 U.S. Bancorp 2Q11 Earnings Conference Call U.S. Bancorp 2Q11 Earnings Conference Call July 20, 2011 Richard K. Davis Chairman, President and CEO Andy Cecere Vice Chairman and CFO Exhibit 99.2 |
 2 Forward-looking Statements and Additional Information The following information appears in accordance with the Private Securities Litigation Reform Act of 1995: This presentation contains forward-looking statements about U.S. Bancorp. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements and are based on the information available to, and assumptions and estimates made by, management as of the date 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. Continued 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, 2010, 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. This presentation includes non-GAAP financial measures to describe U.S. Bancorp’s performance. The reconciliations of those measures to GAAP measures are provided within or in the appendix of the presentation. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. |
 3 2Q11 Earnings Conference Call 2Q11 Highlights Net income of $1.2 billion; $0.60 per diluted common share Total net revenue of $4.7 billion, up 3.8% vs. 2Q10 • Net interest income growth of 5.6% vs. 2Q10 • Noninterest income growth of 1.7% vs. 2Q10 Average loan growth of 4.0% (3.5% excluding acquisitions) vs. 2Q10 and average loan growth of 0.6% (0.5% excluding acquisitions) vs. 1Q11 Strong average low cost deposit 1 growth of 17.1% (12.3% excluding acquisitions) vs. 2Q10 and average low cost deposit growth of 3.7% vs. 1Q11 (3.5% excluding acquisitions) Net charge-offs declined 7.2% vs. 1Q11 and nonperforming assets (excluding covered assets) declined 6.2% vs. 1Q11 Capital generation continues to strengthen capital position • Tier 1 common equity ratio of 8.4% (8.1% under anticipated Basel III guidelines) • Tier 1 capital ratio of 11.0% 1 Low cost deposits include noninterest-bearing, interest checking, money market and savings deposits |
 4 2Q11 Earnings Conference Call Performance Ratios 15.9% 14.5% 13.7% 12.8% 13.4% 11.8%* 1.54% 1.38% 1.31% 1.26% 1.09% 0% 5% 10% 15% 20% 2Q10 3Q10 4Q10 1Q11 2Q11 0% 1% 2% 3% 4% 51.6% 51.1% 52.5% 51.9% 52.4% 3.67% 3.69% 3.83% 3.91% 3.90% 30% 40% 50% 60% 70% 2Q10 3Q10 4Q10 1Q11 2Q11 1% 2% 3% 4% 5% ROCE and ROA Efficiency Ratio and Net Interest Margin Return on Avg Common Equity Return on Avg Assets Efficiency Ratio Net Interest Margin Efficiency ratio computed as noninterest expense divided by the sum of net interest income on a taxable-equivalent basis and noninterest income excluding securities gains (losses) net * Adjusted for ITS transaction (reported net income $862 million - $118 million ITS transaction equity impact + $13 million debt extinguishment costs (net of tax) = adjusted net income of $757 million) |
 5 2Q11 Earnings Conference Call 2Q11 1Q11 4Q10 3Q10 2Q10 Shareholders' equity 32.5 $ 30.5 $ 29.5 $ 29.2 $ 28.2 $ Tier 1 capital 27.8 26.8 25.9 24.9 24.0 Total risk-based capital 35.1 34.2 33.0 32.3 31.9 Tier 1 common equity ratio 8.4% 8.2% 7.8% 7.6% 7.4% Tier 1 capital ratio 11.0% 10.8% 10.5% 10.3% 10.1% Total risk-based capital ratio 13.9% 13.8% 13.3% 13.3% 13.4% Leverage ratio 9.2% 9.0% 9.1% 9.0% 8.8% Tangible common equity ratio 6.5% 6.3% 6.0% 6.2% 6.0% Tangible common equity as a percent of risk-weighted assets 8.0% 7.6% 7.2% 7.2% 6.9% Capital Position $ in billions |
