U.S. Bancorp (USB) 10-Q 10 Aug 09 2009 Q2 Quarterly report Financial data

Document and Company Informatio

Document and Company Information (USD $)
In Billions, except Share data	6 Months Ended Jun. 30, 2009	Jul. 31, 2009	Jun. 30, 2008
Document and Company Information [Abstract]
Entity Registrant Name	U.S. BANCORP
Entity Central Index Key	0000036104
Document Type	10-Q
Document Period End Date	2009-06-30
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			48.6
Entity Common Stock Shares Outstanding (actual number of shares)		1,911,974,478

Consolidated Balance Sheet

Consolidated Balance Sheet (USD $)
In Millions	Jun. 30, 2009	Dec. 31, 2008
Assets
Cash and due from banks	$6,381	$6,859
Investment securities
Held-to-maturity (fair value $50 and $54, respectively)	49	53
Available-for-sale	40,756	39,468
Loans held for sale (included $6,939 and $2,728 of mortgage loans carried at fair value, respectively)	7,370	3,210
Loans
Commercial	52,730	56,618
Commercial real estate	33,696	33,213
Residential mortgages	23,970	23,580
Retail	61,427	60,368
Total loans, excluding covered assets	171,823	173,779
Covered assets	10,489	11,450
Total loans	182,312	185,229
Less allowance for loan losses	(4,377)	(3,514)
Net loans	177,935	181,715
Premises and equipment	2,073	1,790
Goodwill	8,451	8,571
Other intangible assets	2,961	2,834
Other assets	19,584	21,412
Total assets	265,560	265,912
Deposits
Noninterest-bearing	35,684	37,494
Interest-bearing	97,691	85,886
Time deposits greater than $100,000	30,508	35,970
Total deposits	163,883	159,350
Short-term borrowings	29,698	33,983
Long-term debt	39,196	38,359
Other liabilities	7,897	7,187
Total liabilities	240,674	238,879
Shareholders' equity
Preferred stock	1,500	7,931
Common stock, par value $0.01 a share - authorized: 4,000,000,000 shares; issued: 6/30/09 and 12/31/08 -2,125,725,742 shares and 1,972,643,007 shares, respectively	21	20
Capital surplus	8,434	5,830
Retained earnings	23,140	22,541
Less cost of common stock in treasury: 6/30/09 - 213,845,489 shares; 12/31/08 - 217,610,679 shares	(6,540)	(6,659)
Accumulated other comprehensive income (loss)	(2,384)	(3,363)
Total U.S. Bancorp shareholders' equity	24,171	26,300
Noncontrolling interests	715	733
Total equity	24,886	27,033
Total liabilities and equity	$265,560	$265,912

Consolidated Balance Sheet (Par

Consolidated Balance Sheet (Parenthetical) (USD $)
In Millions, except Share data	Jun. 30, 2009	Dec. 31, 2008
Held-to-maturity, fair value	$50	$54
Mortgage loans, carried at fair value	$6,939	$2,728
Common stock, par value	0.01	0.01
Common stock, shares authorized (actual number of shares)	4,000,000,000	4,000,000,000
Common stock, shares issued (actual number of shares)	2,125,725,742	1,972,643,007
Treasury stock, shares (actual number of shares)	213,845,489	217,610,679

Consolidated Statement of Incom

Consolidated Statement of Income (USD $)
In Millions, except Per Share data	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Interest Income
Loans	$2,345	$2,429	$4,695	$4,989
Loans held for sale	71	49	134	122
Investment securities	402	494	836	1,029
Other interest income	22	43	42	80
Total interest income	2,840	3,015	5,707	6,220
Interest Expense
Deposits	314	458	638	1,064
Short-term borrowings	131	263	274	585
Long-term debt	341	419	694	893
Total interest expense	786	1,140	1,606	2,542
Net interest income	2,054	1,875	4,101	3,678
Provision for credit losses	1,395	596	2,713	1,081
Net interest income after provision for credit losses	659	1,279	1,388	2,597
Noninterest Income
Credit and debit card revenue	259	266	515	514
Corporate payment products revenue	168	174	322	338
Merchant processing services	278	309	536	580
ATM processing services	104	93	206	177
Trust and investment management fees	304	350	598	685
Deposit service charges	250	278	476	535
Treasury management fees	142	137	279	261
Commercial products revenue	144	117	273	229
Mortgage banking revenue	308	81	541	186
Investment products fees and commissions	27	37	55	73
Securities gains (losses), net
Realized gains (losses), net	69	14	125	16
Total other-than-temporarily impairment	(331)	(77)	(834)	(330)
Portion of other-than-temporary impairment recognized in other comprehensive income	243	0	492	0
Total securities gains (losses), net	(19)	(63)	(217)	(314)
Other	90	113	259	672
Total noninterest income	2,055	1,892	3,843	3,936
Noninterest Expense
Compensation	764	761	1,550	1,506
Employee benefits	140	129	295	266
Net occupancy and equipment	208	190	419	380
Professional services	59	59	111	106
Marketing and business development	80	66	136	145
Technology and communications	157	149	312	289
Postage, printing and supplies	72	73	146	144
Other intangibles	95	87	186	174
Other	554	304	845	587
Total noninterest expense	2,129	1,818	4,000	3,597
Income before income taxes	585	1,353	1,231	2,936
Applicable income taxes	100	386	201	862
Net income	485	967	1,030	2,074
Net income attributable to noncontrolling interests	(14)	(17)	(30)	(34)
Net income attributable to U.S. Bancorp	471	950	1,000	2,040
Net income applicable to U.S. Bancorp common shareholders	$221	$926	$640	$2,003
Earnings per common share	0.12	0.53	0.36	1.15
Diluted earnings per common share	0.12	0.53	0.36	1.14
Dividends declared per common share	0.05	0.425	0.1	0.85
Average common shares outstanding	1,833	1,740	1,794	1,735
Average diluted common shares outstanding	1,840	1,755	1,801	1,752

