SEC Filing | U.S. Bancorp

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Form 10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2012

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 1-6880

U.S. Bancorp

(Exact name of registrant as specified in its charter)

Delaware

41-0255900

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

800 Nicollet Mall, Minneapolis, Minnesota 55402

(Address of principal executive offices) (Zip Code)

(651) 446-3000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class		Name of each exchange on which registered
Common Stock, $.01 par value per share		New York Stock Exchange
Depositary Shares (each representing 1/100th interest in a share of Series A Non-Cumulative Perpetual Preferred Stock, par value $1.00)		New York Stock Exchange
Depositary Shares (each representing 1/1,000th interest in a share of Series B Non-Cumulative Perpetual Preferred Stock, par value $1.00)		New York Stock Exchange
Depositary Shares (each representing 1/1,000th interest in a share of Series D Non-Cumulative Perpetual Preferred Stock, par value $1.00)		New York Stock Exchange
Depositary Shares (each representing 1/1,000th interest in a share of Series F Non-Cumulative Perpetual Preferred Stock, par value $1.00)		New York Stock Exchange
Depositary Shares (each representing 1/1,000th interest in a share of Series G Non-Cumulative Perpetual Preferred Stock, par value $1.00)		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No þ

As of June 30, 2012, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $60.8 billion based on the closing sale price as reported on the New York Stock Exchange.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.



Class		Outstanding at January 31, 2013
Common Stock, $.01 par value per share		1,863,384,793

DOCUMENTS INCORPORATED BY REFERENCE


Document		Parts Into Which Incorporated
1.	Portions of the Annual Report to Shareholders for the Fiscal Year Ended December 31, 2012 (2012 Annual Report)	Parts I and II
2.	Portions of the Proxy Statement for the Annual Meeting of Shareholders to be held April 16, 2013 (Proxy Statement)	Part III

PART I

Item 1.

Business

General Business Description

U.S. Bancorp (“U.S. Bancorp” or the “Company”) is a multi-state financial services holding company headquartered in Minneapolis, Minnesota. U.S. Bancorp was incorporated in Delaware in 1929 and operates as a financial holding company and a bank holding company under the Bank Holding Company Act of 1956. U.S. Bancorp provides a full range of financial services, including lending and depository services, cash management, capital markets, and trust and investment management services. It also engages in credit card services, merchant and ATM processing, mortgage banking, insurance, brokerage and leasing.

U.S. Bancorp’s banking subsidiaries are engaged in the general banking business, principally in domestic markets. The subsidiaries range in size from $51 million to $254 billion in deposits and provide a wide range of products and services to individuals, businesses, institutional organizations, governmental entities and other financial institutions. Commercial and consumer lending services are principally offered to customers within the Company’s domestic markets, to domestic customers with foreign operations and to large national customers focusing on specific targeted industries. Lending services include traditional credit products as well as credit card services, leasing, financing and import/export trade, asset-backed lending, agricultural finance and other products. Depository services include checking accounts, savings accounts and time certificate contracts. Ancillary services such as capital markets, treasury management and receivable lock-box collection are provided to corporate customers. U.S. Bancorp’s bank and trust subsidiaries provide a full range of asset management and fiduciary services for individuals, estates, foundations, business corporations and charitable organizations.

U.S. Bancorp’s non-banking subsidiaries primarily offer investment and insurance products to the Company’s customers principally within its markets, and fund processing services to a broad range of mutual and other funds.

Banking and investment services are provided through a network of 3,084 banking offices principally operating in the Midwest and West regions of the United States. The Company operates a network of 5,065 ATMs and provides 24-hour, seven day a week telephone customer service. Mortgage banking services are provided through banking offices and loan production offices throughout the Company’s markets. Lending products may be originated through banking offices, indirect correspondents, brokers and other lending sources. The Company is also one of the largest providers of Visa^® corporate and purchasing card services and corporate trust services in the United States. A wholly-owned subsidiary, Elavon, Inc. (“Elavon”), provides merchant processing services directly to merchants and through a network of banking affiliations. Affiliates of Elavon provide similar merchant services in Canada, Mexico, Brazil and segments of Europe. These foreign operations are not significant to the Company.

On a full-time equivalent basis, as of December 31, 2012, U.S. Bancorp employed 64,486 people.

Competition

The commercial banking business is highly competitive. The Company’s subsidiary banks compete with other commercial banks and with other financial institutions, including savings and loan associations, mutual savings banks, finance companies, mortgage banking companies, credit unions and investment companies. In recent years, competition has increased from institutions not subject to the same regulatory restrictions as domestic banks and bank holding companies. Competition is based on a number of factors including, among others, customer service, quality and range of products and services offered, price, reputation, interest rates on loans and deposits, lending limits and customer convenience. The Company’s ability to continue to compete effectively also depends in large part on its ability to attract new employees and retain and motivate existing employees, while managing compensation and other costs.

Government Policies

The operations of the Company’s various operating units are affected by federal and state legislative changes and by policies of various regulatory authorities, including those of the numerous states in which they operate, the United States and foreign governments. These policies include, for example, statutory maximum legal lending rates, domestic monetary policies of the Board of Governors of the Federal Reserve System (the “Federal Reserve”), United States fiscal policy, international currency regulations and monetary policies and capital adequacy and liquidity constraints imposed by bank regulatory agencies.

Supervision and Regulation

U.S. Bancorp and its subsidiaries are subject to the extensive regulatory framework applicable to bank holding companies and their subsidiaries. This regulatory framework is intended primarily for the protection of depositors, the deposit insurance fund of the Federal Deposit Insurance Corporation (the “FDIC”), consumers and the stability of the financial system in the United States and the health of the national economy, and not for investors in bank holding companies such as the Company.

This section summarizes certain provisions of the principal laws and regulations applicable to the Company and its subsidiaries. The descriptions are not intended to be complete and are qualified in their entirety by reference to the full text of the statutes and regulations described below.

Substantial changes to the regulation of bank holding companies and their subsidiaries have occurred and will continue to occur as a result of the enactment in 2010 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). Changes in applicable law or regulation, and in their application by regulatory agencies, have had and will continue to have a material effect on the business and results of the Company and its subsidiaries.

Dodd-Frank Act The Dodd-Frank Act significantly changed the regulatory framework for financial services companies, and requires significant rulemaking and numerous studies and reports over the next several years. Among other things, it created a new Financial Stability Oversight Council (the “Council”) with broad authority to make recommendations covering enhanced prudential standards and more stringent supervision for large bank holding companies and certain non-bank financial services companies. The Dodd-Frank Act significantly reduced interchange fees on debit card transactions, changed the preemption of state laws applicable to national banks, increased the regulation of consumer mortgage banking and made numerous other changes, some of which are discussed below.

In addition to the Dodd-Frank Act, other legislative and regulatory proposals affecting banks have been made both domestically and internationally. Among other things, these proposals include significant additional capital and liquidity requirements and limitations on size or types of activity in which banks may engage.

Federal Reserve Regulation The Company elected to become a financial holding company as of March 13, 2000, pursuant to the provisions of the Gramm-Leach-Bliley Act (the “GLBA”). Under the GLBA’s system of functional regulation, the Federal Reserve acts as an umbrella regulator for the Company, and certain of the Company’s subsidiaries are regulated directly by additional agencies based on the particular activities of those subsidiaries. The Company’s banking subsidiaries are regulated by the Office of the Comptroller of the Currency (the “OCC”) and also by the Federal Reserve and the FDIC in certain areas. Supervision and regulation by the responsible regulatory agency generally includes comprehensive annual reviews of all major aspects of a bank’s business and condition, and imposition of periodic reporting requirements and limitations on investments and certain types of activities.

If a financial holding company or a depository institution controlled by a financial holding company ceases to meet certain capital or management standards, the Federal Reserve may impose corrective capital and

managerial requirements on the financial holding company, and may place limitations on its ability to conduct all of the business activities that financial holding companies are generally permitted to conduct. See “Permissible Business Activities” below. If the failure to meet these standards persists, a financial holding company may be required to divest its depository institution subsidiaries, or cease all activities other than those activities that may be conducted by bank holding companies that are not financial holding companies.

Federal Reserve regulations also provide that, if any depository institution controlled by a financial holding company fails to maintain a satisfactory rating under the Community Reinvestment Act (“CRA”), the Federal Reserve must prohibit the financial holding company and its subsidiaries from engaging in the additional activities in which only financial holding companies may engage. See “Community Reinvestment Act” below. At December 31, 2012, the Company’s depository-institution subsidiaries met the capital, management and CRA requirements necessary to permit the Company to conduct the broader activities permitted for financial holding companies under the GLBA.

The Dodd-Frank Act codified existing Federal Reserve policy requiring the Company to act as a source of financial strength to its bank subsidiaries, and to commit resources to support these subsidiaries in circumstances where it might not otherwise do so. However, because the GLBA provides for functional regulation of financial holding company activities by various regulators, the GLBA prohibits the Federal Reserve from requiring payment by a holding company to a depository institution if the functional regulator of the depository institution objects to the payment. In those cases, the Federal Reserve could instead require the divestiture of the depository institution and impose operating restrictions pending the divestiture. As a result of the Dodd-Frank Act, non-bank subsidiaries of a holding company that engage in activities permissible for an insured depository institution must be examined and regulated in a manner that is at least as stringent as if the activities were conducted by the lead depository institution of the holding company.

Enhanced Prudential Standards/Early Remediation In 2011, the Federal Reserve issued a proposed rule relating to enhanced prudential standards required under the Dodd-Frank Act for bank holding companies with over $50 billion in consolidated assets. The prudential standards include enhanced risk-based capital and leverage requirements, enhanced liquidity requirements, enhanced risk management and risk committee requirements, a requirement to submit a resolution plan, single-counterparty credit limits and stress tests. The proposal requires the Federal Reserve to conduct annual supervisory capital adequacy stress tests of covered companies under baseline, adverse and severely adverse scenarios, and requires covered companies to conduct their own capital adequacy stress tests. The proposal would provide for notification to a covered company as to which the Council has determined to impose a debt-to-equity ratio of no more than 15-to-1, based upon the determination by the Council that (a) such company poses a grave threat to the financial stability of the United States and (b) the imposition of such a requirement is necessary to mitigate the risk that the company poses to the financial stability of the United States.

The proposed rule also provides, as required by the Dodd-Frank Act, for the early remediation of financial distress at covered companies so as to minimize the probability that the company will become insolvent and to reduce the potential harm of the insolvency of a covered company to the financial stability of the United States. Remedies include, in the initial stages of financial decline of the covered company, limits on capital distributions, acquisitions and asset growth. Remedies in the later stages of financial decline of the covered company include a capital restoration plan and capital-raising requirements, limits on transactions with affiliates, management changes and asset sales. In addition to regulatory capital triggers, the proposed rule includes triggers based on supervisory stress test results, market indicators and weaknesses in enterprise-wide and liquidity risk management.

Permissible Business Activities As a financial holding company, the Company may affiliate with securities firms and insurance companies and engage in other activities that are financial in nature or incidental or complementary to activities that are financial in nature. “Financial in nature” activities include the following: securities underwriting, dealing and market making; sponsoring mutual funds and investment companies;

insurance underwriting and agency; merchant banking; and activities that the Federal Reserve, in consultation with the Secretary of the United States Treasury, determines to be financial in nature or incidental to such financial activity. “Complementary activities” are activities that the Federal Reserve determines upon application to be complementary to a financial activity and that do not pose a safety and soundness risk.

The Company generally is not required to obtain Federal Reserve approval to acquire a company (other than a bank holding company, bank or savings association) engaged in activities that are financial in nature or incidental to activities that are financial in nature, as determined by the Federal Reserve. However, the Dodd-Frank Act added a provision requiring approval if the total consolidated assets to be acquired exceed $10 billion. Financial holding companies are also required to obtain the approval of the Federal Reserve before they may acquire more than 5 percent of the voting shares or substantially all of the assets of an unaffiliated bank holding company, bank or savings association.

Interstate Banking Under the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the “Riegle-Neal Act”), a bank holding company may acquire banks in states other than its home state, subject to any state requirement that the bank has been organized and operating for a minimum period of time (not to exceed five years). Also, such an acquisition is not permitted if the bank holding company controls, prior to or following the proposed acquisition, more than 10 percent of the total amount of deposits of insured depository institutions nationwide, or, if the acquisition is the bank holding company’s initial entry into the state, more than 30 percent of the deposits of insured depository institutions in the state (or any lesser or greater amount set by the state).

The Riegle-Neal Act also authorizes banks to merge across state lines to create interstate branches. Under the Dodd-Frank Act, banks are permitted to establish new branches in another state to the same extent as banks chartered in that state.

Regulatory Approval for Acquisitions In determining whether to approve a proposed bank acquisition, federal bank regulators will consider a number of factors, including the following: the effect of the acquisition on competition, financial condition and future prospects (including current and projected capital ratios and levels); the competence, experience and integrity of management and its record of compliance with laws and regulations; the convenience and needs of the communities to be served (including the acquiring institution’s record of compliance under the CRA); and the effectiveness of the acquiring institution in combating money laundering activities. In addition, under the Dodd-Frank Act, approval of interstate transactions requires that the acquiror satisfy regulatory standards for well capitalized and well managed institutions.

Dividend Restrictions The Company is a legal entity separate and distinct from its subsidiaries. Typically, the majority of the Company’s operating funds are received in the form of dividends paid to the Company by U.S. Bank National Association, its principal banking subsidiary. Federal law imposes limitations on the payment of dividends by national banks.

Dividends payable by U.S. Bank National Association, U.S. Bank National Association ND and the Company’s trust bank subsidiaries, as national banking associations, are limited to the lesser of the amounts calculated under a “recent earnings” test and an “undivided profits” test. Under the recent earnings test, a dividend may not be paid if the total of all dividends declared by a bank in any calendar year is in excess of the current year’s net income combined with the retained net income of the two preceding years, unless the bank obtains the approval of the OCC. Under the undivided profits test, a dividend may not be paid in excess of a bank’s “undivided profits.” See Note 22 of the Notes to Consolidated Financial Statements included in the Company’s 2012 Annual Report for the amount of dividends that the Company’s principal banking subsidiaries could pay to the Company at December 31, 2012, without the approval of their banking regulators.

In addition to the dividend restrictions described above, the OCC, the Federal Reserve and the FDIC have authority to prohibit or limit the payment of dividends by the banking organizations they supervise (including the Company and its bank subsidiaries), if, in the banking regulator’s opinion, payment of a dividend would constitute an unsafe or unsound practice in light of the financial condition of the banking organization. Subject to

exceptions for well capitalized and well managed holding companies, Federal Reserve regulations also require approval of holding company purchases and redemptions of its securities if the gross consideration paid exceeds 10 percent of consolidated net worth for any 12-month period.

In addition, Federal Reserve policy on the payment of dividends, stock redemptions and stock repurchases requires that bank holding companies consult with and inform the Federal Reserve in advance of doing any of the following: declaring and paying dividends that could raise safety and soundness concerns (e.g., declaring and paying dividends that exceed earnings for the period for which dividends are being paid); redeeming or repurchasing capital instruments when experiencing financial weakness; and redeeming or repurchasing common stock and perpetual preferred stock, if the result will be a net reduction in the amount of such capital instruments outstanding for the quarter in which the reduction occurs.

In 2010, the Federal Reserve issued an addendum to its policy on dividends, stock redemptions and stock repurchases that is specifically applicable to the 19 largest bank holding companies (including the Company) that are covered by the Supervisory Capital Assessment Program. The addendum provides for Federal Reserve review of dividend increases, implementation of capital repurchase programs and other capital repurchases or redemptions.

Capital Requirements The Company is subject to regulatory capital requirements (the Basel I or general risk-based capital rules) established by the Federal Reserve, and the Company’s subsidiary banks are subject to substantially similar rules established by the OCC. These requirements are currently the subject of significant changes as a result of the Basel capital proposals and the implementation of these proposals by banking regulators in the United States. Regulatory capital requirements will also change due to implementation of the provisions of the Dodd-Frank Act. Minimum regulatory capital levels are expected to significantly increase as these requirements are adopted and implemented.

