8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 18, 2018

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule l2b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section l3(a) of the Exchange Act.  ☐

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On July 18, 2018, U.S. Bancorp (the “Company”) issued a press release reporting quarter-ended June 30, 2018 results, and posted on its website its 2Q18 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 2Q18 Earnings Conference Call Presentation is included as Exhibit 99.2 hereto and is incorporated herein by reference. The information included in the 2Q18 Earnings Conference Call Presentation is considered to be “furnished” under the Securities Exchange Act of 1934 and shall not be deemed incorporated by reference in any filings under the Securities Act of 1933. The press release and 2Q18 Earnings Conference Call Presentation contain forward-looking statements regarding the Company and each includes a cautionary statement identifying important factors that could cause actual results to differ materially from those anticipated.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(c) Exhibits.

99.1 Press Release issued by U.S. Bancorp on July 18, 2018, deemed “filed” under the Securities Exchange Act of 1934.

99.2 2Q18 Earnings Conference Call Presentation, deemed “furnished” under the Securities Exchange Act of 1934.

SIGNATURES

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

U.S. BANCORP

By /s/    Craig E. Gifford      

Craig E. Gifford

Executive Vice President and
Controller

DATE: July 18, 2018

EX-99.1

Exhibit 99.1

							U.S. Bancorp Reports Second Quarter 2018 Results •  Record net revenue of $5,640 million, record net income of $1,750 million and record diluted earnings per share of $1.02 •  Industry leading return on average assets of 1.54% and return on average common equity of 15.3%
2Q18 Key Financial Data							2Q18 Highlights
PROFITABILITY METRICS		2Q18		1Q18		2Q17	• Net income of $1,750 million and diluted earnings per common share of $1.02 in the second quarter of 2018 • Industry leading return on average assets of 1.54% and return on average common equity of 15.3% • Return on tangible common equity of 19.8% • Returned 69% of 2Q earnings to shareholders through dividends and share buybacks • Year-over-year positive operating leverage • Net interest income grew 4.9% year-over-year (4.1% on a taxable-equivalent basis) • Total noninterest income grew 2.8% year-over year     ◇  Payment services revenue grew 5.3%     ◇  Trust and investment management fees increased 5.5%      ◇  Mortgage banking revenue decreased 9.9% • Nonperforming assets decreased 19.1% on a year-over-year basis and 9.4% on a linked quarter basis
Return on average assets (%)		1.54		1.50		1.35
Return on average common equity (%)		15.3		14.9		13.4
Return on tangible common equity (%) (a)		19.8		19.3		17.2
Net interest margin (%)		3.13		3.13		3.08
Efficiency ratio (%) (a)		54.8		55.9		54.9
INCOME STATEMENT (b)	2Q18		1Q18		2Q17
Net interest income (taxable-equivalent basis)		$3,226		$3,197		$3,100
Noninterest income		$2,414		$2,272		$2,348
Net income attributable to U.S. Bancorp		$1,750		$1,675		$1,500
Diluted earnings per common share		$1.02		$.96		$.85
Dividends declared per common share		$.30		$.30		$.28
BALANCE SHEET (b)	2Q18		1Q18		2Q17
Average total loans		$278,624		$279,388		$275,528
Average total deposits		$334,822		$334,580		$331,172
Net charge-off ratio		.48%		.49%		.49%
Book value per common share (period end)		$27.02		$26.54		$25.55
Basel III standardized CET1 (c)		9.1%		9.0%		9.3%
(a) See Non-GAAP Financial Measures reconciliation on pages 16-17
(b) Dollars in millions, except per share data
(c) CET1 = Common equity tier 1 capital ratio, 2Q17 as if fully implemented

CEO Commentary

“Our second quarter results were highlighted by record revenue, net income and diluted earnings per common share. We continue to deliver industry-leading profitability metrics, including a return on tangible common equity of 19.8%. This quarter, the Federal Reserve conducted its annual stress test and, as in prior years, the results confirmed our ability to withstand severely adverse economic conditions. Following this exercise, we announced a 23% increase in our quarterly dividend, as well as a 15% increase in our stock repurchase authorization, supporting our commitment to maximize shareholder value. In addition to these solid results, we are investing in our future by expanding our digital offerings, which will allow our customers to access us how, when and where they want and enhance their customer experiences. Each and every day our employees exemplify what being the most trusted choice in banking is all about and I want to thank our entire U.S. Bank team, whose commitment to serving all our customers is what ultimately drives our financial success.”

— Andy Cecere, Chairman, President and CEO, U.S. Bancorp

In the Spotlight

2018 Annual Stress Test

The results of the Federal Reserve Board’s most recent annual stress test continued to demonstrate U.S. Bancorp’s ability to withstand periods of economic stress while remaining profitable.

Automated Investor Offering

Responding to customers’ desire for smart, easy-to-use and safe digital investment tools and strategies, the Company recently launched its new Automated Investor offering. Automated Investor provides an easy-to-use digital advice platform with the power of the Company’s investment expertise through U.S. Bancorp Investments.

2018 Capital Plan

Based on the 2018 stress test results, the Company’s board of directors approved an increase of the Company’s quarterly dividend of 23% to $0.37 per common share beginning in the third quarter of 2018, as well as a new share repurchase program for the year.

New U.S. Bancorp Directors

U.S. Bancorp’s Board of Directors recently elected Elizabeth L. Buse, Yusuf I. Mehdi and Dorothy J. Bridges as directors of the Company. Each new director brings unique insight that is extremely useful to the board and will help further guide the Company’s future success.

        Investor contact: Jennifer Thompson, 612.303.0778  |  Media contact: Stacey Wempen, 612.303.7620

U.S. Bancorp Second Quarter 2018 Results

INCOME STATEMENT HIGHLIGHTS
($ in millions, except per-share data)							Percent Change
	2Q 2018		1Q 2018		2Q 2017		2Q18 vs 1Q18		2Q18 vs 2Q17		YTD 2018		YTD 2017		Percent Change
Net interest income		$3,197		$3,168		$3,049		.9		4.9		$6,365		$6,029		5.6
Taxable-equivalent adjustment		29		29		51		--		(43.1)		58		101		(42.6)
Net interest income (taxable-equivalent basis)		3,226		3,197		3,100		.9		4.1		6,423		6,130		4.8
Noninterest income		2,414		2,272		2,348		6.3		2.8		4,686		4,607		1.7
Total net revenue		5,640		5,469		5,448		3.1		3.5		11,109		10,737		3.5
Noninterest expense		3,085		3,055		2,984		1.0		3.4		6,140		5,893		4.2
Income before provision and income taxes		2,555		2,414		2,464		5.8		3.7		4,969		4,844		2.6
Provision for credit losses		327		341		350		(4.1)		(6.6)		668		695		(3.9)
Income before taxes		2,228		2,073		2,114		7.5		5.4		4,301		4,149		3.7
Income taxes and taxable-equivalent adjustment		470		391		602		20.2		(21.9)		861		1,151		(25.2)
Net income		1,758		1,682		1,512		4.5		16.3		3,440		2,998		14.7
Net (income) loss attributable to noncontrolling interests		(8)		(7)		(12)		(14.3)		33.3		(15)		(25)		40.0
Net income attributable to U.S. Bancorp		$1,750		$1,675		$1,500		4.5		16.7		$3,425		$2,973		15.2
Net income applicable to U.S. Bancorp common shareholders		$1,678		$1,597		$1,430		5.1		17.3		$3,275		$2,817		16.3
Diluted earnings per common share		$1.02		$.96		$.85		6.3		20.0		$1.98		$1.66		19.3

Net income attributable to U.S. Bancorp was $1,750 million for the second quarter of 2018, which was 16.7 percent higher than the $1,500 million for the second quarter of 2017, and 4.5 percent higher than the $1,675 million for the first quarter of 2018. Diluted earnings per common share were $1.02 in the second quarter of 2018, compared with $0.85 in the second quarter of 2017 and $0.96 in the first quarter of 2018.

The increase in net income year-over-year was primarily due to total net revenue growth of 3.5 percent partially offset by noninterest expense growth of 3.4 percent. Net interest income increased 4.9 percent (4.1 percent on a taxable-equivalent basis), mainly a result of the impact of rising interest rates and earning assets growth. Noninterest income increased 2.8 percent driven by higher payment services revenue and trust and investment management fees, partially offset by decreases in mortgage banking revenue and commercial products revenue compared with a year ago. Noninterest expense increased 3.4 percent primarily due to increased compensation expense related to supporting business growth and compliance programs, merit increases, and variable compensation related to revenue growth, along with higher employee benefits expense, partially offset by lower other noninterest expense driven by a reduction in mortgage banking costs.

Net income increased on a linked quarter basis primarily due to total net revenue growth of 3.1 percent. The increase in total net revenue reflected an increase in net interest income of 0.9 percent due to the impact of rising interest rates and an additional day in the second quarter. Noninterest income increased 6.3 percent driven by seasonally higher payment services revenue, higher commercial products revenue, and other noninterest income. The increase in total net revenue was partially offset by an increase in noninterest expense of 1.0 percent primarily driven by increased compensation expense related to seasonal merit increases as well as hiring to support business growth, along with higher marketing and business development costs and professional services expense, partially offset by seasonally lower employee benefits expense.

