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): October 15, 2015

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 October 15, 2015, U.S. Bancorp (the “Company”) issued a press release reporting quarter ended September 30, 2015 results, and posted on its website its 3Q15 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 3Q15 Earnings Conference Call Presentation is included as Exhibit 99.2 hereto and is incorporated herein by reference. The information included in the 3Q15 Earnings Conference Call Presentation is considered to be “furnished” under the Securities Exchange Act of 1934. The press release and 3Q15 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 October 15, 2015, deemed “filed” under the Securities Exchange Act of 1934.

99.2 3Q15 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: October 15, 2015

EX-99.1

Exhibit 99.1

	News Release
	Contacts: Dana Ripley Media (612) 303-3167	Sean O’Connor Investors/Analysts (612) 303-0778

U.S. BANCORP REPORTS THIRD QUARTER 2015 EARNINGS

Record Earnings Per Diluted Common Share

Return on average assets of 1.44 percent and average common equity of 14.1 percent

Returned 80 percent of third quarter earnings to shareholders

MINNEAPOLIS, October 15, 2015 — U.S. Bancorp (NYSE: USB) today reported net income of $1,489 million for the third quarter of 2015, or $0.81 per diluted common share, compared with $1,471 million, or $0.78 per diluted common share, in the third quarter of 2014.

Highlights for the third quarter of 2015 included:

Ø Return on average assets of 1.44 percent and average common equity of 14.1 percent

Ø Growth in average total loans of 1.3 percent on a linked quarter basis and 3.8 percent over the third quarter of 2014 (excluding student loans, which were transferred to held for sale at the end of the first quarter of 2015 and returned to held for investment on September 1, 2015)

¡ Growth in average commercial and commercial real estate revolving commitments of 1.8 percent over the prior quarter and 8.9 percent year-over-year

¡ Growth in average total commercial loans of 1.7 percent over the second quarter of 2015 and 9.5 percent over the third quarter of 2014

¡ Growth in total other retail loans of 1.9 percent over the second quarter of 2015 and 5.6 percent over the third quarter of 2014 (excluding student loans)

Ø Growth in average total deposits of 1.4 percent on a linked quarter basis and 6.9 percent over the third quarter of 2014

¡ Growth in average low cost deposits, including noninterest-bearing and total savings deposits, of 2.5 percent on a linked quarter basis and 11.4 percent year-over-year

Ø Net interest income growth of 2.7 percent year-over-year and 1.8 percent linked quarter

¡ Growth in average earnings assets of 0.8 percent on a linked quarter basis and 6.6 percent year-over-year, including strong retail loan growth in the third quarter 2015

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¡ Net interest margin stable at 3.04 percent for the third quarter of 2015 compared with the prior quarter 3.03 percent

Ø Positive trends in payments-related fee revenue including year-over-year increases in credit and debit card revenue of 7.2 percent and merchant processing services of 8.5 percent (excluding the impact of foreign currency rate changes)

Ø Decline in net charge-offs of 13.1 percent from the third quarter of 2014 and 1.4 percent on a linked quarter basis

Ø Decreases in nonperforming assets of 18.5 percent on a year-over-year basis and 0.6 percent on a linked quarter basis

Ø Capital generation resulted in a return of 80 percent of third quarter earnings to shareholders through dividends and the buyback of 16 million common shares, and continued to reinforce capital position. Ratios at September 30, 2015 were:

¡ Common equity tier 1 capital to risk-weighted assets estimated for the Basel III fully implemented standardized approach was 9.2 percent and for the Basel III fully implemented advanced approaches was 12.4 percent.

EARNINGS SUMMARY																Table 1
($ in millions, except per-share data)	3Q 2015		2Q 2015		3Q 2014		Percent Change 3Q15 vs 2Q15		Percent Change 3Q15 vs 3Q14		YTD 2015		YTD 2014		Percent Change
Net income attributable to U.S. Bancorp		$1,489		$1,483		$1,471		.4		1.2		$4,403		$4,363		.9
Diluted earnings per common share		$.81		$.80		$.78		1.3		3.8		$2.36		$2.29		3.1
Return on average assets (%)		1.44		1.46		1.51						1.45		1.56
Return on average common equity (%)		14.1		14.3		14.5						14.1		14.7
Net interest margin (%)		3.04		3.03		3.16						3.05		3.26
Efficiency ratio (%) (a)		53.9		53.2		52.4						53.8		52.8
Tangible efficiency ratio (%) (a)		53.1		52.3		51.3						53.0		51.8
Dividends declared per common share		$.255		$.255		$.245		—		4.1		$.755		$.720		4.9
Book value per common share (period end)		$22.99		$22.51		$21.38		2.1		7.5
(a)    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 for tangible efficiency ratio, intangible amortization.

Net income attributable to U.S. Bancorp was $1,489 million for the third quarter of 2015, 1.2 percent higher than the $1,471 million for the third quarter of 2014, and 0.4 percent higher than the $1,483 million

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for the second quarter of 2015. Diluted earnings per common share of $0.81 in the third quarter of 2015 were $0.03 higher than the third quarter of 2014 and $0.01 higher than the previous quarter. The increase in net income year-over-year was due to higher net interest income and noninterest income, along with a reduction in the provision for credit losses, partially offset by an increase in noninterest expense. The increase in net income on a linked quarter basis was primarily due to increases in net interest income and noninterest income, partially offset by higher noninterest expense.

U.S. Bancorp Chairman, President and Chief Executive Officer Richard K. Davis said, “I am proud of the financial performance our 67,000 employees delivered in the third quarter. Because of their hard work and dedication, we are operating from a position of strength as we grow revenue, manage expenses, seek to exceed customer expectations, and create value for shareholders in a demanding marketplace. U.S. Bancorp achieved record diluted earnings per share (EPS) of $0.81 and continued to deliver industry-leading performance measures, with a return on average assets (ROA) of 1.44 percent, return on average common equity (ROE) of 14.1 percent, and an efficiency ratio of 53.9 percent. In addition, we returned 80 percent of our earnings to shareholders through dividends and share buybacks in the third quarter.”

Davis continued, “While the near-term external environment remains uncertain for the banking industry, we have built steady momentum throughout the year by focusing on activities that are within our control. We grew total loans 1.3 percent over the second quarter, excluding student loans, and total deposits increased 6.9 percent year-over-year, which highlights the comfort our customers have in trusting one of the highest rated banks in the world, as recently reflected in a debt rating upgrade. Growth trends in our Payment Services franchise have improved, highlighting the strong emphasis we are placing in payments businesses. We recently announced a new co-brand relationship with the Auto Club Trust, which has more than nine million members. As part of that partnership, we also agreed to acquire an approximately $500 million credit card portfolio. In addition, we solidified U.S. Bank’s leadership role in mobile payments by participating in the Android Pay and Samsung Pay roll-outs.”

“Overall, our actions to generate growth in our balance sheet and revenues, combined with our deliberate efforts to optimize our expense management initiatives, resulted in a solid quarter and put us on a positive forward-looking trajectory. As U.S. Bancorp pursues its vision for the future, we are focused on sustainable growth. We continue to make prudent long-term investments to protect our industry leading competitive positions and help our customers build financially secure futures.”

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INCOME STATEMENT HIGHLIGHTS																							Table 2
(Taxable-equivalent basis, $ in millions, except per-share data)	3Q 2015			2Q 2015			3Q 2014			Percent Change 3Q15 vs 2Q15			Percent Change 3Q15 vs 3Q14			YTD 2015			YTD 2014			Percent Change
Net interest income		$2,821			$2,770			$2,748			1.8			2.7			$8,343			$8,198			1.8
Noninterest income		2,326			2,272			2,242			2.4			3.7			6,752			6,794			(.6	)
Total net revenue		5,147			5,042			4,990			2.1			3.1			15,095			14,992			.7
Noninterest expense		2,775			2,682			2,614			3.5			6.2			8,122			7,911			2.7
Income before provision and taxes		2,372			2,360			2,376			.5			(.2	)		6,973			7,081			(1.5	)
Provision for credit losses		282			281			311			.4			(9.3	)		827			941			(12.1	)
Income before taxes		2,090			2,079			2,065			.5			1.2			6,146			6,140			.1
Taxable-equivalent adjustment		53			54			56			(1.9	)		(5.4	)		161			167			(3.6	)
Applicable income taxes		534			528			523			1.1			2.1			1,541			1,566			(1.6	)
Net income		1,503			1,497			1,486			.4			1.1			4,444			4,407			.8
Net (income) loss attributable to noncontrolling interests		(14	)		(14	)		(15	)		—			6.7			(41	)		(44	)		6.8
Net income attributable to U.S. Bancorp		$1,489			$1,483			$1,471			.4			1.2			$4,403			$4,363			.9
Net income applicable to U.S. Bancorp common shareholders		$1,422			$1,417			$1,405			.4			1.2			$4,204			$4,163			1.0
Diluted earnings per common share		$.81			$.80			$.78			1.3			3.8			$2.36			$2.29			3.1

Net income attributable to U.S. Bancorp for the third quarter of 2015 was $18 million (1.2 percent) higher than the third quarter of 2014, and $6 million (0.4 percent) higher than the second quarter of 2015. The increase in net income year-over-year was due to higher net interest income, primarily due to growth in earning assets, and noninterest income, primarily driven by increases in commercial products, payments and trust and investment management fee revenue. These increases were offset by an increase in noninterest expense, which included higher compensation and employee benefits expense and other costs related to risk and compliance activities. The increase in net income on a linked quarter basis was primarily due to increases in net interest income and noninterest income, partially offset by higher noninterest expense. As previously disclosed in recent weeks, the third quarter of 2015 included several unrelated items that, combined, were relatively neutral to earnings.

