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 U.S. Bancorp Reports Fourth Quarter and Full Year 2017 Earnings
   Wednesday, January 17, 2018 6:45:01 AM ET

--Full year return on average assets of 1.39 percent and average common equity of 13.8 percent

--Returned 77 percent of full year earnings to shareholders

U.S. Bancorp (USB ) today reported net income of $1,682 million for the fourth quarter of 2017, or $0.97 per diluted common share, compared with $1,478 million, or $0.82 per diluted common share, in the fourth quarter of 2016. The fourth quarter of 2017 included notable items related to the impacts of tax reform, a special employee bonus, a charitable contribution to the U.S. Bank Foundation, and a regulatory and legal accrual that, combined, increased diluted earnings per common share by $0.09.



Highlights for the full year of 2017 included:

-- Record diluted earnings per common share of $3.51, record net revenue of $22,057 million, and record net income of $6,218 million. Earnings to common shareholders were $3.42 per diluted common share for 2017, excluding notable items.

-- Industry-leading return on average assets of 1.39 percent and return on average common equity of 13.8 percent (1.35 percent and 13.4 percent, respectively, excluding notable items)

-- Returned 77 percent of 2017 earnings to shareholders through dividends and share buybacks

Highlights for the fourth quarter of 2017 included:

-- Record net revenue, both as reported and excluding notable items

-- Diluted earnings per common share of $0.88 in the fourth quarter of 2017, excluding notable items

-- Return on average assets of 1.46 percent and return on average common equity of 14.7 percent (1.33 percent and 13.4 percent, respectively, excluding notable items)

-- Returned 72 percent of fourth quarter earnings to shareholders through dividends and share buybacks

-- Net interest income grew 6.4 percent year-over-year and 0.3 percent on a linked quarter basis

-- Net interest margin of 3.08 percent for the fourth quarter of 2017 was 10 basis points higher than the fourth quarter of 2016 and 2 basis points lower than the third quarter of 2017

-- Positive operating leverage in the fourth quarter of 2017, on a year-over-year basis, excluding notable items

-- Nonperforming assets decreased 25.1 percent on a year-over-year basis and 4.1 percent on a linked quarter basis

-- Average total loans grew 2.6 percent over the fourth quarter of 2016 and 0.8 percent on a linked quarter basis -- Average total commercial loans grew 4.0 percent over the fourth quarter of 2016 and 1.0 percent on a linked quarter basis

-- Average total other retail loans grew 6.0 percent over the fourth quarter of 2016 and 1.9 percent on a linked quarter basis

-- Strong capital position. At December 31, 2017, the estimated common equity tier 1 capital to risk-weighted assets ratio was 9.1 percent using the Basel III fully implemented standardized approach and was 11.6 percent using the Basel III fully implemented advanced approaches method.

                                                     
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EARNINGS SUMMARY                                                                    Table 1
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($ in millions, except per-share data)                                                                                       Percent                Percent                                                
                                                                                                                                                                                                          Change                                    Change
                                                                                4Q                                        3Q                                        4Q                                   4Q17 vs                                   4Q17 vs                                 Full Year                                 Full Year                                   Percent
                                                                              2017                   2017                   2016                   3Q17                   4Q16                   2017                   2016                 Change
                                                              -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                     
Net income attributable to U.S. Bancorp                                     $1,682                                    $1,563                                    $1,478                                       7.6                                      13.8                                    $6,218                                    $5,888                                       5.6
Diluted earnings per common share                                             $.97                                      $.88                                      $.82                                      10.2                                      18.3                                     $3.51                                     $3.24                                       8.3
                                                                                                                                                                                                                                                                                                                                                                     
Return on average assets (%)                                                  1.46                                      1.38                                      1.32                                                                                                                          1.39                                      1.36
Return on average common equity (%)                                           14.7                                      13.6                                      13.1                                                                                                                          13.8                                      13.4
Net interest margin (%)                                                       3.08                                      3.10                                      2.98                                                                                                                          3.06                                      3.01
Efficiency ratio (%) (a)                                                      70.0                                      54.3                                      55.3                                                                                                                          58.8                                      54.9
Tangible efficiency ratio (%) (a)                                             69.2                                      53.5                                      54.5                                                                                                                          58.0                                      54.0
                                                                                                                                                                                                                                                                                                                                                                     
Dividends declared per common share                                           $.30                                      $.30                                      $.28                                        --                                       7.1                                     $1.16                                     $1.07                                       8.4
Book value per common share (period end)                                    $26.34                                    $25.98                                    $24.63                                       1.4                                       6.9
                                                                                                                                                                                                                                                                                                                                                                     
(a) See Non-GAAP Financial Measures reconciliation on page 23
 
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Net income attributable to U.S. Bancorp was $1,682 million for the fourth quarter of 2017, 13.8 percent higher than the $1,478 million for the fourth quarter of 2016, and 7.6 percent higher than the $1,563 million for the third quarter of 2017. Diluted earnings per common share of $0.97 in the fourth quarter of 2017 were $0.15 higher than the fourth quarter of 2016 and $0.09 higher than the third quarter of 2017. The fourth quarter of 2017 included $0.09 of notable items, including a benefit of $910 million related to the estimated impact of tax reform on the Company’s tax related assets and liabilities, partially offset by a $608 million accrual for regulatory and legal matters, and $152 million, net of tax, for a charitable contribution to the U.S. Bank Foundation and a special bonus to certain eligible employees. The regulatory and legal accrual is related to previously disclosed matters related to Bank Secrecy Act/anti-money laundering compliance program adequacy and investigations by the United States Attorney’s Office in Manhattan into that program and U.S. Bank National Association’s legacy banking relationship with payday lending businesses associated with a former customer. The increase in net income year-over-year was primarily due to total net revenue growth, including an increase in net interest income of 6.4 percent, mainly a result of the impact of rising interest rates and loan growth. Noninterest income increased 0.4 percent principally due to higher payment services revenue, trust and investment management fees and deposit service charges, mostly offset by a decrease in mortgage banking revenue and lower equity investment income. Excluding the notable items, the increase in total net revenue was partially offset by higher noninterest expense, primarily due to increased compensation expense related to hiring to support business growth and compliance programs, merit increases, variable compensation related to revenue growth and higher employee benefits expense, partially offset by lower professional services expense driven by lower consulting costs for risk and compliance programs. Excluding notable items, net income decreased slightly on a linked quarter basis principally due to a seasonal increase in noninterest expense of 2.5 percent driven by seasonally higher costs related to investments in tax-advantaged projects in addition to higher employee benefits and professional services expense. These increases were partially offset by an increase in total net revenue of 0.5 percent, reflecting an increase in net interest income of 0.3 percent primarily driven by loan growth, and an increase in noninterest income of 0.8 percent related to higher trust and investment management fees and payment services revenue.

U.S. Bancorp President and Chief Executive Officer Andy Cecere said, "Our fourth quarter results were a strong end to what was a record year for U.S. Bancorp on several measures: we delivered record net revenue, net income, and diluted earnings per common share. Excluding notable items, our fourth quarter performance metrics were highlighted by a return on average common equity of 13.4 percent and a return on average assets of 1.33 percent. In the fourth quarter we returned 72 percent of earnings to shareholders through dividends and share buybacks.

"The economic backdrop is favorable, and tax reform legislation enacted late last year has provided us an opportunity to accelerate investment in our businesses, our people, and our communities, while at the same time enhancing shareholder value through the potential for increased payouts. We previously announced that we will raise our minimum wage in the United States to $15 per hour, provide one-time bonuses to certain eligible employees, and contribute an additional $150 million to the U.S. Bank Foundation, which will help revitalize our communities for years to come. With the ongoing benefit provided by a lower corporate tax rate we plan to increase our investments in technology and innovation, with a focus on enhancing the customer experience and improving operational efficiency that drives long-term growth and creates value for shareholders.

"The successes of 2017 were a direct result of the outstanding dedication and effort of our employees. I want to thank our amazing team members who work tirelessly to be our customers’ most trusted partner. We are operating from a position of strength as we enter 2018 and we will continue to work every day to create value for our investors, our customers, our communities, and our employees."