Consolidated Statement of Share

Consolidated Statement of Shareholders Equity (USD $)
In Millions	Total U.S. Bancorp Shareholders' Equity	Common Stock	Preferred Stock	Capital Surplus	Treasury Stock	Retained Earnings	Other Comprehensive Income (Loss)	Noncontrolling Interests	Total
Shares, Beginning Balance at Dec. 31, 2007		1,728
Beginning Balance at Dec. 31, 2007	$21,046	$20	$1,000	$5,749	($7,480)	$22,693	($936)	$780	$21,826
Net income	2,040					2,040		34	2,074
Changes in unrealized gains and losses on securities available-for-sale	(1,264)						(1,264)		(1,264)
Unrealized gain on derivatives	16						16		16
Foreign currency translation	(43)						(43)		(43)
Reclassification for realized losses	345						345		345
Change in retirement obligation	6						6		6
Income taxes	357						357		357
Total comprehensive income	1,457							34	1,491
Preferred stock dividends	(34)					(34)			(34)
Common stock dividends	(1,479)					(1,479)			(1,479)
Issuance of preferred stock	491		500	(9)					491
Issuance of common and treasury stock	437			(59)	496				437
Issuance of common and treasury stock, shares		15
Purchase of treasury stock	(88)				(88)				(88)
Purchase of treasury stock, shares		(2)
Net other changes in noncontrolling interests								(56)	(56)
Stock option and restricted stock grants	1			1					1
Shares reserved to meet deferred compensation obligations	(3)				(3)				(3)
Ending Balance at Jun. 30, 2008	21,828	20	1,500	5,682	(7,075)	23,220	(1,519)	758	22,586
Shares, Ending Balance at Jun. 30, 2008		1,741
Shares, Beginning Balance at Dec. 31, 2008		1,755
Beginning Balance at Dec. 31, 2008	26,300	20	7,931	5,830	(6,659)	22,541	(3,363)	733	27,033
Change in accounting principle						141	(141)
Net income	1,000					1,000		30	1,030
Changes in unrealized gains and losses on securities available-for-sale	1,642						1,642		1,642
Other-than-temporary impairment not recognized in earnings on securities available-for-sale	(492)						(492)		(492)
Unrealized gain on derivatives	394						394		394
Foreign currency translation	40						40		40
Reclassification for realized losses	222						222		222
Income taxes	(686)						(686)		(686)
Total comprehensive income	2,120							30	2,150
Redemption of preferred stock	(6,599)		(6,599)						(6,599)
Preferred stock dividends	(190)		168			(358)			(190)
Common stock dividends	(184)					(184)			(184)
Issuance of common and treasury stock	2,686	1		2,562	123				2,686
Issuance of common and treasury stock, shares		157
Purchase of treasury stock	(4)				(4)				(4)
Net other changes in noncontrolling interests								(18)	(18)
Distributions to noncontrolling interests								(30)	(30)
Stock option and restricted stock grants	42			42					42
Ending Balance at Jun. 30, 2009	$24,171	$21	$1,500	$8,434	($6,540)	$23,140	($2,384)	$715	$24,886
Shares, Ending Balance at Jun. 30, 2009		1,912

