U.S. Bancorp (USB) 8-K U.s. Bancorp Reports Net Income for the Second Quarter of 2010

Exhibit 99.1

	News Release
	Contacts:
	Steve Dale	Judith T. Murphy
	Media	Investors/Analysts
	(612) 303-0784	(612) 303-0783

U.S. BANCORP REPORTS NET INCOME
FOR THE SECOND QUARTER OF 2010

Achieves Record Total Net Revenue of $4.5 Billion

          MINNEAPOLIS, July 21, 2010—U.S. Bancorp (NYSE: USB) today reported net income of $766 million for the second quarter of 2010, or $.45 per diluted common share. Earnings per diluted common share included a $.05 benefit related to a non-recurring exchange of perpetual preferred stock for outstanding income trust securities during the quarter. Earnings for the second quarter were driven by record total net revenue of $4.5 billion, the result of strong year-over-year growth in both net interest income and fee revenue. Highlights for the second quarter of 2010 included:

• Strong new lending activity of $46.3 billion during the second quarter including:

• $11.4 billion of new commercial and commercial real estate commitments

• $17.9 billion of commercial and commercial real estate commitment renewals

• $1.7 billion of lines related to new credit card accounts

• $15.3 billion of mortgage production and other retail originations

• Significant growth in average deposits of 12.3 percent (4.1 percent excluding acquisitions) over the second quarter of 2009, including:

• 6.8 percent growth in average noninterest-bearing deposits

• 29.7 percent growth in average total savings deposits

• Total net revenue growth of 8.7 percent over the second quarter of 2009

• Net interest income growth of 14.5 percent over the second quarter of 2009, driven by a 5.6 percent increase in average earning assets and growth in lower cost core deposit funding

• Net interest margin of 3.90 percent for the second quarter of 2010, compared with 3.60 percent in the second quarter of 2009 (and 3.90 percent in the first quarter of 2010)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 2

• Strong year-over-year growth in payments-related fee income and commercial products revenue, driven by:

• Higher merchant processing services revenue (15.1 percent) and corporate payment products revenue (6.0 percent)

• A 42.4 percent increase in commercial products revenue (principally syndication revenue, standby letters of credit fees and commercial loan fees)

• Net charge-offs and nonperforming assets both decreased on a linked quarter basis. Provision for credit losses exceeded net charge-offs by $25 million (2.2 percent):

• Third consecutive quarterly decrease in the provision for credit losses

• Net charge-offs decreased 1.9 percent from first quarter of 2010

• Nonperforming assets decreased 7.8 percent from first quarter of 2010

• Early and late stage loan delinquencies (excluding covered loans) as a percentage of ending loan balances declined in a majority of major loan categories on a linked quarter basis

• Allowance to period-end loans (excluding covered loans) was 3.18 percent at June 30, 2010, compared with 3.20 percent at March 31, 2010

• Allowance to nonperforming assets (excluding covered assets) was 146 percent at June 30, 2010, compared with 136 percent at March 31, 2010

• Capital generation continues to strengthen capital position; ratios at June 30, 2010:

• Tier 1 capital ratio of 10.1 percent

• Total risk-based capital ratio of 13.4 percent

• Tier 1 common equity ratio of 7.4 percent

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 3

EARNINGS SUMMARY Table 1

							Percent		Percent
							Change		Change
	2Q		1Q		2Q		2Q10 vs		2Q10 vs		YTD		YTD		Percent
($ in millions, except per-share data)	2010		2010		2009		1Q10		2Q09		2010		2009		Change
Net income attributable to U.S. Bancorp	$	766	$	669	$	471		14.5		62.6	$	1,435	$	1,000		43.5
Diluted earnings per common share	$	.45	$	.34	$	.12		32.4	nm		$	.79	$	.36	nm
Return on average assets (%)		1.09		.96		.71						1.03		.76
Return on average common equity (%)		13.4		10.5		4.2						12.0		6.4
Net interest margin (%)		3.90		3.90		3.60						3.90		3.59
Efficiency ratio (%)		52.4		49.0		51.0						50.7		48.4
Tangible efficiency ratio (%) (a)		50.4		46.8		48.7						48.6		46.2
Dividends declared per common share	$	.05	$	.05	$	.05		—		—	$	.10	$	.10		—
Book value per common share (period-end)	$	13.69	$	13.16	$	11.86		4.0		15.4

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

     Net income attributable to U.S. Bancorp was $766 million for the second quarter of 2010, 62.6 percent higher than the $471 million for the second quarter of 2009 and 14.5 percent higher than the $669 million for the first quarter of 2010. Diluted earnings per common share of $.45 in the second quarter of 2010 were $.33 higher than the second quarter of 2009 and $.11 higher than the previous quarter. Return on average assets and return on average common equity were 1.09 percent and 13.4 percent, respectively, for the second quarter of 2010, compared with .71 percent and 4.2 percent, respectively, for the second quarter of 2009. Diluted earnings per common share for the second quarter of 2010 included $.05 related to the issuance of perpetual preferred stock in exchange for certain income trust securities, net of related debt extinguishment costs. Additional significant items in the second quarter of 2010 included provision for credit losses in excess of net-charge-offs of $25 million, net securities losses of $21 million and a $28 million gain related to the Company’s investment in Visa Inc. (NYSE: V). In the second quarter of 2009, significant items included provision for credit losses in excess of net charge-offs of $466 million, net securities losses of $19 million, a $123 million accrual for an FDIC special assessment and $154 million of accelerated amortization of a discount associated with TARP preferred stock redeemed on June 17, 2009. These items, in total, reduced second quarter of 2009 diluted earnings per common share by $.34. First quarter of 2010 earnings were impacted by $175 million of provision for credit losses in excess of net charge-offs and $34 million of net

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 4

securities losses. These items, in total, reduced first quarter of 2010 diluted earnings per common share by approximately $.08.

     U.S. Bancorp Chairman, President and Chief Executive Officer Richard K. Davis said, “I am very proud of our second quarter results and accomplishments. The Company’s net income of $766 million in the second quarter of 2010 was 62.6 percent higher than same quarter of 2009 and 14.5 percent greater than the previous quarter. Our earnings were driven by record total net revenue and lower credit costs. On-going investments and business line growth initiatives, as well as recent acquisitions, contributed to the increase in net revenue. Growth in earning assets and deposits, coupled with an expanded net interest margin, led to a 14.5 percent increase in net interest income year-over-year, while strong results from our payments businesses and corporate banking group benefited total noninterest income.

     “Credit quality showed marked improvement in the second quarter, as net charge-offs and nonperforming assets declined from the levels recorded in the first quarter of 2010. Additionally, although the Company recorded $25 million of provision in excess of net charge-offs in the second quarter, it was significantly lower than the $175 million and $466 million of excess provision recorded in the first quarter of 2010 and second quarter of 2009, respectively. With these positive changes in our credit metrics, as well as other indications of ongoing improvement in the portfolio, we believe the Company has reached the inflection point in credit quality and we expect net charge-offs and nonperforming assets to be lower in the third quarter than the current quarter.

     “The Company’s capital position remains strong. Capital generated from earnings resulted in a Tier 1 capital ratio of 10.1 percent and a Tier 1 common ratio of 7.4 percent at June 30th, both above the ratios posted at the end of the first quarter of 9.9 percent and 7.1 percent, respectively. On June 15, 2010, the Company declared a quarterly dividend of $.05 per common share, equal to the dividend declared for the last five quarters. Raising the dividend continues to be a priority for our board of directors and senior management. As we have said before, we are confident that our results can support a higher dividend, but we continue to wait for further evidence of a sustainable economic recovery and guidance from our regulators regarding the capital levels that our Company and our industry must maintain going forward.

     “The recent passing of regulatory reform legislation brings about a number of changes that will, we believe, increase accountability and transparency within the financial services industry. We continue to fully support effective industry regulation and consumer protection that create a stronger, safer financial system. As we have communicated in the past, however, a number of provisions within this legislation will impact

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 5

     our Company by either lowering revenue, increasing expense and/or raising capital requirements. All are manageable given our momentum, size, risk profile and diversified business mix. Regulatory reform will not be without its challenges and a certain degree of uncertainty for all of us in the financial services industry, but we will continue to work closely with our regulators, government representatives and other industry participants to ensure that our Company and our industry continue to play a central role in the economic recovery and long term growth of the economy.

