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Document and Entity Information - USD ($) $ in Billions	12 Months Ended
Document and Entity Information - USD ($) $ in Billions	Dec. 31, 2012	Jan. 31, 2013	Jun. 30, 2012
Entity Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY
Trading Symbol	USB
Entity Registrant Name	US BANCORP \DE\
Entity Central Index Key	0000036104
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		1,863,384,793
Entity Public Float			$ 60.8

Consolidated Balance Sheet - USD ($)
$ in Millions

Dec. 31, 2012

Dec. 31, 2011

Assets

Cash and due from banks

$ 8,252

$ 13,962

Investment securities

Held-to-maturity (fair value $34,952 and $19,216, respectively; including $1,482 and $155 pledged as collateral, respectively)

^[1]

34,389

18,877

Available-for-sale ($1,906 and $6,831 pledged as collateral, respectively)

^[1]

40,139

51,937

Loans held for sale (included $7,957 and $6,925 of mortgage loans carried at fair value, respectively)

7,976

7,156

Loans

Commercial

66,223

56,648

Commercial real estate

36,953

35,851

Residential mortgages

44,018

37,082

Credit Card

17,115

17,360

Other retail

47,712

48,107

Total loans, excluding covered loans

212,021

195,048

Covered loans

11,308

14,787

Total loans

223,329

209,835

Less allowance for loan losses

(4,424)

(4,753)

Net loans

218,905

205,082

Premises and equipment

2,670

2,657

Goodwill

9,143

8,927

Other intangible assets

2,706

2,736

Other assets

29,675

28,788

Total assets

353,855

340,122

Deposits

Noninterest-bearing

74,172

68,579

Interest-bearing

145,972

134,757

Time deposits greater than $100,000

29,039

27,549

Total deposits

249,183

230,885

Short-term borrowings

26,302

30,468

Long-term debt

25,516

31,953

Other liabilities

12,587

11,845

Total liabilities

313,588

305,151

Shareholders' equity

Preferred stock

4,769

2,606

Common stock, par value $0.01 a share - authorized: 4,000,000,000 shares; issued: 2012 and 2011 - 2,125,725,742 shares

Capital surplus

8,201

8,238

Retained earnings

34,720

30,785

Less cost of common stock in treasury: 2012 - 256,294,227 shares; 2011 - 215,904,019 shares

(7,790)

(6,472)

Accumulated other comprehensive income (loss)

(923)

(1,200)

Total U.S. Bancorp shareholders' equity

38,998

33,978

Noncontrolling interests

1,269

993

Total equity

40,267

34,971

Total liabilities and equity

$ 353,855

$ 340,122

[1]	Includes only collateral pledged by the Company where counterparties have the right to sell or pledge the collateral.

Consolidated Balance Sheet (Parenthetical) - USD ($)	Dec. 31, 2012	Dec. 31, 2011
Held-to-maturity securities, fair value	$ 34,952,000,000	$ 19,216,000,000
Held-to-maturity securities, pledged as collateral	1,482,000,000	155,000,000
Available-for-sale securities pledged as collateral	1,906,000,000	6,831,000,000
Mortgage loans, carried at fair value	7,957,000,000	6,925,000,000
Time deposits	$ 100,000	$ 100,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, share-authorized (actual number of shares)	4,000,000,000	4,000,000,000
Common stock, shares issued (actual number of shares)	2,125,725,742	2,125,725,742
Treasury stock, shares(actual number of shares)	256,294,227	215,904,019

- Definition

Carrying amount of mortgage loans to individuals not classified as held for investment but are held-for-sale.

+ References + Details

Consolidated Statement of Income - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Interest Income
Loans	$ 10,558	$ 10,370	$ 10,145
Loans held for sale	282	200	246
Investment securities	1,792	1,820	1,601
Other interest income	251	249	166
Total interest income	12,883	12,639	12,158
Interest Expense
Deposits	691	840	928
Short-term borrowings	442	531	548
Long-term debt	1,005	1,145	1,103
Total interest expense	2,138	2,516	2,579
Net interest income	10,745	10,123	9,579
Provision for credit losses	1,882	2,343	4,356
Net interest income after provision for credit losses	8,863	7,780	5,223
Noninterest Income
Credit and debit card revenue	892	1,073	1,091
Corporate payment products revenue	744	734	710
Merchant processing services	1,395	1,355	1,253
ATM processing services	346	452	423
Trust and investment management fees	1,055	1,000	1,080
Deposit service charges	653	659	710
Treasury management fees	541	551	555
Commercial products revenue	878	841	771
Mortgage banking revenue	1,937	986	1,003
Investment products fees and commissions	150	129	111
Securities gains (losses), net
Realized gains (losses), net	59	4	13
Total other-than-temporary impairment	(62)	(60)	(157)
Portion of other-than-temporary impairment recognized in other comprehensive income	(12)	25	66
Total securities gains (losses), net	(15)	(31)	(78)
Other	743	1,011	731
Total noninterest income	9,319	8,760	8,360
Noninterest Expense
Compensation	4,320	4,041	3,779
Employee benefits	945	845	694
Net occupancy and equipment	917	999	919
Professional services	530	383	306
Marketing and business development	388	369	360
Technology and communications	821	758	744
Postage, printing and supplies	304	303	301
Other intangibles	274	299	367
Other	1,957	1,914	1,913
Total noninterest expense	10,456	9,911	9,383
Income before income taxes	7,726	6,629	4,200
Applicable income taxes	2,236	1,841	935
Net income	5,490	4,788	3,265
Net (income) loss attributable to noncontrolling interests	157	84	52
Net income attributable to U.S. Bancorp	5,647	4,872	3,317
Net income applicable to U.S. Bancorp common shareholders	$ 5,383	$ 4,721	$ 3,332
Earnings per common share	$ 2.85	$ 2.47	$ 1.74
Diluted earnings per common share	2.84	2.46	1.73
Dividends declared per common share	$ 0.78	$ 0.50	$ 0.20
Average common shares outstanding	1,887	1,914	1,912
Average diluted common shares outstanding	1,896	1,923	1,921

Consolidated Statement of Comprehensive Income - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Net income	$ 5,490	$ 4,788	$ 3,265
Other Comprehensive Income (Loss)
Changes in unrealized gains and losses on securities available-for-sale	715	920	278
Other-than-temporary impairment not recognized in earnings on securities available-for-sale	12	(25)	(66)
Amortization of unrealized gains on securities transferred from available-for-sale to held-to-maturity	(51)
Changes in unrealized gains (losses) on derivative hedges	(74)	(343)	(383)
Foreign currency translation	14	(16)	24
Reclassification to earnings of realized gains and losses	376	363	365
Unrealized gains (losses) on retirement plans	(543)	(464)	(197)
Income taxes related to other comprehensive income	(172)	(166)	(5)
Total other comprehensive income (loss)	277	269	16
Comprehensive income	5,767	5,057	3,281
Comprehensive (income) loss attributable to noncontrolling interests	157	84	52
Comprehensive income attributable to U.S. Bancorp	$ 5,924	$ 5,141	$ 3,333

