Edgar Filing: US BANCORP \DE\

FORM 10-Q

LOGO

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2012

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from (not applicable)

Commission file number 1-6880

U.S. BANCORP

(Exact name of registrant as specified in its charter)

Delaware

41-0255900

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

800 Nicollet Mall

Minneapolis, Minnesota 55402

(Address of principal executive offices, including zip code)

651-466-3000

(Registrant’s telephone number, including area code)

(not applicable)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.

YES þ NO ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES þ NO ¨

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


Large accelerated filer þ		Accelerated filer ¨
Non-accelerated filer ¨		Smaller reporting company ¨
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ¨ NO þ

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

Class

Common Stock, $.01 Par Value

Outstanding as of April 30, 2012

1,894,190,134 shares

Table of Contents and Form 10-Q Cross Reference Index


Part I — Financial Information
1) Management’s Discussion and Analysis of Financial Condition and Results of Operations (Item 2)
a) Overview			3
b) Statement of Income Analysis			3
c) Balance Sheet Analysis			5
d) Non-GAAP Financial Measures			29
e) Critical Accounting Policies			30
f) Controls and Procedures (Item 4)			30
2) Quantitative and Qualitative Disclosures About Market Risk/Corporate Risk Profile (Item 3)
a) Overview			8
b) Credit Risk Management			8
c) Residual Value Risk Management			21
d) Operational Risk Management			21
e) Interest Rate Risk Management			21
f) Market Risk Management			22
g) Liquidity Risk Management			23
h) Capital Management			24
3) Line of Business Financial Review			25
4) Financial Statements (Item 1)			31
Part II — Other Information
1) Risk Factors (Item 1A)			69
2) Unregistered Sales of Equity Securities and Use of Proceeds (Item 2)			69
3) Exhibits (Item 6)			69
4) Signature			70
5) Exhibits			71

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995.

This quarterly report on Form 10-Q contains forward-looking statements about U.S. Bancorp. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements and are based on the information available to, and assumptions and estimates made by, management as of the date hereof. These forward-looking statements cover, among other things, anticipated future revenue and expenses and the future plans and prospects of U.S. Bancorp. Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated, including deterioration in general business and economic conditions; a recurrence of turbulence in the financial markets; continued stress in the commercial real estate markets, as well as a delay or failure of recovery in the residential real estate markets; changes in interest rates; deterioration in the credit quality of U.S. Bancorp’s loan portfolios or in the value of the collateral securing those loans; deterioration in the value of securities held in U.S. Bancorp’s investment securities portfolio; legal and regulatory developments; increased competition from both banks and non-banks; changes in customer behavior and preferences; effects of mergers and acquisitions and related integration; effects of critical accounting policies and judgments; and management’s ability to effectively manage credit risk, residual value risk, market risk, operational risk, interest rate risk, and liquidity risk.

For discussion of these and other risks that may cause actual results to differ from expectations, refer to U.S. Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2011, on file with the Securities and Exchange Commission, including the sections entitled “Risk Factors” and “Corporate Risk Profile” contained in Exhibit 13, and all subsequent filings with the Securities and Exchange Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934. Forward-looking statements speak only as of the date hereof, and U.S. Bancorp undertakes no obligation to update them in light of new information or future events.



U. S. Bancorp		1


Table 1		Selected Financial Data


	Three Months Ended March 31,
(Dollars and Shares in Millions, Except Per Share Data)	2012			2011			Percent Change
Condensed Income Statement
Net interest income (taxable-equivalent basis) (a)	$	2,690		$	2,507			7.3	%
Noninterest income		2,239			2,017			11.0
Securities gains (losses), net		–			(5	)		*
Total net revenue		4,929			4,519			9.1
Noninterest expense		2,560			2,314			10.6
Provision for credit losses		481			755			(36.3	)
Income before taxes		1,888			1,450			30.2
Taxable-equivalent adjustment		56			55			1.8
Applicable income taxes		527			366			44.0
Net income		1,305			1,029			26.8
Net (income) loss attributable to noncontrolling interests		33			17			94.1
Net income attributable to U.S. Bancorp	$	1,338		$	1,046			27.9
Net income applicable to U.S. Bancorp common shareholders	$	1,285		$	1,003			28.1
Per Common Share
Earnings per share	$	.68		$	.52			30.8	%
Diluted earnings per share		.67			.52			28.8
Dividends declared per share		.195			.125			56.0
Book value per share		16.94			14.83			14.2
Market value per share		31.68			26.43			19.9
Average common shares outstanding		1,901			1,918			(.9	)
Average diluted common shares outstanding		1,910			1,928			(.9	)
Financial Ratios
Return on average assets		1.60	%		1.38	%
Return on average common equity		16.2			14.5
Net interest margin (taxable-equivalent basis) (a)		3.60			3.69
Efficiency ratio (b)		51.9			51.1
Net charge-offs as a percent of average loans outstanding		1.09			1.65
Average Balances
Loans	$	210,161		$	197,570			6.4	%
Loans held for sale		6,879			6,104			12.7
Investment securities (c)		71,476			56,405			26.7
Earning assets		300,044			273,940			9.5
Assets		336,287			307,896			9.2
Noninterest-bearing deposits		63,583			44,189			43.9
Deposits		228,284			204,305			11.7
Short-term borrowings		29,062			32,203			(9.8	)
Long-term debt		31,551			31,567			(.1	)
Total U.S. Bancorp shareholders’ equity		35,415			30,009			18.0

	March 31, 2012			December 31, 2011
Period End Balances
Loans	$	211,919		$	209,835			1.0	%
Investment securities		74,254			70,814			4.9
Assets		340,762			340,122			.2
Deposits		233,553			230,885			1.2
Long-term debt		30,395			31,953			(4.9	)
Total U.S. Bancorp shareholders’ equity		35,900			33,978			5.7
Asset Quality
Nonperforming assets	$	3,454		$	3,774			(8.5	)
Allowance for credit losses		4,919			5,014			(1.9	)
Allowance for credit losses as a percentage of period-end loans		2.32	%		2.39	%
Capital Ratios
Tier 1 capital		10.9	%		10.8	%
Total risk-based capital		13.3			13.3
Leverage		9.2			9.1
Tangible common equity to tangible assets (d)		6.9			6.6
Tangible common equity to risk-weighted assets (d)		8.3			8.1
Tier 1 common equity to risk-weighted assets using Basel I definition (d)		8.7			8.6
Tier 1 common equity to risk-weighted assets using anticipated Basel III definition (d)		8.4			8.2

*	Not meaningful.

(a)

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

(b)

Computed as noninterest expense divided by the sum of net interest income on a taxable-equivalent basis and noninterest income excluding net securities gains (losses).

(c)

Excludes unrealized gains and losses

(d)

See Non-GAAP Financial Measures beginning on page 29.



2		U. S. Bancorp

Management’s Discussion and Analysis

OVERVIEW

Earnings Summary U.S. Bancorp and its subsidiaries (the “Company”) reported net income attributable to U.S. Bancorp of $1.3 billion for the first quarter of 2012, or $.67 per diluted common share, compared with $1.0 billion, or $.52 per diluted common share for the first quarter of 2011. Return on average assets and return on average common equity were 1.60 percent and 16.2 percent, respectively, for the first quarter of 2012, compared with 1.38 percent and 14.5 percent, respectively, for the first quarter of 2011. Included in the first quarter of 2011 was a $46 million gain related to the acquisition of First Community Bank of New Mexico (“FCB”) in a transaction with the Federal Deposit Insurance Corporation (“FDIC”). The provision for credit losses was $90 million lower than net charge-offs for the first quarter of 2012, compared with $50 million lower than net charge-offs for the first quarter of 2011.

Total net revenue, on a taxable-equivalent basis, for the first quarter of 2012 was $410 million (9.1 percent) higher than the first quarter of 2011, reflecting a 7.3 percent increase in net interest income and an 11.3 percent increase in noninterest income. The increase in net interest income over a year ago was largely the result of an increase in average earning assets and continued growth in lower cost core deposit funding. Noninterest income increased over a year ago, primarily due to higher mortgage banking revenue, merchant processing services revenue, commercial products revenue and deposit service charges, partially offset by a reduction in credit and debit card revenue and ATM processing services revenue.

Noninterest expense in the first quarter of 2012 was $246 million (10.6 percent) higher than the first quarter of 2011, primarily due to higher compensation expense, employee benefits costs, marketing and business development expense and regulatory and insurance-related costs.

The provision for credit losses for the first quarter of 2012 of $481 million was $274 million (36.3 percent) lower than the first quarter of 2011. Net charge-offs in the first quarter of 2012 were $571 million, compared with $805 million in the first quarter of 2011. Refer to “Corporate Risk Profile” for further information on the provision for credit losses, net charge-offs, nonperforming assets and other factors considered by the

Company in assessing the credit quality of the loan portfolio and establishing the allowance for credit losses.

STATEMENT OF INCOME ANALYSIS

Net Interest Income Net interest income, on a taxable-equivalent basis, was $2.7 billion in the first quarter of 2012, compared with $2.5 billion in the first quarter of 2011. The $183 million (7.3 percent) increase was primarily the result of growth in average earning assets and lower cost core deposit funding. Average earning assets were $26.1 billion (9.5 percent) higher in the first quarter of 2012, compared with the first quarter of 2011, driven by increases of $15.1 billion (26.7 percent) in investment securities and $12.6 billion (6.4 percent) in loans, partially offset by a reduction in cash balances held at the Federal Reserve. The net interest margin in the first quarter of 2012 was 3.60 percent, compared with 3.69 percent in the first quarter of 2011. The decrease in the net interest margin from the first quarter of 2011 reflected increased investment securities held for liquidity purposes and lower loan yields, partially offset by a reduction in cash balances held at the Federal Reserve and inclusion of credit card balance transfer fees in interest income beginning in the first quarter of 2012. Refer to the “Consolidated Daily Average Balance Sheet and Related Yields and Rates” table for further information on net interest income.

Total average loans for the first quarter of 2012 were $12.6 billion (6.4 percent) higher than the first quarter of 2011, driven by growth in residential mortgages (19.1 percent), commercial loans (17.3 percent), credit card loans (4.1 percent) and commercial real estate loans (2.3 percent). These increases were driven by higher demand for loans from new and existing customers. Also, in late December of 2011, the Company purchased approximately $700 million of consumer credit cards. The purchase increased first quarter of 2012 average credit card balances by approximately $623 million. The increases were partially offset by declines in other retail loans (.4 percent) and loans covered by loss sharing agreements with the FDIC (17.8 percent). Average loans acquired in FDIC-assisted transactions that are covered by loss sharing agreements with the FDIC (“covered” loans) were $14.5 billion in the first quarter of 2012, compared with $17.6 billion in the same period of 2011.



U. S. Bancorp		3


Table 2		Noninterest Income


	Three Months Ended March 31,
(Dollars in Millions)	2012		2011			Percent Change
Credit and debit card revenue	$	202	$	267			(24.3	)%
Corporate payment products revenue		175		175			–
Merchant processing services		337		301			12.0
ATM processing services		87		112			(22.3	)
Trust and investment management fees		252		256			(1.6	)
Deposit service charges		153		143			7.0
Treasury management fees		134		137			(2.2	)
Commercial products revenue		211		191			10.5
Mortgage banking revenue		452		199			*
Investment products fees and commissions		35		32			9.4
Securities gains (losses), net		–		(5	)		*
Other		201		204			(1.5	)
Total noninterest income	$	2,239	$	2,012			11.3	%

*	Not meaningful.

Average investment securities in the first quarter of 2012 were $15.1 billion (26.7 percent) higher than the first quarter of 2011, primarily due to purchases of government agency mortgage-backed securities, as the Company increased its on-balance sheet liquidity in response to anticipated regulatory requirements.