                                                                                                                                                                                    
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INCOME STATEMENT HIGHLIGHTS                                                                                                                                                                                                             Table 2
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($ in millions, except per-share data)                                                                                                                                                                                                                Percent                                     Percent                                                                                          
                                                                                                                                                                                                                                                                                                                                   Change                                                         Change
                                                                                                                                          4Q                                                             3Q                                                             4Q                                                        4Q17 vs                                                        4Q17 vs                                                      Full Year                                                      Full Year                                                        Percent
                                                                                                                                        2017                                        2017                                        2016                                        3Q17                                        4Q16                                        2017                                        2016                                      Change
                                                                                                   -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- ------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
Net interest income                                                                                              $3,144                                                         $3,135                                                         $2,955                                                             .3                                                            6.4                                                        $12,241                                                        $11,528                                                            6.2
Taxable-equivalent adjustment                                                                                        53                       51                       49                                         3.9                                                            8.2                                                            205                      203                                         1.0
                                                                                                   -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                                                                    -------------------- -------------------- -------------------- -------------------- --------------------
Net interest income (taxable-equivalent basis)                                                                    3,197                    3,186                    3,004                                          .3                                                            6.4                                                         12,446                   11,731                                         6.1
                                                                                                   -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                                                                    -------------------- -------------------- -------------------- -------------------- --------------------
Noninterest income                                                                                                2,441                    2,422                    2,431                                          .8                                                             .4                                                          9,611                    9,577                                          .4
                                                                                                   -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                                                                    -------------------- -------------------- -------------------- -------------------- --------------------
  Total net revenue                                                                                               5,638                                                          5,608                                                          5,435                                                             .5                                                            3.7                                                         22,057                                                         21,308                                                            3.5
Noninterest expense                                                                                               3,939                    3,039                    3,004                                        29.6                                                           31.1                                                         12,945                   11,676                                        10.9
                                                                                                   -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                                                                    -------------------- -------------------- -------------------- -------------------- --------------------
Income before provision and income taxes                                                                          1,699                                                          2,569                                                          2,431                                                          (33.9 )                                                        (30.1 )                                                        9,112                                                          9,632                                                           (5.4 )
Provision for credit losses                                                                                         335                      360                      342                                        (6.9 )                                                         (2.0 )                                                        1,390                    1,324                                         5.0
                                                                                                   -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                                                                    -------------------- -------------------- -------------------- -------------------- --------------------
Income before taxes                                                                                               1,364                    2,209                    2,089                                       (38.3 )                                                        (34.7 )                                                        7,722                    8,308                                        (7.1 )
                                                                                                   -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                                                                    -------------------- -------------------- -------------------- -------------------- --------------------
Income taxes and taxable-equivalent adjustment                                                  (322 )                                       640                      598                                          nm                                                             nm                                                          1,469                    2,364                                       (37.9 )
                                                                                                   -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                                                                    -------------------- -------------------- -------------------- -------------------- --------------------
Net income                                                                                                        1,686                                                          1,569                                                          1,491                                                            7.5                                                           13.1                                                          6,253                                                          5,944                                                            5.2
Net (income) loss attributable to noncontrolling interests                                        (4 )                                        (6 )                                       (13 )                                                         33.3                                                           69.2                                                            (35 )                                       (56 )                                                         37.5
                                                                                                   -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                                                                    -------------------- -------------------- -------------------- -------------------- --------------------
Net income attributable to U.S. Bancorp                                                                          $1,682                   $1,563                   $1,478                                         7.6                                                           13.8                                                         $6,218                   $5,888                                         5.6
                                                                                                   -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                                                                    -------------------- -------------------- -------------------- -------------------- --------------------
Net income applicable to U.S. Bancorp common shareholders                                     $1,611                   $1,485                   $1,391                                         8.5                                                           15.8                                                         $5,913                   $5,589                                         5.8
                                                                                                   -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                                                                    -------------------- -------------------- -------------------- -------------------- --------------------
Diluted earnings per common share                                                                                  $.97                     $.88                     $.82                                        10.2                                                           18.3                                                          $3.51                    $3.24                                         8.3
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NET INTEREST INCOME                                                                                                                                                            Table 3
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(Taxable-equivalent basis; $ in millions)                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                         Change                                               Change
                                                                                              4Q                                                   3Q                                                   4Q                                              4Q17 vs                                              4Q17 vs                                            Full Year                                            Full Year
                                                                                            2017                              2017                              2016                              3Q17                              4Q16                              2017                              2016                            Change
                                                                 ---------------------------------------------------- ---------------------------------------------------- ---------------------------------------------------- ---------------------------------------------------- ---------------------------------------------------- ---------------------------------------------------- ---------------------------------------------------- --------------------------------
Components of net interest income
  Income on earning assets                                           $3,795                                               $3,768                                               $3,424                                                  $27                                                 $371                                              $14,598                                              $13,375                                               $1,223
  Expense on interest-bearing liabilities                               598            582            420             16            178          2,152          1,644            508  
                                                                 ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- --------------------
Net interest income                                                  $3,197         $3,186         $3,004            $11           $193        $12,446        $11,731           $715  
                                                                 ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                     
Average yields and rates paid
  Earning assets yield                                                 3.65 %                                               3.67 %                                               3.40 %                                               (.02 )%                                               .25 %                                               3.59 %                                               3.43 %                                                .16 %
  Rate paid on interest-bearing liabilities                             .77            .76            .57            .01            .20            .71            .57            .14  
                                                                 ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- --------------------
Gross interest margin                                                  2.88 %                            2.91 %                            2.83 %                            (.03 )%                            .05 %                            2.88 %                            2.86 %                             .02 %
                                                                 ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- --------------------
Net interest margin                                                    3.08 %                            3.10 %                            2.98 %                            (.02 )%                            .10 %                            3.06 %                            3.01 %                             .05 %
                                                                 ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                     
Average balances
  Investment securities (a)                                        $113,287                                             $111,832                                             $110,386                                               $1,455                                               $2,901                                             $111,820                                             $107,922                                               $3,898
  Loans                                                             279,751                                              277,626                                              272,671                                                2,125                                                7,080                                              276,537                                              267,811                                                8,726
  Earning assets                                                    413,510                                              408,825                                              401,971                                                4,685                                               11,539                                              406,421                                              389,877                                               16,544
  Interest-bearing liabilities                                      308,976                                              304,236                                              295,288                                                4,740                                               13,688                                              302,204                                              287,760                                               14,444
                                                                                                                                                                                                                                                                                                                                                                                                                                                     
(a) Excludes unrealized gain (loss)
 
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Net Interest Income

Net interest income on a taxable-equivalent basis in the fourth quarter of 2017 was $3,197 million, an increase of $193 million (6.4 percent) over the fourth quarter of 2016. The increase was principally driven by the impact of rising interest rates and loan growth. Average earning assets were $11.5 billion (2.9 percent) higher than the fourth quarter of 2016, reflecting increases of $7.1 billion (2.6 percent) in average total loans, $2.9 billion (2.6 percent) in average investment securities and $2.7 billion (19.4 percent) in average other earning assets. Net interest income on a taxable-equivalent basis increased $11 million (0.3 percent) on a linked quarter basis primarily driven by loan growth and higher interest rates. Average earning assets were $4.7 billion (1.1 percent) higher on a linked quarter basis, reflecting increases of $2.1 billion (0.8 percent) in average total loans, $1.5 billion (1.3 percent) in average investment securities and $1.1 billion (7.3 percent) in average other earning assets.

The net interest margin in the fourth quarter of 2017 was 3.08 percent, compared with 2.98 percent in the fourth quarter of 2016, and 3.10 percent in the third quarter of 2017. The increase in the net interest margin year-over-year was primarily due to higher interest rates and loan mix, partially offset by higher funding costs and higher cash balances. The decrease in net interest margin on a linked quarter basis was primarily due to higher interest recoveries in the third quarter of 2017.

Investment Securities

Average investment securities in the fourth quarter of 2017 were $2.9 billion (2.6 percent) higher year-over-year and $1.5 billion (1.3 percent) higher than the prior quarter. These increases were primarily due to purchases of U.S. Treasury and U.S. government mortgage-backed securities, net of prepayments and maturities, in support of liquidity management.

                                                 
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AVERAGE LOANS                                                                   Table 4
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($ in millions)                                                                                                          Percent                Percent                                                
                                                                                                                                                                                                      Change                                    Change
                                                                            4Q                                        3Q                                        4Q                                   4Q17 vs                                   4Q17 vs                                 Full Year                                 Full Year                                   Percent
                                                                          2017                   2017                   2016                   3Q17                   4Q16                   2017                   2016                 Change
                                                          -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ----------------------------------------- ----------------------------------------- -------------------- -------------------- -------------------- -------------------- ---------------------
                                                                                                                                                                                                                                                                                                                                                                 
Commercial                                                             $92,101                                   $91,077                                   $88,448                             1.1                                       4.1                                             $90,393                                   $86,754                             4.2
Lease financing                                                          5,457                  5,556                  5,359                            (1.8 )                                     1.8                                               5,511                  5,289                             4.2
                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                          -------------------- -------------------- --------------------
  Total commercial                                                      97,558                                    96,633                                    93,807                             1.0                                       4.0                                              95,904                                    92,043                             4.2
                                                                                                                                                                                                                                                                                                                                                                 
Commercial mortgages                                                    29,543                                    30,114                                    31,767                            (1.9 )                                    (7.0 )                                            30,430                                    31,860                            (4.5 )
Construction and development                                            11,466                 11,507                 11,624                             (.4 )                                    (1.4 )                                            11,647                                    11,180                             4.2
                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                          --------------------                      --------------------
  Total commercial real estate                                          41,009                                    41,621                                    43,391                            (1.5 )                                    (5.5 )                                            42,077                                    43,040                            (2.2 )
                                                                                                                                                                                                                                                                                                                                                                 
Residential mortgages                                                   59,639                                    59,030                                    56,718                             1.0                                       5.2                                              58,784                                    55,682                             5.6
                                                                                                                                                                                                                                                                                                                                                                 
Credit card                                                             21,218                                    20,926                                    20,942                             1.4                                       1.3                                              20,906                                    20,490                             2.0
                                                                                                                                                                                                                                                                                                                                                                 