Federal banking regulators have adopted risk-based capital and leverage guidelines that require the capital-to-assets ratios of financial institutions to meet certain minimum standards. The risk-based capital ratio is calculated by allocating assets and specified off-balance sheet financial instruments into risk weighted categories (with higher levels of capital being required for the categories perceived as representing greater risk), and is used to determine the amount of a financial institution’s total risk-weighted assets (“RWAs”).

Under the guidelines, capital is divided into two tiers: Tier 1 capital and Tier 2 capital. The amount of Tier 2 capital may not exceed the amount of Tier 1 capital. Total capital is the sum of Tier 1 capital and Tier 2 capital. Under the guidelines, banking organizations are required to maintain a total capital ratio (total capital to RWA) of 8 percent and a Tier 1 capital ratio (Tier 1 capital to RWA) of 4 percent. At December 31, 2012, the Company’s consolidated total capital ratio was 13.1 percent and its Tier 1 capital ratio was 10.8 percent. For a further description of these guidelines, see Note 14 of the Notes to Consolidated Financial Statements in the Company’s 2012 Annual Report.

The federal banking regulators also have established minimum leverage ratio guidelines. The leverage ratio is defined as Tier 1 capital divided by adjusted average total assets. The minimum leverage ratio is 3 percent for bank holding companies that are considered “strong” under Federal Reserve guidelines or which have implemented the Federal Reserve’s risk-based capital measure for market risk. Other bank holding companies must have a minimum leverage ratio of 4 percent. Bank holding companies may be expected to maintain ratios well above the minimum levels, depending upon their particular condition, risk profile and growth plans. At December 31, 2012, the Company’s leverage ratio was 9.2 percent.

The Dodd-Frank Act effectively eliminated differences between the minimum capital requirements applicable to insured depository institutions and their holding companies by phasing out the use of hybrid debt instruments (such as trust preferred securities) in determining holding company regulatory capital.

For additional information regarding the Company’s regulatory capital, see Capital Management in the Company’s 2012 Annual Report on pages 58 to 59.

Basel II and III The Basel Committee on Banking Supervision (the “BCBS”) is an international organization which has the goal of creating international standards for banking regulation. The Federal Reserve and the OCC approved a final rule in 2007 adopting international guidelines established by the BCBS known as “Basel II.” Basel II established three guiding principles: (a) capital adequacy, (b) supervisory review (including the computation of capital and internal assessment processes), and (c) market discipline (including increased disclosure requirements). The Company began the parallel run phase of its Basel II implementation process in 2011. The Company must complete the parallel run to the satisfaction of the Federal Reserve and the OCC before it may use the Basel II advanced approaches to calculate its risk-based capital requirements.

In December 2010, the BCBS issued a new set of international guidelines for determining regulatory capital known as “Basel III.” These guidelines were revised in June 2011. The Basel III capital guidelines increase minimum capital requirements, and when fully implemented, will require bank holding companies to maintain a minimum ratio of Tier 1 common equity to risk-weighted assets of at least 4.5 percent plus a 2.5 percent capital conservation buffer.

The Federal Reserve and the OCC issued three notices of proposed rulemaking in June 2012 (the “Basel III NPRs”) that would revise the regulatory risk-based capital and leverage requirements for banks in the United States consistent with the BCBS proposals. The proposed revisions include the implementation of a more conservative definition of capital, a new common equity Tier 1 minimum capital requirement, a higher minimum Tier 1 capital requirement, and a supplementary leverage ratio. Also, consistent with Basel III, the Federal Reserve and the OCC have proposed limiting capital distributions and certain discretionary bonus payments to executives if banks do not maintain specified capital buffers in addition to meeting minimum risk-based capital requirements. In addition, the regulators have proposed to revise the calculation of risk-weighted assets under the general risk-based capital rule applicable to all banks and the calculation of the Basel II advanced approach risk-based capital rules, both of which apply to the Company.

The Basel III NPRs provided for an implementation date of January 1, 2013 and a transition period extending to 2019. However, the regulators have delayed the finalization of the proposals. At present, there is no indication from the Federal Reserve and the OCC as to when the final rules will be published or the implications that this delay will have on implementation or the transition period.

Comprehensive Capital Analysis and Review The Federal Reserve’s Capital Plans rule requires large bank holding companies with assets in excess of $50 billion to submit capital plans to the Federal Reserve on an annual basis and to obtain approval from the Federal Reserve for capital distributions projected in the capital plan. The Comprehensive Capital Analysis and Review (“CCAR”) of the Company’s capital plan consists of a number of mandatory elements, including an assessment of the Company’s sources and uses of capital over a nine-quarter planning horizon assuming both expected and stressful conditions; a detailed description of the Company’s process for assessing capital adequacy; a demonstration of the Company’s ability to maintain capital above each minimum regulatory capital ratio and above a Tier 1 common ratio of 5 percent under expected and stressful conditions; and a demonstration of the Company’s ability to achieve, readily and without difficulty, the capital ratios required by the Basel III framework as it comes into effect in the United States.

The Company submitted its 2013 capital plan to the Federal Reserve on January 6, 2013, in accordance with instructions from the Federal Reserve. Applicable stress testing rules require the Federal Reserve to publish the results of its assessment of the Company’s capital plan, including its planned capital distributions, no later than March 31, 2013.

Stress Testing The stress testing required as part of the CCAR process includes company-run stress tests employing stress scenarios developed by the Company as well as stress scenarios provided by the Federal

Reserve. The Company also submits stress tests incorporating the Dodd-Frank Act capital actions, which are intended to normalize capital distributions across bank holding companies. The Federal Reserve also conducts a supervisory stress test employing its severely adverse stress scenario and its internal supervisory models, which incorporates both the Company’s planned capital actions and the Dodd-Frank Act capital actions. The Federal Reserve and the Company are required to publish the results of the annual supervisory and annual company-run stress tests (for severely adverse scenarios only), respectively, no later than March 31 of each year. In addition to the stress tests produced in connection with the CCAR, all large bank holding companies are also required to submit a mid-cycle company-run stress test based on stress scenarios developed by the Company. The results of this stress test must be submitted to the Federal Reserve for review in early July of each year. The Company is required to publish its results of this stress test no later than the end of September of each year.

Depository institutions with assets in excess of $50 billion are required to submit an annual company-run stress test which runs concurrently with, and is submitted at the same time as, the CCAR. The stress test is based on the OCC’s stress scenario assumptions and capital actions that are appropriate for the economic conditions assumed in each scenario. The Company’s principal banking subsidiary, U.S. Bank National Association, submitted its stress test in accordance with regulatory requirements in January 2013. The Company is required to publish the results of this stress test no later than March 31, 2013.

Basel III Liquidity Proposals The BCBS proposed in 2009 two minimum standards for limiting liquidity risk: The Liquidity Coverage Ratio (“LCR”) and the Net Stable Funding Ratio (“NSFR”). The LCR is designed to ensure that bank holding companies have sufficient high-quality liquid assets to survive a significant liquidity stress event lasting for 30 calendar days. The NSFR is designed to promote stable, longer-term funding of assets and business activities over a one-year time horizon. In January 2012, the BCBS further revised the proposals and delayed the implementation date to January 1, 2015; the requirements would be phased in over the next four succeeding years. Domestic regulators are expected to issue a notice of proposed rulemaking defining the LCR and NSFR for United States implementation sometime in the future.

Federal Deposit Insurance Corporation Improvement Act The Federal Deposit Insurance Corporation Improvement Act of 1991 (the “FDICIA”) provides a framework for regulation of depository institutions and their affiliates (including parent holding companies) by federal banking regulators. As part of that framework, the FDICIA requires the relevant federal banking regulator to take “prompt corrective action” with respect to a depository institution if that institution does not meet certain capital adequacy standards.

Supervisory actions by the appropriate federal banking regulator under the “prompt corrective action” rules generally depend upon an institution’s classification within five capital categories. The regulations apply only to banks and not to bank holding companies such as the Company; however, subject to limitations that may be imposed pursuant to the GLBA, the Federal Reserve is authorized to take appropriate action at the holding company level, based on the undercapitalized status of the holding company’s subsidiary banking institutions. In certain instances relating to an undercapitalized banking institution, the bank holding company would be required to guarantee the performance of the undercapitalized subsidiary’s capital restoration plan and could be liable for civil money damages for failure to fulfill those guarantee commitments.

Deposit Insurance Under current FDIC regulations, each depository institution is assigned to a risk category based on capital and supervisory measures. A depository institution is assessed premiums by the FDIC based on its risk category and the amount of deposits held. In 2009, the FDIC revised the method for calculating the assessment rate for depository institutions by introducing several adjustments to an institution’s initial base assessment rate. The Dodd-Frank Act altered the assessment base for deposit insurance assessments from a deposit to an asset base, and seeks to fund part of the cost of the Dodd-Frank Act by increasing the deposit insurance reserve fund to 1.35 percent of estimated insured deposits. The Dodd-Frank Act also requires that FDIC assessments be set in a manner that offsets the cost of the assessment increases for institutions with consolidated assets of less than $10 billion. This provision effectively places the increased assessment costs on larger financial institutions such as the Company.

The Dodd-Frank Act also permanently increased deposit insurance coverage from $100,000 per account ownership type to $250,000, and extended the unlimited insurance of non-interest bearing transaction accounts under the FDIC Transaction Account Guaranty program to January 1, 2013. In February 2011, the FDIC adopted a final rule implementing the Dodd-Frank Act provisions, which provides for use of a risk scorecard to determine deposit premiums. The effect of the rule was to increase the FDIC premiums paid by the Company’s banking subsidiaries.

Powers of the FDIC Upon Insolvency of an Insured Institution If the FDIC is appointed the conservator or receiver of an insured depository institution upon its insolvency or in certain other events, the FDIC has the power to (a) transfer any of the depository institution’s assets and liabilities to a new obligor without the approval of the depository institution’s creditors; (b) enforce the terms of the depository institution’s contracts pursuant to their terms; or (c) repudiate or disaffirm any contracts (if the FDIC determines that performance of the contract is burdensome and that the repudiation or disaffirmation is necessary to promote the orderly administration of the depository institution). These provisions would be applicable to obligations and liabilities of the Company’s subsidiaries that are insured depository institutions, such as U.S. Bank National Association.

Depositor Preference Under federal law, in the event of the liquidation or other resolution of an insured depository institution, the claims of a receiver of the institution for administrative expense and the claims of holders of domestic deposit liabilities (including the FDIC, as subrogee of the depositors) have priority over the claims of other unsecured creditors of the institution, including holders of publicly issued senior or subordinated debt and depositors in non-domestic offices. As a result, those noteholders and depositors would be treated differently from, and could receive, if anything, substantially less than, the depositors in domestic offices of the depository.

Orderly Liquidation Authority In 2011, under the Dodd-Frank Act, the FDIC adopted a rule providing for a comprehensive framework for the orderly liquidation of a covered financial company. A covered financial company is a financial company (including a bank holding company, but not an insured depository), in situations where the Secretary of the Treasury determines (upon the written recommendation of the FDIC and the Federal Reserve and after consultation with the President) that the conditions set forth in the Dodd-Frank Act regarding the impact of the financial company’s failure have been met. The rule sets forth a comprehensive method for the receivership of a covered financial company. The Company is a financial company and therefore is potentially subject to the orderly liquidation authority of the FDIC. In preparation for the potential exercise of this authority, the FDIC created the Office of Complex Financial Institutions. Its duties include the continuous review and oversight of bank holding companies with assets of more than $100 billion.

Resolution Plans The Federal Reserve and the FDIC have adopted a rule to implement the requirements of the Dodd-Frank Act regarding annual resolution plans for bank holding companies with assets of $50 billion or more (so-called “Living Wills”). The rule requires each covered company to produce a resolution plan that includes information regarding the manner and extent to which any insured depository institution affiliated with the company is adequately protected from risks arising from the activities of any nonbank subsidiaries of the company; full descriptions of ownership structure, assets, liabilities and contractual obligations of the company; identification of the cross-guarantees tied to different securities; identification of major counterparties; a process for determining to whom the collateral of the company is pledged; and any other information that the Federal Reserve and the FDIC jointly require by rule or order. Plans must analyze baseline, adverse, and severely adverse economic condition impacts. The plan must demonstrate, in the event of material financial distress or failure of the covered company, a reorganization or liquidation of the covered company under the federal bankruptcy code that could be accomplished within a reasonable period of time and in a manner that substantially mitigates the risk that the failure of the covered company would have serious adverse effects on financial stability in the United States. Covered companies and their subsidiaries are subject to more stringent capital, leverage and liquidity requirements or restrictions on growth, activities or operations if they fail to file an acceptable plan.

In January 2012, the FDIC adopted a final rule requiring an insured depository institution with $50 billion or more in total assets to submit periodically to the FDIC a contingency plan for the resolution of such institution in

the event of its failure. The rule requires a covered depository institution to submit a resolution plan that should enable the FDIC, as receiver, to resolve the institution under applicable receivership provisions of the Federal Deposit Insurance Act in a manner that ensures that depositors receive access to their insured deposits within one business day of the institution’s failure, maximizes the net present value return from the sale or disposition of its assets and minimizes the amount of any loss to be realized by the institution’s creditors. The Company will be required to file both resolution plans in December 2013.

Liability of Commonly Controlled Institutions An FDIC-insured depository institution can be held liable for any loss incurred or expected to be incurred by the FDIC in connection with another FDIC-insured institution under common control with that institution being “in default” or “in danger of default” (commonly referred to as “cross-guarantee” liability). An FDIC claim for cross-guarantee liability against a depository institution is generally superior in right of payment to claims of the holding company and its affiliates against the depository institution.

Transactions with Affiliates There are various legal restrictions on the extent to which the Company and its non-bank subsidiaries may borrow or otherwise obtain funding from the Company’s banking subsidiaries, including U.S. Bank National Association and U.S. Bank National Association ND. Under the Federal Reserve Act and Regulation W of the Federal Reserve, the Company’s banking subsidiaries (and their subsidiaries) may only engage in lending and other “covered transactions” with non-bank and non-savings bank affiliates to the following extent: (a) in the case of any single affiliate, the aggregate amount of covered transactions may not exceed 10 percent of the capital stock and surplus of the banking subsidiary; and (b) in the case of all affiliates, the aggregate amount of covered transactions may not exceed 20 percent of the capital stock and surplus of the banking subsidiary.

Covered transactions between the Company’s banking subsidiaries and their affiliates are also subject to certain collateralization requirements. All covered transactions, including transactions with a third party in which an affiliate of the banking subsidiary has a financial interest, must be conducted on market terms. “Covered transactions” are defined to include (a) a loan or extension of credit by a bank subsidiary to an affiliate, (b) a purchase of securities issued to a banking subsidiary by an affiliate, (c) a purchase of assets (unless otherwise exempted by the Federal Reserve) by the banking subsidiary from an affiliate, (d) the acceptance of securities issued by an affiliate to the banking subsidiary as collateral for a loan, and (e) the issuance of a guarantee, acceptance or letter of credit by the banking subsidiary on behalf of an affiliate. The Dodd-Frank Act eliminated the special treatment for transactions with financial subsidiaries and added derivative and securities lending transactions to the definition of “covered transactions.”

Anti-Money Laundering and Suspicious Activity Several federal laws, including the Bank Secrecy Act, the Money Laundering Control Act and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “Patriot Act”) require all financial institutions (including banks and securities broker-dealers) to, among other things, implement policies and procedures relating to anti-money laundering, compliance, suspicious activities, and currency transaction reporting and due diligence on customers. The Patriot Act also requires federal bank regulators to evaluate the effectiveness of an applicant in combating money laundering when determining whether to approve a proposed bank acquisition.

Community Reinvestment Act The Company’s banking subsidiaries are subject to the provisions of the CRA. Under the terms of the CRA, the banks have a continuing and affirmative obligation, consistent with safe and sound operation, to help meet the credit needs of their communities, including providing credit to individuals residing in low- and moderate-income neighborhoods. The CRA does not establish specific lending requirements or programs for financial institutions, and does not limit an institution’s discretion to develop the types of products and services that it believes are best suited to its particular community in a manner consistent with the CRA.

The OCC regularly assesses each of the Company’s banking subsidiaries on its record in meeting the credit needs of the community served by that institution, including low-income and moderate-income neighborhoods.