Average total deposits for the first quarter of 2012 were $24.0 billion (11.7 percent) higher than the first quarter of 2011. Average noninterest-bearing deposits for the first quarter of 2012 were $19.4 billion (43.9 percent) higher than the same period of 2011, with growth in average balances in a majority of the lines of business, including Wholesale Banking and Commercial Real Estate, Wealth Management and Securities Services, and Consumer and Small Business Banking. Average total savings deposits were $8.6 billion (7.6 percent) higher in the first quarter of 2012, compared with the first quarter of 2011, primarily due to growth in corporate and institutional trust balances, as well as an increase in Consumer and Small Business Banking balances, partially offset by lower broker-dealer and government banking balances. Average time certificates of deposit less than $100,000 were slightly lower, while time deposits greater than $100,000 were $3.7 billion (11.9 percent) lower in the first quarter of 2012, compared with the first quarter of 2011, principally in corporate and institutional trust average balances.

Provision for Credit Losses The provision for credit losses for the first quarter of 2012 decreased $274 million (36.3 percent) from the first quarter of 2011. Net charge-offs decreased $234 million (29.1 percent) in the first quarter of 2012, compared with the first quarter of 2011, principally due to improvement in the commercial, commercial real estate, and credit card portfolios. The provision for credit losses was lower than net charge-offs by $90 million in the first quarter of 2012, compared with

$50 million lower than net charge-offs in the first quarter of 2011. Refer to “Corporate Risk Profile” for further information on the provision for credit losses, net charge-offs, nonperforming assets and other factors considered by the Company in assessing the credit quality of the loan portfolio and establishing the allowance for credit losses.

Noninterest Income Noninterest income in the first quarter of 2012 was $2.2 billion, compared with $2.0 billion in the first quarter of 2011. The $227 million (11.3 percent) increase was primarily driven by strong growth in mortgage banking revenue, principally due to higher origination and sales revenue. In addition, merchant processing services revenue increased, principally due to increased transaction volumes and legislative-mitigation efforts. Deposit service charges were higher, reflecting product redesign initiatives and account growth. Commercial products revenue was also higher, the result of higher loan syndication and bond underwriting fees. Offsetting these positive variances was a decrease in credit and debit card revenue, due to lower debit card interchange fees as a result of fourth quarter of 2011 legislation (estimated impact of $76 million in the first quarter of 2012), net of mitigation efforts, and the impact of the inclusion of credit card balance transfer fees in interest income beginning this year (approximately $20 million in the first quarter of 2012), partially offset by higher transaction volumes. ATM processing services revenue was lower than a year ago, due to excluding from revenue surcharge fees the Company passes through to others rather than reporting those amounts in occupancy expense as in previous periods. Other income was similar to 2011, as the FCB gain and a gain related to the Company’s investment in Visa Inc. recorded in the first quarter of 2011, were offset by higher equity investment income and retail lease residual revenue in the first quarter of 2012.



4		U. S. Bancorp


Table 3		Noninterest Expense


	Three Months Ended March 31,
(Dollars in Millions)	2012			2011			Percent Change
Compensation	$	1,052		$	959			9.7	%
Employee benefits		260			230			13.0
Net occupancy and equipment		220			249			(11.6	)
Professional services		84			70			20.0
Marketing and business development		109			65			67.7
Technology and communications		201			185			8.6
Postage, printing and supplies		74			74			–
Other intangibles		71			75			(5.3	)
Other		489			407			20.1
Total noninterest expense	$	2,560		$	2,314			10.6	%
Efficiency ratio (a)		51.9	%		51.1	%

(a)

Computed as noninterest expense divided by the sum of net interest income on a taxable-equivalent basis and noninterest income excluding securities gains (losses), net.

Noninterest Expense Noninterest expense was $2.6 billion in the first quarter of 2012, compared with $2.3 billion in the first quarter of 2011, an increase of $246 million (10.6 percent). The increase in noninterest expense from a year ago was principally due to higher compensation expense, employee benefits expense, marketing and business development expense and other expense. Compensation expense increased primarily as a result of growth in staffing related to branch expansion, mortgage sales-related activities, and mortgage compliance-related and other business initiatives, in addition to merit increases. Employee benefits expense increased due to higher pension costs and the impact of additional staffing. Marketing and business development expense increased due to the timing of charitable contributions and payments-related initiatives. Professional services expense was higher as a result of technology and mortgage servicing-related projects. Technology and communications expense was higher due to business expansion and technology projects. In addition, other expense increased over the prior year, driven by regulatory and insurance-related costs. These increases were partially offset by a decrease in net occupancy and equipment expense, principally reflecting the change in presentation of ATM surcharge revenue passed through to others.

Income Tax Expense The provision for income taxes was $527 million (an effective rate of 28.8 percent) for the first quarter of 2012, compared with $366 million (an effective rate of 26.2 percent) for the first quarter of 2011. The increase in the effective tax rate for the first quarter of 2012, compared with the same period of the prior year, principally reflected the impact of higher pretax earnings year-over-year. For further information on income taxes, refer to Note 9 of the

Notes to Consolidated Financial Statements.

BALANCE SHEET ANALYSIS

Loans The Company’s total loan portfolio was $211.9 billion at March 31, 2012, compared with $209.8 billion at December 31, 2011, an increase of $2.1 billion (1.0 percent). The increase was driven primarily by increases in commercial loans, residential mortgages and commercial real estate loans, partially offset by lower credit card, other retail and covered loans. The $2.1 billion (3.8 percent) increase in commercial loans was driven by higher demand from new and existing customers.

Residential mortgages held in the loan portfolio increased $1.4 billion (3.7 percent) at March 31, 2012, compared with December 31, 2011, reflecting origination and refinancing activity due to the low interest rate environment. Most loans retained in the portfolio are to customers with prime or near-prime credit characteristics at the date of origination.

Commercial real estate loans increased $251 million (.7 percent) at March 31, 2012, compared with December 31, 2011, reflecting higher demand from new and existing customers and acquired balances.

Total credit card loans decreased $788 million (4.5 percent) at March 31, 2012, compared with December 31, 2011, the result of customers spending less and paying down their balances. Other retail loans, which include retail leasing, home equity and second mortgages and other retail loans, decreased $270 million (.6 percent) at March 31, 2012, compared with December 31, 2011. The decrease was primarily driven by lower home equity balances.



U. S. Bancorp		5

Loans Held for Sale Loans held for sale, consisting primarily of residential mortgages to be sold in the secondary market, were $5.3 billion at March 31, 2012, compared with $7.2 billion at December 31, 2011. The decrease in loans held for sale was principally due to a higher amount of residential mortgage loan sales during the first quarter of 2012, as compared with the previous quarter.

Most of the residential mortgage loans the Company originates follow guidelines that allow the loans to be sold into existing, highly liquid secondary markets; in particular in government agency transactions and to government sponsored enterprises (“GSEs”). The Company also originates residential mortgages that follow its own investment guidelines, primarily well secured jumbo mortgages to borrowers with high credit quality, and near-prime non-conforming mortgages, with the intent to hold such loans in the loan portfolio. The Company generally retains portfolio loans through maturity; however, the Company’s intent may change over time based upon various factors such as ongoing asset/liability management activities, assessment of product profitability, credit risk, liquidity needs, and capital implications. If the Company’s intent or ability to hold an existing portfolio loan changes, it is transferred to loans held for sale.

Investment Securities Investment securities totaled $74.3 billion at March 31, 2012, compared with $70.8 billion at December 31, 2011. The $3.5 billion (4.9 percent) increase primarily reflected $3.1 billion of net investment purchases and a $307 million favorable change in unrealized gains (losses) on available-for-sale investment securities. Held-to-maturity securities were $21.5 billion at March 31, 2012, compared with $18.9 billion at December 31, 2011, primarily reflecting growth in government agency mortgage-backed securities, as the Company continued to increase its on-balance sheet liquidity in response to anticipated regulatory requirements.

The Company conducts a regular assessment of its investment portfolio to determine whether any securities are other-than-temporarily impaired. At March 31, 2012, the Company’s net unrealized gain on available-for-sale securities was $888 million, compared with $581 million at December 31, 2011. The favorable change in net unrealized gains was primarily due to increases in the fair value of state and political, corporate debt and perpetual preferred securities. Unrealized losses on available-for-sale securities in an unrealized loss position totaled $525 million at March 31, 2012, compared with $691 million at December 31, 2011. When assessing unrealized losses for other-than-temporary impairment, the Company considers the nature of the investment, the financial condition of the issuer, the extent and duration of unrealized loss, expected cash flows of underlying assets and market conditions. At March 31, 2012, the Company had no plans to sell securities with unrealized losses and believes it is more likely than not that it would not be required to sell such securities before recovery of their amortized cost.

There is limited market activity for non-agency mortgage-backed securities held by the Company. As a result, the Company estimates the fair value of these securities using estimates of expected cash flows, discount rates and management’s assessment of various other market factors, which are judgmental in nature. The Company recorded $9 million of impairment charges in earnings during the first quarter of 2012, predominately on non-agency mortgage-backed securities. These impairment charges were due to changes in expected cash flows primarily resulting from increases in defaults in the underlying mortgage pools. Further adverse changes in market conditions may result in additional impairment charges in future periods. Refer to Notes 2 and 11 in the Notes to Consolidated Financial Statements for further information on investment securities.



6		U. S. Bancorp


Table 4		Investment Securities


	Available-for-Sale									Held-to-Maturity
At March 31, 2012 (Dollars in Millions)	Amortized Cost		Fair Value		Weighted- Average Maturity in Years		Weighted- Average Yield (e)			Amortized Cost		Fair Value		Weighted- Average Maturity in Years		Weighted- Average Yield (e)
U.S. Treasury and Agencies
Maturing in one year or less	$	182	$	183		.4		1.72	%	$	50	$	50		.8		.61	%
Maturing after one year through five years		531		536		1.8		.94			2,449		2,478		1.9		1.00
Maturing after five years through ten years		50		54		7.9		4.12			–		–		–		–
Maturing after ten years		87		88		11.0		2.81			60		60		12.9		2.08
Total	$	850	$	861		2.8		1.48	%	$	2,559	$	2,588		2.2		1.02	%
Mortgage-Backed Securities (a)
Maturing in one year or less	$	1,081	$	1,081		.7		2.13	%	$	160	$	160		.5		1.54	%
Maturing after one year through five years		34,167		35,028		3.3		2.62			15,729		16,009		3.8		2.44
Maturing after five years through ten years		6,152		6,025		6.8		2.31			2,331		2,380		5.6		1.66
Maturing after ten years		888		859		12.4		1.81			519		531		12.0		1.43
Total	$	42,288	$	42,993		3.9		2.54	%	$	18,739	$	19,080		4.2		2.31	%
Asset-Backed Securities (a)
Maturing in one year or less	$	25	$	35		.6		15.32	%	$	11	$	14		.9		1.30	%
Maturing after one year through five years		195		213		3.8		10.81			17		15		3.6		.93
Maturing after five years through ten years		634		646		8.0		3.37			9		11		7.6		.86
Maturing after ten years		9		8		11.6		12.61			20		25		22.4		.96
Total	$	863	$	902		6.9		5.49	%	$	57	$	65		10.5		1.00	%
Obligations of State and Political Subdivisions (b) (c)
Maturing in one year or less	$	86	$	86		.5		1.82	%	$	–	$	–		.4		8.31	%
Maturing after one year through five years		4,431		4,611		4.0		6.77			7		7		3.5		7.13
Maturing after five years through ten years		1,580		1,648		5.7		6.82			1		2		6.6		7.68
Maturing after ten years		170		164		19.7		8.05			14		14		14.9		5.54
Total	$	6,267	$	6,509		4.8		6.75	%	$	22	$	23		11.0		6.14	%
Other Debt Securities
Maturing in one year or less	$	116	$	110		.2		6.24	%	$	5	$	4		.6		1.31	%
Maturing after one year through five years		–		–		–		–			94		89		4.0		1.38
Maturing after five years through ten years		25		24		5.6		6.38			29		13		8.6		1.26
Maturing after ten years		1,148		997		27.6		3.63			–		–		–		–
Total	$	1,289	$	1,131		24.7		3.92	%	$	128	$	106		4.9		1.35	%
Other Investments	$	304	$	353		11.5		3.47	%	$	–	$	–		–		–	%
Total investment securities (d)	$	51,861	$	52,749		4.6		3.13	%	$	21,505	$	21,862		4.0		2.15	%

(a)

Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities anticipating future prepayments.