Consolidated Statement of Shareholders' Equity - USD ($) shares in Millions, $ in Millions	Total	Common Stock [Member]	Preferred Stock [Member]	Capital Surplus [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total U.S. Bancorp Shareholders' Equity [Member]	Noncontrolling Interests [Member]
Beginning Balance at Dec. 31, 2009	$ 26,661	$ 21	$ 1,500	$ 8,319	$ 24,116	$ (6,509)	$ (1,484)	$ 25,963	$ 698
Shares, Beginning Balance at Dec. 31, 2009		1,913
Change in accounting principle	(89)				(72)		(1)	(73)	(16)
Net income (loss)	3,265				3,317			3,317	(52)
Other comprehensive income (loss)	16						16	16
Preferred stock dividends	(89)				(89)			(89)
Common stock dividends	(385)				(385)			(385)
Issuance of preferred stock	558		430	10	118			558
Issuance of common and treasury stock	129			(134)		263		129
Issuance of common and treasury stock, shares		9
Purchase of treasury stock	$ (16)					(16)		(16)
Purchase of treasury stock, shares	(1)	(1)
Distributions to noncontrolling interests	$ (76)								(76)
Net other changes in noncontrolling interests	249								249
Stock option and restricted stock grants	99			99				99
Ending Balance at Dec. 31, 2010	30,322	$ 21	1,930	8,294	27,005	(6,262)	(1,469)	29,519	803
Shares, Ending Balance at Dec. 31, 2010		1,921
Change in accounting principle	(2)				(2)			(2)
Net income (loss)	4,788				4,872			4,872	(84)
Other comprehensive income (loss)	269						269	269
Preferred stock dividends	(129)				(129)			(129)
Common stock dividends	(961)				(961)			(961)
Issuance of preferred stock	676		676					676
Issuance of common and treasury stock	193			(147)		340		193
Issuance of common and treasury stock, shares		11
Purchase of treasury stock	$ (550)					(550)		(550)
Purchase of treasury stock, shares	(22)	(22)
Distributions to noncontrolling interests	$ (80)								(80)
Purchase of noncontrolling interests	(11)			(3)				(3)	(8)
Net other changes in noncontrolling interests	362								362
Stock option and restricted stock grants	94			94				94
Ending Balance at Dec. 31, 2011	$ 34,971	$ 21	2,606	8,238	30,785	(6,472)	(1,200)	33,978	993
Shares, Ending Balance at Dec. 31, 2011	1,900	1,910
Net income (loss)	$ 5,490				5,647			5,647	(157)
Other comprehensive income (loss)	277						277	277
Preferred stock dividends	(238)				(238)			(238)
Common stock dividends	(1,474)				(1,474)			(1,474)
Issuance of preferred stock	2,163		2,163					2,163
Issuance of common and treasury stock	441			(119)		560		441
Issuance of common and treasury stock, shares		18
Purchase of treasury stock	$ (1,878)					(1,878)		(1,878)
Purchase of treasury stock, shares	(59)	(59)
Distributions to noncontrolling interests	$ (76)								(76)
Net other changes in noncontrolling interests	509								509
Stock option and restricted stock grants	82			82				82
Ending Balance at Dec. 31, 2012	$ 40,267	$ 21	$ 4,769	$ 8,201	$ 34,720	$ (7,790)	$ (923)	$ 38,998	$ 1,269
Shares, Ending Balance at Dec. 31, 2012	1,900	1,869

Consolidated Statement of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Operating Activities
Net income attributable to U.S. Bancorp	$ 5,647	$ 4,872	$ 3,317
Adjustments to reconcile net income to net cash provided by operating activities
Provision for credit losses	1,882	2,343	4,356
Depreciation and amortization of premises and equipment	287	266	229
Amortization of intangibles	274	299	367
Provision for deferred income taxes	49	748	(370)
(Gain) loss on sale of loans held for sale	(2,889)	(860)	(1,289)
(Gain) loss on sale of securities and other assets	(242)	(25)	29
Loans originated for sale in the secondary market, net of repayments	(81,219)	(46,366)	(53,614)
Proceeds from sales of loans held for sale	82,302	48,094	50,721
Other, net	1,867	449	1,495
Net cash provided by operating activities	7,958	9,820	5,241
Investing Activities
Proceeds from sales of available-for-sale investment securities	2,060	1,018	1,212
Proceeds from maturities of held-to-maturity investment securities	6,336	1,404	167
Proceeds from maturities of available-for-sale investment securities	15,374	12,713	16,068
Purchases of held-to-maturity investment securities	(10,247)	(18,500)	(1,010)
Purchases of available-for-sale investment securities	(16,605)	(13,229)	(24,025)
Net increase in loans outstanding	(15,158)	(13,418)	(6,322)
Proceeds from sales of loans	1,895	820	1,829
Purchases of loans	(2,741)	(3,078)	(4,278)
Acquisitions, net of cash acquired	94	636	923
Other, net	(1,261)	(1,070)	(936)
Net cash used in investing activities	(20,253)	(32,704)	(16,372)
Financing Activities
Net increase in deposits	18,050	24,846	20,527
Net increase (decrease) in short-term borrowings	(4,167)	(2,205)	592
Proceeds from issuance of long-term debt	4,966	3,611	7,044
Principal payments or redemption of long-term debt	(11,415)	(3,300)	(8,394)
Fees paid on exchange of income trust securities for perpetual preferred stock			(4)
Proceeds from issuance of preferred stock	2,163	676
Proceeds from issuance of common stock	395	180	119
Repurchase of common stock	(1,856)	(514)
Cash dividends paid on preferred stock	(204)	(118)	(89)
Cash dividends paid on common stock	(1,347)	(817)	(383)
Net cash provided by financing activities	6,585	22,359	19,412
Change in cash and due from banks	(5,710)	(525)	8,281
Cash and due from banks at beginning of period	13,962	14,487	6,206
Cash and due from banks at end of period	8,252	13,962	14,487
Supplemental Cash Flow Disclosures
Cash paid for income taxes	1,469	495	424
Cash paid for interest	2,218	2,563	2,631
Net noncash transfers to foreclosed property	564	702	1,384
Noncash transfer of investment securities available-for-sale to held-to-maturity	11,705
Acquisitions
Assets (sold) acquired	194	1,761	(14)
Liabilities sold (assumed)	(260)	(2,100)	(907)
Net	$ (66)	$ (339)	$ (921)

Significant Accounting Policies

12 Months Ended

Dec. 31, 2012

Significant Accounting Policies

NOTE 1

Significant Accounting Policies

U.S. Bancorp is a multi-state financial services holding company headquartered in Minneapolis, Minnesota. U.S. Bancorp and its subsidiaries (the “Company”) provide a full range of financial services, including lending and depository services through banking offices principally in the Midwest and West regions of the United States. The Company also engages in credit card, merchant, and ATM processing, mortgage banking, insurance, trust and investment management, brokerage, and leasing activities principally in domestic markets.

Basis of Presentation The consolidated financial statements include the accounts of the Company and its subsidiaries and all variable interest entities (“VIEs”) for which the Company has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and the obligation to absorb losses or right to receive benefits of the VIE that could potentially be significant to the VIE. Consolidation eliminates all significant intercompany accounts and transactions. Certain items in prior periods have been reclassified to conform to the current presentation.

Uses of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual experience could differ from those estimates.

Business Segments

Within the Company, financial performance is measured by major lines of business based on the products and services provided to customers through its distribution channels. The Company has five reportable operating segments:

Wholesale Banking and Commercial Real Estate Wholesale Banking and Commercial Real Estate offers lending, equipment finance and small-ticket leasing, depository services, treasury management, capital markets, international trade services and other financial services to middle market, large corporate, commercial real estate, financial institution and public sector clients.

Consumer and Small Business Banking Consumer and Small Business Banking delivers products and services through banking offices, telephone servicing and sales, on-line services, direct mail, ATM processing and over mobile devices, such as mobile phones and tablet computers. It encompasses community banking, metropolitan banking, in-store banking, small business banking, consumer lending, mortgage banking, workplace banking, student banking and 24-hour banking.

Wealth Management and Securities Services Wealth Management and Securities Services provides private banking, financial advisory services, investment management, retail brokerage services, insurance, trust, custody and fund servicing through five businesses: Wealth Management, Corporate Trust Services, U.S. Bancorp Asset Management, Institutional Trust & Custody and Fund Services.

Payment Services Payment Services includes consumer and business credit cards, stored-value cards, debit cards, corporate and purchasing card services, consumer lines of credit and merchant processing.

Treasury and Corporate Support Treasury and Corporate Support includes the Company’s investment portfolios, most covered commercial and commercial real estate loans and related other real estate owned (“OREO”), funding, capital management, interest rate risk management, the net effect of transfer pricing related to average balances and the residual aggregate of those expenses associated with corporate activities that are managed on a consolidated basis.

