U.S. Bancorp 8K Reports Net Income for the Third Quarter of 2010 | USB 20 Oct 10

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 THIRD QUARTER OF 2010

Achieves Record Total Net Revenue of $4.6 Billion

MINNEAPOLIS, October 20, 2010—U.S. Bancorp (NYSE: USB) today reported net income of $908 million for the third quarter of 2010, or $.45 per diluted common share. Earnings for the third quarter were driven by record total net revenue of $4.6 billion. Highlights for the third quarter of 2010 included:

Strong new lending activity of $54.8 billion during the third quarter, including:

	§		$12.1 billion of new commercial and commercial real estate commitments

	§		$18.8 billion of commercial and commercial real estate commitment renewals

	§		$1.4 billion of lines related to new credit card accounts

	§		$22.5 billion of mortgage and other retail originations

Average total loan growth of 5.8 percent (a decline of .4 percent excluding acquisitions) over the third quarter of 2009

	§		Average total loan growth of .7 percent over the second quarter of 2010

	§		Average total commercial loan growth of 1.0 percent over the prior quarter, first linked quarter increase since the fourth quarter of 2008

Significant growth in average deposits of 9.8 percent (2.7 percent excluding acquisitions) over the third quarter of 2009, including:

	§		7.4 percent growth in average noninterest-bearing deposits

	§		16.3 percent growth in average total savings deposits

	Ø		Total net revenue growth of 7.9 percent over the third quarter of 2009

	Ø		Net interest income growth of 14.8 percent over the third quarter of 2009, driven by a 7.6 percent increase in average earning assets and growth in lower cost core deposit funding

	Ø		Net interest margin of 3.91 percent for the third quarter of 2010, compared with 3.67 percent in the third quarter of 2009 (and 3.90 percent in the second quarter of 2010)

U.S. Bancorp Reports Third quarter 2010 Results
October 20, 2010
Page 2

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

	§		Higher merchant processing services revenue (6.0 percent), corporate payment products revenue (5.5 percent) and credit and debit card revenue (2.6 percent)

	§		A 25.5 percent increase in commercial products revenue (principally syndication revenue, standby letters of credit fees and commercial loan fees)

	§		Record mortgage production of $16.6 billion, leading to a 12.3 percent increase in mortgage banking revenue

	Ø		Positive operating leverage on a linked quarter basis

	Ø		Decreased net charge-offs and nonperforming assets on a linked quarter basis. Provision for credit losses equal to net charge-offs.

	§		Fourth consecutive quarterly decrease in the provision for credit losses

	§		Net charge-offs declined 10.7 percent from the second quarter of 2010

	§		Nonperforming assets (excluding covered assets) decreased 4.6 percent from the second quarter of 2010

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

	§		Allowance to period-end loans (excluding covered loans) was 3.10 percent at September 30, 2010, compared with 3.18 percent at June 30, 2010 (and 2.88 percent at September 30, 2009)

	§		Allowance to nonperforming assets (excluding covered assets) was 153 percent at September 30, 2010, compared with 146 percent at June 30, 2010 (and 134 percent at September 30, 2009)

Capital generation continues to strengthen capital position; ratios at September 30, 2010 were:

	§		Tier 1 common equity ratio of 7.6 percent

	§		Tier 1 capital ratio of 10.3 percent

	§		Total risk based capital ratio of 13.3 percent

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U.S. Bancorp Reports Third quarter 2010 Results
October 20, 2010
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EARNINGS SUMMARY															Table 1

							Percent		Percent
							Change		Change
	3Q		2Q		3Q		3Q10 vs		3Q10 vs		YTD		YTD		Percent
($ in millions, except per-share data)	2010		2010		2009		2Q10		3Q09		2010		2009		Change

Net income attributable to U.S. Bancorp	$	908	$	766	$	603		18.5		50.6	$	2,343	$	1,603		46.2
Diluted earnings per common share	$	.45	$	.45	$	.30		—		50.0	$	1.24	$	.66		87.9

Return on average assets (%)		1.26		1.09		.90						1.11		.81
Return on average common equity (%)		12.8		13.4		10.0						12.3		7.7
Net interest margin (%)		3.91		3.90		3.67						3.90		3.62
Efficiency ratio (%)		51.9		52.4		47.5						51.1		48.1
Tangible efficiency ratio (%) (a)		49.9		50.4		45.3						49.1		45.9

Dividends declared per common share	$	.05	$	.05	$	.05		—		—	$	.15	$	.15		—
Book value per common share (period-end)	$	14.19	$	13.69	$	12.38		3.7		14.6


(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 $908 million for the third quarter of 2010, 50.6 percent higher than the $603 million for the third quarter of 2009 and 18.5 percent higher than the $766 million for the second quarter of 2010. Diluted earnings per common share of $.45 in the third quarter of 2010 were $.15 higher than the third quarter of 2009 and equal to the previous quarter. Return on average assets and return on average common equity were 1.26 percent and 12.8 percent, respectively, for the third quarter of 2010, compared with .90 percent and 10.0 percent, respectively, for the third quarter of 2009. Significant items in the third quarter of 2009 that impact the comparison of results included provision for credit losses in excess of net charge-offs of $415 million, net securities losses of $76 million and a $39 million gain related to the Company’s investment in Visa Inc. (NYSE: V). 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.

U.S. Bancorp Chairman, President and Chief Executive Officer Richard K. Davis said, “Our third quarter results, once again, reflected the Company’s financial strength, fundamental operating model and business line momentum, as record total net revenue and reduced credit costs drove third quarter net income of $908 million, or $.45 per diluted common share. Growth in total net revenue year-over-year can be

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U.S. Bancorp Reports Third quarter 2010 Results
October 20, 2010
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attributed to an increase in net interest income, the result of higher earning assets and an expanded net interest margin. Noninterest income grew, albeit at a slower pace, year-over-year, as increases in payments-related revenue and our other fee-based businesses were partly offset by expected headwinds from recent legislative actions and current economic conditions.

“Although total average loans, excluding acquisitions, were down slightly year-over-year, the Company recorded an increase in average loans quarter-over-quarter. Importantly, average commercial loans were higher on a linked quarter basis, as the utilization rate on commercial commitments stabilized. This is the first linked quarter increase in average commercial loans since the fourth quarter of 2008.

“Credit quality continued to show noticeable improvement this quarter, as net charge-offs and nonperforming assets declined. The provision for credit losses was equal to net charge-offs in the third quarter, as the need to build the allowance for credit losses diminished with the quarter’s improved credit trends and relative stabilization of economic conditions. As I indicated last quarter, we have reached the inflection point in credit quality. Credit costs peaked for our Company in the first quarter of 2010. Despite this on-going improvement in credit quality, we did not reduce the allowance for credit losses this quarter, as our consumer loans continued to grow and the economy, although showing signs of stability, continues to hold a degree of uncertainty with high unemployment and a challenging real estate market. Moreover, as we move through this cycle, we are mindful of the need to continue to protect our fortress balance sheet.

“In regard to the mortgage industry and recent questions concerning the validity of some foreclosures, I would like to reiterate our Company’s primary goal, which is to keep borrowers in their homes whenever possible. We actively participate in a number of loan modification programs that help to establish affordable payment options for our customers. Unfortunately, in some instances foreclosure, although a last resort effort, is a necessary step. We routinely review our procedures and we have confirmed that we have strong processes and controls in place to ensure that our affidavits are accurate and that no one is wrongfully foreclosed upon. We are able to closely manage the foreclosure process internally, given the manageable size and quality of our portfolio. We will continue to review our processes going forward and comply with any information requests received from regulatory and governmental authorities. We do believe, however, that a blanket foreclosure moratorium should be avoided in the interest of the national economic recovery.

