312,365
Shareholders’ equity
Preferred stock		4,756			4,756			4,756
Common stock		21			21			21
Capital surplus		8,264			8,216			8,167
Retained earnings		40,573			38,667			36,707
Less treasury stock		(10,232	)		(9,476	)		(8,680	)
Accumulated other comprehensive income (loss)		(682	)		(1,071	)		(1,288	)
Total U.S. Bancorp shareholders’ equity		42,700			41,113			39,683
Noncontrolling interests		686			694			1,367
Total equity		43,386			41,807			41,050
Total liabilities and equity	$	389,065		$	364,021		$	353,415

Page 29

U.S. Bancorp

Non-GAAP Financial Measures

	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in Millions, Unaudited)	2014			2014			2013			2013			2013
Total equity	$	43,386		$	42,743		$	41,807		$	41,552		$	41,050
Preferred stock		(4,756	)		(4,756	)		(4,756	)		(4,756	)		(4,756	)
Noncontrolling interests		(686	)		(689	)		(694	)		(1,420	)		(1,367	)
Goodwill (net of deferred tax liability) (1)		(8,548	)		(8,352	)		(8,343	)		(8,319	)		(8,317	)
Intangible assets, other than mortgage servicing rights		(925	)		(804	)		(849	)		(878	)		(910	)
Tangible common equity (a)		28,471			28,142			27,165			26,179			25,700
Tangible common equity (as calculated above)		28,471			28,142			27,165			26,179			25,700
Adjustments (2)		224			239			224			258			195
Common equity tier 1 capital estimated for the Basel III fully implemented standardized and advanced approaches (b)		28,695			28,381			27,389			26,437			25,895
Tier 1 capital, determined in accordance with prescribed regulatory requirements using Basel I definition								33,386			32,707			32,219
Preferred stock								(4,756	)		(4,756	)		(4,756	)
Noncontrolling interests, less preferred stock not eligible for Tier 1 capital								(688	)		(686	)		(685	)
Tier 1 common equity using Basel I definition (c)								27,942			27,265			26,778
Total assets		389,065			371,289			364,021			360,681			353,415
Goodwill (net of deferred tax liability) (1)		(8,548	)		(8,352	)		(8,343	)		(8,319	)		(8,317	)
Intangible assets, other than mortgage servicing rights		(925	)		(804	)		(849	)		(878	)		(910	)
Tangible assets (d)		379,592			362,133			354,829			351,484			344,188
Risk-weighted assets, determined in accordance with prescribed regulatory requirements (3) (e)		309,929	*		302,841			297,919			293,155			289,613
Adjustments (4)		12,753	*		13,238			13,712			13,473			12,476
Risk-weighted assets estimated for the Basel III fully implemented standardized approach (f)		322,682	*		316,079			311,631			306,628			302,089
Risk-weighted assets, determined in accordance with prescribed transitional advanced approaches regulatory requirements		241,929	*
Adjustments (5)		3,383	*
Risk-weighted assets estimated for the Basel III fully implemented advanced approaches (g)		245,312	*
Ratios *
Tangible common equity to tangible assets (a)/(d)		7.5	%		7.8	%		7.7	%		7.4	%		7.5	%
Tangible common equity to risk-weighted assets (a)/(e)		9.2			9.3			9.1			8.9			8.9
Tier 1 common equity to risk-weighted assets using Basel I definition (c)/(e)		—			—			9.4			9.3			9.2
Common equity tier 1 capital to risk-weighted assets estimated for the Basel III fully implemented standardized approach (b)/(f)		8.9			9.0			8.8			8.6			8.6
Common equity tier 1 capital to risk-weighted assets estimated for the Basel III fully implemented advanced approaches (b)/(g)		11.7

* Preliminary data. Subject to change prior to filings with applicable regulatory agencies.

(1) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements beginning March 31, 2014.

(2) Includes net losses on cash flow hedges included in accumulated other comprehensive income and other adjustments.

(3) Beginning March 31, 2014, calculated under the Basel III transitional standardized approach; all other periods calculated under Basel I.

(4) Includes higher risk-weighting for unfunded loan commitments, investment securities, residential mortgages, mortgage servicing rights and other adjustments.

(5) Primarily reflects higher risk-weighting for mortgage servicing rights.