Retail leasing                                                           7,982                                     7,762                                     6,191                             2.8                                      28.9                                               7,354                                     5,619                            30.9
Home equity and second mortgages                                        16,299                                    16,299                                    16,444                              --                                       (.9 )                                            16,278                                    16,419                             (.9 )
Other                                                                   32,856                 32,008                 31,245                             2.6                                       5.2                                              31,784                 30,292                             4.9
                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                          -------------------- -------------------- --------------------
  Total other retail                                                    57,137                 56,069                 53,880                             1.9                                       6.0                                              55,416                 52,330                             5.9
                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                          -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                 
Total loans, excluding covered loans                                   276,561                274,279                268,738                              .8                                       2.9                                             273,087                263,585                             3.6
                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                          -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                 
Covered loans                                                            3,190                  3,347                  3,933                            (4.7 )                                   (18.9 )                                             3,450                  4,226                           (18.4 )
                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                          -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                 
Total loans                                                           $279,751               $277,626               $272,671                              .8                                       2.6                                            $276,537               $267,811                             3.3
                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                          -------------------- -------------------- --------------------
                                                 
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Loans

Average total loans were $7.1 billion (2.6 percent) higher than the fourth quarter of 2016. The increase was due to growth in total commercial loans (4.0 percent), residential mortgages (5.2 percent), retail leasing (28.9 percent) and other retail loans (5.2 percent). These increases were partially offset by a decrease in total commercial real estate loans (5.5 percent) due to disciplined underwriting of construction and development loans and payoffs of commercial mortgages given recent capital market financing by customers. Loan growth was also muted by run-off in the covered loans portfolio (18.9 percent). Average total loans were $2.1 billion (0.8 percent) higher than the third quarter of 2017. This increase was primarily driven by linked quarter growth in total other retail loans (1.9 percent), total commercial loans (1.0 percent) and residential mortgages (1.0 percent), partially offset by decreases in total commercial real estate loans (1.5 percent) and covered loans (4.7 percent).

                                                
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AVERAGE DEPOSITS                                                               Table 5
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($ in millions)                                                                                                         Percent                Percent                                                
                                                                                                                                                                                                     Change                                    Change
                                                                           4Q                                        3Q                                        4Q                                   4Q17 vs                                   4Q17 vs                                 Full Year                                 Full Year                                   Percent
                                                                         2017                   2017                   2016                   3Q17                   4Q16                   2017                   2016                 Change
                                                         -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ----------------------------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                
Noninterest-bearing deposits                                          $82,303                                   $81,964                                   $84,892                                        .4                            (3.0 )                                           $81,933                                   $81,176                                        .9
Interest-bearing savings deposits
  Interest checking                                                    70,717                                    68,066                                    64,647                                       3.9                             9.4                                              67,953                                    61,726                                      10.1
  Money market savings                                                105,348                                   105,072                                   106,637                                        .3                            (1.2 )                                           106,476                                    96,518                                      10.3
  Savings accounts                                                     43,772                 43,649                 41,310                                        .3                             6.0                                              43,393                 40,382                                       7.5
                                                         -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                          -------------------- -------------------- --------------------
    Total savings deposits                                            219,837                                   216,787                                   212,594                                       1.4                             3.4                                             217,822                                   198,626                                       9.7
Time deposits                                                          37,022                 36,400                 31,697                                       1.7                            16.8                                              33,759                 33,008                                       2.3
                                                         -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                          -------------------- -------------------- --------------------
    Total interest-bearing deposits                                   256,859                253,187                244,291                                       1.5                             5.1                                             251,581                231,634                                       8.6
                                                         -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                          -------------------- -------------------- --------------------
Total deposits                                                       $339,162               $335,151               $329,183                                       1.2                             3.0                                            $333,514               $312,810                                       6.6
                                                         -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                          -------------------- -------------------- --------------------
                                                
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Deposits

Average total deposits for the fourth quarter of 2017 were $10.0 billion (3.0 percent) higher than the fourth quarter of 2016. Average noninterest-bearing deposits decreased $2.6 billion (3.0 percent) year-over-year primarily due to a decrease in Corporate and Commercial Banking. Average total savings deposits were $7.2 billion (3.4 percent) higher year-over-year driven by growth in Consumer and Business Banking and Wealth Management and Investment Services, partially offset by a decrease in Corporate and Commercial Banking. Average time deposits were $5.3 billion (16.8 percent) higher than the prior year quarter. Changes in time deposits are largely related to those deposits managed as an alternative to other funding sources such as wholesale borrowing, based largely on relative pricing and liquidity characteristics.

Average total deposits increased $4.0 billion (1.2 percent) over the third quarter of 2017. On a linked quarter basis, average noninterest-bearing deposits increased slightly and average total savings deposits grew $3.1 billion (1.4 percent) reflecting increases in Consumer and Business Banking and Wealth Management and Investment Services. Average time deposits, which are managed based on funding needs, relative pricing and liquidity characteristics, increased $622 million (1.7 percent) on a linked quarter basis.

                                                   
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NONINTEREST INCOME                                                                                   Table 6
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($ in millions)                                                                                                          Percent                Percent                                                
                                                                                                                                                                                                      Change                                    Change
                                                                            4Q                                        3Q                                        4Q                                   4Q17 vs                                   4Q17 vs                                 Full Year                                 Full Year                                                        Percent
                                                                          2017                   2017                   2016                   3Q17                   4Q16                   2017                   2016                                      Change
                                                          -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ----------------------------------------- ----------------------------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                      
Credit and debit card revenue                                             $333                                      $308                                      $316                             8.1                                       5.4                                              $1,252                                    $1,177                                       6.4
Corporate payment products revenue                                         189                                       201                                       171                            (6.0 )                                    10.5                                                 753                                       712                                       5.8
Merchant processing services                                               400                                       405                                       404                            (1.2 )                                    (1.0 )                                             1,590                                     1,592                                       (.1 )
ATM processing services                                                     95                                        92                                        87                             3.3                                       9.2                                                 362                                       338                                       7.1
Trust and investment management fees                                       394                                       380                                       368                             3.7                                       7.1                                               1,522                                     1,427                                       6.7
Deposit service charges                                                    198                                       192                                       186                             3.1                                       6.5                                                 751                                       725                                       3.6
Treasury management fees                                                   152                                       153                                       147                             (.7 )                                     3.4                                                 618                                       583                                       6.0
Commercial products revenue                                                211                                       221                                       217                            (4.5 )                                    (2.8 )                                               849                                       871                                      (2.5 )
Mortgage banking revenue                                                   202                                       213                                       240                            (5.2 )                                   (15.8 )                                               834                                       979                                     (14.8 )
Investment products fees                                                    43                                        39                                        38                            10.3                                      13.2                                                 163                                       158                                       3.2
Securities gains (losses), net                                              10                                         9                                         6                            11.1                                      66.7                                                  57                                        22                                        nm
Other                                                                      214                    209                    251                             2.4                                     (14.7 )                                               860                    993                                     (13.4 )
                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                          -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                      
Total noninterest income                                                $2,441                 $2,422                 $2,431                              .8                                        .4                                              $9,611                 $9,577                                        .4
                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                          -------------------- -------------------- --------------------
                                                   
------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ----------------------------------------- ----------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                      

Noninterest Income

Fourth quarter noninterest income of $2,441 million was $10 million (0.4 percent) higher than the fourth quarter of 2016 principally due to higher payment services revenue, trust and investment management fees, and deposit service charges, partially offset by lower mortgage banking and other revenue. Payment services revenue was higher due to an increase in corporate payment products revenue of $18 million (10.5 percent) and an increase in credit and debit card revenue of $17 million (5.4 percent), both driven by higher sales volumes. These increases were partially offset by a decrease in merchant processing services revenue of $4 million (1.0 percent) mainly due to exiting certain joint ventures in the second quarter of 2017. Trust and investment management fees increased $26 million (7.1 percent) principally due to favorable market conditions and net asset and account growth. Deposit service charges increased $12 million (6.5 percent) primarily due to higher transaction volumes and account growth. Mortgage banking revenue decreased $38 million (15.8 percent) primarily due to lower origination and sales volumes from home refinancing activities which were higher in the prior year quarter and lower margins on mortgage loan sales. Other revenue decreased $37 million (14.7 percent) primarily due to lower equity investment income in the current quarter.

Noninterest income was $19 million (0.8 percent) higher in the fourth quarter of 2017 than the third quarter of 2017 reflecting growth in trust and investment management fees, payment services revenue and deposit service charges, partially offset by lower mortgage banking revenue and commercial products revenue. Trust and investment management fees increased $14 million (3.7 percent) driven by account growth and favorable market conditions. Payment services revenue was higher due to an increase in credit and debit card revenue of $25 million (8.1 percent) primarily due to seasonally higher sales volumes. This increase was partially offset by an expected seasonal decline in corporate payment products revenue of $12 million (6.0 percent) and merchant processing services revenue of $5 million (1.2 percent) due to seasonally lower sales volumes. Deposit service charges increased $6 million (3.1 percent) due to higher transaction volumes. Mortgage banking revenue decreased $11 million (5.2 percent) primarily due to the valuation of mortgage servicing rights, net of hedging activities, along with lower origination and sales volumes and lower margins on related sales. Commercial products revenue decreased $10 million (4.5 percent) primarily driven by lower corporate bond fees.