Segment Results Accounting policies for the lines of business are the same as those used in preparation of the consolidated financial statements with respect to activities specifically attributable to each business line. However, the preparation of business line results requires management to allocate funding costs and benefits, expenses and other financial elements to each line of business. For details of these methodologies and segment results, see “Basis for Financial Presentation” and Table 24 “Line of Business Financial Performance” included in Management’s Discussion and Analysis which is incorporated by reference into these Notes to Consolidated Financial Statements.

Securities

Realized gains or losses on securities are determined on a trade date basis based on the specific amortized cost of the investments sold.

Trading Securities Debt and equity securities held for resale are classified as trading securities and are included in other assets and reported at fair value. Changes in fair value and realized gains or losses are reported in noninterest income.

Available-for-sale Securities These securities are not trading securities but may be sold before maturity in response to changes in the Company’s interest rate risk profile, funding needs, demand for collateralized deposits by public entities or other reasons. Available-for-sale securities are carried at fair value with unrealized net gains or losses reported within other comprehensive income (loss) in shareholders’ equity. Declines in fair value related to other-than-temporary impairment, if any, are reported in noninterest income.

Held-to-maturity Securities Debt securities for which the Company has the positive intent and ability to hold to maturity are reported at historical cost adjusted for amortization of premiums and accretion of discounts. Declines in fair value related to other-than-temporary impairment, if any, are reported in noninterest income.

Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase Securities purchased under agreements to resell and securities sold under agreements to repurchase are accounted for as collateralized financing transactions and are recorded at the amounts at which the securities were acquired or sold, plus accrued interest. The fair value of collateral received is continually monitored and additional collateral is obtained or requested to be returned to the Company as deemed appropriate.

Equity Investments in Operating Entities

Equity investments in public entities in which the Company’s ownership is less than 20 percent are accounted for as available-for-sale securities and are carried at fair value. Similar investments in private entities are accounted for using the cost method. Investments in entities where the Company has a significant influence (generally between 20 percent and 50 percent ownership) but does not control the entity are accounted for using the equity method. Investments in limited partnerships and limited liability companies where the Company’s ownership interest is greater than 5 percent are accounted for using the equity method. All equity investments are evaluated for impairment at least annually and more frequently if certain criteria are met.

Loans

The Company offers a broad array of lending products and categorizes its loan portfolio into three segments, which is the level at which it develops and documents a systematic methodology to determine the allowance for credit losses. The Company’s three loan portfolio segments are commercial lending, consumer lending and covered loans. The Company further disaggregates its loan portfolio segments into various classes based on their underlying risk characteristics. The two classes within the commercial lending segment are commercial loans and commercial real estate loans. The three classes within consumer lending are residential mortgages, credit card loans and other retail loans. The covered loan segment consists of only one class.

The Company’s accounting methods for loans differ depending on whether the loans are originated or purchased, and for purchased loans, whether the loans were acquired at a discount related to evidence of credit deterioration since date of origination.

Originated Loans Held for Investment Loans the Company originates as held for investment are reported at the principal amount outstanding, net of unearned income, net deferred loan fees or costs, and any direct principal charge-offs. Interest income is accrued on the unpaid principal balances as earned. Loan and commitment fees and certain direct loan origination costs are deferred and recognized over the life of the loan and/or commitment period as yield adjustments.

Purchased Loans All purchased loans (non-impaired and impaired) acquired after January 1, 2009 are initially measured at fair value as of the acquisition date in accordance with applicable authoritative accounting guidance. Credit discounts are included in the determination of fair value. An allowance for credit losses is not recorded at the acquisition date for loans purchased after January 1, 2009. In accordance with applicable authoritative accounting guidance, purchased non-impaired loans acquired in a business combination prior to January 1, 2009 were generally recorded at the predecessor’s carrying value including an allowance for credit losses.

In determining the acquisition date fair value of purchased impaired loans, and in subsequent accounting, the Company generally aggregates purchased consumer loans and certain smaller balance commercial loans into pools of loans with common risk characteristics, while accounting for larger balance commercial loans individually. Expected cash flows at the purchase date in excess of the fair value of loans are recorded as interest income over the life of the loans if the timing and amount of the future cash flows is reasonably estimable. Subsequent to the purchase date, increases in cash flows over those expected at the purchase date are recognized as interest income prospectively. The present value of any decreases in expected cash flows, other than from decreases in variable interest rates, after the purchase date is recognized by recording an allowance for credit losses. Revolving loans, including lines of credit and credit cards loans, and leases are excluded from purchased impaired loans accounting.

For purchased loans acquired after January 1, 2009 that are not deemed impaired at acquisition, credit discounts representing the principal losses expected over the life of the loan are a component of the initial fair value. Subsequent to the purchase date, the methods utilized to estimate the required allowance for credit losses for these loans is similar to originated loans; however, the Company records a provision for credit losses only when the required allowance exceeds any remaining credit discounts. The remaining differences between the purchase price and the unpaid principal balance at the date of acquisition are recorded in interest income over the life of the loans.

Covered Assets Loans covered under loss sharing or similar credit protection agreements with the Federal Deposit Insurance Corporation (“FDIC”) are reported in loans along with the related indemnification asset. Foreclosed real estate covered under similar agreements is recorded in other assets. In accordance with applicable authoritative accounting guidance effective for the Company beginning January 1, 2009, all purchased loans and related indemnification assets are recorded at fair value at date of purchase.

In October 2012, the Financial Accounting Standards Board issued accounting guidance, which the Company will adopt January 1, 2013, applicable to indemnification assets related to FDIC loss-sharing agreements. The guidance requires any reduction in expected cash flows from the FDIC resulting from increases in expected cash flows of the covered assets (when there are no previous valuation allowances to reverse) to be amortized over the shorter of the remaining contractual term of the indemnification agreements or the remaining life of the covered assets. Prior to the 2013 adoption of this guidance, the Company has amortized decreases in expected cash flows from the FDIC over the expected life of the covered assets. The Company does not expect adopting this guidance will materially affect its financial statements.

Commitments to Extend Credit Unfunded commitments for residential mortgage loans intended to be held for sale are considered derivatives and recorded on the balance sheet at fair value with changes in fair value recorded in income. All other unfunded loan commitments are not considered derivatives. For loans purchased after January 1, 2009, the fair value of the unfunded credit commitments is considered in the determination of the fair value of the loans recorded at the date of acquisition. Reserves for credit exposure on all other unfunded credit commitments are recorded in other liabilities.

Allowance for Credit Losses The allowance for credit losses reserves for probable and estimable losses incurred in the Company’s loan and lease portfolio and includes certain amounts that do not represent loss exposure to the Company because those losses are recoverable under loss sharing agreements with the FDIC. The allowance for credit losses is increased through provisions charged to operating earnings and reduced by net charge-offs. Management evaluates the allowance each quarter to ensure it appropriately reserves for incurred losses.

The allowance recorded for loans in the commercial lending segment is based on reviews of individual credit relationships and considers the migration analysis of commercial lending segment loans and actual loss experience. The Company currently uses a 12-year period of historical losses in considering actual loss experience, because it believes that period best reflects the losses incurred in the portfolio. This timeframe and the results of the analysis are evaluated quarterly to determine if they are appropriate. The allowance recorded for impaired loans greater than $5 million in the commercial lending segment is based on an individual loan analysis utilizing expected cash flows discounted using the original effective interest rate, the observable market price, or the fair value of the collateral for collateral-dependent loans. The allowance recorded for all other commercial lending segment loans is determined on a homogenous pool basis and includes consideration of product mix, risk characteristics of the portfolio, bankruptcy experience, and historical losses, adjusted for current trends. The Company also considers the impacts of any loan modifications made to commercial lending segment loans and any subsequent payment defaults to its expectations of cash flows, principal balance, and current expectations about the borrower’s ability to pay in determining the allowance for credit losses.