Page 30

EX-99.2

Richard K. Davis

Chairman, President and CEO

Andy Cecere

Vice Chairman and CFO

U.S. Bancorp

2Q14 Earnings

Conference Call

U.S. Bancorp

2Q14 Earnings

Conference Call

July 16, 2014

Exhibit 99.2

Forward-looking Statements and Additional Information

The

following

information

appears

in

accordance

with

the

Private

Securities

Litigation

Reform

Act

of

1995:

This

presentation

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

made.

These

forward-looking

statements

cover,

among

other

things,

anticipated

future

revenue

and

expenses

and

the

future

plans

and

prospects

of

U.S.

Bancorp.

Forward-looking

statements

involve

inherent

risks

and

uncertainties,

and

important

factors

could

cause

actual

results

to

differ

materially

from

those

anticipated.

A

reversal

or

slowing

of

the

current

moderate

economic

recovery

or

another

severe

contraction

could

adversely

affect

U.S.

Bancorp’s

revenues

and

the

values

of

its

assets

and

liabilities.

Global

financial

markets

could

experience

a

recurrence

of

significant

turbulence,

which

could

reduce

the

availability

of

funding

to

certain

financial

institutions

and

lead

to

a

tightening

of

credit,

a

reduction

of

business

activity,

and

increased

market

volatility.

Continued

stress

in

the

commercial

real

estate

markets,

as

well

as

a

delay

or

failure

of

recovery

in

the

residential

real

estate

markets,

could

cause

additional

credit

losses

and

deterioration

in

asset

values.

In

addition,

U.S.

Bancorp’s

business

and

financial

performance

is

likely

to

be

negatively

impacted

by

recently

enacted

and

future

legislation

and

regulation.

U.S.

Bancorp’s

results

could

also

be

adversely

affected

by

deterioration

in

general

business

and

economic

conditions;

changes

in

interest

rates;

deterioration

in

the

credit

quality

of

its

loan

portfolios

or

in

the

value

of

the

collateral

securing

those

loans;

deterioration

in

the

value

of

securities

held

in

its

investment

securities

portfolio;

legal

and

regulatory

developments;

increased

competition

from

both

banks

and

non-banks;

changes

in

customer

behavior

and

preferences;

effects

of

mergers

and

acquisitions

and

related

integration;

effects

of

critical

accounting

policies

and

judgments;

and

management’s

ability

to

effectively

manage

credit

risk,

residual

value

risk,

market

risk,

operational

risk,

interest

rate

risk

and

liquidity

risk.

For

discussion

of

these

and

other

risks

that

may

cause

actual

results

to

differ

from

expectations,

refer

to

U.S.

Bancorp’s

Annual

Report

on

Form

10-K

for

the

year

ended

December

31,

2013,

on

file

with

the

Securities

and

Exchange

Commission,

including

the

sections

entitled

“Risk

Factors”

and

“Corporate

Risk

Profile”

contained

in

Exhibit

13,

and

all

subsequent

filings

with

the

Securities

and

Exchange

Commission

under

Sections

13(a),

13(c),

14

or

15(d)

of

the

Securities

Exchange

Act

of

1934.

Forward-looking

statements

speak

only

as

of

the

date

they

are

made,

and

U.S.

Bancorp

undertakes

no

obligation

to

update

them

in

light

of

new

information

or

future

events.

This

presentation

includes

non-GAAP

financial

measures

to

describe

U.S.

Bancorp’s

performance.

The

reconciliations

of

those

measures

to

GAAP

measures

are

provided

within

or

in

the

appendix

of

the

presentation.

These

disclosures

should

not

be

viewed

as

a

substitute

for

operating

results

determined

in

accordance

with

GAAP,

nor

are

they

necessarily

comparable

to

non-GAAP

performance

measures

that

may

be

presented

by

other

companies.

3

2Q14 Earnings

Conference Call

2Q14 Highlights

Record net income of $1.5 billion; $0.78 per diluted common share

2Q14 results included a $214 million gain on the sale of Visa Inc. Class B

common stock and a $200 million FHA DOJ settlement (no impact to

EPS)

Average loan growth of 6.8% vs. 2Q13 (6.7% excluding Charter One

acquisition)

and 2.0% vs. 1Q14 (1.9% excluding Charter One acquisition)

Average deposit growth of 6.0% vs. 2Q13 (5.8% excluding Charter One

acquisition) and 1.9% vs. 1Q14 (1.7% excluding Charter One acquisition)

Net charge-offs declined 11.0% vs. 2Q13

Nonperforming assets decreased 1.6% vs. 1Q14 and 8.1% vs. 2Q13 (excluding

covered assets)