“Our Company’s capital position remains strong, and growing, with a Tier 1 common equity ratio of 7.6 percent and a Tier 1 capital ratio of 10.3 percent at September 30th. Raising the dividend remains a top priority for our management team and board of directors. We continue, however, to wait for final regulatory

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October 20, 2010
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capital guidelines to be established. Our current capital position and our ability to generate new capital each quarter through earnings give us confidence that we can meet or exceed any capital requirements that may be forthcoming, and be one of the first banks to gain regulatory approval to raise our dividend.

“On September 15th, our management team hosted an investor conference in New York City. The theme of the day was “positioned to win,” and the day’s presentations led the audience of investors and analysts through a discussion on how our Company has prudently managed the fundamental elements of the business, how we have continued to invest in and enhance our business model over the past few years, and how we are managing and positioning each businesses line for future growth. We demonstrated how, by not changing course or succumbing to the easy growth strategies of the recent pre-crisis years, we have been able to manage well through a very challenging and uncertain economic environment, while positioning the Company to gain market share, produce industry-leading revenue growth, and achieve superior financial performance. I would not exchange our position in the industry for any other. We are moving forward with a sense of optimism and enthusiasm, focused on growing our businesses, sustaining an engaged and performance-driven workforce that provides superior service to our customers and communities and, importantly, creating long-term value for our shareholders.”

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October 20, 2010
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INCOME STATEMENT HIGHLIGHTS																			Table 2

								Percent			Percent
								Change			Change
(Taxable-equivalent basis, $ in millions,	3Q		2Q		3Q			3Q10 vs			3Q10 vs			YTD		YTD			Percent
except per-share data)	2010		2010		2009			2Q10			3Q09			2010		2009			Change

Net interest income	$	2,477	$	2,409	$	2,157			2.8			14.8		$	7,289	$	6,356			14.7
Noninterest income		2,110		2,110		2,093			—			.8			6,138		5,936			3.4

Total net revenue		4,587		4,519		4,250			1.5			7.9			13,427		12,292			9.2
Noninterest expense		2,385		2,377		2,053			.3			16.2			6,898		6,053			14.0

Income before provision and taxes		2,202		2,142		2,197			2.8			.2			6,529		6,239			4.6
Provision for credit losses		995		1,139		1,456			(12.6	)		(31.7	)		3,444		4,169			(17.4	)

Income before taxes		1,207		1,003		741			20.3			62.9			3,085		2,070			49.0
Taxable-equivalent adjustment		53		52		50			1.9			6.0			156		148			5.4
Applicable income taxes		260		199		86			30.7			nm			620		287			nm

Net income		894		752		605			18.9			47.8			2,309		1,635			41.2
Net (income) loss attributable to noncontrolling interests		14		14		(2	)		—			nm			34		(32	)		nm

Net income attributable to U.S. Bancorp	$	908	$	766	$	603			18.5			50.6		$	2,343	$	1,603			46.2

Net income applicable to U.S. Bancorp common shareholders	$	871	$	862	$	583			1.0			49.4		$	2,381	$	1,223			94.7

Diluted earnings per common share	$	.45	$	.45	$	.30			—			50.0		$	1.24	$	.66			87.9

Net income attributable to U.S. Bancorp for the third quarter of 2010 was $305 million (50.6 percent) higher than the same period of 2009 and $142 million (18.5 percent) higher than the second 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 a lower provision for credit losses. These positive variances were 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 partly offset by a small increase in total noninterest expense.

Total net revenue on a taxable-equivalent basis for the third quarter of 2010 was $4,587 million; $337 million (7.9 percent) higher than the third quarter of 2009, reflecting a 14.8 percent increase in net interest income and a .8 percent increase in noninterest income. The increase in net interest income year-over-year was largely the result of an increase in average earning assets, primarily related to acquisitions, and continued growth in lower cost core deposit funding. Noninterest income increased year-over-year as a result of higher payments-related revenue, commercial products revenue and mortgage banking revenue. Total net revenue on a taxable-equivalent basis was $68 million (1.5 percent) higher on a linked quarter

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October 20, 2010
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basis, due to a 2.8 percent increase in net interest income, driven by higher average loan and loans held-for-sale balances.

Total noninterest expense in the third quarter of 2010 was $2,385 million; $332 million (16.2 percent) higher than the third quarter of 2009, and $8 million (.3 percent) higher than the second quarter of 2010. The increase in total noninterest expense year-over-year was primarily due to the impact of acquisitions and compensation and employee benefits expense. Total noninterest expense was relatively flat compared with the second quarter of 2010 with favorable variances in most expense categories being partially offset by higher compensation, marketing and business development and professional services expense.

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 third quarter of 2010 was $995 million, $144 million lower than the second quarter of 2010 and $461 million lower than the third quarter of 2009. The provision for credit losses equaled net charge-offs in the third quarter of 2010, but exceeded net charge-offs by $25 million in the second quarter of 2010, and by $415 million in the third quarter of 2009. Net charge-offs in the third quarter of 2010 were $995 million, lower than the $1,114 million in the second quarter of 2010, and the $1,041 million in the third quarter of 2009. Given current economic conditions, the Company expects the level of net charge-offs to continue to trend lower in the fourth 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 $3,563 million at September 30, 2010, $3,734 million at June 30, 2010, and $3,720 million at September 30, 2009. The decline on both a linked quarter and year-over-year basis was led by reductions in the construction and land development nonperforming portfolios, as the Company continued to resolve and reduce exposure to these problem assets. There was also improvement in the other commercial portfolios as the economy began to stabilize. However, there is continued stress in the residential mortgage and credit card portfolios, as well as an increase in foreclosed properties, due to the impact of the overall duration of the economic slowdown. Covered nonperforming assets were $1,851 million at September 30, 2010, $2,151 million at June 30, 2010, and $672 million at September 30, 2009. The majority of the nonperforming covered assets were considered credit-impaired at acquisition and were recorded at 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

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October 20, 2010
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credit losses to period-end loans, excluding covered loans, was 3.10 percent at September 30, 2010, compared with 3.18 percent at June 30, 2010, and 2.88 percent at September 30, 2009. The ratio of the allowance for credit losses to period-end loans, including covered loans, was 2.85 percent at September 30, 2010, compared with 2.89 percent at June 30, 2010, and 2.73 percent at September 30, 2009. The Company expects total nonperforming assets, excluding covered assets, to continue to trend lower in the fourth quarter.