Consolidated Statement of Cash

Consolidated Statement of Cash Flows (USD $)
In Millions	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Operating Activities
Net cash provided by operating activities	$774	$2,207
Investing Activities
Proceeds from sales of available-for-sale investment securities	3,810	1,802
Proceeds from maturities of investment securities	3,658	2,809
Purchases of investment securities	(6,727)	(3,122)
Net (increase) decrease in loans outstanding	366	(7,721)
Proceeds from sales of loans	1,881	59
Purchases of loans	(1,277)	(2,462)
Acquisitions, net of cash acquired	222	631
Other, net	838	(530)
Net cash provided by (used in) investing activities	2,771	(8,534)
Financing Activities
Net increase in deposits	4,307	907
Net increase (decrease) in short-term borrowings	(4,285)	8,689
Proceeds from issuance of long-term debt	4,682	6,241
Principal payments or redemption of long-term debt	(3,741)	(9,762)
Proceeds from issuance of preferred stock	0	491
Proceeds from issuance of common stock	2,684	333
Redemption of preferred stock	(6,599)	0
Cash dividends paid on preferred stock	(237)	(27)
Cash dividends paid on common stock	(834)	(1,473)
Net cash provided by (used in) financing activities	(4,023)	5,399
Change in cash and due from banks	(478)	(928)
Cash and due from banks at beginning of period	6,859	8,884
Cash and due from banks at end of period	$6,381	$7,956

Basis of Presentation

Basis of Presentation
	6 Months Ended Jun. 30, 2009 USD / shares
Basis of Presentation [Abstract]
Basis of Presentation	Note1Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with the instructions to Form10-Q and, therefore, do not include all information and notes necessary for a complete presentation of financial position, results of operations and cash flow activity required in accordance with accounting principles generally accepted in the United States. In the opinion of management of U.S.Bancorp (the Company), all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of results for the interim periods have been made. These financial statements and notes should be read in conjunction with the consolidated financial statements and notes included in the Companys Annual Report on Form10-K for the year ended December31, 2008. Certain amounts in prior periods have been reclassified to conform to the current presentation. Accounting policies for the lines of business are generally the same as those used in preparation of the consolidated financial statements with respect to activities specifically attributable to each business line. However, the preparation of business line results requires management to establish methodologies to allocate funding costs, expenses and other financial elements to each line of business. Table 10 Line of Business Financial Performance included in Managements Discussion and Analysis provides details of segment results. This information is incorporated by reference into these Notes to Consolidated Financial Statements.

Accounting Changes

Accounting Changes
	6 Months Ended Jun. 30, 2009 USD / shares
Accounting Changes [Abstract]
Accounting Changes	Note2Accounting Changes Fair Value MeasurementsOn April9, 2009, the Financial Accounting Standards Board (FASB) issued new accounting guidance, which the Company adopted effective January1, 2009, for determining fair value for an asset or liability if there has been a significant decrease in the volume and level of activity in relation to normal market activity. In that circumstance, transactions or quoted prices may not be determinative of fair value. Significant adjustments may be necessary to quoted prices or alternative valuation techniques may be required in order to determine the fair value of the asset or liability under current market conditions. The adoption of this guidance resulted in the use of valuation techniques other than quoted prices for the valuation of the Companys non-agency mortgage-backed securities, but the effect was not significant. For additional information on the fair value of certain financial assets and liabilities, refer to Note12. Other-Than-Temporary ImpairmentsOn April9, 2009, the FASB issued new accounting guidance, which the Company adopted effective January1, 2009, for the measurement and recognition of other-than-temporary impairment for debt securities. If an entity does not intend to sell, and it is more likely than not that the entity will not be required to sell, a debt security before recovery of its cost basis, other-than-temporary impairment should be separated into (a)the amount representing credit loss and (b)the amount related to all other factors. The amount of other-than-temporary impairment related to credit loss is recognized in earnings and other-than-temporary impairment related to other factors is recognized in other comprehensive income (loss). To determine the amount related to credit loss, the Company applied a methodology similar to that used for accounting by creditors for impairment of loans. The Companys adoption of this guidance resulted in the recognition of a cumulative-effect adjustment to January1, 2009 retained earnings, with a corresponding adjustment to accumulated other comprehensive income (loss), of $141million. For additional information on investment securities, refer to Note3. Business CombinationsEffective January1, 2009, the Company adopted accounting guidance issued by the FASB which establishes principles and requirements for the acquirer in a business combination, including the recognition and measurement of the identifiable assets acquired, the liabilities assumed and any noncontrolling interest in the acquired entity as of the acquisition date; the recognition and measurement of the goodwill acquired in the business combination or gain from a bargain purchase as of the acquisition date; and additional disclosures related to the nature and financial effects of the business combination. Under this guidance, nearly all acquired assets and liabilities assumed are required to be recorded at fair value at the acquisition date, including loans. The recognition at the acquisition date of an allowance for loan losses on acquired loans was eliminated, as credit-related factors are now incorporated directly into the fair value of the loans. Oth