Capital generation continues to reinforce capital position

•

Common equity tier 1 capital ratio of 8.9% estimated for the Basel III fully implemented

standardized approach

•

Common

equity

tier

1

capital

ratio

of

9.6%;

Tier

1

capital

ratio

of

11.3%

Returned 75% of earnings to shareholders in 2Q14

•

Repurchased 15 million shares of common stock during the quarter

4

2Q14 Earnings

Conference Call

Performance Ratios

Return on Average Common Equity

and Return on Average Assets

Efficiency Ratio and

Net Interest Margin

Return on Avg Common Equity

Return on Avg Assets

Efficiency Ratio

Net Interest Margin

* Excluding $214 million gain on Visa Inc. Class B common stock sale and $200 million DOJ settlement

Efficiency ratio computed as noninterest expense divided by the sum of net interest income on a taxable-equivalent

basis

and

noninterest

income

excluding

securities

gains

(losses)

net

5

2Q14 Earnings

Conference Call

* Gain on Visa Inc. Class B common stock sale

Taxable-equivalent basis

Revenue Growth

Year-Over-Year Change

(2.4%)

(5.6%)

(4.4%)

(1.2%)

4.9%

$ in millions

6

2Q14 Earnings

Conference Call

Loan and Deposit Growth

Year-Over-Year Growth

Average Balances

$ in billions

6.0%

$235.9

6.8%

$240.5

5.2%

$225.2

5.7%

$229.4

5.7%

$232.8

5.1%

$257.5

6.0%

$262.4

7.0%

$247.4

5.5%

$252.4

5.4%

$256.9

7

2Q14 Earnings

Conference Call

Credit Quality

* Excluding Covered Assets (assets subject to loss sharing agreements with FDIC)

Net Charge-offs

Nonperforming Assets*

$ in millions

Net Charge-offs (Left Scale)

NCOs to Avg Loans (Right Scale)

Nonperforming Assets (Left Scale)

NPAs to Loans plus ORE (Right Scale)

8

2Q14 Earnings

Conference Call

Earnings Summary

$ in millions, except per-share data

Taxable-equivalent basis

YTD

YTD

2Q14

1Q14

2Q13

vs 1Q14

vs 2Q13

2014

2013

% B/(W)

Net Interest Income

2,744

$    

2,706

$    

2,672

$    

1.4

2.7

5,450

$    

5,381

$    

1.3

Noninterest Income

2,444

2,108

2,276

15.9

7.4

4,552

4,441

2.5

Total Revenue

5,188

4,814

4,948

7.8

4.9

10,002

9,822

1.8

Noninterest Expense

2,753

2,544

2,557

(8.2)

(7.7)

5,297

5,027

(5.4)

Operating Income

2,435

2,270

2,391

7.3

1.8

4,705

4,795

(1.9)

Net Charge-offs

349

341

392

(2.3)

11.0

690

825

16.4

Excess Provision

(25)

(35)

(30)

(28.6)

(16.7)

(60)

(60)

-

Income before Taxes

2,111

1,964

2,029

7.5

4.0

4,075

4,030

1.1

Applicable Income Taxes

602

552

585

(9.1)

(2.9)

1,154

1,199

3.8

Noncontrolling Interests

(14)

(15)

40

6.7

nm

(29)

81

nm

Net Income

1,495

1,397

1,484

7.0

0.7

2,892

2,912

(0.7)

Preferred Dividends/Other

68

66

79

(3.0)

13.9

134

149

10.1

NI to Common

1,427

$    

1,331

$    

1,405

$    

7.2

1.6

2,758

$    

2,763

$    

(0.2)

Diluted EPS

0.78

$      

0.73

$      

0.76

$      

6.8

2.6

1.51

$      

1.49

$      

1.3

Average Diluted Shares

1,821

1,828

1,853

0.4

1.7

1,825

1,860

1.9

% B/(W)

9

2Q14 Earnings

Conference Call

2Q14 Results -

Key Drivers

vs. 2Q13

Net Revenue increase of 4.9% (0.5% excluding notable items)

•

Net interest income increase of 2.7%; net interest margin

of 3.27% vs. 3.43% in 2Q13

•

Noninterest income increase of 7.4% (2.0% decrease

excluding notable items)

Noninterest expense increase of 7.7% (0.2% decrease

excluding notable items)

Provision for credit losses lower by $38 million

•

Net charge-offs lower by $43 million, or 11.0%

•

Provision lower than NCOs by $25 million vs. $30 million in 2Q13

vs. 1Q14

Net Revenue increase of 7.8% (3.3% excluding notable items)