NET INTEREST INCOME																						Table 3


										Change			Change
	3Q			2Q			3Q			3Q10 vs			3Q10 vs			YTD			YTD
(Taxable-equivalent basis; $ in millions)	2010			2010			2009			2Q10			3Q09			2010			2009			Change

Components of net interest income
Income on earning assets	$	3,132		$	3,049		$	2,909		$	83		$	223		$	9,227		$	8,722		$	505
Expense on interest-bearing liabilities		655			640			752			15			(97	)		1,938			2,366			(428	)

Net interest income	$	2,477		$	2,409		$	2,157		$	68		$	320		$	7,289		$	6,356		$	933


Average yields and rates paid
Earning assets yield		4.95	%		4.94	%		4.94	%		.01	%		.01	%		4.94	%		4.97	%		(.03	)%
Rate paid on interest-bearing liabilities		1.25			1.25			1.54			—			(.29	)		1.25			1.63			(.38	)

Gross interest margin		3.70	%		3.69	%		3.40	%		.01	%		.30	%		3.69	%		3.34	%		.35	%

Net interest margin		3.91	%		3.90	%		3.67	%		.01	%		.24	%		3.90	%		3.62	%		.28	%


Average balances
Investment securities (a)	$	47,870		$	47,140		$	42,558		$	730		$	5,312		$	47,080		$	42,357		$	4,723
Loans		192,541			191,161			181,968			1,380			10,573			192,192			183,837			8,355
Earning assets		251,916			247,446			234,111			4,470			17,805			249,408			234,559			14,849
Interest-bearing liabilities		208,653			205,929			194,202			2,724			14,451			208,037			193,649			14,388
Net free funds (b)		43,263			41,517			39,909			1,746			3,354			41,371			40,910			461


(a)		Excludes unrealized gain (loss)

(b)		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 third quarter of 2010 was $2,477 million, compared with $2,157 million in the third quarter of 2009, an increase of $320 million (14.8 percent). The increase was the result of growth in average earning assets and an expanded net interest margin. Average earning assets were $17.8 billion (7.6 percent) higher than the third quarter of 2009, driven by increases of $10.6 billion (5.8 percent) in average loans and $5.3 billion (12.5 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 increased $68 million (2.8 percent) on a linked quarter basis,

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October 20, 2010
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mainly as a result of an increase in average earning assets and day basis. During the third quarter of 2010, the net interest margin was 3.91 percent, compared with 3.67 percent in the third quarter of 2009 and 3.90 percent in the second quarter of 2010.


AVERAGE LOANS																	Table 4

							Percent			Percent
							Change			Change
	3Q		2Q		3Q		3Q10 vs			3Q10 vs			YTD		YTD		Percent
($ in millions)	2010		2010		2009		2Q10			3Q09			2010		2009		Change

Commercial	$	40,726	$	40,095	$	44,655		1.6			(8.8	)	$	40,550	$	47,109		(13.9	)
Lease financing		6,058		6,245		6,567		(3.0	)		(7.8	)		6,248		6,678		(6.4	)

Total commercial		46,784		46,340		51,222		1.0			(8.7	)		46,798		53,787		(13.0	)

Commercial mortgages		26,008		25,606		24,296		1.6			7.0			25,688		23,911		7.4
Construction and development		8,182		8,558		9,533		(4.4	)		(14.2	)		8,477		9,742		(13.0	)

Total commercial real estate		34,190		34,164		33,829		.1			1.1			34,165		33,653		1.5

Residential mortgages		27,890		26,821		24,405		4.0			14.3			27,045		24,096		12.2

Credit card		16,510		16,329		15,387		1.1			7.3			16,403		14,444		13.6
Retail leasing		4,289		4,364		4,822		(1.7	)		(11.1	)		4,387		4,989		(12.1	)
Home equity and second mortgages		19,289		19,332		19,368		(.2	)		(.4	)		19,340		19,298		.2
Other retail		24,281		23,357		22,647		4.0			7.2			23,664		22,795		3.8

Total retail		64,369		63,382		62,224		1.6			3.4			63,794		61,526		3.7


Total loans, excluding covered loans		173,233		170,707		171,680		1.5			.9			171,802		173,062		(.7	)


Covered loans		19,308		20,454		10,288		(5.6	)		87.7			20,390		10,775		89.2


Total loans	$	192,541	$	191,161	$	181,968		.7			5.8		$	192,192	$	183,837		4.5

Total average loans were $10.6 billion (5.8 percent) higher in the third quarter of 2010 than the third quarter of 2009, driven by the FBOP acquisition and growth in residential mortgages (14.3 percent) and retail loans (3.4 percent). These increases were partially offset by an 8.7 percent 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 increases in credit cards and installment loans. Included in the growth of average credit card loans outstanding were portfolio purchases of $1.3 billion in the third quarter of 2009 and $.5 billion in the second quarter of 2010. Total average loans were $1.4 billion (.7 percent) higher in the third quarter of 2010 than the second quarter of 2010, as increases in the majority of loan categories, principally residential mortgages (4.0 percent) and other retail loans (4.0 percent), were partially offset by lower covered loans (5.6 percent). Relatively stable commitment utilization by corporate

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customers and a higher demand for new loans from credit-worthy borrowers resulted in a modest increase in total commercial and commercial real estate balances.

Average investment securities in the third quarter of 2010 were $5.3 billion (12.5 percent) higher year-over-year and $730 million (1.5 percent) higher than the prior quarter. 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
	3Q		2Q		3Q		3Q10 vs			3Q10 vs			YTD		YTD		Percent
($ in millions)	2010		2010		2009		2Q10			3Q09			2010		2009		Change

Noninterest-bearing deposits	$	39,732	$	39,917	$	36,982		(.5	)		7.4		$	39,223	$	36,800		6.6
Interest-bearing savings deposits
Interest checking		39,308		39,503		38,218		(.5	)		2.9			39,599		35,906		10.3
Money market savings		38,005		40,256		33,387		(5.6	)		13.8			39,710		29,541		34.4
Savings accounts		22,008		20,035		13,824		9.8			59.2			20,038		12,160		64.8

Total of savings deposits		99,321		99,794		85,429		(.5	)		16.3			99,347		77,607		28.0
Time certificates of deposit less than $100,000		16,024		16,980		16,985		(5.6	)		(5.7	)		17,105		17,691		(3.3	)
Time deposits greater than $100,000		27,583		26,627		26,966		3.6			2.3			27,162		31,293		(13.2	)

Total interest-bearing deposits		142,928		143,401		129,380		(.3	)		10.5			143,614		126,591		13.4

Total deposits	$	182,660	$	183,318	$	166,362		(.4	)		9.8		$	182,837	$	163,391		11.9

Average total deposits for the third quarter of 2010 were $16.3 billion (9.8 percent) higher than the third quarter of 2009. Excluding deposits from acquisitions, average total deposits increased $4.5 billion (2.7 percent) over the third quarter of 2009. Noninterest-bearing deposits increased $2.8 billion (7.4 percent) year-over-year, due to growth in the Consumer and Wholesale Banking business line balances and the impact of acquisitions. Average total savings deposits were $13.9 billion (16.3 percent) higher year-over-year, the result of growth in Consumer Banking, Wholesale Banking, institutional and corporate trust balances, and the impact of acquisitions. Average time certificates of deposit less than $100,000 were $961 million (5.7 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 higher by $617 million (2.3 percent), reflecting the impact of acquisitions, partially offset by a decrease in required overall wholesale funding.

Average total deposits decreased $658 million (.4 percent) from the second quarter of 2010, primarily due to declines in average time deposits less than $100,000 of $956 million (5.6 percent) and average total

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U.S. Bancorp Reports Third quarter 2010 Results
October 20, 2010
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savings deposits of $473 million (.5 percent), partially offset by an increase in average time deposits over $100,000 of $956 million (3.6 percent). Total average savings deposits decreased on a linked quarter basis, principally due to a decline in corporate trust and institutional trust and broker-dealer balances, partially offset by higher Consumer Banking 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 increase in average time certificates of deposit greater than $100,000 reflected wholesale funding decisions.