The assessment also is considered when the Federal Reserve reviews applications by banking institutions to acquire, merge or consolidate with another banking institution or its holding company, to establish a new branch office that will accept deposits or to relocate an office. In the case of a bank holding company applying for approval to acquire a bank or other bank holding company, the Federal Reserve will assess the records of each subsidiary depository institution of the applicant bank holding company, and those records may be the basis for denying the application.

U.S. Bank National Association received an “outstanding” CRA rating and U.S. Bank National Association ND received a “satisfactory” CRA rating in their most recent examinations, covering the periods from January 1, 2006 through December 31, 2008.

Regulation of Brokerage, Investment Advisory and Insurance Activities The Company conducts securities underwriting, dealing and brokerage activities in the United States through U.S. Bancorp Investments, Inc. (“USBII”) and other subsidiaries. These activities are subject to regulations of the Securities and Exchange Commission (the “SEC”), the Financial Industry Regulatory Authority and other authorities, including state regulators. These regulations generally include licensing of securities personnel, interactions with customers, trading operations and periodic examinations.

Securities regulators impose capital requirements on USBII and monitor its financial operations with periodic financial reviews. In addition, USBII is a member of the Securities Investor Protection Corporation.

The operations of First American Funds money market funds also are subject to regulation by the SEC.

The Company’s operations in the areas of insurance brokerage and reinsurance of credit life insurance are subject to regulation and supervision by various state insurance regulatory authorities, including the licensing of insurance brokers and agents.

Regulation of Derivatives and the Swap Marketplace Under the Dodd-Frank Act, the Commodity Futures Trading Commission (the “CFTC”) has issued, and will issue additional rules regarding the regulation of the swaps marketplace. The rules require swap dealers to register with the CFTC and will require them to meet robust business conduct standards to lower risk and promote market integrity, to meet certain recordkeeping and reporting requirements so that regulators can better monitor the markets, and to be subject to certain capital and margin requirements. On December 31, 2012, the Company’s primary banking subsidiary, U.S. Bank National Association, became a registered swap dealer.

The Volcker Rule — Proprietary Trading of Securities, Derivatives, and Certain other Financial Instruments In 2012, the SEC, the Federal Reserve, the OCC and the FDIC proposed a rule to implement the so-called “Volcker Rule” under the Dodd-Frank Act. The Volcker Rule prohibits banking entities from engaging in proprietary trading of securities, derivatives and certain other financial instruments for the entity’s own accord, and prohibits certain interests in, or relationships with, a hedge fund or private equity fund. This rule will apply to the Company, its banking subsidiaries and their affiliates. The requirements will become effective in July 2014. This rule is expected to be issued in final form in 2013.

Financial Privacy Under the requirements imposed by the GLBA, the Company and its subsidiaries are required periodically to disclose to their retail customers the Company’s policies and practices with respect to the sharing of nonpublic customer information with its affiliates and others, and the confidentiality and security of that information. Under the GLBA, retail customers also must be given the opportunity to “opt out” of information-sharing arrangements with nonaffiliates, subject to certain exceptions set forth in the GLBA.

Incentive-Based Compensation Arrangements In April 2011, the Federal Reserve, the OCC, the FDIC, the SEC, the National Credit Union Administration and the Federal Housing Finance Agency issued a proposed rule under the Dodd-Frank Act that would require the reporting of incentive-based compensation arrangements by a

covered financial institution, and prohibit incentive-based compensation arrangements at a covered financial institution that provide excessive compensation or that could expose the institution to inappropriate risks that could lead to material financial loss.

Consumer Financial Protection Bureau Under the Dodd-Frank Act, the Consumer Financial Protection Bureau (the “CFPB”) has assumed all authority to prescribe rules or issue orders or guidelines pursuant to any federal consumer financial law. The CFPB regulates and examines the Company and its banks and other subsidiaries with respect to matters that relate to these laws and consumer financial services and products. The CFPB undertook numerous rule-making and other initiatives in 2012, and will continue to do so in 2013. The CFPB’s rulemaking, examination and enforcement authority is expected to significantly affect financial institutions involved in the provision of consumer financial products and services, including the Company and its subsidiary banks and companies. In January 2013, select final rules required by the Dodd-Frank Act were issued related to residential mortgage origination and servicing. The substance of these rules go into effect January 2014.

Other Supervision and Regulation The activities of U.S. Bank National Association and U.S. Bank National Association ND, as consumer lenders, are also subject to regulation under numerous United States federal laws and state consumer protection statutes.

The Company is subject to the disclosure and regulatory requirements of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), both as administered by the SEC, by virtue of the Company’s status as a public company. As a listed company on the New York Stock Exchange (the “NYSE”), the Company is subject to the rules of the NYSE for listed companies.

Website Access to SEC Reports

U.S. Bancorp’s internet website can be found at usbank.com. U.S. Bancorp makes available free of charge on its website its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13 or 15(d) of the Exchange Act, as well as all other reports filed by U.S. Bancorp with the SEC as soon as reasonably practicable after electronically filed with, or furnished to, the SEC.

Additional Information

Additional information in response to this Item 1 can be found in the Company’s 2012 Annual Report on page 22 under the heading “Acquisitions”; and on pages 61 to 65 under the heading “Line of Business Financial Review.” That information is incorporated into this report by reference.

Item 1A.

Risk Factors

Information in response to this Item 1A can be found in the Company’s 2012 Annual Report on pages 145 to 154 under the heading “Risk Factors.” That information is incorporated into this report by reference.

Item 1B.

Unresolved Staff Comments

None.

Item

2. Properties

U.S. Bancorp and its significant subsidiaries occupy headquarter offices under a long-term lease in Minneapolis, Minnesota. The Company also leases nine freestanding operations centers in Cincinnati, Denver, Milwaukee, Minneapolis, Overland Park, Portland and St. Paul. The Company owns 11 principal operations

centers in Cincinnati, Coeur d’Alene, Fargo, Milwaukee, Olathe, Owensboro, Portland, St. Louis and St. Paul. At December 31, 2012, the Company’s subsidiaries owned and operated a total of 1,521 facilities and leased an additional 1,971 facilities, all of which are well maintained. The Company believes its current facilities are adequate to meet its needs. Additional information with respect to premises and equipment is presented in Notes 8 and 21 of the Notes to Consolidated Financial Statements included in the Company’s 2012 Annual Report. That information is incorporated into this report by reference.

Item 3.

Legal Proceedings

None.

Item 4.

Mine Safety Disclosures

Not Applicable.

Capital Covenants

The Company has entered into several transactions involving the issuance of capital securities (“Capital Securities”) by certain Delaware statutory trusts formed by the Company (the “Trusts”), the issuance by the Company of preferred stock (“Preferred Stock”) or the issuance by an indirect subsidiary of U.S. Bank National Association of preferred stock exchangeable for the Company’s Preferred Stock under certain circumstances (“Exchangeable Preferred Stock”). Simultaneously with the closing of each of those transactions, the Company entered into a replacement capital covenant, as amended from time to time (as amended, each, a “Replacement Capital Covenant” and collectively, the “Replacement Capital Covenants”) for the benefit of persons that buy, hold or sell a specified series of long-term indebtedness of the Company or U.S. Bank National Association (the “Covered Debt”). Each of the Replacement Capital Covenants provides that neither the Company nor any of its subsidiaries (including any of the Trusts) will repay, redeem or purchase any of the Preferred Stock, Exchangeable Preferred Stock or the Capital Securities and the securities held by the Trust (the “Other Securities”), as applicable, on or before the date specified in the applicable Replacement Capital Covenant, unless the Company has received proceeds from the sale of qualifying securities that (a) have equity-like characteristics that are the same as, or more equity-like than, the applicable characteristics of the Preferred Stock, the Exchangeable Preferred Stock, the Capital Securities or Other Securities, as applicable, at the time of repayment, redemption or purchase, and (b) the Company has obtained the prior approval of the Federal Reserve, if such approval is then required by the Federal Reserve or, in the case of the Exchangeable Preferred Stock, the approval of the OCC.

The Company will provide a copy of any Replacement Capital Covenant to a holder of the relevant Covered Debt. For copies of any of these documents, holders should write to Investor Relations, U.S. Bancorp, 800 Nicollet Mall, Minneapolis, Minnesota 55402, or call (866) 775-9668.

The following table identifies the closing date for each transaction, issuer, series of Capital Securities, Preferred Stock or Exchangeable Preferred Stock issued in the relevant transaction, Other Securities, if any, and applicable Covered Debt for those securities that remain outstanding.


Closing Date	Issuer	Capital Securities or Preferred Stock	Other Securities	Covered Debt
3/17/06	USB Capital IX and U.S. Bancorp	USB Capital IX’s $675,378,000 of 6.189% Fixed-to-Floating Rate Normal Income Trust Securities	U.S. Bancorp’s Series A Non-Cumulative Perpetual Preferred Stock	U.S. Bancorp’s 3.442% Remarketed Junior Subordinated Notes due 2016 (CUSIP No. 902973AV8)
3/27/06	U.S. Bancorp	U.S. Bancorp’s 40,000,000 Depositary Shares ($25 per Depositary Share) each representing a 1/1000^thinterest in a share of Series B Non-Cumulative Perpetual Preferred Stock	Not Applicable	U.S. Bancorp’s 3.442% Remarketed Junior Subordinated Notes due 2016 (CUSIP No. 902973AV8)
12/22/06	USB Realty Corp^(a) and U.S. Bancorp	USB Realty Corp.’s 5,000 shares of Fixed- Floating-Rate Exchangeable Non-cumulative Perpetual Series A Preferred Stock exchangeable for shares of U.S. Bancorp’s Series C Non-cumulative Perpetual Preferred Stock^(b)	Not Applicable	U.S. Bancorp’s 3.442% Remarketed Junior Subordinated Notes due 2016 (CUSIP No. 902973AV8)
3/17/08	U.S. Bancorp	U.S. Bancorp’s 20,000,000 Depositary Shares ($25 per Depositary Share) each representing a 1/1000^thinterest in a share of Series D Non-Cumulative Perpetual Preferred Stock	Not Applicable	U.S. Bancorp’s 3.442% Remarketed Junior Subordinated Notes due 2016 (CUSIP No. 902973AV8)
6/10/10	U.S. Bancorp	U.S. Bancorp’s 574,622 Depositary Shares ($1,000 per Depositary Share) each representing a 1/100^thinterest in a share of Series A Non-Cumulative Perpetual Preferred Stock	Not Applicable	U.S. Bancorp’s 3.442% Remarketed Junior Subordinated Notes due 2016 (CUSIP No. 902973AV8)
4/20/12	U.S. Bancorp	U.S. Bancorp’s 43,400,000 Depositary Shares ($25 per Depositary Share) each representing a 1/1000^thinterest in a share of Series G Non-Cumulative Perpetual Preferred Stock	Not Applicable	U.S. Bancorp’s 3.442% Remarketed Junior Subordinated Notes due 2016 (CUSIP No. 902973AV8)

(a)

USB Realty Corp. is an indirect subsidiary of U.S. Bank National Association.

(b)

Under certain circumstances, upon the direction of the OCC, each share of USB Realty Corp.’s Series A Preferred Stock will be automatically exchanged for one share of the U.S. Bancorp’s Series C Non-cumulative Perpetual Preferred Stock.

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

On March 13, 2012, the Company announced that its Board of Directors had approved an authorization to repurchase 100 million shares of common stock through March 31, 2013. All shares repurchased during the fourth quarter of 2012 were repurchased under this authorization. The following table provides a detailed analysis of all shares repurchased by the Company during the fourth quarter of 2012:


Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program		Maximum Number of Shares that May Yet Be Purchased Under the Program
October 1-31		861,720	$	33.41		861,720		66,030,713
November 1-30		4,131,223		32.88		4,131,223		61,899,490
December 1-31		7,784,647		31.83		7,784,647		54,114,843

Total		12,777,590	$	32.28		12,777,590		54,114,843

Additional Information

Additional information in response to this Item 5 can be found in the Company’s 2012 Annual Report on page 144 under the heading “U.S. Bancorp Supplemental Financial Data (Unaudited).” That information is incorporated into this report by reference.

Item 6.

Selected Financial Data

Information in response to this Item 6 can be found in the Company’s 2012 Annual Report on page 21 under the heading “Table 1 — Selected Financial Data.” That information is incorporated into this report by reference.

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Information in response to this Item 7 can be found in the Company’s 2012 Annual Report on pages 20 to 70 under the heading “Management’s Discussion and Analysis.” That information is incorporated into this report by reference.

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Information in response to this Item 7A can be found in the Company’s 2012 Annual Report on pages 36 to 59 under the heading “Corporate Risk Profile.” That information is incorporated into this report by reference.

Item 8.

Financial Statements and Supplementary Data

Information in response to this Item 8 can be found in the Company’s 2012 Annual Report on pages 71 to 144 under the headings “Report of Management,” “Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements,” “Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting,” “U.S. Bancorp Consolidated Balance Sheet,” “U.S. Bancorp Consolidated Statement of Income,” “U.S. Bancorp Consolidated Statement of Comprehensive Income,” “U.S. Bancorp Consolidated Statement of Shareholders’ Equity,” “U.S. Bancorp Consolidated Statement of Cash Flows,” “Notes to Consolidated Financial Statements,” “U.S. Bancorp Consolidated Balance Sheet — Five Year Summary (Unaudited),” “U.S. Bancorp Consolidated Statement of Income — Five Year Summary (Unaudited),”

“U.S. Bancorp Quarterly Consolidated Financial Data (Unaudited),” “U.S. Bancorp Consolidated Daily Average Balance Sheet and Related Yields and Rates (Unaudited)” and “U.S. Bancorp Supplemental Financial Data (Unaudited).” That information is incorporated into this report by reference.

Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A.

Controls and Procedures

Information in response to this Item 9A can be found in the Company’s 2012 Annual Report on page 70 under the heading “Controls and Procedures” and on pages 71 and 73 under the headings “Report of Management” and “Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting.” That information is incorporated into this report by reference.

Item 9B.

Other Information

None.

PART III

Item 10.

Directors, Executive Officers and Corporate Governance

Executive Officers of the Registrant

Richard K. Davis

Mr. Davis is Chairman, President and Chief Executive Officer of U.S. Bancorp. Mr. Davis, 54, has served as Chairman of U.S. Bancorp since December 2007, Chief Executive Officer since December 2006 and President since October 2004. He also served as Chief Operating Officer from October 2004 until December 2006. Mr. Davis has held management positions with the Company since joining Star Banc Corporation, one of its predecessors, in 1993 as Executive Vice President.

Jennie P. Carlson

Ms. Carlson is Executive Vice President, Human Resources, of U.S. Bancorp. Ms. Carlson, 52, has served in this position since January 2002. Until that time, she served as Executive Vice President, Deputy General Counsel and Corporate Secretary of U.S. Bancorp since the merger of Firstar Corporation and U.S. Bancorp in February 2001. From 1995 until the merger, she was General Counsel and Secretary of Firstar Corporation and Star Banc Corporation.

Andrew Cecere

Mr. Cecere is Vice Chairman and Chief Financial Officer of U.S. Bancorp. Mr. Cecere, 52, has served in this position since February 2007. Until that time, he served as Vice Chairman, Wealth Management and Securities Services of U.S. Bancorp since the merger of Firstar Corporation and U.S. Bancorp in February 2001. Previously, he had served as an executive officer of the former U.S. Bancorp, including as Chief Financial Officer from May 2000 through February 2001.

James L. Chosy

Mr. Chosy, 49, will become Executive Vice President, General Counsel and Corporate Secretary of U.S. Bancorp on March 1, 2013. From 2001 to 2013, he served as the General Counsel and Secretary of Piper Jaffray Companies. From 1995 to 2001, Mr. Chosy was Vice President and Associate General Counsel of U.S. Bancorp, having also served as Assistant Secretary of U.S. Bancorp from 1995 through 2000 and as Secretary from 2000 until 2001.

Terrance R. Dolan

Mr. Dolan is Vice Chairman, Wealth Management and Securities Services, of U.S. Bancorp. Mr. Dolan, 51, has served in this position since July 2010. From September 1998 to July 2010, Mr. Dolan served as U.S. Bancorp’s Controller. He additionally held the title of Executive Vice President from January 2002 until June 2010 and Senior Vice President from September 1998 until January 2002.

John R. Elmore

Mr. Elmore, 56, will become Vice Chairman, Community Banking and Branch Delivery, of U.S. Bancorp on March 1, 2013. From 1999 to 2013, he served as Executive Vice President, Community Banking, of U.S. Bancorp and its predecessor company, Firstar Corporation.