     “Our Company’s results this quarter demonstrated the underlying strength of our franchise and provided further evidence that our growth initiatives and investments are taking hold. In May, we successfully converted the 150 branches acquired last October from FBOP Corporation in an FDIC-assisted deal, an acquisition that significantly expanded our presence in California and in the Chicago market. All bank and major card portfolio acquisition-related systems integration activity is now behind us, enabling us to turn our full attention to capitalizing on our expanded distribution and growth initiatives, while keeping our capacity to integrate future deals fully intact. Over the past many months, a time of both economic uncertainty and industry change, we have maintained our strong defense, while establishing our new offense. We have continued to invest, grow and remain focused on the future. I want to take this opportunity to thank all of our employees for their support, hard work and dedication, as we are now well on our way to exceeding our goals for this year.”

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 6

INCOME STATEMENT HIGHLIGHTS Table 2

								Percent			Percent
								Change			Change
(Taxable-equivalent basis, $ in millions,	2Q		1Q		2Q			2Q10 vs			2Q10 vs			YTD		YTD			Percent
except per-share data)	2010		2010		2009			1Q10			2Q09			2010		2009			Change
Net interest income	$	2,409	$	2,403	$	2,104			.2			14.5		$	4,812	$	4,199			14.6
Noninterest income		2,110		1,918		2,055			10.0			2.7			4,028		3,843			4.8
Total net revenue		4,519		4,321		4,159			4.6			8.7			8,840		8,042			9.9
Noninterest expense		2,377		2,136		2,129			11.3			11.6			4,513		4,000			12.8
Income before provision and taxes		2,142		2,185		2,030			(2.0	)		5.5			4,327		4,042			7.1
Provision for credit losses		1,139		1,310		1,395			(13.1	)		(18.4	)		2,449		2,713			(9.7	)
Income before taxes		1,003		875		635			14.6			58.0			1,878		1,329			41.3
Taxable-equivalent adjustment		52		51		50			2.0			4.0			103		98			5.1
Applicable income taxes		199		161		100			23.6			99.0			360		201			79.1
Net income		752		663		485			13.4			55.1			1,415		1,030			37.4
Net (income) loss attributable to noncontrolling interests		14		6		(14	)	nm			nm				20		(30	)	nm
Net income attributable to U.S. Bancorp	$	766	$	669	$	471			14.5			62.6		$	1,435	$	1,000			43.5
Net income applicable to U.S. Bancorp
common shareholders	$	862	$	648	$	221			33.0		nm			$	1,510	$	640		nm
Diluted earnings per common share	$	.45	$	.34	$	.12			32.4		nm			$	.79	$	.36		nm

     Net income attributable to U.S. Bancorp for the second quarter of 2010 was $295 million (62.6 percent) higher than the same period of 2009 and $97 million (14.5 percent) higher than the first quarter of 2010. The increase in net income year-over-year was principally the result of strong growth in total net revenue, driven by an increase in both net interest income and fee-based revenue, and lower provision for credit losses, partially offset by an increase in total noninterest expense. Compared with the prior quarter, favorable variances in total net revenue and the provision for credit losses were partially offset by an increase in total noninterest expense.

     Total net revenue on a taxable-equivalent basis for the second quarter of 2010 was $4,519 million; $360 million (8.7 percent) higher than the second quarter of 2009, reflecting a 14.5 percent increase in net interest income and a 2.7 percent increase in noninterest income. The increase in net interest income year-over-year was largely the result of continued growth in lower cost core deposit funding and an increase in average earning assets, primarily related to acquisitions. Noninterest income increased year-over-year as a result of higher payments-related and commercial products revenue and other income. Total net revenue on a taxable-equivalent basis was $198 million (4.6 percent) higher on a linked quarter basis, primarily due to a

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 7

10.0 percent increase in noninterest income, driven by higher payments-related revenue, commercial products revenue, mortgage banking revenue and other income.

     Total noninterest expense in the second quarter of 2010 was $2,377 million; $248 million (11.6 percent) higher than the second quarter of 2009, and $241 million (11.3 percent) higher than the first quarter of 2010. The increase in total noninterest expense year-over-year was primarily due to the impact of acquisitions, compensation and employee benefits expense and costs related to investments in affordable housing and other tax-advantaged projects. The increase in total noninterest expense compared with the first quarter of 2010 was primarily due to an increase in total compensation expense and costs related to affordable housing and other tax-advantaged projects and seasonally lower professional services and marketing and business development expenses in the prior quarter. In addition, other noninterest expense on a linked quarter basis was higher due to acquisition integration expense, debt extinguishment costs and expenses related to insurance and litigation matters.

     The Company’s provision for credit losses declined from a year ago and on a linked quarter basis. The provision for credit losses for the second quarter of 2010 was $1,139 million, $171 million lower than the first quarter of 2010 and $256 million lower than the second quarter of 2009. The provision for credit losses exceeded net charge-offs by $25 million in the second quarter of 2010, $175 million in the first quarter of 2010, and $466 million in the second quarter of 2009. Net charge-offs in the second quarter of 2010 were $1,114 million, lower than the $1,135 million in the first quarter of 2010, but higher than the $929 million in the second quarter of 2009. Given current economic conditions, the Company expects the level of net charge-offs to continue to trend lower in the third quarter of 2010.

     Nonperforming assets include assets originated by the Company, as well as loans and other real estate acquired under FDIC loss sharing agreements (“covered assets”) that substantially reduce the risk of credit losses to the Company. Excluding covered assets, nonperforming assets were $3,734 million at June 30, 2010, $3,995 million at March 31, 2010, and $3,334 million at June 30, 2009. The decline on a linked quarter basis was principally in the construction and land development portfolios, as the Company continued to resolve and reduce exposure to these problem assets. The year-over-year increase was driven by stress in the residential mortgage portfolio, as well as an increase in foreclosed properties and the impact of the economic slowdown on commercial and consumer customers. Covered nonperforming assets were $2,151 million at June 30, 2010, $2,385 million at March 31, 2010, and $682 million at June 30, 2009. The majority of the nonperforming covered assets were considered credit-impaired at acquisition and were recorded at

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 8

their estimated fair value at the date of acquisition. The year-over-year increase in covered nonperforming assets was due to the fourth quarter of 2009 acquisition of the banking operations of First Bank of Oak Park Corporation (“FBOP”). The ratio of the allowance for credit losses to period-end loans, excluding covered loans, was 3.18 percent at June 30, 2010, compared with 3.20 percent at March 31, 2010, and 2.66 percent at June 30, 2009. The ratio of the allowance for credit losses to period-end loans, including covered loans, was 2.89 percent at June 30, 2010, compared with 2.85 percent at March 31, 2010, and 2.51 percent at June 30, 2009. The Company expects total nonperforming assets, excluding covered assets, to continue to trend lower in the third quarter.

NET INTEREST INCOME Table 3

										Change			Change
(Taxable-equivalent basis; $ in	2Q			1Q			2Q			2Q10 vs			2Q10 vs			YTD			YTD
millions)	2010			2010			2009			1Q10			2Q09			2010			2009			Change
Components of net interest income
Income on earning assets	$	3,049		$	3,046		$	2,893		$	3		$	156		$	6,095		$	5,813		$	282
Expense on interest-bearing liabilities		640			643			789			(3	)		(149	)		1,283			1,614			(331	)
Net interest income	$	2,409		$	2,403		$	2,104		$	6		$	305		$	4,812		$	4,199		$	613
Average yields and rates paid
Earning assets yield		4.94	%		4.94	%		4.95	%		—	%		(.01	)%		4.94	%		4.98	%		(.04	)%
Rate paid on interest-bearing liabilities		1.25			1.24			1.65			.01			(.40	)		1.24			1.68			(.44	)
Gross interest margin		3.69	%		3.70	%		3.30	%		(.01	)%		.39	%		3.70	%		3.30	%		.40	%
Net interest margin		3.90	%		3.90	%		3.60	%		—	%		.30	%		3.90	%		3.59	%		.31	%
Average balances
Investment securities	$	47,140		$	46,211		$	42,189		$	929		$	4,951		$	46,678		$	42,255		$	4,423
Loans		191,161			192,878			183,878			(1,717	)		7,283			192,015			184,786			7,229
Earning assets		247,446			248,828			234,265			(1,382	)		13,181			248,133			234,786			13,347
Interest-bearing liabilities		205,929			209,538			192,238			(3,609	)		13,691			207,724			193,367			14,357
Net free funds (a)		41,517			39,290			42,027			2,227			(510	)		40,409			41,419			(1,010	)

(a) Represents noninterest-bearing deposits, other noninterest-bearing liabilities and equity, allowance for loan losses and unrealized gain (loss) on available-for-sale securities less non-earning assets.

