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

Achieves Record Total Net Revenue of $4.5 Billion

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

•

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

	•		$11.4 billion of new commercial and commercial real estate commitments
	•		$17.9 billion of commercial and commercial real estate commitment renewals
	•		$1.7 billion of lines related to new credit card accounts
	•		$15.3 billion of mortgage production and other retail originations

•

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

	•		6.8 percent growth in average noninterest-bearing deposits
	•		29.7 percent growth in average total savings deposits

	•		Total net revenue growth of 8.7 percent over the second quarter of 2009
	•		Net interest income growth of 14.5 percent over the second quarter of 2009, driven by a 5.6 percent increase in average earning assets and growth in lower cost core deposit funding
	•		Net interest margin of 3.90 percent for the second quarter of 2010, compared with 3.60 percent in the second quarter of 2009 (and 3.90 percent in the first quarter of 2010)

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

•

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

	•		Higher merchant processing services revenue (15.1 percent) and corporate payment products revenue (6.0 percent)
	•		A 42.4 percent increase in commercial products revenue (principally syndication revenue, standby letters of credit fees and commercial loan fees)

•

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

	•		Third consecutive quarterly decrease in the provision for credit losses
	•		Net charge-offs decreased 1.9 percent from first quarter of 2010
	•		Nonperforming assets decreased 7.8 percent from first quarter of 2010
	•		Early and late stage loan delinquencies (excluding covered loans) as a percentage of ending loan balances declined in a majority of major loan categories on a linked quarter basis
	•		Allowance to period-end loans (excluding covered loans) was 3.18 percent at June 30, 2010, compared with 3.20 percent at March 31, 2010
	•		Allowance to nonperforming assets (excluding covered assets) was 146 percent at June 30, 2010, compared with 136 percent at March 31, 2010

•

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

	•		Tier 1 capital ratio of 10.1 percent
	•		Total risk-based capital ratio of 13.4 percent
	•		Tier 1 common equity ratio of 7.4 percent

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

EARNINGS SUMMARY		Table 1

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

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

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

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

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

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

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

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

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

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

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

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

INCOME STATEMENT HIGHLIGHTS		Table 2

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

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

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

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

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

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

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

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

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

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

NET INTEREST INCOME		Table 3

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

Net Interest Income

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Noninterest Income

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

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

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

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

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

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

Noninterest Expense

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

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

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

Provision for Income Taxes

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

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

ALLOWANCE FOR CREDIT LOSSES		Table 8

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

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

Credit Quality

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

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

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

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

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

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

CREDIT RATIOS		Table 9

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

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

ASSET QUALITY		Table 10

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