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NET INTEREST INCOME																						Table 3
(Taxable-equivalent basis; $ in millions)	3Q 2015			2Q 2015			3Q 2014			Change 3Q15 vs 2Q15			Change 3Q15 vs 3Q14			YTD 2015			YTD 2014		Change
Components of net interest income
Income on earning assets		$3,171			$3,123			$3,114			$48			$57			$9,410			$9,296		$114
Expense on interest-bearing liabilities		350			353			366			(3	)		(16	)		1,067			1,098		(31	)
Net interest income		$2,821			$2,770			$2,748			$51			$73			$8,343			$8,198		$145
Average yields and rates paid
Earning assets yield		3.42	%		3.42	%		3.58	%		—	%		(.16	)%		3.44	%		3.69%		(.25)%
Rate paid on interest-bearing liabilities		.52			.52			.57			—			(.05	)		.53			.60		(.07)
Gross interest margin		2.90	%		2.90	%		3.01	%		—	%		(.11	)%		2.91	%		3.09%		(.18)%
Net interest margin		3.04	%		3.03	%		3.16	%		.01	%		(.12	)%		3.05	%		3.26%		(.21)%
Average balances
Investment securities (a)		$103,943			$102,391			$93,141			$1,552			$10,802			$102,361			$87,687		$14,674
Loans		250,536			246,560			243,867			3,976			6,669			248,358			240,098		8,260
Earning assets		369,265			366,428			346,422			2,837			22,843			365,543			336,287		29,256
Interest-bearing liabilities		269,479			270,573			254,501			(1,094	)		14,978			269,317			246,614		22,703
(a) Excludes unrealized gain (loss)

Net Interest Income

Net interest income on a taxable-equivalent basis in the third quarter of 2015 was $2,821 million, an increase of $73 million (2.7 percent) over the third quarter of 2014. The increase was the result of growth in average earning assets, partially offset by a continued shift in loan portfolio mix and lower reinvestment rates on investment securities. Average earning assets were $22.8 billion (6.6 percent) higher than the third quarter of 2014, driven by increases of $6.7 billion (2.7 percent) in average total loans and $10.8 billion (11.6 percent) in average investment securities. Net interest income increased $51 million (1.8 percent) on a linked quarter basis, primarily due to higher average total loans and an additional day in the current quarter relative to the second quarter of 2015. Average total loans were $3.1 billion (1.3 percent) higher on a linked quarter basis, excluding student loans.

The net interest margin in the third quarter of 2015 was 3.04 percent, compared with 3.16 percent in the third quarter of 2014, and 3.03 percent in the second quarter of 2015. The decrease in the net interest margin on a year-over-year basis primarily reflected a change in loan portfolio mix as well as growth in the investment portfolio at lower average rates and lower reinvestment rates on investment securities. On a linked quarter basis, the increase in the net interest margin was principally due to earning assets growth and

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continued deposit growth, partially offset by growth in lower rate investment securities along with lower investment portfolio reinvestment rates.

Investment Securities

Average investment securities in the third quarter of 2015 were $10.8 billion (11.6 percent) higher year-over-year and $1.6 billion (1.5 percent) higher than the prior quarter. These increases were primarily due to purchases of U.S. government agency-backed securities, net of prepayments and maturities, to support regulatory liquidity coverage ratio requirements.

AVERAGE LOANS																						Table 4
($ in millions)	3Q 2015			2Q 2015		3Q 2014			Percent Change 3Q15 vs 2Q15			Percent Change 3Q15 vs 3Q14			YTD 2015			YTD 2014			Percent Change
Commercial		$79,486			$77,932		$72,190			2.0			10.1			$77,880			$69,276			12.4
Lease financing		5,218			5,321		5,155			(1.9	)		1.2			5,287			5,148			2.7
Total commercial		84,704			83,253		77,345			1.7			9.5			83,167			74,424			11.7
Commercial mortgages		32,083			32,499		31,965			(1.3	)		.4			32,563			32,005			1.7
Construction and development		10,233			9,947		8,874			2.9			15.3			9,913			8,460			17.2
Total commercial real estate		42,316			42,446		40,839			(.3	)		3.6			42,476			40,465			5.0
Residential mortgages		51,831			51,114		51,994			1.4			(.3	)		51,458			51,799			(.7	)
Credit card		17,944			17,613		17,753			1.9			1.1			17,794			17,516			1.6
Retail leasing		5,480			5,696		5,991			(3.8	)		(8.5	)		5,663			5,995			(5.5	)
Home equity and second mortgages		16,083			15,958		15,704			.8			2.4			15,980			15,467			3.3
Other		27,286			25,415		27,003			7.4			1.0			26,768			26,636			.5
Total other retail (a)		48,849			47,069		48,698			3.8			.3			48,411			48,098			.7
Total loans, excluding covered loans		245,644			241,495		236,629			1.7			3.8			243,306			232,302			4.7
Covered loans		4,892			5,065		7,238			(3.4	)		(32.4	)		5,052			7,796			(35.2	)
Total loans		$250,536			$246,560		$243,867			1.6			2.7			$248,358			$240,098			3.4
(a) The Company transferred all of its student loans to loans held for sale at the end of the first quarter of 2015. The portfolio was subsequently transferred back to held for investment effective September 1, 2015.
Total other retail		$48,849			$47,069		$48,698			3.8			.3			$48,411			$48,098			.7
Less: Student loans		(889	)		—		(3,296	)								(1,304	)		(3,410	)
Total other retail excluding student loans		$47,960			$47,069		$45,402			1.9			5.6			$47,107			$44,688			5.4

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Loans

Average total loans were $6.7 billion (2.7 percent) higher in the third quarter of 2015 than the third quarter of 2014, ($9.1 billion, 3.8 percent, excluding student loans), driven by growth in total commercial loans (9.5 percent), total other retail loans (5.6 percent excluding student loans), total commercial real estate (3.6 percent) and credit card (1.1 percent). These increases were partially offset by declines in covered loans (32.4 percent), including the impact of the expiration of the loss sharing agreements on commercial and commercial real estate assets at the end of 2014, and residential mortgages (0.3 percent). Average total loans were $4.0 billion (1.6 percent) higher in the third quarter of 2015 than the second quarter of 2015. Excluding student loans, average total loans were $3.1 billion (1.3 percent) higher in the third quarter of 2015 than the second quarter of 2015. The increase was driven by growth in total commercial loans (1.7 percent), total other retail loans (1.9 percent excluding student loans), residential mortgages (1.4 percent) and credit card (1.9 percent).

AVERAGE DEPOSITS																		Table 5
($ in millions)	3Q 2015		2Q 2015		3Q 2014		Percent Change 3Q15 vs 2Q15			Percent Change 3Q15 vs 3Q14			YTD 2015		YTD 2014		Percent Change
Noninterest-bearing deposits	$	80,940	$	77,347	$	74,126		4.6			9.2		$	77,623	$	72,274		7.4
Interest-bearing savings deposits
Interest checking		56,888		55,205		54,454		3.0			4.5			55,592		52,928		5.0
Money market savings		80,338		79,898		66,250		.6			21.3			78,065		62,314		25.3
Savings accounts		37,480		37,071		34,615		1.1			8.3			36,866		33,940		8.6
Total of savings deposits		174,706		172,174		155,319		1.5			12.5			170,523		149,182		14.3
Time deposits less than $100,000		9,549		9,933		11,045		(3.9	)		(13.5	)		9,961		11,151		(10.7	)
Time deposits greater than $100,000		24,497		26,290		30,518		(6.8	)		(19.7	)		26,566		31,055		(14.5	)
Total interest-bearing deposits		208,752		208,397		196,882		.2			6.0			207,050		191,388		8.2
Total deposits	$	289,692	$	285,744	$	271,008		1.4			6.9		$	284,673	$	263,662		8.0

Deposits

Average total deposits for the third quarter of 2015 were $18.7 billion (6.9 percent) higher than the third quarter of 2014. Average noninterest-bearing deposits increased $6.8 billion (9.2 percent) year-over-year, mainly in Wholesale Banking and Commercial Real Estate and Consumer and Small Business Banking. Average total savings deposits were $19.4 billion (12.5 percent) higher year-over-year, the result of growth in corporate trust, Wholesale Banking and Commercial Real Estate, and Consumer and Small Business

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Banking balances. Growth in Consumer and Small Business Banking total savings deposits included net new account growth of 3.1 percent. Average time deposits less than $100,000 were $1.5 billion (13.5 percent) lower due to maturities, while average time deposits greater than $100,000 decreased $6.0 billion (19.7 percent). Time deposits greater than $100,000 are primarily managed as an alternative to other funding sources, such as wholesale borrowing, based largely on funding needs and relative pricing.

Average total deposits increased $3.9 billion (1.4 percent) over the second quarter of 2015. Average noninterest-bearing deposits increased $3.6 billion (4.6 percent) on a linked quarter basis, due to higher balances in Wholesale Banking and Commercial Real Estate, corporate trust, and Consumer and Small Business Banking. Average total savings deposits increased $2.5 billion (1.5 percent), reflecting increases in Wholesale Banking and Commercial Real Estate and Consumer and Small Business Banking. Compared with the second quarter of 2015, average time deposits less than $100,000 decreased $384 million (3.9 percent) due to maturities. Average time deposits greater than $100,000, which are managed based on funding needs, decreased $1.8 billion (6.8 percent) on a linked quarter basis.