(b)

Information related to obligations of state and politcal subdivisions is presented based upon yield to first optional call date if the security is purchased at a premium, yield to maturity if purchased at par or a discount.

(c)

Maturity calculations for obligations of state and politicial subdivisions are based on the first optional call date for securities with a fair value above par and contractual maturity for securities with a fair value equal to or below par.

(d)

The weighted-average maturity of the available-for-sale investment securities was 5.2 years at December 31, 2011, with a corresponding weighted-average yield of 3.19 percent. The weighted-average maturity of the held-to-maturity investment securities was 3.9 years at December 31, 2011, with a corresponding weighted-average yield of 2.21 percent.

(e)

Average yields are presented on a fully-taxable equivalent basis under a tax rate of 35 percent. Yields on available-for-sale and held-to-maturity investment securities are computed based on amortized cost balances. Average yield and maturity calculations exclude equity securities that have no stated yield or maturity.


	March 31, 2012					December 31, 2011
(Dollars in Millions)	Amortized Cost		Percent of Total			Amortized Cost		Percent of Total
U.S. Treasury and agencies	$	3,409		4.6	%	$	3,605		5.1	%
Mortgage-backed securities		61,027		83.2			57,561		82.0
Asset-backed securities		920		1.3			949		1.4
Obligations of state and political subdivisions		6,289		8.6			6,417		9.1
Other debt securities and investments		1,721		2.3			1,701		2.4
Total investment securities	$	73,366		100.0	%	$	70,233		100.0	%



U. S. Bancorp		7

Deposits Total deposits were $233.6 billion at March 31, 2012, compared with $230.9 billion at December 31, 2011, the result of increases in interest checking, savings and money market deposits, partially offset by a decrease in noninterest bearing deposits. Interest checking balances increased $3.8 billion (8.2 percent) primarily due to higher Consumer and Small Business Banking, and broker-dealer balances. Savings account balances increased $1.7 billion (6.2 percent), primarily due to continued strong participation in a savings product offered by Consumer and Small Business Banking that includes multiple bank products in a package. Money market balances increased $700 million (1.5 percent) primarily due to higher broker-dealer balances. Noninterest-bearing deposits decreased $3.6 billion (5.2 percent), primarily due to a decrease in corporate trust balances. Interest-bearing time deposits increased $56 million (.1 percent) at March 31, 2012, compared with December 31, 2011.

Borrowings The Company utilizes both short-term and long-term borrowings as part of its asset/liability management and funding strategies. Short-term borrowings, which include federal funds purchased, commercial paper, repurchase agreements, borrowings secured by high-grade assets and other short-term borrowings, were $27.5 billion at March 31, 2012, compared with $30.5 billion at December 31, 2011. The $3.0 billion (9.9 percent) decrease in short-term borrowings was primarily in commercial paper and repurchase agreements and reflected reduced borrowing needs as a result of increases in deposits. Long-term debt was $30.4 billion at March 31, 2012, compared with $32.0 billion at December 31, 2011. The $1.6 billion (4.9 percent) decrease was primarily due to $1.1 billion of medium-term note maturities, $.9 billion of redemptions of junior subordinated debentures and a $.7 billion decrease in Federal Home Loan Bank advances, partially offset by a $1.0 billion issuance of medium-term notes. Refer to the “Liquidity Risk Management” section for discussion of liquidity management of the Company.

CORPORATE RISK PROFILE

Overview Managing risks is an essential part of successfully operating a financial services company. The Company’s most prominent risk exposures are credit, residual value, operational, interest rate, market and liquidity risk. Credit risk is the risk of not collecting the interest and/or the principal balance of a loan, investment or derivative contract when it is due. Residual value risk is the potential reduction in the end-of-term value of leased assets. Operational risk includes risks related to fraud, legal and compliance, processing errors, technology, breaches of internal controls and in data security, and business continuation and disaster recovery. Interest rate risk is the potential reduction of net interest income as a result of changes in interest rates, which can affect the re-pricing of assets and liabilities differently. Market risk arises from fluctuations in interest rates, foreign exchange rates, and security prices that may result in changes in the values of financial instruments, such as trading and available-for-sale securities, certain mortgage loans held for sale, mortgage servicing rights (“MSRs”) and derivatives that are accounted for on a fair value basis. Liquidity risk is the possible inability to fund obligations to depositors, investors or borrowers. Further, corporate strategic decisions, as well as the risks described above, could give rise to reputation risk. Reputation risk is the risk that negative publicity or press, whether true or not, could result in costly litigation or cause a decline in the Company’s stock value, customer base, funding sources or revenue. In addition to the risks identified above, other risk factors exist that may impact the Company. Refer to “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, for a detailed discussion of these factors.

Credit Risk Management The Company’s strategy for credit risk management includes well-defined, centralized credit policies, uniform underwriting criteria, and ongoing risk monitoring and review processes for all commercial and consumer credit exposures. In evaluating its credit risk, the Company considers changes, if any, in underwriting activities, the loan portfolio composition (including product mix and geographic, industry or customer-specific concentrations), trends in loan performance, the level of allowance coverage relative to similar banking institutions and macroeconomic factors, such as changes in unemployment rates, gross domestic product, real estate values and consumer bankruptcy filings.

In addition, credit quality ratings as defined by the Company, are an important part of the Company’s



8		U. S. Bancorp

overall credit risk management and evaluation of its allowance for credit losses. Loans with a pass rating represent those not classified on the Company’s rating scale for problem credits, as minimal risk has been identified. Loans with a special mention or classified rating, including all of the Company’s loans that are 90 days or more past due and still accruing, nonaccrual loans, those considered troubled debt restructurings (“TDRs”), and loans in a junior lien position that are current but are behind a modified or delinquent loan in a first lien position, encompass all loans held by the Company that it considers to have a potential or well-defined weakness that may put full collection of contractual cash flows at risk. The Company’s internal credit quality ratings for consumer loans are primarily based on delinquency and nonperforming status, except for a limited population of larger loans within those portfolios that are individually evaluated. For this limited population, the determination of the internal credit quality rating may also consider collateral value and customer cash flows. The Company obtains recent collateral value estimates for the majority of its residential mortgage and home equity and second mortgage portfolios, which allows the Company to compute estimated loan-to-value (“LTV”) ratios reflecting current market conditions. These individual refreshed LTV ratios are considered in the determination of the appropriate allowance for credit losses. The decline in housing prices over the past several years has deteriorated the collateral support of the residential mortgage, home equity and second mortgage portfolios. However, the underwriting criteria the Company employs consider the relevant income and credit characteristics of the borrower, such that the collateral is not the primary source of repayment. Refer to Note 3 in the Notes to Consolidated Financial Statements for further discussion of the Company’s loan portfolios including internal credit quality ratings. In addition, Refer to “Management’s Discussion and Analysis — Credit Risk Management” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, for a more detailed discussion on credit risk management processes.

The Company manages its credit risk, in part, through diversification of its loan portfolio and limit setting by product type criteria and concentrations. As part of its normal business activities, the Company offers a broad array of lending products. The Company 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 commercial lending segment includes loans and leases made to small business, middle market, large corporate, commercial real estate, financial institution, and public sector customers. Key risk characteristics relevant to commercial lending segment loans include the industry and geography of the borrower’s business, purpose of the loan, repayment source, borrower’s debt capacity and financial flexibility, loan covenants, and nature of pledged collateral, if any. These risk characteristics, among others, are considered in determining estimates about the likelihood of default by the borrowers and the severity of loss in the event of default. The Company considers these risk characteristics in assigning internal risk ratings to, or forecasting losses on, these loans which are the significant factors in determining the allowance for credit losses for loans in the commercial lending segment.

The consumer lending segment represents loans and leases made to consumer customers including residential mortgages, credit card loans, and other retail loans such as revolving consumer lines, auto loans and leases, student loans, and home equity loans and lines. Home equity or second mortgage loans are junior lien closed-end accounts fully disbursed at origination. These loans typically are fixed rate loans, secured by residential real estate, with a 10 or 15 year fixed payment amortization schedule. Home equity lines are revolving accounts giving the borrower the ability to draw and repay balances repeatedly, up to a maximum commitment, and are secured by residential real estate. These include accounts in either a first or junior lien position. Typical terms on home equity lines are variable rates benchmarked to the prime rate, with a 15 year draw period during which a minimum payment is equivalent to the monthly interest, followed by a 10 year amortization period. At March 31, 2012, substantially all of the Company’s home equity lines were in the draw period. Key risk characteristics relevant to consumer lending segment loans primarily relate to the borrowers’ capacity and willingness to repay and include unemployment rates and other economic factors, customer payment history and in some cases, updated LTV information on real estate based loans. These risk characteristics, among others, are reflected in forecasts of delinquency levels, bankruptcies and losses which are the primary factors in determining the allowance for credit losses for the consumer lending segment.

The covered loan segment represents loans acquired in FDIC-assisted transactions that are covered by loss sharing agreements with the FDIC that greatly reduce the risk of future credit losses to the Company. Key risk



U. S. Bancorp		9

characteristics for covered segment loans are consistent with the segment they would otherwise be included in had the loss share coverage not been in place, but consider the indemnification provided by the FDIC.

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 the consumer lending segment are residential mortgages, credit card loans and other retail loans. The covered loan segment consists of only one class.

The Company’s consumer lending segment utilizes several distinct business processes and channels to originate consumer credit, including traditional branch lending, indirect lending, portfolio acquisitions and a consumer finance division. Generally, loans managed by the Company’s consumer finance division exhibit higher credit risk characteristics, but are priced commensurate with the differing risk profile. With respect to residential mortgages originated through these channels, the Company may either retain the loans on its balance sheet or sell its interest in the balances into the secondary market while retaining the servicing rights and customer relationships. For residential mortgages that are retained in the Company’s portfolio and for home equity and second mortgages, credit risk is also diversified by geography and managed by adherence to LTV and borrower credit criteria during the underwriting process.

The Company estimates updated LTV information quarterly, based on a method that combines automated valuation model updates and relevant home price indices. LTV is the ratio of the loan’s outstanding principal balance to the current estimate of property value. For home equity and second mortgages, combined loan-to-value (“CLTV”) is the combination of the first mortgage original principal balance and the second lien outstanding principal balance, relative to the current estimate of property value. Certain loans do not have a LTV or CLTV primarily due to lack of availability of relevant automated valuation model and/or home price indices values, or lack of necessary valuation data on acquired loans.