Net Interest Income

     Net interest income on a taxable-equivalent basis in the second quarter of 2010 was $2,409 million, compared with $2,104 million in the seconds quarter of 2009, an increase of $305 million (14.5 percent). The increase was the result of growth in average earning assets and an expanded net interest margin. Average earning assets were higher by $13.2 billion (5.6 percent) than the second quarter of 2009, driven by an

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 9

increase of $7.3 billion (4.0 percent) in average loans and $5.0 billion (11.7 percent) in average investment securities, while the net interest margin was higher principally due to the impact of favorable funding rates and improved credit spreads. Net interest income was relatively stable on a linked quarter basis, as a decrease in average earning assets was offset by favorable funding costs and day basis. During the second quarter of 2010, the net interest margin was 3.90 percent compared with 3.60 percent in the second quarter of 2009 and 3.90 percent in the first quarter of 2010.

AVERAGE LOANS																	Table 4
							Percent			Percent
							Change			Change
	2Q		1Q		2Q		2Q10 vs			2Q10 vs			YTD		YTD		Percent
($ in millions)	2010		2010		2009		1Q10			2Q09			2010		2009		Change
Commercial	$	40,095	$	40,837	$	47,362		(1.8	)		(15.3	)	$	40,461	$	48,357		(16.3	)
Lease financing		6,245		6,445		6,697		(3.1	)		(6.7	)		6,344		6,734		(5.8	)
Total commercial		46,340		47,282		54,059		(2.0	)		(14.3	)		46,805		55,091		(15.0	)
Commercial mortgages		25,606		25,444		23,875		.6			7.3			25,526		23,714		7.6
Construction and development		8,558		8,707		9,852		(1.7	)		(13.1	)		8,627		9,849		(12.4	)
Total commercial real estate		34,164		34,151		33,727		—			1.3			34,153		33,563		1.8
Residential mortgages		26,821		26,408		23,964		1.6			11.9			26,616		23,940		11.2
Credit card		16,329		16,368		14,329		(.2	)		14.0			16,348		13,965		17.1
Retail leasing		4,364		4,509		5,031		(3.2	)		(13.3	)		4,437		5,073		(12.5	)
Home equity and second mortgages		19,332		19,402		19,314		(.4	)		.1			19,367		19,263		.5
Other retail		23,357		23,343		22,753		.1			2.7			23,350		22,869		2.1
Total retail		63,382		63,622		61,427		(.4	)		3.2			63,502		61,170		3.8
Total loans, excluding covered loans		170,707		171,463		173,177		(.4	)		(1.4	)		171,076		173,764		(1.5	)
Covered loans		20,454		21,415		10,701		(4.5	)		91.1			20,939		11,022		90.0
Total loans	$	191,161	$	192,878	$	183,878		(.9	)		4.0		$	192,015	$	184,786		3.9

     Total average loans were $7.3 billion (4.0 percent) higher in the second quarter of 2010 than the second quarter of 2009, driven by the FBOP acquisition and growth in residential mortgages (11.9 percent) and retail loans (3.2 percent). These increases were partially offset by a $7.7 billion decline in total average commercial loans, principally due to lower utilization of existing commitments and reduced demand for new loans. Year-over-year retail loan growth was driven by an increase in credit cards. Included in the growth in credit cards were portfolio purchases of $1.3 billion in the third quarter of 2009 and $.5 billion in May 2010. Total average loans were $1.7 billion (.9 percent) lower in the second quarter of 2010 than the first quarter of 2010, as an increase in residential mortgages (1.6 percent) was offset by a decline in covered loans (4.5

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 10

percent) and total commercial loans (2.0 percent), primarily due to lower commitment utilization by corporate customers and reduced demand for new loans from credit-worthy borrowers.

     Average investment securities in the second quarter of 2010 were $5.0 billion (11.7 percent) higher year-over-year and $929 million (2.0 percent) higher than the first quarter of 2010. The increases over the prior year and linked quarter were primarily due to purchases of U.S. government agency-backed securities.

AVERAGE DEPOSITS																	Table 5
							Percent			Percent
							Change			Change
	2Q		1Q		2Q		2Q10 vs			2Q10 vs			YTD		YTD		Percent
($ in millions)	2010		2010		2009		1Q10			2Q09			2010		2009		Change
Noninterest-bearing deposits	$	39,917	$	38,000	$	37,388		5.0			6.8		$	38,964	$	36,707		6.1
Interest-bearing savings deposits
Interest checking		39,503		39,994		37,393		(1.2	)		5.6			39,747		34,730		14.4
Money market savings		40,256		40,902		27,250		(1.6	)		47.7			40,577		27,586		47.1
Savings accounts		20,035		18,029		12,278		11.1			63.2			19,038		11,314		68.3
Total of savings deposits		99,794		98,925		76,921		.9			29.7			99,362		73,630		34.9
Time certificates of deposit less than $100,000		16,980		18,335		17,968		(7.4	)		(5.5	)		17,654		18,050		(2.2	)
Time deposits greater than $100,000		26,627		27,271		30,943		(2.4	)		(13.9	)		26,947		33,493		(19.5	)
Total interest-bearing deposits		143,401		144,531		125,832		(.8	)		14.0			143,963		125,173		15.0
Total deposits	$	183,318	$	182,531	$	163,220		.4			12.3		$	182,927	$	161,880		13.0

     Average total deposits for the second quarter of 2010 were $20.1 billion (12.3 percent) higher than the second quarter of 2009. Excluding deposits from acquisitions, average total deposits increased $6.7 billion (4.1 percent) over the second quarter of 2009. Noninterest-bearing deposits increased $2.5 billion (6.8 percent) year-over-year, due to growth in corporate trust and institutional trust balances, Consumer and Wholesale Banking business line balances and the impact of acquisitions. Average total savings deposits were $22.9 billion (29.7 percent) higher year-over-year, the result of growth in Consumer Banking, broker- dealer, institutional and corporate trust balances and the impact of acquisitions. Average time certificates of deposit less than $100,000 were $988 million (5.5 percent) lower year-over-year, as a decrease in Consumer Banking balances was partially offset by acquisition-related growth. Average time deposits greater than $100,000 were lower by $4.3 billion (13.9 percent), reflecting a decrease in overall wholesale funding requirements, partially offset by the impact of acquisitions.

     Average total deposits increased $787 million (.4 percent) over the first quarter of 2010, primarily due to growth in average noninterest-bearing deposits and total average savings deposits, which increased $1.9

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 11

billion (5.0 percent) and $869 million (.9 percent), respectively. These positive variances were partially offset by lower time deposits. The growth in average noninterest-bearing deposits was principally due to seasonally higher government-related deposits and higher balances in Consumer Banking, corporate trust and Wholesale Banking. Total average savings deposits increased on a linked quarter basis as the result of increases in Consumer Banking, corporate trust and institutional trust, partially offset by a decline in broker-dealer balances. The reduction in average time certificates of deposit less than $100,000 reflected maturities and fewer renewals given the low interest rate environment, while the decline in average time certificates of deposit greater than $100,000 reflected the decrease in overall wholesale funding requirements.

NONINTEREST INCOME																						Table 6
										Percent			Percent
										Change			Change
	2Q			1Q			2Q			2Q10 vs			2Q10 vs			YTD			YTD			Percent
($ in millions)	2010			2010			2009			1Q10			2Q09			2010			2009			Change
Credit and debit card revenue	$	266		$	258		$	259			3.1			2.7		$	524		$	515			1.7
Corporate payment products revenue		178			168			168			6.0			6.0			346			322			7.5
Merchant processing services		320			292			278			9.6			15.1			612			536			14.2
ATM processing services		108			105			104			2.9			3.8			213			206			3.4
Trust and investment management fees		267			264			304			1.1			(12.2	)		531			598			(11.2	)
Deposit service charges		199			207			250			(3.9	)		(20.4	)		406			476			(14.7	)
Treasury management fees		145			137			142			5.8			2.1			282			279			1.1
Commercial products revenue		205			161			144			27.3			42.4			366			273			34.1
Mortgage banking revenue		243			200			308			21.5			(21.1	)		443			541			(18.1	)
Investment products fees and commissions		30			25			27			20.0			11.1			55			55			—
Securities gains (losses), net		(21	)		(34	)		(19	)		38.2			(10.5	)		(55	)		(217	)		74.7
Other		170			135			90			25.9			88.9			305			259			17.8
	—
Total noninterest income	$	2,110		$	1,918		$	2,055			10.0			2.7		$	4,028		$	3,843			4.8

Noninterest Income

     Second quarter noninterest income was $2,110 million; $55 million (2.7 percent) higher than the second quarter of 2009 and $192 million (10.0 percent) higher than the first quarter of 2010. Year-over-year, noninterest income benefited from payments-related revenues, which were $59 million (8.4 percent) higher, principally due to increased volumes, and a $61 million (42.4 percent) increase in commercial products revenue, attributable to higher standby letters of credit fees, commercial loan fees and syndication revenue. Other income was $80 million (88.9 percent) higher than the second quarter of 2009 due to a $28 million gain related to the Company’s investment in Visa Inc., a favorable variance in income from equity

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 12

investments relative to losses recorded in the prior year, and an improvement in retail lease residual losses. Trust and investment management fees declined $37 million (12.2 percent) year-over-year, as low interest rates negatively impacted money market investment fees and lower money market fund balances led to a decline in account-level fees. Deposit service charges decreased $51 million (20.4 percent) as a result of revised overdraft fee policies and lower overdraft incidences. Mortgage banking revenue declined $65 million (21.1 percent) from the second quarter of 2009 principally driven by lower production revenue, which was partially offset by higher servicing income and a favorable net change in the valuation of mortgage servicing rights (“MSRs”) and related economic hedging activities.