NONINTEREST INCOME																					Table 6
($ in millions)	3Q 2015			2Q 2015		3Q 2014			Percent Change 3Q15 vs 2Q15			Percent Change 3Q15 vs 3Q14			YTD 2015			YTD 2014		Percent Change
Credit and debit card revenue	$	269		$	266	$	251			1.1			7.2		$	776		$	749		3.6
Corporate payment products revenue		190			178		195			6.7			(2.6	)		538			550		(2.2	)
Merchant processing services		400			395		387			1.3			3.4			1,154			1,127		2.4
ATM processing services		81			80		81			1.3			—			239			241		(.8	)
Trust and investment management fees		329			334		315			(1.5	)		4.4			985			930		5.9
Deposit service charges		185			174		185			6.3			—			520			513		1.4
Treasury management fees		143			142		136			.7			5.1			422			409		3.2
Commercial products revenue		231			214		209			7.9			10.5			645			635		1.6
Mortgage banking revenue		224			231		260			(3.0	)		(13.8	)		695			774		(10.2	)
Investment products fees		46			48		49			(4.2	)		(6.1	)		141			142		(.7	)
Securities gains (losses), net		(1	)		—		(3	)		nm			66.7			(1	)		2		nm
Other		229			210		177			9.0			29.4			638			722		(11.6	)
Total noninterest income	$	2,326		$	2,272	$	2,242			2.4			3.7		$	6,752		$	6,794		(.6	)

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Noninterest Income

Third quarter noninterest income was $2,326 million, which was $84 million (3.7 percent) higher than the third quarter of 2014 and $54 million (2.4 percent) higher than the second quarter of 2015. The year-over-year increase in noninterest income was primarily due to a third quarter 2015 gain from the sale of Visa Inc. Class B common stock of approximately $135 million (“Visa sale”), partially offset by a $58 million market valuation adjustment to write down the value of student loans previously held for sale as a result of recent disruption in the student loan securitization market (“student loan market adjustment”). These loans were subsequently transferred back to held for investment. The remaining increase in noninterest income was principally due to higher commercial products revenue, credit and debit card revenue, merchant processing services, and trust and investment management fees, partially offset by a decrease in mortgage banking revenue, primarily due to an unfavorable change in the valuation of mortgage servicing rights (“MSRs”), net of hedging activities. Commercial products revenue increased $22 million (10.5 percent) due to a higher volume of tax-advantaged project fees and an increase in bond underwriting fees. Credit and debit card revenue increased $18 million (7.2 percent) due to higher transaction volumes. Merchant processing services increased $13 million (3.4 percent) as a result of higher transaction volumes, account growth and equipment sales to merchants related to new chip card technology requirements. Adjusted for the approximate $20 million impact of foreign currency rate changes, merchant processing services growth would have been approximately 8.5 percent. Trust and investment management fees increased $14 million (4.4 percent), reflecting the benefits of the Company’s investments in corporate trust and fund services businesses, as well as account growth and improved market conditions.

Noninterest income was $54 million (2.4 percent) higher in the third quarter of 2015 than the second quarter of 2015, principally due to higher other income and commercial products revenue, as well as seasonally higher corporate payment products revenue, partially offset by lower mortgage banking revenue. The increase in other income of $19 million (9.0 percent) was primarily driven by changes in equity investment income including the Visa sale, partially offset by the student loan market adjustment and a decrease in trading revenue due to lower customer volumes and pricing. Commercial products revenue increased $17 million (7.9 percent) primarily due to higher wholesale transaction activity, including loan and bond underwriting fees. Corporate payment products revenue increased $12 million (6.7 percent) and deposit service charges increased $11 million (6.3 percent), principally due to seasonally higher transaction volumes.

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Partially offsetting these increases was a decrease in mortgage banking revenue of $7 million (3.0 percent), primarily due to lower origination revenue.

NONINTEREST EXPENSE																		Table 7
($ in millions)	3Q 2015		2Q 2015		3Q 2014		Percent Change 3Q15 vs 2Q15			Percent Change 3Q15 vs 3Q14			YTD 2015		YTD 2014		Percent Change
Compensation	$	1,225	$	1,196	$	1,132		2.4			8.2		$	3,600	$	3,372		6.8
Employee benefits		285		293		250		(2.7	)		14.0			895		796		12.4
Net occupancy and equipment		251		247		249		1.6			.8			745		739		.8
Professional services		115		106		102		8.5			12.7			298		282		5.7
Marketing and business development		99		96		78		3.1			26.9			265		253		4.7
Technology and communications		222		221		219		.5			1.4			657		644		2.0
Postage, printing and supplies		77		64		81		20.3			(4.9	)		223		242		(7.9	)
Other intangibles		42		43		51		(2.3	)		(17.6	)		128		148		(13.5	)
Other		459		416		452		10.3			1.5			1,311		1,435		(8.6	)
Total noninterest expense	$	2,775	$	2,682	$	2,614		3.5			6.2		$	8,122	$	7,911		2.7

Noninterest Expense

Third quarter noninterest expense was $2,775 million, which includes the impact of approximately $60 million of elevated third quarter 2015 expenses related to mortgage-related compliance and the company-wide talent upgrade costs. Third quarter 2015 was $161 million (6.2 percent) higher than the third quarter of 2014 including a $93 million (8.2 percent) increase in compensation expense, reflecting the impact of merit increases and higher staffing for risk and compliance activities, and higher employee benefits expense of $35 million (14.0 percent), mainly due to higher pension costs. In addition, marketing and business development expense was $21 million (26.9 percent) higher, primarily due to various marketing programs in Payment Services and Consumer and Small Business Banking.

Noninterest expense increased $93 million (3.5 percent) on a linked quarter basis. Other expense increased $43 million (10.3 percent) due primarily to mortgage servicing and talent upgrade costs in addition to an increase in tax credit amortization. Additionally, compensation expense increased $29 million (2.4 percent) reflecting the impact of an additional day in the current quarter relative to the prior quarter and increases in variable compensation. The $13 million (20.3 percent) increase in postage, printing and supplies was primarily due to a second quarter 2015 reimbursement from a business partner.

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Provision for Income Taxes

The provision for income taxes for the third quarter of 2015 resulted in a tax rate on a taxable-equivalent basis of 28.1 percent (effective tax rate of 26.2 percent), compared with 28.0 percent (effective tax rate of 26.0 percent) in the third quarter of 2014, and 28.0 percent (effective tax rate of 26.1 percent) in the second quarter of 2015.

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ALLOWANCE FOR CREDIT LOSSES																										Table 8
($ in millions)	3Q						2Q						1Q						4Q						3Q
	2015			% (b)			2015			% (b)			2015			% (b)			2014			% (b)			2014			% (b)
Balance, beginning of period	$	4,326					$	4,351					$	4,375					$	4,414					$	4,449
Net charge-offs
Commercial		68			.34			39			.20			40			.21			48			.26			52			.29
Lease financing		3			.23			3			.23			3			.23			(2	)		(.15	)		6			.46
Total commercial		71			.33			42			.20			43			.21			46			.23			58			.30
Commercial mortgages		—			—			4			.05			(1	)		(.01	)		(3	)		(.04	)		1			.01
Construction and development		(11	)		(.43	)		(3	)		(.12	)		(17	)		(.72	)		(7	)		(.30	)		3			.13
Total commercial real estate		(11	)		(.10	)		1			.01			(18	)		(.17	)		(10	)		(.10	)		4			.04
Residential mortgages		25			.19			33			.26			35			.28			39			.30			42			.32
Credit card		153			3.38			169			3.85			163			3.71			160			3.53			158			3.53
Retail leasing		2			.14			1			.07			1			.07			1			.07			—			—
Home equity and second mortgages		7			.17			11			.28			14			.36			17			.43			24			.61
Other		45			.65			39			.62			41			.60			52			.76			49			.72
Total other retail		54			.44			51			.43			56			.46			70			.57			73			.59
Total net charge-offs, excluding covered loans		292			.47			296			.49			279			.47			305			.51			335			.56
Covered loans		—			—			—			—			—			—			3			.17			1			.05
Total net charge-offs		292			.46			296			.48			279			.46			308			.50			336			.55
Provision for credit losses		282						281						264						288						311
Other changes (a)		(10	)					(10	)					(9	)					(19	)					(10	)
Balance, end of period	$	4,306					$	4,326					$	4,351					$	4,375					$	4,414
Components
Allowance for loan losses	$	3,965					$	4,013					$	4,023					$	4,039					$	4,065
Liability for unfunded credit commitments		341						313						328						336						349
Total allowance for credit losses	$	4,306					$	4,326					$	4,351					$	4,375					$	4,414
Gross charge-offs	$	372					$	380					$	383					$	415					$	410
Gross recoveries	$	80					$	84					$	104					$	107					$	74
Allowance for credit losses as a percentage of
Period-end loans, excluding covered loans		1.71						1.76						1.79						1.78						1.81
Nonperforming loans, excluding covered loans		347						348						321						297						291
Nonperforming assets, excluding covered assets		280						279						261						245						245
Period-end loans		1.69						1.74						1.77						1.77						1.80
Nonperforming loans		347						349						322						298						282
Nonperforming assets		275						274						257						242						230
(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, and the impact of any loan sales.
(b)    Annualized and calculated on average loan balances

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Credit Quality

The Company’s provision for credit losses for the third quarter of 2015 was $282 million, which was relatively flat compared with the prior quarter and $29 million (9.3 percent) lower than the third quarter of 2014. The provision for credit losses was lower than net charge-offs by $10 million in the third quarter of 2015, $15 million in the second quarter of 2015, and $25 million in the third quarter of 2014. Total net charge-offs in the third quarter of 2015 were $292 million, compared with $296 million in the second quarter of 2015, and $336 million in the third quarter of 2014. Net charge-offs were relatively flat on a linked quarter basis, while the $44 million (13.1 percent) decrease in net charge-offs on a year-over-year basis reflected improvements in total other retail, residential mortgages, and construction and development. Given current economic conditions, the Company expects the level of net charge-offs to increase modestly in the fourth quarter of 2015.

The allowance for credit losses was $4,306 million at September 30, 2015, compared with $4,326 million at June 30, 2015, and $4,414 million at September 30, 2014. The ratio of the allowance for credit losses to period-end loans was 1.69 percent at September 30, 2015, compared with 1.74 percent at June 30, 2015, and 1.80 percent at September 30, 2014. The ratio of the allowance for credit losses to nonperforming loans was 347 percent at September 30, 2015, compared with 349 percent at June 30, 2015, and 282 percent at September 30, 2014.