The following tables provide summary information for the LTVs of residential mortgages and home equity and second mortgages by distribution channel and type at March 31, 2012:


Residential mortgages (Dollars in Millions)	Interest Only		Amortizing		Total		Percent of Total
Consumer Finance
Less than or equal to 80%	$	694	$	4,644	$	5,338		40.4	%
Over 80% through 90%		330		2,678		3,008		22.8
Over 90% through 100%		201		1,456		1,657		12.6
Over 100%		715		2,476		3,191		24.2
No LTV available		–		1		1		–
Total	$	1,940	$	11,255	$	13,195		100.0	%
Other
Less than or equal to 80%	$	850	$	13,477	$	14,327		56.8	%
Over 80% through 90%		265		2,365		2,630		10.4
Over 90% through 100%		245		1,099		1,344		5.3
Over 100%		597		1,283		1,880		7.4
No LTV available		–		126		126		.5
Loans purchased from GNMA mortgage pools (a)		–		4,939		4,939		19.6
Total	$	1,957	$	23,289	$	25,246		100.0	%
Total Company
Less than or equal to 80%	$	1,544	$	18,121	$	19,665		51.2	%
Over 80% through 90%		595		5,043		5,638		14.7
Over 90% through 100%		446		2,555		3,001		7.8
Over 100%		1,312		3,759		5,071		13.2
No LTV available		–		127		127		.3
Loans purchased from GNMA mortgage pools (a)		–		4,939		4,939		12.8
Total	$	3,897	$	34,544	$	38,441		100.0	%

(a)

Represents loans purchased from Government National Mortgage Association (“GNMA”) mortgage pools whose payments are primarily insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs.


Home equity and second mortgages (Dollars in Millions)	Lines		Loans		Total		Percent of Total
Consumer Finance
Less than or equal to 80%	$	661	$	55	$	716		30.7	%
Over 80% through 90%		359		43		402		17.2
Over 90% through 100%		225		57		282		12.1
Over 100%		590		340		930		39.8
No LTV/CLTV available		3		2		5		.2
Total	$	1,838	$	497	$	2,335		100.0	%
Other
Less than or equal to 80%	$	6,337	$	563	$	6,900		44.9	%
Over 80% through 90%		2,223		228		2,451		16.0
Over 90% through 100%		1,801		231		2,032		13.2
Over 100%		3,043		550		3,593		23.4
No LTV/CLTV available		353		33		386		2.5
Total	$	13,757	$	1,605	$	15,362		100.0	%
Total Company
Less than or equal to 80%	$	6,998	$	618	$	7,616		43.0	%
Over 80% through 90%		2,582		271		2,853		16.1
Over 90% through 100%		2,026		288		2,314		13.1
Over 100%		3,633		890		4,523		25.6
No LTV/CLTV available		356		35		391		2.2
Total	$	15,595	$	2,102	$	17,697		100.0	%

Within the consumer finance division, at March 31, 2012, approximately $1.8 billion of residential mortgages were to customers that may be defined as sub-prime borrowers based on credit scores from independent agencies at loan origination, compared with $1.9 billion at December 31, 2011. In addition to residential mortgages, at March 31, 2012, the consumer finance division had $.4 billion of home equity and



10		U. S. Bancorp

second mortgage loans to customers that may be defined as sub-prime borrowers, compared with $.5 billion at December 31, 2011.

The following table provides further information on the LTVs of residential mortgages, specifically for the consumer finance division, at March 31, 2012:


(Dollars in Millions)	Interest Only		Amortizing		Total		Percent of Division
Sub-Prime Borrowers
Less than or equal to 80%	$	2	$	494	$	496		3.8	%
Over 80% through 90%		1		242		243		1.8
Over 90% through 100%		2		253		255		1.9
Over 100%		11		792		803		6.1
Total	$	16	$	1,781	$	1,797		13.6	%
Other Borrowers
Less than or equal to 80%	$	692	$	4,150	$	4,842		36.7	%
Over 80% through 90%		329		2,436		2,765		21.0
Over 90% through 100%		199		1,203		1,402		10.6
Over 100%		704		1,684		2,388		18.1
No LTV available		–		1		1		–
Total	$	1,924	$	9,474	$	11,398		86.4	%
Total Consumer Finance	$	1,940	$	11,255	$	13,195		100.0	%

The following table provides further information on the LTVs of home equity and second mortgages specifically for the consumer finance division at March 31, 2012:


(Dollars in Millions)	Lines		Loans		Total		Percent of Total
Sub-Prime Borrowers
Less than or equal to 80%	$	37	$	28	$	65		2.7	%
Over 80% through 90%		17		20		37		1.6
Over 90% through 100%		17		34		51		2.2
Over 100%		58		217		275		11.8
No LTV/CLTV available		–		2		2		.1
Total	$	129	$	301	$	430		18.4	%
Other Borrowers
Less than or equal to 80%	$	624	$	27	$	651		27.9	%
Over 80% through 90%		342		23		365		15.6
Over 90% through 100%		208		23		231		9.9
Over 100%		532		123		655		28.1
No LTV/CLTV available		3		–		3		.1
Total	$	1,709	$	196	$	1,905		81.6	%
Total Consumer Finance	$	1,838	$	497	$	2,335		100.0	%

The total amount of consumer lending segment residential mortgage, home equity and second mortgage loans to customers that may be defined as sub-prime borrowers represented only .7 percent of total assets at March 31, 2012, unchanged from December 31, 2011. Covered loans included $1.4 billion in loans with negative-amortization payment options at March 31, 2012, compared with $1.5 billion at December 31, 2011. Other than covered loans, the Company does not have any residential mortgages with payment schedules that would cause balances to increase over time.

Home equity and second mortgages were $17.7 billion at March 31, 2012, compared with $18.1 billion

at December 31, 2011, and included $5.1 billion of home equity lines in a first lien position and $12.6 billion of home equity and second mortgage loans and lines in a junior lien position. Loans and lines in a junior lien position at March 31, 2012, included approximately $3.7 billion of loans and lines for which the Company also serviced the related first lien loan, and approximately $8.9 billion where the Company did not service the related first lien loan. The Company was able to determine the status of the related first liens on approximately 65 percent of the total portfolio at March 31, 2012, using information the Company has as the servicer of the first lien or information it received from its primary regulator on loans serviced by other large servicers. The Company uses this information to estimate the first lien status on the remainder of the portfolio. The Company also evaluates other indicators of credit risk for these junior lien loans and lines including delinquency, estimated average CLTV ratios and weighted average credit scores in making its assessment of credit risk, related loss estimates and determining the allowance for credit losses.

The following table provides a summary of delinquency statistics and other credit quality indicators for the Company’s junior lien positions at March 31, 2012:


	Junior Liens Behind
(Dollars in Millions)	Company Owned or Serviced First Lien			Third Party First Lien			Total
Total		$3,679			$8,872			$12,551
Percent 30–89 days past due		1.35	%		1.82	%		1.68	%
Percent 90 days or more past due		.69	%		.82	%		.78	%
Weighted-average CLTV		92	%		90	%		90	%
Weighted-average credit score		760			756			758

See the Analysis and Determination of the Allowance for Credit Losses section for additional information on how the Company determines the allowance for credit losses for loans in a junior lien position.



U. S. Bancorp		11


Table 5		Delinquent Loan Ratios as a Percent of Ending Loan Balances


90 days or more past due excluding nonperforming loans	March 31, 2012			December 31, 2011
Commercial
Commercial		.08	%		.09	%
Lease financing		–			–
Total commercial		.08			.08
Commercial Real Estate
Commercial mortgages		.03			.02
Construction and development		.14			.13
Total commercial real estate		.04			.04
Residential Mortgages (a)		.79			.98
Credit Card		1.33			1.36
Other Retail
Retail leasing		.02			.02
Other		.38			.43
Total other retail (b)		.34			.38
Total loans, excluding covered loans		.38			.43
Covered Loans		5.23			6.15
Total loans		.70	%		.84	%


90 days or more past due including nonperforming loans	March 31, 2012			December 31, 2011
Commercial		.61	%		.63	%
Commercial real estate		2.15			2.55
Residential mortgages (a)		2.58			2.73
Credit card		2.58			2.65
Other retail (b)		.48			.52
Total loans, excluding covered loans		1.40			1.54
Covered loans		10.86			12.42
Total loans		2.04	%		2.30	%

(a)

Delinquent loan ratios exclude $2.7 billion at March 31, 2012, and $2.6 billion at December 31, 2011, of loans purchased from GNMA mortgage pools whose repayments are primarily insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs. Including these loans, the ratio of residential mortgages 90 days or more past due including all nonperforming loans was 9.69 percent at March 31, 2012, and 9.84 percent at December 31, 2011.

(b)

Delinquent loan ratios exclude student loans that are guaranteed by the federal government. Including these loans, the ratio of total other retail loans 90 days or more past due including nonperforming loans was .96 percent at March 31, 2012, and .99 percent at December 31, 2011.

Loan Delinquencies Trends in delinquency ratios are an indicator, among other considerations, of credit risk within the Company’s loan portfolios. The Company measures delinquencies, both including and excluding nonperforming loans, to enable comparability with other companies. Accruing loans 90 days or more past due totaled $1.5 billion ($750 million excluding covered loans) at March 31, 2012, compared with $1.8 billion ($843 million excluding covered loans) at December 31, 2011. These balances exclude loans purchased from Government National Mortgage Association mortgage pools whose repayments are primarily insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs. The $93 million (11.0 percent) decrease, excluding covered loans,

reflected improvement in residential mortgages and credit card loan portfolios during the first three months of 2012. These loans are not included in nonperforming assets and continue to accrue interest because they are adequately secured by collateral, are in the process of collection and are reasonably expected to result in repayment or restoration to current status, or are managed in homogeneous portfolios with specified charge-off timeframes adhering to regulatory guidelines. The ratio of accruing loans 90 days or more past due to total loans was .70 percent (.38 percent excluding covered loans) at March 31, 2012, compared with .84 percent (.43 percent excluding covered loans) at December 31, 2011.



12		U. S. Bancorp

The following table provides summary delinquency information for residential mortgages, credit card and other retail loans included in the consumer lending segment:


	Amount				As a Percent of Ending Loan Balances
(Dollars in Millions)	March 31, 2012		December 31, 2011		March 31, 2012			December 31, 2011
Residential Mortgages (a)
30-89 days	$	365	$	404		.95	%		1.09	%
90 days or more		304		364		.79			.98
Nonperforming		686		650		1.78			1.75
Total	$	1,355	$	1,418		3.52	%		3.82	%
Credit Card
30-89 days	$	208	$	238		1.26	%		1.37	%
90 days or more		221		236		1.33			1.36
Nonperforming		207		224		1.25			1.29
Total	$	636	$	698		3.84	%		4.02	%
Other Retail
Retail Leasing
30-89 days	$	6	$	10		.12	%		.19	%
90 days or more		1		1		.02			.02
Nonperforming		–		–		–			–
Total	$	7	$	11		.14	%		.21	%
Home Equity and Second Mortgages
30-89 days	$	146	$	162		.82	%		.90	%
90 days or more		120		133		.68			.73
Nonperforming		40		40		.23			.22
Total	$	306	$	335		1.73	%		1.85	%
Other (b)
30-89 days	$	127	$	168		.51	%		.68	%
90 days or more		43		50		.17			.20
Nonperforming		25		27		.10			.11
Total	$	195	$	245		.78	%		.99	%

(a)

(b)

Includes revolving credit, installment, automobile and student loans.