The allowance recorded for purchased impaired and Troubled Debt Restructuring (“TDR”) loans in the consumer lending segment is determined on a homogenous pool basis utilizing expected cash flows discounted using the original effective interest rate of the pool. The allowance for collateral-dependent loans in the consumer lending segment is determined based on the fair value of the collateral. The allowance recorded for all other consumer lending segment loans is determined on a homogenous pool basis and includes consideration of product mix, risk characteristics of the portfolio, bankruptcy experience, delinquency status, refreshed loan-to-value ratios when possible, portfolio growth and historical losses, adjusted for current trends. The Company also considers any modifications made to consumer lending segment loans including the impacts of any subsequent payment defaults since modification in determining the allowance for credit losses, such as the borrower’s ability to pay under the restructured terms, and the timing and amount of payments.

The allowance for the covered loan segment is evaluated each quarter in a manner similar to that described for non-covered loans and represents any decreases in expected cash flows of those loans after the acquisition date. The provision for credit losses for covered loans considers the indemnification provided by the FDIC.

In addition, subsequent payment defaults on loan modifications considered TDRs are considered in the underlying factors used in the determination of the appropriateness of the allowance for credit losses. For each loan segment, the Company estimates future loan charge-offs through a variety of analysis, trends and underlying assumptions. With respect to the commercial lending segment, TDRs may be collectively evaluated for impairment where observed performance history, including defaults, is a primary driver of the loss allocation. For commercial TDRs individually evaluated for impairment, attributes of the borrower are the primary factors in determining the allowance for credit losses. However, incorporation of loss history is factored into the allowance methodology applied to this category of loans. With respect to the consumer lending segment, performance of the portfolio, including defaults on TDRs, is considered when estimating future cash flows.

The Company’s methodology for determining the appropriate allowance for credit losses for all the loan segments also considers the imprecision inherent in the methodologies used. As a result, in addition to the amounts determined under the methodologies described above, management also considers the potential impact of other qualitative factors which include, but are not limited to, economic factors; geographic and other concentration risks; delinquency and nonaccrual trends; current business conditions; changes in lending policy, underwriting standards, internal review and other relevant business practices; and the regulatory environment. The consideration of these items results in adjustments to allowance amounts included in the Company’s allowance for credit losses for each of the above loan segments.

The Company also assesses the credit risk associated with off-balance sheet loan commitments, letters of credit, and derivatives. Credit risk associated with derivatives is reflected in the fair values recorded for those positions. The liability for off-balance sheet credit exposure related to loan commitments and other credit guarantees is included in other liabilities. Because business processes and credit risks associated with unfunded credit commitments are essentially the same as for loans, the Company utilizes similar processes to estimate its liability for unfunded credit commitments.

Credit Quality The quality of the Company’s loan portfolios is assessed as a function of net credit losses, levels of nonperforming assets and delinquencies, and credit quality ratings as defined by the Company.

For all loan classes, loans are considered past due based on the number of days delinquent except for monthly amortizing loans which are classified delinquent based upon the number of contractually required payments not made (for example, two missed payments is considered 30 days delinquent).

Commercial lending segment loans are generally placed on nonaccrual status when the collection of principal and interest has become 90 days past due or is otherwise considered doubtful. When a loan is placed on nonaccrual status, unpaid accrued interest is reversed. Commercial lending segment loans are generally fully or partially charged down to the fair value of the collateral securing the loan, less costs to sell, when the loan is considered uncollectible.

Consumer lending segment loans are generally charged-off at a specific number of days or payments past due. Residential mortgages and other retail loans secured by 1-4 family properties are generally charged down to the fair value of the collateral securing the loan, less costs to sell, at 180 days past due, and placed on nonaccrual status in instances where a partial charge-off occurs unless the loan is well secured and in the process of collection. Loans and lines in a junior lien position secured by 1-4 family properties are placed on nonaccrual status at 120 days past due or when behind a first lien that has become 180 days or greater past due or placed on nonaccrual status. Any secured consumer lending segment loan whose borrower has had debt discharged through bankruptcy, for which the loan amount exceeds the fair value of the collateral, is charged down to the fair value of the related collateral and the remaining balance is placed on nonaccrual status. Credit card loans continue to accrue interest until the account is charged off. Credit cards are charged off at 180 days past due. Other retail loans not secured by 1-4 family properties are charged-off at 120 days past due; and revolving consumer lines are charged off at 180 days past due. Similar to credit cards, other retail loans are generally not placed on nonaccrual status because of the relative short period of time to charge-off. Certain retail customers having financial difficulties may have the terms of their credit card and other loan agreements modified to require only principal payments and, as such, are reported as nonaccrual.

For all loan classes, interest payments received on nonaccrual loans are generally recorded as a reduction to the loan carrying amount. Interest payments are generally recorded as reductions to a loan’s carrying amount while a loan is on nonaccrual and are recognized as interest income upon payoff of the loan. Interest income may be recognized for interest payments if the remaining carrying amount of the loan is believed to be collectible. In certain circumstances, loans in any class may be restored to accrual status, such as when a loan has demonstrated sustained repayment performance or no amounts are past due and prospects for future payment are no longer in doubt; or the loan becomes well secured and is in the process of collection. Loans where there has been a partial charge-off may be returned to accrual status if all principal and interest (including amounts previously charged-off) is expected to be collected and the loan is current.

Covered loans not considered to be purchased impaired are evaluated for delinquency, nonaccrual status and charge-off consistent with the class of loan they would be included in had the loss share coverage not been in place. Generally, purchased impaired loans are considered accruing loans. However, the timing and amount of future cash flows for some loans is not reasonably estimable. Those loans are classified as nonaccrual loans and interest income is not recognized until the timing and amount of the future cash flows can be reasonably estimated.

The Company classifies its loan portfolios using internal credit quality ratings on a quarterly basis. These ratings include: pass, special mention and classified, and are an important part of the Company’s overall credit risk management process and evaluation of the allowance for credit losses. Loans with a pass rating represent those not classified on the Company’s rating scale for problem credits, as minimal credit risk has been identified. Special mention loans are those that have a potential weakness deserving management’s close attention. Classified loans are those where a well-defined weakness has been identified that may put full collection of contractual cash flows at risk. It is possible that others, given the same information, may reach different reasonable conclusions regarding the credit quality rating classification of specific loans.

Troubled Debt Restructurings In certain circumstances, the Company may modify the terms of a loan to maximize the collection of amounts due when a borrower is experiencing financial difficulties or is expected to experience difficulties in the near-term. Concessionary modifications are classified as TDRs unless the modification results in only an insignificant delay in payments to be received. The Company recognizes interest on TDRs if the borrower complies with the revised terms and conditions as agreed upon with the Company and has demonstrated repayment performance at a level commensurate with the modified terms over several payment cycles. To the extent a previous restructuring was insignificant, the Company considers the cumulative effect of past restructurings related to the receivable when determining whether a current restructuring is a TDR. Loans classified as TDRs are considered impaired loans for reporting and measurement purposes.

Many of the Company’s TDRs are determined on a case-by-case basis in connection with ongoing loan collection processes. However, the Company has also implemented certain restructuring programs that may result in TDRs.

For the commercial lending segment, modifications generally result in the Company working with borrowers on a case-by-case basis. Commercial and commercial real estate modifications generally include extensions of the maturity date and may be accompanied by an increase or decrease to the interest rate, which may not be deemed a market rate of interest. In addition, the Company may work with the borrower in identifying other changes that mitigate loss to the Company, which may include additional collateral or guarantees to support the loan. To a lesser extent, the Company may waive contractual principal. The Company classifies these concessions as TDRs to the extent the Company determines that the borrower is experiencing financial difficulty.