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DELINQUENT LOAN RATIOS AS A PERCENT OF ENDING LOAN BALANCES										Table 9
(Percent)
	Sep 30 2015		Jun 30 2015		Mar 31 2015		Dec 31 2014		Sep 30 2014
Delinquent loan ratios - 90 days or more past due excluding nonperforming loans
Commercial		.05		.05		.05		.05		.05
Commercial real estate		.05		.05		.07		.05		.03
Residential mortgages		.33		.30		.33		.40		.41
Credit card		1.10		1.03		1.19		1.13		1.10
Other retail		.14		.14		.15		.15		.16
Total loans, excluding covered loans		.20		.19		.22		.23		.22
Covered loans		6.57		6.66		7.01		7.48		6.10
Total loans		.32		.32		.36		.38		.39
Delinquent loan ratios - 90 days or more past due including nonperforming loans
Commercial		.25		.16		.16		.19		.27
Commercial real estate		.39		.46		.58		.65		.62
Residential mortgages		1.73		1.80		1.95		2.07		2.02
Credit card		1.16		1.12		1.32		1.30		1.32
Other retail		.47		.51		.55		.53		.53
Total loans, excluding covered loans		.70		.70		.77		.83		.84
Covered loans		6.80		6.88		7.25		7.74		7.34
Total loans		.81		.82		.91		.97		1.03

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ASSET QUALITY										Table 10
($ in millions)
	Sep 30 2015		Jun 30 2015		Mar 31 2015		Dec 31 2014		Sep 30 2014
Nonperforming loans
Commercial		$157		$78		$74		$99		$161
Lease financing		12		12		13		13		12
Total commercial		169		90		87		112		173
Commercial mortgages		105		116		142		175		147
Construction and development		39		59		75		84		94
Total commercial real estate		144		175		217		259		241
Residential mortgages		735		769		825		864		841
Credit card		12		16		22		30		40
Other retail		171		178		187		187		184
Total nonperforming loans, excluding covered loans		1,231		1,228		1,338		1,452		1,479
Covered loans		11		11		12		14		88
Total nonperforming loans		1,242		1,239		1,350		1,466		1,567
Other real estate (a)		276		287		293		288		275
Covered other real estate (a)		31		35		37		37		72
Other nonperforming assets		18		16		16		17		9
Total nonperforming assets (b)		$1,567		$1,577		$1,696		$1,808		$1,923
Total nonperforming assets, excluding covered assets		$1,525		$1,531		$1,647		$1,757		$1,763
Accruing loans 90 days or more past due, excluding covered loans		$510		$469		$521		$550		$532
Accruing loans 90 days or more past due		$825		$801		$880		$945		$962
Performing restructured loans, excluding GNMA and covered loans		$2,746		$2,815		$2,684		$2,832		$2,818
Performing restructured GNMA and covered loans		$2,031		$2,111		$2,186		$2,273		$2,685
Nonperforming assets to loans plus ORE, excluding covered assets (%)		.61		.63		.68		.72		.74
Nonperforming assets to loans plus ORE (%)		.61		.63		.69		.73		.78
(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 decreased on a linked quarter and year-over-year basis to $1,567 million at September 30, 2015, compared with $1,577 million at June 30, 2015, and $1,923 million at September 30, 2014. The ratio of nonperforming assets to loans and other real estate was 0.61 percent at September 30, 2015, compared with 0.63 percent at June 30, 2015, and 0.78 percent at September 30, 2014. The decrease in nonperforming assets on a year-over-year basis was driven primarily by reductions in the commercial real estate portfolios and residential mortgages as economic conditions continued to slowly improve. Accruing loans 90 days or more past due were $825 million ($510 million excluding covered loans) at September 30,

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2015, compared with $801 million ($469 million excluding covered loans) at June 30, 2015, and $962 million ($532 million excluding covered loans) at September 30, 2014. The Company expects total nonperforming assets to remain relatively stable in the fourth quarter of 2015.

COMMON SHARES														Table 11
(Millions)	3Q 2015			2Q 2015			1Q 2015			4Q 2014			3Q 2014
Beginning shares outstanding		1,767			1,780			1,786			1,795			1,809
Shares issued for stock incentive plans, acquisitions and other corporate purposes		3			1			6			2			2
Shares repurchased		(16	)		(14	)		(12	)		(11	)		(16	)
Ending shares outstanding		1,754			1,767			1,780			1,786			1,795

Capital Management

Total U.S. Bancorp shareholders’ equity was $45.1 billion at September 30, 2015, compared with $44.5 billion at June 30, 2015, and $43.1 billion at September 30, 2014. During the third quarter, the Company returned 80 percent of third quarter earnings to shareholders, including $448 million in common stock dividends and $688 million of repurchased common stock.

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CAPITAL POSITION													Table 12
($ in millions)	Sep 30 2015			Jun 30 2015			Mar 31 2015			Dec 31 2014			Sep 30 2014
Total U.S. Bancorp shareholders’ equity		$45,075			$44,537			$44,277			$43,479			$43,141
Standardized Approach
Basel III transitional standardized approach
Common equity tier 1 capital		$32,124			$31,674			$31,308			$30,856			$30,213
Tier 1 capital		37,197			36,748			36,382			36,020			35,377
Total risk-based capital		44,015			43,526			43,558			43,208			42,509
Common equity tier 1 capital ratio		9.6	%		9.5	%		9.6	%		9.7	%		9.7	%
Tier 1 capital ratio		11.1			11.0			11.1			11.3			11.3
Total risk-based capital ratio		13.1			13.1			13.3			13.6			13.6
Leverage ratio		9.3			9.2			9.3			9.3			9.4
Common equity tier 1 capital to risk-weighted assets estimated for the Basel III fully implemented standardized approach		9.2			9.2			9.2			9.0			9.0
Advanced Approaches
Common equity tier 1 capital to risk-weighted assets for the Basel III transitional advanced approaches		13.0			12.9			12.3			12.4			12.4
Common equity tier 1 capital to risk-weighted assets estimated for the Basel III fully implemented advanced approaches		12.4			12.4			11.8			11.8			11.8
Tangible common equity to tangible assets		7.7			7.5			7.6			7.5			7.6
Tangible common equity to risk-weighted assets		9.3			9.2			9.3			9.3			9.3
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 following four years to full implementation by January 1, 2018. Basel III includes two comprehensive methodologies for calculating risk-weighted assets: a general standardized approach and more risk-sensitive advanced approaches, with the Company’s capital adequacy being evaluated against the methodology that is most restrictive.

All regulatory ratios continue to be in excess of “well-capitalized” requirements. The common equity tier 1 capital to risk-weighted assets ratio estimated for the Basel III standardized approach as if fully implemented was 9.2 percent at September 30, 2015, compared with 9.2 percent at June 30, 2015, and 9.0 percent at September 30, 2014. The common equity tier 1 capital to risk-weighted assets ratio estimated for the Basel III advanced approaches as if fully implemented was 12.4 percent at September 30, 2015, compared with 12.4 percent at June 30, 2015, and 11.8 percent at September 30, 2014.

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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							3Q 2015
Business Line	3Q 2015		2Q 2015		3Q 2014		3Q15 vs 2Q15			3Q15 vs 3Q14			YTD 2015		YTD 2014		Percent Change			Earnings Composition
Wholesale Banking and Commercial Real Estate	$	210	$	246	$	258		(14.6	)		(18.6	)	$	666	$	813		(18.1	)		14	%
Consumer and Small Business Banking		310		318		375		(2.5	)		(17.3	)		980		1,114		(12.0	)		21
Wealth Management and Securities Services		64		69		64		(7.2	)		—			187		188		(.5	)		4
Payment Services		325		259		306		25.5			6.2			851		831		2.4			22
Treasury and Corporate Support		580		591		468		(1.9	)		23.9			1,719		1,417		21.3			39
Consolidated Company	$	1,489	$	1,483	$	1,471		.4			1.2		$	4,403	$	4,363		.9			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 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 2015, 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 $210 million of the Company’s net income in the third quarter of 2015, compared with $258 million in the third quarter of 2014

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and $246 million in the second quarter of 2015. Wholesale Banking and Commercial Real Estate’s net income decreased $48 million (18.6 percent) from the same quarter of 2014 due to an increase in total noninterest expense and in the provision for credit losses, partially offset by an increase in total net revenue. Total net revenue increased $2 million (0.3 percent), due to a $12 million (2.4 percent) increase in net interest income, partially offset by a $10 million (4.3 percent) decrease in total noninterest income. Net interest income increased year-over-year, primarily due to an increase in average total loans and deposits, partially offset by lower rates and fees on loans. The decrease in total noninterest income was driven by higher loan-related charges, partially offset by higher loan syndication and bond underwriting fees, as well as higher wholesale transaction activity. Total noninterest expense was $28 million (9.2 percent) higher compared with a year ago primarily due to higher compensation and employee benefits expense, mainly due to higher variable compensation, merit and pension costs, and net shared services expense and an increase in the FDIC insurance assessment allocation based on the level of commitments. The provision for credit losses increased $49 million due to an unfavorable change in the reserve allocation and an increase in net charge-offs.

Wholesale Banking and Commercial Real Estate’s contribution to net income in the third quarter of 2015 was $36 million (14.6 percent) lower than the second quarter of 2015, due to an increase in the provision for credit losses and noninterest expense, partially offset by an increase in total net revenue. Total net revenue increased $10 million (1.4 percent) compared with the prior quarter. Net interest income increased $11 million (2.2 percent) on a linked quarter basis, primarily due to higher average loans and an additional day in the quarter, partially offset by lower rates and fees on loans. Total noninterest income was essentially flat compared with the prior quarter. Total noninterest expense increased $5 million (1.5 percent) due to higher variable compensation and an additional day in the quarter relative to the prior quarter. The provision for credit losses increased $61 million due to an unfavorable change in the reserve allocation and an increase in net charge-offs.

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 and indirect lending (collectively, the retail banking division), as well as mortgage banking. Consumer and Small Business Banking contributed $310 million of the Company’s net income in the third quarter of 2015, a $65 million (17.3 percent) decrease from the third quarter of 2014 and an $8 million (2.5 percent) decrease from the prior quarter. Within Consumer and Small Business Banking, the retail banking division reported a 4.7

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percent decrease in its contribution from the same quarter of last year due to lower total net revenue and an increase in total noninterest expense, partially offset by a lower provision for credit losses. Retail banking’s total net revenue was 1.3 percent lower than the third quarter of 2014. Net interest income decreased 1.9 percent, primarily as a result of lower rates on loans, partially offset by higher average loan and deposit balances. Total noninterest income for the retail banking division was flat compared with a year ago. Total noninterest expense for the retail banking division in the third quarter of 2015 increased 5.1 percent over the same quarter of the prior year, primarily due to the allocation to the business line of a previously reserved legal matter and higher compensation and employee benefits expense, principally due to higher merit and pension costs. The provision for credit losses for the retail banking division decreased 57.0 percent on a year-over-year basis due to a favorable change in the reserve allocation and lower net charge-offs. The contribution of the mortgage banking division was 38.0 percent lower than the third quarter of 2014, reflecting a decrease in total net revenue and an increase in total noninterest expense, as well as an increase in the provision for credit losses. The division’s 6.7 percent decrease in total net revenue was driven by a 13.3 percent decrease in total noninterest income, principally due to an unfavorable change in the valuation of MSRs, net of hedging activities, partially offset by a 3.8 percent increase in net interest income, primarily the result of higher average loans held for sale. Total noninterest expense was 24.9 percent higher compared with the prior year quarter primarily due to higher mortgage servicing-related expenses and increased compensation expense due to higher pension costs. The 50.0 percent increase in the provision for credit losses for the mortgage banking division was due to an unfavorable change in the reserve allocation, partially offset by lower net charge-offs.