 6 2Q11 Earnings Conference Call 150 170 190 210 230 2Q10 3Q10 4Q10 1Q11 2Q11 Loans Deposits Loan and Deposit Growth Average Balances Year-Over-Year Growth 2Q11 Acquisition Adjusted Loan Growth = 3.5% Deposit Growth = 9.6% 2.4% $197.6 4.0% $198.8 4.0% $191.2 5.8% $192.5 2.0% $195.5 11.9% $204.3 14.2% $209.4 12.3% $183.3 9.8% $182.7 5.2% $190.3 $ in billions |
 7 2Q11 Earnings Conference Call Taxable-equivalent basis Revenue Growth Year-Over-Year Growth 8.7% 7.9% 7.9% 4.6% 3.8% $ in millions 4,519 4,587 4,721 4,519 4,690 3,000 3,500 4,000 4,500 5,000 2Q10 3Q10 4Q10 1Q11 2Q11 |
 8 2Q11 Earnings Conference Call Credit Quality $ in millions, linked quarter change * Excluding Covered Assets (assets subject to loss sharing agreements with FDIC), 1Q11 change in NPAs excludes FCB acquisition ($287 million) Change in Net Charge-offs Change in Nonperforming Assets* NCO $ Change (Left Scale) NCO % Change (Right Scale) NPA $ Change (Left Scale) NPA % Change (Right Scale) |
 9 2Q11 Earnings Conference Call Credit Quality - Outlook The Company expects the level of Net Charge-offs and Nonperforming Assets to trend lower during 3Q11 -8% -9% -1% -8% 18% 23% 16% 36% 28% 0% 6% 0% -1% -16% -40.0% -20.0% 0.0% 20.0% 40.0% 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 Delinquencies* Changes in Criticized Assets* * Excluding Covered Assets (assets subject to loss sharing agreements with FDIC) 1Q11 change in criticized assets excludes FCB acquisition 0.72% 0.84% 1.04% 1.00% 1.11% 1.34% 1.48% 1.44% 1.45% 1.70% 1.62% 1.18% 1.04% 1.06% 0.44% 0.52% 0.61% 0.66% 0.72% 0.78% 0.88% 0.78% 0.72% 0.68% 0.56% 0.46% 0.41% 0.43% 0.0% 0.5% 1.0% 1.5% 2.0% 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 30 to 89 % 90+ % |
 10 2Q11 Earnings Conference Call Credit Quality - Reserves Allowance for Credit Losses Allowance for Credit Losses Provision/NCO's $ in millions 77% 94% 97% 100% 102% 115% 125% 140% 150% 167% 200% 150% 151% 166% 100% 0 1,500 3,000 4,500 6,000 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 60% 95% 130% 165% 200% 5,536 5,439 5,264 4,986 4,571 4,105 3,639 2,898 2,648 2,435 2,260 5,540 5,531 5,498 5,308 |
 11 2Q11 Earnings Conference Call Earnings Summary $ in millions, except per-share data Taxable-equivalent basis YTD YTD 2Q11 1Q11 2Q10 vs 1Q11 vs 2Q10 2011 2010 % B/(W) Net Interest Income 2,544 $ 2,507 $ 2,409 $ 1.5 5.6 5,051 $ 4,812 $ 5.0 Noninterest Income 2,146 2,012 2,110 6.7 1.7 4,158 4,028 3.2 Total Revenue 4,690 4,519 4,519 3.8 3.8 9,209 8,840 4.2 Noninterest Expense 2,425 2,314 2,377 (4.8) (2.0) 4,739 4,513 (5.0) Operating Income 2,265 2,205 2,142 2.7 5.7 4,470 4,327 3.3 Net Charge-offs 747 805 1,114 7.2 32.9 1,552 2,249 31.0 Excess Provision (175) (50) 25 -- -- (225) 200 -- Income before Taxes 1,693 1,450 1,003 16.8 68.8 3,143 1,878 67.4 Applicable Income Taxes 514 421 251 (22.1) (104.8) 935 463 (101.9) Noncontrolling Interests 24 17 14 41.2 71.4 41 20 105.0 Net Income 1,203 1,046 766 15.0 57.0 2,249 1,435 56.7 Preferred Dividends/Other 36 43 (96) 16.3 -- 79 (75) -- NI to Common 1,167 $ 1,003 $ 862 $ 16.4 35.4 2,170 $ 1,510 $ 43.7 Diluted EPS 0.60 $ 0.52 $ 0.45 $ 15.4 33.3 1.12 $ 0.79 $ 41.8 Average Diluted Shares 1,929 1,928 1,921 (0.1) (0.4) 1,929 1,920 (0.5) % B/(W) |
 12 2Q11 Earnings Conference Call 2Q11 Results - Key Drivers vs. 2Q10 Net Revenue growth of 3.8% • Net interest income growth of 5.6%; net interest margin of 3.67% vs. 3.90% • Noninterest income growth of 1.7% Noninterest expense growth of 2.0% Provision for credit losses lower by $567 million • Net charge-offs lower by $367 million • Provision lower than NCOs by $175 million vs. provision in excess of NCOs of $25 million in 2Q10 vs. 1Q11 Net Revenue growth of 3.8% (4.9% excluding securities losses and 1Q11 gain related to FCB acquisition) • Net interest income growth of 1.5%; net interest margin of 3.67% vs. 3.69% • Noninterest income growth of 6.7% (9.3% excluding securities losses and 1Q11 gain related to FCB acquisition) Noninterest expense growth of 4.8% Provision for credit losses lower by $183 million • Net charge-offs lower by $58 million • Provision lower than NCOs by $175 million vs. provision lower than NCOs by $50 million in 1Q11 |