•

Net interest income increase of 1.4%; net interest margin of 3.27% vs. 3.35% in 1Q14

•

Noninterest income increase of 15.9% (5.8% excluding notable items)

Noninterest expense increase of 8.2% (0.4% excluding notable items)

Provision for credit losses higher by $18 million

•

Net charge-offs increased by $8 million

•

Provision lower than NCOs by $25 million vs. $35 million in 1Q14

10

2Q14 Earnings

Conference Call

Capital Position

$ in billions; RWA = risk-weighted assets

(a) 2014 amounts and ratios calculated under the Basel III transitional standardized approach; all prior periods under Basel I

2Q14

1Q14

4Q13

3Q13

2Q13

Total U.S. Bancorp shareholders' equity

42.7

$    

42.1

$    

41.1

$    

40.1

$    

39.7

$    

Standardized Approach

Basel III transitional standardized approach/Basel I (a)

Common equity tier 1 capital

29.8

29.5

27.9

27.3

26.8

Tier 1 capital

34.9

34.6

33.4

32.7

32.2

Total risk-based capital

41.0

40.7

39.3

38.9

38.4

Common equity tier 1 capital ratio

9.6%

9.7%

9.4%

9.3%

9.2%

Tier 1 capital ratio

11.3%

11.4%

11.2%

11.2%

11.1%

Total risk-based capital ratio

13.2%

13.5%

13.2%

13.3%

13.3%

Leverage ratio

9.6%

9.7%

9.6%

9.6%

9.5%

Common equity tier 1 capital to RWA estimated for the

Basel III fully implemented standardized approach

8.9%

9.0%

8.8%

8.6%

8.6%

Advanced Approaches

Common equity tier 1 capital to RWA for the Basel III

transitional advanced approaches

12.3%

Common equity tier 1 capital to RWA estimated for the 

Basel III fully implemented advanced approaches

11.7%

Tangible common equity ratio

7.5%

7.8%

7.7%

7.4%

7.5%

Tangible common equity as a % of RWA

9.2%

9.3%

9.1%

8.9%

8.9%

11

2Q14 Earnings

Conference Call

Capital Actions

Dividend increase announced June 17

th

•

Annual dividend increased from $0.92 to $0.98, a 6.5% increase

•

One year authorization to repurchase up to $2.3 billion of outstanding stock effective April 1, 2014

Returned 75% of earnings to shareholders during 2Q14

Reinvest and

Acquisitions

Dividends

Share

Repurchases

20 -

40%

Targets:

30 -

40%

30 -

40%

25%

2Q14

Actual:

44%

31%

Earnings Distribution

12

2Q14 Earnings

Conference Call

13

2Q14 Earnings

Conference Call

Appendix

14

2Q14 Earnings

Conference Call

Covered

Commercial

CRE

Res Mtg

Credit

Card

Retail

Average Loans

Average Loans

Key Points

$ in billions

vs. 2Q13

Average total loans grew by $15.3 billion, or 6.8%

(6.7% excluding Charter One acquisition)

Average total loans, excluding covered loans,

were higher by 8.3%

Average total commercial loans increased $8.3

billion, or 12.4%; average commercial real estate

loans increased $2.6 billion, or 6.9%; average

residential mortgage loans increased $4.9 billion,

or 10.5%

vs. 1Q14

Average total loans grew by $4.6 billion, or 2.0%

(1.9% excluding Charter One acquisition)

Average total loans, excluding covered loans,

were higher by 2.2%

Average total commercial loans increased $4.2

billion, or 5.9%; average commercial real estate

loans increased $0.4 billion, or 1.1%; average

residential mortgage loans increased $0.2 billion,

or 0.4%

Year-Over-Year Growth

5.2%

5.7%

5.7%

6.0%

6.8%

Covered

Commercial

CRE

Res Mtg

Retail

Credit Card

$225.2

$229.4

$232.8

$235.9

$240.5

2Q14 Earnings

Conference Call

Time

Money

Market

Checking

& Savings

Noninterest

-bearing

Average Deposits

Average Deposits

Key Points

$ in billions

vs. 2Q13

Average total deposits increased by $15.0

billion, or 6.0% (5.8% excluding Charter One

acquisition)

Average low cost deposits (NIB, interest

checking, money market and savings) 

increased by $17.6 billion, or 8.7%

vs. 1Q14

Average total deposits increased by $4.9

billion, or 1.9% (1.7% excluding Charter One

acquisition)