The following table provides information on delinquent and nonperforming consumer lending loans as a percent of ending loan balances, by channel:


	Consumer Finance						Other Consumer Lending
	March 31, 2012			December 31, 2011			March 31, 2012			December 31, 2011
Residential Mortgages (a)
30-89 days		1.65	%		1.87	%		.58	%		.67	%
90 days or more		1.33			1.71			.51			.59
Nonperforming		2.64			2.50			1.34			1.35
Total		5.62	%		6.08	%		2.43	%		2.61	%
Credit Card
30-89 days		–	%		–	%		1.26	%		1.37	%
90 days or more		–			–			1.33			1.36
Nonperforming		–			–			1.25			1.29
Total		–	%		–	%		3.84	%		4.02	%
Other Retail
Retail Leasing
30-89 days		–	%		–	%		.12	%		.19	%
90 days or more		–			–			.02			.02
Nonperforming		–			–			–			–
Total		–	%		–	%		.14	%		.21	%
Home Equity and Second Mortgages
30-89 days		1.67	%		2.01	%		.70	%		.73	%
90 days or more		1.24			1.42			.59			.63
Nonperforming		.22			.21			.23			.22
Total		3.13	%		3.64	%		1.52	%		1.58	%
Other (b)
30-89 days		4.20	%		4.92	%		.45	%		.60	%
90 days or more		.74			.90			.16			.19
Nonperforming		–			–			.10			.11
Total		4.94	%		5.82	%		.71	%		.90	%

(a)

Excludes loans purchased from GNMA mortgage pools that are 90 days or more past due that continue to accrue interest.

(b)

Includes revolving credit, installment, automobile and student loans.



U. S. Bancorp		13

Within the consumer finance division at March 31, 2012, approximately $331 million and $46 million of these delinquent residential mortgages, and home equity and other retail loans, respectively, were to customers that may be defined as sub-prime borrowers, compared with $363 million and $63 million, respectively, at December 31, 2011.

The following table provides summary delinquency information for covered loans:


	Amount				As a Percent of Ending Loan Balances
(Dollars in Millions)	March 31, 2012		December 31, 2011		March 31, 2012			December 31, 2011
30-89 days	$	267	$	362		1.89	%		2.45	%
90 days or more		742		910		5.23			6.15
Nonperforming		798		926		5.63			6.26
Total	$	1,807	$	2,198		12.75	%		14.86	%

Restructured Loans 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. In most cases the modification is either a concessionary reduction in interest rate, extension of the maturity date or reduction in the principal balance that would otherwise not be considered. Concessionary modifications are classified as TDRs unless the modification results in only an insignificant delay in the payments to be received. TDRs accrue interest if the borrower complies with the revised terms and conditions and has demonstrated repayment performance at a level commensurate with the modified terms over several payment cycles. Loans classified as TDRs are considered impaired loans for reporting and measurement purposes.

Troubled Debt Restructurings The Company continues to work with customers to modify loans for borrowers who are experiencing financial difficulties, including those acquired through FDIC-assisted acquisitions. Many of the Company’s TDRs are determined on a case-by-case basis in connection with ongoing loan collection processes. The modifications vary within each of the Company’s loan classes. Commercial lending segment TDRs generally include extensions of the maturity date and may be accompanied by an increase or decrease to the interest rate. The Company may also work with the borrower to make other changes to the loan to mitigate losses, such as obtaining additional collateral and/or guarantees to support the loan.

The Company has also implemented certain residential mortgage loan restructuring programs that may result in TDRs. The Company participates in the

U.S. Department of the Treasury Home Affordable Modification Program (“HAMP”). HAMP gives qualifying homeowners an opportunity to permanently modify their loan and achieve more affordable monthly payments, with the U.S. Department of the 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, and 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, extensions 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 distinct restructuring programs. The Company offers a workout program providing customers modification solutions over a specified time period, generally up to 60 months. 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.

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 modifications on covered loans, including the economic impact of interest rate reductions, are generally eligible for reimbursement under the loss sharing agreements.



14		U. S. Bancorp

The following table provides a summary of TDRs by loan class, including the delinquency status for TDRs that continue to accrue interest and TDRs included in nonperforming assets:


			As a Percent of Performing TDRs
At March 31, 2012	Performing		30-89 Days			90 Days or more			Nonperforming			Total
(Dollars in Millions)	TDRs		Past Due			Past Due			TDRs			TDRs
Commercial	$	257		4.7	%		1.8	%	$	123	(a)	$	380
Commercial real estate		630		.6			–			269	(b)		899
Residential mortgages		2,017		6.1			5.1			191			2,208	(d)
Credit card		353		10.2			10.2			207	(c)		560
Other retail		123		8.7			7.4			26	(c)		149	(e)
TDRs, excluding GNMA and covered loans		3,380		5.5			4.5			816			4,196
Loans purchased from GNMA mortgage pools		1,288		10.1			31.6			–			1,288	(f)
Covered loans		387		4.2			5.5			284			671
Total	$	5,055		6.6	%		11.5	%	$	1,100		$	6,155

(a)

Primarily represents loans less than six months from the modification date that have not met the performance period required to return to accrual status (generally six months) and small business credit cards with a modified rate equal to 0 percent.

(b)

Primarily represents loans less than six months from the modification date that have not met the performance period required to return to accrual status (generally six months).

(c)

Primarily represents loans with a modified rate equal to 0 percent.

(d)

Includes $97 million of residential mortgage loans in trial period arrangements at March 31, 2012.

(e)

Includes $2 million of home equity and second mortgage loans in trial period arrangements at March 31, 2012.

(f)

Includes $213 million of Federal Housing Association and Department of Veterans Affairs residential mortgage loans in trial period arrangements at March 31, 2012.

Short-term Modifications The Company makes short-term modifications that it does not consider to be TDRs in limited circumstances to assist borrowers experiencing temporary hardships. Consumer lending programs include payment reductions, deferrals of up to three past due payments, and the ability to return to current status if the borrower makes required payments. The Company may also make short-term modifications to commercial lending loans, with the most common modification being an extension of the maturity date of three months or less. Such extensions generally are used when the maturity date is imminent and the borrower is experiencing some level of financial stress, but the Company believes the borrower will pay all contractual amounts owed. Short-term modifications were not material at March 31, 2012.

Nonperforming Assets The level of nonperforming assets represents another indicator of the potential for future credit losses. Nonperforming assets include nonaccrual loans, restructured loans not performing in accordance with modified terms or those that have not met the performance period required to return to accrual status, other real estate and other nonperforming assets owned by the Company. Interest payments collected from assets on nonaccrual status are typically applied against the principal balance and not recorded as income.

At March 31, 2012, total nonperforming assets were $3.5 billion, compared with $3.8 billion at December 31, 2011. Excluding covered assets, nonperforming assets were $2.4 billion at March 31, 2012, compared with $2.6 billion at December 31, 2011. The $151 million (5.9 percent) decrease in nonperforming assets, excluding covered assets, was primarily driven by reductions in nonperforming construction and development loans, partially offset by higher nonperforming residential mortgages as stress continued in the residential mortgage portfolios due to the continued decline in home values. Nonperforming covered assets at March 31, 2012, were $1.1 billion, compared with $1.2 billion at December 31, 2011. These assets are covered by loss sharing agreements with the FDIC that substantially reduce the risk of credit losses to the Company. The ratio of total nonperforming assets to total loans and other real estate was 1.63 percent (1.22 percent excluding covered assets) at March 31, 2012, compared with 1.79 percent (1.32 percent excluding covered assets) at December 31, 2011. The Company expects total nonperforming assets to trend lower in the second quarter of 2012.



U. S. Bancorp		15


Table 6		Nonperforming Assets (a)


(Dollars in Millions)	March 31, 2012			December 31, 2011
Commercial
Commercial	$	280		$	280
Lease financing		31			32
Total commercial		311			312
Commercial Real Estate
Commercial mortgages		380			354
Construction and development		379			545
Total commercial real estate		759			899
Residential Mortgages (b)		686			650
Credit Card		207			224
Other Retail
Retail leasing		–			–
Other		65			67
Total other retail		65			67
Total nonperforming loans, excluding covered loans		2,028			2,152
Covered Loans		798			926
Total nonperforming loans		2,826			3,078
Other Real Estate (c)(d)		377			404
Covered Other Real Estate (d)		233			274
Other Assets		18			18
Total nonperforming assets	$	3,454		$	3,774
Total nonperforming assets, excluding covered assets	$	2,423		$	2,574
Excluding covered assets:
Accruing loans 90 days or more past due (b)	$	750		$	843
Nonperforming loans to total loans		1.03	%		1.10	%
Nonperforming assets to total loans plus other real estate (c)		1.22	%		1.32	%
Including covered assets:
Accruing loans 90 days or more past due (b)	$	1,492		$	1,753
Nonperforming loans to total loans		1.33	%		1.47	%
Nonperforming assets to total loans plus other real estate (c)		1.63	%		1.79	%

Changes in Nonperforming Assets


(Dollars in Millions)	Commercial and Commercial Real Estate			Credit Card, Other Retail and Residential Mortgages (f)			Covered Assets			Total
Balance December 31, 2011	$	1,475		$	1,099		$	1,200		$	3,774
Additions to nonperforming assets
New nonaccrual loans and foreclosed properties (g)		317			211			77			605
Advances on loans		9			–			–			9
Total additions		326			211			77			614
Reductions in nonperforming assets
Paydowns, payoffs		(207	)		(73	)		(145	)		(425	)
Net sales		(107	)		(23	)		(79	)		(209	)
Return to performing status		(7	)		(23	)		(25	)		(55	)
Charge-offs (e)		(167	)		(81	)		3			(245	)
Total reductions		(488	)		(200	)		(246	)		(934	)
Net additions to (reductions in) nonperforming assets		(162	)		11			(169	)		(320	)
Balance March 31, 2012	$	1,313		$	1,110		$	1,031		$	3,454

(a)

Throughout this document, nonperforming assets and related ratios do not include accruing loans 90 days or more past due.

(b)

Excludes $2.7 billion and $2.6 billion at March 31, 2012, and December 31, 2011, respectively, of loans purchased from GNMA mortgage pools that are 90 days or more past due that continue to accrue interest, as their repayments are primarily insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs.

(c)

Foreclosed GNMA loans of $773 million and $692 million at March 31, 2012, and December 31, 2011, respectively, continue to accrue interest and are recorded as other assets and excluded from nonperforming assets because they are insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs.

(d)

Includes equity investments in entities whose principal assets are other real estate owned.

(e)

Charge-offs exclude actions for certain card products and loan sales that were not classified as nonperforming at the time the charge-off occurred.

(f)

Residential mortgage information excludes changes related to residential mortgages serviced by others.

(g)

Includes $33 million of nonperforming assets acquired in the first quarter 2012 acquisition of BankEast, a subsidiary of BankEast Corporation, from the FDIC.



16		U. S. Bancorp

Other real estate, excluding covered assets, was $377 million at March 31, 2012, compared with $404 million at December 31, 2011, and was related to foreclosed properties that previously secured loan balances.

The following table provides an analysis of other real estate owned, excluding covered assets, as a percent of their related loan balances, including geographical location detail for residential (residential mortgage, home equity and second mortgage) and commercial (commercial and commercial real estate) loan balances:


	Amount				As a Percent of Ending Loan Balances
(Dollars in Millions)	March 31, 2012		December 31, 2011		March 31, 2012		December 31, 2011
Residential
Minnesota	$	21	$	22		.37%		.39%
California		12		16		.16		.22
Illinois		11		10		.34		.31
Missouri		9		7		.34		.26
Ohio		6		6		.25		.25
All other states		81		90		.23		.26
Total residential		140		151		.25		.27
Commercial
Nevada		41		44		3.06		3.13
California		30		26		.20		.18
Connecticut		25		25		4.73		4.78
Ohio		19		18		.40		.38
Arizona		15		16		1.40		1.41
All other states		107		124		.15		.18
Total commercial		237		253		.25		.27
Total	$	377	$	404		.19%		.21%

Analysis of Loan Net Charge-Offs Total loan net charge-offs were $571 million for the first quarter of 2012, compared with $805 million for the first quarter of 2011. The ratio of total loan net charge-offs to average loans outstanding on an annualized basis for the first quarter of 2012 was 1.09 percent, compared with 1.65 percent for the first quarter of 2011. The decrease in total net charge-offs for the first quarter 2012, compared with the first quarter of 2011, was due to improvement in all loan portfolios, as economic conditions continue to slowly improve. Given current economic conditions, the Company expects the level of net charge-offs to be modestly lower in the second quarter of 2012.