     Noninterest income was $192 million (10.0 percent) higher in the second quarter of 2010 than the first quarter of 2010. A $46 million (6.4 percent) increase in payments-related revenue was driven by seasonally higher transaction volumes. Treasury management fees increased $8 million (5.8 percent), principally due to seasonally higher government-related processing, while commercial products revenue was $44 million (27.3 percent) higher than the first quarter of 2010 as a result of higher syndication fees related to loan and tax-advantaged investment transactions. Mortgage banking revenue increased $43 million (21.5 percent) due to higher mortgage production and a favorable net change in the valuation of MSRs and related economic hedging activities. The $35 million (25.9 percent) increase in other income on a linked quarter basis principally reflected a $28 million gain related to the Company’s investment in Visa Inc. Partially offsetting these variances on a linked quarter basis was a decrease in deposit service charges of $8 million (3.9 percent) largely due to the impact of revised overdraft fee policies, partially offset by seasonally higher volumes.

NONINTEREST EXPENSE																		Table 7
								Percent			Percent
								Change			Change
	2Q		1Q			2Q		2Q10 vs			2Q10 vs			YTD		YTD		Percent
($ in millions)	2010		2010			2009		1Q10			2Q09			2010		2009		Change
Compensation	$	946	$	861		$	764		9.9			23.8		$	1,807	$	1,550		16.6
Employee benefits		172		180			140		(4.4	)		22.9			352		295		19.3
Net occupancy and equipment		226		227			208		(.4	)		8.7			453		419		8.1
Professional services		73		58			59		25.9			23.7			131		111		18.0
Marketing and business development		86		60			80		43.3			7.5			146		136		7.4
Technology and communications		186		185			157		.5			18.5			371		312		18.9
Postage, printing and supplies		75		74			72		1.4			4.2			149		146		2.1
Other intangibles		91		97			95		(6.2	)		(4.2	)		188		186		1.1
Other		522		394			554		32.5			(5.8	)		916		845		8.4
					��
Total noninterest expense	$	2,377	$	2,136		$	2,129		11.3			11.6		$	4,513	$	4,000		12.8

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 13

Noninterest Expense

     Noninterest expense in the second quarter of 2010 totaled $2,377 million, an increase of $248 million (11.6 percent) over the second quarter of 2009, and a $241 million increase (11.3 percent) from the first quarter of 2010. The increase in noninterest expense over a year ago was principally due to the impact of acquisitions and increased compensation expense. Compensation expense increased $182 million (23.8 percent) and employee benefits expense increased $32 million (22.9 percent), primarily reflecting acquisitions, higher incentives related to the Company’s improved financial results, merit increases, pension costs and the five percent cost reduction program that was in effect during the second quarter of 2009. Net occupancy and equipment expense increased $18 million (8.7 percent), principally due to acquisitions and other business initiatives. Professional services expense was $14 million (23.7 percent) higher year-over-year, due to acquisitions, payments-related projects and legal costs. Marketing and business development expense increased $6 million (7.5 percent) over the prior year largely due to cost containment initiatives that were in place in 2009. Technology and communications expense increased $29 million (18.5 percent), as a result of payments-related initiatives, including the formation of a joint venture in 2009. Other expense decreased $32 million (5.8 percent) mainly due to the $123 million FDIC special assessment recorded in the second quarter of 2009, partially offset by increases in costs related to investments in affordable housing and other tax-advantaged projects, higher merchant processing expense and costs for debt extinguishment associated with the income trust securities exchange and other real estate owned.

     Noninterest expense increased $241 million (11.3 percent) in the second quarter of 2010 compared with the first quarter of 2010. Compensation expense increased $85 million (9.9 percent), principally due to higher incentives and commissions, the impact of the March annual merit increases and seasonally higher contract labor expense. Professional services expense was higher by $15 million (25.9 percent) due to seasonally lower expense in the first quarter of 2010. Marketing and business development expense was higher by $26 million (43.3 percent), compared with the first quarter of 2010, reflecting the timing of credit card product initiatives and other marketing campaigns. Other expense increased $128 million (32.5 percent) over the first quarter of 2010, largely due to acquisition integration expense, costs related to affordable housing and other tax-advantaged projects, debt extinguishment costs associated with the income trust securities exchange, and expenses related to insurance and litigation matters.

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 14

Provision for Income Taxes

     The provision for income taxes for the second quarter of 2010 resulted in a tax rate on a taxable-equivalent basis of 25.0 percent (effective tax rate of 20.9 percent), compared with 23.6 percent (effective tax rate of 17.1 percent) in the second quarter of 2009 and 24.2 percent (effective tax rate of 19.5 percent) in the first quarter of 2010. The increases in effective tax rate principally reflect the marginal impact of higher pretax earnings.

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 15

ALLOWANCE FOR CREDIT LOSSES Table 8

	2Q		1Q		4Q		3Q		2Q
($ in millions)	2010		2010		2009		2009		2009
Balance, beginning of period	$	5,439	$	5,264	$	4,986	$	4,571	$	4,105
Net charge-offs
Commercial		223		243		250		200		177
Lease financing		22		34		33		44		55
Total commercial		245		277		283		244		232
Commercial mortgages		71		46		30		30		28
Construction and development		156		146		144		159		93
Total commercial real estate		227		192		174		189		121
Residential mortgages		138		145		153		129		116
Credit card		317		312		285		271		263
Retail leasing		4		5		5		8		10
Home equity and second mortgages		79		90		96		89		83
Other retail		99		111		111		111		102
Total retail		499		518		497		479		458
Total net charge-offs, excluding covered loans		1,109		1,132		1,107		1,041		927
Covered loans		5		3		3		—		2
Total net charge-offs		1,114		1,135		1,110		1,041		929
Provision for credit losses		1,139		1,310		1,388		1,456		1,395
Net change for credit losses to be reimbursed by the FDIC		72		—		—		—		—
Balance, end of period	$	5,536	$	5,439	$	5,264	$	4,986	$	4,571
Components
Allowance for loan losses, excluding losses to be reimbursed by the FDIC	$	5,248	$	5,235	$	5,079	$	4,825	$	4,377
Allowance for credit losses to be reimbursed by the FDIC		72		—		—		—		—
Liability for unfunded credit commitments		216		204		185		161		194
Total allowance for credit losses	$	5,536	$	5,439	$	5,264	$	4,986	$	4,571
Gross charge-offs	$	1,186	$	1,206	$	1,174	$	1,105	$	992
Gross recoveries	$	72	$	71	$	64	$	64	$	63
Allowance for credit losses as a percentage of
Period-end loans, excluding covered loans		3.18		3.20		3.04		2.88		2.66
Nonperforming loans, excluding covered loans		168		156		153		150		152
Nonperforming assets, excluding covered assets		146		136		135		134		137
Period-end loans		2.89		2.85		2.70		2.73		2.51
Nonperforming loans		120		109		110		136		135
Nonperforming assets		94		85		89		114		114

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 16

Credit Quality

     Net charge-offs and nonperforming assets declined on a linked quarter basis as economic conditions moderated. The allowance for credit losses was $5,536 million at June 30, 2010, compared with $5,439 million at March 31, 2010, and $4,571 million at June 30, 2009. Total net charge-offs in the second quarter of 2010 were $1,114 million, compared with $1,135 million in the first quarter of 2010, and $929 million in the second quarter of 2009. The increase in total net charge-offs compared with a year ago was driven by economic factors affecting the residential housing markets, including homebuilding and related industries, commercial real estate properties and credit costs associated with credit card and other consumer and commercial loans as the economy weakened. The Company recorded $25 million of provision for credit losses in excess of net charge-offs during the second quarter of 2010, increasing the allowance for credit losses. In addition, the Company increased the allowance for credit losses by $72 million to reflect covered loan losses reimbursable by the FDIC.