Consumer and Small Business Banking’s contribution in the third quarter of 2015 was $8 million (2.5 percent) lower than the second quarter of 2015, primarily due to an increase in total noninterest expense, partially offset by an increase in total net revenue and a decrease in the provision for credit losses. Within Consumer and Small Business Banking, the retail banking division’s contribution decreased 8.6 percent, mainly due to an increase in total noninterest expense and an increase in the provision for credit losses, partially offset by an increase in total net revenue. Total net revenue for the retail banking division increased 1.9 percent compared with the previous quarter. Net interest income was 1.6 percent higher primarily due to higher average loan and deposit balances, as well as an additional day in the current quarter relative to the prior quarter, partially offset by lower rates on loans. Total noninterest income was 2.5 percent higher on a linked quarter basis, driven by seasonally higher deposit service charges. Total noninterest expense increased 4.6 percent, primarily due to the allocation to the business line of a previously reserved legal matter. The

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October 15, 2015

Page 21

provision for credit losses increased 48.1 percent on a linked quarter basis primarily due to an unfavorable change in the reserve allocation. The contribution of the mortgage banking division increased 17.3 percent over the second quarter of 2015 primarily due to lower provision for credit losses, partially offset by higher total noninterest expense and lower total net revenue. Total net revenue decreased 1.5 percent due to a 3.1 percent decrease in total noninterest income, the result of lower mortgage origination revenue. The decrease in noninterest income was partially offset by a 0.6 percent increase in net interest income, primarily due to an additional day in the quarter. Total noninterest expense increased 2.0 percent, primarily reflecting higher mortgage servicing-related expenses, along with higher compensation and employee benefits expense related to an additional day in the current quarter relative to the prior quarter. The provision for credit losses for the mortgage banking division decreased $31 million on a linked quarter basis primarily due to a favorable 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 $64 million of the Company’s net income in the third quarter of 2015, compared with $64 million in the third quarter of 2014 and $69 million in the second quarter of 2015. The business line’s contribution was flat compared with the same quarter of 2014, reflecting an increase in total net revenue and a decrease in the provision for credit losses, offset by an increase in total noninterest expense. Total net revenue increased $15 million (3.3 percent) year-over-year, driven by a $13 million (3.7 percent) increase in total noninterest income, reflecting the impact of account growth and improved market conditions, and an increase in net interest income of $2 million (2.1 percent), principally due to higher average deposit balances. Total noninterest expense increased $19 million (5.5 percent) primarily as a result of higher net shared services expense and increased compensation and employee benefits expense due to merit and pension costs. The provision for credit losses decreased $5 million (83.3 percent) compared with the prior year quarter due to a favorable change in the reserve allocation and lower net charge-offs.

The business line’s contribution in the third quarter of 2015 was $5 million (7.2 percent) lower than the prior quarter. Total net revenue was essentially flat on a linked quarter basis, reflecting an increase in net interest income of $7 million (7.7 percent), principally due to higher average deposit balances, partially offset by a decrease in noninterest income of $6 million (1.6 percent) reflecting current market conditions. Total noninterest expense increased $8 million (2.3 percent) over the prior quarter primarily as a result of

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U.S. Bancorp Reports Third Quarter 2015 Results

October 15, 2015

Page 22

increased compensation expense, including higher variable compensation costs. The provision for credit losses was flat on a linked quarter basis.

Payment Services includes consumer and business credit cards, stored-value cards, debit cards, corporate, government and purchasing card services, consumer lines of credit and merchant processing. Payment Services contributed $325 million of the Company’s net income in the third quarter of 2015, compared with $306 million in the third quarter of 2014 and $259 million in the second quarter of 2015. The $19 million (6.2 percent) increase in the business line’s contribution from the prior year was due to an increase in total net revenue and a decrease in the provision for credit losses, partially offset by an increase in noninterest expense. Total net revenue increased $72 million (5.6 percent) year-over-year. Net interest income increased $40 million (9.0 percent), primarily due to improved loan rates and higher average loan balances and fees. Total noninterest income was $32 million (3.8 percent) higher year-over-year due to an increase in credit and debit card revenue on higher transaction volumes, along with higher merchant processing services, driven by increased transaction volumes and product fees and equipment sales to merchants related to new chip card technology requirements, partially offset by the impact of foreign currency rate changes. Total noninterest expense increased $53 million (8.8 percent) over the third quarter of 2014, driven by higher net shared services, compensation and marketing expenses. The provision for credit losses decreased $10 million (5.3 percent) due to a favorable change in the reserve allocation and lower net charge-offs.

Payment Services’ contribution in the third quarter of 2015 increased $66 million (25.5 percent) over the second quarter of 2015 due to higher total net revenue and lower noninterest expense and provision for credit losses. Net interest income was $25 million (5.4 percent) higher than the prior quarter due to improved loan rates and higher average loan balances and fees. Total noninterest income increased $24 million (2.8 percent), primarily reflecting an increase in corporate payment products revenue on seasonally higher volumes, an increase in merchant processing services due to higher product fees and equipment sales to merchants related to new chip card technology requirements and an increase in credit and debit card revenue due to higher transaction volumes. Total noninterest expense was $27 million (4.0 percent) lower on a linked quarter basis reflecting the allocation to the business line of a previously reserved regulatory item in the prior quarter, partially offset by the timing of marketing programs. The provision for credit losses was $28 million (13.5 percent) lower on a linked quarter basis due to lower net charge-offs and a favorable change in the reserve allocation.

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U.S. Bancorp Reports Third Quarter 2015 Results

October 15, 2015

Page 23

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, 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 $580 million in the third quarter of 2015, compared with $468 million in the third quarter of 2014 and $591 million in the second quarter of 2015. The increase in net income of $112 million (23.9 percent) over the prior year was due to an increase in total net revenue, along with decreases in total noninterest expense and the provision for credit losses. Net interest income increased $32 million (6.0 percent) over the third quarter of 2014 principally due to growth in the investment portfolio. Total noninterest income increased $83 million (56.8 percent) over the third quarter of last year, mainly due to the Visa sale, partially offset by the student loan market adjustment. Total noninterest expense decreased $39 million (20.2 percent), principally due to a reduction of reserves for losses allocated to business lines and lower costs related to investments in tax-advantaged projects, partially offset by higher compensation and employee benefits expense, reflecting higher pension costs, the impact of merit increases and staffing for risk and compliance activities. The provision for credit losses was $17 million lower year-over-year primarily due to lower net charge-offs.

Net income in the third quarter of 2015 was $11 million (1.9 percent) lower on a linked quarter basis as an increase in total noninterest expense was partially offset by an increase in total net revenue and a decrease in the provision for credit losses. Total net revenue was $25 million (3.3 percent) higher than the prior quarter mainly due to the Visa sale, partially offset by the student loan market adjustment. The $57 million (58.8 percent) increase in total noninterest expense was principally due to the elevated third quarter 2015 expenses and higher costs related to investments in tax-advantaged projects. The provision for credit losses was $14 million lower compared with the second quarter of 2015 due to lower net charge-offs and a favorable 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.

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U.S. Bancorp Reports Third Quarter 2015 Results

October 15, 2015

Page 24

On Thursday, October 15, 2015, at 8:30 a.m. CDT, Richard K. Davis, chairman, president and chief executive officer, and Kathy Rogers, vice chair and chief financial officer, will host a conference call to review the financial results. The conference call will be available online and by telephone. 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 near the bottom of the page. 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 13809601. For those unable to participate during the live call, a recording will be available at approximately 11:30 a.m. CDT on Thursday, October 15 and be accessible through Thursday, October 22 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 13809601.

Minneapolis-based U.S. Bancorp (“USB”), with $416 billion in assets as of September 30, 2015, is the parent company of U.S. Bank National Association, the fifth largest commercial bank in the United States. The Company operates 3,151 banking offices in 25 states and 5,001 ATMs and provides a comprehensive line of banking, investment, mortgage, trust and payment services products to consumers, businesses and institutions. Visit U.S. Bancorp on the web at www.usbank.com.

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U.S. Bancorp Reports Third Quarter 2015 Results

October 15, 2015

Page 25

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 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. Stress in the commercial real estate markets, as well as a downturn in the residential real estate markets could cause 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; litigation; increased competition from both banks and non-banks; changes in customer behavior and preferences; breaches in data security; 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, compliance risk, strategic risk, interest rate risk, liquidity risk and reputational 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, 2014, 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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U.S. Bancorp Reports Third Quarter 2015 Results

October 15, 2015

Page 26

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, and

● Common equity tier 1 capital to risk-weighted assets estimated for the Basel III fully implemented advanced approaches.