Commercial and commercial real estate loan net charge-offs for the first quarter of 2012 were $157 million (.68 percent of average loans outstanding on an annualized basis), compared with $264 million (1.28 percent of average loans outstanding on an annualized basis) for the first quarter of 2011. The decrease reflected the impact of efforts to resolve and reduce exposure to problem assets in the Company’s commercial real estate portfolios and improvement in the other commercial portfolios due to the stabilizing economy.


Table 7		Net Charge-offs as a Percent of Average Loans Outstanding


	Three Months Ended March 31,
	2012			2011
Commercial
Commercial		.61	%		1.19	%
Lease financing		.55			.94
Total commercial		.61			1.16
Commercial Real Estate
Commercial mortgages		.47			.59
Construction and development		2.38			4.61
Total commercial real estate		.79			1.44
Residential Mortgages		1.19			1.65
Credit Card (a)		4.05			6.21
Other Retail
Retail leasing		.08			.09
Home equity and second mortgages		1.66			1.75
Other		.92			1.33
Total other retail		1.11			1.37
Total loans, excluding covered loans		1.17			1.81
Covered Loans		.03			.05
Total loans		1.09	%		1.65	%

(a)

Net charge-offs as a percent of average loans outstanding, excluding portfolio purchases where the acquired loans were recorded at fair value at the purchase date, were 4.21 percent and 6.45 percent for the three months ended March 31, 2012 and 2011, respectively.



U. S. Bancorp		17

Residential mortgage loan net charge-offs for the first quarter of 2012 were $112 million (1.19 percent of average loans outstanding on an annualized basis), compared with $129 million (1.65 percent of average loans outstanding on an annualized basis) for the first quarter of 2011. Credit card loan net charge-offs for the first quarter of 2012 were $169 million (4.05 percent of average loans outstanding on an annualized basis), compared with $247 million (6.21 percent of average loans outstanding on an annualized basis) for the first quarter of 2011. Other retail loan net charge-offs for the first quarter of 2012 were $132 million (1.11 percent of average loans outstanding on an annualized basis), compared with $163 million (1.37 percent of average loans outstanding on an annualized basis) for the first quarter of 2011. The decrease in total residential mortgage, credit card and other retail loan net charge-offs for the first quarter of 2012, compared with the first quarter of 2011, reflected the impact of more stable economic conditions.

The following table provides an analysis of net charge-offs as a percent of average loans outstanding managed by the consumer finance division, compared with other consumer lending loans:


	Three Months Ended March 31,
	Average Loans				Percent of Average Loans
(Dollars in Millions)	2012		2011		2012			2011
Consumer Finance
Residential mortgages	$	13,101	$	11,895		2.39	%		3.20	%
Home equity and second mortgages		2,355		2,507		3.93			5.01
Other		419		606		3.84			4.68
Other Consumer Lending
Residential mortgages	$	24,730	$	19,882		.55	%		.71	%
Home equity and second mortgages		15,578		16,294		1.32			1.24
Other		24,483		24,085		.87			1.25
Total Company
Residential mortgages	$	37,831	$	31,777		1.19	%		1.65	%
Home equity and second mortgages		17,933		18,801		1.66			1.75
Other (a)		24,902		24,691		.92			1.33

(a)

Includes revolving credit, installment, automobile and student loans.

The following table provides further information on net charge-offs as a percent of average loans outstanding for the consumer finance division:


	Three Months Ended March 31,
	Average Loans				Percent of Average Loans
(Dollars in Millions)	2012		2011		2012			2011
Residential mortgages
Sub-prime borrowers	$	1,816	$	2,081		5.76	%		6.43	%
Other borrowers		11,285		9,814		1.85			2.52
Total	$	13,101	$	11,895		2.39	%		3.20	%
Home equity and second mortgages
Sub-prime borrowers	$	437	$	527		8.28	%		10.77	%
Other borrowers		1,918		1,980		2.94			3.48
Total	$	2,355	$	2,507		3.93	%		5.01	%

Analysis and Determination of the 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 an 11-year period of historical losses in considering actual loss experience. This timeframe and the results of the analysis are evaluated quarterly to determine the appropriateness. 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 allowance recorded for purchased impaired and 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 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 and historical losses, adjusted for current trends.

When evaluating the appropriateness of the allowance for credit losses for any loans and lines in a junior lien position, the Company considers the delinquency and modification status of the first lien. At March 31, 2012, the Company serviced the first lien on 29 percent of the home equity loans and lines in a junior lien position and receives information from its primary regulator on the status of the first liens that are serviced by other large servicers in the industry. As a result, at March 31, 2012, the Company had information on the status of the first liens related to approximately 65 percent of the home equity loans and lines in a junior lien position. The Company uses this information to estimate the first lien status on the remainder of the portfolio. Regardless of whether or not the Company services the first lien, an assessment is made of economic conditions, problem loans, recent loss experience and other factors in



18		U. S. Bancorp

determining the allowance for credit losses. At March 31, 2012, the Company knew the related first lien was delinquent or modified on $282 million of the home equity loans and lines in a junior lien position or 1.6 percent of the total home equity portfolio. Based on this information, the Company estimated $467 million or 2.6 percent of the total home equity portfolio at March 31, 2012, represented junior liens where the first lien was delinquent or modified. In addition, the Company had $15 million of junior liens at March 31, 2012, that were not considered seriously delinquent (180 days or more past due) where the Company had information that the first lien was seriously delinquent. These junior liens continue to accrue interest. The Company uses historical loss experience on the loans and lines in a junior lien position where the first lien is serviced by the Company to establish loss estimates for junior liens and lines when they are current. The Company applies this estimate, adjusted for relative performance of junior lien position accounts where the first lien is serviced by a third party, to the remaining portfolio of junior lien loans and lines where the first lien is serviced by others. Historically, the number of junior lien defaults in any period has been a small percentage of the total portfolio (for example, only 1.8 percent for the twelve months ended March 31, 2012), and the long-term average loss rate on the small percentage of loans that default has been approximately 80 percent. In periods of economic stress such as the current environment, the Company has experienced loss severity rates in excess of 90 percent for junior liens that default. In addition, the Company obtains updated credit scores on its home equity portfolio each quarter and in some cases more frequently, and uses this information to qualitatively supplement its loss estimation methods. Credit score distributions for the portfolio are monitored monthly and any changes in the distribution are one of the factors considered in assessing the Company’s loss estimates.

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

In addition, the evaluation of the appropriate allowance for credit losses for purchased non-impaired loans acquired after January 1, 2009, in the various loan segments considers credit discounts recorded as a part of

the initial determination of the fair value of the loans. For these loans, no allowance for credit losses is recorded at the purchase date. Credit discounts representing the principal losses expected over the life of the loans 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, net of any expected reimbursement under any loss sharing agreements with the FDIC, exceeds any remaining credit discounts. The evaluation of the appropriate allowance for credit losses for purchased impaired loans in the various loan segments considers the expected cash flows to be collected from the borrower. These loans are initially recorded at fair value and therefore no allowance for credit losses is recorded at the purchase date. Subsequent to the purchase date, the expected cash flows of the impaired loans are subject to evaluation. Decreases in the present value of expected cash flows are recognized by recording an allowance for credit losses.

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.

Refer to “Management’s Discussion and Analysis — Analysis and Determination of the Allowance for Credit Losses” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, for further discussion on the analysis and determination of the allowance for credit losses.



U. S. Bancorp		19


Table 8		Summary of Allowance for Credit Losses


	Three Months Ended March 31,
(Dollars in Millions)	2012			2011
Balance at beginning of period	$	5,014		$	5,531
Charge-Offs
Commercial
Commercial		97			137
Lease financing		16			24
Total commercial		113			161
Commercial real estate
Commercial mortgages		39			45
Construction and development		44			95
Total commercial real estate		83			140
Residential mortgages		116			133
Credit card		201			268
Other retail
Retail leasing		3			4
Home equity and second mortgages		79			85
Other		85			106
Total other retail		167			195
Covered loans (a)		1			2
Total charge-offs		681			899
Recoveries
Commercial
Commercial		19			12
Lease financing		8			10
Total commercial		27			22
Commercial real estate
Commercial mortgages		4			5
Construction and development		8			10
Total commercial real estate		12			15
Residential mortgages		4			4
Credit card		32			21
Other retail
Retail leasing		2			3
Home equity and second mortgages		5			4
Other		28			25
Total other retail		35			32
Covered loans (a)		–			–
Total recoveries		110			94
Net Charge-Offs
Commercial
Commercial		78			125
Lease financing		8			14
Total commercial		86			139
Commercial real estate
Commercial mortgages		35			40
Construction and development		36			85
Total commercial real estate		71			125
Residential mortgages		112			129
Credit card		169			247
Other retail
Retail leasing		1			1
Home equity and second mortgages		74			81
Other		57			81
Total other retail		132			163
Covered loans (a)		1			2
Total net charge-offs		571			805
Provision for credit losses		481			755
Net change for credit losses to be reimbursed by the FDIC		(5	)		17
Balance at end of period	$	4,919		$	5,498
Components
Allowance for loan losses, excluding losses to be reimbursed by the FDIC	$	4,575		$	5,161
Allowance for credit losses to be reimbursed by the FDIC		70			109
Liability for unfunded credit commitments		274			228
Total allowance for credit losses	$	4,919		$	5,498
Allowance for Credit Losses as a Percentage of
Period-end loans, excluding covered loans		2.44	%		2.97	%
Nonperforming loans, excluding covered loans		238			180
Nonperforming assets, excluding covered assets		199			154
Annualized net charge-offs, excluding covered loans		210			165
Period-end loans		2.32	%		2.78	%
Nonperforming loans		174			133
Nonperforming assets		142			110
Annualized net charge-offs		214			168

Note:

At March 31, 2012 and 2011, $1.8 billion and $2.1 billion, respectively, of the total allowance for credit losses related to incurred losses on credit card and other retail loans.

(a)

Relates to covered loan charge-offs and recoveries not reimbursable by the FDIC.



20		U. S. Bancorp

At March 31, 2012, the allowance for credit losses was $4.9 billion (2.32 percent of total loans and 2.44 percent of loans excluding covered loans), compared with an allowance of $5.0 billion (2.39 percent of total loans and 2.52 percent of loans excluding covered loans) at December 31, 2011. The ratio of the allowance for credit losses to nonperforming loans was 174 percent (238 percent excluding covered loans) at March 31, 2012, compared with 163 percent (228 percent excluding covered loans) at December 31, 2011. The ratio of the allowance for credit losses to annualized loan net charge-offs was 214 percent at March 31, 2012, compared with 176 percent of full year 2011 net charge-offs at December 31, 2011, as net charge-offs continue to decline due to stabilizing economic conditions.

Residual Value Risk Management The Company manages its risk to changes in the residual value of leased assets through disciplined residual valuation setting at the inception of a lease, diversification of its leased assets, regular residual asset valuation reviews and monitoring of residual value gains or losses upon the disposition of assets. As of March 31, 2012, no significant change in the amount of residual values or concentration of the portfolios had occurred since December 31, 2011. Refer to “Management’s Discussion and Analysis — Residual Value Risk Management” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, for further discussion on residual value risk management.