     Commercial and commercial real estate loan net charge-offs increased to $472 million in the second quarter of 2010 (2.35 percent of average loans outstanding) compared with $469 million (2.34 percent of average loans outstanding) in the first quarter of 2010 and $353 million (1.61 percent of average loans outstanding) in the second quarter of 2009. The increases reflected stress in commercial real estate and residential housing, especially homebuilding and related industry sectors, along with the impact of current economic conditions on the Company’s commercial loan portfolios.

     Residential mortgage loan net charge-offs decreased to $138 million (2.06 percent of average loans outstanding) in the second quarter of 2010 from $145 million (2.23 percent of average loans outstanding) in the first quarter of 2010, reflecting the positive impact of restructuring programs, but were higher than the $116 million (1.94 percent of average loans outstanding) in the second quarter of 2009. Total retail loan net charge-offs were $499 million (3.16 percent of average loans outstanding) in the second quarter of 2010 compared with $518 million (3.30 percent of average loans outstanding) in the first quarter of 2010 and $458 million (2.99 percent of average loans outstanding) in the second quarter of 2009. The level of retail loan net-charge-offs was impacted by credit card portfolio purchases recorded at fair value in the beginning in the third quarter of 2009. The increased year-over-year residential mortgage and retail loan credit losses reflected the adverse impact of current economic conditions on consumers, as rising unemployment levels increased losses in prime-based portfolios.

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 17

     The ratio of the allowance for credit losses to period-end loans was 2.89 percent (3.18 percent excluding covered loans) at June 30, 2010, compared with 2.85 percent (3.20 percent excluding covered loans) at March 31, 2010, and 2.51 percent (2.66 percent excluding covered loans) at June 30, 2009. The ratio of the allowance for credit losses to nonperforming loans was 120 percent (168 percent excluding covered loans) at June 30, 2010, compared with 109 percent (156 percent excluding covered loans) at March 31, 2010, and 135 percent (152 percent excluding covered loans) at June 30, 2009.

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 18

CREDIT RATIOS Table 9

	2Q		1Q		4Q		3Q		2Q
(Percent)	2010		2010		2009		2009		2009
Net charge-offs ratios (a)
Commercial		2.23		2.41		2.28		1.78		1.50
Lease financing		1.41		2.14		2.02		2.66		3.29
Total commercial		2.12		2.38		2.25		1.89		1.72
Commercial mortgages		1.11		.73		.48		.49		.47
Construction and development		7.31		6.80		6.24		6.62		3.79
Total commercial real estate		2.67		2.28		2.03		2.22		1.44
Residential mortgages		2.06		2.23		2.37		2.10		1.94
Credit card (b)		7.79		7.73		6.89		6.99		7.36
Retail leasing		.37		.45		.43		.66		.80
Home equity and second mortgages		1.64		1.88		1.96		1.82		1.72
Other retail		1.70		1.93		1.91		1.94		1.80
Total retail		3.16		3.30		3.11		3.05		2.99
Total net charge-offs, excluding covered loans		2.61		2.68		2.54		2.41		2.15
Covered loans		.10		.06		.06		—		.07
Total net charge-offs		2.34		2.39		2.30		2.27		2.03
Delinquent loan ratios - 90 days or more past dueexcludingnonperforming loans (c)
Commercial		.21		.18		.22		.17		.16
Commercial real estate		.09		.01		.02		.12		.22
Residential mortgages		1.85		2.26		2.80		2.32		2.11
Retail		.95		1.00		1.07		1.00		.94
Total loans, excluding covered loans		.72		.78		.88		.78		.72
Covered loans		4.91		3.90		3.59		8.18		7.83
Total loans		1.16		1.12		1.19		1.16		1.12
Delinquent loan ratios - 90 days or more past dueincludingnonperforming loans (c)
Commercial		1.89		2.06		2.25		2.19		1.89
Commercial real estate		4.84		5.37		5.22		5.22		5.05
Residential mortgages		4.08		4.33		4.59		3.86		3.46
Retail		1.32		1.37		1.39		1.28		1.19
Total loans, excluding covered loans		2.61		2.82		2.87		2.69		2.48
Covered loans		11.72		11.19		9.76		11.97		11.45
Total loans		3.56		3.74		3.64		3.18		2.98

(a)	Annualized and calculated on average loan balances
(b)	Net charge-offs as a percent of average loans outstanding, excluding portfolio purchases where the acquired loans
	were recorded at fair value at the purchase date were 8.53 percent for the second quarter of 2010, 8.42 percent for
	the first quarter of 2010, 7.46 percent for the fourth quarter of 2009 and 7.30 percent for the third quarter of 2009.
(c)	Ratios are expressed as a percent of ending loan balances.

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 19

ASSET QUALITY Table 10

	Jun 30		Mar 31		Dec 31		Sep 30		Jun 30
($ in millions)	2010		2010		2009		2009		2009
Nonperforming loans
Commercial	$	669	$	758	$	866	$	908	$	785
Lease financing		115		113		125		119		123
Total commercial		784		871		991		1,027		908
Commercial mortgages		601		596		581		502		471
Construction and development		1,013		1,236		1,192		1,230		1,156
Total commercial real estate		1,614		1,832		1,773		1,732		1,627
Residential mortgages		607		550		467		383		324
Retail		237		229		204		174		155
Total nonperforming loans, excluding covered loans		3,242		3,482		3,435		3,316		3,014
Covered loans		1,360		1,524		1,350		362		368
Total nonperforming loans		4,602		5,006		4,785		3,678		3,382
Other real estate (a)		469		482		437		366		293
Covered other real estate (a)		791		861		653		310		314
Other nonperforming assets		23		31		32		38		27
Total nonperforming assets (b)	$	5,885	$	6,380	$	5,907	$	4,392	$	4,016
Total nonperforming assets, excluding covered assets	$	3,734	$	3,995	$	3,904	$	3,720	$	3,334
Accruing loans 90 days or more past due, excluding covered loans	$	1,239	$	1,321	$	1,525	$	1,344	$	1,245
Accruing loans 90 days or more past due	$	2,221	$	2,138	$	2,309	$	2,125	$	2,042
Restructured loans that continue to accrue interest (c)	$	2,112	$	2,008	$	1,794	$	1,800	$	1,725
Nonperforming assets to loans plus ORE, excluding covered assets (%)		2.17		2.34		2.25		2.14		1.94
Nonperforming assets to loans plus ORE (%)		3.05		3.31		3.02		2.39		2.20

(a)	Includes equity investments whose only asset is other real estate owned
(b)	Does not include accruing loans 90 days or more past due or restructured loans that continue to accrue interest
(c)	Excludes temporary concessionary modifications under hardship programs

     Nonperforming assets at June 30, 2010, totaled $5,885 million, compared with $6,380 million at March 31, 2010, and $4,016 million at June 30, 2009. Included in June 30, 2010, nonperforming assets were $2,151 million of assets covered under loss sharing agreements with the FDIC that substantially reduce the risk of credit losses to the Company. The ratio of nonperforming assets to loans and other real estate was 3.05 percent (2.17 percent excluding covered assets) at June 30, 2010, compared with 3.31 percent (2.34 percent excluding covered assets) at March 31, 2010, and 2.20 percent (1.94 percent excluding covered assets) at June 30, 2009. The increase in nonperforming assets, excluding covered assets, compared with a year ago was driven primarily by the residential construction portfolio and related industries and the residential

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 20

mortgage portfolio, as well as an increase in foreclosed residential properties and the impact of the economic slowdown on other commercial and consumer customers. Given current economic conditions, the Company expects nonperforming assets, excluding covered assets, to trend lower in the next quarter.

     Accruing loans 90 days or more past due were $2,221 million ($1,239 million excluding covered loans) at June 30, 2010, compared with $2,138 million ($1,321 million excluding covered loans) at March 31, 2010, and $2,042 million ($1,245 million excluding covered loans) at June 30, 2009. Restructured loans that continue to accrue interest have increased, compared with the second quarter of 2009 and the first quarter of 2010, reflecting the impact of loan modifications for certain residential mortgage and consumer credit card customers in light of current economic conditions. The Company continues to work with customers to modify loans for borrowers who are having financial difficulties, but expects increases in restructured loans to continue to moderate.