Modifications for the consumer lending segment are generally part of programs the Company has initiated. The Company participates in the U.S. Department of Treasury Home Affordable Modification Program (“HAMP”). HAMP gives qualifying homeowners an opportunity to permanently modify residential mortgage loans and achieve more affordable monthly payments, with the U.S. Department of Treasury compensating the Company for a portion of the reduction in monthly amounts due from borrowers participating in this program. The Company also modifies residential mortgage loans under Federal Housing Administration, Department of Veterans Affairs, or other internal programs. Under these programs, the Company provides concessions to qualifying borrowers experiencing financial difficulties. The concessions may include adjustments to interest rates, conversion of adjustable rates to fixed rates, extension of maturity dates or deferrals of payments, capitalization of accrued interest and/or outstanding advances, or in limited situations, partial forgiveness of loan principal. In most instances, participation in residential mortgage loan restructuring programs requires the customer to complete a short-term trial period. A permanent loan modification is contingent on the customer successfully completing the trial period arrangement and the loan documents are not modified until that time. The Company reports loans in a trial period arrangement as TDRs.

Credit card and other retail loan modifications are generally part of two distinct restructuring programs. The Company offers workout programs providing customers experiencing financial difficulty with modifications whereby balances may be amortized up to 60 months, and generally include waiver of fees and reduced interest rates. The Company also provides modification programs to qualifying customers experiencing a temporary financial hardship in which reductions are made to monthly required minimum payments for up to 12 months. Balances related to these programs are generally frozen, however, accounts may be reopened upon successful exit of the program, in which account privileges may be restored.

In addition, the Company considers secured loans to consumer borrowers that have debt discharged through bankruptcy where the borrower has not reaffirmed the debt to be TDRs.

Modifications to loans in the covered segment are similar in nature to that described above for non-covered loans, and the evaluation and determination of TDR status is similar, except that acquired loans restructured after acquisition are not considered TDRs for purposes of the Company’s accounting and disclosure if the loans evidenced credit deterioration as of the acquisition date and are accounted for in pools. Losses associated with the modification on covered loans, including the economic impact of interest rate reductions, are generally eligible for reimbursement under loss sharing agreements with the FDIC.

Impaired Loans For all loan classes, a loan is considered to be impaired when, based on current events or information, it is probable the Company will be unable to collect all amounts due per the contractual terms of the loan agreement. Impaired loans include all nonaccrual and TDR loans. For all loan classes, interest income on TDR loans is recognized under the modified terms and conditions if the borrower has demonstrated repayment performance at a level commensurate with the modified terms over several payment cycles. Interest income is generally not recognized on other impaired loans until the loan is paid off. However, interest income may be recognized for interest payments if the remaining carrying amount of the loan is believed to be collectible

Factors used by the Company in determining whether all principal and interest payments due on commercial and commercial real estate loans will be collected and therefore whether those loans are impaired include, but are not limited to, the financial condition of the borrower, collateral and/or guarantees on the loan, and the borrower’s estimated future ability to pay based on industry, geographic location and certain financial ratios. The evaluation of impairment on residential mortgages, credit card and other retail loans is primarily driven by delinquency status of individual loans or whether a loan has been modified. Individual covered loans, whose future losses are covered by loss sharing agreements with the FDIC that substantially reduce the risk of credit losses to the Company, are evaluated for impairment and accounted for in a manner consistent with the class of loan they would have been included in had the loss sharing coverage not been in place.

Leases The Company’s lease portfolio consists of both direct financing and leveraged leases. The net investment in direct financing leases is the sum of all minimum lease payments and estimated residual values, less unearned income. Unearned income is recorded in interest income over the terms of the leases to produce a level yield.

The investment in leveraged leases is the sum of all lease payments, less nonrecourse debt payments, plus estimated residual values, less unearned income. Income from leveraged leases is recognized over the term of the leases based on the unrecovered equity investment.

Residual values on leased assets are reviewed regularly for other-than-temporary impairment. Residual valuations for retail automobile leases are based on independent assessments of expected used car sale prices at the end-of-term. Impairment tests are conducted based on these valuations considering the probability of the lessee returning the asset to the Company, re-marketing efforts, insurance coverage and ancillary fees and costs. Valuations for commercial leases are based upon external or internal management appraisals. When there is impairment of the Company’s interest in the residual value of a leased asset, the carrying value is reduced to the estimated fair value with the writedown recognized in the current period.

Other Real Estate OREO is included in other assets, and is property acquired through foreclosure or other proceedings on defaulted loans. OREO includes properties vacated by the borrower and maintained by the Company, regardless of whether title in the property has transferred to the Company. OREO is initially recorded at fair value, less estimated selling costs. OREO is evaluated regularly and any decreases in value along with holding costs, such as taxes and insurance, are reported in noninterest expense.

Loans Held for Sale

Loans held for sale (“LHFS”) represent mortgage loan originations intended to be sold in the secondary market and other loans that management has an active plan to sell. LHFS are carried at the lower-of-cost-or-fair value as determined on an aggregate basis by type of loan with the exception of loans for which the Company has elected fair value accounting, which are carried at fair value. The credit component of any writedowns upon the transfer of loans to LHFS is reflected in loan charge-offs.

Where an election is made to carry the LHFS at fair value, any further decreases or subsequent increases in fair value are recognized in noninterest income. Where an election is made to carry LHFS at lower-of-cost-or-fair value, any further decreases are recognized in noninterest income and increases in fair value are not recognized until the loans are sold. Fair value elections are made at the time of origination or purchase based on the Company’s fair value election policy.

Derivative Financial Instruments

In the ordinary course of business, the Company enters into derivative transactions to manage its interest rate, prepayment, credit, price and foreign currency risk and to accommodate the business requirements of its customers. Derivative instruments are reported in other assets or other liabilities at fair value. Changes in a derivative’s fair value are recognized currently in earnings unless specific hedge accounting criteria are met.

All derivative instruments that qualify and are designated for hedge accounting are recorded at fair value and classified either as a hedge of the fair value of a recognized asset or liability (“fair value hedge”), a hedge of the variability of cash flows to be received or paid related to a recognized asset or liability or a forecasted transaction (“cash flow hedge”), or a hedge of the volatility of an investment in foreign operations driven by changes in foreign currency exchange rates (“net investment hedge”). Changes in the fair value of a derivative that is highly effective and designated as a fair value hedge, and the offsetting changes in the fair value of the hedged item, are recorded in earnings. Effective changes in the fair value of a derivative designated as a cash flow hedge are recorded in other comprehensive income (loss) until cash flows of the hedged item are realized. Any change in fair value resulting from hedge ineffectiveness is immediately recorded in noninterest income. Effective changes in the fair value of net investment hedges are recorded in other comprehensive income (loss). The Company performs an assessment, both at the inception of a hedge and, at a minimum, on a quarterly basis thereafter, to determine whether derivatives designated as hedging instruments are highly effective in offsetting changes in the value of the hedged items.

If a derivative designated as a cash flow hedge is terminated or ceases to be highly effective, the gain or loss in other comprehensive income (loss) is amortized to earnings over the period the forecasted hedged transactions impact earnings. If a hedged forecasted transaction is no longer probable, hedge accounting is ceased and any gain or loss included in other comprehensive income (loss) is reported in earnings immediately, unless the forecasted transaction is at least reasonably possible of occuring, whereby the amounts within other comprehensive income (loss) remain.

Revenue Recognition

The Company recognizes revenue as it is earned based on contractual terms, as transactions occur, or as services are provided and collectability is reasonably assured. In certain circumstances, noninterest income is reported net of associated expenses that are directly related to variable volume-based sales or revenue sharing arrangements or when the Company acts on an agency basis for others. Certain specific policies include the following:

Credit and Debit Card Revenue and Corporate Payment Products Revenue Credit and debit card revenue includes interchange income from consumer credit and debit cards, annual fees, and other transaction and account management fees. Corporate payment products revenue primarily includes interchange income from corporate and purchasing card transactions processed through card association networks and merchant discount income from closed loop network transactions. Interchange income is a fee paid by a merchant bank to the card-issuing bank through the interchange network. Interchange fees are set by the credit card associations and are based on cardholder purchase volumes. Merchant discount income is a fee paid by a merchant to the Company through the closed loop network. Merchant discount fees are set by the Company directly with the merchant. The Company records interchange and merchant discount income as transactions occur. Transaction and account management fees are recognized as transactions occur or services are provided, except for annual fees, which are recognized over the applicable period. Volume-related payments to partners and credit card associations and expenses for rewards programs are also recorded within credit and debit card revenue and corporate payment products revenue. Payments to partners and expenses related to rewards programs are recorded when earned by the partner or customer.