        2

U.S. Bancorp Second Quarter 2018 Results

NET INTEREST INCOME
(Taxable-equivalent basis; $ in millions)							Change
	2Q 2018		1Q 2018		2Q 2017		2Q18 vs 1Q18		2Q18 vs 2Q17		YTD 2018		YTD 2017		Change
Components of net interest income
Income on earning assets		$3,980		$3,822		$3,572		$158		$408		$7,802		$7,016		$786
Expense on interest-bearing liabilities		754		625		472		129		282		1,379		886		493
Net interest income		$3,226		$3,197		$3,100		$29		$126		$6,423		$6,130		$293
Average yields and rates paid
Earning assets yield		3.86%		3.75%		3.54%		.11%		.32%		3.81%		3.51%		.30%
Rate paid on interest-bearing liabilities		.97		.81		.63		.16		.34		.89		.60		.29
Gross interest margin		2.89%		2.94%		2.91%		(.05)%		(.02)%		2.92%		2.91%		.01%
Net interest margin		3.13%		3.13%		3.08%		--%		.05%		3.13%		3.07%		.06%
Average balances
Investment securities (a)		$114,578		$113,493		$111,368		$1,085		$3,210		$114,039		$111,067		$2,972
Loans		278,624		279,388		275,528		(764)		3,096		279,004		274,350		4,654
Earning assets		412,676		411,849		403,883		827		8,793		412,265		401,595		10,670
Interest-bearing liabilities		312,217		311,615		299,271		602		12,946		311,917		297,729		14,188
(a) Excludes unrealized gain (loss)

Net interest income on a taxable-equivalent basis in the second quarter of 2018 was $3,226 million, an increase of $126 million (4.1 percent) over the second quarter of 2017. The increase was principally driven by earning assets growth and the impact of rising interest rates, partially offset by deposit and funding mix shift and the impact of tax reform which reduced the taxable-equivalent adjustment benefit related to tax exempt assets. Average earning assets were $8.8 billion (2.2 percent) higher than the second quarter of 2017, reflecting increases of $3.1 billion (1.1 percent) in average total loans, $3.2 billion (2.9 percent) in average investment securities, and $1.7 billion (12.3 percent) in average other earning assets.

Net interest income on a taxable-equivalent basis increased $29 million (0.9 percent) on a linked quarter basis primarily driven by the impact of higher rates and an additional day in the second quarter, partially offset by deposit and funding mix shift. Average earning assets were $827 million (0.2 percent) higher on a linked quarter basis, primarily due to an increase of $1.1 billion (1.0 percent) in average investment securities. Average total loans decreased $764 million (0.3 percent) which reflects the sale of approximately $1.5 billion of student loans in the second quarter of 2018. Excluding the impact of the student loan portfolio sale, average total loans increased $767 million (0.3 percent).

The net interest margin in the second quarter of 2018 was 3.13 percent, compared with 3.08 percent in the second quarter of 2017 and 3.13 percent in the first quarter of 2018. The increase in the net interest margin year-over-year was primarily due to higher interest rates, partially offset by loan mix, higher funding costs and the impact of tax reform of 2 basis points. Net interest margin is flat on a linked quarter basis reflecting the impact of higher rates offset by deposit and funding mix shift.

Average investment securities in the second quarter of 2018 were $3.2 billion (2.9 percent) higher year-over-year and $1.1 billion (1.0 percent) higher than the prior quarter. The increases were primarily due to purchases of U.S. government mortgage-backed securities, net of prepayments and maturities, in support of liquidity management.

        3

U.S. Bancorp Second Quarter 2018 Results

AVERAGE LOANS
($ in millions)							Percent Change
	2Q		1Q		2Q		2Q18 vs			2Q18 vs			YTD		YTD		Percent
	2018		2018		2017		1Q18			2Q17			2018		2017		Change
Commercial		$92,835		$91,933		$90,061		1.0			3.1			$92,386		$89,177		3.6
Lease financing		5,518		5,532		5,577		(.3	)		(1.1	)		5,526		5,517		.2
Total commercial		98,353		97,465		95,638		.9			2.8			97,912		94,694		3.4
Commercial mortgages		28,710		29,176		30,627		(1.6	)		(6.3	)		28,942		31,042		(6.8	)
Construction and development		11,147		11,190		11,922		(.4	)		(6.5	)		11,168		11,810		(5.4	)
Total commercial real estate		39,857		40,366		42,549		(1.3	)		(6.3	)		40,110		42,852		(6.4	)
Residential mortgages		60,834		60,174		58,544		1.1			3.9			60,505		58,224		3.9
Credit card		21,220		21,284		20,631		(.3	)		2.9			21,252		20,737		2.5
Retail leasing		8,150		7,982		7,181		2.1			13.5			8,067		6,827		18.2
Home equity and second mortgages		16,048		16,195		16,252		(.9	)		(1.3	)		16,121		16,256		(.8	)
Other		31,265		32,874		31,194		(4.9	)		.2			32,065		31,125		3.0
Total other retail		55,463		57,051		54,627		(2.8	)		1.5			56,253		54,208		3.8
Total loans, excluding covered loans		275,727		276,340		271,989		(.2	)		1.4			276,032		270,715		2.0
Covered loans		2,897		3,048		3,539		(5.0	)		(18.1	)		2,972		3,635		(18.2	)
Total loans		$278,624		$279,388		$275,528		(.3	)		1.1			$279,004		$274,350		1.7

Average total loans were $3.1 billion (1.1 percent) higher than the second quarter of 2017 (1.8 percent excluding the impact of the student loan portfolio sale). The increase was due to growth in total commercial loans (2.8 percent), residential mortgages (3.9 percent), and retail leasing (13.5 percent). These increases were partially offset by a decrease in total commercial real estate loans (6.3 percent) due to disciplined underwriting and customers paying down balances. Loan growth was also impacted by continued run-off of the covered loans portfolio (18.1 percent). Average total loans were $764 million (0.3 percent) lower than the first quarter of 2018 primarily due to the impact of the student loan portfolio sale. Excluding this impact, average total loans increased 0.3 percent driven by growth in residential mortgages (1.1 percent), total commercial loans (0.9 percent), and retail leasing (2.1 percent), partially offset by continued pay-offs of commercial real estate loans (1.3 percent) and run-off of covered loans (5.0 percent).

        4

U.S. Bancorp Second Quarter 2018 Results

AVERAGE DEPOSITS
($ in millions)							Percent Change
	2Q		1Q		2Q		2Q18 vs			2Q18 vs			YTD		YTD		Percent
	2018		2018		2017		1Q18			2Q17			2018		2017		Change
Noninterest-bearing deposits		$78,987		$79,482		$82,710		(.6	)		(4.5	)		$79,234		$81,729		(3.1	)
Interest-bearing savings deposits
Interest checking		69,918		70,358		67,290		(.6	)		3.9			70,136		66,490		5.5
Money market savings		103,333		103,367		106,777		--			(3.2	)		103,350		107,763		(4.1	)
Savings accounts		45,069		44,388		43,524		1.5			3.5			44,730		43,069		3.9
Total savings deposits		218,320		218,113		217,591		.1			.3			218,216		217,322		.4
Time deposits		37,515		36,985		30,871		1.4			21.5			37,252		30,759		21.1
Total interest-bearing deposits		255,835		255,098		248,462		.3			3.0			255,468		248,081		3.0
Total deposits		$334,822		$334,580		$331,172		.1			1.1			$334,702		$329,810		1.5

Average total deposits for the second quarter of 2018 were $3.7 billion (1.1 percent) higher than the second quarter of 2017. Average noninterest-bearing deposits decreased $3.7 billion (4.5 percent) year-over-year primarily due to decreases in Corporate and Commercial Banking and Wealth Management and Investment Services. Average total savings deposits were $729 million (0.3 percent) higher year-over-year driven by growth in Consumer and Business Banking, partially offset by decreases in Corporate and Commercial Banking and Wealth Management and Investment Services. Average time deposits were $6.6 billion (21.5 percent) higher than the prior year quarter. Changes in time deposits are largely related to those deposits managed as an alternative to other funding sources such as wholesale borrowing, based largely on relative pricing and liquidity characteristics.

Average total deposits increased $242 million (0.1 percent) from the first quarter of 2018. On a linked quarter basis, average noninterest-bearing deposits decreased $495 million (0.6 percent) primarily due to a decrease in Corporate and Commercial Banking, partially offset by an increase in Wealth Management and Investment Services. Average total savings deposits increased $207 million (0.1 percent) reflecting an increase in Consumer and Business Banking, partially offset by a decline in Corporate and Commercial Banking. Average time deposits, which are managed based on funding needs, relative pricing and liquidity characteristics, increased $530 million (1.4 percent).

        5

U.S. Bancorp Second Quarter 2018 Results

NONINTEREST INCOME
($ in millions)							Percent Change
	2Q		1Q		2Q		2Q18 vs		2Q18 vs		YTD		YTD		Percent
	2018		2018		2017		1Q18		2Q17		2018		2017		Change
Credit and debit card revenue		$351		$324		$330		8.3		6.4		$675		$629		7.3
Corporate payment products revenue		158		154		140		2.6		12.9		312		277		12.6
Merchant processing services		387		363		381		6.6		1.6		750		735		2.0
ATM processing services		90		79		75		13.9		20.0		169		146		15.8
Trust and investment management fees		401		398		380		.8		5.5		799		748		6.8
Deposit service charges		183		182		179		.5		2.2		365		351		4.0
Treasury management fees		155		150		160		3.3		(3.1)		305		313		(2.6)
Commercial products revenue		234		220		243		6.4		(3.7)		454		490		(7.3)
Mortgage banking revenue		191		184		212		3.8		(9.9)		375		419		(10.5)
Investment products fees		47		46		44		2.2		6.8		93		86		8.1
Securities gains (losses), net		10		5		9		nm		11.1		15		38		(60.5)
Other		207		167		195		24.0		6.2		374		375		(.3)
Total noninterest income		$2,414		$2,272		$2,348		6.3		2.8		$4,686		$4,607		1.7

Second quarter noninterest income of $2,414 million was $66 million (2.8 percent) higher than the second quarter of 2017 led by strong growth in payment services revenue and trust and investment management fees. ATM processing services revenue also increased year-over-year. These increases were partially offset by lower mortgage banking revenue and commercial products revenue which were impacted by industry trends in these revenue categories. Payment services revenue increased $45 million (5.3 percent) due to higher credit and debit card revenue of $21 million (6.4 percent), an increase in corporate payment products revenue of $18 million (12.9 percent), and higher merchant processing services of $6 million (1.6 percent) all driven by higher sales volumes. Trust and investment management fees increased $21 million (5.5 percent) due to business growth and favorable market conditions. ATM processing services revenue increased $15 million (20.0 percent) primarily due to higher transaction volumes. The decrease in mortgage banking revenue of $21 million (9.9 percent) was primarily due to lower mortgage production, partially offset by a favorable change in the valuation of mortgage servicing rights, net of hedging activities. Treasury management fees declined $5 million (3.1 percent) reflecting core business growth offset by the impact of earnings credits during rising interest rates. In addition, the decrease in commercial products revenue of $9 million (3.7 percent) was mainly due to lower trading revenue, commercial leasing fees, and loan fees, partially offset by higher foreign currency customer activity.