CAPITAL POSITION Table 11

	Jun 30			Mar 31			Dec 31			Sep 30			Jun 30
($ in millions)	2010			2010			2009			2009			2009
Total U.S. Bancorp shareholders’ equity	$	28,169		$	26,709		$	25,963		$	25,171		$	24,171
Tier 1 capital		24,021			23,278			22,610			21,990			21,710
Total risk-based capital		31,890			30,858			30,458			30,126			30,039
Tier 1 capital ratio		10.1	%		9.9	%		9.6	%		9.5	%		9.4	%
Total risk-based capital ratio		13.4			13.2			12.9			13.0			13.0
Leverage ratio		8.8			8.6			8.5			8.6			8.4
Tier 1 common equity ratio		7.4			7.1			6.8			6.8			6.7
Tangible common equity ratio		6.0			5.6			5.3			5.4			5.1
Tangible common equity as a percent of risk-weighted assets		6.9			6.5			6.1			6.0			5.7

     Total U.S. Bancorp shareholders’ equity was $28.2 billion at June 30, 2010, compared with $26.7 billion at March 31, 2010, and $24.2 billion at June 30, 2009. The increase included the issuance, net of related discount, of $430 million of perpetual preferred stock in exchange for certain income trust securities in the second quarter of 2010. The Tier 1 capital ratio was 10.1 percent at June 30, 2010, compared with 9.9 percent at March 31, 2010, and 9.4 percent at June 30, 2009. The Tier 1 common equity ratio was 7.4 percent at June 30, 2010, compared with 7.1 percent at March 31, 2010, and 6.7 percent at June 30, 2009. The tangible common equity ratio was 6.0 percent at June 30, 2010, compared with 5.6 percent at March 31,

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 21

2010, and 5.7 percent at June 30, 2009. All regulatory ratios continue to be in excess of “well-capitalized” requirements.

COMMON SHARES Table 12

	2Q		1Q			4Q		3Q		2Q
(Millions)	2010		2010			2009		2009		2009
Beginning shares outstanding		1,916		1,913			1,912		1,912		1,759
Shares issued for stock option and stock purchase plans, acquisitions and other corporate purposes		1		4			1		—		153
Shares repurchased for stock option plans		—		(1	)		—		—		—
Ending shares outstanding		1,917		1,916			1,913		1,912		1,912

LINE OF BUSINESS FINANCIAL PERFORMANCE (a) Table 13

	Net Income Attributable												Net Income Attributable
	to U.S. Bancorp						Percent Change						to U.S. Bancorp							2Q 2010
($ in millions)	2Q		1Q		2Q		2Q10 vs			2Q10 vs			YTD		YTD		Percent			Earnings
Business Line	2010		2010		2009		1Q10			2Q09			2010		2009		Change			Composition
Wholesale Banking	$	82	$	2	$	68	nm				20.6		$	84	$	57		47.4			11	%
Consumer Banking		178		196		211		(9.2	)		(15.6	)		374		427		(12.4	)		23
Wealth Management & Securities Services		60		53		85		13.2			(29.4	)		113		182		(37.9	)		8
Payment Services		180		119		54		51.3		nm				299		145	nm				23
Treasury and Corporate Support		266		299		53		(11.0	)	nm				565		189	nm				35
Consolidated Company	$	766	$	669	$	471		14.5			62.6		$	1,435	$	1,000		43.5			100	%

(a) preliminary data

Lines of Business

     The Company’s major lines of business are Wholesale Banking, Consumer Banking, Wealth Management & Securities Services, Payment Services, and Treasury and Corporate Support. These operating segments are components of the Company about which financial information is prepared and is evaluated regularly by management in deciding how to allocate resources and assess performance. Noninterest expenses incurred by centrally managed operations or business lines that directly support another business line’s operations are charged to the applicable business line based on its utilization of those services primarily measured by the volume of customer activities, number of employees or other relevant

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 22

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 2010, certain organization and methodology changes were made and, accordingly, prior period results were restated and presented on a comparable basis.

     Wholesale Bankingoffers lending, equipment finance and small-ticket leasing, depository, treasury management, capital markets, foreign exchange, international trade services and other financial services to middle market, large corporate, commercial real estate, financial institution and public sector clients. Wholesale Banking contributed $82 million of the Company’s net income in the second quarter of 2010, compared with $68 million in the second quarter of 2009 and $2 million in the first quarter of 2010. Wholesale Banking’s net income increased by $14 million (20.6 percent) over the same quarter of 2009, due to higher total net revenue, partially offset by higher total noninterest expense. Net interest income increased $5 million (1.0 percent) year-over-year due to improved spreads on loans, higher average deposit balances and an increase in loan fees, partially offset by a decrease in average total loans, a result of lower utilization of existing commitments and reduced demand for new loans and the impact of declining rates on the margin benefit from deposits. Total noninterest income increased $45 million (18.4 percent) due to strong growth in commercial products revenue including, standby letters of credit, commercial loan and capital markets fees and higher equity investment income. Total noninterest expense increased $38 million (13.4 percent) over a year ago, primarily due to higher compensation and employee benefits expense and increased costs related to other real estate owned. The provision for credit losses was $9 million (2.6 percent) lower year-over-year due to a decrease in the reserve allocation, partially offset by higher net charge-offs.

     Wholesale Banking’s contribution to net income in the second quarter of 2010 was $80 million higher than the first quarter of 2010. This improvement was due to a reduction in the provision for credit losses and higher total net revenue, partially offset by an increase in total noninterest expense. Total net revenue was higher due to favorable variances in both net interest income and total noninterest income. Net interest income was $21 million (4.4 percent) higher on a linked quarter basis as improved spreads on loans and an increase in loan fees were partially offset by a reduction in loan demand. The $16 million (5.8 percent) increase in total noninterest income was the result of higher commercial products revenue due to syndication and other capital markets-related income, partially offset by lower equity investment income. Total noninterest expense increased by $37 million (13.0 percent) principally due to higher compensation and

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 23

employee benefits expense, higher costs for other real estate owned and seasonally higher processing costs. The provision for credit losses decreased $127 million (27.0 percent) on a linked quarter basis due to lower net charge-offs and a decrease in allocated reserves.

     Consumer Bankingdelivers products and services through banking offices, telephone servicing and sales, on-line services, direct mail and ATM processing. It encompasses community banking, metropolitan banking, in-store banking, small business banking, consumer lending, mortgage banking, consumer finance, workplace banking, student banking and 24-hour banking. Consumer Banking contributed $178 million of the Company’s net income in the second quarter of 2010, a $33 million (15.6 percent) decrease from the second quarter of 2009, and an $18 million (9.2 percent) decrease from the prior quarter. Within Consumer Banking, the retail banking division accounted for $42 million of the total contribution, 17.6 percent below the same quarter of last year, and 55.8 percent lower than the previous quarter. The decline in the retail banking division’s contribution from the same period of 2009 was due to lower total net revenue and higher total noninterest expense, partially offset by a favorable change in the provision for credit losses. Retail banking’s net interest income increased 2.0 percent over the second quarter of 2009 due to improved spreads on loans and higher deposit volume and loans fees, partially offset by the impact of lower rates on the margin benefit of deposits. Total noninterest income for the retail banking division decreased 7.0 percent from a year ago due to lower deposit service charges principally due to the impact of revised overdraft fee policies and lower overdraft incidences, partially offset by improvement in retail lease residual valuation losses, higher ATM processing services fees and increased income from equity investments. Total noninterest expense for the retail banking division in the second quarter of 2010 was 9.5 percent higher year-over-year, principally due to higher compensation and employee benefits expense, higher processing costs and net occupancy and equipment expenses related to business expansion. The provision for credit losses for the retail banking division was lower than the same quarter of last year, as stress within the residential mortgages, home equity, and other installment and consumer loan portfolios moderated. In the second quarter of 2010, the mortgage banking division’s contribution was $136 million, a 15.0 decrease from the second quarter of 2009. The division’s total net revenue decreased 10.6 percent from a year ago, reflecting lower mortgage loan production, including lower interest income on average mortgage loans held for sale. Total noninterest expense for the mortgage banking division increased 5.8 percent over the second quarter of 2009, primarily due to higher servicing costs associated with other real estate owned and foreclosures. The provision for credit losses decreased 29.4 percent year-over-year for the mortgage banking division.