Operational Risk Management The Company manages operational risk through a risk management framework and its internal control processes. Within this framework, the Risk Management Committee of the Company’s Board of Directors provides oversight and assesses the most significant operational risks facing the Company within its business lines. Under the guidance of the Risk Management Committee, enterprise risk management personnel establish policies and interact with business lines to monitor significant operating risks on a regular basis. Business lines have direct and primary responsibility and accountability for identifying, controlling, and monitoring operational risks embedded in their business activities. Refer to “Management’s Discussion and Analysis — Operational Risk Management” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, for further discussion on operational risk management.

Interest Rate Risk Management In the banking industry, changes in interest rates are a significant risk that can impact earnings, market valuations and the safety and soundness of an entity. To minimize the volatility of net

interest income and the market value of assets and liabilities, the Company manages its exposure to changes in interest rates through asset and liability management activities within guidelines established by its Asset Liability Committee (“ALCO”) and approved by the Board of Directors. The ALCO has the responsibility for approving and ensuring compliance with the ALCO management policies, including interest rate risk exposure. The Company uses net interest income simulation analysis and market value of equity modeling for measuring and analyzing consolidated interest rate risk.

Net Interest Income Simulation Analysis Management estimates the impact on net interest income of changes in market interest rates under a number of scenarios, including gradual shifts, immediate and sustained parallel shifts, and flattening or steepening of the yield curve. The table on the following page summarizes the projected impact to net interest income over the next 12 months of various potential interest rate changes. The ALCO policy limits the estimated change in net interest income in a gradual 200 basis point (“bps”) rate change scenario to a 4.0 percent decline of forecasted net interest income over the next 12 months. At March 31, 2012, and December 31, 2011, the Company was within policy. Refer to “Management’s Discussion and Analysis — Net Interest Income Simulation Analysis” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, for further discussion on net interest income simulation analysis.

Market Value of Equity Modeling The Company also manages interest rate sensitivity by utilizing market value of equity modeling, which measures the degree to which the market values of the Company’s assets and liabilities and off-balance sheet instruments will change given a change in interest rates. Management measures the impact of changes in market interest rates under a number of scenarios, including immediate and sustained parallel shifts, and flattening or steepening of the yield curve. The ALCO policy limits the change in market value of equity in a 200 bps parallel rate shock to a 15.0 percent decline. A 200 bps increase would have resulted in a 2.3 percent decrease in the market value of equity at March 31, 2012, compared with a 2.0 percent decrease at December 31, 2011. A 200 bps decrease, where possible given current rates, would have resulted in a 5.7 percent decrease in the market value of equity at March 31, 2012, compared with a 6.4 percent decrease at December 31, 2011. Refer to “Management’s Discussion and Analysis — Market Value of Equity Modeling” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, for further discussion on market value of equity modeling.



U. S. Bancorp		21

Sensitivity of Net Interest Income

March 31, 2012

December 31, 2011

Down 50 bps

Immediate

Up 50 bps

Immediate

Down 200 bps

Gradual

Up 200 bps

Gradual

Down 50 bps

Immediate

Up 50 bps

Immediate

Down 200 bps

Gradual

Up 200 bps

Gradual

Net interest income

1.43

1.95

1.57

1.92

*	Given the current level of interest rates, a downward rate scenario can not be computed.

Use of Derivatives to Manage Interest Rate and Other Risks To reduce the sensitivity of earnings to interest rate, prepayment, credit, price and foreign currency fluctuations (“asset and liability management positions”), the Company enters into derivative transactions. The Company uses derivatives for asset and liability management purposes primarily in the following ways:

•

To convert fixed-rate debt from fixed-rate payments to floating-rate payments;

•

To convert the cash flows associated with floating-rate loans and debt from floating-rate payments to fixed-rate payments;

•

To mitigate changes in value of the Company’s mortgage origination pipeline, funded mortgage loans held for sale and MSRs; and

•

To mitigate remeasurement volatility of foreign currency denominated balances.

To manage these risks, the Company may enter into exchange-traded and over-the-counter derivative contracts, including interest rate swaps, swaptions, futures, forwards and options. In addition, the Company enters into interest rate and foreign exchange derivative contracts to support the business requirements of its customers (“customer-related positions”). The Company minimizes the market and liquidity risks of customer-related positions by entering into similar offsetting positions with broker-dealers. The Company does not utilize derivatives for speculative purposes.

The Company does not designate all of the derivatives that it enters into for risk management purposes as accounting hedges because of the inefficiency of applying the accounting requirements and may instead elect fair value accounting for the related hedged items. In particular, the Company enters into U.S. Treasury futures, options on U.S. Treasury futures, interest rate swaps and forward commitments to buy to-be-announced securities (“TBAs”) to mitigate fluctuations in the value of its MSRs, but does not designate those derivatives as accounting hedges.

Additionally, the Company uses forward commitments to sell TBAs and other commitments to sell residential mortgage loans at specified prices to economically hedge the interest rate risk in its residential

mortgage loan production activities. At March 31, 2012, the Company had $16.0 billion of forward commitments to sell, hedging $5.1 billion of mortgage loans held for sale and $15.8 billion of unfunded mortgage loan commitments. The forward commitments to sell and the unfunded mortgage loan commitments are considered derivatives under the accounting guidance related to accounting for derivative instruments and hedging activities. The Company has elected the fair value option for the mortgage loans held for sale.

Derivatives are subject to credit risk associated with counterparties to the contracts. Credit risk associated with derivatives is measured by the Company based on the probability of counterparty default. The Company manages the credit risk of its derivative positions by diversifying its positions among various counterparties, by entering into master netting agreements, and, where possible, by requiring collateral agreements. The Company may also transfer counterparty credit risk related to interest rate swaps to third parties through the use of risk participation agreements.

For additional information on derivatives and hedging activities, refer to Note 10 in the Notes to Consolidated Financial Statements.

Market Risk Management In addition to interest rate risk, the Company is exposed to other forms of market risk, principally related to trading activities which support customers’ strategies to manage their own foreign currency, interest rate risk and funding activities. The ALCO established the Market Risk Committee (“MRC”), which oversees market risk management. The MRC monitors and reviews the Company’s trading positions and establishes policies for market risk management, including exposure limits for each portfolio. The Company also manages market risk of non-trading business activities, including its MSRs and certain mortgage loans held for sale. The Company uses a Value at Risk (“VaR”) approach to measure general market risk. Theoretically, VaR represents the statistical risk of loss the Company has to adverse market movements over a one-day time horizon. The Company uses the Historical Simulation method to calculate VaR



22		U. S. Bancorp

for its trading businesses measured at the ninety-ninth percentile using a one-year look-back period for distributions derived from past market data. The market factors used in the calculations include those pertinent to market risks inherent in the underlying trading portfolios, principally those that affect its investment grade bond trading business, foreign currency transaction business, client derivatives business, loan trading business and municipal securities business. On average, the Company expects the one-day VaR to be exceeded two to three times per year in each business. The Company monitors the effectiveness of its risk programs by back-testing the performance of its VaR models, regularly updating the historical data used by the VaR models and stress testing. If the Company were to experience market losses in excess of the estimated VaR more often than expected, the VaR models and associated assumptions would be analyzed and adjusted. The Company stress tests its market risk measurements to provide management with perspectives on market events that may not be captured by its VaR models, including worst case historical market movement combinations that have not necessarily occurred on the same date.

The average, high and low VaR amounts were $1 million, $2 million and $1 million, respectively, for both the first quarter of 2012 and 2011.

Liquidity Risk Management The Company’s liquidity risk management process is designed to identify, measure, and manage the Company’s funding and liquidity risk to meet its daily funding needs and to address expected and unexpected changes in its funding requirements. The Company engages in various activities to manage its liquidity risk. These include diversifying its funding sources, stress testing, and holding readily-marketable assets which can be used as a source of liquidity if needed. In addition, the Company’s profitable operations, sound credit quality and strong capital position have enabled it to develop a large and reliable base of core deposit funding within its market areas and in domestic and global capital markets.

The Risk Management Committee of the Company’s Board of Directors oversees the Company’s liquidity risk management process and approves the Company’s liquidity policy and reviews its contingency funding plan. The ALCO reviews and approves the Company’s liquidity policies and guidelines, and regularly assesses the Company’s ability to meet funding requirements arising from adverse company-specific or market events.

The Company regularly projects its funding needs under various stress scenarios and maintains contingency plans consistent with the Company’s access to diversified sources of contingent funding. The Company maintains a substantial level of total available liquidity in the form of on-balance sheet and off-balance sheet funding sources. These include cash at the Federal Reserve, unencumbered liquid assets, and capacity to borrow at the Federal Home Loan Bank (“FHLB”) and the Federal Reserve Discount Window. At March 31, 2012, unencumbered available-for-sale and held-to-maturity investment securities totaled $53.7 billion, compared with $48.7 billion at December 31, 2011. Refer to Table 4 and “Balance Sheet Analysis” for further information on investment securities maturities and trends. Asset liquidity is further enhanced by the Company’s ability to pledge loans to access secured borrowing facilities through the FHLB and Federal Reserve Bank. At March 31, 2012, the Company could have borrowed an additional $57.4 billion at the FHLB and Federal Reserve Bank based on collateral available for additional borrowings.

The Company’s diversified deposit base provides a sizeable source of relatively stable and low-cost funding, while reducing the Company’s reliance on the wholesale markets. Total deposits were $233.6 billion at March 31, 2012, compared with $230.9 billion at December 31, 2011, reflecting organic growth in core deposits and acquired balances. Refer to “Balance Sheet Analysis” for further information on the Company’s deposits.

Additional funding is provided by long-term debt and short-term borrowings. Long-term debt was $30.4 billion at March 31, 2012, and is an important funding source because of its multi-year lending structure. Short-term borrowings were $27.5 billion at March 31, 2012, and supplement the Company’s other funding sources. Refer to “Balance Sheet Analysis” for further information on the Company’s long-term debt and short-term borrowings.

In addition to assessing liquidity risk on a consolidated basis, the Company monitors the parent company liquidity and maintains sufficient funding to meet expected parent company obligations, without access to the wholesale funding markets or dividends from subsidiaries, for 12 months when forecasted payments of common stock dividends are included and 24 months assuming dividends were reduced to zero. The parent company currently has available funds considerably greater than the amounts required to satisfy these conditions.



U. S. Bancorp		23

Refer to “Management’s Discussion and Analysis — Liquidity Risk Management” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, for further discussion on liquidity risk management.

At March 31, 2012, parent company long-term debt outstanding was $13.6 billion, compared with $14.6 billion at December 31, 2011. The $1.0 billion decrease was primarily due to $1.1 billion of medium-term note maturities and $.9 billion of redemptions of junior subordinated debentures, partially offset by a $1.0 billion issuance of medium-term notes. As of March 31, 2012, there was $1.6 billion of parent company debt scheduled to mature in the remainder of 2012.

Federal banking laws regulate the amount of dividends that may be paid by banking subsidiaries without prior approval. The amount of dividends available to the parent company from its banking subsidiaries after meeting the regulatory capital requirements for well-capitalized banks was approximately $7.0 billion at March 31, 2012.

European Exposures Certain European countries have recently experienced severe credit deterioration. The Company does not hold sovereign debt of any European country, however the Company may have indirect exposure to sovereign debt through its investments in and transactions with European banks. At March 31, 2012, the Company had investments in perpetual preferred stock issued by European banks with an amortized cost totaling $167 million and unrealized losses totaling $16 million, compared with an amortized cost totaling $169 million and unrealized losses totaling $48 million, at December 31, 2011. The Company also transacts with various European banks as counterparties to interest rate swaps and foreign currency transactions for its hedging and customer-related activities, however none of these banks are domiciled in the countries experiencing the most significant credit deterioration. These derivative transactions are subject to master netting and collateral support agreements which significantly limit the Company’s exposure to loss as they generally require daily posting of collateral. At March 31, 2012, the Company was in a net payable position to each of these European banks.