Merchant Processing Services Merchant processing services revenue consists principally of transaction and account management fees charged to merchants for the electronic processing of transactions, net of interchange fees paid to the card-issuing bank, card association assessments, and revenue sharing amounts, and is recognized at the time the merchant’s transactions are processed or other services are performed. The Company may enter into revenue sharing agreements with referral partners or in connection with purchases of merchant contracts from sellers. The revenue sharing amounts are determined primarily on sales volume processed or revenue generated for a particular group of merchants. Merchant processing revenue also includes revenues related to point-of-sale equipment recorded as sales when the equipment is shipped or as earned for equipment rentals.

Trust and Investment Management Fees Trust and investment management fees are recognized over the period in which services are performed and are based on a percentage of the fair value of the assets under management or administration, fixed based on account type, or transaction-based fees.

Commercial Products Revenue Commercial products revenue primarily includes revenue related to ancillary services provided to Wholesale Banking and Commercial Real Estate customers including standby letter of credit fees, non-yield related loan fees, capital markets related revenue and non-yield related leasing revenue. These fees are recognized as earned or as transactions occur and services are provided.

Mortgage Banking Revenue Mortgage banking revenue includes revenue derived from mortgages originated and subsequently sold, generally with servicing retained. The primary components include: gains and losses on mortgage sales; servicing revenue, including losses related to the repurchase of previously sold loans; changes in fair value for mortgage loans originated with the intent to sell and measured at fair value under the fair value option; changes in the fair value of mortgage servicing rights (“MSRs”); and the impact of risk management activities associated with the mortgage origination pipeline, funded loans and MSRs. Net interest income from mortgage loans is recorded in interest income. Refer to Other Significant Policies in Note 1, as well as Note 9 and Note 20 for a further discussion of MSRs.

Deposit Service Charges Service charges on deposit accounts are primarily monthly fees based on minimum balances or transaction-based fees. These fees are recognized as earned or as transactions occur and services are provided.

Other Significant Policies

Intangible Assets The price paid over the net fair value of acquired businesses (“goodwill”) is not amortized. Other intangible assets are amortized over their estimated useful lives, using straight-line and accelerated methods. The recoverability of goodwill and other intangible assets is evaluated annually, at a minimum, or on an interim basis if events or circumstances indicate a possible inability to realize the carrying amount. The evaluation includes assessing the estimated fair value of the intangible asset based on market prices for similar assets, where available, and the present value of the estimated future cash flows associated with the intangible asset.

Income Taxes Deferred taxes are recorded to reflect the tax consequences on future years of differences between the tax basis of assets and liabilities and their financial reporting carrying amounts.

Mortgage Servicing Rights MSRs are capitalized as separate assets when loans are sold and servicing is retained or if they are purchased from others. MSRs are recorded at fair value. The Company determines the fair value by estimating the present value of the asset’s future cash flows utilizing market-based prepayment rates, discount rates, and other assumptions validated through comparison to trade information, industry surveys and independent third party valuations. Changes in the fair value of MSRs are recorded in earnings during the period in which they occur.

Pensions For purposes of its pension plans, the Company utilizes its fiscal year-end as the measurement date. At the measurement date, plan assets are determined based on fair value, generally representing observable market prices or the net asset value provided by the plans’ administrator. The actuarial cost method used to compute the pension liabilities and related expense is the projected unit credit method. The projected benefit obligation is principally determined based on the present value of projected benefit distributions at an assumed discount rate. The discount rate utilized is based on the investment yield of high quality corporate bonds available in the marketplace with maturities equal to projected cash flows of future benefit payments as of the measurement date. Periodic pension expense (or income) includes service costs, interest costs based on the assumed discount rate, the expected return on plan assets based on an actuarially derived market-related value and amortization of actuarial gains and losses. Pension accounting reflects the long-term nature of benefit obligations and the investment horizon of plan assets, and can have the effect of reducing earnings volatility related to short-term changes in interest rates and market valuations. Actuarial gains and losses include the impact of plan amendments and various unrecognized gains and losses which are deferred and amortized over the future service periods of active employees. The market-related value utilized to determine the expected return on plan assets is based on fair value adjusted for the difference between expected returns and actual performance of plan assets. The unrealized difference between actual experience and expected returns is included in expense over a period of approximately twelve years. The overfunded or underfunded status of the plans is recorded as an asset or liability on the Consolidated Balance Sheet, with changes in that status recognized through other comprehensive income (loss).

Premises and Equipment Premises and equipment are stated at cost less accumulated depreciation and depreciated primarily on a straight-line basis over the estimated life of the assets. Estimated useful lives range up to 40 years for newly constructed buildings and from 3 to 20 years for furniture and equipment.

Capitalized leases, less accumulated amortization, are included in premises and equipment. Capitalized lease obligations are included in long-term debt. Capitalized leases are amortized on a straight-line basis over the lease term and the amortization is included in depreciation expense.

Stock-Based Compensation The Company grants stock-based awards, including restricted stock, restricted stock units and options to purchase common stock of the Company. Stock option grants are for a fixed number of shares to employees and directors with an exercise price equal to the fair value of the shares at the date of grant. Restricted stock and restricted stock unit grants are awarded at no cost to the recipient. Stock-based compensation for awards is recognized in the Company’s results of operations on a straight-line basis over the vesting period. The Company immediately recognizes compensation cost of awards to employees that meet retirement status, despite their continued active employment. The amortization of stock-based compensation reflects estimated forfeitures adjusted for actual forfeiture experience. As compensation expense is recognized, a deferred tax asset is recorded that represents an estimate of the future tax deduction from exercise or release of restrictions. At the time stock-based awards are exercised, cancelled, expire, or restrictions are released, the Company may be required to recognize an adjustment to tax expense, depending on the market price of the Company’s common stock at that time.

Per Share Calculations Earnings per common share is calculated by dividing net income applicable to U.S. Bancorp common shareholders by the weighted average number of common shares outstanding. Diluted earnings per common share is calculated by adjusting income and outstanding shares, assuming conversion of all potentially dilutive securities.

Business Combinations and Divestitures

12 Months Ended

Dec. 31, 2012

Business Combinations and Divestitures

NOTE 2

Business Combinations and Divestitures

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.

During 2011, the Company acquired the banking operations of First Community Bank of New Mexico (“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. In addition, the Company recognized a $46 million gain on this transaction during 2011.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1497-128463

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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Reference 15: http://www.xbrl.org/2003/role/presentationRef
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Reference 16: http://www.xbrl.org/2003/role/presentationRef
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Reference 18: http://www.xbrl.org/2003/role/presentationRef
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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-Number 141R
-Paragraph 67-73
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Restrictions on Cash and Due from Banks

12 Months Ended

Dec. 31, 2012

Restrictions on Cash and Due from Banks

NOTE 3

Restrictions on Cash and Due from Banks

The Federal Reserve Bank requires bank subsidiaries to maintain minimum average reserve balances, either in the form of cash or reserve balances held with the Federal Reserve Bank. The amount of those required reserve balances was approximately $1.7 billion at December 31, 2012 and 2011. At December 31, 2012 and 2011, the Company held $.9 billion and $8.5 billion, respectively, of balances at the Federal Reserve Bank. These balances are included in cash and due from banks on the Consolidated Balance Sheet.