                                                   
---------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------------------
NONINTEREST EXPENSE                                                                                    Table 7
---------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------------------
($ in millions)                                                                                                                             Percent                                     Percent                                                
                                                                                                                                                                                                                         Change                                                         Change
                                                                          4Q                                        3Q                                        4Q                                                        4Q17 vs                                                        4Q17 vs                                 Full Year                                 Full Year                                                        Percent
                                                                        2017                   2017                   2016                                        3Q17                                        4Q16                   2017                   2016                                      Change
                                                        -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                         
Compensation                                                          $1,499                                    $1,440                                    $1,357                                       4.1                                                           10.5                                                         $5,746                                    $5,212                                      10.2
Employee benefits                                                        304                                       281                                       261                                       8.2                                                           16.5                                                          1,186                                     1,119                                       6.0
Net occupancy and equipment                                              259                                       258                                       247                                        .4                                                            4.9                                                          1,019                                       988                                       3.1
Professional services                                                    114                                       104                                       156                                       9.6                                                          (26.9 )                                                          419                                       502                                     (16.5 )
Marketing and business development                                       251                                        92                                       107                                        nm                                                             nm                                                            542                                       435                                      24.6
Technology and communications                                            254                                       246                                       238                                       3.3                                                            6.7                                                            977                                       955                                       2.3
Postage, printing and supplies                                            79                                        82                                        75                                      (3.7 )                                                          5.3                                                            323                                       311                                       3.9
Other intangibles                                                         44                                        44                                        45                                        --                                                           (2.2 )                                                          175                                       179                                      (2.2 )
Other                                                                  1,135                    492                    518                                        nm                                                             nm                                                          2,558                  1,975                                      29.5
                                                        -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                                                                    -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                         
Total noninterest expense                                             $3,939                 $3,039                 $3,004                                      29.6                                                           31.1                                                        $12,945                $11,676                                      10.9
                                                        -------------------- -------------------- -------------------- -------------------- --------------------                                                                                                                                                    -------------------- -------------------- --------------------
                                                     
---------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                              

Noninterest Expense

Fourth quarter noninterest expense of $3,939 million was $935 million (31.1 percent) higher than the fourth quarter of 2016 primarily due to notable items which totaled $825 million. This amount consisted of a special bonus to eligible employees, a charitable contribution to the U.S. Bank Foundation, and a $608 million accrual for previously disclosed regulatory and legal matters related to Bank Secrecy Act/anti-money laundering compliance program adequacy and investigations by the United States Attorney’s Office in Manhattan into that program and U.S. Bank National Association’s legacy relationship with payday lending businesses associated with a former customer. The Company is working on a definitive settlement of these matters, which is expected to finalize soon. Excluding the notable items, fourth quarter noninterest expense increased $110 million (3.6 percent) year-over-year primarily due to higher compensation and employee benefits expense, partially offset by lower professional services expense. Compensation expense increased principally due to the impact of hiring to support business growth and compliance programs, merit increases, and higher variable compensation related to business production. The increase in employee benefits expense was primarily driven by increased medical costs. Professional services expense decreased $42 million (26.9 percent) primarily due to fewer consulting services as compliance programs near maturity.

Noninterest expense increased $900 million (29.6 percent) on a linked quarter basis primarily due to the notable items. Excluding the notable items, noninterest expense was $75 million (2.5 percent) higher in the fourth quarter of 2017 than the third quarter of 2017 driven by seasonally higher costs related to investments in tax-advantaged projects and seasonally higher professional services expense in addition to an increase in employee benefits expense due to increased medical costs.

Provision for Income Taxes

During the fourth quarter of 2017, tax legislation was enacted that, among other provisions, reduced the statutory tax rate for corporations from 35 percent to 21 percent effective in 2018. In accordance with generally accepted accounting principles, the Company revalued deferred tax assets and liabilities at the end of the fourth quarter of 2017 resulting in an estimated net tax benefit of $910 million during the fourth quarter of 2017. The provision for income taxes for the fourth quarter of 2017 reflects this benefit resulting in a tax benefit of 23.6 percent on a taxable-equivalent basis (effective tax benefit of 28.6 percent), compared with tax expense of 28.6 percent (effective tax rate of 26.9 percent) in the fourth quarter of 2016, and 29.0 percent (effective tax rate of 27.3 percent) in the third quarter of 2017.

                                                                                                                                               
------------------------------------------------------------------- -------------------- ---------------------------------------------------- ----------------------------------------- ---------------------------------------------------- ----------------------------------------- ---------------------------------------------------- ----------------------------------------- ---------------------------------------------------- ----------------------------------------- ---------------------------------------------------- ---------------------
ALLOWANCE FOR CREDIT LOSSES                                                                                                                                                                                                            Table 8
------------------------------------------------------------------- ------------------------------------------------------------------------- ----------------------------------------- ---------------------------------------------------- ----------------------------------------- ---------------------------------------------------- ----------------------------------------- ---------------------------------------------------- ----------------------------------------- --------------------------------------------------------------------------
($ in millions)                                                                                    4Q                                                       3Q                                                       2Q                                                       1Q                                                       4Q  
                                                                                                                    2017                  % (b)                              2017                  % (b)                              2017                  % (b)                              2017                  % (b)                              2016                  % (b)
                                                                                         ---------------------------------------------------- ----------------------------------------- ---------------------------------------------------- ----------------------------------------- ---------------------------------------------------- ----------------------------------------- ---------------------------------------------------- ----------------------------------------- ---------------------------------------------------- ---------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
Balance, beginning of period                                                                 $4,407                                                                                         $4,377                                                                                         $4,366                                                                                         $4,357                                                                                         $4,338
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
Net charge-offs
  Commercial                                                                                     22                                                  .09                                        79                                                  .34                                        75                                                  .33                                        71                                                  .33                                        71                                                  .32
  Lease financing                                                                                 6                               .44                                         4                               .29                                         3                               .22                                         4                               .30                                         5                               .37
                                                                                         ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------
    Total commercial                                                                             28                                                  .11                                        83                                                  .34                                        78                                                  .33                                        75                                                  .32                                        76                                                  .32
  Commercial mortgages                                                                           18                                                  .24                                        (2 )                                               (.03 )                                      (7 )                                               (.09 )                                      (1 )                                               (.01 )                                      (3 )                                               (.04 )
  Construction and development                                                                   --                                --                                        (5 )                                               (.17 )                                      (2 )                                               (.07 )                                      (1 )                                               (.03 )                                      (6 )                                               (.21 )
                                                                                         ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------
    Total commercial real estate                                                                 18                                                  .17                                        (7 )                                               (.07 )                                      (9 )                                               (.08 )                                      (2 )                                               (.02 )                                      (9 )                                               (.08 )
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
  Residential mortgages                                                                          10                                                  .07                                         7                                                  .05                                         8                                                  .05                                        12                                                  .08                                        12                                                  .08
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
  Credit card                                                                                   205                                                 3.83                                       187                                                 3.55                                       204                                                 3.97                                       190                                                 3.70                                       181                                                 3.44
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
  Retail leasing                                                                                  3                                                  .15                                         2                                                  .10                                         2                                                  .11                                         3                                                  .19                                         1                                                  .06
  Home equity and second mortgages                                                               (2 )                                               (.05 )                                      (1 )                                               (.02 )                                      (1 )                                               (.02 )                                      (1 )                                               (.02 )                                      (1 )                                               (.02 )
  Other                                                                                          63                               .76                                        59                               .73                                        58                               .75                                        58                               .76                                        62                               .79
                                                                                         ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------
    Total other retail                                                                           64                                                  .44                                        60                                                  .42                                        59                                                  .43                                        60                                                  .45                                        62                                                  .46
      Total net charge-offs,                                                                                                                                                                                                                                                                                                                                                                              
                                                                                         --------------------------------                                                               --------------------------------                                                               --------------------------------                                                               --------------------------------                                                               --------------------------------
        excluding covered loans                                                                 325                                                  .47                                       330                                                  .48                                       340                                                  .50                                       335                                                  .50                                       322                                                  .48
  Covered loans                                                                                  --                                --                                        --                                --                                        --                                --                                        --                                --                                        --                                --
                                                                                         ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------
      Total net charge-offs                                                                     325                                                  .46                                       330                                                  .47                                       340                                                  .49                                       335                                                  .50                                       322                                                  .47
Provision for credit losses                                                                     335                                                                                            360                                                                                            350                                                                                            345                                                                                            342
Other changes (a)                                                                                --                                                                          --                                                                           1                                                                          (1 )                                                                                           (1 )
                                                                                         ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------
Balance, end of period                                                                       $4,417                                                                      $4,407                                                                      $4,377                                                                      $4,366                                                                      $4,357  
                                                                                         ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
Components
  Allowance for loan losses                                                                  $3,925                                                                                         $3,908                                                                                         $3,856                                                                                         $3,816                                                                                         $3,813
                                                                                                492                                                                         499                                                                         521                                                                         550                                                                         544  
  Liability for unfunded credit commitments
                                                                                         ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------
Total allowance for credit losses                                                            $4,417                                                                      $4,407                                                                      $4,377                                                                      $4,366                                                                      $4,357  
                                                                                         ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------                                                                ---------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
Gross charge-offs                                                                              $464                                                                                           $433                                                                                           $437                                                                                           $417                                                                                           $405
Gross recoveries                                                                               $139                                                                                           $103                                                                                            $97                                                                                            $82                                                                                            $83
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
Allowance for credit losses as a percentage of
                                                                                               1.58                                                                                           1.59                                                                                           1.59                                                                                           1.61                                                                                           1.60
  Period-end loans, excluding covered loans
                                                                                                438                                                                                            425                                                                                            385                                                                                            338                                                                                            317
  Nonperforming loans, excluding covered loans
                                                                                                374                                                                                            359                                                                                            331                                                                                            296                                                                                            275
  Nonperforming assets, excluding covered assets
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
  Period-end loans                                                                             1.58                                                                                           1.58                                                                                           1.58                                                                                           1.60                                                                                           1.59
  Nonperforming loans                                                                           438                                                                                            426                                                                                            383                                                                                            338                                                                                            318
  Nonperforming assets                                                                          368                                                                                            352                                                                                            324                                                                                            292                                                                                            272
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
(a) Includes net changes in credit losses to be reimbursed by the
FDIC and reductions in the allowance for covered loans where the
reversal of a previously recorded allowance was offset by an
associated decrease in the indemnification asset, and the
impact of any loan sales.
(b) Annualized and calculated on average loan balances
                                                  
------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     

Credit Quality

The Company’s provision for credit losses for the fourth quarter of 2017 was $335 million, which was $25 million (6.9 percent) lower than the prior quarter and $7 million (2.0 percent) lower than the fourth quarter of 2016. Credit quality was relatively stable compared with the third quarter of 2017.