Richard C. Hartnack

Mr. Hartnack is Vice Chairman, Consumer and Small Business Banking, of U.S. Bancorp. Mr. Hartnack, 67, has served in this position since April 2005, when he joined U.S. Bancorp. Prior to joining U.S. Bancorp, he

served as Vice Chairman of Union Bank of California from 1991 to 2005 with responsibility for Community Banking and Investment Services. Mr. Hartnack will retire as U.S. Bancorp’s Vice Chairman, Consumer and Small Business Banking, on March 1, 2013.

Richard J. Hidy

Mr. Hidy is Executive Vice President and Chief Risk Officer of U.S. Bancorp. Mr. Hidy, 50, has served in this position since 2005. From 2003 until 2005, he served as Senior Vice President and Deputy General Counsel of U.S. Bancorp, having served as Senior Vice President and Associate General Counsel of U.S. Bancorp and Firstar Corporation since 1999.

Joseph C. Hoesley

Mr. Hoesley is Vice Chairman, Commercial Real Estate, of U.S. Bancorp. Mr. Hoesley, 58, has served in this position since June 2006. From June 2002 until June 2006, he served as Executive Vice President and National Group Head of Commercial Real Estate at U.S. Bancorp, having previously served as Senior Vice President and Group Head of Commercial Real Estate since joining U.S. Bancorp in 1992.

Pamela A. Joseph

Ms. Joseph is Vice Chairman, Payment Services, of U.S. Bancorp. Ms. Joseph, 53, has served in this position since December 2004. Since November 2004, she has been Chairman and Chief Executive Officer of Elavon Inc., a wholly owned subsidiary of U.S. Bancorp. Prior to that time, she had been President and Chief Operating Officer of Elavon Inc. since February 2000.

Michael S. LaFontaine

Mr. LaFontaine is Executive Vice President and Chief Operational Risk Officer of U.S. Bancorp. Mr. LaFontaine, 34, has served in this position since October 2012. From 2007 to 2012, he served as Senior Vice President with responsibility for U.S. Bancorp’s corporate compliance, anti-money laundering, and fair lending divisions, and also served as Chief Compliance Officer since 2005.

Howell D. McCullough III

Mr. McCullough is Executive Vice President and Chief Strategy Officer of U.S. Bancorp and Head of U.S. Bancorp’s Enterprise Revenue Office. Mr. McCullough, 56, has served in these positions since September 2007. From July 2005 until September 2007, he served as Director of Strategy and Acquisitions of the Payment Services business of U.S. Bancorp. He also served as Chief Financial Officer of the Payment Services business from October 2006 until September 2007. From March 2001 until July 2005, he served as Senior Vice President and Director of Investor Relations at U.S. Bancorp.

Lee R. Mitau

Mr. Mitau is Executive Vice President and General Counsel of U.S. Bancorp. Mr. Mitau, 64, has served in this position since 1995. Mr. Mitau also serves as Corporate Secretary. Prior to 1995 he was a partner at the law firm of Dorsey & Whitney LLP. Mr. Mitau will retire as U.S. Bancorp’s Executive Vice President, General Counsel and Corporate Secretary, on March 1, 2013.

P.W. Parker

Mr. Parker is Executive Vice President and Chief Credit Officer of U.S. Bancorp. Mr. Parker, 56, has served in this position since October 2007. From March 2005 until October 2007, he served as Executive Vice President of Credit Portfolio Management of U.S. Bancorp, having served as Senior Vice President of Credit Portfolio Management of U.S. Bancorp since January 2002.

Richard B. Payne, Jr.

Mr. Payne is Vice Chairman, Wholesale Banking, of U.S. Bancorp. Mr. Payne, 65, has served in this position since November 2010, when he assumed the additional responsibility for Commercial Banking at U.S. Bancorp. From July 2006, when he joined U.S. Bancorp, until November 2010, Mr. Payne served as Vice Chairman, Corporate Banking at U.S. Bancorp. Prior to joining U.S. Bancorp, he served as Executive Vice President for National City Corporation in Cleveland, with responsibility for Capital Markets, from 2001 to 2006.

Kent V. Stone

Mr. Stone, 55, will become Vice Chairman, Consumer Banking Sales and Support, of U.S. Bancorp on March 1, 2013. He served as an Executive Vice President of U.S. Bancorp from 2000 to 2013, most recently with responsibility for Consumer Banking Support Services since 2006, and held other senior leadership positions with U.S. Bancorp since 1991.

Jeffry H. von Gillern

Mr. von Gillern is Vice Chairman, Technology and Operations Services, of U.S. Bancorp. Mr. von Gillern, 47, has served in this position since July 2010. From April 2001, when he joined U.S. Bancorp, until July 2010, Mr. von Gillern served as Executive Vice President of U.S. Bancorp, additionally serving as Chief Information Officer from July 2007 until July 2010.

Code of Ethics and Business Conduct

The Company has adopted a Code of Ethics and Business Conduct that applies to its principal executive officer, principal financial officer and principal accounting officer. The Company’s Code of Ethics and Business Conduct can be found at www.usbank.com by clicking on “About U.S. Bank” and then clicking on “Ethics” under the “Investor/Shareholder Information” heading, which is located at the left side of the bottom of the page. The Company intends to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding amendments to, or waivers from, certain provisions of the Code of Ethics and Business Conduct that apply to its principal executive officer, principal financial officer and principal accounting officer by posting such information on its website, at the address and location specified above.

Additional Information

Additional information in response to this Item 10 can be found in the Company’s Proxy Statement under the headings “Other Matters — Section 16(a) Beneficial Ownership Reporting Compliance,” “Proposal 1 — Election of Directors” and “Corporate Governance — Board Meetings and Committees.” That information is incorporated into this report by reference.

Item 11.

Executive Compensation

Information in response to this Item 11 can be found in the Company’s Proxy Statement under the headings “Compensation Discussion and Analysis,” “Compensation Committee Report,” “Executive Compensation” and “Director Compensation.” That information is incorporated into this report by reference.

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Equity Compensation Plan Information

The following table summarizes information regarding the Company’s equity compensation plans in effect as of December 31, 2012:


Plan Category	Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights		Weighted-average Exercise Price of Outstanding Options, Warrants and Rights		Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in the First Column)⁽¹⁾
Equity compensation plans approved by security holders⁽²⁾		66,936,326	$	28.64		58,012,100
Equity compensation plans not approved by security holders⁽³⁾		1,623,537		—		—

Total		68,559,863	$	27.96		58,012,100

(1)

No shares are available for granting future awards under the U.S. Bancorp 2001 Stock Incentive Plan. The 58,012,100 shares available under the Amended and Restated 2007 Stock Incentive Plan are available for future awards in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards or other stock-based awards, except that only 17,864,398 of these shares are available for future grants of awards other than stock options or stock appreciation rights.

(2)

Includes shares underlying stock options, performance-based restricted stock units (awarded to the members of the Company’s managing committee and convertible into shares of the Company’s common stock on a one-for-one basis), and restricted stock units (convertible into shares of the Company’s common stock on a one-for-one basis) under the Amended and Restated 2007 Stock Incentive Plan and the U.S. Bancorp 2001 Stock Incentive Plan. Excludes 137,620 shares, with a weighted-average exercise price of $19.86, underlying outstanding stock options and warrants assumed by U.S. Bancorp in connection with acquisitions by U.S. Bancorp.

(3)

These shares of common stock are issuable pursuant to various current and former deferred compensation plans of U.S. Bancorp and its predecessor entities. The weighted-average exercise price does not include any assumed price at issuance of shares that may be issuable pursuant to the deferred compensation plans.

The deferred compensation plans allow non-employee directors and members of the Company’s senior management to defer all or part of their compensation until the earlier of retirement or termination of employment. The deferred compensation is deemed to be invested in one of several investment alternatives at the option of the participant, including shares of U.S. Bancorp common stock. Deferred compensation deemed to be invested in U.S. Bancorp stock may be received at the time of distribution, at the election of the participant, in the form of shares of U.S. Bancorp common stock. The 1,623,537 shares included in the table assume that participants in the plans whose deferred compensation had been deemed to be invested in U.S. Bancorp common stock had elected to receive all of that deferred compensation in shares of U.S. Bancorp common stock on December 31, 2012. The U.S. Bank Executive Employee Deferred Compensation Plan (2005 Statement) and the U.S. Bank Outside Directors Deferred Compensation Plan (2005 Statement) are the Company’s only deferred compensation plans under which compensation may currently be deferred.

Additional Information

Additional information in response to this Item 12 can be found in the Company’s Proxy Statement under the heading “Security Ownership of Certain Beneficial Owners and Management.” That information is incorporated into this report by reference.

Item 13.

Certain Relationships and Related Transactions, and Director Independence

Information in response to this Item 13 can be found in the Company’s Proxy Statement under the headings “Director Independence” and “Certain Relationships and Related Transactions.” That information is incorporated into this report by reference.

Item 14.

Principal Accounting Fees and Services

Information in response to this Item 14 can be found in the Company’s Proxy Statement under the headings “Fees to Independent Auditor” and “Administration of Engagement of Independent Auditor.” That information is incorporated into this report by reference.

PART IV

Item 15.

Exhibits, Financial Statement Schedules

List of documents filed as part of this report

1. Financial Statements

•

Report of Management

•

Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements

•

Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting

•

U.S. Bancorp Consolidated Balance Sheet as of December 31, 2012 and 2011

•

U.S. Bancorp Consolidated Statement of Income for each of the three years in the period ended December 31, 2012

•

U.S. Bancorp Consolidated Statement of Comprehensive Income for each of the three years in the period ended December 31, 2012

•

U.S. Bancorp Consolidated Statement of Shareholders’ Equity for each of the three years in the period ended December 31, 2012

•

U.S. Bancorp Consolidated Statement of Cash Flows for each of the three years in the period ended December 31, 2012

•

Notes to Consolidated Financial Statements

•

U.S. Bancorp Consolidated Balance Sheet — Five Year Summary (Unaudited)

•

U.S. Bancorp Consolidated Statement of Income — Five Year Summary (Unaudited)

•

U.S. Bancorp Quarterly Consolidated Financial Data (Unaudited)

•

U.S. Bancorp Consolidated Daily Average Balance Sheet and Related Yields and Rates (Unaudited)

•

U.S. Bancorp Supplemental Financial Data (Unaudited)

2. Financial Statement Schedules

All financial statement schedules for the Company have been included in the consolidated financial statements or the related footnotes, or are either inapplicable or not required.

3. Exhibits

Shareholders may obtain a copy of any of the exhibits to this report upon payment of a fee covering the Company’s reasonable expenses in furnishing the exhibits. You can request exhibits by writing to Investor Relations, U.S. Bancorp, 800 Nicollet Mall, Minneapolis, Minnesota 55402.


Exhibit Number		Description

⁽¹⁾3.1		Restated Certificate of Incorporation, as amended. Filed as Exhibit 3.1 to Form 10-Q for the quarterly period ended March 31, 2012.

⁽¹⁾3.2		Amended and Restated Bylaws. Filed as Exhibit 3.2 to Form 8-K filed on January 20, 2010.

4.1		[Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, copies of instruments defining the rights of holders of long-term debt are not filed. U.S. Bancorp agrees to furnish a copy thereof to the SEC upon request.]

⁽¹⁾⁽²⁾10.1(a)		U.S. Bancorp 2001 Stock Incentive Plan. Filed as Exhibit 10.1 to Form 10-K for the year ended December 31, 2001.

⁽¹⁾⁽²⁾10.1(b)		Amendment No. 1 to U.S. Bancorp 2001 Stock Incentive Plan. Filed as Exhibit 10.2 to Form 10-K for the year ended December 31, 2002.

⁽¹⁾⁽²⁾10.2		U.S. Bancorp 2006 Executive Incentive Plan. Filed as Exhibit 10.1 to Form 8-K filed on April 21, 2006.

⁽¹⁾⁽²⁾10.3		U.S. Bancorp Executive Deferral Plan, as amended. Filed as Exhibit 10.7 to Form 10-K for the year ended December 31, 1999.

⁽¹⁾⁽²⁾10.4		Summary of Nonqualified Supplemental Executive Retirement Plan, as amended, of the former U.S. Bancorp. Filed as Exhibit 10.4 to Form 10-K for the year ended December 31, 2001.

⁽¹⁾⁽²⁾10.5		Form of Director Indemnification Agreement entered into with former directors of the former U.S. Bancorp. Filed as Exhibit 10.15 to Form 10-K for the year ended December 31, 1997.

⁽¹⁾⁽²⁾10.6(a)		U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit 10.16 to Form 10-K for the year ended December 31, 2002.

⁽¹⁾⁽²⁾10.6(b)		First, Second and Third Amendments of U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit 10.17 to Form 10-K for the year ended December 31, 2003.

⁽¹⁾⁽²⁾10.6(c)		Fourth Amendment of U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit 10.1 to Form 8-K filed on December 23, 2004.

⁽¹⁾⁽²⁾10.6(d)		Fifth Amendment of U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit 10.2 to Form 10-Q for the quarterly period ended March 31, 2005.

⁽¹⁾⁽²⁾10.6(e)		Sixth Amendment of U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit 10.1 to Form 8-K filed on October 20, 2005.

⁽¹⁾⁽²⁾10.6(f)		Seventh Amendment of U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit 10.1(g) to Form 8-K filed on January 7, 2009.

⁽¹⁾⁽²⁾10.6(g)		Eighth Amendment of U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit 10.1(h) to Form 8-K filed on January 7, 2009.

⁽¹⁾⁽²⁾10.6(h)		Ninth Amendment of U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit 10.1(i) to Form 8-K filed on January 7, 2009.

⁽¹⁾⁽²⁾10.6(i)		Tenth Amendment of U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit 10.1(j) to Form 8-K filed on January 7, 2009.



⁽¹⁾⁽²⁾10.6(j)		Eleventh Amendment of U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit 10.11(k) to Form 10-K for the year ended December 31, 2009.

⁽¹⁾⁽²⁾10.6(k)		Twelfth Amendment of U.S. Bancorp Non-Qualified Executive Retirement Plan. Filed as Exhibit 10.11(l) to Form 10-K for the year ended December 31, 2010.

⁽¹⁾⁽²⁾10.7(a)		U.S. Bancorp Executive Employees Deferred Compensation Plan. Filed as Exhibit 10.18 to Form 10-K for the year ended December 31, 2003.

⁽¹⁾⁽²⁾10.7(b)		2011 Amendment of U.S. Bancorp Executive Employees Deferred Compensation Plan. Filed as Exhibit 10.9(b) to Form 10-K for the year ended December 31, 2011.

⁽¹⁾⁽²⁾10.8(a)		U.S. Bancorp 2005 Executive Employees Deferred Compensation Plan. Filed as Exhibit 10.2 to Form 8-K filed on December 21, 2005.

⁽¹⁾⁽²⁾10.8(b)		First Amendment of U.S. Bancorp 2005 Executive Employees Deferred Compensation Plan effective as of January 31, 2009. Filed as Exhibit 10.2(b) to Form 8-K filed on January 7, 2009.

⁽¹⁾⁽²⁾10.8(c)		Second Amendment of U.S. Bancorp 2005 Executive Employees Deferred Compensation Plan effective as of January 1, 2010. Filed as Exhibit 10.13(c) to Form 10-K for the year ended December 31, 2010.

⁽¹⁾⁽²⁾10.8(d)		Third Amendment of U.S. Bancorp 2005 Executive Employees Deferred Compensation Plan. Filed as Exhibit 10.10(d) to Form 10-K for the year ended December 31, 2011.

⁽¹⁾⁽²⁾10.9(a)		U.S. Bancorp Outside Directors Deferred Compensation Plan. Filed as Exhibit 10.19 to Form 10-K for the year ended December 31, 2003.

⁽¹⁾⁽²⁾10.9(b)		2011 Amendment of U.S. Bancorp Outside Directors Deferred Compensation Plan. Filed as Exhibit 10.11(b) to Form 10-K for the year ended December 31, 2011.

⁽¹⁾⁽²⁾10.10(a)		U.S. Bancorp 2005 Outside Directors Deferred Compensation Plan. Filed as Exhibit 10.1 to Form 8-K filed on December 21, 2005.