Investment Securities

12 Months Ended

Dec. 31, 2012

Investment Securities

NOTE 4

Investment Securities

The amortized cost, other-than-temporary impairment recorded in other comprehensive income (loss), gross unrealized holding gains and losses, and fair value of held-to-maturity and available-for-sale investment securities at December 31 were as follows:


	2012												2011
					Unrealized Losses												Unrealized Losses
(Dollars in Millions)	Amortized Cost		Unrealized Gains		Other-than- Temporary (e)			Other (f)			Fair Value		Amortized Cost		Unrealized Gains		Other-than- Temporary (e)			Other (f)			Fair Value
Held-to-maturity (a)
U.S. Treasury and agencies	$	3,154	$	27	$	–		$	–		$	3,181	$	2,560	$	35	$	–		$	–		$	2,595
Mortgage-backed securities
Residential
Agency		31,064		545		–			(6	)		31,603		16,085		333		–			(3	)		16,415
Non-agency non-prime (d)		1		–		–			–			1		2		–		–			–			2
Commercial non-agency		2		–		–			–			2		4		–		–			(2	)		2
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations		7		15		–			–			22		52		13		–			(2	)		63
Other		19		2		(3	)		(1	)		17		23		1		(6	)		(1	)		17
Obligations of state and political subdivisions		20		1		–			–			21		23		1		–			(1	)		23
Obligations of foreign governments		7		–		–			–			7		7		–		–			–			7
Other debt securities		115		–		–			(17	)		98		121		–		–			(29	)		92
Total held-to-maturity	$	34,389	$	590	$	(3	)	$	(24	)	$	34,952	$	18,877	$	383	$	(6	)	$	(38	)	$	19,216
Available-for-sale (b)
U.S. Treasury and agencies	$	1,211	$	16	$	–		$	(1	)	$	1,226	$	1,045	$	13	$	–		$	(1	)	$	1,057
Mortgage-backed securities
Residential
Agency		28,754		746		–			(5	)		29,495		39,337		981		–			(4	)		40,314
Non-agency
Prime (c)		641		3		(16	)		(4	)		624		911		5		(63	)		(50	)		803
Non-prime (d)		372		4		(20	)		(1	)		355		1,047		9		(247	)		(7	)		802
Commercial
Agency		185		8		–			–			193		133		7		–			–			140
Non-agency		–		–		–			–			–		42		2		–			(2	)		42
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations		32		10		–			–			42		180		31		(3	)		(2	)		206
Other		579		14		–			(1	)		592		694		16		(5	)		(24	)		681
Obligations of state and political subdivisions		6,059		396		–			–			6,455		6,394		167		–			(22	)		6,539
Obligations of foreign governments		6		–		–			–			6		6		–		–			–			6
Corporate debt securities		814		2		–			(85	)		731		1,000		1		–			(174	)		827
Perpetual preferred securities		205		27		–			(14	)		218		379		25		–			(86	)		318
Other investments		182		20		–			–			202		188		15		–			(1	)		202
Total available-for-sale	$	39,040	$	1,246	$	(36	)	$	(111	)	$	40,139	$	51,356	$	1,272	$	(318	)	$	(373	)	$	51,937

(a)

Held-to-maturity investment securities are carried at historical cost or at fair value at the time of transfer from the available-for-sale to held-to-maturity category, adjusted for amortization of premiums and accretion of discounts and credit-related other-than-temporary impairment.

(b)

Available-for-sale investment securities are carried at fair value with unrealized net gains or losses reported within accumulated other comprehensive income (loss) in shareholders’ equity.

(c)

Prime securities are those designated as such by the issuer at origination. When an issuer designation is unavailable, the Company determines at acquisition date the categorization based on asset pool characteristics (such as weighted-average credit score, loan-to-value, loan type, prevalence of low documentation loans) and deal performance (such as pool delinquencies and security market spreads). When the Company determines the designation, prime securities typically have a weighted average credit score of 725 or higher and a loan-to-value of 80 percent or lower; however, other pool characteristics may result in designations that deviate from these credit score and loan-to-value thresholds.

(d)

Includes all securities not meeting the conditions to be designated as prime.

(e)

Represents impairment not related to credit for those investment securities that have been determined to be other-than-temporarily impaired.

(f)

Represents unrealized losses on investment securities that have not been determined to be other-than-temporarily impaired.

During 2012, the Company transferred $11.7 billion of available-for-sale agency mortgage-backed investment securities to the held-to-maturity category, reflecting the Company’s intent to hold those securities to maturity.

The weighted-average maturity of the available-for-sale investment securities was 4.1 years at December 31, 2012, compared with 5.2 years at December 31, 2011. The corresponding weighted-average yields were 2.93 percent and 3.19 percent, respectively. The weighted-average maturity of the held-to-maturity investment securities was 3.3 years at December 31, 2012, and 3.9 years at December 31, 2011. The corresponding weighted-average yields were 1.94 percent and 2.21 percent, respectively.

For amortized cost, fair value and yield by maturity date of held-to-maturity and available-for-sale investment securities outstanding at December 31, 2012, refer to Table 13 included in Management’s Discussion and Analysis which is incorporated by reference into these Notes to Consolidated Financial Statements.

Investment securities with a fair value of $20.1 billion at December 31, 2012, and $20.7 billion at December 31, 2011, were pledged to secure public, private and trust deposits, repurchase agreements and for other purposes required by contractual obligation or law. Included in these amounts were securities where the Company and certain counterparties have agreements granting the counterparties the right to sell or pledge the securities. Investment securities delivered under these types of arrangements had a fair value of $3.4 billion at December 31, 2012, and $7.0 billion at December 31, 2011.

The following table provides information about the amount of interest income from taxable and non-taxable investment securities:


Year Ended December 31 (Dollars in Millions)	2012		2011		2010
Taxable	$	1,515	$	1,517	$	1,292
Non-taxable		277		303		309
Total interest income from investment securities	$	1,792	$	1,820	$	1,601

The following table provides information about the amount of gross gains and losses realized through the sales of available-for-sale investment securities:


Year Ended December 31 (Dollars in Millions)	2012			2011			2010
Realized gains	$	158		$	11		$	21
Realized losses		(99	)		(7	)		(8	)
Net realized gains (losses)	$	59		$	4		$	13
Income tax (benefit) on net realized gains (losses)	$	23		$	2		$	5

In 2007, the Company purchased certain structured investment securities (“SIVs”) from certain money market funds managed by an affiliate of the Company. Subsequent to the initial purchase, the Company exchanged its interest in the SIVs for a pro-rata portion of the underlying investment securities according to the applicable restructuring agreements. The SIVs and the investment securities received are collectively referred to as “SIV-related securities”. During 2012, the Company sold essentially all of the SIV-related securities.

Some of the SIV-related securities evidenced credit deterioration at the time of acquisition by the Company. All investment securities with evidence of credit deterioration at acquisition have been subsequently sold by the Company as of December 31, 2012. Changes in the accretable balance for these investment securities were as follows:


Year Ended December 31 (Dollars in Millions)	2012			2011			2010
Balance at beginning of period	$	100		$	139		$	292
Additions (a)		–			–			66
Disposals		(90	)		–			(219	) (b)
Accretion		(11	)		(17	)		(29	)
Other (c)		1			(22	)		29
Balance at end of period	$	–		$	100		$	139

(a)

Primarily resulted from the exchange of certain SIVs for the underlying investment securities.

(b)

Primarily resulted from the sale of securities covered under loss sharing agreements with the FDIC and the exchange of certain SIVs for the underlying investment securities.

(c)

Primarily represents changes in projected future cash flows related to variable rates on certain investment securities.

The Company conducts a regular assessment of its investment securities with unrealized losses to determine whether investment securities are other-than-temporarily impaired considering, among other factors, the nature of the investment securities, credit ratings or financial condition of the issuer, the extent and duration of the unrealized loss, expected cash flows of underlying collateral, market conditions and whether the Company intends to sell or it is more likely than not the Company will be required to sell the investment securities.