NONINTEREST INCOME																						Table 6

										Percent			Percent
										Change			Change
	3Q			2Q			3Q			3Q10 vs			3Q10 vs			YTD			YTD			Percent
($ in millions)	2010			2010			2009			2Q10			3Q09			2010			2009			Change

Credit and debit card revenue	$	274		$	266		$	267			3.0			2.6		$	798		$	782			2.0
Corporate payment products revenue		191			178			181			7.3			5.5			537			503			6.8
Merchant processing services		318			320			300			(.6	)		6.0			930			836			11.2
ATM processing services		105			108			103			(2.8	)		1.9			318			309			2.9
Trust and investment management fees		267			267			293			—			(8.9	)		798			891			(10.4	)
Deposit service charges		160			199			256			(19.6	)		(37.5	)		566			732			(22.7	)
Treasury management fees		139			145			141			(4.1	)		(1.4	)		421			420			.2
Commercial products revenue		197			205			157			(3.9	)		25.5			563			430			30.9
Mortgage banking revenue		310			243			276			27.6			12.3			753			817			(7.8	)
Investment products fees and commissions		27			30			27			(10.0	)		—			82			82			—
Securities gains (losses), net		(9	)		(21	)		(76	)		57.1			88.2			(64	)		(293	)		78.2
Other		131			170			168			(22.9	)		(22.0	)		436			427			2.1


Total noninterest income	$	2,110		$	2,110		$	2,093			—			.8		$	6,138		$	5,936			3.4

Noninterest Income

Third quarter noninterest income was $2,110 million; $17 million (.8 percent) higher than the third quarter of 2009 and equal to the second quarter of 2010. Year-over-year, noninterest income benefited from payments-related revenues, which were $35 million (4.7 percent) higher, largely due to increased transaction volumes, and a $40 million (25.5 percent) increase in commercial products revenue, attributable to higher standby letters of credit fees, commercial loan fees and syndication revenue. Additionally, mortgage banking revenue was higher than the same quarter of 2009 by $34 million (12.3 percent), driven by higher production and servicing revenue, partially offset by an unfavorable net change in the valuation of mortgage servicing rights (“MSRs”) and related economic hedging activities. Total noninterest income was also favorably impacted by a year-over-year change in net securities losses, which were $67 million (88.2

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October 20, 2010
Page 12

percent) lower than the prior year, primarily due to lower impairments. Trust and investment management fees declined $26 million (8.9 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 $96 million (37.5 percent) as a result of revised overdraft fee policies and lower overdraft incidences. Other income was $37 million (22.0 percent) lower than the prior year primarily due to the third quarter of 2009 gain related to the Company’s investment in Visa Inc. and lower customer derivative revenue, partially offset by improved retail lease residual valuation income and higher income from equity investments.

Noninterest income was $2,110 million in both the third quarter and second quarter of 2010. Payments-related revenue increased $19 million (2.5 percent), primarily driven by seasonally higher transaction volumes in corporate payment products. Mortgage banking revenue increased $67 million (27.6 percent) due to strong mortgage production, partially offset by an unfavorable net change in the valuation of MSRs and related economic hedging activities. The $12 million (57.1 percent) favorable change in net securities losses on a linked quarter basis was primarily due to higher securities gains in the current quarter. Offsetting these favorable variances on a linked quarter basis were declines in deposit service charges of $39 million (19.6 percent), reflecting the impact of revised overdraft fee policies, treasury management fees of $6 million (4.1 percent), owing to seasonally lower government-related processing, and commercial products revenue of $8 million (3.9 percent), mainly due to lower syndication fees related to tax-advantaged investment transactions. In addition, other income was $39 million (22.9 percent) lower primarily due to a $28 million gain in the second quarter of 2010 related to the Company’s investment in Visa Inc. and lower customer derivative revenue, partially offset by improved retail lease residual valuation income.

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October 20, 2010
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NONINTEREST EXPENSE																	Table 7

							Percent			Percent
							Change			Change
	3Q		2Q		3Q		3Q10 vs			3Q10 vs			YTD		YTD		Percent
($ in millions)	2010		2010		2009		2Q10			3Q09			2010		2009		Change

Compensation	$	973	$	946	$	769		2.9			26.5		$	2,780	$	2,319		19.9
Employee benefits		171		172		134		(.6	)		27.6			523		429		21.9
Net occupancy and equipment		229		226		203		1.3			12.8			682		622		9.6
Professional services		78		73		63		6.8			23.8			209		174		20.1
Marketing and business development		108		86		137		25.6			(21.2	)		254		273		(7.0	)
Technology and communications		186		186		175		—			6.3			557		487		14.4
Postage, printing and supplies		74		75		72		(1.3	)		2.8			223		218		2.3
Other intangibles		90		91		94		(1.1	)		(4.3	)		278		280		(.7	)
Other		476		522		406		(8.8	)		17.2			1,392		1,251		11.3


Total noninterest expense	$	2,385	$	2,377	$	2,053		.3			16.2		$	6,898	$	6,053		14.0

Noninterest Expense

Noninterest expense in the third quarter of 2010 totaled $2,385 million, an increase of $332 million (16.2 percent) over the third quarter of 2009, and an $8 million increase (.3 percent) over the second 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 and employee benefits expense increased by $204 million (26.5 percent) and $37 million (27.6 percent), respectively, year-over-year, primarily because of acquisitions, higher incentives related to the Company’s improved financial results, merit increases and the five percent cost reduction program that was in effect during the third quarter of 2009. Net occupancy and equipment expense increased $26 million (12.8 percent), principally due to acquisitions and other business initiatives. Professional services expense was $15 million (23.8 percent) higher year-over-year, due to acquisitions, payments-related projects and legal costs. Technology and communications expense increased $11 million (6.3 percent), as a result of business initiatives and volume increases across various business lines. Other expense was higher by $70 million (17.2 percent) largely due to increases in costs related to investments in affordable housing and other real estate owned. Marketing and business development expense decreased $29 million (21.2 percent) from the prior year mainly due to payments-related initiatives during 2009, partially offset by a higher contribution to the Company’s charitable foundation in the third quarter of 2010.

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October 20, 2010
Page 14

Noninterest expense was relatively flat on a linked quarter basis, increasing $8 million (.3 percent). Compensation expense increased $27 million (2.9 percent), principally due to higher incentives and commissions. Professional services expense was $5 million (6.8 percent) higher on a linked quarter basis, primarily due to payments-related initiatives. Marketing and business development expense was higher by $22 million (25.6 percent), compared with the second quarter of 2010, reflecting an increase in the Company’s contribution to its charitable foundation, partially offset by the timing of credit card product initiatives and other marketing campaigns. Offsetting these unfavorable variances, was a $46 million (8.8 percent) decrease in other expense on a linked quarter basis, primarily due to a reduction in conversion costs related to the FBOP acquisition and the impact of debt extinguishment costs associated with the income trust securities exchange that was completed and recorded in the prior quarter.

Provision for Income Taxes

The provision for income taxes for the third quarter of 2010 resulted in a tax rate on a taxable-equivalent basis of 25.9 percent (effective tax rate of 22.5 percent), compared with 18.4 percent (effective tax rate of 12.4 percent) in the third quarter of 2009 and 25.0 percent (effective tax rate of 20.9 percent) in the second quarter of 2010. The increases in effective tax rate principally reflected the marginal impact of higher pretax earnings.