 13 2Q11 Earnings Conference Call YTD YTD 2Q11 1Q11 2Q10 2011 2010 Revenue Items Securities gains (losses), net (8) $ (5) $ (21) $ (13) $ (55) $ Gain related to FCB acquisition - 46 - 46 - Expense Items ITS transaction debt extinguishment and expense - - 18 - 18 Incremental Provision (175) (50) 25 (225) 200 ITS transaction equity impact (net of tax)* - - 118 - 118 Notable Items $ in millions * Not a component of net income, but does impact net income applicable to U.S. Bancorp common shareholders and earnings per diluted common share |
 14 2Q11 Earnings Conference Call Net Interest Income 2,409 2,477 2,499 2,507 2,544 3.90% 3.91% 3.83% 3.69% 3.67% 1,500 1,800 2,100 2,400 2,700 2Q10 3Q10 4Q10 1Q11 2Q11 2.0% 3.0% 4.0% 5.0% 6.0% Net Interest Income Net Interest Margin Net Interest Income Key Points $ in millions Taxable-equivalent basis vs. 2Q10 Average earning assets grew by $30.1 billion, or 12.2% (11.6% excluding acquisitions) Net interest margin lower by 23 bp (3.67% vs. 3.90%) driven by: • Higher balances in lower yielding investment securities • Higher cash position at the Federal Reserve vs. 1Q11 Average earning assets grew by $3.6 billion, or 1.3% (1.2% excluding acquisitions) Net interest margin lower by 2 bp (3.67% vs. 3.69%) driven by: • Higher balances in lower yielding investment securities, offset by lower cash position at the Federal Reserve Year-Over-Year Growth 14.5% 14.8% 5.9% 4.3% 5.6% |
 2Q11 Earnings Conference Call Average Loans 8.0% 3.0% (4.5%) (8.7%) (14.3%) 3.9% 3.0% 1.6% 1.1% 1.3% 22.0% 20.3% 15.8% 14.3% 11.9% 0.7% 1.0% 2.3% 3.4% 3.2% 0 60 120 180 240 2Q10 3Q10 4Q10 1Q11 2Q11 Average Loans Key Points $ in billions Year-Over-Year Growth 4.0% 5.8% 2.0% 2.4% 4.0% $191.2 $192.5 $195.5 $197.6 $198.8 Retail Res Mtg Covered CRE Commercial vs. 2Q10 Average total loans grew by $7.6 billion, or 4.0% (3.5% excluding acquisitions) Average total loans, excluding covered loans, were higher by 6.7% Average commercial loans increased $3.7 billion, or 8.0% (7.8% excluding acquisitions) vs. 1Q11 Average total loans grew by $1.2 billion, or 0.6% (0.5% excluding acquisitions) Average total loans, excluding covered loans, were higher by 1.2% Average commercial loans grew by $1.3 billion, or 2.8% Covered Commercial CRE Res Mtg Retail 15 |
 16 2Q11 Earnings Conference Call Average Deposits (10.8%) (0.8%) (7.4%) 1.9% 5.1% 47.7% 13.8% 2.9% 11.6% 11.8% 19.9% 17.8% 17.5% 17.2% 17.3% 6.8% 7.4% 4.8% 16.3% 22.1% 0 60 120 180 240 2Q10 3Q10 4Q10 1Q11 2Q11 Average Deposits Key Points $ in billions Year-Over-Year Growth 12.3% 9.8% 5.2% 11.9% 14.2% $183.3 $182.7 $190.3 $204.3 $209.4 Noninterest -bearing Checking & Savings Time Money Market vs. 2Q10 Average total deposits increased by $26.1 billion, or 14.2% (9.6% excluding acquisitions) Average low cost deposits (NIB, interest checking, money market and savings), increased by $23.9 billion, or 17.1% (12.3% excluding acquisitions) vs. 1Q11 Average total deposits increased by $5.1 billion, or 2.5% (2.3% excluding acquisitions) Average low cost deposits increased by $5.8 billion, or 3.7% (3.5% excluding acquisitions) Time Money Market Checking & Savings Noninterest-bearing |