Total net charge-offs in the fourth quarter of 2017 were $325 million, compared with $330 million in the third quarter of 2017, and $322 million in the fourth quarter of 2016. Net charge-offs decreased $5 million (1.5 percent) compared with the third quarter of 2017 mainly due to lower total commercial loan net charge-offs driven by higher recoveries, partially offset by higher total commercial real estate and credit card loan net charge-offs. Net charge-offs increased $3 million (0.9 percent) compared with the fourth quarter of 2016 primarily due to higher total commercial real estate and credit card loan net charge-offs, mostly offset by lower total commercial loan net charge-offs driven by higher recoveries. The net charge-off ratio was 0.46 percent in the fourth quarter of 2017, compared with 0.47 percent in the third quarter of 2017 and in the fourth quarter of 2016.

The allowance for credit losses was $4,417 million at December 31, 2017, compared with $4,407 million at September 30, 2017, and $4,357 million at December 31, 2016. The ratio of the allowance for credit losses to period-end loans was 1.58 percent at December 31, 2017 and at September 30, 2017, compared with 1.59 percent at December 31, 2016. The ratio of the allowance for credit losses to nonperforming loans was 438 percent at December 31, 2017, compared with 426 percent at September 30, 2017, and 318 percent at December 31, 2016.

Nonperforming assets were $1,200 million at December 31, 2017, compared with $1,251 million at September 30, 2017, and $1,603 million at December 31, 2016. The ratio of nonperforming assets to loans and other real estate was 0.43 percent at December 31, 2017, compared with 0.45 percent at September 30, 2017, and 0.59 percent at December 31, 2016. The linked quarter and year-over-year decreases in nonperforming assets were driven by improvements in total commercial loans, residential mortgages and other real estate owned, partially offset by an increase in total commercial real estate loans. Accruing loans 90 days or more past due were $720 million ($572 million excluding covered loans) at December 31, 2017, compared with $649 million ($497 million excluding covered loans) at September 30, 2017, and $764 million ($552 million excluding covered loans) at December 31, 2016.

                                     
------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
DELINQUENT LOAN RATIOS AS A PERCENT OF ENDING LOAN BALANCES                                                                                                                                                    Table 9
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------         -------------------- --------------------
(Percent)                                                                                                  
                                                                        Dec 31                                    Sep 30                                    Jun 30                                    Mar 31                                    Dec 31
                                                                          2017                   2017                   2017                   2017                   2016
                                                          -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                   
Delinquent loan ratios - 90 days or more past due excluding
nonperforming loans
  Commercial                                                               .06                                       .05                                       .05                                       .06                                       .06
  Commercial real estate                                                   .01                                       .01                                        --                                       .01                                       .02
  Residential mortgages                                                    .22                                       .18                                       .20                                       .24                                       .27
  Credit card                                                             1.28                                      1.20                                      1.10                                      1.23                                      1.16
  Other retail                                                             .17                                       .15                                       .14                                       .14                                       .15
Total loans, excluding covered loans                                       .21                                       .18                                       .17                                       .19                                       .20
  Covered loans                                                           4.74                                      4.66                                      4.71                                      5.34                                      5.53
Total loans                                                                .26                                       .23                                       .23                                       .26                                       .28
                                                                                                                                                                                                                                   
Delinquent loan ratios - 90 days or more past due including
nonperforming loans
  Commercial                                                               .31                                       .33                                       .39                                       .52                                       .57
  Commercial real estate                                                   .37                                       .30                                       .29                                       .27                                       .31
  Residential mortgages                                                    .96                                       .98                                      1.10                                      1.23                                      1.31
  Credit card                                                             1.28                                      1.20                                      1.10                                      1.24                                      1.18
  Other retail                                                             .46                                       .43                                       .42                                       .43                                       .45
Total loans, excluding covered loans                                       .57                                       .55                                       .59                                       .67                                       .71
  Covered loans                                                           4.93                                      4.84                                      5.06                                      5.53                                      5.68
Total loans                                                                .62                                       .60                                       .64                                       .73                                       .78
                                     
------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                   
                                                                                    
----------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
ASSET QUALITY                                                                                                                                           Table 10
----------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------------------------------------------------------------
($ in millions)                                                                                                                                                                  
                                                                                                                       Dec 31                                    Sep 30                                    Jun 30                                    Mar 31                                    Dec 31
                                                                                                                         2017                   2017                   2017                   2017                   2016
                                                                                                         -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Nonperforming loans
  Commercial                                                                                                             $225                                      $231                                      $283                                      $397                                      $443
  Lease financing                                                                                                          24                     38                     39                     42                     40
                                                                                                         -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
    Total commercial                                                                                                      249                                       269                                       322                                       439                                       483
                                                                                                                                                                                                                                                                                  
  Commercial mortgages                                                                                                    108                                        89                                        84                                        74                                        87
  Construction and development                                                                                             34                     33                     35                     36                     37
                                                                                                         -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
    Total commercial real estate                                                                                          142                                       122                                       119                                       110                                       124
                                                                                                                                                                                                                                                                                  
  Residential mortgages                                                                                                   442                                       474                                       530                                       575                                       595
  Credit card                                                                                                               1                                         1                                         1                                         2                                         3
  Other retail                                                                                                            168                    163                    158                    157                    157
                                                                                                         -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total nonperforming loans, excluding covered loans                                                                      1,002                                     1,029                                     1,130                                     1,283                                     1,362
                                                                                                                                                                                                                                                                                  
  Covered loans                                                                                                             6                      6                     12                      7                      6
                                                                                                         -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total nonperforming loans                                                                                               1,008                                     1,035                                     1,142                                     1,290                                     1,368
                                                                                                                                                                                                                                                                                  
Other real estate (a)                                                                                                     141                                       164                                       157                                       155                                       186
Covered other real estate (a)                                                                                              21                                        26                                        25                                        22                                        26
Other nonperforming assets                                                                                                 30                     26                     25                     28                     23
                                                                                                         -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                  
Total nonperforming assets (b)                                                                                         $1,200                 $1,251                 $1,349                 $1,495                 $1,603
                                                                                                         -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                  
Total nonperforming assets, excluding covered assets                                                                   $1,173                 $1,219                 $1,312                 $1,466                 $1,571
                                                                                                         -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                  
Accruing loans 90 days or more past due, excluding covered loans                                      $572                   $497                   $477                   $524                   $552
                                                                                                         -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                  
Accruing loans 90 days or more past due                                                                                  $720                   $649                   $639                   $718                   $764
                                                                                                         -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                  
Performing restructured loans, excluding GNMA and covered loans                                                        $2,306                 $2,419                 $2,473                 $2,478                 $2,557
                                                                                                         -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                  
Performing restructured GNMA and covered loans                                                                         $1,713                 $1,600                 $1,803                 $1,746                 $1,604
                                                                                                         -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                  
Nonperforming assets to loans plus ORE, excluding covered assets                                       .42                                       .44                                       .48                                       .54                                       .58
(%)
                                                                                                                                                                                                                                                                                  
Nonperforming assets to loans plus ORE (%)                                                                                .43                                       .45                                       .49                                       .55                                       .59
                                                                                                                                                                                                                                                                                  
(a) Includes equity investments in entities whose principal assets
are other real estate owned.
(b) Does not include accruing loans 90 days or more past due.
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
                                                                                                                                                                       
---------------------------------------------------------------------------------- -------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- ------------------------------------------
COMMON SHARES                                                                                                                                                                                                                                                   Table 11
---------------------------------------------------------------------------------- -------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------
(Millions)                                                                                                                  4Q                                          3Q                                          2Q                                          1Q                                          4Q
                                                                                                                                             2017                                        2017                                        2017                                        2017                                        2016
                                                                                                        -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- ------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                     
Beginning shares outstanding                                                                                           1,667                                                          1,679                                                          1,692                                                          1,697                                                          1,705
Shares issued for stock incentive plans, acquisitions and other                                         1                                                             --                                                              1                                                              6                                                              6
corporate purposes
Shares repurchased                                                                                                       (12 )                                       (12 )                                       (14 )                                       (11 )                                       (14 )
                                                                                                        -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Ending shares outstanding                                                                                              1,656                    1,667                    1,679                    1,692                    1,697  
                                                                                                        -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                             
---------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                
--------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------------------
CAPITAL POSITION                                                                                                                                                                       Table 12
--------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------------------------------------------------------------
($ in millions)                                                                                                              Dec 31                                      Sep 30                                      Jun 30                                      Mar 31                 Dec 31
                                                                                                                                                  2017                                        2017                                        2017                                        2017                   2016
                                                                                                             -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- ---------------------
                                                                                                                                                                                                                                                                                                                                                                          
