U.S. Bancorp (USB) 10-Q 7 May 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information (USD $)
In Billions, except Share data	3 Months Ended Mar. 31, 2010	Apr. 30, 2010
Document and Entity Information [Abstract]
Entity Registrant Name	US BANCORP \DE\
Entity Central Index Key	0000036104
Document Type	10-Q
Document Period End Date	2010-03-31
Amendment Flag	false
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
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	34.3
Entity Common Stock Shares Outstanding (actual number of shares)		1,916,894,222

Consolidated Balance Sheet (Una

Consolidated Balance Sheet (Unaudited) (USD $)
In Millions	Mar. 31, 2010	Dec. 31, 2009
Assets
Cash and due from banks	$8,380	$6,206
Investment securities
Held-to-maturity (fair value $541 and $48, respectively)	625	47
Available-for-sale	46,288	44,721
Loans held for sale (included $3,584 and $4,327 of mortgage loans carried at fair value, respectively)	3,884	4,772
Loans
Commercial	46,312	48,792
Commercial real estate	34,207	34,093
Residential mortgages	26,520	26,056
Retail	63,191	63,955
Total loans, excluding covered assets	170,230	172,896
Covered assets	20,923	21,859
Total loans	191,153	194,755
Less allowance for loan losses	(5,235)	(5,079)
Net loans	185,918	189,676
Premises and equipment	2,246	2,263
Goodwill	9,007	9,011
Other intangible assets	3,388	3,406
Other assets	22,692	21,074
Total assets	282,428	281,176
Deposits
Noninterest-bearing	38,913	38,186
Interest-bearing	117,922	115,135
Time deposits greater than $100,000	27,204	29,921
Total deposits	184,039	183,242
Short-term borrowings	31,196	31,312
Long-term debt	32,399	32,580
Other liabilities	7,406	7,381
Total liabilities	255,040	254,515
Shareholders' equity
Preferred stock	1,500	1,500
Common stock, par value $0.01 a share - authorized: 4,000,000,000 shares; issued: 03/31/10 and 12/31/09 - 2,125,725,742 shares	21	21
Capital surplus	8,267	8,319
Retained earnings	24,597	24,116
Less cost of common stock in treasury: 03/31/10 - 209,654,913 shares; 12/31/09 - 212,786,937 shares	(6,409)	(6,509)
Accumulated other comprehensive income (loss)	(1,267)	(1,484)
Total U.S. Bancorp shareholders' equity	26,709	25,963
Noncontrolling interests	679	698
Total equity	27,388	26,661
Total liabilities and equity	$282,428	$281,176

Consolidated Balance Sheet (Par

Consolidated Balance Sheet (Parenthetical) (Unaudited) (USD $)
In Millions, except Share data	Mar. 31, 2010	Dec. 31, 2009
Investment securities
Held-to-maturity, fair value	$541	$48
Mortgage loans, carried at fair value	$3,584	$4,327
Shareholders' equity
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	2,125,725,742
Treasury stock, shares (actual number of shares)	209,654,913	212,786,937