Average low cost deposits increased by $5.6

billion, or 2.6%

Year-Over-Year Growth

7.0%

5.5%

5.4%

5.1%

6.0%

Time

Money Market

Checking and Savings

Noninterest-bearing

$247.4

$252.4

$256.9

$257.5

$262.4

15

2Q14 Earnings

Conference Call

Net Interest Income

Net Interest Income

Key Points

$ in millions

Taxable-equivalent basis

vs. 2Q13

Average earning assets grew by $24.1 billion,

or 7.7%

Net interest margin lower by 16 bps (3.27%

vs. 3.43%) driven by:

•

Lower reinvestment rates on investment securities

and growth in the investment portfolio at lower

rates and lower rates on new loans

•

Partially offset by lower rates on deposits and

short-term borrowings and a reduction in higher

cost long-term debt

vs. 1Q14

Average earning assets grew by $9.8 billion,

or 3.0%

Net interest margin lower by 8 bps (3.27% vs.

3.35%) driven by:

•

Growth in lower rate investment securities

•

Lower rates on new loans, principally due to higher

growth in wholesale as compared to retail loans

Year-Over-Year Change

(1.5%)

(2.5%)

(1.8%)

(0.1%)

2.7%

16

2Q14 Earnings

Conference Call

Noninterest Income

Noninterest Income

Key Points

$ in millions

Payments = credit and debit card revenue, corporate payment products revenue and merchant processing;

Service charges = deposit  service charges, treasury management fees and ATM processing services

vs. 2Q13

Noninterest income increased by $168 million, or

7.4%, driven by:

•

Higher credit and debit card revenue (6.1% increase) and

corporate payments (3.4% increase) due to higher transaction

volumes; higher merchant processing revenue (2.9% increase)

due to an increase in product fees and higher volumes, partially

offset by lower rates

•

Higher trust and investment management revenue (9.5%

increase) due to account growth and improved market conditions

•

Higher deposit service charges (6.9% increase) due to account

growth and pricing changes

•

Higher commercial products revenue (5.7% increase) due to an

increase in bond underwriting fees and a higher volume of tax-

advantaged project fees

•

Higher other income, primarily due to the Visa gain

•

Mortgage banking revenue decline of $118 million

vs. 1Q14

Noninterest income increased by $336 million, or

15.9%, driven by:

•

Higher credit and debit card revenue (8.4% increase), corporate

payments (5.2% increase), and merchant processing revenue

(7.9% increase) due to seasonally higher transaction volumes

•

Higher trust and investment management revenues (2.3%

increase) due to improved market conditions and account growth

•

Higher deposit service charges (8.9% increase) due to seasonally

higher transaction volumes

•

Higher commercial products revenue (7.8% increase) due to

higher wholesale transaction activity

•

Mortgage banking revenue increase of $42 million

•

Higher other income, primarily due to the Visa gain

Year-Over-Year Change

(3.4%)

(9.1%)

(7.4%)

(2.6%)

7.4%

$2,276

$2,177

$2,156

$2,108

$2,444

Trust and

Inv Mgmt

Service

Charges

All Other

Mortgage

Payments

All Other

Mortgage

Service Charges

Trust and Inv Mgmt

Payments

2Q13

3Q13

4Q13

1Q14

2Q14

Visa Gain

-

$        

-

$        

-

$        

-

$        

214

$    

Total

-

$        

-

$        

-

$        

-

$        

214

$    

Notable Noninterest Income Items

17

2Q14 Earnings

Conference Call

Noninterest Expense

Noninterest Expense

Key Points

$ in millions

vs. 2Q13

Noninterest expense was higher by $196 million, or

7.7%, driven by:

•

Higher other expense due primarily to the FHA DOJ settlement

partially offset by lower costs related to investments in tax-

advantaged projects

•

Higher compensation expense (2.5% increase) due to the

impact of merit increases and higher staffing for risk and

compliance activities

•

Higher net occupancy and equipment expense (3.0% increase)

due to business initiatives and higher rent expense and

maintenance costs

•

Higher professional services expense (6.6% increase) due

mainly to mortgage servicing-related project costs

•

Lower employee benefits expense (7.2% decrease) driven by

lower pension costs

vs. 1Q14

Noninterest expense was higher by $209 million, or

8.2%, driven by:

•

Higher other expense due to the FHA DOJ settlement

•

Higher compensation expense (0.9% increase) due to merit

increases and seasonal contract labor

•

Higher professional services expense (16.9% increase) due to

higher mortgage servicing-related project costs

•

Higher marketing and business development expense (21.5%

increase) due to a charitable foundation contribution and the

timing of various marketing programs

•

Lower employee benefits expense (11.1% decrease) due to

seasonally lower payroll tax expense

Year-Over-Year Change

(1.7%)

(1.7%)

(0.1%)

3.0%

7.7%

$2,557

$2,565

$2,682

$2,544

$2,753

Occupancy

and Equipment

Prof Services,

Marketing

and PPS

All Other

Tech and Comm

Compensation

and Benefits

All Other

Tech and Communications

Prof Svcs, Marketing and PPS

Occupancy and Equipment

Compensation and Benefits

2Q13

3Q13

4Q13

1Q14

2Q14

FHA DOJ settlement

-

$        

-

$        

-

$        

-

$        

200

$    

Total

-

$        

-

$        

-

$        

-

$        

200

$    

Notable Noninterest Expense Items

18

2Q14 Earnings

Conference Call

Credit Quality

-

Commercial Loans

Average Loans and Net Charge-offs Ratios

Key Statistics

Comments

Continued new client growth led to 6.5% linked quarter loan growth and 13.7% year-over-year

growth; utilization rates improved modestly

Net

charge-offs

below

historic

norms

but

increased

due

to

both

higher

gross

charge-offs

and

slightly lower recoveries

Nonperforming loans and delinquencies were largely unchanged

2Q13

1Q14

2Q14

Average Loans

$61,507

$65,645

$69,920

30-89 Delinquencies

0.23%

0.25%

0.23%

90+ Delinquencies

0.10%

0.07%

0.06%

Nonperforming Loans

0.14%

0.25%

0.24%

$ in millions

19

2Q14 Earnings

Conference Call

Credit Quality

-

Commercial Leases

Average Loans and Net Charge-offs Ratios

Key Statistics

Comments

Commercial lease balances were down slightly

Net charge-offs remained at low levels

Nonperforming loans and delinquencies continued at modest levels

2Q13

1Q14

2Q14

Average Loans

$5,255

$5,189

$5,100

30-89 Delinquencies

0.74%

0.74%

0.75%

90+ Delinquencies

0.00%

0.00%

0.00%

Nonperforming Loans

0.27%

0.27%

0.31%

$ in millions

20

2Q14 Earnings

Conference Call

Credit Quality

-

Commercial Real Estate

Average Loans and Net Charge-offs Ratios

Key Statistics

Comments

Average loans increased 1.1% on a linked quarter basis and 6.9% year-over-year

Credit quality is stable at low levels; net recovery ratio of 0.04% marked the fifth consecutive quarter of

net recoveries

Nonperforming loans of 0.55% continued a downward trend

2Q13

1Q14

2Q14

Average Loans

$37,884

$40,050

$40,497

30-89 Delinquencies

0.23%

0.14%

0.14%

90+ Delinquencies

0.03%

0.06%

0.06%

Nonperforming Loans

1.11%

0.67%

0.55%

Performing TDRs*

$494

$359

$330

$ in millions

Investor

$20,687

Owner

Occupied

$11,314

Multi-family

$2,800

Retail

$553

Residential

Construction

$1,759

A&D

Construction

$592

Office

$866

Other

$1,926

* TDR = troubled debt  restructuring

21

2Q14 Earnings

Conference Call

Credit Quality

-

Residential Mortgage

Average Loans and Net Charge-offs Ratios

Key Statistics

Comments

Modest growth in high quality originations (weighted average FICO 759, weighted average LTV

72%), as average loans increased 0.4% over 1Q14

80% of the balances have been originated since the beginning of 2009, the origination quality

metrics and performance to date have significantly outperformed prior vintages with similar

seasoning

2Q13

1Q14

2Q14

Average Loans

$46,873

$51,584

$51,815

30-89 Delinquencies

0.78%

0.59%

0.48%

90+ Delinquencies

0.53%

0.64%

0.49%

Nonperforming Loans

1.43%

1.50%

1.57%

$ in millions

** Excludes GNMA loans, whose repayments are insured by the FHA or guaranteed by the Department of VA ($2,816 million 2Q14)