The Company has not bought or sold credit protection on the debt of any European country or any company domiciled in Europe, nor does it provide retail lending services in Europe. While the Company does not offer commercial lending services in Europe, it does provide financing to domestic multinational corporations that generate revenue from customers in European countries and provides a limited number of corporate cards to their European subsidiaries. While an economic downturn in Europe could have a negative impact on these customers’ revenues, it is unlikely that any effect on the overall credit

worthiness of these multinational corporations would be material to the Company. The Company also provides merchant processing services directly to merchants in Europe and through banking affiliations in Europe. Operating cash for this business is deposited on a short-term basis with certain European banks. Exposure is mitigated by the Company placing deposits at multiple banks and managing the amounts on deposit at any bank based on institution specific deposit limits. At March 31, 2012, the Company had an aggregate amount on deposit with European banks of approximately $800 million.

The money market funds managed by an affiliate of the Company do not have any investments in European sovereign debt. Other than investments in two banks domiciled in the Netherlands, those funds do not have any unsecured investments in banks domiciled in the Eurozone.

Off-Balance Sheet Arrangements Off-balance sheet arrangements include any contractual arrangements to which an unconsolidated entity is a party, under which the Company has an obligation to provide credit or liquidity enhancements or market risk support. In the ordinary course of business, the Company enters into an array of commitments to extend credit, letters of credit and various forms of guarantees that may be considered off-balance sheet arrangements. Refer to Note 12 of the Notes to Consolidated Financial Statements for further information on these arrangements. The Company has not utilized private label asset securitizations as a source of funding. Off-balance sheet arrangements also include any obligation related to a variable interest held in an unconsolidated entity that provides financing, liquidity, credit enhancement or market risk support. Refer to Note 4 of the Notes to Consolidated Financial Statements for further information related to the Company’s interests in variable interest entities.

Capital Management The Company is committed to managing capital to maintain strong protection for depositors and creditors and for maximum shareholder benefit. The Company also manages its capital to exceed regulatory capital requirements for well-capitalized bank holding companies. Table 9 provides a summary of regulatory capital ratios as of March 31, 2012, and December 31, 2011. All regulatory ratios exceeded regulatory “well-capitalized” requirements. Total U.S. Bancorp shareholders’ equity was $35.9 billion at March 31, 2012, compared with $34.0 billion at December 31, 2011. The increase was primarily the result of corporate earnings, the issuance of $1.1 billion of non-cumulative perpetual preferred stock to extinguish certain junior subordinated debentures and changes in unrealized gains and losses on available-for-sale investment securities included in other



24		U. S. Bancorp


Table 9		Regulatory Capital Ratios


(Dollars in Millions)	March 31, 2012			December 31, 2011
Tier 1 capital	$	29,976		$	29,173
As a percent of risk-weighted assets		10.9	%		10.8	%
As a percent of adjusted quarterly average assets (leverage ratio)		9.2	%		9.1	%
Total risk-based capital	$	36,431		$	36,067
As a percent of risk-weighted assets		13.3	%		13.3	%

comprehensive income, partially offset by dividends and common share repurchases. In addition, the Company issued an additional $1.1 billion of non-cumulative perpetual preferred stock in April 2012 to extinguish certain other junior subordinated debentures. Refer to “Management’s Discussion and Analysis — Capital Management” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, for further discussion on capital management.

The Company believes certain capital ratios in addition to regulatory capital ratios are useful in evaluating its capital adequacy. The Company’s Tier 1 common equity (using Basel I definition) and tangible common equity, as a percent of risk-weighted assets, were 8.7 percent and 8.3 percent, respectively, at March 31, 2012, compared with 8.6 percent and 8.1 percent, respectively, at December 31, 2011. The Company’s tangible common equity divided by tangible assets was 6.9 percent at March 31, 2012, compared with 6.6 percent at December 31, 2011. Additionally, the Company’s Tier 1 common equity as a percent of risk-weighted assets, under the anticipated Basel III definition as if fully implemented, was 8.4 percent at March 31, 2012, compared with 8.2 percent at December 31, 2011. Refer to “Non-GAAP Financial Measures” for further information regarding the calculation of these ratios.

On March 13, 2012, the Company increased its dividend rate per common share by 56 percent, from $.125 per quarter to $.195 per quarter.

On March 18, 2011, the Company announced its Board of Directors had approved an authorization to repurchase 50 million shares of common stock through December 31, 2011. On December 13, 2011, the Company announced that its Board of Directors had approved an extension of the date through which shares may be repurchased under this authorization to March 31, 2012. On March 13, 2012, the Company announced its Board of Directors had approved an authorization to repurchase 100 million shares of common stock through March 31, 2013. This new authorization replaced the March 18, 2011

authorization. All shares repurchased during the first quarter of 2012 were repurchased under the March 18, 2011 and March 13, 2012 authorizations.

The following table provides a detailed analysis of all shares repurchased by the Company during the first quarter of 2012:


Time Period	Total Number of Shares Purchased as Part of the Programs		Average Price Paid per Share		Maximum Number of Shares that May Yet Be Purchased Under the Programs
January (a)		27,806	$	28.62		28,594,833
February (a)		11,153,849		29.15		17,440,984
March (b)		5,098,396		30.62		96,876,654

Total		16,280,051	$	29.61		96,876,654

(a)

All shares purchased during January and February of 2012 were purchased under the publicly announced March 18, 2011 authorization.

(b)

During March of 2012, 1,975,050 shares were purchased under the publicly announced March 18, 2011 authorization and 3,123,346 shares were purchased under the publicly announced March 13, 2012 authorization.

LINE OF BUSINESS FINANCIAL REVIEW

The Company’s major lines of business are Wholesale Banking and Commercial Real Estate, Consumer and Small Business Banking, Wealth Management and Securities Services, Payment Services, and Treasury and Corporate Support. These operating segments are components of the Company about which financial information is prepared and is evaluated regularly by management in deciding how to allocate resources and assess performance.

Basis for Financial Presentation Business line results are derived from the Company’s business unit profitability reporting systems by specifically attributing managed balance sheet assets, deposits and other liabilities and their related income or expense. Refer to “Management’s Discussion and Analysis — Line of Business Financial Review” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, for further discussion on the business lines’ basis for financial presentation.



U. S. Bancorp		25


Table 10		Line of Business Financial Performance


	Wholesale Banking and Commercial Real Estate							Consumer and Small Business Banking
Three Months Ended March 31 (Dollars in Millions)	2012		2011		Percent Change			2012		2011		Percent Change
Condensed Income Statement
Net interest income (taxable-equivalent basis)	$	528	$	514		2.7	%	$	1,179	$	1,134		4.0	%
Noninterest income		309		293		5.5			867		606		43.1
Securities gains (losses), net		—		—		—			—		—		—

Total net revenue		837		807		3.7			2,046		1,740		17.6
Noninterest expense		317		299		6.0			1,167		1,097		6.4
Other intangibles		4		4		—			13		19		(31.6	)

Total noninterest expense		321		303		5.9			1,180		1,116		5.7

Income before provision and income taxes		516		504		2.4			866		624		38.8
Provision for credit losses		3		179		(98.3	)		253		401		(36.9	)

Income before income taxes		513		325		57.8			613		223		*
Income taxes and taxable-equivalent adjustment		187		118		58.5			223		81		*

Net income		326		207		57.5			390		142		*
Net (income) loss attributable to noncontrolling interests		—		1		*			—		—		—

Net income attributable to U.S. Bancorp	$	326	$	208		56.7		$	390	$	142		*


Average Balance Sheet
Commercial	$	42,372	$	35,253		20.2	%	$	7,890	$	7,117		10.9	%
Commercial real estate		19,344		19,190		.8			15,904		15,153		5.0
Residential mortgages		64		73		(12.3	)		37,375		31,319		19.3
Credit card		—		—		—			—		—		—
Other retail		4		6		(33.3	)		45,551		45,555		—

Total loans, excluding covered loans		61,784		54,522		13.3			106,720		99,144		7.6
Covered loans		1,202		2,001		(39.9	)		7,895		8,741		(9.7	)

Total loans		62,986		56,523		11.4			114,615		107,885		6.2
Goodwill		1,604		1,604		—			3,515		3,536		(.6	)
Other intangible assets		42		59		(28.8	)		1,765		2,227		(20.7	)
Assets		68,551		62,008		10.6			130,681		123,191		6.1
Noninterest-bearing deposits		30,334		20,019		51.5			18,713		17,170		9.0
Interest checking		13,114		13,993		(6.3	)		28,938		25,383		14.0
Savings products		8,735		9,823		(11.1	)		42,466		39,591		7.3
Time deposits		13,254		14,811		(10.5	)		24,408		24,282		.5

Total deposits		65,437		58,646		11.6			114,525		106,426		7.6
Total U.S. Bancorp shareholders’ equity		6,275		5,509		13.9			10,768		9,262		16.3

*	Not meaningful.

Designations, assignments and allocations change from time to time as management systems are enhanced, methods of evaluating performance or product lines change or business segments are realigned to better respond to the Company’s diverse customer base. During 2012, certain organization and methodology changes were made and, accordingly, 2011 results were restated and presented on a comparable basis.

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, foreign exchange, international trade services and other financial services to middle market, large corporate, commercial real estate, financial institution and public sector clients. Wholesale Banking and Commercial Real Estate contributed $326 million of the Company’s net income in the first quarter of 2012, or an increase of $118 million

(56.7 percent), compared with the first quarter of 2011. The increase was primarily driven by lower provision for credit losses and higher net revenue, partially offset by higher noninterest expense.

Total net revenue increased $30 million (3.7 percent) in the first quarter of 2012, compared with the first quarter of 2011. Net interest income, on a taxable-equivalent basis, increased $14 million (2.7 percent) in the first quarter of 2012, compared with the first quarter of 2011. The increase was primarily due to higher average loan and deposit balances, partially offset by the impact of lower rates on the margin benefit from deposits. Noninterest income increased $16 million (5.5 percent) in the first quarter of 2012, compared with the first quarter of 2011, primarily due to higher commercial products revenue, principally loan syndication and bond underwriting fees, and an increase in other income due mainly to equity investment and investment grade bond trading revenue.



26		U. S. Bancorp


Wealth Management and Securities Services								Payment Services									Treasury and Corporate Support									Consolidated Company
2012			2011		Percent Change			2012			2011			Percent Change			2012			2011			Percent Change			2012		2011			Percent Change

$	92		$	87		5.7	%	$	396		$	332			19.3	%	$	495		$	440			12.5	%	$	2,690	$	2,507			7.3	%
	267			269		(.7	)		733			761			(3.7	)		63			88			(28.4	)		2,239		2,017			11.0
	—			—		—			—			—			—			—			(5	)		*			—		(5	)		*

	359			356		.8			1,129			1,093			3.3			558			523			6.7			4,929		4,519			9.1
	280			262		6.9			454			417			8.9			271			164			65.2			2,489		2,239			11.2
	10			9		11.1			44			43			2.3			—			—			—			71		75			(5.3	)

	290			271		7.0			498			460			8.3			271			164			65.2			2,560		2,314			10.6

	69			85		(18.8	)		631			633			(.3	)		287			359			(20.1	)		2,369		2,205			7.4
	(1	)		3		*			216			163			32.5			10			9			11.1			481		755			(36.3	)

	70			82		(14.6	)		415			470			(11.7	)		277			350			(20.9	)		1,888		1,450			30.2
	25			30		(16.7	)		151			171			(11.7	)		(3	)		21			*			583		421			38.5

	45			52		(13.5	)		264			299			(11.7	)		280			329			(14.9	)		1,305		1,029			26.8
	—			—		—			(10	)		(9	)		(11.1	)		43			25			72.0			33		17			94.1