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U.S. Bancorp Reports Third quarter 2010 Results
October 20, 2010
Page 15


ALLOWANCE FOR CREDIT LOSSES									Table 8

	3Q		2Q		1Q		4Q		3Q
($ in millions)	2010		2010		2010		2009		2009

Balance, beginning of period	$	5,536	$	5,439	$	5,264	$	4,986	$	4,571

Net charge-offs
Commercial		153		223		243		250		200
Lease financing		18		22		34		33		44

Total commercial		171		245		277		283		244
Commercial mortgages		113		71		46		30		30
Construction and development		94		156		146		144		159

Total commercial real estate		207		227		192		174		189

Residential mortgages		132		138		145		153		129

Credit card		296		317		312		285		271
Retail leasing		2		4		5		5		8
Home equity and second mortgages		79		79		90		96		89
Other retail		101		99		111		111		111

Total retail		478		499		518		497		479

Total net charge-offs, excluding covered loans		988		1,109		1,132		1,107		1,041
Covered loans		7		5		3		3		—

Total net charge-offs		995		1,114		1,135		1,110		1,041
Provision for credit losses		995		1,139		1,310		1,388		1,456
Net change for credit losses to be reimbursed by the FDIC		4		72		—		—		—

Balance, end of period	$	5,540	$	5,536	$	5,439	$	5,264	$	4,986


Components
Allowance for loan losses, excluding losses to be reimbursed by the FDIC	$	5,245	$	5,248	$	5,235	$	5,079	$	4,825
Allowance for credit losses to be reimbursed by the FDIC		76		72		—		—		—
Liability for unfunded credit commitments		219		216		204		185		161

Total allowance for credit losses	$	5,540	$	5,536	$	5,439	$	5,264	$	4,986


Gross charge-offs	$	1,069	$	1,186	$	1,206	$	1,174	$	1,105
Gross recoveries	$	74	$	72	$	71	$	64	$	64

Allowance for credit losses as a percentage of
Period-end loans, excluding covered loans		3.10		3.18		3.20		3.04		2.88
Nonperforming loans, excluding covered loans		181		168		156		153		150
Nonperforming assets, excluding covered assets		153		146		136		135		134

Period-end loans		2.85		2.89		2.85		2.70		2.73
Nonperforming loans		133		120		109		110		136
Nonperforming assets		102		94		85		89		114

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October 20, 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 $5,540 million at September 30, 2010, compared with $5,536 million at June 30, 2010, and $4,986 million at September 30, 2009. Total net charge-offs in the third quarter of 2010 were $995 million, compared with $1,114 million in the second quarter of 2010, and $1,041 million in the third quarter of 2009. The decrease in total net charge-offs was principally due to improvement in the commercial and commercial real estate portfolios. The Company recorded $995 million of provision for credit losses, equal to net charge-offs during the third quarter of 2010. The allowance for credit losses reimbursable by the FDIC was higher by $4 million, which increased the total allowance for credit losses by the same amount.

Commercial and commercial real estate loan net charge-offs decreased to $378 million in the third quarter of 2010 (1.85 percent of average loans outstanding) compared with $472 million (2.35 percent of average loans outstanding) in the second quarter of 2010 and $433 million (2.02 percent of average loans outstanding) in the third quarter of 2009. The decrease primarily reflected the resolution of certain major construction projects and the impact of more stable economic conditions on the Company’s commercial loan portfolios.

Residential mortgage loan net charge-offs decreased to $132 million (1.88 percent of average loans outstanding) in the third quarter of 2010 from $138 million (2.06 percent of average loans outstanding) in the second quarter of 2010, reflecting the positive impact of restructuring programs. Residential mortgage loan net charge-offs in the current quarter remained higher, however, than the $129 million (2.10 percent of average loans outstanding) recorded in the third quarter of 2009. Total retail loan net charge-offs were $478 million (2.95 percent of average loans outstanding) in the third quarter of 2010, lower than the $499 million (3.16 percent of average loans outstanding) in the second quarter of 2010 and the $479 million (3.05 percent of average loans outstanding) in the third 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 ratio of the allowance for credit losses to period-end loans was 2.85 percent (3.10 percent excluding covered loans) at September 30, 2010, compared with 2.89 percent (3.18 percent excluding covered loans) at June 30, 2010, and 2.73 percent (2.88 percent excluding covered loans) at September 30, 2009. The ratio of the allowance for credit losses to nonperforming loans was 133 percent (181 percent excluding covered

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October 20, 2010
Page 17

loans) at September 30, 2010, compared with 120 percent (168 percent excluding covered loans) at June 30, 2010, and 136 percent (150 percent excluding covered loans) at September 30, 2009.


CREDIT RATIOS									Table 9

	3Q		2Q		1Q		4Q		3Q
(Percent)	2010		2010		2010		2009		2009

Net charge-offs ratios (a)
Commercial		1.49		2.23		2.41		2.28		1.78
Lease financing		1.18		1.41		2.14		2.02		2.66
Total commercial		1.45		2.12		2.38		2.25		1.89

Commercial mortgages		1.72		1.11		.73		.48		.49
Construction and development		4.56		7.31		6.80		6.24		6.62
Total commercial real estate		2.40		2.67		2.28		2.03		2.22

Residential mortgages		1.88		2.06		2.23		2.37		2.10

Credit card (b)		7.11		7.79		7.73		6.89		6.99
Retail leasing		.19		.37		.45		.43		.66
Home equity and second mortgages		1.62		1.64		1.88		1.96		1.82
Other retail		1.65		1.70		1.93		1.91		1.94
Total retail		2.95		3.16		3.30		3.11		3.05

Total net charge-offs, excluding covered loans		2.26		2.61		2.68		2.54		2.41

Covered loans		.14		.10		.06		.06		—

Total net charge-offs		2.05		2.34		2.39		2.30		2.27

Delinquent loan ratios - 90 days or more past dueexcludingnonperforming loans (c)
Commercial		.19		.21		.18		.22		.17
Commercial real estate		.05		.09		.01		.02		.12
Residential mortgages		1.75		1.85		2.26		2.80		2.32
Retail		.85		.95		1.00		1.07		1.00
Total loans, excluding covered loans		.66		.72		.78		.88		.78
Covered loans		4.96		4.91		3.90		3.59		8.18
Total loans		1.08		1.16		1.12		1.19		1.16

Delinquent loan ratios - 90 days or more past dueincludingnonperforming loans (c)
Commercial		1.67		1.89		2.06		2.25		2.19
Commercial real estate		4.20		4.84		5.37		5.22		5.22
Residential mortgages		3.90		4.08		4.33		4.59		3.86
Retail		1.26		1.32		1.37		1.39		1.28
Total loans, excluding covered loans		2.37		2.61		2.82		2.87		2.69
Covered loans		11.12		11.72		11.19		9.76		11.97
Total loans		3.23		3.56		3.74		3.64		3.18


(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 7.84 percent for the third quarter of 2010, 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.