Total U.S. Bancorp shareholders’ equity                                                                                   $49,040                                                        $48,723                                                        $48,320                                                        $47,798                                              $47,298
                                                                                                                                                                                                                                                                                                                                                                          
Standardized Approach
                                                                                                                                                                                                                                                                                                                                                                          
  Basel III transitional standardized approach
    Common equity tier 1 capital                                                                                          $34,369                                                        $34,876                                                        $34,408                                                        $33,847                                              $33,720
    Tier 1 capital                                                                                                         39,806                                                         40,411                                                         39,943                                                         39,374                                               39,421
    Total risk-based capital                                                                                               47,503                                                         48,104                                                         47,824                                                         47,279                                               47,355
                                                                                                                                                                                                                                                                                                                                                                          
    Common equity tier 1 capital ratio                                                                                        9.3 %                                                          9.6 %                                                          9.5 %                                                          9.5 %                                                9.4 %
    Tier 1 capital ratio                                                                                                     10.8                                                           11.1                                                           11.1                                                           11.0                                                 11.0
    Total risk-based capital ratio                                                                                           12.9                                                           13.2                                                           13.2                                                           13.3                                                 13.2
    Leverage ratio                                                                                                            8.9                                                            9.1                                                            9.1                                                            9.1                                                  9.0
                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                              9.1                                                            9.4                                                            9.3                                                            9.2                                                  9.1
  Common equity tier 1 capital to risk-weighted assets estimated for
  the Basel III fully implemented standardized approach (a)
                                                                                                                                                                                                                                                                                                                                                                          
Advanced Approaches
                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                             12.0                                                           12.1                                                           12.0                                                           11.8                                                 12.2
  Common equity tier 1 capital to risk-weighted assets for the Basel
  III transitional advanced approaches
                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                             11.6                                                           11.8                                                           11.7                                                           11.5                                                 11.7
  Common equity tier 1 capital to risk-weighted assets estimated for
  the Basel III fully implemented advanced approaches (a)
                                                                                                                                                                                                                                                                                                                                                                          
Tangible common equity to tangible assets (a)                                                                                 7.6                                                            7.7                                                            7.5                                                            7.6                                                  7.5
Tangible common equity to risk-weighted assets (a)                                                                            9.4                                                            9.5                                                            9.4                                                            9.4                                                  9.2
                                                                                                                                                                                                                                                                                                                                                                          
Beginning January 1, 2014, the regulatory capital requirements
effective for the Company follow Basel III, subject to certain
transition provisions from Basel I over the following four years to
full implementation by January 1, 2018. Basel III includes two
comprehensive methodologies for calculating risk-weighted assets: a
general standardized approach and more risk-sensitive advanced
approaches, with the Company’s capital adequacy being evaluated
against the methodology that is most restrictive.
 
(a) See Non-GAAP Financial Measures reconciliation on page 23
                                                                                                                                      
------------------------------------------------------------------------------------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------------------
                                                                                                                                                                                                                                                                                                                                                                          

Capital Management

Total U.S. Bancorp shareholders’ equity was $49.0 billion at December 31, 2017, compared with $48.7 billion at September 30, 2017, and $47.3 billion at December 31, 2016. During the fourth quarter, the Company returned 72 percent of earnings to shareholders through dividends and share buybacks.

All regulatory ratios continue to be in excess of "well-capitalized" requirements. The estimated common equity tier 1 capital to risk-weighted assets ratio using the Basel III fully implemented standardized approach was 9.1 percent at December 31, 2017, compared with 9.4 percent at September 30, 2017, and 9.1 percent at December 31, 2016. The estimated common equity tier 1 capital to risk-weighted assets ratio using the Basel III fully implemented advanced approaches method was 11.6 percent at December 31, 2017, compared with 11.8 percent at September 30, 2017, and 11.7 percent at December 31, 2016.

On Wednesday, January 17, 2018, at 8:00 a.m. CST, Andy Cecere, president and chief executive officer, and Terry Dolan, vice chairman and chief financial officer, will host a conference call to review the financial results. The conference call will be available online or by telephone. To access the webcast and presentation, go to www.usbank.com and click on "About U.S. Bank." The "Webcasts & Presentations" link can be found under the Investor/Shareholder information heading, which is at the left side near the bottom of the page. To access the conference call from locations within the United States and Canada, please dial 866-316-1409. Participants calling from outside the United States and Canada, please dial 706-634-9086. The conference ID number for all participants is 8669609. For those unable to participate during the live call, a recording will be available at approximately 11:00 a.m. CST on Wednesday, January 17 and will be accessible through Wednesday, January 24 at 11:00 p.m. CST. To access the recorded message within the United States and Canada, please dial 855-859-2056. If calling from outside the United States and Canada, please dial 404-537-3406 to access the recording. The conference ID is 8669609.

Minneapolis-based U.S. Bancorp (USB ), with $462 billion in assets as of December 31, 2017, is the parent company of U.S. Bank National Association, the fifth largest commercial bank in the United States. The Company operates 3,067 banking offices in 25 states and 4,771 ATMs and provides a comprehensive line of banking, investment, mortgage, trust and payment services products to consumers, businesses and institutions. Visit U.S. Bancorp on the web at www.usbank.com.

Forward-Looking Statements

The following information appears in accordance with the Private Securities Litigation Reform Act of 1995:

This press release 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. A reversal or slowing of the current economic recovery or another severe contraction could adversely affect U.S. Bancorp’s revenues and the values of its assets and liabilities. Global financial markets could experience a recurrence of significant turbulence, which could reduce the availability of funding to certain financial institutions and lead to a tightening of credit, a reduction of business activity, and increased market volatility. Stress in the commercial real estate markets, as well as a downturn in the residential real estate markets could cause credit losses and deterioration in asset values. In addition, changes to statutes, regulations, or regulatory policies or practices could affect U.S. Bancorp in substantial and unpredictable ways. U.S. Bancorp’s results could also be adversely affected by deterioration in general business and economic conditions; changes in interest rates; deterioration in the credit quality of its loan portfolios or in the value of the collateral securing those loans; deterioration in the value of securities held in its investment securities portfolio; legal and regulatory developments; litigation; increased competition from both banks and non-banks; changes in customer behavior and preferences; breaches in data security; effects of mergers and acquisitions and related integration; effects of critical accounting policies and judgments; and management’s ability to effectively manage credit risk, market risk, operational risk, compliance risk, strategic risk, interest rate risk, liquidity risk and reputational 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, 2016, 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. However, factors other than these also could adversely affect U.S. Bancorp’s results, and the reader should not consider these factors to be a complete set of all potential risks or uncertainties. 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.

Non-GAAP Financial Measures

In addition to capital ratios defined by banking regulators, the Company considers various other measures when evaluating capital utilization and adequacy, including:

-- Tangible common equity to tangible assets,

-- Tangible common equity to risk-weighted assets,

-- Common equity tier 1 capital to risk-weighted assets estimated for the Basel III fully implemented standardized approach, and

-- Common equity tier 1 capital to risk-weighted assets estimated for the Basel III fully implemented advanced approaches.

These capital measures are viewed by management as useful additional methods of reflecting the level of capital available to withstand unexpected negative market or economic conditions. Additionally, presentation of these measures allows investors, analysts and banking regulators to assess the Company’s capital position relative to other financial services companies. These measures differ from currently effective capital ratios defined by banking regulations principally in that the numerator of the currently effective ratios, which are subject to certain transitional provisions, temporarily excludes a portion of unrealized gains and losses related to available-for-sale securities and retirement plan obligations, and includes a portion of capital related to intangible assets, other than mortgage servicing rights. These capital measures are not defined in generally accepted accounting principles ("GAAP"), or are not currently effective or defined in federal banking regulations. As a result, these capital measures disclosed by the Company may be considered non-GAAP financial measures.

The Company also discloses net interest income and related ratios and analysis on a taxable-equivalent basis, which may also be considered non-GAAP financial measures. The Company believes this presentation to be the preferred industry measurement of net interest income as it provides a relevant comparison of net interest income arising from taxable and tax-exempt sources. In addition, certain performance measures, including the efficiency ratio and net interest margin utilize net interest income on a taxable-equivalent basis.

In addition, certain performance measures are presented excluding notable items in the fourth quarter of 2017. Management believes this information helps investors understand the effect of these items on reported results.

There may be limits in the usefulness of these measures to investors. As a result, the Company encourages readers to consider the consolidated financial statements and other financial information contained in this press release in their entirety, and not to rely on any single financial measure. A table follows that shows the Company’s calculation of these non-GAAP financial measures.