22

2Q14 Earnings

Conference Call

2Q13

1Q14

2Q14

Average Loans

$16,416

$17,407

$17,384

30-89 Delinquencies

1.17%

1.19%

1.13%

90+ Delinquencies

1.10%

1.21%

1.06%

Nonperforming Loans

0.65%

0.38%

0.29%

Credit Quality -

Credit Card

Average Loans and Net Charge-offs Ratios

Key Statistics

Comments

Average loans flat on a linked quarter basis; up 5.9% year-over-year

Delinquencies have stabilized near historically low levels

Nonperforming loans continued to decline

$ in millions

23

2Q14 Earnings

Conference Call

Credit Quality -

Home Equity

Average Loans and Net Charge-offs Ratios

Key Statistics

Comments

High-quality originations (weighted average FICO on commitments was 767, weighted average

CLTV

71%)

originated

primarily

through

the

retail

branch

network

to

existing

bank

customers

on

their primary residence

Net charge-offs ratio continued to decline on a linked quarter basis

2Q13

1Q14

2Q14

Average Loans

$15,989

$15,366

$15,327

30-89 Delinquencies

0.74%

0.57%

0.50%

90+ Delinquencies

0.25%

0.33%

0.26%

Nonperforming Loans

1.23%

1.09%

1.11%

Subprime: 2%

Wtd Avg LTV**: 90%

NCO: 6.01%

$ in millions

Prime: 95%

Wtd Avg LTV**: 72%

NCO: 0.50%

** LTV at origination

Other: 3%

Wtd Avg LTV**: 72%

NCO: 0.81%

24

2Q14 Earnings

Conference Call

Credit Quality -

Retail Leasing

Average Loans and Net Charge-offs Ratios

Key Statistics

Comments

Strong year-over-year growth (6.4%), driven by high-quality originations (weighted average FICO 771)

Delinquencies remained relatively stable at very low levels

Strong used auto values continued to contribute to historically low net charge-offs

2Q13

1Q14

2Q14

Average Loans

$5,653

$5,979

$6,014

30-89 Delinquencies

0.14%

0.16%

0.16%

90+ Delinquencies

0.00%

0.02%

0.00%

Nonperforming Loans

0.02%

0.02%

0.02%

$ in millions

* Manheim Used Vehicle Value Index source: www.manheimconsulting.com, January 1995 = 100, quarter value = average monthly ending

value

25

2Q14 Earnings

Conference Call

Credit Quality -

Other Retail

Average Loans and Net Charge-offs Ratios

Key Statistics

Comments

Auto

loan

growth

continued

to

offset

declines

in

student

lending

loan

balances

Net charge-offs and delinquencies remained low on a linked quarter and year-over-year

basis

2Q13

1Q14

2Q14

Average Loans

$25,224

$26,312

$26,587

30-89 Delinquencies

0.46%

0.40%

0.47%

90+ Delinquencies

0.14%

0.13%

0.11%

Nonperforming Loans

0.11%

0.08%

0.06%

Installment

$5,846

Auto Loans

$14,108

Revolving

Credit

$3,224

Student

Lending

$3,409

$ in millions

26

2Q14 Earnings

Conference Call

Credit Quality -

Auto Loans

Average Loans and Net Charge-offs Ratios

Key Statistics

Comments

Continued growth in auto loans driven by high-quality originations in the Indirect Channel

(weighted average FICO 763)

Net charge-offs and delinquencies remained at historically low levels

2Q13

1Q14

2Q14

Average Loans

$12,575

$13,815

$14,108

30-89 Delinquencies

0.30%

0.26%

0.38%

90+ Delinquencies

0.02%

0.03%

0.03%

Nonperforming Loans

0.02%

0.02%

0.01%

$ in millions

Auto Loans are included in Other Retail category

Direct: 7%

Wtd Avg FICO: 748

NCO: (.02%)

Indirect: 93%

Wtd Avg FICO: 758

NCO: 0.12%

27

2Q14 Earnings

Conference Call

Mortgage Repurchase

Mortgages Repurchased and Make-whole Payments

Mortgage Representation and Warranties Reserve

$ in millions

2Q14

1Q14

4Q13

3Q13

2Q13

Beginning Reserve

$75

$83

$176

$190

$233

Net Realized Losses

(2)

(10)

(63)

(13)

(16)

Change in Reserve

(4)

2

(30)

(1)

(27)

Ending Reserve

$69

$75

$83

$176

$190

Mortgages

repurchased

and make-whole

payments

$30

$36

$32

$42

$41

Repurchase activity lower than

peers due to:

•

Conservative credit and

underwriting culture

•

Disciplined origination process -

primarily conforming loans            

(

95%

sold

to

GSEs)