The following table summarizes other-than-temporary impairment by investment category:


	2012									2011									2010
Year Ended December 31 (Dollars in Millions)	Losses Recorded in Earnings			Other Gains (Losses) (c)			Total			Losses Recorded in Earnings			Other Gains (Losses) (c)			Total			Losses Recorded in Earnings			Other Gains (Losses) (c)			Total
Held-to-maturity
Other asset-backed securities	$	–		$	–		$	–		$	–		$	–		$	–		$	(2	)	$	–		$	(2	)
Total held-to-maturity	$	–		$	–		$	–		$	–		$	–		$	–		$	(2	)	$	–		$	(2	)
Available-for-sale
Mortgage-backed securities
Non-agency residential
Prime (a)	$	(12	)	$	(9	)	$	(21	)	$	(3	)	$	(5	)	$	(8	)	$	(5	)	$	(10	)	$	(15	)
Non-prime (b)		(33	)		21			(12	)		(24	)		(23	)		(47	)		(63	)		(60	)		(123	)
Commercial non-agency		(1	)		(1	)		(2	)		–			–			–			–			–			–
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations		–			–			–			–			–			–			(6	)		(1	)		(7	)
Other		(1	)		1			–			(4	)		3			(1	)		(13	)		4			(9	)
Obligations of state and political subdivisions		–			–			–			(4	)		–			(4	)		–			–			–
Perpetual preferred securities		(27	)		–			(27	)		–			–			–			(1	)		–			(1	)
Other debt securities		–			–			–			–			–			–			(1	)		1			–
Total available-for-sale	$	(74	)	$	12		$	(62	)	$	(35	)	$	(25	)	$	(60	)	$	(89	)	$	(66	)	$	(155	)

(a)

(b)

Includes all securities not meeting the conditions to be designated as prime.

(c)

Losses represent the non-credit portion of other-than-temporary impairment recorded in other comprehensive income (loss) for investment securities determined to be other-than-temporarily impaired during the period. Gains represent recoveries in the fair value of securities that have or previously had non-credit other-than-temporary impairment.

The Company determined the other-than-temporary impairment recorded in earnings for debt securities not intended to be sold by estimating the future cash flows of each individual investment security, using market information where available, and discounting the cash flows at the original effective rate of the investment security. Other-than-temporary impairment recorded in other comprehensive income (loss) was measured as the difference between that discounted amount and the fair value of each investment security. For perpetual preferred securities determined to be other-than-temporarily impaired, the Company recorded a loss in earnings for the entire difference between the securities’ fair value and their amortized cost.

The following table includes the ranges for principal assumptions used for those available-for-sale non-agency mortgage-backed securities determined to be other-than-temporarily impaired:


	Prime (a)									Non-Prime (b)
	Minimum			Maximum			Average			Minimum			Maximum			Average
December 31, 2012
Estimated lifetime prepayment rates		6	%		22	%		14	%		3	%		10	%		6	%
Lifetime probability of default rates		3			6			4			3			10			7
Lifetime loss severity rates		40			50			47			45			65			56
December 31, 2011
Estimated lifetime prepayment rates		4	%		15	%		14	%		2	%		11	%		6	%
Lifetime probability of default rates		2			9			3			1			20			5
Lifetime loss severity rates		40			50			46			8			70			52

(a)

(b)

Includes all securities not meeting the conditions to be designated as prime.

Changes in the credit losses on debt securities (excludes perpetual preferred securities) are summarized as follows:


Year Ended December 31 (Dollars in Millions)	2012			2011			2010
Balance at beginning of period	$	298		$	358		$	335
Additions to Credit Losses Due to Other-than-temporary Impairments
Credit losses on securities not previously considered other-than-temporarily impaired		6			7			18
Decreases in expected cash flows on securities for which other-than-temporary impairment was previously recognized		41			28			72
Total other-than-temporary impairment on debt securities		47			35			90
Other Changes in Credit Losses
Increases in expected cash flows		(15	)		(21	)		(26	)
Realized losses (a)		(39	)		(73	)		(60	)
Credit losses on security sales and securities expected to be sold		(157	)		(1	)		–
Other		–			–			19
Balance at end of period	$	134		$	298		$	358

(a)

Primarily represents principal losses allocated to mortgage and asset-backed securities in the Company’s portfolio under the terms of the securitization transaction documents.

At December 31, 2012, certain investment securities had a fair value below amortized cost. The following table shows the gross unrealized losses and fair value of the Company’s investment securities with unrealized losses, aggregated by investment category and length of time the individual investment securities have been in continuous unrealized loss positions, at December 31, 2012:


	Less Than 12 Months					12 Months or Greater						Total
(Dollars in Millions)	Fair Value		Unrealized Losses				Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Held-to-maturity
U.S. Treasury and agencies	$	100	$	–			$	–	$	–		$	100	$	–
Mortgage-backed securities
Residential agency		1,015		(6	)			–		–			1,015		(6	)
Commercial non-agency		–		–				2		–			2		–
Other asset-backed securities		–		–				10		(4	)		10		(4	)
Corporate debt securities		–		–				97		(17	)		97		(17	)
Total held-to-maturity	$	1,115	$	(6	)		$	109	$	(21	)	$	1,224	$	(27	)
Available-for-sale
U.S. Treasury and agencies	$	400	$	(1	)		$	–	$	–		$	400	$	(1	)
Mortgage-backed securities
Residential
Agency		3,316		(5	)			173		–			3,489		(5	)
Non-agency (a)
Prime (b)		17		–				404		(20	)		421		(20	)
Non-prime (c)		–		–				284		(21	)		284		(21	)
Other asset-backed securities		–		–				2		(1	)		2		(1	)
Obligations of state and political subdivisions		48		–				12		–			60		–
Obligations of foreign governments		6		–				–		–			6		–
Corporate debt securities		5		–				586		(85	)		591		(85	)
Perpetual preferred securities		–		–				119		(14	)		119		(14	)
Other investments		2		–				3		–			5		–
Total available-for-sale	$	3,794	$	(6	)		$	1,583	$	(141	)	$	5,377	$	(147	)

(a)

The Company has $41 million of unrealized losses on residential non-agency mortgage-backed securities. Credit-related other-than-temporary impairment on these securities may occur if there is further deterioration in the underlying collateral pool performance. Borrower defaults may increase if current economic conditions persist or worsen. Additionally, further deterioration in home prices may increase the severity of projected losses.

(b)

(c)

Includes all securities not meeting the conditions to be designated as prime.

The Company does not consider these unrealized losses to be credit-related. These unrealized losses primarily relate to changes in interest rates and market spreads subsequent to purchase. A substantial portion of investment securities that have unrealized losses are either corporate debt or mortgage-backed securities issued with high investment grade credit ratings. In general, the issuers of the investment securities are contractually prohibited from prepayment at less than par, and the Company did not pay significant purchase premiums for these investment securities. At December 31, 2012, the Company had no plans to sell investment securities with unrealized losses, and believes it is more likely than not it would not be required to sell such investment securities before recovery of their amortized cost.

Loans and Allowance for Credit Losses

12 Months Ended

Dec. 31, 2012

Loans and Allowance for Credit Losses

NOTE 5

Loans and Allowance for Credit Losses

The composition of the loan portfolio at December 31, disaggregated by class and underlying specific portfolio type, was as follows:


(Dollars in Millions)	2012		2011
Commercial
Commercial	$	60,742	$	50,734
Lease financing		5,481		5,914
Total commercial		66,223		56,648
Commercial Real Estate
Commercial mortgages		31,005		29,664
Construction and development		5,948		6,187
Total commercial real estate		36,953		35,851
Residential Mortgages
Residential mortgages		32,648		28,669
Home equity loans, first liens		11,370		8,413
Total residential mortgages		44,018		37,082
Credit Card		17,115		17,360
Other Retail
Retail leasing		5,419