⁽¹⁾⁽²⁾10.10(b)		First Amendment of U.S. Bancorp 2005 Outside Directors Deferred Compensation Plan effective as of January 31, 2009. Filed as Exhibit 10.3(b) to Form 8-K filed on January 7, 2009.

⁽¹⁾⁽²⁾10.10(c)		Second Amendment of U.S. Bancorp 2005 Outside Directors Deferred Compensation Plan. Filed as Exhibit 10.12(c) to Form 10-K for the year ended December 31, 2011.

⁽¹⁾⁽²⁾10.11(a)		Form of Executive Severance Agreement, effective November 16, 2001, between U.S. Bancorp and certain executive officers of U.S. Bancorp. Filed as Exhibit 10.12 to Form 10-K for the year ended December 31, 2001.

⁽¹⁾⁽²⁾10.11(b)		Form of Amendment to Executive Severance Agreements for IRC Section 409A Compliance dated as of December 31, 2008. Filed as Exhibit 10.6(b) to Form 8-K filed on January 7, 2009.

⁽¹⁾⁽²⁾10.12		Form of Executive Officer Stock Option Agreement with cliff and performance vesting under U.S. Bancorp 2001 Stock Incentive Plan. Filed as Exhibit 10.1 to Form 10-Q for the quarterly period ended September 30, 2004.

⁽¹⁾⁽²⁾10.13		Form of Executive Officer Stock Option Agreement with annual vesting under U.S. Bancorp 2001 Stock Incentive Plan. Filed as Exhibit 10.2 to Form 10-Q for the quarterly period ended September 30, 2004.

⁽¹⁾⁽²⁾10.14		Form of 2006 Executive Officer Stock Option Agreement with annual vesting under U.S. Bancorp 2001 Stock Incentive Plan. Filed as Exhibit 10.1 to Form 8-K filed on January 17, 2006.

⁽¹⁾⁽²⁾10.15		Form of Executive Officer Restricted Stock Award Agreement under U.S. Bancorp 2001 Stock Incentive Plan. Filed as Exhibit 10.3 to Form 10-Q for the quarterly period ended September 30, 2004.



⁽¹⁾⁽²⁾10.16		Form of Director Stock Option Agreement under U.S. Bancorp 2001 Stock Incentive Plan. Filed as Exhibit 10.4 to Form 10-Q for the quarterly period ended September 30, 2004.

⁽¹⁾⁽²⁾10.17(a)		Form of Director Restricted Stock Unit Award Agreement under U.S. Bancorp 2001 Stock Incentive Plan. Filed as Exhibit 10.5 to Form 10-Q for the quarterly period ended September 30, 2004.

⁽¹⁾⁽²⁾10.17(b)		Form of Amendment to Director Restricted Stock Unit Award Agreements under U.S. Bancorp 2001 Stock Incentive Plan dated as of December 31, 2008. Filed as Exhibit 10.5(b) to Form 8-K filed on January 7, 2009.

⁽¹⁾⁽²⁾10.18		Form of Executive Officer Restricted Stock Unit Award Agreement under U.S. Bancorp 2001 Stock Incentive Plan. Filed as Exhibit 10.6 to Form 10-Q for the quarterly period ended September 30, 2004.

⁽¹⁾⁽²⁾10.19		Offer of Employment to Richard C. Hartnack. Filed as Exhibit 10.3 to Form 10-Q for the quarterly period ended March 31, 2005.

⁽¹⁾⁽²⁾10.20(a)		Employment Agreement dated May 7, 2001, with Pamela A. Joseph. Filed as Exhibit 10.37 to Form 10-K for the year ended December 31, 2007.

⁽¹⁾⁽²⁾10.20(b)		Amendment to Employment Agreement with Pamela A. Joseph dated as of December 31, 2008. Filed as Exhibit 10.7(b) to Form 8-K filed on January 7, 2009.

⁽¹⁾⁽²⁾10.21		U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan. Filed as Exhibit 10.1 to Form 8-K filed on April 20, 2010.

⁽¹⁾⁽²⁾10.22		Form of 2007 Non-Qualified Stock Option Agreement for Executive Officers under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan. Filed as Exhibit 10.2 to Form 8-K filed on April 18, 2007.

⁽¹⁾⁽²⁾10.23		Form of Non-Qualified Stock Option Agreement for Executive Officers under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan to be used after December 31, 2008. Filed as Exhibit 10.8(a) to Form 8-K filed on January 7, 2009.

⁽¹⁾⁽²⁾10.24		Form of Non-Qualified Stock Option Agreement for Executive Officers (as approved January 16, 2012) under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan. Filed as Exhibit 10.2 to Form 8-K filed on January 18, 2012.

⁽¹⁾⁽²⁾10.25		Form of Non-Qualified Stock Option Agreement for Executive Officers (as approved November 14, 2012) under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan. Filed as Exhibit 10.2 to Form 8-K filed on November 19, 2012.

⁽¹⁾⁽²⁾10.26		Form of 2007 Restricted Stock Award Agreement for Executive Officers under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan. Filed as Exhibit 10.3 to Form 8-K filed on April 18, 2007.

⁽¹⁾⁽²⁾10.27		Form of Restricted Stock Award Agreement for Executive Officers under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan to be used after December 31, 2008. Filed as Exhibit 10.9(a) to Form 8-K filed on January 7, 2009.

⁽¹⁾⁽²⁾10.28		Form of Restricted Stock Award Agreement under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan. Filed as Exhibit 10.1 to Form 10-Q filed for the quarterly period ended September 30, 2012.

⁽¹⁾⁽²⁾10.29		Form of 2008 Restricted Stock Unit Award Agreement for Executive Officers under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan. Filed as Exhibit 10.1 to Form 8-K filed on January 17, 2008.



⁽¹⁾⁽²⁾10.30		Form of Restricted Stock Unit Award Agreement for Executive Officers under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan to be used after December 31, 2008. Filed as Exhibit 10.10(a) to Form 8-K filed on January 7, 2009.

⁽¹⁾⁽²⁾10.31		Form of Performance Restricted Stock Unit Award Agreement for Executive Officers under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan to be used after December 31, 2008. Filed as Exhibit 10.1 to Form 8-K filed on March 6, 2009.

⁽¹⁾⁽²⁾10.32		Form of Performance Restricted Stock Unit Award Agreement for Executive Officers (as approved February 14, 2011) under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan. Filed as Exhibit 10.1 to Form 8-K filed on February 16, 2011.

⁽¹⁾⁽²⁾10.33		Form of Performance Restricted Stock Unit Award Agreement for Executive Officers (as approved January 16, 2012) under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan. Filed as Exhibit 10.1 to Form 8-K filed on January 18, 2012.

⁽¹⁾⁽²⁾10.34		Form of Performance Restricted Stock Unit Award Agreement for Executive Officers (as approved November 14, 2012) under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan. Filed as Exhibit 10.1 to Form 8-K filed on November 19, 2012.

⁽¹⁾⁽²⁾10.35		Form of 2010 Retention Performance Restricted Stock Unit Award Agreement for Executive Officers under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan. Filed as Exhibit 10.1 to Form 8-K filed on February 18, 2010.

⁽¹⁾⁽²⁾10.36		Form of 2007 Restricted Stock Unit Award Agreement for Non-Employee Directors under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan. Filed as Exhibit 10.1 to Form 10-Q/A for the quarterly period ended September 30, 2007.

⁽¹⁾⁽²⁾10.37		Form of Restricted Stock Unit Award Agreement for Non-Employee Directors under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan to be used after December 31, 2008. Filed as Exhibit 10.11(a) to Form 8-K filed on January 7, 2009.

12		Statement re: Computation of Ratio of Earnings to Fixed Charges.

13		2012 Annual Report, pages 20 through 154 and 157.

21		Subsidiaries of the Registrant.

23		Consent of Ernst & Young LLP.

24		Power of Attorney.

31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

32		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

101		Financial statements from the Annual Report on Form 10-K of the Company for the year ended December 31, 2012, formatted in Extensible Business Reporting Language: (i) the Consolidated Balance Sheet, (ii) the Consolidated Statement of Income, (iii) the Consolidated Statement of Comprehensive Income, (iv) the Consolidated Statement of Shareholders’ Equity, (v) the Consolidated Statement of Cash Flows and (vi) the Notes to Consolidated Financial Statements.

(1)

Exhibit has been previously filed with the SEC and is incorporated herein as an exhibit by reference to the prior filing.

(2)

Management contracts or compensatory plans or arrangements.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on February 22, 2013, on its behalf by the undersigned, thereunto duly authorized.


U.S. BANCORP

By		/s/ RICHARD K. DAVIS

		Richard K. Davis
		Chairman, President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on February 22, 2013, by the following persons on behalf of the registrant and in the capacities indicated.

Signature and Title

/s/ RICHARD K. DAVIS

Richard K. Davis,

Chairman, President, and Chief Executive Officer

(principal executive officer)

/s/ ANDREW CECERE

Andrew Cecere,

Vice Chairman and Chief Financial Officer

(principal financial officer)

/s/ CRAIG E. GIFFORD

Craig E. Gifford,

Executive Vice President and Controller

(principal accounting officer)

DOUGLAS M. BAKER, JR.*

Douglas M. Baker, Jr., Director

Y. MARC BELTON*

Y. Marc Belton, Director

VICTORIA BUYNISKI GLUCKMAN*

Victoria Buyniski Gluckman, Director

ARTHUR D. COLLINS*

Arthur D. Collins, Jr., Director

ROLAND A. HERNANDEZ*

Roland A. Hernandez, Director

JOEL W. JOHNSON*

Joel W. Johnson, Director

OLIVIA F. KIRTLEY*

Olivia F. Kirtley, Director

JERRY W. LEVIN*

Jerry W. Levin, Director

Signature and Title

DAVID B. O’MALEY*

David B. O’Maley, Director

O’DELL M. OWENS, M.D., M.P.H.*

O’Dell M. Owens, M.D., M.P.H., Director

CRAIG D. SCHNUCK*

Craig D. Schnuck, Director

PATRICK T. STOKES*

Patrick T. Stokes, Director

DOREEN WOO HO*

Doreen Woo Ho, Director

*	Lee R. Mitau, by signing his name hereto, does hereby sign this document on behalf of each of the above named directors of the registrant pursuant to powers of attorney duly executed by such persons.

Dated: February 22, 2013



By:		/s/ LEE R. MITAU
		Lee R. Mitau
		Attorney-In-Fact Executive Vice President, General Counsel and Corporate Secretary

Statement re: Computation of Ratio of Earnings to Fixed Charges

EXHIBIT 12

Computation of Ratio of Earnings to Fixed Charges


Year Ended December 31 (Dollars in Millions)	2012		2011		2010		2009		2008
Earnings
1. Net income attributable to U.S. Bancorp	$	5,647	$	4,872	$	3,317	$	2,205	$	2,946
2. Applicable income taxes, including expense related to unrecognized tax positions		2,236		1,841		935		395		1,087

3. Net income attributable to U.S. Bancorp before income taxes (1 + 2)	$	7,883	$	6,713	$	4,252	$	2,600	$	4,033

4. Fixed charges:
a. Interest expense excluding interest on deposits*	$	1,447	$	1,676	$	1,651	$	1,818	$	2,805
b. Portion of rents representative of interest and amortization of debt expense		103		102		101		94		83

c. Fixed charges excluding interest on deposits (4a + 4b)		1,550		1,778		1,752		1,912		2,888
d. Interest on deposits		691		840		928		1,202		1,881

e. Fixed charges including interest on deposits (4c + 4d)	$	2,241	$	2,618	$	2,680	$	3,114	$	4,769

5. Amortization of interest capitalized	$	—	$	—	$	—	$	—	$	—
6. Earnings excluding interest on deposits (3 + 4c + 5)		9,433		8,491		6,004		4,512		6,921
7. Earnings including interest on deposits (3 + 4e + 5)		10,124		9,331		6,932		5,714		8,802
8. Fixed charges excluding interest on deposits (4c)		1,550		1,778		1,752		1,912		2,888
9. Fixed charges including interest on deposits (4e)		2,241		2,618		2,680		3,114		4,769

Ratio of Earnings to Fixed Charges
10. Excluding interest on deposits (line 6/line 8)		6.09		4.78		3.43		2.36		2.40
11. Including interest on deposits (line 7/line 9)		4.52		3.56		2.59		1.83		1.85

*	Excludes interest expense related to unrecognized tax positions

2012 Annual Report, pages 20 through 154 and 157

EXHIBIT 13

Management’s Discussion and Analysis

Overview

U.S. Bancorp and its subsidiaries (the “Company”) achieved record earnings in 2012, reflecting growth in net interest income and fee revenues, sound expense management and improved credit quality. The Company’s results demonstrated the strength of its diverse business model and prudent growth strategy, as it achieved these results during a year of modest economic growth and while absorbing the unfavorable impact of new regulation on both revenue and expense. The Company experienced solid growth in loans and deposits during 2012, as it continued to expand and deepen relationships with current customers, as well as acquire new customers and market share. The Company’s fee-based revenues also grew over the prior year, led by mortgage banking, which posted record production levels and earnings as a result of an expanded presence in the market and the favorable interest rate environment. With ongoing investments in its business line growth initiatives and small, strategic acquisitions, the Company remains positioned to continue to grow and leverage the expected slow, but steady, economic recovery.

The Company earned $5.6 billion in 2012, an increase of 15.9 percent over 2011. Growth in total net revenue of $1.2 billion (6.2 percent) was attributable to an increase in both net interest income and noninterest income. Net interest income increased as the result of higher average earning assets, continued growth in lower cost core deposit funding and the positive impact from long-term debt repricing. Noninterest income grew year-over-year as increases in mortgage banking revenue and other fee-based businesses were partially offset by expected decreases in revenue from recent legislative and regulatory actions. The Company’s total net charge-offs and nonperforming assets decreased throughout the year. The Company also continued to focus on effectively controlling expenses while making investments to increase revenue and enhance customer service, with an industry-leading efficiency ratio (the ratio of noninterest expense to taxable-equivalent net revenue, excluding net securities gains and losses) in 2012 of 51.5 percent. As a result, the Company’s return on average common equity was 16.2 percent, the highest among the Company’s peers.

With the Company’s growth in earnings during 2012, it continued to generate significant capital. The Company’s capital position remained strong. Using proposed rules for the Basel III standardized approach released June 2012, the Company’s Tier 1 common equity ratio was 8.1 percent at December 31, 2012 — above the Company’s targeted ratio of 8.0 percent and well above the minimum of 7.0 percent required in 2019 when these proposed rules are to be fully implemented. The Company had a Tier 1 common equity to risk-weighted assets ratio (using Basel I definition) of 9.0 percent and a Tier 1 capital ratio of 10.8 percent at December 31, 2012. In addition, at December 31, 2012, the Company’s total risk-based capital ratio was 13.1 percent, and its tangible common equity to risk-weighted assets ratio was 8.6 percent (refer to “Non-GAAP Financial Measures” for further information on the calculation of certain of these measures). Given the strength of its capital position and on-going ability to generate significant capital through earnings, the Company was able to return 62 percent of its earnings to common shareholders in the form of dividends and common share repurchases during 2012. Credit rating organizations rate the Company’s debt among the highest of its large domestic banking peers. This comparative financial strength provides the Company with favorable funding costs, strong liquidity and the ability to attract new customers, leading to growth in loans and deposits.

In 2012, the Company’s loans and deposits grew significantly. Average loans and deposits increased $13.9 billion (6.9 percent) and $22.6 billion (10.6 percent), respectively, over 2011. Loan growth reflected increases in commercial loans, including small business loans, residential mortgages, credit card loans and commercial real estate loans, partially offset by a modest decrease in other retail loans and a 19.3 percent decrease in loans covered by loss sharing agreements with the Federal Deposit Insurance Corporation (“FDIC”) (“covered” loans), which is a run-off portfolio. Deposit growth reflected the Company’s continued benefit from customer “flight-to-quality”.

The Company’s provision for credit losses decreased $461 million (19.7 percent) in 2012, compared with 2011. Net charge-offs decreased $746 million (26.2 percent) in 2012, compared with 2011, principally due to improvement in the commercial, commercial real estate and credit card portfolio classes. The provision for credit losses was $215 million less than net charge-offs in 2012, compared with $500 million less than net charge-offs in 2011.