Investment Securities

Investment Securities
	6 Months Ended Jun. 30, 2009 USD / shares
Investment Securities [Abstract]
Investment Securities	Note3Investment Securities The amortized cost, other-than-temporary impairment recorded in other comprehensive income, gross unrealized holding gains and losses, and fair value of held-to-maturity and available-for-sale securities were as follows: June30, 2009 December31, 2008 Unrealized Losses Amortized Unrealized Other-than- Fair Amortized Unrealized Unrealized Fair (Dollars in Millions) Cost Gains Temporary Other Value Cost Gains Losses Value Held-to-maturity(a) Agency residential mortgage-backed securities $ 5 $ $ $ $ 5 $ 5 $ $ $ 5 Obligations of state and political subdivisions 34 2 (1 ) 35 38 2 (1 ) 39 Other debt securities 10 10 10 10 Total held-to-maturity $ 49 $ 2 $ $ (1 ) $ 50 $ 53 $ 2 $ (1 ) $ 54 Available-for-sale(b) U.S. Treasury and agencies $ 2,532 $ 9 $ $ (18 ) $ 2,523 $ 664 $ 18 $ $ 682 Mortgage-backed securities Residential Agency 25,848 434 (95 ) 26,187 26,512 426 (410 ) 26,528 Non-agency Prime(c) 2,801 5 (129) (246 ) 2,431 3,160 (729 ) 2,431 Non-prime 1,519 8 (322) (147 ) 1,058 1,574 3 (423 ) 1,154 Commercial 16 (1) 15 17 17 Asset-backed securities Collateralized debt obligations/Collateralized loan obligations 94 6 (1) (13 ) 86 101 1 (11 ) 91 Other 576 9 (142)

Loans

Loans
	6 Months Ended Jun. 30, 2009 USD / shares
Loans [Abstract]
Loans	Note 4Loans The composition of the loan portfolio was as follows: June30,2009 December31,2008 Percent Percent (Dollars in Millions) Amount of Total Amount of Total Commercial Commercial $ 46,073 25.2 % $ 49,759 26.9 % Lease financing 6,657 3.7 6,859 3.7 Total commercial 52,730 28.9 56,618 30.6 Commercial real estate Commercial mortgages 23,978 13.2 23,434 12.6 Construction and development 9,718 5.3 9,779 5.3 Total commercial real estate 33,696 18.5 33,213 17.9 Residential mortgages Residential mortgages 18,665 10.2 18,232 9.8 Home equity loans, first liens 5,305 2.9 5,348 2.9 Total residential mortgages 23,970 13.1 23,580 12.7 Retail Credit card 14,874 8.2 13,520 7.3 Retail leasing 4,955 2.7 5,126 2.8 Home equity and second mortgages 19,328 10.6 19,177 10.3 Other retail Revolving credit 3,358 1.8 3,205 1.7 Installment 5,499 3.0 5,525 3.0 Automobile 9,104 5.0 9,212 5.0 Student 4,309 2.4 4,603 2.5 Total other retail 22,270 12.2 22,545 12.2 Total retail 61,427 33.7 60,368 32.6 Total loans, excluding covered assets 171,823 94.2 173,779 93.8 Covered Assets 10,489 5.8 11,450 6.2 Total loans $ 182,312 100.0 % $ 185,229 100.0 % Loans are presented net of unearned interest and deferred fees and costs, which amounted to $1.5billion at June30, 2009, and December31, 2008. Covered assets represent assets acquired from the FDIC subject to loss sharing agreements and in

Accounting for Transfers and Se

Accounting for Transfers and Servicing of Financial Assets and Variable Interest Entities
	6 Months Ended Jun. 30, 2009 USD / shares
Accounting for Transfers and Servicing of Financial Assets and Variable Interest Entities [Abstract]
Accounting for Transfers and Servicing of Financial Assets and Variable Interest Entities	Note 5Accounting for Transfers and Servicing of Financial Assets and Variable Interest Entities When the Company sells financial assets, it may retain servicing rights and/or other beneficial interests in the transferred financial assets. The gain or loss on sale depends, in part, on the previous carrying amount of the transferred financial assets and the consideration other than beneficial interests in the transferred assets received in exchange. Upon transfer, any servicing assets are initially recognized at fair value. The remaining carrying amount of the transferred financial asset is allocated between the assets sold and any interest(s) that continues to be held by the Company based on the relative fair values as of the date of transfer. The Company is involved in various entities that are considered to be variable interest entities (VIEs) as defined by applicable authoritative accounting guidance. Generally, a VIE is a corporation, partnership, trust or any other legal structure that does not have equity investors with substantive voting rights or has equity investors that do not provide sufficient financial resources for the entity to support its activities. The Companys investments in VIEs primarily represent private investment funds that make equity investments, provide debt financing or partnerships to support community-based investments in affordable housing, development entities that provide capital for communities located in low-income districts and for historic rehabilitation projects that may enable the Company to ensure regulatory compliance with the Community Reinvestment Act. The Company sponsors an off-balance sheet conduit to which it transferred high-grade investment securities, initially funded by the conduits issuance of commercial paper. These investment securities include primarily (i)non-agency asset-backed securities, which are guaranteed by third-party insurers, and (ii)collateralized mortgage obligations. The conduit held assets of $.7billion at June30, 2009, compared with $.8billion at December31, 2008. During 2008, the conduit ceased issuing commercial paper and began to draw upon a Company-provided liquidity facility to replace outstanding commercial paper as it matured. The Company determined its variable interest does not absorb the majority of the variability of the conduits cash flows or fair value because of the third-party insurance protection. As a result, the Company is not the primary beneficiary of the conduit and, therefore, does not consolidate the conduit. At June30, 2009, the amount advanced to the conduit under the liquidity facility was $.8billion, compared with $.9billion at December31, 2008, and was recorded on the Companys balance sheet in commercial loans. Proceeds from the conduits investment securities will be used to repay draws on the liquidity facility. The Company believes there is sufficient collateral to repay all liquidity facility advances. The Company consolidates VIEs in which it is the primary beneficiary. At June30, 2009, approximately $467million of total assets related to various VIEs were consolidated by the Company in its financial statements, com