Noninterest income was $142 million (6.3 percent) higher in the second quarter of 2018 compared with the first quarter of 2018 reflecting stronger payment services revenue as credit and debit card revenue grew $27 million (8.3 percent) due to seasonally higher sales volumes and merchant processing services increased $24 million (6.6 percent) primarily due to higher volumes. Commercial products revenue increased $14 million (6.4 percent) due to stronger capital markets volume. Other noninterest income increased $40 million (24.0 percent), which included the student loan portfolio sale and equity investment income.

        6

U.S. Bancorp Second Quarter 2018 Results

NONINTEREST EXPENSE
($ in millions)							Percent Change
	2Q 2018		1Q 2018		2Q 2017		2Q18 vs 1Q18			2Q18 vs 2Q17			YTD 2018		YTD 2017		Percent Change
Compensation	$	1,542	$	1,523	$	1,416		1.2			8.9		$	3,065	$	2,807		9.2
Employee benefits		299		330		274		(9.4	)		9.1			629		575		9.4
Net occupancy and equipment		262		265		255		(1.1	)		2.7			527		502		5.0
Professional services		95		83		105		14.5			(9.5	)		178		201		(11.4	)
Marketing and business development		111		97		109		14.4			1.8			208		199		4.5
Technology and communications		242		235		223		3.0			8.5			477		440		8.4
Postage, printing and supplies		80		80		81		--			(1.2	)		160		162		(1.2	)
Other intangibles		40		39		43		2.6			(7.0	)		79		87		(9.2	)
Other		414		403		478		2.7			(13.4	)		817		920		(11.2	)
Total noninterest expense	$	3,085	$	3,055	$	2,984		1.0			3.4		$	6,140	$	5,893		4.2

Second quarter noninterest expense of $3,085 million was $101 million (3.4 percent) higher than the second quarter of 2017 primarily due to higher personnel costs and technology investment, partially offset by lower other noninterest expense. Compensation expense increased $126 million (8.9 percent) principally due to the impact of hiring to support business growth and compliance programs, merit increases, and higher variable compensation related to business production. Employee benefits expense increased $25 million (9.1 percent) primarily driven by increased medical costs and staffing. Other noninterest expense decreased $64 million (13.4 percent) due to lower mortgage servicing-related costs.

Noninterest expense increased $30 million (1.0 percent) on a linked quarter basis primarily due to higher compensation expense, reflecting the impact of seasonal merit increases as well as hiring to support business growth, and higher variable compensation related to business production. Marketing and business development and professional services expense are also seasonally higher during the second quarter. These increases were largely offset by a seasonal decrease in employee benefits due to higher payroll taxes during the first quarter of each year.

Provision for Income Taxes

The provision for income taxes for the second quarter of 2018 resulted in a tax rate of 21.1 percent on a taxable-equivalent basis (effective tax rate of 20.1 percent), compared with 28.5 percent (effective tax rate of 26.7 percent) in the second quarter of 2017, and 18.9 percent on a taxable-equivalent basis (effective tax rate of 17.7 percent) in the first quarter of 2018. The lower 2018 tax rates reflect the tax reform legislation enacted during the fourth quarter of 2017. In addition, the first quarter of 2018 reflected the tax benefit of restricted stock vesting that occurs principally in the first quarter of each year, as well as a favorable settlement of tax matters.

        7

U.S. Bancorp Second Quarter 2018 Results

ALLOWANCE FOR CREDIT LOSSES
($ in millions)	2Q				1Q				4Q				3Q				2Q
	2018		% (b)		2018		% (b)		2017		% (b)		2017		% (b)		2017		% (b)
Balance, beginning of period		$4,417				$4,417				$4,407				$4,377				$4,366
Net charge-offs
Commercial		54		.23		56		.25		22		.09		79		.34		75	.33
Lease financing		4		.29		4		.29		6		.44		4		.29		3	.22
Total commercial		58		.24		60		.25		28		.11		83		.34		78	.33
Commercial mortgages		--		--		(4)		(.06)		18		.24		(2)		(.03)		(7)	(.09)
Construction and development		--		--		1		.04		--		--		(5)		(.17)		(2)	(.07)
Total commercial real estate		--		--		(3)		(.03)		18		.17		(7)		(.07)		(9)	(.08)
Residential mortgages		4		.03		7		.05		10		.07		7		.05		8	.05
Credit card		210		3.97		211		4.02		205		3.83		187		3.55		204	3.97
Retail leasing		3		.15		3		.15		3		.15		2		.10		2	.11
Home equity and second mortgages		(2)		(.05)		(1)		(.03)		(2)		(.05)		(1)		(.02)		(1)	(.02)
Other		59		.76		64		.79		63		.76		59		.73		58	.75
Total other retail		60		.43		66		.47		64		.44		60		.42		59	.43
Total net charge-offs, excluding covered loans		332		.48		341		.50		325		.47		330		.48		340	.50
Covered loans		--		--		--		--		--		--		--		--		--	--
Total net charge-offs		332		.48		341		.49		325		.46		330		.47		340	.49
Provision for credit losses		327				341				335				360				350
Other changes (a)		(1)				--				--				--				1
Balance, end of period		$4,411				$4,417				$4,417				$4,407				$4,377
Components
Allowance for loan losses		$3,920				$3,918				$3,925				$3,908				$3,856
Liability for unfunded credit commitments		491				499				492				499				521
Total allowance for credit losses		$4,411				$4,417				$4,417				$4,407				$4,377
Gross charge-offs		$437				$453				$464				$433				$437
Gross recoveries		$105				$112				$139				$103				$97
Allowance for credit losses as a percentage of
Period-end loans, excluding covered loans		1.58				1.60				1.58				1.59				1.59
Nonperforming loans, excluding covered loans		484				431				438				425				385
Nonperforming assets, excluding covered assets		412				373				374				359				331
Period-end loans		1.57				1.59				1.58				1.58				1.58
Nonperforming loans		484				431				438				426				383
Nonperforming assets		404				367				368				352				324
(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

        8

U.S. Bancorp Second Quarter 2018 Results

The Company’s provision for credit losses for the second quarter of 2018 was $327 million, which was $14 million (4.1 percent) lower than the prior quarter and $23 million (6.6 percent) lower than the second quarter of 2017. Credit quality was relatively stable compared with a year ago and the first quarter of 2018 with lower nonperforming assets.

Total net charge-offs in the second quarter of 2018 were $332 million, compared with $341 million in the first quarter of 2018, and $340 million in the second quarter of 2017. Net charge-offs decreased $9 million (2.6 percent) compared with the first quarter of 2018 mainly due to lower total other retail net charge-offs, partially offset by lower commercial real estate recoveries. Net charge-offs decreased $8 million (2.4 percent) compared with the second quarter of 2017 primarily due to lower commercial net charge-offs, partially offset by lower commercial mortgage recoveries and higher credit card net charge-offs. The net charge-off ratio was 0.48 percent in the second quarter of 2018, compared with 0.49 percent in the first quarter of 2018 and in the second quarter of 2017.

The allowance for credit losses was $4,411 million at June 30, 2018, compared with $4,417 million at March 31, 2018, and $4,377 million at June 30, 2017. The ratio of the allowance for credit losses to period-end loans was 1.57 percent at June 30, 2018, compared with 1.59 percent at March 31, 2018, and 1.58 percent at June 30, 2017. The ratio of the allowance for credit losses to nonperforming loans was 484 percent at June 30, 2018, compared with 431 percent at March 31, 2018, and 383 percent at June 30, 2017.

Nonperforming assets were $1,091 million at June 30, 2018, compared with $1,204 million at March 31, 2018, and $1,349 million at June 30, 2017. The ratio of nonperforming assets to loans and other real estate was 0.39 percent at June 30, 2018, compared with 0.43 percent at March 31, 2018, and 0.49 percent at June 30, 2017. The year-over-year decrease in nonperforming assets was driven by improvements in nonperforming residential mortgages, total commercial loans, and other real estate owned, partially offset by increases in nonperforming other retail loans and other nonperforming assets. Accruing loans 90 days or more past due were $640 million ($514 million excluding covered loans) at June 30, 2018, compared with $702 million ($566 million excluding covered loans) at March 31, 2018, and $639 million ($477 million excluding covered loans) at June 30, 2017.