20		U.S. BANCORP

TABLE 1

Selected Financial Data


Year Ended December 31 (Dollars and Shares in Millions, Except Per Share Data)	2012			2011			2010			2009			2008
Condensed Income Statement
Net interest income (taxable-equivalent basis) (a)	$	10,969		$	10,348		$	9,788		$	8,716		$	7,866
Noninterest income		9,334			8,791			8,438			8,403			7,789
Securities gains (losses), net		(15	)		(31	)		(78	)		(451	)		(978	)
Total net revenue		20,288			19,108			18,148			16,668			14,677
Noninterest expense		10,456			9,911			9,383			8,281			7,348
Provision for credit losses		1,882			2,343			4,356			5,557			3,096
Income before taxes		7,950			6,854			4,409			2,830			4,233
Taxable-equivalent adjustment		224			225			209			198			134
Applicable income taxes		2,236			1,841			935			395			1,087
Net income		5,490			4,788			3,265			2,237			3,012
Net (income) loss attributable to noncontrolling interests		157			84			52			(32	)		(66	)
Net income attributable to U.S. Bancorp	$	5,647		$	4,872		$	3,317		$	2,205		$	2,946
Net income applicable to U.S. Bancorp common shareholders	$	5,383		$	4,721		$	3,332		$	1,803		$	2,819
Per Common Share
Earnings per share	$	2.85		$	2.47		$	1.74		$	.97		$	1.62
Diluted earnings per share		2.84			2.46			1.73			.97			1.61
Dividends declared per share		.78			.50			.20			.20			1.70
Book value per share		18.31			16.43			14.36			12.79			10.47
Market value per share		31.94			27.05			26.97			22.51			25.01
Average common shares outstanding		1,887			1,914			1,912			1,851			1,742
Average diluted common shares outstanding		1,896			1,923			1,921			1,859			1,756
Financial Ratios
Return on average assets		1.65	%		1.53	%		1.16	%		.82	%		1.21	%
Return on average common equity		16.2			15.8			12.7			8.2			13.9
Net interest margin (taxable-equivalent basis) (a)		3.58			3.65			3.88			3.67			3.66
Efficiency ratio (b)		51.5			51.8			51.5			48.4			46.9
Net charge-offs as a percent of average loans outstanding		.97			1.41			2.17			2.08			1.10
Average Balances
Loans	$	215,374		$	201,427		$	193,022		$	185,805		$	165,552
Loans held for sale		7,847			4,873			5,616			5,820			3,914
Investment securities (c)		72,501			63,645			47,763			42,809			42,850
Earning assets		306,270			283,290			252,042			237,287			215,046
Assets		342,849			318,264			285,861			268,360			244,400
Noninterest-bearing deposits		67,241			53,856			40,162			37,856			28,739
Deposits		235,710			213,159			184,721			167,801			136,184
Short-term borrowings		28,549			30,703			33,719			29,149			38,237
Long-term debt		28,448			31,684			30,835			36,520			39,250
Total U.S. Bancorp shareholders’ equity		37,611			32,200			28,049			26,307			22,570
Period End Balances
Loans	$	223,329		$	209,835		$	197,061		$	194,755		$	184,955
Investment securities		74,528			70,814			52,978			44,768			39,521
Assets		353,855			340,122			307,786			281,176			265,912
Deposits		249,183			230,885			204,252			183,242			159,350
Long-term debt		25,516			31,953			31,537			32,580			38,359
Total U.S. Bancorp shareholders’ equity		38,998			33,978			29,519			25,963			26,300
Asset Quality
Nonperforming assets	$	2,671		$	3,774		$	5,048		$	5,907		$	2,624
Allowance for credit losses		4,733			5,014			5,531			5,264			3,639
Allowance for credit losses as a percentage of period-end loans		2.12	%		2.39	%		2.81	%		2.70	%		1.97	%
Capital Ratios
Tier 1 capital		10.8	%		10.8	%		10.5	%		9.6	%		10.6	%
Total risk-based capital		13.1			13.3			13.3			12.9			14.3
Leverage		9.2			9.1			9.1			8.5			9.8
Tangible common equity to tangible assets (d)		7.2			6.6			6.0			5.3			3.3
Tangible common equity to risk-weighted assets using Basel I definition (d)		8.6			8.1			7.2			6.1			3.7
Tier 1 common equity to risk-weighted assets using Basel I definition (d)		9.0			8.6			7.8			6.8			5.1
Tier 1 common equity to risk-weighted assets using Basel III proposals published prior to June 2012 (d)		–			8.2			7.3			–			–
Tier 1 common equity to risk-weighted assets approximated using proposed rules for the Basel III standardized approach released June 2012 (d)		8.1			–			–			–			–

(a)

Presented on a fully taxable-equivalent basis utilizing a tax rate of 35 percent.

(b)

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).

(c)

Excludes unrealized gains and losses on available-for-sale investment securities and any premiums or discounts recorded related to the transfer of investment securities at fair value from available-for-sale to held-to-maturity.

(d)

See Non-GAAP Financial Measures beginning on page 65.


U.S. BANCORP			21

Earnings Summary The Company reported net income attributable to U.S. Bancorp of $5.6 billion in 2012, or $2.84 per diluted common share, compared with $4.9 billion, or $2.46 per diluted common share, in 2011. Return on average assets and return on average common equity were 1.65 percent and 16.2 percent, respectively, in 2012, compared with 1.53 percent and 15.8 percent, respectively, in 2011. The Company’s results for 2012 included an $80 million expense accrual for a mortgage foreclosure-related regulatory settlement. The results for 2011 included a $263 million gain from the settlement of litigation related to the termination of a merchant processing referral agreement (“merchant settlement gain”), a $46 million gain related to the acquisition of First Community Bank of New Mexico (“FCB”) and a $130 million expense accrual related to mortgage servicing matters. The provision for credit losses was $215 million lower than net charge-offs for 2012, compared with $500 million lower than net charge-offs for 2011.

Total net revenue, on a taxable-equivalent basis, for 2012 was $1.2 billion (6.2 percent) higher than 2011, reflecting a 6.0 percent increase in net interest income and a 6.4 percent increase in noninterest income. Net interest income increased in 2012 as a result of an increase in average earning assets, continued growth in lower cost core deposit funding and the positive impact from long-term debt repricing. Noninterest income increased primarily due to higher mortgage banking revenue, trust and investment management fees, merchant processing services revenue, and commercial products revenue, partially offset by the 2011 merchant settlement gain and lower debit card revenue as a result of legislative changes.

Total noninterest expense in 2012 increased $545 million (5.5 percent), compared with 2011, primarily due to higher compensation expense, employee benefits costs and mortgage servicing review-related professional services costs.

Acquisitions In January 2012, the Company acquired the banking operations of BankEast, a subsidiary of BankEast Corporation, from the FDIC. This transaction did not include a loss sharing agreement. The Company acquired approximately $261 million of assets and assumed approximately $252 million of deposits from the FDIC with this transaction.

In November 2012, the Company acquired the hedge fund administration servicing business of Alternative Investment Solutions, LLC. The Company recorded approximately $108 million of assets, including intangibles, and approximately $3 million of liabilities with this transaction.

In December 2012, the Company acquired FSV Payment Systems, Inc., a prepaid card program manager with a proprietary processing platform. The Company recorded approximately $243 million of assets, including intangibles, and approximately $28 million of liabilities with this transaction.

In January 2011, the Company acquired the banking operations of FCB from the FDIC. The FCB transaction did not include a loss sharing agreement. The Company acquired 38 branch locations and approximately $1.8 billion in assets, assumed approximately $2.1 billion in liabilities, and received approximately $412 million in cash from the FDIC. The Company recognized a $46 million gain on this transaction during the first quarter of 2011.

Statement of Income Analysis

Net Interest Income Net interest income, on a taxable-equivalent basis, was $11.0 billion in 2012, compared with $10.3 billion in 2011 and $9.8 billion in 2010. The $621 million (6.0 percent) increase in net interest income in 2012, compared with 2011, was primarily the result of growth in average earning assets and lower cost core deposit funding, as well as the positive impact from long-term debt repricing. Average earning assets were $23.0 billion (8.1 percent) higher in 2012 than in 2011, driven by increases in loans and investment securities. Average deposits increased $22.6 billion (10.6 percent) in 2012, compared with 2011. The net interest margin in 2012 was 3.58 percent, compared with 3.65 percent in 2011 and 3.88 percent in 2010. The decrease in the net interest margin in 2012, compared with 2011, reflected higher average balances in lower-yielding investment securities and lower loan rates, partially offset by lower rates on deposits and long-term debt, and the inclusion of credit card balance transfer fees in interest income beginning in the first quarter of 2012. Refer to the “Interest Rate Risk Management” section for further information on the sensitivity of the Company’s net interest income to changes in interest rates.

Average total loans were $215.4 billion in 2012, compared with $201.4 billion in 2011. The $13.9 billion (6.9 percent) increase was driven by growth in commercial loans, residential mortgages, credit card loans and commercial real estate loans, partially offset by decreases in other retail loans and covered loans. Average commercial loans increased $9.2 billion (17.9 percent) year-over-year, primarily driven by higher demand from new and existing customers. Average residential mortgages increased $6.6 billion (19.5 percent), reflecting higher origination and refinancing activity due to the low interest rate environment. Average credit card balances increased $569 million (3.5 percent) in 2012, compared with 2011, reflecting the impact of the purchase of a credit card portfolio in the fourth quarter of 2011, partially offset by a portfolio sale in the third quarter of 2012. Growth in average commercial real estate balances of $991 million (2.8 percent) was primarily due to higher demand from new and existing customers. The $261 million (.5 percent) decrease in average other retail loans was primarily due to lower home equity and second mortgage and student loan balances, partially offset by higher installment loan and retail leasing balances. Average covered loans decreased $3.1 billion (19.3 percent) in 2012, compared with 2011.


22		U.S. BANCORP

TABLE 2

Analysis of Net Interest Income (a)


Year Ended December 31 (Dollars in Millions)	2012			2011			2010			2012 v 2011			2011 v 2010
Components of Net Interest Income
Income on earning assets (taxable-equivalent basis)	$	13,112		$	12,870		$	12,375		$	242		$	495
Expense on interest-bearing liabilities (taxable-equivalent basis)		2,143			2,522			2,587			(379	)		(65	)
Net interest income (taxable-equivalent basis)	$	10,969		$	10,348		$	9,788		$	621		$	560
Net interest income, as reported	$	10,745		$	10,123		$	9,579		$	622		$	544
Average Yields and Rates Paid
Earning assets yield (taxable-equivalent basis)		4.28	%		4.54	%		4.91	%		(.26	)%		(.37	)%
Rate paid on interest-bearing liabilities (taxable-equivalent basis)		.95			1.14			1.24			(.19	)		(.10	)
Gross interest margin (taxable-equivalent basis)		3.33	%		3.40	%		3.67	%		(.07	)%		(.27	)%
Net interest margin (taxable-equivalent basis)		3.58	%		3.65	%		3.88	%		(.07	)%		(.23	)%
Average Balances
Investment securities (b)	$	72,501		$	63,645		$	47,763		$	8,856		$	15,882
Loans		215,374			201,427			193,022			13,947			8,405
Earning assets		306,270			283,290			252,042			22,980			31,248
Interest-bearing liabilities		225,466			221,690			209,113			3,776			12,577

(a)

Interest and rates are presented on a fully taxable-equivalent basis utilizing a federal tax rate of 35 percent.

(b)

Average investment securities in 2012 were $8.9 billion (13.9 percent) higher than 2011, primarily due to purchases of government agency mortgage-backed securities, net of prepayments and maturities, as the Company continued to increase its on-balance sheet liquidity in response to anticipated regulatory requirements.

Average total deposits for 2012 were $22.6 billion (10.6 percent) higher than 2011. Average noninterest-bearing deposits in 2012 were $13.4 billion (24.9 percent) higher than 2011 due to growth in average balances in a majority of the lines of business, including Wholesale Banking and Commercial Real Estate, Wealth Management and Securities Services, and Consumer and Small Business Banking. Average total savings deposits were $7.3 billion (6.4 percent) higher in 2012, compared with 2011, primarily due to growth in Consumer and Small Business Banking balances resulting from continued strong participation in a product offering that includes multiple bank products in a package, and higher corporate trust balances. These increases were partially offset by lower government banking and broker-dealer balances. Average time certificates of deposit less than $100,000 were lower in 2012 by $728 million (4.8 percent), compared with 2011, a result of maturities and lower renewals. Average time deposits greater than $100,000 were $2.6 billion (8.8 percent) higher in 2012, compared with 2011. Time deposits greater than $100,000 are managed as an alternative to other funding sources such as wholesale borrowing, based largely on relative pricing.

The $560 million (5.7 percent) increase in net interest income in 2011, compared with 2010, was primarily the result of growth in average earning assets and lower cost core deposit funding. Average earning assets were $31.2 billion (12.4 percent) higher in 2011 compared with 2010, driven by increases in investment securities, loans and cash balances at the Federal Reserve reflected in other earning assets. Average deposits increased $28.4 billion (15.4 percent) in 2011, compared with 2010.

Average total loans increased $8.4 billion (4.4 percent) in 2011, compared with 2010, driven by growth in residential mortgages, commercial loans, commercial real estate loans and other retail loans, partially offset by lower covered loans and credit card loans. Average residential mortgages increased $6.0 billion (21.7 percent) resulting from the net effect of origination and prepayment activity in the portfolio during 2011 due to the low interest rate environment. Average commercial loans increased $4.6 billion (9.8 percent) in 2011, compared with 2010, primarily driven by higher demand from new and existing customers, including small business. Growth in average commercial real estate balances of $1.2 billion (3.6 percent) was primarily due to the FCB acquisition. The $513 million (1.1 percent) increase in average other retail loans in 2011, compared with 2010, was primarily due to higher automobile and installment loans, and retail leasing balances, partially offset by lower home equity and second mortgage balances. Average credit card balances decreased $319 million (1.9 percent), as a result of consumers spending less and paying down their balances. Average covered loans decreased $3.6 billion (18.2 percent) in 2011, compared with 2010.


U.S. BANCORP			23

TABLE 3

Net Interest Income — Changes Due to Rate and Volume (a)


	2012 v 2011									2011 v 2010
Year Ended December 31 (Dollars in Millions)	Volume			Yield/Rate			Total			Volume			Yield/Rate			Total
Increase (decrease) in
Interest Income
Investment securities	$	275		$	(316	)	$	(41	)	$	586		$	(369	)	$	217
Loans held for sale		122			(40	)		82			(32	)		(14	)		(46	)
Loans
Commercial		369			(272	)		97			193			(99	)		94
Commercial real estate		45			(29	)		16			56			36			92
Residential mortgages		318			(123	)		195			311			(115	)		196
Credit card		54			101			155			(30	)		52			22
Other retail		(14	)		(147	)		(161	)		30			(137	)		(107	)
Total loans, excluding covered loans		772			(470	)		302			560			(263	)		297
Covered loans		(179	)		77			(102	)		(179	)		122			(57	)
Total loans		593			(393	)		200			381			(141	)		240
Other earning assets		(52	)		53			1			226			(142	)		84
Total earning assets		938			(696	)		242			1,161			(666	)		495
Interest Expense
Interest-bearing deposits
Interest checking		4			(23	)		(19	)		5			(17	)		(12	)
Money market accounts		3			(17	)		(14	)		18			(74	)		(56	)
Savings accounts		12			(58	)		(46	)		33			(42	)		(9	)
Time certificates of deposit less than $100,000		(14	)		(28	)		(42	)		(25	)		12			(13	)
Time deposits greater than $100,000		26			(54	)		(28	)		25			(23	)		2
Total interest-bearing deposits		31			(180	)		(149	)		56			(144	)		(88	)
Short-term borrowings		(38	)		(52	)		(90	)		(50	)		31			(19	)
Long-term debt		(117	)		(23	)		(140	)		30			12			42
Total interest-bearing liabilities		(124	)		(255	)		(379	)		36			(101	)		(65	)
Increase (decrease) in net interest income	$	1,062		$	(441	)	$	621		$	1,125		$	(565	)	$	560

(a)

This table shows the components of the change in net interest income by volume and rate on a taxable-equivalent basis utilizing a tax rate of 35 percent. This table does not take into account the level of noninterest-bearing funding, nor does it fully reflect changes in the mix of assets and liabilities. The change in interest not solely due to changes in volume or rates has been allocated on a pro-rata basis to volume and yield/rate.