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 24

     Consumer Banking’s contribution in the second quarter of 2010 was lower by $18 million (9.2 percent) than the first quarter of 2010 due to higher total noninterest expense and provision for credit losses, partially offset by an increase in total net revenue. Within Consumer Banking, the retail banking division’s contribution decreased 55.8 percent on a linked quarter basis due to unfavorable variances in total noninterest expense and the provision for credit losses. Total net revenue for the retail banking division increased 1.5 percent, principally due to improved spreads on loans and higher deposit volume. Total noninterest expense for the retail banking division increased 6.2 percent on a linked quarter basis, the result of higher compensation and employee benefits expense, fraud losses and shared services expense. The provision for credit losses for the division increased 15.3 percent due to higher reserve allocation compared with the first quarter of 2010. The contribution of the mortgage banking division increased 34.7 percent over the first quarter of 2010 driven by higher total net revenue. Total net revenue increased 18.1 percent due to a 9.6 percent increase in net interest income and higher mortgage banking revenue due to higher mortgage production and a favorable net change in the valuation of MSRs and related economic hedging activities. Total noninterest expense increased 3.2 percent due to higher commission and incentive expense and costs for other real estate and foreclosures. The mortgage banking division’s provision for credit losses decreased 5.3 percent on a linked quarter basis.

     Wealth Management & Securities Servicesprovides trust, private banking, financial advisory, investment management, retail brokerage services, insurance, custody and mutual fund servicing through five businesses: Wealth Management, Corporate Trust, FAF Advisors, Institutional Trust & Custody and Fund Services. Wealth Management & Securities Services contributed $60 million of the Company’s net income in the second quarter of 2010, a 29.4 percent decrease from the second quarter of 2009 and a 13.2 percent increase over the first quarter of 2010. Total net revenue year-over-year decreased by $10 million (2.7 percent). Net interest income was higher by $11 million (15.5 percent), primarily due to higher average deposit balances, partially offset by a decline in the related margin benefit. Total noninterest income declined $21 million (6.9 percent) as low interest rates negatively impacted money market investment fees and lower money market fund balances led to a decline in account-level fees. Total noninterest expense increased by $33 million (14.0 percent), due to higher compensation and employee benefits expense. The provision for credit losses decreased by $4 million (66.7 percent).

     The increase in the business line’s contribution in the second quarter of 2010 compared with the prior quarter was the result of higher total net revenue (7.0 percent), partially offset by an unfavorable variance in

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 25

total noninterest expense (5.9 percent). Net interest income increased by $14 million (20.6 percent) due to growth in average deposit balances and the related margin benefit. Total noninterest income was higher (3.7 percent) due to favorable variances in trust and investment management fees and investment products fees and commissions. The increase in total noninterest expense was primarily due to higher compensation and employee benefits expense.

     Payment Servicesincludes consumer and business credit cards, stored-value cards, debit cards, corporate and purchasing card services, consumer lines of credit and merchant processing. Payment Services contributed $180 million of the Company’s net income in the second quarter of 2010, an increase of $126 million over the same period of 2009, and a $61 million increase over the prior quarter. The increase year-over-year was primarily due to higher total net revenue and a lower provision for credit losses. Total net revenue increased $121 million (12.1 percent) year-over-year. Net interest income increased $56 million (20.3 percent) due to strong growth in credit card balances and improved loan spreads, partially offset by the cost of rebates on the government card program. Total noninterest income increased $65 million (9.0 percent) year-over-year, primarily due to increased volumes across all products. Total noninterest expense increased $66 million (16.6 percent), driven by higher compensation and employee benefits expense, technology and communications expense, which was the result of increased volume and the formation of a joint venture, and higher other intangibles expense. The provision for credit losses decreased $150 million (29.5 percent) due to a favorable change in the reserve allocation due to improved loss rates, partially offset by reserve build related to credit card portfolio purchases.

     Payment Services’ contribution in the second quarter of 2010 was $61 million (51.3 percent) higher than the first quarter of 2010 and was driven by a lower provision for credit losses and higher total net revenue, partially offset by an unfavorable variance in total noninterest expense. Total net revenue increased $34 million (3.1 percent) over the first quarter of 2010. Total noninterest income was $47 million (6.3 percent) higher on a linked quarter basis, principally due to increased volumes. This favorable variance was partially offset by a $13 million (3.8 percent) reduction in net interest income, primarily due to declining loan spreads. The timing of credit card-related marketing programs and professional services projects, along with higher compensation and employee benefits expense were the principal drivers of the $32 million (7.4 percent) linked quarter increase in total noninterest expense. The provision for credit losses decreased $97 million (21.3 percent) due to a relatively more stable outlook on the credit card portfolios, partially offset by reserve build related to credit card portfolio purchases.

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 26

     Treasury and Corporate Supportincludes the Company’s investment portfolios, funding, recently acquired assets and assumed liabilities prior to assignment to business lines, capital management, asset securitization, interest rate risk management, the net effect of transfer pricing related to average balances 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 $266 million in the second quarter of 2010, compared with net income of $53 million in the second quarter of 2009 and net income of $299 million in the first quarter of 2010. Net interest income increased $199 million (75.1 percent) over the second quarter of 2009, reflecting the impact of the FBOP acquisition, the current rate environment, wholesale funding decisions and the Company’s asset/liability position. Total noninterest income increased $60 million, year-over-year, primarily due to the $28 million gain related to the Company’s investment in Visa Inc. and higher syndication revenue on tax-advantaged transactions. Total noninterest expense increased $27 million (9.7 percent) reflecting the impact of the FBOP acquisition, debt extinguishment costs, and costs related to affordable housing and other tax-advantaged projects, partially offset by the FDIC special assessment recorded in the second quarter of 2009.

     Net income in the second quarter of 2010 was lower on a linked quarter basis due to an increase in total noninterest expense, partially offset by an increase in total net revenue. Total net revenue was higher by $25 million (5.0 percent) as total noninterest income improved by $80 million, due to the $28 million gain related to the Company’s investment in Visa Inc., higher syndication revenue on tax-advantaged transactions, higher income from equity investments and lower net securities losses. The increase in total noninterest expense over the first quarter of 2010 was due to higher costs related to affordable housing and other tax-advantaged projects, higher acquisition integration expense, debt extinguishment costs and expenses related to insurance and litigation matters.

Additional schedules containing more detailed information about the Company’s business line results are available on the web at usbank.com or by calling Investor Relations at 612-303-0781.

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 27

On Wednesday, July 21, 2010, at 7:30 a.m. (CDT) Richard K. Davis, chairman, president and chief executive officer, and Andrew Cecere, vice chairman and chief financial officer, will host a conference call to review the financial results. The conference call will be available by telephone or on the Internet. A presentation will be used during the call and will be available on the Company’s website at www.usbank.com. To access the conference call from locations within the United States and Canada, please dial 866-316-1409. Participants calling from outside the United States and Canada, please dial 706-634-9086. The conference ID number for all participants is 80901177. For those unable to participate during the live call, a recording of the call will be available approximately two hours after the conference call ends on Wednesday, July 21st, and will run through Wednesday, July 28th, at 11:00 p.m. (CDT). To access the recorded message within the United States and Canada, dial 800-642-1687. If calling from outside the United States and Canada, please dial 706-645-9291 to access the recording. The conference ID is 80901177. To access the webcast and presentation go to www.usbank.com and click on “About U.S. Bank”. The “Webcasts & Presentations” link can be found under the Investor/Shareholder information heading, which is at the left side of the bottom of the page.

Minneapolis-based U.S. Bancorp (“USB”), with $283 billion in assets, is the parent company of U.S. Bank National Association, the 5th largest commercial bank in the United States. The Company operates 3,002 banking offices in 24 states and 5,309 ATMs and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. Visit U.S. Bancorp on the web at usbank.com.

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 28

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 made. These forward-looking statements cover, among other things, anticipated future revenue and expenses and the future plans and prospects of U.S. Bancorp. Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated. Global and domestic economies could fail to recover from the recent economic downturn or could experience another severe contraction, which 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 delay or failure of recovery in the residential real estate markets, could cause additional credit losses and deterioration in asset values. In addition, U.S. Bancorp’s business and financial performance could be impacted as the financial industry restructures in the current environment, by increased regulation of financial institutions or other effects of recently enacted legislation, and by changes in the competitive landscape. U.S. Bancorp’s results could also be adversely affected by continued deterioration in general business and economic conditions; changes in interest rates; deterioration in the credit quality of its loan portfolios or in the value of the collateral securing those loans; deterioration in the value of securities held in its investment securities portfolio; legal and regulatory developments; increased competition from both banks and non-banks; changes in customer behavior and preferences; effects of mergers and acquisitions and related integration; effects of critical accounting policies and judgments; and management’s ability to effectively manage credit risk, market risk, operational risk, legal risk, and regulatory and compliance 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, 2009, on file with the Securities and Exchange Commission, including the sections entitled “Risk Factors” and “Corporate Risk Profile” contained in Exhibit 13, and all subsequent filings with the Securities and Exchange Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934. Forward-looking statements speak only as of the date they are made, and U.S. Bancorp undertakes no obligation to update them in light of new information or future events.