 17 2Q11 Earnings Conference Call 2Q10 3Q10 4Q10 1Q11 2Q11 Valuation losses (21) $ (9) $ (14) $ (5) $ (8) $ Other non-operating gains - - 103 46 - Total (21) $ (9) $ 89 $ 41 $ (8) $ Notable Noninterest Income Items All Other Mortgage Service Charges Trust & Inv Mgmt Payments Noninterest Income 9.4% (1.6%) (7.1%) (3.4%) 5.9% 0 700 1400 2100 2800 2Q10 3Q10 4Q10 1Q11 2Q11 Noninterest Income Key Points $ in millions Year-Over-Year Growth 2.7% 0.8% 10.2% 4.9% 1.7% $2,146 $2,110 $2,110 $2,222 $2,012 Trust & Inv Mgmt Service Charges All Other Mortgage Payments Payments = credit and debit card revenue, corporate payment products revenue and merchant processing services; Service charges = deposit service charges, treasury management fees and ATM processing services vs. 2Q10 Noninterest income grew by $36 million, or 1.7%, driven by: • Payments revenue (5.9% growth) • Commercial products revenue (6.3% growth) • Lower deposit service charges due to Reg E and fee policy changes • Mortgage banking revenue decrease of $4 million 24% decrease in production volume Favorable net change in MSR valuation and related hedging (hedge $81 2Q11 vs. $55 2Q10) vs. 1Q11 Noninterest income grew by $134 million, or 6.7%, driven by: • Payments revenue (8.9% growth) and deposit service charges (13.3% growth) both seasonally higher • Commercial products revenue (14.1% growth) • Mortgage banking revenue increase of $40 million 33% decrease in production volume, higher application volume Favorable net change in MSR valuation and related hedging (hedge $81 2Q11 vs. $62 1Q11) Notable items, including net securities losses, unfavorable by $49 million |
 18 2Q11 Earnings Conference Call 2Q10 3Q10 4Q10 1Q11 2Q11 ITS transaction 18 $ - $ - $ - $ - $ Total 18 $ - $ - $ - $ - $ Notable Noninterest Expense Items Noninterest Expense (14.4%) 1.6% 6.0% 10.2% 8.6% 0 700 1400 2100 2800 2Q10 3Q10 4Q10 1Q11 2Q11 Noninterest Expense Key Points $ in millions Year-Over-Year Growth 11.6% 16.2% 11.5% 8.3% 2.0% $2,425 $2,377 $2,385 $2,485 $2,314 Occupancy & Equipment Prof Services, Marketing & PPS All Other Tech & Comm Compensation & Benefits vs. 2Q10 Noninterest expense was higher by $48 million, or 2.0%, majority of variance driven by: • Increased compensation (6.1%) and employee benefits (22.1%) • Increase in net occupancy & equipment (10.2%) related to business expansion initiatives and technology-related projects • Other expense lower primarily due to favorable changes in other loan expense, integration expenses, and costs related to insurance and litigation matters, partially offset by an increase in FDIC deposit insurance vs. 1Q11 Noninterest expense was higher by $111 million, or 4.8%, majority of variance driven by: • Higher compensation (4.7%) due to higher incentives and commissions • Professional services and marketing and business development expenses higher primarily due to timing of initiatives and seasonally lower 1Q11 • Other expense higher mainly due to FDIC deposit insurance expense and seasonally higher investments in affordable housing and other tax-advantaged projects All Other Tech & Communications Prof Svcs, Marketing and PPS Occupancy & Equip Compensation & Benefits |