DELINQUENT LOAN RATIOS AS A PERCENT OF ENDING LOAN BALANCES
(Percent)	Jun 30 2018		Mar 31 2018		Dec 31 2017		Sep 30 2017		Jun 30 2017
Delinquent loan ratios - 90 days or more past due excluding nonperforming loans
Commercial		.06		.06		.06		.05		.05
Commercial real estate		.01		.01		.01		.01		--
Residential mortgages		.18		.22		.22		.18		.20
Credit card		1.15		1.29		1.28		1.20		1.10
Other retail		.16		.18		.17		.15		.14
Total loans, excluding covered loans		.19		.21		.21		.18		.17
Covered loans		4.46		4.57		4.74		4.66		4.71
Total loans		.23		.25		.26		.23		.23
Delinquent loan ratios - 90 days or more past due including nonperforming loans
Commercial		.28		.37		.31		.33		.39
Commercial real estate		.27		.31		.37		.30		.29
Residential mortgages		.84		.93		.96		.98		1.10
Credit card		1.15		1.29		1.28		1.20		1.10
Other retail		.48		.48		.46		.43		.42
Total loans, excluding covered loans		.51		.58		.57		.55		.59
Covered loans		4.68		4.77		4.93		4.84		5.06
Total loans		.55		.62		.62		.60		.64

        9

U.S. Bancorp Second Quarter 2018 Results

ASSET QUALITY (a)
($ in millions)
	Jun 30 2018		Mar 31 2018		Dec 31 2017		Sep 30 2017		Jun 30 2017
Nonperforming loans
Commercial		$199		$274		$225		$231		$283
Lease financing		25		27		24		38		39
Total commercial		224		301		249		269		322
Commercial mortgages		72		86		108		89		84
Construction and development		32		33		34		33		35
Total commercial real estate		104		119		142		122		119
Residential mortgages		400		430		442		474		530
Credit card		--		--		1		1		1
Other retail		178		168		168		163		158
Total nonperforming loans, excluding covered loans		906		1,018		1,002		1,029		1,130
Covered loans		6		6		6		6		12
Total nonperforming loans		912		1,024		1,008		1,035		1,142
Other real estate		108		124		141		164		157
Covered other real estate		20		20		21		26		25
Other nonperforming assets		51		36		30		26		25
Total nonperforming assets		$1,091		$1,204		$1,200		$1,251		$1,349
Total nonperforming assets, excluding covered assets		$1,065		$1,178		$1,173		$1,219		$1,312
Accruing loans 90 days or more past due, excluding covered loans		$514		$566		$572		$497		$477
Accruing loans 90 days or more past due		$640		$702		$720		$649		$639
Performing restructured loans, excluding GNMA and covered loans		$2,164		$2,190		$2,306		$2,419		$2,473
Performing restructured GNMA and covered loans		$1,695		$1,598		$1,713		$1,600		$1,803
Nonperforming assets to loans plus ORE, excluding covered assets (%)		.38		.43		.42		.44		.48
Nonperforming assets to loans plus ORE (%)		.39		.43		.43		.45		.49
(a) Throughout this document, nonperforming assets and related ratios do not include accruing loans 90 days or more past due

        10

U.S. Bancorp Second Quarter 2018 Results

COMMON SHARES
(Millions)	2Q 2018		1Q 2018		4Q 2017		3Q 2017		2Q  2017
Beginning shares outstanding		1,649		1,656		1,667		1,679	1,692
Shares issued for stock incentive plans, acquisitions and other corporate purposes		--		4		1		--	1
Shares repurchased		(13)		(11)		(12)		(12)	(14)
Ending shares outstanding		1,636		1,649		1,656		1,667	1,679

CAPITAL POSITION
($ in millions)	Jun 30 2018			Mar 31 2018			Dec 31 2017			Sep 30 2017			Jun 30 2017
Total U.S. Bancorp shareholders’ equity	$	49,628		$	49,187		$	49,040		$	48,723		$	48,320
Basel III Standardized Approach (a)
Common equity tier 1 capital	$	34,161		$	33,539		$	34,369		$	34,876		$	34,408
Tier 1 capital		39,611			38,991			39,806			40,411			39,943
Total risk-based capital		47,258			46,640			47,503			48,104			47,824
Fully implemented common equity tier 1 capital ratio (a)		9.1	%		9.0	%		9.1	% (b)		9.4	% (b)		9.3	% (b)
Tier 1 capital ratio		10.5			10.4			10.8			11.1			11.1
Total risk-based capital ratio		12.6			12.5			12.9			13.2			13.2
Leverage ratio		8.9			8.8			8.9			9.1			9.1
Basel III Advanced Approaches (a)
Fully implemented common equity tier 1 capital ratio (a)		11.6			11.5			11.6	(b)		11.8	(b)		11.7	(b)
Tangible common equity to tangible assets (b)		7.8			7.7			7.6			7.7			7.5
Tangible common equity to risk-weighted assets (b)		9.3			9.3			9.4			9.5			9.4
Common equity tier 1 capital ratio calculated under the transitional standardized approach (a)		--			--			9.3			9.6			9.5
Common equity tier 1 capital ratio calculated under the transitional advanced approaches (a)		--			--			12.0			12.1			12.0
(a) Beginning January 1, 2018, the regulatory capital requirements fully reflect implementation of Basel III. Prior to 2018, the Company’s capital ratios reflected certain transitional adjustments. 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. (b) See Non-GAAP Financial Measures reconciliation on page 16

Total U.S. Bancorp shareholders’ equity was $49.6 billion at June 30, 2018, compared with $49.2 billion at March 31, 2018, and $48.3 billion at June 30, 2017. During the second quarter, the Company returned 69 percent of earnings to shareholders through dividends and share buybacks.

All regulatory ratios continue to be in excess of “well-capitalized” requirements. The common equity tier 1 capital to risk-weighted assets ratio using the Basel III standardized approach was 9.1 percent at June 30, 2018, compared with 9.0 percent at March 31, 2018, and 9.5 percent at June 30, 2017. The common equity tier 1 capital to risk-weighted assets ratio using the Basel III advanced approaches method was 11.6 percent at June 30, 2018, compared with 11.5 percent at March 31, 2018, and 12.0 percent at June 30, 2017.

        11

U.S. Bancorp Second Quarter 2018 Results

  Investor Conference Call

On Wednesday, July 18, 2018, at 8:00 a.m. CDT, Andy Cecere, Chairman, President and Chief Executive Officer, and Terry Dolan, Vice Chairman and Chief Financial Officer, will host a conference call to review the financial results. The conference call will be available online or by telephone. To access the webcast and presentation, visit U.S. Bancorp’s website at usbank.com and click on “About US”, “Investor Relations” and “Webcasts & Presentations.” 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 9049069. For those unable to participate during the live call, a recording will be available at approximately 11:00 a.m. CDT on Wednesday, July 18 and will be accessible until Wednesday, July 25 at 11:00 p.m. CDT. To access the recorded message within the United States and Canada, please 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 9049069.

  About U.S. Bancorp

U.S. Bancorp, with 74,000 employees and $461 billion in assets as of June 30, 2018, is the parent company of U.S. Bank, the fifth-largest commercial bank in the United States. The Minneapolis-based bank blends its relationship teams, branches and ATM network with mobile and online tools that allow customers to bank how, when and where they prefer. U.S. Bank is committed to serving its millions of retail, business, wealth management, payment, commercial and corporate, and investment services customers across the country and around the world as a trusted financial partner, a commitment recognized by the Ethisphere Institute naming the bank a 2018 World’s Most Ethical Company. Visit U.S. Bank at www.usbank.com or follow on social media to stay up to date with company news.

  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, changes to statutes, regulations, or regulatory policies or practices could affect U.S. Bancorp in substantial and unpredictable ways. 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 its investment securities; 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, market risk, operational risk, compliance risk, strategic risk, interest rate risk, liquidity risk and reputational risk.

For discussion of these and other risks that could 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, 2017, on file with the Securities and Exchange Commission, including the sections entitled “Corporate Risk Profile” and “Risk Factors” 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.

        12

U.S. Bancorp Second Quarter 2018 Results

  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

• Return on tangible common equity

These capital measures are viewed by management as useful additional methods of evaluating the Company’s utilization of its capital held and the level of capital available to withstand unexpected negative 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 capital measures are not defined in generally accepted accounting principles (“GAAP”) or are not defined in federal banking regulations. As a result, these capital measures disclosed by the Company may be considered non-GAAP financial measures. In addition, certain capital measures related to prior periods are presented on the same basis as those capital measures in the current period. The effective capital ratios defined by banking regulations for these periods were subject to certain transitional provisions. Management believes this information helps investors assess trends in the Company’s capital adequacy.

The Company also discloses net interest income and related ratios and analysis on a taxable-equivalent basis, which may also be considered non-GAAP financial measures. The Company believes this presentation to be the preferred industry measurement of net interest income as it provides a relevant comparison of net interest income arising from taxable and tax-exempt sources. In addition, certain performance measures, including the efficiency ratio and net interest margin utilize net interest income on a taxable-equivalent basis.

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.

        13

CONSOLIDATED STATEMENT OF INCOME
	Three Months Ended						Six Months Ended
(Dollars and Shares in Millions, Except Per Share Data)	June 30,						June 30,
(Unaudited)	2018			2017			2018			2017
Interest Income
Loans		$3,197			$2,889			$6,292			$5,679
Loans held for sale		39			29			72			64
Investment securities		653			555			1,266			1,085
Other interest income		59			46			109			84
Total interest income		3,948			3,519			7,739			6,912
Interest Expense
Deposits		427			238			772			437
Short-term borrowings		86			33			161			57
Long-term debt		238			199			441			389
Total interest expense		751			470			1,374			883
Net interest income		3,197			3,049			6,365			6,029
Provision for credit losses		327			350			668			695
Net interest income after provision for credit losses		2,870			2,699			5,697			5,334
Noninterest Income
Credit and debit card revenue		351			330			675			629
Corporate payment products revenue		158			140			312			277
Merchant processing services		387			381			750			735
ATM processing services		90			75			169			146
Trust and investment management fees		401			380			799			748
Deposit service charges		183			179			365			351
Treasury management fees		155			160			305			313
Commercial products revenue		234			243			454			490
Mortgage banking revenue		191			212			375			419
Investment products fees		47			44			93			86
Securities gains (losses), net		10			9			15			38
Other		207			195			374			375
Total noninterest income		2,414			2,348			4,686			4,607
Noninterest Expense
Compensation		1,542			1,416			3,065			2,807
Employee benefits		299			274			629			575
Net occupancy and equipment		262			255			527			502
Professional services		95			105			178			201
Marketing and business development		111			109			208			199
Technology and communications		242			223			477			440
Postage, printing and supplies		80			81			160			162
Other intangibles		40			43			79			87
Other		414			478			817			920
Total noninterest expense		3,085			2,984			6,140			5,893
Income before income taxes		2,199			2,063			4,243			4,048
Applicable income taxes		441			551			803			1,050
Net income		1,758			1,512			3,440			2,998
Net (income) loss attributable to noncontrolling interests		(8	)		(12	)		(15	)		(25	)
Net income attributable to U.S. Bancorp		$1,750			$1,500			$3,425			$2,973
Net income applicable to U.S. Bancorp common shareholders		$1,678			$1,430			$3,275			$2,817
Earnings per common share		$1.02			$.85			$1.99			$1.67
Diluted earnings per common share		$1.02			$.85			$1.98			$1.66
Dividends declared per common share		$.30			$.28			$.60			$.56
Average common shares outstanding		1,642			1,684			1,647			1,689
Average diluted common shares outstanding		1,646			1,690			1,651			1,695