Mortgage Servicing Rights

Mortgage Servicing Rights
	6 Months Ended Jun. 30, 2009 USD / shares
Mortgage Servicing Rights [Abstract]
Mortgage Servicing Rights	Note6Mortgage Servicing Rights The Company serviced $134.7billion of residential mortgage loans for others at June30, 2009, and $120.3billion at December31, 2008. The net impact of assumption changes on the fair value of mortgage servicing rights (MSRs), and fair value changes of derivatives used to offset MSR value changes included in mortgage banking revenue and net interest income was a net gain of $45million and a net loss of $16million for the three months ended June30, 2009 and 2008, respectively, and a $47million net gain and $27million net loss for the six months ended June30, 2009 and 2008, respectively. Loan servicing fees, not including valuation changes included in mortgage banking revenue, were $126million and $99million for the three months ended June30, 2009 and 2008, respectively, and $243million and $194million for the six months ended June30, 2009 and 2008, respectively. Changes in fair value of capitalized MSRs are summarized as follows: Three Months Ended Six Months Ended June30, June30, (Dollars in Millions) 2009 2008 2009 2008 Balance at beginning of period $ 1,182 $ 1,390 $ 1,194 $ 1,462 Rights purchased 42 13 75 17 Rights capitalized 239 136 432 279 Changes in fair value of MSRs Due to change in valuation assumptions (a) 131 258 (4 ) 99 Other changes in fair value (b) (112 ) (66 ) (215 ) (126 ) Balance at end of period $ 1,482 $ 1,731 $ 1,482 $ 1,731 (a) Principally reflects changes in discount rates and prepayment speed assumptions, primarily arising from interest rate changes. (b) Primarily represents changes due to collection/realization of expected cash flows over time (decay). The estimated sensitivity to changes in interest rates of the fair value of the MSRs portfolio and the related derivative instruments at June30, 2009, was as follows: Down Scenario Up Scenario (Dollars in Millions) 50bps 25bps 25bps 50bps Net fair value $ (15 ) $ (3 ) $ (3 ) $ (13 )

Preferred Stock

Preferred Stock
	6 Months Ended Jun. 30, 2009 USD / shares
Preferred Stock [Abstract]
Preferred Stock	Note7Preferred Stock At June30, 2009 and December31, 2008, the Company had authority to issue 50million shares of preferred stock. The number of shares issued and outstanding and the carrying amount of each outstanding series of the Companys preferred stock was as follows: June30, 2009 December31, 2008 Shares Issued Carrying Shares Issued Carrying (Dollars in Millions) and Outstanding Amount and Outstanding Amount SeriesB 40,000 $ 1,000 40,000 $ 1,000 SeriesD 20,000 500 20,000 500 SeriesE 6,599,000 6,431 Total preferred stock(a) 60,000 $ 1,500 6,659,000 $ 7,931 (a) The par value of all shares issued and outstanding at June30, 2009 and December31, 2008, was $1.00 a share. On November14, 2008, the Company issued 6.6million shares of SeriesE Fixed Rate Cumulative Perpetual Preferred Stock (the Series E Preferred Stock) and a warrant to purchase 33million shares of the Companys common stock, at a price of $30.29 per common share, to the U.S. Department of the Treasury under the Capital Purchase Program of the Emergency Economic Stabilization Act of 2008 for proceeds of $6.6billion. The Company allocated $172million of the proceeds to the warrant, with the resulting discount on the SeriesE Preferred Stock being accreted over five years and reported as a reduction to income applicable to common equity over that period. On June17, 2009, the Company redeemed the Series E Preferred Stock. The Company included in its computation of earnings per diluted common share for the second quarter and first six months of 2009 the impact of a deemed dividend of $154million, representing the unaccreted preferred stock discount remaining on the redemption date. On July15, 2009, the Company repurchased the warrant from the U.S. Department of the Treasury for $139million. The warrant repurchase transaction is not reflected in the consolidated financial statements as of June30, 2009. On March27, 2006, the Company issued depositary shares representing an ownership interest in 40,000shares of SeriesB Non-Cumulative Perpetual Preferred Stock with a liquidation preference of $25,000 per share (the SeriesB Preferred Stock), and on March17, 2008, the Company issued depositary shares representing an ownership interest in 20,000shares of SeriesD Non-Cumulative Perpetual Preferred Stock with a liquidation preference of $25,000 per share (the SeriesD Preferred Stock). The SeriesB Preferred Stock and SeriesD Preferred Stock have no stated maturity and will not be subject to any sinking fund or other obligation of the Company. Dividends, if declared, will accrue and be payable quarterly, in arrears, at a rate per annum equal to the greater of three-month LIBOR plus .60percent, or 3.50percent on the SeriesB Preferred Stock, and 7.875percent pe