Average investment securities in 2011 were $15.9 billion (33.3 percent) higher than 2010, primarily due to planned purchases of U.S. Treasury and government agency mortgage-backed securities, as the Company increased its on-balance sheet liquidity in response to anticipated regulatory requirements.

Average total deposits for 2011 were $28.4 billion (15.4 percent) higher than 2010. Excluding deposits from acquisitions, 2011 average total deposits increased $19.3 billion (10.5 percent) over 2010. Average noninterest-bearing deposits in 2011 were $13.7 billion (34.1 percent) higher than 2010, primarily due to growth in Wholesale Banking and Commercial Real Estate, and Wealth Management and Securities Services balances. Average total savings deposits were $13.8 billion (13.7 percent) higher in 2011, compared with 2010, primarily due to growth in corporate and institutional trust balances, as well as an increase in Consumer and Small Business Banking balances. These increases were partially offset by lower broker-dealer balances. Average time certificates of deposit less than $100,000 were lower in 2011 by $1.4 billion (8.4 percent), compared with 2010, a result of maturities and lower renewals. Average time deposits greater than $100,000 were $2.3 billion (8.5 percent) higher in 2011, compared with 2010, primarily due to acquisitions.

Provision for Credit Losses The provision for credit losses reflects changes in the size and credit quality of the entire portfolio of loans. The Company maintains an allowance for credit losses considered appropriate by management for probable and estimable incurred losses, based on factors discussed in the “Analysis and Determination of Allowance for Credit Losses” section.

In 2012, the provision for credit losses was $1.9 billion, compared with $2.3 billion and $4.4 billion in 2011 and 2010, respectively. The provision for credit losses was lower than net charge-offs by $215 million in 2012 and $500 million in 2011, and exceeded net charge-offs by $175 million in 2010. The $461 million (19.7 percent) decrease in the provision for credit losses in 2012, compared with 2011, reflected improving credit trends and the underlying risk profile of the loan portfolio as economic conditions continued to slowly improve, partially offset by portfolio growth. Accruing loans ninety days or more past due decreased by $183 million (21.7 percent) (excluding covered loans) from


24		U.S. BANCORP

December 31, 2011 to December 31, 2012, reflecting improvement in residential mortgages, credit card and other retail loan portfolios during 2012. Nonperforming assets decreased $486 million (18.9 percent) (excluding covered assets) from December 31, 2011 to December 31, 2012, led by reductions in nonperforming construction and development loans of $307 million (56.3 percent), as the Company continued to resolve and reduce exposure to these problem assets, as well as improvement in other commercial loan portfolios. Net charge-offs decreased $746 million (26.2 percent) from 2011, due to the improvement in most loan portfolios as economic conditions continued to slowly improve.

The $2.0 billion (46.2 percent) decrease in the provision for credit losses in 2011, compared with 2010, reflected improving credit trends and the underlying risk profile of the loan portfolio as economic conditions continued to stabilize in 2011, partially offset by portfolio growth. Accruing loans ninety days or more past due decreased by $251 million (22.9 percent) (excluding covered loans) from December 31, 2010 to December 31, 2011, reflecting a moderation in the level of stress in economic conditions during 2011 as compared to 2010. Nonperforming assets decreased $777 million (23.2 percent) (excluding covered assets) from December 31, 2010 to December 31, 2011, led by a reduction in commercial real estate nonperforming assets of $394 million (30.5 percent), as the Company continued to resolve and reduce exposure to these assets. Net charge-offs decreased $1.3 billion (32.0 percent) in 2011 from 2010, due to the improvement in the commercial, commercial real estate, credit card and other retail loan portfolios.

Refer to “Corporate Risk Profile” for further information on the provision for credit losses, net charge-offs, nonperforming assets and other factors considered by the Company in assessing the credit quality of the loan portfolio and establishing the allowance for credit losses.

Noninterest Income Noninterest income in 2012 was $9.3 billion, compared with $8.8 billion in 2011 and $8.4 billion in 2010. The $559 million (6.4 percent) increase in 2012 over 2011 was due to strong mortgage banking revenue growth of 96.5 percent, principally due to strong origination and sales revenue, as well as an increase in loan servicing revenue. In addition, merchant processing services revenue and investment products fees and commissions increased 3.0 percent and 16.3 percent, respectively, primarily due to higher transaction volumes. Trust and investment management fees increased 5.5 percent due to improved market conditions and business expansion. Commercial products revenue was 4.4 percent higher, principally driven by increases in high-grade bond underwriting fees and commercial loan fees. Net securities losses were 51.6 percent lower in 2012, compared with 2011, primarily due to higher realized gains on securities sold in 2012. Offsetting these positive variances was a 16.9 percent decrease in credit and debit card revenue due to lower debit card interchange fees as a result of 2011 legislation (estimated impact of $328 million for 2012 and $77 million for 2011), net of mitigation efforts, and the impact of the inclusion of credit card balance transfer fees in interest income beginning in the first quarter of 2012. ATM processing services revenue was lower 23.5 percent, due to excluding surcharge fees the Company passes through to others from revenue, beginning in the first quarter of 2012, rather than reporting those amounts in occupancy expense as in previous periods. Other income also decreased 26.5 percent, primarily due to the 2011 merchant settlement gain, gain on the FCB acquisition and gains related to the Company’s investment in Visa Inc., and a 2012 equity-method investment charge, partially offset by a 2012 gain on the sale of a credit card portfolio.

TABLE 4

Noninterest Income


Year Ended December 31 (Dollars in Millions)	2012			2011			2010			2012 v 2011			2011 v 2010
Credit and debit card revenue	$	892		$	1,073		$	1,091			(16.9	)%		(1.6	)%
Corporate payment products revenue		744			734			710			1.4			3.4
Merchant processing services		1,395			1,355			1,253			3.0			8.1
ATM processing services		346			452			423			(23.5	)		6.9
Trust and investment management fees		1,055			1,000			1,080			5.5			(7.4	)
Deposit service charges		653			659			710			(.9	)		(7.2	)
Treasury management fees		541			551			555			(1.8	)		(.7	)
Commercial products revenue		878			841			771			4.4			9.1
Mortgage banking revenue		1,937			986			1,003			96.5			(1.7	)
Investment products fees and commissions		150			129			111			16.3			16.2
Securities gains (losses), net		(15	)		(31	)		(78	)		51.6			60.3
Other		743			1,011			731			(26.5	)		38.3
Total noninterest income	$	9,319		$	8,760		$	8,360			6.4	%		4.8	%


U.S. BANCORP			25

The $400 million (4.8 percent) increase in noninterest income in 2011 over 2010 was due to higher payments-related revenues of 3.5 percent due to growth in transaction volumes and new business initiatives, partially offset by a decline in credit and debit card revenue due to the impact of legislative changes to debit card interchange fees beginning in the fourth quarter of 2011; higher ATM processing services income of 6.9 percent largely due to increased transaction volumes; an increase in commercial products revenue of 9.1 percent due to higher commercial leasing revenue, syndication fees and other commercial loan fees; a 16.2 percent increase in investment products fees and commissions due to business initiatives; and lower net securities losses of 60.3 percent, primarily due to lower impairments and an increase in other income. The increase in other income of 38.3 percent reflected the 2011 merchant settlement gain, the gain on the FCB acquisition and gains related to the Company’s investment in Visa Inc., in addition to higher retail lease residual revenue, partially offset by a gain recognized on the exchange of the Company’s proprietary long-term mutual fund business for an equity interest in Nuveen Investments in 2010. Offsetting these positive variances was a decrease in deposit service charges of 7.2 percent as a result of 2010 legislative and pricing changes. Trust and investment management fees declined 7.4 percent as a result of the sale of the Company’s proprietary long-term mutual fund business and lower money market investment management fees, due to the low interest rate environment, partially offset by the positive impact of a securitization trust administration acquisition and improved equity market conditions. Mortgage banking revenue decreased 1.7 percent, principally due to lower origination and sales revenue, partially offset by higher loan servicing revenue and a favorable net change in the valuation of mortgage servicing rights (“MSRs”) and related economic hedging activities.

Noninterest Expense Noninterest expense in 2012 was $10.5 billion, compared with $9.9 billion in 2011 and $9.4 billion in 2010. The Company’s efficiency ratio was 51.5 percent in 2012, compared with 51.8 percent in 2011. The $545 million (5.5 percent) increase in noninterest expense in 2012 over 2011 was principally due to higher compensation expense, employee benefits expense and professional services expense. Compensation expense increased 6.9 percent, primarily as a result of growth in staffing for business initiatives and mortgage servicing-related activities, in addition to higher commissions and merit increases. Employee benefits expense increased 11.8 percent principally due to higher pension and medical insurance costs and staffing levels. Professional services expense increased 38.4 percent principally due to mortgage servicing review-related projects. Technology and communications expense was 8.3 percent higher due to business expansion and technology projects. Other expense increased 2.2 percent in 2012, from 2011, reflecting the $80 million expense accrual for a mortgage foreclosure-related regulatory settlement, higher regulatory and insurance-related costs and an accrual recorded by the Company related to its portion of obligations associated with Visa Inc., partially offset by a $130 million expense accrual related to mortgage servicing matters recorded in 2011, lower FDIC assessments and lower costs related to other real estate owned. These increases were partially offset by a decrease of 8.2 percent in net occupancy and equipment expense, principally reflecting the change in presentation of ATM surcharge revenue passed through to others, and a 8.4 percent decrease in other intangibles expense due to the reduction or completion of amortization of certain intangibles.

The $528 million (5.6 percent) increase in noninterest expense in 2011 over 2010 was principally due to increased compensation, employee benefits, net occupancy and equipment, and professional services expenses, partially offset by a decrease in other intangibles expense. Compensation expense increased 6.9 percent, primarily due to an increase in

TABLE 5

Noninterest Expense


Year Ended December 31 (Dollars in Millions)	2012			2011			2010			2012 v 2011			2011 v 2010
Compensation	$	4,320		$	4,041		$	3,779			6.9	%		6.9	%
Employee benefits		945			845			694			11.8			21.8
Net occupancy and equipment		917			999			919			(8.2	)		8.7
Professional services		530			383			306			38.4			25.2
Marketing and business development		388			369			360			5.1			2.5
Technology and communications		821			758			744			8.3			1.9
Postage, printing and supplies		304			303			301			.3			.7
Other intangibles		274			299			367			(8.4	)		(18.5	)
Other		1,957			1,914			1,913			2.2			.1
Total noninterest expense	$	10,456		$	9,911		$	9,383			5.5	%		5.6	%
Efficiency ratio (a)		51.5	%		51.8	%		51.5	%

(a)

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.


26		U.S. BANCORP

staffing related to branch expansion and other business initiatives, and merit increases. Employee benefits expense increased 21.8 percent due to higher pension costs and the impact of additional staffing. Net occupancy and equipment expense increased 8.7 percent, principally due to business expansion and technology initiatives. Professional services expense increased 25.2 percent due to mortgage servicing-related and other projects across multiple business lines. Other intangibles expense decreased 18.5 percent due to the reduction or completion of amortization of certain intangibles. Other expense was essentially flat and reflected the $130 million expense accrual related to mortgage servicing matters recorded in 2011, offset by lower conversion costs and insurance and litigation related costs.

Pension Plans Because of the long-term nature of pension plans, the related accounting is complex and can be impacted by several factors, including investment funding policies, accounting methods and actuarial assumptions.

The Company’s pension accounting reflects the long-term nature of the benefit obligations and the investment horizon of plan assets. Amounts recorded in the financial statements reflect actuarial assumptions about participant benefits and plan asset returns. Changes in actuarial assumptions and differences in actual plan experience compared with actuarial assumptions are deferred and recognized in expense in future periods. Differences related to participant benefits are recognized in expense over the future service period of the employees. Differences related to the expected return on plan assets are included in expense over a period of approximately twelve years.

The Company expects pension expense to increase $158 million in 2013, primarily driven by a $92 million increase related to a decrease in the discount rate, a $51 million increase related to the recognition of deferred actuarial losses from previous years and a $12 million increase related to lower future expected returns on plan assets. If performance of plan assets equals the actuarially-assumed long-term expected return, the cumulative asset return difference not yet being amortized will not have a significant incremental impact on pension expense in future years. Because of the complexity of forecasting pension plan activities, the accounting methods utilized for pension plans, the Company’s ability to respond to factors affecting the plans and the hypothetical nature of actuarial assumptions, actual pension expense will differ from these amounts.

Refer to Note 16 of the Notes to the Consolidated Financial Statements for further information on the Company’s pension plan funding practices, investment policies and asset allocation strategies, and accounting policies for pension plans.

The following table shows an analysis of hypothetical changes in the long-term rate of return (“LTROR”) and discount rate:


LTROR (Dollars in Millions)	Down 100 Basis Points			Up 100 Basis Points
Incremental benefit (expense)	$	(24	)	$	24
Percent of 2012 net income		(.26	)%		.26	%
Discount Rate (Dollars in Millions)	Down 100 Basis Points			Up 100 Basis Points
Incremental benefit (expense)	$	(115	)	$	92
Percent of 2012 net income		(1.26	)%		1.01	%

Income Tax Expense The provision for income taxes was $2.2 billion (an effective rate of 28.9 percent) in 2012, compared with $1.8 billion (an effective rate of 27.8 percent) in 2011 and $935 million (an effective rate of 22.3 percent) in 2010. The increase in the effective tax rate over 2011 principally reflected the impact of higher pretax earnings year-over-year.

For further information on income taxes, refer to Note 18 of the Notes to Consolidated Financial Statements.

Balance Sheet Analysis

Average earning assets were $306.3 billion in 2012, compared with $283.3 billion in 2011. The increase in average earning assets of $23.0 billion (8.1 percent) was primarily due to an increase in loan balances of $13.9 billion (6.9 percent) and planned increases in investment securities of $8.9 billion (13.9 percent).

For average balance information, refer to Consolidated Daily Average Balance Sheet and Related Yields and Rates on pages 142 and 143.

Loans The Company’s loan portfolio was $223.3 billion at December 31, 2012, an increase of $13.5 billion (6.4 percent) from December 31, 2011. The increase was driven by growth in commercial loans of $9.6 billion (16.9 percent), residential mortgages of $6.9 billion (18.7 percent) and commercial real estate loans of $1.1 billion (3.1 percent), partially offset by decreases in covered loans of $3.5 billion (23.5 percent), credit card loans of $245 million (1.4 percent), reflecting the impact of the sale of a branded portfolio in 2012, and other retail loans of $395 million (.8 percent). Table 6 provides a summary of the loan distribution by product type, while Table 12 provides a summary of the selected loan maturity distribution by loan category. Average total loans increased $13.9 billion (6.9 percent) in 2012, compared with 2011. The increase was due to growth in most loan portfolio classes in 2012.


U.S. BANCORP			27

Commercial Commercial loans, including lease financing, increased $9.6 billion (16.9 percent) as of December 31, 2012, compared with December 31, 2011. Average commercial loans increased $9.2 billion (17.9 percent) in 2012, compared with 2011. The growth was primarily driven by higher demand from new and existing customers. Table 7 provides a summary of commercial loans by industry and geographical locations.

Commercial Real Estate The Company’s portfolio of commercial real estate loans, which includes commercial mortgages and construction and development loans, increased $1.1 billion (3.1 percent) at December 31, 2012, compared with December 31, 2011. Average commercial real estate loans increased $991 million (2.8 percent) in 2012, compared with 2011. The increases reflected higher demand from new and existing customers. Table 8 provides a summary of commercial real estate loans by property type and geographical location. The collateral for $1.7 billion of commercial real estate loans included in covered loans at December 31, 2012 was in California, compared with $2.5 billion at December 31, 2011.

The Company classifies loans as construction loans until the completion of the construction phase. Following construction, if permanent financing is provided by the Company, the loan is reclassified to the commercial mortgage category. In 2012, approximately $978 million of construction loans were reclassified to the commercial mortgage category for bridge financing after completion of the construction phase. At December 31, 2012 and 2011, $225 million and $289 million, respectively, of tax-exempt industrial development loans were secured by real estate. The Company’s commercial mortgage and construction and development loans had unfunded commitments of $9.0 billion and $7.0 billion at December 31, 2012 and 2011, respectively.