        14

CONSOLIDATED ENDING BALANCE SHEET
	June 30,			December 31,			June 30,
(Dollars in Millions)	2018			2017			2017
Assets		(Unaudited	)					(Unaudited	)
Cash and due from banks		$19,021			$19,505			$28,964
Investment securities
Held-to-maturity		46,055			44,362			43,659
Available-for-sale		66,347			68,137			67,455
Loans held for sale		3,256			3,554			3,661
Loans
Commercial		99,357			97,561			96,836
Commercial real estate		39,399			40,463			41,908
Residential mortgages		61,309			59,783			58,796
Credit card		21,566			22,180			20,861
Other retail		55,723			57,324			55,445
Total loans, excluding covered loans		277,354			277,311			273,846
Covered loans		2,823			3,121			3,437
Total loans		280,177			280,432			277,283
Less allowance for loan losses		(3,920	)		(3,925	)		(3,856	)
Net loans		276,257			276,507			273,427
Premises and equipment		2,431			2,432			2,413
Goodwill		9,425			9,434			9,361
Other intangible assets		3,415			3,228			3,216
Other assets		35,122			34,881			31,688
Total assets		$461,329			$462,040			$463,844
Liabilities and Shareholders’ Equity
Deposits
Noninterest-bearing		$82,215			$87,557			$93,029
Interest-bearing		257,865			259,658			254,233
Total deposits		340,080			347,215			347,262
Short-term borrowings		18,136			16,651			14,412
Long-term debt		37,172			32,259			37,814
Other liabilities		15,684			16,249			15,407
Total liabilities		411,072			412,374			414,895
Shareholders’ equity
Preferred stock		5,419			5,419			5,419
Common stock		21			21			21
Capital surplus		8,468			8,464			8,425
Retained earnings		56,742			54,142			52,033
Less treasury stock		(18,707	)		(17,602	)		(16,332	)
Accumulated other comprehensive income (loss)		(2,315	)		(1,404	)		(1,246	)
Total U.S. Bancorp shareholders’ equity		49,628			49,040			48,320
Noncontrolling interests		629			626			629
Total equity		50,257			49,666			48,949
Total liabilities and equity		$461,329			$462,040			$463,844

        15

NON-GAAP FINANCIAL MEASURES
	June 30,			March 31,			December 31,				September 30,			June 30,
(Dollars in Millions, Unaudited)	2018			2018				2017			2017			2017
Total equity		$50,257			$49,812				$49,666			$49,351		$48,949
Preferred stock		(5,419	)		(5,419	)			(5,419	)		(5,419	)	(5,419)
Noncontrolling interests		(629	)		(625	)			(626	)		(628	)	(629)
Goodwill (net of deferred tax liability) (1)		(8,585	)		(8,609	)			(8,613	)		(8,141	)	(8,181)
Intangible assets, other than mortgage servicing rights		(571	)		(608	)			(583	)		(595	)	(634)
Tangible common equity (a)		35,053			34,551				34,425			34,568		34,086
Total assets		461,329			460,119				462,040			459,227		463,844
Goodwill (net of deferred tax liability) (1)		(8,585	)		(8,609	)			(8,613	)		(8,141	)	(8,181)
Intangible assets, other than mortgage servicing rights		(571	)		(608	)			(583	)		(595	)	(634)
Tangible assets (b)		452,173			450,902				452,844			450,491		455,029
Risk-weighted assets, determined in accordance with the Basel III standardized approach (c)		375,466	*		373,141				367,771			363,957		361,164
Tangible common equity (as calculated above)									34,425			34,568		34,086
Adjustments (2)									(550	)		(52	)	(51)
Common equity tier 1 capital estimated for the Basel III fully implemented standardized and advanced approaches (d)									33,875			34,516		34,035
Risk-weighted assets, determined in accordance with prescribed transitional standardized approach regulatory requirements									367,771			363,957		361,164
Adjustments (3)									4,473			3,907		3,967
Risk-weighted assets estimated for the Basel III fully implemented standardized approach (e)									372,244			367,864		365,131
Risk-weighted assets, determined in accordance with prescribed transitional advanced approaches regulatory requirements									287,211			287,800		287,124
Adjustments (4)									4,769			4,164		4,231
Risk-weighted assets estimated for the Basel III fully implemented advanced approaches (f)									291,980			291,964		291,355
Ratios *
Tangible common equity to tangible assets (a)/(b)		7.8	%		7.7		%		7.6	%		7.7	%	7.5	%
Tangible common equity to risk-weighted assets (a)/(c)		9.3			9.3				9.4			9.5		9.4
Common equity tier 1 capital to risk-weighted assets estimated for the Basel III fully implemented standardized approach (d)/(e)									9.1			9.4		9.3
Common equity tier 1 capital to risk-weighted assets estimated for the Basel III fully implemented advanced approaches (d)/(f)									11.6			11.8		11.7
	Three Months Ended
	June 30,			March 31,			December 31,				September 30,			June 30,
	2018			2018				2017			2017			2017
Net income applicable to U.S. Bancorp common shareholders		$1,678			$1,597				$1,611			$1,485		$1,430
Intangibles amortization (net-of-tax)		32			31				28			29		28
Net income applicable to U.S. Bancorp common shareholders, excluding intangibles amortization		1,710			1,628				1,639			1,514		1,458
Annualized net income applicable to U.S. Bancorp common shareholders, excluding intangibles amortization (g)		6,859			6,602				6,503			6,007		5,848
Average total equity		49,950			49,450				49,461			49,447		48,909
Less: Average preferred stock		5,419			5,419				5,419			5,419		5,419
Less: Average noncontrolling interests		628			625				627			628		636
Less: Average goodwill (net of deferred tax liability) (1)		8,602			8,627				8,154			8,153		8,160
Less: Average intangible assets, other than mortgage servicing rights		588			603				591			615		650
Average U.S. Bancorp common shareholders’ equity, excluding intangible assets (h)		34,713			34,176				34,670			34,632		34,044
Return on tangible common equity (g)/(h)		19.8	%		19.3		%		18.8	%		17.3	%	17.2	%

  * 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.

            16

NON-GAAP FINANCIAL MEASURES
	Three Months Ended											Six Months Ended
(Dollars in Millions, Unaudited)		June 30, 2018	March 31, 2018		December 31, 2017		September 30, 2017		June 30, 2017				June 30, 2018	June 30, 2017
Net interest income		$3,197		$3,168		$3,175		$3,176		$3,049			$6,365		$6,029
Taxable-equivalent adjustment (1)		29		29		53		51		51			58		101
Net interest income, on a taxable-equivalent basis		3,226		3,197		3,228		3,227		3,100			6,423		6,130
Net interest income, on a taxable-equivalent basis (as calculated above)		3,226		3,197		3,228		3,227		3,100			6,423		6,130
Noninterest income		2,414		2,272		2,370		2,340		2,348			4,686		4,607
Less: Securities gains (losses), net		10		5		10		9		9			15		38
Total net revenue, excluding net securities gains (losses) (a)		5,630		5,464		5,588		5,558		5,439			11,094		10,699
Noninterest expense (b)		3,085		3,055		3,899		2,998		2,984			6,140		5,893
Less: Intangible amortization		40		39		44		44		43			79		87
Noninterest expense, excluding intangible amortization (c)		3,045		3,016		3,855		2,954		2,941			6,061		5,806
Efficiency ratio (b)/(a)		54.8	%	55.9	%	69.8	%	53.9	%	54.9	%		55.3	%	55.1	%
Tangible efficiency ratio (c)/(a)		54.1		55.2		69.0		53.1		54.1			54.6		54.3

(1) Interest and rates are presented on a fully taxable-equivalent basis based on a federal income tax rate of 21 percent for 2018 and 35 percent for 2017.

        17

LINE OF BUSINESS FINANCIAL PERFORMANCE (a)
($ in millions)	Net Income Attributable											Net Income Attributable
	to U.S. Bancorp						Percent Change					to U.S. Bancorp							2Q 2018
Business Line	2Q   2018		1Q 2018		2Q 2017		2Q18 vs 1Q18			2Q18 vs 2Q17		YTD 2018		YTD 2017		Percent Change			Earnings Composition
Corporate and Commercial
Banking		$417		$391		$376		6.6			10.9		$808		$714		13.2			24	%
Consumer and Business
Banking		536		537		433		(.2	)		23.8		1,073		845		27.0			30
Wealth Management and
Investment Services		205		220		178		(6.8	)		15.2		425		333		27.6			12
Payment Services		361		342		282		5.6			28.0		703		580		21.2			21
Treasury and Corporate
Support		231		185		231		24.9			--		416		501		(17.0	)		13
Consolidated Company		$1,750		$1,675		$1,500		4.5			16.7		$3,425		$2,973		15.2			100	%
(a) preliminary data

Lines of Business

The Company’s major lines of business are Corporate and Commercial Banking, Consumer and Business Banking, Wealth Management and Investment 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 2018, certain organization and methodology changes were made and, accordingly, prior period results were restated and presented on a comparable basis.