Non-Regulatory Capital Ratios

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,

• Tier 1 common equity to risk-weighted assets, and

• Tangible common equity to risk-weighted assets.

(MORE)

U.S. Bancorp Reports Second quarter 2010 Results
July 21, 2010
Page 29

These non-regulatory capital ratios are viewed by management as useful additional methods of reflecting the level of capital available to withstand unexpected market conditions. Additionally, presentation of these ratios allows readers to compare the Company’s capitalization to other financial services companies. These ratios differ from capital ratios defined by banking regulators principally in that the numerator excludes shareholders’ equity associated with preferred securities, the nature and extent of which varies among different financial services companies. These ratios are not defined in generally accepted accounting principals (“GAAP”) or federal banking regulations. As a result, these non-regulatory capital ratios disclosed by the Company may be considered non-GAAP financial measures.

Because there are no standardized definitions for these non-regulatory capital ratios, the Company’s calculation methods may differ from those used by other financial services companies. Also, 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 the non-regulatory capital ratios.

###

(MORE)

U.S. Bancorp

Consolidated Statement of Income

	Three Months Ended						Six Months Ended
(Dollars and Shares in Millions, Except Per Share Data)	June 30,						June 30,
(Unaudited)	2010			2009			2010			2009
Interest Income
Loans	$	2,515		$	2,345		$	5,020		$	4,695
Loans held for sale		47			71			91			134
Investment securities		394			402			804			836
Other interest income		39			22			73			42
Total interest income		2,995			2,840			5,988			5,707
Interest Expense
Deposits		229			314			465			638
Short-term borrowings		137			131			265			274
Long-term debt		272			341			549			694
Total interest expense		638			786			1,279			1,606
Net interest income		2,357			2,054			4,709			4,101
Provision for credit losses		1,139			1,395			2,449			2,713
Net interest income after provision for credit losses		1,218			659			2,260			1,388
Noninterest Income
Credit and debit card revenue		266			259			524			515
Corporate payment products revenue		178			168			346			322
Merchant processing services		320			278			612			536
ATM processing services		108			104			213			206
Trust and investment management fees		267			304			531			598
Deposit service charges		199			250			406			476
Treasury management fees		145			142			282			279
Commercial products revenue		205			144			366			273
Mortgage banking revenue		243			308			443			541
Investment products fees and commissions		30			27			55			55
Securities gains (losses), net		(21	)		(19	)		(55	)		(217	)
Other		170			90			305			259
Total noninterest income		2,110			2,055			4,028			3,843
Noninterest Expense
Compensation		946			764			1,807			1,550
Employee benefits		172			140			352			295
Net occupancy and equipment		226			208			453			419
Professional services		73			59			131			111
Marketing and business development		86			80			146			136
Technology and communications		186			157			371			312
Postage, printing and supplies		75			72			149			146
Other intangibles		91			95			188			186
Other		522			554			916			845
Total noninterest expense		2,377			2,129			4,513			4,000
Income before income taxes		951			585			1,775			1,231
Applicable income taxes		199			100			360			201
Net income		752			485			1,415			1,030
Net (income) loss attributable to noncontrolling interests		14			(14	)		20			(30	)
Net income attributable to U.S. Bancorp	$	766		$	471		$	1,435		$	1,000
Net income applicable to U.S. Bancorp common shareholders	$	862		$	221		$	1,510		$	640
Earnings per common share	$	.45		$	.12		$	.79		$	.36
Diluted earnings per common share	$	.45		$	.12		$	.79		$	.36
Dividends declared per common share	$	.05		$	.05		$	.10		$	.10
Average common shares outstanding		1,912			1,833			1,911			1,794
Average diluted common shares outstanding		1,921			1,840			1,920			1,801

Page 30

U.S. Bancorp

Consolidated Ending Balance Sheet

	June 30,			December 31,			June 30,
(Dollars in Millions)	2010			2009			2009
	(Unaudited)						(Unaudited)
Assets
Cash and due from banks	$	5,033		$	6,206		$	6,381
Investment securities
Held-to-maturity		590			47			49
Available-for-sale		47,777			44,721			40,756
Loans held for sale		4,912			4,772			7,370
Loans
Commercial		46,766			48,792			52,730
Commercial real estate		33,944			34,093			33,696
Residential mortgages		27,252			26,056			23,970
Retail		63,639			63,955			61,427
Total loans, excluding covered loans		171,601			172,896			171,823
Covered loans		19,983			21,859			10,175
Total loans		191,584			194,755			181,998
Less allowance for loan losses		(5,320	)		(5,079	)		(4,377	)
Net loans		186,264			189,676			177,621
Premises and equipment		2,257			2,263			2,073
Goodwill		9,002			9,011			8,451
Other intangible assets		3,068			3,406			2,961
Other assets		24,340			21,074			19,898
Total assets	$	283,243		$	281,176		$	265,560
Liabilities and Shareholders’ Equity
Deposits
Noninterest-bearing	$	41,673		$	38,186		$	35,684
Interest-bearing		113,024			115,135			97,691
Time deposits greater than $100,000		28,426			29,921			30,508
Total deposits		183,123			183,242			163,883
Short-term borrowings		33,797			31,312			29,698
Long-term debt		29,137			32,580			39,196
Other liabilities		8,246			7,381			7,897
Total liabilities		254,303			254,515			240,674
Shareholders’ equity
Preferred stock		1,930			1,500			1,500
Common stock		21			21			21
Capital surplus		8,292			8,319			8,434
Retained earnings		25,367			24,116			23,140
Less treasury stock		(6,381	)		(6,509	)		(6,540	)
Accumulated other comprehensive income (loss)		(1,060	)		(1,484	)		(2,384	)
Total U.S. Bancorp shareholders’ equity		28,169			25,963			24,171
Noncontrolling interests		771			698			715
Total equity		28,940			26,661			24,886
Total liabilities and equity	$	283,243		$	281,176		$	265,560

Page 31

U.S. Bancorp

Non-Regulatory Capital Ratios

	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in Millions, Unaudited)	2010 *			2010			2009			2009			2009
Total equity	$	28,940		$	27,388		$	26,661		$	25,880		$	24,886
Preferred stock		(1,930	)		(1,500	)		(1,500	)		(1,500	)		(1,500	)
Noncontrolling interests		(771	)		(679	)		(698	)		(709	)		(715	)
Goodwill (net of deferred tax liability)		(8,425	)		(8,374	)		(8,482	)		(8,161	)		(8,035	)
Intangible assets, other than mortgage servicing rights		(1,525	)		(1,610	)		(1,657	)		(1,604	)		(1,479	)
Tangible common equity (a)		16,289			15,225			14,324			13,906			13,157
Tier 1 capital, determined in accordance with prescribed regulatory requirements		24,021			23,278			22,610			21,990			21,710
Trust preferred securities		(3,949	)		(4,524	)		(4,524	)		(4,024	)		(4,024	)
Preferred stock		(1,930	)		(1,500	)		(1,500	)		(1,500	)		(1,500	)
Noncontrolling interests, less preferred stock not eligible for Tier 1 capital		(694	)		(692	)		(692	)		(692	)		(692	)
Tier 1 common equity (b)		17,448			16,562			15,894			15,774			15,494
Total assets		283,243			282,428			281,176			265,058			265,560
Goodwill (net of deferred tax liability)		(8,425	)		(8,374	)		(8,482	)		(8,161	)		(8,035	)
Intangible assets, other than mortgage servicing rights		(1,525	)		(1,610	)		(1,657	)		(1,604	)		(1,479	)
Tangible assets (c)		273,293			272,444			271,037			255,293			256,046
Risk-weighted assets, determined in accordance with prescribed regulatory requirements (d)		237,145			234,042			235,233			231,993			231,821
Ratios
Tangible common equity to tangible assets (a)/(c)		6.0	%		5.6	%		5.3	%		5.4	%		5.1	%
Tier 1 common equity to risk-weighted assets (b)/(d)		7.4			7.1			6.8			6.8			6.7
Tangible common equity to risk-weighted assets (a)/(d)		6.9			6.5			6.1			6.0			5.7

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

Page 32