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October 20, 2010
Page 18


ASSET QUALITY									Table 10

	Sep 30		Jun 30		Mar 31		Dec 31		Sep 30
($ in millions)	2010		2010		2010		2009		2009

Nonperforming loans
Commercial	$	594	$	669	$	758	$	866	$	908
Lease financing		111		115		113		125		119

Total commercial		705		784		871		991		1,027

Commercial mortgages		624		601		596		581		502
Construction and development		799		1,013		1,236		1,192		1,230

Total commercial real estate		1,423		1,614		1,832		1,773		1,732
Residential mortgages		614		607		550		467		383
Retail		262		237		229		204		174

Total nonperforming loans, excluding covered loans		3,004		3,242		3,482		3,435		3,316
Covered loans		1,172		1,360		1,524		1,350		362

Total nonperforming loans		4,176		4,602		5,006		4,785		3,678
Other real estate (a)		537		469		482		437		366
Covered other real estate (a)		679		791		861		653		310
Other nonperforming assets		22		23		31		32		38

Total nonperforming assets (b)	$	5,414	$	5,885	$	6,380	$	5,907	$	4,392

Total nonperforming assets, excluding covered assets	$	3,563	$	3,734	$	3,995	$	3,904	$	3,720


Accruing loans 90 days or more past due, excluding covered loans	$	1,165	$	1,239	$	1,321	$	1,525	$	1,344

Accruing loans 90 days or more past due	$	2,110	$	2,221	$	2,138	$	2,309	$	2,125

Restructured loans that continue to accrue interest (c)	$	2,180	$	2,112	$	2,008	$	1,794	$	1,800


Nonperforming assets to loans plus ORE, excluding covered assets (%)		2.02		2.17		2.34		2.25		2.14
Nonperforming assets to loans plus ORE (%)		2.76		3.05		3.31		3.02		2.39


(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 September 30, 2010, totaled $5,414 million, compared with $5,885 million at June 30, 2010, and $4,392 million at September 30, 2009. Total nonperforming assets at September 30, 2010, included $1,851 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 2.76 percent (2.02 percent excluding covered assets) at September 30, 2010, compared with 3.05 percent (2.17 percent excluding covered assets) at June 30, 2010, and 2.39 percent (2.14 percent excluding covered assets) at September 30, 2009. The decrease in nonperforming assets, excluding covered assets, compared with a year ago was driven primarily by the construction and land development portfolios,

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October 20, 2010
Page 19

as well as improvement in other commercial portfolios. Given current economic conditions, the Company expects nonperforming assets, excluding covered assets, to trend lower in the fourth quarter.

Accruing loans 90 days or more past due were $2,110 million ($1,165 million excluding covered loans) at September 30, 2010, compared with $2,221 million ($1,239 million excluding covered loans) at June 30, 2010, and $2,125 million ($1,344 million excluding covered loans) at September 30, 2009. The increase in restructured loans that continue to accrue interest, compared with the third quarter of 2009 and the second quarter of 2010, reflected 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, including those acquired through FDIC-assisted bank acquisitions, but expects increases in restructured loans to continue to moderate.


CAPITAL POSITION													Table 11

	Sep 30			Jun 30			Mar 31			Dec 31			Sep 30
($ in millions)	2010			2010			2010			2009			2009

Total U.S. Bancorp shareholders’ equity	$	29,151		$	28,169		$	26,709		$	25,963		$	25,171
Tier 1 capital		24,908			24,021			23,278			22,610			21,990
Total risk-based capital		32,265			31,890			30,858			30,458			30,126

Tier 1 capital ratio		10.3	%		10.1	%		9.9	%		9.6	%		9.5	%
Total risk-based capital ratio		13.3			13.4			13.2			12.9			13.0
Leverage ratio		9.0			8.8			8.6			8.5			8.6
Tier 1 common equity ratio		7.6			7.4			7.1			6.8			6.8
Tangible common equity ratio		6.2			6.0			5.6			5.3			5.4
Tangible common equity as a percent of risk-weighted assets		7.2			6.9			6.5			6.1			6.0

Total U.S. Bancorp shareholders’ equity was $29.2 billion at September 30, 2010, compared with $28.2 billion at June 30, 2010, and $25.2 billion at September 30, 2009. The increase over the prior year 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 10.3 percent at September 30, 2010, compared with 10.1 percent at June 30, 2010, and 9.5 percent at September 30, 2009. The Tier 1 common equity ratio was 7.6 percent at September 30, 2010, compared with 7.4 percent at June 30, 2010, and 6.8 percent at September 30, 2009. The tangible common equity ratio was 6.2 percent at September 30, 2010, compared with 6.0 percent at June 30, 2010, and 5.4 percent at September 30, 2009. All regulatory ratios continue to be in excess of “well-capitalized” requirements.

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October 20, 2010
Page 20


COMMON SHARES										Table 12

	3Q		2Q		1Q			4Q		3Q
(Millions)	2010		2010		2010			2009		2009

Beginning shares outstanding		1,917		1,916		1,913			1,912		1,912
Shares issued for stock option and stock purchase plans, acquisitions and other corporate purposes		1		1		4			1		—
Shares repurchased for stock option plans		—		—		(1	)		—		—

Ending shares outstanding		1,918		1,917		1,916			1,913		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							3Q 2010
($ in millions)	3Q		2Q		3Q		3Q10 vs			3Q10 vs			YTD		YTD		Percent			Earnings
Business Line	2010		2010		2009		2Q10			3Q09			2010		2009		Change			Composition

Wholesale Banking	$	137	$	94	$	29		45.7			nm		$	238	$	87		nm			15	%
Consumer Banking		243		162		206		50.0			18.0			586		638		(8.2	)		27
Wealth Management & Securities Services		53		60		84		(11.7	)		(36.9	)		165		268		(38.4	)		6
Payment Services		215		181		73		18.8			nm			508		217		nm			24
Treasury and Corporate Support		260		269		211		(3.3	)		23.2			846		393		nm			28


Consolidated Company	$	908	$	766	$	603		18.5			50.6		$	2,343	$	1,603		46.2			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 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,

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October 20, 2010
Page 21

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. Starting with the current quarter, lines of business results include the impact of transferring the operating activities of the FBOP acquisition to the appropriate operating segments. Covered commercial and commercial real estate credit-impaired loans and related other real estate remained in Treasury and Corporate Support.

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 $137 million of the Company’s net income in the third quarter of 2010, compared with $29 million in the third quarter of 2009 and $94 million in the second quarter of 2010. Wholesale Banking’s net income increased $108 million over the same quarter of 2009, due to higher total net revenue and a lower provision for credit losses, partially offset by an unfavorable variance in total noninterest expense. Net interest income increased $38 million (7.6 percent) year-over-year due to improved spreads on new loans, an increase in loan fees and the impact of the FBOP acquisition, partially offset by a decrease in average total loans and the impact of declining rates on the margin benefit from deposits. Total noninterest income increased $42 million (17.6 percent), mainly due to strong growth in commercial products revenue including, standby letters of credit, commercial loan and capital markets fees and higher equity investment income, partially offset by lower customer derivative revenue. Total noninterest expense increased $49 million (18.2 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 $141 million (32.9 percent) lower year-over-year due to a reduction in the reserve allocation and a decrease in net charge-offs.