 19 2Q11 Earnings Conference Call Mortgage Repurchase Mortgages Repurchased and Make-whole Payments Mortgage Representation and Warranties Reserve $ in millions 2Q11 1Q11 4Q10 3Q10 2Q10 Beginning Reserve $181 $180 $147 $101 $73 Net Realized Losses (43) (32) (27) (24) (20) Additions to Reserve 35 33 60 70 48 Ending Reserve $173 $181 $180 $147 $101 Mortgages repurchased and make-whole payments $72 $90 $69 $53 $27 Repurchase activity lower than peers due to: • Conservative credit and underwriting culture • Disciplined origination process - primarily conforming loans ( 95% sold to GSEs) Do not participate in private placement securitization market Outstanding repurchase and make- whole requests balance = $123 million Repurchase requests expected to decline over the next few quarters |
 20 2Q11 Earnings Conference Call Regulatory Environment Existing regulatory oversight actions Future regulatory oversight actions • Dodd-Frank Wall Street Reform and Consumer Protection Act Consumer Financial Protection Bureau • Residential mortgage foreclosure policy and procedures FY 2010 Annual Actual Run Rate Overdraft Legislation $255 $440 - $480 Pricing and Policy Changes Card Act $160 $250 Net Interest Margin and Fee Income Durbin Amendment -- $300* $ in millions, estimated reduction to revenue * 4Q11 impact approximately $75 million ($0.24 per average transaction starting 4Q11) |
 21 2Q11 Earnings Conference Call Positioned to Win |
 22 2Q11 Earnings Conference Call Appendix |
 23 2Q11 Earnings Conference Call Credit Quality - Commercial Loans 40,095 40,726 41,700 42,683 44,135 2.23% 1.49% 1.11% 1.19% 0.75% 0 15,000 30,000 45,000 60,000 2Q10 3Q10 4Q10 1Q11 2Q11 0.0% 1.5% 3.0% 4.5% 6.0% Average Loans Net Charge-offs Ratio Average Loans and Net Charge-offs Ratios Key Statistics Comments Delinquencies and nonperforming loans continue to improve Utilization rates remain historically low although loan balances grew 2Q10 1Q11 2Q11 Average Loans 40,095 42,683 44,135 30-89 Delinquencies 0.73% 0.58% 0.46% 90+ Delinquencies 0.24% 0.13% 0.09% Nonperforming Loans 1.65% 1.02% 0.78% 20% 25% 30% 35% 40% 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 Revolving Line Utilization Trend $ in millions |
 24 2Q11 Earnings Conference Call Credit Quality - Commercial Leases 6,245 6,058 6,012 6,030 5,919 1.41% 1.18% 1.12% 0.94% 0.88% 0 2,000 4,000 6,000 8,000 2Q10 3Q10 4Q10 1Q11 2Q11 0.0% 1.5% 3.0% 4.5% 6.0% Average Loans Net Charge-offs Ratio Average Loans and Net Charge-offs Ratios Key Statistics Comments Net charge-offs improved, declining to 0.88% for the quarter Credit quality continues to improve as delinquencies and nonperforming loans declined 2Q10 1Q11 2Q11 Average Loans 6,245 6,030 5,919 30-89 Delinquencies 1.55% 1.18% 1.00% 90+ Delinquencies 0.03% 0.03% 0.02% Nonperforming Loans 1.87% 0.90% 0.73% $ in millions Equipment Finance $2,376 Small Ticket $3,543 |
 25 2Q11 Earnings Conference Call Credit Quality - Commercial Real Estate 34,164 34,190 34,577 35,179 35,499 2.67% 2.40% 2.51% 1.44% 1.85% 0.90% 0.59% 1.33% 1.72% 1.11% 5.67% 4.61% 6.54% 4.56% 7.31% 0 10,000 20,000 30,000 40,000 2Q10 3Q10 4Q10 1Q11 2Q11 0.0% 2.5% 5.0% 7.5% 10.0% Average Loans and Net Charge-offs Ratios Key Statistics Comments Early and late stage delinquencies, as well as nonperforming loans, all decreased on a linked quarter basis Net charge-offs increased on a linked quarter basis, but have decreased 28% on a year-over- year basis 2Q10 1Q11 2Q11 Average Loans 34,164 35,179 35,499 30-89 Delinquencies 0.98% 0.74% 0.45% 90+ Delinquencies 0.09% 0.02% 0.01% Nonperforming Loans 4.75% 4.15% 3.84% Performing TDRs 69 184 225 $ in millions Multi-family $1,670 Other $1,049 Office $870 A&D Construction $951 Retail $965 Condo Construction $398 Residential Construction $1,167 Investor $17,190 Owner Occupied $11,239 CRE Mortgage CRE Construction Average Loans Net Charge-offs Ratio NCO Ratio - Comm Mtg NCO Ratio - Construction TDR = troubled debt restructuring |