Consolidated Statement of Incom

Consolidated Statement of Income (Unaudited) (USD $)
In Millions, except Per Share data	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Interest Income
Loans	$2,505	$2,350
Loans held for sale	44	63
Investment securities	410	434
Other interest income	34	20
Total interest income	2,993	2,867
Interest Expense
Deposits	236	324
Short-term borrowings	128	143
Long-term debt	277	353
Total interest expense	641	820
Net interest income	2,352	2,047
Provision for credit losses	1,310	1,318
Net interest income after provision for credit losses	1,042	729
Noninterest Income
Credit and debit card revenue	258	256
Corporate payment products revenue	168	154
Merchant processing services	292	258
ATM processing services	105	102
Trust and investment management fees	264	294
Deposit service charges	207	226
Treasury management fees	137	137
Commercial products revenue	161	129
Mortgage banking revenue	200	233
Investment products fees and commissions	25	28
Securities gains (losses), net
Realized gains (losses), net	12	56
Total other-than-temporary impairment	(87)	(381)
Portion of other-than-temporary impairment recognized in other comprehensive income	41	127
Total securities gains (losses), net	(34)	(198)
Other	135	169
Total noninterest income	1,918	1,788
Noninterest Expense
Compensation	861	786
Employee benefits	180	155
Net occupancy and equipment	227	211
Professional services	58	52
Marketing and business development	60	56
Technology and communications	185	155
Postage, printing and supplies	74	74
Other intangibles	97	91
Other	394	291
Total noninterest expense	2,136	1,871
Income before income taxes	824	646
Applicable income taxes	161	101
Net income	663	545
Net (income) loss attributable to noncontrolling interests	6	(16)
Net income attributable to U.S. Bancorp	669	529
Net income applicable to U.S. Bancorp common shareholders	$648	$419
Earnings per common share	0.34	0.24
Diluted earnings per common share	0.34	0.24
Dividends declared per common share	0.05	0.05
Average common shares outstanding	1,910	1,754
Average diluted common shares outstanding	1,919	1,760

Consolidated Statement of Share

Consolidated Statement of Shareholders Equity (Unaudited) (USD $)
In Millions	Total Shareholders' Equity	Preferred Stock	Common Stock	Capital Surplus	Retained Earnings	Treasury Stock	Other Comprehensive Income	Noncontrolling Interests	Total
Shares, Beginning Balance at Dec. 31, 2008			1,755
Beginning Balance at Dec. 31, 2008	$26,300	$7,931	$20	$5,830	$22,541	($6,659)	($3,363)	$733	$27,033
Change in accounting principle					141		(141)
Net income	529				529			16	545
Changes in unrealized gains and losses on securities available-for-sale	690						690		690
Other-than-temporary impairment not recognized in earnings on securities available-for-sale	(127)						(127)		(127)
Unrealized gain on derivatives	118						118		118
Foreign currency translation	14						14		14
Reclassification for realized losses	201						201		201
Income taxes	(341)						(341)		(341)
Total comprehensive income	1,084							16	1,100
Preferred stock dividends and discount accretion	(100)	8			(108)				(100)
Common stock dividends	(88)				(88)				(88)
Issuance of common and treasury stock	2			(114)		116			2
Issuance of common and treasury stock, shares			4
Purchase of treasury stock	(3)					(3)			(3)
Net other changes in noncontrolling interests								(30)	(30)
Stock option and restricted stock grants	28			28					28
Ending Balance at Mar. 31, 2009	27,223	7,939	20	5,744	23,015	(6,546)	(2,949)	719	27,942
Shares, Ending Balance at Mar. 31, 2009			1,759
Shares, Beginning Balance at Dec. 31, 2009			1,913
Beginning Balance at Dec. 31, 2009	25,963	1,500	21	8,319	24,116	(6,509)	(1,484)	698	26,661
Change in accounting principle	(73)				(73)			(16)	(89)
Net income	669				669			(6)	663
Changes in unrealized gains and losses on securities available-for-sale	386						386		386
Other-than-temporary impairment not recognized in earnings on securities available-for-sale	(41)						(41)		(41)
Unrealized gain on derivatives	(39)						(39)		(39)
Foreign currency translation	8						8		8
Reclassification for realized losses	35						35		35
Income taxes	(132)						(132)		(132)
Total comprehensive income	886							(6)	880
Preferred stock dividends and discount accretion	(19)				(19)				(19)
Common stock dividends	(96)				(96)				(96)
Issuance of common and treasury stock	28			(87)		115			28
Issuance of common and treasury stock, shares			4
Purchase of treasury stock	(15)					(15)			(15)
Purchase of treasury stock, shares			(1)
Net other changes in noncontrolling interests								21	21
Distributions to noncontrolling interests								(18)	(18)
Stock option and restricted stock grants	35			35					35
Ending Balance at Mar. 31, 2010	$26,709	$1,500	$21	$8,267	$24,597	($6,409)	($1,267)	$679	$27,388
Shares, Ending Balance at Mar. 31, 2010			1,916