        2

CORPORATE AND COMMERCIAL BANKING (a)
($ in millions)								Percent Change
	2Q 2018			1Q 2018		2Q   2017		2Q18 vs 1Q18			2Q18 vs 2Q17			YTD 2018		YTD   2017		Percent Change
Condensed Income Statement
Net interest income (taxable-equivalent basis)		$725			$722		$725		.4			--			$1,447		$1,433		1.0
Noninterest income		223			208		242		7.2			(7.9	)		431		490		(12.0	)
Securities gains (losses), net		--			--		--		--			--			--		(3)		nm
Total net revenue		948			930		967		1.9			(2.0	)		1,878		1,920		(2.2	)
Noninterest expense		403			394		393		2.3			2.5			797		778		2.4
Other intangibles		1			1		1		--			--			2		2		--
Total noninterest expense		404			395		394		2.3			2.5			799		780		2.4
Income before provision and taxes		544			535		573		1.7			(5.1	)		1,079		1,140		(5.4	)
Provision for credit losses		(12	)		14		(18)		nm			33.3			2		18		(88.9	)
Income before income taxes		556			521		591		6.7			(5.9	)		1,077		1,122		(4.0	)
Income taxes and taxable-equivalent adjustment		139			130		215		6.9			(35.3	)		269		408		(34.1	)
Net income		417			391		376		6.6			10.9			808		714		13.2
Net (income) loss attributable to noncontrolling interests		--			--		--		--			--			--		--		--
Net income attributable to U.S. Bancorp		$417			$391		$376		6.6			10.9			$808		$714		13.2
Average Balance Sheet Data
Loans		$93,517			$93,955		$94,225		(.5	)		(.8	)		$93,735		$93,981		(.3	)
Other earning assets		3,092			2,858		3,107		8.2			(.5	)		2,976		2,995		(.6	)
Goodwill		1,647			1,647		1,647		--			--			1,647		1,647		--
Other intangible assets		11			12		14		(8.3	)		(21.4	)		11		14		(21.4	)
Assets		102,585			102,645		103,105		(.1	)		(.5	)		102,615		102,712		(.1	)
Noninterest-bearing deposits		33,379			34,410		36,438		(3.0	)		(8.4	)		33,893		36,697		(7.6	)
Interest-bearing deposits		70,363			69,953		68,881		.6			2.2			70,159		69,715		.6
Total deposits		103,742			104,363		105,319		(.6	)		(1.5	)		104,052		106,412		(2.2	)
Total U.S. Bancorp shareholders’ equity		10,500			10,418		9,921		.8			5.8			10,459		9,801		6.7
(a) preliminary data

Corporate and Commercial Banking offers lending, equipment finance and small-ticket leasing, depository services, treasury management, capital markets services, international trade services and other financial services to middle market, large corporate, commercial real estate, financial institution, non-profit and public sector clients.

Corporate and Commercial Banking contributed $417 million of the Company’s net income in the second quarter of 2018, compared with $376 million in the second quarter of 2017. Total net revenue decreased $19 million (2.0 percent) due to a $19 million (7.9 percent) decrease in total noninterest income. Net interest income was flat year-over-year primarily due to the impact of rising rates on the margin benefit from deposits, offset by lower rates on loans, reflecting a competitive marketplace, and lower noninterest-bearing deposits. Total noninterest income decreased year-over-year primarily due to lower commercial leasing revenue, trading revenue and loan fees. Total noninterest expense was $10 million (2.5 percent) higher compared with a year ago primarily due to an increase in net shared services expense driven by technology development and investment in infrastructure. The provision for credit losses increased $6 million (33.3 percent) reflecting an unfavorable change in the reserve allocation partially offset by lower net charge-offs.

        3

CONSUMER AND BUSINESS BANKING (a)
($ in millions)							Percent Change
	2Q		1Q		2Q		2Q18 vs			2Q18 vs			YTD		YTD		Percent
	2018		2018		2017		1Q18			2Q17			2018		2017		Change
Condensed Income Statement
Net interest income (taxable-equivalent basis)		$1,539		$1,530		$1,466		.6			5.0			$3,069		$2,894	6.0
Noninterest income		590		570		606		3.5			(2.6	)		1,160		1,177	(1.4)
Securities gains (losses), net		--		--		--		--			--			--		--	--
Total net revenue		2,129		2,100		2,072		1.4			2.8			4,229		4,071	3.9
Noninterest expense		1,347		1,321		1,295		2.0			4.0			2,668		2,574	3.7
Other intangibles		7		7		7		--			--			14		14	--
Total noninterest expense		1,354		1,328		1,302		2.0			4.0			2,682		2,588	3.6
Income before provision and taxes		775		772		770		.4			.6			1,547		1,483	4.3
Provision for credit losses		60		56		90		7.1			(33.3	)		116		155	(25.2)
Income before income taxes		715		716		680		(.1	)		5.1			1,431		1,328	7.8
Income taxes and taxable-equivalent adjustment		179		179		247		--			(27.5	)		358		483	(25.9)
Net income		536		537		433		(.2	)		23.8			1,073		845	27.0
Net (income) loss attributable to noncontrolling interests		--		--		--		--			--			--		--	--
Net income attributable to U.S. Bancorp		$536		$537		$433		(.2	)		23.8			$1,073		$845	27.0
Average Balance Sheet Data
Loans		$142,097		$143,163		$140,520		(.7	)  *		1.1	*		$142,627		$139,814	2.0
Other earning assets		3,810		3,409		3,205		11.8			18.9			3,611		3,611	--
Goodwill		3,681		3,681		3,681		--			--			3,681		3,681	--
Other intangible assets		2,932		2,871		2,730		2.1			7.4			2,902		2,749	5.6
Assets		156,803		157,528		154,221		(.5	)		1.7			157,164		153,932	2.1
Noninterest-bearing deposits		27,565		27,346		27,287		.8			1.0			27,456		27,122	1.2
Interest-bearing deposits		125,581		123,472		120,781		1.7			4.0			124,533		120,056	3.7
Total deposits		153,146		150,818		148,068		1.5			3.4			151,989		147,178	3.3
Total U.S. Bancorp shareholders’ equity		12,244		12,219		11,435		.2			7.1			12,232		11,478	6.6
(a) preliminary data
*  Average total loan growth was 0.3% linked quarter and 2.4% year-over-year, excluding the impact of the student loan portfolio sale

Consumer and Business Banking delivers products and services through banking offices, telephone servicing and sales, on-line services, direct mail, ATM processing and mobile devices. It encompasses community banking, metropolitan banking and indirect lending, as well as mortgage banking.

Consumer and Business Banking contributed $536 million of the Company’s net income in the second quarter of 2018, compared with $433 million in the second quarter of 2017. Total net revenue increased $57 million (2.8 percent) due to a $73 million (5.0 percent) increase in net interest income, partially offset by a $16 million (2.6 percent) decrease in total noninterest income. Net interest income increased primarily due to the impact of rising rates on the margin benefit from deposits along with growth in average loan and deposit balances, partially offset by lower rates on loans. Total noninterest income decreased principally driven by lower mortgage banking revenue, in line with industry trends, primarily due to lower mortgage production, partially offset by a favorable change in the valuation of mortgage servicing rights, net of hedging activities, and a reduction in other noninterest income driven by lower end of term gains in retail leasing due to lower volumes. These decreases are partially offset by higher ATM processing services fees and deposit service charges reflecting higher transaction volumes. Total noninterest expense in the second quarter of 2018 increased $52 million (4.0 percent) primarily due to higher net shared services expense and higher personnel expense reflecting the impact of investments supporting business growth and development as well as higher production related incentives. The provision for credit losses decreased $30 million (33.3 percent) reflecting lower net charge-offs as well as a favorable change in the reserve allocation.

        4

WEALTH MANAGEMENT AND INVESTMENT SERVICES (a)
($ in millions)							Percent Change
	2Q		1Q		2Q		2Q18 vs			2Q18 vs			YTD		YTD		Percent
		2018		2018		2017		1Q18			2Q17			2018		2017		Change
Condensed Income Statement
Net interest income (taxable-equivalent basis)		$290		$282		$260		2.8			11.5			$572		$503		13.7
Noninterest income		430		431		412		(.2	)		4.4			861		810		6.3
Securities gains (losses), net		--		--		--		--			--			--		--		--
Total net revenue		720		713		672		1.0			7.1			1,433		1,313		9.1
Noninterest expense		443		414		388		7.0			14.2			857		779		10.0
Other intangibles		4		4		5		--			(20.0	)		8		10		(20.0	)
Total noninterest expense		447		418		393		6.9			13.7			865		789		9.6
Income before provision and taxes		273		295		279		(7.5	)		(2.2	)		568		524		8.4
Provision for credit losses		--		1		(1)		nm			nm			1		--		nm
Income before income taxes		273		294		280		(7.1	)		(2.5	)		567		524		8.2
Income taxes and taxable-equivalent adjustment		68		74		102		(8.1	)		(33.3	)		142		191		(25.7	)
Net income		205		220		178		(6.8	)		15.2			425		333		27.6
Net (income) loss attributable to noncontrolling interests		--		--		--		--			--			--		--		--
Net income attributable to U.S. Bancorp		$205		$220		$178		(6.8	)		15.2			$425		$333		27.6
Average Balance Sheet Data
Loans		$9,133		$8,893		$8,318		2.7			9.8			$9,014		$8,145		10.7
Other earning assets		166		164		147		1.2			12.9			165		150		10.0
Goodwill		1,569		1,570		1,567		(.1	)		.1			1,569		1,567		.1
Other intangible assets		66		70		83		(5.7	)		(20.5	)		68		85		(20.0	)
Assets		12,107		11,885		11,437		1.9			5.9			11,997		11,444		4.8
Noninterest-bearing deposits		14,767		14,347		15,952		2.9			(7.4	)		14,558		14,905		(2.3	)
Interest-bearing deposits		56,708		56,828		57,980		(.2	)		(2.2	)		56,767		57,501		(1.3	)
Total deposits		71,475		71,175		73,932		.4			(3.3	)		71,325		72,406		(1.5	)
Total U.S. Bancorp shareholders’ equity		2,424		2,399		2,365		1.0			2.5			2,412		2,383		1.2
(a) preliminary data

Wealth Management and Investment 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 Investment Services contributed $205 million of the Company’s net income in the second quarter of 2018, compared with $178 million in the second quarter of 2017. Total net revenue increased $48 million (7.1 percent) year-over-year driven by increases in net interest income of $30 million (11.5 percent) and total noninterest income of $18 million (4.4 percent) . Net interest income increased year-over-year primarily due to the impact of rising rates on the margin benefit from deposits. Total noninterest income increased year-over-year principally due to favorable market conditions, business growth, and net asset inflows. Total noninterest expense increased $54 million (13.7 percent) primarily as a result of settling certain litigation matters, higher net shared services expense and personnel expense driven by investments to support business growth, higher production related incentives and increased staffing to support business development. The provision for credit losses was essentially flat compared with the prior year quarter.