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

(Dollars and Shares in Millions, Except Per Share Data)	Three Months Ended September 30,					Nine Months Ended September 30,
(Unaudited)		2015		2014			2015		2014
Interest Income
Loans		$2,520		$2,518			$7,476		$7,572
Loans held for sale		60		36			166		87
Investment securities		502		476			1,502		1,378
Other interest income		35		27			102		89
Total interest income		3,117		3,057			9,246		9,126
Interest Expense
Deposits		113		115			344		348
Short-term borrowings		66		72			189		204
Long-term debt		170		178			531		543
Total interest expense		349		365			1,064		1,095
Net interest income		2,768		2,692			8,182		8,031
Provision for credit losses		282		311			827		941
Net interest income after provision for credit losses		2,486		2,381			7,355		7,090
Noninterest Income
Credit and debit card revenue		269		251			776		749
Corporate payment products revenue		190		195			538		550
Merchant processing services		400		387			1,154		1,127
ATM processing services		81		81			239		241
Trust and investment management fees		329		315			985		930
Deposit service charges		185		185			520		513
Treasury management fees		143		136			422		409
Commercial products revenue		231		209			645		635
Mortgage banking revenue		224		260			695		774
Investment products fees		46		49			141		142
Securities gains (losses), net		(1	)	(3	)		(1	)	2
Other		229		177			638		722
Total noninterest income		2,326		2,242			6,752		6,794
Noninterest Expense
Compensation		1,225		1,132			3,600		3,372
Employee benefits		285		250			895		796
Net occupancy and equipment		251		249			745		739
Professional services		115		102			298		282
Marketing and business development		99		78			265		253
Technology and communications		222		219			657		644
Postage, printing and supplies		77		81			223		242
Other intangibles		42		51			128		148
Other		459		452			1,311		1,435
Total noninterest expense		2,775		2,614			8,122		7,911
Income before income taxes		2,037		2,009			5,985		5,973
Applicable income taxes		534		523			1,541		1,566
Net income		1,503		1,486			4,444		4,407
Net (income) loss attributable to noncontrolling interests		(14	)	(15	)		(41	)	(44	)
Net income attributable to U.S. Bancorp		$1,489		$1,471			$4,403		$4,363
Net income applicable to U.S. Bancorp common shareholders		$1,422		$1,405			$4,204		$4,163
Earnings per common share		$.81		$.78			$2.38		$2.30
Diluted earnings per common share		$.81		$.78			$2.36		$2.29
Dividends declared per common share		$.255		$.245			$.755		$.720
Average common shares outstanding		1,758		1,798			1,770		1,809
Average diluted common shares outstanding		1,766		1,807			1,778		1,819

Page 27

U.S. Bancorp

Consolidated Ending Balance Sheet

(Dollars in Millions)	September 30, 2015			December 31, 2014			September 30, 2014
Assets		(Unaudited	)					(Unaudited	)
Cash and due from banks		$10,450			$10,654			$6,183
Investment securities
Held-to-maturity		44,690			44,974			44,231
Available-for-sale		60,396			56,069			52,674
Loans held for sale		4,472			4,792			3,939
Loans
Commercial		85,539			80,377			78,878
Commercial real estate		42,478			42,795			40,909
Residential mortgages		52,349			51,619			51,957
Credit card		18,583			18,515			17,858
Other retail		51,051			49,264			48,935
Total loans, excluding covered loans		250,000			242,570			238,537
Covered loans		4,791			5,281			7,054
Total loans		254,791			247,851			245,591
Less allowance for loan losses		(3,965	)		(4,039	)		(4,065	)
Net loans		250,826			243,812			241,526
Premises and equipment		2,515			2,618			2,608
Goodwill		9,368			9,389			9,401
Other intangible assets		3,176			3,162			3,338
Other assets		30,050			27,059			27,384
Total assets		$415,943			$402,529			$391,284
Liabilities and Shareholders’ Equity
Deposits
Noninterest-bearing		$83,549			$77,323			$78,641
Interest-bearing		185,861			177,452			165,070
Time deposits greater than $100,000		25,854			27,958			29,386
Total deposits		295,264			282,733			273,097
Short-term borrowings		26,915			29,893			30,045
Long-term debt		32,504			32,260			30,768
Other liabilities		15,493			13,475			13,545
Total liabilities		370,176			358,361			347,455
Shareholders’ equity
Preferred stock		4,756			4,756			4,756
Common stock		21			21			21
Capital surplus		8,362			8,313			8,293
Retained earnings		45,413			42,530			41,543
Less treasury stock		(12,756	)		(11,245	)		(10,836	)
Accumulated other comprehensive income (loss)		(721	)		(896	)		(636	)
Total U.S. Bancorp shareholders’ equity		45,075			43,479			43,141
Noncontrolling interests		692			689			688
Total equity		45,767			44,168			43,829
Total liabilities and equity		$415,943			$402,529			$391,284

Page 28

U.S. Bancorp

Non-GAAP Financial Measures

(Dollars in Millions, Unaudited)	September 30, 2015			June 30, 2015			March 31, 2015			December 31, 2014			September 30, 2014
Total equity		$45,767			$45,231			$44,965			$44,168			$43,829
Preferred stock		(4,756	)		(4,756	)		(4,756	)		(4,756	)		(4,756	)
Noncontrolling interests		(692	)		(694	)		(688	)		(689	)		(688	)
Goodwill (net of deferred tax liability) (1)		(8,324	)		(8,350	)		(8,360	)		(8,403	)		(8,503	)
Intangible assets, other than mortgage servicing rights		(779	)		(744	)		(783	)		(824	)		(877	)
Tangible common equity (a)		31,216			30,687			30,378			29,496			29,005
Tangible common equity (as calculated above)		31,216			30,687			30,378			29,496			29,005
Adjustments (2)		118			125			158			172			187
Common equity tier 1 capital estimated for the Basel III fully implemented standardized and advanced approaches (b)		31,334			30,812			30,536			29,668			29,192
Total assets		415,943			419,075			410,233			402,529			391,284
Goodwill (net of deferred tax liability) (1)		(8,324	)		(8,350	)		(8,360	)		(8,403	)		(8,503	)
Intangible assets, other than mortgage servicing rights		(779	)		(744	)		(783	)		(824	)		(877	)
Tangible assets (c)		406,840			409,981			401,090			393,302			381,904
Risk-weighted assets, determined in accordance with prescribed transitional standardized approach regulatory requirements (d)		336,227	*		333,177			327,709			317,398			311,914
Adjustments (3)		3,532	*		3,532			3,153			11,110			12,837
Risk-weighted assets estimated for the Basel III fully implemented standardized approach (e)		339,759	*		336,709			330,862			328,508			324,751
Risk-weighted assets, determined in accordance with prescribed transitional advanced approaches regulatory requirements		248,048	*		245,038			254,892			248,596			243,909
Adjustments (4)		3,723	*		3,721			3,321			3,270			3,443
Risk-weighted assets estimated for the Basel III fully implemented advanced approaches (f)		251,771	*		248,759			258,213			251,866			247,352
Ratios *
Tangible common equity to tangible assets (a)/(c)		7.7	%		7.5	%		7.6	%		7.5	%		7.6	%
Tangible common equity to risk-weighted assets (a)/(d)		9.3			9.2			9.3			9.3			9.3
Common equity tier 1 capital to risk-weighted assets estimated for the Basel III fully implemented standardized approach (b)/(e)		9.2			9.2			9.2			9.0			9.0
Common equity tier 1 capital to risk-weighted assets estimated for the Basel III fully implemented advanced approaches (b)/(f)		12.4			12.4			11.8			11.8			11.8

      *  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.

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

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

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

Page 29

EX-99.2

U.S. Bancorp

3Q15 Earnings

Conference Call

Richard K. Davis

Chairman, President and CEO

October 15, 2015

Kathy Rogers

Vice Chairman and CFO

Exhibit 99.2

2

U.S. BANCORP  |

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

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.

Stress

in

the

commercial

real

estate

markets,

as

well

as

a

downturn

in

the

residential

real

estate

markets,

could

cause

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;

litigation;

increased

competition

from

both

banks

and

non-banks;

changes

in

customer

behavior

and

preferences;

breaches

in

data

security;

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,

compliance risk, strategic risk, interest rate risk, liquidity risk and reputational 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,

2014,

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

calculations

of

these

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

U.S. BANCORP  |

3Q15 Highlights

•

Net income of $1.5 billion; record $0.81 per diluted common share

•

Average loan growth* of 1.3% vs. 2Q15 and 3.8% vs. 3Q14

•

Average deposit growth of 1.4% vs. 2Q15 and 6.9% vs. 3Q14

•

Positive trends in payments-related fee revenue

–

Credit and debit card revenue increased 7.2% vs. 3Q14

–

Merchant processing services increased 8.5% vs. 3Q14 (excluding the impact of

foreign currency rate changes)

•

Net charge-offs declined 13.1% vs. 3Q14 and 1.4% vs. 2Q15 

•

Nonperforming assets continue to improve (declined 18.5% vs. 3Q14)

•

Capital generation continues to reinforce capital position

–

Common equity tier 1 capital ratio of 9.2% estimated for the Basel III fully

implemented standardized approach

•

Returned 80% of earnings to shareholders in 3Q15

* Loan growth excludes student loans which were transferred to held for sale at the end of 1Q15 and returned to held for investment during 3Q15

4

U.S. BANCORP  |

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

Efficiency ratio 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)

5

U.S. BANCORP  |

3Q15 Notable Impacts to 3Q15 Earnings

•

Student Loan Market Adjustment

($58) million

•

Elevated 3Q15 Expenses

($60) million

(not expected to repeat in 4Q15)

–

Mortgage-related Compliance

–

Talent Upgrade

•

Visa Gain

$135 million

Total Impact

Relatively Neutral

6

U.S. BANCORP  |

Revenue Growth

Notable items: 2Q14 Visa gain $214 million; 4Q14 Nuveen gain $124 million; 3Q15 VISA gain $135 million, student loan market value adjustment ($58) million

Taxable-equivalent basis

Year-Over-Year Change

2.0%

5.7%

1.9%

(2.8%)

3.1%

$ in millions

$4,990

$5,169

$4,906

$5,042

$5,147

$124

$77

3,500

4,000

4,500

5,000

5,500

3Q14

4Q14

1Q15

2Q15

3Q15

3.2% excluding

4Q14 notable

1.6% excluding

3Q15 notable

1.4% excluding

2Q14 notable

7

U.S. BANCORP  |

Loan and Deposit Growth

Year-Over-Year Growth

Average Balances

200

225

250

275

300

3Q14

4Q14

1Q15

2Q15

3Q15

Loans

Deposits

5.1%

$248.0

2.5%

$246.6

2.7%

$250.5

6.3%

$243.9

5.9%

$246.4

8.1%

$278.5

8.9%

$285.7

6.9%

$289.7

7.4%

$271.0

7.2%

$275.5

$ in billions

* Excluding student loans which were transferred to held for sale at the end of 1Q15 and returned to held for investment during 3Q15

3.8%

adjusted*

4.0%

adjusted*

8

U.S. BANCORP  |

Credit Quality

Net Charge-offs

Nonperforming Assets

Net Charge-offs (Left Scale)

NCOs to Avg Loans (Right Scale)

Nonperforming Assets (Left Scale)