Consolidated Statement of Cash

Consolidated Statement of Cash Flows (Unaudited) (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Operating Activities
Net cash provided by operating activities	$2,876	$1,847
Investing Activities
Proceeds from sales of available-for-sale investment securities	922	3,132
Proceeds from maturities of investment securities	3,136	1,417
Purchases of investment securities	(5,269)	(2,861)
Net decrease (increase) in loans outstanding	1,944	(223)
Proceeds from sales of loans	440	605
Purchases of loans	(622)	(497)
Acquisitions, net of cash acquired	832
Other, net	(302)	975
Net cash provided by investing activities	1,081	2,548
Financing Activities
Net increase (decrease) in deposits	314	3,216
Net increase (decrease) in short-term borrowings	(769)	(7,976)
Proceeds from issuance of long-term debt	902	2,597
Principal payments or redemption of long-term debt	(2,143)	(2,084)
Proceeds from issuance of common stock	28
Cash dividends paid on preferred stock	(19)	(107)
Cash dividends paid on common stock	(96)	(746)
Net cash used in financing activities	(1,783)	(5,100)
Change in cash and due from banks	2,174	(705)
Cash and due from banks at beginning of period	6,206	6,859
Cash and due from banks at end of period	$8,380	$6,154

Basis of Presentation

Basis of Presentation
	3 Months Ended Mar. 31, 2010
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, 2009. 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
	3 Months Ended Mar. 31, 2010
Accounting Changes [Abstract]
Accounting Changes	Note 2Accounting Changes Accounting for Transfers of Financial AssetsEffective January1, 2010, the Company adopted accounting guidance issued by the Financial Accounting Standards Board (FASB) related to transfers of financial assets. This guidance removes the exception for qualifying special-purpose entities from consolidation guidance and the exception for guaranteed mortgage securitizations when a transferor had not surrendered control over the transferred financial assets. In addition, the guidance provides clarification of the requirements for isolation and limitations on sale accounting for portions of financial assets. The guidance also requires additional disclosure about transfers of financial assets and a transferors continuing involvement with transferred assets. The adoption of this guidance was not significant to the Companys financial statements. Variable Interest EntitiesEffective January1, 2010, the Company adopted accounting guidance issued by the FASB related to variable interest entities (VIEs). Generally, a VIE is an entity with insufficient equity at risk requiring additional subordinated financial support, or an entity in which equity investors as a group, either (i)lack the power through voting or other similar rights, to direct the activities of the entity that most significantly impact its performance, (ii)lack the obligation to absorb the expected losses of the entity or (iii)lack the right to receive the expected residual returns of the entity. The new guidance replaces the previous quantitative-based risks and rewards calculation for determining whether an entity must consolidate a VIE with an assessment of whether the entity has both (i)the power to direct the activities of the VIE that most significantly impact the VIEs economic performance and (ii)the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. This guidance requires reconsideration of whether an entity is a VIE upon occurrence of certain events, as well as ongoing assessments of whether a variable interest holder is the primary beneficiary of a VIE. The Company consolidated approximately $1.6billion of assets of previously unconsolidated entities, and deconsolidated approximately $84million of assets of previously consolidated entities upon adoption of this guidance. Additionally, the adoption of this guidance reduced total equity by $89million.