        5

PAYMENT SERVICES (a)
($ in millions)							Percent Change
	2Q 2018		1Q 2018		2Q   2017		2Q18 vs 1Q18			2Q18 vs 2Q17			YTD 2018		YTD   2017		Percent Change
Condensed Income Statement
Net interest income (taxable-equivalent basis)		$592		$610		$581		(3.0	)		1.9			$1,202		$1,177		2.1
Noninterest income		903		848		850		6.5			6.2			1,751		1,648		6.3
Securities gains (losses), net		--		--		--		--			--			--		--		--
Total net revenue		1,495		1,458		1,431		2.5			4.5			2,953		2,825		4.5
Noninterest expense		705		703		665		.3			6.0			1,408		1,308		7.6
Other intangibles		28		27		30		3.7			(6.7	)		55		61		(9.8	)
Total noninterest expense		733		730		695		.4			5.5			1,463		1,369		6.9
Income before provision and taxes		762		728		736		4.7			3.5			1,490		1,456		2.3
Provision for credit losses		281		272		283		3.3			(.7	)		553		524		5.5
Income before income taxes		481		456		453		5.5			6.2			937		932		.5
Income taxes and taxable-equivalent adjustment		120		114		165		5.3			(27.3	)		234		339		(31.0	)
Net income		361		342		288		5.6			25.3			703		593		18.5
Net (income) loss attributable to noncontrolling interests		--		--		(6)		--			nm			--		(13)		nm
Net income attributable to U.S. Bancorp		$361		$342		$282		5.6			28.0			$703		$580		21.2
Average Balance Sheet Data
Loans		$30,591		$30,062		$29,070		1.8			5.2			$30,328		$29,003		4.6
Other earning assets		302		276		241		9.4			25.3			289		249		16.1
Goodwill		2,536		2,542		2,458		(.2	)		3.2			2,539		2,455		3.4
Other intangible assets		392		396		408		(1.0	)		(3.9	)		394		422		(6.6	)
Assets		36,552		36,173		34,779		1.0			5.1			36,364		34,672		4.9
Noninterest-bearing deposits		1,085		1,127		1,015		(3.7	)		6.9			1,106		1,019		8.5
Interest-bearing deposits		109		106		104		2.8			4.8			108		103		4.9
Total deposits		1,194		1,233		1,119		(3.2	)		6.7			1,214		1,122		8.2
Total U.S. Bancorp shareholders’ equity		6,602		6,622		6,228		(.3	)		6.0			6,612		6,316		4.7
(a) preliminary data

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 $361 million of the Company’s net income in the second quarter of 2018, compared with $282 million in the second quarter of 2017. Total net revenue increased $64 million (4.5 percent) due to increases in net interest income of $11 million (1.9 percent) and total noninterest income of $53 million (6.2 percent). Net interest income increased year-over-year primarily due to higher loan volumes. Total noninterest income increased year-over-year primarily due to higher credit and debit card revenue and higher corporate payment products revenue driven by sales volumes. Total noninterest expense increased $38 million (5.5 percent) over the second quarter of 2017 principally due to higher net shared services expense and personnel expense driven by implementation costs of capital investments, higher production related incentives and increased staffing to support business development. The provision for credit losses decreased $2 million (0.7 percent) reflecting a favorable change in the reserve allocation, mostly offset by higher net charge-offs.

        6

TREASURY AND CORPORATE SUPPORT (a)
($ in millions)							Percent Change
	2Q		1Q		2Q		2Q18 vs			2Q18 vs			YTD		YTD		Percent
	2018		2018		2017		1Q18			2Q17			2018		2017		Change
Condensed Income Statement
Net interest income (taxable-equivalent basis)		$80		$53		$68		50.9			17.6			$133		$123		8.1
Noninterest income		258		210		229		22.9			12.7			468		444		5.4
Securities gains (losses), net		10		5		9		nm			11.1			15		41		(63.4)
Total net revenue		348		268		306		29.9			13.7			616		608		1.3
Noninterest expense		147		184		200		(20.1	)		(26.5	)		331		367		(9.8)
Other intangibles		--		--		--		--			--			--		--		--
Total noninterest expense		147		184		200		(20.1	)		(26.5	)		331		367		(9.8)
Income before provision and taxes		201		84		106		nm			89.6			285		241		18.3
Provision for credit losses		(2)		(2)		(4)		--			50.0			(4)		(2)		nm
Income before income taxes		203		86		110		nm			84.5			289		243		18.9
Income taxes and taxable-equivalent adjustment		(36)		(106)		(127)		66.0			71.7			(142)		(270)		47.4
Net income		239		192		237		24.5			.8			431		513		(16.0)
Net (income) loss attributable to noncontrolling interests		(8)		(7)		(6)		(14.3	)		(33.3	)		(15)		(12)		(25.0)
Net income attributable to U.S. Bancorp		$231		$185		$231		24.9			--			$416		$501		(17.0)
Average Balance Sheet Data
Loans		$3,286		$3,315		$3,395		(.9	)		(3.2	)		$3,300		$3,407		(3.1)
Other earning assets		126,682		125,754		121,655		.7			4.1			126,220		120,240		5.0
Goodwill		--		--		--		--			--			--		--		--
Other intangible assets		--		--		--		--			--			--		--		--
Assets		146,442		146,057		142,563		.3			2.7			146,249		140,961		3.8
Noninterest-bearing deposits		2,191		2,252		2,018		(2.7	)		8.6			2,221		1,986		11.8
Interest-bearing deposits		3,074		4,739		716		(35.1	)		nm			3,901		706		nm
Total deposits		5,265		6,991		2,734		(24.7	)		92.6			6,122		2,692		nm
Total U.S. Bancorp shareholders’ equity		17,552		17,167		18,324		2.2			(4.2	)		17,360		18,121		(4.2)
(a) preliminary data

Treasury and Corporate Support includes the Company’s investment portfolios, funding, capital management, interest rate risk management, income taxes not allocated to the 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 $231 million in both the second quarter of 2018 and 2017. Total net revenue increased $42 million (13.7 percent) year-over-year driven by an increase in net interest income of $12 million (17.6 percent) and an increase of $30 million (12.6 percent) in total noninterest income. Net interest income increased year-over-year primarily due to growth in the investment portfolio, partially offset by higher funding costs. Total noninterest income increased year-over-year reflecting the gain on the sale of the student loan portfolio and equity investment revenue. Total noninterest expense decreased $53 million (26.5 percent) year-over-year as a result of the allocation of previously reserved litigation items to the business units, at settlement, and a favorable change in net shared services expense allocated to manage the business. Partially offsetting these decreases was higher personnel expense driven by increased staffing, higher variable compensation, and technology development related to business development efforts. The provision for credit losses was $2 million higher year-over-year due to higher net charge-offs, mostly offset by a favorable change in the reserve allocation.

Income taxes are assessed to each line of business at a managerial rate of 25.0 percent starting in the first quarter of 2018 due to tax reform, compared with 36.4 percent in 2017. The residual tax expense or benefit to arrive at the consolidated effective tax rate is included in Treasury and Corporate Support.

        7

EX-99.2

U.S. Bancorp 2Q18 Earnings Conference Call July 18, 2018 Exhibit 99.2

Forward-looking Statements and Additional Information The following information appears in accordance with the Private Securities Litigation Reform Act of 1995: Today’s 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 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, changes to statutes, regulations, or regulatory policies or practices could affect U.S. Bancorp in substantial and unpredictable ways. 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 its investment securities; 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, 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, 2017, 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. This presentation includes non-GAAP financial measures to describe U.S. Bancorp’s performance. The calculations of these measures are provided in the Appendix. 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.

2Q18 Highlights * Taxable-equivalent basis; see slide 26 for calculation ** Excluding the impact of the 2Q18 student loan portfolio sale, average total loans grew 0.3 percent linked quarter and 1.8 percent year-over-year **

Performance Ratios Efficiency Ratio* & Net Interest Margin** * Non-GAAP; see slides 25 and 26 for calculations ** Taxable-equivalent basis Return on Average Common Equity Return on Tangible Common Equity* Return on Average Assets

Average Loans -0.3% linked quarter +1.1% year-over-year Excluding the impact of the student loan portfolio sale in 2Q18, average total loans increased 0.3 percent linked quarter and 1.8 percent year-over-year, driven by growth in residential mortgage, total commercial loans and retail leasing. On both a linked quarter and year-over-year basis, growth in average total loans was offset by a decline in commercial real estate loans due to continued paydowns and disciplined underwriting. $ in billions

Average Deposits +0.1% linked quarter +1.1% year-over-year $ in billions Rates are presented on a fully taxable-equivalent basis based on a federal income tax rate of 21 percent for 2018 and 35 percent for 2017 Interest-bearing Deposits Average total deposits grew slightly on both a linked quarter and year-over-year basis, in-line with expectations. Average noninterest-bearing deposits decreased 0.6% linked quarter, driven by a decrease in Corporate and Commercial Banking balances, partially offset by an increase in Wealth Management and Investment Services balances. Average noninterest-bearing deposits decreased 4.5% year-over-year, primarily due to decreases in Corporate and Commercial Banking and Wealth Management and Investment Services balances.