Earnings Per Share

Earnings Per Share
	6 Months Ended Jun. 30, 2009 USD / shares
Earnings Per Share [Abstract]
Earnings Per Share	Note8Earnings Per Share The components of earnings per share were: Three Months Ended Six Months Ended June30, June30, (Dollars and Shares in Millions, Except Per Share Data) 2009 2008 2009 2008 Net income attributable to U.S. Bancorp $ 471 $ 950 $ 1,000 $ 2,040 Preferred dividends (90 ) (22 ) (190 ) (34 ) Accretion of preferred stock discount (6 ) (14 ) Deemed dividend on preferred stock redemption (154 ) (154 ) Earnings allocated to participating stock awards (2 ) (2 ) (3 ) Net income applicable to U.S. Bancorp common shareholders $ 221 $ 926 $ 640 $ 2,003 Average common shares outstanding 1,833 1,740 1,794 1,735 Net effect of the exercise and assumed purchase of stock awards and conversion of outstanding convertible notes 7 15 7 17 Average diluted common shares outstanding 1,840 1,755 1,801 1,752 Earnings per common share $ .12 $ .53 $ .36 $ 1.15 Diluted earnings per common share $ .12 $ .53 $ .36 $ 1.14 Options and warrants to purchase 109million and 27million common shares for the three months ended June30, 2009 and 2008, respectively, and 109million and 27million common shares for the six months ended June30, 2009 and 2008, respectively, were outstanding but not included in the computation of diluted earnings per share because they were antidilutive.

Employee Benefits

Employee Benefits
	6 Months Ended Jun. 30, 2009 USD / shares
Employee Benefits [Abstract]
Employee Benefits	Note9Employee Benefits The components of net periodic benefit cost for the Companys retirement plans were: Three Months Ended June30, Six Months Ended June30, Postretirement Postretirement Pension Plans Welfare Plan Pension Plans Welfare Plan (Dollars in Millions) 2009 2008 2009 2008 2009 2008 2009 2008 Service cost $ 20 $ 19 $ 2 $ 2 $ 40 $ 38 $ 3 $ 3 Interest cost 38 35 3 3 76 70 6 6 Expected return on plan assets (53 ) (56 ) (2 ) (2 ) (107 ) (112 ) (3 ) (3 ) Prior service (credit) cost and transition (asset) obligation amortization (2 ) (2 ) (3 ) (3 ) Actuarial (gain) loss amortization 12 8 (2 ) (1 ) 24 16 (4 ) (2 ) Net periodic benefit cost $ 15 $ 4 $ 1 $ 2 $ 30 $ 9 $ 2 $ 4

Income Taxes

Income Taxes
	6 Months Ended Jun. 30, 2009 USD / shares
Income Taxes [Abstract]
Income Taxes	Note10Income Taxes The components of income tax expense were: Three Months Ended Six Months Ended June30, June30, (Dollars in Millions) 2009 2008 2009 2008 Federal Current $ 310 $ 363 $ 684 $ 819 Deferred (225 ) (42 ) (520 ) (84 ) Federal income tax 85 321 164 735 State Current 36 68 85 133 Deferred (21 ) (3 ) (48 ) (6 ) State income tax 15 65 37 127 Total income tax provision $ 100 $ 386 $ 201 $ 862 A reconciliation of expected income tax expense at the federal statutory rate of 35percent to the Companys applicable income tax expense follows: Three Months Ended Six Months Ended June30, June30, (Dollars in Millions) 2009 2008 2009 2008 Tax at statutory rate $ 205 $ 474 $ 431 $ 1,028 State income tax, at statutory rates, net of federal tax benefit 10 42 24 82 Tax effect of Tax credits (76 ) (72 ) (151 ) (140 ) Tax-exempt income (49 ) (44 ) (98 ) (85 ) Noncontrolling interests (4 ) (6 ) (10 ) (12 ) Other items 14 (8 ) 5 (11 ) Applicable income taxes $ 100 $ 386 $ 201 $ 862 The Companys income tax returns are subject to review and examination by federal, state, local and foreign government authorities. On an ongoing basis, numerous federal, state, local and foreign examinations are in progress and cover multiple tax years. As of June30, 2009, the federal taxing authority has completed its examination of the Company through the fiscal year ended December31, 2006. The years open to examination by foreign, state and local government authorities vary by jurisdiction. The Companys net deferred tax asset was $951million at June30, 2009, and $1.1billion at December31, 2008.