Investment Securities

Investment Securities
	3 Months Ended Mar. 31, 2010
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: March31, 2010 December31, 2009 Unrealized Losses Unrealized Losses Amortized Unrealized Other-than- Fair Amortized Unrealized Other-than- Fair (Dollars in Millions) Cost Gains Temporary Other Value Cost Gains Temporary Other Value Held-to-maturity(a) U.S. Treasury and agencies $ 64 $ $ $ $ 64 $ $ $ $ $ Mortgage-backed securities Residential Agency 4 4 4 4 Non-agency Non-prime 4 4 Commercial 11 (7 ) 4 Asset-backed securities Collateralized debt obligations/Collaterized loan obligations 236 10 (36 ) 210 Other 134 (2) (9 ) 123 Obligations of state and political subdivisions 31 2 (1 ) 32 32 2 (1 ) 33 Other debt securities 141 (41 ) 100 11 11 Total held-to-maturity $ 625 $ 12 $ (2) $ (94 ) $ 541 $ 47 $ 2 $ $ (1 ) $ 48 Available-for-sale(b)

Loans

Loans
	3 Months Ended Mar. 31, 2010
Loans [Abstract]
Loans	Note4Loans The composition of the loan portfolio was as follows: March31, 2010 December31, 2009 Percent Percent (Dollars in Millions) Amount of Total Amount of Total Commercial Commercial $ 39,937 20.9 % $ 42,255 21.7 % Lease financing 6,375 3.3 6,537 3.4 Total commercial 46,312 24.2 48,792 25.1 Commercial real estate Commercial mortgages 25,501 13.3 25,306 13.0 Construction and development 8,706 4.6 8,787 4.5 Total commercial real estate 34,207 17.9 34,093 17.5 Residential mortgages Residential mortgages 21,037 11.0 20,581 10.6 Home equity loans, first liens 5,483 2.9 5,475 2.8 Total residential mortgages 26,520 13.9 26,056 13.4 Retail Credit card 16,222 8.5 16,814 8.6 Retail leasing 4,446 2.4 4,568 2.3 Home equity and second mortgages 19,322 10.1 19,439 10.0 Other retail Revolving credit 3,431 1.8 3,506 1.8 Installment 5,433 2.8 5,455 2.8 Automobile 9,662 5.1 9,544 4.9 Student 4,675 2.4 4,629 2.4 Total other retail 23,201 12.1 23,134 11.9 Total retail 63,191 33.1 63,955 32.8 Total loans, excluding covered loans 170,230 89.1 172,896 88.8 Covered loans 20,923 10.9 21,859 11.2 Total loans $ 191,153 100.0 % $ 194,755 100.0 % The Company had loans of $55.6billion at March31, 2010, and December31, 2009, pledged at the Federal Home Loan Bank (FHLB), and loans of $43.5billion at March31, 2010, and $44.2billion at December31, 2009, pledged at the Federal Reserve Bank. Originated loans are presented net of unearned interest and deferred fees and costs, which amounted to $1.3billion at March31, 2010 and December31, 2009. In accor

Accounting for Transfers and Se

Accounting for Transfers and Servicing of Financial Assets and Variable Interest Entities
	3 Months Ended Mar. 31, 2010
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	Note5Accounting for Transfers and Servicing of Financial Assets and Variable Interest Entities The Company sells financial assets in the normal course of business. The majority of the Companys financial asset sales are residential mortgage loan sales primarily to government-sponsored enterprises through established programs, the sale or syndication of tax-advantaged investments, commercial loan sales through participation agreements, and other individual or portfolio loan and securities sales. In accordance with the accounting guidance for asset transfers, the Company considers any ongoing involvement with transferred assets in determining whether the assets can be derecognized from the balance sheet. For loans sold under participation agreements, the Company also considers the terms of the loan participation agreement and whether they meet the definition of a participating interest and thus qualify for derecognition. With the exception of servicing and certain performance-based guarantees, the Companys continuing involvement with financial assets sold is minimal and generally limited to market customary representation and warranty clauses. The guarantees provided to certain third parties in connection with the sale or syndication of certain assets, primarily loan portfolios and tax-advantaged investments, is further discussed in Note22 in the Companys Annual Report on Form10-K for the year ended December31, 2009. When the Company sells financial assets, it may retain servicing rights and/or other interests in the transferred financial assets. The gain or loss on sale depends on the previous carrying amount of the transferred financial assets and the consideration received and any liabilities incurred in exchange for the transferred assets. Upon transfer, any servicing assets and other interests that continue to be held by the Company are initially recognized at fair value. For further information on mortgage servicing rights, refer to Note6. The Company has no asset securitizations or similar asset-backed financing arrangements that are off balance sheet. The Company is involved in various entities that are considered to be VIEs. The Companys investments in VIEs primarily represent private investment funds or partnerships that make equity investments, provide debt financing or 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. In addition, the Company sponsors entities to which it transfers tax-advantaged investments. As a result of adopting new accounting guidance, the Company consolidated certain community development and tax-advantaged investment entities on January1, 2010 that it had not previously consolidated. The consolidation of these VIEs increased assets and liabilities by approximately $1.0billion. The equity impact of consolidating these VIEs was an $9million decrease, which represents the recognition of noncontrolling interests in the consolidated VIEs. At March31, 2010, approx