                                                                                                                                                       
U.S. Bancorp
Consolidated Statement of Income
                                                                                                             Three Months Ended                                                                                       Year Ended
(Dollars and Shares in Millions, Except Per Share Data)                                                         December 31,                                                                      December 31,
                                                                                ------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------
(Unaudited)                                                                         2017                          2016                           2017                              2016
---------------------------------------------------------- -------------------- ------------------------------------------------ ------------------------------------------------ ------------------------------------------------- --------------------------------
Interest Income
Loans                                                                           $3,070                                           $2,771                                           $11,827                                              $10,810
Loans held for sale                                                                 40                                               44                                               144                                                  154
Investment securities                                                              579                                              523                                             2,232                                                2,078
Other interest income                                                               51         36         182            125  
                                                                                ------ -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ---------- --------------------
  Total interest income                                                          3,740                                            3,374                                            14,385                                               13,167
Interest Expense
Deposits                                                                           311                                              170                                             1,041                                                  622
Short-term borrowings                                                               86                                               62                                               319                                                  263
Long-term debt                                                                     199        187         784            754  
                                                                                ------ -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ---------- --------------------
  Total interest expense                                                           596        419       2,144          1,639  
                                                                                ------ -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ---------- --------------------
Net interest income                                                              3,144                                            2,955                                            12,241                                               11,528
Provision for credit losses                                                        335        342       1,390          1,324  
                                                                                ------ -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ---------- --------------------
Net interest income after provision for credit losses                            2,809                                            2,613                                            10,851                                               10,204
Noninterest Income
Credit and debit card revenue                                                      333                                              316                                             1,252                                                1,177
Corporate payment products revenue                                                 189                                              171                                               753                                                  712
Merchant processing services                                                       400                                              404                                             1,590                                                1,592
ATM processing services                                                             95                                               87                                               362                                                  338
Trust and investment management fees                                               394                                              368                                             1,522                                                1,427
Deposit service charges                                                            198                                              186                                               751                                                  725
Treasury management fees                                                           152                                              147                                               618                                                  583
Commercial products revenue                                                        211                                              217                                               849                                                  871
Mortgage banking revenue                                                           202                                              240                                               834                                                  979
Investment products fees                                                            43                                               38                                               163                                                  158
Securities gains (losses), net                                                      10                                                6                                                57                                                   22
Other                                                                              214        251         860            993  
                                                                                ------ -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ---------- --------------------
  Total noninterest income                                                       2,441                                            2,431                                             9,611                                                9,577
Noninterest Expense
Compensation                                                                     1,499                                            1,357                                             5,746                                                5,212
Employee benefits                                                                  304                                              261                                             1,186                                                1,119
Net occupancy and equipment                                                        259                                              247                                             1,019                                                  988
Professional services                                                              114                                              156                                               419                                                  502
Marketing and business development                                                 251                                              107                                               542                                                  435
Technology and communications                                                      254                                              238                                               977                                                  955
Postage, printing and supplies                                                      79                                               75                                               323                                                  311
Other intangibles                                                                   44                                               45                                               175                                                  179
Other                                                                            1,135        518       2,558          1,975  
                                                                                ------ -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ---------- --------------------
  Total noninterest expense                                                      3,939      3,004      12,945         11,676  
                                                                                ------ -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ---------- --------------------
Income before income taxes                                                       1,311                                            2,040                                             7,517                                                8,105
Applicable income taxes                                                           (375 )                         549       1,264          2,161  
                                                                                ------ -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ---------- --------------------
Net income                                                                       1,686                                            1,491                                             6,253                                                5,944
Net (income) loss attributable to noncontrolling interests                          (4 )                         (13 )                          (35 )                             (56 )
                                                                                ------ -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ---------- --------------------
Net income attributable to U.S. Bancorp                                         $1,682     $1,478      $6,218         $5,888  
                                                                                ------ -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ---------- --------------------
Net income applicable to U.S. Bancorp common shareholders                       $1,611     $1,391      $5,913         $5,589  
                                                                                ------ -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                     
Earnings per common share                                                         $.97                                             $.82                                             $3.53                                                $3.25
Diluted earnings per common share                                                 $.97                                             $.82                                             $3.51                                                $3.24
Dividends declared per common share                                               $.30                                             $.28                                             $1.16                                                $1.07
Average common shares outstanding                                                1,659                                            1,700                                             1,677                                                1,718
Average diluted common shares outstanding                     1,664      1,705       1,683          1,724  
---------------------------------------------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                     
                                                                                 
U.S. Bancorp
Consolidated Ending Balance Sheet
                                                                                                                         
                                                                                      December 31,                                         December 31,
(Dollars in Millions)                                                      2017                              2016
----------------------------------------------- -------------------- -------------------------------------------------- --------------------------------
Assets
Cash and due from banks                                               $19,505                                              $15,705
Investment securities
  Held-to-maturity                                                     44,362                                               42,991
  Available-for-sale                                                   68,137                                               66,284
Loans held for sale                                                     3,554                                                4,826
Loans
  Commercial                                                           97,561                                               93,386
  Commercial real estate                                               40,463                                               43,098
  Residential mortgages                                                59,783                                               57,274
  Credit card                                                          22,180                                               21,749
  Other retail                                                         57,324         53,864  
                                                                     -------- -------------------- -------------------- ---------- --------------------
    Total loans, excluding covered loans                              277,311                                              269,371
  Covered loans                                                         3,121          3,836  
                                                                     -------- -------------------- -------------------- ---------- --------------------
    Total loans                                                       280,432                                              273,207
      Less allowance for loan losses                                   (3,925 )                          (3,813 )
                                                                     -------- -------------------- -------------------- ---------- --------------------
      Net loans                                                       276,507                                              269,394
Premises and equipment                                                  2,432                                                2,443
Goodwill                                                                9,434                                                9,344
Other intangible assets                                                 3,228                                                3,303
Other assets                                                           34,881         31,674  
                                                                     -------- -------------------- -------------------- ---------- --------------------
      Total assets                                                   $462,040       $445,964  
                                                                     -------- -------------------- -------------------- ---------- --------------------
                                                                                                                         
Liabilities and Shareholders’ Equity
Deposits
  Noninterest-bearing                                                 $87,557                                              $86,097
  Interest-bearing                                                    259,658        248,493  
                                                                     -------- -------------------- -------------------- ---------- --------------------
    Total deposits                                                    347,215                                              334,590
Short-term borrowings                                                  16,651                                               13,963
Long-term debt                                                         32,259                                               33,323
Other liabilities                                                      16,249         16,155  
                                                                     -------- -------------------- -------------------- ---------- --------------------
    Total liabilities                                                 412,374                                              398,031
Shareholders’ equity
  Preferred stock                                                       5,419                                                5,501
  Common stock                                                             21                                                   21
  Capital surplus                                                       8,464                                                8,440
  Retained earnings                                                    54,142                                               50,151
  Less treasury stock                                                 (17,602 )                                            (15,280 )
  Accumulated other comprehensive income (loss)                        (1,404 )                          (1,535 )
                                                                     -------- -------------------- -------------------- ---------- --------------------
    Total U.S. Bancorp shareholders’ equity                            49,040                                               47,298
  Noncontrolling interests                                                626            635  
                                                                     -------- -------------------- -------------------- ---------- --------------------
    Total equity                                                       49,666         47,933  
                                                                     -------- -------------------- -------------------- ---------- --------------------
    Total liabilities and equity                                     $462,040       $445,964  
-----------------------------------------------                      -------- -------------------- -------------------- ---------- --------------------
                                                                                                                                    