 26 2Q11 Earnings Conference Call 1,939 1,890 1,804 1,747 1,672 0 600 1,200 1,800 2,400 2Q10 3Q10 4Q10 1Q11 2Q11 Credit Quality - Residential Mortgage 26,821 27,890 29,659 31,777 32,734 2.06% 1.88% 1.75% 1.65% 1.46% 0 9,000 18,000 27,000 36,000 2Q10 3Q10 4Q10 1Q11 2Q11 0.0% 1.5% 3.0% 4.5% 6.0% Average Loans Net Charge-offs Ratio Average Loans and Net Charge-offs Ratios Key Statistics Comments Strong growth in high quality originations (weighted average FICO 753, weighted average LTV 71%) as average loans increased 3.0% over 1Q11 driven by demand for refinancing Continue to help home owners by successfully modifying 5,111 loans (owned and serviced) in 2Q11, representing $955 million in balances Nonperforming loans declined as delinquency and foreclosure inventory improved 2Q10 1Q11 2Q11 Average Loans 26,821 31,777 32,734 30-89 Delinquencies 1.75% 1.22% 1.11% 90+ Delinquencies 1.85% 1.33% 1.13% Nonperforming Loans 2.23% 2.12% 2.03% Residential Mortgage Performing TDRs $ in millions |
 27 2Q11 Earnings Conference Call Credit Quality - Home Equity 19,332 19,289 19,119 18,801 18,634 1.64% 1.75% 1.72% 1.62% 1.64% 0 6,000 12,000 18,000 24,000 2Q10 3Q10 4Q10 1Q11 2Q11 0.0% 1.5% 3.0% 4.5% 6.0% Average Loans Net Charge-offs Ratio Average Loans and Net Charge-offs Ratios Key Statistics Comments Strong credit quality portfolio (weighted average FICO 747, weighted average CLTV 72%) originated primarily through the retail branch network to existing bank customers on their primary residence Loan demand remains soft for home equity products Early and late stage delinquencies continue to improve 2Q10 1Q11 2Q11 Average Loans 19,332 18,801 18,634 30-89 Delinquencies 0.89% 0.81% 0.78% 90+ Delinquencies 0.68% 0.71% 0.65% Nonperforming Loans 0.16% 0.23% 0.22% Traditional: 87% Wtd Avg LTV: 71% NCO: 1.22% Consumer Finance: 13% Wtd Avg LTV: 80% NCO: 4.37% $ in millions |
 28 2Q11 Earnings Conference Call 2Q10 1Q11 2Q11 Average Loans 16,329 16,124 15,884 30-89 Delinquencies 1.86% 1.44% 1.34% 90+ Delinquencies 2.38% 1.62% 1.32% Nonperforming Loans 1.04% 1.61% 1.59% Credit Quality - Credit Card 16,329 16,510 16,403 16,124 15,884 7.79% 7.11% 6.65% 6.21% 5.45% 5.62% 6.45% 7.21% 7.84% 8.53% 0 5,000 10,000 15,000 20,000 2Q10 3Q10 4Q10 1Q11 2Q11 0.0% 4.0% 8.0% 12.0% 16.0% Average Loans and Net Charge-offs Ratios Key Statistics Comments Both early and late stage delinquencies continue to improve Net charge-offs declined for the fourth consecutive quarter Nonperforming loans were stable in the second quarter $ in millions * Excluding portfolio purchases where the acquired loans were recorded at fair value at the purchase date Average Loans Net Charge-offs Ratio Net Charge-offs Ratio Excluding Acquired Portfolios* Core Portfolio $15,403 Portfolios Acquired at Fair Value $481 |
 2Q11 Earnings Conference Call Credit Quality - Retail Leasing 4,364 4,289 4,459 4,647 4,808 0.37% 0.19% 0.09% 0.09% 0.00% 0 2,000 4,000 6,000 8,000 2Q10 3Q10 4Q10 1Q11 2Q11 0.0% 1.0% 2.0% 3.0% 4.0% Average Loans Net Charge-offs Ratio Average Loans and Net Charge-offs Ratios Key Statistics Comments Average loans continue to increase as demand for new auto leases remains strong Retail leasing delinquencies continue to improve, reaching pre-recession levels Strong used auto values continue to reduce end of term risk and net charge-offs 2Q10 1Q11 2Q11 Average Loans 4,364 4,647 4,808 30-89 Delinquencies 0.46% 0.26% 0.20% 90+ Delinquencies 0.05% 0.04% 0.02% Nonperforming Loans --% --% --% $ in millions 90 100 110 120 130 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 Manheim Used Vehicle Value Index* * Manheim Used Vehicle Value Index source: www.manheimconsulting.com, January 1995 = 100, quarter value = average monthly ending value 29 |