Wholesale Banking’s contribution to net income in the third quarter of 2010 was $43 million (45.7 percent) higher than the second 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 by $18 million (2.2 percent) due to higher net interest income, partially offset by a decline in total noninterest income. Net interest income was $29 million (5.7 percent) higher on a linked quarter basis as loan spreads improved. The $11 million (3.8 percent) decrease in total noninterest

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U.S. Bancorp Reports Third quarter 2010 Results
October 20, 2010
Page 22

income was the result of lower customer derivative revenue. Total noninterest expense increased by $2 million (.6 percent), principally due to higher compensation and employee benefits expense, partially offset by lower net shared services expense. The provision for credit losses decreased $52 million (15.3 percent) on a linked quarter basis due to lower net charge-offs, partially offset by an increase 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 $243 million of the Company’s net income in the third quarter of 2010, a $37 million (18.0 percent) increase over the third quarter of 2009, and an $81 million (50.0 percent) increase over the prior quarter. Within Consumer Banking, the retail banking division accounted for $60 million of the total contribution, a $4 million (6.3 percent) decrease from the same quarter of last year, but a $32 million increase over the previous quarter. The decrease in the retail banking division’s contribution from the same period of 2009 was primarily due to higher total noninterest expense, partially offset by a lower provision for credit losses. Retail banking’s net interest income increased 9.2 percent over the third quarter of 2009 due to improved spreads on loans, higher deposit volumes 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 16.1 percent from a year ago due to a reduction in deposit service charges principally due to the impact of revised overdraft fee policies, partially offset by an improvement in retail lease residual valuation income. Total noninterest expense for the retail banking division in the third quarter of 2010 was 18.0 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, including the impact of the FBOP acquisition. 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 third quarter of 2010, the mortgage banking division’s contribution was $183 million, a 28.9 increase over the third quarter of 2009. The division’s total net revenue increased 15.0 percent over a year ago, reflecting higher mortgage loan production, partially offset by lower interest income on average mortgage loans held-for-sale. Total noninterest expense for the mortgage banking division increased 16.7 percent over the third quarter of 2009, primarily due to higher compensation expense and servicing costs

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U.S. Bancorp Reports Third quarter 2010 Results
October 20, 2010
Page 23

related to increased production. The provision for credit losses decreased 32.9 percent year-over-year for the mortgage banking division.

Consumer Banking’s contribution in the third quarter of 2010 was $81 million (50.0 percent) higher than the second quarter of 2010 due to higher total net revenue and a lower provision for credit losses, partially offset by an increase in total noninterest expense. Within Consumer Banking, the retail banking division’s contribution increased $32 million on a linked quarter basis, principally due to an 18.2 percent decrease in the provision for credit losses, partially offset by an increase in total noninterest expense. Total net revenue for the retail banking division decreased .3 percent due to lower total noninterest income, reflecting the impact of the revised overdraft fee policies on deposit service charges, partially offset by higher net interest income due to growth in average loan and deposit balances and improved spreads on loans. Total noninterest expense for the retail banking division increased 1.6 percent on a linked quarter basis, the result of higher compensation and employee benefits expense, expense related to other real estate owned and shared services expense, partially offset by lower fraud losses. The provision for credit losses for the division decreased 18.2 percent due to lower net charge-offs compared with the second quarter of 2010. The contribution of the mortgage banking division increased 36.6 percent over the second quarter of 2010, driven by higher total net revenue. Total net revenue increased 25.3 percent due to a 26.2 percent increase in net interest income and higher mortgage banking revenue due to higher mortgage production, partially offset by an unfavorable net change in the valuation of MSRs and related economic hedging activities. Total noninterest expense increased 6.9 percent due to higher commission and incentive expense related to the increase in production. The mortgage banking division’s provision for credit losses increased 30.6 percent on a linked quarter basis due to a higher reserve allocation.

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 $53 million of the Company’s net income in the third quarter of 2010, a 36.9 percent decrease from the third quarter of 2009 and an 11.7 percent decrease from the second quarter of 2010. Total net revenue decreased by $7 million (1.9 percent) year-over-year. Net interest income was higher by $16 million (22.9 percent), primarily due to higher average deposit balances, partially offset by a decline in the related margin benefit. Total noninterest income declined $23 million (7.7 percent), as low interest rates negatively impacted money market investment fees

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U.S. Bancorp Reports Third quarter 2010 Results
October 20, 2010
Page 24

and lower money market fund balances led to a decline in account-level fees. Total noninterest expense increased by $36 million (15.9 percent), due to higher compensation and employee benefits expense. The provision for credit losses increased by $5 million (50.0 percent) due to an increase in net charge-offs.

The decrease in the business line’s contribution in the third quarter of 2010 compared with the prior quarter was the result of a higher provision for credit losses, reflecting an increase in net charge-offs. Total net revenue increased $3 million (.8 percent), principally due to a favorable variance of $4 million (4.9 percent) in net interest income, the result of an improved margin benefit on average deposit balances. Total noninterest expense was essentially flat on a linked quarter basis.

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 $215 million of the Company’s net income in the third quarter of 2010, an increase of $142 million over the same period of 2009, and a $34 million (18.8 percent) 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 $54 million (5.0 percent) year-over-year. Net interest income increased $32 million (10.6 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 and a decline in loan fees. Total noninterest income increased $22 million (2.8 percent) year-over-year, primarily due to increased transaction volumes across all products. Total noninterest expense increased $16 million (3.4 percent), driven by higher compensation and employee benefits expense and credit card-related professional services projects, partially offset by the timing of marketing and business development expense. The provision for credit losses decreased $187 million (37.9 percent) due to lower net charge-offs and a favorable change in the reserve allocation due to improved loss rates.

Payment Services’ contribution in the third quarter of 2010 was $34 million (18.8 percent) higher than the second 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 $17 million (1.5 percent) over the second quarter of 2010. Total noninterest income was $14 million (1.8 percent) higher on a linked quarter basis, principally due to higher transaction volumes, primarily in corporate payment products. Net interest income increased $3 million (.9 percent) due to wider loan spreads and higher volumes, partially offset by the cost of rebates on the government card program. Total noninterest expense increased $17 million (3.6 percent) on a linked quarter basis, due to higher

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U.S. Bancorp Reports Third quarter 2010 Results
October 20, 2010
Page 25

compensation and employee benefits expense and processing costs and an increase in professional services and marketing programs. The provision for credit losses decreased $51 million (14.2 percent) due to lower net charge-offs and a reduction in the reserve allocation, as the outlook for future losses on the credit card portfolios moderated.

Treasury and Corporate Supportincludes the Company’s investment portfolios, funding, 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 $260 million in the third quarter of 2010, compared with net income of $211 million in the third quarter of 2009 and net income of $269 million in the second quarter of 2010. Net interest income increased $128 million (46.7 percent) over the third 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 by $19 million, year-over-year, primarily due to lower securities impairments, partially offset by the impact of the third quarter of 2009 gain related to the Company’s investment in Visa Inc. Total noninterest expense increased $66 million (40.5 percent) as a result of higher compensation and employee benefits expense, increased costs related to affordable housing and other tax-advantaged projects and litigation-related expenses.

Net income in the third quarter of 2010 was lower on a linked quarter basis due to a decrease in total net revenue, partially offset by lower total noninterest expense. Total net revenue was lower by $62 million (12.8 percent) as net interest income declined by $29 million (6.7 percent), principally due to the Company’s asset/liability position. Total noninterest income declined by $33 million (63.5 percent) on a linked quarter basis, largely due to lower syndication revenue on tax-advantaged transactions, lower customer derivative revenue and the impact of the second quarter of 2010 gain related to the Company’s investment in Visa Inc., partially offset by lower securities impairments. The $36 million (13.6 percent) decrease in total noninterest expense from the second quarter of 2010 was primarily due to a reduction in conversion costs related to the FBOP acquisition and the impact of debt extinguishment costs in the prior quarter, partially offset by an increase in the Company’s contribution to its charitable foundation.

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.

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U.S. Bancorp Reports Third quarter 2010 Results
October 20, 2010
Page 26

On Wednesday, October 20, 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 13138356. 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, October 20th, and will run through Wednesday, October 27th, 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 13138356. 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 $291 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 3,013 banking offices in 24 states and 5,323 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.