Credit Quality $ in millions NCO Ratio -1 bp QoQ -1 bp YoY NPAs -9.4% QoQ -19.1% YoY

Earnings Summary

Net Interest Income Linked Quarter Growth in net interest income was primarily driven by the impact of higher interest rates and an additional day in the second quarter. The net interest margin was flat, reflecting the impact of higher interest rates offset by a deposit and funding mix shift. Year-over-Year Net interest income growth was principally driven by growth in earning assets and the impact of rising interest rates. The net interest margin increased five basis points as the impact of higher interest rates was offset by loan mix, higher funding costs and the impact of tax reform of two basis points. $ in millions Taxable-equivalent basis +0.9% linked quarter +4.1% year-over-year

Noninterest Income $ in millions Payments = credit and debit card, corporate payment products and merchant processing Service charges = deposit service charges, treasury management and ATM processing All other = commercial products, investment products fees, securities gains (losses) and other $2,348 $2,272 $2,414 Linked Quarter Payment services revenue growth was driven by seasonally higher credit and debit card revenue as well as higher merchant processing volumes. All other noninterest income growth reflects growth in commercial products revenue, driven by stronger capital markets volume, and higher other noninterest income which includes the student loan portfolio sale and equity investment income. Year-over-Year Strong payment services revenue growth was driven by higher sales volumes across all businesses. Solid growth in trust and investment management fees was driven by business growth and favorable market conditions. Mortgage banking revenue declined due to lower mortgage production, partially offset by a favorable change in the valuation of mortgage servicing rights, net of hedging activities. +6.3% linked quarter +2.8% year-over-year

Noninterest Expense Linked Quarter Noninterest expense growth was primarily driven by seasonally higher professional services and marketing and business development expense as well as higher compensation expense. Employee benefits expense saw a seasonal decline due to higher payroll taxes during the first quarter of each year. Year-over-Year Noninterest expense growth was driven by higher personnel costs and technology investment. Growth in compensation and employee benefits expense reflects the impact of hiring to support business growth and compliance programs, merit increases, higher variable compensation related to business production and increased medical costs. $ in millions +1.0% linked quarter +3.4% year-over-year $2,984 $3,055 $3,085

Capital Position * See Non-GAAP Financial Measures reconciliation on slide 24

Appendix

Average Loans vs. 2Q17 Average total loans increased by $3.1 billion, or 1.1% Average commercial loans increased by $2.7 billion, or 2.8% Average residential mortgage loans increased by $2.3 billion, or 3.9% Average commercial real estate loans decreased by $2.7 billion, or 6.3% vs. 1Q18 Average total loans declined $0.8 billion, or 0.3% Average commercial loans increased by $0.9 billion, or 0.9% Average residential mortgage loans increased by $0.7 billion, or 1.1% Average commercial real estate loans declined $0.5 billion, or 1.3% Key Points Year-over-Year Growth 3.4% 3.0% 2.6% 2.3% 1.1% Covered Commercial CRE Res Mtg Retail Credit Card $279.8 $275.5 $277.6 6.1% $278.6 Average Loans ($bn) $279.4

Average Deposits Key Points Average Deposits ($bn) vs. 2Q17 Average total deposits increased by $3.7 billion, or 1.1% Average low-cost deposits (NIB, interest checking, savings and money market) declined $3.0 billion, or 1.0% vs. 1Q18 Average total deposits increased by $0.2 billion, or 0.1% Average low-cost deposits declined $0.3 billion, or 0.1% Year-over-Year Growth 7.7% 5.2% 3.0% 1.9% 1.1% Time Money Market Checking and Savings Noninterest-bearing $334.8 $331.2 $335.2 $339.2 $334.6

Credit Quality – Commercial Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm2Q171Q182Q18 Average Loans$95,638$97,465$98,353 30-89 Delinquencies0.27%0.25%0.23% 90+ Delinquencies0.05%0.06%0.06% Nonperforming Loans0.33%0.31%0.23% Linked Quarter Growth 2.0% 1.0% 1.0% (0.1%) 0.9% Linked quarter growth of 0.9% was primarily driven by increased capital expenditure investment in the middle market segment Net charge-offs were stable quarter-over-quarter and lower year-over-year due to lower gross charge-offs

Investor $18,507 Owner Occupied $10,203 A&D Const $344 Multi-family $4,005 Retail $464 Residential Construction $1,966 Office $858 Other $2,846 Resi Land $664 $mm2Q171Q182Q18 Average Loans$42,549$40,366$39,857 30-89 Delinquencies0.08%0.09%0.11% 90+ Delinquencies0.00%0.01%0.01% Nonperforming Loans0.28%0.30%0.26% Performing TDRs*$162$135$126 Credit Quality – Commercial Real Estate Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points * TDR = troubled debt restructuring Linked Quarter Growth (1.4%) (2.2%) (1.5%) (1.6%) (1.3%) Average loans declined on both a linked quarter and year-over-year basis due to continued early payoff activity Credit quality remained strong and stable; nonperforming loans decreased on both a linked quarter and year-over-year basis

Credit Quality – Residential Mortgage Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm2Q171Q182Q18 Average Loans$58,544$60,174$60,834 30-89 Delinquencies0.22%0.24%0.27% 90+ Delinquencies0.20%0.22%0.18% Nonperforming Loans0.90%0.71%0.65% * Excludes GNMA loans, whose repayments are insured by the FHA or guaranteed by the Department of VA ($1,665 million in 2Q18) Linked Quarter Growth 1.1% 0.8% 1.0% 0.9% 1.1% Originations continued to be high credit quality (weighted average FICO of 760, weighted average LTV of 72%) More than 92% of 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

Credit Quality – Credit Card Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm2Q171Q182Q18 Average Loans$20,631$21,284$21,220 30-89 Delinquencies1.22%1.32%1.22% 90+ Delinquencies1.10%1.29%1.15% Nonperforming Loans0.00%0.00%0.00% Linked Quarter Growth (1.0%) 1.4% 1.4% 0.3% (0.3%) Year-over-year average loan growth of 2.9% was driven by high credit quality originations The commitment weighted average FICO on new originations remained strong at 757 Delinquencies and charge-offs were stable year-over-year

Credit Quality – Home Equity Average Loans ($mm) and Net Charge-offs Ratio Key Points Key Statistics $mm2Q171Q182Q18 Average Loans$16,252$16,195$16,048 30-89 Delinquencies0.33%0.41%0.39% 90+ Delinquencies0.25%0.32%0.29% Nonperforming Loans0.74%0.79%0.81% Subprime: 1% Wtd Avg LTV*: 87% NCO: -3.68% Prime: 98% Wtd Avg LTV*: 72% NCO: -0.03% Other: 1% Wtd Avg LTV*: 69% NCO: 0.00% *LTV at origination Linked Quarter Growth 0.0% 0.3% 0.0% (0.6%) (0.9%) High-quality originations (weighted average FICO on commitments of 766, weighted average CLTV of 69%) were originated primarily through the retail branch network to existing bank customers on their primary residences Net charge-offs were stable year-over-year with strong recoveries due to continued strength in home values

Credit Quality – Retail Leasing Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm2Q171Q182Q18 Average Loans$7,181$7,982$8,150 30-89 Delinquencies0.22%0.34%0.30% 90+ Delinquencies0.01%0.02%0.02% Nonperforming Loans0.07%0.09%0.12% * Manheim Used Vehicle Value Index source: www.manheimconsulting.com, January 1995 = 100, quarter value = average monthly ending values Linked Quarter Growth 11.0% 8.1% 2.8% 0.0% 2.1% High-quality originations continued to drive strong loan growth Delinquencies and net charge-offs remained at low levels

Credit Quality – Other Retail Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm2Q171Q182Q18 Average Loans$31,194$32,874$31,265 30-89 Delinquencies0.65%0.73%0.75% 90+ Delinquencies0.11%0.15%0.13% Nonperforming Loans0.10%0.11%0.12% Linked Quarter Growth 0.4% 2.6% 2.6% 0.1% (4.9%) The linked quarter decline in average loans was primarily driven by the student loan portfolio sale Net charge-offs, delinquencies and nonperforming loans were all relatively stable and consistent with the low levels experienced in recent quarters

Credit Quality – Auto Loans Average Loans ($mm) and Net Charge-offs Ratio Key Statistics Key Points $mm2Q171Q182Q18 Average Loans$17,533$18,868$18,599 30-89 Delinquencies0.73%0.85%0.90% 90+ Delinquencies0.06%0.08%0.08% Nonperforming Loans0.12%0.12%0.13% Direct: 5% Wtd Avg FICO: 747 NCO: 0.20% Indirect: 95% Wtd Avg FICO: 772 NCO: 0.40% Auto loans are included in Other Retail category Linked Quarter Growth 0.0% 2.7% 4.1% 0.6% (1.4)% Year-over-year growth in average loans continued to be driven by high quality originations in the Indirect channel (weighted average FICO of 775) Net charge-offs and late stage delinquencies remained relatively stable

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.

Non-GAAP Financial Measures (1) Includes goodwill related to certain investments in unconsolidated financial institutions per prescribed regulatory requirements.

Non-GAAP Financial Measures (1) Interest and rates are presented on a fully taxable-equivalent basis based on a federal income tax rate of 21 percent for 2018 and 35 percent for 2017.

U.S. Bancorp 2Q18 Earnings Conference Call July 18, 2018