 30 2Q11 Earnings Conference Call Credit Quality - Other Retail 23,357 24,281 24,983 24,691 24,498 1.70% 1.65% 1.45% 1.33% 1.16% 0 7,000 14,000 21,000 28,000 2Q10 3Q10 4Q10 1Q11 2Q11 0.0% 1.5% 3.0% 4.5% 6.0% Average Loans Net Charge-offs Ratio Average Loans and Net Charge-offs Ratios Key Statistics Comments Average balances increased 4.9% over 2Q10 as demand for auto loans remains strong Net charge-offs and delinquencies continue to decline while nonperforming loans remain stable 2Q10 1Q11 2Q11 Average Loans 23,357 24,691 24,498 30-89 Delinquencies 0.85% 0.63% 0.62% 90+ Delinquencies 0.32% 0.25% 0.20% Nonperforming Loans 0.13% 0.13% 0.13% Installment $5,297 Auto Loans $10,974 Revolving Credit $3,336 Student Lending $4,891 $ in millions |
 31 2Q11 Earnings Conference Call $ in millions 2Q11 1Q11 4Q10 3Q10 2Q10 Total equity 33,341 $ 31,335 $ 30,322 $ 29,943 $ 28,940 $ Preferred stock (2,606) (1,930) (1,930) (1,930) (1,930) Noncontrolling interests (889) (828) (803) (792) (771) Goodwill (net of deferred tax liability) (8,300) (8,317) (8,337) (8,429) (8,425) Intangible assets (exclude mortgage servicing rights) (1,277) (1,342) (1,376) (1,434) (1,525) Tangible common equity (a) 20,269 18,918 17,876 17,358 16,289 Tier 1 Capital, determined in accordance with prescribed regulatory requirements using Basel I definition 27,795 26,821 25,947 24,908 24,021 Trust preferred securities (3,267) (3,949) (3,949) (3,949) (3,949) Preferred stock (2,606) (1,930) (1,930) (1,930) (1,930) Noncontrolling interests, less preferred stock not eligible for Tier I capital (695) (694) (692) (694) (694) Tier 1 common equity using Basel I definition (b) 21,227 20,248 19,376 18,335 17,448 Tier 1 capital, determined in accordance with prescribed regulatory requirements using anticipated Basel III definition 23,931 21,855 Preferred stock (2,606) (1,930) Noncontrolling interests of real estate investment trusts (667) (667) Tier 1 common equity using anticipated Basel III definition (c) 20,658 19,258 Total assets 320,874 311,462 307,786 290,654 283,243 Goodwill (net of deferred tax liability) (8,300) (8,317) (8,337) (8,429) (8,425) Intangible assets (exclude mortgage servicing rights) (1,277) (1,342) (1,376) (1,434) (1,525) Tangible assets (d) 311,297 301,803 298,073 280,791 273,293 Risk-weighted assets, determined in accordance with prescribed regulatory requirements using Basel I definition (e) 252,882 247,486 247,619 242,490 237,145 Risk-weighted assets using anticipated Basel III definitions (f) 256,205 250,931 Ratios Tangible common equity to tangible assets (a)/(d) 6.5% 6.3% 6.0% 6.2% 6.0% Tier 1 common equity to risk-weighted assets using Basel I definition (b)/(e) 8.4% 8.2% 7.8% 7.6% 7.4% Tier 1 common equity to risk-weighted assets using anticipated Basel III definition (c)/(f) 8.1% 7.7% Tangible common equity to risk-weighted assets (a)/(e) 8.0% 7.6% 7.2% 7.2% 6.9% 2Q11 risk-weighted assets are preliminary data, subject to change prior to filings with applicable regulatory agencies Anticipated Basel III definitions reflect adjustments for changes to the related elements as proposed in December 2010 by regulatory agencies Non-Regulatory Capital Ratios |
 U.S. Bancorp 2Q11 Earnings Conference Call U.S. Bancorp 2Q11 Earnings Conference Call July 20, 2011 |