NPAs to Loans plus ORE (Right Scale)

$ in millions

9

U.S. BANCORP  |

Earnings Summary

Taxable-equivalent basis

$ and shares in millions, except per-share data

YTD

YTD

3Q15

2Q15

3Q14

vs 2Q15

vs 3Q14

2015

2014

%B/(W)

Net Interest Income

2,821

$  

2,770

$  

2,748

$  

1.8

2.7

8,343

$  

8,198

$  

1.8

Noninterest Income

2,326

2,272

2,242

2.4

3.7

6,752

6,794

(0.6)

Net Revenue

5,147

5,042

4,990

2.1

3.1

15,095

14,992

0.7

Noninterest Expense

2,775

2,682

2,614

(3.5)

(6.2)

8,122

7,911

(2.7)

Operating Income

2,372

2,360

2,376

0.5

(0.2)

6,973

7,081

(1.5)

Net Charge-offs

292

296

336

1.4

13.1

867

1,026

15.5

Excess Provision

(10)

(15)

(25)

(33.3)

(60.0)

(40)

(85)

(52.9)

Income before Taxes

2,090

2,079

2,065

0.5

1.2

6,146

6,140

0.1

Applicable Income Taxes

587

582

579

(0.9)

(1.4)

1,702

1,733

1.8

Noncontrolling Interests

(14)

(14)

(15)

-

6.7

(41)

(44)

6.8

Net Income

1,489

1,483

1,471

0.4

1.2

4,403

4,363

0.9

Preferred Dividends/Other

67

66

66

(1.5)

(1.5)

199

200

0.5

NI to Common

1,422

$  

1,417

$  

1,405

$  

0.4

1.2

4,204

$  

4,163

$  

1.0

Diluted EPS

0.81

$    

0.80

$    

0.78

$    

1.3

3.8

2.36

$    

2.29

$    

3.1

Average Diluted Shares

1,766

1,779

1,807

0.7

2.3

1,778

1,819

2.3

% B/(W)

10

U.S. BANCORP  |

Net Interest Income

Net Interest Income

Key Points

vs. 3Q14

•

Average earning assets grew $22.8 billion, or 6.6%

•

Net interest margin lower 12 bps (3.04% vs. 3.16%)

–

Change in loan portfolio mix, as well as growth in the

investment portfolio at lower average rates and lower

reinvestment rates on investment securities

vs. 2Q15

•

Average earning assets grew $2.8 billion, or 0.8%

•

Net interest margin higher 1 bp (3.04% vs. 3.03%)

–

Principally due to earning assets growth and continued

deposit growth

–

Partially offset by growth in lower rate investment securities

along with lower investment portfolio reinvestment rates

Year-Over-Year Change

1.3%

2.4%

1.7%

0.9%

2.7%

$ in millions

Taxable-equivalent basis

11

U.S. BANCORP  |

Noninterest Income

$432

$587

$446

$472

$505

$260

$235

$240

$231

$224

$402

$396

$376

$396

$409

$315

$322

$322

$334

$329

$833

$830

$770

$839

$859

0

700

1,400

2,100

2,800

3Q14

4Q14

1Q15

2Q15

3Q15

Noninterest Income

Key Points

vs. 3Q14

•

Noninterest income increased $84 million, or 3.7%

–

Higher other income, principally due to the Visa sale, partially offset

by the student loan market valuation adjustment 

–

Higher credit and debit card revenue (7.2% increase) due to higher

transaction volumes and higher merchant processing services

revenue (3.4% increase) due to higher transaction volumes,

account growth and equipment sales to merchants

–

Higher trust and investment management fees (4.4% increase)

–

Higher commercial products revenue (10.5% increase) due to

higher volume of tax-advantaged project fees and an increase in

bond underwriting fees

–

Lower mortgage banking revenue primarily due to an unfavorable

change in the valuation of MSRs, net of hedging activities

vs. 2Q15

•

Noninterest income increased $54 million, or 2.4%

–

Higher other income, primarily driven by changes in equity

investment income including the Visa sale, partially offset by the

student loan market valuation adjustment and a decrease in

trading revenue

–

Higher commercial products revenue (7.9% increase) due to higher

wholesale transaction activity

–

Higher corporate payment products revenue (6.7% increase) and

deposit service charges (6.3% increase) due to seasonally higher

transaction volumes

Year-Over-Year Change

3.0%

9.9%

2.2%

(7.0%)

3.7%

$2,326

$2,242

$2,370

$2,154

$2,272

All Other

Mortgage

Service Charges

Trust and Inv Mgmt

Payments

Notable items: 4Q14 Nuveen gain $124 million; 3Q15 Visa gain $135 million, student loan market value adjustment ($58) million

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

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

$ in millions

12

U.S. BANCORP  |

Noninterest Expense

$503

$594

$479

$459

$501

$219

$219

$214

$221

$222

$261

$347

$229

$266

$291

$249

$248

$247

$247

$251

$1,382

$1,396

$1,496

$1,489

$1,510

0

800

1,600

2,400

3,200

3Q14

4Q14

1Q15

2Q15

3Q15

Noninterest Expense

Key Points

vs. 3Q14

•

Noninterest expense increased $161 million, or 6.2%

–

Higher compensation (8.2% increase) reflecting the impact of merit

increases and higher staffing for risk and compliance activities

–

Higher employee benefits expense (14.0% increase) primarily due

to higher pension costs

–

Higher marketing and business development expense (26.9%

increase) primarily due to various marketing programs within credit

card and retail lending divisions

vs. 2Q15

•

Noninterest expense increased $93 million, or 3.5%

–

Higher other expense (10.3% increase) due primarily to mortgage

servicing and talent upgrade costs

–

Higher compensation expense (2.4% increase) reflecting the

impact of an additional day in 3Q15 and increases in variable

compensation

–

Higher postage, printing and supplies expense (20.3% increase)

primarily due to a 2Q15 reimbursement from a business partner

Year-Over-Year Change

1.9%

4.5%

4.8%

(2.6%)

6.2%

$2,775

$2,614

$2,804

$2,665

$2,682

All Other

Tech and Communications

Prof Svcs, Marketing and PPS

Occupancy and Equipment

Compensation and Benefits

Notable items: 4Q14 charitable contributions and accruals for legal matters $88 million; 3Q15 elevated expenses related to mortgage-related compliance

and the company wide talent update costs $60 million

$ in millions

13

U.S. BANCORP  |

Capital Position

* RWA = risk-weighted assets

$ in billions

3Q15

2Q15

1Q15

4Q14

3Q14

Total U.S. Bancorp shareholders' equity

45.1

$  

44.5

$  

44.3

$  

43.5

$  

43.1

$  

Standardized Approach

Basel III transitional standardized approach

Common equity tier 1 capital ratio

9.6%

9.5%

9.6%

9.7%

9.7%

Tier 1 capital ratio

11.1%

11.0%

11.1%

11.3%

11.3%

Total risk-based capital ratio

13.1%

13.1%

13.3%

13.6%

13.6%

Leverage ratio

9.3%

9.2%

9.3%

9.3%

9.4%

Common equity tier 1 capital to RWA* estimated for the

Basel III fully implemented standardized approach

9.2%

9.2%

9.2%

9.0%

9.0%

Advanced Approaches

Common equity tier 1 capital to RWA for the Basel III

transitional advanced approaches

13.0%

12.9%

12.3%

12.4%

12.4%

Common equity tier 1 capital to RWA estimated for the 

Basel III fully implemented advanced approaches

12.4%

12.4%

11.8%

11.8%

11.8%

Tangible common equity ratio

7.7%

7.5%

7.6%

7.5%

7.6%

Tangible common equity as a % of RWA

9.3%

9.2%

9.3%

9.3%

9.3%

14

U.S. BANCORP  |

Appendix

15

U.S. BANCORP  |

Average Loans

13.6%

15.5%

15.1%

11.0%

9.5%

6.1%

4.2%

6.5%

4.8%

3.6%

5.8%

2.2%

(0.3%)

(1.4%)

(0.3%)

4.9%

3.6%

2.4%

1.3%

1.1%

3.6%

3.6%

3.5%

(1.8%)

5.7%*

0.3%

5.6%*

0

70

140

210

280

3Q14

4Q14

1Q15

2Q15

3Q15

Average Loans

Key Points

vs. 3Q14

•

Average total loans increased by $6.7 billion, or

2.7% (3.8% excluding student loans which

were reclassified back to held for investment

during 3Q15)

•

Average total commercial loans increased $7.4

billion, or 9.5%

vs. 2Q15

•

Average total loans increased by $4.0 billion, or

1.6% (1.3% increase excluding student loans

which were reclassified back to held for

investment during 3Q15)

•

Average total commercial loans increased $1.5

billion, or 1.7%

Year-Over-Year Growth

6.3%

5.9%

5.1%

2.5%

2.7%

Covered

Commercial

CRE

Res Mtg

Retail

Credit Card

$250.5

$243.9

$246.4

$248.0

$246.6

4.0%*

$ in billions

* Excluding student loans which were transferred to held for sale at the end of 1Q15 and returned to held for investment during 3Q15

3.8%*

16

U.S. BANCORP  |

Average Deposits

(13.1%)

(4.9%)

(8.2%)

(14.1%)

(18.1%)