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U.S. Bancorp Reports Third quarter 2010 Results
October 20, 2010
Page 27

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 is likely to be impacted by effects of recently enacted and future legislation and regulation. 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, residual value risk, market risk, operational risk, interest rate risk, and liquidity 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.

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U.S. Bancorp Reports Third quarter 2010 Results
October 20, 2010
Page 28

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.

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U.S. Bancorp

Consolidated Statement of Income


	Three Months Ended						Nine Months Ended
(Dollars and Shares in Millions, Except Per Share Data)	September 30,						September 30,
(Unaudited)	2010			2009			2010			2009

Interest Income
Loans	$	2,560		$	2,373		$	7,580		$	7,068
Loans held for sale		71			87			162			221
Investment securities		400			374			1,204			1,210
Other interest income		46			23			119			65

Total interest income		3,077			2,857			9,065			8,564
Interest Expense
Deposits		231			299			696			937
Short-term borrowings		149			138			414			412
Long-term debt		273			313			822			1,007

Total interest expense		653			750			1,932			2,356

Net interest income		2,424			2,107			7,133			6,208
Provision for credit losses		995			1,456			3,444			4,169

Net interest income after provision for credit losses		1,429			651			3,689			2,039
Noninterest Income
Credit and debit card revenue		274			267			798			782
Corporate payment products revenue		191			181			537			503
Merchant processing services		318			300			930			836
ATM processing services		105			103			318			309
Trust and investment management fees		267			293			798			891
Deposit service charges		160			256			566			732
Treasury management fees		139			141			421			420
Commercial products revenue		197			157			563			430
Mortgage banking revenue		310			276			753			817
Investment products fees and commissions		27			27			82			82
Securities gains (losses), net		(9	)		(76	)		(64	)		(293	)
Other		131			168			436			427

Total noninterest income		2,110			2,093			6,138			5,936
Noninterest Expense
Compensation		973			769			2,780			2,319
Employee benefits		171			134			523			429
Net occupancy and equipment		229			203			682			622
Professional services		78			63			209			174
Marketing and business development		108			137			254			273
Technology and communications		186			175			557			487
Postage, printing and supplies		74			72			223			218
Other intangibles		90			94			278			280
Other		476			406			1,392			1,251

Total noninterest expense		2,385			2,053			6,898			6,053

Income before income taxes		1,154			691			2,929			1,922
Applicable income taxes		260			86			620			287

Net income		894			605		$	2,309			1,635
Net (income) loss attributable to noncontrolling interests		14			(2	)		34			(32	)

Net income attributable to U.S. Bancorp	$	908		$	603		$	2,343		$	1,603

Net income applicable to U.S. Bancorp common shareholders	$	871		$	583		$	2,381		$	1,223


Earnings per common share	$	.46		$	.31		$	1.25		$	.67
Diluted earnings per common share	$	.45		$	.30		$	1.24		$	.66
Dividends declared per common share	$	.05		$	.05		$	.15		$	.15
Average common shares outstanding		1,913			1,908			1,911			1,832
Average diluted common shares outstanding		1,920			1,917			1,920			1,840

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U.S. Bancorp

Consolidated Ending Balance Sheet


	September 30,			December 31,			September 30,
(Dollars in Millions)	2010			2009			2009
	(Unaudited)						(Unaudited)
Assets
Cash and due from banks	$	4,470		$	6,206		$	5,016
Investment securities
Held-to-maturity		557			47			48
Available-for-sale		48,406			44,721			42,288
Loans held for sale		8,438			4,772			6,030
Loans
Commercial		47,627			48,792			50,712
Commercial real estate		34,318			34,093			33,896
Residential mortgages		28,587			26,056			24,947
Retail		65,047			63,955			63,642

Total loans, excluding covered loans		175,579			172,896			173,197
Covered loans		19,038			21,859			9,549

Total loans		194,617			194,755			182,746
Less allowance for loan losses		(5,321	)		(5,079	)		(4,825	)

Net loans		189,296			189,676			177,921
Premises and equipment		2,304			2,263			2,251
Goodwill		9,024			9,011			8,597
Other intangible assets		2,856			3,406			3,158
Other assets		25,303			21,074			19,749

Total assets	$	290,654		$	281,176		$	265,058


Liabilities and Shareholders’ Equity
Deposits
Noninterest-bearing	$	40,750		$	38,186		$	34,250
Interest-bearing		118,863			115,135			104,950
Time deposits greater than $100,000		27,793			29,921			30,555

Total deposits		187,406			183,242			169,755
Short-term borrowings		34,341			31,312			28,166
Long-term debt		30,353			32,580			33,249
Other liabilities		8,611			7,381			8,008

Total liabilities		260,711			254,515			239,178
Shareholders’ equity
Preferred stock		1,930			1,500			1,500
Common stock		21			21			21
Capital surplus		8,310			8,319			8,308
Retained earnings		26,147			24,116			23,629
Less treasury stock		(6,363	)		(6,509	)		(6,534	)
Accumulated other comprehensive income (loss)		(894	)		(1,484	)		(1,753	)

Total U.S. Bancorp shareholders’ equity		29,151			25,963			25,171
Noncontrolling interests		792			698			709

Total equity		29,943			26,661			25,880

Total liabilities and equity	$	290,654		$	281,176		$	265,058

Page 30

U.S. Bancorp

Non-Regulatory Capital Ratios


	September 30,			June 30,			March 31,			December 31,			September 30,
(Dollars in Millions, Unaudited)	2010		*	2010			2010			2009			2009

Total equity	$	29,943		$	28,940		$	27,388		$	26,661		$	25,880
Preferred stock		(1,930	)		(1,930	)		(1,500	)		(1,500	)		(1,500	)
Noncontrolling interests		(792	)		(771	)		(679	)		(698	)		(709	)
Goodwill (net of deferred tax liability)		(8,429	)		(8,425	)		(8,374	)		(8,482	)		(8,161	)
Intangible assets, other than mortgage servicing rights		(1,434	)		(1,525	)		(1,610	)		(1,657	)		(1,604	)

Tangible common equity (a)		17,358			16,289			15,225			14,324			13,906

Tier 1 capital, determined in accordance with prescribed regulatory requirements		24,908			24,021			23,278			22,610			21,990
Trust preferred securities		(3,949	)		(3,949	)		(4,524	)		(4,524	)		(4,024	)
Preferred stock		(1,930	)		(1,930	)		(1,500	)		(1,500	)		(1,500	)
Noncontrolling interests, less preferred stock not eligible for Tier 1 capital		(694	)		(694	)		(692	)		(692	)		(692	)

Tier 1 common equity (b)		18,335			17,448			16,562			15,894			15,774

Total assets		290,654			283,243			282,428			281,176			265,058
Goodwill (net of deferred tax liability)		(8,429	)		(8,425	)		(8,374	)		(8,482	)		(8,161	)
Intangible assets, other than mortgage servicing rights		(1,434	)		(1,525	)		(1,610	)		(1,657	)		(1,604	)

Tangible assets (c)		280,791			273,293			272,444			271,037			255,293
Risk-weighted assets, determined in accordance with prescribed regulatory requirements (d)		242,490			237,145			234,042			235,233			231,993

Ratios
Tangible common equity to tangible assets (a)/(c)		6.2	%		6.0	%		5.6	%		5.3	%		5.4	%
Tier 1 common equity to risk-weighted assets (b)/(d)		7.6			7.4			7.1			6.8			6.8
Tangible common equity to risk-weighted assets (a)/(d)		7.2			6.9			6.5			6.1			6.0


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

Page 31

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