Derivative Instruments

Derivative Instruments
	6 Months Ended Jun. 30, 2009 USD / shares
Derivative Instruments [Abstract]
Derivative Instruments	Note11Derivative Instruments The Company recognizes all derivatives in the consolidated balance sheet at fair value as other assets or liabilities. On the date the Company enters into a derivative contract, the derivative is designated as either a hedge of the fair value of a recognized asset or liability, including hedges of foreign currency exposure (fair value hedge); a hedge of a forecasted transaction or the variability of cash flows to be paid related to a recognized asset or liability (cash flow hedge); or a customer accommodation or an economic hedge for asset/liability risk management purposes (free-standing derivative). Of the Companys $55.5billion of total notional amount of asset and liability management positions at June30, 2009, $19.1 billion was designated as a fair value or cash flow hedge. When a derivative is designated as either a fair value or cash flow hedge, the Company performs an assessment, at inception and quarterly thereafter to determine the effectiveness of the derivative in offsetting changes in the value of the hedged item(s). Fair Value Hedges These derivatives are primarily interest rate swaps that hedge the change in fair value related to interest rate changes of underlying fixed-rate debt, junior subordinated debentures and deposit obligations. Changes in the fair value of derivatives designated as fair value hedges, and changes in the fair value of the hedged items, are recorded in earnings. All fair value hedges were highly effective for the six months ended June30, 2009, and the change in fair value attributed to hedge ineffectiveness was not material. The Company also uses forward commitments to sell specified amounts of certain foreign currencies and foreign denominated debt to hedge the volatility of its investment in foreign operations as driven by fluctuations in foreign currency exchange rates. The net amount of gains or losses included in the cumulative translation adjustment for the second quarter and first six months of 2009 was not material. Cash Flow Hedges These derivatives are interest rate swaps that are hedges of the forecasted cash flows from the underlying variable-rate debt. Changes in the fair value of derivatives designated as cash flow hedges are recorded in other comprehensive income (loss) until income from the cash flows of the hedged items is realized. If a derivative designated as a cash flow hedge is terminated or ceases to be highly effective, the gain or loss in other comprehensive income (loss) is amortized to earnings over the period the forecasted hedged transactions impact earnings. If a hedged forecasted transaction is no longer probable, hedge accounting is ceased and any gain or loss included in other comprehensive income (loss) is reported in earnings immediately. At June30, 2009, the Company had $403million of realized and unrealized losses on derivatives classified as cash flow hedges recorded in other comprehensive income (loss). The estimated amount to be reclassified from other comprehensive income (loss) into earnings during the remainder of 2009 and the next 12months is a loss of $100million and $200million, respectively. This in

Fair Values of Assets and Liabi

Fair Values of Assets and Liabilities
	6 Months Ended Jun. 30, 2009 USD / shares
Fair Values of Assets and Liabilities [Abstract]
Fair Values of Assets and Liabilities	Note 12Fair Values of Assets and Liabilities The Company uses fair value measurements for the initial recording of certain assets and liabilities, periodic remeasurement of certain assets and liabilities, and disclosures. Derivatives, investment securities, certain mortgage loans held for sale (MLHFS) and MSRs are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as loans held for sale, loans held for investment and certain other assets. These nonrecurring fair value adjustments typically involve application of lower-of-cost-or-fair value accounting or impairment write-downs of individual assets. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value measurement reflects all of the assumptions that market participants would use in pricing the asset or liability, including assumptions about the risk inherent in a particular valuation technique, the effect of a restriction on the sale or use of an asset, and the risk of nonperformance. The Company groups its assets and liabilities measured at fair value into a three-level hierarchy for valuation techniques used to measure financial assets and financial liabilities at fair value. This hierarchy is based on whether the valuation inputs are observable or unobservable. These levels are: Level1 Quoted prices in active markets for identical assets or liabilities. Level 1 includes U.S.Treasury and exchange-traded instruments. Level2 Observable inputs other than Level1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level2 includes debt securities that are traded less frequently than exchange-traded instruments and which are valued using third party pricing services; derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data; and MLHFS whose values are determined using quoted prices for similar assets or pricing models with inputs that are observable in the market or can be corroborated by observable market data. Level3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level3 assets and liabilities include financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category includes residential MSRs, certain debt securities, including the Companys SIV-related investments