18.3%

19.7%

24.7%

30.2%

21.3%

10.9%

8.3%

7.3%

6.1%

5.9%

8.6%

3.3%

5.2%

7.7%

9.2%

0

80

160

240

320

3Q14

4Q14

1Q15

2Q15

3Q15

Average Deposits

Key Points

vs. 3Q14

•

Average total deposits increased by $18.7

billion, or 6.9%

•

Average low-cost deposits (NIB, interest

checking, money market and savings) 

increased by $26.2 billion, or 11.4%

vs. 2Q15

•

Average total deposits increased by $3.9

billion, or 1.4%

•

Average low-cost deposits increased by $6.1

billion, or 2.5%

Year-Over-Year Growth

7.4%

7.2%

8.1%

8.9%

6.9%

Time

Money Market

Checking and Savings

Noninterest-bearing

$271.0

$275.5

$278.5

$285.7

$289.7

$ in billions

17

U.S. BANCORP  |

Credit Quality –

Commercial Loans

Average Loans and Net Charge-offs Ratios

Key Statistics

Key Points

•

Average quarter-over-quarter loan growth of 2% and year-over-year loan growth of 10% demonstrates continued

momentum with clients

•

Net charge-offs increased but remained near historically low levels

•

Nonperforming loans and delinquencies remained modest

3Q14

2Q15

3Q15

Average Loans

$72,190

$77,932

$79,486

30-89 Delinquencies

0.23%

0.19%

0.20%

90+ Delinquencies

0.05%

0.05%

0.05%

Nonperforming Loans

0.22%

0.10%

0.20%

$72,190

$74,333

$76,183

$77,932

$79,486

0.29%

0.26%

0.21%

0.20%

0.34%

0.0%

0.5%

1.0%

1.5%

2.0%

0

25,000

50,000

75,000

100,000

3Q14

4Q14

1Q15

2Q15

3Q15

Average Loans

Net Charge-offs Ratio

$ in millions

18

U.S. BANCORP  |

Credit Quality –

Commercial Leases

Average Loans and Net Charge-offs Ratios

Key Statistics

Key Points

•

Average loan levels were in-line with recent quarters and were up 1% year-over-year

•

Net charge-offs, nonperforming loans and delinquencies continued at historically low levels

3Q14

2Q15

3Q15

Average Loans

$5,155

$5,321

$5,218

30-89 Delinquencies

0.83%

0.81%

0.88%

90+ Delinquencies

0.00%

0.00%

0.00%

Nonperforming Loans

0.23%

0.23%

0.23%

$5,155

$5,292

$5,325

$5,321

$5,218

0.46%

-0.15%

0.23%

0.23%

0.23%

-0.7%

0.0%

0.7%

1.4%

2.1%

-3,000

0

3,000

6,000

9,000

3Q14

4Q14

1Q15

2Q15

3Q15

Average Loans

Net Charge-offs Ratio

$ in millions

Small Ticket

$3,195

Equipment

Finance

$2,023

Commercial Leases

19

U.S. BANCORP  |

CRE Construction

A&D

Construction

$673

Credit Quality –

Commercial Real Estate

Average Loans and Net Charge-offs Ratios

Key Statistics

Key Points

•

Year-over-year average loans increased 3.6%

•

Historically low nonperforming loan levels improved on a quarter-over-quarter and year-over-year basis

•

Strong recovery performance within CRE portfolio

3Q14

2Q15

3Q15

Average Loans

$40,839

$42,446

$42,316

30-89 Delinquencies

0.12%

0.12%

0.15%

90+ Delinquencies

0.03%

0.05%

0.05%

Nonperforming Loans

0.59%

0.41%

0.34%

Performing TDRs*

$284

$240

$218

$ in millions

CRE Mortgage

Investor

$20,919

Owner

Occupied

$11,164

Multi-family

$3,287

Retail

$849

Residential

Construction

$2,167

Office

$1,101

Other

$2,156

* TDR = troubled debt restructuring

20

U.S. BANCORP  |

Credit Quality –

Residential Mortgage

Average Loans and Net Charge-offs Ratios

Key Statistics

Key Points

•

Originations are of high credit quality (weighted average FICO 757, weighted average LTV 70%)

•

85% 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

$ in millions

3Q14

2Q15

3Q15

Average Loans

$51,994

$51,114

$51,831

30-89 Delinquencies

0.46%

0.38%

0.35%

90+ Delinquencies

0.41%

0.30%

0.33%

Nonperforming Loans

1.62%

1.50%

1.40%

$1,899

$1,866

$1,851

$1,931

$1,903

0

1,000

2,000

3,000

4,000

3Q14

4Q14

1Q15

2Q15

3Q15

Residential Mortgage Performing TDRs*

*Excludes GNMA loans, whose repayments are insured by the FHA or guaranteed by the Department of VA ($2,000 million in 3Q15)

21

U.S. BANCORP  |

Credit Quality –

Credit Card

Average Loans and Net Charge-offs Ratios

Key Statistics

Key Points

•

Average loans increased 1% year-over-year driven by high-quality originations

(commitment weighted average FICO 756)

•

Delinquencies increased seasonally while nonperforming loans continued to decline

$ in millions

3Q14

2Q15

3Q15

Average Loans

$17,753

$17,613

$17,944

30-89 Delinquencies

1.23%

1.16%

1.27%

90+ Delinquencies

1.10%

1.03%

1.10%

Nonperforming Loans

0.22%

0.09%

0.06%

22

U.S. BANCORP  |

Credit Quality –

Home Equity

Average Loans and Net Charge-offs Ratios

Key Statistics

Key Points

•

High-quality originations (weighted average FICO on commitments was 766, weighted average CLTV 71%)

originated primarily through the retail branch network to existing bank customers on their primary residences

•

Net charge-offs ratio declined on a linked quarter and year-over-year basis

$ in millions

3Q14

2Q15

3Q15

Average Loans

$15,704

$15,958

$16,083

30-89 Delinquencies

0.51%

0.36%

0.36%

90+ Delinquencies

0.26%

0.25%

0.25%

Nonperforming Loans

1.05%

0.98%

0.91%

Home Equity

Subprime: 1%

Wtd Avg LTV*: 89%

NCO: 1.92%

Prime: 96%

Wtd Avg LTV*: 72%

NCO: 0.13%

Other: 3%

Wtd Avg LTV*: 71%

NCO: 0.89%

*LTV at origination

23

U.S. BANCORP  |

Credit Quality –

Retail Leasing

Average Loans and Net Charge-offs Ratios

Key Statistics

Key Points

•

Continued high-quality originations (weighted average FICO 785) support the portfolio’s stable credit profile

•

Delinquencies remained at very low levels

•

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

$ in millions

3Q14

2Q15

3Q15

Average Loans

$5,991

$5,696

$5,480

30-89 Delinquencies

0.14%

0.17%

0.18%

90+ Delinquencies

0.02%

0.00%

0.02%

Nonperforming Loans

0.02%

0.04%

0.04%

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

24

U.S. BANCORP  |

Credit Quality –

Other Retail

Average Loans and Net Charge-offs Ratios

Key Statistics

Key Points

•

Student loan balances were returned from held for sale during 3Q15

•

Overall growth continues to be driven by auto loans, which were up 12.6% year-over-year

•

Delinquency rates and net charge-off rates remain low

$ in millions

3Q14

2Q15

3Q15

Average Loans

$27,003

$25,415

$27,286

30-89 Delinquencies

0.49%

0.48%

0.46%

90+ Delinquencies

0.13%

0.10%

0.10%

Nonperforming Loans

0.06%

0.07%

0.07%

Installment

$6,865

Auto Loans

$16,220

Revolving

Credit

$3,312

Student

Loans

$889

25

U.S. BANCORP  |

Credit Quality –

Auto Loans

Average Loans and Net Charge-offs Ratios

Key Statistics

Key Points

•

Continued growth (12.6% year-over-year) in auto loans driven by high-quality originations in the indirect channel

(weighted average FICO 768)

•

Net charge-offs were up on a linked quarter basis due primarily to seasonal factors and flat year-over-year

$ in millions

3Q14

2Q15

3Q15

Average Loans

$14,404

$15,609

$16,220

30-89 Delinquencies

0.41%

0.35%

0.40%

90+ Delinquencies

0.05%

0.02%

0.02%

Nonperforming Loans

0.03%

0.04%

0.05%

Direct: 6%

Wtd Avg FICO: 748

NCO: 0.03%

Indirect: 94%

Wtd Avg FICO: 764

NCO: 0.23%

Auto loans are included in Other Retail category

26

U.S. BANCORP  |

Non-GAAP Financial Measures

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.

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

(3)

Includes

higher

risk-weighting

for

unfunded

loan

commitments,

investment

securities,

residential

mortgages,

mortgage

servicing

rights

and

other

adjustments.

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

September 30,

June 30,

March 31,

December 31,

September 30,

(Dollars in Millions, Unaudited) 

2015

2015

2015

2014

2014

Total equity 

$45,767

$45,231

$44,965

$44,168

$43,829

Preferred stock 

(4,756)

(4,756)

(4,756)

(4,756)

(4,756)

Noncontrolling interests 

(692)

(694)

(688)

(689)

(688)

Goodwill (net of deferred tax liability) (1)

(8,324)

(8,350)

(8,360)

(8,403)

(8,503)

Intangible assets, other than mortgage servicing rights 

(779)

(744)

(783)

(824)

(877)

Tangible common equity (a) 

31,216

30,687

30,378

29,496

29,005

Tangible common equity (as calculated above)

31,216

30,687

30,378

29,496

29,005

Adjustments (2)

118

125

158

172

187

Common equity tier 1 capital estimated for the Basel III fully

implemented standardized and advanced approaches (b)

31,334

30,812

30,536

29,668

29,192

Total assets 

415,943

419,075

410,233

402,529

391,284

Goodwill (net of deferred tax liability) (1)

(8,324)

(8,350)

(8,360)

(8,403)

(8,503)

Intangible assets, other than mortgage servicing rights 

(779)

(744)

(783)

(824)

(877)

Tangible assets (c) 

406,840

409,981

401,090

393,302

381,904

Risk-weighted assets, determined in accordance with prescribed

transitional standardized approach regulatory requirements (d)

336,227

*

333,177

327,709

317,398

311,914

Adjustments (3)

3,532

*

3,532

3,153

11,110

12,837

Risk-weighted assets estimated for the Basel III fully implemented     

standardized approach (e)

339,759

*

336,709

330,862

328,508

324,751

Risk-weighted assets, determined in accordance with prescribed

transitional advanced approaches regulatory requirements

248,048

*

245,038

254,892

248,596

243,909

Adjustments (4)

3,723

*

3,721

3,321

3,270

3,443

Risk-weighted assets estimated for the Basel III fully implemented     

advanced approaches (f)

251,771

*

248,759

258,213

251,866

247,352

Ratios *

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

7.7

%

7.5

%

7.6

%

7.5

%

7.6

%

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

9.3

9.2

9.3

9.3

9.3

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

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

9.2

9.2

9.2

9.0

9.0

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

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

12.4

12.4

11.8

11.8

11.8

U.S. Bancorp

3Q15 Earnings

Conference Call

October 15, 2015