Do not participate in private

placement securitization market

Outstanding repurchase and

make-whole requests balance      

= $35 million

28

2Q14 Earnings

Conference Call

Non-GAAP Financial Measures

$ in millions

2Q14

1Q14

4Q13

3Q13

2Q13

Total equity

43,386

$   

42,743

$   

41,807

$   

41,552

$   

41,050

$   

Preferred stock

(4,756)

(4,756)

(4,756)

(4,756)

(4,756)

Noncontrolling interests

(686)

(689)

(694)

(1,420)

(1,367)

Goodwill (net of deferred tax liability) (1)

(8,548)

(8,352)

(8,343)

(8,319)

(8,317)

Intangible assets, other than mortgage servicing rights

(925)

(804)

(849)

(878)

(910)

Tangible common equity (a)

28,471

28,142

27,165

26,179

25,700

Tangible common equity (as calculated above)

28,471

28,142

27,165

26,179

25,700

Adjustments (2)

224

239

224

258

195

Common equity tier 1 capital estimated for the Basel III fully

implemented standardized and advanced approaches (b)

28,695

28,381

27,389

26,437

25,895

Tier 1 capital, determined in accordance with prescribed

regulatory requirements using Basel I definition

33,386

32,707

32,219

Preferred stock

(4,756)

(4,756)

(4,756)

Noncontrolling interests, less preferred stock not eligible for Tier 1 capital

(688)

(686)

(685)

Tier 1 common equity using Basel I definition (c)

27,942

27,265

26,778

*

Preliminary data.  Subject to change prior to filings with applicable regulatory agencies. 

(1) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements beginning March 31, 2014.

(2) Includes net losses on cash flow hedges included in accumulated other comprehensive income and other adjustments.

(3)

Beginning March 31, 2014, calculated under the Basel III transitional standardized approach; all other periods calculated under Basel I.

(4) Includes higher risk-weighting for unfunded loan commitments, investment securities, residential mortgages, mortgage servicing rights and other adjustments.

(5)

Primarily reflects higher risk-weighting for mortgage servicing rights.

29

2Q14 Earnings

Conference Call

Non-GAAP Financial Measures

$ in millions

2Q14

1Q14

4Q13

3Q13

2Q13

Total assets

389,065

$ 

371,289

$ 

364,021

$ 

360,681

$ 

353,415

$ 

Goodwill (net of deferred tax liability) (1)

(8,548)

(8,352)

(8,343)

(8,319)

(8,317)

Intangible assets, other than mortgage servicing rights

(925)

(804)

(849)

(878)

(910)

Tangible assets (d)

379,592

362,133

354,829

351,484

344,188

Risk-weighted assets, determined in accordance with prescribed

regulatory requirements (3)(e)

309,929

*

302,841

297,919

293,155

289,613

Adjustments (4)

12,753

*

13,238

13,712

13,473

12,476

Risk-weighted assets estimated for the Basel III fully implemented

standardized approach (f)

322,682

*

316,079

311,631

306,628

302,089

Risk-weighted assets, determined in accordance with prescribed

transitional advanced approaches regulatory requirements

241,929

*

Adjustments (5)

3,383

*

Risk-weighted assets estimated for the Basel III fully implemented

245,312

*

advanced approaches (g)

Ratios *

Tangible common equity to tangible assets (a)/(d)

7.5

%

7.8

%

7.7

%

7.4

%

7.5

%

Tangible common equity to risk-weighted assets (a)/(e)

9.2

9.3

9.1

8.9

8.9

Tier 1 common equity to risk-weighted assets using Basel I definition (c)/(e)

--

--

9.4

9.3

9.2

Common equity tier 1 capital to risk-weighted assets estimated for the

Basel III fully implemented standardized approach (b)/(f)

8.9

9.0

8.8

8.6

8.6

Common equity tier 1 capital to risk-weighted assets estimated for the

Basel III fully implemented advanced approaches (b)/(g)

11.7

*

Preliminary data.  Subject to change prior to filings with applicable regulatory agencies. 

(1) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements beginning March 31, 2014.

(2) Includes net losses on cash flow hedges included in accumulated other comprehensive income and other adjustments.

(3)

Beginning March 31, 2014, calculated under the Basel III transitional standardized approach; all other periods calculated under Basel I.

(4) Includes higher risk-weighting for unfunded loan commitments, investment securities, residential mortgages, mortgage servicing rights and other adjustments.

(5)

Primarily reflects higher risk-weighting for mortgage servicing rights.

30

U.S. Bancorp

2Q14 Earnings

Conference Call

U.S. Bancorp

2Q14 Earnings

Conference Call

July 16, 2014