                                                                                                                                                                                                                                      
U.S. Bancorp
Non-GAAP Financial Measures
                                                                                                                                                                                                                                                                                                                                                                 
                                                                                                                                                                                                                                                                                    December 31,                                                          September 30,                                                               June 30,                                                                                   March 31,                                                           December 31,
(Dollars in Millions, Unaudited)                                                                                                                                                                                                   2017                                                2017                                                2017                                                  2017                                                2016
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- -------------------- ---------------------------------------------------------------------- ---------------------------------------------------------------------- ---------------------------------------------------------------------- -------------------- ---------------------------------------------------------------------- --------------------------------------------------
Total equity                                                                                                                                                                                                                                   $49,666                                                                $49,351                                                                $48,949                                                                                     $48,433                                                                $47,933
Preferred stock                                                                                                                                                                                                                                 (5,419 )                                                               (5,419 )                                                               (5,419 )                                                                                    (5,419 )                                                               (5,501 )
Noncontrolling interests                                                                                                                                                                                                                          (626 )                                                                 (628 )                                                                 (629 )                                                                                      (635 )                                                                 (635 )
Goodwill (net of deferred tax liability) (1)                                                                                                                                                                                                    (8,613 )                                                               (8,141 )                                                               (8,181 )                                                                                    (8,186 )                                                               (8,203 )
Intangible assets, other than mortgage servicing rights                                                                                                                                                                                           (583 )                           (595 )                           (634 )                             (671 )                           (712 )                     
                                                                                                                                                                                                                                               ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- --------------------
  Tangible common equity (a)                                                                                                                                                                                                                    34,425                                                                 34,568                                                                 34,086                                                                                      33,522                                                                 32,882
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Tangible common equity (as calculated above)                                                                                                                                                                                                    34,425                                                                 34,568                                                                 34,086                                                                                      33,522                                                                 32,882
Adjustments (2)                                                                                                                                                                                                                                   (550 )                            (52 )                            (51 )                             (136 )                            (55 )                     
                                                                                                                                                                                                                                               ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- --------------------
                                                                                                                                                                                                                                                33,875                                                                 34,516                                                                 34,035                                                                                      33,386                                                                 32,827
  Common equity tier 1 capital estimated for the Basel III
  fully implemented standardized and advanced approaches (b)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Total assets                                                                                                                                                                                                                                   462,040                                                                459,227                                                                463,844                                                                                     449,522                                                                445,964
Goodwill (net of deferred tax liability) (1)                                                                                                                                                                                                    (8,613 )                                                               (8,141 )                                                               (8,181 )                                                                                    (8,186 )                                                               (8,203 )
Intangible assets, other than mortgage servicing rights                                                                                                                                                                                           (583 )                           (595 )                           (634 )                             (671 )                           (712 )                     
                                                                                                                                                                                                                                               ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- --------------------
  Tangible assets (c)                                                                                                                                                                                                                          452,844                                                                450,491                                                                455,029                                                                                     440,665                                                                437,049
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Risk-weighted assets, determined in accordance with                                                                                                                                                                                            367,771                      *                                         363,957                                                                361,164                                                                                     356,373                                                                358,237
prescribed transitional standardized approach regulatory
requirements (d)
Adjustments (3)                                                                                                                                                                                                                                  4,473   *                        3,907         3,967           4,731         4,027    
                                                                                                                                                                                                                                               ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- --------------------
                                                                                                                                                                                                                                               372,244                      *                                         367,864                                                                365,131                                                                                     361,104                                                                362,264
  Risk-weighted assets estimated for the Basel III fully
  implemented standardized approach (e)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Risk-weighted assets, determined in accordance with                                                                                                                                                                                            287,211                      *                                         287,800                                                                287,124                                                                                     285,963                                                                277,141
prescribed transitional advanced approaches regulatory requirements
Adjustments (4)                                                                                                                                                                                                                                  4,769   *                        4,164         4,231           5,046         4,295    
                                                                                                                                                                                                                                               ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- --------------------
                                                                                                                                                                                                                                               291,980                      *                                         291,964                                                                291,355                                                                                     291,009                                                                281,436
  Risk-weighted assets estimated for the Basel III fully
  implemented advanced approaches (f)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Ratios *
Tangible common equity to tangible assets (a)/(c)                                                                                                                                                                                                  7.6                      %                                             7.7                      %                                             7.5                      %                                                                  7.6                      %                                             7.5   %
Tangible common equity to risk-weighted assets (a)/(d)                                                                                                                                                                                             9.4                                                                    9.5                                                                    9.4                                                                                         9.4                                                                    9.2
Common equity tier 1 capital to risk-weighted assets estimated for                                                                                                                                                                                 9.1                                                                    9.4                                                                    9.3                                                                                         9.2                                                                    9.1
the Basel III fully implemented standardized approach (b)/(e)
Common equity tier 1 capital to risk-weighted assets estimated for                                                                                                                                                                                11.6                                                                   11.8                                                                   11.7                                                                                        11.5                                                                   11.7
the Basel III fully implemented advanced approaches (b)/(f)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                          Three Months Ended                                                                                                                                                                                                                              Year Ended
                                                                                       -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- -------------------------------------------------------------------------------------------------------------------------
                                                                                                                                 December 31,                                                               September 30,                                                               June 30,                                                              March 31,                                                           December 31,                                                                                December 31,                                                           December 31,
                                                                                                                                         2017                                                     2017                                                2017                                                2017                                                2016                                                  2017                                                2016
                                                                                       --------------------------------------------------------------------------- --------------------------------------------------------------------------- ---------------------------------------------------------------------- ---------------------------------------------------------------------- ---------------------------------------------------------------------- -------------------- ---------------------------------------------------------------------- --------------------------------------------------
Net interest income                                                                          $3,144                                                                      $3,135                                                                 $3,017                                                                 $2,945                                                                 $2,955                                                                                     $12,241                                                                $11,528
Taxable-equivalent adjustment (5)                                                                53                 51            51            50            49             205           203    
                                                                                       ------------ -------------------- -------------------- -------------------- ------------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- --------------------
  Net interest income, on a taxable-equivalent basis                                          3,197                                                                       3,186                                                                  3,068                                                                  2,995                                                                  3,004                                                                                      12,446                                                                 11,731
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Net interest income, on a taxable-equivalent basis (as calculated                             3,197                                                                       3,186                                                                  3,068                                                                  2,995                                                                  3,004                                                                                      12,446                                                                 11,731
above)
Noninterest income                                                                            2,441                                                                       2,422                                                                  2,419                                                                  2,329                                                                  2,431                                                                                       9,611                                                                  9,577
Less: Securities gains (losses), net                                                             10                  9             9            29             6              57            22    
                                                                                       ------------ -------------------- -------------------- -------------------- ------------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- --------------------
  Total net revenue, excluding net securities gains (losses) (g)                              5,628                                                                       5,599                                                                  5,478                                                                  5,295                                                                  5,429                                                                                      22,000                                                                 21,286
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Noninterest expense (h)                                                                       3,939                                                                       3,039                                                                  3,023                                                                  2,944                                                                  3,004                                                                                      12,945                                                                 11,676
Less: Intangible amortization                                                                    44                 44            43            44            45             175           179    
                                                                                       ------------ -------------------- -------------------- -------------------- ------------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- --------------------
  Noninterest expense, excluding intangible amortization (i)                                  3,895                                                                       2,995                                                                  2,980                                                                  2,900                                                                  2,959                                                                                      12,770                                                                 11,497
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Efficiency ratio (h)/(g)                                                                       70.0                      %                                                 54.3                      %                                            55.2                      %                                            55.6                      %                                            55.3                      %                                                                 58.8                      %                                            54.9   %
Tangible efficiency ratio (i)/(g)                                           69.2               53.5          54.4          54.8          54.5            58.0          54.0    
----------------------------------------------------------------- -------------------- ------------ -------------------- -------------------- -------------------- ------------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
  * Preliminary data. Subject to change prior to filings with
 applicable regulatory agencies.
(1) Includes goodwill related to certain investments in
unconsolidated financial institutions per prescribed regulatory
requirements.
(2) Includes net losses on cash flow hedges included in accumulated
other comprehensive income (loss) and other adjustments.
(3) Includes higher risk-weighting for unfunded loan commitments,
investment securities, residential mortgages, mortgage servicing
rights and other adjustments.
(4) Primarily reflects higher risk-weighting for mortgage
servicing rights.
(5) Utilizes a tax rate of 35 percent for those assets and
liabilities whose income or expense is not included for federal
income tax purposes.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
 
U.S. Bancorp
Non-GAAP Financial Measures (continued)
                                                                
                                                                                                           Three Months
                                                                                                                  Ended                                           Year Ended
(Dollars and Shares in Millions, Except Per Share Data)                                                    December 31,                                         December 31,
(Unaudited)                                                                                     2017                              2017
----------------------------------------------------------------------------------------- -------------------------------------------------- --------------------------------
Net income applicable to U.S. Bancorp common shareholders                                   $1,611                                               $5,913
Less: Notable items (1)                                                                        150            150  
                                                                                          -------- -------------------- -------------------- ---------- --------------------
Net income applicable to U.S. Bancorp common shareholders, excluding                        $1,461                                               $5,763
notable items (a)
                                                                                                                                              
Average diluted common shares outstanding (b)                                                1,664                                                1,683
                                                                                                                                              
Diluted earnings per common share, excluding notable items (a)/(b)                            $.88                                                $3.42
                                                                                                                                              
Net income attributable to U.S. Bancorp                                                     $1,682                                               $6,218
Less: Notable items (1)                                                                        150            150  
                                                                                          -------- -------------------- -------------------- ---------- --------------------
Net income attributable to U.S. Bancorp, excluding notable items                            $1,532                                               $6,068
Annualized net income attributable to U.S. Bancorp, excluding                               $6,078                                               $6,068
notable items (c)
                                                                                                                                              
Average assets (d)                                                                        $456,098                                             $448,582
                                                                                                                                              
Return on average assets, excluding notable items (c)/(d)                                     1.33 %                                               1.35 %
                                                                                                                                              
Net income applicable to U.S. Bancorp common shareholders, excluding                        $1,461                                               $5,763
notable items (as calculated above)
Annualized net income applicable to U.S. Bancorp common                                     $5,796                                               $5,763
shareholders, excluding notable items (e)
                                                                                                                                              
Average common equity (f)                                                                  $43,415                                              $42,976
                                                                                                                                              
Return on average common equity, excluding notable items (e)/(f)           13.4 %                            13.4 %
----------------------------------------------------------------------------------------- -------- -------------------- -------------------- ---------- --------------------
                                                                                                                                              
(1) Notable items for the three months ended December 31, 2017,
include: $910 million reduction in income tax expense due to tax
reform legislation, $608 million regulatory and legal accrual,
$105 million (after-tax) contribution to the U.S. Bank Foundation
and $47 million (after-tax) one-time bonus to certain eligible
employees.
                                               

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20180117005303r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20180117005303/en/

SOURCE: U.S. Bancorp

U.S. Bancorp 
Dana Ripley, 612-303-3167 
Media 
or 
Jennifer Thompson, 612-303-0778 
Investors/Analysts


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