Mortgage Servicing Rights

Mortgage Servicing Rights
	3 Months Ended Mar. 31, 2010
Mortgage Servicing Rights [Abstract]
Mortgage Servicing Rights	Note6Mortgage Servicing Rights The Company serviced $156.5billion of residential mortgage loans for others at March31, 2010, and $150.8billion at December31, 2009. The net impact included in mortgage banking revenue of assumption changes on the fair value of mortgage servicing rights (MSRs) and fair value changes of derivatives used to offset MSR value changes was a net gain of $42million and $2million for the three months ended March31, 2010, and 2009, respectively. Loan servicing fees, not including valuation changes included in mortgage banking revenue, were $142million and $117million for the three months ended March31, 2010, and 2009, respectively. Changes in fair value of capitalized MSRs are summarized as follows: Three Months Ended March31, (Dollars in Millions) 2010 2009 Balance at beginning of period $ 1,749 $ 1,194 Rights purchased 5 33 Rights capitalized 132 193 Changes in fair value of MSRs: Due to change in valuation assumptions(a) (36 ) (135 ) Other changes in fair value(b) (72 ) (103 ) Balance at end of period $ 1,778 $ 1,182 (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 March31, 2010, was as follows: Down Scenario Up Scenario (Dollars in Millions) 50bps 25bps 25bps 50bps Net fair value $ 3 $ 5 $ 1 $ 3 The fair value of MSRs and their sensitivity to changes in interest rates is influenced by the mix of the servicing portfolio and characteristics of each segment of the portfolio. The Companys servicing portfolio consists of the distinct portfolios of government-insured mortgages, conventional mortgages, and Mortgage Revenue Bond Programs (MRBP). The servicing portfolios are predominantly comprised of fixed-rate agency loans with limited adjustable-rate or jumbo mortgage loans. The MRBP division specializes in servicing loans made under state and local housing authority programs. These programs provide mortgages to low-income and moderate-income borrowers and are generally government-insured programs with a favorable rate subsidy, down payment and/or closing cost assistance. Mortgage loans originated as part of government agency and state loans programs tend to experience slower prepayment rates and better cash flows than conventional mortgage loans. A summary of the Companys MSRs and related characteristics by portfolio at March31, 2010 was as follows: (Dollars in Millions) MRBP(a) Government Conventiona

Earnings Per Share

Earnings Per Share
	3 Months Ended Mar. 31, 2010
Earnings Per Share [Abstract]
Earnings Per Share	Note7Earnings Per Share The components of earnings per share were: Three Months Ended March31, (Dollars and Shares in Millions, Except Per Share Data) 2010 2009 Net income attributable to U.S. Bancorp $ 669 $ 529 Preferred dividends (19 ) (100 ) Accretion of preferred stock discount (8 ) Earnings allocated to participating stock awards (2 ) (2 ) Net income applicable to U.S. Bancorp common shareholders $ 648 $ 419 Average common shares outstanding 1,910 1,754 Net effect of the exercise and assumed purchase of stock awards and conversion of outstanding convertible notes 9 6 Average diluted common shares outstanding 1,919 1,760 Earnings per common share $ .34 $ .24 Diluted earnings per common share $ .34 $ .24 Options and warrants outstanding at March31, 2010 and 2009 to purchase 56million and 114million common shares, respectively, were not included in the computation of diluted earnings per share for the three months ended March31, 2010 and 2009, respectively, because they were antidilutive.