The Company also finances the operations of real estate developers and other entities with operations related to real estate. These loans are not secured directly by real estate but are subject to terms and conditions similar to commercial loans. These loans were included in the commercial loan category and totaled $3.1 billion and $1.9 billion at December 31, 2012 and 2011, respectively.

TABLE 6

Loan Portfolio Distribution


	2012					2011					2010					2009					2008
At December 31 (Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total			Amount		Percent of Total			Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	60,742		27.2	%	$	50,734		24.2	%	$	42,272		21.5	%	$	42,255		21.7	%	$	49,759		26.9	%
Lease financing		5,481		2.5			5,914		2.8			6,126		3.1			6,537		3.4			6,859		3.7
Total commercial		66,223		29.7			56,648		27.0			48,398		24.6			48,792		25.1			56,618		30.6
Commercial Real Estate
Commercial mortgages		31,005		13.9			29,664		14.1			27,254		13.8			25,306		13.0			23,434		12.7
Construction and development		5,948		2.6			6,187		3.0			7,441		3.8			8,787		4.5			9,779		5.3
Total commercial real estate		36,953		16.5			35,851		17.1			34,695		17.6			34,093		17.5			33,213		18.0
Residential Mortgages
Residential mortgages		32,648		14.6			28,669		13.7			24,315		12.3			20,581		10.6			18,232		9.9
Home equity loans, first liens		11,370		5.1			8,413		4.0			6,417		3.3			5,475		2.8			5,348		2.9
Total residential mortgages		44,018		19.7			37,082		17.7			30,732		15.6			26,056		13.4			23,580		12.8
Credit Card		17,115		7.7			17,360		8.3			16,803		8.5			16,814		8.6			13,520		7.3
Other Retail
Retail leasing		5,419		2.4			5,118		2.4			4,569		2.3			4,568		2.3			5,126		2.8
Home equity and second mortgages		16,726		7.5			18,131		8.6			18,940		9.6			19,439		10.0			19,177		10.3
Revolving credit		3,332		1.5			3,344		1.6			3,472		1.8			3,506		1.8			3,205		1.7
Installment		5,463		2.4			5,348		2.6			5,459		2.8			5,455		2.8			5,525		3.0
Automobile		12,593		5.6			11,508		5.5			10,897		5.5			9,544		4.9			9,212		5.0
Student		4,179		1.9			4,658		2.2			5,054		2.5			4,629		2.4			4,603		2.5
Total other retail		47,712		21.3			48,107		22.9			48,391		24.5			47,141		24.2			46,848		25.3
Total loans, excluding covered loans		212,021		94.9			195,048		93.0			179,019		90.8			172,896		88.8			173,779		94.0
Covered Loans		11,308		5.1			14,787		7.0			18,042		9.2			21,859		11.2			11,176		6.0
Total loans	$	223,329		100.0	%	$	209,835		100.0	%	$	197,061		100.0	%	$	194,755		100.0	%	$	184,955		100.0	%


28		U.S. BANCORP

TABLE 7

Commercial Loans by Industry Group and Geography


	December 31, 2012					December 31, 2011
(Dollars in Millions)	Loans		Percent			Loans		Percent
Industry Group
Manufacturing	$	9,518		14.4	%	$	8,085		14.3	%
Finance and insurance		6,579		9.9			5,749		10.1
Wholesale trade		6,297		9.5			5,485		9.7
Real estate, rental and leasing		5,855		8.8			4,229		7.5
Retail trade		4,735		7.2			3,683		6.5
Healthcare and social assistance		4,733		7.1			3,850		6.8
Public administration		4,709		7.1			3,695		6.5
Transport and storage		2,549		3.9			2,409		4.3
Information		2,203		3.3			2,115		3.7
Professional, scientific and technical services		2,185		3.3			1,932		3.4
Arts, entertainment and recreation		2,124		3.2			2,046		3.6
Mining		2,122		3.2			1,987		3.5
Educational services		1,964		3.0			1,422		2.5
Other services		1,670		2.5			1,760		3.1
Agriculture, forestry, fishing and hunting		1,553		2.4			1,429		2.5
Utilities		1,390		2.1			1,272		2.3
Other		6,037		9.1			5,500		9.7
Total	$	66,223		100.0	%	$	56,648		100.0	%
Geography
California	$	8,081		12.2	%	$	6,664		11.8	%
Colorado		2,722		4.1			2,292		4.0
Illinois		3,544		5.3			3,110		5.5
Minnesota		4,720		7.1			3,968		7.0
Missouri		2,922		4.4			2,499		4.4
Ohio		3,240		4.9			3,050		5.4
Oregon		1,792		2.7			1,514		2.7
Washington		2,626		4.0			2,568		4.5
Wisconsin		2,727		4.1			2,357		4.2
Iowa, Kansas, Nebraska, North Dakota, South Dakota		4,244		6.4			3,586		6.3
Arkansas, Indiana, Kentucky, Tennessee		3,545		5.4			3,246		5.7
Idaho, Montana, Wyoming		1,096		1.7			1,113		2.0
Arizona, Nevada, New Mexico, Utah		2,435		3.7			2,351		4.1
Total banking region		43,694		66.0			38,318		67.6
Florida, Michigan, New York, Pennsylvania, Texas		11,082		16.7			9,204		16.3
All other states		11,447		17.3			9,126		16.1
Total outside Company’s banking region		22,529		34.0			18,330		32.4
Total	$	66,223		100.0	%	$	56,648		100.0	%

Residential Mortgages Residential mortgages held in the loan portfolio at December 31, 2012, increased $6.9 billion (18.7 percent) over December 31, 2011. Average residential mortgages increased $6.6 billion (19.5 percent) in 2012, compared with 2011. The growth reflected origination and refinancing activity due to the low interest rate environment. Residential mortgages originated and placed in the Company’s loan portfolio are primarily well secured jumbo mortgages to borrowers with high credit quality. The Company generally retains portfolio loans through maturity; however, the Company’s intent may change over time based upon various factors such as ongoing asset/liability management activities, assessment of product profitability, credit risk, liquidity needs, and capital implications. If the Company’s intent or ability to hold an existing portfolio loan changes, it is transferred to loans held for sale.

Credit Card Total credit card loans decreased $245 million (1.4 percent) at December 31, 2012, compared with December 31, 2011, reflecting the impact of the sale of a branded credit card portfolio during the third quarter of 2012 and customers paying down their balances. Average credit card balances increased $569 million (3.5 percent) in 2012, compared with 2011, reflecting the impact of the purchase of a credit card portfolio in the fourth quarter of 2011, partially offset by the portfolio sale in the third quarter of 2012.


U.S. BANCORP			29

TABLE 8

Commercial Real Estate Loans by Property Type and Geography


	December 31, 2012					December 31, 2011
(Dollars in Millions)	Loans		Percent			Loans		Percent
Property Type
Business owner occupied	$	11,405		30.9	%	$	11,756		32.8	%
Commercial property
Industrial		1,586		4.3			1,561		4.4
Office		4,833		13.1			4,590		12.8
Retail		4,537		12.3			4,402		12.3
Other commercial		3,735		10.1			3,632		10.1
Homebuilders
Condominiums		146		.4			283		.8
Other residential		996		2.7			988		2.8
Multi-family		6,857		18.5			6,293		17.5
Hotel/motel		2,569		6.9			2,041		5.7
Health care facilities		289		.8			305		.8
Total	$	36,953		100.0	%	$	35,851		100.0	%
Geography
California	$	8,039		21.8	%	$	7,634		21.3	%
Colorado		1,644		4.5			1,569		4.4
Illinois		1,555		4.2			1,411		3.9
Minnesota		1,958		5.3			1,891		5.3
Missouri		1,560		4.2			1,599		4.4
Ohio		1,512		4.1			1,436		4.0
Oregon		1,921		5.2			1,961		5.5
Washington		3,586		9.7			3,540		9.9
Wisconsin		2,011		5.4			1,892		5.3
Iowa, Kansas, Nebraska, North Dakota, South Dakota		2,349		6.4			2,295		6.4
Arkansas, Indiana, Kentucky, Tennessee		1,886		5.1			1,736		4.8
Idaho, Montana, Wyoming		1,156		3.1			1,183		3.3
Arizona, Nevada, New Mexico, Utah		2,958		8.0			3,189		8.9
Total banking region		32,135		87.0			31,336		87.4
Florida, Michigan, New York, Pennsylvania, Texas		2,405		6.5			2,470		6.9
All other states		2,413		6.5			2,045		5.7
Total outside Company’s banking region		4,818		13.0			4,515		12.6
Total	$	36,953		100.0	%	$	35,851		100.0	%

Other Retail Total other retail loans, which include retail leasing, home equity and second mortgages and other retail loans, decreased $395 million (.8 percent) at December 31, 2012, compared with December 31, 2011. Average other retail loans decreased $261 million (.5 percent) in 2012, compared with 2011. The decreases were primarily due to lower home equity and second mortgages and student loan balances, partially offset by higher automobile and installment loans, and retail leasing balances.


30		U.S. BANCORP

TABLE 9

Residential Mortgages by Geography


	December 31, 2012					December 31, 2011
(Dollars in Millions)	Loans		Percent			Loans		Percent
California	$	6,022		13.7	%	$	4,339		11.7	%
Colorado		2,674		6.1			2,354		6.3
Illinois		2,882		6.5			2,560		6.9
Minnesota		3,521		8.0			2,955		8.0
Missouri		2,064		4.7			1,849		5.0
Ohio		2,301		5.2			2,051		5.5
Oregon		1,836		4.2			1,541		4.2
Washington		2,543		5.8			2,101		5.7
Wisconsin		1,482		3.4			1,325		3.6
Iowa, Kansas, Nebraska, North Dakota, South Dakota		2,049		4.6			1,759		4.7
Arkansas, Indiana, Kentucky, Tennessee		3,233		7.3			2,822		7.6
Idaho, Montana, Wyoming		989		2.2			825		2.2
Arizona, Nevada, New Mexico, Utah		2,753		6.3			2,281		6.2
Total banking region		34,349		78.0			28,762		77.6
Florida, Michigan, New York, Pennsylvania, Texas		4,329		9.9			3,819		10.3
All other states		5,340		12.1			4,501		12.1
Total outside Company’s banking region		9,669		22.0			8,320		22.4
Total	$	44,018		100.0	%	$	37,082		100.0	%

TABLE 10

Credit Card Loans by Geography


	December 31, 2012					December 31, 2011
(Dollars in Millions)	Loans		Percent			Loans		Percent
California	$	1,757		10.3	%	$	1,719		9.9	%
Colorado		665		3.9			670		3.9
Illinois		796		4.6			791		4.5
Minnesota		1,196		7.0			1,193		6.9
Missouri		616		3.6			619		3.6
Ohio		1,071		6.3			1,326		7.6
Oregon		597		3.5			623		3.6
Washington		771		4.5			849		4.9
Wisconsin		972		5.7			959		5.5
Iowa, Kansas, Nebraska, North Dakota, South Dakota		862		5.0			863		5.0
Arkansas, Indiana, Kentucky, Tennessee		1,342		7.8			1,353		7.8
Idaho, Montana, Wyoming		352		2.1			377		2.2
Arizona, Nevada, New Mexico, Utah		794		4.6			788		4.5
Total banking region		11,791		68.9			12,130		69.9
Florida, Michigan, New York, Pennsylvania, Texas		2,884		16.8			2,923		16.8
All other states		2,440		14.3			2,307		13.3
Total outside Company’s banking region		5,324		31.1			5,230		30.1
Total	$	17,115		100.0	%	$	17,360		100.0	%


U.S. BANCORP			31

TABLE 11

Other Retail Loans by Geography


	December 31, 2012					December 31, 2011
(Dollars in Millions)	Loans		Percent			Loans		Percent
California	$	5,545		11.6	%	$	5,793		12.0	%
Colorado		2,068		4.3			2,175		4.5
Illinois		2,232		4.7			2,233		4.6
Minnesota		4,113		8.6			4,400		9.2
Missouri		2,234		4.7			2,170		4.5
Ohio		2,628		5.5			2,620		5.5
Oregon		1,748		3.7			1,851		3.9
Washington		1,954		4.1			2,058		4.3
Wisconsin		1,845		3.9			1,907		4.0
Iowa, Kansas, Nebraska, North Dakota, South Dakota		2,465		5.2			2,522		5.2
Arkansas, Indiana, Kentucky, Tennessee		2,772		5.8			2,765		5.8
Idaho, Montana, Wyoming		1,071		2.2			1,125		2.3
Arizona, Nevada, New Mexico, Utah		2,080		4.4			2,135		4.4
Total banking region		32,755		68.7			33,754		70.2
Florida, Michigan, New York, Pennsylvania, Texas		6,957		14.6			6,493		13.5
All other states		8,000		16.7			7,860		16.3
Total outside Company’s banking region		14,957		31.3			14,353		29.8
Total	$	47,712		100.0	%	$	48,107		100.0	%

Of the total residential mortgages, credit card and other retail loans outstanding at December 31, 2012, approximately 72.5 percent were to customers located in the Company’s primary banking region. Tables 9, 10 and 11 provide a geographic summary of residential mortgages, credit card loans and other retail loans outstanding, respectively, as of December 31, 2012 and 2011. The collateral for $5.1 billion of residential mortgages and other retail loans included in covered loans at December 31, 2012 was in California, compared with $5.2 billion at December 31, 2011.

Loans Held for Sale Loans held for sale, consisting primarily of residential mortgages to be sold in the secondary market, were $8.0 billion at December 31, 2012, compared with $7.2 billion at December 31, 2011. The increase in loans held for sale was principally due to an increase in mortgage loan origination and refinancing activity due to the low interest rate environment.

Most of the residential mortgage loans the Company originates follow guidelines that allow the loans to be sold into existing, highly liquid secondary markets; in particular in government agency transactions and to government sponsored enterprises (“GSEs”).

TABLE 12

Selected Loan Maturity Distribution


At December 31, 2012 (Dollars in Millions)	One Year or Less		Over One Through Five Years		Over Five Years		Total
Commercial	$	24,339	$	38,471	$	3,413	$	66,223
Commercial real estate		8,379		22,007		6,567		36,953
Residential mortgages		2,187		6,531		35,300		44,018
Credit card		17,115		—		—		17,115
Other retail		8,854		25,618		13,240		47,712
Covered loans		2,469		3,080		5,759		11,308
Total loans	$	63,343	$	95,707	$	64,279	$	223,329
Total of loans due after one year with
Predetermined interest rates							$	74,680
Floating interest rates							$	85,306


32		U.S. BANCORP

TABLE 13

Investment Securities


	Available-for-Sale									Held-to-Maturity
At December 31, 2012 (Dollars in Millions)	Amortized Cost		Fair Value		Weighted- Average Maturity in Years		Weighted- Average Yield (e)			Amortized Cost			Fair Value		Weighted- Average Maturity in Years		Weighted- Average Yield (e)
U.S. Treasury and Agencies
Maturing in one year or less	$	960	$	961		.8		1.42	%	$	501		$	503		.7		.90	%
Maturing after one year through five years		95		98		1.9		1.61			1,995			2,015		1.3		1.01
Maturing after five years through ten years		155		165		7.4		3.11			598			603		9.5		1.78
Maturing after ten years		1		2		14.7		4.15			60			60		12.2		1.86
Total	$	1,211	$	1,226		1.8		1.65	%	$	3,154		$	3,181		3.0		1.16	%
Mortgage-Backed Securities (a)
Maturing in one year or less	$	2,749	$	2,762		.6		1.64	%	$	296		$	297		.6		1.53	%
Maturing after one year through five years		22,736		23,409		3.2		2.35			29,419			29,942		3.2		2.05
Maturing after five years through ten years		4,177		4,200		6.0		1.96			1,294			1,309		6.4		1.49
Maturing after ten years		290		296		12.7		1.78			58			58		10.3		1.21
Total	$	29,952	$	30,667		3.5		2.23	%	$	31,067		$	31,606		3.3		2.02	%
Asset-Backed Securities (a)
Maturing in one year or less	$	7	$	9		–		.21	%	$	–		$	4		.2		1.26	%
Maturing after one year through five years		36		46		3.4		6.31			11	<