Guarantees and Contingent Liabi

Guarantees and Contingent Liabilities
	6 Months Ended Jun. 30, 2009 USD / shares
Guarantees and Contingent Liabilities [Abstract]
Guarantees and Contingent Liabilities	Note13Guarantees and Contingent Liabilities Visa Restructuring and Card Association LitigationThe Companys payment services business issues and acquires credit and debit card transactions through the Visa U.S.A. Inc. card association or its affiliates (collectively Visa). In 2007, Visa completed a restructuring and issued shares of Visa Inc. common stock to its financial institution members in contemplation of its initial public offering (IPO) completed in the first quarter of 2008 (the Visa Reorganization). As a part of the Visa Reorganization, the Company received its proportionate number of shares of Visa Inc. common stock. In addition, the Company and certain of its subsidiaries have been named as defendants along with Visa U.S.A. Inc. (Visa U.S.A.) and MasterCard International (collectively, the Card Associations), as well as several other banks, in antitrust lawsuits challenging the practices of the Card Associations (the Visa Litigation). Visa U.S.A. member banks have a contingent obligation to indemnify Visa Inc. under the Visa U.S.A. bylaws (which were modified at the time of the restructuring in October 2007)for potential losses arising from the Visa Litigation. The contingent obligation of member banks under the Visa U.S.A. bylaws has no specific maximum amount. The Company has also entered into judgment and loss sharing agreements with Visa U.S.A. and certain other banks in order to apportion financial responsibilities arising from any potential adverse judgment or negotiated settlements related to the Visa Litigation. In 2007 and 2008, Visa announced settlement agreements with American Express and Discover Financial Services, respectively. In addition to these settlements, Visa U.S.A. member banks remain obligated to indemnify Visa Inc. for potential losses arising from the remaining Visa litigation. Using proceeds from its initial IPO and through subsequent reductions to the conversion ratio applicable to the ClassB shares held by member financial institutions, Visa Inc. has funded an escrow account for the benefit of member financial institutions to fund the expenses of the Visa Litigation, as well as the members proportionate share of any judgments or settlements that may arise out of the Visa Litigation. The receivable related to the escrow account is classified in other liabilities as a direct offset to the related Visa Litigation liabilities and will decline as amounts are paid out of the escrow account. As of June30, 2009, the carrying amount of the Companys liability related to the remaining Visa Litigation was $149million. The remaining ClassB shares held by the Company will be eligible for conversion to ClassA shares three years after the IPO or upon settlement of the Visa Litigation, whichever is later. Other Guarantees and Contingent Liabilities The following table is a summary of other guarantees and contingent liabilities of the Company at June30, 2009: Maximum Potential Carrying Future (Dollars in Millions) Amount Payments Standby letters of credit $ 94 $ 1

Subsequent Events

Subsequent Events
	6 Months Ended Jun. 30, 2009 USD / shares
Subsequent Events [Abstract]
Subsequent Events	Note14Subsequent Events The Company has evaluated the impact of events that have occurred subsequent to June30, 2009 through August10, 2009, the date the consolidated financial statements were filed with the United States Securities and Exchange Commission. Based on this evaluation, the Company has determined none of these events were required to be recognized in the consolidated financial statements. On July15, 2009, the Company repurchased for $139million the warrant to purchase 33million shares of the Companys common stock held by the U.S. Department of the Treasury. The warrant repurchase transaction will be accounted for as a reduction in the Companys capital surplus in the third quarter of 2009.

Condensed Daily Average Balance

Condensed Daily Average Balance Sheet And related Yields And Rates
	6 Months Ended Jun. 30, 2009 USD / shares
Daily Average Balance Sheet And Related Yields And Rates [Abstract]
Daily Average Balance Sheet And Related Yields And Rates	Daily Average Balance Sheet And Related Yields And Rates U.S.Bancorp Consolidated Daily Average Balance Sheet and Related Yields and Rates (a) For the Three Months Ended June30, 2009 2008 Yields Yields % Change (Dollars in Millions) Average and Average and Average (Unaudited) Balances Interest Rates Balances Interest Rates Balances Assets Investment securities $ 42,189 $ 443 4.20 % $ 42,999 $ 538 5.01 % (1.9 )% Loans held for sale 6,092 71 4.65 3,417 49 5.70 78.3 Loans(b) Commercial 54,059 523 3.89 53,979 645 4.80 .1 Commercial real estate 33,727 361 4.29 30,473 429 5.67 10.7 Residential mortgages 23,964 338 5.64 23,307 354 6.08 2.8 Retail 61,427 1,011 6.60 55,311 1,009 7.34 11.1 Total loans, excluding covered assets 173,177 2,233 5.17 163,070 2,437 6.01 6.2 Covered assets 10,701 124 4.66 * Total loans 183,878 2,357 5.14 163,070 2,437 6.01 12.8 Other earning assets 2,106 22 4.16 2,603 43 6.58 (19.1 ) Total earning assets 234,265 2,893 4.95 212,089 3,067 5.81 10.5 Allowance for loan losses (4,260 ) (2,292 ) (85.9 ) Unrealized gain (loss) on available-for-sale securities (1,857 ) (1,548 ) (20.0 ) Other assets 37,959 33,972 11.7 Total assets $ 266,107 $ 242