Employee Benefits

Employee Benefits
	3 Months Ended Mar. 31, 2010
Employee Benefits [Abstract]
Employee Benefits	Note8Employee Benefits The components of net periodic benefit cost for the Companys retirement plans were: Three Months Ended March31, Postretirement Pension Plans Welfare Plan (Dollars in Millions) 2010 2009 2010 2009 Service cost $ 23 $ 20 $ 2 $ 1 Interest cost 39 38 2 3 Expected return on plan assets (54 ) (54 ) (1 ) (1 ) Prior service (credit) cost and transition (asset) obligation amortization (3 ) (1 ) Actuarial (gain) loss amortization 16 12 (1 ) (2 ) Net periodic benefit cost $ 21 $ 15 $ 2 $ 1

Income Taxes

Income Taxes
	3 Months Ended Mar. 31, 2010
Income Taxes [Abstract]
Income Taxes	Note9Income Taxes The components of income tax expense were: Three Months Ended March31, (Dollars in Millions) 2010 2009 Federal Current $ 154 $ 374 Deferred (20 ) (295 ) Federal income tax 134 79 State Current 29 49 Deferred (2 ) (27 ) State income tax 27 22 Total income tax provision $ 161 $ 101 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 March31, (Dollars in Millions) 2010 2009 Tax at statutory rate $ 289 $ 226 State income tax, at statutory rates, net of federal tax benefit 17 14 Tax effect of Tax credits (100 ) (75 ) Tax-exempt income (52 ) (49 ) Noncontrolling interests 2 (6 ) Other items 5 (9 ) Applicable income taxes $ 161 $ 101 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 March31, 2010, the federal taxing authority had 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 liability was $332million at March31, 2010, and $190million at December31, 2009.

Derivative Instruments

Derivative Instruments
	3 Months Ended Mar. 31, 2010
Derivative Instruments [Abstract]
Derivative Instruments	Note10Derivative 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 $40.3billion of total notional amount of asset and liability management positions at March31, 2010, $11.9billion 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 or cash flows of the hedged item(s). Fair Value HedgesThese derivatives are primarily interest rate swaps that hedge the change in fair value related to interest rate changes of underlying fixed-rate debt and junior subordinated debentures. 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 three months ended March31, 2010, 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 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 three months ended March31, 2010 was not material. Cash Flow HedgesThese 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 March31, 2010, the Company had $351million 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 2010 and the next 12months is a loss of $106million and $148million, respectively. This includes gains and losses related to hedges tha

Fair Values of Assets and Liabi

Fair Values of Assets and Liabilities
	3 Months Ended Mar. 31, 2010
Fair Values of Assets and Liabilities [Abstract]
Fair Values of Assets and Liabilities	Note11Fair 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, available-for-sale 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 inv

Guarantees and Contingent Liabi

Guarantees and Contingent Liabilities
	3 Months Ended Mar. 31, 2010
Guarantees and Contingent Liabilities [Abstract]
Guarantees and Contingent Liabilities	Note12Guarantees 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. On July16, 2009, Visa deposited additional funds into the escrow account and further reduced the conversion ratio applicable to the ClassB shares. As a result, the Company recognized a $39million gain related to the effective repurchase of a portion of its ClassB shares. At March31, 2010, the carrying amount of the Companys liability related to the remaining Visa litigation was $117million. 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. The following table is a summary of other guarantees and contingent liabilities of the Company at March31, 2010:

Subsequent Events

Subsequent Events
	3 Months Ended Mar. 31, 2010
Subsequent Events [Abstract]
Subsequent Events	Note 13Subsequent Events The Company has evaluated the impact of events that have occurred subsequent to March31, 2010 through 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.